(2023 BLUE NOTES) - Civil Law

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BAR OPERATIONS 2023 CIVIL LAW
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TABLE OF CONTENTS
PERSONS AND FAMILY RELATIONS
TABLE OF CONTENTS ..........................................................................................................................6
I. PERSONS ...................................................................................................................................... 14
A. WHEN LAW TAKES EFFECT DOCTRINE ................................................................................. 14

B. IGNORANCE OF THE LAW ................................................................................................... 15
C. RETROACTIVITY OF LAWS ................................................................................................... 15
D. MANDATORY OR PROHIBITORY LAWS ................................................................................ 15
E. WAIVER OF RIGHTS ............................................................................................................ 16
F. PRESUMPTION AND APPLICABILITY OF CUSTOM ................................................................ 18
G. LEGAL PERIODS .................................................................................................................. 18
H. TERRITORIALITY PRINCIPLE ................................................................................................ 18
I. CONFLICT OF LAWS ............................................................................................................ 18
1. LEX NATIONALII ...................................................................................................................... 19
2. LEX REI SITAE .......................................................................................................................... 20
3. LEX LOCI CELEBRATIONIS........................................................................................................ 21
4. DOCTRINE OF RENVOI ............................................................................................................ 23
J. HUMAN RELATIONS IN RELATION TO PERSONS .................................................................. 27
K. CAPACITY TO ACT .............................................................................................................. 30
1. RESTRICTIONS ON CAPACITY TO ACT ..................................................................................... 31
2. BIRTH AND DEATH OF NATURAL PERSONS ............................................................................ 31
3. PRESUMPTION OF SURVIVORSHIP ......................................................................................... 31
L. SURNAMES ........................................................................................................................ 31
M. RULES GOVERNING PERSONS WHO ARE ABSENT ................................................................ 32
II. MARRIAGE ............................................................................................................................... 35
A. GENERAL PRINCIPLES ......................................................................................................... 36

1. ESSENTIAL REQUISITES ........................................................................................................... 36
2. FORMAL REQUISITES .............................................................................................................. 36
B. MIXED MARRIAGES AND FOREIGN DIVORCE ....................................................................... 38
C. VOID MARRIAGES (SEE TAN-ANDAL V. ANDAL, G.R. NO. 196359, MAY 11, 2021) ................. 39
D. VOIDABLE MARRIAGES ...................................................................................................... 43
E. EFFECT OF DEFECTIVE MARRIAGES ..................................................................................... 44
F. FOREIGN MARRIAGES ........................................................................................................ 45
G. LEGAL SEPARATION ........................................................................................................... 49
H. PROPERTY RELATIONS BETWEEN HUSBAND AND WIFE ....................................................... 50
1. DONATIONS PROPTER NUPTIAS ............................................................................................. 52
2. VOID DONATIONS BY THE SPOUSES ....................................................................................... 53
3. ABSOLUTE COMMUNITY OF PROPERTY ................................................................................. 53
4. CONJUGAL PARTNERSHIP OF GAINS REGIME........................................................................ 55
5. SEPARATION OF PROPERTY REGIME ...................................................................................... 58
6. PROPERTY REGIME OF UNIONS WITHOUT MARRIAGE .......................................................... 59
7. JUDICIAL SEPARATION OF PROPERTY ..................................................................................... 61

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I. THE FAMILY ....................................................................................................................... 61

1. GENERAL PRINCIPLES ............................................................................................................. 61
J. THE FAMILY HOME ............................................................................................................ 62
1. GENERAL PRINCIPLES ............................................................................................................. 62
K. PATERNITY AND FILIATION ................................................................................................. 63
1. CONCEPTS OF PATERNITY, FILIATION, AND LEGITIMACY ....................................................... 63
2. LEGITIMATE CHILDREN ........................................................................................................... 63
3. ILLEGITIMATE CHILDREN ........................................................................................................ 66
4. LEGITIMATED CHILDREN ........................................................................................................ 68
5. ADOPTED CHILDREN ............................................................................................................... 70
4. SUPPORT ........................................................................................................................... 75
1. WHAT COMPRISES SUPPORT.................................................................................................. 75
2. WHO ARE OBLIGED TO GIVE SUPPORT .................................................................................. 75
3. SOURCE OF SUPPORT ............................................................................................................. 76
4. ORDER OF SUPPORT ............................................................................................................... 76
5. PARENTAL AUTHORITY ...................................................................................................... 77
1. CONCEPT OF PARENTAL AUTHORITY ..................................................................................... 77
2. SUBSTITUTE PARENTAL AUTHORITY ...................................................................................... 78
3. SPECIAL PARENTAL AUTHORITY ............................................................................................. 79
4. EFFECTS OF PARENTAL AUTHORITY ....................................................................................... 79
PROPERTY, OWNERSHIP, AND ITS MODIFICATIONS
I. CLASSIFICATION OF PROPERTY .................................................................................................. 83
A. IMMOVABLES .................................................................................................................... 83
B. MOVABLES ........................................................................................................................ 85
II. BUNDLE OF RIGHTS ...................................................................................................................... 86
A. OWNERSHIP ...................................................................................................................... 86
B. RIGHT OF ACCESSION ......................................................................................................... 88
GENERAL PRINCIPLES ............................................................................................................. 88
ACCESSION INDUSTRIAL ......................................................................................................... 89
ACCESSION NATURAL ............................................................................................................. 89
C. ACTIONS TO RECOVER OWNERSHIP AND POSSESSION OF PROPERTY .................................. 97
ACCION REIVINDICATORIA ..................................................................................................... 97
ACCION PUBLICIANA .............................................................................................................. 99
ACCION INTERDICTAL ............................................................................................................. 99
QUIETING OF TITLE ............................................................................................................... 100
D. CO-OWNERSHIP ............................................................................................................... 103
DISTINCTIONS BETWEEN RIGHT TO PROPERTY OWNED IN COMMON AND FULL OWNERSHIP
OVER THE IDEAL SHARE ............................................................................................................. 103
CONTRIBUTION FOR EXPENSES ............................................................................................ 104
REDEMPTION ........................................................................................................................ 104
PARTITION ............................................................................................................................ 105
E. POSSESSION .................................................................................................................... 107
POSSESSION IN THE CONCEPT OF A HOLDER ....................................................................... 108

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POSSESSION IN THE CONCEPT OF AN OWNER ..................................................................... 108

RELEVANCE OF GOOD FAITH AND BAD FAITH ..................................................................... 108
RULES FOR MOVABLES ......................................................................................................... 109
F. USUFRUCT ....................................................................................................................... 113
RIGHTS AND OBLIGATIONS OF USUFRUCTUARY .................................................................. 113
CLASSES OF USUFRUCT......................................................................................................... 116
EXTINGUISHMENT OF THE USUFRUCT ................................................................................. 118
G. EASEMENTS ..................................................................................................................... 119
CHARACTERISTICS................................................................................................................. 119
KINDS OF EASEMENTS .......................................................................................................... 120
MODES OF ACQUIRING EASEMENTS .................................................................................... 121
EFFECTS OF EASEMENT ........................................................................................................ 122
EXTINGUISHMENT OF EASEMENTS ...................................................................................... 122
III. DIFFERENT MODES OF ACQUIRING OWNERSHIP ........................................................................ 125
A. OCCUPATION ................................................................................................................... 125

B. TRADITION ...................................................................................................................... 126
C. DONATION ...................................................................................................................... 127
FEATURES ............................................................................................................................. 127
CLASSIFICATIONS .................................................................................................................. 127
HOW TO DISTINGUISH DONATION INTER VIVOS FROM DONATION MORTIS CAUSA? ....... 128
FORM .................................................................................................................................... 128
LIMITATIONS......................................................................................................................... 130
REDUCTION AND REVOCATION OF DONATION ................................................................... 131
D. PRESCRIPTION ................................................................................................................. 134
DISTINCTIONS BETWEEN ACQUISITIVE AND EXTINCTIVE PRESCRIPTION ............................ 134
DISTINCTIONS BETWEEN EXTINCTIVE PRESCRIPTION AND LACHES .................................... 137
IV. LAND TITLES & DEEDS ............................................................................................................... 143
A. TORRENS SYSTEM ............................................................................................................ 143

1. GENERAL PRINCIPLES ........................................................................................................... 143
B. REGALIAN DOCTRINE ....................................................................................................... 146
C. NATIONALITY RESTRICTIONS ON LAND OWNERSHIP ......................................................... 147
D. ORIGINAL REGISTRATION ................................................................................................. 149
1. ORDINARY REGISTRATION .................................................................................................... 150
1. WHO MAY APPLY .................................................................................................................. 160
2. DECREE OF REGISTRATION ................................................................................................... 161
3. REVIEW OF DECREE OF REGISTRATION; INNOCENT PURCHASER FOR VALUE (IPV); RIGHTS OF
IPV .............................................................................................................................................. 162
E. AN ACT IMPROVING THE CONFIRMATION PROCESS FOR IMPERFECT LAND TITLES (RA 11573)
164
F. CERTIFICATE OF TITLE....................................................................................................... 168
G. SUBSEQUENT REGISTRATION ........................................................................................... 172
1. VOLUNTARY DEALINGS......................................................................................................... 174
2. INVOLUNTARY DEALINGS ..................................................................................................... 177
H. NON-REGISTRABLE PROPERTIES ....................................................................................... 182

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I. DEALINGS WITH UNREGISTERED LANDS ........................................................................... 183

J. ASSURANCE FUND ........................................................................................................... 184
1. NATURE OF ASSURANCE FUND ............................................................................................ 184
2. CONDITIONS FOR COMPENSATION FROM ASSURANCE FUND ............................................ 185
3. PRESCRIPTIVE PERIOD (SEC. 102, P.D. 1529) ........................................................................ 185
K. RECONSTITUTION OF TITLES ............................................................................................. 186
V. WILLS AND SUCCESSION............................................................................................................. 198
A. GENERAL PROVISIONS ..................................................................................................... 199

B. TESTAMENTARY SUCCESSION........................................................................................... 200
III. WILLS (GENERAL PROVISIONS) ............................................................................................. 200
IV. CHARACTERISTICS OF A WILL ............................................................................................... 200
V. NON-DELEGABILITY OF A TESTAMENTARY POWER ............................................................. 201
VI. APPLICABLE LAW AS TO FORM AND SUBSTANCE OF A WILL ............................................... 202
VII. TESTAMENTARY CAPACITY AND INTENT.................................................................... 202
VIII. FORMS OF NOTARIAL AND HOLOGRAPHIC WILLS ..................................................... 203
IX. WITNESSES TO A NOTARIAL WILL ........................................................................................ 207
X. CONFLICT RULES ................................................................................................................... 207
XI. MODES OF REVOCATION OF WILLS AND TESTAMENTARY DISPOSITIONS ........................... 207
XII.HEIRS .................................................................................................................................... 211
XIII. LEGITIME .................................................................................................................... 215
XIV. PRETERITION .............................................................................................................. 224
XV. CONDITIONAL DISPOSITIONS AND DISPOSITIONS ..................................................... 225
XVI. VOID TESTAMENTARY DISPOSITIONS ........................................................................ 227
XVII. DISINHERITANCE ........................................................................................................ 227
XVIII. LEGACIES AND DEVISES .............................................................................................. 232
VIII. INTESTATE SUCCESSION ................................................................................................... 236
1. RELATIONSHIP ...................................................................................................................... 236
2. CAUSES OF INTESTACY ......................................................................................................... 237
3. ORDER OF INTESTATE SUCCESSION ..................................................................................... 238
4. RULE OF PROXIMITY AND RULE OF EQUALITY ..................................................................... 239
5. DETERMINATION OF HEIRS .................................................................................................. 239
6. SUCCESIONAL BARRIER (THE “IRON CURTAIN RULE”) ......................................................... 240
7. SUCCESSIONAL RIGHTS OF ADOPTED CHILDREN ................................................................. 240
8. SUCCESSIONAL RIGHTS OF ADOPTING PARENTS ................................................................. 240
9. SUCCESSIONAL RIGHTS OF MARITAL AND NON-MARITAL CHILDREN ................................. 240
10.SUCCESSIONAL RIGHTS OF THE SURVIVING SPOUSE ........................................................... 240
11.SUCCESSIONAL RIGHTS OF COLLATERAL RELATIVES ............................................................ 241
IX. PROVISIONS COMMON TO TESTATE AND INTESTATE SUCCESSION .................................... 245
II. CAPACITY TO SUCCEED ......................................................................................................... 245
2. RIGHT OF REPRESENTATION IN TESTACY AND INTESTACY .................................................. 248
3. RIGHT OF ACCRETION IN TESTAMENTARY SUCCESSION AND INTESTACY ........................... 249
4. ACCEPTANCE AND REPUDIATION OF INHERITANCE ............................................................ 250
OBLIGATIONS AND CONTRACTS
I. OBLIGATIONS.............................................................................................................................. 256

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1. DEFINITION ........................................................................................................................... 256
2. ESSENTIAL ELEMENTS OF AN OBLIGATION .......................................................................... 256
3. SOURCES OF OBLIGATIONS .................................................................................................. 257
B. NATURE AND EFFECTS OF OBLIGATIONS ........................................................................... 258
1. BREACHES OF OBLIGATIONS ................................................................................................ 260
2. REMEDIES AVAILABLE TO CREDITOR IN CASES OF BREACH ................................................. 264
C. DIFFERENT KINDS OF OBLIGATIONS .................................................................................. 265
D. EXTINGUISHMENT ........................................................................................................... 275
1. PAYMENT OR PERFORMANCE .............................................................................................. 275
2. LOSS OF THE THING DUE OR IMPOSSIBILITY OF PERFORMANCE ........................................ 281
3. CONDONATION OR REMISSION OF DEBT ............................................................................. 282
4. CONFUSION .......................................................................................................................... 283
5. COMPENSATION ................................................................................................................... 283
6. NOVATION ............................................................................................................................ 284
II. CONTRACTS ............................................................................................................................... 289

1. DEFINITION OF A CONTRACT ................................................................................................ 289
2. ELEMENTS OF A CONTRACT ................................................................................................. 289
B. BASIC PRINCIPLES OF CONTRACTS .................................................................................... 291
1. OBLIGATORY FORCE OF A CONTRACT .................................................................................. 291
2. AUTONOMY OR FREEDOM TO STIPULATE ........................................................................... 291
3. BINDING EFFECT OF A CONTRACT ........................................................................................ 291
4. PRIVITY OF CONTRACT OR PRINCIPLE OF RELATIVITY .......................................................... 292
5. CONSENSUALITY OF CONTRACTS ......................................................................................... 292
C. ESSENTIAL REQUISITES OF A CONTRACT ........................................................................... 293
1. CONSENT .............................................................................................................................. 293
2. SUBJECT MATTER (SM) ......................................................................................................... 298
3. CAUSE OR CONSIDERATION ................................................................................................. 298
D. DEFECTIVE CONTRACTS .................................................................................................... 299
1. RESCISSIBLE CONTRACTS ...................................................................................................... 299
2. VOIDABLE CONTRACTS ......................................................................................................... 301
3. UNENFORCEABLE CONTRACTS ............................................................................................. 303
4. VOID CONTRACTS ................................................................................................................. 303
III. NATURAL OBLIGATIONS ............................................................................................................ 306
SPECIAL CONTRACTS
I. SALES.......................................................................................................................................... 308
A. DEFINITION AND ESSENTIAL REQUISITES .......................................................................... 308

B. CONTRACT OF SALE.......................................................................................................... 312
1. CONTRACT TO SELL............................................................................................................... 313
2. OPTION CONTRACT .............................................................................................................. 314
3, RIGHT OF FIRST REFUSAL ....................................................................................................... 315

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C. EARNEST MONEY (ART. 1482) .......................................................................................... 316

D. DOUBLE SALES ................................................................................................................. 316
E. RISK OF LOSS ................................................................................................................... 317
F. BREACH OF CONTRACT OF SALE ....................................................................................... 318
1. RECTO LAW: SALE OF MOVABLES ON INSTALLMENT (ARTS. 1484-1486) ............................ 318
2. MACEDA LAW (R.A. 6552) .................................................................................................... 319
G. EXTINGUISHMENT OF THE SALE ....................................................................................... 320
1. CONVENTIONAL REDEMPTION/PACTO DE RETRO SALE ...................................................... 320
2. LEGAL REDEMPTION ............................................................................................................. 322
H. EQUITABLE MORTGAGE ................................................................................................... 323
II. LEASE......................................................................................................................................... 325
A. KINDS OF LEASE ............................................................................................................... 325

B. RIGHTS AND OBLIGATIONS OF THE LESSOR AND OF THE LESSEE ........................................ 326
III. AGENCY .................................................................................................................................... 331
A. DEFINITION OF AGENCY ................................................................................................... 331

B. NATURE, FORMS, AND KINDS OF AGENCY ........................................................................ 332
HOW AGENCY IS REVOKED ........................................................................................................ 339
C. OBLIGATIONS OF THE AGENT ........................................................................................... 340
D. OBLIGATIONS OF THE PRINCIPAL ...................................................................................... 344
E. MODES OF EXTINGUISHMENT .......................................................................................... 346
IV. CREDIT TRANSACTIONS ............................................................................................................. 350
A. LOAN............................................................................................................................... 350
1. KINDS .................................................................................................................................... 351
B. DEPOSIT .......................................................................................................................... 357
C. GUARANTY AND SURETYSHIP ........................................................................................... 365
D. REAL ESTATE MORTGAGE ................................................................................................. 375
E. ANTICHRESIS ................................................................................................................... 384
V. COMPROMISE............................................................................................................................ 386
VI. QUASI-CONTRACTS ................................................................................................................... 389
VII. TORTS AND DAMAGES ............................................................................................................. 392
A. PRINCIPLES ...................................................................................................................... 392

1. ABUSE OF RIGHTS ................................................................................................................. 392
2. UNJUST ENRICHMENT .......................................................................................................... 393
3. LIABILITY WITHOUT FAULT ................................................................................................... 393
4. ACTS CONTRARY TO LAW ..................................................................................................... 394
5. ACTS CONTRARY TO MORALS............................................................................................... 395
B. CLASSIFICATION OF TORTS ............................................................................................... 395
1. INTENTIONAL ........................................................................................................................ 395
2. NEGLIGENT ........................................................................................................................... 395

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3. STRICT LIABILITY ................................................................................................................... 395

C. THE TORTFEASOR ............................................................................................................ 395
1. JOINT .................................................................................................................................... 395
2. DIRECT .................................................................................................................................. 396
D. QUASI-DELICT VS. CULPA CONTRACTUAL VS. CULPA CRIMINAL ......................................... 396
1. NATURE OF LIABILITY ........................................................................................................... 397
6. PROXIMATE CAUSE .......................................................................................................... 397
A. CONCEPT............................................................................................................................... 397
B. DOCTRINE OF LAST CLEAR CHANCE ..................................................................................... 399
7. VICARIOUS LIABILITY........................................................................................................ 399
8. RES IPSA LOQUITUR ......................................................................................................... 404
9. DAMNUM ABSQUE INJURIA ............................................................................................. 405
10. DEFENSES ........................................................................................................................ 406
11. NEGLIGENCE .................................................................................................................... 408
B. STANDARD OF CARE ............................................................................................................. 408
C. PRESUMPTION OF NEGLIGENCE........................................................................................... 410
12. DAMAGES........................................................................................................................ 411
A. KINDS OF DAMAGES ............................................................................................................. 411
13. DAMAGES IN CASE OF DEATH........................................................................................... 419
14. DUTY OF INJURED PARTY ................................................................................................. 419

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I. PERSONS A. When Law Takes Effect Doctrine
GENERAL RULE: Laws shall take effect after

fifteen days following the completion of their
TOPIC OUTLINE UNDER THE SYLLABUS
publication either in the Official Gazette or in a
newspaper of general circulation in the
I. Persons Philippines, unless it is otherwise provided. (Article
A. When Law Takes Effect Doctrine 2, New Civil Code as amended by E.O. No. 200)
B. Ignorance Of The Law
C. Retroactivity Of Laws NOTE: The phrase “unless it is otherwise
D. Mandatory Or Prohibitory Laws provided” as written in Article 2 of the New Civil
E. Waiver Of Rights Code refers to the 15-day period before which a
F. Presumption And Applicability Of law takes effect and not to provision in the same
Custom article requiring publication. (Tañada v. Tuvera,
G. Legal Periods G.R. No. L-63915, 1986)
H. Territoriality Principle
I. Conflict Of Laws NOTES REGARDING PUBLICATION
1. Lex Nationalii 1. Publication is mandatory.
2. Lex Rei Sitae 2. Publication must be in full. Otherwise, it is
3. Lex Loci Celebrationis no publication at all. (Ibid.)
4. Doctrine Of Renvoi
3. The purpose of publication is to inform the
J. Human Relations In Relation To
Persons public of its contents. (Ibid.)
K. Capacity To Act 4. It applies to all statutes, including local
1. Restrictions On Capacity To Act and private laws, unless there are special
2. Birth And Death Of Natural laws providing for a different mechanism
Persons for the effectivity of specific statutes.
3. Presumption Of Survivorship (Ibid.)
L. Surnames
M. Rules Governing Persons Who Are EFFECT OF NON-PUBLICATION:
Absent 1. If there is a lack of/absence of full
compliance with the publication
requirement, it will render the law
ineffective (Nagkakaisang Maralita ng
Sitio Masigasig, Inc. v. Military Shrince
Services, G.R. No. 187587)
2. If there is lack of/absence of full

compliance with the publication
requirement, a citizen may be excused
from his non-compliance with the law if it
was done due to ignorance.
The publication requirement as provided

in Article 2 of the New Civil Code is the
legal basis for the implementation of
Article 3 of the New Civil Code which
provides that Ignorance of the Law
excuses no one from compliance
therewith, is justified.
WHEN IS PUBLICATION NOT REQUIRED

1. Interpretative regulations and those
merely internal in nature, that is,
regulating only the personnel of the

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administrative agency and not the public, 2. When the law expressly provides for
need not be published. Neither is retroactivity
publication required of the so-called 3. When the law is interpretative
letters of instructions issued by 4. When the law is curative
administrative superiors concerning the 5. When the law is remedial
rules or guidelines to be followed by their
6. When the law is procedural
subordinates in the performance of their
duties. (Tañada v. Tuvera, G.R. No. L- 7. Laws of emergency nature under police
63915) Letters of Instruction issued by the power (Civil Code of the Philippines
administrative superiors concerning rules Annotated, 1984 ed., Vol. 1, pp. 22-23)1
or guidelines to be followed by their 8. When the law is penal in character and is
subordinates in the performance of their favorable to the accused
duties.. (Tañada v. Tuvera, G.R. No. L-
63915, 1985) EXCEPTION TO THE EXCEPTIONS:
1. Ex post facto laws
EXCEPTION: When the law explicitly provides for 2. Bills of Attainder
its date of effectivity. 3. When to give retroactive effect will impair
the obligation of contracts
NOTES REGARDING THE EXCEPTION:
4. When to give retroactive effect will affect
1. If the law provides for a different period,
regardless of the fact that the period injuriously vested rights
provided is shorter or longer than the 15- 5. When to give retroactive effect to a
day period as written in Article 2 of the change in a substantive law will prejudice
New Civil Code, that period will prevail. a party that has followed the earlier law or
2. If the law explicitly provides that it shall judicial doctrine (People v. Licera, L-
take effect immediately, it means that the 39990)
law will take effect immediately after 6. When there is doubt as to whether the
compliance with the publication legislature intended the law to have
requirement. retroactive effect.
7. When the law is penal in nature and is
B. Ignorance of The Law favorable to the accused, but the accused
is a habitual delinquent.
GENERAL RULE: Ignorance of the law excuses
no one from compliance therewith. (Art. 3)
NOTE REGARDING RETROACTIVITY OF
Ignorantia legis non excusat. Once a law is
PENAL LAWS: An accused is deemed to be a
published, the public is given constructive notice
habitual delinquent if, within 10 years from his or
of the law’s existence and effectivity.
her release or final conviction for the same crimes,
he was found guilty any of the following crimes for
NOTE: Non-excuse from ignorance of the law the third time or as an oftener: serious or less
excuses only applies to mandatory or prohibitory serious physical injuries, robo, hurto, estafa or
laws, and not to directory laws. falsification. (Art. 62, Revised Penal Code)
C. Retroactivity of Laws
D. Mandatory or Prohibitory Laws
GENERAL RULE: Laws shall have no retroactive
effect, unless the contrary is provided (Art. 4) GENERAL RULE: Acts executed against the
provisions of mandatory or prohibitory laws shall
EXCEPTIONS: be void. (Art. 5)
1. When the law is penal in nature and is
favorable to the accused, who is not a EXCEPTION: If the law expressly provides for the
habitual criminal/delinquent (Art. 22, validity of acts committed in violation of a
Revised Penal Code) mandatory or prohibitory provision of a statute.
1 As seen in the case of Vda. de Ongsiako v.

Gamboa, G.R. No. L-1867, 1950 with regard to
tenancy relations

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Mandatory Laws a. Real rights

Obligatory laws whereby the omission of which Enforceable against the whole
renders the proceeding or acts to which it relates world (absolute rights)
to generally illegal or void Example: Prescriptive b. Personal rights
periods are mandatory; when one files a suit after Enforceable against a particular
the prescriptive period, the action becomes void.
individual (relative rights)
Prohibitive Laws
Laws which specifically prohibit certain acts and Waiver
provide for their liabilities and penalties. Intentional relinquishment of a known right.
Prohibitive laws contain positive prohibitions and (Castro v. Del Rosario, G.R. No. L-17915)
are couched in negative terms, importing that the
act shall not be done, unless otherwise provided. Waivers are not presumed but must be clearly and
Example: No decree of legal separation shall be convincingly shown either by express stipulation
based upon a stipulation of facts or a confession or acts admitting no other reasonable explanation
of judgment. (Arrieta v. National Rice and Corn Corporation,
G.R. No. L-15645)
GENERAL RULE: Prohibitive laws concerning
persons, their acts or property, and those which
have for their object public order, public policy, or GENERAL RULE: Rights may be waived. (Art. 6)
good customs are not rendered ineffective by laws
of judgments promulgated or by determinations or Requisites of a valid waiver: (Herrera v.
conventions agreed upon in a foreign country (Art. Borromeo, G.R. No. L-41171)
17, par. 3.). 1. Existence of a right
2. Knowledge of the existence of such right
EXCEPTION: Art. 26, Par. 2 of the Family Code 3. An intention to relinquish the right
(e.g. Divorce)
EXCEPTIONS: Rights may not be waived if the
E. Waiver Of Rights waiver is:
1. Contrary to law, public order, public
Right
policy, morals, good customs.
A legally enforceable claim that another will do or Example: Waiver of future inheritance,
will not do a given act. (Oceanmarine Resources political rights, future support.
Corp. v. Nedic, G.R. No. 236263, 2022) 2. Prejudicial to a third person with a right
recognized by law.
Kinds of rights
1. Natural Rights No compromise upon the following questions
Those which grow out of the nature of shall be valid:
man and depend upon personality. a. The civil status of persons
Example: right to life, liberty, privacy, and b. The validity of a marriage or a legal
good reputation. c. separation
2. Political Rights d. Any ground for legal separation
Consist in the power to participate, e. Future support
directly or indirectly, in the establishment f. The jurisdiction of courts
or administration of government. g. Future legitime (Art. 2035)
Example: right of suffrage, right to hold
public office, right of petition. REPEAL OF LAWS
3. Civil Rights
Those that pertain to a person by virtue of Repeal
his citizenship in a state or community. It is the legislative act of abrogating through a
Example: property rights, marriage, equal subsequent law the effects of a previous statute or
protection of laws, freedom of contract, portions thereof (STA. MARIA, PERSONS AND FAMILY
trial by jury. RELATIONS LAW (2019), p. 11.).

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Only decisions of the Supreme Court establish

TYPES OF REPEAL jurisprudence or doctrines in this jurisdiction (Vda.
De Miranda v Imperial, G.R. No. L-49090).
Express Repeal When Judicial Decisions Deemed Part of the
An express repeal is one which is literally declared Law. The application and interpretation by the
by a new law, either in specific terms, where Supreme Court are part of the law as of the date
particular laws and provisions are named, or in of the law’s enactment (People v. Licera, G.R. No.
general terms (Ibid.). L-39990).
Implied Repeal BUT: When a doctrine of the Supreme Court is

An implied repeal is one which takes place when overruled and a different view is adopted, the new
a new law contains provisions contrary to or doctrine will be applied prospectively and will not
inconsistent with those of a former without be applied to parties who had relied on the old
expressly repealing them (Ibid.). doctrine and acted on the faith thereof (People v.
Jabinal,G.R. No. L-30061).
Requisites of an Implied Repeal
1. The laws cover the same subject matter How Judicial Decisions May Be Abrogated
2. The latter law is repugnant to the earlier 1. By contrary ruling of the Supreme Court
law (Agujetas v. CA, G.R. No. 106560). itself; and
2. By corrective legislative acts of Congress,
although said laws cannot adversely
Effect if the Repealing Law is Itself is affect those favored prior to the Supreme
Repealed Court decisions (1 PARAS, supra at 69).
1. When a law which expressly repeals a
prior law is itself repealed, the law first DUTY OF JUDGES
repealed shall not be revived, unless
expressly so provided (1 PARAS, Civil Duty of a Judge if the Law is Silent
Code of the Philippines Annotated (2016), No judge or court shall decline to render judgment
p. 49 [hereinafter 1 PARAS].). by reason of the silence, obscurity, or insufficiency
of the laws (Art. 9).
Example: Law A is expressly repealed by
Law B. If Law B is itself repealed by Law Judicial Legislation
C, is Law A revived? The judiciary is tasked with resolving legal
controversies and interpreting statutes; it cannot
No, unless Law C expressly so provides. legislate.
2. When a law which impliedly repeals a BUT: Even a legislator, through Art. 9, recognizes
prior law is itself repealed, the prior law that in some instances, courts “do and must
shall be revived unless the language of legislate” to fill in the gaps in the law, because the
the repealing statute provides otherwise mind of the legislator is finite and therefore cannot
(U.S. v. Soliman, G.R. No. L-11555). envisage all possible causes to which the law may
apply (STA. MARIA, supra at 17).
Example: Law A is impliedly repealed by
Law B. Law B is later repealed by Law C.
DOUBTFUL STATUTES
Is Law A revived?
Rule in Case of Doubt
Yes, unless Law C provides otherwise.
In case of doubt in the interpretation or application
of laws, it is presumed that the lawmaking body
JUDICIAL DECISIONS intended right and justice to prevail (Art. 10).
STARE DECISIS When Applicable
Where the law is clear, it must be applied
Effect of Judicial Decisions according to its unambiguous provisions. (Acting
Judicial decisions applying or interpreting the laws Commissioner of Customs v. Manila Electric
or the Constitution shall form part of the legal Company, G.R. No. L-23623). Construction and
system of the Philippines (Art. 8). interpretation come only after it has been
demonstrated that application is impossible or

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inadequate without them (Republic Flour Mills, Inc.

v. Commissioner of Customs, G.R. No. L-28463).
F. Presumption And Applicability H. Territoriality Principle

of Custom
Penal Laws
Custom Territoriality Principle:
A custom is a rule of conduct formed by repetition Penal laws and laws of public security and safety
of acts, uniformly observed or practiced as a social shall be obligatory upon all who live or sojourn in
rule, legally binding, and obligatory. the Philippine territory (Art. 14).
Rules EXCEPTIONS:
1. Customs which are contrary to law public 1. Principles of Public International Law
order or public policy shall not be Example: Immunities granted to
countenanced (Art. 11). diplomatic officials and visiting heads of
2. Customs must be proved as a fact state.
according to the rules of evidence (Art.
12). 2. Treaty stipulations
Example: Philippine-United States
G. Legal Periods Military Bases Agreement (dated March
14, 1947), which contains provisions
Rule on Periods exempting certain members of the armed
Period Rule forces of the United States from the
Year shall be understood to be jurisdiction of our courts.
12 calendar months (E.O. 292,
Book I, Sec. 31). 3. Laws of Preferential Application
Year Example: Foreign Ambassadors,
NOTE: Art. 13 has been
ministers
impliedly repealed by E.O. 292
or the Revised Administrative
Code of 1987. NOTE: Consuls do not enjoy the privilege of
30 days, unless the month is immunity.
identified, in which case it shall
Month be computed according to the I. Conflict of Laws
number of days the specific
month contains (Art. 13). Private International Law or Conflict of Laws is
that part of the municipal law of the state, which
Day 24 hours directs its courts and administrative agencies,
when confronted with a legal problem involving a
foreign element, whether or not they should apply
Night Sunset to sunrise foreign laws.
Count 7 days as indicated, not Foreign Element – a factual situation that cuts
Week across territorial lines and is affected by the
necessarily Saturday to Sunday
diverse laws of two or more states. (Saudi Arabian
Airlines v. Court of Appeals, G.R. No. 122191,
To count the period, the first day is excluded and
1998)
the last day is included (Art. 13).
Private International Law is not a separate, distinct
Example: If a law states that a statute takes effect
branch of law; nor is it a mere part of Civil Law but
on the 20th day from its publication and such
rather it traverses and concerns almost every
publication was made on Feb. 3, 1988, then the
department of law.
law shall be effective on Feb. 23, 1988.
Threefold Functions of Private International
The first day, which is Feb. 3, 1988, is excluded
Law (CJS)
while the last day, which is Feb. 23, 1998, is
1. Prescribe conditions under which a court
included.
or agency is Competent to entertain a suit

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or proceeding involving facts containing a 1039 of the Civil Code, and Article 21 of the Family
foreign element; Code. (Paras, Philippine Conflict Laws, p. 104,
2. Specify circumstances under which 1996)
foreign Judgment will be recognized as
valid and binding in the forum; and Kinds of Citizens of the Philippines
3. Determine for each class of cases the a. Natural-born citizens
particular System of law by reference to b. Naturalized citizens
which the rights of parties must be c. Citizens by election
ascertained.
Defects of the Nationality Theory:
Difference Between Private (PRIL) and Public a. Change of nationality or citizenship is
International Law (PIL) hard to effectuate; thus, a person who
may no longer wish the law of his country
Public international law (PIL) - the law that to follow him whenever he may go
regulates the relations of States and other entities (because he has found it undesirable)
possessing international personality. may find it difficult to be naturalized
elsewhere.
Basis Private Public b. Some individuals are stateless.
Nature Municipal or International in c. There are persons who possessed dual or
national in character multiple nationalities.
character d. It is not always desirable to apply to aliens
Transactions Private Generally their national law. (Paras, Philippine
Involved transactions affected by Conflict Laws, p. 105, 1996)
between public interest,
individuals or those that Dual and Multiple Nationalities
are of interest This can hardly arise because citizenship is a
only to matter to be exclusively determined by a country’s
sovereign own law. Philippine law are only allowed to
states determine who are Filipino citizens and who are
Remedies Resort to May be not.
and municipal peaceful or
Sanctions tribunals forcible Article 2 of the Hague Convention on Conflict of
Sources a. Codifications h. Customs Nationality Laws provides that any question as to
b. Special i. Treatises whether a person possesses the nationality of a
Legislation j. Principles particular state should be determined in
c. Multilateral of law accordance with the law of that state.
Treaties and recognized
International by civilized The situations in which dual or multiple
Conventions nations nationalities may arise are:
d. Bilateral k. Judicial a. Through a naturalized citizen’s failure to
Treaties Decision comply with certain legal requirements in
e. Case Law l. Teachings the country of origin;
f. International of the most b. From a combined application of jus soli
Custom highly and jus sanguinis;
g. Constitution qualified c. By the legislative acts of states
publicists d. By the voluntary act of the individual.
Stateless Individuals
A person may become stateless by any of the
following means:
1. Lex Nationalii a. He may have been deprived of his
citizenship for any cause, such as the
Definition commission of a crime;
The Nationality Theory is the theory by virtue of b. He may have renounced his nationality by
which the status and capacity of an individual are certain acts, express or implied;
generally governed by the law of his nationality. c. He may have voluntarily asked for a
This is the theory which the Philippines has released for a released from his original
principally adopted under Articles 15, 16, and state; or

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d. He may have been born in a country

which recognizes only the principle of jus Concept
sanguinis – citizenship by blood, of The Civil Code gives exclusive importance to the
parents whose law recognizes only the lex situs, regardless of the nature of the property;
principle of jus soli – citizenship by birth in thus, it provides that real property as well as
a certain place. Thus, he is neither a personal property is subject to the law of the
citizen of the country where he was born, country where situated. (Art.16)
nor a citizen of the country of his parents.
Laws Governing Property (Real and Personal)
Note: Presumption regarding paternity is neither Lex Situs or Lex Rei Sitae
unknown nor unacceptable in Philippine Law. Real property, as well as personal property, is
There is more than sufficient evidence that Poe subject to the law of the country where it is situated
has Filipino parents and is therefore a natural-born (Art. 16, par. 1.).
Filipino. Hence, the burden of proof was on private
respondents to show that petitioner is not a Filipino EXCEPTION: Intestate and testamentary
citizen. There are disputable presumptions that succession, which are regulated by the national
things have happened according to the ordinary laws of the deceased regardless of the nature of
course of nature. On this basis, it is safer to the property; in particular, this rule applies to the
assume that Poe’s parents are Filipinos. To following: (CIAO)
assume otherwise is to accept the absurd (Poe v.
Llamanzares v. COMELEC, G.R. No. 221697, 1. Capacity to succeed (Art. 1039);
2016). 2. Intrinsic validity of testamentary
provisions;
The Hague Conference of 1928 on International 3. Amount of successional rights; and
Private Law suggested that the personal law of
4. Order of succession.
stateless individuals shall be:
a. The law of the domicile (habitual
residence); or NOTE: The enumeration above is governed by the
b. Secondarily the law of the place of national law of the decedent, regardless of place
temporary residence. of death.
Laws Relating to Family Rights and Duties Q: A Turkish citizen wrote a last will, which
Nationality Principle provides that his property should be disposed of
Regardless of where a Philippine citizen may be, pursuant to Philippine laws. Is the provision valid?
he will be governed by Philippine laws with respect
to: A: No, the provision is illegal and void because,
1. Family rights and duties; pursuant to what is now Article 16 of the Civil
2. Status; Code, the national law of the deceased should
govern. Hence, Turkish laws should apply
3. Condition; and
(Miciano v. Brimo, G.R. No. L-22595).
4. Legal capacity of persons (Art. 15).
Scope of Lex Situs Rules as to Immovables
If a Filipino initiates a petition abroad to obtain an a. Capacity to take and transfer
absolute divorce from his wife or her husband who immovables;
is also a Filipino and successfully gets a divorce, Exception: Lex rei sitae is not applicable
the Philippines will not recognize such absolute where the issue is the authority of a State
divorce. This is because under Art. 26(2) of the official to validly dispose of property
Family Code, the only absolute divorce which the belonging to the State and the validity of
Philippines may recognize is a mixed marriage the procedures adopted to effect its sale.
between a Filipino and a foreigner. (Laurel v. Garcia, G.R. No. 92013, 1990).
b. Formalities of conveyance;
Hence, in the eyes of Philippine law, they are still c. Essential validity and effect of the
married, and therefore should anyone of them transfer;
marry again, he or she can be considered to have d. Interpretation and effect of conveyance;
committed either concubinage or adultery, as the e. Validity and effect of mortgages and other
case may be (See Tenchavez v. Escaño, G.R. No. encumbrances;
L-19671). f. Marital interest in land; and
g. Equitable interest in land
2. Lex Rei Sitae

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The rule, with reference to personal property,

Elements of a Conflict Of Laws Problem as to extends in general to all relations and situations
Immovables: (C-FEI) already adverted to in the case of real property.
a. There is a dispute over the title or The exceptions to the rule under the immovables
ownership of an immovable, such that also apply to movables.
the:
i. Capacity to take and transfer In addition to the general rule, personal property
immovables, may be tangible or intangible.
ii. Formalities of conveyance, a. The tangibles are referred to as
iii. Essential validity and effect of choses in possession. The law of the
the transfer, or state in which the property is located
iv. Interpretation and effect of a at the time of the transaction in
conveyance, are to be question determines the creation and
determined; and transfer of interests in choses in
b. A foreign law on land ownership and its possession
conveyance is asserted to conflict with a b. Intangibles are referred to as choses
domestic law on the same matters. in action. Choses in action are
Hence, the need to determine which law divided into three categories:
should apply. 1. Debts or simple rights of action
arising from any loans or ordinary
Exception To The Lex Situs Rule As To commercial contracts. The laws
Immovables: (SCOFT) that may govern are: (a) the law
a. Succession - capacity to succeed, order of the domicile of owner; (b) the
of succession, amount of successional law of the place where
rights and intrinsic validity of testamentary assignment is executed; (c) the
provisions, shall be regulated by the law of the place where the debt is
national law of the person whose recoverable or where the
succession is under consideration, performance of the duty would be
whatever may be the nature of the expected; (d) if the debt is
property. (Arts. 16 and 1039) created by a contract between
b. Parties’ Contractual Obligations - the assignor and the debtor,
where the issue involves the rights and follow the proper law of the
liabilities of the parties inter se as a matter contract.
of contractual obligation, even though the 2. Negotiable instruments. The law
subject matter of the contract is the land, governing the rights embodied in
the governing law is the law that regulates the instrument decides whether a
the contract as a whole. given instrument is negotiable.
c. Principal Obligation Secured - validity The validity and effect of a
and effect of the principal obligation, transfer of a negotiable
which the encumbrance secures are instrument are determined by the
determined by principles applicable to law of the place where the
contracts in general. instrument is at the time of the
d. Contract to Transfer - while the validity transfer.
of the transfer of immovable is governed 3. Corporate stocks or shares.
by the lex situs rule, the validity of the When the transfer has the
contract to transfer is determined by the consequence of changing the
proper law of the contract. relations of the parties with the
e. When the property within the situs corporation, the law of the place
belongs to a Foreign State. (Holy See v. of incorporation governs. As an
Rosario, G.R. No. 101949, 1994) exception, as between the
f. Corporate stocks or shares – where the assignor and assignee, the effect
transfer has the consequence of of an assignment of the stock
changing the relations of the parties with certificate will be governed by the
the corporation, the law of the place of law most connected to the
incorporation governs. transaction
Scope of Lex Situs Rules as to Movables 3. Lex Loci Celebrationis

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Laws Relating to Forms and Solemnities iv. Subsequent marriages void

Lex Loci Celebrationis under Art. 53 (Family Code, Art.
Forms and solemnities of contracts, wills, and 35 (6))
other public instruments (extrinsic validity) shall be v. Psychological incapacity (Family
governed by the laws of the country in which they Code, Art. 36)
are executed (Art. 17, par. 1.). vi. Incestuous marriage (Family
Code, Art. 37)
Acts Before Diplomatic and Consular Officials vii. Marriage against public policy
Any act or contract made in a foreign country (Family Code, Art. 38)
before diplomatic and consular officials must
conform to the solemnities under Philippine law Requisites to Uphold Marriages Contracted
(Art. 17, par. 2.). Abroad
a. Existence of the foreign law as a question
Capacity to Contract Marriage of fact;
It refers to his power to acquire and exercise b. Alleged foreign marriage by convincing
rights. evidence (Adong v. Cheong Seng Gee,
In Conflict of Laws, the inquiry is to ascertain what G.R. No. 18081, 1922)
system of law will determine a person’s capacity to
enter into a legal transaction when there is conflict Annulment of marriages
between the law of the place where the transaction a. Jurisdiction to Annul – acquired by the
is entered into and some system of law, such as following forums:
the law of the domicile or the nationality, which can i. Where the spouses are
claim to regulate that person’s act. domiciled in; and
ii. In which either parties are
Formal Validity of Marriages nationals
If the marriage is valid by the law of the place of b. Governing Law on Annulment or Nullity –
celebration or lex loci celebrationis, it is also valid lex loci celebrationis determines the
in other places. cause or ground for annulment.
Philippine Conflict Rule on Formal and Recognition of Foreign Divorce Decrees

Substantive Validity of Marriage a. Between Filipino citizens – not entitled to
All marriages solemnized outside the Philippines, recognition because of the local policy
in accordance with the laws in force in the country against absolute divorce.
where they were solemnized, and valid there as
such, shall also be valid in this country. (Family Note: Divorce between Filipinos is void
Code, Art. 26) and ineffectual under the nationality rule.
Any settlement of property submitted as
Substantive Validity of Marriages an incident of a divorce obtained in a
General Rule: Law of the place of celebration (lex foreign country between Filipino spouses
loci celebrationis) cannot be enforced. (Spouses Lavadia v.
Exceptions: Heirs of Luna, 2014)
a. Philippine law governs marriage between
Filipino nationals abroad solemnized by a b. Between alien spouses – entitled, if valid
consul-general of the Philippines. (Family under their national law.
Code, Art. 10) c. Mixed marriages – entitled, even the
b. Marriages prohibited under Philippine Filipino spouse may seek for divorce
Law will not be upheld as valid in the (Republic v. Manalo, G.R. 221029, 2018)
Philippines. (Family Code, Art. 26)
i. Contracted by any party below Note: Whether the Filipino spouse initiated the
eighteen years of age even with foreign divorce proceeding or not, a favorable
consent (Family Code, Art. 35 decree dissolving the marriage bond and
(1)) capacitating his or her alien spouse to remarry will
ii. Bigamous or polygamous have the same result: the Filipino spouse will
marriage not falling under Art. 41 effectively be without a husband or wife. A Filipino
(Family Code, Art. 35 (4)) who initiated a foreign divorce proceeding is in the
iii. Contracted through mistake of same place and in "like circumstance as a Filipino
one party as to the identity of the who is at the receiving end of an alien initiated
other (Family Code, Art. 35 (5))

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proceeding. Therefore, the subject provision Four Theories to Solve Renvoi Problem
should not make a distinction. (Id.) 1. Rejection of Renvoi: The reference of
BUT, J. Perlas-Bernabe joined the dissent of J. the matter for judgment is confined
Caguioa. exclusively to the internal law of the other
State.
How Foreign Divorce Decrees can be 2. Acceptance of Renvoi: Reference is to
Recognized the entirety, including the conflicts rule of
a. In an action instituted specifically for the the other State, and if the State of the
purpose (e.g. special proceeding for forum finds that the matter is referred
cancellation or correction of entries in the back to it, the court might conclude that
Civil Registry under Rule 108) (Fujiki v. the reference to the other State has not
Marinay, 2013) provided a direct solution, in such case,
b. In another action where a party invokes the court might accept the reference and
the foreign decree as an integral aspect apply its own internal law (remission) or
of his claim or defense. (Medina v. Koike, the laws of the third State (transmission).
2016) Also called single renvoi.
CATEGORY GOVERNING LAW The doctrine of renvoi was accepted and

Personal Personal law or national law of the applied by the Court. It made reference
Status person (lex nationalii) not just to the internal law of California but
Capacity to Personal law or national law of the to its whole law, including the choice-of-
Contract person (lex nationalii) law rules. Since the choice-of-law rules
Marriage referred the case back to Philippine law,
Formal Law of the place of celebration (lex the Court held that the Philippine court
Validity of loci celebrationis) cannot and should not refer the case back
Marriages to California because such issue would
Law of the place of celebration (lex leave the issue incapable of
Substantive loci celebrationis) determination. It cannot be tossed back
Validity of Exception: Marriage before the and forth between the two states,
Marriages Philippine consular and marriages between the country of which the
prohibited under Philippine law. decedent was a citizen (California) and
Law of the place of celebration (lex the country of his domicile (Philippines). If
Annulment the Court rejected the renvoi, the national
loci celebrationis)
law of the deceased, which was California
law, would have been applied. Instead,
the Court applied the doctrine of renvoi
4. Doctrine of Renvoi and thus administered justice to the
acknowledged natural child of the
Doctrine of Renvoi deceased by granting them the devise in
It is method of disposing a conflict of laws problem accord with law (Adolfo Aznar v. Helen
by referring a matter for judgment or consideration Garcia, G.R. No. L-16749, 1963).
to another State. “Renvoi” is a French word which
means “refer back” or “return”. 3. Desistment or Mutual Disclaimer of
Jurisdiction: Reference is also to the
Doctrine of Renvoi is a conflict of law rule where if entirety, including the conflicts rule of the
the law of the foreign country adopts lex rei sitae, other State; and if the State of the forum
calling for the application of the law of the country finds that the matter is referred to back to
where the real property is situated, renvoi would it, the court might conclude that the other
arise. In the absence, however, of proof as to the State. has no rule of law applicable to the
conflict of law rule of the foreign country, it should situation, in such case, the court left is
not be presumed different from the law in the with no other alternative but to apply its
Philippines. own internal law.
4. Foreign Court Theory: The law to be
Types of Renvoi applied by the court of the forum is that
1. Remission: Reference is made back to law the court of the State referred would
the law of the forum have applied.
2. Transmission: Reference is made to a
third State Double Renvoi

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Double renvoi may arise, i.e., the court of the domicile, which is the Philippines in this case. The
forum, in applying the foreign court theory, finds court of the domicile, the Philippines, cannot and
that the referred State accepts the renvoi. In which should not refer the case back to California, such
case, the court of the forum shall therefore apply action would leave the issue incapable of
what the court of the State referred would have determination because the case will then be like
applied. football, tossed back and forth between the two
States, between the country of which the decedent
1. Example: X was a citizen of State was a citizen and the country of which the
B but domiciled in State C. A left decedent is a domiciliary. The Philippine court
immovables in State B. As the must apply its own law as directed in the conflict of
courts of State B follows the laws rule of the state of the decedent, if the
foreign court theory, it will question has to be decided, especially as the
therefore decide the case exactly application of the internal law of California
as State C will decide. provides no legitime for children while the
i. Assuming that State B’s Philippine law, while the Civil Code of the
court determines that Philippines, makes natural children legally
State C’s court would acknowledged forced heirs of the parent
have referred the matter recognizing them. The domicile of the deceased
to State B’s internal Christensen, a citizen of California, is the
laws alone, State B Philippines, the validity of the provisions of his will
would therefore apply its depriving his acknowledged natural child, should
own (State B’s) internal be governed by the Philippine Law, the domicile,
laws as State B would. pursuant to the Civil Code of California, not by the
(No renvoi in this internal law of California. (Aznar v. Christensen-
scenario) Garcia, G.R. No. L-16749)
ii. Assuming however that
the State B’s court Domicile and Residence
determines that State 1. Place of Domicile (Art. 50-51)
C’s court would have a. For natural persons, it is the place of
referred the matter to habitual residence
State B’s laws in its b. For juridical persons
entirety; Then State C i. General rule: In accordance with the
would have found that law creating or recognizing them, or
State B’s conflict rules any other provision
refers the matter back to ii. Exception: If the law is silent, the
State C’s again or a residence shall understood to be the
third State; Thus, State place where their legal representation
C, which adopts the is established or where they exercise
acceptance of the their principal functions
renvoi theory, would 2. A minor follows the domicile of his parent
have therefore applied a. Domicile of origin can only be lost when
its own laws or that of a change of domicile occurs
the third State. The b. If the child is illegitimate, the domicile of
court of the forum, State the mother is followed
B, thus decides the case 3. Requirements for the Acquisition of New
the way State C would. Domicile
a. Bodily presence in new locality
b. Intention to remain therein (animus
The Doctrine of Renvoi is usually pertinent where manendi)
the decedent is a national of one country and a c. Intention to abandon the old domicile
domicile of another. The Supreme Court ruled that (animus non revertendi)
there was no renvoi problem because the 4. Kinds of Domicile
deceased was both a citizen and domiciliary of a. Domicile of Origin: Received by a
Texas. (Bellis v. Bellis, G.R. No. L-23678) person at birth
b. Domicile of choice: The place freely
The conflict of laws rule in California precisely chosen by a person sui juris
refers back the case, when a decedent is not
domiciled in California, to the law of decedent’s

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NOTE: A person may have as many residences as

he wants, but he can only have one domicile.
Under the Family Code, the husband and wife
shall fix the family domicile. In case of
disagreement, the Court shall decide (Art. 69)

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SUMMARY OF PROVISIONS ON CONFLICTS OF LAW
LAW MATTERS/ GOVERNING PRINCIPLE/ DOCTRINE

PERSONS BOUND
Principle of Territoriality: Law of the place where crime
Territoriality was committed (Art. 14).
Principle All those who live or sojourn
in Philippine territory Exceptions:
(Penal Laws)
1) Principles of Public International Law
2) Treaty Stipulations
Principle of Nationality: National law of the person, with
Lex Nationalii respect to:
(Laws Relating to Citizens of the Philippines,
1) Family rights and duties
Family Rights and including those living 2) Status
Duties) abroad 3) Condition
4) Legal capacity (Art. 15).
Lex situs or Lex rei sitae: Law of the place where the
property is situated (Art. 16)
Exception: Intestate and testamentary succession, in

Lex Rei Sitae particular:
(Laws Governing
Real and personal property 1) Capacity to succeed (Art. 1039)
Property [Real and
2) Intrinsic validity of testamentary provisions
Personal]) 3) Amount of successional rights
4) Order of succession
NOTE: The enumeration is governed by the national law

of the decedent, regardless of place of death.
Lex Loci Lex loci celebrationis: Law of the country in which they
Celebracionis Forms and solemnities of are executed (Art. 17)
(Laws Relating to contracts, wills, public
Forms and instruments Exception: If executed before Philippine diplomatic or
Solemnities) consular officials abroad, Philippine laws shall govern.
Doctrine of Renvoi: It is method of disposing a Conflict
Decedent that is a citizen of
Doctrine of Renvoi of Laws problem by referring a matter for judgment or
one State and a domicile of
consideration to another State, either the forum
another State
(remission) or a third state (transmission).

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J. Human Relations In Relation To negligently, as long as the act is to be contrary to

Persons law).
Principle of Abuse of Rights (Art. 19) Actions for Breach of Promise to Marry
Every person must, in the exercise of his rights GENERAL RULE: Breach of promise to marry is
and in the performance of his duties, act with not actionable.
justice, give everyone his due, and observe EXCEPTION: When one party has already made
honesty and good faith. real efforts to prepare and spend for the wedding.
Such act is unjustifiably contrary to good customs
for which the defendant must be held answerable
Requisites of Abuse of Rights
for damages in accordance with Art. 21 of the
1. There is a legal right or duty NCC. (Wassmer v. Velez, G.R. No. L-20089,
2. Which is exercised in bad faith 1964)
3. For the sole intent of prejudicing or
injuring another. Unjust Enrichment / Accion in rem verso (Art.
(Sps. Andrada v. Pilhino Sales Corporation, G.R. 22)
No. 156448, 2011)
Every person who through an act or performance
by another, or any other means, acquires or
Standards to Observe in the Exercise of One’s
comes into possession of something at the
Rights or Performance of Duty
expense of the latter without just or legal ground,
1. Act with justice
shall return the same to him.
2. Give everyone his due
3. Observe honesty and good faith
Conditions for Unjust Enrichment
Acts Contrary to Law (Art. 20) 1. The person must have been benefited
Every person who, contrary to law, willfully or without a real or valid basis or
negligently causes damage to another, shall justification.
indemnify the latter for the same. 2. The benefit was derived at another
person’s expense or damage
Acts Contra Bonos Mores (Art. 21) (Art. 22 and Loria v. Muñoz, G.R. 187240,
2014).
Any person who willfully causes loss or injury to
another in a manner that is contrary to morals,
good customs or public policy shall compensate Requisites (ELWN)
the latter for the damage. 1. Defendant had been Enriched;
2. Plaintiff suffered a Loss;
NOTE: Whenever an act that’s not punishable or 3. Unjust enrichment of defendant is
covered by any law causes loss or injury to Without just or legal ground; and
another, Art. 21 can be invoked the legal basis to 4. Plaintiff has No other action based on
claim damages. contract, quasi-contract, crime, or quasi-
delict.
Elements of Acts Contra Bonos Mores
1. There is an act which is legal NOTE: Mistake is an essential element in solutio
2. But contrary to morals, good customs, indebiti, but not in accion in rem verso.
public order, or public policy
3. It is done with intent to injure Duty to Indemnify One for Damage to Property
Even when an act or event causing damage to
NOTE: another’s property was not due to the fault or
Similarities: In Art. 19-21, at the core is bad faith negligence of the defendant, the latter shall be
or malice and the aggrieved party must be liable for indemnity if through the act or event he
indemnified. was benefited. (Art. 23)
Differences: Under Art. 19 & 21, the act must be
done intentionally. Art. 20, however, does not Duty of Courts to Protect a Party in a Contract
distinguish (the act may be done either willfully or

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When such party is at a disadvantage on account relief against the latter, without prejudice to any
of his: (MIgIMenTO) disciplinary administrative action that may be
1. Moral dependence taken.
2. Ignorance Art. 27 presupposes that the refusal or omission of
3. Indigence a public official is attributable to malice or
4. Mental weakness inexcusable negligence. (Philippine Match Co.,
5. Tender age Ltd. v. City of Cebu, G.R. No. L-30745).
6. Other handicap (Art. 24)
Violation of Civil and Political Rights (Art. 32)
Thoughtless Extravagance (Art. 25) An individual can hold a public officer or a private
individual personally liable for damages on
May be stopped by order of courts if the following
account of an act or omission that violates a
requisites are present: constitutional right only if it results in a particular
1. During an acute public want or injury to the former. (Vinzons-Chato v. Fortune
emergency Tobacco Corp, G.R. No. 141309).
2. Person seeking to stop it is the
government or a private charitable NOTE: Good faith is not a defense. To be liable
institution under Art. 32, it is enough that the plaintiffs’
constitutional rights were violated. It is not required
Rights to Personal Dignity and Privacy (Art. 26) that the defendants acted with malice or bad faith.
Every person shall respect the dignity, personality, The object of Art. 32 is to put an end to abuses
privacy and peace of mind of others. which are justified by a plea of good faith (Lim v.
Ponce de Leon, G.R. No. L-22554).
The following acts produce a cause of action for
damages, prevention and other relief: (PMIV) Members of Municipal or City Police Force (Art.
1. Prying into the privacy of another’s 34)
residence 1. Primary liability is assessed against a
member of the municipal or city police
NOTE: It includes "any act of intrusion force who refuses or fails to render aid or
into, peeping or peering inquisitively into protection.
the residence of another without the
2. Subsidiary liability is imposed on the city
consent of the latter." It may extend to
or municipality concerned in case of
places where he has the right to exclude
the public or deny them access. It covers insolvency.
places, locations, or even situations
which an individual considers as private Unfair Competition through Unjust,
such as a business office located within Oppressive, or Highhanded Methods (Art. 28)
his residence. (Spouses Hing v. Unfair competition in agricultural, commercial or
Choachuy, Sr., G.R. No. 179736, 2013). industrial enterprises or in labor through the use of
force, intimidation, deceit, machination or any
2. Meddling with or disturbing the private
other unjust, oppressive or highhanded method
life or family relations of another
shall give rise to a right of action by the person who
3. Intriguing to cause another to be
thereby suffers damage.
alienated from friends
4. Vexing or humiliating another on account
of his religious beliefs, lowly station in Art. 28 does not prohibit competition with regard to
life, place of birth, physical defect, or enterprises. What it seeks to be prevented is not
other personal condition competition per se but the use of unjust,
oppressive or highhanded methods which may
Relief Against Public Officials (Art. 27) deprive others of a fair chance to engage in
Any person suffering material or moral loss business or earn a living. (Willaware Products
because a public servant or employee refuses or Corp. v. Jesichris Manufacturing Corp., G.R. No.
neglects, without just cause, to perform his official 195549, 2014)
duty may file an action for damages and other

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Civil Action After Acquittal in Criminal Case Civil Action Arising from Defamation, Fraud
(Art. 29) and Physical Injuries (Art. 33)
When the accused in a criminal prosecution is In cases of Defamation, Fraud and Physical
acquitted on the ground that his guilt has not been Injuries, a separate and distinct civil action for
proved beyond reasonable doubt, a civil action for damages may be instituted by the injured party
damages for the same act or omission may be which shall proceed independently of the criminal
instituted. action.
Example: A was accused of theft, but he was Required Quantum of Evidence:

acquitted because his guilt had not been proved Preponderance of Evidence.
beyond reasonable doubt. B, the offended party,
Rationale: To allow a citizen to enforce his rights
can institute the civil action for damages for the
in a private action brough by him, regardless if
same act and this time, mere preponderance of there is action or inaction on the part of the
evidence is sufficient. prosecutor. It promotes self-reliance on the part of
citizens for the proper vindication of their private
Civil Liability Arising from an Unprosecuted rights, rather than merely relying on the
Criminal Offense (Art. 30) government for the enforcement and protection of
Even if the civil obligation arose from a criminal the same. (Records of the Civil Code Commission)
offense, the required quantum of evidence is not
Construction: The terms ‘fraud’, ‘defamation’,
proof beyond reasonable doubt but merely and ‘physical injuries’ must be understood in their
preponderance of evidence. ordinary sense. Thus, ‘fraud’ includes estafa,
‘defamation’ includes libel, and ‘physical injuries’
Example: A accused B of stealing his (A’s) watch, can include death or homicide (Dyogi v. Yatco,
and so he (A) brought a civil action against B to G.R. No. L-9623), but not reckless imprudence
get the watch and damages. If the fiscal institutes resulting in homicide (Marcia v. Court of Appeals,
G.R. No. L-34529).
a criminal proceeding against B the civil case is
suspended in the meantime (Rule 111, Rules of
Reservation of Civil Actions (Art. 35)
Court), this case not being one of those for which
In cases wherein the justice of peace determines
there can be an independent civil action. But if the that there are no reasonable grounds to believe
fiscal does not, then the civil case continues, and that a crime has been committed or in cases when
here, a mere preponderance of evidence would be the prosecuting attorney refuses or fails to institute
sufficient to enable A to recover. criminal proceedings, the injured party may file a
civil action for damages.
Civil Obligation Not Arising From Felony (Art.
If an information is filed by the prosecuting
31) attorney after the injured party has initiated the civil
Art. 31 was enacted to provide an aggrieved party action, the civil action shall be suspended until the
a remedy and cause of action in situations wherein termination of the criminal action.
they sustained an injury which was not necessarily
a result of a commission of a crime. When applicable: When a person claims to be
injured by a felony for which no independent icvil
Example: Quasi-Delicts (Culpa Aquiliana) as
provided under Article 2176 of the Civil Code of the action is granted in accordance with the Civil Code
Philippines and Culpa Contractual. or any other special law.
NOTE: Art. 31 of the Civil Code does not provide Required Quantum of Evidence:
for an independent civil action, as compared to Art. Preponderance of Evidence.
32, 33 and 34 of the same code. Further, it does
not refer to a civil action based on the commission
of a felony but refers to one based on an obligation Prejudicial Questions (Art. 36)
arising from another source, such as one arising A prejudicial question is one that arises in a case,
from law or from a contract. the resolution of which is a logical antecedent
of the issue involved therein, and the

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cognizance of which pertains to another 3. Corporations, partnerships, and

tribunal (Zapanta v. Montesa, G.R. No. L-14534). associations for private interest or
purpose to which the law grants a
In prejudicial question circumstances, there juridical personality
always two cases involved:
1. A criminal action and Laws Governing Juridical Persons (Art. 45)
2. A civil action a. The State, its political subdivisions,
and corporations, institutions, and
Two Essential Elements of a Prejudicial entities for public interest or purpose:
Question: (Sec. 5, Rule 111, Rules of Court) Governed by the laws creating or
1. The civil action always involves an issue recognizing them.
similar or intimately related to the issue b. Private corporations: Governed by the
raised in the civil action and Revised Corporation Code (R.A. 11232).
2. The resolution of such issue determines c. Partnerships and associations:
Governed by the provisions of the New
whether or not the criminal action may
Civil Code on partnerships, except those
proceed.
registered with the SEC which should be
governed like corporations.
Rules Regarding Precedence of Actions
(Benitez v. Concepcion, G.R. No. L-14646) Extinguishment
By termination of existence either through law,
GENERAL RULE: Where both a civil and a dissolution, or expiration of corporate life.
criminal case arising from the same facts are filed,
the criminal case takes precedence. Rights of a Juridical Person (Art. 46)
1. Acquire and possess property of all kinds
EXCEPTIONS: 2. Incur obligations
1. If there exists a prejudicial question. In 3. Bring civil or criminal actions
such case, the prejudicial question as
raised in the civil case must be first Juridical Capacity v. Capacity to Act
resolved before the criminal case could JURIDICAL
CAPACITY TO ACT
proceed. CAPACITY
2. When the law provides that both civil and Fitness to be the
criminal case can be instituted and may Power to do acts with
subject of legal
proceed simultaneously. (Example: Art. legal effect
relations)
33)
Passive Active
NOTE: The existence of a civil suit for annulment Not Inherent; attained
Inherent
of marriage does not constitute as to pose a or conferred
prejudicial question to warrant suspension of a Lost only through Lost through death
criminal case for bigamy because prior to death and other causes
judgement granting the petition for annulment, the Can exist without Cannot exist without
capacity to act juridical capacity
marriage is presumed to be validly existing. Same
Cannot be limited or Can be restricted,
rule applies for a civil suit for the declaration of restricted modified, or limited
nullity of marriage on the ground of psychological
incapacity, except for purpose of remarriage under Upon the dissolution of corporations,
Article 40 of the Family Code. (Ibid.) institutions, and other entities for public
interest or purpose (Art. 47):
Their property and other assets shall be disposed
K. Capacity To Act
of in pursuance of law or the charter creating them.
If nothing has been specified on this point, the
Juridical Persons (Art. 44)
property and other assets shall be applied to
1. The State and its political subdivisions
similar purposes for the benefit of the region,
2. Other corporations, institutions, and province, city or municipality which during the
entities for public interest or purpose existence of the institution derived the principal
created by law benefits from the same.

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1. Restrictions on Capacity to Act 3. Presumption of Survivorship
Restrictions on Capacity to Act (MInD-ICIP) Presumed to have survived

1. Minority If there is a doubt, as between two or more
2. Insanity persons who are called to succeed each other, as
3. State of being Deaf-mute to which of them died first:
4. Imbecility
5. Civil Interdiction GENERAL RULE: Whoever alleges the death of
one prior to the other, shall prove the same
6. Prodigality - state of squandering money
EXCEPTION: In the absence of proof, it is
or property with a morbid desire to presumed that they died at the same time and
prejudice the heirs of a person (Martinez there shall be no transmission of rights from one
v. Martinez, G.R. No. 445, 1902) to the other. (Art. 43)
NOTE: But these do not exempt the incapacitated Statutory presumption provided by Art. 43 applies
person from certain obligations only when there is doubt on the order of death
between persons who are called to succeed each
Circumstances that Modify or Limit Capacity to other. It does not apply when there is credible
Act (FAT-DA-PAPIII) eyewitness as to who died first. (Joaquin v.
1. Family relations Navarro, G.R. No. 5426)
2. Alienage
3. Trusteeship L. SURNAMES
4. State of being Deaf-mute
5. Age a. Legitimate and legitimated children shall
6. Penalty principally use the surname of the father.
7. Absence b. Adopted child shall bear the surname of
8. Prodigality the adopter.
c. Illegitimate children shall use the surname
9. Insanity
of the mother.
10. Insolvency
11. Imbecility (Art. 39) NOTE: Illegitimate children may use the
surname of their father if their filiation has
2. Birth and Death of Natural been expressly recognized by the father:
Persons i. Through the record of birth
appearing in the civil register; OR
Birth of Natural Persons ii. When an admission in a public
GENERAL RULE: Birth determines personality document or private handwritten
instrument is made by the father
EXCEPTION: A fetus or conceived child shall be (R.A. 9225, amending Art. 176 of
considered born for all purposes that are favorable the Family Code)
to it, provided it be born later with the following
conditions: d. Children conceived before the decree
annulling a voidable marriage shall
1. If the fetus is alive at the time it is principally use the surname of the father.
completely delivered from the mother’s e. A married woman may use
womb, it is considered born for all 1. Her maiden first name and surname
purposes that are favorable to it. and add her husband’s surname, or
2. If the fetus had an intra-uterine life of less 2. Her maiden first name and her
than 7 months, it is not considered born if husband’s surname or
it dies within 24 hours after its complete 3. Her husband’s full name, but
delivery from the maternal womb. prefixing a word indicating that she
is his wife, such as “Mrs.”
Death of Natural Persons f. In case of annulment of marriage, and the
Civil personality is extinguished by death. wife is the guilty party, she shall resume
The effect of death upon the rights and obligations her maiden name and surname.
of the deceased is determined by law, by contract
and by will. (Art. 42) If she is the innocent spouse, she may
resume her maiden name and surname.

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However, she may choose to continue 1. Two (2) years having elapsed without any
employing her former husband’s surname, news about the absentee, or since the receipt
unless: of the last news, and
2. Five (5) years in case the absentee has left a
i. The court decrees otherwise person in charge of the administration of his
ii. She or the former husband is property (Art. 384)
married again to another person.
g. When legal separation has been granted,

the wife shall continue using her name and
surname before the legal separation Who may ask for a declaration of absence
h. A widow may use the deceased 1. The spouse present
husband’s surname as though he were still 2. The heirs instituted in a will, who may present
living. an authentic copy of the same
i. In case of identity of names and surnames, 3. The relatives who may succeed by the law of
the younger person shall be obliged to use intestacy
such additional name or surname as will 4. Those who may have over the property of the
avoid confusion. absentee some right subordinated to the
j. In case of identity of names and surnames condition of his death. (Art. 385)
between ascendants and descendants,
the word “Junior” can be used only by a When will a judicial declaration take effect
son. Grandsons and other direct male Six (6) months after its publication in a newspaper
descendants shall either: of general circulation. (Art. 386)
i. Add a middle name or the mother’s
surname, or Alienation and Encumbrance of Property
ii. Add the Roman Numerals II, III, and The wife who is appointed as an administratrix of
so on. the husband’s property cannot alienate or
encumber the husband’s property; or that of the
M. RULES GOVERNING PERSONS conjugal partnership, without judicial authority.
WHO ARE ABSENT (Art. 388)
Civil Code Provisions on Absence Administrator of absentee’s property shall be

appointed in accordance with Art. 383 (Art.
Provisional measures in case of absence 387).
When a person
a. Disappears from his domicile When will administration cease
b. His whereabouts being unknown and a. When the absentee appears personally or
c. Without leaving an agent to by means of an agent
administer his property b. When the death of the absentee is proved
and his testate or intestate heirs appear
Then, the judge, at the instance of an interested c. When a third person appears, showing by
party, a relative, or a friend, may appoint a person a proper document that he has acquired
to represent him in all that may be necessary. the absentee’s property by purchase or
other title
Same rule applies when under similar
circumstances, the power conferred by the In these cases, the property shall be at the
absentee has expired (Art. 381). disposal of those who may have a right thereto.
(Art. 389, NCC)
Preferred representative
The spouse present shall be preferred when there Family Code provisions on Absence
is no legal separation.
When a person is presumed dead
If the absentee left no spouse, any competent After an absence of seven years, it being unknown
person may be appointed by the court. (Art. 383) whether or not the absentee still lives, he shall be
presumed dead for all purposes, except for those
When absence may be declared of succession. (Art. 390, NCC)
Who are presumed dead

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1. A person on board a vessel lost during a persons from whom she inquired (Republic v.
sea voyage, or an aeroplane which is Villanueva, G.R. No. 210929, 2015).
missing, who has not been heard of for
four years since the loss of the vessel or It must be shown that sincere honest-to-goodness
airplane; efforts had indeed been made to ascertain
2. A person in the armed forces who has whether the absent spouse is still alive or is
taken part in war, and has been missing already dead. Even after the non-return of
for four years; the husband who was a member of the army
3. A person who has been in danger of and assigned to Sulu and was thereafter not
death under other circumstances and his heard of anymore by the wife for 33 years, there
existence has not been known for four was still failure on the part of said wife to actively
years. look for her missing husband, and her purported
earnest efforts to find him by asking her
NOTE: In the cases above, the person is husband's parents, relatives, and friends did not
presumed dead for all purposes, including the satisfy the strict standard and degree of diligence
division of the estate among the heirs. (Art. 391, required to create a "well-founded belief' of his
NCC) death. She did not approach the AFP for
information (Republic v. Tampus, G.R. No.
Four Essential Requisites for the Declaration 214243, 2016).
of Presumptive Death (4YRBF)
1. The spouse’s husband or wife has been NOTES:
absent for 4 consecutive Years, or 2 ● In this case, the subsequent marriage is valid,
consecutive years if the disappearance but it shall be automatically terminated by the
occurred where there is danger of death recording of the affidavit of reappearance of
under the circumstances laid down in Art. the absent spouse. (Art. 42)
391 of the Civil Code; ● Without filing of the affidavit of reappearance,
2. That the present spouse wishes to there will exist two valid marriages (valid
Remarry bigamous marriage).
3. That the present spouse has a well- ● If both spouses of the subsequent marriage
founded Belief that the absentee is dead; acted in bad faith, such marriage is void ab
and initio. (Art. 44)
4. That the present spouse Files a summary
proceeding for the declaration of Effect of Reappearance
presumptive death of the absentee The subsequent bigamous marriage under Art. 41
[Republic vs Sareñogon, 2016 (citing remains valid despite reappearance of the
Republic v. Cantor, 2013)] absentee spouse, unless the reappearance made
in a sworn statement is recorded in the civil
For a subsequent marriage to be valid, the prior registry in the place where the parties to
marriage must first be dissolved either by the the subsequent marriage resides. In such case,
death of the previous spouse or the final judicial the subsequent marriage is automatically
declaration of nullity or annulment of the previous terminated.
marriage obtained before the
subsequent marriage is entered into, regardless However, if there was a previous judgment
of the reason for the nullity or defect of the annulling or declaring the first marriage a nullity,
previous marriage, including lack of marriage the subsequent bigamous marriage remains
license (Lasanas v. People, G.R. No. 159031, valid.
2014).
Nullity of judgment of presumptive death is the
The well-founded belief in the absentee’s proper remedy and not an affidavit of
death requires the present spouse to prove reappearance when the person declared
that his/her belief was the result of diligent and presumptively dead has never been absent. In
reasonable efforts to locate the absent spouse this case, the husband was able to secure a
and that based on these efforts and inquiries, declaration of presumptive death by alleging
he/she believes that under the circumstances, fraudulent facts. (Santos v. Santos, G.R.
the absent spouse is already dead. Mere claim No. 187061, 2014)
of diligent search is insufficient without
corroborative evidence such as testimonies of the Summary proceedings under the Family Code are
final and executory pursuant to Article 247. Hence,

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a summary proceeding for the declaration of marriages which are annulled or declared void ab
presumptive death of an absent spouse under initio under Art. 40.
Article 41 of the Family Code is non-
appealable. (Republic v. Tango, G.R. No.
161062, 2009)
———— end of topic —
However, a petition for certiorari under Rule 65 is
still available (Republic v. Sarenogon, Jr., 2016).
For the purpose of not only terminating the

subsequent marriage but also of nullifying the
effects of the declaration of presumptive death and
the subsequent marriage, mere filing of an affidavit
of reappearance would not suffice (Castro v.
Gregorio, G.R. No. 188801, 2014).
Effects of Termination of Subsequent

Marriage: (LDBD-RI) (Art. 43, Family Code)
a. Children of the subsequent marriage
conceived prior to its termination shall be
considered Legitimate, unless the
marriage is void ab initio due to bad faith
of both spouses of the subsequent
marriage, in which case the children shall
be deemed illegitimate.
b. The absolute community or conjugal
partnership shall be Dissolved and
liquidated.
c. If either spouse acted in Bad faith, his/her
share in the net profits shall be forfeited:
i. In favor of the common children
ii. If none, in favor of the children
of the guilty spouse by
previous marriage
iii. In default of children, in favor of
the innocent spouse.
d. Donations by reason of the marriage
remain valid except if the donee
contracted the marriage in bad faith (in
which case, the donation is revoked by
operation of law)
e. The innocent spouse may Revoke the
designation of the spouse in bad faith as
the beneficiary in any insurance policy,
even if designation is stipulated as
irrevocable.
f. The spouse who contracted the
subsequent marriage in bad faith shall be
disqualified to Inherit from the innocent
spouse by testate or intestate
succession.
NOTE: The above effects apply to voidable

bigamous marriages.
Except for the first enumerated item (re: legitimate

children), the above effects also apply to

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d. Effects Of A Decree Of Adoption

(See Article Nos. 189-190 Of The
II. MARRIAGE Family Code)
L. Support
Topic Outline Under The Syllabus 1. What Comprises Support
2. Who Are Obliged To Give Support
A. General Principles 3. Source Of Support
1. Essential Requisites 4. Order Of Support
2. Formal Requisites N. Parental Authority
B. Mixed Marriages And Foreign Divorce 1. Concept Of Parental Authority
C. Void Marriages (See Tan-Andal V. Andal, 2. Substitute Parental Authority
G.R. No. 196359, May 11, 2021) 3. Special Parental Authority
D. Voidable Marriages 4. Effects Of Parental Authority
E. Effect Of Defective Marriages
F. Foreign Marriages
G. Legal Separation
H. Property Relations Between Spouses
1. Donation Propter Nuptias
2. Void Donations By The Spouses
3. Absolute Community Of Property
Regime
4. Conjugal Partnership Of Gains Regime
5. Separation Of Property Regime
6. Property Regime Of Unions Without
Marriage
7. Judicial Separation Of Property
I. The Family
1. General Principles
J. The Family Home
K. Paternity And Filiation
1. Concepts Of Paternity, Filiation, And
Legitimacy
2. Legitimate Children
a. Who Are Legitimate Children
b. Proof Of Filiation Of Legitimate
Children
c. Rights Of Legitimate Children
d. Grounds To Impugn Legitimacy
3. Illegitimate Children
a. Who Are Illegitimate Children
b. Proof Of Filiation Of Illegitimate
Children
c. Rights Of Illegitimate Children
d. Grounds To Impugn Filiation
4. Legitimated Children
a. Who May Be Legitimated
b. How Legitimation Takes Place
c. Grounds To Impugn Legitimacy
5. Adopted Children
a. Domestic Administrative
Adoption And Alternative Child
Care Act (R.A. 11642)
b. Who May Adopt
c. Who May Be Adopted

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b. If the residence of either party is

A. General Principles so remote there is no means of
transportation to enable such
Definition of Marriage (Art. 1) party to appear personally before
1. Special contract the civil registrar (Art. 28)
2. Permanent union c. Marriage solemnized outside the
3. Between a man and a woman Philippines where no marriage
4. Entered in accordance with law license is required by the country
5. For the establishment of conjugal and where it was solemnized (Art.
family life 26)
d. Marriage among Muslims or
1. Essential Requisites among members of ethnic
cultural communities in
accordance with their customs
Essential Requisites of Marriage: (LCI) (Art. 3)
(Art. 33)
1. Legal capacity of contracting parties
e. Marriage between persons who
a. Must be between a male and
have lived together as husband
female
and wife for at least five years
b. Must be at least 18 years old
and without any legal
2. Consent freely given, in the presence of
impediment to marry each other
the solemnizing officer
during the 5-year period of
3. Absence of any Impediment
cohabitation (Art. 34)
2. Formal Requisites Procedural Requirements in Case of
Cohabitation for 5 Years:
Formal Requisites of Marriage: (ALC) (Art. 4) 1. The parties must execute an affidavit
1. Authority of solemnizing officer; stating that they have lived together for at
2. Valid marriage License (except in cases least 5 years and are without legal
where a marriage license is not required); impediment to marry each other; and
and 2. The solemnizing officer must execute a
a. Valid only for 120 days from sworn statement that he had ascertained
issue in any part of the the qualifications of the parties and that
Philippines he had found no legal impediment to their
3. Marriage Ceremony where the marriage (Art. 34)
contracting parties appear before the
solemnizing officer, with their personal NOTE: Absence of any of these procedural
declaration that they take each other as requirements does not make the marriage void.
husband and wife in the presence of not What is indispensable is the 5-year cohabitation
less than two witnesses of legal age. as husband and wife.
EXEMPTION FROM LICENSE REQUIREMENT: The 5-year period should be a period of
cohabitation characterized by exclusivity –
Effects of the Absence of Requisites for meaning no third party was involved at any time
Marriage – that is, unbroken. (Niñal v. Bayadog, G.R.
No. 133778, 2000)
GENERAL RULE: Absence of any of the essential
or formal requisites – void ab initio The absence of the legal impediment must be
throughout the 5-year period.
EXCEPTIONS: (Office of the Administrator v. Necessario, A.M.
1. If solemnized by an unauthorized person, No. MTJ-07- 1691, 2013)
the marriage will still be valid if either or
both contracting parties believed in good Effect of Defects in the Requisites for Marriage
faith that the solemnizing officer had legal (Art. 4)
authority (Art. 35[2]) ● Absence of any of the essential or
2. In instances where marriage license need formal requisites – void ab initio
not be procured: ● Defect in any of the essential
a. Marriage in articulo mortis (one requisites – voidable
or both of the parties at the point
of death) (Art. 27)

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● Irregularity in any of the formal solemnizing officer has authority will make the
requisites – does not affect the validity of marriage valid; hence, an exception to the
the marriage, but will make the party general rule.
responsible civilly, criminally, or Venues for Marriage (Art. 8) (Directory)
administratively liable GENERAL RULE: Must be solemnized publicly,
and not elsewhere, in the:
Authorized Solemnizing Officers: (JPCCCM) a. Chambers of the judge or in open court
(Art. 7) b. Church, chapel, or office of consul-general,
1. Incumbent member of the Judiciary consul, or vice-consul
(judge – within the court’s jurisdiction;
Justices – within Philippine territory) EXCEPTIONS:
2. Any Priest, rabbi, imam or the minister a. Marriage at the point of death (in articulo
of any church or religious sect mortis)
a. Duly authorized by his church b. Marriage in remote places
or religious sect c. Marriage at a house or place designated by
b. Registered with the civil the parties in a sworn statement upon their
registrar general; written request to the solemnizing officer
c. Within limits of the written
authority of the church or Other Requirements (Art. 14-15)
sect; and EITHER OR BOTH REQUIRES
d. At least one of the PARTIES
contracting parties belongs to ● Parental
the church or religious sect. 18 years old and consent
3. Ship Captain or airplane chief above but below 21 ● Marriage
a. At least one of the parties is counseling
in articulo mortis; ● Parental
b. Between passengers or 21 years old and advice
crew members; and above but below 25 ● Marriage
c. While the ship is at sea or the Counseling
plane is in flight and also
during stopover at ports of Effects of Lack of Parental Consent, Parental
call (Art. 31) Advice, or Marriage Counselling If Required
4. Military Commander (Art. 7 and Art. GROUND EFFECTS
32)
a. Must be a commissioned Lack of parental
Marriage is voidable
officer consent
b. Of a unit to which a chaplain
is assigned No effect on validity of
c. Chaplain is absent at the time marriage. However,
of marriage this will suspend the
issuance of the
d. During military operations
marriage license for
e. Must be one in articulo mortis
3 months from the
and
completion of
f. Between persons within the publication of the
zone of military operations or
application. (Art. 16)
whether members of the Lack of parental
armed forces or civilians advice or failure to
If they get married
g. Consul-general, consul, or attach certificate of
during the 3-month
vice-consul Between Filipino marriage counseling
period with a license,
citizens abroad the marriage shall be
h. Mayor- effective January 1, valid but civil and
1992 (LGC) criminal liability may
attach. (Art. 16)
REMEMBER: As a general rule, absence of a
formal requisite such as lack of authority of a If they get married
solemnizing officer will make the marriage void; during the 3-month
but belief in good faith by one party that a period without a

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license, the marriage After Divorce with Foreigner-spouse (Art. 26,

shall be void for lack Par. 2)
of a formal 1. A valid marriage that had been
requirement. celebrated between a Filipino citizen and
No marriage license a foreigner
will be issued in the 2. A valid divorce subsequently obtained
absence of Certificate abroad by the alien spouse capacitating
of Compliance issued him or her to remarry
by the Family
Planning Office. (R.A.
The letter of the law does not demand that the
10354, Sec. 15)
alien spouse should be the one who initiated the
proceeding wherein the divorce decree was
Marriage Certificate
granted. It does not distinguish whether the
While a marriage certificate is considered the
Filipino spouse is the petitioner or the respondent
primary evidence of a marital union, it is not
in the foreign divorce proceeding (Republic
regarded as the sole and exclusive evidence of
v. Manalo, G.R. No. 221029, 2018).
marriage. The fact of marriage may be proven by
relevant evidence other than the marriage
certificate. Hence, even a person’s birth certificate NOTE: Republic v. Manalo now allows a Filipino
spouse to initiate obtaining a foreign divorce; it’s
may be recognized as competent evidence of the
no longer limited to the foreign spouse as
marriage between his parents. (Anonuevo v.
obtaining the divorce.
Int. Estate of Jalandoni, G.R. No. 178221, 2010)
Art. 26 should be interpreted to mean that it is
B. Mixed Marriages And Foreign
irrelevant for courts to determine if it is the foreign
Divorce spouse that procures the divorce abroad. Once a
divorce decree is issued, the divorce becomes
MIXED MARRIAGES "validly obtained" and capacitates the foreign
Marriages celebrated abroad (Art. 26, par. 1) spouse to marry. The same status should be given
to the Filipino spouse. The national law of Japan
GENERAL RULE: Marriages solemnized outside does not prohibit the Filipino spouse from
the Philippines in accordance with the laws of the initiating or participating in the divorce
foreign country shall be valid here (lex loci proceedings. It would be inherently unjust for
celebrationis) a Filipino woman to be prohibited by her own
● Basis: Principle of Comity national laws from something that a foreign
● However, if solemnized inside the law may allow (Racho v. Seiichi Tanaka, G.R. No.
Philippine Consulate abroad, Philippine 199515, June 25, 2018)
laws must be observed
NOTE: The determinative point when the foreigner
EXCEPTION TO LEX CELEBRATIONIS: who procured the divorce should be a foreigner at
a. Where either or both parties are below 18 the time of the divorce, and not at the time of the
years old marriage ceremony.
b. Bigamous or polygamous marriage
(except Art. 41 on presumptive death of How to prove foreign divorce:
spouse) 1. Present the divorce decree, proven as a
c. Mistake in identity public or official record of a foreign
d. Marriage void under Art. 53 – contracted country by either
following the annulment or declaration of a. An official publication, or
nullity of a previous marriage but before b. A copy thereof attested by the
recording of partition officer having legal custody of
e. Psychological incapacity the document
f. Incestuous marriage c. If the record is not kept in the
g. Marriage void for reasons of public policy Philippines, such copy must be:
i. Accompanied by a
FOREIGN DIVORCE certificate issued by the proper
or consular officer in the
Requisites for a Filipino Spouse to Gain Philippine foreign service
Capacity to Remarry under Philippine Law stationed in the foreign country
in which the record is kept

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ii. Authenticated by the seal of website or online link containing the authentic
his office copies.
2. Prove the conformity of the decree to the • This circular supersedes OCA Circular No.
foreign law 157-2022 dated 23 June 2022.
(Garcia v. Recio, 2001)
Settled is the rule that in actions involving the C. Void Marriages (See Tan-Andal
recognition of a foreign divorce judgment, it is
V. Andal, G.R. No. 196359, May 11,
indispensable that the petitioner proves not
only the foreign divorce judgment granting the 2021)
divorce, but also the alien spouse’s national
law. The English translation submitted was VOID MARRIAGES
published by Eibun Horei-Sha, Inc., a private
company in Japan engaged in publishing English Marriages Void from the Beginning (Void Ab
translation of Japanese laws, which came to be Initio):
known as the EHS Law Bulletin Series. However,
these translations are "not advertised as a source 1. Void under Art. 35:
of official translations of Japanese laws;" rather, it a. Contracted by any party below
is in the KANPŌ or the Official Gazette where all 18 years old
official laws and regulations are published, albeit b. Solemnized by an unauthorized
in Japanese. Accordingly, the English translation solemnizing officer
submitted by Mrs. X is not an official publication 1. Exception: If either or both parties
exempted from the requirement of authentication. believed in good faith that the officer had
Neither can the English translation be considered authority
as a learned treatise. (Arreza v. Toyo, G.R. No. c. Solemnized without a valid
213198, July 1, 2019) marriage license
2. Exception: When license not required
COMPILATION OF THE LAWS OF FOREIGN d. Bigamous or polygamous
COUNTRIES ON MARRIAGE AND DIVORCE marriages
(OCA Circular No. 157-022 dtd. 07 July 2022) 3. Exception: Art. 41 – Marriage contracted
• There is an increasing number of petitions by a person whose spouse has been
filed before Philippine courts for recognition absent for 4 years (ordinary absence) or
and enforcement of foreign decree of divorce. 2 years (extraordinary absence), where
• The Office of the Court Administrator (OCA) such person has a well-founded belief
experienced a sudden influx of requests for that his/her absent spouse is already
certified true copies of divorce laws of foreign dead, and had obtained a declaration of
countries which the parties intend to use as presumptive death, and at the time of
supporting document to their petitions for marriage ceremony is in good faith
recognition of a foreign decree of divorce. together with the subsequent spouse
• To address this matter, the Department of e. Those contracted through
Foreign Affairs (DFA), upon request of the mistake of one contracting party
OCA, furnished the OCA with a compilation of as to the identity of the other;
several foreign laws on marriage and divorce, and
for reference and use of the judiciary in f. Those subsequent marriages
resolving petitions for recognition and that are void under Article 53.
enforcement of foreign decree of divorce, 2. Psychological Incapacity (Art. 36)
subject to prevailing jurisprudence and/or 3. Incestuous Marriage (Art. 37)
applicable Court issuances related 4. By Reasons of Public Policy (Art. 38)
thereto. This could be accessed at
https://sc.judiciary.gov.ph/foreign-divorce- Good faith marriage (Art. 35[2])
laws/. Good faith means an honest and reasonable belief
• The text of these laws, and! or their English that the marriage was valid at its inception, and
translations, were officially transmitted to the that no legal impediment exists to impair its validity
Philippine Embassies and Consulates by the (52 Am. Jur. 2d 96)
Ministry of Foreign Affairs of other agencies of
the concerned foreign governments through Marriage without a valid marriage license
Notes Verbale or official letters enclosing the A certification of no marriage license by the
text of these laws or indicating the official local civil registrar stating that there was not
enough staff to search for the marriage license is
not adequate and will not prove absence of a

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marriage license. The certification, in fact, proves The contemplated mistake refers to the actual
that no diligent search was made. (Sevilla vs. physical identity of the other party, and not merely
Cardenas, G.R. No. 167684, 2006) mistake in the name, character, age, or other
attributes of the person.
A Certification of the Civil Registrar to the
effect that “after a diligent search on the files of Subsequent Marriage Void under Art. 53
Registry Book on Application for marriage license A person whose marriage has been annulled or
and license Issuance available in this office, no declared null and void may remarry as long as,
record could be found on the alleged issuance of after the marriage is annulled/nullified, he does the
this office of Marriage License No. XXXXX in favor following:
of Mr. A and B dated XXXX” does not 1. Partition and distribution of the properties
categorically prove that there was no marriage of the spouses.
license. Furthermore, marriages are not dissolved 2. Distribution of the presumptive legitimes
through mere certifications by the civil registrar. It of the children; and
will be wrong to establish a doctrine that a 3. Recording of the judgement of annulment
certification that a marriage license cannot be or absolute nullity (Art. 40), the partition
found may substitute for a definite statement that and distribution, and the delivery of the
no such license existed or was issued. (Vitangcol presumptive legitimes in the appropriate
v. People, G.R. No. 207406, 2016) civil registry and registries of the
property.
The Certification by the Municipal Civil
Registrar that the Office of the Local Civil Failure to comply with these requisites will make
Registrar “has no record nor copy of any marriage the subsequent marriage void ab initio.
license” ever issued in favor of petitioner and Furthermore, failure to record in the proper
respondent, coupled with respondent’s failure to registries will mean that such will not affect third
produce a copy of the alleged marriage license or persons (Art. 52-53).
of any evidence to show that such license was
ever issued, proves that no valid marriage license Liquidation, partition, and distribution of
was, in fact, issued. (Kho v. Republic and Kho, presumptive legitimes apply only to marriages
G.R. No. 187462, 2016) declared void under Art. 40 and 45. (Diño v. Diño,
G.R. No. 178044, 2011)
Valid Bigamous Marriages
Psychological Incapacity (Art. 36)
GENERAL RULE: Marriage contracted by any Marriage where any of the parties, at the time of
person during the subsistence of a previous the celebration of the marriage, was
marriage is void (Art. 35) psychologically incapacitated to comply with the
essential marital obligation, even if incapacity
EXCEPTION: If subsequent marriage was becomes manifest only after solemnization.
contracted with a valid declaration of presumptive
death. Psychological Incapacity must be judged on a
case-by-case basis. It must be characterized by:
First marriage was not judicially declared void nor (JIG)
was Z judicially declared presumptively dead 1. Juridical antecedence
under the Civil Code. Parties to a marriage should 2. Incurability
not be permitted to judge for themselves its nullity, 3. Gravity
only competent courts having such authority. Prior
to such declaration of nullity, the validity of the first NOTE: Not being an illness, psychological
marriage is beyond question. A party who
incapacity is not something to be cured.
contracts a second marriage then assumes the
risk of being prosecuted for bigamy. The absolute
nullity of a previous marriage may be invoked for Psychological Incapacity is neither a mental
purposes of remarriage on the basis solely of a incapacity nor a personality disorder that must be
final judgment declaring such previous marriage proven by through expert opinion. There must be
void. Bigamy was consummated when X proof of a spouse’s “personality structure” which
subsequently married Y without his first marriage manifests itself through clear acts of
to Z having been judicially declared void. dysfunctionality that undermines the family. It must
(Vitangcol v. People, G.R. No. 207406, 2016) make it impossible for them to understand and
Mistake in Identity (Art. 35[5]) comply with their essential marital obligations. The
incapacity must be so enduring and persistent with

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respect to the specific partner, and contemplates d. Clearly Explained in the decision
a situation where the couple's respective c. The incapacity must be proven to be
personality structures are so incompatible and Existing at the time of the celebration of
antagonistic that the only result of the union would the marriage
be the inevitable and irreparable breakdown of the d. Such incapacity must be shown to be
marriage. (Tan-Andal v. Andal. G.R. No. 196359, medically or clinically permanent or
2021) Incurable
e. Such illness must be Grave enough to
Mere showing of irreconcilable differences and bring about the disability of the party to
conflicting personalities do not constitute assume the essential obligations of
psychological incapacity. (Carating-Siaynco marriage
v. Siaynco, G.R. No. 158896, 2004) f. Essential marital Obligations must be
those embraced by Arts. 68-71, as well as
Mere sexual infidelity or perversion and Arts. 220, 221, and 225 of the Family
abandonment do not by themselves constitute Code.
psychological incapacity within the contemplation g. Interpretations given by the National
of the Family Code. (Dedel v. CA, G.R. Appellate Matrimonial Tribunal of the
No. 151867, 2004) Catholic Church in the Philippines, while
not controlling or decisive, should be
One of the essential marital obligations is "to given great respect by our courts
procreate children based on the universal principle h. The trial court must order the prosecuting
that procreation of children through sexual attorney or fiscal and the Solicitor General
cooperation is the basic end of to appear as Counsel for the State
marriage." Constant non-fulfillment of this
obligation will finally destroy the integrity or NOTE:. Proof of a spouse’s “personality structure”
wholeness of the marriage. The senseless and need not be given by an expert. Ordinary
protracted refusal of one of the parties to fulfill this witnesses who have been present in the life of the
marital obligation is equivalent to psychological spouses before they contracted marriage may
incapacity. (Chi Ming Tsoi v. CA, G.R. No. 119190, testify on the behavior of the incapacitated
1997) spouse. (Tan-Andal v. Andal. G.R. No. 196359,
2021)
A finding of psychological incapacity on the part of
one spouse shows non-cognizance of one’s ENDURING AND PERSISTENT INCAPACITY.
essential marital obligation, and therefore negates Psychological incapacity is incurable only in the
bad faith. As a consequence, moral and legal (not medical) sense in that the incapacity is
exemplary damages cannot be awarded. Moral 'so enduring and persistent with respect to a
damages should be predicated on specific specific partner, and contemplates a situation
evidence that was done deliberately and with where the couple's respective personality
malice by a party who had known of his or her structures are so incompatible and
disability and yet willfully concealed the same. antagonistic that the only result of the union
(Buenaventura v. CA, GR No. 127358, 2005) would be the inevitable and irreparable breakdown
of the marriage.' In order for the said requisite to
The burden falls upon petitioner, not just to prove obtain, there must be '[a]n undeniable pattern of
that respondent suffers from a psychological a persisting failure to be a present, loving,
disorder, but also that such psychological disorder faithful, respectful, and supportive spouse that
renders her "truly incognitive of the basic marital must be established so as to demonstrate that
covenants that concomitantly must be assumed there is indeed a psychological anomaly or
and discharged by the parties to the marriage." incongruity in the spouse relative to the other.'
(Baccay v. Baccay, GR No. 117318, 2010) Meanwhile, for psychological incapacity to be
considered as grave, it should be shown that the
Jurisprudential guidelines: (BRE-IGO-IC) same is not merely based on 'mild
a. Burden of proof to show the nullity of characterological peculiarities, mood changes
marriage is upon the plaintiff [or] occasional emotional outbursts' nor mere
b. The Root cause of the psychological 'refusal, neglect[,] difficulty, much less ill
incapacity must be: (CCEE) will' of the alleged incapacitated party. In this
a. Medically or Clinically identified regard, 'a deeper and fuller assessment of the
b. Alleged in the Complaint alleged incapacity must be done such that it is
c. Sufficiently proven by Experts clearly and convincingly shown that the fulfillment

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of the essential marital obligations is not merely prove that the incapacity was grave, incurable,
feigned or cumbersome but rather, practically and existing prior to the time of the
impossible because of the marriage. Apart from the testimonies of the
distinct psychological makeup of the person plaintiff-spouse and the doctor, and the latter's
relative to his or her spouse.' Lastly, juridical psychological report, there is no other evidence
antecedence — which, to note, is based on the presented to support the allegation of the
phrase 'at the time of the celebration of the psychological incapacity. (Pugoy-Solidum v.
marriage' in Article 36 of the Family Code — Republic, GR No. 213954, 2022)
means that the incapacity is determined to
exist during the time the marriage is Incestuous Marriage (Art. 37)
celebrated, although it manifests thereafter. Whether the relationship is legitimate or
(Guinalon v. Guinalon, GR No. UDK17203, 2022) illegitimate:
a. Between ascendants and descendants of
Quantum of proof any degree
The Quantum of proof required in nullity cases b. Between brothers and sisters, whether full or
under Article 36 is clear and convincing evidence. half blood
This quantum of proof that requires more than
preponderant evidence but less than proof beyond Void for Reasons of Public Policy (Art. 38)
reasonable doubt. The reason for such is because (exclusive list)
the State follows the presumption of validity of 1. Between collateral blood relatives up to
marriages. (Tan-Andal v. Andal. G.R. No. 196359, 4th civil degree
2021) a. There is no prohibition regarding
marriages between collateral
TOTALITY OF EVIDENCE (AND FACTUAL blood relatives by half-blood
BASIS) TO PROVE PSYCHOLOGICAL 2. Between step-parents and step-children
INCAPACITY. Thus, a mere allegation of 3. Between parents-in-law and children-in-
Psychological Incapacity based only on plaintiff- law
spouse and psychiatrist with psychological 4. Between adopting parent and adopted
report is not sufficient. The Tan-Andal child
Guidelines: (1) The psychological incapacity must 5. Between surviving spouse of the adopter
be shown to have been existing at the time of and the adopted child
the celebration of marriage; (2) Caused by a 6. Between surviving spouse of the adopted
durable aspect of one's personality structure, child and the adopter
one that was formed prior to their 7. Between adopted and a legitimate child of
marriage; (3) Caused by a genuinely serious adopter
psychic cause; and (4) Proven by clear and 8. Between adopted children of same
convincing evidence. The psychological report adopter
is bereft of any factual basis proving 9. Between parties where one, with the
psychological incapacity. It fails to prove the intention to marry the other, killed the
enduring aspects of the personality called other person’s spouse or his/her own
"personality structure" that manifest itself spouse
through clear acts of dysfunctionality that a. No prior criminal conviction by
render him unable to discharge the essential the court is required by the law
marital obligations. Notably, there is no since mere preponderance of
evidence on record proving that the alleged evidence is required to prove the
psychological incapacity existed prior to their killing
marriage. Verily, plaintiff-spouse failed to
provide any background on the past The following can marry each other:
experiences or environment growing up that 1. Brother-in-law and sister-in-law
could have triggered his behavior. Doctor’s 2. Stepbrother and stepsister
findings were not related or linked to the alleged 3. Guardian and ward
psychological incapacity except in a general 4. Adopted and illegitimate child of the
way. Thus, even if Tan-Andal dispensed with the adopter
need for a psychological report of an expert 5. Parties who have been convicted of
witness, what is important is that the totality of adultery or concubinage
evidence must support a finding of
psychological incapacity. In other words, the NOTE: Relationship by affinity between the
totality of evidence must still be sufficient to surviving spouse and the kindred of the deceased

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spouse continues even after the death of the prosecution for bigamy. To summarize and for
deceased spouse, regardless of whether the future guidance, the parties are not required to
marriage produced children or not. (Vda. de obtain a judicial declaration of absolute nullity
Carungcong v. People, G.R. No. 181409, 2010) of a void ab initio first and subsequent
marriages in order to raise it as a defense in a
Subsequent Marriage Without Judicial bigamy case. The same rule now applies to all
Declaration of Nullity of Previous Void marriages celebrated under the Civil Code and
Marriage the Family Code. Article 40 of the Family Code
For purposes of remarriage, the only acceptable did not amend Article 349 of the RPC, and thus,
evidence that the previous marriage has been did not deny the accused the right to
voided is a final judgment declaring such marriage collaterally attack the validity of a void ab
null and void; if the purpose is NOT TO initio marriage in the criminal prosecution for
REMARRY, other evidence can be presented to bigamy. However, if the first marriage is
prove the nullity of the previous marriage. (Art. 40) merely voidable, the accused cannot interpose
an annulment decree as a defense in the
Even if a marriage is void, it must be declared void criminal prosecution for bigamy since the
first by final judgment before the parties to such voidable first marriage is considered valid and
void marriage can remarry. The parties cannot subsisting when the second marriage was
decide for themselves the invalidity of their contracted. The crime of bigamy, therefore, is
marriage. consummated when the second marriage was
celebrated during the subsistence of the voidable
Absence of a Formal Requisite of first marriage. The same rule applies if the second
solemnization of Marriage marriage is merely considered as voidable. To
A judicial declaration of nullity is not needed where our mind, it is time to abandon the earlier
the parties merely signed a marriage contract on precedents and adopt a more liberal view that a
their own and NO marriage ceremony was void ab initio marriage can be used as a
performed by a duly authorized solemnizing defense in bigamy even without a separate
officer. Such act alone, without more, cannot be judicial declaration of absolute nullity. The
deemed to constitute an ostensibly valid accused may present testimonial or
marriage. (Morigo v. People, G.R. No. 145226, documentary evidence such as the judicial
2004) declaration of absolute nullity of the first
subsequent void ab initio marriages in the
Void Marriage under the Civil Code criminal prosecution for bigamy. The said view
If a marriage is void under a ground provided in is more in accord with the retroactive effects of a
the Civil Code and a subsequent marriage was void ab initio marriage, the purpose of and
contracted before the effectivity of the FC without legislative intent behind Article 40 of the Family
having the first marriage declared null and void, Code, and the rule on statutory construction of
the second marriage is valid. The Civil Code penal laws. (Pulido v. People, GR No. 220149,
contains no express provision on the necessity of 2021)
a judicial declaration of nullity of a marriage
considered void under the Civil Code. The D. Voidable Marriages
requirement of a judicial decree of nullity does not
apply to marriages celebrated before the effectivity VOIDABLE MARRIAGES
of the Family Code, particularly if the children of Grounds for Annulment (PUFFIS) (Art. 45)
the parties were born while the Civil Code was in 1. Lack of Parental consent
force. (Castillo v. Castillo, G.R. No. 189607, 2016) 2. Either party is of Unsound mind
3. Fraudulent means of obtaining consent of
JUDICIAL DECLARATION OF ABSOLUTE either party
NULLITY NOT REQUIRED AS A DEFENSE IN A 4. Consent was obtained by Force,
BIGAMY CASE. In criminal prosecutions for intimidation, or undue influence
bigamy, the accused can validly interpose the 5. That either party was physically Incapable
defense of a void ab initio marriage even without of consummating the marriage with the
obtaining a judicial declaration of absolute nullity. other. Such incapacity:
Consequently, a judicial declaration of absolute ● Continues, and
nullity of the first and/or subsequent marriages ● Is Incurable
obtained by the accused in a separate proceeding, 6. Either party afflicted with a Sexually
irrespective of the time within which they are transmissible disease. The disease:
secured, is a valid defense in the criminal ● Is found to be Serious; and

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● Appears to be incurable must show clear and convincing evidence to

cause the declaration of nullity of marriage.
Circumstances constituting fraud (Art. 46) E. Effect Of Defective Marriages

a. Non-disclosure of conviction by final
judgment of crime involving moral Effect of Defects in the Requisites for Marriage
turpitude (Art. 4)
b. Concealment of pregnancy by another
man a. Defect in any of the essential
c. Concealment of sexually transmissible requisites – Voidable
disease, regardless of nature, existing at b. Irregularity in any of the formal
the time of marriage requisites – Does not affect the validity
d. Concealment of drug addiction, habitual of the marriage but will make the party
alcoholism, homosexuality, and responsible civilly, criminally, or
lesbianism administratively liable.
Art. 45 STD v. Art. 46 STD ABSENCE IN REQUISITES OF MARRIAGE (Art.

ARTICLE 45 STD ARTICLE 46 STD 4[1])
Type of fraud which is
Ground for annulment a ground for GENERAL RULE: If there is an absence of
annulment essential or formal requisites of marriage,
Does not have to be said marriage is void.
Must be concealed Example: Marriage by proxy in the Philippines is
concealed
Must be serious and Need not be serious void. Getting married with an expired marriage
appears to be and appear to be license is void.
incurable incurable
It is the concealment EXCEPTIONS:
STD itself is a ground of which constitute 1. No marriage license but listed in Chapter
for annulment the ground for 2, Title I of the Family Code.
annulment Example: Marriage of two persons living
in places where there is no means of
Doctrine of Triennial Cohabitation transportation allowing them to appear
Presumption that the husband is impotent should personally before the civil registrar;
the wife still remain a virgin after 3 years of living Marriages between Muslims & other
together with her husband. Burden of proof to cultural minorities which follow their
prove non-impotency shifts to the husband. cultural practices.
2. Art. 35 (2) – When solemnizing officer has
NOTE: Grounds for annulment must exist at the no authority, but either party believed in
time of the celebration of the marriage. good faith that he had the authority to do
so.
ANNULMENT UNDER ART. 36 (AS
DEFECTS IN REQUISITES OF MARRIAGE
RECENTLY ARTICULATED UNDER TAN- Defects in essential requisites makes the marriage
ANDAL V. ANDAL, G.R. NO. 196359, MAY voidable but shall make the party responsible
11, 2022; TOTALITY OF EVIDENCE RULE) civilly, criminally, or administratively liable. (Art.
4[2])
Totality of Evidence Rule
Psychological incapacity is not a medical but a IRREGULARITIES IN REQUISITES OF
legal concept. It refers to a personal condition that MARRIAGE (Art. 4[3])
prevents a spouse to comply with fundamental
marital obligations only in relation to a specific GENERAL RULE: Irregularities in formal
partner that may exist at the time of the marriage requisites do not affect validity of the marriage.
but may have revealed through behavior Examples:
subsequent to the ceremonies. It need not be a a. Absence of two witnesses of legal age
mental or personality disorder. It need not be a during ceremony
permanent and incurable condition. Therefore, the b. Marriage solemnized in a place other than
testimony of psychologist or psychiatrist is not publicly in the chambers of the
mandatory in all cases. The totality of the evidence

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c. judge or in open court, in church, chapel, b. Bigamous or polygamous marriage

or temple, or in the office of the (except Art. 41 on presumptive death of
d. consul-general, consul or vice-consul spouse)
e. Issuance of a marriage license in city or c. Mistake in identity
municipality not the residence of d. Marriage void under Art. 53 – contracted
f. either of the contracting parties following the annulment or declaration of
g. Unsworn application for a marriage nullity of a previous marriage but before
license recording of partition
h. Failure of the contracting parties to e. Psychological incapacity
present original birth certificates or f. Incestuous marriage
i. baptismal certificate to the local civil g. Marriage void for reasons of public policy
registrar who likewise failed to ask for
j. the same Thus, what is dispensed with are merely the
k. Failure of the contracting parties between authority of the solemnizing officer and the
the ages of 18-21 to exhibit marriage license requirements.
l. consent of parents or persons having
legal charge of them to local civil Is the “marriage ceremony” requirement
m. registrar dispensed with, thus allowing common-law
n. Failure of the parties between ages 21-25 marriage? – NO, Art. 26 of the Family Code uses
to exhibit advice of parents to the the word “solemnized”. However, if solemnized
o. local civil registrar abroad, the ceremony prescribed in the place of
p. Failure to undergo marriage counseling celebration shall apply.
q. Failure of local civil registrar to post
required notices Is the same-sex marriage of Filipinos abroad
r. Issuance of a marriage license despite valid? NO, Art.15 of the Civil Code provides that
absence of publication or prior to laws relating to family rights and duties, or to
s. completion of 10-day publication period status, condition and legal capacity of persons are
t. Failure of contracting parties to pay binding upon citizens of the Philippines, even
prescribed fees for marriage license though living abroad. In the Philippines, a person
u. Failure of the person solemnizing the has legal capacity to marry only a person of the
marriage to send copies of the marriage opposite sex. Hence, public policy mandates that
certificate to the local civil registrar only a man and woman can marry each other.
EXCEPTION: Contracting parties are 18-21 years Proof of Foreign Marriage

old with no consent from parents, therefore making 1. The foreign law as a question of fact
the marriage annullable. 2. The celebration of marriage pursuant
thereto by convincing evidence (Ching
F. Foreign Marriages Huat v. Co Heong. G.R. No. L-1211)
FOREIGN MARRIAGES Doctrine of Processual Presumption

Marriages celebrated abroad (Art. 26, par. 1) If such law of the other state is not pleaded nor
proved and for purposes of determining the validity
GENERAL RULE: Marriages solemnized outside of a marriage in the said state, the laws of such
the Philippines in accordance with the laws of the state, in the absence of proof to the contrary, will
foreign country shall be valid here (lex loci be presumed by the Court to be the same as the
celebrationis) laws of its own state.
● Basis: Principle of Comity
● However, if solemnized inside the
Philippine Consulate abroad, Philippine
laws must be observed
EXCEPTION TO LEX CELEBRATIONIS:

a. Where either or both parties are below 18
years old

ATENEO CENTRAL
Void Marriage v. Voidable Marriage

BASIS VOID VOIDABLE
As to nature Inexistent from the time of performance Valid until annulled
Prescriptive period depends on the

As to prescriptibility Does not prescribe (Art. 39)
ground/s invoked.
(a) May be attacked directly or collaterally
but for the purpose of remarriage, there
must be a judicial declaration of nullity (a) Cannot be attacked collaterally, only
directly (i.e. there must be a decree of
As to how
(b) Direct: Only the spouses annulment)
marriage may be
impugned
(c) Collateral: Any interested party in any (b) Can no longer be impugned after
proceeding where the determination of death of one of the parties
the validity of the marriage is necessary
to give rise to or negate certain rights
Family Court of the province or city where the petitioner or the respondent has been
residing for at least 6 months prior to the date of filing (if the respondent is a non-
Venue for action
resident: where he may be found in the Philippines) at the election of the petitioner.
(A.M. No. 02-11-10-SC)
As to susceptibility Can be ratified either by free
Cannot be ratified
to ratification cohabitation or prescription
Absolute community exists unless they

As to effect No community property, only co-
agreed upon another system in their
on property ownership (Art. 147/148)
marriage settlement
Children are illegitimate
Except those falling under the following:
As to effect on i. In case of psychological incapacity Children are legitimate if conceived
children (Art. 36) before decree of annulment
ii. Children born of subsequent marriage
(Art. 53)
SUMMARY FOR VOIDABLE MARRIAGES
GROUNDS FOR PRESCRIPTIVE

WHO CAN RATIFICATION
ANNULMENT PERIOD
Underage party
Within 5 years after turning 21
Lack of parental (18-21 years old) Free cohabitation after
consent reaching 21
Parent or guardian Before child reaches 21
Sane spouse who

had no knowledge Before the death of the other party
of insanity Free cohabitation after
Insanity of one
insane spouse regains
party
sanity
Guardian of insane Any time before the death of either
spouse party

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During lucid interval or after regaining

Insane spouse
sanity also before death of other party
Free cohabitation with full

Fraud Within 5 years after discovery of fraud knowledge of facts
constituting the fraud
Free cohabitation after the
cause (force, intimidation,
undue influence)
Within 5 years from time force, disappeared or ceased.
Vitiated consent Injured Party intimidations or undue influence
disappeared or ceased Intimidation can be on the
person or the property of the
injured party and his/her
immediate family
Incapability to No ratification since defect is
Within 5 years after the marriage
consummate/ permanent, but right of
ceremony
STD action may prescribe

ATENEO CENTRAL
EFFECTS OF VALID BIGAMOUS MARRIAGE, DECLARATION OF NULLITY, AND ANNULMENT
VALID BIGAMOUS
MARRIAGE (ART. 41- WITH
DECLARATION OF NULLITY ANNULMENT
DECLARATION OF
PRESUMPTIVE DEATH)
Children of subsequent Children conceived or born
Status of Illegitimate except Art. 36 and
marriage conceived before its before annulment decree –
Children Art. 53.
termination – legitimate legitimate
If void under Art. 40 (when
ACP/CPG shall be
contracted by a spouse of a
ACP/CPG shall be liquidated. liquidated.
prior valid marriage, before
the latter is judicially declared
The share in the net profits of The share in the net profits
void): Same as property
community property or conjugal of community property or
relations of Valid Bigamous
partnership property of the conjugal partnership
Marriage. Art. 43, par. 2 applies.
spouse who contracted the property of the spouse who
Property
marriage in bad faith, shall be contracted the marriage in
Relations If not void under Art. 40, the
forfeited in favor of common bad faith, shall be forfeited in
provisions of Art. 147 and Art.
children or if there are none, favor of common children or
148 govern. The share of the
children of the guilty spouse by if there are none, children of
party in bad faith in the co-
previous marriage or in default the guilty spouse by
ownership shall be forfeited in
thereof, the innocent spouse. previous marriage or in
favor of their common children.
(Art. 43[2]) default thereof, the innocent
spouse. Same as Art. 40
Shall remain valid except:
If void under Art. 40: Same as
- If donee contracted the
effect on donations for Valid
marriage in bad faith, donations
Bigamous Marriage. Art. 43, par.
propter nuptias made to the Same as effect on donations
3, and Art. 44, apply.
Donations donee are revoked by operation for Valid Bigamous
Propter of law. (Art. 43[3]) Marriage. Art. 43, par. 3, and
If not under Art. 40:
Nuptias Art. 44, apply.
option belongs to the donee.
- If both spouses acted in bad
(Art. 86[1])
faith, donations propter nuptias
made by one in favor of the
other are revoked by operation
of law.
If one spouse contracted the
marriage in bad faith, he shall be
disqualified to inherit from the If void under Art. 40: Same as
innocent spouse in both testate effect on succession for Valid
and intestate succession. (Art. Bigamous Marriage. Art. 43, par. Same as effect on
43[5]) 5, and Art. 44, apply. succession for Valid
Succession
Bigamous Marriage of Art.
If both spouses acted in bad 43, par. 5, and Art. 44, apply.
faith, all testamentary If marriage is void,
dispositions made by one in no successional rights involved.
favor of the other are revoked by
operation of law. (Art. 44)

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G. Legal Separation No legal separation may be declared unless the

court has taken steps towards the reconciliation of
Grounds for Legal Separation: (PRC-FAAL BILA) the spouses and is fully satisfied, despite such
(Art. 55) efforts, that reconciliation is highly improbable. (Art.
a. Repeated Physical violence or grossly 59)
abusive conduct directed against petitioner,
a common child or a child of the petitioner The six-month-cooling-off-period requirement can be
a. Physical violence or moral pressure to dispensed with if the ground for legal separation
compel the petitioner to change Religious or involves violence against the woman or the child.
political affiliation Thus, the Court shall proceed on the main case and
b. Attempt of respondent to Corrupt or induce other incidents of the case as soon as possible (Sec.
the petitioner, a common child, or a child of 28, RA 9262).
the petitioner, to engage in prostitution, or
connivance in such corruption or inducement Stipulation of Facts or Confession of Judgement
c. Final judgment sentencing respondent to No decree of legal separation shall be based upon a
imprisonment of more than 6 years (even if stipulation of facts of confession of judgement. In
pardoned) any case, the court shall order the prosecuting
d. Drug Addiction or habitual Alcoholism attorney or fiscal assigned to it to take steps to
e. Lesbianism or homosexuality prevent collusion between the parties and to take
f. Subsequent Bigamous marriage care that the evidence is not fabricated
g. Sexual Infidelity or perversion or suppressed. (Art. 60)
h. Attempt by respondent against the Life of the
petitioner
i. Abandonment for more than 1 year without Effects of Filing a Petition for Legal Separation
justifiable cause (Art. 61)
a. The spouses shall be entitled to live separately
Grounds to Deny Legal Separation/Defenses to from each other
Legal Separation: (C4-D-GRP) (Art. 56) b. The court, in the absence of a written agreement
a. Condonation between the spouses, shall designate either of
them or a third person to administer the absolute
NOTE: Failure of the husband to look for his community or conjugal partnership property. The
adulterous wife is not a condonation of wife’s administrator appointed by the court shall have
adultery. the same powers and duties as those of a
guardian under the Rules of Court
b. Consent
c. Connivance Effects of Pendency of Action for Legal
d. Collusion Separation (Art. 62 in relation to Art. 49)
e. Death of either party during the pendency of During the pendency of the action and in the
the case (Lapuz-Sy v. Eufemio, G.R. No. L- absence of adequate provisions in a written
30977, 1972). agreement between the spouses, the Court shall
f. Equal Guilt provide for the following:
g. Reconciliation of the spouses during the a. The support of the spouses
pendency of the case (Art. 66) b. The custody and support of their common
h. Prescription children
When to file/try an action for legal separation NOTE: The Court shall give paramount
An action for legal separation shall be filed within 5 consideration to the moral and material
years from the time of occurrence of the cause (Art. welfare of said children and their choice
57). The time of discovery of the ground for legal as to the parent with whom they wish to
separation is not material in the counting of the remain.
prescriptive period.
c. Appropriate visitation rights of the other
The action for legal separation shall not be tried parent
before 6 months shall have elapsed since the filing
of the petition, (Art. 58) except interlocutory matters Effects of Decree of Legal Separation (Art. 63)
such as the determination of custody of children, a. Spouses are entitled to live separately
alimony, and support pendente lite. b. Marriage bond is not severed
c. Dissolution of property regime

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d. Forfeiture of the share of the guilty spouse designation of the insurance beneficiary
in the net profits of the ACP/CPG shall take effect upon written notification
to the insured.
NOTE: For purposes of computing the net
profits subject to forfeiture, the said profits NOTE: Action to revoke the donation must be
shall be the increase in value between the brought within 5 years from the time the decree has
market price of the community property at attained finality.
the time of the celebration of the marriage
and at the time of dissolution. What is Reconciliation
forfeited is not the share of the guilty spouse If the spouses should reconcile, a corresponding
in the liquidation of the community property joint manifestation under oath duly signed by
but merely the profits. (Siochi v. Gozon GR them shall be filed with the court in the same
Nos. 169900 and 169977, 2010) proceeding for legal separation (Art. 65).
If there is no separate property, the net Effects of Reconciliation

remainder is the profit and therefore the a. The legal separation proceedings, if still
remainder (which includes the profit) pending, shall thereby be terminated at
pertaining to the share of the guilty spouse whatever stage (Art. 66)
is his/her entire share which must be b. The final decree of legal separation shall be
forfeited (Quiao v. Quiao, 2012) set aside (Art. 66)
c. The separation of property and any
e. Custody of minor children to innocent forfeiture of the share of the guilty spouse
spouse (subject to Art. 213: parental already effected shall subsist, unless the
authority shall be exercised by parent spouses agree to revive their former
designated by the court) property regime (Art. 66)
d. Joint custody of the children is restored
The imposed custodial regime under the e. The right to intestate succession by the
second paragraph of Article 213 is limited guilty spouse from the innocent spouse is
in duration, lasting only until the child’s restored
seventh year. From the eighth year until f. The right to testamentary succession
the child’s emancipation, the law gives depends on the will of the innocent spouse
the separated parents freedom, subject
to the usual contractual limitations, to Effect of Death of Parties (Sec. 21, Rule on Legal
agree on custody regimes they see fit to Separation, A.M. No. 02-11-11-SC)
adopt (Dacasin v. Dacasin, G.R. In case a party dies at any stage of proceedings
No. 168785, 2010). before the entry of judgment, the court shall order the
case closed and terminated without prejudice to the
f. Guilty spouse is disqualified from intestate settlement of estate proper proceedings in the
succession and provisions made by regular courts.
innocent spouse in his favor in a will shall be
revoked by operation of law If the party dies after the entry of judgment, the same
shall be binding upon the parties and their
Effects Upon Finality of the Decree (Art. 64) successors in interest in the settlement of the estate
a. Innocent spouse may revoke the in the regular courts.
donation made by him or her in favor of
the offending spouse. The revocation of H. Property Relations Between Husband
the donations shall be recorded in the And Wife
registries of property in the places where
the properties are located. However, What Governs Property Relations Between
alienations, liens and encumbrances Spouses (Art. 74)
registered in good faith before the a. Marriage Settlement – future spouses may
recording of the complaint for revocation agree upon the regime of ACP, CPG,
in the registries of property shall be complete separation of property, or any
respected.
other regime
b. Innocent spouse may revoke designation
b. Family Code – if there is no marriage
of guilty spouse as beneficiary in the
settlement or when the regime agreed upon
insurance policy even if such designation
be stipulated as irrevocable. The therein is void, the system of ACP shall
revocation of or change in the govern
ATENEO CENTRAL
c. Local customs
GENERAL RULE: Property Relations are governed RIGHTS AND OBLIGATIONS BETWEEEN
by Philippine laws (Art. 80) HUSBAND AND WIFE
EXCEPTIONS: Obligations of Husband and Wife (L2H2DS) (Art.

1. When there is a contrary stipulation in the 68-71)
marriage settlement a. Live together
2. When both are aliens, even if married in the b. Observe mutual Love, respect and fidelity
PH c. Render mutual Help and support
3. As to extrinsic validity of contracts affecting d. Management of the Household
property not situated in the Philippines (Art. e. Fix the family Domicile
80). f. Joint responsibility for the Support of the
family
MARRIAGE SETTLEMENTS
Fixing the Family Domicile (Art. 69)
GENERAL RULE: The husband and wife shall fix the
Requisites of a Valid Marriage Settlement: (WSB-
family domicile
TCR)
1. In Writing; EXCEPTION: In case of disagreement, the court
2. Signed by the parties; shall decide.
3. Executed Before the celebration of marriage
4. To fix the Terms and conditions of their NOTE: The Court may exempt one spouse from
property relations; living with the other if the latter should live abroad or
5. If the party executing the settlement is under there are other valid and compelling reasons, unless
Civil interdiction or any other disability, the it is not compatible with the solidarity of the family.
guardian appointed by the court must be
made a party to the settlement (Art. 79); and Sources for Support and Management of
6. Registration (merely to bind 3rd persons) Household (Art. 70-71):
a. From the community property
Requisites for a Valid Modification of Marriage b. In the absence thereof, from the income or
Settlement: fruits of the separate properties
1. In writing c. In case of insufficiency or absence thereof,
2. Signed by the parties from their separate properties
3. Executed before the celebration of the
marriage, unless: Right to Bring an Action in Court (Art. 72)
a. there is a revival of property regime When one of the spouses neglects his or her duties
in case of reconciliation in legal
to the conjugal union or commits acts which tend to
separation proceedings (Art. 66-
bring danger, dishonor, or injury to the other or to the
67)
family, the aggrieved party may apply to the court for
b. there is sufficient cause for judicial
relief.
separation of property under Art.
135
Profession (Art. 73)
c. spouses file for voluntary
GENERAL RULE: Either spouse may exercise any
dissolution of property regime
legitimate profession, business, or activity without
under Art. 136
the consent of the other.
4. Registration: To bind third persons
EXCEPTION: The other spouse may object on valid,
serious, and moral grounds. In case of
Effectivity of a Marriage Settlement in disagreement, the court shall decide whether:
Consideration of Future Marriage 1. The objection is proper, and
Everything stipulated in the settlements or contracts 2. Benefit has accrued to the family before or
referred to in the preceding articles in consideration after the objection.
of a future marriage, including donation made
between prospective spouses, shall be void if the If benefit accrued to the family before the objection,
marriage does not take place. Stipulations not the resulting obligation shall be enforced against the
dependent on the celebration of the marriage shall community property.
be valid (Art. 81).
If benefit accrued to the family after the objection has
been made, the resulting obligation shall be enforced

ATENEO CENTRAL
against the separate property of the spouse who has

not obtained consent (R.A. 10572, 2013)
NOTE: This is without prejudice to the rights of
creditors who acted in good faith. Donation Proper Nuptias V. Ordinary Donations
DONATION
1. Donations Propter Nuptias ORDINARY
PROPTER
DONATIONS
NUPTIAS
Requisites: (BCF) (Art. 82) Governed by the
1. Made Before celebration of marriage; rules on ordinary
2. In Consideration of marriage; and Governed by
donations except
3. In Favor of one or both future spouses rules on
Formalities if future property,
donations (Arts.
it must conform
GENERAL RULE: Future spouses cannot donate to 725-773 NCC)
with formalities of
each other more than 1/5 of their present property. wills
Any excess shall be considered void. (Art. 84) No person may
give or receive,
EXCEPTION: If they are governed by ACP (because May be donated by way of
they own everything in common). Present but up to 1/5 of donation, more
Property donor’s present than he may
REMEMBER: 1/5 limitation only applies if the future property give or receive
spouses agree upon a regime other than the ACP. by will. (Art.
(Art. 84) 752)
May be included
Grounds to Revoke Donation Propter Nuptias: Future provided Cannot be
(CARNIVAL) (Art. 86) Property donation is mortis included
a. Marriage without the needed parental causa
Consent Grounds Arts. 752, 760,
Art. 86 of Family
b. Marriage is Annulled and donee is in bad for 764, 765 of
Code
faith revocation NCC
c. If it is with a Resolutory condition and the
condition is complied with Prescriptive Periods for Filing Action for
d. Marriage is Not celebrated Revocation of Donation Propter Nuptias
e. Donee commits acts of Ingratitude such as: PRESCRIPTIVE PERIODS FOR FILING ACTION
● Commits an offense against the FOR REVOCATION OF DONATION PROPTER
person, honor or property of the donor, NUPTIAS
his wife, or children under his parental If marriage is not
authority celebrated
5 years (Art. 1149 NCC)
● Imputes to the donor any criminal (Except: donations in
from the time marriage is
marriage settlements
offense or any act involving moral not solemnized on the fixed
automatically void if
turpitude, unless the crime was date
marriage not
committed against the donee himself,
celebrated)
his wife, or children under his authority
By operation of law if
● Unduly refuses to support the donor If marriage is
donee-spouse contracted
when he is legally or morally bound to judicially declared
subsequent void marriage
give such support void (Note: deleted
in bad faith, and if not, 5
f. Marriage is judicially declared Void Ab initio items – no distinction
years from finality of judicial
g. In Legal separation and donee is the guilty made by law)
declaration of nullity
spouse When marriage
takes place without 5 years from celebration of
NOTE: In case of donations included in the marriage the required marriage
settlement, when the marriage thereafter is not parental consent
celebrated or is judicially declared void ab marriage If resolutory
shall be void, while those not dependent shall 5 years from happening of
condition is
remain valid. condition
complied with
If donee commits an 1 year from donor’s
act of ingratitude knowledge of that fact

ATENEO CENTRAL
5 years from the time the Property acquired during the marriage, whether
In case of legal acquisition appears to have been made in the name
decree of separation has
separation of one or both spouses, is PRESUMED to belong to
become final
the community (Art. 93).
2. Void Donations by the Spouses The original property regimes subsisting under the
New Civil Code when the Family Code took effect
are immutable and remain effective.
Donations during the marriage
Every donation or grant of gratuitous advantage, Art. 256 provides that the Family Code shall have
direct or indirect, between the spouses during the retroactive effect insofar as it does not prejudice or
marriage shall be void, except moderate gifts which impair the vested or acquired rights in accordance
the spouses may give to each other on the occasion with the Civil Code or other laws.
of any family rejoicing. (Art. 87)
GENERAL : The community property consists of all
Reason for Prohibition the property owned by the spouses before, at the
Article 87 refers to donations inter vivos. It is time of, or after the celebration of the marriage (Art.
intended to avoid possible transfer of property from 91).
one spouse to the other due to passion or avarice.
The intimate relation of the spouses places the EXCEPTIONS/EXCLUSIONS FROM COMMUNITY
weaker spouse under the will of the stronger spouse PROPERTY (Art. 92):
so that the former might be obliged to transfer some a. Those indicated in the marriage settlement
properties to the later. It seeks to prevent such (Art. 91)
exploitation which might have been contracted due b. Property acquired during the marriage by
to greed. (Perez, Jr. v. Perez-Senerpida, G.R. No. gratuitous title plus its fruits and income,
233365, 2021)
except when the donor, testator, or grantor
expressly provides otherwise
Common Law Relationship
c. Property for personal and exclusive use,
The prohibition shall also apply to persons living
together as husband & wife without a valid marriage. except jewelry
(Art. 87) d. Property acquired before the marriage by
either spouse who has legitimate
The prohibition against donations between spouses descendants by a former marriage and its
now applies to donations between persons living fruits and income
together as husband and wife without a valid
marriage,for otherwise, the condition of those who Presumption of Community Property: (Art. 93)
incurred guilt would turn out to be better than those Property acquired during the marriage is presumed
in legal union. (Agpay v. Palang, G.R. No. 116668, to belong to the community, unless it is proved that
1997) it is one of those excluded therefrom.
3. Absolute Community of Property Charges Upon and Obligations of the ACP (Art.
94)
Absolute Community of property a. Support of spouses, their common children
The property regime of spouses in the absence of a and legitimate children of either spouse
marriage settlement or when the regime agreed b. Debts and obligations contracted during the
upon is void (Art. 75) marriage:
● By a designated administrator-
NOTE: It shall commence at the precise moment
spouse for the benefit of the
that the marriage is celebrated. Any stipulation,
community
express or implied, for the commencement of the
regime at any other time, shall be VOID (Art. 88). ● By both spouses
● By one with the consent of the other
No waiver of rights, interests, shares and effects of ● By either spouse without the
the ACP during the marriage, except in case of consent of the other to the extent
judicial separation of property. The waiver must be that it benefited the family
in a public instrument. Creditors of the spouse who c. Taxes, liens, charges and expenses
made such waiver may petition the court to rescind including major or minor repairs upon
the waiver to the extent that is sufficient to cover the community property
amount of the credit (Art. 89). d. Taxes and expenses for mere preservation
made during the marriage upon the
separate property of either spouse used by
ATENEO CENTRAL
the family GENERAL RULE: The administration and

e. Expenses for professional or vocational enjoyment of the conjugal partnership shall belong to
course both spouses jointly
f. Ante-nuptial debts which redounded to the
benefit of the family EXCEPTIONS:
g. Donated or promised to common legitimate a. In case of disagreement, the husband’s
children for profession, vocational course or decision shall prevail subject to recourse by
self-improvement
the wife in court to be availed within 5 years
h. Other ante-nuptial debts, support of
illegitimate child, and liabilities for crime or from the date of the contract implementing
quasi-delicts in the absence of separate the husband’s decision
property are chargeable against the b. In case of incapacity of one spouse or
separate properties of the spouses but may inability to administer the common
be advanced by the ACP in case of absence properties, the other spouse may assume
or insufficiency of the exclusive property of sole powers of administration, except
the debtor-spouse powers of disposition and encumbrance
i. Expenses of litigation between spouses which requires authority from the court or
unless the suit is found to be groundless
written consent of the other spouse
NOTE: If the community property is insufficient to
cover all these liabilities (except those falling under In the absence of such authority or consent,
cases of absence or insufficiency of the exclusive the disposition or encumbrance shall be
property of the debtor-spouse), the spouses shall void. However, the transaction shall be
be solidarily liable for the unpaid balance with construed as a continuing offer on the part
their separate properties. of the consenting spouse and the third
person, and may be perfected as a binding
A loan used for the family business is one which contract upon the acceptance by the other
redounds to the benefit of the family, even if the spouse or authorization of the court before
business fails. (ROS v. Phil National Bank, GR No. the offer is withdrawn by either or both
170166, 2011) offerors.
Under the Family Code, one spouse cannot sell Donation of Community Property
property which is part of the community GENERAL RULE: Neither spouse may donate any
properties without the written consent of the
community property without the consent of the other
other spouse or the authority of the court.
Without such consent or authority, the entire sale is
void. While the law does not require a person EXCEPTION: Moderate donations for charity or on
dealing with registered land to inquire further than occasions of family rejoicing or family distress
what the Torrens Title on its face indicates, the rule
is not absolute. If there are other surrounding Dissolution of the ACP (Art. 99)
circumstances relevant to the sale which show that a. Upon death of either spouse
the purchaser should have taken the necessary b. Decree of legal separation
precaution required of a prudent buyer, the c. Marriage is annulled or nullified
purchaser cannot be considered in good faith. d. Judicial separation of property during the
(Nobleza v. Nuega G.R. No. 193038, 2015) marriage (Arts. 134-138)
In order to be considered a buyer in good faith, the
Liquidation of the ACP (Art. 102)
following must be shown: (a) the diligence in
verifying the validity of the title covering the property; a. Inventory of all properties
and (b) the diligence in inquiring into the authority of ● Inventory of community property
the transacting spouse to sell conjugal property in ● Inventory of separate property of the
behalf of the other spouse. Mere reliance on the wife
SPA given by the selling spouse without further ● Inventory of separate property of the
questioning despite knowing that the lots were husband
conjugal property is insufficient. (Spouses Aggabao b. Debts and obligations of ACP are paid • In
v. Parulan, G.R. No. 165803, 2010) case of insufficiency of assets, the spouses
shall be solidarily liable for the unpaid
Administration, Enjoyment, and Disposition of balance with their separate properties.
Community Property (Art. 96) c. Remainder of the separate properties of the
spouses are returned to the owner
d. Net remainder of the ACP is divided equally
ATENEO CENTRAL
between husband and wife

● Unless a different proportion is agreed What Constitutes CPG (FOLCHIC) (Art. 117)
upon in the marriage settlement or a. Fruits of conjugal property due or received
there has been a voluntary waiver of during the marriage and net fruits of
such share separate property
e. Presumptive legitimes of children are b. Those acquired through Occupation
delivered c. Livestock in excess of what was brought to
f. Adjudication of conjugal dwelling and the marriage
custody of common children d. Those acquired by onerous title during the
● Given to the spouse to whom the marriage with Conjugal funds
majority of the common children e. Share in Hidden treasure
choose to remain f. Those obtained from labor, Industry, work or
profession of either or both spouse
Since the petitioner is the guilty party in the legal g. Those acquired by Chance
separation, his share from the net profits is forfeited
Accession – if the cost of the improvement and any
in favor of the common children. In both regimes
resulting increase in value are equal or less than the
(assuming that it was ACP), petitioner, as the guilty value of the entire property at the time of the
spouse, is not entitled to any property at all. The improvement, the entire property remains the
husband and the wife did not have any separate exclusive property of the owner-spouse (subject to
properties. Therefore, there is no separate property reimbursement of improvement cost to the CPG)
which may be accounted for in the guilty party’s
favor. (Quiao v. Quiao G.R. No. 176556, 2012) Reverse Accession – if the cost of the improvement
and any resulting increase in value are more than
4. Conjugal Partnership Of Gains the value of the entire property at the time of the
Regime improvement, the property becomes conjugal
(subject to reimbursement of the value of the
When applicable: If the spouses agree in the property of the owner-spouse)
marriage settlement to be governed by the regime
of conjugal partnership of gains Exclusive Property in CPG (Art. 109)
a. That brought into the marriage as his/her
Governing law: The marriage settlement shall own
primarily govern but the provisions of the Family b. That acquired during the marriage
Code on CPG shall apply suppletorily. The rules on gratuitously (net fruits and income are
contract of partnership shall also apply in all that is conjugal)
not in conflict with the marriage settlement and the c. That acquired by redemption, barter or
provisions of the Family Code on CPG. exchange with exclusive property
d. That purchased with exclusive money
The spouses contribute the following to a
Presumption of Conjugality (Art. 116)
common fund (Art. 106):
Property acquired during the marriage, whether
• Proceeds, products, fruits and income of acquisition appears to have been made in the
separate properties of spouses name of one or both spouses, is presumed to be
• Everything acquired by spouses through conjugal. The party who invokes the presumption
their efforts must first prove that the property was acquired
• Everything acquired by spouses through during the marriage. Otherwise, the presumption
chance of conjugality will not apply. (Tan v. Andrade, G.R.
Nos. 171904 & 172017, 2013)
It shall commence at the precise moment that the
marriage is celebrated. Any stipulation, express or Installment purchases (Art. 118)
implied, for the commencement of the regime at Property bought on installments paid partly from
any other time shall be void. exclusive funds and party from conjugal funds:
● Belongs to the buyer/s: If full
No waiver of rights allowed during the marriage ownership vested before the marriage
except in case of judicial separation of property. ● Belongs to the conjugal partnership:
The waiver must be in a public instrument. If full ownership vested during the
The fruits, natural, industrial, or civil, due or marriage In either case, any amount
received during the marriage from the common advanced by the partnership or by
property, as well as the net fruits from the exclusive either or both spouses shall be
property of each spouse are included in the reimbursed by the owner upon
conjugal partnership properties. (Art. 117[3]) liquidation.
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Administration and Enjoyment of CPG (Art. 124):

Credits in Installment (Art. 119) Same as that under ACP
Whenever an amount or credit payable within a
period of time belongs to one of the spouses: Donation of Conjugal Property (Art. 125): Same
● Belongs to the spouse: Sums as that under ACP
collected in partial payments or by
installments during the marriage Dissolution of the CPG (Art. 126): Same as that
● Belongs to the conjugal partnership: under ACP.
Interests falling due during the marriage
An extrajudicial dissolution of the conjugal
on the principal of both spouses shall
partnership without judicial approval is void. A notary
pertain to the partnership. (Art. 120)
public should not facilitate the disintegration of a
marriage and the family. In so doing, a notary public
Rules in Cases of Improvement of Exclusive may be held accountable administratively.
Property The ownership of improvements made on (Rodolfo Espinoso v. Juliet Omana, A.C. 9081,
the separate property of the spouses at the expense 2011)
of the partnership or through resulting in increase in
value are equal or less than the value of the entire Liquidation of the CPG (Art. 129)
property at the time of the improvement, the property a. Inventory of all property
becomes conjugal (subject to reimbursement of the b. Amounts advanced by CP in payment of
value of the property of the owner-spouse). personal debts and obligations of either
spouse is credited
Charges upon CPG (Art. 121) c. Reimbursement for use of exclusive funds
GENERAL RULE: Same as that under ACP d. Debts and obligations of the CP are paid
EXCEPTION: Under taxes and expenses for ● In case of insufficiency of assets, the
preservation of separate property of either spouse spouses shall be solidarily liable for the
during the marriage property need not used by the unpaid balance with their separate
family properties.
NOTE: If the conjugal partnership is insufficient, the e. Remains of exclusive properties are
spouses shall be solidarily liable for the unpaid returned
f. Indemnify loss of deterioration of movables
balance with their separate properties. The conjugal
belonging to either spouse used for the
partnership property shall likewise be liable for the benefit of the family
payment of the personal debts of either spouse g. Net remainder of conjugal property is
insofar as they have redounded to the benefit of the divided equally
family. (Art. 121) ● Unless a different proportion is agreed
upon in the marriage settlement or
Payment of criminal indemnities can be advanced by there has been a voluntary waiver or
the conjugal partnership assets even before these forfeiture of such share
are liquidated. It may be enforced against the h. Delivery of children’s presumptive legitimes
partnership assets after the responsibilities in Article
i. Adjudication of conjugal dwelling and
121 have been covered. No prior liquidation of those
assets is required. custody of children
(Pana v. Heirs of Juanite, Sr., G.R. No. 165201, ● Given to the spouse to whom the
2012) majority of the common children

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Absolute Community of Property v. Conjugal Partnership of Gains

ABSOLUTE COMMUNITY OF PROPERTY CONJUGAL PARTNERSHIP OF GAINS
COMPOSITION
1.
Fruits of conjugal property due or received
during the marriage and net fruits of separate
property
2. Those acquired through Occupation
3. Livestock in excess of what was brought to the
marriage
4. Those acquired during the marriage with
All the properties owned by the spouses at the time of conjugal funds
marriage become community property (Art. 91) 5. Share in Hidden treasure
6. Those obtained from labor, Industry, work, or
profession of either or both spouse
7. Those acquired by Chance (Art. 117)
8. The ownership of improvements made on the
separate property of the spouses at the expense
of the partnership or through efforts of both
spouses shall pertain to the partnership (Art.
120)
WHAT REMAINS AS EXCLUSIVE PROPERTY
1. Property acquired before the marriage by either 1. That brought into the marriage as his/her own
spouse who has legitimate descendants by a former 2. That acquired during the marriage gratuitously
marriage and its fruits and income 3. That acquired by redemption, barter, or
2. Property for personal and exclusive use, except exchange with exclusive property
jewelry 4. That purchased with exclusive money (Art. 109)
3. Property acquired during the marriage by gratuitous
title plus its fruits and income, except when the
donor, testator, or grantor expressly provides
otherwise (Art. 92)
PRESUMPTION
All property acquired during the marriage, whether

Property acquired during the marriage is presumed to the acquisition appears to have been made,
belong to the community, unless it is proved that it is contracted or registered in the name of one or both
one of those excluded therefrom (Art. 93) spouses, is presumed to be conjugal unless the
contrary is proved (Art. 116)
CHARGES AND OBLIGATIONS
1. Debts and obligations contracted during the 1. The support of the spouse, their common
marriage: children, and the legitimate children of either
● By either spouse without the consent of the spouse
other to the extent that it benefited the family 2. All debts and obligations contracted during the
● By designated administrator-spouse by both marriage by the designated administrator
spouses spouse for the benefit of the conjugal
● By one with the consent of the other partnership of gains, or by both spouses or by
one of them with the consent of the other
2. Taxes, liens, charges, and expenses including 3. Debts and obligations contracted by either
major or minor repairs, upon community property spouse without the consent of the other to the
3. Support of spouses, their common children, and extent that the family may have benefited
legitimate children of either spouse 4. All taxes, liens, charges, and expenses,
4. Expenses of litigation between spouses unless the including major or minor repairs upon the
suit is found to be groundless conjugal partnership property
5. Ante-nuptial debts which redounded to the benefit 5. All taxes and expenses for mere preservation
of the family made during the marriage upon the separate
6. Taxes and expenses for mere preservation made property of either spouse
during the marriage upon the separate property of 6. Expenses to enable either spouse to commence
either spouse used by the family or complete a professional, vocational, or other
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7. Expenses for professional or vocational course activity for self-improvement

8. Other ante-nuptial debts, support of illegitimate 7. Ante-nuptial debts of either spouse insofar as
child, and liabilities for crime or quasi delicts in they have redounded to the benefit of the family
absence of separate property are chargeable 8. The value of what is donated or promised by
against the separate properties of the spouses but both spouses in favor of their common legitimate
may be the advanced by the ACP in case of children for the exclusive purpose of
absence or insufficiency of the exclusive property of commencing or completing a professional or
the debtor-spouse vocational course or other activity for self-
9. Donated or promised to common legitimate children improvement
for profession, vocational course, or self- 9. Expenses of litigation between the spouses
improvement (Art. 94) unless the suit is found to be groundless (Art.
11)
LIQUIDATION
1. Inventory of all properties 1. Inventory of all property

● Inventory of community property 2. Amounts advanced by CP as payment for
● Inventory of separate property of the wife personal debts and obligations of either spouse
● Inventory of separate property of the are credited
husband 3. Reimbursement for use of exclusive funds
2. Debts and obligations of ACP are paid 4. Debts and obligations of the CP are paid
3. Remainder of the separate properties of the 5. Remains of exclusive properties are returned
spouses are returned to the owner 6. Indemnify loss of deterioration of movables
4. Net remainder of the ACP is divided equally belonging to either spouse used for the benefit
between husband and wife of the family
5. Presumptive legitimes of children are delivered 7. Net remainder of conjugal property is divided
6. Adjudication of conjugal dwelling and custody of equally
common children (Art. 102) 8. Delivery of children’s presumptive legitimes
9. Adjudication of conjugal dwelling and custody of
children (Art. 129)
profession, business or industry

5. Separation of Property Regime c. Own all fruits, natural, industrial or civil, due
or received during the marriage from his or
GENERAL RULE: Separation of property between her
spouses during the marriage is only applicable if
there is an express declaration in the marriage Both spouses shall bear the family expenses in
settlement. proportion to their income, or, in case of
insufficiency or default thereof, to the current
EXCEPTION: Separation of property by judicial market value of their separate properties. The
order. Such judicial separation of property may liability of the spouses to creditors for family
either be voluntary or for sufficient cause. (Art. 134) expenses shall be solidary. (Art. 146)
When applicable: If expressly provided under the Grounds for Transfer of Administration of
marriage settlement (Art. 134) Exclusive Property of Either Spouse (GACA) (Art.
142)
Properties Included a. One spouse becomes Guardian of the
The parties may agree on the extent of their other
separation of property regime. It may involve present b. One spouse is judicially declared
or future property or both. It may be total or partial. Absent
If it is partial, the property not agreed upon as c. One spouse is sentenced to penalty
separate shall pertain to the absolute community with Civil interdiction
(Art. 144) d. One spouse becomes a fugitive from
justice or is hiding as an Accused in a
Rights and Liabilities of the Spouses criminal case
Each spouse shall:
a. Own, dispose of, possess, administer and If the other spouse is not qualified by reason of
enjoy his or her own separate estate, incompetence, conflict of interest, or any other just
without need of the consent of the other cause, the court shall appoint a suitable person to be
the administrator.
b. Own all earnings from his or her own

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6. Property Regime Of Unions Without Marriage
Property Regime of Unions without Marriage

ARTICLE 147 ARTICLE 148
A. To a man and woman who are:
A. To a man and woman who are: 1. Not capacitated to marry each other
(under 18 years old)
1.Capacitated to marry each other: 2. Live exclusively with each other as
a. At least 18 years old husband and wife
b. Not falling under Article 37 3. Without the benefit of marriage
(incestuous void marriage)
c. Not falling under Art. 38 B. Adulterous relationship (e.g.
(void marriage by reason concubinage)
Applicability of public policy)
d. Not bigamous C. Bigamous or polygamous marriage (Art.
35[4])
2. Live exclusively with each other
as husband and wife D. Incestuous marriages under Art. 37
3. Without the benefit of marriage E. Void marriages by reason of public

policy under Art. 38
B. Other void marriages/live-in
NOTE:: If capacitated, but relationship is NOT
exclusive, it will fall under this provision
Exclusively owned, but If one of the parties is
Salaries and validly married to another, it shall accrue to the
Owned by parties in equal shares
Wages absolute community or conjugal partnership
existing in such valid marriage.
Properties
Remains exclusive provided that there
acquired
is proof that it was acquired by Remains exclusive
through
exclusive funds
exclusive funds
Only the properties acquired by both parties
through their actual joint contribution of money,
property, or industry shall be owned by them in
common in proportion to their respective
Presumed to have been obtained by contributions. (Art. 148)
their joint efforts, work or industry and
shall be owned by them in equal Without proof of actual contribution by both
shares parties, there can be no presumption of co-
Property
ownership and equal sharing. (Villanueva v. CA,
acquired while If a party did not participate in the G.R. No. 143286)
living together acquisition—shall be deemed to have
contributed jointly if efforts consisted Once proof of actual contribution is shown, their
in the care and maintenance of the contributions and corresponding shares are
family and the household presumed to be equal, in the absence of proof to
the contrary. The same rule and presumption
shall apply to joint deposits of money and
evidences of credit. (Art. 148)
Neither party can encumber or

dispose by acts inter vivos of his/her
Encumbrance share in the property acquired during
or Disposal of cohabitation and owned in common, -
his/her share without the consent of the other, until
after the termination of their
cohabitation

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When only one of the parties to a void

marriage is in good faith, the share of
the party in bad faith in the co-
ownership shall be forfeited in favor of
If one of the parties is validly married to another,
their common children, descendants,
his or her share in the co-ownership shall accrue
or innocent party.
to the absolute community or conjugal
● In case of default of or waiver
partnership existing in such valid marriage.
by any or all of the common
children or their descendants,
If the party who acted in bad faith is not validly
each vacant share shall
Forfeiture married to another, his or her share shall be
belong to the respective
forfeited in favor of their common children,
surviving descendants.
descendants, or innocent party. The share shall
● In the absence of
be forfeited in the same manner as in Art. 147.
descendants, such share
shall belong to the innocent
Rules on forfeiture of shares will apply even if
party.
both are in bad faith.
In all cases, the forfeiture shall take
place upon termination of the
cohabitation

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The registration of a property in the name of the

paramour who had no income whatsoever at the Voluntary separation (Art. 136)
time of the donation by another’s husband is The spouses may jointly file a verified petition with
tantamount to a donation which is void under Article the court.
87 of the Family Code. The paramour then holds
the property under a constructive trust under Article All creditors of the absolute community or of the
1456 in favor of the conjugal partnership of the conjugal partnership of gains, as well as the
husband with the legitimate spouse. (Joaquino v. personal creditors of the spouse, shall be listed in
Reyes, G.R. No. 154645, 2004) the petition and notified of the filing thereof. The
court shall take measures to protect the creditors
Under Art. 147, property acquired by both spouses and other persons with pecuniary interest.
through their work and industry shall be governed
by the rules on equal co-ownership. Any property Sufficient cause for judicial separation (Art.
acquired during the union is prima facie presumed 135):
to have been obtained through their joint efforts.
a. That the spouse of the petitioner has been
Here, the former spouses both agreed that they
acquired the subject property during the sentenced to a penalty which carries with it
subsistence of their marriage. Thus, it shall be civil interdiction
presumed to have been obtained by their joint b. That the spouse of the petitioner has been
efforts, work or industry, and shall be jointly owned judicially declared an absentee
by them in equal shares. (Barrido v. Nonato, 2014) c. That loss of parental authority of the spouse
of petitioner has been decreed by the court
Under Article 148, there must be proof of actual d. That the spouse of the petitioner has
joint contribution by both the live-in partners before abandoned the latter or failed to comply
the property becomes co-owned by them in with his or her obligations to the family as
proportion to their contribution. Otherwise, there are
provided for in Article 101
no presumptions of co-ownership and equal
sharing. (Villanueva v. CA, G.R. No. 143286, 2004, e. That the spouse granted the power of
reiterated in Ventura v. Sps. Paulino, G.R. No. administration in the marriage settlements
202932, 2013) has abused that power
f. That at the time of the petition, the spouses
No co-ownership exists between parties to an have been separated in fact for at least one
adulterous relationship. In such a relationship, it is year and reconciliation is highly improbable
necessary for each of the partners to prove his or
her actual contribution to the acquisition of property NOTE: In the cases provided for in letters (a), (b)
in order to lay claim to any portion of it. and (c), the presentation of the final judgment
Presumptions of co-ownership and equal against the guilty or absent spouse shall be enough
contribution do not apply. (Rivera v. Heirs of basis for the grant of the decree of judicial
Villanueva, G.R. No. 141501, 2006) separation of property.
Art. 148 of the Family Code provides that only the
property acquired by both of the parties through I. The Family
their actual joint contribution of money, property, or
industry shall be owned in common and in 1. General Principles
proportion to their respective contributions. Such
contributions and corresponding shares were prima Concept of Family (Art. 149)
facie presumed to be equal. However, for this The foundation of the nation and the basic social
presumption to arise, proof of actual contribution
institution which public policy cherishes and
was required. Petitioner failed to prove that she
made an actual contribution to purchase the protects.
condominium unit. (Soledad L. Lavadia v. Heirs of
Juan Luces Luna G.R. No. 171914 2015) Family Relations
a. Between husband and wife
b. Between parents and children
7. Judicial Separation Of Property
c. Among other ascendants and
descendants
When applicable: In case of a judicial order, which
d. Among brothers and sisters, full or half
may either be voluntary or for sufficient cause. blood. (Art. 150)
(Art. 134)
Governed by: Family relations are governed by law
and no custom, practice or agreement destructive of

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the family shall be recognized or given effect. (Art.

149) Family Home (Art. 152)
A. Effects On Legal Disputes The dwelling house where they (husband and wife
or an unmarried head of the family) and their family
Suit Between Family Members (Art. 151) reside, and the land on which it is situated.
GENERAL RULE: No suit between members of the Constitution of a Family House (FH):
same family shall prosper unless it should appear a. Jointly by the husband and wife or by an
from the verified complaint or petition that earnest unmarried head of a family
efforts toward a compromise have been made, but b. From the time it is occupied as a family
that the same have failed. If it is shown that no such residence so long as any of its beneficiaries
efforts were in fact made, the same case must be actually reside therein (Art. 153)
dismissed.
Other Rules:
EXCEPTION: These rules shall not apply to cases a. FH must be owned by person
which may not be the subject of compromise under
constituting it
the Civil Code.
b. FH must be permanent
Allegation of “earnest efforts” is jurisdictional: if it c. FH continues despite death of one or
is absent, the court can dismiss the case. more spouses or unmarried head of
BUT this rule is inapplicable in the following cases: the family for 10 years or as long as
(CLV FJF) there is a minor beneficiary (Art. 159)
d. Only one FH can be constituted
a. Civil status of persons Beneficiaries of a Family Home
b. Any ground for Legal separation a. Husband and wife, or unmarried head of
c. Validity of marriage or legal separation the family
d. Future support b. Parents (may include parent-in-laws)
e. Jurisdiction of courts c. Ascendants
f. Future legitime (Art. 2035, Civil Code) d. Descendants
e. Brothers and sisters
Spouses Jointly Sued (legitimate/illegitimate) living in the
The husband and wife shall sue or be sued jointly family home and dependent on head of
except as provided by law. (Section 4, Rule 3 of the family for support. (Art. 154)
1997 Rules of Civil Procedure)
Qualified Property
The term “jointly” means that the spouses shall be Actual value of the family home shall not exceed, at
sued together and it does not refer to the nature of the time of its constitution, P300,000 in urban areas
the civil liability. This is so because when the and P200,000 in rural areas. (Art.157)
spouses are sued for the enforcement of an
obligation entered into by them or of an obligation
Rules regarding Subsequent Improvements of
which redounded to the benefit of the family, they
are being impleaded in their capacity as Family Home
representatives of the absolute community or the Any subsequent improvement of the family home by
conjugal partnership and not as independent the persons constituting it, its owners, or any of its
debtors such that the concept of joint or solidary beneficiaries will still be exempt from execution,
liability, as between them, does not arise (Alipio v. forced sale or attachment provided the following
CA, G.R. No. 134100) conditions obtain:
1. The actual value of the property at the time
The necessity of being jointly sued is also because of its constitution does not exceed Php
generally the spouses are joint administrators of 300,000 in urban areas and Php 200,000 in
either the absolute community property or the rural areas under Art. 157; and
conjugal partnership of gains. However, if what is 2. The improvement does not result in an
involved in the litigation is his or her separate and increase in its value exceeding the
exclusive property, the spouse may appear alone in statutory limit.
court (Art. 111).
Otherwise, the family home can be the subject of a
forced sale, and any amount above the statutory
J. The Family Home
limit is applicable to the obligations under Art. 160.
To warrant the execution sale of a family home
under Art. 160, the following facts should be

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established: 1. He must be a judgment creditor;

2. His claim is not among those excepted
1. There was an increase in its actual value; under Art. 155; and
2. The increase resulted from voluntary 3. He has reasonable grounds to believe that
improvements on the property introduced the family home is worth more than the
by the persons constituting the family maximum amount fixed in (Art. 157)
home, its owners or any of its beneficiaries;
and Procedure:
3. The increased actual value exceeded the a. Creditor must file a motion in the court
maximum allowable under Art. 157. proceeding where he seeks to obtain a writ
(Eulogio v. Bell, G.R. No. 186322, 2015) of execution against the FH.
b. Hearing on the motion where the creditor
Exempt from Execution (Art. 153) must prove that the actual value of the FH
GENERAL RULE: The FH is exempted from: exceeds the maximum amount fixed by the
a. Execution Family Code, either at the time of its
b. Forced sale constitution or as a result of improvements
● The right to exemption from forced sale introduced thereafter.
is a personal privilege granted to the c. If creditor proves that the actual value
judgment debtor which must be exceeds the maximum amount, the court
asserted before the public auction. will order its sale in execution.
Failure to do so would estop the party d. If FH is sold for more than the value
from later claiming on the exemption. It allowed, the proceeds shall be applied as
is a right that can be waived or be follows:
barred by laches by failure to set up ● First, the obligations enumerated in
and prove the status of the property as Art. 155 must be paid (listed above)
a family home at the time of levy. (De ● Then the judgment in favor of the
Mesa v. Acero, G.R. No. 185064, creditor will be paid, plus all the costs
2012) of execution
c. Attachment ● The excess, if any, shall be delivered
to the judgment debtor.
EXCEPTION: (Art. 155)
a. Non-payment of taxes K. Paternity And Filiation
b. Debts incurred prior to constitution of home
c. Debts secured by mortgages on the 1. Concepts Of Paternity, Filiation,
premises And Legitimacy
d. Debts due laborers, mechanics, architects,
builders, materialmen, and others who Paternity, Filiation, and Legitimacy
have rendered service or furnished Defines the relationship which exists between
materials for the construction of the parents and children.
building
Paternity
NOTE: The exemption is limited to the value Determines whether one is the father of the child or
allowed by the Family Code. not.
Sale, Alienation, Donation, Assignment, or Filiation

Encumbrance of the Family Home (Art. 158) Determines whether one is a legitimate or
a. The person who constituted the same must illegitimate child. The filiation of children may be by
give his/her written consent. nature or by adoption. Natural filiation may be
legitimate or illegitimate (Art. 163)
b. The spouse of the person who constituted
the family home must also give his/her
Legitimacy
written consent. The legitimacy or illegitimacy of a child is
c. A majority of the beneficiaries of legal age determined by law and cannot be left to will of the
must also give their written consent. parties.
d. In case of conflict, the court shall decide.
2. Legitimate Children
Requisites for Creditor to Avail of The Right to
Execute (Art. 160): a. Who are Legitimate Children

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GENERAL RULE: Filiation of legitimate children is

Legitimate Children established by any of the following (Art. 172, par. 1):
Those conceived or born during a valid marriage. a. The record of birth appearing in the civil
(Art. 164). register or a final judgment
This also includes children who are: A certificate of live birth purportedly
a. Conceived as a result of artificial identifying the putative father is not
insemination competent evidence of paternity when
b. Conceived or born of a voidable marriage there is no showing that the putative father
before decree of annulment; had a hand in the preparation of said
c. Conceived or born before judgment of certificate. The local civil registrar has no
absolute nullity under Art. 36 (psychological
authority to record the paternity of an
incapacity) becomes final and executory;
illegitimate child on the information of a
d. Conceived or born of a subsequent
third person. (Cabatania v. CA, G.R. No.
marriage under Art. 53 (failure to record the
judgment, partition and distribution of 124814, 2004)
properties, and delivery of children’s
presumptive legitime); It is well settled that a record of birth is
e. Legally adopted; and merely a prima facie evidence of the facts
f. Legitimated, conceived and born outside of contained therein. It is not conclusive
wedlock of parents without impediment at evidence of the truthfulness of the
the time of conception and who statements made by the interested parties.
subsequently married (Benitez Badua v. CA, G.R. No. 105625,
1994)
A child born inside a valid marriage is legitimate.
Hence a child born inside a bigamous marriage, b. An admission of legitimate or illegitimate
which is void, is considered a child under the first filiation in a public document or a private
marriage, which has not been nullified or annulled, handwritten instrument and signed by the
unless the husband timely impugns the legitimacy parent concerned.
of the child.
EXCEPTION: In the absence of these pieces of
An agreement by parties as to the status of a child
evidence, the legitimate filiation may be proved
is void. Only the law determines legitimacy or
illegitimacy. Thus, the child, in the eyes of the law, by (Art. 172, Par. 2):
is legitimate under the first marriage notwithstanding a. Open and continuous possession of the
the admission in pleadings by the wife and her status of a legitimate child
second husband that the child is their legitimate
son. Similarly, any declaration of the mother that her “Continuous” does not mean that the
child is illegitimate has no probative value. possession of status shall continue forever
(Concepcion v. CA, G.R. No. 123450, 2005) but only that it shall not be of an intermittent
character while it continues. The
Requisites for Children by Artificial possession of such status means that the
Insemination to be Considered Legitimate father has treated the child as his own,
1. The artificial insemination must be made on directly and not through others,
the wife
spontaneously and without concealment
2. Either the sperm of the husband or a third
party donor may be used though without publicity. (Mendoza v. CA,
3. The artificial insemination has been G.R. No. 86302, 1991)
authorized or ratified by both spouses on a
written instrument executed and signed by There must be evidence of the
them before the birth of the child manifestation of the permanent intention of
4. The written instrument is recorded in civil the supposed father to consider the child
registry together with the birth certificate of
as his, by continuous and clear
the child (Art. 164, par. 2)
manifestations of parental affection and
b. Proof of Filiation of Legitimate care, which cannot be attributed to pure
Children charity. Such acts must be of such a nature
that they reveal not only the conviction of
paternity, but also the apparent desire to

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have and treat the child as such in all Grounds to Impugn the Legitimacy of the Child
relations in society and in life, not (Exclusive List) (PBA) (Art. 166)
accidentally, but continuously. (Jison v. CA, a. It was Physically impossible for the
G.R. No. 124853, 1998) husband to have sexual intercourse with
his wife within the first 120 days of the 300
days which immediately preceded the birth
b. Any other means allowed by the Rules of of the child because of:
Court and special laws i. Physical incapacity of the husband to
The father’s SSS Form E-1 satisfies the have sexual intercourse with his wife
requirement for proof of filiation and relationship of ii. Fact that the husband and wife were
petitioner to the Aguilar spouses under Article 172 living separately in such a way that
of the Family Code. Filiation may be proved by an sexual intercourse was not possible, or
admission of legitimate filiation in a public document iii. Serious illness of the husband which
or a private handwritten instrument and signed by absolutely prevented intercourse
the parent concerned, and such due recognition in b. If it’s proved that for Biological or other
any authentic writing is, in itself, a consummated scientific reasons, the child could not have
act of acknowledgment of the child, and no further been that of the husband, except in the
court action is required. (Aguilar v. Siasat, G.R. case of children conceived through
200169, 2015) artificial insemination
c. In case of children conceived through
A thumb mark has been repeatedly considered a Artificial insemination, when the written
valid mode of signature. Thus, the document authorization or ratification of either parent
executed by the putative father evidencing his was obtained through mistake, fraud,
voluntary recognition of filiation is valid. (San violence, intimidation, or undue influence.
Agustin v. Sales, G.R. No. 189289, 2016) (NOTE: This assumes that there was
written authorization)
Rules in Filing an Action (Art. 173 in relation to Art.
175): Who may impugn the Legitimacy of a Child
GENERAL RULE: Only the child can bring an action GENERAL RULE: Only the husband can impugn
to claim legitimacy. It must be filed during his or her the legitimacy of a child
lifetime.
EXCEPTIONS: The heirs of the husband may
EXCEPTION: The right may be transmitted to the impugn the child’s filiation in the following cases:
heirs of the child in the following cases: (Art. 171)
a. Death during minority; a. If the husband dies before the expiration of
b. Insanity; or period for filing the action
c. When the action has already been b. If the husband dies after filing without
instituted by the child desisting
c. If the child was born after the death of the
NOTE: Under a & b, the heirs shall have a period of husband
5 years within which to institute the action.
Periods for Filing of Action to Impugn
c. Rights of Legitimate Children Legitimacy
a. If the husband (or his heirs, in proper cases)
Rights of Legitimate Children resides in the same city or municipality where
Greatest and preferential sum of rights is given to the birth took place or was recorded: within 1
the legitimate child: year
1. To bear the surname of the father and the b. If the husband (or his heirs) does not reside
mother in the city or municipality where the child’s
2. To receive support from their parents, their birth took place or was recorded but his
ascendants, and in proper cases, their residence is in the Philippines: within 2
brothers and sisters years.
3. To be entitled to the legitime and other c. If the child’s birth took place or was recorded
successional rights (Art. 147) in the Philippines while the husband has his
residence abroad, or vice-versa: within 3
years. (Art. 170)
d. Grounds to Impugn Legitimacy
NOTE: The period shall be counted from the
knowledge of the child’s birth OR its recording in the

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civil register. However, if the child’s birth was b. Conceived and born of voidable marriages
concealed from or was unknown to the husband or after the decree of annulment
his heirs, the period shall be counted from the c. Conceived and born out of wedlock
discovery or knowledge of the birth of the child or of
the fact of registration of said birth, whichever is
earlier. b. Proof of Filiation of Illegitimate
Children
Presumption on the Status of a Child in Case of Illegitimate children may establish their illegitimate
filiation in the same way and on the same evidence
Successive (Valid) Marriages (Art. 168)
as legitimate children. (Art. 175)
In the absence of proof to the contrary:
a. Presumed to have been conceived during GENERAL RULE: Filiation of illegitimate children is
the first marriage: If the child was born established by any of the following (Art. 172, par. 1):
before 180 days after celebration of 2nd a. The record of birth appearing in the civil
marriage provided it be born within 300 register or a final judgment
days after the termination of the 1st
marriage. A certificate of live birth purportedly
b. Presumed to have been conceived during identifying the putative father is not
the second marriage: If the child was born competent evidence of paternity when
there is no showing that the putative father
after 180 days following the celebration of
had a hand in the preparation of said
the 2nd marriage, even though it be born
certificate. The local civil registrar has no
within 300 days after termination of 1st authority to record the paternity of an
marriage. illegitimate child on the information of a
c. No presumption: If the child was born after third person. (Cabatania v. CA, G.R. No.
300 days following the termination of the 124814, 2004)
first marriage. In such a case, the
legitimacy or illegitimacy of the child It is well settled that a record of birth is
shall be proved by whoever alleges merely a prima facie evidence of the facts
such. (Art. 169) contained therein. It is not conclusive
evidence of the truthfulness of the
statements made by the interested parties.
(Benitez Badua v. CA, G.R. No. 105625,
1994)
b. An admission of illegitimate filiation in a

public document or a private handwritten
instrument and signed by the parent
concerned.
EXCEPTION: In the absence of these pieces of

evidence, the illegitimate filiation may be proved
by (Art. 172, Par. 2):
3. Illegitimate Children
a. Open and continuous possession of the
status of a illegitimate child
a. Who are Illegitimate Children
NOTE: “Continuous” does not mean that
Illegitimate Children the possession of status shall continue
Those conceived AND born outside a valid marriage forever but only that it shall not be of an
(Art. 165). intermittent character while it continues.
The possession of such status means that
These include those who are:
a. Born of marriages which are void ab initio the father has treated the child as his own,
such as bigamous and incestuous directly and not through others,
marriages and void marriages by reason of spontaneously and without concealment
public policy though without publicity. (Mendoza v. CA,

ATENEO CENTRAL
G.R. No. 86302, 1991)

EXCEPTION: If the action is based on Art. 172, par.
There must be evidence of the 2, in which case the action may be brought
manifestation of the permanent intention of during the lifetime of the alleged parent. (Ara v.
the supposed father to consider the child Pizzaro, G.R. No. 1872773).
as his, by continuous and clear
manifestations of parental affection and NOTE: Under a & b, the heirs shall have a period of
5 years within which to institute the action.
care, which cannot be attributed to pure
charity. Such acts must be of such a nature
c. Rights of Illegitimate Children
that they reveal not only the conviction of
paternity, but also the apparent desire to 1. To use the surname of the mother
have and treat the child as such in all 2. To be under the parental authority and
relations in society and in life, not entitled to support of the mother
accidentally, but continuously. (Jison v. CA, 3. To have a legitime which shall consist of 1⁄2
G.R. No. 124853, 1998) of the legitime of a legitimate child.
b. Any other means allowed by the Rules of NOTE: However, illegitimate children may use the
Court and special laws surname of their father if their filiation has been
expressly recognized by the father through:
c. The due recognition of an illegitimate child 1. Birth certificate appearing in the civil
in a record of birth register, or when an admission in a public
document, or
A will, a statement before a court of record, 2. Private handwritten instrument is made by
or in any authentic writing is, in itself, a the father
consummated act of acknowledgement of Provided, the father has the right to institute an
the child, and no further court action is action before the courts to prove non-filiation during
required. In fact, any authentic writing is his lifetime. (Art. 176)
treated not just a ground for compulsory
recognition; it is in itself a voluntary d. Grounds to Impugn Filiation
recognition that does not require a separate
action for judicial approval. (Eceta v Eceta The filiation of illegitimate children may be impugned
G.R. No. 157037, 2004). on the same grounds as those of legitimate
children under Art. 166.
The father’s SSS Form E-1 (since it is a public
document) satisfies the requirement for proof of Grounds to Impugn the Illegitimacy of the Child
filiation and relationship of petitioner to the (Exclusive List) (PBA) (Art. 166)
Aguilar spouses under Article 172 of the Family a. It was Physically impossible for the
Code. Filiation may be proved by an admission of husband to have sexual intercourse with
illegitimate filiation in a public document or a private his wife within the first 120 days of the 300
handwritten instrument and signed by the parent days which immediately preceded the birth
concerned, and such due recognition in any of the child because of:
authentic writing is, in itself, a consummated act of i. Physical incapacity of the husband to
acknowledgment of the child, and no further court have sexual intercourse with his wife
action is required. (Aguilar v. Siasat, G.R. 200169, ii. Fact that the husband and wife were
2015) living separately in such a way that
sexual intercourse was not possible, or
A thumb mark has been repeatedly considered a iii. Serious illness of the husband which
valid mode of signature. Thus, the document absolutely prevented intercourse
executed by the putative father evidencing his
voluntary recognition of filiation is valid. (San b. If it’s proved that for Biological or other
Agustin v. Sales, G.R. No. 189289, 2016) scientific reasons, the child could not have
been that of the husband, except in the
Period of Filing Action to Prove Filiation case of children conceived through
GENERAL RULE: If the action is based on Art. 172, artificial insemination
par. 1, the action must be brought within the same c. In case of children conceived through
period as specified in Art. 174. It must be filed during Artificial insemination, when the written
his or her lifetime. authorization or ratification of either parent
was obtained through mistake, fraud,

ATENEO CENTRAL
violence, intimidation, or undue influence. c. Grounds to Impugn Legitimacy

(Note: This assumes that there was written
authorization) The legitimacy of a legitimated child may be
impugned on the same grounds as those of
4. Legitimated Children legitimate children and illegitimate children under
Art. 166.
a. Who May Be Legitimated
Grounds to Impugn the Legitimacy of the Child
Children who were conceived and born outside of (Exclusive List) (PBA) (Art. 166)
wedlock of parents who, at the time of the a. It was Physically impossible for the
conception of the former, were not disqualified by husband to have sexual intercourse with
any impediment to marry each other, or were so his wife within the first 120 days of the 300
disqualified only because either or both of them days which immediately preceded the birth
were below 18 years age, may be legitimated. (Art. of the child because of:
177) i. Physical incapacity of the husband to
have sexual intercourse with his wife
Requisites for Legitimation ii. Fact that the husband and wife were
living separately in such a way that
1. The child was conceived and born out of
sexual intercourse was not possible, or
wedlock
iii. Serious illness of the husband which
2. The parents, at the time of child’s
absolutely prevented intercourse
conception, were not disqualified by any
impediment to marry each other or were
b. If it’s proved that for Biological or other
disqualified only because either or both of
scientific reasons, the child could not have
them were below 18
been that of the husband, except in the
3. There is a valid marriage subsequent to the
case of children conceived through
child’s birth
artificial insemination
c. In case of children conceived through
Benefit to Descendants Artificial insemination, when the written
The legitimation of children who died before the authorization or ratification of either parent
celebration of the marriage shall benefit their was obtained through mistake, fraud,
descendants. (Art. 181) violence, intimidation, or undue influence.
(Note: This assumes that there was written
Legitimate ascendants & descendants are obliged authorization)
to support each other. (Art. 195[2])
Who May Impugn Legitimacy of a Legitimated
b. How Legitimation Takes Place Child
Legitimation may be impugned only by those who
Legitimation are prejudiced in their successional rights (Art. 182)
Legitimation takes place by the subsequent a. Legal heirs of parents
marriage of the child’s parents. Annulment of a b. An adopted child can be a prejudiced heir
voidable marriage shall not affect the legitimation. of his adopter and his natural parents in
(Art. 178) case a child of the said parents is
legitimated
Effect of Legitimation (Art. 179-181)
a. Confers on the child the rights of legitimate Periods for Filing of Action to Impugn
children Legitimacy of a Legitimated Child
b. Retroacts to the time of the child’s birth Within 5 years from the time their cause of action
c. The legitimation of children who died before accrues which is only upon the death of the parents
the celebration of the marriage shall benefit
of the legitimated child. (Art. 182)
their descendants.
Legitimation may be impugned only by those who

are prejudiced in their rights within 5 years from the
time the cause of action accrues. (Art. 182)
NOTE: Parents need not die for the cause of action

to accrue

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SUMMARY OF FILIATION
LEGITIMATE ILLEGITIMATE LEGITIMATED f. Legitimated,
Those Those For a child to conceived and
conceived or conceived AND be considered born outside
born during a born outside a legitimated, of wedlock of
valid marriage valid marriage the following parents
(Art. 164) (Art. 165) requisites without
These include must be met: impediment at
children who These children (Art. 177) the time of
are: include those conception
who are: a. The child and who
a.Conceived was conceived subsequently
as a result of a. Born of and born out of
married
artificial marriages wedlock
insemination, which are void
provided ab initio such as b. The parents, RIGHTS OF LEGITIMATE/LEGITIMATED VIS-À-
written bigamous and at the time of VIS ILLEGITIMATE CHILDREN
authorization incestuous child’s RIGHTS OF RIGHTS OF
or ratification marriages and conception, LEGITIMATE ILLEGITIMATE
is given by the void marriages were not CHILDREN CHILDREN
spouses by reason of disqualified by (ART. 174) (ART. 176)
before the public policy any Use of surname
birth of the impediment to of the mother,
child b. Conceived marry each and has no right
and born of other or were to use the
b.Conceived voidable disqualified surname of the
or born of a marriages after only because father
voidable the decree of either or both
marriage annulment of them were Exception:
before decree below 18 They may be
of annulment c. Conceived allowed to use
and born out of c. There is a the surname of
c. Conceived wedlock valid marriage their father only
or born before subsequent to
if there is
judgment of the child’s birth Bear the
absolute primary
surnames of
nullity under Surname evidence of such
Legitimation the father and
Art. 36 illegitimate
takes place by mother
(psychological filiation between
the
incapacity) them but without
subsequent
becomes final need of
marriage of the
& executory establishing
child’s parents.
such filiation in a
d.Conceived judicial
or born of a proceeding. In
subsequent such case, the
marriage father during his
under Art. 53 lifetime, may
(failure to institute an
record the action to prove
judgment, non-filiation.
partition and Has right to
distribution of Has the right
receive support
properties, to receive
from both
and delivery support from
parents but only
of children’s their parents,
presumptive Support the separate
their
legitime) property of the
ascendants,
person obliged
and in proper
e.Legally to give support
cases, their
adopted shall be

ATENEO CENTRAL
brothers and answerable, GENERAL RULE: Administrative proceedings.

sisters provided that in EXCEPTION: When initiated under the Old Law
case the obligor (R.A. 8552 as amended by R.A. 9532 and RA 8043)
has no separate
property, the Subject Child: Legally Available
absolute GENERAL RULE: No child shall be a subject of
community or administrative adoption.
the conjugal EXCEPTION: Unless the status of the child has
partnership, if been declared legally available for adoption
financially EXCEPTION TO THE EXCEPTION: In cases of
capable, shall relatives or step-parent adoption where such
advance the declaration is not required.
support, which
shall be National Authority for Child Care (NACC)
deducted from Principal agency who has original and exclusive
the share of the jurisdiction over all matters pertaining to alternative
spouse obliged child care programs, which include domestic
upon the adoption and inter-country adoption, foster care and
liquidation of the declaration of a child legally available for
ACP or CPG adoption. Attached to the DSWD.
Preferential Preferential
successional successional NACC shall exercise all powers and functions
Successional rights in both rights in both relating to alternative child care including, declaring
Rights intestate and intestate and a child legally available for both domestic,
compulsory compulsory administrative adoption and inter-country adoption,
succession succession foster care, kinship care, family-like care, or
residential care. (Sec. 5)
a. Use the surname of the mother if the
requisites of R.A. 9255 are not complied Child Legally Available for Adoption (CLAA)
with A child in whose favor a certification was issued by
the NACC that such child is legally available for
b. Use the surname of the father if the child’s
adoption after abandonment or neglect has been
filiation has been expressly recognized by
proven through the submission of evidence, or one
the father, either through: who was voluntarily committed by the child's parents
● Record of birth in civil register or legal guardians. (Sec. 4)
● Father’s admission in public document
● Father’s admission in private Certificate Declaring a Child Legally Available
handwritten document for Adoption (CDCLAA)
Final written administrative order issued by the
5. Adopted Children NACC declaring a child to be abandoned and
neglected, and committing such child to the care of
a. Domestic Administrative the NACC. Upon issuance, the rights of biological
Adoption and Alternative Child parents, guardian, or other custodian to exercise
Care Act (R.A. 11642) authority of the child shall cease. (Sec. 4)
NOTE: RA 8552 as amended by RA 9523 were GENERAL RULE: CDCLAA must be published in
repealed, and RA 8043 was amended by RA 11642, one (1) newspaper of general circulation.
which took effect on January 28, 2022. EXCEPTION: Publication can be dispensed with in
the case of step-parent and relative adoption.
Purpose of R.A. 11642
Recognizes that the administrative adoption Who May File a Petition for CDCLAA
processes for the cases of legally-available children, The Head or Executive Director of a licensed or
relative, stepchild, and adult adoptees are the most accredited child-caring for child-placing agency or
expeditious proceedings that will redound to their institution managed by the government, PGU, NGO,
best interest. It provides for simpler and inexpensive or provincial, city, or municipal social welfare
domestic administrative adoption proceedings. development officer (SWDO) who has actual
custody of the minor may file a petition before the
Administrative Proceedings NACC, through the Regional Alternative Child Care

ATENEO CENTRAL
Office (RACCO), for the issuance of a CDCLAA. Requirements for No. 6 on age
(Sec. 12) difference may be waived in the
following instances:
NOTE: If the child is under the custody of any other 1. When the adopter is the biological
individual, the child-caring for child-placing agency parents of the adoptee, or
or institution shall do so with the consent of the 2. When the adopter is the spouse of
child's custodian. the adoptee's parents
Petition for CDCLAA 2. A Foreign National

In the form of an affidavit, subscribed and sworn to a. At least 25 years of age
before any person authorized by law to administer b. Has full civil capacity and legal
oaths which shall contain: rights
1. Facts necessary to establish the merits of c. Good moral character
the petition d. Not convicted of a crime involving
2. Circumstances surrounding the moral turpitude
abandonment, neglect, voluntary e. Emotionally and psychologically
commitment of the child, or discovery of the capable of caring for children
foundling f. At least 16 years older than the
3. Attached supporting documents adoptee.
a. Social case study report g. In a position to care for his children
b. Proof that efforts were made to locate the in keeping with the means of the
parents or any known relatives of the child family
i. Written certification from a local or
national radio or television station that NOTE: Same qualifications as a
the case was aired on three (3) Filipino Citizen as above prior to
different occasions filing of the petition
ii. Publication in one (1) newspaper of
general circulation h. Permanent or habitual residents of
iii. Police report or barangay certification the Philippines for at least five (5)
which states that despite due diligence, years
the child's parents could not be found i. Laws of the adopter's country will
iv. Returned registered mail to the last acknowledge the Certificate of
known address of the parents or known Adoption as valid, acknowledge
relatives, if any, or in the case of a the child as a legal child of the
voluntarily committed child, the DVC adopters
signed by the biological parent j. His government allow entry of the
v. Birth certificate, if available child into such country as an
vi. Recent photograph of the child (Sec. adoptee
13)
NOTE: No requirement that the child
b. Who may adopt (FF-GG-Go) will automatically become a citizen of
(Sec. 21) such country, only that his government
allow entry of the child into such
1. A Filipino Citizen country as an adoptee
a. At least 25 years of age
b. Has full civil capacity and legal rights Requirements for No. 2 on
c. Good moral character and can model residency may be waived in the
the same following instance:
d. Not convicted of a crime involving A former Filipino citizen, habitually
moral turpitude residing in the Philippines, who seeks
e. Emotionally and psychologically to adopt a relative within fourth (4th)
capable of caring for children civil degree of consanguinity or affinity
f. At least 16 years older than the One who seeks to adopt the legitimate
adoptee. child of the Filipino spouse
g. In a position to care for his children in
keeping with the means of the family One who is married to a Filipino citizen
and seeks to adopt jointly with the
spouse a relative within the fourth (4th)

ATENEO CENTRAL
degree of consanguinity or affinity of months from the time of death of said

the Filipino spouse. parents; or
8. A Relative of the adopter.
NOTE: The disqualification of a person
who was convicted of a crime of moral NOTE: A "child" refers to a person below
turpitude will not be removed by a eighteen (18) years of age or a person eighteen
pardon granted to the offender, since (18) years of age or over but who is unable to
the lack of the necessary moral fully take care or protect himself or herself from
qualification to adopt a child remains, abuse, neglect, cruelty, exploitation, or
even if the offender has been discrimination because of physical or
pardoned. psychosocial disability or condition: Provided,
That for the purpose of this Act, where relevant,
3. Guardians a child shall also refer to an adult son, daughter,
a. Legal Guardian with respect to his or offspring.
ward after the termination of the
guardianship and clearance of his Written consent is necessary for adoption from
financial accountabilities the following: (A-BLISS)
b. Legal Guardians with respect to the 1. The Adoptee, if ten (10) years of age or
foster child over
2. The Biological parents of the child, if
4. Philippine Government Officials and known, or the legal guardian, or the proper
Employees deployed or stationed government instrumentality which has legal
abroad custody of the child
Provided they are able to bring the child 3. The Legitimate and adopted children, ten
with them (10) years of age or over, of the adopters, if
any
Rules on Adoption by Spouses 4. The Illegitimate children, ten (10) years of
GENERAL RULE: Spouses shall jointly adopt age or over, of the adopter if living with said
EXCEPTIONS: adopter or over whom the adopter
1. If one spouse seeks to adopt the legitimate exercises parental authority and the latter's
child of the other; spouse, if any
2. If one spouse seeks to adopt own 5. The Spouse, if any, of the person adopting
illegitimate child, provided, that the other 6. The Spouse, if any, of the person to be
spouse has consented to the adoption; or adopted
3. If the spouses are legally separated from
each other NOTE: Children under ten (10) years of age
shall be counseled and consulted, but shall not
be required to execute within consent
c. Who may be adopted (ILIOF
Exception to No. 2 in the following instance:
RPR) Except in the case of a Filipino of legal age if,
prior to the adoption, said person has been
1. Any child who has been Issued a CDCLAA consistently considered and treated as their
2. The Legitimate child of one spouse by the own child by the adopters for at least three (3)
other spouse years.
3. An Illegitimate child by a qualified adopter
to improve status of legitimacy
NOTE: The only relationship created is
4. A Filipino of legal age if, prior to the
between parent and child. The legitimate or
adoption, said person has been
illegitimate children of the adopters, if there is
consistently considered and treated by the
no blood relationship, are not the siblings of the
adopters as their Own child for a period of
adopted. (Reyes v. Elquiero, G.R. No. 210487)
at least three (3) years
5. A Foster child
6. A child whose adoption has been
d. Effects of a Decree of Adoption
previously Rescinded (See Article Nos. 189-190 of the
7. A child whose biological or adoptive Family Code)
Parents have died: Provided, That no
proceedings shall be initiated within six 6) Effects of Decree of Adoption

ATENEO CENTRAL
Legitimacy Rules on Succession

Adoptee shall be considered the legitimate child of In testate and intestate succession, the adopters
the adopter for all intents and purposes and as such and the adoptee shall have reciprocal rights of
is entitled to all the rights and obligations provided succession without distinction from legitimate
by law to legitimate children born to them without filiations.
discrimination of any kind. To this end, the adoptee
is entitled to love, guidance, and support in keeping NOTE: However, if the adoptees and their biological
with the means of the family. parents have left a will, the law on testamentary
succession shall govern.
NOTE: Legitimate filiation that is created between
the adopter and adoptee shall be extended to the Adoption shall have the following effects (Art.
adopter's parents, adopter's legitimate siblings, and 189):
legitimate descendants. 1. Deemed to be a legitimate child of the
adopters and
The adopter is also given the right to choose the 2. Both shall acquire the reciprocal rights and
name by which the child is to be known, consistent obligations arising from the relationship of
with the best interest of the child. parent and child
3. Adopted child has the right to use the
NOTE: Adopted child is allowed to use her biological surname of the adopters
mother's middle name, in case she is adopted by her 4. Terminate parental authority of the parents
biological father, even if her biological mother was by nature over the adopted and vested in
not married to the biological father-adopter, and for the adopters
as long as she consented to the adoption. There is 5. Adopted child shall remain an intestate heir
no law to this effect, but there is also no law of his parents and other blood relatives
prohibiting the same. Allowing the adopted child to
use as her middle name the surname of her Exception to No. 2 in the following instance:
biological mother, whose parental authority in this If the adopter is the spouse of the parent by
case was, in effect, terminated due to the adoption, nature of the adopted, parental authority over
is in accordance with the intent of the adoption law the adopted shall be exercised jointly by both
to provide the child all the rights of a legitimate child. spouses.
It is also a custom that a legitimate child uses as his
or her middle name, the surname of the mother. (In Rules on legal or intestate succession to the
the Matter of the Adoption of Stephanie Nathy estate of the adopted shall be governed by the
Astorga, G.R. No. 148311) following rules (Art. 190):
a. Legitimate and illegitimate children and
Parental Authority descendants and the surviving spouse of
GENERAL RULE: Adoption shall cease as the adopted shall inherit from the adopted,
alternative care and become parental care upon in accordance with the ordinary rules of
issuances of the Order of Adoption. Adoptive legal or intestate succession
parents shall now have full parental authority over b. When the parents, legitimate or illegitimate,
the child. or the legitimate ascendants of the adopted
concur with the adopter, they shall divide
EXCEPTION: If the biological parent is the adopter's the entire estate, 1/2 to be inherited by the
spouse, all legal ties between the biological parents parents or ascendants and 1/2, by the
and the adoptee shall be severed and the same adopters
shall then be vested on the adopters. c. When the surviving spouse or the
illegitimate children of the adopted concur
NOTE: In case spouses jointly adopt or one spouse with the adopters, they shall divide the
adopts the legitimate child of the other, joint parental entire estate in equal shares, 1/2 to be
authority shall be exercised by the spouses. inherited by the spouse or the illegitimate
children of the adopted and 1/2, by the
NOTE: Parental authority of biological parents is adopters.
dissolved. It becomes the adopter who must give d. When the adopters concur with the
their consent to the marriage of an adopted child illegitimate children and the surviving
between 18-21 years old. Upon the death of the spouse of the adopted, they shall divide the
adoptive parents, no rights or duties are re- entire estate in equal shares, 1/3 to be
established with the natural parents. inherited by the illegitimate children, 1/3 by

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the surviving spouse, and 1/3 by the 1. Repeated physical or verbal Maltreatment
adopters by the adopter despite having undergone
e. When only the adopters survive, they shall counseling
inherit the entire estate 2. Attempt on the life of the adoptee
f. When only collateral blood relatives of the 3. Sexual Abuse or Violence
adopted survive, then the ordinary rules of 4. Abandonment and failure to comply with
legal or intestate succession shall apply. parental obligations.
Rules on Succession (Art. 190) Where to file Petition for the Rescission of
RULES ON SUCCESSION (Art. 190) Adoption
Legitimate and With the RACCO where the adoptee resides. (Sec.
illegitimate children In accordance with the 48)
and descendants and ordinary rules of legal
the surviving spouse of or intestate succession When to file Petition for the Rescission of
the adopted Adoption
Parents, legitimate or Upon the existence of any ground or grounds
1/2 to be inherited by mentioned in Section 47, the adoptee or the
illegitimate, or the
the parents or adoption social worker must file the petition for
legitimate ascendants
ascendants and 1/2 by rescission of adoption before the NACC. (Sec. 49)
of the adopted concur
the adopters
with the adopter
In equal shares, 1/2 to Decision on Petition for the Rescission of
Surviving spouse or the be inherited by the Adoption
illegitimate children of spouse or the If the NACC finds that the allegations of the petition
the adopted concur illegitimate children of for rescission are true, it shall render a decision
with the adopters the adopted and 1/2 by ordering the rescission of administrative adoption.
the adopters (Sec. 51)
In equal shares, 1/3 to
Adopters concur with be inherited by the NACC shall order:
the illegitimate children illegitimate children, a. Parental authority of the biological
and the surviving 1/3 by the surviving parent of the adoptee be restored, if
spouse of the adopted spouse, and 1/3 by the the biological parent of the adoptee
adopters files a petition for restoration of
Only the adopters parental authority in the best interest of
Inherit the entire estate the child, and if the adoptee is still a
survive
Only collateral blood Ordinary rules of legal minor or incapacitated, and declare
relatives of the adopted or intestate succession that the reciprocal rights and
survive shall apply obligations of the adopter and the
adoptee to each other shall be
extinguished.
b. If the biological parent of the adoptee
Rescission of Adoption has not filed a petition for restoration of
parental authority, or is not known, or if
Who may file a Petition for the Rescission of restoring the parental authority over
Adoption the adoptee is not the latter's best
Only the adoptee. If the adoptee is a minor, or if the interest, the NACC shall take legal
adoptee is eighteen (18) years of age or over but custody over the adoptee if still a child
who is incapacitated or by his or her guardian, with c. Successional rights shall revert to its
the assistance of the SWD upon petition to the status prior to adoption, as of the date
NACC. (Sec. 47) of decision. Vested rights acquired
prior to administrative rescission shall
NOTE: Adoption, being in the best interest of the be respected.
child, shall not be subject to rescission by the d. Adoptee to use the name stated in the
adopter. However, the adopter may disinherit the original birth or foundling certificate
adoptee for causes provided in Article 919 of the e. Cancel the new birth certificate of the
Civil Code. adoptee in the Civil Registrar where
the adoption order was registered, and
Grounds for Rescission of Administrative to reinstate the original birth or
Adoption: (MASA) foundling certificate.

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4. SUPPORT
Effects of Rescission of Adoption (Sec. 53)
1. What Comprises Support
Legal Custody
Legal custody of the NACC shall be restored if the Support consists of everything indispensable
petition for rescission of adoption is granted, and the for: (METS-DC) (Art. 194):
adoptee is still a child. The reciprocal right and a. Medical attendance
obligations of the adopters and the adoptee to each b. Education – includes schooling (formal
other shall be extinguished. education) or training (non-formal
education) for some profession, trade or
Parental Authority vocation, even beyond the age of majority
If the biological parents can prove that they are in a c. Transportation – includes expenses going to
position to support and care for the child and it is in and from school, or to and from place of
the child's best interest, the biological parents may work (Art. 194)
petition the NACC for the restoration of their d. Sustenance
parental authority over the child. e. Dwelling
f. Clothing
Birth Certificate
The Civil Registrar General shall cancel the There is no distinction between natural support
amended birth certificate and restore the original (basic necessities) and civil support (those beyond
birth certificate of the adoptee upon order of the the basic necessities)
NACC.
In an action for support, the court can declare a
Rules on Succession marriage void to determine the rights of the child to
Succession rights shall revert to its status prior to be supported. There is no need that a judicial
adoption, but only as of the date of the approval of declaration of nullity be filed first before the lower
the petition for rescission of adoption. Vested rights court can rule that the marriage was void. (De
acquired prior to rescission shall be respected. Castro v. Assidao-De Castro, G.R. No. 160172)
Criminal sanctions 2. Who are Obliged to Give Support

All the foregoing effects of rescissions of adoption
shall be without prejudice to the penalties imposed Persons Obliged to give Support to Each Other
under the Revised Penal Code if the criminal acts to the Whole Extent: (SAPL) (Art. 195)
are properly proven. a. Spouses
b. Legitimate Ascendants and Descendants
Rectification of Simulated Birth Record c. Parents and their Legitimate/Illegitimate
Notwithstanding any provision of law to the contrary, Children/Grandchildren
a person or persons who, prior to the effectivity d. Legitimate Brothers and Sisters, whether full
of this Act, simulated the birth of a child, and or half-blood
those who cooperated in the execution of such
simulation, shall not be criminally, civilly, or Rules Regarding Support for Illegitimate
administratively liable for such Brothers and Sisters (Whether Full or Half
act: Provided, That the simulation of birth was Blood)
made for the best interest of the child and that a. If the one asking for support is below
the child has been consistently considered and majority age, he is entitled to support from
treated by such person or persons as her, his, his illegitimate brother or sister to the full
or their own daughter or son: Provided, extent, without any condition
further, That such person or persons has or have b. If the one asking for support is of majority
filed a petition for adoption with an application age, he is entitled to support only if his need
for the rectification of the simulated birth record for support is not due to a cause imputable
within ten (10) years from the effectivity of this to his fault or negligence. (Art. 196)
Act: Provided, finally, That all the benefits of this
Act shall also apply to adult adoptees. (Sec. 5, Insofar as Philippine laws are concerned,
Republic Act No. 11222) specifically the provisions of the Family Code on
support, the same only applies to Filipino citizens.
NOTE: Sec. 5 of RA 11222 has not been Petitioner cannot rely on Article 195 in demanding
amended or repealed by RA 11642. support from respondent, who is a foreign citizen.
However, in view of respondent’s failure to

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prove the national law of the Netherlands, the b. In case of urgency or special
doctrine of processual presumption shall circumstances, the judge may order only
govern, which states that if the foreign law one of them to furnish provisional support
involved is not properly pleaded and proved, our a. Without prejudice to his or her right
courts will presume that the foreign law is the of reimbursement from the other/s
same as our local or domestic or internal law. (Art. 200[2])
Thus, the law in the Netherlands is presumed to be
the same with Philippine law, which enforces the Rule in case of multiple obligees with one and
obligation of parents to support their children and the same obligor
penalizing the non-compliance therewith. Moreover,
foreign law should not be applied when its GENERAL RULE: The obligor must satisfy all the
application would work undeniable injustice to the claims
citizens or residents of the forum. (Norma A. Del EXCEPTION: In case the obligor has no sufficient
Socorro, for and in behalf of her minor child, means to satisfy all the claims, the order above
Roderigo Norjo Van Wilsem v. Ernst Johan (See: order of support or Art. 199) shall be followed
Brinkham Van Wilsem, G.R. No. 193707) EXCEPTION TO THE EXCEPTION: Between the
spouse and a child subject to parental authority, the
3. Source of Support child is preferred (Art. 200 [3])
Support for spouses, common children, and Amount of support

legitimate children of either spouse
For the support of spouses, their common children, Amount of support shall be in proportion to:
and legitimate children of either spouse, the a. The resources or means of the giver and
absolute community or the conjugal partnership b. To the necessities of the recipient (Art. 201)
shall be liable (Art. 94[1], Art. 121[1]). Amount of support shall be reduced or increased
Others obliged to give support proportionately according to:
For others obliged to give support, the separate a. Changes in the necessities of the recipient
property of the obligor shall be answerable. and
Provided that: b. The resources of the provider (Art. 202)
a. The absolute community or the conjugal
partnership shall advance the support in Manner and time of payment
case the obligor has no separate property
i. Under CPG, in case of Time of payment (Art. 203):
insufficiency, the conjugal The obligation to give support can be demanded
partnership shall be liable only from the time the person who has the right to receive
after the responsibilities under the same needs it for maintenance. However, it shall
Art. 121 have been covered be paid only from the date of judicial or extrajudicial
(Art. 122) demand.
b. Any advance/s made shall be deducted
from the share of the obligor spouse upon Payment shall be made within the first five (5) days
liquidation of the absolute community or of of each corresponding month
the conjugal partnership (Art. 197) ● In case the recipient dies, his heirs shall not
be obliged to return what he has received in
4. Order of Support advance
When two or more persons are obliged to give Manner of payment (Art. 204):
support, liability shall devolve based on the Here, the obligor has two options:
following order: 1. To pay the allowance fixed; or
1. Spouse; 2. To receive and maintain the person who has
2. Descendants in the nearest degree; a right to receive support in the family
3. Ascendants in the nearest degree; and dwelling, unless there is a moral or legal
4. Brothers and sisters (Art. 199) obstacle
Rule in case of multiple obligors with one and Renunciation and termination
the same obligee
a. The payment shall be divided between the The waiver, renunciation, transmission, or
obligors in proportion to their resources compensation of the right to receive support cannot
(Art. 200(1)) still be undertaken as such acts are contrary to law,

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public policy, morals, or good customs pursuant to

Article 6 of the Civil Code. Remedy
● It is in violation of the of the mandatory The remedy against an interlocutory order not
obligation under Article 195 and therefore, subject of an appeal is a special civil action under
if such prescribed acts are undertaken, Rule 65 provided that the interlocutory order is
they shall be void pursuant to Article 5 of rendered without or in excess of jurisdiction or with
the Civil Code grave abuse of discretion. Having chosen the wrong
remedy in questioning the subject interlocutory
Support pendente lite orders of the RTC, petitioner's appeal was correctly
dismissed by the CA (Calderon v. Roxas and CA,
Support shall be given during the proceedings for: G.R. No. 185595).
1. Legal separation
2. Annulment of marriage X prayed for support from the putative father of her
3. Declaration of nullity of marriage child (who is also X’s father). While the grant of
support was contingent on ascertaining parental
Who are entitled to Support Pendente Lite relations between the child and the putative parent,
Spouses and their children it was unnecessary for the action for support to be
dismissed by the appellate court. An integrated
GENERAL RULE: As between spouses, the determination of filiation is "entirely appropriate" to
obligation of mutual support ceases after final an action for support. Concerned parties may be
judgement granting the petition. allowed to present evidence to establish their cause
of action, inclusive of their underlying claim of
EXCEPTION: This is unless, in case of legal paternal relations. An action for support may very
separation, the court orders the guilty spouse to well resolve that ineluctable issue of paternity if it
furnish support to the innocent one, specifying the involves the same parties, is brought before a court
terms thereof with the proper jurisdiction, prays to impel
Source of support: The absolute community or the recognition of paternal relations, and invokes
conjugal partnership (Art. 198) judicial intervention to do so. This also serves the
interest of judicial economy — avoiding multiplicity
In an action for support, adultery is a good defense of suits and cushioning litigants from the vexation
and if properly proved and sustained, will defeat the and costs of a protracted pleading of their cause.
action (Reyes v. Ines-Luciano, G.R. No. L-48219). (Abella v. Cabañero, G.R. No. 206647)
However, while adultery may be a defense in an Q: Can the Pension Gratuity Management Center of
action for personal support, that is, support of the the AFP (PGMC) be ordered to automatically deduct
wife by the husband from his own funds, it is not a a percentage from the retirement benefits of its
defense when the support is to be taken from the enlisted personnel, and to give the same directly to
conjugal partnership property. (Lerma v. Court of the latter's lawful wife as spousal support in
Appeals, G.R. No. L-33352) compliance with a protection order issued by the
Procedure in application for support RTC pursuant to RA. No. 9262?
pendente lite A: Yes, the Supreme Court held that Section 8(g) of
RA. No. 9262, being a later enactment, should be
Interlocutory nature of support pendente lite construed as laying down an exception to the
In a Petition for Review under Rule 45, petitioner general rule that retirement benefits are exempt
argues that the CA should not have dismissed her from execution. It bears stressing that Section 8(g)
appeal because the arrears in support pendente lite providing for spousal and child support, fulfills the
which respondent failed to pay have ceased to be objective of restoring the dignity of women who are
provisional and have become final. victims of domestic violence and provides them
continued protection against threats to their
The SC held that it is important to emphasize the personal safety and security. (PGMC v. AAA, G.R.
provisional or temporary nature of support No. 201292)
pendente lite. It is but an incident to the main action
for declaration of nullity; and whether an order or 5. PARENTAL AUTHORITY
resolution is final or interlocutory is not dependent
on compliance or non-compliance by a party to its 1. Concept of Parental Authority
directive, questioning the subject interlocutory
orders of the RTC, petitioner's appeal was correctly Parental Authority (patria potestas)
dismissed by the CA.

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The mass of rights and obligations which parents proper moral development. In choosing the parent
have in relation to the person and property of their to whom custody is given, the welfare of the minor
children until their emancipation, and even after, should always be the paramount consideration. The
under certain circumstances “tender-age presumption” may be overcome only by
compelling evidence of the mother’s unfitness
Characteristics of Parental Authority: (Pablo-Gualberto v. Gualberto, G.R. No. 154994).
a. It is a natural right and duty of the parents
over the person and property of their The matter of custody is not permanent and
unemancipated children (Art. 209); unalterable and can always be re-examined and
b. It cannot be renounced, transferred, except adjusted. Custody, even if previously granted by a
in cases authorized by law (Art. 210); competent court in favor of a parent, is not
c. It is jointly exercised by the father and the permanent. The paramount interest of the child
mother (Art. 211); should always be considered (Beckett v. Sarmiento,
d. It is purely personal and cannot be exercised RTJ-12-2326)
through agents; and
e. It is temporary A joint agreement that the father shall have custody
of the child below seven is void for being contrary to
Rules as to the exercise of Parental Authority law. To limit this provision’s enforceability to court
a. The father and the mother shall jointly sanctioned agreements while placing private
exercise parental authority over the persons agreements beyond its reach is to sanction a double
of their common children. In case of standard in custody regulation of children under
disagreement, the father's decision shall seven years old of separated parents. This
prevail, unless there is a judicial order to the effectively empowers separated parents, by the
contrary (Art. 211); simple expedient of avoiding the courts, to subvert
b. If the child is illegitimate, parental authority a legislative policy vesting to the separated mother
is with the mother; sole custody of her children under seven years of
c. In case of absence or death of either parent, age (Dacasin v. Dacasin, G.R. No. 168785)
the parent present shall continue exercising
parental authority (Art. 212); 2. Substitute Parental Authority
● The marriage of the surviving parent
shall not affect parental authority over Order of Substitute Parental Authority:
the children, unless the court In default of parents or a judicially appointed
appoints another person to be the guardian, substitute parental authority shall be
guardian of the person or property of exercised by:
the children 1. The surviving grandparent;
d. In case of separation of the parents, parental 2. The oldest brother or sister over 21 years
authority shall be exercised by the parent old, unless unfit or disqualified;
designated by the Court 3. The child’s actual custodian, over 21 years
● The Court shall take into account all old, unless unfit or disqualified (Art. 216)
relevant considerations, especially
the choice of the child over 7 years of In a custody case where the father of an illegitimate
age, unless the parent chosen is unfit child was the actual custodian of said child, the SC
● No child under 7 years old shall be ruled that while it may be argued that Article 176 has
separated from the mother, unless effectively disqualified the father from exercising
the Court finds compelling reasons to substitute parental authority under Article 216, the
order otherwise Court cannot adopt a rigid view, without running
afoul to the overarching consideration in custody
Once parental authority is vested, it cannot be cases, which is the best interest of the minor. The
waived except in cases of adoption, guardianship best interest demands a determination if the mother
and surrender to a children’s home or an orphan is unfit; and if so, whether it is best that custody be
institution. (Sagala-Eslao v. Court of Appeals, G.R. with her father rather than her grandparents upon
No. 116773) whom the law accords a far superior right to
exercise substitute parental authority. (Masbate and
It is not enough to show that the biological mother is Spouses Masbate v. Relucio, G.R. No. 235498)
a lesbian so that she can be denied the custody of
a child not more than 7 years of age. X must also In case of foundlings, abandoned children,
demonstrate that she carried on her purported neglected children, or abused children, and
relationship which is not conducive to the child’s other children similarly situated, summary

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judicial proceedings shall be instituted so that b. To support, educate and instruct them by
they may be entrusted to: right precept and good example
a. Heads of children’s homes c. To provide for their upbringing in keeping
b. Orphanages, or with their means
c. Similar institutions duly accredited by the d. To give them love and affection, advice and
proper government agency (Art. 217) counsel, companionship and understanding
e. To provide them with moral and spiritual
3. Special Parental Authority guidance, inculcate in them honesty,
integrity, self-discipline, self-reliance,
People Exercising Special Parental Authority: industry and thrift, stimulate their interest in
a. School civic affairs, and inspire in them compliance
b. Administrators and teachers with the duties of citizenship
c. Individual, entity, or institution engaged in f. To furnish them with good and wholesome
childcare educational materials, supervise their
activities, recreation and association with
NOTE: Special parental authority can be exercised others, protect them from bad company, and
only over minors while under their supervision, prevent them from acquiring habits
instruction, or custody. The authority and detrimental to their health, studies and
supervision also attach to all authorized activities morals
whether inside or outside the school, entity, or g. To represent them in all matters affecting
institution their interests
h. To demand from them respect and
Liability of those Exercising Special Parental obedience
Authority Over the Child i. To impose discipline on them as may be
They are principally and solidarily liable for damages required under the circumstances
caused by the acts or omissions of the child while j. To perform such other duties as are
under their supervision, instruction or custody. imposed by law upon parents and guardians
However, this liability is subject to the defense that (Art. 220)
the person exercising parental authority exercised
proper diligence. The parents and judicial guardians The person exercising substitute parental authority
of the minor or those exercising substitute parental shall have the same authority over the person of the
authority over the minor are subsidiarily liable for child as the parents
said acts and omissions of the minor. The
responsibility given to an academic institution for the In no case shall the school administrator, teacher, or
welfare of its students has been characterized by individual engaged in childcare and exercising
law and judicial doctrine as a form of special special authority, inflict corporal punishment upon
parental authority and responsibility. the child (Art. 233)
This responsibility has been amplified by the Liability of Persons Exercising Parental
enactment of the Anti-Hazing Law, in that the failure Authority
by school authorities to take any action to prevent Civilly liable for the injuries and damages caused by
the offenses as provided by the law exposes them the acts or omissions of their unemancipated
to criminal liability as accomplices in the criminal children living in their company and under their
acts. Thus, the institution and its officers cannot parental authority. This is subject to appropriate
stand idly by in the face of patently criminal acts defenses provided by law (such as the exercise of
committed within their sphere of responsibility. They diligence of a good father of a family) (Libi v. IAC,
bear the commensurate duty to ensure that the G.R. No. 70890).
crimes covered by the Anti-Hazing Law are not
committed. (People v. Bayabos, G.R. No. 171222) EFFECTS OF PARENTAL AUTHORITY OVER
THE CHILD’S PROPERTY
4. Effects of Parental Authority
Effect of Parental Authority Upon the Property
EFFECT OF PARENTAL AUTHORITY OVER THE of the Child:
CHILD’S PERSON a. The father and mother shall jointly exercise
legal guardianship over the property of the
Parental Rights and Duties: minor common child without court
a. To keep them in their company appointment

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b. In case of disagreement, the father’s if the court finds that the cause therefore has ceased
decision shall prevail, unless there is judicial and will not be repeated
order to the contrary
c. If the market value of the property or the Termination of Parental Authority:
annual income of the child exceeds a. Death of parents
P50,000, the parent is required to furnish a b. Death of child
bond of not less than 10% of the value of the c. Emancipation of child
child’s property or income d. Parents exercising parental authority has
d. The property of the unemancipated child subjected the child or allowed him to be
earned or acquired with his work or industry subjected to sexual abuse (ground for
or by onerous or gratuitous title shall belong permanent termination) (Art. 228)
to the child in ownership and shall be
devoted exclusively for support and Other Cases Where Parental Authority May Be
education, unless the title or transfer Terminated (Art. 229)
provides otherwise a. Adoption of child
● The fruits and income of the child’s b. Appointment of general guardian
property shall be limited primarily to c. Judicial declaration of abandonment
the child’s support and secondarily to d. Final judgment divesting parental authority
the collective daily needs of the family e. Judicial declaration of absence or incapacity
of person exercising parental authority
The parent’s authority over the estate of the ward as
a legal guardian would not extend to acts of RETROACTIVITY OF FAMILY CODE
encumbrance or disposition, as distinguished from
acts of management or administration. (Nario v. NOTE: No longer included in the 2023 syllabus
Philippine American Life Ins. Co., G.R. No. L-
22796) This code shall have retroactive effect insofar as
it does not prejudice or impair vested or
A parent has no power to compromise their acquired rights in accordance with the Civil
children’s claims, for a compromise has always Code or other laws (Art. 256)
been deemed equivalent to an alienation, and is an
act of strict ownership that goes beyond mere Since the petitioner and the respondent suffer no
administration. (Visaya, et al. v. Suiguitan, et al., legal impediment and exclusively lived with each
G.R. No. L-8300) other under a void marriage, their property relation
is one of co-ownership under Article 147 of the
SUSPENSION OR TERMINATION OF PARENTAL Family Code. The said provision finds application in
AUTHORITY this case even if the parties were married before the
Family Code took effect by express provision of the
Grounds for Suspension of Parental Authority: Family Code on its retroactive effect for as long as it
(CHOBA) does not prejudice or impair vested or acquired
1. Conviction of parent for crime with civil rights in accordance with the Civil Code or other
interdiction (Art. 230) laws. (Paterno v. Paterno, G.R. No. 213687)
2. Treats child with excessive Harshness and
cruelty ———— end of topic ——
3. Gives corrupting Orders counsel, or
example
4. Compels child to Beg
5. Subjects to or allows him to be subjected to
Acts of lasciviousness (Art. 231)
Revival of Suspended Parental Authority

If under No. 1: The authority is automatically
reinstated upon service of the penalty or upon
pardon or amnesty of the offender
If under No. 2-5 The suspension or deprivation may

be revoked and the parental authority revived in a
case filed for the purpose or in the same proceeding

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PROPERTY COVER PAGE

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B. TRADITION
PROPERTY
C. DONATION
1. Features
2. Classifications
I. CLASSIFICATION OF PROPERTY
3. Distinctions Between Mortis Causa
A. IMMOVABLES
and Inter Vivos Donations
B. MOVABLES
4. Form
5. Limitations
II. BUNDLES OF RIGHTS 6. Reduction and Revocation
A. OWNERSHIP
D. PRESCRIPTION
B. RIGHT OF ACCESSION 1. Distinctions Between Acquisitive and
1. General Principles Extinctive Prescription
2. Accession Industrial 2. Distinctions Between Extinctive
3. Accession Natural Prescription and Laches
C. ACTIONS TO RECOVER PROPERTY

1. Accion reivindicatoria
2. Accion publiciana
3. Accion interdictal
4. Quieting of Title
D. CO-OWNERSHIP
1. Distinctions Between Right to Property
Owned in Common and Full Ownership
Over the Ideal Share
2. Contributions for Expenses
3. Redemption
4. Partition
E. POSSESSION
1. Possession in the Concept of a Holder
2. Possession in the Concept of an Owner
3. Relevance of Good Faith and Bad Faith
4. Rules for Movables
F. USUFRUCT
1. Rights and Obligations of Usufructuary
2. Classes of Usufruct
3. Extinguishment of the Usufruct
G. EASEMENTS
1. Characteristics
2. Kinds of Easements
3. Modes of Acquiring Easements
4. Effects of Easement
5. Extinguishment of Easement
III. DIFFERENT MODES OF ACQUIRING

OWNERSHIP
A. OCCUPATION

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a) Generic – one referring to a group or class

I. CLASSIFICATION OF PROPERTY
b) Specific – one referring to a single, unique
object
What are the Classifications of Property as to
Mobility?
a) Immovables
Whether in The Custody Of The Court Or Free?
b) Movables
a) In “Custodia Legis” – in the custody of the
court
What are the Classifications of Property as to b) “Free” property (Tolentino, supra, p. 7-10)
Ownership?
a) Public property A. IMMOVABLES
b) Private property
What are the Four Juridical Classifications of
What are the Classifications of Property as to Immovable Properties? (NIDA) (Tolentino, supra,
Alienability? p. 8)
a) Within the commerce of man (or which may 1. by Nature
be the objects of contracts or judicial 2. by Incorporation
transactions) 3. by Destination
b) Outside the commerce of man 4. by Analogy
What are the Classifications of Property as to What are those that are Immovable by NATURE?
Existence? – What cannot be moved from place to place?
a) Present property (res existents) 1. Land (Art. 415 (1))
b) Future property (res futurae) 2. Buildings (Art. 415 (1))
3. Roads (Art. 415 (1))
Note: Both present and future property may be the 4. Constructions of all kinds adhered to soil (Art.
subject of sale but generally not the subject of 415 (1))
donation. 5. Mines, quarries, and slag dumps, while the
matter forms part of the bed (Art. 415 (8))
What are the Classifications of Property as to 6. Waters, either running or stagnant (Art. 415 (8))
Materiality?
a) Tangible or corporeal Note: A structure, which is merely superimposed on
b) Intangible or incorporeal the soil, may be considered movable. Similarly, a
shovelful of land is a movable for it is no longer
adhered to the soil.
Dependence or Importance?
Note: When the minerals have been extracted, they
a) Principal become movables.
b) Accessory
Buildings are always immovable under the Code.
What are the Classifications of Property as to The mere fact that the parties to a contract treat the
Capability of Substitution? building as separate does not change its character
a) Fungible: Capable of substitution by other as immovable property. (Punsalan v. Lacsamana,
things of the same quality and quantity GR No. L-55729, 1983)
b) Non-Fungible: Incapable of such
substitution, hence, the identical thing must Once a house is demolished, its character as an
be given or returned immovable ceases. (Bicerra v. Teneza, GR No. L-
16218, 1962)
A mortgage of land necessarily includes buildings,
Nature or Definiteness?
in the absence of stipulation of the improvements

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thereon. A building by itself may be mortgaged apart 1. Uprooted timber if the land is timber land (timber
from the land on which it has been built. Such would still forms an integral part thereof);
be a real estate mortgage for the building would still 2. Trees blown by a typhoon (part of the land upon
be considered immovable property. (Leung Yee v. which they rest)
Strong Machinery, GR No. L-11658, 1918)
What are the requisites of the properties that are
A valid real estate mortgage can be constituted on
attached to an Immovable in a Fixed Manner?
the building erected on the land belonging to
another. (Prudential Bank v. Panis, GR No. L- 1. Intent to attach permanently is essential;
50008, 1987) 2. In case of separation, the injury, breakage,
deterioration must be Substantial. (Art. 415 (3))
A party to a chattel mortgage is estopped from
assailing the deed as void on the ground that the What are the Schools of Thought in Temporary
house subject of the mortgage is real property. Separation?
Parties are bound by their agreement, but not third May either be:
persons. (Tumalad v. Vicencio, GR No. L-30173, 1. Immovable if there is intent to put them back; or
1971) 2. Movable because the material fact of
incorporation is what determines its condition.
If contracting parties stipulate that a real property be
considered personal, they are consequently
What are the requisites of Statues, Reliefs,
estopped from claiming otherwise. However, third
Painting, or Other Objects for Use or
persons acting in good faith are not affected by
Ornamentation?
the stipulation characterizing the subject machinery
as personal. (Serg’s Products v. PCI Leasing, GR 1. Placed by the Owner of the immovable (not the
No. 137705, 2000) object) or his agent;
2. Intent to attach them Permanently to the
What are Immovables by INCORPORATION? – tenements. (Art. 415 (4))
What are those that are essentially movables but
attached to an immovable in a fixed manner to be What are the requisites of Animal Houses,
an integral part of it? Pigeon Houses, Beehives, Fishponds, or
1. Trees, plants, and growing crops (Art. 415 (2)) Breeding Places of Similar Nature?
2. Everything attached to an immovable in a fixed 1. Placed by the Owner of the immovable or his
manner (Art. 415 (3)) agent;
3. Statues, reliefs, paintings, or other objects for 2. Intent to attach them Permanently to the land.
use or ornamentation, placed in buildings or on (Art. 415 (6))
land (Art. 415 (4))
4. Animal houses, pigeon houses, beehives, Note: Includes the animals found therein.
fishponds, or breeding places of similar nature
(Art. 415 (6)) What are considered as Immovables by
DESTINATION? – What are properties that are
What are considered as Trees, Plants, and movable placed on immovable for the utility it gives
Growing Crops? to the activity carried thereon?
Trees and plants are immovable by incorporation 1. Machinery, receptacles, instruments, or
if they are planted through labor but are immovable implements (Art. 415 (5))
by nature if they are spontaneous products of the 2. Fertilizer actually used on a piece of land (Art.
soil. 415 (7))
3. Docks and structures which, though floating,
Note: Once cut or uprooted, they cease to be are intended by their nature and object to
immovable. remain at a fixed place on a river, lake, or coast
(Art. 415 (9))
What are the Exceptions?

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What are the requisites of Machinery, Immovable by Analogy or by Law – Contracts for
Receptacles, Instruments or Implements for an public works and servitudes & other real rights over
Industry or Works? immovable property (Art. 415 (10))
1. Industry or works must be Carried on inside the
building or on the land; MOVABLES
2. Placed by the Owner of the building or property
or his agent; What are considered as Movables? (SIFTOS)
3. Machines must be Essential and principal 1. Susceptible of appropriation that are not
elements in carrying out the industry; included in enumeration in immovables. (Art. 416
4. Machines must tend Directly to meet the needs (1))
of said industry or works (adaptability). (Art. 415 2. Immovables that are designated as movables by
(5)) special provision of law. (Art. 416 (2))
3. Forces of nature brought under control by
Note: Incidentals are not included (movables science. (Art. 416 (3))
without which the businesses can still continue or 4. Things which can be transported w/o impairment
carry on their functions) of real property where they are fixed (Art. 416
(4))
Machinery is immobilized if placed by the owner of 5. Obligations, which have for their object
a plant or property; not so if placed by a tenant or movables or demandable sums (credits),
usufructuary or any person having any temporary obligations and actions must be legally
right. (Davao Sawmill Co. v. Castillo, GR No. L- demandable - demandable sums must be
40411, 1935) liquidated (Art. 417 (1))
6. Shares of stock of agricultural, commercial &
Equipment destined only to repair or service a industrial entities although they may have real
transportation business may not be deemed real estate (Art. 417 (2))
property. (Mindanao Bus v. City Assessor, GR No.
L-17870, 1962) What is an example of “Susceptible of
Appropriation”?
Note: Attachment or incorporation to the immovable An interest in business, that is, providing
is not essential. telecommunication and telephone service, is
personal property since it is capable of appropriation
Fertilizer Actually Used on a Piece of Land and not included in the enumeration of real
Fertilizers still in the barn or still wrapped inside properties. Thus, it could be subject to theft under
some newspaper even though already on the the RPC. (Laurel v. Abrogar, GR No. 155076, 2009)
ground are still movables.
What is an example of a movable Designated by
Docks and Floating Structures Special Provision of Law?
Docks and structures which, though floating, are Growing crops are considered immovable under Art.
intended by their nature and object to remain at a 415(2) but personal property under Chattel
fixed place on a river, lake, or coast are considered Mortgage Law (Sibal v. Valdez, GR No. L-26278,
immovable. (Art. 415 (9)) 1927)
Note: A floating house is immovable if it is tied to a Houses built on leased land may be treated as
shore or bank post and used as a residence, since personal property and be the object of a chattel
the “waters” on which it floats, are considered mortgage, insofar as the parties are concerned.
immovables. Otherwise, it assumes the category of (Navarro v. Reyes, GR No. L-18456, 1963)
a vessel.
What are examples of Forces of Nature?
Note further: Although personal property, vessels Electricity, gas, rays, heat, light, oxygen, atomic
partake, to a certain extent, the nature and energy, water, power etc. Electricity, the same as
conditions of real property because of their value gas, is an article bought and sold like other personal
and importance in the world of commerce.

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property and is capable of appropriation by another.

(United States v. Carlos, GR No. 6295, 1911) What is TITLE?
That which constitutes a just cause of exclusive
What are the two Classifications of Movables possession or which is the foundation of ownership
According to Nature? of property. In the Philippines, the word “title” is also
1. Consumable – cannot be utilized w/o being used in common or colloquial language to refer to a
consumed piece of paper such as an OCT or TCT.
2. Non-consumable (Tolentino, supra, p. 10)
What are the KINDS OF OWNERSHIP?
What are the two Classifications According to 1. Full Ownership (dominium or jus in re propia) –
Intention of the Parties/Purpose? (whether it can includes all the rights of the owner
be substituted by other things of same kind, quality, 2. Naked Ownership (nuda proprietas) – where
and quantity) the right to the use and the fruits has been
denied
1. Fungible (res fungibles) – only the equivalent is
a. Naked ownership + Usufruct = Full
returned
ownership
2. Non-fungible (res nec fungibles) – the identical
3. Sole Ownership – ownership is vested only in
thing is returned; do not admit of substitution
one person
(Tolentino, supra, p. 10)
4. Co-Ownership/Tenancy in Common –
ownership is vested in two or more owners; unity
What are the Tests To Determine Whether of the property, plurality of the subjects; each co-
Property Is Real or Personal? owner is the owner of the whole and at the same
1. Whether the property can be transported or time, the owner of an undivided part thereof.
carried from place to place (test by description);
2. Whether such change of location can be made What are the Seven Rights of Ownership?
without injuring the immovable to which the (PUFA-DVA) (De leon, Comments and Cases on
object may be attached (test by description); and Property, 77, 1993)
3. Whether the object does not fall within any of the 1. Jus Possidendi (right to possess)
cases enumerated in Art. 415 (test by exclusion) a. Right to hold the thing and does not
necessarily include the right to use (e.g.,
Note: Test by exclusion is superior to the test by contract of deposit)
description.
2. Jus Utendi (right to use and enjoy)
a. Includes the right to exclude any person
II. BUNDLE OF RIGHTS from the enjoyment and disposal thereof
b. Limitation: use in such a manner as not to
OWNERSHIP injure the rights of a third person
What is OWNERSHIP? 3. Jus Fruendi (right to the fruits)

The independent and general right of a person to the a. Right to the fruits
exclusive enjoyment and control of a thing in his b. Kinds of Fruits: (NIC)
possession, enjoyment, disposition, and recovery, i. Natural
subject only to the restrictions or limitations ii. Industrial
established by law and the rights of others. (Art. iii. Civil
427)
4. Jus Abutendi (right to consume)
Possession is an essential attribute of ownership. a. Includes the right to transform or abuse or
Whoever owns the property has the right to possess destroy by its use
it. Adjudication of ownership includes the delivery of
possession if the defeated party has not shown any 5. Jus Disponendi (right to dispose)
right to possess the land independently of her a. Also includes the right not to dispose, or to
rejected claim of ownership. (Pascual vs. Daquioag, alienate
GR No. 162063, 2014)

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6. Jus Vindicandi (right to vindicate or recover)

a. Includes the right of action against the Modes of acquiring ownership
holder and possessor of the thing in order
to recover it What are the Modes of Acquiring Ownership?
b. Must resort to judicial process for the (OLD-TIPS)
recovery of the property
1. Occupation
2. Law
7. Jus Accesionis (right to accessories)
3. Donation
4. Tradition
Distinction between real and personal 5. Intellectual Creation
rights 6. Prescription
7. Succession (Art. 712)
Real Right v. Personal Right
Jus in Rem Jus in Personam What is the definition of Mode?
The power of a person The power belonging to It is the process of acquiring or transferring
to obtain certain a person to demand ownership
financial or economic from another, as
advantage over a definite passive
What is the definition of Title?
specific thing, a power subject-debtor, the
enforceable against the fulfilment of a prestation It is the juridical act, right or condition which gives
whole world, whether or to give, to do, or not to the juridical justification for a mode or means to their
not he possesses the do. acquisition, but which in itself is insufficient to
thing. produce them. (De Leon, supra, p. 578-579). In the
Has a specific object Affects all the present Philippines the word “title” is also used in common
and future property of or colloquial language to refer to a piece of paper or
the debtor land title such as an OCT or TCT.
There is one definite There is a definite
active subject (like the active subject (the
owner or usufructuary); creditor); and a definite What is the Difference between Mode and Title?
the rest of the world is passive subject (the MODE TITLE
the indefinite passive debtor). Thus, a
Directly and Serves merely to give
subject. Thus, a real personal right is
immediately produces the occasion for its
right follows its object in enforceable only
the hands of the against the original a real right acquisition or
possessor (binding on debtor or a transferee existence
the whole world) who has notice or The cause The means
knowledge
Proximate cause Remote cause
The right is created It is exercised thru
directly over a thing another person, against Essence of the right Means whereby that
whom an action may be which is to be created essence is
brought or transmitted transmitted
The right is over a thing The right is to a thing
Limited by the value, Not so limited
use or productivity of What is the definition of Original Mode?
the things There being no previous or pre-existing or preceding
Created by both mode Created by title alone, title or right of another.
& title except when the title is
at the same time the What is Derivative Mode?
mode, as in succession There was a preceding owner. (De Leon, supra, p.
Subject matter is Subject matter is 580)
generally corporeal intangible or
incorporeal (for it is the
fulfilment of the duty or Limitations of ownership
prestation)
Extinguished by loss or Not extinguished by What are the Limitations on the Right of
destruction loss or destruction Ownership? (CLOGS) (De leon, supra, p. 92)

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1. Those arising from Conflicts of private rights be allowed to the finder. If the finder is a trespasser,
(e.g., those which take place in accession he shall not be entitled to any share of the treasure.
continua)
2. Those imposed by Law (e.g., Legal easements) If the things found be of interest to science or the
3. Those imposed by the Owner himself (e.g., arts, the State may acquire them at their just price,
Voluntary easement, pledge, lease) which shall be divided in conformity with the rule
4. Those imposed by the Grantor of the property on stated. (351a)
the grantee
a. by contract (e.g., donation) Article 439. By treasure is understood, for legal
b. by last will purposes, any hidden and unknown deposit of
5. Those imposed in general by the State (Art. 435) money, jewelry, or other precious objects, the lawful
a. Power of eminent domain ownership of which does not appear. (352)
b. Police power
c. Power of taxation
RIGHT OF ACCESSION
When is the Right of Ownership not Absolute?
The welfare of the people is the supreme law of the General Principles
land (Salus populi suprema est lex).
What is the definition of Accession?
Note: The owner bears the loss of the property Right of the owner of a thing, real or personal, to
owned by him (Res perit domino). become the owner of everything which is produced
thereby, or which is incorporated or attached
What are the Limitations Imposed by The State: thereto, either naturally or artificially. (Art. 440)
1. Eminent Domain;
2. Police Power; Note: It is not one of the modes of acquiring
3. Taxation ownership enumerated in Art. 712. (Manresa, 6th
Ed., Vol. 3, p. 116; 180-182)
In the exercise of eminent domain, just Is the right to accession automatic?

compensation should be computed using the values Yes. Generally, the right to accession is automatic
at the time of payment judicially determined and not (ipso jure), requiring no prior act on the part of the
at the time of taking considering that the government owner of the principal (Villanueva v. Castro, 23 Phil.
and the farmer-beneficiaries have already benefited 54, 1912)
from the land although ownership thereof has not
yet been transferred in their names. However, if, in What are the Classifications of Accession?
the exercise of their judicial discretion, courts find
1. Accession Discreta
that a strict application of said formulas is not
2. Accession Continua
warranted under the specific circumstances of the
case before them, they may deviate or depart
therefrom, provided that this departure or deviation What is the definition of ACCESSION
is supported by a reasoned explanation grounded DISCRETA?
on the evidence on record. In other words, courts of Accession Discreta is the extension of the right of
law possess the power to make a final determination ownership of a person to the products of a thing
of just compensation. (J. Hernando: Land Bank of which belong to such person. (Paras, Civil Code of
the Philippines v. Del Moral, Inc., G.R. No. 187307, the Philippines Annotated Property Articles, 414-
2020) 773, 211, 2016)
When does accession take place?

HIDDEN TREASURE
Article 438. Hidden treasure belongs to the owner 1. Natural Fruits – spontaneous products of the
of the land, building, or other property on which it is soil and the young and other products of
found. Nevertheless, when the discovery is made on animals (Art. 442(1)).
the property of another, or of the State or any of its
subdivisions, and by chance, one-half thereof shall

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2. Industrial Fruits – those produced by lands of Accession Natural

any kind through cultivation or labor (Art.
442(2)). What are the Principal Forms of Accession
3. Civil Fruits – rent of buildings, the price of Natural?
lease of lands and other property and the 1. Alluvium (Art. 457)
amount of perpetual or life annuities or other 2. Avulsion (Art. 459)
similar income (Art. 442(3)). 3. Change in the course of rivers (Arts. 461-
462)
General Rule: All fruits belong to the owner of a 4. Formation of islands (Art. 464-465)
thing. (Art. 441)
What is Alluvium?
Exceptions: (PULPA) The accretion which the banks of rivers gradually
receive from the effects of the current of the waters
1. Possession in good faith by another; (Art. 554
and which belong to the owners of lands adjoining
(1))
the said banks. (Art. 457)
2. Usufruct; (Art. 566)
3. Lease of rural lands; (Art. 1654)
What is Accretion?
4. Pledge;
Act or process by which a riparian land gradually
5. Antichresis. (Art. 2132)
and imperceptibly receives addition made by the
What is the definition of ACCESSION water to which the land is contiguous. (Paras, supra,
CONTINUA? p. 265)
Accession Continua is the extension of the right of What are the Essential Elements of Alluvium?
ownership of a person to that which is incorporated (GCA)
or attached to a thing which belongs to such person. 1. Deposit or accumulation of soil or sediment
must be Gradual and imperceptible. (Art. 457)
When may it take place? 2. Accretion results from the effects or action of
1. With respect to real property the Current of the waters of the river. (Gov’t of
a. Accession industrial; the Phils. v. Cabangis, 53 Phil. 112, 1929)
b. Accession natural 3. The land where accretion takes place must be
2. With respect to personal property Adjacent to the bank of a river. (Art. 457)
a. Adjunction or conjunction;
b. Commixtion or confusion; Registration under the Torrens System does not
c. Specification. (Paras, supra, p. 209- protect the riparian owner against the diminution of
210) the area of his registered land through gradual
changes in the course of an adjoining stream.
(Viajar v. CA, GR No. 77294, 1998)
Accession Industrial
What are the principles of Accession Industrial? Failure to register the acquired alluvial deposit by
accretion for 50 years subjected said accretion to
1. Accessory follows the principal. acquisition through prescription by third persons.
2. The incorporation or union must be intimate
(Reynante v. CA, GR No. 95907,1992)
that removal or separation cannot be
effected without substantial injury to either
The rules on alluvion do not apply to man-made or
or both.
artificial accretions to lands that adjoin canals or
3. Good faith exonerates a person from
esteros or artificial drainage system. (Ronquillo v.
punitive liability, but bad faith may give rise CA, GR No. L-43346, 1991)
to dire consequences.
4. Bad faith of one party neutralizes the bad
Lands added to the shores by accretions and
faith of the other.
alluvium deposits caused by the action of the sea,
5. No one should enrich himself at the
form part of the public domain. When they are no
expense of another. (Paras, supra, p. 221)
longer washed by the waters of the sea and are not
6. He who is in bad faith may be penalized.
necessary for the purposes of public utility, or for the
establishment of special industries, or for the

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coastguard service, the Government shall declare ownership and the law will transfer ownership to the
them to be the property of the owners of the estates owner of the land upon which the uprooted trees are
adjacent thereto and as an increment thereof.” found.
(Lanzar v. Dir. Of Lands, GR No. L-31934, 1977)
Note: The law only requires the original owner to
What is Avulsion? claim the uprooted trees within six months, unlike a
Process which takes place when the current of a chunk of land which the law requires the original
river, creek, or torrent segregates from an estate on owner to remove or take it back within two years to
its bank a known portion and transfers it to another retain ownership.
estate, in which case, the owner of the estate to
which the segregated portion belonged, retain the Change in the Course of Rivers
ownership thereof provided he removes the same
within two years. (Art. 459) What are the Requisites of Change in the Course
of Rivers?
What are the differences between Alluvium and 1. There must be a natural change in the course
Avulsion? of the waters of the river.
ALLUVIUM AVULSION 2. The change must be abrupt or sudden. (Art.
Deposit of soil is Deposit of soil is 461)
gradual and sudden or abrupt.
imperceptible. What are the Rights Of Owner of Land Occupied
Soil cannot be Soil is identifiable and by New River Course?
identified. verifiable. 1. Right to old bed ipso facto in proportion to area
Deposit of soil belongs Deposit of soil belongs lost;
to the owner of the to the owner from 2. Owner of adjoining land to old bed: right to
property to which it is whose property it was acquire the same by paying its value – Value
attached. detached provided he not to exceed the value of area occupied by new
removes the same bed. (Art. 461)
within two years.
What is considered as New Riverbanks?
Whenever a river, changing its course by natural
What are the Essential Elements of Avulsion?
causes, opens a new bed through a private estate,
(CSK)
this bed shall become of public dominion. (Art.462)
1. Segregation and transfer must be caused
by the Current of a river, creek or torrent. (Art.
New riverbed may itself be abandoned, due to
459)
natural or artificial causes authorized by law.
2. Segregation and transfer must be Sudden
or abrupt. (Canas v. Tuason, 5 Phil. 688, 1929)
Owners will get back this previous property if the
3. The portion of land transported must be
course of the river reverts to its original place.
Known or identifiable. (Art. 459)
(Sanchez v. Pascual, 11 Phil. 395, 1969)
Note: In avulsion, the original owner must remove
What are the Islands Belonging to the State?
or take back his known and identifiable chunk of
Islands, which may be formed:
land within two years; otherwise, he will lose
1. On the seas within the jurisdiction of the
ownership over it and the law will transfer ownership
Philippines;
to the owner of the land upon which the chunk of
2. On lakes; and
land is found. (Art. 459)
3. On navigable or floatable rivers. (Art.464)
What are Uprooted Trees?
What are Islands Formed in Non-Navigable or
Trees uprooted and carried away by the current of
Non-Floatable Rivers?
the waters (Art.460)
1. Belong to the owners of the margins or banks of
the river nearest to each of them.
What are the Rules Regarding Uprooted Trees?
2. If EQUIDISTANT – divided longitudinally in
The uprooted trees must be claimed by the original
halves, each bank getting half (Art.465)
owner within six months; otherwise, he will lose

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Note: This chart is from Atty. Francis H. Ampil for

Note: Riverbeds that dry up continue to belong to 2022 Bar Examinations
the State as its property of public dominion, unless
there is an express law that provides that the dried- What is Planting?
up riverbeds should belong to some other person. Planting pertains to a perennial fact. Something that
(Republic vs. Santos III, GR No. 160453, 2012) will grow and produce fruits year after year without
having to be replanted. (Paras, supra, p. 220-221)
For Immovables
Note: Planter may be required to buy the land.
What are the Two Disputable Presumptions as
To Improvements on Land? What is Sowing?
1. Works are made by the owner Sowing pertains to an annual crop. Something that
2. Works are made at the owner’s expense (Art. will grow and produce fruits and then you plant again
446) before it will produce fruits again. (Paras, supra, p.
221)
What are the Rules when a Landowner
Note: Sower may be required to pay rent.
Builder/Planter/Sower (LO-BPS) makes
Constructions/Plantings with Materials of
Another (OM)? (Art. 455) What are the Exceptions to the Rule on Builders:
Possession as Mere Holder?
Landowner – Owner of
Builder/Planter/So Materials (OM) Rule does not apply where the builder, knowing that
wer (LO-BPS) the land is not his, does not claim ownership over
A. Good Faith Good Faith the land but possesses it as mere Holder, agent,
OM is entitled to usufructuary or tenant. (Paras, supra, p. 243)
full payment or
OM may remove Is there an Exception to the exception?
LO-BPS can acquire
the materials
the materials provided 1. Tenant whose lease is about to expire, but still
provided there is
there is full payment. sows, not knowing that the crops will no longer
no substantial
injury to work belong to him.
done. 2. A person constructs a building on his own land,
B. Good Faith Bad Faith and then sells the land but not the building to
LO-BPS can acquire OM loses the another.
the materials for free materials and will a. No question of good faith or bad faith on the
and will be entitled to be liable for part of the builder can be compelled to
damages due to damages due to remove the building;
defects or inferior defects or inferior b. New owner will not be required to pay any
quality of the quality of the indemnity for the building (Golengco v.
materials. materials. Regalado, 48 O.G. 5282)
C. Bad Faith Good Faith 3. Builder is a belligerent occupant (Republic v.
OM is entitled to Lara, 50 O.G. 5282)
full payment for 4. Builder, etc. is a co-owner even if later on,
the materials plus
during the partition, the portion of land used is
LO-BPS can acquire damages or OM
the materials provided may remove the awarded to another co-owner; (Viuda de Arias
there is full payment materials even if v. Aguilar, 40 O.G., 1941)
plus damages. there is
substantial injury Note: For the rule to apply, the construction must be
to the work done of a permanent character, attached to the soil with
plus damages. an idea of perpetuity.
D. Bad Faith Bad faith
Same as A. Same as A. If it is of a transitory character or is transferable,

there is no accession, and the builder must remove

ATENEO CENTRAL
the construction. (Alviola v. CA, GR No. 117642,

1998) What are the Rules When Landowner Sells Land
To a 3rd Person Who Is in Bad Faith?
A mere promise by the landowner to donate the Builder must go against the third person. When the
property to the builder cannot convert the latter into third person has paid the landowner, the builder may
a builder in good faith. If at all, he is a mere still file a case against the third person.
possessor by tolerance. A person whose occupation
of realty is by tolerance of its owners is a not The third person may file a 3rd party complaint
possessor in good faith. Hence, he is not entitled to against the landowner.
the value of the improvements built thereon.
(Verona Pada-Kilario v. CA, GR No. 134329, 2000)
Landowner (LO) Builder/Planter/Sower (BPS)

A. Good Faith Good Faith
To receive payment for the value of the land and

necessary, useful and luxurious expenses (if LO
wants to get luxurious improvements) with right of
retention without any obligation to pay rent until full
Option 1: To acquire whatever has been
payment.
built, planted or sown and payment of the
necessary expenses, useful expenses and
To remove the useful improvements provided it does
luxurious expenses (if the LO wants to get
not cause any injury (this is part of right of retention).
the luxurious improvements).
If LO does not get the luxurious improvements, BPS
can remove the same provided there is no injury to
the land or the building.
To purchase land at fair market value provided its

value is not considerably more than that of the
building or trees.
If BP cannot pay purchase price of the land or the S

Option 2: To oblige the BP to buy the land or cannot pay the rent, LO can require BPS to remove
the S to pay rent unless the value of the land whatever has been built, planted or sown.
is considerably more than that of the building
or trees. If the value of land is considerably more than that of
the building or trees, BPS cannot be compelled to buy
the land. In such case, BPS will pay reasonable rent.
If BPS cannot pay the rent, LO can eject BPS from

the land.
B. Good Faith Bad Faith
Loses whatever has been built, planted or sown and
liable to pay damages.
Option 1: To acquire whatever has been
Entitled to payment for necessary expenses for
built, planted or sown for free but must pay
preservation without right of retention.
necessary expenses and luxurious expenses
(if LO wants to get the luxurious
Not entitled to payment for useful expenses and
improvements) plus damages.
cannot remove even if removal will not cause injury.
If LO wants luxurious improvements, BPS is entitled

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to payment. The value of the luxurious improvements

will be as of the date LO obtains possession.
If LO does not want luxurious improvements, BPS

may remove luxurious improvements if it will not
cause injury.
Option 2: To oblige BP to buy land or S to
Obliged to pay for land or to pay rent plus damages
pay rent plus damages regardless whether
regardless whether the value of the land is
the value of the land is considerably more
considerably more than that of the building or the trees.
than that of the building or the trees.
Option 3: To compel BPS to remove or Obliged to remove or demolish work done plus
demolish work done plus damages. damages.
C. Bad Faith Good Faith
Option 1: To receive payment for whatever has been
built, planted or sown plus damages.
To pay for whatever has been built, planted
Option 2: To remove whatever has been built, planted
or sown plus damages.
or sown even if it will cause injury plus damages.
BPS has no option to acquire or buy the land.

D. Bad Faith Bad Faith
Same as A. Same as A.
Note: This chart is from Atty. Francis H. Ampil for the 2022 Bar Examinations.

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ACCESSION
Accession Accession
Discreta Continua
Natural Industrial Civil Real Personal

Fruits Fruits Fruits
Accession Accession Adjunction/ Specification Mixed

Industrial Natural Conjunction
Spontaneous
products of the rents of buildings
soil, price of leases of
Young and other land & Building commixtion
products of other property Alluvium (ISTEP)
animals amount of Inclusion or confusion
perpetual or life Planting Avulsion engraftment
annuities or
other similar Sowing Change of Soldadura or
income course of soldering
rivers
Tejido or
Formation of weaving
islands
Escritura or
writing
Pintura or
Painting

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For Movables What are the Rules as to Ownership?

OWNER OF OWNER OF
Adjunction/ Conjunction PRINCIPAL (OP) ACCESSORY (OA)
GOOD FAITH /
GOOD FAITH
What is the definition of Adjunction or BAD FAITH
Conjunction? May demand separation:
It is the process whereby two (2) movable things Acquires the If no injury will be caused
owned by different persons are joined together accessory If value of accessory is
without bad faith, in such a way that they form a - indemnifies the greater than principal -
single object. (Art. 466) former owner for even if damages will be
its value caused to principal
What are the Requisites of (expenses is to the one
Adjunction/Conjunction? (SID) who caused the
1. The two things belong to Different owners. conjunction)
2. They form a Single object. GOOD FAITH BAD FAITH
3. They are Inseparable; that their separation Loses the thing
would impair their nature or result in substantial Owns the incorporated
injury to either component. (Paras, supra, p. accessory Indemnify the OP for the
265) Right to damages damages OP may have
suffered
What are the Classes of Adjunction? (ISTEP) BAD FAITH GOOD FAITH
1. Inclusion (engraftment) Pay OA value of
2. Soldadura (soldering) accessory or Right to choose between
a. Feruminatio – same metal principal and OP paying him its value or
b. Plumbatura – different metals accessory be That the thing belonging to
3. Tejido (weaving) separated him be separated even
4. Escritura (writing) PLUS though it be necessary to
5. Pintura (painting) (Paras, supra, p. 291) Liability for destroy the principal thing
damages
General Rule: The owner of the principal thing
acquires the accessory, indemnifying the former What is mixture?
owner for its value. (Art. 466) Takes place when two or more things belonging to
different owners are mixed or combined to such
What is the Test To Determine Principal? extent that the components lose their identity. (Art.
The principal thing is deemed to be that to which the 472)
other has been united as an ornament, or for its use
or perfection. (Art. 467.) What are its kinds?
1. Commixtion – mixture of solid things
If it cannot be determined: (Rule of importance and 2. Confusion – mixture of liquid things
purpose)
1. Greater value = If they are of unequal value What are the Rules?
2. Greater volume = If they are of equal value 1. Mixture by the will of the owners
3. Greater merits (Art. 467 & 468) a. Rights governed by stipulations
b. Without stipulation: each acquires a right or
When is Separation Allowed? interest in proportion to the value of his
1. Separation without injury (Art.469) material. (Paras, supra, p. 297)
2. Separation with injury – accessory is much 2. Mixture caused by an owner in good faith or by
more precious than the principal; the owner of chance
the former may demand its separation even a. Each share shall still be in proportion to the
though the principal may suffer injury. (Art.469) value of their thing (Santos v. Bernabe, 54
3. Owner of principal in bad faith. (Art.470 (2)) Phil. 19, 1929)
3. Mixed caused by owner in bad faith
a. The actor forfeits his thing;
b. Liable for damages. (Paras, supra, p. 297)
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What is the definition of Specification? lease. They cannot be considered as possessors

Imparting of a new form to the material belonging to nor builders in good faith. (Racaza v. Susan Realty,
another; or the making of the material of another into Inc., GR No. L-20330, 1966); (Vda. De Bacaling v.
a thing of a different kind. (Art. 474) Laguna, GR No. L-26694, 1973); (Santos v. CA, 221
SCRA 42, 1993)
What can be done when a Worker is in Good
Even if the lessor promised to sell, it would not make
Faith? the lessee possessor or builder in good faith so as
One who, in good faith, employs the material of to be covered by the provisions of Art. 448 of the
another in order to make a thing of a different kind NCC, if he improves the land. The latter cannot raise
shall appropriate the thing transformed as his own, the mere expectancy of ownership of the land
indemnifying the owner of the material for its value. because the alleged promise to sell was not fulfilled
(Art. 474) nor its existence even proven. (Jurado, Civil Law
Reviewer, 2008)
What may be done when the Material is of
Greater Value Than the Transformed Thing? The owner of the land on which a building has been
built in good faith by another has the option to buy
The owner of the material may:
the building or sell his land to the builder, he cannot
1. Appropriate the new thing to himself, after refuse to exercise either option. (Sarmiento v.
paying indemnity for the value of the work; or Agana, GR No. L-57288, 1984)
2. Demand indemnity for the material. (Art. 474)
Note: For lessees, do not apply the rules on BPS.
What may be done when the Worker is in Bad Apply Art. 1678 which states: If the lessee makes,
Faith? in good faith, useful improvements which are
The owner of the material shall have the right to: suitable to the use for which the lease is intended,
1. Appropriate the work to himself, without paying without altering the form or substance of the
anything to the worker; or property leased, the lessor, upon termination of the
lease shall pay the lessee one-half of the value of
2. Demand of the latter that he indemnifies him for
the improvements at that time. Should the lessor
the value of the material and the damages he refuse to reimburse said amount, the lessee may
may have suffered. (Art. 474) remove the improvements, even though the
Note: The owner of the material cannot appropriate principal thing may suffer damage thereby. With
the work in case its value, for artistic or scientific regard to ornamental expenses, the lessee shall not
reasons, is considerably more than that of the be entitled to any reimbursement, but he may
material. (Art. 474) remove the ornamental objects, provided no
damage is caused to the principal thing, and the
What are the differences among adjunction, lessor does not choose to retain them by paying
mixture and specification? their value at the time the lease is extinguished.
Owner of the land on which improvement was built
SPECIFICATIO
ADJUNCTION MIXTURE by another in good faith is entitled to removal of
N improvement only after landowner chose to sell the
Involves at Involves at Involves at land and the builder refused to pay for the same.
least 2 things least 2 things least 2 things Where the land’s value is greater than the
As a rule, improvement, the landowner cannot compel the
As a rule, As a rule, co- builder to buy the land. A “forced lease” is then
accessory
accessory ownership created and the court shall fix the terms thereof in
follows
follows principal results case the parties disagree thereon. (Depra v.
principal
Dumlao, GR No. L-57348, 1985)
The new object
May either
The things retains or The right to choose between appropriating the
retain or lose
joined retain preserves the improvement or selling the land on which the
respective
their nature nature of the improvement of the builder, planter or sower stands,
natures
original object is given to the owner of the land (not the court)
(Ballatan v. CA, GR No. 125683, 1999)
Estoppel applies even if the lessor had no title at the
time. The relation of lessor and lessee was created Improvements made prior to the annotation of the
and may be asserted not only by the original lessor, notice of lis pendens are deemed to have been
but also by those who succeed to his title. As made in good faith. After such annotation, P can no
lessees, they knew that their occupation of the longer invoke the rights of a builder in good faith.
premises would continue only for the life of the Should E opt to appropriate the improvements made
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by P, it should only be made to pay for those A: YES. While Supreme Court ruled that Spouses Y
improvements at the time good faith existed to be have no the right to retain the subject lot under
pegged at its current market value. (Carrascoso v. Article 448 as they were aware that their tolerated
CA, GR No. 123672, 2005) possession could be terminated at any time and
thus they could not have built on the subject
The party asserting the status of builder in good property in the concept of an owner, CA and the
faith, must substantiate their claim through lower courts overlooked the fact that Spouses Y
preponderance of evidence. (Padilla, Jr. v. Malicsi, constructed improvements on the subject lot with
G.R. No. 201354, 2016) the knowledge and consent of Spouses X. In
exceptional cases, the Court has applied Article 448
Q: On July 2, 2012, Spouses X sent Spouses Y a to instances where a builder, planter, or sower
letter requiring the latter to vacate the property introduces improvements on titled land if with the
within 30 days from receipt of the letter. knowledge and consent of the owner. While
Spouses Y refused to comply. After Spouses X merely tolerated Spouses Y’s
unsuccessful barangay conciliation possession, the former never denied having
proceedings, Spouses X filed a complaint for knowledge of the fact that the latter possessed,
unlawful detainer and damages against cultivated and constructed various permanent
Spouses Y. Spouses X alleged that they are the improvements on the subject lot for over 34 years.
owners of the 28,772 sqm. lot and that they only (Spouses Belvis v. Spouses Erola, G.R. No.
allowed Spouses Y to possess the lot since they 239727, July 24, 2019)
were close relatives and subject to the
condition that they would vacate the same upon ACTIONS TO RECOVER
demand. On the other hand, Spouse Y claimed OWNERSHIP AND POSSESSION
that in 1979, the subject property was purchased
OF PROPERTY
by the mother of Mr. X and Mrs. Y. but the former,
however, allegedly succeeded in registering the
property solely in his name. Hence, an implied What Are The Actions to Recover Ownership
trust was allegedly created over the undivided and Possession of Real Property and its
hereditary share of Mrs. Y. For over 34 years, Distinction?
Spouses Y alleged that they possessed and
cultivated the lot in the concept of an owner, Accion Reivindicatoria
believing in good faith that they were co-owners
of the subject lot. In the course of their
possession, they allegedly introduced various It must be filed within the same prescriptive period
improvements thereon by planting bamboos, as accion publiciana (10 years) with the proper RTC.
nipa palms and coconut trees, and by It involves both the issue of possession and
constructing fishponds. Spouses Y further ownership, that is:
claimed that Spouses X failed to personally
a) that the plaintiff is the owner of the land or
appear during the barangay conciliation
possessed it in concept of owner; and
proceedings and that their representative, Z, had
no authority to appear on their behalf. MTC b) the defendant dispossessed him of the
ordered Spouses Y to vacate the property and to land.
pay nominal rent until the property is fully
returned. MCTC held that although Spouses Y The person who claims a better right of ownership
claimed that Spouses X failed to personally to the property sought to be recovered must prove
appear during the mandatory barangay two things: first, the identity of the land claimed, and
conciliation proceedings, the Office of the second, his title thereto. As applied in this case,
Punong Barangay nevertheless issued a petitioners utterly failed to prove the identity of the
Certification to File Action in accordance with land they are claiming and also their title thereto. In
Section 412 of R.A. No. 7160. Further, the case fact, the RTC, despite ruling in favor of petitioners
was referred to Philippine Mediation Center by declaring respondents' title to be void, appeared
(PMC) during pre-trial but the parties still failed to be unconvinced of petitioners' claim of ownership
to amicably settle the same. RTC and CA just when it ruled that the parcel of land covered by
reiterated MTC’s decision. Are Spouses Y respondents' titles be reverted to public land.
builders in good faith under Article 448 and thus
have a right to retain the subject lot until As a general rule, the quantum of proof in civil cases
payment of necessary useful and luxurious is preponderance of evidence, which means that the
expenses? evidence adduced by one side is, as a whole,
superior to or has greater weight than that of the
other. It means evidence which is more convincing
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to the court as worthy of belief than that which is in favor of Z. Upon appeal to the SC, the Heirs of
offered in opposition thereto. Even if petitioners X argue that the failure of the Relocation Plan to
were able to present more evidence than indicate the fact that Z had erected any structure
respondents, it does not necessarily mean that they on the subject property is irrelevant because
have preponderant evidence. What is important is temporary structures such as sheds, shanties,
the relative weight or probative value of the and make-shift fences do not need to be
evidence on record. In this case, while it may be true indicated in the plan because they are not
that petitioners have presented a greater number of permanent structures. Was there
testimonial and documentary evidence, such encroachment?
evidence was not enough to discharge petitioners'
burden of proof. A: NONE. The Heirs of X's new theory that the
encroachment committed by Z was by way of
Firstly, it must be noted that while petitioners' main erecting temporary structures fails to convince.
piece of evidence, a mere photocopy of TD No. During the trial, the Heirs of X made it abundantly
27254, might show that Jesus did declare a piece of clear that, in their allegation, that Z encroached on
land under his name for tax purposes as early as the subject property by building houses and
1960, the same does not help in proving that the occupying them. Hence, with the Relocation Plan
land petitioners are claiming is identical to the land submitted as evidence in chief by the Heirs of X
titled to respondents. (J. Hernando: Heirs of incontrovertibly showing that no buildings,
Magsaysay v. Spouses Perez, G.R. No. 225426, enclosures, and other permanent structures were
2021) put up by the respondents on the subject property,
then the same Relocation Plan cannot be
What is Writ of Possession? considered as competent proof that the Lot of X was
An order directing the sheriff to place a successful encroached upon by Z. Heirs of Lupena v. Medina,
registrant under the Torrens system in possession G.R. No.231639, January 22, 2020.)
of the property covered by a decree of the court
What is the Effect of the Lapse of One-Year
Period?
When is Writ of Possession proper? (FEEEL) If the dispossession allegedly took place by any of
a. Foreclosure, judicial or extrajudicial, of such means but the action is not brought within one
mortgage. Provided that the mortgagor has year from deprivation of possession, the action is
possession, and no third party has intervened properly a plenary action of accion publiciana or
b. Ejectment accion de reivindiacion. (Penta Pacific Realty Corp
c. Execution sales v. Ley Construction and Development Corp., GR
d. Eminent domain proceedings 161589, 2014)
e. Land registration cases
What is the General Rule on Writ of Injunction?
What is Writ of Demolition? Generally, not available as a remedy (Reason: The
Necessarily issued with writ of possession presumption is that the one in possession disputably
has the better right)
A boundary dispute must be resolved in the context
of accion reivindicatoria, not an ejectment case. The What is the Exception?
boundary dispute is not about possession, but When injunction is allowed:
encroachment, that is, whether the property claimed 1. Actions for forcible entry
by the defendant formed part of the plaintiff’s a) Writ of preliminary injunction within 10 days
property. (Manalang vs. Bacani, GR No. 156995, from filing of the complaint to restore
2015) plaintiff in possession
b) Courts shall decide within 30 days
Q: The Heirs of X filed a complaint for Recovery
of Possession of Real Property against Z on the 2. Ejectment
ground that Z encroached upon their property. a) If possessor is a possessor in concept of an
Consequently, the Heirs of X hired a geodetic owner (possession de jure) for over a year
engineer to conduct a relocation survey and
and being disturbed by repeated intrusions
prepare a Relocation Plan. However, the
of a stranger
Relocation Plan approved by the Land
Management Bureau did not mention that there b) If an owner, still in possession, desires to
was encroachment, hence the RTC and CA ruled prevent repeated intrusions by a stranger

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c) If the possessor is clearly not entitled to It is a plenary action to recover the real right of
property possession which should be brought in the RTC
within 10 years when dispossession has lasted for
DOCTRINE OF SELF-HELP more than one year.
Article 429. The owner or lawful possessor of a
thing has the right to exclude any person from the Although both ejectment and accion publiciana are
enjoyment and disposal thereof. For this purpose, actions specifically to recover the right of
he may use such force as may be reasonably possession, they have two (2) distinguishing
necessary to repel or prevent an actual or differences. The first is the filing period. Ejectment
threatened unlawful physical invasion or usurpation cases must be filed within one (1) year from the date
of his property. (n) of dispossession. If the dispossession lasts for more
than a year, then an accion publiciana must be filed.
DOCTRINE OF STATE OF NECESSITY The second distinction concerns jurisdiction.
Ejectment cases, being summary in nature, are led
What is the doctrine of State of Necessity? with the MTC. Accion publiciana, however, can only
It is the principle that authorizes the destruction of a be taken cognizance by the RTC. (Eversley Childs
property which is lesser in value to avert the danger Sanitarium v. Spouses Anastacio and Perla
posed to another property the value of which is Barbarona, G.R. No. 195814, 2018)
much greater. (Art. 432)
The issue in an accion publiciana is the "better right
What are the Requisites of State of Necessity? of possession" of real property independently of title.
1. Interference necessary to avert an imminent This "better right of possession" may or may not
danger. proceed from a Torrens title. While there is no
2. Damage to another much greater than damage express grant in the Rules of Court that the court
to property (Art. 432) wherein an accion publiciana is lodged can
provisionally resolve the issue of ownership, there is
ample jurisprudential support for upholding the
What is meant by Comparative Danger? power of a court hearing an accion publiciana to also
Danger must be greater than damage to property. rule on the issue of ownership. The Court clarifies
Consider the economic and sentimental value of the that in an accion publiciana, the defense of
property. (Tolentino, supra, p. 68-69) ownership will not trigger a collateral attack on the
plaintiff's Torrens or certificate of title because the
What is the Measure of Rational Necessity? resolution of the issue of ownership is done only to
The law does not require a person acting in a state determine the issue of possession.
of necessity to be free from negligence or mistake.
He must be given the benefit of reasonable doubt as
to whether he employed rational means to avert the While the RTC could have resolved the issue of
threatened injury. (De Leon, supra, p. 99). ownership provisionally to determine the "better
right of possession," which is allowed in an accion
The owner of the sacrificial property is obliged to publiciana, it was without any power or jurisdiction
tolerate the act of destruction but subject to his to order the reconveyance of the land in dispute
reimbursement by all those who benefited. (De leon, because that can be done only upon a definitive
supra) ruling on the said issue — something that cannot be
done in an accion publiciana. (Heirs of Cullado v.
In case of conflict between the exercise of the right Gutierrez, G.R. No. 212938, July 30, 2019)
of self-help and a proper and licit state of necessity,
the latter prevails because there is no unlawful Accion Interdictal
aggression when a person or group of persons acts
pursuant to the right given in a state of necessity. This is for cases on forcible entry and unlawful
(Tolentino, supra, p. 70) detainer. This summary action is filed with the
proper MTC within 1 year from the forcible entry or
last demand to vacate in the case of unlawful
Accion Publiciana detainer.

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Q: Spouses X filed 2 Civil Cases regarding a detainer case for being moot and academic. Can
parcel of land. The first case was a complaint Corp B’s unlawful detainer case prosper against
for ejectment against Y. The MeTC ruled in favor a public utility corporation granted the power of
Spouses X, and that they were entitled to the eminent domain?
possession of the subject property based on the
sale entered into by Corporation A with them. A: In a case filed by a landowner for recovery of
possession or ejectment against a public utility
The ejectment case was resolved in favor of
corporation granted the power of eminent domain, it
Spouses X. will not prosper. The landowner is denied the
remedies of ejectment and injunction for reasons of
Subsequently, Y filed a Petition for Quieting of public policy, public necessity, and equitable
Title regarding the same parcel of land. The RTC estoppel. The proper recourse is for the ejectment
and CA ruled in favor of Y’s ownership. Hence, court to:
Spouses X argued that there were two 1. Dismiss the case without prejudice to the
previously decided cases resolved in favor of landowner filing the proper action for
them, and it touched upon the same subject recovery of just compensation and
matter as Y’s Petition for Quieting of Title. That consequential damage;
the ejectment case, specifically, is conclusive 2. Dismiss the case and direct the public utility
upon the court a quo with respect to their corporation to institute the proper
ownership over the subject property. Is the expropriation proceedings, pay just
resolution of the ejectment case in favor of compensation and consequential
Spouses X conclusive upon the court with damages, or;
regards to their ownership? 3. Continue with the case as if it is an
expropriation case and determine the just
A: NO. As to the ejectment case, It simply does not compensation and consequential
follow that since the Ejectment Case was ruled in damages, if the ejectment court has
favor of petitioners Sps. X, the latter are conclusively jurisdiction over the value of the subject
deemed the owners of the subject property. property.
Furthermore, the award of rental in arrears is

The only issue for resolution in an ejectment case is
improper because Corp B is only entitled to just
physical or material possession, where the parties compensation and consequential damages. While
to an ejectment case raise the issue of ownership, the award of rental in arrears is proper in unlawful
the courts may pass upon that issue only for the detainer cases, it is not the proper remedy if a public
purposes of determining who between the parties service or utility corporation granted the power of
has the better right to possess the property. Where eminent domain has occupied a privately-owned
the issue of ownership is inseparably linked to that property without first acquiring property thereto in a
of possession, adjudication of ownership is not final negotiated purchase or expropriation proceedings.
and binding, but merely for the purpose of resolving (National Transmission Corp. v. Bermuda
Development Corp, G.R. No. 214782, April 3, 2019)
the issue of possession. (Spouses Pozon v. Lopez,
G.R. No. 210607 (Resolution), [March 25, 2019])
Quieting Of Title
Q: Corp A, a public service corporation granted What is Quieting of Title?

the power of eminent domain, constructed and It is a remedy or proceeding which has for its
energized a 230 KV transmission traversing a purpose an adjudication that a claim of title to realty
property allegedly owned by Corp B. Corp B or an interest thereon, adverse to the plaintiff, is
filed a case for unlawful detainer against Corp A. invalid or inoperative, or otherwise defective and
The trial court ruled in favor of Corp B and
hence, the plaintiff and those claiming under him
ordered Corp A to vacate the subject land,
remove all structures thereon, and pay Corp B may forever be free of any hostile claim. (Baricuatro,
for the reasonable rental until they have vacated Jr. vs CA, GR No. 105902, 2000)
the premises. Corp A appealed and filed a
complaint for expropriation of the same property Note: An action to quiet title only involved real or
subject to the unlawful detainer case. Because immovable property. It does not involve personal or
of the complaint for expropriation, the trial court movable property.
dismissed Corp A’s appeal in the unlawful
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In an action for quieting of title, the plaintiff has the an action may be brought to remove such cloud or
burden to show by preponderance of evidence that to quiet the title.
they have a legal and equitable title to or interest in
the real property subject of the action. Tax
An action may also be brought to prevent a cloud
declarations and receipts are not conclusive
from being cast upon title to real property or any
evidence of ownership or of the right to possess land
interest therein.
when not supported by other evidence. Mere
allegation of open, continuous, and exclusive
possession of the property in dispute without Article 477. The plaintiff must have legal or equitable
substantiation does not meet the requirements of title to, or interest in the real property which is the
the law. (J. Hernando: Viloria v. Heirs of Gaetos, subject matter of the action. He need not be in
G.R. N0. 206240, 2021) possession of said property.
What are the reasons to quiet title? It is thus clear that legal or equitable title to, or
1. Prevent litigation interest in, the real property subject matter of the
2. Protect true title & possession action must be established by the plaintiffs as a
3. Real interest of both parties which requires that prerequisite in order for their action to quiet title to
precise state of title be known. (Paras, supra, p. prosper. (J. Hernando: Viloria v. Heirs of Gaetos,
305) G.R. No. 206240, 2021)
What is an Action to Quiet Title? Moreover, an action of quieting title puts an end to
vexatious litigation in respect to property involved;
An action for quieting of title is essentially a common plaintiff asserts his own estate and generally
law remedy grounded on equity. The competent declares that defendant’s claim is without
court is tasked to determine the respective rights of foundation. (Baricuatro, Jr. v. CA, GR No. 105902,
the complainant and other claimants, not only to 2000)
place things in their proper place, to make the one
who has no rights to said immovable respect and not What is an action quasi in rem?
disturb the other, but also for the benefit of both, so These are suits filed against a particular person or
that he who has the right would see every cloud of persons in respect to the res; may not be brought for
doubt over the property dissipated, and he could the purpose of settling boundary disputes.
afterwards without fear introduce the improvements
he may desire, to use, and even to abuse the Note: An action quasi in rem is against a particular
property as he deems best. But for an action to quiet person or defendant but the judgment is binding on
title to prosper, two indispensable requisites must the whole world.
concur, namely: (1) the plaintiff or complainant has
a legal or an equitable title to or interest in the real Applicable to real property or any interest therein.
property subject of the action; and (2) the deed, The law, however, does not exclude personal
claim, encumbrance, or proceeding claimed to be property from actions to quiet title.
casting cloud on his title must be shown to be in fact
invalid or inoperative despite its prima facie Note: An action to quiet title is imprescriptible if
appearance of validity or legal efficacy. brought by the person in possession of the property.
Otherwise, he must invoke his remedy within the
The requirements find basis in Articles 476 and 477 prescriptive period. (Berico v. CA, GR NO. 96306,
of the Civil Code which state: 1993)
What are the Classifications of Actions to Quiet

Article 476. Whenever there is a cloud on title to real
Title?
property or any interest therein, by reason of any
1. Remedial action – to remove cloud on title
instrument, record, claim, encumbrance or
2. Preventive action – to prevent the casting
proceeding which is apparently valid or effective but
of a (threatened) cloud on the title. (Art.
is in truth and in fact invalid, ineffective, voidable, or
476)
unenforceable, and may be prejudicial to said title,

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REQUISITES A: NO. The two requisites to establish a Complaint

for Quieting of Title were not complied with, namely:
What Are The Requisites of Action to Quiet (a) the plaintiff must have a legal title (i.e., registered
Title? (TICI) ownership), equitable title (i.e., beneficial
1. Plaintiff must have a legal or equitable Title or ownership), or interest in the property subject of the
Complaint; and (b) the deed, claim, encumbrance,
Interest in the real property (Art. 477)
or proceeding allegedly casting doubt over one’s
2. The deed, claim, encumbrance, or proceeding title must be proven to be in truth invalid, void, or
claimed to be casting Cloud on his title must be inoperative despite the prima facie appearance of
shown to be in fact Invalid or inoperative despite validity. X’s heirs also failed to substantiate their
its prima facie appearance of validity or legal allegation that Corp A’s TCTs are spurious. (J.
efficacy (Art. 476) Hernando: Heirs of Eñano v. San Pedro Cineplex
Properties, Inc., G.R. No. 236619, 2022)
Q: Corp A owns a manufacturing plant for pipes
located on a 50,000 sqm land. Corp A’s plant is When Is Quieting Not Applicable?
covered by a valid certificate of title. Mr. X 1. Questions involving interpretation of
contends that Corp A’s plant site encroaches on documents;
his land and showed his own title over it. Corp A 2. Mere written or oral assertions of claims;
found that the title of Mr. X is spurious and so Exceptions:
filed an action for quieting of title. Will the action
to quiet title prosper? (a) If made in a legal proceeding;
(b) If it is being asserted that the instrument of
entry in plaintiff’s favor is not what it purports
A: YES. For an action to quiet title to prosper, the
plaintiff must have a legal or equitable title or interest to be;
in the subject real property; and the deed, claim, 3. Boundary disputes
encumbrance, or proceeding claimed to be casting 4. Deeds by strangers to the title, unless
a cloud on his title must be shown to be in fact invalid purporting to convey the property of the plaintiff
or inoperative despite its prima facie appearance of 5. Instruments invalid on their face
validity or legal efficacy. Corp A holds a legal title 6. Where the validity of the instrument involves
over the plant site. Mr. X’s claim over the same pure questions of law. (Paras, supra, p. 315-
appears to valid by virtue of title but is in fact 316)
spurious. The indispensable requisites for an action
to quiet title are complete. (Filipinas Eslon
Manufacturing Corp. v. Heirs of Llanes, G.R. No. DISTINCTIONS BETWEEN QUIETING TITLE
May 29, 2019) AND REMOVING/PREVENTING CLOUD
How to distinguish an Action to Quiet Title v.

Q: X is the registered owner of a parcel of land
as evidenced by a TCT issued in his name. X had Action to Remove Cloud?
been in open and continuous possession of the ACTION TO ACTION TO
parcel of land since 1966 until his demise in 1987 QUIET TITLE REMOVE CLOUD
when his heirs took possession of the same. In
Procure
2006, however, Corp A filed a Complaint for
Forcible Entry against X’s heirs, claiming that it cancellation,
is the registered owner of the parcel of land release of an
To end vexatious
evidenced by three Transfer Certificate of Titles instrument,
litigation in
(TCTs) and a chronicled chain of transactions encumbrance or
Purpose respect to the
which led to its acquisition of the parcel of land claim in the
from Corp B. X’s heirs then filed a Complaint for property
plaintiff’s title-
Quieting of Title against Corp A, wherein it concerned
which affects the
alleged that Corp A’s titles were fictitious and title or enjoyment of
void as the TCTs in the name of Corp B, from
the property
whom Corp A bought the parcel of land, were
products of a reconstitution proceeding which Plaintiff asserts Plaintiff declares
did not occur in the first place. To prove their own claim and his own claim and
legal or equitable title over the parcel of land, X’s declares that the title, and at the
Nature
heirs also presented, among others, a TCT claim of the same time
issued in the name of X and a Tax Declaration. defendant is indicates the
May the Complaint for Quieting of Title filed by unfounded and source and nature
X’s heirs against Corp A prosper?
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calls on the of the defendant’s 5. Occupancy (i.e.,2 persons catch a wild

defendant to claim, pointing its animal)
justify his claim defects and prays 6. Donation
on the property for the declaration
that the same of its invalidity What are the Kinds of Co-ownership?
may be 1. Ordinary – right of partition exists
determined by 2. Compulsory– no right of partition exists
the court (party wall)
3. Legal – created by law
What is an Action to Remove Cloud? 4. Singular/Particular–over particular/
Intended to procure cancellation, delivery, release of specific thing
an instrument, encumbrance, or claim constituting a 5. Incidental – exists independently of the will
on plaintiff’s title which may be used to injure or vex of the parties
him in the enjoyment of his title 6. Universal – over universal things (co-heirs
7. Contractual- created by contract
What is a Cloud?
It is a semblance of title, either legal or equitable, or Distinctions Between Right
a claim or a right in real property, appearing in some To Property Owned In
legal form but which is, in fact, invalid or which would Common And Full
be inequitable to enforce. (Art. 476) Ownership Over The Ideal
Share
How to determine the Existence of a Cloud? Individual Interest

(AIP) Right to alienate, assign or mortgage own part;
1. Instrument or record or claim or encumbrance or except personal rights like right to use and
proceeding which is Apparently valid or effective; habitation
2. But is, in truth and in fact, Invalid, ineffective,
voidable, or unenforceable, or extinguished (or A co-owner cannot give valid consent to another to
terminated) or barred by extinctive prescription build a house on co-owned property as such an act
3. May be Prejudicial to the title. (Paras, supra, p. would be tantamount to making an alteration in the
302-303) thing owned in common. Entry into the land without
the knowledge of the other co-owners can be
CO-OWNERSHIP categorized as possession by stealth and W’s act of
getting only the consent of one co-owner can be
What is Co-Ownership? considered as “strategy.” Thus, it would be a case
It is a form of ownership, which exists whenever an of forcible entry. (Cruz v. Catapang, GR No. 164110,
undivided thing or right belongs to different persons. 2008)
(Art. 484)
Prior to partition, a sale of a definite portion of
What are the Elements of Co-ownership? (PUI) common property requires the consent of all co-
1. Plurality of subjects – many owners owners because it operates to partition the land with
2. Object of ownership must be Undivided respect to the co-owner selling his or her share. The
3. Recognition of Ideal shares; no one is an owner co-owner or seller is already marking which portion
of a specific portion of the property until it is should redound to his or her autonomous ownership
partitioned. upon future partition. In other words, a co-owner
cannot sell a definite portion of a land without the
consent from his or her co-owners. This is based on
SOURCES OF CO-OWNERSHIP
How is Co-ownership Created? (C-FOLDS) the principle that a sale of a portion of the property
is considered an alteration of the thing owned in
1. Law common, and, therefore, requires the unanimous
2. Contracts consent of the other co--owners. Of course, the law
3. Succession allows a co-owner to alienate an undivided interest
4. Fortuitous event/chance (i.e., commixtion) of the co-owned property. (J. Hernando: Heirs of

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Marquez v. Heirs of Hernandez, GR No. 236826, Contribution For Expenses

2022)
What are the elements of Benefits/ Fruits/
Interest/ Income?
Entire Property
Any co-owner may file an action under Article 487 a) Right to benefits proportional to respective
not only against a third person but also against interest
another co-owner who takes exclusive possession b) Stipulation to contrary is void
and asserts exclusive ownership of the property. c) Right to full ownership of his part and fruits. (Art.
(De Guia vs. CA, GR No. 120864, 2003) 493)
A co-owner can sell an undivided part of the What are the elements Use/ Possession?
property co-owned, but its validity is limited to his
a) Right to use thing co-owned
share. Hence, there is no need for consent of the
b) For purpose for which it is intended
other co-owners as to said sale. (Arambulo v.
c) Without prejudice to interest of ownership
Nolasco, GR No. 189420, 2014) Same rule applies
d) Without preventing other co-owners from
in a mortgage by a co-owner of his share. (Rural
making use thereof. (Art. 486)
Bank of Cabadbaran v. Nulecio-Yap, GR No.
178451, 2014)
What are the rights when it comes to
Management/Administration?
According to Art. 493 of the Civil Code, “each co-
owner shall have the full ownership of his part and a) Right to change purpose of co-ownership by
of the fruits and benefits pertaining thereto, and he agreement. (Art. 486)
may therefore alienate, assign or mortgage it, xxx, b) Right to bring action in ejectment in behalf of
except when personal rights are involved. But other co-owner. (Art. 487)
the effect of the alienation or the mortgage, with c) Right to compel co-owners to contribute to
respect to the co-owners, shall be limited to the necessary expenses for preservation of thing
portion which may be allotted to him in the division and taxes. (Art. 488)
upon the termination of the co-ownership.” Hence, d) Right to exempt himself from obligation of
the effect of the alienation or the mortgage with paying necessary expenses and taxes by
respect to the co-owners, shall be limited, by renouncing his share in the pro indiviso interest;
mandate of the same article, to the portion which but can’t be made if prejudicial to co-ownership.
may be allotted to him in the division upon the (Art. 488)
termination of the co-ownership. A co-owner e) Right to make repairs for preservation of things;
has no right to sell or alienate a concrete, specific, can be made at will of one co-owner; receive
or determinate part of the thing in common to the reimbursement therefrom; notice of necessity of
exclusion of the other co-owners because his right such repairs must be given to co-owners, if
over the thing is represented by an abstract or ideal practicable. (Art. 489)
portion without any physical adjudication. (Ulay v. f) Right to ask for partition anytime. (Art. 494)
Bustamante, GR 231721 & 231722) g) Right of pre-emption
Articles 493-495 and 498 of the Civil Code, in sum, Redemption

allow for alienation by a co-owner of his or her share
What is the Right of Redemption?
in the co-owned property, termination of the co-
The right of redemption is the right of a co-owner to
ownership, and partition of the property. It is a basic
recover or get back any share or interest sold by
principle in the law of co-ownership that no
another co-owner to a stranger or third party. It is an
individual co-owner can claim title to any definite
act of preservation for the benefit of all co-owners.
portion of the land or thing owned in common until
Therefore, the co-owner who redeems during the
the partition thereof. Prior to that time, all that the co-
redemption period may demand reimbursement
owner has is an ideal, or abstract, quota or
from other co-owner who redeems during the
proportionate share in the entire thing owned in
redemption period may demand reimbursement
common by all the co-owners. (J. Hernando: Silva
from other co-owners the latter’s share in the
v. Lo, G.R. No. 206667, 2021)
redemption price or cost of redemption.

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Note: To be exercised within 30 days from written 5. When the legal Nature of the common property
notice of sale of undivided share of another co- does not allow partition
owner to a stranger.
What are the Requisites of Repudiation? (UKEO)
Redemption of the whole property by a co-owner
1. Unequivocal acts of repudiation of the co-
does not vest in him sole ownership over said
ownership amounting to an ouster of the other
property. Redemption within the period prescribed
co-owners
by law by a co-owner will inure to the benefit of all
2. Positive acts of repudiation have been made
co-owners. Hence, it will not put an end to existing
Known
co-ownership. (Mariano v. CA, GR No. L-51283,
3. Evidence is clear and conclusive
1989)
4. Open, continuous, exclusive, notorious
possession.
Co-owners have the right to alienate their pro
indiviso shares even without the knowledge or (Santos v. Heirs of Crisostomo, 41 Phil. 342, 1921)
consent of another co-owner as long as the
alienation covers only their shares interests in the We are not unaware of the basic principle in the law
common property. Under the NCC, each co-owner of co-ownership, both under the present Civil Code
“shall have the full ownership of his party and may as in the Code of 1889, that no individual co-owner
therefore alienate it.” The effect, however, of the can claim title to any definite portion of the land or
alienation with respect to the co-owners shall be thing owned in common until the partition thereof.
limited only to the portion which may be allotted to Prior to that time, all that the co-owner has is an
him in the division upon the termination of the co- ideal, or abstract, quota or proportionate share in the
ownership. (Tabasondra v. Constantino, GR No. entire thing owned in common by all the co-owners.
196403, 2016) (J. Hernando: Silva v. Lo, G.R. No. 206667, 2021)
A co-owner has no right to sell or alienate a Q: A filed a complaint for partition of 8 parcels
of land against B. TCTs all indicate that A and B
concrete, specific or determinate part of the thing
are co-owners of the properties. A based his
owned in common, because his right over the thing right under Article 494 of the New Civil Code. B
is represented by quota or ideal portion without any alleged that while the TCTs reflected A’s name,
physical adjudication. (Cabrera v. Ysaac G.R. No. he was not a co-owner because he never
166790, 2014) contributed to the acquisition and for the
maintenance or taxes of the property. Is A
Partition entitled to the partition of the property.
A: Yes. A is a co-owner. Public documents pointing
General Rule: Demandable Anytime to the existence of co-ownership carry with it the
No co-owner shall be obliged to remain in the co- legal presumption of regularity, thus the opposing
party has the burden of proving with clear,
ownership. Each co-owner may at any time demand
convincing and persuasive evidence to repudiate
the partition of the thing owned in common, insofar the co-ownership. Here, eight certificates of title all
as his share is concerned. (Art. 494) clearly and unequivocally identify petitioner A as one
of the co-owners of the subject properties. In land
Exception: A co-owner may not successfully registration, the certificate of title serves as evidence
demand a partition: (UNLAD) of an indefeasible and incontrovertible title to the
1. If by Agreement (for a period not exceeding 10 property in favor of the person whose name appears
therein. It is the best proof of ownership of a parcel
years, renewable) partition is prohibited. (Art.
of land.
494)
2. When partition is prohibited by a Donor or Further, one's assertion of ownership is further
testator (for a period not exceeding 20 years) – strengthened and buttressed by the fact of
from whom the property came. (Art. 494) possession coupled with the lack of opposition to
3. When partition is prohibited by Law. (Art. 494) such possession. Here, A possesses a portion of the
4. When a physical partition would render the subject property with no opposition by the other
property Unserviceable, but in this case, the parties, aside from B, who disclaimed petitioner A’s
property may be allotted to one of the co- status as co-owner only after more than two
owners, who shall indemnify the others, or it will decades since the execution of the Deed of
be sold, and the proceeds distributed. (Art. 495)
ATENEO CENTRAL
Absolute Sale, and only as a mere reaction to the Note: For acquisitive prescription to run in favor
Complaint for Partition filed by A. of a co-owner, the requisites are:
a) He must have repudiated the co-
Assuming for argument's sake that A did not
contribute in the payment of the purchase price of ownership through unequivocal acts;
the subject properties, it does not necessarily mean b) Such act of repudiation is made known
that he could not become a co-owner of the subject to other co-owners
properties who can compel partition. According to c) Evidence must be clear and convincing
Sec. 1, Rule 69 of the Rules of Court, in relation to 7. Co-owners cannot ask for physical division if it
Articles 484 and 488 of the Civil Code, a person may would render thing unserviceable; but can
exercise the right to compel the partition of real terminate co-ownership. (Art. 495)
estate if he/she sets forth in his/her complaint the 8. After partition, duty to render mutual accounting
nature and extent of his title and subsequently of benefits and reimbursements for expenses.
proves the same. The law does not make a
(Art. 500)
distinction as to how the co-owner derived his/her
title, may it be through gratuity or through onerous 9. Each co-owner has full ownership of his part and
consideration. (Logrosa v. Sps. Azares, G.R. No. of the fruits and benefits pertaining thereto, and
217611, March 27, 2019) he may alienate, assign, or mortgage the portion
which may be allotted to him upon the
Petitioner's recourse of filing a complaint for termination of the co-ownership. It appears that
nullification of sale and recovery of ownership is not while there is a single certificate of title, the three
the proper action. This Court explained in Bailon- lots are distinguishable from each other. (Art.
Casilao v. Court of Appeals that the appropriate 493)
remedy is not a nullification of the sale or for the
recovery of the thing owned in common but a What are the rights and obligations at the end or
division of the common property. To demand a termination of the co-ownership or upon
partition or division of the common property is in partition?
accord with Article 494 of the Civil Code, that is, no 1. Creditors of assignees may take part in
co-owner shall be obliged to remain in the co- division and object if being effected without
ownership and that each co-owner may demand at their concurrence but cannot impugn
any time partition of the thing owned in common unless there is fraud or made
insofar as his or her share is concerned. (J. notwithstanding their formal opposition.
Hernando: Reyes v. Sps. Garcia, G.R. No. 225159, (Art. 497)
2022) 2. Non-intervenors – retain rights of mortgage
and servitude and other real rights and
What are the consent requirements for co- personal rights belonging to them before
owners in acts of preservation, acts of partition was made. (Art. 499)
administration and acts of alteration? While the husband is the recognized administrator
1. Share in charges proportional to respective of the conjugal property under the Civil Code, there
interest; stipulation to contrary is void. (Art. 485) are instances when the wife may assume
2. Pay necessary expenses and taxes – may be administrative powers or ask for the separation of
exercised by only one co-owner. (Art. 490) property. Where the husband is absent and
3. Pay useful and luxurious expenses – if incapable of administering the conjugal property, the
determined by majority wife must be expressly authorized by the husband
4. Duty to obtain consent of all if thing is to be or seek judicial authority to assume powers of
altered even if beneficial; resort to court if non- administration. Thus, any transaction entered by the
consent is manifestly prejudicial. (Art. 491) wife without the court or the husband’s authority is
5. Duty to obtain consent of majority with regard to unenforceable. Being an unenforceable contract,
administration and better enjoyment of the thing; the 2nd Contract is susceptible to ratification. The
majority means majority in the interest not in the husband continued remitting payments for the
number of co-owners; court intervention if satisfaction of the obligation under the questioned
prejudicial – appointment of administrator. (Art. contract. These acts constitute ratification of the
492) contract. (Fabrigas v. San Francisco, GR No.
6. No prescription to run in favor co-owner as long 152346, 2005)
as he recognizes the co-ownership; (Art. 494)

ATENEO CENTRAL
The petitioners' argument that the court erred in

ruling upon the misjoined causes of action for Possession and ownership are distinct legal
annulment of title and partition, since the former is concepts. Ownership confers certain rights to
an ordinary civil action and the latter is a special civil the owner, among which are the rights to enjoy the
action is without merit. Section 6, Rule 2 of the Rules thing owned and to exclude other persons from
of Court explicitly states that a misjoinder of causes possession thereof. On the other hand,
of action is not a ground for the dismissal of an possession is defined as the holding of a thing
action and that a misjoined cause of action may, on or the enjoyment of a right. Literally, to possess
motion of a party or on the initiative of the court, be means to actually and physically occupy a thing with
severed and proceeded with separately. While the or without a right. Thus, a person may be declared
court a quo may have overlooked the misjoined an owner, but he may not be entitled to possession.
actions, such fact is not a ground to assail the (Heirs of Roman Soriano v. CA, GR No. 128177,
validity of the decision or a ground for the dismissal 2001)
of the case. Absent any objection on the pa1i of the
petitioner or a directive from the court a quo for the What is the subject of possession?
annulment of title and partition to proceed
separately, both causes of action were validly General Rule: Subject of possession are things
adjudicated upon, considering that the court has or rights which are susceptible of being appropriated
jurisdiction over both causes of action. (J. (Art.530)
Hernando: Delmolin-Paloma v. Delmolin-Magno,
G.R. No. 237767, 2021) Exceptions:
1. Res communes
POSSESSION 2. Property of public dominion
3. Discontinuous servitudes
What is possession? 4. Non-apparent servitudes
Possession is the holding of a thing or enjoyment of 5. Things specifically prohibited by law
a right. (Art. 523)
What are the degrees of possession?
What are the viewpoints of Possession
1. Possession without title and in violation of
1. Right TO possession (jus possidendi) right of owner (grammatical degree)
Possession de facto - right or incident of a. Ex. possession of a thief
ownership 2. Possession with juridical title (juridical
2. Right OF possession (jus possessionis) possession); juridical relation exists
Possession de jure – this is an independent between the possessor and the owner
right of itself, independent of ownership
Ex. that of a lessee, pledge,
depositary, usufructuary
3. Possession with just title but not from true
What are the elements of possession? (OIR) owner, such that of a possessor in good
1. Occupancy or control of the thing or right – faith (possessory right)
actual or constructive (corpus) Ex. When a buyer acquires a thing
2. Intent to Possess (animus possidendi) from the seller who was not the true owner
3. Must be by virtue of one’s own Right or could not transmit rights.
4. Possession with title in fee simple or
What is the extent of possession? possession with title of dominion
1. Physical/actual – occupancy in fact of the - This is the highest degree of
whole or at least substantially the whole possession.
2. Constructive – occupancy in part in the
name of the whole under such How is possession acquired from the viewpoint
circumstances that the law extends the of a possessor?
occupancy to the possession of the whole 1. Personal
a. Intent to possess
What is the difference between possession and b. Capacity to possess
ownership?
ATENEO CENTRAL
c. Object must be capable of being

possessed Possession in good faith – not aware of any flaw or
2. Through authorized person (agent or legal defect in his title or mode of acquisition
representative)
a. Intent to possess for principal (not Possession in bad faith – aware that there exists in
for agent) his title or mode of acquisition some flaw or defect
b. Authority or capacity to possess
(for another)
c. Principal has intent and capacity to What is a possessor in good faith?
possess Possessor in Good Faith is one who is not aware
3. Through Unauthorized person (but only if that there exists a flaw in the title or mode which
subsequently ratified) invalidates it. (Art. 526)
a. Intent to possess for another (the
principal)
What is a possessor in bad faith?
b. Capacity of “principal” to possess
c. Ratification by principal Possessor in Bad Faith is one who is aware of
defect. (Art. 526)
Possession In The Concept

of a Holder When does bad faith begin?
A possessor in good faith may become possessor in
Possession in the concept of holder – possessor bad faith when he becomes aware of the flaw in his
acknowledges that another is an owner (e.g., title or mode of acquisition.
usufruct, lessee, depositary, bailee in
commodatum)
What is the basis of good faith?
Possession In The Concept Mistake upon a doubtful/difficult question of law may

of an Owner be the basis of good faith (Art. 526; Kasilag v.
Rodriguez, GR No. 46623, 1939)
Possession in the concept of an owner (Adverse
Possession) – possession by the owner himself or Who has the burden of proof to prove bad faith?
adverse possessor
Good faith is always presumed. Burden of proof lies
on the one alleging bad faith. The belief must be a
What are the effects of possession in the
reasonable, not capricious, one.
concept of an owner?
1. May be converted into ownership through
acquisitive prescription Possession is presumed to be enjoyed in the same
- Movables: 4 or 8 years character in which it is acquired, until contrary is
- Immovables:10 or 30 years proven. (Art. 527)
o Imprescriptible when there is
Torrens certificate title over land
2. Bring actions necessary to protect possession; What is the difference between a possessor in
3. Ask for inscription of possession; good faith and a possessor in the concept of an
4. Demand fruits and damages from one owner?
unlawfully detaining property.
While the possessor in good faith is the one who
believes he is the owner, the possessor in the
Note: Possessor in the concept of owner has in
concept an owner is one who acts as if he is the
his favor the legal presumption that he
owner.
possesses with just title. Burden of proving just
title is on the plaintiff who seeks the recovery of
property. (Art. 541) What are the effects of bad faith of decedent on
the heir/s?
Relevance of Good Faith
And Bad Faith
ATENEO CENTRAL
General Rule: Heir shall not suffer the

consequences of the wrongful possession of the
decedent (bad faith is personal)
Exception: When he becomes aware of the flaws
affecting the decedent’s title
Note: It doesn’t matter whether the “facts” which

show that the possessor is not unaware that he
possesses thing properly/improperly is caused by
him or by some other person
Interruption of good faith may take place at:

1. The date of summons; or
2. That of the answer if the date of summons
does not appear.
Effects of possession in good faith is counted only
from the date of the decedent’s death (Art. 534)
Rules For Movables
What are the requisites for possession of

movables?
1. Good faith
2. Owner voluntarily parted with the possession of
the thing
3. In the concept of owner
What are the rights of legal possessor?

Right to be respected in his possession; if disturbed,
he shall be protected or restored by means
established by laws.
What are the legal presumptions in favor of

possessor?
1. Possessor who recovers possession
unjustly lost shall be deemed to have
enjoyed it without interruption. (Art. 561)
This is important for purposes of acquisitive
prescription.
2. Legal presumption of just title (prima facie)
and he is not obliged to show or prove it
(Art. 541)
3. Possession of real property presumes that
movables are included (Art. 542)
4. Co-possessor deemed to have exclusively
possessed part which may be allotted to
him; interruption in whole or in part shall be
to the prejudice of all (Art. 543)

ATENEO CENTRAL
RULES ON FRUITS
Kinds of Fruits Possessor in Good Faith Possessor in Bad Faith
1. Civil Fruits Entitled to fruits from start of Not entitled to fruits.

possession until legal interruption.
Must pay damages as rental from time
possession started until possession
is finally defeated.
2.Natural/Industrial
Fruits
a. Gathered Right to retain fruits. Must account for fruits and return value
of: (i) fruits actually received and
(ii) fruits which the legal possessor
could have received with due care
and diligence.
Must pay damages as reasonable rent

for the term of possession.
But entitled to necessary expenses for

preservation, cultivation and gathering
of the fruits.
b. Pending Owner has 2 options:
Option 1: Pro-rating (based on No rights, not even reimbursement of

period of possession) between expenses for cultivation (because
possessor and owner of: (i) by right of accession, all fruits belong to
expenses; (ii) net harvest; and owner without need to pay indemnity).
(iii) charges.
Must pay damages as reasonable rent
Option 2: To allow possessor to for the term of possession.
stay in possession until after
all fruits are gathered (which shall
serve as the indemnity for
expenses).

ATENEO CENTRAL
2. Useful Owner has 2 No rights.

What is possession as a fact?
Expenses options:
Possession as a fact cannot be recognized at the
same time in two different personalities (Art. 538)
Option 1:
Reimbursem
What are the exceptions? ent of either
1. Co-possessor – there is no conflict of interest, (i) amount
both of them acting as co-owners, as in the case spent or (ii)
of property owned or possessed in common increase in
2. Possession of different concepts or different value with
right of
degrees
retention until
full payment.
What are the rules in case of conflict or dispute
regarding possession? Option 2: To
1. Present possessor shall be preferred allow posses
2. If there are 2 possessors, the one longer in sor to
possession remove prov
ided no
3. If the period of possession is the same, the one
substantial d
who presents oldest title;
amage or
4. If both present a title, the Court will determine. injury is
(Meantime, the thing shall be judicially caused.
deposited.) (Art. 538)
3. Luxurious Owner has 2 Owner has 2
What are the rules on expenses and Expenses options: options:
deterioration/loss?
Option 1: To Option 1: To
Expenses Possessor in Possessor in allow posses allow posse
Good Faith Bad Faith sor to ssor to
remove orna remove orna
1. Entitled to Entitled to ments if the ments if the
Necessary reimburseme reimburseme principal suff principal suff
Expenses nt. nt. ers no injury. ers no injury.
Right of No right of Option 2: To Option 2: To

retention retention; retain retain
pending full must vacate the ornamen the ornamen
reimburseme property t by refunding t by
nt. (recourse the amount refunding
is to file spent for the value of
collection the ornamen the ornament
case). t. at the time
owner enters
Liable for into possess
damages ion (which
as reasonab means depr
le rent for eciated
period of value).
possession.

ATENEO CENTRAL
Note: If owner acts negligently or voluntarily parts

4. No liability Always liable
with the thing owned, then he cannot recover from
Deterioratio unless due whether bef
n/Loss to fraudulent ore or after possessor.
intent service
or negligenc of judicial Summary of Recovery or Non-Recovery
e after summons, for Principle
service any cause, Owner may a) Possessor in bad faith
of judicial even
recover without b) Possessor in good faith
summons. fortuitous ev
ent. reimbursement (if owner had lost the
property or been
unlawfully deprived of it)
When is a notice of lis pendens proper? the acquisition being
In The Following Cases: (PORC-Q) from a private person
1. Action to Recover possession of real estate (Art. 559)
2. Action to Quiet title Owner may If possessor acquired the
3. Action to remove Clouds recover but object in good faith at a public
4. Action for Partition must reimburse sale or auction; owner to pay
the possessor the price paid.
The identity of the property and the title of the Owner cannot If possessor acquired it in
claimant must be ascertained in an action to recover recover, even if good faith by purchase from a
possession of real property pursuant to Article 434 he offers to merchant’s store/ fairs/
of the Civil Code. (J. Hernando: Gemina v. Heirs of reimburse markets in accordance with
Espejo, Jr., G.R. No. 232682, 2021) (whether or not Code of Commerce & Special
the owner had laws
lost or been
To prove his ownership over the lot, Jesus
unlawfully a) if owner is by his conduct
presented Tax Declaration No. 13163-A in his
deprived) precluded from denying
name. He likewise presented two Certificates issued
by the Office of the Municipal Treasurer of Sibonga, the seller’s authority to
Cebu declaring him as owner of the subject land and sell
that he has been paying realty taxes thereon as
early as 1980. Indeed, while the tax declaration is b) if seller has voidable title
not conclusive proof of ownership of Jesus over the which has not been
subject land, it is an indication however that he avoided at the time of
possesses the property in the concept of an owner sale to the buyer in good
for nobody in his or her right mind would be paying faith for value and without
taxes for a property that is not in his or her actual or notice of the seller’s
constructive possession. (J. Hernando: Sps. defect in title
Eugenio Ponce and Emiliana Nerosa v.
AldaneseG.R. No. 216587, 2021) c) if recovery is no longer
possible because of
prescription
Possession in Good Faith - Equivalent to Title
One who has lost or has been unlawfully deprived d) if sale is sanctioned by
of it may recover the thing from whomever statutory or judicial
possesses it, ordinarily, w/o reimbursement. (Art. authority
559)
e) if possessor obtained the
What must the owner prove? goods because he was
1. Ownership of the thing an innocent purchaser for
2. Loss or unlawful deprivation or bad faith of the value and holder of a
possessor negotiable document of
title to the goods

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d. Obligation of conserving or preserving the

In Republic v. Roasa, the Court clarified that a form and substance (value) of the thing
possessor or occupant of property may be a c. Accidental – those which may be present or
possessor in the concept of an owner prior to the absent depending upon the stipulation of the
determination that the property is alienable and parties
disposable agricultural land. Thus, the computation a. Whether it be a pure or a conditional usufruct
of the period of possession may include the period b. The number of years it will exist
of adverse possession prior to the declaration that c. Whether it is in favor of one person or
the land is alienable and disposable. Though at the several, etc. (Paras, supra, p. 572)
time of his application, the subject property was not
yet classified as alienable and disposable, the
subsequent declaration thereof should be
What are the rules regarding usufruct?
considered in Antero's favor whose free patent
1. Usufruct can be constituted even if the object is
application was still pending and subsisting at that
subject to Mortgage
time and is not canceled up to this time. (J.
2. Usufruct cannot be constituted on an object
Hernando: Valdez v. Heirs of Catabas, G.R. No.
subject to Pledge
201655, 2020)
3. Usufruct can be constituted on an object
subjected previously to a Lease
USUFRUCT 4. Usufructuary can lease out the property to other
parties
What is a usufruct? 5. Usufructuary can construct improvements over
Usufruct – is the right to enjoy temporarily the property subject to usufruct
property of another with the obligation of preserving
its form and substance, unless the title constituting How is usufruct constituted?
it or the law otherwise provides (Art. 562) 1. Legal Usufruct – but is not evident in today’s
laws
Note: The right of the usufructuary includes the right 2. Will of parties (act inter vivos or last will)
to use (jus utendi) and the right to fruits (jus fruendi), 3. By Prescription (Art. 563)
while the owner retains the right to alienate or
encumber (jus disponendi) the property. Rights And Obligations of
Usufructuary
Note: The only right of ownership retained by the
naked owner is jus disponendi or right to dispose, What are the rights of the usufructuary as to the
alienate or encumber. The usufructuary may property and its fruits?
actually have all the other rights of ownership. This 1. To receive all the natural, industrial, and civil
is what makes usufruct different from lease. Look at fruits of the property.
articles 578 and 610. 2. To enjoy any increase which the thing in usufruct
may acquire through accession and servitudes
What are the characteristics or elements of established in its favor. (Art. 571)
usufruct? 3. To personally enjoy the thing in usufruct or to
a. Essential – those without which it cannot be lease it to another, subject to the period of the
termed usufruct usufruct.
a. A real right, whether registered in the 4. To bring an action for recovery of the property,
Registry of Property or not; and to oblige the owner to authorize him for the
b. Of a temporary nature or duration purpose and to provide him the necessary
c. Purpose: to enjoy the benefits and derive proofs. (Art. 578)
all advantages from the object as a 5. To make useful improvements or expenses for
consequence of normal use or exploitation pleasure without right of compensation and to
b. Natural – that which ordinarily is present, but a remove the improvements provided no damage
contrary stipulation can eliminate it because it is is caused to the property in usufruct.
not essential

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6. To set-off the improvements against any

damage the usufructuary may have caused to What are the rights of the usufructuary as to the
the property. usufruct itself?
1. To alienate the right of usufruct subject to its
What is the rule regarding the right of a period. (Art. 572)
usufructuary to receive all natural, industrial, 2. To exercise the right of a co-owner with respect
and civil fruits of the property? to the administration and collection of fruits from
a. Fruits growing at the beginning of the the co-owned property, and after the partition
usufruct belong to the usufructuary. from his share.
Note: No necessity of refunding the owner for What is the rule regarding the right to transfer
expenses incurred but without prejudice to the right usufructuary rights?
of 3rd persons. (Ex. if the fruits had been planted by a. It is either gratuitous or onerous;
a possessor in good faith, the pending crop b. It is coterminous with term of usufruct;
expenses and charges shall be pro-rated between c. It cannot do acts of ownership such as
said possessor and the usufructuary) alienation or conveyance except when
property is:
i. Consumable
b. Fruits growing at the end of usufruct belong ii. Intended for sale
to the owner. iii. Appraised when delivered; if not
appraised and consumable – return
Note: The owner must reimburse the usufructuary same quality (mutuum)
for ordinary cultivation expenses and for seeds and
similar expenses, from the proceeds of the fruits.
What are the rights of the usufructuary as to
advances and damages?
Rights of innocent third parties should not be
1. To be reimbursed for advances for
prejudiced (Arts. 566-569)
extraordinary repairs and expenses on the
property, and for taxes on the capital
c. Civil fruits accruing daily belong to the
2. To retain the property until he reimbursed for
usufructuary in proportion to the time the
such advances
usufruct may last. (Art. 559)
3. To be respected in his usufruct in case of
alienation of the property by the owner, and to
Note: Both stock dividends and cash dividends are be indemnified for damages caused to it by
considered civil fruits. latter.
What is the rule regarding the usufructuary’s

right to personally enjoy the thing in usufruct or What are the other rights of the usufructuary?
to lease it to another, subject to the period of the 1. Right to hidden treasure as stranger (not
usufruct? entitled as owner but as finder; if somebody else
is the finder, usufructuary gets nothing) (Art.
General Rule: The lease expires at the end of the 566)
usufruct or earlier 2. Right not exempt from execution and can be
sold at public auction by owner
Exception: In the case of leases of rural lands which 3. Naked owner still has rights but w/o prejudice to
continues for the remainder of the agricultural year; usufructuary;
a. may still exercise act of ownership –
Note: If the usufruct should expire before the bring action to preserve ownership
termination of the lease, he or his heirs and 4. Right to necessary expenses from cultivation at
successors shall receive only the proportionate end of usufruct
share of the rent that must be paid by the lessees. 5. Right to make use of dead trunks of fruit bearing
(Art 568) trees and shrubs or those uprooted/cut by
If the naked owner allows the lease to continue even accident but obliged to plant anew
after the expiration of the usufruct, he will be entitled 6. Right of usufructuary of woodland –
to the rentals pertaining to such extension.

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a. ordinary cutting as owner does Caucion Juratoria is a promise under oath to deliver:
habitually or custom of place; 1. Furniture necessary for the use of the
b. cannot cut down trees unless it is for usufructuary
the restoration of improvement of 2. House included in the usufruct
things in usufruct 3. Implements, tools and other movable property
c. must notify owner first necessary for an industry or vocation for which
7. Right to leave dead, uprooted trees at the he is engaged (Art. 587)
disposal of owner with right to demand that
owner should clear and remove them
When may the usufructuary be excused from
a. if caused by calamity or extraordinary
fulfilling his/her obligation?
event
b. impossible or too burdensome to a. If allowed by owner
replace them b. If not required by law or no one will be
8. Right to oblige owner to give authority and injured
furnish him proofs if usufruct is extended to c. When the usufructuary is the donor of the
recover real property or real right or any property or
movable property d. When there is a stipulation in a will or
9. Right to demand the increase in value of contract
property if owner did not spend for extraordinary
repairs; when urgent and necessary for In case the naked owner refuses to make the
preservation of thing (Arts. 570-582) exemption, appeal may be made to the courts and
Note: When a usufructuary introduces useful the judge should consider all the circumstances in
improvements which he can remove without deciding whether or not to give the grant.
damage, but the owner wants to retain them and What is the rule when usufructuary fails to give
offers to reimburse him, the usufructuary prevails. security?
Reason: The right of removal is granted to him by Owner may demand that:
the law. The rule is different from that in Art 546 and 1. Immovables be placed under administration;
548 2. Negotiable instruments can be converted into
registered certificates or deposited in bank;
3. Capital and proceeds of sale of movables be
What are the obligations of the usufructuary? invested in safe securities;
4. Interest on proceeds or property under
1. Pay expenses to 3rd persons for cultivation and administration belong to usufructuary;
production at beginning of usufruct; those who 5. Owner may retain property as administrator
have right to fruits should reimburse expenses with an obligation to deliver fruits to
incurred (Art. 567) usufructuary until he gives sufficient security;
2. Generally, usufructuary has no liability when 6. Effect of security is retroactive today he is
due to wear and tear, thing deteriorates, obliged entitled to fruits.
to return in that state; except when there is fraud
or negligence, then he shall be liable (Art. 573) Note: Unless exempted by owner.
What are the obligations of the usufructuary What are the obligations of the usufructuary
before the usufruct begins? during the usufruct?
To make an inventory of the property and to give 1. To take care of the property as a good father of
security for the fulfillment of his obligation. (Art. 583) the family. (Art. 589)
But may be excused when no one will be injured 2. To answer for damages to the property caused
thereby. (Art. 585) by a person to whom he has alienated or leased
his right of usufruct. (Art. 590)
Note: Not applicable to parents who are 3. To make ordinary repairs, and to notify the
usufructuary of children except when 2nd marriage owner of the urgent extraordinary repairs which
contracted. shall be at the latter’s expense. (Art. 592-593)
What is Caucion Juratoria?

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4. To permit works and improvements by the 1. Extraordinary expenses; usufructuary obliged

owner on the property not prejudicial to the to inform owner when urgent and there is the
usufruct. need to make them
5. To pay annual taxes and charges on the fruits 2. Expenses after renunciation of usufruct
and to pay interest on taxes on capital when 3. Taxes and expenses imposed directly on
such taxes have been paid by the owner. (Art. capital
596-597) 4. If property is mortgaged, usufructuary has no
6. To notify the owner of any prejudicial act obligation to pay mortgage; if attached, owner
committed by third persons, and he shall be to be liable for whatever is lost by usufructuary
liable should he not do so, for damages, as if it 5. If property is expropriated for public use – owner
was caused through his own fault. obliged to either replace it or pay legal interest
7. To pay for court expenses and costs regarding to usufructuary of net proceeds of the same
the usufruct.
8. Insurance Classes of Usufruct
What are the obligations of the usufructuary at What are the kinds of usufruct?
the termination of the usufruct? 1. As to the extent of the usufruct –
1. To return the property in usufruct unless the a. On the whole of the thing; or
usufructuary has a right of retention. (Art. 612) b. A part of the fruits of the thing
9. To pay legal interest on the expenses for 2. As to the number of usufructuaries –
extraordinary repairs made, and the proper a. One; or
interest on taxes paid by the owner. (Art. 594 & b. More persons, either:
597) i. Simultaneously (at the
same time); or
ii. Successively (one after
What are the other obligations of the
the other)
usufructuary?
3. As to the presence of conditions –
1. If usufruct is constituted on animals –
a. Purely; or
a. The usufructuary is duty bound to
b. Conditionally
replace dead animals that die from
4. As to the object –
natural causes or became prey;
a. Things; or
b. If all of them perish w/o fault but due to
b. Rights, provided it is not strictly
contagious disease / uncommon event
personal or intransmissible (Art.
i. deliver remains saved
564)
c. if perish in part due to accident
i. continue on remaining portion
What is a quasi-usufruct?
d. if on sterile animals – as if fungible
A quasi-usufruct is a usufruct constituted on
i. replace same kind & quality consumable objects
(Arts. 583-602)
If the thing was appraised when delivered: The
What are the rights of the naked owner? usufructuary shall have the right to make use of the
1. Alienate thing (Art. 581) consumable things, as well as pay its value at the
2. Cannot alter form or substance (Art. 581) termination of the usufruct.
3. Cannot do anything prejudicial to usufructuary
(Art. 581) If the thing was not appraised when delivered: the
usufructuary shall have the right to return the same
4. Construct any works and make any
quantity and quality, or pay their current price at the
improvement provided it does not diminish
time the usufruct ceases. (Art. 574)
value or usufruct or prejudice right of
usufructuary (Art. 595) What are the kinds of usufruct as to origin?
1. Legal – created by law such as usufruct of
What are the obligations of the naked owner? parents over the properties of their
unemancipated children
2. Voluntary or conventional

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a. Created by will of the parties either by the right to make use thereof in accordance with the
act inter vivos as in contract or purpose for which they are intended, and shall not
donation; or be obliged to return them at the termination of the
b. Act mortis causa as in a last will and usufruct except in their condition at that time; but he
testament shall be obliged to indemnify the owner for any
3. Mixed – created by law and by will of the parties deterioration they may have suffered by reason of
4. Prescriptive – is one acquired by a third person his fraud or negligence. (Art. 573)
through continuous use of the usufruct for the
period required by law (Art. 563). What are the rules regarding abnormal
usufruct?
What are the kinds of usufruct as to quantity or a. If deterioration is through normal use:
extent? i. The usufructuary is NOT responsible
1. As to fruits 1. He can return them in the
a. Total condition they might be in at the
b. Partial termination of the usufruct
2. As to object 2. There is no necessity for him to
a. Universal – if over the entire make any repairs to restore
patrimony them to their former condition
b. Particular/Singular - if only for they can be preserved
individual things are included without the necessity of repairs
3. Failure to return the thing will
result in indemnification for the
What are the kinds of usufruct as to the number
value the object may have at
of persons enjoying the right?
the end of the usufruct
1. Simple – if only one usufructuary enjoys the right
b. If deterioration through an event or act
2. Multiple – if several usufructuaries enjoy the
that endangers their preservation
right
i. Even though there was no fault or
c. Simultaneous – at the same time
negligence or fraud on the part of the
d. Successive – one after the other
usufructuary, he is still required to
Note: In this case, if the usufruct is created by
make necessary ordinary repairs
donation, all the donees must be alive, or at
c. If deterioration because of fraud (dolo
least already conceived, at the time of the
incidente or fraud amounting to an
perfection of the donation.
evasion of the obligation to preserve)
or negligence
What are the kinds of usufruct as to the quality i. The usufructuary is responsible, but
or kind of objects involved? such liability may be set off against
1. Usufruct over rights – improvements
a. Rights must not be personal or
intransmissible in character, so present or
What is a quasi-usufruct?
future support cannot be an object of
Whenever the usufruct includes things which cannot
usufruct
be used without being consumed, the usufructuary
b. Usufruct over things shall have the right to make use of them under the
c. Normal (or perfect or regular) – this obligation of paying their appraised value at the
involves non-consumable things where the termination of the usufruct, if they were appraised
form and substance are preserved when delivered. In case they were not appraised, he
d. Abnormal (or imperfect or irregular) – shall have the right to return at the same quantity
involves consumable things and quality, or pay their current price at the time the
usufruct ceases. (Art. 574)
What is an abnormal usufruct?
What are the rules for quasi-usufructs?
Whenever the usufruct includes things which,
without being consumed, gradually deteriorate
through wear and tear, the usufructuary shall have

ATENEO CENTRAL
a. The usufructuary (debtor-borrower) can use What are the rules in case of multiple usufruct?
them (as if he is the owner, w/ complete right of If constituted simultaneously: All the usufructuaries
pledge or alienation) must be alive (or at least conceived) at the time of
b. BUT at the end of the usufruct, he must: constitution. It is the death of the last survivor which,
1. Pay the appraised value, if appraised when among other causes, terminates the usufruct.
1st delivered
2. If there was no appraisal, return same kind, If constituted successively: If the successive
quality, & quantity OR pay the price current usufructs were constituted by virtue of donation, all
at the termination of the usufruct the donee-usufructuaries must be living at the time
of the constitution- donation of the usufruct.
What are the kinds of usufruct as to terms or
conditions? If the successive usufructs were constituted by
1. Pure usufruct – no term or condition virtue of a last WILL, there should be 2 successive
2. With a term or period usufructuaries, and both must have been alive (or at
a. Ex die – from a certain day least conceived) at the time of the testator's death.
b. In diem – up to a certain day (Article 611)
c. Ex die in diem – from a certain day
up to a certain day Example:
d. With a condition Q: If a usufruct is constituted in favor of 10
usufructuaries, and 4 of them die, will 4/10 of the
Extinguishment of The usufruct (corresponding to the share of the 4 dead
Usufruct usufructuaries) accrue to the naked owner or will
they accrue in favor of the 6 surviving
How is usufruct extinguished? usufructuaries?
Ans: They will accrue in favor of the 6 surviving
Extinguishment of Usufruct: (PLDTERM) usufructuaries for the simple reason that the
1. Prescription – use by 3rd person usufruct continues up to the death of the last
2. Termination of right of person constituting survivor.
usufruct
3. Total Loss of thing What are other important points regarding
4. Death of usufructuary – unless contrary clearly extinction, termination, and extinguishment of
intention appears usufruct?
5. Expiration of period of usufruct for which it was 1. Loss in part – remaining part shall continue to be
constituted or by the fulfillment of any resolutory held in usufruct (Art. 604)
condition provided in the title creating the 2. Usufruct cannot be constituted in favor of a town,
usufruct corporation, or association for more than 50
6. Renunciation of usufructuary – express years (Art. 605)
7. Merger of usufruct and ownership in the same 3. Usufruct constituted on immovable whereby a
person (Art. 603) building is erected – and building is destroyed –
right to make use of land and materials
What happens to the usufruct if it is the naked 4. If owner wishes to construct a new building – pay
owner who dies? usufructuary the value of interest of land and
Death of naked owner does not extinguish the materials
usufruct. (Art. 603) 5. Both share in insurance if both pay premium; if
owner only – then proceeds will go to owner only
What are the rules in case of death of a (Arts. 607-608)
usufructuary in successive usufruct and 6. Effect of bad use of the thing – owner may
simultaneous usufruct? demand the delivery of and administration of the
A usufruct constituted in favor of several persons thing with responsibility to deliver net fruits to
living at the time of its constitution shall not be usufructuary at termination of usufruct (Art. 610)
extinguished until death of the last survivor. (Article 7. Thing to be delivered to owner with right of
611) retention for taxes and extraordinary expenses

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w/c should be reimbursed, security of mortgage e. Both may ordinarily be alienated or transmitted
shall be cancelled (Art. 612) in accordance with formalities set by law (Paras,
supra, p. 575)
In case of expropriation: when naked owner alone
was given indemnity - he has the option to replace EASEMENTS
with equivalent thing or pay usufructuary legal
interest; usufructuary alone was paid – must give to What does easement/servitude mean?
naked owner and compel return of interest; if both – Meaning of easement/servitude
each own indemnity, the usufruct extinguished (Art. 1. It is an encumbrance enjoyed by or in favor
609) of an immovable called dominant estate
upon another immovable burdened by it
If the builder is a usufructuary, his rights will be called the servient estate. (easement of
governed by Arts. 579 and 580. In case like this, the common law, Art. 613).
terms of the contract and the pertinent provisions of 2. Or in favor of a community or a person to
law should govern. By express provision of law, the whom the servient estate does not belong
usufructuary, does not have the right to (servitude of civil law, Art. 614)
reimbursement for the improvements they may have Note: The first is called a real easement. The
introduced on the property. (Moralidad vs. Parnes, second is called a personal easement.
GR No. 152809, 2006)
An easement or servitude is a real right on another’s
How is usufruct distinguished from easement? property, corporeal and immovable, whereby the
(Paras, supra, p. 574) owner of the latter must refrain from doing or
USUFRUCT EASEMENT allowing somebody else to do or something to be
done on his or her property, for the benefit of
May be real or
another person or tenement. (Pilar Development
personal
Corporation v. Dumadag, GR No. 194336, 2013)
property. Can Involves only
Object
also be on rights, real property
but not personal Characteristics
rights
What can be What are the characteristics of easement?
enjoyed here are Limited to a 1. A real right – an action in rem is possible
Extent against the possessor of the servient estate
all uses and fruits particular use
of the property 2. Imposable only on another’s property
3. Jus in re aliena – real right that may be
Cannot be
May be alienated although the naked ownership is
constituted on an
constituted in maintained
easement; but it
favor or, or 4. Limitation or encumbrance on the servient
Coverage may be
burdening, a estate for another’s benefit
constituted on the
piece of land 5. There is inherence or inseparability from the
land burdened by
held in usufruct estate to which it belongs
an easement
a. Easements are inseparable from the estate
Not to which they actively or passively belong
Usually
extinguished by (Art. 617); they are transmissible, cannot be
Effect of extinguished by
the death of the alienated or mortgaged independently of the
death death of
owner of the estate, or assigned to another immovable.
usufructuary
dominant estate 2. It is indivisible (even if the tenement be divided)
a. Partition of either the servient or dominant
What are the similarities between usufruct and estate between two or more persons does
easement? not affect the existence of the easement
1. Both are real rights 3. It is intransmissible (unless the tenement
d. Both rights may be registered, provided that affected also be transmitted)
usufruct involves real property

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4. It is perpetual (as long as the dominant and considered continuous; easement of light and
servient estate exists unless sooner view is also continuous.
extinguished by the causes enumerated in the 2. Discontinuous – used at intervals and depend
law). (Paras, supra, p. 646-647). upon the acts of man (e.g., right of way because it
can only be used if a man passes). (Art. 615)
What is the difference between inseparability of
easement and indivisibility of easement? What are the kinds of easements according to
Inseparability of easement provides that here can be whether or not their existence is indicated?
no easement without the immovable to which they 1. Apparent – made known and continually kept in
are attached while indivisibility of easement view by external signs that reveal the use and
provides that: enjoyment of the same (Ex. right of way when
1. If the SERVIENT ESTATE is divided there is an alley or a permanent path). (Art. 615)
between two or more persons, the 2. Non-apparent – show no external indication of
easement is not modified, and each of them their existence (Ex. easement of not building to
must bear it on the part which corresponds more than certain height). (Art. 615)
to him.
2. If it is the DOMINANT ESTATE that is What is the Doctrine of Apparent Sign?
divided between two or more persons, each The existence of an apparent sign of easement
of them may use the easement in its between two estates, established or maintained by
entirety, without changing the place of its the owner of both, shall be considered, should either
use, or making it more burdensome in any of them be alienated, as a title in order that the
other way. (Articles 617 and 618) easement may continue actively and passively,
unless, at the time the ownership of the two estates
Kinds of Easements is divided, the contrary should be provided in the title
of conveyance of either of them, or the sign
What are the kinds of easements according to aforesaid should be removed before the execution
purpose of easement or the nature of limitation? of the deed. This provision shall also apply in case
1. Positive – one which imposes upon the servient of the division of a thing owned in common by two
estate the obligation of allowing something to be or more persons. (Art. 624)
done or of doing it himself. (Art. 616)
2. Negative – that which prohibits the owner of the What is the rule regarding the doctrine of
servient estate from doing something which he apparent sign?
could lawfully do if the easement did not exist. 1. before the alienation, there is no true easement
(Art 616)
a. after alienation:
i. there arises an easement if the sign
What are the kinds of easements according to continues to remain unless there is a
party given the benefit? contrary agreement (the continuance of
1. Real (or predial) – for the benefit of another the sign is the title)
belonging to a different owner (e.g., easement of ii. there is no easement if the sign is
water where lower estates is obliged to allow removed or if there is an agreement to
water naturally descending from upper estates this effect (Art. 624)
to flow into them) (Art. 614)
2. Personal – for the benefit of one or more
When is this doctrine applicable?
persons or community (e.g., easement of right of
way for passage of livestock) (Art. 614) 1. Whether only 1 or both estates are
alienated,
2. Even if there be only 1 estate but there are
What are the kinds of easements according to
2 portions thereof, as long as later on there
the manner they are exercised?
is a division of the ownership of the said
1. Continuous – their use is incessant or may be
portion,
incessant; (Art. 615)
3. Even in the case of division of common
Note: For legal purposes for acquisitive
property, though this is not an alienation
prescription, the easement of aqueduct is
(Art. 624)

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1. By law (Legal)
When is this doctrine not applicable? 2. By the will of the owners (Voluntary)
If both estates or both portions are alienated to the 3. Through prescription (only for continuous and
same owner, for then there would be no true apparent easements) (Art. 619)
easement unless there is a further alienation, this
time, to different owners. (Art. 624) Resultantly, when the court says that an easement
exists, it is not creating one. For, even an injunction
What are the apparent signs of an easement that cannot be used to create one as there is no such
apparently exists? thing as a judicial easement. The court merely
1. Originally no true easement exists here declares the existence of an easement created by
because there is only 1 owner. the parties. (La Vista Association v. CA, GR No.
2. The article speaks of apparent visible 95252, 1997)
easements.
3. Sign of the easement does not mean a placard Modes of Acquiring
or signpost, but an outward indication that the Easements
easement exists.
4. It is not essential that there be an apparent sign How may Easement/Servitude be acquired?
between the 2 estates; it is important that the By:
easement exists between the 2 estates. 1. Title, that is, by judicial acts like law, donation,
contact, will (Art. 620).
What is an example as given by jurisprudence? 2. Prescription of 10 years through adverse
Lot 1 and 2 owned by A. A sold Lot1 to B. Lot 2 has possession or frequent exercises (Art. 620). This
house which has windows. B built a 2-story house. applies only to continues and apparent
A opposed since there is an easement of light and easement, either:
view. (a) Positive from the day the dominant owner
HELD: there is because the windows are an begins to exercise it, e.g., party wall
apparent sign. Altius non-tollendi- non building of a (b) Negative from the day in which notarial
higher structure. (Amor v. Florentino, G.R. No. L- prohibition is made on servient owner e.g.,
48384, 1943) not to obstruct the passage light
3. Deed of recognition by servient owner, e.g.,
right of way (Art. 623).
What are the kinds of easements according to
4. Final judgment, e.g., court declares existence
rights given?
in an action filed for the purpose (Art. 623).
1. Right to partially use the servient estate (Ex.
Right of Way);
Resultantly, when the court says that an
2. Right to get specific materials or objects from the
easement exists, it is not creating one. For,
servient estate;
even an injunction cannot be used to create one
3. Right to participate in ownership (Ex. easement
as there is no such thing as a judicial easement.
of party wall)
The court merely declares the existence of an
4. Right to impede or prevent the neighboring
easement created by the parties. (La Vista
estate from performing a specific act of
Association v. CA, GR No. 95252, 1997)
ownership
5. Apparent sign established by owner of two
What are the kinds of easements according to adjoining estates. Then one estate is alienated
source or origin and establishment of and the easement continuous actively or
easement? passively unless at the time of division, it is
1. Voluntary – constituted by will or agreement of provided that the easement will cease, or the
the parties or by a testator. (Art. 619) sign removed before execution of deed (Art.
2. Mixed – created partly by agreement and partly 624).
by law
3. Legal – constituted by law for public use or for Note: All easements may be acquired by title.
private interest. (Art. 619) However, only continuous and apparent
How is easement established? easements may be acquired by prescription.

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2. Change the place or manner of the use of the

Effects of Easement easement, provided it be equally convenient.
(Art. 629)
What are the rights of the dominant owner? 3. Use the property subject of the easement unless
1. Exercise all rights necessary for the use of the there is an agreement to the contrary. (Art. 628)
easement. (Art. 625)
2. Make any works necessary for the use and The owner of the servient estate retains the
preservation of the servitude; subject to the ownership of the portion on which the easement is
following conditions: (Art. 627) established and may use the same in such a
a. The works shall be at his expense, are manner so as not to affect the exercise of the
necessary for the use and preservation of easement. (Pilar Development Corporation v.
the servitude; Dumadag, GR No. 194336, 2013)
b. They do not alter or render the servitude
more burdensome;
What are the obligations of the servient owner?
c. The dominant owner, before making the
1. Contribute to the necessary expenses in case
works, must notify the servient owner; and
he uses the easement, unless there is an
d. They shall be done at the most convenient
agreement to the contrary
time and manner so as to cause the least
2. Not to impair the use of the easement
inconvenience to the servient owner
3. In case of impairment, to restore conditions to
3. Renounce the easement totally if he desires to
the status quo at his expense plus damages
exempt himself from contribution to necessary
(Arts. 627-630)
expenses. (Art. 628)
4. Ask for mandatory injunction to prevent
impairment of his use of the easement.
Extinguishment of
(Resolme v. Lazo, GR No. L-8654, 1914)
Easements
How is easement/servitude extinguished?

What are the obligations of the dominant owner? Easement/servitude are extinguished by:
1. Notify the servient owner of works necessary for 1. Merger in one person of the ownership of both
the use and preservation of the servitude. (Art. dominant and servient estates.
627) 2. Non-use for 10 years. Count:
2. Contribute to the necessary expenses if there Discontinuous Easement: from day not used,
are several dominant estates in proportion to the Continuous Easement: from day an act contrary
benefits derived from the works. (Art. 628) to easement happens
3. Cannot alter or impose added burden on the 3. Dominant and/or servient estates fall into
easement. (Art. 627) condition wherein the easement cannot be
a. Cannot use the easement except for used,
benefit originally contemplated e.g. flood permanently submerging the land. If
b. In easement of right of way, he cannot the easement is revived, it has not yet
increase the agreed width of the path nor prescribed.
deposit soil or materials outside the 4. Expiration of term or fulfillment of condition, in
boundaries agreed upon conditional or temporary easement.
4. Choose the most convenient time and manner in 5. Renunciation by dominant owner
making the necessary works as to cause the 6. Redemption agreed upon by dominant and
least inconvenience to the servient owner. (Art. servient owners, such as payment of certain
627) sum, doing of an act, or other prestation.
What are the rights of the servient owner? In co-ownership, there is no prescription for as long
1. Retain ownership of the portion on which the as one of the co-owner exercises the easement(Art.
easement is established and may use it in such 633).
a manner as not to affect the exercise of the
easement. (Art. 630) LEGAL VS. VOLUNTARY EASEMENT
What are legal easements?

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Those imposed by law having for their object either towpath, for the exclusive service of river navigation
public use or the interest of private persons. (Art. and floatage.
634)
Compulsory easements for drawing of water and for
They shall be governed by the special laws and watering animals can be imposed for reasons of
regulations relating thereto, and in the absence public use in favor of a town or village, after payment
thereof, by the Civil Code. (Art. 635) of the proper indemnity.
What are voluntary easements? Use of any water by anyone can be disposed by
Those which may be established by the owner of a having the water flow through the intervening
tenement of piece of land as he may deem suitable, estates but is obliged to do the following:
and in the manner and form which he may deem 1. Prove that he can dispose of the water and
best, provided that he does not contravene the laws, that it is sufficient for the use intended.
public policy, or public order. (Art. 688) 2. Show that the proposed right of way is the
most convenient and least onerous to 3rd
What are the kinds of legal easements? persons.
1. Public – for public or communal use 3. Indemnify the owner of the servient estate in
2. Private – for the interest of private the manner determined by the laws and
persons/private use, including those regulations.
relating to (Art. 637-687): (WALL-DRIP)
a. Waters Easement of aqueduct is continuous and apparent
b. Right of Way even though the flow of water may not be
c. Light and View continuous. (Arts. 637-638)
d. Party Wall
e. Drainage of Building
f. Intermediate Distances
b. Right of Way
g. Against Nuisance
What is easement of right of way?
h. Lateral and Subjacent Support
This is the easement or privilege by which one
person or a particular class of persons is allowed to
a. Relating to Waters pass over another’s land, usually through one
particular path or line. (Art. 649)
What are easements relating to waters?
Lower estates are obliged to receive: What are the requisites for easement of right of
1. The waters which naturally and without the way?
intervention of man descend from the higher 1. The property is surrounded by estates of others,
estates; as well as 2. There is no adequate outlet to a public highway,
2. Stones or earth which they carry with them 3. There must be payment of the proper indemnity.
4. That the right of way claimed is at the point least
Owner of the lower estate cannot construct works, prejudicial to the servient estate; and in so far as
which will impede the easement, nor can the owner consistent with this rule, where the distance from the
of the higher estate make works, which will increase dominant estate to a public highway may be the
the burden. shortest.
(Art. 649)
Banks of rivers and streams, although of private
ownership, are subject throughout their entire length What is the rule on indemnity in easements of
and within a zone of 3 meters along their margins, right of way?
to the easement of public use in the general interest 1. Permanent passage. If the passage is
of navigation, floatage, fishing and salvage. permanent, pay the value of land occupied by
the path plus damages. Upon extinction of the
Estates adjoining the banks of navigable and easement, the indemnity is returned without
floatable rivers are, subject to the easement of interest, for the interest is considered rent.
2. Temporary passage. If temporary, pay for the
damages caused. Indemnity not returned

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because damage has already been caused. land has been registered under the Land
(Art. 649) Registration Act, proper expropriation proceedings
should be had, and just compensation paid to the
How is it extinguished? registered owner. (Eslaban v. Vda. De Onorio, GR
Extinguishment: Legal or Compulsory Right of No. 146062, 2001)
Way Easement of right of way is discontinuous. It may
1. When the dominant estate is joined to another be exercised only if a person passes or sets foot on
estate (such as when the dominant owner somebody else’s land. An easement of right of way
bought an adjacent estate) which is abutting a of railroad tracks is discontinuous because the right
public road, the access being adequate and is exercised only if and when a train operation by a
convenient person passes over another’s property. (Bomedco
2. When a new road is opened giving access to the v. Valdez, GR No. 124699, 2003)
isolated estate
3. In both cases: must substantially meet the If the easement is intended to perpetually or
needs of the dominant estate. Otherwise, the indefinitely deprive the owner of his proprietary
easement may not be extinguished. rights through the imposition of conditions that affect
4. Extinguishment NOT ipso facto; the servient the ordinary use, free enjoyment and disposal of the
estate may demand; if he chooses not to, the property or through restrictions and limitations that
easement remains, and he has no duty to refund are inconsistent with the exercise of the attributes
indemnity of ownership or when the introduction of structures
5. If extinguished, must return the amount received or objects which, by their nature, create or increase
as indemnity to the dominant owner without any the probability of injury, death upon or destruction of
interest. Interest shall be deemed in payment life and property found on the land is necessary,
for the rent. then the owner should be compensated for the
monetary equivalent of the land (National Power
Article 630 expressly provides that “[t]he owner of Corporation vs. Tiangco, GR No. 170846, 2007).
the servient estate retains ownership of the portion
on which the easement is established and may use What are the differences between right of way
the same in such manner as not to affect the under R.A. 10752 and easement of right of way?
exercise of the easement.” Thus, the owners of the
servient estate retained ownership of the road right- RIGHT OF WAY EASEMENT OF
of-way even assuming that said encumbrance was UNDER R.A. RIGHT OF
for the benefit of the owner of the dominant estate. 10752 WAY
(Mercader, Jr. vs. Bardilas, GR No. 163157, 2016)
Legal Basis Republic Act No. Civil Code: It
Under the law, and unlike in purchase of a property, and Scope
of
10752: applies to
should the right of way no longer be necessary Application Specifically private
because the owner of the dominant estate has governs the properties and
joined it to another abutting on a public highway, and acquisition of right allows for the
the servient estate demands that the easement be of way for national establishment of
extinguished, the value of the property received by and local a right of
infrastructure passage over
the servient estate by way of indemnity shall be
projects, such as one's land to
returned in full to the dominant estate. (De Guzman roads, highways, benefit another
v. Filinvest Development Corporation. GR No. bridges, and other property.
191710, 2015) transportation-
related projects.
The only servitude which a private owner is required
to recognize in favor of the government is the Article III, Section
easement of a public highway, way, private way 9 of the
established by law, or any government canal or Constitution
lateral that has been pre-existing at the time of the states that private
property shall not
registration of the land. If the easement is not pre-
be taken for public
existing and is sought to be imposed only after the

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An easement of light and view can be acquired

use without just
through prescription of 10 years counting from the
compensation.
(Sec. 2, time when the owner of the dominant estate formally
Declaration of prohibits, through a notarial instrument, the
Policy) adjoining lot owner from blocking the view of a
window located within the dominant estate. (Alolino
Purpose To facilitate the To provide a v. Flores, GR No. 198774, 2016)
acquisition of right legal Q: X bought a lot with a one-storey residential
of way for mechanism for house erected thereon from Y. Y owns an
infrastructure granting access adjoining lot to X’s lot. Y started construction on
projects that serve to one property a two-storey residential house. X files a
public interest. through another complaint for easement of light and view,
To ensure that property when praying for a writ of preliminary injunction. Y
landowners are there is no other filed a motion to dismiss by way of demurrer of
compensated for reasonable way evidence. RTC denied the demurrer of evidence.
the use of their of access. Y filed for certiorari with the CA. CA denied the
property for such To avoid petition for certiorari for failing to prove that
projects. landlocked RTC committed a grave abuse of discretion. X
situations contends that CA’s decision denying the
To enable the demurrer of evidence constitutes as the law of
reasonable use the case in the complaint for easements. Does a
and enjoyment decision denying a demurrer of evidence
of the land. constitute as the law of the case in a complaint
for easements?
Acquisition Involves the Follow the
Process
identification of requisites (p. A: No. The doctrine of the law of the case only
the needed right 42) applies when there has been a prior decision on the
of way, merits. Law of the case is a rule of general
negotiation with application that the decision of an appellate court in
the affected a case is the law to the case on the points presented
landowners, throughout all the subsequent proceedings in the
appraisal of the case in both the trial and appellate courts and no
affected question necessarily involved and decided on that
properties, and appeal will be considered on a second appeal or writ
payment of just of error in the same case, provided the facts and
compensation and issues are substantially the same as those on which
it also includes the the first question rested and, according to some
resolution of authorities, provided the decision is on the merits.
disputes through (Spouses Garcia v. Santos, G.R. No. 228334, June
administrative and 17, 2019)
judicial
procedures (Secs. NOTE: Read Spouses Garcia v. Santos, G.R. No.
4-7).
228334, June 17, 2019, in full and in the original.
c. Light and View

III. DIFFERENT MODES OF ACQUIRING
What is the easement of light and view? OWNERSHIP
Period of prescription for the acquisition shall be
counted: OCCUPATION
1. From the time of opening of the window, if
through a party wall Q: What are the requisites?
2. From the time of the formal prohibition upon the 1. Seizure or apprehension
proprietor of the adjoining land, if window is 2. Property seized must be corporeal movable
through a wall on the dominant estate (Art. 668) property
3. Property must be susceptible of appropriation
4. Intent to appropriate

ATENEO CENTRAL
5. Compliance with requisites or conditions of the conditions. Mr. X refused to sign the sales
law (De Leon, supra, p. 585). agreement as there was no meeting of the
minds, thereby constraining him to demand for
TRADITION a refund of his deposit payments. Corporation A
failed to comply. Mr. X filed suit, to which
What is Tradition? Corporation A counterclaimed that the
It is a mode of acquiring ownership as a transaction was not a Contract of Sale but a
consequence of certain contracts like the contract of Contract to Sell: in fact, as early as 1995, Mr. X
sale, barter, assignment, simple loan or mutuum. was furnished a copy of the Contract to Sell
(De Leon, supra, p. 789) which he signed and even requested for an
amended version thereof to reflect the
What are the Kinds of Tradition? amortization schedule. Furthermore,
1. Actual delivery consists in placing the Corporation A sent a letter on December 5, 1998,
thing sold in the control and possession of informing Mr. X that “he had failed to pay his
the vendee (Art. 1497) installment payments since October 1995 and
2. Legal or constructive delivery may be that he was given sixty (60) days therefrom to
had through any of the following ways: pay his installments, otherwise Corporation X
a. the execution of a public will be constrained to rescind the contract
instrument evidencing the sale consistent with Section 4 of the Maceda Law.”
(Art. 1498)
b. Traditio symbolica, such as the (a) Was there an effective Contract to Sell?
delivery of the keys of the place
where the movable sold is being A: No, the written Contract to Sell is ineffectual.
kept (Art. 1498, par. 2) Under Section 4 of RA 6552 (Maceda Law), four (4)
c. Traditio longa manu or by mere conditions are required before a seller may actually
consent or agreement if the cancel the contract thereunder:
movable sold cannot yet be 1. The defaulting buyer has paid less than two
transferred to the possession of years of installments;
the buyer at the time of the sale 2. The seller must give such defaulting buyer
(Art. 1499) a 60-day grace period, reckoned from the
d. Traditio brevi manu, if the buyer date the installment became due;
already had possession of the 3. If the buyer fails to pay the installments due
object even before the sale (Art. at the expiration of the said grace period,
1499), and the seller must give the buyer a notice of
e. Traditio constitutum cancellation and/or a demand for rescission
possessorium, where the seller by notarial act; and
remains in possession of the 4. The seller may actually cancel the contract
property in a different capacity only after the lapse of 30 days from the
(Art. 1500) buyer's receipt of the said notice of
cancellation and/or demand for rescission
In the execution of a Deed of Absolute Sale over real by notarial act.
property, petitioner could not even claim to be an
innocent purchaser for value since it did not show In this case, there was compliance with the first and
that it fully ascertained the identities and second requisites when Corporation A sent Mr. X, a
genuineness of the signatures of the purported defaulting buyer whose payments did not amount to
vendors. It did not diligently search for the real two years' worth of installments, its December 5,
owners of the property and did not verify if they were 1998 letter giving him 60 days to make good on his
still alive or not. (J. Hernando: City of Tanauan v. obligation. Corporation A, however, did not meet the
Millonte, G.R. No. 219292 , 2021) last two conditions. There was no notice of notarial
rescission served upon Mr. X. Necessarily, 30 days
Q: Mr. X alleged that in 1995, he purchased by could not have lapsed from a non-existent service of
installment three lots located in Cagayan de Oro such notice. (J. Hernando: Pryce Properties Corp.
City from Corporation A. Mr. X paid his deposits, v. Nolasco, Jr., G.R. No. 203990, 2020.)
but Corporation A did not deliver to Mr. X the
copies of the lots' certificates of title and their (b) Can Mr. X still demand for a refund?
sales agreement. When Mr. X finally received the
sales agreement, he was surprised, frustrated, A: Yes. A defaulting buyer of real property on
and dismayed as it contained unacceptable installments, whether or not she or he has paid two

ATENEO CENTRAL
(2) years of installments, has three common legal 5. Compliance with the prescribed Form
remedies in the absence of a valid rescission,
granted by Section 6 of R.A. No. 6552 and
jurisprudence:
Classifications
1. Pay in advance any installment at any time,
necessarily without interest; KINDS OF DONATION
2. Pay the full unpaid balance of the purchase
price at any time without interest, and to What are the Kinds of Donation as to Effectivity?
have such full payment of the purchase 1. Inter vivos - takes effect during the lifetime of
price annotated in the certificate of title the donor, even though the property shall not be
covering the real property subject of the delivered till after donor’s death or even though
transaction under R.A. No. 9552; or it is subject to resolutory or suspensive condition
3. Claim an equitable refund of prior (Art. 729 and Art. 730).
payments and/or deposits made by the
2. Mortis Causa - takes effect upon the death of
defaulting buyer to the seller pertinent to
their transaction under R.A. No. 9552, if the donor and shall be governed by the rules of
any. (J. Hernando: Pryce Properties Corp. succession (Art. 728)
v. Nolasco, Jr., G.R. No. 203990, August 3. Propter Nuptias - Donation by reason of and in
24, 2020.) consideration of marriage, before its celebration,
in favor of one or both of the future spouses (Art.
DONATION 82, Family Code)
Features What are the Kinds of Donation as to

a. Nature Consideration?
1. Pure and Simple – When the cause of the
What is the Nature of Donations? donation is the pure liberality of the donor in
An act of liberality whereby a person disposes consideration of the donee’s merits,
gratuitously of a thing or right in favor of another, 2. Remuneratory or compensatory – Donation is
who accepts it (Art. 725) given out of gratitude on account of the services
rendered by the donee to the donor, provided
When is a Donation Perfected? the services do not constitute a demandable
Donation is perfected from the moment the donor debt.
knows of the acceptance by the donee (Art. 724) 3. Modal – When the donation imposes upon the
donee (necessarily future) a burden less than
The donation is perfected once the acceptance of the value of the thing given
the donation was made known to the donor. 4. Onerous – the value of which is considered the
Accordingly, ownership will only revert to the donor equivalent of the consideration for which it is
if the resolutory condition is not fulfilled. (Quijada v. given and thus governed by the rules of
CA, GR No. 126464, 1998) obligations and contracts
What are the Characteristics of a Donation? Note: Where a contract is seemingly a

1. Unilateral – obligation imposed on the donor remuneratory donation but is silent as to the
2. Consensual – perfected at time donor knows of value of the burden imposed on the donee of a
acceptance thing of undetermined value, the law on contract
instead of the law on donations should govern.
What are the Requisites? (CIDAF) (Reyes v. Asuncion, GR No. 196083, 2015)
1. The donor must have Capacity to make the
donation of a thing or right What are the kinds of donation as to effectivity
2. Donative Intent (animus donandi) or intent to of extinguishment?
make the donation out of liberality to benefit the 1. Pure – not subject to any condition (uncertain
donee event) or period
3. Delivery, whether actual or constructive of the 2. Conditional – subject to suspensive or
thing or right donated resolutory condition
4. Donee must Accept or consent to donation

ATENEO CENTRAL
3. With a Term – subject to a period, suspensive Where, however, a donation was made stipulating
or resolutory that it would take effect after the death of the donor
but further stipulated that (1) the donor will not
Note: Illegal or impossible conditions in simple dispose nor take it away from the donee and that (2)
and remuneratory donations are considered as the donor is parting with the beneficial ownership
not imposed. Donation itself remains valid and while he lived was held to be inter vivos.
only the illegal or impossible conditions are
disregarded. (Art. 727) In case of doubt, the conveyance should be deemed
donations inter vivos, rather than mortis causa, in
How to distinguish Donation order to avoid uncertainty as to the ownership of the
Inter Vivos from Donation property subject of the deed (Villanueva v. Spouses
Mortis Causa? Branoco, GR No. 173804, 2011).
The reservation of the “right, ownership, possession
DONATION INTER DONATION MORTIS and administration of the property” and made the
VIVOS CAUSA donation operative upon death, in the context of an
Disposition happens irrevocable donation, simply means that the donors
Disposition and parted with their naked title, maintaining only
upon the death of donor;
acceptance to take beneficial ownership of the donated property while
acceptance by donee
effect during lifetime of they lived. (Del Rosario vs. Ferrer, GR No. 187056,
can only be done after
donor and donee
donor’s death 2012)
Even if there is a term of
Already pertains to the effectivity and effectivity What are the badges of Mortis Causa?
donee unless there is a is upon the death of the 1. Title remains with donor (full or naked
contrary intent donor, still entitled to ownership) and conveyed only upon death
fruits 2. Donor can revoke ad nutum (Villanueva v.
Formalities required - Spouses Branoco, G.R. No. 172804, 2011)
Formalities required - 3. Transfer is void if transferor survives transferee
follow law on donations
follow law on succession (Del Rosario v. Peralta G. No. 187056, 2010;
and certain kinds of
to be valid, and donation Villanueva v. Spouses Branoco, GR No.
donations and law on
must be in the form of a 172804, 2011)
obligations and
will
contracts (suppletory)
Irrevocable at the Form
instance of the donor; Revocable ad mutuum
may be revoked only by (exclusive will of donor) 1. Movable Property
reasons provided by law a. If the value exceeds P5,000, the donation
Revoked only for and acceptance shall be made in writing.
reasons provided for by Otherwise, the donation shall be void.
law (except onerous b. If the value is below P5,000, donation may
donations) be made orally or in writing.
c. If oral, it must be with simultaneous delivery
What are some rules to determine whether of the thing or of the document representing
Intervivos or Mortis Causa? the right donated. (Art. 748)
Where a donation was made “in consideration of
love and affection” but further stipulated that “It 2. Immovable Property
became effective upon the death of the donor a. To be valid, donation must be made in
provided that in the event the donee should die a public instrument, specifying therein
before the donor, the donation would be deemed the property donated and the value of
automatically rescinded,” the Court held that the the charges which the done must
same was a mortis causa since the right of satisfy.
disposition was not transferred to donee while donor b. The acceptance of the donee may be made
is still alive. (Sicad v. CA, GR No. 125888, 1998) in the same deed of donation or in a
separate public document.

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c. If the acceptance is made in a separate A: YES. Our fundamental law dictates that non-
instrument, the donor shall be notified Filipinos cannot acquire or hold title to private
thereof in an authentic form, and this step lands or to lands of the public domain, except only
shall be noted in both instruments. by way of legal succession. Not even an ownership
d. Acceptance must be made during the in trust is allowed. Also, an implied trust simply is not
lifetime of the donor. (Art.749) a mode of legal succession. Their main distinction is
that implied trusts take effect upon agreement by the
Note: A donation mortis causa must comply with the parties to constitute the same, whereby legal
formalities of a last will and testament otherwise; it succession ensue at the moment of death of the
would be void and would produce no effect. decedent. It is likewise worth noting that a
(Maglasang v. Heirs of Corazon Cabatingan, GR beneficiary in an implied trust receives the beneficial
No. 131953, 2002) ownership over the property subject of the trust. It
follows that such beneficiary must be capacitated to
If the donation is made in such a way that the full own real property in the Philippines. (J. Hernando:
and naked ownership will pass to the donee upon Gaw v. Chua, GR No. 206404, 2022)
the death of the donor, then it is at that time when
WHAT IS THE RULE ON DOUBLE DONATIONS?
the donation will take effect and it is the donation
Rule: Priority in time, priority in right
mortis causa which should be embodied in the last
will and testament. (Maglasang v. Cabatingan, GR 1. If movable – one who first takes possession in
No. 131953, 2002) good faith
2. If immovable – one who recorded in registry of
property in good faith
Q: X, executed a deed of absolute sale over three
c. No inscription, one who first took
(3) lots in favor of Y for the consideration of Php
possession in good faith
19,000.00. Y rented these lots to Z for their
d. In absence thereof, one who presents
business. Z was a Chinese national with seven
oldest title
(7) children. Eventually, Y sold all three (3) lots
to A, one of Z’s children, for Php 24,000.00. After
the sale, Z died. A donated one of the lots to his b. Persons who may give or
sibling, B, while the remaining two (2) lots were receive
sold to B as well. Upon the death of C, Z’s
spouse, both of them were still Chinese citizens. WHO MAY GIVE OR RECEIVE A DONATION?
Their estates were never judicially or extra- 1. Capacity to be Donor
judicially settled. Among the subject properties, All persons who may contract and dispose of their
one TCT under the name of A was cancelled, one property may give donation. Those who cannot give
issued under B’s name remained, and the last consent to a contract cannot be donors.
TCT was classified as unregistered land. B filed
for an application for registration and Note: The word “making” in the Civil Code refers to
confirmation of land titles in his name. D, “perfection”. A contract of donation is perfected at
another sibling of A and B, and her Spouse G the time the donor knows of the acceptance by the
filed a complaint for reconveyance of her donee. This is the point in time when capacity to give
undivided share and damages against B. RTC (donor) and capacity to receive (done) must both be
denied B’s application and confirmation of land present, i.e., at the time of perfection. (Arts. 734 &
titles in his name and granted D’s complaint for 735)
reconveyance and damages. CA affirmed the
dismissal of B’s application but likewise Who are Disqualified to Donate?
dismissed D's complaint, pointing out that Article 736. Guardians and trustees cannot donate
X owned the lots and D cannot claim any the property entrusted to them. (n)
hereditary share since the questioned lots were Article 739. The following donations shall be void:
excluded from Z and his spouses’ estates. Is the (1) Those made between persons who were
CA correct? guilty of adultery or concubinage at the time of
the donation;

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(2) Those made between persons found guilty power, otherwise, the donation shall be void
of the same criminal offense, in consideration (Art. 745)
thereof; 3. Authorization should be in a public instrument.
(3) Those made to a public officer or his wife, 4. Minors and others who cannot enter into a
descendants and ascendants, by reason of his contract, shall have acceptance done through
office. parents or legal representatives (Art. 741)
5. Conceived and unborn children shall have
In the case referred to in No. 1, the action for donation accepted by persons who would legally
declaration of nullity may be brought by the represented them if they were already born (Art.
spouse of the donor or donee; and the guilt of 742)
the donor and donee may be proved by
preponderance of evidence in the same action. Limitations
(n)
What are the effects and limitations of donation?
Note: Donation between spouses during marriage, 1. Reservation of sufficient means for support of
except moderate gifts (Art. 87, Family Code) donor and relatives.
Note: Those made to incapacitated persons, though - Donation may comprehend all present
simulated under the guise of another contract or properties of the donor, or part thereof,
through a person who is interposed. provided he reserves sufficient means for
Note: The prohibition against donations between his support and of relatives who, at the time
spouses must likewise apply to donations between of the acceptance of the donation, are by
persons living together in illicit relations. (Joaquino law entitled to be supported by the donor.
v. Reyes, G.R. No. 154645, 2003) Otherwise, the donation will be subject to
Note: In case of donation of the same thing to two reduction upon petition of any person
or more different persons, the rules on double sale affected. (Art. 750)
will apply. (Art. 1544)
2. Donation of future property is prohibited. (Art.
751)
2. Capacity to be Donee
3. Donation shall be limited to what the donor may
All those who are not specially disqualified by law give by will. Otherwise, the donation is
may accept donations. inofficious (Art. 752).
- The limitation applies when the donor has
Who May Accept Donations? forced or compulsory heirs. The purpose is
1. Natural and juridical persons not especially not to impair their legitimes.
disqualified by law
2. Minors and other incapacitated A donation would not be legally feasible if the donor
a. By themselves if pure and simple donation has neither ownership nor real rights that he can
or if it does not require written acceptance transmit to the donee. (Hemedes v. CA, GR No.
b. By their parents or legal representatives if 107132, 2008)
the donation is onerous or conditional or
needs written acceptance What Are The Rights and Obligations of Donor?
i. Natural guardian – not more than 1. Donor may reserve the right to dispose of some
50,000 of the things donated, or of some amount or
ii. Court appointed – more than 50,000 income charge thereon (Art. 755)
3. Conceived and unborn child, represented by 2. Donor may donate the ownership of property to
person who would have been guardian if already one person and the usufruct to another (Art. 756)
born (Arts. 738, 741 & 742) 3. Donor is not obliged to warrant the things
donated except when the donation is onerous,
What Are The Requirements for Acceptance? in which case the donor is liable for eviction or
1. Acceptance must be made during the lifetime of hidden defects in case of bad faith on his part.
the donor and donee (Art. 746) (Art. 754).
2. Acceptance may be made personally or through 4. Donor may provide for reversion in his favor.
an agent with special or general and sufficient (Art. 757)

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A: YES. Under the Agreement, those gifts bestowed

What Are The Rights and Obligations of Donee? upon Y by X shall become the former’s exclusive
1. If donation is made to several persons jointly, it property. X’s act of purchasing the subject property
is understood to be in equal shares and there is using his own funds was a genuine act of gratuity in
no right of accretion among them, unless the favor of Y. Consequently, since X declared in the
Ante-Nuptial Agreement, which was executed after
donor provides otherwise. (Art. 753)
the purchase of the subject property, that he was
2. If made to the husband and wife jointly, there is explicitly discharging any and all interest in all gifts
right of accretion. (Art. 753) that he had bestowed upon Y, X’s alleged interest in
3. Donee is subrogated to all the rights and actions the subject property has been completely waived in
which in case of eviction would pertain to the favor of Victoria. Further, X’s defense that the
donor (Art. 754) property was bestowed upon A instead of Y, and
4. If donation imposes upon the donee the therefore is not under the coverage of the Ante-
obligation to pay the debts of the donor, it is Nuptial Agreement is without merit. While ordinarily,
A and Y are deemed to have unique and separable
understood to be liable to pay only the debts
juridical personalities, the factual circumstances of
previously contracted. the instant case reveal that, in so far as the subject
Note: In no case shall the donee be property is concerned, they are one and the same
responsible for debts exceeding the value person. Thus, as X and Y expressly agreed in the
of the property donated unless a contrary Ante-Nuptial Agreement that the latter's properties
intention appears. (Art. 758) would be hers exclusively, that any gift bestowed
5. If no stipulation regarding, they payment of upon Y from X would remain her exclusive property,
and that X waived all direct and indirect interests in
debts, donee is liable only when the donation
Y’s properties, it is clear to the Court that X has
has been made in fraud of creditors waived and abandoned any and all interest in the
Note: It is always presumed to be in fraud subject property. (Delgado v. GQ Realty
of creditors, when at the time of donation, Development Corp., G.R. No. 241774. September
the donor did not reserve sufficient property 25, 2019)
to pay his debts. (Art. 759)
Reduction and revocation of
Q: X and Y met and fell in love after their donation
respective spouses both died. Both had children
from their previous marriages. When X and Y got REVOCATION
married on June 20, 1987, they executed an
Ante-Nuptial Agreement which stated that their What Is The Nature of Revocation Of Donations
properties would be governed by complete 1. Affects the whole donation
separation of properties. This Agreement was 2. Applies only to donation inter vivos
executed on dated June 15, 1987. Before they 3. Not applicable to onerous donations
were married, Y bought a condominium unit for
4. Donor can revoke donation if the donee fails to
her daughter from her previous marriage, Z,
using X’s funds (as an act of love). The purchase comply with the conditions imposed by the
was made on April 27, 1987 and registered in the donor.
name of Y’s family corporation, A. A has never
operated as a legitimate corporation, as it only What Are The Grounds For Revocation?
entered into transactions with Y’s family. 1. Birth, Adoption, Reappearance of a Child
However, Y then swapped units with Z, and Y It applies when the donor, at the time he made the
started living in the subject property with X.
donation, did not have any child or descendant, or
When Y died in 2006, the children of X and Y
began fighting over the properties. X alleged erroneously thought so. Donation may be revoked
that he had the right to the property based on an or reduced when:
implied trust. Did the execution of the Ante- a. Donor should have any children, after
Nuptial Agreement waive, abandon, or donation, even though they be posthumous
otherwise extinguish X’s alleged interest over b. Donor’s child whom he believed to be dead
the subject property? Assuming that the when he made the donation, turn out to be
property was indeed a gift, was it bestowed living
upon Y or A? c. Donor subsequently adopts a minor child
(Art. 760)

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2. Ingratitude 3. Non-compliance with conditions

The donation may also be revoked by reason of Donation may be revoked when the donee fails to
ingratitude in the following cases: comply with any of the conditions which the donor
a. Donee should commit some offense imposed.
against the person, honor or property of the
donor, or of his wife, or children under his The alienations and mortgages made by the donee
parental authority. are void, subject to the limitations imposed by the
Mortgage Law and Land Registration laws with
b. Donee imputes to the donor any: regard to third persons.
i. Criminal offense; or
ii. Any act involving moral turpitude; Action prescribes after 4 years from the
noncompliance with the condition.
Note: Revocation applies even if the donee
proves that the crime or act was actually Note: This action may be transmitted to the heirs of
committed, unless the crime or the act has the donor and may be exercised against the donee’s
been committed against the donee himself, heirs. (Art. 764)
his wife, or children under his authority.
When is there No Period Fixed for the Condition
c. Donee unduly refuses to give support when Imposed?
the donee is legally or morally bound to give The general rule is that if the period is not fixed in
support to the donor. the contract, the court can fix the period. However,
in a case where 50 years had passed without the
condition having been fulfilled, the Court refused to
Period for action prescribes within one year,
fix a period and ruled that for failing to comply with
counted from the time the donor:
the conditions of the donation, such donation can be
a. Had knowledge of the fact; and
revoked. (Central Philippine University v. CA, GR
b. It was possible for him to bring the action.
No. 112127, 1995)
(Art. 769)
Q: Local Government A thru its governor
Note: Action granted to the donor by reason of
donated a portion of land to B. The Deed of
ingratitude may not be renounced in advance and Donation includes a condition that the property
may not be transmitted to the heirs of the donor. (Art. shall be used for the purpose intended and with
769 - 770) a prestation that B must construct a building
thereon. It also prohibits B in selling,
Exception to Rule on Intransmissibility of Action mortgaging, or encumbering the donated
with Regard to Revocation Due to Ingratitude property. Furthermore, it includes a clause that
allows an automatic revocation in case there is
What is the General Rule? a violation of terms and conditions in the Deed
of Donation. After the execution of the Deed, B
Personal to the donor; heir cannot file an action to
leased out to C a portion of a building that is
revoke if donor did not file an action to revoke.
constructed on the donated property. Years
after, A executed a Deed of Revocation of
What is the Exception? Donation and sent a demand letter to B to vacate
Heirs may file in the following cases: the premises. Subsequently, A thru its
a. Donor has instituted proceedings but dies representative filed a case for Unlawful Detainer
before bringing civil action for revocation against B. A argues that B violated its terms and
b. Donor already instituted civil action but conditions under the Deed of Donation
died, heirs can substitute thereafter invoking the automatic revocation
c. Donee killed donor or his ingratitude clause in the Deed of Donation. On the other
hand, B contends that A has ceased to be the
caused the death of the donor
owner of the subject property possessed and
d. Donor died without having known the
occupied by B by virtue of the Deed of Donation
ingratitude done Inter Vivos executed in favor of B. Furthermore,
e. Criminal action filed but abated by death B argues that there is no violation of the

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condition of the donation. Did the lease to C 2. Failure to reserve

violate the terms and conditions of the deed - Failure of the donor to reserve sufficient
hence the donation can be automatically means for support of himself or dependent
revoked? relatives
A: NO. The donation being modal and onerous, the 3. Fraud against creditors
rules on contracts should prevail in the interpretation - Failure of donor to reserve sufficient
of the Deed of Donation pursuant to Article 732 and property to pay off existing debts
733 of the Civil Code. Hence, the automatic - Note: This is not actually an action to
revocation clause is valid with the application of the reduce a donation. It is rather an action to
principle of autonomy of contracts. While the rescind a rescissible contract called Accion
automatic revocation clause is valid, the courts are Pauliana. Reduction of the donation is the
not precluded from determining whether their end result or consequence once the prayer
application or enforcement by the donors concerned or relief in the complaint is granted.
are proper if the donees contest the revocation or
rescission. Moreover, Article 765 which states that 4. Inofficiousness
the donation shall be revoked at the instance of the - the donation exceeds that which the donor
donor, when the donee fails to comply with any of can give by will
the conditions which the former imposed upon the
latter shall be read with Article 1191. While Article What Are Innoficious Donations?
1191 applies to reciprocal obligations and donation
essentially involves a unilateral act and there is an a. Shall be reduced with regard to the excess
express revocation clause in the Deed of Donation, b. Action to reduce shall be filed by heirs who
Article 1191 is nevertheless relevant in the have right to legitime at time of donation
determination of the nature of the breach or violation (compulsory heirs of donor, heirs and
of the obligation that will justify its rescission. The successor-in-interest of compulsory heirs)
nature of the breach will entitle an injured party to c. Voluntary heirs/devisees/ legatees/
rescind is when such breach is so substantial and Donees/ creditors of deceased donor
fundamental as to defeat the object of the parties in
cannot ask for reduction of donation
making the contract. In this case, the revocation is
not valid because first, while an unregistered lease d. If there are 2 or more donations: recent
for more than one year is an encumbrance, the ones shall be suppressed
encumbrance was not perpetual. Second, the lease e. If 2 or more donation at same time – treated
did not cover the entire donated property. Third, B equally and reduction is pro rata, but donor
has already complied with its main prestation which may impose preference which must be
is the construction of the building. Thus, the expressly stated in donation
revocation of the Deed of Donation by A is improper f. Effect of declaration as inofficious: the
and lacks legal basis. However, given that B donation is void only as to the portion
disregarded the provision of the Deed of Donation impairing the legitime
not to encumber the donated property, A is only
entitled to nominal damages. (Camarines Sur
Teachers and Employees Association, Inc v. Cause of action arising from the inofficiousness
Province of Camarines Sur, G.R. 199666, October of donation arises only upon death of the donor,
07, 2019) as the value of the donation will be contrasted
with the net value of the estate of the donor
What are Illegal and Impossible Conditions? decedent. (Eloy Imperial v. CA, GR No. 112483,
In Simple/Remuneratory donations – shall be 1999)
considered as not imposed (Art. 727)
Is Judicial Intervention Necessary for Automatic
In Onerous/Contract – annuls obligation; obligation Revocation?
and conditions are void (Art. 1183) In contracts providing for automatic revocation,
judicial intervention is necessary not for purposes of
REDUCTION obtaining a judicial declaration rescinding a contract
but in order to determine whether or not the
What Are The Grounds For Reduction? (BRFI) rescission was proper.
1. Birth, appearance, or adoption of a child
- Same cases as revocation

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The stipulation of the parties providing for automatic possession of a thing in the manner and under
revocation of the deed of donation, without prior conditions provided by law.
judicial action for that purpose, is valid subject to the 2. Extinctive prescription – it is the loss or
determination of the propriety of the rescission extinguishment of property rights or actions
sought. Where such propriety is sustained, the through the possession by another of a thing for
decision of the court will be merely declaratory of the the period provided by law or through failure to
revocation, but it is not in itself the revocatory act. bring the necessary action to enforce one’s right
(Zamboanga Barter Traders v. Plagata, G.R. No. within the period fixed by law (De Leon, p. 701);
148433, 2008) also referred to as limitation of actions (Morales
v. CFI, GR No. L-52278, 1980)
Checklist for Donation:
1. Whether onerous or gratuitous – if onerous, a. Prescription of Ownership and
governed by law on contracts Other Real Rights
2. If gratuitous, whether mortis causa or inter vivos
– if mortis causa, governed by law on ACQUISITIVE PRESCRIPTION
succession Mode of acquiring ownership and other real rights
3. If inter vivos, whether perfected or not (made through lapse of time.
known to the donor). If no perfection, donation is
void. What are the Kinds of Acquisitive Prescription?
4. If perfected, check for the capacity of the donor Acquisitive prescription of ownership and other real
to give and the donee to receive. If no capacity, rights may be ordinary or extraordinary.
donation is void. 1. Ordinary acquisitive prescription
5. Compliance with form, otherwise void. requires possession of things in good faith
e. Art. 748 (movable); and and with just title for the time fixed by law.
f. Art. 749 (immovable) 2. Extraordinary acquisitive prescription
requires neither good faith nor just title but
PRESCRIPTION possession for a longer period.
What is Prescription? What are the Periods for acquisition?

It is a mode of acquiring ownership and other real
rights through lapse of time (acquisitive 1. Movable (Art. 1132)
prescription); and losing rights and action (extinctive a. 4 years with good faith & just title
prescription) b. 8 years if without
General Rule: A co-owner cannot acquire the 2. Immovable (Art. 1134 & 1137)
whole property as against the other co-owners by a. 10 years with good faith & just title
acquisitive prescription. (Art. 494) b. 30 years if without
Exception: When there is valid repudiation – Was X able to prove that its predecessors in
prescription shall start from such repudiation. interest have been in open, continuous,
(Paras, supra, p. 365) exclusive and notorious possession under a
bona fide claim of ownership since June 12,
Exception to the Exception: In constructive 1945 or earlier?
trusts, prescription does not run. (Jacinto v. Jacinto,
L-17955, L-17957, 1962) (Paras, supra, p. 366) A: NO, X failed to squarely address the CA's finding
that the records do not show proof of how X’s
predecessor in interest came to own the Subject
Distinctions Between
Acquisitive and Extinctive Land and how this was inherited. These are crucial
facts that X needed to establish to show that its
Prescription
predecessor-in-interest had a prior valid claim of
What are the Kinds of Prescription? ownership over the Subject Land. Precisely, San
1. Acquisitive prescription – it is the acquisition Pedro's claim of ownership rests on these crucial
of ownership and other real rights through facts, and without them such claim becomes

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tenuous. With these facts missing, the Court wholly 1. Minors and incapacitated person who have
agrees with the CA that "evidence on record is parents, guardians or other legal
insufficient to prove that X’s predecessor-in-interest representatives;
possessed or occupied the subject land in the 2. Absentees who have administrators;
concept of an owner since June 12, 1945, or earlier." 3. Persons Living abroad who have managers
Also, the evidence that Y adduced to disprove X's or administrators
claim of ownership, including tax declarations dated 4. Juridical persons, except the state with
1941, cast serious doubt on DMCI's evidence to regard to property not patrimonial in
show its and its predecessors-in-interest open, character (Art. 1108);
continuous, exclusive and notorious possession and 5. Between Co-heirs/co-owners (there must
occupation since June 12, 1945 or earlier. (D.M. be definite repudiation first)
Consunji, Inc. v. Republic, G.R. No. 233339 6. Between Owner of property and person in
(Resolution), February 13, 2019) possession of property in concept of owner
Settled is the rule that an applicant for registration of Against Whom Does Prescription Not Run?
a subject land must proffer proof of specific acts of 1. Between husband and wife, even though
ownership to substantiate his claim. In other words, there be a separation of property agreed
he should prove that he exercised acts of dominion upon in the marriage settlements or by
over the lot under a bona fide claim of ownership judicial decree.
since June 12, 1945 or earlier. The testimonies of 2. Between parents and children, during the
the witnesses are credible enough to support X’s minority or insanity of the latter.
claim of possession. Worthy to note that the 3. Between guardian and ward during the
witnesses unswervingly declared that X’s continuance of the guardianship. (Art.
predecessor-in-interest, Y, in the concept of an 1109)
owner, occupied and possessed Lot No. 5525 even
before June 12, 1945. Thus, the possession and What Are Things Subject to Prescription? (Art.
occupation as bona fide owner of Y can be tacked 1113)
to the possession of X who acquired Lot No. 5525- All things within the commerce of men:
B by virtue of a Deed of Absolute Sale. (J.
1. Private property
Hernando: Republic v. Caraig, G.R. No. 197389,
2. Patrimonial property of the State
2020)
- To be subject of prescription,
What are the General Requisites for Acquisitive - the land must be classified as
Prescription? (CTPL) alienable and disposable, and
1. Capacity of the possessor to acquire by - it must be expressly declared by
prescription the State that it is no longer
2. Thing capable of acquisition by intended for public use. (Republic
prescription v. Ching, G.R. No. 186166, 2010)
3. Possession of thing under certain
conditions
It is only when alienable and disposable lands are
4. Lapse of time provided by law
expressly declared by the State to be no longer
intended for public service or for the development of
Who May Acquire by Prescription?
the national wealth that the period of acquisitive
1. Person who is capable of acquiring
prescription can begin to run.
property by other legal modes
(Heirs of Delfin v. National Housing Authority, GR
2. State
193618, November 28, 2016)
3. Minors (through guardians or personally)
(Art. 1108)
The period of possession prior to the declaration
that land is alienable and disposable agricultural
Against Whom May Prescription Run? land is included in the computation of possession for
(MALJCO) purposes of acquiring registration rights over a
property so long as the land has already been
declared as alienable and disposable at the time of

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the application for registration. (AFP Retirement and exclusive, and notorious possession and occupation
Separation Benefits System v Republic of the of the land for several decades, such land was
Philippines, G.R. No. 180086, 2014) deemed to have already been acquired by the
petitioners therein by operation law, thus
Q: The Heirs of X filed a complaint against Sps. segregating such land from the public domain.
Y for recovery of Ownership, Cancellation of Open, exclusive, and undisputed possession of
Title, Annulment of Sale, Reinstatement of Title, public land for more than 30 years by a person in
Reconveyance and Damages before the MCTC accordance with Section 48(b) of the Public Land
of Maddela-Natigpuan, Quirino. It was alleged in Act creates the legal fiction whereby the said land,
the complaint that the Heirs of X have a valid upon completion of the requisite period of
claim of ownership over a parcel of land at possession, ipso jure became private property.
Dipintin, Quirino which was owned by X. It was (Heirs of Spouses Suyam v. Heirs of Julaton, G.R.
further alleged that as early as 1940’s or 1950’s, No. 209081, June 19, 2019)
the subject property had been in possession of
X and that the Heirs of X had been cultivating the Article 1144 of the Civil Code provides that all
said land personally and through their tenants. actions upon a written contract shall be brought
The issue arose in 1997 when the heirs were within ten (10) years from accrual of the right of
trying to pay arrears on the property at the action. The estate's complaint filed in 2007 is well
Treasurer’s Office, the heirs were informed that within the prescriptive period, which is 10 years from
the property had been declared for taxation by the lapse of the period within which the Republic
the Sps. Y. It was discovered that the Sps. could file a motion for revival of judgment of Civil
purchased the property from a certain Z who Case No. P-86 in 2005. As correctly ruled by the CA,
was supposedly issued a patent and a the cause of action accrued only from the time of the
corresponding Original Certificate of Title (OCT) alleged violation of the Republic, that is, its failure to
in 1980. The RTC dismissed the complaint comply with its obligation to not lease, let,
stating that the Heirs have failed to establish encumber or dispose any portion of the donated
clear and convincing evidence of their public, property, i.e., its failure to move for execution or
peaceful and uninterrupted possession of the revival of judgment. (J. Hernando: Estate of
property. The CA reversed the RTC decision, Rodriguez v. Republic, G.R. No. 214590, 2022)
highlighting that there were several
uncontroverted facts that prove there was no What Things Are Not Subject to Prescription?
natural interruption of possession of the said 1. Property of public dominion (Art. 1113)
land by the heirs and therefore prescription had 2. Intransmissible rights
set in, therefore granting the complaint. Did the 3. Movables possessed through a crime (Art.
CA err in reversing the decision of the RTC? 1133)
4. Registered land; lands covered by title (P.D.
A: NO. Under Section 11 of the Public Land Act, only 1529, Sec. 47)
public lands suitable for agricultural purposes can
be disposed by virtue of a homestead patent Who Can Renounce Prescription?
application. The rule is well-settled that an OCT Persons with capacity to alienate may renounce
issued on the strength of a homestead patent prescription already obtained but not the right to
partakes of the nature of a certificate of title only prescribe in the future.
when the land disposed of is really part of the
disposable land of the public domain. The open,
Renunciation may be express or tacit. Prescription
exclusive, and undisputed possession of alienable
is deemed to have been tacitly renounced;
public land for the period prescribed by law creates
renunciation results from the acts which imply
the legal fiction whereby the land, upon completion
abandonment of right acquired. (Art. 1112)
of the requisite period, ipso jure and without the
need of judicial or other sanction, ceases to be
public land and becomes private property. In the Creditors and persons interested in making
case of Heirs of Santiago v. Heirs of Santiago, prescription effective may avail it themselves
wherein the Court held that since the petitioners notwithstanding express or tacit renunciation. (Art.
therein were able to prove their open, continuous, 1114)

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a. Ordinary 3. Title must be one which would have been

sufficient to transfer ownership if grantor
What is Ordinary Prescription? had been the owner.
1. Possession in the concept of an owner, public, 4. Through one of the modes of transferring
peaceful and uninterrupted; ownership but there is vice/defect in
2. Within time fixed by law (4 years for movables; capacity of grantor to transmit ownership.
10 years for immovables);
3. Good faith
What is meant by In Concept of Owner?
4. Just title;
1. Possession NOT by mere tolerance of
owner but adverse to that of the owner
b. Extraordinary
2. Claim that he owns the property
What is Extraordinary Prescription?
In extraordinary prescription, ownership and other What is meant by Public, Peaceful &
real rights over immovable property are acquired Uninterrupted?
through uninterrupted adverse possession thereof Must be known to the owner of the thing. The
for 30 years without need of title or of good faith. possession must not be secret or clandestine.
(Gesmundo v. CA, G.R. No. 119870, 1999). 1. Acquired and maintained without violence
2. Uninterrupted (no act of deprivation by
What Are The Requisites For Extraordinary others) possession
Prescription?
1. Possession in the concept of an owner, public, What is Prescription of Actions?
peaceful and uninterrupted; It is a mode of losing rights and actions by mere
2. Within time fixed by law (8 years for movables; lapse of time fixed by law.
30 years for immovables):
Distinctions Between
Note: Just title and good faith NOT required in Extinctive Prescription and
extraordinary prescription; Laches
EXTINCTIVE PRESCRIPTION
What is meant by Good Faith?
1. Reasonable belief that person who What Are The Characteristics?
transferred the thing is the owner and could
validly transmit ownership. Extinction of rights and actions; also referred to as
2. Must exist throughout the entire period limitation of actions (Morales v. CFI, GR No. L-
required for prescription. 52278, 1980) which implies that actions to enforce
What is meant by Just Title? or preserve a right or claim must be brought within
When the possession was acquired through one of a certain period of time.
the modes recognized by law, but the grantor was
not the owner or could not transmit any right (Art. What Are The Periods?
1129, NCC); must be proved and never presumed;
only Titulo Colorado is required. Prescription of action to recover movables and
immovables
1. Titulo Colorado – such title where there 1) Movable (Art. 1132)
was a mode of transferring ownership but a) 4 years with good faith & just title
something is wrong because the grantor is b) 8 years if without
NOT the owner.
2. Titulo putativo - a person believes he has 2) Immovable (Art. 1134 & 1137)
obtained title but he has not because there a) 10 years with good faith & just title
was no mode of acquiring ownership, as b) 30 years if without
when one is in possession of a thing in the
mistaken belief that it had been Note: The periods are the same for dismissal of the
bequeathed to him. (Doliendo v Biarnesa, complaint based on acquisitive prescription and
G.R. No. L-2765, 1906) extinctive prescription. The first is substantive

ATENEO CENTRAL
because the defendant is already the owner of outside the commerce of

the property based on acquisitive prescription. men.
The second is procedural since the plaintiff did
not file the complaint on time. In either case, the
Right of reversion or
complaint will be dismissed.
reconveyance to the State
of things which are not
WHEN PRESCRIPTION IS INAPPLICABLE
susceptible of being
IMPRESCRIPTIBLE
appropriated is not barred
The offender can never
by prescription. (De Leon, p.
acquire, through
758)
prescription, movables
possessed through a crime
1. By Offender (Art. 1133). Land of the public domain
must be declared alienable
The action to recover from and disposable either by the
the offender is President or the Secretary
imprescriptible. of the DENR to be the
Title to lands registered subject of appropriation.
under the Torrens System The period of possession
cannot be acquired by prior to the reclassification
prescription or adverse of the land as disposable
3) Registered possession as against the cannot be considered in
lands registered owner or reckoning the prescriptive
hereditary successor (PD period in favor of the
1529). Action to recover possessor. (Republic v. De
registered land is Guzman Vda. De Joson,
imprescriptible. GR No. 163767, 2014)
4) Actions to
demand right
of way; to Imprescriptible In [Sps.] Alfredo v. [Sps.] Borras, the Court ruled that
abate prescription does not run against the plaintiff in
nuisance actual possession of the disputed land because
5) Actions to such plaintiff has a right to wait until his possession
quiet title if is disturbed or his title is questioned before initiating
Imprescriptible an action to vindicate his right. His undisturbed
plaintiff is in
possession gives him the continuing right to seek
possession
the aid of a court of equity to determine the nature
Action to declare a contract of the adverse claim of a third party and its effect on
void is imprescriptible his title. The Court held that where the plaintiff in an
6) Void contracts action for reconveyance remains in possession of
Note: An action to annul a the subject land, the action for reconveyance
voidable contract prescribes becomes in effect an action to quiet title to property,
after 4 years which is not subject to prescription.
Action to demand partition is
7) Actions to The action for reconveyance was filed by
imprescriptible or cannot be
demand respondents Navares precisely because they
barred by laches, absent a
partition; deemed themselves owner of the litigated property
clear repudiation of the co-
distinguished prior to the claim of petitioners Tomakin. The filing
ownership by a co-owner.
from laches of such action was an assertion of their title to the
(De Leon, p. 253) property. (Heirs of Tomakin v. Heirs of Navares,
8) Property of Property of public dominion G.R. No. 223624. July 17, 2019)
public cannot be acquired by
dominion prescription for they are
WHAT IS THE PRESCRIPTIVE PERIOD TO
RECOVER MOVABLES?

ATENEO CENTRAL
Prescriptive period for action to recover movables is Registry of Deeds in 1991. X was successful in
8 years from the time the possession is lost. (Art. having the Deed annotated on the Transfer
1140) Certificate of Title (TCT), but he was not able to
cause the transfer of the Torrens title in his
However, the action shall not prosper if it is brought name. X discovered that the TCT had been
stamped as “cancelled” and were replaced by
after 4 years when the possessor has already
subsequent Torrens titles in which transactions
acquired title by ordinary acquisitive prescription. were made between Y and Z in 1996, and then
from Z to A Corporation in 2005. X filed a
WHAT IS THE PRESCRIPTIVE PERIOD TO complaint before the RTC in 2014, and such
RECOVER IMMOVABLES? complaint is an action for reconveyance. The
The period for bringing real actions over RTC dismissed the complaint on the ground of
immovables is 30 years unless the possessor has prescription since an action for reconveyance of
acquired ownership of the immovable by ordinary real property based on an implied constructive
acquisitive prescription through possession of 10 trust arising from fraud prescribes ten (10) years
years (meaning with good faith and just title). after the issuance of title in favor of the
defrauder. Here, the complaint was filed in 2014,
If the action is based on fraud, the prescriptive more than ten (10) years after the transaction
was made in 1996. Has the action for
period is 4 years from discovery of fraud.
reconveyance prescribed?
OTHER ACTION A: NO. There are two (2) kinds of actions for
Prescriptive periods (Art. 1140-1149) reconveyance. On one hand, Article 1144 (2) of the
Civil Code states that the prescriptive period for the
Right of way reconveyance of fraudulently registered real
None
Abatement of nuisance property is ten (10) years from the date of the
Action to recover movables – from issuance of the certificate of title. This ten-year
8 years prescriptive period begins to run from the date the
time possession is lost (Art. 1140)
Real action over an immovable adverse party repudiates the implied trust, which
repudiation takes place when the adverse party
30 years property – from time possession is
registers the land. On the other hand, when the
lost (Art. 1141)
consent is totally absent and not merely vitiated, the
Mortgage action (Art. 1142) contract is void. An action for reconveyance may
also be based on a void contract. When the action
Upon written contract for reconveyance is based on a void contract, as
Obligations arising from law when there was no consent on the part of the
10 years
Court judgment (Art. 1144) alleged vendor, the action is imprescriptible.
Whether an action for reconveyance prescribes or
Reconveyance based on implied not is therefore determined by the nature of the
constructive trust action, that is, whether it is founded on a claim of the
existence of an implied or constructive trust, or one
Oral Contract
6 years based on the existence of a void or inexistent
Quasi Contract (Art. 1145) contract. Here, X’s action should be characterized
Injury to rights primarily as one for reconveyance based on a void
4 years Quasi Delict (Art. 1146) contract because when the transaction was made in
Rescission/Annulment of contract 1996, Y had no more title to the property, which he
Forcible entry sold to X in 1991. This means that Z could not have
1 year Unlawful detainer acquired anything in 1996, and it follows that A
Oral Defamation (Art. 1147) Corporation purchased nothing from Z in 2005.
Thus, the action for reconveyance has not
Other actions whose periods are not
5 years prescribed. (Gatmaytan v. Misibis Land, Inc., G.R.
fixed by law (Art. 1149) No. 222166, June 10, 2020.)
Prescription starts from the accrual or the day the LACHES

action may be brought. (Art. 1150, NCC)
What are the Characteristics?
There is laches when a party was negligent or has
Q: X purchased from Y a parcel of land and tried failed "to assert a right within a reasonable time,"
to register the Deed of Absolute Sale with the

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thus giving rise to the presumption that he or she What are the types of Interruption of possession
has abandoned it. Laches have set in when it is for the purpose of prescription? (PEN-C)
already inequitable or unfair to allow the party to 1. Natural
assert the right. (Sps. Aboitiz v. Sps. Po, G.R. No.
208450 and 208497, 2017) a. Through any cause, possession ceases for
more than 1 year
In actions for reconveyance of property predicated b. If 1 year of less – as if no interruption; the
on the fact that the conveyance complained of was time elapsed shall be counted in favor of
null and void ab initio, a claim of laches would be prescription
unavailing. Laches is a doctrine in equity and our
courts are basically courts of law and not courts of 2. Civil – when there is judicial summons to the
equity. Equity, which has been aptly described as possessor
"justice outside legality," should be applied only in Note: Exceptions
the absence of, and never against, statutory law.
a) Void for lack of legal solemnities
Aequetas [nunquam] contravenit legis. The positive
mandate of Art. 1410 of the New Civil Code b) Plaintiff desists from complaint/allows
conferring imprescriptibility to actions for declaration proceedings to lapse
of the inexistence of a contract should pre-empt and c) Possessor is absolved from complaint
prevail over all abstract arguments based only on
equity. Certainly, laches cannot be set up to resist d) Express or tacit renunciation
the enforcement of an imprescriptible legal right, 3. Express or tacit recognition by the possessor of
and petitioners can validly vindicate their inheritance the owner’s right;
despite the lapse of time. (J. Bellosillo: Heirs of
4. Possession in wartime.
Ingjug-Tiro v. Spouses Casals, G.R. No. 134718,
2001)
What Are The Rules in Computation of Period?
Similarly, laches do not apply to void ab initio 1. Present possessor may tack his possession to
contracts. The Court ruled that a sale of a parcel of
that of his grantor or predecessor in interest
land in violation of the five-year prohibition on the
alienation of land acquired via patent application is 2. Present possessor presumed to be in
void and produces no legal effect. As successors-in- continuous possession even with intervening
interest of Alido, petitioners' right to challenge the time unless contrary is proved
sale between Alido and respondent cannot be 3. First day excluded, last day included
barred by laches as it was in violation of the
restriction on the sale of land acquired through free What Are The Requisites for Tacking?
patent, emphasizing the rule that laches, being
1. There must be privity between previous and
based on equity, do not apply if the assailed contract
is void ab initio. (J. Hernando: Heirs of Eliseo present possessor
Bagaygay v. Heirs of Anastacio Paciente, G.R. No. 2. Possible when there is succession of rights
212126, 2021) 3. If character of possession different:
a) Predecessor in bad faith / possessor in
What are the Requisites? good faith – use extraordinary prescription
1. The conduct of the defendant or one under
whom he claims, gave rise to the situation
When is there An Interruption of Prescription of
complained of
Actions?
2. There was delay in asserting a right after
knowledge of the defendant's conduct and 1. When they are filed before the court
after an opportunity to sue 2. When there is a written extrajudicial
3. Defendant had no knowledge or notice that demand by the creditors
the complainant would assert his right 3. When there is any written
4. There is injury or prejudice to the defendant acknowledgement of the debt by the debtor
in the event relief is accorded to the (Art. 1155)
complainant. (Ignacio v. Basilio, G.R. No.
122824, 2001)
PRESCRIPTION/NON-PRESCRIPTION OF
INTERRUPTION
ACTION
What are the rules on prescription/non-

prescription of action?

ATENEO CENTRAL
1. If plaintiff is in possession that the Free Patent and the OCT was applied for
The action does not prescribe. While the and granted, respectively, in bad faith. Was the
application for free patent and issuance of OCT
owner continues to be liable to an action,
done in good faith?
proceeding, or suit upon the adverse claim,
he has a continuing right to be given aid by A. YES. Based on the totality of evidence, the
the court to ascertain and determine the application for Free Patent and the OCT were validly
nature of such claim and its effect on his applied for and issued in favor of the heirs of X and
title, or to assert any superior equity in his does not encroach on the property of the heirs of Y.
favor. He may wait until his possession is Moreover, fraud cannot be presumed and must be
disturbed or his title is attacked before proven by clear and convincing evidence. Based on
taking steps to vindicate his right. the testimony provided for by the DENR CENRO all
the requirements for the issuance of the OCT
2. If plaintiff is not in possession covering lot No. 584 were duly complied without any
kind of irregularity. This was further bolstered by the
The action may prescribe. Even if the action testimony of the land investigator who confirmed the
is brought within the period of limitations, it validity of Free Patent and OCT. At this juncture, the
may be barred by laches, where there is no Court stresses that findings of fact by administrative
excuse offered for the failure to assert the agencies are generally accorded by the courts great
title sooner. If somebody else has respect, if not finality, by reason of the special
possession, the period of prescription for knowledge and expertise of said administrative
the recovery of land is either 10 or 30 years. agencies over matters falling under their jurisdiction.
It is not the task of the Court to once again weigh the
evidence submitted before and passed upon by the
What is The General Rule? administrative body and to substitute its own
An action for reconveyance of a parcel of land based judgment regarding sufficiency of evidence. (Quinol
on implied or constructive trust prescribes in 10 v. Inocencio, G.R. No. 213517, April 10, 2019)
years, the point of reference being the date of
registration of the deed or the date of the issuance ————- end of topic ————-
of the certificate of title over the property.
What is the Exception?

If the plaintiff is in possession, the action is
imprescriptible.
Q: X sold to Y a parcel of land as evidenced by

an unregistered Deed of Absolute Sale (DOAS).
The DOAS was duly notarized, but it did not
specify the lot number of the property.
According to the heirs of X, the land sold to Y
was Lot No. 585. On the other hand, the heirs of
Y argue that the property purchased by Y was
Lot No. 584. The claim was substantiated by
showing evidence that Y has been in possession
of the lot no. 584 in the concept of an owner,
planting different crops therein. When Y died, lot
no. 584 was then possessed by the heirs of Y
with the title of the land transferred to one of
them and the realty tax being paid by them. The
heirs of X then applied for Free-Patent over lot
No. 584. Upon approval of the application, the
Register of Deeds and issued OCT No. FV-34211
in favor of the heirs of Y. Upon discovery of the
Free Patent granted to the heirs of X, the heirs of
Y filed a complaint for Quieting of Title,
Declaration of Inexistence of Instrument, and
Damages against the heirs of X, mainly arguing

ATENEO CENTRAL

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IV. LAND TITLES & DEEDS

A. TORRENS SYSTEM
1. GENERAL PRINCIPLES
A. TORRENS SYSTEM
Torrens System
The Torrens System is a system of registration of
transactions with interest in land the object of which
B. REGALIAN DOCTRINE
is, under governmental authority, to establish and
certify the ownership of an absolute and
C. NATIONALITY RESTRICTIONS ON LAND
indefeasible title to realty, and to simplify its transfer.
OWNERSHIP
(Grey Alba v. De la Cruz, G.R. No. 5246, September
16, 1910 citing Hogg on Australian Torrens System.)
D. ORIGINAL REGISTRATION (PD 1529)
1. Ordinary Registration
a. Who May Apply Title to real property
b. Decree of Registration A title to real property is the evidence of the owner’s
c. Review of Decree of Registration; right or extent of his interest, by which he can
Innocent Purchaser for Value (IPV); maintain control and assert his right to exclusive
Rights of IPV possession and enjoyment of the property.
(Evangelista v. Santiago, G.R. 157447, April 29,
E. AN ACT IMPROVING THE CONFIRMATION 2005 citing Narciso Peña, et al., Registration of
PROCESS FOR IMPERFECT LAND TITLES Land Titles and Deeds 3 (1994 ed.))
(RA 11573), AMENDING CA 141 AND PD
1529 [SEE REPUBLIC V. PASIG RIZAL CO., Deed
INC., G.R. NO. 213207, FEBRUARY 15, 2022] A deed is an instrument in writing by which any real
estate or interest therein is created, alienated,
F. CERTIFICATE OF TITLE mortgaged, or assigned, or by which title to any real
estate may be affected in law or equity.
G. SUBSEQUENT REGISTRATION
1. Voluntary Dealings Land registration
2. Involuntary Dealings Land registration is a judicial or administrative
a. Adverse Claims proceeding whereby a person’s claim over a
b. Notice of Lis Pendens particular land is determined and confirmed or
recognized so that such land and the ownership
H. NON-REGISTRABLE PROPERTIES thereof may be recorded in a public registry.
I. DEALINGS WITH UNREGISTERED LANDS Purposes of land registration under the

Torrens System
J. ASSURANCE FUND
1. Nature of Assurance Fund (1) Quiet title to the land
2. Conditions for Compensation from To quiet title to the land and to stop forever any
Assurance Fund question as to the legality of said title, except claims
3. Prescriptive Period which were noted at the time of registration, in the
certificate, or which may arise subsequent thereto
K. RECONSTITUTION OF TITLE - Relieves the land of unknown claims
. - Gives every registered owner complete
peace of mind
(2) Guarantee the integrity of land titles

To guarantee the integrity of land titles and to
protect their indefeasibility once the claim of
ownership is established and recognized
(3) Avoid possible conflicts

To avoid possible conflicts of title to real property
(4) Facilitate transactions relative thereto

ATENEO CENTRAL
To facilitate transactions relative thereto by giving 1. Property Registration Decree (P.D. 1529,
the public the right to rely upon the face of a Torrens as amended)
certificate of title and to dispense with the need of 2. Cadastral Act (Act 2259, as amended,
inquiring further, except when the party concerned now in Secs. 35 to 38, P.D. 1529)
has actual knowledge of facts and circumstances 3. Public Land Act (C.A. 141, as amended)
that should impel a reasonably cautious man to
4. Indigenous Peoples’ Rights Act (R.A.
make such further inquiry. (Sps. Peralta v. Heirs of
Abalon, G.R. No. 183448, June 30, 2014) 8371)
5. Emancipation Decree (P.D. 27, as
(5) Best evidence of ownership amended)
To issue a certificate of title to the owner which shall 6. Comprehensive Agrarian Reform Law of
be the best evidence of his ownership of the land 1988 (R.A. 6657, as amended)
Registration of title distinct from acquisition Nature of land registration proceedings under
The purpose of land registration is not the
P.D. 1529
acquisition of lands but only the registration of title
which the applicant already possessed over the 1. Judicial in character and not merely
land. (Republic v. CA, G.R. Nos. L-43105, L-43190, administrative
August 31, 1984) 2. A proceeding in rem
Registration under the Torrens System does Judicial in character

not create or vest title In a registration proceeding, the judgment of the
Registration under the Torrens system, not being a court confirming the title, and ordering its
mode of acquiring ownership, does not create or registration in one’s name constitutes, when final,
vest title. The Torrens certificate of title is merely an res judicata against the whole world. (Ronald Ting
evidence of ownership or title in the particular v. Heirs of Lirio, G.R. No. 168913, March 14, 2007)
property described therein. (Casimiro Development
Corporation vs. Mateo, G.R. No. 175485, July 27, A proceeding in rem
2011) In land registration proceedings, being in rem, there
is no need to personally notify the owners or
Securing a title in one’s own name does not operate claimants of the land sought to be registered to vest
to vest ownership upon him of the subject land. A the courts with power and authority over the res.
certificate of title is merely an evidence of ownership (Guido-Enriquez v. Victorino, et al., G.R. No.
or title over the particular property described therein. 180427, September 30, 2013)
It cannot be used to protect a usurper from the true
owner; nor can it be used as a shield for the Administration of the Torrens System
commission of fraud; neither does it permit one to 1. Land Registration Authority (LRA)
enrich himself at the expense of others. Its issuance Agency charged with the efficient execution
in favor of a particular person does not foreclose the of the laws relative to the registration of
possibility that the real property may be co-owned lands, under the executive supervision of
with persons not named in the certificate, or that it the DOJ. (P.D. 1529, § 4)
may be held in trust for another person by the 2. Register of Deeds (ROD)
registered owner. (Ulay v. Bustamante, GR 231721 The office of the ROD is the public
& 231722, March 18, 2021) repository of records and instruments
affecting registered or unregistered lands
The inclusion of areas in excess of the original area and chattel mortgages in the province or
as reflected in TCT No. 722 and in subsequent city wherein such office is situated. (P.D.
certificates of title did not vest any right of private 1529, § 10)
ownership because, as mentioned in the CA
Decision and confirmed by jurisprudence that it Functions of the LRA: (SAC)
cited, registration of lands under the Torrens system 1. Extend Speedy and effective assistance
is not a mode of acquiring ownership. (Belizario v. to the Dept. of Agrarian Reform, the Land
Department of Environment and Natural Resources, Bank, and other agencies in the
G.R. No. 231001 (Resolution), March 24, 2021) implementation of the land reform program
of the government;
Laws governing land registration 2. Extend Assistance to courts in ordinary
and cadastral land registration
proceedings; and

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3. Be the Central repository of records jurisdiction and not to the ROD. (Almirol v. ROD of
relative to original registration of lands titled Agusan, G.R. No. L-22486, March 20, 1968)
under the Torrens system, including the
subdivision and consolidation plans of titled Instances when the ROD may validly deny
lands. (P.D. 1529, § 6(2)) registration of a voluntary instrument:
1. Where there is more than 1 copy of the
Functions of the ROD: (PRIDe) owner’s duplicate certificate of title and not
1. Immediately Register an instrument
all such copies are presented to the
presented for registration dealing with real
ROD.(Balbin v. ROD, G.R. No. L-20611,
or personal property which complies with
1969);
the requisites for registration;
2. Where the voluntary instrument bears on
2. See to it that said instrument bears the
its face an infirmity (e.g., where the
Proper documentary stamps and that the
property is presumed to be conjugal but
same are properly cancelled;
the instrument of conveyance bears the
3. If the instrument is not registrable, Deny the
signature of only one spouse);
registration thereof and inform the
3. Where the validity of the instrument sought
presentor of such denial in writing, stating
to be registered is in issue in a pending
the ground or reason therefore, and
court suit, notice of which must be given to
advising him of his right to appeal by
parties;
consulta in accordance with Sec. 117 of
4. Where required certificates or documents
P.D. 1529; and
such as DAR clearance, copy of latest tax
4. Prepare and keep an Index system which
declaration, are not submitted
contains the names of all registered owners
and lands registered in their names. (P.D. Note: Any disposition of private agricultural
1529, § 12) lands made prior to June 15, 1988, when RA
6657 took effect, must be registered within 3
Function of ROD ministerial in character months from said date or on or before
The function of the ROD with reference to September 13, 1988 to be valid. (R.A. 6557, §
registration of deeds, encumbrances, instruments, 6) Thus, on this ground, the proper DAR
and the like is ministerial in nature, provided the clearances must first be secured.
applicant complies with all the requisites. (Baranda
v. Gustilo, G.R. No. 81163, September 26, 1988) 5. Where the transfer/sale involves a total
aggregate landholding of 5 has. and below
Basic formal requirements of deeds and other of a particular landowner and the
voluntary instruments: (See P.D. 1529, § 112) transferee will not own an aggregate of
1. In a public instrument more than 5 has., the transfer is legal and
2. Signed by the person/s executing the proper but a DAR clearance is needed for
same the purpose of monitoring and as requisite
3. Executed in the presence of least 2 for registration. (DAR Administrative Order
witnesses present who shall also sign the No. 05-06)
same 6. The ROD may also refuse to register a
4. Acknowledged to be the free act and deed private document since Section 112 of
of the person/s executing the same before P.D. 1529 provided that deeds of
a notary public or other public officer conveyances affecting lands should be
authorized to take acknowledgement verified and acknowledged before a notary
public or other public officer authorized by
It is enough that in the ROD’s opinion, an instrument law to take acknowledgement. (Gallardo v.
is registrable for him to register it. The act being an IAC, G.R. No. L-67742, 1987)
administrative act does not contemplate notice to
and hearing of interested parties. (Ledesma v.
In cases where the ROD is in doubt
Villaseñor, G.R. No. L-18725, March 31, 1965)
When the ROD is in doubt as to the proper action to
The determination of whether a document is valid or take on an instrument or deed presented to him for
not is a function that belongs to a court of competent registration, he should submit the question to the

ATENEO CENTRAL
Administrator of the LRA en consulta. (P.D. 1529, § 12. Titles derived from a void title are also
117) void.
13. A certificate of title shall not be subject to
General principles underlying the Torrens collateral attack.
System
1. The Torrens Certificate of Title is the best B. REGALIAN DOCTRINE
evidence of ownership of the land.
2. The Torrens Certificate of Title is a Regalian Doctrine
constructive notice to the whole world, and Under the Regalian doctrine, all lands of the public
thus, binds the whole world. domain belong to the State, which is the source of
3. Claims against the land prior to the any asserted right to ownership of land. All lands of
the public domain, waters, minerals, coal, petroleum
issuance of the Torrens Certificate of Title
and other mineral oils, all forces of potential energy,
that are not noted on said title are quieted fisheries, forests, or timber, wildlife, flora and fauna,
or barred. and natural resources belong to the state. With the
4. The Torrens Certificate of Title covering exception of agricultural lands, all other natural
alienable land is indefeasible or resources shall not be alienated. (Sec. 2, Article XII,
incontrovertible after one year from the 1987 Constitution)
entry of the decree of registration.
5. The Torrens certificate of Title is The word “agricultural land” as used in the
imprescriptible. constitutional provision is a generic term excluding
6. Every person dealing with registered land timber and mineral land. It includes agricultural land
proper as well as residential, industrial, and
in good faith and for value may not go
commercial land.
beyond the title but may safely rely on the
correctness of the Torrens Certificate of Anyone who applies for confirmation of imperfect
Title. title has the burden of proof to overcome the
7. The person who fraudulently registered presumption that the land sought to be registered
the land in his name holds it as a mere forms part of public domain.
trustee with the obligation to reconvey the
property and the title to the true owner. To overcome this presumption, incontrovertible
8. As between two innocent persons, the one evidence must be established that the land subject
who made it possible for the wrong to be of the application is alienable or disposable.
done will bear the resulting loss.
The Public Land Act or C.A. 141, until this day, is the
9. He who registers first is preferred in right existing general law governing the classification and
insofar as the third persons are disposition of lands of the public domain, except for
concerned. timber and mineral lands. "Under the Regalian
10. Where two certificates of title include the doctrine embodied in our Constitution, land that has
same land, the certificate that is earlier in not been acquired from the government, either by
data prevail. purchase, grant, or any other mode recognized by
law, belongs to the State as part of the public
In case land has been registered under the Land domain." (Republic v. Jaralve, G.R. No. 175177,
Registration Act in the name of two different Oct. 24, 2012 citing Republic v. Heirs of Juan Fabio,
persons, the earlier in date shall G.R. No. 159589, Dec. 23, 2008)
prevail. (Macutay v. Samoy, G.R. No. 205559,
December 2, 2020.) Hernando Decision
There is no argument that there must be some sort
11. A forged document of sale may become of a presidential declaration that a piece of land
the root of a valid title if the certificate of classified under Section 59 (d) of the Public Land
title has already been transferred from the Act is no longer necessary for public use or public
service before it can be leased to private parties or
name of the true owner to the name of the
private entities or private corporations. However, we
forger or the name indicated by the forger hold that the same need not be exclusively in the
before the Torrens Certificate of Title is form of a presidential proclamation. Any other form
issued to the purchaser in good faith and of presidential declaration is acceptable.
for value.

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We hold that Section 63, in relation to Section 61, of

CA 141 gives leeway to the President and the DENR Effects
Secretary in choosing the manner, mechanism or a) Shall be entitled to a certificate of title.
instrument in which to declare certain alienable or
disposable public lands as unnecessary for public Deed of conveyance issued by government
use or public service before these are disposed patent/grant).
through sale or lease to private parties, entities or
corporations.
Registration with the ROD: mandatory, it is the
Hence, all alienable and disposable lands operative act to convey and transfer title.
enumerated in Section 59, from (a) to (d), suitable b) Land ceases to be part of public domain &
for residence, commercial, industrial or other ownership vests to the grantee.
productive purposes other than agricultural, under c) Any further grant by Government on the
Chapter VIII of the same CA 141, must be subject to same land is null and void.
a presidential declaration that such are exempt from d) Title is indefeasible 1 YEAR after issuance
public use or public service before they can be sold of the patent.
or leased, as the case may be, but such need not be EXCEPTION: If title was secured by fraud and
solely through a presidential proclamation.
misrepresentation. Well-settled is the doctrine
that the registration of a patent under the
This Court has time and again ruled that to prove
that a public land is alienable and disposable, what Torrens System does not by itself vest title; it
must be clearly established is the existence of a merely confirms the registrant’s already
positive act of the government. This is not limited to existing one.
a presidential proclamation. Such fact could
additionally be proven through an executive order; Concept of Native Title; Time Immemorial
an administrative action; investigative reports of Native title refers to pre-conquest rights to lands and
Bureau of Lands investigators; and a legislative act domains which, as far back as memory reaches,
or a statute. (Alde v. City of Zamboanga, G.R. No. have been held under a claim of private ownership
214981, November 4, 2020) by Indigenous Cultural Communities/Indigenous
Peoples (ICCs/IPs), have never been public lands
To prove that the land subject of the application for and are thus indisputably presumed to have been
registration is alienable, an applicant must establish held that way since before the Spanish Conquest.
the existence of a positive act of the government (Sec. 3(L), Ch. III, R.A. 8371)
such as a presidential proclamation or an executive
order; an administrative action; investigation reports NOTE: The Regalian Doctrine does not negate
of Bureau of Lands investigators; and a legislative native title.
act or statute, and the applicant may also secure a
certification from the Government that the lands C. NATIONALITY RESTRICTIONS ON
applied for are alienable and disposable. (Aranda v. LAND OWNERSHIP
Republic, G.R. 172331, 2011)
Which Natural Resources May Be Alienated
When Conclusively Presumed to Have All natural resources, except agricultural lands, shall
Performed All Conditions Essential to a not be alienated. The State shall have full control
Government Grant by Operation of Law and supervision over the exploration, development,
a) Those who by themselves or through their and utilization of natural resources. However, the
predecessors-in-interest have been in State may directly undertake such activities, or enter
OPEN, CONTINIOUS, EXCLUSIVE, AND into co-production, joint venture, or production-
NOTORIOUS possession and occupation. sharing agreements with Filipino citizens,
b) Land is of public domain and is alienable corporations, or associations, whose capital is
and disposable. owned by at least 60% Filipino citizens. The
c) Land is not covered by existing certificates agreement may be for a period not exceeding
of title or patents under bona fide claim of twenty-five (25) years and is renewable for not more
ownership for at least 20 YEARS than twenty-five (25) years (Sec. 2, Article XII, 1987
Constitution).
immediately preceding the filing of the
application for confirmation of title The President may enter into agreements with
EXCEPT when prevented by war or force foreign-owned corporations involving technical or
majeure. financial assistance for large-scale exploration,

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development, and utilization of minerals, petroleum, land shall be disqualified from acquiring
and other mineral oils (Id.). rural land and vice versa. However, if such
has been disposed of, then he shall be
Alienable lands of the public domain shall be limited eligible to acquire rural land and vice versa
to agricultural lands. Private corporations or (Secs. 1 and 4, Rule XII, Omnibus
associations may not hold such alienable lands Investment Code).
except by lease, for a period not exceeding twenty- • In case of married couples, one of them
five (25) years, renewable for not more than twenty- may avail of the privilege. If both shall avail
five (25) years, and not exceeding one-thousand of such, the total area shall not exceed the
(1,000) hectares in area. On the other hand, citizens maximum area of one thousand (1,000)
of the Philippines may lease not more than five square meters (Id.).
hundred (500) hectares, or acquire not more than • If the transferee already owns urban or rural
twelve (12) hectares, by purchase, homestead, or lands for residential purposes, he is still
grant (Sec. 3, Article XII, 1987 Constitution). entitled to be a transferee of additional
urban or rural lands for residential purposes
As stated, the constitutional ban against foreigners as long as it does not exceed the maximum
applies only to ownership of Philippine land and not area authorized (Id.).
to the improvements built thereon. The purpose of
this is to conserve national patrimony (Beumer v. The land acquired shall be primarily, directly and
Amores, G.R. No. 195670, December 3, 2012). actually used by the transferee in the performance
or conduct of his business or commercial activities
Who is Qualified to Be a Transferee of Private in the areas of agriculture, industry and services,
Lands including the lease of land, but excluding the buying
No private lands shall be transferred or conveyed and selling thereof. He shall not engage in activities
except to individuals, corporations, or associations included in the Negative List or those wherein
qualified to acquire or hold lands of the public investment rights have been granted to him (Sec. 5,
domain except in cases of hereditary succession Rule XII, Omnibus Investment Code).
(Sec. 7, Article XII, 1987 Constitution).
• Aliens are disqualified from acquiring Who May Purchase Agricultural Land
private lands; such right is reserved only to The following may purchase any tract of public
Filipino citizens or corporations at least agricultural land disposable:
sixty percent (60%) of the capital of which a. Any citizen of lawful age of the Philippines;
is owned by Filipinos. Even so, citing case b. Any citizen not of lawful age who is a head
law, aliens are absolutely not allowed to of a family;
acquire public or private lands — save only c. Any corporation or association of which at
in constitutionally recognized exceptions least sixty percent (60%) of the capital
(Philip Matthews v. Benjamin and Joselyn stock or of any interest in said capital stock
Taylor, G.R. No. 164584, June 22, 2009). belongs wholly to citizens of the
• The constitutional provision which enables Philippines, and which is organized and
aliens to acquire private lands does not constituted under the laws of Philippines;
extend to testamentary succession for and
otherwise the prohibition will be for naught d. Corporate bodies organized in the
and meaningless (Palacios v. Ramirez, Philippines authorized under their charters
G.R. No. L-27952, February 15, 1982). to do so;i
A natural-born citizen of the Philippines who has lost In case of individuals, the area shall not exceed one
his Philippine citizenship may be a transferee of hundred and forty-four (144) hectares; if corporation
private lands (Sec. 8, Article XII, 1987 Constitution). or association, the area shall not exceed one
The transferee must have the legal capacity to enter thousand and twenty-four (1,024) hectares.
into a contract to be a transferee (Sec. 2, Batas Partnerships shall be entitled to purchase one
Pambansa Blg. 185). hundred and forty-four (144) hectares for each
• A transferee may acquire not more than two member but the total area shall not exceed one
(2) lots which should be situated in different thousand and twenty-four (1,024) hectares as
municipalities or cities. The maximum area authorized for associations and corporations. (Sec.
is 5,000 square meters for urban lands and 22, Commonwealth Act No. 141).
three (3) hectares in case of rural land to be
used for business or other purposes. A The limitation on one hundred and forty-four (144)
transferee who has already acquired urban hectares shall not apply to grants, donations,

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transfers made to a province, municipality or branch land on the basis of an application for registration or
or subdivision of the Government for the purposes answer by a claimant in a cadastral registration.
conducive to the public interest. Such land shall not
be alienated, encumbered, or otherwise disposed of An Original Certificate of Title (OCT) is the first title
in a manner affecting its title, except when issued in the name of the registered owner by virtue
authorized by Congress. (Sec. 60, Commonwealth of judicial/voluntary or administrative/ involuntary
Act No. 141). proceedings. (Salao, et al. v. Salao, G.R. No. L-
26699, Mar. 16, 1976.)
Any person, corporation, association or partnership
disqualified from purchasing public land for
agricultural purposes may lease land included under
this title suitable for industrial or residential
purposes, but the lease shall only be valid while
such land is used for the purposes referred to (Id.).
No other person, corporation, association, or

partnership other than those mentioned may
acquire or own agricultural public land or land of any
other denomination or classification, which is at the
time or was originally, really or presumptively, of the
public domain. This applies to any permanent
improvement thereon, or any real right on such land
and improvement (Sec. 23, Commonwealth Act No.
141).
1. Those who, at the date when the Philippine
Constitution took effect, held such lands,
improvements, and real rights, and
acquired the same under the laws and
regulations in force at the date of such
acquisition, shall be authorized to continue
holding the same if they are qualified under
the qualifications set in Section 22 (Id.).
a. They shall not encumber, convey,
or alienate the same to persons,
corporations, associations, or
partnerships not included in
Section 22 except by reason of
hereditary succession, duly
legalized and acknowledged by
competent courts (Id.).
Under the Constitution, aliens may not acquire

private or public agricultural lands, including
residential lands (Krivenko v. The Register of Deeds
of the City of Manila, G.R. No. L-630, November 15,
1947).
Aliens, whether individuals or corporations, are

disqualified from acquiring lands of the public
domain. Hence, they are also disqualified from
acquiring private lands (Muller v. Muller, G.R. No.
149615, August 29, 2006).
D. ORIGINAL REGISTRATION
Original Registration under P.D. 1529

A proceeding brought before the RTC (as a land
registration court) to determine title or ownership of

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1. ORDINARY REGISTRATION

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Kinds of Registration Setting of the Date of Initial Hearing of application

1. Judicial/Voluntary/Ordinary – by filing with by the RTC
the proper court; application by the private - Within 5 days from filing, the court shall
individual himself issue an order setting the date and hour of
2. Administrative/Involuntary/Cadastral – the initial hearing which shall not be earlier
compulsory registration initiated by the than 45 days nor later than 90 days from
government the date of the order (Section 23, P.D.
1529).
Procedure in Ordinary Land Registration
Proceedings Transmittal of the application and the date of the
Under P.D. 1529 and C.A. 141, the following initial hearing, with all the documents or other
requisites should all be satisfied: evidence attached thereto, by the Clerk of Court to
the LRA
Survey of land by the Bureau of Lands or a duly Publication of notice of initial hearing (mandatory)
licensed private surveyor
- Survey plan must be duly approved by the - Once in the Official Gazette (OG) (this
Director of Lands. confers jurisdiction upon the court); and
- Once in a newspaper of general circulation
Filing of Application for registration by the (Director of Lands v. CA, G.R. No. 102858,
applicant together with all the muniments2 of titles July 28, 1997).
and copies thereof with a survey plan approved
by Bureau of Lands. The Clerk of Court shall not Purposes and effects of publication:
accept any application unless it is show that the - To confer jurisdiction over the land applied
applicant has furnished the Director of Lands with for upon the court
a copy of application and all annexes. - To charge the whole world with knowledge
of the application of the land involved, and
Where to File? invite them to take part in the case and
1. MTC assert and prove their rights over the
a. If there is no controversy or subject land
opposition over the covering lots; or
b. The value of the covering lots does Effect of defective publication
not exceed PHP 100,000 (Section A defective publication of the notice of initial
34, Batas Pambansa Blg. 129; hearing deprives the court of jurisdiction. There
Superiora Locale v. Republic). must be compliance with the publication of the
2. RTC order of the court setting the date and hour of the
a. If there are several parcels of land initial hearing which shall not be earlier than 45
days nor later than 90 days from the date of the
situated in different provinces/cities
order (Section 23, P.D. 1529).
but belong to one owner, he must
file in the RTC of each province
Note: If it is shown that the decree of registration
where different parcels of land are had included lands not included in the original
located for registration purposes. application as published, then the registration
b. When the boundaries are not proceedings are null and void insofar as the land
defined with the RTC of the place not included in the publication is concerned.
where it is declared for taxation (Benin v. Tuason, G.R. No. L-26127, June
purposes. 28,1974)
c. When boundaries are definfed, a
separate plan for each portion must Mailing and posting of notice of initial
be made by a separate application hearing
for each lot must be filed with the
appropriate RTC. Mailing
Within 7 days after publication of said notice in
the OG, the LRA shall mail notice to:
2
NOTE: Muniments of title are instruments or written evidence substantiate and prove title to his estate. (e.g., Deed of
which the applicant holds or possesses to enable him to Sale/Donation/Assignment).
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- Persons named in the notice delimited, the court may require submission of a
- Sec. of Public Highways, Provincial division plan approved by the Director of Lands.
Governor, and Mayor, if the applicant
requests to have the line of a public Note: While the burden of proving that the
way or road determined property is an alienable and disposable
agricultural land of the public domain falls on the
- Sec. of Agrarian Reform, Solicitor
applicant, the Office of the Solicitor General has
General, Director of Lands, Director of the correlative burden to present effective
Fisheries, and Director of Mines, if the evidence of the public character of the land.
land borders on a river, navigable
stream, or shore, or on an arm of the When the State has no effective opposition,
sea where a river or harbor lies except for a pro forma opposition, to controvert
- Other persons as the court may deem an applicant's convincing evidence of possession
proper and occupation, presumptions are tilted to this
applicant's favor. Therefore, when an applicant is
Posting shown to have been in open, continuous,
Posting shall be made by the sheriff in a exclusive, and notorious possession of a land for
conspicuous place on the subject land and on the the period required by law, he or she has
bulletin board of the municipal building of the acquired an imperfect title that may be confirmed
municipality or city in which the land or portion by the State. The State may not, for the simple
thereof is situated, at least 14 days before the reason that an applicant failed to show
date of initial hearing. documents which the State is in the best position
to acquire, indiscriminately take an occupied
Service of notice upon contiguous owners, property and unjustly and self-servingly refuse to
acknowledge legally recognized rights evidenced
occupants, and those known to have interests in
by possession, without violating due process.
the property by the sheriff
- In applications for registration, there must The burden of evidence lies on the party who
be a notification to “all the occupants of the asserts an affirmative allegation. Therefore, if the
land and of all adjoining owners, if known; State alleges that lands belong to it, it is not
and, if not known, it shall state what search excused from providing evidence to support this
has been made to find them.” (Adviento v. allegation. This specially applies when the land in
Alvarez, G.R. No. 150844, August 20, question has no indication of being incapable of
2008). registration and has been exclusively occupied
by an applicant or his or her predecessor-in-
interest without opposition — not even from the
Filing of Answer or Opposition to the
State. (Republic of the Philippines v. Spouses
application by any person whether named in the Noval, G.R. No. 170316, September 18, 2017.)
notice or not (on or before the date of initial
hearing, or within such further time as may be Effects of failure to file answer
allowed by the court.) Absent any oppositor, the court will issue an
order of default pursuant to Sec. 26 of P.D.
Requisites of Opposition 1529.
The oppositor (DIGS):
1. Must have an Interest in the land applied General vs. Special Default
for; GENERAL SPECIAL
2. Should state the Grounds for his objection DEFAULT DEFAULT
as well as the nature of his claimed interest; Those persons who When a party appears
3. Should indicate the Desired relief; and did not appear and at initial hearing
4. Should Sign and have the opposition sworn answer within the without having filed an
to by him or his duly authorized time prescribed answer and asks court
for time to file answer
representative.
but failed to do so
within period allowed
Note: The opposition must be filed on or before
the date of initial hearing.
1. Hearing of the case by the court
2. Promulgation of judgment by the court
If only a portion of the land applied for is
contested and such portion is not properly 3. Issuance of the order of Finality of
judgment and order instructing the LRA to
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issue a decree3 of confirmation and

registration and OCT. How to prove:
1. Certification from City Environment and
Note: The issuance of the decree of registration Natural Resources Office (CENRO) or
is not done by the court. What the court issues is Provincial Environment and Natural
the order of finality of judgment and the order to Resources Office (PENRO)
the LRA to issue the decree. It is the LRA which - If land is less than 50 hectares –
issues the decree as well as the original and CENRO Certification
owner’s duplicate of the OCT.
- If land is 50 hectares or more –
The Clerk of Court shall: PENRO Certification; and
Prepare and submit to the Judge for his signature, 2. Copy of the original classification of land as
as soon as the Decision has become final, the alienable and disposable approved by the
corresponding order for the issuance of the DENR Secretary and certified as a true
decree for all lots covered by the decision from copy by the legal custodian of the official
which no appeal has been interposed or on which records (Republic of the Philippines v.
no motion for new trial or reconsideration has Santos, G.R. No. 191516, Jun. 4, 2014).
been filed;
Transmit immediately two certified copies of all Note: It is not enough for the PENRO or CENRO to
certify that a land is alienable and disposable. The
decisions, orders, resolution, minutes, writs,
applicant for land registration must prove that the
notifications, and other processes after their DENR Secretary had approved the land classification
issuance by the Court to the LRA through and released the land of the public domain as
registered mail with covering letter; alienable and disposable, and that the land subject of
(Administrative Circular No. 7-96) the application for registration falls within the
approved area per verification through survey by the
9. Entry of the decree of registration in the PENRO or CENRO. (Espiritu v. Republic, G.R. No.
LRA. One year after the date of entry of decree, it 219070, Jun. 21, 2017 & Republic v. Raneses, G.R.
becomes incontrovertible and amendments will not No. 189970, Jun. 9, 2014.)
be allowed except for correcting clerical errors. It is
deemed conclusive as to the whole world. In addition, the applicant for land registration must
- Puts an end to litigation present a copy of the original classification approved
by the DENR Secretary and certified as a true copy
- Purpose of Torrens system is protected
by the legal custodian of the official records. These
fact must be established to the prove the land is
10. Sending of the original and owner’s alienable and disposable. (Republic v. T.A.N
duplicate OCT to the ROD of the city or province Properties, Inc., G.R. No. 154953, Jun. 26, 2008)
where the property is situated for entry in his
registration book. A CENRO or PENRO certification alone is insufficient
to prove the alienable and disposable nature of the
11. Entry of OCT by the ROD in the Electronic land sought to be registered. It is the original
Primary Entry Book for Registered Land and classification by the DENR Secretary or the President
delivery of owner’s duplicate OCT to the applicant which is essential to prove that the land is indeed
alienable and disposable.
upon payment of the prescribed fees.
This rule embodies a requirement of twin
What to Prove and Evidence to Submit certifications, consisting of: (a) a copy of the original
1. Alienability and disposability of land classification approved by the DENR Secretary or the
2. Identity of land President and certified as a true copy by the legal
3. A) Private ownership; or B) open, custodian of the official records; and (b) a certificate
continuous, exclusive, and notorious of land classification status issued by the CENRO or
possession PENRO and approved by the DENR Secretary.
(1) Alienability and disposability of land However, despite the stringent rule held in Republic
v. T.A.N Properties, Inc. that the absence of the twin
3
NOTE: Decree – issued by LRA after finality of judgment; b. Decrees of confirmation and registration (Subject
contains technical description of land. only to appeal)
a. Decrees dismissing application

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certifications justifies the denial of an application for What is important in computing the period of
registration, subsequent rulings of the Supreme possession is that the land has already been
Court in Republic v. Vega and Republic v. Serrano declared alienable and disposable at the time of the
allowed the approval of the application based on application for registration. Upon satisfaction of this
substantial compliance. Even so Vega and Serrano requirement, the computation of the period may
were mere pro hac vice rulings and did not in any way include the period of adverse possession prior to the
abandon nor modify the rule on strict compliance declaration that land is alienable and disposable.
pronounced in T.A.N Properties (Republic v. (AFP Retirement and Separation Benefits System v.
Herederos De Ciriaco Chunaco Disteleria Republic of the Philippines, G.R. No. 180086, Jul. 2,
Incorporadia, G.R. No. 200863, Oct. 14, 2020) 2014.)
To establish that the land sought to be registered is Although Corporation A was able to submit a
alienable and disposable, applicants must present a CENRO/PENRO certification certifying the
copy of the original classification approved by the classification of the land as alienable and disposable,
DENR Secretary and certified as a true copy by the a certification of land classification approved by the
legal custodian of the official records. Absent the DENR Secretary, and a Land Classification Map, it
DENR Secretary's issuance declaring the land should be noted that those documents pertain to a
alienable and disposable, the land remains part of the different lot. It was not shown that the lot acquired by
public domain. Even if X adversely possessed the Corporation A were included in the certifications
land, he cannot register the land since he failed to presented. Certainly, in the absence of sufficient and
prove the land is alienable. (Republic v. Malijan- convincing proof that such realty is alienable and
Javier, G.R. No. 214367, Apr. 4, 2018.) disposable land of public domain, the possessor
thereof could not acquire ownership of the same,
Notation in a geodetic survey that the survey was much less, have the right to seek registration of title
inside alienable and disposable land does not thereto under Section 14(1) of the Property
constitute a positive government act validly changing Registration Decree. (Ususan Development
the classification of the land. A surveyor has no Corporation v. Republic, G.R. No. 209462, July 15,
authority to reclassify lands of public domain. Land of 2020)
the public domain, to be the subject of appropriation,
must be declared alienable and disposable either by Mere notations appearing in survey plans are
the President or the DENR Secretary. The applicant inadequate proof of the covered properties' alienable
for land registration has the burden of overcoming the and disposable character. These notations, at the
presumption of State ownership by establishing very least, only establish that the land subject of the
through incontrovertible evidence that the land application for registration falls within the approved
sought to be registered is alienable or disposable alienable and disposable area per verification
based on a positive act of the government. (Republic through survey by the proper government office. The
vs. De Guzman Vda. de Joson, G.R. No. 163767, applicant must also present a copy of the original
Mar. 10, 2014.) classification of the land into alienable and
disposable land, as declared by the DENR Secretary
The property subject of the application for registration or as proclaimed by the President. Unfortunately, in
need not be classified as alienable and disposable this case, the OSG has not been required to make
agricultural land of the public domain for the entire the necessary verification and has not submitted the
duration of the requisite period of possession. two documents that it submitted in Victoria. The
Alienable public land held by a possessor openly, invocation by X of Victoria in this case is, thus,
continuously and exclusively during the prescribed misplaced. (D.M. Consunji, Inc. v. Republic, G.R. No.
statutory period is converted to private property by 233339 (Resolution), February 13, 2019)
the mere lapse of such period. The requirement that
the land should have been classified as alienable and Hernando Decision
disposable agricultural land at the time of the In PD 1529, registration under Section 14(1) is
application for registration is necessary only to based on possession; whereas registration under
dispute the presumption that the land is inalienable. Section 14(2) is based on prescription. Thus, under
(Malabanan v. Republic, G.R. No. 179987, Sept. 3, Section 14(1), it is not necessary for the land applied
2013.) for to be alienable and disposable at the beginning of
the possession on or before June 12, 1945 - Section
The period of possession prior to the declaration that 14(1) only requires that the property sought to be
land is alienable and disposable agricultural land is registered is alienable and disposable at the time of
included in the computation of possession for the filing of the application for registration. However,
purposes of acquiring registration rights over a in Section 14(2), the alienable and disposable
property if the land has already been declared as character of the land, as well as its declaration as
such at the time of the application for registration.
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patrimonial property of the State, must exist at the 2. Technical description of the land
beginning of the relevant period of possession. 3. Tax declarations
(Republic v. Philippine National Police, G.R. No.
198277, February 8, 2021) (3A) Private ownership
Sufficient Proof (R.A. No. 11573, Sec. 7) How to prove: (STOP)
A duly signed certification by a duly designated
DENR geodetic engineer that the land is part of a. Spanish title (inadmissible and ineffective proof of
alienable and disposable agricultural lands of the ownership in land registration proceedings filed
public domain is sufficient proof that the land is
after Aug. 16, 1976)
alienable. Said certification shall be imprinted in the
approved survey plan submitted by the applicant in b. Tax declarations and tax payments (not
the land registration court. conclusive evidence of ownership; must be
coupled with proof of actual possession for the
For the imprinted certification, the geodetic engineer period required by law)4
shall testify that the land is within the alienable and c. Other kinds of proof
disposable lands of the public domain. The - Testimonial evidence
certification shall state the applicable Forestry - Photos of improvements introduced
Administrative Order, DENR Administrative Order, d. Presidential issuances and legislative acts
Executive Order, Proclamations and the Land (constitutive of a fee simple title or absolute title in
Classification Project Map Number covering the favor of the grantee, a law ceding full ownership
subject land.
to a government institution)
Contents of Certification (R.A. No. 11573, Sec. 7)
Note: The holder of a Spanish title may still lose his
1. A sworn statement by the geodetic
ownership of the real property to the occupant who
engineer that the land is within the actually possesses the same for the required
alienable and disposable lands of the public prescriptive period. Taking the law as a whole, it has
domain. clearly set a deadline for the filing of applications for
2. Applicable Forestry Administrative Order, registration of ALL Spanish titles under the Torrens
DENR Administrative Order, Executive system (i.e., 6 months from its effectivity or on 16
Order, Proclamations and the Land August 1976), after which, the Spanish titles may no
Classification Project Map Number covering longer be presented to prove ownership. Spanish
the subject land. titles can no longer be countenanced as indubitable
evidence of land ownership.(Santiago v. SBMA, G.R.
No. 156888, Nov. 20, 2006.)
Should there be no available copy of the
Forestry Administrative Order, DENR (3B) Open, exclusive, continuous, and peaceful
Administrative Order, Executive Order, possession in the concept of owner
Proclamation, it is sufficient that the Lad
Classification (LC) Map Number, Project How to prove:
Number, and date of release indicated in the a) Tax declarations
land classification map be stated in the sworn b) Regular realty tax payments
statement declaring that said classification map c) Muniments of title (e.g., deeds of sale, wills,
is existing in the inventory of LC Map records of donation; to tack possession to that of
the National Mapping and Resource Information predecessors-in-interest)
Authority (NAMRIA) and is being used by the d) Testimonial evidence
DENR. e) Evidence of improvements introduced on
the property
(2) Identity of land
X failed to squarely address the CA's finding that the
How to prove: records do not show proof of how X’s predecessor in
1. Survey plan approved by the Land interest came to own the Subject Land and how this
Management Bureau (LMB) was inherited. These are crucial facts that X needed
to establish to show that its predecessor-in-interest
4
Tax declarations or realty tax payments of property are not purposes strengthens one’s bona fide claim of acquisition of
conclusive evidence of ownership. At most, they serve as a ownership (Republic v. Sta. Ana-Burgos, G.R. No. 163254,
good indicia of possession in the concept of an owner. The Jun. 1, 2007.)
voluntary declaration of a piece of property for taxation
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had a prior valid claim of ownership over the Subject applications but also those filed after original
Land. Precisely, San Pedro's claim of ownership registration, with the power to hear and determine all
rests on these crucial facts, and without them such questions arising upon such applications or petitions.
claim becomes tenuous. With these facts missing, (Averia v. Caguioa, G.R. No. L-65129, Dec. 29, 1986)
the Court wholly agrees with the CA that "evidence
on record is insufficient to prove that X’s Exception: Delegated jurisdiction of the MTC to hear
predecessor-in-interest possessed or occupied the
and determine cadastral or land registration cases
subject land in the concept of an owner since June
12, 1945, or earlier." Also, the evidence that Y covering:
adduced to disprove X's claim of ownership, - Lots where there is no controversy or opposition,
including tax declarations dated 1941, cast serious or
doubt on DMCI's evidence to show its and its - Contested lots, the value of which does not exceed
predecessors-in-interest open, continuous, exclusive P100,000.00 (B.P. 129, § 34).
and notorious possession and occupation since June
12, 1945 or earlier. (D.M. Consunji, Inc. v. Republic, If there are several parcels of land situated in
G.R. No. 233339 (Resolution), February 13, 2019) different provinces/cities belonging to one owner, he
must file in the RTC of each province/city where the
Hernando Decision different parcels of land are located for registration
Although tax declarations or realty tax payment of
purposes.
property are not conclusive evidence of ownership,
nevertheless, they are good indicia of possession in
the concept of owner, for no one in his right mind If land is situated between boundaries of 2 provinces,
would be paying taxes for a property that is not in his application must be filed:
actual or constructive possession. They constitute at 1. When boundaries are not defined: with the RTC
least proof that the holder has a claim of title over the of the place where it is declared for taxation
property. purposes;
2. When boundaries are defined: a separate plan for
The voluntary declaration of a piece of property for each portion must be made by a surveyor and a
taxation purposes manifests not only one's sincere separate application for each lot must be filed with
and honest desire to obtain title to the property and the appropriate RTC
announces his adverse claim against the State and
all other interested parties, but also the intention to In cases of delegated jurisdiction to the MTC, appeal
contribute needed revenues to the Government. is directed to the CA.
Such an act strengthens one's bona fide claim of
acquisition of ownership. (Spouses Ponce v.
When to file application
Aldanese, G.R. No. 216587, August 4, 2021)
The period given under Sec. 47 of CA 141
Where to file application
(extending application up to December 31, 2020)
This is applicable for both PD 1529 and CA 141.
was repealed by RA 11573. Thus, eliminating the
time limit on when to file.
General rule: RTC of the province or city where the
land is situated. Form of the application (WSS)
1. Written
Note: File together with the application all original 2. Signed by the applicant or person duly
muniments of titles or copies thereof and a survey authorized in his behalf
plan of the land as approved by the Bureau of Lands. a. If there is more than one applicant,
the application shall be signed and
Under LRA Circular 05-2000, the original tracing sworn to by and in behalf of each.
cloth plan is no longer forwarded to the LRA; only a 3. Sworn to before an officer authorized to
certified copy thereof needs to be forwarded. administer oath for the province or city
where the application was actually signed.
P.D. 1529 has eliminated the distinction between the (P.D. 1529, § 15 & C.A. 141, § 50.)
general jurisdiction vested in the RTC and the limited
jurisdiction conferred upon it by the former law when
Contents of Application (MADFARCE)
acting merely as land registration court. Aimed at 1. Manner of acquisition of land
avoiding multiplicity of suits, the change has 2. Assessed value of the land and the
simplified registration proceedings by conferring buildings and other improvements based on
upon the RTCs the authority to act not only on original the last assessment for taxation purposes
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3. Description of the land applied for together area, inclusion of publication and notice
with the buildings and improvements; the additional land are necessary
plan approved by Director of Lands and the Joinder, substitution, or File motion with court
technical descriptions must be attached discontinuance of any of
4. The court may require Facts to be stated in the parties
the application in addition to those Decrease in area File motion with court;
no need for new
prescribed by the Decree not inconsistent
publication or notice
therewith and may require the filing of
additional papers Summary of Rules
5. Full names and addresses of All occupants 1. If the amendment consists in the inclusion
of the land and those of the Adjoining in the application for registration an area or
owners, if known; and if not known, the parcel of land not previously included in the
applicant shall state the extent of the original application, as published, a new
search made to find them publication of the amended application
6. If the application describes the land as must be made. The purpose of the new
bounded by a public or private way or publication is to give notice to all persons
Road, it shall state whether or not the concerned regarding the amended
applicant claims any portion of the land application.
within the limits of the way or road, and 2. Without a new publication, the registration
whether the applicant desires to have the court cannot acquire jurisdiction over the
line of way or road determined (P.D. 1529, area or parcel of land that is added to the
§ 20.) area covered by the original application,
7. Citizenship and Civil status of the applicant and the decision of the registration court
a. if married, name of spouse, and would be a nullity insofar as the decision
b. if the marriage has been legally concerns the newly included land.
dissolved, when and how the 3. But if the amendment consists in the
marriage relation was terminated exclusion of a portion of the area covered
8. Mortgage or Encumbrance affecting the by the original application and the original
land or names of other persons who may plan as previously published, a new
have an interest therein, legal or equitable publication is not necessary. In the latter
(P.D. 1529, § 15 & C.A. 141, § 50.) case, the jurisdiction of the court is not
affected by the failure of a new publication
Note: If the applicant is a non-resident of the (Benin v. Tuason, G.R. No. L-26127, 1974).
Philippines, he shall file an instrument appointing an
agent residing in the Philippines and shall agree that Amendments in a petition that do not involve an
service of any legal process in the proceeding made addition but only a reduction of the original area
upon his agent shall be of the same legal effect as if that was published no longer require a
made upon the applicant within the Philippines. (P.D. republication because the amended area was
1529, § 16.) already included in the first publication (Republic
v. San Mateo, et al., G.R. No. 20356, Nov. 10,
Limitation of Area
2014).
For CA 141, application is only for a maximum of 12
hectares. (R.A. 6940, § 3.)
Hearing, Judgment, and Post-Judgment
Amendments Incidents in Ordinary Land Registration
AMENDMENTS IN ORDINARY REGISTRATION Speedy hearing
PROCEEDINGS The trial court is required to dispose of the case within
Striking out one or more The court may strike 90 days from the date of submission thereof for
of the parcels of land out at any time decision. (P.D. 1529, § 27)
applied for or by a
severance of the Note: The court, if it deems necessary, may refer the
application case or any part thereof to a referee who shall hear
Substantial change in New technical the parties and their evidence, and the referee shall
boundaries, increase in description and new submit his report thereon to the court within 15 days
after the termination of such hearing. The court may

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render judgment in accordance with the report as

though the facts have been found by the judge
himself. (P.D. 1529, § 27)
A judgment is a decision of the court constituting

its opinion after taking into consideration the
evidence submitted.
Judgment rendered in a land registration proceeding

becomes final upon the lapse of 15 days counted
from the receipt of notice of the judgment. (P.D. 1529,
§ 30 as modified by B.P. 129, § 39.)
The judgment of the court in the land registration

case becomes final insofar as the State is concerned
15 days from receipt by the OSG (not merely by the
local designated prosecutor) of the copy of the
decision, without there being an appeal or motion for
reconsideration by any of the parties. (Republic v.
Sayo, G.R. No. L-60413, Oct. 31, 1990.)
However, notwithstanding the lapse of the 15-day

period from receipt of judgment by the parties, the
court continues to retain control over the case until
the expiration of 1 year after the entry of decree of
registration by the LRA. (Republic v. Assosacion
Benevola de Cebu, G.R. No.77243, Oct. 26, 1989.)
In special proceedings, the purpose of execution of

judgment is to establish a status, condition or fact; in
land registration proceedings, the ownership by a
person of a parcel of land is sought to be
established. After the ownership has been proved
and confirmed by judicial declaration, no further
proceeding to enforce said ownership is necessary,
except when the adverse or losing party had been in
possession of the land and the winning party desires
to oust him therefrom. (Ronald Ting v. Liro, G.R. No.
168913, Mar. 14, 2007.)
Partial judgment
In a case where only a portion of the land subject of
registration is contested, the court may render partial
judgment provided that a subdivision plan showing
the contested and uncontested portions approved by
the Director of Lands is previously submitted to said
court. (P.D. 1529, § 28.)

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Post-Judgment Incidents

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Writ of Possession: employed to enforce a such ownership). (Macutay v. Samoy, G.R. No.
judgment to recover the possession of land. It 205559, December 2, 2020.)
commands the sheriff to enter the land and give
possession of it to the person entitled under the 1. Who may apply
judgment; no prescription against: (1) the loser and
(2) anyone unlawfully and adversely occupying the
land at anytime up to and until the issuance of the P.D. 1529 C.A. 141
decree of registration. MATTER GOVERNED
Confirmation of
Original registration
The fundamental rule is that a writ of possession can imperfect or incomplete
proceedings
be issued not only against the original oppositors in title
a land registration case and their representatives and NATURE
successors-in-interest, but also against any person 1. In rem proceedings
unlawfully and adversely occupying said lot at any 2. Judicial
time before and up to the issuance of the final decree. 3. Decree of registration issued is conclusive and
(Heirs of Cristobal Marcos vs. De Banubar, 25 SCRA final
316 [1968]) 4. Governed by court procedure and law of
evidence
When writ of possession may not issue: When a
WHO MAY APPLY
person takes possession of a land after the issuance
(PD 1529, § 14, as (CA 141, § 48, as
of the final decree, and none of them had been a
amended by RA amended by RA
party in the registration proceedings, the writ of
115731) 115731)
possession will not issue. Such person cannot be
1. Those who by 1. Those who by
summarily ousted through a writ of possession
secured by a mere motion, and that regardless of any themselves or themselves or
title or lack of title of said persons to hold possession through their through their
of land in question, they cannot be ousted without predecessors-in- predecessors-in-
giving them their day in court in proper independent interest have been in interest have been in
proceedings. (Heirs of Cristobal Marcos vs. De open, continuous, Open, continuous,
Banubar, 25 SCRA 316 [1968]) exclusive, notorious exclusive, notorious
possession and possession and
Writ of Demolition: the complement of writ of occupation of
possession; to demolish improvements introduced by occupation of
alienable and alienable and
the defeated oppositor or his successor-in-interest
disposable lands of disposable
Means to Recover Possession the public domain agricultural lands of
1. Forcible entry under a bona fide public domain under a
2. Unlawful detainer claim of ownership for bona fide claim of
3. Accion publiciana at least 20 years ownership, for at least
4. Accion reivindicatoria immediately 20 years immediately
preceding the filing of preceding the filing of
An accion publiciana is limited to the recovery of the application for the application for
the better right of possession independent of title confirmation of title confirmation of title
or ownership. Any determination of ownership except when except when
made in connection is not final or binding. A prevented by war or prevented by war or
provisional determination of ownership, i.e. a force majeure. They force majeure. They
publiciana proceeding, does not pose a "real shall be conclusively
attack" on the Torrens title in dispute since courts shall be conclusively
presumed to have presumed to have
do not possess the jurisdiction to order the
performed all the performed all the
alteration, modification or cancellation of Torrens
titles in such cases as provided under PD 1529. conditions essential conditions essential
to a Government to a Government
Nevertheless, as held in Heirs of Cullado, the grant and shall be grant and shall be
adjudication is not a final and binding entitled to a entitled to a certificate
determination of the issue of ownership. This is Government grant of title.
not a bar for the parties or even third persons to and shall be entitled
file an action for the determination of the issue of to a certificate of title. 2. Those who have
ownership and possession (as a consequence of
acquired ownership of

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2. Those who acquired private lands or subsequently transferred to a juridical entity. In

ownership of private abandoned riverbeds this case, a corporation may apply for judicial
lands or abandoned by right of accession confirmation of title. (Dir. of Lands v. IAC and
riverbeds by right of or accretion under the ACME, G.R. No. 73002, Dec. 29, 1986.)
accession or provision of existing
accretion under the laws . Summary of rule: A juridical entity cannot acquire
existing laws ownership of disposable and alienable land nor
3. Those who have apply for the registration thereof. The disposable
3. Those who have acquired ownership and alienable land must first become private land
acquired ownership of of land in any other by operation of law through the possession and
occupation of a Filipino citizen in the manner and
land in any manner manner provided by
period required by law. The juridical entity may
provided for by Law law. then acquire ownership of such private land from
the Filipino citizen and becomes eligible to apply
Note: Where the land is for the registration thereof in its name.
owned in common, all Note: A judicial
the co-owners shall file declaration that a
the application jointly. parcel of land is public
does not preclude even
Where the land has the same applicant
been sold under pacto from subsequently
de retro, the vendor a seeking a judicial
retro may file an confirmation of his title
application for the to the same land,
original registration of provided he thereafter
the land: Provided, complies with the
however, that should provisions of Sec. 48 of
the period for C.A. 141, as amended
redemption expire and as long as said
during the pendency of public land remains
the registration alienable and
proceeding and disposable. (Dir. of
ownership to the Lands v. CA, G.R. No.
property consolidated in L-47847, Jul. 31, 1981.)
the vendee a retro,the
latter shall be
substituted for the 2. Decree of registration
applicant and may
continue the Decree of Registration (P.D. 1529, § 31.)
proceedings. 1. The decree issued by the LRA pursuant to
the order of the court
A trustee on behalf of 2. Binds the land and quiets title thereto,
his principal may apply subject only to such exceptions or liens as
for original registration may be provided by law
of any land held in trust 3. Conclusive upon and against all persons
by him, unless including the national government and all
prohibited by the branches thereof, whether or not mentioned
instrument creating the by name in the application or notice
trust.
General rule: All these persons must be natural-
Contents of the Decree (DMD-DO)
born Filipino citizens.
(P.D. 1529, § 31.)
Exceptions:
1. Date, hour and minute of its entry
- Juridical persons may lease agricultural and
2. Whether the owner is Married or unmarried,
disposable land not exceeding 1,000 hectares
and if married, the name of the spouse;
in area for a period of 25 years and renewable
provided that if the land is conjugal
for not more than 25 years (PHIL. CONST., art.
property, the decree shall be issued in the
XII, § 3.)
name of both spouses
- When the land has been previously acquired by
prescription by a natural person and
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3. If the owner is under Disability, the nature decision (which has not yet even attained finality)
of such disability, and if a minor, his age bars respondents' application.
4. Description of the land and shall set forth
the estate of the owner, and also show their It is also worth noting that almost 40 years had
relative easements, liens, attachments, and passed since the trial court determined that
other encumbrances respondents are entitled to a registration decree.
5. Other matters to be determined in One of the respondents even passed away while
pursuance of the law waiting for it. In Republic v. Heirs of Sta. Ana, one of
the key considerations for allowing the subsequent
Process of Issuing the OCT registration was the fact that a long time had passed
(P.D. 1529, § 39-42.) since the trial court ordered the issuance of a
1. Within 15 days from finality of order of registration decree. The Court intimated that to
judgment directing registration of title – reverse such a decision would run counter to the
court orders the LRA to issue decree of purpose of land registration, which is to finally settle
registration and certificate of title title to real property. Here, it is in keeping with the
2. Clerk of court will send order of court and purpose of land registration to finally allow
copies of judgment respondents to be granted a registration decree.
3. Writ of Demolition may be issued. The
court has authority to order, as a In this case, aside from the single entry "Cadastral
consequence of the writ of possession Case No. 33, LRC (GLRO) Cadastral Record No.
issued by it, the demolition of 1305," no other record, including a copy of the
improvements introduced by the defeated decision, exists to support the theory. Key
oppositor or his successor-in-interest information, such as the identity of the parties in the
4. Administrator will issue a decree of case and of the court that rendered the decision, as
registration and original and duplicate of well as the outcome thereof, has remained unknown
OCT that is signed by him, enter, and file despite the lapse of more than 40 years since the
decree of registration in LRA LRC submitted its report. No one, aside from the
5. Send to ROD the original and duplicate of Republic, has even come forward to claim any
title and certificate for entry in his interest arising from the supposed case. Practical
registration book considerations now demand that the proceedings in
6. Enter in record book, dated, signed, the RTC be no longer disturbed. (Republic v.
numbered and sealed to take effect upon Tapay, G.R. No. 157719, March 2, 2022)
date of entry
7. ROD to send notice to registered owner 3. Review of Decree of Registration;
that his owner’s duplicate is ready for Innocent Purchaser for Value (IPV);
delivery after payment of fees Rights of IPV
8. ROD shall send duplicate and note on each
certificate of title to whom it is issued Review of Decree of Registration
9. Original copy to be filed in ROD Remedy available in cases of actual fraud committed
10. Bound in consecutive order in the adjudication or confirmation of title. (P.D. 1529,
§ 32.)
Hernando Decision
In Republic v. Heirs of Sta. Ana, the LRA reported Party to File (P.D. 1529, § 32)
that a prior decree of registration had already been 1. Any aggrieved party, including persons
issued, yet the Court still decided to allow the deprived of opportunity to be heard,
subsequent registration because there was no way including the government
to verify the truthfulness of the alleged prior case. 2. Aggrieved party does not need to be an
Considering that it is the decree of registration that oppositor or original claimant in the
binds the land and quiets the title thereto, and not proceedings
the decision, the registration should be allowed with
Parties who Cannot File
much more reason here where no decree of
1. An oppositor who abandoned his claim
registration covering the subject land had yet been
2. An oppositor who had notice of the
issued and only the existence of the supposed
proceedings but failed to raise his claims

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(Crisolo v. CA, G.R. No. L-33093, Dec. 29, 7. Deliberately failing to notify parties entitled
1975.) to notice
8. Misrepresenting the identity of the land
Requisites for Review (ReDeFFiN) involved
1. Petitioner has a Real and dominical right; 9. Inducing a party not to oppose application
2. He was Deprived thereof; Deliberate failure to disclose possession
3. Through Fraud; by other persons (Ramirez v. CA, G.R. L-
4. Petition is Filed within 1 year from 38185, Sep. 24, 1986.)
issuance of the decree; and
5. The property has Not yet passed to an Note: In all cases, the allegation of fraud must be
innocent purchaser for value substantiated with specific, intentional acts to
deceive and deprive another of his right (Crisolo v.
Fraud
CA, G.R. No. L-33093, Dec. 29, 1975.)
Extrinsic fraud refers to a fraud committed to the
unsuccessful party by his opponent, preventing him
from fully exhibiting his case by keeping him away An action for reconveyance is based on Section
from court, a false promise of a compromise; or 53, paragraph 3 of Presidential Decree (PD) No.
where the defendant never had knowledge of the 1529, which provides, “In all cases of registration
suit, being kept in ignorance by the acts of the procured by fraud, the owner may pursue all his
plaintiff; or when an attorney fraudulently or without legal and equitable remedies against the parties to
authority connives at his defeat. (Baclaran Marketing such fraud without prejudice, however, to the
Corp. v. Nieva, G.R. No. 189881, Apr. 19, 2017.) rights of any innocent holder for value of a
certificate of title…” In Caro v. Court of
Different kinds of fraud exist, but the law allowing Appeals, we said that this provision should be read
fraud as a ground for a review or reopening of a land in conjunction with Article 1456 of the Civil Code,
registration decree contemplates actual and extrinsic which provides, “If property is acquired through
fraud. Actual fraud “proceeds from an intentional mistake or fraud, the person obtaining it is, by
deception practiced by means of the force of law, considered a trustee of an implied
misrepresentation or concealment of a material fact.”
trust for the benefit of the person from whom the
(Mendoza v. Valte, G.R. No. 172961, Sep. 7, 2015.)
property comes.” The law creates the obligation of
Intrinsic fraud refers to the acts of a party at a trial the trustee to reconvey the property and its title in
that prevented a fair and just determination of the favor of the true owner (Uy v. Court of Appeals,
case, but the difference is that the acts or things, like G.R. No. 173186, September 16, 2015).
falsification and false testimony, could have been
litigated and determined at the trial or adjudication of Hernando Decision
the case. (Pinausukan Seafood House v. Far East If a Deed of Donation is void ab initio due to the
Bank & Trust Co., G.R. No. 159926, Jan. 20, 2014.) illegality in its execution, the disputed land is deemed
to be simply held by petitioners in trust for
Examples of Extrinsic Fraud respondents who are the real owners. The aggrieved
1. When the applicants for registration party therefore has the right to institute a case
suppressed the fact that the petitioners against the other party for the reconveyance of the
property at any time.
(for review of decree) were the legal and
rightful owners of the land in question, and The well-settled rule is that "as long as the land
that the applicants merely possessed the wrongfully registered under the Torrens system is still
land as antichretic creditors in the name of the person who caused such
2. When the applicant omits other persons’ registration, an action in personam will lie to compel
interests and claims on the land him to reconvey the property to the real owner."
(Cardinez v. Spouses Cardinez, G.R. No. 213001,
3. Deliberate misrepresentation that the land
August 4, 2021)
involved was uncontested
4. Obtaining adjudication in the name of a Innocent Purchaser for Value
co-owner, which the applicant knew had For a petition for review of the decree to prosper, the
not been allotted to him in the partition land must not have passed to an innocent purchaser
5. Intentionally concealing facts for value.
6. Conniving with the land inspector

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Innocent purchaser for value is one who buys the was already transferred from the name of the true
property of another, without notice that some other owner to the forger, and while it remained that way,
person has a right or interest in such property and the land was subsequently sold to an innocent
pays the full price for the same, at the time of such purchaser. For then, the vendee had the right to rely
purchase or before he has notice of the claims or upon what appeared in the certificate.” (Fule v.
interest of some other person in the property. One Legare, G.R. No. L-17951, February 28, 1963)
claiming to be an innocent purchaser for value has
the burden of proving such status. (Leong v. See, Where innocent third persons, relying on the
G.R. No. 194077, Dec. 3, 2014.) correctness of the certificate of title thus issued,
acquire rights over the property, the court cannot
Note: Where innocent third persons who rely on the disregard such rights and order the total
correctness of the certificate of title thus issued cancellation of the certificate. (Sps. Peralta v. Heirs
acquired rights over the property, the court cannot of Abalon, G.R. No. 183448, June 30, 2014)
disregard such rights and order the total cancellation
of the certificate. (Tenio-Obsequio v. Court of As a general rule, where there is nothing in the
Appeals, G.R. No. 107967, Mar. 1, 1994.) certificate of title to indicate any cloud or vice in the
ownership of the property, or any encumbrance
Note: “the defense of having purchased the property thereon, the purchaser is not required to explore
in good faith may be availed of only where registered further than what the Torrens Title upon its face
land is involved and the buyer had relied in good faith indicates in quest for any hidden defect or inchoate
on the clear title of the registered owner." It does not right that may subsequently defeat his right thereto.
apply when the land is not yet registered with the (State Investment House v. CA, G.R. No. 115548.
Registry of Deeds. (Heirs of Gregorio Lopez v. March 5, 1996).
Development Bank of the Phils., G.R. No. 193551,
Nov. 19, 2014.) E. AN ACT IMPROVING THE
CONFIRMATION PROCESS FOR
Other Grounds for Review IMPERFECT LAND TITLES (RA 11573)
1. Fatal infirmity of the decision for want of due
process 1. Amendments to Commonwealth Act No.
2. Lack of jurisdiction of the court 141 by R.A. 11573
Rights of IPV a. Who are entitled to have a free

If the same thing should have been sold to different patent
vendees, the ownership shall be transferred to the
person who may have first taken possession thereof The following natural-born citizens of the Philippines
in good faith, if it should be movable property (Art. shall be entitled to have a free patent issued for tract
1544, Civil Code). or tracts not to exceed twelve (12) hectares:
1. Not the owner of more than twelve (12)
Every registered owner receiving certificate of title in hectares of land;
pursuance of a decree of registration, and every 2. For at least twenty (20) years prior to the
subsequent purchaser of registered land taking a filing of an application for agricultural free
certificate of title for value and good faith, shall hold patent, has continuously occupied and
the same free from all encumbrances except those cultivated, either personally or through a
noted in said certificate and any of the following predecessor-in-interest, a tract or tracts of
encumbrances which may be subsisting (Sec. 44, alienable and disposable agricultural public
P.D. 1544). lands subject to disposition; and
3. Paid the real estate tax thereon (Sec. 2, R.A.
As such, a defective title–– or one the procurement 11573).
of which is tainted with fraud and misrepresentation
–– may be the source of a completely legal and b. Where to file applications for
valid title, provided that the buyer is an innocent agricultural free patents
third person who, in good faith, relied on the
correctness of the certificate of title, or an innocent All applications for agricultural free patents shall be
purchaser for value (Locsin v. Hizon, G.R. No. filed before the Community Environment and Natural
204369, September 17, 2014). Resources Office (CENRO) of the Department of
Environment and Natural Resources (DENR).
As a general rule, a forged deed is null and void
thus, it cannot convey title. However, an exception For provinces with no CENRO, the application shall
to this is in an instance “where the certificate of title be filed with the Provincial Environment and Natural
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Resources Office (PENRO) (Sec. 3, R.A. 11573). time, whether personally or through their duly
authorized representatives, in the Regional Trial
c. Application process for Court of the province where the land is located, for
agricultural free patents confirmation of their claims and the issuance of a
certificate of title to land not exceeding twelve (12)
1. The CENRO or the PENRO will process the hectares:
application within one hundred and twenty 1. Those who by themselves or through their
(120) days from filing, including compliance predecessors-in-interest:
with the required notices and other legal (a) Have been in open, continuous,
requirements. exclusive, and notorious
2. The CENRO shall forward its possession and occupation of
recommendation to the following: alienable and disposable
(a) PENRO - area of the land is below agricultural lands of the public
five (5) hectares; domain;
(b) DENR Regional Director - area of (b) Under a bona fide claim of
the land is at least five (5) up to ten ownership;
(10) hectares; and (c) For at least twenty (20) years
(c) Secretary of the DENR - area of the immediately preceding the filing of
land is more than (10) up to twelve the application for confirmation of
(12) hectares. title;
3. Upon receipt of the recommendation, or (d) Except when prevented by war or
upon the completion of the processing of the force majeure.
application within the reglementary period, They shall be conclusively presumed to
the PENRO, DENR Regional Director, or the have performed all the conditions essential
Secretary of the DENR, as the case may be, to a Government grant and shall be entitled
shall approve or disapprove the application to a certificate of title under the provisions of
for agricultural free patent within five (5) this Chapter.
days. 2. Those who have acquired ownership of
4. In case of approval, the agricultural free private lands or abandoned riverbeds by
patent shall be issued. right of accession or accretion under the
provision of existing laws; and
In case of conflicting claims among different 3. Those who have acquired ownership of land
claimants, the parties may seek the proper in any other manner provided by law (Sec.
administrative and judicial remedies (Id.). 5, R.A. 11573).
Hernando Decision 2. Amendments to Presidential Decree No.

An applicant for a free patent does not claim the land 1529
as his or her private property but acknowledges that
the land is still part of the public domain. An applicant a. Who may apply for registration of
who chooses to apply for a free patent acknowledges title to land
that the land covered by the application still belongs
to the government and is still part of the public The following persons may file an application for
domain. registration of title to land, not exceeding twelve (12)
hectares, in the proper Regional Trial Court in the
Under Section 44 of C.A. No. 141, an applicant is province where the land is located, whether
required to prove continuous occupation and personally or through duly authorized
cultivation of agricultural land subject to disposition representatives:
since July 4, 1926 or prior thereto and payment of 1. Those who by themselves or through their
real estate taxes while the land has not been predecessors-in-interest:
occupied by other persons. (Valdez v. Heirs of a. Have been in open, continuous,
Catabas, G.R. No. 201655, August 24, 2020) exclusive and notorious possession
and occupation of alienable and
d. Confirmation of claims and disposable lands of the public
issuance of certificate of titles domain not covered by existing
certificates of title or patents;
The following citizens of the Philippines occupying b. Under a bona fide claim of
lands of the public domain or claiming to own any ownership for at least twenty (20)
such lands or an interest, but whose titles have years immediately preceding the
perfected or completed, may file a petition at any filing of the application for
confirmation of title;
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c. Except when prevented by war or subject land under a bona fide claim of
force majeure. ownership has been shortened from
They shall be conclusively presumed to possession "since June 12, 1945 or earlier"
have performed all the conditions essential to twenty (20) years immediately preceding
to a Government grant and shall be entitled the filing of the application for confirmation
to a certificate of title under this section; of title (Superiora Locale v. Republic, G.R.
2. Those who have acquired ownership of No. 242781, June 21, 2022).
private lands or abandoned riverbeds by
right of accession or accretion;
3. Those who have acquired ownership of land 3. Proof that the Land is Alienable and
in any other manner provided for by law Disposable
(Sec. 6, R.A. 11573).
For judicial confirmation of imperfect titles filed under
b. Land owned in common Presidential Decree No. 1529, a duly signed
certification by a duly designated DENR geodetic
All the co-owners shall file the application jointly (Id.). engineer that the land is part of alienable and
disposable agricultural lands of the public domain is
sufficient proof that the land is alienable.
c. Land sold under pacto de retro a. The certification shall be imprinted in the
approved survey plan submitted by the
The vendor a retro may file an application for the applicant in the land registration court.
original registration of the land. However, if the period b. In the imprinted certification in the plan,
for redemption expires during the pendency of the there must be a sworn statement by the
registration proceedings and ownership to the geodetic engineer that the land is within the
property is consolidated in the vendee a retro, the alienable and disposable lands of the public
latter shall be substituted for the applicant and may domain.
continue the proceedings. (Id.) a. It shall state the applicable Forestry
Administrative Order, DENR
d. Trustee Administrative Order, Executive
Order, Proclamations and the Land
A trustee on behalf of the principal may apply for Classification Project Map Number
original registration of any land held in trust by the covering the subject land.
trustee, unless prohibited by the instrument creating
the trust (Id.). Should there be no available copy, it is sufficient that
the Land Classification (LC) Map Number, Project
e. Length of Possession Number, and date of release indicated in the land
classification map be stated in the sworn statement
The required length of possession is now twenty (20) with a declaration:
years immediately preceding the filing of the 1. That the land classification map is existing in
application (Superiora Locale v. Republic, G.R. No. the inventory of LC Map records of the
242781, June 21, 2022). National Mapping and Resource Information
Authority (NAMRIA); and
In sum, under the new provision, the applicant for 2. It is being used by the DENR as a land
original registration of title to land must establish the classification map (Sec. 7, R.A. 11573).
following:
1. That the subject land, which does not 4. Penalties
exceed 12 hectares, forms part of
disposable and alienable lands of the public In addition to the penalties provided in the Revised
domain; Penal Code and in the Philippine Geodetic
2. That the applicants, by themselves or Engineering Act of 1998, the following shall be
through their predecessors-in-interest, have penalized with a fine of not less than One hundred
been in open, continuous, exclusive, and thousand pesos (P100,000.00) but not more than
notorious possession and occupation Five hundred thousand pesos (P500,000.00), or
thereof; and imprisonment of not less than six (6) months but not
3. That the possession is under a bona exceeding six (6) years, or both, at the discretion of
fide claim of ownership for at least twenty the court:
(20) years immediately preceding the filing 1. A geodetic engineer who shall prepare,
of the application for confirmation of title. willingly or through gross inexcusable
Thus, the length of time during which negligence, a projection map that contains
the application must have possessed the
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false, fraudulent, or incomplete data or • The RTC and CA are directed, upon proper
information; and motion or motu proprio, to permit the
2. DENR official who shall certify and approve presentation of additional evidence on land
such protection map (Sec. 8, R.A. 11573). classification status based on the
parameters set forth in this new law.
5. Restrictions for Free Patents o Additional evidence shall consist of
a certification issued by the DENR
The following provisions of R.A. 11231 shall be geodetic engineer which:
applicable to Free Patents issued under the new law: ▪ States that the land subject
a) Restrictions on free patents are removed to of the application for
allow the efficient and effective utilization of registration has been
these lands to contribute to wealth creation, classified as alienable and
entrepreneurship, and economic disposable land of the
development (Sec. 2, Agricultural Free public domain;
Patent Reform Act). ▪ Bears reference to the
b) Agricultural public lands alienated or applicable Forestry
disposed in favor of qualified public land Administrative Order,
applicants under R.A. No. 11573, shall not DENR Administrative
be subject to restrictions imposed regarding Order, Executive Order, or
acquisitions, encumbrances, conveyances, proclamations classifying
transfers, or dispositions. Agricultural free the land as such; and
patent shall now be considered as title in fee ▪ Indicates the number of the
simple and shall not be subject to any LC Map covering the land.
restriction on encumbrance or alienation. o In the absence of a copy of the
(Sec. 3, Agricultural Free Patent Reform relevant issuance classifying the
Act). lad as alienable and disposable, the
certification must additionally state:
6. Guidelines on the application of R.A. ▪ The release date of the LC
11573, as laid down in the case of Map; and
Republic v. Pasig Rizal Co., Inc. (2022). ▪ The Project Number.
The certification must confirm that
• R.A. 11573 shall apply retroactively to all the LC Map forms part of the
applications for judicial confirmation of title records of NAMRIA and is precisely
which remain pending as of September 1, being used by the DENR as a land
2021, or the date when the law took effect. classification map.
These include all applications pending o The DENR geodetic engineer must
resolution at the first instance before all be presented as witness for proper
Regional Trial Courts, and applications authentication of the certification in
pending appeal before the Court of Appeals. accordance with the Rules of Court
• Applications for judicial confirmation of title (Republic v. Pasig Rizal Co., Inc.,
filed on the basis of PD 1529 and which G.R. No. 213207, February 15,
remain pending before the RTC or CA as of 2022).
September 1, 2021 shall be resolved
following the period and manner of 7. Curative Nature of R.A. No. 11573
possession required under this law.
o Beginning September 1, 2021, Section 1 of R.A. No. 11573 states its objective: "to
proof of “open, continuous, simplify, update and harmonize similar and related
exclusive and notorious possession provisions of land laws in order to simplify and
and occupation of alienable and remove ambiguity in its interpretation and
disposable lands of the public implementation. It is also the policy of the State to
domain not covered by existing provide land tenure security by continuing judicial
certificates of title or patents under and administrative titling processes."
a bona fide claim of ownership for
at least twenty (20) years Through the declaration of the intention to simplify
immediately preceding the filing of and remove ambiguity in the interpretation and
the application for confirmation” implementation of land laws, R.A. No. 11573 is
shall be sufficient ad shall entitle the curative in nature (Superiora v. Republic, G.R. No.
applicant to a degree of registration. 242781, June 21, 2022).

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“R.A. No. 11573 makes valid that which, before the irrigation canal or lateral thereof has been
enactment of the statute, was invalid because the determined
applicant can now prove possession under a bona 5. Any Disposition of the property or limitation
fide claim of ownership for only twenty (20) years on the issue thereof pursuant to P.D. 27 or
immediately preceding the filing of the application, any other laws or regulations on agrarian
instead of proving possession since June 12, 1945 or
reform
earlier” (Superiora Locale v. Republic, G.R. No.
242781, June 21, 2022).
(2) Incontrovertible and indefeasible
F. CERTIFICATE OF TITLE General Rule: Upon the expiration of 1 year from
and after the entry of the decree of registration in the
Torrens Title
LRA, the decree and the corresponding certificate of
A Torrens Title is a certificate of ownership issued
title become incontrovertible and indefeasible.
under the Torrens System, through the ROD, naming
and declaring the owner of the real property
Exceptions: (PNF)
described therein, free from all liens and
1. If Previous valid title of the same land exists
encumbrances, except such as may be expressly
2. When land covered is Not capable of
noted therein or otherwise reserved by law. (P.D.
1529, § 44) registration
3. When acquisition of certificate is attended
Note: A title once registered cannot be impugned, by Fraud
altered, changed, modified, enlarged, or diminished
except in a direct proceeding permitted by law, The certificate is the best evidence of ownership and
usually for the protection of innocent third persons. shows exactly the real interest of its owner, subject
to certain exceptions.
Attributes of a Torrens Certificate of Title
(FINIP) EPs and CLOAs become indefeasible after 1
1. Free from liens and encumbrances year from registration. (R.A. 9700)
2. Incontrovertible and indefeasible
3. Not subject to collateral attack The DAR Secretary has exclusive jurisdiction to
4. Imprescriptible cancel EPs and CLOAs or any title issued under
5. Presumed valid and devoid of flaws the Agrarian Reform Law. (Id.).
The rule on the incontrovertible nature of a certificate

(1) Free from liens and encumbrances
of title applies when what is involved is the validity of
the OCT, not when it concerns that of the TCT.
General Rule: Claims and liens of whatever
(Arguelles v. Timbancaya, G.R. No. L-29052, July 30,
character existing against the land prior to the
1976)
issuance of the certificate of title are cut off by such
certificate and the certificate so issued binds the
whole world, including the government. Hernando Decision
A certificate of title registered under the Torrens
Exceptions: (CNT-PD) System serves as proof of an incontrovertible title
1. Those noted on the Certificate over the property in favor of the individual whose
name appears on the title. With the emergence of the
2. Liens, claims, or rights arising or existing
Torrens System, the integrity and conclusiveness of
under the laws and the Constitution, which a certificate of title may be guaranteed and
are Not by law required to appear on record preserved. (Heirs of Latoja v. Heirs of Latoja, G.R.
in the Register of Deeds in order to be valid No. 195500, March 17, 2021)
3. Unpaid real estate Taxes levied and
assessed within 2 years immediately Since the period of one year had already lapsed
preceding the acquisition of any right over when Y questioned the OCT's validity on the ground
the land by an innocent purchaser for value of fraud via his Answer, X’s OCT had already become
4. Any Public highway, or private way indefeasible and, until cancelled in an appropriate
established or recognized by law, or any direct proceeding, remains to be valid. Thus, X has a
government irrigation, canal or lateral better right of possession because his right is based
on ownership recognized by OCT P-61499 registered
thereof, if the certificate of title does not
and titled under his name. The age-old rule that the
state the boundaries of such highway or person who has a Torrens title over the land is
entitled to possession thereof squarely applies in his
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favor. (Heirs of Cullado v. Gutierrez, G.R. No. seek the recovery of the property. On the other hand,
212938, July 30, 2019) a collateral attack transpires when, in an action to
obtain a different relief, an attack is incidentally made
The sole remedy of the land owner whose property against the judgment.
has been wrongfully or erroneously registered in
another's name is, after one year from the date of the A collateral attack is prohibited because the integrity
decree, not to set aside the decree but, respecting of land titles and their indefeasibility are guaranteed
the decree as incontrovertible and no longer open to by the Torrens system of registration. The Torrens
review, to bring an ordinary action in the ordinary system was adopted precisely to quiet titles to lands
court of justice for reconveyance or, if the property and to put a stop forever to any question of legality of
has passed into the hands of an innocent purchaser the titles, except claims which were noted at the time
for value, for damages. (Heirs of Tomakin v. Heirs of of registration or which may arise subsequent
Navares, G.R. No. 223624, July 17, 2019) thereto. By guaranteeing the integrity of land titles
and their indefeasibility, the Torrens system gives the
(3) Not subject to collateral attack registered owners complete peace of mind. (Garcia
v. Esclito, G.R. No. 207210, March 21, 2022)
A certificate of title shall not be subject to collateral
attack. It cannot be altered, modified, or cancelled What cannot be collaterally attacked is the certificate
except in a direct proceeding in accordance with the of title and not the title itself. Title as a concept of
law. (P.D. 1529, § 48) ownership should not be confused with the certificate
of title as evidence of such ownership although both
An action is an attack on a title when the object of the are interchangeably used. (Lacbayan v. Samoy, G.R.
action is to nullify the title, and thus challenge the No. 165427, March 21, 2011)
judgment or proceeding pursuant to which the title
was decreed. Hernando Decision
To be clear, what cannot be collaterally attacked is
There is a direct attack when the object of an action the certificate of title, and not the title itself. The
is to annul or set aside such judgment or enjoin its Certificate referred to is the document issued by the
enforcement. Register of Deeds known as the Transfer Certificate
of Title or TCT. In contrast, the title referred to by law
There is an indirect or collateral attack when, in an means ownership, which is represented by that
action to obtain a different relief, an attack on the document. Title as a concept of ownership should not
judgment or proceeding is nevertheless made as an be confused with the certificate of title evidencing
incident thereof. (Sampaco v. Lantud, G.R. No. such ownership.
163551, July 18, 2011)
In any event, placing a land under the Torrens
In deference to the conclusiveness and indefeasibility system does not mean that ownership thereof can no
of Torrens titles, a certificate of title can only be longer be attacked or disputed. A certificate cannot
subject to a direct attack. The attack is considered always be considered as conclusive evidence of
direct when the object of an action is to annul or set ownership. (Heirs of Marquez v. Heirs of Hernandez,
aside such proceeding or enjoin its enforcement. G.R. No. 236826, March 23, 2022)
Conversely, an attack is indirect or collateral when,
in an action to obtain a different relief, an attack on The question on the validity of a Torrens title,
the proceeding is nevertheless made as an incident whether fraudulently issued or not, can only be
thereof. An action to attack a certificate of title may raised in an action expressly instituted for that
be an original action or a counterclaim, in which a purpose. The action for the declaration of nullity of
certificate of title is assailed as void. (Agbayani v. deed of sale commenced by the petitioners in the
Lupa Realty Holding Corp., G.R. No. 201193, June RTC is not the direct proceeding required by law to
10, 2019) attack a Torrens certificate of title. (Tapuroc v.
Loquellano de Mende, G.R. No. 152007, 2007)
Hernando Decision
PD 1529 states that a certificate of title shall not be Hernando Decision
subject to a collateral attack and cannot be altered, An action for reconveyance based on fraud is a direct
modified, or cancelled except in a direct proceeding attack on a Torrens title. It follows that despite the
in accordance with law. A direct attack is an action finality accorded to a Torrens title, reconveyance may
whose main objective is to annul, set aside, or enjoin prosper as an equitable remedy given to the rightful
the enforcement of a judgment pursuant to which a owner of a land that was erroneously registered in the
registration decree is issued, if the judgment has not name of another. This action recognizes the validity
yet been implemented, or if already implemented, to of the registration and its incontrovertible nature; it
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does not question the indefeasibility of the Torrens no binding force and effect. (Estoesta v. CA, G.R.
title. 74817, November 8, 1989)
An allegation of fraud in an action for reconveyance (4) Imprescriptible

must have two requisites. First, that the individual
seeking reconveyance must prove entitlement or Even adverse, notorious and continuous possession
ownership over the property in question, and second, under claim of ownership for the period fixed by law
that fraud must be established by clear and is ineffective against a Torrens title. (JM Tuason and
convincing evidence, not just based on mere Co. Inc. v. CA, G.R. No. L-23480, September 11,
surmises or conjectures. (Heirs of Latoja v. Heirs of 1979)
Latoja, G.R. No. 195500, March 17, 2021)
The fact that the title to the land was lost does not
When it comes to an accion publiciana, the defense mean that the land ceased to be registered land
of ownership (i.e., that the defendant, and not the before the reconstitution of its title. It cannot perforce
plaintiff, is the rightful owner) will not trigger a be acquired by prescription. (Ruiz v. CA, G.R. No. L-
collateral attack on the plaintiff’s Torrens or 29213, 1977)
Certificate of Title because the resolution of the issue
of ownership is done only to determine the issue of Laches may be invoked to bar reconveyance of land
possession.” (Heirs of Alfred Cullado v. Dominic V. to the registered owner only if there are intervening
Gutierrez, G.R. No. 212938, July 30, 2019.) rights of third persons which may be affected or
prejudiced if such land is returned to the registered
Exceptions: owner. (De Lucas v. Gamponia, G.R. No. L-9335,
It should not be overlooked that private respondent 1956)
filed a counterclaim against petitioner, claiming
ownership over the land and seeking damages. With respect to a claim of acquisitive prescription, it
Hence, we could rule on the question of the validity is baseless when the land involved is a registered
of the certificate of title for the counterclaim can be land since no title to registered land in derogation of
considered a direct attack on the same. A that of the registered owner shall be acquired by
counterclaim can be considered a complaint, only adverse possession. (Feliciano v. Zaldivar, G.R. No.
this time, it is the original defendant who becomes the 162593, 2006)
plaintiff. It stands on the same footing and is to be
tested by the same rules as if it were an independent Corp A has not acquired the right to possess the
action. subject property. According to Section 47 of
Presidential Decree No. 1529, "no title to registered
In an analogous case, the Court ruled on the validity land in derogation of the title of the registered owner
of a certificate of title despite the fact that the original shall be acquired by prescription or adverse
action instituted before the lower court was a case for possession." There can be no acquisitive prescription
recovery of possession. The Court reasoned that with respect to a titled parcel of land. In Umbay v.
since all the facts of the case are before it, to direct Alecha, the Court explained that the right to recover
the party to institute cancellation proceedings would possession of registered land is imprescriptible on
be needlessly circuitous and would unnecessarily the part of the registered owner because possession
delay the termination of the controversy. is a mere consequence of ownership. (Heir of
(Development Bank of the Philippines v. CA, G.R. Cardenas v. The Christian and Missionary Alliance
129471, April 28, 2000) Churches of the Philippines, Inc., G.R. No. 222614,
March 20, 2019)
Although, ordinarily, a title becomes incontrovertible
one year after it is issued pursuant to a public grant, (5) Presumed valid and devoid of flaws
the rule does not apply when such issuance is null
and void. An action to declare the nullity of that void This is also called the “Mirror Doctrine.”
title does not prescribe; in fact, it is susceptible to
direct, as well as to collateral attack. (Ferrer v. Hon. General Rule: A Torrens certificate of title is
Antonio Bautista, G.R. No. L-46963, March 14, 1994) presumed to have been regularly issued, valid, and
without defects. The buyer has the right to rely upon
A null and void judgement is susceptible to direct as the face of the Torrens title and to dispense with the
well as collateral attack. Directly a void judgement trouble of inquiring further.
may be question thru an action for annulment or it
may be attacked collaterally by assailing its validity in Exception: When he has actual knowledge of facts
another action where it is invoked. This is because a and circumstances that would impel a reasonably
judgment rendered by a court without jurisdiction has cautious man to make inquiry or when the purchaser
has knowledge of a defect or lack of title in his vendor
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or of suffient facts to induce a reasonably prudent Transfer Certificate of Title (TCT) - the title issued
man to inquire into the status of the title of the by the ROD in favor of the transferee to whom the
property in litigation (Amoguis v. Ballado, G.R. No. ownership of the already registered land had been
189626, Aug. 20, 2018) transferred by virtue of a sale or other modes of
conveyance.
Registered land or the owners thereof are not
relieved from the following
- From any rights incident to the relation of husband Modes of acquiring title
and wife, landlord and tenant Mode Description/Requisites
Public Grant A conveyance of public land by
- From liability to attachment or levy on execution
the government to a private
- From liability to any lien of any description
individual
established by law on the land and buildings Acquisitive Requisites: (OCEN)
thereon, or in the interest of the owner in such land Prescription Open,
or buildings Continuous,
- From any right or liability that may arise due to Exclusive, and
change of the law on descent Notorious possession
- From the rights of partition between co-owners
- From the right of the government to take the land If in good faith & with just title: 10
by eminent domain yrs. uninterrupted possession is
- From liability to be recovered by an assignee in required
insolvency or trustee in bankruptcy under the laws
If in bad faith & without just title:
relative to preferences 30 yrs. continuous possession is
- From any other rights or liabilities created by law required
and applicable to unregistered land
Note: If public land is involved, it
Where certificate of title is obtained by a trustee must be (1) alienable and
- Trustee who obtains a Torrens title in his name, disposable; and (2) declared or
over property held in trust by him for another, manifested as no longer needed
cannot repudiate the trust relying on the for public service or the
registrations, such being one of the limitations development of national wealth.
upon the finality of title.
- Trustee could not perforce legally convey A property registered under the
Torrens System is not subject to
ownership of the registered property in her will for
prescription.
she is not the absolute owner thereof.
Prescription is unavailing against
Conclusive evidence as to Philippine courts the registered owner and his
Torrens Title may be received in evidence in all hereditary successors.
Philippine courts and shall be conclusive as to all Accretion Requisites: (G-A-C)
matters contained therein, principally as to the - The deposit of soil or sediment
identity of the landowner, except in so far as provided is Gradual and imperceptible;
in the Land Registration Act. - The land where accretion takes
place is Adjacent to the banks
Evidence of indefeasibility of title of rivers or the seacoast; and
A Torrens Certificate is evidence of indefeasible title - It is the result of the natural
of property in favor of the person whose name Current of the waters
appears therein—such holder is entitled to the (river/sea) and not because of
possession of the property until his title is nullified. human intervention. (Binalay v.
(Pascual v. Coronel, G.R. No. 159292, 2007) Manalo, G.R. No. 92161, March
18, 1991)
Types of Torrens Certificate of Title
1. Original Certificate of Title (OCT) - the Note: Accretion to registered
first title issued in the name of the registered owner lands needs new registration.
by the ROD covering a parcel of land which had
been registered by virtue of a judicial or The alluvial deposit to the bank
administrative proceeding. of the river belongs to the
riparian owner; the accretion
does not automatically become
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part of his registered land and he

must still apply for the Note: Whoever first acquires title to a piece of land
registration thereof. shall prevail and where there are more than one
certificates of title, the person holding the prior
There must be NO human certificate is entitled to the land. The rule refers to the
intervention. date of the certificate of title not the date of the filing
for application. (Heirs of Lopez v. De Castro, G.R.
The current causing the alluvial No. 112905, Feb. 3, 2000)
deposit must be from a river. If it
is from the sea, the deposit will G. SUBSEQUENT REGISTRATION
pertain to the State (Government
of the Phils. V. Cabangis, 53 Phil. Subsequent Registration
112, March 27, 1929). Involves incidental matters after original registration,
Reclamation Filling of submerged land by brought before the land registration court by way of
deliberate act and reclaiming title motion or petition and filed by the registered owner or
thereto. a party in interest.
Conditions:
Necessity and effects of registering voluntary
- Must be initially owned by the
and involuntary instruments
government
Except for a will that purports to convey or affect a
- May be subsequently
registered land, the mere execution of the deeds of
transferred to private owners
sale, mortgage, or lease or other voluntary
documents serves only 2 purposes:
Note: The reclaimed land formed
4. As a contract between the parties thereto;
through human intervention is
and
public land and belongs to the
5. As evidence of authority to the ROD to
State. It has to be recovered first
register such documents. (Sec. 51, P.D.
by Special Patent in the name of
1529)
the Republic of the Philippines or
a government agency, and only
then may portions thereof be The recording of the sale with the proper Registry of
transferred by sale or other Deeds and the transfer of the certificate of title in the
conveyances to private persons. name of the buyer are necessary only bind third
parties to the transfer of ownership. (Tamayo v.
Lacambra, G.R. 244232, Nov. 3, 2020)
Voluntary 1. Private grant
Transfer 2. Voluntary execution of deed of
conveyance Registration as the operative act of conveyance
- Contractual relationship The registration of the instrument is the operative
between the parties act that conveys ownership or affects the land insofar
- Consensual as third persons are concerned.
Involuntary - No consent from the owner of
Alienation land As between the seller and the buyer, the transfer of
- Forcible acquisition by the ownership takes effect upon the execution of a public
State instrument conveying the real estate. Registration of
Descent or Hereditary succession to the the sale with the Registry of Deeds, or the issuance
Devise estate of deceased owner of a new certificate of title, does not confer ownership
Emancipa- The purpose of the same is to on the buyer. Such registration or issuance of a new
tion ameliorate the sad plight of certificate of title is not one of the modes of acquiring
Patent/Grant tenant-farmers ownership. (Tamayo v. Lacambra, G.R. No. 244232,
(Certificate Nov. 3, 2020)
of Land Note: Title to land acquired
Ownership pursuant to the land reform Registration as notice
Award) program of the government is not Registration creates a constructive notice to the
transferable for a period of 10 whole world of such voluntary or involuntary
years except by (a) hereditary instrument or court writ or process. (P.D. 1529, §52)
succession, (b) to the
government, (c) to the LBP, or Registration is merely a specie of notice. It is a
(d) to other qualified ministerial act by which an instrument is sought to be
beneficiaries. (R.A. 6657, § 27) inscribed in the records of the Office of the Register

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of Deeds and annotated at the back of the certificate 3344 and not under the Land Registration Act, the
of title covering the land subject of the instrument. It sale is not considered registered and the registration
is not a declaration by the State that such an of the deed does not operate as constructive notice
instrument is a valid and subsisting interest in the to the whole world. (Mactan-Cebu International
land. The law on registration does not require that Airport Authority v. Spouses Edito, G.R. No. 171535,
only valid instruments shall be registered. The June 5, 2009)
purpose of registration is merely to give notice.
(Autocorp Group v. CA, G.R. No. 157553) “Rule of Notice”
Registration of instruments must be done in the General Rule: There is an irrefutable presumption
proper registry in order to effect and bind the land. that the purchaser has examined every instrument
Prior to the Property Registration Decree of 1978, the affecting the title. He is charged with notice of every
Land Registration Act governed the recording of fact shown by the record and is presumed to know
transactions involving registered land, i.e., land with every fact which an examination of the record would
Torrens title. On the other hand, Act No. 3344, as have disclosed (Garcia v. CA, G.R. Nos. L-48971,
amended, provided for the system of recording of Jan. 22, 1980).
transactions over unregistered real estate without
prejudice to a third party with a better right. Exception: There is no effect of constructive notice
when there is fraud involved in the transaction. (Id.)
Accordingly, if a parcel of land covered by a Torrens
title is sold, but the sale is registered under Act No.
Overview of Voluntary and Involuntary Dealings

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Current doctrine thus seems to be that entry alone (in

VOLUNTARY INVOLUNTARY the primary entry book) produces the effect of
DEALINGS DEALINGS registration, whether the transaction entered is a
Refer to deeds, Refer to writs or orders voluntary or an involuntary one, so long as the
instruments, or or processes issued by registrant has compiled with all that is required of him
documents which are a court of record for purposes of entry and annotation, and nothing
results of the free and affecting registered more remains to be done but a duty solely on the
voluntary acts of the land which by law register of deeds (Development Bank of the
parties thereto should be registered to Philippines v. The Acting Register Deeds of Neuva
be effective, and also to Ecija, UDK No. 7671, June 23, 1988)
such instruments which
are not the willful acts 1. VOLUNTARY DEALINGS
of the registered owner
and which may have Rule: Registration of the instrument is the operative
been executed even act that transmits or transfers title. Without
without his knowledge registration, the instrument is binding only between
or against his consent the parties.
Sale Attachment Exception: Actual knowledge of an unregistered
Real property Injunction dealing is equivalent to registration, insofar as the
mortgage Mandamus third person with knowledge is concerned.
Lease Sale on execution of
Pacto de retro sale judgment or sales for Voluntary instruments such as contracts of sale,
Extra-judicial taxes contracts to sell, and conditional sales are registered
settlement Adverse claims by presenting the owner's duplicate copy of the title
Free or homestead Notice of lis pendens for annotation, pursuant to Sections 51 to 53 of PD
patent 1529 (Logarta v. Mangahis, G.R. No. 213568, July 5,
Powers of attorney 2016).
Trusts
The reason for requiring the production of the owner's
The owner's duplicate The owner's duplicate duplicate certificate in the registration of a voluntary
certificate of title must certificate of title need instrument is that, being a willful act of the registered
be presented to record not be presented. owner, it is to be presumed that he is interested in
the deed in the registry registering the instrument and would willingly
and to make a Entry of the instrument surrender, present or produce his duplicate certificate
memorandum on the in the ROD's daybook is of title to the Register of Deeds in order to accomplish
title. sufficient notice to all such registration (Id.).
persons, even if the
An innocent purchaser owner's duplicate The exception to this rule is when the registered
for value becomes the certificate of title is not owner refuses or fails to surrender his duplicate copy
registered owner once presented. of the title, in which case the claimant may file with
he: the Register of Deeds a statement setting forth his
adverse claim (Id.).
Presents and files with
the ROD a duly When a party has knowledge of a prior existing
notarized deed of interest which is unregistered at that time he acquired
conveyance and the a right to the same land, his knowledge of that prior
same is entered in the unregistered interest has the effect of registration as
daybook, to him. Knowledge of an unregistered sale is
Surrenders or presents equivalent to registration. (Spouses Chua v.
the owner’s duplicate Gutierrez, G.R. No. 172316, Dec. 8, 2010)
certificate of title
covering the land Under the Torrens system, a sale of property that is
not registered under the Torrens system is binding
conveyed, and
only between the buyer and the seller and does not
Pays the registration affect innocent third persons. The only exception to
fees. this is “knowledge of an unregistered sale is
equivalent to registration.” (Evy Construction v.

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Valiant Roll Forming Sales Corp., G.R. No. 207938, 2. Where the Owner still holds a valid and
Oct. 11, 2017) existing certificate of title covering the same
property. The law protects the lawful holder
Mirror Doctrine of a registered title over the transfer of a
A person dealing with registered land may rely on the vendor bereft of any transmissible right
correctness of the certificate of title issued. The law
(Tomas v. Tomas, G.R. No. L-36897, June
does not oblige him to go beyond the certificate to
determine the condition of the property 25, 1980).
(Locsin v. Hizon, G.R. No. 204369, Sept. 17, 2014) 3. When the purchaser is in Bad faith (Egao v.
CA, G.R. No. 79787, June 29, 1989).
Where there is nothing in the certificate to indicate 4. Where the land is bought not from the
any cloud or vice in the ownership of the property or registered owner but from one whose rights
any encumbrance thereon, the purchaser is not have been Merely annotated on the
required to explore further than what the Torrens Title certificate of title (Quiñiano v. CA, G.R. No.
indicates upon its face to find hidden defects or L-23024, May 31, 1971).
claims that may subsequently defeat his right. (Id.) 5. When there are sufficiently strong
Indications to impel closer inquiry into the
Every person dealing with registered land may safely
rely on the correctness of the certificate of title issued location, boundaries, and condition of the lot
therefore. Even if a decree in a registration (Francisco v. CA, G.R. No. L-30162, Aug.
proceeding is infected with nullity, still, an innocent 31, 1987).
purchaser for value relying on a Torrens title issued
in pursuance thereof is protected (Cruz v. CA & Examples of “strong indications”:
Suzara, G.R. No. 120122, Nov. 6, 1997). When the land sold is in possession of a
person other than the seller
If land is registered and is covered by a certificate of When there are occupants other than the
title, any person may rely on the correctness of the registered owner
certificate of title, and he or she is not obliged to go
beyond the four (4) corners of the certificate to 6. When the certificate of title contains a notice
determine the condition of the property. This rule of Lis pendens
does not apply, however, when the party has actual
7. When the purchaser had full Knowledge of
knowledge of facts and circumstances that would
impel a reasonably cautious man to make such flaws and defects of the title (Bernales v.
inquiry or when the purchaser has knowledge of a IAC, G.R. Nos. 71490-91, June 28, 1988).
defect or the lack of title in his vendor or of sufficient 8. When the purchaser buys from an Agent
facts to induce a reasonably prudent man to inquire and not from the registered owner
into the status of the title of the property in litigation.
(Amoguis v. Ballado, G.R. No. 189626, Aug. 20, Mirror Doctrine not applicable to unregistered
2018) lands
Notably, the mirror doctrine is not available when
Exceptions to Mirror Doctrine: (BOB-MILKA) there is no certificate to begin with. While an ordinary
The person dealing with registered land must look buyer may rely on the certificate of title issued in the
beyond the certificate of title in the following name of the seller, this defense of having purchased
instances: the property in good faith may be availed of only
1. When the purchaser or mortgagee is a where registered land is involved and the buyer had
Bank/financing institution. They are relied in good faith on the clear title of the registered
impressed with public interest and thus owner. It does not apply when the land is not yet
require high standards of integrity and registered with the Registry of Deeds.
performance. Banks must exercise greater (Heirs of Gregorio Lopez v. DBP., G.R. No. 193551,
care, prudence, and due diligence in their Nov. 19, 2014).
property dealings. The standard operating
practice for banks when acting on a loan Chain of Title Rule
application is to conduct an ocular
General Rule: A forged deed is null and cannot
inspection of the property offered for
convey title.
mortgage and to verify the genuineness of
the title to determine its real owner. (Andres Exception: Registration of title from a forger to an
v. PNB, G.R. No. 173548, Oct. 15, 2014). innocent purchaser for value (§55, Land Registration
Act). However, there must be a complete chain of
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registered titles; all the transfers starting from the 3. Payment of fees
original rightful owner to the innocent holder for 4. ROD’s entry of memorandum upon the
value, including the transfer to the forger, must be original certificate of title and the owner’s
duly registered, and the title must be properly issued duplicate (date and time of filing, file
to the transferee number assigned, ROD’s signature)
(Sps. Peralta v. Heirs of Abalon, G.R. No. 183448,
5. ROD’s annotation on the deed (date and
June 30, 2014).
time of filing, and reference to volume and
Although generally a forged or fraudulent deed or page of the registration book in which it was
document is a nullity and conveys no title, it may registered)
become the root of a valid title when the certificate of
title over the land has already been transferred from Note: No mortgagee’s or lessee’s duplicate
the name of the owner to that of the forger and the certificate shall be issued upon registration of the
land is sold later to an innocent purchaser for value. REM (P.D. 1529, §60).
A person who deals with registered property in good
faith will acquire good title from a forger and will be Effects of Registration of REM
absolutely protected by a Torrens title 1. Creates a lien that attaches to the property
(Sps. Villamil v. Villarosa, G.R. No. 177187, Apr. 7, in favor of the mortgagee
2009). 2. Constructive notice of his interest in the
property to the whole world
While, it is a familiar doctrine that a forged or
fraudulent document may become the root of a valid Effects of Failure to REM
title, if title to the property has been transferred from 1. The mortgage is valid between the parties
the forger to an innocent purchaser in good faith, the
but is not binding against third persons
same does not apply in the case of banking
institutions or those engaged in real estate for they 2. If the personal property mortgaged is
are expected to exercise more care and prudence delivered, the contract becomes a pledge
than private individuals in their dealing with and not a chattel mortgage
registered lands. In the absence of inquiry, the 3. A third person’s actual knowledge of the
respondent Bank cannot and should not be regarded mortgage has the same effect as
as a mortgagee/purchaser in good faith registration
(Erasusta v. CA, G.R. No. 149231, July 17, 2006).
Registration of Lease
Process of Registration (Generally): It is the lessee, not the lessor, who is required to
1. Execution of instrument in a form sufficient initiate the registration. The process is the same with
in law. It must contain the names, the registration of real estate mortgages. Similarly, no
nationalities, residence, and postal new certificate is issued.
addresses of the grantees or others
acquiring an interest under the instrument Note: When there is a prohibition in mortgaged
(P.D. 1529, §55). property as regards subsequent conveyances, etc.,
2. Presentation of the following to the ROD: leasehold cannot be registered.
(a) Owner’s duplicate certificate
Subsequently registered mortgage and a prior
Instrument unregistered sale
3. Payment of registration fees and Whether the land is unregistered or registered will
documentary stamp taxes determine which one will prevail between a
4. The ROD makes and signs a memorandum subsequently registered mortgage and a prior
on the certificate of title unregistered sale
5. The ROD issues a Transfer Certificate of
Title (if the instrument involves a transfer of In unregistered land, an earlier instrument (sale or
the title to the land) mortgage) prevails over a latter one, and the
registration of any one of them is immaterial.
Registration of Real Estate Mortgage (REM)
With registered land, the registered transaction
1. Execution of deed in a form sufficient in law
prevails over the earlier unregistered right. Prior
(public instrument) registration of a lien creates a preference as the act
2. Presentation to the ROD of the following: of registration is the operative act that conveys and
(a) Deed of mortgage affects the land. The only exception to this rule is
(b) Owner’s duplicate certificate of title when a party has knowledge of a prior existing

ATENEO CENTRAL
interest unregistered at the time he acquires a right, claims of interest or claims of the legal nature and
his knowledge of that prior unregistered interest has incidents of the relationship between the person
the effect of registration as to him. whose name appears on the document and the
(Macadangdang v. Martinez, G.R. No. 158682, Jan. person who caused the annotation. It does not affect
31, 2005) the validity of the claim or convert a defective claim
or document into a valid one. These claims may be
Registration of Trust proved or disproved during the trial. Thus,
annotations are not conclusive upon courts or upon
(1) Implied Trusts owners who may not have reason to doubt the
Presentation of a sworn statement claiming interest security of their claim as their properties' title holders.
arising from an implied trust, with a description of the (University of Mindanao, Inc. v. Bangko Sentral ng
land, the name of the registered owner, and the Pilipinas, G.R. Nos. 194964-65, Jan. 11, 2016).
number of the certificate of title
Purposes of Adverse Claim
(2) Express Trust 1. Apprises third persons of the controversy
Presentation of the instrument creating the trust over the ownership of the land
2. Preserves and protects the right of the
Note: In both cases, a memorandum of the adverse claimant during the pendency of
particulars of the trust shall be entered by the words the controversy
“in trust” or “upon condition” and by reference by 3. Notice to third persons that any transaction
number to the instrument creating the trust (§65, regarding the disputed land is subject to the
PD1529) outcome of the dispute. (Arrazola v.
Bernas, G.R. No. L-29740, Nov. 10, 1978)
Registration of Appointed Trustee by Court
1. Presentation of the certified copy of the
Note: Actual knowledge is equivalent to the
decree
registration of the adverse claim.
2. Surrender and cancellation of the duplicate
certificate
Requisites:
3. Issuance and entry of a new certificate 1. A claimant’s right or interest in the
registered land is adverse to the registered
Other Notes on Voluntary Dealings
owner;
- Builders in Good Faith may register
2. Such right arose subsequent to the date of
- Aliens may register leases:
original registration;
• They may be granted temporary rights for
3. No other provision is made in the Decree
residential purposes
for the registration of such right or claim
• Limit is 25 years, renewable for another 25 (P.D. 1529, §70)
years
For this special remedy to be availed of, it must
2. INVOLUNTARY DEALINGS
be shown that there is no other provision in the
law for registration of the claimant’s alleged right
Involuntary Dealings (Generally)
or interest in the property. The herein claim is
Transactions affecting land in which cooperation of
based on a perfected contract of sale.
registered owner is not needed, or those which are
Considering the Land Registration Act
done even against his will.
specifically prescribed the procedure for
registration of a vendee’s right on a registered
a. Adverse Claims
property, the remedy provided in Section 110,
would be ineffective. (Register of Deeds Quezon
Adverse Claim
City v. Nicandro, G.R. No. L-16448, April 29,
Notice to third persons that someone is claiming an
1961)
interest on the property or has a better right than the
registered owner thereof. The disputed land is
An adverse claim is a type of involuntary
subject to the outcome of the dispute
dealing designed to protect the interest of a
(Sajonas v. CA, G.R No. 102377, July 5, 1996).
person over a piece of real property by apprising
third persons that there is a controversy over the
Binding Effect of Adverse Claims ownership of the land. It seeks to preserve and
Annotations of adverse claims operate as a protect the right of the adverse claimant during
constructive notice only to third parties—not to the the pendency of the controversy, where
court or the registered owner. These are merely
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registration of such interest or right is not duplicate certificate of title for annotation of
otherwise provided for by the Property the voluntary instrument (L.P. Leviste v.
Registration Decree. It serves as a notice to third Noblejas, G.R. L-28529, Apr. 30, 1979)
persons that any transaction regarding the 2. An interest on land based on a lawyer’s
disputed land is subject to the outcome of the contingent fee contract arising after original
dispute (Logarta v. Mangahis, G.R. No. 213568,
registration (Director of Lands v. Ababa,
July 5, 2016).
G.R. No. L-26096, Feb. 27, 1979).
Before a notice of adverse claim is registered, it
must be shown that there is no other provision in Examples of Non-registrable Adverse Claims
law for the registration of the claimant's alleged 1. A mere money claim (Sanchez v. CA, G.R.
right in the property (Id.). No. L-40177, Feb. 12, 1976).
2. A claim based on hereditary rights of the
It does not appear that respondent attempted to children of a deceased parent, when there
register the agreement to sell and that the are probate proceedings and one parent is
registered owner refused to surrender the still living (Arrazola v. Bernas, G.R. No. L-
duplicate certificate for the annotation of said 29740, Nov. 10, 1978)
instrument. Instead, respondent merely filed an 3. A second adverse claim based on the same
adverse claim considering that Section 62 of the
ground by the same claimant
Land Registration Act prescribed the procedure
for the registration of respondent’s interest and 4. Claims based on occurrences before the
there is no showing of her inability to produce the original registration.
owner’s duplicate certificate. Thus, the remedy 5. Possessor’s claim based on prescription or
provided in Section 110 is ineffective for the adverse possession, when the land is
purpose of protecting her right or interest in the already registered in the name of another
disputed lot. (L.P Leviste & Company Inc. v. (Id.).
Noblejas, G.R. No. L-28529)
Period of Effectivity of Adverse Claim
A subsequent annotation of a notice of lis The adverse claim shall be effective for a period of
pendens on a certificate of title does not 30 days from the date of registration.
necessarily render a petition for cancellation of
adverse claim on the same title moot and The law, taken together, simply means that the
academic (Valderrama v. Arguelles, G.R. No. cancellation of the adverse claim is still necessary to
223660, April 02, 2018). render it ineffective otherwise, the inscription will
remain annotated and shall continue as a lien upon
Formal Requisites to Register an Adverse Claim: the property. (Sajonas v. CA, G.R. No. 102377, July
(WNR) 5, 1996)
1. The adverse claimant must state the
following in Writing: As explained in Sajonas that for as long there is yet
a. His alleged right or interest no petition for its cancellation, the notice of adverse
b. How and under whom such alleged claim remains subsisting. (Diaz-Duarte v. Spouses
right or interest is acquired Ong, G.R. No. 130352, Nov. 3, 1998)
c. The description of the land in which
the right or interest is claimed Cancellation of Adverse Claim
d. The certificate of title number An adverse claim may be canceled:
1. After the lapse of 30 days, upon the filing
2. Such statement must be signed and sworn
by the party-in-interest of a verified petition
to before a Notary public or authorized
for such purpose
officer to administer the oath
2. Before the lapse of said 30 days, upon the
3. The claimant shall state his Residence or
filing by the claimant of a sworn petition
place to which all notices may be served
withdrawing his adverse claim
upon him
3. Before the lapse of the 30-day period, when
Note: Noncompliance with formal requisites renders a party-in-interest files a petition in the
the adverse claim non-registrable and ineffective. proper RTC for the cancellation of the
adverse claim and, after notice and
Examples of Registrable Adverse Claims hearing, the court finds that the claim is
1. Voluntary instruments of sale and lease, invalid. If the court also finds the claim to
when the owner refuses to surrender the be frivolous, it may fine the claimant the
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amount of not less than 1,000 pesos nor “Lis pendens” means “pending suit.” It merely creates
more than 5,000 pesos, in its discretion. a contingency and not a lien.
Grounds for Cancellation of Adverse Claim (P.D. Purpose of Lis Pendens

1529, §64) (MoNoE-UVe) A notice of lis pendens is an announcement to the
Before final judgment, the court may order the whole world that a particular real property is in
cancellation: litigation, serving as a warning that one who acquires
1. After showing that notice is only for purpose an interest over said property does so at his own risk,
of Molesting an adverse party or that he gambles on the result of the litigation over
the said property (Spouses Po Lam v. CA, G.R. No.
2. When it is shown that it is not necessary to
116220, Dec. 6, 2000).
protect the right of the party who caused
the registration thereof The purpose of the notice of lis pendens is to
3. Where the Evidence so far presented by constructively advise or warn all people who deal with
the plaintiff does not bear out the main the property that they so deal with it at their own risk,
allegations of the complaint and whatever rights they may acquire in the property
4. When the continuances of the trial are in any voluntary transaction is subject to the results
Unnecessarily delaying the determination of of the action, and may well be inferior and
the case to the prejudice of the other party subordinate to those which may be finally determined
5. ROD may also cancel by Verified petition of and laid down therein (Heirs of Marasigan v. IAC,
G.R. No. L-69303, July 23, 1987).
a party who caused such registration
When Notice of Lis Pendens is Proper (QEER-
Note: These grounds are the same as the grounds COP)
for cancellation of Notice of Lis Pendens 1. To Quiet title thereto
2. To Establish a right, equitable estate, or
Notes on Adverse Claims
interest in specific real property
The interested party must file with the proper court a
3. To Enforce a lien, charge, or encumbrance
petition for the cancellation of an adverse claim, and
a hearing must also first be conducted. The Register against it
of Deeds cannot on its own automatically cancel the 4. To Recover possession of a real estate
adverse claim for due process purposes 5. To remove Clouds upon the title thereof
(Diaz-Duarte v. Ong, G.R. No. 130352, Nov. 3, 6. Any Other proceedings of any kind in court
1998). directly affecting the title to the land or the
use of occupation thereof or the building
The effects of a foreclosure sale retroact to the date thereon.
of registration of the mortgage. If the adverse claim is 7. For Partition
registered only after the annotation of the mortgage
at the back of the certificate of title, the adverse claim
When Lis Pendens is Not Proper (P2LAR)
could not affect the rights of the mortgagee, even if
1. Preliminary attachment
the foreclosure of the mortgage and the public
2. Proceedings for the Probate of wills
auction sale occurred after the annotation of the
adverse claim 3. Levies on execution
(Limpin v. IAC, G.R. No. 70987, Jan. 30, 1987). 4. Proceedings for Administration of the estate
of deceased persons and
An adverse claim may exist concurrently with a 5. Proceedings in which the only object is the
subsequent annotation of a notice of lis pendens Recovery of a money judgment
(Ty Sin Tei v. Dy Piao, G.R. No. 11271, May 28,
1958). Elements to annotate notice of lis pendens
1. Property must be of such character as to be
When an adverse claim exists concurrently with a subject to the rule;
notice of lis pendens, the notice of adverse claim may 2. The court must have jurisdiction both over
be validly canceled after the registration of such
the person and the res; and
notice, since the notice of lis pendens also serves the
3. The property or res must be sufficiently
purpose of the adverse claim
(Villaflor v. Juezan, G.R. No. 35205, Apr. 17, 1990). described in the pleadings.
Effect of Notice of Lis Pendens (P.D. 1529, §76)

b. Notice of Lis Pendens
No action to recover possession, or to quiet title, or
to remove clouds, or for partition, or other judicial
Notice of Lis Pendens
ATENEO CENTRAL
proceedings directly affecting title or use or 3. Levy on execution

occupation or buildings thereon, and no judgment,
and no proceeding to vacate or reverse any Registration of Attachment/Other Liens
judgment, shall have any effect upon registered land 1. Copy of writ in order to preserve any lien,
as against persons other than the parties, unless right, or attachment upon registered land
memorandum or notice is filed or registered may be filed with ROD where the land lies,
(stating institution of action or proceeding and court containing the number of certificate of title of
were pending, date of institution, reference to the
the land to be affected or description of the
number of certificate of title, an adequate description
of the land affected and registered owner). land
2. ROD to index attachment in names of both
Effect of Registration plaintiff and defendant or name of the person
1. Impossibility of alienating the property in for whom property is held or in whose name
dispute during the pendency of the suit stands in the records
2. If alienated, the purchaser is subject to the 3. If a duplicate of the certificate of title is not
final outcome of the pending suit presented:
3. ROD is duty-bound to carry over the notice a. ROD shall, within 36 hours, send
of lis pendens on all new titles to be issued notice to the registered owner by
mail stating that there has been
Grounds for Cancellation of Lis Pendens (P.D. registration and request him to
1529, §64) (MoNoE-UVe) produce a duplicate so that
Before final judgment, the court may order the memorandum may be made
cancellation: b. If the owner neglects or refuses to
1. After showing that notice is only for purpose comply, the ROD shall report the
of Molesting an adverse party matter to the court
2. When it is shown that it is not necessary to c. The court, after notice, shall enter
protect the right of the party who caused an order to the owner to surrender
the registration thereof the certificate at the time and place
3. Where the Evidence so far presented by named therein
the plaintiff does not bear out the main 4. Although notice of attachment is not noted in
allegations of the complaint duplicate, notation in the book of entry of
4. When the continuances of the trial are ROD produces the effect of registration
Unnecessarily delaying the determination of already.
the case to the prejudice of the other party
5. ROD may also cancel by Verified petition of Effects of Registration of Attachment (REEA)
the party who caused such registration 1. Creates Real right
2. Has priority over Execution sale
Notes on Lis Pendens 3. But between 2 attachments, one that is
All findings of fraud should begin the exposition with registered Earlier is preferred
the presumption of good faith; The erroneous
4. If it is not registered, Actual knowledge has
annotation of a notice of lis pendens does not negate
good faith. The overzealousness of a party in the same effect as registration
protecting pendent lite his perceived interest,
inchoate or otherwise, in the corporation’s properties When Attachment may be Discharged
from depletion or dissipation, should not be lightly 1. Upon giving of a counter-bond;
equated to bad faith 2. When the attachment was improperly or
(Lu v. Lu Ym, Sr., G.R. Nos. 153690, 157381 & irregularly issued or enforced; or
170889, Feb. 15, 2011). 3. When attaching party’s bond is insufficient
Attachment Execution Sale

The legal process of seizing another's property in To enforce a lien of any description on registered
accordance with a writ or judicial order to secure land, any execution or affidavit to enforce such lien
satisfaction of a judgment yet to be rendered shall be filed with ROD where the land lies.
Kinds Register in registration book & memorandum upon

1. Preliminary the proper certificate of title as an adverse claim or
2. Garnishment as an encumbrance.

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To determine preferential rights between 2 liens: a new certificate of registered land

priority of registration of attachment. upon presentment of a copy of
assignment with the bankrupt's
Tax Sale duplicate certificate of title
Sale of land for collection of delinquent taxes and c. The new certificate shall state that it
penalties due to the government.
is entered into by him as assignee
Notes on Tax Sales or trustee in insolvency
1. In personam (all persons interested shall be proceedings
notified so that they may be given an d. Upon order vacating the insolvency
opportunity to be heard) proceedings, any title issued in
2. Notice to be given to delinquent taxpayer at name of the assignee shall be
his last known address ordered surrendered and the debtor
3. Publication of notice must also be made in shall be entitled to entry of new
English, Spanish, and local dialect, posted certificate in his name.
in a public and conspicuous place in the
place where the property is situated and at 2. Government in Eminent Domain (P.D. 1529,
the main entrance of the provincial building §85)
4. Sale cannot affect the rights of other lien a. The expropriating body is required
holders unless given the right to defend to file a copy of the judgment in the
their rights: due process must be strictly eminent domain proceeding within
observed ROD, which states a description of
5. A tax lien is superior to an attachment the property, certificate number,
6. There is no need to register a tax lien interest expropriated, nature of
because it is automatically registered once public use
the tax accrues b. A memorandum shall be made on
7. But the sale of registered land to foreclose the certificate or, if fee simple is
a tax lien needs to be registered taken, a new certificate of title shall
be issued.
Procedure of Registration of Tax Sale
1. Officer’s return shall be submitted to the
ROD together with the owner’s duplicate title
2. Register in the registration book
3. The memorandum shall be entered in the
certificate as an adverse claim or
encumbrance
4. After the period of redemption has expired
and no redemption was made (2 years from
registration of auction sale), the title must be
canceled and a new title will be issued
5. Before the cancellation, notice shall be sent
to the registered owner, with the directive
that he surrenders title and show cause why
it should not be canceled
Other Parties Required to Register Involuntary

Dealings
1. Assignee in Involuntary Proceeding for
Insolvency (P.D. 1529, §83)
a. It is the duty of the officer serving
the notice to file a copy of such
notice to ROD where the property of
the debtor is located
b. Assignee elected or appointed by
the court shall be entitled to entry of

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H. NON-REGISTRABLE PROPERTIES

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An applicant for land registration should know what Subterranean or

properties or lands cannot be subject to private groundwaters; and
appropriation. Waters in swamps and
marshes
Note: The Land Registration Court has no PHIL. CONST., Forest or timberland, public
jurisdiction over non-registrable properties and art. XII, §2. forest, forest reserves lands,
cannot validly adjudge the registration of title in favor mineral lands
of the applicant for the registration of the same
(Republic v. Feliza, G.R. No. 182913, Nov. 20,
2013). Jurisprudence a) Mangrove swamps
b) Foreshore land and
Non-registrable properties seashore
Basis Non-registrable property c) Navigable rivers,
CIVIL CODE, art. Properties of public dominion streams, and creeks
420 d) Lakes and bays
Classifications:
e) Military reservations
(a) Those intended for
f) Other kinds of
public use, such as roads,
reservations (i.e.,
rivers, torrents, ports, and
reservations for
bridges constructed by the
specific purposes
State, banks, shores,
made by executive
roadsteads, and others of
proclamation)
similar character.
g) Watersheds
Those which belong to the
h) Grazing lands
State, without being for
i) Previously titled land
public use, and are
j) Man-made alluvial
intended for:
deposit along the river
1. public service or
2. the development of the
national wealth. I. DEALINGS WITH UNREGISTERED
LANDS
WATER CODE The following belong to the
(P.D. 1067), State: Need for Registration (P.D. 1529. §113)
arts. 5 & 6 Rivers and their natural beds; No deed, conveyance, mortgage, lease, or other
Continuous or intermittent voluntary instrument affecting land not registered
waters of springs and brooks under the Torrens system shall be valid, except as
running in their natural beds between the parties thereto, unless such instrument
and the beds themselves; shall have been recorded in the manner herein
Natural lakes and lagoons; prescribed in the office of the Register of Deeds for
All other categories of surface the province or city where the land lies.
waters such as water flowing
over lands, water from rainfall The system of registration under the Spanish
whether natural or artificial, Mortgage Law is discontinued and all lands
and water from agriculture recorded under said system which are not yet
runoff, seepage, and drainage; covered by Torrens title shall be considered
Atmospheric water; unregistered lands.
Subterranean or groundwater;
Seawater; System of Registration for Unregistered Lands
Before, the system of registration for unregistered
Those found on private lands land under the Torrens System (Act 3344) only
which also belong to the State: covered voluntary dealings. Now, it includes
Continuous or intermittent involuntary dealings.
waters rising on such lands;
Lakes and lagoons naturally Effect: If prospective, it binds 3rd persons after
occurring on such lands; registration but yields to better rights of 3rd person
Rainwater and falling on such prior to registration (limited effect to 3rd parties)
lands;

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to improvements, clearly mean improvements on

It thus appears that the “better right” referred to in unregistered lands alone. In fine, the deed cannot
Act No. 3344 is much more than the mere prior deed refer to improvements or buildings on lands
of sale in favor of the first vendee. In the Lichauco registered under the Torrens system, or under the
case, it was the prescriptive right that had Spanish Mortgage Law. To hold otherwise, would
supervened. Or, as also suggested in that vase, result in the anomalous situation of two
other facts and circumstances exist which, in registrations, one under Act 496 with respect to
addition to his deed of sale, the first vendee can be unimproved land, and another, under Act 3344 for
said to have better right than the second purchaser. improvements subsequently introduced on the
(Hanapol v. Plapil, G.R. No. L-19248, Feb. 28, 1963) same land. (Salita v. Calleja, G.R. No. L-17314)
Reason: No strict investigation involved Effect of Registration

Registration of an instrument involving unregistered
Subsequent dealings are also valid if recorded. land in the Registry of Deeds creates constructive
ROD keeps a daybook and a register, and an index notice and binds a third person who may
system is also kept. subsequently deal with the same property. (Heirs of
Deleste v. Land Bank, G.R. No. 169913, June 8,
Procedure: 2011)
1) Presentation of instrument dealing with
unregistered land; The reliance on an unnotarized and unregistered
deed of absolute sale of real property executed in
2) If found in order, the instrument is
one’s favor is misplaced and unwarranted, for the
registered; non-registration of the deed meant that the sale
3) If found defective, the registration is could not bind third parties. The transaction affecting
refused. The reason for refusal will be unregistered lands covered by an unrecorded
written. contract, if legal, might be valid and binding on the
parties themselves, but not on third parties. In the
Under Act 3344, registration of instruments affecting case of third parties, it was necessary for the
unregistered lands is without prejudice to a third contract to be registered. (Dadizon vs. Court of
party with a better right (Radiowealth Finance Co. v. Appeals, G.R. No. 15911, Sept. 30, 2009)
Palileo, G.R. No. 83432, May 20, 1991).
Innocent purchasers of unregistered lands
An ordinary buyer may rely on the certificate of title
Registration of instruments affecting unregistered
issued in the name of the seller. He or she need not
lands is “without prejudice to a third party with a
look beyond what appears on the face of the
better right.” The aforequoted phrase has been held
certificate of title. However, the defense of having
by this Court to mean that the mere registration of a
purchased the property in good faith may be availed
sale in one’s favor does not give him any right over
of only where registered land is involved and the
the land if the vendor was not anymore the owner of
buyer had relied in good faith on the clear title of the
the land having previously sold the same to
registered owner. It does not apply when the land is
somebody else even if the earlier sale was
not yet registered with the Registry of Deeds. (Heirs
unrecorded. (Radiowealth Finance Company v.
of Gregorio Lopez v. DBP., G.R. No. 193551, Nov.
Palileo, G.R. No. 83432, May 20, 1991)
19, 2014).
If a parcel of land covered by a Torrens Title is sold,
but the sale is registered under Act 3344, and not Vis-à-vis the Torrens System
under the Land Registration Act, the sale is not A duly registered levy on attachment takes
considered registered and the registration of the precedence over a prior unregistered sale. This is
deed not operate as constructive notice to the whole not diminished by the subsequent registration of the
world. (Vda. de Melencion v. CA, G.R. No. 148846, prior sale. This is consistent with the fundamental
Sept. 25, 2007; Mactan-Cebu International Airport principle of the Torrens system that registration is
Authority v. Spuses Edito, G.R. No. 171535, June 5, the operative act that gives validity to the transfer or
2009). creates a lien upon the land. (Suntay v. Keyser
Mercantile, Inc., 2014).
In order to be registerable under Act No. 3344, the
instrument must refer only to unregistered land and J. ASSURANCE FUND
its own improvements only, and not any other kind
of real estate or properties. The words “own” and 1. NATURE OF ASSURANCE FUND
“only” used in the language of the law when referring

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The Assurance Fund is a special fund created by

P.D. 1529 to compensate a person who sustains This remedy is not available when the party seeking
loss or damage, or is deprived of land or interest compensation was negligent, as when there were
therein, as a consequence of the bringing of the land circumstances which should have put him on guard
under the operation of the Torrens system. and prompted him to investigate the property
involved (Torres v. CA, 186 SCRA 679, 1990).
The Assurance Fund was meant as a form of State
insurance that allows recompense to an original title 2. CONDITIONS FOR COMPENSATION
holder who, without any negligence on his part FROM ASSURANCE FUND
whatsoever, has been apparently deprived of his
land initially by a usurper. The ordinary remedies 1. A person who sustained loss or damage, or
against the usurper would have allowed the original is deprived land or any estate or interest
title holder to recover his property. However, if the therein;
usurper is able to transfer the same to an innocent 2. Such loss, damage or deprivation was
purchaser for value and he is unable to compensate occasioned by the bringing of the land
the original title holder for the loss, then the latter is under the operation of the Torrens system
now left without proper recourse. As repeatedly or arose after the original registration of the
stated, the intent of the Assurance Fund is to land;
indemnify the innocent original title holder for his 3. The loss, damage or deprivation was due
property loss, which loss is attributable to not only to fraud, or any error, omission, mistake, or
the act of a usurper but ultimately the operation of mis-description in any certificate of title or
the Torrens System of registration which by reason in any entry or memorandum in the
of public policy, tilts the scales in favor of innocent registration book; (Loss or damage should
purchasers for value. (Stilianopoulous vs. Register not be due to breach of trust or mistake in
of Deeds of Legaspi City and the National resurvey resulting in expansion of area in
Treasurer, G.R. No. 224678, July 03, 2018) certificate of title.)
4. The aggrieved party was not negligent;
Contribution to the Assurance Fund (Sec. 93, 5. He is barred under the provisions of P.D.
P.D. 1529) 1529 or under the provisions of any law
A contribution to the fund, amounting to one-fourth from recovering such land; and
(1/4) of one percent (1%) of the land’s assessed 6. The action has not prescribed.
value shall be made in the following instances:
1. Upon the entry of a certificate of title in the Against whom filed (Sec. 96, P.D. 1529)
name of the registered owner; If the loss, damage, or deprivation is wholly through
2. Upon the original registration on the the fault, negligence, omission, mistake, or
certificate of title of a building or other misfeasance of the court personnel, the ROD or his
improvements on the land covered by said deputies and employees: the action must be brought
certificate; and against the ROD and the National Treasurer
3. Upon the entry of a certificate pursuant to
any subsequent transfer of registered land If the same is attributable to persons other than said
officials, the action must be brought against the
The contribution shall be based on the assessed ROD, the National Treasurer, and such other
value, according to the last assessment for taxation. persons.
If the land has not yet been assessed for taxation,
its value shall be determined by the sworn Where to file
declaration of two disinterested persons to the effect Any court of competent jurisdiction: RTC in city
that the value fixed by them is to their knowledge, a where property lies or resident of plaintiff
fair valuation, subject to modification by the courts.
3. PRESCRIPTIVE PERIOD (Sec. 102,
Compensation from Assurance Fund P.D. 1529)
An action civil in character, which may be in the form
of an ordinary complaint for damages. The action must be instituted within 6 years from the
issuance of the certificate of title. If the plaintiff is
The person bringing the action for damages against minor, insane or imprisoned, he has additional 2
the Fund must be the registered owner or holders of years after disability is removed to file the action.
transfer certificates of title or innocent purchasers
for value (La Urbana v. Bernardo, 62 Phil. 790, Under the circumstances obtaining in
1936). Stilianopoulous vs. Register of Deeds of Legaspi

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City and the National Treasurer, G.R. No. 224678, To have the same reproduced, after proper
July 03, 2018, the period should be reckoned from proceedings, in the same form they were when the
the moment the innocent purchaser for value loss or destruction occurred (Heirs of Pedro Pinote
registers his or her title and upon actual knowledge v. Dulay, G.R. No. L-56694, Jul. 2, 1990.)
thereof of the original title holder/claimant.
Hernando Decision
Compensation and Execution (Secs. 97,99 P.D. Verily, the reconstitution of a certificate of title
1529) denotes restoration in the original form and
Compensation cannot be more than the fair market condition of a lost or destroyed instrument attesting
value of land at time of loss. the title of a person to a piece of land. The purpose
of the reconstitution of title is to have, after
Amount to be recovered is not limited to P500,000 observing the procedures prescribed by law, the title
which is maintained as standing fund. If fund is not reproduced in exactly the same way it has been
sufficient, National Treasurer is authorized to make when the loss or destruction occurred. (Gaoiran v.
up for deficiency from other funds available to Court of Appeals, G.R. No. 215925, March 7, 2022)
Treasury even if not appropriated.
For an order of reconstitution to be issued, it must
Execution is first sought against the person be clearly shown that the certificate of title had been
responsible for fraud; if he is insolvent, against the lost or destroyed. If a certificate of title has not been
National Treasury. Thereafter, the Government lost, but is in fact in the possession of another
shall be subrogated to the rights of plaintiff to go person, then the reconstituted title is void and the
against other parties or securities. court that rendered the decision had no jurisdiction.
(Id.)
The Assurance Fund is only liable in the last resort,
as suggested under Section 97 of Presidential Reconstitution presupposes the existence of an
Decree No. 1529. The person causing the fraud or original certificate of title which was lost or
the error should be liable first. However, if the destroyed. If there was no loss or destruction as in
judgment cannot be executed, the Assurance Fund the case at bar, there is actually nothing to
is the insurance to the innocent purchaser for value reconstitute. (Id.)
who relied on the validity of the real property’s
certificate of title. In showing that the person causing Kinds of Reconstitution:
the fraud passed away and did not leave property, it 1. Judicial
meant that the state cannot execute a judgment 2. Administrative
granting the innocent purchaser’s claim from such
person. It excuses the claimant from impleading the Procedure in case of loss of an owner’s
person causing the fraud or his estate in the Petition
duplicate certificate of title:
because in this situation, the judgment may only be
enforced against the Assurance Fund. (The A. In case of loss or theft:
Register of Deeds of Negros Occidental v. Anglo, a. Due notice under oath shall be
Sr., G.R. No. 171804, August 5, 2015) sent by the owner or by someone
on his behalf;
b. to the Register of Deeds of Deeds
K. RECONSTITUTION OF TITLES of the province or city where the
land lies;
Reconstitution of Original Certificate of Title c. as soon as the loss or theft is
The restoration of the instrument which is supposed discovered.
to have been lost or destroyed in its original form B. If lost or destroyed, or cannot be produced
and condition. by a person applying for the entry of a new
certificate to him or for the registration of
When the owner’s duplicate certificate of title has
any instrument:
not been lost but is in fact in the possession of
another person, then the reconstituted certificate is a. A sworn statement of the fact of
void, because the court that rendered the decision such loss or destruction;
had no jurisdiction. Reconstitution can validly be b. By the registered owner or other
made only in case of loss of the original certificate. person in interest and registered.
(Alcazar v. Arante, G.R. No. 177042, Dec. 10, 2012) (§ 109, PD 1529)
Purpose Upon the petition of the registered owner or other

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person in interest, the court may, after notice and 4. That the certificate of title was in force at the
due hearing, direct the issuance of a new duplicate time it was lost or destroyed; and
certificate, which shall contain a memorandum of 5. That the description, area, and boundaries
the fact that it is issued in place of the lost of the property are substantially the same
duplicate certificate, but shall in all respects be and those contained in the lost or destroyed
entitled to like faith and credit as the original certificate of title (Republic v. Lorenzo, G.R.
duplicate, and shall thereafter be regarded as such No.172338, Dec. 10, 2012.)
for all purposes of this decree. (Id.)
Judicial Reconstitution
Reconstitution v. Re-issuance of Lost Owner’s
Duplicate Certificate The judicial reconstitution of a Torrens title under
RECONSTITUTION RE-ISSUANCE Republic Act No. 26 means the restoration in the
WHAT IS LOST? original form and condition of a lost or destroyed
What is lost is the original What is lost is the Torrens certificate attesting the title of a person to
filed in the RD vault owner’s copy in registered land. The purpose of the reconstitution is
possession of the owner to enable, after observing the procedures prescribed
by law, the reproduction of the lost or destroyed
Torrens certificate in the same form and in exactly
the same way it was at the time of the loss or
destruction. (Republic v. Mancao, G.R. No. 174185,
July 22, 2015).
PUBLICATION
Publication in the OG No OG publication Hernando Decision
The fact of loss or destruction of the owner's
The court may require you The court may require duplicate certificate of title is crucial in clothing the
to also cause publication in you to also cause RTC with jurisdiction over the judicial reconstitution
a newspaper of general publication in a proceedings. (Gaoiran v. Court of Appeals, G.R. No.
circulation newspaper of general 215925, March 7, 2022)
circulation
ADMINISTRATIVE Requirements (LDR-FB)
There can be There is NO 1. The certificate of title had been lost or
administrative administrative re- destroyed.
reconstitution issuance of new 2. The Documents presented by the petitioner
owner’s duplicate copy are sufficient and proper to warrant
reconstitution of the lost or destroyed
certificate of title.
3. The petitioner is the Registered owner of
FURNISHING OF COPY the property or had an interest therein.
OSG should be copy NO need to copy 4. The certificate of title was in Force at the
furnished furnished OSG time it was lost or destroyed.
5. The description, area, and Boundaries of
the property are substantially the same and
those contained in the lost or destroyed
certificate of title. (Heirs of Toring v. Heirs
of Boquilaga, G.R. No. 163610, Sep. 27,
2010, citing R.A. 26, § 2, 3, 12 and 13.)
Material facts to be shown:
1. That the certificate of title had been lost or
Note: The claimants must prove that a title had been
destroyed;
issued and that said certificate of title was still in
2. That the documents presented by petitioner force at the time it was lost or destroyed. It is
are sufficient and proper to warrant necessary that the RD issue a certification that such
reconstitution of the lost or destroyed was in force at the time of its alleged loss or
certificate of title; destruction. The RD cannot issue such certification
3. That the petitioner is the registered owner merely because of the dearth of records in its file.
of the property or had an interest therein;

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(Republic v. Heirs of Sps. Sanchez and Meneses,

G.R. No. 212388, Dec. 10, 2014.)
In reconstitution proceedings, before jurisdiction

over the case can be validly acquired, it is a
condition sine qua non that the certificate of title has
not been issued to another person. If a certificate of
title has not been lost but is in fact in the possession
of another person, the reconstituted title is void and
the court rendering the decision has not acquired
jurisdiction over the petition for issuance of new title.
The courts simply have no jurisdiction over petitions
by (such) third parties for reconstitution of allegedly
lost or destroyed titles over lands that are already
covered by duly issued subsisting titles in the names
of their duly registered owners. The existence of a
prior title ipso facto nullifies the reconstitution
proceedings. The proper recourse is to assail
directly in a proceeding before the regional trial court
the validity of the Torrens title already issued to the
other person. (Paulino vs. Curt of Appeals, G.R. No.
207533, June 4, 2014)
Tax declaration
The tax declaration does not serve as a valid basis
for reconstitution. For one, we cannot safely rely on
Tax Declaration No. 15003-816 as evidence of the
subject property being covered by TCT No. T-22868
in the name of respondent because a tax declaration
is executed for taxation purposes only and is
actually prepared by the alleged owner himself.
(Republic v. Santua, G.R. No. 155703, [September
8, 2008], 586 PHIL 221-300)
Summary of Process:
1. File a petition with the RTC (In rem
proceeding).
2. The court shall cause a NOTICE to be
PUBLISHED, POSTED, and/or MAILED.
Non-compliance voids the proceeding as
such requirements are jurisdictional.
3. When the court grants the petition, it shall
issue a corresponding order to ROD

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Judicial Reconstitution Process

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Sources for Reconstitution (in order) not the registered owner is to ensure an orderly
proceeding and to safeguard the due process rights
When OCT is to be reconstituted (R.A. 26, § 2.) of the registered owner. It prevents the commission
1. Owner’s duplicate of the certificate of title of fraud. (Heirs of Spouses Ramirez v. Abon, G.R.
2. Co-owner’s, mortgagee’s or lessee’s No. 222916, July 24, 2019.)
duplicate of said certificate
3. Certified copy of such certificate, previously The requirement that the owner's duplicate
issued by the ROD certificate of title be presented for voluntary
4. Authenticated copy of the decree of transactions is precisely what gives the registered
owner "security" and "peace of mind" under the
registration or patent, as the case may be,
Torrens system. Without the owner's duplicate
which was the basis of the certificate of title certificate of title, transfers and conveyances and
5. Deed of mortgage, lease, or encumbrance agencies and trusts, while valid, will not bind the
containing a description of the property registered land. Hence, a registered owner has a
covered by the certificate of title and on file substantive right to own and possess the owner's
with the ROD, or an authenticated copy duplicate certificate of title and to replace the same
thereof indicating that its original had been in case of loss or destruction.
registered
6. Any other document which, in the judgment Also, if the loss of the certificate of title has been
of the court, is sufficient and proper basis proven, the court, after notice and hearing, should
direct the issuance of a new duplicate certificate in
for reconstitution.
its original form and condition, with a memorandum
of the fact that it is being issued in place of the lost
When TCT is to be reconstituted (R.A. 26, § 3.) duplicate certificate. On the other hand, if the loss is
1. Same as sources (a), (b), and (c) for not proven, the court, after notice and hearing,
reconstitution of OCT should dismiss the petition without prejudice to the
2. Deed of transfer or other document registered owner's subsequent compliance with the
containing a description of the property requisites prescribed by law. Therefore, X
covered by TCT and on file with the ROD, Corporation cannot be barred by res judicata from
or an authenticated copy thereof indicating filing a second petition to replace its owner’s
its original had been registered and duplicate certificate of title in case of loss or
pursuant to which the lost or destroyed destruction of the original duplicate. (Philippine
certificate of title was issued Bank of Communications v. Register of Deeds for
the Province of Benguet, G.R. No. 222958, March
3. Same as sources (e) and (f) for
11, 2020.)
reconstitution of OCT
Petitions for Reconstitution
Section 109 of PD 1529 contemplates a situation In sum, RA 26 separates petitions for reconstitution
where when an owner's duplicate certificate of title of lost or destroyed certificates of title into two main
is lost or destroyed, a person who is a transferee of groups with two different requirements and
the ownership over the property, who is not procedures. Sources enumerated in Sections 2(a),
necessarily the registered owner, may also file the 2(b), 3(a), 3(b), and 4(a) of RA 26 are lumped under
petition for reconstitution. In this situation, the one group (Group A); and sources enumerated in
registered owner must also be duly notified of the Sections 2(c), 2(d), 2(e), 2(f), 3(c), 3(d), and 3(f) are
proceedings. By his or her very status as registered placed together under another group (Group B). For
owner, the latter is an interested party in the petition Group A, the requirements for judicial reconstitution
for reconstitution case. This is pursuant to the legal are set forth in Section 10 in relation to Section 9 of
presumption that the registered owner is the owner RA 26; while for Group B, the requirements are in
of the property, thus affording him preferential right Sections 12 and 13 of the same law. (Puzon v. Sta.
over the owner's duplicate, duly notifying him would Lucia Realty and Development, Inc., G.R. No.
prevent a person who wrongfully purports to be the 139518, March 6, 2001)
owner of the property to commit fraud. It would offer
the registered owner sufficient opportunity to contest
the supposed interest of the person filing the petition
for reconstitution. The rule on the mandatory
notification of the registered owner in a petition for
reconstitution of a lost or destroyed owner's
duplicate certificate filed by another person who is

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GROUP A GROUP B
SOURCES
1. The owner's duplicate of the certificate of title; 1.
A certified copy of the certificate of title,
2. The co-owner's, mortgagee's, or lessee's previously issued by the register of deeds
duplicate of the certificate of title; or by a legal custodian thereof;
3. Annotations or memoranda appearing on the 2.
An authenticated copy of the decree of
owner's co-owner's mortgagee's or lessee's registration or patent, as the case may
duplicate; be, pursuant to which the original
certificate of title was issued;
3. A document, on file in the registry of
deeds, by which the property, the
description of which is given in said
document, is mortgaged, leased or
encumbered, or an authenticated copy of
said document showing that its original
had been registered;
4. Any other document which, in the
judgment of the court, is sufficient and
proper basis for reconstituting the lost or
destroyed certificate of title.
5. The deed of transfer or other document,
on file in the registry of deeds, containing
the description of the property, or an
authenticated copy thereof, showing that
its original had been registered, and
pursuant to which the lost or destroyed
transfer certificate of title was issued;
CONTENTS OF NOTICE AND PETITION
Contents of Notice (R.A. 26, § 9) Contents of Petition (R.A. 26, § 12)
a) Number of the certificate of title 1. That the owner’s duplicate of the
b) Name of the registered owner certificate of title had been lost or
c) Names of the interested parties appearing in the destroyed
reconstituted certificate of title 2. That no co-owner’s, mortgagor’s, or
d) Location of the property lessee’s duplicate had been issued
e) The date on which all persons having an 3. The location, area, and boundaries of the
interest in the property must appear and file property
such claims as they may have (Puzon v. Sta. 4. The nature and description of the
Lucia, G.R. No. 139518, Sep. 17, 2001.) buildings or improvements, if any, which
do not belong to the owner of the land, and
the names and addresses of the owners
of such buildings or improvements
5. The names and addresses of the (a)
occupants or persons in possession of the
property, (b) of the owners of the adjoining
properties, and (c) of all persons who may
have any interest in the property
6. A detailed description of the
encumbrance, if any, affecting the
property
7. A statement that no deeds or other
instruments affecting the property have
been presented for registration, or, if there

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be any, the registration thereof has not

been accomplished, as yet
Contents of Notice (R.A. 26, § 13)

a. Number of the lost or destroyed certificate
of title, if known
b. Name of the registered owner
c. Names of the interested parties appearing
in the reconstituted certificate of title
d. Location of the property
e. The date on which all persons having any
interest therein must appear and file their
claim or objections to the petition.
PUBLICATION, POSTING, AND/OR POSTING
Publication & Posting Requirement (R.A. 26, § 9 Publication & Posting Requirement (R.A. 26, §
&10) 13)
a. Notice shall be published in two successive 1. Notice shall be published in two
issues of the Official Gazette; successive issues of the Official Gazette;
b. Must be posted on the main entrance of the 2. Must be posted on the main entrance of
provincial building and of the municipal building the provincial building and of the municipal
of the municipality or city where the land is building of the municipality or city where
situated. the land is situated.
These requirements must be complied with at least 30 These requirements must be complied with at least
days prior to the date of hearing. 30 days prior to the date of hearing.
Registered Mail
The notice must be sent by registered mail or
otherwise, at the expense of the petitioner, to every
person named in said notice (actual occupants and
adjacent owners). This shall be done at least thirty
days prior to the date of hearing.

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Effect of Failure to Comply with Publication or is terminated. 26 Moreover, the use of the technical
Posting Requirements descriptions as embodied in the blueprints and such
If an order of reconstitution is issued without any other documents adduced as bases for the
previous publication, such order of reconstitution is production of the new title, likewise does not
null and void. Even the publication of the notice of necessitate another posting and publication
hearing in a newspaper of general circulation like because while they were newly mentioned in the
the Manila Daily Bulletin is not in substantial second amendment, the same were already
available for the court to scrutinize during the first
compliance with the law because Section 13
amendment.
specifies publication in the OG and does not provide
for any alternative medium or manner of publication The reconstitution of title is an action in rem, which
(MWSS v. Sison, G.R. No. L-40309, Aug. 31, 1983.) means it is one directed not only against particular
persons, but against the thing itself. 27 The essence
The notice must be actually sent or delivered to of posting and publication is to give notice to the
parties affected by the petition for reconstitution. whole world that such petition has been filed and
The order of reconstitution issued without that interested parties may intervene or oppose in
compliance with the said requirement never the case. This purpose was achieved in this case
becomes final - it was null and void (Manila Railroad when notices on the first and second amendments
were duly served upon the parties in interest of the
v. Moya, G.R. No. L-17913, Jun. 22, 1965.)
case and proper posting and publication was made
to the original petition for reconstitution. In view of
Respondent, as possessor thereof, or as one who is this, We find that the court validly acquired
known to have an interest in the property, should jurisdiction over the case. (Republic v. Abellanosa,
have been sent a copy of the notice at the expense G.R. No. 205817, October 6, 2021)
of the petitioner, pursuant to section 13 of RA 26. It
is clear from section 13 that notice by publication is Administrative Reconstitution
not sufficient under the circumstances. Notice must Originally embodied in R.A. 26, abrogated through
be actually sent or delivered to parties affected by
P.D. 1529, then partially revived through R.A. 6732.
the petition for reconstitution. The order of
reconstitution, therefore, having been issued
without compliance with the said requirement, has R.A. 6732 provides for retroactive application
never become final as it was null and void. (Manila thereof to cases 15 years immediately preceding
Railroad Company v. Moya, G.R. No. L-17913, June 1989.
22, 1965)
Requisites (R.A. 6732, § 1.)
1. There is a substantial loss or destruction of the
The failure to meet any of the necessary publication,
original land titles due to fire, flood, or other
notice of hearing, and mailing requirements did not
force majeure as determined by the
vest jurisdiction of the case to the court. Thus, the
Administrator of the LRA
judgment rendered by the RTC regarding the
2. The number of certificates of title lost or
reconstitution of title is void (Republic v. Sanchez,
damaged should be at least 10% of the total
G.R. No. 146081, Jul. 17, 2006.)
number in the possession of the Office of the
For non-compliance with the actual notice ROD; and
requirement in Section 13 in relation to Section 12 3. These lost or damaged titles should not be less
of RA 26, the trial court did not acquire jurisdiction than 500.
over the LRC Case. The proceedings in that case
were thus a nullity and the order was void. Sources (R.A. 6732, § 2.)
(Republic v. Spouses Roberto, G.R. No. 1. Owner’s duplicate of the certificate of title
146081, July, 17, 2006) 2. Co-owner’s, mortgagee’s, or lessee’s
duplicate of said certificate
Hernando Decision
Nevertheless, assuming arguendo that another LRA report
posting and publication was necessary in view of the The LRA must submit a REPORT on or before the
second amendment, the absence of the same does date of hearing, indicating which of the lots subject
not divest the RTC of its jurisdiction that it validly of the reconstitution have already been issued titles
acquired in the first instance. Settled is the rule that and that, conversely, the Court, after considering the
jurisdiction once acquired is not lost upon the REPORT must render a Decision taking into
instance of the parties but continues until the case

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consideration said Report. (Supreme Court

ADMINISTRATIVE CIRCULAR NO. 7-96)
HOWEVER, non-compliance with this circular does

not divest the trial court of jurisdiction over the
petition for reconstitution.
It is not mandatory, however, for the reconstitution

court to wait for such LRA Report indefinitely. If none
is forthcoming on or before the date of the initial
hearing, it may validly issue an order or judgment
granting reconstitution. (Felicisimo Opriasa vs. The
City Government Of Quezon City, G.R. No. 149190,
December 19, 2006 citing Puzon v. Sta. Lucia
Realty & Development Inc)
The required quantum of evidence to reconstitute a

certificate of title is clear and convincing evidence.
In this case, the lower court granted the
reconstitution of titles on a mere preponderance of
evidence. Additionally, the CA relied primarily on the
second LRA report to affirm the decision of
reconstitution, but this was erroneous since both the
first and second LRA reports had no probative
value. This is because both reports do not fall within
the class of public documents under Section 23,
Rule 132 of the Rules since they do not reflect
entries in public records made in the performance of
a duty by a public officer, are not certified copies or
authenticated reproductions of original official
records in the legal custody of a government office,
and are not even records of public documents. As
such, without the testimonies of the public officers
who issued them or who were custodians thereof,
they are bereft of probative value.
Since jurisprudence, LRA Circular No. 35 and SC

Administrative Circular No. 7-96 state that the LRA
must both submit its report and attend the hearing
through one of their officials for the reconstitution of
lost or destroyed certificates, the failure of the RTC
to comply with one of the requirements means that
the petition for reconstitution should be dismissed.
Finally, LRA Circular No. 35 requires that the RD

shall submit “written findings” of the status of the title
to be reconstituted. According to jurisprudence, the
Certificate that Respondent X presented fails to
meet this requirement. Thus, this is another ground
to dismiss Respondent X’s petition for
reconstitution. (Republic v. Manansala, G.R. No.
241890, May 3, 2021).

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Administrative Reconstitution Process

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Summary of Judicial and Administrative Reconstitution
-- end of topic --

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b. Requisites for the Various Grounds for

V. WILLS AND SUCCESSION
Disinheritance
c. Effects of Reconciliation
TOPIC OUTLINE UNDER THE SYLLABUS: 16. Legacies and Devises
a. Requisites for Validity
A. GENERAL PROVISIONS b. Property Not Owned by the Testator
1. Definition c. Ineffective Legacies/ Devises
2. Succession Occurs at the Moment of Death
3. Kinds of Successors C. INTESTATE SUCCESSION
1. Relationship
B. TESTAMENTARY SUCCESSION 2. Causes of Intestacy
1. Wills 3. Order of Intestate Succession
2. Characteristics of a Will 4. Rule of Proximity and Rule of Equality
3. Non-Delegability of a Testamentary Power a. Exceptions to the Rule of Proximity and
4. Applicable Law as to Form and Substance Rule of Equality
of a Will 5. Determination of Heirs
5. Testamentary Capacity 6. Successional Barrier (the “Iron Curtain
6. Form of Notarial and Holographic Wills Rule”) (See Aquino v. Aquino, G.R. Nos.
7. Witnesses to a Notarial Will (Qualification 208912 and 209018, December 7, 2021)
and Disqualifications) 7. Successional Rights of Adopted Children
8. Conflict Rules 8. Successional Rights of Adopting Parents
9. Modes of Revocation of Wills and 9. Successional Rights of Marital and Non-
Testamentary Dispositions Marital Children
a. Effect on the Recognition of a Non- 10. Successional Rights of the Surviving
Marital Child Spouse
b. Theory of Dependent Relative 11. Successional Rights of Collateral Relatives
Revocation
c. Revocation Based on a False Cause D. PROVISIONS COMMON TO TESTATE AND
10. Heirs INTESTATE SUCCESSION
a. Compulsory Heirs 1. Capacity to Succeed
b. Institution of Heirs a. Incapacity by Reason of Unworthiness
(1) Limitations on the Institution of and Effects of Condonation
Heirs b. Incapacity by Reason of Morality
(2) Collective Institution c. Incapacity by Reason of Possible
(3) Proscription Against Successive Undue Influence
Institution 2. Right of Representation in Testacy and
(4) Institution Based on a False Cause Intestacy
c. Substitution of Heirs a. Requisites and Limitations
(1) Causes of Substitution 3. Right of Accretion in Testamentary
(2) Fideicomissary Substitution Succession and in Intestacy
(Compared With Testamentary a. Requisites and Limitations
Trusts) 4. Acceptance and Repudiation of Inheritance
11. Legitime a. Form of Repudiation
a. Collation in Connection With the b. Effects of Repudiation Compared to
Computation of Legitime Predecease and Incapacity
b. Table of Legitime
c. Impairment of the Legitime
d. Presumptive Legitime NOTE: This portion may still be subject to
12. Preterition
updates. A supplementary reviewer shall be
a. Requisites
b. Governing Law issued, if necessary.
13. Conditional Dispositions and Dispositions
a. Condition Not to Marry
b. Disposicion Captatoria
c. Modal Institution
14. Void Testamentary Dispositions
15. Disinheritance
a. Grounds for Disinheritance

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A. GENERAL PROVISIONS v. Vda. De Borja, 46 SCRA 577] and; (b) the heir’s
interest in the estate may be attached for purposes
DEFINITION of execution of his creditor [Reganon v. Imperial, 22
SCRA 80]
Succession – mode of acquisition by virtue of which
the property, rights and obligations to the extent of However, a person may be presumed dead for the
the value of the inheritance, of a person are purpose of opening his succession. (see rules on
transmitted through his death to another or others presumptive death, Art. 390-391) In this case,
either by his will or by operation of law. (Art. 774) succession is only of provisional character because
there is always the chance that the absentee may
Kinds of succession be alive.
(a) Compulsory — succession to the legitime (this
prevails over all kinds) Future inheritance cannot be the subject of a
(b) Testate — succession by will contract of sale because the seller owns no
(c) Intestate — succession by operation of law; inheritance while his predecessor lives. (Art. 1347 in
occurs in the absence of a valid will relation to Art. 777)
(d) Mixed — a combination of testate and intestate
succession. (Balane, Jottings and (c) Objective Element (Art. 776)
Jurisprudence in Civil Law, p. 29, 2016)
Inheritance – is the subject matter of succession
ELEMENTS OF SUCCESSION and includes all the transmissible property, rights,
and obligations of a person, which are not
(a) Subjective Element extinguished by his death.
(i) Decedent — person whose property is NOTE: If the right or obligation is strictly personal, it
transmitted through succession (Art. 775); is not transmissible, hence, it is extinguished by
also called testator in testate succession. death. (Balane, supra, p.2)
(ii) Successors/Heirs – those who are called
to succession to the whole or to an aliquot Determination of “Non-Transmissibility” of
portion of the inheritance either by will or by Obligation
operation on law. (Art. 782) 1) Nature of the Obligation- must be personal
obligation (e.g., to sing, dance, or obligations
SUCCESSION OCCURS AT THE MOMENT OF to do)
DEATH 2) Intransmissibility by stipulation of the parties;
3) Intransmissible by law
(b) Causal Element
Succession Distinguished From Inheritance
Death of the Person – The rights to the succession Succession refers to the legal mode by which
are transmitted from the moment of the death of the inheritance is transmitted to the persons entitled to
decedent. (Art. 777) it; while inheritance refers to the universality or
entirety of the property, rights and obligations of a
Thus, the capacity of the heir is determined as of the person who died.
time the decedent died (Art. 1034); the legitime is to
be computed as of the same moment (Art. 908), and KINDS OF SUCCESSORS
so is the inofficiousness of the donation inter vivos
(Art. 771). Similarly, the legacies of credit and 1) Compulsory – those who succeed by force of
remission are valid only in the amount due and law and are entitled to a legitime, which is in
outstanding at the death of the testator (Art. 935), proportion to the entire disposable estate and
and the fruits accruing after that are deemed to is predetermined by law, of which they cannot
pertain to the legatee. (Art. 948; Calalang-Parulan v. be deprived by the testator, except through a
Calalang-Garcia, G.R. No. 184148) valid disinheritance
2) Voluntary or Testamentary – those who are
In addition, the law in force at the time of the instituted by the testator in his/her will to
decedent’s death will determine who the heirs succeed to the free portion (that which the
should be [Uson v. Del Rosario, 92 Phil. 530)] and testator can freely dispose)
ownership passes to the heir at the very moment of (a) Devisees – persons to whom gifts of real
death, therefore, from that moment: (a) the heir property are given by virtue of a will (Art.
acquires the right to dispose of his share [De Borja 782)

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(b) Legatees – persons to whom gifts of c. Determination of the portions which the
personal property are respectively given by heirs, devises, or legatees are to take,
virtue of a will (Art. 782) when referred to by name; and
d. Determination of whether or not the
3) Legal or Intestate – those who succeed to the testamentary disposition is to be
estate of the decedent who dies without a valid
operative (Arts.785 and 787)
will, or one who does not leave a will, or to the
portion of such estate not disposed of by will
4) Mixed – is that effected partly by will and partly NOTE: This is entirely different from
by operation of law (Art. 780) the acceptance or renunciation by the
heir as beneficiary. The heir has the
NOTE: The distinction between heirs and devisees freedom to accept or renounce the
or legatees is important in these cases: testamentary benefit.
(a) Preterition (Art. 854), which totally annuls
the institution of heirs but devisees and • Acts which may be delegated to third
legacies remain valid persons (Art. 786):
(b) Imperfect/Ineffective disinheritance, which a. Distribution of specific property or
annuls institution of heirs only insofar as it sums of money that the testator may
may prejudice the person disinherited leave in general to specified classes or
(c) After-acquired properties causes; and
(d) Acceptance or non-repudiation of b. Designation of the persons, institutions
successional rights
or establishments to which such
property or sums are to be given or
B. TESTAMENTARY SUCCESSION
applied.
III. WILLS (GENERAL PROVISIONS)
3) Free and Voluntary Act — any vice affecting
testamentary freedom can cause the
Concept of a Will
disallowance of the will (Art. 839)
It is an act whereby a person is permitted with the
formalities prescribed by law to control to a certain
4) Formal and Solemn Act — the formalities are
degree the disposition of his estate to take effect
essential for validity (Art. 804-814; 820-821)
after his death. (Art. 783)
and will depend if what is executed is an
attested or holographic will.
NOTE: A will disposes only the free portion of the
estate. (Art. 886; Balane, supra, p. 38)
5) Act Mortis Causa — takes effect only after the
death of the testator (Art. 783)
IV. CHARACTERISTICS OF A WILL
6) Revocable or Ambulatory —Revocable at
1) Unilateral — does not need the approval of
any time during the testator’s lifetime (Art. 828)
any other person (implied in Art. 783)
2) Strictly Personal Act (Arts. 784-785) 7) Individual Act — two or more persons cannot
make a single joint will, either for their
reciprocal benefit or for another person. (Art.
• The making of a will is strictly a personal
818)
act; it cannot be left to the discretion of a
third person, or accomplished through the However, separate or individually executed
instrumentality of an agent or attorney (Art. wills, although containing reciprocal provisions
784) (mutual wills) are not prohibited, subject to the
• The following acts or stipulations may not rules on disposicion captatoria. (Art. 875)
be delegated to third persons:
a. Designation of heirs, devisees, or 8) Executed with animus testandi – testator
legatees; (Balane, supra, p.41) knowledgeable he wants to dispose of his
property to take effect after his death. (Art.
b. Duration or efficacy of the designation 783)
of heirs, devisees or legatees;
9) Executed with testamentary capacity – see
below (Art. 796-803)

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Oral declarations of the testator as to his intention

10) Dispositive of property (Art. 783) cannot be used in resolving either latent or patent
ambiguities (Balane, supra, p. 46). Why? A dead
11) Permitted/Statutory – Purely statutory such man cannot refute a tale.
that without a law authorizing it, it is not
available. Interpretation By General Meaning
The words of a will are to be taken in their ordinary
Interpretation of Wills and grammatical sense, unless a clear intention to
If a testamentary disposition admits of different use them in another sense can be gathered, and
interpretations, in case of doubt that interpretation that other can be ascertained. (Art. 790, par. 1)
by which the disposition is to be operative shall be
preferred. (Art. 788) Technical words in a will are to be taken in their
technical sense, unless the context clearly indicates
The words of a will are to be interpreted in a manner a contrary intention, or unless it satisfactorily
which will give effect to every expression, rather appears that the will was drawn solely by the
than one which will render any of the expressions testator, and that he was unacquainted with such
inoperative. The interpretation which will prevent technical sense. (Art. 790)
intestacy shall be preferred. (Art. 791)
Principle of Severability
Underlying Principle: Testacy is always preferred The invalidity of one of several dispositions
than intestacy, because the former is the express contained in a will does not result in the invalidity of
will of the decedent whereas the latter is only his the other dispositions, unless it is to be presumed
implied will. (Balane, supra, p. 45) that the testator would not have made such other
dispositions if the first invalid disposition had not
Animus Testandi - The testator’s intent (animus been made. (Art. 792)
testandi), as well as giving effect to such intent, is
primordial. Property Acquired After the Execution of the
Exception: When the intention of the testator is Will
contrary to law, morals or public policy. Property acquired during the period between the
execution of the will and the death of the testator is
In case of doubt, the interpretation by which the NOT included among the property disposed of. (Art.
disposition is to be operative or will sustain and 793)
uphold the will in all its parts shall be adopted, Exception: When a contrary intention expressly
provided that it can be done consistently with the appears on the will. (Art. 793)
established rules of law.
Interpretation Of Legacy and Devise
Kinds of Ambiguities In Wills (Art. 789) General Rule: In a legacy or devise, the testator
gives exactly the interest he has in the thing. (Art.
1) Latent or Intrinsic Ambiguities 794)
• those which do not appear on the face of
the will Exceptions:
• may be resolved through evidence aliunde 1) It is clear in the will that he intended to convey
or those outside of the will, except oral a less interest. (Art. 794)
declarations of the testator. 2) The testator expressly declares that he
conveys a part greater than his interest in the
2) Patent or Extrinsic Ambiguities thing. (Art. 929)
• those which appear on the face of the will
NOTE: In case the testator conveys a part greater
itself
than his interest in the thing, and if the person
• must be resolved only by provisions
owning such interest in excess of that of the testator
contained in the will itself.
does not wish to part with it, the solution in Art. 931
can be applied; the legatee or devisee shall be
In resolving ambiguities in wills, any admissible and
entitled only to the just value of the interest that
relevant evidence may be used to determine the
should have been acquired. (Balane, supra, p. 49)
intention of the testator, except for patent or extrinsic
ambiguities, for which the words of the will are to be
resorted to. V. NON-DELEGABILITY OF A
TESTAMENTARY POWER

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Strictly Personal Act

The making of a will is strictly a personal act; it VII. TESTAMENTARY CAPACITY AND
cannot be left to the discretion of a third person, or INTENT
accomplished through the instrumentality of an
agent or attorney (Art. 784) It is the ability as well as the legal capacity to make
a will. It must be present at the time of the execution
of the will. (Balane, supra, p. 52)
VI. APPLICABLE LAW AS TO FORM
AND SUBSTANCE OF A WILL Who are capacitated to make a will (NES)
1) Natural person not expressly prohibited by law
Requirements for Validity of Wills to make a will. (Art. 796)
1) Extrinsic / Formal Validity – refers to the 2) Eighteen (18) years old and above (Art. 797).
requirement of form and determined in probate 3) Of Sound mind, at the time of its execution (Art.
proceedings; it includes: 798)
(a) Formalities provided by law
(b) Testamentary Capacity All of these must be present at the time of the
execution of the will. (in relation with Art. 801)
2) Intrinsic / Substantive Validity – refers to the
substance of the provisions and generally Soundness of Mind
determined after probate (Balane, supra, p. 50) To be of sound mind, it is not necessary that the
testator be in full possession of all his reasoning
EXTRINSIC INTRINSIC faculties, or that his mind be wholly unbroken,
VALIDITY VALIDITY unimpaired, or unshattered by disease, injury or
GOVERNING For Filipinos For Filipinos: other cause. (Art. 799)
LAW AS TO
TIME and Foreigners: Law at the
Law at the time time of death A testator is considered of sound mind if at the time
of execution (Art. 16 & of making of the will he knows the following:
(Art. 795) 2263) 1) Nature of the estate to be disposed of - The
testator should have a fairly accurate
For knowledge of what he owns. (Balane, supra, p.
Foreigners: 53)
National law
(Art. 16, 2) Proper objects of his bounty - The testator
par.2; Art. should know under ordinary circumstances,
1039) who his relatives in the most proximate
GOVERNING For Filipinos For Filipinos: degrees, are. (Balane, supra, p. 53)
LAW AS TO
PLACE and Foreigners: Philippine law
(Art. 815-817) 3) Character of the testamentary act (Art. 799) -
For The testator should know the legal nature of a
a. Citizenship Foreigners: will. He or she must know that he is executing
b. Domicile National law a document that disposes of his properties
c. Residence gratuitously, which would take effect upon his
d. Place of death. (Balane, supra, p. 53-54)
Execution
e. Philippine Legal Presumption in Favor Of Soundness Of
Law Mind (Art. 800)
General Rule: The law presumes that every person
is of sound mind, in the absence of proof to the
contrary. Forgetfulness, even if proven, is not proof
Rules on Formal Validity of Wills of unsoundness of mind. (Baltazar v. Laxa, G.R. No.
Every testator, whether Filipino or alien, wherever 17449)
he may be, has five choices as to what law to follow
for the form of his/her will: Exceptions:
(a) Law of his citizenship (Art. 15, 816, 817) (a) When the testator, one month or less before
(b) Law of the place of execution (Art. 17) the execution of the will, was publicly known to
(c) Law of his domicile (Art. 816) be insane (Art. 800);
(d) Law of his residence (Art. 816) (b) When the testator executed the will after being
(e) Philippine law (Art. 15, 816, 817) placed under guardianship or ordered

ATENEO CENTRAL
committed to a mental institution (under Rules 147145) This is merely evidentiary and
93 and 101, respectively of the Rules of Court), should be proven during probate.
and before said order has been lifted. (Baltazar • The presumption that testator knows and
v. Laxa, G.R. No. 174489)
understands language or dialect applies
NOTE: Supervening capacity or incapacity does not only if:
invalidate an effective will, nor is the will of an i. The will was executed in a language
incapable validated by supervening capacity (Art. generally spoken in the place of
801). execution; and
ii. The testator is a native or resident of
Mentally aberrant medically does not equate to such locality. (Abangan v. Abangan,
testamentary incapacity. [Galvez v. Galvez, 26 Phil G.R. No. L-13431)
243 (1913)]
NOTARIAL/ATTESTED WILLS
Burden of Proof of Soundness of Mind
1) The person who opposes probate of the will Requirements for Notarial Wills (Art. 805-806)
has the burden of proof that the testator was 1) Subscribed by the testator or his agent in his
not of sound mind (Art. 800). presence and by his express direction at the
2) The person who maintains the validity of the end thereof, in the presence of the witnesses;
will must prove that the testator executed it 2) Attested and subscribed by at least three
during a lucid interval, when the testator was credible witnesses in the presence of the
publicly known to be insane, one month or less
testator and of one another;
before making his will. (Art. 800)
3) The testator, or his agent, must sign every
VIII. FORMS OF NOTARIAL AND page, except the last, on the left margin in the
HOLOGRAPHIC WILLS presence of the witnesses;
4) The witnesses must sign every page, except the
Kinds of Wills last, on the left margin in the presence of the
(a) Notarial / Attested – an ordinary will testator and of one another;
acknowledged before a notary public by the 5) All pages must be numbered correlatively in
testator and the instrumental witnesses (Art. letters on the upper part of each page;
805-806) 6) Attestation clause stating:
(b) Holographic – a will totally handwritten, dated, a) The number of pages of the will;
and signed by the testator alone. (Art. 810) b) The fact that the testator or his agent under
his express direction signed the will and
Formalities Common To Notarial And
Holographic Wills: every page thereof, in the presence of the
1) Every will must be in writing (Art. 804); and witnesses;
• Nuncupative (Oral) Wills are not allowed c) The fact that the witnesses witnessed and
except in the Muslim Personal Laws of the signed the will and every page thereof in
Philippines the presence of the testator and one
another;
• Any form of writing is allowed, provided
7) Acknowledgement before a notary public
i. Must be understood by others, and
ii. Must be capable of being preserved and Subscribed by the Testator or his Agent in his
with permanence. Reason: generally, Presence and by his Express Direction at the
wills are probated after the death of the End thereof, in the Presence of the Witnesses
testator, so it must have the character of The testator’s thumbprint is always a valid and
permanence and must be understood sufficient signature for the purpose of complying
by others. with the requirement of the law. There is no basis for
limiting the validity of thumbprints only to cases of
2) Executed in a language or dialect known to the illness or infirmity. (De Gala v. Gonzales G.R. No. L-
testator (Art. 804) 30289; Dolar v. Diancin, G.R. No. L-33365; Lopez v.
• It must be understood by testator, but it is Liboro, G.R. No. L-1787)
not required that the will specifically state
that it is in a language or dialect known to However, a sign of the cross does not comply with
the testator. (Abada v. Abaja, G.R. No. the statutory requirement of signature, unless it is
the testator’s usual manner of signature or one of

ATENEO CENTRAL
his usual styles of signing. The cross does not have The order of signing is immaterial, provided
the trustworthiness of a thumbmark. (Garcia v. everything is done in a single transaction. However,
Lacuesta, G.R. No. L-4067) if the affixation of the signatures is done in several
transactions, then it is required that the testator affix
his signature ahead of the witnesses. (Balane,
Agent of the Testator Subscribing under his supra, p. 86-87)
Express Direction
The essential thing for validity is that the agent wrote Pagination
the testator’s name. It would be a good thing, but not The pagination by means of a conventional system,
required, for the agent to indicate the fact of agency a generally accepted or known sequential order, is
or authority. (Barut v. Cabacungan, G.R. No. L- required, while the pagination in letters on the upper
6285) part of each page is merely directory. (Balane,
supra)
Signed at the End
Signing before the end invalidates not only the Attestation Clause Need Not be Signed by the
dispositions that come after, but the entire will, Testator
because the one of the statutory requirements The attestation clause is the affair of the witnesses,
would not have been complied with. (Azuela v. Court therefore, it need not be signed by the testator.
of Appeals, G.R. No. 122880) (Fernandez v. Vergel de Dios, G.R. No. L-21151)
Two Kinds of End Witnesses Must Sign at the End of Attestation

1. Physical end – where the writing stops Clause
2. Logical end – where the last testamentary The attestation clause is a memorandum of the facts
disposition ends. attending the execution of the will required by law to
Signing at either end is permissible. (Balane, be made by the attesting witnesses, and it must
necessarily bear their signatures. An unsigned
supra)
attestation clause cannot be considered an act of
the witnesses, since the omission of their signatures
Signed in the Presence of Witnesses at the bottom negatives their participation. If an
Actual seeing is not required, but the ability to see attestation clause not signed at the bottom be
each other by merely casting their eyes in the proper admitted, it would be easy to add such clause to a
direction. (Nera v. Rimando, G.R. No. L-5971) will on a subsequent occasion and in the absence of
the testator and any or all witnesses. (Cagro v.
Acts of Witnesses Cagro, G.R. No. L-5826; Azuela v. Court of Appeals,
• Attesting – act of witnessing G.R. No. 122880)
• Subscribing – act of signing their names in the
proper places of the will (Balane, supra, p. 81 Attestation Clause Separate from
citing Taboada v. Rosal, G.R. No. L-36033; Acknowledgement Clause
Caneda v. CA, G.R. No. 103554) An attestation clause is mandatory for attested wills.
It is separate and distinct from an acknowledgement
The witnesses need not sign at the end of the will. It clause. These two cannot be merged. (Echavez v.
is sufficient that they signed the will even marginally. Dozen Construction, G.R. No. 192916)
(Taboada v. Rosal, G.R. No. L-36033)
Acknowledgment
Signing on Every Page, Except the Last The act of one who has executed a deed in going
Signing on every page of the will is mandatory, while before some competent officer (i.e., notary public) or
the place of signing, i.e. left margin, is merely court and declaring it to be his act or deed. It
directory. The signature can be affixed anywhere on involves an extra step undertaken whereby the
the page. (Balane, supra) signatory actually declares to the notary public that
the same is his or her own free act and deed. (Lee
When No Marginal Signatures are Required v. Tambago, A.C. No. 5281)
If the entire document consists of only two sheets,
the first containing the will and the second, the Two-Fold Purpose of the Acknowledgement
attestation clause, there need not be any marginal 1. To safeguard the testator’s wishes long after his
signatures at all. (Abangan v. Abangan, G.R. No. L- demise; and
13431) 2. To assure that his estate is administered in the
manner that he intends it to be done (Lee v.
Order of Signing Tambago, A.C. No. 5281)

ATENEO CENTRAL
glaucoma), the three instrumental witnesses and the

Certification Need Not be Signed in the notary public. The court stated: “So when an
Presence of the Testator and Witnesses interpretation already given assures such ends, any
Whether or not the notary signed the certification of other interpretation whatsoever, that adds nothing
acknowledgment in the presence of the testator and but demands more requisites entirely unnecessary,
the witnesses, does not affect the validity of the will. useless and frustrative of the testator's will, must be
All that must be done is that the testator and the disregarded.“
witnesses avow to the certifying officer the
authenticity of their signatures and the voluntariness Rule on Substantial Compliance (Art. 809)
of their actions in executing the testamentary
disposition. (Javellana v. Ledesma, G.R. No. L- Article 809 is Applicable Only to the Attestation
7179) Clause
1) In the absence of
Requirements for the Notary Public a) Bad faith
1. Must be duly commissioned for the locality b) Forgery
where the acknowledgment is made (Guerrero c) Fraud
v. Bihis, G.R. No. 174144) d) Undue and improper pressure and
2. Must not be one of the three attesting witnesses influence
(Cruz v. Villasor, G.R. No. L-32213) 2) Defects and imperfections in the form of
attestation or in the language used therein
NOTE: There is no requirement that an attested will 3) Shall not render the will invalid
should be dated. Consequently, a variance between 4) If it is proved that the will was in fact executed
the indicated dates of execution and and attested in substantial compliance with all
acknowledgement does not in itself invalidate the the requirements of Art. 805.
will. (Ortega v. Valmonte, G.R. No. 157451)
However, only omissions in the attestation clause
Special Requirements for Handicapped which can be supplied by an examination of the will
Testators itself or by intrinsic evidence will not be fatal to the
validity of the will. The omissions in the attestation
Deaf/Deaf-Mute Testator (Art. 807) clause which can only be proved by extrinsic
1) If able to read — he must read the will evidence would result in the invalidation of the
personally attestation clause and ultimately of the will itself.
2) If unable to read — he must designate two (Caneda v. CA, G.R. No. L-18076\)
persons to read the will and communicate to
him, in some practicable manner, its contents. However, the attestation clause indisputably omitted
to mention the number of pages comprising the will.
Blind Testator (Art. 808) Nevertheless, the acknowledgment portion of the
The will shall be read to him twice, once by one of will supplied the omission by stating that the will has
the subscribing witnesses and another by the notary five pages and was therefore deemed substantial
public before whom the will is acknowledged. compliance by the Supreme Court under Article 809.
(Tanchanco v. Santos, G.R. No. 204793)
The rationale behind the requirement of reading the
will to the testator if he is blind or incapable of HOLOGRAPHIC WILLS
reading the will himself (as when he is illiterate), is
to make the provisions of the will known to him, so Requirements for Holographic Wills (EHAND-
that he may be able to object if they are not in DSL)
accordance with his wishes. (Garcia v. Vasquez, 1. Entirely HANDwritten by the testator
G.R. No. L-26615)
2. Dated by him
The special requirements for handicapped testators 3. Signed by him (Art. 810; Balane, supra, p. 130)
are mandatory; non-compliance with Articles 807 or 4. Executed in a Language or dialect known to the
808 will result in nullity and denial of probate. testator (Art. 804)
(Balane, supra) However, in the case of Alvarado v.
Gaviola, Jr., 226 SCRA 348 , the Supreme Court Date
stated that substantial compliance is sufficient as The date of the will should include the day, month,
when the lawyer who drafted the will read the will and year of its execution. (Roxas v. De Jesus, G.R.
aloud before the testator (who was suffering from No. L-38338)

ATENEO CENTRAL
The law does not specify a particular location where With the The will is void for not being
the date should be placed in the will. The only consent of the totally in the handwriting of
requirements are that the date be in the will itself testator the testator (Art. 810)
and executed in the hand of the testator. (Labrador
v. Court of Appeals, G.R. Nos. 83843-44) Prohibition on Joint Wills
Two or more persons cannot make a will jointly, or
Signed by the Testator in the same instrument, either for their reciprocal
The testator must sign at the end of testamentary benefit or for the benefit of a third person. (Art. 818)
dispositions. Otherwise, the dispositions written
below his signature, which are not subsequently Joint Will – One document which constitutes the
dated and signed by him will be invalidated. (Art. wills of two or more individuals. These kinds of wills
812) are void. (Balane, supra)
Forms of Holographic Wills If there are several documents, each serving as one
A holographic will is subject to no other form, and independent will, even if they are written on the
may be made in or out of the Philippines, and need same sheet, they are not joint wills. (Balane, supra)
not be witnessed. (Art. 810)
NOTE: Joint wills executed by Filipinos in a foreign
Additional Dispositions in a Holographic Will country shall not be valid in the Philippines, even
Additional dispositions in a holographic will must be though authorized by the laws of the country where
dated and signed by the testator. (Art. 812) The they may have been executed. (Art. 819) However,
signature and the date may be done in the following reciprocal wills of foreign nationals jointly probated
manner: in another jurisdiction, can be admitted for reprobate
1. Signature and date after each additional in the Philippines since the prohibition is in the
disposition, or making of joint wills, and not on the joint probate of
2. Each additional disposition signed and undated, wills. (Vda. De Perez v. Tolete, G.R. No. 76714)
but the last disposition signed and dated. (Art.
813) Reasons of Public Policy Against Joint Wills
1) Limitation on the modes of revocation. (i.e. one
What if additional dispositions are dated but not of the testators would not be able to destroy the
signed? Only the last disposition that is dated and document without also revoking it as the will of
signed will be valid. the other testator, or in any event, as to the
latter, the problem of unauthorized destruction
Insertion, Cancellation, Erasure or Alteration in would come in) (Balane, supra, p. 171)
a Holographic Will (Art. 813) 2) Diminution of testamentary secrecy; (Balane,
General Rule: If made by the testator supra)
contemporaneously with the making of the will, the 3) Danger of undue influence (Dacanay v.
full customary signature of the testator should Florendo, G.R. No. L-2071)
authenticate all alterations, cancellations and 4) Danger of one testator killing the other
erasures. If not, the general rule is that the will is (Dacanay v. Florendo, G.R. No. L-2071)
valid but the alterations, cancellations and erasures
will not be valid. (Velasco v. Lopez, G.R. No. 905). CODICILS AND INCORPORATION BY
REFERENCE
Exceptions:
1. Where there is only one testamentary Codicil – A supplement or addition to a will, made
disposition and the unauthenticated alteration after the execution of a will and annexed, to be taken
affects the sole disposition (e.g., one heir as a part of the will. It explains, adds, or alters, any
substituted by another), then the whole will is disposition made in the original will. (Art. 825)
void (Kalaw v. Relova, 132 SCRA 237)
2. Where the alteration or erasure is on the Codicils Must be Executed as in Wills
signature and the date, the whole essence is In order that a codicil may be effective, it shall be
affected making the whole will void. (Spouses executed as in the case of a will. (Art. 826)
Alejo v. CA, G.R. No. 106720)
However, the codicil does not need to conform to the
ALTERATIONS MADE BY A THIRD PERSON form of the will to which it refers. An attested will may
Without the The insertion, cancellation, have a holographic codicil, or vice versa. (Balane,
consent of the erasure or alteration is not supra)
testator considered as written.

ATENEO CENTRAL
Requirements for Incorporation by Reference have good standing in the community or that they
If a will refers to a document or paper, such are honest, upright or reputed to be trustworthy
document or paper will be considered a part of the and reliable. (Gonzales v. Court of Appeals, 90
will if the following requisites concur (EPPS): SCRA 183)
1. The document or paper referred to in the will
must be in Existence at the time of the Creditors as Witnesses
execution of the will; Creditors can be witnesses to his or her debtor’s will.
2. The will must clearly describe and identify the A mere charge on the estate of the testator for the
same, stating among other things the number of payment of debts due at the time of death does not
Pages thereof; prevent the creditor from being a competent
3. It must be identified by clear and satisfactory witness. (Art. 824)
Proof as the document or paper referred to
therein; and X. CONFLICT RULES
4. It must be Signed by the testator and the
witnesses on each and every page except in National law of the person whose succession is
case of voluminous books of account or under consideration is the governing law for
inventories. (Art. 827) intestate and testamentary successions with
respect to:
The documents, inventories, books of accounts, 1) Order of succession;
documents of titles, and other papers of similar 2) Amount of successional rights;
nature should under no circumstances make 3) Intrinsic validity of testamentary provisions (Art.
testamentary dispositions, for then the formal 16)
requirements for wills would be circumvented.
(Balane, supra) Rules for Revocation (Art. 829)
1) If revocation made in the Philippines –
NOTE: Holographic wills cannot incorporate Philippine law
documents by reference unless the incorporated 2) If revocation is made outside the Philippines
paper is also entirely in the handwriting of the and testator is not domiciled in the Philippines:
testator. In case of notarial wills, it is sufficient that a) Law of the place where the will was made,
the signatures of the testator and witnesses on or
every page of the incorporated document except in b) Law of the place where the testator was
case of voluminous books of account or inventories. domiciled at the time of revocation
(Balane, supra, p. 183) 3) If revocation is made outside the Philippines
and testator is domiciled in the Philippines
IX. WITNESSES TO A NOTARIAL WILL a) Philippine law
b) Law of the place of revocation
Qualifications: c) Law of the place where the will was made
1) Of sound mind (Art. 820) (Balane, supra, p. 184)
2) At least 18 years of age (Art. 820)
3) Not blind, deaf, or dumb (Art. 820)
4) Able to read and write (Art. 820) XI. MODES OF REVOCATION OF
5) Domiciled in the Philippines (Art. 821) WILLS AND TESTAMENTARY
6) Must not have been convicted of falsification of
DISPOSITIONS
a document, perjury, or false testimony (Art.
821)
REVOCATION OF A WILL
A will may be revoked by the testator at any time
The above qualifications must be possessed at the
before his death. Any waiver or restriction of this
time of attesting the will. Their subsequent
right is void. (Art. 828)
incompetence shall not prevent the allowance of the
will. (Art. 822)
MODES OF REVOKING A WILL (Art. 830)
No will shall be revoked except in the following
Witnesses to the will need not be “credible” under
cases: (LSPD)
the naturalization law as they are not tasked to be
1) By operation of Law – May be total or partial
character witness. In order to be competent as 2) By Subsequent will – some will, codicil, or other
instrumental witnesses there must only be a writing executed as provided in case of wills
showing of having the qualification under Articles 3) By Physical Destruction – by burning, tearing,
820 to 821. It is not mandatory that evidence be cancelling, or obliterating the will with intention
first established on record that the witnesses

ATENEO CENTRAL
of revoking it, by the testator himself, or by Requisites for a Valid Revocation by Physical
some other person in his presence, and by his Destruction (Art. 830 (3); Balane, supra, p. 186-
express direction. 187)
1. Testamentary capacity at the time of performing
Instances of Revocation by Operation of Law the act of destruction;
a) Decree of legal separation, nullity or annulment 2. Intent to revoke (animus revocandi);
of marriage for dispositions in favor of the guilty 3. Actual physical act of destruction, even partial
spouse (Family Code, Art. 63, par. 4) as long as it is not due to desistance (corpus);
b) Preterition (Art. 854) 4. Completion of the subjective phase; and
c) Legacy or credit against third person or 5. Performed by the testator himself or by some
remission of debt was provided in will and other person in his presence and express
subsequently, testator brings action against direction (Art. 830(3))
debtor (Art. 936)
d) Substantial transformation of specific thing NOTE: No amount of destruction without animus
bequeathed, or sale or disposition of property revocandi, without destruction (even partial, as long
bequeathed or devised before the death of the as not due to desistance) will revoke a will. (Art. 830
testator (Art. 957) (3); Balane, supra, p. 187)
e) When heir, devisee or legatee commits any of
the acts of unworthiness (Art. 1032) If the will was burned, torn, cancelled, or obliterated
f) Annulled or void ab initio marriages revoke by some other person, without the express direction
testamentary dispositions made by one spouse of the testator, the will may still be established, and
in favor of the other (Family Code, Art. 50) the estate distributed in accordance therewith, if its
g) If both spouses of the subsequent marriage contents, and due execution, and the fact of its
acted in bad faith, said marriage shall be void unauthorized destruction, cancellation, or
ab initio and testamentary dispositions made by obliteration are established according to the Rules
one in favor of the other are revoked by of Court. (Art. 830)
operation of law. (Family Code, Art. 44)
Doctrine of Presumed Revocation
Revocation by Some Will, Codicil, or Other Where the will cannot be found following the death
Writing Executed as Provided in case of Wills of the testator and it is shown that it was in the
Express – When there is a revocatory clause testator's possession when last seen, the
expressly revoking the previous will or a part presumption is that he must have destroyed it with
thereof. (Balane, supra, p. 193) animus revocandi. (Gago v. Mamuyac, G.R. No. L-
26317)
Implied – When the provisions thereof are partially
or entirely inconsistent with those of the previous Revocation by Subsequent Will Effective even
wills. (Art. 831) if New Will Becomes Inoperative
A revocation made in a subsequent will shall take
NOTE: Subsequent wills which impliedly revoke the effect, even if the new will should become
previous ones, annul only such dispositions in the inoperative by reason of the incapacity of the heirs,
prior wills as are inconsistent with or contrary to devisees or legatees designated therein, or by their
those contained in the later wills. (Art. 831) renunciation. (Art. 832)
Requisites for a Revocation by Subsequent GENERAL RULE: Revocation is always effective.

Instrument
1. The subsequent instrument must comply with EXCEPTION: THEORY OF DEPENDENT
the formal requirements of a will. (Vda. de Molo RELATIVE REVOCATION – when the testator
v. Molo, G.R. No. L-2538) provides in the subsequent will that the revocation
2. The testator must possess testamentary of the prior one is dependent on the capacity or
capacity. (Balane, supra, p. 185) acceptance of the heirs, devisees, or legatees
3. The subsequent instrument must either contain instituted in the subsequent will. (Vda. de Molo v.
an express revocatory clause or be Molo, G.R. No. L-2538)
incompatible with the prior will. (Art. 831)
The subsequent will must be probated in order In the doctrine of dependent relative revocation, the
to take effect. (Vda. de Molo v. Molo, G.R. No. first will may be admitted to probate and given effect,
L-2538) despite it being torn provided that the testator tore it
with the mistaken belief that the second will was
perfectly valid. This is because he would have not

ATENEO CENTRAL
destroyed the first will had he known that second will III does not revive Will I, unless of course, Will III
is not valid. The revocation is therefore dependent expressly revives Will I. (Balane, supra, p. 205)
on the validity of the second will. (Vda. de Molo v.
Molo, G.R. No. L-2538) PROBATE (ALLOWANCE OR DISALLOWANCE
OF WILLS)
REVOCATION BASED ON FALSE CAUSE
Revocation based on a false or illegal cause is null Probate – Judicial process of proving:
and void. (Art. 833) 1) Compliance with formal requirements of will;
and
Requisites for revocation for a false cause: 2) Testamentary capacity of the testator.
1) The cause must be concrete, factual and not Irrespective of whether its provisions are valid and
purely subjective. enforceable or otherwise. (Fernandez v. Dimagiba,
2) It must be false. G.R. No. L-23638)
3) The testator must not know of its falsity.
4) It must appear from the will that the testator is No will shall pass either real or personal property
revoking because of the cause, which is false. unless it is proved and allowed in accordance with
(Balane, supra, p. 204) the Rules of Court. (Art. 838 (1))
NOTE: Even if the revocation is for a false cause but Mandatory Character of Probate
the will is holographic and the revocation is by Probate is mandatory in the sense that if there is a
physical destruction, the revoked will can no longer will, properties of the estate should pass only in
be probated. accordance with the will, provided it is admitted for
probate. It is mandatory also in the sense that it
EFFECT ON THE RECOGNITION OF A NON- takes precedence over intestate proceedings. Court
MARITAL CHILD ordered consolidation of the intestate proceedings
The recognition of an illegitimate child does not lose with the testate proceedings, with the testate
its legal effect, even though the will wherein it was proceedings taking precedence. Heirs cannot enter
made should be revoked. (Art. 834) into compromise agreement different from the terms
of the will. If admitted to probate and found valid, the
REPUBLICATION AND REVIVAL OF WILLS will should be the basis of disposition as the express
will of the testator. (Roberts v. Leonidas, G.R. No. L-
Republication 55509)
If the testator wishes to republish a will that is void
as to form, the only way to republish it is to execute Two Kinds of Probate
a subsequent will and reproduce it. (Art. 835) (a) Post-mortem – After the testator’s death
(b) Ante-mortem – During his lifetime (Balane,
Revival (Art. 836) supra, p. 217)
The testator needs only to execute a subsequent will
or codicil referring to the previous will if the testator The testator himself may, during his lifetime, petition
wishes to republish a will that is either: the court having jurisdiction for the allowance of his
(a) Void for reason other than a formal defect will. (Art. 838)
(b) Previously revoked
Finality of a Probate Decree
REPUBLICATION REVIVAL Subject to the right of appeal, the allowance of the
Takes place by an act Takes place by will, either during the lifetime of the testator or after
of the testator operation of law his death, shall be conclusive as to its due
Corrects extrinsic and Restores a revoked execution. (Art. 838) Once a decree of probate
extrinsic defects will in certain instances becomes final in accordance with the rules of
procedure, it is res judicata.
If after making a will, the testator makes a second
will expressly revoking the first, the revocation of the Joint wills are considered to have a defect in form
second will does not revive the first will, which can (non-compliance with formalities). However, if
be revived only by another will or codicil. (Art. 837) allowed and probated and becomes final, it can pass
properties. (De la Cerna v. De la Cerna G.R. No. L-
Illustration: 28838)
In 1985, X executed Will I. In 1987, X executed Will
II expressly revoking Will I. In 1990, X executed Will Scope of Probate Proceedings
III, revoking Will II. The revocation of Will II by Will

ATENEO CENTRAL
General Rule: Probate proceedings cover the due of a person the testator is guilty of concubinage with
execution of the will, extrinsic of formal validity and (Nepomuceno v. CA, G.R. No. L-62952); and
testamentary capacity of the testator only, and no
other extraneous matters. 4) All heirs are in agreement that intrinsic validity
should be determined first. (Reyes v. CA, G.R. No.
Intrinsic validity cannot be ruled upon (i.e. 139587)
impairment of legitime, unlawful provisions,
disqualifications of heirs, legatees, devices, etc.) or NOTE: Once the will is admitted to probate, the
other extraneous matters. An extrinsically valid will court may continue to proceed in determining the
admitted to probate can still be declared void intrinsic validity of the will.
intrinsically. (Balane, supra, p. 221)
Decree of Probate Conclusive as to the Due
Exceptions: Other extraneous matters, which can Execution or Formal Validity of the Will
be raised and decided in probate proceedings. This means that:
(Nepomuceno v. CA, G.R. No. L-62952; Balanay v. 1) The fact that the will is indeed the testator’s last
Martinez, G.R. No. L-39247.) will and testament;
2) Compliance with the required formalities
Thus: (Balane, supra, p. 221);
1) Provisional ruling on ownership of 3) Testamentary capacity of the testator;
properties (Gallanosa v. Arcangel, G.R. No. L-29300)
The ruling is only for purposes of inclusion in the 4) Due execution of the will – meaning, that
inventory of assets of the estate. It not conclusive testator was of sound disposing mind, that he
and is subject to final decision in a separate action freely executed the will, that there is no duress,
to resolve title. In case of community properties of fraud, undue influence, menace, that the will is
spouses, there must first be liquidation of ACP or genuine (not forged), and that testator was not
CPG because the assets of the estate should be net disqualified from making a will. (Dorotheo v. CA,
of the share of surviving spouse. (Pastor v. Pastor G.R. No. 108581).
G.R. No. L-56340).
Proof of Extrinsic Validity
However, the rule of provisional character of Attested / Notarial Will
determination of ownership not being within the 1. Present original will (ideally)
proper jurisdiction of the probate court applies only 2. Present any attesting witnesses and/or notary
if the dispute is between the estate and third public to prove due execution/ testamentary
persons claiming ownership, in which case a capacity; and
separate proceeding should be instituted to settle 3. If no one is available, present any available
the issue of ownership. A probate court has evidence to show authenticity or validity of
jurisdiction if the dispute is only among heirs, and contents of attestation clause. (Rules of Court,
the issue is to determine whether the property is part Rule 76)
of the ACP/CPG or is a separate property of one of
the spouses. (Romero v. CA, G.R. No. 188921) Holographic Will
1. Present original will or at least a photo static,
The approval of the inventory and the concomitant scanned or any legible copy; and
determination of the ownership as basis for inclusion 2. One person familiar with the handwriting of the
or exclusion from the inventory were provisional and testator, unless contested in which case, three
subject to revision at any time during the course of witnesses familiar with the handwriting of the
the administration proceedings. (Aranas v. testator must be presented to prove that the will
Mercado, G.R. No. 156407) was written in the handwriting of the testator.
(Rules of Court, Rule 76, Sec. 5) If there are no
2) Apparent intrinsic defect competent witnesses and the court deems it
If the intrinsic defect is apparent on the face of the necessary, expert testimony may be resorted
will, since probate of the will is unnecessary (as in to. (Art. 811)
preterition, which annuls the will) (Nuguid v. Nuguid,
G.R. No. 23445) ATTESTED / NOTARIAL WILLS
Uncontested One subscribing witness only,
3) For practical considerations when if such witness testify that the
testamentary provisions are of doubtful validity such will was executed as is
as when it is apparent that the disposition is in favor required by law (Rule 76,
Section 5, Rules of Court)

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Contested All the subscribing witnesses, testimony of witnesses and/or notary public. In the
and the notary (Rule 76, Section absence of any proof, the court may rely on the
11, Rules of Court) presumption of soundness of mind. (Art. 800)
HOLOGRAPHIC WILLS
Uncontested At least one witness who knows Exclusive Grounds for Disallowance of Wills
the handwriting and signature of (LIF-P-FraM) (Art. 839)
the testator explicitly declares 1. Formalities required by Law were not complied
that the will and the signature are with;
in the handwriting of the testator 2. Testator was Insane or incapable of making a
(Art. 811) will at the time of execution (lack of
Contested At least three witnesses who testamentary capacity);
know the handwriting and 3. The will was executed through Force or under
signature of the testator explicitly duress, or the influence of fear, or threats;
declare that the will and the 4. The will was procured by undue and improper
signature are in the handwriting Pressure and influence, on the part of the
of the testator (Art. 811) beneficiary or of some other person;
5. The testator’s signature was procured through
Probate of Lost or Destroyed Will Fraud; and
Requirements for the Probate of a Lost or 6. If the testator acted by Mistake or did not intend
Destroyed Will (Rules of Court, Rule 76, Sec. 5) that the instrument he signed should be his will
1. Establish the execution and validity of the will at the time of affixing his signature.
2. Establish that the will is in existence at the time
of death of the testator, or is shown to have NOTE: Once a will is disallowed because of any of
been fraudulently or accidentally destroyed in the following grounds, intestate succession will
the lifetime of the testator without his knowledge ensue.
3. Its provisions must be clearly and distinctly
proved by at least two credible witnesses XII. HEIRS
Lost or Destroyed Holographic Will COMPULSORY HEIRS
General Rule: In the probate of a holographic will, The following are compulsory heirs:
the document itself must be produced. A lost 1) Legitimate children and descendants, with
holographic will cannot be probated. (Gan v. Yap, respect to their parents and ascendants;
G.R. No. L-12190) 2) Legitimate parents and/or ascendants, parents
of illegitimate children;
The oppositor may present witnesses who know the 3) Surviving spouse;
testator’s handwriting, who after comparing the will 4) Illegitimate children and/or descendants (Art.
with other writings or letters of the deceased, have 887)
come to the conclusion that such will has not been
written by the hand of the testator. And the court in One who has no compulsory heirs may dispose by
view of such contradictory testimony may use its will of all his estate or any part of it in favor of any
own visual sense, and decide in the face of the person having capacity to succeed.
document, whether the will submitted to it has
indeed been written by the testator. Obviously, when One who has compulsory heirs may dispose of his
the will itself is not submitted, these means of estate provided he does not contravene the
opposition and of assessing the evidence are not provisions of this Code with regard to the legitime of
available. The only guaranty of authenticity—the said heirs. (Art. 842)
testator’s handwriting—has disappeared. (Gan v.
Yap, G.R. No. L-12190) Classes of Compulsory Heirs
(a) Primary – Those who have precedence over
Exception: A photostatic copy or Xerox copy of the and exclude other compulsory heirs
holographic will may be allowed because i. Legitimate or adopted children and/or
comparison can be made with the standard writings descendants (legitimate), with respect
of the testator. (Rodelas v. Aranza, G.R. No. L- to their legitimate parents and
58509) ascendants (Arellano v. Pascual, G.R.
No. 189776 citing Tolentino 1992 ed.,
Proof of Testamentary Capacity p. 252)
Testamentary capacity including soundness of mind
can be proven by the attestation clause and

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(b) Secondary – Those who succeed only in the (d) Illegitimate children and/or descendants
absence of the primary heirs
i. Legitimate parents and ascendants NOTE: In all cases of illegitimate children, their
(legitimate), with respect to their filiation must be duly proved. (Art. 887)
legitimate children and descendants
ii. Parents of illegitimate children – only in As to illegitimate descendants the rule is also
default of any kind of descendants the nearer exclude the more remote, without
(Arellano v. Pascual, G.R. No. 189776, prejudice to representation when proper.
citing Tolentino 1992 ed., p. 252)
INSTITUTION OF HEIRS
(c) Concurring – Those who succeed together An act by virtue of which a testator designates in his
with the primary or the secondary compulsory will the person or persons who are to succeed him
heirs in his property and transmissible rights and
i. Widow or widower (legitimate) – the obligations. (Art. 840)
surviving spouse referred to is the
spouse of the decedent. A will shall be valid even though it does not contain
ii. Illegitimate children and/ or an institution of an heir, or such institution does not
descendants (Arellano v. Pascual, comprise the estate, or even though the person so
G.R. No. 189776 citing Tolentino 1992 instituted should not accept the inheritance or
ed., p. 252) should be incapacitated to succeed. In such case,
the testamentary dispositions made in accordance
Compulsory Heirs (Art. 887) with law shall be complied with, and the remainder
(a) Legitimate or adopted children and/or legitimate of the estate shall pass to the legal heirs. (Art. 841)
descendants.
DISPOSITIONS BY WILL
NOTE: The nearer exclude the more remote. No compulsory Dispose by will the entire
Hence, children exclude grandchildren, except heirs hereditary estate
when the rule on representation is proper. With compulsory Dispose by will the free
heirs portion (net hereditary estate
(b) Legitimate parents and/or ascendants, parents minus legitimes)
of illegitimate children. (Balane, supra, p. 239)
NOTE: Legitimate parents or ascendants are Intestacy Follows If Entire Free Portion Not
excluded only by legitimate children. Parents of Disposed of by Will
illegitimate children are excluded by both If the testator has instituted one or several heirs, and
legitimate and illegitimate children (Art. 903). the institution of each is limited to an aliquot part of
The illegitimate ascending line does not go the inheritance, intestate succession takes place
beyond the parents. with respect to the remainder of the disposable
portion. (Art. 851)
(c) Surviving spouse
Rules on Institution of Aliquot Share Less Than
NOTE: The marriage between the decedent or In Excess of the Whole Estate
and the surviving spouse must either be valid or The rules will apply if the following concur:
voidable. If voidable, there should have been no 1. There is more than one instituted heir.
final decree of annulment at the time of the 2. The testator intended them to get the whole
decedent’s death. estate or the whole disposable portion.
3. The testator has designated a definite or aliquot
Separation de facto is not a ground for the portion for each heir. (Balane, supra, p. 251-
disqualification of the surviving spouse as heir. 252)
Effect of decree of legal separation: RULES ON INSTITUTION OF ALIQUOT
a. On the offending spouse – disqualified from SHARE LESS THAN OR IN EXCESS OF THE
inheriting WHOLE ESTATE
b. On the innocent spouse – no effect Art. 852 Art. 853
c. If after the final decree of separation there
Total of all the aliquot Total of all the aliquot
was a reconciliation between the spouses,
parts of the instituted parts of the instituted
the reciprocal right to succeed is restored.
heirs do not cover the heirs exceed the whole

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whole inheritance, or inheritance, or the A disposition in favor of a definite class or group of

the whole free portion whole free portion persons shall be valid. (Art. 845)
Remedy: Each part Remedy: Each part
shall be increased shall be reduced Presumptions in Institution of Heirs
proportionately proportionately In the absence of specific provisions in the will,
these presumptions will apply: (E-In-S)
NOTE: In Article 852, the difference between the (a) Equality – Heirs who are instituted without
total of all the portions and the whole of the designation of shares inherit in equal parts.
inheritance or free portion cannot pass by intestacy (Art. 846)
because the testator’s intention is to give the
instituted heirs the entire amount. (Balane, supra, p. Shares of Brothers and Sisters in
252) Testamentary Succession
If the testator should institute his brothers and
Requisites for a Valid Institution of Heir sisters, and he has some full blood and others
1. Designation in the will of person/s to succeed of half-blood, the inheritance shall be
(Art. 840) distributed equally unless a different intention
2. The will specifically assigns to such person an appears. (Art. 848)
inchoate share in the estate.
3. The person so named has capacity to succeed. NOTE: In intestacy, the proportion of 2:1
4. The will is formally valid between full and half-blood siblings and the
5. No vice of consent is present Iron Curtain Rule between legitimate and
6. No preterition results from the effect of such will illegitimate siblings shall be applied.
(Art. 854)
(b) Individuality – Heirs collectively instituted are
Designation in the Will of Person/s to Succeed deemed individually named unless a contrary
intent is prove. (Art. 847)
Directory – Designation of name and surname (c) Simultaneity – When several heirs are
(Balane, supra, p. 240) instituted, they are deemed instituted
simultaneously and not successively. (Art. 849)
Mandatory – Identity of the heir must be
established, otherwise void disposition, unless his Effect of False Cause for Institution of an Heir
identity becomes certain. General Rule: The falsity of the stated cause does
not affect the validity or efficacy of the institution.
NOTE: If there is ambiguity in the designation, the The false cause is merely considered as not written.
designation must be resolved by discerning the (Art. 850)
testator’s intent. If the ambiguity cannot be resolved,
intestacy to that portion results. (Art. 844, par. 2) Exceptions: It appears from the will that the testator
would not have made such designation if he had
Unknown person – A successor whose identity known the falsity of such cause. (Art. 850)
cannot be determined because the designation in
the will is unclear or ambiguous. (Balane, supra, p. Requisites for the Exception to Apply:
241) 1. The cause for the institution of heirs must be
stated in the will (Austria v. Reyes, G.R. No. L-
NOTE: Unknown persons do not refer to one with 23079);
whom the testator is not personally acquainted. The 2. The cause must be shown to be false (Austria
testator may institute somebody who is a perfect v. Reyes, G.R. No. L-23079);
stranger to him, provided the identity is clear. 3. It must appear from the face of the will that the
(Balane, supra, p. 241) testator would not have made such institution if
he had known the falsity of the cause. (Austria
Dispositions in Favor of an Unknown Person v. Reyes, G.R. No. L-23079)
(Art. 845)
General Rule: Every disposition in favor of an SUBSTITUTION OF HEIRS
unknown person shall be void.
Exception: By some event or circumstance his The appointment of another heir so that he may
identity becomes certain. enter into the inheritance in default of the heir
originally instituted. (Art. 857)
Dispositions in Favor of a Definite Class

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NOTE: Only one substitution is allowed. The person the same share in the substitution as in the
substituting cannot be substituted again. institution. (Art. 861)
Substitute Subject to Same Charges and NOTE: If one is substituted for two or more original
Conditions Imposed on Original Heir heirs, substitution will only take place if all the
General Rule: The substitute shall be subject to the
original heirs are disqualified. If not all of the original
same charges and conditions imposed upon the
instituted heir. (Art. 862) heirs are disqualified, the share left vacant will
Exception: The testator expressly provided the accrue to the surviving co-heir or co-heirs.
contrary, or the charges or conditions are personally
applicable only to the heir instituted. (Art. 862) (e) Fideicommissary Substitution - If the testator
institutes an heir with an obligation to deliver to
Classes of Substitution another the property so inherited. The heir
(a) Vulgar or Simple – The testator may designate instituted to such condition is called the first heir
one or more persons to substitute the heir or or fiduciary heir, the one to receive the property
heirs instituted in case such heir or heirs should: is the fideicommissary or second heir. (Art. 863)
i. Die before him (Predecease)
ii. Should not wish to be instituted, Requisites for a Fideicommissary Substitution
(Renounce) or (1st-2nd-1-PT-LEFree)
iii. Should be incapacitated to accept the 1. A fiduciary or a FIRST heir who takes the
inheritance (Incapacitated) (Art. 859) property upon the testator’s death. (Art, 863)
2. A fideicommissary or SECOND heir who takes
the property subsequently from the fiduciary.
Simple Substitution
(Art. 863)
Simple substitution may be done by the
3. The second heir must be ONE degree from the
testator:
first heir. Thus, the fideicommissary can only be
i. By specifying all the three causes, a parent or a child of the fiduciary. (Palacios v.
ii. By merely providing for simple Ramirez, G.R. No. 27952)
substitution. (Art. 859) 4. The dual obligation imposed upon the fiduciary
to Preserve the property and to Transmit it after
A simple substitution, without a statement of the lapse of the period to the fideicommissary
the cases to which it refers, shall comprise the heir. (Art. 865)
three causes mentioned, unless the testator 5. Both heirs must be Living and qualified to
has otherwise provided. (Art. 859) succeed at the time the testator’s death.
6. The fideicommissary substitution must be
Restricted Simple Substitution Expressly made. (Art. 865)
The testator may limit the operation of simple 7. The fideicommissary substitution is imposed on
substitution by specifying only one or two of the Free portion of the estate and never on the
the three causes. legitime. (Art. 864)
(b) Brief (Brevilocua)- Two or more persons may NOTE: Pending the transmission of the property,
be substituted for one person (Art. 860) the fiduciary is entitled to all the rights of a
usufructuary having the right to use and enjoy the
(c) Compendious (Compediosa) – one person property, but without the right to dispose the same.
may be substituted for two or more heirs (Art. Although the fideicommissary heir does not receive
860) the property upon the testator’s death, his right
thereto vests at the time and merely becomes
(d) Reciprocal (Reciproca) – If heirs instituted in subject to a period, and that right passes to his own
unequal shares should be reciprocally heirs should he die before the fiduciary’s right
substituted, the substitute shall acquire the expires. (Balane, supra)
share of the heir who dies, renounces, or is
incapacitated, unless it clearly appears that the Tenure of Fiduciary
intention of the testator was otherwise. If there Primary Rule: Period indicated by the testator
are more than one substitute, they shall have

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Secondary Rule: If the testator did not indicate a If the testator gives the usufruct to various persons,
period, then the fiduciary’s lifetime. (Balane, supra, not simultaneously, but successively, the requisites
citing Manresa) of a fideicommissary substitution must be present.
(Art. 869)
Two Ways of Making an Express Imposition of
Fideicommissary Substitution Period of Inalienability of the Estate
1) By the use of the term fideicommissary; or General Rule: The dispositions of the testator
2) By imposing upon the first heir the absolute declaring all or part of the estate inalienable for more
obligation to preserve and to transmit to the than 20 years are void. (Art. 870)
second heir. (Art. 865) Exception: In fideicommissary substitution, the
period is the lifetime of the first heir.
Transmission of Property from First Heir to
Second Heir XIII. LEGITIME
General Rule: The fiduciary should deliver the
property without deductions. The part of the testator’s property which he cannot
Exceptions: Deductions which arise from legitimate dispose of because the law has reserved it for his
expenses, credits and improvements. (Art. 865) compulsory heirs. (Art. 886)
Right to Succession of the Second Heir NOTE: When the disposition is for valuable
The second heir shall acquire the right to the consideration, there is no diminution of the estate by
succession from the time of the testator’s death, merely a substitution of value, that is the property
even though he should die before the fiduciary. The sold is replaced by the equivalent monetary
right of the second heir shall pass to his heirs. (Art. consideration. (Buenaventura v. Court of Appeals,
866) G.R. No. 126376; Manongsong v. Estimo, G.R. No.
136773)
The following shall not take effect: (Art. 867)
1) Fideicommissary substitutions which are not General Rules in Ascertaining Legitimes
made in an express manner, either by giving (a) Rule of proximity: The nearer exclude the more
them this name, or imposing upon the fiduciary remote, except when the rule on representation
the absolute obligation to deliver the property to is proper. (Art. 962)
a second heir; (b) Legitimate parents or ascendants are excluded
2) Provisions which contain a perpetual prohibition only by legitimate children. (Arts. 896, 899)
to alienate, and even a temporary one, beyond (c) Parents of illegitimate children are excluded by
the limit fixed in Article 863. both legitimate and illegitimate children. (Art.
3) Those which impose upon the heir the charge of 903)
paying to various persons successively, beyond (d) The illegitimate ascending line does not go
the limit prescribed in Article 863, a certain beyond the parents. (Art. 903; Balane, supra,
income or pension; p.345)
4) Those which leave to a person the whole or part (e) In the direct ascending line, there is the rule of
of the hereditary property in order that he may division by line. The legitime is divided equally
apply or invest the same according to secret between the paternal and maternal side. After
instructions communicated to him by the the portions corresponding to the line has been
testator. assigned, there will be equal apportionment
between or among the recipients within the line,
Nullity of Fideicommissary Substitution should there be more than one. (Art. 890)
The nullity of the fideicommissary substitution does (f) There is no right of representation in the direct
not prejudice the validity of the institution of heirs ascending line. (Art. 972)
first designated; the fideicommissary clause shall (g) For a surviving spouse to inherit from the
simply be considered as not written (Art. 868) such deceased, the marriage between the decedent
that the institution of the first heir simply becomes and the widow/widower must be either valid or
pure and unqualified. (Balane, supra) voidable. (Balane, supra, p.342)
Ownership and Usufructuary Provisions Rules of Surviving Spouse as Sole Compulsory

A provision whereby the testator leaves to a person Heir (Art. 900)
the whole or part of the inheritance, and to another
the usufruct, shall be valid. (Art. 869) General Rule: The surviving spouse gets 1/2 of the
estate
Successive Usufructuaries

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Exception: 1/3 of the estate, if the following 1) Property left by will (Art. 1063)
circumstances are present: 2) Property which may have been donated by an
1. The marriage was in articulo mortis; ascendant of the compulsory heir (Art. 1065)
2. The testator died within 3 months from the time 3) Property donated to the spouse of the
of the marriage; compulsory heir (Art. 1066)
3. The parties did not cohabit for more than 5 4) Expenses for support, education, medical
years; and attendance even in extraordinary illness,
The spouse who died was the party in articulo mortis apprenticeship, ordinary equipment or
at the time of the marriage. customary gifts (Art. 1067)
5) Expenses incurred by parents in giving their
COLLATION IN CONNECTION WITH THE children a professional, vocational, or other
COMPUTATION OF LEGITIME career (Art. 1068)
6) Wedding gifts consisting of jewelry, clothing and
COLLATION outfit, given by parents or ascendants, so long
The act by virtue of which, the persons who concur as they do not exceed 1/10 of the disposable
in the inheritance bring back to the common portion (Art. 1070)
hereditary mass the property, which they have
received from him, so that a division may be effected Kinds of Collation (Balane, supra)
according to law and the will of the testator. (Mison, 1) Collation of Values – values only, no physical
Wills and Succession Better Explained, 2011) return
2) Collation in kind – actual return of property
To collate is to bring back or to return to the received: only required when inofficious, i.e.,
hereditary mass, in fact or by fiction, property which legitime is impaired
came from the estate of the decedent, during his
lifetime, but which the law considers as an advance COLLATION OF VALUES
from the inheritance. (Mison, supra)
Purposes
Concept of Collation 1. For computation – Arts. 908, 909 as basis for
The act of bringing back to the estate properties determining the legitime
acquired inter vivos and gratuitously from decedent • Determination: value at the time of donation
(if acquired by will, e.g. legacies and devisees, they + fruits & legal interest from date
are not collatable, but may be reduced for being succession opens (if required to return in
inofficious) kind)
• Compulsory heirs and strangers must
Obligation of Every Compulsory Heir collate for computation. For strangers,
Every compulsory heir, who succeeds with other there is no effect unless found to be
compulsory heirs, must bring into the mass of the inofficious. If donation to strangers is not
estate any property or right which he may have included, compulsory heirs will be
received from the decedent, during the lifetime of prejudiced because basis for the legitime
the latter, by way of donation, or any other gratuitous will be smaller. (Balane, supra)
title, in order that it may be computed in the
determination of the legitime of each heir, and in the 2. For equalization on account of partition
account of the partition. (Art. 1061) • Only required for compulsory heirs; 2nd
collation; when actually charged either to
However, donations inter vivos to compulsory heirs legitime or free portion.
shall not be imputed to the legitime: • Reason: donation to compulsory heirs are
1) If the donor expressly provided; (Art. 1062) considered advance of legitime, otherwise,
2) The donee repudiated the inheritance; (Id.) it will prejudice other compulsory heirs. For
3) The value of donation exceeds the donee’s strangers, no equalization is required, are
legitime always charged to free portion. (Paras,
supra)
NOTE: The donation will be imputed to the
legitime to the extent of the legitime’s value, and Not subject to collation (i.e., charged to free
the excess to the free portion. (Balane, supra at portion) if:
p. 577) 1. Testator provides otherwise (but still collated for
computation) (Art. 1062)
Properties or Rights Received by Compulsory
Heir not Subject to Collation

ATENEO CENTRAL
2. If compulsory heir repudiates, in which case he representation. GS must collate donation to

is considered a stranger – for computation only, son even if he does not actually receive it.
charged to free portion (Art. 1062)
If there is no identity: no collation for equalization is
COLLATION FOR EQUALIZATION required. E.g. Father donates to spouse of son: Son
has no obligation to collate, but spouse must collate
Requisites (Art. 1069) for computation as a stranger. If he donates to both
1. Two or more compulsory heirs. If only one, spouses: ½ each, son collates for computation and
no equalization is needed. equalization, spouse collates only for computation.
(Paras, supra)
2. Liberality – must be acquired gratuitously from
the decedent (inter vivos). In donation, If collation required for equalization, may be
gratuitous act may be direct or indirect, as when quantitative: same amount, or qualitative: same
parent pays for debt of child or pays for kind. If immovable -equivalent, if not available, sell
purchase price of the car placed in name of the other properties to generate cash, and if movable,
child – not a demandable debt as when there is equivalent properties (Paras, supra)
no intention to be reimbursed, otherwise placed
on asset side as receivables from the heir (not COLLATION IN KIND
collation).
• If there is no liberality, such as arising from Actual return - Only if inofficious, i.e. legitime
obligation to support (e.g. education) – impaired. Operates as resolutory condition:
other compulsory heirs cannot ask for donation terminated and must return only to the
collation. extent inofficious: not necessarily a case of total
• Exception: When liberality is present, but return. A donee who is required to collate in kind is
no collation is required: Wedding gift of a possessor in good faith, and not required to
parent/ascendants consisting of jewelry, account for fruits and interests except from the date
clothing, outfit (Art. 1070) not more than succession opens. (Art. 1075)
1/10 of the sum disposable by will –
considered customary gift, not collatable, Operations Related to Collation (Paras, supra)
while excess required to be collated. 1. Collation – adding to the mass of the hereditary
estate the value of the donation or gratuitous
3. Identity of heir and donee which may be: disposition
a. Actual: e.g. F donates to son; Son collates 2. Imputing or Charging – crediting the donation
for computation and equalization; If he as an advance on the legitime (if the donee is a
donates to grandson, son is not required to compulsory heir) or on the free portion (if the
collate, but grandson collates for donee is a stranger)
computation as a stranger. If son 3. Reduction – determining to what extent the
predeceases, grandson collates for donation will remain and to what extent it is
computation and equalization (now a excessive or inofficious
compulsory heir) 4. Restitution – return or payment of the excess
b. Constructive: F donates to son, son to the mass of hereditary estate.
predeceases and GS succeeds by

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TABLE OF LEGITIME (Art. 888-903)
HEIR LEGITIME FREE

PORTION
Legitimate Children & Descendants 1/2 1/2
Legitimate Children (LC) & Surviving Legitimate Children – 1/2 Whatever

Spouse Spouse – Equal to share of 1 LC remains
One Legitimate Child/Descendant & Child/Descendant – 1/2

1/4
Surviving Spouse Spouse – 1/4
Legitimate Children -1/2

Whatever
Legitimate Children (LC) & Illegitimate
Illegitimate Children – 1/2 of share of 1 LC as remains
Children (ILC)
may be accommodated, otherwise reduce
proportionately
LC –1/2
Legitimate Children/Descendants, Spouse – equal to 1 share of 1 LC
Surviving Spouse & Illegitimate Whatever
Children ILC – 1/2 of share of 1 LC as may be remains
accommodated, otherwise reduce
proportionately
LC – 1/2
ILC – 1/2 of share of 1 LC as may be
One Legitimate Child, Illegitimate Whatever
accommodated, otherwise reduce
Children & Surviving Spouse remains
proportionately
Spouse –1/4 of estate
Parents & Ascendants of Legitimate

1/2 1/2
Children
Parents/Ascendants of Legitimate Legitimate Parents/Ascendants – 1/2

Children & Illegitimate Children Illegitimate Children – 1/4 1/4
Legitimate Parents/Ascendant – 1/2

Parents/Ascendants of Legitimate
Children & Surviving Spouse 1/4
Spouse – 1/4
Parents/Ascendants of Legitimate Parents/Ascendants –1/2

Children, Illegitimate Children & ILC –1/4
1/8
Surviving Spouse Spouse – 1/8
General Rule or If in articulo mortis, but
1/2
cohabited for more than 5 years – 1/2
Surviving Spouse Only
1/3 if in articulo mortis 2/3
ILC – 1/3
Surviving Spouse & Illegitimate
1/3
Children
Spouse – 1/3

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Surviving Spouse & Parents Of Spouse – 1/4

1/2
Illegitimate Children Parents – 1/4
Illegitimate Children Only 1/2 1/2
Parents Of Illegitimate Children 1/2 1/2

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IMPAIRMENT OF LEGITIME Exceptions:

1. If the predecessor gave the compulsory heir a
Principle of Non-Impairment of Legitimes donation inter vivos and provided that it was
General Rule: The testator cannot deprive his not to be charged against the legitime. (Art.
compulsory heirs of their legitime. (Art. 904) 1062)
Exception: Valid disinheritance 2. Testamentary dispositions made by the
predecessor to the compulsory heir, unless
General Rule: The testator cannot impose upon the testator provides that it should be
the same any burden, encumbrance, condition, or considered part of the legitime. (Art. 1063)
substitution of any kind whatsoever. (Art. 904)
The impaired legitime of a compulsory heir shall
Exceptions: be filled up in the following manner:
1. Parent in the interest of his family to keep any (a) It must first be taken from the part of the
manufacturing, agricultural or industrial estate not disposed of by will.
enterprise intact may order the legitime of the (b) If it is not sufficient, it must then be taken from
other children be paid in cash. (Art. 1080) the shares of the testamentary heirs,
2. Express prohibition of the partition of the legatees, and devisees, proportionally. (Art.
estate for a period not exceeding 20 years. 855)
(Art. 1083)
3. The family home shall continue despite the Testamentary dispositions that impair or diminish
death of one or both spouses or of the the legitime of compulsory heirs shall be reduced
unmarried head of the family for a period of on petition of the same insofar as they may be
ten years or for as long as there is a minor inofficious or excessive. (Art. 907)
beneficiary, and the heirs cannot partition the
same, unless the court finds compelling Article 907 of the Civil Codes states
reasons therefor. (Family Code, Art. 159) that "[t]estamentary dispositions that impair or
4. Reserva Troncal (Art. 891) diminish the legitime of the compulsory heirs shall
be reduced on petition of the same, insofar as they
Renunciation or Compromise of Future may be inofficious or excessive." Evidently, if the
Legitime (Art. 905) testator disposed of his estate in a manner that
Every renunciation or compromise as regards impaired or diminished the legitime of compulsory
future legitime between the person owing it and his heirs, the latter may petition to demand that those
compulsory heir is void, and the latter may claim dispositions be reduced or abated to the extent
the same upon the death of the former; but they that they may be inofficious or excessive. (Estella
must bring to collation whatever they may have v. Estella, G.R. No. 245469, 09 December 2020)
received by virtue of the renunciation or
compromise. INCOMPLETE PRETERITION
LEGITIME
NOTE: The rights of the heirs are merely inchoate Heir not entirely Total omission of the
because it is only perfected upon the testator’s forgotten heir
death. Hence, there is still nothing to renounce. Less than the portion Total deprivation of
of the legitime legitime
No contract may be entered into with respect to Remedy is to demand Effect is the total
future inheritance except in cases expressly for completion of annulment of the
authorized by law. (Art. 1347, par. 2) legitime institution of heirs
Completion of Legitime (actio ad supplendam Steps in Determining the Legitime of

legitimam) Compulsory Heirs
Any compulsory heir to whom the testator has left 1. Determination of the gross value of the estate
by any title less than the legitime belonging to him at the time of the death of the testator;
may demand that the same be fully satisfied. (Art. 2. Determination of all debts and charges which
906) are chargeable against the estate;
3. Determination of the net value of the estate by
General Rule: Anything a compulsory heir deducting all the debts and charged from the
receives by gratuitous title from the predecessor is gross value of the estate;
considered an advance on the legitime and is 4. Collation or addition of the value of all
deducted from it. (Art. 909 & Art. 910) donations inter vivos to the net value of the
estate;

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5. Determination of the amount of the legitime When Devise Subject to Reduction Consists of
from the total thus found; Indivisible Real Property
6. Imputation of all the value of all donations inter
vivos made to compulsory heirs against their IF THE EXTENT OF IF THE EXTENT OF
legitimes and of the value of all donations inter REDUCTION IS REDUCTION IS ½
vivos made to strangers against the LESS THAN ½ OF OR MORE OF THE
disposable free portion and restoration to the THE VALUE OF THE THING
hereditary estate if the donation is inofficious. THING
If legitime is impaired, the following reductions It shall be given to the It shall be given to the
shall be made: devisee. compulsory heirs.
a. First, reduce pro-rata non-preferred
legacies and devises, and the In either case, there should be pecuniary
testamentary dispositions. reimbursement to the party who did not get his
b. Second, reduce pro rata the preferred physical portion of the thing devised. (Art. 912)
legacies and devises.
c. Third, reduce the donations inter vivos The devisee who is entitled to a legitime may
according to the inverse order of their retain the entire property, provided its value does
dates. (Art. 911) not exceed that of the disposable portion and of
d. Fourth, reduce the legitimes of the the share pertaining to him as legitime. (Art. 912)
illegitimate children. If the heirs or devisees do not choose to avail
7. Distribution of the residue of the estate in themselves of the right granted in Art. 912, the
accordance with the will of the testator. thing devised should be disposed of by:
1. Any other heir or devisee, who elects to do so,
Donations inter vivos to Compulsory Heirs may acquire the thing and pay the parties their
General Rule: Donations inter vivos to a respective shares in money;
compulsory heir shall be charged to their legitime 2. If no heir or devisee elects to acquire it, it shall
(Art. 909) be sold at public auction and the net proceeds
Exception: If the predecessor gave the accordingly divided between the parties
compulsory heir a donation inter vivos and concerned. (Art. 913)
provided that it was not to be charged against the
legitime. (Art. 1062) PRESUMPTIVE LEGITIME
In said partition, the value of the presumptive
Donations inter vivos to Strangers legitimes of all common children, computed as of
Donations made to strangers shall be charged to the date of the final judgment of the trial court, shall
the part of the estate which the testator could have be delivered in cash, property or sound securities,
disposed of by will. (Art. 909) unless the parties, by mutual agreement judicially
approved, had already provided for such matters.
Stranger – Anyone who does not succeed as a The children or their guardian or the trustee of their
compulsory heir. (Balane, supra) property may ask for the enforcement of the
judgment.
Principles on Devises or Legacies of Usufruct
or Life Annuities or Pensions The delivery of the presumptive legitimes herein
1. If, upon being capitalized according to prescribed shall in no way prejudice the ultimate
actuarial standards, the value of the grant successional rights of the children accruing upon
exceeds the free portion, it has to be reduced, the death of either of both of the parents; but the
because the legitime cannot be impaired. (Art. value of the properties already received under the
911) decree of annulment or absolute nullity shall be
2. The testator can impose no usufruct or any considered as advances on their legitime. (Article
other encumbrance on the part that passes as 51, Family Code)
legitime. (Art. 911)
3. Subject to the two rules stated above, the Presumptive Legitime is Required to be
compulsory heirs may elect between ceding to Delivered to the Common Children When:
the devisee/legatee the free portion, or the 1) The marriage is annulled;
proportional part thereof corresponding to the 2) The marriage is declared void ab initio;
said legacy/devise, and complying with the 3) The conjugal partnership or absolute
terms of the usufruct or life annuity or pension. community is dissolved as in the case of legal
(Art. 911; Balane, p. 435) separation

ATENEO CENTRAL
Effect of Failure Deliver the Presumptive NOTE: The provisions of Art. 891 only apply to
Legitime legitimate relatives. (Nieva v. Alcala, G.R. No. L-
Failure of the parents to deliver the presumptive 13386)
legitime will make their subsequent marriage null
and void. (Art. 53, Family Code) Three Transmissions Involved in Reserva
Troncal:
RESERVA TRONCAL 1) A first transmission by lucrative title
This is the reservation by virtue of which an (inheritance or donation) from an ascendant
ascendant who inherits from his descendant any or brother or sister to the deceased
property which the latter may have acquired by descendant; (Mendoza v. Delos Santos, G.R.
gratuitous title from another ascendant or a No. 176422)
brother or sister, is obliged to reserve the property
for the benefit of relative within the third degree 2) A posterior transmission, by operation of law
and who belong from the same line from which the (intestate succession or legitime) from the
property came from. (Art. 891) deceased descendant (prepositus) in favor of
another ascendant, the reservista, which two
NOTE: It constitutes as an exception to both the transmissions precede the reservation;
system of legitimes and the order of intestate (Mendoza v. Delos Santos, G.R. No. 176422)
succession.
It is this second transfer that creates the
Purpose of Reserva Troncal: reserva. (Solivio v. Court of Appeals, G.R. No.
1) To reserve certain properties in favor of 83484)
certain persons
2) To prevent persons outside a family from 3) A third transmission of the same property (in
acquiring, by some chance or accident, consequence of the reservation) from the
property which otherwise would have reservistas to the reservatarios or the relatives
remained with the said family within the third degree from the deceased
descendant belonging to the line of the first
Requisites of Reserva Troncal (GWOT) ascendant, brother or sister of the deceased
1) The property was acquired by a person descendant. (Gonzalez v. CFI, G.R. No.
(Prepositus) from an ascendant or from a 34395)
brother or sister (Origin) by Gratuitous title;
Parties Involved
Acquisition by Gratuitous Title (First 4. Origin or Mediate Source – The ascendant,
Transfer) brother, or sister from whom the prepositus
a. By donation, or had acquired the property by gratuitous title;
b. By any kind of succession (Balane, supra)
2) The said descendant died Without legitimate 5. Prepositus – The descendant/brother/ sister
issue; who died and from whose death the
reservistas in turn had acquired the property
NOTE: Only legitimate descendants will by operation of law. The so-called “arbiter of
prevent the property from being inherited by the the fate of the reserva troncal.” (Balane, supra)
legitimate ascending line by operation of law.
While the property is owned by the prepositus,
3) The property is inherited by another he has all the rights of ownership over it and
descendant (Reservista) by Operation of law; may exercise such rights in order to prevent a
reserva from arising. He can terminate the
Transmission by Operation of Law (Second reserva by
Transfer) (a) Substituting or alienating or disposing the
a. Compulsory succession, or property during his lifetime;
b. Intestate succession (b) Bequeathing or devising it either to the
potential reservista or to other third person
4) There are relatives within the Third degree (subject to rights of compulsory heirs to
(Reservatarios) belonging to the line from the legitime); or
which the said property came. (Chua v. Court (c) Partitioning in such a way as to assign the
of First Instance, G.R. No. L-29901) property to parties other than the potential

ATENEO CENTRAL
reservista (subject to the constraints of the claim representation of their predecessors since
legitime). the right granted in Art. 891 is a personal right. The
only recognized exemption is the case of nephews
6. Reservista – The ascendant of the prepositus and nieces of the prepositus, who have the right to
of whatever degree, obliged to reserve the represent their fathers or mothers who are
property; (Balane, supra) brothers and sisters of the prepositus. (Mendoza
v. De los Santos, G.R. No. 176422)
7. Reservatarios – The relatives of the
prepositus within the third degree and who There will only be one instance of representation
belong to the line from which the property among reservatarios, i.e., a case of the prepositus
came and for whose benefit the reservation is being survived by brothers/sisters and children of
constituted. (Balane, supra) a predeceased or incapacitated brother/sister.
NOTE: The reference point from which the (Balane, supra)
third degree requirement should be reckoned
is the prepositus – the one at the end of the Juridical Nature of Reserva Troncal
line from which the property came and upon Nature of Reservista’s Right
whom the property last resolved by descent. 1) The reservista’s right over the reserved
(Mendoza v. Delos Santos, G.R. No. 176422, property is one of ownership;
2013) 2) The ownership is subject to a resolutory
condition. (The existence of reservatarios at
NOTE: As long as the reservatario is alive at the time of the reservista’s death)
the time of the reservista’s death, he qualifies 3) The right of ownership is alienable, but subject
as such, even if he was conceived and born to the same resolutory condition.
after the prepositus’ death. (Balane, supra) 4) The reservista’s right of ownership is
registrable. (Edroso v. Sablan, G.R. No. 6878)
Two Events to be Considered to Determine the
Right of the Reservatarios over the Reservable The reservista has no power to appoint, by will,
Property which reservatarios are to get the reserved
1. Death of Prepositus – All qualified property. (Gonzales v. CFI, G.R. No. L-34395)
reservatarios merely have an inchoate right.
The reservistas own the property subject to Nature of Reservatarios’ Right
the resolutory condition 1) The reservatarios have a right of expectancy
2. Death of Reservista – surviving reservatarios over the property;
acquire a perfect right. (Balane, supra) 2) The right is subject to a suspensive condition.
(The expectancy ripens into ownership if the
Preference Among Reservatarios reservatarios survive the reservista).
Upon the death of the ascendant reservista, the 3) The right is alienable, but subject to the same
reservable property should pass, not to all the suspensive condition.
reservatarios as a class, but only to those nearest 4) The right is registrable. (Sienes v. Esparcia,
in degree to the descendant (prepositus), G.R. No. L-12957)
excluding those reservatarios of more remote
degree. The reserva troncal merely determines Property Reserved
the group of relatives to whom the property should Any kind of property may be reserved. The very
be returned; but within that group the individual same property must go through the process of the
right to the property should be decided by the three transmissions, in order for the reserva to
applicable rules of ordinary intestate succession, arise. (Balane, supra)
since Art. 891 does not specify. (Padura v.
Baldovino, G.R. No. 11960) Reserva Maxima/Minima Theories: Applies only
if two circumstances concur:
Representation Among the Reservatarios 1. Prepositus makes a will instituting the
There is a right of representation on the part of ascendant-reservista to the whole or a part of
reservatarios who are relatives of the prepositus the free portion; (Balane, supra)
within the third degree. These reservatarios have 2. There is left in the prepositus’ estate, upon his
the right to represent their ascendants. (Florentino death, property reservable. (Balane, supra)
v. Florentino, G.R. No. 14856)
Relatives within the 4th and succeeding degrees

cannot be considered reservatarios. They cannot

ATENEO CENTRAL
If the omitted compulsory heirs should die before

RESERVA MAXIMA RESERVA MINIMA the testator, the institution shall be effectual,
The whole property is Every single property without prejudice to the right of representation.
reservable for as long in the Prepositus’ (Art. 854)
as it can be estate must be
accommodated in the deemed to pass, Definition of Preterition
legitime or intestate partly by will and partly Preterition is the total omission of a compulsory
share of the by operation of law, so heir from the inheritance. It consists in the silence
reservatarios that in general, only of the testator with regard to a compulsory heir,
50% of the property is omitting him in his will, either by not mentioning
reservable. him at all, or by not giving him anything in the
Maximizes the scope Minima finds wider hereditary property but without expressly
of reserve acceptance in the disinheriting him, even if he is mentioned in the will
Philippines in the latter case. (Heirs of Ureta v. Ureta, G.R. No.
165748)
Rights of the Reservatarios and the
Corresponding Obligations of the Reservista NOTE: Preterition is a concept of testamentary
(Balane, supra) (SIAA) succession and requires a will. (Heirs of Ureta v.
1. To Inventory reserved properties; Ureta, G.R. No. 165748)
2. To Annotate the reservable character (if
registered immovables) in the Registry of REQUISITES (OCLiT)
Property within 90 days from acceptance by 1. There must be a total Omission of one, some
the reservista; or all of the heir/s in the will, without the heir
3. To Appraise the movables; being expressly disinherited.
4. To Secure by means of mortgage: 2. The omission must be that of a Compulsory
a. The indemnity for any deterioration of or heir in the direct line.
damage to the property occasioned by 3. The omitted compulsory heir must be Living
the reservista’s fault or negligence, and or at least conceived at the time of testator’s
b. The payment of the value of such death. (Art. 854)
reserved movables as may have been 4. The omission must be complete and Total in
alienated by the reservista onerously and character. The heir in question must have
gratuitously. (Dizon v. Galang, G.R. No. received nothing from the testator by way of:
23144) a. Testamentary succession;
b. Legacy or devise;
Reserva Troncal is Extinguished By c. Donation inter vivos;
1. The death of the reservista; d. Intestacy (Balane, supra, p. 266)
2. The death of all the reservatarios;
3. Renunciation by all the reservatarios, NOTE: What constitutes preterition is not omission
provided that no other reservatario is born in the will but being completely left out of the
subsequently; inheritance. (Seangio v. Reyes, G.R. No. 140371-
4. Total fortuitous loss of the reserved property; 72)
5. Confusion or merger of rights, as when the
reservatarios acquire the reservista’s right by Determination of Preterited Heirs
contract inter vivos; The determination of whether or not there are
Prescription or adverse possession. (Balane, preterited heirs can be made only upon the
supra) testator’s death. (JLT Agro v. Balansag, G.R. No.
141882)
XIV. PRETERITION
Compulsory Heir in the Direct Line
PRETERITION This covers children or descendants, or in default
The preterition or omission of one, some, or all of of children or descendants, parents or
the compulsory heirs in the direct line, whether ascendants. Illegitimate descendants and
living at the time of the execution of the will or born ascendants are also protected, since the law does
after the death of the testator, shall annul the not distinguish. (Balane, supra)
institution of heir; but the devises and legacies
shall be valid insofar as they are not inofficious. Adopted children are considered compulsory heirs
(Art. 854) in the direct line, and may be preterited. This is
because adoption gives to the adopted child the

ATENEO CENTRAL
same rights and duties as if he were a legitimate v. Nuguid , G.R. No.

child of the adopter. (Acain v. Intermediate L-23445)
Appellate Court, G.R. No. 72706)
Successional Rights are Intransmissible
Effects of Preterition An heir, whether compulsory, voluntary, or legal,
1. The institution of heir is annulled. transmits nothing to his heirs, in case of
The annulment is in toto, unless in the will predecease, incapacity, renunciation, or
there are, in addition, testamentary disinheritance. However, in case of predecease or
dispositions in the form of devises or legacies. incapacity of compulsory or legal heirs, as well as
(Nuguid v. Nuguid, G.R. No. L-23445) disinheritance of compulsory heirs, the rules on
Preterition annuls the institution of an heir and representation shall apply. (Balane, supra)
annulment throws open to intestate
succession the entire inheritance. (Morales v. There is Right of Representation for
Olandriz, G.R. No. 198994, Acain v. Compulsory Heirs under the ff:
Intermediate Appellate Court, G.R. No. 1) Predecease;
72706) 2) Incapacity
3) Disinheritance (Art. 859)
2. Devises and legacies shall remain valid as
long as they are not inofficious. No Right of Representation for Testamentary /
The only provisions which do not result in Voluntary Heirs
intestacy are the legacies and devises made
in the will for they should stand valid and There is Right of Representation for Legal /
respected, except insofar as the legitimes are Intestate Heirs under the ff:
concerned. (Acain v. Intermediate Appellate 1) Predecease;
Court, G.R. No. 72706) If the devises and 2) Incapacity
legacies impair the legitimes, they are merely
reduced. (Balane, supra) XV. CONDITIONAL DISPOSITIONS
AND DISPOSITIONS
3. If the omitted compulsory heir should die
before the testator, the institution shall be The institution of an heir may be made
effectual, without prejudice to the right of conditionally, or for a certain purpose or cause.
representation. (Art. 871)
PRETERITION DISINHERITANCE Three Kinds of Testamentary Dispositions

Deprivation of a Deprivation of the (a) Conditional dispositions
compulsory heir of his compulsory heir of his (b) Dispositions with a term
legitime is tacit legitime is express (c) Dispositions with a mode
Law presumes that Done with a legal
there has been cause Definitions
merely an oversight (a) Condition – Future or uncertain event, or a
or mistake on the part past event unknown to the parties, upon which
of the testator the performance of an obligation depends
It results in the The nullity is limited to (Art. 1179)
complete nullity of the the portion of the (b) Term – The day or time when an obligation
institution of heir, estate of which the either becomes demandable or terminates
except the devises disinherited heir has (Art. 1193)
and legatees, as long been legally deprived. (c) Mode – The statement of the object of the
as they are not institution or the application of the property left
inofficious. by the testator or the charge imposed on the
Omitted heir gets not If disinheritance is heir. (Art. 882) It is an obligation imposed
only his legitime but unlawful or upon the heir, without suspending the
also his share in the ineffective, for effectivity of the institution or the rights to the
free portion not absence of one or succession. (Rabadilla v. Court of Appeals,
disposed of by way of other of the G.R. No. 113725)
legacies or devises requisites, the (d) Disposicion Captatoria / Scriptura
compulsory heir is Captatoria – A condition that the heir shall
merely restored to his make some provision in his will of the testator
rightful share. (Nuguid or of any other person. This is prohibited

ATENEO CENTRAL
because it will make the making of the will a The right of usufruct, or an allowance or some
contractual act. (Art. 875) personal prestation may be devised or
• It is not merely the condition that is bequeathed to any person for the time during
declared void but the testamentary which he or she should remain unmarried or in
disposition itself which contains the widowhood. (Art. 874)
condition. (Balane, supra)
RULES ON POTESTATIVE, CASUAL AND
(e) Casual Condition – A condition is casual if it MIXED CONDITIONS
depends upon chance and/or upon the will of Positive Potestative Condition (Art. 876)
a third person General Rule: It must be fulfilled as soon as the
(f) Mixed Condition - A condition is mixed if it heir learns of the testator’s death.
depends both partly upon the will of the heir Exception: The condition, already complied with,
himself and upon chance and/or the will of a is of such nature that it cannot be fulfilled again.
third person
(g) Potestative Condition – One the fulfillment Negative Potestative Condition (Art. 879)
of which depends purely on the heir. If the potestative condition imposed upon the heir
(h) Suspensive Term – One that merely is negative, or consists in not doing or not giving
suspends the demandability of a right; something, the heir shall comply by giving a
happening is certain. security (caucion muciana) that he will not do or
(i) Caucion Muciana – Bond or security that give that which has been prohibited by the testator,
should be given in favor of those who would and that in case of contravention he will return
get the property if the condition not be whatever he may have received, together with its
complied with. (Art. 879) fruits and interests.
Interpretation Casual or Mixed (Art. 877)
• When in doubt whether there is a condition or It is sufficient if it happens or be fulfilled at any
merely a mode, consider the same as mode. other time before or after the testator’s death,
• When in doubt as to whether there is a mode unless testator provides otherwise.
or merely a suggestion, consider same only
as a suggestion. If already fulfilled at the time of execution of the
• A condition suspends but does not obligate, will
while a mode obligates but does not suspend a. If testator is unaware of fact of fulfillment-
(for he who inherits with a mode is already an Deemed fulfilled.
heir; one who inherits conditionally is not yet b. If testator is aware of the fact of fulfillment
an heir.) i. If it can no longer be fulfilled again –It is
deemed fulfilled
Condition on the Legitimes is Prohibited ii. If it can be fulfilled again – It must be
The testator cannot impose any charge, condition fulfilled again. (Art. 877)
or substitution whatsoever upon the legitimes.
Should he do so, the same shall be considered as Constructive Compliance (Art. 883, par. 2)
not imposed. (Art. 872) If the person interested in the condition should
prevent its fulfillment, without the fault of the heir,
Conditions which are Impossible, Contrary to the condition shall be deemed to have been
Law or Good Customs complied with.
These conditions are considered as not imposed,
and shall not prejudice the heir, even if the testator RULES ON APPLICABILITY OF
provide otherwise. (Art. 873) The testamentary CONSTRUCTIVE COMPLIANCE
disposition is not annulled; it simply becomes pure. CASUAL
(Balane, supra) MIXED CONDITION
CONDITION
Conditions Prohibiting Marriage Not Dependent Dependent on
General Rule: An absolute condition not to Applicable Partly on Will of Third Party
contract a first or subsequent marriage shall be Chance
considered as not written. (Art. 874)
Not Applicable only if
Exception: The condition has been imposed on
Applicable third party is
the widow or widower by the deceased spouse, or
interested in the
by the latter’s ascendant’s or descendants. (Art.
condition (Art.
874)
883)

ATENEO CENTRAL
The estate shall be placed under administration The testator states the following:
until: 1. The object of the institution;
(a) Condition is fulfilled, or 2. The purpose or application of the property left
(b) Until it becomes certain that condition will by the testator;
never be fulfilled, or 3. The charge imposed by the testator upon the
(c) Until arrival of the term heir. (Rabadilla v. Court of Appeals, G.R. No.
113725)
The same shall be done if the heir does not give
the security required as in negative potestative NOTE: An obligation imposed upon the heir
conditions. (Art. 880) should not be considered a condition unless it
clearly appears from the will itself that such was
IF THE IF IT BECOMES CERTAIN the intention of the testator. In case of doubt, the
CONDITION THAT CONDITION WILL institution should be considered as modal and not
HAPPENS NOT HAPPEN condition. (Rabadilla v. Court of Appeals, G.R. No.
The property will The property will be turned 113725, 2000)
be turned over to over to a secondary heir, if
the instituted there is one, or to the Analogous Performance
heir. intestate heirs, as the case When without fault of the heir, a modal institution
may be. cannot take effect in the exact manner stated by
the testator, it shall be complied with in a manner
Dispositions with a Term most analogous to and in conformity with his
Suspensive Term (Art. 878) wishes. (Art. 883, par. 1)
A disposition with a suspensive term does not
prevent the instituted heir from acquiring his rights XVI. VOID TESTAMENTARY
and transmitting them to his heirs even before the DISPOSITIONS
arrival of the term.
Prohibited or Void Conditions
NOTE: The heir’s right vests upon the testator’s The prohibited or void conditions are: (LIM-Will)
death. Should the heir die before the arrival of the 1. Charges, conditions, substitutions, upon the
suspensive term, he merely transmits his right to Legitimes. (Art. 872)
his own heirs who can demand the property when 2. Impossible conditions and those contrary to
the term arrives. (Balane, supra) law or good customs. (Art. 873)
3. An absolute condition not to contract a first or
Resolutory Term (Art. 885) subsequent Marriage. (Art. 874)
The designation of the day or time when the However, if the condition not to contract a first
effects of the institution of an heir shall commence or subsequent marriage has been imposed
or cease shall be valid. (Art. 885) on the widow or widower by the deceased
spouse, or by the latter’s ascendants or
TERM descendants, such condition is valid. (Art.
SUSPENSIVE RESOLUTORY 874)
Before the arrival of Before the arrival of 4. Disposition Captatoria – Any disposition
the term, the property the term, the property made upon the condition that the heir shall
should be delivered should be delivered to make some provision in his WILL in favor of
to the intestate heirs. the instituted heir. No the testator or of any other person. (Art. 875)
However, a sufficient security is required of
security has to be them. (Art. 885) XVII. DISINHERITANCE
posted by the
intestate heirs. Causes of Vacancy in Succession
(a) Disinheritance - The testator creates it
Dispositions with Modes himself (Art. 916)
Dispositions with modes may be claimed at once, (b) Repudiation - The heir rejects the inheritance
provided that the instituted heirs give security for (Art. 1041)
compliance with the wishes of the testator and for (c) Incapacity/Predecease - Something
the return of anything he or they may receive, happens to the heir
together with its fruits and interests, if he or they
should disregard this obligation. (Art. 882, par. 2) Disinheritance
Indicators of a Modal Institution

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A compulsory heir may, in consequence of e) This ground also applies to disinheritance

disinheritance, be deprived of his legitime, for of parents, ascendants, and spouse.
causes expressly stated by law. (Art. 915) 3) When a child or descendant has been
convicted of adultery or concubinage with the
Requisites for the Various Grounds of spouse of the testator;
Disinheritance (WET2-LUP) a) Final conviction is required.
1) Effected only through a valid Will (Art. 916) b) There must be a valid marriage between
Note: Will containing disinheritance must be the spouse and the testator.
probated. c) This ground also applies to disinheritance
Disinheritance only occurs in testamentary of parents and ascendants. (Balane,
succession. Its counterpart in intestate supra)
succession is unworthiness. 4) When the child or descendant, by fraud,
2) For a cause Expressly stated in the will (Art. violence, intimidation, or undue influence,
916, 918) causes the testator to make a will or to change
3) Cause must be certain and True (Art. 918) one already made;
4) Total; 5) A refusal without justifiable cause to support
5) It must be for a cause expressly stated by Law the parent or ascendant who disinherits such
(Art. 916, in relation to Art. 919-921) child or descendant;
6) Unconditional; a) The obligation to support must be proven.
7) If the truth of the cause is denied, it must be b) There must be a need and demand for
Proved by the proponent. (Art. 917) support.
c) The demand must be unjustifiably
GROUNDS FOR DISINHERITANCE refused.
d) This ground also applies to disinheritance
Grounds for Disinheritance of Legitimate or of parents, ascendants, and spouses
Illegitimate Children and Descendants (Art.
919) NOTE: Refusal may be justified, if the obligor
1) When the child or descendant has been found does not have enough resources for all whom
guilty of an attempt against the life of the he is obliged to support. The ascendants are
testator, his or her spouse, descendants, or only third in the hierarchy of preference
ascendant; among claimants of support. (Family Code,
a) Final conviction is required. Art. 200, par. 3)
b) It includes all stages of commission of a
crime. (Attempted, frustrated, or 6) Maltreatment of the testator by word or deed,
consummated) by the child or descendant;
c) This ground also applies to disinheritance a) The verbal or physical assault must be of
of parents, ascendants, and spouse. a serious nature.
d) Felony must be intentional (not through b) No conviction is required. It is not even
negligence) required that a criminal case be filed.
2) When a child or descendant has accused the
testator of a crime for which the law prescribes By word – Slander, offensive language,
imprisonment for six years or more, if the insult, libel. May be spoken or written.
accusation has been found groundless; By deed – No need for violence. It could be
a) It includes filing of a complaint before the something which caused the testator to be
prosecutor, or presenting incriminating humiliated.
evidence against the testator, or even
suppressing exculpatory evidence. 7) When a child or descendant leads a
b) It may be made by the heir in a dishonorable or disgraceful life;
proceeding as a complainant or witness in a) The conduct must be habitual. (Balane,
a criminal case. supra)
c) The testator must be acquitted. 8) Conviction of a crime which carries with it the
d) The accusation must be found to be penalty of civil interdiction.
groundless. The judgment of acquittal a) Final conviction is required.
must state either no crime was committed b) The accessory penalty of civil interdiction
or that the accused did not commit the is imposed with the principal penalties of
crime. An acquittal on reasonable doubt death, reclusion perpetua, and reclusion
will not be a ground of disinheritance. temporal. (Balane, supra)
NOTE: The enumeration is exclusive.

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• No conviction is required.
Grounds for Disinheritance of Legitimate or 7) The refusal to support the children or
Illegitimate Parents or Ascendants (Art. 920) descendants without justifiable cause;
1) When the parents have abandoned their 8) An attempt by one of the parents against the
children or induced their daughters to live a life of the other, unless there has been a
corrupt or immoral life, or attempted against reconciliation between them.
their virtue; a) Final conviction is not required.
a) Includes all conduct constituting a b) It includes all stages of commission of a
repeated or total refusal or failure to care crime. (Attempted, frustrated, or
for a child. consummated)
b) This applies when the parents willfully left c) Even if parents are not married, it is still a
the children to fend for themselves. ground. The parents do not need to be
c) It is not restricted to those instances of spouses. However, the testator must be a
abandonment penalized by law. common child.
d) Inducement- same as deprivation of d) Reconciliation between the parents
parental authority; only applies to female removes the right of a child or descendant
descendants to disinherit and rescinds a disinheritance
e) Attempt on virtue- no conviction is already made.
required NOTE: The enumeration is exclusive.
2) When the parent or ascendant has been
convicted of an attempt against the life of the Grounds for Disinheritance of a Spouse (Art.
testator, his or her spouse, descendants, or 921)
ascendants; 1) When the spouse has been convicted of an
3) When the parent or ascendant has accused attempt against the life of the testator, his or
the testator of a crime for which the law her descendants, or ascendants;
prescribes imprisonment for six years or 2) When the spouse has accused the testator of
more, if the accusation has been found to be a crime for which the law prescribes
false; imprisonment of six years or more, and the
4) When the parent or ascendant has been accusation has been found to be false;
convicted of adultery or concubinage with the 3) When the spouse by fraud, violence,
spouse of the testator; intimidation, or undue influence cause the
5) When the parent or ascendant by fraud, testator to make a will or to change one
violence, intimidation, or undue influence already made;
causes the testator to make a will or to change 4) When the spouse has given cause for legal
one already made; separation;
6) The loss of parental authority for causes a) A decree of legal separation is not
specified in this Code; required.
• It refers to culpable loss of parental b) The grounds for legal separation need not
authority and excludes attainment of age be proven, unless contested by the heir.
of majority. (Balane, supra) The causes c) If there is already a decree of legal
for culplable loss of parental authority separation, the ground is conclusive, but
include: there is still a need to disinherit by will.
a) judicial deprivation of parental 5) When the spouse has given grounds for the
authority on the ground of sexual loss of parental authority;
abuse; • Judicial decree is not required. Giving
b) loss of parental authority as a result of grounds therefore is sufficient. (Art. 921)
judicial declaration of abandonment of 6) Unjustifiable refusal to support the children or
the child the other spouse.
c) judicial deprivation of parental NOTE: The enumeration is exclusive.
authority based on:
i) excessively harsh or cruel Effects of Disinheritance
treatment of the child • Total exclusion of the compulsory heir from
ii) giving the child corrupting orders, the inheritance, which includes his legitime,
counsel or example his share in the intestate portion, and any
iii) compelling the child to beg; or testamentary disposition made in a prior will.
iv) subjecting the child or allowing (Balane, supra at p. 437-438)
him to be subjected to acts of
lasciviousness

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NOTE: Therefore, the heir loses his legitime. Partial annulment of Effect: Total annulment
As to the free portion, it passes through institution of heirs of institution of heirs
Substitution, Accretion, and Intestacy.
Preterition is total omission from the inheritance,
• The children or descendants of the person without the heir being expressly disinherited. The
disinherited shall take his or her place and implied basis of the rule on preterition is
shall preserve the rights of compulsory heirs inadvertent omission by the testator. Thus, if the
with respect to the legitime. (Art. 923) testator explicitly disinherits the heir, Article 854 on
preterition will not apply. Should the disinheritance
NOTE: The disinherited heir can be be ineffective, for absence of one or other of the
represented in the legitime and also to any requisites for a valid disinheritance, the heir is
intestate portion that he or she would have simply entitled to demand his rightful share.
inherited: (Balane, supra)
a. Only in the descending line, never in the
ascending Revocation of Disinheritance
b. In collateral line, only with respect to 1. Reconciliation (Art. 922)
nephews and nieces. 2. Subsequent institution of the disinherited heir.
3. Nullity of the will, which contains the
• The disinherited parents shall not have the disinheritance.
usufruct or administration of the property
which constitutes the legitime. (Art. 923) Reconciliation
This refers to the resumption of genuine cordial
Ineffective Disinheritance relationship between the testator and the
Disinheritance without specification of the cause, disinherited heir, approximating that which
or for a cause the truth of which, if contradicted, is prevailed before the testator learned of the cause
not proved, or which is not one of those set forth for disinheritance, reciprocally manifested by their
in this Code, shall annul the institution of heirs actions subsequent to the act of disinheritance.
insofar as it may prejudice the person disinherited; (Vitug, supra, p. 264)
but the devises and legacies and other
testamentary dispositions shall be valid to such Reconciliation may be done by:
extent as will not impair the legitime. (Art. 918) 1) Concrete and express pardon extended to the
offender, who accepts it.
Effects of Ineffective Disinheritance A general pardon extended by the testator on
1. If the testator had made disposition of the his deathbed to all who have offended him will
entire estate, the testamentary disposition is not suffice.
annulled only insofar as they prejudice the 2) Unequivocal conduct toward the offending
legitime of the person disinherited. It does not heir, by which the intent to forgive must be
affect the dispositions of the testator with clear.
respect to the free portion
2. If the testator did not dispose of the free OCCURRED BEFORE OCCURRED
portion, the compulsory heir will be given all DISINHERITANCE IS AFTER
that he is entitled to receive as if the MADE DISINHERITANCE
disinheritance has not been made, without IS MADE
prejudice to lawful dispositions made by the Right to disinherit is Disinheritance is set
testator in favor of others. extinguished aside. (Art. 922)
3. Devisees, legacies and other testamentary
dispositions shall be valid to such extent as Effects of Setting Aside the Disinheritance
will not impair the legitime. (Vitug, Civil Law 1) The disinherited heir is restored to his
Volume III, 2006 edition, p. 263) legitime.
2) If the disinheriting will did not dispose of the
INEFFECTIVE PRETERITION disposable portion, the disinherited heir is
DISINHERITANCE entitled to his proportionate share, if any.
Person disinherited The person omitted 3) If the disinheriting will or any subsequent will
may be any must be a compulsory disposed of the disposable portion in favor of
compulsory heir heir in the direct line testamentary heirs, legatees or devisees,
Express Implied such dispositions remain valid.
Intentional Either intentional or
unintentional

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Summary of Grounds for Disinheritance (Arts. 919, 920 & 921)
GROUND CHILD/ PARENT/ SPOUSE

DESCENDANT ASCENDANT
Attempt against the life of the testator, √ √ √
spouse, ascendant, descendant
Accusation of a crime with penalty of six √ √ √
years
Adultery and Concubinage with the √ √ N/A
spouse of testator
Induce testator to make/change the will. √ √ √
Support unjustifiably refused √ √ Unjustifiable refusal to

support the children or
the other spouse
Maltreatment of the testator by word or √ N/A N/A
deed
Leading a dishonorable or disgraceful √ N/A N/A
life
Conviction of a crime which carries with √ N/A N/A
the penalty of civil interdiction
Abandonment of Children, Inducement N/A √ N/A
to live a corrupt or moral life, or
attempted against their virtue
Loss of parental authority N/A √ It is sufficient that the
spouse has given
grounds for loss of
parental authority
Attempt by one Parent against the Life of N/A √ N/A
the Other
Giving Cause for Legal Separation N/A N/A √

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XVIII. LEGACIES AND DEVISES

EXTENT OF LIABILITY
Legacy – Testamentary disposition of personal LEGATEE / DEVISEE HEIR
property by particular title. (Balane, supra) If charged with a If charged with a
legacy or devise, he or legacy or devise, he
Devise – Testamentary disposition of real she shall be liable only or she shall not be
property by particular title. (Balane, supra) for the extent of the liable beyond the
value of the legacy or amount of the free
HEIR LEGATEE / DEVISEE devise received. portion given to him.
One who succeeds to Those who succeed (Arts. 925-926; Tolentino, supra)
the whole or a to definite, specific,
fractional part of the and individual NOTE: Since legacies and devises are to be taken
inheritance properties from the disposable free portion of the estate, the
(Balane, supra) provisions on institution of heirs are generally
applicable to them.
Things And Rights Which May Be Bequeathed
of Devised When Two Or More Heirs Take Possession Of
All things and rights which are within the The Estate
commerce of man may be bequeathed or devised. If two or more heirs take possession of the estate,
(Art. 924) they shall be solidarily liable for the loss or
destruction of a thing devised or bequeathed, even
NOTE: It is not required that the thing devised or though only one of them should been negligent.
bequeathed belong to the testator. Also, it must (Art. 927)
not impair the legitimes.
Liability for Eviction
Persons Who May Be Charged With Legacies General Rule: The estate is liable for eviction.
And Devises Exception: In case of a subsidiary legacy or
A testator may charge with legacies and devises devise, the heir, legatee or devise charged shall
not only his compulsory heirs but also the legatees be liable in case of eviction, if the thing is
and devisees. (Art. 925) indeterminate and is indicated only by its kind. (Art.
928)
General Rule: Estate is charged with the legacy
or devise. Thing Owned In Part By Testator
Exception: Subsidiary legacy or devise General Rule: Conveys only interest or part
(Paras, Civil Code of the Philippines Annotated, owned by testator (Art. 929)
2016) Exception: If testator otherwise provides
1) He may convey more than what he owns and
Subsidiary legacy or devise – When the testator the estate should try to acquire the part or
imposes the burden on an heir or a legatee or interest owned by other parties. If other
devisee; the heir, legatee, or devisee charged will parties are unwilling to alienate, the estate
be bound to deliver the legacy or devise to the should give the legatee/devise the monetary
person specified. As far as the heir, legatee, or equivalent. (by analogy with Art. 931)
devisee charged is concerned, it will be a mode. 2) He may convey less than what he owns. (Art.
(Balane, supra) 794)
Where the will is silent as to who shall pay or Thing Owned by Another (Arts. 930-931)
deliver the legacy/devise: 1) If the testator orders acquisition of the thing –
1. If there is an administration proceeding, there The order should be complied with. If the
is a presumption that such legacy or devise owner is unwilling to part with the thing, the
constitutes a charge against the decedent’s legatee/devisee should be given the monetary
estate (Paras, supra, 2016) equivalent. (Art. 931)
2. If there are no administration proceedings, it
is a charge upon the heirs, in the same 2) If the testator erroneously believed that the
proportion in which they may inherit. (Art. 926, thing belonged to him –The legacy/devise is
par. 2) void.
Exception: If subsequent to the making of the
disposition, the thing is acquired by the

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testator onerously or gratuitously, the The same rule applies when the thing is pledged
disposition is validated. (Art. 930) or mortgaged after the execution of the will. (Art.
934, par. 2)
3) If the testator knew that the thing did not
belong to him but did not order its acquisition Any other charge, perpetual or temporary, with
– The disposition should be considered valid. which the thing bequeathed is burdened, passes
There is an implied order to acquire the with it to the legatee or devisee. (Art. 934, par. 3)
property. (Paras, supra)
Legacy / Devise Subject to a Usufruct
Thing Already Owned by the Legatee/Devisee If the thing bequeathed should be subject to a
(Arts. 932-933) usufruct, the legatee or devisee shall respect such
1) If thing already belonged to legatee/devisee at right until it is legally extinguished. (Art. 946)
time of execution of will – The legacy/devise
is void even if legatee/devisee alienates the Legacy of Credit or Remission (Art. 935-937)
property subsequently unless the acquirer is 1) Applies only to the amount still unpaid at the
the testator himself. (Balane, supra citing time of testator’s death. (Art. 935);
Manresa) 2) Revoked if testator subsequently sues the
debtor for collection. (Art. 936);
2) If thing was owned by another person at time 3) If generic, applies only to those existing at the
of making the will and thereafter it is acquired time of the execution of the will, unless
by legatee/devisee: otherwise provided. (Art. 937 and 793)
a. If testator erroneously believed that he
owned the thing – The legacy/devise Legacy / Devise to a Creditor (Art. 938)
is void. A legacy or devise made to a creditor shall not be
b. If testator knew that he did not own the applied to his credit, unless the testator so
thing: expressly declares.
i. If thing was acquired onerously
by legatee/devisee – The If the testator provides that the devise or legacy
legatee/devisee is entitled to will be imputed to the debt, and if the debt exceeds
reimbursement. the legacy or devise, the excess may be
ii. If thing was acquired gratuitously demanded as an obligation of the estate.
by legatee/ devisee – Nothing
more is due. Testamentary Instruction to Pay a Debt (Art.
939)
3) If thing was owned by testator at time will was INSTRUCTION INSTRUCTION TO PAY
made and the legatee/devisee acquired the TO PAY A NON- MORE THAN WHAT IS
thing from the testator —The legacy/devise EXISTING DEBT DUE
should be deemed revoked The disposition The instruction should be
should be effective only as to what
Legacy / Devise to Remove an Encumbrance considered as not is due, unless the
Over a Thing Belonging to the Testator (Art. written. contrary intention
932, par. 2) appears.
If the testator expressly orders that the thing be
freed from such interest or encumbrance, the Alternative Legacies or Devises – One which
legacy or devise shall be valid to that extent. provides that among several things mentioned,
only one is to be given.
NOTE: The legacy / devise is valid, if the
encumbrance can be removed for a consideration. General Rule: The choice is left to the:
1) Direct legacy or devise – Estate, through the
Legacy / Devise of a Thing Pledged or executor or administrator;
Mortgaged (Art. 934) 2) Subsidiary legacy or devise – Heir, legatee,
If the testator should bequeath or devise devisee charged (Tolentino, supra)
something pledged or mortgaged to secure a
recoverable debt before the execution of the will, Exception: If the testator provides that the legatee
the estate is obliged to pay the debt, unless the or devisee himself may choose, or that a third
contrary intention appears. party may choose. (Art. 942)

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If the person who shall make the choice dies whichever comes later. In the latter instance, only
before the choice is made: (Art. 940, par. 2) if the legatee pursues his studies diligently.
1) If the choice belonged to the executor or
administrator – The right is transmissible to Amount (Art. 944, par. 3)
his successor in office; 1) The amount fixed by the testator; or
2) If the choice belongs to an heir, legatee, or 2) That which is proper, as determined by:
devisee – The right is transmitted to his own a) The social standing and circumstances of
heirs. the legatee, and
NOTE: The choice is irrevocable. (Art. 940, par. 3) b) The value of the disposable portion of the
estate.
Generic Legacies or Devises
RULES ON VALIDITY (Art. 941) Legacy for Support (Art. 944)
GENERIC LEGACY GENERIC DEVISE Duration – During the lifetime of the legatee,
Valid even if no such Valid only if there unless the testator provided otherwise
movable exists in the exists such an
estate upon the immovable in the Amount (Art. 944, par. 3-4)
testator’s death. The estate at the time of 1) The amount fixed by the testator; or
estate will simply have the testator’s death 2) That which the testator, during his lifetime,
to acquire what is used to give the legatee by way of support,
given by legacy. unless markedly disproportionate to the value
of the disposable portion.
Right of Choice in Generic Legacies or Devises 3) That which is reasonable, as determined by:
(Art. 941-943) a) The social standing and circumstances of
General Rule: The executor or administrator, the legatee, and
acting for the estate. b) The value of the disposable portion of the
Exception: When the testator expressly leaves estate.
the right of choice to the heir, or the legatee or
devisee, on whom the obligation to give is Legacy of a Periodical Pension
imposed. (Subsidiary legacy or devise). If a periodical pension, or a certain annual,
monthly, or weekly amount is bequeathed, the
Limitation on choice legatee may petition the court for the first
The persons who have the right of choice shall installment upon the death of the testator, and for
comply with the legacy by the delivery of a thing the following ones which shall be due at the
which is neither of inferior nor of superior quality. beginning of each period; such payment shall not
(Art. 941) be returned, even though the legatee should die
before the expiration of the period which has
If the person who shall make the choice cannot do commenced. (Art. 945)
so:
1) If the choice belonged to the executor or DEMANDABILITY, OWNERSHIP, AND
administrator – The right is transmissible to FRUITS
his successor in office; PURE AND WITH A SUSPENSIVE
2) If the choice belongs to an heir, legatee, or DETERMINATE TERM OR CONDITION
devisee – The right is transmitted to his own OR GENERIC
heirs. Upon the Upon the arrival of the
testator’s death term or upon the
NOTE: The choice is irrevocable. (Art. 940) happening of the
condition, as the case
If the person to whom the testator has expressly may be
given the right to choose does not exercise his (Art. 947; Paras, supra)
right, it shall be understood that he has renounced
it and the person obliged to pay the legacy or When Ownership Vests
devise may deliver any of the things designated, 1) Pure and determinate property – Upon
provided it is not of the lowest or of the highest testator’s death
quality. (Tolentino, supra) 2) Pure and generic property –
a) If the property came from the testator’s
Legacy for Education (Art. 944) estate – Upon testator’s death
Duration – Age of majority or the completion of a b) If the property is acquired from a third
professional, vocation, or general course person – Upon acquisition

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3) Devises or legacies with a suspensive term – Possession of the Thing Bequeathed

Upon arrival of the term, but the right to it vests The legatee or devisee cannot take possession of
upon the testator’s death the thing bequeathed upon his own authority, but
4) Devises or legacies with a suspensive shall request its delivery and possession of the
condition – Upon the testator’s death, if the heir charged with the legacy or devise, or of the
condition is fulfilled. (Art. 948; Paras, supra) executor or administrator of the estate should he
be authorized by the court to deliver it. (Art. 953)
Fruits
1) Pure and determinate property – Upon Order of Preference in Case Estate is
testator’s death Insufficient to Cover all Legacies and Devices
2) Pure and generic property – Upon (Art. 950)
determination, unless the testator provides If the estate should not be sufficient to cover all the
otherwise legacies or devises, their payment shall be made
3) Devises or legacies with a suspensive term – in the following order:
Upon arrival of the term 1) Remuneratory legacies or devises;
4) Devises or legacies with a suspensive 2) Legacies or devises declared by the testator
condition – Upon the happening of the to be preferential;
condition, unless the testator provides 3) Legacies for support;
otherwise (Art. 948; Paras, supra) 4) Legacies for education;
5) Legacies or devises of a specific, determinate
NOTE: If the legacy or devise is of a specific and thing which forms a part of the estate;
determinate thing pertaining to the testator, the 6) All others, pro-rata.
legatee or devisee do not acquire the income
which was due and unpaid before the testator’s REDUCTION OF ORDER OF
death. (Art. 948) LEGACIES AND PREFERENCE OF
DEVISES DEVISES AND
From the moment of the testator’s death, the (ART. 911) LEGACIES
specific and determinate thing bequeathed shall (ART. 950)
be at the risk of the legatee or devisee, who shall Non-preferred In the order of
bear its loss or deterioration, and shall be legacies or devises preference, the last is
benefited by its increase or improvement, without will be reduced pro- to be reduced first and
prejudice to the responsibility of the executor or rata and the preferred the first is to be
administrator. (Art. 948) legacies or devises reduced last.
Obligation to Deliver the Thing Bequeathed will be reduced last.
The thing bequeathed shall be delivered with all its Applies when the Applies when the
accessories and accessories and in the condition legitimes have been reduction is due to
in which it may be upon the death of the testator. impaired reasons other than
(Art. 951) impairment of
legitimes
The heir, charged with a legacy or devise, or the
executor or administrator of the estate, must Rules on Acceptance and Repudiation of
deliver the very thing bequeathed if he is able to Devices or Legacies
do so and cannot discharge this obligation by General Rule: Acceptance may be total or partial.
paying its value. (Art. 952, par. 1) (Art. 954)
Exception: If the legacy or devise is partly
Legacies of Money Paid in Cash onerous and partly gratuitous, the recipient cannot
Legacies of money must be paid in cash, even accept the gratuitous part and renounce the
though the heir or the estate may not have any. onerous part. Any other combination is permitted.
(Art. 952, par. 2) (Art. 954)
Necessary Expenses for the Delivery of the Acceptance or Repudiation by Heirs of

Thing Bequeathed Legatee or Devisee (Art. 954, par. 2)
The expenses necessary for the delivery of the If the legatee or devisee dies before accepting or
thing bequeathed shall be for the account of the renouncing the devise or legacy, his heirs shall
heir or the estate, but without prejudice to the exercise such right as to their pro-indiviso share,
legitime. (Art. 952 par. 3) applying the rules in Article 954.

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TWO LEGACIES / DEVISES TO THE SAME 3) Total Loss: If the thing bequeathed or
RECIPIENT (ART. 955) devised is totally lost during the lifetime of the
BOTH ARE ONE IS GRATUITOUS testator, or after his death without the heir’s
GRATUITOUS AND THE OTHER IS fault. (Art. 957)
OR ONEROUS ONEROUS
The recipient may The recipient cannot 4) If the legacy is a credit against a third person
accept or accept the gratuitous and or the remission of a debt, and the testator,
renounce either or renounce the onerous. subsequent to the making of the will brings an
both. Any other combination is action against such debtor for payment. (Art.
permitted. 936)
Legacy or Devise to a Compulsory Heir Mistake in the Name of the Thing Bequeathed
Any compulsory heir who is at the same time a or Devised
legatee or devisee may waive the inheritance and A mistake as to the name of the thing bequeathed
accept the legacy or devise, or renounce the latter or devised, is of no consequence, if it is possible
and accept the former, or waive or accept both. to identify the thing which the testator intended to
(Art. 955 par. 2) bequeath or devise. (Art. 958)
NOTE: For acceptance and repudiation of devices
or legacies, the testator’s wishes are supreme. All viii. INTESTATE SUCCESSION
the rules apply in the absence of stipulation
providing otherwise. (Balane, supra) Four Basic Rules of Intestacy
1) Rule of Relationship – the heirs must be
Repudiation by or Incapacity of Legatee or related to the decedent.
Devisee (Art. 956)
If the legatee or devisee cannot or is unwilling to Four Kinds of Relationships
accept the legacy or devise, or if the legacy or a) Ascendants and Descendants;
devise for any reason should become ineffective, b) Collaterals;
the following steps apply: c) Marriage;
1. Follow substitution, if any. d) State of sovereign
2. Then accretion,
3. Lastly, intestacy as it shall be merged to the 2) Rule of Preference of Lines – the
mass of the estate. descending line excludes the ascending and
the collateral, and the ascending excludes the
When Legacy/Devise can be Revoked by collateral. (Art. 965)
Operation of Law
1) Transformation: If the testator transforms the Three lines of relationship
thing bequeathed or devised in such a manner a) Descending line
that it does not retain its form and b) Ascending line
denomination. (Art. 957) c) Collateral line
2) Alienation: If the testator, by any title or for 3) Rule of Proximity of Degree – the nearer
any cause, alienates the thing bequeathed or exclude the more remote, without prejudice to
devised or any part thereof. (Art. 957) representation. (Art. 962, par. 1)
NOTE: The alienation revokes the legacy or 4) Rule of Equality Among Relatives of the
devise even if for any reason the thing reverts Same Degree – the nearer exclude the more
to the testator (e.g. nullity of the contract) remote, those of equal degree should inherit
(Paras, supra) in equal shares. (Art. 962, par. 2)
Exceptions:
(a) If the reversion is caused by the 1. RELATIONSHIP
annulment of the alienation and the cause
for annulment was vitiation of consent on Proximity of relationship is determined by the
the grantor’s part, either by reason of number of generations. (Art. 963)
incapacity or of duress. (Fernandez v.
Dimagiba, G.R. No. L-23638, 1967) Degree – One generation
(b) If the reversion is by virtue of redemption
in a sale with pacto de retro. Computation of Degrees

ATENEO CENTRAL
1. Direct line – No legal limit to the number of Effect of Renunciation by All in the Same
degrees for entitlement to intestate Degree
succession. The right of succession should first be passed on
2. Collateral line – Intestate succession extends the heirs in succeeding degrees, before the next
only to the fifth degree of collateral line can succeed.
relationship (Art. 1010) 1. The descending line inherits first.
Line – Series of degrees, which may be direct or NOTE: If ALL the descendants of a certain
collateral degree renounce, succession passes to the
(a) Direct line – Constituted by the series of descendants of the next degree, and so on.
degrees among ascendants and
descendants 2. The ascending line inherits next.
i. Descending line – Unites the head of the
family with those who descend from him NOTE: Should no one be left in the
ii. Ascending line – Binds a person with descending line, the heirs in the ascending
those from whom he descends line acquire the right of succession, in order of
In the direct line, ascend to the common degrees of proximity.
ancestor.
There is no legal limit to the number of 3. The collateral line inherits last.
degrees for entitlement to intestate
succession NOTE: Only if all the descendants and
(b) Collateral line – Constituted by the series of ascendants renounce will the collateral
degrees among persons who are not relatives acquire the right to succeed.
ascendants and descendants, but who come
from a common ancestor The effect of renunciation by all in the same
In the collateral line, ascend to the common degree applies in cases of predecease or
ancestor and then descend to the person with incapacity by all in the same degree, except in
whom the computation is to be made. cases where representation is proper.
Intestate succession extends only to the 5th
degree of collateral relationship. 2. CAUSES OF INTESTACY
Full Blood Relationship Legal or Intestate Succession – Takes place by

Full blood relationship is that existing between operation of law in the absence of a valid will.
persons who have the same father and the same (Paras, supra)
mother. (Art. 967, par. 1)
Instances when Legal or Intestate Succession
Half Blood Relationship Operates (Art. 960)
Half-blood relationship is that existing between 8. If a person dies without a will, or with a void
persons who have the same father, but not the will, or one which has subsequently lost its
same mother, or the same mother, but not the validity;
same father. (Art. 967, par. 2) 9. When the will does not institute an heir to, or
dispose of all the property belonging to the
Importance of Distinction Between Full Blood testator. In such case, legal succession shall
and Half Blood Relationship (Arts. 1006, 1008) take place only with respect to the property of
Ratio of 2:1 for full-blood and half-blood which the testator has not disposed;
relationship in Articles 1006 and 1008, for brothers 10. If the suspensive condition attached to the
and sisters and nephews and nieces. institution of heir does not happen or is not
fulfilled, or if the heir dies before the testator,
RENUNCIATION IN INTESTACY or repudiates the inheritance, there being no
If the inheritance should be repudiated by the substitution, and no right of accretion takes
nearest relative, should there be one only, or by all place;
the nearest relatives called by law to succeed, 11. When the heir instituted is incapable of
should there be several, those of the following succeeding, except in cases provided in the
degree shall inherit in their own right and cannot Civil Code.
represent the person or persons repudiating the
inheritance. (Art. 969) Other Causes of Intestacy (Tolentino, supra)
Happening of a resolutory condition;
Expiration of a resolutory term;

ATENEO CENTRAL
Preterition (Balane, supra) parents of illegitimate children, brothers,

sister, nephews and nieces;
NOTE: Intestacy operates on the same principles c) Excluded by no one
as succession to the legitime. They are both
governed by the rules on exclusion and 6) Brothers and sisters, nephews and nieces
concurrence. (Arts. 1003-1008)
a) Exclude all other collaterals and the
3. ORDER OF INTESTATE State;
SUCCESSION b) Concur with the surviving spouse;
c) Excluded by legitimate children,
Intestate Heirs (Paras, supra) illegitimate children, legitimate parents,
1) Legitimate Children or Descendants (Art. 979) and parents of illegitimate children
2) Illegitimate Children or Descendants (Art. 988,
990, 992) 7) Other collaterals up to the fifth degree
3) Legitimate Parents or Ascendants (Art. 986) (Arts. 1009-1010)
4) Parents of Illegitimate Children (Art. 993) a) Exclude collaterals in more remote
5) Surviving Spouse (Art. 994) degree and the State;
6) Brothers, Sisters, Nephews, Nieces (Arts. b) Concur with collaterals in the same
1004-1008) degree;
7) Other Collateral up to the fifth degree (Art. c) Excluded by legitimate children,
1009) illegitimate children, legitimate parents,
8) State (Art. 1011) parents of illegitimate children, surviving
spouse, brothers and sisters, nephews
Rules of Exclusion and Concurrence and nieces;
1) Legitimate Children or Descendants (Arts.
978-982) 8) State (Arts. 1011-1014)
a) Exclude parents, collaterals, and the a) Excludes no one;
State b) Concurs with no one;
b) Concur with surviving spouse, and c) Excluded by everyone
illegitimate children or descendants
c) Excluded by no one Person to be Represented
ILLEGITIMATE LEGITIMATE CHILD
2) Illegitimate Children or Descendants (Arts. CHILD
983, 988-994) His or her Only his or her
a) Exclude parents of illegitimate children, descendant whether legitimate
collaterals, and the State; legitimate or descendants can
b) Concur with surviving spouse, legitimate illegitimate, may represent him, his or
children, and legitimate parents; represent him. her illegitimate
c) Excluded by no one descendants cannot
represent him. (Vda.
3) Legitimate parents (Arts. 985-986) De Crisologo v. Cam
a) Exclude collaterals and the State; G.R. No. L-44051,
b) Concur with illegitimate children and the 1985)
surviving spouse;
c) Are excluded by legitimate children Partial Intestacy (Balane, supra)
Where a decedent left a will disposing of a part,
4) Parents of illegitimate children (Arts. 993- but not all, of the disposable portion, the following
994) steps may solve the problem:
a) Exclude collaterals and the State; 1. Trace where the free portion went in total
b) Concur with the surviving spouse; intestacy.
c) Excluded by legitimate children and 2. The testamentary provision should be carried
illegitimate children out first, then what is left of the free portion
should then be given to the intended
5) Surviving spouse (Arts. 995-1002) beneficiary in intestacy. (Balane, supra)
a) Excludes collaterals other than brothers,
sisters, nephews, nieces, and the State;
b) Concur with legitimate children,
illegitimate children, legitimate parents,

ATENEO CENTRAL
4. RULE OF PROXIMITY AND RULE An Affidavit of Self-Adjudication is only proper

OF EQUALITY when the affiant is the sole heir of the decedent.
(Rebusquillo v. Gualvez, G.R. No. 204029)
Rule of Proximity of Degree – the nearer exclude
the more remote, without prejudice to “Unless there is a pending special proceeding for
representation. (Art. 962, par. 1) the settlement of the decedent’s estate or for the
determination of heirship, the compulsory or
The rule on proximity is a concept that favors the intestate heirs may commence an ordinary civil
relatives nearest in degree to the decedent and action to declare the nullity of a deed or instrument
excludes the more distant ones except when and [in this case the Affidavit of Self-Adjudication by
to the extent that the right of representation can the husband], and for recovery of property, or any
apply… Respondent, being a relative within the other action in the enforcement of their ownership
third civil degree, of the late Augusto H. Piedad rights acquired by virtue of succession, without the
excludes petitioner, a relative of the fifth degree, necessity of a priori and separate judicial
from succeeding an intestato to the estate of the declaration of their status as such.” (Treyes v.
decedent. (Bagunu v. Piedad, G.R. No. 140975, Larlar, G.R. No. 232579, 2020)
08 December 2000)
“Even assuming arguendo that the Rules (of
Rule of Equality Among Relatives of the Same Court) strictly provide that a separate judicial
Degree – the nearer exclude the more remote, determination of heirship in a special proceeding
those of equal degree should inherit in equal is a precondition in an ordinary civil action wherein
shares. (Art. 962, par. 2) heirship is already established by compulsory
succession or intestacy and is only sought to be
Exceptions to the Rule of Equality in the Same enforced, which, as already discussed at length, is
Degree not the case, the Rules must still yield to the
The rule of preference of lines; specific provisions of the Civil Code that certain
Note: The direct line is preferred over the relatives of the decedent [such as the siblings in
collateral, even if they are of the same this case] attain their status as either compulsory
degree or intestate heirs and that their successional rights
The distinction between legitimate and are transmitted and enforceable at the very
illegitimate filiation; moment of death [the SC cited Article 777 of the
The rule of division by line in the ascending Civil Code] without the need of such separate
line; judicial determination.” (Treyes v. Larlar, G.R. No.
The distinction between full-blood and half- 232579, 2020)
blood relationship among brothers and
sisters, as well as nephews and nieces; “Given the clear dictates of the Civil Code that the
Representation; and rights of the heirs to the inheritance vest
Concurrence of nephews and nieces and immediately at the precise moment of the
uncles and aunts (Paras, supra) decedent’s death [Art. 777 of the Civil Code] even
without judicial declaration of heirship, and the
5. DETERMINATION OF HEIRS various Court En Banc and Division decisions
holding that no prior judicial declaration of heirship
The declaration of heirship must be made in a is necessary before an heir can file an ordinary
special proceeding, not in an independent civil civil action to enforce ownership rights acquired by
action. However, the Court held that recourse to virtue of succession through the nullification of
administration proceedings to determine who the deeds divesting property or properties forming part
heirs are is sanctioned only if there is a good and of the estate and reconveyance thereof to the
compelling reason for such recourse. Hence, the estate or for the common benefit of the heirs of the
Court had allowed exceptions to the rule requiring decedent”, the Supreme Court clarified that the
administration proceedings as when the parties in rule laid down in Ypon, Yaptinchay,
the civil case already presented their evidence Portugal,…and other similar cases, which requires
regarding the issue of heirship, and the RTC had prior determination of heirship in a separate
consequently rendered judgment upon the issues special proceeding as a prerequisite before one
it defined during the pre-trial. (Rebusquillo v. can file an ordinary civil action to enforce
Gualvez, G.R. No. 204029) ownership rights acquired by virtue of succession,
is abandoned. (Treyes v. Larlar, G.R. No. 232579,
2020)

ATENEO CENTRAL
6. SUCCESIONAL BARRIER (THE MARITAL CHILDREN

“IRON CURTAIN RULE”) Legitimate children and their descendants
succeed the parents and other ascendants,
Iron Curtain Rule / Barrier Principle / without distinction as to sex or age, and even if
Principle of Absolute Separation they should come from different marriages. (Art.
An illegitimate child has no right to inherit ab 979, par. 1)
intestato from the legitimate children and relatives
of his father or mother; nor shall such children or The children of the deceased shall always inherit
relatives inherit in the same manner from the from him in their own right, dividing the inheritance
illegitimate child. (Art. 992) in equal shares. (Art. 980)
The right of representation is not available to NON-MARITAL CHILDREN

illegitimate descendants of legitimate children in Illegitimate child is entitled to 1/2 of share of a
the inheritance of a legitimate grandparent. (Diaz legitimate child. The legitime of the illegitimate
v. Intermediate Appellate Court, G.R. No. L- child shall be taken from the free portion, provided
66574, Feb. 21, 1990) in no case shall the total legitime of illegitimate
child exceed the free portion, and the legitime of
NOTE: The above ruling in Diaz no longer applies surviving spouse must first be fully satisfied. (Art.
considering Aquino v. Aquino, (G.R. Nos. 208912 895)
and 209018, Dec. 7, 2021), where the court ruled
that grandparents and direct ascendants fall In the absence of legitimate descendants or
outside the scope of “relatives” under Art. 992.5 ascendants, the illegitimate children shall succeed
to the entire estate of the deceased. (Art. 988)
7. SUCCESSIONAL RIGHTS OF
If, together with illegitimate children, there should
ADOPTED CHILDREN
survive descendants of another illegitimate child
who is dead, the former shall succeed in their own
An adopted child succeeds to the property of the right and the latter by right of representation. (Art
adopting parents in the same manner as a 989)
legitimate child. (Art. 979, par. 2)
The hereditary rights granted by the two preceding
Representation of and by an Adopted Child articles to illegitimate children shall be transmitted
An adopted child can neither represent nor be upon their death to their descendants, who shall
represented. (Balane, supra at p. 484) inherit by right of representation from their
deceased grandparent. (Art. 990)
An adopted child cannot represent his/her adopter
in the estate of his/her adopter’s grandparents If legitimate ascendants are left, the illegitimate
because the relationship between the adopter and children shall divide the inheritance with them,
the adopted does not go beyond their relatives of taking one-half of the estate, whatever be the
either party. (Teotico v. Del Val, G.R. No. L-18753) number of the ascendants or of the illegitimate
children. (Art. 991)
8. SUCCESSIONAL RIGHTS OF 10. SUCCESSIONAL RIGHTS OF THE

ADOPTING PARENTS SURVIVING SPOUSE
In case of the death of an adopted child, leaving In the absence of legitimate descendants and
no children or descendants, his parents and ascendants, and illegitimate children and their
relatives by consanguinity and not by adoption, descendants, whether legitimate or illegitimate,
shall be his legal heirs. (Art. 984) the surviving spouse shall inherit the entire estate,
without prejudice to the rights of brothers and
sisters, nephews and nieces, should there be any,
9. SUCCESSIONAL RIGHTS OF under article 1001. (Art. 995)
MARITAL AND NON-MARITAL
CHILDREN If a widow or widower and legitimate children or
descendants are left, the surviving spouse has in
5
Note that this December 7, 2021 decision was released
beyond the cut-off date of June 30, 2021, for Bar coverage.

ATENEO CENTRAL
the succession the same share as that of each of the former shall inherit per capita, and the latter
the children. (Art. 996) per stirpes. (Art. 1005)
When the widow or widower survives with Should brother and sisters of the full blood survive
legitimate parents or ascendants, the surviving together with brothers and sisters of the half blood,
spouse shall be entitled to one-half of the estate, the former shall be entitled to a share double that
and the legitimate parents or ascendants to the of the latter. (Art. 1006)
other half. (Art. 997)
In case brothers and sisters of the half blood,
If a widow or widower survives with illegitimate some on the father's and some on the mother's
children, such widow or widower shall be entitled side, are the only survivors, all shall inherit in equal
to one-half of the inheritance, and the illegitimate shares without distinction as to the origin of the
children or their descendants, whether legitimate property. (Art. 1007)
or illegitimate, to the other half. (Art. 998)
Children of brothers and sisters of the half blood
When the widow or widower survives with shall succeed per capita or per stirpes, in
legitimate children or their descendants and accordance with the rules laid down for the
illegitimate children or their descendants, whether brothers and sisters of the full blood. (Art. 1008)
legitimate or illegitimate, such widow or widower
shall be entitled to the same share as that of a Should there be neither brothers nor sisters nor
legitimate child. (Art. 999) children of brothers or sisters, the other collateral
relatives shall succeed to the estate. The latter
If legitimate ascendants, the surviving spouse, and shall succeed without distinction of lines or
illegitimate children are left, the ascendants shall preference among them by reason of relationship
be entitled to one-half of the inheritance, and the by the whole blood. (Art. 1009)
other half shall be divided between the surviving
spouse and the illegitimate children so that such The right to inherit ab intestato shall not extend
widow or widower shall have one-fourth of the beyond the fifth degree of relationship in the
estate, and the illegitimate children the other collateral line. (Art. 1010)
fourth. (Art. 1000)
Should brothers and sisters or their children

survive with the widow or widower, the latter shall
be entitled to one-half of the inheritance and the
brothers and sisters or their children to the other
half. (Art. 1001)
In case of a legal separation, if the surviving

spouse gave cause for the separation, he or she
shall not have any of the rights granted in the
preceding articles. (Art. 1002)
11. SUCCESSIONAL RIGHTS OF

COLLATERAL RELATIVES
If there are no descendants, ascendants,

illegitimate children, or a surviving spouse, the
collateral relatives shall succeed to the entire
estate of the deceased in accordance with the
following articles. (Art. 1003)
Should the only survivors be brothers and sisters

of the full blood, they shall inherit in equal shares.
(Art. 1004)
Should brothers and sisters survive together with

nephews and nieces, who are the children of the
descendant's brothers and sisters of the full blood,

ATENEO CENTRAL
COMBINATIONS OF LEGITIMES AND INTESTATE SUCCESSION

(Arts. 888-889, 892-901, 903, 983, 986-987, 991, 993-1001, 1004-1008, 1011)
HEIRS LEGITIME INTESTACY TOTAL

Legitimate Children 1/2 divided equally 1/2 divided equally Whole estate divided equally
Alone
Legitimate Children and LC – 1/2 divided equally Residue left shall Whole estate divided among
Illegitimate Children be divided among them, observing the 2:1 ratio
ILC – 1/2 of share of 1 LC
them, observing
the 2:1 ratio
Legitimate Children and LC – 1/2 divided equally Residue left shall Whole estate divided equally
Surviving Spouse be divided among
Spouse – Share of 1 LC
them equally
One Legitimate Child LC – 1/2 1/4 goes to the LC – 1/2
and Surviving Spouse spouse
Spouse – 1/4 Spouse – 1/2
Legitimate Children, LC – 1/2 Residue left shall Whole estate divided among
Surviving Spouse, Spouse – share of 1 LC be divided among them, observing the 2:1 ratio
Illegitimate Children them, observing
ILC – 1/2 of share of 1 LC
the 2:1 ratio
Legitimate Parents LP – 1/2 1/2 goes to the Whole estate divided equally
Alone parents
Legitimate Ascendants 1/2 1/2 Whole estate divided among
Other than Parents them, observe rules in
proximity in degree, and
division by line
Legitimate Parents and LP – 1/2 1/4 goes to the LP – 1/2
Illegitimate Children illegitimate children
ILC – 1/4 ILC – 1/4
Legitimate Parents and LP – 1/2 1/4 goes to the LP – 1/2

Surviving Spouse spouse
Legitimate Parents, LP – 1/2 1/8 goes to the LP – 1/2

Surviving Spouse, and ILC – 1/4 spouse ILC – 1/4
Illegitimate Children
Illegitimate Children ILC – 1/2 1/2 goes to Whole estate divided equally
Alone illegitimate children
Illegitimate Children ILC – 1/3 1/6 goes to ILC – 1/2
and Surviving Spouse illegitimate children
Spouse – 1/3 1/6 goes to spouse Spouse – 1/2

ATENEO CENTRAL
(continuation)
Surviving Spouse 1/2 Residue goes to the Whole estate goes to the spouse
Alone 1/3 if marriage is spouse
in articulo mortis
Surviving Spouse Spouse – 1/4 1/ 4 goes to the Spouse 1/2
and Parents of spouse
Illegitimate Parents of 1/4 goes to the Parents of Illegitimate Children – ¼
Children Illegitimate parents of illegitimate
Children – 1/4 children
Surviving Spouse Spouse – 1/2 1/2 goes to the Spouse – 1/2
and Legitimate legitimate brothers
Brothers and and sisters, nephews Legitimate brothers and sisters,
Sisters, Nephews and nieces nephews and nieces – 1/2
and Nieces
Surviving Spouse Spouse – 1/2 1/2 goes to the Spouse – 1/2
and Illegitimate illegitimate brothers
Brothers and and sisters, nephews
Legitimate brothers and sisters,
Sisters, Nephews and nieces
nephews and nieces – 1/2
and Nieces
Parents of 1/2 1/2 goes to the Whole estate divided equally
Illegitimate parents of illegitimate
Children Alone children
Parents of Any kind of 1/2 goes to the any Whole estate goes to the children,
Illegitimate children – 1/2, kind of children, observing 2:1 ratio, if applicable
Children and observe 2:1 ratio observe 2:1 ratio Parents of illegitimate children are
Children of Any excluded by all kinds of children
Kind

ATENEO CENTRAL
(continuation)
Legitimate Brothers and N/A Whole estate divided among them, observing the 2:1 ratio for
Sisters Alone full-blood and half-blood siblings
Legitimate Brothers and N/A Whole estate divided among them, observing the 2:1 ratio for
Sisters, Nephews and full-blood and half-blood siblings
Nieces Apply rules on representation when proper
Nephews and Nieces N/A Whole estate divided among nephews and nieces, observing the
with Uncles and Aunts 2:1 ratio for full-blood and half-blood siblings
Uncles and aunts of the decedent are excluded. (Bacayo v.
Borromeo)
Illegitimate Brothers N/A Whole estate divided among them, observing the 2:1 ratio for
and Sisters Alone full-blood and half-blood siblings
Illegitimate Brothers N/A Whole estate divided among them, observing the 2:1 ratio for
and Sisters, Nephews full-blood and half-blood siblings
and Nieces
Nephews and Nieces N/A Whole estate divided among them, observing the 2:1 ratio for
Alone full-blood and half-blood siblings
Other Collaterals up to N/A Whole estate divided equally, observe rules in proximity in
the Fifth Degree degree
State N/A (Resident Decedent) (Non-Resident Decedent)
Personal property – Municipality Personal property and real
of the last residence property –Municipality
Real property – Municipality where it is situated
where it is situated
Property is to be used for the benefit of public education and

charitable institutions in the respective municipalities or cities, or
alternatively, at the instance of an interested party, or motu
proprio, court may order creation of a permanent trust for the
benefit of the institutions concerned.

ATENEO CENTRAL
ix. PROVISIONS COMMON TO TESTATE • The capacity to succeed is governed by the

AND INTESTATE SUCCESSION law of the nation of the decedent. (Art. 1039)
• Persons not incapacitated by law may
II. CAPACITY TO SUCCEED succeed by will or ab intestato. (Art. 1024)
• A testamentary provision in favor of a
Persons not incapacitated by law may succeed by disqualified person, even though made under
will or ab intestato. the guise of an onerous contract, or made
through an intermediary, shall be void. (Art.
The provisions relating to incapacity by will are 755)
equally applicable to intestate succession. (Art.
1024) IF INSTITUTION IS
IF INSTITUTION IS
SUBJECT TO A
SUBJECT TO A
NOTE: Both a natural person and a juridical SUSPENSIVE
SUSPENSIVE TERM
person may inherit. (Art. 1026) CONDITION
The successor must The requirement of
Requisites for Natural Persons be living or legally being alive or legal
In order to be capacitated to inherit, the heir, existing both when existence applies only
devisee or legatee must be living at the moment the decedent dies and at the moment of the
the succession opens, except in case of when the condition decedent’s death.
representation, when it is proper. (Art. 1025, par 1) happens. (Balane, (Balane, supra)
A child already conceived at the time of the death supra)
of the decedent is capable of succeeding provided
it be born later under the conditions prescribed in Incapacity to Succeed in Testamentary
Article 41 of the Civil Code. (Art. 1025, par 2) Succession (Art. 1027)
The following are incapable of succeeding:
Requisites for Juridical Persons 1) The priest who heard the confession of the
A testamentary disposition may be made to the testator during his last illness, or the minister
State, provinces, municipal corporations, private of the gospel who extended spiritual aid to him
corporations, organizations, or associations for during the same period;
religious, scientific, cultural, educational, or Requisites:
charitable purposes. a) The will must have been executed during
the testator’s last illness;
All other corporations or entities may succeed b) The spiritual ministration must have been
under a will, unless there is a provision to the extended during the last illness;
contrary in their charter or the laws of their c) The will must have been executed during
creation, and always subject to the same. (Art. or after the spiritual ministration.
1026) • Applies to all religions
Time to Determine Capacity to Succeed 2) The relatives of such priest or minister of the
General Rule: In order to judge the capacity of the gospel within the fourth degree, the church,
heir, legatee, or devisee, his qualification at the order, chapter, community, organization, or
time of the death of the decedent shall be the institution to which such priest or minister may
criterion. (Art. 1034) belong;
Exceptions: 3) A guardian with respect to testamentary

1) Those disqualified under Article 1032 dispositions given by a ward in his favor
(Unworthiness, pars. 2,3,5) wherein it is before the final accounts of the guardianship
necessary to wait until final judgment is have been approved, even if the testator
rendered; should die after the approval thereof;
2) Those disqualified under Article 1032 nevertheless, any provision made by the ward
(Unworthiness, par. 4) wherein it is necessary in favor of the guardian when the latter is his
to wait for the expiration for the month allowed ascendant, descendant, brother, sister, or
for report; spouse, shall be valid;
3) If the institution of the heirs, legacy or devise a) The will must have been executed by the
is conditional, the time of compliance with the ward during the effectivity of the
condition shall be considered. (Art. 1034) guardianship
b) The terms of this provision seem to be
NOTE: limited to guardians over the property.

ATENEO CENTRAL
c) A guardian who happens to be an

ascendant, descendant, brother, sister, or Requisites: (Balane, supra)
spouse of the ward-testator is excluded 1) Disposition for prayers and pious works for the
from the prohibition benefit of the testator’s soul;
2) No specification of the application of the
4) Any attesting witness to the execution of a will, disposition.
the spouse, parents, or children, or any one
claiming under such witness, spouse, parents, Apportionment of the disposition or its
or children; proceeds: (Balane, supra)
• Reiteration of Art. 823 but in more general 1) 1/2 to the church or denomination to which the
terms as it annuls all testamentary testator belonged
disposition not only legacies and devises. 2) 1/2 to the State, to be applied as provided in
The rule that if there are three other Article 1013.
competent witnesses as an exception
should be read into this. Dispositions in Favor of the Poor in General
(Art. 1030)
5) Any physician, surgeon, nurse, health officer Testamentary provisions in favor of the poor in
or druggist who took care of the testator during general, without designation of particular persons
his last illness; or of any community, shall be deemed limited to
• The physician must have taken care of the poor living in the domicile of the testator at the
the testator during his/her final illness. time of his death, unless it should clearly appear
“Taking care” means medical attendance that his intention was otherwise.
with some regularity or continuity.
The designation of the persons who are to be
6) Individuals, associations and corporations not considered as poor and the distribution of the
permitted by law to inherit under any kind of property shall be made by the person appointed
succession. (Art. 1027) by the testator for the purpose; in default of such
person, by the executor, and should there be no
Prohibitions in donations applies to executor, by the justice of the peace, the mayor,
testamentary succession (Art. 1028 in relation to and the municipal treasurer, who shall decide by a
Art. 739) majority of votes all questions that may arise. In all
Those who are disqualified from receiving these cases, the approval of the Court of First
donations under Article 739. Instance shall be necessary.
Under Article 739, the following are disqualified
from receiving testamentary dispositions from the The preceding paragraph shall apply when the
parties specified: testator has disposed of his property in favor of the
1) Those made between persons who are guilty poor of a definite locality.
of adultery, or concubinage at the time of the
donation; Disqualification of a Witness to Succeed to a
2) Those made between persons found guilty of Legacy or Devise (Art. 823)
the same criminal offense, in consideration If a person attests to the execution of a will, to
thereof; whom or to whose spouse, or parent, or child, a
3) Those made to a public officer or his wife, devise or legacy is given by such will, such devise
descendants and ascendants, by reason of or legacy shall, so far only as concerns such
his office; person, or spouse, or parent, or child of such
person, or any one claiming under such person or
Disposition For Prayers and Pious Works for spouse, or parent, or child, be void, unless there
the Benefit of His Soul are three other competent witnesses to such will.
Should the testator dispose of the whole or part of However, the person attesting shall be admitted as
his property for prayers and pious works for the a witness if such devise or legacy had not been
benefit of his soul, in general terms and without made or given.
specifying its application, the executor, with the
court's approval, shall deliver one-half thereof or Testamentary Provision in Favor of a
its proceeds to the church or denomination to Disqualified Person is Void (Art. 1031)
which the testator may belong, to be used for such A testamentary provision in favor of a disqualified
prayers and pious works, and the other half to the person, even though made under the guise of an
State, for the purposes mentioned in Article 1013. onerous contract, or made through an
(Art. 1029) intermediary, shall be void.

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Unworthiness (Art. 1032) c. the heir fails to report it to an office of

The following are incapable of succeeding under the law within a month (after learning
all kinds of succession by reason of unworthiness: of it)
1. Parents who have abandoned their children or d. there is a legal obligation for the heir
induced their daughters to lead a corrupt or to make an accusation
immoral life, or attempted against their virtue;
o Three grounds are provided: 5. Any person convicted of adultery or
(a) abandonment; concubinage with the spouse of the testator;
(b) inducement of a daughter to lead a o Final conviction required
corrupt or immoral life; and
(c) attempt against a daughter’s virtue 6. Any person who by fraud, violence,
o Abandonment - includes all conduct intimidation, or undue influence should cause
constituting a repeated or total refusal or the testator to make a will or to change one
failure to care for the child. already made;
o Inducement - same as deprivation of
parental authority; only applies to female 7. Any person who by the same means prevents
descendants another from making a will, or from revoking
o Attempt on virtue - no conviction is one already made, or who supplants,
required conceals, or alters the latter's will;
2. Any person who has been convicted of an 8. Any person who falsifies or forges a supposed
attempt against the life of the testator, his or will of the decedent.
her spouse, descendants, or ascendants;
o Covers all stages in the commission of the Revocation of Unworthiness
crime The cause of unworthiness shall be without effect
o Felony must be intentional (so not through if the testator had knowledge thereof at the time he
negligence) made the will, or if, having known of them
o Final conviction required subsequently, he should condone them in writing.
(Art. 1033)
3. Any person who has accused the testator of a
crime for which the law prescribes The unworthiness is set aside in the following
imprisonment for six years or more, if the ways: (Balane, supra)
accusation has been found groundless; 1. A written condonation, or
o Covers filing of the complaint before the 2. The execution by the offended party of a will
prosecutor, presenting incriminating with knowledge of the cause of unworthiness.
evidence, suppressing exculpatory
evidence By Operation of Law – In order to restore the
o The testator must be acquitted disinherited heir to capacity, subsequent
o The accusation must be found to be reconciliation is enough under the rules of
groundless—must state that no crime was disinheritance while under those on unworthiness;
committed or that accused did not commit either a written pardon or a subsequent will is
the crime. required. These rules on disinheritance and
unworthiness would overlap the moment the
4. Any heir of full age who, having knowledge of testator uses one of the acts of unworthiness as a
the violent death of the testator, should fail to cause to disinherit an heir. Such act submits the
report it to an officer of the law within a month, situation to the rules on disinheritance; thus,
unless the authorities have already taken reconciliation renders the disinheritance
action; this prohibition shall not apply to cases ineffective. (Balane, supra)
wherein, according to law, there is no
obligation to make an accusation; Pardon of Acts of Unworthiness (Art. 1033)
o There is no such obligation existing under EXPRESS IMPLIED
our present law Made by the Effected when testator
o Requisites: execution of a makes a will instituting
a. the heir has knowledge of violent document or any the unworthy heir with
death of the decedent; writing in which the knowledge of the
b. the heir is of legal age descendent condones cause of incapacity
the cause of
incapacity

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Cannot be revoked Revoked when the be 5 years from the time the disqualified person
testator revokes the took possession thereof. (Art. 1040)
will or the institution
NOTE: It may be brought by any one who may
Representation in Unworthiness (Balane, have an interest in the succession. (Art. 1040)
supra)
If the person excluded from the inheritance by
reason of the incapacity should be the child or 2. RIGHT OF REPRESENTATION IN
descendant of the decedent, and should have TESTACY AND INTESTACY
children or descendants, the latter shall acquire
his right to the legitime. Representation - a right created by fiction of law,
by virtue of which the representative is raised to
The person excluded shall not enjoy the usufruct the place and the degree of the person
and the administration of the property thus represented, and acquires the rights which the
inherited by his children. (Art. 1035) latter would have if he were living or if he could
have inherited. (Art. 970; Tumbokon v. Legaspi,
NOTE: The extent of representation may be as to G.R. No. 153736)
the legitime and as to the share of the unworthy
heir in the intestate portion. (Balane, supra) In order that representation may take place, it is
necessary that the representative himself be
If the unworthy heir is a brother or sister, his capable of succeeding the decedent. (Art. 973)
children (nephews and nieces of the decedent) will
represent. (Balane, supra) Representation only applies in compulsory and
intestate succession in the direct descending line
Alienations Made by an Excluded Heir (Art. 972) and in one instance in the collateral line
Alienations of hereditary property, and acts of in the case of nephews and nieces representing
administration performed by the excluded heir, brothers and sisters of the deceased (Art. 975)
before the judicial order of exclusion, are valid as
to third persons who acted in good faith. (Art. In the collateral line, the right of representation
1036) extends no further than the nephews and nieces.
Grandnephews and grandnieces are not entitled
NOTE: The validity of the alienation is determined to inherit by right of representation in the collateral
by the good faith or bad faith of the transferee, not line. (In re: Intestate Estates of Delgado & Rustia
of the transferor. (Balane, supra) v. Heirs of Vda. De Damian, G.R. No. 155733)
The co-heirs of the excluded heir have the right to NOTE: There is no representation in testamentary
recover damages from the disqualified heir. (Art. succession and in any type of succession in the
1036) direct ascending line. (Paras, supra)
Right of an Excluded Heir for Indemnity for Instances When Representation Operates
Expenses (PID)
The unworthy heir who is excluded from the 1) Predecease;
succession has the right to demand indemnity for 2) Incapacity or unworthiness;
any expenses incurred in the preservation of the 3) Disinheritance (Paras, supra)
hereditary property, and to enforce such credits as
he may have against the estate. (Art. 1037) NOTE: Representation does not apply in
renunciation. (Art. 977)
Obligations of the Disqualified Heir in
Possession of the Hereditary Property Right of Representation of Illegitimate
Any person incapable of succession, who, Children (Art. 902)
disregarding the prohibition stated in the The rights of illegitimate children set forth in the
preceding articles, entered into the possession of articles on legitimes and intestate succession are
the hereditary property, shall be obliged to return transmitted upon their death to their descendants,
it together with its accessions. (Art. 1038) whether legitimate or illegitimate.
Prescriptive Period Right of representation
The action for a declaration of incapacity and
recovery of the inheritance, devise or legacy shall

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DECEDENT IS A inheritance, devise or legacy, the part assigned to

DECEDENT IS AN
LEGITIMATE the one who renounces or cannot receive his
ILLEGITIMATE CHILD
CHILD share, or who died before the testator, is added or
The right of The right of incorporated to that of his co-heirs, co-devisees, or
representation is representation is co-legatees. (Art. 1015)
given only to granted to both
legitimate legitimate and ELEMENTS OF ACCRETION IN TESTACY (Art.
descendants. illegitimate 1016)
descendants. 1) That two or more persons be called to the
(Art. 992) same inheritance, or to the same portion, pro
indiviso; and
Operation of Representation 2) That one of the persons thus called die before
Per stirpes – The representative or the testator, or renounce the inheritance, or be
representatives receive only what the person incapacitated to receive it.
represented would have received. If there are
more than one representative in the same degree, Meaning of Pro Indiviso (Balane, supra)
then the portion is divided equally, without • Undivided or in common
prejudice to the distinction between legitimate and • Either the co-heirs are instituted without
illegitimate children, when applicable. (Balane, individual designation of shares; or
supra) • The co-heirs are instituted with the
specification that they share equally.
Rules to Qualify as a Representative • The co-heirs are instituted with unequal
1) The representative must be qualified to fractional shares.
succeed the decedent. (Art. 973)
2) The representative need not be qualified to Instances when Accretion operates in
succeed the person represented. (Art. 971) Testamentary Succession (Balane, supra)
3) The person represented need not be qualified 1) Renunciation;
to succeed the decedent. 2) Predecease;
NOTE: The representative does not succeed the 3) Incapacity
person represented but the one whom the person
represented would have succeeded. (Art. 971) NOTE: Provided, only some, not all of the
instituted heirs renounce, predecease, or are
Representation incapacitated to succeed. (Balane, supra)
BY BY NEPHEWS AND
GRANDCHILDREN NIECES ACCRETION IN INTESTACY
If all children are If they survive with In legal succession the share of the person who
disqualified, the their uncles and repudiates the inheritance shall always accrue to
grandchildren inherit aunts, they shall his co-heirs. (Art. 1018)
by representation. inherit from the
(Art. 982) deceased by Occasions for the Operation of Accretion in
representation. Intestacy (Balane, supra)
1) Repudiation or renunciation; (Art. 1018)
If all their uncles and 2) Predecease, only if representation does not
aunts are disqualified take place;
from inheriting 3) Incapacity or unworthiness, only if
(predeceased, representation does not take place
incapacitated or
unworthy, HOWEVER, in case of predecease or incapacity,
disinherited), they representation, if proper, will prevent accretion
inherit in equal from occurring. (Balane, supra)
portions. (Art. 975)
Relatives must be in the same kind of relationship
3. RIGHT OF ACCRETION IN for accretion to take place. This is because of the
TESTAMENTARY SUCCESSION principle of preference of lines in intestate
AND INTESTACY succession. (Balane, supra)
Accretion – A right by virtue of which, when two Co-heirs in the Same Category
or more persons are called to the same

ATENEO CENTRAL
The co-heirs in whose favor accretion occurs must Requirements to Accept or Repudiate and
be co-heirs in the same category as the excluded Inheritance
heir. (Balane, supra) A person may only accept or repudiate an
inheritance once he or she is certain of:
Accretion Must be Proportional 1) The death of the person from whom he is to
The heirs to whom the portion goes by the right of inherit; and
accretion take it in the same proportion that they 2) His right to the inheritance. (Art. 1043)
inherit. (Art. 1019)
Time for Acceptance or Repudiation
General Rule: The heirs to whom the inheritance Within 30 days after the court has issued an order
accrues shall succeed to all the rights and for the distribution of the estate the heir, devisee,
obligations which the heir who renounced or could or legatee shall signify to the court having
not receive it would have had. (Art. 1020) jurisdiction whether they accept or repudiate the
inheritance. If they do not do so within that time,
Exceptions: (Balane, supra) they are deemed to have accepted the
1. In testamentary succession, if the testator inheritance. (Art. 1057)
provides otherwise;
2. If the obligation is purely personal, and hence, Who May Accept or Repudiate
intransmissible General Rule: Any person having the free
disposal of his property may accept or repudiate
Accretion among Compulsory Heirs an inheritance. (Art. 1044)
Among the compulsory heirs the right of accretion
shall take place only when the free portion is left to Exceptions:
two or more of them, or to any one of them and to 1) Minors or incapacitated persons
a stranger. (Art. 1021) Acceptance – By their parents or guardians.
Repudiation – By their parents or guardians
No Accretion in the Legitime with judicial authorization (Art. 1044)
If the part repudiated be the legitime, the other co- 2) Inheritance left to the poor – The right to
heirs shall succeed to it in their own right, and not accept the inheritance shall belong to the
by the right of accretion. (Art. 1021) persons designated by the testator to
determine the beneficiaries and distribute the
Accretion Subordinate to Substitution in property, or in their default, to those
Testamentary Succession mentioned in Article 1030. (Art. 1044)
In testamentary succession, when the right of 3) Corporation, association, institution, or
accretion does not take place, the vacant portion entity as beneficiary (Art. 1045)
of the instituted heirs, if no substitute has been Acceptance – May be made by the lawful
designated, shall pass to the legal heirs of the representatives
testator, who shall receive it with the same Repudiation – May be made by the lawful
charges and obligations (Art. 1022) representatives with judicial authority
4) Literate Deaf-Mutes
Accretion Among Devisees, Legatees and Acceptance and Repudiation –Personally or
Usufructuaries through an agent (Art. 1048)
Accretion shall also take place among devisees, 5) Illiterate Deaf-Mutes (Balane, supra)
legatees and usufructuaries under the same Acceptance – Guardians
conditions established for heirs. (Art. 1023) Repudiation – Guardians with judicial
approval
4. ACCEPTANCE AND
REPUDIATION OF INHERITANCE If the Beneficiary is a Married Woman (Art 1047)
She may either accept or repudiate the inheritance
Characteristics of Acceptance and without her husband’s consent.
Repudiation
1) Free and Voluntary (Art. 1041) Manner of Acceptance of Inheritance (Art.
2) Irrevocable once made and cannot be 1049)
impugned, except in cases vitiating consent or 1) Express Acceptance
when an unknown will appear; (Art. 1056) a. Public Document
3) Retroactive (Art. 777) b. Private Writing

ATENEO CENTRAL
2) Tacit Acceptance – one resulting from acts by 1) If specific heir – whether or not renouncing
which the intention to accept is necessarily heir receives anything, considered as
implied or which one would have no right to do acceptance on the part of the heir. There are
except in the capacity of an heir. It can be two transfers.
presumed from certain acts of the heir such 2) If gratuitous –
as: a. In favor of all his co heirs indiscriminately
a. If the heir sells, donates, or assigns his - there is repudiation because the heir
right to a stranger, or to his co-heirs, or to deemed to have not accepted. Hence,
any of them accretion takes place.
b. If the heir renounces the same, even b. In favor of all co-heirs but in proportion
though gratuitously, for the benefit of one different from those they would receive by
or more of his co-heirs accretion: considered as tacit
c. If he renounces it for a price in favor of all acceptance.
his co-heirs indiscriminately; but if this c. If gratuitous in favor of one or some of his
renunciation should be gratuitous, and co-heirs – deemed conveyance in favor of
the co-heirs in whose favor it is made are the co-heirs specified, hence there is
those upon whom the portion renounced acceptance.
should devolve by virtue of accretion, the 3) If onerously:
inheritance shall not be deemed as a. There is no repudiation
accepted b. Transfer considered to be with
consideration
3) Implied Acceptance - This is acceptance by
inaction. Under Art 1057, to signify There are also tax implications because there are
acceptance or repudiation within 30 days after two transfers.
an order of distribution by the probate court.
Effects of Repudiation Compared to
Forms of Repudiation (Art. 1051) Predecease and Incapacity
The repudiation of the inheritance shall be made 1) Representation does not apply to repudiation
in: unlike in predecease and incapacity. (Art.
1) A public document signed before a notary 976)
public, or 2) Accretion is more relevant in repudiation
2) Authentic instrument – equivalent to an because there is no representation in
indubitable writing or a writing whose repudiation.
authenticity is admitted or proved, or a) In case of predecease or incapacity,
3) By a petition presented to the court having accretion will be prevented if
jurisdiction over the testamentary or intestate representation is proper.
proceedings.
• The law considers that the act of repudiation PARTITION AND DISTRIBUTION OF ESTATE
is more solemn that the act of acceptance and
that repudiation produces more violent and PARTITION (Art. 1079, 1082)
disturbing consequences. The separation, division and assignment of a thing
• If the heir repudiates the inheritance to the held in common among those to whom it may
prejudice of his own creditors, the latter may belong. It includes every act which is intended to
petition the court to authorize them to accept put an end to indivision among co-heirs, and
it in the name of the heir. legatees or devisees, although it should purport to
• If an heir is both a testate and legal heir, be a sale, exchange, compromise, or any other
repudiation of the inheritance as a testate heir, transaction. It is not subject to any form.
he is understood to have repudiated in both
capacities. However, should he repudiate as Who May Effect Partition
a legal heir, without knowledge of being a 1. Decedent himself during his lifetime by an act
testate heir, he may still accept the inheritance inter vivos or by will (Art. 1080)
as a legal heir. 2. Heir themselves (Art. 1083)
3. Competent court (Art. 1083)
If renounced in favor of other heirs, does it 4. Third person designated by the decedent (Art.
mean acceptance? (Balane, supra) 1081)
It depends:
Who Can Demand Partition (Art. 1083)

ATENEO CENTRAL
1. Compulsory heir; • Confers upon each heir the exclusive

2. Voluntary heir; ownership of the property adjudicated. (Art.
3. Legatee or devisee; 1091)
4. Any person who has acquired interest in the • After the partition, the co-heirs shall be
estate reciprocally bound to warrant the title to
(warranty against eviction) and the quality of
When Partition Cannot be Demanded (PAPU) (warranty against hidden defects), each
1. When expressly Prohibited by the testator property adjudicated. (Art. 1092)
himself for a period not exceeding 20 years; • The obligation of warranty shall cease in the
(Art. 1083) following cases: (Art. 1096)
2. When the co-heirs Agreed that the estate 1. When the testator himself has made the
shall not be divided for a period not exceeding partition unless his intention was
10 years, renewable for another 10 years; otherwise, but the legitime shall always
3. When Prohibited by law; remain unimpaired.
4. When to partition the estate would render it 2. When it has been expressly stipulated in
Unserviceable for the use for which it is the agreement of partition, unless there
intended. has been bad faith.
3. When the eviction was due to a cause
NOTE: subsequent to the partition, or has been
• Partition Inter Vivos (Art. 1080) – it is one caused by the fault of the distributee of
that merely allocates specific items or pieces the property.
of property on the basis of the pro indiviso
shares fixed by law or given under the will to As between the deed of extra-judicial partition and
heirs or successors. the subdivision plan which contained an
• Partition is not itself a mode of acquiring inadvertent error, the deed of extra-judicial
ownership, nor a title, but being predicated on partition must prevail. The subdivision plan cannot
succession, necessitates relationship to the amend the deed of extra-judicial partition because
decedent (in case of intestacy) or a will duly that is the binding contract to which all the heirs
probated (in case of testacy). agreed. (Ulay v. Bustamante, G.R. Nos. 231721 &
231722, J. Caguioa ponencia)
Prohibition to Partition (Art. 1083)
1. The prohibition to partition for a period not Effects of Inclusion of Intruder in Partition (Art.
exceeding 20 years can be imposed on the 1105)
legitime. 1. Between a true heir and several mistaken
2. If the prohibition to partition is for more than heirs – Partition is VOID
20 years, the excess is void. 2. Between several true heirs and a mistaken
3. Even if a prohibition is imposed, the heir’s heir – transmission to mistaken heir is VOID
mutual agreement can still make the partition. 3. Through error or mistake; share of true heir is
allotted to mistaken heir – partition shall not be
Legal Redemption In Favor Of Co-Heirs (Art. rescinded unless there is bad faith or fraud on
1623) the part of the other persons interested, but
The right of legal redemption predicated upon the the latter shall be proportionately obliged to
fact that the sale made by the co-heir is effected pay the true heir of his share
before the partition of the estate but after the death
of the decedent. NOTE: Partition with respect to the mistaken heir
is VOID. (Art. 1105)
Requisites: (Aguilar v. Aguilar, G.R. No. 141613)
1. There must be several co-heirs A Void Will may be a Valid Partition (Paras,
2. That one of them sells his right to a stranger supra)
3. That the sale is made before the partition 1. If the will was in fact a partition; and
4. That the right of redemption must be 2. If the beneficiaries in the void will were legal
exercised by one or more of the co-heirs heirs
within 1 month from the time they were notified
in writing by the co-heir vendor RESCISSION AND NULLITY OF PARTITION
5. The vendee is reimbursed for the price of the
sale. A partition, judicial or extra-judicial, may also be
rescinded on account of lesion, when any one of
EFFECTS OF PARTITION the co-heirs received things whose value is less,

ATENEO CENTRAL
by at least one-fourth, than the share to which he Exception: Bad faith or fraud on the part of the
is entitled, considering the value of the things at other persons interested. (Art. 1104)
the time they were adjudicated. (Art. 1098)
Remedy: The other persons interested shall be
Partition Made By the Testator (Art. 1099) proportionately obliged to pay to the person
omitted the share which belongs to him. (Art.
General Rule: A partition made by the testator 1104)
cannot be impugned on the grounds of lesion.
Exceptions:
1. When the legitime of the compulsory heirs is
prejudiced; or
2. When it appears or may reasonably be
presumed, that the intention of the testators
was otherwise.
Options Available to Obligor-Heir (Art. 1101)

The heir who is sued shall have the option of:
1. Indemnifying the plaintiff for the loss, by
payment in cash or by delivery of a thing of the
same kind and quality as that awarded to the
plaintiff; or
2. Consenting to a new partition
NOTE: If a new partition is made, it shall affect

neither those who have not been prejudiced
nor those who have not received more than
their just share. (Art. 1101)
Remedy of an Heir Who has Alienated the

Property Adjudicated to Him
An heir who has alienated the whole or a
considerable part of the real property adjudicated
to him cannot maintain an action for rescission on
the ground of lesion, but he shall have a right to be
indemnified in cash. (Art. 1102)
Incompleteness of Partition Not a Ground for

Rescission
The omission of one or more objects or securities
of the inheritance shall not cause the rescission of
the partition on the ground of lesion, but the
partition shall be completed by the distribution of
the objects or securities which have been omitted.
(Art. 1103)
Omission of a Compulsory Heir in the Partition

General Rule: A partition made with preterition of
any of the compulsory heirs shall not be rescinded.
(Art. 1104)
NOTE: This is not preterition under Article 854.

This is simply an omission of a compulsory heir in
the partition, the assumption being that something
is left for him in the form of an undisposed portion
of the estate. The omitted heir simply gets his
rightful share. (Non v. CA, G.R. No. 137287)

ATENEO CENTRAL
PERIODS TO REMEMBER ON PARTITION
20 years (Art. 1083) Maximum period testator can prohibit alienation of

dispositions
5 years from delivery to the State (Art. 1014) To claim property escheated to the State
5 years from the time disqualified person took Action for declaration of incapacity & for recovery of
possession (Art. 1040) the inheritance, devise or legacy
30 days from issuance of order of distribution (Art. Must signify acceptance/repudiation otherwise,
1057) deemed accepted
1 month form written notice of sale (Art. 1088) Right to repurchase hereditary rights sold to a stranger
by a co-heir
10 years (Art. 1094) To enforce warranty of title/quality of property

adjudicated to co-heir from the time right of action
accrues
5 years from partition (Art. 1095) To enforce warranty of solvency of debtor of the estate
at the time partition is made
4 years from partition (Art. 1100) Action for rescission of partition on account of lesion
----------end of topic----------

ATENEO CENTRAL

ATENEO CENTRAL
OBLIGATIONS AND CONTRACTS I. OBLIGATIONS
TOPIC OUTLINE UNDER THE SYLLABUS A. GENERAL PROVISIONS

A. OBLIGATIONS 1. Definition
1. General Provisions
i. Definition An obligation is a juridical necessity to give, to do or
ii. Essential Elements not to do. (Art. 1156, CIVIL CODE)
iii. Sources of Obligation
2. Nature and Effect
2. Essential Elements of an Obligation
i. Breaches of Obligations
ii. Remedies for Breach of
(Arts. 1156 – 1162, CIVIL CODE) (PAVO)
Obligation
1. Passive Subject (obligor/debtor) – the person
3. Different Kinds of Obligations
4. Extinguishment of Obligations who has the duty of giving, doing or not doing;
i. Payment person bound to the fulfillment
ii. Loss of the Thing Due 2. Active Subject (obligee/creditor) – the person in
iii. Condonation whose favor the obligation is constituted;
iv. Confusion person entitled to make a demand
v. Compensation 3. Vinculum Juris/ Legal Tie – the efficient cause
vi. Novation or the juridical tie between two subjects by
B. CONTRACTS reason of which the debtor is bound in favor of
1. General Provisions the creditor to perform the obligation. It can be
i. Definition of a Contract
established by various sources of obligations
ii. Elements of a Contract
(law, contract, quasi-contracts, delicts, and
2. Basic Principles of Contracts
i. Obligator Force of a quasi-delicts) and may arise either from bilateral
Contract or unilateral acts of persons.
ii. Freedom to Stipulate 4. Object/ Subject Matter – the prestation or
iii. Binding Effect of a conduct which has to be observed by the
Contract debtor/obligor; to be valid, it must be:
iv. Privity of Contract (LiPoDeM):
v. Consensuality of a. Licit
Contracts b. Real or Possible
3. Essential Requisites of a Contract c. Determinate/ Determinable
i. Consent
d. Must be within the commerce of men
ii. Object
iii. Cause or Consideration (i.e. susceptible of appropriation and
4. Defective Contracts transmissible from one person to
i. Rescissible Contracts another) (DESIDERIO P. JURADO,
ii. Voidable Contracts COMMENTS AND JURISPRUDENCE
iii. Unenforceable Contracts ON OBLIGATIONS AND
iv. Void Contracts CONTRACTS 457 (2010))
C. NATURAL OBLIGATIONS
D. QUASI-CONTRACTS In certain kinds of obligations, the following may
constitute additional requirements:
NOTE: This portion may still be subject to
5. Form – in formal contracts where form is
issued, if necessary.
necessary for validity, e.g., donation
6. Delivery or Tradition – real contracts where
delivery is necessary for perfection of the
obligation, e.g., deposit, commodatum, loan
(ERNESTO L. PINEDA, OBLIGATIONS AND
CONTRACTS 412 (2009))

ATENEO CENTRAL
3. Sources of Obligations its purpose, the payment of indemnity to the end that
no one shall be unjustly enriched or benefited at the
Obligations arise from: (L-CQAQ) expense of another (Art. 2142, CIVIL CODE).
1. Law;
2. Contracts; DELICTS (OBLIGATION EX MALEFICIO OR EX
3. Quasi-contracts; DELICTO)
Every person criminally liable for a felony is also
4. Acts or omissions punished by law; and
civilly liable (Art. 100, RPC).
5. Quasi-delicts (Art. 1157, CIVIL CODE)
Such civil liability is a necessary consequence of
NOTE: The list is exclusive (Sagrado Orden v. criminal responsibility, and is to be declared and
Nacoco, G.R. No. L-37756, 1952). generally enforced in the criminal proceeding
EXCEPT where:
LAW (OBLIGATION EX LEGE) a. the injured party reserves his right to avail
Law is both the ultimate source of all obligations and himself of it in a distinct civil action or
one of the various proximate sources of obligations. b. in cases where an independent civil action is
Many obligations arise directly or proximately from allowed by law (Art. 33, CIVIL CODE; Rule 110,
law, without any contractual transaction or tortious § 1, RULES OF CRIMINAL PROCEDURE).
or criminal act, or any conduct which may constitute
a quasi-contract. (RUBEN F. BALANE, JOTTINGS Scope of civil liability
AND JURISPRUDENCE IN CIVIL LAW 1. Restitution
(OBLIGATIONS AND CONTRACTS) 21 (2020). 2. Reparation for damage caused
3. Indemnity for consequential damages (Art.
The law cannot exist as a source of obligation, 104, RPC).
unless the acts to which its principles may be
applied exist. Once the acts or facts exist, the Effect of acquittal in criminal case
obligations arising therefrom by virtue of the express General Rule: The acquittal of the accused in the
provisions of the law are entirely independent of the criminal case due to the prosecution’s failure to
agreement of the parties (Manila Trading & Supply prove guilt beyond reasonable doubt does not
Co. v. Saez, G.R. No. 4386, 1938).
prejudice the civil action, in which the offended party
It must be expressly or impliedly set forth and may still be able to recover damages by a mere
cannot be presumed. Only those expressly preponderance of evidence (Art. 29, CIVIL CODE).
determined in the code or in special laws are
demandable (Art. 1158, CIVIL CODE). Exception: Where the judgment of acquittal
contained a declaration that no negligence can be
CONTRACTS (OBLIGATIONS EX CONTRACTU) attributed to the accused and that the fact from
A contract is a meeting of minds between two
which the civil action might arise did not exist
persons whereby one binds himself, with respect to
the other, to give something or to render some (Castillo v. CA, G.R. No. 48541, 1989).
service. It is the formal expression by the parties of
their rights and obligations they have agreed upon Extinguishment of liability
with respect to each other (HECTOR S. DE LEON The civil liability for crimes is extinguished by the
& HECTOR M. DE LEON, JR., COMMENTS AND same causes provided by the Civil Code for the
CASES ON OBLIGATIONS AND CONTRACTS 13 extinguishment of other obligations (Rule 4, § 4,
(2014)). RULES OF CIVIL PROCEDURE).
Obligations arising from contracts have the force NOTE: Death of the accused during the pendency
and effect of law between the parties and should of the case can extinguish the civil liability if the
be complied with in good faith (Art. 1159, CIVIL same arose directly from the crime committed.
CODE). However, this does not apply if civil liability can be
based on another source of obligation (i.e., law on
QUASI-CONTRACTS (OBLIGATIONS EX QUASI- human relations) (Asilo, Jr. v. People, G.R. Nos.
CONTRACTU) 159017-18 & 159059, 2011).
Definition QUASI-DELICTS/TORTS (OBLIGATION EX

Quasi-contracts are juridical relations resulting from QUASI-DELICTO OR EX QUASI MALEFICIO)
lawful, voluntary and unilateral acts, which has for

ATENEO CENTRAL
It is an act or omission arising from fault or cannot be based on quasi-delict (Philippine

negligence, which causes damage to another, there School of Business v. Court of Appeals,
being no pre-existing contractual relations between G.R. No. 84698, 1992). In Air France, what
the parties (Art. 2176, CIVIL CODE). was punished was the company’s racist
policy which emboldened the manager to
Elements: (ADD) expel the Filipino from first class because a
1. That there exists a wrongful Act or omission white man had a better right to the seat.
imputable to the defendant by reason of his fault
or negligence; Air France would apply if the act which
2. That there exists a Damage or injury, which breaches a contract was done in bad faith
must be proved by the person claiming and amounts to a violation of Article 21 of
recovery; the Civil Code.
3. That there must be a Direct causal connection
or a relation of cause and effect between the B. NATURE AND EFFECTS OF
fault or negligence and the damage or injury; or OBLIGATIONS
that the fault or negligence be the cause of the
damage or injury (Art. 2176, CIVIL CODE; Obligation to Give
Taylor v. Manila Electric Co., G.R. No. L4977,
1910). Duties of a Debtor in an Obligation To Give
1. To give a determinate thing (Arts. 1163, 1164 &
Negligence: Failure to observe for the protection of 1166, CIVIL CODE)
the interests of another person, that degree of care, a. To deliver the thing itself; (Art. 1163,
precaution and vigilance, which the circumstances CIVIL CODE)
justly demand, whereby such other person suffers b. To preserve or take care of the thing
injury (US v. Barias, G.R. No. L-7567, 1908). due with the diligence of a good father
of a family (i.e., that standard of care
Test of Negligence: “Would a prudent man, in the which an owner would give to his own
position of the person to whom negligence is property), unless the law requires or
attributed, foresee harm to the person injured as a the parties agree otherwise; (Art. 1163,
reasonable consequence of the course about to be CIVIL CODE)
pursued?” (Picart v. Smith, G.R. No. L-12219,
1918). The law or contractual stipulation may
require a different degree of diligence:
Quasi-delict as a cause of action despite a pre- greater or extraordinary diligence
existing contractual relation (diligentia exactissima), or less or slight
➢ General Rule: Actions based on breach of diligence (diligentia levissima).
contract and actions based on quasi-delicts (RUBEN F. BALANE, OBLIGATIONS
differ in terms of conditions, defenses, and AND CONTRACTS 63 (2020))
proof. They cannot co-exist (Orient Freight v.
Keihin, G.R. No. 191937, 2017). c. To deliver fruits, whether civil,
➢ Exceptions: industrial, or natural fruits (obligor is
a. When such a contractual relation exists, the liable for fruits only from the time the
obligor may break the contract that the obligation to deliver arises); and
same act which constitutes a breach of the d. To deliver accessions and accessories
contract would have constituted the source (Art. 1166, CIVIL CODE)
of an extra-contractual obligation, had no Accessions – incorporated or
contract existed between the parties attached to the object to form part
(Cangco v. Manila Railroad Co., G.R. No. of the principal.
L-12191, 1918); Accessories – added for
completion, use perfection or
b. The act that breaks the contract may also embellishment.
be a tort (Air France v. Carrascoso, G.R.
No. L-21438, 1966). 2. To give a generic thing (Art. 1246 & 1170, CIVIL
CODE)
NOTE: When the obligation is based on a a. To deliver the thing of the quality
contract, without which the obligation does intended by the parties, taking into
not exist, the cause of action must be consideration the purpose of the
founded on the breach of contract and obligation, intent of the parties, and

ATENEO CENTRAL
other circumstances. (Art. 146, CIVIL enforceable against the whole world arises in his
CODE) favor until delivery. It is not by agreement alone,
b. To pay damages in case of breach of but by delivery that ownership is transferred.
the obligation. (Art. 1170, CIVIL (RUBEN F. BALANE, OBLIGATIONS AND
CODE) CONTRACTS 66 (2020))
Obligation to Do or Not To Do Transmissibility of Obligations
Rights of a Creditor in an Obligation To Do or General Rule: All rights acquired in virtue of an

Not To Do obligation are generally transmissible (Art. 1178,
1. To do (Positive Personal) CIVIL CODE)
a. The obligee is entitled to have the thing
done in a proper manner, by himself or
Exception: Rights acquired in virtue of an obligation
by a third person, at the expense of the
are NOT transmissible when:
obligor;
1. Prohibited by law – Examples:
b. To demand what has been poorly done
a. Contract of partnership (Art. 1767,
be undone;
CIVIL CODE)
c. To recover damages because of
b. Contract of agency (Art. 1868,
breach of the obligation. (Art. 1167,
CIVIL CODE)
CIVIL CODE)
c. Contract of commodatum (Art.
1933, CIVIL CODE)
2. Not to do (Negative Personal)
2. Prohibited by stipulation of the parties, as long
a. To have the thing undone at the
as it is not contrary to public policy.
expense of the obligor; and/or
3. The obligation is purely personal in nature —
b. To ask for damages. (Art. 1168, CIVIL
when the obligor’s personal qualifications and
CODE)
skill was the motive behind the contract.
PERSONAL RIGHT REAL RIGHT Performance of Obligations

Jus ad rem, a right Jus in re, a right
enforceable only enforceable against The obligation arises:
against a definite the whole world 1. Pure obligation: Upon demand (Art. 1179,
person or group of
CIVIL CODE)
persons
2. Obligations with Suspensive
Right pertaining to a Right pertaining to a
person to demand from person over a Condition/Period
another, as a definite specific thing, without a
passive subject, the definite passive General Rule: Only from the time the
fulfillment of the subject against whom condition/period is fulfilled, but the
prestation to give, to do the right may be obligation retroacts to the day of its
or not to do. personally enforced constitution. (Art. 1187, CIVIL CODE)
(ERNESTO L. PINEDA, OBLIGATIONS AND
CONTRACTS 15 (2009)) Exception: Regarding fruits and
interests in reciprocal obligations (even
NOTE: The creditor has a right to the fruits of the if the two reciprocal obligations are not
thing from the time the obligation to deliver it of the same value), the parties are
arises. However, he shall acquire no real right deemed as mutually compensated
over it until the same has been delivered to him. during the pendency of the condition.
(Art. 1164, CIVIL CODE)
Thus, there is no liability to account for
fruits and interests in reciprocal
NOTE: Nature of creditor’s right to fruits obligations. For unilateral obligations,
before delivery the debtor shall appropriate the fruits
In accordance with the second sentence of the and interests received, unless it was
article, before the fruits are delivered to him, the intended otherwise.
creditor’s right to the fruits (in cases where he is
entitled to him) is purely personal (i.e. exclusively 3. Obligations subject to a Resolutory
against the debtor, his successors, or assigns). Condition/Period: No obligation to deliver
Rule: No real right of ownership or possession fruits since performance or delivery is

ATENEO CENTRAL
immediate, subject to its resolution upon the

happening of the condition/period. (Art. 1187, Types of Fraud
CIVIL CODE) INCIDENTAL CAUSAL
(Dolo incidente; ART. (Dolo Causante;
1. Breaches of Obligations 1170) ART. 1338)
Present during the Present before or
Causes of Breach performance of a simultaneously with the
1. Incidental Fraud (Dolo incidente) preexisting obligation perfection of a contract
2. Negligence (Culpa) Purpose is to evade Purpose is to secure
3. Default / Delay (Mora) the normal fulfillment of the consent of another
4. Contravention of Terms (Art. 1170, CIVIL the obligation to enter into the
CODE) contract
Results in the breach Results in vitiation of
of an obligation consent; voidable
There is breach when the obligor fails without
contract
legal excuse (such as fortuitous events) to
Gives rise to a right in Gives rise to a right of
perform any promise, which forms the whole or favor of the obligee to an innocent party to
part of an obligation. (Guanio v. Makati ShangriLa sue for specific annul the (voidable)
and Resort, Inc., G.R. No. 190601, 2011; R.S. performance or contract
Tomas Inc. v. Rizal Cement Co. Inc., G.R. rescission, with
No.173155, 2012) damages in either
case.
Breach (DESIDERIO P. JURADO, COMMENTS AND
SCOPE OF BASIS OF
Arising JURISPRUDENCE ON OBLIGATIONS AND
LIABILITY LIABILITY
From: CONTRACTS 63 (2010))
Liable for all Actual
consequences of knowledge or NOTE: Future fraud CANNOT be waived. However,
act, whether awareness of the the law does NOT prohibit renunciation of the action
foreseen or cause for damages on the ground of past fraud. (Art. 1171,
unforeseen (e.g., CIVIL CODE)
DOLO
loss of profits) (Art. 2201, CIVIL
CODE; Legaspi NEGLIGENCE (CULPA)
(Art. 2201, CIVIL Oil Co., Inc. v. Any voluntary act or omission, there being no malice
CODE) CA, G.R. No. which prevents the normal fulfillment of an
96595, 1993) obligation. (DE LEON, 58 (2014))
Liable only for Possibility of
those foreseen, knowledge or Consists in the omission of that diligence which is
or could have awareness required by the nature of the obligation and
foreseen (ought or could corresponds with the circumstances of the persons,
CULPA
have foreseen) of the time and of the place (Art. 1173, CIVIL CODE)
(Art. 2201, CIVIL
CODE) (Art. 2201, CIVIL FRAUD NEGLIGENCE
CODE) There is deliberate There is no deliberate
No liability – Absence of intention to cause intention to cause
unforeseen or possibility of damage damage
even if foreseen, knowledge Liability cannot be Liability may be
is unavoidable (could not be mitigated mitigated (Art. 1173,
FORTUI
foreseen or if Civil Code)
TOUS
(Art. 1174, CIVIL foreseen, could Must be clearly proved Presumed from the
EVENT
CODE) not be avoided) breach of a contractual
obligation
(Art. 1174, CIVIL Waiver for future fraud Waiver for future
CODE) is void (Art. 1171, Civil negligence may be
Code) allowed in certain
INCIDENTAL FRAUD (DOLO INCIDENTE) cases
Fraud is the deliberate or intentional evasion of the (DE LEON 62 (2014))
normal fulfillment of an obligation. (8 Manresa, 5th
Ed., Book, 1, 72)

ATENEO CENTRAL
NEGLIGENCE CRIME performance of an

Any act with fault or Acts punishable by law obligation
negligence (Art. 1173, (Art. 3, RPC) Generally, there is no There is a preexisting
Civil Code) preexisting contractual contractual relation
Criminal intent Criminal intent obligation
unnecessary necessary Source of the Source of the
Damages may be Some crimes do NOT obligation is the obligation is the breach
awarded to injured give rise to civil liability negligence itself (Art. of the contractual
party 2176, CIVIL CODE) obligation (Arts. 1170-
Violation of private Violation of public and 1174; 2201, CIVIL
rights private rights CODE)
Preponderance of Proof beyond Negligence must be Proof of existence of
evidence reasonable doubt proved the contract and its
Can be compromised Criminal liability cannot breach is prima facie
as any other civil be compromised sufficient to warrant
liability recovery
Presumption of Presumption of For the negligence of For the negligence of
negligence innocence an employee, diligence an employee, diligence
(DE LEON 27 (2014)) in the selection and in the selection and
supervision of the supervision of the
NOTE: On the Presumption of negligence employees is a employees is NOT
This article creates a rebuttable presumption of defense of the available as a defense
culpability when the thing to be delivered is lost employer of the employer
while in the debtor’s possession. This article is quite (EDGARDO L. PARAS, CIVIL CODE OF THE
consistent with the duty imposed in Art. 1163 to take PHILIPPINES ANNOTATED: PRESCRIPTION;
care of the thing with the diligence of a good father OBLIGATIONS AND CONTRACTS 144-145
of the family. The intervention of a fortuitous event (2016))
as a causative factor of the loss is something for the
debtor to prove. Rule on Standard of Care
1. That which the law requires; or
Generally, the debtor can overcome the 2. That stipulated by the parties; or
presumption of fault by proving fortuitous event. 3. In the absence of the above, diligence of a
o Exceptionally, the debtor’s liability is not good father of a family. (Art. 1163, CIVIL CODE)
taken away in case of a fortuitous event if
he has incurred in delay or promised the However, parties cannot stipulate that there
same thing to two or more persons. In these would be absolute exemption from liability for
cases, he becomes an insurer of the thing. any fault or negligence, since it is against public
(BALANE 402 (2020)) policy. (Heacock vs. Macondray, G.R. No. L-
16598, 1921; Art. 1306, 1744, 1745, CIVIL
Kinds of Negligence CODE)
1. Quasi-Delict (Culpa aquiliana/culpa extra
contractual) – source of obligation; wrong or Diligence of a good father of a family – ordinary
negligence committed independent of contract care or that diligence which an average or
and without criminal intent reasonably prudent person would exercise over his
own property (DE LEON 34 (2014))
2. Contractual Negligence (Culpa Contractual)
– wrong or negligence in the performance of an Standard of care of disabled person
obligation or contract A disabled person is required to use the same
degree of care that a reasonably careful person
3. Criminal Negligence (Culpa Criminal) – having the same disability would use. Physical
wrong or negligence in the commission of a handicaps are treated as part of the circumstances
crime (DE LEON 65-66 (2014)) under which a reasonable person must act. Thus,
the standard of conduct for a blind person becomes
CULPA AQUILIANA CULPA that of a reasonable person who is blind. (Francisco
CONTRACTUAL v. Chemical Bulk Carriers, Incorporated, G.R. No.
Negligence is Negligence merely an 193577, 2011)
substantive and incident of Instances where the law requires a higher
independent standard of care

ATENEO CENTRAL
• Banks – as a business affected with public D promised to pay C the sum of P20,000.00
interest, and because of the nature of its on or before November 30 without the need
functions, banks are under obligation to treat of any demand. Therefore, if D fails to pay
the accounts of its depositors with meticulous on November 30, he is automatically in
care, always having in mind the fiduciary nature default. In this case, the parties stipulate to
of their relationship. (Simex v. CA, G.R. No. dispense with the demand. (DE LEON 46
88013, 1990) (2019))
Exception: Extraordinary diligence does not When the law so provides:

cover transactions outside bank deposits, i.e. Under the law, taxes should be paid on or
commercial transactions. (Reyes v. CA, G.R. before a specific date; otherwise, penalties
No. 94214) and surcharges are imposed without the
need of demand for payment by the
• Realty Corporations – A corporation engaged government.
in the buying and selling of real estate is
expected to exercise a higher standard of care The partner is liable for the fruits of the thing
and diligence in ascertaining the status and he may have promised to contribute to the
condition of the property subject of its business partnership from the time they should have
transaction. Similar to investment and financing been delivered without the need of any
corporations, it cannot simply rely on an demand. (DE LEON 47 (2019))
examination of a Torrens certificate to
determine what the subject property looks like, 2. Time is of the essence
as its condition is not apparent in the document.
(Eagle Realty Corp. v. Republic, G.R. No. Examples:
151424, 2009) • The delivery of balloons on a particular date
when a children’s party will be held;
• Common Carriers – from the nature of their • The making of a wedding dress where the
business and for reasons of public policy, wedding is scheduled at a certain time;
common carriers are bound to observe • Payment of money at a particular time so
extraordinary diligence in the vigilance over the that the creditor could pay off certain debts
goods and for the safety of the passengers due on the same date;
transported by them, according to all the • The delivery of a car to be used in a trip at
circumstances of each case. (Art. 1733, CIVIL a particular time; etc. (DE LEON 47 (2019))
CODE)
3. Demand would be Useless (Art. 1169, CIVIL
Effects of contributory negligence of the obligee CODE)
• General rule: Reduces or mitigates the
damages which he can recover. Examples:
• Exception: If the negligent act or omission of S obliged himself to deliver a specific horse to
the creditor is the proximate cause of the event, B on December 5. Through S’s negligence or
which led to the damage or injury complained deliberate act, or by reason of a fortuitous event
of, he cannot recover. (Art. 2179, CIVIL CODE) for which S has expressly bound himself
responsible (see Art. 1174), the horse died on
DEFAULT OR DELAY (MORA) December 2.
General rule: Those obliged to deliver or to do
something incur in delay from the time the obligee Under this situation, any demand for the
judicially or extrajudicially demands from them the delivery of the horse on December 5 would be
fulfillment of their obligation. (Art. 1169, CIVIL useless as S has made it impossible for him to
CODE) perform his obligation.
Exception: Demand by the creditor NOT necessary Demand is also unnecessary where it is
when: (LTU) apparent that it would be unavailing, as where
1. Law or obligation expressly declares so;
there has been a prior absolute refusal by S
Examples: (see 13 C.J. 661.) or S has manifested an
intention not to comply with his obligation. (DE
When the obligation so provides: LEON 48-49 (2019))

ATENEO CENTRAL
Requisites to be in delay: (Art. 1169, CIVIL 1. Mora solvendi – delay or default committed by
CODE) obligor
1. Obligation is Demandable 2. Mora accipiendi – delay or default committed
2. Debtor Delays performance by oblige
3. Creditor Demands performance judicially or 3. Compensatio Morae – default of both obligor
extrajudicially and obligee (JURADO 457 (2010))
NOTE: In reciprocal obligations, a party does not CONTRAVENTION OF THE TENOR OF THE
incur in delay if the other party is not ready or willing OBLIGATION
to assume and perform the obligation imposed upon This refers to failure to comply with the terms of the
him/her (Art. 1169, CIVIL CODE) obligation, and will require dolo, culpa or delay as
the cause of the failure to comply, in order to
NOTE: In reciprocal obligations, if the period for the constitute a breach. (Art. 1170, CIVIL CODE;
fulfillment of the obligation is fixed, demand by the JURADO, 74 (2010))
obligee is still necessary before the obligor can be
considered in default and before a cause of action Defense against breach: FORTUITOUS EVENTS
for rescission will accrue. (Solar Harvest v. Davao
Corrugated Carton Corporation, G.R. No. 176868, Requisites of Fortuitous Events (NIIU)
2010) 1. Event must be Independent of obligor’s will;
2. Event is Unforeseeable or unavoidable
The power to rescind is implied in reciprocal 3. Such event renders it Impossible for the debtor
obligations. In Lam v. Kodak (2016), although there to perform (not only makes it difficult, but
was no stipulation, the court ruled that since both impossible)
parties exercised their right to resolve under Art. 4. No contributory negligence (Lasam v. Smith,
1191, judicial rescission is not necessary because G.R. No. L-19495, 1924)
the power to resolve is implied in reciprocal
obligations. (Lam v. Kodak, G.R. No. 167615, 2016; General rule: Loss due to fortuitous events shall
see discussion on Nissan Car Lease v. Lica extinguish the obligation (Art. 1174, CIVIL CODE)
Management, Jan. 13, 2016 under “Void or
Inexistent Contracts”) Exceptions: (SALTD-G)
1. If by Law the obligor is liable even for fortuitous
The use of a credit card to pay for a purchase is only event
an offer to the credit card company to enter a loan 2. If by Stipulation the obligor is liable even for
agreement with the credit card holder. Before the fortuitous event
credit card issuer accepts this offer, no obligation 3. If the nature of the obligation requires the
relating to the loan agreement exists between them. Assumption of the risk (Art. 1174, CIVIL CODE)
A demand presupposes the existence of an
obligation between the parties. (Pantaleon v. Example:
American Express International, Inc., G.R. No. D insured his house against fire for
174269, 2009) P500,000.00 with R, an insurance company.
Later, the house was destroyed by accidental
If the contract stipulates that “the project is fire.
estimated to be completed in 6 years,” failure to
finish the project in 6 years does not put the obligor Although the cause of the loss is a fortuitous
in delay. Mere estimate cannot be considered a event, D may recover the amount of the policy.
period or a day certain. (Salonte v. COA, et al., G.R. In a contract of insurance, the insurer (R), in
No. 207348, 2014) consideration of the premium paid by the
insured (D), undertakes to indemnify the latter
NOTE: for the loss of the thing insured by reason of the
• A reminder is not equivalent to a demand. peril insured against even if the cause of the
• Premature demand does not give rise to default. loss is a fortuitous event. Here, risk of loss or
• If there is no fixed due date, or when the debtor damage is an essential element in the
promises to pay when his means permit him to obligation. (DE LEON 78-79 (2019))
do so, there can be no default unless a deadline
is fixed by the parties or the court. 4. If the loss of the thing occurs after the obligor
incurred in Delay; and
Kinds of delay

ATENEO CENTRAL
5. If the obligor promised to deliver the same thing 2. Remedies Available to Creditor in
to Two or more persons who do not have the Cases of Breach
same interest (Art. 1165, CIVIL CODE)
6. If the thing to be delivered is Generic 1. Specific Performance – requiring delivery or
performance of the obligation.
Declaration of martial law, per se, is not a fortuitous
event. While a lot of businesses suffered financial Can be combined with damages, but
reverses during this period, it could not be used as inconsistent with the remedy of resolution or
a defense when sued for collection of debts validly cancellation. (Magdalena Estate, Inc. v. Myrick,
incurred. (Philippine Free Press v. CA, G.R. No. G.R. No. L-47774, 1941)
132864, 2005)
Can be pursued successively (but not
The Asian Debt Crisis in 1997 is not a fortuitous simultaneously) with resolution or cancellation;
event. A real estate company engaged in preselling if initial action is for specific performance and
of condominium units should have been able to obligor does not or cannot deliver, courts have
assess foreign exchange risks. The fluctuating allowed obligee to pursue resolution or
movement of the Philippine Peso in the FX market cancellation. (Art. 1191, CIVIL CODE)
is a daily occurrence, so Megaworld cannot claim
fortuitous events as an excuse for non-delivery of This is NOT a remedy in an obligation “Not to
units. (Megaworld Globus Asia Inc. v. Tanseco, G.R. do” that has been breached since the prohibited
No. 181206, 2009) act has been done. (DE LEON 44 (2014))
The Christmas season cannot be cited as an act of 2. Damages – can be combined with any remedy
God that would excuse a delay in the processing of or pursued independently – also available in
claims by a government entity that is subject to breach of any prestation. (Art. 1191, CIVIL
routine accounting and auditing rules. (MIAA v. ALA CODE)
Industries Corp, G.R. No. 147349, 2004)
3. Substitute Performance – ask others to
The sudden act of a passenger who stabbed perform and charge the cost to the obligor (Arts.
another passenger in the bus is within the context of 1165-1168, CIVIL CODE)
force majeure. But before common carrier may be
absolved, it is not enough that the accident was Not available in:
caused by force majeure. The common carrier must a) Obligation to give specific things (already
still prove that it was not negligent in causing set apart from class or genus to which it
injuries. (Bachelor Express, Inc. v. CA, G.R. No. belongs); (Art. 1165, CIVIL CODE)
85691, 1990) b) Obligations not to do; (Art. 1168, CIVIL
CODE) and
If obligation is to deliver materials for a fixed period c) Obligations to do which are purely personal
such as 30 years, fortuitous events occurring within in character. (4 ARTURO M. TOLENTINO,
the period, such as the outbreak of war which took COMMENTARIES AND
6 years out of the 30-year period and destroyed JURISPRUDENCE ON THE CIVIL CODE
plants, machinery and equipment and prevented the OF THE PHILIPPINES 99-100 (1991))
obligor from making deliveries, the occurrence of
such a fortuitous event will not extend the period of 4. Resolution/Cancellation – implied in
the contract beyond its fixed period. This is because reciprocal obligations, but not available if the
the obligor was excused from performance during breach is slight, unless time is of the essence.
the period when the fortuitous events prevented it (Biando v. Embestro, G.R. No. L11919, 1959) If
from performing its obligations. (Victorias Planters breach is only slight, generally courts will grant
Association v. Victorias Milling, G.R. No. 6648, additional time for the obligor to pay or perform
1955) and after this additional time, if obligor still does
not perform, courts will allow resolution or
A person obliged to perform an obligation is NOT cancellation. (Art. 1191, CIVIL CODE;
excused from a fortuitous event when the nature of Kapisanan Banahaw v. Dejarme, G.R. No.
the obligation requires the assumption of risk. In L32908,1930) The principle is that resolution
other words, it is NOT enough that the event should will not be permitted for a slight or casual breach
not be foreseen or anticipated, but it must be one of a contract, but only for such breaches as are
that is impossible to foresee or to avoid. (Republic so substantial and fundamental as to defeat the
v. Luzon Stevedoring, G.R. No. L21749, 1967) object of the parties in entering into the

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agreement. (Multinational v. Ara Security, G.R. FACTS: D purchased 200 shares of stock of the
No. 154852, 2004) Quezon Colleges, subject to the condition that she
would pay for the same as soon as she would be
Remedy Specific only to Obligations Not to Do: able to harvest fish from her fishpond.
to compel that the act in violation of the obligation to Issue: Is this condition valid?
be undone if possible and if not, only damages may
be pursued. (Art. 1168, CIVIL CODE) HELD: No, because this suspensive condition is
purely potestative on her part. (Civil Code of the
C. DIFFERENT KINDS OF OBLIGATIONS Philippines Annotated by Edgardo L. Paras 198-199
(2008))
Pure Obligations
THUS: suspensive condition + purely potestative on
Definition – It is an unqualified obligation, which is debtor = both condition and obligation void. Hence,
demandable immediately. Its performance does there is no obligation.
NOT depend upon a future and uncertain event, or
past event unknown to the parties. (Art. 1179, A provision in a Conditional Deed of Sale stating that
CIVIL CODE) the vendee shall pay the balance of the purchase
price when he has successfully negotiated and
Conditional Obligations secured a right of way is not a purely potestative
condition on the perfection of the contract nor on the
validity of the entire contract or its compliance as
Definition – The performance in conditional
contemplated by Art. 1308. Such a condition is
obligations depends upon a (1) future AND
likewise dependent on chance as there is no
uncertain event, (2) or upon a past event unknown
guarantee that the vendee and the third-party
to the parties. (DE LEON 106 (2014))
landowners would come to an agreement regarding
the road right of way, a type of mixed condition
NOTE: For the first kind, Article 1179 uses the
expressly allowed under Art. 1182. Where the so-
phrase “future ‘or’ uncertain” -- it must be construed
called potestative condition is imposed not on the
as “and”. (4 TOLENTINO 144 (1991))
birth of the obligation but on its fulfillment, only the
condition is avoided, leaving unaffected the
Conditional Obligations may be further obligation itself. (Catungal v. Rodriguez, GR No.
classified into: 146839, 2011)
1. Suspensive or resolutory
2. Potestative (based on the will of one of the
SUSPENSIVE CONDITION
parties), Casual (based upon chance or will of
3rd parties), and Mixed (combination of will of
• The happening of the condition creates the
one of the parties + chance and/or will of 3rd
obligation.
persons)
3. Possible or impossible • Not demandable at once.
4. Positive or negative • Gives rise to the existence of an obligation. For
5. Divisible or indivisible example, in a Contract to Sell, the fulfillment of
6. Conjunctive or alternative the suspensive condition, which is the full
7. Express or implied payment of the purchase price, gives rise to the
(JURADO 110 (2010)) obligation of the seller to convey the title to the
prospective buyer. If the condition was not
fulfilled, it only prevents the obligation of the
NOTE:
seller to convey title to arise. (DE LEON 102
All combinations are valid, EXCEPT only those
(2014))
conditional obligations which are suspensive and
• Also known as “condition precedent”
dependent solely on the will of the debtor.
• Gives birth to obligations
Examples: (DE LEON 106-107 & 111-112 (2014))
I’ll give you P1,000,000 next month if I decide to run
for the upcoming national elections. Rule on fruits in suspensive condition:
a) In suspensive conditions, the effect of a
Trillana v. Quezon Colleges, Inc. conditional obligation “to give” retroacts to the
93 Phil. 383 day of the constitution of the obligation.
b) Nevertheless, when the obligation imposes
reciprocal prestations, the fruits and interests
during the pendency of the suspensive

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condition shall be deemed to have been prevent the formation seriousness in this
mutually compensated. of a valid obligation. undertaking. (4
c) If the obligation is unilateral, the debtor or While to a certain TOLENTINO 151
obligor shall appropriate the fruits and interests extent, it depends on (1991))
received, unless from the nature and the voluntary act of the
circumstances of the obligation it should be obligor, it is still
inferred that the intention of the person subject, in part, to
constituting the same is different. (Art. 1187, contingencies over
CIVIL CODE) which he has no
control. For instance, “I
NOTE: Doctrine of constructive fulfillment – agree to make the first
Condition shall be deemed fulfilled when the obligor offer to you should I
voluntarily prevents fulfillment. (Art. 1186, CIVIL decide to sell my
CODE) house.” The condition
• REQUISITES: depends upon the will
a) Condition is suspensive of the offeror, but in
b) Obligor prevents fulfillment of condition consequence of
c) Obligor acts voluntarily external circumstances
which may arise (e.g.,
RESOLUTORY CONDITION the need for money or
• Demandable at once the advantage of
• Once the condition is established or transferring to a
acknowledged, the right to demand different location). (4
performance immediately exists and TOLENTINO 151
therefore the obligation can be demanded (1991))
at once.
• It is also known as “condition subsequent” Effect of illegal, immoral or impossible condition
• The happening of the condition has the TO GIVE / TO DO NOT TO GIVE / NOT
effect of extinguishing an obligation. (DE SOMETHING TO DO SOMETHING
LEON 109 & 111-112 (2014)) Both condition and Condition considered
obligation are void, not written, hence, the
NOTE: In case of reciprocal obligations, the hence, there is no obligation is valid –
obligation of one is a resolutory condition of the obligation. the condition is merely
obligation of the other, the non-fulfillment of which superfluous.
entitles the other party to resolve or cancel the Exception: In (PINEDA92 (2009))
contract. (DE LEON 53 (2014)) gratuitous obligations,
iIIegal conditions are
POTESTATIVE CONDITION considered as not
The fulfillment of the condition entirely depends written, hence
upon the sole will of a party – may be purely condition is deemed
potestative on the part of the obligee (valid), or the not written and the
obligor/ debtor (void if suspensive). (PARAS 201 obligation is valid
(2016)) (becomes a pure
obligation). (DE LEON
Simple potestative v. Purely potestative 135 (2014))
suspensive condition
SIMPLE PURELY
POTESTATIVE POTESTATIVE Condition coupled with a Term
Presupposes not only Depends solely and The condition that some event will not happen at a
a manifestation of will exclusively upon the determinate time, shall render the obligation
but also the realization will (e.g., “if I like it” or effective from the moment (1) the time indicated has
of an external act (e.g., “If I deem it proper). elapsed, or (2) if it has become evident that the
“if you sell your event cannot occur. (Art. 1185, CIVIL CODE)
house”). Destroys the efficacy of
the legal tie. If a person Otherwise, generally, a party must wait for the
The simple potestative says, “I will sell my condition to be fulfilled, until it becomes certain that
condition on the part of house if I deem it condition (1) cannot be fulfilled (parties are
the debtor does not proper,” there is no released), or (2) may be deemed fulfilled at such

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time as the parties contemplated, bearing in mind Suspensive It may or may It is certain
the nature of the obligation. (Art. 1185, CIVIL not happen, that it will
CODE) hence happen; just
uncertain uncertain as
whether there to when it will
POSITIVE NEGATIVE is an happen.
SUSPENSIVE SUSPENSIVE obligation.
Condition Resolutory It is not certain It is certain
Condition must if the that it will
should NOT
be fulfilled obligation will terminate at
Rule happen before
before terminate at a future time.
stipulated
stipulated term all
term
Effect if The parties Retroactivity Once fulfilled, There is no
Condition is are released it will retroact retroactivity
Obligation
fulfilled as of the date to date the because
arises from
before of the obligation was there is
fulfillment
arrival of happening of entered into already an
the term the condition (NOTE: if it is obligation
Parties are an obligation from the time
released as of to do or not to the parties
arrival of the do, courts will enter in the
term determine obligation,
Effect if
retroactivity) except only
Condition is The obligation
But Parties in
not fulfilled arises from
may be EXCEPT: prescription
before the the time the
released even (i) fruits (Art. (where
arrival of term arrives.
before arrival if 1187- when prescriptive
the term
it becomes the obligation period is
indubitable that to deliver counted from
the condition arises), (ii) arrival of the
will not happen prescription term – i.e.,
(from when the
fulfillment of action could
Obligations with a Period or Term condition – have been
when action brought).
“Day certain” refers to either: could have
a) A future AND certain event; or been brought)
b) Payable when able, or when debtor (DE LEON 191 (2014))
promises to pay when “his means permit
him to do so” – period is to be fixed by the Effects before the happening/ arrival of
court, taking into account intention of the condition/ term
parties (PINEDA 129 (2009)) • Obligee: May file Protective Action only, such
as asking for security or requiring escrow of the
May also be further classified into: object since there is no right or obligation yet at
(a) Suspensive - obligation is suspended until this time.
arrival of the period; or • Obligor: No obligation to deliver or perform yet
at this time.
(b) Resolutory - obligation is immediate but
terminates upon arrival of the period. (DE LEON NOTE: In an obligation to give specific things, these
194 (2014)) are the effect of loss, impairment or improvement of
the specific thing which is the object of the
Suspensive or resolutory condition v. term obligation:
CONDITION TERM CAUSE LOSS IMPAIRM IMPROVEM
ENT ENT
Obligor’s Obligor Obligee Obligor has
Fault to pay may usufructuary
choose rights only –

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damage resolution i.e., can use Exception: When he gives security for the
s or it but is not obligation
fulfillment, entitled to
with payment, b) Failure to create or establish the security
damages and can promised;
remove it
only if it will c) When Security established but is later
not cause impaired (through fault of debtor) or totally
damage lost (due to fault of debtor or fortuitous
Obligee’s Obligor Deliver in Obligor events).
Fault released its without right Exception: Debtor provides another security of
impaired to payment equal value;
state of
improvemen d) Violation of any undertaking on the basis of
t which, period is granted;
Nature/ Obligor Borne by Inures to the
Fortuitous released the benefit of e) Debtor Attempts to abscond (mere attempt
Events obligee; the obligee sufficient, because if actual abscondment is
cannot ask to be awaited, creditor can no longer
for collect; and
damages
or refuse f) With an Acceleration clause stipulation
to accept Applies to obligations payable in installments or
impaired based on amortization schedule, where
object stipulation says that failure to pay one or some
(Art. 1189, CIVIL CODE; DE LEON 135-137 (2014)) installments or amortizations will entitle creditor
to accelerate payment – i.e., to call for the
The same effect applies if the resolutory condition payment on the entire remaining unpaid
happens and the party obliged cannot return the obligation. (Art. 1198, CIVIL CODE)
object or is improved for the same above reasons.
When courts may fix period (ID-JBL)
Benefit of the period (a) If the obligation does NOT fix a period, but
from its nature and circumstances it can be
Significance of Period: Inferred that a period was intended by the
a) Obligor cannot be compelled to pay or parties (Art. 1197, CIVIL CODE)
perform before the arrival of the period (b) If the duration of the period Depends upon
b) Obligee cannot compel payment or the will of the debtor (Art. 1197, CIVIL
performance CODE)
(c) In case of reciprocal obligations, when
Both are subject to the right of each party to waive there is a Just cause for fixing a period (Art.
– even if the obligor is willing to pay interest for the 1191, CIVIL CODE)
remainder of the period. (JURADO 152-153 (2010)) (d) If the debtor Binds himself when his means
permit him to do so (Art. 1180, CIVIL
Presumption: for the benefit of both parties (Art. CODE)
1196, CIVIL CODE; DE LEON 197 (2014)) (e) If no period for the Lease has been set,
applicable in specific cases depending on
It can be given to either party: the length of the lessee’s stay in the
a) To the Debtor or Obligor: By law or by premises (Art. 1687, CIVIL CODE)
stipulation (e.g., payable on or before)
b) To the Creditor or Obligee: Only by NOTE: Art. 1197 is only applicable when there is
Stipulation (JURADO 152-153 (2010)) absence of any period fixed by the parties. It
requires that period cannot be set arbitrarily by the
Debtor/obligor may lose the benefit of the courts.
period (therefore may be compelled to pay
immediately) in the following cases (FAt-VISA): 2-step process to determine if the Court may fix
a) Debtor becomes Insolvent (when his the period
assets are less than his liabilities) AFTER a) Determine that the obligation does not fix a
the debt has been contracted period (or that period is made to depend

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upon will of debtor) but from the nature and If debtor has right of choice
circumstances, it can be inferred that a CAUSE ONE/SOME ALL
period was intended
Debtor’s Act Exercise of Creditor is
b) Decide what period was probably
the right of entitled to
contemplated by the parties. (Gregorio
choice, damages
Araneta, Inc. v. The Philippine Sugar
debtor may based on value
Estates Dev. Co., G.R. No. L-22558, 1967)
choose from of the last one
remaining lost
Alternative or Facultative Obligations
Creditor’s Debtor can Debtor is
Act choose (a) entitled to
Alternative obligations
deliver object resolution or
Initially, the obligation is indeterminate and becomes
from cancellation
determinate upon making of choice and notification.
remaining or plus damages
(DE LEON 217 (2014))
(b) resolution
or
General Rule: The right to make a choice is with
cancellation
the debtor/obligor, subject to the rule that he
with
cannot choose the impossible, unlawful or could not
damages
have been the object of the obligation. (DE LEON
Fortuitous Debtor may Obligation is
218 (2014))
Event choose from extinguished
remaining
Exception: By contrary stipulation, the right to make
objects; and
a choice may be given to the creditor/obligee or to a
if only 1 left –
3rd person, subject also to the rule that he CANNOT
it becomes a
choose the:
simple
1. Impossible
obligation
2. Unlawful
3. Could not have been the object of the (JURADO 172-173 (2010))
obligation. (DE LEON 218 (2014))
NOTE: As long as one choice is left, it becomes a
When Choice is Effective – from notification. simple obligation and if the last object is lost due to
(a) Debtor’s Choice: upon notice to creditor fortuitous events, the obligation is extinguished. (DE
(b) Creditor’s Choice: upon notice to debtor LEON 221-222 (2014))
(c) 3rd Person’s Choice: upon notice to both
debtor and creditor (Art. 1200, CIVIL If creditor has right of choice
CODE; DE LEON 218 (2014)) CAUSE ONE/SOME ALL
Debtor’s Act Creditor may Creditor
NOTE: There is no form required for the notice. It choose from entitled to
may be oral or written, express or implied (as when remaining, or choose the
debtor delivers one of the choices and creditor the price of value of any of
accepts). Mere notice is required, not consent. any object the objects
Once choice is made and communicated, it destroyed by lost, with
becomes irrevocable, and converted to a simple the debtor, damages
obligation. (JURADO 169 (2010)) with damages
Creditor’s Exercise of Obligation is
If the party who has the right to make the choice Act the right of extinguished
does not make it or delays, the right does not pass choice-
to the other party – action is specific performance to creditor may
compel delivery of ANY prestation. (PINEDA146- choose the
147 (2009)) from
remaining
NOTE: When only one object or prestation is left, it objects
becomes a tacit choice. The obligation becomes a
simple obligation. (Art. 1202, CIVIL CODE)
Effect of loss / impossibility of one, some or all

prestation

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Fortuitous Creditor to Obligation is

Event choose from extinguished Joint obligation (Obligacion Mancomunada) –
remaining; if The whole obligation is to be paid or fulfilled
only 1 left – proportionately by different debtors or demanded
becomes a proportionately by the different creditors.
simple
obligation General rule: The presumption is that an
(JURADO 168 (2010)) obligation is always joint. (Art. 1207, Civil Code)
In alternative obligations, various things are due but Exceptions: (FLENT)

the delivery or performance of one will extinguish 1. When the obligation Expressly stipulates
the obligation. (DE LEON 217 (2014)) solidarity;
2. When the Law requires solidarity;
If one of the prestation is illegal, others may be valid,
but obligations remain. (PINEDA 147 (2009)) Examples:
a. If two or more heirs take possession
If it is impossible to give all except one, the last one of the estate, they shall be solidarily
must still be given. (4 TOLENTINO 209 (1991)) liable for the loss or destruction of a
thing devised or bequeathed, even
The right to choose may be given either to the debtor though only one of them should have
or creditor. (JURADO 168 (2010)) been negligent. (Art. 927, Civil Code)
b. Even when the agent has exceeded
Joint and Solidary Obligations his authority, the principal is solidarily
liable with the agent if the former
Involves multiple parties (more than one (1) debtor allowed the latter to act as though he
or more than one (1) creditor or more than one (1) had full powers. (Art. 911, Civil Code)
debtor and creditor).
c. All partners are solidarily liable with
the partnership for any crime or
The liability or rights of parties may be joint or
solidary. It is presumed joint. Solidary obligation
quasi-delict committed by any
requires either stipulation or law to create solidary partner acting in the ordinary course
liability/right. (Art. 1207, Civil Code) of business of the partnership or with
the authority of his co- partners. (Art.
In a joint obligation/credit, just divide the 1822-1824, Civil Code)
obligation/credit into as many numbers of debtors d. If two or more persons have
and creditors to get the sharing, unless sharing was appointed an agent for a common
stipulated (sharing is presumed equal). (Art. 1208, transaction or undertaking, they shall
Civil Code) be solidarily liable to the agent for all
the consequences of the agency.
In a joint obligation, each of the joint debtors is only (Art. 1915, Civil Code)
responsible for his/her own share and each cannot
be made to pay for the share of others, even those 3. When the Nature of the obligation requires
who are insolvent or who have died; joint creditors solidarity;
cannot collect the share of the others. (Arts. 1207 & 4. When a charge or condition is imposed upon
1209, Civil Code) heirs or legatees and the Testament
expressly makes the charge or condition in
In a solidary obligation, the solidary debtors can be
solidum (Manresa); and
made to pay the full amount of the obligation
5. When a solidary responsibility is imputed by
(subject to presentation of available defenses);
solidary creditors can collect the full amount of the
a Final judgment upon several defendants.
obligation. (Art. 1216, Civil Code) (Gutierrez v. Gutierrez, G.R. No. 34840)
Among solidary debtors and creditors, one who Effects of joint liability
pays or receives the full amount of the obligation can 1. Demand on one produces delay only with
recover from or deliver the share of others. (Art. respect to the debt of the debtor against
1214 &1217, Civil Code) whom a demand is made.
2. Interruption in payment by one does not
JOINT (DIVISIBLE) OBLIGATIONS benefit or prejudice the other.

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3. Each debtor can be held liable only for the Plurality of subjects is Plurality of subjects is
payment of his proportionate share of the NOT required indispensable
debt. (DE LEON 225 (2014))
4. A joint debtor cannot be compelled to answer
for the acts or liability of the other debtors. NOTE: The indivisibility of the prestation does not
5. Vice of one debtor to creditor has no effect on necessarily import solidarity. They arise from
the others. different criteria of qualification. Indivisibility has to
6. Insolvency or death of one debtor does NOT do with the prestation and its performance.
affect other debtors. Solidarity has to do with the parties to an obligation.
(BALANE 257-258 (2020))
Effects of joint credit
4. Each creditor can demand for the payment only
SOLIDARY OBLIGATIONS
of his proportionate share of the credit.
5. A joint creditor cannot act in representation of
Solidary obligation (Obligacion Solidaria) – must
the other creditors. be expressed in stipulation or provided by law or by
nature of obligation. Otherwise, it will be considered
NOTE: Unless there is no specification as to their a joint obligation/credit. (Art. 1207, Civil Code)
proportionate share in the credit or in the debt, the
creditors and debtors in a joint obligation shall be Words denoting solidarity include “jointly and
severally” (most common); “individually and
entitled or shall make payment in equal proportion.
collectively”; “severally”; “individually”; “collectively”;
“separately”; “distinctively”, “individually liable” and
JOINT (INDIVISIBLE) OBLIGATIONS
“individually and jointly”. (Ronquillo v. Court of
Appeals, G.R. No. L-55138)
If there are 2 or more debtors, the fulfillment of or
compliance with the obligation requires the
Also, use of pronoun “I” in a promissory note where
concurrence of all the debtors, although each for his
several debtors sign denotes solidarity.
own share. (Art. 1209, Civil Code) The obligation
(PINEDA163-164 (2009); Republic Planters Bank v.
can be enforced only by proceeding against all
CA, 216 SCRA 738 (1992))
of the debtors.
If a solidary debtor pays the obligation in part and is
If there are 2 or more creditors, the concurrence or
issued a quitclaim, he can recover reimbursement
collective act of all the creditors, although each for
from the co-debtor only insofar as his payment
his own share, is also necessary for the
exceeded his share in the total obligation. If the
enforcement of the obligation (Art. 1209, Civil Code)
debtor pays less than his share, he cannot demand
reimbursement because his payment is less than his
The Court pointed out that there’s a loan
partnership, which means that there should be an actual debt. (Republic Glass Corp. v. Qua, G.R. No.
inclined sharing of losses. However, in the JVA, 144413)
there was an agreement that all cash should be paid
by X; SC held that you should apply the rules on Kinds of solidary obligations
partnership rather than the JV contract. (Marsman 1. Active Solidarity
v. Philippine Geonalytics, G.R. No. 183374) 2. Passive Solidarity
3. Mixed Solidarity
Effect of breach 4. Conventional Solidarity
If one of the joint debtors fails to comply with his 5. Legal Solidarity (DE LEON 217-219 (2014))
undertaking, the obligation can no longer be fulfilled
or performed. Consequently, it is converted into one Kinds of solidary obligations
of indemnity for damages. Innocent joint debtor shall Active Solidarity – solidarity on the part of creditor
or obligee
not contribute to the indemnity beyond their
a. Each creditor represents the other in
corresponding share of the obligation. (Art.1224,
the act of recovery of payment. (DE
Civil Code)
LEON 218 (2014))
INDIVISIBILITY SOLIDARITY
b. Credit is divided equally between
Refers to the prestation Refers to the legal tie
creditors as among themselves.
which constitutes the and consequently to
object of the obligation the subjects or parties
c. Debtor may pay any of the solidary
of the obligation
creditors. (Art. 1214, Civil Code)

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Effect if several solidary debtors offer to pay:

d. Any creditor can collect full amount of creditor can choose from anyone or all of them, as
obligation. Unless there is an long as he does not collect more than the full amount
agreement as to which creditor can of the obligation.
collect. Debtor must pay to the creditor
who first makes a demand. There is a Effect of Prescription: Interruption of prescription
case of improper payment if the debtor to one creditor affects all creditors. (4 TOLENTINO
pays to another creditor who did not 229 (1991))
make a demand; he can be made to
pay again to the creditor who made the Effect of Delay: interests from delay on one debtor
demand. (Art. 1214, Civil Code) is borne by all debtors. (4 TOLENTINO 229 (1991))
e. After a solidary creditor collects the full Defenses – a solidary debtor when sued can raise
amount, all debtors are released from the ff. defenses:
the obligation. The creditor who (a) From the nature of obligation – e.g. the
received payment must then deliver obligation is void, has prescribed, or has
the shares of the other solidary already been paid – the defense is complete:
creditors (presumed equal unless debtor sued is not liable, and no one is liable;
amount indicated). (Art. 1215, Civil
Code; 4 TOLENTINO 228 (1991)) (b) Personal to him – may be: (i) complete (debtor
sued is not liable, but others may be sued and
the amount that may be collected should be less
Passive Solidarity – solidarity on the part of than the share of the debtor with a personal
debtors or obligors defense) e.g., minority, vitiated consent; or (ii)
(a) Any debtor can be made to pay the full partial e.g., non arrival of term or condition –
amount of the obligation with the right possible even if solidary-debtor sued is liable for
to recover from co-debtors. (Art. 1216, share of others, less his own share) (4
Civil Code) TOLENTINO 250-251 (1991))
(b) The right to make a choice of who (c) Those which pertains to the share of his co-
among the debtors the creditor will debtors – with respect to the share which
proceed against, lies on the creditor. personally belong to others, the debtor may
avail himself thereof only as regards that part of
An accommodation party under the law is solidarily the debt for which the others are responsible.
liable based on the Negotiable Instruments Law. (Art. 1222, Civil Code)
(Gonzales v. PCIB, G.R. No. 180257)
Once creditor is paid in full, the obligation is
Effect of demand on one solidary debtor: It will extinguished, and the debtor who pays is entitled to
not stop the creditor from going against another reimbursement from others, as if joint (based on
debtor as long as the debt has not yet been paid in agreed sharing or if not, equal). (Art. 1217, Civil
full. (Art. 1216, Civil Code) Code)
Effect if one of solidary debtor dies: creditor is not When one of the solidary debtors cannot, because
bound to make a claim on the estate of the of his insolvency, reimburse his share to the debtor
deceased debtor within 2-year period under the paying the obligation, such share shall be borne by
Rules of Court since creditor may choose any of the all his co-debtors, in proportion to the debt of each.
living debtors, in which case the 2-year period does (Art. 1217, Civil Code)
not apply.
Difference from joint obligation: The share of the
Although the Rules of Court mandate that in case of insolvent debtor is assumed proportionately by
death of a respondent, the claims should be filed in others, in the meantime.
the settlement of estate, the court said that’s a
procedural rule and the rule of the Civil Code on Reimbursement includes interest from date of
solidary liability should prevail — in which case, payment until actual reimbursement, except if
creditor can choose who to sue. (Boston v. CA, G.R. solidary debtor pays before maturity – in which case
No. 173946) interest runs only from maturity.

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Mixed Solidarity – on the part of the obligors and SOLIDARY DEBTOR SURETY
obligees, or the part of the debtors and the creditors With principal liability can be made to pay
(DE LEON 219 (2014)) only when principal
debtor does not pay
Conventional Solidarity – agreed upon by the
parties (DE LEON 219 (2014))
Legal Solidarity – imposed by law Pays for full amount If he pays the full
Examples: and can seek amount, he may
(a) Obligations arising from tort reimbursement from recover the FULL
a. The responsibility of two or other solidary debtors amount from principal
more persons who are liable debtors
for quasi-delict is solidary.
(Art. 2194, Civil Code)
(b) Obligations arising from quasi-
Extension of time Extension of time
contracts
granted to other granted to principal
(c) Legal provisions regarding obligation
solidary debtors w/o his debtor w/o his consent
of devisees and legatees
consent does not releases him
(d) Liability of principals, accomplices, and
release him
accessories of a felony
(e) Bailees in commodatum (DE LEON
219-220 (2014)) Can be made to pay Can bind himself for
the full amount less than the full
Effects: No reimbursement if payment is made after amount of the
prescription or became illegal. obligation
Payment made before debt is due: no interest can

be charged except from maturity, otherwise, interest (DE LEON 222-223 (2014))
can be charged from date of payment
Effect of loss or impossibility of the prestation:
Insolvency of one: others are liable for share pro- (a) If without fault – no liability
rata (b) If with fault – there is liability (also for damage
and interest)
If different terms and conditions: collect only what (c) Loss due to fortuitous event after default – there
is due, later on collect as and when they become is liability (because of default) (PINEDA189
due or the conditions are fulfilled (2009))
Remission made after payment is made: co-

debtor still entitled to reimbursement DE LEON 238- As a rule, corporations are solely liable for their
239 (2014)) obligations. The directors or trustees and officers
are not liable with the corporation even if it is through
Effect of insolvency or death of co-debtor: still their acts that the corporation incurred the
liable for whole amount obligation. As an exception, directors or trustees
and corporate officers may be solidarily liable with
Fault of any debtor: everyone is responsible to the the corporation for corporate obligations if they
creditor – price, damage and interest, but the debtor acted “in bad faith or with gross negligence in
at fault should reimburse those who paid the creditor directing the corporate affairs.” (Oliveras v. Castillo,
(DE LEON 240-241 (2014)) G.R. No. 196251, Jul. 9, 2014)
Complete/personal defense: total or partial (up to NOTE: The law clearly provides that the creditor
amount of share only) if NOT personal to him who may have executed any acts mentioned in Art.
(Braganza v. Villa Abrille, G.R. No. L-12471) 1215 (Novation, Compensation, Merger or
Confusion), as well as he or she who collects the
debts, shall be liable to the others for the share in
the obligation corresponding to them. (DE LEON
231 (2014))
Obligations with a Penal Clause

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One to which an accessory undertaking is attached 3. in certain exceptional cases, to punish the
for the purpose of insuring its performance by virtue obligor in case of breach of the principal
of which the obligor is bound to pay a stipulated obligation (punitive). (DE LEON 253 (2014))
indemnity or perform a stipulated prestation in case
of breach. (DE LEON 252 (2014)) Characteristics
1. Subsidiary – As a general rule, only penalty
Penal cause vs. Condition can be demanded, principal cannot be
PENAL CLAUSE CONDITION demanded, Except: Penalty is joint or
Serves as accessory NOT a separate cumulative (Art. 1227, Civil Code), and in
obligation obligation; part of monetary obligations where both principal and
principal interest as a form of penalty may be collected.
Demandable in default Never demandable (DE LEON 259-260 (2014))
until the condition
happens 2. Exclusive – generally takes place of all
damages and interests. (DE LEON 254 (2014))
Obligation exists No obligation until
suspensive condition Penalty as substitute for damages
happens General rule: the penalty fixed by the parties takes
Depends on the non- Principal itself is the place of all damages and interests in case of
performance of the dependent on an breach. (Art. 1226, Civil Code)
principal obligation uncertain event
(PINEDA 203 (2009)) Exceptions: (StiRF)
1. When by Stipulation of the parties, penalty, IN
ADDITION to interest, may be collected;
Obligation with a penal clause vs. Alternative 2. When the debtor is sued for Refusal to pay the
obligation agreed penalty; and
PENAL CLAUSE ALTERNATIVE 3. When debtor is guilty of Fraud. (Art. 1226, Civil
OBLIGATION Code)
Only 1 prestation Several prestations Kinds of penalties:
Impossibility of Impossibility of 1 (a) Legal – constituted by law
principal extinguishes prestation does NOT (b) Conventional – constituted by agreement of
penalty extinguish the the parties
obligation (c) Compensatory – established for the purpose of
Debtor may not Debtor may choose indemnifying the damages suffered by the
choose between among the different obligee or creditor in case of breach of the
principal and penalty prestations obligation
(PINEDA 203 (2009)) (d) Punitive – established for the purpose of
punishing the obligor or debtor in case of breach
Obligation with a penal clause vs. Facultative of the obligation
obligation (e) Subsidiary or alternative- in case of non-
PENAL CLAUSE FACULTATIVE performance only the penalty is demandable
OBLIGATION (f) Joint or cumulative – both the principal
Penalty of payment in Power to choose undertaking and the penalty may be demanded
lieu of the principal prestation is absolute (DE LEON 256 (2014))
must be expressly
granted Causes for reduction of penalty
Creditor may demand Creditor may not (a) Partial/irregular performance
both if expressly demand both (b) Penalty provided is iniquitous/
granted principal and unconscionable (Art. 1229, Civil Code)
substitute
(PINEDA 203 (2009)) Although parties may voluntarily agree on any
amount of interest, voluntariness does not make the
Purposes of penalty: stipulation on interest valid. A 5% per month, or 60%
1. to insure the performance of the obligation per annum, rate of interest is iniquitous, and must
2. to liquidate the amount of damages to be be struck down. (Menchavez v. Bermudez, G.R. No.
awarded to the injured party in case of breach 185368)
of the principal obligation (compensatory); and

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Parties have wide latitude to stipulate any rate of PRINCIPLE OF IDENTITY

interest in view of BSP Circular 905, which With respect to the prestation or the object – the
suspended the ceiling on interest effective Jan. 1, same thing or the same prestation, in the manner
1983. However, whenever interest is agreed upon, must be delivered or performed in
unconscionable, the courts may declare it illegal. order to extinguish the obligation. The obligor
Compounded interest of 5% monthly, being cannot compel the obligee to accept a different thing
iniquitous and unconscionable, is void and or prestation, even if the one offered is more
inexistent from the very beginning. Thus, the legal valuable than the one agreed upon. (Art. 1244, Civil
rate of 6% per annum must be imposed in lieu of the Code)
excessive interest agreed upon by the parties.
(Benavidez v. Salvador, G.R. No. 173331) With respect to parties – must be made by proper
party to proper party
COMMENT 1. Payor - the one who delivers or performs
Iniquitous or unconscionable stipulations on interest must be the debtor or anyone interested in
rates are void, thus it is as if there was no express the fulfillment of the obligation. Any other
contract thereon. Hence, courts may reduce the person requires the creditor’s consent (Art.
interest rate as reason and equity demand. 1236, Civil Code)
(MCMP Construction v. Monark Equipment Corp.,
G.R. No. 201001) When there is a 3rd person interested in the
fulfillment of the obligation – creditor must
D. EXTINGUISHMENT accept the payment and debtor need not
give consent.
Principal Modes of Extinguishment (PaL-
CoCoCo-No) When a 3rd person not interested in the
(a) Payment or performance fulfillment of the obligation pays/performs –
(b) Loss of the thing due creditor can refuse to accept, but once
(c) Condonation or remission of debt accepted, the obligation to the creditor is
(d) Confusionor merger of rights extinguished.
(e) Compensation
(f) Novation (Art. 1231, Civil Code) NOTE: There is full subrogation if the
debtor consented to the payment by the 3rd
Other modes of extinguishment person (unless he intended it to be a
donation). In the absence of consent by the
(a) Annulment
debtor, the 3rd person is entitled only to
(b) Rescission
reimbursement of the payment made, to
(c) Fulfillment of resolutory condition the extent that the debtor has been
(d) Prescription (Art. 1231, Civil Code) benefited
o W/O DEBTOR’S CONSENT – Only the
Not stated in Article 1231 of the Civil Code: cost which the third person paid to
1. Death of a party in personal obligations (4 creditor and the extent to which the
TOLENTINO 271 (1991)) debtor benefited from the payment will
2. Mutual Desistance (Saura Import & Export Co. be the extent of third person’s right to
v. DBP, GR No. L-24968, Apr. 27, 1972) collect. [
3. Compromise (Art. 2028, Civil Code) o W/ CONSENT – third person gets all
4. Impossibility of Fulfillment (Art. 1184, Civil rights including right against securities,
Code) collateral guarantees, etc. (Arts. 1236-
5. Happening of Fortuitous Event (Art. 1165, Civil 1238, Civil Code)
Code)
6. Arrival of Resolutory Period (Art. 1193, Civil 2. Payee - creditor or obligee at the time
Code) payment is due (includes successor in
interest of transferee since credit is
1. Payment or Performance generally assignable) (Art. 1240, Civil
Code)
PRINCIPLES APPLICABLE FOR VALID
PAYMENT OR PERFORMANCE If paid to a 3rd person – Payment is valid only in
1. Identity any of the ff. cases:
2. Integrity or completeness a. Payment which redounded to the
3. Indivisibility (DE LEON 300-301 (2014)) benefit of the obligee

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Instances when the presumption When to pay: Generally, upon demand. (See
that the payment redounded to the previous discussions when demand is not
benefit of the obligee: necessary)
After payment, 3rd person acquires the PRINCIPLE OF INTEGRITY (Art. 1233, Civil
creditor’s rights (subrogation) Code)
(1) Creditor ratifies payment to 3rd General rule: A debt shall not be deemed paid
person UNLESS the thing or service of which the obligation
(2) By creditor’s conduct, debtor consists of has been completely delivered or
has been led to believe that 3rd rendered, as the case maybe. (Art. 1233, Civil
person is authorized to Code)
receive payment make the
payment (estoppel) (Art. Exceptions:
1241, Civil Code) 1. When the obligation has been substantially
performed in good faith (Art. 1234, Civil Code);
b.Payment to the possessor of the 2. When the obligee accepts performance despite
credit, when made in good faith its incompleteness or irregularity and without
(Art. 1242, Civil Code) expressing any protest or correction. (Art. 1235,
Requisites: (GP) Civil Code);
(1) Payment by debtor must be 3. In cases involving divisible obligations capable
made in Good faith. of partial performance. (PINEDA 192-193
(2) Creditor must be in (2009)).
Possession of the credit and
NOT merely the evidence of Substantial performance
indebtedness. If the obligation has been substantially performed in
. good faith, the obligor may recover as though there
Payment to an incapacitated person, valid if: had been a strict and complete fulfillment, less
(KB) damages suffered by the obligee. This is the basis
1. Incapacitated person Kept the thing of the rule that if the breach is only slight, the obligee
delivered, or cannot resolve or cancel the obligation. Generally,
2. Insofar as the payment has been the courts will grant the obligor a certain time to
Beneficial to him. (Art. 1241, Civil Code) make up for the slight breach. The “damages
suffered by the obligee” refers to the deficiency
Rules on payment by an incapacitated person which the obligee is still entitled to collect. (Art.
As a general rule, payment by one who does not 1234, Civil Code; 4 TOLENTINO 277 (1991))
have the free disposition of the thing due or capacity
to alienate it is not valid. This means that the thing Substantial performance is applied only when the
paid can be recovered. obligor admits breaching the contract after honestly
and faithfully performing all the material elements
EXCEPTION: Art. 1427 provides that when a minor thereof except for some technical aspects or
between eighteen and twenty-one years of age who deficiency that cause no serious harm to the
has entered into a contract without the consent of obligee. (International Hotel Corporation v. Joaquin
the parent or guardian, voluntarily pays a sum of Jr., G.R. No. 158361)
money or delivers a fungible thing in fulfillment of the
obligation, there shall be no right to recover the Requisites of substantial performance
same from the obligee who has spent or consumed (GoSTeM):
it in good faith. (DE LEON 287 (2019)) 1. Attempt in Good faith to perform without willful
or intentional departure
Where payment should be made 2. Deviation is Slight
1. In the place designated in the obligation 3. Omission/Defect is Technical or unimportant
2. If there is no express stipulation and the 4. Must not be so Material that intention of parties
undertaking is to deliver a specific thing – at is not attained. (International Hotel Corporation
the place where the thing might be at the v. Joaquin Jr., G.R. No. 158361)
moment the obligation was constituted
3. In other case – in the place of the domicile of Acceptance by the obligee as full
the debtor (Art. 1251, Civil Code) 1. When the obligee accepts the performance,
knowing its incompleteness or irregularity, and
WITHOUT expressing any protest or objection,

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the obligation is deemed fully complied with. When payment in check is accepted, it produces
This is because the obligee is deemed to have the effect of payment only when the check is
waived his right to collect the deficiency. (Art. cleared (retroacts to the date the check was
1235, Civil Code) deposited) and the funds are transferred to the
account of the creditor. Stale checks (those not
2. Unlike Art. 1234 where the obligee does not presented for payment within 6 months from date of
give up his right to collect the balance, in Art. check) do not produce the effect of payment and
1235, the obligee waives his right to collect such debtor can be required to issue a new check or pay
balance. in cash since the obligation is not yet deemed paid.
Debtor cannot however be liable for interest or
Divisible obligations penalty and cannot be declared in default since
An obligation that is capable of partial performance. creditor could have immediately presented it for
(PINEDA 192-193 (2009)) payment. It is only in cases where the value is
1. Execution of certain number of days’ work impaired through creditor’s fault (i.e., creditor
2. Expressed by metrical units misplaced the check and someone else encashed
3. Nature of obligation – susceptible of partial it), that the debtor is deemed to have paid his
fulfillment (DE LEON 250 (2014)) obligation without having to issue a new check or
paying in cash. (Evangelista v. Screenex, Inc., G.R.
Indivisible Obligations No. 211564)
One not capable of partial performance.
1. To give definite things Payment in coins is legal tender only up to a
2. Not susceptible of partial performance certain amount:
3. Provided by law for P1, 5 and 10 coins, only up to P1,000; for P.01,
4. Intention of parties (DE LEON 249, 2014)) .05, .10, and .25 coins, only up to P 100. (BSP
Circular No. 537, Series of 2006, July 18, 2006))
NOTE: Divisibility or indivisibility of the obligation
refers to the performance of the prestation and not Payment in foreign currency is allowed, if
to the thing which is the object thereof (DE LEON stipulated. The Uniform Currency Act (1950) was
249, 2014)). Intention of parties should be taken expressly repealed by R.A. No. 8183 (effective July
into account to determine whether obligation is 5, 1996). Art. 1249 allowing stipulation of payment
divisible or not (DE LEON 244, 2014)) in foreign currency has been restored. Agreements
with stipulation to pay foreign currency may be
SPECIAL RULES ON MONETARY discharged in Philippine Pesos at rate of exchange
OBLIGATIONS (LOANS AND FORBEARANCE at the time of payment. (Union Bank v. Tui, G.R. No.
OF MONEY, GOODS, AND CREDITS) 173090)
Forbearance of money, goods and is defined as EXTRAORDINARY INFLATION OR DEFLATION

“arrangements other than loan agreements where a
person acquiesces to the temporary use of his In cases of extraordinary inflation or deflation, the
money, goods or credits pending the happening of value of the currency at the time the obligation was
certain events or fulfillment of certain conditions.” incurred should be the basis of payment, unless
(Estores v. Supangan, G.R. No. 175139) there is stipulation to the contrary. (Art. 1250, Civil
Code)
PAYMENT MUST BE IN LEGAL TENDER (Art.
1249, Civil Code) Inflation (or deflation) rates are determined by
economic managers (BSP specifically), but
Personal checks, Cashier’s or Managers checks are whether extraordinary, this will require judicial
NOT legal tender, so creditor cannot be compelled determination. The Court has ruled that whoever
to accept them (unless such is stipulated as the alleges extraordinary inflation must prove it –
mode of payment). Creditor, however, has the indicating that the courts will determine based on
option to accept payment in checks of any kind. If evidence presented. (Citibank v. Sabeniano, G.R.
the creditor accepts the check or no prompt No. 156132)
objection to the form of payment is made, there is
valid tender of payment and creditor can no longer Requisites for the application of Art. 1250 on
claim later that payment is not in legal tender. extraordinary inflation/deflation:
(Pabugais v. Sahijwani, G.R. No. 156846) 1. There is an official declaration of extraordinary
inflation or deflation from the BSP
2. The obligation is contractual in nature

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3. The parties expressly agreed to consider the judgment obligations not arising from
effects of the extraordinary inflation or deflation. loans, forbearance of money, goods or
(DE LEON 311 (2014)); see Equitable PCI Bank credits, including those based on torts.
v. Sheung Ngor, G.R. No. 171545) (BSP Circular No. 799, Series of 2013,
June 21, 2013)
NOTE: Inflation or deflation is based on increase
or decrease of purchasing power and not based on NOTE: In the absence of an express stipulation
Peso-US Dollar exchange rate. (Singson v. Caltex, as to the rate of interest that would govern the
G.R. No. 137798, Oct. 4, 2000). The rate of parties, the rate of legal interest for loans or
inflation/deflation is measured by determining rate of forbearance of any money, goods or credits and
increase or decrease of purchasing power from a the rate allowed in judgments shall no longer be
prior period. It is determined by the amount of basic twelve percent (12%) per annum but will now be
goods (within a basket) that money can buy, as six percent (6%) per annum effective July 1,
compared to a prior period. If money can buy P100 2013. It should be noted, nonetheless, that the
of basic goods at a certain prior period, determine new rate could only be applied prospectively
how much of the same goods can be purchased at and not retroactively. Consequently, the twelve
a later period – this represents the rate of inflation or percent (12%) per annum legal interest shall
deflation. (Citibank v. Sabeniano, G.R. No. 156132) apply only until June 30, 2013. Come July 1,
2013 the new rate of six percent (6%) per
Example: annum shall be the prevailing rate of interest
A loan of P100 was obtained in 2013, and payable when applicable. (Nacar v. Gallery Frames,
after one year. At the time the obligation was G.R. No. 189871; See also Lim v. HMRPI, G.R.
incurred, the P100 proceeds of the loan could No. 201483, Aug. 4, 2014)
purchase P100 worth of goods. In 2014 when the
loan is due, P100 can purchase only ½ of the goods c. With stipulation in writing, and the
it could purchase in 2013. Inflation rate is therefore rate has been stipulated – collect the
100%. stipulated rate of interest, subject to the
right of the courts to reduce the rate if
If there is no declaration of extraordinary inflation – unconscionable or iniquitous. (State
Debtor must pay P100 in 2014. Investment House, Inc. v. Court of
Appeals, G.R. No. 112590, Jul. 12,
If courts declare extraordinary inflation – Debtor 2001)
must pay P200 in 2014 so that creditor will get the
same value of his money in 2013 when he lent the 2. By way of penalty (debtor in default)
money. (a) With penalty clause – substitutes
payment of interest, except if it is clearly
stipulated that penalty is in addition to
PAYMENT OF INTEREST interest. (Art. 1226, Civil Code)
(b) Without penalty clause (even if no
NOTE: In loan, ownership is transferred to the interest is stipulated) – collect legal rate
borrower. Creditor merely has the right to an equal of interest by way of penalty for default (no
amount of the same kind and quality. (Art. 1953, more distinction, see above). Liability
Civil Code) arises only from default (unless demand
not necessary, from extrajudicial or judicial
Rules on payment of interest demand). (Eastern Shipping Lines, Inc. v.
1. For use of money, no default Court of Appeals, G.R. No. 97412)
a. Stipulation in writing is required – if
none, no interest is collectible (Art. NOTE: No penalty is collectible during grace
1956, Civil Code) period because debtor is not in default if he is
given time to pay.
b. With stipulation in writing, but the
interest rate is not stipulated – 3. Compounded interest (interest over
interest is legal rate of 6% per annum interest) – applies only if stipulated, or in case
for loans and forbearance of money of judicial demand. (Art. 1959 & 2212, Civil
(decrease from 12% to 6% based on Code).
BSP Circular 799, effective July 1,
2013). The legal rate of interest now is Interest due on the principal amount accruing as
the same for all obligations, including of judicial demand shall SEPARATELY earn

ATENEO CENTRAL
legal interest at the prevailing rate prescribed by payment. Since this is a mere proposal (since
the Bangko Sentral ng Pilipinas, from the time only a debtor can make an application of
of judicial demand UNTIL FULL PAYMENT. payments), the debtor must accept it either
(Lara’s Gifts and Decors v. Midtown Industrial, expressly or impliedly by not objecting to the
G.R. No. 225433) creditor’s proposal, as when the debtor accepts
without objection the receipt issued by the
4. Judgment Debt (Not arising from loans or creditor with an application of payment.
forbearance of money, such as torts) 3. If the debtor makes no application and the
creditor has not made a proposal, or if the
Except in cases where the amount can be application is not valid, then application is made
determined with reasonable certainty, the by operation of law:
amount of obligation may still be unliquidated i. It is to be applied to the most onerous debt
and not yet determined upon filing of the case. (e.g., to an interest bearing debt over debts
The liquidation or the determination of the without interest; to a debt secured by a
amount of the obligation takes place only from mortgage over a debt that is unsecured); or
the time judgment is rendered in the first ii. If all debts are equally onerous or of the
instance. Thus: same burden, or it cannot be determined
i. If the amount of the obligation can be which debt is the most onerous, then the
established with reasonable certainty, payment should be applied pro rata to all
the interest runs from extrajudicial or the obligations due. (Art. 1252-1254, Civil
judicial demand (default) – [at the discretion Code)
of the court] at the rate of 6% p/a, up to time
decision becomes final and until fully paid. Q: Article 1176 provides that: “The receipt of the
(Republic v. de Guzman, G.R. No. 175021) principal by the creditor, without reservation with
ii. If the amount of the obligation cannot be respect to the interest, shall give rise to the
established with reasonable certainty, presumption that said interest has been paid.”
interest will run only from the time judgment Article 1253 states that: “If the debt produces
is rendered in the first instance at the rate interest, payment of the principal shall not be
6% up to time of payment. (Eastern deemed to have been made until the interests have
Shipping Lines, Inc. v. Court of Appeals, been covered.” How are these two rebuttable
G.R. No. 97412) presumptions reconciled?
SPECIAL RULES/FORMS OF PAYMENT A: Article 1176 should be treated as a general

presumption subject to the more specific
APPLICATION OF PAYMENTS presumption under Article 1253. Article 1176 applies
The designation of the debt which payment shall be when there is doubt as to whether interest is waived
made, out of 2 or more debts owing the same because the creditor accepts the payment for the
creditor. (Art. 1252, Civil Code) principal without reservation with respect to the
interest. Here, the creditor is presumed to have
Requisites (OTD) waived the right to collect interest. Article 1254 has
1. There must be only One debtor and only one no issue on waiver of interest because it is a given
creditor; under this Article that the debt produces interest.
2. Two or more debts of the same kind; and The doubt is on whether the amount received by the
3. All debts must be Due. (Art. 1252, Civil Code) creditor is payment for the principal or the interest.
Article 1253 resolves this doubt by providing a
Exception on 3rd requisite: There may be hierarchy: payments shall first be applied to the
application of payment even if all debts are not interest; payment shall then be applied to the
yet due if: principal only after the interest has been fully paid.
i. Parties so stipulate (Marquez v. Elisan Credit Corporation, G.R. No.
ii. When application of payment is made by 194642)
the party for whose benefit the term has
been constituted (Art. 1252, Civil Code) DATION IN PAYMENT (Dacion en pago) (Art.
1245, Civil Code)
How application is made:
1. Debtor makes the designation Definition – a mode of extinguishing an obligation
2. If not, creditor proposes to make the application whereby the debtor pays a monetary obligation with
by advising the debtor or through certain acts property. It is a special form of payment because
such as issuing a receipt with an application of

ATENEO CENTRAL
one element of payment is missing: Identity. silence, consider the thing as equivalent to the
(PARAS 380 (2016)) obligation, in which case the obligation is totally
extinguished.” (Luzon Development Bank v.
Dation in payment extinguishes the obligation to Enriquez, G.R. No. 168646, 2011)
the extent of the value of the thing delivered, either
as agreed upon by the parties or as may be proved, CESSION OR ASSIGNMENT (in favor of
unless the parties by agreement – express or creditors) (Art. 1255, Civil Code)
implied, or by their silence – consider the thing as
equivalent to the obligation, in which case the The process by which a debtor transfers ALL his
obligation is totally extinguished. (Tan Shuy v. assets which are not subject to execution in favor of
Maulawin, G.R. No. 190375, 2012) creditors, so that the latter may sell them and apply
the proceeds to his outstanding obligations. Except
The contractual intention determines whether the if there is contrary agreement, or as may be
property subject of the dation will be considered as provided by law, the obligations are extinguished
the full equivalent of the debt and will therefore only up to the net amount of the proceeds of the
serve as full satisfaction for the debt. (Luzon Dev sale. (PARAS 417 (2016))
Bank v. Enriquez, G.R. No. 168646, 2011)
Kinds of Assignment
Law on Sales Apply a. Legal – governed by the insolvency law
The law on sales will apply in case of dacion en pago b. Voluntary – agreement of creditors
since it partakes of the nature of sale – with the (PARAS 417 (2016))
creditor purchasing the thing or property of the
debtor, the payment of which is charged to the Requisites of Voluntary Assignment: (DACCI)
debtor’s obligation. It extinguishes the obligation to 1. More than one Debt
the extent of the value of the thing delivered. (Tan 2. More than one Creditor
Shuy v. Maulawin, G.R. No. 190375, 2012) 3. Insolvency of debtor
4. Abandonment of all debtor’s property not
As in a contract of sale, valuation should be agreed exempt from execution
upon by the creditor as buyer, and the debtor as 5. Acceptance or Consent on the part of the
seller. It is also subject to the usual warranties of creditors (PARAS 417 (2016))
sale. (4 TOLENTINO 294 (1991))
Effects of Assignment
Requisites: (PAD) (a) Creditors do not become the owner of the
1. There must be the Performance of the properties; they are merely assignees with
prestation in lieu of payment which may consist authority to sell (hence, the legal contract
in the delivery of a corporeal thing or a real right involved is one of Agency and not Sale);
or a credit against the third person (b) Debtor is released up to the amount of the net
2. There must be some Difference between the proceeds of the sale, UNLESS there is a
prestation due and that which is given in stipulation to the contrary
substitution (c) Creditors will collect credits in the order of
3. There must be an Agreement between the preference agreed upon, or in default of
creditor and debtor that the obligation is agreement, in the order ordinarily established
immediately extinguished (to the extent of by law (PARAS 417-418 (2016))
agreed valuation) by reason of the performance
of a prestation different from that due. (DE Dation in Payment v. Cession in Payment
LEON 321 (2014)) DATION IN CESSION IN
PAYMENT PAYMENT
Intent is Controlling (Art. 1245) (Art. 1255)
Like in all contracts, the intention of the parties to the One creditor Plurality of creditors
dation in payment is paramount and controlling. The
contractual intention determines whether the NOT necessarily in Debtor must be
property subject of the dation will be considered as state of financial insolvent
the full equivalent of the debt and will therefore difficulty
serve as full satisfaction for the debt. “The dation in Thing delivered is Universality of property
payment extinguishes the obligation to the extent of considered as of debtor is what is
the value of the thing delivered, either as agreed equivalent of ceded
upon by the parties or as may be proved, unless the performance
parties by agreement, express or implied, or by their Payment extinguishes Merely releases debtor
obligation to the extent up to the net proceeds

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of the value of the thing of things ceded or (c) Before creditor accepts or before judge
delivered as agreed assigned, unless there declares consignation has been properly made,
upon is a contrary intention obligation remains (debtor bears risk of loss at
(DE LEON 356-357 (2014)) the meantime, and after acceptance by creditor
or after judge declares that consignation has
TENDER OF PAYMENT AND CONSIGNATION been properly made – risk of loss is shifted to
(Art. 1256, Civil Code) creditor) (PARAS 433 (2016))
Tender When Consignation Extinguishes Obligation

The act of offering to the creditor what is due him Consignation is completed at the time the creditor
together with a demand that the creditor accepts the accepts the same without objections, OR, if he
same. (PARAS 419 (2016)) objects, at the time the court declares that it has
been validly made in accordance with law. (Dalton
If the creditor refuses w/o just cause to accept v. FGR Realty and Development Corporation, G.R.
payment, he becomes in mora accipiendi and tender No. 172577, 2005)
alone will not extinguish the obligation; consignation
is needed. (Co v. PNB, G.R. No. L-51767, 1982) Tender of payment vs. Consignation
TENDER OF CONSIGNATION
Consignation PAYMENT
The act of depositing the thing due with the court or Antecedent act; Principal act; produces
judicial authorities whenever the creditor refuses to preparatory the effects of payment
accept payment, and generally requires prior tender Extrajudicial Judicial
of payment. (RUBEN E. AGPALO, OBLIGATIONS AND (PARAS 419-420 (2016))
2. Loss of the Thing Due or Impossibility
Requisites of Valid Consignation (VUPAS) of Performance
1. Existence of Valid debt;
2. Creditor has Unjustifiably refused to accept Includes partial or total loss of the thing (Arts. 1262
payment, i.e., previous valid tender; & 1264, Civil Code)
3. Prior notice of Consignation had been given to
the person interested in performance of LOSS OF THE THING DUE
obligation (1st notice) (Art. 1257, Civil Code) (a) When the object perishes (physically)
4. Actual deposit/consignation with proper judicial (b) When it goes out of commerce
authorities (c) When it disappears in such a way that: its
5. Subsequent notice of Consignation (2nd notice) existence is unknown or it cannot be recovered
(DE LEON 359-360 (2014)) (Art. 1189, Civil Code)
Exception on 2nd requirement, i.e., where Effect of Loss in Obligation to Deliver a

consignation w/o prior tender allowed (Art. Specific Thing
1256, Civil Code): If loss was due to fortuitous events, obligation is
i. Creditor absent or unknown/ does not appear at extinguished; no damages.
the place of payment
ii. Incapacitated to receive payment at the time it If the loss is due to the fault of the debtor or any
is due person, that person should be held liable for
iii. Refuses to issue receipt w/o just cause damages. (PARAS 438 (2016))
iv. 2 or more creditors claiming the same right to
collect Effect of Loss in Obligation to Deliver a Generic
v. Title of obligation has been lost Thing
vi. Debtor had previously been notified by the General rule: Loss does NOT extinguish obligation.
creditor that the latter would not accept any Genus numguam perit: “Genus never perishes.”
payment (Kapisanan Banahaw, Inc. v. Dejarme,
G.R. No. L-32908, 1930) Exceptions:
i. Loss of entire genus (e.g., when sale of a
Effects of Consignation certain class of things become illegal)
(a) Debtor may ask judge to order cancellation of ii. Loss of entire group of limited generic
obligation obligation (e.g., I will deliver “one of my
(b) Running of interest is suspended cars” and all cars are not lost through force
majeure. (See BALANE 400 (2020)

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becomes manifestly beyond the intention of the

Effect of Partial Loss parties. (4 TOLENTINO 336 (1991))
1. When loss is significant – may be enough to
extinguish obligation Requisites of Rebus Sic Stantibus: (FoDAF)
2. When loss insignificant – NOT enough to 1. The event or change could not have been
extinguish obligation (DE LEON 377 (2014)) Foreseen at the time of the execution of the
contract
NOTE: When thing is lost in the possession of the 2. The performance is extremely Difficult, but NOT
debtor, it is presumed to be due to debtor’s fault; impossible (because if it is impossible, it is
Exceptions: natural calamity, earthquake, flood, extinguished by impossibility)
storm. (Art. 1265, Civil Code) 3. The event was not due to the Act of any of the
parties
IMPOSSIBILITY OF PERFORMANCE 4. The contract is for a Future prestation (4
TOLENTINO 347 (1991))
(a) Physical impossibility – it is not within man’s
capability The difficulty of performance contemplated should
(b) Legal impossibility – when the prestation is be such that one party would be placed at a
prohibited by law disadvantage by the unforeseen event. Mere
(c) Moral impossibility – when the service has inconvenience, or unexpected impediments, or
become so burdensome that it could not have increased expenses did not suffice to relieve the
been the intention of the parties (Art. 1267, Civil debtor from a bad bargain. (Tagaytay Realty v.
Code) Gacutan G.R. No. 160033, 2015)
Effect of Subsequent Impossibility of Article 1267 grants the courts the power of relief, but
Performance in Obligation to Do not of revision. The Courts do not have the authority
Debtor is released when the prestation becomes to remake, modify or revise the terms and conditions
legally or physically impossible without fault on the of the contract. (Occena v. Hon. Jabson, G.R. No.
part of the debtor. (Art. 1266, Civil Code) L-44349, 1976)
NOTE: The obligation must be possible and legal Art. 1267 is not restricted to obligations to do. The
when agreed upon by the parties. The impossibility term “service” should be understood as referring to
must occur after the constitution of the obligation. the “performance of the obligation”, a phrase which
Otherwise, the obligation is void from the beginning encompasses all obligations. (NATELCO v. Court of
and there is nothing to be extinguished. (DE LEON Appeals, G.R. No. 107112, 1994)
364 (2019))
Mere inconvenience, unexpected impediments,
NOTE: increased expenses, or even pecuniary inability to
Judicial determination of extent is necessary fulfill an engagement, will not relieve the obligor from
an undertaking that it has knowingly and freely
Doctrine of Unforeseen Events: The court is contracted. The closure of respondent's business
authorized to release the obligor, in whole or in part, was neither a fortuitous nor an unforeseen event
when the service has become so difficult as to be that rendered the lease agreement functus officio.
manifestly beyond the contemplation of the parties. (Sps Poon v. Prime Savings Bank, G.R. No.
(Art. 1267, Civil Code; DE LEON 389 (2014)) 183794, 2016)
Doctrine of Subjective Impossibility: The
3. Condonation or Remission of Debt
obligation undoubtedly becomes impossible if there
is no physical or legal loss but the object obligation
Condonation – An act of liberality by which the
belongs to another person; the obligor must
creditor renounces the enforcement of the obligation
indemnify the obligee for the damages suffered by
contracted in his favor. To condone is to forgive or
the latter. (4 TOLENTINO 336 (1991))
to remit a debt. (Bañez v. Young, L-4635, 1952)
Rebus Sic Stantibus: The agreement is valid only
Remission – An act of liberality by virtue of which
if the same conditions prevailing at time of
the obligee, without receiving any price or
contracting continue to exist at the time of
equivalent, renounces the enforcement of the
performance. Obligor may be released in whole or
obligation, as a result of which it is extinguished in
in part if the conditions have changed so that it
its entirety or in that part or aspect of the same to
which the remission refers (Manresa). In brief, “it is

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the gratuitous abandonment by the creditor of his 2. Merger must be Clear and definite.
right” (4 TOLENTINO 353 (1991)) 3. Only One obligation is involved. (PARAS 456
(2016))
Requisites (CapRe-FLAgS)
1. There must be an Agreement Confusion does not extinguish a joint obligation,
2. There must be a Subject matter (object of the except as regards the share corresponding to the
remission, otherwise there would be nothing to creditor or debtor in whom the 2 characters concur.
condone) (Art. 1277, Civil Code)
3. Cause of consideration must be Liberality
(Essentially gratuitous, an act of liberality) 5. Compensation
4. Parties must be Capacitated and must consent;
requires acceptance by obligor; implied in A mode of extinguishment up to the concurrent
mortis causa and express in inter vivos amount of the obligation of persons who, in their
condonations. own right, have become mutual debtors or creditors
5. Formalities of a donation are required in the of one another. (JURADO 309 (2010))
case of an express remission or condonation
6. Revocable – subject to rule on inofficious Requisites (LM-STD):
donations. (PARAS 448 (2016)) 1. Both parties must be Mutual creditors and
debtors - in their own right and as principals.
Examples of Implied Condonation, Waiver of 2. Both debts must consist in Sum of money or if
Right to Collect consumable, of the same kind or quality.
1. Voluntary delivery of evidence of 3. Both debts are Due.
indebtedness – when evidence of 4. Both debts are Liquidated and demandable
indebtedness is found in the possession of the (determined).
debtor – there is a rebuttable presumption of 5. Neither debt must be retained in a controversy
voluntary delivery (Art. 1272, Civil Code), which commenced by Third person and
if not rebutted, will create the presumption of communicated w/ debtor (neither debt is
waiver condonation (remission) which in effect garnished). (Art. 1279, Civil Code)
extinguishes the debt. (Art. 1271 (1), Civil Code)
A claim is liquidated when the amount and time of
EXCEPTION: when the waiver is inofficious. payment is fixed. If acknowledged by the debtor,
(Art. 1271 (2), Civil Code) although not in writing, the claim must be treated as
liquidated. When the defendant, who has an
Defense to the claim of inofficiousness: the unliquidated claim, sets it up by way of counterclaim,
delivery of the document was made in virtue of and a judgment is rendered liquidating such claim, it
payment of the debt. (Art. 1271 (2), Civil Code) can be compensated against the plaintiff’s claim
from the moment it is liquidated by judgment.
2. If there if actual proof, or the presumption above Compensation takes place only if both obligations
is not rebutted, that the evidence of are liquidated. (Lao v. Special Plans, Inc., G.R. No.
indebtedness was returned by the creditor to 164791, 2010)
the debtor, there is a presumption of waiver
(a) If in hands of joint debtor – only his share is Kinds of Compensation
condoned. (a) Legal – by operation of law; as long as 5
(b) If in hands of solidary debtor – whole debt requisites concur – even if unknown to parties;
is condoned. if not equal debts, only up to concurring amount.
(c) Tacit – voluntary destruction of instrument
by creditor; made to prescribe w/o Legal compensation takes place by operation of
demanding. (Art. 1271, Civil Code) law when all the requisites are present, as
opposed to conventional subrogation which
4. Confusion takes place when the parties agree to
compensate their mutual obligations even in the
The character of debtor and creditor is merged in absence of some of the requirements.
same person with respect to same obligation.
(JURADO 306 (2010)) (b) Conventional – based on agreement of parties,
even if the other requirements are not complied
Requisites of Merger of Rights: (COP) with.
1. It must take place between Principal debtor and
principal creditor only.

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Conventional compensation takes place when (b) Against a creditor who has a claim for support
the parties agree to compensate their mutual due by Gratuitous title, without prejudice to
obligations even in the absence of some Article 301 par. 2 (Art. 1287, Civil Code)
requisites. (Mondragon Personal Sales Inc. v. (c) If one of the debts consists in civil liability arising
Sola Jr., G.R. No. 174882, 2013) from a Penal offense. (Art. 1288, Civil Code)
a. BUT NOTE: The bailor or depositor is
(c) Facultative – only one party may invoke the allowed to invoke legal compensation
compensation, such as the person who has the (DE LEON 422 (2019))
benefit of the period who can invoke it even (d) Obligation to pay Taxes is not compensable
before the period has arrived. with the government’s obligations to the
taxpayer. (Francia v. IAC, G.R. No. L-67649,
(d) Judicial – set off takes place upon order of the 1988).
court; needs pleading and proof; all
requirements must concur, EXCEPT Taxes cannot be subject to compensation for the
liquidation. simple reason that the government and the taxpayer
are not creditors and debtors of each other. There is
(e) Total – when 2 debts are of the same amount. a material distinction between a tax and debt. Debts
are due to the Government in its corporate capacity,
(f) Partial –when 2 debts are not of the same while taxes are due to the Government in its
amount. (PARAS 461 (2016)) sovereign capacity. (United Airlines, Inc. v.
Commissioner of Internal Revenue, G.R. No.
Effect of Assignment of Credit to Third Person: 178788, 2010)
Can There Still be Compensation?
1. If made after legal compensation has set in 6. Novation
– no effect; compensation has already
extinguished the obligation, so there is nothing Novation - Extinguishment of obligation by creating/
to assign. substituting a new one in its place
2. If made before legal compensation has set (a) Changing object or principal conditions
in: (b) Substituting person of debtor
(a) With consent of debtor – debtor is estopped (c) Subrogating 3rd person to the rights of the
UNLESS he reserves his right to creditor (Art. 1291, Civil Code)
compensate and gave notice to assignee
(b) With knowledge but w/o consent of debtor Requisites of novation: (VICN)
– compensation may be set up as to debts 1. There must be a previous Valid obligation;
maturing prior to assignment 2. Intent to extinguish the old and substitute it with
(c) W/o knowledge – compensation may be the new obligation, whether expressed, or
set-up on all debts prior to his knowledge implied as when the two obligations are
(Art. 1285, Civil Code) inconsistent and cannot stand together.
3. Capacity and consent of the parties to the new
Compensation vs. Confusion obligation; and
COMPENSATION CONFUSION 4. Valid New obligation. (Antonio Garcia, Jr. v. CA,
Different persons are Only 1 person who is G.R. No. 80201, 1990)
involved; each is a creditor and debtor of
debtor and creditor of himself Novation is never presumed, there must be an
each other express intention to novate. The creditor’s
Two obligations One obligation acceptance of another check, which replaced an
Indirect payment No need to pay oneself earlier dishonored check, does not result in novation
(DE LEON 416-417 (2014)) where there was no express agreement to establish
that the debtor was already discharged from his
liability. (Salazar v. J.Y. Brothers Marketing
Obligations not allowed to be Compensated
Corporation, G.R. No. 171998, 2010)
(Co-PGT)
(a) When one of the debts arises from a depositum
Novation can be done without the knowledge or
or from the obligations of a depositary or of a
even against the will of the original debtor, but not
bailee in Commodatum. (Art. 1287, Civil Code)
without the consent of the creditor (Interport
a. BUT NOTE: Only the bailor or
Resources Corporation v. Securities Specialist, In.
depositor is allowed to invoke legal
G.R. No. 154069, 2016)
compensation (DE LEON 420-421
(2019))

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Effects of Novation
GR: It extinguishes the old obligation and a new Kinds of Novation:
one is created in its place. (a) Real / objective – When there is a change in
Exception: the object, cause/consideration or principal
(a) Modificatory novation only, in which case condition. (PINEDA 332 (2009))
the old obligation remains, as amended by (b) Personal / subjective
the new (Swagman Hotels and Travels, Inc. Substituting person of debtor (passive).
v. CA, G.R. No. 161135, 2005) (PINEDA 332 (2009))
(b) Old obligation is void
Conversely, the old obligation subsists if i. Expromision: initiative is from a 3rd
the new obligation is void or is voidable and person or new debtor who agrees to
later annulled. (4 TOLENTINO 397 (1991)) assume the obligation of the old debtor,
with the consent of the creditor. The old
Novation, in its broad concept, may either be debtor’s consent is not required and upon
extinctive or modificatory. assumption by the new debtor of the debt,
• It is extinctive when an old obligation is the old debtor is released from liability.
terminated by the creation of a new obligation Since the old debtor does not consent, his
that takes the place of the former; it is merely liability cannot be revived even if the new
modificatory when the old obligation subsists to debtor becomes insolvent or cannot pay
the extent that it remains compatible with the the obligation. It is however important that
amendatory agreement. the creditor and the new debtor agree to
• An extinctive novation results either by release the old debtor, otherwise the “new”
changing the object or principal conditions debtor only becomes a co-debtor and no
(objective or real), or by substituting the person novation takes place.
of the debtor or subrogating a third person in the
rights of the creditor (subjective or personal). ii. Delegacion: initiative of old debtor who
(Banate v. Philippine Countryside Rural Bank “delegates” his obligation to a new
(Liloan, Cebu), Inc., G.R. No. 163825, 2010) debtor; In this case all the parties must
consent. The old debtor’s liability is
There is novation when there is an irreconcilable generally not revived in case of the
incompatibility between the old and new obligations. insolvency of the old debtor UNLESS: the
There is no novation in case of only slight new debtor’s insolvency already existed at
modifications, in which case, the old obligation still the time of the delegacion AND (1) it was of
subsists. (Heirs of Franco v. Spouses Gonzales, public knowledge, or (2) the old debtor
G.R. No. 159709, 2012) knew of the insolvency of the new debtor at
the time of delegacion. (PINEDA 341 (2009))
Novation does not extinguish criminal liability
(Philippine National Bank v. Soriano, G.R. 164051, Parties:
2012) (a) Delegante – old debtor
(b) Delegatario – creditor
Effect of Conditions in Either Old or New (c) Delegado – new debtor. (PARAS 508
Obligation: (2016))
(a) If old obligation is conditional
i. If resolutory and it occurred – old Expromision vs. Delegacion
obligation already extinguished; no new EXPROMISION DELEGACION
obligation is created since there is nothing Intention: old debtor be released from the
to novate obligation
ii. If suspensive – the condition must Consent of creditor required on both
happen, otherwise there is no old obligation Consent of creditor and Consent of debtor
to novate. (4 TOLENTINO 399 (1991)) third person (initiates), creditor
and third person;
(b) If the new obligation is conditional: need NOT be given
i. If resolutory – valid simultaneously
ii. If suspensive – the condition must Governed by the rules of Same applies in the
happen, otherwise there is no new payment by third persons absence of an
obligation to replace the old, so that the old agreement
obligation remains subsisting. (4 If w/o knowledge of Subrogation
TOLENTINO 397 (1991)) debtor, beneficial

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reimbursement, no P5,000 only (i.e., A’s share of the debt), not for the
subrogation remaining P5,000 (i.e., B’s share of the debt), which
New debtor's insolvency Same UNLESS the is extinguished by confusion or merger of rights. (DE
does NOT make old new debtor’s LEON 459 (2019))
debtor liable insolvency already
existed at the time of Payment by 3rd Person v. Change of Debtor
the delegacion AND DIFFERENCE CHANGE OF DEBTOR
(i) it was of public FROM PAYMENT
knowledge, or (ii) the BY 3RD PERSON
old debtor knew of Debtor is NOT Old debtor is released
the insolvency of the necessarily
new debtor at the released from debt
time of delegacion. Creditor is not Needs consent of creditor:
(PINEDA 341-343 (2009)) bound to accept express or implied
payment, unless
(c) Subrogating 3rd person to rights of creditor there is stipulation
(active) to the contrary (Art.
i. Conventional – agreement and consent of 1236, Civil Code)
all parties; clearly established (Arts. 1300- 3rd person can make New debtor is obliged to
1301, Civil Code) payments less than pay the full remaining
ii. Legal – takes place by operation of law; no the amount of the amount of the obligation
need for consent; NOT presumed except obligation and
as provided for in law: (Arts. 1300 & 1302, cannot be held
Civil Code) liable for the
deficiency
When Subrogation is Presumed (Art. 1302, Civil
Code) Conventional Subrogation Vs. Assignment
i. Creditor pays another preferred creditor even CONVENTIONAL ASSIGNMENT OF
w/o debtor’s knowledge SUBROGATION RIGHTS
Governed by Arts. Governed by Arts. 1624
Example: 1300-1304 to 1627
A owes B P20,000 secured by a first mortgage Debtor’s consent is Debtor’s consent is NOT
on the land of A. A also owes C P30,000.00, required required, but must be
which is unsecured or secured by a second notified in order to be
mortgage. Under the law, B, who is a preferred bound
creditor, has preference to payment with Extinguishes the Transmission of right of
respect to the land as against C who is only an obligation and gives the creditor to third
ordinary creditor. If C pays the debt of A to B, C rise to a new one person without modifying
will be subrogated in B’s rights. C can now or extinguishing the
foreclose the mortgage in case A fails to pay his obligation
debt to B. (DE LEON 458 (2019)) Defects and vices in Defects and vices in the
the old obligation are old obligation are NOT
ii. 3rd person not interested in obligation pays w/ cured cured
approval of debtor
(PINEDA 354-355 (2009))
Example:
Novation arising from a purported change in the
A owes B P10,000. C pays B with the express
person of the debtor must be clear and express
or implied consent of A. Here, C will be
because it is never presumed. A conversion from a
subrogated in the rights of B. (DE LEON 458
partnership to a corporation, without sufficient
(2019))
evidence that they were expressly released from
their obligations, does not make a new corporate
iii. Person interested in fulfillment of obligation
personality, a third person or new debtor within the
pays debt even w/o knowledge of debtor
context of a subjective novation. (Ajax Marketing
and Development Corporation v. Court of Appeals,
Example:
G.R. No. 118585, 1995)
A and B are joint debtors of C for the amount of
P10,000. Without A knowing, B pays the debt of
P10,000. Here, B becomes a creditor of A for

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The obligation to pay a sum of money is not novated

by an instrument that expressly recognizes the old,
changes only the terms of payment, adds other
obligations not incompatible with the old ones, or the
new contract merely supplements the old one.
(Foundation Specialists Inc. v. Betonval Ready
Concrete, G.R. No. 170674, 2009)
Novation is not a ground under the law to extinguish

criminal liability. The legal effect of novation is
limited in its effect only to the civil aspect of the
liability. The role of novation may only be either to
prevent the rise of criminal liability, or to cast doubt
on the true nature of the original basic transaction,
whether or not it was such that the breach of the
obligation would not give rise to penal responsibility,
as when money loaned is made to appear as a
deposit, or other similar disguise is resorted to.
(Narciso Degańos v. People, G.R. No. 162826,
2013)

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exist only when they are expressly

II. CONTRACTS provided for by the parties (DE LEON p.
536-537 (2019))
A. GENERAL PROVISIONS Stages of Contracts
1. Definition of a Contract (i) PREPARATION/NEGOTIATION
A contract is a meeting of minds between two Period from the time the prospective contracting
persons whereby one binds himself, with respect to parties indicate their interest in the contract to the
the other, to give something or to render some time the contract is perfected.
service (Art. 1305, Civil Code).
(ii) PERFECTION/BIRTH
Contract vs. Obligation
Contract is one of the sources of obligations (Art. Consensual contracts
1157, Civil Code). On the other hand, obligation As a general rule, contracts are perfected by mere
is the legal tie or relation itself that exists after a consent of the parties regarding the subject matter
contract has been entered into. Hence, there can and the cause of the contract. (Arts. 1315, 1319,
be no contract if there is no obligation. But an
Civil Code) They are obligatory in whatever form
obligation may exist without a contract. (De Leon
they may have been entered into, provided all the
p. 466 (2019))
essential requisites for their validity are present.
2. Elements of a Contract (Art. 1356, Civil Code)
Classes of Elements of a Contract Real contracts

1. Essential Elements or those without The exceptions are real contracts, which are
which no contract can validly exist. They perfected not merely by consent but by the actual or
are also known as requisites of a constructive delivery of the object of the obligation.
contract. They may be subdivided into: (Art. 1316, Civil Code)
Common - or those present in all
Example: Depositum, pledge, commodatum
contracts, namely, consent, object, and
(Hector S. De Leon & Hector M. De Leon, Jr.,
cause (Art. 1318, Civil Code); and
Comments and Cases on Obligations and Contracts
Special - or those not common to all 493 (2019)
contracts or those which must be present
only in or peculiar to certain specified
Formal/Solemn contracts
contracts, and such peculiarity may be, When the law requires that a contract be in some
as regards to: form to be valid (Art. 1356, Civil Code), this special
a. Form form is necessary for its perfection
b. Subject-matter
c. Consideration or cause Example: Donation of real property, (Art. 749, Civil
Code), donation of personal property the value of
2. Natural Elements or those that are
presumed to exist in certain contracts which exceeds P5,000.00 (Art. 748, Civil Code),
unless the contrary is expressly sale of land through an agent (Art. 1874, Civil Code),
stipulated by the parties, like warranty contract of antichresis (Art. 2134, Civil Code),
against eviction (Art. 1548, Civil Cod); or stipulation to pay interest (Art. 1956, Civil Code),
warranty against hidden defects in sale contract of partnership (Arts. 1771, 1773, Civil
(Art. 1561, Civil Code); and Code), transfer or sale of large cattle (Act No. 1147,
Sec. 22), Negotiable instruments (Act No. 2031,
3. Accidental Elements or the particular Sec. 1). (Hector S. De Leon & Hector M. De Leon,
stipulations, clauses, terms, or conditions Jr., Comments and Cases on Obligations and
established by the parties in their contract
Contracts 637 (2019)
(Art. 1306, Civil Code), for the purpose of
clarifying, restricting, or modifying its
legal effects, like conditions, period, (iii) CONSUMMATION
interest, penalty, etc. and, therefore, they

ATENEO CENTRAL
Period when the parties perform their respective made (e.g., agency, partnership) (PINEDA 36
undertaking under the contract, culminating in the (2009))
extinguishment thereof. (Hector S. De Leon &
Hector M. De Leon, Jr., Comments and Cases on As to parties obliged
Obligations and Contracts 637 (2019) 1. Unilateral – only one of the parties has an
obligation (PINEDA 366 (2009))
Negotiation begins from the time the prospective 2. Bilateral – both parties are required to render
contracting parties manifest their interest in the reciprocal prestations (Art. 1191, Civil Code)
contract and ends at the moment of agreement of
the parties. The perfection or birth of the contract As to form
takes place when the parties agree upon the 1. Common or informal – require no particular
essential elements of the contract. The last stage is form (Art. 1356, Civil Code)
the consummation of the contract where the parties 2. Special or formal – require some particular
fulfill or perform the terms they agreed on,
form (Art. 1356, Civil Code)
culminating in its extinguishment. (International
Freeport Traders, Inc. v. Danzas Intercontinental,
Inc., G.R. No. 181833, 2011) As to their purpose
1. Transfer of ownership
2. Conveyance of use
Classifications
3. Rendition of service (TOLENTINO 410-411
(1991))
As to perfection or formation
1. Consensual – perfected by mere consent of
As to their subject matter
the parties on the subject matter and cause (Art.
1. Things
1315, Civil Code) (e.g., contract of sale)
2. Services (TOLENTINO 410-411 (1991))
2. Real – perfected by delivery (Art. 1316, Civil
Code) (e.g., commodatum, pledge, deposit)
3. Formal/Solemn – require a certain specified As to the risk involved
form, in addition to consent, subject matter and 1. Commutative – when the undertaking of one
cause (Art. 1356, Civil Code) (e.g., donation of party is considered the equivalent of that of the
real property) other (e.g., sale, lease)
2. Aleatory – when it depends upon an uncertain
As to cause event or contingency both as to benefit or loss
1. Onerous – The cause is, for each contracting (e.g., insurance, sale of hope) (JURADO 361
party, the prestation or promise of a thing or (2010))
service by the other (e.g., contract of sale) (Art.
1350, Civil Code)
2. Remuneratory– The cause is some past As to the name or designation
service or benefit which by itself is a 1. Nominate – those which have a specific name
recoverable debt (Art. 1350, Civil Code) or designation in law (e.g., lease, sale, agency,
a. Note: In a remuneratory donation, the etc.)
past service or debt is not by itself a 2. Innominate – those which have no specific
recoverable debt. (Art. 726, Civil Code) designation or name in law (Art. 1307, Civil
3. Gratuitous (or contracts of pure Code)
beneficence) – founded on the mere liberality
a. Do ut des – I give that you may give
of the benefactor (e.g., pure donation) (Art.
1350, Civil Code) b. Do ut facias – I give that you may do
c. Facio ut des – I do that you may give
As to importance or dependence of one upon i. Note: Do ut des is, however,
another no longer an innominate
1. Principal – when the contract does not depend contract. It has already been
for its existence and validity upon another
given a name of its own, i.e.,
contract (e.g., sale, lease)
2. Accessory – depends on another contract for barter or exchange. (Art.
its existence and validity (e.g., mortgage, 1638, Civil Code)
guaranty) d. Facio ut facias – I do that you may do
3. Preparatory – the contract is entered into as a (PINEDA 380 (2009))
means through which future contracts may be

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Auto Contracts In case of doubt concerning the surrounding

Only one person represents two opposite parties, circumstances in the execution of a contract, the
but in different capacities. (PINEDA 367 (2009)) least transmission of rights and interest shall prevail
if the contract is gratuitous, and if onerous, the doubt
Example: An agent representing his principal sells is to be settled in favor of greatest reciprocity. (Art.
a specific car to himself, as a buyer 1378, Civil Code)
Collective Contracts The terms of an agreement or writing are presumed

The will of the majority binds the minority to an to be have been used in their primary and general
agreement notwithstanding the opposition of the acceptation. However, evidence may be admitted to
latter. (4 TOLENTINO 437 (1991)) show that they have a local, technical, or otherwise
peculiar signification and were used and understood
Example: Collective bargaining contracts by labor in that particular instance, in which case, the
organizations under R.A. No. 875. agreement or writing must be construed
accordingly. (Rule 130, Sec. 15, Revised Rules on
Contracts of Adhesion Evidence)
One party imposes a ready-made form of contract
which the other party may accept or reject but Only laws existing at the time of the execution of a
cannot modify; one party prepares the stipulation in contract are applicable to it and not the later statutes
the contract, while the other party merely affixes his unless the latter are specifically intended to have
signature or his “adhesion” thereto, giving no room retroactive effect. (Vive Eagle Land, Inc. v. Court of
for negotiation and depriving the latter of the Appeals, G.R. No. 150308, 2004)
opportunity to bargain on equal footing (Polotan, Sr.
v. CA, G.R. No. 119379, 1998); construed strictly When there are several provisions in a contract, the
against the one who drafted the same (Geraldez v. construction to be adopted should be that one which
CA, G.R. No. 108253, 1994). will give effect to all provisions. A contract must be
read in its entirety. (Rigor v. Consolidated Orix
NOTE: It bears stressing that a contract of Leasing Finance Corporation, G.R. No. 136423,
adhesion is just as binding as ordinary contracts. It 2002)
is true that we have, on occasion, struck down such
contracts as void when the weaker party is imposed The ambiguity in a contract should be construed
upon in dealing with the dominant bargaining party against the party who caused the same. (Art. 1377,
and is reduced to the alternative of taking it or Civil Code)
leaving it, completely deprived of the opportunity to
bargain on equal footing, Nevertheless, contracts of B. BASIC PRINCIPLES OF CONTRACTS
adhesion are not invalid per se; they are not entirely
prohibited. The one who adheres to the contract is 1. Obligatory Force of a Contract
in reality free to reject it entirely; if he adheres, he
gives his consent. (Rizal Commercial Banking Concept: Obligations arising from contracts have
Corporation v. CA, G.R. No. 133107, 1999) the force of law between the contracting parties and
should be complied with in good faith. (Art. 1159,
Interpretations of Contracts Civil Code)
If the terms of the agreement are clear and 2. Autonomy or Freedom to Stipulate
unequivocal, their plain and literal meanings should
be followed. (Art. 1370, Civil Code) Concept: Parties may freely enter into any
stipulations provided they are not contrary to law,
In the construction or interpretation of an instrument, morals, good customs, public order or public policy.
the intention of the parties is primordial and is to be (Art. 1306, Civil Code)
pursued. (Josefina Valdez v. Court of Appeals, G.R.
No. 140715, 2004) Literal meaning
The terms of the contracts determine the respective
In order to judge the intention of the contracting obligations of the parties. If the terms of the contract
parties, their contemporaneous and subsequent are clear and leave no doubt upon the contracting
acts shall be principally considered. (Art. 1371, Civil parties’ intention, such terms should be applied in
Code) their literal meaning. (Art. 1370, Civil Code)
3. Binding Effect of a Contract

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the materialmen from being taken

Concept: Neither party may unilaterally evade his advantage of by unscrupulous
obligation in the contract, unless the contract contractors and from possible
authorizes it or the other party assents. (PINEDA connivance between owners and
385 (2009)) contractors. Thus, a constructive
vinculum or contractual privity is
4. Privity of Contract or Principle of created by the provision, by way of
Relativity exception to the principle underlying
Article 1311 between the owner, on the
Concept: Contracts take effect only between the one hand, and those who furnish labor
parties, their assigns and heirs, except in case and/ or materials, on the other. (Pepito
where the rights and obligations arising from the Velasco v. Court of Appeals, L-47544,
contract are not transmissible by their nature, or by 1980); (DE LEON p. 500-501(2019))
stipulation or by provision of law. The heir is not
liable beyond the value of the property he received 5. Consensuality of Contracts
from the decedent.
Contracts are perfected by mere consent, and from
If a contract should contain some stipulation in favor that moment the parties are bound not only to the
of a third person, he may demand its fulfillment fulfillment of what has been expressly stipulated but
provided he communicated his acceptance to the also to all the consequences which, according to
obligor before its revocation. A mere incidental their nature, may be in keeping with good faith,
benefit or interest of a person is not sufficient. The usage and law. (Art. 1315, Civil Code)
contracting parties must have clearly and
deliberately conferred a favor upon a third person. Exceptions:
(Art. 1311, Civil Code) The following contracts need to comply with
additional requirements:
Exceptions: 1. Real contracts such as deposit, pledge and
a. In contracts containing a stipulation in commodatum, are perfected upon the
favor of a third person (stipulation delivery of the object of the obligation.
pourautrui) (Art. 1311 (2), Civil Code); (Art.1316, Civil Code)
b. In contracts creating real rights (Art. 2. Formal or solemn contracts are required to
1312, Civil Code); be in the form provided by law, to be
c. In contracts entered into to defraud perfected. An example of this is donation of
creditors (Art. 1313, Civil Code); an immovable property which must be in a
d. In contracts which have been violated public instrument together with the
at the inducement of the third person acceptance thereof otherwise, the contract is
(Art. 1314, Civil Code); void. (Art.749, Civil Code)
e. In contracts creating "status" (e.g.,the
resulting status of marriage must be Reformation of Instruments
respected, even by strangers, while the As distinguished from annulment where there is no
contract is in force); meeting of the minds, in reformation, there is
f. In the quasi-contract of negotiorum meeting of the minds but attended by mistake,
gestio, the owner is bound in a proper fraud, inequitable conduct, or accident. (Art.
case, by contracts entered into by the 1359, Civil Code)
"gestor" (unauthorized manager) (Art.
2150, Civil Code); Requisites for action for reformation (VP-PIM)
g. In "collective contracts" where the 1. Meeting of the minds (Art. 1359, Civil Code)
majority rules over the minority 2. True Intention is not expressed (Art. 1359, Civil
(e.g.,collective bargaining contracts Code)
which affect even non- union 3. Clear and convincing Proof (DE LEON, 714
members; "suspension of payments" (2014))
and "compositions" under the 4. Within proper prescriptive Period
Insolvency Law [Act No. 1956, as 5. Not simple unconditional donation inter vivos or
amended], where creditors are bound contract where real agreement is Void (Art.
by the contracts of the majority); and 1366, Civil Code)
h. Where the situation contemplated in
Article 1729 obtains. The intention of NOTE: In reformation, no new contract is made.
this article is to protect the laborers and Contracts that may be reformed: (CM-TIFF)

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1. Mutual mistake fails to disclose the real Parties are legally Capacitated to enter into
agreement (but it must be a mistake of Fact) contracts
(Art. 1361, Civil Code) Consent must be intelligent, free, spontaneous, and
2. Unilateral mistake or the other party acted real (PINEDA 415 (2009))
Fraudulently (Art. 1362, Civil Code)
3. Unilateral mistake and the other party is guilty Offer
of Concealment (Art. 1363, Civil Code) A proposal made by one party to another to enter
4. Person drafting the instrument or clerk or typist into a contract; must be certain or definite, complete
through ignorance, lack of skill, negligence or and intentional. (Art. 1319, Civil Code)
bad faith, does not show the True Intention (Art.
1364, Civil Code) Acceptance
5. Parties agree on Mortgage, pledge of real or Manifestation by the offeree of his assent to the
personal property but instrument says that it is terms of the offer; must be absolute (i.e., must not
sold absolutely or involves a right to repurchase qualify the terms of the offer) (Rizalino et al. v.
(Art. 1365, Civil Code) Paraiso Development Corporation, G.R. No.
157493, 2007)
No reformation is allowed in: (SD-WV)
1. Simple Donation
NOTE: A qualified acceptance constitutes a
2. Wills
counter-offer. (Art. 1319, Civil Code)
3. Real agreement is Void (Art. 1366, Civil Code)
Who may ask for reformation: (NOT-FE-MM) Elements of a valid offer

1. The party who is NOT at Fault (i.e., injured 1. Definite
party, heirs or assigns) (Art. 1367, Civil Code) 2. Complete
2. Party who is NOT asked to Enforce the 3. Intentional (Yolanda Palattao v. Court of
instrument (Art. 1368, Civil Code) Appeals, G.R. No. 131726, 2002)
3. If there is a Mutual Mistake, reformation may be
had by either party or successor in interest (Art. Elements of a valid acceptance
1368, Civil Code) 1. Unequivocal
2. Unconditional (Yolanda Palattao v. Court of
Procedure for reformation shall be governed by the Appeals, G.R. No. 131726, 2002)
Rules of Court as promulgated by the Supreme
Court. (Art. 1369, Civil Code) When offer becomes ineffective (QR-DRIP)
1. Death, civil interdiction, insanity or insolvency of
The prescriptive period for actions based upon a either party before acceptance is conveyed (Art.
written contract and for reformation of an instrument 1323, Civil Code);
is ten (10) years under Article 1144 of the Civil Code. 2. Express or implied Rejection of the offer by the
(Yolanda Rosello-Bentir v. Honorable Mateo M. offeree; (NHA v. Grace Baptist Church, G.R.
Leanda, G.R. No. 128991, 2000) No. 156437, 2004)
3. Qualified or conditional acceptance of the offer,
which becomes a counter-offer; (Art. 1319, Civil
C. ESSENTIAL REQUISITES OF A Code)
CONTRACT 4. Subject matter becomes Illegal or impossible
before acceptance is communicated; (PARAS
Essential Requisites - The three essential 612 (2016))
requisites are (1) Consent; (2) Subject Matter; and 5. Lapse of Period given to the offeree within
(3) Consideration. which to signify acceptance; (Art. 1324, Civil
Code) or
6. Revocation of the offer in due time (i.e. before
1. Consent the offeror has learned of its acceptance by the
offeree) (Art. 1324, Civil Code)
Definition - Meeting of the offer and the acceptance
upon the thing and the cause which are to constitute Period for acceptance
the contract; concurrence of a certain offer and an 1. Stated fixed period in the offer – The offeree
absolute acceptance (Art. 1319, Civil Code) may accept at any time until such period expires
(Young v. Court of Appeals, G.R. No. 83271,
Requisites (C3): 1991)
Must be manifested by the Concurrence of the offer 2. No stated fixed period
and acceptance upon the thing and cause;

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a. Offer is made to a person present – make proposals, and that an advertiser is not bound
Acceptance must be made immediately to accept the highest bidder unless the contrary
(Malbarosa v. Court of Appeals, G.R No. appears. (Privatization and Management Office v.
125761, 2003). Strategic Alliance Development Corporation, G.R.
b. Offer is made to a person absent – No. 200402, 2014)
Acceptance may be made within such
time that, under normal circumstances, Four (4) theories on acceptance of offer by
an answer can be received from him. telegram or letter
(PINEDA 425 (2009)) 1. Manifestation – perfected from the moment the
acceptance is declared or made.
NOTE: For a contract to arise, the acceptance must 2. Expedition – perfected from the moment the
be made known to the offeror. Accordingly, the offeree transmits the notification of acceptance.
acceptance can be withdrawn or revoked before it is 3. Reception – perfected from the moment the
made known to the offeror. (Rizalino et al. v. Paraiso offeror receives the letter.
Development Corporation, G.R. No. 157493, 2007) 4. Cognition – perfected from the moment the
acceptance comes to the knowledge of the
NOTE: We follow the theory of cognition (Art. 1319, offeror. (JURADO 402 (2010))
Civil Code) and not the theory of manifestation.
Under our Civil Law, the offer and acceptance NOTE: Contracts under the Civil Code generally
concur only when the offeror comes to know of, and adhere to the Cognition Theory while transactions
not when the offeree merely manifests his under the Code of Commerce adhere to the
acceptance. Manifestation Theory. (JURADO 402 (2010))
Rule on complex offers When the offeror refuses to open the letter or
1. Offers are interrelated – Contract is perfected telegram he is held to have a constructive notice of
if all the offers are accepted. the contents thereof and will be bound by the
2. Offers are not interrelated – Single acceptance of the offeree. (JURADO 403-404
acceptance of each offer results in a perfected (2010))
contract unless the offeror has made it clear that
one is dependent upon the other and Options
acceptance of both is necessary. (Art. 1319, General rule: If the offeror has allowed the offeree
Civil Code) a certain period to accept, the offer may be
3. Offer interpraesentes must be accepted withdrawn at any time before acceptance by
immediately. If the parties intended that there communicating such withdrawal. (Art. 1324, Civil
should be an express acceptance, the contract Code)
will be perfected only upon knowledge by the
offeror of the express acceptance by the offeree Exception: When the option is founded upon a
of the offer. An acceptance which is not made consideration as something paid or promised. (Art.
in the manner prescribe by the offeror is not 1324, Civil Code)
effective, but a counter-offer which the offeror
may accept or reject. (Malbarosa v. Court of An option, sometimes called an “unaccepted offer,”
Appeals, G.R No. 125761, 2003) is simply a contract by which the owner of property
agrees with another person that he shall have the
Rule on advertisements as offers right to buy his property at a fixed price within a
1. Business advertisements – Not a definite certain time. An option is not of itself a purchase, but
offer, but mere invitation to make an offer, merely secures the privilege to buy. It is not a sale
unless it appears otherwise (Art. 1325, Civil of property but a sale of the right to purchase.
Code) (Adelfa Properties, Inc. v. Court of Appeals, G.R.
2. Advertisements for bidders – They are simply No. 111238, 1995)
invitations to make proposals and the advertiser
is not bound to accept the highest or lowest Effects of option:
bidder, unless the contrary appears (Art. 1326, Not supported by an independent consideration
Civil Code) (i.e., distinct from the purchase price) – offeror
can withdraw the offer at any time before
acceptance by communicating such withdrawal
Article 1326 of the Civil Code, which specifically Supported by independent consideration – offeror
tackles offer and acceptance of bids, provides that cannot withdraw his offer (Art. 1324, Civil Code)
advertisements for bidders are simply invitations to

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Concepcion Roa, G.R. No. 28532,

Persons incapacitated to give consent (DD-MI): 1929)
1. Minors (Art. 1327, Civil Code) c. They were in the form of Savings
2. Insane or demented persons (Art. 1327, Civil account in the Postal Savings Bank,
Code), unless the contract was entered into provided furthermore that the minor
during a lucid interval (Art. 1328, Civil Code) was at least 7 years old. (Sec. 2007,
3. Deaf-mutes who do not know how to write (Art. Revised Administrative Code)
1327, Civil Code) d. They were contracts for Necessaries
4. In a state of Drunkenness or under a hypnotic such as food, but here the persons who
spell (Art. 1328, Civil Code) are bound to give them support should
pay therefor (Arts. 1489 & 2164, Civil
BUT NOTE: The following are other instances Code)
that incapacitates a person from giving consent: e. Contracts where the minor
misrepresented his age and pretended
2. Civil interdiction shall deprive the
to be one of major age and is thus in
offender during the time of his sentence of Estoppel. (Fernando Hermosa v.
the rights of parental authority, or Alfonso Zobel, G.R. No. L-11835,
guardianship, either as to the person or 1958). It is, however, essential here
property of any ward, of marital authority, of that the other party must have been
the right to manage his property and of the MISLED (Isidro Bambalan v.
right to dispose of such property by any act HermanMaramba, G.R. No. L-27710,
1928). HOWEVER, minors can set up
or any conveyance inter vivos. (Art. 38,
the defense of minority to resist the
RPC) claim when there is only passive
3. Prodigality, in order to render a person misrepresentation, as when they did
legally unfit to administer his own affairs his not disclose their minority because
acts of prodigality must show a morbid mind they had no juridical duty to disclose
and a disposition to spend or waste the their inability. (Roario Braganza v.
estate so as to expose his family to want or Fernando De Villa Abrille, G.R. No. L-
12471, 1959)
to deprive his forced heirs of their
inheritances. (Pedro Martinez v. Francisco
NOTE: If both parties to a contract are minors, the
Martinez, G.R. No. 445, 1902) contract is unenforceable. (Art. 1403(3), Civil Code).
BUT NOTE: Minority, insanity or imbecility, the Examples of persons specially disqualified to
state of being a deaf-mute, prodigality and civil enter into contracts (Contracts entered into are
interdiction are mere restrictions on capacity to VOID):
act, and do not exempt the incapacitated person 1. Husband and wife selling to one another (Art.
1490, Civil Code) or donating to one another
from certain obligations, as when the latter arise
from his acts or from property relations, such as 2. Insolvents before they are discharged cannot,
easements. (Art. 38, Civil Code) for example, make payments. Exception:
Payment of administrative expenses shall be
Contracts entered into by the persons above are in allowed. (Section 57, Republic Act No. 10142)
generally valid until annulled; however, annulment 3. Persons disqualified because of fiduciary
cannot prosper when they have been ratified. (Art. relationship (Art. 1491, Civil Code)
1390, Civil Code).
INCAPACITY DISQUALIFICATION
Rule on contracts entered into by minors
General rule: Voidable (Art. 1391, Civil Code) Restrains the exercise Restrains the very right
of the right to contract itself
Exceptions (MENGS) (These contracts are valid):
May still enter into Absolutely disqualified
a. If upon reaching age of Majority, they
contract through
ratify the same. (Agaton Ibanez v.
parent, guardian or
Pedro Rodriguez, G.R. No. 23153,
legal representative
1925)
Based upon subjective Based upon public
b. They were entered unto by a Guardian
circumstance of certain policy and morality
and the court having jurisdiction had
person
approved the same. (Jesus Roa v.

ATENEO CENTRAL
Contracts entered into Contracts entered into

are merely voidable are void ii. Violence
(PINEDA 440 (2009)) Requisites (PFR):
a. Serious or irresistible Physical Force
Causes which vitiate consent b. Such force is the Reason why the
A contract where consent is given through Mistake, contract was entered into. (Art. 1335,
Violence, Intimidation, Undue Influence, or Fraud is Civil Code)
voidable (VIMFU). (Art. 1330, Civil Code)
Note: Violence refers to physical coercion, while
i. Mistake intimidation refers to moral coercion. (PARAS 632
Must include both ignorance, which is the absence (2016))
of knowledge with respect to a thing, and mistake
properly speaking, which is a wrong conception iii. Intimidation
about said thing, or a belief in the existence of some Requisites (FReT):
circumstance, fact, or event, which in reality does a. Reasonable and well-grounded Fear of
not exist. (Sps.Theis v. Court of Appeals, G.R. No. an imminent and grave evil upon his
126013, 1997) person, property, or upon the person or
property of his spouse, descendants,
Requisites (FES): or ascendants
a. The error must be Substantial regarding: b. It is the Reason why the contract was
i. The object of the contract, or entered into
ii. The conditions which principally c. The Threat must be of an unjust act, an
moved or induced one of the parties actionable wrong (A threat to enforce a
(error in quality or in quantity), or just or legal claim through competent
iii. Identity of qualifications, but only if authority does not vitiate consent.) (Art.
such was the principal cause of the 1335, Civil Code)
contract (Art. 1331, Civil Code)
b. The error must be Excusable (not caused Example: What the respondent did was merely
by negligence). There is no mistake if the inform them of petitioner Edna’s conviction in the
party alleging it knew the doubt, criminal cases for estafa. It might have evoked a
contingency or risk affecting the object of sense of fear or dread on the petitioners’ part, but
the contract. (Art. 1333, Civil Code) certainly there is nothing unjust, unlawful or evil
c. The error must be mistake of Fact, and in the respondent's act. ... The petitioners must
not of law. (Agustin Luna v. Jose Linatoc, remember that petitioner Edna's conviction was a
G.R. No. L-48403, 1942) result of a valid judicial process and even without the
respondent allegedly “ramming it into petitioner
Two (2) General Kinds of Mistake Victor's throat,” petitioner Edna's imprisonment
a. Mistake of Fact – When one or both of would be a legal consequence of such conviction.
the contracting parties believe that a fact (Spouses Binua v. Ong, G.R. No. 207176, 2014)
exists when in reality it does not, or that
such fact does not exist when in reality it Reluctant Consent – It is necessary to distinguish
does (PINEDA 443 (2009)) between real duress and the motive which is present
b. Mistake of Law when one gives his consent reluctantly. A contract
o General Rule: Mistake does not is valid even though one of the parties entered into
vitiate consent (Art. 1331, Civil it against his wishes or even against his better
Code) judgment. Contracts are also valid even though they
o Reason: Ignorance of the law are entered into by one of the parties without hope
does not excuse anyone from of advantage or profit. (Martinez v. Hongkong and
compliance therewith (Art. 3, Civil Shanghai Bank, G.R. No. L-5496, 1910)
Code)
o Exception: Mutual error as to the Note: Violence or intimidation shall annul the
legal effect of an agreement when obligation, although it may have been employed by
the real purpose of the parties is a third person who did not take part in the contract.
frustrated (Art. 1334, Civil Code). (Art. 1336, Civil Code)
▪ “Legal effect” here
refers to the rights of the iv. Undue Influence
parties as stated in the Requisites (DIP):
legal provisions. a. Improper advantage

ATENEO CENTRAL
b. Power over the will of another d. Must be made in Bad faith or with intent to
c. Deprivation of the latter of a deceive. (Art. 1343, Civil Code)
reasonable freedom of choice. (Art. e. Must have Induced the consent of the other
1337, Civil Code) contracting party. (Art. 1338, Civil Code)
f. Must be Alleged and proved by clear and
Circumstances to be considered (FIRM) convincing evidence, and not merely by a
a. Confidential, family, spiritual, and other preponderance thereof. (Tan Sua Sia v.
Relations between the parties Sontua, 56 Phil. 711, 1932)
b. Mental weakness
c. Ignorance b. Incidental Fraud (Dolo Incidente)
d. Financial distress (Art. 1337, Civil
Code). Deceptions or misrepresentations which are not
serious and without which the other party would still
v. Fraud have entered into the contract.
Fraud in Obtaining Consent
In order that fraud may vitiate consent, it must be the It is not the cause which induced the party to enter
causal (dolo causante), not merely the incidental into a contract and refers only to some particular or
(dolo incidente), inducement to the making of the accident of the obligations. (Geraldez v. Court of
contract. (Ponce de Leon v. Rehabilitation Finance Appeals, G.R. No. 108253, 1994)
Corporation, G.R. No. L-24571, 1970)
Effect: Only renders the person employing it liable
A. Causal Fraud (Dolo Causante) for damages. (Art. 1344, Civil Code)
This is the use of insidious words or machinations Simulated Contracts

by one of the contracting parties to induce the other a. Absolute – the parties have no intention to
party to enter into a contract, which, without them, be bound at all (Art. 1345, Civil Code); void
he would not have agreed to. (Art. 1338, Civil Code) from beginning (Art. 1346, Civil Code).
Determines or is the essential cause of consent. b. Relative – the parties conceal their true
agreement (Art. 1345, Civil Code): the real
It is the deception employed by one party prior to or agreement binds the parties when:
simultaneous to the contract in order to secure the There is no prejudice to 3rd persons;
consent of the other (Metropolitan Fabrics, Inc. v. and
Prosperity Credit Resources, Inc., G.R. No. 154390, It is not contrary to law, moral, good
2014) customs, public order or public
policy (Art. 1346, Civil Code)
Effects: Voidability of the contract and the
indemnification for damages (Geraldez v. Court of c. Dealer’s Talk (Dolo bonus) - This
Appeals, G.R. No. 108253, 1994) oxymoron (literally, good fraud) refers to
dealer’s talk, the kind of exaggerations in
Requisites (PS-SOBIA) advertisement the public is familiar with.
a. There must be misrepresentation or The ancient principle still governs in this
concealment (Arts. 1338 & 1339, Civil Code) regard: Caveat emptor -- Buyer beware. But
by a party Prior to or Simultaneous to the once the dealer’s talk goes beyond innocent
consent or creation of the contract. conventional exaggeration and later the
b. Must be Serious. (Art. 1344, Civil Code) realm of bad faith, then deceit (either
c. Must have been employed by only One of the causante or incidental) may set in. (BALANE
contracting parties. (Art.1342, Civil Code) 635-36 (2020))
BUT NOTE: Misrepresentation by a third The rule of caveat emptor requires the
person does not vitiate consent, unless such purchaser to be aware of the supposed title
misrepresentation has created substantial of the vendor and one who buys without
mistake and the same is mutual, or when the checking the vendor’s title takes all the risks
third person makes the misrepresentation with and losses consequent to such failure.
the complicity or, at least, with the knowledge, (Caram, Jr. v. Laureta, G.R. No. L-28740,
but without objection, of the contracting party 1981)
who is favored. (JURADO 449 (2010))

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However, this rule only requires the NOTE: Contracts upon future inheritance are void
purchaser to exercise such care and when:
attention as is usually exercised by ordinarily • The succession has not yet been opened;
prudent men in like business affairs, and only • The object of the contract forms part of the
applies to defects which are open and patent inheritance; and
to the service of one exercising such care. • The promissor has, with respect to the object,
Moreover, it can also only be applied where it an expectancy of a right, which is purely
is shown that the parties to the contract stand hereditary in nature. (De Belen Vda. De Cabalu
on equal footing and have equal knowledge v. Tabu, G.R. No. 188417, 2012)
or equal means of knowledge and there is no
relation of trust or confidence between them. 3. Cause or Consideration
In such a case, if a seller’s representations
prove to be false, neither law nor equity will
permit the seller to escape responsibility by Definition - Refers to the immediate, direct and
the plea that the buyer ought not to have most proximate reason which justifies the creation
believed him or ought to have applied to other of an obligation through the will of the contracting
sources to ascertain the facts. (Guinhawa v. parties and is the essential reason for the contract.
People, G.R. No. 162822, 2005) (William Uy v. Court of Appeals, G.R. No. 120465,
1999)
2. Subject Matter (SM)
Requisites (LET)
1. It must Exist at the time the contract is entered
Requisites of things as SM (W-PLDT): into. (Art. 1352 & 1409, Civil Code)
1. Within the commerce of man (Art. 1347, Civil 2. It must be True. (Art 1353, Civil Code)
Code) – either existing or in potency 3. It must be Licit. (Art. 1352, Civil Code)
2. Licit or not contrary to law, morals, good
customs, public order or public policy (Art. 1347, Motive – refers to the particular reason of one party
Civil Code) for entering into the contract which does not affect
3. Possible, legally or physically (Art. 1348, Civil the other party nor the validity of the contract;
Code) however, when the motive predetermines the cause
4. Determinate as to its kind or determinable or when the realization of such motive has been
without need to enter into a new contract (Art. made a condition upon which the contract is made
1349, Civil Code) to depend, the motive may be regarded as the
5. Transmissible (Art. 1347, Civil Code) cause (William Uy v. Court of Appals, G.R. No.
120465, 1999).
Requisites of services as SM (PWD):
1. Within the commerce of man (Art. 1347, Civil Cause distinguished from Motive
Code) CAUSE MOTIVE
2. Possible, physically or legally (Art. 1348, Civil
Code) Immediate or direct Remote or indirect
3. Determinate or capable of being made reason of a contract reason
determinate (Arts. 1348[2] & 1349, Civil Code) Objective and juridical Psychological or purely
reason of contract; personal reason; may
Things which cannot be the subject matter of a always known to both be unknown to the
contract (I-COFID): parties other party
1. Things which are Outside the commerce of men
(Art. 1347, Civil Code) Remains the same May vary although a
2. Intransmissible rights (Art. 1347, Civil Code) regardless of a party’s party enters into the
3. Future inheritance, except in cases expressly motive for entering into same kind of contract
authorized by law (Art. 1347, Civil Code) a contract
4. Services Contrary to law, morals, good Legality or illegality of Legality or illegality of
customs, public order or public policy (Art. 1347, cause affects the motive does not affect
Civil Code) existence or validity of the existence or validity
5. Impossible things or services (Art. 1348, Civil the contract of contract
Code). (DE LEON 673-674 (2014))
6. Objects which are not possible of Determination
as to their kind (Art. 1349, Civil Code) Causes in some contracts:

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1. Onerous contracts – The prestation of lesion by more

promise of a thing or service by the other. (Art. than ¼ of the
1350, Civil Code) value of the
2. Remuneratory contracts – The service or things which
benefit remunerated. (Art. 1350, Civil Code) are the object
3. Contracts of Pure Beneficence – Mere thereof (Art.
liberality of the donor or benefactor. (Art. 1350, 1381, par. 1)
Civil Code) • Those agreed
4. Accessory Contracts Like Mortgage and upon in
Pledge – The cause is generally the same as representation
the cause for the principal contract of loan. of absentee, if
(China Bank v. Lichauco, G.R. No. L-22001, the latter
1924) suffer lesion
5. Accessory Contracts of Personal Guaranty stated in par. 1
– Generally pure liberality but sometimes (Art. 1381,
material consideration may be given. (Standard par. 2)
Oil Co. v. Arenas, G.R. No. L-5921, 1911) • Partition
among co-
EFFECT IN CAUSE EFFECT heirs, when
Absence of causa – Void – Contract any one of
Total lack or absence produces no legal them received
of cause effect (Art. 1352) things with a
value less by
Illegality of causa – Void – Contract at least ¼ than
The cause is contrary produces no legal the share to
to law, morals, good effect (Art. 1352) which he is
customs, public order entitled (Art.
and public policy 1098)
Falsity of causa – A Void IF it should not be
cause is stated but it is proved that the
not true contract was founded Failure of Cause
upon another cause when the seller fails to realize the price or does
which is true and lawful not deliver the thing to the buyer. The injured
(Art. 1353) party is entitled to specific performance or
rescission.
Causa not stated in Presumed to Exist –
the contract Burden of proof is on Moral Obligation as Cause
the person assailing its Where the moral obligation arises wholly from
existence (art. 1354) ethical considerations, unconnected with any civil
obligations, it cannot constitute a sufficient cause or
Inadequacy of causa or General Rule: Does consideration to support an onerous contract.
lesion (Art. 1355) not invalidate contract (Fisher v. Robb, G.R. No. 46274, 1939)
Exceptions: Where such moral obligation is based upon a

1. When, together previous civil obligation which has already been
with lesion, there barred by the statute of limitations at the time when
has been: fraud, the contract is entered into, it constitutes a sufficient
mistake or undue cause or consideration to support a contract.
influence (Villaroel v. Estrada, G.R. No. L-47362, 1940)
2. In cases specified
by law (the ff. D. DEFECTIVE CONTRACTS
contracts may be
rescinded) 1. Rescissible Contracts
• Those entered
into by
Definition
guardians
Those which have caused economic damage either
when the
to one of the parties or to a third person and which
wards suffer

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may be set aside even if valid. They may be set d. Art. 1542 – In the sale of real estate,
aside in whole or in part, to the extent of the damage made for a lump sum, where the
caused. (4 TOLENTINO (1991)) boundaries are mentioned and the
area or number within the boundaries
Rescissible Contracts under Art. 1381: (ALL- exceed that specified in the contract,
GF) when the vendee does not accede to
1. Entered into by Guardian whenever ward the failure to deliver what has been
suffers damage by more than 1/4 of value of stipulated
object; e. Art. 1556 – Should the vendee lose,
2. Agreed upon in representation of Absentees, if by reason of eviction, a part of the
absentee suffers lesion by more than ¼ of value thing sold of such importance, in
of property; relation to the whole, that he would not
3. Contracts where rescission is based on Fraud have bought it without said part
committed on creditors (accion pauliana); f. Art. 1560 – Vendee may ask for
4. Objects of Litigation; contract entered into by recession if the immovable sold
defendant without knowledge or approval of should be encumbered with any non-
litigants or judicial authority; and apparent burden or servitude, not
5. Contracts involving things under litigation are mentioned in the agreement, of such a
rescissible. nature that it must be presumed that
a. Art. 1381 (4) requires the concurrence the vendee would not have acquired it
of the following: (1) the defendant, had he been aware thereof
during the pendency of the case, g. Art. 1567 – In cases of breach of
enters into a contract which refers to warranty against hidden defects of or
the subject of litigation; and (2) said encumbrances upon the thing sold
contract was entered into without the h. Art. 1659 – If the lessor or lessee
knowledge and approval of the litigants should not comply with their
or of a competent judicial authority. obligations, the aggrieved party may
The court then has the duty to order the ask for rescission
rescission of the contract upon the
concurrence of such requisites. (Ada v. Accion pauliana refers to the action to rescind
Baylon, G.R. No. 182435) contracts in fraud of creditors under Art. 1381.
Provided for by Law – e.g. Arts. 1526, Requisites: (NR-CAFS)

1534, 1539, 1542, 1556, 1560, 1567 and a. The plaintiff asking for rescission has a
1659 Credit prior to the alienation, although
demandable later;
a. Art. 1526 – Unpaid seller of goods, b. The debtor has made a Subsequent
notwithstanding that the ownership in contract conveying a patrimonial
the goods may have passed to the benefit to a third person;
buyer, subject to other provisions on
c. The creditor has No other legal
Sales
b. Art. 1534 – Unpaid seller having the Remedy to satisfy his claim;
right of lien or having stopped the d. The act being impugned is Fraudulent;
goods in transit, where he expressly e. The third person who received the
reserved his right to do so in case the property conveyed, if it is by onerous
buyer should make default, or the title, has been an Accomplice in the
buyer has been in default in the fraud. (Anchor Savings Bank v.
payment of the price for an Furigay, G.R. No. 191178, Mar. 13,
unreasonable time 2013; Lee v. Bangkok Bank Public
c. Art. 1539 – In the sale of real estate at Company, Limited, G.R. No. 173349,
a rate of a certain price for a unit of
Feb. 9, 2011)
measure or number, at the will of the
vendee, when the inferior value of the
thing sold exceeds one-tenth of the Under Art. 1382, payments made in a state of
price agreed upon, or if the vendee insolvency for obligations to whose fulfillment the
would not have bought the immovable debtor could not be compelled at the time they were
had he known of its smaller area or effected are also rescissible.
inferior quality

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Requisites: f. Transfer made between father and son

a. The debtor-payer must have been where this fact is considered together
insolvent (the insolvency need not be a with the preceding circumstances; and
judicially declared one). g. Failure of the vendee to take exclusive
b. The debt was not yet due and possession of the property (Caltex
demandable (Art. 1382, Civil Code) Philippines, Inc. v. PNOC Shipping and
Transport Corporation, G.R. No.
Obligation created by the rescission of the 150711)
contract
The presumption of fraud in case of alienations by
Mutual Restitution onerous title of a person against whom a judgment
a. Things which are the objects of the has been rendered or attachment issued does not
apply to registered lands if the judgment or
contract and their fruits
attachment made is not also registered. (Lee v.
b. Price with interest (Art. 1385, Civil Bangkok Bank, G.R. No. 173349)
Code)
The action to claim rescission must be commenced
NOTE: The obligation of restitution obviously does within four years. For persons under guardianship
not apply to creditors who seek to impugn fraudulent and for absentees, the period of four years shall not
transactions of their debtors. The obligation of begin until the termination of the former's incapacity,
mutual restitution applies to OTHERS so that that or until the domicile of the latter is known (Art. 1389,
status quo may be restored. (PARAS (2016)) Civil Code)
Requisites: (4-TRR) 2. Voidable Contracts

a. Plaintiff must be able to Return what
has been received by virtue of the Definition
Intrinsic defect; valid until annulled; defect is due to
rescissible contract (Art. 1385, Civil
vice of consent or legal incapacity (PINEDA, 601-
Code) 602 (2009))
b. Object of the contract is not in the legal
possession of Third persons in good
Characteristics (ACED)
faith. (Art. 1385, Civil Code)
1. Effective until set aside
c. Plaintiff has no other legal Remedy. 2. May be assailed or attacked only in an Action
(Art. 1383, Civil Code) for that purpose
d. Action must be brought within the 3. Can be Confirmed
proper prescriptive period of 4 years.
(Art. 1389, Civil Code) NOTE: Confirmation is the proper term for
curing the defect of a voidable contract.
Badges of fraud are circumstances indicating that
certain alienation has been made in fraud of 4. Can be assailed only by the party whose
creditors. Some examples are: consent was Defective or his heirs or assigns
a. Consideration of the conveyance is
inadequate or fictitious; What contracts are voidable:
b. Transfer was made by a debtor after a Contracts entered into: (SIM-D3)
suit has been begun and while it is 1. By Minors (Art. 1327, Civil Code)
pending against him; 2. By Insane unless he/she acted during a lucid
interval (Art. 1327 & 1328, Civil Code)
c. Sale upon credit by an insolvent
3. By Deaf mute who can’t read or write (Art. 1327,
debtor;
Civil Code)
d. Evidence of indebtedness or complete 4. By Persons specially Disqualified: civil
insolvency; interdiction (Art. 1329 & 38, Civil Code)
e. Transfer of all his property by a debtor 5. In state of Drunkenness (Art. 1328, Civil Code)
when he is financially embarrassed or 6. In state of hypnotic Spell (Art. 1328, Civil Code)
insolvent;
Mistake
False belief of something which is contrary to the
real intention of the parties (PINEDA, 443 (2009))

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Fraud by third person – does not vitiate consent;

Requisites: (CP-SEN) only action for damages except if there is collusion
1. Refers to the Subject of the thing which is the between one party and the third person, or resulted
object of the contract to substantial mistake, mutual between parties. (Art.
2. Refers to the Nature of the contract 1342, Civil Code)
3. Refers to the principal Conditions in an
agreement (PINEDA, 443 (2009)) Causes of Extinction of the Action to Annul
4. Error as to Person – When it is the principal 1. Prescription - Period to bring an action for
consideration of the contract Annulment
5. Error as to legal Effect – When mistake is (a) Intimidation, violence, undue influence
mutual and frustrates the real purpose of parties – 4 years from time defect of consent
(Art. 1334, Civil Code) ceases
(b) Mistake, fraud – 4 years from time of
Violence
Serious or irresistible force is employed to wrest discovery
consent (Art. 1335, Civil Code) (c) Incapacity - From time guardianship
ceases (Art. 1391, Civil Code)
Intimidation
One party is compelled by a reasonable and well- Discovery of fraud must be reckoned to have taken
grounded fear of an imminent and grave danger place from the time the document was registered in
upon person and property of himself, spouse, the office of the register of deeds. Registration
ascendants or descendants (moral coercion) (Art. constitutes constructive notice to the whole world
1335, Civil Code) (Carantes v. CA, G.R. No. L-33360).
Undue Influence 2. Ratification

Person takes improper advantage of his power over
will of another depriving latter of reasonable Requisites: (Wack)
freedom of choice (Art. 1337, Civil Code) 1. Knowledge of reason rendering contract
voidable (Art. 1393, Civil Code)
The doctrine on reluctant consent provides that a 2. Such reason must have Ceased (Art. 1393, Civil
contract is still valid even if one of the parties Code). Except in case of ratification effected by
entered it against his wishes or even against his the guardian to contracts entered into by an
better judgment. Contracts are also valid even incapacitated (Art. 1394, Civil Code)
though they are entered into by one of the parties 3. The injured party must have executed an act
without hope of advantage or profit. (Martinez v. which expressly or impliedly conveys an
HSBC, G.R. No. L-5496) intention to Waive his right (Art. 1393, Civil
Code)
Fraud
Thru insidious words or machinations of one of the Even assuming that petitioner’s misrepresentation
contracting parties, the other is induced to enter into consists of fraud which could be a ground for
a contract without which he will not enter it (dolo annulling their Contract to Sell, respondent’s act of
causante). (Samson v. CA, G.R. No. 108245) affixing her signature to the said Contract, after
having acquired knowledge of the property's actual
Kinds of Fraud in the Performance of location, can be construed as an implied ratification
Obligations or Contracts thereof.
1. Causal Fraud (dolo causante)
2. Incidental Fraud (dolo incidente) Implied ratification may take diverse forms, such as
3. Tolerated Fraud – includes minimizing the by silence or acquiescence; by acts showing
defects of the thing, exaggeration of its good approval or adoption of the contract; or by
qualities and giving it qualities it does not have; acceptance and retention of benefits flowing
lawful misrepresentation (Art. 1340, Civil Code) therefrom. (ECE Realty v. Mandap, G.R. No.
196182, Sept. 1, 2014)
NOTE: Expression of an opinion – not fraud
unless made by expert and other party relied Ratification cleanses the contract of its defects from
on the former’s special knowledge. (Art. 1341, the moment it was constituted. (Art. 1396, Civil
Civil Code) Code)

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3. Loss of the Thing which is the object of the unenforceable contracts; also estoppel sets in
contract through fraud or fault of the person who by accepting performance, the defect is waived.
is entitled to annul the contract. (Art. 1401, Civil (Art. 1405, Civil Code)
Code)
NOTE: The contracts/agreements under the Statute
of Frauds require that the same be evidenced by
NOTE: If the object is lost through a fortuitous
some note or memorandum or writing, subscribed
event, the contract can still be annulled, but the
by the party charged or by his agent, otherwise, the
person obliged to return the same can be held liable
said contracts shall be unenforceable. (Art. 1403,
only for the value of the thing at the time of the loss,
Civil Code)
but without interest thereon. (4 TOLENTINO 614
(1991))
The Statute of Frauds applies only to executory
contracts, not to those that are partially or
3. Unenforceable Contracts completely fulfilled. (Carbonnel v. Poncio, G.R. No.
L-11231)
Definition
They are valid but the execution cannot be A right of first refusal is not by any means a
compelled unless ratified; extrinsic defect; produce perfected contract of sale of real property. As such,
legal effects only after ratified. a right of first refusal need not be written to be
enforceable and may be proven by oral evidence.
Kinds: (URA) (Rosencor Corp v. Inquing, G.R. No. 140479)
1. Unauthorized or no sufficient authority –
Entered into in the name of another when: (Art. In proving the fact of partial or total performance,
1404, Civil Code) either documentary or oral evidence may be
a. No authority conferred (Art. 1317, received. (Averia v. Averia, G.R. No. 141877)
Civil Code)
b. In excess of authority conferred Statute of Frauds is a personal act made by the
(ultra vires) (Art. 1317, Civil Code) parties to the unenforceable contract. Third parties
2. Curable by Ratification – Both parties incapable cannot use the Statute of Frauds as defense, or
of giving consent (2 minor or 2 insane persons) directly attack the unenforceable contract. (Ayson v.
(Art. 1407, Civil Code) Court of Appeals, G.R. Nos. L-6501 and L-6599).
3. Curable by Acknowledgment – Failure to
comply with Statute of Frauds. (Art. 1405, Civil 4. Void Contracts
Code)
Definition
Statute of Frauds These contracts have no legal effect. (Modina v. CA,
1. Agreement to be performed within a year after G.R. No. 109355)
making contract
2. Special promise to answer for debt, default or Characteristics:
miscarriage of another 1. It produces no effect whatsoever either against
3. Agreement made in consideration of promise to or in favor of anyone; (Modina v. CA, G.R. No.
marry 109355)
4. Agreement for sale of goods, chattels or things 2. There is no action for annulment necessary as
in action at price not less than 500; exception: such is ipso jure. A judicial declaration to that
auction when recorded sale in sales book effect is merely a declaration;
5. Agreement for lease of property for more than 3. It cannot be confirmed, ratified or cured;
one year and sale of real property regardless of
price
NOTE: Assuming that the nullified ... resolutions
6. Representation as to credit of another (Art.
may be deemed as contracts, we declared in our
1403 (2), Civil Code)
[previous ruling] that the infirmity in the nullified ...
resolutions did not stem from the absence of
consent or authority, which would have made them
Two Ways of Curing Unenforceable Contracts
unenforceable contracts under Article 1401 (1) of
1. Failure of defendant to object in time, to the
the Civil Code. The infirmity comes from the failure
presentation of parole evidence in court, the
of the NPC to comply with the requirements set forth
defect of unenforceability is cured
in the EPIRA.
2. Acceptance of benefits under the contract. If
there is performance in either part and there is
acceptance of performance, it takes it out of

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On this basis, they cannot be classified as an

unenforceable contract under Article 1403 (1) of the 6) Those which intention of parties relative to
Civil Code, but as void contracts under Article 1409 principal object of the contract cannot be
(7) of the Civil Code for being "expressly prohibited ascertained
or declared void by law." The last paragraph of
Article 1409 of the Civil Code expressly provides 7) Those expressly prohibited or declared void
that void contracts cannot be ratified. (NPC DAMA by law – Contracts w/c violate any legal
v. NPC, G.R. No. 156208) provision, whether it amounts to a crime or not
a. If performed, restoration is in order,
except if pari delicto will apply; (Art. 1411 Examples:
& 1412, Civil Code) No contract may be entered into upon
b. The right to set up the defense of nullity future inheritance except in cases
cannot be waived; (Art.1409, Civil Code) expressly authorized by law. (Art. 1347,
c. Imprescriptible (Art. 1410, Civil Code); Civil Code)
and
d. Anyone may invoke the nullity of the No contract which practically amounts to
contract whenever its juridical effects are involuntary servitude, under any guise
asserted against him (Art. 1421, Civil whatsoever, shall be valid. (Art. 1703, Civil
Code) Code)
Kinds of void contract: (Art. 1409, Civil Code) 8) Those whose cause, object or purpose is
1) Those lacking in essential elements: No contrary to law, morals, good customs,
consent, no object, no cause (inexistent ones) – public order or public policy. Example:
essential formalities are not complied with. Contract to sell marijuana
Example: Donation propter nuptias – Should
conform to formalities of a donation to be valid) Other void contracts:
1. Pactum Commissorium (Art. 2088, 2130,
2) Those which are absolutely simulated or 1390, Civil Code)
fictitious – no cause. An absolutely simulated
or fictitious contract is void, and the parties may Elements: (MAp)
recover from each other what they may have a. There should be a property Mortgaged
given under the contract. In absolute simulation, by way of security for the payment of
there is a colorable contract but it has no the principal obligation.
substance as the parties have no intention to be b. There should be a stipulation for
bound by it. (Heirs of Dr. Mario S. Intac and automatic Appropriation by the creditor
Angelina Mendoza-Intac v. CA, G.R. 173211). of the thing mortgaged in case of non-
payment of the principal obligation
a) NOTE: In absolute simulation, there is a within the stipulated period.
colorable contract but the parties have no (Development Bank of the Philippines
intention to be bound by it. However, if the v. CA, G.R. No. 118342)
parties state a false cause in the contract to
conceal their real agreement, the contract 2. Pactum De Non Alienando (Art. 2130, Civil
is relatively simulated and the parties are Code)
still bound by their real agreement. (Art.
1345, Civil Code; Valerio v. Refresca, G.R. A stipulation forbidding the owner from
No. 163687) alienating the immovable mortgaged shall be
void.
3) Those which cause or object did not exist at
the time of the transaction – no cause/object. It is a clause in a mortgage giving the
This refers to a contract whose cause or object mortgagee the right to foreclose by executory
could not have existed or could not come into process directed solely against the mortgagor
existence at the time of the transaction. and giving him or her the right to seize and sell
(BALANE 778 (2020)) the mortgaged property, regardless of any
4) Those whose object is outside the commerce subsequent alienations.
of man – no object / illegal / impossible object
3. Pactum Leonina (Art. 1799, Civil Code)
5) Those which contemplate an impossible
service – no object / illegal / impossible object

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A stipulation which excludes one or more Requisites of Illegal Contracts:

partners from any share in profit or loss is void. 1. Contract is for an illegal purpose;
2. Contract must be repudiated by any of the
parties before purpose is accomplished or
Illegal Contracts damage is caused to third parties; and
3. Court believes that public interest will be served
Pari Delicto Doctrine by allowing recovery (discretionary upon the
General Rule: court).
a. Both parties are guilty, no action against each • Based on remorse;
other; (Art. 1412, Civil Code) • Illegality is accomplished when parties
b. Those who come in equity must come with entered into contract;
clean hands; (Department of Public Works and • Before it takes effect – Party which is
Highways v. Quiwa, G.R. No. 183444) remorseful prevents it.
c. Applies only to illegal contracts and not to
inexistent contracts; Where laws are issued to protect certain
d. Does not apply when a superior public policy sectors: consumer protection, labor, and usury
intervenes. law
1. Consumer Protection – If price of commodity
The Clean Hands Doctrine states that “a litigant is determined by statute, any person paying an
may be denied relief by a court of equity on the amount in excess of the maximum price allowed
ground that his conduct has been inequitable, unfair may recover such excess. (Art. 1417, Civil
and dishonest, or fraudulent, or deceitful as to the Code)
controversy in issue.” Bad faith and fraud are 2. Labor – If the law sets the minimum wage for
allegations of fact that demand clear and convincing laborers, any laborer who agreed to receive less
proof. (Department of Public Works and Highways may still be entitled to recover the deficiency; if
v. Quiwa, G.R. No.183444) the law sets max working hours and laborer who
undertakes to work longer may demand
Exception: If purpose has not yet been additional compensation. (Art. 1418 & 1419,
accomplished and if damage has not been caused Civil Code)
to any 3rd person. 3. Interest paid in excess of the interest allowed
by the usury law may be recovered by debtor
Other exceptions: with interest from date of payment. (Art. 1413,
1. Payment of usurious interest. (Art. 1413, Civil Civil Code)
Code)
2. Payment of money or delivery of property for an Effects of illegal contracts
illegal purpose, where the party who paid or 1. If one party is incapacitated, courts may allow
delivered repudiates the contract before the recovery of money, property delivered by
purpose has been accomplished, or before any incapacitated person in the interest of justice.
damage has been caused to a third person. (Art. 1415, Civil Code)
3. Payment of money or delivery of property made Pari delicto doctrine cannot apply because an
by an incapacitated person. (Art. 1415, Civil incapacitated person does not know what he is
Code) entering into and is unable to understand the
4. Agreement or contract which is not illegal per se consequences of his own action.
and the prohibition is designed for the protection
of the plaintiff. (Art. 1416, Civil Code) 2. If agreement is not illegal per se but merely
5. Payment of any amount in excess of the prohibited and prohibition is designated for the
maximum price of any article or commodity protection of the plaintiff – may recover what he
fixed by law or regulation by competent has paid or delivered by virtue of public policy.
authority. (Art. 1417, Civil Code) (Art. 1416, Civil Code)
6. Contract whereby a laborer undertakes to work
longer than the maximum number of hours fixed 3. If a subsequent contract results directly
by law (Art. 1418 & 1419, Civil Code) because of a previous illegal contract, the
7. One who lost in gambling because of fraudulent subsequent contract is also void and inexistent.
schemes practiced on him is allowed to recover “The illegality of the Sub-Contract Agreement
his losses (Art. 313, RPC) even if gambling is necessarily affects the [resulting] Deed of
prohibited. Assignment because the rule is that an illegal
agreement cannot give birth to a valid contract.

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To rule otherwise is to sanction the act of 7. Payment of legacy after will has been
entering into transaction the object of which is declared void. (Art. 1423-1430, Civil
expressly prohibited by law and thereafter Code)
execute an apparently valid contract to
subterfuge the illegality. The legal proscription
in such an instance will be easily rendered
nugatory and meaningless to the prejudice of
the general public.” (Gonzalo v. Tarnate, G.R.
No. 160600)
Mutual restitution in void contracts

General rule: Parties should return to each other
what they have given by virtue of the void contract
in case
Where nullity arose from defect in essential

elements:
1. Return object of contract and fruits
2. Return price plus interest
Exception: No recovery can be had in cases where

nullity of contract arose from illegality of contract
where parties are in pari delicto. (Art. 1412, Civil
Code)
Exceptions to the exception:

1. When incapacitated – Not obliged to return what
he gave but may recover what he has given
2. Other party is less guilty or not guilty. (Art. 1412,
Civil Code)
III. NATURAL 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. (Art. 1243, Civil Code)
Examples of natural obligations

enumerated under the Civil Code:
1. Performance after the civil obligation
has prescribed
2. Reimbursement of a third person for a
debt that has prescribed
3. Restitution by minor after annulment of
contract
4. Delivery by minor of money or fungible
thing in fulfillment of obligation
5. Performance after action to enforce
civil obligation has failed
6. Payment by heir of debt exceeding
value of property inherited

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I. SALES
A. DEFINITION AND ESSENTIAL
REQUISITES
Contract of Sale
A. DEFINITION AND ESSENTIAL It is a contract where one of the contracting parties
REQUISITES (Seller) obligates himself to transfer the ownership
B. CONTRACT OF SALE and to deliver a determinate thing, and the other
1. Contract to Sell party (Buyer) to pay a price certain in money or its
2. Option Contract equivalent. A contract of sale may be absolute or
3. Right of First Refusal conditional. (Art. 1458)
C. EARNEST MONEY
D. DOUBLE SALES Essential Requisites
E. RISK OF LOSS
F. BREACH OF CONTRACT OF SALE a. Elements of a Contract of Sale:
G. EXTINGUISHMENT OF THE SALE (CSP)
1. Consent;
1. Conventional Redemption
2. Determinate or Determinable Subject Matter;
2. Legal Redemption
and
H. EQUITABLE MORTGAGE
3. Price certain in money or its equivalent. (Coronel
v. CA, G.R. No. 103577, 1996)
The absence of any of the essential elements

negates the existence of a perfected contract of
sale. (Dizon v. CA, G.R. 122544, 1999)
Characteristics of Contract of Sale: (NOC-

PCBR)
1. Nominate
2. Onerous
3. Consensual
4. Principal
5. Commutative
6. Bilateral
7. Reciprocal
In Suntay v. Court of Appeals, the SC held that

“[t]hough the notarization of the deed of sale in
question vests in its favor the presumption of
regularity, it is not the intention nor the function of
the notary public to validate and make binding an
instrument never, in the first place, intended to have
any binding legal effect upon the parties thereto.
The intention of the parties still and always is the
primary consideration in determining the true nature
of a contract” and “even an apparently valid
notarization of a document does not guarantee its
validity”. (Dizon v. Matti, Jr., G.R. No. 215614
(Resolution), March 27, 2019)
Article 1354 of the Civil Code provides that there is

a presumption that even though the contract did not
state a case, a lawful one exists and it is incumbent
upon the party impugning the contract to prove the
contrary. In the case at hand, since both the DOS
(deed of sale) and COS (contract of sale) were
public documents, the oral evidence of lack of

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consideration were not sufficient to overthrow the 3. Sale of land: A sale of real property or of an
presumption of the existence of a valid interest therein.
consideration. (Sepe v. Heirs of Kilang, G.R. No.
199766, April 10, 2019) Exceptions to coverage of statute of frauds in
sales contracts:
FORMALITIES OF CONTRACT 1. Written: When there is a note or memorandum
Form not important for validity of sale in writing and subscribed to by party or his agent
GR: Contract of sale is consensual, i.e., perfected (contains essential terms of the contract) (Art.
by mere consent as to price and subject matter (or 1403)
object of the contract). (Art. 1475) 2. Partial execution: When there has been partial
performance/execution (seller delivers with
Non-compliance with the formal requirements does intent to transfer title/receives price; or when
not affect the validity of sale. (Fule v. CA, G.R. No. buyer partially pays the price) (Art. 1405)
L-40502 & L-42607, 1976) 3. Failure to object: When there has been failure
to object to presentation of evidence (oral) (Art.
When form is important for validity; exception
1405)
by specific provision of law.
4. Electronic documents: electronic documents
1. Donations and wills (Arts. 749, 804);
are the functional equivalent of the written
2. Power to sell a piece of land granted to an agent
documents for validity, enforceability and
must be in writing– otherwise, sale is VOID (Art.
evidentiary purposes (R.A. 8792, Secs. 7 and
1874);
12) such that the requirement of a note or
3. Sale of large cattle; must also be registered with
memorandum in writing can be complied with
Municipal treasurer – otherwise VOID (Art.
similar to item (1) above.
1581; Revised Administrative Code, Sec. 529);
4. Sale of land by non-Christian if not approved by
While a sale of land appearing in a private deed is
Governor – VOID (Tac-an v. CA, G.R. No. L-
binding between the parties, it cannot be considered
38736, 1984).
binding on third persons if not embodied in a public
instrument and recorded in the Registry of Deeds.
Article 1358, which requires the embodiment of
(Secuya v. Vda. De Selma, G.R. No. 136021, 2000)
certain contracts in a public instrument, is only for
convenience, and registration of the instrument only Although the execution of a deed of sale is
adversely affects third parties. Formal requirements absolutely unnecessary for validity, it is
are, therefore, for the benefit of third parties; and nevertheless important for 1) the enforceability of
non-compliance therewith does not adversely affect executory contracts under Article 1403 of the Civil
the validity of the contract and the rights and Code, 2) the convenience of the parties under
obligations of the parties thereunder. (Dalion v. CA, Article 1358 of the same Code, and 3) the eventual
182 SCRA 872,1990) registration of the sale with the land registration
authority under P.D. 1529. A sale would be perfectly
Statute of Frauds valid even if no deed whatsoever had been
executed, subject only to the requirements of the
Note that if particular form is required under the
Statute of Frauds. As such, the parties may prove
statute of frauds and the same is not followed: the existence of a perfected or performed contract
• While the sale is valid, it is UNENFORCEABLE of sale through any competent evidence available,
even as to the parties to the contract of sale. be it an original deed, a copy thereof, a
memorandum, or even testimony on the prior,
When form (should be in writing and not merely subsequent, and contemporaneous acts of the
verbal) is important for enforceability [Statute of parties. (Tamayao v. Lacambra, G.R. No. 244232,
Frauds](Art. 1403 [2]) November 3, 2020)
1. A contract not to be performed in 1 year: A sale
agreement which by its terms is not to be SUBJECT MATTER OF SALE
performed within a year from the making
thereof; b. Requisites of a valid subject matter
2. Php 500 and above: An agreement for the sale (Arts. 1459-1465)
of goods, chattels or things in action, at a price
not less than PhP500; 1. Existing and future things

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2. Licit • Sale declared illegal by law (i.e., narcotics, wild

3. Determinate or Determinable birds and mammals, rare wild plants, etc.)
If this requisite is not present, then the resulting Prohibited:

contract is VOID. (a) Narcotics (RA 6425);
(b) Wild Birds or mammals (R.A. No. 2590); rare
1. Existing and future things wild plants (R.A. No. 3983); poisonous plants
Existing, having potential of existence, future, or or fruits (R.A. No. 1288); dynamited fish (R.A.
contingent (Arts. 1347, 1348, 1462) 428);
(a) Existing goods – goods owned or possessed (c) Gunpowder and explosives (Act No. 2255);
by the seller at the time of perfection and firearms and ammunitions (P.D. No, 9);
(b) Future goods – goods to be manufactured, (d) Sale of land by non-Christians (Sec. 145,
raise, or acquired by the seller after the Administrative Code of 1987)
perfection of the contract (forward contracts) (e) Animals with contagious diseases (Art. 1575)
(f) Sale of animals unfit for the use or service for
Whether the subject matter is of a type and nature which they were acquired (Art. 1575)
that exists or could be made to exist to allow the (g) Sale of future inheritance and other rights that
seller reasonable certainty of being able to comply are not transmissible (Art. 1347)
with his obligations.
3. Determinate or Determinable
Minimum requirement of potential existence: taking
into consideration the state of science and Determinate: always specific
technology at the time of perfection of the contract. • particularly designated or physically segregated
from all others of the same class; (Art. 1460)
EMPTIO REI EMPTIO SPEI
SPERATAE Determinable: always generic
“The purchase of what “Purchase of hope”
• Thing is capable of being made determinate
we hope”
(Capacity to Segregate Test)
Sale of an expected Sale of a hope or
thing/ future thing expectancy that the • Without the necessity of a new or further contract
thing will come to between the parties (No Further Agreement
existence; sale of the Test). (Art. 1460)
hope itself
Sale is subject to a Sale is effective even NOTE: Subject matter CANNOT be DETERMINED
suspensive if the thing does not BY a 3rd PARTY. (Villanueva & Tiansay, Law on
condition—that the come into existence, Sales, 102, 2016)
thing will exist; if it unless it is a vain hope
does not, there is no (Art. 1461 Sale of a
When subject matter is a right: It must be
contract vain hope or
transmissible. (Art. 1311)
expectancy is void)
Uncertainty is with Uncertainty is with • Future inheritance cannot be sold (Art. 1347)
regard to the quantity regard to the existence • Service cannot be sold (Art. 1348)
and quality of the thing of the thing
and not the existence Quantity of subject matter is not essential for
of the thing perfection, but quantity is essential if it goes into the
Object is a future Object is a present determinability of the subject matter and the price or
thing, which must be thing which is the hope consideration in the contract; Determine the nature
determinate or specific or expectancy and quality of subject matter (National Grains
(not generic)
Authority v. IAC, G.R. No. 74470, 1989)
E.g. growing crops E.g., lottery ticket
(Villanueva & Tiansay, Law on Sales, 67-68, 2016)
Generic things may be the object of a sale, but the
obligation to deliver the subject matter can only be
2. Licit
complied with when the subject matter has been
• Not outside the commerce of man (Art. 1459)
made determinate (either by physical segregation or
• If illicit, contract is void

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particular designation) (Yu Tek & Co. v. Gonzales, consideration). (Republic v. Phil. Resources Dev.,
G.R. No. L-9935, 1915) G.R. No. L-10141, 1958)
PRICE 3. Certain or ascertainable
Price Certain: expressed and agreed in terms of specific

The sum stipulated as the equivalent of the thing pesos and/or centavos (Art. 1469)
sold and also every incident taken into consideration
for the fixing of the price, put to the debit of the Ascertainable:
vendee and agreed to by him. (Inchausti & Co. v. i. Set by third persons (Art. 1469)
Cromwell, G.R. No. L-6584, 1991) ii. Set by the courts – only in cases where the
third person designated to fix the price, fixes
NOTE: Sale is valid when consideration is partly in the same in bad faith or by mistake (Art. 1469)
money and partly in another thing. (Art. 1468). iii. Set by reference to a definite day, particular
exchange or market (Art. 1472)
c. Requisites for a valid price (ReM-C) iv. Set by reference to another thing certain (Art.
1472)
1. Real v. But never by only one party to the contract of
2. In Money or its equivalent sale as it amounts to a potestative condition
3. Certain or ascertainable (Francisco v. (unless the price is accepted by the other party)
Desierto, G.R. No. 154117, 2009) (Art. 1473)
1. Real, not simulated NOTE: When the 3rd party is unwilling to set the
When at the perfection of the contract of sale, there price, the parties may not ask the court to fix the
is every intention on the buyer to pay the price, and price because the condition imposed on the contract
every expectation on the part of the seller to receive has not happened yet and thus, no enforceable
such price as the value of the subject matter he contract has arisen. (Art. 1474)
obligates himself to deliver. (Test of intention)
(Rongavilla v. CA, G.R No. 83974, 1998) IF PRICE CANNOT BE DETERMINED IN ANY
MANNER AND IS NEITHER CERTAIN NOR
Effect Where Price is Simulated ASCERTAINABLE: The contract of sale is
i. The act may be shown to have been in reality a inefficacious (Art. 1474).
donation, or some other act or contract. (Art.
1471) Effect of Non-Payment of Price
ii. If not, and neither party had any intention Non-payment of price does not cancel or avoid the
whatsoever that the amount will be paid sale, as the sale is still considered perfected. But it
(absolutely simulated): the sale is void is a cause for either:
(Rongavilla v. CA, G.R. No. 83974, 1998) (a) Specific performance; or
iii. If there is a real price but what is stated in the (b) Rescission. (Heirs of Escanlar v. CA, G.R. No.
contract is not the one intended to be paid (only 119777, 1997)
relatively simulated or what is called a
“False Price”): the ostensible contract of sale HOW PRICE IS DETERMINED
is valid but subject to reformation. (Macapagal Price is determined by the contracting parties. (Art.
v. Remorin, G.R. No. 158380, 2005) 1473)
2. In money or its equivalent INADEQUACY OF PRICE

Consideration for a valid contract of sale can be the
price and other valuable consideration; at the very Effect of Gross Inadequacy of Price
least, a true contract of sale must have price, which General Rule: Mere inadequacy of the price does
consist of valuable consideration (i.e., something not affect the validity of the sale. (Bautista v. CA,
that can be quantifiable by pesos and centavos) as G.R. No. 158015, 2004)
part of its consideration (Test of value
Exceptions:

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1. When there is fraud, mistake, or undue their interest but no concurrence of offer
influence indicative of a defect in consent and acceptance.
thereby making the contract voidable. (Art. Perfection – the “birth” of the contract,
1470) concurrence of all requisites; meeting of the
minds upon the object and price.
Consummation – the “death” of the contract,
NOTE: Art. 1456 of the CIVIL CODE provides that a
parties perform their respective
person acquiring a property through fraud becomes undertakings (Arts. 1475, 1479, 1493-
an implied trustee of the property’s true and lawful 1506; Villanueva & Tiansay, Law on Sales,
owner. This case involved constructive trust. The 118-119, 2016)
action for reconveyance of the title to the rightful Rules:
owner prescribes in 10 years from the issuance of 1. Offer is floated Prior to acceptance, may be
the title. This ten-year prescriptive period begins to withdrawn at will by offeror
run from the date the adverse party repudiates the 2. Offer floated Without acceptance,
implied trust, which repudiation takes place when with a period extinguished when period
the adverse party registers the land. (Spouses has ended and may be
Aboitiz v. Spouses Po, G.R. Nos. 208450 & 208497, withdrawn at will by offeror;
right to withdraw must not be
2017)
arbitrary otherwise, liable to
damage under Art. 19, 20, 21
2. When it shows that the parties really intended a of Civil Code
donation or some other act or contract thereby
3. Offer floated Extinguished by
making the contract of sale void but may be w/ condition happening/non-happening of
valid as a contract of donation or some other condition
contract. (Art. 1470) 4. Offer floated Continue to be valid
3. In Judicial Sale, where the inadequacy is without period/ depending upon
shocking to the conscience of man (Pascua v. without condition circumstances of time, place
Heirs of Simeon, G.R. No. L-47717, 1988) and and person
there is showing that, in the event of resale, a 5. Offer is floated Original offer is destroyed,
better price can be obtained, the contract of sale and there is there is a new offer; cannot
is void. (Bie v. CA, G.R. No. L-17294, 1965) counteroffer go back to original offer
NOTE: If there was a failure of the contract to set a 6. Offer is floated No authority of offeror to
price but the buyer has already appropriated it, modify offer
then the buyer must pay a reasonable price. (Art. 7. Offer accepted Proceed to perfected stage
1474) absolutely
MANNER OF PAYMENT MUST BE AGREED

UPON Perfection of the Contract of Sale
The manner of payment must be agreed upon.
General Rule: A contract of sale is perfected at the
(Marnelego v. Banco Filipino Savings and Mortgage
moment there is a meeting of the minds upon the
Bank, G.R. No. 161524, 2006)
thing which is the object of the contract and upon the
price; consensual contract (Art. 1475)
It is an essential ingredient before a valid and
binding contract of sale can be said to exist,
because it is part of the prestation of the contract. Exception: When the sale is subject to a
(Sps. Navarra v. Planters Development Bank, G.R. suspensive condition. (People’s Homesite v. CA,
No. 172674, 2007) G.R. No. L-61623, 1984)
REQUIREMENTS FOR PERFECTION OF A

B. CONTRACT OF SALE SALE
1. When parties are face to face – when there is
Formation of Contract of Sale absolute acceptance of an offer that is certain
Policitacion/Negotiation Stage – offer floated, 2. When thru correspondence or telegram –
acceptance is floated but they do not meet; when the offeror receives or had knowledge of
covers the period when parties indicate the acceptance (Art. 1319)

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3. When the sale is subject to a suspensive NOTE: It must be

condition – from the moment the condition is stipulated that ownership
fulfilled (People’s Homesite v. CA, G.R. No. L- in the thing shall not pass
61623, 1984) to the buyer until full
payment of the price. (Art.
1478)
NOTE: Qualified acceptance is a mere counter offer
PAYMENT OF THE PRICE
which needs to be absolutely accepted to give rise
Non-payment of the Full payment of the price
to perfected contract of sale. (Art. 1319; Manila
price is a negative is a positive suspensive
Metal Container v. PNB, G.R. No. 166862, 2006) resolutory condition. condition, the failure of
(Art. 1179) which is not a breach of
Business ads are mere invitations to make an offer contract but simply an
except when it appears to be otherwise. (Art. 1325) event that prevents the
obligation of the seller to
A contract of sale is a consensual contract. Under convey title to the buyer.
Article 1475 of the Civil Code, the contract of sale is (Uy & Sons, Inc. v.
perfected at the moment there is a meeting of minds Valbueco Inc., G.R. No.
upon the thing which is the object of the contract and 179594, 2013)
upon the price. Based on the testimony of the heir
of Y, there was no meeting of the minds regarding The non-payment of the
the sale of the property as X did not offer the lot for purchase price renders
sale, and the heirs of Y never consented to any such the contract to sell without
purchase. The heirs were simply summoned and force and effect. (Tumibay
were handed the Deed of Absolute Sale by their v. Lopez, G.R. No.
grandmother without any agreement as regards the 171692, 2013)
sale of any property. (Uy v. Heirs of Uy-Renales, REMEDIES
G.R. No. 227460, December 05, 2019) Specific Specific performance
performance or cannot be availed of when
Rules Governing Auction Sales rescission under the contract to sell has
• Sale is perfected by the fall of the hammer Articles 1191, 1592, been cancelled due to the
• Seller has the right to bid at the auction provided and 1593. non-payment of the
purchase price. The buyer
such right was reserved and notice was given
cannot demand the seller
to that effect. (Art. 1476) to convey title when such
buyer did not pay the
1. Contract to Sell price, and the seller
cannot demand the buyer
CONTRACT OF CONTRACT TO SELL to pay the price, since
SALE failure to pay resulted in
TRANSFER OF TITLE the cancellation of the
Title passes to the Ownership is reserved in contract to sell. (Pilipino
buyer upon delivery the seller and shall not Telephone Corporation v.
of the thing sold (Art. pass to the purchaser Radiomarine Network
1477) until fulfillment of certain Phils. Inc., G.R. No.
conditions, such as full 160322, 2011)
payment of the purchase
price. (Art. 1478) Remedy of rescission is
OWNERSHIP OF THE SELLER not available because the
The seller has lost Title remains in the seller breach contemplated in
and cannot recover if the buyer does not rescission of contracts is
ownership of the comply with the condition the obligor’s failure to
thing sold and precedent, which comply with an obligation
delivered (Arts. payment of the price at already extant, not a
1477, 1496) until the time specified in the failure of a condition to
and unless the contract. (Tuazon v. render binding that
contract of sale itself Garilao, G.R. No. obligation. A non-existent
is resolved and set 143673, 2001) obligation cannot be
aside. subject of rescission.

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(Diego v. Diego, G.R. No. Consideration in an option contract may be anything

179965, 2013) of value, unlike in sale where it must be price certain
(De Leon, Comments and Cases on Sales and in money. (San Miguel Philippines v. Huang, G.R.
Lease, 21-23, 2014) No. 137290, 2000) However, when the
consideration is not monetary, the consideration
2. Option Contract must be clearly specified as such in the option
contract or clause. When the written agreement
A contract granting an exclusive right in one person, itself does not state the consideration for the option
for which he has paid a separate consideration, to contract, the offeree bears the burden of proving the
buy a certain object within an agreed period of time. existence of a separate consideration for the option.
(Art. 1479) (PNOC v. Keppel Phils. Holdings, Inc., G.R. No.
202050, 2016)
An option can be in an independent/standalone
contract or simply embedded as a provision within a How Exercised: Notice of acceptance should be
contract that gives the option holder the right, but not communicated to offeror even without actual
the obligation, to exercise an option to buy or sell a payment of the option money as long as there is
subject matter. delivery of payment in consummation stage. (Nietes
v. CA, G.R. No. L-32873, 1972)
NOTE: There is no presumption of consideration, it
needs to be proven (Sanchez v. Rigos, G.R. No. L- Situations in an Option Contract:
25494, 1972) 1. With separate consideration
• Option contract is valid
Option - an unaccepted or unexercised contractual • Offeror cannot withdraw offer until after expiry
offer (Adelfa Properties v. CA, G.R. No. 111238, period
1995) • Subject to damages for breach of option
contract if offeror withdraws during the time
Elements of Valid Option Contract: stipulated but not to specific performance
1. Consent – meeting of the minds because an option contract does not create an
2. Subject matter – an option right to an obligation to give (Tuazon v. Del Rosario-
“unaccepted unilateral offer to buy or sell”, or an Suares, G.R. No. 168325, 2010)
“accepted promise to sell, or to buy”:
(a) A determinate or determinable object 2. Without separate consideration
(b) For a price certain (including manner of Even if the option without separate consideration
payment) constitutes a certain offer, still it must be exercised
3. Prestation – a consideration separate from within the option period and the acceptance must
purchase price for option given, i.e., Option still be absolute. (Tuazon v. Del Rosario-Suares,
(Villanueva & Tiansay, Law on Sales, 126, G.R. No. 168325, 2010)
2016)
Important rules on options:
Characteristics of Option Contract: (SPNO- 1. If the period for the exercise of the option is not
CUUP) supported by a separate consideration, the
1. Not the contract of sale by itself, Separate offeror is still free and has the right to withdraw
and distinct the offer before its acceptance, or, if an
2. Nominate acceptance has been made, before the offeror’s
3. Principal - but can be attached to other principal coming to know of such fact, by communicating
contracts that withdrawal to the offeree.
4. Onerous 2. The right to withdraw, however, must not be
5. Commutative exercised whimsically or arbitrarily; otherwise, it
6. Unilateral – versus contract of sale which is could give rise to a damage claim under Article
bilateral 19 (Abuse of Rights).
7. Preparatory 3. If the period has a separate consideration, a
8. Unaccepted or unexercised contractual offer contract of “option” is deemed perfected, and it

ATENEO CENTRAL
would be a breach of contract to withdraw the recognizes recovery of damages based on the
offer during the agreed period. abuse of rights doctrine. The consideration for the
4. The option is an independent contract in itself, RFR is technically the consideration for the mother
and it is to be distinguished from the proposed contract as the RFR has value to the party in whose
sales contract. If the optioner-offeror withdraws favor it is granted. In practice, the RFR may result in
the offer before its acceptance by the optionee- the lease rentals being adjusted downwards to
offeree, the optionee-offeree may not sue for account for the value of the RFR.
specific performance on the proposed contract
since it has not been perfected; however, the Only after the optionee fails to exercise his right of
optioner-offeror is liable for damages for breach first priority under the same terms and within the
of the option. period contemplated, could the owner validly offer to
5. In these cases, if the consideration is intended sell the property to a third person under the same
to be part of the consideration for the main terms as offered to the optionee. (Parañaque Kings
contract with a right of withdrawal on the part of v. CA, G.R. No. 111538, 1997)
the optionee, the main contract could be
deemed perfected; a similar instance would be Option Contract Distinguished from Right of
an “earnest money” in sale that can evidence its First Refusal
perfection. (Ang Yu Asuncion v. CA, G.R. No.
109125, 1994) OPTION CONTRACT RIGHT OF FIRST
REFUSAL
3, Right of First Refusal Principal contract; Accessory; cannot
stands on its own stand on its own
A right of first refusal (“RFR”) covers a situation Needs separate Does not need
wherein a promise on the part of the owner of a consideration separate
property is made that if he decides to sell the consideration
because it is an
property in the future, he will first offer the same to
agreed upon term in
the promisee.
a principal contract
Subject matter and There must be
It creates a promise to enter into a contract of sale price must be valid subject matter but
in the event the seller decides to sell his/her property price not important
and it has no separate consideration. It is not subject Not conditional Conditional
to specific performance because there is no Not subject to specific Subject to specific
contractual relationship here and it is not an performance performance
obligation to give (not a real contract).
Mutual promise to buy and sell (Art. 1479)
New doctrine: May be subject to specific 1. Promise to buy and sell a determinate thing for
performance in a specific instance. a price certain: reciprocally demandable;
2. Accepted unilateral promise to buy or to sell:
The RFR is only subject to specific performance binding upon the promissor if promise
insofar as it is attached to a valid written principal supported by a consideration distinct from the
contract (e.g., lease). RFR becomes one of the price.
considerations in the contract. If RFR is violated,
and property sold to another buyer in bad faith, the Implied renewals do not include the option to buy,
sale to the 3rd party buyer is rescissible. The price as it is not germane to the lessee's continued use of
for the 3rd party buyer is to be the basis for the price the property. Based on Article 1643, the lessee's
of the sale back to the one with the RFR. Lessee main obligation is to allow the lessee to enjoy the
can exercise the right of first refusal once the sale to use of the thing leased. Other contract stipulations
unrelated to this — for instance, the right of first
the third party is set aside or rescinded. (Equatorial
refusal — cannot be presumed included in the
Dev’t v. Mayfair Theater, G.R. No. 106063, 2006)
implied contract renewal. The law itself limits the
terms that are included in implied renewals. One
Effect of new doctrine: While valid option contract cannot simply presume that all conditions in the
is not subject to specific performance, right of first original contract are also revived; after all, a contract
refusal may be subject to specific performance. It is based on the meeting of the minds between

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parties. (Spouses Manas v Nicolasora, G.R. No. each have bought from the very same seller.
208845, February 3, 2020). (Spouses German v. Spouses Santuyo, G.R.
No. 210845, January 22, 2020)
C. EARNEST MONEY (Art. 1482) If not all the elements are present for Art. 1544 to
• Money given as part of purchase price
apply, the principle of prior tempore, potior jure or
• Acceptance is the proof that contract of sale
simply “he who is first in time is preferred in right”
exists
should apply. Indisputably, he is a purchaser in good
• Nothing in law prevents parties from treating faith because at the time he bought the real
earnest money differently property, there was still no sale to as a second
vendee. (Consolidated Rural Bank v. CA, G.R. No.
Absent proof of a clear agreement to the contrary, it 132161, 2005)
is intended to be forfeited if the sale does not
happen without the seller's fault. The potential buyer NOTE: If the two contracts involved are not both
bears the burden of proving that the earnest money contracts of sale, as when one is a contract to sell,
was intended other than as part of the purchase and the other one a contract of sale, Art. 1544 does
price and to be forfeited if the sale does not occur not apply. This follows the principle that in a contract
without the fault of the seller. (Racelis v. Spouses to sell, the seller has no obligation to deliver title until
Javier, G.R. No. 189609, January 29, 2018). there is full payment of the purchase price. Thus, for
as long as the condition of full payment has not been
Option Money Distinguished from Earnest fulfilled, a subsequent sale of the same property will
Money be valid since the seller still has title to the property.
OPTION MONEY EARNEST MONEY With more reason, if the seller in a contract to sell
Given as distinct Given as part of the has defaulted, the breach in the condition entitles
consideration for an purchase price the seller to sell the same property for full
option contract
consideration. Even if the buyer in the contract to
Applies to a sale that is Applies when there is
sell annotates his right in the title, the buyer in the
not perfected while the already a sale
option is not exercised contract of sale is not in bad faith. (Sps. Domingo v.
When given, the option When given, buyer is Sps. Manzano, G.R. No. 201883, 2016)
holder is not required bound to pay the Note that the Court applied this in this case even if
to exercise the option balance the buyer in the contract to sell was not in default
(either to buy or sell). since the seller accepted payment after due date.
(Oesmer v. Paraiso Development Corporation, G.R. Seller however must reimburse payments made to
No. 157493, 2007) the buyer even if he has only paid less than 2 years
of installments because he was not in default. Court
distinguished this from earlier case of Abarquez v.
D. DOUBLE SALES CA even if in that case, one also involved a contract
to sell – because in Abarquez, the seller already
General Rule: FIRST IN TIME, PRIORITY IN delivered to the buyer who accepted and took
RIGHT (Art. 1544) possession, and even constructed a house on the
land under installment sale. (Sps. Domingo v. Sps.
When general rule does not apply: when not all Manzano, G.R. No. 201883, 2016)
requisites embodied in Art. 1544 concur.
Double Sales Rules according to Art. 1544:
Requisites for Double Sales to Exist (VOCS) 1. Movable
1. That two (or more) sales transactions in the First to possess in good faith shall prevail (Art. 1544)
issue must pertain to exactly the same subject 2. Immovable
matter, and must be valid sales transactions. (a) First to register in good faith shall prevail;
2. That two (or more) buyers at odds over the (b) In case no registration is made, then first to
rightful ownership of the subject matter must possess in good faith shall prevail;
each represent conflicting interests; and (c) No registration and no possession in good
3. That two (or more) buyers at odds over the faith, then the person who presents oldest title
rightful ownership of the subject matter must in good faith, shall prevail. (Art. 1544)

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the right of ownership and other real rights. (Cheng

NOTE: The FIRST BUYER is always in good faith v. Genato, G.R. No. 129760, 1998)
and will always prevail if he registers his sale first. • Registered under Torrens system – 1544
His good faith is not destroyed by the subsequent applies
knowledge of the second sale. The reason behind • Not registered under the Torrens system – 1544
this is that at the time of perfection of his contract of still applies
sale, he was the only buyer. (Carbonell v. CA, G.R.
No. L-29972, 1976) But the knowledge gained by If 2nd sale is a judicial sale (made by way of levy on
the 2nd buyer of the first sale defeats his rights even execution), buyer merely steps into the shoes of the
if he is first to register, since such knowledge taints judgment debtor. Outside of such situation – must
his registration with bad faith. (Ordua v. Fuentebella, apply to conflicting sales over the same
G.R. No. 176841, 2010) unregistered parcel of land. If sale 1 occurs when
land is not yet registered and sale 2 is done when
Buyer in Good Faith – one who purchases and land is already registered – apply first in time,
pays a fair price for a property without notice that priority in right.
another has an interest or right to it. (Amoguis v.
Ballado, G.R. No. 189626, 2018.) Good faith must concur with registration. To be
entitled to priority, the second purchaser must not
If a land is registered and is covered by a certificate only establish prior recording of his deed, but must
of title, any person may rely on the correctness of have acted in good faith. (Gabriel v. Mabanta, G.R.
the certificate of title. However, this does not apply No. 142403, 2003)
where the party has actual knowledge of facts and
circumstances that would impel a reasonably Under the Torrens system, a sale of property that is
cautious man to make such inquiry or when the not registered under the Torrens system is binding
purchaser has knowledge of a defect or the lack of only between the buyer and the seller and does not
title in his vendor or of sufficient facts to induce a affect innocent third persons. (Evy Construction and
reasonably prudent man to inquire into the status of Development Corp. v. Valiant Roll Forming Sales
the title of the property in litigation. It is incumbent Corp., G.R. No. 207938, 2017)
upon a buyer to prove good faith should he or she
assert this status. (Amoguis v. Ballado, G.R. No. As an exception, “knowledge of an unregistered sale
189626, 2018.) is equivalent to registration.” (Evy Construction and
Development Corp. v. Valiant Roll Forming Sales
Lis pendens – notice that subject matter is in Corp., G.R. No. 207938, 2017)
litigation (Sps. Lim v. Vera Cruz, G.R. No. 143646,
2001) is a form of registration accorded priority right. Requisite Diligence for Buyer in Good Faith:
Diligence in verifying the validity of the title of the
A buyer cannot be considered a transferee in good property;
faith if it was aware of the title’s notices of lis Diligence in inquiring into the authority of the
pendens. (Register of Deeds of Negros Occidental transacting spouse to sell conjugal property in
v. Anglo, Sr., G.R. No. 171804, 2015) behalf of the other spouse. (Aggabao v.
Parulan, G.R. No. 165803, 2010).
Adverse claim – notice that somebody is claiming
better right (Gardner v. CA, G.R. No. L-59952, 1984) E. RISK OF LOSS
is a form of registration accorded priority right.
GENERAL RULE
Possession – both actual and constructive (Roman Legal consequences from point of perfection are the
Catholic Church v. Pante, G.R. No. 174118, 2012) same in both legal systems: upon perfection of an
unconditional contract of sale involving specific or
Registration – any entry made in the books of the determinate subject matter, the risk of loss
registry, including both registration in its ordinary deterioration and the benefits of fruits and
and strict sense, and cancellation, annotation, and improvements, were for the account of the buyer.
even marginal notes. It is the entry made in the
registry which records solemnly and permanently

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If the subject matter is generic, simply replace item. In a contract to sell, the forfeiture of partial payments
(Art. 1263) may only be valid if there is a stipulation to that
effect, subject to payments of reasonable rents. In a
WHO BEARS RISK OF LOSS/ DETERIORATION/ contract to sell, failure to fully pay the purchase price
FRUITS BEFORE PERFECTION results in the cancellation of the contract, and the
• Res perit domino parties shall stand as if the obligation to sell never
• The seller is the owner, so he bears risk of loss. existed." (Spouses Godinez v. Spouses Norman,
(Art. 1504) GR No. 225449, February 26, 2020, citing Olivarez
Realty Corporation v. Castillo)
WHO BEARS RISK OF LOSS/
DETERIORATION/FRUITS AT PERFECTION Remedies available under the Recto Law:
• Res perit domino In a sale of personal property, the price of which is
• Contract is merely inefficacious because loss of payable in installments, the seller may exercise the
the subject matter does not affect the validity of following remedies: (REF)
the sale Exact fulfillment of the obligation, should the buyer
• Seller cannot anymore comply with obligation fail to pay any installment;
so buyer cannot anymore be compelled to pay Rescind the sale, should the buyer’s failure to pay
the price. (Arts. 1493, 1494) cover two or more installments;
Foreclose the chattel mortgage, if one is constituted,
WHO BEARS RISK OF LOSS/ DETERIORATION/ should the buyer’s failure to pay cover two or
FRUITS AFTER PERFECTION BUT BEFORE more installments (Art. 1484)
DELIVERY
• Loss – confused state NOTE: This also applies to contracts purporting to
o Paras: BUYER be leases of personal property with option to buy,
o Tolentino: SELLER when the lessor has deprived the lessee of the
• Deterioration and fruits - Buyer bears loss and possession or enjoyment. (Art. 1485)
claims the fruits. (Art. 1538, 1189) Sale on installment: Payment by several partial
payments (two or more) in small amount (Levy
AFTER DELIVERY Hermanos, Inc. v. Gervacio, G.R. No. L-46306,
• Res perit domino 1939)
• Delivery extinguishes ownership of the seller
Rationale of the law: Buyer is lulled into thinking
and creates a new one in favor of the buyer and,
that he could afford because of small amounts per
therefore, buyer bears risk of loss. (Art. 1504)
installment and at the same time to remedy abuse
of commercial houses. (Manila Trading and Supply
F. BREACH OF CONTRACT OF SALE
Co. v. Reyes, G.R. No. L-43263, 1935)
1. Recto Law: Sale of movables on
installment (Arts. 1484-1486) Nature of remedies: Alternative, not cumulative
(Nonato v. IAC, G.R. No. L-67181, 1985)
Coverage: Sale on installment (two or more
installments required) and financing transaction The fact that the seller did not foreclose the chattel
(Equitable Savings Bank v. Palces, G.R. No. mortgage constituted on the movable purchased on
214752, 2016) on movable property and contracts credit, but opted specific performance, with a plea
of lease of movable property with option to purchase for a writ of replevin, does not amount to a
(PCI Leasing and Finance v. Giraffe-X Creative foreclosure of the chattel mortgage to be covered by
Imaging, G.R. No. 142618, 2007) Art. 1484. (Tajanglangit v. Southern Motors, G.R.
No. L-10789, 1957)
Contract to sell is not covered. (Visayan Sawmill Co.
v. CA, G.R. No. 83851, 1993). REMEDIES are NOT CUMULATIVE but are
ALTERNATIVE and EXCLUSIVE
Rule on Forfeiture of Partial Payments in a
Contract to Sell 1. Specific Performance

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General Rule: Once chosen, can no longer rescind financed through banking institutions (R.A. 6552,
nor foreclose mortgage. Sec. 3)
Exception: After choosing specific performance but Excluded:

the same becomes impossible, rescission may be 1. Industrial real estate
pursued subsequently. (Villanueva & Tiansay, Law 2. Commercial real estate
on Sales, 352-353, 2016 3. Sale to tenants under agrarian laws (R.A. 6552,
Sec. 3)
2. Rescission
When chosen, there is a correlative obligation to Requisites of Sec. 3 of Maceda Law: (FReT)
restitute. 1. Failure to pay installments was due to reasons,
other than failure of the developer to develop
Stipulations that installments paid are forfeited are the subdivision or condominium according to
valid if not unconscionable. the approved plan and to comply with such
within the time limit;
Deemed chosen when: 2. Only covers Residential lots including
1. Notice of rescission is sent; condominium units, excluding, sales to tenants;
2. Takes possession of subject matter of sale; 3. The buyer has paid at least Two years of
3. Files action for rescission; installments. (R.A. 6552, Sec. 3)
4. Barring effect on recovery of balance. Rights of the Buyer under Maceda Law with at
(Villanueva & Tiansay, Law on Sales, 353-356, least two (2) years of Installment: (R.A. 6552,
2016) Sec. 3)
1. To pay, without additional interest, the unpaid
3. Foreclosure installments due within the total grace period
Once there has been foreclosure sale, the seller can earned by him. Said grace period is fixed at the
no longer claim for remaining balance on the rate of one-month grace period for every one
purchase price. (Northern Motors v. Sapinoso, G.R. year of installments payments made. Thus,
No. L-28074, 1970) here the buyer has at least two months grace
period for he should have paid at least two
GR: When foreclosure is chosen, seller can no years of installments to avail of the rights under
longer claim all amounts due from the sale, including this section.
damages and attorney’s fees. (Macondray & Co. v. NOTE: This right can be exercised only once in
Eustaquio, G.R. No. 43683, 1937) every five (5) years of the life of the contract and
its extensions, if any.
E: In case of Perverse Buyer-Mortgagor, if 2. To be refunded the cash surrender value of his
mortgagor refuses to deliver property to effect payments equal to 50% of his total payments if
foreclosure, expenses incurred in recovering the the contract is cancelled. But if he has paid five
property may also be recovered, i.e., attorney’s years or more, he is entitled to an increase of
fees, etc. (Filipinas Investment & Finance Corp. v. 5% every year and so on but the cash surrender
Ridad, G.R. No. L-27645, 1969) value shall not exceed 90% of his total
payments. (McLaughlin v. CA, G.R. No. L-
57552, 1986)
2. Maceda Law (R.A. 6552)
The actual cancellation of the contract referred
Rationale of the Law to above shall take place only:
Public policy to protect buyers of real estate on 1. After 30 days from receipt by the buyer of the
installment payments against onerous and notarial notice of cancellation or demand for
oppressive conditions. rescission, AND
2. Upon full payment to the buyer of the cash
Covered transactions surrender value (R.A. 6552, Sec. 3)
Applies to all sale of residential real estate on NOTE: Buyer may update payment during the 30
installments including Contracts to Sell and those day waiting period which will render the
cancellation ineffective.

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In the computation of the total number of installment

payments the following are included: NOTE: This only extinguishes obligations pertaining
1. Down payment and to contract of sale. It does not extinguish contract
2. Deposit or option money (R.A. 6552, Sec. 3) itself.
Rights of the Buyer under Maceda Law with less The right is exercised only by the seller in whom
than two (2) years of installments: (R.A. 6552, right is recognized in the contract or by any person
Sec. 4) to whom right was transferred; It must be in the
1. Still has the right to pay within a grace period same contract. (Villanueva & Tiansay, Law on
of not less than sixty (60) days from the date Sales, 474-475, 2016)
the installment became due.
2. If the buyer fails to pay the installment due at Period to redeem:
the expiration of the grace period, i.e. 60 days, (a) No period agreed upon – 4 years from date of
the seller may cancel the contract after 30 days contract
from receipt by the buyer of the notice of (b) Period agreed upon – should not exceed 10
cancellation or demand for rescission of the years; if it exceeded, valid only for the first 10
contract by a notarial act. years.
NOTE: Here, the buyer is not entitled to any (c) When period to redeem has expired and there
refund has been a previous suit on the nature of the
contract – seller still has 30 days from final
Other rights granted under the Maceda Law: judgment on the basis that contract was a sale
(R.A. 6552, Sec. 5 & 6) with pacto de retro. (Art. 1606)
1. Sell rights to another;
2. Assign the same to another person; Rationale: No redemption due to erroneous belief
3. Reinstate contract by updating during grace that it is equitable mortgage which can be
period and before actual cancellation; extinguished by paying the loan.
4. Deed of Sale to be done by notarial act;
5. To pay in advance any installment or the full This refers to cases involving a transaction where
balance of price anytime without interest and one of the parties contests or denies that the true
have such full payment annotated in certificate agreement is one of sale with the right to
of title. repurchase; not to cases where the transaction is
Purpose of the law: Protect buyers in installments conclusively a pacto de retro sale. (Villanueva &
against oppressive conditions. Applies to contracts Tiansay, Law on Sales, 486, 2016)
even before the law was enacted. (R.A. 6552, Sec.
2; Siska Dev. Corp. v. Office of the President, G.R. Example: Where a buyer a retro honestly believed
No. 93176, 1994) that he entered merely into an equitable mortgage,
not a pacto de retro transaction, and because of
NOTE: Stipulations contrary to the provisions of such belief he had not redeemed within the proper
Sections 3, 4, 5 and 6 are null and void. (R.A. 6552, period. (Leonardo v. CA, G.R. No. 82457, 1993)
Sec. 7) Waiver of the required notice is oppressive.
NOTE: When period has expired, and seller has
G. EXTINGUISHMENT OF THE SALE allowed the period of redemption to expire – seller is
at fault for not having exercised his rights so he
1. Conventional Redemption/Pacto de should not be granted a new period.
Retro Sale
Tender of payment is SUFFICIENT to compel
There is conventional redemption when the seller redemption but is not in itself a payment that relieves
reserved for himself the right to repurchase the thing the vendor from his liability to pay the redemption
sold, with the obligation to return: price. (Paez v. Magno, G.R. No. L-793, 1949)
The price of the sale;
The expenses of contract, Effect When There is No Redemption Made
Other legitimate payments,
• Jurisprudence before the NCC: buyer a retro
The necessary and useful expenses made on the
automatically acquires full ownership
thing sold (Art. 1601)

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• Under present Art. 1607: there must be judicial share of the other co-owners/co-heirs. (De
order before ownership of real property is Guzman v. CA, G.R. No. L-47378, 1987)
consolidated in the buyer a retro NOTE: A Seller can only sell what he or she owns,
or that which he or she does not own but has
The seller who is given the right to repurchase may authority to transfer, and a buyer can only acquire
exercise his right of redemption by paying the buyer: what the seller can legally transfer. Before the
1) the price of the sale; 2) the expenses of the property is partitioned, the heirs are co-owners of
contract; 3) legitimate payments made by reason of the property. The heirs cannot alienate the shares
the sale; and 4) the necessary and useful expenses that do not belong to them. Any sale by one heir of
made on the thing sold. The repurchase was the rest of the property will not affect the rights of the
exercised because from the P10M purchase price other heirs who did not consent to the sale. Such
directly paid to B, he deducted the P2M purchase sale is void with respect to the shares of the other
price, his expenses, interest, and the price of the heirs. Issuance of a certificate of title is not a grant
loan paid to DBP. He returned the remaining amount of title over petitioners' undivided portions of the
and one of the tractors. This is a tacit property. Nevertheless, a buyer could acquire valid
acknowledgment of the A’s exercise of his right to title over the whole property if the buyer were an
repurchase. (David v. David, G.R. No. 162365, innocent purchaser for value. (Heirs of Gregorio
2014) Lopez v. Development Bank of the Phils., G.R. No.
193551, 2014.)
How is Redemption Effected
Seller a retro must first pay the following: (PENT) NOTE: A co-owner has “no right to sell or alienate a
1. The Price of the thing sold concrete, specific or determinate part of the thing
2. Expenses of the contract and other legitimate owned in common, because his right over the thing
payments made by reason of the sale is represented by quota or ideal portion without any
physical adjudication.” (Cabrera v. Ysaac, G.R. No.
3. Necessary and useful expenses made on the
166790, 2014)
thing sold (Art. 1616)
4. Valid Tender of payment is sufficient (Legaspi
Fruits
v. CA, G.R. No. L-45510, 1986)
What controls is the stipulation between parties as
• Mere sending of notice without valid tender regards the fruits.
is insufficient.
• Failure to pay useful and unnecessary If none:
expenses entitles vendee to retain land 1. At time of execution of the sale a retro, there are
unless actual reimbursement is made visible or growing fruits – there shall be no pro-
rating at time of redemption if no indemnity was
In Case of Multi-Parties paid by the vendee a retro.
(a) When an undivided thing is sold because co- 2. At time of execution sale a retro, there be no
owners cannot agree that it be allotted to one of fruits but there are fruits at time of redemption –
them – vendee a retro may compel the vendor to pro-rated between vendor a retro and vendee a
redeem the whole thing (Art. 1611) retro giving the vendee a retro a part
(b) When an undivided thing is sold by co- corresponding to the time he possessed the
owners/co-heirs, vendors a retro may only land. (Art. 1617)
exercise his right over his respective share;
vendee a retro may demand that they must come PRE-EMPTION REDEMPTION
to an agreement first and may not be compelled Arises before sale Arises after sale
to consent to a partial redemption (Art. 1612)
No rescission There can be rescission
(c) When rights of co-owners over an undivided
because no sale of the original sale
thing is sold as regards to their own share –
exists yet
vendee retro cannot compel one to redeem the
Action is directed Action is directed
whole property
against prospective against buyer
(d) Should one of the co-heirs/co-owners succeed in
seller
redeeming the property – such vendor a retro
shall be considered as trustee with respect to the

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2. Legal Redemption (b) When 2 or more owners of adjoining lot desire

to exercise right to redeem, owner whose
The right to be subrogated upon the same terms and intended use is best justified shall be preferred.
conditions stipulated in the contract, in the place of (Art. 1622)
one who acquires the thing by (1) purchase OR (2)
by dation in payment OR (3) by other transaction 4. Sale of credit in litigation
whereby ownership is transmitted by onerous title. When a credit or other incorporeal right in litigation
(Art. 1619) is sold, debtor shall have a right to extinguish it by
reimbursing the assignee for the price the latter paid
NOTE: Only applies to contracts of sale. therefor plus judicial costs, interest; except when the
assignment or sale is made: (a) to a co-heir or co-
owner of the right assigned; (b) to a creditor in
Types of Legal Redemption: payment of his credit; or (c) to the possessor of a
1. Among co-heirs tenement or piece of land which is subject to the
Any of the heirs sells his hereditary rights to a right in litigation assigned. (Arts. 1634, 1635)
stranger before partition:
• Any of the co-heirs may be subrogated to the Debtor may exercise right within 30 days from the
rights of the purchaser by redeeming said date assignee demands payment from him (Art.
hereditary right: reimburse the buyer of the price 1634)
of the sale
• Co-heirs have 1 month from receipt of notice in Other Instances When Right of Legal
writing (Art. 1088) Redemption is Granted:
1. Redemption of homesteads
2. Among co-owners 2. Public Land Act
Any or all of co-owners sell their shares to 3rd 3. Land acquired under free patent homestead
person: subject to repurchase by wife, legal heirs within
• Any co-owner may exercise the right of 5 years from date of conveyance granted by
redemption by paying reasonable price of law, need not be stipulated
property to the buyer
• If 2 or more co-owners desire to exercise right of Redemption in tax sales
redemption, they may only do so in proportion to In case of tax delinquency/failure to pay tax
the share they respectively have in thing owned assessments, property shall be foreclosed.
in common (Art. 1620)
Delinquent payer has 1 year from date of sale to
3. Among adjoining owners redeem by paying to the revenue District Officer the
Rural land amount of tax delinquencies, and interest or
(a) Where piece of rural land has an area not purchase price. (National Internal Revenue Code,
exceeding 1-hectare, adjoining owner has right Sec. 214)
to redeem unless grantee does not own a rural
land Redemption by judgment debtor: 1 year from
(b) If two or more adjacent lot owners desire to date of registration of certificate of sale to redeem
exercise right to redeem, owner of adjoining lot by paying purchaser at public auction with interest
with smaller area shall be preferred (Rules of Court, Rule 39, Secs. 27, 28)
(c) If two or more adjacent lot owners desire to
exercise right to redeem and both have same Redemption in extrajudicial foreclosure: 1 year
lot area, one who first requested shall be from date of sale and registration (Act No. 3135,
granted (Art. 1621) Sec. 6)
Urban land Redemption in judicial foreclosure of mortgage:

(a) When piece of land is small and cannot be right to redeem is granted to debtor mortgagor
used for any practical purpose and bought except when mortgagee is bank of a banking
merely for speculation, owner of adjoining land institution 90 days after finality of judgment. (GSIS
can redeem v. CFI, G.R. No. 45322, 1989)

ATENEO CENTRAL
3. Upon or after expiration of right to repurchase,

When Period of Redemption Begins to Run: another instrument Extending the period of
Right of legal pre-emption of redemption shall be redemption or granting new period is executed
exercised within 30 days from notice by the seller. 4. Buyer Retains for himself a part of the purchase
(Art. 1623) price
5. Seller binds himself to pay Taxes on thing sold
How exercised: Tender of payment is not 6. Any other case where the real Intention of
necessary; offer to redeem is enough. (Vda. de parties is to secure the payment of a debt or
Panaligan v. CA, G.R. No. 112611, 1996) performance of other obligation (Art. 1602)
NOTE: Written notice under Art. 1623 is mandatory NOTE: In case of doubt – in determining whether it
for the right of redemption to commence. (PSC vs. is an equitable mortgage or a sale a retro, the sale
Sps. Valencia, G.R. No. 150060, 2003) shall be construed as an equitable mortgage. (Art.
1603). Note that in the realm of securities such as
General Rule: Actual knowledge notwithstanding, shares of stocks, the parties can enter in to a
written notice is still required. (Verdad v. CA, repurchase agreement which essentially is a
G.R. No. 109972, 1996) collateralized or secured loan structured as a sale.
The seller is actually a borrower while the buyer is,
Exception: When actual knowledge is acquired by in reality, a creditor. The shares of stock “bought”
co-heirs living in same land with purchaser (Alonzo are actually collateral.
v. IAC, G.R. No. L-72873, 1987) or co-owner was
middleman in sale to 3rd party (Disitro v. CA, G.R. In case of doubt, a contract purporting to be a sale
No. 95256, 1991) with right to repurchase shall be considered as an
equitable mortgage. The nomenclature given by the
H. EQUITABLE MORTGAGE parties to the contract is not conclusive of its nature.
(Saclolo v. Marquito, G.R. No. 229243, June 26,
One which lacks the proper formalities, form of 2019)
words, or other requisites prescribed by law for a
mortgage, but shows the intention of the parties to Article 1602 of the Civil Code provides
make the property subject of the contract as security circumstances where a contract shall be presumed
for a debt and contains nothing impossible contrary to be an equitable mortgage. Jurisprudence
to law. (Cachola v. CA, G.R. No. 97822, 1992) consistently showed that the presence of even one
of these circumstances suffices to convert a
Any money, fruits, or other benefit to be received by purported contract of sale into an equitable
mortgage. Furthermore, courts are generally
the vendee as rent or otherwise shall be considered
inclined to construe a transaction purporting to be a
as interest and is subject to usury laws. sale as an equitable mortgage, which involves a
lesser transmission of rights and interests over the
The essential requisites of an equitable mortgage property in controversy. (Spouses Sy v. De Vera-
are: Navarro, G.R. No. 239088, April 3, 2019)
1. The parties entered into a contract denominated
as a contract of sale; and
2. Their intention was to secure an existing debt by What to Look for in Determining Nature of
way of a mortgage. (Molina vs. CA, G.R. No. Contract
125755, 2003) 1. Language of the contract
2. Conduct of parties – to reveal real intent
A contract with right to repurchase may be deemed
to be an equitable mortgage under the following Remedies available to the vendor:
conditions (IPERTI): 1. Reformation of contract (Art. 1359)
1. Price of sale with right to repurchase is 2. Action for declaration of nullity of deed of sale
unusually Inadequate 3. Action for specific performance (Tolentino v.
2. Seller remains in Possession as lessee or CA, G.R. No. 128759, 2002); or
otherwise 4. Foreclosure of the mortgage in equity (Briones-
Vasquez v. CA, G.R. No. 144882, 2005)

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2088 on the prohibition against pactum

Rationale Behind Provision on Equitable commissorium.
Mortgage:
1. Circumvention of usury law Circumvention of prohibition against pactum
Circumvention of prohibition against pactum commissorium – creditor cannot appropriate the
commissorium – creditor cannot appropriate the things given by way of pledge or mortgage; remedy
things given by way of pledge or mortgage; remedy here is foreclosure. The real intention of parties is
here is foreclosure. The real intention of parties is that the pretended purchase price is money loaned
that the pretended purchase price is money loaned and to secure payment of the loan, sale with pacto
and to secure payment of the loan, sale with pacto de retro is drawn up. (Heirs of Reyes, Jr. v. Reyes,
de retro is drawn up. (Heirs of Reyes, Jr. v. Reyes, G.R. No. 158377, 2010)
G.R. No. 158377, 2010)
NOTE: Republic Act No. 11057 or the Personal
NOTE: Republic Act No. 11057 or the Personal Property Security Act has expressly repealed Art.
Property Security Act has expressly repealed Art. 2088 on the prohibition against pactum
commissorium.

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II. LEASE
A. KINDS OF LEASE
TOPIC OUTLINE UNDER THE SYLLABUS Contract of Lease is a contract by which one
agrees to give to the other for a fixed time and price
A. KINDS OF LEASE the use or profit of a thing, or of his services. (The
1. Lease of Things Employees’ Club, Inc. v. China Banking
2. Lease of Work and Services Corporation, G.R. No. L-40188, 1934)
B. RIGHTS AND OBLIGATIONS OF LESSOR
C. RIGHTS AND OBLIGATIONS OF LESSEE Characteristics of Lease of things (CLONS-PEP-
TP)
(a) Consensual
(b) Lessor need not be the owner
(c) Onerous
(d) Nominate
(e) Subject matter must be within the commerce of
man (i.e. not belonging to public domain)
(f) Principal contract
(g) Purpose is to allow enjoyment or use of a thing
(h) Purpose to which the thing will be devoted
should not be immoral
(i) Period is temporary
(j) Period may be definite or indefinite
NOTE: Persons disqualified to buy under Arts. 1490

and 1491 of the Civil Code are also disqualified to
become lessees of the things mentioned therein.
(Art. 1646)
LEASE OF THINGS
• Concerns movable or immovable property

• 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
NOTE: However, no lease for more than 99 years

shall be valid.
General Rule: The contract of lease may be made

orally.
Exception: Lease of real property for more than 1

year (must be in writing to comply with Statute of
Frauds).
LEASE OF WORK AND SERVICES
• One of the parties binds himself to execute a

piece of work or to render to the other some
service for a price certain
• The relation of principal and agent does not
exist between them

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CONTRACT OF CONTRACT OF the thing leased, according to the custom

LEASE OF SERVICE LEASE OF THING of the place.
The object of contract The object of contract 3. Pay the expenses for the deed of lease.
is the service itself and is a thing
not the result which it
generates Rights of the Lessee
Lessor’s services must Lessor has to deliver
still be paid even if the the thing leased. 1. Right to be respected in his possession.
result intended is not In case of breach, 2. Right to be restored to said possession by
attained. there may be an action the means established by law or by the
In case of breach, no for specific Rules of Court, should he be disturbed
action for specific performance therein.
performance
Remedies when lessor or lessee does not
comply with their obligations
B. RIGHTS AND OBLIGATIONS OF THE
LESSOR AND OF THE LESSEE a. Rescission and damages; or
b. Damages while allowing the contract to
Obligations of the Lessor (Art. 1654) (DNM) remain in force.
1. To Deliver the thing which is the object of

the contract in such condition as to render Remedy of lessee if lessor refuses to accept the
it fit for the use intended. rentals
2. To make on the same during the lease all To make a proper tender of payment and
the Necessary repairs in order to keep it consignation in order to extinguish the debt.
suitable for the use to which it has been
devoted unless there is a stipulation to the
contrary. Rules on changing the form of the lease
3. To Maintain the lessee in the peaceful and
adequate enjoyment of the lease for the 1. The lessor can alter the thing leased
entire duration of the contract. provided there is no impairment of the use
to which the thing is devoted under the
terms of the lease.
This is true only if the contract is valid. 2. The lessee can also make alterations so
Where the contract is void, for having an long as the value of the property is not
existent contract of lease, the lessor has no substantially impaired.
right to lease the same property. (Bercero 3. The lessee can also make alterations so
v. Capitol Development Corporation, G.R. long as the value of the property is not
No. 154765, 2007) substantially impaired.
Rules in case of urgent repairs
Nature of the duty of the Lessor to maintain
peaceful possession of the premises by the • If the repairs last for not more than 40 days, the
Lessor lessee is obliged to tolerate the work even
though the work may annoy him or he may be
This is merely a warranty that the lessee shall not deprived of a part of the premises if repairs last
be disturbed in his legal, and not physical, for not more than 40 days.
possession. (Chua Tee Dee v. Court of Appeals, • If repairs last for 40 days or more, lessee can
G.R. No. 135721, 2004) ask for reduction of the rent in proportion to the
time – including the 1st 40 days – and the part
of the property of which he is deprived.
Obligations of the Lessee (Art. 1657) (PUP)
NOTE: In either case, rescission may be availed of
1. Pay the price of the leaseaccording to the if the main purpose of the lease is to provide a
terms stipulated. dwelling place and the property becomes
2. Use the thing leased as a diligent father of uninhabitable.
a family devoting it to the use stipulated,
and in the absence of stipulation, to that Effects if lessor fails to make urgent repairs
which may be inferred from the nature of The lessee may (ROSS):

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(a) Ask for Rescission, in case of substantial (a) Lease may be for a determinate time or
damage to him. fixed period
(b) Order repairs at the lessor’s cost;
(c) Sue for damages; or • Lease will be for the said period and it ends
(d) Suspend the payment of the rent; on the day fixed without need of a demand.
(b) Lease may be without a fixed period

Effect of destruction of the subject matter with
respect to the lease i. For rural lands (Art. 1682) - It shall be for all
time necessary for the gathering of fruits
IF TOTALLY IF ONLY PARTIALLY which the whole estate may yield in 1 year,
DESTROYED DESTROYED or which it may yield once.
Lease is extinguished Lessee can choose ii. For urban lands (Art. 1687)
between reduction of (i) If rent is paid daily, lease is from day to
the rent and rescission day.
(ii) If rent is paid weekly, lease is from
Rules upon Termination of Lease governing week to week.
useful improvements caused by the lessee (iii) If rent is paid monthly, lease is from
(OAR) month to month.
If made in good faith and suitable to the use for (iv) If rent is paid yearly, lease is from year
which the lease is intended, without altering the form to year.
or substance of the property:
The general rule is lease contracts survive the death
1. Lessor may Appropriate the improvements of the parties and continue to bind the heirs except
provided he pays the lessee ½ of its value at if the contract states otherwise. (Inocencio vs.
that time; Hospicio de San Jose, G.R. No. 201787, 2013)
2. If lessor does not appropriate, lessee may
Remove the improvements even if the principal The well-entrenched principle is that a lease from
thing may suffer damage; month-to-month is with a definite period and expires
3. If improvement is Ornamental, no right of at the end of each month upon the demand to
reimbursement, but lessee may remove them vacate by the lessor. (Cebu Bionic Builders Supply,
provided no damage is caused to the principal Inc. vs. Development Bank of the Philippines, G.R.
thing. No. 154366, 2010)
NOTE: Lessee has no right of retention of the Rules on Extension of the Lease Period
premises if the lessor does not pay. His only right is
right of removal if lessor does opt not to pay and 1. If a lease contract for a definite term allows
appropriate. lessee to extend the term, there is no necessity
for lessee to duly notify lessor of his desire to so
Kinds of Trespass in Lease extend the term, unless the contrary is
stipulated.
(a) Trespass in fact (perturbacion de mere 2. “May be extended” as stipulation: lessee can
hecho): extend without lessor’s consent but lessee must
notify lessor.
• Lessor is not liable for the mere fact of a 3. “May be extended for 6 years, agreed upon by
trespass or trespass in fact made by a third both parties” as stipulation: this must be
person of a leased property. interpreted in favor of the lessee. Hence,
• Mere fact or mere act of trespass is when ordinarily the lessee, at the end of the original
the third person claims no right whatever. period, may either:
• Physical enjoyment is reduced. (a) Leave the premises
(b) Remain in possession
(b) Trespass in law (perturbacion de derecho): 4. In co-ownership, assent of co-owner is needed;
otherwise, it is void or ineffective as against
• A third person claims legal right to enjoy the non-consenting co-owners.
premises 5. Where according to the terms of the contract,
• Lessor will be held liable the lease can be extended only by the written
consent of the parties thereto, no right of
Duration of Lease extension can rise without such written consent.

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Implied new lease (Tacita Reconducion) Sublease

• A lessee may sublease the thing leased unless
• Lease that arises if at the end of the contract the there is an express prohibition to do so.
lessee should continue enjoying the thing • Remedy of lessor if lessee violates prohibition:
leased for 15 days with the acquiescence of the action for rescission of the lease and damages.
lessor, unless a notice to the contrary had • If the prohibition to sublease is not express but
previously been given by either party. only implied, the sublease will still be allowed.
• Period of the implied new lease is not that of the • Duration of sublease cannot be longer than that
original contract but the time established in of the lease to which it is dependent.
Arts.1682 and 1687 (see Duration of Lease • The prohibition against subleasing may not
above). embrace the taking in of boarders. (Mallare v.
• Other terms of the original contract are revived Court of Appeals, G.R. No. 85108, 1989)
except option to purchase in case such was in • In a sublease arrangement, there are two
the original contract. distinct leases: the principal lease and the
sublease.
NOTE: Terms that are revived are only those which
are germane to the enjoyment of possession, but
SUBLEASE ASSIGNMENT OF
not those with respect to special agreements which
LEASE
are by nature foreign to the right of occupancy or
Lessee remains a Lessee is
enjoyment inherent in a contract of lease – such as
party in the contract. disassociated from the
an option to purchase the leased premises. (Dizon
original contract of
v. Magsaysay, G.R. No. 23399, 1974)
lease.
Two leases and two Only one (lessor-
Requisites for Implied New Lease (ENC) distinct juridical assignee who
relationship (lessor- becomes the lessee)
1. The term of the original contract has Expired; lessee and sublessor- because lessee
2. The lessor has Not given the lessee a notice to sublessee) transmits absolutely
vacate; his rights and his
3. The lessee Continued enjoying the thing leased personality disappears
for at least 15 days with the acquiescence of the Sublessee does not Assignee has a direct
lessor; have any direct action action against the
against the lessor lessor, there being
When there is no implied new lease novation
Subleasing is allowed Assignment is not
(a) When before or after the expiration of the term, unless there is an allowed unless the
there is a notice to vacate given by either express prohibition lessor gives his
party. consent
(b) When there is no definite fixed period in the
original lease contract as in the case of NOTE: The sub-lessee is primarily liable to his sub-
successive renewals. lessor and only a court can extinguish or modify this
primary liability if the sub-lessor contests the pre-
EXTENSION OF RENEWAL OF
termination of the principal lease by the lessor.
LEASE CONTRACT LEASE CONTRACT
(Tamio v. Ticson, G.R. No. 154895, 2004)
Original contract Original contract
subsists ceases to exist
Creates additional Creates a new Circumstances when a sub-lessee is made liable to
term contract the lessor:
i. For all acts which affect the use and preservation
of the thing leased in the manner stipulated
Perpetual Lease
between the lessor and the lessee.
• A lease contract providing that the lessee can
ii. For any rent due to the lessor from the lessee
stay in the premises for as long as he wants and
which the latter failed to pay:
for as long as he can pay the rentals and its
• Sublessee is subsidiarily liable
increases.
• Sublessee shall not be responsible beyond
• This is not permissible; it is a purely potestative
amount of rent due from him, in accordance
condition because it leaves the effectivity and
with the terms of the sublease, at the time
enjoyment of leasehold rights to the sole and
of the extrajudicial demand by the lessor
exclusive will of the lessee.

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Grounds for Ejectment

(a) When the period agreed upon or that which is
fixed for the duration of leases (Arts.1682 and
1687) has expired (see Duration of Lease).
(b) Lack of payment of the price stipulated.
• In case lessor refuses to accept rentals,
lessee should make tender of payment,
and consignation otherwise there is no
payment.
• Willingness to pay is not payment.
(c) Violation of any of the conditions agreed upon
in the contract.
(d) When the lessee devotes thing leased to any
use or service not stipulated which causes the
deterioration thereof, or if he does not observe
the requirement in Art. 1657.
In a contract of lease, the twin remedies of

rescission and judicial ejectment become available
after either the failure to pay rent or to comply with
the conditions of the lease.
Technically, no extrajudicial rescission effectively

takes place as a result of the violations until the
demand to pay or comply is duly served and is
rejected or disregarded by the lessee.
The tenant's refusal to heed the demand to vacate,

coming after the demand to pay or to comply
similarly went unheeded, renders unlawful the
continued possession of the leased premises.
(Cebu Automatic Motors, Inc. vs. General Milling
Corporations, G.R. No. 151168, 2010)
The lessor may judicially eject the lessee for any

of the following causes: (EPCU)
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;
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.
————- end of topic————-

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III. AGENCY
A. DEFINITION OF AGENCY
TOPIC OUTLINE UNDER THE SYLLABUS By the Contract of Agency, a person binds himself
to render some service or to do something in
A. DEFINITION OF AGENCY representation or on behalf of another, with the
1. Characteristics consent or authority of the latter.
2. Essential Elements (CIVIL CODE, ART. 1868)
B. NATURE, FORMS AND KINDS OF AGENCY CHARACTERISTICS
1. Nature of Relationship ii. Consensual: perfected by mere consent;
2. Other Classifications (CIVIL CODE, Art. 1869, Art. 1870) The basis
3. Forms of Agency for agency is representation; on principal’s
4. Kinds of Agency part, there must be an intention to appoint, or
5. How Agency is Revoked such intention is naturally inferable from
words or actions; on part of the agent, there
C. OBLIGATIONS OF THE AGENT must be an intent to accept the appointment
1. General Obligations and act on it; in the absence of either, there
2. Effects of Agent’s Acts to Principal’s is no agency. Dominion Insurance Corp. v.
Liability CA, 376 SCRA 239 (2002).
3. Appointment of Sub-Agent iii. Nominate: it has its own name and the rules
4. Responsibility of Two (2) or More Agents provided in Title X, Book IV of the Civil Code
Appointed Simultaneously will find preferential application against the
5. Obligation Rules for Commission Agents general provisions on Obligations and
Contracts; it will be an agency whether or not
D. OBLIGATIONS OF THE PRINCIPAL parties understood the exact nature of the
1. Obligations of the Principal to the Agent relation. Doles v. Angeles, G.R. No. 149353,
2. Rules on Liability of Two (2) or more (2006).
Principals iv. Preparatory: The object of agency is for the
3. Principal’s Liabilities for Expenses agent to enter on behalf of the principal and
4. Agency by Estoppel within the scope of his authority into juridical
5. Principal's Revocation of the Agency acts with third parties Rallos v. Felix Go Chan
6. Principal’s Liability for Damages despite & Sons Realty Corp., G.R. No. L-24332
Revocation (1978).
v. Principal: it does not depend on another
E. MODES OF EXTINGUISHMENT contract for its existence and validity; Doles
1. How Agency is Extinguished v. Angeles, G.R. No. 149353 (2006).
2. Other Modes vi. Unilateral/Bilateral and Primarily Onerous:
3. Exceptions to Extinguishment by Death 1. Unilateral: if contract is gratuitous
or it creates obligations for only
Article numbers refer to the Civil Code unless one party (i.e., the agent) Urban
otherwise indicated. Bank, Inc. v. Peña, G.R. No.
145817, 145822,162562 (2011).
2. Bilateral: if contract is for
compensation or gives rise to
reciprocal rights and obligations
Urban Bank, Inc. v. Peña, G.R. No.
145817, 145822, 162562 (2011).
Basis: Representation
The acts of the agent on behalf of the principal within
the scope of his authority produce the same legal
and binding effects as if they were personally done
by the principal.Litonjua, Jr. v. Eternit Corp., G.R.
No. 144805 (2006).

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The distinguishing features of agency are its

representative character & its derivative authority. Exception to Contractual Nature
Rallos v. Felix Go Chan & Sons Realty Corp., G.R. When the agency is created by operation of law
No. L-24332 (1978). (See Part VIII on “Agency by Operation of Law”)
Purpose NOTE: An illegal termination of agency does not

Extend the personality of the principal through the justify reinstatement of the agent. The agency
facility of the agent. Litonjua, Jr. v. Eternit Corp., cannot be compelled by the courts to be reinstated
G.R. No. 144805 (2006). because such relationship can only be given effect
General rule is that what a man may do in with the consent of the principal. Orient Air Services
person he may do through another. Thus, a v. CA, G.R. No. 76931 (1991). At most, the principal
stockholder’s right of inspection can be exercised may be held liable for damages.
either by himself or through an attorney-in-fact.
Philpotts v. Phil. Mfg. Co., 40 Phil 471 (1919). Nature of Relationship between Principal and
Agent
Underlying principle of the contract of agency
Fiduciary – based on trust & confidence
is to accomplish results—to do a great variety of
i. Agent is estopped from asserting an
things—by using the services of another. Its aim is
interest adverse to his principal’s, whether
to extend the personality of the principal or the party
his own or that of an adverse party
for whom another acts and from whom such agent
(Severino v. Severino, G.R. No. 18058
derives the authority to act. Westmont Investment
(1923); CIVIL CODE, Art. 1435)
Corp. v. Francis, Jr., 661 SCRA 787 (2011).
ii. Agent must not use or disclose secret
information (CIVIL CODE, Art. 1889)
ESSENTIAL ELEMENTS (CROW) iii. Agent must give notice of material facts
(CIVIL CODE, Art. 1889)
i. Consent of the parties to establish the
relationship; NOTE: Theory of Imputed Knowledge
ii. Object or subject matter of the contract is General Rule: Knowledge of the agent is imputed
the execution of a juridical act in relation to to the principal even though the agent never
third persons; communicated it to his principal. Sunace
iii. Agent acts as a Representative and not for International Management Services, Inc. v. NLRC,
himself; and G.R. No. 161757 (2006).
iv. Agent acts Within the scope of his authority.
Rallos v. Felix Go Chan & Sons Realty Exceptions:
Corp., G.R. No. L-24332 (1978). Where the interests of the agent are adverse to
those of the principal;
By the contract of agency, a person binds himself to The agent’s duty is not to disclose the information,
render some service or to do something in as where he is informed by way of confidential
representation or on behalf of another with the information.
consent or authority of the latter. For a contract of Agent acts in bad faith or where the person claiming
agency to exist, therefore, the following requisites the benefit of the rule colludes with the agent to
must concur, namely: (1) there must be consent defraud the principal (CIVIL CODE, Art. 1898)
coming from persons or entities having the juridical
capacity and capacity to act to enter into such Distinction between Agency and Guardianship
contract; (2) there must exist an object in the form of AGENCY GUARDIANSHIP
services to be undertaken by the agent in favor of Agent represents a A guardian represents
the principal; and (3) there must be a cause or capacitated person an incapacitated
consideration for the agency. Lopez v. Court of person.
Appeals, 876 SCRA 1 (2018). Agent is appointed by Guardian is appointed
the principal and can by the court and
B. NATURE, FORMS, AND KINDS OF be removed by the stands in loco
AGENCY latter. parentis.
Agent is subject to the Guardian is not
NATURE OF RELATIONSHIP directions of the subject to the
principal. directions of the ward
Since it is a contract, there must be a meeting of the but must act for the
minds (i.e., consent) as to object and cause. (CIVIL benefit of the latter
CODE, Art. 1868)

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Agent can make the Guardian has no

principal personally power to impose Distinction between Agency and Contractor
liable. personal liability on Shell v. Firemen’s Ins. Co., G.R. No. L-8169 (1957)
the ward. AGENT INDEPENDENT
CONTRACTOR
Distinction between Agency and Judicial Represents his Employed by the
Administration principal employer
AGENCY JUDICIAL
ADMINISTRATION Acts under the Acts according to his
principal’s control and own method
Agent is appointed by Judicial administrator
instruction
the principal. is appointed by the
court. Principal is liable for Employer not liable
torts committed by the for torts committed by
Agent represents the Judicial administrator
agent within the scope the independent
principal. not only represents
of his authority (Civil contractor. (Rule VIII,
the court but also the
Code, Art. 1897, Art. Sec. 9(b), Omnibus
heirs and creditors of
1899) Implementing Rules
the estate.
of the Labor Code of
Agent does not file a Judicial administrator
the Philippines)
bond. files a bond.
Agent is controlled by Judicial Distinction between Agency and Partnership
the principal through administrator’s acts AGENCY PARTNERSHIP
the arrangement. are subject to specific An agent must submit A co-partner is not
orders from the court. to the principal’s right subject to co-partner’s
to control right to control, unless
Distinction between Agency and Lease there is an agreement
AGENCY LEASE OF to that effect
PROPERTY The agent assumes The partner binds not
Agent is controlled by Lessee is not no personal liability only the firm members
the principal. controlled by the where he acts within but himself as well
lessor. the scope of his
Agency may involve Lease of property authority (CIVIL CODE,
things other than involves property. Art. 1897)
property. The agent takes his The profits belong to
Agent can bind the Lessee cannot bind agreed share of all the partners as
principal. the lessor. profits not as owner common proprietors
but as an agreed in agreed proportions
Distinction between Agency to Sell and Sale measure of
Quiroga v. Parsons, G.R. No. 11491 (1918); compensation for his
Spouses Viloria v. Continental Airlines, G.R. No. services
188288 (2012).
AGENCY TO SELL SALE
Agent receives the Buyer receives the OTHER CLASSIFICATIONS OF AGENCY
goods as the goods as owner
principal’s goods As to Manner of Creation
Agent delivers the Buyer pays the price
proceeds of the sale 1. Express – agent has been explicitly authorized
by the principal, either orally or in writing. (CIVIL
Agent can return the Buyer, as a general CODE, Art. 1869)
object in case he is rule, cannot return the 2. Implied – agency is implied from the acts of the
unable to sell the object sold principal, from his silence, or lack of action, or
same to a third person his failure to repudiate the agency knowing that
Agent in dealing with Buyer can deal with another person is acting on his behalf without
the thing received is the thing as he authority, or from the acts of the agent which
bound to act pleases, being the carry out the agency. (CIVIL CODE, Art. 1869)
according to the owner
instructions of his As to Character
principal

ATENEO CENTRAL
1. Gratuitous – agent receives no compensation General Rule: Agency is presumed to be for

for his services (CIVIL CODE, Art. 1875) compensation, unless there is proof to the contrary.
2. Onerous – agent receives compensation for his (CIVIL CODE, Art. 1875)
services (CIVIL CODE, Art. 1875)
Exception: The presumption that the agency is for
As to Extent of Business of the Principal compensation is prima facie, meaning it may be
disproved by contrary evidence.(CIVIL CODE, Art.
1. General – agency comprises all the business of 1875)
the principal (CIVIL CODE, Art. 1876)
2. Special – agency comprises one or more Broker
specific transactions (CIVIL CODE, Art. 1876) Negotiates contracts relative to property in behalf of
others and for a compensation/fee. Litonjua v.
As to Authority Conferred Eternit Corp., G.R. No. 144805 (2006).
1. Couched in general terms – only acts of Difference from a Broker

administration (CIVIL CODE, Art. 1877) A broker brings parties together and parties agree
2. Couched in specific terms – only the to enter into a contract. A broker is not necessarily
performance of a specific act/s (CIVIL CODE, Art. an agent of either party, and negotiate contracts
1876).If a special power of attorney is granted, relative to property in behalf of others and for a
it will empower the agent to render acts of compensation/fee. He is described merely as a “go-
dominion to the extent granted (CIVIL CODE, Art. between” between the parties in Litonjua v. Eternit
1878) Corp. G.R. No. 144805 (2006), and does not have
authority to bind the parties.
FORMS OF AGENCY
Thus, in Litonjua, the Court said that a real estate
General Rule: Appointment of an agent may be oral broker (not an agent) is one who negotiates the sale
or written; no formal requirement (CIVIL CODE, Art. of real properties – his authority is to find a buyer (or
1869) seller) who wishes to purchase (or sell) a property
on terms agreed upon by the parties. He has no
Exception: When the law requires a specific form authority to bind the parties in the contract of sale.
(e.g., sale of a piece of land or any interest therein His authority is to find a buyer (or seller) and not to
through an agent – the agent’s authority must be in sell the property. Thus, there is no need of a special
writing, otherwise the sale is void) (CIVIL CODE, Art. power of attorney under Art 1878.
1874)
When Broker Entitled to Compensation:
How Agency May be Constituted from Side of 1. Whenever he brings to his principal a party who
Third Parties: is able and willing to take the property, and
1. Agency is not presumed to exist – persons enter into a valid contract upon the terms
dealing with an agent must ascertain not only named by the principal, although the particulars
the fact of agency, but also the nature and may be arranged and the matter negotiated and
extent of his authority – he must require the completed between the principal and the
presentation of the power of attorney, or the purchaser directly Macondray & Co., Inc. v.
instructions as regards the agency. Salvador v. Sellner, G.R. No. 9184 (1916).
Rabaja , G.R. No. 199990 (2015). 2. A broker is not entitled to commission for
2. Agency by Estoppel with Respect to Third unsuccessful efforts. Guardex Enterprises v.
Parties – one who clothes another with NLRC, G.R. No. 66541 (1990).
apparent authority as his agent, and holds him 3. The broker should be paid his commission
out to the public as such, cannot be permitted where he is the efficient procuring cause in
to deny the authority of such person to act as bringing the sale. Prats v. CA, G.R. No. L-39822
his agent, to the prejudice of innocent third (1978); Manotok Brothers v. CA, G.R. No.
parties dealing with such person in good faith 94753 (1993).
and in the following pre-assumptions or
deductions, which the law expressly directs to Efficient Procuring Cause
be made from particular facts, are deemed When there is a close proximate and causal
conclusive. Macke v. Camps, G.R. No. 2962 connection between the efforts and labor of the
(1907). agent and the principal’s sale of property. Manotok
Brothers v. CA, G.R. No. 94753 (1993).
Compensation

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Q: Will a broker be paid if the transaction was Heavy Industries Corp., G.R. No. 217782, 23
effected after the expiration of his authority? June 2021.)
A: Although sale of object of agency was perfected In a case where a broker accepted a propina
three days after expiration of the agency, agent (gift/tip) to persuade the principal to sell the property
would still be entitled to receive commission at a lower price, the court ruled that the broker was
stipulated when agent was the efficient procuring not entitled to his commission despite the successful
cause in bringing about the sale he was entitled to sale.
compensation.. He is the efficient procuring cause
The duties of a broker to his employer are
when there is a close proximate and causal
essentially those which an agent owes to his
connection between the efforts and labor of the
principal. An agent who takes a secret profit in the
agent and the principal’s sale of property. Manotok
nature of a bonus, gratuity or personal benefit from
Brothers v. CA, G.R. No. 94753 (1993).
the vendee, without revealing the same to his
Compare with: Although buyer was
prinicipal, the vendor, is guilty of breach of his
introduced by broker to seller, nonetheless broker
loyalty to the principal, and forfeits his right to collect
was not entitled to commission even with the
the commission from his principal even if the
consummation of the sale because the lapse of the
prinicipal does not suffer any injury by reason of
period of more than one (1) year and five (5) months
such breach of fidelity, or that he obtained better
between the expiration of broker’s authority to sell
results or that the agency is a gratuitous one, or that
and the consummation of the sale to the buyer, is
usage or customs allows it, because the rule is to
significant index of the broker’s non-participation in
prevent the possibility of any wrong, not to remedy
the really critical events leading to the
or repair an actual damage. The fact that the
consummation of said sale. Broker was not the
principal may have benefited by the valuable
efficient procuring cause in bringing about the sale
services rendered by the agent does not exculpate
and therefore not entitled to the stipulated broker’s
the agent who only has himself to blame for such
commission. Inland Realty v. Court of Appeals,
treachery and perfidy. Domingo v. Domingo, 42
273 SCRA 70 (1997).
SCRA 131 (1971).
NOTE: “Procuring cause” refers to a cause Agents who have been authorized to sell parcels of
originating a series of events which, without break in land cannot claim personal damages in the nature
their continuity, resulting in the accomplishment of of unrealized commission by reason of the act of the
the prime objective of the broker’s employment, i.e. buyer is refusing to proceed with the sale. The
to produce a purchaser ready, willing, and able to rendering of such service did not make them parties
buy on the owner’s terms. To be regarded as the to the contracts of sale executed in behalf of the
“procuring cause” to be entitled to a commission, a latter. Since a contract may be violated only by the
broker’s efforts must have been the foundation on parties thereto as against each other, the real
which the negotiations resulting in a sale began. parties-in-interest, either as plaintiff or defendant, in
Medrano v. CA, G.R. No. 150678 (2005). an action upon that contract must, generally, either
be parties to said contract. Uy v. Court of Appeals,
When Broker is not entitled to a commission; 314 SCRA 69 (1999).
Well settled is the rule that an agent is not entitled Law on Double Agency
to commissions for unsuccessful or If two or more persons have appointed an agent for
unconsummated transactions. As a general rule, an a common transaction or undertaking, they shall be
agent is entitled to a commission only upon the solidarily liable to the agent for all the consequences
successful conclusion of a sale. However, in certain of the agency (CIVIL CODE, Art. 1915).
cases where the factual circumstances are
contested, as in the case at bar, the determination Requisites for Principal to be bound by act of
of an agent's right to commissions depends on a Agent (CIVIL CODE, Art. 1897)
number of considerations, such as: 1) the extent of 1. The agent must act on behalf of the principal
completion of the undertaking, which may be full, 2. The agent must act within the scope of his
partial, or non-existent; 2) the value of the agent's authority
efforts to the principal; 3) the termination of the
agency before full completion of the undertaking; When Principal is not bound by act of Agent
and 4) the nature and circumstances of such General Rule: The agent acts without or beyond the
termination. As pointed out by an eminent scope of his authority in the principal’s name (CIVIL
commentator on the subject. (Atienza v. TKC CODE, Art. 1897, 1910, Art. 1403 (1))

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Exceptions: receives it without any objection (CIVIL CODE, Art.

1. So far as third persons are concerned, an act is 1871)
deemed to be within the scope of the agent's
authority, if such act is within the terms of the Between persons who are absent
power of attorney, as written, even if the agent General rule: Acceptance not deemed implied from
has in fact exceeded the limits of his authority the silence of the agent. (CIVIL CODE, Art.1872)
according to an understanding between the
principal and the agent; (CIVIL CODE, Arts. Exceptions:
1900& 1902) 1. When the principal transmits his power of
2. Where the principal has ratified the acts of the attorney to the agent who receives it without any
agent, expressly or impliedly (CIVIL CODE, Art. objection
1910) 2. When the principal entrusts to him by letter or
telegram a power of attorney with respect to the
If an agent acts in his own name, he (and not the business in which he is habitually engaged as
principal) is the one bound to the third person. The an agent, and he did not reply to the letter or
principal would not have a right of action in such telegram (CIVIL CODE,Art.1872)
case, unless the transaction involves things
belonging to the principal (CIVIL CODE, Art. 1883) “Present”
Generally, “face to face”, but includes people
NOTE: The agent is not deemed to have exceeded conversing directly through technology (e.g., over
his authority should he perform the agency in a the telephone or through a videoconference).
manner more advantageous to the principal than
that indicated by him, since he is authorized to do Q: How is implied acceptance manifested as
such acts as may be conducive to the between persons who are present and those
accomplishment of the purpose of the agency. (CIVIL who are absent?
CODE, Art. 1882)
A: As between persons who are present, the
In the absence of an agreement to the contrary, a acceptance of the agency may be implied if the
managing agent (i.e., one entrusted with the care principal delivers his power of attorney to the agent
and management of a business) may enter into and the latter receives it without any objection. (CIVIL
contracts that he deems reasonably necessary or CODE, Art. 1871). Meanwhile, as to those who are
requisite for the protection of the interests of his absent, the acceptance of the agency cannot be
principal entrusted to his management. Eurotech v. implied from the silence of the agent, except when
Cuizon, G.R. No. 167552 (2007). the principal delivers his power of attorney to the
agent, who receives it without any objection; or
Third Persons May Demand Presentation of when the principal entrusts to him by letter or
Authority of the Agent: telegram a power of attorney in which he is
habitually engaged as an agent, and he did not reply
Article 1902. A third person with whom the agent to the letter or telegram. (CIVIL CODE, Art. 1872)
wishes to contract on behalf of the principal may
require the presentation of the power of attorney, or
the instructions as regards the agency. Private or KINDS OF AGENCY
secret orders and instructions of the principal do not
prejudice third persons who have relied upon the Based on business or transactions
power of attorney or instructions shown them. (n) encompassed
Forms of Acceptance by Agent General vs Special Agency

1. Express - when it is oral or written (CIVIL CODE, GENERAL SPECIAL
BASIS
Art. 1870) AGENT AGENT
2. Implied - when it can be inferred from the acts Scope of All acts Specific acts
of the agent which carry out the agency, or from Authority connected in pursuance
his silence or inaction according to the with the of particular
circumstances (CIVIL CODE, Art. 1870) business or instructions or
employment with
Between persons who are present – there is in which he is restrictions
implied acceptance if the principal delivers his engaged necessarily
power of attorney to the agent and the latter (CIVIL CODE,, implied from
Art. 1876) the act to be

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done (CIVIL Instrument in writing by which the principal appoints

CODE, Art. his agent and confers authority to do specific acts
1876) on behalf of the principal. Its primary purpose is to
Nature of Involves No continuity evidence the agent’s authority to third parties with
Service continuity of of service whom the agent deals. Wee v. De Castro, G.R. No.
Authorized service 176405 (2008).
Extent to May bind his Cannot bind NOTE: Article 1878 does not state that the authority
Which Agent principal by an his principal in be in writing. As long as the mandate is express,
May Bind the act within the a manner such authority may either be oral or written. The
Principal scope of his beyond or requirement under Article 1878 refers to the nature
authority, outside the of authorization and not to its form Patrimonio v.
although it specific acts Gutierrez, G.R. No. 187769 (2014).
may not have which he is
been the authorized to Construction of Power of Attorney
subject of any perform Olaguer v. Purugganan, Jr., G.R. No. 158907
specific (2007).
instruction
Construction Generally Strictly General rule: Strictly construed to grant only
of Principal’s considered as construed as those specified powers.
Instructions advisory in they limit the
nature agent’s Exception: When strict construction will defeat
authority the very purpose of the power
Ways of Giving Notice of Agency and its Effect

Whether it covers legal matters 1. By special information - the person appointed
as agent is considered as such with respect to
Attorney-at-Law vs. Attorney-in-Fact the person to whom it was given. (CIVIL CODE,
ATTORNEY-AT-LAW ATTORNEY-IN-FACT Art. 1873)
A practitioner in a “An attorney-in-fact is 2. By public advertisement - the agent is
court of law who is simply an agent considered as such with regard to any person.
legally qualified to whose authority is (CIVIL CODE, Art. 1873)
prosecute and defend strictly limited by the
actions in such court. instrument appointing Agency Couched in General Terms
him, though he may do Covers only mere acts of administration (not acts of
things not mentioned dominion) even if:
in his appointment 1. The principal should state that he withholds no
necessary to the power
performance of the 2. The agent may execute such acts as he may
duties specifically consider appropriate
required of him by the 3. The agency should authorize a general and
power of attorney unlimited management (CIVIL CODE, Art.1877)
appointing him, such
authority necessarily How to Construe Contracts of Agency
being implied Contracts of agency, as well as general powers of
(Philippine Legal attorney, must be interpreted in accordance with the
Encyclopedia, p. 66) language used by the parties.
• The real intention of the parties is primarily
NOTE: “His authority is provided in a special power determined from the language used and
of attorney or general power of attorney or letter of gathered from the whole instrument.
attorney. An attorney-in-fact is not necessarily a • In case of doubt, resort must be had to the
lawyer.” (Pineda, Legal Ethics, p. 8) situation, context, and relations of the
parties. The intention of the parties must
be sustained, not defeated.
Whether it covers acts of administration or acts • If the contract is open to two (2)
of dominion – General Power vs. Special Power constructions, one of which would uphold
of Attorney the intention while the other would
overthrow it, the former is to be chosen.
Power of Attorney Liñan v. Puno, G.R. No. L-9608 (1915).

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NOTE: A Special Power of Attorney must express

Cases Where Special Power of Attorney is the powers of the agent in clear and unmistakable
Necessary language for the principal to confer the right upon an
1. To make such Payments as are not usually agent Yoshizaki v. Joy Training Center of Aurora,
considered as acts of administration; Inc., G.R. No. 174978 (2013).
2. To Effect novations which put an end to
obligations already in existence at the time the However, Article 1878 does not state that the
agency was constituted; authority be in writing. As long as the mandate is
3. To Compromise, to submit questions to express, such authority may either be oral or written.
arbitration, to renounce the right to appeal from The requirement under Article 1878 refers to the
a judgment, to waive objections to the venue of nature of authorization and not to its form Patrimonio
an action, or to abandon a prescription already v. Gutierrez, G.R. No. 187769 (2014).
acquired;
4. To Waive any obligation gratuitously; The special power of attorney can be included in the
5. To Enter into any contract by which the general power when it specifies therein the act or
ownership of an immovable is transmitted or transaction for which the special power is required.
acquired either gratuitously or for a valuable Estate of Lino Olaguer v. Ongjoco, G.R. No. 173312
consideration; (2008).
6. To Make gifts, except customary ones for
charity or those made to employees in the Q: A borrowed money from C on behalf of B
business managed by the agent; without B’s knowledge. C sought to recover
7. To Loan or borrow money, unless the latter act from A, but to no avail. He thereafter sent several
be urgent and indispensable for the demand letters to B asking for the payment. B
preservation of the things which are under now contends that he should not be held liable
administration; because there was no loan between him and C
8. To Lease any real property to another person since he did not give a special power of attorney
for more than one year; for the borrowing of money. Is B correct?
9. To Bind the principal to render some service
without compensation; A: Yes. Art. 1878 of the NCC provides that a special
10. To Bind the principal in a contract of power of attorney is necessary in order to loan or
partnership; borrow money, unless the latter act be urgent and
11. To Obligate the principal as a guarantor or indispensable for the preservation of the things
surety; which are under administration.
12. To Create or convey real rights over immovable
property; Powers not included in the power to mortgage
13. To Accept or repudiate an inheritance; 1. To sell (CIVIL CODE, Art. 1879)
14. To Ratify or recognize obligations contracted 2. To execute a second mortgage
before the agency; 3. To mortgage for the agent or any 3rd person’s
15. Any Other act of strict dominion. (CIVIL CODE, benefit, unless clearly indicated
Art. 1878)
NOTE: A Special Power of Attorney is not required Powers not included in the power to
to execute a Deed of Partition because partition is a compromise
conveyance of real property. Heirs of Ureta v. Heirs Submission to arbitration (CIVIL CODE, Art. 1880)
of Ureta, G.R. No. 165748 (2011).
1. The agent must act within the scope of his
NOTE: A Special Power of Attorney is strictly authority. He may do such acts as may be
construed. Hence, the act under Article 1878 sought conducive to the accomplishment of the
to be authorized must be clearly stated. purpose of the agency. (CIVIL CODE, Art. 1881)
Accordingly, the power of administration does not Agency by Estoppel

include acts of disposition or encumbrance, which There is really no agency at all, but the alleged
are acts of strict ownership. Similarly, an authority to agent seemed to have apparent or ostensible,
sell or dispose does not include the authority to although not real, authority to represent another.
administer. Aggabao v. Parulan, G.R. No. 165803 Country Bankers Insurance Corporation v. Keppel
(2010). Cebu Shipyard, et. al., G.R. No. 166044 (2012).
NOTE:

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• If a person specially informs another or believed that

states by public advertisement that he has the principal
given a power of attorney to a third person, intended him
the latter thereby becomes a duly to act as an
authorized agent, in the former case with agent
respect to the person who received the
special information, and in the latter case
with regard to any person (CIVIL CODE, Instances creating an Agency by Operation of
Art.1873). Law
• Even when the agent has exceeded his 1. The agent must finish the business already
authority, the principal is solidarily liable begun on the death of the principal, should
with the agent if the former allowed the delay entail any danger (CIVIL CODE, Art. 1884,
latter to act as though he had full powers par. 2)
(CIVIL CODE, Art. 1911) 2. The agent, even if he should withdraw from the
agency for a valid reason, must continue to act
Requisites of Agency by Estoppel until the principal has had reasonable
1. The principal manifested a representation of the opportunity to take the necessary steps to meet
agent’s authority or knowingly allowed the the situation (CIVIL CODE, Art. 1929).
agent to assume such authority; 3. Anything done by the agent, without knowledge
2. The third person, in good faith, relied upon such of the death of the principal or of any other
representation; and cause which extinguishes the agency, is valid
Relying upon such representation, such third and shall be fully effective with respect to third
person has changed his position to his persons who may have contracted with him in
detriment Country Bankers Insurance good faith (CIVIL CODE, Art. 1931).
Corporation v. Keppel Cebu Shipyard, et. al.,
G.R. No. 166044 (2012).
NOTE: If the agent dies, the heirs must notify the
Distinction between Agency by Estoppel and principal thereof, and in the meantime adopt such
Implied Agency measures as the circumstances may demand in the
interest of the latter (CIVIL CODE, Art. 1932)
AGENCY BY IMPLIED
BASIS HOW AGENCY IS REVOKED
ESTOPPEL AGENCY
Existence of No agency at There is an
actual all actual agency 1. Principal may revoke the agency (express or
agency implied) at will and compel agent to return the
Reliance by Can be Such reliance document evidencing the agency. (CIVIL CODE,
3rd persons invoked only is not needed, Art. 1920)
by a 3rd since the 2. Agency has been entrusted for purpose of
person who in agent is a real contracting with specified persons – revocation
good faith agent will not prejudice specified persons if they were
relied on the not notified. (CIVIL CODE, Art. 1921)
conduct of the 3. If the agent had general powers – revocation
principal in does not prejudice third persons who acted in
holding the good faith and without knowledge of the
agent out as revocation. Notice of revocation in a newspaper
being of general circulation is a sufficient warning.
authorized (CIVIL CODE, Art. 1922)
Nature of An agent by An agent by 4. The appointment of a new agent for the same
Authority estoppel has implied business or transaction revokes the previous
none of the appointment agency from the day on which notice was given
rights of an has all the to the former agent. (CIVIL CODE, Art. 1923)
agent, except rights and 5. Agency is revoked if principal directly manages
where the liabilities of an the business entrusted to the agent, dealing
principal’s agent, i.e., directly with third persons (CIVIL CODE, Art.
conduct is has actual 1924)
such that the authority to 6. When two or more principals have granted a
agent act on behalf power of attorney for a common transaction,
reasonably of the principal any one of them may revoke the same without

ATENEO CENTRAL
the consent of the others. (CIVIL CODE, Art. 3. Finish the business already begun on the death
1925) of the principal should delay entail any danger
7. A general power of attorney is revoked by a (exception to the rule that death extinguishes
special one granted to another agent, as agency) (CIVIL CODE, Art. 1884);
regards the special matter involved in the latter. 4. Advance necessary funds if there be a
(CIVIL CODE, Art. 1926) stipulation to do so (except when the principal
8. The power shall continue to be in full force until is insolvent) (CIVIL CODE, Art. 1886);
the notice is rescinded in the same manner as 5. Act in accordance with the Instructions of the
it was constituted. (CIVIL CODE, Art. 1873). principal, and in default thereof, to do all that a
However, constitution by Special Information good father of a family would do (CIVIL CODE,
may be revoked by notice in a daily newspaper, Art. 1887);
provided it can be proven that 3rd persons in 6. Not to carry out the agency if it would Manifestly
question read the revocation Lustan v. Court of result in loss or damage to the principal (CIVIL
Appeals, G.R. No. 111924 (1997). CODE, Art. 1888);
7. Answer for damages if there being a conflict
between his & his principal’s interests, he
C. OBLIGATIONS OF THE AGENT prefers his own (CIVIL CODE, Art. 1889);
8. Not to borrow money for himself even if he has
GENERAL OBLIGATIONS been authorized to Loan money on behalf of the
principal.
General Obligations of the Agent to the NOTE: The agent can loan money to the
Principal (GOC) principal at the current rate of interest if he has
1. Act with utmost Good faith & loyalty for the been authorized to borrow money for the
furtherance of principal’s interests principal.(CIVIL CODE, Art. 1890)
2. Obey principal’s instructions 9. Render an Account of his transactions and
3. Exercise reasonable Care(CIVIL CODE, Art. deliver to the principal whatever he may have
1887) received by virtue of the agency (CIVIL CODE,
Art. 1891)
General Obligation of Agent who accepts the 10. Be Responsible in certain cases for the act of
Agency the substitute appointed by him (CIVIL CODE,
NOTE: The agent is bound by his acceptance to Art. 1892)
carry out the agency and is liable for the damages 11. Pay Interest on funds he has applied to his own
which, through his non-performance, the principal use (CIVIL CODE, Art. 1896)
may suffer.
Obligation of a Person who declines Agency
He must also finish the business already begun on In case a person declines an agency, he is bound to
the death of the principal, should delay entail any observe the diligence of a good father of a family in
danger. (CIVIL CODE, Art. 1884) the custody and preservation of the goods
forwarded to him by the owner until the latter should
Since agency is a fiduciary relationship, it is the appoint an agent. The owner shall as soon as
duty of the agent to carry out the agency in good faith practicable either appoint an agent or take charge of
for the advancement of the interests of the principal. the goods. (CIVIL CODE, Art. 1885)
Here, BPI had the obligation to carry out the agency
by informing the beneficiary, who appeared before EFFECTS OF AGENT’S ACTS TO PRINCIPAL’S
BPI to withdraw funds of the insured who was BPI's LIABILITY
depositor, not only of the existence of the insurance
contract but also the accompanying terms and Effects of Agent’s Acts to Principal’s Liability
conditions of the insurance policy in order for the LIABILITY OF
ACT OF AGENT
beneficiary to be able to properly and timely claim the PRINCIPAL
benefit. Such duty prevailed even after the death of Mismanagement of Principal still
the depositor. Bank of P.I. v. Laingo, 787 SCRA 541 the business by the responsible for the
(2016). agent acts contracted by the
agent with respect to
Specific Obligations of the Agent 3rd persons; Principal,
1. Carry out the agency (CIVIL CODE, Art. 1884); however, may seek
2. Answer for damages which through his non- recourse against the
performance the principal may suffer;(CIVIL agent
CODE, Art. 1884);

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Tort committed by the Principal civilly liable Article 1892 creates a presumption that an agent
agent so long as the tort is has the power to appoint a substitute, it has three
committed by the legal implications: First, the substitute becomes the
agent while agent of the principal, and the latter is bound by the
performing his duties acts of the substitute as if these acts had been
in furtherance of the performed by the principal’s appointed agent.
principal’s business Second, the substitute assumes an agent’s
Agent in good faith but Principal is liable for obligations to act within the scope of authority, to act
prejudices 3rdparties damages in accordance with the principal’s instructions, and
to carry out the agency, among others. In order to
Agent in bad faith and Only the agent is liable make the presumption inoperative and relieve
prejudices 3rd persons for damages himself from its effects, it is incumbent upon the
principal to prohibit the agent from appointing a
substitute. Third, Art. 1892 allocates responsibility to
Duty of Obedience the agent for the acts of the substitute when agent
ARTICLE 1881. The agent must act within the was not expressly authorized by a specific person is
scope of his authority. He may do such acts as may not designated, the agent appoints a substitute who
be conducive to the accomplishment of the purpose is notoriously incompetent or insolvent. In these
of the agency. (1714a) instances, the principal has a right of action against
both the agent and the substitute if the latter
commits acts prejudicial to the principal. Villaluz v.
When Agent may incur Personal Liability Land Bank of the Philippines, 814 SCRA 466
1. When the agent expressly binds himself (CIVIL (2016).
CODE, Art. 1897)
2. When the agent exceeds his authority without Where SPA to sell a piece of land prohibits a
giving such party sufficient notice of his substitute, but agent appoints a substitute who
powers(CIVIL CODE, Art. 1897, executes the deed of sale in name of the principal,
3. In the case where the agent exceeds his while the agent acted outside the scope of his
authority and the third party is aware of the authority, that did not make the sale void, but merely
limits of the powers granted by the principal, the unenforceable under the second paragraph of
contract is VOID but the agent is liable if he Art.1317. Principal’s acceptance of the proceeds
undertook to secure the principal's ratification. thereof are tantamount to ratification thereof.
(CIVIL CODE, Art.1898) Escueta v. Lim, 512 SCRA 411 (2007).
APPOINTMENT OF SUB-AGENT
RESPONSIBILITY OF TWO (2) OR MORE
Appointment of Sub-Agent AGENTS APPOINTED SIMULTANEOUSLY
Article 1892. The agent may appoint a substitute if
the principal has not prohibited him from doing so;
General rule: Joint liability
but he shall be responsible for the acts of the
Exception: When solidarity has been expressly
substitute:
stipulated, in which case, each of the agents
(1) When he was not given the power to
becomes solidarily liable for (1) the non-fulfillment of
appoint one;
the agency; and for (2) the fault or negligence of his
(2) When he was given such power, but
fellow agent(s) (CIVIL CODE, Arts.1894& 1895)
without designating the person, and the person
appointed was notoriously incompetent or insolvent.
Exception to the Exception: when one of the other
All acts of the substitute appointed against the
agent/s acts beyond the scope of his authority –
prohibition of the principal shall be void.
innocent agent is not liable. (CIVIL CODE, Art. 1895)
Article 1893. In the cases mentioned in Nos. 1
Effect where 3rd Person aware of limits of
and 2 of the preceding article, the principal may
agent’s power
furthermore bring an action against the substitute
with respect to the obligations which the latter has
Relevant provisions of the Civil Code to
contracted under the substitution. (1722a)
remember:
Q: A constituted B as his agent. Can B appoint
Art. 1898. If the agent contracts in the name
a substitute?
of the principal, exceeding the scope of his authority,
and the principal does not ratify the contract, it shall

ATENEO CENTRAL
be void if the party with whom the agent contracted Authority not deemed exceeded if the results
is aware of the limits of the powers granted by the are more advantageous:
principal. In this case, however, the agent is liable if Article 1882. The limits of the agent's authority
he undertook to secure the principal's ratification. shall not be considered exceeded should it have
been performed in a manner more advantageous to
Article 1901. A third person cannot set up the fact the principal than that specified by him. (1715)
that the agent has exceeded his powers, if the
principal has ratified, or has signified his willingness But Note this Case:
to ratify the agent's acts.
When agent has been authorized to purchase at an
Article 1910. The principal must comply with all auction sale a Parañaque property, but instead
the obligations which the agent may have bought the Manila property due to non-auctioning of
contracted within the scope of his authority. the Parañaque property, the agent still acted outside
the scope of the authority even when motivated by
As for any obligation wherein the agent has good intentions and by a sincere belief that the
exceeded his power, the principal is not bound purchase of the Manila property would benefit the
except when he ratifies it expressly or tacitly. (1727) spouses-principals, and entitles the spouses-
principals to the return of the purchase money they
remitted to the agent. Gonzales-Saldaña v.
Article 1317. No one may contract in the name of
Spouses Niamatali, 886 SCRA 479 (2018).
another without being authorized by the latter, or
unless he has by law a right to represent him.
Conditions for Ratification
A contract entered into in the name of another by
“Ratification in agency is the adoption or
one who has no authority or legal representation, or
confirmation by one person of an act performed on
who has acted beyond his power/s, shall be
his behalf by another without authority. The
unenforceable, unless it is ratified, expressly or
substance of the doctrine is confirmation after
impliedly, by the person on whose behalf it has been
conduct, amounting to a substitute for a prior
executed, before it is revoked by the other
authority. Ordinarily, the principal must have full
contracting party. (1259a)
knowledge at the time of ratification of all the
material facts and circumstances relating to the
ART. 1403. The following contracts are
unauthorized act of the person who assumed to act
unenforceable, unless they are ratified:
as agent. Thus, if material facts were suppressed or
(1) Those entered into the name of another
unknown, there can be no valid ratification and this
person by one who has been given no authority or
regardless of the purpose or lack thereof in
legal representation, or who has acted beyond his
concealing such facts and regardless of the parties
powers;
between whom the question of ratification may
arise. Nevertheless, this principle does not apply if
Effect of the principal receiving the benefits of
the principal’s ignorance of the material facts and
the transaction
circumstances was willful, or that the principal
Where a sale of land is effected through an agent
chooses to act in ignorance of the facts. However,
who made misrepresentations to the buyer that the
in the absence of circumstances putting a
property can be delivered physically to the control of
reasonably prudent man on inquiry, ratification
the buyer when in fact it was in adverse possession
cannot be implied as against the principal who is
of third parties, the seller-principal is bound for such
ignorant of the facts.” Thus, the acts of an agent
misrepresentations and cannot insist that the
beyond the scope of his authority do not bind the
contract is valid and enforceable; the seller-principal
principal, unless he ratifies them, expressly or
cannot accept the benefits derived from such
impliedly. Only the principal can ratify; the agent
representations of the agent and at the same time
cannot ratify his own unauthorized acts. Moreover,
deny the responsibility for them. Gonzales v.
the principal must have knowledge of the acts he is
Haberer, 47 Phil. 380 (1925).
to ratify.” Manila Memorial Park Cemetery, Inc. v.
Linsangan, 443 SCRA 377, 394 .
NOTE: The agent is responsible not only for fraud,

but also for negligence, which shall be judged with
more or less rigor by the courts, according to
whether the agency was or was not for
compensation. (CIVIL CODE, Art. 1909

ATENEO CENTRAL
ACTS OF THE
EFFECT EXCEPTION(S)
AGENT
On behalf of the Binds the principal Agent liable if he:
principal, within the Agent not personally liable (CIVIL Expressly makes himself liable
scope of authority CODE, Art. 1881)
Without or beyond Contract is unenforceable as Binding on the principal when:
scope of authority against the principal but binds the Ratified or
agent to the third person (CIVIL The principal allowed the agent to act as
CODE, Arts. 1317, 1403 and 1898) though he had full powers
The contract 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. (CIVIL CODE, Art. 1898)
Within the scope of Not binding on the principal. When the transaction involves things
authority but in the Principal has no cause of action belonging to the principal:
agent’s name against the 3rd parties and vice versa Remedy of the principal - damages for
agent’s failure to comply with the
agency.
Remedies of the third person in case of non-
performance:
If the case falls under the general rule,
he can sue the agent.
But when the contract involves things
belonging to the principal, he can
sue the principal.
But if it cannot be determined without
litigation who is liable, he can sue
both.
Within the scope of the Insofar as 3rd persons are
written power of concerned, not required to inquire
attorney but agent has further than the terms of the written
actually exceeded his power, agent acted within scope of
authority according to his authority;
an understanding Principal is estopped
between him & the
principal
With improper motives Motive is immaterial; as long as Third person knew agent was acting for his
within the scope of authority, valid own benefit: principal is not liable to 3rd
person
Authorized - principal still liable
Beyond the scope of the agent’s

authority
General Rule: Principal not liable
Exception: principal takes
advantage of a contract or receives
benefits made under false
representation of his agent
For the agent’s own benefit –

principal still liable; agent’s motive
immaterial

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success whenever agent had advanced & has

OBLIGATION RULES FOR COMMISSION no fault; includes interest (CIVIL CODE, Art.
AGENTS 1912)
3. Reimburse the agent for all advances made by
Memorize Civil Code Provisions on him provided the agent is free from fault (CIVIL
Commission Agents CODE, Art. 1912)
4. Indemnify the agent for all the damages which
Article 1903. The commission agent shall be the execution of the agency may have caused
responsible for the goods received by him in the the latter without fault or negligence on his part
terms and conditions and as described in the (CIVIL CODE, Art. 1913)
consignment, unless upon receiving them he should 5. Pay the agent the compensation agreed upon
make a written statement of the damage and or the reasonable value of the latter’s services
deterioration suffered by the same. (n) (CIVIL CODE, Art. 1875)
Article 1904. The commission agent who handles Liability of 3rd Persons to the Principal
goods of the same kind and mark, which belong to In Contract – a 3rd person is liable to the principal
different owners, shall distinguish them by upon contracts entered into by his agent, as if the
countermarks, and designate the merchandise contract has been entered into by the principal.
respectively belonging to each principal. (n) (CIVIL CODE, Art. 1897)
Article 1905. The commission agent cannot, without
the express or implied consent of the principal, sell RULES ON LIABILITY OF TWO (2) OR MORE
on credit. Should he do so, the principal may PRINCIPALS
demand from him payment in cash, but the
commission agent shall be entitled to any interest or Requisites for Solidary Liability of Principals
benefit, which may result from such sale. (n) 1. There are two (2) or more principals
2. The principals have all concurred in the
Article 1906. Should the commission agent, with appointment of the same agent
authority of the principal, sell on credit, he shall so 3. The agent is appointed for a common
inform the principal, with a statement of the names transaction or undertaking (CIVIL CODE, Art.
of the buyers. Should he fail to do so, the sale shall 1915)
be deemed to have been made for cash insofar as
the principal is concerned. (n) NOTE: The rule in Art. 1915 applies even when the
Article 1907. Should the commission agent receive appointments were made by the principals in
on a sale, in addition to the ordinary commission, separate acts, provided that they are for the same
another called a guarantee commission, he shall transaction. The solidarity arises from the
bear the risk of collection and shall pay the principal common interest of the principals and not from
the proceeds of the sale on the same terms agreed the act of constituting the agency.
upon with the purchaser. (n)
The principal is not bound by the acts of the
Article 1908. The commission agent who does not authorized agent where the latter failed to indicate
collect the credits of his principal at the time when in the mortgage that she was acting for and in behalf
they become due and demandable shall be liable for of her principal, and the REM explicitly shows on its
damages, unless he proves that he exercised due face that it was signed by agent in her own name
diligence for that purpose. (n) and personal capacity. The third-party bank has no
one to blame but itself. Not only did it act with undue
D. OBLIGATIONS OF THE PRINCIPAL haste when it granted and released the loan, but it
also acted negligently in preparing the REM as it
failed to indicate that the agent was signing it for and
OBLIGATIONS OF THE PRINCIPAL TO THE
on behalf of the principal. Bucton v. Rural Bank of El
AGENT
Salvador, Inc., G.R. No. 179625 (2014).
Obligations of the Principal to the Agent Important Note from the Civil Code:
(CARIP)
1. Comply with all the obligations agent contracted ARTICLE 1925. When two or more principals have
in representation of the principal (CIVIL CODE, granted a power of attorney for a common
Art. 1910) transaction, any one of them may revoke the same
2. Advance sums necessary for the execution of without the consent of the others. (n)
the agency, when agent so requests; liable for
reimbursement regardless of the undertaking’s

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Rule where two persons contract separately 3. When the agent incurred them with knowledge
with Agent and Principal that an Unfavorable result would ensue, if the
Two persons may contract separately with the agent principal was not aware thereof.
and the principal with regard to the same thing. If the 4. When it was Stipulated that the expenses would
two contracts are incompatible with each other, the be borne by the agent, or that the latter would
one of prior date shall be preferred. This is be allowed only a certain sum. (CIVIL CODE,
subject, however, to the rules on Double Sales Art.1918)
under Art. 1544 of the Civil Code (i.e., for movables:
first in possession, first in right; for immovables: first AGENCY BY ESTOPPEL
to register in good faith, first in right; absent any
inscription: first in possession or party who presents For an agency by estoppel to exist, following must
oldest title acquires ownership). (CIVIL CODE, Art. be proved: (1) principal manifested a representation
1916) of the agent’s authority or knowingly allowed the
agent to assume such authority; (2) third person, in
Note: good faith, relied upon such representation; (3)
Article 1917.In the case referred to in the preceding relying upon such representation, such third person
article, if the agent has acted in good faith, the has changed his position to his detriment. An
principal shall be liable in damages to the third agency by estoppel, which is similar to doctrine of
person whose contract must be rejected. If the agent apparent authority, requires proof of reliance upon
acted in bad faith, he alone shall be responsible. (n) representations, which needs proof that the
representations predated the action taken in
Agent’s Right of Retention reliance. Litonjua, Jr. v. Eternit Corp., 490 SCRA
1. Specific (only for those goods connected with 204 (2006).
the agency); and
2. Until the principal effects the reimbursement Who can be estopped to deny Agency?
and pays the indemnity (CIVIL CODE, Art. 1914) 1. Estoppel of Agent -
NOTE: The right of retention is limited to two Article 1870. Acceptance by the agent may also
instances: (a) reimbursement of sums be express, or implied from his acts which carry
advanced by the agent; and (b) indemnification out the agency, or from his silence or inaction
of damages for all damages arising from the according to the circumstances. (n)
execution of the agency without fault or
negligence. (CIVIL CODE, Arts. 1912, 1913, and 2. Estoppel by the Principal
1914)
Article 1869. Agency may be express, or
Cautionary Note with respect to pledges implied from the acts of the principal, from his
mentioned in Article 1914 of the Civil Code: silence or lack of action, or his failure to
Retention and Sale of Object Retained by Way repudiate the agency, knowing that another
of Pledge is now governed by Personal person is acting on his behalf without authority.
Property Security Act (R.A. 11057) which
deleted Art. 2122 of the Civil Code, see sections Doctrine of Apparent Authority
2, 3(j), 5, 6, 7, 49, 50, 51, 66b of the cited The doctrine of apparent authority focuses on two
statute. factors: first the principal’s manifestations of the
existence of agency which need not be expressed,
PRINCIPAL’S LIABILITIES FOR but may be general and implied; and second, is the
EXPENSES reliance of third persons upon the conduct of the
principal or agent. Under the doctrine, the question
General rule: Principal is liable for the expenses in every case is whether the principal has by his
incurred by the agent. voluntary act placed the agent in such a situation
that a person of ordinary prudence, conversant with
Exceptions (AFUS): business usages and the nature of the particular
1. If the agent Acted in contravention of the business, is justified in presuming that such agent
principal's instructions, unless the latter should has authority to perform the particular act in
wish to avail himself of the benefits derived from question. Professional Services, Inc. v. Court of
the contract. Appeals, 544 SCRA 170 (2008); 611 SCRA 282
2. When the expenses were due to the Fault of the (2010).
agent.

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The revocation of an agency becomes operative, as occasioned by the wrongful discharge of the
to the agent, from the time it is made known to him. agent before the expiration of the period fixed
Third parties dealing bona fide with one who has 2. Even if there was no time fixed for the
been accredited to them as an agent, however, are continuance of the agency, but the agent can
not affected by the revocation of the agency, unless prove that the principal acted in bad faith by
notified of such renovation. This refers to the revoking the agency in order to avoid the
doctrine of apparent authority. Under the said payment of commission about to be earned, the
doctrine, acts and contracts of the agent within the principal can be held liable for damages
apparent scope of the authority conferred to him, Villanueva supra at 209-210 citing Diolosa v.
although no actual authority to do such acts or has CA, 130 SCRA 350 (1984) & Valenzuela v. CA,
been withdrawn, revoked or terminated, bind the 191 SCRA 1 (1990).
principal. Hence, apparent authority may survive the
termination of actual authority or of an agency Necessity of Notice of Revocation
relationship. Bitte v. Jonas, 777 SCRA 489 (2015). 1. As to the agent – notice is always necessary;
sufficient notice if the party to be notified
PRINCIPAL'S REVOCATION OF THE AGENCY actually knows, or has reason to know, a fact
indicating that his authority has been terminated
General Rule: The principal may revoke the agency or suspended; revocation without notice to the
at will, and compel the agent to return the document agent will not render invalid an act done in
evidencing the agency. Such revocation may be pursuance of the authority
express or implied. (CIVIL CODE, Art. 1920) 2. As to 3rd persons – notice necessary
3. As to former customers - notice must be given
Exception: Agency coupled with interest to them because they always assume the
1. When a bilateral contract depends upon the continuance of the agency relationship
agency. 4. As to other persons - notice by publication is
2. When the agency is the means of fulfilling an enough (CIVIL CODE, Art. 1922)
obligation already contracted
3. When a partner is appointed as manager of a
partnership in the contract of partnership and E. MODES OF EXTINGUISHMENT
his removal from the management is
unjustifiable. (CIVIL CODE, Art. 1927) HOW AGENCY IS EXTINGUISHED
Implied Revocation of Agency How Agency is Extinguished (EDWARD)

1. Principal appoints a new agent for the same 1. By the Expiration of the period for which the
business or transaction (only if there is agency was constituted.
incompatibility); effective as between the 2. By the Death, civil interdiction, insanity or
principal and the agent only if communicated to insolvency of the principal or of the agent;
the agent; does not prejudice rights of third 3. By the Withdrawal of the agent;
persons acting in good faith without knowledge 4. By the Accomplishment of the object or purpose
of the revocation (CIVIL CODE, Art. 1923) of the agency;
2. Principal directly manages the business 5. By its Revocation;
entrusted to the agent, or deals directly with 3rd 6. By the Dissolution of the firm or corporation
persons (CIVIL CODE, Art. 1924) which entrusted or accepted the agency (CIVIL
CODE, Art. 1919)
Effect of Issuance of a Special Power of Attorney
The general power is impliedly revoked as to OTHER MODES
matters covered by the special power because a
special power naturally prevails over a general Other Modes
power (CIVIL CODE, Art. 1926) 1. Mutual withdrawal from the relationship by the
principal and agent;
PRINCIPAL’S LIABILITY FOR DAMAGES 2. By the happening of a supervening event that
DESPITE REVOCATION makes illegal or impossible the objective or
purpose for which the agency was constituted,
Principal’s Liability for Damages despite like the destruction of the subject matter which
Revocation is the object of the agency.(Villanueva &
1. If the agency was constituted for a fixed period, Villanueva-Tiansay, 2018)
the principal shall be liable for damages

ATENEO CENTRAL
NOTE: The list is not exclusive; causes are

particular only to agency; may be extinguished by Article 1920. The principal may revoke the agency
the modes of extinguishment of obligations in at will, and compel the agent to return the document
general whenever they are applicable, like loss of evidencing the agency. Such revocation may be
the thing and novation.(CIVIL CODE, Art.1291) express or implied. (1733a)
Modes of Extinguishing an Agency, Generally Article 1924. The agency is revoked if the principal
directly manages the business entrusted to the
Article 1919. Agency is extinguished: agent, dealing directly with third persons. (n)
(1) By its revocation;
(2) By the withdrawal of the agent; Article 1926. A general power of attorney is
(3) By the death, civil interdiction, insanity or revoked by a special one granted to another agent,
insolvency of the principal or of the agent; as regards the special matter involved in the latter.
(4) By the dissolution of the firm or corporation (n)
which entrusted or accepted the agency;
(5) By the accomplishment of the object or BUT: When the terms of the agency contract
purpose of the agency; allowed the agent “to dispose of, sell, cede, transfer
(6) By the expiration of the period for which the and convey x xx until all the subject property as
agency was constituted. (1732a) subdivided is fully disposed of,” the agency is one
with a period and it is not extinguished until all the
NOTE: Even if the reason for extinguishing the lots have been disposed of. Consequently, if the
agency is not true, the agent cannot insist on contract is terminated by the principal before all the
reinstatement. The agent can only demand lots in the subdivision has been disposed of, there
damages. Orient Air Services v. Court of Appeals, is a breach of contract for which the principal would
G.R. No. 76931 (1991). be liable for damages. Diolosa v. Court of Appeals,
130 SCRA 350 (1984).
EXCEPTIONS TO EXTINGUISHMENT BY DEATH Renunciation/Withdrawal

Termination of the agency by the subsequent act of
Exceptions to Extinguishment by Death (KID-C) the agent. (CIVIL CODE, Art. 1919 [2])
1. If the act of the agent was executed without the May the agent withdraw from the agency at
Knowledge of the death of the principal and the will?
third person who contracted with the agent Agent may do so but subject to the contractual
acted in good faith. Rallos v. Felix Go Chan & obligations owing to the principal (i.e., fixed period
Sons Realty Corp., 81 SCRA 251 (1978) of time for the agency or purpose not yet
2. To avoid Damage upon the agent’s death (CIVIL accomplished). (CIVIL CODE, Art. 1928)
CODE, Art. 1932)
3. The act of the agent was executed without Irrevocable Agencies:
knowledge of the death of the principal and the Article 1927. An agency cannot be revoked if a
third person who contracted with the agent bilateral contract depends upon it, or if it is the
acted in good faith (CIVIL CODE, Art. 1931) means of fulfilling an obligation already contracted,
or if a partner is appointed manager of a partnership
4. If it has been constituted in the Common in the contract of partnership and his removal from
interest of the principal and of the agent, or in the management is unjustifiable. (n)
the interest of a third person who has accepted
the stipulation in his favor (CIVIL CODE, Art. Article 1930. The agency shall remain in full force
1930) and effect even after the death of the principal, if it
has been constituted in the common interest of the
Can the heirs continue the agency? latter and of the agent, or in the interest of a third
General rule: Agency calls for personal services person who has accepted the stipulation in his favor.
on the part of the agent; rights & obligations are not (n)
transmissible
When the bank has been constituted with an
Revocation irrevocable power of attorney to file a claim in case
Termination of the agency by the subsequent act/s of loss or damage to the mortgaged vehicle, and
of the principal(CIVIL CODE, Arts. 1920, 1924, fails to make such claim and instead compels the
1926): spouses-borrowers to continue paying the

ATENEO CENTRAL
installments, the resort of the spouses to directly file

a claim with the insurance company does not of
itself amount to a revocation of the agency
arrangement as to relieve the bank of its duty of
diligence. Besides the agency was irrevocable
towards allowing the bank to seek proceeds for the
full payment of the loan; failing in such duty, the
bank can no longer collect on the unpaid balance of
the loan. Int’l Exchange Bank v. Briones, 822 SCRA
103 (2017).
Unlike simple SPAs, an agency coupled with

interests cannot be revoked at will, since it had been
created for the mutual interest of the agent and the
principal. It appears that Lina Sevilla is a bona fide
travel agent herself, and had acquired an interest in
the business entrusted to her: she had assumed a
personal obligation for the operation thereof, holding
herself solidarily liable for the payment of rentals;
she used her own name in pursuing the business,
after Tourist World had stopped further operations.
Her interest, obviously, is not limited to the
commissions she earned as a result of her business
transactions, but one that extends to the very
subject matter of the power of management
delegated to her. It is an agency that cannot be
revoked at the pleasure of the principal. Sevilla v.
Court of Appeals, 160 SCRA 171 (1988).
A power of attorney coupled with interest in a

partnership can be revoked for a just cause, such as
when the attorney-in-fact betrays the interest of the
principal. The irrevocability of the power of attorney
may not be used to shield the perpetration of acts in
bad faith, breach of confidence, or betrayal of trust,
by the agent for that would to authorizing the agent
to commit frauds against the principal. Coleongco v.
Claparols, 10 SCRA 577 (1964).

ATENEO CENTRAL

ATENEO CENTRAL
IV. CREDIT TRANSACTIONS

A. LOAN
TOPIC OUTLINE UNDER THE SYLLABUS 2 Types of Credit Transactions
Secured transactions – those supported by a
PART I: CREDIT TRANSACTIONS collateral or an encumbrance of property.
Unsecured transactions – those supported only by
1. LOAN a promise to pay or the personal commitment of
a. Kinds another such as a guarantor or surety.
b. Interest
2. DEPOSIT Security is something given, deposited or serving
3. GUARANTY AND SURETYSHIP as a means to ensure the fulfillment or enforcement
4. REAL ESTATE MORTGAGE of an obligation or of protecting some interest in the
5. ANTICHRESIS property.
2 Types of Security
Personal – when an individual becomes a surety or
a guarantor
Real or Property – when an encumbrance is made
on property (e.g. real estate mortgage, chattel
mortgage over vessels or aircrafts or security
interest over movables)
Characteristics of Loans
1. Real Contract – delivery is essential for
perfection of the loan (BUT a promise to lend, being
consensual, is binding upon the parties)
2. Unilateral Contract - only the borrower has the
obligation once the subject matter has been
delivered
Art. 1933 (06, 04, BAR): If the bailor delivers to the

bailee a non-consumable thing so that bailee may
use the same for a certain time and return the
identical thing, the contract perfected is a contract
of commodatum. There is NO TRANSFER OF
OWNERSHIP.
In mutuum, the object borrowed must be a

consumable thing the OWNERSHIP OF WHICH IS
TRANSFERRED to the borrower who incurs the
obligation to return the same consumable to the
lender in an equal amount, and of the same kind and
quality.

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COMMODATUM MUTUUM need (Art. 1946), or

when the contract is
As to object precarium, in which
case, the bailor may
Ordinarily involves The subject matter is demand the return of
something not money or other the thing at will. (Art.
consumable except consumable thing. 1947)
when the purpose of
consumable goods is 1. Kinds
merely for exhibition.
(Art. 1936)
Commodatum
As to cause
Parties in Bailment
Essentially gratuitous. May be gratuitous or Bailor– The lender/giver; the party who delivers
(Art. 1933) Otherwise, onerous (with a possession/custody of the thing bailed
it ceases to be stipulation to pay Bailee – The recipient; the party who receives the
commodatum. interest). possession/custody of the thing delivered
As to purpose Commodatum – bailor delivers to bailee a non-

consumable thing so that the latter may use it for
Use or temporary Consumption a certain time and return the identical thing
possession. Exception to the object: may be a consumable
thing if the purpose is merely exhibition.
As to subject matter
COMMODATUM USUFRUCT
Real or personal Personal property The bailee only The usufructuary gets
property acquires the use of the the right to the use and
thing loaned but not its to the fruits of the
As to ownership of the thing fruits. (Art. 1935) usufruct. (Art. 564)
It creates only a purely It creates a real right to
Retained by the bailor Passes to the debtor personal right to use the fruits of another’s
another’s property, and property. (Art. 564)
requires a stipulation to
As to return of the thing enable the bailee to
“make use” of the fruits.
(Arts. 1939-1940)
Same thing loaned Pay the same amount or Real contract; Consensual contract
the same kind and perfected only by
quality delivery of the subject
matter thereof. (Art.
As to risk of loss
1934)
Bailor since he is the Debtor/Bailee (even if Elements of commodatum

owner the thing is lost through a 2. Delivery of non-consumable thing;
fortuitous event) 3. Obligation to return it
4. Essentially Gratuitous (Art. 1933).
As to time of return
Kinds of Commodatum
Upon the lapse of the Upon the lapse of the a. Ordinary commodatum – bailee uses the
term agreed upon. term agreed upon. thing for a certain period of time
b. Precarium – bailor may demand the thing
However, Bailor may Exception: Art. 1198 loaned at will; exists in cases where:
demand the return of when the debtor loses i. There is no stipulation as to the
the thing loaned before every right to make use duration of the contract or use of the
the expiration of the of the period thing loaned
term in case of urgent ii. Use of the thing is merely tolerated by
the owner(Art. 1947).

ATENEO CENTRAL
i. If urgently need thing (may demand

Principal Obligations of a Bailee in a return/temporary use); or
Commodatum ii. If the bailor may demand immediate
1. Take good care of the thing with the diligence return of the thing if the bailee
of a good father of a family. (Art. 1163) commits any acts of ingratitude. (Art.
2. Use the thing loaned only for the purpose for 1948)
which it was loaned and for no other purpose. 1. If the bailee should commit
(Art. 1935) some offense against the
3. Payment of the ordinary expenses for the use person, the honor or the
and preservation of the thing loaned. (Art. property of the bailor, or of his
1941) wife or children under his
4. Payment of a 50% portion (unless otherwise parental authority;
stipulated) of extraordinary expenses arising 2. If the bailee imputes to the
from the actual use of the thing, which shall be bailor any criminal offense, or
borne by both the bailor and the bailee, even any act involving moral
though the bailee acted without fault, unless turpitude, even though he
there is a stipulation to the contrary. (Art. 1949, should prove it, unless the
par. 2) crime or the act has been
5. Return and to not retain the thing loaned committed against the bailee
except for damages mentioned in Art. 1951 himself, his wife or children
(those arising from hidden defects of the thing under his authority;
loaned). 3. If he unduly refuses him
support when the bailee is
When is the bailee in a commodatum liable for legally or morally bound to give
the loss of the thing which is the object of the support to the bailor.
contract, even if such loss is due to a fortuitous 2. Refund to the bailee extraordinary
event? expenses incurred for the preservation of
1. If he devotes the thing to any purpose the thing, provided the bailee brings the
different from that for which it has been same to the knowledge of the bailor before
loaned. incurring them, except when the reply to the
2. If he keeps it longer than the period notification cannot be awaited without
stipulated, or after the accomplishment of danger. (Art. 1949, par. 1) However, if the
the use which the commodatum has been extraordinary expenses arise on the
constituted. occasion of the actual use by the bailee,
3. If the thing loaned has been delivered with even though he acted without fault, they
the appraisal of its value, unless there is a shall be borne equally by both the bailor
stipulation exempting the bailee from and the bailee, unless there is a stipulation
responsibility in case of a fortuitous event. to the contrary. (Art. 1949, par. 2)
4. If he lends or leases the thing to a third 3. Be liable for damages which the bailee may
person, who is not a member of his suffer for failure of the bailor to advise the
household. former of flaws (hidden defects) of the thing
5. If, being able to save either the thing to a loaned which are known to him. (Art. 1951)
third person or his own thing, he chose to
save the latter. (Art. 1942) Who bears the expenses in a contract of
Commodatum?
Art. 1951 (05, BAR):
GR: Bailee has no right of retention on the ground Bailee. The Bailee is
that the bailor owes him something. obliged to pay for the
XPN: Art. 1951 on hidden defects (Bailor who knows ordinary expenses for
flaws but does not advise bailee is liable to bailee Ordinary Expenses the use and
for damages suffered because of flaws). preservation of the
thing loaned. (Art.
1. Bailor cannot demand return until after (a) 1941)
expiration of period stipulated, or (b) Bailor. The bailor shall
accomplishment of use for which Extraordinary refund the
commodatum was constituted. (Art. 1946) Expenses for extraordinary
a. Exceptions: Preservation expenses during the
contract for the

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preservation of the and quality. In case it is impossible, its

thing loaned, provided value at the time of perfection of the
the bailee brings the loan.
same to the knowledge 2. When?
of the bailor before a. If one is provided, the period agreed
incurring them, except upon.
when they are so b. If none is provided, payable
urgent that the reply to immediately; if the parties intended a
the notification cannot period but the same was not specified,
be awaited without the court may fix the period. (Art. 1197)
danger. (Art. 1949) c. Payable immediately when the debtor
50-50 between the loses the right to make use of the period
Bailor and the Bailee. under Article 1198
Extraordinary i. When after the obligation has been
expenses arise on the contracted, he becomes insolvent,
occasion of the actual unless he gives a guaranty or
use of the thing by the security for the debt;
Extraordinary bailee, even though he ii. When he does not furnish to the
Expenses for use acted without fault, creditor the guaranties or
they shall be borne securities which he has promised;
equally by both the iii. When by his own acts he has
bailor and the bailee, impaired said guaranties or
unless there is a securities after their establishment,
stipulation to the and when through a fortuitous
contrary. (Art. 1949) event they disappear, unless he
Bailee. If, for the immediately gives new ones
purpose of making use equally satisfactory;
of the thing, the bailee iv. When the debtor violates any
Extraordinary undertaking, in consideration of
incurs expenses other
Expenses other than which the creditor agreed to the
than those referred to
for Preservation of for period;
in articles 1941 and
Use v. When the debtor attempts to
1949, he is not entitled
to reimbursement. (Art. abscond.
1950)
Interest
Mutuum
The two types of interest are the following:
Mutuum or Simple Loan - lender delivers to the 1. Monetary or conventional interest –
borrower money or other consumable thing upon the refers to the compensation set by the
condition that the latter will pay the same amount of parties for the use or forbearance of money;
the same kind and quality (Art. 1953) and
Obligations of a borrower in a simple loan or 2. Compensatory interest – interest that
mutuum may be imposed by law or by courts as
4) Pay the creditor an equal amount of the same penalty for damages. (Hun Hyung Park v.
kind and quality. (Art. 1953) Eung Won Choi, G.R. No. 220826, March
5) Pay interest, if stipulated in writing. (Art. 1956) 27, 2019)
Obligation of the Borrower to Pay Note: Compensatory/penalty/indemnity interest

1. What? refers to damages paid arising from delay in paying
a. Money a fixed sum of money or delay in assessing and
i. General Rule: Same amount paying damages. (Sps. Abella v. Sps. Abella, G.R.
ii. Exception: may change under No. 195165, July 08, 2015)
certain circumstances, such as
when there is an extraordinary Q: Company A contracted Company B to apply
inflation or deflation of the a granite wash-out finish on the exterior walls of
currency stipulated. one of its buildings. However, the finish began
b. Fungible thing other than money: peeling off and falling from the walls. Company
another thing of the same kind, quantity A got Company B to do minor repairs. Company

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A also got Company C to redo the entire finish Generally, interest due and unpaid shall not earn
after Company B manifested that it was not in a interest, except:
position to do new finishing work. Although, 1. Interest due shall earn legal interest at the
Company B expressed that it was willing to rate of 6% per annum from the time it is
share part of the cost. judicially demanded until fully paid,
although the obligation may be silent upon
The Construction Industry Arbitration this point. (Art. 2212)
Commission (CIAC) decided that Company B 2. If there is agreement to this effect. (Art.
was entitled to recover from Company A 1959)
representing the cost of repairs done by another
contractor. Company A assailed the portion on Note: Interest on interest refers to interest due on
its liability for construction defects. The SC held conventional interest. (Sps. Abella v. Sps. Abella,
that Company A was not liable for the amount G.R. No. 195165, July 08, 2015)
claimed by Company B.
When will the debtor be liable for interest even
Company B moved for reconsideration arguing
in the absence of stipulation to pay interest?
that its liability for interest should commence on
Generally, no interest shall be due unless it has
the date on which the SC’s decision that granted
been expressly stipulated in writing. (Art. 1956)
Company A’s appeal became final and not on
when the CIAC decision was issued.
In the following instances, interest is due even if not
What interest is involved, monetary or expressly stipulated:
compensatory? 1. If the obligation consists in the payment of
a sum of money, and the debtor incurs in
A: The interest is compensatory. delay, the indemnity for damages, there
being no stipulation to the contrary, shall be
Monetary interest under Article 1956 of the Civil the payment of the interest agreed upon,
Code serves as compensation fixed by the parties and in the absence of stipulation, the legal
for the use or forbearance of money. As can be interest, which is six per cent per annum
gleaned from the foregoing provision, payment of (Art. 2209); or
monetary interest is allowed only if: (i) there was an 2. Interest due shall earn legal interest from
express stipulation for the payment of interest; and the time it is judicially demanded, although
(ii) the agreement for the payment of interest was the obligation may be silent upon this point.
reduced in writing. The concurrence of the two (Art. 2212)
conditions is required for the payment of monetary
interest. What is the legal interest rate?
Compensatory interest (i.e., interest awarded as Beginning July 1, 2013, the rate of interest on the
damages under Articles 2209 to 2213 of the Civil loan or forbearance on money, goods, or credits and
Code) is that which is "allowed in actions for breach the rate allowed in judgments, in the absence of
of contract or tort for the unlawful detention of stipulation, shall be 6% per annum (BSP Circular
money already due." As the governing provisions No. 799).
indicate, compensatory interest may be imposed by However, judgments that became final and
law or by the courts as penalty or indemnity for executory before July 1, 2013 shall continue to apply
damages. the previous legal rate of 12% per annum (NACAR
v. Gallery Frames Inc., G.R. No. 189871, 2013).
In the present case, the principal award represents
the material cost adjustment incurred by Company NOTE: The computation of the amount due must
A which Company B failed to pay. The award take into consideration the legal rate or rates (6%
proceeds from Company B's breach of its and/or 12% per annum) applicable throughout the
construction contract with Company A — a contract duration of the period in which interest runs. (DPWH
which does not constitute a loan or forbearance of Secretary vs. Spouses Tecson, G.R. No. 179334,
money. Accordingly, the interest disputed herein 2015)
constitutes compensatory interest awarded
pursuant to Article 2210 of the Civil Code. What are the rules in the computation of legal
(Philippine Commercial and International Bank v. interest? (Lara’s Gifts & Decors v. Midtown
William Golangco Construction Corp. G.R. No. Industrial Sales, G.R. No. 225433, 2019)
195372, April 10, 2019) 1. When the obligation is breached, and it
consists in the payment of a sum of money,
When will interest due and unpaid earn interest? i.e., a loan or forbearance of money, goods,

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credits or judgments, the interest due shall extrajudicially or judicially (Art. 1169, Civil
be that which is stipulated by the parties in Code) UNTIL FULL PAYMENT, but when
writing, provided it is not excessive and such certainty cannot be so reasonably
unconscionable, which, in the absence of a established at the time the demand is
stipulated reckoning date, shall be made, the interest shall begin to run only
computed from default, i.e., from from the date of the judgment of the trial
extrajudicial or judicial demand in court (at which time the quantification of
accordance with Article 1169 of the Civil damages may be deemed to have been
Code, UNTIL FULL PAYMENT, without reasonably ascertained) UNTIL FULL
compounding any interest unless PAYMENT.
compounded interest is expressly 5. The actual base for the computation of the
stipulated by the parties, by law or interest shall, in any case, be on the
regulation. principal amount finally adjudged, without
a. Interest due on the principal compounding any interest unless
amount accruing as of judicial compounded interest is expressly
demand shall SEPARATELY earn stipulated by law or regulation.
legal interest at the prevailing rate
prescribed by the Bangko Sentral Must the manner of compounding the interest
ng Pilipinas, from the time of also be in writing?
judicial demand UNTIL FULL In a loan agreement, compounding of interest has to
PAYMENT. be in writing to be valid. Payment of monetary
2. In the absence of stipulated interest, in a interest shall be due only if:
loan or forbearance of money, goods, i. There was an express stipulation for the
credits or judgments, the rate of interest on payment of interest; and
the principal amount shall be the prevailing ii. The agreement for such payment was in
legal interest prescribed by the Bangko writing. The first requirement does not only
Sentral ng Pilipinas, which shall be entail reducing in writing the interest rate to
computed from default, i.e., from be earned but also the manner of earning the
extrajudicial or judicial demand in same, if it is to be compounded. (Albos v.
accordance with Article 1169 of the Civil Embisan, G.R. No. 210831, 2014)
Code, UNTIL FULL PAYMENT, without
compounding any interest unless Can the stipulated interest be modified?
compounded interest is expressly Any modification of stipulated interest (e.g., allowing
stipulated by law or regulation. the creditor to unilaterally increase or decrease the
a. Interest due on the principal interest rate at any time) must be mutually agreed
amount accruing as of judicial upon, otherwise, it has no binding effect. Further, a
demand shall SEPARATELY earn borrower may not be required to prepay the loan if
legal interest at the prevailing rate he is not agreeable to the arbitrary interest rates
prescribed by the Bangko Sentral being imposed. (Spouses Silos v. PNB, G.R. No.
ng Pilipinas, from the time of 181045, 2014)
judicial demand UNTIL FULL
PAYMENT. What is usury?
3. When the obligation, not constituting a loan Contracting for or receiving something in excess of
or forbearance of money, goods, credits or the amount allowed by law for the loan or
judgments, is breached, an interest on the forbearance of money, goods or chattels. (De Leon,
amount of damages awarded may be citing Tolentino v. Gonzales, 50 Phil. 558 (1927)).
imposed in the discretion of the court at the
prevailing legal interest prescribed by the When is the Usury Law’s effectivity suspended?
Bangko Sentral ng Pilipinas, pursuant to The Monetary Board of Central Bank issued CB
Articles 2210 and 2011 of the Civil Code. Circular 905, effective January 1, 1983, removed the
No interest, however, shall be adjudged on ceilings on interest rate on loans or forbearance of
unliquidated claims or damages until the money, goods, or credit. The Circular did not repeal
demand can be established with nor in any way amend the Usury Law but simply
reasonable certainty. suspended the latter’s effectivity. Interest can now
4. Accordingly, where the amount of the claim be charged as lender and borrower may agree
or damages is established with reasonable upon. (Medel v. Court of Appeals, G.R. No. 131622,
certainty, the prevailing legal interest shall November 27, 1998)
begin to run from the time the claim is made

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While it is true that the interest ceilings set by the the RTC to seek recovery of the unpaid rentals
Usury Law are no longer in force, it has been held and interest against College A. As of the filing of
that PD 1684 and CB Circular 905 merely allow the case in the RTC, College A has yet to pay the
contracting parties to stipulate freely on any rentals. Should the monthly 3% interest on
adjustment in the interest rate on a loan by unpaid rentals be imposed on College A?
forbearance of money but do not authorize a
unilateral increase of the interest rate by one party A: No. The penalty charge of 3% per month for
without the other's consent (PNB v. CA, G.R. No. L- unpaid rentals is unconscionable, considering that
26001, 1968). To be valid, therefore, any change of College A only failed to pay when it was already
interest must be mutually agreed upon by the parties clearing out of the premises. The imposition of an
(Dizon v. Magsaysay, G.R. No. L-23399, 1974) interest on unpaid rentals contained in the said
provision takes the nature of a penalty clause, in
Q: Is the interest payment of 5% per month case College A breaches any of the stipulations in
excessive? the lease contract. Even if such was specified in the
A: YES. 5% per month or 60% per annum interest contract, public morals and policy dictate that the
rate is void for being unconscionable, the interest interest rate should still be reasonable and
rate prescribed by the Bangko Sentral ng Pilipinas equitable. In accordance with Article 1229 of the
(BSP) for loans or forbearances of money, credits or Civil Code, even if there has been no performance
goods will be the surrogate or substitute rate not by the debtor, the penalty may also be reduced by
only for the one-year interest period agreed upon the courts if it is iniquitous or unconscionable. It is
but for the entire period that the loan of Zenaida equitable to reduce the interest rate from 3% to 1%
remains unpaid. (Bulatao v. Estonactoc, G.R. No. per month or a total of 12% per annum. (J.
235020, 2019) Hernando: PNTC Colleges, Inc. v. Time Realty,
Inc., G.R. No. 219698, September 27, 2021.)
What is the consequence of having usurious
interest? NOTE: Unconscionable interest is determined
In usurious loans, the entire obligation does not by the Supreme Court on a case-to-case basis.
become void because of an agreement for usurious
interest; the unpaid principal debt still stands and Distinguish escalation clauses from floating rate
remains valid but the stipulation as to the usurious of interest clauses. (Security Bank Corp. v.
interest is void. Consequently, the debt is to be Spouses Mercado, 2018)
considered without stipulation as to the
interest. (First Metro Investment Corp. v. Este Del ESCALATION FLOATING RATE
Sol Mountain Reserve, Inc., G.R. No. 141811, 2001) CLAUSES OF INTEREST
These are stipulations It refers to the variable
The principal debt remaining with stipulation for which allow for the interest rate stated on
payment of interest can thus be recovered. In case increase (as well as the a market-based
of judicial or extrajudicial demand, and the debtor mandatory decrease) of reference rate agreed
incurs in delay, the debt earns legal interest from the the original fixed interest upon by the parties.
date of the demand. Such interest is not due to rate.
stipulation, for there was none, the same being void. This pertains to the
Rather, it is due to the general provision of law that It is the method by which interest rate itself that
in obligations to pay money, where the debtor incurs fixed interest rates may is not fixed.
in delay, he has to pay interest by way of damages be increased
Q: Petitioner X was granted a loan by Bank A
Q: College A and Corporation B entered into a secured by a real estate mortgage. The interest
Contract of Lease. Upon termination of the rate agreed upon by the parties was 17% per
Contract of Lease, College A began to remove annum. When X failed to pay some
its properties from the leased portion without amortizations, Bank A unilaterally escalated the
settling its outstanding rentals and other interest rate from 17% to 24% without the
charges. As a result, Corporation B retained knowledge of X or even an explanation as to why
some of the properties of College A as security the interest rates were increased. X filed a
for unpaid rentals and other charges. Under the complaint against Bank A. Bank A defended the
Contract of Lease, College A shall pay to escalation, saying it was based on a stipulation
Corporation B an interest at the rate of three per in the loan agreement that the interest rate
cent (3%) a month on any amount due and not would be subjected to escalations. Was the
paid on time. Corporation B then filed a case in

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escalation of interest rate made by Bank A 1. When there is a contrary Stipulation

valid? 2. Where depositary is Engaged in the business of
storing goods
A: No. Even though there was a stipulation in the 3. Where property is Saved from destruction
loan agreement that the in the loan agreement that without knowledge of the owner
the interest rate would be subjected to escalations, 4. Judicial deposit
Bank A failed to explain how it arrived to such
interest rates. While escalation clauses are not EXTRA-
wrong, they must not be solely potestative and JUDICIAL
JUDICIAL
should be based on reasonable grounds. Further, Will of the
the interest rate imposed upon Petitioner X is Will of the
Creation contracting
violative of the principle of mutuality of contracts. court
parties
Art. 1308 of the Civil Code provides that a contract Security or to
must bind both parties; its validity or compliance ensure the
cannot be left to the will of one of them. (Vasquez v. right of a
PNB, G.R. Nos. 228355 & 228397, August 28, party to the
2019) Custody and
Purpose property or to
safekeeping
recover in
case of
B. DEPOSIT favorable
judgment
Deposit is constituted from the moment a person Movable or
receives a thing belonging to another, with the immovable
Subject
obligation of safely keeping it and of returning the property, but Movables only
Matter
same (Art. 1962). generally
NOTE: Safekeeping must be the principal purpose immovable
of the contract. Otherwise, it is not a deposit. May be
Always compensated
Characteristics Cause
onerous but generally
1. Real - because it is perfected only by the delivery gratuitous
of the subject matter Gratuitous:
a. BUT: An agreement to constitute a deposit demand of
is binding and enforceable, since it is depositor (Art.
merely consensual 1988) or
2. Unilateral - if gratuitous return by
3. Bilateral - if with compensation depositary for
justifiable
Creation of deposit (Art. 1964) reasons (Art.
1. By virtue of a court order; or 1989)
2. By law Upon order of
Compensated:
3. By the will of the parties Return of the court /
The
thing end of
depositary
Kinds of Deposit litigation
may retain the
1. Judicial - when an attachment or seizure of thing in
property in litigation is ordered pledge until
2. Extrajudicial (Art. 1967) full payment of
a. Voluntary - delivery is made by the will of what may be
the depositor or by two or more persons due him by
each of whom believes himself entitled to reason of
the thing deposited deposit (Art.
b. Necessary - made in compliance with a 1994)
legal obligation, or on the occasion of any
Person who Depositor or
calamity, or by travelers in hotels and inns In whose
has a right to 3rd person
or by travelers with common carriers. There behalf it is
the thing designated
is lack of free choice in the depositor. held
deposited
GR: A deposit is generally gratuitous (Art. 1965).
Subject Matter of Deposit (Art. 1966)
XPN: [JESS]

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• As to the thing itself Conversion of Deposit to Mutuum

a. General rule: Only movable or personal If the thing deposited is money or other consumable
property may be the object of deposit thing, the permission to use it will result in its
(whether voluntary or necessary); consumption and converts the contract into a simple
however, deposit does not include loan or mutuum. However, if safekeeping is still the
incorporeal/intangible property, such principal purpose of the contract, it is still a deposit
as rights and actions, for it follows the but an irregular one; hence, an Irregular Deposit.
owner, wherever he goes and not Example: Bank deposit (De Leon)
susceptible of custody
b. Exception: In judicial deposit, it may IRREGULAR
BASIS MUTUUM
cover both movable and immovable DEPOSIT
property Lender is
• As to ownership bound by the
a. General rule: The depositor must be provisions of
the owner of the thing deposited Demandable the contract
b. Exceptions: It may belong to another at will of the and cannot
person than the depositor irregular seek
i. When two or more persons claiming depositor for restitution
Demandability
to be entitled to a thing may deposit whose benefit until the time
the same with a third person. In such the deposit of payment as
case, the third person assumes the has been provided in
obligation to deliver to the one to constituted the contract
whom it belongs. has arisen
ii. Interpleader – the action to compel (except under
the depositors to settle their Art. 1198)
conflicting claims. Here, one of the If with
Benefit
depositors is not the owner. interest,
Benefit accrues to
benefit of
the depositor
Form of Contract of Deposit both parties
GR: A contract of deposit may be entered into (but
not perfected) orally or in writing (Art. 1969) Obligations of the Depositary
XPN: Delivery of the thing deposited is needed for 1. Safekeep the thing deposited
perfection. 2. Return the thing on the date stipulated or
when depositor claims it
DEPOSITARY DEPOSITARY 3. Not to transfer deposit
CAPACITATED, INCAPACITATED, 4. Not to change the way of deposit
DEPOSITOR DEPOSITOR 5. To collect on the choses in action deposited
INCAPACITATED CAPACITATED 6. Not to commingle things if so stipulated
Depositary is subject to Depositary does not 7. Not to make use of the things so deposited
ALL the obligations of a incur the obligations of 8. Liability for loss through fortuitous event in
depositary a depositary certain cases
Depositary must return Depositary, however, 9. Obligation when the thing is closed and
the property either to: is liable to: sealed
a. The legal a. Return the 10. To return products, accessories and
representative of the thing deposited while accessions
incapacitated; OR still in his possession; 11. To pay interest on sums converted to
b. The depositor AND personal use
himself if he should b. Pay the 12. Cannot require that the depositor prove his
acquire capacity depositor the amount ownership over the thing
by which he may 13. Obligation when third person appears to be
have benefited the owner
himself with the thing 14. Obligation when there are two or more
or its price (subject to depositors
the right of any 3rd 15. To return to the person to whom return
person who acquires must be made
the thing in good 16. In case of loss by force majeure or
faith) government order, to deliver to the

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depositor money or another thing he b) If he Uses the thing without the depositor’s
receives in place of the thing permission
17. To pay for damages in case of alienation in c) If he Delays in its return
bad faith by the depositary’s heir of the d) If he Allows others to use it, even though he
thing deposited himself may have been authorized to use
the same
Two primary obligations (Art. 1972)
1. Safekeeping of the object NOTE: Liability for loss without fortuitous event:
a. Degree of Care – same diligence as he Depositary presumed at fault since he is in
would exercise over his property possession (Art. 1265)
(ordinary diligence)
b. NOTE: The depositary cannot excuse Obligation not to change the way of deposit
himself from liability, in the event of loss, a) General rule: Depositary may not change
by claiming that he exercised the same the way of the deposit. (Art. 1974)
amount of care toward the thing b) Exception: If there are circumstances
deposited as he would towards his own indicating that the depositor would consent
if such care is less than that required by to the change. This is a situation wherein
the circumstances. the depositary would reasonably presume
2. Return of the thing that the depositor would agree to the
change if he knows of the facts of the
Obligation not to Transfer deposit (Art. 1973) situation (Art. 1974)
1. GR: The depositary is not allowed to
deposit the thing with a third person. Requisites:
a. Reason: A deposit is founded on trust a) The depositary must notify the depositor of
and confidence and it can be supposed such change; and
that the depositor, in choosing the b) Must wait for the reply of the depositor to
depositary, has taken into consideration such change.
the latter’s qualification
2. XPN: The depositary is authorized by NOTE: These requisites may not be dispensed with
express stipulation unless delay would cause danger.
Liabilities: Depositary is liable for loss of the thing Obligation to Collect Interest on the choses in
deposited when: action deposited (Art. 1975)
a) He transfers the deposit with a third person a) If the thing deposited should earn interest,
without being authorized to do so although the depositary is under the obligation to:
there is no negligence on his part and the i. Collect the interest as it becomes due.
third person; ii. Take such steps as may be necessary
b) He deposits the thing with a third person to preserve its value and the right
who is manifestly careless or unfit although corresponding to it.
authorized, even in the absence of b) The depositary is bound to collect the
negligence; or capital, as well as the interest, when due.
c) The thing is lost through the negligence of NOTE: The obligation to collect in the choses in
his employees whether the latter are action does not apply to contracts for the rent of
manifestly careless or not. safety deposit boxes.
Exemption from liability: The thing is lost without Contract of rent of safety deposit boxes (Art.
the negligence of the third person with whom he was 1975)
allowed to deposit the thing if such third person is • A contract for the rent of safety deposit
not “manifestly careless or unfit” (e.g., minor). boxes is not an ordinary contract of lease of
things, but a special kind of deposit; hence,
Liability for Loss through fortuitous event (Art. it is not to be strictly governed by the
1979) provisions on deposit.
GR: Depositary is not liable for loss of the thing • The prevailing rule in the US is that the
deposited through a fortuitous event without his fault relation between a bank renting out safety
(Art. 1174) deposit boxes and its customer with
XPN: (USDA) respect to the contents of the box is that of
a) If it is so Stipulated bailor and bailee.

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Obligation not to Commingle things if so Fixed, savings, and current deposits of money in
stipulated (Art. 1976) banks and similar institutions shall be governed by
GR: The depositary is permitted to commingle grain the provisions concerning simple loan.
or other articles of the same kind and quality • Contract of loan – deposits in banks are really
Effects: loans because the bank can use the same for
a) The various depositors of the mingled its ordinary transactions
goods shall own the entire mass in • Relation of creditor and debtor – the relation
common between a depositor and a bank is that of a
b) Each depositor shall be entitled to such creditor and a debtor.
portion of the entire mass as the amount
deposited by him bears the whole [A] bank has a right of set off of the deposit in its
XPN: When there is a stipulation to the contrary hands for the payment of any indebtedness to it on
the part of the depositor. (Gullas v. Philippine
Obligation not to make Use of the things National Bank, G.R. No. 43191, [November 13,
deposited (Art. 1977) 1935], 62 PHIL 519-523)
GR: Deposit is for safekeeping of the subject matter
and not for its use Obligation when the thing deposited is Closed
XPN: and Sealed (Art. 1981)
1. Expressly authorized by the depositor The depositary has the obligation to:
2. Such use is necessary for its preservation a) Return the thing deposited when delivered
but limited for the purpose only closed and sealed in the same condition.
A. Effect of unauthorized use: Liability for b) Pay for damages should the seal or lock be
damages broken through his fault, which is presumed
B. Effects of authorized use: (Art. 1978) unless proven otherwise.
I. If the thing deposited is non- c) Keep the secret of the deposit when the
consumable seal or lock is broken, with or without his
1. GR: The contract loses the fault.
character of a deposit and
acquires that of a When depositary justified in opening closed and
commodatum, despite the sealed subject matter (Art. 1982):
fact that the parties may have a) The depositary is presumed authorized to
denominated it as a deposit do so if the key has been delivered to him.
2. XPN: Safekeeping is still the b) When the instructions of the depositor as
principal purpose of the regards the deposit cannot be executed
contract without opening the box or receptacle
II. If the thing deposited is money or (Necessity).
other consumable thing:
1. GR: Converts the contract Where Third person appears to be the owner
into a simple loan or mutuum (Art. 1984)
2. XPN: Safekeeping is still the The depositary may be relieved from liability
principal purpose of the when:
contract, but it becomes an a) He advised the true owner of the thing of
irregular deposit. Bank the deposit
deposits are in the nature of b) If the owner, in spite of such information,
irregular deposits, but they does not claim it within the period of one
are really loans governed by month (30 days), and the depositary
the law on loans. returns the thing deposited to the depositor.
Obligation of the depositary when there are two

An instrument acknowledging receipt of a sum of or more depositors (Art. 1985)
money as a deposit returnable two months after 1. Divisible thing and joint depositors – each
notice with interest is evidence of a contract of loan one of the depositors can demand only his
and not of deposit. (Gavieres v. Pardo de Tavera, share proportionate thereto
G.R. No. 6, [November 14, 1901], 1 PHIL 71-73) a. GR: Each one of the depositors
may do whatever may be useful to
Relation between bank and depositor (Art. 1980) the others (Art. 1212)
b. XPN: Anything which may be
prejudicial to the other depositors

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2. Indivisible thing or solidary depositors – • When notified of the opposition of a third

rules on active solidarity person to the return or the removal of the
a. GR: The depositary may return the thing deposited
thing to any one of the solidary
depositors Right of the depositary to return the Thing
b. XPN: When a demand, judicial or deposited (Art. 1989)
extrajudicial, for its return has
been made by one of them in NOTE: In this case, it is the depositary returning the
which case delivery should be deposit with or without the demand of the
made to him depositor.
3. Return to one of the depositors stipulated
a. If by stipulation, the thing should GR: The depositary may return the thing deposited,
be returned to one of the notwithstanding that a period has been fixed for the
depositors, the depositary is deposit, if:
bound to return it only to the a) The deposit is gratuitous
person designated, although he b) The reason is justifiable
has not made any demand for its • Remedy if depositor refuses to receive the
return thing: The depositary may deposit the thing
at the disposal of the judicial authority.
Obligation to Return to the person to whom
return must be made (Art. 1986) XPN: When the deposit is for a valuable
1. The depositary is obliged to return the thing consideration, the depositary has no right to return
deposited, when required, to: the thing before the expiration of the time
a. The depositor; designated even if he should suffer inconvenience
b. To his heirs or successors; or as a consequence.
c. To the person who may have been
designated in the contract. Depositary’s liability in case of Loss by force
2. If the depositor was incapacitated at the majeure or government order (Art. 1990)
time of making the deposit, the property Depositary is not liable in cases of loss by force
must be returned to: majeure or by government order. However, he has
a. His guardian or administrator the duty to deliver to the depositor money or another
b. To the depositor himself should he thing he receives in place of the thing.
acquire capacity
3. Even if the depositor had capacity at the Liability in case of alienation by the depositary’s
time of making the deposit, but he Heir (Art. 1991)
subsequently loses his capacity during the • When alienation is done in good faith:
deposit, the thing must be returned to his a) Return the value of the thing deposited;
legal representative. or
b) Assign the right to collect from the
Obligation to return at the Place of return buyer
GR: At the place agreed upon by the parties, • The heir does not need to pay the
transportation expenses shall be borne by the actual price of the thing deposited.
depositor (Art. 1987)
XPN: In the absence of stipulation, at the place • When alienation is done in BAD FAITH:
where the thing deposited might be even if it should a) Liable for damages; and
not be the same place where the original deposit b) Pay the actual price of the thing
was made deposited
NOTE: Same as the general rule of law regarding
the place of payment (Art. 1251) Depositary may retain the thing in his
possession until the full payment of what may
Obligation to return upon the Time of return (Art. be due him by reason of the deposit (Art. 1994)
1988) The thing retained serves as security for the
GR: The thing deposited must be returned to the payment of what may be due to the depositary by
depositor upon demand, even though a specified reason of the deposit (see Arts. 1965, 1992 & 1993).
period of time for such return may have been fixed
XPN: Pledges created by operation of law (Art. 2121)
• When the thing is judicially attached while 1. These are governed by the foregoing articles
in the depositary’s possession on the possession, care and sale of the

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thing as well as on the termination of the a. There must be a causal relation

pledge. However, after payment of the debt between the calamity and the
and expenses, the remainder of the price of constitution of the deposit.
the sale shall be delivered to the obligor. 3. Made by Passengers with common carriers
(Art. 2121) a. As to baggage the passengers or
2. These may be sold only after demand of the their agents carry
amount for which the thing is retained. The 4. Made by Travelers in hotels or inns (Art.
public auction shall take place within one 1998)
month after such demand. If, without just a. Before keepers of hotels or inns
grounds, the creditor does not cause the may be held responsible as
public sale to be held within such period, depositaries with regard to the
the debtor may require the return of the effects of their guests, the
thing. (Art. 2122) following must concur:
Obligations of the Depositor (PLD) Elements:

1. Obligation to Pay expenses of preservation (Art. a. They have been previously informed about the
1992) effects brought by the guests; and
Applies only when the deposit is gratuitous • Is notification required before the common
2. Obligation to pay Losses incurred due to carrier becomes liable for lost belongings
character of thing deposited (Art. 1993) that remained in the custody of the
General rule: The depositary must be passenger? NO.
reimbursed for loss suffered by him because of Actual delivery of the goods to the
the character of the thing deposited. innkeepers or their employees is
Exceptions: unnecessary before liability could attach to
a. Depositor was not aware of the danger. the hotelkeepers in the event of loss of
b. Depositor was not expected to know the personal belongings of their guests
dangerous character of the thing. considering that the personal effects were
c. Depositor notified the depositary of such inside the hotel or inn because the
dangerous character. hotelkeeper shall remain accountable.
d. Depositary was aware of the danger Accordingly, actual notification was not
without advice from the depositor. necessary to render the petitioner as the
3. Effect of Death of depositor or depositary(Art. common carrier liable for the lost personal
1995) belongings of Sesante. By allowing him to
a. Deposit gratuitous – death of either of the board the vessel with his belongings
depositor or depositary extinguishes the without any protest, the petitioner became
deposit (personal in nature). By the word sufficiently notified of such belongings. So
“extinguished,” the law really means that long as the belongings were brought inside
the depositary is not obliged to continue the premises of the vessel, the petitioner
with the contract of deposit. was thereby effectively notified and
b. Deposit for compensation – not consequently duty-bound to observe the
extinguished by the death of either party required diligence in ensuring the safety of
the belongings during the voyage. (Sulpicio
Extinguishment of Deposit Lines v. Sesante, 2016)
1. Upon the loss or deterioration of the thing b. The guests have taken the precautions
deposited; prescribed regarding their safekeeping
2. Upon the death of the depositary, only in
gratuitous deposits; Extent of liability:
3. Other provisions in the Civil Code a) Liability in hotel rooms which come
(novation, merger, etc.) under the term “baggage” or articles
such as clothing as are ordinarily used
Extrajudicial Deposit: Necessary Deposit by travelers
When deposit is Necessary: (PLCT) b) Include those lost or damages in hotel
1. It is made in compliance with a Legal annexes such as vehicles in the hotel’s
obligation garage.
2. It takes place on the occasion of any
Calamity, such as fire, storm, flood, pillage, When the traveler avails of the valet service of
shipwreck, or other similar events hotels. The contract of deposit is perfected from the
traveler’s delivery of the keys to the vehicle to the

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hotel, who has the obligation to safely keep and deficiency, the rules on voluntary deposit e.g.
return it to the owner. Loss of the vehicle on the Arts. 538, 586 and 2104).
hotel’s premises or annexes may give rise to a claim • Made on the occasion of any calamity
of damages (Durban Apartments v. Pioneer (governed by the rules on voluntary deposit and
Insurance, G.R. No. 179419, 2011). Art. 2168).
When hotelkeeper liable: (Arts. 2000 – 2002) Hotel-keeper’s right to sell

NOTE: In the following cases, the hotel-keeper is A thing under a pledge by operation of law may be
liable regardless of the amount of care exercised: sold only after demand of the amount for which the
a) The loss or injury to personal property is thing is retained. The public auction shall take place
caused by his servants or employees as within one month after such demand. If, without just
well as by strangers (Art. 2000) grounds, the creditor does not cause the public sale
b) The loss is caused by the act of a thief or to be held within such period, the debtor may require
robber done without the use of arms or the return of the thing. (Art. 2122)
irresistible force (Id., Art. 2001)
Sequestration or judicial deposit
Reason: Hotelkeeper is apparently negligent. When judicial deposit takes place: When an
attachment or seizure of property in litigation is
When hotelkeeper not liable: ordered by a court. (Art. 2005)
a) The loss or injury is caused by force Nature: Auxiliary to a case pending in court.
majeure, like flood, fire, theft or robbery by Purpose: To maintain the status quo during the
a stranger (not the hotel-keeper’s servant pendency of the litigation or to insure the right of the
or employee) with the use of firearms or parties to the property in case of a favorable
irresistible force judgment
a. XPN: Unless the hotel-keeper is
guilty of fault or negligence in Depositary of sequestered property: person
failing to provide against the loss appointed by the court. (Art. 2007)
or injury from his cause Obligations:
b) The loss is due to the acts of the guests, his 1. To take care of the property with the
family, servants, visitors diligence of a good father of the family. (Art.
c) The loss arises from the character of the 2008)
things brought into the hotel 2. He may not be relieved of his responsibility
until the litigation is ended or the court so
Exemption or diminution of liability: orders. (Art. 2007)
The hotelkeeper cannot free himself from
responsibility by posting notices to the effect that he Applicable law: The law on judicial deposit is
is not liable for the articles brought by the guest (Art. remedial or procedural in nature. Hence, the Rules
2003) of Court are applicable. (Art. 2009)
Effect: Any stipulation between the hotel-keeper EXTRA-

and the guest whereby the responsibility of the JUDICIAL
BASIS JUDICIAL
former (as set forth in Arts. 1998-2001) is DEPOSIT
DEPOSIT
suppressed or diminished shall be void. By will of the
Cause or By will of the parties.
Hotel-keeper’s right to retain origin courts Hence, there
The hotel-keeper has a right to retain the things in is a contract
pledge brought into the hotel by the guest, as a Security;
security for credits on account of: Secure the
a) Lodging right of a
b) Supplies usually furnished to hotel guests Custody;
party to
Purpose. Safekeeping
recover in
Reason: It is given to hotel-keepers to compensate of the thing
case of
them for the liabilities imposed upon them by law. favorable
The right of retention recognized in this Article is in judgment.
the nature of a pledge created by operation of law. Either
• In compliance with a legal obligation (governed Subject movable or Only movable
by the law establishing it, and in case of Matter immovable property
property but

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generally,
immovable
Generally
Always
gratuitous,
Remuneration remunerated
but may be
(onerous)
compensated
In behalf of In behalf of
In whose the person the depositor
behalf it is who, by the or third
held judgment, has person
a right designated

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COMMODATUM MUTUUM DEPOSIT BARTER

Non-consumable
(movable or
immovable)
Fungible /
Movable / personal Non-consumable or
Object consumable
Except: property consumable
(e.g., money)
consumable if used
for exhibition
purposes only
Temporary use of
Purpose Consumption Safekeeping Exchange (sale)
the thing
Take care of the

Take care of the
thing
thing with due
diligence Return a thing of the
Do not use the thing Deliver another thing
Obligation same kind and
deposited unless in exchange
Return the thing quality
authorized or is
upon expiration of
required for its
period or purpose
preservation
Passes to the other
Status of Retained by the
Retained by bailor Passes to bailee party (mutual
Ownership depositor
exchange)
Anytime, if no period
or purpose has been
Only after the
agreed upon or if by Cannot demand
expiration of the
mere tolerance only Anytime return because
period
(precarium) Exception: for contract is already
Ability to Exception: when the
compensation extinguished
demand return debtor loses every
If there is an urgent (depositary has right
right to make use of
necessity of retention) Rescission only if
the period (Art.
grounds exist
1198)
Acts of ingratitude
by the bailee
C. GUARANTY AND SURETYSHIP 3. Unilateral –

a. It gives rise only to a duty on the part of the
NATURE AND EXTENT OF GUARANTY guarantor in relation to the creditor and not
vice versa
Guaranty – By guaranty, a person called the b. It may be entered into even without the
guarantor, binds himself to the creditor, to fulfill the intervention of the principal debtor.
obligation of the principal debtor in case the latter 4. Distinct Person – a person cannot be the
should fail to do so. It is a contract between the personal guarantor of himself
guarantor and the creditor. (Art. 2047) • The liability of a guarantor is only subsidiary,
and all the properties of the principal debtor
Characteristics of the contract must first be exhausted before the guarantor
1. Accessory – dependent for its existence upon the may be held answerable for the debt. Thus,
principal obligation guaranteed by it hence if the creditor may hold the guarantor liable only
principal contract is void, then guaranty is also after judgment has been obtained against the
void principal debtor and the latter is unable to pay.
2. Subsidiary and Conditional – takes effect only (Aglibot vs. Santia, G.R. No. 185945, 2012)
when the principal debtor fails in his obligation
subject to limitation Cause of Contract of Guaranty

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1. Presence of cause which supports principal • When the debtor himself offers a guaranty
obligation: Cause of the contract is the same for his natural obligation, he impliedly
cause which supports the obligation as to the recognizes his liability, thereby transforming
principal debtor. The consideration which supports the obligation from a natural into a civil one.
the obligation as to the principal debtor is a
sufficient consideration to support the obligation of Guaranty of Future Debts (Art. 2053)
a guarantor or surety.
2. Absence of direct consideration or benefit to Continuing Guaranty or Suretyship:
guarantor: Guaranty or surety agreement is 1. Not limited to a single transaction but which
regarded valid despite the absence of any direct contemplates a future course of dealings,
consideration received by the guarantor or surety, covering a series of transactions generally for an
such consideration need not pass directly to the indefinite time or until revoked.
guarantor or surety; a consideration moving to the 2. It is prospective in its operation and is generally
principal will suffice. intended to provide security with respect to
future transactions.
EFFECTS OF GUARANTY 3. Future debts, even if the amount is not yet
known, may be guaranteed but there can be no
Married woman as Guarantor (Art. 2049) claim against the guarantor until the amount of
GR: Married woman binds only her separate property the debt is ascertained or fixed and demandable.
XPN:
1. With her husband’s consent, binds the Examples:
community or conjugal partnership property a. To secure the payment of a loan at maturity –
2. Without husband’s consent, in cases provided guarantee of the punctual payment of a loan at
by law, such as when the guaranty has maturity and all other obligations of
redounded to the benefit of the family indebtedness
b. To secure payment of any debt to be
Guaranty Undertaken Without Knowledge of subsequently incurred –construed as
Debtor (Art. 2050) continuing when it is evident from the terms that
the object is to give a standing credit to the
Rights of third persons who pay: principal debtor to be used from time to time
1. Payment without the knowledge or against either indefinitely or until a certain period,
the will of the debtor: especially if the right to recall the guaranty is
a. Guarantor can recover from the debtor only expressly reserved.
insofar as the payment has been beneficial
to the debtor (Art. 1236) Guaranty of Conditional Obligations
b. Guarantor cannot compel the creditor to A guaranty may secure all kinds of obligations, be
subrogate him in his rights (Art. 1237) they pure or subject to a suspensive or resolutory
2. Payment with knowledge or consent of the condition.
debtor: Subrogated to all the rights which the 1. Principal obligation subject to a suspensive
creditor had against the debtor (Art. 2067) condition – the guarantor is liable only after the
fulfillment of the condition.
Double or Sub-Guaranty (Art. 2051(2)) 2. Principal obligation subject to a resolutory
One constituted to guarantee the obligation of a condition – the happening of the condition
guarantor. It should not be confounded with guaranty extinguishes both the principal obligation and the
wherein several guarantors concur. guaranty
Guaranty of Voidable, Unenforceable, And Guarantor’s Liability Cannot Exceed Principal

Natural Obligations (Art. 2052(2)) Obligation (Art. 2054)
A guaranty may secure the performance of: GR: Guaranty is a subsidiary and accessory
1. Voidable contract – such contract is binding, contract – guarantor cannot bind himself for more
unless it is annulled by a proper court action than the principal debtor, both as regards the amount
2. Unenforceable contract – because such and the onerous nature of contract
contract is not void • If he does, his liability shall be reduced to the
3. Natural obligation – the creditor may proceed limits of that of the debtor.
against the guarantor although he has no right of • But the guarantor may bind himself for less
action against the principal debtor for the reason than that of the principal.
that the latter’s obligation is not civilly XPN:
enforceable.

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1. Interest, judicial costs, and attorney’s fees as 2. Liability of surety limited to a fixed period –
part of damages may be recovered – creditors the surety must only be bound in the manner and
may recover from the surety as part of their to the extent, and under the circumstances which
damages the abovementioned fees even without are set forth or which may be inferred from the
stipulation and even if the surety would thereby contract of guaranty or suretyship, and no
become liable to pay more than the total amount further.
stipulated in the bond. 3. Liability of surety to expire on maturity of
Reason: Surety is made to pay, not by reason principal obligation – such stipulation is unfair
of the contract, but by reason of his failure to and unreasonable for it practically nullifies the
pay when demanded and for having nature of the undertaking it had assumed.
compelled the creditor to resort to the courts
to obtain payment. Remedy of surety: Foreclose the counter-bond put
Interest runs from (demand): up by the principal debtor (if there is any)
a. Filing of the complaint (upon judicial
demand); or Guaranty Distinguished from Suretyship
b. The time demand was made upon the GUARANTY SURETYSHIP
surety until the principal obligation is fully Liability depends upon
paid (upon extra-judicial demand) an independent
2. Penalty may be provided – surety may be held Assumes liability as a
agreement to pay the
liable for the penalty provided for in a bond for regular party to the
obligation if the
violation of the condition therein. undertaking
principal debtor fails to
do so
Principal’s Liability May Exceed Guarantor’s Engagement is a Charged as an original
Obligations collateral undertaking promisor
The amount specified in a surety bond as the surety’s Primarily liable –
obligation does not limit the extent of the damages undertakes directly for
that may be recovered from the principal, the latter’s the payment without
liability being governed by the obligations he reference to the
assumed under his contract. Secondarily liable –
solvency of the
he contracts to pay if,
principal, and is so
Guaranty Not Presumed (Art. 2055) by the use of due
responsible at once the
The assumption of guaranty must be expressed. It diligence, the debt
latter makes default,
cannot extend to more than what is stipulated therein. cannot be paid
without any demand by
the creditor upon the
Guaranty Covered by the Statute of Frauds principal whatsoever or
• Guaranty must not only be expressed but must any notice of default
so be reduced into writing. Only binds himself to Undertakes to pay if
• Hence, it shall be unenforceable by action, pay if the principal the principal does not
unless the same or some note or memorandum cannot or is unable to pay, without regard to
thereof be in writing, and subscribed by the party pay his ability to do so
charged, or by his agent; evidence, therefore, of Insurer of the solvency
the agreement cannot be received without the Insurer of the debt
of the debtor
writing, or secondary evidence of its contents. Pay the creditor
(Macondray & Co., Inc. v. Piñon, G.R. No. L- without qualification if
13817, 1961) the principal debtor
• It need not appear in a public document. Does not contract that
does not pay. Hence,
the principal will pay,
the responsibility or
Guaranty Strictly Construed but simply that he is
obligation assumed by
Strictly construed against the creditor in favor of the able to do so
the surety is greater or
guarantor and is not to be extended beyond its terms more onerous than that
or specified limits. Doubt in the terms and conditions of a guarantor
of the guaranty or suretyship agreement should be Guarantor can avail of
resolved in favor of the guarantor or surety. the benefit of Surety cannot avail the
1. Liability for obligation stipulated – guarantor excussion and division benefit of excussion
is not liable for obligations assumed previous to in case the creditor and division.
the execution of the guaranty unless an intent to proceeds against him.
be so liable is clearly indicated. Not bound to take Held to know every
notice of the non- default of the principal.

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performance of the 3. He has Sufficient property to answer for the

principle obligation which he guarantees
Q: Corp A secured a Performance Bond from XPN: When the creditor waives the requirements.
Corp B wherein the latter would become the
surety of the former, guaranteeing the
performance of Corp A’s obligations in favor of a Effect of Subsequent Loss of Required
contract with Corp C. However, Corp A showed Qualifications
poor progress, which led to Corp C demanding The qualifications need only be present at the time
Corp B to liquidate the Performance Bond, of the perfection of the contract. The subsequent
without specifying the exact amount claimed. loss of the qualifications would not extinguish the
Subsequently, Corp C terminated the contract liability of the guarantor, nor will it extinguish the
with Corp A. When negotiations for amicable contract of guaranty.
settlement fell through, Corp B denied Corp C’s
claim. This prompted Corp C to file a complaint Remedy of creditor: Demand another guarantor
with the CIAC to collect a sum of money against with the proper qualifications.
Corp A and Corp B. The CIAC dismissed the
Complaint because it was not within a reasonable XPN: Creditor may waive it if he chooses and hold
period and such delay had released Corp B from the guarantor to his bargain.
its liability as per Article 2080 of the Civil Code.
This was reversed by the CA on the ground that Guarantor Convicted of a Crime Involving
Corp A had long been in default of its obligations Dishonesty or Became Insolvent (Art. 2057):
even before the first demand of Corp C, which 1. Requires conviction in the first instance of a
meant that the liability of Corp B as surety had crime involving dishonesty to have the right to
already arisen. Was the CA correct in saying that demand another.
Corp B was liable? 2. Judicial declaration of insolvency is not
necessary in order for the creditor to have a right
A: Yes. A contract stands as the law between the to demand another guarantor.
parties for as long as it is not contrary to law, morals,
good customs, public order, or public policy. The The supervening incapacity of a guarantor does not
Performance Bond provides that upon Corp C’s first terminate the guaranty for it merely gives the creditor
demand, Corp B as surety shall indemnify the former the option to demand another guarantor. He is not
notwithstanding any dispute with regard to whether bound to substitute the guarantor. (Estate of Hemady
the principal has complied with his obligation. The v. Luzon Surety, G.R. No. L-8437, 1956)
Performance Bond thus stands as a contract of
surety contemplated under Article 2047 of the Civil Selection of Guarantor
Code which defines a surety wherein a person binds 1. Specified person stipulated as guarantor:
himself solidarily with the principal debtor. As a result, Substitution of guarantor may not be demanded
the surety is considered in law as being the same 2. Guarantor selected by the principal debtor:
party as the debtor in relation to whatever is adjudged Debtor answers for the integrity, capacity, and
touching upon the obligation of the latter, and their solvency of the guarantor.
liabilities are interwoven as to be inseparable. While 3. Guarantor personally designated by the
the contract of surety stands secondary to the creditor: Responsibility for the selection should
principal obligation, the surety's liability is direct, fall upon the creditor because he considered the
primary and absolute, albeit limited to the amount for guarantor to have the qualifications for the
which the contract of surety is issued. The surety's purpose.
liability attaches the moment a demand for payment
is made by the creditor. Furthermore, Article 2080 Right of Guarantor to Benefit Of Excussion Or
does not apply in this case because it is only Exhaustion (Art. 2058)
applicable to the liability of a guarantor. (The 1. Guarantor only secondarily liable – guarantor
Mercantile Insurance Co., Inc., v. DMCI-Laing binds himself to pay only in case the principal
Construction, Inc., G.R. No. 205007, September 16, debtor should fail to do so. If the principal debtor
2019.) fulfills the obligation guaranteed, the guarantor is
discharged from any responsibility.
Qualifications of an Individual Guarantor 2. All legal remedies against the debtor to be
(Arts.2056-2057) (CSI) first exhausted – to warrant recourse against
1. He possesses Integrity the guarantor for payment, it may not be
2. He has the Capacity to bind himself

ATENEO CENTRAL
sufficient that the debtor appears insolvent. Such realization of the excussion since he is
insolvency may be simulated. the most interested in its benefit.
NOTE: Art. 2058 is not applicable to a contract of ii. Within the Philippine territory –
suretyship. excussion of property located abroad
would be a lengthy and extremely
Right of Creditor to secure Judgment against difficult proceeding and would not
Guarantor prior to exhaustion conform with the purpose of the
GR: An ordinary personal guarantor (NOT a pledgor, guaranty to provide the creditor with the
security grantor or mortgagor who is at the same time means of obtaining the fulfillment of the
a guarantor), may demand exhaustion of all the obligation.
property of the debtor before he can be compelled to Sufficient to cover the amount of the
pay. debt.
7. If he is a Judicial bondsman and sub-surety (Art.
XPN: The creditor may secure a judgment against 2084) – because he is solidarily liable.
the guarantor, who shall be entitled to a deferment of 8. Where he has given a pledge, security interest or
the execution of said judgment against him, until after mortgage as a Special security.
the properties of the principal debtor shall have been
exhausted, to satisfy the latter’s obligation. NOTE: Article 2062 of the Civil Code provides that in
every action by the creditor, which must be against
Exceptions to the Benefit of Excussion (Art. 2059) the principal debtor alone, except in the cases
(JAWS-IS-FUN) mentioned in Article 2059, the former shall ask the
1. If the guarantor has expressly Waived it. court to notify the guarantor of the action. The
a. Waiver is valid but it must be made in guarantor may appear so that he may, if he so desire,
express terms. set up such defenses as are granted him by law. The
2. If he has bound himself Solidarily with the debtor benefit of excussion mentioned in article 2058 shall
– liability assumed that of a surety always be unimpaired, even if judgment should be
Guarantor becomes primarily liable as a rendered against the principal debtor and the
solidary co-debtor. In effect, he renounces in guarantor in case of appearance by the latter.
the contract itself the benefit of exhaustion.
3. In case of Insolvency of the debtor – guarantor Joinder of Guarantor and Principal As Parties
guarantees the solvency of the debtor Defendant
If the debtor becomes insolvent, the liability GR: The guarantor, not being a joint contractor with
of the guarantor arises as the debtor cannot his principal, cannot be sued with his principal.
fulfill his obligation XPN: Where it would serve merely to delay the
4. When he (debtor) has Absconded, or cannot be ultimate accounting of the guarantor or if no different
sued within the Philippines – the creditor is not result would be attained if the plaintiff were forced to
required to go after a debtor who is hiding or institute separate actions against the principal and
cannot be sued in our courts the guarantors.
a. Exception: Debtor has left a manager
or representative Duty of Creditor to Make Prior Demand for
5. If it may be presumed that a judicial action Payment From Guarantor (Art. 2060)
including execution on the property of the 1. When demand to be made – only after
principal debtor would not result in the judgment on the debt for obviously the
satisfaction of the obligation – if such is the case, exhaustion of the principal’s property cannot
the guarantor can no longer require the creditor even begin to take place before judgment has
to resort to all such remedies against the debtor been obtained.
as the same would be but a Useless formality. It
is not necessary that the debtor be judicially 2. Actual demand to be made – joining the
declared insolvent. guarantor in the suit against the principal debtor
6. If he does Not comply with Art. 2060: In order is not the demand intended by law. There must
that the guarantor may make use of the benefit be an actual demand and not judicial demand.
of excussion, he must: (Vda. De Syquia v. Jacinto, G.R. No. 41320
a. Set it up against the creditor upon the latter’s (1934).
demand for payment from him;
b. Point out to the creditor: Duty of The Guarantor To Set Up Benefit Of
i. Available property of the debtor– the Excussion (Art. 2060)
guarantor should facilitate the As soon as he is required to pay, guarantor must also
point out to the creditor available property (not in

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litigation or encumbered) of the debtor within the 2. Compromise between guarantor and the creditor
Philippines. benefits but does not prejudice the principal
If a party in a contract waives his right to excussion, debtor.
the contract ceases to be a guaranty and is now a Reason: A compromise binds only the parties
suretyship under Article 2047 of the Civil Code. thereto and not third persons. Thus, it cannot
(Trade and Investment Development Corporation of prejudice the guarantor or debtor who was not party
the Philippines v. Philippine Veterans Bank, G.R. No. to the compromise. But if it benefits a third person,
233850, 2019) then the compromise may bind that third person.
Duty of The Creditor To Resort To All Legal Sub-Guarantor’s Right To Excussion (Art. 2064)
Remedies (Art. 2061) Sub-guarantor enjoys the benefit of excussion with
• After the guarantor has fulfilled the conditions respect to:
required for making use of the benefit of 1. Principal debtor; and
exhaustion, it becomes the duty of the creditor to 2. Guarantor
exhaust all the property of the debtor pointed out
by the guarantor Reason: He stands with respect to the guarantor on
• If he fails to do so, he shall suffer the loss but the same footing as the latter does with respect to the
only to the extent of the value of the said principal debtor.
property, for the insolvency of the debtor.
• Resort to all legal remedies includes accion Benefit of Division Among Several Guarantors
pauliana and accion subrogatoria, among (Art. 2065)
others. 1. In whose favor applicable - should there
be several guarantors of only one debtor and
Procedure When Creditor Sues (Art. 2062) for the same debt, the obligation to answer
1. Sent against the principal – The guarantor for the same is divided among all.
cannot be sued with his principal, much less 2. Cannot be availed of if there are:
alone, except in the cases mentioned in Art. a. Two or more debtors of one debt,
2059 where the guarantor is not entitled to the even if they be bound solidarily,
benefit of excussion. each with different guarantors; or
2. Notice to guarantor of the action – guarantor b. Two or more guarantors of the
must be notified so that he may appear, if he so same debtor but for different debts
desires, and set up defenses he may want to c. If any of the circumstances
offer enumerated in Art. 2059 should
a. Guarantor appears – voluntary take place, as would the benefit
appearance does not constitute a of exhaustion of the debtor’s
renunciation of his right to excussion. property.
b. Guarantor does not appear – 3. Extent of liability of several guarantors –
i. He cannot set up the defenses which, by joint obligation
appearing are allowed to him by law; a. GR: The obligation to answer for
and the debt is divided among all of
ii. It may no longer be possible for him to them. The guarantors are not liable
question the validity of the judgment to the creditor beyond the shares
rendered against the debtor which they are respectively bound
iii. But he may still invoke the benefit of to pay.
excussion b. XPN: Solidarity has been expressly
3. Hearing before execution can be issued stipulated.
against the guarantor – a guarantor is entitled
to be heard before an execution can be issued Benefit of Division among Several Guarantors:
against him where he is not a party in the case When there are two (2) or more guarantors of the
involving his principal. same debtor and for the same debt, the one among
them who has paid may demand of each of the others
Effects of Compromise (Art. 2063) the share which is proportionally owing from him.
Compromise – a contract whereby the parties, by
making reciprocal concessions, avoid a litigation or If any of the guarantors is insolvent, the share of the
put an end to one already commenced. insolvent guarantor will be borne in the same
1. Compromise between creditor and principal proportion by the
debtor benefits the guarantor but does not 1. Payer guarantor; and
prejudice him. 2. Other guarantor

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No benefit of division when payment is made: (Art. 2. Payment by a third person who does not
2073) intend to be reimbursed by the debtor is
1. In virtue of a judicial demand by the creditor deemed to be a donation, which, however,
2. Principal debtor is insolvent requires the debtor’s consent. But the
payment is in any case valid as to the
In order that the guarantor may be entitled to the creditor who has accepted it (Art. 1238)
benefit of division, it is not required that he point out 3. Waiver
the property of his co-guarantors.
Guarantor’s Right to Subrogation (Art. 2067)
Reason: Obligation of the guarantor with respect to Subrogation transfers to the person subrogated, the
his co-guarantors is not subsidiary, but direct and credit with all the rights thereto appertaining either
does not depend as to its origin on the solvency or against the debtor or against third persons, be they
insolvency of the latter. guarantors or possessors of mortgages, subject to
stipulation in conventional subrogation.
Right to Reimbursement: The guarantor who pays 1. Accrual, basis, and nature of right – right of
for a debtor must be indemnified by the latter. subrogation is necessary to enable the guarantor
to enforce the indemnity given in Art. 2066
a. Arises by operation of law upon payment by
What Comprises the Right of the Guarantor to
the guarantor
Demand Indemnity or Reimbursement from the
b. It is not a contractual right
Principal Debtor (Art. 2066) (DELT)
c. The guarantor is subrogated, by virtue of the
1. Total amount of the debt - The guarantor has
payment, to the right of the creditor, not
no right to demand reimbursement until he those of the debtor.
has actually paid the debt, unless by the 2. When right not available – since subrogation is
terms of the contract, he is given the right the means of effectuating the right of the
before making payment. guarantor to be reimbursed, it cannot therefore
2. Legal interest - It is immaterial that the debt be invoked in those cases where the guarantor
did not earn interest for the creditor, because has no right to be reimbursed.
the guarantor’s right to legal interest is
granted by law by virtue of the payment he
Effect of Payment by Guarantor Without Notice to
has made, and is independent of the
Debtor (Art. 2068)
creditor’s right to claim interest which was
• When the guarantor pays the creditor, but the
necessarily regulated by the stipulations
debtor has already paid the latter, then the
between him and the debtor.
debtor can set up against the guarantor the
3. Expenses incurred by the guarantor - The
defense of previous extinguishments of the
expenses referred to are only those that the
obligation by payment.
guarantor has to satisfy in accordance with
• Hence, guarantor must notify the debtor before
law as a consequence of the guaranty.
making payment.
These expenses are limited to those
incurred by the guarantor after having
Reason: The guarantor cannot be allowed, through
notified the debtor that payment has been
his own fault or negligence to prejudice or impair the
demanded of him by the creditor.
rights or interests of the debtor.
a. XPN: The guarantor cannot
demand for reimbursement for
NOTE: In case of an unenforceable contract, if the
litigation expenses, when such
debtor consents to the guarantor paying, the
expenses are due to its failure to
guarantor can seek reimbursement from the debtor.
fulfill its obligation to pay upon
If the debtor did not consent to the guarantor paying,
demand. (Tuason v. Machuca, G.R.
the guarantor cannot seek reimbursement from the
No. L-22177, 1924)
guarantor.
4. Damages, if they are due.
Effect of Payment by Guarantor before maturity
Exceptions to Right to Indemnity or
(Art. 2069)
Reimbursement
Debtor’s obligation with a period – demandable
1. Where the guaranty is constituted without
only when the day fixed comes.
the knowledge or against the will of the
1. The guarantor who pays before maturity is not
principal debtor, the guarantor can recover
entitled to reimbursement since there is no
only insofar as the payment had been
necessity for accelerating payment.
beneficial to the debtor

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2. A contract of guaranty being subsidiary in probability that he would be called upon to pay the
character, the guarantor is not liable for the debt debt.
before it becomes due.
XPN: The debtor will be liable if the payment was Remedy to which the Guarantor is Entitled
made: The guarantor cannot demand reimbursement for
a. With his consent; or indemnity when he has not paid the obligation.
b. Subsequently ratified (express or implied) by
him Remedies Available:
1. To obtain release from the guaranty; or
Effect of Repeat Payment by the Debtor (Art. 2. To demand security that shall protect him from:
2070) a. Any proceedings by the creditor; and
a) GR: Before the guarantor pays the creditor, b. Against the insolvency of the debtor.
he must first notify the debtor.
a. If he fails to give notice and the NOTE: Guarantor’s remedies are alternative. He has
debtor repeats payment, the the right to choose the action to bring.
guarantor’s remedy is to collect
from the creditor Suit by Guarantor against Creditor Before
b. No cause of action against the Payment
debtor for the return of the amount The guarantor’s or surety’s action for release can
paid by him. only be exercised against the principal debtor and not
b) XPN: The guarantor may still claim against the creditor.
reimbursement from the debtor in spite of
lack of notice if the following conditions are Reason: The creditor cannot be compelled to
present: release the guarantor before payment of his credit.
a. The creditor becomes insolvent Release of the guarantor imports an extinction of his
b. That guarantor was prevented by a obligation to the creditor, connoting remission or a
fortuitous event to advise the debtor novation by subrogation which requires the creditor’s
of the payment assent.
c. The guaranty is gratuitous
Recovery of Surety against Indemnitor (i.e.,
Right of Guarantor to Proceed Against Debtor principal debtor) Even Before Payment
Before Payment (Art. 2071) 1. Indemnity agreement is for the benefit of
GR: Guarantor has no cause of action against the surety – not for the benefit of the creditor
debtor until after the former has paid the obligation. 2. Indemnity agreement may be against actual
XPN: Art. 2071 enumerates instances when the loss as well as potential liability – such
guarantor may proceed against the debtor even agreement is enforceable and not violative of any
before the payment (ITS-PAID): public policy
1. When he is Sued for the payment; a. Indemnity against loss – indemnitor will
2. In case of Insolvency of the principal debtor; not be liable until the person to be
3. When the debtor has bound himself to indemnified makes payment or sustains loss
relieve him from the guaranty within a b. Indemnity against liability – indemnitor’s
specified period, and this Period has liability arises as soon as the liability of the
expired; person to be indemnified has arisen without
4. When the debt has become Demandable, by regard to whether or not he has suffered
reason of the expiration of the period for actual loss
payment; c. Such agreement valid - A stipulation in an
5. After the lapse of Ten (10) years, when the indemnity agreement providing that the
principal obligation has no fixed period for its indemnitor shall pay the surety as soon as
maturity, unless it be of such nature that it the latter becomes liable to make payment
cannot be extinguished except within a to the creditor under the terms of the bond,
period longer than ten years; regardless of whether the surety has made
6. If there are reasonable grounds to fear that payment actually or not, is valid and
the principal debtor intends to Abscond; enforceable, and in accordance therewith,
7. If the principal debtor is in imminent danger the surety may demand from the indemnitor
of becoming Insolvent. even before the creditor has paid.
Purpose: To enable the guarantor to take measures
for the protection of his interest in view of the Where the principal debtors are
simultaneously the same persons who

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executed the indemnity agreement, the

position occupied by them is that of a Effect of Insolvency of any Guarantor
principal debtor and indemnitor at the same, Follow the rule on solidary obligations: The share
and their liability being joint and several. of the insolvent guarantor shall be borne by the
others including the paying guarantor in the same
The liabilities of an insurer under the surety bond are joint proportion.
not extinguished when the modifications in the
principal contract do not substantially or materially Accrual and Basis of Right:
alter the principal's obligations. The surety is jointly The right of reimbursement is acquired ipso jure
and severally liable with its principal when the latter without need of any prior cession from the creditor by
defaults from its obligations under the principal the guarantor.
contract. (People's Trans-East Asia Insurance
Corporation v. Doctors of New Millennium Holdings, Defenses Available to Co-Guarantors (Art. 2074)
Inc., G.R. No. 172404, 2014) a) GR: All defenses which the debtor would
Guarantor of a Third Person at Request of have interposed against the creditor (i.e.
Another (Art. 2072) fraud, prescription, remission, illegality,
The guarantor who guarantees the debt of an etc.).
absentee at the request of another has a right to b) XPN: Those which cannot be transmitted for
claim reimbursement, after satisfying the debt from: being purely personal to the debtor.
1. The person who requested him to be a
guarantor; Liability of Sub-Guarantor in case of Insolvency
2. The debtor of Guarantor (Art. 2075)
Sub-guarantor is liable to the co-guarantors in the
Rights of the Guarantor against The Debtor same manner as the guarantor whom he guaranteed
(SICS) in case of the insolvency of the guarantor for whom
1. Indemnification he bound himself as sub-guarantor.
2. Benefit of Subrogation
3. Benefit of Compromise EXTINGUISHMENT OF GUARANTY
4. Right to obtain or demand a Security under
(Art. 2071) Causes of Extinguishment of Guaranty (PaNo-
CoCo-LoCo-FRAP) (Art. 2076)
Between Co-Guarantors Right to Contribution of GR: Guaranty being accessory, it is extinguished
Guarantor Who Pays (Art. 2073) when principal obligation is extinguished, the causes
Presumption of joint liability of several of which are:
guarantors when there are: 1. Payment or performance;
1. Two or more guarantors 2. Loss of the thing due;
2. Same debtor 3. Condonation or remission of the debt;
3. Same debt 4. Confusion or merger of the rights of the
creditor and debtor;
Effect: Each is bound to pay only his proportionate 5. Compensation; and
share. 6. Novation
7. Other causes:
Co-Guarantor has Right to Contribution When: a. Annulment;
1. One guarantor has paid the debt to the b. Rescission;
creditor c. Fulfillment of a resolutory condition;
2. Payment was made d. Prescription
a. In virtue of judicial demand (benefit XPN: The guaranty itself may be directly
of division has ceased); or extinguished although the principal obligation still
b. Because principal debtor is remains such as in the case of the release of the
insolvent guarantor made by the creditor.
3. Guarantor who paid is seeking
reimbursement from each of his co- Material Alteration of Principal Contract
guarantors the share which is Any agreement between the creditor and the
proportionately owing him. principal debtor which essentially varies the terms of
the principal contract without the consent of the
Effect: The co-guarantor who has paid may demand surety, will release the surety from liability.
of each of the others the share which is proportionally
owing from him.

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Such material alteration would constitute a novation B) FOR A LONG OR SHORT PERIOD OF
or change of the principal contract, which is TIME.
consequently extinguished. Upon such
extinguishments, the accessory contract to guaranty NOTE: Consent of the Guarantor is a must.
is also terminated and the guarantor cannot be held
liable on the new contract to which he has not given Extension must be based on some new agreement
his consent. between the creditor and the principal debtor by
virtue of which the creditor deprives him of his claim.
When Alteration Material 1. Where obligation payable in
Where such change will have the effect of making the installments: Where a guarantor is liable
obligation more onerous. for different payments.
1. Imposes a new obligation or added burden a. GR: An extension of time to one or
on the party promising; or more will not affect the liability of the
2. Takes away some obligation already surety for the others.
imposed, changing the legal effect of the b. XPN: When the unpaid balance has
original contract and not merely the form become automatically due by virtue
thereof. of an acceleration clause for
failure to pay an installment.
Release by Conveyance of Property (Art. 2077) i. Effect of exception: The act
GR: Payment is made in money. of the creditor extending the
XPN: Any substitute paid in lieu of money which is payment of said installment,
accepted by the creditor extinguishes the obligation without the guarantor’s
and in consequence, the guaranty. consent, discharges the
• If the creditor accepts property in payment of a guarantor.
debt from the debtor, the guarantor is relieved c. Reason: The extension constitutes
from responsibility. This is also true even in an extension of the payment of the
case the creditor is subsequently evicted from whole amount of the indebtedness
the property. 2. Where consent to an extension is waived
in advance by the guarantor or surety:
In case of eviction: Eviction revives the principal Such waiver is not contrary to law, nor to
obligation but not the guaranty. public policy
Reason: The creditor’s action against the debtor is a. Effect: Amounts to the guarantor’s
for eviction and this is different from what the or surety’s consent to all the
guarantor guaranteed. extensions granted.
Release of Guarantor without Consent of Others NOTE: The mere failure or neglect on the part of the
(Art. 2078) creditor to enforce payment or to bring an action upon
Effect: The release benefits all to the extent of the a credit, as soon as the same or any part of it
share of the guarantor released. matures, does not constitute an extension of the term
Reason: A release made by the creditor in favor of of the obligation, and therefore, the liability of the
one of the guarantors without the consent of the guarantor is not extinguished
others may prejudice the others should a guarantor In order to constitute an extension discharging a
become insolvent. surety, it should appear that the extension was:
(DEW)
Release by Extension of Term Granted by 1. For a Definite period
Creditor to Debtor (Art. 2079) 2. Pursuant to an Enforceable agreement
Release Without Consent of Guarantor: Creditor between the principal and the creditor
grants an extension of time to the debtor without the 3. Made Without the consent of the surety or
consent of the guarantor. with a reservation of rights with respect to
Effect: Guarantor is discharged from his him.
undertaking.
That an extension granted to the debtor by the
Reason: To avoid prejudice to the guarantor. The creditor without the consent of the guarantor
debtor may become insolvent during the extension, extinguishes the guaranty, also applies to suretyship.
thus depriving the guarantor of his right to The theory behind Art. 2079 is that an extension of
reimbursement. time given to the debtor by the creditor without the
It doesn’t matter if the extension is: surety’s consent would deprive the surety of his right
A) PREJUDICIAL OR NOT; OR to pay the creditor and to be immediately subrogated

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to the creditor’s remedies against the debtor upon the 5. Debtor Retains the ownership of the thing
maturity date. The surety is entitled to protect himself given as a security; and
against the debtor’s insolvency during the extension. 6. When the principal obligation becomes due,
However, it must be stressed that Art. 2079 will apply the thing in which the mortgage consists
only if the extension is granted by the creditor in favor may be Alienated for the payment to the
of the debtor without the guarantor’s/surety’s creditor.
consent. (TIDC v. APC, 2014)
NOTE: Appears in a Public document duly
Release when Guarantor cannot be Subrogated recorded in the Registry of Property in order to
(Art. 2080) bind third parties.
• If there can be no subrogation because of the
fault of the creditor, the guarantors are thereby If the instrument is not recorded, the mortgage is
released, even if the guarantors are solidary. nevertheless binding between the parties.
• If the creditor has acquired a lien upon the
property of a principal debtor, the creditor at once NOTE: Third persons who are not parties to the
becomes charged with the duty of retaining such principal obligation may secure the latter by
security, or maintaining such lien in the interest mortgaging their own property (Art. 2085; Chinabank
of the surety, and any release or impairment of vs. QBRO Fishing Enterprises, G.R. No. 184556,
this security as a primary resource of payment of 2012)
a debt, will discharge the surety to the extent of
the value of the property or lien released for there Can a trustee mortgage property held in trust?
immediately arises a trust relation between the A trustee under a trust receipt does not have a right
parties, and the creditor as trustee is bound to to mortgage the property held in trust. This is
account to the surety for the value of the security because the trustor, not the trustee, is the owner of
in his hands. the property in trust. A mortgage must be executed
by the absolute owner of the chattels to be valid (DBP
vs. Prudential Bank, 2005;Art. 2085 (2)).
Reason: The act of one cannot prejudice another. It
also avoids collusion between the creditor and the Can a person mortgage conjugal property
debtor or a third person. without the consent of his or her spouse?
Real estate mortgage over a conjugal property is void
Defenses Available to Guarantor against Creditor if the non-contracting spouse did not give consent
(Art. 2081) (PNB v. Venancio Reyes, Jr., G.R. No. 212483,
General rule: All defenses, which pertain to the 2016)
principal debtor and are inherent in the debt.
Exception: Those which are purely personal to the Generally, mortgage of a conjugal property by one of
debtor. the spouses without the consent of the other spouse
is valid only as to ½ of the entire property.
D. REAL ESTATE MORTGAGE
What are the incidents of Registration of
What is a Real Estate Mortgage? Mortgage?
Real [Estate] Mortgage is a contract whereby the 1. Mortgagee entitled to registration of
debtor secures to the creditor the fulfillment of a mortgage as a matter of right.
principal obligation, specially subjecting to such 2. Proceedings for registration do not
security immovable property or real rights over determine validity of mortgage or its effect.
immovable property in case the principal obligation is 3. Registration is without prejudice to better
not complied with at the time stipulated. (Arts. 2124- right of third parties.
2131) 4. Mortgage deed once duly registered forms
part of the records for the registration of the
Elements of a Valid Mortgage (FAVFAR) property mortgaged.
1. Valid obligation exists; 5. Mortgage by surviving spouse of his/her
2. Constituted to secure the Fulfillment of a undivided share of conjugal property can be
principal obligation; registered.
3. Mortgagor be the Absolute owner of the
thing mortgaged; What are the rights of the Creditor where the
4. Mortgagor has Free disposal of the property, Debtor fails to comply with his obligation?
and in the absence thereof, that he be legally
authorized for the purpose;

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1. Creditor is merely entitled to move for the transaction was an equitable mortgage but that
sale of the thing mortgaged with the the period for redemption had lapsed. Was the
formalities required by law in order to collect. contract an equitable mortgage? Can X and Y still
2. Creditor cannot appropriate to himself the redeem the property?
thing nor can he dispose of the same as
owner. A: The contract was an equitable mortgage. There is
no conclusive test to determine whether a deed
Can a mortgage be constituted without any prior absolute on its face is really a simple loan
principal obligation? accommodation secured by a mortgage. The
No. A contract of mortgage, being a purely accessory decisive factor in evaluating such deed is the
contract, cannot exist without a valid obligation. (Art. intention of the parties as shown by all the
2052 & 2086; Manila Surety & Fidelity Co. v. Velayo, surrounding circumstances. When in doubt, courts
G.R. No. L-21069) are generally inclined to construe a transaction
purporting to be a sale as an equitable mortgage,
What kinds of obligations do mortgages secure? which involves a lesser transmission of rights and
A contract of mortgage may secure all kinds of interests over the property in controversy. The
obligation, be they pure or subject to a suspensive or nomenclature given by the parties to the contract is
resolutory condition. not conclusive of its nature. In this case, the factual
findings of the RTC and CA regarding the equitable
What is the effect of a promise to constitute a mortgage attained finality as Z never challenged the
mortgage? same.
A promise to constitute a mortgage gives rise only to
a personal right binding upon the parties and creates Yes. An equitable mortgage was a mere accessory
no real right in the property. What exists is only a contract to secure the fulfilment of the payment of the
right of action to compel the fulfillment of the loan. Because the transaction was not a sale with
promise, but there is no mortgage yet. right of repurchase, there is no redemption period to
speak of, merely the prescriptive period under Article
Q: Can X, as a co-owner, mortgage such real 1144 of the Civil Code. Parties would have 10 years
property? from the time the cause of action accrued to file the
A: X as a co-owner of the mortgaged property could appropriate action. X and Y’s cause of action to
validly convey through sale or mortgage the portion recover the subject property can only have accrued
belonging to him/her. Under Art. 493 of the Civil in 2004, when Z rejected X and Y’s attempt to recover
Code, the effect of the alienation or mortgage, with the mortgaged property, and not in 1987, when the
respect to the co-owners, shall be limited to the contract was executed. Therefore, the filing of the
portion which may be allotted to him in the division complaint in 2005 was made well within the 10-year
upon the termination of the co-ownership. (Bulatao v. prescriptive period. (Saclolo v. Marquito, G.R. No.
Estonactoc, G.R. No. 235020, 2019) 229243, June 26. 2019)
What is the effect of the invalidity of the mortgage What are the requisites of Pactum
on the principal obligation? Commissorium?
The principal obligation remains valid and the deed 1. There should be a mortgage; and
of mortgage remains as the evidence of the personal 2. There should be a stipulation for an
obligation. (Rural Bank of Cabadbaran, Inc. v. automatic appropriation by the creditor of
Melecio-Yap, G.R. No. 178451, 2014) the property in the event of
nonpayment.(Pen v. Julian, G.R. No.
Q: Petitioners X and Y owned a parcel of land. In 160208, January 11, 2016)
1987, they each obtained a loan from
respondents Z and used their land as collateral What is the effect of Pactum Commissorium?
for the loan obligation. Z immediately began Stipulation is null and void - stipulation where thing
occupying the land. In 2003, X obtained an mortgaged shall automatically become the property
additional loan and in 2004, Y did the same. Later of the creditor in the event of nonpayment of the debt
in 2004, X and Y informed Z of their intent to within the term fixed.
redeem their property. Z, however, refused,
forcing X and Y to file a Complaint for redemption The essence of pactum commissorium is that
of mortgaged properties in 2005. Z claims that X ownership of the security will pass to the creditor by
and Y sold the property to them under a the mere default of the debtor. (Spouses Solitarios v.
Memorandum of Deed of Sale with Right of Spouses Jaque, G.R. No. 199852, November 12,
Repurchase. Both the RTC and CA found that the 2014)

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Nullity of the stipulation does not affect validity and What is a dragnet clause (blanket mortgage
efficacy of the principal contract. clause)?
It is one which is specifically phrased to subsume all
Can future property be the object of a mortgage? debts of past or future origins. A mortgage which
a) GR: it cannot. (Dilag v. Heirs of provides a dragnet clause is in the nature of a
Resurreccion, G.R. No. 48941) continuing guaranty and constitutes an exception to
i. In order to bring future property the rule that an action to foreclose a mortgage must
within the coverage of the be limited to the amount mentioned in the mortgage
mortgage, the mortgagor must contract. (PCSO vs. New Dagupan Metro Gas Corp.,
execute a mortgage supplement G.R. No. 173171, 2012)
after the mortgagor acquires
ownership of the properties or after In the absence of clear and supportive evidence of a
those properties come into contrary intention, a mortgage containing a dragnet
existence. They must be registered clause will not be extended to cover past advances,
with the relevant Register of Deeds. unless the document evidencing the subsequent
b) XPN: a stipulation subjecting to the advance refers to the mortgage as providing security
mortgage lien, improvements which the therefor.
mortgagor may subsequently acquire,
install, or use in connection with the real Distinguish a dragnet clause from an
property already mortgaged belonging to the acceleration clause.
mortgagor is valid. (People’s Bank and Trust ACCELERATION
DRAGNET CLAUSE
Co. v. Dahican Lumber Co., G.R. No. L- CLAUSE
17500, 1967) It is a stipulation in a It is a stipulation stating
REM contract that that, on the occasion of
What is the extent of a mortgage over an extends the coverage the mortgagor’s default in
immovable property? of a mortgage to paying an installment of a
A real estate mortgage constituted on immovable advances or loans debt, the whole sum that
property is not limited to the property itself but also other than those remains unpaid
extends to its: already obtained or automatically becomes
1. Accessions specified in the due and payable. (Luzon
2. Improvements contract. A dragnet Development Bank v.
3. Growing fruits clause may refer to Conquilla, 2005)
4. Rents or income not yet received past or future debts.
5. Proceeds of insurance should the property (Paradigm
be destroyed. Development Corp. of
6. Expropriation value of the property should it the Philippines v.
be expropriated. (Art. 2127 of the Civil Code) Bank of the Philippine
Islands, 2017)
To exclude them, it is necessary that there be an
express stipulation. But if the mortgaged estate What is the reliance on the security test?
passes into the hands of a third person, the mortgage This test applies when there is a dragnet clause in a
does not extend to any machinery, object, chattel or mortgage contract but there is a mortgage
construction which he may have brought or placed constituted on another property to secure a
there and which such third person may remove subsequent loan.
whenever it is convenient for him to do so.
It applies in a situation where there are several
Mortgage Liability obligations and several collaterals. When the
4. General rule: a mortgage liability is usually mortgagor takes another loan for which another
limited to the amount mentioned in the contract security was given it could not be inferred that such
5. However, the amounts named as consideration loan was made in reliance solely on the original
in a contract of mortgage do not limit the amount security with the "dragnet clause," but rather, on the
for which the mortgage may stand as security if new security given. Since there is a different security
from the four corners of the instrument the intent was taken for the second loan, it cannot be inferred
to secure future and other indebtedness can be that parties intended to rely on the first security for
gathered. (Ramos vs. PNB, G.R. No. 178218, the first loan. The "dragnet clause" in the first security
2011) instrument constituted a continuing offer by the
borrower to secure further loans under the security of
the first security instrument, and that when the lender

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accepted a different security he did not accept the the effect of fusing both securities into an indivisible
offer. (Prudential Bank v. Alviar, G.R. No. 150197, whole. (PBCOM v. Macadaeg, 109 Phil. 981 (1960))
2005)
Does the Doctrine of Indivisibility of Mortgage
Can the mortgage credit be alienated or still apply once the mortgage has been
assigned? extinguished by foreclosure?
Yes, and this may be done by the mortgagee without The doctrine of indivisibility of mortgage does not
the consent of the debtor, except if there is a apply once the mortgage is extinguished by a
stipulation against alienation. Alienation of the complete foreclosure thereof. Nothing in the law
mortgage credit is valid even if it is not registered. prohibits the piecemeal redemption of properties sold
Registration is necessary only to affect third persons. at one foreclosure proceedings. (Yap vs. Dy, Sr.,
(Art. 2128) G.R. Nos. 171868 & 171991, 2011).
Note that the sale or transfer of the mortgaged What is the concept of foreclosure?
property cannot affect or release the mortgage; thus, Foreclosure is the remedy available to the mortgagee
the purchaser or transferee is necessarily bound to by which he subjects the mortgaged property to the
acknowledge and respect the encumbrance. (Garcia satisfaction of the obligation to secure which the
vs. Villar, G.R. No. 158891, 2012) mortgage was given.
Can the collateral be alienated during the NOTE: A foreclosure sale retroacts to the date of
mortgage? registration of the mortgage. Thus, a person who
Yes. The law considers void any stipulation takes a mortgage in good faith and for valuable
forbidding the owner from alienating the immovable consideration, the record showing clear title to the
mortgaged. (Art. 2130) mortgagor, will be protected against equitable claims
on the title in favor of third persons of which he had
What is the Doctrine of Indivisibility of Mortgage? no actual or constructive notice. (St. Dominic Corp.,
GR: Mortgage is indivisible. vs. IAC, G.R. Nos. 70623 & L-48630, 1987)
XPN:
1. Where each one of several things guarantee Can the accessions of the property also be
a determinate portion of credit. foreclosed?
2. Where only portion of loan was released. Yes. Absent an adverse claimant or any evidence to
a. Example: X borrowed 80k from the the contrary, all accessories and accessions accruing
bank and he mortgaged his 100- or attached to the mortgaged property are included in
hectare property. Lender was only the mortgage contract and may thus also be
able to release 40k due to CB foreclosed with the principal property in the case of
restrictions. The Court held that the nonpayment of the debt secured. (PNB vs. Maranon,
bank can only foreclose on 50% of G.R. No. 189316, 2013)
the mortgaged land (50 hectares)
(Central Bank v. CA, G.R. No. L- What is the prescriptive period to recover the
45710, 1985) deficiency after foreclosure?
3. Where there was failure of consideration. The action to recover a deficiency prescribes after
a. Example: The entire amount of the ten (10) years from the time the right of action
loan was not released to the accrues (Arts.1142 & 1144)
mortgagor and the mortgage was
thus held to be enforceable only to When does the right to file an action for collection
the extent of the amount of the loan of debt or foreclosure accrue?
that was released.(Central Bank v. In order that the debtor may be in default, it is
CA, G.R. No. L-45710, 1985) necessary that:
a) the obligation be due, demandable and
The rule that real property, consisting of several lots already liquidated;
which should be sold separately, applies to sales in b) the debtor delays performance; and
execution, and not to foreclosure of mortgages. c) the creditor requires the performance
judicially or extrajudicially (unless
Does the placing of multiple mortgages in one demand is not necessary).
document make an indivisible whole?
The mere embodiment of a real estate mortgage and Thus, default only arises when demand to pay is
a chattel mortgage in one document does not have unnecessary, or when such demand is required and
made by the mortgagee but is refused by the

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mortgagor. Hence, it is at this point where the mortgages in the order of their
mortgagee obtains the right to file an action to collect priority; and
the debt or foreclose the mortgage. (Maybank d. The balance, if any, shall be paid to
Philippines., Inc. v. Spouses Tarrosa, G.R. No. the mortgagor.
213014, 2015) 5. Sheriff’s Certificate of sale is executed,
acknowledged and recorded to complete the
Can the remedies be availed of simultaneously? foreclosure.
The remedies of collection and foreclosure are
mutually exclusive, which means that the invocation What is the nature of Extra-judicial Foreclosures?
or grant of one remedy precludes the other. Both Extra-judicial Foreclosures are governed by Act No.
demands for the payment of the debt and the 3135, as amended.
foreclosure of the mortgage arise from a single cause
of action. Though the debt and the mortgage The following are the characteristics of the same:
constitute separate agreements, the latter is 1. Express authority to sell is given to the
subsidiary to the former, and both refer to one and mortgagee (i.e. Special Power of Attorney to
the same obligation. Consequently, there exists only sell);
one cause of action for a single breach of that 2. Authority is not extinguished by death of
obligation. (Pineda v. De Vega, G.R. No. 233774, mortgagor or mortgagee;
2019) 3. Public sale should be made after proper
notice (posting and publication);
What is the rule with respect to the family home? 4. Surplus proceeds of foreclosure sale belong
The family home is exempt from execution, forced to the mortgagor or his assigns;
sale or attachment, except for debts secured by 5. Debtor has the right to redeem the property
mortgages on the premises before or after such sold. Debtors who are natural persons can
constitution. (Art. 155, Family Code; Fortaleza vs. redeem within 1 year from registration of the
Lapitan, G.R. No. 178288, 2012; Parcon-Song v certificate of sale with the Register of Deeds.
Parcon, G.R. No. 199582. July 7, 2020) Debtors who are juridical persons can
redeem within 3 months from foreclosure
What is judicial foreclosure and what is the sale or until registration of the certificate of
procedure for such? sale with the Register of Deeds, whichever
It is the judicial action instituted in the proper court is earlier.(Section 47 of RA 8791 or the
which has jurisdiction over the area wherein the real General Banking Law of 2000)
property involved or a portion thereof is situated. It is 6. Remedy of party aggrieved by foreclosure is
quasi in rem in nature and survives the death of the a petition to set aside sale and cancellation
mortgagor. (Rule 68, Rules of Court) of writ of possession;
7. Republication is necessary for the validity of
The followings steps illustrate judicial foreclosure: a postponed foreclosure sale (parties have
(Rule 68) no right to waive the publication
1. Court orders mortgagor to pay the mortgage requirement).
debt with interest and other charges within a
period of not less than 90 days nor more NOTE: Unless the parties stipulate, personal notice
than 120 days from the entry of judgment; to the mortgagor in extrajudicial foreclosure
and a sale will be conducted and the proceedings is not necessary because Section 31 of
property will be awarded to the highest Act No. 3135 only requires posting of the notice of
bidder at public auction, should the sale in three public places and the publication of that
mortgagor fail to pay at the time directed; notice in a newspaper of general circulation.
2. The sale will be confirmed. This operates to (Ramirez v. TMBC, G.R. No. 198800, 2013)
divest the rights of all parties in the action
and to vest their rights to the purchase, NOTE: Extra-judicial foreclosure before a notary
subject to the right of redemption allowed by public is valid under Act No. 3135. (Tagunicar v.
law. Lorna Express,G.R. No. 138592, 2006).
3. The judgement will be executed.
4. Application of proceeds of sale to: What is the procedure for Extra-judicial
a. Costs of the sale Foreclosure?
b. Amount due the mortgagee; Procedure for Extra-judicial Foreclosure of Real
c. Claims of junior encumbrances or Estate Mortgage (Act No. 3135)(Act No. 1508, A.M.
persons holding subsequent N0. 99-10-05-0; January 15, 2000) (ARC-DIP-RET)

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1. Filing of Application before the Executive After the expiration of the redemption period without
Judge through the Clerk of Court; redemption having been made by petitioner,
2. Clerk of Court will examine whether the respondent became the owner thereof and
Requirements of the law have been consolidation of title becomes a right. Being already
complied with, that is, whether the notice of then the owner, respondent became entitled to
sale has been posted for not less than 20 possession. Petitioner already lost his possessory
days in at least 3 public places of the right over the property after the expiration of the said
municipality or city where the property is period. (Spouses Gatuslao v. Yanson, G.R. No.
situated, and if the same is worth more than 191540, 2015)
P400.00, that such notice has been
published once a week for at least 3 Is the stipulation of an Upset Price or “tipo”
consecutive weeks in a newspaper of allowed?
general circulation in the city or municipality; No. A stipulation of minimum price at which the
3. The Certificate of sale must be approved by property shall be sold to become operative in the
the Executive Judge; event of a foreclosure sale at public auction is null
4. In extrajudicial foreclosure of real mortgages and void, for the property must be sold to the highest
in Different locations covering one bidder. (de Leon & de Leon, Jr, citing Banco Espanol
indebtedness, only one filing fee Filipino v. Donaldson, 5 Phil. 418)
corresponding to such debt shall be
collected; What is the effect of inadequacy of price in a
5. The Clerk of Court shall Issue certificate of foreclosure sale?
payment indicating the amount of 1. Where there is Right to Redeem.
indebtedness, the filing fees collected, the 1. GR: Inadequacy of price is immaterial
mortgages sought to be foreclosed, the because the judgment debtor may redeem
description of the real estates and their the property.
respective locations; 2. XPN: The price is so inadequate as to
6. The notice of sale shall be Published in a shock the conscience of the court taking
newspaper of general circulation; into consideration the peculiar
7. The application shall be Raffled among all circumstances. The sale will be set aside.
sheriffs; (Sulit vs. CA, G.R. No. 119247, 1997)
8. After the redemption period has Expired, the 2. Property may be sold for less than its fair market
Clerk of Court shall archive the records; and value upon the theory that the lesser the price the
9. Previously, the rule was that no auction sale easier for the owner to redeem.
shall be held unless there are at least Two
participating bidders, otherwise the sale The value of the mortgaged property has no bearing
shall be postponed to another date. If on the on the bid price at the public auction, provided that
new date there shall not be at least 2 the public auction was regularly and honestly
bidders, the sale shall then proceed. The conducted.
names of the bidders shall be reported by
the Sheriff or the Notary Public who What is the nature of a foreclosure sale based on
conducted the sale to the Clerk of Court basis of borrower’s non-payment of usurious or
before the issuance of the certificate of sale. unconscionable interest?
On January 30, 2001, the Supreme Court The foreclosure sale is invalid as it stemmed from the
issued a resolution amending paragraph 5 of enforcement of a usurious mortgage contract. The
A.M. 99-10-05-0 explicitly dispensing with unlawful interest charge which would lead to the
the "two-bidder rule." demand for the amount due resulted in the invalidity
of the subsequent foreclosure sale. The mortgagor
Can the mortgagee recover the deficiency? cannot be obliged to pay an inflated or overstated
It is settled that if the proceeds of the sale are mortgage indebtedness on account of excessive
insufficient to cover the debt in an extrajudicial interest charges without offending the basic tenets of
foreclosure of mortgage, the mortgagee is entitled to due process and equity. (Anchor Savings Bank v.
claim the deficiency from the debtor. While Act. No. Pinzman Realty, G.R. No. 192304, 2014)
3135 does not discuss the mortgagee’s right to
recover the deficiency, neither does it contain any Can the creditor waive the security?
provision expressly or impliedly prohibiting recovery. 1. The mortgagee may waive right to foreclose
(BPI vs. Avenido, G.R. No. 175816, 2011) his mortgage and maintain a personal action
for recovery of the indebtedness.
What happens if the property is not redeemed? 2. Remedies are alternative, not cumulative.

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3. Options of the mortgagee in case the debtor- How should redemption be performed?
mortgagor dies: The general rule in redemption is that it is not
a. To waive mortgage and claim entire sufficient that a person offering to redeem manifests
debt from the mortgagor’s estate as his desire to do so; The statement of intention must
an ordinary claim; be accompanied by an actual and simultaneous
b. To judicially foreclose mortgage tender of payment; In case of disagreement over the
and prove any deficiency; or redemption price, the redemptioner may preserve his
c. To rely on the mortgage exclusively right of redemption through judicial action, which in
without filing a claim for deficiency every case, must be file within the one-year period of
redemption. (Torbela vs. Rosario, G.R. Nos. 140528
What is redemption? & 140553, 2011)
Redemption is a transaction by which the mortgagor
reacquires or buys back the property which may have
passed under the mortgage or divests the property of
the lien which the mortgage may have created.
What are the Kinds of Redemption?

1. Equity of redemption: Right of the
mortgagor to redeem the mortgaged
property after his default in the performance
of the conditions of the mortgage but before
confirmation of the sale
a. Applies to judicial foreclosure of
real mortgage and chattel mortgage
foreclosure.
b. A second mortgagee acquires only
the equity of redemption vested in
the mortgagor, and his rights are
strictly subordinate to the superior
lien of the first mortgagee.
c. NOTE: Redemption of property
where the mortgagee is a banking
institution is allowed within 1 year
from the date of the registration of
the confirmation of sale.
2. Right of redemption: right of the mortgagor
to redeem the property within a certain
period after it was sold for the satisfaction of
the debt
a. Applies only to extrajudicial
foreclosure of real mortgage.
b. XPN: The right of redemption is
also available in judicial
foreclosure, in cases where the
mortgagee is a bank. (Section 47 of
RA 8791 or the General Banking
Law of 2000)
c. NOTE: The right of redemption, as
long as within the period
prescribed, may be exercised
irrespective of whether or not the
mortgagee has subsequently
conveyed the property to some
other party (Sta. Ignacia Rural
Bank, Inc. v. CA, G.R. No. 97872,
1994)

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What are the statutory periods of redemption?
EXTRAJUDICIAL FORECLOSURE
JUDICIAL FORECLOSURE
(Act no. 3135)
PERIODS OF
REDEMPTION
BANKS NON-BANKS BANKS NON-BANKS
1 year from
1 year from registration of the certificate of sale registration of the N/A [Equity of
Individual debtors /
with Registry of Deeds. certificate of sale Redemption
mortgagors
with Registry of Only]
Deeds.
3 months after
foreclosure or
before
1 year from
registration of
Juridical persons 1 year from registration of registration of the N/A [Equity of
certificate of
as debtors / the certificate of sale with certificate of sale Redemption
foreclosure
mortgagors Registry of Deeds. with Registry of Only]
whichever is
Deeds.
earlier (General
Banking Law,
Sec. 47)
The right of legal redemption must be exercised NOTE: Redemption price in this case is reduced by
within specified time limits. However, the statutory the income received from the property.
period of redemption can be extended by
agreement of the parties. (Republic vs. Marawi- Who are Junior Mortgagees?
Marantao General Hospital, G.R. No. 158920, 2012) After the foreclosure sale, there remains in the
second mortgagee a mere right of redemption. His
As a rule, the period of redemption is not tolled by remedy is limited to the right to redeem by paying off
the filing of a complaint or petition for annulment of the debt secured by the first mortgage.
the mortgage and the foreclosure sale conducted
pursuant to the said mortgage. He is entitled to the payment of his credit the excess
of the proceeds of the auction sale.
How do you determine the Redemption Price?
1. Mortgagee is not a bank (Act No. 3135 in In case the credit of the first mortgagee has
relation to Sec. 28, Rule 39 of Rules of Court) absorbed the entire proceeds of the sale, the
a. Purchase price of the property; second mortgage is extinguished, since the
b. 1% interest per month on the purchase mortgage cannot be enforced beyond the total value
price; of the mortgaged property.
c. Taxes paid and amount of purchaser’s
prior lien, if any, with the same rate of What is a Mortgagee in Possession?
interest computed from the date of One who has lawfully acquired actual or
registration of sale, up to the time of constructive possession of the premises mortgaged
redemption. to him, standing upon his rights as mortgagee and
2. Mortgagee is a bank (Section 47, General not claiming under another title, for the purpose of
Banking Act of 2000) enforcing his security upon such property or making
a. Amount due under the mortgage deed; its income help to pay his debt.
b. Interest at the rate specified in mortgage;
c. Cost and expenses incurred by bank from The rights of the first mortgage creditor or mortgage
sale and custody less income derived over the mortgaged properties are superior to those
of a subsequent attaching creditor and other junior

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mortgagees. (Lee vs. Bangkok Bank Public within his discretion to set a higher price, for after all,
Company, Ltd. G.R. No. 173349, 2011) the property already belongs to him as owner.
What are the Rights and Obligations of the What is the Doctrine of Mortgagee in Good
Mortgagee in Possession? Faith?
1. Similar to an antichresis creditor – entitled Under the Doctrine of “Mortgagee in Good Faith”,
to retain such possession until the even if the mortgagor is not the owner of the
indebtedness is satisfied and the property mortgaged property, the mortgage contract and any
redeemed. foreclosure sale arising therefrom are given effect
2. Without right to reimbursement for useful by reason of public policy; Even if the mortgagor is
expenses not the rightful owner of, or does not have a valid
title to, the mortgaged property, the mortgagee in
What is a Writ of Possession? good faith is, nonetheless, entitled to protection.
Order whereby the sheriff is commanded to place in (Torbela vs. Rosario, G.R. Nos. 140528 &140553,
possession of real or personal property the person 2011)
entitled thereto such as when a property is
extrajudicially foreclosed. When a mortgagee relies upon what appears on the
face of a Torrens title and lends money in all good
The issuance of the writ of possession in an faith on the basis of the title in the name of the
extrajudicial foreclosure is merely a ministerial mortgagor, only thereafter to learn that the latter’s
function. The purchaser at the foreclosure sale is title was defective, being thus an innocent
entitled as of right to a writ of possession. mortgagee for value, his or her right or lien upon the
land mortgaged must be respected and protected.
Before lapse of redemption period – file an ex (Mahinay vs. Gako, Jr., G.R. Nos. 165338 &
parte application and file a bond 179375, 2011)
After lapse of redemption period – file an ex parte BUT: A bank whose business is impressed with
application and no need for a bond (PBCom v. public interest is expected to exercise more care
Yeung, G.R. No. 179691, 2013) and prudence in its dealings than a private
individual, even in cases involving registered lands.
“Purchaser at the auction sale concerned whether in A bank cannot assume that, simply because the title
a judicial or extrajudicial foreclosure shall have the offered as security is on its face free of any
right to enter upon and take possession of such encumbrances of lien, it is relieved of the
property immediately after the date of the responsibility of taking further steps to verify the title
confirmation of the auction sale and administer the and inspect the properties to be mortgaged.
same in accordance with law. Any petition in court
to enjoin or restrain the conduct of foreclosure In order for a mortgagee to invoke the doctrine of
proceedings instituted pursuant to this provision mortgagee in good faith, the impostor must have
shall be given due course only upon the filing by the succeeded in obtaining a Torrens title in his name
petitioner of a bond in an amount fixed by the court and thereafter in mortgaging the property. Where
conditioned that he will pay all the damages which the mortgagor is an impostor who only pretended to
the bank may suffer by the enjoining or the restraint be the registered owner, and acting on such
of the foreclosure proceeding.” (The General pretense, mortgaged the property to another, the
Banking Law of 2000, Section 47) mortgagor evidently did not succeed in having the
property titled in his or her name, and the mortgagee
What is the distinction between Redemption and cannot rely on such pretense as what appears on
Repurchase? the title is not the impostor's name but that of the
The right to redeem becomes functus oficio at the registered owner. (Ruiz v. Dimailig, G.R. No.
end of the redemption period, and its exercise after 204280, 2016)
the period is not really one of redemption but a
repurchase. Distinction must be made because BUT: SC has held in a case that while the bank
redemption is by force of law; the purchaser at failed to exercise greater care in conducting the
public auction is bound to accept redemption. ocular inspection of the properties offered for
Repurchase however of foreclosed property, after mortgage, its omission did not prejudice any
redemption period, imposes no such obligation. innocent third parties because the cause of the
After expiry, the purchaser may or may not re-sell mortgagors' defective title was the simulated sale
the property but no law will compel him to do so. between the buyer/mortgagor and seller (the latter
And, he is not bound by the bid price; it is entirely questioning the validity of the mortgage). Thus, no

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amount of diligence in the conduct of the ocular "antichresis involves an express agreement
inspection could have led to the discovery of the between parties such that the creditor will have
complicity between the ostensible mortgagors/buyer possession of the debtor's real property given as
and the true owners/seller. In fine, the bank can security, and such creditor will apply the fruits of the
hardly be deemed negligent. Thus, the bank was property to the interest owed by the debtor, if any,
considered as a mortgagee in good faith (Philippine
then to the principal amount." (J. Hernando:
Banking Corporation v. Dy, G.R. No. 183774, 2012)
Spouses Ligawen v. Martin, G.R. No. 219137
ALSO: SC has held that a bank should not (Notice), 2022)
necessarily be made liable if it did not investigate or
inspect the property. If the circumstances reveal that Characteristics
an investigation would still not yield a discovery of 1. Accessory contract – it secures the
any anomaly, or anything that would arouse performance of a principal obligation.
suspicion, the bank should not be liable. Such is the 2. Formal contract – must be in a specified form
case when the TCT is clean, bearing no annotations to be valid, i.e., “in writing.” (Art. 2134)
evidencing any trust, lien, or encumbrance on the NOTE: Amount of principal and interest must
property, not forged or fake. There is also no
be in writing.
showing that the bank was aware of any defect or
any other conflicting right on the title when the 3. Nominate contract – given a specific name by
property was mortgaged to it. In fact, the the Civil Code.
investigation of the property would still fail to bring 4. Consensual contract – the Civil Code does ot
any doubt as to the validity of the TCT (i.e., the title require delivery of the immovable to the
owners were in actual possession of the property). creditor.
(Parcon-Song v Parcon, G.R. No. 199582. July 7, 5. Unilateral contract – all obligations are
2020) imposed on the creditor.
6. Onerous contract – debtor granted antichresis
E. ANTICHRESIS in consideration of the loan or the principal
obligation being secured.
Definition
NOTE: If a person other than the debtor
A contract whereby the creditor acquires the right to
entered into the contract of antichresis with the
receive the fruits of an immovable of the debtor, with
creditor and such third person does not receive
the obligation to apply them to the payment of
compensation, the contract is gratuitous. (DE
interest, if owing, and thereafter to the principal of
LEON)
the credit. (Art. 2132)
Parties to the Contract
Antichresis involves an express agreement between
1. Debtor
parties whereby:
2. Creditor
(a) the creditor will have possession of the
debtor’s real property given as security;
GR: Only the debtor can enter into an antichresis
(b) such creditor will apply the fruits of the said
with the creditor as the immovable from which the
property to the interest owed by the debtor, if
fruits will be derived must be “immovable of the
any, then to the principal amount;
debtor.” (Art. 2132)
(c) the creditor retains enjoyment of such property
until the debtor has totally paid what he owes;
XPN: Article 2139 makes the last paragraph of
and
Article 2085 applicable to the contract of antichresis.
(d) should the obligation be duly paid, then the
That paragraph allows third parties who are not
contract is automatically extinguished
parties to the principal obligation to secure the latter
proceeding from the accessory character of the
by pledging or mortgaging their own properties.
agreement. (Spouses Reyes v. Heirs of
Malance, G.R. No. 219071, 2016)
NOTE: Third party should be the absolute owner of
the property. Contract of antichresis constituted by
It cannot be gainsaid that the contract of loan, which
a person who is not the of the subject property is
granted the petitioners the right to occupy the
invalid as it is a clear violation of Article 2085 of the
subject property as payment of the interests, is
Civil Code. (J. Hernando: Spouses Ligawen v.
actually a contract of antichresis. A contract of
Martin, G.R. No. 219137 (Notice), 2022)

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may also produce a

Essential Requisites real right.
1. Consent of the contracting parties;
2. Object certain which is the subject matter of the Creditor, unless there
contract; and is a stipulation to the Creditor is not obliged
3. Cause of the obligation which is established. (Art. contrary, is obliged to to pay taxes and
1318) pay taxes and charges charges upon the
upon the estate. (Art. estate.
2135)
Special Requisites
Expressly stipulates
1. Only the fruits of an immovable property;
that the creditor given
2. Delivery of the immovable is necessary for the
possession of the
creditor to receive the fruits and not that the
property shall apply No obligation of the
contract shall be binding;
the fruits thereof to the same on the part of
3. Amount of principal and interest must be specified
payment of interest, if the mortgagee.
in writing (otherwise, void); and
owing, and thereafter
4. Express agreement that debtor will give
to the principal of
possession of the property to creditor and that the credit.
latter will apply the fruits to the interest, if any,
then to the principal of his credit.
Remedies of Creditor in Case of Non-Payment of
NOTE: The obligation to pay interest is not essential Debt
in a contract of antichresis, there being nothing in the 1. Action for specific performance; or
Code to show that antichresis is only applicable to 2. Petition for the sale of the real property as in a
securing the payment of interest- bearing loans. On foreclosure of mortgages under Rule 68 of the
the contrary, antichresis is susceptible of Rules of Court.
guaranteeing all kinds of obligations, pure or
conditional. NOTE: The parties, however, may agree on an
extrajudicial foreclosure in the same manner as they
Obligations of the Creditor (RAFT) are allowed in contracts of mortgage and pledge.
1. To apply the Fruits of the immovable to interest, (Tavera v. El Hogar Filipino, Inc., G.R. No. L-45963,
if owing, and thereafter, to the principal. (Art. 1939)
2132)
2. To pay Taxes and charges upon the estate A stipulation authorizing the antichretic creditor to
unless there is a stipulation to the contrary. (Art. appropriate the property upon the non-payment of
2135) the debt within the agreed period is void. (Art. 2088)
3. To bear the Expenses necessary for the
preservation and repair of the estate. (Art. 2135) Acquisition by Creditor of Property by
4. To Return the immovable after debt is totally Prescription
paid. (Art. 2136) The creditor in antichresis and his successors-in-
interest cannot ordinarily acquire by prescription the
Distinction between Antichresis and Real land given to him, any agreement to the contract
Mortgage being void. (Valencia v. Alcala, G.R. No. 16256,
1921; Bernardo v. Barretto, G.R. No. 11933, 1917;
ANTICHRESIS REAL MORTGAGE
Immovable is Debtor usually retains Trillana v. Manansala, G.R. No. L-6752, 1955)
delivered to the possession of the
creditor. property. Possession, for the purpose of acquisitive
Creditor acquires only Creditor does not have prescription, must be in the concept of an owner. (Art.
the right to receive the any right to receive the 1118) The possession of an antichretic creditor is not
fruits of the property; fruits but mortgage in the concept of an owner. ((Art. 2132) He is a mere
hence, it does not creates a real right holder placed in possession of the land by the debtor,
produce a real right. over the property the owner. (Ramirez v. Court of Appeals, G.R. No.
However, if registered which is enforceable 38185, 1986) He cannot acquire ownership of the
in the Registry of against the whole
real estate subject of the antichresis unless he
Property, antichresis world.
repudiates his status as an antichretic creditor.

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V. COMPROMISE • If a losing party showed a sincere desire to

compromise, the courts may mitigate the
damages to be paid. (Art. 2031)
Compromise – a contract by which the parties, by
making reciprocal concessions, avoid litigation or Court approval is necessary for compromises
put an end to one already commenced. (Art. 2028) entered into by (GRAPE) (Art. 2032):
1. Guardians
It is a consensual contract, perfected upon the 2. Representatives of absentees
meeting of the minds. (Paraiso International 3. Administrators or Executors of a
Properties, Inc. v. CA, G.R. No. 153420, April 16, decedent’s estate
2008). 4. Parents
As such, neither courts nor quasi-judicial bodies For a juridical person to compromise, it must comply
cannot impose a compromise different from the with the form and requirements that are needed for
agreement between the parties. (Philippine Bank of alienation of property. (Art. 2033).
Communications v. Echiverri, G.R. No. L- 41795,
Aug. 29, 1980, citing Municipal Board of Generally, only a Board Resolution is required;
Cabanatuan City v. Samahang Magsasaka, G.R. however, for GOCCs and government agencies, the
No. L-25818, Feb. 25, 1975, 62 SCRA 435). authority to compromise a settled claim or liability
exceeding P100,000.00 is vested exclusively in
Compromise requires: (CARE) Congress, per Sec. 20(1), Chap. IV, Subtitle B, Title
1. Contract I, Book V of EO No. 292. (Binga Hydroelectric Plant,
2. With Reciprocal concessions Inc. v. COA, G.R. No. 218721, July 10, 2018).
3. Seeking to Avoid or End litigation
The following CANNOT be compromised (Art.
Two kinds of compromise agreements: 2035):
1. Judicial - which puts an end to a pending 1. Civil status of persons
litigation; and 2. Validity of marriage or of legal separation
2. Extrajudicial - which is to avoid litigation. 3. Any ground for legal separation
(Spouses Lana v. CA, G.R. No. 104133, April 4. Future support
18, 1995, citing Caguioa, VI Commentaries 5. Jurisdiction of courts
and Cases on Civil Law). 6. Future legitime
The courts shall endeavor to persuade the litigants A compromise covers only those matters definitely
in a civil case to compromise. (Art. 2029) stated therein, or those included by necessary
• Procedurally, this is done through implication. (Art. 2036)
mandatory court-annexed mediation,
judicial disputed resolution. (see A.M. No. A compromise is res judicata upon the parties, but
11-1-6-SC-PHILJA, Jan. 11, 2011), and there shall be no execution except in compliance
also during pre-trial (Rule 18). with a judicial compromise. (Art. 2037)
• Note that what can be compromised is a
civil case; “there may be a compromise Note: even if the compromise is not
upon the civil liability arising from an judicially approved, it is res judicata. (Jose
offense; but such compromise shall not Cochingyan, Jr. v. Cloribel, G.R. No. L-
extinguish the public action for the 27070-71, April 22, 1977, 76 SCRA 361).
imposition of the legal penalty.” (Art.
2034); “it is settled that criminal liability However, only if the compromise is
cannot be the subject of a cimpromise” approved by the court can it be enforced by
(Team Image Entertainment, Inc. v. Solar mandamus. (Spouses Lana v. CA, G.R.
Team Entertainment, Inc., G.R. No. No. 104133, Apr. 18, 1995, citing Maceda,
191652, Sept. 13, 2017). Jr. v. Moreman Builders, G.R. No. 100239,
• If either or both parties express a Oct. 28, 1991, 203 SCRA 293).
willingness to compromise, or one party
offers to compromise (even if the other Compromises in which there is mistake, fraud,
party refused the offer), the civil violence, intimidation, undue influence, or falsity of
action/proceeding shall be suspended. documents are voidable.
(Art. 2030)

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However, if one party, by virtue of the ARBITRATIONS

compromise, already withdrew from a
litigation that had commenced, the other The same persons who may enter into compromise
party cannot set up mistake of fact. (Art. may also submit their arbitrators for decision. (Art.
2038). 2042)
General Rule for newly-discovered documents: All provisions relating to compromise are also
If there are newly-discovered documents referring to applicable to arbitrations. (Art. 2043)
part of a compromise that was already entered into,
the discovery of such by itself is not cause of Any stipulation that the arbitrator’s award or
annulment/rescission of the compromise, unless the decision shall be final is valid, without prejudice to
documents were concealed by one of the parties. Articles 2038-40. (on voidable compromises; Art.
2044)
Exception for newly-discovered documents: If
the compromise refers to only one thing, and the Any clause giving one party the power to choose
newly-discovered documents show that one party more arbitrators than the other is void. (Art. 2045)
had no right to said thing (Art. 2039)
The appointment of arbitrators and the procedure
If the parties entered into compromise, and either or for arbitration shall be governed by such rules of
both parties were unaware that there was already a court as the SC may provide. (Art. 2046).
final judgment entered into at the time they entered
the compromise, the compromise may be rescinded Arbitration is a preferred method of settling disputes
(Art. 2040) in our jurisdiction. RA 9285 (Alternative Dispute
Resolution Act of 2004) provides that:
If one party fails or refuses to abide by the a. The RTC must refer the case to arbitration
compromise, the other party has the option of either if there is an arbitration clause; it does not
enforcing the compromise, or consider the have jurisdiction;
compromise rescinded and insist on the original b. Foreign arbitral awards, however, must be
demand (Art. 2041) confirmed by the RTC to be enforced;
c. The RTC does have jurisdiction to review
The doctrine on immutability of judgments applies to the foreign arbitral award (even if it does not
compromise agreements approved by courts in the have jurisdiction over the dispute itself);
same manner as it applies to judgments that have d. The grounds to set aside a foreign arbitral
been rendered on the basis of a full-blown trial. award are different from those to set aside
Thus, a judgment on compromise that has attained a domestic arbitral award; for the former,
finality cannot be “modified in any respect, even if the grounds are Art. 34(2) of the
the modification is meant to correct erroneous UNCITRAL Model Law, while for the latter,
conclusions of fact and law, and whether it be made the grounds are set in Sec. 23 of RA 876;
by the court that rendered it or the Highest Court of and
the land.” (Chiquita Brands v. Omelio, G.R. No. e. The RTC decision on a foreign arbitral
189102, 2017). award is appealable.
A judgment upon a compromise is rendered based Thus, if there is an arbitration clause, unilateral
on the parties’ reciprocal concessions. All the more rescission is improper. (Korea Technologies v.
reason should a judgment upon a compromise be Lerma, G.R. No. 143581, Jan. 7, 2008)
complied with in good faith considering that the
parties themselves crafted its terms. However, Under the doctrine of separability, even the party
notwithstanding provisions in a compromise who repudiates the main contract may invoke an
agreement stating that the parties should arbitration clause. Also, a formal request for
“immediately provisionally dismiss all actions, arbitration is not the only method to activate the
whether civil or criminal, they may have filed against arbitration clause; raising the existence of the
each other”, a party that fails to cause the dismissal arbitration clause and the desire to avail of such in
of the criminal cases filed cannot be deemed to have an Answer is valid invocation of the right to arbitrate.
violated the compromise agreement, since criminal (Koppel, Inc. v. Makati Rotary Club Foundation, Inc.,
liability cannot be the subject of a compromise. G.R. No. 198075, Sept. 4, 2013)
(Team Image Entertainment v. Solar Team
Entertainment, G.R. No. 191652, 2017). Note: the following CANNOT be the subject of an
arbitration clause (Sec. 6, RA 9285):

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1. Labor disputes covered by the Labor Code; appointment of the arbitrator or of

2. Civil status of persons; the arbitration proceedings or was
3. Validity of marriage; otherwise unable to present his
4. Any ground for legal separation; case; or
5. Jurisdiction of courts; d. The award deals with a dispute
6. Future legitime; beyond the arbitration agreement,
7. Criminal liability; and or contains decisions on matters
8. Anything which by law cannot be beyond the agreement; or
compromised. e. The composition of the arbitration
tribunal or the arbitration
Note: Arbitration of constructions disputes are proceedings were not in
governed by E.O. No. 1008 (the Construction accordance with the agreement
Industry Arbitration Law), and falls under the between the parties;
jurisdiction of the Construction Industry Arbitration 2. The court finds that:
Commission. (Chapter 6 of RA 9285) Grounds to a. The subject matter of the dispute is
vacate a domestic arbitral award (Sec. 24, RA not capable of settlement by
876): arbitration under the law of the
1. Award procured by corruption, fraud, or other State; or
undue means; or b. The award is in conflict with the
2. Evident partiality or corruption in any of the public policy of the State.
arbitrators; or
3. Arbitrators were guilty of misconduct in
refusing to postpone when there is good
cause, or in refusing to hear pertinent and
material evidence, or was disqualified and
concealed such disqualification; or
4. Arbitrators either exceeded their powers or
so imperfectly executed them that a mutual,
final, and definite award was not made
Grounds to modify a domestic arbitral award (Sec.

25, RA 876):
1. Evident miscalculation of figures or evident
mistake in description of any person, thing, or
property referred to in the award; or
2. Arbitrators awarded on a matter not
submitted to them, not affecting the merits of
the decision upon the mater submitted; or
3. Award is imperfect in a matter of form not
affecting the merits of the controversy, and if
it was a commissioner’s report, the defect
could have been amended or disregarded by
the court.
A party has 1 month to file for confirmation or

enforcement of the arbitral award (Sec. 23, RA 876),
and 30 days to move for the modification or vacation
of the award (Sec. 26, RA 876) Grounds to vacate
or modify a foreign arbitral award (Art. 34(2) of the
UNCITRAL Model Law, and Sec. 45 of RA 9285):
1. A party to the award furnishes proof that:
b. A party to the agreement was
under some incapacity, or the
agreement is not valid under the
law to which the parties have
subjected it; or
c. The party making the application
was not given proper notice of the

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VI. QUASI-CONTRACTS return (Art. 1423, CIVIL

CODE).
Definition
Quasi-contracts are juridical relations resulting from Other cases of quasi-contracts (Arts. 2164-2175,
lawful, voluntary and unilateral acts, which has for CIVIL CODE).
its purpose, the payment of indemnity to the end that When, without the knowledge of the person obliged
no one shall be unjustly enriched or benefited at the to give support, it is given by a stranger, the latter
expense of another (Art. 2142, CIVIL CODE). shall have a right to claim the same from the former,
unless it appears that he gave it out of piety and
Distinguished from other Sources (LUV) without intention of being repaid (Art. 2164, CIVIL
1. The act giving rise to a quasi-contract must be CODE).
Lawful distinguishing it from delict;
2. The act must be Voluntary distinguishing it from When funeral expenses are borne by a third person,
a quasi-delict which is based on fault or without the knowledge of those relatives who were
negligence; and obliged to give support to the deceased, said
3. The act must be Unilateral distinguishing it from relatives shall reimburse the third person, should the
contract which is based on agreement. latter claim reimbursement (Art. 2165, CIVIL
(ERNESTO L. PINEDA, OBLIGATIONS & CODE).
When the person obliged to support an orphan, or
Kinds of quasi-contract an insane or other indigent person unjustly refuses
to give support to the latter, any third person may
1. Negotiorum Gestio is the voluntary
furnish support to the needy individual, with right of
management of the property or affairs of
reimbursement from the person obliged to give
another in times of emergency without the
support. The provisions of this article apply when the
owner’s authority (Art. 2144, CIVIL CODE).
father or mother of a child under eighteen years of
age unjustly refuses to support him (Art. 2166, CIVIL
Obligation created: Return of the property by
CODE).
the officious manager to the owner once the
emergency ceases, and for the owner to
When through an accident or other cause a person
reimburse expenses incurred by the officious
is injured or becomes seriously ill, and he is treated
manager (Art. 2150, CIVIL CODE).
or helped while he is not in a condition to give
consent to a contract, he shall be liable to pay for
2. Solutio Indebiti is the juridical relation, which
the services of the physician or other person aiding
is created when something is received when
him, unless the service has been rendered out of
there is no right to demand it and it was unduly
pure generosity (Art. 2167, CIVIL CODE).
delivered through mistake (Art. 2154, CIVIL
CODE).
When during a fire, flood, storm, or other calamity,
property is saved from destruction by another
Obligation created: Recipient to return the
person without the knowledge of the owner, the
property delivered through mistake.
latter is bound to pay the former just compensation
(Art. 2168, CIVIL CODE).
SOLUTIO INDEBITI NATURAL
OBLIGATIONS When the government, upon the failure of any
In solutio indebiti, the The person making the person to comply with health or safety regulations
payment or delivery is payment or delivery concerning property, undertakes to do the
made on the basis of a knows that he has no necessary work, even over his objection, he shall be
liable to pay the expenses (Art. 2169, CIVIL CODE).
mistake, hence the legal obligation to pay
recipient has the legal or to deliver but still When by accident or other fortuitous event,
obligation to return voluntarily makes such movables separately pertaining to two or more
(Art. 2154, CIVIL payment or delivery. persons are commingled or confused, the rules on
CODE). For this reason, once co-ownership shall be applicable (Art. 2170, CIVIL
payment or delivery CODE).
has been made, there
is no right to ask for the

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The rights and obligations of the finder of lost

personal property shall be governed by articles 719
and 720 (Art. 2171, CIVIL CODE).
The right of every possessor in good faith to

reimbursement for necessary and useful expenses
is governed by article 546 (Art. 2172, CIVIL CODE).
When a third person, without the knowledge of the

debtor, pays the debt, the rights of the former are
governed by articles 1236 and 1237 (Art. 2173,
CIVIL CODE).
When in a small community a majority of the

inhabitants of age decide upon a measure for
protection against lawlessness, fire, flood, storm or
other calamity, any one who objects to the plan and
refuses to contribute to the expenses but is
benefited by the project as executed shall be liable
to pay his share of said expenses (Art. 2174, CIVIL
CODE).
Any person who is constrained to pay the taxes of

another shall be entitled to reimbursement from the
latter (Art. 2175, CIVIL CODE).
NOTE: The Civil Code provides [the

abovementioned] enumeration of quasi-contracts,
but the list is not exhaustive and merely provides
examples (Metrobank v. Absolute Management
Corporation, G.R. No. 170498, 2013).

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VII. TORTS AND DAMAGES NOTE: This portion may still be subject to
issued, if necessary.
A. PRINCIPLES A. PRINCIPLES
1. Abuse of Rights
2. Unjust Enrichment Definition of Quasi-Delict
3. Liability Without Fault Whoever by act or omission causes damage to
4. Acts Contrary to Law another, there being fault or negligence, is obliged
5. Acts Contrary to Morals to pay for the damage done. Such fault or
negligence, if there is no pre-existing contractual
B. CLASSIFICATION OF TORTS relation between the parties, is called a quasi-delict
1. Intentional and is governed by the provisions of this Chapter.
2. Negligent (Art.2176)
3. Strict Liability
Definition of Tort
C. THE TORTFEASOR Acts that give rise to civil liability but are not
1. Joint necessarily the consequences of crimes or
2. Direct contractual obligations. (Paras, Pre-week
Handbook in Civil Law, p. 588, 2012)
D. QUASI-DELICT VS. CULPA CONTRACTUAL
VS. CULPA CRIMINAL An unlawful violation of a private right, not created
1. Nature of Liability by contract, and which gives rise to an action for
damages. It is a wrongful act or omission resulting
E. PROXIMATE CAUSE in breach of a private legal duty, as distinguished
1. Concept from a mere breach of contractual duty, and damage
2. Doctrine of Last Clear Chance from said breach of duty of such a character as to
afford a right of redress at law in favor of the injured
F. VICARIOUS LIABILITY party against the wrongdoer. (Aquino, Torts and
Damages, p.1, 2013)
G. RES IPSA LOQUITUR
Elements of Quasi-Delict
H. DAMNUM ABSQUE INJURIA 1. Damage suffered by plaintiff
2. Fault or Negligence of the defendant,
I. DEFENSES or some other person for whose acts he
must respond
J. NEGLIGENCE 3. Connection of cause and effect between
1. Standard of Care the fault or negligence of the defendant and
2. Presumption of Negligence the damages incurred by the plaintiff
4. No pre-existing contractual relation
K. DAMAGES between the parties (Andamo v.
1. Kinds of Damages International Appellate Court G.R. No.
a. Actual and Compensatory Damages 74761, 1990)
b. Moral Damages
c. Nominal Damages 1. ABUSE OF RIGHTS
d. Temperate or Moderate Damages
e. Liquidated Damages Definition of Abuse of Right
f. Exemplary or Corrective Damages Every person must, in the exercise of his rights and
in the performance of his duties, act with justice,
2. When Damages May be Recovered give everyone his due, and observe honesty and
good faith. (Art. 19)
L. DAMAGES IN CASE OF DEATH
A right, though by itself legal because recognized or
M. DUTY OF INJURED PARTY granted by law as such, may nevertheless become
the source of some illegality (Ardiente v. Sps. Javier,
G.R. No. 161921, 2013)

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b. By the person who suffered the

Elements of Abuse of Right (LEG-BAD-PREJ) damage
a. The existence of a legal right or duty
b. Which is exercised in bad faith 2. Falling Objects (Art. 2193)
c. For the sole intent of prejudicing or
injuring another The head of a family that lives in a building or a part
thereof, is responsible for damages caused by
Malice or bad faith is at the core of an abuse of right. things thrown or falling from the same.
(Chevron Philippines, Inc. v. Mendoza, G.R. Nos.
211533 & 212071, 2019). Head of the family is not limited to the owner of the
building. It may include the lessee thereof.
Malice or bad faith implies a conscious and (Dingcong v. Kanaan, G.R. No. L-47033, 1941).
intentional design to do a wrongful act for a
dishonest purpose or moral obliquity (California The head of the family may recover from the person
Clothing Inc. v. Quiñones, G.R. No. 175822, 2013). who caused the damage. The liability is solidary.
(Art. 2194)
2. UNJUST ENRICHMENT
3. Liability of Employers in case of Death or
Every person who through an act of performance by Injuries of Employees (Art. 1711)
another, or any other means, acquires or comes into
possession of something at the expense of the latter General Rule: Owners of enterprises and other
without just or legal ground, shall return the same to employers are liable to pay for the death of injuries
him. (Art. 22) to their employees, even if the cause is purely
accidental.
Even when an act or event causing damage to
another's property was not due to the fault or Exception: If the mishap was due to the employee’s
negligence of the defendant, the latter shall be liable own notorious negligence, or voluntary act or
for indemnity if through the act or event he was drunkenness.
benefited. (Art. 23)
Exception to the Exception: When the employee’s
3. LIABILITY WITHOUT FAULT lack of due care only contributed to his death or
injury, the employer shall be liable for compensation
There is strict liability if one is made liable but the same shall be equitably reduced.
independent of fault, negligence or intent after
establishing certain facts specified by law. Strict Where he contributes to the principal occurrence as
liability tort can be committed even if reasonable one of its determining factors, he cannot recover.
care was exercised regardless of the state of mind Where, in conjunction with the occurrence, he
of the actor at that time. (AQUINO, Torts and contributes only to his own injury, he may recover
Damages, supra at 829). the amount that the defendant responsible for the
event should pay for such injury, less a sum deemed
Instances of Strict Liability: suitable equivalent for his own imprudence (Rakes
v. Atlantic Gulf and Pacific Co., G.R. No. 1719,
1. Possessors and Users of Animals ( Art. 2183) 1907).
General Rule: The possessor of an animal or Rule on Employer’s Liability for Injuries caused
whoever may make use of the same is responsible by co-worker (Art. 1712)
for the damages which it may cause although it 1. If the death or injury is due to the
may escape or be lost. negligence of a fellow-workman, the
latter and the employer shall be
It makes no distinction as to the kind of animal. solidarily liable for compensation.
This is applicable whether the animal is domestic 2. If a fellow worker’s intentional or
or wild (Vestil v. IAC, G.R. No. 74431, 1989). malicious act is the only cause of the
death or injury, the employer shall not
Exceptions: When the damage was caused: be answerable unless it should be
a. By force majeure – Possessor or user shown that the latter did not exercise
is still liable even if damage is caused due diligence in the selection of
by the negligence of third person supervision of the plaintiff’s fellow-
unless equated with force majeure. worker.

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thing which constitutes the nuisance, without

4. Nuisances (Art. 694) committing a breach of the peace or doing
unnecessary injury. However, it is indispensable
Any act, omission, establishment, business, that the procedure for extrajudicial abatement of a
condition of property, or anything else which: public nuisance by a private person be followed.
(ISAHO)
a. Injuries or endangers the health or 5. Product Liability by Manufacturers (Art. 2187)
safety of others;
b. Shocks, defies or disregards Manufacturers and processors of foodstuffs, drinks,
decency or morality; toilet articles and similar goods shall be liable for
c. Annoys or offends the senses; death or injuries caused by any noxious or harmful
d. Hinders or impairs the user of substances used, although no contractual relation
property; or exists.
e. Obstructs or interferes with the
free passage of any public Requisites: (MUNIF)
highway or street, or any body of a. The defendant is the Manufacturer
water. or processor of foodstuff, drinks,
toilet articles and similar goods
General Rule: Everyone is bound to bear the involved;
habitual or customary inconveniences that result b. Plaintiff Used or consumed such
from the proximity of others, and so long as this level product unaware of the injurious
is not surpassed, he may not complain against condition of the product;
them. c. The defendant used Noxious or
harmful substances in the
Exception: If the prejudice exceeds the manufacturing or processing of the
inconveniences that such proximity habitually foodstuff, drink or toilet articles
brings, the neighbor who causes such disturbance and similar goods;
is held responsible for the resulting damage, being d. Plaintiff’s Injury or death was
guilty of causing nuisance (Velasco v. Manila caused by the product used or
Electric Co., G.R. No. L-18390, 1971). consumed; and
e. The Forms or kinds of damages
Nuisance is either public or private. A public suffered and the amount thereof.
nuisance affects a community or neighborhood or
any considerable number of persons, although the Product Liability Law
extent of the annoyance, danger or damage upon This governs the liability of manufacturers and
individuals may be unequal. A private nuisance is sellers for damages resulting from defective
one that is not included in the foregoing definition products.
(Art. 695).
Liability for defective products may be based on
Nuisance may also be considered nuisance per se fraud, warranty, negligence, or strict liability
or nuisance per accidens. (Aquino, Torts and Damages, supra at 858).
1. Nuisance per se is a nuisance under any and all
circumstances Consumer Act
2. Nuisance per accidens becomes such under A law that is meant to protect the consumers by
certain conditions and circumstances (Salao v. providing for certain safeguards when they
Santos, G.R. No. L-45519, 1939). purchase or use consumer products (Republic Act
No. 7394, Consumer Act).
Liability of Successive Owner or Possessor
Every successive owner or possessor of property 4. ACTS CONTRARY TO LAW
who fails or refuses to abate a nuisance in that
property started by a former owner or possessor is
liable therefore in the same manner as the one who Definition of Acts Contrary to Law
created it. (Art. 696) Every person who, contrary to law, wilfully or
negligently causes damage to another, shall
An action to abate nuisance is imprescriptible. indemnify the latter for the same. (Art. 20)
Any person injured by a private nuisance may abate Article 20 speaks of the general sanction for all other
it by removing, or if necessary, by destroying the provisions of law which do not especially provide for

ATENEO CENTRAL
their own sanction. Thus, anyone who, whether

willfully or negligently, in the exercise of his legal 2. NEGLIGENT
right or duty, causes damage to another, shall
indemnify his victim for injuries suffered thereby.
(Albenson Enterprises Corp. v. Court of Appeals, It involves voluntary acts or omissions which results
G.R. No. 88694, 1993). in injury to others, without intending to cause the
same.
There is a common element under Articles 19 and
21, and that is, the act must be intentional. However, Negligence is defined as the omission of that degree
Article 20 does not distinguish: the act may be done of diligence which is required by the nature of the
either "willfully", or "negligently" (Albenson obligation and corresponds to the circumstances of
Enterprises Corp. v. Court of Appeals, supra). the persons, time and place (Art. 1173)
Under Article 20, there is no requirement that the act 3. STRICT LIABILITY
must be directed at a specific person, but it suffices
that a person suffers damage as a consequence of The person is made liable independent of fault or
a wrongful act of another in order that indemnity negligence upon submission of proof of certain
could be demanded from the wrongdoer. (Petrophil facts. It rests not on negligence but on intentional
Corp. v. Court of Appeals, G.R. No. 122796, 2001) doing of that which a person knows or should know,
in the exercise of ordinary care, may reasonably
5. ACTS CONTRARY TO MORALS cause loss to another in the normal course of events
(Aquino, Torts and Damages, supra at 2).
Any person who wilfully causes loss or injury to
another in manner that is contrary to morals, good An example of a strict liability tort is that provided in
customs or public policy shall compensate the latter Article 2183 of the Civil Code, which states that “the
for the damage (Art. 21). possessor of an animal or whoever may make use
of the same is responsible for the damage which it
This article is designed to fill in the countless gaps may cause, although it may escape or be lost. This
in the statutes, which leave so many victims of moral responsibility shall cease only in case the damage
wrongs helpless, even though they have actually should come from force majeure or from the fault of
suffered material and moral injury. the person who has suffered damage”.
Damages are recoverable even if no positive law The obligation imposed by Article 2183 is not based
was violated. on the negligence or on the presumed lack of
vigilance of the possessor or user of the animal
Elements of Acts Contrary to Morals (LCD) causing the damage. It is based on natural equity
1. Act which legal; and on the principle of social interest that he who
2. Act is contrary to morals, good customs, possesses animals for his utility, pleasure or service
public order or public policy; and must answer for the damage which such animal may
3. The act is done with intent to injure cause (Vestil v. Intermediate Appellate Court, G.R.
No. 74431, 1989).
B. CLASSIFICATION OF TORTS
C. THE TORTFEASOR
1. INTENTIONAL
1. JOINT
It is a tort or wrong perpetrated by one who intends
to do that which the law has declared wrong. The Joint tortfeasors are all the persons who
actor desires to cause the consequences of his act command, instigate, promote, encourage, advise,
or believes the consequences are substantially countenance, cooperate in, aid or abet the
certain to result therefrom. (Safeguard Security commission of a tort, or who approve of it after it is
Agent, Inc. v. Tangco, G.R. No. 165732, 2006). done, if done for their benefit. (Ruks Konsult and
Construction v. Adworld Sign and Advertising Corp.,
It includes Articles 32 and 34, and culpa aquilina G.R. No. 204886, 2015)
under Article 2176 of the Civil Code, or those where
the injured party is granted a right to file an action or Solidary Liability of Joint Tortfeasors
suit independent and distinct from the criminal The responsibility of two or more persons who are
action under Article 33 of the Civil Code (Id.) liable for a quasi-delict is solidaty (Art. 2194).

ATENEO CENTRAL
Construction Corporation v. Court of Appeals, G.R.

Under Article 2194 of the Civil Code, joint tortfeasors No. 159270, 2005)
are solidarily liable for the resulting damage. In other
words, joint tortfeasors are each liable as principals, 2. DIRECT
to the same extend and in the same manner as if
they had performed the wrongful act themselves. Tortfeasor
Whoever by act or omission causes damage to
There is no contribution between joint tortfeasors another, there being fault or negligence, is obliged
whose liability is solidary since both of them are to pay for the damage done. (Art. 2176).
liable for the total damage. Where the concurrent or
successive negligent acts or omissions of two or Every person legally responsible is liable for a tort
more persons, although acting independently, are in committed by him provided it is the proximate cause
combination the direct and proximate cause of a of an injury to another (DE LEON, Torts and
single injury to a third person, it is impossible to Damages at 16)
determine in what proportion each contributed to the
injury and either of them is responsible for the whole Pursuant to a vicarious liability, a corporation may
injury. (People v. Velasco, G.R. No. 195668, 2014). be held directly and primarily liable for tortious acts
of its officers or employees (Philippine National
In PNCC v. Court of Appeals, the Court ruled that Bank v. Court of Appeals, G.R. No. L-2715, 1978).
the failure of the PNCC, in charge of the
maintenance of the expressway, to maintain the Corporate Tortfeasor
NLEX safe for motorists constitutes negligence. A corporation is civilly liable in the same manner as
There should have been sufficient warning devices natural persons for torts, because "generally
considering that there were scattered sugarcane speaking, the rules governing the liability of a
stalks still left along the toll way. PASUDECO’s principal or master for a tort committed by an agent
negligence in transporting sugarcanes without or servant are the same whether the principal or
proper straps and that of PNCC in removing the master be a natural person or a corporation, and
emergency warning devices were two successive whether the servant or agent be a natural or artificial
negligent acts which were the direct and proximate person. All of the authorities agree that a principal
cause of the victim’s injuries. As such, PASUDECO or master is liable for every tort which he expressly
and PNCC are jointly and severally liable. directs or authorizes, and this is just as true of a
corporation as of a natural person. A corporation is
Where several causes combine to produce injuries, liable, therefore, whenever a tortious act is
a person is not relieved from liability because he is committed by an officer or agent under express
responsible for only one of them, it being sufficient direction or authority from the stockholders or
that the negligence of the person charged with injury members acting as a body, or, generally, from the
is an efficient cause without which the injury would directors as the governing body. (Philippine National
not have resulted to as great an extent, and that Bank v. Court of Appeals, G.R. No. L-2715, 1978)
such cause is not attributable to the person injured.
It is no defense to one of the concurrent tortfeasors Doctrine of Corporate Negligence
that the injury would not have resulted from his The doctrine of corporate negligence is the judicial
negligence alone, without the negligence or answer to the problem of allocating hospital’s
wrongful acts of the other concurrent tortfeasors. liability for the negligent acts of health practitioners,
Where several causes producing an injury are absent facts to support the application of
concurrent and each is an efficient cause without respondeat superior or apparent authority.
which the injury would not have happened, the injury
may be attributed to all or any of the causes and The theory supporting the liability of hospital is
recovery may be had against any or all of the based on the recognition that the hospitals stand to
responsible persons although under the benefit from the business of providing services to
circumstances of the case, it may appear that one patients and should therefore be responsible for any
of them was more culpable, and that the duty owed injury or damage that may result under the
by them to the injured person was not the same. No relationship. (PSI v. Agana, G.R. No. 126297, 2007)
actor's negligence ceases to be a proximate cause
merely because it does not exceed the negligence
of other actors. Each wrongdoer is responsible for D. QUASI-DELICT VS. CULPA
the entire result and is liable as though his acts were
the sole cause of the injury (Philippine National
CONTRACTUAL VS. CULPA
CRIMINAL

ATENEO CENTRAL
1. NATURE OF LIABILITY the employer vicariously liable. Thus, it was not

necessary for the court to acquire jurisdiction over
The obligation imposed by Article 2176 of the Civil the employee-driver to hold the employers liable for
Code on quasi-delicts is demandable not only for damages. (Cerezo v. Tuazon, G.R. No. 141538,
one’s own acts or omissions, but also for those of 2004)
persons for whom one is responsible (Art. 2180).
6. PROXIMATE CAUSE
A person is liable not only for his own torts, but also
for those committed by others with whom he has a a. CONCEPT
certain relationship, or for whom he is responsible.
Definition
The basis of liability is pater familias or the failure of That cause which, in natural and continuous
the persons mentioned therein to exercise due care sequence, unbroken by any efficient intervening
and vigilance over the acts of subordinates to cause, produces the injury, and without which the
prevent the damage. (Filcar Transport Services v. result would not have occurred. (Vda. de Bataclan
Espinas, G.R. No. 174156, 2012) v. Medina, G.R. No. L-10126, 1957)
NOTE: Vicarious liability is not governed by the The proximate cause of the injury is not necessarily
doctrine of respondeat superior. Under the doctrine the immediate cause of, or the cause nearest in time
of respondeat superior, the master is liable in every to, the injury. It is only when the causes are
case and unconditionally; the negligence of the independent of each other that the nearest is to be
servant is conclusively presumed to be the charged with the disaster. So long as there is a
negligence of the master. natural, direct and continuous sequence between
the negligent act and the injury that it can
However, in vicarious liability, persons are made reasonably be said that but for the act the injury
vicariously liable not because of the negligent or could not have occurred, such negligent act is the
wrongful act of the person for whom they are proximate cause of the injury, and whoever is
responsible, but because of their own negligence responsible therefore is liable for damages resulting
(i.e. liability is imposed on the employer because he therefrom. (Brinas v. People of the Philippines, G.R.
failed to exercise due diligence in the selection and L-30309, 1983)
supervision of his employees).
Proximate Cause Inapplicable in Breach of
Whenever an employee’s negligence causes Contract
damage or injury to another, there instantly arises a Such doctrine only applies in actions for quasi-
presumption juristantum that the employer failed to delicts, not in breach of contract. It is a device for
exercise diligentissimi patris families in the selection imputing liability to a person where there is no
(culpa in eligiendo) or supervision (culpa in relation between him and another party. (Sps.
vigilando) of its employees. To avoid liability for a Guanio v. Makati Shangri-La Hotel, G.R. No.
quasi-delict committed by its employee, an 190601, 2011)
employer must overcome the presumption by
presenting convincing proof that he exercised the But note that in the case of Bataclan v. Medina, the
care and diligence of a good father of a family in the court used the doctrine of proximate cause in the
selection and supervision of his employee. (Delsan case of breach of contract of carriage but only to
Transport v. C&A Construction, G.R. No. 156034, determine the extent of liability. (Bataclan v.
2003; Light Rail Transit Association v. Navidad, Medina, G.R. No. L-10126, 1957)
G.R. No. 145804, 2003)
Necessary Link
Exception The necessary link or the causal relation between
The doctrine of respondeat superior is applicable in: the proximate cause and the injury must be directly
1. Liability of employers under Art. 103 of shown and established to overcome the burden of
the Revised Penal Code proof required, and to determine liability.
2. Liability of a partnership for the tort
committed by a partner. NOTE: If plaintiff's negligence is only contributory,
Primary Liability Under Article 2180 he is considered partly responsible only. Plaintiff
The Supreme Court held that an employee-driver may still recover from the defendant but the award
was neither an indispensable nor a necessary party of damages may be reduced by the courts in
in an action for damages filed against the employers proportion to his own negligence. (Bank of America
under Article 2176 in relation to Article 2180 to hold

ATENEO CENTRAL
NT & SA vs. Philippine Racing Club, G.R. No. by which the injury was made possible, if there
150228, 2009) intervened between such prior or remote cause and
the injury a distinct, successive, unrelated, and
Efficient Intervening Cause efficient cause of the injury, even though such injury
An independent intervening cause as one which is would not have happened but for such condition or
so distinct as to sever the connection of cause and occasion. If no danger existed in the condition
effect between the negligent act and the injury. except because of the independent cause, such
(Bartels v. City of Williston, 629 F.2d 509, 1980) condition was not the proximate cause. And if an
independent negligent act or defective condition
An intervening cause, to be considered efficient, sets into operation the instances, which result in
must be one not produced by a wrongful act or injury because of the prior defective condition, such
omission, but independent of it, and adequate to subsequent act or condition is the proximate cause.
bring the injurious results. (Manila Electric Co. v. Remoquillo, G.R. No. L-8328,
1956).
Any cause intervening between the first wrongful
cause and the final injury which might reasonably Remote Cause
have been foreseen or anticipated by the original That cause which some independent force merely
wrongdoer is not such an efficient intervening cause took advantage of to accomplish something not the
as will relieve the original wrong of its character as natural effect thereof. It cannot be considered the
the proximate cause of the final injury. (Abrogar v. legal or proximate cause of the damage. (Aquino,
Cosmos Bottling Co., G.R. No. 164749, March 15, Torts and Damages, p. 318, 2013)
2017)
Concurrent Cause
If an independent cause intervenes, which is of itself Where several causes producing an injury are
sufficient to produce the result, it is regarded as concurrent and each is an efficient cause without
proximate cause, and the originator of the first cause which the injury would not have happened, the injury
is relieved from liability. (Michael v. U.S., 338 F.2d may be attributed to all or any of the causes and
219, 1964) recovery may be had against any or all of the
responsible persons although under the
Immediate Cause circumstances of the case, it may appear that one
The cause nearest in time to the injury. of them was more culpable, and that the duty owed
by them to the injured person was not the same. No
Intervening Cause actor's negligence ceases to be a proximate cause
If the intervening cause is one which in ordinary merely because it does not exceed the negligence
human experience is reasonably to be anticipated of other actors. Each wrongdoer is responsible for
or one which the defendant has reason to anticipate the entire result and is liable as though his acts were
under the particular circumstances, the defendant the sole cause of the injury. (Ruks Konsult and
may be negligent among other reasons, because of Construction v. Adworld Sign and Advertising Corp.,
failure to guard against it; or the defendant may be G.R. No. 204886, 2015)
negligent only for that reason.
Legal Cause/Proximate Cause; Test of
One who sets a fire may be required to foresee that Foreseeability
an ordinary, usual and customary wind arising later Where the particular harm was reasonably
will spread it beyond the defendant's own property, foreseeable at the time of the defendant’s
and therefore to take precautions to prevent that misconduct, his act or omission is the legal cause
event. The person who leaves the combustible or thereof. Foreseeability is the fundamental test of the
explosive material exposed in a public place may law of negligence. To be negligent, the defendant
foresee the risk of fire from some independent must have acted or failed to act in such a way that
source. In all of these cases there is an intervening an ordinary reasonable man would have realized
cause combining with the defendant's conduct to that certain interests of certain persons were
produce the result and in each case the defendant's unreasonably subjected to a general but definite
negligence consists in failure to protect the plaintiff class of risk which made the actor’s conduct
against that very risk. (Phoenix Construction v. IAC, negligent, it is obviously the consequence for the
G.R. No. L-65295, 1987). actor must be held legally responsible. Otherwise,
the legal duty is entirely defeated. Accordingly, the
A prior and remote cause cannot be made the basis generalization may be formulated that all particular
of an action if such remote cause did nothing more consequences, that is, consequences which occur
than furnish the condition or give rise to the occasion in a manner which was reasonably foreseeable by

ATENEO CENTRAL
the defendant at the time of his misconduct are "Cause" and "condition" still find occasional mention
legally caused by his breach of duty. (Achevara v. in the decisions; but the distinction is now almost
Ramos, G.R. No. 175172, 2009) entirely discredited. So far as it has any validity at
all, it must refer to the type of case where the forces
Emergency Rule Doctrine set in operation by the defendant have come to rest
Under the emergency rule, one who suddenly finds in a position of apparent safety, and some new force
himself is a place of danger and is required to act intervenes. But even in such cases, it is not the
without time to consider the best means that may be distinction between "cause" and "condition" which is
adopted to avoid the impending danger is not guilty important but the nature of the risk and the character
of negligence even if fails to adopt what of the intervening cause.
subsequently and upon reflection may appear to (Phoenix Construction v. IAC, G.R. L-65295, 1987)
have been a better method unless the emergency,
he finds himself in is brought by his own negligence. b. DOCTRINE OF LAST CLEAR
(Gan v. Court of Appeals G.R. No. L-44264, 1988) CHANCE
Elements Last Clear Chance
The emergency rule or sudden peril doctrine can be Also known as the “Doctrine of Discovered Peril”
broken down into elements namely:
i. Defendant found himself in a place of Even though a person’s own acts may have placed
danger; him in a position of peril and an injury results, the
ii. Defendant had no time to consider the best injured is entitled to recover if the defendant thru the
means to avoid such danger; and exercise of reasonable care and prudence might
iii. Defendant was not negligent. have avoided injurious consequences to the
plaintiff.
Case Law Has Discredited the Distinction
Between Cause and Condition Requisites:
The distinction between cause and condition has 1. Plaintiff was in a position of danger by his
now been entirely discredited. own negligence
2. Defendant knew of such position of the
In Phoenix Construction v. IAC, the Court ruled: plaintiff
Many courts have sought to distinguish between the 3. Defendant had the last clear chance to avoid
active "cause" of the harm and the existing the accident by exercise of ordinary care but
"conditions" upon which that cause operated. If the failed to exercise such last clear chance and
defendant has created only a passive static 4. Accident occurred as proximate cause of
condition, which made the damage possible, the such failure
defendant is said not to be liable. But so far as the
fact of causation is concerned, in the sense of Who may invoke – Plaintiff
necessary antecedents which have played an
important part in producing the result it is quite When the doctrine is not applicable
impossible to distinguish between active forces and a. Joint tortfeasors
passive situations, particularly since, as is invariably b. Defendants concurrently negligent
the case, the latter are the result of other active c. As against 3rd persons
forces which have gone before.
7. VICARIOUS LIABILITY
The defendant who spills gasoline about the
premises creates a "condition," but the act may be
The obligation imposed by Article 2176 of the Civil
culpable because of the danger of fire. When a
Code on quasi-delicts is demandable not only for
spark ignites the gasoline, the condition has done
one’s own acts or omissions, but also for those of
quite as much to bring about the fire as the spark;
persons for whom one is responsible (Art. 2180).
and since that is the very risk, which the defendant
has created, the defendant will not escape
The basis of liability is pater familias or the failure of
responsibility. Even the lapse of a considerable time
the persons mentioned therein to exercise due care
during which the "condition" remains static will not
and vigilance over the acts of subordinates to
necessarily affect liability; one who digs a trench in
prevent the damage (Filcar Transport Services v.
the highway may still be liable to another who fans
Espinas, G.R. No. 174156, 2012).
into it a month afterward.
Persons Vicariously Liable

ATENEO CENTRAL
FATHER/ MOTHER FOR THEIR MINOR authorities over the student continues (Amadora v.
CHILDREN Court of Appeals, G.R. No. L-47745, 1988).
Reason: The liability is a necessary consequence OWNERS/MANAGERS OF ESTABLISHMENT

of the parental authority they exercise over them. OR ENTERPRISE FOR THEIR EMPLOYEES
The liability under Article 2180 also extends to other
persons exercising parental authority like judicially They are liable for damages caused by their
appointed guardians and adopters (AQUINO, Torts employees in the service of the branches in which
and Damages, 730-31). they are employed, or on the occasion of their
functions. It does not extend to acts of strangers
Adopters who committed unauthorized acts and in doing so,
The Court does not consider that retroactive effect caused damage to others (Art. 2180, par. 4).
may be given to the decree of adoption so as to
impose a liability under the adopting parents Managers
(Tamago v. Court of Appeals, G.R. No. 85044, In Article 2180, “managers” is used in the sense of
1992). an employer. A managerial employee within the
contemplation of the Labor Code is not a manager
GUARDIANS ARE LIABLE FOR THE MINORS under Article 2180 because he himself may be
AND INCAPACITATED PERSONS UNDER regarded as an employee or dependiente of the
THEIR AUTHORITY employer (Philippine Rabbit Bus Lines, Inc. v. Phil.
American Forwarders, Inc., G.R. No. L-25142,
Incompetent includes persons suffering the penalty 1975).
of civil interdiction or who are hospitalized lepers,
prodigals, deaf and dumb who are unable to read NOTE: Co-employees are not liable even if they
and write, those who are of unsound mind, even supervise the employee.
though they have lucid intervals, and person’s not
being of unsound mind by reason of age, disease, EMPLOYERS FOR THEIR EMPLOYEES AND
weak mind and other similar causes, cannot, without HOUSEHOLD HELPERS
outside aid, take care of themselves and manage
their property, becoming thereby an easy prey for Although the employer is not the actual tortfeasor,
deceit and exploitation (RULES OF COURT, Rule the law makes him vicariously liable on the basis of
92, Sec. 2). the civil law principle of pater familias for failure to
exercise due care and vigilance over the acts of
SCHOOLS, ADMINISTRATORS AND one’s subordinates to prevent damage to another.
TEACHERS, AND INDIVIDUALS, ENTITIES OR (Filcar Transport Service v. Espinas, supra)
INSTITUTIONS ENGAGED IN CHILD CARE
HAVING SPECIAL PARENTAL AUTHORITY When an injury is caused by the negligence of the
OVER CHILDREN employee, there instantly arises a presumption of
law that there was negligence on the part of the
Extent of Special Parental Authority master or employer either in the selection of the
It can be exercised only over minors while under servant or employee, or in supervision over him after
their supervision, instruction or custody, including selection or both. The liability of the employer under
while in authorized activities, whether inside or Article 2180 is direct and immediate; it is not
outside the school, entity or institution (AQUINO, conditioned upon prior recourse against the
Torts and Damages, 665). negligent employee and a prior showing of the
insolvency of such employee. (J. Hernando:
Custody Jessica P. Maitim v. Maria Theresa P. Aguila, G.R.
The protective and supervisory custody that the No. 218344, 2022)
school and its heads and teachers exercise over the
pupils and students for as long as they are in STATE FOR THEIR SPECIAL AGENTS
attendance in school, including recess time (Palisoc
v. Brillantes, G.R. No. L-29025, 1971). It is a basic constitutional rule that the State cannot
be sued without its consent. Consent of the State to
As long as it can be shown that the student is in the be sued can be manifested through a special law or
school premises in pursuance of a legitimate general law allowing the State to be sued.
student objective, in the exercise of a legitimate (AQUINO, Torts and Damages, 718)
right, and even in the enjoyment of a legitimate
student privilege, the responsibility of the school Special Agent

ATENEO CENTRAL
A special agent is one who receives a definite and

fixed order or commission, foreign to the exercise of The State in the performance of its governmental
the duties of his office; task assigned must be functions is liable only for the tortuous acts of its
foreign from/to his usual government functions. special agents. On the other hand, the State
o If agent is not a public official and is becomes liable as an ordinary employer when
commissioned to perform non- performing its proprietary functions. (J. Hernando:
governmental work, state is liable as Bank of the Philippine Islands v. Central Bank of the
ordinary employer. Philippines, G.R. No. 197593, 2020)
If government commissions a private individual for a TEACHERS/HEAD OF ESTABLISHMENT OF

special government task, it is acting through a ARTS AND TRADES FOR THEIR
special agent and will be liable for tort under Article PUPILS/STUDENTS/APPRENTICES (ART. 2180,
2180. NCC)
TABLE ON VICARIOUS LIABILITY
PERSON FOR REQUIREMENTS

PERSON
WHOM FOR VICARIOUS NATURE OF
VICARIOUSLY DEFENSES
VICARIOUSLY LIABILITY TO LIABILITY
LIABLE
LIABLE ATTACH
Father and mother
exercise joint
Child lives in their parental authority
company; AND is over their minor
PARENT/S (JOINT Children below under their parental children. Their
PARENTAL 18. authority. liability is direct
AUTHORITY based Diligence of a good
on Art. 221, Family (Art. 221, Family father of a family to and primary, not
(Art.2180, in relation to
Code) Code) Art.221, Family Code; prevent damage. subsidiary.
FATHER, IN CASE Tamargo v. CA, G.R. No.
OF DEATH OR 85044, 1992) (Art. 2180; Exconde v. (Art. 211, Family
Code; Libi v. IAC, G.R.
INCAPACITY, THE Capuno, G.R. No. L-
10134, 1957) No. 70890, 1992)
MOTHER (Art.
Children 18 to
2180) “Child” lives in their Direct and primary.
21.
company.
(Art. 2180 in relation to
(Art. 2180, in Art. 236, ¶ 3, Family
(Art.2180, in relation to
relation to Art. 236 ¶ Art. 236, ¶ 3, Family Code) Code)
3, Family Code)
Principal and
solidary.
SCHOOLS, (Art. 219, Family
ADMINISTRATORS Code)
AND TEACHERS,
Child is under their Exercised the
INDIVIDUALS, General Rule:
Children below supervision, proper diligence
ENTITIES, OR Parents are not
18. instruction or custody required under the
INSTITUTIONS liable; child was in
at the time the tort is particular
ENGAGED IN school; not in their
(Arts. 218- 219, committed. circumstances.
CHILD CARE Family Code) custody
HAVING SPECIAL
(Art. 218, Family Code) (Art. 219, Family Code)
PARENTAL (Cuadra vs. Monfort,
AUTHORITY OVER G.R. No. L-24101,
1970)
CHILDREN
Exception:
Parents, judicial
guardians or

ATENEO CENTRAL
persons exercising
substitute parental
authority shall be
subsidiarily liable.
(Art. 219, Family
Code)
Minors or Under their authority Diligence of a good
incapacitated and live in their father of a family to Direct and primary.
GUARDIANS persons. company. prevent damage.
(Art. 2180)
(Art. 2180) (Art. 2180) (Art. 2180)
Employees in That the employee is
the service of liable for a QD;
the branches in EER exists; and
which they are employee was acting No EER.
employed or on within the scope of his
(Jayme v Apostol, G.R.
the occasion of assigned tasks when No. 136609, 2008) –
their functions. the tort was municipality, not the
committed, or that the mayor is the employer
(Art. 2180(4)) injurious act was of the driver).
committed at a time
the employee was EE acted beyond
performing his the scope of
authority (i.e. when Direct and primary.
functions.
the EEs are on (Art. 2180)
(Dela Llana v. Biong, G.R. strike).
Employees and No. 182356, 2013;
EMPLOYERS, Castilex Industrial Corp.
NOTE: “Manager”
household (Universal Aquarius v.
OWNERS, AND vs. Vasquez, G.R. No. QC Human Resources
means employer.
helpers acting 132266, 1999; Martin v.
MANAGERS Management
within the scope CA, G.R. No. 82248, Corporation, G.R. No. (Philippine Rabbit Bus
of their assigned 1992; Jayme v. Apostol, 155990, 2007) Lines, Inc. v.
tasks even G.R. No. 136609, 2008) Philippine American
Forwarders, Inc., G.R.
though the Diligence of a good
NOTE: “Acting within No. L-25142, 1975)
employer is not father of a family in
engaged in any the scope of assigned the selection and
business or tasks” – includes any supervision of
industry. act done in the employees.
furtherance of the
(Art. 2180(5)) employer’s business. (Mercury Drug v.
Huang, G.R. No.
(Filamer Christian 172122, 2007; Sanitary
Institute v. IAC, G.R. Steam vs. CA, G.R. No.
No.75112 1990) (e.g., 119092, 1998)
janitor who drove vehicle
for the benefit of the
employer).
Doctors and [3 THEORIES] 1. Elements of the
hospital 3 theories are
employees. 1. EER (Art.2180) not present;
and
(Ramos v. CA G.R. 2. Doctrine of 2. Due diligence Direct and primary.
No. 124354, 1999 Apparent in the selection
HOSPITALS and 2002; Nogales (Casumpang v.
Authority or and Cortejo, G.R. No.
v. Capitol Medical
Center G.R. No.
Ostensible supervision (if 171127, 171217, &
142625, 2006; Agency or EER). 17122, 2015)
Casumpang v. “Holding out”
Cortejo, G.R. No. Reliance (Art. 2180(5); Nogales
171127, 171217, & (Nogales vs. Capitol vs. Capitol Medical
17122, 2015) Medical Center, G.R. Center, G.R. No.

ATENEO CENTRAL
No. 142625, 2006; 142625, 2006;

Professional Professional Services
Services Inc.v. Inc.v. Agana G.R. No.
Agana G.R. No. 126297, 2007; G.R. No.
126297, 2007; G.R. 126467, 2008; G.R. No.
No. 126467, 2008; 127590, 2010)
G.R. No. 127590,
2010)
3. Doctrine of
Corporate
Negligence:
Hospital is liable
for its own
negligence; not
vicariously for the
doctor’s or
medical
personnel’s
negligence.
(Professional
Services Inc.v.
Agana, supra)
Special agent – RULES:

i.e., one who
receives a Public officials (PO)
definite and performing
fixed order or functions of his
commission, office – State is
foreign to the immune from suit.
exercise of the Public official liable
duties of his under Art.2176.
office if he is a Observed diligence
special official. PO specially of a good father of a
commissioned to family to prevent
(Art.2180; Merritt v. perform a task damage.
GPI, G.R. No. L- foreign to his office
11154, 1916) – State liable; PO is a (Art.2180)
special agent. Direct and primary.
Government Observed diligence
STATE Owned and Private individual (Art. 2180; Fontanilla
of a good father of a v. Maliaman, G.R.
Controlled (PI) commissioned family in the Nos. 55963 & 61045,
Corporations by the State to selection and 1991)
(GOCCs) – perform non- supervision of
When the governmental employees.
government functions – State is
enters into a liable as an employer. (Fontanilla v.
commercial Maliaman, G.R. No. L-
business, it PI commissioned to 55963, 1989)
abandons its perform a special
sovereign governmental task
capacity and is (special agent) –
to be treated like State liable.
any other private
corporation. Employees of
government offices
(Manila Hotel performing
Employees proprietary
Association v.

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Manila Hotel functions – State

Company, G.R. L- liable as an employer.
48524, 1941)
(Fontanilla v. Maliaman,
G.R. No. L-55963, 1989)
Direct and primary.
NOTE: Applies
whether the
institution is
Student is in the academic or not.
school premises in
pursuance of a (Amadora v. CA,
legitimate student supra)
Adult pupils and objective, in the
students (for exercise of a Basis of liability
teachers). legitimate student of teacher and
right, and even in the head = close
Adult enjoyment of a supervisory
apprentices (for legitimate student relationship; ability
heads of privilege, the to instill discipline.
establishments responsibility of the
of arts and school authorities Teacher was not General Rule:
trades). over the student negligent. School is not
continues. liable.
TEACHERS/ (Art.2180; Amadora NOTE: Art.2180
HEADS OF v. CA, G.R. No. L-
Indeed, even if the does not apply Exception: When
47745, 1988) when the tort was it is being held
ESTABLISHMENTS student should be
OF ARTS AND doing nothing more not committed by a liable as an
If pupil, student student. employer.
TRADES than relaxing in the
or apprentice is
a minor, apply campus in the
(Aquinas School vs. (Amadora v. CA,
Art. 218, Family company of his Sps. Inton, G.R. No. supra)
Code. classmates and 184202, 2011)
friends and enjoying
School has an
NOTE: Pupil the ambience and
implied contractual
need not live or atmosphere of the
duty to maintain a
board with the school, he is still
safe environment
teacher. within the custody and
conducive for
subject to the
learning. If it
(Palisoc v.Brillates, discipline of the
breaches that duty
G.R. No. L-29025, school authorities
through
1971) under the provisions
negligence, it may
of Art. 2180.
be held liable
(Amadora v. CA, G.R. No. under Art. 2176.
L-47745, 1988)
(PSBA v. CA, G.R. No.
84698, 1992, in
relation to Air France
vs. Carrascoso, G.R.
No. L-21438, 1966).
accident is such as in the ordinary course of things

8. RES IPSA LOQUITUR does not happen if those who have the management
use proper care, it affords reasonable evidence, in
Definition the absence of an explanation by the defendant, that
Where the thing which causes injury is shown to be the accident arose from want of care. (Layugan v.
under the management of the defendant, and the IAC, G.R. 73998, 1998)

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Res ipsa loquitur is literally translated as "the thing of common knowledge. Ordinarily, only experienced
or the transaction speaks for itself." The doctrine res physicians and surgeons are competent to testify on
ipsa loquitur means that "where the thing which whether a patient has been treated with reasonable
causes injury is shown to be under the management care. However, where common knowledge and
of the defendant, and the accident is such as in the experience teach that a resulting injury would not
ordinary course of things does not happen if those have occurred if due care had been exercised (e.g.
who have the management use proper care, it leaving gauzes inside the body of the patient after
affords reasonable evidence, in the absence of an an operation, operating on the wrong part of the
explanation by the defendant, that the accident body, etc.), an inference of negligence may be
arose from want of care." It is simply "a recognition drawn giving rise to an application of the doctrine of
of the postulate that as a matter of common res ipsa loquitur without medical evidence. (Ramos
knowledge and experience, the very nature of v. Court of Appeals, G.R. No. 124354, 1999)
certain types of occurrences may justify an
inference of negligence on the part of the person Standard of Care required from the Medical
who controls the instrumentality causing the injury in Profession
the absence of some explanation by the defendant Given these safeguards, there is no need to
who is charged with negligence. It is grounded in the expressly require of doctors the observance of
superior logic of ordinary human experience and on “extraordinary” diligence. As it is now, the practice
the basis of such experience or common of medicine is already conditioned upon the highest
knowledge, negligence may be deduced from the degree of diligence. The standard contemplated for
mere occurrence of the accident itself. (J. doctors is simply the reasonable average merit
Hernando: Jessica P. Maitim v. Maria Theresa P. among ordinarily good physicians. That is
Aguila, G.R. No. 218344, 2022) reasonable diligence for doctors or, the reasonable
skill and competence that a physician in the same or
Elements of Res Ipsa Loquitur similar locality should apply.
1. The accident was of a kind which does not
ordinarily occur unless someone is Liability of Hospital in Cases of Medical
negligent; Negligence
2. The instrumentality or agency which The Court has applied the doctrine of agency by
caused the injury was under the exclusive estoppel to hold hospitals liable for the negligent
control of the person charged with acts of physicians based on:
negligence; 1. The patient accepts the services of the
3. Injury suffered must have not been due to physician; and
any voluntary action or contribution on the 2. The patient believes that the physicians are
person injured (D.M. Consunji v. Court of agents of the hospital.
Appeals, G.R. No. 137873, 2001);
4. It must appear that the injured party had no Doctrine of Informed Consent
knowledge or means of knowledge as to The doctrine of informed consent requires a doctor
the cause of the accident, or that the party to inform his patient of the material risks associated
to be charged with negligence has superior with a medical procedure.
knowledge or opportunity for explanation of
the accident. (Malayan Insurance Co. vs. Elements of a malpractice claim based on the
Rodelio Alberto and Enrico Reyes, G.R. doctrine of informed consent
No. 194320) 1. The physician had a duty to disclose
material risks;
The doctrine of res ipsa loquitur finds no application 2. He failed to disclose or inadequately
if there is direct proof of absence or presence of disclosed those risks;
negligence. If there is sufficient proof showing the 3. As a direct and proximate result of the
conditions and circumstances under which the injury failure to disclose, the patient consented to
occurred, then the creative reason for the said the treatment, which he or she would
doctrine disappears. (Huang v. Philippine Hoteliers otherwise not have consented to; and
Inc., G.R. No. 180440, 2012) 4. The patient was injured by the proposed
treatment. (Li v. Soliman, G.R. No. 165279,
Medical Malpractice; Doctrine of Common 2011)
Knowledge
The general rule on the necessity of expert 9. DAMNUM ABSQUE INJURIA
testimony applies only to such matters clearly within
the domain of medical science, and not to matters

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There can be damage without injury in those

instances in which the loss or harm was not the When the plaintiff's own negligence was the
result of a violation of a legal duty. In such cases, immediate and proximate cause of his injury, he
the consequences must be borne by the injured cannot recover damages. But if his negligence was
person alone, the law affords no remedy for only contributory, the immediate and proximate
damages resulting from an act which does not cause of the injury being the defendant's lack of due
amount to a legal injury or wrong. These situations care, the plaintiff may recover damages, but the
are often called damnum absque injuria. (BPI courts shall mitigate the damages to be awarded.
Express Card Corporation v. Court of Appeals, G.R. (Art. 2179)
No. 120639)
Contributory negligence is conduct on the part of the
Damage v. Damages v. Injury injured party, contributing as a legal cause to the
There is a material distinction among damage, harm he has suffered, which falls below the
damages and injury. Injury is the illegal invasion of standard which he is required to conform for his own
a legal right; damage is the loss, hurt or harm which protection. (National Power Corporation v.
results from the injury; and damages are the Casionan, G.R. No. 165969)
recompense or compensation awarded for the
damage suffered. (Custodio v. Court of Appeals, ASSUMPTION OF RISK
G.R. No. 116100, 1996)
Volenti Non Fit Injuria
When Not Applicable That to which a person assents is not deemed in law
The principle of damnum absque injuria does not an injury.
apply when there is an abuse of a person’s right.
(Cebu Country Club, Inc., v. Elizagaque, G.R. No. The doctrine of assumption of risk means that one
160273, 2008) who voluntarily exposes himself to an obvious,
known and appreciated danger assumes the risk of
Mistakes by public officers are not actionable in the injury that may result therefrom.
absence of malice or gross negligence amounting to
bad faith. (Farolan v. Solmac Marketing As a defense in negligence cases, therefore, the
Corporation, G.R. No. 83589) doctrine requires the concurrence of three elements,
namely: (1) the plaintiff must know that the risk is
10. DEFENSES present; (2) he must further understand its nature;
and (3) his choice to incur it must be free and
PLAINTIFF’S NEGLIGENCE IS THE PROXIMATE voluntary. (Abrogar v. Cosmos Bottling Co., G.R.
CAUSE OF THE INJURY No. 164749)
When the plaintiff's own negligence was the NOTE: Assumption of Risk Defense is inapplicable
immediate and proximate cause of his injury, he if an emergency is found to exist, if the life or
cannot recover damages. But if his negligence was property of another is in peril, or when he seeks to
only contributory, the immediate and proximate rescue his endangered property. (Ilocos Norte
cause of the injury being the defendant's lack of due Electric Company v. Court of Appeals, 179 SCRA 5)
care, the plaintiff may recover damages, but the
courts shall mitigate the damages to be awarded. LAST CLEAR CHANCE
(Art. 2179.)
Also known as "The Doctrine of Discovered Peril"
Test in determining if plaintiff’s negligence was
the proximate cause of his own injury The law is that the person who has the last fair
Where he contributes to the principal occurrence, as chance to avoid the impending harm and fails to do
one of its determining factors, he cannot recover. so is chargeable with the consequences, without
Where, in conjunction with the occurrence, he reference to the prior negligence of the other party.
contributes only to his own injury, he may recover (Picart v. Smith, 37 Phil. 809)
the amount that the defendant responsible for the
event should pay for such injury, less a sum deemed Where both parties are negligent but the negligent
a suitable equivalent for his own imprudence. act of one is appreciably later in time than that of the
(Taylor v. Manila Electric Railroad and Light Co., 16 other, or where it is impossible to determine whose
Phil. 8) fault or negligence brought about the occurrence of
the incident, the one who had the last clear
CONTRIBUTORY NEGLIGENCE opportunity to avoid the impending harm but failed

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to do so, is chargeable with the consequences Quasi-delict 4 years from the time the cause
arising therefrom. of action arises
Stated differently, the rule is that the antecedent
negligence of a person does not preclude recovery FORTUITOUS EVENT
of damages caused by the supervening negligence
of the latter, who had the last fair chance to prevent No person shall be responsible for those events
the impending harm by the exercise of due diligence which cannot be foreseen, or which though foreseen
(Canlas v. Court of Appeals, G.R. 112160, 2000). were inevitable. (Art.1174)
Requisites: Requisites
1. Plaintiff was in a position of danger by his 1. The cause of the Unforeseen and
own negligence unexpected occurrence, or of the failure of
2. Defendant knew of such position of the the debtor to comply with his obligation,
plaintiff must be independent of the human will;
3. Defendant had the last clear chance to avoid 2. It must be Impossible to foresee the event
the accident by exercise of ordinary care but which constitutes caso fortuito or if it can be
failed to exercise such last clear chance and foreseen it must be impossible to avoid
4. Accident occurred as proximate cause of 3. The occurrence must be such as to render
such failure it Impossible for the debtor to fulfill his
obligation in a normal manner
Who may invoke – Plaintiff 4. The obligor must be Free from any
participation in the aggravation of the injury
When the doctrine is not applicable resulting to the creditor.
1, Absent preceding negligence on the part of the
plaintiffs, the doctrine of last clear chance cannot be General Rule: Fortuitous Event is a complete
applied. defense and a person is not liable if the cause of the
2. The doctrine does not apply where the party damage is a fortuitous event.
charged is required to act instantaneously of if the
emergency rule applies. (Achevara v. Ramos, G.R. Exception: It is merely a partial defense and the
No. 175172) courts may mitigate the damages if the loss would
3. The principle of last clear chance is inapplicable have resulted in any event. (Art. 2215 [4])
in a breach of contract, as it only applies in a suit
between the owners and drivers of two colliding NOTE: A person may still be liable for a fortuitous
vehicles. It does not arise where a passenger event if such person made an assumption of risk.
demands responsibility from the carrier to enforce its
contractual obligations. (Tiu v. Arriesgado, 437 WAIVER
SCRA 426)
4. Joint tortfeasors Rights may be waived, unless the waiver is contrary
5. Defendants concurrently negligent to law, public order, public policy, morals, or good
6. As against 3rd persons (Aquino, Torts and customs, or prejudicial to a third person with a right
Damages, p. 230, 2005) recognized by law. (Art. 6)
PRESCRIPTION A waiver, to be valid and effective, must in the first

place be couched in clear and unequivocal terms
Period commences to run from the time the cause which leave no doubt as to the intention of a person
of action arises (i.e. at the time of the commission of to give up a right or benefit which legally pertains to
an act or omission violative of the right of the him. (Gatchalian v. Delim, 203 SCRA 126)
plaintiff) (Kramer v. CA, G.R. No. L-83524, 1989)
Elements
Prescriptive Periods e. Person making the waiver possesses that
10 years right
When the right of action accrues: f. Has capacity and power to dispose of that
Upon a written contract; right
Action for
Upon an obligation created by g. Waiver must be clear and unequivocal
damages
law; h. Not contrary to law, public policy (Sanico v.
Upon a judgment. Colipano, G.R. No. 209969)
Exceptions:

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4. Waiver of an action for future fraud bad faith. (Farolan v. Solmac Marketing
(including gross negligence) is void (Art. Corporation, G.R. No. 83589)
1171).
5. Exemplary damages cannot be waived in 11. NEGLIGENCE
advance (Art. 2235).
6. Waiver must not be contrary to public The omission of that degree of diligence which is
policy. required by the nature of the obligation and
7. One’s consent to a waiver must not be corresponds to the circumstances of the persons,
vitiated (Gatchalian v. Delim, G.R. No. L- time and place. (Art. 1173)
56487, 1991).
The test by which to determine the existence of
EMERGENCY negligence in a particular case may be stated as
follows: Did the defendant, in doing the alleged
One who suddenly finds himself in a place of danger negligent act, use that reasonable care and caution
and is required to act without time to consider the which an ordinarily prudent person would have used
best means that may be adopted to avoid the in the same situation? If not, then he is guilty of
impending danger, is not guilty of negligence, if he negligence. (Picart v. Smith, 37 Phil. 809)
fails to adopt what subsequently and upon reflection
may appear to have been a better method, unless Negligence has been defined as “the failure to
the emergency in which he finds himself is brought observe for the protection of the interests of another
about by his own negligence. (Gan v. Court of person that degree of care, precaution, and
Appeals, G.R. No. L-44264, 1988) vigilance which the circumstances justly demand,
whereby such other person suffers injury." (Cusi v.
An individual will nevertheless be subject to liability Philippine National Railways, G.R. No. L-29889)
if the emergency was brought about by his own
negligence. (Valenzuela v. CA, G.R. Nos. 115024 & Good Father of a Family or Reasonably Prudent
117944, 1996) Person
Every person obliged to give something is also
NOTE: Applicable only to situations that are sudden obliged to take care of it with the proper diligence of
and unexpected such as to deprive the actor of all a good father of a family, unless the law or the
opportunity for deliberation (absence of stipulation of the parties requires another standard
foreseeability); the action shall still be judged by the of care. (Art. 1163)
standard of the ordinary prudent man.
Diligence of a “good father of a family" is the
DAMNUM ABSQUE INJURIA standard of diligence expected of, among others,
usufructuaries, passengers of common carriers,
There can be damage without injury in those agents, depositaries, pledgees, officious managers,
instances in which the loss or harm was not the and persons deemed by law as responsible for the
results of a violation of a legal duty. In such cases, acts of others. It requires only that diligence which
the consequences must be borne by the injured an ordinary prudent man would exercise with regard
person alone, the law affords no remedy for to his own property. (Philippine National Bank v.
damages resulting from an act which does not Santos, G.R. No. 208293 & 208295)
amount to a legal injury or wrong. These situations
are often called damnum absque injuria (BPI b. STANDARD OF CARE
Express Card Corporation vs. Court of Appeals,
G.R. No. 120639)
There is no obligation on an engine driver to stop, or
even to slow down his engine, when he sees an
There is a material distinction between damages
adult pedestrian standing or walking on or near the
and injury. Injury is the illegal invasion of a legal
track, unless there is something in the appearance
right; damage is the loss, hurt or harm which results
or conduct of the person on foot which would cause
from the injury; and damages are the recompense
a prudent man to anticipate the possibility that such
or compensation awarded for the damage suffered.
person could not, or would not avoid the possibility
(Custodio v. Court of Appeals, G.R. No. 116100,
of danger by stepping aside. (United States v.
1996)
Bonifacio, G.R. No. L-10563)
Mistakes by public officers are not actionable in the
Intoxication
absence of malice or gross negligence amounting to
Mere intoxication is not negligence, nor does the
mere fact of intoxication establish a want of ordinary

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care. It is but a circumstance to be considered with There is no dispute that KLM and Dr. Tiongco
the other evidence tending to prove negligence. entered into a contract of carriage. Dr. Tiongco
(Wright v. Manila Electric R.R. & Light Co., G.R. No. purchased tickets from the airline for his trip to
7760) Almaty, Kazakhstan. KLM, however, breached its
contract with Dr. Tiangco when it failed to deliver his
Lawyers checked-in suitcase at the designated place and
A lawyer is not bound to exercise extraordinary time. The suitcase contained his clothing for the
diligence, but only a reasonable degree of care and conference where he was a guest speaker, a copy
skill, having reference to the character of the of his speech, and his resource materials. Worse,
business he undertakes to do. (Adarne v. Aldaba, Dr. Tiangco's suitcase was never returned to him
A.C. No. 801) even after he arrived in Manila from Almaty. Thus,
KLM’s liability for the lost suitcase was sufficiently
Physicians established as it failed to overcome the presumption
The physician’s duty to his patient relates to his of negligence. (J. Hernando: KLM Royal Dutch
exercise of the degree of care, skill and diligence Airlines v. Dr. Jose M. Tiongco, G.R. No. 212136,
which physicians in the same general 2021)
neighbourhood, and in the same general line of
practice, ordinarily possess and exercise in like One who is blind
cases. One who is physically disabled is required to use the
same degree of care that a reasonably careful
Banks person who has the same physical disability would
Similar to common carriers, banking is a business use. Physical handicaps and infirmities, such as
that is impressed with public interest. Hence, the blindness or deafness, are treated as part of the
Court has recognized the fiduciary nature of banks’ circumstances under which a reasonable person
functions and attached a special standard of must act. Thus, the standard of conduct for a blind
diligence for the exercise of their functions. person becomes that of a reasonable person who is
blind. (Francisco v. Chemical Bulk Carriers,
Allied Bank is expected to act with extraordinary Incorporated, G.R. No. 193577)
diligence required of banks. We cannot
overemphasize that the highest degree of diligence In possession of dangerous instrumentalities
required of banks likewise contemplates such A higher degree of care is required of someone who
diligence in the selection and supervision of its has in his possession or under his control an
employees. The very nature of their work which instrumentality extremely dangerous in character,
involves handling millions of pesos in daily such as dangerous weapons or substances. (Pacis
transactions requires a degree of responsibility, care v. Morales, G.R. No. 169467)
and trustworthiness that is far greater than those
expected from ordinary clerks and employees. The Emergency
bank must not only exercise "high standards of One who suddenly finds himself in a place of danger
integrity and performance," it must also insure that and is required to act without time to consider the
its employees do likewise because this is the only best means that may be adopted to avoid the
way to insure that the bank will comply with its impending danger, is not guilty of negligence, if he
fiduciary duty. (J. Hernando: Allied Banking Corp. fails to adopt what subsequently and upon reflection
v. Spouses Macam, Spouses Caña & Spouses may appear to have been a better method, unless
Garcia, G.R. No. 200635, 2021) the emergency in which he finds himself is brought
about by his own negligence. (Gan v. Court of
Carriage Appeals, G.R. No. L-44264, 1988)
The nature of the business which involves the
transportation of persons or goods makes a contract An individual will nevertheless be subject to liability
of carriage imbued with public interest. It is therefore if the emergency was brought about by his own
bound to observe not just the due diligence of a negligence. (Valenzuela v. CA, G.R. Nos. 115024 &
good father of a family but that of "extraordinary" 117944, 1996)
care in the vigilance over the goods as required
under Article 1733 of the Civil Code. In an action NOTE: Applicable only to situations that are sudden
based on a breach of contract of carriage, the and unexpected such as to deprive the actor of all
aggrieved party does not need to prove that the opportunity for deliberation (absence of
common carrier was at fault or was negligent. He or foreseeability); the action shall still be judged by the
she is only required to prove the existence of the standard of the ordinary prudent man.
contract and its non-performance by the carrier.

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c. PRESUMPTION OF NEGLIGENCE The general rule on the necessity of expert

testimony applies only to such matters clearly within
General Rule: The burden of proof in each action the domain of medical science, and not to matters
based on quasi-delict rests on the plaintiff. of common knowledge. Ordinarily, only experienced
physicians and surgeons are competent to testify on
Exception: There are certain exceptions when the whether a patient has been treated with reasonable
plaintiff need not prove the existence of negligence care. However, where common knowledge and
as an element of quasi-delict i.e. Res Ipsa Loquitur, experience teach that a resulting injury would not
Injury caused by dangerous weapons and have occurred if due care had been exercised (e.g.
substances, violation of traffic rules and regulations. leaving gauzes inside the body of the patient after
an operation, operating on the wrong part of the
NOTE: However, the party invoking such body, etc.), an inference of negligence may be
presumption must still establish certain drawn giving rise to an application of the doctrine of
preconditions before the presumption can operate. res ipsa loquitur without medical evidence. (Ramos
Thus, Article 2185 requires proof that there was a v. Court of Appeals, G.R. No. 124354, 1999)
violation of a traffic regulation while Article 2188
requires proof of possession of dangerous weapons Standard of Care required from the Medical
or substances, such as firearms and poison. Profession
(Aquino, Torts and Damages, p. 137, 2005) Given these safeguards, there is no need to
expressly require of doctors the observance of
(a) Res Ipsa Loquitur “extraordinary” diligence. As it is now, the practice
Where the thing which causes injury is shown to be of medicine is already conditioned upon the highest
under the management of the defendant, and the degree of diligence. The standard contemplated for
accident is such as in the ordinary course of things doctors is simply the reasonable average merit
does not happen if those who have the management among ordinarily good physicians. That is
use proper care, it affords reasonable evidence, in reasonable diligence for doctors or, the reasonable
the absence of an explanation by the defendant, that skill and competence that a physician in the same or
the accident arose from want of care. (Layugan v. similar locality should apply.
IAC, G.R. 73998, 1998)
Liability of Hospital in Cases of Medical
Elements of Res Ipsa Loquitur: Negligence
1. The accident was of a kind which does not The court has applied the doctrine of agency by
ordinarily occur unless someone is negligent estoppel to hold hospitals liable for the negligent
2. The instrumentality or agency which caused acts of physicians based on:
the injury was under the exclusive control of the 1. The patient accepts the services of the
person charged with negligence physician
3. Injury suffered must have not been due to any 2. The patient believes that the physicians are
voluntary action or contribution on the person agents of the hospital.
injured (D.M. Consunji v. Court of Appeals,
G.R. No. 137873, 2001). The case of PSI v. Agana pronounced that the
4. It must appear that the injured party had no doctrine of corporate negligence is the judicial
knowledge or means of knowledge as to the answer to the problem of allocating hospital’s liability
cause of the accident, or that the party to be for the negligent acts of health practitioners, absent
charged with negligence has superior facts to support the application of respondeat
knowledge or opportunity for explanation of the superior or apparent authority.
accident. (Malayan Insurance Co. vs. Rodelio
Alberto and Enrico Reyes, G.R. No. 194320). The theory supporting the liability of hospital is
based on the recognition that the hospitals stand to
The doctrine of res ipsa loquitur finds no application benefit from the business of providing services to
if there is direct proof of absence or presence of patients and should therefore be responsible for any
negligence. If there is sufficient proof showing the injury or damage that may result under the
conditions and circumstances under which the injury relationship. (Professional Services, Inc. v. Agana,
occurred, then the creative reason for the said G.R. No. 126297, 2007)
doctrine disappears. (Huang v. Philippine Hoteliers
Inc., G.R. No. 180440, 2012) Doctrine of Informed Consent
The doctrine of informed consent requires a doctor
Medical Malpractice; Doctrine of Common to inform his patient of the material risks associated
Knowledge with a medical procedure.

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board or commission is not negligence per se but

Elements of a malpractice claim based on the evidence of negligence. (Marinduque Iron Mines
doctrine of informed consent Agents, Inc., v. Workmen’s Compensation
1. The physician had a duty to disclose material Commission, 99 Phil. 480)
risks;
2. He failed to disclose or inadequately (c) Dangerous weapons and substance
disclosed those risks; There is prima facie presumption of negligence on
3. As a direct and proximate result of the failure the part of the defendant if the death or injury results
to disclose, the patient consented to the from his possession of dangerous weapons or
treatment, which he or she would otherwise substances, such as firearms and poison, except
not have consented to; and when the possession or use thereof is indispensable
4. The patient was injured by the proposed in his occupation or business. (Art. 2188)
treatment (Li v. Soliman, G.R. No. 165279,
2011) NOTE: Defendant may still be held liable if
negligence can be established by the plaintiff
(b) Violation of statutes and rules without benefit of the presumption
In motor vehicle mishaps, the owner is solidarily
liable with his driver, if the former, who was in the Licensed possessors of firearms have a peremptory
vehicle, could have, by the use of the due diligence, duty to adequately safeguard such dangerous
prevented the misfortune. It is disputably presumed weapons at all times, and to take all requisite
that a driver was negligent, if he had been found measures to prevent minors and other unauthorized
guilty of reckless driving or violating traffic parties from having access thereto. (Araneta v.
regulations at least twice within the next preceding Arreglado, 104 Phil. 529)
two months.
12. DAMAGES
If the owner was not in the motor vehicle, the
provisions of article 2180 are applicable. (Art. 2184) Concept
Adequate compensation for the value of loss
Employers shall be liable for the damages caused suffered or profits which obligee failed to obtain.
by their employees and household helpers acting
within the scope of their assigned tasks, even Exceptions
though the former are not engaged in any business 1. Law; and
or industry (Art. 2180 par. 5) 2. Stipulation.
Unless there is proof to the contrary, it is presumed Actual damages shall be construed to include all
that a person driving a motor vehicle has been damages that the plaintiff may show he has suffered
negligent if at the time of the mishap, he was in respect to his property, business, trade,
violating any traffic regulation. (Art. 2185) profession, or occupation, and no other damages
whatsoever. Actual damages are compensatory
Negligence per se only. They simply make good or replace the loss
The generally accepted view is that the violation of caused by the wrong. (Algarra v. Sandejas, G.R. No.
a statutory duty constitutes negligence per se. L-8385, 1914).
(Añonuevo v. Court of Appeals, 441 SCRA 24)
Indemnification is meant to compensate for the
However, in Sanitary Steam, it was held that to hold injury inflicted and not to impose a penalty. A party
someone liable for negligence per se, one must is entitled to adequate compensation only for such
show that the violation of the statute was the pecuniary loss actually suffered and duly proved.
proximate or legal cause of the injury or that it (PNOC Shipping and Transport Corp v. CA, G.R.
substantially contributed thereto. Negligence, No. 107518, 1998)
consisting in whole or in part, of violation of law, like
any other negligence, is without legal consequence a. KINDS OF DAMAGES
unless it is a contributing cause of the injury.
(Sanitary Steam Laundry v. Court of Appeals, 300
Actual and Compensatory Damages
SCRA 20)
Classes (I-LAV-IIT)
Riding a haulage truck or stealing ride thereon is not
1. Indemnity for death;
negligence because transportation by truck is not
2. Lucrum Cesans (Benefits you would have
dangerous per se. Violation of a rule promulgated by
obtained;

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3. Attorney’s fees; has been established. (PNOC Shipping and

4. Value of loss actually sustained (damnum Transport Corp v. CA, G.R. No. 107518, 1998).
emergens);
5. Interest; When Loss Need Not Be Proved
6. Injury to business standing or commercial 1. Liquidated damages previously agreed
credit; and upon; liquidated damages take the place of
7. Temporary or permanent loss of earning actual damages except when additional
capacity. damages are incurred;
2. If damages other than actual are sought;
Kinds of Actual or Compensatory Damages 3. Loss is presumed (ex: loss if a child or
2. General Damage spouse);
Natural, necessary and logical 4. Forfeiture of bonds in favor of the
consequences of a particular wrongful act government for the purpose of promoting
which result in injury; need not be public interest or policy (ex: bond for
specifically pleaded because the law itself temporary stay of alien); and
implies or presumes that they resulted from 5. Award of civil indemnity in tort cases or
the wrongful act criminal cases where the victim died. This
civil indemnity is in addition to any actual or
3. Special Damages compensatory damages that may be
Damages which are the natural, but not the awarded in favor of the victim’s heirs.
necessary and inevitable result of the
wrongful act. (i.e., attorney’s fees) Value of Loss
Means the unrealized profit.
Requisites
1. Alleged and Proved with Certainty Value of Loss Suffered
a. Must be pleaded and proved with Destruction of things, fines or penalties, medical &
certainty; and hospital bills, attorney's fees, interests, cost of
b. Must pray for the relief that claim for litigation.
loss be granted.
Loss of Earning Capacity; Variables to
2. Not Speculative Consider
Plaintiff must prove the loss. For damages
to be recovered, the best evidence 1. Life expectancy:
obtainable by the injured party must be Formula: [2/3 x( 80 – (age at the time of death))]
presented. Actual or compensatory
damages cannot be presumed but must be The resulting amount should be used as a
proved with reasonable degree of certainty. multiplier even if the computed life expectancy
goes beyond the victim’s retirement age. The
The Court cannot rely on speculation, presumption is that the victim could have
conjecture or guesswork as to the fact and earned income even if he is beyond the
amount of damages, but must depend upon retirement age. (Smith Bell Dodwell Shipping
competent proof that they have been Agency Corporation v. Borja, G.R. No. 143008,
suffered and on evidence of the actual 2002)
amount. If the proof is flimsy and
unsubstantial, no damages will be 2. Net income/earnings: total of the earnings less
awarded. (Consolidated Industrial Gases, expenses necessary for the creation of such
Inc. vs. Alabang Medical Center, G.R. No. earnings and less living or other incidental
181983, 2013) expenses.
The claimant has the burden of proof. He must 3. Living expenses: In the absence of the specific
establish his case by a preponderance of evidence amount to be deducted from the gross income,
which means that evidence, as a whole, adduced by the amount of living expenses shall be 50% of
one side is superior to that of the other. It is not the gross income. Examples of living expenses:
enough that the plaintiff presents an estimated transportation, clothing, toiletries.
amount. But uncertainty as to the precise amount is
not necessarily fatal. Mere difficulty in the 4. Non-working victims: Earning capacity may
assessment of damages is not sufficient reason for be impaired even if no actual earning is lost in
refusing to award damages where the right to them the meantime. The liability under Article 2206 is

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for loss of earning capacity rather than loss of Necessary and Living Expenses are equal
actual earnings. The minimum wage can be to half of a person’s Gross Annual Income).
used in computing the net earnings.
The Formula May Be Modified When a Minor
5. Pension: Loss of earning capacity covers Who Was Not Yet Earning is Involved:
pension which the decedent would have 1. “X” may be fixed at 21, instead of the
received. person’s age at the time of his death or
(De Caliston v. CA, G.R. No. L-63135, 1983). permanent incapacity. Courts may
presume that persons graduate from
Formula for Computation of Loss of Earning college at the age of 21, and it is only then
Capacity that they would start earning a livelihood;
American Expectancy Table of Mortality or the 2. “Net Annual Income '' may be computed
Actuarial of Combined Experience Table of on the basis of the prevailing minimum
Mortality: wage for workers in the non-agricultural
sector at the time of the minor’s death or
[2/3 x (80 – (age at the time of death))] x permanent incapacity. (Spouses Pereña v.
monthly earnings x 12 = GROSS Spouses Zarate, 2012; and Abrogar v.
EARNINGS (GE) Cosmos Bottling Co., 2017)
GE – Approximate Expenses General Rule

(50% of GE) = Net Earnings Documentary evidence should be presented to
substantiate the claim for damages for loss of
NOTE: In the absence of documentary evidence of earning capacity.
expenses, it is reasonable to presume that it is 50%
of the gross income. (Philippine Hawk Corporation Exceptions
v. Lee, G.R. No. 166869, 2010) Damages for loss [or impairment] of earning
capacity may be awarded despite the absence of
LEC May Be Awarded to Parents of Deceased documentary evidence when (1) the deceased [or
Child Who Had NO History of Earnings the injured] was self-employed and earning less
Art. 2206(1) provides that damages for LEC shall be than the minimum wage under current labor laws, in
assessed and awarded by the court “unless the which case, judicial notice may be taken of the fact
deceased on account of permanent physical that in the deceased’s line of work no documentary
disability not caused by the defendant, had no evidence is available; or (2) the deceased was
earning capacity at the time of his death”. Damages employed as a daily worker earning less than the
for LEC may be awarded to a minor’s heirs although minimum wage under current labor laws.
he had no history of earnings because
compensation of this nature is awarded not for loss Loss of Profits (Lucrum Cessans)
of time or earnings but for loss of the deceased’s May be determined by considering the average
power or ability to earn money. (Spouses Pereña v. profit for the preceding years multiplied by the
Spouses Zarate, G.R. No. 157917, August 29, number of years during which the business was
2012) affected by the wrongful act or breach
How to Compute LEC of Non-Earning Student The income of similar businesses or activities may
As a general rule, damages for LEC are computed be considered. (G.A. Machineries, Inc. v.
by applying the following formula: Yaptinchay, G.R. No. L-30965, 1983)
Damage to Business Standing/ Commercial

Damages for LEC = 2/3(80-X) multiplied Credit
by Net Annual Income In Radio Communications v. CA, compensatory
damages were also awarded for injury to
o X – the deceased or permanently respondent's "business reputation or business
incapacitated person’s age at the time of standing", "loss of goodwill and loss of customers or
the accident; and shippers who shifted their patronage to
o Net Annual Income – equivalent to a competitors". The grant thereof is proper under the
person’s Gross Annual Income less provisions of Article 2205, which provides that
Necessary and Living Expenses (in the damages may be recovered "for injury to the
absence of evidence, it is presumed that plaintiff's business standing or commercial credit."
And even if not recoverable compensatory

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damages, they may still be awarded in the concept In the absence of stipulation, attorney's fees and
of temperate or moderate damages. expenses of litigation, other than judicial costs,
cannot be recovered.
There are cases where from the nature of the case,
definite proof of pecuniary loss cannot be offered, Exceptions:
although the court is convinced that there has been 1. When exemplary damages are awarded;
such loss. For instance, injury to one's commercial 2. When the defendant's act or omission has
credit or to the goodwill of the business firm is often compelled the plaintiff to litigate with third
hard to show with certainty in terms of money. The persons or to incur expenses to protect his
judge should be empowered to calculate moderate interest;
damages in such cases, rather than that the plaintiff 3. In criminal cases of malicious prosecution
should suffer, without redress from the defendant's against the plaintiff;
wrongful act. (Radio Communications of the 4. In case of a clearly unfounded civil action
Philippines, Inc. v. Court of Appeals, G.R. No. L- or proceeding against the plaintiff;
55194, 1981) 5. Where the defendant acted in gross and
evident bad faith in refusing to satisfy the
Attorney’s Fees plaintiff's plainly valid, just and demandable
They are actual damages due to the plaintiff and not claim;
to counsel. 6. In actions for legal support;
7. In actions for the recovery of wages of
Plaintiff must allege the basis of his claim for household helpers, laborers and skilled
attorney’s fees in the complaint. The basis should workers;
be one of the cases under Art. 2208. 8. In actions for indemnity under workmen's
compensation and employer's liability laws;
In its ordinary concept, an attorney’s fee is the 9. In a separate civil action to recover civil
reasonable compensation paid to a lawyer by his liability arising from a crime;
client for the legal services he has rendered to the 10. When at least double judicial costs are
latter. The basis of this compensation is the fact of awarded. (Art. 2208)
his employment by and his agreement with the
client. Interest
Two types of interest:
In its extraordinary concept, an attorney’s fee is an 1. Monetary Interest; and
indemnity for damages ordered by the court to be 2. Compensatory Interest.
paid by the losing party in litigation. The basis of this
is any of the cases provided by law where such Monetary Interest
award can be made, such as those authorized in Compensation for the use of money.
Article 2208, Civil Code, and is payable not to the
lawyer but to the client, unless they have agreed that NOTE: The legal rate at the time of perfection of the
the award shall pertain to the lawyer as additional obligation will apply. It will not be affected by a
compensation or as part thereof. supervening change in the legal rate of interest.
Attorney's fees are recoverable not as a matter of Requisites

right. It is the import of Article 2208 that the award The collection of interest in loans or forbearance of
of attorney's fees is an exception and that the money is allowed only when these two conditions
decision must contain an express finding of fact to concur:
bring the case within the exception and justify the 1. There was an express stipulation for the
grant of attorney's fees. "Just and equitable" under payment of interest; and
paragraph 11, Article 2208, New Civil Code is not a 2. The agreement for the payment of the
matter of feelings, but demonstration. The reason interest was reduced in writing.
for the award of attorney's fees must be stated in the
text of the court's decision, otherwise, if it is stated Absent any of these two conditions, the money
only in the dispositive portion of the decision, the debtor cannot be made liable for interest. Evidence
same must be disallowed on appeal. (Abrogar v. must be presented to show that the parties agreed
IAC, G.R. No. L-67970 January 15, 1988) on the payment of interest.
When Attorney’s Fees are Recoverable; BUT SEE: S.C. Megaworld v. Parada (G.R. No.
General Rule 183804, 2013) and Raymundo v. Galen Realty

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(G.R. No. 191594, 2013) where the Court awarded demand until full payment.
interest despite the absence of stipulation.
(c) When the obligation, not constituting a loan
Compensatory interest or forbearance of money, goods, credits or
It is awarded in the concept of damages for delay in judgments, is breached, an interest on the
the performance of an obligation. It is due and amount of damages awarded may be imposed
demandable from the time demand is first made, in the discretion of the court at the prevailing
whether judicial or extrajudicial. legal interest prescribed by the Bangko Sentral
ng Pilipinas, pursuant to Articles 2210 and
NOTE: For compensatory interest, the legal rate of 2011 of the Civil Code, which is 6%.
interest always applies. This means that
compensatory interest is affected by supervening (d) No interest, however, shall be adjudged on
changes in legal rate of interest. unliquidated claims or damages until the
demand can be established with
Rules in the Computation of Interest in the reasonable certainty. Accordingly, where the
Concept of Actual or Compensatory Damage amount of the claim or damages is established
with reasonable certainty, the prevailing legal
(a) In case of loan or forbearance of money, interest shall begin to run from the time the
goods, credits or judgments, the interest due claim is made extrajudicially or judicially (Art.
should be that which is stipulated by the parties 1169) until full payment, but when such
in writing, provided that it is not excessive and certainty cannot be so reasonably established
unconscionable. which may have been at the time the demand is made, the interest
stipulated in writing: shall begin to run only from the date of the
1. In the absence of a stipulated reckoning judgment of the trial court (at which time the
date, the interest shall be computed from quantification of damages may be deemed to
default, i.e., from extrajudicial or judicial have been reasonably ascertained) until full
demand in accordance with Article 1169 of payment.
the Civil Code, UNTIL FULL PAYMENT, o The actual base for the computation of the
without compounding any interest. interest shall, in any case, be on the
o Unless compounded interest is principal amount finally adjudged, without
expressly stipulated by the parties, compounding any interest unless
by law or regulation. compounded interest is expressly
2. Interest due on the principal amount stipulated by law or regulation.
accruing as of judicial demand shall (Lara’s Gifts & Decors, Inc. v. Midtown
separately earn legal interest at the industrial Sales, Inc., G.R. No. 225433,
prevailing rate prescribed by the Bangko 2019).
Sentral ng Pilipinas, from the time of judicial
demand until full payment. NOTE: C.B. Circular No. 799, July 1, 2013, changed
the rate of interest in the absence of stipulation in
(b) Obligation other than a loan or forbearance loans or forbearance of money to 6%.
of money, goods, credits or judgments
1. The rate of interest on the principal amount When Actual Damages are Mitigated
shall be the prevailing legal interest 1. Contributory negligence;
prescribed by the Bangko Sentral ng 2. In contracts, quasi-contracts, and quasi-delict;
Pilipinas. (a) Plaintiff has contravened the terms of
2. It shall be computed from extrajudicial or contract;
judicial demand in accordance with Article (b) Plaintiff derived some benefit as result of
1169 of the Civil Code, UNTIL FULL contract;
PAYMENT, without compounding any (c) In case where exemplary damages are to
interest. be awarded, that the defendant acted
o Unless compounded interest is upon the advice of counsel;
expressly stipulated by the parties, (d) That the loss would have resulted in any
by law or regulation. event; and
3. Interest due on the principal amount (e) That since the filing of the action, the
accruing as of judicial demand shall defendant has done his best to lessen the
separately earn legal interest at the plaintiff's loss or injury.
prevailing rate prescribed by the Bangko
Sentral ng Pilipinas, from the time of judicial General Rule

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Insofar as actual or compensatory damages are Extent or Scope of Actual Damages; In

concerned, Article 2199 provides, “Except as Contracts and Quasi-Contracts
provided by law or by stipulation, one is entitled to
an adequate compensation only for such pecuniary 1. Damages in Case of Good Faith
loss suffered by him as he has duly proved. Such (a) Natural and probable consequences of
compensation is referred to as actual or breach of obligations; and
compensatory damages.” (b) Parties have foreseen or could have
reasonably foreseen at the time the
“Conformably with the foregoing provision, the rule obligation was created.
is long and well settled that there must be pleading
and proof of actual damages suffered for the 2. Damages in Case of Bad Faith
same to be recovered. It is sufficient that damages may be reasonably
attributed to the non-performance of the
In addition to the fact that the amount of loss must obligation.
be capable of proof, it must also be actually proven
with a reasonable degree of certainty, premised Two Kinds of Foreseeability
upon competent proof or the best evidence 1. Imputed Foreseeability
obtainable. Those consequences which a reasonable
person should have foreseen; the test is
The burden of proof of the damage suffered is, whether a reasonable person would have
consequently, imposed on the party claiming the foreseen the damages that the purchaser
same who should adduce the best evidence encountered. (Hadley v. Baxendale, cited in
available in support thereof, like sales and delivery Daywalt v. La Corporacion, G.R. No. L-13505,
receipts, cash and check vouchers and other pieces 1919).
of documentary evidence of the same nature. In the
absence of corroborative evidence, it has been held 2. Actual Foreseeability
that self-serving statements of account are not Actual knowledge (not just imputed) of relevant
sufficient basis for an award of actual damages. facts is necessary where the loss in question is
of an unusual kind or of an unusually high
Corollary to the principle that a claim for actual extent.
damages cannot be predicated on flimsy, remote, In Mendoza v. PAL, the defendant cannot be
speculative, and insubstantial proof, courts are, held liable for damages where it could not have
likewise, required to state the factual bases of the foreseen the damages that would be suffered
award. (Oceaneering Contractors (Phils.), Inc. v. by the plaintiff upon failure to deliver the can of
Barreto, G.R. No. 184215, 2011) film for reason that the plans of the plaintiff to
exhibit that film during the town fiesta and his
Exceptions preparation, specially the announcement of
1. It should be emphasized however that said exhibition by poster and advertisement in
uncertainty as to the precise amount is not the newspapers were not called to the
necessarily fatal. (Talisay-Silay Milling, Inc. v. defendant's attention.
Associacion de Agricultores de Talisay-Silay,
Inc., G.R. No. 91852,1995); Unusual or extraordinary damages (beyond
the ordinary course of things) must have been
2. Mere difficulty in the assessment of damages is brought within the contemplation of the parties
not sufficient reason for refusing to award as the probable result of breach at the time of
damages where the right to them has been or prior to contracting. (Mendoza v. PAL, G.R.
established. (Ball v. Pardy CTJ Construction No. L-3678, 1952)
Co., 63 ALR 139, 108 Conn. 549, 143 A 855);
Extent or Scope of Actual Damages; In Crimes
3. Proof of Actual loss is also not necessary in and Quasi-Delicts
cases where the law or jurisprudence allows the 1. Defendant is liable for all damages that are
award of civil indemnity. As in People v. natural and probable consequences of the
Guanzon, the Court ruled that: Civil indemnity, act complained of; and
which is actually in the nature of actual or 2. Not necessary that damages have been
compensatory damages, is mandatory upon the foreseen or could have been reasonably
finding of the fact of rape. (People v. Alex foreseen.
Condez y Guanzon, G.R. No. 187077, 2011)
Moral Damages

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While Rico suffered humiliation or embarrassment

Concept from the disapproval of his credit card at Gourdo's
Includes (PBMF-MWSSS) Restaurant in front of his two guests, We are
1. Physical suffering constrained to reverse the that Union Bank was
2. Besmirched reputation grossly negligent in revoking Rico's credit card
3. Mental anguish privileges. Rico failed to convince Us that Union
4. Fright Bank breached any obligation that would make it
5. Moral shock answerable for his humiliation or embarrassment.
6. Wounded feelings (J. Hernando: Rex Rico v. Union Bank of the
7. Social humiliation Philippines, G.R. No. 210928, 2022)
8. Serious anxiety
9. Sentimental value of real or personal In culpa aquiliana,
property may be considered in adjudicating 1. when the act or omission causes physical
moral damages. (Art. 2217) injuries; or
2. when the defendant is guilty of intentional
The social and economic/financial standing of the tort (in this latter case, moral damages may
offender and the offended party should be taken into be recovered even in loss of or damage to
consideration in the computation of moral damages. property).
(Kierulf v. Court of Appeals, G.R. No. 99343, 1997)
In culpa criminal, when the accused is guilty of
Moral damages is awarded only to enable the physical injuries, lascivious acts, adultery or
injured party to obtain means, diversions or concubinage, illegal or arbitrary detention, illegal
amusements that will serve to alleviate the moral arrest, illegal search, defamation and malicious
suffering he has undergone, by reason of prosecution. (Expertravel & Tours, Inc. v. CA, G.R.
defendant's culpable action and not intended to No. 130030, June 25, 1999)
enrich a complainant at the expense of defendant.
(Mayo v. People, G.R. No. 91201, 1991) Who May Recover Moral Damages
1. The parents of the female seduced,
When Moral Damages Recoverable abducted, raped, or abused may also
1. Criminal offense resulting in physical recover under No. 3; and
injuries 2. Spouse, descendants, ascendants and
2. Quasi-delicts causing physical injuries brothers and sisters for acts mentioned in
3. Seduction, abduction, rape or other acts of Art. 309 (“Any person who shows
lasciviousness disrespect to the dead, or wrongfully
4. Adultery and concubinage interferes with a funeral shall be liable to
5. Illegal or arbitrary detention or arrest the family of the deceased for damages,
6. Illegal search material and moral.”).
7. Libel, slander or other form of defamation
8. Malicious prosecution Siblings Not Entitled to Moral Damages for
9. Acts mentioned in ART. 309 of the RPC Death of their Brother / Sister
relating to disrespect of the dead and Article 2206 of the Civil Code entitles the
interference with funeral descendants, ascendants, illegitimate children, and
10. Acts and actions referred to in Arts. 21, 26, surviving spouse of the deceased passenger to
27, 28, 29, 30, 32, 34 and 35. (Art. 2219) demand moral damages for mental anguish by
reason of the death of the deceased. The omission
NOTE: Art.2219 is not an exclusive enumeration. from Article 2206 (3) of the brothers and sisters of
the deceased passenger reveals the legislative
Moral damages may also be awarded in cases of intent to exclude them from the recovery of moral
willful injury to property or breaches of contract damages for mental anguish by reason of the death
where the defendant acted fraudulently or in bad of the deceased. Inclusio unius est exclusio alterius.
faith. (Art. 2220) (Sulpicio Lines, Inc., v. Curso, G.R. No. 157009,
March 17, 2010)
In culpa contractual, only in cases of gross
negligence amounting to bad faith or in wanton General Rule
disregard of his contractual obligation. In a breach The plaintiff must allege and prove the factual basis
of contract of carriage, moral damages may also be for moral damages and its causal relation to the
recovered in case of death of a passenger. defendant’s act

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Exception 3. Purpose is not to identify but vindicate or

Moral damages may be awarded to the victim in recognize right violated.
criminal proceedings without the need for pleading
proof of the basis hereof. NOTE: The law presumes damage although actual
or compensatory damages are not proven. They are
Moral damages are mandatory without need of damages in the name only and are allowed simply
allegation and proof other than the death of the in recognition of a technical injury based on a
victim, owing to the fact of the commission of murder violation of a legal right. Nominal damages cannot
or homicide. (Espineli v. People of the Philippines, coexist with actual or compensatory damages.
G.R. No. 179535, 2014)
Temperate of Moderate Damages
When Moral Damages Awarded Without
Evidence of Injury Concept
1. Rape cases. It is assumed that the victim More than nominal but less than compensatory
has suffered moral injuries (People v. where some pecuniary loss has been suffered but
Iroy, G.R. No. 187743, 2010); its amount can't be proved with certainty due to the
2. Murder cases. A violent death nature of the case. Also called “Moderate
necessarily brings about emotional pain Damages.”
and anguish on the part of the victim’s
family (People v. Rarugal, G.R. No. In cases where the resulting injury might be
188603, 2013); and continuing and possible future complications directly
3. Where a broadcast is libelous per se, arising from the injury, while certain to occur are
the law implies moral damages (FBNI v. difficult to predict, temperate damages can and
AMEC, G.R. No. 141994, 2005) should be awarded on top of actual or compensatory
damages; in such cases there is no incompatibility
NOTE: In Filipinas Broadcasting Network v. AMEC, between actual and temperate damages.
the Supreme Court held:
Requisites
A juridical person is generally not entitled to moral 1. Some pecuniary loss
damages because, unlike a natural person, it cannot 2. Loss is incapable of pecuniary estimation
experience physical suffering or such sentiments as 3. Must be reasonable
wounded feelings, serious anxiety, mental anguish
or moral shock. General Rule
Actual Damages cannot be recovered with
Nevertheless, AMEC's claim for moral damages temperate damages due to the nature of the said
falls under item 7 of Article 2219 of the Civil Code. damages.
This provision expressly authorizes the recovery of
moral damages in cases of libel, slander or any Exception
other form of defamation. Article 2219(7) does not When the injury is chronic or recurring such as in
qualify whether the plaintiff is a natural or juridical loss of earnings. (Ramos v. Court of Appeals, G.R.
person. Therefore, a juridical person such as a No. 124354, 1999)
corporation can validly complain for libel or any
other form of defamation and claim for moral Temperate damages may also be awarded for injury
damages. (Filipinas Broadcasting Network v. to the plaintiff’s business standing or commercial
AMEC, G.R. No. 141994, 2005) credit if amount is not certain (and thus actual
damages cannot be granted).
Nominal Damages
Liquidated Damages
Concept
Nominal damages are adjudicated in order that a Those agreed upon by the parties to a contract, to
right of the plaintiff, which has been violated or be paid in case of breach thereof.
invaded by the defendant, may be vindicated or
recognized, and not for the purpose of indemnifying When Liquidated Damages May Be Equitably
the plaintiff for any loss suffered by him. Reduced
1. Iniquitous or unconscionable;
Elements 2. Partial or irregular performance.
1. Plaintiff has a right;
2. Right of plaintiff is violated; and Rules Governing in Case of Breach of Contract

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Penalty may be imposed by stipulation or agreed NOTE: Civil Indemnity for death is mandatory and a
upon by the parties in case of breach of contract. matter of course, and without need of proof other
Such penalty is in the nature of liquidated damages. than the fact of death as the result of the crime or
Exemplary or Corrective Damages quasi-delict, and the fact that the accused was
responsible therefor.
Imposed by way of example or correction for the
public good, in addition to the moral, temperate, Article 2206 only imposes a minimum amount for
liquidated to compensatory damages. Also called awards of civil indemnity, which is ₱3,000.00. The
“Corrective Damage.” law did not provide for a ceiling. Thus, although the
minimum amount for the award cannot be changed,
NOTE: Exemplary damages cannot be recovered increasing the amount awarded as civil indemnity
as a matter of right; the court will decide whether or can be validly modified and increased when the
not they should be adjudicated. present circumstance warrants it. (People vs.
Jugueta G.R. No. 202124, 2016)
When Recovered
1. In Criminal Offenses Death Caused by Breach of Contract by a
Exemplary damages as a part of the civil liability Common Carrier
may be imposed when the crime was committed 1. Indemnity for death;
with one or more aggravating circumstances. 2. Indemnity for loss of earning capacity; and
Such damages are separate from fines and 3. Moral Damages.
shall be paid to the offended party. party.
14. DUTY OF INJURED PARTY
2. In Quasi-Delicts
Exemplary damages may be granted if the Doctrine of Avoidable Consequences
defendant acted with gross negligence. The party suffering loss or injury must exercise the
diligence of a good father of a family to minimize the
3. In Contracts and Quasi-Contracts damages resulting from the act or omission in
The court may award exemplary damages if the question. (Art.2203)
defendant acted in a wanton, fraudulent,
Burden of Proof Burden of Defendants
It is the burden of the defendants to show
In case liquidated damages have been agreed satisfactorily not only that the injured party could
upon, although no proof of loss is necessary in order have mitigated his damages but also the amount
that such liquidated damages may be recovered, thereof; failing in this regard, the amount of
nevertheless, before the court may consider the damages awarded cannot be proportionately
question of granting exemplary in addition to the reduced. (Lim vs. Court of Appeals, G.R. No.
liquidated damages, the plaintiff must show that he 125817, 2002).
would be entitled to moral, temperate or
compensatory, damages were it not for the Mitigation Due to Refusal to Find Work
stipulation for liquidated damages. Before defendant can take advantage of the failure
of plaintiff to obtain like employment, it must appear:
1. That it is like employment
13. DAMAGES IN CASE OF DEATH 2. That it is in the same locality
3. That it is under substantially the same
In Crimes and Quasi-Delicts Causing Death conditions; and
● Medical & Hospital Bills; 4. The wages which he could have earned.
● Civil Indemnity/ Damages for Death under
Art. 2206 (Automatically awarded);
● Loss of earning capacity unless deceased NOTE: Contributory Negligence also mitigates the
had permanent physical disability not damages recoverable by the plaintiff. However, in
caused by defendant so that deceased had the Doctrine of Avoidable Consequences, the
no earning capacity at time of death; negligence of the plaintiff is after the negligence of
● Support, if deceased was obliged to give the defendant. In Contributory Negligence, the
support (for period not more than 5 years); negligence of the plaintiff is before the negligence of
and the defendant.
● Moral damages.

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(2023 BLUE NOTES) - Civil Law

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ATENEO CENTRAL

BAR OPERATIONS 2023 CIVIL LAW

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PERSONS AND FAMILY RELATIONS

TABLE OF CONTENTS ..........................................................................................................................6

A. WHEN LAW TAKES EFFECT DOCTRINE ................................................................................. 14

II. MARRIAGE ............................................................................................................................... 35

A. GENERAL PRINCIPLES ......................................................................................................... 36

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I. THE FAMILY ....................................................................................................................... 61

PROPERTY, OWNERSHIP, AND ITS MODIFICATIONS

I. CLASSIFICATION OF PROPERTY .................................................................................................. 83

II. BUNDLE OF RIGHTS ...................................................................................................................... 86

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POSSESSION IN THE CONCEPT OF AN OWNER ..................................................................... 108

III. DIFFERENT MODES OF ACQUIRING OWNERSHIP ........................................................................ 125

A. OCCUPATION ................................................................................................................... 125

IV. LAND TITLES & DEEDS ............................................................................................................... 143

A. TORRENS SYSTEM ............................................................................................................ 143

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I. DEALINGS WITH UNREGISTERED LANDS ........................................................................... 183

V. WILLS AND SUCCESSION............................................................................................................. 198

A. GENERAL PROVISIONS ..................................................................................................... 199

OBLIGATIONS AND CONTRACTS

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A. GENERAL PROVISIONS ..................................................................................................... 256

II. CONTRACTS ............................................................................................................................... 289

A. GENERAL PROVISIONS ..................................................................................................... 289

III. NATURAL OBLIGATIONS ............................................................................................................ 306

A. DEFINITION AND ESSENTIAL REQUISITES .......................................................................... 308

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C. EARNEST MONEY (ART. 1482) .......................................................................................... 316

II. LEASE......................................................................................................................................... 325

A. KINDS OF LEASE ............................................................................................................... 325

III. AGENCY .................................................................................................................................... 331

A. DEFINITION OF AGENCY ................................................................................................... 331

IV. CREDIT TRANSACTIONS ............................................................................................................. 350

VI. QUASI-CONTRACTS ................................................................................................................... 389

VII. TORTS AND DAMAGES ............................................................................................................. 392

A. PRINCIPLES ...................................................................................................................... 392

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3. STRICT LIABILITY ................................................................................................................... 395

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I. PERSONS A. When Law Takes Effect Doctrine

GENERAL RULE: Laws shall take effect after

2. If there is lack of/absence of full

The publication requirement as provided

WHEN IS PUBLICATION NOT REQUIRED

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1 As seen in the case of Vda. de Ongsiako v.

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Mandatory Laws a. Real rights