FINAL EXAM
Kasi dati, 30 pesos is a
DATE: May 12, 2019
TIME: 9am-11am.
TOPICS: Start of Partnership
TYPE OF QUESTIONS: 15 ESSAY QUESTIONS
These are provisions labeled to personal property
as security. This all concern chattel mortgages.
Burahin nyo na yung
Art 2085, Art 2123. Also delete na din 2127, 2140
and 2141. They are all repealed, RA 11057.
PARTNERSHIP
Partnership- we will talk about fundamentals.
Ok first thing, the Civil Code defines partnership as
two or more persons bind themselves to
contribute money, property, or industry to a
common fund, with the intention of dividing
the profits among themselves.
But if you will look on the early part of the code,
partnership is a juridical person. It’s not just a
contract, it’s also a juridical person.
Now, how many persons to form a partnership?
- Atleast 2, basta minimum 2. It has no limit,
because it is a contract so 2 parties.
How may a partnership be created?
- There are different modes:
1. By mere agreement of the parties
- Right now, we can form a partnership,
kunwari ah, ngayon nag usap tayo, “friend,
meron ako dito 12.00, gusto ko tumaya sa
lotto, kaya lang kulang ang pera ko. Sabi
mo, ako din kulang, 12.00 lang din pera
ko.”In short, we can pull our funds to play
lotto. Pag usapan natin, 3 numero sayo, 3
numero sa akin. Kapag nanalo, hati tayo.
Then sabi mo “sige” then we form a
partnership. So generally, partnership are
form by mere agreement of the parties.
Now, the Civil code also provides that if the
capital contribution is more than 3,000 pesos
although this is a very obsolete provision, it must
be in writing and filed with the SEC. Kaya
naman yung 3,000 pesos when the time the civil
code was created, 3,000 pesos is equivalent to a 3
years minimum wage.
salary of a public school teacher and then they are
considered hansomely paid. Sa ngayon, kulang pa
sa parking.
Ngayon, if anything filed with the SEC, it must be
notarized. Kaya when the civil code say publi
instrument, the practice of the SEC is to accept
only public documents for filing.
Ok, so another rule would be if anybody
contributed to your property regardless of value,
title or not, partnership agreement must be in
public instrument which should have a list or the
real property/properties contributed otherwise
partnership is void.
Ok so question is what may the partner contribute?
- The partner may contibute money, property
or industry.
Partners contributing money or property- they are
known as capitalist partners.
Those partners contributing industry only- they are
industrial partners.
Now, a partner may contribute both. Money or
property and industry. So a capitalist partner may
also be industrial partner.
How about partnership name? The partnership
name may include names of all the partners. Like
there was a time, this very popular company, SyCip
Flores and Pelayo. Dati yun, kasi dun sa dalawang
partners na yun, ngayon SGV na. Yang partners na
yan, I think more than 20. Kaya lang, wala yung
mga pangalan nila. And then the partnsership may
only include the name of one partner, like Carlos
Valdez. Kaya lang, pangalan mo Carlos Valdex and
Associates, so obvioulsy the senior partner is Carlos
Valdez and the others are simply associates.
So ngayon, the partnership name could also include
name of 2 or more partners but not necessary all
partners.
Ok now, what if the partnership include your name
and you are not a partner? Will you be liable?
No. Di ka naman partner eh, malay mo kapangalan
mo lang. But if you represented your name as a
partner, e di ka naman partner then you should be
liable as a partner.
Basis: Principle of estoppel. You represented
yourself as a partner, so you will be liable as a
partner.
Yun mga common partnership names, kung hindi
man name of single partner e associates, or name
of a partner and company. For example, marsman
and company. Ok? So kapag nilagyan mo ng , inc.
at the end, that is a corporation.
Madali naman malaman yan, at the end of the
corporate name, com and inc. if Com, company,
kapag inc, corporation. Kaya lang kapag walang
inc. at the end of the name, that is just a
partnership.
Ok what about sharing of profits?
The partners are free to agree the sharing of
profits and losses. But the law expressly provides
that the agreement to exclude a partner from
profits and losses, is void. Ngayon kung ano mapag
kasundan regarding sharing of profits and losses,
that’s between the partners. Walang pakielam ang
batas doon. Ang hindi nila pinapayagan is to
exclude from profits and losses.
For example, let us say that i was driving my car,
unfortunately, I needed help. So this guy offer a
help, to fix my car and he was able to fix my car
immediately. So i was impressed, tinanong kita
saan ang talyer mo? Sabi mo, wala po kasi
ambulant mechanical ako.l Sabi ko, wala ka ba
balak mag talyer? Sagot mo bossing gusto ko sana
kaso wala akong pang set up. Sa madaling sabi, I
saw an opportunity in you, sabi ko ah gusto mo
mag talyer? Magkano ba kailangan? Sir pwede na,
mga 1M. So sabi ko osige, ako mag kakapital basta
ikaw mag papatakbo ng talyer. Sabi mo sige sir,
paano share-an natin ng profits? Sabi mo 80/20. Sa
akin 80 sir, sayo 20. Tutal ako naman babad sa
trabaho, ikaw nangapital ka lang. Ok sige agreed.
So that is freely agreed by the parties. Ang
masama, sa profits ok kayo, tapos sa losses, wala
kayo e hindi pwede yun. That is a void stipulation.
Keep in mind that a partnership is always for
profits, walang partnership na walang profits.
Malinaw naman yan sa definition, kaya partnership
is always for profits. Unlike a corporation na can’t
be in profits, db merong education corporation? For
example, arellano. If ever, the school made profits,
it’s becaue private sector, knows how to manage
management there. O religious corporation, ang
lakas kumita nyan.
Property rights of the partners- it includes interest
over specific partnership properties. Right to
participate in the profits, also right to participate in
the management of the partnership.
Ok so yung interest over specific properties muna,
ganto ha. The partnership bought property,
properties registered in the name of the
partnership. We are partners, ok so question, does
any of us validly say part owner ako nyan? The
answer is yes. Unlike in a corporation, if a property
was registered in the name of a corporation, that
property belongs to the corporation. Kaya nga in
partnership, any partner can validly claim interest
over specific properties as co-owner of that
property. But if the property will be convey, as if it
is registered in the name of the partnership, then it
must be conveyed in the name of the partnership.
Now, management is by all the partners. But
decisions are made by the partner or partners
having the controlling interest. Yan ang pinag kaiba
sa corporation.
Sa Corporation, as a rule, except from the one man
corporation, the corporation decisions are made by
the majority of a quorum in the board of directors.
Kaya kung nagkataon na ikaw ang controlling
stockholders, kaya lang yung mga kasama mo
naman ay not agreeable with what you want, then
you cannot have their opinion kasi sa BOD
halimbawa 5, so sabihin nating lahat nandon, yung
4 against sayo, edi they will win. Kaya nga sinasabi
ko dati when I was the chair of the Corporation
Law, sinasabi ko sa mga estudyante you want to
form a corporation? You should filed it with court, e
dati kung sino sino lang ginagamit. Lagi ko sinasabi
bago kayo mag pirmahan ng AOI, papirmahin mo
na ng deed of assignment each share yung mga
dummies mo.
Kasi yun ang delikado sa Corpo, decisions are
made by majority of quorum. Kaya sa BOD, every
director is entitled to 1 vote regardless of the
number of shares.
Again, in a partnership decisions, decisions are
made by the partner kahit nag iisa ka, having the
controlling interest. Kaya kung ako yung partner
having the controlling interest, meron akong 51%
kahit kayo 20, mauna kayo sa akin. Because we
consider interest not just 1 seat in the quorum.
Now, kinds of partnership. Meron tayong
particular o specific and ang pinaka counterpart
nyan Universal.
Particular- best example would be exercise of
profession, because that is only an activity the
partnership would engage in. Ibig sabihin non,
particular o specific.
Kaya kapag sinabing Universal, para sinabi mong
kahit ano pwede gawin, O bukas mag sari sari
store tayo o sa susunod gulaman naman. Kaya pag
sinabing Universal, 2 parts naman yan.
1. Of all present properties
2. Of all future profits
And the law is very clear that in the absence of
stipulation, it shall be of all future profits. Kasi
naman kapag of all present properties, ibig sabihin
yung lahat ng properties natin iko-contribute na
natin. Yan ang ibig sabihin ng of all present
properties, to form a partnership, and we are
contributing all of our present property to the
partnership kaya it is allowed if there is such an
agreement. So in the absence of any agreement,
that it is of all present properties, it is only one of
only future profits.
Ngayon, with respect to liabilities, partnerships may
be General or Limited.
If u were a general partner and you are already
fully paid, for your subscriptions, in case the
partnership will still have liabilities and the assets
are not enough to pay for the liabilities, the general
partner could be obliged to contribute.
Yan ang pinagkaiba ng partnership sa corporation,
in a corporation, the rule is if a subscriber have
already fully paid for his subscription, it will
jeopardize contribute except when it is pierced the
corporate veil. Kaya lang sa partnership, if you are
the general partner, even if full paid on your
subscription, and unfortunately, the partnerhship
has unpaid liabilities, the general partners will be
obliged to contribute.
Ngayon, when we talk about Limited Partnership,
so merong limited partner, his liability is limited to
what he promise to contribute. So once fully paid
for his subscription and promise to contribute thats
the same as subscription. Except when the limited
partner, dissipated in the management of the
partnership.
Again, ang limited partner if already paid up that it
his subscription and that partnership has unpaid
obligations, you are obliged to contribute some
more, ang mag babayad na lamang nung unpaid ay
yung general partner. Kaya kung ikaw ay limited
partner at nabayaran ko na yung ipinangako na
100k, ayan fully paid na. And unfortunately, the
partnership incurred liabilities, then lucky for you,
you do not need to contribute anything more to
partnership creditors. Ang babayad nalang ng
partnership creditor ay yung mga general partner.
Except if the Limited partner participated in
the management of the partnership.
Ok so another very basic principle about
partnership is every partner is considered an agent
of the partnership. So whatever presentation he
would make in the partnership, it should bind the
partnership.
Now what is the cause of dissolution of
partnership?
1. Death of a partner- when the partner dies
kahit pinaka maliit pa yung participation
nya, kahit pinaka insignificant pa. Kapag
namatay yung partner na yon, it’s the end
of partnership. Yan ang pinag kaiba sa
corpo, kasi sa corpo may right of succession
na kapag meron namatay na Sh, pinaka
malaki o maliit, the corporation will still exist
kasi yung rights ng namatay will be
inherited by his heirs. Kaya lang by express
provision in the NCC that when a partner
dies, kahit pinaka maliit pa sya, it’s the end
of tha partnership.
2. Incapacity of a partner- kunwari ang
partner nasiraan ng ulo, it’s the end of the
partnership. Or if one of the partners
become insolvent.
3. Withdrawal of a partner- sabi ng partner
ayoko na, ang gulo nyo, ginugulangan nyo
ako parati. That’s the end of the
partnership.
4. When the purpose of the partnership is
accomplished- kunwari meron akong lote,
ikaw naman civil eng, sabihin mo tayuan
natin building, in short before we parted for
that purpose, my contribution is lot and
yours is the profession, edi pagkatapos o
nabenta na, accomplished na ang purpose.
 5. Expiration of the term/period agreed upon
of the partner- kunwari ang napag usapan e
10 yrs, thats the end of the partnership.
Ngayon, balikan ko lang, when the partner dies,
when he becomes incapacitated, ngayon the
surviving partners may continue the partnershuip
business, the law allows it. When the partner dies
or becomes incapacitated, the remaining partner
may continue the partnership business, but it will
be a new partnership. Kapag namatay ang isang
partner, db sabi ko dissolved na. Hindi na pwede
buhayin pa yun, kasi dissolved na, ipso facto. Ang
tanong, edi negosyo yan db, pwede paba ituloy
ang negosyo na yun? YES, sino mag tutuloy? The
remaining partners. Ngayon kunwaro 3 sila,
namatay 1. Edi 2 nalang natira, yung 2 na yun may
continue the partnership business in a different
partnership. They may use the same partnership
name, kaya lang legally it’s a different partnership,
kaya kung may namatay o kaya nagiging
incapacitated, dissolved na yan, sayang ang
negosyo, kaya yung remaining partners may
continue the partnership business. KAYA LANG they
shall give and deliver to the heirs the deceased his
share in the net assets of the partnership. Syempre
mag liliquidate yan, nung namatay si partner,
magkano ba assets, liabilities, etc, accounting lang
naman yan. Dapat ibigay sa heirs.
O eto, namatay si partner, merong heirs, pwede
bang ituloy ang partnership business with the
heirs? Pwede din, kaya lang it will be different
partnership. Eto kunwari, 3 tayong partners, ako,
ikaw si jose, namatay si jose, edi 2 nalang tayo,
tapos gusto natin ituloy partnership business,
pwede. Kaya lang sabi ko sa into kinakailangan
muna iliquidate muna yung assests and liabilities
and deliver to his heirs, whatever his participation.
O ngayon, kunwari lang, si Jose may anak, si Jose
Jr, sabi nya ituloy natin ang partnership ng tatay,
sabi ko naman sige. Ngayon if you would admit
Jose Jr as a partner, that will still be a different
partnership. Kasi partnership talaga natin dati kay
Jose, kaso namatay sya sya papasok ngayon si
Jose Jr, parehong pangalan yun kaya lang it’s a
different partnership kasi when the partner dies, or
incapacitated or insolvent, that dissolve the
corporation.
Kaya nga if merong partnership and that partner is
admitted legally that would be a new partnership,
kasi dati 3 tayo, anak ni Jose gusto sumali yung
isang tao, ok permitted. While the partnership may
be the same, but its a diff partnership kasi before
3, now there are 4. Kaya hindi maaring
magkapareho, iba sa corporation, sa corpo, kahit
na thousand na SH mo, there’s no change in the
corpo. Yan ang pinagkaiba, sa partnership,
mabawasa, madagdagan e dissolved! Kung
mabawasan, the remaining partners may continue,
that’s a diff partnership while it may still be use the
same partnersship name. Kapag nadagdagan, bago
na yun, although using the same partnership name.
Sa corpo, in and out ang SH and there is no effect
in the existence of a corporation, but in a
partnership, once a partner dies, becomes
incapacitated or withdraws, that’s the end of the
partnership. And if the partnership admit new
partners, using the same partnership name, then
it’s a diff partnership.
Basta kapag merong namatay na partner.
Incapacitated o withdraw, the remaing partner may
continue the partnership business, yun nga lang
dapat liquidate and deliver to the heirs.
May marriage dissolve a partnership? Kunwari
babae at lalake, naging partner sa business, the
partner become very good and the relationship
become better, and they marry each other. Does
their marriage dissolve the partnership? NO.
Marriage is not a mode of extinguishing
partnership.
Ngayon, ano pinagkaiba ng
A partner assigning to another his interest in the
partnership and the other is a partner associating
another with him?
Anto ha, 3 tayong partners, 1 ako. Yung brother ko
ang kulit, sabi “bro gusto ko naman kumita, isali
mo ako dyan”yung akin partnership is my property,
ang tanong pwede ko ba ipasa yung partnership
kay brother? No. my brother wouldn’t be admitted
as a partner without the consent of the other
partners. In short, a partner cannot transfer his
shares to another person without the consent of
the other partner.
Eto naman, tayo. I want to transfer part my shares
to my brother but you are not agreeable, ngayon
kulit ni kuya, so ano nalang pwede ko gawin to
accomodate my brother? I may associate him with
me, ibig sabihin, kung ano nalang ang aking
matatanggap, e paghatian nalang natin kaya lang
di ka pwede maging partner. Kunwari nag contri
ako 1M, sabi ni kuya, bro Sali mo naman ako dyan,
e sabi ko ayaw pumayag nung kasamahan ko e, di
ka nila type, sabi ni brother sige na kuya gusto ko
naman kumita kahit konti. Kaya sabi mo sige sige
ganto nalang gawin natin eto usapan lang nating
dalawa eto ha, di ka magiging partner dito. Bigyan
mo ko 500k, kung ano man magiging share ko sa
profits, hati tayo, yan ang association. A person
may associate another but a person who is
associated does not become a partner. The
arrangement is just private between the partner
and associate. Kaya kung ikaw yung associate,
wala ka karapatan EXCEPT when the partnership
has been dissolve and you will be entitled to
receive your share as an associate. Kaya lang di ka
magiging partner, wala ka karapatan silipin ang
libro ng partnership.
Ok about limited partnership, dati it was common.
Not anymore. The reason is syempre naabuso.
How do you form a limited partnership?
Alam nyo mas mahirap magtayo ng limited. Why?
Kasi kung mag organize kayo ng limited
partnership, you have to prepare the Articles of
limited partnership in the form provided by law,
parang nagtayo ka ng corpo. Kaya basahin nyo
yung NCC on how to form and yung contents of
limited partnership.
For a general partnership, no need to observe any
form.
Ngayon, how will you recognize a limited
partnership? By looking at the partnership name.
Becaue the name of a limited partnership ends with
the word limited. Kaya meron kayong makikitang
all limited partnership. Ex. Ortigas Ltd.
When you are forming a limited partnership, dapat
meron isa man lamang general partner. It cannot
be all limited partners. Dapat meron kahit isang
general partner and unlimited numbers of limited
partner.
And as we said earlier, a limited partner will not
participate in the management of the partnership
or if you were to participate in the management, he
shall be liable as a general partner.
Nakalimutan ko sabihin, yung articles of limited
partnership, should also be filed with the SEC.
Hindi pareho ng general partnership, kahit walang
Articles pwede. Hindi kagaya ng limited na hindi
pwedeng wala.
When performing a general partnership, it can be
done orally. Kaya nga as a rule, if u form a limited
partnership and the partners, general and limited
should execute the artciles of limited partnership
with the SEC.
The limited partnership, halimbawa, ako general,
ikaw limited. And then later, others would like to
join, walang problema. Additional general partner,
or additional limited partner may be admitted
simply by amending the articles of limited
partnership.
What makes the dissolution of a limited
partnership?
Well same causes as dissolution of a general
partner.
AGENCY
- By the contract of agency a person binds
himself to render some service or to do
something in representation or on behalf of
another, with the consent or authority of
the latter.
So how is agency created? Depends on the powers.
Agency can be oral, it can be in writing. The
agency could be oral or in writing. If in writing, it
should be in public instrument. Halimbawa, right
now pinakiusapan kita “friend paki bili naman ako
bottled water.” Hindi naman na kailangan ng SPA.
Papabili lang tubig mag sspecial power of attorney
pa. Sabi mo friend kailangan ko ng pera, ibebenta
ko yung lote ko sa pasay. O pwede na ba yun?
Hindi. Kailangan in writing. Anong writing? Public
instrument.
So agency can be created by mere agreement
orally or in writing, when we say in writing it could
be a private or public instrument. The written
instrument is also known as power of attorney.
And the power of Attorney could be a general or
special Power. Tanong ano kaya mas mabuti?
Depende sa gagawin. If the authority may be
delegated by the principal to the agent involves act
of management or administration, we call it
GENERAL POWER.
But when the authority may be confirmed by its
principal and agent involves act or acts of strict
dominion, you may call it as a SPECIAL POWER.
Ang nakalagay sa document general power of
attorney. Kaya lang among the acts authorized by
the principal is to sell a parcel of land in Pasay City,
to sign the deed of sale, to pay tax etc. ang
tanong, anong klaseng power yun? Special yun.
Sabi ng SC, it is not how the power of attorney is
called, but its nature of powers conferred. Kaya
kahit nakalagay e special power e ang authority
naman is simply to receive, to pay, general power
yan. And why they call it as a general power but
the authority granted qualify as an act of act of
split dominion, its a special power.
Ano ba yung mga acts of strict dominion? Para
madali matandaan. Yung acts of ownership that
includes encumbering and disposition. E kung to
buy? Special o general? Buying is not act of
disposition. Kaya pwede na ang general power.
Kaya kung to sell, mortgage, encumber, donate,
they are acts of disposition. Power to lease of more
than a year is an act of disposition.
An agency is a contract. The person authorizing is
called the _____ and the person being authorized
is called an agent. Now, an agency is a contract,
both parties should’ve capacity to give consent to a
contract. So if you have to issue a special power of
attorney, you issue a SPA to somebody who has a
capacity to contract. Wag ka mag issue ng SPA sa
minor, wag ka mag issue sa sira ulo kasi contract
yan.
Some rules, very basic rule. The power to sell does
not include the power to mortgage, also the power
to mortgage does not include the power to sell.
Magkaiba yan ha?
Another basic rule, if an agent is authorized to lend
money, he himself may not be the borrower
without the consent of principal. But if the agent
have been authorized to lend/borrow money, he
himself may lend money to principal.
If u were the agent and you’re authorized to lend
money, what are your obligations to the principal?
If the agent were authorized to lend money, he
should not lend it to anybody. He should exercise
good disposition. He shouldn’t lend money to an
insolvent person. And after lending money, he
should deliver to the principal the credit
instrument.
Nung tnurn over ni agent sa principal yung credit
instrument, sabi ni principal bakit mo pinautang si
jose. Walang pera yan. Sabi bi agent, kilala ko yan
mag babayad yan. Sabi ni principal, sigurado kang
mag babayad to? Sige ganto ha. Ill give u
additional 1% as a commission, i-guarantee mo
yan. Si agent naman very confident, he guaranteed
the loan to jose. Ang tanong, how many
commissions will the agent receive in that
transaction?
For lending, meron syang commission doon. For
guaranteeing, he will be receiving another
commission and thats what we call a guarantee
commission.
Kaya kapag nadinig nyo yang guarantee
commission, it is the compensation that the agent
shall receive for guaranteeing the money of the
principal that needed.
I forgot to mention earlier that Agency may be for
onerous or may be for free. It may be onerous or
gratuitous.
Another rule, an agent that is authorized to sell for
cash should not sell on credit.
Another basic rule about agency is when an agent
acts and carry out the agency to principles. He
must disclose his principal and he must act within
the scope of his authority. If he would do both he
should not be liable for any miscarriage on the part
of the principal.
Pag sinabing discloses principal. Dapat sasabihin
nya kung sino ang kayang principal. Not enough
that the agent discloses himself merely as an
agent. Dapat sasabihin nya kung sino ang kanyang
principal, kaya kung pipirma sya ng kahit anong
contract e dapat ilagay nya pangalan ng principal.
Not enough that he signs with his name, kailangan
“agent of” then he become liable in case the
principal does not comply with his obligation.
Now, earlier i said that the agent must act within
his authority, ngayon the law is very clear that if
the agent had carry out the agency in a manner
more advantageous to the principal, the agent shall
not be consider that the agent exceeded his
authority. O sabi ng principal, o friend yung lote ko
benta mo na 1M, cash. So the agent to carry out
the contract of agency sold the property for 1.2M
cash. Does that considered as exceeded his
authority? NO. Because he carried out the agency
in a manner more advantageous to the principal.
Kaya lang ang authority ng agent sir approve ang
1M cash, ginawa naman ng agent binenta 50%
lang, may balance, 2yrs to pay. Then it is
considered as the agent exceeded his authority and
the principal may not honor his contract.
Question. If the agency is for compensation or
onerous when shall be the agent be entitled to the
stipulated compensation?
If the agency is for compensation in a onerous one,
the agent becomes entitled to his stipulated
compensation as soon as he carry out the agency.
Kaya kung halimbawa ako principal sabi ko friend
pki hanap mo nga ng buyer yung lote ko. 1M cash.
Authority mo is took for a buyer hanggang april 15
2019. In short, you look for a buyer and you’re able
to find one. Sabi mo sa akin friend may buyer nako
kailan tayo magkikita? Sabi ko after holy week. E
sabi mo friend e hanggang april 15 lang ah? Sabi
ko hindi, after holy week na. Tsaka na tayo mag
pirmahan. In short, yung authority db nakalagay
hanggang april 15 lang, ngayon there was no
written authority issued. Ang tanong kung magkaka
pirmahan, kung magkakatuluyan sa bentahan after
april 15. If u were the agent, will u be entitled to a
stipulated compensation? YES. Basta ganto as soon
as the agent is able to carry out the agency in the
manner agreed upon, the agent become entitled to
the stipulated compensation.
Ngayon sinasabihan moko friend may nakita akong
buyer ready na kasama ko na ngayon, sabi ko nag
bago na isip namin ni misis. Di na daw namin
ibebenta. E you exerted efforts, gumastos kana
din. Then the agent becomes entitled to a
compensation. Kaya nga sabi ko the rule is very
simple, the agent is entitled to a stipulated
compensation as soon as he carry out the agency
in the manner agreed upon.
Eto mistake. Nag papabenta ka lote and the agent
wants something in writing to show his prospective
buyer that he is authorize. Wag ka gagawa ng
authority to sell, lagay nyo authority to look for a
buyer. Kasi kung meron kang authority to sell at
maganda pa pagkakagawa non, baka lumabas yun
na SPA. Kaya yung inauthorize mo pwede din sya
pumirma ng deed of sale. Kaya ang gagawin mo
lang is to look for a buyer.
But if i authorize you to sell and it was nicely
rewarded, it may be taken as an SPA.
Now how may a agency be extinguished?
 If the purpose of the agency is carried out.
The agency is extinguished or
 Upon the expiration of the stipulated period.
 Accomplishment of the purpose
 Revocation of the agency- the agency
should be revoke in the manner the agency
it was created.
 Withdrawal by the agent
 Death of agent
 Loss of the object of the agency
Question. What about the death of the principal?
Death of the principal, may not necessarily
extinguish an agency especially if the agency is
coupled with an interest.
So ano example ng agency being coupled with
interest?
It means that the agency was created purposely for
the benefit of an agent.
Ganto yan, kunwari may utang ka sakin 1M. Gusto
mo ko bayaran ang problema you dont have the
means. Sabi mo nga friend gustong gusto kita
bayaran, in fact yun ngang lote sa pasay binebenta
ko na para mabayaran ko utang ko sayo. Sabi ko
sayo, friend ganto tulungan nalang kita mag hanap
buyer. Kapag nakakita ako, yung proceeds
pambayad utang mo sa akin then kapag may sobra
edi sayo. Sabi mo sige friend. In short, u prepare a
SPA. Ngayon para naman nakaka siguro ako na
kung may mangyare sayo e tuloy pa ang agency
para makasingil pa ako, ipalagay mo dyan “coupled
with interest.” Kapag ganun mamatay man si
principal, the agent continues.
CONTRACT OF DEPOSIT
By a contract of deposit, a person known as a
depositor delivers to another known as a depositary
a personal property for safekeeping.
Depositor and depositary are the parties to a
contract of deposit
Depository- yan yung lagayan. Best example a
warehouse yan ang depository. Yung depositary,
yan yung tao.
Object of a deposit is a personal property, unless it
is a judicial deposit which may include real
property. Now a contract of deposit is a real
contract, meaning it is perfected only if the object
is delivered by the depositor to a depositary. So
deposit is one of a real contracts.
Real contracts are perfected not by mere consent
of the parties but by delivery of the object of the
contract by one party to another.
Now, a deposit may be onerous or gratuitous. Lets
say you are going abroad kaya sabi mo sa sis mo,
sis meron ako ditong rolex watch. Pwede bang
ikaw muna magtago habang nasa abroad ako.
Baka itakas ni inday. Sabi ko sige sis pero pwede
ko ba gamitin baka mag stock up ang pyesa kung
wala gumagamit. Kung wala agreement pwede,
kasi it is to preserve the property. Sagot mo naman
ay sis hindi, makapal kaha nyan de battery yan
kaya di mo pwede gamitin.
Ok example of onerous contract of deposit. Dun sa
port area madaming warehouses. There are many
businessmen who do not own their own
warehouse. Ngayon there are people who are
engage in the business of warehousing. Very
prominent ito. Kung
Magagawi kayo sa JP Rizal sa makati malapit sa
Sta. Ana, meron dun puregold, on the other side of
JP Rizal andon yung very big structure ang
pangalan Storage Solutions. Ngayon, well dati ito.
Yung pasong tamo extension, yung mula edsa
papuntang fort boni madami kayo makikita
warehouses. In fact dati yun ang karamihan ng
structure don. But now may disappeared at ganon
din sa pioneer sa mandaluyong. Karamihan ng
structure dati warehouses. Some of them, factory
buildings. But then again, many of them
disappeared because of big demand of
condominium.
O example. Sa airport, kung pupunta ka ng airport
tapos gusto mo ikaw mag drive sayo papunta. Saan
mo ipaparada? Dun sa park and fly. If u are going
to fly for a day or three. Dun mo iparada, or may
kotse ka and you’ll be away a month, sa park and
fly. For 330/day atleast secured. Yan ang example
ng deposit at yan sigurado onerous.
Now sa mga storage warehouses, depending what
kind of warehouse it is. Merong tinatawag na
refrigerated warehouse. Kadalasan yan yung mga
ice plant. O yung ibang byahero ng isda, pag di
nabenta dun nila tinatago.
Ngayon, what law governs the service of
warehousing? Warehouse receipts
So that’s the law governing. Pero yung law na nag
ggovern about business of warehousing is the
general bonded warehouse act.
So what government office issued? DTI.
So if you want to engage in the business of
warehousing, 1st thing you should do is to go to
DTI under the general bonded warehouse act.
Dahil warehouseman kana, you issued warehouse
receipts, that’s the time that the warehouse receipt
act governs.
Hiwalay yang law na yan ah. Maliwanag?
In a contract of deposit, personal property is
delivered by the depositor to the depositary.
Question, may the depositary use the thing
deposited? The rule is the depositary should not
use. UNLESS
0. Permitted by the depositor or when
the use of the thing shall be necessary to preserve
it. Ngayon best example of have it use to preserve
it if u have a car and u will be away for a long
period then u should make an arrangement with
the depositary that the depositary uses the thing in
order to preserve it.
What’s the obligation of the depositary at the end
of the use of the deposit? To return the thing to
the depositor. On the part of the depositor, pay the
charges if the deposit is onerous.
Now, what is the relationship of a bank and a
depositor? Ang tawag dun sa nag dedeposit sa
bangko, depositor. Ang relationship nila hindi
talaga deposit yun. It’s a contract of loan actually,
where the bank is the borrower and the depositor
is the creditor. As provided for in the NCC, the
relationship of the bank and depositor is debtor-
creditor.
Question. If u deposited money to a bank and that
bank was ordered close, due to insolvency. May
you sue the bank? Wala na. May PDIC na eh,
walang demanda dyan. Para malinaw,
Pedro made a money market placement with a
bank but that bank was closed due to insolvency?
May he recover form PDIC? NO. Kasi iba ang
money market placement, it’s not the same nature
as deposit.
Money market placement, para alam nyo this is
securities. Yung may mga may time deposit
sasabihan yan sa bangko, “Ma’am gusto nyo
kumita ng mas malaki? Mag money market
placement kayo, bigyan ko kayo 3% per annum.”
Kasi kapag time deposit, 1% per annum lang. In
short that’s better. Pag naka time deposit ka, yung
time deposit mo naka insure sa PDIC. Kaya lang
kapag ikaw ay nag money market placement hindi
na ganun ang relationship. Kasi kapag money
market placement, ganto ha. Ikaw yung bangko,
ako yung may pera. Meron ka time deposit, and
you were convince by the officer, sir money market
placement natin yan. Pumayag ka naman.
Unfortunately nasara ang bangko, sabi ko sa inyo
kanina, hindi covered yan ng PDIC. Kasi sa money
market placement, yung bangko lumalabas
intermediary lang between the person with a
money and another person who needs money. Kasi
yan, kunwari SMC nangangailangan ng so much.
Ang gagawin ng SMC kakausapin ang bangko.
Bangko kailangan ko ng 20M pang payroll lang,
nahirapan sa collection eh. 60 days lang. ang
gagawin ng bangko ngayon mag hahanap ng
depositor na madaming pera, or kung hindi kaya ng
isang tao. Hahanap ng ilang deposits who’s willing
to invest in a money market transaction. So sige
payag kayo. Lalabas na ang bangko intermediary
lang yan, yung pera ng dating depositor
ipapautang sa SMC. Kaya transaction nyan yung
may pera debtor, creditor SMC. Yung bangko,
intermediary lang, di covered ng PDIC. Ang
covered lang ng PDIC ay between deposits
between debtor-creditor.
Balik tayo sa bangko. Sa bangko, not in all, in
many. Inside their vaults, what we call safety
deposit boxes. Yang safety deposit box, it’s a metal
facility may mga small Boxes tabi tabi yan and you
want to make use of any of them, you lease it. Ano
ba relationship ng bangko which owns a safety
deposit box and a person who wants to make use
of the box? Actually the relationship is a contract of
lease. Kasi kung ako bangko, at gusto mo gamitin
yung box, you lease it to me and pay the rentals.
Matanong ko kayo, kapag contract of lease. Ano
ang obligation ng lessor?
There was a case involving safety deposit box,
merong isang tao whose hobby is to collect post-it
stamp, I’m one of those. Ok so this case,
inarkehalan pa yung pinaka malaking box sa
bangko, yung safety deposit box. Yung bangkong
yun is in chinatown, malapit sa escolta. There was
one rainy season, bumaha ang escolta at nearby
streets. Ngayon lumubog yung safety deposit ng
bangko, yung collection na damage. Nag demanda,
depensa naman ng bangko fortuitous event. Kaya
lang sabi ng SC, still you are liable. The SC said
when you talk about safety deposit boxes, it is a
special contract of deposit.
Ngayon, kung mag ccheck in sa hotel and you don’t
bring your valuables and you go out, san mo
ilalagay? Ganto ah. Depende kung saan mag
ccheck in, kung sa mga 3-5 stars probably may
mga safety deposit na nakahanda, libre yon. E
paano kung wala safety deposit box? Saan mo
iiwanan? Under the law, inform the management or
hotel keeper of your valuables and comply with
their instructions. Only then, when you comply with
the instructions, that the hotel keeper would be
liable for the loss of the valuables.
Merong tinatawag na necessary and judicial
deposit, also known as sequestration.
Best example, if there is any property in custodia
legis, that shall be deposited to the court until
the court resolve the issues involving those
properties. And as i mentioned, deposits generally
involved personal property except judicial property
where custodia legis could be real property.
In short, how do you put in custodia legis a real
property?
If the property is covered in a torrens title, cause
the annotations of a notice of a lis pendens.
If you want to cause of annotations of lis pendens?
Do u still need a court approval? No. All you have
to do is to file a request with the register of deeds
that a notice of lis pendens be annotated and be
attached a copy of complaint.
O natapos na yung kaso, nanalo ka. The complaint
was found not meritorious. Naka annotate na yung
lis pendens don, what will you do to have the
notice of lis pendens lifted? Then a court order is
needed. The decision of the court dismissing the
case had become final, the owner of the property
files in the court a motion for the lifting of lis
pendens.
Purpose of sequestration is to preserve the
property.
LOAN
A loan would be over consumable or non-
consumable. It if it’s a non-consumable, we call it a
commodatum. And if it is consumable like money,
we call it mutuum.
There are loans that a commodatum over a
consumable, but only if it is for display or
exhibition.
COMMODATUM- essentially gratuitous. Meaning
in essence ay walang babayaran, the reason is if it
is onerous, meaning something that would pay for
its use, non-consumable, it’s a lease.
Kapag commodatum, yan ay libre.Ano ang ibig
sabihin ng in essence libre? Well, it’s amount would
have been charge for the use. Halimbawa, etong
campaign period, I have a property sabi nung
candidate, friend pwede bang mahiram yung
sasakyan mo? Sabi ko sige, tanong sakin e
magkano mo naman ako sisingilin, e sabi ko friend,
sige na pang maintain lang ng gulong. 1k nalang,
for the whole campaign period. Db parang libre na
un, yun ang ibig sabihin ng essentially gratuitous.
Now, what are the obligations of the
borrower?
To use the thing according to its purpose, and to
return the thing to the lender according to the
agreement.
Who bears the ordinary wear and tear? The
owner. Also lost shall be borne by the owner.
The only time that the borrower would be
liable for damages are
- When he devolves the thing subject of
the commodatum to a purpose added
that for which it was intended.
Halimbawa hiniram mo yung kotse ko,
ginamit mo pang hakot ng hallow blocks,
edi masisira yun and also
- When the borrower fails to return the
object within the agreed period. Ganto
yung basic principle for default.
Question: this is usually overlooked. How do you
call the loan if the agreement with the
borrower is that the later needs to return
only when the lender demands the return of
the thing? Ano tawag dun sa transaction? It’s a
loan, commodatum, and the agreement to the
borrower is that he has to return the object when
the lender demands it? Precarium.
MUTUUM- is a loan over a consumable. And it is
also when the object is money, when you talk
about mutuum, it could be onerous and gratuitous.
Example, very common to. Kapitbahay mo kumatok
sayo, may dalang empty cup, sabi bff pahiram
naman ng asukal. Naubusan kaya kailangan
manghiram, sarado pa ang market.
Ok, so if that is the transaction, what is the
obligation of borrower? At the end of the mutuum,
the borrower has to deliver to lender another thing
of similar kind and quality. So kapag ang hiniram
mo ay brown sugar, dapat isosoli mo rin brown
sugar.
What if the mutuum is over money? Then the loan
could be onerous or gratuitous. Kapag onerous,
how do you call a compensation for the use of
money? Interest. It is the compensation for the
use of another’s money.
When is interest due? Interest is due when 1.)
stipulated in writing; 2.) When the borrower
incurred in delay.
Also remember that there is also a later provision
that the damages in case the obligation is for sum
of money is payment of interest.
Lawful interest- when the interest agreed upon
is in accordance with law. Kaya ang tanong, anong
opposite ng lawful interest?Usurious interest.
So interest could be lawful or usurious. Usurious
when it is more than interest the law allows.
The person knows that lawful means legal. But
when you talk about lawful and legal interest, they
are not the same.
Lawful interest, as I said earlier is the interest
agreed upon in accordance with law. On the other
hand, when we say legal interest, it is the rate of
interest which shall be paid in the absence of any
stipulated rate.
Usury- it is a contract of the payment of interest in
excess of that allowed by law. Kunwari, the usury
law allows up to 14% per annum, and you agreed
on 16% per annum. How much is the usurious
interest? Yung buong 16%, hindi lang yung sobra.
The stipulation is indivisible. Hindi naman sinabing
14 + 2, ang pinag kasunduan 16% which is more
than what the law allows. Kaya ang usurious, it’s
the entire rate agreed upon because it is an
indivisible stipulation.
As of now, we still have the usury law, except that
it is not in effect. And for now, there could be no
usury because there could only be usury if there is
a law or regulation fixing the highest rate of
interest which the parties may agree on. Kaya lang
for now, since the 80s, the central bank has
allowed market forces to determine interest rates.
Dati kasi, well we have naman the usury law, hindi
pa yun narepeal, yun nga lang, you cannot have
usury, as I said earlier, when we talk about usury,
it is contracting to the interest at rates more than
what the law allows. Kaya nga for now, walang
rates of interest at a certain rate. Kaya legally, we
can agree on any rate of interest kaya lang, SC
regulates this act of collecting interest because the
SC have made recent rulings that when rate of
interest are excessive, they are considered as
immoral and as it is immoral, it’s void.
If you are in lending business, and you want to
maximize the earning on whatever you want to
lend, I would suggest that you charge interest
according to the usury law, para walang issue.
Ano ba ang interest according to usury law?
If the loan is secured by titled real property, the
maximum interest rate is 12% per annum. And
all other loans, unsecured, secured by personal
property, by mortgage over untitled real property,
14% per annum.
LEGAL INTEREST- the rate of interest which has
to be paid in the absence of any valid stipulation.
And that for now, following a circular from
monetary board, it is 6% per annum.
Question: is 12% per annum the same as 1%
per month? Pag sinabi nyong yes, you have the
mind of a justice of a SC, which is wrong.
Kasi kapag sinabi mong 12% per annum, that’s
12% over 365 days, at kapag sinabi mong 1% per
month, that’s 1% over 30 days. Which is slightly
higher. Kaya kung gusto mo makasingil ng malaki
laki, 1% per month.
Compounding of interest- it simple means
interest already accrued for as long it has not been
paid, also an earns interest.
Question: When there could have been a
compounding of interest?
1.) When so stipulated by the parties in writing;
2.) When the debtor fails to pay the stipulated
interest.
Loans involving money, may be secured or
unsecured.
Question: What may secure mutuum over
money?
1.) Guarantee or suretyship;
2.) Pledge;
3.) Motgage;
4.) Antichresis.
In credit card companies, if you don’t pay the
entire amount of your statement, you’ll be charge
at the rate of 3 1/2 % per month. Yung iba meron
pang penalty, yung penalty naman, at the rate of
2% per month. If you want to retain yoiur cc, you
have to pay. Kaya lang kung wala kana pambayad,
and no choice but to give up the card, you can
refuse to pay at those rates kasi, SC made a ruling
dun sa BPI CC case, sabi ng SC 3.5% per month is
excessive, so ang ginawa ng SC nireduce ang
interest to only 1% per month. Ngayon yung
penalty, it accrues when you can’t pay any amount,
that’s 2% per month, sabi ng SC that is also
excessive, so the SC fix that in the same case that
is now 1% per month. So following the ruling of
SC, interest 1% per month, penalty 1% per month.
Kung may mga demand letter na kayo, para di
masira image mo, offer to settle kahit principal lang
bayaran mo.
GUARANTEE- one of the collaterals. Kapag
guarantee, that is a 3rd person who binds
himself to answer for the obligation of the
principal debtor. And the requirement of Statute
of Frauds is, that the guarantee should be in
writing. So if the promise of a 3rd person to answer
the obligation of another is not in writing, it’s valid
but unenforceable.
If the guarantor had bound himself solidarily with
the principal debtor, it is no longer a guarantee but
a suretyship.
Ano advantage ng guarantee in so far as 3rd person
is concern over being a surety?
The liability of the guarantor is not solidary. And
the law has a right for the guarantor, which right is
known as benefit of excursion or exhaustion of
assets.
Question: What is the benefit of
excursion?Simple means that before a guarantor
is obliged to pay, the creditor should first exhaust
all the assets of the principal debtor.
How is benefit of excursion availed of? NCC
provides that it could be availed of by the
guarantor by setting up at the earliest opportunity
and by pointing to creditor sufficient assets of the
debtor which could be used to satisfy the claim of
the creditor.
This benefit is not available to a surety. Because a
surety binds himself with the principal debtor, kaya
kung ikaw ay surety ang liability mo at direct o
primary. Samantalang kapag guarantor ka,
subsidiary.
So very basic rules, applicable to both guarantee
and suretyship. The guarantor or surety, shall not
be liable for more than the obligation of the
principal debtor.
Another, if the obligation is with period, so that the
guarantor or suretyship would not be extinguish,
the consent of the guarantor or surety should be
obtain in extending the period of the obligation.
The law is very clear that when the
guarantee or suretyship shall be extinguish,
when?When the creditor extends the period of the
guarantee of suretyship, without the consent of the
guarantor or surety.
Kaya kung ikaw ang creditor, nakikiusap si debtor,
sabi pwede ba another 1 month? If u want a
guarantor or surety to be bound by the extension,
then get his consent, because extension of term of
guarantee or suretyship without the consent of the
guarantor or surety shall extinguish the guarantee
of suretyship.
Kaya lang there also a rule of the SC that if the
creditor did not enforce the obligation immediately,
halimbawa, due kahapon, hindi naningil kahapon,
di yan consider as extension. Kapag sinabing
extension, pinag usapan talaga that he period to
perfom the obligation shall be on another day. So
the SC rule that failure of the creditor to enforce
the obligation on the date agreed upon, shall not
be considered as an extension of the term of the
credit.
When the guarantor or surety has to pay/paid, the
guarantor or surety have been subrogated to the
right of the creditor in enforcing the obligation
against the principal debtor. Kapag naobliga na
mag bayad si guarantor or si surety, kasi kanyang
contractual obligation yun, and the guarantor or
surety had paid such payment, there is legal
subrogation. The guarantor or surety now becomes
the new creditor of principal debtor.
The guarantor or suretyship could be onerous or
gratuitous.
Question: Yun bang suretyship, is it a contract of
insurance? No. Suretyship per se is not insurance,
why? Because insurance is a risk distributing
scheme while suretyship is a risk shifting device. Sa
insurance meron ding suretyship, kung babasahin
mo sa insurance nakalagay dun, suretyship
becomes a part of the insurance business of an
insurer, still not an insurance. May mga insurance,
walang suretyship,di sila nag iisue ng bonds.
Earlier I mentioned that personal property could be
used as collateral. So if personal property could be
used as a collateral, the collateral could be called a
pledge, or if not, chattel mortgage.
We have RA 11057, the personal property security
act, publish august 2018. Ngayon, it repealed a
number of provisions in NCC, many or substantially
in the chattel mortgage law. Ngayon, the laws are
already published, kaya lang not yet effect.
Nakalagay dun RA 11057, it takes effect after
issuance of IRR e until now wala pa. So di na muna
natin yan pag uusapan yung pledge at chattel
mortgage kasi wala pa yung IRR.
REAL ESTATE MORTGAGE
What are the laws on REM? NCC, Act 3135 as
amended. Let us now talk about the provisions of
NCC on REM.
Basic principles:
- A mortgagor shall be the owner of the thing
mortgaged.
- A mortgage is just an accessory contract, so
it may legally exist if there is a principal
contract.
- When the principal mortgage is
extinguished, the mortgage shall be
extinguished.
Every mortgage over real property, whether
covered by torrens system or not, must be in
writing. Walang oral na mortgage and the property
must be sufficiently describe.
Now, there would be no problem if only the
principal debtor comply with his obligation with
creditor. Problem arises when the principal debtor
defaults.
Question: When the principal debtor defaulted
what are the remedies of the creditor?
1.) To sue for specific performance, but when
then creditor sues for specific performance,
legally he abandons the mortgage.
2.) Foreclose the mortgage and question, how
may REM be foreclosed?
- Judicially or extra judicially
Judicially pursuant to 1997 Rules of Procedure, and
extra judicially pursuant to act 3135 as amended.
Act 3135, as amended- This law authorizes the
extra judicial foreclosure of REM and prescribes the
requirements for that.
That law refers to the code of civil procedure on
how to go about it. Kaya lumalabas the law just
created the right, and prescribes what is necessary
so that right could be exercise. Kaya lang kung ano
ang gagawin, it referred to the ROC particularly
rule 39, execution.
Requirement of Act 3135, to enable a
mortgagee to foreclose an REM extra
judicially:
In the deed of mortgage or in a separate
instrument, the mortgagor must expressly
authorize the mortgagee to sell the property
mortgage in case of default- it must be strictly
complied with.
Kaya kung sa deed of mortgage, walang express
authority to sell, di pwede extra judicial foreclosure.
Ang nakalagay dati sa deed of mortgage ng
bangko, mali nga at kinopya ng iba, “in case of
default, the bank may close the mortgage
extrajudicially pursuant to act 3135, as amended.”
Later the SC issued a circular addressed to all
sheriffs, providing that do not handle extra judicial
foreclosure when there is no express authority to
sell. After that circular, yung mga sheriffs di
makagalaw kasi it is addressed to them. So yung
mga bangko nag revise, ang masama namn yung
other lending institutions, di alam yun so di nila na
revise yung forms. Kinakailangan yung forms
naklagay, “the mortgagee shall be authorized to
sell, as he is hereby authorized to sell.”
So sa deed of mortgage meron nakalagay, and the
principal debtor defaulted, and the creditor decided
to foreclose the mortgage, question: how is it
done?
Ganto yun, ikaw yung mortgagee, the principal
debtor defaulted and he opted to foreclose the
mortgage extra judicially, so ganto:
The mortgagee prepares a verified petition to
foreclose the REM pursuant to 3135 as
amended. Ito ang ironic, the proceeding is extra
judicial meaning out of court, kaya lang you have
to pay court fees to COC.
Yung court fee will form part of judiciary
development fund, then the petition will be assign
to a sheriff, yung sheriff prepares a notice of
auction sale, ano gagawin dun sa auction of notice
sale? Dalawang bagay.
- Posting in atleast 3 public places in the city
or province where the property is located.
- Publication in a newspaper of general
circulation in a city or province where the
property is located atleast once a week for
2 consecutive weeks.
On a practical note, kung ikaw ang gagawa ng
REM, be sure that the property is correctly
describe. Kasi kung halimbawa, yung mga lumang
titulo, yung owner’s duplicate, Malabo kasi
ginagamitan ng carbon paper. Kasi yung sheriff
binabase yun sa petition, e mali, na ipost, na
ipublish, mali. That will invalidate the proceeding.
Pagkagawa ni sheriff ng notice sale, humingi ka ng
kopya, tignan mo kung tama.
Eto problema, tama yung auction sale, as posted,
ngayon, syempre ipapa dyaryo, mag bibigay si
sheriff ng isang kopya to the publishing.
Kinakailangan bago mag auction, secure the copies
of the issues where notice was published kasi baka
si publisher naman ang nag kamali that will
invalidate the proceeding.
Actually di naman kinukuha ng sheriff yung draryo,
ang kinukuha nya lang yng affidavit of publication,
yung draryo, should be retained by the mortgagee.
So naka schedule na ang mortgage sale, usually,
the mortgagor won’t show up, unless he intends to
settle and postpone the auction sale and promise
to the mortgagee na babayaran na nya within 2
months. Si mortgagee pumayag kasi gusto din nya
makuha pera nya, e dumating ang 2 months, so
hinahanap mo si mortgagor, di dumating, sa galit
mo pinasubasta mo. Question: May that sale
validly proceed on the date agreed upon of
the mortgagor and mortgagee with the
sheriff? NO. Unless the posting and publication
requirements are repeated, that’s the ruling of the
SC.
Saan ang publication?Newspaper of general
circulation where the city or province of the
property is situated. For your info, sa bawat
province, even in cities, merong newspaper of
general circulation, a copy of which you have not
ever seen. Para malaman nyo, ganto, ask the COC,
ano ba yung mga accredited na newspaper of
general circulation. Ngayon, merong raffle yan
kung saang publisher iaassign.
Kapag auction, if you intend to join, bring cash and
pay right away the bid. If the highest bidder is the
mortgagee himself, he doesn’t need to bring any
amount kasi yung ibid nya shall be credited to his
total claims.
You were issued the certificate of sale, kasi ikaw
highest bidder, the highest bidder should asap
register to RD. Kasi merong right of redemption,
and it could be exercise by some person with a
period of 1 year from registration of his certificate
of sale.
What is the period of redemption? 1 year.
Who may exercise of right of redemption?
-Mortgagor,
- His successors in interest or
- Judgment creditor of the mortgagor.
Yung right of redemption is a property right, it is a
real property arising on law on property.
Question: how does one exercise a right of
redemption?
By making a valid tender of redemption price to the
highest bidder.
Question: Ano yung valid tender of
redemption price? Sabi ng SC, to be able to be a
valid tender of redemption price, it should be full
amount of redemption price. So a tender for a
lesser amount is not valid.
May a court issue a TRO to stop the auction
sale? Yes, with conditions, an rtc may issue a tro
to stop an auction sale on the ff conditions:
- If in the complaint, with motion for issuance
of TRO, the principal debtor or mortgagor
alleges that the obligation has been fully
paid and attaching to the petition a proof of
full payment. Or
- The complaint states that the interest being
charge by the mortgagee is excessive. In
which case, the TRO could only be issued
when the mortgagor or principal debtor full
pays the principal and pay interest 12% per
annum.
What is redemption price? We have different
rules on this.
1. If the mortgagee is a GOCC, and its charter
provides for the amount or redemption price
then that is the redemption price.
2. If the mortgagee is a bank, and the highest
bidder is the bank, the redemption price is
what was agreed upon in the
mortgage/loan document.
3. If the mortgagee is any other person,
redemption price should consist of the
following:
- Bid price plus interest on the bid price with
interest of 1% per month plus taxes and
assessment paid by the highest bidder plus
interest on said taxes and assessment with
interest of 1% per month. Yung total nyan
ang redemption price.
You made a valid tender of redemption price, sabi
ng highest bidder, no I want the property for
myself, kaya kung ikaw yung who made the valid
tender and don’t want to lose the property, what
do you do?
Go to court, anong kaso? Specific performance.
Kunwari ikaw yung mortgagor, and you want to
exercise right of redemption, and you are expecting
enough money that you can redeem. Ang problema
lang yung process of remittance or payment, would
take longer and you may not able to exercise the
right of redemption within 1 year period.
Question: can you go to court and file a
petition for the issuance of TRO, so that the
period of redemption won’t expire? No. No
TRO to stop the running of period of redemption.
If the mortgagor is a juridical person, and
the mortgagee is a bank and the bank is the
highest bidder, the period of redemption is 3
months or before the bank could register its title
over the property, whichever comes first.
Period of redemption not expired, without nobody
exercise the right of redemption. Ikaw yung highest
bidder, now you want a certificate of title
registered in your name kasi kung ikaw yung
highest bidder at earlier binigyan ka ng certificate
of sale, yung certificate of sale nay an iaannotate
lang yan sa titulo ng mortgagor, kung ikaw ang
highest bidder hindi kapa bibigyan ng certificate of
title in your name, kasi yung sale na yun ay
considered as conditional.
The period of redemption had expired without
having anyone who exercise the right, so if you
were the highest bidder, now u want a certificate
of title issued in your name, what do you do? There
are 2 ways:
1.) See the sheriff again and ask him to issue a
final certificate of sale.
2.) Simply execute a certificate of non-
redemption.
This is found in the property registration decree.
That after expiration of period of redemption, the
highest bidder may simply execute a certificate of
non-redemption.
Kung ikaw yung highest bidder, so merong 1 yr
redemption period db, sa cp nyo lagyan nyo na
reminder when it will expire, because there are
taxes that should be timely paid. And if not paid,
meron ka ng 25% surcharge plus 20% interest per
annum and taxes shall be reckoned from expiry
date to redeem. Now you pay taxes to the BIR, you
get the certificate authorizing registration. You go
to the local treasurer and pay the transfer tax, if
you don’t pay, merong surcharge. Also update the
realty taxes, if you have all these documents, go to
RD and register and later on get your certificate of
title. O naisyuhan kana certificate of title, may
problema kapa, si mortgagor ayaw umalis, ano
gagawin mo ngayon? Go to court, file an
ejectment. Anong klase?To file an ex-parte
petition for the issuance of writ of
possession. Sabi ng SC, while it is an ex-parte
petition, its nature is in motion.
Issuance of writ of possession is a ministerial duty
of court, except when in the property, there is
another person who has a better right of
possession.
If you want to qualify as a buy in GF, when
property is offered to you whether on sale or
collateral, you should inquire into who is in actual
possession. So if the property would be transfer to
you whether by voluntary sale or auction sale, then
you do not qualify as a buyer in GF kasi somebody
has a better right of possession.
Sabi ng SC, if the mortgagee did not inquire into
who is the actual possession of property mortgage,
then he does not qualify as a buyer in GF.
Maitanong ko sa inyo, eto common sa provinces,
ako farmer, meron akong 3hectares na lupa, and I
borrowed from u, ang tawag ng mga farmers na
yan, sangla. So sabi ko, isasangla ko muna 1
hectare ko, ang arrangement sa ganyan, habang di
nababayaran anng utang, yung nag pautang, he
uses the 1 hectare.
Question: yan ba ay mortgage?
Sabi ng SC, yes, it is considered as a mortgage
because contracts are also determine by the
custom of the place.
ANTICHRESIS
- In a contract of antichresis, the principal
debtor delivers to his creditor real property
and the agreement is that the creditor shall
be the one to receive the fruits of that
property to be applied first to the stipulated
interest, and if there’s an excess to the
principal.
To be valid, it must be in writing.
Kung walang fruits na ikocollect, hindi yan
antichresis.
Kung ako yung principal debtor, meron akong
house and lot, and I collect rentals. So ikaw yung
aking creditor, sabi ko ikaw muna kumolekta ng
renta, sabi mo naman sige para may income.
Which income you could use to the stipulated
interest, kung may sobra apply to the principal.
Question: syempre yung property depreciates and
needs repair, who bears the repairs and
depreciation?
Creditor. Kaya lang yung cost, shall be taken from
the fruits of the property. Kung luma na yung
property tas yung rental maliit pa, tas meron pa
babayaran interest, tas time to time ang daming
sira, sabi mo at the rate we are going baka
kamatayan ko na ito baka di pa ako makasingil.
Ano gagawin mo? Remedy of creditor? Foreclose
the antichresis, judicial yan.
Based on my lectures, kailan pwedeng magkaron
ng judicial foreclosure?
Pag merong REM and there is no compliance with
3135 as amended, judicial yan.
E sa antichresis? Pag yung transaction, qualifies as
an equitable mortgage, one of them pacto de retro.
TORTS
Also known as quasi delict. The law define torts as
an omission or failure of a person to observe for
the protection of another the degree of care
requires under the circumstances as consequence
of which another suffers damages in the absence
of pre existing contractual relationship.
Ang importante sa definition na yan ay yung
“absence of pre-existing contractual obligation.”
Ganto kasi if you would enter a contract with
another person and you commit a breach of
contract, the other person may suffer damages.
Maaring inasahan nung kausap mo na gagawin mo
yung pinag usapan nyo, dahil inasahan nya, tapos
di ka naman sumunod, naperwisyo sya.
There was a pre-existing contractual relationship
and the other person suffers damages, the action is
based on breach of contract. Kaya lang kung wala
namang contractual relationship and a person
suffers damages because of negligence of another.
The person who is negligent could also be held
liable for damages. Ang tanong, anong basis?Dahil
walang pre existing relationship, walang breach of
contract.Kaya yan ang tort which is also known as
quasi delict. So a person may suffer damages as a
consequence of a breach of contract of another or
because of a omission of another.
Who may be liable for torts?
The person who is negligent may be made liable
for damages.
That a person is liable not only for his own acts but
also for the acts of persons from whom he is
responsible.
If you take a public conveyance, taxicab, bus,
jeepney. Now because of the omission of the
driver, you suffer damages. Questions: sino ang
pwede mo idemanda if you want to recover
indemnity for injuries? Pwede mo idemande yung
operator pwede din driver, kaya lang kung
idedemanda mo yung operator, you’ll basis shall
not be the same basis for suing the driver. Kung
mag dedemanda ka for the injuries, as a
consequence as an omission or negligent of the
driver, pag yung driver ang dinemanda mo, ang
kaso mo shall be based on torts. Kung idedemanda
mo yung operator, your action shall be based on
breach of contract.
Kaya yung action against the driver shall be based
on torts kasi the driver have a pre existing
contractual relationship. Your contractual
relationship is with the operator, kahit di kayo nag
kita ng operator, kaya lang you can sue the
operator because in a contract of carriage, the
contract is between the passenger and operator.
Meron specific provision, nowadays. We buy
everything, kapag nagugutom tayo, di na tayo mag
luluto. So nowadays we buy a finished product, o
nagutom ka, bumili ka ng isang lata ng purefoods
corned beef, di expired ah. Binuksan mo, kinuha
mo yung tinidor, tinusok mo sinubo mo, naku may
thumbs-tack, as a consequence of which, you got
injured. Ang tanong, who you may sue
successfully?
Ang idedemanda mo yung purefoods, why? Yung
manufacturer ang liable. That’s what the law
provides. Yan ang mahirap ang goods na binili mo
imported.
Pag nakita mo ang produkto na may defect, don’t
take the product anymore. Eto factual ito, when I
became a lawyer, a former officemate called me
up. Sabi nya Ed may pagkakaperahan tayo.
Nakabili ako bote ng softdrinks may pako, sabi ko
ano pag kakaperahan natin? Teka sabi ko ininum
mo naba? Sabi nya di pa nakita ko lang may pako.
E sabi ko kung idedemanda mo yan, ang
marerecover mo lang ay yung presyo ng bote ng
softdrinks, magkakaron ka ng damages kung
iinumin mo muna.
Eto factual, so one night after playing tennis. After
playing, inuman ng cerveza yan. I enjoyed taking
beer from the bottle, ngayon ang lamig ang sarap,
yung bote 2 beses ko lang tinaas kaya lang pag
dating sa dulo, may solid, matigas. May kutob na
ako. Paa ng ipis, di na ako nag abala pag
aksayahan masarap eh. Since then pag umiinom na
ako, tinitignan ko muna sa liwanag.
Let’s talk about damages
Yung salitang damages, dalawa meaning nyan sa
law natin, 1.) injuries and 2.) compensation or
indemnity for injuries.
So it is not wrong to say that a person receive
damages for his damages. If you’re going to state
it differently, a person receive indemnity for his
injuries.
What are the kinds of damages?
Actual- also known as compensatory.Anong rule?
Very basic, whoever seeks actual or compensatory
damages, must prove his actual damages.
How do you prove actual damages? Present receipt
in court. Kung walang resibo, you cannit recover
actual damages.
The SC is aware that not all persons care about
receipts. They made a ruling that if you cannot
prove actual damages for funeral expenses, the
heirs of the one who died, they shall receive
moderate or temperate damages, which for now is
P20,000. So the SC taken a judicial notice that if a
funeral expenses could be proven, the plaintiff is
entitled to receive moderate damages or also
known as temperate damages.
Eto maganda, yung moderate damages P20,000.
Kung meron kang resibo, based dun ang
marecover mo, nawala ang resibo, nothing was
presented in court. Kaya lang ang lumalabas ang
nagastos lanb sa funeral is something P11,000.
Kaya tumubo kapa dyan.
What about moral damages - these awards for
serious anxiety, mental anguish, besmirched
reputation.
Do you need proof for you to recover moral
damages? Yes. Oo, ang di mo maipprove ang
halaga but u have to prove claim for moral
damages. Ganto ah, when I was trying cases, there
was a claim for moral damages, mali ang atake.
Walang resibo dyan. Ang ipprove mo dyan mental
anguish, kinakailangan sabihin mo sa court anong
mental anguish? Ano ang nag pahirap sa kalooban
mo? Wounded feelings.Kinakailangan idetalye mo
yun.Kunwari, rape victim ka. Kinakailangan iprove
at idetalye mo na na rape ka, na ito mga naging
pakiramdam mo, na ilang araw yun na di mawala
sa isipan mo. The court will award you damages
that will mitigate your hurt feelings. Ang latest
award ng SC for rape, last I read is
P50,000/ordinary rape.
Questions: are corporations entitled to moral
damages? Yes. Sabi ng SC, a corporation has no
nervous system, so not entitled to a moral
damages. But in a different case, a juridical person
may recover damages for besmirched reputation.
Exemplary damages- cannot be recovered alone.
It is recovered only in addition. For the plaintiff to
recover exemplary damages, this must be in
addition to actual, moral and temperate damages.
And the purpose of exemplary is to serve as a
deterrent for others to act or do similarly as
defendant.
What are the pronouncement of the SC about
awarding moral damages? Iba ibang kaso kaya iba
iba ang pronouncement.
o Moral damages are not intended to
enrich the plaintiff.
o Moral damages are not intended to
penalize the defendant.
 o Moral damages are intended as a Kaya lang hindi as a matter of right, it depends to
form of diversion to mitigate the circumstances.
hurt feeling of the plaintiff.
The biggest so far is 2M. Kaya kung kaya hahawak Question: when may attorney’s fees may be
ng kaso and your client wants to recover a big recovered?
amount of moral damages, tapatin nyo ang 0. When so stipulated by the parties.
kliyente. Kasi ang court fees are based on amount
demanded. 0. When moral damages is awarded.

That 2M was the biggest I read, and that involves a Kaya lang yung amount ng Attorney’s fee sa legal
school child, there was a service, yung auv, there ethics is not a substantial amount. Di na kasya ang
was an operator. Yung driver nya sinundo ang bata P10k as attorney’s fee sa cost ng living ngayon.
at dadalhin sa eskwela, ngayon si driver, nag
hanap ng lulusutan, kasi traffic. Dun sya dumaan
sa train, di nya inantay makalagpas ang train,
nakipag unahan, in short nabangga patay ang
estudyante and the parents prayed for moral
damages and they awarded 2M. SC sustained it.

Bago ito.Alam nyo ba yung foster parent? Ito yung

nag alaga lang ng bata na di nya anak na walamg
adoption proceeding. Ganto ruling, namatay ang
foster child, and the foster parent prayed for moral
damages. The SC award moral damages.

Nominal- small amounts for slight breach of

contract.Alam nyo yung kaso ng Cathay v. Sps
Vasquez?Eto yung kaso ng mag asawang
pupuntang HK, inupgrade sa 1st class from
business class. Inupgrade na nga nag demanda pa.
They prayed for a million of damages, si Court
naman gnrant as prayed for. E syempre si Cathay,
nag appeal. CA found out that there was no bad
faith kasi meron na ang pronouncement ang SC na
if there was no bad faith, there is no basis for
moral damages. Binigyan pa din, binawasan nga
lang 200k. Syempre kung ako si Cathay, alam ko
na ang pronouncement ng SC na walang award ng
damages kapag walang bad faith. Appeal to SC,
sabi ng SC, tanggalin yang moral damages.
Because there was no bad faith BUT as there was a
slight breach of contract, spouses vasquez was
awarded nominal damages of P5k.

Attorney’s fees are not awarded as a matter of

right, sabi ng SC sa legal ethics. There should be
no premium to litigation. Kaya lang the law
mentions that Attorney’s fee may be recovered.