2017

CIVIL LAW
REVIEWER
JANNYCER M. AUZA - GENESIS M. AUZA

AUZA LAW OFFICE Poblacion, San Miguel, Bohol, Philippines

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Civil Law
Reviewer

Last Update
January, 29, 2017

JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 1

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FOREWORD

First and foremost, there is NO claim of ORIGINALITY in creating this work, except for the fact of
organizing, compiling and editing various sources. This is basically in CODAL form with annotations,
primarily, from Ateneo and San Beda Civil Law Reviewers, the Books of Paras, Lawphil.net, Chan Robles
Virtual Law Library, UP Law Center Bar Exam Suggested Answers, some selected Supreme Court
decisions and classroom discussions of professors. Some cited cases are personally researched and some
are merely copied from different sources. Provisions not anymore explained are either self-explanatory or
are not critical areas for the Bar Examination. This is created/organized for the purpose of taking the BAR.
This is intended to be used as a PERSONAL Review material in Civil Law and other related laws falling
under the coverage of the Bar Examination.

DISCLAIMER

This work is PERSONALLY prepared with a very limited time. The text may contain some clerical and
grammatical errors. Too little time was available for the editing of this work. Nevertheless, this is created
with the sincere belief that this is personally helpful to the author for purposes of the BAR as well as to any
person who may, in any way, show interest. This, however, is NOT intended for sale. It may be copied by
friends and person/s who might be interested in this work. The author is in NO WAY liable for any
erroneous information contained in this work. Questions, suggestions and/or clarifications are, however,
WELCOME.

JANNYCER M. AUZA
GENESIS M. AUZA
Poblacion, San Miguel, Bohol
09091289995 - 09207025338

JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 2

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27/11/2016 statutes themselves which are, at the start, merely

10:15AM embodiments of case law. Civil Law is code law or
written law, while Common Law is case law. Civil

CIVIL LAW
Law adopts the deductive method - from the
general to the particular, while the Common Law
uses the inductive approach ¬from the particular to
the general. Common Law relies on equity. Civil

REVIEWER
Law anchors itself on the letter of the law. The
civilists are for the judge-proof law even as the
Common Law Is judge-made law. Civil Law judges
are merely supposed to apply laws and not interpret
them.

GENERAL PRINCIPLES
REPUBLIC ACT NO. 386
Civil law vs. Common Law (1997) AN ACT TO ORDAIN AND INSTITUTE
How would you compare the Civil Law system in its
governance and trend with that of the Common Law
THE CIVIL CODE OF THE PHILIPPINES
system?
PRELIMINARY TITLE
SUGGESTED ANSWER:
As regards "governance": Governance in Civil Law
CHAPTER I
is codal, statutory and written law. It is additionally
EFFECT AND APPLICATION OF LAWS
derived from case law. Common law is basically
derived from case law.
Article 1. This Act shall be known as the "Civil
As regards "trend": Civil law is now tending to rely
Code of the Philippines." (n)
more and more on decisions of the courts
explaining the laws. Common law is now codifying
laws more and more. So they are now merging Art. 2. Laws shall take effect after fifteen days
towards similar systems. following the completion of their publication in the
Additional Answers: Official Gazette, unless it is otherwise provided.
This Code shall take effect one year after such
1. COMMON LAW refers to the traditional part publication. (1a)
of the law as distinct from legislation; it refers to the
universal part of law as distinct from particular local
customs (Encyclopedia Americana, Vol. 7). On the NOTE: The New Civil Code took effect on August
other hand, CIVIL LAW is understood to be that 30, 1950.
branch of law governing the relationship of persons
in respect of their personal and private interests as GR: Laws take effect after completion of publication
distinguished from both public and international in OG or in a newspaper of general circulation.
laws.
EXCEPTION: When the law provides for its own
In common law countries, the traditional date of effectivity; either less than or greater that 15
responsibility has for the most part been with the days after publication.
judges; in civil law countries, the task is primarily
reposed on the lawmakers. Contemporary  Publication is MANDATORY (even if the law
practices, however, so indicate a trend towards provides its own date of effectivity.
centralizing that function to professional groups that  Publication must be in full; otherwise, it is not
may indeed, see the gradual assimilation in time of deemed published at all. The purpose is to
both systems. [Vitug, Civil. Law and Jurisprudence, inform the public of its contents.
p. XX)
EFFECT OF PUBLICATION
2. In Civil Law, the statutes theoretically take The people are deemed to have conclusively been
precedence over court decisions interpreting them; notified of the law even if they have not read them.
while in Common Law, the court decisions resolving
specific cases are regarded as law rather than the

JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 3

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WHAT ARE COVERED BY PUBLICATION
REQUIREMENT: Connected with criminal law:
1. Laws enacted by Congress;
2. Presidential Decrees and Executive Orders; MISTAKE OF FACT IGNORANCE OF
3. Administrative Rules and Regulations, if THE LAW
their purpose is to enforce or implement Ignorance of the law
existing law pursuant to a valid delegation. Relieves criminal excuses no one from
liability compliance therewith
NOT COVERED BY PUBLICATION
REQUIREMENT: Ignorance of the Law vs. Mistake of Fact
1. Interpretative regulations and those
(1996)
administrative regulations internal in nature; Is there any difference in their legal effect between
2. Letters of instruction; ignorance of the law and ignorance or mistake of fact?
3. Municipal ordinances, except those penal in SUGGESTED ANSWER:
nature under the Local Government Code. Yes, there is a difference. While ignorance of the law is
not an excuse for not complying with it, ignorance of fact
eliminates criminal intent as long as there is no
Effectivity of Laws (1990) negligence (Art, NCC). In addition, mistake on a doubtful
After a devastating storm causing widespread destruction or difficult question of law may be the basis of good faith
in four Central Luzon provinces, the executive and (Art. 526. NCC). Mistake of fact may, furthermore, vitiate
legislative branches of the government agreed to enact a consent in a contract and make it voidable (Art. 1390.
special law appropriating P1 billion for purposes of relief NCC).
and rehabilitation for the provinces. In view of the urgent ALTERNATIVE ANSWER:
nature of the legislative enactment, it is provided in its Yes. ignorance of the law differs in legal effect from
effectivity clause that it shall take effect upon approval Ignorance or mistake of fact. The former does not excuse
and after completion of publication in the Official Gazette a party from the legal consequences of his conduct while
and a newspaper of general circulation in the Philippines. the latter does constitute an excuse and is a legal
The law was passed by the Congress on July 1, 1990. defense.
signed into law by the President on July 3, 1990, and
published in such newspaper of general circulation on
July 7, 1990 and in the Official Gazette on July 10, 1990.
Art. 4. Laws shall have no retroactive effect, unless
(a) As to the publication of said legislative the contrary is provided. (3)
enactment, is there sufficient observance or compliance
with the requirements for a valid publication? Explain your GR: Laws are prospective in application.
answer. EXCEPTIONS:
1. Penal laws when favorable to the accused
(b) When did the law take effect? Explain your who is not a habitual delinquent;
answer.
2. Interpretative statutes;
(c) Can the executive branch start releasing and 3. When the law itself expressly provides for
disbursing funds appropriated by the said law the day its retroactivity;
following its approval? Explain your answer. Exception to the exception:
a. Ex post facto law;
SUGGESTED ANSWER: b. When the retroactivity impairs the
obligation of contract.
(a) Yes, there is sufficient compliance. The law itself
prescribes the requisites of publication for its effectivity, NOTE: Contracts may be impaired if
and all requisites have been complied with. (Article 2,
the new law is pursuant to the Police
Civil Code)
Power of the State.
(b) The law takes effect upon compliance with all the
conditions for effectivity, and the last condition was 4. Remedial statutes;
complied with on July 10, 1990. Hence, the" law became No vested rights in the rules of
effective on that date. procedure.
5. Curative statutes;
(c) No. It was not yet effective when it was approved by 6. Emergency laws;
Congress on July 1, 1990 and approved by the President 7. Laws creating new rights.
on July 3, 1990. The other requisites for its effectivity
But vested rights must not be
were not yet complete at the time.
impaired.
8. Tax Laws, up to certain limits.
Art. 3. Ignorance of the law excuses no one from
compliance therewith. (2)
2011 Bar Exam Question
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 4
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(50) Congress passed a law imposing taxes on
income earned out of a particular activity that
was not previously taxed. The law, however,
taxed incomes already earned within the fiscal
year when the law took effect. Is the law valid?
(A) No, because laws are intended to be
prospective, not retroactive. (B) No, the law is
arbitrary in that it taxes income that has
already been spent. (C) Yes, since tax laws are
the lifeblood of the nation. (D) Yes, tax laws
are an exception; they can be given
retroactive effect.
Art. 5. Acts executed against the provisions of
mandatory or prohibitory laws shall be void, except
when the law itself authorizes their validity. (4a)
GR: Acts violating mandatory or prohibitory laws
are VOID.
Exceptions:
1. When the law itself authorizes their validity;
2. When the law makes the act only
VIODABLE and not void;
3. When the law makes the act valid but
punishes the violator.
Art. 6. Rights may be waived, unless the waiver is
contrary to law, public order, public policy, morals,
or good customs, or prejudicial to a third person
with a right recognized by law. (4a) `
REQUISITES FOR A VALID WAIVER OF
RIGHTS:
1. The person making the waiver must have
the right he is waiving (existence of right);
2. He must know the existence of such right;
3. He must have the capacity to make the
waiver;
4. The waiver must be made in a clear and
unequivocal manner;
5. Waiver must intelligently made;
6. Waiver must not be contrary to law, public
order, public policy, morals or good
customs or prejudicial to a 3rd person with a
right recognized by law (or contract);
7. In certain instances; in the formalities
required by law (like waiver of the right to
counsel which must be in writing and in the
presence or assistance of a lawyer).
Waiver of Rights (2004)
B. DON, an American businessman, secured parental
consent for the employment of five minors to play certain
roles in two movies he was producing at home in Makati.
They worked at odd hours of the day and night, but
always accompanied by parents or other adults. The
producer paid the children talent fees at rates better than
adult wages.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
But a social worker, DEB, reported to OSWD that these
children often missed going to school. They sometimes
drank wine, aside from being exposed to drugs. In some
scenes, they were filmed naked or in revealing costumes.
In his defense, DON contended all these were part of
artistic freedom and cultural creativity. None of the
parents complained, said DON. He also said they signed
a contract containing a waiver of their right to file any
complaint in any office or tribunal concerning the working
conditions of their children acting in the movies.
Is the waiver valid and binding? Why or why not?
Explain. (5%)
SUGGESTED ANSWER:
The waiver is not valid. Although the contracting parties
may establish such stipulations, clauses, terms and
conditions as they may deem convenient, they may not
do so if such are contrary to law, morals, good customs,
public order, or public policy (Article 1306, Civil Code).
The parents' waiver to file a complaint concerning the
working
children acting in the movies is in violation of the Family
Code and Labor laws. Thus, the waiver is invalid and not
binding.
The Child Labor Law is a mandatory and prohibitory law
and the rights of the child cannot be waived as it is
contrary to law and public policy.
SOME RIGHTS THAT CANNOT BE WAIVED
1. Right to support (ART. 301, NCC);
2. Right of action against future fraud (art.
1171, NCC);
3. Right to future inheritance (art. 1043, NCC);
4. Right to counsel during arraignment of the
accused (sec. 6, Rule 116, Rules of Court);
5. Future prescription cannot be waived (art.
1112, NCC).
6. Right to set up defense of illegality of
contracts (art. 1409, NCC).
Art. 7. Laws are repealed only by subsequent ones,
and their violation or non-observance shall not be
excused by disuse, or custom or practice to the
contrary.
When the courts declared a law to be inconsistent
with the Constitution, the former shall be void and
the latter shall govern.
Administrative or executive acts, orders and
regulations shall be valid only when they are not
contrary to the laws or the Constitution. (5a)
REPEAL OF LAWS
1. Express repeal—repeal of repealing law
will not revive the old law unless expressly
provided;
2. Implied repeal—the provisions of the
subsequent law are incompatible with those
of the previous law; the repeal of a law
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impliedly repealing a prior law will revive
the old law unless contrary is provided.
Requisites of implied repeal:
a. Both laws cover the same subject
matter;
b. The latter law is repugnant to the earlier
law.
NOTE: However, implied repeals are disfavored in
law.
Art. 8. Judicial decisions applying or interpreting
the laws or the Constitution shall form a part of the
legal system of the Philippines. (n)
NOTE: Lower courts should take judicial notice of
the decisions of the Supreme Court. Decisions of
the Court of Appeals, however, may have also
binding (or at least guiding effect to lower courts.
STARE DECISIS
The doctrine which requires the courts to follow the
rule established in earlier decisions of the SC.
However, it is not inflexible, so that when in the light
of changing conditions, a rule has ceased to be
beneficial to the society, courts may depart from it.
2011 Bar Exam
(69) The doctrine of stare decisis prescribes
adherence to precedents in order to promote
the stability of the law. But the doctrine can be
abandoned (A) When adherence to it would
result in the Government’s loss of its case. (B)
When the application of the doctrine would
cause great prejudice to a foreign national. (C)
When necessary to promote the passage of a
new law. (D) When the precedent has ceased
to be beneficial and useful.
Inferior Courts Decisions (1994)
Are decisions of the Court of Appeals considered
laws?
ALTERNATIVE ANSWERS:
1) a) No, but decisions of the Court of Appeals
may serve as precedents for inferior courts on
points of law not covered by any Supreme Court
decision, and a ruling of the Court of Appeals may
become a doctrine. (Miranda vs.. Imperial 77 Phil.
1066).
b) No. Decisions of the Court of Appeals merely
have persuasive, and therefore no mandatory
effect. However, a conclusion or pronouncement
which covers a point of law still undecided may still
serve as judicial guide and it is possible that the
same maybe raised to the status of doctrine. If after
it has been subjected to test in the crucible of
analysis, the Supreme Court should find that it has
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
merits and qualities sufficient for its consideration
as a rule of jurisprudence (Civil Code, Paras).
Effectivity of SC Interpretation:
A judicial interpretation becomes a part of the law
as of the date the law subject thereof took effect,
subject only to the qualification that when a doctrine
of this Court is overruled and a different view is
adopted, and more so when there is a reversal
thereof, the new doctrine should be applied
PROSPECTIVELY and should not apply to parties
who relied on the old doctrine and acted in good
faith. (Tañada, eta al. vs Guingona, Jr., et al.,235
SCRA 507).
Judicial decisions also have prospective
application.
If the decision reversing a previous ruling of the
court be not given a prospective effect, the same
would deprive the law of its quality of fairness and
justice, if there is no recognition of what had
transpired prior to such adjudication. This is now
known as the “doctrine of operative facts”. (Albino
S. Co vs CA, et al., L-100776, Oct. 28, 1993
Effect of Obiter & Dissenting Opinion; SC Decisions
(1994)
2) What are the binding effects of an obiter dictum and a
dissenting opinion? 3) How can a decision of the
Supreme Court be set aside?
ALTERNATIVE ANSWERS:
2) None. Obiter dictum and opinions are not necessary to
the determination of a case. They are not binding and
cannot have the force of official precedents. It is as if the
Court were turning aside from the main topic of the case
to collateral subjects: a dissenting opinion affirms or
overrules a claim, right or obligation. It neither disposes
nor awards anything it merely expresses the view of the
dissenter. (Civil Code, Paras]
3) A decision of a division of the Supreme Court maybe
set aside by the Supreme Court sitting en banc, a
Supreme Court decision may be set aside by a contrary
ruling of the Supreme Court itself or by a corrective
legislative act of Congress, although said laws cannot
adversely affect those favored prior to the Supreme Court
decision. [Civil Code, Paras).
Art. 9. No judge or court shall decline to render
judgment by reason of the silence, obscurity or
insufficiency of the laws. (6)
Note: but in criminal cases, the judge shall have to
dismiss the case if there is no law punishing an act
subject of a criminal prosecution. (Nullum crimen,
nulla poena sine lege) – art. 5, RPC.
Equity follows the Law (2003)
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It is said that “equity follows the law” What do you
understand by this phrase, and what are its basic
implications? 5%
SUGGESTED ANSWER:
“Equity Follows the law” means that courts
exercising equity jurisdiction are bound by rules of
law and have no arbitrary discretion to disregard
them. (Arsenal v IAC, 143 SCRA 40 [1986]). Equity
is applied only in the absence of
but never against statutory law. (Toyota Motor Phil.
V CA 1. The civil action involves an issue similar or
intimately
216 SCRA 236 [1992]).
Art. 10. In case of doubt in the interpretation or
application of laws, it is presumed that the
lawmaking body intended right and justice to
prevail. (n)
Art. 11. Customs which are contrary to law, public
order or public policy shall not be countenanced. (n)
Art. 12. A custom must be proved as a fact,
according to the rules of evidence. (n)
CUSTOMS
Are rules of conduct formed by repetition of acts,
uniformly observed as social rule, legally binding
and obligatory.
 A local custom as a source of right cannot be
considered by the court of justice unless such
custom is properly established by competent
evidence like any other fact.
 Juridical custom must be differentiated from
social custom. Juridical custom can be
suppletory to statutory law or applied in the
absence of such statute. It is not so with
social custom.
 Custom, even if proven, cannot prevail over a
STATUTORY RULE, or even a legal rule
enunciated by SC.
REQUISITES FOR MAKING CUSTOM
OBLIGATORY:
1. Plurarity of acts or acts have been
repeatedly done;
2. Generally practiced by great mass of the
social group;
3. The community accepts it as a proper way
of acting, such that it is considered
obligatory upon all;
4. The practice has been going on for a long
period of time.
5. Must not be contrary to law, morals or
public policy.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
LEGAL PERIODS
Art. 13. When the laws speak of years, months,
days or nights, it shall be understood that years are
of three hundred sixty-five days each; months, of
thirty days; days, of twenty-four hours; and nights
from sunset to sunrise.
If months are designated by their name, they shall
be computed by the number of days which they
respectively have.
In computing a period, the first day shall be
excluded, and the last day included. (7a)
NOTE: The following are the relevant provision of
the Rules of Court.
Computation of Time (Rule 22, ROC)
Section 1. How to compute time. — In computing
any period of time prescribed or allowed by these
Rules, or by order of the court, or by any applicable
statute, the day of the act or event from which the
designated period of time begins to run is to be
excluded and the date of performance included. If
the last day of the period, as thus computed, falls on
a Saturday a Sunday, or a legal holiday in the place
where the court sits, the time shall not run until the
next working day. (a)
Section 2. Effect of interruption. — Should an act
be done which effectively interrupts the running of
the period, the allowable period after such
interruption shall start to run on the day after notice
of the cessation of the cause thereof.
The day of the act that caused the interruption shall
be excluded in the computation of the period. (n)
APPLICABILITY OF LAWS
Art. 14. Penal laws and those of public security
and safety shall be obligatory upon all who live or
sojourn in the Philippine territory, subject to the
principles of public international law and to treaty
stipulations. (8a)
NOTE: Above article espouses the generality and
territoriality principles in criminal laws.
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The exception of the article above is found in art. 2,
RPC.
EXTRA-TERRITORIALITY
By treaty stipulation granting immunity to certain
persons or things.
EXTRA-TERRITORIALITY
A place (like an embassy, or a public vessel) is
considered as an extension of territory.
Art. 15. Laws relating to family rights and duties, or
to the status, condition and legal capacity of
persons are binding upon citizens of the
Philippines, even though living abroad. (9a)
Nationality Rule/Theory.
Nationality Principle (2009)
No.XII. Emmanuel and Margarita, American citizens
and employees of the U.S. State Department, got
married in the African state of Kenya where sterility
is a ground for annulment of marriage. Thereafter,
the spouses were assigned to the U.S. Embassy in
Manila. On the first year of the spouses’ tour of duty
in the Philippines, Margarita filed an annulment
case against Emmanuel before a Philippine court
on the ground of her husband’s sterility at the time
of the celebration of the marriage. (A). Will the suit
prosper? Explain your answer. (3%) SUGGESTED
ANSWER: No, the suits will not prosper. As
applied to foreign nationals with the respect to
family relations and status of persons, the
nationality principle set forth in Article 15 of the
Civil Code will govern the relations of
Emmanuel and Margarita. Since they are
American citizens, the governing law as to the
ground for annulment is not Kenyan Law which
Magarita invokes in support of sterility as such
ground; but should be U.S. Law, which is the
national Law of both Emmanuel and Margarita
as recognized under Philippine Law. Hence, the
Philippine court will not give due course to the
case based on Kenyan Law. The nationality
principle as expressed in the application of
national law of foreign nationals by Philippine
courts is established by precedents (Pilapil v.
IbaySomera, 174 SCRA 653[1989], Garcia v.
Recio, 366 SCRA 437 [2001], Llorente v. Court of
Appeals 345 SCRA 92 [2000], and Bayot v. Court
of Appeals 570 SCRA 472 [2008]).
ALTERNATIVE ANSWER:
The forum has jurisdiction over an action for the
annulment of marriage solemnized elsewhere
but only when the party bringing the actions is
domiciled in the forum. In this case, none of the
parties to the marriage is domiciled in the
Philippines. They are here as officials of the US
Embassy whose stay in the country is merely
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
temporary, lasting only during their fixed tour of
duty. Hence, the Philippine courts have no
jurisdiction over the action.
Nationality Principle; Change of Name not
Covered (2009) No.XX. (A). If Ligaya, a Filipino
citizen residing in the United States, files a petition
for change of name before the District Court of New
York, what law shall apply? Explain. (2%)
SUGGESTED ANSWER:
New York law shall apply. The petition of
change of name file din New York does not
concern the legal capacity or status of the
petitioner. Moreover, it does not affect the
registry of any other country including the
country of birth of the petitioner. Whatever
judgment is rendered in that petition will have
effect only in New York. The New York court
cannot, for instance, order the Civil Registrar in
the Philippines to change its records. The
judgment of the New York court allowing a
change in the name of the petitioner will be
limited to the records of the petitioner in New
York and the use of her new name in all
transactions in New York. Since the records and
processes in New York are the only ones
affected, the New York court will apply New
YorK law in resolving the petition.
ALTERNATIVE ANSWER: Philippine law shall
apply (Art 15, NCC). Status, conditions, family
rights and duties are governed by Philippine
laws as to Filipinos even though sojourning
abroad. ALTENATIVE ANSWER: If Ligaya, a
Filipino, files a petition for change of name with
the District Court of New YoRk, the laws of New
York will govern since change of name is not
one of those covered by the principles of
nationality.
(B). If Henry, an American citizen residing in the
Philippines, files a petition for change of name
before a Philippine court, what law shall apply?
Explain. (2%) SUGGESTED ANSWER:
Philippine law will apply. The petition for
change of name in the Philippines will affect
only the records of the petitioner and his
transactions in the Philippines. The Philippine
court can never acquire jurisdiction over the
custodian in the US of the records of the
petitioner. Moreover, change of name has
nothing to do with the legal capacity or status of
the alien. Since Philippine records and
transactions are the only ones affected, the
Philippine court may effect the change only in
accordance with the laws governing those
records and transactions that law cannot be but
Philippine law. ALTERNATIVE ANSWER: U.S.
law shall apply as it is his national law. This is
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pursuant to the application of lex patriae or the
nationality principle, by which his legal status is
governed by national law, the matter of change
of name being included in the legal status. The
Supreme Court has reiterate in several cases,
that the lex patriae as provided in Article 15 of
the Civil Code is applicable to foreign nationals
in determining their legal status (supra).
Art. 16. Real property as well as personal property
is subject to the law of the country where it is
situated.
However, intestate and testamentary successions,
both with respect to the order of succession and to
the amount of successional rights and to the
intrinsic validity of testamentary provisions, shall be
regulated by the national law of the person whose
succession is under consideration, whatever may
be the nature of the property and regardless of the
country wherein said property may be found. (10a)
Art. 1039. Capacity to succeed is governed by
the law of the nation of the decedent.
Proceedings; Intestate Proceedings; Jurisdiction
(2004)
In his lifetime, a Pakistani citizen, ADIL, married three
times under Pakistani law. When he died an old widower,
he left behind six children, two sisters, three homes, and
an estate worth at least 30 million pesos in the
Philippines. He was born in Lahore but last resided in
Cebu City, where he had a mansion and where two of his
youngest children now live and work. Two of his oldest
children are farmers in Sulu, while the two middle-aged
children are employees in Zamboanga City. Finding that
the deceased left no will, the youngest son wanted to file
intestate proceedings before the Regional Trial Court of
Cebu City. Two other siblings
objected, arguing that it should be in Jolo before a Shari’a
mother, in favor of another sister, with their mother not
court since his lands are in Sulu. But Adil’s sisters in
Pakistan want the proceedings held in Lahore before a
Pakistani court. Which court has jurisdiction and is the
proper venue for the intestate proceedings? The law of
which country shall govern succession to his estate?
(5%)
SUGGESTED ANSWER:
In so far as the properties of the decedent located in the
Philippines are concerned, they are governed by
Philippine law (Article 16, Civil Code). Under Philippine
law, the proper venue for the settlement of the estate is
the domicile of the decedent at the time of his death.
Since the decedent last resided in Cebu City, that is the
proper venue for the intestate settlement of his estate.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
However, the successional rights to the estate of ADIL
are governed by Pakistani law, his national law, under
Article 16 of the Civil Code.
2012 Bar Exam Question
4. The capacity of an heir to succeed shall be
governed by the: a) national law of the
decedent’s heirs b) law of the country where
the decedent was a resident at the time of his
death c) national law of the person who died
d) law of the country where the properties of
the decedent are located.
2012 Bar Exam Question
8. If a will is executed by a testator who was
born a Filipino citizen but became naturalized
Japanese citizen at the time of his death, what
law will govern its testamentary provisions if
the will is executed in China and the property
being disposed is located in Indonesia? a)
Chinese law b) Philippine law c) Indonesia law
d) Japanese law
2011 Bar Exam Question
(60) An Australian living in the Philippines
acquired shares of stock worth P10 million in
food manufacturing companies. He died in
Manila, leaving a legal wife and a child in
Australia and a live-in partner with whom he
had two children in Manila. He also left a will,
done according to Philippine laws, leaving all
his properties to his live-in partner and their
children. What law will govern the validity of
the disposition in the will? (A) Australia law
since his legal wife and legitimate child are
Australians and domiciled in Australia. (B)
Australian law since the intrinsic validity of
the provisions of a will is governed by the
decedent’s national law. (C) Philippine law
since the decedent died in Manila and he
executed his will according to such law. (D)
Philippine law since the decedent’s properties
are in the Philippines.
Applicable Laws; capacity to succeed (1991)
Jacob, a Swiss national, married Lourdes, a Filipina, in
Berne, Switzerland. Three years later, the couple decided
to reside in the Philippines. Jacob subsequently acquired
several properties in the Philippines with the money he
inherited from his parents. Forty years later. Jacob died
intestate, and is survived by several legitimate children
and duly recognized illegitimate daughter Jane, all
residing in the Philippines.
(a) Suppose that Swiss law does not allow illegitimate
children to inherit, can Jane, who is a recognized
illegitimate child, inherit part of the properties of Jacob
under Philippine law?
9
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(b) Assuming that Jacob executed a will leaving certain
properties to Jane as her legitime in accordance with the
law of succession in the Philippines, will such
testamentary disposition be valid?
SUGGESTED ANSWER:
A. Yes. As stated in the problem. Swiss law does not
allow illegitimate children to inherit Hence, Jane cannot
inherit the property of Jacob under Philippine law.
SUGGESTED ANSWER:
B. The testamentary disposition will not be valid if it would
contravene Swill law; otherwise, the disposition would be
valid. Unless the Swiss law is proved, it would be
presumed to be the same as that of Philippine law under
the Doctrine of Processual Presumption.
Applicable Laws; Sale of Real Property (1995)
While in Afghanistan, a Japanese by the name of Sato
sold to Ramoncito, a Filipino, a parcel of land situated in
the Philippines which Sato inherited from his Filipino
mother.
1. What law governs the formality in the execution of the
contract of sale? Explain your answer and give its legal
basis.
SUGGESTED ANSWER:
Under Art. 16 par. 1, NCC, real property is subject to the
3. The distribution of the personal properties in Germany
law of the country where it is situated. Since the property
is situated in the Philippines, Philippine law applies. The
rule of lex rei sitae in Article 16 prevails over lex loci
contractu in Article 17 of the NCC.
ALTERNATIVE ANSWER:
Afghanistan law governs the formal requirements of the
contract since the execution is in Afghanistan. Art. 17 of
the Civil Code provides that the forms and solemnities of
contracts, wills, and other public instruments shall be
governed by the laws of the country in which they are
executed. However, if the contract was executed before
the diplomatic or consular officials of the Republic of the
Philippines in Afghanistan, Philippine law shall apply.
Applicable Laws; Succession; Intestate & the Philippines in a foreign country, the solemnities
Testamentary (2001)
Alex was born a Filipino but was a naturalized Canadian
citizen at the time of his death on December 25, 1998. He
left behind a last will and testament in which he
bequeathed all his properties, real and personal, in the
Philippines to his acknowledged illegitimate Fillpina
daughter and nothing to his two legitimate Filipino sons.
The sons sought the annulment of the last will and
testament on the ground that it deprived them of their
legitimes but the daughter was able to prove that there
were no compulsory heirs or legitimes under Canadian
law. Who should prevail? Why? (5%)
SUGGESTED ANSWER:
The daughter should prevail because Article 16 of the
New Civil Code provides that intestate and testamentary
succession shall be governed by the national law of the
person whose succession is under consideration.
Applicable Laws; Sucession of Aliens (1995)
Michelle, the French daughter of Penreich, a German
national, died in Spain leaving real properties in the
Philippines as well as valuable personal properties in
Germany.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
1. What law determines who shall succeed the
deceased? Explain your answer and give its legal basis.
2. What law regulates the distribution of the real
properties in the Philippines? Explain your answer and
give its legal basis.
3. What law governs the distribution of the personal
properties in Germany? Explain your answer and give its
legal basis.
SUGGESTED ANSWER:
Assuming that the estate of the decedent is being settled
in the Philippines)
1. The national law of the decedent (French law) shall
govern in determining who will succeed to his estate. The
legal basis is Art. 16 par. 2, NCC.
ALTERNATIVE ANSWER:
French law shall govern the distribution of his real
properties in the Philippines except when the real
property is land which may be transmitted to a foreigner
only by hereditary succession.
SUGGESTED ANSWER:
2. The distribution of the real properties in the Philippines
shall be governed by French law. The legal basis is Art.
16, NCC).
SUGGESTED ANSWER:
shall be governed by French law. The legal basis is Art.
16, NCC).
Art. 17. The forms and solemnities of contracts,
wills, and other public instruments shall be
governed by the laws of the country in which
they are executed.
When the acts referred to are executed before the
diplomatic or consular officials of the Republic of
established by Philippine laws shall be observed in
their execution.
Prohibitive laws concerning persons, their acts or
property, and those which have, for their object,
public order, public policy and good customs shall
not be rendered ineffective by laws or judgments
promulgated, or by determinations or conventions
agreed upon in a foreign country. (11a)
Applicable Laws; Wills executed abroad (1993)
A, a Filipino, executed a will in Kuwait while there as a
contract worker. Assume that under the laws of Kuwait, it
is enough that the testator affix his signature to the
presence of two witnesses and that the will need not be
acknowledged before a notary public. May the will be
probated in the Philippines?
SUGGESTED ANSWER:
Yes. Under Articles 815 and 17 of the Civil Code, the
formality of the execution of a will is governed by the law
of the place of execution. If the will was executed with the
formalities prescribed by the laws of Kuwait and valid
10
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there as such, the will is valid and may be probated in the
Philippines.
2012 Bar Exam Question
13. The will of a Filipino executed in a foreign
country --- a) cannot be probated in the
Philippines; b) may be probated in the
Philippines provided that properties in the
estate are located in the Philippines; c) cannot
be probated before the death of the testator; d)
may be probated in the Philippines
provided it was executed in accordance
with the laws of the place where the will
was executed.
Applicable Laws; contracts contrary to public
policy (1996)
Alma was hired as a domestic helper in Hongkong
by the Dragon Services, Ltd., through its local
agent. She executed a standard employment
contract designed by the Philippine Overseas
Workers Administration (POEA) for overseas
Filipino workers. It provided for her employment for
one year at a salary of US$1,000.00 a month. It
was submitted to and approved by the POEA.
However, when she arrived in Hongkong, she was
asked to sign another contract by Dragon Services,
Ltd. which reduced her salary to only US$600.00 a
month. Having no other choice, Alma signed the
contract but when she returned to the Philippines,
she demanded payment of the salary differential of
US$400.00 a month. Both Dragon Services, Ltd.
and its local agent claimed that the second contract
is valid under the laws of Hongkong, and therefore
binding on Alma. Is their claim correct? Explain.
SUGGESTED ANSWER:
Their claim is not correct. A contract is the law
between the parties but the law can disregard the
contract if it is contrary to public policy. The
provisions of the 1987 Constitution on the
protection of labor and on social justice (Sec. 10.
Art II) embody a public policy of the Philippines.
Since the application of Hongkong law in this case
is in violation of that public policy, the application
shall be disregarded by Court of Appeals (G.R No.
104235, Nov. 10, 1993) the our Courts. (Cadalin v.
POEA. 238 SCRA 762)
ALTERNATIVE ANSWERS;
a) Their claim is not correct. Assuming that the
second contract is binding under Hongkong law,
such second contract is invalid under Philippine law
which recognizes as valid only the first contract.
Since the case is being litigated in the Philippines,
the Philippine Court as the forum will not enforce
any foreign claim obnoxious to the forum's public
policy. There is a strong public policy enshrined in
our Constitution on the protection of labor.
Therefore, the second contract shall be disregarded
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
and the first contract will be enforced. (Cadalin v.
POEA, 238 SCRA 762).
b) No, their claim is not correct. The second
contract executed in Hongkong, partakes of the
nature of a waiver that is contrary to Philippine law
and the public policy governing Filipino overseas
workers. Art. 17, provides that our prohibitive laws
concerning persons, their acts, or their property or
which have for their object public order, public
policy and good customs shall not be rendered
ineffective by laws or conventions agreed upon in a
foreign country. Besides, Alma's consent to the
second contract was vitiated by undue influence,
being virtually helpless and under financial distress
in a foreign country, as indicated by the given fact
that she signed because she had no choice.
Therefore, the defendants claim that the contract is
valid under Hongkong law should be rejected since
under the DOCTRINE OF PROCESSUAL
PRESUMPTION a foreign law is deemed similar or
identical to Philippine law in the absence of proof to
the contrary, and such is not mentioned in the
problem as having been adduced.
2012 Bar Exam Question
11. A French national revokes his will in
Japan where he is domiciled. He then changed
his domicile to the Philippines where he died.
The revocation of his will in Japan is valid
under Japanese law but invalid under
Philippine law. The affected heir is a Malaysian
national residing in the Philippines. What law
will apply? a) Japanese law b) Philippine law
c) French law d) Malaysian law
Applicable Laws; Contracts of Carriage (1995)
On 8 December 1991 Vanessa purchased from the
Manila office of Euro-Aire an airline ticket for its
Flight No. 710 from Dallas to Chicago on 16
January 1992. Her flight reservation was confirmed.
On her scheduled departure Vanessa checked in
on time at the Dallas airport. However, at the check-
in counter she discovered that she was waitlisted
with some other passengers because of intentional
overbooking, a Euro-Aire policy and practice. Euro-
Alre admitted that Vanessa was not advised of such
policy when she purchased her plane ticket.
Vanessa was only able to fly two days later by
taking another airline.
Vanessa sued Euro-Aire in Manila for breach of
contract and damages. Euro-Aire claimed that it
cannot be held liable for damages because its
practice of overbooking passengers was allowed by
the U.S. Code of Federal Regulations. Vanessa on
the other hand contended that assuming that the
U.S. Code of Federal Regulations allowed
Intentional overbooking, the airline company cannot
invoke the U.S. Code on the ground that the ticket
was purchased in Manila, hence, Philippine law
11
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should apply, under which Vanessa can recover
damages for breach of contract of carriage. Decide.
Discuss fully.
SUGGESTED ANSWER:
Vanessa can recover damages under Philippine law
for breach of contract of carriage, Philippine law
should govern as the law of the place where the
plane tickets were bought and the contract of
carriage was executed. In Zalamea v. Supreme
Court applied Philippine law in recovery of damages
for breach of contract of carriage for the reason that
it is the law of the place where the contract was
executed.
ALTERNATIVE ANSWER:
If the violation of the contract was attended with bad
faith, there is a ground to recover moral damages.
But since there was a federal regulation which was
the basis of the act complained of, the airline
cannot be in bad faith. Hence, only actual damages
can be recovered. The same is true with regards to
exemplary damages.
Applicable Laws; Labor Contracts (1991)
A. The Japan Air Lines (JAL), a foreigner
corporation licensed to do business in the
Philippines, executed in Manila a contract of
employment with Maritess Guapa under which the
latter was hired as a stewardess on the aircraft
flying the Manila-Japan-Manila route. The contract
specifically provides that (1) the duration of the
contract shall be two (2) years, (2) notwithstanding
the above duration, JAL may terminate the
agreement at any time by giving her notice in
writing ten (10) days in advance, and (3) the
contract shall be construed as governed under and
by the laws of Japan and only the court in Tokyo,
Japan shall have the jurisdiction to consider any
matter arising from or relating to the contract. JAL
dismissed Maritess on the fourth month of her
employment without giving her due notice. Maritess
then filed a complaint with the Labor Arbiter for
reinstatement, backwages and damages. The
lawyer of JAL contends that neither the Labor
Arbiter nor any other agency or court in the
Philippines has jurisdiction over the case in view of
the above provision (3) of the contract which
Maritess voluntarily signed. The contract is the law
between her and JAL. Decide the issue.
B. Where under a State's own conflicts rule that
domestic law of another State should apply, may
the courts of the former nevertheless refuse to
apply the latter? If so, under what circumstance?
SUGGESTED ANSWER:
A, Labor Legislations are generally intended as
expressions of public policy on employer-employee
relations. The contract therefore, between Japan Air
Lines (JAL) and Maritess may apply only to the
extent that its provisions are not inconsistent with
Philippine labor laws intended particularly to protect
employees. Under the circumstances, the dismissal
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
of Maritess without complying with Philippine Labor
law would be invalid and any stipulation in the
contract to the contrary is considered void. Since
the law of the forum in this case is the Philippine
law the issues should-be resolved in accordance
with Philippine law.
B. The third paragraph of Art. 17 of the Civil Code
provides that:
"Prohibitive laws concerning persons, their acts or
property, and those which have for their object
public order, public policy and good customs shall
not be rendered ineffective by laws or judgments
promulgated, or by determinations or conventions
agreed upon in a foreign country."
Accordingly, a state's own conflict of laws rule may,
exceptionally be inapplicable, given public policy
considerations by the law of the forum.
Going into the specific provisions of the contract in
question, I would rule as follows:
1 The duration of the contract is not opposed to
Philippine law and it can therefore be valid as
stipulated;
2 The second provision to the effect that
notwithstanding duration, Japan Air Lines (JAL)
may terminate her employment is invalid, being
inconsistent with our Labor laws;
3 That the contract shall be construed as governed
under and by the laws of Japan and only the courts
of Tokyo, Japan shall have jurisdiction, is invalid as
clearly opposed to the aforecited third paragraph of
Arts. 17 and 1700 of the Civil Code, which provides:
"Art. 1700. The relations between capital and labor
are not merely contractual. They are so impressed
with public interest that labor contracts must yield to
the common good. Therefore, such contracts are
subject to the special laws on labor unions,
collective bargaining, strikes and lockouts, closed
shop, wages, working conditions, hours of labor and
similar subjects."
ALTERNATIVE ANSWER;
A. When a contract has a foreign element such as
in the factual setting stated in the problem where
one of the parties is a foreign corporation, the
contract can be sustained as valid particularly the
stipulation expressing that the contract is governed
by the laws of the foreign country. Given this
generally accepted principle of international law, the
contract between Maritess and JAL is valid and it
should therefore be enforced.
2012 Bar Exam Question
14. Pedro (Filipino and Bill (American) entered
into a contract in Australia, whereby it was
agreed that Pedro will build a commercial
building for Bill in the Philippines, and in
payment for the construction, Bill will transfer
and convey his cattle ranch located in Japan
in favor of Pedro. In case Pedro performs his
obligation, but Bill fails or refuses to pay, what
law will govern?
12
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a) American law b) Philippine law c) Australian 4. Order of
law d) Japanese law successio
n

Art. 18. In matters which are governed by the Formalities for the acquisition, encumbering and
Code of Commerce and special laws, their alienation of property shall be governed not by lex
deficiency shall be supplied by the provisions of this situs but by lex loci celebracionis.
Code. (16a)
But lex situs prevails if the property is a real
property.
RULES ON INTRINSIC VALIDITY OF
CONTRACTS: NOTE: Art. 17 is silent as to the intrinsic validity of
1. Law stipulated by the parties shall be the contracts, wills and other public instruments.
applied;
2. In default thereof and the parties are of the DOCTRINE OF PROCESSUAL PRESUMPTION
same nationality, their national law shall be It is that doctrine which lays down the presumption
applied; that the foreign law is the same as the law of the
3. If the parties are of different nationalities, forum. It arises if the foreign law, though properly
the law of the place of the perfection of the applicable, is either not alleged, or if alleged, is not
obligation or the performance shall govern proved before a competent court.
its fulfillment;
4. If the above places are not specified and Processual Presumption (2009)
they cannot be deduced from the nature No.I. TRUE or FALSE. Answer TRUE if the
and circumstances of the obligation, then statement is true, or FALSE if the statement is
the law of the passive subject shall apply; false. Explain your answer in not more than two (2)
5. RENVOI DOCTRINE; where the conflict sentences.
rules of the forum refer to a foreign law, and
the latter refers it back to the internal law, (A). The doctrine of "processual presumption"
the latter law (law of the forum) shall apply. allows the court of the forum to presume that the
6. If the foreign law refers it to a 3 rd country, foreign law applicable to the case is the same as
the said country’s law shall govern the local or domestic law. (1%) SUGGESTED
(TRANSMISSION THEORY). ANSWER: TRUE. If the foreign law necessary to
the resolve an issue is not proven as a fact, the
LEX LEX RAE SITAE LEX LOCI court of the forum may presume that the foreign
NATIONA (art. 16) CELEBRACION law is the same as the law of the forum.
LIS (art. IS (art. 17)
15) Capacity: Legal Capacity; Lex Rei Sitae
Basis: law of the Basis: law of the (2007) No.VII. Write "TRUE" if the statement is
Basis: place where the place where the true or "FALSE" if the statement is false. If the
citizenship property is contract was statement is FALSE, state the reason. (2%
situated executed each).
Covers: (1). Roberta, a Filipino, 17 years of age, without the
family knowledge of his parents, can acquire a house in
rights and Covers: real and Covers: only Australia because Australian Laws allow aliens to
duties, personal property forms and acquire property from the age of 16.
status, solemnities SUGGESTED ANSWER: TRUE. Since Australian
condition, (extrinsic Law allows alien to acquire property from the
and legal validity) age of 16, Roberta may validly own a house in
capacity Australia, following the principle of lex rei sitae
Exceptions: Exceptions: enshrined in Art. 16, NCC, which states "Real
1. Capacity 1. Art. 26 property as well as personal property is subject
to par. 1 of to the law of the country where it is situated."
succeed; Family Moreover, even assuming that legal capacity of
Exception: 2. Intrinsic Code; Roberta in entering the contract in Australia is
art 26 par. validity of 2. Intrinsic governed by Philippine Law, she will acquire
2 the will; validity ownership over the property bought until the
3. Amount of of contract is annulled.
successio contract ALTERNATIVE ANSWER: FALSE. Laws relating
nal rights; s to family rights and duties, or to the status,

JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 13

____________________________________________________________________________________________________
condition or legal capacity of persons are
binding upon the citizens of the Philippines,
even though living abroad (Art. 15, NCC). The
age of majority under Philippine law is 18 years
(R.A. No. 6809); hence, Roberta, being only 17
years old, has no legal capacity to acquire and
own land.
Jurisdiction; Courts may Assume Jurisdiction
over Conflict of Laws Cases (2010) No.III.
Define, Enumerate or Explain. (2% each) (C)
Give at least two reasons why a court may assume
jurisdiction over a conflict of laws case.
SUGGESTED ANSWER: (1) Statute theory.
There is a domestic law authorizing the local
court to assume jurisdiction. (2) Comity theory.
The local court assumes jurisdiction based on
the principle of comity or courtesy.
ALTERNATIVE ANSWER: (1) Public Order. To
maintain peace and order, disputes that disturb
the peace of the forum should be settled by the
court of the forum even though the application
of the foreign law is necessary for the purpose.
(2) Humanitarian Principle. An aggrieved party
should not be left without remedy in a forum
even though the application of the foreign law
by the courts of the forum is unavoidable in
order to extend relief.
Appilicable Laws; laws governing contracts
(1992)
X and Y entered into a contract in Australia, whereby it
was agreed that X would build a commercial building for
Y in the Philippines, and in payment for the construction,
Y will transfer and convey his cattle ranch located in the
United States in favor of X. What law would govern: a)
The validity of the contract? b) The performance of the
contract? c) The consideration of the contract?
SUGGESTED ANSWER:
(a) The validity of the contract will be governed by
Australian law, because the validity refers to the element
of the making of the contract in this case.
(Optional Addendum:"... unless the parties agreed to be
bound by another law".}
(b) The performance will be governed by the law of the
Philippines where the contract is to be performed.
(c) The consideration will be governed by the law of the
United States where the ranch is located. (Optional
Addendum: In the foregoing cases, when the foreign law
would apply, the absence of proof of that foreign law
would render Philippine law applicable under the "eclectic
theory".)
Applicable Laws; Arts 15, 16 & 17 (1998)
Juan is a Filipino citizen residing in Tokyo, Japan. State
what laws govern:
1 His capacity to contract marriage in Japan, [ 1%]
2 His successional rights as regards his deceased
Filipino father's property in Texas, U.S.A. [1%]
3 The extrinsic validity of the last will and testament which
Juan executed while sojourning in Switzerland. [2%]
4 The intrinsic validity of said will. (1%)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
SUGGESTED ANSWER:
1.Juan's capacity to contract marriage is governed
by Philippine law -i.e., the Family Code -pursuant to Art.
15, Civil Code, which provides that our laws relating to,
among others, legal capacity of persons are binding upon
citizens of the Philippines even though living abroad.
SUGGESTED ANSWER:
2. By way of exception to the general rule of lex rei sitae
prescribed by the first paragraph of Art. 16. Civil Code, a
person's successional rights are governed by the national
law of the decedent (2nd par.. Art. 16). Since Juan's
deceased father was a Filipino citizen, Philippine law
governs Juan's successional rights.
ANOTHER ANSWER:
2. Juan's successional rights are governed by Philippine
law, pursuant to Article 1039 and the second paragraph
of Article 16, both of the Civil Code. Article 1039, Civil
Code, provides that capacity to succeed shall be
governed by the "law of the nation" of the decedent, i.e..
his national law. Article 16 provides in paragraph two that
the amount of successional rights, order of succession,
and intrinsic validity of testamentary succession shall be
governed by the "national law" of the decedent who is
identified as a Filipino in the present problem.
SUGGESTED ANSWER:
3. The extrinsic validity of Juan's will is governed by (a)
Swiss law, it being the law where the will was made (Art.
17. 1st par. Civil Code), or (b) Philippine law, by
implication from the provisions of Art. 816, Civil Code,
which allows even an alien who is abroad to make a will
in conformity with our Civil Code.
SUGGESTED ANSWER:
4. The intrinsic validity of his will is governed by Philippine
law, it being his national law. (Art. 16, Civil Code)
Applicable Laws; Arts 15, 16, 17 (2002)
Felipe and Felisa, both Filipino citizens, were married in
Malolos, Bulacan on June 1, 1950. In 1960 Felipe went to
the United States, becoming a U.S. citizen in 1975. In
1980 they obtained a divorce from Felisa, who was duly
notified of the proceedings. The divorce decree became
final under California Law. Coming back to the Philippines
in 1982, Felipe married Sagundina, a Filipino Citizen. In
2001, Filipe, then domiciled in Los Angeles, California,
died, leaving one child by Felisa, and another one by
Sagundina. He left a will which he left his estate to
Sagundina and his two children and nothing to Felisa.
Sagundina files a petition for the probate of Felipe’s will.
Felisa questions the intrinsic validity of the will, arguing
that her marriage to Felipe subsisted despite the divorce
obtained by Felipe because said divorce is not
recognized in the Philippines. For this reason, she claims
that the properties and that Sagundina has no
successional rights.
A. Is the divorce secured by Felipe in California
recognizable and valid in the Philippines? How does it
affect Felipe’s marriage to Felisa? Explain. (2%).
B. What law governs the formalities of the will? Explain.
(1%)
C. Will Philippine law govern the intrinsic validity of the
will? Explain. (2%)
SUGGESTED ANSWER:
A. (1.) The divorce secured by Felipe in California is
recognizable and valid in the Philippines because he was
no longer a Filipino at that time he secured it, Aliens may
14
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obtain divorces abroad which may be recognized in the
Philippines provided that they are valid according to their
national law (Van Dorn V. Romillo, Jr., 139 SCRA 139
[1985]; Quita v. Court of Appeals, 300 SCRA 406 [1998];
Llorente v. Court of Appeals, 345 SCRA 595 [2000] ).
(2). With respect to Felipe the divorce is valid, but with
respect to Felisa it is not. The divorce will not capacitate
Felisa to remarry because she and Felipe were both
Filipinos at the time of their marriage. However, in DOJ
Opinion No. 134 series of 1993, Felisa is allowed to
remarry because the injustice sought to be corrected by
Article 26 also obtains in her case.
SUGGESTED ANSWER:
B. The foreigner who executes his will in the Philippines
may observed the formalities described in:
1. The Law of the country of which he is a citizen under
Article 817 of the New Civil Code, or
2. the law of the Philippines being the law of the place of
execution under Article 17 of the New Civil Code.
SUGGESTED ANSWER:
C. Philippine law will not govern the intrinsic validity of the
will. Article 16 of the New Civil Code provides that
intrinsic validity of testamentary provisions shall be
governed by the National Law of the person whose
succession is under consideration. California law will
govern the intrinsic validity of the will.
Applicable Laws; Capacity to Act (1998 )
Francis Albert, a citizen and resident of New
Jersey, U.S.A., under whose law he was still a
minor, being only 20 years of age, was hired by
ABC Corporation of Manila to serve for two years
as its chief computer programmer. But after serving
for only four months, he resigned to join XYZ
Corporation, which enticed him by offering more
advantageous terms. His first employer sues him in
Manila for damages arising from the breach of his
contract of employment. He sets up his minority as
a defense and asks for annulment of the contract
on that ground. The plaintiff disputes this by
alleging that since the contract was executed in the
Philippines under whose law the age of majority is
18 years, he was no longer a minor at the time of
perfection of the contract.
1 Will the suit prosper? [3%]
2 Suppose XYZ Corporation is impleaded as a co-
defendant, what would be the basis of its liability, if
any? [2%]
SUGGESTED ANSWER:
1. The suit will not prosper under Article 15, Civil
Code, New Jersey law governs Francis Albert's
capacity to act, being his personal law from the
standpoint of both his nationality and his domicile.
He was, therefore, a minor at the time he entered
into the contract.
ALTERNATIVE ANSWER:
1. The suit will not prosper. Being a U.S. national,
Albert's capacity to enter into a contract is
determined by the law of the State of which he is a
national, under which he to still a minor. This is in
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
connection with Article 15 of the Civil Code which
embodies the said nationality principle of lex
patriae. While this principle intended to apply to
Filipino citizens under that provision, the Supreme
Court in Recto v. Harden is of the view that the
status or capacity of foreigners is to be determined
on the basis of the same provision or principle, i.e.,
by U.S. law in the present problem.
Persons is governed by the law of his nationality.
Plaintiffs argument does not hold true, because
status or capacity is not determined by lex loci
contractus but by lex patriae.
ANOTHER ANSWER:
1. Article 17 of the Civil Code provides that the
forms and solemnities of contracts, wills and other
public instruments shall be governed by the laws of
the country in which they are executed.
Since the contract of employment was executed in
Manila, Philippine law should govern. Being over 18
years old and no longer a minor according to
Philippine Law, Francis Albert can be sued. Thus,
the suit of ABC Corporation against him for
damages will prosper.
SUGGESTED ANSWER:
2. XYZ Corporation, having enticed Francis Albert
to break his contract with the plaintiff, may be held
liable for damages under Art. 1314, Civil Code.
Note: this is also the same with the doctrine of tortous
interference.
ALTERNATIVE ANSWER:
2. The basis of liability of XYZ Corporation would be
Article 28 of the Civil Code which states that:
"Unfair competition in agricultural, commercial, or
industrial enterprises or in labor through the use of
force, intimidation, deceit, machination or any other
unjust, oppressive or highhanded method shall give
rise to a right of action by the person who thereby
suffers damage."
ANOTHER ANSWER:
2. No liability arises. The statement of the problem
does not in any way suggest intent, malice, or even
knowledge, on the part of XYZ Corporation as to
the contractual relations between Albert and ABC
Corporation.
2012 Bar Exam Question
7. Even if the applicable law is a foreign law, a
count in the Philippines may be constrained to
apply Philippine law under any of the following
instances, except: a) when the foreign law,
judgment or contract is contrary to a sound
and important public policy of the forum; b)
when the property subject of the case is
located outside of the Philippines; c) when
the foreign law or judgment is penal in
nature; d) when the foreign law is procedural
in nature.
15
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Applicable Laws; Capacity to Buy Land (1995)
3. What law governs the capacity of the Filipino to buy the
land? Explain your answer and give its legal basis.
SUGGESTED ANSWER:
Philippine law governs the capacity of the Filipino to buy
the land. In addition to the principle of lex rei sitae given
above. Article 15 of the NCC specifically provides that
Philippine laws relating to legal capacity of persons are
binding upon citizens of the Philippines no matter where
they are.
Applicable Laws; Capacity to Contract (1995)
2. What law governs the capacity of the Japanese to sell
the land? Explain your answer and give its legal basis.
SUGGESTED ANSWER:
Japanese law governs the capacity of the Japanese to
sell the land being his personal law on the basis of an
interpretation of Art. 15, NCC.
ALTERNATIVE ANSWERS;
a) Since capacity to contract is governed by the personal
law of an individual, the Japanese seller's capacity should
be governed either by his national law (Japanese law) or
by the law of his domicile, depending upon whether
Japan follows the nationality or domiciliary theory of
personal law for its citizens.
b) Philippine law governs the capacity of the Japanese
owner in selling the land. While as a general rule capacity
of concerning transactions involving property is an
exception. Under Article 16 of the NCC the capacity of
persons in transactions involving title to property is
governed by the law of the country where the property is
situated. Since the property is in the Philippines,
Philippine law governs the capacity of the seller.
2012 Bar Exam Question
9. A Japanese national and a Filipino national
entered into a contract for services in
Thailand. The services will be rendered in
Singapore. In case of breach, what law will
govern? a) Thailand law b) Philippine law c)
Singapore law d) Japanese law
CHAPTER 2
HUMAN RELATIONS (n)
Art. 19. Every person must, in the exercise of his
rights and in the performance of his duties, act with
justice, give everyone his due, and observe honesty
and good faith.
PRINCIPLE OF ABUSE OF RIGHTS
It is when the right is exercised for the purpose of
prejudicing or injuring another.
Requisites:
1. There is a legal right or duty;
2. Which is exercised in bad faith;
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
3. For the sole intent of prejudicing or injuring
another.
DOCTRINE OF VOLENTI NON FIT INJURIA
Pertains to self-inflicted injuries or to the consent to
injury which precludes the recovery of damages by
one who has knowingly and voluntarily exposed
himself to danger, even if he is not negligent in
doing so.
Art. 20. Every person who, contrary to law, willfully
or negligently causes damage to another, shall
indemnify the latter for the same.
Art. 21. 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 the latter for the damage.
ACTS CONTRA BONUS MORES
Presupposes loss or injury, material or otherwise,
which one may differ as a result of such violation.
Requisites:
1. There is an act which is legal;
2. But which is contrary to morals, good
customs, public order or public policy;
3. And it is done with intent to injure.
Under arts. 19 and 21, the act must be done
intentionally. However, art. 20 does not distinguish,
the act may be done either intentionally or
negligently, as long as the act is contrary to law.
While breach of promise to marry is, generally, not
actionable, it has been held that to formally set a
wedding and go through and spend for all the
wedding preparations and publicity, only to walk out
of it when the matrimony was about to be
solemnized is a different matter. Such act is
palpably and unjustifiably contrary to good customs
for which the defendant must be held answerable
for damages in accordance with art. 21, NCC.
Damages are also available when breach promise
to marry is attended with deceit or moral seduction.
Art. 22. Every person who through an act of
performance by another, or any other means,
acquires or comes into possession of something at
the expense of the latter without just or legal
ground, shall return the same to him.
ACCION IN REM VERSO
Action for the recovery of what has been paid
without just cause, without mistake.
Requisites:
16
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1. Defendant has been enriched;
2. Plaintiff suffers a loss;
3. Enrichment of the defendant is without legal
ground;
4. Plaintiff has no other action based on
contract, quasi-contract, crime or quasi-
delict.
As distinguished from solutio indebiti: Mistake is an
essential element in solutio indebiti but not in accion
in rem verso.
NOTE: failure to return something received with the
duty to return the same or denying having received
something may constitute estafa under art. 315,
1[b], RPC.
Also a person who shall accept any compensation
given him under the belief that it was in payment of
services or labor performed by him, when in fact he
did not actually performed such services or labor is
guilty of other forms of swindling under art. 316 [5],
RPC.
Art. 23. Even when an act or event causing
damage to another's property was not due to the
fault or negligence of the defendant, the latter shall
be liable for indemnity if through the act or event he
was benefited.
NOTE: This is the Principle of Unjust Enrichment.
Take note that theft is likewise committed by
any person who, after having maliciously
damaged the property of another, shall
remove or make use of the fruits or objects of
the damaged caused by him (art. 308 [2],
RPC).
Art. 24. In all contractual, property or other
relations, when one of the parties is at a
disadvantage on account of his moral dependence,
ignorance, indigence, mental weakness, tender age
or other handicap, the courts must be vigilant for his
protection.
Art. 25. Thoughtless extravagance in expenses for
pleasure or display during a period of acute public
want or emergency may be stopped by order of the
courts at the instance of any government or private
charitable institution.
Art. 26. Every person shall respect the dignity,
personality, privacy and peace of mind of his
neighbors and other persons. The following and
similar acts, though they may not constitute a
criminal offense, shall produce a cause of action for
damages, prevention and other relief:
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(1) Prying into the privacy of another's
residence:
(2) Meddling with or disturbing the private
life or family relations of another;
(3) Intriguing to cause another to be
alienated from his friends;
(4) Vexing or humiliating another on
account of his religious beliefs, lowly station
in life, place of birth, physical defect, or
other personal condition.
Art. 27. Any person suffering material or moral loss
because a public servant or employee refuses or
neglects, without just cause, to perform his official
duty may file an action for damages and other relief
against the latter, without prejudice to any
disciplinary administrative action that may be taken.
Art. 28. Unfair competition in agricultural,
commercial or industrial enterprises or in labor
through the use of force, intimidation, deceit,
machination or any other unjust, oppressive or
highhanded method shall give rise to a right of
action by the person who thereby suffers damage.
Art. 29. When the accused in a criminal prosecution
is acquitted on the ground that his guilt has not
been proved beyond reasonable doubt, a civil
action for damages for the same act or omission
may be instituted. Such action requires only a
preponderance of evidence. Upon motion of the
defendant, the court may require the plaintiff to file
a bond to answer for damages in case the
complaint should be found to be malicious.
If in a criminal case the judgment of acquittal is
based upon reasonable doubt, the court shall so
declare. In the absence of any declaration to that
effect, it may be inferred from the text of the
decision whether or not the acquittal is due to that
ground.
Art. 30. When a separate civil action is brought to
demand civil liability arising from a criminal offense,
and no criminal proceedings are instituted during
the pendency of the civil case, a preponderance of
evidence shall likewise be sufficient to prove the act
complained of.
Art. 31. When the civil action is based on an
obligation not arising from the act or omission
complained of as a felony, such civil action may
proceed independently of the criminal proceedings
and regardless of the result of the latter.
17
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Art. 32. Any public officer or employee, or any
private individual, who directly or indirectly
obstructs, defeats, violates or in any manner
impedes or impairs any of the following rights and
liberties of another person shall be liable to the
latter for damages:
(1) Freedom of religion;
(2) Freedom of speech;
(3) Freedom to write for the press or to
maintain a periodical publication;
(4) Freedom from arbitrary or illegal
detention;
(5) Freedom of suffrage;
(6) The right against deprivation of
property without due process of law;
(7) The right to a just compensation when
private property is taken for public use;
(8) The right to the equal protection of the
laws;
(9) The right to be secure in one's person,
house, papers, and effects against
unreasonable searches and seizures;
(10) The liberty of abode and of changing
the same;
(11) The privacy of communication and
correspondence;
(12) The right to become a member of
associations or societies for purposes not
contrary to law;
(13) The right to take part in a peaceable
assembly to petition the government for
redress of grievances;
(14) The right to be free from involuntary
servitude in any form;
(15) The right of the accused against
excessive bail;
(16) The right of the accused to be heard
by himself and counsel, to be informed of
the nature and cause of the accusation
against him, to have a speedy and public
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
trial, to meet the witnesses face to face,
and to have compulsory process to secure
the attendance of witness in his behalf;
(17) Freedom from being compelled to be
a witness against one's self, or from being
forced to confess guilt, or from being
induced by a promise of immunity or reward
to make such confession, except when the
person confessing becomes a State
witness;
(18) Freedom from excessive fines, or
cruel and unusual punishment, unless the
same is imposed or inflicted in accordance
with a statute which has not been judicially
declared unconstitutional; and
(19) Freedom of access to the courts.
In any of the cases referred to in this article,
whether or not the defendant's act or omission
constitutes a criminal offense, the aggrieved party
has a right to commence an entirely separate and
distinct civil action for damages, and for other relief.
Such civil action shall proceed independently of any
criminal prosecution (if the latter be instituted), and
may be proved by a preponderance of evidence.
The indemnity shall include moral damages.
Exemplary damages may also be adjudicated.
The responsibility herein set forth is not
demandable from a judge unless his act or
omission constitutes a violation of the Penal Code
or other penal statute.
Damages; Public Officers acting in the
Performance of their Duties (2012) No.II.a)
Liwayway Vinzons-Chato was then the
Commissioner of Internal Revenue while
Fortune Tobacco Corporation is an entity
engaged in the manufacture of different
brands of cigarettes, among which are
"Champion," "Hope," and "More" cigarettes.
Fortune filed a complaint against Vinzons-
Chato to recover damages for the alleged
violation of its constitutional rights arising
from Vinzons-Chato’s issuance of Revenue
Memorandum Circular No. 37-934 (which re-
classified Fortune cigarettes as locally
manufactured with foreign brands and thereby
imposed higher taxes), which the Supreme
Court later declared invalid. Vinzons-Chato
filed a Motion to Dismiss arguing that she
cannot be held liable for damages for acts she
performed while in the discharge of her duties
as BIR Commissioner. Is she correct? Explain.
18
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(5%) SUGGESTED ANSWER: Yes. As a
general rule, a public officer is not liable for
acts performed in the discharge of his
duties. The exceptions are when he acted
with malice, bad faith, or gross negligence
in the performance of his duty, or when his
act is in violation of a Constitutional
guaranteed right and liberties of a person
under Art32 of the NCC. The public officer
is not automatically considered to have
violated the rights or liberties of a person
simply because the rule the public officer
issued was declared invalid by the court.
The complainant must still allege and prove
the particular injury or prejudice he has
suffered from the violation of his
constitutional right by the issuance of the
invalidated rule.
The problem does not state any fact from
which any malice, bad faith or gross
negligence on the part of Vinzons-Chato
may be inferred, or the particular injury or
prejudice the complainant may have
suffered as a result of the violation of his
constitutional right. Hence, she cannot be
held liable. The facts presented are similar
to facts of the case of Vinzons-Chato v.
Fortune, G.R. No. 141309, Dec 23, 2008.
Art. 33. In cases of defamation, fraud, and physical
injuries a civil action for damages, entirely separate
and distinct from the criminal action, may be
brought by the injured party. Such civil action shall
proceed independently of the criminal prosecution,
and shall require only a preponderance of evidence.
Art. 34. When a member of a city or municipal
police force refuses or fails to render aid or
protection to any person in case of danger to life or
property, such peace officer shall be primarily liable
for damages, and the city or municipality shall be
subsidiarily responsible therefor. The civil action
herein recognized shall be independent of any
criminal proceedings, and a preponderance of
evidence shall suffice to support such action.
Art. 35. When a person, claiming to be injured by a
criminal offense, charges another with the same, for
which no independent civil action is granted in this
Code or any special law, but the justice of the
peace finds no reasonable grounds to believe that a
crime has been committed, or the prosecuting
attorney refuses or fails to institute criminal
proceedings, the complainant may bring a civil
action for damages against the alleged offender.
Such civil action may be supported by a
preponderance of evidence. Upon the defendant's
motion, the court may require the plaintiff to file a
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
bond to indemnify the defendant in case the
complaint should be found to be malicious.
If during the pendency of the civil action, an
information should be presented by the prosecuting
attorney, the civil action shall be suspended until
the termination of the criminal proceedings.
Art. 36.
Pre-judicial questions which must be decided
before any criminal prosecution may be instituted or
may proceed, shall be governed by rules of court
which the Supreme Court shall promulgate and
which shall not be in conflict with the provisions of
this Code.
Note: Prejudicial Question is properly
discussed in Remedial Law Reviewer.
Prejudicial Questions (1997)
In the context that the term is used in Civil Law,
state the
(a) concept, (b) requisites and (c) consequences of
a prejudicial question.
SUGGESTED ANSWER:
(a) Concept A prejudicial question is one which
must be decided first before a criminal action may
be instituted or may proceed because a decision
therein is vital to the judgment in the criminal case.
In the case of People vs. Adelo Aragon (L-5930,
Feb. 17, 1954), the Supreme Court defined it as
one which arises in a case, the resolution of which
question is a logical antecedent of the issues
involved in said case and the cognizance of which
pertains to another tribunal (Paras, Vol. 1, Civil.
Code Annotation, 1989 ed. p, 194).
(b) Requisites
1 The prejudicial question must be
determinative of the case before the court.
2 Jurisdiction to try said question must be
lodged in another tribunal.
ADDITIONAL ANSWER:
related to the issue raised in the criminal action,
and
2. the resolution of such issue determines whether
or not the criminal action may proceed.
(c) Consequences The criminal case must be
suspended. Thus, in a criminal case for damages to
one's property, a civil action that involves the
ownership of said property should first be resolved
(De Leon vs. Mabanag. 38 Phil. 202)
19
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Juridical capacity is the fitness to be the
subject of legal relations. d) Juridical
capacity cannot exist without capacity to

PERSONS &
act.

2012 Bar Exam Question

FAMILY 79. If one of the parties to the contract is

without juridical capacity, the contract is: a)
voidable b) rescissible c) void d) unenforceable
RELATIONS
JURIDICAL CAPACITY CAPACITY TO ACT
Fitness to be subject of Power to do acts with
BOOK I legal relations legal effects
Passive Active
PERSONS Inherent Merely acquired
Can exist without Cannot exist without
capacity to act juridical capacity
Title I. - CIVIL PERSONALITY Cannot be limited or Can be restricted,
restricted modified, or limited
CHAPTER 1
GENERAL PROVISIONS
THEORIES ON CAPACITY TO ACT
Art. 37. Juridical capacity, which is the fitness to be Theory of General Theory of Special
the subject of legal relations, is inherent in every Capacities Capacities
natural person and is lost only through death. Applies to natural Applies to juridical
Capacity to act, which is the power to do acts with persons persons
legal effect, is acquired and may be lost. (n) One has the ability to do The powers of juridical
all things with legal persons are limited only
Juridical Capacity vs. Capacity to Act effects except only in to those that are
(1996) those specific expressly conferred
Distinguish juridical capacity from capacity to act, circumstances where upon them by or those
SUGGESTED ANSWER: the capacity to act is which can be implied
JURIDICAL CAPACITY is the fitness to be the restrained therefrom or incidental
subject of legal relations while CAPACITY TO ACT thereto
is the power or to do acts with legal effect. The
former is inherent in every natural person and is lost
only through death while the latter is merely Art. 38. Minority, insanity or imbecility, the state of
acquired and may be lost even before death (Art. being a deaf-mute, prodigality and civil interdiction
37, NCC). are mere restrictions on capacity to act, and do not
ALTERNATIVE ANSWER; exempt the incapacitated person from certain
Juridical capacity, as distinguished from capacity to obligations, as when the latter arise from his acts or
act: (a) from property relations, such as easements. (32a)
conditions detrimental to the moral well-being of
their the former is passive while the latter is active,
2012 Bar Exam Question
(b) the former is inherent in a person while the latter
2. Which of the following is NOT a restriction
is merely acquired, (c) the former is lost only
on one’s capacity to act? a) Minority b)
through death while the latter may be lost through
Marriage c) Deaf-mute d) Civil Interdiction
death or restricted by causes other than death, and
SUGGESTED ANSWER: This question should
the former can exist without capacity to act while
the latter cannot exist without juridical capacity. be disregarded.
(NOTE: There is no correct answer among the
2012 Bar Exam Question choices given. All choices are restrictions on
1. Which of the following is NOT included in one’s capacity to act. While Marriage is the only
the attributes of juridical capacity? a) Juridical one not mentioned in Articles 38 and 39 of the
capacity is inherent in every natural person, NCC as a restriction on capacity to act, it
and therefore it is not acquired. b) Juridical restricts the capacity of a married person in
capacity is lost only through death. c) cases of adoption.)

JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 20

____________________________________________________________________________________________________
Art. 39. The following circumstances, among
others, modify or limit capacity to act: age, insanity,
imbecility, the state of being a deaf-mute, penalty,
prodigality, family relations, alienage, absence,
insolvency and trusteeship. The consequences of
these circumstances are governed in this Code,
other codes, the Rules of Court, and in special
laws. Capacity to act is not limited on account of
religious belief or political opinion.
A married woman, twenty-one years of age or over,
is qualified for all acts of civil life, except in cases
specified by law. (n)
CHAPTER 2
NATURAL PERSONS
Art. 40. Birth determines personality; but the
conceived child shall be considered born for all
purposes that are favorable to it, provided it be born
later with the conditions specified in the following
article. (29a)
NOTE: Concept of provisional personality cannot
be invoked to obtain damages for and in behalf of
an aborted child.
2011 Bar Exam
(100) Because of X’s gross negligence, Y
suffered injuries that resulted in the abortion
of the foetus she carried. Y sued X for, among
other damages, P1 million for the death of a
family member. Is Y entitled to indemnity for
the death of the foetus she carried? (A) Yes,
since the foetus is already regarded as a child
from conception, though unborn. (B) No, since
X’s would not have known that the accident
would result in Y’s abortion. (C) No, since
birth determines personality, the accident
did not result in the death of a person. (D)
Yes, since the mother believed in her heart
that she lost a child.
2011 Bar Exam Question
(42) Birth determines personality. Death
extinguishes it. Under what circumstances
may the personality of a deceased person
continue to exist? (A) In case of re-appearance
of a missing person presumed dead. (B) In
protecting the works of a deceased under
intellectual property laws. (C) In case of
declaration of presumptive death of a missing
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
spouse. (D) In the settlement of the estate
of a deceased person.
Capacity: Juridical Capacity (2008) No. II. At age
18, Marian found out that she was pregnant. She
insured her own life and named her unborn child as
her sole beneficiary. When she was already due to
give birth, she and her boyfriend Pietro, the father
of her unboarn child, were kidnapped in a resort in
Bataan where they were vacationing. The military
gave chase and after one week, they were found in
an abandoned hut in Cavite. Marian and Pietro
were hacked with bolos. Marian and the baby
delivered were both found dead, with the baby's
umbilical cord already cut. Pietro survived. (A). Can
Marian's baby be the beneficiary of the insurance
taken on the life of the mother? (2%) SUGGESTED
ANSWER:
Yes, the baby can be the beneficiary of the life
insurance of Marian. Art. 40 NCC provides that
"birth determines personality; but the conceived
child shall be considered born for all purposes
that are favorable to it, provided that it be born
later with the conditions specified in Art. 41.
Article 41 states that "for civil purposes, the
fetus shall be considered born if it is alive at the
time it is completely delivered from the mother's
womb. However, if the fetus had an intra-uterine
life of less than seven months, it is not deemed
born if it dies within twenty-four (24) hours after
its complete delivery from the maternal womb.
The act of naming the unborn child as sole
beneficiary in the insurance is favorable to the
conceived child and therefore the fetus acquires
presumptive or provisional personality.
However, said presumptive personality only
becomes conclusive if the child is born alive.
The child need not survive for twenty-four (24)
hours as required under Art. 41 of the Code
because "Marian was already due to give birth,"
indicating that the child was more than seven
months old.
Art. 41. For civil purposes, the fetus is considered
born if it is alive at the time it is completely delivered
from the mother's womb. However, if the fetus had
an intra-uterine life of less than seven months, it is
not deemed born if it dies within twenty-four hours
after its complete delivery from the maternal womb.
(30a)
Donations; Validity; Effectivity; for Unborn Child
(1999)
Elated that her sister who had been married for five years
was pregnant for the first time, Alma donated
P100,000.00 to the unborn child. Unfortunately, the baby
died one hour after delivery. May Alma recover the
P100.000.00 that she had donated to said baby before it
was born considering not been fixed in the Deed of
21
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Donation, the donee is not that the baby died? Stated
otherwise, is the donation valid and binding? Explain.
(5%)
SUGGESTED ANSWER:
The donation is valid and binding, being an act favorable
to the unborn child, but only if the baby had an intra-
uterine life of not less than seven months and provided
there was due acceptance of the donation by the proper
person representing said child. If the child had less than than 24 hours following its delivery, in which ease the
seven months of intra-uterine life, it is not deemed born
since it died less than 24 hours following its delivery, in never became a person, birth being determinative of
which ease the donation never became effective since
the donee never became a person, birth being
determinative of personality.
ALTERNATIVE ANSWER:
Even if the baby had an intra-uterine life of more than
seven months and the donation was properly accepted, it
would be void for not having conformed with the proper
form. In order to be valid, the donation and acceptance of exceeding five thousand pesos should be in writing.
personal property exceeding five thousand pesos should
be in writing. (Article 748, par. 3)
Capacity; Juridical Capacity of Donee;
Requisites for Acceptance (2012) No.I. b) Ricky
donated P 1 Million to the unborn child of his
pregnant girlfriend, which she accepted. After six
(6) months of pregnancy, the fetus was born and
baptized as Angela. However, Angela died 20 hours
after birth. Ricky sought to recover the P 1 Million.
Is Ricky entitled to recover? Explain. (5%)
SUGGESTED ANSWER:
Yes, Ricky is entitled to recover the
P1,000,000.00.
The new Civil Code considers a fetus a person
for purposes favorable to it provided it is born
later in accordance with the provision of the
NCC. While the donation is favorable to the
fetus, the donation did not take effect because
the fetus was not born in accordance with the
NCC. To be considered born, the fetus that had
an intrauterine life of less than seven (7) months
should live for 24 hours from its complete
delivery from the mother’s womb. Since Angela
had an intrauterine life of less than seven (7)
months but did not live for 24 hours, she was
not considered born and, therefore, did not
become a person. Not being a person, she has
no juridical capacity to be a donee, hence, the
donation to her did not take effect. The donation
not being effective, the amount donated may be
recovered. To retain it will be unjust enrichment.
Juridical Capacity; Natural Persons (1999)
Elated that her sister who had been married for five years
was pregnant for the first time, Alma donated
P100,000.00 to the unborn child. Unfortunately, the baby
died one hour after delivery. May Alma recover the
P100.000.00 that she had donated to said baby before it
was born considering that the baby died? Stated
otherwise, is the donation valid and binding? Explain.
(5%)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
SUGGESTED ANSWER:
The donation is valid and binding, being an act
favorable to the unborn child, but only if the baby had
an intra-uterine life of not less than seven months
and pro-vided there was due acceptance of the
donation by the proper person representing said
child. If the child had less than seven months of intra-
uterine life, it is not deemed born since it died less
donation never became effective since the donee
personality.
ALTERNATIVE ANSWER:
Even if the baby had an intra-uterine life of more than
seven months and the donation was properly
accepted, it would be void for not having conformed
with the proper form. In order to be valid, the
donation and acceptance of personal property
(Article 748, par. 3)
Art. 42. Civil personality is extinguished by death.
The effect of death upon the rights and obligations
of the deceased is determined by law, by contract
and by will. (32a)
Art. 43. If there is a doubt, as between two or more
persons who are called to succeed each other, as
to which of them died first, whoever alleges the
death of one prior to the other, shall prove the
same; in the absence of proof, it is presumed that
they died at the same time and there shall be no
transmission of rights from one to the other. (33)
Note: This applies only to cases involving
succession. If it is not involving succession, sec. 3
(jj), Rule 131, of the Rules of Court governs.
(Survivorship Rules).
The proof of death must be established by
positive evidence. Proof of death can never
be established from mere inference arising
from another inference or from presumptions
or assumptions.
Death; Effects; Simultaneous Death (1998)
Jaime, who is 65, and his son, Willy, who is 25, died in a plane
crash. There is no proof as to who died first. Jaime's only
surviving heir is his wife, Julia, who is also Willy's mother.
Willy's surviving heirs are his mother, Julia and his wife,
Wilma.
1. In the settlement of Jaime's estate, can Wilma successfully
claim that her late husband, Willy had a hereditary share since
he was much younger than his father and, therefore, should be
presumed to have survived longer? [3%]
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2. Suppose Jaime had a life insurance policy with his wife,
Julia, and his son, Willy, as the beneficiaries. Can Wilma
successfully claim that one-half of the proceeds should belong
to Willy's estate? |2%J
SUGGESTED ANSWER:
1. No, Wilma cannot successfully claim that Willy had a
hereditary share in his father's estate. Under Art. 43, Civil
Code, two persons "who are called to succeed each other" are
presumed to have died at the same time, in the absence of proof
as to which of them died first. This presumption of
simultaneous death applies in cases involving the question of
succession as between the two who died, who in this case are
mutual heirs, being father and son.
SUGGESTED ANSWER:
2. Yes, Wilma can invoke the presumption of survivorship and
claim that one-half of the proceeds should belong to Willy's
estate, under Sec. 3 (jj) par. 5 Rule 131, Rules of Court, as the share in her own right as she is not a legal heir of her mother-
dispute does not involve succession. Under this presumption,
the person between the ages of 15 and 60 years is deemed to
have survived one whose age was over 60 at the time of their
deaths. The estate of Willy endowed with juridical personality
stands in place and stead of Willy, as beneficiary.
Death; Effects; Simultaneous Death (1999)
Mr. and Mrs. Cruz, who are childless, met with a serious motor
vehicle accident with Mr. Cruz at the wheel and Mrs. Cruz
seated beside him, resulting in the instant death of Mr. Cruz.
Mrs. Cruz was still alive when help came but she also died on
the way to the hospital. The couple acquired properties worth
One Million (P1 ,000,000.00) Pesos during their marriage,
which are being claimed by the parents of both spouses in equal
shares. Is the claim of both sets of parents valid and why? (3%)
(b) Suppose in the preceding question, both Mr. and Mrs. Cruz
were already dead when help came, so that no-body could say
who died ahead of the other, would your answer be the same to
the question as to who are entitled to the properties of the
deceased couple? (2%)
SUGGESTED ANSWER:
(a) No, the claim of both parents is not valid. When Mr. Cruz
died, he was succeeded by his wife and his parents as his
intestate heirs who will share his estate equally. His estate was
0.5 Million pesos which is his half share in the
wife, will, therefore, inherit O.25 Million Pesos and his parents
will inherit 0.25 Million Pesos. When Mrs. Cruz died, she was
succeeded by her parents as her intestate heirs. They will
inherit all of her estate consisting of her 0.5 Million half share
in the absolute community and her 0.25 Million inheritance
from her husband, or a total of 0.750 Million Pesos.
In sum, the parents of Mr. Cruz will inherit 250,000 Pesos
while the parents of Mrs. Cruz will inherit 750,000 Pesos.
(b) This being a case of succession, in the absence of proof as
to the time of death of each of the spouses, it is presumed they
died at the same time and no transmission of rights from one to
the other is deemed to have taken place. Therefore, each of
them is deemed to have an estate valued at P500,000,00, or
one-half of their conjugal property of P1 million. Their
respective parents will thus inherit the entire P1 Million in
equal shares, of P500,000.00 per set of parents.
Death; Effects; Simultaneous Death (2000)
b) Cristy and her late husband Luis had two children, Rose and
Patrick, One summer, her mother-in-law, aged 70, took the two
children, then aged 10 and 12, with her on a boat trip to Cebu.
Unfortunately, the vessel sank en route, and the bodies of the
three were never found. None of the survivors ever saw them
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
on the water. On the settlement of her mother-in-law's estate,
Cristy files a claim for a share of her estate on the ground that
the same was inherited by her children from their grandmother
in representation of their father, and she inherited the same
from them. Will her action prosper? (2%)
SUGGESTED ANSWER:
No, her action will not prosper. Since there was no proof as to
who died first, all the three are deemed to have died at the same
time and there was no transmission of rights from one to
another, applying Article 43 of the New Civil Code.
ALTERNATIVE ANSWER:
No, her action will not prosper. Under Article 43 of the New
Civil Code, inasmuch as there is no proof as to who died first,
all the three are presumed to have died at the same time and
there could be no transmission of rights among them. Her
children not having inherited from their grandmother. Cristy
has no right to share in her mother-in¬law's estate. She cannot
in-law. The survivorship provision of Rule 131 of the Rules of
Court does not apply to the problem. It applies only to those
cases where the issue involved is not succession.
Succession; Proof of Death between persons
called to succeed each other (2008) No. II.
At age 18, Marian found out that she was
pregnant. She insured her own life and named
her unborn child as her sole beneficiary. When
she was already due to give birth, she and her
boyfriend Pietro, the father of her unboarn
child, were kidnapped in a resort in Bataan
where they were vacationing. The military gave
chase and after one week, they were found in
an abandoned hut in Cavite. Marian and
Pietro were hacked with bolos. Marian and the
baby delivered were both found dead, with the
baby's umbilical cord already cut. Pietro
survived.
(B). Between Marian and the baby, who is
presumed to have died ahead? (1%)
SUGGESTED ANSWER: Marian is presumed
to have died ahead of the baby. Art. 43
applies to persons who are called to
succeed each other. The proof of death
must be established by positive or
circumstantial evidence derived from facts.
It can never be established from mere
inference. In the present case, it is very
clear that only Marian and Pietro were
hacked with bolos. There was no showing
that the baby was also hacked to death. The
baby's death could have been due to lack of
nutrition. ALTERNATIVE ANSWER: The
baby is presumed to have died ahead of
Marian. Under Par. 5, rule 131, Sec. 5 (KK)
of the Rules of Court, if one is under 15 or
above 60 and the age of the other is in
between 15 and 60, the latter is presumed
to have survived. In the instant case,
Marian was already 18 when she found out
that she was pregnant. She could be of the
23
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same age or maybe 19 years of age when
she gave birth.
(C). Will Pietro, as surviving biological father of
the baby, be entitled to claim the proceeds of
the life insurance on the life of Marian? (2%)
SUGGESTED ANSWER: Pietro, as the
biological father of the baby, shall be
entitled to claim the proceeds of life
insurance of the Marian because he is a
compulsory heir of his child.
Succession; Rule on Survivorship (2009) No.
II. Dr. Lopez, a 70-year old widower, and his
son Roberto both died in a fire that gutted
their home while they were sleeping in their
air-conditioned rooms. Roberto’s wife, Marilyn,
and their two children were spared because
they were in the province at the time. Dr.
Lopez left an estate worth P20M and a life
insurance policy in the amount of P1M with
his three children --- one of whom is Roberto -
-- as beneficiaries. Marilyn is now claiming for
herself and her children her husband’s share
in the estate left by Dr. Lopez, and her
husband’s share in the proceeds of Dr. Lopez’s
life insurance policy. Rule on the validity of
Marilyn’s claims with reasons. (4%)
SUGGESTED ANSWER : As to the Estate of
Dr. Lopez:
Marilyn is not entitled to a share in the
estate of Dr. Lopez. For purpose of
succession, Dr. Lopez and his son Roberto
are presumed to have died at the same
time, there being no evidence to prove
otherwise, and there shall be no
transmission of rights from one to the
other (Article 43, NCC). Hence, Roberto,
inherited nothing from his father that
Marilyn would in turn inherit from Roberto
.The children of Roberto, however, will
succeed their grandfather, Dr. Lopez ,in
representation of their father Roberto and
together Roberto will receive 1/3 of the
estate of Dr. Lopez since their father
Roberto was one of the three children of Dr.
Lopez . Marilyn cannot represent her
husband Roberto because the right is not
given by the law to a surviving spouse. As
to the proceeds of the insurance on the life
of Dr. Lopez:
Since succession is not involved as regards
the insurance contract, the provisions of
the Rules of Court (Rule 131, Sec. 3 , [jj] [5]
) on survivorship shall apply. Under the
Rules, Dr. Lopez, who was 70 years old, is
presumed to have died ahead of Roberto
who is presumably between the ages 15 and
60. Having survived the insured, Roberto's
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
right as a beneficiary became vested upon
the death of Dr. Lopez. When Roberto died
after Dr. Lopez, his right to receive the
insurance became part of his hereditary
estate, which in turn was inherited in equal
shares by his legal heirs, namely, his
spouse and children. Therefore, Roberto's
children and his spouse are entitled to
Roberto's onethird share in the insurance
proceeds.
CHAPTER 3
JURIDICAL PERSONS
NOTE: arts. 44-47 are excluded from the coverage.
Art. 44. The following are juridical persons:
(1) The State and its political subdivisions;
(2) Other corporations, institutions and
entities for public interest or purpose,
created by law; their personality begins as
soon as they have been constituted
according to law;
(3) Corporations, partnerships and
associations for private interest or purpose
to which the law grants a juridical
personality, separate and distinct from that
of each shareholder, partner or member.
(35a)
Art. 45. Juridical persons mentioned in Nos. 1 and
2 of the preceding article are governed by the laws
creating or recognizing them.
Private corporations are regulated by laws of
general application on the subject.
Partnerships and associations for private interest or
purpose are governed by the provisions of this
Code concerning partnerships. (36 and 37a)
Art. 46. Juridical persons may acquire and possess
property of all kinds, as well as incur obligations
and bring civil or criminal actions, in conformity with
the laws and regulations of their organization. (38a)
Art. 47. Upon the dissolution of corporations,
institutions and other entities for public interest or
purpose mentioned in No. 2 of Article 44, their
property and other assets shall be disposed of in
pursuance of law or the charter creating them. If
24
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nothing has been specified on this point, the
property and other assets shall be applied to similar
purposes for the benefit of the region, province, city
or municipality which during the existence of the
institution derived the principal benefits from the
same. (39a)
Title II. - CITIZENSHIP AND
DOMICILE
Art. 48.
Art. 49.
NOTE: Citizenship is properly discussed in
Political Law Reviewer.
Art. 50. For the exercise of civil rights and the
fulfillment of civil obligations, the domicile of natural
persons is the place of their habitual residence.
(40a)
Notes:
 A minor follows the domicile of his parents.
 Domicile of origin can only be lost and a
change of domicile occurs when the following
requisites are present—
a. An actual removal or an actual
change of domicile;
b. A bona-fide intention of abandoning
the former place of residence and
establishing a new one;
c. Acts which correspond with the
purpose.
Under the Family Code, the husband and the wife
shall fix the family domicile. In case of
disagreement, the court shall decide.
Requirements for the acquisition of a new
domicile:
1. Bodily presence in a new locality;
2. Intention to remain therein (animus manendi);
3. Intention to abandon the old residence
(animus non revertendi).
KINDS OF DOMICILE:
1. Domicile of origin—received by a person at
birth;
2. Domicile of choice—the place freely chosen
by a person sui juris;
3. Constructive domicile—assigned to a child
by law at the time of his birth.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 51. When the law creating or recognizing them,
or any other provision does not fix the domicile of
juridical persons, the same shall be understood to
be the place where their legal representation is
established or where they exercise their principal
functions. (41a)
Title III. – MARRIAGE
NOTE: MARRIAGE IS NOW GOVERNED BY
THE FAMILY CODE
EFFECTIVITY: August 3, 1988.
FAMILY CODE; RETROACTIVE APPLICATION;
VESTED RIGHTS (2000)
On April 15, 1980, Rene and Angelina were married to
each other without a marriage settlement. In 1985, they
acquired a parcel of land in Quezon City. On June 1,
1990, when Angelina was away in Baguio, Rene sold the
said lot to Marcelo. Is the sale void or voidable? (2%)
SUGGESTED ANSWER:
The sale is void. Since the sale was executed in 1990,
the Family Code is the law applicable. Under Article 124
of the FC, the sale of a conjugal property by a spouse
without the consent of the other is void.
ALTERNATIVE ANSWER:
The sale is voidable. The provisions of the Family Code
may apply retroactively but only if such application will not
impair vested rights. When Rene and Angelina got
married in 1980, the law that governed their property
relations was the New Civil Code. Under the NCC, as
interpreted by the Supreme Court in Heirs of Felipe v.
Aldon, 100 SCRA 628 and reiterated in Heirs of Ayuste v.
Malabonga, G.R No, 118784, 2 September 1999, the sale
executed by the husband without the consent of the wife
is voidable. The husband has already acquired a vested
right on the voidable nature of dispositions made without
the consent of the wife. Hence, Article 124 of the Family
Code which makes the sale void does not apply.
EXECUTIVE ORDER NO. 209
THE FAMILY CODE OF THE
PHILIPPINES
July 6, 1987
I, CORAZON C. AQUINO, President of the
Philippines, by virtue of the powers vested in me
by the Constitution, do hereby order and
25
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promulgate the Family Code of the Philippines, as (1) Legal capacity of the contracting parties
follows: who must be a male and a female; and

(2) Consent freely given in the presence of

TITLE I the solemnizing officer. (53a)

MARRIAGE NOTE: Read the following cases regarding legal

capacity:
Chapter 1. Requisites of Marriage
1) Republic vs. Cagandahan, GR No. 166676,
Sept. 12, 2008; and
Article 1. Marriage is a special contract of
2) Silverio vs. Republic, GR No. 174689, Oct.
permanent union between a man and a woman 22, 2007.
entered into in accordance with law for the
establishment of conjugal and family life. It is the OTHER REQUIREMENTS:
foundation of the family and an inviolable social
Either of Requires Effects of
institution whose nature, consequences, and
both parties absence
incidents are governed by law and not subject to
18 years old Parental
stipulation, except that marriage settlements may
and above consent and Marriage is
fix the property relations during the marriage
but below 21 marriage voidable
within the limits provided by this Code. (52a)
counseling
Family; Constitutional Mandates; Divorce (1991) No effect on the
A. How does the 1987 Constitution strengthen the family validity of the
as an Institution? marriage,
B. Do the Constitutional policy on the family and the 21 years old Parental however, this will
provision that marriage is the foundation of the family and and above advice and suspend the
shall be protected by the State bar Congress from but below 25 marriage issuance of the
enacting a law allowing divorce in the Philippines? counseling marriage license
SUGGESTED ANSWER:
for a period of 3
A. Sec, 2, Article II of the Constitution provides that: The
State recognizes the sanctity of family life and shall months from
protect and strengthen the family as a basic autonomous completion of
social institution. It shall equally protect the life of the publication of the
mother and the life of the unborn from conception. The application for
natural and primary right and duty of parents in the marriage license.
rearing of the youth for civic efficiency and the
development of moral character shall receive the support NOTE: If they get married without a marriage
of the Government.
license, marriage is void. If marriage license is
Section I, Article XV, further provides that: The State
recognizes the Filipino family as the foundation of the
issued in violation of the period is suspension, the
nation. Accordingly, it shall strengthen its solidarity and local civil registrar may be held criminally or civilly
actively promote its total development. liable.
(Note: The Committee recommends that a citation of
either one of the provisions be credited as a complete See: [for legal capacity]
answer).
SUGGESTED ANSWER:  Republic vs. Cagandahan, GR No. 166676,
B, No, the Constitutional policy, as well as the supporting Sept. 12, 2008.
provision, does not amount to a prohibition to Congress  Silverio vs. Republic, GR No. 174689, Oct.
to enact a law on divorce. The Constitution only meant to
help the marriage endure, to "strengthen its solidarity and
22, 2007.
actively promote its total development."
ALTERNATIVE ANSWER: Marriage; Void Marriages; Status of
B. Yes. Congress is barred from enacting a law allowing Children (2009) No. III. In December 2000,
divorce, since Section 2 of Article XV provides: "Sec. 2. Michael and Anna, after obtaining a valid
Marriage, as an inviolable social institution, is the marriage license, went to the Office of the
foundation of the family and shall be protected by the Mayor of Urbano, Bulacan, to get married.
State." Since marriage is "Inviolable", it cannot be
The Mayor was not there, but the Mayor’s
dissolved by an absolute divorce
secretary asked Michael and Anna and
their witnesses to fill up and sign the
Art. 2. No marriage shall be valid, unless these required marriage contract forms. The
essential requisites are present: secretary then told them to wait, and went
out to look for the Mayor who was attending
a wedding in a neighboring municipality.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 26
____________________________________________________________________________________________________
When the secretary caught up with the
Mayor at the wedding reception, she
showed him the marriage contract forms
and told him that the couple and their
witnesses were waiting in his office. The
Mayor forthwith signed all the copies of the
marriage contract, gave them to the
secretary who returned to the Mayor’s
office. She then gave copies of the marriage
contract to the parties, and told Michael
and Anna that they were already married.
Thereafter, the couple lived together as
husband and wife, and had three sons.
(A). Is the marriage of Michael and Anna
valid, voidable, or void? Explain your
answer. (3%) SUGGESTED ANSWER :
The marriage is void because the
formal requisite of marriage ceremony
was absent ( Art.3, F.C. 209, Family
Code). ALTERNATIVE ANSWER: The
marriage is void because an essential
requisite was absent: consent of the
parties freely given in the presence of
the solemnizing officer (Art .2, FC). (B).
What is the status of the three children of
Michael and Anna? Explain your answer.
(2%)
SUGGESTED ANSWER: The children are
illegitimate, having been born outside a
valid marriage.
Art. 3. The formal requisites of marriage are:
(1) Authority of the solemnizing officer;
(2) A valid marriage license except in the
cases provided for in Chapter 2 of this Title;
and
(3) A marriage ceremony which takes place
with the appearance of the contracting
parties before the solemnizing officer and
their personal declaration that they take
each other as husband and wife in the
presence of not less than two witnesses of
legal age. (53a, 55a)
Art. 4. The absence of any of the essential or
formal requisites shall render the marriage void
ab initio, except as stated in Article 35 (2).
A defect in any of the essential requisites shall
render the marriage voidable as provided in
article 45.
An irregularity in the formal requisites shall not
affect the validity of the marriage but the party or
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
parties responsible for the irregularity shall be
civilly, criminally and administratively liable. (n)
2011 Bar Exam Question
(55) QR and TS who had a marriage license
requested a newly appointed Judge in Manila
to marry them on the beach of Boracay. Since
the Judge maintained Boracay as his
residence, he agreed. The sponsors were all
public officials. What is the status of the
marriage. (A) Valid, since the improper
venue is merely an irregularity; all the
elements of a valid marriage are present. (B)
Void, because the couple did not get local
permit for a beach wedding. (C) Voidable,
because the Judge acted beyond his territorial
jurisdiction and is administratively liable for
the same. (D) Void, because the Judge did not
solemnize the marriage within the premises of
his court.
Marriage; Requisites (1995)
Isidro and Irma, Filipinos, both 18 years of age, were
passengers of Flight No. 317 of Oriental Airlines. The
plane they boarded was of Philippine registry. While en
route from Manila to Greece some passengers hijacked
the plane, held the chief pilot hostage at the cockpit and
ordered him to fly instead to Libya. During the hijacking
Isidro suffered a heart attack and was on the verge of
death. Since Irma was already eight months pregnant by
Isidro, she pleaded to the hijackers to allow the assistant
pilot to solemnize her marriage with Isidro. Soon after the
marriage, Isidro expired. As the plane landed in Libya
Irma gave birth. However, the baby died a few minutes
after complete delivery. Back in the Philippines Irma
immediately filed a claim for inheritance. The parents of
Isidro opposed her claim contending that the marriage
between her and Isidro was void ab initio on the following
grounds: (a) they had not given their consent to the
marriage of their son; (b) there was no marriage license;
(c) the solemnizing officer had no authority to perform the
marriage; and, (d) the solemnizing officer did not file an
affidavit of marriage with the proper civil registrar.
1. Resolve each of the contentions ([a] to [d]) raised by
the parents of Isidro. Discuss fully.
SUGGESTED ANSWER:
1. (a) The fact that the parents of Isidro and of Irma did
not give their consent to the marriage did not make the
marriage void ab initio. The marriage is merely voidable
under Art 45 of the FC.
(b) Absence of marriage license did not make the
marriage void ab initio. Since the marriage was
solemnized in articulo mortis, it was exempt from the
license requirement under Art. 31 of the FC.
(c) On the assumption that the assistant pilot was acting
for and in behalf of the airplane chief who was under
disability, and by reason of the extraordinary and
exceptional circumstances of the case [ie. hostage
27
____________________________________________________________________________________________________
situation), the marriage was solemnized by an authorized
officer under Art. 7 (3) and Art. 31. of the FC.
(d) Failure of the solemnizing officer to file the affidavit of
marriage did not affect the validity of the marriage. It is
merely an irregularity which may subject the solemnizing
officer to sanctions.
ALTERNATIVE ANSWER:
Considering that the solemnizing officer has no authority
to perform the marriage because under Art. 7 the law
authorizes only the airplane chief, the marriage is void,
hence, a, c, and d are immaterial.
2012 Bar Exam Question
25. A marriage is void if: a) solemnized with a
marriage license issued without complying
with the required 10-day posting. b)
solemnized by a minister whom the parties
believe to have the authority. c) between
parties both 23 years of age but without
parental advice. d) none of the above
Marriage; Requisites (1999)
What is the status of the following marriages and why?
(a) A marriage between two 19-year olds without
parental consent, (2%)
(b) A marriage between two 21-year olds without
parental advice. (2%)
(c) A marriage between two Filipino first cousins in
Spain where such marriage is valid. (2%)
(d) A marriage between two Filipinos in Hongkong
before a notary public. (2%)
(e) A marriage solemnized by a town mayor three
towns away from his jurisdiction, (2%)
SUGGESTED ANSWER:
(a) The marriage is voidable. The consent of the parties
to the marriage was defective. Being below 21 years old,
the consent of the parties is not full without the consent of
their parents. The consent of the parents of the parties to
the marriage is indispensable for its validity.
SUGGESTED ANSWER:
(b) Between 21-year olds, the marriage is valid despite
the absence of parental advice, because such absence
is merely an irregularity affecting a formal requisite i.e.,
the marriage license and does not affect the validity of the
marriage itself. This is without prejudice to the civil,
criminal, or administrative liability of the party responsible
therefor.
SUGGESTED ANSWER:
(c) By reason of public policy, the marriage between
Filipino first cousins is void [Art. 38, par. (1), Family
Code], and the fact that it is considered a valid marriage
in a foreign country in this case, Spain— does not
validate it, being an exception to the general rule in Art.
96 of said Code which accords validity to all marriage
solemnized outside the Philippine x x x and valid there as
such.
ALTERNATIVE ANSWER
The marriage it void. Under Article 96 of the Family Code,
a marriage valid where celebrated is valid in the
Philippines except those marriages enumerated in said
Article which marriages will remain void even though valid
where solemnized. The marriage between first cousins is
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
one of those marriages enumerated therein, hence, it is
void even though valid in Spain where it was celebrated.
By reason of Art. 15 in relation to Article 38 of the Civil
Code, which applies to Filipinos wherever they are, the
marriage is void.
SUGGESTED ANSWER:
(d) It depends. If the marriage before the notary public is
valid under Hongkong Law, the marriage is valid in the
Philippines. Otherwise, the marriage that is invalid in
Hongkong will be invalid in the Philippines.
ALTERNATIVE ANSWER:
If the two Filipinos believed in good faith that the Notary
Public is authorized to solemnize marriage, then the
marriage is valid.
SUGGESTED ANSWER:
(e) Under the Local Government Code, a town mayor
may validly solemnize a marriage but said law is silent as
to the territorial limits for the exercise by a town mayor of
such authority. However, by analogy, with the authority
of members of the Judiciary to solemnize a marriage, it
would seem that the mayor did not have the requisite
authority to solemnize a marriage outside of his territorial
jurisdiction. Hence, the marriage is void, unless it was
contracted with either or both parties believing in good
faith that the mayor had the legal authority to solemnize
this particular marriage (Art 35, par 2 Family Code).
ALTERNATIVE ANSWER:
The marriage is valid. Under the Local Government
Code, the authority of a mayor to solemnize marriages is
not restricted within his municipality implying that he has
the authority even outside the territory thereof. Hence, the
marriage he solemnized outside his municipality is valid.
And even assuming that his authority is restricted within
his municipality, such marriage will nevertheless, be valid
because solemnizing the marriage outside said
municipality is a mere irregularity applying by analogy the
case of Navarro v Domagtoy, 259 Scra 129. In this case,
the Supreme Court held that the celebration by a judge of
a marriage outside the jurisdiction of his court is a mere
irregularity that did not affect the validity of the marriage
notwithstanding Article 7 of the Family Code which
provides that an incumbent member of the judiciary is
authorized to solemnize marriages only within the court’s
jurisdiction.
Marriage; Requisites; Marriage License (1996)
On Valentine's Day 1996, Ellas and Fely, both single and
25 years of age, went to the city hall where they sought
out a fixer to help them obtain a quickie marriage. For a
fee, the fixer produced an ante-dated marriage license for
them, Issued by the Civil Registrar of a small remote
municipality. He then brought them to a licensed minister
in a restaurant behind the city hall, and the latter
solemnized their marriage right there and then. 1) Is
their marriage valid, void or voidable? Explain.
SUGGESTED ANSWER:
The marriage is valid. The irregularity in the issuance of a
valid license does not adversely affect the validity of the
marriage. The marriage license is valid because it was in
fact issued by a Civil Registrar (Arts. 3 and 4. FC).
ALTERNATIVE ANSWER:
It depends. If both or one of the parties was a member of
the religious sect of the solemnizing officer, the marriage
is valid. If none of the parties is a member of the sect and
both of them were aware of the fact, the marriage is void.
They cannot claim good faith in believing that the
28
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solemnizing officer was authorized because the scope of
the authority of the solemnizing officer is a matter of law.
If, however, one of the parties believed in good faith that
the other was a member of the sect, then the marriage is
valid under Article 35 (2), FC. In that case, the party in
good faith
This is different from the case of Nināl V. Bayadog, (328
is acting under a mistake of fact, not a mistake of law,
2) Would your answer be the same if it should turn out
that the marriage license was spurious? Explain.
SUGGESTED ANSWER:
No, the answer would not be the same. The marriage
would be void because of the absence of a formal
requisite. In such a case, there was actually no valid
marriage license.
Marriage; Requisites; Marriage License (2002)
On May 1, 1978 Facundo married Petra, by whom he had
a son Sotero. Petra died on July 1, 1996, while Facundo
died on January 1, 2002. Before his demise, Facundo
had married, on July 1, 2002, Quercia. Having lived
together as husband and wife since July 1, 1990,
Facundo and Quercia did not secure a marriage license
but executed the requisite affidavit for the purpose. To
ensure that his inheritance rights are not adversely
affected by his father second marriage, Sotero now
brings a suit to seek a declaration of the nullity of the
marriage of Facundo and Quercia, grounded on the
absence of a valid marriage license. Quercia contends
that there was no need for a marriage license in view for
her having lived continuously with Facundo for five years
before their marriage and that has Sotero has no legal
personality to seek a declaration of nullity of the marriage
since Facundo is now deceased.
A. Is the marriage of Facundo and Quercia valid, despite
the absence of a marriage license? Explain. (2%)
SUGGESTED ANSWER:
A. The marriage with Quercia is void. The exemption from
the requirement of a marriage license under Art, 34,
Family Code, requires that the man and woman must
have lived together as husband and wife for at least five
years and without any legal impediment to marry each
other during those five years. The cohabitation of
Facundo and Quercia for six years from 1990 to July 1,
1996 when Petra died was one with a legal impediment
hence, not in compliance with the requirement of law. On
other hand, the cohabitation thereafter until the marriage
on July 1, 2000, although free from legal impediment, did
not meet the 5-year cohabitation requirement.
ALTERNATIVE ANSWER:
The marriage of Facundo and Quercia is VALID. The
second marriage was solemnized on July 1, 2000, when
the Family code was already affective. The family code
took effect on August 3, 1988. Under the Family Code, no
marriage license is required if the parties have been
cohabiting for the period of five years and there is no
legal impediment. There must no legal impediment ONLY
AT THE TIME OF THE SOLEMNIZATION OF THE
MARRIAGE, and not the whole five years period. This is
clearly the intent of the code framers (see Minutes of the
150th joint Civil Code of the Family Law Committees held
on August 9, 1986). Also, in Manzano V. Sanchez, AM
NO. MT –00-129, March 8, 2001, the Supreme Court said
that, as one of the requisites for the exception to apply,
there must be no legal impediment at the time of the
marriage. The Supreme Court did not say that the legal
impediment must exist all throughout the five-year period.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
SCRA 122 [2000]). In the said case, the situation
occurred during the Relations of the new Civil Code
where Article 76 thereof clearly provides that during the
five-year cohabitation, the parties must be unmarried.
This is not so anymore in the Family Code. The Change
in the Family Code is significant. If the second marriage
occurred before the effectivity of the Family Code, the
answer would that be that the marriage is void.
B. Does Sotero have the personality to seek the
declaration of nullity of the marriage, especially now that
Facundo is already deceased? Explain. (3%)
SUGGESTED ANSWER:
B. A void marriage may be questioned by any interested
party in any proceeding where the resolution of the issue
is material. Being a compulsory heir, Soterro has the
personality to question the validity of the marriage of
Facundo and Quercia. Otherwise, his participation in the
estate on Facundo would be affected. (Ninãl V.
Bayadog, 328 SCRA 122 [2000] ).
Marriage; Requisites (2008) No. III.
Roderick and Faye were high school
sweethearts. When Roderick was 18 and
Faye, 16 years old, they started to live
together as husband and wife without the
benefit of marriage. When Faye reached 18
years of age, her parents forcibly took her
back and arranged for her marriage to
Brad. Although Faye lived with Brad after
the marriage, Roderick continued to
regularly visit Faye while Brad was away at
work. During their marriage, Faye gave
birth to a baby girl, Laica. When Faye was
25 years old, Brad discovered her continued
liason with Roderick and in one of their
heated arguments, Faye shot Brad to death.
She lost no time in marrying her true love
Roderick, without a marriage license,
claiming that they have been continuously
cohabiting for more than 5 years. (A). Was
the marriage of Roderick and Faye valid?
(2%) SUGGESTED ANSWER:
No. The marriage of Roderick and Faye is
not valid. Art. 4, FC provides that the
absence of any of the essential or formal
requisites renders the marriage void ab
initio. However, no license shall be
necessary for the marriage of a man and
a woman who have lived together as
husband and wife for at least 5 years and
without any legal impediment to marry
each other. In Republic v. Dayot, G.R.
No. 175581, 28 March 2008, reiterating
the doctrine in Niñal v. Bayadog, G.R.
No. 133778, 14 March 2000, this five-
year period is characterized by
exclusivity and continuity. In the
present case, the marriage of Roderick
and Faye cannot be considered as a
29
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marriage of exceptional character,
because there were 2 legal impediments
during their cohabitation: minority on
the part of Faye, during the first two
years of cohabitation; and, lack of legal
capacity, since Faye married Brad at the
age of 18. The absence of a marriage
license made the marriage of Faye and
Roderick void ab initio.
Marriage; Void Marriages: Absence of legal capacity
(2004)
A. BONI and ANNE met while working overseas. They
became sweethearts and got engaged to be married on
New Year’s Eve aboard a cruise ship in the Caribbean.
They took the proper license to marry in New York City,
where there is a Filipino consulate. But as planned the
wedding ceremony was officiated by the captain of the
Norwegian-registered vessel in a private suite among
selected friends.
Back in Manila, Anne discovered that Boni had been
married in Bacolod City 5 years earlier but divorced in
Oslo only last year. His first wife was also a Filipina but
now based in Sweden. Boni himself is a resident of
Norway where he and Anne plan to live permanently.
Anne retains your services to advise her on whether her
marriage to Boni is valid under Philippine law? Is there
anything else she should do under the circumstances?
(5%)
SUGGESTED ANSWER:
If Boni is still a Filipino citizen, his legal capacity is
governed by Philippine Law (Art. 15 Civil Code). Under
prior existing marriage which was not dissolved by the
divorce decreed in Oslo. Divorce obtained abroad by a
Filipino is not recognized.
If Boni was no longer a Filipino citizen, the divorce is
valid. Hence, his marriage to Anne is valid if celebrated in
accordance with the law of the place where it was
celebrated. Since the marriage was celebrated aboard a
vessel of Norwegian registry, Norwegian law applies. If
the Ship Captain has authority to solemnize the marriage
aboard his ship, the marriage is valid and shall be
recognized in the Philippines.
As to the second question, if Boni is still a Filipino,
Anne can file an action for declaration of nullity of her
marriage to him.
Art. 5. Any male or female of the age of
eighteen years or upwards not under any of the
impediments mentioned in Articles 37 and 38,
may contract marriage. (54a)
Art. 6. No prescribed form or religious rite for the
solemnization of the marriage is required. It shall
be necessary, however, for the contracting
parties to appear personally before the
solemnizing officer and declare in the presence
of not less than two witnesses of legal age that
they take each other as husband and wife. This
declaration shall be contained in the marriage
certificate which shall be signed by the
contracting parties and their witnesses and
attested by the solemnizing officer.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
In case of a marriage in articulo mortis, when the
party at the point of death is unable to sign the
marriage certificate, it shall be sufficient for one
of the witnesses to the marriage to write the
name of said party, which fact shall be attested
by the solemnizing officer. (55a)
Art. 7. Marriage may be solemnized by:
(1) Any incumbent member of the
judiciary within the court's jurisdiction;
(2) Any priest, rabbi, imam, or minister of
any church or religious sect duly authorized
by his church or religious sect and
registered with the civil registrar general,
acting within the limits of the written
authority granted by his church or religious
sect and provided that at least one of the
contracting parties belongs to the
solemnizing officer's church or religious
sect;
(3) Any ship captain or airplane chief only
in the case mentioned in Article 31;
(4) Any military commander of a unit to
which a chaplain is assigned, in the
absence of the latter, during a military
operation, likewise only in the cases
mentioned in Article 32;
(5) Any consul-general, consul or vice-
consul in the case provided in Article 10.
(56a)
NOTE: The mayor is authorized to
solemnize marriage under RA 7160.
Marriage; Requisites; Solemnizing Officers (1994)
1} The complete publication of the Family Code was
made on August 4, 1987. On September 4, 1987, Junior
Cruz and Gemma Reyes were married before a municipal
mayor. Was the marriage valid? 2) Suppose the couple
got married on September 1, 1994 at the Manila Hotel
before the Philippine Consul General to Hongkong, who
was on vacation in Manila. The couple executed an
affidavit consenting to the celebration of the marriage at
the Manila Hotel. Is the marriage valid?
SUGGESTED ANSWER:
1) a) Yes, the marriage is valid. The Family Code took
effect on August 3, 1988. At the time of the marriage on
September 4, 1987, municipal mayors were empowered
to solemnize marriage under the Civil Code of 1950.
2) a) The marriage is not valid. Consuls and vice-
consuls are empowered to solemnize marriages between
Philippine citizens abroad in the consular office of the
30
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foreign country to which they were assigned and have no
power to solemnize marriage on Philippine soil.
b) A Philippine consul is authorized by law to solemnize
marriages abroad between Filipino citizens. He has no
authority to solemnize a marriage in the Philippines.
Consequently, the marriage in question is void, unless
either or both of the contracting parties believed in good
faith that the consul general had authority to solemnize
their marriage in which case the marriage is valid.
Marriage; Requisites; Void Marriage (1993)
A and B, both 18 years old, were sweethearts studying in
Manila. On August 3, 1988, while in first year college,
they eloped. They stayed in the house of a mutual friend
in town X, where they were able to obtain a marriage
license. On August 30, 1988, their marriage was
solemnized by the town mayor of X in his office.
Thereafter, they returned to Manila and continued to live
separately in their respective boarding houses,
concealing from their parents, who were living in the
province what they had done. In 1992, after graduation
from college, A and B decided to break their relation and
Philippine Law, his marriage to Anne is void because of a
parted ways. Both went home to their respective towns to
live and work. 1) Was the marriage of A and B
solemnized on August 30, 1988 by the town mayor of X in
his office a valid marriage? Explain your answer. 2) Can
either or both of them contract marriage with another
person without committing bigamy? Explain your answer.
SUGGESTED ANSWER:
1) The marriage of A and B is void because the
solemnizing officer had no legal authority to solemnize
the marriage. But if either or both parties believed in good
faith that the solemnizing officer had the legal authority to
do so, the marriage is voidable because the marriage
between the parties, both below 21 years of age, was
solemnized without the consent of the parents. (Art. 35,
par. (2) and Art. 45 par. (1), Family Code)
2) Either or both of the parties cannot contract marriage
in the Philippines with another person without committing
bigamy, unless there is compliance with the requirements
of Article 52 Family Code, namely: there must be a
judgment of annulment or absolute nullity of the marriage,
partition and distribution of the properties of the spouses
and the delivery of their children's presumptive legitimes,
which shall be recorded in the appropriate Civil Registry
and Registry of Property, otherwise the same shall not
affect third persons and the subsequent marriage shall be
null and void. (Arts. 52 and 53. Family Code)
ALTERNATIVE ANSWER:
2) Yes, they can. The subsequent marriage contracted by
one of the parties will not give rise to bigamy even in the
absence of a court declaration of nullity of the first
marriage. The subsistence of a prior valid marriage is an
indispensable element of the crime of bigamy. The prior
court declaration of nullity of the first marriage is required
by the Family Code only for the purpose of the validity of
the subsequent marriage, not as an element of the crime
of bigamy.
Marriage; Void Marriages (2006)
Gigi and Ric, Catholics, got married when they were 18
years old. Their marriage was solemnized on August 2,
1989 by Ric's uncle, a Baptist Minister, in Calamba,
Laguna. He overlooked the fact that his license to
solemnize marriage expired the month before and that
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
the parties do not belong to his congregation. After 5
years of married life and blessed with 2 children, the
spouses developed irreconcilable differences, so they
parted ways. While separated, Ric fell in love with Juliet,
a 16 year-old sophomore in a local college and a
Seventh-Day Adventist. They decided to get married with
the consent of Juliet's parents. She presented to him a
birth certificate showing she is 18 years old. Ric never
doubted her age much less the authenticity of her birth
certificate. They got married in a Catholic church in
Manila. A year after, Juliet gave birth to twins, Aissa and
Aretha.
(1) What is the status of the marriage between Gigi and
Ric — valid, voidable or void? Explain. (2.5%)
SUGGESTED ANSWER: Even if the Minister's license
expired, the marriage is valid if either or both Gigi and Ric
believed in good faith that he had the legal authority to
solemnize marriage. While the authority of the
solemnizing officer is a formal requisite of marriage, and
at least one of the parties must belong to the solemnizing
officer's church, the law provides that the good faith of the
parties cures the defect in the lack of authority of the
solemnizing officer
(Art. 35 par. 2, Family Code; Sempio-Diy, p. 34; Rabuya,
The Law on Persons and Family Relations, p. 208).
The absence of parental consent despite their having
married at the age of 18 is deemed cured by their
continued cohabitation beyond the age of 21. At this
point, their marriage is valid (See Art. 45, Family Code).
(2) What is the status of the marriage between Ric and
Juliet — valid, voidable or void? (2.5%)
SUGGESTED ANSWER: The marriage between Juliet
and Ric is void. First of all, the marriage is a bigamous
marriage not falling under Article 41 [Art. 35(4)Family
Code], A subsisting marriage constitutes a legal
impediment to re¬marriage. Secondly, Juliet is below
eighteen years of age. The marriage is void even if
consented to by her parents
[Art. 35(1), Family Code]. The fact that Ric was not aware
Under Article 213 of the Family Code, no child under 7
of her real age is immaterial.
(3) Suppose Ric himself procured the falsified birth
certificate to persuade Juliet to marry him despite her
minority and assured her that everything is in order. He
did not divulge to her his prior marriage with Gigi. What
action, if any, can Juliet take against him? Explain. (2.5%)
SUGGESTED ANSWER: Juliet can file an action for the
declaration of nullity of the marriage on the ground that
he willfully caused loss or injury to her in a manner that is
contrary to morals, good customs and public policy [Art.
21, New Civil Code]. She may also bring criminal actions
for seduction, falsification, illegal marriage and bigamy
against Ric.
(4) If you were the counsel for Gigi, what action/s will you
take to enforce and protect her interests? Explain. (2.5%)
SUGGESTED ANSWER: I would file an action to declare
the marriage between Juliet and Ric null and void ab initio
and for Ric's share in the co-ownership of that marriage
to be forfeited in favor and considered part of the
absolute community in the marriage between Gigi and
Ric [Arts. 148 & 147, Family Code]. I would also file an
action for damages against Ric on the grounds that his
acts constitute an abuse of right and they are contrary to
law and morals, causing damages to Gigi (See Arts 19,
20, 21, New Civil Code).
31
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interpreted as an irregularity thereby making
all the other answers wrong).
Article. 8. The marriage shall be solemnized
publicly in the chambers of the judge or in open
court, in the church, chapel or temple, or in the
office the consul-general, consul or vice-consul,
as the case may be, and not elsewhere, except
in cases of marriages contracted on the point of
death or in remote places in accordance with
Article 29 of this Code, or where both of the
parties request the solemnizing officer in writing
in which case the marriage may be solemnized
at a house or place designated by them in a
sworn statement to that effect. (57a)
Art. 9. A marriage license shall be issued by the
local civil registrar of the city or municipality
where either contracting party habitually resides,
except in marriages where no license is required
in accordance with Chapter 2 of this Title. (58a)
Art. 10. Marriages between Filipino citizens
abroad may be solemnized by a consul-general,
consul or vice-consul of the Republic of the
Philippines. The issuance of the marriage
license and the duties of the local civil registrar
and of the solemnizing officer with regard to the
celebration of marriage shall be performed by
said consular official. (75a)
2012 Bar Exam Question
22. Agay, a Filipino citizen and Topacio, an
Australian citizen, got married in the consular
office of the Philippines in Australia. According
to the laws of Australia, a marriage solemnized
by a consular official is valid, provided that
such marriage is celebrated in accordance
with the laws of such consular official. Under
Philippine law, what is the status of the
marriage of Agay and Topacio? Choose the
best answer. a) Void, because the consular
official only has authority to solemnize
marriages between Filipinos. b) Valid,
because according to the laws of Australia,
such consular official has authority to
celebrate the marriage. c) Voidable, because
there is an irregularity in the authority of the
consular official to solemnize marriages. d)
Valid, because such marriage is recognized as
valid in the place where it was celebrated.
(Note: The issues in the problem is whether or
not the fact that one of the parties to the
marriage was an alien constituted absence of
authority or mere irregularity of authority. The
problem only give the choice, letter (a), in case
it is interpreted as absence of authority. The
problem does not give a choice in case it is
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 11. Where a marriage license is required,
each of the contracting parties shall file
separately a sworn application for such license
with the proper local civil registrar which shall
specify the following:
(1) Full name of the contracting party;
(2) Place of birth;
(3) Age and date of birth;
(4) Civil status;
(5) If previously married, how, when and
where the previous marriage was dissolved
or annulled;
(6) Present residence and citizenship;
(7) Degree of relationship of the contracting
parties;
(8) Full name, residence and citizenship of
the father;
(9) Full name, residence and citizenship of
the mother; and
(10) Full name, residence and citizenship of
the guardian or person having charge, in
case the contracting party has neither
father nor mother and is under the age of
twenty-one years.
The applicants, their parents or guardians shall
not be required to exhibit their residence
certificates in any formality in connection with
the securing of the marriage license. (59a)
Art. 12. The local civil registrar, upon receiving
such application, shall require the presentation
of the original birth certificates or, in default
thereof, the baptismal certificates of the
contracting parties or copies of such documents
duly attested by the persons having custody of
the originals. These certificates or certified
copies of the documents by this Article need not
be sworn to and shall be exempt from the
documentary stamp tax. The signature and
official title of the person issuing the certificate
shall be sufficient proof of its authenticity.
32
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If either of the contracting parties is unable to
produce his birth or baptismal certificate or a
certified copy of either because of the
destruction or loss of the original or if it is shown
by an affidavit of such party or of any other
person that such birth or baptismal certificate
has not yet been received though the same has
been required of the person having custody
thereof at least fifteen days prior to the date of
the application, such party may furnish in lieu
thereof his current residence certificate or an
instrument drawn up and sworn to before the
local civil registrar concerned or any public
official authorized to administer oaths. Such
instrument shall contain the sworn declaration of
two witnesses of lawful age, setting forth the full
name, residence and citizenship of such
contracting party and of his or her parents, if
known, and the place and date of birth of such
party. The nearest of kin of the contracting
parties shall be preferred as witnesses, or, in
their default, persons of good reputation in the
province or the locality.
The presentation of birth or baptismal certificate
shall not be required if the parents of the
contracting parties appear personally before the
local civil registrar concerned and swear to the
correctness of the lawful age of said parties, as
stated in the application, or when the local civil
registrar shall, by merely looking at the
applicants upon their personally appearing
before him, be convinced that either or both of
them have the required age. (60a)
Art. 13. In case either of the contracting parties
has been previously married, the applicant shall
be required to furnish, instead of the birth or
baptismal certificate required in the last
preceding article, the death certificate of the
deceased spouse or the judicial decree of the
absolute divorce, or the judicial decree of
annulment or declaration of nullity of his or her
previous marriage.
In case the death certificate cannot be secured,
the party shall make an affidavit setting forth this
circumstance and his or her actual civil status
and the name and date of death of the deceased
spouse. (61a)
Art. 14. In case either or both of the contracting
parties, not having been emancipated by a
previous marriage, are between the ages of
eighteen and twenty-one, they shall, in addition
to the requirements of the preceding articles,
exhibit to the local civil registrar, the consent to
their marriage of their father, mother, surviving
parent or guardian, or persons having legal
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
charge of them, in the order mentioned. Such
consent shall be manifested in writing by the
interested party, who personally appears before
the proper local civil registrar, or in the form of
an affidavit made in the presence of two
witnesses and attested before any official
authorized by law to administer oaths. The
personal manifestation shall be recorded in both
applications for marriage license, and the
affidavit, if one is executed instead, shall be
attached to said applications. (61a)
Art. 15. Any contracting party between the age
of twenty-one and twenty-five shall be obliged to
ask their parents or guardian for advice upon the
intended marriage. If they do not obtain such
advice, or if it be unfavorable, the marriage
license shall not be issued till after three months
following the completion of the publication of the
application therefor. A sworn statement by the
contracting parties to the effect that such advice
has been sought, together with the written
advice given, if any, shall be attached to the
application for marriage license. Should the
parents or guardian refuse to give any advice,
this fact shall be stated in the sworn statement.
(62a)
Art. 16. In the cases where parental consent or
parental advice is needed, the party or parties
concerned shall, in addition to the requirements
of the preceding articles, attach a certificate
issued by a priest, imam or minister authorized
to solemnize marriage under Article 7 of this
Code or a marriage counselor duly accredited by
the proper government agency to the effect that
the contracting parties have undergone marriage
counseling. Failure to attach said certificates of
marriage counseling shall suspend the issuance
of the marriage license for a period of three
months from the completion of the publication of
the application. Issuance of the marriage license
within the prohibited period shall subject the
issuing officer to administrative sanctions but
shall not affect the validity of the marriage.
Should only one of the contracting parties need
parental consent or parental advice, the other
party must be present at the counseling referred
to in the preceding paragraph. (n)
Art. 17. The local civil registrar shall prepare a
notice which shall contain the full names and
residences of the applicants for a marriage
license and other data given in the applications.
The notice shall be posted for ten consecutive
days on a bulletin board outside the office of the
local civil registrar located in a conspicuous place
within the building and accessible to the general
33
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public. This notice shall request all persons
having knowledge of any impediment to the
marriage to advise the local civil registrar thereof.
The marriage license shall be issued after the
completion of the period of publication. (63a)
Art. 18. In case of any impediment known to the
local civil registrar or brought to his attention, he
shall note down the particulars thereof and his
findings thereon in the application for marriage
license, but shall nonetheless issue said license
after the completion of the period of publication,
unless ordered otherwise by a competent court at
his own instance or that of any interest party. No
filing fee shall be charged for the petition nor a
corresponding bond required for the issuances of
the order. (64a)
Art. 19. The local civil registrar shall require the
payment of the fees prescribed by law or
regulations before the issuance of the marriage
license. No other sum shall be collected in the
nature of a fee or tax of any kind for the issuance
of said license. It shall, however, be issued free of
charge to indigent parties, that is those who have
no visible means of income or whose income is
insufficient for their subsistence a fact established
by their affidavit, or by their oath before the local
civil registrar. (65a)
Art. 20. The license shall be valid in any part of
the Philippines for a period of one hundred
twenty days from the date of issue, and shall be
deemed automatically canceled at the expiration
of the said period if the contracting parties have
not made use of it. The expiry date shall be
stamped in bold characters on the face of every
license issued. (65a)
Art. 21. When either or both of the contracting
parties are citizens of a foreign country, it shall be
necessary for them before a marriage license can
be obtained, to submit a certificate of legal
capacity to contract marriage, issued by their
respective diplomatic or consular officials.
Stateless persons or refugees from other
countries shall, in lieu of the certificate of legal
capacity herein required, submit an affidavit
stating the circumstances showing such capacity
to contract marriage. (66a)
Art. 22. The marriage certificate, in which the
parties shall declare that they take each other as
husband and wife, shall also state:
(1) The full name, sex and age of each
contracting party;
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(2) Their citizenship, religion and habitual
residence;
(3) The date and precise time of the
celebration of the marriage;
(4) That the proper marriage license has
been issued according to law, except in
marriage provided for in Chapter 2 of this
Title;
(5) That either or both of the contracting
parties have secured the parental consent
in appropriate cases;
(6) That either or both of the contracting
parties have complied with the legal
requirement regarding parental advice in
appropriate cases; and
(7) That the parties have entered into
marriage settlement, if any, attaching a
copy thereof. (67a)
Art. 23. It shall be the duty of the person
solemnizing the marriage to furnish either of the
contracting parties the original of the marriage
certificate referred to in Article 6 and to send the
duplicate and triplicate copies of the certificate not
later than fifteen days after the marriage, to the
local civil registrar of the place where the
marriage was solemnized. Proper receipts shall
be issued by the local civil registrar to the
solemnizing officer transmitting copies of the
marriage certificate. The solemnizing officer shall
retain in his file the quadruplicate copy of the
marriage certificate, the copy of the marriage
certificate, the original of the marriage license
and, in proper cases, the affidavit of the
contracting party regarding the solemnization of
the marriage in place other than those mentioned
in Article 8. (68a)
Art. 24. It shall be the duty of the local civil
registrar to prepare the documents required by
this Title, and to administer oaths to all interested
parties without any charge in both cases. The
documents and affidavits filed in connection with
applications for marriage licenses shall be exempt
from documentary stamp tax. (n)
Art. 25. The local civil registrar concerned shall
enter all applications for marriage licenses filed
with him in a registry book strictly in the order in
which the same are received. He shall record in
said book the names of the applicants, the date
on which the marriage license was issued, and
such other data as may be necessary. (n)
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Art. 26. All marriages solemnized outside the
Philippines, in accordance with the laws in force
in the country where they were solemnized, and
valid there as such, shall also be valid in this
country, except those prohibited under Articles 35
(1), (4), (5) and (6), 36, 37 and 38. (17a)
Where a marriage between a Filipino citizen and
a foreigner is validly celebrated and a divorce is
thereafter validly obtained abroad by the alien
spouse capacitating him or her to remarry, the
Filipino spouse shall have capacity to remarry
under Philippine law. (As amended by Executive
Order 227)
GR: Marriages solemnized abroad in accordance
with the law of the foreign country shall be valid in
the Philippines (lex loci celebracionis).
Exceptions:
1. Where either or both parties are below 18
years old (art. 35[1]);
2. Bigamous and polygamous marriage not
falling under art. 41 (art. 35[4]);
3. Mistake in the identity as to the other party
(art. 35[5]);
4. Marriages that are void under art 53—
contracted following the annulment of
declaration of nullity but before the partition
and delivery of presumptive legitimes (art.
35[6]);
5. Psychological incapacity (art. 36);
6. Incestuous marriages (art. 37);
7. Marriage void as against public policy (art.
38).
DIVORCE BY FOREIGNER-SPOUSE (art. 26, par.
2):
Requisites:
1. There is a valid marriage that had been
celebrated between a Filipino citizen and a
foreigner;
2. A valid divorce is obtained abroad by the
alien spouse capacitating him/her to
remarry.
NOTE: The traditional rule applies when the
parties at the time of celebration are a Filipino
citizen and an alien.
The intent of par. 2 of art. 26 is to avoid the
absurd situation where the Filipino spouse
remains married to the alien spouse who, after
obtaining divorce, is no longer married to the
Filipino spouse. Thus, taking into account the
legislative intent, par. 2 , art. 26 should be
interpreted to include cases involving parties who,
at the time of the celebration of the marriage,
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
where Filipino citizens but, later on, one of them
becomes naturalized as a foreign citizen and
obtains a divorce decree. The Filipino spouse
should likewise be allowed to remarry as if the
other party was a foreigner at the time of the
solemnization of the marriage. To rule otherwise
would be to sanction absurdity and injustice
(Republic vs. Obrecido, 472 SCRA 114, [2005]).
For the 2nd par. of art. 26 to apply, a spouse who
obtained the divorce must not be a Filipino at the
time of the divorce. If the obtaining spouse is still
a Filipino at the time of the divorce, then the
divorce is not recognized (Republic vs. Iyoy, GR
No. 15277, Sept. 21, 2005).
2012 Bar Exam Question
(Facts for item numbers 15-18) In 1989,
Charice (Filipina) and Justine (American), were
married in the Philippines. In 1990, they
separated and Justine went to Las Vegas
where he obtained a divorce in the same year.
He then married another Filipina, Lea, in
Canada on January 1, 1992. They had two (2)
sons, James and John (who were both born in
1992). In 1993, after failing to hear from
Justine, Charice married Bugoy (a Filipino), by
whom she had a daughter, Regine. In 2009,
Regine married James (son of Justine with
Lea) in California, where such marriage is
valid.
15. What is the current status of the marriage
of Charice and Justine under Philippine laws?
a) Valid b) Void c) Voidable d) Dissolved
(Note: While Art 26 of the FC does not
categorically provide that the first marriage is
dissolved by the divorce obtained by the foreign
spouse abroad, but provides that such divorce
merely gives the Filipino spouse the capacity to
contract a second marriage, it is believed that
the dissolution of the first marriage us the
necessary consequence of the foreign divorce.)
16. What id the status of the marriage between
Charice and Bugoy under Philippine laws? a)
Valid b) Void c) Voidable d) Unenforceable 17.
What is the status of the marriage between
Charice and Bugoy under Philippine laws? a)
Valid b) Void c) Voidable d) Unenforceable 18.
What is the status of the marriage between
Regine and James under Philippine laws? a)
Valid b) Void c) Voidable d) Unenforceable
Marriage; Divorce Decree; Void Marriages (1992)
In 1989, Maris, a Filipino citizen, married her boss
Johnson, an American citizen, in Tokyo in a wedding
ceremony celebrated according to Japanese laws. One
year later, Johnson returned to his native Nevada, and he
validly obtained in that state an absolute divorce from his
wife Maris. After Maris received the final judgment of
35
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divorce, she married her childhood sweetheart Pedro,
also a Filipino citizen, in a religious ceremony in Cebu
City, celebrated according to the formalities of Philippine
law. Pedro later left for the United States and became
naturalized as an American citizen. Maris followed Pedro
to the United States, and after a serious quarrel, Marts
filed a suit and obtained a divorce decree issued by the
court in the state of Maryland. Maris then returned to the
Philippines and in a civil ceremony celebrated in Cebu
City according to the formalities of Philippine law, she
married her former classmate Vincent likewise a Filipino
citizen. b) Was the marriage of Maris and Pedro valid
when celebrated? Is their marriage still valid existing
now? Reasons. c) Was the marriage of Marts and
Vincent valid when celebrated? Is their marriage still
validly existing now? Reasons. d) At this point in time,
who is the lawful husband of Marts? Reasons.
SUGGESTED ANSWER:
(b) The marriage of Maris and Pedro was valid when
celebrated because the divorce validly obtained by
Johnson in Manila capacitated Maris to marry Pedro. The
marriage of Maris and Pedro is still validly existing,
because the marriage has not been validly dissolved by
the Maryland divorce [Art. 26, Family Code).
(c) The marriage of Maris and Vincent is void ab initio
because it is a bigamous marriage contracted by Maris
during the subsistence of her marriage with Pedro (Art 25
and 41, Family Code). The marriage of Maris and Vincent
does not validly exist because Article 26 does not apply.
Pedro was not a foreigner at the time of his marriage with
marts and the divorce abroad (in Maryland) was initiated
and obtained not by the alien spouse, but by the Filipino
spouse. Hence, the Maryland divorce did not capacitate
Marts to marry Vincent.
(d) At this point in time, Pedro is still the lawful husband
of Maris because their valid marriage has not been
dissolved by any valid cause (Art. 26. Family Code)
Marriage; Divorce Decrees; Filiation of Children
(2005)
In 1985, Sonny and Lulu, both Filipino citizens, were
married in the Philippines. In 1987, they separated, and
Sonny went to Canada, where he obtained a divorce in
the same year. He then married another Filipina, Auring,
in Canada on January 1,1988. They had two sons, James
and John. In 1990, after failing to hear from Sonny, Lulu
married Tirso, by whom she had a daughter, Verna. In
1991, Sonny visited the Philippines where he succumbed
to heart attack..
a) Discuss the effect of the divorce obtained by Sonny
and Lulu in Canada. (2%)
SUGGESTED ANSWER:
The divorce is not valid. Philippine law does not provide
for absolute divorce. Philippine courts cannot grant it. A
marriage between two (2) Filipinos cannot be dissolved
by a divorce obtained abroad. (Garcia v. Redo, G.R. No.
138322, October 2, 2001). Philippine laws apply to Sonny
and Lulu. Under Article 15 of the New Civil Code, laws
relating to family rights and duties, status, and capacity of
persons are binding upon citizens of the Philippines
wherever they may be. Thus, the marriage of Sonny and
Lulu is still valid and subsisting.
b) Explain the status of the marriage between Sonny and
Auring. (2%)
SUGGESTED ANSWER:
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Since the decree of divorce obtained by Lulu and Sony in
Canada is not recognized here in the Philippines, the
marriage between Sonny and Auring is void. (Art. 35,
Family Code) Any marriage subsequently contracted
during the lifetime of the first spouse shall be illegal and
void, subject only to the exception in the cases of
absence or where the prior marriage was dissolved or
annulled. (Ninal v. Bayadog, G.R. No. 133778, March 14,
2000) The marriage of Sonny and Auring does not fall
within the exception.
c) Explain the status of the marriage between Lulu and
Tirso. (2%)
SUGGESTED ANSWER:
The marriage of Lulu and Tirso is also void. Mere
absence of the spouse does not give rise to a right of the
present spouse to remarry. Article 41 of the Family Code
provides for a valid bigamous marriage only where a
spouse has been absent for four consecutive years
before the second marriage and the present spouse had
a well-founded belief that the absent spouse is already
dead. (Republic v. Nolasco,
G.R. No. 94053, March 17, 1993)
d) Explain the respective filiation of James, John and
Verna. (2%)
SUGGESTED ANSWER:
James, John and Verna are illegitimate children since
their parents are not validly married. Under Article 165 of
the Family Code, children conceived and born outside a
valid marriage are illegitimate, unless otherwise provided
in this Code.
e) Who are the heirs of Sonny? Explain. (2%) Suggested
answer:
Sonny's heirs include James, John, and Lulu. Article 887
of the Civil Code provides that the compulsory heirs of
the deceased are among others, his widow and his
illegitimate children. The widow referred to in Article 887
is the legal wife of the deceased. Lulu is still a
compulsory heir of Sonny because the divorce obtained
by Sonny in Canada cannot be recognized in the
Philippines. The legitime of each illegitimate child shall
consist of one-half of the legitime of a legitimate child.
(Art. 176, Family Code)
2011 Bar Exam
(73) Joseph, a 17-year old Filipino, married Jenny,
a 21-year old American in Illinois, USA, where the
marriage was valid. Their parents gave full consent
to the marriage of their children. After three years,
Joseph filed a petition in the USA to promptly
divorce Jenny and this was granted. When Joseph
turned 25 years, he returned to the Philippines and
married Leonora. What is the status of this second
marriage? (A) Void, because he did not cause
the judicial issuance of declaration of the nullity
of his first marriage to Jenny before marrying
Leonora. (B) Valid, because Joseph's marriage to
Jenny is void, he being only 17 years of age when
he married her. (C) Valid, because his marriage to
Leonora has all the elements of a valid marriage.
(D) Void, because Joseph is still considered
married to Jenny since the Philippines does not
recognize divorce.
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Applicable Laws; laws governing marriages
(1992)
In 1989, Maris, a Filipino citizen, married her boss
Johnson, an American citizen, in Tokyo in a
wedding ceremony celebrated according to
Japanese laws. One year later, Johnson returned to
his native Nevada, and he validly obtained in that
state an absolute divorce from his wife Maris. After
Maris received the final judgment of divorce, she
married her childhood sweetheart Pedro, also a
Filipino citizen, in a religious ceremony in Cebu
City, celebrated according to the formalities of
Philippine law. Pedro later left for the United States
and became naturalized as an American citizen.
Maris followed Pedro to the United States, and after
a serious quarrel, Maris filed a suit and obtained a
divorce decree issued by the court in the state of
Maryland. Maris then returned to the Philippines
and in a civil ceremony celebrated in Cebu City
according to the formalities of Philippine law, she
married her former classmate Vincent likewise a
Filipino citizen. a) Was the marriage of Maris and
Johnson valid when celebrated? Is their marriage
still validly existing now? Reasons.
SUGGESTED ANSWER:
(a) The marriage of Mans and Johnson was valid
when celebrated because all marriages solemnized
outside the Philippines (Tokyo) in accordance with
the laws in force in the country where they are
solemnized (Japan), and valid there as such, are
also valid in the Philippines.
Their marriage no longer validly subsists, because it
has been dissolved by the absolute divorce validly
obtained by Johnson which capacitated Maris to
remarry (Art. 26. Family Code).
Applicable Laws; laws governing marriages (2003)
Gene and Jane, Filipino, met and got married in
England while both were taking up post-graduate
courses there. A few years after their graduation, they
decided to annul their marriage. Jane filed an action to
annul her marriage to Gene in England on the ground
of latter’s sterility, a ground for annulment of marriage
in England. The English court decreed the marriage
annulled. Returning to the Philippines, Gene asked you
whether or not he would be free to marry his former
girlfriend. What would your legal advice be? 5%
SUGGESTED ANSWER:
No, Gene is not free to marry his former girlfriend. His
marriage to Jane is valid according to the forms and
solemnities of British law, is valid here (Article 17, 1st
par., NCC). However, since Gene and Jane are still
Filipinos although living in England, the dissolution of
their marriage is still governed by Philippine law (Article
15, NCC). Since, sterility is not one of the grounds for
the annulment of a marriage under Article 45 of the
Family Code, the annulment of Gene’s marriage to
Jane on that ground is not valid in the Philippines
(Article 17, NCC)
ALTERNATIVE ANSWER:
Yes, Gene is free to marry his girlfriend because his
marriage was validly annulled in England. The issue of
whether or not a marriage is voidable, including the
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
grounds therefore, is governed by the law of the place
where the marriage was solemnized (lex loci
celebrationis). Hence, even if sterility is not a ground to
annul the marriage under the Philippine law, the
marriage is nevertheless voidable because sterility
makes the marriage voidable under English law.
Therefore, annulment of the marriage in England is
valid in the Philippines.
Marriage; Divorce Decrees; Filipino Spouses
becoming Alien (1996)
Flor and Virgillo were married to each other in Roxas City
in 198O. In 1984, Flor was offered a teaching Job in
Canada, which she accepted. In 1989, she applied for
and was granted Canadian citizenship. The following
year, she sued for divorce from Virgilio in a Canadian
court. After Virgilio was served with summons, the
Canadian court tried the case and decreed the divorce.
Shortly thereafter, Flor married a Canadian. Can Virgilio
marry again in the Philippines? Explain.
SUGGESTED ANSWER:
No, Virgilio cannot validly remarry. His case is not
covered by Article 26 of the Family Code, For said Article
to be applicable, the spouse who filed for divorce must be
a foreigner at the time of the marriage. Since both of
them were Filipinos at the time of the marriage, the
divorce obtained by Flor did not capacitate Virgilio to
remarry. The fact that Flor was already an alien at the
time she obtained the divorce does not give Virgilio the
capacity to remarry under Philippine Law.
ALTERNATIVE ANSWERS:
a) Yes, Virgilio can validly remarry. Art. 26 of the FC,
merely States the alien spouse without taking into
consideration his or her nationality at the time of the
marriage. While his case is not covered by the letter of
Article 26 FC, it is, however, covered by the spirit of said
Article, the injustice to the Filipino spouse sought to be
cured by said Article is present in this case. (Department
of Justice Opinion No. 134 Series of 1993).
Note: (The questions was asked before the ruling of
Republic v. Obrecido. Hence the prevailing rule is that it
is immaterial whether the contracting spouses were both
Filipinos so long as one of the spouses became an alien
and obtained a decree of divorce abroad. - Genesis)
b) Although the marriage originally involved Filipino
citizens, it eventually became a marriage between an
alien and a Filipino after Flor became a Canadian citizen.
Thus, the divorce decree was one obtained by an alien
spouse married to a Filipino. Although nothing is said
about whether such divorce did capacitate Flor to
remarry, that fact may as well be assumed since the
problem states that she married a Canadian shortly after
obtaining the divorce. Hence, Virgillo can marry again
under Philippine law, pursuant to Art. 26. FC which
applies because Flor was already an alien at the time of
the divorce.
Marriage; Divorce Decrees; Filipino Spouses
becoming Alien (1999)
Ben and Eva were both Filipino citizens at the time of
their marriage in 1967, When their marriage turned sour,
Ben went to a small country in Europe, got himself
naturalized there, and then divorced Eva in accordance
with the law of that country, Later, he returned to the
Philippines with his new wife. Eva now wants to know
37
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what action or actions she can file against Ben. She also
wants to know if she can likewise marry again. What
advice can you give her? {5%)
SUGGESTED ANSWER:
Considering that Art. 26(2nd par.) contemplates a divorce
between a foreigner and a Filipino, who had such
respective nationalities at the time of their marriage, the
divorce in Europe will not capacitate the Filipino wife to
remarry. The advice we can give her is either to file a
petition for legal separation, on the ground of sexual
infidelity and of contracting a bigamous marriage abroad,
or to file a petition to dissolve the conjugal partnership or
absolute community of property as the case maybe.
ALTERNATIVE ANSWER:
Eva may file an action for legal separation on the grounds
of sexual infidelity of her husband and the contracting by
her husband of a bigamous marriage abroad.
She may remarry. While a strict interpretation of Article
26 of the Family Code would capacitate a Filipino spouse
to remarry only when the other spouse was a foreigner at
the time of the marriage, the DOJ has issued an opinion
(Opinion 134 s. of 1993) that the same injustice sought to
be cured by Article 26 is present in the case of spouses
who were both Filipino at the time of the marriage but one
became an alien subsequently. Said injustice is the
anomaly of Eva remaining married to her husband who is
no longer married to her. Hence, said Opinion makes
Article 26 applicable to her case and the divorce obtained
abroad by her former Filipino husband would capacitate
her to remarry. To contract a subsequent marriage, all
she needs to do is present to the civil registrar the decree
of divorce when she applies for a marriage license under
Article 13 of the Family Code.
Note: (The questions was asked before the ruling of
Republic v. Obrecido. Hence the prevailing rule is that it
is immaterial whether the contracting spouses were both
Filipinos so long as one of the spouses became an alien
and obtained a decree of divorce abroad. - Genesis)
Marriage; Divorce Decrees; Filipino Spouse
Becoming Alien (2009)
No.IV. Harry married Wilma, a very wealthy
woman. Barely five (5) years into the
marriage, Wilma fell in love with Joseph.
Thus, Wilma went to a small country in
Europe, became a naturalized citizen of that
country, divorced Harry, and married
Joseph. A year thereafter, Wilma and Joseph
returned and established permanent
residence in the Philippines. (A). Is the
divorce obtained by Wilma from Harry
recognized in the Philippines? Explain your
answer. (3%) SUGGESTED ANSRWER : As
to Wilma, the divorced obtained by her is
recognized as valid in the Philippines
because she is now a foreigner. Philippine
personal laws do not apply to a foreigner.
However, recognition of the divorce as
regards Harry will depend on the
applicability to his case of the second
paragraph of Article 26 of the Family
Code. If it is applicable, divorce is
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
recognized as to him and, therefore, he
can remarry. However, if it is not
applicable, divorce is not recognized as to
him and, consequently, he cannot
remarry. ALTERNATIVE ANSWER: Yes ,
the divorce obtained by Wilma is
recognized as valid in the Philippines. At
the time she got the divorce, she was
already a foreign national having been
naturalized as a citizen of that “small
country in Europe.” Based on precedents
established by the Supreme Court ( Bayot
v. CA, 570 SCRA 472 [2008]), divorce
obtained by a foreigner is recognized in
the Philippines if validly obtained in
accordance with his or her national law .
(B). If Harry hires you as his lawyer, what
legal recourse would you advise him to take?
Why? (2%) SUGGESTED ANSWER: I will
advice Harry to: (1) Dissolve and liquidate
his property relations with Wilma ; and (2)
If he will remarry, file a petition for the
recognition and enforcement of the foreign
judgment of divorced (Rule 39,Rules of
Court ).
(C). Harry tells you that he has fallen in love
with another woman, Elizabeth, and wants to
marry her because, after all, Wilma is already
married to Joseph. Can Harry legally marry
Elizabeth? Explain. (2%)
SUGGESTED ANSWER :
Yes, he can validly marry Elizabeth,
applying the doctrine laid down by the
Supreme Court in Republic v. Obrecido
(427 SCRA 114 [2005]). Under the second
paragraph of Article 26 of the Family
Code, for the Filipino spouse to have
capacity to remarry, the law expressly
requires the spouse who obtained the
divorce to be a foreigner at the time of
the marriage. Applying this requirement
to the case of Harry it would seem that he
is not given the capacity to remarry. This
is because Wilma was a Filipino at the
time of her marriage to Harry. In Republic
v. Obrecido, however, the Supreme Court
ruled that a Filipino spouse is given the
capacity to remarry even though the
spouse who obtained the divorce was a
Filipino at the time of the marriage, if the
latter was already a foreigner when the
divorce was already obtained abroad.
According to the court, to rule otherwise
will violate the equal protection clause of
the Constitution.
38
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Marriage; Divorce Decrees; Foreign
Spouse Divorces Filipino Spouse (2012)
(b) Cipriano and Lady Miros married each
other. Lady Miros then left for the US and
there, she obtained American citizenship.
Cipriano later learned all about this
including the fact that Lady Miros has
divorced him in America and that she had
remarried there. He then filed a petition for
authority to remarry, invoking Par. 2, Art. 26
of the Family Code. Is Cipriano capacitated
to re-marry by virtue of the divorce decree
obtained by his Filipino spouse who was
later naturalized as an American citizen?
Explain. (5%) SUGGESTED ANSWER: Yes,
he is capacitated to remarry. While the
second paragraph of Art 26 of the Family
Code is applicable only to a Filipino who
married a foreigner at the time of
marriage, the Supreme Court ruled in the
case of Republic v. Orbecido, G.R. No.
154380, 5 Oct, 2005, that the said
provision equally applies to a Filipino who
married another Filipino at the time of
the marriage, but who was already a
foreigner when the divorce was obtained.
Marriage; Divorce Decrees; Foreign
Spouse Divorces Filipino Spouse (2010)
No.I. True or False. (A). Under Article 26 of
the Family Code, when a foreign spouse
divorces his/her Filipino spouse, the latter
may re-marry by proving only that the
foreign spouse has obtained a divorce
against her or him abroad. (1%)
SUGGESTED ANSWER : FALSE, In Garcia
v. Recio , 366 SCRA 437 (2001) , the SC
held that for a Filipino spouse to have
capacity to contract a subsequent
marriage, it must also be proven that the
foreign divorced obtained abroad by the
foreigner spouse give such foreigner
spouse capacity to remarry.
ALTERNATIVE ANSWER: TRUE, Art 26 (2)
(FC), clearly provides that the decree of
divorce obtained abroad by the foreigner
spouse is sufficient to capacitate the
Filipino spouse to remarry.
QA. Arthur and Helen, both Filipinos, got
married and had 2 children. Arthur later
worked in Rome where he acquired Italian
citizenship. He got a divorce from Helen in
Rome but, on returning to the Philippines,
he realized his mistake,
asked forgiveness of his wife, and resumed
living with her. They had 2 more children.
What is the status of their 4 children?
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
A. The children born before the divorce are
legitimate but those born after it are
not since Arthur got the divorce when he had
ceased to be a Filipino.
B. The divorce rendered illegitimate the
children born before it since the marriage
that begot them had been nullified.
C. The children born before and after the
divorce are all legitimate since Philippine law
does not recognize divorce.
D. All the children are legitimate since they
were born of the same father and
mother.
A Petition for “Authority to Remarry” invoking art.
26, par. 2 was treated by the court as a petition
for declaratory relief. The proper remedy is not
annulment for this would be too long, tedious and
not feasible (considering that the marriage appears
to have the badges of validity (Republic vs.
Obrecido, supra).
Chapter 2. Marriages Exempted from License
Requirement
Note: MARRIAGES EXEMPT FROM LICENSE
REQUIREMENT: (clue words)
1. Marriage in articulo mortis;
2. No means of transportation to appear
before the local civil registrar;
3. Marriage solemnized outside the
Philippines where no marriage license is
required by the country where it was
solemnized;
4. Marriage among Muslims or among ethnic
cultural communities in accordance with
their customs;
5. Marriage between parties who have lived
together as husband and wife for at least 5
years.
Art. 27. In case either or both of the contracting
parties are at the point of death, the marriage
may be solemnized without necessity of a
marriage license and shall remain valid even if
the ailing party subsequently survives. (72a)
Art. 28. If the residence of either party is so
located that there is no means of transportation to
enable such party to appear personally before the
local civil registrar, the marriage may be
solemnized without necessity of a marriage
license. (72a)
Art. 29. In the cases provided for in the two
preceding articles, the solemnizing officer shall
state in an affidavit executed before the local civil
39
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registrar or any other person legally authorized to
administer oaths that the marriage was performed
in articulo mortis or that the residence of either
party, specifying the barrio or barangay, is so
located that there is no means of transportation to
enable such party to appear personally before the
local civil registrar and that the officer took the
necessary steps to ascertain the ages and
relationship of the contracting parties and the
absence of legal impediment to the marriage.
(72a)
2. The parties must have no legal impediment
to marry each other;
3. The fact of absence of legal impediment
between the parties must be present at the
time of the marriage;
4. There must be an affidavit stating the fact
of of cohabitation for at least 5 years;
5. The solemnizing officer must execute a
sworn statement that he had ascertained
the qualifications of the parties and that he
had found to impediment to their marriage.

Art. 30. The original of the affidavit required in the
last preceding article, together with the legible
copy of the marriage contract, shall be sent by the
person solemnizing the marriage to the local civil
registrar of the municipality where it was
performed within the period of thirty days after the
performance of the marriage. (75a)
The 5 years period immediately before the day of
the marriage should be a cohabitation
characterized by exclusivity and continuity—
meaning no 3rd party was involved at any time
within the 5 years period and it is unbroken.

Chapter 3. Void and Voidable Marriages

Art. 31. A marriage in articulo mortis between
passengers or crew members may also be
solemnized by a ship captain or by an airplane
pilot not only while the ship is at sea or the plane
is in flight, but also during stopovers at ports of VOID MARRIAGE
call. (74a) Inexistent from the time
of performance
Art. 32. A military commander of a unit, who is a
commissioned officer, shall likewise have No community of
authority to solemnize marriages in articulo mortis property, only co-
between persons within the zone of military ownership
operation, whether members of the armed forces Children are illegitimate,
or civilians. (74a) except art. 36 and art.
53
Art. 33. Marriages among Muslims or among Cannot be ratified
members of the ethnic cultural communities may
be performed validly without the necessity of
marriage license, provided they are solemnized in  May be attacked
accordance with their customs, rites or practices. directly or
(78a) collaterally but for
purposes of
Art. 34. No license shall be necessary for the remarriage, there
marriage of a man and a woman who have lived must be judicial
together as husband and wife for at least five declaration of
years and without any legal impediment to marry nullity.
each other. The contracting parties shall state the  Can still be
foregoing facts in an affidavit before any person impugned even
authorized by law to administer oaths. The after death of
solemnizing officer shall also state under oath that parties.
he ascertained the qualifications of the  Action for nullity
contracting parties are found no legal impediment does not prescribe
to the marriage. (76a)
VOIDABLE MARRIAGE
Valid until annulled
Absolute community
exists unless another
system is agreed upon
in marriage settlement
Children are legitimate if
conceived before decree
of annulment
Can be ratified by free
cohabitation or
prescription
 Cannot be attack
collaterally, only
directly.
 Can no longer be
impugned after the
death on one of the
parties.
 Action prescribes.

Requisites: Art. 35. The following marriages shall be void

1. Man and woman must have been living from the beginning:
together as husband and wife for at least 5 (1) Those contracted by any party below
years; eighteen years of age even with the
consent of parents or guardians;

JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 40

____________________________________________________________________________________________________
(2) Those solemnized by any person not
legally authorized to perform marriages
unless such marriages were contracted
with either or both parties believing in good
faith that the solemnizing officer had the
legal authority to do so;
(3) Those solemnized without license,
except those covered the preceding
Chapter;
(4) Those bigamous or polygamous
marriages not failing under Article 41;
(5) Those contracted through mistake of
one contracting party as to the identity of
the other; and
(6) Those subsequent marriages that are
void under Article 53.
Marriage; Non-Bigamous Marriages (2006)
Marvin, a Filipino, and Shelley, an American, both
residents of California, decided to get married in their
local parish. Two years after their marriage, Shelley
obtained a divorce in California. While in Boracay, Marvin
met Manel, a Filipina, who was vacationing there. Marvin
fell in love with her. After a brief courtship and complying
with all the requirements, they got married in Hongkong
to avoid publicity, it being Marvin's second marriage. Is
his marriage to Manel valid? Explain. (5%)
SUGGESTED ANSWER:
Yes. The marriage will not fall under Art. 35(4) of the
Family Code on bigamous marriages, provided that
Shelley obtained an absolute divorce, capacitating her to
remarry under her national law. Consequently, the
marriage between Marvin and Manel may be valid as
long as it was solemnized and valid in accordance with
the laws of Hongkong [Art. 26, paragraphs 1 and 2,
Family Code].
Art. 36. A marriage contracted by any party who,
at the time of the celebration, was psychologically
incapacitated to comply with the essential marital
obligations of marriage, shall likewise be void
even if such incapacity becomes manifest only
after its solemnization. (As amended by Executive
Order 227)
NOTES:
PSYCHOLOGICAL INCAPACITY
Has no exact definition but is restricted to
psychological incapacity to comply with the
essential marital obligations of marriage. In
involves a senseless, protracted, and constant
refusal to comply with the essential marital
obligations by one or both of the spouses
although he or she, or they are physically capable
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
of performing such obligations (Chi Ming Tsoi vs.
CA, 266 SCRA 234, [1997]).
Note that in this case, there is refusal to
have sex by the husband to the wife.
JURISPRUDENTIAL GUIDELINES:
From the case of Republic vs. CA and Molina,
268 SCRA 198)—
1. Plaintiff has the burden of proof to show the
nullity of the marriage;
2. The root cause of the psychological
incapacity must be—
a. Medically or clinically identified;
b. Alleged in the complaint;
c. Sufficiently proven by experts;
d. Clearly explained in the decision.
3. The incapacity must be proven to be
existing at the time of the celebration of the
marriage;
4. Such incapacity must be shown to be
medically or clinically permanent or
incurable;
5. Such illness must be grave enough to bring
about the disability of the party to assume
the essential obligations of marriage;
6. Essential marital obligations must be those
embraced in arts. 68—71, as well as arts.
220, 221, and 225, of the FamCod;
7. Interpretations given by the National
Appellate Matrimonial Tribunal of the
Catholic Church, while not controlling or
decisive, should be given great respect by
the courts;
8. The trial court must order the prosecuting
attorney or fiscal and the SolGen to appear
as counsel for the State.
Molina doctrine does not require personal medical
examination of the person who is psychologically
incapacitated to marry. However, evidence of
medical and clinical finding of any illness
constituting psychological incapacity will greatly
help. This can be done by expert witness. In
proving psychological incapacity, we find no
distinction between an alien spouse and a Filipino
spouse. We cannot be lenient on the application
of the rules merely because the spouse alleged to
be psychologically incapacitated happens to be a
foreign national (Republic vs. Quintero-Hamano
428 SCRA 735, [2004]).
Mere sexual infidelity or perversion and
abandonment do not by themselves constitute
psychological incapacity within the contemplation
of the FamCod. Neither could emotional
immaturity and irresponsibility be equated with
psychological incapacity. It must be shown that
these acts are manifestations of a disordered
41
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personality which make the respondent
completely unable to discharge the essential
obligations of a marital state, not merely to her
youth, immaturity or sexual promiscuity. Root
cause must be traceable prior to the marriage
ceremony (Dedel vs. CA, 421 SCRA 461).
Psychological incapacity must be judged on a
case to case basis. It should refer to no less than
a mental (not physical) incapacity. It must be
characterized by—
a. Gravity;
b. Juridical antecedence; and
c. Incurability.
Sexual infidelity does not constitute psychological
incapacity within the contemplation of the FC. It
must be shown that the unfaithfulness is a
manifestation of a disordered personality which
makes him completely unable to discharge the
essential marital state and not merely due to his
ardent wish to have a child of his own flesh and
blood. The negative traits must paralyze him from
complying with the essential obligations of
marriage. Unsatisfactory marriage is not a null
and void marriage. Mere showing of
irreconciliable differences and conflicting
personalities DOES NOT constitute psychological
incapacity (Carating-Siaynco vs. Siaynco, 441
SCRA 422).
Marriage; Legal Separation; Declaration of Nullity
(2002)
If drug addiction, habitual alcoholism, lesbianism or
homosexuality should occur only during the marriage,
would this constitute grounds for a declaration of nullity or
for legal separation, or would they render the marriage
voidable? (1%).
SUGGESTED ANSWER:
In accordance with law, if drug addiction, habitual
alcoholism, lesbianism or homosexuality should occur
only during the marriage, they: a) Will not constitute as
ground for declaration of nullity
(Art. 36, Family Code); b) Will constitute as grounds for
legal separation (Art. 56, FC) and c) will not constitute as
grounds to render the marriage voidable (Art.45and 46,
FC)
Marriage; Void Marriages; Psychological Incapacity
(2002)
A. Give a brief definition or explanation of the term
“psychological incapacity” as a ground for the declaration
of nullity of a marriage. (2%)
B. If existing at the inception of marriage, would the state
of being of unsound mind or the concealment of drug
addiction, habitual alcoholism, homosexuality or
lesbianism be considered indicia of psychological
incapacity? Explain. (2%).
SUGGESTED ANSWER:
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
A.” PSYCHOLOGICAL INCAPACITY” is a mental
disorder of the most serious type showing the incapability
of one or both spouses to comply the essential marital
obligations of love, respect, cohabitation, mutual help and
support, trust and commitment. It must be characterized
by Juridical antecedence, gravity and incurability and its
root causes must be clinically identified or examined.
(Santos v. CA, 240 SCRA 20 [1995]).
B. In the case of Santos v. Court of Appeals, 240 SCRA
20 (1995), the Supreme Court held that being of unsound
mind, drug addiction, habitual alcoholism, lesbianism or
homosexuality may be indicia of psychological incapacity,
depending on the degree of severity of the disorder.
However, the concealment of drug addiction, habitual
alcoholism, lesbianism or homosexuality is a ground of
annulment of marriage.
Marriage; Psychological Incapacity (1996)
On April 15, 1983, Jose, an engineer, and Marina, a
nurse, were married to each other in a civil ceremony in
Boac. Marinduque. Six months after their marriage, Jose
was employed in an oil refinery in Saudi Arabia for a
period of three years. When he returned to the
Philippines, Marina was no longer living in their house,
but in Zamboanga City, working in a hospital. He asked
her to come home, but she refused to do so, unless he
agreed not to work overseas anymore because she
cannot stand living alone. He could not agree as in fact,
he had signed another three year contract. When he
returned in 1989, he could not locate Marina anymore. In
1992, Jose filed an action served by publication in a
newspaper of general circulation. Marina did not file any
answer, a possible collusion between the parties was
ruled out by the Public Prosecutor. Trial was conducted
and Marina neither appeared nor presented evidence in
her favor. If you were the judge, will you grant the
annulment. Explain.
SUGGESTED ANSWER:
As judge, I will not grant the annulment. The facts do not
show any taint of personality disorder on the part of the
wife Marina so as to lend substance to her husband's
averment of psychological incapacity within the meaning
of Art 36 of the Family Code. In Santos vs. CA (240
SCRA 20), this particular ground for nullity of marriage
was held to be limited only to the most serious cases of
personality disorders (clearly demonstrative of utter
sensitivity or inability to give meaning and significance to
the marriage. Marina's refusal to come home to her
husband unless he agreed not to work overseas, far from
being indicative of an insensitivity to the meaning of
marriage, or of a personality disorder, actually shows a
sensitive awareness on her part of the marital duty to live
together as husband and wife. Mere refusal to rejoin her
husband when he did not accept the condition imposed
by her does not furnish any basis for concluding that she
was suffering from psychological incapacity to discharge
the essential marital obligations.
Mere intention to live apart does not fall under Art. 36,
FC. Furthermore, there is no proof that the alleged
psychological incapacity existed at the time of the
marriage.
Marriage; Psychological Incapacity (2006)
Gemma filed a petition for the declaration of nullity of her
marriage with Arnell on the ground of psychological
42
____________________________________________________________________________________________________
incapacity. She alleged that after 2 months of their
marriage, Arnell showed signs of disinterest in her,
neglected her and went abroad. He returned to the
Philippines after 3 years but did not even get in touch with
her. Worse, they met several times in social functions but
he snubbed her. When she got sick, he did not visit her
even if he knew of her confinement in the hospital.
Meanwhile, Arnell met an accident which disabled him
from reporting for work and earning a living to support
himself. Will Gemma's suit prosper? Explain. (5%)
SUGGESTED ANSWER:
No, Gemma's suit will not prosper. Even if taken as true,
the grounds, singly or collectively, do not constitute
"psychological incapacity." In Santos v. CA, G.R. No.
112019, January 4, 1995, the Supreme Court clearly
explained that "psychological incapacity must be
characterized by (a) gravity, (b) juridical antecedence,
and (c) incurability" (Ferraris v. Ferraris, G.R. No.
162368, July 17, 2006; Choa v. Choa, G.R. No. 143376,
November 26, 2002). The illness must be shown as
downright incapacity or inability to perform one's marital
obligations, not a mere refusal, neglect, difficulty or much
less, ill will. Moreover, as ruled in Republic v. Molina, GR
No. 108763, February 13, 1997, it is essential that the
husband is capable of meeting his marital responsibilities
due to psychological and not physical illness (Antonio v.
Reyes, G.R. No. 155800, March 10, 2006; Republic v.
Quintero-Hamano, G.R. No. 149498, May 20, 2004).
Furthermore, the condition complained of did not exist at
the time of the celebration of marriage.
Marriage; Psychological Incapacity (2006)
Article 36 of the Family Code provides that a marriage
contracted by any party who, at the time of the
celebration, was psychologically incapacitated to comply
with the essential marital obligations of marriage, shall be
void. Choose the spouse listed below who is
psychologically incapacitated. Explain. (2.5%) a) Nagger
b) Gay or Lesbian c) Congenital sexual pervert d)
Gambler e) Alcoholic SUGGESTED ANSWER: The best
answers are B and C. To be sure, the existence and
concealment of these conditions at the inception of
marriage renders the marriage contract voidable (Art. 46,
Family Code). They may serve as indicia of psychological
incapacity, depending on the degree and severity of the
disorder (Santos v. CA, G.R. No. 112019, Jan. 4, 1995).
Hence, if the condition of homosexuality, lesbianism or
sexual perversion, existing at the inception of the
marriage, is of such a degree as to prevent any form of
sexual intimacy, any of them may qualify as a ground for
psychological incapacity. The law provides that the
husband and wife are obliged to live together, observe
mutual love, respect and fidelity (Art. 68, Family Code).
The mandate is actually the spontaneous, mutual
affection between the spouses. In the natural order it is
sexual intimacy which brings the spouses wholeness and
oneness (Chi Ming Tsoi v. CA, G.R. No. 119190, January
16,1997).
ALTERNATIVE ANSWER:
None of them are necessarily psychologically
incapacitated. Being a nagger, etc. are at best only
physical manifestations indicative of psychological
incapacity. More than just showing the manifestations of
incapacity, the petitioner must show that the respondent
is incapacitated to comply with the essential marital
obligations of marriage and that it is also essential that he
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
must be shown to be incapable of doing so due to some
psychological, not physical illness
(Republic v. Quintero-Hamano, G.R. No. 149498, May
20, 2004).
ALTERNATIVE ANSWER:
A congenital sexual pervert may be psychologically
incapaci-tated if his perversion incapacitates him from
discharging his marital obligations. For instance, if his
perversion is of such a nature as to preclude any normal
sexual activity with his spouse.
Marriage; Psychological Incapacity (2013)
No.I. You are a Family Court judge and
before you is a Petition for the Declaration of
Nullity of Marriage (under Article 36 of the
Family Code)filed by Maria against Neil.
Maria claims that Neil is psychologically
incapacitated to comply with the essential
obligations of marriage because Neil is a
drunkard, a womanizer, a gambler, and a
mama's boy- traits that she never knew or
saw when Neil was courting her. Although
summoned, Neil did not answer Maria's
petition and never appeared in court.
To support her petition, Maria presented
three witnesses- herself, Dr. Elsie Chan, and
Ambrosia. Dr. Chan testified on the
psychological report on Neil that she
prepared. Since Neil never acknowledged n9r
responded to her invitation for interviews,
her report is solely based on her interviews
with Maria and the spouses' minor children.
Dr. Chan concluded that Neil is suffering
from Narcissistic Personality Disorder, an
ailment that she found to be already present
since Neil's early adulthood and one that is
grave and incurable. Maria testified on the
specific instances when she found Neil
drunk, with another woman, or squandering
the family's resources in a casino. Ambrosia,
the spouses' current household help,
corroborated Maria's testimony. On the basis
of the evidence presented, will you grant the
petition? (8%) SUGGESTED ANSWER: No.
The petition should be denied. The
psychological incapacity under Art. 36 of
the Family Code must be characterized by
(a) gravity, (b) juridical antecedence, and
(c) incurability. It is not enough to prove
that the parties failed to meet their
responsibilities and duties as married
persons; it is essential that they must be
shown to be incapable of doing so, due to
some physiological (not physical) illness
(Republic v. CA and Molina, G.R. No.
108763, Feb 13, 1997).
In this case, the pieces of evidence presented
are not sufficient to conclude that indeed Neil
43
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is suffering from psychological incapacity
[Narcissistic Personality Disorder] existing
already before the marriage, incurable and
serious enough to prevent Neil from
performing his essential marital obligations.
Dr. Chan’s report contains mere conclusions.
Being a drunkard, a womanizer, a gambler and
a mama’s boy, merely shows Neil’s failure to
perform his marital obligations. In a number of
cases, the Supreme Court did not find the
existence of psychological incapacity in cases
where the respondent showed habitual
drunkenness (Republic v. Melgar, G.R. No.
139676, 2006), blatant display of infidelity and
irresponsibility (Dedel v. CA, 2004) or being
hooked to gambling and drugs (Republic v.
Tanyag-San Jose, G.R. No. 168328, 2007).
ALTERNATIVE ANSWER: Yes. The petition
should be granted. The personal medical or
psychological examination of respondent is
not a requirement for declaration of
psychological incapacity. It is the totality of
the evidence presented which shall determine
the existence of psychological incapacity
(Marcos v. Marcos, G.R. No. 136490, Oct 19,
2000). Dr. Chan’s report corroborated by
Maria’s and Ambrosia’s testimonies,
therefore, sufficiently prove Neil’s
psychological incapacity to assume his
marital obligations.
Marriage; Psychological Incapacity (2012)
No.II.b) The petitioner filed a petition for
declaration of nullity of marriage based
allegedly on the psychological incapacity of
the respondent, but the psychologist was not
able to personally examine the respondent
and the psychological report was based only
on the narration of petitioner. Should the
annulment be granted? Explain. (5%)
SUGGESTED ANSWER: The annulment
cannot be guaranteed solely on the basis
of the psychological report. For the report
to prove the psychological incapacity of
the respondent, it is required that the
psychologist should personally examine
the respondent and the psychological
report should be based on the
psychologist’s independent assessment of
the facts as to whether or not the
respondent is psychologically
incapacitated.
Since, the psychologist did not personally
examine the respondent, and his report is
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
based solely on the story of the petitioner who
has an interest in the outcome of the petition,
the marriage cannot be annulled on the
ground of respondent’s psychological
incapacity if the said report is the only
evidence of respondent’s psychological
incapacity.
A finding of psychological incapacity on the part
of one of the spouse negates any award of moral
and exemplary damages against him/her. Award
of moral damages should not be predicated on
the mere act of entering into marriage. There
must be evidence that it was done deliberately
and with malice by a party who had known of
his/her incapacity and yet willfully concealed the
same (Buenaventura vs. CA, GR No. 127358,
March 31, 2005).
A person who is unable to distinguish between
fantasy and reality would similarly be unable to
comprehend the legal nature of the marital bond,
much less its psychic meaning and the
corresponding obligations attached to marriage,
including parenting. One unable to adhere to
reality cannot be expected to adhere as well to
any legal or emotional commitments (Antonio vs.
Reyes, GR No. 155800, March 10, 2006).
RES JUDICATA IN ANNULMENT:
A person who filed a case to declare void the
marriage based on psychological incapacity,
which was denied, cannot subsequently file a
case to declare the marriage void based on the
absence of marriage license. The first case
impliedly admitted the presence of marriage
license (Mallion vs. Alcatara, GR No. 141528,
Oct. 31, 2006)
COMMENT: It would seem that the petitioner is
stopped in this case.
Art. 37. Marriages between the following are
incestuous and void from the beginning,
whether relationship between the parties be
legitimate or illegitimate:
(1) Between ascendants and descendants
of any degree; and
(2) Between brothers and sisters, whether
of the full or half blood. (81a)
Art. 38. The following marriages shall be void
from the beginning for reasons of public
policy:
44
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(1) Between collateral blood relatives
whether legitimate or illegitimate, up to the
fourth civil degree;
(2) Between step-parents and step-
children;
(3) Between parents-in-law and children-in-
law;
(4) Between the adopting parent and the
adopted child;
(5) Between the surviving spouse of the
adopting parent and the adopted child;
(6) Between the surviving spouse of the
adopted child and the adopter;
(7) Between an adopted child and a
legitimate child of the adopter;
(8) Between adopted children of the same
adopter; and
(9) Between parties where one, with the
intention to marry the other, killed that other
person's spouse, or his or her own spouse.
(82)
Notes:
Under the FamCod, the following can marry
each other—
1. Brother-in-law and sister-in-law;
2. Stepbrother and stepsister;
3. Guardian and ward;
4. Adopted and illegitimate child of the
adopter;
5. Parties who have been convicted of
adultery or concubinage.
Marriage; Void Marriages; By Reason of
Public Policy (2008) No.V. Despite several
relationships with different women, Andrew
remained unmarried. His first relationship
with Brenda produced a daughter, Amy, now
30 years old. His second, with Carla,
produced two sons: Jon and Ryan. His third,
with Donna, bore him no children although
Elena has a daughter Jane, from a previous
relationship. His last, with Fe, produced no
biological children but they informally
adopted without court proceedings, Sandy's
now 13 years old, whom they consider as
their own. Sandy was orphaned as a baby
and was entrusted to them by the midwife
who attended to Sandy's birth. All the
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
children, including Amy, now live with
andrew in his house. (D). Can Jon and Jane
legally marry? (1%) SUGGESTED ANSWER:
Yes. Jon and Jane can marry each other; Jon
is an illegitimate child of Andrew while Jane is
a child of Elena from a previous relationship.
Thus, their marriage is not one of the
prohibited marriages enumerated under Art.
38 of the FC.
Marriage; Void Marriages; By Reason of
Public Policy (2007) No. VII. Write "TRUE" if the
statement is true or "FALSE" if the statement is
false. If the statement is FALSE, state the reason.
(2% each). (5). Amor gave birth to Thelma when
she was 15 years old. Thereafter, Amor met
David and they got married when she was 20
years old. David had a son, Julian, with his ex-
girlfriend Sandra. Julian and Thelma can get
married. SUGGESTED ANSWER: TRUE. Julian
and Thelma can get married. Marriage
between stepbrothers and stepsisters are not
among the marriages prohibited under the
Family Code.
2012 Bar Exam Question
28. Which of the following marriages is void for
reasons of public policy? a) Between brothers
and sisters, whether of the full or half blood. b)
Between step-parents and step children. c)
Between parents-in-law and children-in-law.
d) b and c
Art. 39. The action or defense for the declaration
of absolute nullity of a marriage shall not
prescribe. (As amended by Executive Order 227
and Republic Act No. 8533; The phrase
"However, in case of marriage celebrated before
the effectivity of this Code and falling under
Article 36, such action or defense shall prescribe
in ten years after this Code shall taken effect" has
been deleted by Republic Act No. 8533
[Approved February 23, 1998]).
Art. 40. The absolute nullity of a previous
marriage may be invoked for purposes of
remarriage on the basis solely of a final judgment
declaring such previous marriage void. (n)
Notes:
For purposes other than remarriage, other
evidence is acceptable. Hence, a COLLATERAL
ATTACK is allowed if the purpose is other than
remarriage.
Thus, is a case for concubinage, the accused
need not present a final judgment declaring his
45
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marriage void for he can adduce evidence in the
criminal case of the nullity of his marriage other
than proof of final judgment declaring his
marriage void. Hence, the pendency of the civil
case for the nullity of marriage does not pose a
prejudicial question in a criminal case for
concubinage.
TAKE NOTE: in bigamy, declaration of
nullity of annulment is not a prejudicial
question in the prosecution of bigamy. Art.
40 applies. Parties are not allowed to
determine for themselves the validity or
nullity of their marriage.
BE CAREFUL: Art. 40 applies only if the
marriage is a marriage that is “void BUT
existing”. It does not apply where the marriage is
“void AND inexistent”. Thus, where the parties
just merely signed the marriage contract on their
own without any marriage ceremony at all, judicial
declaration of nullity is NOT needed (Lucio
Morigo vs. P. GR No. 145226, Feb. 06, 2004).
Marriage; Annulment; Judicial Declaration (1993)
Maria and Luis, both Filipinos, were married by a Catholic
priest in Lourdes Church, Quezon City in 1976, Luis was
drunk on the day of his wedding. In fact, he slumped at
the altar soon after the ceremony. After marriage, Luis
never had a steady job because he was drunk most of
the time. Finally, he could not get employed at all
because of drunkenness. Hence, it was Maria who had to
earn a living to support herself and her child begotten
with Luis. In 1986, Maria filed a petition in the church
matrimonial court in Quezon City to annul her marriage
with Luis on the ground of psychological incapacity to
comply with his marital obligation. Her petition was
granted by the church matrimonial court. 1) Can Maria
now get married legally to another man under Philippine
laws after her marriage to Luis was annulled by the
church matrimonial court? Explain. 2) What must Maria
do to enable her to get married lawfully to another man
under Philippine laws?
SUGGESTED ANSWER:
1) No, Maria cannot validly contract a subsequent
marriage without a court declaration of nullity of the first
marriage. The law does not recognize the church
declaration of nullity of a marriage.
2) To enable Maria to get married lawfully to another
man. she must obtain a judicial declaration of nullity of
the prior marriage under Article 36 Family Code.
2011 Bar Exam Question
(56) X and Y, Filipinos, got married in Los
Angeles, USA, using a marriage license issued
by the Philippine consul in Los Angeles, acting
as Civil Registrar. X and Y did not know that
they were first cousins because their mothers,
who were sisters, were separated when they
were quite young. Since X did not want to
continue with the relation when he heard of it,
he left Y, came to the Philippines and married
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Z. Can X be held liable for bigamy? (A) No
since X’s marriage to Y is void ab initio or did
not exist. (B) No since X acted in good faith,
conscious that public policy did not approve of
marriage between first cousins. (C) Yes since
he married Z without first securing a
judicial declaration of nullity of his
marriage to Y. (D) Yes since his first marriage
to Y in Los Angeles is valid.
Art. 41. A marriage contracted by any person
during subsistence of a previous marriage shall
be null and void, unless before the celebration of
the subsequent marriage, the prior spouse had
been absent for four consecutive years and the
spouse present has a well-founded belief that the
absent spouse was already dead. In case of
disappearance where there is danger of death
under the circumstances set forth in the
provisions of Article 391 of the Civil Code, an
absence of only two years shall be sufficient.
For the purpose of contracting the subsequent
marriage under the preceding paragraph the
spouse present must institute a summary
proceeding as provided in this Code for the
declaration of presumptive death of the absentee,
without prejudice to the effect of reappearance of
the absent spouse. (83a)
Marriage; Subsequent Marriage (2008)
No. I. Ana Rivera had a husband, a Filipino
citizen like her, who was among the
passengers on board a commercial jet plane
which crashed in the Atlantic Ocean ten (10)
years earlier and had never been heard of ever
since. Believing that her husband had died,
Ana married Adolf Cruz Staedtler, a divorced
German national born of a German father and
a Filipino mother residing in Stuttgart. To
avoid being reqiured to submit the required
certificate of capacity to marry from the
German Embassy in Manila, Adolf stated in
the application for marriage license that he
was a Filipino citizen. With the marriage
license stating that Adolf was a Filipino, the
couple got married in a ceremony officiated by
the Parish Priest of Calamba, Laguna in a
beach in Nasugbu, Batangas, as the local
parish priest refused to solemnize marriages
except in his church. Is the marriage valid?
Explain fully. (5%)
SUGGESTED ANSWER:
No. The marriage is not valid. Art. 41 FC
allows the present spouse to contract a
subsequent marriage during the subsistence
46
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of his previous marriage provided that: (a)
his prior spouse in the first marriage had
been absent for four consecutive years; (b)
that the spouse present has a well-founded
belief that the absent spouse was already
dead, and (C) present spouse instituted a
summary proceeding for the declaration of
the presumptive death of absent spouse.
Otherwise, the second marriage shall be
null and void. In the instant case, the
husband of Ana was among the passengers
on board a commercial jet plane which
crashed in the Atlantic Ocean. The body of
the deceased husband was not recovered to
confirm his death. Thus, following Art. 41,
Ana should have first secured a judicial
declaration of his presumptive death before
she married Adolf. The absence of the said
judicial declaration incapacitated Ana from
contracting her second marriage, making it
void ab initio.
VII. Lito was a commercial pilot who flew for
Pacific-Micronesian Air. In 1998, he was the
co-pilot of the airline's Flight MA916 that
mysteriously disappeared two hours after
take-off from Agana, Guam, presumably over
the Pacific Ocean. No trace of the plane and its
105 passengers and crew was ever found
despite diligent search; Lito himself was never
heard of again. Lito left behind his wife, Lita,
and their two children. In 2008, Lita met and
married Jaime. They now have a child of their
own. While on a tour with her former high
school classmates in a remote province of
China in 2010, Lita was surprised to see Lito
or somebody who looked exactly like him, but
she was sure it was Lito because of the
extreme surprise that registered in his face
when he also saw her. Shocked, she
immediately fled to her hotel and post haste
returned to the country the next day. Lita now
comes to you for legal advice. She asks you the
following questions:
VII. (l) If Lito is alive, what is the status of his
marriage to Lita? (1%) (A) The marriage
subsists because the marital bond has not
been terminated by death. (B) The marriage
was terminated when Lita married Jaime. (C)
The marriage subsists because Lita's
marriage to Jaime is void. (D) The marriage
is terminated because Lito is presumed dead
after his plane has been missing for more than
4 years. (E) The marriage can be formally
declared terminated if Lito would not
resurface. SUGGESTED ANSWER: (C) The
marriage subsists because Lita's marriage
to Jaime is void. For the purpose of
contracting the subsequent marriage under
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art 41 of the Family Code, the spouse
present must institute a summary
proceeding as provided in the Family Code
for the declaration of presumptive death of
the absentee, without prejudice to the
effect of the reappearance of the absent
spouse.
VII. (2) If Lito is alive, what is the status of
Lita's marriage to Jaime? (1%) (A) The
marriage is valid because Lita's marriage to
Lito was terminated upon Lito's disappearance
for more than seven years.
(B) The marriage is valid. After an absence of
more than 10 years, Lito is already presumed
dead for all purposes.
(C) The marriage is void. Lito's mere absence,
however lengthy, is insufficient to authorize
Lita to contract a subsequent marriage. (D)
The marriage is void. If Lito is indeed alive, his
marriage to Lita was never dissolved and they
can resume their marital relations at any time.
SUGGESTED ANSWER: Any answer is
correct. Under Art 390 of the Civil Code,
after an absence of seven years, it being
unknown whether or not the absentee still
lives, he shall be presumed dead doe all
purposes, except for those of succession.
This provision was not repealed by the
present Family Code. Applying this to the
problem, (A) may be correct. (B) may also be
correct. (C) and (D) may also be correct
under Art 41 of the Family Code.
Notes:
 The summary proceeding to judicially
declare a person presumptively dead under
art. 41 is not a special proceeding. Hence,
appeal in relation to decisions is made only
via Notice of Appeal (Republic vs. CA, GR
No. 163604, May 6, 2005).
 Judgments of summary proceedings under
FamCod are immediately final and
executory pursuant to art. 247. Hence, a
decision judicially declaring a person
presumptively dead is non-appealable. If
appealed to the CA, the latter has no
jurisdiction (Republic vs. Bernudes-Lorino,
449 SCRA 57, [2005]).
 The present spouse must exert SERIOUS
EFFORTS to locate the absent spouse.
EFFECTS OF VOIDABLE BIGAMOUS
MARRIAGE, DECLARATION OF NULIITY, AND
ANNULMENT
47
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VOIDABLE
BIGAMOUS DECLARATION ANNULMENT
MARRIAGE OF NULLITY
(ART. 41)
Status of Children
Children of ILLEGITIMATE Children
subsequent except art. 36 conceived or
marriage and art. 53 born before
conceived annulment
before its decree –
termination – LEGITIMATE
LEGITIMATE
Property relations
ACP/CPG shall be liquidated. Spouse who
contracted the marriage in bad faith, his/her share in
the net profits of the community property shall be
forfeited in favor of common children or if there are
none, children of the guilty spouse by previous
marriage or in default, the innocent spouse.
Donations Propter Nuptias
Shall remain VALID except:
a. If donee contracted the marriage in bad faith,
donations propter nuptias made to the donee
are revoked by operation of law.
b. If both spouses acted in bad faith, donations
propter nuptias made by one in favor of the
other are revoked by operation of law.
Insurance
If one spouse acted in bad faith, innocent spouse
may revoke his designation as beneficiary in the
insurance policy even if such designation be
stipulate irrevocable
Succession
If one spouse contracted the marriage in bad faith,
he shall be disqualified to inherit from the innocent
spouse both testate and intestate.
2011 Bar Exam Question
(30) X insured himself for P5 million,
designating Y, his wife, as his sole beneficiary.
The designation was irrevocable. A few years
later, X had their marriage annulled in court
on the ground that Y had an existing prior
marriage. X subsequently died, Is Y entitled to
the insurance benefits? (A) Yes, since the
insurance was not dependent on the marriage.
(B) Yes, since her designation as beneficiary
was irrevocable. (C) No, X’s designation of Y
is revoked by operation of law upon the
annulment of their marriage based on Y’s
fault. (D) Yes, since without judicial
revocation, X’s designation of Y remains valid
and binding.
2011 Bar Exam Question
(40) In gratitude, the groom’s parents made a
donation of a property in writing to the bride’s
parents shortly before their children’s
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
wedding. The donation was accepted. What is
the nature of the donation?
(A) It is an ordinary donation since it was
not given to the bride or groom.
(B) It is donation propter nuptias since it was
given with the marriage in mind. (C) It is an
indirect donation propter nuptias since the
bride would eventually inherit the property
from her parents. (D) It is a remunatory
donation.
Art. 42. The subsequent marriage referred to in
the preceding Article shall be automatically
terminated by the recording of the affidavit of
reappearance of the absent spouse, unless there
is a judgment annulling the previous marriage or
declaring it void ab initio.
A sworn statement of the fact and circumstances
of reappearance shall be recorded in the civil
registry of the residence of the parties to the
subsequent marriage at the instance of any
interested person, with due notice to the spouses
of the subsequent marriage and without prejudice
to the fact of reappearance being judicially
determined in case such fact is disputed. (n)
Art. 43. The termination of the subsequent
marriage referred to in the preceding Article
shall produce the following effects:
(1) The children of the subsequent
marriage conceived prior to its termination
shall be considered legitimate;
(2) The absolute community of property or
the conjugal partnership, as the case may
be, shall be dissolved and liquidated, but if
either spouse contracted said marriage in
bad faith, his or her share of the net profits
of the community property or conjugal
partnership property shall be forfeited in
favor of the common children or, if there are
none, the children of the guilty spouse by a
previous marriage or in default of children,
the innocent spouse;
(3) Donations by reason of marriage shall
remain valid, except that if the donee
contracted the marriage in bad faith, such
donations made to said donee are revoked
by operation of law;
(4) The innocent spouse may revoke the
designation of the other spouse who acted
in bad faith as beneficiary in any insurance
policy, even if such designation be
stipulated as irrevocable; and
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(5) The spouse who contracted the
subsequent marriage in bad faith shall be
disqualified to inherit from the innocent
spouse by testate and intestate succession.
(n)
Art. 44. If both spouses of the subsequent
marriage acted in bad faith, said marriage shall
be void ab initio and all donations by reason of
marriage and testamentary dispositions made by
one in favor of the other are revoked by operation
of law. (n)
Art. 45. A marriage may be annulled for any of
the following causes, existing at the time of
the marriage:
(1) That the party in whose behalf it is sought to
have the marriage annulled was eighteen years
of age or over but below twenty-one, and the
marriage was solemnized without the consent of
the parents, guardian or person having
substitute parental authority over the party, in
that order, unless after attaining the age of
twenty-one, such party freely cohabited with the
other and both lived together as husband and
wife;
(2) That either party was of unsound mind,
unless such party after coming to reason, freely
cohabited with the other as husband and wife;
(3) That the consent of either party was
obtained by fraud, unless such party afterwards,
with full knowledge of the facts constituting the
fraud, freely cohabited with the other as
husband and wife;
(4) That the consent of either party was
obtained by force, intimidation or undue
influence, unless the same having disappeared
or ceased, such party thereafter freely
cohabited with the other as husband and wife;
(5) That either party was physically incapable of
consummating the marriage with the other, and
such incapacity continues and appears to be
incurable; or
(6) That either party was afflicted with a
sexually-transmissible disease found to be
serious and appears to be incurable. (85a)
Marriage; Annulment; Grounds (2009)
No.XII. Emmanuel and Margarita, American citizens
and employees of the U.S. State Department, got
married in the African state of Kenya where sterility is a
ground for annulment of marriage. Thereafter, the
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
spouses were assigned to the U.S. Embassy in Manila.
On the first year of the spouses’ tour of duty in the
Philippines, Margarita filed an annulment case against
Emmanuel before a Philippine court on the ground of
her husband’s sterility at the time of the celebration of
the marriage.
(B). Assume Emmanuel and Margarita are both
Filipinos. After their wedding in Kenya, they come back
and take up residence in the Philippines. Can their
marriage be annulled on the ground of Emmanuel’s
sterility? Explain. (3%)
SUGGESTED ANSWER: No, the marriage cannot be
annulled under the Philippine law. Sterility is not a
ground for annulment of marriage under Article 45 of
the Family Code.
ALTERNATIVE ANSWER: No, the marriage cannot be
annulled in the Philippines. The Philippine court shall
have jurisdiction over the action to annul the marriage
not only because the parties are residents of the
Philippines but because they are Filipino citizens. The
Philippine court, however, shall apply the law of the
place where the marriage was celebrated in
determining its formal validity (Article 26, FC; Article 17,
NCC).
Since the marriage was celebrated in Kenya in
accordance with Kenyan law, the formal validity of such
marriage is governed by Kenyan law and any issue as
to the formal validity of that marriage shall be
determined by applying Kenyan law and not Philippine
law.
However, while Kenyan law governs the formal validity
of the marriage, the legal capacity of the Filipino parties
to the marriage is governed not by Kenyan law but by
Philippine law (Article 15, NCC). Sterility of a party as a
ground for the annulment of the marriage is not a
matter of form but a matter of legal capacity. Hence,
the Philippine court must apply Phillippine law in
determining the status of the marriage on the ground of
absence or defect in the legal capacity of the Filipino
parties. Since sterility does not constitute absence or
defect in the legal capacity of the parties under
Philippine law, there is no ground to declare void or
annul the marriage. Hence, the Philippine court has to
deny the petition.
2012 Bar Exam Question
19. Ricky and Princess were sweethearts.
Princess became pregnant. Knowing that
Ricky is preparing for the examinations,
Marforth, a lawyer and cousin of Princess,
threatened Ricky with the filing of a complaint
for immorality in the Supreme Court, thus
preventing him from taking examinations
unless he marries Princess. As a consequence
of the threat, Ricky married Princess. Can the
marriage be annulled on the ground of
intimidation under Article 45 of the Family
Code? Choose the best answer. a) Yes, because
without the threat, Ricky would not have
married Princess. b) Yes, because the threat to
enforce the claim of Princess vitiates the
consent of Ricky in contracting the marriage.
c) No, because the threat made by Marforth
49
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is just and legal. d) No, because Marforth is
not a party to the contract of marriage
between Princess and Ricky.
2011 Bar Exam Question
(63) Baldo, a rejected suitor, intimidated Judy
into marrying him. While she wanted to
question the validity of their marriage two
years after the intimidation ceased, Judy
decided in the meantime to freely cohabit with
Baldo. After more than 5 years following their
wedding, Judy wants to file a case for
annulment of marriage against Baldo on
ground of lack of consent. Will her action
prosper? (A) Yes, the action for annulment is
imprescriptible. (B) No, since the marriage
was merely voidable and Judy ratified it by
freely cohabiting with Baldo after the force
and intimidation had ceased. (C) No, since
the action prescribed 5 years from the date of
the celebration of the marriage. (D) Yes,
because the marriage was celebrated without
Judy's consent freely given.
QA. Manuel came to Manila and married
Marianne. Unknown to Marianne, Manuel had
been previously convicted in Palawan of theft and
served time for it. After Marianne learned of his
previous conviction, she stopped living with him.
Can Marianne seek the annulment of the
marriage based on Manuel’s nondisclosure of his
previous crime?
A. No, since the assumption is that marriage
forgives all past wrongs.
B. Yes, since the non-disclosure of that crime is
the equivalent of fraud, which is a ground for
annulment.
C. No, in case of doubt, the law must be
construed to preserve the institution of marriage.
D. No, since Manuel already served the penalty
for his crime.
Marriage; Annulment; Grounds (2007) No.
VII. Write "TRUE" if the statement is true or
"FALSE" if the statement is false. If the
statement is FALSE, state the reason. (2%
each).
(4). The day after John and Marsha got married,
John told her that he was impotent. Marsha
continued to live with John for 2 years. Marsha is
now estopped from filing an annulment case
against John. SUGGESTED ANSWER: FALSE.
Marsha is not estopped from filing an
annulment case against John on the ground
of his impotence, because she learned of his
impotence after the celebration of the
marriage and not before. Physical incapacity
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
to consummate is a valid ground for the
annulment of marriage if such incapacity was
existing at the time of the marriage, continues
and appears to be incurable. The marriage
may be annulled on this ground within five
years from its celebration
NOTES:
GROUNDS FOR ANNULMENT (clue words):
1. Lack of parental consent;
2. Either party is of unsound mind;
3. Fraudulent means of obtaining consent;
4. Force, intimidation, or undue influence;
5. Physical incapability to consummate
marriage—
Requisites:
a. Impotency exists at the time of the
celebration of the marriage;
b. Continues (permanent);
c. Appears to be incurable;
d. Unknown to the other spouse;
e. The other spouse must not be
impotent.
Doctrine of Triennial Cohabitation:
Presumption that the husband is impotent
should the wife still remain a virgin after 3
years of living together with her husband.
6. Affliction of sexually transmissible disease--
Requisites:
a. Existing at the time of the
marriage;
b. Sexually transmissible; serious;
and
c. Appears to be incurable.
Marriage; Annulment; Grounds (1991)
One of the grounds for annulment of marriage is that
either party, at the time of their marriage was afflicted
with a sexually transmissible disease which appears
incurable. Two (2) years after their marriage, which took
place on 10 October 1988, Bethel discovered that her
husband James has a sexually-transmissible disease
which he contracted even prior to their marriage although
James did not know it himself until he was examined two
[2) years later when a child was already born to them.
Bethel sues James for annulment of their marriage.
James opposes the annulment on the ground that he did
not even know that he had such a disease so that there
was no fraud or bad faith on his part. Decide.
B. Suppose that both parties at the time of their marriage
were similarly afflicted with sexually-transmissible
diseases, serious and incurable, and both knew of their
respective infirmities, can Bethel or James sue for
annulment of their marriage?
SUGGESTED ANSWER:
50
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A. The marriage can be annulled, because good faith is
not a defense when the ground is based upon sexually-
transmissible disease on the part of either party.
SUGGESTED ANSWER:
B. Yes, the marriage can still be annulled because the
fact that both of them are afflicted with sexually-
transmissible diseases does not efface or nullify the
ground.
Alternative Answer:
B. No, the marriage can no longer be annulled, because
the fact that both were afflicted and that both knew of
their respective infirmities constitutes a waiver of that
ground.
2011 Bar Exam
(88) Josie, 18, married Dante, 25, without her
parents’ knowledge and consent, and lived
with him. After a year, Josie returned to her
parents’ home, complained of the unbearable
battering she was getting from Dante, and
expressed a desire to have her marriage with
him annulled. Who may bring the action? (A)
Dante. (B) Her parents. (C) Josie herself. (D)
The State.
2011 Bar Exam
(95) Conrad and Linda, both 20 years old,
applied for a marriage license, making it
appear that they were over 25. They married
without their parents’ knowledge before an
unsuspecting judge. After the couple has been
in cohabitation for 6 years, Linda’s parents
filed an action to annul the marriage on
ground of lack of parental consent. Will the
case prosper? (A) No, since only the couple
can question the validity of their marriage
after they became 21 of age; their
cohabitation also convalidated the
marriage. (B) No, since Linda’s parents made
no allegations that earnest efforts have been
made to come to a compromise with Conrad
and Linda and which efforts failed. (C) Yes,
since the marriage is voidable, the couple
being below 21 years of age when they
married. (D) Yes, since Linda’s parents never
gave their consent to the marriage.
Marriage; Grounds; Declaration of Nullity:
Annulment: Legal Separation: Separation of Property
(2003)
Which of the following remedies, i.e., (a) declaration of
nullity of marriage, (b) annulment of marriage, (c) legal
separation, and/or (d) separation of property, can an
aggrieved spouse avail himself/herself of-
(i) If the wife discovers after the marriage that her
husband has “AIDS”.
(ii) If the wife goes (to) abroad to work as a nurse
and refuses to come home after the expiration of her
three-year contract there.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(iii) If the husband discovers after the marriage that
his wife has been a prostitute before they got married.
(iv) If the husband has a serious affair with his
secretary and refuses to stop notwithstanding advice from
relatives and friends.
(v) If the husband beats up his wife every time he
comes home drunk. 5%
SUGGESTED ANSWER:
(i) Since AIDS is a serious and incurable sexually-
transmissible disease, the wife may file an action for
annulment of the marriage on this ground whether such
fact was concealed or not from the wife, provided that the
disease was present at the time of the marriage. The
marriage is voidable even though the husband was not
aware that he had the disease at the time of marriage.
(ii) If the wife refuses to come home for three (3) months
from the expiration of her contract, she is presumed to
have abandoned the husband and he may file an action
for judicial separation of property. If the refusal continues
for more than one year from the expiration of her
contract, the husband may file the action for legal
separation under Art. 55 (10) of the Family Code on the
ground of abandonment of petitioner by respondent
without justifiable cause for more than one year. The wife
is deemed to have abandoned the husband when she
leaves the conjugal dwelling without any intention of
returning (Article 101, FC). The intention not to return
cannot be presumed during the 3-year period of her
contract.
(iii) If the husband discovers after the marriage that his
wife was a prostitute before they got married, he has no
remedy. No misrepresentation or deceit as to character,
health, rank, fortune or chastity shall constitute fraud as
legal ground for an action for the annulment of marriage
(Article 46 FC).
(iv) The wife may file an action for legal separation. The
husband’s sexual infidelity is a ground for legal
separation (Article 55, FC). She may also file an action
for judicial separation of property for failure of her
husband to comply with his martial duty of fidelity (Article
135 (4), 101, FC).
(v) The wife may file an action for legal separation on the
ground of repeated physical violence on her person
(Article 55 (1), FC). She may also file an action for judicial
separation of property for failure of the husband to
comply with his marital duty of mutual respect (Article 135
(4), Article 101, FC). She may also file an action for
declaration of nullity of the marriage if the husband’s
behavior constitute psychological incapacity existing at
the time of the celebration of marriage.
Marriage; Grounds; Nullity; Annulment; Legal
Separation (1997)
Under what conditions, respectively, may drug addiction
be a ground, if at all, (a) for a declaration of nullity of
marriage,
51
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(b) for an annulment of the marriage contract, and (c) for wanted to seek judicial annulment on that ground. You
legal separation between the spouses? were consulted and asked to prepare the proper
SUGGESTED ANSWER: complaint. What advice would you give G's parents?
(a) Declaration of nullity of marriage: Explain your answer.
1) The drug addiction must amount to SUGGESTED ANSWER:
psychological incapacity to comply with the essential G himself should file the complaint under Article 45 of the
obligations of marriage; Family Code, and no longer the parents because G is
2) It must be antecedent (existing at the time of already 22 years of age.
marriage), grave and incurable:
3) The case must be filed before August 1, 1998. Marriage; Annulment; Proper Party (1995)
Because if they got married before August 3, 1998, it Yvette was found to be positive for HIV virus, considered
must be filed before August 1, 1998. sexually transmissible, serious and incurable. Her
boyfriend Joseph was aware of her condition and yet
(b) Annulment of the Marriage Contract: 1) The drug married her. After two (2) years of cohabiting with Yvette,
addiction must be concealed; 2) It must exist at the time and in his belief that she would probably never be able to
of marriage; 3) There should be no cohabitation with full bear him a healthy child, Joseph now wants to have his
knowledge of the drug addiction; 4) The case is filed marriage with Yvette annulled. Yvette opposes the suit
within five (5) years from discovery. contending that Joseph is estopped from seeking
annulment of their marriage since he knew even before
(c) Legal Separation; 1) There should be no condonation their marriage that she was afflicted with HIV virus. Can
or consent to the drug addiction; 2) The action must be the action of Joseph for annulment of his marriage with
filed within five (5) years from the occurrence of the Yvette prosper? Discuss fully.
cause. SUGGESTED ANSWER:
No, Joseph knew that Yvette was HIV positive at the time
3) Drug addiction arises during the marriage and of the marriage. He is, therefore, not an injured party. The
not at the time of marriage. FC gives the right to annul the marriage only to an injured
party. [Art. 47 (5), FC]
ALTERNATIVE ANSWER:
ARTICLE 45 ARTICLE 46 The action for annulment can prosper because the
prescriptive period of five (5) years has not yet lapsed.
The STD is a ground The STD is a type of [Art. 45 (6), FC].
for annulment fraud which in turn is a
ground for annulment
The STD does not The STD must be
have to be concealed concealed Art. 46. Any of the following circumstances
The STD must be The STD does not have shall constitute fraud referred to in Number 3
serious and appears to to be serious and of the preceding Article:
be incurable appears to be incurable (1) Non-disclosure of a previous conviction
The STD itself is the It is the concealment, by final judgment of the other party of a
ground for annulment and not the STD, which crime involving moral turpitude;
gives rise to the
annulment
(2) Concealment by the wife of the fact that
at the time of the marriage, she was
NOTE: Refer to AM No. 02-11-10-SC for the Rule
pregnant by a man other than her husband;
on Declaration of Absolute Nullity of Void
Marriages and Annulment of Voidable Marriages
(Remedial Law Reviewer). (3) Concealment of sexually transmissible
disease, regardless of its nature, existing at
This is however, excluded from the the time of the marriage; or
coverage.
(4) Concealment of drug addiction, habitual
In a nullity of marriage case, the prior alcoholism or homosexuality or lesbianism
investigation to determine for collusion is a existing at the time of the marriage.
condition sine qua non for further proceedings in
the event the defendant does not answer. This is No other misrepresentation or deceit as to
true even if during the hearing the fiscal character, health, rank, fortune or chastity shall
participated and cross-examined the witnesses constitute such fraud as will give grounds for
(Corpus vs. Ochoterena, 435 SCRA 446). action for the annulment of marriage. (86a)

Marriage; Annulment; Proper Party (1990) Note.

D and G, age 20 and 19, respectively, and both single, Concealment of a woman that she is no longer a virgin
eloped and got married to each other without parental is not among the enumeration hence does not
consent in the case of G, a teenaged student of an constitute fraud.
exclusive college for girls. Three years later, her parents
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 52
____________________________________________________________________________________________________
Prescription of Actions (1996)
2) Bert and Baby were married to each other on
December 23, 1988. Six months later, she discovered
that he was a drug addict. Efforts to have him
rehabilitated were unsuccessful. Can Baby ask for
annulment of marriage, or legal separation? Explain.
SUGGESTED ANSWER:
No, Baby cannot ask for annulment of her marriage or for
legal separation because both these actions had already
prescribed.
While concealment of drug addiction existing at the time
of marriage constitutes fraud under Art. 46 of the FC
which makes the marriage voidable under Art. 45 of the
FC, the action must, however, be brought within 5 years
from the discovery thereof under Article 47(3), FC, Since examine the goods and freely entered into the
the drug addiction of Bert was discovered by Baby in
June 1989, the action had already prescribed in June of
1994. Although drug addiction is a ground for legal
separation under Art. 55(5) and Art. 57 of the FC requires (13) Manuel came to Manila and married
that the action must be brought within 5 years from the
occurrence of the cause. Since Bert had been a drug
addict from the time of the celebration of the marriage,
the action for legal separation must have been brought
not later than 23 December 1993. Hence, Baby cannot,
now, bring the action for legal separation.
2012 Bar Exam Question
29. The following constitute the different
circumstances or case of fraud which will
serves as ground for the annulment of a
marriage, except? a) Non-disclosure of the
previous conviction by final judgment of the
other party of a crime involving moral
turpitude. b) Concealment of a sexually-
transmissible disease, regardless of its nature,
existing at the time of the marriage. c)
Concealment of drug addiction, habitual
alcoholism, homosexuality or lesbianism
existing at the time of marriage. d)
Concealment by the wife or the husband of
the fact of sexual relations prior to the
marriage.
Marriage; Annulment; Parties (2012)
No.IX.b) A petition for declaration of nullity
of a void marriage can only be filed by either
the husband or the wife? Do you agree?
Explain your answer. (5%) SUGGESTED
ANSWER: Yes, I agree. Under the rules
promulgated by the Supreme Court, a
direct action for declaration of nullity
may only be filed by any of the spouses.
ALTERNATIVE SUGGESTED ANSWER: No, I
do not agree. There are others who may file a
petition for declaration of nullity such as the
other spouse in bigamous marriages.
2011 Bar Exam Question
(8) Rene and Lily got married after a brief
courtship. After one month, Lily discovered
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
that while Rene presented himself as a macho
man he was actually gay. He would not go to
bed with her. He kept obscene magazines of
nude men and always sought the company of
handsome boys. What legal remedy does Lily
have? (A) She can file an action for
annulment of marriage on ground of fraud.
(B) She can seek a declaration of nullity of the
marriage based on Rene’s psychological
incapacity. (C) She can go abroad and file for
divorce in a country that can grant it. (D) She
has none since she had the opportunity to
marriage.
2011 Bar Exam Question
Marianne. Unknown to Marianne, Manuel had
been previously convicted in Palawan of theft
and served time for it. After Marianne learned
of his previous conviction, she stopped living
with him. Can Marianne seek the annulment
of the arriage based on Manuel’s
nondisclosure of his previous crime? (A) No,
since the assumption is that marriage forgives
all past wrongs. (B) Yes, since the non-
disclosure of that crime is the equivalent of
fraud, which is a ground for annulment. (C)
No, in case of doubt, the law must be
construed to preserve the institution of
marriage. (D) No, since Manuel already served
the penalty for his crime.
Art. 47. The action for annulment of marriage
must be filed by the following persons and within
the periods indicated herein:
(1) For causes mentioned in number 1 of
Article 45 by the party whose parent or
guardian did not give his or her consent,
within five years after attaining the age of
twenty-one, or by the parent or guardian or
person having legal charge of the minor, at
any time before such party has reached the
age of twenty-one;
(2) For causes mentioned in number 2 of
Article 45, by the same spouse, who had no
knowledge of the other's insanity; or by any
relative or guardian or person having legal
charge of the insane, at any time before the
death of either party, or by the insane
spouse during a lucid interval or after
regaining sanity;
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(3) For causes mentioned in number 3 of
Article 45, by the injured party, within five
years after the discovery of the fraud;
(4) For causes mentioned in number 4 of
Article 45, by the injured party, within five
years from the time the force, intimidation
or undue influence disappeared or ceased;
(5) For causes mentioned in number 5 and
6 of Article 45, by the injured party, within
five years after the marriage. (87a)
Art. 48. In all cases of annulment or declaration of
absolute nullity of marriage, the Court shall order
the prosecuting attorney or fiscal assigned to it to
appear on behalf of the State to take steps to
prevent collusion between the parties and to take
care that evidence is not fabricated or
suppressed.
In the cases referred to in the preceding
paragraph, no judgment shall be based upon a
stipulation of facts or confession of judgment.
(88a)
2011 Bar Exam Question
(59) The wife filed a case of legal separation
against her husband on the ground of sexual
infidelity without previously exerting earnest
efforts to come to a compromise with him. The
judge dismissed the case for having been filed
without complying with a condition precedent.
Is the dismissal proper? (A) No, efforts at a
compromise will only deepen the wife’s
anguish. (B) No, since legal separation like
validity of marriage is not subject to
compromise agreement for purposes of
filing. (C) Yes, to avoid a family feud that is
hurtful to everyone. (D) Yes, since the dispute
could have been settled with the parties
agreeing to legal separation.
Art. 49. During the pendency of the action and in
the absence of adequate provisions in a written
agreement between the spouses, the Court shall
provide for the support of the spouses and the
custody and support of their common children.
The Court shall give paramount consideration to
the moral and material welfare of said children
and their choice of the parent with whom they
wish to remain as provided to in Title IX. It shall
also provide for appropriate visitation rights of the
other parent. (n)
Art. 50. The effects provided for by paragraphs
(2), (3), (4) and (5) of Article 43 and by Article 44
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
shall also apply in the proper cases to marriages
which are declared void ab initio or annulled by
final judgment under Articles 40 and 45.
The final judgment in such cases shall provide for
the liquidation, partition and distribution of the
properties of the spouses, the custody and
support of the common children, and the delivery
of their presumptive legitimes, unless such
matters had been adjudicated in previous judicial
proceedings.
All creditors of the spouses as well as of the
absolute community or the conjugal partnership
shall be notified of the proceedings for liquidation.
In the partition, the conjugal dwelling and the lot
on which it is situated, shall be adjudicated in
accordance with the provisions of Articles 102
and 129.
Art. 51. In said partition, the value of the
presumptive legitimes of all common children,
computed as of the date of the final judgment of
the trial court, shall be delivered in cash, property
or sound securities, unless the parties, by mutual
agreement judicially approved, had already
provided for such matters.
The children or their guardian or the trustee of
their property may ask for the enforcement of the
judgment.
The delivery of the presumptive legitimes herein
prescribed shall in no way prejudice the ultimate
successional rights of the children accruing upon
the death of either of both of the parents; but the
value of the properties already received under the
decree of annulment or absolute nullity shall be
considered as advances on their legitime. (n)
Art. 52. The judgment of annulment or of absolute
nullity of the marriage, the partition and
distribution of the properties of the spouses and
the delivery of the children's presumptive
legitimes shall be recorded in the appropriate civil
registry and registries of property; otherwise, the
same shall not affect third persons. (n)
Succession; Death; Presumptive Legitime (1991)
a) For purposes of succession, when is death deemed to
occur or take place? b) May succession be conferred by
contracts or acts inter
vivos? Illustrate. c) Is there any law which allows the
delivery to
compulsory heirs of their presumptive legitimes during
the lifetime of their parents? If so, in what instances?
SUGGESTED ANSWER:
54
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A. Death as a fact is deemed to occur when it actually
takes place. Death is presumed to take place in the
circumstances under Arts. 390-391 of the Civil Code. The
time of death is presumed to be at the expiration of the
10¬year period as prescribed by Article 390 and at the
moment of disappearance under Article 391.
B. Under Art. 84 of the Family Code amending Art 130
of the Civil Code, contractual succession is no longer
possible since the law now requires that donations of
future property be governed by the provisions on the
testamentary succession and formalities of wills.
ALTERNATIVE ANSWER:
B. In the case of Coronado vs.CA(l91 SCRA81), it was
ruled that no property passes under a will without its
being probated, but may under Article 1058 of the Civil
Code of 1898, be sustained as a partition by an act inter
vivos
[Many-Oy vs. CA 144SCRA33).
And in the case of Chavez vs, IAC 1191 SCRA211), it
was ruled that while the law prohibits contracts upon
future inheritance, the partition by the parent, as provided
in Art. 1080 is a case expressly authorized by law. A
person has two options in making a partition of his estate:
either by an act inter vivos or by will. If the partition is by
will, it is imperative that such partition must be executed
in accordance with the provisions of the law on wills; if by
an act inter vivos, such partition may even be oral or
written, and need not be in the form of a will, provided the
legitime is not prejudiced.
"Where several sisters execute deeds of sale over their 1
/6 undivided share of the paraphernal property of their
only giving her authority thereto but even signing said
deeds, there is a valid partition inter vivos between the
mother and her children which cannot be revoked by the
mother. Said deeds of sale are not contracts entered into
with respect to future inheritance.
"It would be unjust for the mother to revoke the sales to a
son and to execute a simulated sale in favor of a
daughter who already benefited by the partition."
SUGGESTED ANSWER:
C. Yes, under Arts. 51 and 52 of the New Family Code. In
case of legal separation, annulment of marriage,
declaration of nullity of marriage and the automatic
termination of a subsequent marriage by the
reappearance of the absent spouse, the common or
community property of the spouses shall be dissolved
and liquidated.
Art, 51. In said partition, the value of the presumptive
legitimes of all common children, computed as of the date
of the final judgment of the trial court, shall be delivered in
cash, property or sound securities, unless the parties, by
mutual agreement, judicially approved, had already
provided for such matters.
The children of their guardian, or the trustee of their
property, may ask for the enforcement of the judgment.
The delivery of the presumptive legitimes herein
prescribed shall in no way prejudice the ultimate
successional rights of the children accruing upon the
death of either or both of the parents; but the value of the
properties already received under the decree of
annulment or absolute nullity shall be considered as
advances on their legitime.
Art. 52. The judgment of annulment or of absolute nullity
of the marriage, the partition and distribution of the
properties of the spouses, and the delivery of the
children's presumptive legitimes shall be recorded in the
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
appropriate civil registry and registries of property;
otherwise, the same shall not affect third persons.
Presumptive Legitime (1999)
What do you understand by "presumptive legitime", in
what case or cases must the parent deliver such legitime
to the children, and what are the legal effects in each
case if the parent fails to do so? (5%)
SUGGESTED ANSWER:
PRESUMPTIVE LEGITIME is not defined in the law. Its
definition must have been taken from Act 2710, the Old
Divorce Law, which required the delivery to the legitimate
children of "the equivalent of what would have been due
to them as their legal portion if said spouse had died
intestate immediately after the dissolution of the
community of property." As used in the Family Code,
presumptive legitime is understood as the equivalent of
the legitimate children's legitimes assuming that the
spouses had died immediately after the dissolution of
the community of property.
Presumptive legitime is required to be delivered to the
common children of the spouses when the marriage is
annulled or declared void ab initio and possibly, when the
conjugal partnership or absolute community is dissolved
as in the case of legal separation. Failure of the parents
to deliver the presumptive legitime will make their
subsequent marriage null and void under Article 53 of the
Family Code.
Art. 53. Either of the former spouses may marry
again after compliance with the requirements of
the immediately preceding Article; otherwise, the
subsequent marriage shall be null and void.
Marriage; Annulment; Effects; Requisites Before
Remarriage (1990)
The marriage of H and W was annulled by the competent
court. Upon finality of the judgment of nullity. H began
looking for his prospective second mate. He fell in love
with a sexy woman S who wanted to be married as soon
as possible, i.e., after a few months of courtship. As a
young lawyer, you were consulted by H,
(a) How soon can H be joined in lawful wedlock to his
girlfriend S? Under existing laws, are there certain
requisites that must be complied with before he can
remarry? What advice would you give H?
(b) Suppose that children were born from the union of H
and W, what would be the status of said children? Explain
your answer.
(c) If the subsequent marriage of H to S was
contracted before compliance with the statutory condition
for its validity, what are the rights of the children of the
first marriage (i.e., of H and W) and of the children of the
subsequent marriage (of H and S)?
SUGGESTED ANSWER:
(a) H, or either spouse for that matter, can marry again
after complying with the provisions of Article 52 of the
Family Code, namely, there must be a partition and
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distribution, of the properties of the spouses, and the executory shall be considered legitimate. Children
delivery of the conceived or born of the subsequent marriage
under Article 53 shall likewise be legitimate.
children's presumptive legitimes which should be
recorded
sexually-transmissible disease, found to be serious and
in the appropriate civil registry and registries of property. TITLE II
H
should be so advised. LEGAL SEPARATION
ALTERNATIVE ANSWER: for (a)
The following are the requisites prescribed by law and I Art. 55. A petition for legal separation may be
advice to H is to comply with them, namely: filed on any of the following grounds:
1) If either spouse contracted the marriage in bad
faith, his or her share of the net profits of the community
property : or conjugal partnership property shall be (1) Repeated physical violence or
forfeited in favor of the common children or, if there are grossly abusive conduct directed against
none, the children of the guilty spouse by a previous the petitioner, a common child, or a child of
marriage or, in default of children, the innocent spouse; the petitioner;
2) Donations by reason of marriage shall remain
valid except that if the donee contracted the marriage in
(2) Physical violence or moral pressure
bad faith, such donations made to said donee are
revoked by operation of law; to compel the petitioner to change religious
3) The spouse who contracted the subsequent or political affiliation;
marriage in bad faith shall be disqualified to inherit from
the innocent spouse by testate and intestate succession; (3) Attempt of respondent to corrupt or
4) If both spouses of the subsequent marriage induce the petitioner, a common child, or a
acted in bad faith all donations by reason of marriage and child of the petitioner, to engage in
testamentary dispositions made by one in favor of the
prostitution, or connivance in such
other are revoked by operation of law.
5) The judgment of annulment of the marriage, the corruption or inducement;
partition and distribution of the properties of the spouses,
and the delivery of the children's presumptive legitimes (4) Final judgment sentencing the
shall be recorded in the appropriate civil registry and respondent to imprisonment of more than
registers of property, (Articles 53. 52, 43. six years, even if pardoned;
44. Family Code).
SUGGESTED ANSWER:
(b) The children born from the union of H and W would be (5) Drug addiction or habitual
legitimate children if conceived or born before the decree alcoholism of the respondent;
of annulment of the marriage (under Art. 45 of the Family
Code) has become final and executory (Art. 54, Family (6) Lesbianism or homosexuality of the
Code}.
respondent;
SUGGESTED ANSWER:
(c) The children of the first marriage shall be considered
legitimate children if conceived or born before the (7) Contracting by the respondent of a
Judgment of annulment of the marriage of H and W has subsequent bigamous marriage, whether
become final and executory. Children conceived or born in the Philippines or abroad;
of the subsequent marriage shall likewise be legitimate
even if the marriage of H and S be null and void for failure
to comply with the requisites of Article 52 of the Family (8) Sexual infidelity or perversion;
Code (Article 53, Family Code). As legitimate children,
they have the following rights; (9) Attempt by the respondent against the
a) To bear the surnames of the father and the life of the petitioner; or
mother in conformity with the provisions of the Civil Code
on Surnames;
b) To receive support from their parents, their (10) Abandonment of petitioner by
ascendants, and in proper cases, their brothers and respondent without justifiable cause for
sisters, in conformity with the provisions of this Code on more than one year.
Support; and
c) To be entitled to the legitime and other For purposes of this Article, the term "child" shall
successional rights granted to them by the Civil Code include a child by nature or by adoption. (9a)\
(Article 174, Family Code).
Marriage; Legal Separation; Grounds; Prescriptive
Period (1994)
Art. 54. Children conceived or born before the Rosa and Ariel were married in the Catholic Church of
judgment of annulment or absolute nullity of the Tarlac, Tarlac on January 5. 1988. In 1990, Ariel went to
marriage under Article 36 has become final and
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 56
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Saudi Arabia to work. There, after being converted into
Islam, Ariel married Mystica, Rosa learned of the second
marriage of Ariel on January 1, 1992 when Ariel returned
to the Philippines with Mystica. Rosa filed an action for
legal separation on February 5, 1994, 1) Does Rosa have
legal grounds to ask for legal separation? 2) Has the
action prescribed?
SUGGESTED ANSWER:
1) a) Yes, the abandonment of Rosa by Ariel for more
than one (1) year is a ground for legal separation unless
upon returning to the Philippines, Rosa agrees to cohabit
with Ariel which is allowed under the Muslim Code. In this
case, there is condonation. b) Yes. The contracting of a
subsequent bigamous marriage whether in the
Philippines or abroad is a ground for legal separation
under Article 55(7) of the Family Code. Whether the
second marriage is valid or not, Ariel having converted
into Islam, is immaterial.
SUGGESTED ANSWER:
2) No. Under Article 57 of the Family Code, the
aggrieved spouse must file the action within five (5) years
from the occurrence of the cause. The subsequent
marriage of Ariel could not have occurred earlier than
1990, the time he went to Saudi Arabia. Hence, Rosa has
until 1995 to bring the action under the Family Code.
Marriage; Legal Separation; Mutual guilt (2006)
Saul, a married man, had an adulterous relation with
Tessie. In one of the trysts, Saul's wife, Cecile, caught
them in flagrante. Armed with a gun, Cecile shot Saul in a
fit of extreme jealousy, nearly killing him. Four (4) years
after the incident, Saul filed an action for legal separation
against Cecile on the ground that she attempted to kill
him.
(1) If you were Saul's counsel, how will you argue his
case? (2.5%)
SUGGESTED ANSWER:
As the counsel of Saul, I will argue that an attempt by the
wife against the life of the husband is one of the grounds
enumerated by the Family Code for legal separation and
there is no need for criminal conviction for the ground to
be invoked (Art. 55, par. 9, Family Code).
(2) If you were the lawyer of Cecile, what will be your
defense? (2.5%)
SUGGESTED ANSWER:
As the counsel of Cecile, I will invoke the adultery of Saul.
Mutual guilt is a ground for the dismissal of an action for
legal separation (Art. 56, par. 4, Family Code). The rule is
anchored on a well-established principle that one must
come to court with clean hands.
(3) If you were the judge, how will you decide the case?
(5%)
SUGGESTED ANSWER:
If I were the judge, I will dismiss the action on the ground
of mutual guilt of the parties. The Philippine Constitution
protects marriage as an inviolable social institution (Art.
XV, Sec. 2, 1987 Constitution). An action for legal
separation involves public interest and no such decree
should be issued if any legal obstacle thereto appears on
record. This is in line with the policy that in case of doubt,
the court shall uphold the validity and sanctity of marriage
the preceding Article, only the properties acquired by both
(Brown v. Yambao, G.R. No. L-10699, October 18, 1957).
Art. 56. The petition for legal separation shall
be denied on any of the following grounds:
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(1) Where the aggrieved party has condoned
the offense or act complained of;
(2) Where the aggrieved party has consented to
the commission of the offense or act
complained of;
(3) Where there is connivance between the
parties in the commission of the offense or act
constituting the ground for legal separation;
(4) Where both parties have given ground for
legal separation;
(5) Where there is collusion between the parties
to obtain decree of legal separation; or
(6) Where the action is barred by prescription.
(100a)
NOTE: The following should be added to the
grounds for the denial of the petition of for legal
separation—
1. Death of either party during the pendency
of the case (Lapuz-Sy vs. Eufemio, 43
SCRA 177, [1972]);
2. Reconciliation of the spouses during the
pendency of the case.
Art. 57. An action for legal separation shall be
filed within five years from the time of the
occurrence of the cause. (102)
Marriage; Legal Separation; Prescription
(2012) No.IV.a) After they got married, Nikki
discovered that Christian was having an
affair with another woman. But Nikki
decided to give it a try and lived with him for
two (2) years. After two (2) years, Nikki filed
an action for legal separation on the ground
of Christian’s sexual infidelity. Will the
action prosper? Explain. (5%) SUGGESTED
ANSWER: Although the action for legal
separation has not yet prescribed, the
prescriptive period being 5 years, if
Obecido’s affair with another woman was
ended when Nikki decided to live with
him again, Nikki’s action will not prosper
on account of condonation. However, if
such affair is still continuing, Nikki’s
action would prosper because the action
will surely be within five (5) years from
the commission of the latest act of sexual
infidelity. Every act of sexual liaison is a
ground for legal separation.
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Marriage; Legal Separation; Prescription
(2007) No.VII. Write "TRUE" if the statement
is true or "FALSE" if the statement is false. If
the statement is FALSE, state the reason.
(2% each). (2). If a man commits several acts
of sexual infidelity, particularly in 2002,
2003, 2004, 2005, the prescriptive period to
file for legal separation runs from 2002.
SUGGESTED ANSWER:
FALSE. The five-year prescriptive period for
filing legal separation runs from the
occurrence of sexual infidelity committed in
2002 runs from 2002, for the sexual infidelity
committed in 2003, the prescriptive period
runs from 2003 and so on. The action for legal
separation for the last act of sexual infidelity
in 2005 will prescribe in 2010.
Art. 58. An action for legal separation shall in no
case be tried before six months shall have
elapsed since the filing of the petition. (103)
NOTE: Under RA 9262, sec. 19—
 Sec. 19: Legal Separation Cases- In cases of
legal separation, where violence as specified in
this Act is alleged, art. 58 of the FamCod shall
not apply. The court shall proceed in the main
case and other incidents of the case as soon as
possible. The hearing on any application for a
protection order filed by petitioner must be
conducted within the mandatory period
specified in this Act.
Art. 59. No legal separation may be decreed
unless the Court has taken steps toward the
reconciliation of the spouses and is fully satisfied,
despite such efforts, that reconciliation is highly
improbable. (n)
Art. 60. No decree of legal separation shall be
based upon a stipulation of facts or a confession
of judgment.
In any case, the Court shall order the prosecuting
attorney or fiscal assigned to it to take steps to
prevent collusion between the parties and to take
care that the evidence is not fabricated or
suppressed. (101a)
Art. 61. After the filing of the petition for legal
separation, the spouses shall be entitled to live
separately from each other.
The court, in the absence of a written agreement
between the spouses, shall designate either of
them or a third person to administer the absolute
community or conjugal partnership property. The
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
administrator appointed by the court shall have
the same powers and duties as those of a
guardian under the Rules of Court. (104a)
Art. 62. During the pendency of the action for
legal separation, the provisions of Article 49 shall
likewise apply to the support of the spouses and
the custody and support of the common children.
(105a)
Art. 63. The decree of legal separation shall
have the following effects:
(1) The spouses shall be entitled to live
separately from each other, but the marriage
bonds shall not be severed;
(2) The absolute community or the conjugal
partnership shall be dissolved and liquidated but
the offending spouse shall have no right to any
share of the net profits earned by the absolute
community or the conjugal partnership, which
shall be forfeited in accordance with the
provisions of Article 43(2);
(3) The custody of the minor children shall be
awarded to the innocent spouse, subject to the
provisions of Article 213 of this Code; and
(4) The offending spouse shall be disqualified
from inheriting from the innocent spouse by
intestate succession. Moreover, provisions in
favor of the offending spouse made in the will of
the innocent spouse shall be revoked by
operation of law. (106a)
Art. 64. After the finality of the decree of legal
separation, the innocent spouse may revoke the
donations made by him or by her in favor of the
offending spouse, as well as the designation of
the latter as beneficiary in any insurance policy,
even if such designation be stipulated as
irrevocable. The revocation of the donations shall
be recorded in the registries of property in the
places where the properties are located.
Alienations, liens and encumbrances registered in
good faith before the recording of the complaint
for revocation in the registries of property shall be
respected. The revocation of or change in the
designation of the insurance beneficiary shall take
effect upon written notification thereof to the
insured.
The action to revoke the donation under this
Article must be brought within five years from the
time the decree of legal separation become final.
(107a)
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Art. 65. If the spouses should reconcile, a
corresponding joint manifestation under oath duly
signed by them shall be filed with the court in the
same proceeding for legal separation. (n)
Art. 66. The reconciliation referred to in the
preceding Articles shall have the following
consequences:
(1) The legal separation proceedings, if still
pending, shall thereby be terminated at
whatever stage; and
(2) The final decree of legal separation shall be
set aside, but the separation of property and
any forfeiture of the share of the guilty spouse
already effected shall subsist, unless the
spouses agree to revive their former property
regime.
The court's order containing the foregoing shall
be recorded in the proper civil registries. (108a)
Art. 67. The agreement to revive the former
property regime referred to in the preceding
Article shall be executed under oath and shall
specify:
(1) The properties to be contributed anew
to the restored regime;
(2) Those to be retained as separated
properties of each spouse; and
(3) The names of all their known creditors,
their addresses and the amounts owing to
each.
The agreement of revival and the motion for its
approval shall be filed with the court in the same
proceeding for legal separation, with copies of
both furnished to the creditors named therein.
After due hearing, the court shall, in its order, take
measure to protect the interest of creditors and
such order shall be recorded in the proper
registries of properties.
The recording of the ordering in the registries of
property shall not prejudice any creditor not listed or
not notified, unless the debtor-spouse has sufficient
separate properties to satisfy the creditor's claim.
(195a, 108a)
NOTE: See also AM No. 02-11-11-SC, the
Proposed Rule on Legal Separation found in
Remedial law Reviewer.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
It is however, EXCLUDED from the
coverage.
TITLE III
RIGHTS AND OBLIGATIONS BETWEEN
HUSBAND AND WIFE
OBLIGATIONS OF HUSBAND AND WIFE: (clue
words)
1. Live together;
2. Observe mutual love, respect and fidelity;
3. Render mutual help and support;
4. Management of the household;
5. Fix the family domicile;
6. Joint responsibility for the support of the
family.
Art. 68. The husband and wife are obliged to live
together, observe mutual love, respect and
fidelity, and render mutual help and support.
(109a)
Art. 69. The husband and wife shall fix the family
domicile. In case of disagreement, the court shall
decide.
The court may exempt one spouse from living
with the other if the latter should live abroad or
there are other valid and compelling reasons for
the exemption. However, such exemption shall
not apply if the same is not compatible with the
solidarity of the family. (110a)
Art. 70. The spouses are jointly responsible for
the support of the family. The expenses for such
support and other conjugal obligations shall be
paid from the community property and, in the
absence thereof, from the income or fruits of their
separate properties. In case of insufficiency or
absence of said income or fruits, such obligations
shall be satisfied from the separate properties.
(111a)
Art. 71. The management of the household shall
be the right and the duty of both spouses. The
expenses for such management shall be paid in
accordance with the provisions of Article 70.
(115a)
Art. 72. When one of the spouses neglects his or
her duties to the conjugal union or commits acts
which tend to bring danger, dishonor or injury to
the other or to the family, the aggrieved party may
apply to the court for relief. (116a)
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Art. 73. Either spouse may exercise any
legitimate profession, occupation, business or
activity without the consent of the other. The latter
may object only on valid, serious, and moral
grounds.
In case of disagreement, the court shall decide
whether or not:
(1) The objection is proper; and
(2) Benefit has accrued to the family prior to
the objection or thereafter. If the benefit
accrued prior to the objection, the resulting
obligation shall be enforced against the
separate property of the spouse who has
not obtained consent.
The foregoing provisions shall not prejudice the
rights of creditors who acted in good faith. (117a)
"Art. 73. Either spouse may exercise any legitimate
profession, occupation, business or activity without
the consent of the other. The latter may object only on
valid, serious, and moral grounds.
"In case of disagreement, the court shall decide
whether or not:
"(1) The objection is proper, and
"(2) Benefit has accrued to the family prior to the
objection or thereafter. If the benefit accrued prior to
the objection, the resulting obligation shall be
enforced against the community property. If the
benefit accrued thereafter, such obligation shall be
enforced against the separate property of the spouse
who has not obtained consent.
"The foregoing provisions shall not prejudice the rights
of creditors who acted in good faith." (As amended by
RA 10572)
TITLE IV
PROPERTY RELATIONS BETWEEN HUSBAND
AND WIFE
Chapter 1. General Provisions
Art. 74. The property relationship between
husband and wife shall be governed in the
following order:
(1) By marriage settlements executed
before the marriage;
(2) By the provisions of this Code; and
Property Relations; Marriage Settlements (1991)
(3) By the local custom. (118)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 75. The future spouses may, in the marriage
settlements, agree upon the regime of absolute
community, conjugal partnership of gains,
complete separation of property, or any other
regime. In the absence of a marriage settlement,
or when the regime agreed upon is void, the
system of absolute community of property as
established in this Code shall govern. (119a)
Art. 76. In order that any modification in the
marriage settlements may be valid, it must be
made before the celebration of the marriage,
subject to the provisions of Articles 66, 67, 128,
135 and 136. (121)
Art. 77. The marriage settlements and any
modification thereof shall be in writing, signed by
the parties and executed before the celebration of
the marriage. They shall not prejudice third
persons unless they are registered in the local
civil registry where the marriage contract is
recorded as well as in the proper registries of
properties. (122a)
QA. X and Y agreed verbally before their
marriage (a) on the paternity of the illegitimate
child of Y and (b) on the economic regime that will
govern X and Y’s property relations. Is the verbal
agreement valid?
A. No, because a marriage settlement to be valid
should be in writing.
B. Yes, since ante-nuptial agreements need not
be in writing.
C. No, because a marriage settlement cannot
include an agreement on the paternity of an
illegitimate child.
D. Yes, since even if it is not a valid marriage
settlement, it is a valid verbal
contract.
REQUISITES FOR A VALID MARRIAGE
SETTLEMENT:
1. In writing;
2. Signed by the parties;
3. Executed before the celebration of
marriage;
4. Must fix the terms and conditions of their
property relations;
5. If a party needs parental consent, the
parent/guardian must be made party to the
agreement;
6. If the party executing the settlement is
under the civil interdiction or any other
disability, the guardian appointed by the
court must be made party to the settlement;
7. Registration (to bind 3rd persons).
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decided to marry each other before the last day of the
1991 Bar Examinations. They agreed to execute a
Marriage Settlement. Rowena herself prepared the
document in her own handwriting. They agreed on the
following: (1) a conjugal partnership of gains; (2) each
donates to the other fifty percent (50%) of his/her present
property, (3) Rowena shall administer the conjugal
partnership property; and (4) neither may bring an action
for the annulment or declaration of nullity of their
marriage. Both signed the agreement in the presence of
two (2) witnesses. They did not, however, acknowledge it
before a notary public.
A. As to form, is the Marriage Settlement valid?
May it be registered in the registry of property? If not,
what steps must be taken to make it registerable?
B. Are the stipulations valid?
C. If the Marriage Settlement is valid as to form and
the above stipulations are likewise valid, does it now
follow that said Marriage Settlement is valid and
enforceable?
SUGGESTED ANSWER:
A. Yes, it is valid as to form because it is in writing. No, it
cannot be registered in the registry of property because it
is not a public document. To make it registerable, it must
be reformed and has to be notarized.
SUGGESTED ANSWER:
B. Stipulations (1) and (3) are valid because they are not
contrary to law. Stipulation (4) is void because it is
contrary to law. Stipulation (2) is valid up to 1/5 of their
respective present properties but void as to the excess
(Art 84, Family Code).
SUGGESTED ANSWER:
C. No. on September 15, 1991, the marriage settlement
is not yet valid and enforceable until the celebration of the
marriage, to take place before the last day of the 1991
bar Examinations.
2011 Bar Exam
(72) While engaged to be married, Arnold and
Josephine agreed in a public instrument to
adopt out the economic regime of absolute
community of property. Arnold acknowledged
in the same instrument that Josephine’s
daughter Mary, is his illegitimate child. But
Josephine died before the marriage could take
place. Does the marriage settlement have any
significance? (A) None, since the instrument
containing the marriage settlement is
essentially void for containing an unrelated
matter. (B) Yes, insofar as Arnold
acknowledged Mary as his illegitimate
child.
(C) None, since the marriage did not take
place. (D) Yes, if they acquired properties while
living together as husband and wife.
Property Relations; Marriage Settlements (1995)
On 10 September 1988 Kevin, a 26-year old
businessman, married Karla, a winsome lass of 18.
Without the knowledge of their parents or legal guardians,
Kevin and Karla entered into an ante-nuptial contract the
day before their marriage stipulating that conjugal
partnership of gains shall govern their marriage. At the
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
time of their marriage Kevin's estate was worth 50 Million
while Karla's was valued at 2 Million. A month after their
marriage Kevin died in a freak helicopter accident. He left
no will, no debts, no obligations. Surviving Kevin, aside
from Karla, are his only relatives: his brother Luis and first
cousin Lilia. 1) What property Relations governed the
marriage of
Kevin and Karla? Explain. 2) Determine the value of the
estate of Kevin, 3) Who are Kevin's heirs? 4) How much
is each of Kevin's heirs entitled to
inherit?
SUGGESTED ANSWER:
1. Since the marriage settlement was entered into without
the consent and without the participation of the parents
(they did not sign the document), the marriage settlement
is invalid applying Art. 78, F.C. which provides that a
minor who according to law may contract marriage may
also enter together, into marriage settlements but they
shall be valid only if the person who may give consent to
the marriage are made parties to the agreement. (Karla
was still a minor at the time the marriage settlement was
executed in September 1988 because the law, R.A. 6809,
reducing the age of majority to 18 years took effect on 18
December 1989). The marriage settlement being void,
the property Relations governing the marriage is,
therefore, absolute community of property, under Art. 75
of the FC.
2. All the properties which Kevin and Karla owned at the
time of marriage became community property which shall
be divided equally between them at dissolution. Since
Kevin owned 50 Million and Karla. 2 Million, at the time of
the marriage, 52 Million constituted their community
property. Upon the death of Kevin, the community was
dissolved and half of the 52 Million or 26 Million is his
share in the community. This 26 Million therefore is his
estate.
3. Karla and Luis are the Intestate heirs of Kevin.
4. They are entitled to share the estate equally under
Article 1001 of the NCC. Therefore. Karla gets 13 Million
and Luis gets 13 Million.
Art. 78. A minor who according to law may
contract marriage may also execute his or her
marriage settlements, but they shall be valid only
if the persons designated in Article 14 to give
consent to the marriage are made parties to the
agreement, subject to the provisions of Title IX of
this Code. (120a)
Art. 79. For the validity of any marriage settlement
executed by a person upon whom a sentence of
civil interdiction has been pronounced or who is
subject to any other disability, it shall be
indispensable for the guardian appointed by a
competent court to be made a party thereto.
(123a)
Art. 80. In the absence of a contrary stipulation in
a marriage settlement, the property relations of
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the spouses shall be governed by Philippine laws,
regardless of the place of the celebration of the
marriage and their residence.
This rule shall not apply:
(1) Where both spouses are aliens;
(2) With respect to the extrinsic validity of
contracts affecting property not situated in
the Philippines and executed in the country
where the property is located; and
(3) With respect to the extrinsic validity of
contracts entered into in the Philippines but
affecting property situated in a foreign
country whose laws require different
formalities for its extrinsic validity. (124a)
Art. 81. Everything stipulated in the settlements or
contracts referred to in the preceding articles in
consideration of a future marriage, including
donations between the prospective spouses made
therein, shall be rendered void if the marriage does
not take place. However, stipulations that do not
depend upon the celebration of the marriages shall
be valid. (125a)
Chapter 2. Donations by Reason of Marriage
Art. 82. Donations by reason of marriage are those
which are made before its celebration, in
consideration of the same, and in favor of one or
both of the future spouses. (126)
Art. 83. These donations are governed by the rules
on ordinary donations established in Title III of Book
III of the Civil Code, insofar as they are not modified
by the following articles. (127a)
Art. 84. If the future spouses agree upon a regime
other than the absolute community of property, they
cannot donate to each other in their marriage
settlements more than one-fifth of their present
property. Any excess shall be considered void.
Donations of future property shall be governed by
the provisions on testamentary succession and the
formalities of wills. (130a)
DONATION BY REASON OF MARRIAGE
Requisites:
1. Made before celebration of marriage;
2. In consideration of marriage;
3. In favor of one or both future spouses;
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
4. Made according to the formalities of law
(art. 748 and 749 NCC).
Succession; Death; Presumptive Legitime (1991)
a) For purposes of succession, when is death deemed to
occur or take place? b) May succession be conferred by
contracts or acts inter
vivos? Illustrate. c) Is there any law which allows the
delivery to
compulsory heirs of their presumptive legitimes during
the lifetime of their parents? If so, in what instances?
SUGGESTED ANSWER:
A. Death as a fact is deemed to occur when it actually
takes place. Death is presumed to take place in the
circumstances under Arts. 390-391 of the Civil Code. The
time of death is presumed to be at the expiration of the
10¬year period as prescribed by Article 390 and at the
moment of disappearance under Article 391.
B. Under Art. 84 of the Family Code amending Art 130
of the Civil Code, contractual succession is no longer
possible since the law now requires that donations of
future property be governed by the provisions on the
testamentary succession and formalities of wills.
ALTERNATIVE ANSWER:
B. In the case of Coronado vs.CA(l91 SCRA81), it was
ruled that no property passes under a will without its
being probated, but may under Article 1058 of the Civil
Code of 1898, be sustained as a partition by an act inter
vivos
[Many-Oy vs. CA 144SCRA33).
And in the case of Chavez vs, IAC 1191 SCRA211), it
was ruled that while the law prohibits contracts upon
future inheritance, the partition by the parent, as provided
in Art. 1080 is a case expressly authorized by law. A
person has two options in making a partition of his estate:
either by an act inter vivos or by will. If the partition is by
will, it is imperative that such partition must be executed
in accordance with the provisions of the law on wills; if by
an act inter vivos, such partition may even be oral or
written, and need not be in the form of a will, provided the
legitime is not prejudiced.
"Where several sisters execute deeds of sale over their 1
/6 undivided share of the paraphernal property of their
only giving her authority thereto but even signing said
deeds, there is a valid partition inter vivos between the
mother and her children which cannot be revoked by the
mother. Said deeds of sale are not contracts entered into
with respect to future inheritance.
"It would be unjust for the mother to revoke the sales to a
son and to execute a simulated sale in favor of a
daughter who already benefited by the partition."
SUGGESTED ANSWER:
C. Yes, under Arts. 51 and 52 of the New Family Code. In
case of legal separation, annulment of marriage,
declaration of nullity of marriage and the automatic
termination of a subsequent marriage by the
reappearance of the absent spouse, the common or
community property of the spouses shall be dissolved
and liquidated.
Art, 51. In said partition, the value of the presumptive
legitimes of all common children, computed as of the date
of the final judgment of the trial court, shall be delivered in
cash, property or sound securities, unless the parties, by
mutual agreement, judicially approved, had already
provided for such matters.
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The children of their guardian, or the trustee of their
property, may ask for the enforcement of the judgment.
The delivery of the presumptive legitimes herein
prescribed shall in no way prejudice the ultimate
successional rights of the children accruing upon the
death of either or both of the parents; but the value of the
properties already received under the decree of
annulment or absolute nullity shall be considered as
advances on their legitime.
Art. 52. The judgment of annulment or of absolute nullity
of the marriage, the partition and distribution of the
properties of the spouses, and the delivery of the
children's presumptive legitimes shall be recorded in the
appropriate civil registry and registries of property;
otherwise, the same shall not affect third persons.
2012 Bar Exam Question
20. Audrey, single, bought a parcel of land in
Malolos City from Franco for P 1Million. A
contract was executed between them which
already vested upon Audrey full ownership of
the property, although payable in monthly
installments for a period of four (4) years. One
(1) year after the execution of the contract,
Audrey got married to Arnel. They executed a
marriage settlement whereby they agreed that
their properties shall be governed by the
regime of conjugal partnership of gains.
Thereafter, subsequent installments were paid
from the conjugal partnership funds. Is the
land conjugal or paraphernal?
a) The land is conjugal because the
installments were paid from the conjugal
partnership funds. b) The land is
paraphernal because ownership thereof was
acquired before the marriage. c) The land is
both conjugal and paraphernal funds of
installments were paid from both the personal
funds of Audrey and the conjugal partnership
funds. d) The land is paraphernal because it
was Audrey who purchased the same.
Art. 85. Donations by reason of marriage of
property subject to encumbrances shall be valid. In
case of foreclosure of the encumbrance and the
property is sold for less than the total amount of the
obligation secured, the donee shall not be liable for
the deficiency. If the property is sold for more than
the total amount of said obligation, the donee shall
be entitled to the excess. (131a)
Art. 86. A donation by reason of marriage may be
revoked by the donor in the following cases:
(1) If the marriage is not celebrated or
judicially declared void ab initio except
donations made in the marriage
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
settlements, which shall be governed by
Article 81;
(2) When the marriage takes place without
the consent of the parents or guardian, as
required by law;
(3) When the marriage is annulled, and the
donee acted in bad faith;
(4) Upon legal separation, the donee being
the guilty spouse;
(5) If it is with a resolutory condition and the
condition is complied with;
(6) When the donee has committed an act
of ingratitude as specified by the provisions
of the Civil Code on donations in general.
(132a)
Art. 87. Every donation or grant of gratuitous
advantage, direct or indirect, between the spouses
during the marriage shall be void, except moderate
gifts which the spouses may give each other on the
occasion of any family rejoicing. The prohibition
shall also apply to persons living together as
husband and wife without a valid marriage. (133a)
REASONS:
1. To protect unsecured creditors from being
defrauded;
2. To prevent stronger spouse from imposing
upon the weaker spouse the transfer of the
latter’s property to the former;
3. To prevent indirect modification of the
marriage settlement.
Note: this provision applies also to common-
law spouses.
2011 Bar Exam Question
(31) May a spouse freely donate communal or
conjugal property without the consent of the
other? (A) Absolutely not, since the spouses
co-own such property. (B) Yes, for properties
that the family may spare, regardless of value.
(C) Yes, provided the donation is moderate
and intended for charity or family rejoicing.
(D) Yes, in a donation mortis causa that the
donor may still revoke in his lifetime.
2011 Bar Exam
(91) Can common-law spouses donate
properties of substantial value to one another?
(A) No, they are only allowed to give
moderate gifts to each other during family
rejoicing. (B) No, they cannot give anything of
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value to each other to prevent placing their a. If subsequent marriage is void pursuant
legitimate relatives at a disadvantage. (C) Yes, to art. 40, in relation to arts. 52 and 53,
unlike the case of legally married spouses, because contracted by a spouse before
such donations are not prohibited. prior void marriage is judicially declared
(D) Yes, as long as they leave sufficient void.
property for themselves and for their By operation of law if donee-spouse
dependents. contracted subsequent marriage in
bad faith.

DONATIONS ORDINARY b. Judicially declared void on grounds

PROPTER NUPTIAS DONATIONS other than art. 40 in relation to arts. 52
Formalities and 52.
Govern by the rules on 5 years from finality of judicial
ordinary donation except Govern by rules on declaration of nullity (if action to
that if future property is donations (arts. 725— recover property).
donated, it must 773, NCC
conform with the 3. When marriage takes place without the
formalities of wills required parental consent.
Present Property 5 years.
No limit except that the
donor shall leave 4. If resolutory condition is complied with.
Maybe donated but up property enough for his 5 years from happening of the
to 1/5 of donor’s present support (take note also condition.
property that donations may not
impair the legitimes; 5. When marriage is annulled and done in
inofficious donations bad faith.
may be reduced) 5 years from finality of decree.
Future Property
6. If the done commits an act of
May be included Cannot be included
ingratitude.
provided donation is
1 year from donor’s knowledge of the
mortis causa
fact.
Grounds for revocation
Art. 83, FamCod Art. 760, 764, 765, NCC
7. In cases of legal separation.
5 years from the time the decree of
2012 Bar Exam Question separation has become final.
30. Which of the following is not a requisite for
a valid donation propter nuptias? a) The
donation must be made before the celebration Marriage; Donations by Reason of Marriage; Effect of
of the marriage. b) The donation shall be Declaration of Nullity (1996)
automatically revoked in case of non- 1) On the occasion of Digna's marriage to George, her
celebration of the marriage. c) The donation father gave her a donation propter nuptias of a car.
must be made in consideration of the Subsequently, the marriage was annulled because of the
marriage. d) The donation must be made in psychological immaturity of George. May Digna's father
revoke the donation and get back the car? Explain.
favor of one or both of the future spouses.
SUGGESTED ANSWER:
No, Digna's father may not revoke the donation because
Digna was not in bad faith, applying Art. 86(3) of the
PRESCRIPTIVE PERIOD FOR REVOCATION OF Family Code.
DONATION PROPTER NUPTIAS: ALTERNATIVE ANSWER:
1. If marriage is not celebrated— a) Yes, the donation is revocable. Since the ground for
5 years (art. 1149, NCC) from the time the annulment of the marriage is the psychological
the marriage is not solemnized on the immaturity of George, the judgment was in the nature of a
fixed date. declaration of nullity under Art. 36 of the FC and,
therefore, the donation may be revoked under Art. 86( 1)
of the FC for the reason that the marriage has been
Exception: if the donations are contained in
judicially declared void ab initio.
the marriage settlement—are automatically ALTERNATIVE ANSWER:
rendered void if the marriage does not take b) No, the donation cannot be revoked. The law provides
place. that a donation by reason of marriage may be revoked by
the donor if among other cases, the marriage is judicially
2. If marriage is judicially declared void— declared void ab initio [par. (1) Art. 86. Family Code], or

JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 64

____________________________________________________________________________________________________
when the marriage is annulled and the donee acted in
bad faith [par. (3), Id.]. Since the problem states that the
marriage was annulled and there is no intimation of bad
faith on the part of the donee Digna, the conclusion is that
the donor cannot revoke the donation.
ALTERNATIVE ANSWER:
c) Yes, the donation can be revoked. The ground used in
dissolving the marriage was the psychological immaturity
of George, which is not a ground for annulment of
marriage. If this term is equated with psychological
incapacity as used in Art. 36 of the Family Code, then it is
a ground for declaration of nullity of the marriage.
Consequently, par. (1) of Art. 86, FC, is the applicable
law. Since Art. 86 of the FC makes no qualification as to
who furnished the ground or who was in bad faith in
connection with the nullification of
the marriage, the conclusion is that Digna's father may
revoke the donation and get back the car.
2011 Bar Exam Question
(41) X and Y, both Filipinos, were married and
resided in Spain although they intend to
return to the Philippines at some future time.
They have not executed any marriage
settlements. What law governs their property
relations? (A) They may choose between
Spanish law and Philippine law. (B) Philippine
law since they are both Filipinos. (C) No
regime of property relations will apply to them.
(D) Spanish law since they live in Spain.
2011 Bar Exam Question
(52) What happens to the property regimes
that were subsisting under the New Civil Code
when the Family Code took effect? (A) The
original property regimes are immutable
and remain effective. (B) Those enjoying
specific regimes under the New Civil Code may
adopt the regime of absolute community of
property under the Family Code. (C) Those
that married under the New Civil Code but did
not choose any of its regimes shall now be
governed by the regime of absolute community
of property. (D) They are superseded by the
Family Code which has retroactive effect.
Chapter 3. System of Absolute Community
Section 1. General Provisions
NOTE: Absolute Community applies if there is no
marriage settlement or the regime selected is void
(art. 75).
Art. 88. The absolute community of property
between spouses shall commence at the precise
moment that the marriage is celebrated. Any
stipulation, express or implied, for the
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
commencement of the community regime at any
other time shall be void. (145a)
Art. 89. No waiver of rights, shares and effects of
the absolute community of property during the
marriage can be made except in case of judicial
separation of property.
When the waiver takes place upon a judicial
separation of property, or after the marriage has
been dissolved or annulled, the same shall appear
in a public instrument and shall be recorded as
provided in Article 77. The creditors of the spouse
who made such waiver may petition the court to
rescind the waiver to the extent of the amount
sufficient to cover the amount of their credits.
(146a)
Art. 90. The provisions on co-ownership shall apply
to the absolute community of property between the
spouses in all matters not provided for in this
Chapter. (n)
Section 2. What Constitutes Community
Property
Art. 91. Unless otherwise provided in this Chapter
or in the marriage settlements, the community
property shall consist of all the property owned by
the spouses at the time of the celebration of the
marriage or acquired thereafter. (197a)
Art. 92. The following shall be excluded from the
community property:
(1) Property acquired during the marriage by
gratuitous title by either spouse, and the fruits
as well as the income thereof, if any, unless it is
expressly provided by the donor, testator or
grantor that they shall form part of the
community property;
(2) Property for personal and exclusive use of
either spouse. However, jewelry shall form part
of the community property;
(3) Property acquired before the marriage by
either spouse who has legitimate descendants
by a former marriage, and the fruits as well as
the income, if any, of such property. (201a)
Art. 93. Property acquired during the marriage is
presumed to belong to the community, unless it is
proved that it is one of those excluded therefrom.
(160)
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Property Relations; Absolute Community (1994)
Paulita left the conjugal home because of the excessive
drinking of her husband, Alberto. Paulita, out of her own
endeavor, was able to buy a parcel of land which she was
able to register under her name with the addendum
"widow." She also acquired stocks in a listed corporation
registered in her name. Paulita sold the parcel of land to
Rafael, who first examined the original of the transfer
certificate of title. 1) Has Alberto the right to share in the
shares of stock acquired by Paulita? 2) Can Alberto
recover the land from Rafael?
SUGGESTED ANSWER:
1. a) Yes. The Family Code provides that all property
acquired during the marriage, whether the acquisition
appears to have been made, contracted or registered in
the name of one or both spouses, is presumed to be
absolute community property unless the contrary is
proved.
b) Yes. The shares are presumed to be absolute
community property having been acquired during the
marriage despite the fact that those shares were
registered only in her name. Alberto's right to claim his
share will only arise, however, at dissolution.
c) The presumption is still that the shares of stock are
owned in common. Hence, they will form part of the
absolute community or the conjugal partnership
depending on what the property Relations is.
d) Since Paulita acquired the shares of stock by onerous
title during the marriage, these are part of the conjugal or
absolute community property, as the case maybe
(depending on whether the marriage was celebrated prior
to. or after, the effectivity of the Family Code). Her
physical separation from her husband did not dissolve the
community of property. Hence, the husband has a right to
share in the shares of stock.
SUGGESTED ANSWER:
2) a) Under a community of property, whether absolute or
relative, the disposition of property belonging to such
community is void if done by just one spouse without the
consent of the other or authority of the proper court.
However, the land was registered in the name of Paulita
as "widow". Hence, the buyer has the right to rely upon
what appears in the record of the Register of Deeds and
should, consequently, be protected. Alberto cannot
recover the land from Rafael but would have the right of
recourse against his wife
b) The parcel of land is absolute community property
having been acquired during the marriage and through
Paulita's industry despite the registration being only in the
name of Paulita. The land being community property, its
sale to Rafael without the consent of Alberto is void.
However, since the land is registered in the name of
Paulita as widow, there is nothing in the title which would
raise a suspicion for Rafael to make inquiry. He,
therefore, is an innocent purchaser for value from whom
the land may no longer be recovered.
c) No. Rafael is an innocent purchaser in good faith who,
upon relying on the correctness of the certificate of title,
acquires rights which are to be protected by the courts.
Under the established principles of land registration law,
the presumption is that the transferee of registered land is
not aware of any defect in the title of the property he
purchased. (See Tojonera v. Court of Appeals, 103
SCRA 467). Moreover, the person dealing with registered
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
land may safely rely on the correctness of its certificate of
title and the law will in no way oblige him to go behind the
certificate to determine the condition of the property.
[Director of Lands v. Abache, et al. 73 Phil. 606). No
strong considerations of public policy have been
presented which would lead the Court to reverse the
established and sound doctrine that the buyer in good
faith of a registered parcel of land does not have to look
beyond the Torrens Title and search for any hidden
defect or inchoate right which may later invalidate or
diminish his right to what he purchased. (Lopez v. Court
of Appeals. 189 SCRA 271)
d) The parcel of land is absolute community property
having been acquired during the marriage and through
Paulita's industry despite registration only in the name of
Paulita. The land being community property, its sale to
Rafael without the consent of Alberto is void.
Section 3. Charges and Obligations of the
Absolute Community
Art. 94. The absolute community of property shall
be liable for:
(1) The support of the spouses, their common
children, and legitimate children of either
spouse; however, the support of illegitimate
children shall be governed by the provisions of
this Code on Support;
(2) All debts and obligations contracted during
the marriage by the designated administrator-
spouse for the benefit of the community, or by
both spouses, or by one spouse with the
consent of the other;
(3) Debts and obligations contracted by either
spouse without the consent of the other to the
extent that the family may have been benefited;
(4) All taxes, liens, charges and expenses,
including major or minor repairs, upon the
community property;
(5) All taxes and expenses for mere
preservation made during marriage upon the
separate property of either spouse used by the
family;
(6) Expenses to enable either spouse to
commence or complete a professional or
vocational course, or other activity for self-
improvement;
(7) Ante-nuptial debts of either spouse insofar
as they have redounded to the benefit of the
family;
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(8) The value of what is donated or promised by
both spouses in favor of their common
legitimate children for the exclusive purpose of
commencing or completing a professional or
vocational course or other activity for self-
improvement;
(9) Ante-nuptial debts of either spouse other
than those falling under paragraph (7) of this
Article, the support of illegitimate children of
either spouse, and liabilities incurred by either
spouse by reason of a crime or a quasi-delict, in
case of absence or insufficiency of the exclusive
property of the debtor-spouse, the payment of
which shall be considered as advances to be
deducted from the share of the debtor-spouse
upon liquidation of the community; and
(10) Expenses of litigation between the spouses
unless the suit is found to be groundless.
If the community property is insufficient to cover the
foregoing liabilities, except those falling under
paragraph (9), the spouses shall be solidarily liable
for the unpaid balance with their separate
properties. (161a, 162a, 163a, 202a-205a)
Property Relations; Ante-Nuptial Debt
(2007) No. VII. Write "TRUE" if the statement
is true or "FALSE" if the statement is false. If
the statement is FALSE, state the reason. (2%
each).
(3). An individual, While single, purchases a
house and lot in 1990 and borrows money in
1992 to repair it. In 1995, such individual gets
married while the debt is still being paid. After
the marriage, the debt is still the responsibility
of such individual. SUGGESTED ANSWER:
FALSE. The absolute Community of
property is liable for the ante-nuptial debts
of either spouse in so far as the same
redounded to the benefit of the family (Art.
94 par.7, FC). ALTERNATIVE ANSWER:
FALSE. The debt is already the
responsibility of the community property,
because the property already constitutes
absolute community property under Art. 91
of FC which took effect in 1988 while the
house and lot here involved was purchased
in 1990. There is no indication that the
spouse who bought the property had
legitimate descendants by a former
marriage, which would exclude the house
and lot from the community property, Art.
92 par 3, FC). If the spouses established a
conjugal partnership, the property belongs
to the individual spouse if full ownership
was vested before marriage (Art. 118, FC).
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 95. Whatever may be lost during the marriage
in any game of chance, betting, sweepstakes, or
any other kind of gambling, whether permitted or
prohibited by law, shall be borne by the loser and
shall not be charged to the community but any
winnings therefrom shall form part of the community
property. (164a)
Section 4. Ownership, Administration,
Enjoyment and Disposition of the Community
Property
Art. 96. The administration and enjoyment of the
community property shall belong to both spouses
jointly. In case of disagreement, the husband's
decision shall prevail, subject to recourse to the
court by the wife for proper remedy, which must be
availed of within five years from the date of the
contract implementing such decision.
In the event that one spouse is incapacitated or
otherwise unable to participate in the administration
of the common properties, the other spouse may
assume sole powers of administration. These
powers do not include disposition or encumbrance
without authority of the court or the written consent
of the other spouse. In the absence of such
authority or consent, the disposition or
encumbrance shall be void. However, the
transaction shall be construed as a continuing offer
on the part of the consenting spouse and the third
person, and may be perfected as a binding contract
upon the acceptance by the other spouse or
authorization by the court before the offer is
withdrawn by either or both offerors. (206a)
Note: Encumbrance or disposition of the
community property without the consent of the other
spouse is TOTALLY VOID. To say that it is void
only as to the share of the spouse who did not
consent and valid as to the share of the spouse
who contracted the encumbrance is ERRONEOUS
(Homeowner Saving & Loan Bank vs. Dailo, GR
No. 153802, March 11, 2005).
Note: Compare this article with art. 124, FC.
2011 Bar Exam
(79) The husband assumed sole
administration of the family’s mango
plantation since his wife worked abroad.
Subsequently, without his wife’s knowledge,
the husband entered into an antichretic
transaction with a company, giving it
possession and management of the plantation
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with power to harvest and sell the fruits and to
apply the proceeds to the payment of a loan he
got. What is the standing of the contract? (A) It
is void in the absence of the wife’s consent. (B)
It is void absent an authorization from the
court. (C) The transaction is void and can
neither be ratified by the wife nor authorized
by the court. (D) It is considered a
continuing offer by the parties, perfected
only upon the wife’s acceptance or the
court’s authorization.
Art. 97. Either spouse may dispose by will of his or
her interest in the community property. (n)
Art. 98. Neither spouse may donate any community
property without the consent of the other. However,
either spouse may, without the consent of the other,
make moderate donations from the community
property for charity or on occasions of family
rejoicing or family distress. (n)
Section 5. Dissolution of Absolute Community
Regime
Art. 99. The absolute community terminates:
(1) Upon the death of either spouse;
(2) When there is a decree of legal separation;
(3) When the marriage is annulled or declared
void; or
(4) In case of judicial separation of property
during the marriage under Articles 134 to 138.
(175a)
Art. 100. The separation in fact between husband
and wife shall not affect the regime of absolute
community except that:
(1) The spouse who leaves the conjugal home
or refuses to live therein, without just cause,
shall not have the right to be supported;
(2) When the consent of one spouse to any
transaction of the other is required by law,
judicial authorization shall be obtained in a
summary proceeding;
(3) In the absence of sufficient community
property, the separate property of both spouses
shall be solidarily liable for the support of the
family. The spouse present shall, upon proper
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
petition in a summary proceeding, be given
judicial authority to administer or encumber any
specific separate property of the other spouse
and use the fruits or proceeds thereof to satisfy
the latter's share. (178a)
Art. 101. If a spouse without just cause abandons
the other or fails to comply with his or her
obligations to the family, the aggrieved spouse may
petition the court for receivership, for judicial
separation of property or for authority to be the sole
administrator of the absolute community, subject to
such precautionary conditions as the court may
impose.
The obligations to the family mentioned in the
preceding paragraph refer to marital, parental or
property relations.
A spouse is deemed to have abandoned the other
when he or she has left the conjugal dwelling
without intention of returning. The spouse who has
left the conjugal dwelling for a period of three
months or has failed within the same period to give
any information as to his or her whereabouts shall
be prima facie presumed to have no intention of
returning to the conjugal dwelling. (178a)
2011 Bar Exam Question
(64) Is the wife who leaves her husband
without just cause entitled to support? (A) No,
because the wife must always be submissive
and respectful to the husband. (B) Yes. The
marriage not having been dissolved, the
husband continues to have an obligation to
support his wife. (C) No, because in leaving
the conjugal home without just cause, she
forfeits her right to support. (D) Yes, since
the right to receive support is not subject to
any condition.
CONSTRUCTIVE ABANDONMENT
Happens when one of the spouses, by violence or
intimidation, would prohibit the other spouse from
returning to the conjugal dwelling.
QA. The husband’s acts of forcibly ejecting his wife
without just cause from the conjugal dwelling and
refusing to take her back constitutes
A. desertion.
B. recrimination.
C. constructive abandonment.
D. de facto separation.
Section 6. Liquidation of the Absolute
Community
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Assets and Liabilities
Art. 102. Upon dissolution of the absolute
community regime, the following procedure shall
apply:
(1) An inventory shall be prepared, listing
separately all the properties of the absolute
community and the exclusive properties of each
spouse.
(2) The debts and obligations of the absolute
community shall be paid out of its assets. In
case of insufficiency of said assets, the spouses
shall be solidarily liable for the unpaid balance
with their separate properties in accordance
with the provisions of the second paragraph of
Article 94.
(3) Whatever remains of the exclusive
properties of the spouses shall thereafter be
delivered to each of them.
(4) The net remainder of the properties of the
absolute community shall constitute its net
assets, which shall be divided equally between
husband and wife, unless a different proportion
or division was agreed upon in the marriage
settlements, or unless there has been a
voluntary waiver of such share provided in this
Code. For purpose of computing the net profits
subject to forfeiture in accordance with Articles
43, No. (2) and 63, No. (2), the said profits shall
be the increase in value between the market
value of the community property at the time of
the celebration of the marriage and the market
value at the time of its dissolution.
(5) The presumptive legitimes of the common
children shall be delivered upon partition, in
accordance with Article 51.
(6) Unless otherwise agreed upon by the
parties, in the partition of the properties, the
conjugal dwelling and the lot on which it is
situated shall be adjudicated to the spouse with
whom the majority of the common children
choose to remain. Children below the age of
seven years are deemed to have chosen the
mother, unless the court has decided otherwise.
In case there in no such majority, the court shall
decide, taking into consideration the best
interests of said children. (n)
Art. 103. Upon the termination of the marriage by
death, the community property shall be liquidated in
the same proceeding for the settlement of the
estate of the deceased.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
If no judicial settlement proceeding is instituted, the
surviving spouse shall liquidate the community
property either judicially or extra-judicially within six
months from the death of the deceased spouse. If
upon the lapse of the six months period, no
liquidation is made, any disposition or encumbrance
involving the community property of the terminated
marriage shall be void.
Should the surviving spouse contract a subsequent
marriage without compliance with the foregoing
requirements, a mandatory regime of complete
separation of property shall govern the property
relations of the subsequent marriage. (n)]
NOTE: Compared with art. 103, FC.
1. Under art. 53, the cause of the termination
of marriage is either annulment or
declaration of nullity; while under 103, the
cause of termination is death;
2. Non-compliance of art. 53 renders
subsequent marriage void; non-compliance
of 103, par. 2 will not invalidate marriage
but a mandatory regime of complete
separation of property governs their
property relation.
Art. 104. Whenever the liquidation of the community
properties of two or more marriages contracted by
the same person before the effectivity of this Code
is carried out simultaneously, the respective capital,
fruits and income of each community shall be
determined upon such proof as may be considered
according to the rules of evidence. In case of doubt
as to which community the existing properties
belong, the same shall be divided between the
different communities in proportion to the capital
and duration of each. (189a)
Chapter 4. Conjugal Partnership of Gains
Section 1. General Provisions
Art. 105. In case the future spouses agree in the
marriage settlements that the regime of conjugal
partnership gains shall govern their property
relations during marriage, the provisions in this
Chapter shall be of supplementary application.
The provisions of this Chapter shall also apply to
conjugal partnerships of gains already established
between spouses before the effectivity of this Code,
without prejudice to vested rights already acquired
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in accordance with the Civil Code or other laws, as
provided in Article 256. (n)
Property Relations; Ante Nuptial Agreement (1995)
Suppose Tirso and Tessie were married on 2 August
1988 without executing any ante nuptial agreement.
One year after their marriage, Tirso while supervising the while the house, when finished cost P600,000.00. In 1989
clearing of Tessie's inherited land upon the latter's
request, accidentally found the treasure not in the new
river bed but on the property of Tessie. To whom shall the remained at the same proportion:
treasure belong? Explain.
SUGGESTED ANSWER:
Since Tirso and Tessie were married before the effectivity and lot are not conjugal but exclusive property of her
of the Family Code, their property relation is governed by deceased son. [3%]
conjugal partnership of gains. Under Art. 54 of the Civil
Code, the share of the hidden treasure which the law
awards to the finder or the proprietor belongs to the
conjugal partnership of gains. The one-half share
pertaining to Tessie as owner of the land, and the one-
half share pertaining to Tirso as finder of the treasure, 1. Since Bob and Issa got married In 1970, then the law
belong to the conjugal partnership of gains.
2012 Bar Exam Question
27. A husband by chance discovered hidden
treasure on the paraphernal property of his
wife. Who owns the discovered treasure? a)
The half pertaining to the husband (finder)
belongs to the conjugal partnership. b) The
half pertaining to the wife (as owner) belongs
to the conjugal partnership. c) One half shall
belong to the husband as finder and the other
half shall belong to the wife as owner of the
property. d) a and b
Art. 106. Under the regime of conjugal partnership
of gains, the husband and wife place in a common
fund the proceeds, products, fruits and income from
their separate properties and those acquired by
either or both spouses through their efforts or by
chance, and, upon dissolution of the marriage or of
the partnership, the net gains or benefits obtained
by either or both spouses shall be divided equally
between them, unless otherwise agreed in the
marriage settlements. (142a)
2011 Bar Exam
87) When does the regime of conjugal
partnership of gains begin to exist?
(A) At the moment the parties take and
declare each other as husband and wife
before officiating officer. (B) At the time the
spouses acquire properties through joint
efforts. (C) On the date the future spouses
executed their marriage settlements because
this is the starting point of their marital
relationship. (D) On the date agreed upon by
the future spouses in their marriage
settlements since their agreement is the law
between them.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Property Relations; Conjugal Partnership of Gains
(1998)
In 1970, Bob and Issa got married without executing a
marriage settlement. In 1975, Bob inherited from his
father a residential lot upon which, in 1981, he
constructed a two-room bungalow with savings from his
own earnings. At that time, the lot was worth P800.000.00
Bob died, survived only by his wife, Issa and his mother,
Sofia. Assuming that the relative values of both assets
1. State whether Sofia can rightfully claim that the house
2. Will your answer be the same if Bob died before
August 3, 1988? [2%]
SUGGESTED ANSWER:
that governs is the New Civil Code (Persons), in which
case, the property relations that should be applied as
regards the property of the spouses is the system of
relative community or conjugal partnership of gains
(Article 119, Civil Code). By conjugal partnership of gains,
the husband and the wife place in a common fund the
fruits of their separate property and the income from their
work or Industry (Article 142, Civil Code). In this instance,
the lot inherited by Bob in 1975 is his own separate
property, he having acquired the same by lucrative title
(par. 2, Art. 148, Civil Code). However, the house
constructed from his own savings in 1981 during the
subsistence of his marriage with Issa is conjugal property
and not exclusive property in accordance with the
principle of "reverse accession" provided for in Art. 158,
Civil Code.
ANOTHER ANSWER:
1. Sofia, being her deceased son's legal heir
concurring with his surviving spouse (Arts. 985, 986 and
997, Civil Code), may rightfully claim that the house and
lot are not conjugal but belong to the hereditary estate of
Bob. The value of the land being more than the cost of
the improvement (Art. 120, Family Code).
SUGGESTED ANSWER:
2. Yes, the answer would still be the same. Since Bob
and Issa contracted their marriage way back in 1970,
then the property relations that will govern is still the
relative community or conjugal partnership of gains
(Article 119, Civil Code). It will not matter if Bob died
before or after August 3. 1988 (effectivity date of the
Family Code], what matters is the date when the
marriage was contracted. As Bob and Issa contracted
their marriage way back in 1970. the property relation that
governs them is still the conjugal partnership of gains.
(Art. 158, Civil Code)
ANOTHER ANSWER:
2. If Bob died be fore August 3, 1988. which is the date
the Family Code took effect, the answer will not be the
same. Art. 158. Civil Code, would then apply. The land
would then be deemed conjugal, along with the house,
since conjugal funds were used in constructing it. The
husband's estate would be entitled to a reimbursement of
the value of the land from conjugal partnership funds.
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The spouses contribute the following to a
common fund:
1. Proceeds, products, fruits and income of
separate properties of spouses;
2. Everything acquired by the spouses
through their efforts;
3. Everything acquired by the spouses
through chance.
Art. 107. The rules provided in Articles 88 and 89
shall also apply to conjugal partnership of gains. (n)
Art. 108. The conjugal partnership shall be
governed by the rules on the contract of partnership
in all that is not in conflict with what is expressly
determined in this Chapter or by the spouses in
their marriage settlements. (147a)
Section 2. Exclusive Property of Each Spouse
Art. 109. The following shall be the exclusive
property of each spouse:
(1) That which is brought to the marriage as his
or her own;
(2) That which each acquires during the
marriage by gratuitous title;
(3) That which is acquired by right of
redemption, by barter or by exchange with
property belonging to only one of the spouses;
and
(4) That which is purchased with exclusive
money of the wife or of the husband. (148a)
QA. Solomon sold his coconut plantation to Aragon,
Inc. for P100 million, payable in installments of P10
million per month with 6% interest per annum.
Solomon married Lorna after 5 months and they
chose conjugal partnership of gains to govern their
property relations. When they married, Aragon had
an unpaid balance of P50 million plus interest in
Solomon’s favor. To whom will Aragon’s monthly
payments go after the marriage?
A. The principal shall go to the conjugal partnership
but the interests to Solomon.
B. Both principal and interests shall go to Solomon
since they are his exclusive properties.
C. Both principal and interests shall go to the
conjugal partnership since these
become due after the marriage.
D. The principal shall go to Solomon but the
interests to the conjugal partnership.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 110. The spouses retain the ownership,
possession, administration and enjoyment of their
exclusive properties.
Either spouse may, during the marriage, transfer
the administration of his or her exclusive property to
the other by means of a public instrument, which
shall be recorded in the registry of property of the
place the property is located. (137a, 168a, 169a)
Art. 111. A spouse of age may mortgage,
encumber, alienate or otherwise dispose of his or
her exclusive property, without the consent of the
other spouse, and appear alone in court to litigate
with regard to the same. (n)
"Art. 111. Either spouse may mortgage, encumber,
alienate or otherwise dispose of his or her exclusive
property." (As amended by RA 10572).
Art. 112. The alienation of any exclusive property of
a spouse administered by the other automatically
terminates the administration over such property
and the proceeds of the alienation shall be turned
over to the owner-spouse. (n)
Art. 113. Property donated or left by will to the
spouses, jointly and with designation of determinate
shares, shall pertain to the donee-spouses as his or
her own exclusive property, and in the absence of
designation, share and share alike, without
prejudice to the right of accretion when proper.
(150a)
Art. 114. If the donations are onerous, the amount
of the charges shall be borne by the exclusive
property of the donee spouse, whenever they have
been advanced by the conjugal partnership of
gains. (151a)
Art. 115. Retirement benefits, pensions, annuities,
gratuities, usufructs and similar benefits shall be
governed by the rules on gratuitous or onerous
acquisitions as may be proper in each case. (n)
2011 Bar Exam
(99) Before Karen married Karl, she inherited
P5 million from her deceased mother which
amount she brought into the marriage. She
later used part of the money to buy a new
Mercedes Benz in her name, which Karen and
her husband used as a family car. Is the car a
conjugal or Karen’s exclusive property? (A) It is
conjugal property since the spouses use it as a
family car. (B) It is Karen’s exclusive property
since it is in her name. (C) It is conjugal
property having been bought during the
marriage. (D) It is Karen’s exclusive
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property since she bought it with her own
money.
Section 3. Conjugal Partnership Property
Art. 116. All property acquired during the marriage,
whether the acquisition appears to have been
made, contracted or registered in the name of one
or both spouses, is presumed to be conjugal unless
the contrary is proved. (160a)
Art. 117. The following are conjugal partnership
properties:
(1) Those acquired by onerous title during
the marriage at the expense of the common
fund, whether the acquisition be for the
partnership, or for only one of the spouses;
(2) Those obtained from the labor, industry,
work or profession of either or both of the
spouses;
(3) The fruits, natural, industrial, or civil,
due or received during the marriage from
the common property, as well as the net
fruits from the exclusive property of each
spouse;
(4) The share of either spouse in the hidden
treasure which the law awards to the finder
or owner of the property where the treasure
is found;
(5) Those acquired through occupation
such as fishing or hunting;
(6) Livestock existing upon the dissolution
of the partnership in excess of the number
of each kind brought to the marriage by
either spouse; and
(7) Those which are acquired by chance,
such as winnings from gambling or betting.
However, losses therefrom shall be borne
exclusively by the loser-spouse. (153a,
154a, 155, 159)
Art. 118. Property bought on installments paid partly
from exclusive funds of either or both spouses and
partly from conjugal funds belongs to the buyer or
buyers if full ownership was vested before the
marriage and to the conjugal partnership if such
ownership was vested during the marriage. In either
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
case, any amount advanced by the partnership or
by either or both spouses shall be reimbursed by
the owner or owners upon liquidation of the
partnership. (n)
Art. 119. Whenever an amount or credit payable
within a period of time belongs to one of the
spouses, the sums which may be collected during
the marriage in partial payments or by installments
on the principal shall be the exclusive property of
the spouse. However, interests falling due during
the marriage on the principal shall belong to the
conjugal partnership. (156a, 157a)
Art. 120. The ownership of improvements, whether
for utility or adornment, made on the separate
property of the spouses at the expense of the
partnership or through the acts or efforts of either or
both spouses shall pertain to the conjugal
partnership, or to the original owner-spouse, subject
to the following rules:
When the cost of the improvement made by
the conjugal partnership and any resulting
increase in value are more than the value
of the property at the time of the
improvement, the entire property of one of
the spouses shall belong to the conjugal
partnership, subject to reimbursement of
the value of the property of the owner-
spouse at the time of the improvement;
otherwise, said property shall be retained in
ownership by the owner-spouse, likewise
subject to reimbursement of the cost of the
improvement.
In either case, the ownership of the entire
property shall be vested upon the
reimbursement, which shall be made at the
time of the liquidation of the conjugal
partnership. (158a)
Property Relations; Accession (2012)
No.III.(a) Maria, wife of Pedro, withdrew P 5
Million from their conjugal funds. With this
money, she constructed a building on a lot
which she inherited from her father. Is the
building conjugal or paraphernal? Reasons.
(5%)
SUGGESTED ANSWER:
It depends. If the value of the building is more
than the value of the land, the building is
conjugal and the land becomes conjugal
property under Art. 120 of the Family Code. This
is a case of reverse accession, where the
building is considered as the principal and the
land, the accessory. If, on the other hand, the
value of the land is more than the value of the
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building, then the ordinary rule of accession
applies where the land is the principal and the
building, the accessory. In such case, the land
remains paraphernal property and the building
becomes paraphernal propery. Note: The rule on
reverse accession is applicable only to the regime
of conjugal partnership of gains in both the Family
Code and the New Civil Code. The foregoing
answer assumes that CPG is the regime of the
property relations of the spouses.
2011 Bar Exam
(93) Josie owned a lot worth P5 million prior to
her marriage to Rey. Subsequently, their
conjugal partnership spent P3 million for the
construction of a house on the lot. The
construction resulted in an increase in the
value of the house and lot to P9 million. Who
owns the house and the lot? (A) Josie and the
conjugal partnership of gains will own both on
a 50-50 basis. (B) Josie will own both since
the value of the house and the increase in
the property’s value is less than her lot’s
value; but she is to reimburse conjugal
partnership expenses. (C) Josie still owns the
lot, it being her exclusive property, but the
house belongs to the conjugal partnership. (D)
The house and lot shall both belong to the
conjugal partnership, with Josie entitled to
reimbursement for the value of the lot.
Section 4. Charges Upon and Obligations of
the Conjugal Partnership
Art. 121. The conjugal partnership shall be liable
for:
(1) The support of the spouse, their
common children, and the legitimate
children of either spouse; however, the
support of illegitimate children shall be
governed by the provisions of this Code on
Support;
(2) All debts and obligations contracted
during the marriage by the designated
administrator-spouse for the benefit of the
conjugal partnership of gains, or by both
spouses or by one of them with the consent
of the other;
(3) Debts and obligations contracted by
either spouse without the consent of the
other to the extent that the family may have
benefited;
(4) All taxes, liens, charges, and expenses,
including major or minor repairs upon the
conjugal partnership property;
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(5) All taxes and expenses for mere
preservation made during the marriage
upon the separate property of either
spouse;
(6) Expenses to enable either spouse to
commence or complete a professional,
vocational, or other activity for self-
improvement;
(7) Ante-nuptial debts of either spouse
insofar as they have redounded to the
benefit of the family;
(8) The value of what is donated or
promised by both spouses in favor of their
common legitimate children for the
exclusive purpose of commencing or
completing a professional or vocational
course or other activity for self-
improvement; and
(9) Expenses of litigation between the
spouses unless the suit is found to
groundless.
If the conjugal partnership is insufficient to cover the
foregoing liabilities, the spouses shall be solidarily
liable for the unpaid balance with their separate
properties. (161a)
NOTE: Medical expenses incurred for the treatment
of the head of the family always redound to the
benefit of the family.
Art. 122. The payment of personal debts contracted
by the husband or the wife before or during the
marriage shall not be charged to the conjugal
properties partnership except insofar as they
redounded to the benefit of the family.
Neither shall the fines and pecuniary indemnities
imposed upon them be charged to the partnership.
However, the payment of personal debts contracted
by either spouse before the marriage, that of fines
and indemnities imposed upon them, as well as the
support of illegitimate children of either spouse,
may be enforced against the partnership assets
after the responsibilities enumerated in the
preceding Article have been covered, if the spouse
who is bound should have no exclusive property or
if it should be insufficient; but at the time of the
liquidation of the partnership, such spouse shall be
charged for what has been paid for the purpose
above-mentioned. (163a)
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Property Relations; Obligations; Benefit of the Family
(2000)
As finance officer of K and Co., Victorino arranged a loan
of P5 Million from PNB for the corporation. However, he
was required by the bank to sign a Continuing Surety
Agreement to secure the repayment of the loan. The
corporation failed to pay the loan, and the bank obtained
a judgment against it and Victorino, jointly and severally. of the conjugal properties, the other spouse may
To enforce the judgment, the sheriff levied on a farm
owned by the conjugal partnership of Victorino and his
wife Elsa. Is the levy proper or not? (3%)
SUGGESTED ANSWER:
The levy is not proper there being no showing that the
surety agreement executed by the husband redounded to
the benefit of the family. An obligation contracted by the
husband alone is chargeable against the conjugal
partnership only when it was contracted for the benefit of
the family. When the obligation was contracted on behalf
of the family business the law presumes that such
obligation will redound to the benefit of the family.
However, when the obligation was to guarantee the debt
of a third party, as in the problem, the obligation is
presumed for the benefit of the third party, not the family.
Hence, for the obligation under the surety agreement to
be chargeable against the partnership it must be proven
that the family was benefited and that the benefit was a
direct result of such agreement,
(Ayala Investment v. Ching, 286 SCRA 272)
Note: Indirect benefits that might accrue to the
husband in his signing as a surety of guarantee
agreement not in favor of his family but in favor of
his employer corporation are not benefits that can
be considered a direct advantage accruing to the
family. Hence, the creditors cannot go against the
conjugal partnership property in satisfying the
obligation subject to the surety agreement (Ayala
Investment Corp. vs. CA. GR No. 118305, Feb. 12,
1998).
Medical expenses incurred for the treatment of the
head of the family always redound to the benefit of
the family.
Art. 123. Whatever may be lost during the marriage
in any game of chance or in betting, sweepstakes,
or any other kind of gambling whether permitted or
prohibited by law, shall be borne by the loser and
shall not be charged to the conjugal partnership but
any winnings therefrom shall form part of the
conjugal partnership property. (164a)
Section 5. Administration of the
Conjugal Partnership Property
Art. 124. The administration and enjoyment of the
conjugal partnership shall belong to both spouses
jointly. In case of disagreement, the husband's
decision shall prevail, subject to recourse to the
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
court by the wife for proper remedy, which must be
availed of within five years from the date of the
contract implementing such decision.
In the event that one spouse is incapacitated or
otherwise unable to participate in the administration
assume sole powers of administration. These
powers do not include disposition or encumbrance
without authority of the court or the written consent
of the other spouse. In the absence of such
authority or consent, the disposition or
encumbrance shall be void. However, the
transaction shall be construed as a continuing offer
on the part of the consenting spouse and the third
person, and may be perfected as a binding contract
upon the acceptance by the other spouse or
authorization by the court before the offer is
withdrawn by either or both offerors. (165a)
NOTES:
 Consent during the negotiation stage is NOT
consent in the perfection stage.
 When the wife signed as a witness (instead of
signing as a co-vendor with his husband) is a
VALID consent. Consent may be in any form
(Pelayo vs. CA).
Art. 125. Neither spouse may donate any conjugal
partnership property without the consent of the
other. However, either spouse may, without the
consent of the other, make moderate donations
from the conjugal partnership property for charity or
on occasions of family rejoicing or family distress.
(174a)
Section 6. Dissolution of Conjugal Partnership
Regime
Art. 126. The conjugal partnership terminates:
(1) Upon the death of either spouse;
(2) When there is a decree of legal separation;
(3) When the marriage is annulled or declared
void; or
(4) In case of judicial separation of property
during the marriage under Articles 134 to 138.
(175a)
Art. 127. The separation in fact between husband
and wife shall not affect the regime of conjugal
partnership, except that:
(1) The spouse who leaves the conjugal home
or refuses to live therein, without just cause,
shall not have the right to be supported;
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(2) When the consent of one spouse to any
transaction of the other is required by law,
judicial authorization shall be obtained in a
summary proceeding;
(3) In the absence of sufficient conjugal
partnership property, the separate property of
both spouses shall be solidarily liable for the
support of the family. The spouse present shall,
upon petition in a summary proceeding, be
given judicial authority to administer or
encumber any specific separate property of the
other spouse and use the fruits or proceeds
thereof to satisfy the latter's share. (178a)
Art. 128. If a spouse without just cause abandons
the other or fails to comply with his or her obligation
to the family, the aggrieved spouse may petition the
court for receivership, for judicial separation of
property, or for authority to be the sole administrator
of the conjugal partnership property, subject to such
precautionary conditions as the court may impose.
The obligations to the family mentioned in the
preceding paragraph refer to marital, parental or
property relations.
A spouse is deemed to have abandoned the other
when he or she has left the conjugal dwelling
without intention of returning. The spouse who has
left the conjugal dwelling for a period of three
months or has failed within the same period to give
any information as to his or her whereabouts shall
be prima facie presumed to have no intention of
returning to the conjugal dwelling. (167a, 191a)
Section 7. Liquidation of the
Conjugal Partnership Assets and Liabilities
Art. 129. Upon the dissolution of the conjugal
partnership regime, the following procedure shall
apply:
(1) An inventory shall be prepared, listing
separately all the properties of the conjugal
partnership and the exclusive properties of each
spouse.
(2) Amounts advanced by the conjugal
partnership in payment of personal debts and
obligations of either spouse shall be credited to
the conjugal partnership as an asset thereof.
(3) Each spouse shall be reimbursed for the use
of his or her exclusive funds in the acquisition of
property or for the value of his or her exclusive
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
property, the ownership of which has been
vested by law in the conjugal partnership.
(4) The debts and obligations of the conjugal
partnership shall be paid out of the conjugal
assets. In case of insufficiency of said assets,
the spouses shall be solidarily liable for the
unpaid balance with their separate properties, in
accordance with the provisions of paragraph (2)
of Article 121.
(5) Whatever remains of the exclusive
properties of the spouses shall thereafter be
delivered to each of them.
(6) Unless the owner had been indemnified from
whatever source, the loss or deterioration of
movables used for the benefit of the family,
belonging to either spouse, even due to
fortuitous event, shall be paid to said spouse
from the conjugal funds, if any.
(7) The net remainder of the conjugal
partnership properties shall constitute the
profits, which shall be divided equally between
husband and wife, unless a different proportion
or division was agreed upon in the marriage
settlements or unless there has been a
voluntary waiver or forfeiture of such share as
provided in this Code.
(8) The presumptive legitimes of the common
children shall be delivered upon the partition in
accordance with Article 51.
(9) In the partition of the properties, the conjugal
dwelling and the lot on which it is situated shall,
unless otherwise agreed upon by the parties, be
adjudicated to the spouse with whom the
majority of the common children choose to
remain. Children below the age of seven years
are deemed to have chosen the mother, unless
the court has decided otherwise. In case there
is no such majority, the court shall decide,
taking into consideration the best interests of
said children. (181a, 182a, 183a, 184a, 185a)
Art. 130. Upon the termination of the marriage by
death, the conjugal partnership property shall be
liquidated in the same proceeding for the settlement
of the estate of the deceased.
If no judicial settlement proceeding is instituted, the
surviving spouse shall liquidate the conjugal
partnership property either judicially or extra-
judicially within six months from the death of the
deceased spouse. If upon the lapse of the six-
month period no liquidation is made, any disposition
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or encumbrance involving the conjugal partnership
property of the terminated marriage shall be void.
Should the surviving spouse contract a subsequent
marriage without compliance with the foregoing
requirements, a mandatory regime of complete
separation of property shall govern the property
relations of the subsequent marriage. (n)
Art. 131. Whenever the liquidation of the conjugal
partnership properties of two or more marriages
contracted by the same person before the effectivity
of this Code is carried out simultaneously, the
respective capital, fruits and income of each
partnership shall be determined upon such proof as
may be considered according to the rules of
evidence. In case of doubt as to which partnership
the existing properties belong, the same shall be
divided between the different partnerships in
proportion to the capital and duration of each.
(189a)
Art. 132. The Rules of Court on the administration
of estates of deceased persons shall be observed
in the appraisal and sale of property of the conjugal
partnership, and other matters which are not
expressly determined in this Chapter. (187a)
Art. 133. From the common mass of property
support shall be given to the surviving spouse and
to the children during the liquidation of the
inventoried property and until what belongs to them
is delivered; but from this shall be deducted that
amount received for support which exceeds the
fruits or rents pertaining to them. (188a)
Note: Prior to the liquidation of the conjugal
partnership, the interest of each spouse in the
conjugal assets is inchoate, a mere expectancy,
which constitutes neither a legal nor an equitable
estate, and does not ripen into title until it appears
that there are assets in the community as a result of
liquidation and settlement.. The interest of each
spouse is limited to the net remainder resulting from
the liquidation after the dissolution (Abalos vs.
Macatangay, 439 SCRA 649, [2004]).
ABSOLUTE CONJUGAL
COMMUNITY OF PARTNERSHIP OF
PROPERTY GAINS
Each spouse retains
All the properties owned his/her property before
by the spouses at the the marriage and only
time of marriage the fruits and income of
become community such properties become
property part of the conjugal
properties during the
marriage
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Upon dissolution and Upon dissolution and
liquidation of the liquidation, the separate
community property, properties of the
what is divided equally spouses are returned
between the spuses or and only the net profits
the heirs is the net of the partnership are
remainder of the divided equally between
properties of the ACP the spouses or their
heirs.
Chapter 5. Separation of Property of the
Spouses and Administration of Common
Property by
One Spouse During the Marriage
Art. 134. In the absence of an express declaration
in the marriage settlements, the separation of
property between spouses during the marriage shall
not take place except by judicial order. Such judicial
separation of property may either be voluntary or for
sufficient cause. (190a)
2012 Bar Exam Question
23. Separation of property between spouses
during the marriage may take place only: a) by
agreement of the spouses. b) If one of the
spouses has given ground for legal separation.
c) Upon order of the court. d) If one spouse
has abandoned the other.
Property Relations; Marriage Settlement; Conjugal
Partnership of Gains (2005)
Gabby and Mila got married at Lourdes Church in
Quezon City on July 10, 1990. Prior thereto, they
executed a marriage settlement whereby they agreed on
the regime of conjugal partnership of gains. The marriage
settlement was registered in the Register of Deeds of
Manila, where Mila is a resident. In 1992, they jointly
acquired a residential house and lot, as well as a
condominium unit in Makati. In 1995, they decided to
change their property relations to the regime of complete
separation of property. Mila consented, as she was then
engaged in a lucrative business. The spouses then
signed a private document dissolving their conjugal
partnership and agreeing on a complete separation of
property.
Thereafter, Gabby acquired a mansion in Baguio City,
and a Bar Candidates Patricio Mahigugmaon and
Rowena Amor 5-hectare agricultural land in Oriental
Mindoro, which he registered exclusively in his name. In
the year 2000, Mila's business venture failed, and her
creditors sued her for P10,000,000.00. After obtaining a
favorable judgment, the creditors sought to execute on
the spouses' house and lot and condominium unit, as well
as Gabby's mansion and agricultural land.
a) Discuss the status of the first and the amended
marriage settlements. (2%)
SUGGESTED ANSWER:
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The marriage settlement between Gabby and Mila
adopting the regime of conjugal partnership of gains still
subsists. It is not dissolved by the mere agreement of the
spouses during the marriage. It is clear from Article 134
of the Family Code that in the absence of an express
declaration in the marriage settlement, the separation of
property between the spouses during the marriage shall
not take place except by judicial order.
b) Discuss the effects of the said settlements on the
properties acquired by the spouses. (2%)
SUGGESTED ANSWER:
The regime of conjugal partnership of gains governs the
properties acquired by the spouses. All the properties
acquired by the spouses after the marriage belong to the
conjugal partnership. Under Article 116 of the Family
Code, even if Gabby registered the mansion and 5-
hectare agricultural land exclusively in his name, still they
are presumed to be conjugal properties, unless the
contrary is proved.
c) What properties may be held answerable for Mila's
obligations? Explain. (2%)
ALTERNATIVE ANSWER:
Since all the properties are conjugal, they can be held
answerable for Mila's obligation if the obligation
redounded to the benefit of the family. (Art. 121 [3],
Family Code) However, the burden of proof lies with the
creditor claiming against the properties. (Ayala
Investment v. Court of Appeals, G.R. No. 118305,
February 12,1998, reiterated in Homeowners Savings &
Loan Bank v. Dailo, G.R. No. 153802, March 11, 2005)
ALTERNATIVE ANSWER:
Except for the residential house which is the family home,
all other properties of Gabby and Mila may be held
answerable for Mila's obligation. Since the said properties
are conjugal in nature, they can be held liable for debts
and obligations contracted during the marriage to the
extent that the family was benefited or where the debts
were contracted by both spouses, or by one of them, with
the consent of the other.
A family home is a dwelling place of a person and his
family. It confers upon a family the right to enjoy such
property, which must remain with the person constituting
it as a family home and his heirs. It cannot be seized by
creditors except in special cases. (Taneo, Jr. v. Court of
Appeals, G.R. No. 108532, March 9, 1999)
Art. 135. Any of the following shall be
considered sufficient cause for judicial
separation of property:
(1) That the spouse of the petitioner has been
sentenced to a penalty which carries with it civil
interdiction;
(2) That the spouse of the petitioner has been
judicially declared an absentee;
(3) That loss of parental authority of the spouse
of petitioner has been decreed by the court;
(4) That the spouse of the petitioner has
abandoned the latter or failed to comply with his
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
or her obligations to the family as provided for in
Article 101;
(5) That the spouse granted the power of
administration in the marriage settlements has
abused that power; and
(6) That at the time of the petition, the spouses
have been separated in fact for at least one
year and reconciliation is highly improbable.
In the cases provided for in Numbers (1), (2) and
(3), the presentation of the final judgment against
the guilty or absent spouse shall be enough basis
for the grant of the decree of judicial separation of
property. (191a)
Art. 136. The spouses may jointly file a verified
petition with the court for the voluntary dissolution of
the absolute community or the conjugal partnership
of gains, and for the separation of their common
properties.
All creditors of the absolute community or of the
conjugal partnership of gains, as well as the
personal creditors of the spouse, shall be listed in
the petition and notified of the filing thereof. The
court shall take measures to protect the creditors
and other persons with pecuniary interest. (191a)
Art. 137. Once the separation of property has been
decreed, the absolute community or the conjugal
partnership of gains shall be liquidated in conformity
with this Code.
During the pendency of the proceedings for
separation of property, the absolute community or
the conjugal partnership shall pay for the support of
the spouses and their children. (192a)
Art. 138. After dissolution of the absolute
community or of the conjugal partnership, the
provisions on complete separation of property shall
apply. (191a)
Art. 139. The petition for separation of property and
the final judgment granting the same shall be
recorded in the proper local civil registries and
registries of property. (193a)
Art. 140. The separation of property shall not
prejudice the rights previously acquired by
creditors. (194a)
Art. 141. The spouses may, in the same
proceedings where separation of property was
decreed, file a motion in court for a decree
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reviving the property regime that existed
between them before the separation of property
in any of the following instances:
(1) When the civil interdiction terminates;
(2) When the absentee spouse reappears;
(3) When the court, being satisfied that the
spouse granted the power of administration in
the marriage settlements will not again abuse
that power, authorizes the resumption of said
administration;
(4) When the spouse who has left the conjugal
home without a decree of legal separation
resumes common life with the other;
(5) When parental authority is judicially restored
to the spouse previously deprived thereof;
(6) When the spouses who have separated in
fact for at least one year, reconcile and resume
common life; or
(7) When after voluntary dissolution of the
absolute community of property or conjugal
partnership has been judicially decreed upon
the joint petition of the spouses, they agree to
the revival of the former property regime. No
voluntary separation of property may thereafter
be granted.
The revival of the former property regime shall be
governed by Article 67. (195a)
Art. 142. The administration of all classes of
exclusive property of either spouse may be
transferred by the court to the other spouse:
(1) When one spouse becomes the guardian of
the other;
(2) When one spouse is judicially declared an
absentee;
(3) When one spouse is sentenced to a penalty
which carries with it civil interdiction; or
(4) When one spouse becomes a fugitive from
justice or is in hiding as an accused in a criminal
case.
If the other spouse is not qualified by reason of
incompetence, conflict of interest, or any other just
cause, the court shall appoint a suitable person to
be the administrator. (n)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Chapter 6. Regime of Separation of Property
Art. 143. Should the future spouses agree in the
marriage settlements that their property relations
during marriage shall be governed by the regime of
separation of property, the provisions of this
Chapter shall be suppletory. (212a)
Art. 144. Separation of property may refer to
present or future property or both. It may be total or
partial. In the latter case, the property not agreed
upon as separate shall pertain to the absolute
community. (213a)
Art. 145. Each spouse shall own, dispose of,
possess, administer and enjoy his or her own
separate estate, without need of the consent of the
other. To each spouse shall belong all earnings
from his or her profession, business or industry and
all fruits, natural, industrial or civil, due or received
during the marriage from his or her separate
property.(214a)
Art. 146. Both spouses shall bear the family
expenses in proportion to their income, or, in case
of insufficiency or default thereof, to the current
market value of their separate properties.
The liabilities of the spouses to creditors for family
expenses shall, however, be solidary. (215a)
Chapter 7. Property Regime of Unions
Without Marriage
2012 Bar Exam Question
12. In the absence of contrary stipulation in a
marriage settlement, property relations of
Filipino spouses shall be governed by --- a)
Philippines laws b) Law of the place where the
spouses reside c) Law of the place where the
properties are situated d) Law of the place
where they were married.
Art. 147. When a man and a woman who are
capacitated to marry each other, live exclusively
with each other as husband and wife without the
benefit of marriage or under a void marriage, their
wages and salaries shall be owned by them in
equal shares and the property acquired by both of
them through their work or industry shall be
governed by the rules on co-ownership.
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In the absence of proof to the contrary, properties SUGGESTED ANSWER:
acquired while they lived together shall be B. The provisions of Art 148 of the Family Code, shall
presumed to have been obtained by their joint govern: Art. 148. In cases of cohabitation not falling under
efforts, work or industry, and shall be owned by of the parties through their actual joint contribution of
money, property, or industry shall be owned by them in
them in equal shares. For purposes of this Article, a common in proportion to their respective contributions. In
party who did not participate in the acquisition by the absence, of proof to the contrary, their contributions
the other party of any property shall be deemed to and corresponding shares are presumed to be equal. The
have contributed jointly in the acquisition thereof if same rule and presumption shall apply to joint deposits of
the former's efforts consisted in the care and money and evidences of credit.
maintenance of the family and of the household. SUGGESTED ANSWER:
C. It should be distinguished when the property was
acquired.
Neither party can encumber or dispose by acts inter • If it was acquired before Mary's death, the estate of
vivos of his or her share in the property acquired Mary is entitled to 1/2 of the share of James.
during cohabitation and owned in common, without • If it was acquired after Mary's death, there will be no
the consent of the other, until after the termination share at all for the estate of Mary.
of their cohabitation.
2011 Bar Exam
When only one of the parties to a void marriage is (97) Venecio and Ester lived as common-law
in good faith, the share of the party in bad faith in spouses since both have been married to other
the co-ownership shall be forfeited in favor of their persons from whom they had been separated
common children. In case of default of or waiver by in fact for several years. Hardworking and
any or all of the common children or their bright, each earned incomes from their
descendants, each vacant share shall belong to the respective professions and enterprises. What is
respective surviving descendants. In the absence of the nature of their incomes? (A) Conjugal since
descendants, such share shall belong to the they earned the same while living as husband
innocent party. In all cases, the forfeiture shall take and wife.
place upon termination of the cohabitation. (144a) (B) Separate since their property relations
with their legal spouses are still subsisting.
Marriage; Property Relations; Void Marriages (1991) (C) Co-ownership since they agreed to work for
In June 1985, James married Mary. In September 1988, their mutual benefit. (D) Communal since they
he also married Ophelia with whom he begot two (2) earned the same as common-law spouses.
children, A and B. In July 1989, Mary died. In July 1990,
he married Shirley and abandoned Ophelia, During their
union. James and Ophelia acquired a residential lot worth Marriage; Void Marriages; Property
P300,000.00. Relations (2009)
Ophelia sues James for bigamy and prays that his
marriage with Shirley be declared null and void. James,
No. III. In December 2000, Michael and Anna,
on the other hand, claims that since his marriage to after obtaining a valid marriage license, went
Ophelia was contracted during the existence of his to the Office of the Mayor of Urbano, Bulacan,
marriage with Mary, the former is not binding upon him, to get married. The Mayor was not there, but
the same being void ab initio he further claims that his the Mayor’s secretary asked Michael and Anna
marriage to Shirley is valid and binding as he was already and their witnesses to fill up and sign the
legally capacitated at the time he married her. a) Is the required marriage contract forms. The
contention of James correct? b) What property Relations
secretary then told them to wait, and went out
governed the union of James
and Ophelia? c) Is the estate of Mary entitled to a share to look for the Mayor who was attending a
in the residential lot acquired by James and Ophelia? wedding in a neighboring municipality. When
SUGGESTED ANSWER: the secretary caught up with the Mayor at the
A. Yes. His marriage to Ophelia is void ab initio because wedding reception, she showed him the
of his subsisting prior marriage to Mary. His marriage to marriage contract forms and told him that the
Shirley, after Mary's death, is valid and binding. couple and their witnesses were waiting in his
ALTERNATIVE ANSWER:
office. The Mayor forthwith signed all the
A. No. The contention of James is not correct. Art. 40,
Family Code, provides that the "absolute nullity of a
copies of the marriage contract, gave them to
previous marriage may be invoked for purposes of the secretary who returned to the Mayor’s
remarriage on the basis solely of a final judgment office. She then gave copies of the marriage
declaring such previous marriage void." It can be said, contract to the parties, and told Michael and
therefore, that the marriage of James to Shirley is void Anna that they were already married.
since his previous marriage to Ophelia, although itself Thereafter, the couple lived together as
void, had not yet been judicially declared void, husband and wife, and had three sons. (C).
ALTERNATIVE ANSWER:
What property regime governs the properties
A. No. The contention of James is not correct. He cannot
set up as a defense his own criminal act or wrongdoing-
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 79
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acquired by the couple? Explain. (2%)
SUGGESTED ANSWER:
The marriage being void, the property
relationship that governed their union is special
co-ownership under Article 147 of the Family
Code. This is on the assumption that there was
no impediment for them to validly marry each
other.
QA. When A and B married, they chose conjugal
partnership of gains to govern their property
relations. After 3 years, B succeeded in getting her
marriage to A annulled on ground of the latter’s
psychological incapacity. What liquidation
procedure will they follow in disposing of their
assets?
A. They will follow the rule governing the liquidation
of a conjugal partnership of gains where the party
who acted in bad faith forfeits his share in the net
profits.
B. Since the marriage has been declared void, the
rule for liquidation of absolute community of
property shall be followed.
C. The liquidation of a co-ownership applies since
the annulment brought their property relation under
the chapter on property regimes without marriage.
D. The law on liquidation of partnerships applies.
Property Relations; Unions without Marriage (1992)
In 1989, Rico, then a widower forty (40) years of age,
cohabited with Cora, a widow thirty (30) years of age.
While living together, they acquired from their combined
earnings a parcel of riceland.
After Rico and Cora separated, Rico lived together with
Mabel, a maiden sixteen (16) years of age. While living
house for Rico and did full-time household chores for him.
During their cohabitation, a parcel of coconut land was
acquired by Rico from his savings.
After living together for one (1) year, Rico and Mabel
separated. Rico then met and married Letty, a single
woman twenty-six (26) years of age. During the marriage
of Rico and Letty, Letty bought a mango orchard out of
her own personal earnings. a) Who would own the
riceland, and what property Relations governs the
ownership? Explain. b) Who would own the coconut land,
and what property Relations governs the ownership?
Explain. c) Who would own the mango orchard, and
what property Relations governs the ownership? Explain.
SUGGESTED ANSWER:
(a) Rico and Cora are the co-owners of the riceland. The
Relations is that of co-ownership (Art. 147, Family Code,
first paragraph).
(Optional Addendum: However, after Rico's marriage to
Letty, the half interest of Rico in the riceland will then
become absolute community property of Rico and Letty.)
(b) Rico is the exclusive owner of the coconut land. The
Relations is a sole/single proprietorship (Art. 148. Family
Code, first paragraph is applicable, and not Art. 147
Family Code).
(Optional Addendum: However, after Rico's marriage to
Letty, the coconut land of Rico will then become absolute
community property of Rico and Letty.)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(c) Rico and Letty are the co-owners. The Relations is the
Absolute Community of Property (Arts, 75,90and9l,
Family Code).
Property Relations; Unions without Marriage (1997)
Luis and Rizza, both 26 years of age and single, live
exclusively with each other as husband and wife without
the benefit of marriage, Luis is gainfully employed, Rizza
is not employed, stays at home, and takes charge of the
household chores. After living together for a little over
twenty years, Luis was able to save from his salary
earnings during that period the amount of P200,000.00
presently deposited in a bank. A house and lot worth
P500,000.00 was recently purchased for the same
amount by the couple. Of the P500.000.00 used by the
common-law spouses to purchase the property,
P200.000.00 had come from the sale of palay harvested
from the hacienda owned by Luis and P300,000.00 from
the rentals of a building belonging to Rizza. In fine, the
sum of P500.000.00 had been part of the fruits received
during the period of cohabitation from their separate
property, a car worth P100.000.00. being used by the
common-law spouses, was donated Just months ago to
Rizza by her parents. Luis and Rizza now decide to
terminate their cohabitation, and they ask you to give
them your legal advice on the following:
(a) How, under the law should the bank deposit of
P200,000.00 the house and lot valued at P500.000.00
and the car worth P100.000.00 be allocated to them?
(b) What would your answer be (to the above question)
had
a) Who will be entitled to the house and lot? (3%)
Luis and Rizza been living together all the time, ie., since
twenty years ago, under a valid marriage?
SUGGESTED ANSWER:
a) Art. 147 of the Family Code provides in part that when
a man and a woman who are capacitated to marry each
other, live exclusively with each other as husband and
wife without the benefit of marriage or under a void
marriage, their wages and salaries shall be owned by
them in equal shares and the property acquired by both
of them through their work or industry shall be governed
by the rules of co¬ownership. In the absence of proof to
the contrary, properties acquired while they lived together
shall be presumed to have been obtained by their Joint
efforts, worker Industry, and shall be owned by them in
equal shares. A party who did not participate in the
acquisition by the other party of any property shall be
deemed to have contributed jointly in the acquisition
thereof if the former's efforts consisted in the care and
maintenance of the family and of the household. Thus: 1)
the wages and salaries of Luis in the amount of
P200,000.00 shall be divided equally between Luis and
Rizza. 2) the house and lot valued at P500.000.00 having
been acquired by both of them through work or industry
shall be divided between them in proportion to their
respective contribution, in consonance with the rules on
co-ownership. Hence, Luis gets 2\5 while Rizza gets 3\5
of P500.000.00. 3) the car worth P100,000.00 shall be
exclusively owned by Rizza, the same having been
donated to her by her parents.
SUGGESTED ANSWER:
(b) The property relations between Luis and Rizza, their
marriage having been celebrated 20 years ago (under the
Civil Code) shall be governed by the conjugal partnership
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of gains, under which the husband and wife place in a
common fund the proceeds, products, fruits and income
from their separate properties and those acquired by
either or both spouses through their efforts or by chance,
and upon dissolution of the marriage or of the
partnership, the net gains or benefits obtained by either
or both spouse shall be divided equally between them
(Art. 142. Civil Code). Thus: 1) The salary of Luis
deposited in the bank in the amount of P200.000.00 and
the house and lot valued at P500,000.00 shall be divided
equally between Luis and Rizza. 2) However, the car
worth P100.000,00 donated to Rizza by her parents shall
be considered to her own paraphernal property, having
been acquired by lucrative title (par. 2, Art. 148, Civil
Code).
Property Relations; Unions without Marriage (2000)
For five years since 1989, Tony, a bank Vice-president,
and Susan, an entertainer, lived together as husband and
wife without the benefit of marriage although they were
capacitated to many each other. Since Tony's salary was
more than enough for their needs, Susan stopped
working and merely "kept house". During that period,
Tony was able to buy a lot and house in a plush
subdivision. However, after five years, Tony and Susan
decided to separate.
SUGGESTED ANSWER:
Tony and Susan are entitled to the house and lot as
co¬owners in equal shares. Under Article 147 of the
Family Code, when a man and a woman who are
capacitated to marry each other lived exclusively with
each other as husband and wife, the property acquired
during their cohabitation are presumed to have been
obtained by their joint efforts, work or industry and shall
be owned by them in equal shares. This is true even
though the efforts of one of them consisted merely in his
or her care and maintenance of the family and of the
household.
b) Would it make any difference if Tony could not marry
Susan because he was previously married to Alice from
whom he is legally separated? (2%)
SUGGESTED ANSWER:
Yes, it would make a difference. Under Article 148 of the
Family Code, when the parties to the cohabitation could
not marry each other because of an impediment, only
those properties acquired by both of them through their
actual joint contribution of money, property, or Industry
shall be owned by them in common in proportion to their
respective contributions. The efforts of one of the parties
in maintaining the family and household are not
considered adequate contribution in the acquisition of the
properties.
Since Susan did not contribute to the acquisition of the
house and lot, she has no share therein. If Tony
cohabited with Susan after his legal separation from
Alice, the house and lot is his exclusive property. If he
cohabited with Susan before his legal separation from
Alice, the house and lot belongs to his community or
partnership with Alice.
Property Relations; Unions Without
Marriage (2012) No.V. b) Jambrich, an
Austrian, fell in-love and lived together with
Descallar and bought their houses and lots at
Agro-Macro Subdivision. In the Contracts to
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Sell, Jambrich and Descallar were referred to
as the buyers. When the Deed of Absolute Sale
was presented for registration before the
Register of Deeds, it was refused because
Jambrich was an alien and could not acquire
alienable lands of the public domain. After
Jambrich and Descallar separated, Jambrich
purchased an engine and some accessories for
his boat from Borromeo. To pay for his debt,
he sold his rights and interests in the Agro-
Macro properties to Borromeo. Borromeo
discovered that titles to the three (3) lots have
been transfereed in the name of Descallar.
Who is the rightful owner of the properties?
Explain. (5%)
SUGGESTED ANSWER: It depends. On the
assumption that the Family Code is the
applicable law, the ownership of the
properties depends on whether or not,
Jambrich and Descallar are capacitated to
marry each other during their cohabitation,
and whether or not both have contributed
funds for the acquisition of the properties.
If both of them are capacitated to marry
each other, Art 147- co-ownership will
apply to their property relations and the
properties in question are owned by them
in equal shares even though all the funds
used in acquiring the properties came only
from the salaries or wages, or the income of
Jambrich from his business or profession.
In such case, while Jambrich is disqualified
to own any part of the properties, his
subsequent transfer of all his interest
therein to Borromeo, a Filipino, was valid
as it removed the disqualification. In such
case, the properties are owned by Borromeo
and Descallar in equal shares.
If, on the other hand, Jambrich and Descallar
were not capacitated to marry each other Art.
148-co-ownership governs their property
relations. Under this regime, Jambrich and
Descallar are co-owners of the properties but
only if both of them contributed in their
acquisition. If all the funds used in acquiring the
properties in question came from Jambrich, the
entire property is his even though he is
disqualified from owning it. His subsequent
transfer to Borromeo, however, is valid as it
removed the disqualification. In such case, all
the properties are owned by Borromeo. If, on
the other hand Descallar contributed to their
acquisition, the properties are co-owned by
Descallar and Borromeo in proportion to the
respective contributions of the Descallar and
Jambrich. Note: The facts of the problem are
not exactly the same as in the case of Borromeo
v. Descallar, G.R. NO. 159310, Feb 24, 2009,
hence, the difference in the resulting answer.
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Property Relations; Void Marriages (2010)
No.VII. G and B were married on July 3, 1989.
On March 4, 2001, the marriage, which bore
no offspring, was declared void ab initio under
Article 36 of the Family Code. At the time of
the dissolution of the marriage, the couple
possessed the following properties:
a house and lot acquired by B on August 3,
1988, one third (1/3) of the purchase price
(representing downpayment) of which he paid;
one third (1/3) was paid by G on February 14,
1990 out of a cash gift given to her by her
parents on her graduation on April 6, 1989;
and the balance was paid out of the spouses’
joint income; and
an apartment unit donated to B by an uncle
on June 19, 1987.
(A) Who owns the foregoing properties?
Explain. (5%) SUGGESTED ANSWER: Since
the marriage was declared void ab initio in
2001, no Absolute Community or Conjugal
Partnership was ever established between B
and G. Their property relation is governed
by a “special co-ownership” under Article
147 of the Family Code because they were
capacitated to marry each other.
Under that Article 147, wages and salaries
of the “former spouses” earned during their
cohabitation shall be owned by them in
equal shares while properties acquired thru
their work for industry shall be owned by
them in proportion to their respective
contributions. Care and maintenance of the
family is recognized as a valuable
contribution. In the absence of proof as to
the value of their respective contributions,
they shall share equally. If ownership of the
house and lot was acquired by B on August
3, 1988 at the time he bought it on
installment before he got married, he shall
remain owner of the house and lot but he
must reimburse G for all the amounts she
advanced to pay the purchase price and for
one-half share in the last payment from
their joint income. In such case, the house
and lot were not acquired during their
cohabitation, hence, are not co-owned by B
and G. But if the ownership of the house
and lot was acquired during the
cohabitation, the house and lot will be
owned as follows: (1) 1/3 of the house and
lot is owned by B. He is an undivided co-
owner to that extent for his contributions
in its acquisition in the form of the down
payment he made before the celebration of
the marriage. The money he used to pay
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
the down payment was not earned during
the cohabitation, hence, it is his exclusive
property.
(2) 1/3 of the house and lot is owned by G.
She is an undivided co-owner to the extent
for her contribution in its acquisition when
she paid 1/3 of the purchase price using
the gift from her parents. Although the gift
was acquired by G during her cohabitation
with B, it is her exclusive property. It did
not consist of wage or salary or fruit of her
work or industry. (3) 1/3 of the house is co-
owned by B and G because the payment
came from their co-owned funds, i.e., their
joint income during their cohabitation
which is shared by them equally in the
absence of any proof to the contrary. After
summing up their prospective shares, B and
G are undivided co-owners of the house and
lot in equal shares. As to the apartment, it
is owned exclusive by B because he
acquired it before their cohabitation. Even
if he acquired it during their cohabitation,
it will still be his exclusive property
because it did not come from his wage or
salary, or from his work or industry. It was
acquired gratuitously from his uncle.
(B) If G and B had married on July 3, 1987
and their marriage was dissolved in 2007, who
owns the properties? Explain. (5%)
SUGGESTED ANSWER: The answer is the
same as in letter A. Since the parties to the
marriage which was later declared void ab
initio were capacitated to marry each
other, the applicable law under the New
Civil Code was Article 144.This Article is
substantially the same as Article 147 of the
Family Code. Hence, the determination of
ownership will remain the same as in
question A. And even assuming that the
two provisions are not the same, Article
147 of the Family Code is still the law that
will govern the property relations of B and
G because under Article 256, the Family
Code has retroactive effect insofar as it
does not prejudice or impair vested or
acquired rights under the new Civil Code or
other laws. Applying Article 147
retroactively to the case of G and B will not
impair any vested right. Until the
declaration of nullity of the marriage under
the Family Code, B and G have not as yet
acquired any vested right over the
properties acquired during their
cohabitation.
Property Relations; Void Marriages (2010)
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No.X. In 1997, B and G started living together
without the benefit of marriage. The
relationship produced one offspring, Venus.
The couple acquired a residential lot in
Parañaque. After four (4) years or in 2001, G
having completed her 4-year college degree as
a fulltime student, she and B contracted
marriage without a license. The marriage of B
and G was, two years later, declared null and
void due to the absence of a marriage license.
(A). If you were the judge who declared the
nullity of the marriage, to whom would you
award the lot? Explain briefly. (3%)
SUGGESTED ANSWER:
Since the marriage was null and void, no
Absolute Community or Conjugal
Partnership was established between B and
G. Their properties are governed by the
“special co-ownership” provision of Article
147 of the Family Code because both B and
G were capacitated to marry each other.
The said Article provides that when a man
and a woman who are capacitated to marry
each other, live exclusively with each other
as husband and wife without the benefit of
marriage, or under a void marriage: (1) their
wages and salaries shall be owned by them
in equal shares; and (2) property acquired
by both of them through their work or
industry shall be governed by the rules on
co-ownership. In co-ownership, the parties
are co-owners if they contributed
something of value in the acquisition of the
property. Their share is in proportion to
their respective contributions. In an
ordinary co- ownership the care and
maintenance of the family is not
recognized as a valuable contribution for
the acquisition of a property. In the Article
147 “special co-ownership” however, care
and maintenance is recognized as a
valuable contribution which will entitle the
contributor to half of the property
acquired. Having been acquired during their
cohabitation, the residential lot is
presumed acquired through their joint work
and industry under Article 147, hence, B
and G are co-owners of the said property in
equal shares. Article 147 also provides that
when a party to the void marriage was in
bad faith, he forfeits his share in the co-
ownership in favor of the common children
or descendants, the default of children or
descendants, the forfeited share shall
belong to the innocent party. In the
foregoing problem, there is no showing that
one party was in bad faith. Hence, both
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
shall be presumed in good faith and no
forfeiture shall take place.
Art. 148. In cases of cohabitation not falling under
the preceding Article, only the properties acquired
by both of the parties through their actual joint
contribution of money, property, or industry shall be
owned by them in common in proportion to their
respective contributions. In the absence of proof to
the contrary, their contributions and corresponding
shares are presumed to be equal. The same rule
and presumption shall apply to joint deposits of
money and evidences of credit.
If one of the parties is validly married to another, his
or her share in the co-ownership shall accrue to the
absolute community or conjugal partnership existing
in such valid marriage. If the party who acted in bad
faith is not validly married to another, his or her
shall be forfeited in the manner provided in the last
paragraph of the preceding Article.
The foregoing rules on forfeiture shall likewise apply
even if both parties are in bad faith. (144a)
Property Relations; Adulterous
Relationship (2009)
No. XI. TRUE or FALSE. Answer TRUE if the
statement is true, or FALSE if the statement is
false. Explain your answer in not more than
two (2) sentences. (B). If there is no marriage
settlement, the salary of a "spouse" in an
adulterous marriage belongs to the conjugal
partnership of gains. (1%) SUGGESTED
ANSWER: False. In adulterous relationship,
the salary of a married partner belongs to
the absolute community, or conjugal
partnership, of such married partner with
his or her lawful spouse. Under Articles 148
of the Family Code, the property relations
between married partner and his/her
paramour is governed by ordinary
coownership where the partners become
coowners only when they contributed to
the acquisition of the property. The
paramour is deemed to have not
contributed in the earning of the salary of
the married partner.
Notes:
Art. 148 is the property regime that will apply in
case where the partners have legal impediment to
marry each other. In this property regime, only the
property acquired by them through their actual joint
contribution of money, property or industry shall be
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owned by them in common and in proportion to
their respective contributions. The registration of a
property in the name of the paramour who had no
income whatsoever at the time of the donation by a
husband is tantamount to a donation which is void
under art 87 of FC. The paramour then holds the
property under a constructive trust under art. 1456,
NCC in favor of the conjugal partnership of the
husband with the legitimate spouse (Joaquino vs.
Reyes, 434 SCRA 260, [2004]).
NOTE: For as long as it is proven that the property
was acquired during the marriage, the presumption
of conjugality will attach regardless in whose name
the property is registered. The presumption is not
rebutted by the mere fact that the certificate of title
or the tax declaration is in the name of one of the
spouses. A reading of art. 148 shows that there
must be proof of actual joint contribution by both the
live-in partners before the property becomes co-
owned by them in proportion to their contribution.
The presumption of equality of contribution arises
only in the absence of proof of their proportionate
contribution (Villanueva vs. CA, 427 SCRA 439).
TITLE V
THE FAMILY
Chapter 1. The Family as an Institution
Art. 149. The family, being the foundation of the
nation, is a basic social institution which public
policy cherishes and protects. Consequently, family
relations are governed by law and no custom,
practice or agreement destructive of the family shall
be recognized or given effect. (216a, 218a)
Art. 150. Family relations include those:
(1) Between husband and wife;
(2) Between parents and children;
(3) Among brothers and sisters, whether of
the full or half-blood. (217a)
Art. 151. No suit between members of the same
family shall prosper unless it should appear from
the verified complaint or petition that earnest
efforts toward a compromise have been made, but
that the same have failed. If it is shown that no such
efforts were in fact made, the same case must be
dismissed.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
This rule shall not apply to cases which may not be
the subject of compromise under the Civil Code.
(222a)
Allegation of earnest efforts is jurisdictional.
However, when there is no allegation on the
complaint of earnest efforts, but before trial, the
complainant manifested his willingness for
compromise agreement, the defect was already
cured (Santos vs. Court of Appeals).
2011 Bar Exam
(84) Janice and Jennifer are sisters. Janice
sued Jennifer and Laura, Jennifer’s business
partner for recovery of property with damages.
The complaint did not allege that Janice
exerted earnest efforts to come to a
compromise with the defendants and that
such efforts failed. The judge dismissed the
complaint outright for failure to comply with a
condition precedent. Is the dismissal in order?
(A) No, since Laura is a stranger to the
sisters, Janice has no moral obligation to
settle with her. (B) Yes, since court should
promote amicable settlement among relatives.
(C) Yes, since members of the same family, as
parties to the suit, are required to exert
earnest efforts to settle their disputes before
coming to court. (D) No, the family council,
which would ordinarily mediate the dispute,
has been eliminated under the Family Code.
NOTE: Allegation of “earnest efforts” is
JURISDICTIONAL, if it is absent, the court can
dismiss the case. But this rule is inapplicable to the
following cases—
1. Civil status of persons;
2. Any ground for legal separation;
3. Validity of marriage or legal separation;
4. Future support;
5. Jurisdiction of courts;
6. Future legitimes;
7. When the proceeding is non-adversarial
(like partition);
8. If there are strangers involved in the suit.
Chapter 2. The Family Home
Art. 152. The family home, constituted jointly by the
husband and the wife or by an unmarried head of a
family, is the dwelling house where they and their
family reside, and the land on which it is situated.
(223a)
Family Home; Dwelling House (1994)
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In 1991, Victor established judicially out of conjugal
property, a family home in Manila worth P200.000.00 and
extrajudicially a second family home in Tagaytay worth
P50.000.00. Victor leased the family home in Manila to a
foreigner. Victor and his family transferred to another
house of his in Pasig. Can the two family homes be the
subject of execution on a judgment against Victor's wife
for non-payment of the purchase in 1992 of household
appliances?
SUGGESTED ANSWER:
The two (2) so-called family homes can be the subject of
execution. Neither of the abodes are considered family
homes because for purposes of availing the benefits
under the Family Code, there can only be one (1) family
home which is defined as the "dwelling house" where the
husband and the wife and their family actually "reside"
and the land on which it is situated. (Arts. 152 and 161,
Family Code)
Art. 153. The family home is deemed constituted on
a house and lot from the time it is occupied as a
family residence. From the time of its constitution
and so long as any of its beneficiaries actually
resides therein, the family home continues to be
such and is exempt from execution, forced sale or
attachment except as hereinafter provided and to
the extent of the value allowed by law. (223a)
2011 Bar Exam Question
(21) Spouses A and B leased a piece of land
belonging to B's parents for 25 years. The
spouses built their house on it worth
P300,000.00. Subsequently, in a case that C
filed against A and B, the court found the
latter liable to C for P200,000.00. When the
sheriff was attaching their house for the
satisfaction of the judgment, A and B claimed
that it was exempt from execution, being a
family home. Is this claim correct? (A) Yes,
because while B’s parents own the land, they
agreed to have their daughter build her family
home on it. (B) No, because there is no judicial
declaration that it is a family home. (C) No,
since the land does not belong to A and B,
it cannot qualify as a family home. (D) Yes,
because the A and B’s family actually lives in
that house.
Art. 154. The beneficiaries of a family home are:
(1) The husband and wife, or an unmarried
person who is the head of a family; and
(2) Their parents, ascendants,
descendants, brothers and sisters, whether
the relationship be legitimate or illegitimate,
who are living in the family home and who
depend upon the head of the family for
legal support. (226a)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 155. The family home shall be exempt from
execution, forced sale or attachment except:
(1) For nonpayment of taxes;
(2) For debts incurred prior to the constitution of
the family home;
(3) For debts secured by mortgages on the
premises before or after such constitution; and
(4) For debts due to laborers, mechanics,
architects, builders, materialmen and others
who have rendered service or furnished
material for the construction of the building.
(243a)
NOTE: Non-payment of taxes refers to taxes on the
real property levied on the land where the family
home is.
Art. 156. The family home must be part of the
properties of the absolute community or the
conjugal partnership, or of the exclusive properties
of either spouse with the latter's consent. It may
also be constituted by an unmarried head of a
family on his or her own property.
Nevertheless, property that is the subject of a
conditional sale on installments where ownership is
reserved by the vendor only to guarantee payment
of the purchase price may be constituted as a
family home. (227a, 228a)
Art. 157. The actual value of the family home shall
not exceed, at the time of its constitution, the
amount of the three hundred thousand pesos in
urban areas, and two hundred thousand pesos in
rural areas, or such amounts as may hereafter be
fixed by law.
In any event, if the value of the currency changes
after the adoption of this Code, the value most
favorable for the constitution of a family home shall
be the basis of evaluation.
For purposes of this Article, urban areas are
deemed to include chartered cities and
municipalities whose annual income at least equals
that legally required for chartered cities. All others
are deemed to be rural areas. (231a)
Art. 158. The family home may be sold, alienated,
donated, assigned or encumbered by the owner or
owners thereof with the written consent of the
person constituting the same, the latter's spouse,
and a majority of the beneficiaries of legal age. In
case of conflict, the court shall decide. (235a)
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Art. 159. The family home shall continue despite the
death of one or both spouses or of the unmarried
head of the family for a period of ten years or for as
long as there is a minor beneficiary, and the heirs
cannot partition the same unless the court finds
compelling reasons therefor. This rule shall apply
regardless of whoever owns the property or
constituted the family home. (238a)
Note: The family home must be actually used or
devoted for residential purposes by the
beneficiaries to continue to enjoy the benefit of
exemption from levy or execution.
Art. 160. When a creditor whose claims is not
among those mentioned in Article 155 obtains a
judgment in his favor, and he has reasonable
grounds to believe that the family home is actually
worth more than the maximum amount fixed in
Article 157, he may apply to the court which
rendered the judgment for an order directing the
sale of the property under execution. The court
shall so order if it finds that the actual value of the
family home exceeds the maximum amount allowed
by law as of the time of its constitution. If the
increased actual value exceeds the maximum
allowed in Article 157 and results from subsequent
voluntary improvements introduced by the person
or persons constituting the family home, by the
owner or owners of the property, or by any of the
beneficiaries, the same rule and procedure shall
apply.
At the execution sale, no bid below the value
allowed for a family home shall be considered. The
proceeds shall be applied first to the amount
mentioned in Article 157, and then to the liabilities
under the judgment and the costs. The excess, if
any, shall be delivered to the judgment debtor.
(247a, 248a)
Art. 161. For purposes of availing of the benefits of
a family home as provided for in this Chapter, a
person may constitute, or be the beneficiary of, only
one family home. (n)
Art. 162. The provisions in this Chapter shall also
govern existing family residences insofar as said
provisions are applicable. (n)
TITLE VI
PATERNITY AND FILIATION
Chapter 1. Legitimate Children
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 163. The filiation of children may be by nature
or by adoption. Natural filiation may be legitimate or
illegitimate. (n)
Art. 164. Children conceived or born during the
marriage of the parents are legitimate.
Children conceived as a result of artificial
insemination of the wife with the sperm of the
husband or that of a donor or both are likewise
legitimate children of the husband and his wife,
provided, that both of them authorized or ratified
such insemination in a written instrument
executed and signed by them before the birth of
the child. The instrument shall be recorded in the
civil registry together with the birth certificate of
the child. (55a, 258a)
Paternity & Filiation; Artificial Insemination;
Formalities(2006)
Ed and Beth have been married for 20 years without
children. Desirous to have a baby, they consulted Dr. Jun
Canlas, a , prominent medical specialist on human
fertility. He advised Beth to undergo artificial
insemination. It was found that Ed’s sperm count was
inadequate to induce pregnancy Hence, the couple
looked for a willing donor. Andy the brother of Ed, readily
consented to donate his introduced into Beth's ovary. She
became pregnant and 9 months later, gave birth to a
baby boy, named Alvin.
(1) Who is the Father of Alvin? Explain. (2.5%)
SUGGESTED ANSWER:
Andy is the biological father of Alvin being the source of
the sperm. Andy is the legal father of Alvin because there
was neither consent nor ratification to the artificial
insemination. Under the law, children conceived by
artificial insemination are legitimate children of the
spouses, provided, that both of them authorized or ratified
the insemination in a written instrument executed and
signed by both of them before the birth of the child (Art.
164, Family Code).
(2) What are the requirements, if any, in order for Ed to
establish his paternity over Alvin. (2.5%)
SUGGESTED ANSWER:
The following are the requirements for Ed to establish his
paternity over Alvin:
• The artificial insemination has been authorized
or ratified by the spouses in a written instrument executed
and signed by them before the birth of the child; and
• The written instrument is recorded in the civil
registry together with the birth certificate of the child (Art.
164, 2nd paragraph, Family Code).
2011 Bar Exam Question
(14) Arthur and Helen, both Filipinos, got
married and had 2 children. Arthur later
worked in Rome where he acquired Italian
citizenship. He got a divorce from Helen in
Rome but, on returning to the Philippines, he
realized his mistake, asked forgiveness of his
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wife, and resumed living with her. They had 2
more children. What is the status of their 4
children? (A) The children born before the
divorce are legitimate but those born after
it are not since Arthur got the divorce
when he had ceased to be a Filipino. (B) The
divorce rendered illegitimate the children born
before it since the marriage that begot them
had been nullified.
(C) The children born before and after the
divorce are all legitimate since Philippine law
does not recognize divorce.
(D) All the children are legitimate since they
were born of the same father and mother.
Paternity & Filiation; Impugning
Legitimacy (2010) No.IV. Spouses B and G
begot two offsprings. Albeit they had serious
personality differences, the spouses continued
to live under one roof. B begot a son by
another woman. G also begot a daughter by
another man. (A). If G gives the surname of B
to her daughter by another man, what can B
do to protect their legitimate children's
interests? Explain. (5%) SUGGESTED
ANSWER:
B can impugn the status of G's daughter by
another man as his legitimate daughter on the
ground that for biological reason he could not
have been the father of the child, a fact that may
be proven by the DNA test. Having been born
during the marriage between B and G, G's
daughter by another man is presumed as the
child of B under Article 164 of the Family Code.
In the same action to impugn, B can pray for the
correction of the status of the said daughter in
her record of birth. (B). If B acquiesces to the use
of his surname by G’s daughter by another man,
what is/are the consequence/s? Explain. (5%)
SUGGESTED ANSWER: If B acquiesces and
does not file the action to impugn the legitimacy
of the child within the prescriptive period for
doing so in Article 170 of the Family Code, G's
daughter by another man shall be conclusively
presumed as the legitimate daughter of B by G.
Art. 165. Children conceived and born outside a
valid marriage are illegitimate, unless otherwise
provided in this Code. (n)
2012 Bar Exam Question
31. Who are illegitimate children? a) Children
conceived or born outside a valid marriage.
b) Children born under a valid marriage,
which was later declared void because of the
psychological incapacity of either or both of
the spouses. c) Children conceived and born
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
outside a valid marriage. d) Children born
under a valid marriage, but the parents later
obtained a legal separation.
LEGITIMATE CHILDREN
Only children conceived or born during a valid
marriage.
Exceptions:
1. Conceived as a result of artificial
insemination;
2. Born of a voidable marriage before decree
of annulment;
3. Conceived or born before judgment of
annulment or absolute nullity under art. 36
(becomes final and executory;
4. Conceived or born of a subsequent
marriage under art. 53;
5. Of mothers who may have declared against
their legitimacy or was sentenced as an
adulteress;
6. Legally adopted;
7. Legitimated child/ren.
Art. 166. Legitimacy of a child may be impugned
only on the following grounds:
(1) That it was physically impossible for the
husband to have sexual intercourse with his
wife within the first 120 days of the 300
days which immediately preceded the birth
of the child because of:
(a) the physical incapacity of the
husband to have sexual intercourse
with his wife;
(b) the fact that the husband and
wife were living separately in such
a way that sexual intercourse was
not possible; or
(c) serious illness of the husband,
which absolutely prevented sexual
intercourse;
(2) That it is proved that for biological or
other scientific reasons, the child could not
have been that of the husband, except in
the instance provided in the second
paragraph of Article 164; or
(3) That in case of children conceived
through artificial insemination, the written
authorization or ratification of either parent
was obtained through mistake, fraud,
violence, intimidation, or undue influence.
(255a)
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Note: The child cannot go to court and impugn his
own legitimacy or filiation. He is not allowed to have
a choice of filiation.
2012 Bar Exam Question
24. The husband may impugn the legitimacy
of his child but not on the ground that: a) the
wife is suspected of infidelity. b) the
husband had a serious illness that prevented
him from engaging in sexual intercourse. c)
they were living apart. d) he is physically
incapable of sexual intercourse.
Paternity & Filiation; Who May Impugn
Legitimacy (2009) No.V. Four children,
namely: Alberto, Baldomero, Caridad, and
Dioscoro, were born to the spouses Conrado
and Clarita de la Costa. The children’s birth
certificates were duly signed by Conrado,
showing them to be the couple’s legitimate
children. Later, one Edilberto de la Cruz
executed a notarial document acknowledging
Alberto and Baldomero as his illegitimate
children >with Clarita. Edilberto died leaving
substantial properties. In the settlement of his
estate, Alberto and Baldomero intervened
claiming shares as the deceased’s illegitimate
children. The legitimate family of Edilberto
opposed the claim. Are Alberto and Baldomero
entitled to share in the estate of Edilberto?
Explain. (4%) SUGGESTED ANSWER:
No, Alberto and Baldomero are not entitled to
share in Edilberto’s estate. They are not related
at all to Edilberto. They were born during the
marriage of Conrado and Clarita, hence, are
considered legitimate children of the said
spouses. This status is conferred on them at
birth by law. Under Philippine law, a person
cannot have more than one natural filiation. The
legitimate filiation of a person can be changed
only if the legitimate father will successfully
impugn such status. In the problem, therefore,
the filiation of Alberto and Baldomero as
legitimate children of Condrado cannot be
changed by their recognition by Edilberto as his
illegitimate children. Before they can be
conferred the status of Edilberto’s illegitimate
children, Condrado must first impugn their
legitimacy. Since Condrado has not initiated
any action to impugn their legitimacy, they
continue to be the legitimate of Condrado. They
cannot be the illegitimate children of Edilberto
at the same time. Not being the illegitimate
children of Edilberto, they have no right to
inherit from him.
QA. Fidel, a Filipino with fair complexion, married
Gloria. Before the marriage, Gloria confessed to
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Fidel that she was two-month pregnant with the
child of a black African who had left the country for
good. When the child was born, Fidel could not
accept it being too black in complexion. What is the
status of the child?
A. Illegitimate, because Gloria confessed that the
child is not Fidel’s.
B. Illegitimate, because by the color of its skin, the
child could not possibly be that of Fidel.
C. Legitimate, because the child was born within a
valid marriage. Reaon Art. 164
D. Legitimate, because Fidel agreed to treat the
child as his own after Gloria told him who the father
was.
Art. 167. The child shall be considered legitimate
although the mother may have declared against its
legitimacy or may have been sentenced as an
adulteress. (256a)
NOTE: The mother cannot impugn the
legitimacy of her own child. Filing an action for
recognition (against the heirs of another person
not her husband) is an act tantamount to
impugning the legitimacy of her own child.
In this case, the mother filed an action
asking the heirs to another person to
recognize the child as their brother in
order to share in the inheritance.
Art. 168. If the marriage is terminated and the
mother contracted another marriage within three
hundred days after such termination of the former
marriage, these rules shall govern in the absence of
proof to the contrary:
(1) A child born before one hundred eighty
days after the solemnization of the
subsequent marriage is considered to have
been conceived during the former marriage,
provided it be born within three hundred
days after the termination of the former
marriage;
(2) A child born after one hundred eighty
days following the celebration of the
subsequent marriage is considered to have
been conceived during such marriage, even
though it be born within the three hundred
days after the termination of the former
marriage. (259a)
Paternity & Filiation (1999)
(a) Two (2) months after the death of her husband who
was shot by unknown criminal elements on his way home
from office, Rose married her childhood boyfriend, and
seven (7) months after said marriage, she delivered a
baby. In the absence of any evidence from Rose as to
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who is her child's father, what status does the law give to
said child? Explain. (2%)
SUGGESTED ANSWER:
(a) The child is legitimate of the second marriage under
Article 168(2) of the Family Code which provides that a
"child born after one hundred eighty days following the
celebration of the subsequent marriage is considered to
have been conceived during such marriage, even though
it be born within three hundred days after the termination
of the former marriage."
Art. 169. The legitimacy or illegitimacy of a child
born after three hundred days following the
termination of the marriage shall be proved by
whoever alleges such legitimacy or illegitimacy.
(261a)
Art. 170. The action to impugn the legitimacy of the
child shall be brought within one year from the
knowledge of the birth or its recording in the civil
register, if the husband or, in a proper case, any of
his heirs, should reside in the city or municipality
where the birth took place or was recorded.
If the husband or, in his default, all of his heirs do
not reside at the place of birth as defined in the first
paragraph or where it was recorded, the period
shall be two years if they should reside in the
Philippines; and three years if abroad. If the birth of
the child has been concealed from or was unknown
to the husband or his heirs, the period shall be
counted from the discovery or knowledge of the
birth of the child or of the fact of registration of said
birth, whichever is earlier. (263a)
Art. 171. The heirs of the husband may impugn the
filiation of the child within the period prescribed in
the preceding article only in the following cases:
(1) If the husband should died before the
expiration of the period fixed for bringing his
action;
(2) If he should die after the filing of the
complaint without having desisted
therefrom; or
(3) If the child was born after the death of
the husband. (262a)
2011 Bar Exam Question
(54) A left B, his wife, in the Philippines to
work in Egypt but died in that country after a
year’s continuous stay. Two months after A’s
death, B gave birth to a child, claiming it is A’s
child. Who can assail the legitimacy of the
child? (A) A’s other heirs apart from B. (B)
The State which has interest in the welfare of
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
overseas contract workers. (C) Any one who is
outraged by B’s claim. (D) No one since A died.
Chapter 2. Proof of Filiation
Art. 172. The filiation of legitimate children is
established by any of the following:
(1) The record of birth appearing in the civil
register or a final judgment; or
(2) An admission of legitimate filiation in a
public document or a private handwritten
instrument and signed by the parent
concerned.
In the absence of the foregoing evidence, the
legitimate filiation shall be
proved by:
(1) The open and continuous possession of
the status of a legitimate child; or
(2) Any other means allowed by the Rules
of Court and special laws. (265a, 266a,
267a)
Notes:
DNA Testing is a valid means of determining
paternity. It is not against the constitutional right
against self-incrimination nor against the right to
privacy (Agustin vs. CA, GR No. 162571, June 5,
2005).
VALLEJO TEST (P. vs. Vallejo, GR No. 144656,
May , 2002).
Factors to consider as to probative value of DNA
evidence:
1. How samples were collected;
2. How they are handled;
3. Possibility of contamination of samples;
4. Procedures followed in analyzing the
samples;
5. Whether the proper standards and
procedures were followed in conducting the
test;
6. Qualification of analyst who conducted the
test.
Trial courts should require at least 99.9% as the
minimum value of DNA Test Result on probability of
paternity prior to inclusion (Herrera vs. Alba, GR
No. 148220, June 15, 2005).
A child born inside a valid marriage is legitimate.
Hence, a child born inside a bigamous marriage
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which is void is the child of the first marriage which
has not been annulled or nullified, an agreement by
the parties as to the status of the child is void. Only
the law determines status (Concepcion vs. CA, GR
No. 123450. Aug. 31, 2005).
Continues does not mean that the concession of
status shall continue forever but only that it shall not
be of an intermittent character while it continues.
The possession of such status means that the
father has treated the child as his own, directly and
not through others, spontaneously and without
concealment though without publicity. There must
be a showing of permanent intention of the
supposed father to consider the child as his own by
continues and clear manifestation of paternal
affection and care (Mendoza vs. CA, GR No.
86302, Sept. 24, 1991).
A certificate of live birth purportedly identifying the
putative father is not competent evidence of
paternity when there is no showing that the putative
father had a hand in the preparation of the said
certificate. The local civil registrar has no authority
to record the paternity of an illegitimate child on the
information of a 3rd person. While a baptismal
certificate may be considered a public document, it
can only serve as evidence of the administration of
the sacrament but not the veracity of the entries
with respect to the child’s paternity (Cabatania vs.
CA, 441 SCRA 96 (2004).
The general rule is that an unsigned birth
certificate is not a competent proof of
paternity/filiation. However, if it is the father
who himself was the one who supplied for the
data in the birth certificated but failed to sign
it, the birth certificate is competent proof of
paternity.
The due recognition of an illegitimate child in a
record of birth, a will, a statement before a court, or
in authentic writing, is, in itself, a consummated act
of acknowledgement,
And no further court action is required. In fact, any
authentic writing is treated not just a ground for
compulsory recognition; it is in itself a voluntary
recognition that does not require a separate civil
action for judicial approval.
Paternity & Filiation; Proofs (1999)
(b) Nestor is the illegitimate son of Dr. Perez. When Dr.
Perez died, Nestor intervened in the settlement of his
father's estate, claiming that he is the illegitimate son of
said deceased, but the legitimate family of Dr. Perez is
denying Nestor's claim. What evidence or evidences
should Nestor present so that he may receive his rightful
share in his father's estate? (3%)
SUGGESTED ANSWER:
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(b) To be able to inherit, the illegitimate filiation of Nestor
must have been admitted by his father in any of the
following:
(1) the record of birth appearing in the civil register,
(2) a final judgment,
(3) a public document signed by the father, or
(4) a private handwritten document signed by the lather
(Article 17S in relation to Article 172 of the Family Code).
Paternity & Filiation; Proofs; Limitations; Adopted
Child (1995)
Abraham died intestate on 7 January 1994 survived by
his son Braulio. Abraham's older son Carlos died on 14
February 1990. Danilo who claims to be an adulterous
child of Carlos intervenes in the proceedings for the
settlement of the estate of Abraham in representation of
Carlos. Danilo was legally adopted on 17 March 1970 by
Carlos with the consent of the " latter's wife.
1. Under the Family Code, how may an illegitimate
filiation be proved? Explain.
2. As lawyer for Danilo, do you have to prove Danilo's
illegitimate filiation? Explain.
3. Can Danilo inherit from Abraham in representation of
his father Carlos? Explain.
SUGGESTED ANSWER:
1. Under Art. 172 in relation to Art. 173 andArt. 175 of the
FC, the filiation of illegitimate children may be established
in the same way and by the same evidence as legitimate
recognition of an illegitimate child can be brought at any
children. Art. 172 provides that the filiation of legitimate
children is established by any of the following: (1) the
record of birth appearing in the civil register or a final
Judgment; or (2) an admission of legitimate filiation in a
public document or a private handwritten instrument and
signed by the parent concerned. In the absence of the
foregoing evidence, the legitimate filiation shall be proved
by: (1) the open and continuous possession of the status
of a legitimate child; or (2) any other means allowed by
the Rules of Court and special laws.
SUGGESTED ANSWER:
2. No. Since Danilo has already been adopted by
Carlos, he ceased to be an illegitimate child. An adopted
child acquires all the rights of a legitimate child under Art,
189 of the FC.
SUGGESTED ANSWER:
3. No, he cannot. Danilo cannot represent Carlos as the
latter's adopted child in the inheritance of Abraham
because adoption did not make Danilo a legitimate
grandchild of Abraham. Adoption is personal between
Carlos and Danilo. He cannot also represent Carlos as
the latter's illegitimate child because in such case he is
barred by Art. 992 of the NCC from inheriting from his
illegitimate grandfather Abraham.
ALTERNATIVE ANSWER:
An adopted child's successional rights do not include the
right to represent his deceased adopter in the inheritance
of the latter's legitimate parent, in view of Art. 973 which
provides that in order that representation may take place,
the representative must himself be capable of succeeding
the decedent. Adoption by itself did not render Danilo an
heir of the adopter's legitimate parent. Neither does his
being a grandchild of Abraham render him an heir of the
latter because as an illegitimate child of Carlos, who was
a legitimate child of Abraham, Danilo is incapable of
succeeding Abraham under Art. 992 of the Code.
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Art. 173. The action to claim legitimacy may be
brought by the child during his or her lifetime and
shall be transmitted to the heirs should the child die
during minority or in a state of insanity. In these
cases, the heirs shall have a period of five years
within which to institute the action.
Art. 174. Legitimate children shall have the right:
(1) To bear the surnames of the father and
the mother, in conformity with the
provisions of the Civil Code on Surnames;
(2) To receive support from their parents,
their ascendants, and in proper cases, their
brothers and sisters, in conformity with the
provisions of this Code on Support; and
(3) To be entitled to the legitime and other
successional rights granted to them by the
Civil Code. (264a)
Paternity & Filiation; Rights of Legitimate Children
(1990)
B and G (college students, both single and not
disqualified to marry each other) had a romantic affair, G
was seven months in the family way as of the graduation
of B. Right after graduation B went home to Cebu City.
Unknown to G, B had a commitment to C (his childhood
sweetheart) to marry her after getting his college degree.
Two weeks after B marriage in Cebu City, G gave birth to
a son E in Metro Manila. After ten years of married life in
Cebu, B became a widower by the sudden death of C in a
plane crash. Out of the union of B and C, two children, X
and Y were born. Unknown to C while on weekend trips
to Manila during the last 5 years of their marriage, B
invariably visited G and lived at her residence and as a
result of which, they renewed their relationship. A baby
girl F was born to B and G two years before the death of
C. Bringing his family later to Manila, B finally married G.
Recently. G died. What are the rights of B's four children:
X and Y of his first marriage; and E and F, his children
with G? Explain your answer.
SUGGESTED ANSWER:
Under the facts stated, X and Y are legitimate children of
B and C. E is the legitimate children of B and G. E is the
legitimated child of B&G. F is the illegitimate child of B
and C. As legitimate children of B and C, X and Y have
the following rights: 1) To bear the surnames of the father
and the mother, in conformity with the provisions of the
Civil Code on Surnames; 2) To receive support from their
parents, their ascendants, and in proper cases, their
brothers and sisters, in¬conformity with the provisions of
the Family Code on Support; and 3) To be
entitled to the legitime and other successional rights
granted to them by the Civil Code. (Article 174, Family
Code).
E is the legitimated child of B and G. Under Art. 177 of
the Family Code, only children conceived and born
outside of wedlock of parents who, at the time of the
conception of the former, were not disqualified by any
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
impediment to marry each other may be legitimated. E
will have the same rights as X and Y.
F is the illegitimate child of B and G. F has the right to
use the surname of G, her mother, and is entitled to
support as well as the legitime consisting of 1/2 of that of
each of X, Y and E. (Article 176, Family Code)
Chapter 3. Illegitimate Children
Art. 175. Illegitimate children may establish their
illegitimate filiation in the same way and on the
same evidence as legitimate children.
The action must be brought within the same period
specified in Article 173, except when the action is
based on the second paragraph of Article 172, in
which case the action may be brought during the
lifetime of the alleged parent. (289a)
Paternity & Filiation; Recognition of illegitimate Child
(2005)
Steve was married to Linda, with whom he had a
daughter, Tintin. Steve fathered a son with Dina, his
secretary of 20 years, whom Dina named Joey, born on
September 20, 1981. Joey's birth certificate did not
indicate the father's name. Steve died on August 13,
1993, while Linda died on December 3, 1993, leaving
their legitimate daughter, Tintin, as sole heir. On May 16,
1994, Dina filed a case on behalf of Joey, praying that the
latter be declared an acknowledged illegitimate son of
Steve and that Joey be given his share in Steve's estate,
which is now being solely held by Tintin. Tintin put up the
defense that an action for recognition shall only be filed
during the lifetime of the presumed parents and that the
exceptions under Article 285 of the Civil Code do not
apply to him since the said article has been repealed by
the Family Code. In any case, according to Tintin, Joey's
birth certificate does not show that Steve is his father.
a) Does Joey have a cause of action against Tintin for
recognition and partition? Explain. (2%)
SUGGESTED ANSWER:
No, Joey does not have a cause of action against Tintin
for recognition and partition. Under Article 175 of the
Family Code, as a general rule, an action for compulsory
time during the lifetime of the child. However, if the action
is based on "open and continuous possession of the
status of an illegitimate child, the same can be filed
during the lifetime of the putative father."
In the present case, the action for compulsory recognition
was filed by Joey's mother, Dina, on May 16,1994, after
the death of Steve, the putative father. The action will
prosper if Joey can present his birth certificate that bears
the signature of his putative father. However, the facts
clearly state that the birth certificate of Joey did not
indicate the father's name. A birth certificate not signed
by the alleged father cannot be taken as a record of birth
to prove recognition of the child, nor can said birth
certificate be taken as a recognition in a public
instrument. (Reyes v. Court of Appeals, G.R. No. 39537,
March 19, 1985) Consequently, the action filed by Joey's
mother has already prescribed.
b) Are the defenses set up by Tintin tenable? Explain.
(2%)
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SUGGESTED ANSWER:
Yes, the defenses of Tintin are tenable. In Tayag v. Court
of Appeals (G.R. No. 95229, June 9,1992), a complaint to
compel recognition of an illegitimate child was brought
before effectivity of the Family Code by the mother of a
minor child based on "open and continuous possession of
the status of an illegitimate child." The Supreme Court
held that the right of action of the minor child has been
vested by the filing of the complaint in court under the
regime of the Civil Code and prior to the effectivity of the
Family Code. The ruling in Tayag v. Court of Appeals
finds no application in the instant case. Although the child
was born before the effectivity of the Family Code, the
complaint was filed after its effectivity. Hence, Article 175
of the Family Code should apply and not Article 285 of
the Civil Code.
c) Supposing that Joey died during the pendency of the
action, should the action be dismissed? Explain. (2%)
SUGGESTED ANSWER:
If Joey died during the pendency of the action, the action
should still be dismissed because the right of Joey or his
heirs to file the action has already prescribed. (Art. 175,
Family Code)
2011 Bar Exam Question
(53) The testator executed a will following the
formalities required by the law on succession
without designating any heir. The only
testamentary disposition in the will is the
recognition of the testator's illegitimate child
with a popular actress. Is the will valid? (A)
Yes, since in recognizing his illegitimate child,
the testator has made him his heir. (B) No,
because the non-designation of heirs defeats
the purpose of a will. (C) No, the will comes to
life only when the proper heirs are instituted.
(D) Yes, the recognition of an illegitimate
heir is an ample reason for a will.
"Article 176. Illegitimate children shall use the
surname and shall be under the parental authority
of their mother, and shall be entitled to support in
conformity with this Code. However, illegitimate
children may use the surname of their father if their
filiation has been expressly recognized by the father
through the record of birth appearing in the civil
register, or when an admission in a public
document or private handwritten instrument is made
by the father. Provided, the father has the right to
institute an action before the regular courts to prove
non-filiation during his lifetime.
The legitime of each illegitimate child shall consist
of one-half of the legitime of a legitimate child." (as
amended by RA 9255, Feb. 24, 2004)
2011 Bar Exam Question
(48) Illegitimate children, those not recognized
by their biological fathers, shall use the
surname of their (A) biological father subject to
no condition. (B) mother or biological father,
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
at the mother’s discretion. (C) mother. (D)
biological father unless he judicially opposes
it.
2012 Bar Exam Question
32. An illegitimate child may use the surname
of his father when his filiation is established in
any of the following instances, except: a)
Filiation has been recognized by the father
through the record of birth appearing in the
civil register b) Admission of filiation by the
father in a public document. c) Private
handwritten instrument is made by the father
acknowledging his filiation. d) Affidavit by
the mother stating the name of his true
father.
Paternity & Filiation; Use of Surname;
Illegitimate Child (2009)
No.XIV. Rodolfo, married to Sharon, had an
illicit affair with his secretary, Nanette, a 19-
year old girl, and begot a baby girl, Rona.
Nanette sued Rodolfo for damages: actual, for
hospital and other medical expenses in
delivering the child by caesarean section;
moral, claiming that Rodolfo promised to
marry her, representing that he was single
when, in fact, he was not; and exemplary, to
teach a lesson to like-minded Lotharios. (B).
Suppose Rodolfo later on acknowledges Rona
and gives her regular support, can he compel
her to use his surname? Why or why not? (2%)
SUGGESTED ANSWER: No. he has no right
to compel Rona to use his surname. The
law does not give him the right simply
because he gave her support (RA 9255).
Under the Family Code, an illegitimate
child was required to use only the surname
of the mother. Under RA 9255, otherwise
known as the Revilla law, however, the
illegitimate child is given the option to use
the surname of the illegitimate father when
the latter has recognized the former in
accordance with law. Since the choice
belongs to the illegitimate child, Rodolfo
cannot compel Rona, if already of age, to
use the surname against her will. If Rona is
still a minor, to use the surname of Rodolfo
will require the consent of Rona's mother
who has sole parental authority over her.
Paternity & Filiation; In Vitro Fertilization;
Surrogate Mother’s Remedy to Regain
Custody (2010) No.VI. Gigolo entered into an
agreement with Majorette for her to carry in
her womb his baby via in vitro fertilization.
Gigolo undertook to underwrite Majorette’s
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pre-natal expenses as well as those attendant
to her delivery. Gigolo would thereafter pay
Majorette P2 million and, in return, she would
give custody of the baby to him.
After Majorette gives birth and delivers the
baby to Gigolo following her receipt of P2
million, she engages your services as her
lawyer to regain custody of the baby. (A) What
legal action can you file on behalf of Majorette?
Explain. (2.5%) SUGGESTED ANSWER: As
her lawyer, I can file a petition for habeas
corpus on behalf Majorette to recover
custody of her child. Since she is the
mother of the child that was born out of
wedlock, she has exclusive parental
authority and custody over the child.
Gigolo, therefore, has no right to have
custody of the child and his refusal to give
up custody will constitute illegal detention
for which habeas corpus is the proper
remedy. ALTERNATIVE ANSWER: The
action to regain custody will not prosper. In
the first place Majorette cannot regain
custody of the baby. As surrogate mother
she merely carries the child in her womb
for its development. The child is the child
of the natural parents- Gigolo and his
partner. The agreement between Gigolo and
Majorette is a valid agreement. (B) Can
Gigolo demand from Majorette the return of
the P2 million if he returns the baby? Explain.
(2.5%)
SUGGESTED ANSWER: No, he cannot. Both he
and Majorette are guilty of violating the
provision of the Anti-Child Abuse Law (RA7610)
on child trafficking. Being in pari delicto, the
partners shall be left where they are and Gigolo
cannot demand the return of what he paid.
ALTERNATIVE ANSWER: Yes. The agreement
between Gigolo and Majorette is a valid
agreement. (D) Is the child entitled to support and
inheritance from Gigolo? Explain. (2.5%)
SUGGESTED ANSWER: If Gigolo voluntarily
recognized the child as his illegitimate child in
accordance with Article 175 in relation to Article
172 of the Family Code, the child is entitled to
support and inheritance from Gigolo.
ALTERNATIVE ANSWER: Yes, because Gigolo
is the natural and biological parent of the baby.
Parental Authority; Illegitimate Minor Child
(2009)
No.XIV. Rodolfo, married to Sharon, had an illicit
affair with his secretary, Nanette, a 19-year old girl,
and begot a baby girl, Rona. Nanette sued Rodolfo
for damages: actual, for hospital and other medical
expenses in delivering the child by caesarean
section; moral, claiming that Rodolfo promised to
marry her, representing that he was single when, in
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
fact, he was not; and exemplary, to teach a lesson
to like-minded Lotharios. (C). When Rona reaches
seven (7) years old, she tells Rodolfo that she
prefers to live with him, because he is better off
financially than Nanette. If Rodolfo files an action
for the custody of Rona, alleging that he is Rona’s
choice as custodial parent, will the court grant
Rodolfo’s petition? Why or why not? (2%)
SUGGESTED ANSWER: No, because Rodolfo
has no parental authority over Rona. He who
has the parental authority has the right to
custody. Under the Family Code, the mother
alone has parental authority over the illegitimate
child. This is true even if illegitimate father
recognized the child and even though he is
giving support for the child. To acquire custody
over Rona, Rodolfo should first deprive Nanette
of parental authority if there is ground under the
law, and in a proper court proceedings. In the
same action, the court may award custody of
Rona to Rodolfo if it is for her best interest.
Parental Authority; In Vitro Fertilization
(2010)
No.VI. Gigolo entered into an agreement with
Majorette for her to carry in her womb his
baby via in vitro fertilization. Gigolo undertook
to underwrite Majorette’s pre-natal expenses
as well as those attendant to her delivery.
Gigolo would thereafter pay Majorette P2
million and, in return, she would give custody
of the baby to him. After Majorette gives birth
and delivers the baby to Gigolo following her
receipt of P2 million, she engages your services
as her lawyer to regain custody of the baby. (C)
Who of the two can exercise parental authority
over the child? Explain. (2.5%) SUGGESTED
ANSWER: Majorette, the mother, can
exercise parental authority. Since the child
was born out of wedlock, the child is
illegitimate and the mother has the
exclusive parental authority and custody
over the child. ALTERNATIVE ANSWER:
Gigolo can exercise parental authority over
the child. Majorette has no blood relation
to the child. She is just a “carrier” of the
child.
LEGITIMATE ILLEGITIMATE
Use of mother’s
Use of father’s surname or
Surname and mother’s father’s
surname surname under
RA 9225 (March
19, 2004)
Entitled to ½ of
Entitled to legitime of
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legitime and legitimate child
Legitime other NOTE: the Chapter 4. Legitimated Children
successional legitime of the
rights granted children and the Art. 177. Children conceived and born outside of
them by the surviving wedlock of parents who, at the time of conception of
NCC spouse must the former, were not disqualified by any impediment
not be impaired to marry each other, or were so disqualified only
Entitled to because either or both of them were below eighteen
receive (18) years of age, may be legitimated.(as amended
support from Receive support by RA 9858, Dec. 20, 2009).
Support parents, according the
ascendants, provision of FC REQUISITES:
and in proper 1. The child was conceived and born outside
cases, of wedlock;
brothers and 2. The parents at the time of the child’s
sisters under conception, were not disqualified or that
art. 174 were disqualified only because either or
 His/her both of the are below 18 years of age;
lifetime 3. There is a valid marriage subsequent to the
regardless of birth of the child.
type of
Action to claim His/her lifetime proofs QA. X and Y, although not suffering from any
for legitimacy regardless of provided impediment, cohabited as husband and wife without
or illegitimacy the type of under art. the benefit of marriage. Following the birth of their
proofs 172 par. 1; child, the couple got married. A year after, however,
provided under  Only lifetime the court annulled the marriage and issued a
art. 172 of the decree of annulment. What is the present status of
alleged the child?
parent for A. Legitimated.
art. 172 par. B. Illegitimate.
2 C. Natural child.
D. Legitimate.
Transmissibility
to heirs under Yes No Paternity & Filiation; Common-Law Union (2004)
A. RN and DM, without any impediment to marry each
art. 173
other, had been living together without benefit of church
No right to blessings. Their common-law union resulted in the birth of
inherit ab ZMN. Two years later, they got married in a civil
intestate from ceremony. Could ZMN be legitimated? Reason. (5%)
Right to inherit Yes legitimate SUGGESTED ANSWER:
ab intestate children and ZMN was legitimated by the subsequent marriage of RN
relatives of the and DM because at the time he was conceived, RN and
father or mother DM could have validly married each other. Under the
Family Code children conceived and born outside of
under art 992,
wedlock of parents who, at the time of the former's
NCC. (IRON- conception, were not disqualified by any impediment to
SHIELD RULE) marry each other are legitimated by the subsequent
marriage of the parents.

RA 9255 2011 Bar Exam

Illegitimate children may use the surname of their
father if their filiation has been expressly recognized
by the father, either through—
1. Record of birth in civil register;
2. Father’s admission in a public instrument;
3. Father’s admission in a private handwritten
document.
The father under sec. 1, RA 9255 has the right to
file an action to prove non-filiation during his
lifetime.
(89) X, a married man, cohabited with Y, an
unmarried woman. Their relation bore them
BB, a baby boy. Subsequently, after X became
a widower, he married Y. Was BB legitimated
by that marriage?(A) Yes, since his parents are
now lawfully married. (B) Yes, since he is an
innocent party and the marriage rectified the
wrong done him. (C) No, since once
illegitimate, a child shall always remain
illegitimate. (D) No, since his parents were

JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 94

____________________________________________________________________________________________________
not qualified to marry each other when he
was conceived.
Paternity & Filiation; Legitimacy;
Presumption (2008)
No. III. Roderick and Faye were high school
sweethearts. When Roderick was 18 and Faye,
16 years old, they started to live together as
husband and wife without the benefit of
marriage. When Faye reached 18 years of age,
her parents forcibly took her back and
arranged for her marriage to Brad. Although
Faye lived with Brad after the marriage,
Roderick continued to regularly visit Faye
while Brad was away at work. During their
marriage, Faye gave birth to a baby girl, Laica.
When Faye was 25 years old, Brad discovered
her continued liason with Roderick and in one
of their heated arguments, Faye shot Brad to
death. She lost no time in marrying her true
love Roderick, without a marriage license,
claiming that they have been continuosly
cohabiting for more than 5 years. (B). What is
the filiation status of Laica? (2%) SUGGESTED
ANSWER: Laica is legitimate because
children conceived or born during the
marriage of the parents are presumed to be
legitimate (Art. 164, FC). (C).Can Laica bring
an action to impugn her own status on the
ground that based on DNA results, Roderick is
her biological father? (2%) SUGGESTED
ANSWER:
No. Laica cannot bring an action to impugn her
own status. In Liyao Jr. v. Tanhoti-Liyao, G.R.
No. 138961, 07 March 2002, the Supreme Court
ruled that impugning the legitimacy of the child
is a strictly personal right of husband, except:
(a) when the husband died before the expiration
of the period fixed for bringing the action; (b) if
he should die after the filing of the complaint,
without having desisted therefrom, or (c) if the
child was born after the death of the husband.
Laica's case does not fall under any of the
exceptions. (D). Can Laica be legitimated by the
marriage of her biological parents? (1%)
SUGGESTED ANSWER: No. Laica cannot be
legitimated by the marriage of her biological
parents because only children conceived and
born outside of wedlock of parents who at the
time of the conception of the former were not
disqualified by any impediment to marry each
other may be legitimated (Art. 177, FC).
Paternity & Filiation; Legitimation of a
Child from a Previous Valid Marriage (2008)
No. IV. Gianna was born to Andy and Aimee,
who at the time Gianna's birth were not
married to each other. While Andy was single
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
at the time, Aimee was still in the process of
securing a judicial declaration of nullity on her
marriage to her ex-husband. Gianna's birth
certificate, which was signed by both Andy and
Aimee, registered the status of Gianna as
"legitimate", her surname carrying that of
Andy's and that her parents were married to
each other. (C). Assuming that Aimee is
successful in declaring her former marriage
void, and Andy and Aimee subsequently
married each other, would Gianna be
legitimated? (1%) SUGGESTED ANSWER:
Gianna cannot be legitimated by the
subsequent marriage of Andy and Aimee.
Art. 177 of the FC provides that "only
children conceived and born outside of
wedlock of parents who, at the time of the
conception of the former, were not
disqualified by any impediment to marry
each other may be legitimated." In the
present case, a legal impediment was
existing at the time of the conception of
Gianna. Her mother, Aimee, was still alive
in the process of securing judicial
declaration of nullity on her marriage to
her ex-husband.
Art. 178. Legitimation shall take place by a
subsequent valid marriage between parents. The
annulment of a voidable marriage shall not affect
the legitimation. (270a)
Paternity & Filiation; Child Born Under a
Void Marriage (2010)
No.X. In 1997, B and G started living together
without the benefit of marriage. The
relationship produced one offspring, Venus.
The couple acquired a residential lot in
Parañaque. After four (4) years or in 2001, G
having completed her 4-year college degree as
a fulltime student, she and B contracted
marriage without a license. The marriage of B
and G was, two years later, declared null and
void due to the absence of a marriage license.
(B). Is Venus legitimate, illegitimate, or
legitimated? Explain briefly. (3%) SUGGESTED
ANSWER: Venus is illegitimate. She was
conceived and born outside a valid
marriage. Thus, she is considered
illegitimate (Art 165, Family Code). While
Venus was legitimated by the subsequent
marriage of her parents, such legitimation
was rendered ineffective when the said
marriage was later on declared null and
void due to absence of a marriage license.
Under Article 178 of the Family Code,
“legitimation shall take place by a
subsequent valid marriage between parents.
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The annulment of a voidable marriage shall
not affect the legitimation.” The inclusion
of the underscored portion in the Article
necessarily implies that the Article's
application is limited to voidable marriages.
It follows that when the subsequent
marriage is null or void, the legitimation
must also be null and void. In the present
problem, the marriage between B and G was
not voidable but void. Hence, Venus has
remained an illegitimate child.
Art. 179. Legitimated children shall enjoy the same
rights as legitimate children. (272a)
Art. 180. The effects of legitimation shall retroact to
the time of the child's birth. (273a)
Art. 181. The legitimation of children who died
before the celebration of the marriage shall benefit
their descendants. (274)
Paternity & Filiation; Legitimation of a
Dead Child (2009)
No. I. TRUE or FALSE. Answer TRUE if the
statement is true, or FALSE if the statement is
false. Explain your answer in not more than
two (2) sentences.
(E). A dead child can be legitimated. (1%)
SUGGESTED ANSWER: TRUE To be
legitimated, the law does not require a child to
be alive at the same time of the marriage of his /
her parents ( Article 177, FC ). Furthermore, Art.
181 of the Family Code which states that “[Th]e
llegitimation of children who died before the
celebration of marriage will benefit their
descendants,” does not preclude instances
where such legitimation will benefit no one but
the child's ascendants ,or other relatives .
Art. 182. Legitimation may be impugned only by
those who are prejudiced in their rights, within five
years from the time their cause of action accrues.
(275a)
NOTE: The cause of action accrues on the death of
the parents of legitimated child.
Reason: Before death of the parents, the interest of
the children over the estate of their parents is a
mere expectancy.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
TITLE VII
ADOPTION
NOTE: Adoption is now governed by RA 8552,
The Domestic Adoption Act, and some pertinent
portions of the Family Code and the New Civil
Code.
SALIENT PROVISIONS:
WHO MAY ADOPT (sec. 4):
A. Any Filipino Citizen-
1. Of legal age;
2. In possession of full civil capacity
and legal rights;
3. Of good moral character;
4. Has not been convicted of any
crime involving moral turpitude;
5. Emotionally and psychologically
capable of caring for children;
6. In a position to support and care for
his/her children in keeping with the
means of the family; and
7. At least 16 years older the adoptee.
B. Any Alien possessing the same
qualifications as above; Provided:
1. That his/her country has diplomatic
relations with the Philippines;
2. That he/she been living in the
Philippines for at least 3 continuous
years prior to the filing of the
application for adoption;
3. Maintains residence until the
adoption decree is entered;
4. Certified to have legal capacity to
adopt by his/her country; and
5. That his/her government allows the
adoptee to enter his/her country as
his/her adopted child.
C. The Guardian, after termination of
guardianship.
Qualification of Adopter (2005)
In 1984, Eva, a Filipina, went to work as a nurse in the
USA. There, she met and fell in love with Paul, an
American citizen, and they got married in 1985. Eva
acquired American citizenship in 1987. During their
sojourn in the Philippines in 1990, they filed a joint
petition for the adoption of Vicky, a 7-year old daughter of
Eva's sister. The government, through the Office of the
Solicitor General, opposed the petition on the ground that
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the petitioners, being both foreigners, are disqualified to
adopt Vicky.
a) Is the government's opposition tenable? Explain. (2%)
SUGGESTED ANSWER:
The government's position is untenable. Under paragraph
3, Article 184 of the Family Code, an alien, as a general
rule cannot adopt. However, an alien who is a former
Filipino citizen and who seeks to adopt a relative by
consanguinity is qualified to adopt, (par. 3[a], Art. 184,
Family Code)
In the given problem, Eva, a naturalized American citizen
would like to adopt Vicky, a 7-year old daughter of her
sister. Thus, under the above-cited provision, Eva is
qualified to adopt Vicky.
b) Would your answer be the same if they sought to
adopt Eva's illegitimate daughter? Explain. (2%)
SUGGESTED ANSWER:
My answer will still be the same. Paragraph 3(a) of Article
184 of the Family Code does not make any distinction.
The provision states that an alien who is a former Filipino
citizen is qualified to adopt a relative by consanguinity.
c) Supposing that they filed the petition to adopt Vicky in
the year 2000, will your answer be the same? Explain.
(2%)
SUGGESTED ANSWER:
Yes, my answer will still be the same. Under Sec. 7(b),
Art. III of the New Domestic Adoption Act, an alien who
possesses all the qualifications of a Filipino national who
is qualified to adopt may already adopt provided that his
country has diplomatic relations with the Philippines, that
he has been living in the Philippines for at least three (3)
continuous years prior to the filing of the application for
adoption and maintains such residence until the adoption
decree is entered, that he has been certified by his
diplomatic or consular office or any appropriate
government agency that he has the legal capacity to
adopt in his country, and that his government allows the
adoptee to enter his country as his adopted child.
Qualification of Adopter; Applicable Law (2001)
A German couple filed a petition for adoption of a minor
Filipino child with the Regional Trial Court of Makati under
the provisions of the Child and Youth Welfare Code which
allowed aliens to adopt. Before the petition could be
heard, the Family Code, which repealed the Child and
Youth Welfare Code, came into effect. Consequently, the
Solicitor General filed a motion to dismiss the petition, on
the ground that the Family Code prohibits aliens from
adopting. If you were the judge, how will you rule on the
motion? (5%)
SUGGESTED ANSWER:
The motion to dismiss the petition for adoption should be
denied. The law that should govern the action is the law
in force at the time of filing of the petition. At that time, it
was the Child and Youth Welfare Code that was in effect,
not the Family Code. Petitioners have already acquired a
vested right on their qualification to adopt which cannot
be taken away by the Family Code. (Republic v. Miller
G.R. No. 125932, April 21, 1999, citing Republic v. Court
of Appeals,
205 SCRA 356)
ALTERNATIVE ANSWER:
The motion has to be granted. The new law shall govern
their qualification to adopt and under the new law, the
German couple is disqualified from adopting. They cannot
claim that they have already acquired a vested right
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
because adoption is not a right but a mere privilege. No
one acquires a vested right on a privilege.
[Note: If the examinee based his answer on the current
law, RA 8552, his answer should be considered correct.
This question is based on the repealed provision of the
Family Code on Adoption.]
Qualifications of Adopter (2000)
Sometime in 1990, Sarah, born a Filipino but by then a
naturalized American citizen, and her American husband
Tom, filed a petition in the Regional Trial Court of Makati,
for the adoption of the minor child of her sister, a Filipina.
Can the petition be granted? (5%)
SUGGESTED ANSWER:
(per dondee) It depends. Rules on Adoption effective
August 22, 2002 provides the following; SEC. 4. Who
may adopt. – The following may adopt: Any Filipino
Citizen
of legal age,
in possession of full civil capacity and legal
rights,
of good moral character,
has not been convicted of any crime involving
moral turpitude;
who is emotionally and psychologically capable
of caring for children,
at least sixteen (16) years older than the
adoptee,
and who is in a position to support and care for
his children in keeping with the means of the family.
• The requirement of a 16-year difference between the
age of the adopter and adoptee may be waived when the
adopter is the biological parent of the adoptee or is the
spouse of the adoptee’s parent;
Any Alien possessing the same qualifications as above-
stated for Filipino nationals: Provided, a) That his
country has diplomatic relations with the
Republic of the Philippines,
b) that he has been living in the Philippines for at
least three (3) continuous years prior to the filing of the
petition for adoption and maintains such residence until
the adoption decree is entered,
c) that he has been certified by his diplomatic or
consular office or any appropriate government agency to
have the legal capacity to adopt in his country,
d) and that his government allows the adoptee to
enter his country as his adopted child.
Provided, further, That the requirements on residency
and certification of the alien’s qualification to adopt in his
country may be waived for the following: a) a former
Filipino citizen who seeks to adopt a relative
within the fourth (4th) degree of consanguinity or affinity;
or b) one who seeks to adopt the legitimate child of his
Filipino spouse; or
c) one who is married to a Filipino citizen and
seeks to adopt jointly with his spouse a relative within the
fourth (4th) degree of consanguinity or affinity of the
Filipino spouse.
Qualifications of Adopter (2003)
Lina, a former Filipina who became an American citizen
shortly after her marriage to an American husband, would
like to adopt in the Philippines, jointly with her husband,
one of her minor brothers. Assuming that all the required
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consents have been obtained, could the contemplated
joint adoption in the Philippine prosper? Explain.
SUGGESTED ANSWER:
Yes, Lina and her American husband can jointly adopt a
minor brother of Lina because she and her husband are
both qualified to adopt. Lina, as a former Filipino citizen,
can adopt her minor brother under Sec. 7(b)(i) of RA
8552 (Domestic Adoption Act of 1998), or under Art. 184
(3)(1) of the Family Code. The alien husband can now
adopt under Sec. 7(b) of RA8552. The Supreme Court
has held in several cases that when husband and wife
are required to adopt jointly, each one of them must be
qualified to adopt in his or her own right (Republic v.
Toledano, 233 SCRA 9 (1994). However, the American
husband must comply with the requirements of the law
including the residency requirement of three (3) years.
Otherwise, the adoption will not be allowed.
The requirement of 16 years difference between
adopter and adoptee may be waived if adopter
is:
1. The biological parent of the adoptee;
2. The spouse of the adoptee’s parent.
The residency requirement and certification of
aliens qualification to adopt may be waived for
the following:
1. The adopter is a former Filipino citizen who
seeks to adopt a relative within the 4 th
degree of consanguinity or affinity;
2. One who seeks to adopt the legitimate child
of his/her Filipino spouse;
3. One who is married to a Filipino citizen and
seeks to adopt jointly with his/her spouse a
relative within the 4th degree of
consanguinity or affinity of the Filipino
spouse.
D. Guardian of Ward.
WHO MAY BE ADOPTED (sec. 5):
1. Any person below 18 years of age who has
been judicially declared available for
adoption OR voluntarily committed to he
DSWD;
2. The legitimate child of one spouse by the
other spouse;
3. An illegitimate child by a qualified adopter
to raise the status of the former to that of
legitimacy;
4. A person of legal age regardless of civil
status, if, prior to the adoption, said person
has been consistently considered and
treated by the adopters as their own child
since minority;
5. A child whose adoption has been
previously rescinded;
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
6. A child whose biological or adoptive
parents have died but no proceedings shall
be initiated within 6 months from the time of
death of said parents; and
7. A child not otherwise disqualified by law or
this Rules.
CHILD LEGALLY AVAILABLE FOR ADOPTION
This refers to a child who has been voluntarily or
involuntarily committed to the DSWD or to a duly
licensed and accredited child-placing or child caring
agency, freed from the parental authority of his
biological parents, or in case of rescission of
adoption, his guardian or adopter/s.
2 WAYS TO COMMIT A CHILD:
1. Administrative/Voluntary—in this case, the
parent or guardian of the child voluntarily
committed him to the DSWD or any duly
licenses child placement of child caring
agency. The child must be surrendered in
WRITING. Such written instrument must be
notarized and signed in the presence of an
authorized representative of the department
after counseling has been made to
encourage the parents to keep the child
(sec. 5, AM 02-1-19-SC).
2. Judicial/Involuntary—follow the procedure
in AM 02-1-19-SC.
GR: Husband and Wife shall JOINTLY adopt.
Exceptions:
1. If one spouse seeks to adopt the legitimate
child of the other;
2. If one spouse seeks to adopt his/her own
illegitimate child provided the other spouse
has signified his consent thereto; or
3. If the spouses are legally separated from
each other.
E. DECREE OF ADOPTION
If issued, this will take effect as of the date of the
filing of the original petition.
In case of change of name, the decree shall be
submitted to the Civil Registrar where the court
issuing the same is situated.
An amended birth certificate shall be issued. The
original birth certificate shall be stamped “cancelled”
and shall be sealed in the Civil Registry records.
Note: the new birth certificate to be issued to the
adoptee shall not bear any notation that it is an
amended issue.
Where the petition for adoption was granted after
the child had shot and killed a girl, the SC did not
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consider that the retroactive effect may be given to
the decree of adoption so as to impose a liability
upon the adopting parents accruing at a time when
the adopting parents had no actual custody over the
adopted child. The retroactive effect is granted only
where such is essential to permit the accrual of
some benefit or advantage in favor of the adopted
child (Tamargo vs. CA, GR No. 85044, June 3,
1992).
EFFECTS OF ADOPTION:
1. Adopter shall exercise parental authority;
2. All legal ties between biological parents and
adoptee shall be severed, except when
biological parent is the spouse of the
adopter;
3. Adoptee shall be considered legitimate
child of the adopter for all intents and
purposes;
4. Adopters shall have reciprocal rights of
succession without distinction from
legitimate filiation.
NOTES: under the law:
Art. 979,NCC, par. 2. An adopted child succeeds to the
property of the adopting parents in the same manner as a
legitimate child.
Below are the pertinent provisions of the FC.
Art. 189. Adoption shall have the following effects:
(1) For civil purposes, the adopted shall be
deemed to be a legitimate child of the
adopters and both shall acquire the
reciprocal rights and obligations arising
from the relationship of parent and child,
including the right of the adopted to use the
surname of the adopters;
(2) The parental authority of the parents by
nature over the adopted shall terminate and
be vested in the adopters, except that if the
adopter is the spouse of the parent by
nature of the adopted, parental authority
over the adopted shall be exercised jointly
by both spouses; and
(3) The adopted shall remain an intestate
heir of his parents and other blood
relatives. (39(1)a, (3)a, PD 603)
Art. 190. Legal or intestate succession to the estate
of the adopted shall be governed by the following
rules:
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(1) Legitimate and illegitimate children and
descendants and the surviving spouse of
the adopted shall inherit from the adopted,
in accordance with the ordinary rules of
legal or intestate succession;
(2) When the parents, legitimate or
illegitimate, or the legitimate ascendants of
the adopted concur with the adopter, they
shall divide the entire estate, one-half to be
inherited by the parents or ascendants and
the other half, by the adopters;
(3) When the surviving spouse or the
illegitimate children of the adopted concur
with the adopters, they shall divide the
entire estate in equal shares, one-half to be
inherited by the spouse or the illegitimate
children of the adopted and the other half,
by the adopters.
(4) When the adopters concur with the
illegitimate children and the surviving
spouse of the adopted, they shall divide the
entire estate in equal shares, one-third to
be inherited by the illegitimate children,
one-third by the surviving spouse, and one-
third by the adopters;
(5) When only the adopters survive, they
shall inherit the entire estate; and
(6) When only collateral blood relatives of
the adopted survive, then the ordinary rules
of legal or intestate succession shall apply.
(39(4)a, PD 603)
Art. 191 - 193
Successional Rights of Adopted Child (2004)
A Filipino couple, Mr. and Mrs. BM, Jr., decided to adopt
YV, an orphan from St. Claire’s orphanage in New York
City. They loved and treated her like a legitimate child for
they have none of their very own. However, BM, Jr., died
in an accident at sea, followed to the grave a year later by
his sick father, BM, Sr. Each left a sizable estate
consisting of bank deposits, lands and buildings in
Manila. May the adopted child, YV, inherit from BM, Jr.?
May she also inherit from BM, Sr.? Is there a difference?
Why? Explain. (5%)
SUGGESTED ANSWER:
YV can inherit from BM, Jr. The succession to the estate
of BM, Jr. is governed by Philippine law because he was
a Filipino when he died (Article 16, Civil Code). Under
Article 1039 of the Civil Code, the capacity of the heir to
succeed is governed by the national law of the decedent
and not by the national law of the heir. Hence, whether or
not YV can inherit from BM, Jr. is determined by
Philippine law. Under Philippine law, the adopted inherits
from the adopter as a legitimate child of the adopter.
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YV, however, cannot inherit, in his own right, from the
father of the adopter, BM, Sr., because he is not a legal
heir of BM, Sr. The legal fiction of adoption exists only
between the adopted and the adopter. (Teotico v. Del Val
13 SCRA 406 [1965]). Neither may he inherit from BM,
Sr. by representing BM, Jr. because in representation,
the representative must be a legal heir not only of the
person he is representing but also of the decedent from
whom the represented was supposed to inherit (Article
973, Civil Code).
Adoption; Termination; Death of Adopter
(2009) No.XIII. Rafael, a wealthy bachelor,
filed a petition for the adoption of Dolly, a one-
year old foundling who had a severe heart
ailment. During the pendency of the adoption
proceedings, Rafael died of natural causes.
The Office of the Solicitor General files a
motion to dismiss the petition on the ground
that the case can no longer proceed because of
the petitioner’s death. (A). Should the case be
dismissed? Explain. (2%)
SUGGESTED ANSWER:
It depends on the stage of the proceedings
when Rafael died. If he died after all the
requirements under the law have been complied
with and the case is already submitted for
resolution, the court may grant the petition and
issue a decree of adoption despite the death of
the adopter (Section 13, RA 8552). Otherwise,
the death of the petitioner shall have the effect
terminating the proceedings.
(B). Will your answer be the same if it was Dolly
who died during the pendency of the adoption
proceedings? Explain. (2%)
SUGGESTED ANSWER: No, if it was Dolly who
died, the case should be dismissed. Her death
terminates the proceedings (Art. 13, Domestic
Adoption Law).
ALTERNATIVE ANSWER: It depends. If all the
requirements under the law have already been
complied with and the case is already submitted
for resolution, the death of the adoptee should
not abate the proceedings. The court should
issue the decree of adoption if will be for the
best interest of the adoptee. While RA8552
provides only for the case where it is the
petitioner who dies before the decree is issued,
it is with more compelling reason that the
decree should be allowed in case it is the
adoptee who dies because adoption is primarily
for his benefit.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Adoption; Illegitimate Child; Use of
Mother’s Surname as Middle Name (2012)
No.IV.b) Honorato filed a petition to adopt his
minor illegitimate child Stephanie, alleging
that Stephanie’s mother is Gemma Astorga
Garcia; that Stephanie has been using her
mother’s middle name and surname; and that
he is now a widower and qualified to be her
adopting parent. He prayed that Stephanie’s
middle name be changed from "Astorga" to
"Garcia," which is her mother’s surname and
that her surname "Garcia" be changed to
"Catindig," which is his surname. This the trial
court denied. Was the trial court correct in
denying Hororato’s request for Stephanie’s use
of her mother’s surname as her middle name?
Explain. (5%) SUGGESTED ANSWER:
No, the trial court was not correct. There is no
law prohibiting an illegitimate child adopted by
his natural father to use as middle name his
mother’s surname. The law is silent as to what
middle name an adoptee may use. In case of In
re: Adoption of Stephanie Nathy Astorga Garcia,
G.R. No. 148311, March 31, 2005, the Supreme
Court ruled that the adopted child may use the
surname of the natural mother as his middle
name because there is no prohibition in the law
against it. Moreover, it will also be for the
benefit of the adopted child who shall preserve
his lineage on his mother’s side and reinforce
his right to inherit from his mother and her
family. Lastly, it will make the adopted child
conform with the time-honored Filipino tradition
of carrying the mother’s surname as the
person’s middle name.
Property Relations; Adoption (2012)
No.V. a) Spouses Primo and Monina Lim,
childless, were entrusted with the custody of
two (2) minor children, the parents of whom
were unknown. Eager of having children of
their own, the spouses made it appear that
they were the children’s parents by naming
them Michelle P. Lim and Michael Jude Lim.
Subsequently, Monina married Angel Olario
after Primo’s death. She decided to adopt the
children by availing the amnesty given under
R.A. 8552 to those individuals who simulated
the birth of a child. She filed separate petitions
for the adoption of Michelle, then 25 years old
and Michael, 18. Both Michelle and Michael
gave consent to the adoption. The trial court
dismissed the petition and ruled that Monina
should have filed the petition jointly with her
new husband. Monina, in a Motion for
Reconsideration argues that mere consent of
her husband would suffice and that joint
adoption is not needed, for the adoptees are
already emancipated. Is the trial court correct
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in dismissing the petitions for adoption?
Explain. (5%)
SUGGESTED ANSWER: Yes, the trial court
was correct. At the time the petitions for
adoptions were filed, petitioner had already
remarried. Under the law, husband and wife
shall adopt jointly, except in the cases
enumerated in the law. The adoption cases
of Michelle and James do not fall in any of
the exceptions provided in the law where a
spouse is permitted to adopt alone. Hence,
Monina should adopt jointly with her
husband Angel (Adoption of Michelle P.
Lim, G.R. Nos. 168992-93, May 21, 2009).
Adoption; Use of Surname of her Natural Mother
(2006)
May an illegitimate child, upon adoption by her natural
father, use the surname of her natural mother as the
middle name? (2.5%)
SUGGESTED ANSWER: Yes, an illegitimate child, upon
adoption by her natural father, can use the surname of
her that there is no law prohibiting an illegitimate child
adopted by her natural father to use, as middle name, her
mother's surname. What is not prohibited is allowed. After
all, the use of the maternal name as the middle name is
in accord with Filipino culture and customs and adoption
is intended for the benefit of the adopted [In re: Adoption
of Stephanie Nathy Astorga Garcia, G.R. No. 148311,
March 31, 2005; Rabuya, The Law on Persons and
Family Relations, p. 613].
RESCISION OF ADOPTION
Under the Domestic Adoption Act of 1998, the
adopter CAN NO LONGER RESCIND the adoption,
he can merely DISINHERIT the adoptee in
accordance with the provisions of the Civil Code.
Rescission relates only as to the date of the
judgment. Hence, vested rights prior to the
rescission shall be respected.
WHO files (sec.19):
1. Adoptee
a) Over 18 years of age;
b) If minor, with the assistance of
DSWD.
2. Guardian or Counsel, if over 18 but
incapacitated
GROUNDS for Rescission (sec.19):
1. Repeated physical violence and verbal
maltreatment by the adopter despite having
undergone counseling;
2. Attempt on the life of the adoptee;
3. Sexual assault or violence; or
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
4. Abandonment or failure to comply with
parental obligations.
WHEN to file verified petition (sec.24):
 Within 5 YEARS from reaching the age of
majority or after recovery from
incompetency.
Adverse party shall file his answer within 15
days from receipt of order of court requiring
him to answer (sec. 22).
EFFECTS OF JUDGMENT OF RESCISSION:
1. Parental authority of the biological parent or
legal custody of DSWD will be restored;
2. Reciprocal rights of adopter and adoptee is
extinguished;
3. Vested rights prior to the judicial rescission
shall be respected;
4. Successional rights shall revert to its status
prior to adoption, as of the date of judgment
of judicial rescission;
5. Adoptee shall use the name in his original
birth or foundling certificate; and
6. Civil Registrar shall reinstate his original
birth or foundling certificate.
Parental Authority; Rescission of Adoption (1994)
In 1975, Carol begot a daughter Bing, out of wedlock.
When Bing was ten years old, Carol gave her consent for
Bing's legal adoption by Norma and Manuel, which was
granted by the court in 1990. In 1991, Carol learned that
Norma and Manuel were engaged in a call-girl-ring that
catered to tourists. Some of the girls lived with Norma
and Manuel. Carol got Bing back, who in the first place
wanted to return to her natural mother. 1) Who has a
better right to the custody of Bing, Carol or Norma? 2)
Aside from taking physical custody of Bing, what legal
actions can Carol take to protect Bing?
SUGGESTED ANSWER:
1) a) It depends on whether or not Bing was at least 18
years old at the time Carol asserts the prerogative to take
custody of Bing. If she was at least 18 years old, then she
is no longer under parental authority and neither Carol
nor Norma can assert the prerogative to take custody.
However, if she was less than 18 years old, then Norma
has a better right since the adoption by Norma of Bing
terminates the parental authority of Carol over Bing.
b) The natural mother, Carol, should have the better right
in light of the principle that the child's welfare is the
paramount consideration in custody rights. Obviously,
Bing's continued stay in her adopting parents' house,
where interaction with the call girls is inevitable, would be
detrimental to her moral and spiritual development. This
could be the reason for Bing's expressed desire to return
to her natural mother. It should be noted, however, that
Bing is no longer a minor, being 19 years of age now. It is
doubtfu1 that a court can still resolve the question of
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custody over one who is sui juris and not otherwise
incapacitated.
SUGGESTED ANSWER:
2) a) On the assumption that Bing is still a minor or
otherwise incapacitated, Carol may petition the proper
court for resolution or rescission of the decree of adoption
on the ground that the adopting parents have exposed, or
are exposing, the child to corrupt influence, tantamount to
giving her corrupting orders or examples. She can also
ask for the revesting in her of parental authority over
Bing. If However, Bing is already 19 years of age and
therefore no longer a minor, it is not Carol but Bing
herself who can petition the court for judicial rescission of
the adoption, provided she can show a ground for
disinheritance of an ascendant.
b) Carol may file an action to deprive Norma of parental
authority under Article 231 of the Family Code or file an
action for the rescission of the adoption under Article 191
in relation to Article 231 (2) of the Family Code.
RA 8043: INTER-COUNTRY ADOPTION ACT
SALIENT PROVISIONS:
INTER-COUNTRY ADOPTION (sec. 26-32)
WHERE to file Petition (sec. 28):
1. A verified petition to adopt a Filipino child
may be filed by a Filipino permanently
residing abroad or foreign national with the
Family Court having jurisdiction of the place
where the child resides or may be found; or
2. It may be filed directly with the ICAB.
WHO may Adopt:
1. Any alien or Filipino citizen permanently
residing abroad who is at least 27 years of
age;
2. Other requirements are the same as with
R.A. 8552 (Domestic Adoption Act of 1998).
WHO may be Adopted: (legally free child)
 Only a child legally available for domestic
adoption may be the subject of inter-
country adoption.
A child under the Inter-Country Adoption
Act is defined as any person below 15
years of age.
Adoption; Illegitimate Child (2010) No.VIII.
Spouses Rex and Lea bore two children now
aged 14 and 8. During the subsistence of their
marriage, Rex begot a child by another
woman. He is now 10 years of age. On Lea’s
discovery of Rex’s fathering a child by another
woman, she filed a petition for legal separation
which was granted. Rex now wants to adopt
his illegitimate child. (A) Whose consent is
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
needed for Rex’s adoption of his illegitimate
child? (2.5%)
SUGGESTED ANSWER: The consent of the
14-year-old legitimate child, of the 10- year
-old illegitimate child and of the biological
mother of the illegitimate child are needed
for the adoption (Section 7 and 9, RA
8552). The consent of Lea is no longer
required because there was already a final
decree of legal separation.
(B) If there was no legal separation, can Rex
still adopt his illegitimate child? Explain.
(2.5%) SUGGESTED ANSWER:
Yes, he can still adopt his illegitimate child but
with the consent of his spouse, of his 14-year-
old legitimate child, of the illegitimate child, and
of the biological mother of the illegitimate child
(Section 7 and 9, RA 8552).
2012 Bar Exam Question
33. Under RA 8043, an adopter is required to
be at least ____ years old and ____ years older
than the child to be adopted at the time of the
application unless the adopter is the parent by
nature of the child. a) 30 and 15 b) 27 and 16
c) 50 and 10 d) 18 and 15
2012 Bar Exam Question
34. Under RA 8043, a child qualified to be
adopted is any person below _____ years old. a)
18 b) 21 c) 15 d) 16
Consent; Consent of the Adopter’s Heirs
(2008)
No.V. Despite several relationships with
different women, Andrew remained unmarried.
His first relationship with Brenda produced a
daughter, Amy, now 30 years old. His second,
with Carla, produced two sons: Jon and Ryan.
His third, with Donna, bore him no children
although Elena has a daughter Jane, from a
previous relationship. His last, with Fe,
produced no biological children but they
informally adopted without court proceedings,
Sandy's now 13 years old, whom they consider
as their own. Sandy was orphaned as a baby
and was entrusted to them by the midwife who
attended to Sandy's birth. All the children,
including Amy, now live with andrew in his
house.
(A). Is there any legal obstacle to the legal
adoption of Amy by Andrew? To the legal
adoption of Sandy by Andrew and Elena? (2%)
SUGGESTED ANSWER: Yes, there is a legal
obstacle to the legal adoption of Amy by
Andrew. Under Sec. 9(d) of RA 8552, the
New Domestic Adoption Act of 1998, the
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written consent of the illegitimate
sons/daughters, ten (10) years of age or
over, of the adopter, if living with said
adopter and the latter's spouse, if any, is
necessary to the adoption. All the children
of Andrew are living with him. Andrew
needs to get the written consent of Jon,
Ryan, Vina and Wilma, who are all ten (10)
years old or more. Sandy's consent to
Amy's adoption is not necessary because
she was not legally adopted by Andrew.
Jane's consent is likewise not necessary
because she is not a child of Andrew.
Sandy, an orphan since birth, is eligible for
adoption under Sec. 8(f) of RA 8552,
provided that Andrew obtains the written
consent of the other children mentioned
above, including Amy and Elena obtains the
written consent of Jane, if she is over ten
years old (Sec. 9(d), RA 8552).
Qualifications of Adopter (2010)
No.IX. Eighteen-year old Filipina Patrice had a
daughter out of wedlock whom she named Laurie.
At 26, Patrice married American citizen John who
brought her to live with him in the United States of
America. John at once signified his willingness to
adopt Laurie. Can John file the petition for
adoption? If yes, what are the requirements? If no,
why? (5%)
SUGGESTED ANSWER: No, John cannot file the
petition to adopt alone. Philippine law requires
husband and wife to adopt jointly except on
certain situations enumerated in the law. The
case of John does not fall in any of the
exceptions (R.A. 8552).
Inter-Country Adoption; Formalities (2005)
Hans Berber, a German national, and his Filipino wife,
Rhoda, are permanent residents of Canada. They desire
so much to adopt Magno, an 8-year old orphaned boy
and a baptismal godson of Rhoda. Since the accidental
death of Magno's parents in 2004, he has been staying
with his aunt who, however, could hardly afford to feed
her own family. Unfortunately, Hans and Rhoda cannot
come to the Philippines to adopt Magno although they
possess all the qualifications as adoptive parents.
Is there a possibility for them to adopt Magno? How
should they go about it? (5%)
SUGGESTED ANSWER:
Yes, it is possible for Hans and Rhoda to adopt Magno.
Republic Act No. 8043 or the Inter-Country Adoption Act,
allows aliens or Filipinos permanently residing abroad to
apply for inter-country adoption of a Filipino child. The law
however requires that only legally free child, or one who
has been voluntarily or involuntarily committed to the
DSWD or any of its accredited agencies, may be subject
of inter¬country adoption. The law further requires that
aside from possessing all the qualifications, the adoptive
parents must come from a country where the Philippines
has diplomatic relations and that the government
maintains a similarly accredited agency and that adoption
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
is allowed under the national law of the alien. Moreover, it
must be further shown that all possibilities for a domestic
adoption have been exhausted and the inter-country
adoption is best for the interest of the child.
Hans and Rhoda have to file an application to adopt
Magno, either with the Regional Trial Court having
jurisdiction over Magno or with the Inter-Country Adoption
Board in Canada. Hans and Rhoda will then undergo a
trial custody for six (6) months from the time of
placement. It is only after the lapse of the trial custody
that the decree of adoption can be issued.
TITLE VIII
SUPPORT
Art. 194. Support comprises everything
indispensable for sustenance, dwelling, clothing,
medical attendance, education and transportation,
in keeping with the financial capacity of the family.
The education of the person entitled to be
supported referred to in the preceding paragraph
shall include his schooling or training for some
profession, trade or vocation, even beyond the age
of majority. Transportation shall include expenses in
going to and from school, or to and from place of
work. (290a)
SUPPORT includes:
1. Sustenance;
2. Dwelling;
3. Clothing;
4. Medical attendance;
5. Education;
6. Transportation.
Art. 195. Subject to the provisions of the
succeeding articles, the following are obliged to
support each other to the whole extent set forth in
the preceding article:
(1) The spouses;
(2) Legitimate ascendants and
descendants;
(3) Parents and their legitimate children and
the legitimate and illegitimate children of
the latter;
(4) Parents and their illegitimate children
and the legitimate and illegitimate children
of the latter; and
(5) Legitimate brothers and sisters, whether
of full or half-blood (291a)
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QA. Spouses X and Y have a minor daughter, Z, such brothers and sisters are not recognized
who needs support for her education. Both X and Y, by their father. (C) the brother or sister in need
who are financially distressed, could not give the stops schooling without valid reason. (D) the
needed support to Z. As it happens, Z’s other need for support of a brother or sister,
relatives are financially capable of giving that already of age, is due to the latter's fault.
support. From whom may Z first rightfully demand
support? From her ___.
A. grandfather. Art. 197. In case of legitimate ascendants;
B. brother. descendants, whether legitimate or illegitimate; and
C. uncle. brothers and sisters, whether legitimately or
D. first cousin. illegitimately related, only the separate property of
the person obliged to give support shall be
Paternity & Filiation; Support: Ascendants answerable provided that in case the obligor has no
& Descendants; Collateral Blood Relatives separate property, the absolute community or the
(2008) conjugal partnership, if financially capable, shall
No.V. Despite several relationships with advance the support, which shall be deducted from
different women, Andrew remained unmarried. the share of the spouse obliged upon the liquidation
His first relationship with Brenda produced a of the absolute community or of the conjugal
daughter, Amy, now 30 years old. His second, partnership. (n)
with Carla, produced two sons: Jon and Ryan.
His third, with Donna, bore him no children
although Elena has a daughter Jane, from a PROPERTIES LIABLE FOR SUPPORT OF
previous relationship. His last, with Fe, RELATIVES (SOURCES OF MUTUAL SUPPORT)
produced no biological children but they
informally adopted without court proceedings, Spouses Absolute community or
Sandy's now 13 years old, whom they consider conjugal property
as Common children Absolute community or
their own. Sandy was orphaned as a baby and was of the spouses conjugal property
entrusted to them by the midwife who attended to Children of a Absolute community or
Sandy's birth. All the children, including Amy, now spouse by conjugal property.
live with andrew in his house. (B). In his old age, another marriage
can Andrew be legally entitled to claim support from A. Under the system of
Amy, Jon, Ryan, Vina, Wilma, and Sandy assuming absolute community, separate
that all of them have the means to support him? property of the parent-spouse.
(1%) SUGGESTED ANSWER: Andrew, in his old If the same is insufficient or
age, cannot be legally entitled to claim support there is no such property, the
because Art. 195, par 2 of the FC limits the absolute community is liable
giving of support to "legitimate ascendants and but the support is considered
descendants." (C). Can Amy, Jon, Ryan, Vina, Illegitimate as advances on the share of
Wilma, and Sandy legally claim support from each children of either the parent to be paid by him to
other? (2%) SUGGESTED ANSWER: Amy, Jon, spouse the community at the time of
Ryan, Vina, Wilma and Sandy cannot legally the liquidation.
claim support from each other because Art. 195,
par 5 limits the giving of support to "legitimate B. Under the system of
brothers and sisters, whether full or half blood." conjugal partnership, separate
property of the parent-spouse.
Art. 196. Brothers and sisters not legitimately If the same is insufficient or
related, whether of the full or half-blood, are there is no such property, the
likewise bound to support each other to the full conjugal property is liable if
extent set forth in Article 194, except only when the financially capable, but the
need for support of the brother or sister, being of support paid to the child shall
age, is due to a cause imputable to the claimant's be deducted from the share of
fault or negligence. (291a) the parent-spouse at the time
of the liquidation of the
2011 Bar Exam Question
partnership.
(44) Illegitimate brothers and sisters, whether
Legitimate Separate property of the
of full or half-blood, are bound to support each
ascendants, other obligor-spouse. If the same is
other, EXCEPT when (A) the brother or sister
legitimate and insufficient or there is none,
who needs support lives in another place. (B)
illegitimate the absolute community or

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descendants, and conjugal property shall be (2) The descendants in the nearest degree;
legitimate and liable if financially capable,
illegitimate which support shall be (3) The ascendants in the nearest degree;
brothers and deducted from the share of the and
sisters spouse upon liquidation of
ACP or CPG (4) The brothers and sisters. (294a)

Art. 200. When the obligation to give support falls

Art. 198. During the proceedings for legal upon two or more persons, the payment of the
separation or for annulment of marriage, and for same shall be divided between them in proportion
declaration of nullity of marriage, the spouses and to the resources of each.
their children shall be supported from the properties
of the absolute community or the conjugal
However, in case of urgent need and by special
partnership. After the final judgment granting the
circumstances, the judge may order only one of
petition, the obligation of mutual support between
them to furnish the support provisionally, without
the spouses ceases. However, in case of legal
prejudice to his right to claim from the other obligors
separation, the court may order that the guilty
the share due from them.
spouse shall give support to the innocent one,
specifying the terms of such order. (292a)
When two or more recipients at the same time claim
SOURCES OF SUPPORT support from one and the same person legally
obliged to give it, should the latter not have
DURING PENDING AFTER
sufficient means to satisfy all claims, the order
MARRIAGE LITIGATION LITIGATION
established in the preceding article shall be
SPOUSES
followed, unless the concurrent obligees should be
From the
the spouse and a child subject to parental authority,
community in which case the child shall be preferred. (295a)
property assets
except if art.
203 applies No obligation to Art. 201. The amount of support, in the cases
that if the support except referred to in Articles 195 and 196, shall be in
From the claimant if there is legal proportion to the resources or means of the giver
community spouse is the separation, in and to the necessities of the recipient. (296a)
property guilty spouse, which case the
he/she will not court may Art. 202. Support in the cases referred to in the
be entitled to require the preceding article shall be reduced or increased
support. guilty spouse to proportionately, according to the reduction or
give support increase of the necessities of the recipient and the
If the spouses resources or means of the person obliged to furnish
are under the same. (297a)
conjugal
partnership of Art. 203. The obligation to give support shall be
gains, support demandable from the time the person who has a
is considered right to receive the same needs it for maintenance,
an advance of but it shall not be paid except from the date of
such spouses’ judicial or extra-judicial demand.
share
CHILDREN Support pendente lite may be claimed in
From the From the From the accordance with the Rules of Court.
community community separate
property property property of the Payment shall be made within the first five days of
spouses each corresponding month or when the recipient
dies, his heirs shall not be obliged to return what he
Art. 199. Whenever two or more persons are has received in advance. (298a)
obliged to give support, the liability shall devolve
upon the following persons in the order herein Marriage; Annulment; Support Pendente
provided: Lite (2010) No.V. G filed on July 8, 2000 a
petition for declaration of nullity of her
(1) The spouse; marriage to B. During the pendency of the

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case, the couple entered into a compromise strangers
agreement to dissolve their absolute Not exempt from
community of property. B ceded his right to attachment and
their house and lot and all his shares in two execution because it is
business firms to G and their two children, not legal obligation.
aged 18 and 19. B also opened a bank account Exempt from execution EXCEPTION: If the
in the amount of P3 million in the name of the and attachment giver contracts a person
two children to answer for their educational who is obliged by law to
expenses until they finish their college support, in which case
degrees. For her part, G undertook to shoulder only the excess of what
the day-to-day living expenses and upkeep of is obliged (based on
the children. The Court approved the spouses’ need) can be attached
agreement on September 8, 2000. (A) Suppose or subject of execution
the business firms suffered reverses, rendering Follow the contract
G unable to support herself and the children. If contained in a will, which says that the
Can G still ask for support pendente lite from apply the rules of obligation no matter
B? Explain. (3%) contractual support what happens.
SUGGESTED ANSWER: If B acquiesces and because there is no But if the changes in
does not file the action to impugn the legitimacy more obligation of circumstances are
support to speak of manifestly beyond the
of the child within the prescriptive period for
since the giver is contemplation of the
doing so in Article 170 of the Family Code, G's already dead parties, support may be
daughter by another man shall be conclusively adjusted accordingly.
presumed as the legitimate daughter of B by
G.(Wrong Answer)
Art. 205. The right to receive support under this
(B) Suppose in late 2004 the two children had Title as well as any money or property obtained as
squandered the P3 million fund for their education such support shall not be levied upon on
before they could obtain their college degrees, can attachment or execution. (302a)
they ask for more support from B? Explain. (3%)
SUGGESTED ANSWER: Yes, the two children Art. 206. When, without the knowledge of the
can still ask for support for schooling or person obliged to give support, it is given by a
stranger, the latter shall have a right to claim the
training for some professions, trade or
same from the former, unless it appears that he
vocation, even beyond the age of majority until gave it without intention of being reimbursed.
they shall have finished or completed their (2164a)
education (Article 194, Paragraph 2, Family
Code; Javier v. Lucero, 94 Phil. 634 Art. 207. When the person obliged to support
{1954}].Their having squandered the money another unjustly refuses or fails to give support
given to them for their education will not when urgently needed by the latter, any third
deprive them of their right to complete an person may furnish support to the needy individual,
with right of reimbursement from the person obliged
education, or to extinguish the obligation of the
to give support. This Article shall particularly apply
parents to ensure the future of their children. when the father or mother of a child under the age
of majority unjustly refuses to support or fails to give
support to the child when urgently needed. (2166a)

Art. 204. The person obliged to give support shall Art. 208. In case of contractual support or that given
have the option to fulfill the obligation either by by will, the excess in amount beyond that required
paying the allowance fixed, or by receiving and for legal support shall be subject to levy on
maintaining in the family dwelling the person who attachment or execution.
has a right to receive support. The latter alternative
cannot be availed of in case there is a moral or
legal obstacle thereto. (299a) Furthermore, contractual support shall be subject to
adjustment whenever modification is necessary due
to changes of circumstances manifestly beyond the
LEGACY OF CONTRACTUAL contemplation of the parties. (n)
SUPPPORT SUPPORT
Based on law Based on contract, so it
can be between
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NOTE: Judgment of support is always provisional in
character. Res Judicata does not apply (Lam vs.
Chua, 426 SCRA 29).
TITLE IX
PARENTAL AUTHORITY
Chapter 1. General Provisions
Art. 209. Pursuant to the natural right and duty of
parents over the person and property of their
unemancipated children, parental authority and
responsibility shall include the caring for and rearing
them for civic consciousness and efficiency and the
development of their moral, mental and physical
character and well-being. (n)
PARENTAL AUTHORITY (patria potestas)
Is the mass of rights and obligations which parents
have in relation to the person and property of their
children until their emancipation, and even after,
under certain circumstances.
CHARACTERISTICS:
1. It is a natural right and duty of the parents;
2. It cannot be renounced, transferred or
waived, except in cases authorized by law;
3. It is jointly exercised by the father and the
mother;
4. It is purely personal and cannot be
exercised though an agent;
5. It is temporary.
Art. 210. Parental authority and responsibility may
not be renounced or transferred except in the cases
authorized by law. (313a)
Art. 211. The father and the mother shall jointly
exercise parental authority over the persons of their
common children. In case of disagreement, the
father's decision shall prevail, unless there is a
judicial order to the contrary.
Children shall always observe respect and
reverence towards their parents and are obliged to
obey them as long as the children are under
parental authority. (311a)
Note: An illegitimate child shall be under the
parental authority of the mother regardless of
whether the father admits paternity. The recognition
of the father could be a ground for ordering the
latter to give support to, but not custody of the child.
The law explicitly confers to the mother sole
parental authority over an illegitimate child. It
follows that only if she defaults can the father
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
assume custody and authority over the minor. Of
course, the putative father may adopt his own
illegitimate child; in such a case, the child is raised
to the status of a legitimate child of the adoptive
parent (Briones vs. Miguel, 440 SCRA 455, [2004]).
Art. 212. In case of absence or death of either
parent, the parent present shall continue exercising
parental authority. The remarriage of the surviving
parent shall not affect the parental authority over
the children, unless the court appoints another
person to be the guardian of the person or property
of the children. (n)
Art. 213. In case of separation of the parents,
parental authority shall be exercised by the parent
designated by the Court. The Court shall take into
account all relevant considerations, especially the
choice of the child over seven years of age, unless
the parent chosen is unfit. (n)
No child under seven years of age shall be separated
from the mother unless the court finds compelling
reasons to order otherwise.
Parental Authority; Child under 7 years of age (2006)
years of age shall be separated from the mother unless
the court finds compelling reasons to order otherwise.
(1) Explain the rationale of this provision. (2.5%)
SUGGESTED ANSWER:
The rationale of the 2nd paragraph of Article 213 of the
Family Code is to avoid the tragedy of a mother who sees
her baby torn away from her. It is said that the maternal
affection and care during the early years of the child are
generally needed by the child more than paternal care
(Hontiveros v. IAC, G.R. No. 64982, October 23, 1984;
Tolentino, Commentaries and Jurisprudence on the Civil
Code, Volume One, pp. 718-719). The general rule is that
a child below 7 years old shall not be separated from his
mother due to his basic need for her loving care (Espiritu
v. C.A., G.R. No. 115640, March 15,1995).
(2) Give at least 3 examples of "compelling reasons"
which justify the taking away from the mother's custody of
her child under 7 years of age. (2.5%)
SUGGESTED ANSWER:
a. The mother is insane (Sempio-Diy, Handbook
on the Family Code of the Philippines, pp. 296-297);
• The mother is sick with a disease that is com-
municable and might endanger the health and life of the
child;
• The mother has been maltreating the child;
• The mother is engaged in prostitution;
• The mother is engaged in adulterous
relationship;
• The mother is a drug addict;
• The mother is a habitual drunk or an alcoholic;
• The mother is in jail or serving sentence.
PARENTAL PREFERENCE RULE
Parents prevail over grandparents in matters of
custody of the child.
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MATERNAL PREFERENCE RULES NOTE: If he is willing, he may so testify.
Mother prevails over the father.

TENDER AGE PRESUMPTION Chapter 2. Substitute and Special Parental

No child below 7 years old be separated from the
mother except for compelling reasons.
Note: Lesbianism is not compelling reason to
deprive the mother of a child below seven years of
age. To deprive the wife of custody, the husband
must clearly establish that her moral lapses have
had an adverse effect on the welfare of the child or
have distracted the offending spouse from
exercising proper parental authority (Gualberto vs.
Gualberto, GR No. 154994, June 28, 2005).
Art. 214. In case of death, absence or unsuitability
of the parents, substitute parental authority shall be
exercised by the surviving grandparent. In case
several survive, the one designated by the court,
taking into account the same consideration
mentioned in the preceding article, shall exercise
the authority. (355a)
WHO EXERCISES PARENTAL AUTHORITY
Jointly exercised. In case of
Both parents are disagreement; husband
present prevails, unless there is a
judicial order to the contrary
Absence of either Surviving parent
parent
Remarriage of Still the surviving parent,
surviving parent unless the court appoints a
guardian over the child
Parent designation by the
court.
The court shall take into
account all relevant
Separation of considerations, especially the
parents choice of the child over 7
years old, unless the parent
chosen is unfit.
GR: A child under 7 years of
age shall not be separated
from the mother unless the
court finds compelling reasons
to order otherwise
The paramount consideration in matters of custody
of the child is the welfare and well-being of the child
(Tonog vs. CA, GR No. 122906, Feb. 7, 2002).
Art. 215. No descendant shall be compelled, in a
criminal case, to testify against his parents and
grandparents, except when such testimony is
indispensable in a crime against the descendant or
by one parent against the other. (315a)
Authority
Art. 216. In default of parents or a judicially
appointed guardian, the following person shall
exercise substitute parental authority over the child
in the order indicated:
(1) The surviving grandparent, as provided
in Art. 214;
(2) The oldest brother or sister, over
twenty-one years of age, unless unfit or
disqualified; and
(3) The child's actual custodian, over
twenty-one years of age, unless unfit or
disqualified.
Whenever the appointment or a judicial guardian
over the property of the child becomes necessary,
the same order of preference shall be observed.
(349a, 351a, 354a)
Art. 217. In case of foundlings, abandoned
neglected or abused children and other children
similarly situated, parental authority shall be
entrusted in summary judicial proceedings to heads
of children's homes, orphanages and similar
institutions duly accredited by the proper
government agency. (314a)
Art. 218. The school, its administrators and
teachers, or the individual, entity or institution
engaged in child care shall have special parental
authority and responsibility over the minor child
while under their supervision, instruction or custody.
Authority and responsibility shall apply to all
authorized activities whether inside or outside the
premises of the school, entity or institution. (349a)
Parental Authority; Special Parental Authority;
Liability of Teachers (2003)
If during class hours, while the teacher was chatting with
other teachers in the school corridor, a 7 year old male
pupil stabs the eye of another boy with a ball pen during a
fight, causing permanent blindness to the victim, who
could be liable for damages for the boy’s injury: the
teacher, the school authorities, or the guilty boy’s
parents? Explain.
SUGGESTED ANSWER:
The school, its administrators, and teachers have special
parental authority and responsibility over the minor child
while under their supervision, instruction or custody
(Article 218, FC). They are principally and solidarily
liable for the damages caused by the acts or
omissions of the unemancipated minor unless they
exercised the proper diligence required under the

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circumstances (Article 219, FC). In the problem, the
TEACHER and the SCHOOL AUTHORITIES are liable
for the blindness of the victim, because the student who
cause it was under their special parental authority and
Chapter 3. Effect of Parental Authority
they were negligent. They were negligent because they Upon the Persons of the Children
were chatting in the corridor during the class period when
the stabbing incident occurred. The incident could have
been prevented had the teacher been inside the
classroom at that time. The guilty boy’s PARENTS are
subsidiarily liable under Article 219 of the Family Code.
Art. 220. The parents and those exercising parental
authority shall have with the respect to their
Art. 219. Those given the authority and unemancipated children on wards the following
responsibility under the preceding Article shall be rights and duties:
principally and solidarily liable for damages caused (1) To keep them in their company, to
by the acts or omissions of the unemancipated support, educate and instruct them by right
minor. The parents, judicial guardians or the precept and good example, and to provide
persons exercising substitute parental authority for their upbringing in keeping with their
over said minor shall be subsidiarily liable. means;

The respective liabilities of those referred to in the (2) To give them love and affection, advice
preceding paragraph shall not apply if it is proved and counsel, companionship and
that they exercised the proper diligence required understanding;
under the particular circumstances.
(3) To provide them with moral and spiritual
All other cases not covered by this and the guidance, inculcate in them honesty,
preceding articles shall be governed by the integrity, self-discipline, self-reliance,
provisions of the Civil Code on quasi-delicts. (n) industry and thrift, stimulate their interest in
civic affairs, and inspire in them compliance
SUBSTITUTE SPECIAL PARENTAL with the duties of citizenship;
PARENTAL AUTHORITY
AUTHORITY (4) To furnish them with good and
It is exercised wholesome educational materials,
It is exercised in case of concurrently with the supervise their activities, recreation and
death, absence, or parental authority of the association with others, protect them from
unsuitability of parents. parents and rest on the bad company, and prevent them from
Hence, it is not theory that while the acquiring habits detrimental to their health,
exercised by the parents child is in the custody of studies and morals;
the person exercising
special parental (5) To represent them in all matters
authority, the parents affecting their interests;
temporarily relinquish
parental authority over (6) To demand from them respect and
the child to the latter obedience;
Parental Authority; Substitute vs. Special (2004)
Distinguish briefly but clearly between: Substitute (7) To impose discipline on them as may be
parental required under the circumstances; and
sperm. After a series of test, Andy's sperm was medically
authority and special parental authority. (8) To perform such other duties as are
SUGGESTED ANSWER: imposed by law upon parents and
In substitute parental authority, the parents lose their
guardians. (316a)
parental authority in favor of the substitute who acquires it
to the exclusion of the parents.
In special parental authority, the parents or anyone Art. 221. Parents and other persons exercising
exercising parental authority does not lose parental parental authority shall be civilly liable for the
authority. Those who are charged with special parental injuries and damages caused by the acts or
authority exercise such authority only during the time that omissions of their unemancipated children living in
the child is in their custody or supervision. their company and under their parental authority
Substitute parental authority displaces parental authority
subject to the appropriate defenses provided by
while special parental authority concurs with parental
authority. law. (2180(2)a and (4)a )
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Notes:
 Minor (unemancipated children) referred to in
this article is below 21 years old. [sec. 3, RA
6809].
 Defense of a good father of the family is
available
Art. 222. The courts may appoint a guardian of the
child's property or a guardian ad litem when the
best interests of the child so requires. (317)
Art. 223. The parents or, in their absence or
incapacity, the individual, entity or institution
exercising parental authority, may petition the
proper court of the place where the child resides,
for an order providing for disciplinary measures
over the child. The child shall be entitled to the
assistance of counsel, either of his choice or
appointed by the court, and a summary hearing
shall be conducted wherein the petitioner and the
child shall be heard.
However, if in the same proceeding the court finds
the petitioner at fault, irrespective of the merits of
the petition, or when the circumstances so warrant,
the court may also order the deprivation or
suspension of parental authority or adopt such
other measures as it may deem just and proper.
(318a)
Art. 224. The measures referred to in the preceding
article may include the commitment of the child for
not more than thirty days in entities or institutions
engaged in child care or in children's homes duly
accredited by the proper government agency.
The parent exercising parental authority shall not
interfere with the care of the child whenever
committed but shall provide for his support. Upon
proper petition or at its own instance, the court may
terminate the commitment of the child whenever
just and proper. (391a)
Chapter 4. Effect of Parental Authority Upon
the Property of the Children
Art. 225. The father and the mother shall jointly
exercise legal guardianship over the property of the
unemancipated common child without the necessity
of a court appointment. In case of disagreement,
the father's decision shall prevail, unless there is a
judicial order to the contrary.
Where the market value of the property or the
annual income of the child exceeds P50,000, the
parent concerned shall be required to furnish a
bond in such amount as the court may determine,
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
but not less than ten per centum (10%) of the value
of the property or annual income, to guarantee the
performance of the obligations prescribed for
general guardians.
A verified petition for approval of the bond shall be
filed in the proper court of the place where the child
resides, or, if the child resides in a foreign country,
in the proper court of the place where the property
or any part thereof is situated.
The petition shall be docketed as a summary
special proceeding in which all incidents and issues
regarding the performance of the obligations
referred to in the second paragraph of this Article
shall be heard and resolved.
The ordinary rules on guardianship shall be merely
suppletory except when the child is under substitute
parental authority, or the guardian is a stranger, or
a parent has remarried, in which case the ordinary
rules on guardianship shall apply. (320a)
Art. 226. The property of the unemancipated child
earned or acquired with his work or industry or by
onerous or gratuitous title shall belong to the child
in ownership and shall be devoted exclusively to the
latter's support and education, unless the title or
transfer provides otherwise.
The right of the parents over the fruits and income
of the child's property shall be limited primarily to
the child's support and secondarily to the collective
daily needs of the family. (321a, 323a)
Art. 227. If the parents entrust the management or
administration of any of their properties to an
unemancipated child, the net proceeds of such
property shall belong to the owner. The child shall
be given a reasonable monthly allowance in an
amount not less than that which the owner would
have paid if the administrator were a stranger,
unless the owner, grants the entire proceeds to the
child. In any case, the proceeds thus give in whole
or in part shall not be charged to the child's legitime.
(322a)
Chapter 5. Suspension or Termination of
Parental Authority
Art. 228. Parental authority terminates
permanently:
(1) Upon the death of the parents;
(2) Upon the death of the child; or
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(3) Upon emancipation of the child. (327a)
Art. 229. Unless subsequently revived by a final
judgment, parental authority also terminates:
(1) Upon adoption of the child;
(2) Upon appointment of a general
guardian;
(3) Upon judicial declaration of
abandonment of the child in a case filed for
the purpose;
(4) Upon final judgment of a competent
court divesting the party concerned of
parental authority; or
(5) Upon judicial declaration of absence or
incapacity of the person exercising parental
authority. (327a)
Art. 230. Parental authority is suspended upon
conviction of the parent or the person exercising the
same of a crime which carries with it the penalty of
civil interdiction. The authority is automatically
reinstated upon service of the penalty or upon
pardon or amnesty of the offender. (330a)
2012 Bar Exam Question
35. Which of the following DOES NOT result in
permanent termination of parental authority?
a) Death of the parents. b) Death of the child.
c) Emancipation of the child. d) Conviction of
the parents of a crime which carries with it
the penalty of civil interdiction.
Art. 231. The court in an action filed for the purpose
in a related case may also suspend parental
authority if the parent or the person exercising the
same:
(1) Treats the child with excessive
harshness or cruelty;
(2) Gives the child corrupting orders,
counsel or example;
(3) Compels the child to beg; or
(4) Subjects the child or allows him to be
subjected to acts of lasciviousness.
The grounds enumerated above are deemed to
include cases which have resulted from culpable
negligence of the parent or the person
exercising parental authority.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
If the degree of seriousness so warrants, or the
welfare of the child so demands, the court shall
deprive the guilty party of parental authority or
adopt such other measures as may be proper
under the circumstances.
The suspension or deprivation may be revoked
and the parental authority revived in a case filed
for the purpose or in the same proceeding if the
court finds that the cause therefor has ceased
and will not be repeated. (33a)
2012 Bar Exam Question
36. The court, in an action filed for the
purpose, may suspend parental authority if
the parent or the person exercising parental
authority commits any of the following acts,
except: a) Treats the child with excessive
harshness or cruelty. b) Gives the child
corrupting orders, counsel or example. c)
Compels the child to take up a course in
college against his/her will.
d) Subjects the child or allows him to be
subjected to acts of lasciviousness.
Art. 232. If the person exercising parental
authority has subjected the child or allowed him
to be subjected to sexual abuse, such person
shall be permanently deprived by the court of
such authority. (n)
Art. 233. The person exercising substitute
parental authority shall have the same authority
over the person of the child as the parents.
In no case shall the school administrator,
teacher of individual engaged in child care
exercising special parental authority inflict
corporal punishment upon the child. (n)
TITLE X
EMANCIPATION AND AGE OF MAJORITY
Art. 234. Emancipation takes place by the
attainment of majority. Unless otherwise
provided, majority commences at the age of
twenty-one years.
Emancipation also takes place:
(1) By the marriage of the minor; or
(2) By the recording in the Civil Register of
an agreement in a public instrument
executed by the parent exercising parental
authority and the minor at least eighteen
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years of age. Such emancipation shall be
irrevocable. (397a, 398a, 400a, 401a)
NOTE: Majority age is now 18 years old.
EMANCIPATION (1993)
Julio and Lea, both 18 years old, were sweethearts. At a
party at the house of a mutual friend. Lea met Jake, also
18 years old, who showed interest in her. Lea seemed to
entertain Jake because she danced with him many times.
In a fit of jealousy, Julio shot Jake with his father's 38
caliber revolver which, before going to the party he was
able to get from the unlocked drawer inside his father's
bedroom. Jake died as a result of the lone gunshot
wound he sustained. His parents sued Julio's parents for
damages arising from quasi-delict. At the time of the
incident, Julio was 18 years old living with his parents.
Julio's parents moved to dismiss the complaint against
them claiming that since Julio was already of majority
age, they were no longer liable for his acts. 1) Should the
motion to dismiss be granted? Why? 2) What is the
liability of Julio's parents to Jake's parents? Explain your
answer.
SUGGESTED ANSWER:
1) No, the Motion to Dismiss should not be granted.
Article 236 of the Family Code as amended by Republic
Act 6809, provides in the third paragraph that "nothing in
this Code shall be construed to derogate from the duty or
responsibility of parents and guardians for children and
wards below twenty-one years of age mentioned in the
second and third paragraphs of Article 2180 of the Civil
Code". 2) The liability of Julio's parents to Jake's parents
arises from quasi-delict (Arts. 2176 and 2180 Civil Code)
and shall cover specifically the following:
a) P50,000.00 for the death of the son;
b) such amount as would correspond to lost earning
capacity; and
c) moral damages.
Art. 235. The provisions governing emancipation
by recorded agreement shall also apply to an
orphan minor and the person exercising parental
authority but the agreement must be approved
by the court before it is recorded. (n)
Art. 236. Emancipation for any cause shall
terminate parental authority over the person and
property of the child who shall then be qualified
and responsible for all acts of civil life. (412a)
“Nothing in this Code shall be construed to
derogate from the duty or responsibility of
parents and guardians for children and wards
below twenty-one years of age mentioned in the
second and third paragraphs of art. 2180 of the
Civil Code” (sec. 3, RA 6809, amending art. 236
of FC).
Art. 237. The annulment or declaration of nullity
of the marriage of a minor or of the recorded
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
agreement mentioned in the foregoing. Articles
234 and 235 shall revive the parental authority
over the minor but shall not affect acts and
transactions that took place prior to the
recording of the final judgment in the Civil
Register. (n)
TITLE XI
SUMMARY JUDICIAL PROCEEDINGS IN THE
FAMILY LAW
Chapter 1. Prefatory Provisions
Art. 238. Until modified by the Supreme Court,
the procedural rules provided for in this Title
shall apply as regards separation in fact
between husband and wife, abandonment by
one of the other, and incidents involving parental
authority. (n)
Chapter 2. Separation in Fact
Art. 239. When a husband and wife are
separated in fact, or one has abandoned the
other and one of them seeks judicial
authorization for a transaction where the
consent of the other spouse is required by law
but such consent is withheld or cannot be
obtained, a verified petition may be filed in court
alleging the foregoing facts.
The petition shall attach the proposed deed, if
any, embodying the transaction, and, if none,
shall describe in detail the said transaction and
state the reason why the required consent
thereto cannot be secured. In any case, the final
deed duly executed by the parties shall be
submitted to and approved by the court. (n)
Art. 240. Claims for damages by either spouse,
except costs of the proceedings, may be
litigated only in a separate action. (n)
Art. 241. Jurisdiction over the petition shall, upon
proof of notice to the other spouse, be exercised
by the proper court authorized to hear family
cases, if one exists, or in the regional trial court
or its equivalent sitting in the place where either
of the spouses resides. (n)
Art. 242. Upon the filing of the petition, the court
shall notify the other spouse, whose consent to
the transaction is required, of said petition,
ordering said spouse to show cause why the
petition should not be granted, on or before the
date set in said notice for the initial conference.
The notice shall be accompanied by a copy of
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the petition and shall be served at the last incapacity, the individuals, entities or institutions
known address of the spouse concerned. (n) exercising parental authority over the child. (n)

Art. 243. A preliminary conference shall be
conducted by the judge personally without the
parties being assisted by counsel. After the
initial conference, if the court deems it useful,
the parties may be assisted by counsel at the
succeeding conferences and hearings. (n)
Art. 252. The rules in Chapter 2 hereof shall also
govern summary proceedings under this
Chapter insofar as they are applicable. (n)
Chapter 4. Other Matters Subject to
Summary Proceedings

Art. 244. In case of non-appearance of the
spouse whose consent is sought, the court shall
inquire into the reasons for his failure to appear,
and shall require such appearance, if possible.
(n)
Art. 253. The foregoing rules in Chapters 2 and
3 hereof shall likewise govern summary
proceedings filed under Articles 41, 51, 69, 73,
96, 124 and 127, insofar as they are applicable.
(n)

Art. 245. If, despite all efforts, the attendance of

the non-consenting spouse is not secured, the TITLE XII
court may proceed ex parte and render
judgment as the facts and circumstances may FINAL PROVISIONS
warrant. In any case, the judge shall endeavor to
protect the interests of the non-appearing
spouse. (n) -------------End of Family Code-----------

Art. 246. If the petition is not resolved at the

initial conference, said petition shall be decided
Title X. - FUNERALS (n)
in a summary hearing on the basis of affidavits,
documentary evidence or oral testimonies at the
Art. 305. The duty and the right to make
sound discretion of the court. If testimony is
arrangements for the funeral of a relative shall be in
needed, the court shall specify the witnesses to
accordance with the order established for support,
be heard and the subject-matter of their
under Article 294. In case of descendants of the
testimonies, directing the parties to present said
same degree, or of brothers and sisters, the oldest
witnesses. (n)
shall be preferred. In case of ascendants, the
paternal shall have a better right.
Art. 247. The judgment of the court shall be
immediately final and executory. (n)
Art. 306. Every funeral shall be in keeping with the
social position of the deceased.
Art. 248. The petition for judicial authority to
administer or encumber specific separate
Art. 307. The funeral shall be in accordance with
property of the abandoning spouse and to use
the expressed wishes of the deceased. In the
the fruits or proceeds thereof for the support of
absence of such expression, his religious beliefs or
the family shall also be governed by these rules.
affiliation shall determine the funeral rites. In case
(n)
of doubt, the form of the funeral shall be decided
upon by the person obliged to make arrangements
Chapter 3. Incidents Involving Parental for the same, after consulting the other members of
Authority the family.
Art. 249. Petitions filed under Articles 223, 225
Art. 308. No human remains shall be retained,
and 235 of this Code involving parental authority
interred, disposed of or exhumed without the
shall be verified. (n)
consent of the persons mentioned in articles 294
and 305.
Art. 250. Such petitions shall be verified and
filed in the proper court of the place where the
Art. 309. Any person who shows disrespect to the
child resides. (n)
dead, or wrongfully interferes with a funeral shall be
liable to the family of the deceased for damages,
Art. 251. Upon the filing of the petition, the court material and moral.
shall notify the parents or, in their absence or

JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 113

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Art. 310. The construction of a tombstone or
mausoleum shall be deemed a part of the funeral
expenses, and shall be chargeable to the conjugal
partnership property, if the deceased is one of the
spouses.
Title XIII. - USE OF SURNAMES (n)
NOTE: Other provisions are repealed by the Family
Code.
Art. 364. Legitimate and legitimated children shall
principally use the surname of the father.
Art. 365. An adopted child shall bear the surname
of the adopter.
Art. 366. A natural child acknowledged by both
parents shall principally use the surname of the
father. If recognized by only one of the parents, a
natural child shall employ the surname of the
recognizing parent.
Art. 367. Natural children by legal fiction shall
principally employ the surname of the father.
Art. 368. Illegitimate children referred to in Article
287 shall bear the surname of the mother.
Art. 369. Children conceived before the decree
annulling a voidable marriage shall principally use
the surname of the father.
Art. 370. A married woman may use:
(1) Her maiden first name and surname and
add her husband's surname, or
(2) Her maiden first name and her
husband's surname or
(3) Her husband's full name, but prefixing a
word indicating that she is his wife, such as
"Mrs."
Art. 371. In case of annulment of marriage, and the
wife is the guilty party, she shall resume her maiden
name and surname. If she is the innocent spouse,
she may resume her maiden name and surname.
However, she may choose to continue employing
her former husband's surname, unless:
(1) The court decrees otherwise, or
(2) She or the former husband is married
again to another person.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 372. When legal separation has been granted,
the wife shall continue using her name and
surname employed before the legal separation.
Art. 373. A widow may use the deceased husband's
surname as though he were still living, in
accordance with Article 370.
Art. 374. In case of identity of names and
surnames, the younger person shall be obliged to
use such additional name or surname as will avoid
confusion.
Art. 375. In case of identity of names and surnames
between ascendants and descendants, the word
"Junior" can be used only by a son. Grandsons and
other direct male descendants shall either:
(1) Add a middle name or the mother's
surname, or
(2) Add the Roman Numerals II, III, and so
on.
Art. 376. No person can change his name or
surname without judicial authority.
Art. 377. Usurpation of a name and surname may
be the subject of an action for damages and other
relief.
Art. 378. The unauthorized or unlawful use of
another person's surname gives a right of action to
the latter.
Art. 379. The employment of pen names or stage
names is permitted, provided it is done in good faith
and there is no injury to third persons. Pen names
and stage names cannot be usurped.
Art. 380. Except as provided in the preceding
article, no person shall use different names and
surnames.
CHILD CONCERNED SURNAME TO BE
USED
Legitimate child Father’s surname
Legitimated child Father’s surname
Mother’s surname; or
Father’s surname if
Illegitimate child requisites under RA
9255 are complied
Conceived prior to the Father’s surname
annulment of marriage
Conceived after the Mother’s surname
annulment of marriage
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Adopted child adopter’s surname

Title XIV. - ABSENCE

WIFE SURNAME TO BE CHAPTER 1
USED PROVISIONAL MEASURES IN CASE OF
a. Retain the use of ABSENCE
her maiden name
valid marriage (before (use of husband’s Art. 381. When a person disappears from his
husband dies) surname is not a domicile, his whereabouts being unknown, and
duty but merely an without leaving an agent to administer his property,
option of the wife the judge, at the instance of an interested party, a
e.g. Maricel relative, or a friend, may appoint a person to
Bompat represent him in all that may be necessary.
b. First name and
maiden name + her This same rule shall be observed when under
husband’s surname similar circumstances the power conferred by the
e.g. Maricel absentee has expired. (181a)
Bompat Auza
Art. 382. The appointment referred to in the
c. First name + her preceding article having been made, the judge shall
husband’s surname take the necessary measures to safeguard the
e.g. Maricel Auza rights and interests of the absentee and shall
specify the powers, obligations and remuneration of
d. Her husband’s full his representative, regulating them, according to the
name but prefixing circumstances, by the rules concerning guardians.
a word indicating (182)
that she is his wife
e.g. Mrs. Jannycer 2011 Bar Exam Question
Auza (62) A court declared Ricardo, an old bachelor,
Wife is the She shall resume using an absentee and appointed Cicero
guilty party her maiden name administrator of his property. After a year, it
a. Resume using her was discovered that Ricardo had died abroad.
maiden name; What is the effect of the fact of his death on
b. Continue the administration of his property? (A) With
employing her Ricardo no longer an absentee but a deceased
husband’s person, Cicero will cease to be administrator of
Marriage Wife is the
innocent surname, his properties. (B) The administration shall
is annulled
party UNLESS— be given by the court having jurisdiction
1) The court over the intestate proceedings to a new
decrees administrator whom it will appoint. (C)
otherwise; Cicero automatically becomes administrator of
2) She or the Ricardo’s estate until judicially relieved. (D)
former Cicero’s alienations of Ricardo's property will
husband is be set aside.
married again
to another 2011 Bar Exam Question
person (17) When can a missing person who left
someone to administer his property be
She shall continue declared an absentee by the court? When he
using the name and has been missing for (A) 2 years from the
Legally separated surname she was receipt of the last news about him. (B) 7 years
employing prior to the from the receipt of the last news about him.
legal separation (C) 10 years from the receipt of the last news
(Laperal vs.Republic, 6 about him. (D) 5 years from the receipt of
SCRA 357) the last news about him.
Divorced Same as widowed
spouse
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 115
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Art. 383. In the appointment of a representative, the
spouse present shall be preferred when there is no
legal separation.
If the absentee left no spouse, or if the spouse
present is a minor, any competent person may be
appointed by the court. (183a)
CHAPTER 2
DECLARATION OF ABSENCE
Art. 384. Two years having elapsed without any
news about the absentee or since the receipt of
the last news, and five years in case the
absentee has left a person in charge of the
administration of his property, his absence may
be declared. (184)
QA. When can a missing person who left someone
to administer his property be
declared an absentee by the court? When he has
been missing for ____?
A. 2 years from the receipt of the last news about
him.
B. 7 years from the receipt of the last news about
him.
C. 10 years from the receipt of the last news about
him.
D. 5 years from the receipt of the last news about
him.
Art. 385. The following may ask for the declaration
of absence:
(1) The spouse present;
(2) The heirs instituted in a will, who may
present an authentic copy of the same;
(3) The relatives who may succeed by the
law of intestacy;
(4) Those who may have over the property
of the absentee some right subordinated to
the condition of his death. (185)
Art. 386. The judicial declaration of absence shall
not take effect until six months after its publication
in a newspaper of general circulation. (186a)
2011 Bar Exam Question
(1)When does a declaration of absence of a
missing person take effect? (A) Immediately
from the issuance of the declaration of
absence. (B) 3 months after the publication of
the declaration of absence. (C) 6 months after
the publication of the declaration of
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
absence. (D) 15 days from the issuance of the
declaration of absence.
CHAPTER 3
ADMINISTRATION OF THE PROPERTY OF THE
ABSENTEE
Art. 387. An administrator of the absentee's
property shall be appointed in accordance with
Article 383. (187a)
Art. 388. The wife who is appointed as an
administratrix of the husband's property cannot
alienate or encumber the husband's property, or
that of the conjugal partnership, without judicial
authority. (188a)
Art. 389. The administration shall cease in any of
the following cases:
(1) When the absentee appears personally
or by means of an agent;
(2) When the death of the absentee is
proved and his testate or intestate heirs
appear;
(3) When a third person appears, showing
by a proper document that he has acquired
the absentee's property by purchase or
other title.
In these cases the administrator shall cease in the
performance of his office, and the property shall be
at the disposal of those who may have a right
thereto. (190)
CHAPTER 4
PRESUMPTION OF DEATH
Art. 390. After an absence of seven years, it being
unknown whether or not the absentee still lives, he
shall be presumed dead for all purposes, except for
those of succession.
The absentee shall not be presumed dead for the
purpose of opening his succession till after an
absence of ten years. If he disappeared after the
age of seventy-five years, an absence of five years
shall be sufficient in order that his succession may
be opened. (n)
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Art. 391. The following shall be presumed dead
for all purposes, including the division of the
estate among the heirs:
(1) A person on board a vessel lost during a
sea voyage, or an aeroplane which is
missing, who has not been heard of for four
years since the loss of the vessel or
aeroplane;
(2) A person in the armed forces who has
taken part in war, and has been missing for
four years;
(3) A person who has been in danger of
death under other circumstances and his
existence has not been known for four
years. (n)
Art. 392. If the absentee appears, or without
appearing his existence is proved, he shall recover
his property in the condition in which it may be
found, and the price of any property that may have
been alienated or the property acquired therewith;
but he cannot claim either fruits or rents. (194)
WHEN IS TIME OF DEATH RECKONED
A. Ordinary Absence - at the end of the 7th
(or 10th) year.
B. Extraordinary Absence – at the moment
of the occurrence of the cause of
disappearance.
CHAPTER 5
EFFECT OF ABSENCE UPON THE
CONTINGENT RIGHTS OF THE ABSENTEE
Note: arts 393 to 396 are excluded.
Title XVI. - CIVIL REGISTER
Art. 407. Acts, events and judicial decrees
concerning the civil status of persons shall be
recorded in the civil register. (325a)
Art. 408. The following shall be entered in the
civil register:
(1) Births;
(2) marriages;
(3) deaths;
(4) legal separations;
(5) annulments of marriage;
(6) judgments declaring marriages void
from the beginning;
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(7) legitimations;
(8) adoptions;
(9) acknowledgments of natural children;
(10) naturalization;
(11) loss, or
(12) recovery of citizenship;
(13) civil interdiction;
(14) judicial determination of filiation;
(15) voluntary emancipation of a minor; and
(16) changes of name. (326a)
Art. 409. In cases of legal separation, adoption,
naturalization and other judicial orders mentioned in
the preceding article, it shall be the duty of the clerk
of the court which issued the decree to ascertain
whether the same has been registered, and if this
has not been done, to send a copy of said decree to
the civil registry of the city or municipality where the
court is functioning. (n)
Art. 410. The books making up the civil register and
all documents relating thereto shall be considered
public documents and shall be prima facie evidence
of the facts therein contained. (n)
Art. 411. Every civil registrar shall be civilly
responsible for any unauthorized alteration made in
any civil register, to any person suffering damage
thereby. However, the civil registrar may exempt
himself from such liability if he proves that he has
taken every reasonable precaution to prevent the
unlawful alteration. (n)
Art. 412. No entry in a civil register shall be
changed or corrected, without a judicial order. (n)
NOTE: The law does not allow dropping of middle
name from registered name unless there are
justifiable reasons to do so. Mere convenience is
not justifiable. Middle name serves to identify the
maternal lineage of filiation of a person as well as
further distinguish him from others who may have
the same given name and surname as he has.
An illegitimate child whose filiation is not recognized
by the father bears only a given name and his
mother’s name, and he does ot have a middle
name, unless legitimated or subsequently
recognized by the father.
A child can use the surname of the mother instead
of the father if there are clear justifiable reasons to
do so such as to avoid confusion (In Re Petition for
Change of Name, Petitioner Julian Lin (Carulasan)
Wang, GR No. 159966, March 30, 2005).
Note: clerical and typographical errors may be
corrected without judicial order under RA 9048.
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____________________________________________________________________________________________________
See Rule 108 of the Rules of Court and RA 9048
found in Remedial Law Reviewer. (they are
included in the coverage).
Change of Name; Under RA 9048 (2006)
Zirxthoussous delos Santos filed a petition for
change of name with the Office of the Civil
Registrar of Mandaluyong City under the
administrative proceeding provided in
Republic Act No. 9048. He alleged that his first
name sounds ridiculous and is extremely
difficult to spell and pronounce. After
complying with the requirements of the law,
the Civil Registrar granted his petition and
changed his first name Zirxthoussous to
"Jesus." His full name now reads "Jesus delos
Santos."
Jesus delos Santos moved to General Santos
City to work in a multi-national company.
There, he fell in love and married Mary Grace
delos Santos. She requested him to have his
first name changed because his new name
"Jesus delos Santos" is the same name as that
of her father who abandoned her family and
became a notorious drug lord. She wanted to
forget him. Hence, Jesus filed another petition
with the Office of the Local Civil Registrar to
change his first name to "Roberto." He claimed
that the change is warranted because it will
eradicate all vestiges of the infamy of Mary
Grace's father.
Will the petition for change of name of Jesus
delos Santos to Roberto delos Santos under
Republic Act No. 9048 prosper? Explain. (10%)
SUGGESTED ANSWER: No, under the law,
Jesus may only change his name once. In
addition, the petition for change of name may
be denied on the following grounds:
(1) Jesus is neither ridiculous, nor tainted
with dishonor nor extremely difficult to write
or pronounce.
(2) There is no confusion to be avoided or
created with the use of the registered first
name or nickname of the petitioner.
(3) The petition involves the same entry in
the same docu¬ment, which was previously
corrected or changed under this Order [Rules
and Regulations Implementing RA 9048].
What entries in the Civil Registry may be
changed or corrected without a judicial order?
(2.5%)
SUGGESTED ANSWER: Only clerical or
typographical errors and first or nick names
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
may be changed or corrected without a judicial
order under RA 9048.
Clerical or typographical errors refer to
mistakes committed in the performance of
clerical work in writing, copying, transcribing
or typing an entry in the civil register. The
mistake is harmless and innocuous, such as
errors in spelling, visible to the eyes or obvious
to the understanding.His and can be corrected
or changed only by reference to other existing
records. Provided, however, that no correction
must involve the change of nationality, age,
status or sex of the petitioner.
Correction of Entries; Clerical Error Act
(2008) No. IV. Gianna was born to Andy and
Aimee, who at the time Gianna's birth were
not married to each other. While Andy was
single at the time, Aimee was still in the
process of securing a judicial declaration of
nullity on her marriage to her ex-husband.
Gianna's birth certificate, which was signed by
both Andy and Aimee, registered the status of
Gianna as "legitimate", her surname carrying
that of Andy's and that her parents were
married to each other. (A). Can a judicial
action for correction of entries in Gianna's
birth certificate be successfully maintained to:
a). Change her status from "legitimate" to
"illegitimate" (1%); and b). Change her
surname from that of Andy's to Aimee's
maiden surname? (1%) SUGGESTED
ANSWER:
Yes, a judicial action for correction of
entries in Gianna's birth certificate can be
successfully maintained to change (a) her
status from "legitimate" to "illegitimate,"
and (b) her surname from that of Andy's to
Aimee's maiden surname in accordance
with Rule 108 of the Rules of Court because
said changes are substantive corrections.
(B). Instead of a judicial action, can administrative
proceedings be brought for the purpose of making
the above corrections? (2%) SUGGESTED
ANSWER: No. An administrative proceeding
cannot be brought for the purpose of making
the above corrections. R.A. 9048, otherwise
known as the Clerical Error Act, which
authorizes the city or municipal civil registrar or
the consul general to correct a clerical or
typographical error in an entry and/or change
the first name or nickname in the civil register
without need of a judicial order. Errors that
involve the change of nationality, age, status,
surname or sex of petitioner are not included
from the coverage of the said Act (Silverio v.
Republic, G.R. No. 174689, 22 Oct., 2007).
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Note:Change of birthday, month is now allowed PROPERTY
in LCR. An object or a right which is appropriated or
susceptible of appropriation by man, with the
Art. 413. All other matters pertaining to the capacity to satisfy human wants.
registration of civil status shall be governed by
special laws. (n) CLASSIFICATION OF PROPERTY

1. Mobility and non-mobility—

USURPATION OF NAME a. Immovable or real property;
Elements: b. Movable or personal property;
1. There is an actual use of another’s name
by the defendant; 2. Ownership—
2. The use is unauthorized; a. Public dominion;
3. The use of another’s name is to designate b. Private dominion;
personality or to identify a person.
3. Alienability—
a. Within the commerce of men;
REMEDIES OF A PERSON WHOSE NAME HAS b. Outside the commerce of men.
BEEN USURPED:
1. Civil (in so far as private persons are 4. Existence—
concerned) a. Present property;
a. Injunction; b. Future property;
b. Damages (actual and moral).
5. Materiality or immateriality—
2. Criminal (when public affairs are a. Tangible or corporeal;
prejudiced). b. Intangible or incorporeal.

WHEN USE OF ANOTHER’S NAME NOT 6. Dependence or importance—

ACTIONALBLE: a. Principal;
When it is used as stage, screen, or pen name, b. Accessory.
provided—
1. Use of name is in good faith; 7. Capability of substitution—
2. No injury is caused to the person’s (owner a. Fungible—capable of substitution
of the name used) right; by other things of the same
3. When use is motivated by modesty, a quantity and quality;
desire to avoid unnecessary trouble, or b. Non-fungible—not capable of
other reason not prohibited by law or substitution, hence, the identical
morals. thing must be given or returned.

8. Nature or definiteness—
a. Generic—one referring to a group

THE LAW ON
or class;
b. Specific—one referring to a single,
unique object.

PROPERTY 9. Whether it is in custody of the court—

a. In custodial egis;
b. Free property.

CHARACTERISTICS:
BOOK II
1. Utility for the satisfaction of moral or
economic wants;
PROPERTY, OWNERSHIP, AND ITS 2. Susceptibility of appropriation;
MODIFICATIONS 3. Individuality or substantivity, that is it can
exist by itself and not merely as part of a
Title I. - CLASSIFICATION OF PROPERTY whole.

PRELIMINARY PROVISIONS
Art. 414. All things which are or may be the object
of appropriation are considered either:
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 119
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(1) Immovable or real property; or
(2) Movable or personal property. (333)
CHAPTER 1
IMMOVABLE PROPERTY
Art. 415. The following are immovable property:
(1) Land, buildings, roads and constructions
of all kinds adhered to the soil;
(2) Trees, plants, and growing fruits, while
they are attached to the land or form an
integral part of an immovable;
(3) Everything attached to an immovable in
a fixed manner, in such a way that it cannot
be separated therefrom without breaking
the material or deterioration of the object;
(4) Statues, reliefs, paintings or other
objects for use or ornamentation, placed in
buildings or on lands by the owner of the
immovable in such a manner that it reveals
the intention to attach them permanently to
the tenements;
(5) Machinery, receptacles, instruments or
implements intended by the owner of the
tenement for an industry or works which
may be carried on in a building or on a
piece of land, and which tend directly to
meet the needs of the said industry or
works;
(6) Animal houses, pigeon-houses,
beehives, fish ponds or breeding places of
similar nature, in case their owner has
placed them or preserves them with the
intention to have them permanently
attached to the land, and forming a
permanent part of it; the animals in these
places are included;
(7) Fertilizer actually used on a piece of
land;
(8) Mines, quarries, and slag dumps, while
the matter thereof forms part of the bed,
and waters either running or stagnant;
(9) Docks and structures which, though
floating, are intended by their nature and
object to remain at a fixed place on a river,
lake, or coast;
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(10) Contracts for public works, and
servitudes and other real rights over
immovable property. (334a)
JURIDICAL CLASSIFICATION OF IMMOVABLE
PROPERTIES:
1. By nature—cannot be removed from place
to place because of their nature—
a. Buildings and all kinds of
constructions adhered to the soil;
b. Mine, quarries.
 A house is classified as immovable
property by reason of its adherence to the
soil on which it is built. This classification
holds true regardless of the fact that the
house may be situated on land belonging to
another. But once the house is demolished,
it ceases to exist as such and hence its
character as an immovable likewise ceases
(Bicera vs. Teneza, 6 SCRA 649, [1962]).
2. By incorporation—essentially movables
but attached to an immovable that it
becomes an integral part of it—
a. Trees, plants and growing fruits
adhered to the soil;
b. Everything attached to an
immovable in a fixed manner that it
will break if separated;
c. Statues, paintings if intended by
the owner to be integral part of
immovable and placed only by
owner or his agent;
d. Animal houses if intended by owner
to become permanently attached to
immovable.
3. By destination—movables but purpose is
to partake of an integral part of an
immovable—
a. Machinery placed by owner of the
tenement or his agent and tends
directly to meet the needs of such
work or industry.
i. Industry or works must be
carried on inside the
building or on the land
(thus a transportation
business is not carried on
in a building or in the
compound.
ii. Placed by the owner of the
building or property.
iii. Machines must be
essential and principal
elements in the industry.
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Property; Real vs. Personal Property (1997)
b. Fertilizers actually used; Pedro is the registered owner of a parcel of land situated
c. Docks or floating structures in Malolos, Bulacan. In 1973, he mortgaged the land to
the Philippine National Bank (PNB) to secure a loan of
P100.000.00. For Pedro's failure to pay the loan, the PNB
Machinery which is movable in it nature only foreclosed on the mortgage in 1980, and the land was
becomes immobilized when placed in a plant by sold at public auction to PNB for being the highest bidder.
the owner of the property (or persons acting as PNB secured title thereto in 1987.
an agent of the owner); But not when so placed In the meanwhile, Pedro, who was still in possession of
by a tenant, a usufructuary or any person the land, constructed a warehouse on the property. In
having only temporary right, unless such person 1988, the PNB sold the land to Pablo, the Deed of Sale
acted as agent of the owner (Davao Sawmill vs. was amended in 1989 to include the warehouse.
Castillo, 61 Phil. 709, [1935]). Pedro, claiming ownership of the warehouse, files a
complaint to annul the amended Deed of Sale before the
Regional Trial Court of Quezon City, where he resides,
Vessels are essentially movable but they against both the PNB and Pablo. The PNB filed a motion
partake to a certain extent of the nature and to dismiss the complaint for improper venue contending
conditions of real property due to their value that the warehouse is real property under Article 415(1) of
and importance (Rubiso vs. Rivera, 37 Phil. 72, the Civil Code and therefore the action should have
[1917]). instead been filed in Malolos, Bulacan. Pedro claims
otherwise. The question arose as to whether the
4. By analogy—contracts for public works, warehouse should be considered as real or as personal
servitude and other real rights over property.
immovable property.
If consulted, what would your legal advice be?
latter vacate the premises and deliver the same to the
SUGGESTED ANSWER:
Property; Real vs. Personal Property (1995)
The warehouse which is a construction adhered to the
warehouse where he processes and stores his timber for
soil is an immovable by nature under Art. 415 (1) and the
shipment. Adjoining the warehouse is a furniture factory
proper venue of any case to recover ownership of the
owned by NARRAMIX of which Salvador is a majority
same, which is what the purpose of the complaint to
stockholder. NARRAMIX leased space in the warehouse
annul the amended Deed of Sale amounts to, should be
where it placed its furniture-making machinery.
the place where the property is located, or the RTC of
Bulacan.
1. How would you classify the furniture-making machinery
ADDITIONAL ANSWERS:
as property under the Civil Code? Explain.
1. Buildings are always immovable property, and even in
the instances where the parties to a contract seem to
2. Suppose the lease contract between Salvador and
have dealt with it separate and apart from the land on
NARRAMIX stipulates that at the end of the lease the
which it stood in no wise does it change its character as
machinery shall become the property of the lessor, will
immovable property. A building is an immovable even if
your answer be the same? Explain.
not erected by the owner of the land. The only criterion is
union or incorporation with the soil. (Ladera vs. Hodges
SUGGESTED ANSWER:
(CA) 48
1. The furniture-making machinery is movable property
O.G. 4374) (Reyes and Puno, Outline of Philippine Civil
because it was not installed by the owner of the
Law, Vol. 2. p.7)
tenement. To become immovable under Art. 415 (5) of
2. The warehouse built by Pedro on the mortgaged
the NCC, the machinery must be installed by the owner of
property is real property within the context of Article 415
the tenement.
of the New Civil Code, although it was built by Pedro after
ALTERNATIVE ANSWER:
the foreclosure sale without the knowledge and consent
It depends on the circumstances of the case. If the
of the new owner which makes him a builder in bad faith,
machinery was attached in a fixed manner, in such a way
this does not alter the character of the warehouse as a
that it cannot be separated from the tenement without
real property by incorporation. It is a structure which
breaking the material or causing deterioration thereof, it is
cannot be removed without causing injury to the land. So,
immovable property [Art. 415 (3), NCC]. However, if the
my advice to Pedro is to file the case with the RTC of
machinery can be transported from place to place without
Bulacan, the situs of the property,
impairment of the tenement to which they were fixed,
(Note: If the examinee does not mention that the structure
then it is movable property. [Art. 416 (4), NCC]
was built by a builder in bad faith, it should be given full
SUGGESTED ANSWER:
credit).
2. It is immovable property. When there is a provision in
the lease contract making the lessor, at the end of the
lease, owner of the machinery installed by the lessee, the
said machinery is considered to have been installed by
Property; Movable or Immovable (2007)
the lessor through the lessee who acted merely as his No.II. Manila Petroleum Co. owned and
agent. Having been installed by the owner of the operated a petroleum operation facility off the
tenement, the machinery became immovable .under Art. coast of Manila. The facility was located on a
415 of the NCC. (Davao Sawmill v. Castillo 61 Phil. 709) floating platform made of wood and metal,
upon which was permanently attached the
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 121
____________________________________________________________________________________________________
heavy equipment for the petroleum operations
and living quarters of the crew. The floating
platform likewise contained a garden area,
where trees, plants and flowers were planted.
The platform was tethered to a ship, the MV
101, which was anchored to the seabed. Please
briefly give the reason for your answers. (10%)
(A).Is the platform movable or immovable
property? SUGGESTED ANSWER:
The platform is an immovable property
under Art. 415 (9) NCC, which provides that
"docks and structures which, though
floating, are intended by their nature and
object to remain at a fixed place on a river,
lake or coast." Since the floating platform
is a petroleum operation facility, it is
intended to remain permanently where it is
situated, even if it is tethered to a ship
which is anchored to the seabed.
ALTERNATIVE ANSWER: The platform is a
movable property because it is attached to
a movable property, i.e. the vessel which
was merely anchored to the seabed. The
fact that the vessel is merely anchored to
the sea bed only shows that it is not
intended to remain at a fixed place; hence,
it remains a movable property. If the
intention was to make the platform stay
permanent where it was moored, it would
not have been simply tethered to a vessel
but itself anchored to the seabed. (B). Are
the equipment and living quarters movable or
immovable property? SUGGESTED ANSWER:
The thing and living quarters of the crew
are immovable property under Art. 415 (3)
NCC, classifies as an immovable
"everything attached to an immovable in a
fixed manner, in such a way that it cannot
be separated therefrom without breaking
the material or deterioration of the object."
Both the equipment and the living quarters
are permanently attached to the platform
which is also an immovable. The equipment
can also be classified as an immovable
property under Art. 415 (5) NCC because
such equipment are "machinery,
receptacles, instruments or implements
intended by the owner of the tenement for
an industry or works which may be carried
on in a building or on a piece of land and
which tend directly to meet the needs of
the industry or works." It is logically
assumed that the petroleum industry may
be carried on in a building or on a piece of
land and the platform is analogous to a
building. ALTERNATIVE ANSWER: The
equipment and living quarters of the crew
are movable properties since they are
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
attached to a platform which is also a
movable property, because it is simply
attached to a vessel is likewise a movable
property since it was merely anchored on
the seabed only shows that it is not
intended to remain at a fixed place; hence,
it remains a movable property. (C). Are the
trees, plants and flowers immovable or
movable property? SUGGESTED ANSWER:
The trees, plants and flowers planted in the
garden area of the platform are immovable
property under Art. 415 (2) NCC which
classifies as an immovable property "trees,
plants and growing fruits, while they are
attached to the land or form an integral
part of an immovable, the petroleum
operation facility. ALTERNATIVE ANSWER:
The trees, plants and flowers planted in the
garden area of the platform are movable
property because they are not permanently
attached t the land and do not form an
integral part of an immovable. The platform
is not an immovable property for the same
reason already given in the Alternative
Answer to Item (a) above.
CHAPTER 2
MOVABLE PROPERTY
Art. 416. The following things are deemed to be
personal property:
(1) Those movables susceptible of
appropriation which are not included in the
preceding article;
(2) Real property which by any special
provision of law is considered as personal
property;
(3) Forces of nature which are brought
under control by science; and
(4) In general, all things which can be
transported from place to place without
impairment of the real property to which
they are fixed. (335a)
Art. 417. The following are also considered as
personal property:
(1) Obligations and actions which have for
their object movables or demandable sums;
and
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(2) Shares of stock of agricultural,
commercial and industrial entities, although
they may have real estate. (336a)
TESTS TO DETERMINE WHETER THE
PROPERTY IS REAL OR PERSONAL:
1. Rule of Exclusion—not included in art 415;
2. Rule of Description—if the property can be
transported from one place to another, and
no injury would be suffered by it, then it is
personal property.
3. Test of Destruction.
Art. 418. Movable property is either consumable or
non-consumable. To the first class belong those
movables which cannot be used in a manner
appropriate to their nature without their being
consumed; to the second class belong all the
others. (337)
In relation to chattel mortgage, growing crops are
movable property (Sibal vs. Valdez, 50 Phil. 512,
[1927]).
Electricity is a personal property that can be a
subject of theft (US vs. Carlos, 21 Phil. 364,
[1946]).
½ interest in the business is personal property
(Strochechker vs. Ramirez, 44 Phil. 933, [1922]).
CHAPTER 3
PROPERTY IN RELATION TO THE PERSON TO
WHOM IT BELONGS
Art. 419. Property is either of public dominion or of
private ownership. (338)
Art. 420. The following things are property of public
dominion:
(1) Those intended for public use, such as
roads, canals, rivers, torrents, ports and
bridges constructed by the State, banks,
shores, roadsteads, and others of similar
character;
(2) Those which belong to the State,
without being for public use, and are
intended for some public service or for the
development of the national wealth. (339a)
2012 Bar Exam Question
43. The following things are property of public
dominion, except: a) ports and bridges
constructed by the State. b) vehicles and
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
weapons of the Armed Forces of the
Philippines. c) rivers. d) lands reclaimed by the
state from the sea. SUGGESTED ANSWER:
This question should be disregarded because
there is no correct answer.
(Note: At first glance, one gets the impression
that vehicles and weapons of the AFP are not
property of the public domain. But they are
actually property of the public dominion under
the second paragraph of Art 420 of the NCC.
Property of the state which are not for public
use but are intended for some public service are
properties of the public dominion. While the
vehicles and weapons of the AFP are not for
public use, they are used for the defense of the
State which is a public service.)
Art. 421. All other property of the State, which is not
of the character stated in the preceding article, is
patrimonial property. (340a)
Art. 422. Property of public dominion, when no
longer intended for public use or for public service,
shall form part of the patrimonial property of the
State. (341a)
NOTE: There must be a formal declaration of the
executive or legislative departments of the
government. Without the declaration, the property
continues to form part of public domain and
therefore cannot be the subject of acquisitive
prescription.
Art. 423. The property of provinces, cities, and
municipalities is divided into property for public use
and patrimonial property. (343)
Art. 424. Property for public use, in the provinces,
cities, and municipalities, consist of the provincial
roads, city streets, municipal streets, the squares,
fountains, public waters, promenades, and public
works for public service paid for by said provinces,
cities, or municipalities.
All other property possessed by any of them is
patrimonial and shall be governed by this Code,
without prejudice to the provisions of special laws.
(344a)
Public streets and thoroughfares cannot be
leased or licensed to market stallholders by
virtue of a city ordinance or resolution. The right
of the public to use the city streets may not be
bargained away through contract (Dacanay vs.
Asitio Jr., 208 SCRA 404, [1992]).
Art. 425. Property of private ownership, besides the
patrimonial property of the State, provinces, cities,
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and municipalities, consists of all property
belonging to private persons, either individually or
collectively. (345a)
CLASSIFICATION OF PROPERTY ACCORDING
TO OWNERSHIP:
1. Public Dominion—outside the commerce
of man.
KINDS—
a. Intended for public purpose;
b. Intended for public service of state,
provinces, cities and municipalities
CHARACTERISTICS:
i. Outside the commerce of
men—cannot be alienated
or leased or be subject of
any contract;
ii. Cannot be acquired by
private individual through
prescription;
iii. Not subject to attachment
and execution;
iv. Cannot be burdened by
voluntary easement;
v. Cannot be registered under
the Land Registration Law
and be the subject of a
Torrens Title;
vi. In general, can be used by
everybody.
c. For the development of national
wealth.
2. Private ownership
a. Patrimonial property of the state,
provinces, cities and
municipalities—
i. Exist for attaining economic
ends of state;
ii. Property of public dominion
when no longer intended
for public use/service –
declared patrimonial.
NOTE: Patrimonial
properties may be acquired
by private individuals or
corporations through
prescription.
b. Property belonging to private
persons, individually or collectively.
NOTE; Sacred and religious objects are considered
outside the commerce of man. They are neither
public nor private property.
2012 Bar Exam Question
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
44. Which of the following statements is
wrong? a) patrimonial property of the state,
when no longer intended for public use or
for public service, shall become property of
public dominion. b) all property of the State,
which is not of public dominion, is patrimonial
property. c) The property of provinces, cities
and municipalities is divided into property for
public use and patrimonial property. d)
Property is either of public dominion or of
private ownership.
PROVISIONS COMMON TO THE THREE
PRECEDING CHAPTERS
Art. 426. Whenever by provision of the law, or an
individual declaration, the expression "immovable
things or property," or "movable things or property,"
is used, it shall be deemed to include, respectively,
the things enumerated in Chapter 1 and Chapter 2.
Whenever the word "muebles," or "furniture," is
used alone, it shall not be deemed to include
money, credits, commercial securities, stocks and
bonds, jewelry, scientific or artistic collections,
books, medals, arms, clothing, horses or carriages
and their accessories, grains, liquids and
merchandise, or other things which do not have as
their principal object the furnishing or ornamenting
of a building, except where from the context of the
law, or the individual declaration, the contrary
clearly appears. (346a)
Title II. - OWNERSHIP
CHAPTER 1
OWNERSHIP IN GENERAL
OWNERSHIP
Is the independent and general right of a person to
control a thing particularly in his possession,
enjoyment, disposition, and recovery, subject to no
restrictions except those imposed by the state or
private persons, without prejudice to the provisions
of the law.
TITLE is that which constitutes a just cause of
exclusive possession of which is the foundation of
ownership of property.
KINDS OF OWNERSHIP:
1. Full ownership (dominium or jus in re
propia)—includes all the rights of the
owner;
2. Naked ownership (nuda proprietas)—
where the right to the use and the fruits has
been denied.
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 Naked ownership + usufruct = Full
ownership.
3. Sole ownership—ownership is vested in
only one person;
4. Co-ownership/tenancy in common—
ownership is vested in two or more owners;
unity of the property, plurality of the
subjects.
Art. 427. Ownership may be exercised over things
or rights. (n)
Art. 428. The owner has the right to enjoy and
dispose of a thing, without other limitations than
those established by law.
The owner has also a right of action against the
holder and possessor of the thing in order to
recover it. (348a)
SEVEN RIGHTS (ATTRIBUTES) OF
OWNERSHIP:
1. Jus abutendi—right to consume, transform
or abuse;
2. Jus accessiones—right to accessories;
3. Jus disponendi—right to dispose;
4. Jus fruendi—right to fruits;
5. Jus possidendi—right to possess;
6. Jus utendi—right to use or enjoy;
7. Jus vindicandi—right to exclude others from
possession (or to recovery).
Art. 429. The owner or lawful possessor of a thing
has the right to exclude any person from the
enjoyment and disposal thereof. For this purpose,
he may use such force as may be reasonably
necessary to repel or prevent an actual or
threatened unlawful physical invasion or usurpation
of his property. (n)
Note: This article should be connected with art. 11
(1) of the RPC.
PRINCIPLE OF SELF-HELP (self-defense)
 Available only when possession has not yet
been lost—resort to judicial process is
necessary if possession was already lost.
 May be exercised by 3rd person—
negotiorum gestio.
ELEMENTS OF SELF-HELP:
1. Persons exercising right is the owner or
lawful possessor;
2. Can only be exercised at the time of an
actual or threatened unlawful physical
invasion of his property.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
 Aggression must unlawful or illicit;
 The existence of the danger of
violation of law and right is
sufficient.
3. Use of force as may be reasonably
necessary to repel or prevent it.
 Possessor may do all acts
necessary to repel the aggression.
 But he may be held liable for
damages for excessive force.
Art. 430. Every owner may enclose or fence his
land or tenements by means of walls, ditches, live
or dead hedges, or by any other means without
detriment to servitudes constituted thereon. (388)
Art. 431. The owner of a thing cannot make use
thereof in such manner as to injure the rights of a
third person. (n)
Ratio: “Sic utere tu ut alienum non laedas”
2011 Bar Exam
(83) The owner of a thing cannot use it in a
way that will injure the right of a third person.
Thus, every building or land is subject to the
easement which prohibits its proprietor or
possessor from committing nuisance like
noise, jarring, offensive odor, and smoke. This
principle is known as (A) Jus vindicandi. (B)
Sic utere tuo ut alienum non laedas. (C) Jus
dispondendi. (D) Jus abutendi.
Art. 432. The owner of a thing has no right to
prohibit the interference of another with the same, if
the interference is necessary to avert an imminent
danger and the threatened damage, compared to
the damage arising to the owner from the
interference, is much greater. The owner may
demand from the person benefited indemnity for the
damage to him. (n)
NOTE: This article must be connected to art. 11 (4)
of the RPC. [Avoidance of Greater Evil or Injury].
LIMITATIONS OF THE RIGHT OF OWNERSHIP:
1. Those imposed by law or ordinances
(servitudes and easements);
2. Those imposed by the owner (voluntary
servitudes, mortgages, pledges);
3. Those impose by private persons
transmitting ownership (will or contract);
4. Those impose by the state (police power,
eminent domain, taxation);
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5. Inherent limitations arising from conflicts
with other similar rights (contiguity of
property);
6. “sic utere” rule;
7. Acts in state of necessity;
8. Cannot take the law into his/her own hands.
Art. 433. Actual possession under claim of
ownership raises disputable presumption of
ownership. The true owner must resort to judicial
process for the recovery of the property. (n)
Art. 434. In an action to recover, the property must
be identified, and the plaintiff must rely on the
strength of his title and not on the weakness of the
defendant's claim. (n)
Notes:
 Possessor of the property has the
presumption of title in his favor.
The person claiming better right must prove:
1. That he has better title to the property;
2. Identity of the property;
3. Strength of his title.
ACTIONS FOR POSSESSION:
1. Movable—
 Repliven (Rule 60, ROC).
 See Remedial Law Reviewer.
2. Immovable—
a. Accion interdictal (Rule 70)—
i. Forcible entry (detentacion);
ii. Unlawful detainer.
b. Accion publiciana—plenary action to
recover the better right of possession;
must be brought within a period of 10
years, otherwise the real right of
possession is lost. Issue is possession
de jure not de facto; ordinary civil
proceeding.
c. Accion reinvindicatoria—recovery of
dominion of property as owner
Ejectment Suit vs. Cancellation of Title (2005)
In an ejectment case filed by Don against Cesar, can the
latter ask for the cancellation of Don's title considering
that he (Cesar) is the rightful owner of the lot? Explain.
(2%)
SUGGESTED ANSWER:
Cesar cannot ask for the cancellation of Don's title even if
he is the rightful owner of the lot. In an action for
ejectment, the only issue involved is one of possession
de facto, the purpose of which is merely to protect the
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
owner from any physical encroachment from without. The
title of the land or its ownership is not involved, for if a
person is in actual possession thereof, he is entitled to be
maintained and respected in it even against the owner
himself. (Garcia v. Anas, G.R. No. L-20617, May 31,
1965) Since the case filed by Don against Cesar is an
ejectment case, the latter cannot ask for the cancellation
of Don's title. He has to file the proper action where the
issue of ownership over the property can be raised.
2012 Bar Exam Question
40. A plenary action for the recovery of the
possession of real estate, upon mere allegation
and proof of a better right thereto, and without
allegation of proof of title. This action can only
be brought after the expiration of one (1) year.
What action is being referred to? a) Accion
publiciana b) Accion reinvindicatoria c) Accion
interdictal d) Quieting of Title
2012 Bar Exam Question
41. Action to recover real property based on
ownership. Here, the object is the recovery of
the dominion over the property as owner.
What action is being referred to? a) Accion
publiciana
b) Accion reinvindicatoria c) Accion
interdictal d) Quieting of Title
2012 Bar Exam Question
42. A summary action to recover physical or
material possession only and must be brought
within one (1) year from the time the cause of
action arises. What action is being referred to?
a) Accion publiciana b) Accion reinvindicatoria
c) Accion interdictal d) Quieting of Title
Ejectment Suit; Commodatum (2006)
Alberto and Janine migrated to the United States of
America, leaving behind their 4 children, one of whom is
Manny. They own a duplex apartment and allowed
Manny to live in one of the units. While in the United
States, Alberto died. His widow and all his children
executed an Extrajudicial Settlement of Alberto's estate
wherein the 2¬door apartment was assigned by all the
children to their mother, Janine. Subsequently, she sold
the property to George. The latter required Manny to sign
a prepared Lease Contract so that he and his family
could continue occupying the unit. Manny refused to sign
the contract alleging that his parents allowed him and his
family to continue occupying the premises.
If you were George's counsel, what legal steps will you
take? Explain. (5%)
SUGGESTED ANSWER:
If I were George's counsel, I would first demand that
Manny vacate the apartment. If Manny refuses, I will file
an ejectment suit. When Manny was allowed by his
parents to occupy the premises, without compensation,
the contract of commodatum was created. Upon the
death of the father, the contract was extinguished as it is
a purely personal contract. As the new owner of the
126
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apartment George is entitled to exercise his right of
possession over the same.
Art. 435. No person shall be deprived of his
property except by competent authority and for
public use and always upon payment of just
compensation.
Should this requirement be not first complied with,
the courts shall protect and, in a proper case,
restore the owner in his possession. (349a)
Note: This article is a limitation on the right of
the state to expropriate private properties.
For extensive discussion, refer to Political Law
Reviewer and Remedial Law Reviewer (Rule
67).
Art. 436. When any property is condemned or
seized by competent authority in the interest of
health, safety or security, the owner thereof shall
not be entitled to compensation, unless he can
show that such condemnation or seizure is
unjustified. (n)
Note: this article is another limitation of the right
of ownership wherein the property may be
interfered with, even destroyed, if so demanded
by the welfare of the community.
For more extensive discussion on the police
power of the state, please refer to Political Law
Reviewer.
Art. 437. The owner of a parcel of land is the owner
of its surface and of everything under it, and he can
construct thereon any works or make any
plantations and excavations which he may deem
proper, without detriment to servitudes and subject
to special laws and ordinances. He cannot complain
of the reasonable requirements of aerial navigation.
(350a)
Note: right to surface and everything under it only
as far as necessary for his practical interest
(benefit or enjoyment).
However, if there happens to be mineral deposits
found under a parcel of land owned by a private
person, it will be the state that owns such mineral
deposits. Waters also found underneath private
lands also belongs to the state (Water Code).
Art. 438. Hidden treasure belongs to the owner of
the land, building, or other property on which it is
found.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Nevertheless, when the discovery is made on the
property of another, or of the State or any of its
subdivisions, and by chance, one-half thereof shall
be allowed to the finder. If the finder is a trespasser,
he shall not be entitled to any share of the treasure.
If the things found be of interest to science of the
arts, the State may acquire them at their just price,
which shall be divided in conformity with the rule
stated. (351a)
NOTES:
 Usufructuary is considered a stranger.
 Chance” does not mean sheer luck. It includes
intentional act of looking for the hidden treasure
with the use of gadgets.
 If there is agreement regarding the sharing, the
agreement may be followed.
 If the finder is merely employed to dig or find
the treasure, he is not entitled to a share BUT is
entitled to his wages.
Hidden Treasure (1995)
Tim came into possession of an old map showing where
a purported cache of gold bullion was hidden. Without
any authority from the government Tim conducted a
relentless search and finally found the treasure buried in
a new river bed formerly part of a parcel of land owned by
spouses Tirso and Tessie. The old river which used to cut
through the land of spouses Ursula and Urbito changed
its course through natural causes. To whom shall the
treasure belong? Explain.
SUGGESTED ANSWER:
The treasure was found in a property of public dominion,
the new river bed. Since Tim did not have authority from
the government and, therefore, was a trespasser, he is
not entitled to the one-half share allotted to a finder of
hidden treasure. All of it will go to the State. In addition,
under Art. 438 of the NCC in order that the finder be
entitled to the 1/2 share, the treasure must be found by
chance, that is by sheer luck. In this case, since Tim
found the treasure not by chance but because he
relentlessly searched for it, he is not entitled to any share
in the hidden treasure.
ALTERNATIVE ANSWER:
The law grants a one-half share to a finder of hidden
treasure provided he is not a trespasser and the finding is
by chance. It is submitted that Tim is not a trespasser
despite his not getting authority from the government,
because the new river bed where he found the treasure is
property for public use (Art. 420 NCC), to which the public
has legitimate access. The question, therefore, boils
down to whether or not the finding was by chance in view
of the fact that Tim "conducted a relentless search"
before finding the treasure. The strict or literal view holds
that deliberate or intentional search precludes entitlement
to the one-half
chance" means "by accident", meaning an unexpected
discovery. The liberal view, however, would sustain Tim's
right to the allocated share interpreting the phrase in
question as meaning "by a stroke of good fortune", which
does not rule out deliberate or intentional search. It is
submitted that the liberal view should prevail since in
practical reality, hidden treasure is hardly ever found
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without conscious effort to find it, and the strict view
would tend to render the codal provision in question
illusory.
2010 Bar Exam
(B) O, owner of Lot A, learning that Japanese
soldiers may have buried gold and other
treasures at the adjoining vacant Lot B
belonging to spouses X & Y, excavated in Lot B
where she succeeded in unearthing gold and
precious stones. How will the treasures found
by O be divided? (1%) (1). 100% to O as finder
(2). 50% to O and 50% to the spouses X and Y
(3). 50% to O and 50% to the state (4). None of
the above. SUGGESTED ANSWER: No. 4.
None of the above.
The general rule is that the treasure shall
belong to the spouses X and Y, the owner of
Lot B. Under Article 438 (NCC), the
exception is that when the discovery of a
hidden treasure is made on the property of
another and by chance, one-half thereof
shall belong to the owner of the land and
the other one-half is allowed to the finder.
In the problem, the finding of the treasure
was not by chance because O knew that the
treasure was in Lot B. While a trespasser is
also not entitled to any share, and there is
no indication in the problem whether or
not O was a trespasser, O is not entitled to
a share because the finding was not “by
chance.”
Hidden Treasures (1997)
Marcelino, a treasure hunter as just a hobby, has found a
map which appears to indicate the location of hidden
treasure. He has an idea of the land where the treasure
might possibly be found. Upon inquiry, Marcelino learns
that the owner of the land, Leopoldo, is a permanent
resident of Canada, Nobody, however, could give him
Leopoldo's exact address. Ultimately, anyway, he enters
the land and conducts a search. He succeeds.
Leopoldo learning of Marcelino's "find", seeks to recover
the treasure from Marcelino but the latter is not willing to
part with it. Failing to reach an agreement, Leopoldo sues
Marcelino for the recovery of the property. Marcelino
contests the action. How would you decide the case?
SUGGESTED ANSWER:
I would decide in favor of Marcelino since he is
considered a finder by chance of the hidden treasure,
hence, he is entitled to one-half (1/2) of the hidden
treasure. While Marcelino may have had the intention to
look for the hidden treasure, still he is a finder by chance
since it is enough that he tried to look for it. By chance in
the law does not mean sheer luck such that the finder
should have no intention at all to look for the treasure. By
chance means good luck, implying that one who
intentionally looks for the treasure is embraced in the
provision. The reason is that it is extremely difficult to find
hidden treasure without looking for it deliberately.
Marcelino is not a trespasser since there is no prohibition
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
for him to enter the premises, hence, he is entitled to half
of the treasure.
ALTERNATIVE ANSWERS:
1. Marcelino did not find the treasure by chance because
he had a map, he knew the location of the hidden
treasure and he intentionally looked for the treasure,
hence, he is not entitled to any part of the treasure.
2. Marcelino appears to be a trespasser and although
there may be a question of whether he found it by chance
or not, as he has found the hidden treasure by means of
a treasure map, he will not be entitled to a finder's share.
The hidden treasure shall belong to the owner.
3. The main rule is that hidden treasure belongs to the
owner of the land, building or other property on which it is
found. If it is found by chance by a third person and he is
not a trespasser, he is entitled to one-half (1/2). If he is a
trespasser, he loses everything.
Art. 439. By treasure is understood, for legal
purposes, any hidden and unknown deposit of
money, jewelry, or other precious objects, the lawful
ownership of which does not appear. (352)
Hidden Treasure (2008) No. VIII. Adam, a
building contractor, was engaged by Blas to
construct a house on a lot which he (Blas)
owns. While digging on the lot in order to lay
down the foudation of the house, Adam hit a
very hard object. It turned out to be the vault
of the old Banco de las Islas Filipinas. Using a
detonation device, Adam was able to open the
vault containing old notes and coins which
were in circulation during the Spanish era.
While the notes and coins are no longer legal
tender, they were valued at P100 million
because of their historical value and the coins
silver nickel content. The following filed legal
claims over the notes and coins: (i). Adam, as
finder; (ii). Blas, as owner of the property
where they were found; (iii). Bank of the
Philippine Islands, as successor-in-interest of
the owner of the vault; and (iv). The Philippine
Government because of their historical value.
(A). Who owns the notes and coins? (4%)
SUGGESTED ANSWER: The notes and coins
are no longer owned by the Bank of the
Philippine Islands, which has either lost or
abandoned the vault and its contents, and
it has not taken any effort to search, locate
or recover the vault. In any case, since the
vault is in actual possession of Adam, BPI
may attempt, in a judicial action to
recover, to rebut the presumption of
ownership in favor of Adam and Blas (Art.
433, Civil Code). Hidden treasure is any
hidden and unknown deposit of money,
jewelry, or other precious objects, the
lawful ownership of which does not appear.
Given the age and importance of the items
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found, it would be safe to consider the
vault, notes and coins abandoned by BPI
and its predecessor (Art. 439, Civil Code). It
belongs to the owner of the land on which
it is found. When the discovery is made on
the property of another, or of the State and
by chance, one-half of it shall belong to the
finder who is not a trespasser (Art. 438,
Civil Code). In the present case, Adam, as
finder, and Blas, as owner of the land, are
entitled to share 50-50 in the treasure. The
government can only claim if it can
establish that the notes and coins are of
interest to science or the arts, then it must
pay just price of the things found, to be
divided equally between Adam and Blas
(Art. 438, Civil Code). (B). Assuming that
either or both Adam and Blas are adjudged as
owners, will the notes and coins be deemed
part of their absolute community or conjugal
partnership of gains with their respective
spouses? (2%) SUGGESTED ANSWER: If
either or both Adam and Blas are adjudged
as owners, the notes and coins shall be
deemed part of their absolute community
or conjugal partnership of gains with their
respective spouses (Art. 117, par 4, FC).
CHAPTER 3
RIGHT OF ACCESSION
GENERAL PROVISIONS
Art. 440. The ownership of property gives the right
by accession to everything which is produced
thereby, or which is incorporated or attached
thereto, either naturally or artificially. (353)
SECTION 1. - Right of Accession with Respect
to
What is Produced by Property
Art. 441. To the owner belongs:
(1) The natural fruits;
(2) The industrial fruits;
(3) The civil fruits. (354)
Art. 442. Natural fruits are the spontaneous
products of the soil, and the young and other
products of animals.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Industrial fruits are those produced by lands of any
kind through cultivation or labor.
Civil fruits are the rents of buildings, the price of
leases of lands and other property and the amount
of perpetual or life annuities or other similar income.
(355a)
2 KINDS OF ACCESSION
1. Accession discreta—refers to the fruits or
products of a thing which is owned.
2. Accession continual—accession to the
products of the thing; union of thing by
different owners.
ACCESSION DISCRETA
General Rule: The owner of the land owns the
fruits.
Exceptions:
1. Possessor in good faith of the land, he
owns the fruits already received;
2. Usufructuary;
3. Lessee gets the fruits of the land;
4. The antichretic creditor gets the fruits,
although, said fruits should be applied first
to the interest, if any, then to the principal
amount of the loan.
ACCESSION CONTINUA
Principles:
1. Accessory follows the principal;
 See art. 120 FC, it may be said that it is
an exception to the rule that accessory
follows the principal.
2. The incorporation or union must be so
intimate that the things united cannot be
separated without injury to one or both of
them;
3. Good faith is not punished but bad faith
gives rise to dire consequences;
4. Generally based on necessity and utility. It
being practical that the owner of the
principal thing should own the new thing
instead of a co-ownership being
established.
MAXIMS IN CONNECTION WITH ACCESSION
INDUSTRIAL
a. Accessorium non ducit sed sequitor
suum principali. The accessory does not
lead but follows the principal.
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b. Accessorium sequitor naturam rei cui the absence of proof to the contrary, is that the calf,
accredit. The accessory follows the nature as well as its mother belong to the owner of the
of that to which it relates. latter, by right of accretion (US vs. Caballero, 25
Phil. 356).
c. Aedificatum solo, solo cedit. What is built
upon the land goes with it; or the land is the
principal, and whatever is built on it
becomes the accessory. SECTION 2. - Right of Accession with Respect
to Immovable Property
Art. 443. He who receives the fruits has the
obligation to pay the expenses made by a third
person in their production, gathering, and Art. 445. Whatever is built, planted or sown on the
preservation. (356) land of another and the improvements or repairs
made thereon, belong to the owner of the land,
subject to the provisions of the following articles.
OBLIGATIONS: (358)
1. Gathered fruits.
Planter Owner Art. 446. All works, sowing, and planting are
No necessity to presumed made by the owner and at his expense,
Planter in Keeps fruits reimburse the unless the contrary is proved. (359)
GF planter for
expenses since Art. 447. The owner of the land who makes thereon,
he retains the personally or through another, plantings,
fruits constructions or works with the materials of
Reimbursed of Gets fruits, pay another, shall pay their value; and, if he acted in
Planter in expenses for planter expenses bad faith, he shall also be obliged to the reparation
BF production, of damages. The owner of the materials shall have
gathering, and the right to remove them only in case he can do so
preservation without injury to the work constructed, or without the
plantings, constructions or works being destroyed.
2. Standing Crops However, if the landowner acted in bad faith, the
Planter Owner owner of the materials may remove them in any
Reimbursed for Owns the fruits event, with a right to be indemnified for damages.
expenses for provided he (360a)
Planter in GF production, pays the
gathering and planter Art. 448. The owner of the land on which anything
preservation expenses for has been built, sown or planted in good faith, shall
production, have the right to appropriate as his own the works,
gathering and sowing or planting, after payment of the indemnity
preservation provided for in Articles 546 and 548, or to oblige the
Loses one who built or planted to pay the price of the land,
Planter in BF everything. No Own fruits and the one who sowed, the proper rent. However,
right to the builder or planter cannot be obliged to buy the
reimbursement land if its value is considerably more than that of the
building or trees. In such case, he shall pay
reasonable rent, if the owner of the land does not
Art. 444. Only such as are manifest or born are choose to appropriate the building or trees after
considered as natural or industrial fruits. proper indemnity. The parties shall agree upon the
terms of the lease and in case of disagreement, the
With respect to animals, it is sufficient that they are court shall fix the terms thereof. (361a)
in the womb of the mother, although unborn. (357)
Note: Since the choice given to the LO is
Note: The owner of the female animal is also the confined to either appropriation or compulsory
owner of the offspring even though the male (father) selling, he has no right of removal or demolition,
belongs to different owner. Under the Partidas, the UNLESS after having selected compulsory sale,
owner of the female was considered also as the the builder fails to pay the price of the land.
owner of the young, unless there is a contrary
custom or speculation. The legal presumption, in

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The land owner has the choice of either
appropriating the building or selling his land to the
builder; he cannot refuse to exercise both
(Sarmiento vs. Agana, 129 SCRA 122, [1984]).
Owner of the land on which improvement was built
by another in good faith is entitled to removal of the
improvement ONLY AFTER land owner has opted
to sell the land and the builder refused to pay the
same. If the value of the land is considerably higher
than the value of the improvement, the builder
cannot be compelled to buy the land. A forced lease
is created (Depra vs. Dumlao, 136 SCRA 475,
[1985]).
The right to choose between the appropriating the
improvement or selling the land on which the
improvement of the builder, planter or sower stands
is given to the owner of the land [not the court]
(Ballatan vs. CA, 304 SCRA 34, [1999]).
REMEDIES IF OPTION EXERCISED WAS
COMPULSORY SELLING, BUT BUILDER
FAILS TO PAY.
1. Leave things as they are and assume
relation of lessor and lessee; pay rents;
2. Demolish what has been built, sown, or
planted;
3. Consider the price of the land as an
ordinary money debt of the builder.
Therefore he may enforce payment thru
and ordinary action for the recovery of a
money debt.
Art. 448 (3rd person plants, sows, and builds on
another’s land) does not apply when:
1. The builder, planter, sower does not claim
ownership over the land but possesses it
as a mere holder, agent, usufructuary or
tenant; he knows that the land is not his.
Exception: if a tenant whose lease is about
to expire, nevertheless still sows, not
knowing that the crops will no longer belong
to him.
2. The builder, planter, or sower is a co-
owner, even if later on, during the partition,
the portion of land used is awarded to
another co-owner.
3. A person who constructs a building on his
own land, and then sells the land but not
the building to another, there can be no
question of good faith on the part of the
builder. He can be compelled to remove the
building. The new owner will thus not be
required to pay any indemnity for the
building;
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
4. The builder is a belligerent occupant.
Rule when the landowner sells land to a 3 rd
person who is in bad faith:
When 3rd person is in bad faith, the builder must go
against him, but when the 3rd person paid the
landowner, the builder may still file a case against
him but the 3rd person may file a 3rd party complaint
against the landowner.
 The value of the improvement is
determined as of the time of payment.
Ratio: To avoid unjust enrichment.
 For purposes of art. 448, a lessee cannot
be a builder in good faith.
Builder; Good Faith; Requisites (2013)
No.VIII. Ciriaco Realty Corporation (CRC) sold
to the spouses Del a Cruz a500-square meter
land (Lot A) in Paranaque. The land now has a
fair market value of Pl,200,000. CRC likewise
sold to the spouses Rodriguez, a 700-square
meter land (Lot B) which is adjacent to Lot A.
Lot B has a present fair market value of
P1,500,000. The spouses Dela Cruz
constructed a house on Lot B, relying on their
presentation of the CRC sales agent that it is
the property they purchased. Only upon the
completion of their house did the spouses Dela
Cruz discovered that they had built on Lot B
owned by the spouses Rodriguez, not on Lot A
that they purchased. They spent P 1 000,000
for the house.
As their lawyer, advise the spouses Dela Cruz
on their rights and obligations under the given
circumstances, and the recourses and options
open to them to protect their interests. (8%)
SUGGESTED ANSWER: Based on the fact as
stated, the spouses Dela Cruz as builders
and the spouses Rodriguez as land owners,
are both in good faith. The spouses Dela
Cruz are builder in good faith because
before constructing the house they
exercised due diligence by asking the Agent
of CRC the location of the lot A, and they
relied on the information given by the
agent who is presumed to know the
identity of the lot purchased by the Dela
Cruz spouses (Pleasantville v. CA, 253
SCRA 10, 1996). On the other hand, there
is no showing that the land owners, spouse
Rodriguez acted in bad faith. The facts do
not show that the building was done with
their knowledge and without opposition on
their part (Art 453, Civil Code). The good
faith is always presumed (Art. 527, Civil
Code). The owner of the land on which
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anything has been built, sown, or planted in
good faith shall have the right: (1) to
appropriate as his own the works after
payment of the indemnity provided for in
Art 546 and 548, or (2) to oblige the one
who built to pay the price of the land.
However, the builder cannot be obliged to
buy the land if its value is considerable
more than that of the building.. In such
case, he shall pay reasonable rent of the
owner of the land does not choose to
appropriate the building or trees after
proper indemnity (Art 448, Civil Code). The
house constructed by the spouses Dela
Cruz is considered as a useful expense,
since it increased the value of the lot. As
such, should the spouses Rodriguez decides
to appropriate the house, the spouses Dela
Cruz are entitled to the right of retention
pending reimbursement of the expenses
they incurred or the increase in value
which the thing may have acquired by
reason of the improvement (Art 546, Civil
Code). Thus, the spouses Dela Cruz may
demand P1,000,000.00 as payment of the
expenses in building the house or increase
in value of the land because of the house as
a useful improvement, as may be
determined by the court form the evidence
presented during the trial (Depra v.
Dumlao, 136 SCRA 475, 1985; Technogas
Phils v. CA, 268 SCRA 5, 1997).
Builder; Good Faith (1992)
A owns a parcel of residential land worth P500,000.00
unknown to A, a residential house costing P 100,000.00
is built on the entire parcel by B who claims ownership of
the land. Answer all the following questions based on the
premise that B is a builder in good faith and A is a
landowner in good faith. a) May A acquire the house built
by B? If so, how? b) If the land increased in value to
P500,000.00 by reason
of the building of the house thereon, what amount should
be paid by A in order to acquire the house from B?
c) Assuming that the cost of the house was
P90,000.00 and not P100,000.00, may A require B to buy
the land?
d) If B voluntarily buys the land as desired by A,
under what circumstances may A nevertheless be entitled
to have the house removed?
e) In what situation may a "forced lease" arise
between A and B. and what terms and conditions would
govern the lease?
Give reasons for your answers.
SUGGESTED ANSWER:
(a) Yes, A may acquire the house build by B by paying
indemnity to B. Article 448 of the Civil Code provides that
the owner of the land on which anything has been built,
sown or planted in good faith, shall have the right to
appropriate as his own the works, sowing or planting,
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
after payment of the indemnity provided for in Articles 546
and 546 of the Civil Code.
(b) A should pay B the sum of P50,000. Article 548 of the
Civil Code provides that useful expenses shall be
refunded to the possessor in good faith with the right of
retention, the person who has defeated him in the
possession having the option of refunding the amount of
the expenses or of paying the increase in value which the
thing may have acquired by reason thereof. The increase
in value amounts to P50,000.00.
(c) Yes, A may require B to buy the land. Article 448 of
the Civil Code provides that the owner of the land on
which anything has been built in good faith shall have the
right to oblige the one who built to pay the price of the
land if its value is not considerably more than that of the
building,
(d) If B agrees to buy land but fails to pay, A can have the
house removed ( Depra vs. Dumlao, 136 SCRA 475).
(e) Article 448 of the Civil Code provides that the builder
cannot be obliged to buy the land if its value is
considerably more than that of the building. In such case,
he shall pay
appropriate the building after proper indemnity. The
parties shall agree upon the terms of the lease and in
case of disagreement, the court fix the terms thereof.
Builder; Good Faith vs. Bad Faith (1999)
(a) Because of confusion as to the boundaries of the
adjoining lots that they bought from the same subdivision
company, X constructed a house on the adjoining lot of Y
in the honest belief that it is the land that he bought from
the subdivision company. What are the respective rights
of X and Y with respect to X's house? (3%)
(b) Suppose X was in good faith but Y knew that X was
constructing on his (Y's) land but simply kept quiet about
it, thinking perhaps that he could get X's house later.
What are the respective rights of the parties over X's
house in this case? (2%)
SUGGESTED ANSWER:
(a) The rights of Y, as owner of the lot, and of X, as
builder of a house thereon, are governed by Art. 448 of
the Civil Code which grants to Y the right to choose
between two remedies: (a) appropriate the house by
indemnifying X for its value plus whatever necessary
expenses the latter may have incurred for the
preservation of the land, or (b) compel X to buy the land if
the price of the land is not considerably more than the
value of the house. If it is, then X cannot be obliged to
buy the land but he shall pay reasonable rent, and in
case of disagreement, the court shall fix the terms of the
lease.
SUGGESTED ANSWER:
(b) Since the lot owner Y is deemed to be in bad faith (Art
453), X as the party in good faith may (a) remove the
house and demand indemnification for damages suffered
by him, or (b) demand payment of the value of the house
plus reparation for damages (Art 447, in relation to Art
454). Y continues as owner of the lot and becomes,
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under the second option, owner of the house as well,
after he pays the sums demanded.
Builder; Good Faith vs. Bad Faith; Presumption
(2001)
Mike built a house on his lot in Pasay City. Two years
later, a survey disclosed that a portion of the building
actually stood on the neighboring land of Jose, to the
extent of 40 because he should know the boundaries of
his lot, and demands that the portion of the house which
encroached on his land should be destroyed or removed.
Mike replies that he is a builder in good faith and offers to
buy the land occupied by the building instead. 1) Is Mike
a builder in good faith or bad faith? Why? (3%) 2) Whose
preference should be followed? Why? (2%)
SUGGESTED ANSWER:
1) Yes, Mike is a builder in good faith. There is no
showing that when he built his house, he knew that a
portion thereof encroached on Jose's lot. Unless one is
versed in the science of surveying, he cannot determine
the precise boundaries or location of his property by
merely examining his title. In the absence of contrary
proof, the law presumes that the encroachment was done
in good faith [Technogas Phils, v. CA, 268 SCRA 5, 15
(1997)].
2} None of the preferences shall be followed. The
preference of Mike cannot prevail because under Article
448 of the Civil Code, it is the owner of the land who has
the option or choice, not the builder. On the other hand,
the option belongs to Jose, he cannot demand that the
portion of the house encroaching on his land be
destroyed or removed because this is not one of the
options given by law to the owner of the land. The owner
may choose between the appropriation of what was built
after payment of indemnity, or to compel the builder to
pay for the land if the value of the land is not considerably
more than that of the building. Otherwise, the builder shall
pay rent for the portion of the land encroached.
ALTERNATIVE ANSWER:
1) Mike cannot be considered a builder in good faith
because he built his house without first determining the
corners and boundaries of his lot to make sure that his
construction was within the perimeter of his property. He
could have done this with the help of a geodetic engineer
as an ordinary prudent and reasonable man would do
under the circumstances.
2) Jose's preference should be followed. He may have
the building removed at the expense of Mike, appropriate
the building as his own, oblige Mike to buy the land and
ask for damages in addition to any of the three options.
(Articles 449, 450, 451, CC)
Art. 449. He who builds, plants or sows in bad faith
on the land of another, loses what is built, planted
or sown without right to indemnity. (362)
 Connected to arts. 443 and 546
Builder; Good Faith vs. Bad Faith (2000)
In good faith, Pedro constructed a five-door commercial
building on the land of Pablo who was also in good faith.
When Pablo discovered the construction, he opted to
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
appropriate the building by paying Pedro the cost thereof.
However, Pedro insists that he should be paid the current
market value of the building, which was much higher
because of inflation. 1) Who is correct Pedro or
Pablo?(1%) 2) In the meantime that Pedro is not yet paid,
who is entitled to the rentals of the building, Pedro or
Pablo? (1%)
SUGGESTED ANSWER:
Pablo is correct. Under Article 448 of the New Civil Code
in relation to Article 546, the builder in good faith is
entitled to a refund of the necessary and useful expenses
incurred by him, or the increase in value which the land
may have acquired by reason of the improvement, at the
option of the landowner. The builder is entitled to a refund
of the expenses he incurred, and not to the market value
of the improvement
The case of Pecson v. CA, 244 SCRA 407, is not
applicable to
square meters. Jose claims that Mike is a builder in bad
faith
the problem. In the Pecson case, the builder was the
owner of the land who later lost the property at a public
sale due to non-payment of taxes. The Court ruled that
Article 448 does not apply to the case where the owner of
the land is the builder but who later lost the land; not
being applicable, the indemnity that should be paid to the
buyer must be the fair market value of the building and
not just the cost of construction thereof. The Court opined
in that case that to do otherwise would unjustly enrich the
new owner of the land.
ALTERNATIVE ANSWER:
Pedro is correct. In Pecson vs. CA, it was held that Article
546 of the New Civil Code does not specifically state how
the value of useful improvements should be determined
in fixing the amount of indemnity that the owner of the
land should pay to the builder in good faith. Since the
objective of the law is to adjust the rights of the parties in
such manner as "to administer complete justice to both of
them in such a way as neither one nor the other may
enrich himself of that which does not belong to him", the
Court ruled that the basis of reimbursement should be the
fair market value of the building.
SUGGESTED ANSWER:
2) Pablo is entitled to the rentals of the building. As the
owner of the land, Pablo is also the owner of the building
being an accession thereto. However, Pedro who is
entitled to retain the building is also entitled to retain the
rentals. He, however, shall apply the rentals to the
indemnity payable to him after deducting reasonable cost
of repair and maintenance.
ALTERNATIVE ANSWER:
Pablo is entitled to the rentals. Pedro became a
possessor in bad faith from the time he learned that the
land belongs to Pablo. As such, he loses his right to the
building, including the fruits thereof, except the right of
retention.
2012 Bar Exam Question
37. Which of the following statements is
wrong? a) The possessor in bad faith shall
reimburse the fruits received and those which
the legitimate possessor could have received.
b) The possessor in bad faith has right of
reimbursement for necessary expenses and
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those for the production, gathering and
preservation of the fruits. c) The possessor in
bad faith is not entitled to a refund of
ornamental expenses. d) The possessor in
bad faith is entitled to a refund of useful
expenses.
2012 Bar Exam Question
38. Which phrase most accurately completes
the statement – The expenses incurred in
improvements for the luxury or mere pleasure
shall not be refunded to thew possessor in bad
faith: a) but he may remove the objects for
which such expenses have been incurred,
provided that the thing suffers no injury
thereby, and that the lawful possessor does
not prefer to retain them.b) and he may not
remove the objects for which such expenses
have been incurred. c) and he may not remove
the objects for which such expenses have been
incurred, unless he pays the value they may
have at the time he entered into possession. d)
but he may remove the objects for which such
expenses have been incurred.
Builder; Good Faith vs. Bad Faith; Accession (2000)
a) Demetrio knew that a piece of land bordering the
beach belonged to Ernesto. However, since the latter was
studying in Europe and no one was taking care of the
land, Demetrio occupied the same and constructed
thereon nipa sheds with tables and benches which he
rented out to people who want to have a picnic by the
beach. When Ernesto returned, he demanded the return
of the land. Demetrio agreed to do so after he has
removed the nipa sheds. Ernesto refused to let Demetrio
remove the nipa sheds on the ground that these already
belonged to him by right of accession. Who is correct?
(3%)
SUGGESTED ANSWER:
Ernesto is correct, Demetrio is a builder in bad faith
because he knew beforehand that the land belonged to
Ernesto, under Article 449 of the New Civil Code, one
who builds on the land of another loses what is built
without right to indemnity. Ernesto becomes the owner of
the nipa sheds by right of accession. Hence, Ernesto is
well within his right in refusing to allow the removal of the
nipa sheds.
Art. 450. The owner of the land on which anything
has been built, planted or sown in bad faith may
demand the demolition of the work, or that the
planting or sowing be removed, in order to replace
things in their former condition at the expense of the
person who built, planted or sowed; or he may
compel the builder or planter to pay the price of the
land, and the sower the proper rent. (363a)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Ownership; Co-Ownership (2008) No. VI.
Alex died without a will, leaving only an
undeveloped and untitled lot in Tagiug City.
He is survived by his wife and 4 children. His
wife told the children that she is waiving her
share in the property, and allowed Bobby, the
eldest son who was about to get married, to
construct his house on ¼ of the lot, without
however obtaining the consent of his siblings.
After settlement of Alex's estate and partition
among the heirs, it was discovered that
Bobby's house was constructed on the portion
allocated to his sister, Cathy asked Bobby to
demolish his house and vacate the portion
alloted to her. In leiu of demolition, Bobby
offered to purchase from Cathy the lot portion
on which his house was constructed. At that
time, the house constructed was valued at
P350.000.
(A). Can Cathy lawfully ask for demolition of
Bobby's house? (3%) SUGGESTED ANSWER:
Yes, Cathy can lawfully ask for the
demolition of Bobby's house. Where there
are two or more heirs, the whole estate of
the decedent, is, before partition, owned in
common by such heirs, subject to the
payment of debts of the deceased (Art.
1078, Civil Code), Under the rules on co-
ownership, "none of the co-owners shall,
without the consent of the others make
alterations in the thing owned in common,
even though benefits for all would results
therefrom." In Cruz v. Catapang, G.R. No.
164110, 12 Feb., 2008, the Court held that
"alterations include any act of strict
dominion or ownership such as
construction of a house." In the present
case, of Alex is the real owner of the
undeveloped and untitled lot in Taguig, co-
ownership is created among his wife and
four children over said property upon his
death. Since the construction of the house
by Bobby was done without obtaining the
consent of his siblings, the alteration
effected is illegal. Bobby is considered to be
in bad faith and as a sanction for his
conduct, he can be compelled by Cathy to
demolish or remove the structure at his
own expense.
(B). Can Bobby legally insist on purchasing the
land? (2%)
SUGGESTED ANSWER: No. Bobby cannot
legally insist on purchasing the land. Being
in bad faith, he has no option to pay for the
price of the lot (Art. 450, Civil Code).
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Art. 451. In the cases of the two preceding articles, if both in Exception: 2. Entitled to
the landowner is entitled to damages from the GF) When they can removal
builder, planter or sower. (n) be removed (provided no
without substantial injury
Art. 452. The builder, planter or sower in bad faith is destruction to is caused)
entitled to reimbursement for the necessary the work made
expenses of preservation of the land. (n) or to the plants.
In such case,
 Connect to art. 546. the owner of
the material
can remove
Art. 453. If there was bad faith, not only on the part them.
of the person who built, planted or sowed on the LO = BF He becomes Entitled to the
land of another, but also on the part of the owner of OM = GF the owner of absolute right of
such land, the rights of one and the other shall be the materials removal and
the same as though both had acted in good faith. but he must damages
pay: (whether or not
It is understood that there is bad faith on the part of 1. Their value; substantial injury
the landowner whenever the act was done with his and would be
knowledge and without opposition on his part. 2. Damages. caused).
(354a)
Exception:
Art. 454. When the landowner acted in bad faith when the
and the builder, planter or sower proceeded in good owner of the
faith, the provisions of article 447 shall apply. (n) materials
decides to
Art. 455. If the materials, plants or seeds belong to remove them
a third person who has not acted in bad faith, the whether or not
owner of the land shall answer subsidiarily for their destruction
value and only in the event that the one who made would be
use of them has no property with which to pay. caused. In this
case, the
materials would
This provision shall not apply if the owner makes
still belong to
use of the right granted by article 450. If the owner
of the materials, plants or seeds has been paid by the owner of
the materials
the builder, planter or sower, the latter may demand
who in addition
from the landowner the value of the materials and
labor. (365a) will still be
entitled to
damages
Art. 456. In the cases regulated in the preceding
articles, good faith does not necessarily exclude LO =GF 1. Exempted Will lose all rights
negligence, which gives right to damages under OM = BF from to the material,
article 2176. (n) reimbursement; such as the right
2. Entitled to of removal,
consequential regardless of
damages. whether or not
RULES WHEN THE LANDOWNER substantial injury
CONTSRUCTS OR PLANTS ON HIS LAND WITH would be caused.
MATERIALS OF ANOTHER
2. Rules when on land of a person another
1. LO and OM are both in good faith; or LO and builds, sows or plants
OM both in bad faith Land Owner Builder (B)
Land Owner Owner of (LO)
(LO) Materials (OM) LO = GF Choice either— 1. Right to
OM = GF Becomes the 1. Entitled to B = GF; a. Appropriate payment of
LO = GF; owner of the reimbursement or as his own indemnity—
Or material but he (provided he LO =BF after paying a. Necessary
OM = BF must pay for does not remove B = BF for indemnity; expenses,
LO = BF (as their value. them).
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 135
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(both as if b. Or to compel right of the value of
in GF) the builder to retention the land is
buy the land until considerabley
upon which reimbursed; ore that the
the building is b. May value of the
built. removed the building; and
ornaments damages
Exception: if the with which LO = BF He becomes the 1. Entitled to the
value of the land he has B = GF owner of the absolute right
is considerably embellished materials but of removal
more than the the principal must pay their and damages
value of the thing if it value plus (substantial
building. suffers no damages. injury is
In such a case, injury, and if Exception: When immaterial);
the builder shall his the owner of the
pay reasonable successor in material decides 2. Entitled to
rent. They shall the to remove them reimburseme
agree upon the possession whether or not nt and
terms of the does not destruction would damages (in
lease. In case of prefer to be caused. In this cases he
disagreement, refund the case, the chooses not
court shall fix the amount materials would to remove)
terms. expended still belong to the
No right of owner of said
retention, LO materials, who in
entitled for addition, will still
removal of be entitled to
improvement damages
LO = GF 1. Gets the 1. Loses what is
B = BF accessory built, planted, Art. 457. To the owners of lands adjoining the
without paying or sown banks of rivers belong the accretion which they
any indemnity without right to gradually receive from the effects of the current of
for its value or indemnity; the waters. (336)
expenses (but 2. Liability for
with obligation damages;
NOTE: The riparian owner owns the accretion as
to pay 3. Entitled to
an exchange of the risk that his land is subjected to
necessary necessary
by reason of the action of the river.
expenses for expenses of
the preservation of
The natural action of the river causing loss
preservation of land
of the land is considered as “Natural
the land); and
Expropriation”.
damages
2. Demand the
demolition of NOTE: This process of natural action of the river
the work, or causing loss to other’s estate does not violate the
that the indefeasibility of titile issued under Torrens Title.
planting or Reason: Natural Expropriation. (Viajar vs. CA, 168
sowing be SCRA 405, [1988]).
removed, at
the builder’s Accretion; Alluvium (2001)
expense; and For many years, the Rio Grande river deposited soil
damages along its bank, beside the titled land of Jose. In time,
such deposit reached an area of one thousand square
3. Compel the meters. With the permission of Jose, Vicente cultivated
builder or the said area. Ten years later, a big flood occurred in the
planter to pay river and transferred the 1000 square meters to the
the price of the opposite bank, beside the land of Agustin. The land
land, and the transferred is now contested by Jose and Agustin as
sower the riparian owners and by Vicente who claims ownership by
proper rent prescription. Who should prevail,? Why? (5%)
whether or not SUGGESTED ANSWER:

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Jose should prevail. The disputed area, which is an
alluvion, belongs by right of accretion to Jose, the riparian
owner (Art. 457 CC). When, as given in the problem, the
very same area" was "transferred" by flood waters to the
opposite bank, it became an avulsion and ownership
thereof is retained by Jose who has two years to remove
it (Art. 459, CC). Vicente's claim based on prescription is
baseless since his possession was by mere tolerance of
Jose and, therefore, did not adversely affect Jose's
possession and ownership (Art. 537, CC). Inasmuch as
his possession is merely that of a holder, he cannot
acquire the disputed area by prescription.
Art. 458. The owners of estates adjoining ponds or
lagoons do not acquire the land left dry by the
natural decrease of the waters, or lose that
inundated by them in extraordinary floods. (367)
Art. 459. Whenever the current of a river, creek or
torrent segregates from an estate on its bank a
known portion of land and transfers it to another
estate, the owner of the land to which the
segregated portion belonged retains the ownership
of it, provided that he removes the same within two
years. (368a)
ALLUVIUM
Is the soil imperceptively and gradually deposited
on lands adjoining the banks of rivers caused by the
current of the water.
Requisites:
1. Result of the action of the waters of the
river;
2. Deposit of soil or sediment is gradual and
imperceptible;
3. The land where the accretion takes place is
adjacent to the banks of river;
4. Must be due to the natural action of the
river.
Registration under the Torrens System does not
protect the riparian owner against the diminution of
the area of his registered land through changes in
the course of an adjoining stream (Viajar vs. CA,
168 SCRA 405, [1988]).
ACCETION IS NOT COVERED BY THE
TORRENS TITLE
Failure to register the acquired alluvial deposit by
accretion for 50 years subjected said accretion
through prescription by 3rd persons. There is NO
Automatic Registration (Reynante vs. CA, 207
SCRA 794, [1992]).
The rules on alluvium do not apply to man-made or
artificial accretions to lands that adjoin canals or
esteros or artificial drainage system (Ronquillo vs.
CA, 195 SCRA 433, [1991])
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Accretion; Alluvium (2008)
No. IX. The properties of Jessica and Jenny,
who are neighbors, lie along the banks of the
Marikina River. At certain times of the year,
the river would swell and as the water recedes,
soil, rocks and other materials are deposited
on Jessica's and Jenny's properties. This
pattern of the river swelling, receding and
depositing soil and other materials being
deposited on the neighbors' properties have
gone on for many years. Knowing his pattern,
Jessica constructed a concrete barrier about 2
meters from her property line and extending
towards the river, so that when the water
recedes, soil and other materials are trapped
within this barrier. After several years, the
area between Jessica's property line to the
concrete barrier was completely filled with soil,
effectively increasing Jessica's property by 2
meters. Jenny's property, where no barrier
was constructed, also increased by one meter
along the side of the river. (A). Can Jessica and
Jenny legally claim ownership over the
additional 2 meters and one meter,
respectively, of land deposited along their
properties?(2%) SUGGESTED ANSWER:
Only Jenny can claim ownership over the
additional one meter of land deposited
along her property. Art. 457 of the Civil
Code provides that "to the owners of lands
adjoining the banks of river belong the
accretion which they gradually receive
from the effects of the current of the
water." Where the land is not formed solely
by the natural effect of the water current of
the river bordering land but is also the
consequences of the direct and deliberate
intervention of man, it is man-made
accretion and a part of the public domain
(Tiongco v. Director of Lands, 16 C.A. Rep
211, cited in Nazareno v. C.A., G.R. No.
98045, 26 June 1996). Thus, Jessica
cannot legally claim ownership of the
additional 2 meters of land along her
property because she constructed a
concrete barrier about 2 meters from her
property causing deposits of soil and other
materials when the water recedes. In other
words, the increase in her property was not
caused by nature but was man-made.
(B). If Jessica's and Jenny's properties are
registered, will the benefit of such registration
extend to the increased area of their
properties? (2%) SUGGESTED ANSWER:
If the properties of Jessica and Jenny are
registered, the benefit of such registration
does not extend to the increased area of
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their properties. Accretion does not
automatically become registered land
because there is a specific technical
description of the lot in its Torrens title.
There must be a separate application for
registration of the alluvial deposits under
the Torrens System (Grande v. CA, G.R. No.
L-17652, 30 June, 1962).
(C). Assume the two properties are on a cliff
adjoining the shore of Laguna Lake. Jessica
and Jenny had a hotel built on the properties.
They had the erath and rocks excavated from
the properties dumped on the adjoining shore,
giving rise to a new patch of dry land. Can
they validly lay claim to the patch of land?
(2%) SUGGESTED ANSWER: No. Jessica and
Jenny cannot validly lay claim to the patch
of land because in order to acquire land by
accretion, there should be a natural and
actual continuity of the accretion to the
land of the riparian owner caused by
natural ebb and flow of the current of the
river (Delgado v. Samonte, CA-G.R. No.
34979-R, 10 Aug 1966).
Accretion; Rights of the Riparian Owner
(2009)
No.XVI. Marciano is the owner of a parcel of
land through which a river runs out into the
sea. The land had been brought under the
Torrens System, and is cultivated by Ulpiano
and his family as farmworkers therein. Over
the years, the river has brought silt and
sediment from its sources up in the mountains
and forests so that gradually the land owned
by Marciano increased in area by three
hectares. Ulpiano built three huts on this
additional area, where he and his two married
children live. On this same area, Ulpiano and
his family planted peanuts, monggo beans and
vegetables. Ulpiano also regularly paid taxes
on the land, as shown by tax declarations, for
over thirty years. When Marciano learned of
the increase in the size of the land, he ordered
Ulpiano to demolish the huts, and demanded
that he be paid his share in the proceeds of
the harvest. Marciano claims that under the
Civil Code, the alluvium belongs to him as a
registered riparian owner to whose land the
accretion attaches, and that his right is
enforceable against the whole world. (A). Is
Marciano correct? Explain. (3%) SUGGESTED
ANSWER:
Marciano’s contention is correct. Since
that accretion was deposited on his land by
the action of the waters of the river and he
did not construct any structure to increase
the deposition of soil and silt, Marciano
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
automatically owns the accretion. His real
right of ownership is enforceable against
the whole world including Ulpiano and his
two married children. Although Marciano’s
land is registered, the three (3) hectares
land deposited through accretion was not
automatically registered. As an
unregistered land, it is subject to
acquisitive prescription by third persons.
Although Ulpiano and his children live in
the three (3) hectare unregistered land
owned by Marciano, they are farm workers;
therefore, they are possessors not in the
concept of owners but in the concept of
mere holders. Even if they possess the land
for more than 30 years, they cannot
become the owners thereof through
extraordinary acquisitive prescription,
because the law requires possession in the
concept of the owner. Payment of taxes and
tax declaration are not enough to make
their possession one in the concept of
owner. They must repudiate the possession
in the concept of holder by executing
unequivocal acts of repudiation amounting
to ouster of Marciano, known to Marciano
and must be proven by clear and
convincing evidence. Only then would his
possession become adverse. (B). What rights,
if any, does Ulpiano have against Marciano?
Explain. (3%) SUGGESTED ANSWER:
Although Ulpiano is a possessor in bad
faith, because he knew he does not own the
land, he will lose the three huts he built in
bad faith and make an accounting of the
fruits he has gathered, he has the right to
deduct from the value of the fruits the
expenses for production, gathering and
preservation of the fruits (Art 443, NCC).
He may also ask for reimbursement of the
taxes he has paid, as these are charges on
the land owned by Marciano. This
obligation is based on a quasi-contract (Art
2175, NCC).
AVULSION
Is the process whereby a portion of a land is
segregated from an estate by the current of a river,
creek or torrent and transferred to another estate.
Requisites:
1. The segregation and transfer must be
caused by the current of a river, creek or
torrent;
2. Sudden or abrupt;
3. Portion of land must be identifiable.
Note: Removal is not necessarily physical removal.
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Accretion; Avulsion (2003)
Andres is a riparian owner of a parcel of registered land.
His land, however, has gradually diminished in area due
to the current of the river, while the registered land of
Mario on the opposite bank has gradually increased in
area by 200¬square meters.
(a) Who has the better right over the 200-square meter
area that has been added to Mario’s registered land,
Mario or Andres?
(b) May a third person acquire said 200-square meter
land by prescription?
SUGGESTED ANSWER:
a. Mario has a better right over the 200 square meters
increase in area by reason of accretion, applying Article
457 of the New Civil Code, which provides that “to the
owners of lands adjoining the banks of rivers belong the
accretion which they gradually received from the effects
of the current of the waters”.
Andres cannot claim that the increase in Mario’s land is
his own, because such is an accretion and not result of
the sudden detachment of a known portion of his land
and its attachment to Mario’s land, a process called
“avulsion”. He can no longer claim ownership of the
portion of his registered land which was gradually and
naturally eroded due to the current of the river, because
he had lost it by operation of law. That portion of the land
has reasonable rent, if the owner of the land does not
choose to become part of the public domain.
SUGGESTED ANSWER:
b. Yes, a third party may acquire by prescription the 200
square meters, increase in area, because it is not
included in the Torrens Title of the riparian owner. Hence,
this does not involve the imprescriptibility conferred by
Section 47, P.D. No. 1529. The fact that the riparian land
is registered does not automatically make the accretion
thereto a registered land. (Grande v. CA, 115 521 (1962);
Jagualing v. CA, 194 SCRA 607 (1991).
Art. 460. Trees uprooted and carried away by the
current of the waters belong to the owner of the
land upon which they may be cast, if the owners do
not claim them within six months. If such owners
claim them, they shall pay the expenses incurred in
gathering them or putting them in a safe place.
(369a)
Art. 461. River beds which are abandoned through
the natural change in the course of the waters ipso
facto belong to the owners whose lands are
occupied by the new course in proportion to the
area lost. However, the owners of the lands
adjoining the old bed shall have the right to acquire
the same by paying the value thereof, which value
shall not exceed the value of the area occupied by
the new bed. (370a)
CHANGE OF RIVERBED
Requisites:
1. Change must be sudden in order that the
old riverbed may be identifiable;
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
2. The changing of the course must be more
or less permanent, and not temporary over-
flooding another’s land;
3. The change must be natural one (caused
by natural forces);
4. There must be a definite abandonment by
the government;
5. The river must continue to exist, that is, it
must not completely dry up or disappear.
Art. 462. Whenever a river, changing its course by
natural causes, opens a new bed through a private
estate, this bed shall become of public dominion.
(372a)
 The new river banks created will likewise be
public dominion.
 The new riverbed may itself be abandoned,
due to natural or artificial causes authorized
by law. In such case, the owners will get their
previous property if the course of the river
reverts back to its original place.
 River may be navigable or non-navigable.
Art. 463. Whenever the current of a river divides
itself into branches, leaving a piece of land or part
thereof isolated, the owner of the land retains his
ownership. He also retains it if a portion of land is
separated from the estate by the current. (374)
Art. 464. Islands which may be formed on the seas
within the jurisdiction of the Philippines, on lakes,
and on navigable or floatable rivers belong to the
State. (371a)
Art. 465. Islands which through successive
accumulation of alluvial deposits are formed in non-
navigable and non-floatable rivers, belong to the
owners of the margins or banks nearest to each of
them, or to the owners of both margins if the island
is in the middle of the river, in which case it shall be
divided longitudinally in halves. If a single island
thus formed be more distant from one margin than
from the other, the owner of the nearer margin shall
be the sole owner thereof. (373a)
SECTION 3. - Right of Accession with Respect
to Movable Property
Art. 466. Whenever two movable things belonging
to different owners are, without bad faith, united in
such a way that they form a single object, the owner
of the principal thing acquires the accessory,
indemnifying the former owner thereof for its value.
(375)
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ADJUNCTION OR CONJUNCTION
Is a process whereby two movable things owned by
different persons are joined together without bad
faith, in such a way that they from a single object.
CLASSES OF ADJUNCTION:
1. Inclusion (engraftment)—such as setting a
precious stone on a golden ring;
2. Soldadura (soldering)—such as joining a
piece of metal to another metal;
3. Tejido (weaving);
4. Escritura (writing);
5. Pintura (painting).
Art. 467. The principal thing, as between two things
incorporated, is deemed to be that to which the
other has been united as an ornament, or for its use
or perfection. (376)
Art. 468. If it cannot be determined by the rule given
in the preceding article which of the two things
incorporated is the principal one, the thing of the
greater value shall be so considered, and as
between two things of equal value, that of the
greater volume.
In painting and sculpture, writings, printed matter,
engraving and lithographs, the board, metal, stone,
canvas, paper or parchment shall be deemed the
accessory thing. (377)
3. Owner of the principal is in bad faith.
Art. 470. Whenever the owner of the accessory
thing has made the incorporation in bad faith, he
shall lose the thing incorporated and shall have the
obligation to indemnify the owner of the principal
thing for the damages he may have suffered.
If the one who has acted in bad faith is the owner of
the principal thing, the owner of the accessory thing
shall have a right to choose between the former
paying him its value or that the thing belonging to
him be separated, even though for this purpose it
be necessary to destroy the principal thing; and in
both cases, furthermore, there shall be indemnity
for damages.
If either one of the owners has made the
incorporation with the knowledge and without the
objection of the other, their respective rights shall
be determined as though both acted in good faith.
(379a)
Art. 471. Whenever the owner of the material
employed without his consent has a right to an
indemnity, he may demand that this consist in the
delivery of a thing equal in kind and value, and in all
other respects, to that employed, or else in the price
thereof, according to expert appraisal. (380)

THE PRINCIPAL IS THAT: RULES IN ADJUNCTION

1. To which the accessory has been united as Owner of the Owner of the
ornament or for its use or perfection; Principal (OP) Accessory (OA)
2. Of greater value, if they are of unequal OP = GF Acquires the May separate
value; OA = GF accessory, them if no injury; if
3. Of greater volume, if they are of equal Or indemnifying value of the
value; OP = BF the OA of its accessory is
4. Of greater merits. OA = BF value greater than the
(as if both value of the
in GF) principal, OA may
Art. 469. Whenever the things united can be demand
separated without injury, their respective owners separation even if
may demand their separation. damages will be
caused to the
Nevertheless, in case the thing united for the use, principal
embellishment or perfection of the other, is much (expenses is
more precious than the principal thing, the owner of borne by one who
the former may demand its separation, even though caused the
the thing to which it has been incorporated may conjunction)
suffer some injury. (378) OP = GF Owns the Loses the thing
OA = BF accessory plus incorporated and
WHEN SEPARATION IS ALLOWED: right to indemnify the OP
1. Separation without injury; damages for damages
2. Separation with injury – accessory is more cause if any
precious than the principal; owner of OP = BF 1. Pay OA Either—
accessory may demand its separation if if OA = GF value of 1. OP paying his
the principal may suffer injury; accessory; its value; or

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2. Principal 2. That the thing Art. 474. One who in good faith employs the
and belonging to material of another in whole or in part in order to
accessory him be make a thing of a different kind, shall appropriate
be separated the thing thus transformed as his own, indemnifying
separated; even though it the owner of the material for its value.
3. Liability for be necessary
damages to destroy the If the material is more precious than the
principal thing; transformed thing or is of more value, its owner
may, at his option, appropriate the new thing to
Plus, in either himself, after first paying indemnity for the value of
case, the work, or demand indemnity for the material.
damages
If in the making of the thing bad faith intervened, the
owner of the material shall have the right to
Art. 472. If by the will of their owners two things of appropriate the work to himself without paying
the same or different kinds are mixed, or if the anything to the maker, or to demand of the latter
mixture occurs by chance, and in the latter case the that he indemnify him for the value of the material
things are not separable without injury, each owner and the damages he may have suffered. However,
shall acquire a right proportional to the part the owner of the material cannot appropriate the
belonging to him, bearing in mind the value of the work in case the value of the latter, for artistic or
things mixed or confused. (381) scientific reasons, is considerably more than that of
the material. (383a)
Art. 473. If by the will of only one owner, but in good
faith, two things of the same or different kinds are Art. 475. In the preceding articles, sentimental value
mixed or confused, the rights of the owners shall be shall be duly appreciated. (n)
determined by the provisions of the preceding
article. SPECIFICATION
It means the giving of a new form to a material
If the one who caused the mixture or confusion belonging to another person through application of
acted in bad faith, he shall lose the thing belonging labor or industry.
to him thus mixed or confused, besides being
obliged to pay indemnity for the damages caused to
the owner of the other thing with which his own was
mixed. (382) ADJUNCTION MIXTURE SPECIFICATION
it involves at Involves at May involve only
MIXTURE
least two least two one thing
Takes place when two or more things belonging to
things things
different owners are mixed or combined.
As a rule, As a rule, co- As a rule,
accessory ownership accessory
KINDS:
follows the results follows the
1. Commixtion—mixture of solid things.
principal principal
2. Confusion—mixture of liquid things.
The things May either The new object
joined retain retain or lose retains or
their nature respective preserves the
RULES:
natures nature of the
1. Mixture by will of the owners—their rights
original object
shall be governed by their STIPULATIONS.
Without stipulation, each acquires a right of
interest IN PROPORTION to the value of
his material.
CHAPTER 3
2. Mixture caused by the owner in GF or by QUIETING OF TITLE (n)
chance—each share shall still be IN
PROPORTION to the value of their thing. Art. 476. Whenever there is a cloud on title to real
property or any interest therein, by reason of any
3. Mixture caused by owner in BF—the instrument, record, claim, encumbrance or
actor FORFEITS his thing and is liable for proceeding which is apparently valid or effective but
DAMAGES is in truth and in fact invalid, ineffective, voidable, or
unenforceable, and may be prejudicial to said title,
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 141
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an action may be brought to remove such cloud or reimburse him for expenses that may have
to quiet the title. redounded to the plaintiff's benefit.

An action may also be brought to prevent a cloud Art. 480. The principles of the general law on the
from being cast upon title to real property or any quieting of title are hereby adopted insofar as they
interest therein. are not in conflict with this Code.

2011 Bar Exam Question NOTE: Action to Quiet Title does NOT prescribe if
(6) Which of the following is an indispensable the plaintiff is in possession.
requirement in an action for "quieting of title"
involving real property? The plaintiff must (A) Art. 481. The procedure for the quieting of title or
be in actual possession of the property. (B) be the removal of a cloud therefrom shall be governed
the registered owner of the property. (C) have by such rules of court as the Supreme Court shall
legal or equitable title to the property. (D) promulgated.
be the beneficial owner of the property.
NOTE: Action to quiet title is similar to Declaratory
Relief of the Rules of Court (Rule 63).
CLASSIFICATION:
1. Remedial action—one to remove cloud on
Jurisdiction in Quieting of Title: RTC/MTC,
title.
depending on the amount of assessed value.
2. Preventive action—one to prevent the
casting of a (threatened) cloud on title.
Distinctions between action for the Quieting of
Title and action for Removal of Cloud
REASONS:
Basis Action to Action to
1. To prevent litigation;
Quiet Title Remove
2. To protect true title and possession;
Cloud
3. Real interest of both parties which requires
Procure
that precise state of title be known;
cancellation,
4. Promotion of right and justice.
Put an end to release on an
vexatious instrument,
Purpose litigation in encumbrance
NATURE
respect to the or claim in the
Not suits in rem nor personam but suits against
property plaintiff’s title
particular person/s in respect to the res (action
quasi in rem). concerned which affects
the title or
enjoyment of
 May not be brought for the purpose of settling
the property
boundary disputes.
 Applicable to real property or any interest Plaintiff asserts Plaintiff
therein. The law, however, does not exclude own claim and declares his
personal property from actions to quiet title declares that own claim and
(NOTE: vessel partakes of the nature of a the claim of the title, and at the
real property because of its considerable defendant is same time
value) unfounded and indicates the
Nature calls on the source and
defendant to nature of the
Art. 477. The plaintiff must have legal or equitable justify his claim defendant’s
title to, or interest in the real property which is the on the property claim, pointing
subject matter of the action. He need not be in that the same its defects and
possession of said property. may be prays for the
determined by declaration of
Art. 478. There may also be an action to quiet title the court its invalidity
or remove a cloud therefrom when the contract,
instrument or other obligation has been
extinguished or has terminated, or has been barred
by extinctive prescription. CHAPTER 4
RUINOUS BUILDINGS AND TREES IN DANGER
Art. 479. The plaintiff must return to the defendant OF FALLING
all benefits he may have received from the latter, or
Art. 482. If a building, wall, column, or any other
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construction is in danger of falling, the owner shall 6. Incidental—exists independently of the will
be obliged to demolish it or to execute the of the parties.
necessary work in order to prevent it from falling.

If the proprietor does not comply with this CO-OWNERSHIP PARTNERSHIP

obligation, the administrative authorities may order No legal personality Has a distinct legal or
the demolition of the structure at the expense of the juridical personality
owner, or take measures to insure public safety. Created by contract or Created by contract
(389a) other things (like law, only
succession, etc.)
Art. 483. Whenever a large tree threatens to fall in Purpose is collective Purpose is for profit
such a way as to cause damage to the land or enjoyment of a thing
tenement of another or to travelers over a public or Agreement for it to exist
private road, the owner of the tree shall be obliged for more than 10 years
to fell and remove it; and should he not do so, it (valid as to the 10 years
shall be done at his expense by order of the and void as to the No term limit
administrative authorities. (390a) excess)

If imposed by the
testator of a donor, valid
Title III. - CO-OWNERSHIP up to 20 years (void as
to the excess)
Art. 484. There is co-ownership whenever the As a rule, there is
ownership of an undivided thing or right belongs to As a rule, no mutual mutual representation
different persons. representation (when no managing
partner is appointed in
In default of contracts, or of special provisions, co- the articles)
ownership shall be governed by the provisions of Not dissolved by death Dissolved by death or
this Title. (392) or incapacity of a co- incapacity of a partner
owner
REQUISITES: Cannot dispose his
1. Plurality of subjects—many owners; Can dispose of his share in such a way that
2. Unity of material or of object of ownership; share without consent will make the transferee
3. Recognition of ideal shares. of other co-owners a partner without
consent of the other
partner
Profits are dependent Profits may be
CAUSES OR SOURCES OF CO-OWNERSHIP: on the proportionate stipulated upon by the
1. Law; share partners.
2. Contracts;
3. Succession;
4. Fortuitous event/chance—like that of CO-OWNERSHIP JOINT TENANCY
commixtion; Involves a physical Involves a physical
5. Occupancy—as when two persons catch a whole. But there is an whole. But there is no
wild animal; ideal or abstract ideal or abstract
6. Donation; division; each co-owner division; each and all of
7. Marriage—like the absolute community of being the owner of his them own the whole
property and property relation under art. ideal share thing
147, FamCod. Each co-owner may Each joint owner may
dispose of his ideal or not dispose of his own
KINDS OF CO-OWNERSHIP: undivided share without share without the
1. Ordinary—right of partition exists; the other’s consent consent of all the rest,
2. Compulsory—no right of partition exists because he really has
(like a party wall); no ideal share
3. Legal—created by law; If a joint tenant dies, his
4. Contractual—created by contract; If a co-owner dies, his share goes by accretion
5. Singular or particular—over a particular share goes to his own to the other joint tenants
or specific thing; heirs by virtue of their

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survivorship or jus
accrecendi
If a co-owner is a minor, If one joint tenant is
this does not benefit the under legal disability
others for the purpose (like minority), this
of prescription, and benefits the other
prescription therefore against whom
runs against them prescription will not run
Art. 485. The share of the co-owners, in the benefits
as well as in the charges, shall be proportional to
their respective interests. Any stipulation in a
contract to the contrary shall be void.
The portions belonging to the co-owners in the co-
ownership shall be presumed equal, unless the
contrary is proved. (393a)
Art. 486. Each co-owner may use the thing owned
in common, provided he does so in accordance with
the purpose for which it is intended and in such a
way as not to injure the interest of the co-ownership
or prevent the other co-owners from using it
according to their rights. The purpose of the co-
ownership may be changed by agreement, express
or implied. (394a)
Art. 487. Any one of the co-owners may bring an
action in ejectment. (n)
Art. 488. Each co-owner shall have a right to
compel the other co-owners to contribute to the
expenses of preservation of the thing or right owned
in common and to the taxes. Any one of the latter
may exempt himself from this obligation by
renouncing so much of his undivided interest as
may be equivalent to his share of the expenses and
taxes. No such waiver shall be made if it is
prejudicial to the co-ownership. (395a)
RIGHTS OF CO-OWNERS:
1. Right to benefits proportional to respective
interest;
2. Right to use the thing co-owned—
a. For purpose for which it is
intended;
b. Without prejudice the interest of the
co-ownership;
c. Without preventing the other co-
owners from making use thereof;
3. Right to change the purpose of the co-
ownership by agreement;
4. Right to bring an ejectment suit in behalf of
the other co-owner;
5. Right to compel other co-owner to
contribute to necessary expenses for
preservation of the thing and taxes;
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
6. Right to be exempt from obligation of
paying necessary expenses and taxes by
renouncing his share but may do so only if
such is not prejudicial to the co-ownership;
7. Right to make repairs for the preservation
of the thing and receive reimbursement
therefrom;
8. Right to full ownership of his part and fruits;
9. Right to alienate, assign or mortgage own
share, except personal rights like right to
use and habitation;
10. Right to ask partition anytime, subject to
some exceptions;
11. Right of pre-emption;
12. Right of redemption;
 Redemption of the whole property by a
co-owner does not vest in him sole title
over the said property. Redemption
within the period prescribed by law by a
co-owner will inure to the benefit of all
co-owners. Hence, it will not put an end
to existing co-ownership (Mariano vs.
CA, 222 SCRA 736).
Art. 489. Repairs for preservation may be made at
the will of one of the co-owners, but he must, if
practicable, first notify his co-owners of the
necessity for such repairs. Expenses to improve or
embellish the thing shall be decided upon by a
majority as determined in Article 492. (n)
Ownership; Co-Ownership (1992)
A, B and C are the co-owners in equal shares of a
residential house and lot. During their co-ownership, the
following acts were respectively done by the co-owners:
1) A undertook the repair of the foundation of the house,
then tilting to one side, to prevent the house from
collapsing. 2) B and C mortgaged the house and lot to
secure a loan. 3) B engaged a contractor to build a
concrete fence all
around the lot. 4) C built a beautiful grotto in the garden.
5) A and C sold the land to X for a very good price.
(a) Is A's sole decision to repair the foundation of
the house binding on B and C? May A require B and C to
contribute their 2/3 share of the expense? Reasons.
(b) What is the legal effect of the mortgage contract
executed by B and C? Reasons.
(c) Is B's sole decision to build the fence binding
upon A and C? May B require A and C to contribute their
2/ 3 share of the expense? Reasons.
(d) Is C's sole decision to build the grotto binding
upon A and B? May C require A and B to contribute their
2/ 3 share of the expense? Reasons.
(e) What are the legal effects of the contract of sale
executed by A. C and X? Reasons.
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SUGGESTED ANSWER:
(a) Yes. A's sole decision to repair the foundation is
binding upon B and C. B and C must contribute 2/3 of the
expense. Each co-owner has the right to compel the
other co-owners to contribute to the expense of
preservation of the thing (the house) owned in common in
proportion to their respective interests (Arts. 485 and 488,
Civil Code).
SUGGESTED ANSWER:
of A and shall be deemed to cover only the rights and
interests of B and C in the house and lot. The mortgage
shall be limited to the portion (2/3) which may be allotted
to B and C in the partition (Art. 493, Civil Code).
SUGGESTED ANSWER:
(c) B's sole decision to build the concrete fence is not
binding upon A and C. Expenses to improve the thing
owned in common must be decided upon by a majority of
the co-owners who represent the controlling interest
(Arts. 489 and 492. Civil Code).
SUGGESTED ANSWER:
(d) C's sole decision to build the grotto is not binding
upon A and B who cannot be required to contribute to the
expenses for the embellishment of the thing owned in
common if not decided upon by the majority of the
co¬owners who represent the controlling interest (Arts.
489 and 492, Civil Code).
SUGGESTED ANSWER:
(e) The sale to X shall not bind the 1/3 share of B and
shall be deemed to cover only the 2/3 share of A and C in
the land (Art. 493, Civil Code). B shall have the right to
redeem the 2/3 share sold to X by A and C since X is a
third person (Art. 1620, Civil Code).
Art. 490. Whenever the different stories of a house
belong to different owners, if the titles of ownership
do not specify the terms under which they should
contribute to the necessary expenses and there
exists no agreement on the subject, the following
rules shall be observed:
(1) The main and party walls, the roof and
the other things used in common, shall be
preserved at the expense of all the owners
in proportion to the value of the story
belonging to each;
(2) Each owner shall bear the cost of
maintaining the floor of his story; the floor of
the entrance, front door, common yard and
sanitary works common to all, shall be
maintained at the expense of all the owners
pro rata;
(3) The stairs from the entrance to the first
story shall be maintained at the expense of
all the owners pro rata, with the exception
of the owner of the ground floor; the stairs
from the first to the second story shall be
preserved at the expense of all, except the
owner of the ground floor and the owner of
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
the first story; and so on successively.
(396)
Art. 491. None of the co-owners shall, without the
consent of the others, make alterations in the thing
owned in common, even though benefits for all
would result therefrom. However, if the withholding
of the consent by one or more of the co-owners is
clearly prejudicial to the common interest, the
courts may afford adequate relief. (397a)
Art. 492. For the administration and better
enjoyment of the thing owned in common, the
resolutions of the majority of the co-owners shall be
binding.
There shall be no majority unless the resolution is
approved by the co-owners who represent the
controlling interest in the object of the co-
ownership.
Should there be no majority, or should the
resolution of the majority be seriously prejudicial to
those interested in the property owned in common,
the court, at the instance of an interested party,
shall order such measures as it may deem proper,
including the appointment of an administrator.
Whenever a part of the thing belongs exclusively to
one of the co-owners, and the remainder is owned
in common, the preceding provision shall apply only
to the part owned in common. (398)
Art. 493. Each co-owner shall have the full
ownership of his part and of the fruits and benefits
pertaining thereto, and he may therefore alienate,
assign or mortgage it, and even substitute another
person in its enjoyment, except when personal
rights are involved. But the effect of the alienation
or the mortgage, with respect to the co-owners,
shall be limited to the portion which may be alloted
to him in the division upon the termination of the co-
ownership. (399)
Note: Even if a co-owner sells the whole property
as his, the sale will affect only his own share but not
those of the other co-owners who did not consent to
the sale.
A sale of the entire property without the consent of
the other co-owners is not null and void but affects
only his undivided share and the transferee gets
only what would correspond to his grantor in the
partition of the thing (Paulitan vs. CA, 215 SCRA
866).
Art. 494. No co-owner shall be obliged to remain in
the co-ownership. Each co-owner may demand at
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any time the partition of the thing owned in
common, insofar as his share is concerned.
Nevertheless, an agreement to keep the thing
undivided for a certain period of time, not exceeding
ten years, shall be valid. This term may be
extended by a new agreement.
A donor or testator may prohibit partition for a
period which shall not exceed twenty years.
Neither shall there be any partition when it is
prohibited by law.
No prescription shall run in favor of a co-owner
or co-heir against his co-owners or co-heirs so
long as he expressly or impliedly recognizes the
co-ownership. (400a)
Ownership; Co-Ownership; Prescription (2002)
Senen and Peter are brothers. Senen migrated to
Canada early while still a teenager. Peter stayed in
Bulacan to take care of their widowed mother and
continued to work on the Family farm even after her
death. Returning to the country some thirty years after he
had left, Senen seeks a partition of the farm to get his
share as the only co-heir of Peter. Peter interposes his
opposition, contending that acquisitive prescription has
already set in and that estoppel lies to bar the action for
partition, citing his continuous possession of the property
for at least 10 years, for almost 30 years in fact. It is
undisputed that Peter has never openly claimed sole
ownership of the property. If he ever had the intention to
do so, Senen was completely ignorant of it. Will Senen’s
action prosper? Explain. (5%).
SUGGESTED ANSWER:
Senen’s action will prosper. Article 494 of the New Civil
Code provides that “no prescription shall run in favor of a
co-owner or co-heir against his co-owners or co-heirs so
long as he expressly or impliedly recognizes the
co¬ownership nor notified Senen of his having repudiated
the same.
ALTERNATIVE ANSWER:
Senen’s action will prosper. This is a case of implied
trust. (Art 1441, NCC) For purposes of prescription under
the concept of an owner (Art. 540, NCC). There is no
such concept here. Peter was a co-owner, he never
claimed sole ownership of the property. He is therefore
estopped under Art. 1431, NCC.
Ownership; Co-Ownership; Prescription (2000)
In 1955, Ramon and his sister Rosario inherited a parcel
of land in Albay from their parents. Since Rosario was
gainfully employed in Manila, she left Ramon alone to
possess and cultivate the land. However, Ramon never
shared the harvest with Rosario and was even able to sell
one-half of the land in 1985 by claiming to be the sole
heir of his parents. Having reached retirement age in
1990 Rosario returned to the province and upon learning
what had transpired, demanded that the remaining half of
the land be given to her as her share. Ramon opposed,
asserting that he has already acquired ownership of the
land by prescription, and that Rosario is barred by laches
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
from demanding partition and reconveyance. Decide the
conflicting claims. (5%)
SUGGESTED ANSWER:
Ramon is wrong on both counts: prescription and laches.
His possession as co-owner did not give rise to
acquisitive prescription. Possession by a co-owner is
deemed not adverse to the other co-owners but is, on the
contrary, deemed beneficial to them (Pongon v. GA, 166
SCRA 375). Ramon's possession will become adverse
only when he has repudiated the co-ownership and such
repudiation was made known to Rosario. Assuming that
the sale in 1985 where Ramon claimed he was the sole
heir of his parents amounted to a repudiation of the co-
ownership, the prescriptive period began to run only from
that time. Not more than 30 years having lapsed since
then, the claim of Rosario has not as yet prescribed. The
claim of laches is not also meritorious. Until the
repudiation of the co-ownership was made known to the
other co-owners, no right has been violated for the said
co-owners to vindicate. Mere delay in vindicating the
right, standing alone, does not constitute laches.
ALTERNATIVE ANSWER:
Ramon has acquired the land by acquisitive prescription,
and because of laches on the part of Rosario. Ramon's
possession of the land was adverse because he asserted
sole ownership thereof and never shared the harvest
therefrom. His adverse possession having been
continuous and uninterrupted for more than 30 years,
Ramon has acquired the land by prescription. Rosario is
also guilty of laches not having asserted her right to the
harvest for more than 40 years.
Art. 495. Notwithstanding the provisions of the
preceding article, the co-owners cannot demand a
physical division of the thing owned in common,
when to do so would render it unserviceable for the
use for which it is intended. But the co-ownership
may be terminated in accordance with Article 498.
(401a)
Art. 496. Partition may be made by agreement
between the parties or by judicial proceedings.
Partition shall be governed by the Rules of Court
insofar as they are consistent with this Code. (402)
NOTE: Oral Partition is valid between the
parties; not covered by the Statute of Frauds.
Art. 497. The creditors or assignees of the co-
owners may take part in the division of the thing
owned in common and object to its being effected
without their concurrence. But they cannot impugn
any partition already executed, unless there has
been fraud, or in case it was made notwithstanding
a formal opposition presented to prevent it, without
prejudice to the right of the debtor or assignor to
maintain its validity. (403)
Art. 498. Whenever the thing is essentially
indivisible and the co-owners cannot agree that it
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be allotted to one of them who shall indemnify the discharging his monetary obligation by
others, it shall be sold and its proceeds distributed. paying it with his non-monetary interest in
(404) the co-owned property. The fact that he is
giving up his entire interest simply means
Art. 499. The partition of a thing owned in common that he is accepting the value of his
shall not prejudice third persons, who shall retain interest as equivalent to his share in the
the rights of mortgage, servitude or any other real taxes and expenses of preservation.
rights belonging to them before the division was
made. Personal rights pertaining to third persons
against the co-ownership shall also remain in force, Art. 500. Upon partition, there shall be a mutual
notwithstanding the partition. (405) accounting for benefits received and
reimbursements for expenses made. Likewise,
DUTIES AND LIABILITES: each co-owner shall pay for damages caused by
1. Share in the charges proportional to reason of his negligence or fraud. (n)
respective interest;
2. Pay necessary expenses and taxes; Art. 501. Every co-owner shall, after partition, be
3. Pay useful and luxurious expenses—if liable for defects of title and quality of the portion
determined by majority; assigned to each of the other co-owners. (n)
4. Duty to obtain consent of all if the thing is to
be altered even if beneficial, resort to court
if non-consent is manifestly prejudicial;
5. Duty to obtain consent of majority with Title IV. - SOME SPECIAL PROPERTIES
regard to administration and better
enjoyment of the thing; CHAPTER I
6. No prescription runs in favor of a co-owner WATERS
as long as he recognizes the co-ownership.
Note: Provisions of the Civil Code (arts. 502-
Requisites: 518) on waters are repealed by the Water Code.
a. He has repudiated though
unequivocal acts;
b. Such act of repudiation is made
known to other co-owners; CHAPTER 2
c. Evidence must be clear and MINERALS
convincing.
d. Open, continuous, exclusive, and Art. 519. Mining claims and rights and other matters
notorious possession. concerning minerals and mineral lands are
governed by special laws. (427a)
7. Cannot ask for physical division if it would
render the thing unserviceable;
8. Duty to render mutual accounting of
benefits and reimbursements of expenses. CHAPTER 3
TRADE-MARKS AND TRADE-NAMES
Ownership; Co-Ownership (2009) No. XI.
TRUE or FALSE. Answer TRUE if the Art. 520. A trade-mark or trade-name duly
statement is true, or FALSE if the statement is registered in the proper government bureau or
false. Explain your answer in not more than office is owned by and pertains to the person,
two (2) sentences. (D). The renunciation by a corporation, or firm registering the same, subject to
co-owner of his undivided share in the co- the provisions of special laws. (n)
owned property in lieu of the performance of
his obligation to contribute to taxes and Art. 521. The goodwill of a business is property, and
expenses for the preservation of the property may be transferred together with the right to use the
constitutes dacion en pago. (1%) SUGGESTED name under which the business is conducted. (n)
ANSWER:
True, Under the Civil Code, a coowner may
Art. 522. Trade-marks and trade-names are
renounce his share in the coowned property
governed by special laws. (n)
in lieu of paying for his share in the taxes
and expenses for the preservation of the
coowned property. In effect, there is dacion
en pago because the co-owner is

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Title V. - POSSESSION
CHAPTER 1
POSSESSION AND THE KINDS THEREOF
Art. 523. Possession is the holding of a thing or the
enjoyment of a right. (430a)
Requisites:
1. Occupancy – actual or constructive
(corpus);
2. Intent to possess (animus possidendi);
3. Must be by virtue of one’s own right.
EXTENT OF POSSESSION:
1. Physical/actual – occupancy in fact of the
whole or at least substantially the whole;
2. Constructive – occupancy in part in the
name of the whole under such
circumstances that the law extends the
occupancy to the possession of the whole.
SUBJECT OF POSSESSION
All things or rights which are susceptible of
appropriation can be possessed.
DEGREES OF POSSESSION
1. Holding without title and in violation of right
of the owner (grammatical degree)
Ex. Thief
2. Possession with juridical title but not that of
owner (Juridical possession)
Ex. Lessee, pledge, depositary
3. Possession with just title but not from true
owner (possessory right)
Ex. Buyer in good faith not knowing that the
seller merely pretends to be the owner
4. Possession with just title from true owner.
Art. 524. Possession may be exercised in one's
own name or in that of another. (413a)
Art. 525. The possession of things or rights may be
had in one of two concepts: either in the concept of
owner, or in that of the holder of the thing or right to
keep or enjoy it, the ownership pertaining to another
person. (432)
ACQUISITION OF POSSESSION FROM THE
VIEWPOINT OF WHO POSSESSES:
1. Personal
Requisites:
a. Intent to possess;
b. Capacity to possess;
c. Object must be capable of being
possessed.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
2. Thru authorized person (agent or
representative)
Requisites:
a. Intent to possess for principal;
b. Authority to possess;
c. Principal has intent and capacity to
possess.
3. Thru unauthorized person (but only if
subsequently ratified)
Requisites:
a. Intent to possess for another (for
the principal);
b. Capacity of the principal to
possess;
c. Ratification by principal.
Classes of Possession:
1. In concept of owner—owner himself or
adverse possessor
Effects:
a. May be converted into ownership
through acquisitive prescription;
b. Bring actions necessary to protect
possession;
c. Ask for inscription of possession;
d. Demand fruits and damages from
one unlawfully detaining property.
2. In concept of holder – usufruct, lessee,
bailee in commodatum;
3. In oneself – personal acquisition
a. He must have capacity to acquire;
b. Intent to possess;
c. Possibility to acquire possession.
4. In the name of another—agent with
authority not subsequently ratified
a. Voluntary – as when the agent
possesses for the principal.
b. Necessary – as when the mother
possesses for her unborn child.
c. Unauthorized – becomes
principal’s possession only after
being ratified without prejudice to
the effects of negotiorum gestio.
The exercise of right of ownership yields to the
exercise of the rights of agricultural tenants.
Possession and ownership are distinct legal
concepts (Heirs of Roman Soriano vs. CA, 363
SCRA 86).
Art. 526. He is deemed a possessor in good faith
who is not aware that there exists in his title or
mode of acquisition any flaw which invalidates it.
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He is deemed a possessor in bad faith who
possesses in any case contrary to the foregoing.
NOTE: Bad faith is personal. It cannot be
transferred to the heirs unless they are also aware
of the flaw.
Mistake upon a doubtful or difficult question of law
may be the basis of good faith. (433a)
Art. 527. Good faith is always presumed, and upon
him who alleges bad faith on the part of a
possessor rests the burden of proof. (434)
Art. 528. Possession acquired in good faith does
not lose this character except in the case and from
the moment facts exist which show that the
possessor is not unaware that he possesses the
thing improperly or wrongfully. (435a)
Art. 529. It is presumed that possession continues
to be enjoyed in the same character in which it was
acquired, until the contrary is proved. (436)
Art. 530. Only things and rights which are
susceptible of being appropriated may be the object
of possession. (437)
CHAPTER 2
ACQUISITION OF POSSESSION
Art. 531. Possession is acquired by the material
occupation of a thing or the exercise of a right, or by
the fact that it is subject to the action of our will, or
by the proper acts and legal formalities established
for acquiring such right. (438a)
Art. 532. Possession may be acquired by the same
person who is to enjoy it, by his legal
representative, by his agent, or by any person
without any power whatever: but in the last case,
the possession shall not be considered as acquired
until the person in whose name the act of
possession was executed has ratified the same,
without prejudice to the juridical consequences of
negotiorum gestio in a proper case. (439a)
Ways of acquiring possession:
1. Material occupation or exercise of the
right
a. Tradicion brevi manu—takes place
when one already in possession of a
thing by a title other than ownership
continues to possess the same under a
new title, that of ownership.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
b. Tradicion constitutum posessorium
– happens when the owner continues in
possession of the property alienated
not as owner but in some other
capacity.
2. By subjection of the thing or right to our
will
a. Tradicion longa manu – effected by
mere consent or agreement of the
parties.
b. Tradicion simbolica – effected by
delivering an object (such as key)
symbolizing the placing of one thing
under the control of the vendee.
3. By proper acts and legal formalities
established for acquiring such right of
possession.
4. By succession.
Art. 533. The possession of hereditary property is
deemed transmitted to the heir without interruption
and from the moment of the death of the decedent,
in case the inheritance is accepted.
One who validly renounces an inheritance is
deemed never to have possessed the same. (440)
Art. 534. On who succeeds by hereditary title shall
not suffer the consequences of the wrongful
possession of the decedent, if it is not shown that
he was aware of the flaws affecting it; but the
effects of possession in good faith shall not benefit
him except from the date of the death of the
decedent. (442)
Art. 535. Minors and incapacitated persons may
acquire the possession of things; but they need the
assistance of their legal representatives in order to
exercise the rights which from the possession arise
in their favor. (443)
Art. 536. In no case may possession be acquired
through force or intimidation as long as there is a
possessor who objects thereto. He who believes
that he has an action or a right to deprive another of
the holding of a thing, must invoke the aid of the
competent court, if the holder should refuse to
deliver the thing. (441a)
Note: Person using violence or intimidation in
acquiring possession real property or real rights
may be guilty under the RPC.
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Art. 312, RPC. Occupation of real property or
usurpation of real rights in property. — Any person
who, by means of violence against or intimidation of
persons, shall take possession of any real property or
shall usurp any real rights in property belonging to
another, in addition to the penalty incurred for the acts of
violence executed by him, shall be punished by a fine
from 50 to 100 per centum of the gain which he shall
have obtained, but not less than 75 pesos.
If the value of the gain cannot be ascertained, a fine of
from 200 to 500 pesos shall be imposed.
If what is possessed is movable property and it is
by violence or intimidation of persons, the person
may be guilty of robbery.
NOTE: Person unlawfully deprived of possession
must invoke the aid of the court in order to recover
possession. He cannot use force, violence or
intimidation in acquiring back his possession.
Otherwise, he may be held guilty of GRAVE
COERCION. He cannot take the law into his own
hands.
BE CAREFUL: The rule above is true only when
the unlawful derivation of possession is already
consummated. Under art. 429.
Art. 429. The owner or lawful possessor of a thing
has the right to exclude any person from the
enjoyment and disposal thereof. For this purpose, he
may use such force as may be reasonably necessary
to repel or prevent an actual or threatened unlawful
physical invasion or usurpation of his property.
Thus, before the lawful owner or possessor is
actually been deprived of possession, he can use
REASONABLE FORCE necessary to PREVENT or
REPEL an actual or threatened physical invasion of
his property.
Art. 537. Acts merely tolerated, and those
executed clandestinely and without the knowledge
of the possessor of a thing, or by violence, do not
affect possession. (444)
Art. 538. Possession as a fact cannot be
recognized at the same time in two different
personalities except in the cases of co-possession.
Should a question arise regarding the fact of
possession, the present possessor shall be
preferred; if there are two possessors, the one
longer in possession; if the dates of the possession
are the same, the one who presents a title; and if all
these conditions are equal, the thing shall be placed
in judicial deposit pending determination of its
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
possession or ownership through proper
proceedings. (445)
ORDER OF PREFERENCE:
1. Present possessor;
2. Longer in possession;
3. If dates are the same—possessor with a
title;
4. If all of the above are equal, the court shall
determine the fact of possession or
ownership.
CHAPTER 3
EFFECTS OF POSSESSION
Art. 539. Every possessor has a right to be
respected in his possession; and should he be
disturbed therein he shall be protected in or
restored to said possession by the means
established by the laws and the Rules of Court.
A possessor deprived of his possession through
forcible entry may within ten days from the filing of
the complaint present a motion to secure from the
competent court, in the action for forcible entry, a
writ of preliminary mandatory injunction to restore
him in his possession. The court shall decide the
motion within thirty (30) days from the filing thereof.
(446a)
Note: in a case decided by the SC, it was held
that an informal settler (squatter) has a right to file
an action for recovery of possession (forcible
entry) against another informal settler. A squatter
was allowed by the court to file the action
because although the land (“in Smokey
mountains”) belongs to another (the government),
the only issue in forcible entry is right of
possession. Besides, the court said that issues
involving possession of property affects the peace
and order of the community. The court cannot
allow them to settle their disputes by fighting or
otherwise.
Art. 540. Only the possession acquired and enjoyed
in the concept of owner can serve as a title for
acquiring dominion. (447)
RULES ON PRESCRIPTION:
1. Real Property—
a. 10 years; in good faith and just title
b. 30 years; in bad faith whether or
not there is just title
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2. Personal Property—
a. 4 years; in good faith
b. 8 years; in bad faith.
NOTE HOWEVER: INDEFEASIBILITY OF
TORRENS SYSTEM
Registered lands cannot be acquired by acquisitive
prescription.
 Registered lands may be lost and acquired
under the EQUITABLE doctrine of
LACHES.
Prescription & Laches; Elements of Laches (2000)
In an action brought to collect a sum of money based on
a surety agreement, the defense of laches was raised as
the claim was filed more than seven years from the
maturity of ten-year prescriptive period provided by law
wherein actions based on written contracts can be
instituted. a) Will the defense prosper? Reason. (3%) b)
What are the essential elements of laches? (2%)
SUGGESTED ANSWER:
No, the defense will not prosper. The problem did not
give facts from which laches may be inferred. Mere delay
in filing an action, standing alone, does not constitute
laches (Agra v. PNB. 309 SCRA 509).
SUGGESTED ANSWER:
b) The four basic elements of laches are; (1) conduct on
the part of the defendant or of one under whom he
claims, giving rise to the situation of which complainant
seeks a remedy; (2) delay in asserting the complainant's
rights, the complainant having had knowledge or notice of
the defendant's conduct and having been afforded an
opportunity to institute suit; (3) lack of knowledge on the
part of the defendant that the complainant would assert
the right on which he bases his suit; and (4) injury or
prejudice to the defendant in the event relief is accorded
to the complainant, or the suit is not held to be barred.
Prescription & Laches; Indefeasibility Rule of Torrens
Title (2002)
Way back in 1948, Winda’s husband sold in favor of
Verde Sports Center Corp. (Verde) a 10-hectare property
belonging to their conjugal partnership. The sale was
made without Winda’s knowledge, much less consent. In
1950, Winda learned of the sale, when she discovered
the deed of sale among the documents in her husband’s
vault after his demise. Soon after, she noticed that the
construction of the sports complex had started. Upon
completion of the construction in 1952, she tried but failed
to get free membership privileges in Verde.
Winda now files a suit against Verde for the annulment of
the sale on the ground that she did not consent to the
sale. In answer, Verde contends that, in accordance with
the Spanish Civil Code which was then in force, the sale
in 1948 of the property did not need her concurrence.
Verde contends that in any case the action has
prescribed or is barred by laches. Winda rejoins that her
Torrens title covering the property is indefeasible, and
imprescriptible.
A. Define or explain the term “laches”. (2%)
B. Decide the case, stating your reasons for your
decision. (3%)
SUGGESTED ANSWER:
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
A. LACHES means failure or neglect, for an
unreasonable and unexplained length of time, to do what,
by exercising due diligence, could or should have been
done earlier. It is negligence or omission to assert a right
within a reasonable time. (De Vera v. CA, 305 SCRA 624
[1999])
B. While Article 1413 of the Spanish Civil Code did not
require the consent of the wife for the validity of the sale,
an alienation by the husband in fraud of the wife is void
as held in Uy Coque v. Navas, 45 Phil. 430 (1923).
Assuming that the alienation in 1948 was in fraud of
Winda and, therefore, makes the sale to Verde void, the
action to set aside the sale, nonetheless, is already
barred by prescription and laches. More than 52 years
have already
(a) The mortgage contract executed by O, if at all, is only
a elapsed from her discovery of the sale in 1950.
ALTERNATIVE ANSWER:
B. Winda’s claim that her Torrens Title covering the
property is indefeasible and imprescriptible [does not hold
water] is not tenable. The rule of indefeasibility of a
Torrens Title means that after one year from the date of
issue of the decree of registration or if the land has fallen
into the hands of an innocent purchaser for value, the title
becomes incontestable and incontrovertible.
IMPRESCRIPTIBILITY, on the other hand, means that no
title to the land in derogation of that of the registered
owner may be acquired by adverse possession or
acquisitive prescription or that the registered owner does
not lose by extinctive prescription his right to recover
ownership and possession of the land.
The action in this case is for annulment of the sale
executed by the husband over a conjugal partnership
property covered by a Torrens Title. Action on contracts
are subject to prescription.
POSSESSIONS THAT MAY NOT RIPEN INTO
OWNERSHIP (concept of mere holder):
1. Lessee;
2. Trustee;
3. Guardian;
4. Antichretic creditor;
5. Agents;
6. Depositaries
Payment of taxes is not conclusive proof of
ownership or title. BUT it is the most PERSUASIVE
EVIDENCE of intent to possess (and even of
ownership).
Reason: No man, of a sound mind would pay for
taxes, especially for a long time, if he does not own
(or at least claim ownership) such land.
Art. 541. A possessor in the concept of owner has
in his favor the legal presumption that he possesses
with a just title and he cannot be obliged to show or
prove it. (448a)
3 KINDS OF TITLE:
1. True/valid Title—grantor was not
defective. No need of prescription to
acquire it.
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2. Colorable Title—grantor was not
authorized. Can avail of prescription to
validate ownership.
3. Putative Title—one believing to be an
owner but is not.
Art. 542. The possession of real property presumes
that of the movables therein, so long as it is not
shown or proved that they should be excluded.
(449)
Art. 543. Each one of the participants of a thing
possessed in common shall be deemed to have
exclusively possessed the part which may be
allotted to him upon the division thereof, for the
entire period during which the co-possession lasted.
Interruption in the possession of the whole or a part
of a thing possessed in common shall be to the
prejudice of all the possessors. However, in case of
civil interruption, the Rules of Court shall apply.
(450a)
Art. 544. A possessor in good faith is entitled to the
fruits received before the possession is legally
interrupted.
Natural and industrial fruits are considered received
from the time they are gathered or severed.
Civil fruits are deemed to accrue daily and belong to
the possessor in good faith in that proportion. (451)
Art. 545. If at the time the good faith ceases, there
should be any natural or industrial fruits, the
possessor shall have a right to a part of the
expenses of cultivation, and to a part of the net
harvest, both in proportion to the time of the
possession.
The charges shall be divided on the same basis by
the two possessors.
The owner of the thing may, should he so desire,
give the possessor in good faith the right to finish
the cultivation and gathering of the growing fruits,
as an indemnity for his part of the expenses of
cultivation and the net proceeds; the possessor in
good faith who for any reason whatever should
refuse to accept this concession, shall lose the right
to be indemnified in any other manner. (452a)
Sower; Good Faith/ Bad Faith (2000)
Felix cultivated a parcel of land and planted it to sugar
cane, believing it to be his own. When the crop was eight
months old, and harvestable after two more months, a
resurvey of the land showed that it really belonged to
Fred. What are the options available to Fred? (2%)
SUGGESTED ANSWER:
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
As to the pending crops planted by Felix in good faith,
Fred has the option of allowing Felix to continue the
cultivation and to harvest the crops, or to continue the
cultivation and harvest the crops himself. In the latter
option, however, Felix shall have the right to a part of the
expenses of cultivation and to a part of the net harvest,
both in proportion to the time of possession. (Art. 545
NCC),
ALTERNATIVE ANSWER:
Since sugarcane is not a perennial crop. Felix is
considered a sower in good faith. Being so, Art. 448
applies. The options available to Fred are: (a) to
appropriate the crop after paying Felix the indemnity
under Art. 546, or (b) to require Felix to pay rent.
Art. 546. Necessary expenses shall be refunded to
every possessor; but only the possessor in good
faith may retain the thing until he has been
reimbursed therefor.
Useful expenses shall be refunded only to the
possessor in good faith with the same right of
retention, the person who has defeated him in the
possession having the option of refunding the
amount of the expenses or of paying the increase in
value which the thing may have acquired by reason
thereof. (453a)
REMEDY OF DEFENDANT POSSESSOR IN
GOOD FAITH:
Raise as a counterclaim the necessary and useful
expenses. Failure to do so is tantamount to waiver.
It cannot be raised in a separate proceeding or
action because it will be barred by res judicata or
litis pendentia, as the case may be.
BAD FAITH in relation to Right of Redemption:
If during the pendency of the redemption period, the
highest bidder introduced some improvements on
the land, he is considered as in bad faith. He was
aware that during the pendency of the redemption
period, the mortgagor may redeem the property
foreclosed.
Art. 547. If the useful improvements can be
removed without damage to the principal thing, the
possessor in good faith may remove them, unless
the person who recovers the possession exercises
the option under paragraph 2 of the preceding
article. (n)
Art. 548. Expenses for pure luxury or mere pleasure
shall not be refunded to the possessor in good faith;
but he may remove the ornaments with which he
has embellished the principal thing if it suffers no
injury thereby, and if his successor in the
possession does not prefer to refund the amount
expended. (454)
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Art. 549. The possessor in bad faith shall reimburse can remove if no can remove if no
the fruits received and those which the legitimate substantial injury is substantial injury is
possessor could have received, and shall have a caused. However, caused. However,
right only to the expenses mentioned in paragraph owner has the option to owner has the option to
1 of Article 546 and in Article 443. The expenses allow— allow—
incurred in improvements for pure luxury or mere a. possessor to a. possessor to
pleasure shall not be refunded to the possessor in remove; or remove;
bad faith, but he may remove the objects for which b. retain for b. or retain for
such expenses have been incurred, provided that himself the himself the
the thing suffers no injury thereby, and that the ornament by ornament by
lawful possessor does not prefer to retain them by refunding the paying the
paying the value they may have at the time he amount spent value it has at
enters into possession. (445a) (art. 548) the time owner
enters into
Art. 550. The costs of litigation over the property possession (art.
shall be borne by every possessor. (n) 549)
FRUITS
Art. 551. Improvements caused by nature or time Gathered fruits—must
shall always inure to the benefit of the person who return the value of the
has succeeded in recovering possession. (456) Gathered or severed fruits already received
fruits or harvested fruits as well as value of fruits
are his own which the legitimate
Art. 552. A possessor in good faith shall not be
possessor could have
liable for the deterioration or loss of the thing
received
possessed, except in cases in which it is proved
Pending or ungathered Pending or ungathered
that he has acted with fraudulent intent or
fruits—pro-rating fruits—no rights at all,
negligence, after the judicial summons.
between the possessor not even to expenses
and the owner of for cultivation because
A possessor in bad faith shall be liable for expenses, net harvest by accession, all should
deterioration or loss in every case, even if caused and charges belong to the owner,
by a fortuitous event. (457a) without indemnity.

Art. 553. One who recovers possession shall not be

obliged to pay for improvements which have ceased LIABILITIES/DUTIES OF POSSESSOR:
to exist at the time he takes possession of the thing. 1. return of fruits and fruits that could have
(458) been received, if in bad faith;
2. bear cost of litigation;
USEFUL EXPENSES 3. possessor in good faith is not liable for loss
If in Good Faith If in Bad Faith or deterioration except when fraud or
1. Right to negligence intervened;
reimbursement of 4. possessor in bad faith is liable for loss even
either the amount Possessor in bad faith if caused by fortuitous event;
spent or the is not entitled to any 5. Persons who recover possession is not
increase in value at right regarding the obliged to pay for improvements not
the owner’s option; useful expenses. A existing at the time of occupation.
2. right of retention builder or possessor in
until paid; bad faith is not entitled Art. 554. A present possessor who shows his
3. right of removal to indemnity for ay possession at some previous time, is presumed to
provided no useful improvement on have held possession also during the intermediate
substantial damage the premises because period, in the absence of proof to the contrary.
or injury is caused of art. 449 (459)
to the principal
reducing its value, Art. 555. A possessor may lose his possession:
UNLESS the winner
exercises the option (1) By the abandonment of the thing;
in no. 1
LUXURIOUS or ORNAMENTAL EXPENSES
(2) By an assignment made to another
In general, no right to In general, no right of
either by onerous or gratuitous title;
refund or retention but refund or retention but

JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 153

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(3) By the destruction or total loss of the
thing, or because it goes out of commerce;
(4) By the possession of another, subject to
the provisions of Article 537, if the new
possession has lasted longer than one
year. But the real right of possession is not
lost till after the lapse of ten years. (460a)
Art. 556. The possession of movables is not
deemed lost so long as they remain under the
control of the possessor, even though for the time
being he may not know their whereabouts. (461)
Art. 557. The possession of immovables and of real
rights is not deemed lost, or transferred for
purposes of prescription to the prejudice of third
persons, except in accordance with the provisions
of the Mortgage Law and the Land Registration
laws. (462a)
NOTICE OF LIS PENDENS IS PROPER IN:
1. Action to recover possession of real estate;
2. Action to quiet title thereto;
3. Actions to remove cloud thereon;
4. Action for partition;
5. Any other proceeding in court directly
affecting the title to the land or the use or
occupation thereof or the building thereon.
Art. 558. Acts relating to possession, executed or
agreed to by one who possesses a thing belonging
to another as a mere holder to enjoy or keep it, in
any character, do not bind or prejudice the owner,
unless he gave said holder express authority to do
such acts, or ratifies them subsequently. (463)
Art. 559. The possession of movable property
acquired in good faith is equivalent to a title.
Nevertheless, one who has lost any movable or
has been unlawfully deprived thereof may
recover it from the person in possession of the
same.
If the possessor of a movable lost or which the
owner has been unlawfully deprived, has acquired it
in good faith at a public sale, the owner cannot
obtain its return without reimbursing the price
paid therefor. (464a)
Notes: The unpaid seller cannot recover
possession because he was not unlawfully
deprived of his property.
Property subject of theft can be recovered by the
owner from the possessor thereof without any
obligation to reimburse the holder, except when
holder acquired it in good faith in a public sale.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
2013 Bar Exam Question
IX. Betty entrusted to her agent, Aida, several
pieces of jewelry to be sold on commission
with the express obligation to turn over to
Betty the proceeds of the sale, or to return the
jewelries if not sold in a month's time. Instead
of selling the jewelries, Aida pawned them with
the Tambunting Pawnshop, and used the
money for herself. Aida failed to redeem the
pawned jewelries and after a month, Betty
discovered what Aida had done. Betty brought
criminal charges which resulted in Aida's
conviction for estafa. Betty thereafter filed an
action against Tambunting Pawnshop for the
recovery of the jewelries. Tambunting raised
the defense of ownership, additionally arguing
that it is duly licensed to engage in the
pawnshop and lending business, and that it
accepted the mortgage of the jewelry in good
faith and in the regular course of its business.
If you were the judge, how will you decide the
case? (1%) (A) I will rule in favor of Betty.
My ruling is based on the Civil Code
provision that one who has lost any
movable or has been unlawfully deprived
thereof may recover it from the person in
possession of the same. Tam bunting's
claim of good faith is inconsequential. (B) I
will rule in favor of Betty. Tambunting's claim
of good faith pales into insignificance in light
of the unlawful deprivation of the jewelries.
However, equity dictates that Tambunting
must be reimbursed for the pawn value of the
jewelries. (C) I will rule in favor of Tambunting.
Its good faith takes precedence over the right
of Betty to recover the jewelries.
(D) I will rule in favor of Tambunting. Good
faith is always presumed. Tambunting's lawful
acquisition in the ordinary course of business
coupled with good faith gives it legal right over
the jewelries. SUGGESTED ANSWER: (A) I
will rule in favor of Betty. My ruling is
based on the Civil Code provision that one
who has lost any movable or has been
unlawfully deprived thereof may recover it
from the person in possession of the same.
Tam bunting's claim of good faith is
inconsequential.
Although possession of movable property
acquired in good faith is equivalent to a
title, nevertheless, one who has lost any
movable or has been unlawfully deprived
thereof may recover it from the person in
possession of the same. Betty has been
deprived unlawfully of her jewelries by the
estafa committed by Aida. The pledge of
the said jewelries by Aida to Tambunting
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pawnshop is void because the pledgor is not Pablo sold his car to Alfonso who issued a postdated
the owner (Art 2085 (2), Civil Code). check in full payment therefor. Before the maturity of the
Tambunting’s claim of good faith is check, Alfonso sold the car to Gregorio who later sold it to
Gabriel. When presented for payment, the check issued
inconsequential, because, aside from good by Alfonso was dishonored by the drawee bank for the
faith, Tambunting must prove also that it reason that he, Alfonso, had already closed his account
acquired the jewelries at a public sale in even before he issued his check. Pablo sued to recover
order to be able to retain the jewelries until the car from Gabriel alleging that he (Pablo) had been
reimbursed by Betty the amount of loan unlawfully deprived of it by reason of Alfonso's deception.
including interest (Art 559, Civil Code). The Will the suit prosper?
only exception the law allows is when there SUGGESTED ANSWER:
is acquisition in good faith of the possessor No. The suit will not prosper because Pablo was not
unlawfully deprived of the car although he was unlawfully
at a public sale, in which case, the owner deprived of the price. The perfection of the sale and the
cannot obtain its return without delivery of the car was enough to allow Alfonso to have a
reimbursing the price (Dizon v. Suntay, 47 right of ownership over the car, which can be lawfully
SCRA 160, Sept 29, 1972). transferred to Gregorio. Art. 559 applies only to a person
who is in possession in good faith of the property, and not
to the owner thereof. Alfonso, in the problem, was the
Possession: Unlawfully deprived of property (1998) owner, and, hence, Gabriel acquired the title to the car.
Using a falsified manager's check, Justine, as the buyer, Non-payment of the price in a contract of sale does not
was able to take delivery of a second hand car which she render ineffective the obligation to deliver. The obligation
had just bought from United Car Sales Inc. The sale was to deliver a thing is different from the obligation to pay its
registered with the Land Transportation Office. A week price. EDCA Publishing Co. v. Santos (1990)
later, the seller learned that the check had been
dishonored, but by that time, Justine was nowhere to be
seen. It turned out that Justine had sold the car to Jerico, SUMMARY OF THE RULES ON RECOVERY
the present possessor who knew nothing about the 1. Possessor in bad faith;
falsified check. In a suit by United Car Sales, Inc. against Recovery 2. Possessor in good faith
Jerico for recovery of the car, plaintiff alleges it had been
Without (if owner lost or
unlawfully deprived of its property through fraud and
should, consequently, be allowed to recover it without
Reimbursement unlawfully deprived of the
having to reimburse the defendant for the price the latter property) if acquisition is
had paid. Should the suit prosper? [5%] from a private person.
SUGGESTED ANSWER: Recovery with Possessor acquired the thing
The suit should prosper as to the recovery of the car. Reimbursement is good faith in a public sale
However, since Jerico was not guilty of any fraud and 1. If the possessor had
appears to be an innocent purchaser for value, he should acquired the thing in
be reimbursed for the price he paid. This is without
good faith by purchase in
prejudice to United Car Sales, Inc. right of action against
Justine. As between two innocent parties, the party
merchant’s store, in fairs,
causing the injury should suffer the loss. Therefore, Owner cannot or in markets, in
United Car Sales, Inc. should suffer the loss. recover (even if accordance with the
ALTERNATIVE ANSWER: he offers to Code of Commerce;
Yes, the suit will prosper because the criminal act of reimburse the 2. If the owner is estopped
estafa should be deemed to come within the meaning of holder) from denying the seller’s
unlawful deprivation under Art. 559, Civil Code, as authority to sell;
without it plaintiff would not have parted with the 3. If the possessor had
possession of its car.
obtained the goods
ANOTHER ANSWER:
No, the suit will not prosper. The sale is valid and Jerico
because he was an
is a buyer in good faith. innocent purchaser for
ANOTHER ANSWER: value and holder of a
Under the law on Sales, when the thing sold is delivered negotiable document of
by the seller to the buyer without reservation of title to the goods.
ownership, the ownership is transferred to the buyer.
Therefore in the suit of United Car Sales, Inc. against
Jerico for the recovery of the car, the plaintiff should not
be allowed to recover the car without reimbursing the Art. 560. Wild animals are possessed only while
defendant for the price that the latter paid. (EDCA they are under one's control; domesticated or
Publishing and Distributing Corp. vs. Santos, 184 SCRA tamed animals are considered domestic or tame if
614, April 26, 1990) they retain the habit of returning to the premises of
the possessor. (465)
Transfer of Ownership; Non-Payment of the Price
(1991)

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Art. 561. One who recovers, according to law, a. Whether it be a pure or a
possession unjustly lost, shall be deemed for all conditional usufruct;
purposes which may redound to his benefit, to have b. Number of years it will exist;
enjoyed it without interruption. (466) c. Whether it is in favor of one person
or several, etc.

USUFRUCT EASEMENT
Title VI. – USUFRUCT Object May be real or Involves only
personal property real property
CHAPTER 1 Extent Fruits and all uses Limited to
USUFRUCT IN GENERAL of the property particular use
Cannot be May be
Art. 562. Usufruct gives a right to enjoy the property Coverage constituted on an constituted in
of another with the obligation of preserving its form easement; but it favor of a land
and substance, unless the title constituting it or the may be constituted held in usufruct
law otherwise provides. (467) on a land burdened
with an easement
Usually Not extinguished
Art. 563. Usufruct is constituted by law, by the will
Effect of extinguished by by death of the
of private persons expressed in acts inter vivos or in
death death of the owner of the
a last will and testament, and by prescription. (468)
usufructuary dominant estate
Art. 564. Usufruct may be constituted on the whole
or a part of the fruits of the thing, in favor of one USUFRUCT LEASE
more persons, simultaneously or successively, and
Covers all fruits Generally covers
in every case from or to a certain day, purely or
extent and uses as a only particular or
conditionally. It may also be constituted on a right,
rule specific use
provided it is not strictly personal or intransmissible.
Real right only if
(469)
Is always a real lease is registered
Nature right or is for more that
Art. 565. The rights and obligations of the one year; otherwise,
usufructuary shall be those provided in the title it is only a personal
constituting the usufruct; in default of such title, or in right
case it is deficient, the provisions contained in the Can be created The lessor may or
two following Chapters shall be observed. (470) only by the may not be the
Creator owner, or by a owner as in a sub-
CHARACTERISTICS/ELEMENTS: duly authorized lease or where
1. Essential – those without which, it cannot agent, acting in lessor is only a
be termed usufruct behalf of the usufructuary
a. It is a real right (whether registered owner
or not); As a rule created by
b. It is of a temporary nature or contract.
duration; May be created Exceptions:
c. Its purpose is to enjoy the benefits Origin by law, contract, a. Implied new
and derive all advantages from the last will, or lease under art.
object as a consequence of normal prescription 1670, NCC;
use or exploitation. b. Forced lease
under art. 448,
2. Natural – that which ordinarily is present, NCC
but a contrary stipulation can eliminate it The owner is
because it is not essential; more or less The owner or lessor
a. The obligation of conserving or Cause passive, and he is more or less
preserving the form and substance allows the active, and he
(value) of the thing. usufructuary to makes the lessee
enjoy the thing enjoy
3. Accidental – those which may be present given in usufruct
or absent depending upon the stipulation of The Lessee generally
the parties Repairs usufructuary has has no duty to make
the duty to make or pay for repairs

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____________________________________________________________________________________________________
ordinary repairs ii. Abnormal
The (imperfect/irregular) –
usufructuary The lessee involves consumable things
Taxes pays for the generally pays no
annual charges taxes 5. As to terms or conditions
and taxes on the a. Pure – no term or condition
fruits b. With a term or period
As to Usufructuary The lessee cannot i. Ex die – from a certain day
other may lease the constitute a usufruct ii. In diem – up to a certain
things property to on the property day
another leased. iii. Ex dei in diem – from a
certain day and up to a
KINDS: certain day
1. As to origin— c. With a condition
a. Legal – created by law such as i. Suspensive
usufruct of parents over the ii. Resolutory
properties of their children;
b. Voluntary or conventional –
i. Created by will of the
parties inter vivos; CHAPTER 2
ii. Created mortis causa; RIGHTS OF THE USUFRUCTUARY

c. Mixed – partly created by law and Art. 566. The usufructuary shall be entitled to all the
partly by will; natural, industrial and civil fruits of the property in
d. Prescriptive – is one acquired by a usufruct. With respect to hidden treasure which may
third person through continuous be found on the land or tenement, he shall be
use of the usufruct for the period considered a stranger. (471)
required by law.
Art. 567. Natural or industrial fruits growing at the
2. As to quantity or extent – time the usufruct begins, belong to the usufructuary.
a. As to fruits
i. Total Those growing at the time the usufruct terminates,
ii. Partial belong to the owner.
b. As to extent
i. Universal – if over the
In the preceding cases, the usufructuary, at the
entire patrimony
beginning of the usufruct, has no obligation to
ii. Particular/singular – if only
refund to the owner any expenses incurred; but the
individual things are
owner shall be obliged to reimburse at the
included.
termination of the usufruct, from the proceeds of the
growing fruits, the ordinary expenses of cultivation,
3. As to umber of persons enjoying the
for seed, and other similar expenses incurred by the
right
usufructuary.
a. Simple – if only one usufructuary
enjoys
b. Multiple – if several enjoy The provisions of this article shall not prejudice the
i. Simultaneous rights of third persons, acquired either at the
ii. Successive beginning or at the termination of the usufruct. (472)

4. As to the quality or kinds of objects
involved
a. Usufruct over rights – rights must
not be strictly personal or
intransmissible
b. Usufruct over things
i. Normal (perfect/regular) –
consumable things where
form and substance are
preserved
Art. 568. If the usufructuary has leased the lands or
tenements given in usufruct, and the usufruct
should expire before the termination of the lease,
he or his heirs and successors shall receive only
the proportionate share of the rent that must be
paid by the lessee. (473)
Art. 569. Civil fruits are deemed to accrue daily, and
belong to the usufructuary in proportion to the time
the usufruct may last. (474)

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Art. 570. Whenever a usufruct is constituted on the
right to receive a rent or periodical pension, whether
in money or in fruits, or in the interest on bonds or
securities payable to bearer, each payment due
shall be considered as the proceeds or fruits of
such right.
Whenever it consists in the enjoyment of benefits
accruing from a participation in any industrial or
commercial enterprise, the date of the distribution of
which is not fixed, such benefits shall have the
same character.
In either case they shall be distributed as civil fruits,
and shall be applied in the manner prescribed in the
preceding article. (475)
Art. 571. The usufructuary shall have the right to
enjoy any increase which the thing in usufruct may
acquire through accession, the servitudes
established in its favor, and, in general, all the
benefits inherent therein. (479)
Art. 572. The usufructuary may personally enjoy the
thing in usufruct, lease it to another, or alienate his
right of usufruct, even by a gratuitous title; but all
the contracts he may enter into as such
usufructuary shall terminate upon the expiration of
the usufruct, saving leases of rural lands, which
shall be considered as subsisting during the
agricultural year. (480)
Art. 573. Whenever the usufruct includes things
which, without being consumed, gradually
deteriorate through wear and tear, the usufructuary
shall have the right to make use thereof in
accordance with the purpose for which they are
intended, and shall not be obliged to return them at
the termination of the usufruct except in their
condition at that time; but he shall be obliged to
indemnify the owner for any deterioration they may
have suffered by reason of his fraud or negligence.
(481)
Art. 574. Whenever the usufruct includes things
which cannot be used without being consumed, the
usufructuary shall have the right to make use of
them under the obligation of paying their appraised
value at the termination of the usufruct, if they were
appraised when delivered. In case they were not
appraised, he shall have the right to return at the
same quantity and quality, or pay their current price
at the time the usufruct ceases. (482)
Art. 575. The usufructuary of fruit-bearing trees and
shrubs may make use of the dead trunks, and even
of those cut off or uprooted by accident, under the
obligation to replace them with new plants. (483a)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 576. If in consequence of a calamity or
extraordinary event, the trees or shrubs shall have
disappeared in such considerable number that it
would not be possible or it would be too
burdensome to replace them, the usufructuary may
leave the dead, fallen or uprooted trunks at the
disposal of the owner, and demand that the latter
remove them and clear the land. (484a)
Art. 577. The usufructuary of woodland may enjoy
all the benefits which it may produce according to
its nature.
If the woodland is a copse or consists of timber for
building, the usufructuary may do such ordinary
cutting or felling as the owner was in the habit of
doing, and in default of this, he may do so in
accordance with the custom of the place, as to the
manner, amount and season.
In any case the felling or cutting of trees shall be
made in such manner as not to prejudice the
preservation of the land.
In nurseries, the usufructuary may make the
necessary thinnings in order that the remaining
trees may properly grow.
With the exception of the provisions of the
preceding paragraphs, the usufructuary cannot cut
down trees unless it be to restore or improve some
of the things in usufruct, and in such case shall first
inform the owner of the necessity for the work.
(485)
Art. 578. The usufructuary of an action to recover
real property or a real right, or any movable
property, has the right to bring the action and to
oblige the owner thereof to give him the authority
for this purpose and to furnish him whatever proof
he may have. If in consequence of the enforcement
of the action he acquires the thing claimed, the
usufruct shall be limited to the fruits, the dominion
remaining with the owner. (486)
Art. 579. The usufructuary may make on the
property held in usufruct such useful improvements
or expenses for mere pleasure as he may deem
proper, provided he does not alter its form or
substance; but he shall have no right to be
indemnified therefor. He may, however, remove
such improvements, should it be possible to do so
without damage to the property. (487)
Art. 580. The usufructuary may set off the
improvements he may have made on the property
against any damage to the same. (488)
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Art. 581. The owner of property the usufruct of
which is held by another, may alienate it, but he
cannot alter its form or substance, or do anything
thereon which may be prejudicial to the
usufructuary. (489)
Art. 582. The usufructuary of a part of a thing held
in common shall exercise all the rights pertaining to
the owner thereof with respect to the administration
and the collection of fruits or interest. Should the
co-ownership cease by reason of the division of the
thing held in common, the usufruct of the part
allotted to the co-owner shall belong to the
usufructuary. (490)
RIGHTS OF THE NAKED OWNER:
1. Alienate the thing;
2. Construct any works and make any
improvement provided it does not diminish
value of usufruct or prejudice right of the
usufructuary
LIMITATIONS:
1. Can’t alter the form and substance
2. Can’t do anything prejudicial to
usufructuary
OBLIGATIONS OF THE OWNER:
1. Extraordinary expenses
2. Expenses after renunciation of usufruct
3. Taxes and expenses imposed directly to
capital
4. If property is mortgaged, to pay the loan, if
attached, owner is liable for whatever is lost
by usufructuary
5. If property is expropriated for public use,
owner is obliged to either replace it or pay
legal interest to usufructuary of net
proceeds of the same.
CHAPTER 3
OBLIGATIONS OF THE USUFRUCTUARY
Art. 583. The usufructuary, before entering upon the
enjoyment of the property, is obliged:
(1) To make, after notice to the owner or his
legitimate representative, an inventory of all
the property, which shall contain an
appraisal of the movables and a description
of the condition of the immovables;
(2) To give security, binding himself to fulfill
the obligations imposed upon him in
accordance with this Chapter. (491)
Art. 584. The provisions of No. 2 of the preceding
article shall not apply to the donor who has
reserved the usufruct of the property donated, or to
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
the parents who are usufructuaries of their
children's property, except when the parents
contract a second marriage. (492a)
Art. 585. The usufructuary, whatever may be the
title of the usufruct, may be excused from the
obligation of making an inventory or of giving
security, when no one will be injured thereby. (493)
Art. 586. Should the usufructuary fail to give
security in the cases in which he is bound to give it,
the owner may demand that the immovables be
placed under administration, that the movables be
sold, that the public bonds, instruments of credit
payable to order or to bearer be converted into
registered certificates or deposited in a bank or
public institution, and that the capital or sums in
cash and the proceeds of the sale of the movable
property be invested in safe securities.
The interest on the proceeds of the sale of the
movables and that on public securities and bonds,
and the proceeds of the property placed under
administration, shall belong to the usufructuary.
Furthermore, the owner may, if he so prefers, until
the usufructuary gives security or is excused from
so doing, retain in his possession the property in
usufruct as administrator, subject to the obligation
to deliver to the usufructuary the net proceeds
thereof, after deducting the sums which may be
agreed upon or judicially allowed him for such
administration. (494)
Art. 587. If the usufructuary who has not given
security claims, by virtue of a promise under oath,
the delivery of the furniture necessary for his use,
and that he and his family be allowed to live in a
house included in the usufruct, the court may grant
this petition, after due consideration of the facts of
the case.
The same rule shall be observed with respect to
implements, tools and other movable property
necessary for an industry or vocation in which he is
engaged.
If the owner does not wish that certain articles be
sold because of their artistic worth or because they
have a sentimental value, he may demand their
delivery to him upon his giving security for the
payment of the legal interest on their appraised
value. (495)
Note: the first par. refers to Caucion Juratoria.
Art. 588. After the security has been given by the
usufructuary, he shall have a right to all the
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proceeds and benefits from the day on which, in
accordance with the title constituting the usufruct,
he should have commenced to receive them. (496)
Art. 589. The usufructuary shall take care of the
things given in usufruct as a good father of a family.
(497)
Art. 590. A usufructuary who alienates or leases his
right of usufruct shall answer for any damage which
the things in usufruct may suffer through the fault or
negligence of the person who substitutes him. (498)
Art. 591. If the usufruct be constituted on a flock or
herd of livestock, the usufructuary shall be obliged
to replace with the young thereof the animals that
die each year from natural causes, or are lost due
to the rapacity of beasts of prey.
If the animals on which the usufruct is constituted
should all perish, without the fault of the
usufructuary, on account of some contagious
disease or any other uncommon event, the
usufructuary shall fulfill his obligation by delivering
to the owner the remains which may have been
saved from the misfortune.
Should the herd or flock perish in part, also by
accident and without the fault of the usufructuary,
the usufruct shall continue on the part saved.
Should the usufruct be on sterile animals, it shall be
considered, with respect to its effects, as though
constituted on fungible things. (499a)
Art. 592. The usufructuary is obliged to make the
ordinary repairs needed by the thing given in
usufruct.
By ordinary repairs are understood such as are
required by the wear and tear due to the natural use
of the thing and are indispensable for its
preservation. Should the usufructuary fail to make
them after demand by the owner, the latter may
make them at the expense of the usufructuary.
(500)
Art. 593. Extraordinary repairs shall be at the
expense of the owner. The usufructuary is obliged
to notify the owner when the need for such repairs
is urgent. (501)
Art. 594. If the owner should make the extraordinary
repairs, he shall have a right to demand of the
usufructuary the legal interest on the amount
expended for the time that the usufruct lasts.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Should he not make them when they are
indispensable for the preservation of the thing, the
usufructuary may make them; but he shall have a
right to demand of the owner, at the termination of
the usufruct, the increase in value which the
immovable may have acquired by reason of the
repairs. (502a)
Art. 595. The owner may construct any works and
make any improvements of which the immovable in
usufruct is susceptible, or make new plantings
thereon if it be rural, provided that such acts do not
cause a diminution in the value of the usufruct or
prejudice the right of the usufructuary. (503)
Art. 596. The payment of annual charges and taxes
and of those considered as a lien on the fruits, shall
be at the expense of the usufructuary for all the
time that the usufruct lasts. (504)
Art. 597. The taxes which, during the usufruct, may
be imposed directly on the capital, shall be at the
expense of the owner.
If the latter has paid them, the usufructuary shall
pay him the proper interest on the sums which may
have been paid in that character; and, if the said
sums have been advanced by the usufructuary, he
shall recover the amount thereof at the termination
of the usufruct. (505)
Art. 598. If the usufruct be constituted on the whole
of a patrimony, and if at the time of its constitution
the owner has debts, the provisions of Articles 758
and 759 relating to donations shall be applied, both
with respect to the maintenance of the usufruct and
to the obligation of the usufructuary to pay such
debts.
The same rule shall be applied in case the owner is
obliged, at the time the usufruct is constituted, to
make periodical payments, even if there should be
no known capital. (506)
Art. 599. The usufructuary may claim any matured
credits which form a part of the usufruct if he has
given or gives the proper security. If he has been
excused from giving security or has been able to
give it, or if that given is not sufficient, he shall need
the authorization of the owner, or of the court in
default thereof, to collect such credits.
The usufructuary who has given security may use
the capital he has collected in any manner he may
deem proper. The usufructuary who has not given
security shall invest the said capital at interest upon
agreement with the owner; in default of such
agreement, with judicial authorization; and, in every
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case, with security sufficient to preserve the
integrity of the capital in usufruct. (507)
Art. 600. The usufructuary of a mortgaged
immovable shall not be obliged to pay the debt for
the security of which the mortgage was constituted.
Should the immovable be attached or sold judicially
for the payment of the debt, the owner shall be
liable to the usufructuary for whatever the latter may
lose by reason thereof. (509)
Art. 601. The usufructuary shall be obliged to notify
the owner of any act of a third person, of which he
may have knowledge, that may be prejudicial to the
rights of ownership, and he shall be liable should he
not do so, for damages, as if they had been caused
through his own fault. (511)
Art. 602. The expenses, costs and liabilities in suits
brought with regard to the usufruct shall be borne
by the usufructuary. (512)
CHAPTER 4
EXTINGUISHMENT OF USUFRUCT
Art. 603. Usufruct is extinguished:
(1) By the death of the usufructuary, unless
a contrary intention clearly appears;
(2) By the expiration of the period for which
it was constituted, or by the fulfillment of
any resolutory condition provided in the title
creating the usufruct;
(3) By merger of the usufruct and
ownership in the same person;
(4) By renunciation of the usufructuary;
(5) By the total loss of the thing in usufruct;
(6) By the termination of the right of the
person constituting the usufruct;
(7) By prescription. (513a)
Art. 604. If the thing given in usufruct should be lost
only in part, the right shall continue on the
remaining part. (514)
Art. 605. Usufruct cannot be constituted in favor of
a town, corporation, or association for more than
fifty years. If it has been constituted, and before the
expiration of such period the town is abandoned, or
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
the corporation or association is dissolved, the
usufruct shall be extinguished by reason thereof.
(515a)
Art. 606. A usufruct granted for the time that may
elapse before a third person attains a certain age,
shall subsist for the number of years specified, even
if the third person should die before the period
expires, unless such usufruct has been expressly
granted only in consideration of the existence of
such person. (516)
Usufruct (1997)
On 1 January 1980, Minerva, the owner of a building,
granted Petronila a usufruct over the property until 01
June 1998 when Manuel, a son of Petronila, would have
reached his 30th birthday. Manuel, however, died on 1
June 1990 when he was only 26 years old.
Minerva notified Petronila that the usufruct had been
extinguished by the death of Manuel and demanded that
the
former. Petronila refused to vacate the place on the
ground that the usufruct in her favor would expire only on
1 June 1998 when Manuel would have reached his 30th
birthday and that the death of Manuel before his 30th
birthday did not extinguish the usufruct. Whose
contention should be accepted?
SUGGESTED ANSWER:
Petronila's contention is correct. Under Article 606 of the
Civil Code, a usufruct granted for the time that may
elapse before a third person reaches a certain age shall
subsist for the number of years specified even if the third
person should die unless there is an express stipulation
in the contract that states otherwise. In the case at bar,
there is no express stipulation that the consideration for
the usufruct is the existence of Petronila's son. Thus, the
general rule and not the exception should apply in this
case.
ALTERNATIVE ANSWER:
This is a usufruct which is clearly intended for the benefit
of Manuel until he reaches 30 yrs. of age with Petronila
serving only as a conduit, holding the property in trust for
his benefit. The death of Manuel at the age of 26
therefore, terminated the usufruct.
Art. 607. If the usufruct is constituted on immovable
property of which a building forms part, and the
latter should be destroyed in any manner
whatsoever, the usufructuary shall have a right to
make use of the land and the materials.
The same rule shall be applied if the usufruct is
constituted on a building only and the same should
be destroyed. But in such a case, if the owner
should wish to construct another building, he shall
have a right to occupy the land and to make use of
the materials, being obliged to pay to the
usufructuary, during the continuance of the
usufruct, the interest upon the sum equivalent to the
value of the land and of the materials. (517)
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Art. 608. If the usufructuary shares with the owner The immovable in favor of which the easement is
the insurance of the tenement given in usufruct, the established is called the dominant estate; that
former shall, in case of loss, continue in the which is subject thereto, the servient estate. (530)
enjoyment of the new building, should one be
constructed, or shall receive the interest on the ESSENTIAL QUALITIES OF EASEMENTS:
insurance indemnity if the owner does not wish to 1. Incorporeal;
rebuild. 2. Imposed upon a corporeal property;
3. Confer no right to participation in the profits
Should the usufructuary have refused to contribute arising from it;
to the insurance, the owner insuring the tenement 4. Imposed for the benefit of a corporeal;
alone, the latter shall receive the full amount of the 5. Have 2 distinct tenements; the servient and
insurance indemnity in case of loss, saving always the dominant estate.
the right granted to the usufructuary in the 6. Cause must be perpetual.
preceding article. (518a)
KINDS:
Art. 609. Should the thing in usufruct be 1. According to purpose or the nature of
expropriated for public use, the owner shall be limitation—
obliged either to replace it with another thing of the a. Positive;
same value and of similar conditions, or to pay the b. Negative.
usufructuary the legal interest on the amount of the
indemnity for the whole period of the usufruct. If the 2. According to party given the benefit—
owner chooses the latter alternative, he shall give a. Real (or predial); for the benefit of
security for the payment of the interest. (519) another belonging to a different
owner.
Art. 610. A usufruct is not extinguished by bad use b. Personal; for the benefit of of one
or more persons or community.
of the thing in usufruct; but if the abuse should
cause considerable injury to the owner, the latter
3. According to the manner they are
may demand that the thing be delivered to him,
exercised—
binding himself to pay annually to the usufructuary
a. Continuous;
the net proceeds of the same, after deducting the
NOTE: For legal purposes for
expenses and the compensation which may be
acquisitive prescription, the
allowed him for its administration. (520)
easement of aqueduct is
considered continuous. Easement
Art. 611. A usufruct constituted in favor of several of light and view is also continuous.
persons living at the time of its constitution shall not b. Discontinuous.
be extinguished until death of the last survivor. NOTE: Right of way may be
(521) apparent but is not continuous.

Art. 612. Upon the termination of the usufruct, the
thing in usufruct shall be delivered to the owner,
without prejudice to the right of retention pertaining
to the usufructuary or his heirs for taxes and
extraordinary expenses which should
reimbursed. After the delivery has been made, the
security or mortgage shall be cancelled. (522a)
Title VII. - EASEMENTS OF SERVITUDES
CHAPTER 1
EASEMENTS IN GENERAL
SECTION 1. - Different Kinds of Easements
Art. 613. An easement or servitude is an
encumbrance imposed upon an immovable for the
benefit of another immovable belonging to a
different owner.
4. According to whether or not their existence
is indicated—
a. Apparent;
b. Non-apparent.
be
DOCTRINE OF APPARENT SIGN
Easements are inseparable from the estate to
which they actively or passively pertain. The
existence of apparent sign under art. 624 is
equivalent to title. It is as if there is an implied
contract between the two new owners that the
easement should be constituted, since no one
objected to the continued existence of the windows
(Amor vs. Florentino, 74 Phil. 404).
5. According to the right given—
a. Right ot partially use the servient
estate;
Ex. Right of Way

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____________________________________________________________________________________________________
b. Right to get specific materials or
objects from servient estate;
c. Right to participate in ownership
Ex. Easement of party wall
d. Right to prevent or impede the
neighboring estate from performing
a specific act of ownership.
6. According to source or origin—
a. Law (legal);
b. Will of the owners;
c. Through prescription (only for
continuous AND apparent
easements).
Easement vs. Usufruct (1995)
1. What is easement? Distinguish easement from
usufruct.
2. Can there be (a) an easement over a usufruct? (b) a
usufruct over an easement? (c) an easement over
another easement? Explain.
SUGGESTED ANSWER:
1. An EASEMENT or servitude is an encumbrance
imposed upon an immovable for the benefit of another
immovable belonging to a different owner. (Art. 613,
NCC)
USUFRUCT gives a right to enjoy the property of another
with the obligation of preserving its form and substance,
unless the title constituting it or the law otherwise
provides. (Art. 562, NCC).
ALTERNATIVE ANSWER:
Easement is an encumbrance imposed upon an
immovable for the benefit of another immovable
belonging to a different owner in which case it is called
real or predial easement, or for the benefit of a
community or group of persons in which case it is known
as a personal easement.
The distinctions between usufruct and easement are:
a) Usufruct includes all uses of the property and for
all purposes, including jus fruendi. Easement is limited to
a specific use.
b) Usufruct may be constituted on immovable or
movable property. Easement may be constituted only on
an immovable property.
c) Easement is not extinguished by the death of
the owner of the dominant estate while usufruct is
extinguished by the death of the usufructuary unless a
contrary intention appears.
d) An easement contemplates two (2) estates
belonging to two (2) different owners; a usufruct
contemplates only one property (real or personal)
whereby the usufructuary uses and enjoys the property
as well as its fruits, while another owns the naked title
during the period of the usufruct.
e) A usufruct may be alienated separately from the
property to which it attaches, while an easement cannot
be alienated separately from the property to which it
attaches.
NOTE: It is recommended by the Committee that any two
(2) distinctions should be given full credit.
SUGGESTED ANSWER:
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
2. (a) There can be no easement over a usufruct. Since
an
there is a degree of regularity to indicate continuity of
easement may be constituted only on a corporeal
immovable property, no easement may be constituted on
a usufruct which is not a corporeal right
(b) There can be no usufruct over an easement. While a
usufruct maybe created over a right, such right must have
an existence of its own independent of the property. A
servitude cannot be the object of a usufruct because it
has no existence independent of the property to which It
attaches.
ALTERNATIVE ANSWERS:
There cannot be a usufruct over an easement since an
easement presupposes two (2) tenements belonging to
different persons and the right attaches to the tenement
and not to the owner. While a usufruct gives the
usufructuary a right to use, right to enjoy, right to the
fruits, and right to possess, an easement gives only a
limited use of the servient estate.
However, a usufruct can be constituted over a property
that has in its favor an easement or one burdened with
servitude. The usufructuary will exercise the easement
during the period of usufruct.
(c) There can be no easement over another easement for
the same reason as in (a). An easement, although it is a
real right over an immovable, is not a corporeal right.
There is a Roman maxim which says that: There can be
no servitude over another servitude.
Art. 614. Servitudes may also be established for the
benefit of a community, or of one or more persons
to whom the encumbered estate does not belong.
(531)
Art. 615. Easements may be continuous or
discontinuous, apparent or nonapparent.
Continuous easements are those the use of which
is or may be incessant, without the intervention of
any act of man.
Discontinuous easements are those which are used
at intervals and depend upon the acts of man.
Apparent easements are those which are made
known and are continually kept in view by external
signs that reveal the use and enjoyment of the
same.
Nonapparent easements are those which show no
external indication of their existence. (532)
Art. 616. Easements are also positive or negative.
A positive easement is one which imposes upon the
owner of the servient estate the obligation of
allowing something to be done or of doing it himself,
and a negative easement, that which prohibits the
owner of the servient estate from doing something
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which he could lawfully do if the easement did not
exist. (533)
Art. 617. Easements are inseparable from the
estate to which they actively or passively belong.
(534)
Art. 618. Easements are indivisible. If the servient
estate is divided between two or more persons, the
easement is not modified, and each of them must
bear it on the part which corresponds to him.
If it is the dominant estate that is divided between
two or more persons, each of them may use the
easement in its entirety, without changing the place
of its use, or making it more burdensome in any
other way. (535)
Art. 619. Easements are established either by law
or by the will of the owners. The former are called
legal and the latter voluntary easements. (536)
NO JUDICIAL EASEMENTS
Resultantly, when the court says that an easement
exists, it is not creating one. The court merely
declares the existence of an easement created by
the parties (La Vista Association Inc. vs. CA, 278
SCRA 498).
SECTION 2. - Modes of Acquiring Easements
Art. 620. Continuous and apparent easements
are acquired either by virtue of a title or by
prescription of ten years. (537a)
Art. 621. In order to acquire by prescription the
easements referred to in the preceding article, the
time of possession shall be computed thus: in
positive easements, from the day on which the
owner of the dominant estate, or the person who
may have made use of the easement, commenced
to exercise it upon the servient estate; and in
negative easements, from the day on which the
owner of the dominant estate forbade, by an
instrument acknowledged before a notary public,
the owner of the servient estate, from executing an
act which would be lawful without the easement.
(538a)
Easement; Prescription; Acquisitive
Prescription (2009) No. XI. TRUE or FALSE.
Answer TRUE if the statement is true, or FALSE if
the statement is false. Explain your answer in not
more than two (2) sentences. (C). Acquisitive
prescription of a negative easement runs from the
time the owner of the dominant estate forbids, in a
notarized document, the owner of the servient
estate from executing an act which would be lawful
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
without the easement. (1%) SUGGESTED
ANSWER: True. In negative easements,
acquisitive prescription runs from the moment
the owner of the dominant estate forbade, by an
instrument acknowledged before notary public,
the owner of the servient estate from executing
an act which would be lawful without the
easement (Art. 621, NCC).
Art. 622. Continuous nonapparent easements, and
discontinuous ones, whether apparent or not, may
be acquired only by virtue of a title. (539)
Easement; Effects; Discontinuous Easements;
Permissive Use (2005)
Don was the owner of an agricultural land with no access
to a public road. He had been passing through the land of
Ernie with the latter's acquiescence for over 20 years.
Subsequently, Don subdivided his property into 20
residential lots and sold them to different persons. Ernie
blocked the pathway and refused to let the buyers pass
through his land.
a) Did Don acquire an easement of right of way? Explain.
(2%)
ALTERNATIVE ANSWER:
No, Don did not acquire an easement of right of way. An
easement of right of way is discontinuous in nature — it is
exercised only if a man passes over somebody's land.
Under Article 622 of the Civil Code, discontinuous
easements, whether apparent or not, may only be
acquired by virtue of a title. The Supreme Court, in
Abellana, Sr. v. Court of Appeals (G.R. No. 97039, April
24, 1992), ruled that an easement of right of way being
discontinuous in nature is not acquirable by prescription.
Further, possession of the easement by Don is only
permissive, tolerated or with the acquiescence of Ernie. It
is settled in the case of Cuaycong v. Benedicto (G.R. No.
9989, March 13, 1918) that a permissive use of a road
over the land of another, no matter how long continued,
will not create an easement of way by prescription.
ALTERNATIVE ANSWER:
Yes, Don acquired an easement of right of way. An
easement that is continuous and apparent can be
acquired by prescription and title. According to Professor
Tolentino, an easement of right of way may have a
continuous nature if possession and that if coupled with
an apparent sign, such easement of way may be
acquired by prescription.
ALTERNATIVE ANSWER:
Yes, Ernie could close the pathway on his land. Don has
not acquired an easement of right of way either by
agreement or by judicial grant. Neither did the buyers.
Thus, establishment of a road or unlawful use of the land
of Ernie would constitute an invasion of possessory rights
of the owner, which under Article 429 of the Civil Code
may be repelled or prevented. Ernie has the right to
exclude any person from the enjoyment and disposal of
the land. This is an attribute of ownership that Ernie
enjoys.
ALTERNATIVE ANSWER:
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Yes, Ernie may close the pathway, subject however, to
the rights of the lot buyers. Since there is no access to
the public road, this results in the creation of a legal
easement. The lot buyers have the right to demand that
Ernie grant them a right of way. In turn, they have the
obligation to pay the value of the portion used as a right
of way, plus damages.
c) What are the rights of the lot buyers, if any? Explain.
(2%)
SUGGESTED ANSWER:
Prior to the grant of an easement, the buyers of the
dominant estate have no other right than to compel grant
of easement of right of way. Since the properties of the
buyers are surrounded by other immovables and has no
adequate outlet to a public highway and the isolation is
not due to their acts, buyers may demand an easement of
a right of way provided proper indemnity is paid and the
right of way demanded is the shortest and least
prejudicial to Ernie. (Villanueva v. Velasco, G.R. No.
130845, November 27, 2000).
Easements; Classification (1998)
Distinguish between:
1. Continuous and discontinuous easements; |2%]
2. Apparent and non-apparent easements; and [2%]
3. Positive and negative easements. [1%]
SUGGESTED ANSWER:
1. CONTINUOUS EASEMENTS are those the use of
which is or may be incessant, without the intervention of
any act of man, while DISCONTINUOUS EASEMENTS
are those which are used at intervals and depend upon
the acts of man. (Art. 615, Civil Code)
SUGGESTED ANSWER:
2. APPARENT EASEMENTS are those which are made
known and are continually kept in view by external signs
that reveal the use and enjoyment of the same, while
NON-APPARENT EASEMENTS are those which show
no external indication of their existence. (Art. 615, Civil
Code)
SUGGESTED ANSWER:
3. POSITIVE EASEMENTS are those which impose upon
the owner of the servient estate the obligation of allowing
something to be done or of doing it himself, while
NEGATIVE EASEMENTS are those which prohibit the
owner of the servient estate from doing something which
he could lawfully do if the easement did not exist. (Art.
615. Civil Code)
Art. 623. The absence of a document or proof
showing the origin of an easement which cannot be
acquired by prescription may be cured by a deed of
recognition by the owner of the servient estate or by
a final judgment. (540a)
Art. 624. The existence of an apparent sign of
easement between two estates, established or
maintained by the owner of both, shall be
considered, should either of them be alienated, as a
title in order that the easement may continue
actively and passively, unless, at the time the
ownership of the two estates is divided, the contrary
should be provided in the title of conveyance of
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
either of them, or the sign aforesaid should be
removed before the execution of the deed. This
provision shall also apply in case of the division of a
thing owned in common by two or more persons.
(541a)
Art. 625. Upon the establishment of an easement,
all the rights necessary for its use are considered
granted. (542)
Art. 626. The owner of the dominant estate cannot
use the easement except for the benefit of the
immovable originally contemplated. Neither can he
exercise the easement in any other manner than
that previously established. (n)
SECTION 3. - Rights and Obligations
of the Owners of the Dominant and Servient
Estates
Art. 627. The owner of the dominant estate may
make, at his own expense, on the servient state any
works necessary for the use and preservation of the
servitude, but without altering it or rendering it more
burdensome.
For this purpose he shall notify the owner of the
servient estate, and shall choose the most
convenient time and manner so as to cause the
least inconvenience to the owner of the servient
estate. (543a)
Art. 628. Should there be several dominant estates,
the owners of all of them shall be obliged to
contribute to the expenses referred to in the
preceding article, in proportion to the benefits which
each may derive from the work. Any one who does
not wish to contribute may exempt himself by
renouncing the easement for the benefit of the
others.
If the owner of the servient estate should make use
of the easement in any manner whatsoever, he
shall also be obliged to contribute to the expenses
in the proportion stated, saving an agreement to the
contrary. (544)
Art. 629. The owner of the servient estate cannot
impair, in any manner whatsoever, the use of the
servitude.
Nevertheless, if by reason of the place originally
assigned, or of the manner established for the use
of the easement, the same should become very
inconvenient to the owner of the servient estate, or
should prevent him from making any important
works, repairs or improvements thereon, it may be
changed at his expense, provided he offers another
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place or manner equally convenient and in such a
way that no injury is caused thereby to the owner of
the dominant estate or to those who may have a
right to the use of the easement. (545)
Art. 630. The owner of the servient estate retains
the ownership of the portion on which the easement
is established, and may use the same in such a
manner as not to affect the exercise of the
easement. (n)
SECTION 4. - Modes of Extinguishment of
Easements
Art. 631. Easements are extinguished:
(1) By merger in the same person of the
ownership of the dominant and servient
estates;
(2) By nonuser for ten years; with respect to
discontinuous easements, this period shall
be computed from the day on which they
ceased to be used; and, with respect to
continuous easements, from the day on
which an act contrary to the same took
place;
(3) When either or both of the estates fall
into such condition that the easement
cannot be used; but it shall revive if the
subsequent condition of the estates or
either of them should again permit its use,
unless when the use becomes possible,
sufficient time for prescription has elapsed,
in accordance with the provisions of the
preceding number;
(4) By the expiration of the term or the
fulfillment of the condition, if the easement
is temporary or conditional;
(5) By the renunciation of the owner of the
dominant estate;
(6) By the redemption agreed upon
between the owners of the dominant and
servient estates. (546a)
Art. 632. The form or manner of using the easement
may prescribe as the easement itself, and in the
same way. (547a)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 633. If the dominant estate belongs to several
persons in common, the use of the easement by
any one of them prevents prescription with respect
to the others. (548)
CHAPTER 2
LEGAL EASEMENTS
SECTION 1. - General Provisions
Art. 634. Easements imposed by law have for their
object either public use or the interest of private
persons. (549)
Art. 635. All matters concerning easements
established for public or communal use shall be
governed by the special laws and regulations
relating thereto, and, in the absence thereof, by the
provisions of this Title. (550)
Art. 636. Easements established by law in the
interest of private persons or for private use shall be
governed by the provisions of this Title, without
prejudice to the provisions of general or local laws
and ordinances for the general welfare.
These easements may be modified by agreement
of the interested parties, whenever the law does not
prohibit it or no injury is suffered by a third person.
(551a)
LEGAL EASEMENTS: (KINDS)
1. Easement relating to waters;
2. Easement of right of way;
3. Easement of party wall;
4. Easement of light and view;
5. Drainage of building;
6. Intermediate distances and works for
certain constructions and plantings;
7. Easement against nuisance;
8. Lateral and subjacent support.
SECTION 2. - Easements Relating to Waters
NOTE: Insert pertinent provisions of the Water
Code, particularly arts. 50 and 51.
Article 50, Water Code. Lower estates are obliged to
receive the waters which naturally and without the
intervention of man flow from the higher estate, as well
as the stone or earth which they carry with them.
The owner of the lower estate can not construct works
which will impede this natural flow, unless he provides
an alternative method of drainage; neither can the owner
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of the higher estate make works which will increase this
natural flow.
Article 51, Water Code. The banks of rivers and
streams and the shores of the seas and lakes throughout
their entire length and within a zone of three (3) meters
in urban areas, twenty (20) meters in agricultural areas
and forty (40) meters in forest areas, along their margins
are subject to the easement of public use in the interest of
recreation, navigation, floatage, fishing and salvage. No
person shall be allowed to stay in this zone longer than
what is necessary for recreation, navigation, floatage,
fishing or salvage or to build structures of any kind.
Art. 637. Lower estates are obliged to receive the
waters which naturally and without the intervention
of man descend from the higher estates, as well as
the stones or earth which they carry with them.
The owner of the lower estate cannot construct
works which will impede this easement; neither can
the owner of the higher estate make works which
will increase the burden. (552)
Art. 638. The banks of rivers and streams, even in
case they are of private ownership, are subject
throughout their entire length and within a zone of
three meters along their margins, to the easement
of public use in the general interest of navigation,
floatage, fishing and salvage.
Estates adjoining the banks of navigable or
floatable rivers are, furthermore, subject to the
easement of towpath for the exclusive service of
river navigation and floatage.
If it be necessary for such purpose to occupy lands
of private ownership, the proper indemnity shall first
be paid. (553a)
Art. 639. Whenever for the diversion or taking of
water from a river or brook, or for the use of any
other continuous or discontinuous stream, it should
be necessary to build a dam, and the person who is
to construct it is not the owner of the banks, or
lands which must support it, he may establish the
easement of abutment of a dam, after payment of
the proper indemnity. (554)
Art. 640. Compulsory easements for drawing water
or for watering animals can be imposed only for
reasons of public use in favor of a town or village,
after payment of the proper indemnity. (555)
Art. 641. Easements for drawing water and for
watering animals carry with them the obligation of
the owners of the servient estates to allow passage
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
to persons and animals to the place where such
easements are to be used, and the indemnity shall
include this service. (556)
Art. 642. Any person who may wish to use upon his
own estate any water of which he can dispose shall
have the right to make it flow through the
intervening estates, with the obligation to indemnify
their owners, as well as the owners of the lower
estates upon which the waters may filter or
descend. (557)
Art. 643. One desiring to make use of the right
granted in the preceding article is obliged:
(1) To prove that he can dispose of the
water and that it is sufficient for the use for
which it is intended;
(2) To show that the proposed right of way
is the most convenient and the least
onerous to third persons;
(3) To indemnify the owner of the servient
estate in the manner determined by the
laws and regulations. (558)
Art. 644. The easement of aqueduct for private
interest cannot be imposed on buildings,
courtyards, annexes, or outhouses, or on orchards
or gardens already existing. (559)
Art. 645. The easement of aqueduct does not
prevent the owner of the servient estate from
closing or fencing it, or from building over the
aqueduct in such manner as not to cause the latter
any damage, or render necessary repairs and
cleanings impossible. (560)
Art. 646. For legal purposes, the easement of
aqueduct shall be considered as continuous and
apparent, even though the flow of the water may
not be continuous, or its use depends upon the
needs of the dominant estate, or upon a schedule
of alternate days or hours. (561)
Art. 647. One who for the purpose of irrigating or
improving his estate, has to construct a stop lock or
sluice gate in the bed of the stream from which the
water is to be taken, may demand that the owners
of the banks permit its construction, after payment
of damages, including those caused by the new
easement to such owners and to the other
irrigators. (562)
Art. 648. The establishment, extent, form and
conditions of the servitudes of waters, to which this
section refers, shall be governed by the special
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laws relating thereto insofar as no provision therefor
is made in this Code. (563a)
SECTION 3. - Easement of Right of Way
Art. 649. The owner, or any person who by virtue of
a real right may cultivate or use any immovable,
which is surrounded by other immovables
pertaining to other persons and without adequate
outlet to a public highway, is entitled to demand a
right of way through the neighboring estates, after
payment of the proper indemnity.
Should this easement be established in such a
manner that its use may be continuous for all the
needs of the dominant estate, establishing a
permanent passage, the indemnity shall consist of
the value of the land occupied and the amount of
the damage caused to the servient estate.
In case the right of way is limited to the necessary
passage for the cultivation of the estate surrounded
by others and for the gathering of its crops through
the servient estate without a permanent way, the
indemnity shall consist in the payment of the
damage caused by such encumbrance.
This easement is not compulsory if the isolation of
the immovable is due to the proprietor's own acts.
(564a)
REQUISITES:
1. The dominant estate must be surrounded
by other immovables, and which has no
adequate outlet to a public highway;
2. Payment of proper indemnity;
No indemnity if land is acquired by
and is surrounded by the other
estates of the vendor, exchanger,
or co-owner through—
a. Sale;
b. Exchange;
c. partition
3. Isolation should not be due to proprietor’s
own acts;
4. Right of way claimed is at a point least
prejudicial to the servient estate
Easements; Right of Way; Requisites (1996)
David is the owner of the subdivision in Sta. Rosa,
Laguna, without an access to the highway. When he
applied for a license to establish the subdivision, David
represented that he will purchase a rice field located
between his land and the highway, and develop it into an
access road. But. when the license was already granted,
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
he did not bother to buy the rice field, which remains
unutilized until the present. Instead, he chose to connect
his subdivision with the neighboring subdivision of Nestor,
which has an access to the highway. Nestor allowed him
to do this, pending negotiations on the compensation to
be paid. When they failed to arrive at an agreement,
Nestor built a wall across the road connecting with
David's subdivision. David filed a complaint in court, for
the establishment of an easement of right of way through
the subdivision of Nestor which he claims to be the most
adequate and practical outlet to the highway. 1) What are
the requisites for the establishment of a compulsory
easement of a right of way?
SUGGESTED ANSWER:
Art, 649, NCC. The owner, or any person who by virtue of
a real right may cultivate or use any immovable which is
surrounded by other immovables pertaining to other
persons and without adequate outlet to a public highway,
is entitled to demand a right of way through the
neighboring estates, after payment of the property
indemnity.
Should this easement be established in such a manner
that its use may be continuous for all the needs of the
dominant estate, establishing a permanent passage, the
indemnity shall consist of the value of the land occupied
and the amount of the damage caused to the servient
estate.
In case the right of way is limited to the necessary
passage for the cultivation of the estate surrounded by
others and for the gathering of its crops through the
servient estate without a permanent way, the indemnity
shall consist in the payment of the damage cause by
such encumbrance.
This easement is not compulsory if the isolation of the
immovable is due to the proprietor's own acts. (564a).
The easement of right of way shall be established at the
point least prejudicial to the servient estate, and insofar
as consistent with this rule, where the distance from the
dominant estate to a public highway may be the shortest
(Art. 650, NCC: Vda. de Baltazar v. CA. 245 SCRA 333}
ALTERNATIVE ANSWER:
The requisites for a compulsory easement of right of way
are: (a) the dominant estate is surrounded by other
immovables and is without an adequate outlet to a public
street or highway; (b) proper indemnity must be paid; (c)
the isolation must not be due to the acts of the owner of
the dominant estate; and (d) the right of way claimed is at
a point least prejudicial to the servient estate and, insofar
as is highway is shortest.
2) Is David entitled to a right of way in this case? Why or
why not?
SUGGESTED ANSWER:
No, David is not entitled to the right of way being claimed.
The isolation of his subdivision was due to his own act or
omission because he did not develop into an access road
the rice field which he was supposed to purchase
according to his own representation when he applied for
a license to establish the subdivision (Floro us. Llenado,
244 SCRA713).
Art. 650. The easement of right of way shall be
established at the point least prejudicial to the
servient estate, and, insofar as consistent with this
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rule, where the distance from the dominant estate
to a public highway may be the shortest. (565)
Easements; Right of Way (2000)
The coconut farm of Federico is surrounded by the lands
of Romulo. Federico seeks a right of way through a
portion of the land of Romulo to bring his coconut
products to the market. He has chosen a point where he
will pass through a housing project of Romulo. The latter
wants him to pass another way which is one kilometer
longer. Who should prevail? (5%)
SUGGESTED ANSWER:
Romulo will prevail. Under Article 650 of the New Civil
Code, the easement of right of way shall be established
at the point least prejudicial to the servient estate and
where the distance from the dominant estate to a public
highway is the shortest. In case of conflict, the criterion of
least prejudice prevails over the criterion of shortest
distance. Since the route chosen by Federico will
prejudice the housing project of Romulo, Romulo has the
right to demand that Federico pass another way even
though it will be longer.
Easement; Right of Way (2013) No.VII.In
2005, Andres built a residential house on a lot
whose only access to the national highway was
a pathway crossing Brando's property. Andres
and others have been using this pathway
(pathway A) since 1980. In 2006, Brand0
fenced off his property, thereby blocking
Andres' access to the national highway.
Andres demanded that part of the fence be
removed to maintain his old access route to
the highway (pathway A), but Brando refused,
claiming that there was another available
pathway (pathway B) for ingress and egress to
the highway. Andres countered that pathway
B has defects, is circuitous, and is extremely
inconvenient to use. To settle their dispute,
Andres and Brando hired Damian, a geodetic
and civil engineer, to survey and examine the
two pathways and the surrounding areas, and
to determine the shortest and the least
prejudicial way through the servient estates.
After the survey, the engineer concluded that
pathway B is the longer route and will need
improvements and repairs, but will not
significantly affect the use of Brando's
property. On the other hand, pathway A that
had long been in place, is the shorter route
but would significantly affect the use of
Brando's property. In light of the engineer's
findings and the circumstances of the case,
resolve the parties' right of way dispute. (6%)
SUGGESTED ANSWER:
Andres is not entitled to the easement of
right of way for Pathway A. Pathway B must
be used. The owner of a dominant estate
may validly obtain a compulsory right of
way only after he has established the
existence of four requisites, to wit: (1) The
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(dominant) estate is surrounded by other
immovables and is without adequate outlet
to a public highway; (2) After payment of
the proper indemnity; (3) The isolation was
not due to the proprietor’s own acts; and
(4) The right of way claimed is at a point
least prejudicial to the servient estate, and
insofar as consistent with this rule, where
the distance from the dominant estate to
the public highway maybe the shortest (Art
650, civil Code). However, the Supreme
Court has consistently ruled that in case
both criteria cannot be complied with, the
right of way shall be established at the
point least prejudicial to the servient
estate. The first and fourth requisites are
not complied with. First, there is another
available outlet to the national highway
(Pathway B). Second, the right of way
obtained (Pathway A) is not the least
prejudicial to Brando’s property, as
evidence by the reports of the geodetic and
civil engineer. When there is already an
existing adequate outlet from the dominant
estate to the public highway, even if the
said outlet, for one reason or another, be
inconvenient, the need to open up another
servitude is entirely unjustified (Costabella
Corporation v. CA, G.R. No. 80511, Jan 25,
1991). The rule that the easement of right
of way shall be established at the point
least prejudicial to the servient estate is
controlling (Quimen v. Quimen and CA,
G.R. No. 112331, May 29, 1996). (Note: It is
not clear from the problem if there exists an
easement in favor of the lot belonging to Andres
and if Brando’s lot is burdened as a servient
estate by a right of way as a servient estate. If
there is such an easement burdening Brando’s
lot, was it created as legal easement or as a
voluntary easement. If the used pathway was
only a tolerance, then Brando may close it.
Andres must ask for the constitution of a legal
easement through Brando’s lot by proving the
four requisites required by Art 649 and 65, Civil
Code).
Easement; Right of Way (2010) No.XIII.
Franz was the owner of Lot E which was
surrounded by four (4) lots one of which – Lot
C – he also owned. He promised Ava that if she
bought Lot E, he would give her a right of way
in Lot C. Convinced, Ava bought Lot E and, as
promised, Franz gave her a right of way in Lot
C. Ava cultivated Lot E and used the right of
way granted by Franz. Ava later found gainful
employment abroad. On her return after more
than 10 years, the right of way was no longer
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available to her because Franz had in the
meantime sold Lot C to Julia who had it
fenced. (A). Does Ava have a right to demand
from Julia the activation of her right of way?
Explain. (2.5%) SUGGESTED ANSWER: Yes.
Ava has the right to demand from Julia the
activation of the right of way, for the
following reasons: (1) The easement of the
right of way is a real right which attaches
to, and is inseperable from, the estate to
which it belongs.
(2) The sale of the property includes the
easement or servitude, even if the deed of
sale is silent on the matter.
(3) The vendee of the property in which a
servitude or easement exists cannot close
or put obstructions thereon to prevent the
dominant estate from using it. (4) Ava’s
working abroad for more than ten (10) years
should not be construed as non-user,
because it cannot be implied from the fact
that she or those she left behind to
cultivate the lot no longer use the right of
way. Note: Since a right of way is a
discontinuous easement, the period of ten
years of non-user, shall be computed from
the day it ceased to be used under Act 6341
(2) CC. (5) Renunciation or waiver of an
easement must be specific, clear, express
and made in a public instrument in
accordance of Art 1358 of the New Civil
Code.
ALTERNATIVE ANSWER:
Yes. Ava has the right to demand from
Julia the activation of the right of way. A
voluntary easement of right of way, like
any other contract, could be extinguished
only by mutual agreement or by
renunciation of the owner of the dominant
estate. Also, like any other contract, an
easement is generally effective between
parties, their heirs and assignees, except in
case where the rights and obligations
arising from the contract are not
transmissible by their nature, or by
stipulations or by provision of law
(Unisource Commercial v. Chung, 593 SCRA
530 [2009]).
(B). Assuming Ava opts to demand a right of
way from any of the owners of Lots A, B, and
D, can she do that? Explain. (2.5%)
SUGGESTED ANSWER: Yes. Ava has the
option to demand a right of way on any of
the remaining lots of Franz more so after
Franz sold lot C to Julia. The essential
elements of a legal right of way under Art
649 and 650 of the New Civil Code are
complied with. ALTERNATIVE ANSWER:
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Yes. Ava has the option to demand a right
of way from the other lots. The law
provides that whenever a piece of land
acquired by sale, exchange or partition is
surrounded by other estates of the vendor,
exchanger, or co-owner, he shall be obliged
to grant a right of way without indemnity
(Art 652, NCC). ALTERNATIVE ANSWER: No.
There was merely a promise to Ava that a
right of way shall be granted to her in lot C
if Ava purchase lot E. The promise was not
reduced to writing (Obra v. Baldria, 529
SCRA 621 [2007]). Hence, it was not or
could not have been registered as to warn
buyers of lot C about the existence of the
easement on the property. Not having been
annotated on the TCT to lot C, the buyer
acquired lot C free from such right of way
granted to Ava.
Art. 651. The width of the easement of right of way
shall be that which is sufficient for the needs of the
dominant estate, and may accordingly be changed
from time to time. (566a)
Easements; Right of Way (1993)
Tomas Encarnacion's 3,000 square meter parcel of land,
where he has a plant nursery, is located just behind
Aniceta Magsino's two hectare parcel land. To enable
Tomas to have access to the highway, Aniceta agreed to
grant him a road right of way a meter wide through which
he could pass. Through the years Tomas' business
flourished which enabled him to buy another portion
which enlarged the area of his plant nursery. But he was
still landlocked. He could not bring in and out of his plant
nursery a jeep or delivery panel much less a truck that he
needed to transport his seedlings. He now asked Aniceta
to grant him a wider portion of her property, the price of
which he was willing to pay, to enable him to construct a
road to have access to his plant nursery. Aniceta refused
claiming that she had already allowed him a previous
road right of way. Is Tomas entitled to the easement he
now demands from Aniceta?
SUGGESTED ANSWER:
Art. 651 of the Civil Code provides that the width of the
easement must be sufficient to meet the needs of the
dominant estate, and may accordingly change from time
to time. It is the need of the dominant estate which
determines the width of the passage. These needs may
vary from time
modern conveyances requires widening of the easement.
ALTERNATIVE ANSWER:
The facts show that the need for a wider right of way
arose from the increased production owing to the
acquisition by Tomas of an additional area. Under Art.
626 of the Civil Code, the easement can be used only for
the immovable originally contemplated. Hence, the
increase in width is justified and should have been
granted.
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Art. 652. Whenever a piece of land acquired by
sale, exchange or partition, is surrounded by other
estates of the vendor, exchanger, or co-owner, he
shall be obliged to grant a right of way without
indemnity.
In case of a simple donation, the donor shall be
indemnified by the donee for the establishment of
the right of way. (567a)
Art. 653. In the case of the preceding article, if it is
the land of the grantor that becomes isolated, he
may demand a right of way after paying a
indemnity. However, the donor shall not be liable for
indemnity. (n)
Art. 654. If the right of way is permanent, the
necessary repairs shall be made by the owner of
the dominant estate. A proportionate share of the
taxes shall be reimbursed by said owner to the
proprietor of the servient estate. (n)
Art. 655. If the right of way granted to a surrounded
estate ceases to be necessary because its owner
has joined it to another abutting on a public road,
the owner of the servient estate may demand that
the easement be extinguished, returning what he
may have received by way of indemnity. The
interest on the indemnity shall be deemed to be in
payment of rent for the use of the easement.
The same rule shall be applied in case a new road
is opened giving access to the isolated estate.
In both cases, the public highway must substantially
meet the needs of the dominant estate in order that
the easement may be extinguished. (568a)
CAUSES FOR EXTINGUISHMENT OF
EASEMENTS
1. Expropriation;
2. Permanent impossibility of use;
3. Annulment, rescission, cancellation of the
title constituting the easement;
4. Abandonment of servient estate;
5. Resolution of the right of the grantor to
create the easement;
6. Registration under the Torrens System as
free from encumbrance—
Except:
a. When there is actual knowledge on
the part of the purchaser;
b. Stipulation of the parties.
7. Opening of adequate outlet, in case of right
of way.
8. Merger;
9. Non-user for 10 years;
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
10. Expiration of the term or fulfillment of the
condition (if temporary or conditional);
11. Physical loss of the dominant or servient
estate.
Easements; Right of Way; Inseparability (2001)
Emma bought a parcel of land from Equitable-PCI Bank,
which acquired the same from Felisa, the original owner.
Thereafter, Emma discovered that Felisa had granted a
right of way over the land in favor of the land of Georgina,
which had no outlet to a public highway, but the
easement was not annotated when the servient estate
was registered under the Torrens system. Emma then
filed a complaint for cancellation of the right of way, on
the ground that it had been extinguished by such failure
to annotate. How would you decide the controversy?
(5%)
SUGGESTED ANSWER:
The complaint for cancellation of easement of right of way
must fail. The failure to annotate the easement upon the
title of the servient estate is not among the grounds for
extinguishing an easement under Art. 631 of the Civil
Code. Under Article 617, easements are inseparable from
the estate to which they actively or passively belong.
Once it attaches, it can only be extinguished under Art.
631, and they exist even if they are not stated or
annotated as an encumbrance on the Torrens title of the
servient estate. (II Tolentino 326, 1987 ed.)
ALTERNATIVE ANSWER:
Under Section 44, PD No. 1529, every registered owner
receiving a certificate of title pursuant to a decree of
registration, and every subsequent innocent purchaser for
value, shall hold the same free from all encumbrances
except those noted on said certificate. This rule, however,
admits of exceptions.
Under Act 496, as amended by Act No. 2011, and
Section 4, Act 3621, an easement if not registered shall
remain and shall be held to pass with the land until cutoff
or
extinguished by the registration of the servient estate.
consistent with this rule, where the distance to the street
or However, this provision has been suppressed in
Section 44, PD No. 1529. In other words, the registration
of the servient estate did not operate to cut-off or
extinguish the right of way. Therefore, the complaint for
the cancellation of the right of way should be dismissed.
Art. 656. If it be indispensable for the construction,
repair, improvement, alteration or beautification of a
building, to carry materials through the estate of
another, or to raise therein scaffolding or other
objects necessary for the work, the owner of such
estate shall be obliged to permit the act, after
receiving payment of the proper indemnity for the
damage caused him. (569a)
Art. 657. Easements of the right of way for the
passage of livestock known as animal path, animal
trail or any other, and those for watering places,
resting places and animal folds, shall be governed
by the ordinances and regulations relating thereto,
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and, in the absence thereof, by the usages and
customs of the place.
Without prejudice to rights legally acquired, the
animal path shall not exceed in any case the width
of 75 meters, and the animal trail that of 37 meters
and 50 centimeters.
Whenever it is necessary to establish a compulsory
easement of the right of way or for a watering place
for animals, the provisions of this Section and those
of Articles 640 and 641 shall be observed. In this
case the width shall not exceed 10 meters. (570a)
2011 Bar Exam
(82) The residents of a subdivision have been
using an open strip of land as passage to the
highway for over 30 years. The owner of that
land decided, however, to close it in
preparation for building his house on it. The
residents protested, claiming that they became
owners of the land through acquisitive
prescription, having been in possession of the
same in the concept of owners, publicly,
peacefully, and continuously for more than 30
years. Is this claim correct? (A) No, the
residents have not been in continuous
possession of the land since they merely
passed through it in going to the highway.
(B) No, the owner did not abandon his right to
the property; he merely tolerated his
neighbors’ use of it for passage. (C) Yes,
residents of the subdivision have become
owners by acquisitive prescription. (D) Yes,
community ownership by prescription prevails
over private claims.
SECTION 4. - Easement of Party Wall
Art. 658. The easement of party wall shall be
governed by the provisions of this Title, by the local
ordinances and customs insofar as they do not
conflict with the same, and by the rules of co-
ownership. (571a)
Art. 659. The existence of an easement of party
wall is presumed, unless there is a title, or exterior
sign, or proof to the contrary:
(1) In dividing walls of adjoining buildings
up to the point of common elevation;
(2) In dividing walls of gardens or yards
situated in cities, towns, or in rural
communities;
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(3) In fences, walls and live hedges dividing
rural lands. (572)
Art. 660. It is understood that there is an exterior
sign, contrary to the easement of party wall:
(1) Whenever in the dividing wall of
buildings there is a window or opening;
(2) Whenever the dividing wall is, on one
side, straight and plumb on all its facement,
and on the other, it has similar conditions
on the upper part, but the lower part slants
or projects outward;
(3) Whenever the entire wall is built within
the boundaries of one of the estates;
(4) Whenever the dividing wall bears the
burden of the binding beams, floors and
roof frame of one of the buildings, but not
those of the others;
(5) Whenever the dividing wall between
courtyards, gardens, and tenements is
constructed in such a way that the coping
sheds the water upon only one of the
estates;
(6) Whenever the dividing wall, being built
of masonry, has stepping stones, which at
certain intervals project from the surface on
one side only, but not on the other;
(7) Whenever lands inclosed by fences or
live hedges adjoin others which are not
inclosed.
In all these cases, the ownership of the walls,
fences or hedges shall be deemed to belong
exclusively to the owner of the property or tenement
which has in its favor the presumption based on any
one of these signs. (573)
Art. 661. Ditches or drains opened between two
estates are also presumed as common to both, if
there is no title or sign showing the contrary.
There is a sign contrary to the part-ownership
whenever the earth or dirt removed to open the
ditch or to clean it is only on one side thereof, in
which case the ownership of the ditch shall belong
exclusively to the owner of the land having this
exterior sign in its favor. (574)
Art. 662. The cost of repairs and construction of
party walls and the maintenance of fences, live
hedges, ditches, and drains owned in common,
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shall be borne by all the owners of the lands or
tenements having the party wall in their favor, in
proportion to the right of each.
Nevertheless, any owner may exempt himself from
contributing to this charge by renouncing his part-
ownership, except when the party wall supports a
building belonging to him. (575)
Art. 663. If the owner of a building, supported by a
party wall desires to demolish the building, he may
also renounce his part-ownership of the wall, but
the cost of all repairs and work necessary to
prevent any damage which the demolition may
cause to the party wall, on this occasion only, shall
be borne by him. (576)
Art. 664. Every owner may increase the height of
the party wall, doing at his own expense and paying
for any damage which may be caused by the work,
even though such damage be temporary.
The expenses of maintaining the wall in the part
newly raised or deepened at its foundation shall
also be paid for by him; and, in addition, the
indemnity for the increased expenses which may be
necessary for the preservation of the party wall by
reason of the greater height or depth which has
been given it.
If the party wall cannot bear the increased height,
the owner desiring to raise it shall be obliged to
reconstruct it at his own expense and, if for this
purpose it be necessary to make it thicker, he shall
give the space required from his own land. (577)
Art. 665. The other owners who have not
contributed in giving increased height, depth or
thickness to the wall may, nevertheless, acquire the
right of part-ownership therein, by paying
proportionally the value of the work at the time of
the acquisition and of the land used for its
increased thickness. (578a)
Art. 666. Every part-owner of a party wall may use it
in proportion to the right he may have in the co-
ownership, without interfering with the common and
respective uses by the other co-owners. (579a)
SECTION 5. - Easement of Light and View
Art. 667. No part-owner may, without the consent of
the others, open through the party wall any window
or aperture of any kind. (580)
Art. 668. The period of prescription for the
acquisition of an easement of light and view shall
be counted:
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(1) From the time of the opening of the
window, if it is through a party wall; or
(2) From the time of the formal prohibition
upon the proprietor of the adjoining land or
tenement, if the window is through a wall on
the dominant estate. (n)
Art. 669. When the distances in Article 670 are not
observed, the owner of a wall which is not party
wall, adjoining a tenement or piece of land
belonging to another, can make in it openings to
admit light at the height of the ceiling joints or
immediately under the ceiling, and of the size of
thirty centimeters square, and, in every case, with
an iron grating imbedded in the wall and with a wire
screen.
Nevertheless, the owner of the tenement or
property adjoining the wall in which the openings
are made can close them should he acquire part-
ownership thereof, if there be no stipulation to the
contrary.
He can also obstruct them by constructing a
building on his land or by raising a wall thereon
contiguous to that having such openings, unless an
easement of light has been acquired. (581a)
Art. 670. No windows, apertures, balconies, or other
similar projections which afford a direct view upon
or towards an adjoining land or tenement can be
made, without leaving a distance of two meters
between the wall in which they are made and such
contiguous property.
Neither can side or oblique views upon or towards
such conterminous property be had, unless there
be a distance of sixty centimeters.
The nonobservance of these distances does not
give rise to prescription. (582a)
Art. 671. The distance referred to in the preceding
article shall be measured in cases of direct views
from the outer line of the wall when the openings do
not project, from the outer line of the latter when
they do, and in cases of oblique view from the
dividing line between the two properties. (583)
Art. 672. The provisions of Article 670 are not
applicable to buildings separated by a public way or
alley, which is not less than three meters wide,
subject to special regulations and local ordinances.
(584a)
Art. 673. Whenever by any title a right has been
acquired to have direct views, balconies or
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belvederes overlooking an adjoining property, the
owner of the servient estate cannot build thereon at
less than a distance of three meters to be
measured in the manner provided in Article 671.
Any stipulation permitting distances less than those
prescribed in Article 670 is void. (585a)
SECTION 6. - Drainage of Buildings
Art. 674. The owner of a building shall be obliged to
construct its roof or covering in such manner that
the rain water shall fall on his own land or on a
street or public place, and not on the land of his
neighbor, even though the adjacent land may
belong to two or more persons, one of whom is the
owner of the roof. Even if it should fall on his own
land, the owner shall be obliged to collect the water
in such a way as not to cause damage to the
adjacent land or tenement. (586a)
Art. 675. The owner of a tenement or a piece of
land, subject to the easement of receiving water
falling from roofs, may build in such manner as to
receive the water upon his own roof or give it
another outlet in accordance with local ordinances
or customs, and in such a way as not to cause any
nuisance or damage whatever to the dominant
estate. (587)
Art. 676. Whenever the yard or court of a house is
surrounded by other houses, and it is not possible
to give an outlet through the house itself to the rain
water collected thereon, the establishment of an
easement of drainage can be demanded, giving an
outlet to the water at the point of the contiguous
lands or tenements where its egress may be
easiest, and establishing a conduit for the drainage
in such manner as to cause the least damage to the
servient estate, after payment of the property
indemnity. (583)
SECTION 7. - Intermediate Distances
and Works for Certain Constructions and
Plantings
Art. 677. No constructions can be built or plantings
made near fortified places or fortresses without
compliance with the conditions required in special
laws, ordinances, and regulations relating thereto.
(589)
Art. 678. No person shall build any aqueduct, well,
sewer, furnace, forge, chimney, stable, depository
of corrosive substances, machinery, or factory
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
which by reason of its nature or products is
dangerous or noxious, without observing the
distances prescribed by the regulations and
customs of the place, and without making the
necessary protective works, subject, in regard to
the manner thereof, to the conditions prescribed by
such regulations. These prohibitions cannot be
altered or renounced by stipulation on the part of
the adjoining proprietors.
In the absence of regulations, such precautions
shall be taken as may be considered necessary, in
order to avoid any damage to the neighboring lands
or tenements. (590a)
Art. 679. No trees shall be planted near a tenement
or piece of land belonging to another except at the
distance authorized by the ordinances or customs
of the place, and, in the absence thereof, at a
distance of at least two meters from the dividing line
of the estates if tall trees are planted and at a
distance of at least fifty centimeters if shrubs or
small trees are planted.
Every landowner shall have the right to demand
that trees hereafter planted at a shorter distance
from his land or tenement be uprooted.
The provisions of this article also apply to trees
which have grown spontaneously. (591a)
Art. 680. If the branches of any tree should extend
over a neighboring estate, tenement, garden or
yard, the owner of the latter shall have the right to
demand that they be cut off insofar as they may
spread over his property, and, if it be the roots of a
neighboring tree which should penetrate into the
land of another, the latter may cut them off himself
within his property. (592)
Art. 681. Fruits naturally falling upon adjacent land
belong to the owner of said land. (n)
SECTION 8. - Easement Against Nuisance (n)
Art. 682. Every building or piece of land is subject to
the easement which prohibits the proprietor or
possessor from committing nuisance through noise,
jarring, offensive odor, smoke, heat, dust, water,
glare and other causes.
Art. 683. Subject to zoning, health, police and other
laws and regulations, factories and shops may be
maintained provided the least possible annoyance
is caused to the neighborhood.
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SECTION 9. - Lateral and Subjacent Support (n)
Sec. 684. No proprietor shall make such
excavations upon his land as to deprive any
adjacent land or building of sufficient lateral or
subjacent support.
Art. 685. Any stipulation or testamentary provision
allowing excavations that cause danger to an
adjacent land or building shall be void.
Art. 686. The legal easement of lateral and
subjacent support is not only for buildings standing
at the time the excavations are made but also for
constructions that may be erected.
Art. 687. Any proprietor intending to make any
excavation contemplated in the three preceding
articles shall notify all owners of adjacent lands.
CHAPTER 3
VOLUNTARY EASEMENTS
Art. 688. Every owner of a tenement or piece of
land may establish thereon the easements which he
may deem suitable, and in the manner and form
which he may deem best, provided he does not
contravene the laws, public policy or public order.
(594)
Art. 689. The owner of a tenement or piece of land,
the usufruct of which belongs to another, may
impose thereon, without the consent of the
usufructuary, any servitudes which will not injure
the right of usufruct. (595)
Art. 690. Whenever the naked ownership of a
tenement or piece of land belongs to one person
and the beneficial ownership to another, no
perpetual voluntary easement may be established
thereon without the consent of both owners. (596)
Art. 691. In order to impose an easement on an
undivided tenement, or piece of land, the consent of
all the co-owners shall be required.
The consent given by some only, must be held in
abeyance until the last one of all the co-owners
shall have expressed his conformity.
But the consent given by one of the co-owners
separately from the others shall bind the grantor
and his successors not to prevent the exercise of
the right granted. (597a)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 692. The title and, in a proper case, the
possession of an easement acquired by
prescription shall determine the rights of the
dominant estate and the obligations of the servient
estate. In default thereof, the easement shall be
governed by such provisions of this Title as are
applicable thereto. (598)
Art. 693. If the owner of the servient estate should
have bound himself, upon the establishment of the
easement, to bear the cost of the work required for
the use and preservation thereof, he may free
himself from this obligation by renouncing his
property to the owner of the dominant estate. (599)
Title VIII. - NUISANCE (n)
Art. 694. A nuisance is any act, omission,
establishment, business, condition of property, or
anything else which:
(1) Injures or endangers the health or
safety of others; or
(2) Annoys or offends the senses; or
(3) Shocks, defies or disregards decency or
morality; or
(4) Obstructs or interferes with the free
passage of any public highway or street, or
any body of water; or
(5) Hinders or impairs the use of property.
Art. 695. Nuisance is either public or private. A
public nuisance affects a community or
neighborhood or any considerable number of
persons, although the extent of the annoyance,
danger or damage upon individuals may be
unequal. A private nuisance is one that is not
included in the foregoing definition.
DOCTRINE OF ATTRACTIVE NUISANCE
One who maintains on his premises dangerous
instrumentalities or appliances of a character likely
to attract children in play, and who fails to exercise
ordinary care to prevent children from playing
therewith or resorting thereto, is liable to a child of
tender years who is injured thereby, even if the
child is technically a trespasser in the premises.
REASON: The condition or appliance in question
although its danger is apparent to those of age, is
so enticing or alluring to children of tender years as
to induce them to approach, get on or use it, and
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this attractiveness is an implied invitation to such
children.
APPLICATION TO BODIES OF WATER
The doctrine is generally not applicable to bodies of
water, artificial as well as natural in the absence of
some unusual condition or artificial feature other
than the mere water and its location. Thus, a
swimming pool or pond or reservoir of water is not
considered as attractive nuisance.
2011 Bar Exam Question
(45) Virgilio owned a bare and simple
swimming pool in his garden. MB, a 7-year old
child, surreptitiously entered the garden and
merrily romped around the ledges of the pool.
He accidentally tripped, fell into the pool, and
drowned. MB’s parents sued Virgilio for
damages arising from their child’s death,
premised on the principle of "attractive
nuisance". Is Virgilio liable for the death of
MB? (A) No, the child was 7 years old and
knew the dangers that the pool offered. (B)
Yes, being an attractive nuisance, Virgilio had
the duty to prevent children from coming near
it. (C) No, since the pool was bare and had
no enticing or alluring gadgets, floats, or
devices in it that would attract a 7-year old
child. (D) Yes, since Virgilio did not cover the
swimming pool while not in use to prevent
children from falling into it.
Nuisance; Family House; Not Nuisance per se (2006)
A drug lord and his family reside in a small bungalow
where they sell shabu and other prohibited drugs. When
the police found the illegal trade, they immediately
demolished the house because according to them, it was
a nuisance per se that should be abated. Can this
demolition be sustained? Explain. (5%)
SUGGESTED ANSWER:
No, the demolition cannot be sustained. The house is not
a nuisance per se or at law as it is not an act, occupation,
or structure which is a nuisance at all times and under
any circumstances, regardless of location or
surroundings. A nuisance per se is a nuisance in and of
itself, without regard to circumstances [Tolentino, p. 695,
citing Wheeler v. River Falls Power Co., 215 Ala. 655,
111 So. 907].
Nuisance; Public Nuisance vs. Private Nuisance
(2005)
State with reason whether each of the following is a
nuisance, and if so, give its classification, whether public
or private: Article 694 of the Civil Code defines nuisance
as any act, omission, establishment, business, condition
or property, or anything else which injures or endangers
the health or safety of others, or annoys or offends the
senses, or shocks, defies or disregards decency or
morality or obstructs or interferes with the free passage of
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
any public highway or street or any body of water or
hinders or impairs the use of property.
It is a public nuisance if it affects a community or
neighborhood or any considerable number of persons. It
is a direct encroachment upon public rights or property
which results injuriously to the public. It is a private
nuisance, if it affects only a person or small number of
persons. It violates only private rights.
a) A squatter's hut (1%)
If constructed on public streets or riverbeds, it is a public
nuisance because it obstructs the free use by the public
of said places. (City of Manila v. Garcia, G.R. No. L-
26053, February 21,1967) If constructed on private land,
it is a private nuisance because it hinders or impairs the
use of the property by the owner.
b) A swimming pool (1%)
This is not a nuisance in the absence of any unusual
condition or artificial feature other than the mere water. In
Hidalgo Enterprises v. Balandan (G.R. No. L-3422, June
13, 1952), the Supreme Court ruled that a swimming pool
is but a duplication of nature — thus, could not be
considered as a
(b) The mortgage shall not bind the 1/3 right and
interest nuisance.
c) A house of prostitution (1%)
Irrespective of its location and how its business is
conducted, it is a nuisance since it defies, shocks and
disregards decency and morality. It is a public nuisance
because of its injury to the public.
d) A noisy or dangerous factory in a private land (1%)
If the noise injuriously affects the health and comfort of
ordinary people in the vicinity to an unreasonable extent,
it is a nuisance. It is a public nuisance because there is a
tendency to annoy the public. (Velasco v. Manila Electric
Co., G.R. No. L-18390, August 6, 1971)
e) Uncollected garbage (1%)
It will become a nuisance if it substantially impairs the
comfort and enjoyment of the adjacent occupants. The
annoyance and the smell must be substantial as to
interfere sensibly with the use and enjoyment by persons
of ordinary sensibilities. It is a public nuisance because of
its injury to the public.
Art. 696. Every successive owner or possessor of
property who fails or refuses to abate a nuisance in
that property started by a former owner or
possessor is liable therefor in the same manner as
the one who created it.
Art. 697. The abatement of a nuisance does not
preclude the right of any person injured to recover
damages for its past existence.
Easement; Nuisance; Abatement (2002)
Lauro owns an agricultural land planted mostly with fruit
trees. Hernando owns an adjacent land devoted to his
piggery business, which is two (2) meters higher in
elevation. Although Hernando has constructed a waste
disposal lagoon for his piggery, it is inadequate to contain
the waste water containing pig manure, and it often
overflows and inundates Lauro’s plantation. This has
increased the acidity of the soil in the plantation, causing
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the trees to wither and die. Lauro sues for damages Art. 704. Any private person may abate a public
caused to his plantation. Hernando invokes his right to nuisance which is specially injurious to him by
the benefit of a natural easement in favor of his higher removing, or if necessary, by destroying the thing
estate, which imposes upon the lower estate of Lauro the which constitutes the same, without committing a
obligation to receive the waters descending from the
higher estate. Is Hernando correct? (5%)
breach of the peace, or doing unnecessary injury.
SUGGESTED ANSWER: But it is necessary:
Hernando is wrong. It is true that Lauro’s land is
burdened with the natural easement to accept or receive (1) That demand be first made upon the
the water which naturally and without interruption of man owner or possessor of the property to abate
descends from a higher estate to a lower estate. the nuisance;
However, Hernando has constructed a waste disposal
lagoon for his piggery and it is this waste water that flows
downward to Lauro’s land. Hernando has, thus, (2) That such demand has been rejected;
interrupted the flow of water and has created and is
maintaining a nuisance. Under Act. 697 NCC, abatement (3) That the abatement be approved by the
of a nuisance does not preclude recovery of damages by district health officer and executed with the
Lauro even for the past existence of a nuisance.
assistance of the local police; and
The claim for damages may also be premised in Art.
2191 to time. As Tomas' business grows, the need for
use of (4) NCC. (4) That the value of the destruction does
ANOTHER ANSWER: not exceed three thousand pesos.
Hernando is not correct. Article 637 of the New Civil Code
provides that the owner of the higher estate cannot make
works which will increase the burden on the servient
Art. 705. The remedies against a private nuisance
estate. (Remman Enterprises, Inc. v. CA, 330 SCRA 145 are:
[2000]). The owner of the higher estate may be (1) A civil action; or
compelled to pay damages to the owner of the lower
estate. (2) Abatement, without judicial proceedings.

Art. 706. Any person injured by a private nuisance

Art. 698. Lapse of time cannot legalize any
nuisance, whether public or private.
Art. 699. The remedies against a public nuisance
are:
(1) A prosecution under the Penal Code or
any local ordinance: or
(2) A civil action; or
may abate it by removing, or if necessary, by
destroying the thing which constitutes the nuisance,
without committing a breach of the peace or doing
unnecessary injury. However, it is indispensable
that the procedure for extrajudicial abatement of a
public nuisance by a private person be followed.
Art. 707. A private person or a public official
extrajudicially abating a nuisance shall be liable for
damages:

(3) Abatement, without judicial proceedings. (1) If he causes unnecessary injury; or

Art. 700. The district health officer shall take care (2) If an alleged nuisance is later declared
that one or all of the remedies against a public by the courts to be not a real nuisance.
nuisance are availed of.

Art. 701. If a civil action is brought by reason of the NEGLIGENCE NUISANCE

maintenance of a public nuisance, such action shall Liability attaches
be commenced by the city or municipal mayor. Liability is based on lack regardless of the
of proper care or degree of care or skill
Art. 702. The district health officer shall determine diligence exercised to avoid injury
whether or not abatement, without judicial There is a continuing
proceedings, is the best remedy against a public Act complained of is harm being suffered by
nuisance. already done which the aggrieved party by
caused the injury to the the maintenance of the
plaintiff act or thing which
Art. 703. A private person may file an action on
constitutes the
account of a public nuisance, if it is specially
nuisance;
injurious to himself.
Remedy is action for Abatement without

JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 177

____________________________________________________________________________________________________
damages not abatement judicial proceedings is
allowed to suppress the
nuisance.
Title IX. - REGISTRY OF PROPERTY
Art. 708. The Registry of Property has for its object
the inscription or annotation of acts and contracts
relating to the ownership and other rights over
immovable property. (605)
Art. 709. The titles of ownership, or of other rights
over immovable property, which are not duly
inscribed or annotated in the Registry of Property
shall not prejudice third persons. (606)
Art. 710. The books in the Registry of Property shall
be public for those who have a known interest in
ascertaining the status of the immovables or real
rights annotated or inscribed therein. (607)
Art. 711. For determining what titles are subject to
inscription or annotation, as well as the form,
effects, and cancellation of inscriptions and
annotations, the manner of keeping the books in the
Registry, and the value of the entries contained in
said books, the provisions of the Mortgage Law, the
Land Registration Act, and other special laws shall
govern. (608a)
BOOK III
DIFFERENT MODES OF ACQUIRING
OWNERSHIP
PRELIMINARY PROVISION
Art. 712. Ownership is acquired by occupation and
by intellectual creation.
Ownership and other real rights over property are
acquired and transmitted by law, by donation, by
estate and intestate succession, and in
consequence of certain contracts, by tradition.
They may also be acquired by means of
prescription. (609a)
Occupation vs. Possession (2007) No.I.
Distinguish the following concepts: (A).
Occupation v. possession. (5%) SUGGESTED
ANSWER: Occupation is an original mode of
acquiring ownership (Art. 712, NCC). Things
appropriable by nature which are without
an owner, such as animals that are the
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
object of hunting and fishing, hidden
treasure and abandoned movables, are
acquired by occupation (Art. 713, NCC).
However, ownership of a piece of land
cannot be acquired by occupation (Art. 714,
NCC). ALTERNATIVE ANSWER: Occupation
is a mode of acquiring dominion by the
seizure of corporeal things which have no
owner, with the intention of acquiring the
ownership thereof. It is an original mode of
acquiring ownership upon seizure of a res
nullius by the occupant who has the
intention to become the owner thereof.
Possession, on the other hand, is the
holding of the thing or an enjoyment of a
right. Possession may be the real right of
possession or jus possessiones or it can be
merely the right to possess or jus
possedendi, which are among the basic
rights of ownership. If the real right of
possession is possession in the concept of
owner, but subject to certain limitations, it
may ripen into full ownership of the thing
or property right through acquisitive
prescription depending on whether it is a
case of ordinary or extraordinary
prescription and whether the property is
movable or immovable.
MODES OF ACQUIRING OWNERSHIP:
(OLDTIPS)
1. Occupation;
2. Law;
3. Donation;
4. Tradition;
5. Intellectual creation;
6. Prescription;
7. Succession;
8. In certain instance, marriage under the
FC, where there is no Pre-nuptial
agreement between the parties.
MODES OF EXTINGUISHMENT OF OWNERSHIP:
1. Absolute – all persons are affected
a. Physical loss or destruction;
b. Legal loss or destruction (when it
goes out of commerce of man)
2. Relative – only for certain persons for
others may acquire their ownership
a. Law;
b. Succession;
c. Tradicion as a consequence of
certain contracts;
d. Donation;
e. Abandonment;
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f. Destruction of prior title or right (like
expropriation, rescission,
annulment, fulfillment of resolutory
condition);
g. Prescription.
Title I. - OCCUPATION
Art. 713. Things appropriable by nature which are
without an owner, such as animals that are the
object of hunting and fishing, hidden treasure and
abandoned movables, are acquired by occupation.
(610)
OCCUPATION
Is the acquisition of ownership by seizing corporeal
things that have no owner, made with the intention
of acquiring them, and accomplished according to
legal rules.
Requisites:
1. There must be seizure or apprehension
(the material holding is not required as long
as there is right of disposition);
2. The property seized must be a corporeal
personal property;
3. The property seized must be capable of
appropriation—
a. Abandoned property (res derelicta)
b. Unowned property (res nullius)
4. There must be intent to possess;
5. The requisites or conditions of law must be
complied with.
Art. 714. The ownership of a piece of land cannot
be acquired by occupation. (n)
REASON: Because when the land has no owner, it
pertains to the state. Land that does not belong to
anyone is presumed to be public.
But when the property is private (land) and it is
abandoned, occupation for a certain period of time
may ripen to ownership through acquisitive
prescription.
Note: Stolen property cannot be subject of
occupation.
 Possessor of recently stolen article may be
presumed to be the author of theft.
 Or may be held guilty as fence under PD
1629.
Art. 715. The right to hunt and to fish is regulated by
special laws. (611)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 716. The owner of a swarm of bees shall have
a right to pursue them to another's land,
indemnifying the possessor of the latter for the
damage. If the owner has not pursued the swarm,
or ceases to do so within two consecutive days, the
possessor of the land may occupy or retain the
same. The owner of domesticated animals may
also claim them within twenty days to be counted
from their occupation by another person. This
period having expired, they shall pertain to him who
has caught and kept them. (612a)
Art. 717. Pigeons and fish which from their
respective breeding places pass to another
pertaining to a different owner shall belong to the
latter, provided they have not been enticed by some
artifice or fraud. (613a)
Art. 718. He who by chance discovers hidden
treasure in another's property shall have the right
granted him in article 438 of this Code. (614)
Art. 719. Whoever finds a movable, which is not
treasure, must return it to its previous possessor. If
the latter is unknown, the finder shall immediately
deposit it with the mayor of the city or municipality
where the finding has taken place.
The finding shall be publicly announced by the
mayor for two consecutive weeks in the way he
deems best.
If the movable cannot be kept without deterioration,
or without expenses which considerably diminish its
value, it shall be sold at public auction eight days
after the publication.
Six months from the publication having elapsed
without the owner having appeared, the thing found,
or its value, shall be awarded to the finder. The
finder and the owner shall be obliged, as the case
may be, to reimburse the expenses. (615a)
Note: Failure to return to the proper authorities is
theft under art. 308 (1), RPC.
Art. 720. If the owner should appear in time, he
shall be obliged to pay, as a reward to the finder,
one-tenth of the sum or of the price of the thing
found. (616a)
Title II. - INTELLECTUAL CREATION
NOTE: Intellectual Property is governed by RA
8293, The Intellectual Property Code of the
Philippines.
Refer to Commercial Law Reviewer.
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Art. 721. By intellectual creation, the following
persons acquire ownership:
(1) The author with regard to his literary,
dramatic, historical, legal, philosophical,
scientific or other work;
(2) The composer; as to his musical
composition;
(3) The painter, sculptor, or other artist, with
respect to the product of his art;
(4) The scientist or technologist or any
other person with regard to his discovery or
invention. (n)
Art. 722. The author and the composer, mentioned
in Nos. 1 and 2 of the preceding article, shall have
the ownership of their creations even before the
publication of the same. Once their works are
published, their rights are governed by the
Copyright laws.
The painter, sculptor or other artist shall have
dominion over the product of his art even before it is
copyrighted.
The scientist or technologist has the ownership of
his discovery or invention even before it is patented.
(n)
Art. 723. Letters and other private communications
in writing are owned by the person to whom they
are addressed and delivered, but they cannot be
published or disseminated without the consent of
the writer or his heirs. However, the court may
authorize their publication or dissemination if the
public good or the interest of justice so requires. (n)
Art. 724. Special laws govern copyright and patent.
(429a)
Title III. - DONATION
CHAPTER 1
NATURE OF DONATIONS
Art. 725. Donation is an act of liberality whereby a
person disposes gratuitously of a thing or right in
favor of another, who accepts it. (618a)
CHARACTERISTICS:
1. Unilateral – obligation imposed on the
donor
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
2. Consensual – perfected at time donor
knows of acceptance of the done.
REQUISITES:
1. The donor must have the capacity to make
the donation of a thing or right;
2. He must have donative intent (animus
donandi) or intent to make the donation out
of liberality to benefit the donee;
3. Delivery, whether actual or constructive of
the thing or right donated;
4. Donee must accept or consent to the
donation.
The donation is perfected once the acceptance of
the donation was made known to the donor.
Accordingly, ownership will only revert to the donor
if the resolutory condition is not fulfilled (Quijada vs.
CA, 299 SCRA 695, [1998]).
Requirements of a donation:
1. Subject matter – anything of value;
present property and NOT FUTURE, and
must not impair the legitime.
2. Cause – anything to support a
consideration; generosity, charity, goodwill,
past service (as long as not a demandable
debt).
3. Capacity to donate and dispose and
accept the donation.
4. Form – depends on value of donation.
2011 Bar Exam Question
(7) X and Y were to marry in 3 months.
Meantime, to express his affection, X donated
a house and lot to Y, which donation X wrote
in a letter to Y. Y wrote back, accepting the
donation and took possession of the property.
Before the wedding, however, Y suddenly died
of heart attack. Can Y’s heirs get the property?
(A) No, since the marriage did not take place.
(B) Yes, since all the requisites of a donation of
an immovable are present. (C) No, since the
donation and its acceptance are not in a
public instrument. (D) Yes, since X freely
donated the property to Y who became its
owner.
2011 Bar Exam Question
(9) Lucio executed a simple deed of donation of
P50 million on time deposit with a bank in
favor of A, B, C, D, and E, without indicating
the share of each donee. All the donees
accepted the donation in writing. A, one of the
donees, died. Will B, C, D, and E get A’s share
in the money? (A) Yes, accretion will
automatically apply to the joint-donees in
equal shares. (B) Yes, since the donor’s
intention is to give the whole of P50 million to
the jointdonees in equal shares. (C) No, A"s
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share will revert to the donor because (except onerous
accretion applies only if the joint-donees are donations)
spouses. (D) No, A’s share goes to his heirs
since the donation did not provide for Disposition; Mortis Causa vs. Intervivos;
reversion to donor. Corpse (2009) No. XI. TRUE or FALSE. Answer
TRUE if the statement is true, or FALSE if the
2011 Bar Exam Question statement is false. Explain your answer in not more
(47) Rex, a philanthropist, donated a valuable than two (2) sentences. (E). A person can dispose
lot to the municipality on the condition that it of his corpse through an act intervivos. (1%)
will build a public school on such lot within 2 SUGGESTED ANSWER: False. A persons
years from its acceptance of the donation. The cannot dispose of his corpse through an act
municipality properly accepted the donation inter vivos, i.e., an act to take effect during his
but did not yet build the public school after 2 lifetime. Before his death there is no corpse to
years. Can Rex revoke the donation? (A) Yes, dispose. But he is allowed to do so through an
act mortis causa, i.e., an act to take effect upon
since the donation is subject to a
his death.
resolutory condition which was not
fulfilled. (B) No, but Rex is entitled to recover
2011 Bar Exam Question
the value of the land from the municipality. (C)
(15) Who can make a donation? (A) All
No, the transfer of ownership has been
persons who can enter into contracts and
completed. (D) Yes, the donation is not deemed
dispose of their property. (B) All persons who
made until the suspensive condition has been
are of legal age and suffer from no civil
fulfilled.
interdiction. (C) All persons who can make a
last will and testament. (D) All persons,
whether natural or artificial, who own
KINDS : AS TO EFFECTIVITY property.
1. Inter vivos – takes effect during the lifetime
of the donor.
2. Mortis causa – takes effect upon the death KINDS: AS TO CONSIDERATION
of the donor; 1. Simple – the cause of which is pure
3. Propter Nuptias – made by reason of liberality of the donor in consideration of the
marriage and before its celebration, in donee’s merits
consideration of the same and in favor of 2. Remunatory or compensatory – that
one or both of the spouses. which is given out of gratitude on account
of the services rendered by the done,
provided that they do not constitute a
demandable debt.
Donation Inter Vivos Donation Mortis 3. Modal – that which imposes upon the done
Causa a burden less than the value of the gift.
Disposition and disposition happens 4. Onerous – the value of which is considered
acceptance to take upon the death of the the equivalent of the consideration for
effect during lifetime of donor which it is given and is thus governed by
the donor the rules of obligations and contracts.
Already pertains to the Even if there is a term
done unless there is a of effectivity and
contrary intent effectivity is upon the KINDS: AS TO EFFECTIVITY OR
death of the donor, still EXTINGUISHMENT
entitled to fruits 1. Pure;
Formalities required – Follow law on 2. Conditional;
Follow the law of succession to be valid, 3. With a term or period.
donations and certain and donation must be in
kinds of donation and a form of a will ACCEPTANCE: RULES
law on obligations and a. Acceptance must be made personally or
contracts (suppletory) thru an authorized agent;
Irrevocable at the b. Donation may be made orally or in writing—
instance of the donor; Revocable at the will of Movable:
may be revoked only by the donor i. 5, 000 and below – may be oral or
reasons provided by law written. If oral, it must be with
Revoked only for simultaneous delivery of the
reasons provided by law
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thing/document and acceptance
need not be in writing.
ii. If above 5,000 – must be written
and acceptance must also be
written.
Immovable: must be in a public document
(instrument) and acceptance must also be
in a public instrument (in the same deed of
donation or in any other instrument);
otherwise it is void.
c. Must be made during the lifetime of the
donor and the donee.
Donations; Inter Vivos; Acceptance (1993)
On January 21, 1986, A executed a deed of donation
inter vivos of a parcel of land to Dr. B who had earlier
constructed thereon a building in which researches on the
dreaded disease AIDS were being conducted. The deed,
acknowledged before a notary public, was handed over
by A to Dr. B who received it. A few days after, A flew to
Davao City. Unfortunately, the airplane he was riding
crashed on landing killing him. Two days after the
unfortunate accident. Dr. B, upon advice of a lawyer,
executed a deed acknowledged before a notary public
accepting the donation. Is the donation effective? Explain
your answer.
SUGGESTED ANSWER:
No, the donation is not effective. The law requires that the
separate acceptance of the donee of an immovable must
be done in a public document during the lifetime of the
donor (Art. 746 & 749, Civil Code) In this case, B
executed the deed of acceptance before a notary public
after the donor had already died.
Donations; Perfection (1998)
On July 27, 1997, Pedro mailed in Manila a letter to his
brother, Jose, a resident of Ilollo City, offering to donate a
vintage sports car which the latter had long been wanting
to buy from the former. On August 5, 1997, Jose called
Pedro by cellular phone to thank him for his generosity
and to inform him that he was sending by mail his letter of
acceptance. Pedro never received that letter because it
was never mailed. On August 14, 1997, Pedro received a
telegram from Iloilo informing him that Jose had been
killed in a road accident the day before (August 13, 1997)
1. Is there a perfected donation? [2%]
2. Will your answer be the same if Jose did mail his
acceptance letter but it was received by Pedro in Manila
days after Jose's death? [3%]
SUGGESTED ANSWER:
1. None. There is no perfected donation. Under Article
748 of the Civil Code, the donation of a movable may be
made orally or in writing. If the value of the personal
property donated exceeds five thousand pesos, the
donation and the acceptance shall be made in writing.
Assuming that the value of the thing donated, a vintage
sports car, exceeds P5,000.00 then the donation and the
acceptance must be in writing. In this instance, the
acceptance of Jose was not in writing, therefore, the
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
donation is void. Upon the other hand, assuming that the
sports car costs less than P5,000.00
Code which requires the donation and the acceptance
then the donation maybe oral, but still, the simultaneous
delivery of the car is needed and there being none, the
donation was never perfected.
SUGGESTED ANSWER:
2. Yes, the answer is the same. If Jose's mail containing
his acceptance of the donation was received by Pedro
after the former's death, then the donation is still void
because under Article 734 of the Civil Code, the donation
is perfected the moment the donor knows of the
acceptance by the donee. The death of Jose before
Pedro could receive the acceptance indicates that the
donation was never perfected. Under Article 746
acceptance must be made during the lifetime of both the
donor and the donee.
2012 Bar Exam Question
21. Ernesto donated a mobile phone worth P
32,000 to Hubert orally and delivered the unit
to Hubert who accepted. Which statement is
most accurate? a) The donation is void and
Ernesto may get mobile phone back. b) The
donation is void but Ernesto cannot get the
mobile phone back. c) The donation is voidable
and may be anulled. d) The donation is valid.
Donations; Requisites; Immovable Property
Anastacia purchased a house and lot on installments at a
housing project in Quezon City. Subsequently, she was
employed in California and a year later, she executed a
deed of donation, duly authenticated by the Philippine
Consulate in Los Angeles, California, donating the house
and lot to her friend Amanda. The latter brought the deed
of donation to the owner of the project and discovered
that Anastacia left unpaid installments and real estate
taxes. Amanda paid these so that the donation in her
favor can be registered in the project owner's office. Two
months later, Anastacia died, leaving her mother Rosa as
her sole heir. Rosa filed an action to annul the donation
on the ground that Amanda did not give her consent in
the deed of donation or in a separate public instrument.
Amanda replied that the donation was an onerous one
because she had to pay unpaid installments and taxes;
hence her acceptance may be implied. Who is correct?
(2%)
SUGGESTED ANSWER:
Rosa is correct because the donation is void. The
property donated was an immovable. For such donation
to be valid, Article 749 of the New Civil Code requires
both the donation and the acceptance to be in a public
instrument. There being no showing that Amanda's
acceptance was made in a public instrument, the
donation is void. The contention that the donation is
onerous and, therefore, need not comply with Article 749
for validity is without merit. The donation is not onerous
because it did not impose on Amanda the obligation to
pay the balance on the purchase price or the arrears in
real estate taxes. Amanda took it upon herself to pay
those amounts voluntarily. For a donation to be onerous,
the burden must be imposed by the donor on the donee.
In the problem, there is no such burden imposed by the
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donor on the donee. The donation not being onerous, it
must comply with the formalities of Article 749.
ALTERNATIVE ANSWER:
Neither Rosa nor Amanda is correct. The donation is
onerous only as to the portion of the property
corresponding to the value of the installments and taxes
paid by Amanda.
The portion in excess thereof is not onerous. The
onerous portion is governed by the rules on contracts
which do not require the acceptance by the donee to be
in any form. The onerous part, therefore, is valid. The
portion which is not onerous must comply with Article 749
of the New Civil thereof to be in a public instrument in
order to be valid. The acceptance not being in a public
instrument, the part which is not onerous is void and
Rosa may recover it from Amanda.
2012 Bar Exam Question
46. Donation is perfected from the moment ---
a) the donee accepts the donation.
b) the donor executes the deed of donation. c)
the donor knows of the donee’s acceptance
even if the latter has not received the copy
of the deed of donation. d) the donee
confirms that the donor has learned the
former’s acceptance.
Art. 726. When a person gives to another a thing or
right on account of the latter's merits or of the
services rendered by him to the donor, provided
they do not constitute a demandable debt, or when
the gift imposes upon the donee a burden which is
less than the value of the thing given, there is also a
donation. (619)
Art. 727. Illegal or impossible conditions in simple
and remuneratory donations shall be considered as
not imposed. (n)
Donations; Illegal & Impossible Conditions
(2007) No.I. Distinguish the following
concepts: (B). Illegal and impossible conditions
in a simple donation v. illegal and impossible
conditions in an onerous donation. (5%)
SUGGESTED ANSWER: Illegal and
impossible conditions in a simple donation
are considered as not written. Such
conditions, shall therefore, be disregarded
but the donation remains valid (Art. 727,
NCC). On the other hand, illegal and
impossible donations imposed in an
onerous donation shall annul the donation
(Art. 1183, NCC). This is so, because
onerous donations are governed by the law
on contracts (Art. 733, NCC).
Donations; Effect; illegal & immoral conditions (1997)
Are the effects of illegal and immoral conditions on simple
donations the same as those effects that would follow
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
when such conditions are imposed on donations con
causa onerosa?
SUGGESTED ANSWER:
No, they don't have the same effect. Illegal or impossible
conditions in simple and remuneratory donations shall be
considered as not imposed. Hence the donation is valid.
The donation will be considered as simple or pure. The
condition or mode is merely an accessory disposition,
and its nullity does not affect the donation, unless it
clearly appears that the donor would not have made the
donation without the mode or condition.
Donations con causa onerosa is governed by law on
obligations and contracts, under which an impossible or
Illicit condition annuls the obligation dependent upon the
condition where the condition is positive and suspensive.
If the impossible or illicit condition is negative, it is simply
considered as not written, and the obligation is converted
into a pure and simple one. However, in order that an
illegal condition may annul a contract, the impossibility
must exist at the time of the creation of the obligation; a
supervening impossibility does not affect the existence of
the obligation.
ADDITIONAL ANSWER:
No. In simple or pure donation, only the illegal or
irrevocable, the latter is revocable. In the problem given,
all
impossible condition is considered not written but the
donation remains valid and becomes free from
conditions. The condition or mode being a mere
accessory disposition. Its nullity does not affect the
donation unless it clearly appears that the donor would
not have made the donation without the mode or
condition. On the other hand, onerous donation is
governed by the rules on contracts. Under Article 1183,
Impossible or illegal conditions shall annul the obligation
which depends upon them. In these cases, both the
obligation and the condition are void.
Art. 728. Donations which are to take effect upon
the death of the donor partake of the nature of
testamentary provisions, and shall be governed by
the rules established in the Title on Succession.
(620)
Note: In case of doubt as to the nature of the
donation; it is presumed inter vivos.
BADGES OF MORTIS CAUSA DONATION:
1. Title remains with the donor (full or naked
ownership) and conveyed only upon death;
2. Donor can revoked ad mutuum;
3. Transfer is void if donor survives the done.
Donations; Formalities; Mortis Causa (1990)
B donated to M a parcel of land in 1980. B made the
deed of donation, entitled “Donation Inter Vivos,” in a
public instrument and M accepted the donation in the
same document. It was provided in the deed that the land
donated shall be immediately delivered to M and that M
shall have the right to enjoy the fruits fully. The deed also
provided that B was reserving the right to dispose of said
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land during his (B’s) lifetime, and that M shall not register
the deed of donation until after B’s death. Upon B’s
death, W, B’s widow and sole heir, filed an action for the
recovery of the donated land, contending that the
donation made by B is a donation mortis causa and not a
donation inter vivos. Will said action prosper? Explain
your answer.
SUGGESTED ANSWER: Yes, the action will prosper.
The donation is a donation mortis causa because the
reservation is to dispose of all the property donated and,
therefore, the donation is revocable at will. Accordingly,
the donation requires the execution of a valid will, either
notarial or holographic (Arts 755, 728 NCC).
Donations; Formalities; Mortis Causa (1998)
Ernesto donated in a public instrument a parcel of land to
Demetrio, who accepted it in the same document. It is
there declared that the donation shall take effect
immediately, with the donee having the right to take
possession of the land and receive its fruits but not to
dispose of the land while Ernesto is alive as well as for
ten years following his death. Moreover, Ernesto also
reserved in the same deed his right to sell the property
should he decide to dispose of it at any time - a right
which he did not exercise at all. After his death, Ernesto's
heirs seasonably brought an action to recover the
property, alleging that the donation was void as it did not
comply with the formalities of a will. Will the suit prosper?
[5%]
SUGGESTED ANSWER:
Yes, the suit will prosper as the donation did not comply
with the formalities of a will. In this instance, the fact that
the donor did not intend to transfer ownership or
possession of the donated property to the donee until the
donor's death, would result in a donation mortis causa
and in this kind of disposition, the formalities of a will
should be complied with, otherwise, the donation is void.
In this Instance, donation mortis causa embodied only in
a public instrument without the formalities of a will could
not have transferred ownership of disputed property to
another.
ALTERNATIVE ANSWER:
One of the essential distinctions between a donation inter
vivos and a donation mortis causa is that while the former
is the clauses or conditions mentioned in the deed of
donation, except one, are consistent with the rule of
irrevocability and would have sustained the view that the
donation is inter vivos and therefore valid. The lone
exception is the clause which reserves the donor's right to
sell the property at any time before his death. Such a
reservation has been held to render the donation
revocable and, therefore, becomes a donation mortis
causa (Puig vs. Penqflorida, 15 SCRA 276, at p. 286).
That the right was not exercised is immaterial; its
reservation was an implied recognition of the donor's
power to nullify the donation anytime he wished to do so.
Consequently, it should have been embodied in a last will
and testament. The suit for nullity will thus prosper.
Art. 729. When the donor intends that the
donation shall take effect during the lifetime of
the donor, though the property shall not be
delivered till after the donor's death, this shall
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
be a donation inter vivos. The fruits of the
property from the time of the acceptance of the
donation, shall pertain to the donee, unless the
donor provides otherwise. (n)
Donation; Inter Vivos (2013) No.V. Josefa
executed a deed of donation covering a one-
hectare rice land in favor of her daughter,
Jennifer. The deed specifically provides that:
"For and in consideration of her love and
service Jennifer has shown and given to me, I
hereby freely, voluntarily and irrevocably
donate to her my one-hectare rice land covered
by TCT No. 11550, located in San Fernando,
Pampanga. This donation shall take effect upon
my death." The deed also contained Jennifer's
signed acceptance, and an attached notarized
declaration by Josefa and Jennifer that the
land will remain in Josefa's possession and
cannot be alienated, encumbered, sold or
disposed of while Josefa is still alive. Advise
Jennifer on whether the deed is a donation
inter vivos or mortis causa and explain the
reasons supporting your advice. (8%)
SUGGESTED ANSWER: The donation is a
donation inter vivos. When the donor
intends that the donation shall take effect
during the lifetime of the donor, though the
property shall not be delivered till after the
donor’s death, this shall be a donation inter
vivos (Art. 729, Civil Code). The Civil Code
prefers inter vivos transmissions. Moreover,
mortis causa donations should follow the
formalities of a will (Art. 728, Civil Code).
Here there is no showing that such
formalities were followed. Thus, it is
favorable to Jennifer that the deed is a
donation inter vivos.
Furthermore, what is most significant in
determining the type of donation is the
absence of stipulation that the donor could
revoke the donation; on the contrary, the
deeds expressly declare them to be
“irrevocable,” a quality absolutely
incompatible with the idea of conveyances
mortis causa where revocability is the
essence of the act, to the extent that a
testator cannot lawfully waive or restrict
his right of revocation. The provisions of
the deed of donation which state that the
same will only take effect upon the death of
the donor and that there is a prohibition to
alienate, encumber, dispose, or sell the
same should be harmonized with its
express irrevocability (Austria-Magat v. CA,
G.R. No. 106755, Feb 1, 2002).
ALTERNATIVE ANSWER: The donation is
donation mortis causa. The deed clearly
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states that the donation shall take effect
upon the death of the donor, Josefa. The
donor, moreover, retained ownership of the
subject property as it was declared that the
property cannot be alienated, encumbered,
sold or disposed of while the donor is still
alive. As the donation is in the nature of a
mortis causa disposition, the formalities of
a will should have been complied with
under Art. 728 of the Civil Code, otherwise,
the donation is void and would produce no
effect (The National Treasure of the
Philippines v. Vda. de Meimban, G.R. No. L-
61023, Aug 22, 1984).
Art. 730. The fixing of an event or the imposition
of a suspensive condition, which may take
place beyond the natural expectation of life of
the donor, does not destroy the nature of the
act as a donation inter vivos, unless a contrary
intention appears. (n)
Art. 731. When a person donates something,
subject to the resolutory condition of the
donor's survival, there is a donation inter vivos.
(n)
Donations; Unregistered; Effects; Non-Compliance;
Resolutory Condition (2006)
Spouses Alfredo and Racquel were active members of a
religious congregation. They donated a parcel of land in
favor of that congregation in a duly notarized Deed of
Donation, subject to the condition that the Minister shall
construct thereon a place of worship within 1 year from
the acceptance of the donation. In an affidavit he
executed on behalf of the congregation, the Minister
accepted the donation. The Deed of Donation was not
registered with the Registry of Deeds.
However, instead of constructing a place of worship, the
Minister constructed a bungalow on the property he used
as his residence. Disappointed with the Minister, the
spouses revoked the donation and demanded that he
vacate the premises immediately. But the Minister
refused to leave, claiming that aside from using the
bungalow as his residence, he is also using it as a place
for worship on special occasions. Under the
circumstances, can Alfredo and Racquel evict the
Minister and recover possession of the property? If you
were the couple's counsel, what action you take to protect
the interest of your clients? (5%)
ALTERNATIVE ANSWER:
Yes, Alfredo and Racquel can bring an action for
ejectment against the Minister for recovery of possession
of the property evict the Minister and recover possession
of the property. An action for annulment of the donation,
reconveyance and damages should be filed to protect the
interests of my client. The donation is an onerous
donation and therefore shall be governed by the rules on
contracts. Because there was no fulfillment or compliance
with the condition which is resolutory in character, the
donation may now be revoked and all rights which the
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
donee may have acquired under it shall be deemed lost
and extinguished
(Central Philippine University, G.R. No. 112127, July
17,1995).
ALTERNATIVE ANSWER:
No, an action for ejectment will not prosper. I would
advice Alfredo and Racquel that the Minister, by
constructing a structure which also serves as a place of
worship, has pursued the objective of the donation. His
taking up residence in the bungalow may be regarded as
a casual breach and will not warrant revocation of the
donation. Similarily, therefore, an action for revocation of
the donation will be denied (C. J. Yulo & Sons, Inc. v.
Roman Catholic Bishop, G.R. No. 133705, March 31,
2005; Heirs ofRozendo Sevilla v. De Leon, G.R. No.
149570, March 12,
2004).
Donations; with Resolutory Condition (2003)
In 1950, Dr. Alba donated a parcel of land to Central
University on condition that the latter must establish a
medical college on the land to be named after him. In the
year 2000, the heirs of Dr. Alba filed an action to annul
the donation and for the reconveyance of the property
donated to them for the failure, after 50 years, of the
University to established on the property a medical school
named after their father. The University opposed the
action on the ground of prescription and also because it
had not used the property for some purpose other than
that stated in the donation. Should the opposition of the
University to the action of Dr. Alba’s heirs be sustained?
Explain.
SUGGESTED ANSWER:
The donation may be revoked. The non-established of
the medical college on the donated property was a
resolutory condition imposed on the donation by the
donor. Although the Deed of Donation did not fix the time
for the established of the medical college, the failure of
the donee to establish the medical college after fifty (50)
years from the making of the donation should be
considered as occurrence of the resolutory condition, and
the donation may now be revoked. While the general rule
is that in case the period is not fixed in the agreement of
the parties, the period must be fixed first by the court
before the obligation may be demanded, the period of fifty
(50) years was more than enough time for the donee to
comply with the condition. Hence, in this case, there is no
more need for the court to fix the period because such
procedure with the condition. (Central Philippine
University v. CA. 246 SCRA 511).
ANOTHER SUGGESTED ANSWER:
The donation may not as yet revoked. The establishment
of a medical college is not a resolutory or suspensive
condition but a “charge”, obligation”, or a “mode”. The
non- compliance with the charge or mode will give the
donor the right to revoke the donation within four (4)
years from the time the charge was supposed to have
been complied with, or to enforce the charge by specific
performance within ten (10) years from the time the
cause of action accrued. Inasmuch as the time to
established the medical college has yet default in his
obligation until the period is fixed by order of the court
under Article 1197 of the New Civil Code. Since the
period has not been fixed as yet, the donee is not yet
default, and therefore the donor has no cause of action to
revoke the donation. (Dissenting opinion of Davide, CJ,
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Central Philippine University v. Court of Appeals, 246
SCRA 511 [1995])
Art. 732. Donations which are to take effect inter
vivos shall be governed by the general
provisions on contracts and obligations in all
that is not determined in this Title. (621)
Art. 733. Donations with an onerous cause shall
be governed by the rules on contracts and
remuneratory donations by the provisions of
the present Title as regards that portion which
exceeds the value of the burden imposed. (622)
Art. 734. The donation is perfected from the
moment the donor knows of the acceptance by
the donee. (623)
CHAPTER 2
PERSONS WHO MAY GIVE OR RECEIVE A
DONATION
Art. 735. All persons who may contract and dispose
of their property may make a donation. (624)
QA. Who can make a donation?
A. All persons who can enter into contracts and
dispose of their property.
B. All persons who are of legal age and suffer from
no civil interdiction.
C. All persons who can make a last will and
testament.
D. All persons, whether natural or artificial, who own
property.
Art. 736. Guardians and trustees cannot donate
the property entrusted to them. (n)
Art. 737. The donor's capacity shall be
determined as of the time of the making of the
donation. (n)
Art. 738. All those who are not specially
disqualified by law therefor may accept
donations. (625)
WHO MAY ACCEPT DONATIONS:
1. natural and juridical persons which are not
specifically disqualified by law;
2. minors and other incapacitated—
a. by themselves
i. if pure and simple donation
ii. if it does not require written
acceptance
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
b. by guardian, legal representative, if
needs written acceptance
i. natural guardian – if not more
than 50, 000.
ii. Court appointed guardian –
more than 50, 000.
3. Conceived and unborn child, represented
by person who would have been guardian if
already born.
Art. 739. The following donations shall be void:
(1) Those made between persons who
were guilty of adultery or concubinage at
the time of the donation;
(2) Those made between persons found
guilty of the same criminal offense, in
consideration thereof;
(3) Those made to a public officer or his
wife, descendants and ascendants, by
reason of his office.
In the case referred to in No. 1, the action for
declaration of nullity may be brought by the spouse
of the donor or donee; and the guilt of the donor
and donee may be proved by preponderance of
evidence in the same action. (n)
Art. 740. Incapacity to succeed by will shall be
applicable to donations inter vivos. (n)
NOTE: Connect to art. 1027, NCC.
Art. 741. Minors and others who cannot enter into a
contract may become donees but acceptance shall
be done through their parents or legal
representatives. (626a)
Art. 742. Donations made to conceived and unborn
children may be accepted by those persons who
would legally represent them if they were already
born. (627)
Art. 743. Donations made to incapacitated persons
shall be void, though simulated under the guise of
another contract or through a person who is
interposed. (628)
Art. 744. Donations of the same thing to two or
more different donees shall be governed by the
provisions concerning the sale of the same thing to
two or more different persons. (n)
NOTE: See art. 1544, NCC.
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Art. 745. The donee must accept the donation
personally, or through an authorized person with a
special power for the purpose, or with a general and
sufficient power; otherwise, the donation shall be
void. (630)
Art. 746. Acceptance must be made during the
lifetime of the donor and of the donee. (n)
Art. 747. Persons who accept donations in
representation of others who may not do so by
themselves, shall be obliged to make the
notification and notation of which Article 749
speaks. (631)
Art. 748. The donation of a movable may be made
orally or in writing.
An oral donation requires the simultaneous delivery
of the thing or of the document representing the
right donated.
If the value of the personal property donated
exceeds five thousand pesos, the donation and
the acceptance shall be made in writing, otherwise,
the donation shall be void. (632a)
Donations; Validity; Effectivity; for Unborn Child
(1999)
Elated that her sister who had been married for five years
was pregnant for the first time, Alma donated
P100,000.00 to the unborn child. Unfortunately, the baby
died one hour after delivery. May Alma recover the
P100.000.00 that she had donated to said baby before it
was born considering
not been fixed in the Deed of Donation, the donee is not
that the baby died? Stated otherwise, is the donation
valid and binding? Explain. (5%)
SUGGESTED ANSWER:
The donation is valid and binding, being an act favorable
to the unborn child, but only if the baby had an intra-
uterine life of not less than seven months and provided
there was due acceptance of the donation by the proper
person representing said child. If the child had less than
seven months of intra-uterine life, it is not deemed born
since it died less than 24 hours following its delivery, in
which ease the donation never became effective since
the donee never became a person, birth being
determinative of personality.
ALTERNATIVE ANSWER:
Even if the baby had an intra-uterine life of more than
seven months and the donation was properly accepted, it
would be void for not having conformed with the proper
form. In order to be valid, the donation and acceptance of
personal property exceeding five thousand pesos should
be in writing. (Article 748, par. 3)
Art. 749. In order that the donation of an immovable
may be valid, it must be made in a public document,
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
specifying therein the property donated and the
value of the charges which the donee must satisfy.
The acceptance may be made in the same deed of
donation or in a separate public document, but it
shall not take effect unless it is done during the
lifetime of the donor.
If the acceptance is made in a separate instrument,
the donor shall be notified thereof in an authentic
form, and this step shall be noted in both
instruments. (633)
2010 Bar Exam
(C) A executed a Deed of Donation in favor of
B, a bachelor, covering a parcel of land valued
at P1 million. B was, however, out of the
country at the time. For the donation to be
valid, (1%) (1). B may e-mail A accepting the
donation. (2). The donation may be accepted
by B’s father with whom he lives. (3). B can
accept the donation anytime convenient to
him. (4). B’s mother who has a general power
of attorney may accept the donation for him.
(5). None of the above is sufficient to make B’s
acceptance valid SUGGESTED ANSWER: No.
5 None of the above is sufficient to make
B's acceptance valid . Since the donation
covered an immovable property, the
donation and the acceptance must be in
public document and e-mail is not a public
document. Hence, No.1 is false.
No. 2 and No.4 are both false. The
acceptance by the donee’s father alone or
mother alone, even in a public document, is
not sufficient because the father and
mother did not have a special power of
attorney for the purpose. Under Article 745
(NCC), the donee must accept the donation
personally, or through an authorized person
with a special power of attorney for the
purpose; otherwise, the donation shall be
void. No.3 is also false. B cannot accept the
donation anytime at his convenience.
Under Article 749 NCC, the donee may
accept the donation only during the
lifetime of the donor.
CHAPTER 3
EFFECT OF DONATIONS AND LIMITATIONS
THEREON
Art. 750. The donations may comprehend all the
present property of the donor, or part thereof,
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provided he reserves, in full ownership or in
usufruct, sufficient means for the support of himself,
and of all relatives who, at the time of the
acceptance of the donation, are by law entitled to
be supported by the donor. Without such
reservation, the donation shall be reduced in
petition of any person affected. (634a)
2011 Bar Exam
(80) When the donor gives donations without
reserving sufficient funds for his support or for
the support of his dependents, his donations
are (A) Rescissible, since it results in economic
lesion of more than 25% of the value of his
properties. (B) Voidable, since his consent to
the donation is vitiated by mindless kindness.
(C) Void, since it amounts to wanton
expenditure beyond his means. (D) Reducible
to the extent that the donations impaired
the support due to himself and his
dependents.
Art. 751. Donations cannot comprehend future
property.
By future property is understood anything which the
donor cannot dispose of at the time of the donation.
(635)
Donation vs. Sale (2003)
a) May a person sell something that does not belong to
him? Explain. b) May a person donate something that
does not belong
to him? Explain. 5%
SUGGESTED ANSWER:
(a) Yes, a person may sell something which does not
belong to him. For the sale to be valid, the law does not
require the seller to be the owner of the property at the
time of the sale. (Article 1434, NCC). If the seller cannot
transfer ownership over the thing sold at the time of
delivery because he was not the owner thereof, he shall
be liable for breach of contact.
(b) As a general rule, a person cannot donate something
which he cannot dispose of at the time of the donation
(Article 751, New Civil Code).
Art. 752. The provisions of Article 750
notwithstanding, no person may give or receive, by
way of donation, more than he may give or receive
by will.
The donation shall be inofficious in all that it may
exceed this limitation. (636)
Art. 753. When a donation is made to several
persons jointly, it is understood to be in equal
shares, and there shall be no right of accretion
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
among them, unless the donor has otherwise
provided.
The preceding paragraph shall not be applicable to
donations made to the husband and wife jointly,
between whom there shall be a right of accretion, if
the contrary has not been provided by the donor.
(637)
Art. 754. The donee is subrogated to all the rights
and actions which in case of eviction would pertain
to the donor. The latter, on the other hand, is not
obliged to warrant the things donated, save when
the donation is onerous, in which case the donor
shall be liable for eviction to the concurrence of the
burden.
The donor shall also be liable for eviction or hidden
defects in case of bad faith on his part. (638a)
Art. 755. The right to dispose of some of the things
donated, or of some amount which shall be a
charge thereon, may be reserved by the donor; but
if he should die without having made use of this
right, the property or amount reserved shall belong
to the donee. (639)
Art. 756. The ownership of property may also be
donated to one person and the usufruct to another
or others, provided all the donees are living at the
time of the donation. (640a)
Art. 757. Reversion may be validly established in
favor of only the donor for any case and
circumstances, but not in favor of other persons
unless they are all living at the time of the donation.
Any reversion stipulated by the donor in favor of a
third person in violation of what is provided in the
preceding paragraph shall be void, but shall not
nullify the donation. (614a)
Art. 758. When the donation imposes upon the
donee the obligation to pay the debts of the donor,
if the clause does not contain any declaration to the
contrary, the former is understood to be liable to
pay only the debts which appear to have been
previously contracted. In no case shall the donee
be responsible for the debts exceeding the value of
the property donated, unless a contrary intention
clearly appears. (642a)
Art. 759. There being no stipulation regarding the
payment of debts, the donee shall be responsible
therefor only when the donation has been made in
fraud of creditors.
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The donation is always presumed to be in fraud of
creditors, when at the time thereof the donor did not
reserve sufficient property to pay his debts prior to
the donation. (643)
RULES IN CASE OF DOUBLE DONATIONS:
Priority in time, priority in right.
a. Movable – one who first took possession in
good faith.
b. Immovable – one who recorded in registry
of property in good faith.
 If no inscription, one who first took
possession in good faith
 In the absence thereof, one who
can present the oldest title.
CHAPTER 4
REVOCATION AND REDUCTION OF
DONATIONS
Art. 760. Every donation inter vivos, made by a
person having no children or descendants,
legitimate or legitimated by subsequent marriage, or
illegitimate, may be revoked or reduced as provided
in the next article, by the happening of any of these
events:
(1) If the donor, after the donation, should
have legitimate or legitimated or illegitimate
children, even though they be posthumous;
(2) If the child of the donor, whom the latter
believed to be dead when he made the
donation, should turn out to be living;
(3) If the donor subsequently adopt a minor
child. (644a)
Art. 761. In the cases referred to in the preceding
article, the donation shall be revoked or reduced
insofar as it exceeds the portion that may be freely
disposed of by will, taking into account the whole
estate of the donor at the time of the birth,
appearance or adoption of a child. (n)
Art. 762. Upon the revocation or reduction of the
donation by the birth, appearance or adoption of a
child, the property affected shall be returned or its
value if the donee has sold the same.
If the property is mortgaged, the donor may redeem
the mortgage, by paying the amount guaranteed,
with a right to recover the same from the donee.
When the property cannot be returned, it shall be
estimated at what it was worth at the time of the
donation. (645a)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 763. The action for revocation or reduction on
the grounds set forth in article 760 shall prescribe
after four years from the birth of the first child, or
from his legitimation, recognition or adoption, or
from the judicial declaration of filiation, or from the
time information was received regarding the
existence of the child believed dead.
This action cannot be renounced, and is
transmitted, upon the death of the donor, to his
legitimate and illegitimate children and
descendants. (646a)
Art. 764. The donation shall be revoked at the
instance of the donor, when the donee fails to
comply with any of the conditions which the former
imposed upon the latter.
In this case, the property donated shall be returned
to the donor, the alienations made by the donee
and the mortgages imposed thereon by him being
void, with the limitations established, with regard to
third persons, by the Mortgage Law and the Land
Registration Laws.
This action shall prescribe after four years from the
noncompliance with the condition, may be
transmitted to the heirs of the donor, and may be
exercised against the donee's heirs. (647a)
Donations; Conditions; Revocation (1991)
Spouses Michael and Linda donated a 3-hectare
residential land to the City of Baguio on the condition that
the city government would build thereon a public park
with a boxing arena, the construction of which shall
commence within six (6) months from the date the parties
ratify the donation. The donee accepted the donation and
the title to the property was transferred in its name. Five
years elapsed but the public park with the boxing arena
was never started. Considering the failure of the donee to
comply with the condition of the donation, the donor-
spouses sold the
property to Ferdinand who then sued to recover the land
from the city government. Will the suit prosper?
SUGGESTED ANSWER:
Ferdinand has no right to recover the land. It is true that
the donation was revocable because of breach of the
conditions. But until and unless the donation was
revoked, it remained valid. Hence, Spouses Michael and
Linda had no right to sell the land to Ferdinand. One
cannot give what he does not have. What the donors
should have done first was to have the donation annulled
or revoked. And after that was done, they could validly
have disposed of the land in favor of Ferdinand.
ALTERNATIVE ANSWER:
A. Until the contract of donation has been resolved or
rescinded under Article 1191 of the Civil Code or revoked
under Art. 764 of the Civil Code, the donation stands
effective and valid. Accordingly, the sale made by the
donor to Ferdinand cannot be said to have conveyed title
to Ferdinand, who, thereby, has no cause of action for
recovery of the land acting for and in his behalf.
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B. The donation is onerous, And being onerous, what principally or subsidiarily obliged thereby (Art. 1397,
applies is the law on contracts, and not the law on NCC). As an exception to the rule, it has been held that a
donation (De Luna us. Abrigo, 81 SCRA 150). person not so obliged may nevertheless ask for
Accordingly, the prescriptive period for the filing of such annulment if he is prejudiced in his rights regarding one
an action would be the ordinary prescriptive period for of the contracting parties (DBP us. CA. 96 SCRA 342 and
contacts which may either be six or ten depending upon other cases) and can show the detriment which would
whether it is verbal or written. The filing of the case five result to him from the contract in which he had no
years later is within the prescriptive period and, therefore, intervention, (Teves vs. PHHC, 23 SCRA 1141).
the action can prosper, Such detriment or prejudice cannot be shown by
Alternative Answer: Armando. As a forced heir, Armando's interest in the
The law on donation lays down a special prescriptive property was, at best, a mere expectancy. The sale of the
period in the case of breach of condition, which is four land by his mother did not impair any vested right. The
years from non-compliance thereof (Article 764 Civil fact remains that the premature sale made by his mother
Code). Since the action has prescribed, the suit will not (premature because only half of the period of the ban had
prosper, elapsed) was not voidable at all, none of the vices of
consent under Art. 139 of the NCC being present. Hence,
the motion to dismiss should be granted.
Donations; Condition; Capacity to Sue (1996)
Sometime in 1955, Tomas donated a parcel of land to his
stepdaughter Irene, subject to the condition that she may Art. 765. The donation may also be revoked at
not sell, transfer or cede the same for twenty years.
Shortly thereafter, he died. In 1965, because she needed
the instance of the donor, by reason of
money for medical expenses, Irene sold the land to ingratitude in the following cases:
Conrado. The following year, Irene died, leaving as her
sole heir a son by the name of Armando. When Armando (1) If the donee should commit some
learned that the land which he expected to inherit had offense against the person, the honor or the
been sold by Irene to Conrado, he filed an action against property of the donor, or of his wife or
the latter for annulment of the sale, on the ground that it
children under his parental authority;
violated the restriction imposed by Tomas. Conrado filed
a motion to dismiss, on the ground that Armando did not
have the legal capacity to sue. If you were the Judge, (2) If the donee imputes to the donor any
how will you rule on this motion to dismiss? Explain. criminal offense, or any act involving moral
SUGGESTED ANSWER: turpitude, even though he should prove it,
As judge, I will grant the motion to dismiss. Armando has unless the crime or the act has been
no personality to bring the action for annulment of the committed against the donee himself, his
sale to Conrado. Only an aggrieved party to the contract
wife or children under his authority;
may bring the action for annulment thereof (Art. 1397.
NCC). While Armando is heir and successor-in-interest of
his mother (Art. 1311, NCC), he [standing in place of his (3) If he unduly refuses him support when
mother) has no personality to annul the contract. Both are the donee is legally or morally bound to
not aggrieved parties on account of their own violation of give support to the donor. (648a)
the condition of, or restriction on, their ownership
imposed by the donation. Only the donor or his heirs
would have the personality to bring an action to revoke a NON-
donation for violation of a condition thereof or a restriction BIRTH OF FULFILLMEN INGRATITUD
thereon. (Garrido u. CA, 236 SCRA 450). Consequently, CHILD T OF A E
while the donor or his heirs were not parties to the sale, CONDITION
they have the right to annul the contract of sale because Ipso jure
their rights are prejudiced by one of the contracting revocation, no
parties thereof [DBP v. CA, 96 SCRA 342; Teves vs. need for court Needs court Needs court
PHHC. 23 SCRA 114]. Since Armando is neither the
action. Court action action
donor nor heir of the donor, he has no personality to bring
the action for annulment. decision is
ALTERNATIVE ANSWER: merely
As judge, I will grant the motion to dismiss. Compliance declaratory
with a condition imposed by a donor gives rise to an Extent: portions Extent: whole
action to revoke the donation under Art. 764, NCC. which may portion but Extent: whole
However, the right of action belongs to the donor. Is impair legitime court may rule portion
transmissible to his heirs, and may be exercised against of heirs partial returned
the donee's heirs. Since Armando is an heir of the donee,
revocation
not of the donor, he has no legal capacity to sue for
revocation of the donation. Although he is not seeking
only
such revocation but an annulment of the sale which his Alienation/mortg
mother, the donee, had executed in violation of the ages done prior
condition imposed by the donor, an action for annulment to the recording
of a contract may be brought only by those who are in the RoD: Prior ones are

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____________________________________________________________________________________________________
If already sold or Alienations/mo valid; demand The value of said property shall be fixed as of the
cannot be rtgages value of time of the donation. (650)
returned – the imposed are property when
value must be void unless alienated and Art. 768. When the donation is revoked for any of
returned registered with can’t be the causes stated in Article 760, or by reason of
If mortgaged – the RoD recovered or ingratitude, or when it is reduced because it is
donor may redeem from inofficious, the donee shall not return the fruits
redeem the 3rd persons except from the filing of the complaint.
mortgage with
the right to If the revocation is based upon noncompliance with
recover from the any of the conditions imposed in the donation, the
donee donee shall return not only the property but also the
Fruits to be Return the Fruits to be fruits thereof which he may have received after
returned at filing property and returned at having failed to fulfill the condition. (651)
of action for the fruits filing of
revocation complaint
Art. 769. The action granted to the donor by reason
Prescription is
of ingratitude cannot be renounced in advance. This
Prescription of Prescription is 1 years from
action prescribes within one year, to be counted
action is 4 years 4 years from knowledge of
from the time the donor had knowledge of the fact
from birth non-fulfillment fact and it was
and it was possible for him to bring the action. (652)
of condition possible for
him to bring
action Art. 770. This action shall not be transmitted to the
Right of action heirs of the donor, if the latter did not institute the
Right of action is at instance of Heirs can’t file same, although he could have done so, and even if
transmitted to donor but may action he should die before the expiration of one year.
the heirs be transmitted
to heirs. Neither can this action be brought against the heir
Action extends Action does GR: cannot of the donee, unless upon the latter's death the
to donee’s heirs not extend to extend to complaint has been filed. (653)
donee’s heirs donees heirs
EXCEPTION to the rule on Intransmissibility of
Action cannot Action cannot Action cannot Action with regard to revocation due to
be renounced be renounced be renounced ingratitude:
in advance in advance Personal to the donor; GR is heir cannot institute if
donor did not institute.
2011 Bar Exam
(98) What is the prescriptive period for filing Heirs can file in the following cases—
an action for revocation of a donation based on 1. Donor has instituted proceedings but dies
acts of ingratitude of the donee? (A) 5 years before bringing civil action for revocation;
from the perfection of the donation. (B) 1 year 2. Donor already instituted proceedings but
from the perfection of the donation. (C) 4 dies, during pendency, heirs can substitute;
years from the perfection of the donation. (D) 3. Donee killed the donor or his ingratitude
Such action does not prescribe. caused the death of the donor;
4. Donor died without having known of the
ingratitude done;
Art. 766. Although the donation is revoked on 5. Criminal action filed but abated by death.
account of ingratitude, nevertheless, the alienations
and mortgages effected before the notation of the Can only make heirs of donee liable if complaint
complaint for revocation in the Registry of Property was already filed when donee died.
shall subsist.
Later ones shall be void. (649) Art. 771. Donations which in accordance with the
provisions of Article 752, are inofficious, bearing in
Art. 767. In the case referred to in the first mind the estimated net value of the donor's property
paragraph of the preceding article, the donor shall at the time of his death, shall be reduced with
have a right to demand from the donee the value of regard to the excess; but this reduction shall not
property alienated which he cannot recover from prevent the donations from taking effect during the
third persons, or the sum for which the same has life of the donor, nor shall it bar the donee from
been mortgaged. appropriating the fruits.

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____________________________________________________________________________________________________
For the reduction of donations the provisions of this inheritance either by will or by
Chapter and of Articles 911 and 912 of this Code operation of law.
shall govern. (654) b. Devisees or Legatees – persons to
whom gifts of real or personal
Art. 772. Only those who at the time of the donor's property respectively given by
death have a right to the legitime and their heirs virtue of a will.
and successors in interest may ask for the
reduction of inofficious donations. 3. Death of the person – However, a person
may be presumed dead for certain
purposes like that of opening of his estate
Those referred to in the preceding paragraph
for succession. But succession in this case
cannot renounce their right during the lifetime of the
is merely provisional. There is always a
donor, either by express declaration, or by
chance that the absentee may be alive.
consenting to the donation.
4. Inheritance – the subject matter of
succession which includes:
The donees, devisees and legatees, who are not a. Property and transmissible rights
entitled to the legitime and the creditors of the and obligations;
deceased can neither ask for the reduction nor avail b. Existing at the time of his death;
themselves thereof. (655a) c. And those which have accrued
thereto since the opening of
2012 Bar Exam Question succession.
45. The following cannot ask for the reduction
of inofficious donation, except: a) Creditors of
the deceased b) Devisees or legatees c) RIGHTS EXTINGUISHED BY DEATH
Compulsory heirs of the donor d) The 1. Support;
surviving spouse of the donee. 2. Usufruct;
3. Those arising from personal consideration;
4. Personal easements;
Art. 773. If, there being two or more donations, the 5. Partnership rights;
disposable portion is not sufficient to cover all of 6. Agency;
them, those of the more recent date shall be 7. Life annuity.
suppressed or reduced with regard to the excess.
(656) SUCCESSION INHERITANCE
Refers to the legal Refers to the
mode by which universality or entirety
THE LAW ON inheritance is
transmitted to the
of the property, rights
and obligations of a

SUCCESSION
persons entitled to it person who died

2012 Bar Exam Question

39. The following are the limitations on the
right of ownership imposed by the owner
himself, except: a) Will/Succession b)
Title IV. - SUCCESSION Mortgage c) Pledge d) Lease

CHAPTER 1 2012 Bar Exam Question

GENERAL PROVISIONS
Art. 774. Succession is a mode of acquisition by
virtue of which the property, rights and obligations
to the extent of the value of the inheritance, of a
person are transmitted through his death to another
or others either by his will or by operation of law. (n)
ELEMENTS OF SUCCESSION:
1. Decedent;
2. Successors;
a. Heirs – those who are called to the
whole or an aliquot portion of the
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
92. The following rights are extinguished by
death, except: a) Legal support b) Parental
authority c) Right to inherit d) Agency
Art. 775. In this Title, "decedent" is the general term
applied to the person whose property is transmitted
through succession, whether or not he left a will. If
he left a will, he is also called the testator. (n)
Art. 776. The inheritance includes all the property,
rights and obligations of a person which are not
extinguished by his death. (659)
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Art. 777. The rights to the succession are
transmitted from the moment of the death of the
decedent. (657a)
Art. 778. Succession may be:
(1) Testamentary;
(2) Legal or intestate; or
(3) Mixed. (n)
Art. 779. Testamentary succession is that which
results from the designation of an heir, made in a
will executed in the form prescribed by law. (n)
Art. 780. Mixed succession is that effected partly by
will and partly by operation of law. (n)
Art. 781. The inheritance of a person includes not
only the property and the transmissible rights and
obligations existing at the time of his death, but also
those which have accrued thereto since the
opening of the succession. (n)
Art. 782. An heir is a person called to the
succession either by the provision of a will or by
operation of law.
Devisees and legatees are persons to whom gifts of
real and personal property are respectively given by
virtue of a will. (n)
KINDS OF HEIRS:
1. Compulsory – those who succeed by force
of law to some portion of the inheritance, in
an amount predetermined by law, of which
they cannot be deprived by the testator,
except by a valid disinheritance.
2. Voluntary or Testamentary – those who
are instituted by the testator in his will, to
succeed to the portion of the inheritance of
which the testator can freely dispose.
3. Legal or Intestate – those who succeed to
the estate of the decedent who dies without
a valid will, or to portion of such estate not
disposed of by will.
CHAPTER 2
TESTAMENTARY SUCCESSION
SECTION 1. - Wills
SUBSECTION 1. - Wills in General
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 783. A will is an act whereby a person is
permitted, with the formalities prescribed by law, to
control to a certain degree the disposition of this
estate, to take effect after his death. (667a)
ELEMENTS:
1. It is an act;
2. Whereby a person is permitted;
3. With the formalities prescribed by law;
4. To control to a certain degree;
5. The disposition of his estate;
6. To take effect after his death.
2012 Bar Exam Question
90. The requisites of succession are as follows,
except: a) Death of decedent b) Transmissible
estate c) Existence and capacity of successor,
designated by decedent or law d) Payment of
Taxes
2012 Bar Exam Question
91. The characteristics of succession are as
follows, except: a) It is a legal contract. b)
Only property, rights and obligations to the
extent of the value of the inheritance are
transmitted. c) The transmission takes place
only at the time of death. d) The transmission
takes place either by will or by operation of
law.
KINDS OF WILL:
1. Notarial – an ordinary or attested will;
2. Holographic will – a handwritten will.
Requisites common to both:
1. Must be in writing; and
2. In a language or dialect known to the
testator.
CHARACTERISTICS OF A WILL:
1. Unilateral;
2. Strictly personal act;
3. Free and voluntary act;
4. Formal and solemn act;
5. Act mortis causa;
6. Ambulatory and revocable during the
testator’s lifetime;
7. Individual act – joint wills are void.
Art. 784. The making of a will is a strictly personal
act; it cannot be left in whole or in part of the
discretion of a third person, or accomplished
through the instrumentality of an agent or attorney.
(670a)
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Art. 785. The duration or efficacy of the designation
of heirs, devisees or legatees, or the determination
of the portions which they are to take, when
referred to by name, cannot be left to the discretion
of a third person. (670a)
Art. 786. The testator may entrust to a third person
the distribution of specific property or sums of
money that he may leave in general to specified
classes or causes, and also the designation of the
persons, institutions or establishments to which
such property or sums are to be given or applied.
(671a)
Art. 787. The testator may not make a testamentary
disposition in such manner that another person has
to determine whether or not it is to be operative. (n)
Art. 788. If a testamentary disposition admits of
different interpretations, in case of doubt, that
interpretation by which the disposition is to be
operative shall be preferred. (n)
Art. 789. When there is an imperfect description, or
when no person or property exactly answers the
description, mistakes and omissions must be
corrected, if the error appears from the context of
the will or from extrinsic evidence, excluding the
oral declarations of the testator as to his intention;
and when an uncertainty arises upon the face of the
will, as to the application of any of its provisions, the
testator's intention is to be ascertained from the
words of the will, taking into consideration the
circumstances under which it was made, excluding
such oral declarations. (n)
Art. 790. The words of a will are to be taken in their
ordinary and grammatical sense, unless a clear
intention to use them in another sense can be
gathered, and that other can be ascertained.
Technical words in a will are to be taken in their
technical sense, unless the context clearly indicates
a contrary intention, or unless it satisfactorily
appears that he was unacquainted with such
technical sense. (675a)
Art. 791. The words of a will are to receive an
interpretation which will give to every expression
some effect, rather than one which will render any
of the expressions inoperative; and of two modes of
interpreting a will, that is to be preferred which will
prevent intestacy. (n)
Art. 792. The invalidity of one of several
dispositions contained in a will does not result in the
invalidity of the other dispositions, unless it is to be
presumed that the testator would not have made
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
such other dispositions if the first invalid disposition
had not been made. (n)
Art. 793. Property acquired after the making of a will
shall only pass thereby, as if the testator had
possessed it at the time of making the will, should it
expressly appear by the will that such was his
intention. (n)
Note: This rule applies only to legacies and
devisees, and not to institution of heirs.
Wills; Testamentary Intent (1996)
Alfonso, a bachelor without any descendant or
ascendant, wrote a last will and testament in which he
devised." all the properties of which I may be possessed
at the time of my death" to his favorite brother Manuel. At
the time he wrote the will, he owned only one parcel of
land. But by the time he died, he owned twenty parcels of
land. His other brothers and sisters insist that his will
should pass only the parcel of land he owned at the time
it was written, and did not cover his properties acquired,
which should be by intestate succession. Manuel claims
otherwise. Who is correct? Explain.
SUGGESTED ANSWER:
Manuel is correct because under Art. 793, NCC, property
acquired after the making of a will shall only pass
thereby, as if the testator had possessed it at the time of
making the will, should it expressly appear by the will that
such was his intention. Since Alfonso's intention to devise
all properties he owned at the time of his death expressly
appears on the will, then all the 20 parcels of land are
included in the devise.
Art. 794. Every devise or legacy shall cover all the
interest which the testator could device or bequeath
in the property disposed of, unless it clearly
appears from the will that he intended to convey a
less interest. (n)
Art. 795. The validity of a will as to its form depends
upon the observance of the law in force at the time
it is made. (n)
NOTE: If the law provides for retroactivity, it may be
given retroactive effect.
Exception: If there will be impairment of VESTED
rights, new law may not be given retroactive effect.
2011 Bar Exam
(92) X owed Y P1.5 million. In his will, X gave
Y legacy of P1 million but the will provided
that this legacy is to be set off against the P1.5
million X owed Y. After the set off, X still owed
Y P500,000. Can Y still collect this amount?
(A) Yes, because the designation of Y as
legatee created a new and separate juridical
relationship between them, that of testator-
legatee. (B) It depends upon the discretion of
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the probate court if a claim is filed in the
testate proceedings. (C) No, because the
intention of the testator in giving the legacy is
to abrogate his entire obligation to Y. (D) No,
because X had no instruction in his will to
deliver more than the legacy of P1 million to Y.
SUBSECTION 2. - Testamentary Capacity and
Intent
Art. 796. All persons who are not expressly
prohibited by law may make a will. (662)
Art. 797. Persons of either sex under eighteen
years of age cannot make a will. (n)
Art. 798. In order to make a will it is essential that
the testator be of sound mind at the time of its
execution. (n)
Art. 799. To be of sound mind, it is not necessary
that the testator be in full possession of all his
reasoning faculties, or that his mind be wholly
unbroken, unimpaired, or unshattered by disease,
injury or other cause.
It shall be sufficient if the testator was able at the
time of making the will to know the nature of the
estate to be disposed of, the proper objects of his
bounty, and the character of the testamentary act.
(n)
Art. 800. The law presumes that every person is of
sound mind, in the absence of proof to the contrary.
The burden of proof that the testator was not of
sound mind at the time of making his dispositions is
on the person who opposes the probate of the will;
but if the testator, one month, or less, before
making his will was publicly known to be insane, the
person who maintains the validity of the will must
prove that the testator made it during a lucid
interval. (n)
GR; Law presumes that the testator is of sound
mind.
Exceptions:
1. Testator is publicly known to be insane, one
month or less before making his will;
2. Was under guardianship at the time of the
making of his will (Torres and Lopez de
Bueno vs. Lopez, 48 Phil. 772).
3. When there is judicial declaration of
insanity, and before it is revoked or
declared otherwise by the court.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 801. Supervening incapacity does not invalidate
an effective will, nor is the will of an incapable
validated by the supervening of capacity. (n)
Art. 802. A married woman may make a will without
the consent of her husband, and without the
authority of the court. (n)
Art. 803. A married woman may dispose by will of
all her separate property as well as her share of the
conjugal partnership or absolute community
property. (n)
SUBSECTION 3. - Forms of Wills
Art. 804. Every will must be in writing and executed
in a language or dialect known to the testator. (n)
Art. 805. Every will, other than a holographic will,
must be subscribed at the end thereof by the
testator himself or by the testator's name written by
some other person in his presence, and by his
express direction, and attested and subscribed by
three or more credible witnesses in the presence of
the testator and of one another.
The testator or the person requested by him to write
his name and the instrumental witnesses of the will,
shall also sign, as aforesaid, each and every page
thereof, except the last, on the left margin, and all
the pages shall be numbered correlatively in letters
placed on the upper part of each page.
The attestation shall state the number of pages
used upon which the will is written, and the fact that
the testator signed the will and every page thereof,
or caused some other person to write his name,
under his express direction, in the presence of the
instrumental witnesses, and that the latter
witnessed and signed the will and all the pages
thereof in the presence of the testator and of one
another.
If the attestation clause is in a language not known
to the witnesses, it shall be interpreted to them. (n)
 Attestation clause need not be in the
language known to the testator nor to the
witnesses. It does not form part of the
testamentary disposition.
 Attestation clause need only to be signed by
the witnesses and not by the testator.
 If the number of pages is not stated in the
attestation clause, the will is still valid as long
as the number of pages can be determined
without the need of the use of extrinsic
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evidence (that is, the number of pages must
be stated in any part of the will or even in the
acknowledgement before the notary public).
The inadvertent failure of one witness to affix his
signature to one page of the original will due to the
simultaneous lifting of two pages in the course of
the signing is not per se sufficient to justify denial of
probate when the duplicate will shows that it was
signed (Icasiano vs. Icasiano, 11 SCRA 422).
Note: There is presented in this case, a
duplicate original of the subject will.
The notary public cannot be counted as one of the
attesting witnesses (Cruz vs. Villasor, 54 SCRA 31).
Thus, if there are at least 3 other witnesses
aside from the notary public, the signing of
the notary public as a witness is a mere
surplasage.
ATTESTATION SUBSCRIPTION
Act of the senses Act of the hand
Mental act Mechanical act
Purpose is to render
available proof during
he probate that such will Purpose is for
had been executed in identification
accordance with the
formalities prescribed
by law
Found after the Found at the left side
attestation clause at the margin of every page of
end or last page the will
Art. 806. Every will must be acknowledged before a
notary public by the testator and the witnesses. The
notary public shall not be required to retain a copy
of the will, or file another with the Office of the Clerk
of Court. (n)
Art. 807. If the testator be deaf, or a deaf-mute, he
must personally read the will, if able to do so;
otherwise, he shall designate two persons to read it
and communicate to him, in some practicable
manner, the contents thereof. (n)
Art. 808. If the testator is blind, the will shall be read
to him twice; once, by one of the subscribing
witnesses, and again, by the notary public before
whom the will is acknowledged. (n)
Wills; Notarial Wills; Blind Testator;
Requisites (2008) No. XIV. Stevie was born
blind. He went to school for the blind, and
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
learned to read in Baille Language. He Speaks
English fluently. Can he: (A). Make a will? (1%)
SUGGESTED ANSWER: Assuming that he is
of legal age (Art. 797, Civil Code) and of
sound mind at the time of execution of the
will (Art. 798, Civil Code), Stevie, a blind
person, can make a notarial will, subject to
compliance with the "two-reading rule" (Art.
808, Civil Code) and the provisions of Arts.
804, 805 and 806 of the Civil Code.
(B). Act as a witness to a will? (1%)
SUGGESTED ANSWER: Stevie cannot be a
witness to a will. Art. 820 of the Civil Code
provides that "any person of sound mind
and of the age of eighteen years or more,
and not blind, deaf or dumb, and able to
read and write, may be a witness to the
execution of a will. (C). In either of the above
instances, must the will be read to him? (1%)
SUGGESTED ANSWER: If Stevie makes a
will, the will must be read to him twice,
once by one of the subscribing witnesses,
and again, by the notary public before
whom the will is acknowledged (Art. 808,
Civil Code).
Art. 809. In the absence of bad faith, forgery, or
fraud, or undue and improper pressure and
influence, defects and imperfections in the form of
attestation or in the language used therein shall not
render the will invalid if it is proved that the will was
in fact executed and attested in substantial
compliance with all the requirements of Article 805.
(n)
Note: This art. is a.k.a “The Doctrine of Liberal
Interpretation’”.
FORMS OF WILLS:
1. NOTARIAL WILL
Requisites: (clue words only)
1) Must be in writing in the language
or dialect known to the testator;
2) Signed by the testator and by the
instrumental witnesses in each and
every page, except the last page.
Signatures on the left margin on
each and every page is not
required –
a. In the last page, when the
will consists of two pages
or more;
b. When the will is only one
page;
c. When the will consists of
two pages, the first
consists of all the
testamentary disposition
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and is signed at the bottom
by the testator and the
witnesses and the second
page contains only the
attestation clause duly
signed at the bottom by the
witnesses.
Mandatory part: the signing on
every page on the witnesses’
presence.
NOTE: Test of presence is not
whether they actually saw each
other sign, but whether they
might have seen each other sign
had they chosen to do so
considering their mental and
physical condition and position in
relation to each other at the
moment of inscription of
signature of each other.
Directory part: the place of the
signature. The signature could be
affixed anywhere on the page.
3) Subscribed at the end by the
testator;
4) Attested and subscribed by 3 or
more credible witnesses in the
presence of the testator and of one
another;
5) Numbered correlatively on each
an every page in letters placed on
the upper part of each page.
Mandatory part: Pagination by
means of a conventional system.
Directory part: pagination in
letters on the upper part of each
page.
Note: if will consists only of one
page, no need for numbering.
6) Attestation clause; and
7) Acknowledgment before a notary
public
2012 Bar Exam Question
93. The attestation clause contains the
following, except: a) the number of pages
used; b) that the testator signed or caused
another to sign the will and every page
thereof in the presence of the instrumental
witnesses; c) notary public; d) the
instrumental witnesses witnessed and
signed the will and all the pages thereof in
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
the presence of the testator and one
another.
2012 Bar Exam Question
95. The following are the grounds for
disallowance of wills, except: a) The
formalities required by law have not been
complied with. b) The testator was insane or
mentally incapable of making will. c) The will
was executed through force or under duress,
or influence of fear or threats. d) The will
contains an attestation clause.
ADDITIONAL REQUISITES:
a. If testator be deaf or deaf-mute:
I. Personal reading of the will
if able to do so;
II. Otherwise, he shall
designate two persons to
read it and communicate to
him, in some practicable
manner its contents.
b. If the testator be blind – the will
shall be read to the testator twice:
I. Once by one of the
subscribing witnesses;
II. Once by the notary public
before whom the will is
acknowledged.
NOTE: But it was held that there is
substantial compliance with the law when,
although the will is read only once, each of
the witnesses and the notary public read
allowed the will together simultaneously
(Alvarado vs. Gaviola).
If the testator is an illiterate person, the
provision on a blind person executing a
will shall be applied. An illiterate person
is practically or technically blind.
2. HOLOGRAPHIC WILL
Requisites:
1) In writing and in a language or
dialect known to the testator;
2) Entirely written, dated and
assigned by the hand of the
testator himself;
Wills; Witnesses to a Will, Presence
required; Thumbmark as Signature (2007)
No.VI. Clara, thinking of her mortality, drafted
a will and asked Roberta, Hannah, Luisa and
Benjamin to be witnesses. During the day of
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signing of her will, Clara fell down the stairs
and broke her arms. Coming from the
hospital, Clara insisted on signing her will by
thumb mark and said that she can sign her
full name later. While the will was being
signed, Roberta experienced a stomach ache
and kept going to the restroom for long periods
of time. Hannah, while waiting for her turn to
sign the will, was reading the 7th Harry Potter
book on the couch, beside the table on which
everyone was signing. Benjamin, aside from
witnessing the will, also offered to notarize it.
A week after, Clara was run over by a drunk
driver while crossing the street in Greenbelt.
May the will of Clara be admitted to probate?
Give your reasons briefly. (10%) SUGGESTED
ANSWER:
Probate should be denied. The requirement
that the testator and at least three (3)
witnesses must sign all in the "presence" of
one another was not complied with.
Benjamin who notarized the will is
disqualified as a witness, hence he cannot
be counted as one of the three witnesses
(Cruz v. Villasor, 54 SCRA 31, 1973). The
testatrix and the other witnesses signed
the will not in the presence of Roberta
because she was in the restroom for
extended periods of time. Inside the
restroom, Roberta could not have possibly
seen the testatrix and the other witnesses
sign the will by merely casting her eyes in
the proper direction (Jaboneta v. Gustilo, 5
Phil 541, 1906; Nera v. Rimando, 18 Phil
451, 1914). Therefore, the testatrix signed
the will in the presence of only two
witnesses, and only two witnesses signed
the will in the presence of the testatrix and
of one another. It is to be noted, however,
that the thumb mark intended by the
testator to be his signature in executing his
last will and testament is valid (Payad v.
Tolentino, 62 Phil 848, 1936; Matias v.
Salud, L-104 Phil 1046, 23 June, 1958).
The problem, however, states that Clara
"said that she can sign her full name later;"
Hence, she did not consider her thumb
mark as her "complete" signature, and
intended further action on her part. The
testatrix and the other witness signed the
will in the presence of Hannah, because she
was aware of her function and role as
witness and was in a position to see the
testatrix and the other witnesses sign by
merely casting her eyes in the proper
direction.
2011 Bar Exam
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(96) Pepito executed a will that he and 3
attesting witnesses signed following the
formalities of law, except that the Notary
Public failed to come. Two days later, the
Notary Public notarized the will in his law
office where all signatories to the will
acknowledged that the testator signed the will
in the presence of the witnesses and that the
latter themselves signed the will in the
presence of the testator and of one another.
Was the will validly notarized? (A) No, since it
was not notarized on the occasion when the
signatories affixed their signatures on the will.
(B) Yes, since the Notary Public has to be
present only when the signatories
acknowledged the acts required of them in
relation to the will. (C) Yes, but the defect in
the mere notarization of the will is not fatal to
its execution. (D) No, since the notary public
did not require the signatories to sign their
respective attestations again.
Wills; Probate; Notarial and Holographic Wills (1997)
Johnny, with no known living relatives, executed a
notarial will giving all his estate to his sweetheart. One
day, he had a serious altercation with his sweetheart. A
few days later, he was introduced to a charming lady who
later became a dear friend. Soon after, he executed a
holographic will expressly revoking the notarial will and so
designating his new friend as sole heir. One day when he
was clearing up his desk, Johnny mistakenly burned,
along with other papers, the only copy of his holographic
will. His business associate, Eduardo knew well the
contents of the will which was shown to him by Johnny
the day it was executed. A few days after the burning
incident, Johnny died. Both wills were sought to be
probated in two separate petitions. Will either or both
petitions prosper?
SUGGESTED ANSWER:
The probate of the notarial will will prosper. The
holographic will cannot be admitted to probate because a
holographic will can only be probated upon evidence of
the will itself unless there is a photographic copy. But
since the holographic will was lost and there was no other
copy, it cannot be probated and therefore the notarial will
will be admitted to probate because there is no revoking
will.
ADDITIONAL ANSWERS:
1. In the case of Gan vs. Yap (104 Phil 509), the
execution and the contents of a lost or destroyed
holographic will may not be proved by the bare testimony
of witnesses who have seen or read such will. The will
itself must be presented otherwise it shall produce no
effect. The law regards the document itself as material
proof of authenticity. Moreover, in order that a will may be
revoked by a subsequent will, it is necessary that the
latter will be valid and executed with the formalities
required for the making of a will. The latter should
possess all the requisites of a valid will whether it be
ordinary or a holographic will, and should be probated in
order that the revocatory clause thereof may produce
effect. In the case at bar, since the holographic will itself
cannot be presented, it cannot therefore be probated.
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Since it cannot be probated, it cannot revoke the notarial
will previously written by the decedent.
2. On the basis of the Rules of Court, Rule 76,
Sec. 6, provides that no will shall be proved as a lost or
destroyed will unless its provisions are clearly and
distinctly proved by at least two (2) credible witnesses.
Hence, if we abide strictly by the two-witness rule to
prove a lost or destroyed will, the holographic will which
Johnny allegedly mistakenly burned, cannot be probated,
since there is only one witness, Eduardo, who can be
called to testify as to the existence of the will. If the
holographic will, which purportedly, revoked the earlier
notarial will cannot be proved because of the absence of
the required witness, then the petition for the probate of
the notarial will should prosper.
2012 Bar Exam Question
94. The following are the formalities required
in the execution of holographic will, except: a)
Entirely written; b) Dated; c) Signed by
testator himself d) Notarized by a notary
public.
Art. 810. A person may execute a holographic will
which must be entirely written, dated, and signed by
the hand of the testator himself. It is subject to no
other form, and may be made in or out of the
Philippines, and need not be witnessed. (678, 688a)
NOTE: As a GR, forms and solemnities of
contracts, wills, and other public instruments
SHALL be governed by lex loci celebracionis (art.
17, NCC). This article is one of the exceptions.
Art. 811. In the probate of a holographic will, it shall
be necessary that at least one witness who knows
the handwriting and signature of the testator
explicitly declare that the will and the signature are
in the handwriting of the testator. If the will is
contested, at least three of such witnesses shall be
required.
In the absence of any competent witness referred to
in the preceding paragraph, and if the court deem it
necessary, expert testimony may be resorted to.
(619a)
NOTE: This article applies only to post mortem
probates and not to probate filed during the
lifetime of the testator. In the latter case, the
testator himself files the petition and will identify
the document himself.
In the probate of a holographic will, the
document itself must be produced; a lost
holographic will cannot be probated, except
when a copy of the will is produced (Gan vs.
Yap, 104 Phil. 509).
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Wills; Holographic Wills; Witnesses (1994)
On his deathbed, Vicente was executing a will. In the
room were Carissa, Carmela, Comelio and Atty. Cimpo, a
notary public. Suddenly, there was a street brawl which
caught Comelio's attention, prompting him to look out the
window. Cornelio did not see Vicente sign a will. Is the
will valid?
SUGGESTED ANSWERS:
a) Yes, The will is valid. The law does not require a
witness to actually see the testator sign the will. It is
sufficient if the witness could have seen the act of signing
had he chosen to do so by casting his eyes to the proper
direction.
b) Yes, the will is valid. Applying the "test of position",
although Comelio did not actually see Vicente sign the
will, Cornelio was in the proper position to see Vicente
sign if Cornelio so wished.
Art. 812. In holographic wills, the dispositions of the
testator written below his signature must be dated
and signed by him in order to make them valid as
testamentary dispositions. (n)
Art. 813. When a number of dispositions appearing
in a holographic will are signed without being dated,
and the last disposition has a signature and a date,
such date validates the dispositions preceding it,
whatever be the time of prior dispositions. (n)
Art. 814. In case of any insertion, cancellation,
erasure or alteration in a holographic will, the
testator must authenticate the same by his full
signature. (n)
RULES IN INSERTION, CANCELLATION,
ERASURE OR ALTERATION IN A
HOLOGRAPHIC WILL: (by 3rd persons)
1. If made after the execution of the will, but
without the consent of the testator, such
insertion is considered as not written
because the validity of the will cannot be
defeated by the malice or caprice of a 3 rd
person.
2. If the insertion after the execution of the will
was with the consent of the testator (but not
validated), the will remains valid but the
insertion is void;
3. If the insertion after the execution of the will
is validated by the testator by his signature
thereon, then the insertion becomes part of
the will, and the entire will becomes void,
because of failure to comply with the
requirement that it must be wholly written
by the testator.
4. If the insertion made by a 3rd person is
made contemporaneous to the execution of
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the will, then the will is void because it is
not written entirely by the testator.
Wills; Holographic Wills; Insertions & Cancellations
(1996)
Vanessa died on April 14, 1980, leaving behind a
holographic will which is entirely written, dated and
signed in her own handwriting. However, it contains
insertions and cancellations which are not authenticated
by her signature. For this reason, the probate of
Vanessa's will was opposed by her relatives who stood to
inherit by her intestacy. May Vanessa's holographic will
be probated? Explain.
SUGGESTED ANSWER:
Yes, the will as originally written may be probated. The
insertions and alterations were void since they were not
authenticated by the full signature of Vanessa, under Art.
814, NCC. The original will, however, remains valid
because a holographic will is not invalidated by the
unauthenticated insertions or alterations (Ajero v. CA,
236 SCRA 468].
ALTERNATIVE ANSWER:
It depends. As a rule, a holographic will is not adversely
affected by Insertions or cancellations which were not
authenticated by the full signature of the testator (Ajero v.
CA, 236 SCRA 468). However, when the insertion or
cancellation amounts to revocation of the will, Art.814 of
the NCC does not apply but Art. 830. NCC. Art. 830 of
the NCC does not require the testator to authenticate his
cancellation for the effectivity of a revocation effected
through such cancellation (Kalaw v. Relova, 132 SCRA
237). In the Kalaw case, the original holographic will
designated only one heir as the only substantial provision
which was altered by substituting the original heir with
another heir. Hence, if the unauthenticated cancellation
amounted to a revocation of the will, the will may not be
probated because it had already been revoked.
Wills; Holographic Wills; Insertions &
Cancellations (2012) No.VII.a) Natividad’s
holographic will, which had only one (1)
substantial provision, as first written, named
Rosa as her sole heir. However, when Gregorio
presented it for probate, it already contained
an alteration, naming Gregorio, instead of
Rosa, as sole heir, but without authentication
by Natividad’s signature. Rosa opposes the
probate alleging such lack of proper
authentication. She claims that the unaltered
form of the will should be given effect. Whose
claim should be granted? Explain. (5%)
SUGGESTED ANSWER:
It depends. If the cancellation of Rosa’s
name in the will was done by the testator
himself, Rosa’s claimed that the
holographic will in its original tenor should
be given effect must be denied. The said
cancellation has revoked the entire will as
nothing remains of the will after the name
of Rosa was cancelled. Such cancellation is
valid revocation of the will and does not
require authentication by the full signature
of the testator to be effective. However, if
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
the cancellation of Rosa’s name was not
done by the testator himself, such
cancellation shall not be effective and the
will in its original tenor shall remain valid.
The effectively of the holographic will
cannot be left to the mercy of unscrupulous
third parties. The writing of Gregorio’s
name as sole heir was ineffective, even
though written by the testator himself,
because such is an alteration that requires
authentication by the full signature of the
testator to be valid and effective. Not
having an authenticated, the designation of
Gregorio as an heir was ineffective, (Kalaw
v. Relova, G.R. No. L-40207, Sept 28, 1984).
Art. 815. When a Filipino is in a foreign country, he
is authorized to make a will in any of the forms
established by the law of the country in which he
may be. Such will may be probated in the
Philippines. (n)
2012 Bar Exam Question
5. Atty. BUKO, a Filipino, executed a will while
he was in Spain. The attestation clause of the
said will does not contain Buko’s signature. It
is valid under Spanish law. At its probate in
Manila, it is being opposed on the ground that
the attestation clause does not contain
BUKO’s signature. Is the opposition correct?
Choose the best answer.. a) Yes, because it is
a fatal defect.
b) Yes, the will is not valid under Philippine
law.
c) No, attestation clause is not an act of the
testator. d) No, the governing law is
Spanish law. Note: The facts do not state the
Law observed by the testator in executing his
will. He could have observed Spanish Law or
Philippine Law (see comment of Tolentino to Art.
815 NCC in 3Tolentino117, 1992). If he
observed Spanish Law, the opposition is not
correct because the will is valid under Spanish
Law, hence choice (d) is the correct answer. If
he observed Philippine Law, the opposition is
still not correct because Philippine Law does not
require the testator to sign the Attestation
Clause of his will, said clause not being his act.
In such case, choice (c) is the correct answer).
COMMENT: Under this article, the tenor of the
provision is more or less permissive. But it must be
remembered that under art. 17, NCC, the forms and
solemnities of contracts, wills, and other public
instruments SHALL be governed by the law of the
country in which they are executed. It would appear
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that there is a conflict between these two
provisions.
It is believed, however, that Filipino citizen abroad
may also use the forms and solemnities under the
NCC for the following reasons—
1. In case of conflict between a general and a
specific provision, the settled rule is that
specific one shall prevail over the general
one. Art. 17 is the general provision but art.
815 is a specific one applying particularly to
wills executed in a foreign country by a
Filipino.
2. An alien residing abroad can execute a will
according to the formalities of the Philippine
laws and a will by a foreigner executed in
the Philippines may observe the forms and
solemnities of his country (arts.816 and
817). There would seem no plausible
reason to deny the same right to a Filipino
citizen. The legislature could not have
intended to discriminate Filipinos in their
very own country.
Art. 816. The will of an alien who is abroad
produces effect in the Philippines if made with the
formalities prescribed by the law of the place in
which he resides, or according to the formalities
observed in his country, or in conformity with those
which this Code prescribes. (n)
Wills; Holographic Wills; Probate (2009)
No.VI. On December 1, 2000, Dr. Juanito
Fuentes executed a holographic will, wherein
he gave nothing to his recognized illegitimate
son, Jay. Dr. Fuentes left for the United
States, passed the New York medical licensure
examinations, resided therein, and became a
naturalized American citizen. He died in New
York in 2007. The laws of New York do not
recognize holographic wills or compulsory
heirs. (A). Can the holographic will of Dr.
Fuentes be admitted to probate in the
Philippines? Why or why not? (3%)
SUGGESTED ANSWER: Yes, the holographic
will of Dr. Fuentes may be admitted to
probate in the Philippines because there is
no public policy violated by such probate.
The only issue at probate is the due
execution of the will which includes the
formal validity of the will. As regards
formal validity, the only issue the court will
resolve at probate is whether or not the will
was executed in accordance with the form
prescribed by the law observed by the
testator in the execution of his will. For
purposes of probate in the Philippines, an
alien testator may observe the law of the
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
place where the will was executed (Art 17,
NCC), or the formalities of the law of the
place where he resides, or according to the
formalities of the law of his own country, or
in accordance with the Philippine Civil
Code (Art. 816, NCC). Since Dr. Fuentes
executed his will in accordance with the
Philippine law, the Philippine court shall
apply the New Civil Code in determining
the formal validity of the holographic will.
The subsequent change in the citizenship
of Dr. Fuentes did not affect the law
governing the validity of his will. Under the
new Civil Code, which was the law used by
Dr. Fuentes, the law enforced at the time of
execution of the will shall govern the
formal validity of the will (Art. 795, NCC).
(B). Assuming that the will is probated in the
Philippines, can Jay validly insist that he be
given his legitime? Why or why not? (3%)
SUGGESTED ANSWER: No, Jay cannot
insist because under New York law he is not
a compulsory heir entitled to a legitime.
The national law of the testator determines
who his heirs are, the order that they
succeed, how much their successional
rights are, and whether or not a
testamentary disposition in his will is valid
(Art 16, NCC). Since, Dr. Fuentes was a US
citizen, the laws of the New York
determines who his heirs are. And since the
New York law does not recognize the
concept of compulsory heirs, Jay is not a
compulsory heir of Dr. Fuentes entitled to a
legitime.
Art. 817. A will made in the Philippines by a citizen
or subject of another country, which is executed in
accordance with the law of the country of which he
is a citizen or subject, and which might be proved
and allowed by the law of his own country, shall
have the same effect as if executed according to
the laws of the Philippines. (n)
LAWS GOVERNING VALIDITY OF A WILL:
1. Formal Validity—
a. If the testator is a Filipino and the
will is executed in the Philippines,
then its formal validity is governed
by the NCC.
b. If the testator is a Filipino and will is
executed in a foreign country, then
its formal validity is governed
either—
I. By the law of the place
where the will was made;
or
II. By the NCC.
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c. If the testator is a foreigner and the
will is executed in a foreign
country—
I. Law of the place where will
was executed;
II. Law of his own country;
III. By the NCC
d. If testator is a foreigner and will is
executed in the Philippines—
I. Law of his country;
II. By the NCC.
2. Substantive Validity—by the National law
of the decedent (art. 16, NCC).
Aspects of the will governed by the
national law—
a. Order of succession;
b. Capacity to succeed;
c. Amount of successional rights;
d. Intrinsic validity
Wills; Formalities (1990)
(1) If a will is executed by a testator who is a Filipino
citizen, what law will govern if the will is executed in the
Philippines? What law will govern if the will is executed in
another country? Explain your answers.
(2) If a will is executed by a foreigner, for instance, a
Japanese, residing in the Philippines, what law will
govern if the will is executed in the Philippines? And what
law will govern if the will is executed in Japan, or some
other country, for instance, the U.S.A.? Explain your
answers.
SUGGESTED ANSWER:
(1) a. If the testator who is a Filipino citizen executes his
will in the Philippines, Philippine law will govern the
formalities.
b. If said Filipino testator executes his will in another
country, the law of the country where he maybe or
Philippine law will govern the formalities. (Article 815,
Civil Code}
SUGGESTED ANSWER:
(2) a. If the testator is a foreigner residing in the
Philippines and he executes his will in the Philippines, the
law of the country of which he is a citizen or Philippine
law will govern the formalities.
b. If the testator is a foreigner and executes his will in a
foreign country, the law of his place of residence or the
law of the country of which he is a citizen or the law of the
place of execution, or Philippine law will govern the
formalities (Articles 17. 816. 817. Civil Code).
POSSIBLE ADDITIONAL ANSWERS:
a. In the case of a Filipino citizen, Philippine law shall
govern substantive validity whether he executes his will in
the Philippines or in a foreign country.
b. In the case of a foreigner, his national law shall govern
substantive validity whether he executes his will in the
Philippines or in a foreign country.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 818. Two or more persons cannot make a will
jointly, or in the same instrument, either for their
reciprocal benefit or for the benefit of a third person.
(669)
2011 Bar Exam
(70) Ric and Josie, Filipinos, have been
sweethearts for 5 years. While working in a
European country where the execution of joint
wills are allowed, the two of them executed a
joint holographic will where they named each
other as sole heir of the other in case either of
them dies. Unfortunately, Ric died a year later.
Can Josie have the joint will successfully
probated in the Philippines? (A) Yes, in the
highest interest of comity of nations and to
honor the wishes of the deceased. (B) No,
since Philippine law prohibits the execution
of joint wills and such law is binding on Ric
and Josie even abroad. (C) Yes, since they
executed their joint will out of mutual love and
care, values that the generally accepted
principles of international law accepts. (D) Yes,
since it is valid in the country where it was
executed, applying the principle of "lex loci
celebrationis."
Wills; Joint Wills (2008) No. XI. John and
Paula, British citizens at birth, acquired
Philippine citizenship by naturalization after
their marriage. During their marriage the
couple acquired substanial landholdings in
London and in Makati. Paula bore John three
children, Peter, Paul and Mary. In one of their
trips to London, the couple executed a joint
will appointing each other as their heirs and
providing that upon the death of the survivor
between them the entire estate would go to
Peter and Paul only but the two could not
dispose of nor divide the London estate as long
as they live. John and Paul died tragically in
the London Subway terrorist attack in 2005.
Peter and Paul filed a petition for probate of
their parent's will before a Makati Regional
Trial Court. (A). Should the will be admitted to
probate? (2%) SUGGESTED ANSWER: No.
The will cannot be admitted to probate
because a joint will is expressly prohibited
under Art. 818 of the Civil Code. This
provision applies John and Paula became
Filipino citizens after their marriage. (B).
Are the testamentary dispositions valid? (2%)
SUGGESTED ANSWER: No. The
testamentary dispositions are not valid
because (a) omission of Mary, a legitimate
child, is tantamount to preterition which
shall annul the institution of Peter and Paul
as heirs (Art. 854, Civil Code); and, (b) the
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disposition that Peter and Paul could not
dispose of nor divide the London estate for
more than 20 years is void (Art. 870, Civil
Code).
Art. 819. Wills, prohibited by the preceding article,
executed by Filipinos in a foreign country shall not
be valid in the Philippines, even though authorized
by the laws of the country where they may have
been executed. (733a)
Wills; Joint Wills; Probate (2012)
No.VII.b) John Sagun and Maria Carla Camua,
British citizens at birth, acquired Philippine
citizenship by naturalization after their
marriage. During their marriage, the couple
acquired substantial landholdings in London
and in Makati. Maria begot three (3) children,
Jorge, Luisito, and Joshur. In one of their trips
to London, the couple executed a joint will
appointing each other as their heirs and
providing that upon the death of the survivor
between them, the entire estate would go to
Jorge and Luisito only but the two (2) could
not dispose of nor divide the London estate as
long as they live. John and Maria died
tragically in the London subway terrorist
attack in 2005. Jorge and Luisito filed a
petition for probate of their parents’ will before
a Makati Regional Trial Court. Joshur
vehemently objected because he was
preterited. (1) Should the will be admitted to
probate? Explain. (2%) SUGGESTED
ANSWER: No, the will should not be
admitted to probate. Since the couples are
both Filipino citizens, Art 818 and 819 of
the NCC shall apply. Said articles prohibits
the execution of joint wills and make them
void, even though authorized of the
country where they were executed. (2) Are
the testamentary dispositions valid? Explain.
(2%) SUGGESTED ANSWER: Since the joint
will is void, all the testamentary
disposition written therein are also void.
However, if the will is valid, the
institutions of the heirs shall be annulled
because Joshur was preterited. He was
preterited because he will receive nothing
from the will, will receive nothing in
testacy, and the facts do not show that he
received anything as an advance on his
inheritance. He was totally excluded from
the inheritance of his parents.
(3) Is the testamentary prohibition against the
division of the London estate valid? Explain.
(1%) SUGGESTED ANSWER:
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Assuming the will of John and Maria was
valid, the testamentary prohibition on the
division of the London estate shall be valid but
only for 20 years. Under Arts 1083 and 494 of
the NCC, a testamentary disposition of the
testator cannot forbid the partition of all or
part of the estate for a period longer than
twenty (20) years.
Wills; Joint Wills (2000)
Manuel, a Filipino, and his American wife Eleanor,
executed a Joint Will in Boston, Massachusetts when
they were residing in said city. The law of Massachusetts
allows the execution of joint wills. Shortly thereafter,
Eleanor died. Can the said Will be probated in the
Philippines for the settlement of her estate? (3%)
SUGGESTED ANSWER:
Yes, the will may be probated in the Philippines insofar as
the estate of Eleanor is concerned. While the Civil Code
prohibits the execution of Joint wills here and abroad,
such prohibition applies only to Filipinos. Hence, the joint
will which is valid where executed is valid in the
Philippines but only with respect to Eleanor. Under Article
819, it is void with respect to Manuel whose joint will
remains void in the Philippines despite being valid where
executed.
ALTERNATIVE ANSWER:
The will cannot be probated in the Philippines, even
though valid where executed, because it is prohibited
under Article 818 of the Civil Code and declared void
under Article 819, The prohibition should apply even to
the American wife because the Joint will is offensive to
public policy. Moreover, it is a single juridical act which
cannot be valid as to one testator and void as to the
other.
2012 Bar Exam Question
10. Pedro (Filipino) and his wife Jane
(American) executed a joint will in Canada,
where such joint will is valid. In case the joint
will is probated in Japan, what law will govern
the formalities of the joint will? a) American
law b) Philippine law c) Canadian law d)
Japanese law
SUBSECTION 4. - Witnesses to Wills
Art. 820. Any person of sound mind and of the age
of eighteen years or more, and not bind, deaf or
dumb, and able to read and write, may be a witness
to the execution of a will mentioned in Article 805 of
this Code. (n)
Art. 821. The following are disqualified from being
witnesses to a will:
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(1) Any person not domiciled in the
Philippines;
(2) Those who have been convicted of
falsification of a document, perjury or false
testimony. (n)
Art. 822. If the witnesses attesting the execution of
a will are competent at the time of attesting, their
becoming subsequently incompetent shall not
prevent the allowance of the will. (n)
Art. 823. If a person attests the execution of a will,
to whom or to whose spouse, or parent, or child, a
devise or legacy is given by such will, such devise
or legacy shall, so far only as concerns such
person, or spouse, or parent, or child of such
person, or any one claiming under such person or
spouse, or parent, or child, be void, unless there
are three other competent witnesses to such will.
However, such person so attesting shall be
admitted as a witness as if such devise or legacy
had not been made or given. (n)
2010 Bar Exam
(D) A executed a 5-page notarial will before a
notary public and three witnesses. All of them
signed each and every page of the will. One of
the witnesses was B, the father of one of the
legatees to the will. What is the effect of B
being a witness to the will? (1%) (1). The will is
invalidated (2). The will is valid and effective
(3). The legacy given to B’s child is not valid
SUGGESTED ANSWER: No. 3. The legacy
given to B's child is not valid.
The validity of the will is not affected by
the legacy in favor of the son of an
attesting witness to the will. However, the
said legacy is void under Article 823 NCC.
ALTERNATIVE ANSWER: No. 2 .The will is
valid and effective. Under Article 823 ( NCC
),the legacy given in favor of the son of an
instrumental witness to a will has no effect
on the validity of the will. Hence, the will is
valid and effective.
Art. 824. A mere charge on the estate of the
testator for the payment of debts due at the time of
the testator's death does not prevent his creditors
from being competent witnesses to his will. (n)
SUBSECTION 5. - Codicils and Incorporation by
Reference
Art. 825. A codicil is supplement or addition to a
will, made after the execution of a will and annexed
to be taken as a part thereof, by which disposition
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
made in the original will is explained, added to, or
altered. (n)
Wills; Codicil; Institution of Heirs; Substitution of
Heirs (2002)
By virtue of a Codicil appended to his will, Theodore
devised to Divino a tract of sugar land, with the obligation
on the part of Divino or his heirs to deliver to Betina a
specified volume of sugar per harvest during Betina’s
lifetime. It is also stated in the Codicil that in the event the
obligation is not fulfilled, Betina should immediately seize
the property from Divino or latter’s heirs and turn it over to
Theodore’s compulsory heirs. Divino failed to fulfill the
obligation under the Codicil. Betina brings suit against
Divino for the reversion of the tract of land. a) Distinguish
between modal institution and substation
of heirs. (3%) b) Distinguish between simple and
fideicommissary
substitution of heirs. (2%) c) Does Betina have a cause of
action against Divino?
Explain (5%)
SUGGESTED ANSWER:
A. A MODAL INSTITUTION is the institution of
an heir made for a certain purpose or cause (Arts. 871
and 882, NCC). SUBSTITUTION is the appointment of
another heir so that he may enter into the inheritance in
default of the heir originality instituted. (Art. 857, NCC).
B. In a SIMPLE SUBSTITUTION of heirs, the testator
designates one or more persons to substitute the heirs
instituted in case such heir or heirs should die before him,
or should not wish or should be incapacitated to accept
the inheritance. In a FIDEICOMMISSARY
SUBSTITUTION, the testator institutes a first heir and
charges him to preserve and transmit the whole or part of
the inheritance to a second heir. In a simple substitution,
only one heir inherits. In a fideicommissary substitution,
both the first and second heirs inherit. (Art. 859 and 869,
NCC)
C. Betina has a cause of action against Divino. This is a
case of a testamentary disposition subject to a mode and
the will itself provides for the consequence if the mode is
not complied with. To enforce the mode, the will itself
gives Betina the right to compel the return of the property
to the heirs of Theodore. (Rabadilla v. Conscoluella, 334
SCRA 522 [2000] GR 113725, 29 June 2000).
Art. 826. In order that a codicil may be effective, it
shall be executed as in the case of a will. (n)
Art. 827. If a will, executed as required by this
Code, incorporates into itself by reference any
document or paper, such document or paper shall
not be considered a part of the will unless the
following requisites are present:
(1) The document or paper referred to in
the will must be in existence at the time of
the execution of the will;
(2) The will must clearly describe and
identify the same, stating among other
things the number of pages thereof;
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(3) It must be identified by clear and
satisfactory proof as the document or paper
referred to therein; and
(4) It must be signed by the testator and the
witnesses on each and every page, except
in case of voluminous books of account or
inventories. (n)
NOTE: Testamentary provisions must be written in
the will, it cannot be incorporated by reference.
Otherwise, formalities required may be violated or
circumvented.
SUBSECTION 6. - Revocation of Wills and
Testamentary Dispositions
Art. 828. A will may be revoked by the testator at
any time before his death. Any waiver or restriction
of this right is void. (737a)
Art. 829. A revocation done outside the Philippines,
by a person who does not have his domicile in this
country, is valid when it is done according to the law
of the place where the will was made, or according
to the law of the place in which the testator had his
domicile at the time; and if the revocation takes
place in this country, when it is in accordance with
the provisions of this Code. (n)
COMMENT/NOTE: The revocation must be done
according to the laws of the place where the will
was made or where the testator has his domicile. It
would appear then that this is an EXCEPTION to
rule that form and solemnities of wills, contracts,
and other public instruments shall be governed by
the law of the place where they are executed.
Thus, it may be impliedly understood that if
the revocation is in accordance of the place
where such revocation was made, it may
not be given effect in the Philippines.
Art. 830. No will shall be revoked except in the
following cases:
(1) By implication of law; or
(2) By some will, codicil, or other writing
executed as provided in case of wills; or
(3) By burning, tearing, cancelling, or
obliterating the will with the intention of
revoking it, by the testator himself, or by
some other person in his presence, and by
his express direction. If burned, torn,
cancelled, or obliterated by some other
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
person, without the express direction of the
testator, the will may still be established,
and the estate distributed in accordance
therewith, if its contents, and due
execution, and the fact of its unauthorized
destruction, cancellation, or obliteration are
established according to the Rules of Court.
(n)
2012 Bar Exam Question
6. Ramon, a Filipino, executed a will in
Manila, where he left his house and located in
BP Homes Parañaque in favor of his Filipino
son, Ramgen. Ramon’s other children RJ and
Ramona, both Turkish nationals, are
disputing the bequest to Ramgen. They plotted
to kill Ramgen. Ramon learned of the plot, so
he tore his will in two pieces out of anger.
Which statement is most accurate? a) The
mere act of Ramon Sr. is immaterial because
the will is still readable. b) The mere act of
tearing the will amounts to revocation. c) The
tearing of the will may amount to
revocation if coupled with intent of
revoking it. d) The act of tearing the will is
material.
REVOCATION OF WILLS
1. By operation of law –some instances of
revocation by operation of law:
a. Decree of legal separation;
b. Preterition;
c. Legacy or credit against 3rd person
or remission of debt was provided
in will BUT subsequently, the
testator brings an action against
such debtor (legatee);
d. Substantial transformation,
alienation or loss of specific thing
(art. 957, NCC);
e. When heir, devisee or legatee
commits any of the acts of
unworthiness;
f. Art. 40 FC;
g. Art. 50 FC.
2. by the execution of a will, codicil or other
writing executed as provided in case of
wills-
a. Express – when there is a
revocatory clause expressly
revoking the previous will or a part
thereof.
b. Implied – when the provisions
thereof are partially or entirely
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inconsistent with those of the
previous wills.
3. By physical destruction of the will (tearing,
burning, etc.)
Requisites:
a. Testamentary capacity at the time
of performing the act of destruction;
b. Intent to revoke (animus
revocandi);
c. Actual physical act of destruction;
d. Completion of the subjective
phase; and
e. Performed by the testator himself
or by some other person in his
presence and express direction.
Art. 831. Subsequent wills which do not revoke the
previous ones in an express manner, annul only
such dispositions in the prior wills as are
inconsistent with or contrary to those contained in
the latter wills. (n)
Art. 832. A revocation made in a subsequent will
shall take effect, even if the new will should become
inoperative by reason of the incapacity of the heirs,
devisees or legatees designated therein, or by their
renunciation. (740a)
DEPENDENT RELATIVE REVOCATION
When the testator provides in the subsequent will
that the revocation of the prior one is dependent on
the capacity or acceptance of the heirs, devisees,
or legatees in the subsequent will (Molo vs. Molo,
90 Phil. 37).
Wills; Revocation of Wills; Dependent Relative
Revocation (2003)
Mr. Reyes executed a will completely valid as to form. A
week later, however, he executed another will which
expressly revoked his first will, which he tore his first will
to pieces. Upon the death of Mr. Reyes, his second will
was presented for probate by his heirs, but it was denied
probate due to formal defects. Assuming that a copy of
the first will excluded by a legitimate son of the decedent
[Art. 887, New is available, may it now be admitted to
probate and given effect? Why?
SUGGESTED ANSWER:
Yes, the first will may be admitted to probate and given
effect. When the testator tore first will, he was under the
mistaken belief that the second will was perfectly valid
and he would not have destroyed the first will had he
known that the second will is not valid. The revocation by
destruction therefore is dependent on the validity of the
second will. Since it turned out that the second will was
invalid, the tearing of the first will did not produce the
effect of revocation. This is known as the doctrine of
dependent relative revocation (Molo v. Molo, 90 Phil 37.)
ALTERNATIVE ANSWERS:
No, the first will cannot be admitted to probate. While it is
true that the first will was successfully revoked by the
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
second will because the second will was later denied
probate, the first will was, nevertheless, revoked when
the testator destroyed it after executing the second invalid
will. (Diaz v. De Leon, 43 Phil 413 [1922]).
Art. 833. A revocation of a will based on a false
cause or an illegal cause is null and void. (n)
REQUISITES:
1. There must be a cause stated in the will;
2. The cause must be concrete, factual and
not purely subjective;
3. It must be false;
4. The testator must not know of its falsity;
5. It must appear from the will that the testator
is revoking because of the cause which is
false.
Art. 834. The recognition of an illegitimate child
does not lose its legal effect, even though the will
wherein it was made should be revoked. (714)
SUBSECTION 7. - Republication and Revival of
Wills
Art. 835. The testator cannot republish, without
reproducing in a subsequent will, the dispositions
contained in a previous one which is void as to its
form. (n)
REPUBLICATION REVIVAL
Action of the testator By operation of law
Art. 836. The execution of a codicil referring to a
previous will has the effect of republishing the will
as modified by the codicil. (n)
NOTE: A will that is republished by a codicil takes
effect as if executed on the date of the execution of
the codicil.
Art. 837. If after making a will, the testator makes a
second will expressly revoking the first, the
revocation of the second will does not revive the
first will, which can be revived only by another will
or codicil. (739a)
NOTE: The provision above demonstrates the
“Theory of Instant Revocation”.
SUBSECTION 8. - Allowance and Disallowance
of Wills
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PROBATE OF WILL
Art. 838. No will shall pass either real or personal Characteristics/nature
property unless it is proved and allowed in 1. A SPECIAL PROCEEDING required for the
accordance with the Rules of Court. purpose of establishing validity of the will
2. Probate of will is mandatory;
The testator himself may, during his lifetime, 3. Proceeding is in rem;
petition the court having jurisdiction for the 4. Imprescriptible.
allowance of his will. In such case, the pertinent
provisions of the Rules of Court for the allowance of GR: Probate court can inquire only into the extrinsic
wills after the testator's a death shall govern. validity of the will—
a. That the testator was of sound and
disposing mind;
The Supreme Court shall formulate such additional
b. That his consent was not vitiated;
Rules of Court as may be necessary for the
c. That it was in accordance with the
allowance of wills on petition of the testator.
formalities required by law;
d. That the will is genuine.
Subject to the right of appeal, the allowance of the
will, either during the lifetime of the testator or after Exceptions:
his death, shall be conclusive as to its due 1. Doctrine of Practical Consideration:
execution. (n) That probate court may pass upon the
intrinsic validity of the will when its probate
EFFECT OF THE PROBATE OF THE WILL might become an idle ceremony if on the
It is conclusive as to the EXECUTION and the face of the will it appears to be intrinsically
VALIDITY of the will (even against the state). Thus, void (Nuguid vs. Nuguid, 17 SCRA 449).
a criminal case against the forger may not lie after
the will has been probated. 2. Will is void on its face (Nepumuceno vs.
CA).
GR: Holographic will if destroyed cannot be
probated.
Exception: If there exists a photostatic or Xerox REVOCATION DISALLOWANCE
copy thereof (Gan vs. Yap, 104 Phil. 509). Voluntary act of the Given by a judicial
testator decree
With or without cause Always for legal cause
Art. 839. The will shall be disallowed in any of the May be partial or total Always total EXCEPT
following cases: when the ground of
fraud or influence for
(1) If the formalities required by law have example affects only
not been complied with; certain portions of the
will
(2) If the testator was insane, or otherwise
mentally incapable of making a will, at the
time of its execution; NOTE: For more discussion on the procedural
aspect of the topic allowance of will, see Rule
76 and 77 of Rules of Court (REMEDIAL LAW
(3) If it was executed through force or under
REVIEWER).
duress, or the influence of fear, or threats;

(4) If it was procured by undue and SECTION 2. - Institution of Heir

improper pressure and influence, on the
part of the beneficiary or of some other
person;
(5) If the signature of the testator was
procured by fraud;
(6) If the testator acted by mistake or did
not intend that the instrument he signed
should be his will at the time of affixing his
signature thereto. (n)
Art. 840. Institution of heir is an act by virtue of
which a testator designates in his will the person or
persons who are to succeed him in his property and
transmissible rights and obligations. (n)
REQUISITES OF INSTITUTION OF HEIRS
1. Designation of persons to succeed—
a. Directory – designation of name
and surname.

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b. Mandatory – identity of the heir
which must be established,
otherwise the disposition is void,
unless his identity becomes certain.
2. Will specifically assigns to such person an
inchoate (aliquot) share in the estate.
3. The person so named has the capacity to
succeed;
4. The will is formally valid;
5. No vice of consent is present;
6. There is no preterition.
Art. 841. A will shall be valid even though it should
not contain an institution of an heir, or such
institution should not comprise the entire estate,
and even though the person so instituted should not
accept the inheritance or should be incapacitated to
succeed.
In such cases the testamentary dispositions made
in accordance with law shall be complied with and
the remainder of the estate shall pass to the legal
heirs. (764)
Art. 842. One who has no compulsory heirs may
dispose by will of all his estate or any part of it in
favor of any person having capacity to succeed.
One who has compulsory heirs may dispose of his
estate provided he does not contravene the
provisions of this Code with regard to the legitime of
said heirs. (763a)
Art. 843. The testator shall designate the heir by his
name and surname, and when there are two
persons having the same names, he shall indicate
some circumstance by which the instituted heir may
be known.
Even though the testator may have omitted the
name of the heir, should he designate him in such
manner that there can be no doubt as to who has
been instituted, the institution shall be valid. (772)
Art. 844. An error in the name, surname, or
circumstances of the heir shall not vitiate the
institution when it is possible, in any other manner,
to know with certainty the person instituted.
If among persons having the same names and
surnames, there is a similarity of circumstances in
such a way that, even with the use of the other
proof, the person instituted cannot be identified,
none of them shall be an heir. (773a)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 845. Every disposition in favor of an unknown
person shall be void, unless by some event or
circumstance his identity becomes certain.
However, a disposition in favor of a definite class or
group of persons shall be valid. (750a)
Art. 846. Heirs instituted without designation of
shares shall inherit in equal parts. (765)
Art. 847. When the testator institutes some heirs
individually and others collectively as when he says,
"I designate as my heirs A and B, and the children
of C," those collectively designated shall be
considered as individually instituted, unless it
clearly appears that the intention of the testator was
otherwise. (769a)
Art. 848. If the testator should institute his brothers
and sisters, and he has some of full blood and
others of half blood, the inheritance shall be
distributed equally unless a different intention
appears. (770a)
Art. 849. When the testator calls to the succession
a person and his children they are all deemed to
have been instituted simultaneously and not
successively. (771)
Art. 850. The statement of a false cause for the
institution of an heir shall be considered as not
written, unless it appears from the will that the
testator would not have made such institution if he
had known the falsity of such cause. (767a)
Art. 851. If the testator has instituted only one heir,
and the institution is limited to an aliquot part of the
inheritance, legal succession takes place with
respect to the remainder of the estate.
The same rule applies if the testator has instituted
several heirs, each being limited to an aliquot part,
and all the parts do not cover the whole inheritance.
(n)
Art. 852. If it was the intention of the testator that
the instituted heirs should become sole heirs to the
whole estate, or the whole free portion, as the case
may be, and each of them has been instituted to an
aliquot part of the inheritance and their aliquot parts
together do not cover the whole inheritance, or the
whole free portion, each part shall be increased
proportionally. (n)
2011 Bar Exam
(67) Joanne married James, a person with no
known relatives. Through James' hard work,
he and his wife Joane prospered. When James
died, his estate alone amounted to P100
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million. If, in his will, James designates
Joanne as his only heir, what will be the free
portion of his estate. (A) Joanne gets all; estate
has no free portion left. (B) Joanne gets 1/2;
the other half is free portion. (C) Joanne
gets 1/3; the remaining 2/3 is free portion. (D)
Joanne gets 1/4; the remaining 3/4 is free
portion.
Art. 853. If each of the instituted heirs has been
given an aliquot part of the inheritance, and the
parts together exceed the whole inheritance, or the
whole free portion, as the case may be, each part
shall be reduced proportionally. (n)
Art. 854. The preterition or omission of one, some,
or all of the compulsory heirs in the direct line,
whether living at the time of the execution of the will
or born after the death of the testator, shall annul
the institution of heir; but the devises and legacies
shall be valid insofar as they are not inofficious.
If the omitted compulsory heirs should die before
the testator, the institution shall be effectual, without
prejudice to the right of representation. (814a)
REQUISITES:
1. There is an omission of one or some of the
compulsory heirs in the direct line;
2. The omission must be total and complete in
character;
There is no preterition if –
a. A devise or a legacy has been
given;
b. A donation inter vivos has been
given;
c. Anything is left from the inheritance
which the heir may get by way of
intestacy;
3. The heir is living at the time of the testators
death (or at least right of representation
exists) or must at least be conceived before
the testator’s death.
4. Preterition must be by mistake
(inadvertent).
Thus, if the preterition is intentional, it is a
defective disinheritance.
POSTHUMOUS CHILD
A child born after death of the father.
2012 Bar Exam Question
96. It is the omission in the testator’s will of
one, some or all of the compulsory heirs in
direct line, whether living at the time of
execution of the will or born after the death of
the testator. What principle is being referred
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
to? a) reserva troncal b) preterition c)
fideicommissary d) disposicion captatoria
Preterition (2001)
Because her eldest son Juan had been pestering her for
capital to start a business, Josefa gave him P100,000.
Five years later, Josefa died, leaving a last will and
testament in which she instituted only her four younger
children as her sole heirs. At the time of her death, her
only properly left was P900,000.00 in a bank. Juan
opposed the will on the ground of preterition. How should
Josefa's estate be divided among her heirs? State briefly
the reason(s) for your answer. (5%)
SUGGESTED ANSWER:
There was no preterition of the oldest son because the
testatrix donated 100,000 pesos to him. This donation is
considered an advance on the son's inheritance. There
being no preterition, the institutions in the will shall be
respected but the legitime of the oldest son has to be
completed if he received less.
After collating the donation of P100.000 to the remaining
property of P900,000, the estate of the testatrix is
P1,000,000. Of this amount, one-half or P500,000, is the
legitime of one legitimate child is P100,000. The legitime,
therefore, of the oldest son is P100,000. However, since
the donation given him was P100,000, he has already
received in full his legitime and he will not receive
anything anymore from the decedent. The remaining
P900,000, therefore, shall go to the four younger children
by institution in the will, to be divided equally among
them. Each will receive P225,000.
ALTERNATIVE ANSWER:
Assuming that the donation is valid as to form and
substance, Juan cannot invoke preterition because he
actually had received a donation inter vivos from the
testatrix (III Tolentino 188,1992 ed.). He would only have
a right to a completion of his legitime under Art. 906 of
the Civil Code. The estate should be divided equally
among the five children who will each receive
P225,000.00 because the total hereditary estate, after
collating the donation to Juan (Art. 1061, CC), would be
P1 million. In the actual distribution of the net estate,
Juan gets nothing while his siblings will get P225,000.00
each.
Preterition; Compulsory Heir (1999)
(a) Mr, Cruz, widower, has three legitimate children, A,
B and C. He executed a Will instituting as his heirs to his
estate of One Million (P1,000,000.00) Pesos his two
children A and B, and his friend F. Upon his death, how
should Mr. Cruz's estate be divided? Explain. (3%)
(b) In the preceding question, suppose Mr. Cruz instituted
his two children A and B as his heirs in his Will, but gave
a legacy of P 100,000.00 to his friend F. How should the
estate of Mr, Cruz be divided upon his death? Explain,
(2%)
SUGGESTED ANSWER:
(a) Assuming that the institution of A, B and F were to the
entire estate, there was preterition of C since C is a
compulsory heir in the direct line. The preterition will
result in the total annulment of the institution of heirs.
Therefore, the institution of A, B and F will be set aside
and Mr. Cuz's estate will be divided, as in intestacy,
equally among A, B and C as follows: A - P333,333.33; B
- P333.333.33; and C ¬P333,333.33.
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SECTION 3. - Substitution of Heirs
(b) On the same assumption as letter (a), there was
preterition of C. Therefore, the institution of A and B is Art. 857. Substitution is the appointment of another
annulled but the legacy of P100.000.00 to F shall be heir so that he may enter into the inheritance in
respected for not being inofficious. Therefore, the
remainder of P900.000.00 will be divided equally among
default of the heir originally instituted. (n)
A, B and C.
Art. 858. Substitution of heirs may be:

(1) Simple or common;

Art. 855. The share of a child or descendant omitted
in a will must first be taken from the part of the (2) Brief or compendious;
estate not disposed of by the will, if any; if that is
not sufficient, so much as may be necessary must
(3) Reciprocal; or
be taken proportionally from the shares of the other
compulsory heirs. (1080a)
(4) Fideicommissary. (n)
Art. 856. A voluntary heir who dies before the
testator transmits nothing to his heirs. Art. 859. The testator may designate one or more
persons to substitute the heir or heirs instituted in
case such heir or heirs should die before him, or
A compulsory heir who dies before the testator, a
should not wish, or should be incapacitated to
person incapacitated to succeed, and one who
accept the inheritance.
renounces the inheritance, shall transmit no right to
his own heirs except in cases expressly provided
for in this Code. (766a) A simple substitution, without a statement of the
cases to which it refers, shall comprise the three
mentioned in the preceding paragraph, unless the
testator has otherwise provided. (774)
PRETERITION DISINHERITANCE
Deprivation of a Deprivation of the
Simple Substitution.
compulsory heir of his compulsory heir of his
legitime is tacit legitime is express
May be voluntary but Art. 860. Two or more persons may be substituted
law presumes that it is Always voluntary for one; and one person for two or more heirs. (778)
involuntary
Law presumes that Compendious Substitution.
there has been a Done with legal cause
mistake or oversight on Art. 861. If heirs instituted in unequal shares should
the part of the testator be reciprocally substituted, the substitute shall
Omitted heir gets not If disinheritance is acquire the share of the heir who dies, renounces,
only his legitime but unlawful, compulsory or is incapacitated, unless it clearly appears that the
also his share in the heir is merely restored intention of the testator was otherwise. If there are
free portion not to his legitime more than one substitute, they shall have the same
disposed of by way of share in the substitution as in the institution. (779a)
legacies and devises
Reciprocal Substitution.
2011 Bar Exam Question
(12) Which of the following is NOT a basis for
Art. 862. The substitute shall be subject to the same
rendering a disinheritance defective or charges and conditions imposed upon the instituted
imperfect? (A) Its cause comes from the guilt heir, unless and testator has expressly provided the
of a spouse in a legal separation case, the contrary, or the charges or conditions are
innocent-spouse having died. (B) The truth personally applicable only to the heir instituted.
of its cause is denied and not sufficiently (780)
proved by evidence. (C) Its cause is not
authorized by the law. (D) Its cause is not
Art. 863. A fideicommissary substitution by virtue of
specified.
which the fiduciary or first heir instituted is entrusted
with the obligation to preserve and to transmit to a
second heir the whole or part of the inheritance,
shall be valid and shall take effect, provided such
substitution does not go beyond one degree from
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 210
____________________________________________________________________________________________________
the heir originally instituted, and provided further,
that the fiduciary or first heir and the second heir
are living at the time of the death of the testator.
(781a)
REQUISITES:
1. A fiduciary or first heir instituted entrusted
with the obligation to preserve and to
transmit to the fideicommissary substitute
or second heir the whole or part of the
inheritance;
2. Such substitution must not go beyond one
degree from the heir originally instituted;
Degree means relationship.
3. Fiduciary and fideicommissary are living at
the time of the testator’s death;
4. The fideicommissary substitution must be
expressly made;
5. The fideicommissary substitution is
imposed on the free portion and never on
the legitime.
NOTE: Pending the transmission of the property,
the fiduciary is entitled to all the rights of a
usufructuary although the fideicommissary is
entitled to all the rights of a naked owner.
Heirs; Fideicommissary Substitution (2008)
No. XIII. Raymond, single, named his sister
Ruffa in his will as a devisee of a parcel of land
which he owned. The will imposed upon Ruffa
the obligation of preseving the land and
transferring it, upon her death, to her
illegitimate daughter Scarlet who was then
only one year old. Raymond later died, leaving
behind his widowed mother, Ruffa and Scarlet.
(A). Is the condition imposed upon Ruffa, to
preserve the property and to transmit it upon
her death to Scarlet, valid? (1%) SUGGESTED
ANSWER: Yes, the condition imposed upon
Ruffa to preserve the property and to
transmit it upon her death to Scarlet is
valid because it is tantamount to
fideicommissary substitution under Art.
863 of the Civil Code.
(B). If Scarlet predeceases Ruffa, who inherits
the property? (2%) SUGGESTED ANSWER:
Ruffa will inherit the property as Scarlet's
heir. Scarlet acquires a right to the
succession from the time of Raymond's
death, even though she should predecease
Ruffa (Art. 866, Civil Code).
(C). If Ruffa predeceases Raymond, can
Scarlet inherit the property directly from
Raymond? (2%) SUGGESTED ANSWER:
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
If Ruffa predeceases Raymond, Raymond's
widowed mother will be entitled to the
inheritance. Scarlet, an illegitimate child, cannot
inherit the property by intestate succession
from Raymond who is a legitimate relative of
Ruffa (Art. 992, Civil Code). Moreover, Scarlet is
not a compulsory heir of Raymond, hence she
can inherit only by testamentary succession.
Since Raymond executed a will in the case at
bar, Scarlet may inherit from Raymond.
Art. 864. A fideicommissary substitution can never
burden the legitime. (782a)
Art. 865. Every fideicommissary substitution must
be expressly made in order that it may be valid.
The fiduciary shall be obliged to deliver the
inheritance to the second heir, without other
deductions than those which arise from legitimate
expenses, credits and improvements, save in the
case where the testator has provided otherwise.
(783)
Art. 866. The second heir shall acquire a right to the
succession from the time of the testator's death,
even though he should die before the fiduciary. The
right of the second heir shall pass to his heirs. (784)
Art. 867. The following shall not take effect:
(1) Fideicommissary substitutions which are
not made in an express manner, either by
giving them this name, or imposing upon
the fiduciary the absolute obligation to
deliver the property to a second heir;
(2) Provisions which contain a perpetual
prohibition to alienate, and even a
temporary one, beyond the limit fixed in
article 863;
(3) Those which impose upon the heir the
charge of paying to various persons
successively, beyond the limit prescribed in
article 863, a certain income or pension;
(4) Those which leave to a person the
whole part of the hereditary property in
order that he may apply or invest the same
according to secret instructions
communicated to him by the testator.
(785a)
Art. 868. The nullity of the fideicommissary
substitution does not prejudice the validity of the
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institution of the heirs first designated; the
fideicommissary clause shall simply be considered
as not written. (786)
Art. 869. A provision whereby the testator leaves to
a person the whole or part of the inheritance, and to
another the usufruct, shall be valid. If he gives the
usufruct to various persons, not simultaneously, but
successively, the provisions of Article 863 shall
apply. (787a)
Art. 870. The dispositions of the testator declaring
all or part of the estate inalienable for more than
twenty years are void. (n)
Wills; Testamentary Disposition; Period to
Prohibit Partition (2008)
No. XI. John and Paula, British citizens at
birth, acquired Philippine citizenship by
naturalization after their marriage. During
their marriage the couple acquired substanial
landholdings in London and in Makati. Paula
bore John three children, Peter, Paul and
Mary. In one of their trips to London, the
couple executed a joint will appointing each
other as their heirs and providing that upon
the death of the survivor between them the
entire estate would go to Peter and Paul only
but the two could not dispose of nor divide the
London estate as long as they live. John and
Paul died tragically in the London Subway
terrorist attack in 2005. Peter and Paul filed a
petition for probate of their parent's will before
a Makati Regional Trial Court. (C). Is the
testamentary prohibition against the division
of the London estate valid? (2%) SUGGESTED
ANSWER: No. the testamentary prohibition
against the division of the London estate is
void (Art. 870, Civil Code). A testator,
however, may prohibit partition for a
period which shall not exceed twenty (20)
years (Art. 870 in relation to Art. 494, par
3, Civil Code).
SECTION 4. - Conditional Testamentary
Dispositions
and Testamentary Dispositions With a Term
Art. 871. The institution of an heir may be made
conditionally, or for a certain purpose or cause.
(790a)
Art. 872. The testator cannot impose any charge,
condition, or substitution whatsoever upon the
legitimes prescribed in this Code. Should he do so,
the same shall be considered as not imposed.
(813a)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 873. Impossible conditions and those contrary
to law or good customs shall be considered as not
imposed and shall in no manner prejudice the heir,
even if the testator should otherwise provide. (792a)
Art. 874. An absolute condition not to contract a first
or subsequent marriage shall be considered as not
written unless such condition has been imposed on
the widow or widower by the deceased spouse, or
by the latter's ascendants or descendants.
Nevertheless, the right of usufruct, or an allowance
or some personal prestation may be devised or
bequeathed to any person for the time during which
he or she should remain unmarried or in
widowhood. (793a)
NOTE: Mere expression of a wish or desire (or
a suggestion) does not amount to a condition.
Condition not to marry must be express.
However, a relative prohibition not to contract
marriage with a particular person is valid.
Art. 875. Any disposition made upon the condition
that the heir shall make some provision in his will in
favor of the testator or of any other person shall be
void. (794a)
NOTE: “Disposition Captatoria”
2012 Bar Exam Question
97. Any disposition made upon the condition
that the heir shall make some provision in his
will in favor of the testator or of any other
person shall be void. Here, both the condition
and the disposition are void. What principle is
being referred to? a) reserva troncal b)
preterition c) fideicommissary d) disposicion
captatoria
Art. 876. Any purely potestative condition imposed
upon an heir must be fulfilled by him as soon as he
learns of the testator's death.
This rule shall not apply when the condition, already
complied with, cannot be fulfilled again. (795a)
Art. 877. If the condition is casual or mixed, it shall
be sufficient if it happens or be fulfilled at any time
before or after the death of the testator, unless he
has provided otherwise.
Should it have existed or should it have been
fulfilled at the time the will was executed and the
testator was unaware thereof, it shall be deemed as
complied with.
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If he had knowledge thereof, the condition shall be
considered fulfilled only when it is of such a nature
that it can no longer exist or be complied with again.
(796)
Art. 878. A disposition with a suspensive term does
not prevent the instituted heir from acquiring his
rights and transmitting them to his heirs even before
the arrival of the term. (799a)
Art. 879. If the potestative condition imposed upon
the heir is negative, or consists in not doing or not
giving something, he shall comply by giving a
security that he will not do or give that which has
been prohibited by the testator, and that in case of
contravention he will return whatever he may have
received, together with its fruits and interests.
(800a)
NOTE: This provision refers to “Caucion Muciana”
Article 587 provides for “Caucion Juratoria”
Art. 880. If the heir be instituted under a suspensive
condition or term, the estate shall be placed under
administration until the condition is fulfilled, or until it
becomes certain that it cannot be fulfilled, or until
the arrival of the term.
The same shall be done if the heir does not give the
security required in the preceding article. (801a)
NOTE: Compare with art. 885, NCC.
Art. 881. The appointment of the administrator of
the estate mentioned in the preceding article, as
well as the manner of the administration and the
rights and obligations of the administrator shall be
governed by the Rules of Court. (804a)
Art. 882. The statement of the object of the
institution, or the application of the property left by
the testator, or the charge imposed by him, shall not
be considered as a condition unless it appears that
such was his intention.
That which has been left in this manner may be
claimed at once provided that the instituted heir or
his heirs give security for compliance with the
wishes of the testator and for the return of anything
he or they may receive, together with its fruits and
interests, if he or they should disregard this
obligation. (797a)
MODAL INSTITUTION (institucion sub-modo)
Rules of Interpretation:
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
1. When there is doubt whether there is a
condition or a mode, consider the same as
a mode.
2. When there is doubt as to whether there is
a mode or merely a suggestion, consider
the same as only a suggestion.
CONDITION MODE
Suspends but does not Obligates but does not
obligate suspends
One is not an heir until Already an heir upon
and unless the condition death of testator
is fulfilled
QA. In his will, the testator designated X as a
legatee to receive P2 million for the purpose of
buying an ambulance that the residents of his
Barangay can use. What kind of institution is this?
A. a fideicomissary institution.
B. a modal institution.
C. a conditional institution.
D. a collective institution.
Art. 883. When without the fault of the heir, an
institution referred to in the preceding article cannot
take effect in the exact manner stated by the
testator, it shall be complied with in a manner most
analogous to and in conformity with his wishes.
If the person interested in the condition should
prevent its fulfillment, without the fault of the heir,
the condition shall be deemed to have been
complied with. (798a)
Art. 884. Conditions imposed by the testator upon
the heirs shall be governed by the rules established
for conditional obligations in all matters not provided
for by this Section. (791a)
Art. 885. The designation of the day or time when
the effects of the institution of an heir shall
commence or cease shall be valid.
In both cases, the legal heir shall be considered as
called to the succession until the arrival of the
period or its expiration. But in the first case he shall
not enter into possession of the property until after
having given sufficient security, with the intervention
of the instituted heir. (805)
SECTION 5. - Legitime
Art. 886. Legitime is that part of the testator's
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property which he cannot dispose of because the
law has reserved it for certain heirs who are,
therefore, called compulsory heirs. (806)
Art. 887. The following are compulsory heirs:
(1) Legitimate children and descendants,
with respect to their legitimate parents and
ascendants;
(2) In default of the foregoing, legitimate
parents and ascendants, with respect to
their legitimate children and descendants;
(3) The widow or widower;
(4) Acknowledged natural children, and
natural children by legal fiction;
(5) Other illegitimate children referred to in
Article 287.
Compulsory heirs mentioned in Nos. 3, 4, and 5 are
not excluded by those in Nos. 1 and 2; neither do
they exclude one another.
In all cases of illegitimate children, their filiation
must be duly proved.
The father or mother of illegitimate children of the
three classes mentioned, shall inherit from them in
the manner and to the extent established by this
Code. (807a)
CLASSES OF COMPULSORY HEIRS:
1. Primary – those have precedence over
other compulsory heirs
 Legitimate children and descendants
(legitimate), with respect to their
legitimate parents and ascendants.
2. Secondary – those who succeed only in
the absence of primary heirs
 Legitimate parents and ascendants
(legitimate), with respect to their
children and descendants.
3. Concurring – those who succeed together
with the primary heir or secondary
compulsory heirs
 Widow/er (legitimate) – the
surviving spouse referred to is the
spouse of the decedent.
 Illegitimate children and
descendants (legitimate or
illegitimate).
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer

Testator is a Testator is an
Legitimate Person Illegitimate Person
Legitimate children and Legitimate children and
descendant descendant
In default, legitimate Illegitimate parents and
parents and ascendants ascendants
Surviving spouse In default, illegitimate
parents only
Illegitimate children and Surviving spouse
descendant
GENERAL RULES IN ASCERTAINING
LEGITIMES:
1. Direct Descending line—
a. Rule of preference between lines;
b. Rule of proximity;
c. Right of representation ad infinitum
in case of predecease, incapacity
or disinheritance;
2. Direct ascending line—
a. Rule of division by line;
b. Rule of equal division.
3. Non-impairment of legitime – any
compulsory heir who was given less than
his legitime may demand that the same be
completed (art. 906).
EXCEPTIONS:
a. If the predecessor gave the
compulsory heir a donation inter
vivos and provided that it was not
charged against the legitime;
b. Dispositions made by the testator
to the compulsory heir, unless the
testator provided that it should be
considered part of the legitime.
Wills; Testamentary Disposition (2006)
Don died after executing a Last Will and Testament
leaving his estate valued at P12 Million to his common-
law wife Roshelle. He is survived by his brother Ronie
and his half-sister Michelle.
(1) Was Don's testamentary disposition of his estate in
accordance with the law on succession? Whether you
agree or not, explain your answer. Explain.
SUGGESTED ANSWER: Yes, Don's testamentary
disposition of his estate is in accordance with the law on
succession. Don has no compulsory heirs not having
ascendants, descendants nor a spouse [Art. 887, New
Civil Code]. Brothers and sisters are not compulsory
heirs. Thus, he can bequeath his entire estate to anyone
who is not otherwise incapacitated to inherit from him. A
common-law wife is not incapacitated under the law, as
Don is not married to anyone.
(2) If Don failed to execute a will during his lifetime, as his
lawyer, how will you distribute his estate? Explain. (2.5%)
SUGGESTED ANSWER: After paying the legal
obligations of the estate, I will give Ronie, as full-blood
brother of Don, 2/3 of the net estate, twice the share of
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Michelle, the half-sister who shall receive 1/3. Roshelle
will not receive anything as she is not a legal heir [Art.
1006 New Civil Code].
(3) Assuming he died intestate survived by his brother
Ronie, his half-sister Michelle, and his legitimate son
Jayson, how will you distribute his estate? Explain.
(2.5%)
SUGGESTED ANSWER: Jayson will be entitled to the
entire P12 Million as the brother and sister will be
excluded by a legitimate son of the decedent. This follows
the principle of proximity, where "the nearer excludes the
farther."
(4) Assuming further he died intestate, survived by his
father Juan, his brother Ronie, his half-sister Michelle,
and his legitimate son Jayson, how will you distribute his
estate? Explain. (2.5%)
SUGGESTED ANSWER: Jayson will still be entitled to
the entire P12 Million as the father, brother and sister will
be Civil Code]. This follows the principle that the
descendants exclude the ascendants from inheritance.
Legitime; Compulsory Heirs vs. Secondary
Compulsory Heirs (2005)
Emil, the testator, has three legitimate children, Tom,
Henry and Warlito; a wife named Adette; parents named
Pepe and Pilar; an illegitimate child, Ramon; brother,
Mark; and a sister, Nanette. Since his wife Adette is well-
off, he wants to leave to his illegitimate child as much of
his estate as he can legally do. His estate has an
aggregate net amount of Pl,200,000.00, and all the
above-named relatives are still living. Emil now comes to
you for advice in making a will. How will you distribute his
estate according to his wishes without violating the law on
testamentary succession? (5%)
SUGGESTED ANSWER:
P600,000.00 — legitime to be divided equally between
Tom, Henry and Warlito as the legitimate children. Each
will be entitled to P200,000.00. (Art. 888, Civil Code)
P100,000.00 -- share of Ramon the illegitimate child.
Equivalent to 1/2 of the share of each legitimate child.
(Art. 176, Family Code) P200,000.00 — Adette the wife.
Her share is equivalent to the share of one legitimate
child. (Art. 892, par. 2, Civil Code)
Pepe and Pilar, the parents are only secondary
compulsory heirs and they cannot inherit if the primary
compulsory heirs (legitimate children) are alive. (Art. 887,
par. 2, Civil Code)
Brother Mark and sister Nanette are not compulsory heirs
since they are not included in the enumeration under
Article 887 of the Civil Code.
The remaining balance of P300,000.00 is the free portion
which can be given to the illegitimate child Ramon as an
instituted heir. (Art. 914, Civil Code) If so given by the
decedent, Ramon would receive a total of P400,000.00.
Heirs; Intestate Succession; Legitime;
Computation (2010) No.XI. The spouses Peter
and Paula had three (3) children. Paula later
obtained a judgment of nullity of marriage.
Their absolute community of property having
been dissolved, they delivered P1 million to
each of their 3 children as their presumptive
legitimes. Peter later re-married and had two
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(2) children by his second wife Marie. Peter
and Marie, having successfully engaged in
business, acquired real properties. Peter later
died intestate. (A). Who are Peter’s legal heirs
and how will his estate be divided among
them? (5%) SUGGESTED ANSWER: The legal
heirs of Peter are his children by the first
and second marriages and his surviving
second wife.
Their shares in the estate of Peter will
depend, however, on the cause of the
nullity of the first marriage. If the nullity of
the first marriage was psychological
incapacity of one or both spouses, the three
children of that void marriage are
legitimate and all of the legal heirs shall
share the estate of Peter in equal shares. If
the judgment of nullity was for other
causes, the three children are illegitimate
and the estate shall be distributed such
that an illegitimate child of the first
marriage shall receive half of the share of a
legitimate child of the second marriage,
and the second wife will inherit a share
equal to that of a legitimate child. In no
case may the two legitimate children of the
second marriage receive a share less than
one-half of the estate which is their
legitime. When the estate is not sufficient
to pay all the legitimes of the compulsory
heirs, the legitime of the spouse is
preferred and the illegitimate children
suffer the reduction. Computation:
(A) If the ground of nullity is psychological
incapacity:
3 children by first 1/6 of the estate
marriage for each
2 children by 1/6 of the estate
second marriage for each
Surviving second 1/6 of the estate
spouse
B) If the ground of nullity is not
psychological capacity:
(2 legitimate ¼ of the estate
children for each of second
marriage
Surviving second ¼ of the estate
spouse
3 illegitimate 1/12 of estate for
children each of first
marriage
Note: The legitime of an illegitimate child
is supposed to be ½ the legitime of a
legitimate child or 1/8 of the estate. But
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the estate will not be sufficient to pay the
said legitime of the 3 illegitimate children,
because only ¼ of the estate is left after
paying the legitime of the surviving spouse
which is preferred. Hence, the remaining ¼
of the estate shall be divided among the 3
illegitimate children.
(B). What is the effect of the receipt by Peter’s
3 children by his first marriage of their
presumptive legitimes on their right to inherit
following Peter’s death? (5%) SUGGESTED
ANSWER:
In the distribution of Peter’s estate, ½ of
the presumptive received by the 3 children
of the first marriage shall be collated to
Peter’s estate and shall be imputed as an
advance of their respective inheritance
from Peter. Only half of the presumptive
legitime is collated to the estate of Peter
because the other half shall be collated to
the estate of his first wife.
Art. 888. The legitime of legitimate children and
descendants consists of one-half of the hereditary
estate of the father and of the mother.
The latter may freely dispose of the remaining half,
subject to the rights of illegitimate children and of
the surviving spouse as hereinafter provided.
(808a)
Art. 889. The legitime of legitimate parents or
ascendants consists of one-half of the hereditary
estates of their children and descendants.
The children or descendants may freely dispose of
the other half, subject to the rights of illegitimate
children and of the surviving spouse as hereinafter
provided. (809a)
Art. 890. The legitime reserved for the legitimate
parents shall be divided between them equally; if
one of the parents should have died, the whole
shall pass to the survivor.
If the testator leaves neither father nor mother, but
is survived by ascendants of equal degree of the
paternal and maternal lines, the legitime shall be
divided equally between both lines. If the
ascendants should be of different degrees, it shall
pertain entirely to the ones nearest in degree of
either line. (810)
Art. 891. The ascendant who inherits from his
descendant any property which the latter may have
acquired by gratuitous title from another ascendant,
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
or a brother or sister, is obliged to reserve such
property as he may have acquired by operation of
law for the benefit of relatives who are within the
third degree and who belong to the line from which
said property came. (871)
RESERVA TRONCAL
Art. 891 is the provision on Reserva Troncal.
PURPOSE:
1. To reserve certain properties to certain
persons;
2. To prevent person outside a family from
acquiring, by some chance or accident,
property which otherwise would have
remained with the said family;
3. To maintain separation between paternal
and maternal lines.
REQUISITES OF RESERVA TRONCAL:
1. The property should have been acquired by
operation of law by an ascendant
(RESERVISTA) from his descendant
(PROPOSITUS), upon death of the latter;
Note: by operation of law means that the
property is acquired by succession, either
by legitime or intestacy.
2. The property should have been acquired by
the propositus by gratuitous title from
another ascendant or from a brother or
sister (ORIGINITOR).
Note: Gratuitous title encompasses
succession and donation.
3. The propositus should have died without
any legitimate issue in the direct
descending line who could inherit from him.
NOTE: All the relationships must be legitimate
(Nieva vs. Alcala, 41 Phil. 495).
Heirs; Reserva Troncal (2009) No. I. TRUE
or FALSE. Answer TRUE if the statement is
true, or FALSE if the statement is false.
Explain your answer in not more than two (2)
sentences. (B).In reservatroncal, all
reservatarios (reservees) inherit as a class and
in equal shares regardless of their proximity in
degree to the prepositus. (1%) SUGGESTED
ANSWER:
FALSE. Not all the relatives within the
third degree will inherit as reservatario ,
and not all those who are entitled to inherit
will inherit in the equal shares . The
applicable laws of intestate succession will
determine who among the relatives will
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inherit as reservatarios and what shares
they will tak, i.e., the direct line excludes
the collateral, the descending direct line
excludes the ascending ,the nearer excludes
the more remote, the nephews and nieces
exclude the uncles and the aunts, and half
blood relatives inherit half the share of
fullblooded relatives.
Heirs; Intestate Heirs; Reserva Troncal (1995)
Isidro and Irma, Filipinos, both 18 years of age, were
passengers of Flight No. 317 of Oriental Airlines. The
plane they boarded was of Philippine registry. While en
route from Manila to Greece some passengers hijacked
the plane, held the chief pilot hostage at the cockpit and
ordered him to fly instead to Libya. During the hijacking
Isidro suffered a heart attack and was on the verge of
death. Since Irma was already eight months pregnant by
Isidro, she pleaded to the hijackers to allow the assistant
pilot to solemnize her marriage with Isidro. Soon after the
marriage, Isidro expired. As the plane landed in Libya
Irma gave birth. However, the baby died a few minutes
after complete delivery. Back in the Philippines Irma
Immediately filed a claim for inheritance. The parents of
Isidro opposed her claim contending that the marriage
between her and Isidro was void ab initio on the following
grounds: (a) they had not given their consent to the
marriage of their son; (b) there was no marriage license;
(c) the solemnizing officer had no authority to perform the
marriage; and, (d) the solemnizing officer did not file an
affidavit of marriage with the proper civil registrar.
2. Does Irma have any successional rights at all? Discuss
fully.
SUGGESTED ANSWER:
2. Irma succeeded to the estate of Isidro as his
surviving spouse to the estate of her legitimate child.
When Isidro died, he was succeeded by his surviving wife
Irma, and his legitimate unborn child. They divided the
estate equally between them, the child excluding the
parents of Isidro. An unborn child is considered born for
all purposes favorable to it provided it is born later. The
child was considered born because, having an intra-
uterine life of more than seven months, it lived for a few
minutes after its complete delivery. It was legitimate
because it was born within the valid marriage of the
parents. Succession is favorable to it. When the child
died, Irma inherited the share of the child. However, the
share of the child in the hands of Irma is subject to
reserva troncal for the benefit of the relatives of the child
within the third degree of consanguinity and who belong
to the line of Isidro.
ALTERNATIVE ANSWER:
If the marriage is void. Irma has no successional rights
with respect to Isidro but she would have successional
rights with respect to the child.
Intestate Succession; Reserva Troncal (1999)
Mr. Luna died, leaving an estate of Ten Million (P1
0,000,000.00) Pesos. His widow gave birth to a child four
months after Mr, Luna's death, but the child died five
hours after birth. Two days after the child's death, the
widow of Mr. Luna also died because she had suffered
from difficult childbirth. The estate of Mr. Luna is now
being claimed by his parents, and the parents of his
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
widow. Who is entitled to Mr. Luna'a estate and why?
(5%)
SUGGESTED ANSWER:
Half of the estate of Mr. Luna will go to the parents of
Mrs. Luna as their inheritance from Mrs. Luna, while the
other half will be inherited by the parents of Mr. Luna as
the reservatarios of the reserved property inherited by
Mrs. Luna from her child.
When Mr. Luna died, his heirs were his wife and the
unborn child. The unborn child inherited because the
inheritance was favorable to it and it was born alive later
though it lived only for five hours. Mrs. Luna inherited half
of the 10 Million estate while the unborn child inherited
the other half. When the child died, it was survived by its
mother, Mrs. Luna. As the only heir, Mrs. Luna inherited,
by operation of law, the estate of the child consisting of its
5 Million inheritance from Mr. Luna. In the hands of Mrs.
Luna, what she inherited from her child was subject to
reserva troncal for the benefit of the relatives of the child
within the third degree of consanguinity and who belong
to the family of Mr. Luna, the line where the property
came from.
When Mrs. Luna died, she was survived by her parents
as her only heirs. Her parents will inherit her estate
consisting of the 5 Million she inherited from Mr. Luna.
The other 5 Million she inherited from her child will be
delivered to the parents of Mr. Luna as beneficiaries of
the reserved property.
In sum, 5 Million Pesos of Mr. Luna's estate will go to the
parents of Mrs. Luna, while the other 5 Million Pesos will
go to the parents of Mr. Luna as reservatarios.
ALTERNATIVE ANSWER:
If the child had an intra-uterine life of not less than 7
months, it inherited from the father. In which case, the
estate of 10M will be divided equally between the child
and the widow as legal heirs. Upon the death of the child,
its share of 5M shall go by operation of law to the mother,
which shall be subject to reserva troncal. Under Art. 891,
the reserva is in favor of relatives belonging to the
paternal line and who are within 3 degrees from the child.
The parents of Mr, Luna are entitled to the reserved
portion which is 5M as they are 2 degrees related from
child. The from her by her parents.
However, if the child had intra-uterine life of less than 7
months, half of the estate of Mr. Luna, or 5M, will be
inherited by the widow (Mrs. Luna), while the other half,
or 5M, will be inherited by the parents of Mr. Luna. Upon
the death of Mrs. Luna, her estate of 5M will be inherited
by her own parents.
PERSONAL ELEMENTS:
1. Originator – the ascendant, brother or
sister from whom the propositus had
acquired the property by gratuitous title.
2. Propositus – the descendant who died and
from whose death the reservistas in turn
had acquired the property by operation of
law. The so called “ARBITER OF THE
FATE OF THE RESERVA TRONCAL”.
NOTE: Propositus can terminate the
reserva by:
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a. Substituting or alienating the
property;
b. By bequeathing or devising it either
to the potential reservista or to
other 3rd person;
c. By partitioning it and assigning the
property to parties other than the
reservista.
3. Reservista – that ascendant, not belonging
to the line from which the property came
that is the only compulsory heir and is
obliged to reserve the property.
4. Reservatarios – the relative of the
propositus within the 3rd degree and who
belong to the line from which the property
came and for whose benefit the reservation
is constituted. They must be related by
blood not only to the propositus but also to
the originator.
NOTE: The NCC did not provide for the
rule on how the reservatarios would
succeed to the reservista. However, the
following rules on intestacy have been
consistently applied—
a. Rule of preference between lines;
b. Rule of proximity;
c. Right of representation, provided
that the representative is a relative
within the 3rd degree from the
propositus and belongs to the line
from which the property came from;
d. Full-blood double share rule in art.
1000..
The reservista has no power to appoint by will
which reservatarios were to get the reserved
property (Gonzales vs. CFI, 104 Phil. 479).
Note: the reservista can sell the property for in the
meantime, he is the owner thereof. His ownership,
however, is subject to a resolutory condition (term),
that is upon his death, he shall turn over the
property to the reservatarios. Thus, even if he sold
the property, the reservatarios may re-acquire the
property from the buyers thereof.
This rule, however, may yield to the Mirror
Principle in our land registration system.
Thus, if the reservista was able to register the
property in his name free from any liens,
whatsoever, particulary and adverse claim
(annotation in the title that the property is a
reservable property), and sold the same to a
buyer in good faith, the buyer is protected
and the reservatarios may not recover the
property.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Remedy is to file a claim (and damages)
against the estate of the deceased reservista.
RIGHT OF RESERVATARIOS OVER THE
reservable property.
1. At the death of the propositus – an
inchoate right, a mere expectancy.
Note: the reservatarios should
endeavor to annotate their claim so that
persons dealing with the property would
know its reservable character.
2. At the death of the reservista – surviving
reservatarios acquires a perfect right.
RIGHT OF THE RESERVISTA:
1. Is one of ownership;
2. Ownership is subject to a resolutory
condition
COMMENT: the proper word is term or
period. Death of the reservista is a certain
thing although the exact date is unkown.
3. The right of ownership is alienable;
4. The right of ownership is registrable.
EXTINGUISHMENT OF RESERVA TRONCAL:
1. Death of reservista;
2. Death of all reservatarios;
3. Renunciation of all the reservatarios,
provided non is born subsequently;
4. Total fortuitous loss of the property
reserved;
5. Confusion or merger of rights;
6. Prescription or adverse possession.
Art. 892. If only one legitimate child or descendant
of the deceased survives, the widow or widower
shall be entitled to one-fourth of the hereditary
estate. In case of a legal separation, the surviving
spouse may inherit if it was the deceased who had
given cause for the same.
If there are two or more legitimate children or
descendants, the surviving spouse shall be entitled
to a portion equal to the legitime of each of the
legitimate children or descendants.
In both cases, the legitime of the surviving spouse
shall be taken from the portion that can be freely
disposed of by the testator. (834a)
Art. 893. If the testator leaves no legitimate
descendants, but leaves legitimate ascendants, the
surviving spouse shall have a right to one-fourth of
the hereditary estate.
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This fourth shall be taken from the free portion of
the estate. (836a)
Art. 894. If the testator leaves illegitimate children,
the surviving spouse shall be entitled to one-third of
the hereditary estate of the deceased and the
illegitimate children to another third. The remaining
third shall be at the free disposal of the testator. (n)
Art. 895. The legitime of each of the acknowledged
natural children and each of the natural children by
legal fiction shall consist of one-half of the legitime
of each of the legitimate children or descendants.
The legitime of an illegitimate child who is neither
an acknowledged natural, nor a natural child by
legal fiction, shall be equal in every case to four-
fifths of the legitime of an acknowledged natural
child.
The legitime of the illegitimate children shall be
taken from the portion of the estate at the free
disposal of the testator, provided that in no case
shall the total legitime of such illegitimate children
exceed that free portion, and that the legitime of the
surviving spouse must first be fully satisfied. (840a)
Legitime (1997)
"X", the decedent, was survived by W (his widow). A (his
son), B (a granddaughter, being the daughter of A) and C
and D (the two acknowledged illegitimate children of the
decedent). "X" died this year (1997) leaving a net estate
of P180,000.00. All were willing to succeed, except A who
repudiated the inheritance from his father, and they seek
your legal advice on how much each can expect to
receive as their respective shares in the distribution of the
estate. Give your answer.
SUGGESTED ANSWER:
The heirs are B, W, C and D. A inherits nothing because
of his renunciation. B inherits a legitime of P90.000.00 as
the nearest and only legitimate descendant, inheriting in
his own right not by representation because of A's
renunciation. W gets a legitime equivalent to one-half (1 /
2) that of B amounting to P45.000. C and D each gets a
legitime equivalent to one-half (1/2) that of B amounting
to P45.000.00 each. But since the total exceeds the
entire estate, their legitimes would have to be reduced
corresponding to P22.500.00 each (Art. 895. CC). The
total of all of these amounts to P180.000.00.
ALTERNATIVE ANSWER:
INTESTATE SUCCESSION ESTATE: P180,000.00
W- (widow gets 1/2 share) P90.000.00 (Art. 998) A- (son
who repudiated his inheritance) None Art. 977) B -
(Granddaughter) None C - (Acknowledged illegitimate
child) P45.000.00 (Art.998) D - (Acknowledged
illegitimate child) P45,000.00 (Art. 998) The
acknowledged illegitimate child gets 1/2 of the share of
each legitimate child.
Legitime; Compulsory Heirs (2003)
Luis was survived by two legitimate children, two
illegitimate children, his parents, and two brothers. He left
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
an estate of P1 million. Who are the compulsory heirs of
Luis, how much is the legitime of each, and how much is
the free portion of his estate, if any?
SUGGESTED ANSWER:
The compulsory heirs are the two legitimate children and
the two illegitimate children. The parents are excluded by
the legitimate children, while the brothers are not
compulsory heirs at all. Their respective legitimate are: a)
The legitime of the two (2) legitimate children is one
half (1/2) of the estate (P500,000.00) to be divided
between them equally, or P250,000.00 each. b) The
legitimate of each illegitimate child is one-half
(1/2) the legitime of each legitimate child or
P125,000.00.
c) Since the total legitime of the compulsory heirs is
legitime of the legitimate children and it follows that the
P750,000.00, the balance of P250,000.00 is the free
portion.
2011 Bar Exam Question
(32) The decedent died intestate leaving an
estate of P10 million. He left the following
heirs: a) Marlon, a legitimate child and b)
Cecilia, the legal spouse. Divide the estate. (A)
Marlon gets 1/4 and Cecilia gets 3/4. (B)
Marlon gets 2/3 and Cecilia 1/3. (C) Marlon
gets 1/2 and Cecilia gets 1/2.
(D) Marlon gets 3/4 and Cecilia 1/4.
Art. 896. Illegitimate children who may survive with
legitimate parents or ascendants of the deceased
shall be entitled to one-fourth of the hereditary
estate to be taken from the portion at the free
disposal of the testator. (841a)
Art. 897. When the widow or widower survives with
legitimate children or descendants, and
acknowledged natural children, or natural children
by legal fiction, such surviving spouse shall be
entitled to a portion equal to the legitime of each of
the legitimate children which must be taken from
that part of the estate which the testator can freely
dispose of. (n)
Art. 898. If the widow or widower survives with
legitimate children or descendants, and with
illegitimate children other than acknowledged
natural, or natural children by legal fiction, the share
of the surviving spouse shall be the same as that
provided in the preceding article. (n)
Art. 899. When the widow or widower survives with
legitimate parents or ascendants and with
illegitimate children, such surviving spouse shall be
entitled to one-eighth of the hereditary estate of the
deceased which must be taken from the free
portion, and the illegitimate children shall be entitled
to one-fourth of the estate which shall be taken also
from the disposable portion. The testator may freely
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dispose of the remaining one-eighth of the estate.
(n)
Art. 900. If the only survivor is the widow or
widower, she or he shall be entitled to one-half of
the hereditary estate of the deceased spouse, and
the testator may freely dispose of the other half.
(837a)
If the marriage between the surviving spouse and
the testator was solemnized in articulo mortis, and
the testator died within three months from the time
of the marriage, the legitime of the surviving spouse
as the sole heir shall be one-third of the hereditary
estate, except when they have been living as
husband and wife for more than five years. In the
latter case, the legitime of the surviving spouse
shall be that specified in the preceding paragraph.
(n)
Art. 901. When the testator dies leaving illegitimate
children and no other compulsory heirs, such
illegitimate children shall have a right to one-half of
the hereditary estate of the deceased.
The other half shall be at the free disposal of the
testator. (842a)
Art. 902. The rights of illegitimate children set forth
in the preceding articles are transmitted upon their
death to their descendants, whether legitimate or
illegitimate. (843a)
Art. 903. The legitime of the parents who have an
illegitimate child, when such child leaves neither
legitimate descendants, nor a surviving spouse, nor
illegitimate children, is one-half of the hereditary
estate of such illegitimate child. If only legitimate or
illegitimate children are left, the parents are not
entitled to any legitime whatsoever. If only the
widow or widower survives with parents of the
illegitimate child, the legitime of the parents is one-
fourth of the hereditary estate of the child, and that
of the surviving spouse also one-fourth of the
estate. (n)
Art. 904. The testator cannot deprive his
compulsory heirs of their legitime, except in cases
expressly specified by law.
Neither can he impose upon the same any burden,
encumbrance, condition, or substitution of any kind
whatsoever. (813a)
Art. 905. Every renunciation or compromise as
regards a future legitime between the person owing
it and his compulsory heirs is void, and the latter
may claim the same upon the death of the former;
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
but they must bring to collation whatever they may
have received by virtue of the renunciation or
compromise. (816)
Art. 906. Any compulsory heir to whom the testator
has left by any title less than the legitime belonging
to him may demand that the same be fully satisfied.
(815)
Art. 907. Testamentary dispositions that impair or
diminish the legitime of the compulsory heirs shall
be reduced on petition of the same, insofar as they
may be inofficious or excessive. (817)
Art. 908. To determine the legitime, the value of the
property left at the death of the testator shall be
considered, deducting all debts and charges, which
shall not include those imposed in the will.
To the net value of the hereditary estate, shall be
added the value of all donations by the testator that
are subject to collation, at the time he made them.
(818a)
Art. 909. Donations given to children shall be
charged to their legitime.
Donations made to strangers shall be charged to
that part of the estate of which the testator could
have disposed by his last will.
Insofar as they may be inofficious or may exceed
the disposable portion, they shall be reduced
according to the rules established by this Code.
(819a)
Art. 910. Donations which an illegitimate child may
have received during the lifetime of his father or
mother, shall be charged to his legitime.
Should they exceed the portion that can be freely
disposed of, they shall be reduced in the manner
prescribed by this Code. (847a)
Art. 911. After the legitime has been determined in
accordance with the three preceding articles, the
reduction shall be made as follows:
(1) Donations shall be respected as long as
the legitime can be covered, reducing or
annulling, if necessary, the devises or
legacies made in the will;
(2) The reduction of the devises or legacies
shall be pro rata, without any distinction
whatever.
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If the testator has directed that a certain
devise or legacy be paid in preference to
others, it shall not suffer any reduction until
the latter have been applied in full to the
payment of the legitime.
(3) If the devise or legacy consists of a
usufruct or life annuity, whose value may
be considered greater than that of the
disposable portion, the compulsory heirs
may choose between complying with the
testamentary provision and delivering to the
devisee or legatee the part of the
inheritance of which the testator could
freely dispose. (820a)
Art. 912. If the devise subject to reduction should
consist of real property, which cannot be
conveniently divided, it shall go to the devisee if the
reduction does not absorb one-half of its value; and
in a contrary case, to the compulsory heirs; but the
former and the latter shall reimburse each other in
cash for what respectively belongs to them.
The devisee who is entitled to a legitime may retain
the entire property, provided its value does not
exceed that of the disposable portion and of the
share pertaining to him as legitime. (821)
Art. 913. If the heirs or devisees do not choose to
avail themselves of the right granted by the
preceding article, any heir or devisee who did not
have such right may exercise it; should the latter
not make use of it, the property shall be sold at
public auction at the instance of any one of the
interested parties. (822)
Art. 914. The testator may devise and bequeath the
free portion as he may deem fit. (n)
SECTION 6. – Disinheritance
CAUSES OF VACANCY IN SUCCESSION
1. Disinheritance;
2. Repudiation;
3. Incapacity;
4. Predecease, without prejudice to right of
representation.
HOW VACANCIES ARE FILLED:
1. Substitution;
2. Representation;
3. Accretion.
Art. 915. A compulsory heir may, in consequence of
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
disinheritance, be deprived of his legitime, for
causes expressly stated by law. (848a)
REQUISITES:
1. Effected through a valid will;
2. For a cause expressly stated by law;
3. Cause must be expressly stated in the will
itself;
4. Cause must be certain, existing and true;
5. Unconditional;
6. Total;
7. Heir disinherited must be designated in
such a manner that there can be no doubt
as to his identity.
Art. 916. Disinheritance can be effected only
through a will wherein the legal cause therefor shall
be specified. (849)
Art. 917. The burden of proving the truth of the
cause for disinheritance shall rest upon the other
heirs of the testator, if the disinherited heir should
deny it. (850)
Art. 918. Disinheritance without a specification of
the cause, or for a cause the truth of which, if
contradicted, is not proved, or which is not one of
those set forth in this Code, shall annul the
institution of heirs insofar as it may prejudice the
person disinherited; but the devises and legacies
and other testamentary dispositions shall be valid to
such extent as will not impair the legitime. (851a)
Disinheritance vs. Preterition (1993)
Maria, to spite her husband Jorge, whom she suspected
was having an affair with another woman, executed a will,
unknown to him, bequeathing all the properties she
inherited from her parents, to her sister Miguela. Upon
her death, the will was presented for probate. Jorge
opposed probate of the will on the ground that the will
was executed by his wife without his knowledge, much
less consent, and that it deprived him of his legitime. After
all, he had given her no cause for disinheritance, added
Jorge in his opposition.
Maria's will. If you were the Judge?
SUGGESTED ANSWER:
As Judge, I shall rule as follows: Jorge's opposition
should be sustained in part and denied in part. Jorge's
omission as spouse of Maria is not preterition of a
compulsory heir in the direct line. Hence, Art. 854 of the
Civil Code does not apply, and the institution of Miguela
as heir is valid, but only to the extent of the free portion of
one-half. Jorge is still entitled to one-half of the estate as
his legitime. (Art. 1001, Civil Code)
ALTERNATIVE ANSWERS:
a) As Judge, I shall rule as follows: Jorge's opposition
should be sustained in part and denied in part. This is a
case of ineffective disinheritance under Art, 918 of the
Civil Code, because the omission of the compulsory heir
Jorge by Maria was intentional. Consequently, the
institution of Miguela as heir is void only insofar as the
legitime of Jorge is prejudiced. Accordingly, Jorge is
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entitled to his legitime of one-half of the estate, and C. Its cause is not authorized by the law.
Miguela gets the other half. D. Its cause is not specified.
b) As Judge, I shall rule as follows: Jorge's opposition
should be sustained. This is a case of preterition under
Article 854 Civil Code, the result of the omission of Jorge (2) When a child or descendant has
as compulsory heir having the same right equivalent to a accused the testator of a crime for which
legitimate child "in the direct line" is that total intestacy the law prescribes imprisonment for six
will arise, and Jorge will inherit the entire estate. years or more, if the accusation has been
c) As Judge, I shall rule as follows: the opposition found groundless;
should be denied since it is predicated upon causes not
recognized by law as grounds for disallowance of a wll, to
wit: Notes:
1 that the will was made without his knowledge; a. Penalty imposable is basis
2 that the will was made without his consent; and not actually imposed;
3 that it has the effect of depriving him of his b. Made by the heir in a
legitime, which is a ground that goes into the intrinsic proceeding as a
validity of the will and need not be resolved during the complainant or a witness in
probate proceedings. However, the opposition may be
a criminal case;
entertained for, the purpose of securing to the husband
his right to the legitime on the theory that the will c. Found to be groundless or
constitutes an ineffective disinheritance under Art. 918 of false;
the Civil Code, Groundless – court should
make a positive finding that
d) As Judge, I shall rule as follows: Jorge is entitled to the testator has not
receive his legitime from the estate of his wife. He was committed the crime.
not disinherited in the will even assuming that he gave
ground for disinheritance, hence, he is still entitled to his d. “tsismis” is not included no
legitime. Jorge, however, cannot receive anything from
matter how serious the
the free portion. He cannot claim preterition as he is not a
compulsory heir in the direct line. There being no accusation is.
preterition, the institution of the sister was valid and the
only right of Jorge is to claim his legitime.
(3) When a child or descendant has been
convicted of adultery or concubinage with
Art. 919. The following shall be sufficient the spouse of the testator;
causes for the disinheritance of children and
descendants, legitimate as well as illegitimate: (4) When a child or descendant by fraud,
violence, intimidation, or undue influence
(1) When a child or descendant has been causes the testator to make a will or to
found guilty of an attempt against the life of change one already made;
the testator, his or her spouse,
descendants, or ascendants; (5) A refusal without justifiable cause to
support the parent or ascendant who
Notes: disinherits such child or descendant;
a. Conviction is necessary;
b. In case of spouse giving (6) Maltreatment of the testator by word or
cause for legal separation, deed, by the child or descendant;
no conviction needed;
c. Include both attempted or
Notes –
frustrated;
d. Attempt on the life of a. By word – slander,
relatives, may be offensive language, insult,
consummated. libel, may be spoken or
written.
b. By deed – no need for
QA. Which of the following is NOT a
violence, something which
basis for rendering a disinheritance caused the testator to be
defective or imperfect? humiliated. Like laying
A. Its cause comes from the guilt of a hands but must not
spouse in a legal separation case, the constitute an attempt under
innocent-spouse having died. par. 1.
B. The truth of its cause is denied and
not sufficiently proved by evidence.
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(7) When a child or descendant leads a The disinheritance of Wilma was ineffective because the
dishonorable or disgraceful life; ground relied upon by the testator does not constitute
maltreatment under Article 919(6) of the New Civil Code.
Hence, the testamentary provisions in the will shall be
Examples: annulled but only to the extent that her legitime was
a. Daughter living with a impaired.
married man; The total omission of Elvira does not constitute preterition
b. Estafadora; because she is not a compulsory heir in the direct line.
c. Prostitutes; Only compulsory heirs in the direct line may be the
d. Drug dealers; subject of preterition. Not having been preterited, she will
e. Drug addicts. be entitled only to her legitime.
The legacy in favor of Rosa is void under Article 1028 for
being in consideration of her adulterous relation with the
There must be an element of testator. She is, therefore, disqualified to receive the
Habituality. legacy of 100,000 pesos. The legacy of 50,000 pesos in
favor of Ernie is not inofficious not having exceeded the
free portion. Hence, he shall be entitled to receive it.
(8) Conviction of a crime which carries with The institution of Baldo, which applies only to the free
it the penalty of civil interdiction. (756, 853, portion, shall be respected. In sum, the estate of
Lamberto will be distributed as follows:
674a)
Baldo-----------------450,000 Wilma---------------250,000
Elvira-----------------250,000 Ernie-----------------50,000
Notes: 1,000,000
a. Descendant convicted of a ALTERNATIVE ANSWER:
crime which carries with it The disinheritance of Wilma was effective because
the penalty of civil disrespect of, and raising of voice to, her father constitute
interdiction, not actually maltreatment under Article 919(6) of the New Civil Code.
She is, therefore, not entitled to inherit anything. Her
imposed;
inheritance will go to the other legal heirs. The total
b. Modifying circumstances omission of Elvira is not preterition because she is not a
disregarded. compulsory heir in the direct line. She will receive only
c. Victim can be any person. her legitime. The legacy in favor of Rosa is void under
Article
with the testator. She is, therefore, disqualified to receive
Disinheritance; Ineffective (1999) the legacy. Ernie will receive the legacy in his favor
Mr. Palma, widower, has three daughters D, D-l and D-2. because it is not inofficious. The institution of Baldo,
He executes a Will disinheriting D because she married a which applies only to the free portion, will be respected.
man he did not like, and instituting daughters D-1 and D-2 In sum, the estate of Lamberto shall be distributed as
as his heirs to his entire estate of P 1,000,000.00, Upon follows:
Mr, Palma's death, how should his estate be divided? Heir Legitime Legacy Institution TOTAL
Explain. (5%) Baldo 500,000 200.000 700,000 Elvira 250,000 250,000
SUGGESTED ANSWER: Ernie 50,000 50,000 TOTAL 750,000 50,000 200,000
This is a case of ineffective disinheritance because 1,000,000
marrying ANOTHER ALTERNATIVE ANSWER:
1028 for being in consideration of her adulterous relation Same answer as the first Alternative Answer except as to
a man that the father did not approve of is not a ground distribution. Justice Jurado solved this problem
for disinheriting D. Therefore, the institution of D-l and D- differently. In his opinion, the legitime of the heir who was
2 shall be annulled insofar as it prejudices the legitime of disinherited is distributed among the other compulsory
D, and the institution of D-l and D-2 shall only apply on heirs in proportion to their respective legitimes, while his
the free portion in the amount of P500,000.00. Therefore, share in the intestate portion. If any, is distributed among
D, D-l and D-2 will get their legitimes of P500.000.00 the other legal heirs by accretion under Article 1018 of
divided into three equal parts and D-l and D-2 will get a the NCC in proportion to their respective intestate shares.
reduced testamentary disposition of P250,000.00 each. In sum the distribution shall be as follows:
Hence, the shares will be:
D P166,666.66 Preterition; Disinheritance (2008)
D-l P166,666.66 + P250.000.00 No.X. Arthur executed a will which contained
D-2 P166,666.66 + P250,000.00 only: (i) a provision disinheriting his daughter
Disinheritance; Ineffective; Preterition (2000)
Bernica for running off with a married man,
In his last will and testament, Lamberto 1) disinherits his
daughter Wilma because "she is disrespectful towards and (ii) a provision disposing of his share in
me and raises her voice talking to me", 2) omits entirely the family house and lot in favor of his other
his spouse Elvira, 3) leaves a legacy of P100,000.00 to children Connie and Dora. He did not make
his mistress Rosa and P50,000.00 to his driver Ernie and any provisions in favor of his wife Erica,
4) institutes his son Baldo as his sole heir. How will you because as the will stated, she would anyway
distribute his estate of P1,000,000.00? (5%) get ½ of the house and lot as her conjugal
SUGGESTED ANSWER: share. The will was very brief and
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straightforward and both the above provisions a. Willfully left the children to
were contained in page 1, which Arthur and fend for themselves;
his instrumental witness, signed at the b. Abdication of parental
bottom. Page 2 contained the attestation duties;
clause and the signatures, at the bottom c. Only refers to abandoned
thereof, of the 3 instrumental witnesses which child;
included Lambert, the driver of Arthur; Yoly, d. “Inducing their daughters”
the family cook, and Attorney Zorba, the includes sons.
lawyer who prepared the will. There was a 3rd
page, but this only contained the notarial (2) When the parent or ascendant has been
acknowledgement. The attestation clause convicted of an attempt against the life of
stated the will was signed on the same the testator, his or her spouse,
occasion by Arthur and his instrumental descendants, or ascendants;
witnesses who all signed in the presence of
each other, and the notary public who (3) When the parent or ascendant has
notarized the will. There are no marginal accused the testator of a crime for which
signatures or pagination appearing on any of the law prescribes imprisonment for six
the 3 pages. Upon his death, it was discovered years or more, if the accusation has been
that apart from the house and lot, he had a P found to be false;
1 million account deposited with ABC bank.
(A). Was Erica preterited? (1%) SUGGESTED (4) When the parent or ascendant has been
ANSWER: Erica cannot be preterited. Art. convicted of adultery or concubinage with
854 of the Civil Code provides that only the spouse of the testator;
compulsory heirs in the direct line can be
preterited. (B). What other defects of the will, (5) When the parent or ascendant by fraud,
if any, can cause denial of probate? (2%) violence, intimidation, or undue influence
SUGGESTED ANSWER: causes the testator to make a will or to
The other defects of the will that can cause change one already made;
its denial are as follows: (a) Atty. Zorba, the
one who prepared the will was one of the
(6) The loss of parental authority for causes
three witnesses, violating the three-
specified in this Code;
witnesses rule; (b) no marginal signature at
the last page; (c ) the attestation did not
state the number of pages upon which the Notes:
will is written; and, (d) no pagination a. Causes of loss of parental
authority—arts. 230, 231,
appearing correlatively in letters on the
upper part of the three pages (Azuela v. 232 of the FamCod.
b. Ascendant of testator;
C.A., G.R. No. 122880, 12 Apr 2006 and
c. Spouse has given cause
cited cases therein, Art 805 and 806, Civil
for loss of parental
Code). (C). Was the disinheritance valid? (1%)
authority;
SUGGESTED ANSWER: Yes, the
d. No need for actual
disinheritance was valid. Art. 919, par 7,
deprivation, but it must
Civil Code provides that "when a child or exist. It means that the act
descendant leads a dishonorable or which may cause the loss
disgraceful life, like running off with a of parental authority is
married man, there is sufficient cause for committed
disinheritance."
(7) The refusal to support the children or
descendants without justifiable cause;
Art. 920. The following shall be sufficient
causes for the disinheritance of parents or (8) An attempt by one of the parents
ascendants, whether legitimate or illegitimate: against the life of the other, unless there
(1) When the parents have abandoned their has been a reconciliation between them.
children or induced their daughters to live a (756, 854, 674a)
corrupt or immoral life, or attempted against
their virtue; Notes –
a. Parent vs. parent;
Notes –
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b. Parents need not be legally
married;
c. No need for conviction, as
long as the heir can prove
that there was an attempt;
d. They need not be spouses,
but the testator must be a
common child.
Art. 921. The following shall be sufficient
causes for disinheriting a spouse:
Note: Spouse here means the legal spouse.
(1) When the spouse has been convicted of
an attempt against the life of the testator,
his or her descendants, or ascendants;
(2) When the spouse has accused the
testator of a crime for which the law
prescribes imprisonment of six years or
more, and the accusation has been found
to be false;
(3) When the spouse by fraud, violence,
intimidation, or undue influence cause the
testator to make a will or to change one
already made;
(4) When the spouse has given cause for
legal separation;
Notes:
a. Grounds for legal
separation are found in art.
55, FamCod.
b. No need for previous
conviction;
c. No need to prove grounds
unless contested;
d. Pending legal separation is
enough.
e. If there is already a decree,
ground is conclusive
Effect: offending spouse is
disqualified from inheriting
from the innocent spouse
and testamentary
dispositions made in favor
of the offending spouse are
revoked by operation of
law.
(5) When the spouse has given grounds for
the loss of parental authority;
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(6) Unjustifiable refusal to support the
children or the other spouse. (756, 855,
674a)
Art. 922. A subsequent reconciliation between the
offender and the offended person deprives the latter
of the right to disinherit, and renders ineffectual any
disinheritance that may have been made. (856)
Art. 1033. The cause of unworthiness shall be
without effect if the testator had knowledge
thereof at the time he made the will, or if, having
known of them subsequently, he should
condone them in writing.
REVOCATION OF DISINHERITANCE
1. Reconciliation;
2. Subsequent institution of the disinherited
heir;
3. Nullity of the will which contain the
disinheritance.
NOTE: Where the ground for disinheritance is also
a ground for unworthiness to succeed, the effects of
subsequent reconciliation upon heirs’ capacity to
succeed are –
a. If disinheritance has been made,
reconciliation applies, the disinheritance
becomes ineffective.
b. If disinheritance has not been made, the
rule on reconciliation does not apply, the
heir continues to be incapacitated to
succeed unless the testator pardoned him
(in writing) under art. 1033.
Art. 923. The children and descendants of the
person disinherited shall take his or her place and
shall preserve the rights of compulsory heirs with
respect to the legitime; but the disinherited parent
shall not have the usufruct or administration of the
property which constitutes the legitime. (857)
IMPERFECT DISINHERITANCE
Disinheritance which does not have one or more of
the essential requisites for its validity.
EFFECTS:
1. If the testator made disposition of the entire
estate; annulment of the testamentary
disposition only in so far as they prejudice
the legitime of the person disinherited –
disposition as regards the free portion is not
affected.
2. It the testator did not dispose of the free
portion; compulsory heir given all that he is
entitled to receive as if the disinheritance
has not been made, without prejudice to
lawful dispositions made by the testator in
favor of others.
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3. Devisees, legacies and other dispositions though only one of them should have been
shall be valid to such extent as will not negligent. (n)
impair the legitime.
Art. 928. The heir who is bound to deliver the
IMPERFECT PRETERITION legacy or devise shall be liable in case of eviction, if
DISINHERITANCE the thing is indeterminate and is indicated only by
Person disinherited may Person omitted must be its kind. (860)
be any compulsory heir a compulsory heir in the
direct line Art. 929. If the testator, heir, or legatee owns only a
Always express Always implied part of, or an interest in the thing bequeathed, the
Always intentional Unintentional legacy or devise shall be understood limited to such
Effect: partial annulment Effect: total annulment part or interest, unless the testator expressly
of institution of heirs of institution of heirs declares that he gives the thing in its entirety.
(864a)

SECTION 7. - Legacies and Devises
Art. 924. All things and rights which are within the
commerce of man may be bequeathed or devised.
(865a)
Art. 925. A testator may charge with legacies and
devises not only his compulsory heirs but also the
legatees and devisees.
The latter shall be liable for the charge only to the
extent of the value of the legacy or the devise
received by them. The compulsory heirs shall not
be liable for the charge beyond the amount of the
free portion given them. (858a)
PERSONS CHARGED WITH LEGACIES AND
DEVISEES:
1. Compulsory heirs;
2. Voluntary heir;
3. Legatee or devisee;
4. Estate.
 If the will is silent as to who shall pay or
deliver the legacy or devise, there is a
presumption that such legacy or devise
constitutes a charge against the decedent’s
estate.
 Since legacies and devisees are to be taken
from the disposable portion, the provisions on
institution on institution of heirs are generally
applicable to them.
Art. 926. When the testator charges one of the heirs
with a legacy or devise, he alone shall be bound.
Should he not charge anyone in particular, all shall
be liable in the same proportion in which they may
inherit. (859)
Art. 927. If two or more heirs take possession of the
estate, they shall be solidarily liable for the loss or
destruction of a thing devised or bequeathed, even
Art. 930. The legacy or devise of a thing belonging
to another person is void, if the testator erroneously
believed that the thing pertained to him. But if the
thing bequeathed, though not belonging to the
testator when he made the will, afterwards
becomes his, by whatever title, the disposition shall
take effect. (862a)
Donations; Formalities; In Writing (2007)
No. VIII. In 1986, Jennifer and Brad were
madly in love. In 1989, because a certain
Picasso painting reminded Brad of her,
Jennifer acquired it and placed it in his
bedroom. In 1990, Brad and Jennifer broke
up. While Brad was mending his broken heart,
he met Angie and fell in love. Because the
Picasso painting reminded Angie of him, Brad
in his will bequeathed the painting to Angie.
Brad died in 1995. Saddened by Brad's death,
Jennifer asked for the Picasso painting as a
remembrance of him. Angie refused and
claimed that Brad, in his will, bequeathed the
painting to her. Is Angie correct? Why or why
not? (10%) SUGGESTED ANSWER: NO. Angie
is not correct. The Picasso painting is not
given or donated by Jennifer to Brad. She
merely "placed it in his bedroom." Hence,
she is still the owner of the painting. Not
being the owner of the Picasso painting,
Brad cannot validly bequeath the same to
Angie (Art. 930, NCC). Even assuming that
the painting was impliedly given or donated
by Jennifer to Brad, the donation is
nevertheless void for not being in writing.
The Picasso painting must be worth more
than 5,000 pesos. Under Art. 748, NCC, the
donation and acceptance of a movable
worth more than 5,000 pesos must be in
writing, otherwise the donation is void. The
donation being void, Jennifer remained the
owner of the Picasso painting and Brad
could not have validly disposed of said
painting in favor of Angie in his will.

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ALTERNATIVE ANSWER:
YES. Angie is correct. Even assuming that
there was void donation because the same
was not in writing, Brad was in
uninterrupted possession of the Picasso
painting from 1989 to 1995, lasting for six
(6) years prior to his death. Brad has
already acquired ownership of the painting
through acquisitive prescription. Under Art.
1132, NCC, ownership of movables
prescribes through continuous possession
for four (4) years in good faith and for eight
(8) years without need of other conditions.
A void donation may be the basis of
possession in the concept of owner and of
just title for purposes of acquisitive
prescription.
Art. 931. If the testator orders that a thing belonging
to another be acquired in order that it be given to a
legatee or devisee, the heir upon whom the
obligation is imposed or the estate must acquire it
and give the same to the legatee or devisee; but if
the owner of the thing refuses to alienate the same,
or demands an excessive price therefor, the heir or
the estate shall only be obliged to give the just
value of the thing. (861a)
Art. 932. The legacy or devise of a thing which at
the time of the execution of the will already
belonged to the legatee or devisee shall be
ineffective, even though another person may have
some interest therein.
If the testator expressly orders that the thing be
freed from such interest or encumbrance, the
legacy or devise shall be valid to that extent. (866a)
Art. 933. If the thing bequeathed belonged to the
legatee or devisee at the time of the execution of
the will, the legacy or devise shall be without effect,
even though it may have subsequently alienated by
him.
If the legatee or devisee acquires it gratuitously
after such time, he can claim nothing by virtue of
the legacy or devise; but if it has been acquired by
onerous title he can demand reimbursement from
the heir or the estate. (878a)
Art. 934. If the testator should bequeath or devise
something pledged or mortgaged to secure a
recoverable debt before the execution of the will,
the estate is obliged to pay the debt, unless the
contrary intention appears.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
The same rule applies when the thing is pledged or
mortgaged after the execution of the will.
Any other charge, perpetual or temporary, with
which the thing bequeathed is burdened, passes
with it to the legatee or devisee. (867a)
Art. 935. The legacy of a credit against a third
person or of the remission or release of a debt of
the legatee shall be effective only as regards that
part of the credit or debt existing at the time of the
death of the testator.
In the first case, the estate shall comply with the
legacy by assigning to the legatee all rights of
action it may have against the debtor. In the second
case, by giving the legatee an acquittance, should
he request one.
In both cases, the legacy shall comprise all
interests on the credit or debt which may be due the
testator at the time of his death. (870a)
Art. 936. The legacy referred to in the preceding
article shall lapse if the testator, after having made
it, should bring an action against the debtor for the
payment of his debt, even if such payment should
not have been effected at the time of his death.
The legacy to the debtor of the thing pledged by
him is understood to discharge only the right of
pledge. (871)
Art. 937. A generic legacy of release or remission of
debts comprises those existing at the time of the
execution of the will, but not subsequent ones.
(872)
Art. 938. A legacy or devise made to a creditor shall
not be applied to his credit, unless the testator so
expressly declares.
In the latter case, the creditor shall have the right to
collect the excess, if any, of the credit or of the
legacy or devise. (837a)
Art. 939. If the testator orders the payment of what
he believes he owes but does not in fact owe, the
disposition shall be considered as not written. If as
regards a specified debt more than the amount
thereof is ordered paid, the excess is not due,
unless a contrary intention appears.
The foregoing provisions are without prejudice to
the fulfillment of natural obligations. (n)
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Art. 940. In alternative legacies or devises, the
choice is presumed to be left to the heir upon whom
the obligation to give the legacy or devise may be
imposed, or the executor or administrator of the
estate if no particular heir is so obliged.
If the heir, legatee or devisee, who may have been
given the choice, dies before making it, this right
shall pass to the respective heirs.
Once made, the choice is irrevocable.
In the alternative legacies or devises, except as
herein provided, the provisions of this Code
regulating obligations of the same kind shall be
observed, save such modifications as may appear
from the intention expressed by the testator. (874a)
Art. 941. A legacy of generic personal property shall
be valid even if there be no things of the same kind
in the estate.
A devise of indeterminate real property shall be
valid only if there be immovable property of its kind
in the estate.
The right of choice shall belong to the executor or
administrator who shall comply with the legacy by
the delivery of a thing which is neither of inferior nor
of superior quality. (875a)
Art. 942. Whenever the testator expressly leaves
the right of choice to the heir, or to the legatee or
devisee, the former may give or the latter may
choose whichever he may prefer. (876a)
Art. 943. If the heir, legatee or devisee cannot make
the choice, in case it has been granted him, his
right shall pass to his heirs; but a choice once made
shall be irrevocable. (877a)
Art. 944. A legacy for education lasts until the
legatee is of age, or beyond the age of majority in
order that the legatee may finish some professional,
vocational or general course, provided he pursues
his course diligently.
A legacy for support lasts during the lifetime of the
legatee, if the testator has not otherwise provided.
If the testator has not fixed the amount of such
legacies, it shall be fixed in accordance with the
social standing and the circumstances of the
legatee and the value of the estate.
If the testator or during his lifetime used to give the
legatee a certain sum of money or other things by
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
way of support, the same amount shall be deemed
bequeathed, unless it be markedly disproportionate
to the value of the estate. (879a)
Art. 945. If a periodical pension, or a certain annual,
monthly, or weekly amount is bequeathed, the
legatee may petition the court for the first
installment upon the death of the testator, and for
the following ones which shall be due at the
beginning of each period; such payment shall not
be returned, even though the legatee should die
before the expiration of the period which has
commenced. (880a)
Art. 946. If the thing bequeathed should be subject
to a usufruct, the legatee or devisee shall respect
such right until it is legally extinguished. (868a)
Art. 947. The legatee or devisee acquires a right to
the pure and simple legacies or devises from the
death of the testator, and transmits it to his heirs.
(881a)
Art. 948. If the legacy or device is of a specific and
determinate thing pertaining to the testator, the
legatee or devisee acquires the ownership thereof
upon the death of the testator, as well as any
growing fruits, or unborn offspring of animals, or
uncollected income; but not the income which was
due and unpaid before the latter's death.
From the moment of the testator's death, the thing
bequeathed shall be at the risk of the legatee or
devisee, who shall, therefore, bear its loss or
deterioration, and shall be benefited by its increase
or improvement, without prejudice to the
responsibility of the executor or administrator.
(882a)
Art. 949. If the bequest should not be of a specific
and determinate thing, but is generic or of quantity,
its fruits and interests from the time of the death of
the testator shall pertain to the legatee or devisee if
the testator has expressly so ordered. (884a)
Art. 950. If the estate should not be sufficient to
cover all the legacies or devises, their payment
shall be made in the following order:
(1) Remuneratory legacies or devises;
(2) Legacies or devises declared by the
testator to be preferential;
(3) Legacies for support;
(4) Legacies for education;
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(5) Legacies or devises of a specific,
determinate thing which forms a part of the
estate;
(6) All others pro rata. (887a)
Art. 951. The thing bequeathed shall be delivered
with all its accessories and accessories and in the
condition in which it may be upon the death of the
testator. (883a)
Art. 952. The heir, charged with a legacy or devise,
or the executor or administrator of the estate, must
deliver the very thing bequeathed if he is able to do
so and cannot discharge this obligation by paying
its value.
Legacies of money must be paid in cash, even
though the heir or the estate may not have any.
The expenses necessary for the delivery of the
thing bequeathed shall be for the account of the
heir or the estate, but without prejudice to the
legitime. (886a)
Art. 953. The legatee or devisee cannot take
possession of the thing bequeathed upon his own
authority, but shall request its delivery and
possession of the heir charged with the legacy or
devise, or of the executor or administrator of the
estate should he be authorized by the court to
deliver it. (885a)
Art. 954. The legatee or devisee cannot accept a
part of the legacy or devise and repudiate the other,
if the latter be onerous.
Should he die before having accepted the legacy or
devise, leaving several heirs, some of the latter may
accept and the others may repudiate the share
respectively belonging to them in the legacy or
devise. (889a)
Art. 955. The legatee or devisee of two legacies or
devises, one of which is onerous, cannot renounce
the onerous one and accept the other. If both are
onerous or gratuitous, he shall be free to accept or
renounce both, or to renounce either. But if the
testator intended that the two legacies or devises
should be inseparable from each other, the legatee
or devisee must either accept or renounce both.
Any compulsory heir who is at the same time a
legatee or devisee may waive the inheritance and
accept the legacy or devise, or renounce the latter
and accept the former, or waive or accept both.
(890a)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 956. If the legatee or devisee cannot or is
unwilling to accept the legacy or devise, or if the
legacy or devise for any reason should become
ineffective, it shall be merged into the mass of the
estate, except in cases of substitution and of the
right of accretion. (888a)
Art. 957. The legacy or devise shall be without
effect:
(1) If the testator transforms the thing
bequeathed in such a manner that it does
not retain either the form or the
denomination it had;
(2) If the testator by any title or for any
cause alienates the thing bequeathed or
any part thereof, it being understood that in
the latter case the legacy or devise shall be
without effect only with respect to the part
thus alienated. If after the alienation the
thing should again belong to the testator,
even if it be by reason of nullity of the
contract, the legacy or devise shall not
thereafter be valid, unless the reacquisition
shall have been effected by virtue of the
exercise of the right of repurchase;
(3) If the thing bequeathed is totally lost
during the lifetime of the testator, or after
his death without the heir's fault.
Nevertheless, the person obliged to pay the
legacy or devise shall be liable for eviction
if the thing bequeathed should not have
been determinate as to its kind, in
accordance with the provisions of Article
928. (869a)
GROUNDS FOR REVOCATION OF LEGACIES
AND DEVISEES:
1. Transformation of the thing;
2. Alienation;
3. Loss of the thing;
4. Other causes like –
a. Nullity of the will;
b. Noncompliance of suspensive
condition;
c. Sale of the thing bequeathed to pay
debts of the estate.
Art. 958. A mistake as to the name of the thing
bequeathed or devised, is of no consequence, if it is
possible to identify the thing which the testator
intended to bequeath or devise. (n)
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Art. 959. A disposition made in general terms in
favor of the testator's relatives shall be understood
to be in favor of those nearest in degree. (751)
NOTE: Other rules do not apply, but “proximity rule”
does.
2011 Bar Exam Question
(38) Fernando executed a will, prohibiting his
wife Marina from remarrying after his death,
at the pain of the legacy of P100 Million in her
favor becoming a nullity. But a year after
Fernando’s death, Marina was so overwhelmed
with love that she married another man. Is she
entitled to the legacy, the amount of which is
well within the capacity of the disposable free
portion of Fernando’s estate? (A) Yes, since the
prohibition against remarrying is absolute, it
is deemed not written.
(B) Yes, because the prohibition is inhuman
and oppressive and violates Marina’s rights as
a free woman. (C) No, because the nullity of
the prohibition also nullifies the legacy. (D)
No, since such prohibition is authorized by
law and is not repressive; she could
remarry but must give up the money.
CHAPTER 3
LEGAL OR INTESTATE SUCCESSION
SECTION 1. - General Provisions
BASIC PRINCIPLES IN INTESTATE
SUCCESSION:
1. Intestate heirs always related by blood.
Except:
a. Spouse;
b. Adoptive relation;
c. State.
2. Proximity rule applies – relative nearest in
degree excludes the more distant ones.
3. Direct line is always preferred over
collateral relatives.
4. Descending line is always preferred than
ascending line and collateral lines.
5. Rule of equal division – relatives in same
degree (same class) shall inherit in equal
shares.
Exception:
a. Descending line – difference in
class in the cases of legitimate or
illegitimate filiation.
I. In case of
paternal/maternal lines.
II. Collateral – half or full
blood.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
b. Ascending line – the shares are
divided equally between paternal
and maternal lines which could
result to unequal shares when
there is only one grandparent in the
maternal line while both
grandparents survived in the
paternal line.
NOTE: I.S.R. R.A.I Rule (Paras)
In all cases where there has been
institution of heirs, follow ISRAI. If the Institution
fails, Substitution occurs. If there is no substitute,
right of Representation occurs in the direct
descending line to the legitime if the vacancy is
caused by predecease, incapacity, or
disinheritance. The right of Accretion applies to the
free portion when the requisites in art. 1016 are
present. If there is no substitute, and the right of
representation or accretion does not apply, the Rule
of Intestacy shall take over.
Art. 960. Legal or intestate succession takes place:
(1) If a person dies without a will, or with a
void will, or one which has subsequently
lost its validity;
(2) When the will does not institute an heir
to, or dispose of all the property belonging
to the testator. In such case, legal
succession shall take place only with
respect to the property of which the testator
has not disposed;
(3) If the suspensive condition attached to
the institution of heir does not happen or is
not fulfilled, or if the heir dies before the
testator, or repudiates the inheritance, there
being no substitution, and no right of
accretion takes place;
(4) When the heir instituted is incapable of
succeeding, except in cases provided in
this Code. (912a)
Art. 961. In default of testamentary heirs, the law
vests the inheritance, in accordance with the rules
hereinafter set forth, in the legitimate and
illegitimate relatives of the deceased, in the
surviving spouse, and in the State. (913a)
Art. 962. In every inheritance, the relative nearest in
degree excludes the more distant ones, saving the
right of representation when it properly takes place.
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Relatives in the same degree shall inherit in equal
shares, subject to the provisions of article 1006 with
respect to relatives of the full and half blood, and of
Article 987, paragraph 2, concerning division
between the paternal and maternal lines. (912a)
CAUSES OF INTESTATE SUCCESSION: (in
general)
1. In the absence of applicable will –
a. Annulment of institution of heirs;
b. When will loses its validity;
c. Testator did not make any will;
d. Will is not probated;
e. Revocation;
f. Preterition.
2. In the absence of qualified heirs –
a. Ineffective disinheritance;
b. Repudiation (of one or all);
c. Incapacity;
d. Disinheritance;
e. Institutions subject to condition.
I. Suspensive condition did
not happen;
II. Resolutory condition
happens;
III. Expiration of term or period
of institution.
SUBSECTION 1. - Relationship
Art. 963. Proximity of relationship is determined by
the number of generations. Each generation forms
a degree. (915)
Art. 964. A series of degrees forms a line, which
may be either direct or collateral.
A direct line is that constituted by the series of
degrees among ascendants and descendants.
A collateral line is that constituted by the series of
degrees among persons who are not ascendants
and descendants, but who come from a common
ancestor. (916a)
Art. 965. The direct line is either descending or
ascending.
The former unites the head of the family with those
who descend from him.
The latter binds a person with those from whom he
descends. (917)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 966. In the line, as many degrees are counted
as there are generations or persons, excluding the
progenitor.
In the direct line, ascent is made to the common
ancestor. Thus, the child is one degree removed
from the parent, two from the grandfather, and three
from the great-grandparent.
In the collateral line, ascent is made to the common
ancestor and then descent is made to the person
with whom the computation is to be made. Thus, a
person is two degrees removed from his brother,
three from his uncle, who is the brother of his
father, four from his first cousin, and so forth. (918a)
Art. 967. Full blood relationship is that existing
between persons who have the same father and the
same mother.
Half blood relationship is that existing between
persons who have the same father, but not the
same mother, or the same mother, but not the
same father. (920a)
Art. 968. If there are several relatives of the same
degree, and one or some of them are unwilling or
incapacitated to succeed, his portion shall accrue to
the others of the same degree, save the right of
representation when it should take place. (922)
Art. 969. If the inheritance should be repudiated by
the nearest relative, should there be one only, or by
all the nearest relatives called by law to succeed,
should there be several, those of the following
degree shall inherit in their own right and cannot
represent the person or persons repudiating the
inheritance. (923)
2011 Bar Exam
(74) T died intestate, leaving an estate of
P9,000,000. He left as heirs three legitimate
children, namely, A, B, and C. A has two children, D
and E. Before he died, A irrevocably repudiated his
inheritance from T in a public instrument filed with
the court. How much, if any, will D and E, as A’s
children, get from T’s estate? (A) Each of D and E
will get P1,500,000 by right of representation since
their father repudiated his inheritance. (B) Each of
D and E will get P2,225,000 because they will
inherit from the estate equally with B and C. (C) D
and E will get none because of the repudiation;
"B" and "C" will get A’s share by right of
accretion. (D) Each of D and E will get P2,000,000
because the law gives them some advantage due
to the demise of "A".
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SUBSECTION 2. - Right of Representation
Art. 970. Representation is a right created by fiction
of law, by virtue of which the representative is
raised to the place and the degree of the person
represented, and acquires the rights which the latter
would have if he were living or if he could have
inherited. (942a)
REPRESENTATION OCCURS:
1. Predecease;
2. Incapacity or unworthiness;
3. Disinheritance.
Note: There is no representation in case of
repudiation; ACCRETION instead takes place.
Art. 971. The representative is called to the
succession by the law and not by the person
represented. The representative does not succeed
the person represented but the one whom the
person represented would have succeeded. (n)
Art. 972. The right of representation takes place in
the direct descending line, but never in the
ascending.
In the collateral line, it takes place only in favor of
the children of brothers or sisters, whether they be
of the full or half blood. (925)
Art. 973. In order that representation may take
place, it is necessary that the representative himself
be capable of succeeding the decedent. (n)
Art. 974. Whenever there is succession by
representation, the division of the estate shall be
made per stirpes, in such manner that the
representative or representatives shall not inherit
more than what the person they represent would
inherit, if he were living or could inherit. (926a)
Art. 975. When children of one or more brothers or
sisters of the deceased survive, they shall inherit
from the latter by representation, if they survive with
their uncles or aunts. But if they alone survive, they
shall inherit in equal portions. (927)
2013 Exam MCQ (October 13, 2013)
I. Armand died intestate. His full-blood
brothers, Bobby and Conrad, and half-blood
brothers, Danny, Edward and Floro, all
predeceased him. The following are the
surviving relatives: 1. Benny and Bonnie,
legitimate children of Bobby; 2. Cesar,
legitimate child of Conrad; 3. Dante,
illegitimate child of Danny; 4. Ernie, adopted
child of Edward; and 5. Felix, grandson of
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Floro. The net value of Armand's estate is
Pl,200,000. I. (1) How much do Benny and
Bonnie stand to inherit by right of
representation? (1%) (A) P200,000 (B)
P300,000 (C) P400,000 (D) P150,000 (E) None
of the above. SUGGESTED ANSWER: (E)
None of the above. If all the
brothers/sisters are disqualified to inherit,
the nephews/nieces inherit per capita, and
not by right of representation (Art 975,
Civil Code)
I. (2) How much is Dante's share in the net
estate? (1%) (A) P150,000. (B) P200,000. (C)
P300,000. (D) P400,000. (E) None of the
above. SUGGESTED ANSWER: E. None of
the above. There is no showing that Danny
is an illegitimate half-blood brother of
Armand. In the absence of proof to the
contrary, the law presumes that the
relationship is legitimate. Thus, Dante, an
illegitimate child of Danny, is barred from
inheriting from Armand pursuant to the
“iron curtain rule” which disqualifies an
illegitimate child from inheriting ab
intestao from the legitimate children and
relatives of his father or mother, and vice
versa (Art 992, Civil Code).
Art. 976. A person may represent him whose
inheritance he has renounced. (928a)
Note: although a renouncer cannot be
represented, he can represent the person whose
inheritance he has renounced (Sayson vs. CA,
205 SCRA 324).
Reason: He is not inheriting from the person
whose inheritance he has renounced but from the
person whose inheritance could have been
received by the person represented.
Art. 977. Heirs who repudiate their share may not
be represented. (929a)
Intestate Succession (1992)
F had three (3) legitimate children: A, B, and C. B has
one
(1) legitimate child X. C has two (2) legitimate children: Y
and Z. F and A rode together in a car and perished
together at the same time in a vehicular accident, F and A
died, each of them leaving substantial estates in
intestacy.
a) Who are the intestate heirs of F? What are their
respective fractional shares?
b) Who are the intestate heirs of A? What are their
respective fractional shares?
c) If B and C both predeceased F, who are F’s intestate
heirs? What are their respective fractional shares? Do
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they inherit in their own right or by representation? 3. Adoptive child – can neither represent nor
Explain your answer. be represented with respect to the parents
d) If B and C both repudiated their shares in the estate of of the adopter.
F who are F's intestate heirs? What are their respective
fractional shares? Do they inherit in their own right or by
representation? Explain your answer,
The rationale why an adopted child can
SUGGESTED ANSWER: neither represent nor be represented is
because the legal relationship created by
(a) B = 1/2 the adoption is strictly between the adopter
and the adopted (Teotica, vs. Del Val, 13
(b) B = 1/2 Z = 1/4 by representation of C C= 1/2 Article SCRA 406).
982 of the Civil Code provides that grandchildren inherit
by right of representation. NOTE: Adoptee may still, however, inherit
by representation of his biological parents
(c) X = 1/2 by representation of B C=l/2 Y = 1/4 by
to the estate of his biological grandparents.
representation of C
QUALIFICATIONS TO REPRESENT:
(d) X - 1/3 in his own right Y- 1/3 in his own right 2 - 1/3 in 1. The representative himself must have the
his own right capacity to inherit from the decedent.
2. The representative need not be qualified to
Article 977 of the Civil Code provides that heirs who inherit from the person represented. The
repudiate their share cannot be represented. reason is that the representative does not
inherit from the person represented.
IN WHAT KINDS OF SUCCESSION
REPRESENTATION OPERATES:
1. Legitimes –
SECTION 2. - Order of Intestate Succession
a. The children and descendants of
the person disinherited shall take
INTESTATE HEIRS:
his place and shall preserve the
1. Legitimate children/descendants;
rights of compulsory heir with
2. Illegitimate children/descendants;
respect to the legitime (art. 923).
3. Legitimate parents/ascendants;
b. And only when the heir to be
4. Illegitimate parents;
represented:
5. Surviving spouse;
I. Predecease, becomes
6. Brothers and sisters, nephews and nieces;
incapacitated, or was
7. Other collateral relatives up to the 5 th
disinherited by the testator.
degree;
II. Is a compulsory heir;
8. State.
III. No right of representation if
the heir to be represented
is a voluntary heir. Intestate Succession (1997)
"T" died intestate on 1 September 1997.He was survived
2. Intestate Succession – by M (his mother), W (his widow), A and B (his legitimate
Representation occurs in all intestate children), C (his grandson, being the legitimate son of B),
estate. All legal heirs may be represented D (his other grandson, being the son of E who was a
when proper. legitimate son of, and who predeceased, "T"), and F (his
grandson, being the son of G, a legitimate son who
Representation is not proper in – repudiated the inheritance from "T"). His distributable net
a. Repudiation; estate is P120.000.00. How should this amount be
shared in intestacy among the surviving heirs?
b. If decedent is legitimate, he can SUGGESTED ANSWER:
only be represented by legitimate The legal heirs are A, B, D, and W. C is excluded by B
descendants. who is still alive. D inherits in representation of E who
predeceased. F is excluded because of the repudiation of
G, the predecessor. M is excluded by the legitimate
REPRESENTATION OF ILLEGITIMATE AND children of
ADOPTED CHILDREN: T. The answer may be premised on two theories: the
1. Legitimate child – only legitimate children Theory of Exclusion and the Theory of Concurrence.
and descendants can represent him. Under the Theory of Exclusion the legitimes of the heirs
are accorded them and the free portion will be given
2. Illegitimate child – both legitimate and exclusively to the legitimate descendants. Hence under
illegitimate children/descendants can the Exclusion Theory: A will get P20.000.00. and P
represent him. 13.333.33 (1/3 of the free portion) B will get P 20,000.00.

JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 233

____________________________________________________________________________________________________
and P13. 333.33 (1/3 of the free portion) D will get
P20.000.00. and P13. 333.33 (1/3 of the free portion)
W, the widow is limited to the legitime of P20.000.00
Under the Theory of Concurrence. In addition to their
legitimes, the heirs of A, B, D and W will be given equal
shares in the free portions:
A: P20.000.00 plus P10.000.00 (1 /4 of the free portion)
B: P20,000.00 plus P10.000.00 (l/4 of the free portlon)
C: P20,000.00 plus P10.000.00 (1/4 of the free portion)
W: P20,000.00 plus P10,000.00 (l/4 of the free portion)
Alternative Answer: Shares in Intestacy T - decedent
Estate: P120.000.00 Survived by: M -
Mother............................None W -
Widow.............................P 30,000.00 A -
Son.................................P 30,000.00 B -
Son.................................P30.000.00 C - Grandson (son
of B).............None D - Grandson (son of E who
predeceased T)................P 30,000.00 F - Grandson (son
of G who repudiated the Inheritance
from"T").......................None
Explanation:
a) The mother (M) cannot inherit from T because
under Art. 985 the ascendants shall inherit in default of
legitimate children and descendants of the deceased.
b) The widow's share is P30.000.00 because under
Art, 996 it states that if the widow or widower and
legitimate children or descendants are left, the surviving
spouse has in the succession the same share as that of
be set aside as Mario's conjugal share from the
community
each of the children, c) C has no share because his
father is still alive hence succession by representation
shall not apply (Art. 975).
d) D inherits P30.000 which is the share of his
father E who predeceased T by virtue of Art. 981 on the
right of representation.
e) F has no share because his father G repudiated
the inheritance. Under Article 977 heirs who repudiate
their share may not be represented.
Intestate Succession (1998)
Enrique died, leaving a net hereditary estate of P1.2
million. He is survived by his widow, three legitimate
children, two legitimate grandchildren sired by a
legitimate child who predeceased him, and two
recognized illegitimate children. Distribute the estate in
intestacy. [5%]
SUGGESTED ANSWER:
Under the theory of Concurrence, the shares are as
follows: A (legitimate child) = P200,000 B (legitimate
child) = P200,000 C (legitimate child) = P200,000 D
(legitimate child) = O (predeceased] E (legitimate child of
D) = P100,000 - by right of representation F (legitimate
child of D) = P100,000 - by right of representation G
(illegitimate child) = P100,000 - 1/2 share of the legitimate
child H (illegitimate child) = P100,000 - 1/2 share of the
legitimate child W (Widow) = P200.000 - same share as
legitimate child
ANOTHER ANSWER:
Under the theory of Exclusion the free portion (P300,000)
is distributed only among the legitimate children and is
given to them in addition to their legitime. All other
Intestate heirs are entitled only to their respective
legitimes. The distribution is as follows:
Legitime Free Portion Total
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
A [legitimate child) P150.000 + P 75,000 - P225.000 B
{legitimate child) P150.000 + P150.000 - P225.000 C
(legitimate child) P150.000 + P 75.000 - P225.000 D
(legitimate child) 0 0 0 E (legitimate child of D) P 75,000
+ P35.500 - P112,500 F (legitimate child of D) P
75.000 + P 37.500 - P112,500 G (illegitimate child) P
75.000 0 -P 75,500 H (illegitimate child) P 75.000 0
- P 75,500 W (Widow) P150,000 0 -P150.000
Intestate Succession (2008) No. VII. Ramon
Mayaman died intestate, leaving a net estate of
P10,000,000.00. Determine how much each
heir will receive from the estate: (A). If Ramon
is survived by his wife, three full-blood
brothers, two half-brothers, and one nephew
(the son of a deceased full-blood brother)?
Explain. (3%) SUGGESTED ANSWER: Having
died intestate, the estate of Ramon shall be
inherited by his wife and his full and half
blood siblings or their respective
representatives. In intestacy, if the wife
concurs with no one but the siblings of the
husband, all of them are the intestate heirs
of the deceased husband. The wife will
receive half of the intestate estate, while
the siblings or their respective
representatives, will inherit the other half
to be divided among them equally. If some
siblings are of the full-blood and the other
of the half blood, a half blood sibling will
receive half the share of a full-blood sibling.
(1). The wife of Ramon will, therefore,
receive one half (½) of the estate or the
amount of P5,000,000.00.
(2). The three (3) full-blood brothers, will,
therefore, receive P1,000,000.00 each. (3).
The nephew will receive P1,000,000.00 by
right of representation. (4). The two (2) half-
brothers will receive P500,000.00 each. (B).
If Ramon is survived by his wife, a half-sister,
and three nephews (sons of a deceased full-
blood brother)? Explain. (3%) SUGGESTED
ANSWER: The wife will receive one half
(1/2) of the estate or P5,000,000.00. The
other half shall be inherited by (1) the full-
blood brother, represented by his three
children, and (2) the half-sister. They will
divide the other half between them such
that the share of the half-sister is just half
the share of the full-blood brother. The
share of the full-blood brother shall in turn
be inherited by the three nephews in equal
shares by right of presentation. Therefore,
the three (3) nephews will receive
P1,111,111.10 each the half-sister will
receive the sum of P1,666,666.60.
SUBSECTION 1. - Descending Direct Line
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Art. 978. Succession pertains, in the first place, to
the descending direct line. (930)
Art. 979. Legitimate children and their descendants
succeed the parents and other ascendants, without
distinction as to sex or age, and even if they should
come from different marriages.
An adopted child succeeds to the property of the
adopting parents in the same manner as a
legitimate child. (931a)
Art. 980. The children of the deceased shall always
inherit from him in their own right, dividing the
inheritance in equal shares. (932)
Art. 981. Should children of the deceased and
descendants of other children who are dead,
survive, the former shall inherit in their own right,
and the latter by right of representation. (934a)
Art. 982. The grandchildren and other descendants
shall inherit by right of representation, and if any
one of them should have died, leaving several
heirs, the portion pertaining to him shall be divided
among the latter in equal portions. (933)
Art. 983. If illegitimate children survive with
legitimate children, the shares of the former shall be
in the proportions prescribed by Article 895. (n)
"Article 176. Illegitimate children shall use the
surname and shall be under the parental
authority of their mother, and shall be entitled to
support in conformity with this Code. However,
illegitimate children may use the surname of
their father if their filiation has been expressly
recognized by the father through the record of
birth appearing in the civil register, or when an
admission in a public document or private
handwritten instrument is made by the father.
Provided, the father has the right to institute an
action before the regular courts to prove non-
filiation during his lifetime. The legitime of each
illegitimate child shall consist of one-half of the
legitime of a legitimate child." (as amended by
RA 9255, Feb. 24, 2004)
Heirs; Intestate Heirs; Shares (2003)
Luis was survived by two legitimate children, two
illegitimate children, his parents, and two brothers. He left
an estate of P1 million. Luis died intestate. Who are his
intestate heirs, and how much is the share of each in his
estate?
SUGGESTED ANSWER:
The intestate heirs are the two (2) legitimate children and
the two (2) illegitimate children. In intestacy the estate of
the decedent is divided among the legitimate and
illegitimate children such that the share of each
illegitimate child is one
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
-half the share of each legitimate child.
Their share are : For each legitimate child – P333,333.33
For each illegitimate child – P166,666.66
(Article 983, New Civil Code; Article 176, Family Code)
Art. 984. In case of the death of an adopted child,
leaving no children or descendants, his parents and
relatives by consanguinity and not by adoption,
shall be his legal heirs. (n)
SUBSECTION 2. - Ascending Direct Line
Art. 985. In default of legitimate children and
descendants of the deceased, his parents and
ascendants shall inherit from him, to the exclusion
of collateral relatives. (935a)
Art. 986. The father and mother, if living, shall
inherit in equal shares.
Should one only of them survive, he or she shall
succeed to the entire estate of the child. (936)
Art. 987. In default of the father and mother, the
ascendants nearest in degree shall inherit.
Should there be more than one of equal degree
belonging to the same line they shall divide the
inheritance per capita; should they be of different
lines but of equal degree, one-half shall go to the
paternal and the other half to the maternal
ascendants. In each line the division shall be made
per capita. (937)
SUBSECTION 3. - Illegitimate Children
Art. 988. In the absence of legitimate descendants
or ascendants, the illegitimate children shall
succeed to the entire estate of the deceased.
(939a)
Art. 989. If, together with illegitimate children, there
should survive descendants of another illegitimate
child who is dead, the former shall succeed in their
own right and the latter by right of representation.
(940a)
Art. 990. The hereditary rights granted by the two
preceding articles to illegitimate children shall be
transmitted upon their death to their descendants,
who shall inherit by right of representation from their
deceased grandparent. (941a)
Art. 991. If legitimate ascendants are left, the
illegitimate children shall divide the inheritance with
them, taking one-half of the estate, whatever be the
number of the ascendants or of the illegitimate
children. (942-841a)
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Legitimes; Compulsory Heirs (2012)
No.VIII.b) How can RJP distribute his estate by
will, if his heirs are JCP, his wife; HBR and
RVC, his parents; and an illegitimate child,
SGO? SUGGESTED ANSWER: A testator may
dispose of by will the free portion of his
estate. Since the legitime of JCP is 1/8 of
the estate, SGO is ¼ of the estate and that
of HBR and RVC is ½ of the hereditary
estate under Art 889 of the NCC, the
remaining 1/8 of the estate is the free
portion which the testator may dispose of
by will. Legitime; Compulsory Heirs (2008)
No. XII. Ernesto, an overseas Filipino worker,
was coming home to the Philippines after
working for so many years in the Middle East.
He had saved P100.000 in his saving account
in Manila which intended to use to start a
business in his home country. On his flight
home, Ernesto had a fatal heart attack. He left
behind his widowed mother, his common-law
wife and their twins sons. He left no will, no
debts, no other relatives and no other
properties except the money in his saving
account. Who are the heirs entitled to inherint
from him and how much should each
receive?(3%) SUGGESTED ANSWER:
The mother and twin sons are entitled to
inherit from Ernesto. Art. 991 of the Civil
Code, provides that if legitimate
ascendants are left, the twin sons shall
divide the inheritance with them taking
one-half of the estate. Thus, the widowed
mother gets P50,000.00 while the twin
sons shall receive P25,000.00 each. The
common-law wife cannot inherit from him
because when the law speaks "widow or
widower" as a compulsory heir, the law
refers to a legitimate spouse (Art. 887, par
3, Civil Code).
Art. 992. An illegitimate child has no right to inherit
ab intestato from the legitimate children and
relatives of his father or mother; nor shall such
children or relatives inherit in the same manner
from the illegitimate child. (943a)
Heirs; Representation; Iron-Curtain Rule
(2012) No.VIII.a) Ricky and Arlene are
married. They begot Franco during their
marriage. Franco had an illicit relationship
with Audrey and out of which, they begot
Arnel. Frnaco predeceased Ricky, Arlene and
Arnel. Before Ricky died, he executed a will
which when submitted to probate was opposed
by Arnel on the ground that he should be
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
given the share of his father, Franco. Is the
opposition of Arnel correct? Why? (5%)
SUGGESTED ANSWER: No, his opposition is
not correct. Arnel cannot inherit from
Ricky in the representation of his father
Franco. In representation, the
representative must not only be a legal heir
of the person he is representing, he must
also be a legal heir of the decedent he seeks
to inherit from.
While Arnel is a legal heir of Franco, he is
not a legal heir of Ricky because under Art
992 of the NCC, an illegitimate child has no
right to inherit ab intestato from the
legitimate children and relatives of his
father or mother. Arnel is disqualified to
inherit from Ricky because Arnel is an
illegitimate child of Franco and Ricky is a
legitimate relative of Franco.
Barrier between illegitimate & legitimate relatives
(1993)
A is the acknowledged natural child of B who died when
A was already 22 years old. When B's full blood brother,
C, died he (C) was survived by his widow and four
children of his other brother D. Claiming that he is entitled
to inherit from his father's brother C. A brought suit to
obtain his share in the estate of C. Will his action
prosper?
SUGGESTED ANSWER:
No, the action of A will not prosper. On the premise that
B, C and D are legitimate brothers, as an illegitimate child
of B, A cannot inherit in intestacy from C who is a
legitimate brother of B. Only the wife of C in her own right
and the legitimate relatives of C (i.e. the children of D as
C's How will you rule on Jorge's opposition to the probate
of legitimate nephews inheriting as collateral relatives)
can inherit in intestacy. (Arts. 992, 1001, 1OO5 and 975,
Civil Code)
ALTERNATIVE ANSWER:
The action of A will not prosper. Being an illegitimate, he
is barred by Article 992 of the Civil Code from inheriting
ab intestato from the legitimate relatives of his father.
Barrier between illegitimate & legitimate relatives
(1996)
Cristina the illegitimate daughter of Jose and Maria, died
intestate, without any descendant or ascendant. Her
valuable estate is being claimed by Ana, the legitimate
daughter of Jose, and Eduardo, the legitimate son of
Maria. Is either, both, or neither of them entitled to
inherit? Explain.
SUGGESTED ANSWER:
Neither Ana nor Eduardo is entitled to inherit of ab
intestato from Cristina. Both are legitimate relatives of
Cristina's illegitimate parents and therefore they fall under
the prohibition prescribed by Art. 992, NCC (Manuel v.
Ferrer, 242 SCRA 477; Diaz v. Court of Appeals, 182
SCRA 427).
Intestate Succession (2000)
Eugenio died without issue, leaving several parcels of
land in Bataan. He was survived by Antonio, his
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legitimate brother; Martina, the only daughter of his
predeceased sister Mercedes; and five legitimate children
of Joaquin, another predeceased brother. Shortly after
Eugenio's death, Antonio also died, leaving three
legitimate children. Subsequently, Martina, the children of
Joaquin and the children of Antonio executed an
extrajudicial settlement of the estate of Eugenio, dividing
it among themselves. The succeeding year, a petition to
annul the extrajudicial settlement was filed by Antero, an
illegitimate son of Antonio, who claims he is entitled to
share in the estate of Eugenio. The defendants filed a
motion to dismiss on the ground that Antero is barred by
Article 992 of the Civil Code from inheriting from the
legitimate brother of his father. How will you resolve the
motion? (5%)
SUGGESTED ANSWER:
The motion to dismiss should be granted. Article 992
does not apply. Antero is not claiming any inheritance
from Eugenio. He is claiming his share in the inheritance
of his father consisting of his father's share in the
inheritance of
Eugenio (Dela Merced v. Dela Merced, Gr No. 126707,
25
5M inherited by Mrs. Luna from Mr. Luna will be inherited
February 1999).
ALTERNATIVE ANSWER:
It depends. If Antero was not acknowledged by Antonio,
the motion to dismiss should be granted because Antero
is not a legal heir of Antonio. If Antero was
acknowledged, the motion should be denied because
Article 992 is not applicable. This is because Antero is
claiming his inheritance from his illegitimate father, not
from Eugenio.
Intestate Succession; Rights of
Representation: Illegitimate, Adopted
Child; Iron Curtain Rule (2007) No. X. For
purpose of this question, assume all
formalities and procedural requirements have
been complied with.
In 1970, Ramon and Dessa got married. Prior
to their marriage, Ramon had a child, Anna. In
1971 and 1972, Ramon and Dessa legally
adopted Cherry and Michelle respectively. In
1973, Dessa died while giving birth to Larry
Anna had a child, Lia. Anna never married.
Cherry, on the other hand, legally adopted
Shelly. Larry had twins, Hans and Gretel, with
his girlfriend, Fiona. In 2005, Anna, Larry and
Cherry died in a car accident. In 2007, Ramon
died. Who may inherit from Ramon and who
may not? Give your reason briefly. (10%)
SUGGESTED ANSWER: The following may
inherit from Ramon: (1). Michelle, as an
adopted child of Ramon, will inherit as a
legitimate child of Ramon. As an adopted
child, Michelle has all the rights of a
legitimate child (Sec 18, Domestic
Adoption Law). (2). Lia will inherit in
representation of Anna. Although Lia is an
illegitimate child, she is not barred by
Articles 992, because her mother Anna is
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
an illegitimate herself. She will represent
Anna as regards Anna's legitime under Art.
902, NCC and as regards Anna's intestate
share under Art. 990, NCC. The following
may not inherit from Ramon:
(1). Shelly, being an adopted child, she
cannot represent Cherry. This is because
adoption creates a personal legal relation
only between the adopter and the adopted.
The law on representation requires the
representative to be a legal heir of the
person he is representing and also of the
person from whom the person being
represented was supposed to inherit. While
Shelly is a legal heir of Cherry, Shelly is not
a legal heir of Ramon. Adoption created a
purely personal legal relation only between
Cherry and Shelly. (2). Hans and Gretel are
barred from inheriting from Ramon under
Art. 992, NCC. Being illegitimate children,
they cannot inherit ab intestao from
Ramon.
ALTERNATIVE ANSWER:
The problem expressly mentioned the dates
of the adoption of Cherry and Michelle as
1971 and 1972. During that time, adoption
was governed by the New Civil Code. Under
the New Civil Code, husband and wife were
allowed to adopt separately or not jointly
with the other spouse. And since the
problem does not specifically and
categorically state, it is possible to
construe the use of the word "respectively"
in the problem as indicative of the
situation that Cherry was adopted by
Ramon alone and Michelle was adopted by
Dessa alone. In such case of separate
adoption the alternative answer to the
problem will be as follows: Only Lia will
inherit from Ramon in representation of
Ramon's illegitimate daughter Anna.
Although Lia is an illegitimate child, she is
not barred from inheriting from Ramon
because her mother is herself illegitimate.
Shelly cannot inherit in representation of
Cherry because Shelly is just an adopted
child of Cherry. In representation, the
representative must not only be a legal heir
of the person he is representing but also of
the decedent from whom the represented
person is supposed to inherit. In the case of
Shelly, while she is a legal heir of Cherry by
virtue of adoption, she is not a legal heir of
Ramon. Adoption creates a personal legal
relation only between the adopting parent
and the adopted child (Teotico v. Del Val,
13 SCRA 406, 1965. Michelle cannot
inherit from Ramon, because she was
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adopted not by Ramon but by Dessa. In the
eyes of the law, she is not related to Ramon
at all. Hence, she is not a legal heir of
Ramon. Hans and Gretel are not entitled to
inherit from Ramon, because they are
barred by Art. 992 NCC. Being illegitimate
children of Larry, they cannot inherit from
the legitimate relatives of their father
Larry. Ramon is a legitimate relative of
Larry who is the legitimate father
Art. 993. If an illegitimate child should die without
issue, either legitimate or illegitimate, his father or
mother shall succeed to his entire estate; and if the
child's filiation is duly proved as to both parents,
who are both living, they shall inherit from him
share and share alike. (944)
Art. 994. In default of the father or mother, an
illegitimate child shall be succeeded by his or her
surviving spouse who shall be entitled to the entire
estate.
If the widow or widower should survive with
brothers and sisters, nephews and nieces, she or
he shall inherit one-half of the estate, and the latter
the other half. (945a)
SUBSECTION 4. - Surviving Spouse
Art. 995. In the absence of legitimate descendants
and ascendants, and illegitimate children and their
descendants, whether legitimate or illegitimate, the
surviving spouse shall inherit the entire estate,
without prejudice to the rights of brothers and
sisters, nephews and nieces, should there be any,
under article 1001. (946a)
Amount of Successional Rights (2004)
Mr. XT and Mrs. YT have been married for 20 years.
Suppose the wife, YT, died childless, survived only by her
husband, XT. What would be the share of XT from her
estate as inheritance? Why? Explain. (5%)
SUGGESTED ANSWER:
Under the Civil Code, the widow or widower is a legal and
compulsory heir of the deceased spouse. If the widow is
the only surviving heir, there being no legitimate
ascendants, descendants, brothers, and sisters, nephews
and nieces, she gets the entire estate.
Art. 996. If a widow or widower and legitimate
children or descendants are left, the surviving
spouse has in the succession the same share as
that of each of the children. (834a)
Intestate Succession (2008) No.X. Arthur
executed a will which contained only: (i) a
provision disinheriting his daughter Bernica
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
for running off with a married man, and (ii) a
provision disposing of his share in the family
house and lot in favor of his other children
Connie and Dora. He did not make any
provisions in favor of his wife Erica, because
as the will stated, she would anyway get ½ of
the house and lot as her conjugal share. The
will was very brief and straightforward and
both the above provisions were contained in
page 1, which Arthur and his instrumental
witness, signed at the bottom. Page 2
contained the attestation clause and the
signatures, at the bottom thereof, of the 3
instrumental witnesses which included
Lambert, the driver of Arthur; Yoly, the family
cook, and Attorney Zorba, the lawyer who
prepared the will. There was a 3rd page, but
this only contained the notarial
acknowledgement. The attestation clause
stated the will was signed on the same
occasion by Arthur and his instrumental
witnesses who all signed in the presence of
each other, and the notary public who
notarized the will. There are no marginal
signatures or pagination appearing on any of
the 3 pages. Upon his death, it was discovered
that apart from the house and lot, he had a P
1 million account deposited with ABC bank.
(D). How should the house and lot, and the
cash be distributed? (1%)
SUGGESTED ANSWER: Since the probate of
the will cannot be allowed, the rules on
intestate succession apply. Under Art. 996
of the Civil Code, if a widow or widower and
legitimate children or descendants are left,
the surviving spouse has the same share as
of the children. Thus, ownership over the
house and lot will be created among wife
Erica and her children Bernice, Connie and
Dora. Similarly, the amount of P 1 million
will be equally divided among them.
Art. 997. When the widow or widower survives with
legitimate parents or ascendants, the surviving
spouse shall be entitled to one-half of the estate,
and the legitimate parents or ascendants to the
other half. (836a)
Intestate Succession (1999)
Mr. and Mrs. Cruz, who are childless, met with a serious
motor vehicle accident with Mr. Cruz at the wheel and
Mrs. Cruz seated beside him, resulting in the instant
death of Mr. Cruz. Mrs. Cruz was still alive when help
came but she also died on the way to the hospital. The
couple acquired properties worth One Million
(P1,000,000.00) Pesos during their marriage, which are
being claimed by the parents of both spouses in equal
shares. Is the claim of both sets of parents valid and
why? (3%)
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SUGGESTED ANSWER:
(a) No, the claim of both parents is not valid. When Mr.
Cruz died, he was succeeded by his wife and his parents
as his intestate heirs who will share his estate equally.
His estate was 0.5 Million pesos which is his half share in
the absolute community amounting to 1 Million Pesos.
His wife, will, therefore, inherit O.25 Million Pesos and his
parents will inherit 0.25 Million Pesos.
When Mrs. Cruz died, she was succeeded by her parents
as her intestate heirs. They will inherit all of her estate
consisting of her 0.5 Million half share in the absolute
community and her 0.25 Million inheritance from her
husband, or a total of 0.750 Million Pesos.
In sum, the parents of Mr. Cruz will inherit 250,000 Pesos
while the parents of Mrs. Cruz will inherit 750,000 Pesos.
Art. 998. If a widow or widower survives with
illegitimate children, such widow or widower shall
be entitled to one-half of the inheritance, and the
illegitimate children or their descendants, whether
legitimate or illegitimate, to the other half. (n)
Art. 999. When the widow or widower survives with
legitimate children or their descendants and
illegitimate children or their descendants, whether
legitimate or illegitimate, such widow or widower
shall be entitled to the same share as that of a
legitimate child. (n)
Art. 1000. If legitimate ascendants, the surviving
spouse, and illegitimate children are left, the
ascendants shall be entitled to one-half of the
inheritance, and the other half shall be divided
between the surviving spouse and the illegitimate
children so that such widow or widower shall have
one-fourth of the estate, and the illegitimate children
the other fourth. (841a)
Art. 1001. 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. (953, 837a)
Intestate Succession (1998)
Tessie died survived by her husband Mario, and two
nieces, Michelle and Jorelle, who are the legitimate
children of an elder sister who had predeceased her. The
only property she left behind was a house and lot worth
two million pesos, which Tessie and her husband had
acquired with the use of Mario's savings from his income
as a doctor. How much of the property or its value, if any,
may Michelle and Jorelle claim as their hereditary
shares? [5%]
SUGGESTED ANSWER:
Article 1001 of the Civil Code provides, "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." Tessie's gross estate consists of a
house and lot acquired during her marriage, making it
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
part of the community property. Thus, one-half of the said
property would have to
property. The other half, amounting to one million pesos,
is her conjugal share (net estate), and should be
distributed to her intestate heirs. Applying the above
provision of law, Michelle and Jorelle, Tessie's nieces,
are entitled to one-half of her conjugal share worth one
million pesos, or 500,000 pesos, while the other one-half
amounting to P500,000 will go to Mario, Tessie's
surviving spouse. Michelle and Jorelle are then entitled to
P250,000 pesos each as their hereditary share.
Art. 1002. 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. (n)
SUBSECTION 5. - Collateral Relatives
Art. 1003. 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. (946a)
Art. 1004. Should the only survivors be brothers
and sisters of the full blood, they shall inherit in
equal shares. (947)
Art. 1005. 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, the former shall inherit per capita, and
the latter per stirpes. (948)
Art. 1006. Should brother and sisters of the full
blood survive together with brothers and sisters of
the half blood, the former shall be entitled to a
share double that of the latter. (949)
Art. 1007. In case brothers and sisters of the half
blood, some on the father's and some on the
mother's side, are the only survivors, all shall inherit
in equal shares without distinction as to the origin of
the property. (950)
Art. 1008. Children of brothers and sisters of the
half blood shall succeed per capita or per stirpes, in
accordance with the rules laid down for the brothers
and sisters of the full blood. (915)
Art. 1009. Should there be neither brothers nor
sisters nor children of brothers or sisters, the other
collateral relatives shall succeed to the estate.
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The latter shall succeed without distinction of lines
or preference among them by reason of relationship
by the whole blood. (954a)
Art. 1010. The right to inherit ab intestato shall not
extend beyond the fifth degree of relationship in the
collateral line. (955a)
SUBSECTION 6. - The State
Art. 1011. In default of persons entitled to succeed
in accordance with the provisions of the preceding
Sections, the State shall inherit the whole estate.
(956a)
Art. 1012. In order that the State may take
possession of the property mentioned in the
preceding article, the pertinent provisions of the
Rules of Court must be observed. (958a)
Note: For more reference, see Rule 91, Rules of
Court in REMEDIAL LAW REVIEWER.
Art. 1013. After the payment of debts and charges,
the personal property shall be assigned to the
municipality or city where the deceased last resided
in the Philippines, and the real estate to the
municipalities or cities, respectively, in which the
same is situated.
If the deceased never resided in the Philippines, the
whole estate shall be assigned to the respective
municipalities or cities where the same is located.
Such estate shall be for the benefit of public
schools, and public charitable institutions and
centers, in such municipalities or cities. The court
shall distribute the estate as the respective needs of
each beneficiary may warrant.
The court, at the instance of an interested party, or
on its own motion, may order the establishment of a
permanent trust, so that only the income from the
property shall be used. (956a)
Art. 1014. If a person legally entitled to the estate of
the deceased appears and files a claim thereto with
the court within five years from the date the
property was delivered to the State, such person
shall be entitled to the possession of the same, or if
sold the municipality or city shall be accountable to
him for such part of the proceeds as may not have
been lawfully spent. (n)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
CHAPTER 4
PROVISIONS COMMON TO TESTATE AND
INTESTATE SUCCESSIONS
SECTION 1. - Right of Accretion
Art. 1015. Accretion is a right by virtue of which,
when two or more persons are called to the same
inheritance, devise or legacy, the part assigned to
the one who renounces or cannot receive his share,
or who died before the testator, is added or
incorporated to that of his co-heirs, co-devisees, or
co-legatees. (n)
RIGHT TO ACCRETION:
1. In testamentary succession –
a. Predecease;
b. Incapacity;
c. Repudiation;
d. Non-fulfillment of suspensive
condition imposed upon the
instituted heir;
e. Ineffective testamentary
disposition.
2. In intestate succession –
a. Predecease of a legal heir (if
representation is not proper);
b. Incapacity of legal heir (if
representation is not proper);
c. Repudiation by a legal heir.
Art. 1016. In order that the right of accretion may
take place in a testamentary succession, it shall be
necessary:
(1) That two or more persons be called to
the same inheritance, or to the same
portion thereof, pro indiviso; and
(2) That one of the persons thus called die
before the testator, or renounce the
inheritance, or be incapacitated to receive
it. (928a)
Art. 1017. The words "one-half for each" or "in
equal shares" or any others which, though
designating an aliquot part, do not identify it by such
description as shall make each heir the exclusive
owner of determinate property, shall not exclude the
right of accretion.
In case of money or fungible goods, if the share of
each heir is not earmarked, there shall be a right of
accretion. (983a)
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Art. 1018. In legal succession the share of the
person who repudiates the inheritance shall always
accrue to his co-heirs. (981)
Art. 1019. The heirs to whom the portion goes by
the right of accretion take it in the same proportion
that they inherit. (n)
Art. 1020. The heirs to whom the inheritance
accrues shall succeed to all the rights and
obligations which the heir who renounced or could
not receive it would have had. (984)
Art. 1021. Among the compulsory heirs the right of
accretion shall take place only when the free portion
is left to two or more of them, or to any one of them
and to a stranger.
Should the part repudiated be the legitime, the
other co-heirs shall succeed to it in their own right,
and not by the right of accretion. (985)
Art. 1022. In testamentary succession, when the
right of accretion does not take place, the vacant
portion of the instituted heirs, if no substitute has
been designated, shall pass to the legal heirs of the
testator, who shall receive it with the same charges
and obligations. (986)
NOTE: This article does not apply to –
1. The legitime;
2. Intestate succession.
Art. 1023. Accretion shall also take place among
devisees, legatees and usufructuaries under the
same conditions established for heirs. (987a)
SECTION 2. - Capacity to Succeed by Will of by
Intestacy
Art. 1024. Persons not incapacitated by law may
succeed by will or ab intestato.
The provisions relating to incapacity by will are
equally applicable to intestate succession. (744,
914)
Art. 1025. In order to be capacitated to inherit, the
heir, devisee or legatee must be living at the
moment the succession opens, except in case of
representation, when it is proper.
A child already conceived at the time of the death of
the decedent is capable of succeeding provided it
be born later under the conditions prescribed in
article 41. (n)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Note: if the institution is subject to a suspensive
condition, successor must be living when the
decedent dies and when the condition happens.
If the institution is subject to a suspensive term,
successor must be alive only at the moment of
decedent’s death, successor need not be alive
when the term arrives.
Art. 1026. A testamentary disposition may be made
to the State, provinces, municipal corporations,
private corporations, organizations, or associations
for religious, scientific, cultural, educational, or
charitable purposes.
All other corporations or entities may succeed
under a will, unless there is a provision to the
contrary in their charter or the laws of their creation,
and always subject to the same. (746a)
Art. 1027. The following are incapable of
succeeding:
(1) The priest who heard the confession of
the testator during his last illness, or the
minister of the gospel who extended
spiritual aid to him during the same period;
(2) The relatives of such priest or minister
of the gospel within the fourth degree, the
church, order, chapter, community,
organization, or institution to which such
priest or minister may belong;
(3) A guardian with respect to testamentary
dispositions given by a ward in his favor
before the final accounts of the
guardianship have been approved, even if
the testator should die after the approval
thereof; nevertheless, any provision made
by the ward in favor of the guardian when
the latter is his ascendant, descendant,
brother, sister, or spouse, shall be valid;
(4) Any attesting witness to the execution of
a will, the spouse, parents, or children, or
any one claiming under such witness,
spouse, parents, or children;
(5) Any physician, surgeon, nurse, health
officer or druggist who took care of the
testator during his last illness;
(6) Individuals, associations and
corporations not permitted by law to inherit.
(745, 752, 753, 754a)
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NOTE: Basis – To avoid possibility of undue
influence
Art. 1028. The prohibitions mentioned in article 739,
concerning donations inter vivos shall apply to
testamentary provisions. (n)
Art. 739. The following donations shall be void:
(1) Those made between persons who were
guilty of adultery or concubinage at the time of
the donation;
(2) Those made between persons found guilty of
the same criminal offense, in consideration
thereof;
(3) Those made to a public officer or his wife,
descendants and ascendants, by reason of his
office.
In the case referred to in No. 1, the action for
declaration of nullity may be brought by the spouse
of the donor or donee; and the guilt of the donor
and donee may be proved by preponderance of
evidence in the same action. (n)
Wills; Probate; Intrinsic Validity (1990)
H died leaving a last will and testament wherein it is
stated that he was legally married to W by whom he had
two legitimate children A and B. H devised to his said
forced heirs the entire estate except the free portion
which he gave to X who was living with him at the time of
his death.
In said will he explained that he had been estranged from
his wife W for more than 20 years and he has been living
with X as man and wife since his separation from his
legitimate family.
In the probate proceedings, X asked for the issuance of
letters testamentary in accordance with the will wherein
she is named sole executor. This was opposed by W and
her children.
(a) Should the will be admitted in said probate
proceedings?
(b) Is the said devise to X valid?
(c) Was it proper for the trial court to consider the intrinsic
validity of the provisions of said will? Explain your
answers,
SUGGESTED ANSWER:
(a) Yes, the will may be probated if executed according to
the formalities prescribed by law.
(b) The institution giving X the free portion is not valid,
because the prohibitions under Art. 739 of the Civil Code
on donations also apply to testamentary dispositions
(Article 1028, Civil Code), Among donations which are
considered void are those made between persons who
were guilty of adultery or concubinage at the time of the
donation.
(c) As a general rule, the will should be admitted in
probate proceedings if all the necessary requirements for
its extrinsic validity have been met and the court should
not consider the intrinsic validity of the provisions of said
will. However, the exception arises when the will in effect
contains only one testamentary disposition. In effect, the
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
only testamentary disposition under the will is the giving
of the free portion to X, since legitimes are provided by
law. Hence, the trial court may consider the intrinsic
validity of the provisions of said will. (Nuguid v. Nuguid,
etal.. No. L¬23445, June 23, 1966, 17 SCRA;
Nepomuceno v. CA, L-62952, 9 October 1985. 139
SCRA 206).
Art. 1029. Should the testator dispose of the whole
or part of his property for prayers and pious works
for the benefit of his soul, in general terms and
without specifying its application, the executor, with
the court's approval shall deliver one-half thereof or
its proceeds to the church or denomination to which
the testator may belong, to be used for such
prayers and pious works, and the other half to the
State, for the purposes mentioned in Article 1013.
(747a)
Art. 1030. Testamentary provisions in favor of the
poor in general, without designation of particular
persons or of any community, shall be deemed
limited to the poor living in the domicile of the
testator at the time of his death, unless it should
clearly appear that his intention was otherwise.
The designation of the persons who are to be
considered as poor and the distribution of the
property shall be made by the person appointed by
the testator for the purpose; in default of such
person, by the executor, and should there be no
executor, by the justice of the peace, the mayor,
and the municipal treasurer, who shall decide by a
majority of votes all questions that may arise. In all
these cases, the approval of the Court of First
Instance shall be necessary.
The preceding paragraph shall apply when the
testator has disposed of his property in favor of the
poor of a definite locality. (749a)
Art. 1031. A testamentary provision in favor of a
disqualified person, even though made under the
guise of an onerous contract, or made through an
intermediary, shall be void. (755)
Art. 1032. The following are incapable of
succeeding by reason of unworthiness:
(1) Parents who have abandoned their
children or induced their daughters to lead
a corrupt or immoral life, or attempted
against their virtue;
(2) Any person who has been convicted of
an attempt against the life of the testator,
his or her spouse, descendants, or
ascendants;
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(3) Any person who has accused the
testator of a crime for which the law
prescribes imprisonment for six years or
more, if the accusation has been found
groundless;
(4) Any heir of full age who, having
knowledge of the violent death of the
testator, should fail to report it to an officer
of the law within a month, unless the
authorities have already taken action; this
prohibition shall not apply to cases wherein,
according to law, there is no obligation to
make an accusation;
(5) Any person convicted of adultery or
concubinage with the spouse of the
testator;
(6) Any person who by fraud, violence,
intimidation, or undue influence should
cause the testator to make a will or to
change one already made;
(7) Any person who by the same means
prevents another from making a will, or
from revoking one already made, or who
supplants, conceals, or alters the latter's
will;
(8) Any person who falsifies or forges a
supposed will of the decedent. (756, 673,
674a)
Art. 1033. The cause of unworthiness shall be
without effect if the testator had knowledge thereof
at the time he made the will, or if, having known of
them subsequently, he should condone them in
writing. (757a)
NOTE: Condonation need not be in a will.
Compare this article with 922
Art. 922. A subsequent reconciliation between
the offender and the offended person deprives
the latter of the right to disinherit, and renders
ineffectual any disinheritance that may have
been made.
Art. 1034. In order to judge the capacity of the heir,
devisee or legatee, his qualification at the time of
the death of the decedent shall be the criterion.
In cases falling under Nos. 2, 3, or 5 of Article 1032,
it shall be necessary to wait until final judgment is
rendered, and in the case falling under No. 4, the
expiration of the month allowed for the report.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
If the institution, devise or legacy should be
conditional, the time of the compliance with the
condition shall also be considered. (758a)
Art. 1035. If the person excluded from the
inheritance by reason of incapacity should be a
child or descendant of the decedent and should
have children or descendants, the latter shall
acquire his right to the legitime.
The person so excluded shall not enjoy the usufruct
and administration of the property thus inherited by
his children. (761a)
Art. 1036. Alienations of hereditary property, and
acts of administration performed by the excluded
heir, before the judicial order of exclusion, are valid
as to the third persons who acted in good faith; but
the co-heirs shall have a right to recover damages
from the disqualified heir. (n)
Art. 1037. The unworthy heir who is excluded from
the succession has a right to demand indemnity or
any expenses incurred in the preservation of the
hereditary property, and to enforce such credits as
he may have against the estate. (n)
Art. 1038. Any person incapable of succession,
who, disregarding the prohibition stated in the
preceding articles, entered into the possession of
the hereditary property, shall be obliged to return it
together it its accessions.
He shall be liable for all the fruits and rents he may
have received, or could have received through the
exercise of due diligence. (760a)
Art. 1039. Capacity to succeed is governed by the
law of the nation of the decedent. (n)
Art. 1040. The action for a declaration of incapacity
and for the recovery of the inheritance, devise or
legacy shall be brought within five years from the
time the disqualified person took possession
thereof. It may be brought by any one who may
have an interest in the succession. (762a)
SECTION 3. - Acceptance and Repudiation of
the Inheritance
Art. 1041. The acceptance or repudiation of the
inheritance is an act which is purely voluntary and
free. (988)
Art. 1042. The effects of the acceptance or
repudiation shall always retroact to the moment of
the death of the decedent. (989)
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Art. 1043. No person may accept or repudiate an
inheritance unless he is certain of the death of the
person from whom he is to inherit, and of his right to
the inheritance. (991)
Art. 1044. Any person having the free disposal of
his property may accept or repudiate an
inheritance.
Any inheritance left to minors or incapacitated
persons may be accepted by their parents or
guardians. Parents or guardians may repudiate the
inheritance left to their wards only by judicial
authorization.
The right to accept an inheritance left to the poor
shall belong to the persons designated by the
testator to determine the beneficiaries and distribute
the property, or in their default, to those mentioned
in Article 1030. (992a)
Art. 1045. The lawful representatives of
corporations, associations, institutions and entities
qualified to acquire property may accept any
inheritance left to the latter, but in order to repudiate
it, the approval of the court shall be necessary.
(993a)
Art. 1046. Public official establishments can neither
accept nor repudiate an inheritance without the
approval of the government. (994)
Art. 1047. A married woman of age may repudiate
an inheritance without the consent of her husband.
(995a)
Art. 1048. Deaf-mutes who can read and write may
accept or repudiate the inheritance personally or
through an agent. Should they not be able to read
and write, the inheritance shall be accepted by their
guardians. These guardians may repudiate the
same with judicial approval. (996a)
Art. 1049. Acceptance may be express or tacit.
An express acceptance must be made in a public or
private document.
A tacit acceptance is one resulting from acts by
which the intention to accept is necessarily implied,
or which one would have no right to do except in
the capacity of an heir.
Acts of mere preservation or provisional
administration do not imply an acceptance of the
inheritance if, through such acts, the title or capacity
of an heir has not been assumed. (999a)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 1050. An inheritance is deemed accepted:
(1) If the heir sells, donates, or assigns his
right to a stranger, or to his co-heirs, or to
any of them;
(2) If the heir renounces the same, even
though gratuitously, for the benefit of one or
more of his co-heirs;
(3) If he renounces it for a price in favor of
all his co-heirs indiscriminately; but if this
renunciation should be gratuitous, and the
co-heirs in whose favor it is made are those
upon whom the portion renounced should
devolve by virtue of accretion, the
inheritance shall not be deemed as
accepted. (1000)
Art. 1051. The repudiation of an inheritance shall be
made in a public or authentic instrument, or by
petition presented to the court having jurisdiction
over the testamentary or intestate proceedings.
(1008)
Art. 1052. If the heir repudiates the inheritance to
the prejudice of his own creditors, the latter may
petition the court to authorize them to accept it in
the name of the heir.
The acceptance shall benefit the creditors only to
an extent sufficient to cover the amount of their
credits. The excess, should there be any, shall in no
case pertain to the renouncer, but shall be
adjudicated to the persons to whom, in accordance
with the rules established in this Code, it may
belong. (1001)
2011 Bar Exam
(71) ML inherited from his father P5 million in
legitime but he waived it in a public
instrument in favor of his sister QY who
accepted the waiver in writing. But as it
happened, ML borrowed P6 million from PF
before the waiver. PF objected to the waiver
and filed an action for its rescission on the
ground that he had the right to ML’s P5
million legitime as partial settlement of what
ML owed him since ML has proved to be
insolvent. Does PF, as creditor, have the right
to rescind the waiver? (A) No, because the
waiver in favor of his sister QY amounts to a
donation and she already accepted it. (B) Yes,
because the waiver is prejudicial to the
interest of a third person whose interest is
recognized by law. (C) No, PF must wait for
ML to become solvent and, thereafter, sue him
for the unpaid loan. (D) Yes, because a
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legitime cannot be waived in favor of a specific
heir; it must be divided among all the other
heirs.
Art. 1053. If the heir should die without having
accepted or repudiated the inheritance his right
shall be transmitted to his heirs. (1006)
Art. 1054. Should there be several heirs called to
the inheritance, some of them may accept and the
others may repudiate it. (1007a)
Art. 1055. If a person, who is called to the same
inheritance as an heir by will and ab intestato,
repudiates the inheritance in his capacity as a
testamentary heir, he is understood to have
repudiated it in both capacities.
Should he repudiate it as an intestate heir, without
knowledge of his being a testamentary heir, he may
still accept it in the latter capacity. (1009)
Art. 1056. The acceptance or repudiation of an
inheritance, once made, is irrevocable, and cannot
be impugned, except when it was made through
any of the causes that vitiate consent, or when an
unknown will appears. (997)
Art. 1057. Within thirty days after the court has
issued an order for the distribution of the estate in
accordance with the Rules of Court, the heirs,
devisees and legatees shall signify to the court
having jurisdiction whether they accept or repudiate
the inheritance.
If they do not do so within that time, they are
deemed to have accepted the inheritance. (n)
SECTION 4. - Executors and Administrators
Art. 1058. All matters relating to the appointment,
powers and duties of executors and administrators
and concerning the administration of estates of
deceased persons shall be governed by the Rules
of Court. (n)
Art. 1059. If the assets of the estate of a decedent
which can be applied to the payment of debts are
not sufficient for that purpose, the provisions of
Articles 2239 to 2251 on Preference of Credits shall
be observed, provided that the expenses referred to
in Article 2244, No. 8, shall be those involved in the
administration of the decedent's estate. (n)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 1060. A corporation or association authorized
to conduct the business of a trust company in the
Philippines may be appointed as an executor,
administrator, guardian of an estate, or trustee, in
like manner as an individual; but it shall not be
appointed guardian of the person of a ward. (n)
SECTION 5. – Collation
COLLATION
Is the act by virtue of which, the persons who
concur in the inheritance bring back to the common
hereditary mass the property which they may have
received from him, so that a division may be
effected according to law and the will of the testator
“To Collate” – is to bring back or return to the
hereditary mass, in fact or by fiction, property which
came from the estate of the decedent, during his
lifetime, but which the law considers as an advance
from the inheritance.
Collation (1993)
Joaquin Reyes bought from Julio Cruz a residential lot of
300 square meters in Quezon City for which Joaquin paid
Julio the amount of P300,000.00, When the deed was
about to be prepared Joaquin told Julio that it be drawn in
the name of Joaquina Roxas, his acknowledged natural
child. Thus, the deed was so prepared and executed by
Julio. Joaquina then built a house on the lot where she,
her husband and children resided. Upon Joaquin's death,
his legitimate children sought to recover possession and
ownership of the lot, claiming that Joaquina Roxas was
but a trustee of their father. Will the action against
Joaquina Roxas prosper?
SUGGESTED ANSWER:
Yes, because there is a presumed donation in favor of
Joaquina under Art. 1448 of the Civil Code (De los
Santos v. Reyes, 27 January 1992, 206 SCRA 437).
However, the donation should be collated to the
hereditary estate and the legitime of the other heirs
should be preserved.
ALTERNATIVE ANSWER:
Yes, the action against Joaquina Roxas will prosper, but
only to the extent of the aliquot hereditary rights of the
legitimate children as heirs. Joaquina will be entitled to
retain her own share as an illegitimate child, (Arts. 1440
and 1453. Civil Code; Art. 176, F. C.)
Art. 1061. Every compulsory heir, who succeeds
with other compulsory heirs, must bring into the
mass of the estate any property or right which he
may have received from the decedent, during the
lifetime of the latter, by way of donation, or any
other gratuitous title, in order that it may be
computed in the determination of the legitime of
each heir, and in the account of the partition.
(1035a)
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Art. 1062. Collation shall not take place among
compulsory heirs if the donor should have so
expressly provided, or if the donee should repudiate
the inheritance, unless the donation should be
reduced as inofficious. (1036)
Art. 1063. Property left by will is not deemed subject
to collation, if the testator has not otherwise
provided, but the legitime shall in any case remain
unimpaired. (1037)
Art. 1064. When the grandchildren, who survive
with their uncles, aunts, or cousins, inherit from
their grandparents in representation of their father
or mother, they shall bring to collation all that their
parents, if alive, would have been obliged to bring,
even though such grandchildren have not inherited
the property.
They shall also bring to collation all that they may
have received from the decedent during his lifetime,
unless the testator has provided otherwise, in which
case his wishes must be respected, if the legitime
of the co-heirs is not prejudiced. (1038)
Art. 1065. Parents are not obliged to bring to
collation in the inheritance of their ascendants any
property which may have been donated by the latter
to their children. (1039)
Art. 1066. Neither shall donations to the spouse of
the child be brought to collation; but if they have
been given by the parent to the spouses jointly, the
child shall be obliged to bring to collation one-half of
the thing donated. (1040)
Art. 1067. Expenses for support, education, medical
attendance, even in extraordinary illness,
apprenticeship, ordinary equipment, or customary
gifts are not subject to collation. (1041)
Art. 1068. Expenses incurred by the parents in
giving their children a professional, vocational or
other career shall not be brought to collation unless
the parents so provide, or unless they impair the
legitime; but when their collation is required, the
sum which the child would have spent if he had
lived in the house and company of his parents shall
be deducted therefrom. (1042a)
Art. 1069. Any sums paid by a parent in satisfaction
of the debts of his children, election expenses,
fines, and similar expenses shall be brought to
collation. (1043a)
Art. 1070. Wedding gifts by parents and ascendants
consisting of jewelry, clothing, and outfit, shall not
be reduced as inofficious except insofar as they
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
may exceed one-tenth of the sum which is
disposable by will. (1044)
Art. 1071. The same things donated are not to be
brought to collation and partition, but only their
value at the time of the donation, even though their
just value may not then have been assessed.
Their subsequent increase or deterioration and
even their total loss or destruction, be it accidental
or culpable, shall be for the benefit or account and
risk of the donee. (1045a)
Art. 1072. In the collation of a donation made by
both parents, one-half shall be brought to the
inheritance of the father, and the other half, to that
of the mother. That given by one alone shall be
brought to collation in his or her inheritance.
(1046a)
Art. 1073. The donee's share of the estate shall be
reduced by an amount equal to that already
received by him; and his co-heirs shall receive an
equivalent, as much as possible, in property of the
same nature, class and quality. (1047)
Art. 1074. Should the provisions of the preceding
article be impracticable, if the property donated was
immovable, the co-heirs shall be entitled to receive
its equivalent in cash or securities, at the rate of
quotation; and should there be neither cash or
marketable securities in the estate, so much of the
other property as may be necessary shall be sold at
public auction.
If the property donated was movable, the co-heirs
shall only have a right to select an equivalent of
other personal property of the inheritance at its just
price. (1048)
Art. 1075. The fruits and interest of the property
subject to collation shall not pertain to the estate
except from the day on which the succession is
opened.
For the purpose of ascertaining their amount, the
fruits and interest of the property of the estate of the
same kind and quality as that subject to collation
shall be made the standard of assessment. (1049)
Art. 1076. The co-heirs are bound to reimburse to
the donee the necessary expenses which he has
incurred for the preservation of the property
donated to him, though they may not have
augmented its value.
The donee who collates in kind an immovable
which has been given to him must be reimbursed
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by his co-heirs for the improvements which have
increased the value of the property, and which exist
at the time the partition if effected.
As to works made on the estate for the mere
pleasure of the donee, no reimbursement is due
him for them; he has, however, the right to remove
them, if he can do so without injuring the estate. (n)
Art. 1077. Should any question arise among the co-
heirs upon the obligation to bring to collation or as
to the things which are subject to collation, the
distribution of the estate shall not be interrupted for
this reason, provided adequate security is given.
(1050)
OPERATIONS RELATED TO COLLATION:
1. Collation – adding to the mass of the
hereditary estate the value of the donation
or gratuitous disposition;
2. Imputing or charging – crediting the
donation as an advance on the legitime (if
the done is a compulsory heir) or on the
free portion (if the done is a stranger).
3. Reduction – determining to what extent the
donation will remain and to what extent it is
excessive or inofficious;
4. Restitution – return or payment of the
excess to the mass of hereditary estate.
SECTION 6. - Partition and Distribution of the
Estate
SUBSECTION 1. - Partition
Art. 1078. Where there are two or more heirs, the
whole estate of the decedent is, before its partition,
owned in common by such heirs, subject to the
payment of debts of the deceased. (n)
Art. 1079. Partition, in general, is the separation,
division and assignment of a thing held in common
among those to whom it may belong. The thing
itself may be divided, or its value. (n)
Art. 1080. Should a person make partition of his
estate by an act inter vivos, or by will, such partition
shall be respected, insofar as it does not prejudice
the legitime of the compulsory heirs.
A parent who, in the interest of his or her family,
desires to keep any agricultural, industrial, or
manufacturing enterprise intact, may avail himself
of the right granted him in this article, by ordering
that the legitime of the other children to whom the
property is not assigned, be paid in cash. (1056a)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Note: Void will may be considered actually a valid
partition if –
1. If the will is in fact a partition;
2. If the beneficiaries are all legal heirs.
Art. 1081. A person may, by an act inter vivos or
mortis causa, intrust the mere power to make the
partition after his death to any person who is not
one of the co-heirs.
The provisions of this and of the preceding article
shall be observed even should there be among the
co-heirs a minor or a person subject to
guardianship; but the mandatary, in such case,
shall make an inventory of the property of the
estate, after notifying the co-heirs, the creditors,
and the legatees or devisees. (1057a)
WHO MAY PARTITION:
1. Decedent during his lifetime by an act inter
vivos or by will;
2. Heirs themselves;
3. Person designated by the decedent
(executor), upon appointment by the court
according to the Rules of Court.
Art. 1082. Every act which is intended to put an end
to indivision among co-heirs and legatees or
devisees is deemed to be a partition, although it
should purport to be a sale, and exchange, a
compromise, or any other transaction. (n)
Art. 1083. Every co-heir has a right to demand the
division of the estate unless the testator should
have expressly forbidden its partition, in which case
the period of indivision shall not exceed twenty
years as provided in article 494. This power of the
testator to prohibit division applies to the legitime.
Even though forbidden by the testator, the co-
ownership terminates when any of the causes for
which partnership is dissolved takes place, or when
the court finds for compelling reasons that division
should be ordered, upon petition of one of the co-
heirs. (1051a)
Wills; Prohibition to Partition of a Co-
Owned Property (2010) No.I. True or False.
(B) X, a widower, died leaving a will stating
that the house and lot where he lived cannot
be partitioned for as long as the youngest of
his four children desires to stay there. As
coheirs and co-owners, the other three may
demand partition anytime. (1%) SUGGESTED
ANSWER:
FALSE, The other three co – heirs may not
anytime demand the partition of the house
and lot since it was expressly provided by
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the decedent in his will that the same
cannot be partitioned while his youngest
child desires to stay there. Article 1083 of
the New Civil Code allows a decedent to
prohibit, by will, the partition of a property
and his estate for a period not longer than
20 years no matter what his reason maybe.
Hence, the three co-heir cannot demand its
partition at anytime but only after 20 years
from the death of their father. Even if the
deceased parent did not leave a will, if the
house and lot constituted their family
home, Article 159 of the Family Code
prohibits its partition for a period of ten
(10) years, or for as long as there is a minor
beneficiary living in the family home.
WHEN PARTITION CANNOT BE DEMANDED:
1. When expressly prohibited by the testator
for a period not exceeding 20 years;
2. When the co-heirs agreed that the estate
shall not be divided for a period not
exceeding 10 years, renewable for another
10 years;
3. When prohibited by law;
4. When partition of the estate would render it
unserviceable for the use for which it is
intended.
Art. 1084. Voluntary heirs upon whom some
condition has been imposed cannot demand a
partition until the condition has been fulfilled; but the
other co-heirs may demand it by giving sufficient
security for the rights which the former may have in
case the condition should be complied with, and
until it is known that the condition has not been
fulfilled or can never be complied with, the partition
shall be understood to be provisional. (1054a)
WHO CAN DEMAND PARTITION:
1. Compulsory heirs;
2. Voluntary heir;
3. Legatee or devisee;
4. Any person who has acquired interest in
the estate.
Art. 1085. In the partition of the estate, equality
shall be observed as far as possible, dividing the
property into lots, or assigning to each of the co-
heirs things of the same nature, quality and kind.
(1061)
Art. 1086. Should a thing be indivisible, or would be
much impaired by its being divided, it may be
adjudicated to one of the heirs, provided he shall
pay the others the excess in cash.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Nevertheless, if any of the heirs should demand
that the thing be sold at public auction and that
strangers be allowed to bid, this must be done.
(1062)
Art. 1087. In the partition the co-heirs shall
reimburse one another for the income and fruits
which each one of them may have received from
any property of the estate, for any useful and
necessary expenses made upon such property, and
for any damage thereto through malice or neglect.
(1063)
Art. 1088. Should any of the heirs sell his hereditary
rights to a stranger before the partition, any or all of
the co-heirs may be subrogated to the rights of the
purchaser by reimbursing him for the price of the
sale, provided they do so within the period of one
month from the time they were notified in writing of
the sale by the vendor. (1067a)
NOTE: Notice is MANDATORY.
Art. 1089. The titles of acquisition or ownership of
each property shall be delivered to the co-heir to
whom said property has been adjudicated. (1065a)
Art. 1090. When the title comprises two or more
pieces of land which have been assigned to two or
more co-heirs, or when it covers one piece of land
which has been divided between two or more co-
heirs, the title shall be delivered to the one having
the largest interest, and authentic copies of the title
shall be furnished to the other co-heirs at the
expense of the estate. If the interest of each co-heir
should be the same, the oldest shall have the title.
(1066a)
SUBSECTION 2. - Effects of Partition
Art. 1091. A partition legally made confers upon
each heir the exclusive ownership of the property
adjudicated to him. (1068)
Art. 1092. After the partition has been made, the co-
heirs shall be reciprocally bound to warrant the title
to, and the quality of, each property adjudicated.
(1069a)
Art. 1093. The reciprocal obligation of warranty
referred to in the preceding article shall be
proportionate to the respective hereditary shares of
the co-heirs, but if any one of them should be
insolvent, the other co-heirs shall be liable for his
part in the same proportion, deducting the part
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corresponding to the one who should be
indemnified.
Those who pay for the insolvent heir shall have a
right of action against him for reimbursement,
should his financial condition improve. (1071)
Art. 1094. An action to enforce the warranty among
heirs must be brought within ten years from the
date the right of action accrues. (n)
Art. 1095. If a credit should be assigned as
collectible, the co-heirs shall not be liable for the
subsequent insolvency of the debtor of the estate,
but only for his insolvency at the time the partition is
made.
The warranty of the solvency of the debtor can only
be enforced during the five years following the
partition.
Co-heirs do not warrant bad debts, if so known to,
and accepted by, the distributee. But if such debts
are not assigned to a co-heir, and should be
collected, in whole or in part, the amount collected
shall be distributed proportionately among the heirs.
(1072a)
Art. 1096. The obligation of warranty among co-
heirs shall cease in the following cases:
(1) When the testator himself has made the
partition, unless it appears, or it may be
reasonably presumed, that his intention
was otherwise, but the legitime shall always
remain unimpaired;
(2) When it has been so expressly
stipulated in the agreement of partition,
unless there has been bad faith;
(3) When the eviction is due to a cause
subsequent to the partition, or has been
caused by the fault of the distributee of the
property. (1070a)
SUBSECTION 3. - Rescission and Nullity of
Partition
Art. 1097. A partition may be rescinded or annulled
for the same causes as contracts. (1073a)
Art. 1098. A partition, judicial or extra-judicial, may
also be rescinded on account of lesion, when any
one of the co-heirs received things whose value is
less, by at least one-fourth, than the share to which
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
he is entitled, considering the value of the things at
the time they were adjudicated. (1074a)
Art. 1099. The partition made by the testator cannot
be impugned on the ground of lesion, except when
the legitime of the compulsory heirs is thereby
prejudiced, or when it appears or may reasonably
be presumed, that the intention of the testator was
otherwise. (1075)
Art. 1100. The action for rescission on account of
lesion shall prescribe after four years from the time
the partition was made. (1076)
Art. 1101. The heir who is sued shall have the
option of indemnifying the plaintiff for the loss, or
consenting to a new partition.
Indemnity may be made by payment in cash or by
the delivery of a thing of the same kind and quality
as that awarded to the plaintiff.
If a new partition is made, it shall affect neither
those who have not been prejudiced nor those have
not received more than their just share. (1077a)
Art. 1102. 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. (1078a)
Art. 1103. 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. (1079a)
Art. 1104. A partition made with preterition of any of
the compulsory heirs shall not be rescinded, unless
it be proved that there was bad faith or fraud on the
part of the other persons interested; but the latter
shall be proportionately obliged to pay to the person
omitted the share which belongs to him. (1080)
Art. 1105. A partition which includes a person
believed to be an heir, but who is not, shall be void
only with respect to such person. (1081a)
EFFECTS OF INCLUSION OF INTRUDER IN
PARTITION:
1. Between a true heir and several mistaken
heirs – Partion is void.
2. Between several heirs and a mistaken heir
– Transmission to mistaken heir is void.
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Title V. - PRESCRIPTION
CHAPTER 1
GENERAL PROVISIONS
Art. 1106. By prescription, one acquires ownership
and other real rights through the lapse of time in the
manner and under the conditions laid down by law.
In the same way, rights and conditions are lost by
prescription. (1930a)
KINDS:
A. Acquisitive Prescription
Requisites (in general)–
1) Capacity to acquire by prescription;
2) Thing capable of acquisition by
prescription;
Things subject of prescription
(all things within the commerce
of men) –
a. Private property;
b. Patrimonial property of
the state.
Some things cannot be
acquired by prescription:
a. Registered lands;
b. Lands of public domain
(mineral, forest/timber
lands, etc.);
c. The seas;
d. Waters (under the
Water Code);
e. Res communes.
f. Movables possessed
through a crime;
g. Intransmissible rights;
h. Right of way.
3) Possession of thing under certain
condition;
Like – open, continuous,
exclusive, adverse, and
notorious possession.
4) Lapse of time provided by law.
Art. 1107. Persons who are capable of acquiring
property or rights by the other legal modes may
acquire the same by means of prescription.
Minors and other incapacitated persons may
acquire property or rights by prescription, either
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
personally or through their parents, guardians or
legal representatives. (1931a)
WHO MAY ACQUIRE BY PRESCRIPTION:
1. Persons capable of acquiring property by
legal modes;
2. Minors and incapacitated through
guardians or legal representatives;
3. The State.
Art. 1108. Prescription, both acquisitive and
extinctive, runs against:
(1) Minors and other incapacitated persons
who have parents, guardians or other legal
representatives;
(2) Absentees who have administrators,
either appointed by them before their
disappearance, or appointed by the courts;
(3) Persons living abroad, who have
managers or administrators;
(4) Juridical persons, except the State and
its subdivisions.
Persons who are disqualified from
administering their property have a right to
claim damages from their legal
representatives whose negligence has
been the cause of prescription. (1932a)
Art. 1109. Prescription does not run between
husband and wife, even though there be a
separation of property agreed upon in the marriage
settlements or by judicial decree.
Neither does prescription run between parents and
children, during the minority or insanity of the latter,
and between guardian and ward during the
continuance of the guardianship. (n)
Art. 1110. Prescription, acquisitive and extinctive,
runs in favor of, or against a married woman. (n)
Art. 1111. Prescription obtained by a co-proprietor
or a co-owner shall benefit the others. (1933)
Art. 1112. Persons with capacity to alienate
property may renounce prescription already
obtained, but not the right to prescribe in the future.
Prescription is deemed to have been tacitly
renounced when the renunciation results from acts
which imply the abandonment of the right acquired.
(1935)
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Art. 1113. All things which are within the commerce
of men are susceptible of prescription, unless
otherwise provided. Property of the State or any of
its subdivisions not patrimonial in character shall
not be the object of prescription. (1936a)
Art. 1114. Creditors and all other persons interested
in making the prescription effective may avail
themselves thereof notwithstanding the express or
tacit renunciation by the debtor or proprietor. (1937)
Art. 1115. The provisions of the present Title are
understood to be without prejudice to what in this
Code or in special laws is established with respect
to specific cases of prescription. (1938)
Art. 1116. Prescription already running before the
effectivity of this Code shall be governed by laws
previously in force; but if since the time this Code
took effect the entire period herein required for
prescription should elapse, the present Code shall
be applicable, even though by the former laws a
longer period might be required. (1939)
CHAPTER 2
PRESCRIPTION OF OWNERSHIP AND OTHER
REAL RIGHTS
Art. 1117. Acquisitive prescription of dominion and
other real rights may be ordinary or extraordinary.
Ordinary acquisitive prescription requires
possession of things in good faith and with just title
for the time fixed by law. (1940a)
Art. 1118. Possession has to be in the concept of
an owner, public, peaceful and uninterrupted.
(1941)
Art. 1119. Acts of possessory character executed in
virtue of license or by mere tolerance of the owner
shall not be available for the purposes of
possession. (1942)
Art. 1120. Possession is interrupted for the
purposes of prescription, naturally or civilly. (1943)
Art. 1121. Possession is naturally interrupted when
through any cause it should cease for more than
one year.
The old possession is not revived if a new
possession should be exercised by the same
adverse claimant. (1944a)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 1122. If the natural interruption is for only one
year or less, the time elapsed shall be counted in
favor of the prescription. (n)
Art. 1123. Civil interruption is produced by judicial
summons to the possessor. (1945a)
Art. 1124. Judicial summons shall be deemed not to
have been issued and shall not give rise to
interruption:
(1) If it should be void for lack of legal
solemnities;
(2) If the plaintiff should desist from the
complaint or should allow the proceedings
to lapse;
(3) If the possessor should be absolved
from the complaint.
In all these cases, the period of the
interruption shall be counted for the
prescription. (1946a)
Art. 1125. Any express or tacit recognition which
the possessor may make of the owner's right also
interrupts possession. (1948)
Art. 1126. Against a title recorded in the Registry of
Property, ordinary prescription of ownership or real
rights shall not take place to the prejudice of a third
person, except in virtue of another title also
recorded; and the time shall begin to run from the
recording of the latter.
As to lands registered under the Land Registration
Act, the provisions of that special law shall govern.
(1949a)
Art. 1127. The good faith of the possessor consists
in the reasonable belief that the person from whom
he received the thing was the owner thereof, and
could transmit his ownership. (1950a)
Art. 1128. The conditions of good faith required for
possession in Articles 526, 527, 528, and 529 of
this Code are likewise necessary for the
determination of good faith in the prescription of
ownership and other real rights. (1951)
Art. 1129. For the purposes of prescription, there is
just title when the adverse claimant came into
possession of the property through one of the
modes recognized by law for the acquisition of
ownership or other real rights, but the grantor was
not the owner or could not transmit any right. (n)
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Art. 1130. The title for prescription must be true and
valid. (1953)
Art. 1131. For the purposes of prescription, just title
must be proved; it is never presumed. (1954a)
Art. 1132. The ownership of movables prescribes
through uninterrupted possession for four years in
good faith.
The ownership of personal property also prescribes
through uninterrupted possession for eight years,
without need of any other condition.
With regard to the right of the owner to recover
personal property lost or of which he has been
illegally deprived, as well as with respect to
movables acquired in a public sale, fair, or market,
or from a merchant's store the provisions of Articles
559 and 1505 of this Code shall be observed.
(1955a)
Art. 1133. Movables possessed through a crime
can never be acquired through prescription by the
offender. (1956a)
Art. 1134. Ownership and other real rights over
immovable property are acquired by ordinary
prescription through possession of ten years.
(1957a)
Prescription; Acquisitive Prescription
(2008) No. VII. Anthony bought a piece of
untitled agricultural land from Bert. Bert, in
turn, acquired the property by forging carlo's
signature in a deed of sale over the property.
Carlo had been in possession of the property
for 8 years, declared it for tax purposes, and
religiously paid all taxes due on the property.
Anthony is not aware of the defect in Bert's
title, but has been in actual physical
possession of the property from the time he
bought it from Bert, who had never been in
possession of the property for one year. (A).
Can Anthony acquire ownership of the
property by acquisitive prescription? How
many more years does he have possess it to
acquire ownership? (2%) SUGGESTED
ANSWER:
Yes, Anthony can acquire ownership of the
property through acquisitive prescription.
In the present case, Anthony is a
buyer/possessor in good faith because he
was not aware of the defect in Bert's title
(Art. 526, Civil Code). As such, Anthony can
acquire ownership and other real rights
over immovable property through open,
continuous possession of 10 years (Art.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
1134, Civil Code). Anthony needs nine (9)
more years of possession, in addition to his
one (1) year of possession in good faith.
(B).If Carlo is able to legally recover his
property, can he require Anthony to account
for all the fruits he has harvested from the
property while in possession? (2%)
SUGGESTED ANSWER: If Carlo is able to
legally recover his property, he cannot
require Anthony to account for all the
fruits harvested from the property.
Anthony is entitled to the fruits harvested
in good faith before his possession was
legally interrupted (Art. 544, Civil Code).
(C).If there are standing crops on the property
when Carlo recovers possession, can Carlo
appropriate them? (2%) SUGGESTED
ANSWER: Yes, Carlos can appropriate only
a portion of the standing crops on the
property once he recovers possession.
Anthony being a possessor in good faith,
shall have a right to a part of the expenses
of cultivation, and to a part of the net
harvest of the standing crops, both in
proportion to the time of the possession
(Art 545, Civil Code).
Art. 1135. In case the adverse claimant possesses
by mistake an area greater, or less than that
expressed in his title, prescription shall be based on
the possession. (n)
Art. 1136. Possession in wartime, when the civil
courts are not open, shall not be counted in favor of
the adverse claimant.
Art. 1137. Ownership and other real rights over
immovables also prescribe through uninterrupted
adverse possession thereof for thirty years, without
need of title or of good faith. (1959a)
Art. 1138. In the computation of time necessary for
prescription the following rules shall be observed:
(1) The present possessor may complete
the period necessary for prescription by
tacking his possession to that of his grantor
or predecessor in interest;
(2) It is presumed that the present
possessor who was also the possessor at a
previous time, has continued to be in
possession during the intervening time,
unless there is proof to the contrary;
(3) The first day shall be excluded and the
last day included. (1960a)
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CHAPTER 3
PRESCRIPTION OF ACTIONS
Art. 1139. Actions prescribe by the mere lapse of
time fixed by law. (1961)
Art. 1140. Actions to recover movables shall
prescribe eight years from the time the possession
thereof is lost, unless the possessor has acquired
the ownership by prescription for a less period,
according to Articles 1132, and without prejudice to
the provisions of Articles 559, 1505, and 1133.
(1962a)
Art. 1141. Real actions over immovables prescribe
after thirty years.
This provision is without prejudice to what is
established for the acquisition of ownership and
other real rights by prescription. (1963)
Art. 1142. A mortgage action prescribes after ten
years. (1964a)
Art. 1143. The following rights, among others
specified elsewhere in this Code, are not
extinguished by prescription:
(1) To demand a right of way, regulated in
Article 649;
(2) To bring an action to abate a public or
private nuisance. (n)
OTHER RIGHTS NOT EXTINGUISHED BY
PPRESCRIPTION:
1. To declare a contract void;
2. To declare a marriage void;
3. Recovery of property subject to an express
trust;
4. Probate of will;
5. Action to quiet title if in possession;
6. The right of the state to recover ill-gotten
wealth;
7. Reversion of inalienable lands (properties)
of public domain.
Art. 1144. The following actions must be brought
within ten years from the time the right of action
accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment. (n)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 1145. The following actions must be
commenced within six years:
(1) Upon an oral contract;
(2) Upon a quasi-contract. (n)
2011 Bar Exam Question
(61) X bought a land from Y, paying him cash.
Since they were friends, they did not execute
any document of sale. After 7 years, the heirs
of X asked Y to execute a deed of absolute sale
to formalize the verbal sale to their father.
Unwilling to do so, X’s heirs filed an action for
specific performance against Y. Will their
action prosper? (A) No, after more than 6
years, the action to enforce the verbal
agreement has already elapsed. (B) No, since
the sale cannot under the Statute of Frauds be
enforced. (C) Yes, since X bought the land and
paid Y for it. (D) Yes, after full payment, the
action became imprescriptible.
Art. 1146. The following actions must be instituted
within four years:
(1) Upon an injury to the rights of the
plaintiff;
(2) Upon a quasi-delict;
However, when the action arises from or out of any
act, activity, or conduct of any public officer
involving the exercise of powers or authority arising
from Martial Law including the arrest, detention
and/or trial of the plaintiff, the same must be
brought within one (1) year. (As amended by PD
No. 1755, Dec. 24, 1980.)
Art. 1147. The following actions must be filed within
one year:
(1) For forcible entry and detainer;
(2) For defamation. (n)
Art. 1148. The limitations of action mentioned in
Articles 1140 to 1142, and 1144 to 1147 are without
prejudice to those specified in other parts of this
Code, in the Code of Commerce, and in special
laws. (n)
Art. 1149. All other actions whose periods are not
fixed in this Code or in other laws must be brought
within five years from the time the right of action
accrues. (n)
Art. 1150. The time for prescription for all kinds of
actions, when there is no special provision which
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ordains otherwise, shall be counted from the day BOOK IV
they may be brought. (1969)
OBLIGATIONS AND CONTRACTS
Art. 1151. The time for the prescription of actions
which have for their object the enforcement of Title. I. - OBLIGATIONS
obligations to pay principal with interest or annuity
runs from the last payment of the annuity or of the CHAPTER 1
interest. (1970a) GENERAL PROVISIONS

Art. 1152. The period for prescription of actions to
demand the fulfillment of obligation declared by a
judgment commences from the time the judgment
became final. (1971)
Art. 1153. The period for prescription of actions to
demand accounting runs from the day the persons
who should render the same cease in their
functions.
The period for the action arising from the result of
the accounting runs from the date when said result
was recognized by agreement of the interested
parties. (1972)
Art. 1154. The period during which the obligee was
prevented by a fortuitous event from enforcing his
right is not reckoned against him. (n)
Art. 1155. The prescription of actions is interrupted
when they are filed before the court, when there is a
written extrajudicial demand by the creditors, and
when there is any written acknowledgment of the
debt by the debtor. (1973a)
Art. 1156. An obligation is a juridical necessity to
give, to do or not to do. (n)
CLASSES OF OBLIGATION (according to
demandability):
1. Civil Obligation – demandable and
enforceable in court.
2. Natural Obligation – not demandable but
grants right to retain the thing voluntarily
given.
3. Moral Obligation – not demandable in
court action.
2011 Bar Exam
(78) A natural obligation under the New Civil
Code of the Philippines is one which (A) the
obligor has a moral obligation to do, otherwise
entitling the obligee to damages. (B) refers to
an obligation in writing to do or not to do. (C)
the obligee may enforce through the court if
violated by the obligor. (D) cannot be
judicially enforced but authorizes the
obligee to retain the obligor’s payment or
performance.

PRESCRIPTION LACHES ELEMENTS OF AN OBLIGATION:

Concerned with the fact Concerned with the
of delay effect of delay 1. Active Subject (obligee/creditor) – one in
Question of matter of Question of inequity of whose favor the obligation is constituted;
time permitting the claim 2. Passive Subject (obligor/debtor) – one
Statutory Non-statutory who has the duty of giving, doing or not
Applies at law Applies in equity doing;
Based on a fixed time Not based on a fixed 3. Object (prestation) – the conduct which
time has to be observed by the debtor/obligor.

Requisites:
a. It must be licit (otherwise void);
b. It must be possible, physically or
juridically (otherwise void);

THE LAW ON
c. It must be determinate or
determinable (otherwise void)
d. It must have pecuniary value-

OBLIGATIONS & 1) Vinculum Juris: juridical/legal

tie – binds the parties to the
obligation.
CONTRACTS 2) Causa: causa debendi/causa
obligations – why obligation
exists.

JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 254

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Art. 1157. Obligations arise from:
(1) Law;
(2) Contracts;
(3) Quasi-contracts;
(4) Acts or omissions punished by law; and
(5) Quasi-delicts. (1089a)
Art. 1158. Obligations derived from law are not
presumed. Only those expressly determined in this
Code or in special laws are demandable, and shall
be regulated by the precepts of the law which
establishes them; and as to what has not been
foreseen, by the provisions of this Book. (1090)
Art. 1159. Obligations arising from contracts have
the force of law between the contracting parties and
should be complied with in good faith. (1091a)
Note: Art. 1159 is the principle of “pacta sunt
servanda”.
OBLIGATION EX CONTRACTU (in general):
1. Must be complied with in good faith;
2. It is the law between the parties;
3. Neither party may unilaterally evade his
obligation in the contract, unless –
a. Contract authorizes it;
b. Other party assents.
Note: However, equity may be a ground to
relax the strict application of the terms of
the contract and when the principle of ribus
sic stantibus will apply.
4. Parties may freely enter into any
stipulations provided they are not contrary
to law, morals, good customs, public order
or public policy.
Nature of Contracts; Obligatoriness (1991)
Roland, a basketball star, was under contract for one
year to play-for-play exclusively for Lady Love, Inc.
However, even before the basketball season could open,
he was offered a more attractive pay plus fringes benefits
by Sweet Taste, Inc. Roland accepted the offer and
transferred to Sweet Taste. Lady Love sues Roland and
Sweet Taste for breach of contract. Defendants claim that
the restriction to play for Lady Love alone is void, hence,
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
unenforceable, as it constitutes an undue interference
with the right of Rolandany payment at all. Printado has
also a standing contract to enter into contracts and the
impairment of his freedom to play and enjoy basketball.
Can Roland be bound by the contract he entered into with
Lady Love or can he disregard the same? Is he liable at
all? How about Sweet Taste? Is it liable to Lady Love?
SUGGESTED ANSWER:
Roland is bound by the contract he entered into with Lady
Love and he cannot disregard the same, under the
principles of obligatoriness of contracts. Obligations
arising from contracts have the force of law between the
parties.
SUGGESTED ANSWER:
Yes, Roland is liable under the contract as far as Lady
Love is concerned. He is liable for damages under Article
1170 of the Civil Code since he contravened the tenor of
his obligation. Not being a contracting party, Sweet Taste
is not bound by the contract but it can be held liable
under Art. 1314. The basis of its liability is not prescribed
by contract but is founded on quasi-delict, assuming that
Sweet Taste knew of the contract. Article 1314 of the Civil
Code provides that any third person who induces another
to violate his contract shall be liable for damages to the
other contracting party.
ALTERNATIVE ANSWER:
It is assumed that Lady Love knew of the contract.
Neither Roland nor Sweet Taste would be liable, because
the restriction in the contract is violative of Article 1306 as
being contrary to law morals, good customs, public order
or public policy.
Nature of Contracts; Privity of Contract (1996)
Baldomero leased his house with a telephone to Jose.
The lease contract provided that Jose shall pay for all
electricity, water and telephone services in the leased
premises during the period of the lease. Six months later.
Jose surreptitiously vacated the premises. He left behind
unpaid telephone bills for overseas telephone calls
amounting to over P20,000.00. Baldomero refused to pay
the said bills on the ground that Jose had already
substituted him as the customer of the telephone
company. The latter maintained that Baldomero remained
as his customer as far as their service contract was
concerned, notwithstanding the lease contract between
Baldomero and Jose. Who is correct, Baldomero or the
telephone company? Explain.
SUGGESTED ANSWER:
The telephone company is correct because as far as it is
concerned, the only person it contracted with was
Baldomero. The telephone company has no contract with
Jose. Baldomero cannot substitute Jose in his stead
without the consent of the telephone company (Art. 1293,
NCC). Baldomero is, therefore, liable under the contract.
2012 Bar Exam Question
47. The following are the elements of an
obligation, except: a) Juridical/Legal Tie b)
Active subject c) Passive subject d)
Consideration
Art. 1160. Obligations derived from quasi-contracts
shall be subject to the provisions of Chapter 1, Title
XVII, of this Book. (n)
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OBLIGATIONS EX QUASI-CONTRACTU
Kinds:
1. Negotiorum gestio: unauthorized
management – arises whenever aperson
voluntarily takes charge of the agency or
management of another’s abandoned
business or property without the latter’s
authority.
2. Solution indebiti: undue payment – arises
when a person unduly delivers a thing
through mistake to another who has no
right to demand it.
2013 Exam MCQ (October 13, 2013)
VI. Gary is a tobacco trader and also a lending
investor. He sold tobacco leaves to Homer for
delivery within a month, although the period
for delivery was not guaranteed. Despite
Gary's efforts to deliver on time, transportation
problems and government red tape hindered
his efforts and he could only deliver after 30
days.
Homer refused to accept the late delivery and
to pay on the ground that the agreed term had
not been complied with. As lending investor,
Gary granted a Pl,000,000 loan to Isaac to be
paid within two years from execution of the
contract. As security for the loan, Isaac
promised to deliver to Gary his Toyota Innova
within seven (7) days, but Isaac failed to do so.
Gary was thus compelled to demand payment
for the loan before the end of the agreed two-
year term.
VI. (l) Was Homer justified in refusing to
accept the tobacco leaves? (1%) (A) Yes. Homer
was justified in refusing to accept the tobacco
leaves. The delivery was to be made within a
month. Gary's promise of delivery on a "best
effort" basis made the delivery uncertain. The
term, therefore, was ambiguous. (B) No.
Homer was not justified in refusing to
accept the tobacco leaves. He consented to
the terms and conditions of the sale and
must abide by it. Obligations arising from
contract have the force of law between the
contracting parties. (C) Yes. Homer was
justified in his refusal to accept the delivery.
The contract contemplates an obligation with a
term. Since the delivery was made after 30
days, contrary to the terms agreed upon, Gary
could not insist that Homer accept the tobacco
leaves. (D) No. Homer was not justified in
refusing to accept the tobacco leaves. There
was no term in the contract but a mixed
condition. The fulfillment of the condition did
not depend purely on Gary's will but on other
factors, e.g., the shipping company and the
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
government. Homer should comply with his
obligation. SUGGESTED ANSWER: (B) No.
Homer was not justified in refusing to
accept the tobacco leaves. He consented to
the terms and conditions of the sale and
must abide by it. Obligations arising from
contract have the force of law between the
contracting parties. It is clear under the
facts that the period of delivery of the
tobacco leaves was not guaranteed. Gary
anticipated other factors which may
prevent him from making the delivery
within a month. True enough,
transportation problems and government
red tape did. Such slight delay was, thus,
excusable. Obligations arising from
contract have the force of law between the
contracting parties and should be complied
with in good faith (Art. 1160, Civil Code)
VI. (2) Can Gary compel Isaac to pay his loan
even before the end of the two-year period?
(1%)(A) Yes, Gary can compel Isaac to
immediately pay the loan. Non-compliance
with the promised guaranty or security
renders the obligation immediately
demandable. Isaac lost his right to make
use of the period. (B) Yes, Gary can compel
Isaac to immediately pay the loan. The delivery
of the Toyota Innova is a condition for the
loan. Isaac's failure to deliver the car violated
the condition upon which the loan was
granted. It is but fair for Gary to demand
immediate payment. (C) No, Gary cannot
compel Isaac to immediately pay the loan. The
delivery of the car as security for the loan is an
accessory contract; the principal contract is
still the P 1,000,000 loan. Thus, Isaac can still
make use of the period. (D) No, Gary cannot
compel Isaac to immediately pay the loan.
Equity dictates that Gary should have granted
a reasonable extension of time for Isaac to
deliver his Toyota Innova. It would be unfair
and burdensome for Isaac to pay the
P1,000,000 simply because the promised
security was not delivered. SUGGESTED
ANSWER: (A) Yes, Gary can compel Isaac to
immediately pay the loan. Non-compliance
with the promised guaranty or security
renders the obligation immediately
demandable. Isaac lost his right to make
use of the period. Under Art 1198 (2) of the
Civil Code, the debtor shall lose every right
to make use of the period when he does not
furnish to the creditor the guaranties or
securities which he has promised.
2012 Bar Exam Question
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49. It is a juridical relation arising from lawful, or the stipulation of the parties requires another
voluntary and unilateral acts based on the standard of care. (1094a)
principle that no one should unjustly enrich NOTE: This art. Applies only if the object is
himself at the expense of another. a) Quasi- determinate.
contract b) Quasi-delict c) Cotract d) Delict
Art. 1164. The creditor has a right to the fruits of the
Art. 1161. Civil obligations arising from criminal thing from the time the obligation to deliver it arises.
offenses shall be governed by the penal laws, However, he shall acquire no real right over it until
subject to the provisions of Article 2177, and of the the same has been delivered to him. (1095)
pertinent provisions of Chapter 2, Preliminary Title,
on Human Relations, and of Title XVIII of this Book, 2012 Bar Exam Question
regulating damages. (1092a) 78. The creditor has the right to the fruits of
the thing from the time: a) the thing is
OBLIGATIONS EX DELICTU (or ex malefcio) delivered. b) the obligation to deliver the
GOVERNING LAWS: things arises. c) the contract is perfected. d)
1. Articles 100 – 113 of the RPC, and other the fruits are delivered.
special penal laws;
2. Human Relations Chapter of NCC; GR: Obligation to deliver arises from the time of the
3. Chapter on damages of NCC. perfection of the contract (meeting of the minds
between the parties).
NOTE: see CRIMINAL LAW REVIEWER for more Exceptions:
detailed discussion on the topic. 1. When there is a stipulation as regards the
right of the creditor to the fruits of the thing.
Art. 1162. Obligations derived from quasi-delicts
shall be governed by the provisions of Chapter 2, 2. When the obligation is subject to a
Title XVII of this Book, and by special laws. (1093a) suspensive condition or period; arises upon
the fulfillment of the condition or arrival of
the period.
NOTE: Topic is discussed in the Chapter on Quasi-
delicts.
PERSONAL RIGHT REAL RIGHT
A right enforceable only A right enforceable
against a definite against the whole world
person or group of
CHAPTER 2 persons
NATURE AND EFFECT OF OBLIGATIONS Right pertaining to a Right pertaining to a
person to demand from person over a specific
NATURE OF OBLIGATIONS: another, a s a definite thing, without definite
1. Personal Obligations – obligations to do passive subject, the passive subject against
or not to do; where the subject matter is an fulfillment of the whom the right may be
act to be done or not to be done prestation to give, to do personally enforced
a. Positive – obligation to do or not to do
b. Negative – obligation not to do

2. Real Obligations – obligations to give;

where the subject matter is a thing which
the obligor must deliver to the obligee
a. Determinate or specific – object is
particularly designated or physically
segregated from all other things of
the same class.
b. Generic – object is designated by
its class or genus.
c. Limited generic – generic objects
confined to a particular class.
Art. 1163. Every person obliged to give something
is also obliged to take care of it with the proper
diligence of a good father of a family, unless the law
Art. 1165. When what is to be delivered is a
determinate thing, the creditor, in addition to the
right granted him by Article 1170, may compel the
debtor to make the delivery.
If the thing is indeterminate or generic, he may ask
that the obligation be complied with at the expense
of the debtor.
If the obligor delays, or has promised to deliver the
same thing to two or more persons who do not have
the same interest, he shall be responsible for any
fortuitous event until he has effected the delivery.
(1096)

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Art. 1166. The obligation to give a determinate thing
includes that of delivering all its accessions and
accessories, even though they may not have been
mentioned. (1097a)
Art. 1167. If a person obliged to do something fails
to do it, the same shall be executed at his cost.
This same rule shall be observed if he does it in
contravention of the tenor of the obligation.
Furthermore, it may be decreed that what has been
poorly done be undone. (1098)
NOTE: Personal obligation to do may not be
compelled by court action.
Reason: It may amount to involuntary servitude.
Art. 1168. When the obligation consists in not
doing, and the obligor does what has been
forbidden him, it shall also be undone at his
expense. (1099a)
NOTE: If the thing cannot undone, the remedy is
action for damages.
Art. 1169. Those obliged to deliver or to do
something incur in delay from the time the obligee
judicially or extrajudicially demands from them the
fulfillment of their obligation.
However, the demand by the creditor shall not be
necessary in order that delay may exist:
(1) When the obligation or the law
expressly so declare; or
(2) When from the nature and the
circumstances of the obligation it appears
that the designation of the time when the
thing is to be delivered or the service is to
be rendered was a controlling motive for
the establishment of the contract; or
(3) When demand would be useless, as
when the obligor has rendered it beyond his
power to perform.
In reciprocal obligations, neither party incurs in
delay if the other does not comply or is not ready to
comply in a proper manner with what is incumbent
upon him. From the moment one of the parties
fulfills his obligation, delay by the other begins.
(1100a)
REQUISITES OF DELAY: (in general)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
1. Obligation must be due, demandable and
liquidated;
2. Debtor fails to perform his positive
obligation on the date agreed upon;
3. A demand (not a mere reminder or notice),
judicial of extra-judicial, made by the
creditor upon the debtor to comply with his
obligation;
4. There is failure to comply with such
demand.
KINDS OF DELAY
1. Mora Solvendi – default on the part of the
debtor:
a. Mora solvendi ex re – default in
real obligations.
b. Mora solvendi ex persona –
default in personal obligations.
REQUISITES:
a) The obligation must be due,
enforceable and already liquidated
or determinate in amount;
b) There must be non-performance;
and
c) There must be a demand, unless
demand is not required.
2012 Bar Exam Question
53. The following are the requisites of mora
solvendi, except: a) Obligation pertains to the
debtor and is determinate, due, demandable,
and liquidated. b) Obligation was performed
on its maturity date. c) There is judicial or
extrajudicial demand by the creditor. d)
Failure of the debtor to comply with such
demand.
EFFECTS OF DELAY:
1. Debtor is guilty of breach of the
obligation;
2. If the obligation is to pay money, must
pay interest. If no extrajudicial demand,
interest runs from the filing of the
complaint;
3. Payment of damages;
4. If the obligation is to deliver a
determinate thing, still liable even if the
loss is due to fortuitous event.
If the debtor can prove that the loss
would have resulted even if he had
not been in delay, the court may
equitably mitigate the liability (art.
2215[4]);
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2. Mora Accipiendi – default on the part of the It implies some kind of malice or dishonesty and it
creditor when he unjustifiably refuses to accept the cannot cover cases of mistake and errors of
performance of the obligation. judgment made in good faith. It is synonymous to
REQUISITES: bad faith (O’leary Macondray & Co., 45 Phil. 812,
a) Offer of performance by the debtor; [1924]).
b) Offer must be to comply with the
prestation as it should be performed; GR: Fraud an undue influence cannot co-exist.
c) Creditor refuses performance They are mutually opposed to each other.
without just cause. EXCEPTION: When undue influence was used to
EFFECTS: perpetrate fraud.
1. Responsibility of debtor is limited to
fraud and gross negligence; 2012 Bar Exam Question
2. Debtor is exempted from risk of loss of 54. It is an international evasion of the faithful
the thing; creditor bears the risk of loss; performance of the obligation. a) Negligence
3. Expenses incurred by the debtor for the b) Fraud c) Delay d) Mistake
preservation of the thing is chargeable
to the creditor;
4. If obligation bears interest, debtor does TYPES OF FRAUD:
not have to pay from time of delay; FRAUD IN THE CAUSAL INCIDENTAL
5. Creditor is liable for damages; PERFORMANCE FRAUD (art. FRAUD (art.
6. Debtor may relieve himself of obligation (art. 1170) 1338) 1334)
by consigning the thing to the court of Present during Present Present during
proper jurisdiction. the performance during the the perfection
of a pre-existing perfection of of the contract
3. Compensatio Morae – both parties are in obligation the contract
default (in reciprocal obligations); there is no Purpose is to
actionable default on the part of both parties. secure the
Performance must be simultaneous, unless Purpose is to Purpose is to consent of the
different dates for the performance of the evade the normal secure the other party but
obligation were fixed by the parties. ` fulfillment of the consent of the fraud was
obligation another to not the
2012 Bar Exam Question enter into the principal
52. This term refers to a delay on the part of contract inducement in
both the debtor and creditor in reciprocal making the
obligations. a) Mora accipiendi b) Mora contract
solvendi c) Compensation morae d) Solution Results in the
indibiti Results in the vitiation of Does not
breach of an consent; result in
2012 Bar Exam Question obligation voidable vitiation of
51. A debtor is liable for damages in case of contract consent
delay if he is guilty of any of the following, Gives rise to a Gives rise to Gives rise to a
except: a) default (mora) b) mistake c) right to recover a right of an right of an
negligence (culpa) d) breach through damages innocent party innocent party
contravention of the tenor thereof to annul the to claim for
contract damages

Art. 1170. Those who in the performance of their
obligations are guilty of fraud, negligence, or delay,
and those who in any manner contravene the tenor
thereof, are liable for damages. (1101)
Art. 1171. Responsibility arising from fraud is
demandable in all obligations. Any waiver of an
action for future fraud is void. (1102a)
Note: future fraud cannot be waived. Claim for
damages on the ground of fraud already committed,
however, may be made.
REMEDIES OF DEFRAUDED PARTY:
1. Insist of specific performance (art. 1233);
2. Rescind the contract;
3. Claim for damages, in either case.

FRAUD (dolo) Art. 1172. Responsibility arising from negligence in

Is the deliberate or intentional evasion of the normal the performance of every kind of obligation is also
fulfillment of an obligation (Manresa).

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____________________________________________________________________________________________________
demandable, but such liability may be regulated by the negligence contractual the state to
the courts, according to the circumstances. (1103) itself relation punish for
breach of
Art. 1173. The fault or negligence of the obligor public order
consists in the omission of that diligence which is Negligence Proof of existing Negligence
required by the nature of the obligation and must be contract and its must be
corresponds with the circumstances of the persons, proved by breach is prima proved by
of the time and of the place. When negligence preponderance facie sufficient to proof beyond
shows bad faith, the provisions of Articles 1171 and of evidence warrant recovery reasonable
2201, paragraph 2, shall apply. doubt
Diligence in Diligence in the Diligence in
If the law or contract does not state the diligence the selection selection and the selection
which is to be observed in the performance, that and supervision is and
which is expected of a good father of a family shall supervision of not a defense supervision is
be required. (1104a) employees is a not a defense.
defense
Liability of Liability of Liability of
Art. 1174. Except in cases expressly specified by
employer is employer is employer is
the law, or when it is otherwise declared by
direct and solidary subsidiary
stipulation, or when the nature of the obligation
primary
requires the assumption of risk, no person shall be
responsible for those events which could not be
foreseen, or which, though foreseen, were
inevitable. (1105a)
FRAUD NEGLIGENCE
There is deliberate No deliberate intention
NEGLIGENCE
intention to cause to cause damage
Consists in the omission of that diligence which is damage
required by the nature of the obligation and
Liability cannot be Liability may be
corresponds with the circumstances of the persons,
mitigated mitigated
time and of the place.
Waiver of future fraud is Waiver of negligence
void may be allowed in
KINDS:
certain cases
1. Criminal Negligence (culpa criminal);
2. Quasi-Delict (culpa aquiliana/culpa ex
EFFECTS OF CONTRIBUTORY NEGLIGENCE
contractual);
OF THE CREDITOR:
Culpa Aquillana includes intentional
acts (El Cano vs. Hill). 1. GR: Reduces or mitigates the damages
3. Contractual negligence (culpa which he can recover.
2. If the negligent act is the proximate cause
contractual).
of the event which led to the damage or
injury complained of, he cannot recover.

FORTUITOUS EVENT
An event which could not be foreseen, or which
though foreseen, is inevitable.
CULPA CULPA CULPA
REQUIREMENTS: (for fortuitous event)
AQUILIANA CONTRACTUAL CRIMINAL
1. The cause of the breach of the obligation
Negligence is
must be independent of the will of the
Negligence is merely an Negligence is
debtor;
substantive incident of also
2. The caso fortuito must be the sole cause;
and performance of substantive
3. The event is either unforeseeable or
independent an obligation
unavoidable;
There may or There is a pre-
4. The event must be such as to render it
may not be a existing No impossible for the debtor to fulfill his
pre-existing contractual contractual obligation in a normal manner;
contractual relation relation 5. The debtor must be free of participation in
relation or aggravation of injury to the creditor.
Source of Source of
Source of obligation is the obligation is GR: No liability for fortuitous event.
obligation is breach the right of
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Exceptions:
1. When expressly declared by law –
a) Bad faith;
b) Subject matter is generic;
c) Objects of criminal offense;
2. When expressly declared by stipulation in
the contract;
3. When nature of obligation requires
assumption of risk (insurance business);
4. When the debtor is in default;
5. When the obligor has promised to deliver
the same thing to 2 or more persons who
do not have the same interest (art.
1165[3]).
Rescission of Contract; Fortuitous Event
(2008)
No.XVIII. AB Corp. entered into a contract with
XY Corp. whereby the former agreed to
construct the research and laboratory facilities
of the latter. Under the terms of the contract,
AB Corp. agreed to complete the facility in 18
months, at the total contract price of P10
million. XY Corp. paid 50% of the total
contract price, the balance to be paid upon
completion of the work. The work stated
immediately, but AB Corp. later experienced
work slippage because of labor unrest in his
company. AB Corp.'s employees claimed that
they are not being paid on time; hence, the
work slowdown. As of the 17th month, work
was only 45% completed. AB Corp. asked for
extension of time, claiming that its labor
problems is a case of fortuitous event, but this
was denied by XY Corp. When it became
certain that the contruction could not be
finished on time, XY Corp. sent written notice
cancelling the contract, and requiring AB
Corp. to immediately vacate the premises. (A).
Can the labor unrest be considered a
fortuitous event? (1%) SUGGESTED ANSWER:
No. The labor unrest cannot be considered a
fortuitous event under Art. 1174 of the
Civil Code. A fortuitous event should occur
independent of the will of the debtor or
without his participation or aggravation
(Paras, Civil Code Annotated, vol. IV, 2000
ed., p 159). As mentioned in the facts, labor
unrest of the employees was caused by AB
Corp.'s failure to pay its employees on
time.
(B). Can XY Corp. unilaterrally and
immediately cancel the contract? (2%)
SUGGESTED ANSWER: No, XY Corp. cannot
unilaterally and immediately cancel the
contract. In the absence of any stipulation
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
for automatic rescission, rescission must be
judicial (Art. 1191, Civil Code).
(C). Must AB Corp. return the 50%
downpayment? (2%) SUGGESTED ANSWER:
AB Corp. need not return the 50% down
payment because 45% of the work was
already completed, otherwise, XY Corp.
would be unjustly enriching itself at the
expense of AB Corp.
2012 Bar Exam Question
55. The following are the requisites of
fortuitous event, except: a) Cause is
independent of the will of the debtor. b) The
event is unforeseeable/unavoidable. c)
Occurrence renders it absolutely impossible for
the debtor to fulfill his obligation in a normal
manner; impossibility must be absolute not
partial, otherwise not force majeure. d) Debtor
contributed to the aggravation of the injury
to the creditor.
2012 Bar Exam Question
56. A debtor may still be held liable for loss or
damages even if it was caused by a fortuitous
event in any of the following instances,
except: a) The debtor is guilty of dolo, malice
or bad faith, has promised the same thing to
two or more persons who do not have the
same interest. b) The debtor contributed to the
loss. c) The thing to be delivered is generic.
d) The creditor is guilty of fraud, negligence or
delay or if he contravened the tenor of the
obligation.
Art. 1175. Usurious transactions shall be governed
by special laws. (n)
NOTE: Usury law is currently suspended by the
Bangko Sentral. Parties may now freely stipulate
for interest rates. It must not, however be contrary
to morals. Thus interest of unconscionable rates
may be reduced by the courts.
Art. 1176. The receipt of the principal by the creditor
without reservation with respect to the interest, shall
give rise to the presumption that said interest has
been paid.
The receipt of a later installment of a debt without
reservation as to prior installments, shall likewise
raise the presumption that such installments have
been paid. (1110a)
NOTE: For the presumption ot apply, the receipt
must specify that is is the payment of latter
installments.
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Art. 1177. The creditors, after having pursued the
property in possession of the debtor to satisfy their
claims, may exercise all the rights and bring all the
actions of the latter for the same purpose, save
those which are inherent in his person; they may
also impugn the acts which the debtor may have
done to defraud them. (1111)
REMEDIES AVAILABLE TO CREDITORS FOR
THE SATISFACTION OF THEIR CLAIMS:
1. Exact fulfillment of the obligation by specific
or substitute performance with right to
damages in either case;
2. In reciprocal obligations, petition the court
to rescind (resolve) the contract;
3. Pursue the leviable property of the debtor;
4. Accion directa – (arts. 1729 and 1652):
Right of the lessor to go directly to the
sublessee for unpaid rents of the lessee.
Right of the laborers persons who furnish
materials for a piece of work undertaken by
a contractor to go directly to the owner for
any unpaid claims due to the contractor;
5. Accion subrogatoria – to be subrogated
to all the rights and actions of the debtor
save those which are inherent in his
person.
Requisites:
a. The debtor to whom the right of
action properly pertains must be
indebted to the creditor;
b. The creditor must be prejudiced by
the inaction or failure of the debtor
to proceed against the 3rd person;
c. The creditor must have pursued
first or exhausted all the properties
of the debtor which are not exempt
from execution;
d. The debtor’s assets are insufficient
to satisfy his claims; and
e. The right of account is not purely
personal.
6. Accion pauliana – asking the court to
rescind or to impugn all the acts which the
debtor may have done to defraud the
creditors (arts. 1380 – 1389).
Requisites:
a. There is a credit in favor of the
plaintiff;
b. The debtor has performed an act
subsequent to the contract, giving
advantage to other persons;
c. The debtor’s act is fraudulent;
d. The creditor is prejudiced by the
debtor’s act ;
e. Rescission will benefit the creditor;
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
f. Creditor has no other legal remedy.
Art. 1178. Subject to the laws, all rights acquired in
virtue of an obligation are transmissible, if there has
been no stipulation to the contrary. (1112)
CHAPTER 3
DIFFERENT KINDS OF OBLIGATIONS
SECTION 1. - Pure and Conditional Obligations
Art. 1179. Every obligation whose performance
does not depend upon a future or uncertain event,
or upon a past event unknown to the parties, is
demandable at once.
Every obligation which contains a resolutory
condition shall also be demandable, without
prejudice to the effects of the happening of the
event. (1113)
Conditional Obligations; Resolutory Condition (1999)
In 1997, Manuel bound himself to sell Eva a house and
lot which is being rented by another person, if Eva passes
the 1998 bar examinations. Luckily for Eva, she passed
said examinations.
(a) Suppose Manuel had sold the same house and lot to
another before Eva passed the 1998 bar examinations, is
such sale valid? Why? (2%)
(b) Assuming that it is Eva who is entitled to buy said
house and lot, is she entitled to the rentals collected by
Manuel before she passed the 1998 bar examinations?
Why? (3%)
SUGGESTED ANSWER:
(a) Yes, the sale to the other person is valid as a sale
with a resolutory condition because what operates as a
suspensive condition for Eva operates a resolutory
condition for the buyer.
FIRST ALTERNATIVE ANS WER:
Yes, the sale to the other person is valid. However, the
buyer acquired the property subject to a resolutory
Hence, upon Eva's passing the Bar, the rights of the other
buyer terminated and Eva acquired ownership of the
property.
SECOND ALTERNATIVE ANSWER:
The sale to another person before Eva could buy it from
Manuel is valid, as the contract between Manuel and Eva
is a mere promise to sell and Eva has not acquired a real
right over the land assuming that there is a price
stipulated in the contract for the contract to be considered
a sale and there was delivery or tradition of the thing sold.
SUGGESTED ANSWER:
(b) No, she is not entitled to the rentals collected by
Manuel because at the time they accrued and were
collected, Eva was not yet the owner of the property.
FIRST ALTERNATIVE ANSWER:
Assuming that Eva is the one entitled to buy the house
and lot, she is not entitled to the rentals collected by
Manuel before she passed the bar examinations.
Whether it is a contract of sale or a contract to sell,
reciprocal prestations are deemed imposed A for the
seller to deliver the object sold and for the buyer to pay
the price. Before the happening of the condition, the fruits
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of the thing and the interests on the money are deemed
to have been mutually compensated under Article 1187.
SECOND ALTERNATIVE ANSWER:
Under Art. 1164, there is no obligation on the part of
Manuel to deliver the fruits (rentals) of the thing until the
obligation to deliver the thing arises. As the suspensive
condition has not been fulfilled, the obligation to sell does
not arise.
Donations; with Resolutory Condition (2003)
In 1950, Dr. Alba donated a parcel of land to Central
University on condition that the latter must establish a
medical college on the land to be named after him. In the
year 2000, the heirs of Dr. Alba filed an action to annul
the donation and for the reconveyance of the property
donated to them for the failure, after 50 years, of the
University to established on the property a medical school
named after their father. The University opposed the
action on the ground of prescription and also because it
had not used the property for some purpose other than
that stated in the donation. Should the opposition of the
University to the action of Dr. Alba’s heirs be sustained?
Explain.
SUGGESTED ANSWER:
The donation may be revoked. The non-established of
the medical college on the donated property was a
resolutory condition imposed on the donation by the
donor. Although the Deed of Donation did not fix the time
for the established of the medical college, the failure of
the donee to establish the medical college after fifty (50)
years from the making of the donation should be
considered as occurrence of the resolutory condition, and
the donation may now be revoked. While the general rule
is that in case the period is not fixed in the agreement of
the parties, the period must be fixed first by the court
before the obligation may be demanded, the period of fifty
(50) years was more than enough time for the donee to
comply with the condition. Hence, in this case, there is no
more need for the court to fix the period because such
procedure with the condition. (Central Philippine
University v. CA. 246 SCRA 511).
ANOTHER SUGGESTED ANSWER:
The donation may not as yet revoked. The establishment
of a medical college is not a resolutory or suspensive
condition but a “charge”, obligation”, or a “mode”. The
non- compliance with the charge or mode will give the
donor the right to revoke the donation within four (4)
years from the time the charge was supposed to have
been complied with, or to enforce the charge by specific
performance within ten
(10) years from the time the cause of action accrued.
Inasmuch as the time to established the medical college
has yet default in his obligation until the period is fixed by
order of the court under Article 1197 of the New Civil
Code. Since the period has not been fixed as yet, the
donee is not yet default, and therefore the donor has no
cause of action to revoke the donation. (Dissenting
opinion of Davide, CJ, Central Philippine University v.
Court of Appeals, 246 SCRA 511 [1995])
Art. 1180. When the debtor binds himself to pay
when his means permit him to do so, the obligation
shall be deemed to be one with a period, subject to
the provisions of Article 1197. (n)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 1197. If the obligation does not fix a period, but
from its nature and the circumstances it can be
inferred that a period was intended, the courts may
fix the duration thereof.
The courts shall also fix the duration of the period
when it depends upon the will of the debtor.
In every case, the courts shall determine such period
as may under the circumstances have been probably
contemplated by the parties. Once fixed by the
courts, the period cannot be changed by them.
Conditional Obligations (2003)
Are the following obligations valid, why, and if they are
valid, when is the obligation demandable in each case?
a) If the debtor promises to pay as soon as he has the
means to pay; b) If the debtor promises to pay when he
likes; c) If the debtor promises to pay when he becomes a
lawyer; d) If the debtor promises to pay if his son, who is
sick with cancer, does not die within one year. 5%
SUGGESTED ANSWER:
(a) The obligation is valid. It is an obligation subject to an
indefinite period because the debtor binds himself to pay
when his means permit him to do so (Article 1180, NCC).
When the creditor knows that the debtor already has the
means to pay, he must file an action in court to fix the
period, and when the definite period as set by the court
arrives, the obligation to pay becomes demandable
9Article 1197, NCC).
SUGGESTED ANSWER:
(b) The obligation “to pay when he likes” is a suspensive
condition the fulfillment of which is subject to the sole will
of the debtor and, therefore the conditional obligation is
void. (Article 1182, NCC).
SUGGESTED ANSWER:
(c) The obligation is valid. It is subject to a suspensive
condition, i.e. the future and uncertain event of his
becoming a lawyer. The performance of this obligation
does not depend solely on the will of the debtor but also
on condition of Eva passing the 1998 Bar Examinations.
other factors outside the debtor’s control.
SUGGESTED ANSWER:
(d) The obligation is valid. The death of the son of cancer
within one year is made a negative suspensive condition
to his making the payment. The obligation is demandable
if the son does not die within one year (Article 1185,
NCC).
Art. 1181. In conditional obligations, the acquisition
of rights, as well as the extinguishment or loss of
those already acquired, shall depend upon the
happening of the event which constitutes the
condition. (1114)
CONDITION
Is a future and uncertain event or a past event
unknown to the parties.
Art. 1182. When the fulfillment of the condition
depends upon the sole will of the debtor, the
conditional obligation shall be void. If it depends
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upon chance or upon the will of a third person, the
obligation shall take effect in conformity with the
provisions of this Code. (1115)
Note: This article does not apply to re-existing
obligations.
Conditional Obligations (2000)
Pedro promised to give his grandson a car if the latter will
pass the bar examinations. When his grandson passed
the said examinations, Pedro refused to give the car on
the ground that the condition was a purely potestative
one. Is he correct or not? (2%)
SUGGESTED ANSWER:
No, he is not correct. First of all, the condition is not
purely potestative, because it does not depend on the
sole will of one of the parties. Secondly, even if it were, it
would be valid because it depends on the sole will of the
creditor (the donee) and not of the debtor (the donor).
Conditional Obligations; Promise (1997)
In two separate documents signed by him, Juan
Valentino "obligated" himself each to Maria and to Perla,
thus - 'To Maria, my true love, I obligate myself to give
you my one and only horse when I feel like It." - and -'To
Perla, my true sweetheart, I obligate myself to pay you
the P500.00 I owe you when I feel like it." Months passed
but Juan never bothered to make good his promises.
Maria and Perla came to consult you on whether or not
they could recover on the basis of the foregoing settings.
What would your legal advice be?
SUGGESTED ANSWER:
I would advise Maria not to bother running after Juan for
the latter to make good his promise. [This is because a
promise is not an actionable wrong that allows a party to
recover especially when she has not suffered damages
resulting from such promise. A promise does not create
an obligation on the part of Juan because it is not
something which arises from a contract, law, quasi-
contracts or quasi¬delicts (Art, 1157)]. Under Art. 1182,
Juan's promise to Maria is void because a conditional
obligation depends upon the sole will of the obligor.
As regards Perla, the document is an express
acknowledgment of a debt, and the promise to pay what
he owes her when he feels like it is equivalent to a
promise to pay when his means permits him to do so, and
is deemed to be one with an indefinite period under Art.
1180. Hence the amount is recoverable after Perla asks
the court to set the period as provided by Art. 1197, par.
2.
Art. 1183. Impossible conditions, those contrary to
good customs or public policy and those prohibited
by law shall annul the obligation which depends
upon them. If the obligation is divisible, that part
thereof which is not affected by the impossible or
unlawful condition shall be valid.
The condition not to do an impossible thing shall be
considered as not having been agreed upon.
(1116a)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
NOTE: Determine the impossibility of condition at
the time of the constitution of the obligation. Thus,
subsequent possibility does not cure the defect.
GR: Impossible and illegal conditions shall annul
the obligation which depends upon them.
Exceptions:
1. Pre-existing obligations;
2. If obligation is divisible;
3. Simple remuneratory donations;
4. Testamentary disposition;
5. Condition not to do the impossible thing.
Donations; Effect; illegal & immoral conditions (1997)
Are the effects of illegal and immoral conditions on simple
donations the same as those effects that would follow
when such conditions are imposed on donations con
causa onerosa?
SUGGESTED ANSWER:
No, they don't have the same effect. Illegal or impossible
conditions in simple and remuneratory donations shall be
considered as not imposed. Hence the donation is valid.
The donation will be considered as simple or pure. The
condition or mode is merely an accessory disposition,
and its nullity does not affect the donation, unless it
clearly appears that the donor would not have made the
donation without the mode or condition.
Donations con causa onerosa is governed by law on
obligations and contracts, under which an impossible or
Illicit condition annuls the obligation dependent upon the
condition where the condition is positive and suspensive.
If the impossible or illicit condition is negative, it is simply
considered as not written, and the obligation is converted
into a pure and simple one. However, in order that an
illegal condition may annul a contract, the impossibility
must exist at the time of the creation of the obligation; a
supervening impossibility does not affect the existence of
the obligation.
ADDITIONAL ANSWER:
No. In simple or pure donation, only the illegal or
irrevocable, the latter is revocable. In the problem given,
all impossible condition is considered not written but the
donation remains valid and becomes free from
conditions. The condition or mode being a mere
accessory disposition. Its nullity does not affect the
donation unless it clearly appears that the donor would
not have made the donation without the mode or
condition. On the other hand, onerous donation is
governed by the rules on contracts. Under Article 1183,
Impossible or illegal conditions shall annul the obligation
which depends upon them. In these cases, both the
obligation and the condition are void.
Art. 1184. The condition that some event happen at
a determinate time shall extinguish the obligation as
soon as the time expires or if it has become
indubitable that the event will not take place. (1117)
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Art. 1185. The condition that some event will not
happen at a determinate time shall render the
obligation effective from the moment the time
indicated has elapsed, or if it has become evident
that the event cannot occur.
If no time has been fixed, the condition shall be
deemed fulfilled at such time as may have probably
been contemplated, bearing in mind the nature of
the obligation. (1118)
Art. 1186. The condition shall be deemed fulfilled
when the obligor voluntarily prevents its fulfillment.
(1119)
CONSTRUCTIVE FULFILLMENT
Requisites:
1. There must be intent to prevent fulfillment;
2. Fulfillment was actually prevented.
Art. 1187. The effects of a conditional obligation to
give, once the condition has been fulfilled, shall
retroact to the day of the constitution of the
obligation. Nevertheless, when the obligation
imposes reciprocal prestations upon the parties, the
fruits and interests during the pendency of the
condition shall be deemed to have been mutually
compensated. If the obligation is unilateral, the
debtor shall appropriate the fruits and interests
received, unless from the nature and circumstances
of the obligation it should be inferred that the
intention of the person constituting the same was
different.
In obligations to do and not to do, the courts shall
determine, in each case, the retroactive effect of the
condition that has been complied with. (1120)
Art. 1188. The creditor may, before the fulfillment of
the condition, bring the appropriate actions for the
preservation of his right.
The debtor may recover what during the same time
he has paid by mistake in case of a suspensive
condition. (1121a)
NOTE: Relate also to 1195.
Art. 1189. When the conditions have been imposed
with the intention of suspending the efficacy of an
obligation to give, the following rules shall be
observed in case of the improvement, loss or
deterioration of the thing during the pendency of the
condition:
(1) If the thing is lost without the fault of the
debtor, the obligation shall be extinguished;
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(2) If the thing is lost through the fault of the
debtor, he shall be obliged to pay damages;
it is understood that the thing is lost when it
perishes, or goes out of commerce, or
disappears in such a way that its existence
is unknown or it cannot be recovered;
(3) When the thing deteriorates without the
fault of the debtor, the impairment is to be
borne by the creditor;
(4) If it deteriorates through the fault of the
debtor, the creditor may choose between
the rescission of the obligation and its
fulfillment, with indemnity for damages in
either case;
(5) If the thing is improved by its nature, or
by time, the improvement shall inure to the
benefit of the creditor;
(6) If it is improved at the expense of the
debtor, he shall have no other right than
that granted to the usufructuary. (1122)
2011 Bar Exam Question
(58) X sold Y 100 sacks of rice that Y was to
pick up from X’s rice mill on a particular date.
Y did not, however, appear on the agreed date
to take delivery of the rice. After one week, X
automatically rescinded the sale without
notarial notice to Y. Is the rescission valid? (A)
Yes, automatic rescission is allowed since,
having the character of movables and
consumables, rice can easily deteriorate. (B)
No, the buyer is entitled to a customary 30-
day extension of his obligation to take delivery
of the goods. (C) No, since there was no
express agreement regarding automatic
rescission. (D) No, the seller should first
determine that Y was not justified in failing to
appear.
Art. 1190. When the conditions have for their
purpose the extinguishment of an obligation to give,
the parties, upon the fulfillment of said conditions,
shall return to each other what they have received.
In case of the loss, deterioration or improvement of
the thing, the provisions which, with respect to the
debtor, are laid down in the preceding article shall
be applied to the party who is bound to return.
As for the obligations to do and not to do, the
provisions of the second paragraph of Article 1187
shall be observed as regards the effect of the
extinguishment of the obligation. (1123)
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Art. 1191. The power to rescind obligations is
implied in reciprocal ones, in case one of the
obligors should not comply with what is incumbent
upon him.
The injured party may choose between the
fulfillment and the rescission of the obligation, with
the payment of damages in either case. He may
also seek rescission, even after he has chosen
fulfillment, if the latter should become impossible.
The court shall decree the rescission claimed,
unless there be just cause authorizing the fixing of a
period.
certain has been fixed, shall be demandable only
when that day comes.
Obligations with a resolutory period take effect at
once, but terminate upon arrival of the day certain.
A day certain is understood to be that which must
necessarily come, although it may not be known
when.
If the uncertainty consists in whether the day will
come or not, the obligation is conditional, and it
shall be regulated by the rules of the preceding
Section. (1125a)

This is understood to be without prejudice to the

rights of third persons who have acquired the thing, TERM CONDITION
in accordance with Articles 1385 and 1388 and the Fact or event which is
Mortgage Law. (1124) Interval of time which is future or uncertain or a
future and certain past event unknown to
Note: If the contract contains a stipulation granting the parties
the right to rescind the contract in case of breach, Time necessarily comes Future and uncertain
the innocent/injured party can extra-judicially although it may not be fact or event which may
rescind the contract. known when or may not happen
Exerts an influence Exerts an influence
NOTES ON RESCISSION/RESOLUTION: upon the time of upon the very existence
1. Can be judicial or extra-judicial. demandability or of the obligation itself
a. Judicial – if no stipulation in the extinguishment of an
contract. obligation
b. Extrajudicial – there is a stipulation Does not have any
in the contract. retroactive effect unless Has retroactive effect
there is an agreement
2. The breach must be substantial; to the contrary
3. There must be notice to the other party in When it is left When it is left
either case; excusively to the will of exclusively to the will of
4. If there is a provision in the contract the debtor, the the debtor, the
granting the right to rescind, the judgment existence of the obligation is void
of the court is but confirmatory only of the obligation is not affected
right to rescind or the fact of rescission; Court may fix the period Court cannot fix the
5. Partial rescission may be granted; period
6. Article 1191 presupposes a valid and
existing obligation.
Art. 1194. In case of loss, deterioration or
improvement of the thing before the arrival of the
Art. 1192. In case both parties have committed a day certain, the rules in Article 1189 shall be
breach of the obligation, the liability of the first observed. (n)
infractor shall be equitably tempered by the courts.
If it cannot be determined which of the parties first
Art. 1195. Anything paid or delivered before the
violated the contract, the same shall be deemed
arrival of the period, the obligor being unaware of
extinguished, and each shall bear his own
the period or believing that the obligation has
damages. (n)
become due and demandable, may be recovered,
with the fruits and interests. (1126a)

Art. 1196. Whenever in an obligation a period is

SECTION 2. - Obligations with a Period designated, it is presumed to have been
established for the benefit of both the creditor and
Art. 1193. Obligations for whose fulfillment a day the debtor, unless from the tenor of the same or
other circumstances it should appear that the period
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 266
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has been established in favor of one or of the other.
(1127)
PERIOD FOR THE BENEFIT OF THE
CREDITOR
Creditor may demand the fulfillment of the
obligation at any time but the debtor cannot
compel him to accept by performing his obligation
in advance.
PERIOD FOR THE BENEFIT OF THE DEBTOR
Debtor may oppose any premature demand of the
creditor but he may renounce the benefit of the
period by performing his obligation in advance
(Manresa).
Art. 1197. If the obligation does not fix a period, but
from its nature and the circumstances it can be
inferred that a period was intended, the courts may
fix the duration thereof.
The courts shall also fix the duration of the period
when it depends upon the will of the debtor.
In every case, the courts shall determine such
period as may under the circumstances have been
probably contemplated by the parties. Once fixed
by the courts, the period cannot be changed by
them. (1128a)
WHEN THE STIPULATION SAYS “PAYABLE
WHEN ABLE”, IT IS WITH A PERIOD; REMEDY –
1. Agreement between the parties;
2. Court shall fix the period of payment when
parties unable to agree.
NOTE: The court must first fix the period before an
action to enforce the obligation can prosper.
However, in very exceptional cases, when the fixing
of the period would entail more delay.
Art. 1198. The debtor shall lose every right to make
use of the period:
(1) When after the obligation has been contracted,
he becomes insolvent, unless he gives a guaranty
or security for the debt;
(2) When he does not furnish to the creditor the
guaranties or securities which he has promised;
(3) When by his own acts he has impaired said
guaranties or securities after their establishment,
and when through a fortuitous event they
disappear, unless he immediately gives new ones
equally satisfactory;
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(4) When the debtor violates any undertaking, in
consideration of which the creditor agreed to the
period;
(5) When the debtor attempts to abscond. (1129a)
SECTION 3. - Alternative Obligations
Art. 1199. A person alternatively bound by different
prestations shall completely perform one of them.
The creditor cannot be compelled to receive part of
one and part of the other undertaking. (1131)
Art. 1200. The right of choice belongs to the debtor,
unless it has been expressly granted to the creditor.
The debtor shall have no right to choose those
prestations which are impossible, unlawful or which
could not have been the object of the obligation.
(1132)
Art. 1201. The choice shall produce no effect
except from the time it has been communicated.
(1133)
Art. 1202. The debtor shall lose the right of choice
when among the prestations whereby he is
alternatively bound, only one is practicable. (1134)
Art. 1203. If through the creditor's acts the debtor
cannot make a choice according to the terms of the
obligation, the latter may rescind the contract with
damages. (n)
Art. 1204. The creditor shall have a right to
indemnity for damages when, through the fault of
the debtor, all the things which are alternatively the
object of the obligation have been lost, or the
compliance of the obligation has become
impossible.
The indemnity shall be fixed taking as a basis the
value of the last thing which disappeared, or that of
the service which last became impossible.
Damages other than the value of the last thing or
service may also be awarded. (1135a)
Art. 1205. When the choice has been expressly
given to the creditor, the obligation shall cease to
be alternative from the day when the selection has
been communicated to the debtor.
Until then the responsibility of the debtor shall be
governed by the following rules:
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(1) If one of the things is lost through a
fortuitous event, he shall perform the Art. 1207. The concurrence of two or more creditors
obligation by delivering that which the or of two or more debtors in one and the same
creditor should choose from among the obligation does not imply that each one of the
remainder, or that which remains if only one former has a right to demand, or that each one of
subsists; the latter is bound to render, entire compliance with
the prestation. There is a solidary liability only when
(2) If the loss of one of the things occurs the obligation expressly so states, or when the law
through the fault of the debtor, the creditor or the nature of the obligation requires solidarity.
may claim any of those subsisting, or the (1137a)
price of that which, through the fault of the
former, has disappeared, with a right to 2012 Bar Exam Question
damages; 57. Buko, Fermin and Toti bound themselves
solidarily to pay Ayee the amount of P
5,000.00. Suppose Buko paid the obligation,
(3) If all the things are lost through the fault
what is his right as against his co-debtors? a)
of the debtor, the choice by the creditor
shall fall upon the price of any one of them, Buko cas ask for reimbursement from
also with indemnity for damages. Fermin and Toti. b) Buko can sue Fermin
and Toti for damages. c) Buko can sue for
rescission. d) Buko can claim a refund from
The same rules shall be applied to obligations to do Ayee.
or not to do in case one, some or all of the
prestations should become impossible. (1136a) 2012 Bar Exam Question
58. Buko, Fermin and Toti bound themselves
Art. 1206. When only one prestation has been solidarily to pay Ayee the sum of P 10,000.00.
agreed upon, but the obligor may render another in When the obligation became due and
substitution, the obligation is called facultative. demandable, Ayee sued Buko for the payment
of the P 10,000.00. Buko moved to dismiss on
The loss or deterioration of the thing intended as a the ground that there was failure to implead
substitute, through the negligence of the obligor, Fermin and Toti who are indispensable
does not render him liable. But once the substitution parties. Will the motion to dismiss prosper?
has been made, the obligor is liable for the loss of Why? a) Yes, because Fermin and Toti should
the substitute on account of his delay, negligence or have been impleaded as their obligation is
fraud. (n) solidary. b) No, because the creditor may
proceed against any one of the solidary
ALTERNATIVE FACULTATIVE debtors or some or all of them
Various things are Only one thing is due but simultaneously. c) No, because a motion to
due but the giving a substitute may be given dismiss is a prohibited pleading.
principally of one is to render d) Yes, because Fermin and Toti should also
sufficient payment/fulfillment easy pay their share of the obligation.
If the principal obligation is
If one of prestations is void, there is no necessity 2012 Bar Exam Question
illegal, others may be of giving the substitute; 59. Buko, Fermin and Toti are solidarily
valid but obligation nullity of principal carries debtors of Ayee. Twelve (12) years after the
remains with it the nullity of the obligation became due and demandable, Buko
substitute paid Ayee and later on asked for
If it is impossible to give reimbursement of Fermin’s and Toti’s shares.
If it is impossible to the principal, the Is Buko correct? Why? a) No, because the
give all except one, substitute does not have obligation has already prescribed. b) Yes,
the last one must still to be given; if it is because the obligation is solidary. c) No,
be given impossible to give the because in solidary obligation any one of the
substitute, the principal solidary debtors can pay the entire debt. d)
must still be given Yes, because Fermin and Toti will be unduly
Right of choice may The right of choice is enriched at the expense of Buko.
be given to the debtor given only to the debtor 2012 Bar Exam Question
or creditor 60. Buko, Fermin and Toti are solidary debtors
under a loan obligation of P 300,000.00 which
SECTION 4. - Joint and Solidary Obligations has fallen due. The creditor has, however,
condoned Fermin’s entire share in the debt.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 268
____________________________________________________________________________________________________
Since Toti has become insolvent, the creditor
makes a demand on Buko to pay the debt.
How much, if any, may Buko be compelled to
pay? a) P 200.000.00 b) P 300,000.00 c) P
100,000.00 d) P 150,000.00
(66) Roy and Carlos both undertook a contract
to deliver to Sam in Manila a boat docked in
Subic. Before they could deliver it, however,
the boat sank in a storm. The contract
provides that fortuitous event shall not exempt
Roy and Carlos from their obligation. Owing to
the loss of the motor boat, such obligation is
deemed converted into one of indemnity for
damages. Is the liability of Roy and Carlos
joint or solidary? (A) Neither solidary nor joint
since they cannot waive the defense of
fortuitous event to which they are entitled. (B)
Solidary or joint upon the discretion of Sam.
(C) Solidary since Roy and Carlos failed to
perform their obligation to deliver the motor
boat. (D) Joint since the conversion of their
liability to one of indemnity for damages
made it joint.
2011 Bar Exam Question
(51) Rudolf borrowed P1 million from Rodrigo
and Fernando who acted as solidary creditors.
When the loan matured, Rodrigo wrote a letter
to Rudolf, demanding payment of the loan
directly to him. Before Rudolf could comply,
Fernando went to see him personally to collect
and he paid him. Did Rudolf make a valid
payment? (A) No, since Rudolf should have
split the payment between Rodrigo and
Fernando. (B) No, since Rodrigo, the other
solidary creditor, already made a prior
demand for payment from Rudolf. (C) Yes,
since the payment covers the whole obligation.
(D) Yes, since Fernando was a solidary
creditor, payment to him extinguished the
obligation.
GR: When there is concurrence of two or more
creditors or two or more debtors in one and the
same obligation, the presumption is that the
obligation is only joint.
Exceptions:
1. When it is expressly stated that there is
solidarity;
2. When law requires solidarity;
3. When the nature of the obligation requires
solidarity;
4. When the will of a person imposed upon
the heirs or legatees expressly states the
charge or condition is solidary;
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
5. When solidary obligation is imposed by a
final judgment upon several defendants
(Gutierrez vs. Gutierrez)
SOME PROVISIONS OF LAW PROVIDING FOR
SOLIDARITY:
1. ART. 927, NCC;
2. ART. 1824, NCC;
3. ART. 2180, NCC;
4. ART. 1915, NCC;
5. ART. 1945, NCC;
6. ART. 2146, NCC;
7. ART. 21 57, NCC;
8. ART. 2184, NCC;
9. ART. 2194, NCC;
10. ART. 1723, NCC;
11. ART. 106, LABOR CODE, (liability of
contractor together with the employer);
12. Art. 110, RPC.
13. Art 219, FC.
Liability; Solidary Liability (2008)
No. XV. Eduardo was granted a loan by XYZ
Bank for the purpose of improving a building
which XYZ leased from him. Eduardo,
executed the promissory note ("PN") in favor of
the bank, with his friend Recardo as co-
signatory. In the PN, they both acknowledged
that they are "individually and collectively"
liable and waived the need for prior demand.
To secure the PN, Recardo executed a real
estate mortgage on his own property. When
Eduardo defaulted on the PN, XYZ stopped
payment of rentals on the building on the
ground that legal compensation had set in.
Since there was still a balance due on the PN
after applying the rentals, XYZ foreclosed the
real estate mortgage over Recardo's property.
Recardo opposed the foreclosure on the
ground that he is only a co-signatory; that no
demand was made upon him for payment, and
assuming he is liable, his liability should not
go beyond half the balance of the loan.
Further, Recardo said that when the bank
invoked compensation between the reantals
and the amount of the loan, it amounted to a
new contract or novation, and had the effect of
extinguishing the security since he did not give
his consent (as owner of the property under
the real estate mortgage) thereto. (B). Can
Recardo's property be foreclosed to pay the full
balance of the loan? (2%) SUGGESTED
ANSWER:
Yes, Recardo's property can be foreclosed
to pay the full balance of the loan because
when he signed as co-signatory in the
promissory note, he acknowledged he is
solidarily liable with Eduardo. In solidary
obligations, a creditor has the right to
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demand full payment of the obligation from
any of the solidary debtors (Art. 1207, Civil
Code).
Liability; Lease; Joint Liability (2001)
Four foreign medical students rented the apartment of
Thelma for a period of one year. After one semester,
three of them returned to their home country and the
fourth transferred to a boarding house. Thelma
discovered that they left unpaid telephone bills in the total
amount of P80,000.00. The lease contract provided that
the lessees shall pay for the telephone services in the
leased premises. Thelma demanded that the fourth
student pay the entire amount of the unpaid telephone
bills, but the latter is willing to pay only one fourth of it.
Who is correct? Why? (5%)
SUGGESTED ANSWER:
The fourth student is correct. His liability is only joint,
hence, pro rata. There is solidary liability only when the
obligation expressly so states or when the law or nature
of the obligation requires solidarity (Art. 1207, CC). The
contract of lease in the problem does not, in any way,
stipulate solidarity.
solidary co-maker is not relieved of further liability on the
mortgage.
(c) The third defense of Y is untenable. Y is a surety of X
and the extrajudicial demand against the principal debtor
is not inconsistent with a judicial demand against the
surety. A suretyship may co-exist with a mortgage.
(d) The fourth defense of Y is untenable. Y is liable for the
entire prestation since Y incurred a solidary obligation
with X. (Arts. 1207, 1216. 1252 and 2047 Civil Code;
Bicol Savings and Loan Associates vs. Guinhawa 188
SCRA 642)
Art. 1208. If from the law, or the nature or the
wording of the obligations to which the preceding
article refers the contrary does not appear, the
credit or debt shall be presumed to be divided into
as many shares as there are creditors or debtors,
the credits or debts being considered distinct from
one another, subject to the Rules of Court
governing the multiplicity of suits. (1138a)

Art. 1209. If the division is impossible, the right of

Liability; Solidary Obligation (1992) the creditors may be prejudiced only by their
In June 1988, X obtained a loan from A and executed
collective acts, and the debt can be enforced only
with Y as solidary co-maker a promissory note in favor of
A for the sum of P200,000.00. The loan was payable at by proceeding against all the debtors. If one of the
P20,000.00 with interest monthly within the first week of latter should be insolvent, the others shall not be
each month beginning July 1988 until maturity in April liable for his share. (1139)
1989. To secure the payment of the loan. X put up as
security a chattel mortgage on his car, a Toyota Corolla Art. 1210. The indivisibility of an obligation does not
sedan. Because of failure of X and Y to pay the principal necessarily give rise to solidarity. Nor does
amount of the loan, the car was extrajudicially foreclosed.
A acquired the car at A's highest bid of P120,000.00
solidarity of itself imply indivisibility. (n)
during the auction sale.
After several fruitless letters of demand against X and Y, INDIVISIBILITY SOLIDARITY
A sued Y alone for the recovery of P80.000.00 Refers to the prestation Refers to the legal tie
constituting the deficiency. Y resisted the suit raising the which constitutes the and consequently to the
following defenses: a) That Y should not be liable at all object of the obligation subjects or parties of
because X was not
sued together with Y.
the obligation
b) That the obligation has been paid completely by Plurality of subjects is Plurality of subject is
A's acquisition of the car through "dacion en pago" or not required indispensable
payment by cession. In case of breach, When there is liability
c) That Y should not be held liable for the obligation is converted on the part of the
deficiency of P80,000.00 because he was not a co- into one of indemnity for debtors because of the
mortgagor in the chattel mortgage of the car which damages because of breach, the solidarity
contract was executed by X alone as owner and the breach, indivisibility among the debtors
mortgagor.
of the obligation is remains
d) That assuming that Y is liable, he should only pay the
proportionate sum of P40,000.00. Decide each defense terminated
with reasons.
SUGGESTED ANSWER:
Art. 1211. Solidarity may exist although the
(a) This first defense of Y is untenable. Y is still liable as creditors and the debtors may not be bound in the
solidary debtor. The creditor may proceed against any
same manner and by the same periods and
one of the solidary debtors. The demand against one
does not preclude further demand against the others so conditions. (1140)
long as the debt is not fully paid.
Art. 1212. Each one of the solidary creditors may do
(b) The second defense of Y is untenable. Y is still liable. whatever may be useful to the others, but not
The chattel mortgage is only given as a security and not anything which may be prejudicial to the latter.
as payment for the debt in case of failure to pay. Y as a (1141a)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 270
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Art. 1213. A solidary creditor cannot assign his
rights without the consent of the others. (n)
TAKE NOTE: Prohibition will not apply if the
assignment is to a co-creditor.
Art. 1214. The debtor may pay any one of the
solidary creditors; but if any demand, judicial or
extrajudicial, has been made by one of them,
payment should be made to him. (1142a)
Art. 1215. Novation, compensation, confusion or
remission of the debt, made by any of the solidary
creditors or with any of the solidary debtors, shall
extinguish the obligation, without prejudice to the
provisions of Article 1219.
The creditor who may have executed any of these
acts, as well as he who collects the debt, shall be
liable to the others for the share in the obligation
corresponding to them. (1143)
Art. 1216. The creditor may proceed against any
one of the solidary debtors or some or all of them
simultaneously. The demand made against one of
them shall not be an obstacle to those which may
subsequently be directed against the others, so
long as the debt has not been fully collected.
(1144a)
Art. 1217. Payment made by one of the solidary
debtors extinguishes the obligation. If two or more
solidary debtors offer to pay, the creditor may
choose which offer to accept.
He who made the payment may claim from his co-
debtors only the share which corresponds to each,
with the interest for the payment already made. If
the payment is made before the debt is due, no
interest for the intervening period may be
demanded.
When one of the solidary debtors cannot, because
of his insolvency, reimburse his share to the debtor
paying the obligation, such share shall be borne by
all his co-debtors, in proportion to the debt of each.
(1145a)
2013 Exam MCQ (October 13, 2013)
II. A, B, C and D are the solidary debtors of X
for P40,000. X released D from the payment of
his share of PI 0,000. When the obligation
became due and demandable, C turned out to
be insolvent.
Should the share of insolvent debtor C be
divided only between the two other remaining
debtors, A and B? (1%)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(A) Yes. Remission of D's share carries with it
total extinguishment of his obligation to the
benefit of the solidary debtors. (B) Yes. The
Civil Code recognizes remission as a mode of
extinguishing an obligation. This clearly
applies to D. (C) No. The rule is that gratuitous
acts should be restrictively construed, allowing
only the least transmission of rights. (D) No,
as the release of the share of one debtor
would then increase the burden of the
other debtors without their consent.
SUGGESTED ANSWER: (D). No, as the
release of the share of one debtor would
then increase the burden of the other
debtors without their consent. When one of
the solidary debtors cannot, because of his
insolvency, reimburse his share to the
debtor paying the obligation, such share
shall be borne by all his co-debtors, in
proportion to the debt of each (Art 1217,
Civil Code). Additionally, D was released
only from his share of P10,000.00 not from
the solidary tie that binds him to A, B and
C.
Art. 1218. Payment by a solidary debtor shall not
entitle him to reimbursement from his co-debtors if
such payment is made after the obligation has
prescribed or become illegal. (n)
Art. 1219. The remission made by the creditor of
the share which affects one of the solidary debtors
does not release the latter from his responsibility
towards the co-debtors, in case the debt had been
totally paid by anyone of them before the remission
was effected. (1146a)
Liability; Solidary Liability (1998)
Joey, Jovy and Jojo are solidary debtors under a loan
obligation of P300,000.00 which has fallen due. The
creditor has, however, condoned Jojo's entire share in the
debt. Since Jovy has become insolvent, the creditor
makes a demand on Joey to pay the debt.
1) How much, if any, may Joey be compelled to
pay?
promissory note as a result of the foreclosure of the
chattel
[2%] 2) To what extent, if at all, can Jojo be compelled by
Joey to contribute to such payment? [3%]
SUGGESTED ANSWER:
1. Joey can be compelled to pay only the remaining
balance of P200.000, in view of the remission of Jojo's
share by the creditor. (Art. 1219, Civil Code)
2. Jojo can be compelled by Joey to contribute P50.000
Art. 1217. par. 3, Civil Code provides. "When one of the
solidary debtors cannot, because of his insolvency,
reimburse his share to the debtor paying the obligation,
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such share shall be borne by all his co-debtors, in
proportion to the debt of each."
Since the insolvent debtor's share which Joey paid was
P100,000, and there are only two remaining debtors -
namely Joey and Jojo - these two shall share equally the
burden of reimbursement. Jojo may thus be compelled by
Joey to contribute P50.000.00.
Art. 1220. The remission of the whole obligation,
obtained by one of the solidary debtors, does not
entitle him to reimbursement from his co-debtors.
(n)
Art. 1221. If the thing has been lost or if the
prestation has become impossible without the fault
of the solidary debtors, the obligation shall be
extinguished.
If there was fault on the part of any one of them, all
shall be responsible to the creditor, for the price and
the payment of damages and interest, without
prejudice to their action against the guilty or
negligent debtor.
If through a fortuitous event, the thing is lost or the
performance has become impossible after one of
the solidary debtors has incurred in delay through
the judicial or extrajudicial demand upon him by the
creditor, the provisions of the preceding paragraph
shall apply. (1147a)
Art. 1222. A solidary debtor may, in actions filed by
the creditor, avail himself of all defenses which are
derived from the nature of the obligation and of
those which are personal to him, or pertain to his
own share. With respect to those which personally
belong to the others, he may avail himself thereof
only as regards that part of the debt for which the
latter are responsible. (1148a)
Liability; Solidary Obligation; Mutual Guaranty (2003)
A,B,C,D, and E made themselves solidarity indebted to X
for the amount of P50,000.00. When X demanded
payment from A, the latter refused to pay on the following
grounds. a) B is only 16 years old. b) C has already been
condoned by X c) D is insolvent. d) E was given by X an
extension of 6 months without
the consent of the other four co-debtors. State the effect
of each of the above defenses put up by A on his
obligation to pay X, if such defenses are found to be true.
SUGGESTED ANSWERS:
(a) A may avail the minority of B as a defense, but only
for B’s share of P 10,000.00. A solidary debtor may avail
himself of any defense which personally belongs to a
solidary co-debtor, but only as to the share of that
co¬debtor.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(b) A may avail of the condonation by X of C’s share of P
10, 000.00. A solidary debtor may, in actions filed by the
creditor, avail himself of all defenses which are derived
from the nature of the obligation and of those which are
personal to him or pertain to his own share. With respect
to those which personally belong to others, he may avail
himself thereof only as regards that part of the debt for
which the latter are responsible. (Article 1222, NCC).
(c) A may not interpose the defense of insolvency of D as
a defense. Applying the principle of mutual guaranty
among solidary debtors, A guaranteed the payment of D’s
share and of all the other co-debtors. Hence, A cannot
avail of the defense of D’s insolvency.
(d) The extension of six (6) months given by X to E may
be availed of by A as a partial defense but only for the
share of E, there is no novation of the obligation but only
an act of liberality granted to E alone.
SECTION 5. - Divisible and Indivisible
Obligations
Art. 1223. The divisibility or indivisibility of the things
that are the object of obligations in which there is
only one debtor and only one creditor does not alter
or modify the provisions of Chapter 2 of this Title.
(1149)
Art. 1224. A joint indivisible obligation gives rise to
indemnity for damages from the time anyone of the
debtors does not comply with his undertaking. The
debtors who may have been ready to fulfill their
promises shall not contribute to the indemnity
beyond the corresponding portion of the price of the
thing or of the value of the service in which the
obligation consists. (1150)
Art. 1225. For the purposes of the preceding
articles, obligations to give definite things and those
which are not susceptible of partial performance
shall be deemed to be indivisible.
When the obligation has for its object the execution
of a certain number of days of work, the
accomplishment of work by metrical units, or
analogous things which by their nature are
susceptible of partial performance, it shall be
divisible.
However, even though the object or service may be
physically divisible, an obligation is indivisible if so
provided by law or intended by the parties.
In obligations not to do, divisibility or indivisibility
shall be determined by the character of the
prestation in each particular case. (1151a)
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SECTION 6. - Obligations with a Penal Clause
Art. 1226. In obligations with a penal clause, the
penalty shall substitute the indemnity for damages
and the payment of interests in case of
noncompliance, if there is no stipulation to the
contrary. Nevertheless, damages shall be paid if the
obligor refuses to pay the penalty or is guilty of
fraud in the fulfillment of the obligation.
The penalty may be enforced only when it is
demandable in accordance with the provisions of
this Code. (1152a)
PENALTY CLAUSE
An accessory undertaking attached to the
principal obligation for the purpose of insuring its
performance by virtue of which the obligor is
bound to pay a stipulated indemnity or perform a
stipulated prestation in case of breach.
FUNCTIONS OF PENALTY CLAUSE:
1. Coercive function;
2. To liquidate;
3. Strictly penal.
Art. 1227. The debtor cannot exempt himself from
the performance of the obligation by paying the
penalty, save in the case where this right has been
expressly reserved for him. Neither can the creditor
demand the fulfillment of the obligation and the
satisfaction of the penalty at the same time, unless
this right has been clearly granted him. However, if
after the creditor has decided to require the
fulfillment of the obligation, the performance thereof
should become impossible without his fault, the
penalty may be enforced. (1153a)
Art. 1228. Proof of actual damages suffered by the
creditor is not necessary in order that the penalty
may be demanded. (n)
Art. 1229. The judge shall equitably reduce the
penalty when the principal obligation has been
partly or irregularly complied with by the debtor.
Even if there has been no performance, the penalty
may also be reduced by the courts if it is iniquitous
or unconscionable. (1154a)
Art. 1230. The nullity of the penal clause does not
carry with it that of the principal obligation.
The nullity of the principal obligation carries with it
that of the penal clause. (1155)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
CHAPTER 4
EXTINGUISHMENT OF OBLIGATIONS
GENERAL PROVISIONS
Art. 1231. Obligations are extinguished:
(1) By payment or performance:
(2) By the loss of the thing due:
(3) By the condonation or remission of the
debt;
(4) By the confusion or merger of the
rights of creditor and debtor;
(5) By compensation;
(6) By novation.
Other causes of extinguishment of obligations,
such as annulment, rescission, fulfillment of a
resolutory condition, and prescription, are governed
elsewhere in this Code. (1156a)
SECTION 1. - Payment or Performance
PAYMENT
Requisites: (clue words only)
1. Right amount;
2. Proper parties;
a. Creditor
b. Debtor
c. Their heirs, assigns, or agent/s
d. 3rd persons, in certain cases.
3. Proper time;
4. Proper place.
Extinguishment; Cause of Action (2004)
TX filed a suit for ejectment against BD for non-payment
of condominium rentals amounting to P150,000. During
the pendency of the case, BD offered and TX accepted
the full amount due as rentals from BD, who then filed a
motion to dismiss the ejectment suit on the ground that
the action is already extinguished. Is BD’s contention
correct? Why or why not? Reason. (5%)
SUGGESTED ANSWER:
BD's contention is not correct. TX can still maintain the
suit for ejectment. The acceptance by the lessor of the
payment by the lessee of the rentals in arrears even
during the pendency of the ejectment case does not
constitute a waiver or abandonment of the ejectment
case. (Spouses Clutario v. CA, 216 SCRA 341 [1992]).
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Extinguishment; Payment (1995)
In 1983 PHILCREDIT extended loans to Rivett-Strom
Machineries, Inc. (RIVETTT-STROM), consisting of
US$10 Million for the cost of machineries imported and
directly paid by PHTLCREDIT, and 5 Million in cash
payable in installments over a period of ten (10) years on
the basis of the value thereof computed at the rate of
exchange of the U.S. dollar vis-à-vis the Philippine peso
at the time of payment.
RIVETT-STROM made payments on both loans which if
based on the rate of exchange in 1983 would have fully
settled the loans.
PHILCREDIT contends that the payments on both loans
should be based on the rate of exchange existing at the
time of payment, which rate of exchange has been
consistently increasing, and for which reason there would
still be a considerable balance on each loan. Is the
contention of PHILCREDIT correct? Discuss fully.
SUGGESTED ANSWER:
As regards the loan consisting of dollars, the contention
of PHILCREDIT is correct. It has to be paid in Philippine
currency computed on the basis of the exchange rate at
the TIME OF PAYMENT of each installment, as held in
Kalalo v. Luz, 34 SCRA 337. As regards the P5 Million
loan in Philippine pesos, PHILCREDIT is wrong. The
payment thereof cannot be measured by the peso-dollar
exchange rate. That will be violative of the Uniform
Currency Act (RA, 529] which prohibits the payment of an
obligation which, although to be paid in Philippine
currency, is measured by a foreign currency. (Palanca v.
CA, 238 SCRA 593).
Extinguishment; Compensation/Set-Off; Banks (1998)
X, who has a savings deposit with Y Bank in the sum of
P1,000,000.00 incurs a loan obligation with the said Bank
in the sum of P800.000.00 which has become due. When
X tries to withdraw his deposit, Y Bank allows only
P200.000.00 to be withdrawn, less service charges,
claiming that compensation has extinguished its
obligation under the savings account to the concurrent
amount of X's debt. X contends that compensation is
improper when one of the debts, as here, arises from a
contract of deposit. Assuming that the promissory note
signed by X to evidence the loan does not provide for
compensation between said loan and his savings deposit,
who is correct? [3%]
SUGGESTED ANSWER:
Y bank is correct. An. 1287, Civil Code, does not apply.
All the requisites of Art. 1279, Civil Code are present. In
the case of Gullas vs. PNB [62 Phil. 519), the Supreme
Court held: "The Civil Code contains provisions regarding
compensation (set off) and deposit. These portions of
Philippine law provide that compensation shall take place
when two persons are reciprocally creditor and debtor of
each other. In this connection, it has been held that the
relation existing between a depositor and a bank is that of
creditor and debtor, x x x As a general rule, a bank has a
right of set off of the deposits in its hands for the payment
of any indebtedness to it on the part of a depositor."
Hence, compensation took place between the mutual
obligations of X and Y bank.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Extinguishment; Extraordinary Inflation or Deflation
(2001)
On July 1, 1998, Brian leased an office space in a
building for a period of five years at a rental rate of
P1,000.00 a month. The contract of lease contained the
proviso that "in case of inflation or devaluation of the
Philippine peso, the monthly rental will automatically be
increased or decreased depending on the devaluation or
inflation of the peso to the dollar." Starting March 1, 2001,
the lessor increased the rental to P2,000 a month, on the
ground of inflation proven by the fact that the exchange
rate of the Philippine peso to the dollar had increased
from P25.00=$1.00 to P50.00=$1.00. Brian refused to
pay the increased rate and an action for unlawful detainer
was filed against him. Will the action prosper? Why? (5%)
SUGGESTED ANSWER:
The unlawful detainer action will not prosper.
Extraordinary inflation or deflation is defined as the sharp
decrease in the purchasing power of the peso. It does not
necessarily refer to the exchange rate of the peso to the
dollar. Whether or not there exists an extraordinary
inflation or deflation is for the courts to decide. There
being no showing that the purchasing power of the peso
had been reduced tremendously, there could be no
inflation that would justify the increase in the amount of
rental to be paid. Hence, Brian could refuse to pay the
increased rate.
ALTERNATIVE ANSWER:
deflation requires an official declaration by the Bangko
Sentral ng Pilipinas.
ALTERNATIVE ANSWER:
The unlawful detainer action will prosper. It is a given fact
in the problem, that there was inflation, which caused the
exchange rate to double. Since the contract itself
authorizes the increase in rental in the event of an
inflation or devaluation of the Philippine peso, the
doubling of the monthly rent is reasonable and is
therefore a valid act under the very terms of the contract.
Brian's refusal to pay is thus a ground for ejectment
Art. 1232. Payment means not only the delivery of
money but also the performance, in any other
manner, of an obligation. (n)
Extinguishment; Compensation vs. Payment (1998)
Define compensation as a mode of extinguishing an
obligation, and distinguish it from payment. [2%]
SUGGESTED ANSWER:
COMPENSATION is a mode of extinguishing to the
concurrent amount, the obligations of those persons who
in their own right are reciprocally debtors and creditors of
each other (Tolentino, 1991 ed., p. 365, citing 2 Castan
560 and Francia vs. IAC. 162 SCRA 753). It involves the
simultaneous balancing of two obligations in order to
extinguish them to the extent in which the amount of one
is covered by that of the other. (De Leon, 1992 ed., p.
221, citing 8 Manresa 401).
PAYMENT means not only delivery of money but also
performance of an obligation (Article 1232, Civil Code). In
payment, capacity to dispose of the thing paid and
capacity to receive payment are required for debtor and
creditor, respectively: in compensation, such capacity is
not necessary, because the compensation operates by
law and not by the act of the parties. In payment, the
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performance must be complete; while in compensation
there may be partial extinguishment of an obligation
(Tolentino, supra)
Art. 1233. A debt shall not be understood to have
been paid unless the thing or service in which the
obligation consists has been completely delivered
or rendered, as the case may be. (1157)
Art. 1234. If the obligation has been substantially
performed in good faith, the obligor may recover as
though there had been a strict and complete
fulfillment, less damages suffered by the obligee.
(n)
Art. 1235. When the obligee accepts the
performance, knowing its incompleteness or
irregularity, and without expressing any protest or
objection, the obligation is deemed fully complied
with. (n)
Art. 1236. The creditor is not bound to accept
payment or performance by a third person who has
no interest in the fulfillment of the obligation, unless
there is a stipulation to the contrary.
Whoever pays for another may demand from the
debtor what he has paid, except that if he paid
without the knowledge or against the will of the
debtor, he can recover only insofar as the payment
has been beneficial to the debtor. (1158a)
Art. 1237. Whoever pays on behalf of the debtor
without the knowledge or against the will of the
latter, cannot compel the creditor to subrogate him
in his rights, such as those arising from a mortgage,
guaranty, or penalty. (1159a)
2011 Bar Exam Question
(49) Asiong borrowed P1 million from a bank,
secured by a mortgage on his land. Without
his consent, his friend Boyong paid the whole
loan. Since Asiong benefited from the
payment, can Boyong compel the bank to
subrogate him in its right as mortgagee of
Asiong's land? (A) No, but the bank can
foreclose and pay Boyong back. (B) No, since
Boyong paid for Asiong’s loan without his
approval. (C) Yes, since a change of creditor
took place by novation with the bank’s
consent. (D) Yes, since it is but right that
Boyong be able to get back his money and, if
not, to foreclose the mortgage in the manner of
the bank.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 1238. Payment made by a third person who
does not intend to be reimbursed by the debtor is
deemed to be a donation, which requires the
debtor's consent. But the payment is in any case
valid as to the creditor who has accepted it. (n)
Art. 1239. In obligations to give, payment made by
one who does not have the free disposal of the
thing due and capacity to alienate it shall not be
valid, without prejudice to the provisions of Article
1427 under the Title on "Natural Obligations."
(1160a)
Art. 1240. Payment shall be made to the person in
whose favor the obligation has been constituted, or
his successor in interest, or any person authorized
to receive it. (1162a)
“Authorized to receive” means:
Also means that the authority may be derived from
the law itself.
Art. 1241. Payment to a person who is
incapacitated to administer his property shall be
valid if he has kept the thing delivered, or insofar as
the payment has been beneficial to him.
Payment made to a third person shall also be valid
insofar as it has redounded to the benefit of the
creditor. Such benefit to the creditor need not be
proved in the following cases:
(1) If after the payment, the third person
acquires the creditor's rights;
(2) If the creditor ratifies the payment to the
third person;
(3) If by the creditor's conduct, the debtor
has been led to believe that the third
person had authority to receive the
payment. (1163a)
Art. 1242. Payment made in good faith to any
person in possession of the credit shall release the
debtor. (1164)
Art. 1243. Payment made to the creditor by the
debtor after the latter has been judicially ordered to
retain the debt shall not be valid. (1165)
Art. 1244. The debtor of a thing cannot compel the
creditor to receive a different one, although the
latter may be of the same value as, or more
valuable than that which is due.
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In obligations to do or not to do, an act or
forbearance cannot be substituted by another act or
forbearance against the obligee's will. (1166a)
Art. 1245. Dation in payment, whereby property is
alienated to the creditor in satisfaction of a debt in
money, shall be governed by the law of sales. (n)
DACION EN PAGO
Is a mode of extinguishing an obligation whereby
the debtor alienates in favor of the creditor property
for the satisfaction of monetary debt; extinguish up
to amount of property, unless there is a stipulation
that the dacion would be a complete payment of the
obligation.
Ownership; Co-Ownership (2009) No. XI.
TRUE or FALSE. Answer TRUE if the
statement is true, or FALSE if the statement is
false. Explain your answer in not more than
two (2) sentences. (D). The renunciation by a
co-owner of his undivided share in the co-
owned property in lieu of the performance of
his obligation to contribute to taxes and
expenses for the preservation of the property
constitutes dacion en pago. (1%) SUGGESTED
ANSWER:
True, Under the Civil Code, a coowner may
renounce his share in the coowned property
in lieu of paying for his share in the taxes
and expenses for the preservation of the
coowned property. In effect, there is dacion
en pago because the co-owner is
discharging his monetary obligation by
paying it with his non-monetary interest in
the co-owned property. The fact that he is
giving up his entire interest simply means
that he is accepting the value of his
interest as equivalent to his share in the
taxes and expenses of preservation.
Art. 1246. When the obligation consists in the
delivery of an indeterminate or generic thing, whose
quality and circumstances have not been stated,
the creditor cannot demand a thing of superior
quality. Neither can the debtor deliver a thing of
inferior quality. The purpose of the obligation and
other circumstances shall be taken into
consideration. (1167a)
Art. 1247. Unless it is otherwise stipulated, the
extrajudicial expenses required by the payment
shall be for the account of the debtor. With regard
to judicial costs, the Rules of Court shall govern.
(1168a)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 1248. Unless there is an express stipulation to
that effect, the creditor cannot be compelled
partially to receive the prestations in which the
obligation consists. Neither may the debtor be
required to make partial payments.
However, when the debt is in part liquidated and in
part unliquidated, the creditor may demand and the
debtor may effect the payment of the former without
waiting for the liquidation of the latter. (1169a)
Art. 1249. The payment of debts in money shall be
made in the currency stipulated, and if it is not
possible to deliver such currency, then in the
currency which is legal tender in the Philippines.
The delivery of promissory notes payable to order,
or bills of exchange or other mercantile documents
shall produce the effect of payment only when they
have been cashed, or when through the fault of the
creditor they have been impaired.
In the meantime, the action derived from the
original obligation shall be held in the abeyance.
(1170)
GR: Impairment clause does not apply to checks
issued by the debtor himself.
Exception: when there is unreasonable delay and
in the meantime, the bank is closed (bank-run).
2012 Bar Exam Question
61. Dina bought a car from Jai and delivered a
check in payment of the same. Has Dina paid
the obligation? Why? a) No, not yet. The
delivery of promissory notes payable to
order, or bills of exchange or other
mercantile documents shall produce the
effect of payment only when they have
been cashed, or when through the fault of
the creditor they have been impaired. b)
Yes, because a check is a valid legal tender of
payment. c) It depends. If the check is a
manager’s check or cashier’s check it will
produce the effect of payment. If it’s an
ordinary check, no payment. d) Yes, because a
check is as good as cash.
Extinguishment; Payment of Check (2013)
No.VI. Lito obtained a loan of P1,000,000 from
Ferdie, payable within one year. To secure
payment, Lito executed a chattel mortgage on
a Toyota Avanza and a real estate mortgage on
a 200-square meter piece of property. (B) Lito's
failure to pay led to the extra-judicial
foreclosure of the mortgaged real property.
Within a year from foreclosure, Lito tendered a
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manager's check to Ferdie to redeem the
property. Ferdie refused to accept payment on
the ground that he wanted payment in cash:
the check does not qualify as legal tender and
does not include the interest payment. Is
Ferdie's refusal justified? (4%) SUGGESTED
ANSWER:
A check, whether a manager’s check or an
ordinary check is not legal tender, and an
offer of a check in payment of a debt is not
a valid tender of payment and may be
refused receipt by the oblige or creditors
(Philippine Airlines v. CA and Amelia Tan,
G.R. No. L-49188, 1990). Mere delivery of
checks does not discharge the obligation
under a judgment. A check shall produce
the effect of payment only when they have
been cashed or where through the fault of
the creditor they have been impaired (Art
1249, Civil Code). However, it is not
necessary that the right of redemption be
exercised by delivery of legal tender. A
check may be used for the exercise of right
of redemption, the same being a right and
not an obligation. The tender of a check is
sufficient to compel redemption but is not
in itself a payment that relieves the
redemptioner from his liability to pay the
redemption price (Biana v. Gimenez, G.R.
No. 132768, Sept 9, 2005, citing Fortunado
v. CA). Redemption within the period
allowed by law is not a matter of intent but
a question of payment or valid tender of
full redemption prices within the said
period. Whether redemption is being made
under Art. 3135 or under the General
Banking Law, the mortgagor or his assignee
is required to tender payment to make said
redemption valid (Heirs of Quisumbing v.
PNB and SLDC, G.R. No. 178242, Jan 20,
2009). Moreover, Ferdie’s refusal was
justified on the ground that the amount
tendered does not include interest. In order
to effect the redemption of the foreclosed
property, the payment to the purchaser
must include the following sums: (a) the bid
price; (b) the interest on the bid price,
computed at one per centum (1%) per
month; and (c) the assessments and taxes,
if any, paid by the purchaser with the same
rate of interest (Sec 28, 1997 Rules of Civil
Procedure). Unless there is an express
stipulation to that effect, the creditor
cannot be compelled to receive partial
payment of the prestation (Art. 1248, Civil
Code)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Extinguishment; Payment of Check; Legal
Tender (2008)
No. XVII. Felipe borrowed $100 from Gustavo
in 1998, when the Phil P - US$ exchange rate
was P56 - US$1. On March 1, 2008, Felipe
tendered to Gustavo a cashier's check in the
amount of P4,135 in payment of his US$ 100
debt, based on the Phil P - US$ exchange rate
at that time. Gustavo accepted the check, but
forgot to deposit it until Sept. 12, 2008. His
bank refused to accepted the check because it
had become stale. Gustavo now wants Felipe
to pay him in cash the amount of P5,600.
Claiming that the previous payment was not in
legal tender, and that there has been
extraordinary deflation since 1998, and
therefore, Felipe should pay him the value of
the debt at the time it was incurred. Felipe
refused to pay him again, claiming that
Gustavo is estopped from raising the issue of
legal tender, having accepted the check in
March, and that it was Gustavo's negligence in
not depositing the check immediately that
caused the check to become stale.
(A). Can Gustavo now raised the issue that the
cashier's check is not legal tender? (2%)
SUGGESTED ANSWER: No. Gustavo
previously accepted a check as payment. It
was his fault why the check became stale.
He is now estopped from raising the issue
that a cashier's check is not legal tender.
(B). Can Felipe validly refuse to pay Gustavo
again? (2%) SUGGESTED ANSWER:
Yes, Felipe can refuse to pay Gustavo, who
allowed the check to become stale.
Although a check is not legal tender
(Belisario v. Natividad. 60 Phil 156), there
are instances when a check produces the
effects of payment, for example: (a) when
the creditor is in estoppel or he had
previously promised he would accept a
check (Paras, Civil Code Annotated, Vol IV,
2000 ed., p. 394); (b) when the check has
lost its value because of the fault of the
creditor (Art. 1249, 2nd par.),as when he
was unreasonably delayed in presenting the
check for payment (PNB v. Seeto, G.R. No,
L-4388, 13 August 1952).
(C). Can Felipe compel Gustavo to receive
US$100 instead? (1%) SUGGESTED ANSWER:
Felipe cannot compel Gustavo to receive
US$100 because under RA 529, payment of
loans should be at Philippine currency at
the rate of exchange prevailing at the time
of the stipulated date of payment. Felipe
could only compel Gustavo to receive US$
100 if they stipulated that obligation be
paid in foreign currency (R.A. 4100).
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Art. 1250. In case an extraordinary inflation or
deflation of the currency stipulated should
supervene, the value of the currency at the time of
the establishment of the obligation shall be the
basis of payment, unless there is an agreement to
the contrary. (n)
NOTE: Applies only to contractual obligations.
There must be declaration by the government of
such fact of inflation or deflation.
Extinguishment; Extraordinary Inflation or Deflation
(2001)
On July 1, 1998, Brian leased an office space in a
building for a period of five years at a rental rate of
P1,000.00 a month. The contract of lease contained the
proviso that "in case of inflation or devaluation of the
Philippine peso, the monthly rental will automatically be
increased or decreased depending on the devaluation or
inflation of the peso to the dollar." Starting March 1, 2001,
the lessor increased the rental to P2,000 a month, on the
ground of inflation proven by the fact that the exchange
rate of the Philippine peso to the dollar had increased
from P25.00=$1.00 to P50.00=$1.00. Brian refused to
pay the increased rate and an action for unlawful detainer
was filed against him. Will the action prosper? Why? (5%)
SUGGESTED ANSWER:
The unlawful detainer action will not prosper.
Extraordinary inflation or deflation is defined as the sharp
decrease in the purchasing power of the peso. It does not
necessarily refer to the exchange rate of the peso to the
dollar. Whether or not there exists an extraordinary
inflation or deflation is for the courts to decide. There
being no showing that the purchasing power of the peso
had been reduced tremendously, there could be no
inflation that would justify the increase in the amount of
rental to be paid. Hence, Brian could refuse to pay the
increased rate.
ALTERNATIVE ANSWER:
deflation requires an official declaration by the Bangko
Sentral ng Pilipinas.
ALTERNATIVE ANSWER:
The unlawful detainer action will prosper. It is a given fact
in the problem, that there was inflation, which caused the
exchange rate to double. Since the contract itself
authorizes the increase in rental in the event of an
inflation or devaluation of the Philippine peso, the
doubling of the monthly rent is reasonable and is
therefore a valid act under the very terms of the contract.
Brian's refusal to pay is thus a ground for ejectment
Art. 1251. Payment shall be made in the place
designated in the obligation.
There being no express stipulation and if the
undertaking is to deliver a determinate thing, the
payment shall be made wherever the thing might be
at the moment the obligation was constituted.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
In any other case the place of payment shall be the
domicile of the debtor.
If the debtor changes his domicile in bad faith or
after he has incurred in delay, the additional
expenses shall be borne by him.
These provisions are without prejudice to venue
under the Rules of Court. (1171a)
SUBSECTION 1. - Application of Payments
Art. 1252. He who has various debts of the same
kind in favor of one and the same creditor, may
declare at the time of making the payment, to which
of them the same must be applied. Unless the
parties so stipulate, or when the application of
payment is made by the party for whose benefit the
term has been constituted, application shall not be
made as to debts which are not yet due.
If the debtor accepts from the creditor a receipt in
which an application of the payment is made, the
former cannot complain of the same, unless there is
a cause for invalidating the contract. (1172a)
Note: Connect to 1192, NCC.
Art. 1253. If the debt produces interest, payment of
the principal shall not be deemed to have been
made until the interests have been covered. (1173)
Art. 1254. When the payment cannot be applied in
accordance with the preceding rules, or if
application can not be inferred from other
circumstances, the debt which is most onerous to
the debtor, among those due, shall be deemed to
have been satisfied.
If the debts due are of the same nature and burden,
the payment shall be applied to all of them
proportionately. (1174a)
SUBSECTION 2. - Payment by Cession
Art. 1255. The debtor may cede or assign his
property to his creditors in payment of his debts.
This cession, unless there is stipulation to the
contrary, shall only release the debtor from
responsibility for the net proceeds of the thing
assigned. The agreements which, on the effect of
the cession, are made between the debtor and his
creditors shall be governed by special laws. (1175a)
ASSIGNMENT
Is the process by which the debtor transfers all the
properties not exempt from execution in favor of the
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creditors so that the latter may sell them and thus,
apply the proceeds to their credits. Debts are
extinguished up to the amount of net proceeds,
unless there is a contrary stipulation.
KINDS:
a. Legal – governed by the Insolvency Law;
b. Voluntary – by agreement of the creditors.
Requisites of voluntary assignment:
1. More than one debt;
2. More than one creditor;
3. Complete or partial insolvency of debtor;
4. Abandonment of all debtor’s property not
exempt from execution;
5. Acceptance or consent on the part of the
creditors.
EFFECTS OF ASSIGNMENT:
has been made refuses without just cause to accept
it, the debtor shall be released from responsibility
by the consignation of the thing or sum due.
Consignation alone shall produce the same effect in
the following cases:
(1) When the creditor is absent or unknown,
or does not appear at the place of payment;
(2) When he is incapacitated to receive the
payment at the time it is due;
(3) When, without just cause, he refuses to
give a receipt;
(4) When two or more persons claim the
same right to collect;

1. Creditors do not become the owner; they (5) When the title of the obligation has been
are merely assignees with authority to sell; lost. (1176a)
2. Debtor is release up to the amount of the
net proceeds, unless there is a stipulation
TENDER
to the contrary;
The act of offering the creditor what is due him,
3. Creditors will collect credits in the order of
together with a demand that the creditor accept the
preference agreed upon, or in default of the
same.
agreement, in the order ordinarily
established by law (concurrence and
When the creditor refuses without just
preference of credits).
cause to accept payment, he becomes in
mora accepiendi and debtor is released
from responsibility if he consigns the thing
or sum due.
DATION IN PAYMENT CESSION IN
2011 Bar Exam
PAYMENT
(81) Anne owed Bessy P1 million due on
One creditor Plurality of creditors
October 1, 2011 but failed to pay her on due
Not necessarily in state Debtor must be partially
date. Bessy sent a demand letter to Anne
of financial difficulty or relatively insolvent
giving her 5 days from receipt within which to
Thing delivered is Universality of property
pay. Two days after receipt of the letter, Anne
considered as of debtor is what is
personally offered to pay Bessy in manager's
equivalent of ceded
check but the latter refused to accept the
performance
same. The 5 days lapsed. May Anne’s
Payment extinguishes Merely releases debtor
obligation be considered extinguished? (A) Yes,
obligation to the extent for the net proceeds of
since Bessy’s refusal of the manager’s check,
of the value of the thing things ceded of,
which is presumed funded, amounts to a
delivered as agreed assigned, unless there
satisfaction of the obligation. (B) No, since
upon, proved or implied is a contrary stipulation
tender of payment even in cash, if refused,
from the conduct of the
creditor will not discharge the obligation without
Ownership is No transfer of proper consignation in court. (C) Yes, since
transferred ownership but only a Anne tendered payment of the full amount
right to sell due. (D) No, since a manager’s check is not
considered legal tender in the Philippines.

SUBSECTION 3. - Tender of Payment and CONSIGNATION

Consignation Is the act of depositing the thing due with the court
or judicial authorities whenever the creditor cannot
Art. 1256. If the creditor to whom tender of payment accept or refuses to accept payment.

JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 279

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Requisites:
1. Existence of valid debt;
2. Consignation was made because of some
legal cause – previous valid tender was
made but unjustly refused or there are
circumstances making previous tender
exempt;
3. Prior notice of consignation had been given
to the person interested in the performance
of obligation (1st notice);
4. Actual deposit/consignation with proper
judicial authorities;
5. Subsequent notice of consignation (2 nd
notice).
EFFECTS:
1. Extinguishment of the obligation;
2. Debtor may ask the judge to order
cancellation of obligation;
3. Running of interest is suspended;
4. Before creditor accepts or before judge
declares consignation has been properly
made, obligation remains (debtor bears the
risk of loss at the meantime. after
acceptance by the creditor or after judge
declares the consignation has been
properly made, risk of loss is shifted to the
creditor.
Art. 1257. In order that the consignation of the thing
due may release the obligor, it must first be
announced to the persons interested in the
fulfillment of the obligation.
The consignation shall be ineffectual if it is not
made strictly in consonance with the provisions
which regulate payment. (1177)
2011 Bar Exam Question
(57) Allan bought Billy’s property through
Carlos, an agent empowered with a special
power of attorney (SPA) to sell the same.
When Allan was ready to pay as scheduled,
Billy called, directing Allan to pay directly to
him. On learning of this, Carlos, Billy's agent,
told Allan to pay through him as his SPA
provided and to protect his commission. Faced
with two claimants, Allan consigned the
payment in court. Billy protested, contending
that the consignation is ineffective since no
tender of payment was made to him. Is he
correct? (A) No, since consignation without
tender of payment is allowed in the face of
the conflicting claims on the plaintiff. (B)
Yes, as owner of the property sold, Billy can
demand payment directly to himself. (C) Yes,
since Allan made no announcement of the
tender. (D) Yes, a tender of payment is
required for a valid consignation.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 1258. Consignation shall be made by
depositing the things due at the disposal of judicial
authority, before whom the tender of payment shall
be proved, in a proper case, and the announcement
of the consignation in other cases.
The consignation having been made, the interested
parties shall also be notified thereof. (1178)
Art. 1259. The expenses of consignation, when
properly made, shall be charged against the
creditor. (1178)
Art. 1260. Once the consignation has been duly
made, the debtor may ask the judge to order the
cancellation of the obligation.
Before the creditor has accepted the consignation,
or before a judicial declaration that the consignation
has been properly made, the debtor may withdraw
the thing or the sum deposited, allowing the
obligation to remain in force. (1180)
Art. 1261. If, the consignation having been made,
the creditor should authorize the debtor to withdraw
the same, he shall lose every preference which he
may have over the thing. The co-debtors,
guarantors and sureties shall be released. (1181a)
NOTE: Prayer in the pleading that the thing be
adjudged in favor of the creditor amounts to
acceptance.
SECTION 2. - Loss of the Thing Due
WHEN IS THERE A LOSS:
1. When the object perishes (physically)
2. When it goes out of commerce
3. When it disappears in such a way that it
existence is unknown or it cannot be
recovered.
WHEN IS THERE IMPOSSIBILITY OF
PERFORMANCE
1. Physical impossibility;
2. Legal impossibility –
a. Direct – caused as when prohibited
by law;
b. Indirect – caused as when the
debtor is required to enter a military
service.
Art. 1262. An obligation which consists in the
delivery of a determinate thing shall be extinguished
if it should be lost or destroyed without the fault of
the debtor, and before he has incurred in delay.
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When by law or stipulation, the obligor is liable even
for fortuitous events, the loss of the thing does not
extinguish the obligation, and he shall be
responsible for damages. The same rule applies
when the nature of the obligation requires the
assumption of risk. (1182a)
Extinguishment; Loss (1994)
Dino sued Ben for damages because the latter had failed
to deliver the antique Marcedes Benz car Dino had
purchased from Ben, which was—by agreement—due for
delivery on December 31, 1993. Ben, in his answer to
Dino's complaint, said Dino's claim has no basis for the
suit, because as the car was being driven to be delivered
to Dino on January 1, 1994, a reckless truck driver had
rammed into the Mercedes Benz. The trial court
dismissed Dino's complaint, saying Ben's obligation had
indeed, been extinguished by force majeure. Is the trial
court correct?
SUGGESTED ANSWER:
a) No. Article 1262, New Civil Code provides, "An
obligation which consists in the delivery of a determinate
thing shall be extinguished if it should be lost or
destroyed without the fault of the debtor, and before he
has incurred in delay. b) The judgment of the trial court is
incorrect. Loss of the thing due by fortuitous events or
force majeure is a valid defense for a debtor only when
the debtor has not incurred delay. Extinguishment of
liability for fortuitous event requires that the debtor has
not yet incurred any delay. In the present case, the debtor
was in delay when the car was destroyed on January 1,
1993 since it was due for delivery on December 31, 1993.
(Art. 1262 Civil Code)
c) It depends whether or not Ben the seller, was already
in default at the time of the accident because a demand
for him to deliver on due date was not complied with by
him. That fact not having been given in the problem, the
trial court erred in dismissing Dino's complaint. Reason:
There is default making him responsible for fortuitous
events including the assumption of risk or loss.
If on the other hand Ben was not in default as no demand
has been sent to him prior to the accident, then we must
distinguish whether the price has been paid or not. If it
has been paid, the suit for damages should prosper but
only to enable the buyer to recover the price paid. It
should be noted that Ben, the seller, must bear the loss
on the principle of res perit domino. He cannot be held
answerable for damages as the loss of the car was not
imputable to his fault or fraud. In any case, he can
recover the value of the car from the party whose
negligence caused the accident. If no price has been paid
at all, the trial court acted correctly in dismissing the
complaint.
Loss of the thing due; Force Majeure (2000)
Kristina brought her diamond ring to a jewelry shop for
cleaning. The jewelry shop undertook to return the ring by
February 1, 1999." When the said date arrived, the
jewelry shop informed Kristina that the Job was not yet
finished. They asked her to return five days later. On
February 6, 1999, Kristina went to the shop to claim the
ring, but she was informed that the same was stolen by a
thief who entered the shop the night before. Kristina filed
an action for damages against the jewelry shop which put
up the Bernie 50% of the total payments made. (Rillo v.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Court of defense of force majeure. Will the action prosper
or not? (5%)
SUGGESTED ANSWER:
The action will prosper. Since the defendant was already
in default not having delivered the ring when delivery was
demanded by plaintiff at due date, the defendant is liable
for the loss of the thing and even when the loss was due
to force majeure.
Art. 1263. In an obligation to deliver a generic thing,
the loss or destruction of anything of the same kind
does not extinguish the obligation. (n)
Art. 1264. The courts shall determine whether,
under the circumstances, the partial loss of the
object of the obligation is so important as to
extinguish the obligation. (n)
Art. 1265. Whenever the thing is lost in the
possession of the debtor, it shall be presumed that
the loss was due to his fault, unless there is proof to
the contrary, and without prejudice to the provisions
of article 1165. This presumption does not apply in
case of earthquake, flood, storm, or other natural
calamity. (1183a)
Art. 1266. The debtor in obligations to do shall also
be released when the prestation becomes legally or
physically impossible without the fault of the obligor.
(1184a)
NOTE: This article does not apply in obligation to
give.
Art. 1267. When the service has become so difficult
as to be manifestly beyond the contemplation of the
parties, the obligor may also be released therefrom,
in whole or in part. (n)
Extinguishment; Loss; Impossible Service (1993)
In 1971, Able Construction, Inc. entered into a contract
has been extinguished by the novation or extinction of the
with Tropical Home Developers, Inc. whereby the former
would build for the latter the houses within its subdivision.
The cost of each house, labor and materials included,
was P100,000.00. Four hundred units were to be
constructed within five years. In 1973, Able found that it
could no longer continue with the job due to the increase
in the price of oil and its derivatives and the concomitant
worldwide spiraling of prices of all commodities, including
basic raw materials required for the construction of the
houses. The cost of development had risen to
unanticipated levels and to such a degree that the
conditions and factors which formed the original basis of
the contract had been totally changed. Able brought suit
against Tropical Homes praying that the Court relieve it of
its obligation. Is Able Construction entitled to the relief
sought?
SUGGESTED ANSWER:
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Yes, the Able Construction. Inc. is entitled to the relief
sought under Article 1267, Civil Code. The law provides:
"When the service has become so difficult as to be
manifestly beyond the contemplation of the parties, the
obligor may also be released therefrom, in whole or in
part."
PRINCIPLE OF “REBUS SIC STANTIBUS”
[a.k.a. Doctrine of Unforeseen Events]
The agreement is valid only if the same conditions
prevailing at the time of contracting continue to exist
at the time of performance; obligor may be released
in whole or in part based on this ground.
Requisites:
1. The event or change could not have been
foreseen at the time of the execution of the
contract;
2. The performance is extremely difficult (but
not impossible);
3. The event was not due to the act of any of
the parties;
4. The contract is for a future prestation.
Art. 1268. When the debt of a thing certain and
determinate proceeds from a criminal offense, the
debtor shall not be exempted from the payment of
its price, whatever may be the cause for the loss,
unless the thing having been offered by him to the
person who should receive it, the latter refused
without justification to accept it. (1185)
Art. 1269. The obligation having been extinguished
by the loss of the thing, the creditor shall have all
the rights of action which the debtor may have
against third persons by reason of the loss. (1186)
SECTION 3. - Condonation or Remission of the
Debt
Art. 1270. Condonation or remission is essentially
gratuitous, and requires the acceptance by the
obligor. It may be made expressly or impliedly.
One and the other kind shall be subject to the rules
which govern inofficious donations. Express
condonation shall, furthermore, comply with the
forms of donation. (1187)
CONDONATION/REMISSION
Is a gratuitous abandonment of debt, or right to
claim.
Requisites:
1. There must an agreement;
2. There must be subject matter;
3. Cause or consideration must be liberality;
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
4. Parties must be capacitated and must
consent; it requires acceptance by the
obligor; implied in mortis causa and
express in inter vivos;
5. Formalities of donation is needed in case of
express remission;
6. Obligation remitted must have been
demandable at the time of remission.
Extinguishment; Condonation (2000)
Arturo borrowed P500,000.00 from his father. After he
had paid P300,000.00, his father died. When the
administrator of his father's estate requested payment of
the balance of P200,000.00. Arturo replied that the same
had been condoned by his father as evidenced by a
notation at the back. The existence of inflation or back of
his check payment for the P300,000.00 reading: "In full
payment of the loan". Will this be a valid defense in an
action for collection? (3%)
SUGGESTED ANSWER:
It depends. If the notation "in full payment of the loan"
was written by Arturo's father, there was an implied
condonation of the balance that discharges the obligation.
In such case, the notation is an act of the father from
which condonation may be inferred. The condonation
being implied, it need not comply with the formalities of a
donation to be effective. The defense of full payment will,
therefore, be valid.
When, however, the notation was written by Arturo
himself. It merely proves his intention in making that
payment but in no way does it bind his father (Yam v. CA,
G.R No. 104726. 11 February 1999). In such case, the
notation was not the act of his father from which
condonation may be inferred. There being no
condonation at all the defense of full payment will not be
valid.
ALTERNATIVE ANSWER:
The action will not prosper. If the notation was written by
Arturo's father, it amounted to an express condonation of
the balance which must comply with the formalities of a
donation to be valid under the 2nd paragraph of Article
1270 of the New Civil Code. Since the amount of the
balance is more than 5,000 pesos, the acceptance by
Arturo of the condonation must also be in writing under
Article 748. There being no acceptance in writing by
Arturo, the condonation is void and the obligation to pay
the balance subsists. The defense of full payment is,
therefore, not valid. In case the notation was not written
by Arturo's father, the answer is the same as the answers
above.
Art. 1271. The delivery of a private document
evidencing a credit, made voluntarily by the creditor
to the debtor, implies the renunciation of the action
which the former had against the latter.
If in order to nullify this waiver it should be claimed
to be inofficious, the debtor and his heirs may
uphold it by proving that the delivery of the
document was made in virtue of payment of the
debt. (1188)
NOTES:
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 The original must be the one surrendered.
 If the private document consists of several
copies, the original (as distinguished from
duplicate original) – the topmost copy –
should be the one surrendered.
Art. 1272. Whenever the private document in which
the debt appears is found in the possession of the
debtor, it shall be presumed that the creditor
delivered it voluntarily, unless the contrary is
proved. (1189)
Art. 1273. The renunciation of the principal debt
shall extinguish the accessory obligations; but the
waiver of the latter shall leave the former in force.
(1190)
Art. 1274. It is presumed that the accessory
obligation of pledge has been remitted when the
thing pledged, after its delivery to the creditor, is
found in the possession of the debtor, or of a third
person who owns the thing. (1191a)
SECTION 4. - Confusion or Merger of Rights
Art. 1275. The obligation is extinguished from the
time the characters of creditor and debtor are
merged in the same person. (1192a)
Requisites:
1. It must take place between principal debtor
and principal creditor only;
2. The merger must be clear and definite;
3. The obligation involved must be the same
and identical – one obligation only;
Art. 1276. Merger which takes place in the person
of the principal debtor or creditor benefits the
guarantors. Confusion which takes place in the
person of any of the latter does not extinguish the
obligation. (1193)
Art. 1277. Confusion does not extinguish a joint
obligation except as regards the share
corresponding to the creditor or debtor in whom the
two characters concur. (1194)
SECTION 5. - Compensation
Art. 1278. Compensation shall take place when two
persons, in their own right, are creditors and
debtors of each other. (1195)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 1279. In order that compensation may be
proper, it is necessary:
(1) That each one of the obligors be bound
principally, and that he be at the same time
a principal creditor of the other;
(2) That both debts consist in a sum of
money, or if the things due are
consumable, they be of the same kind, and
also of the same quality if the latter has
been stated;
(3) That the two debts be due;
(4) That they be liquidated and
demandable;
(5) That over neither of them there be any
retention or controversy, commenced by
third persons and communicated in due
time to the debtor. (1196)
Extinguishment; Compensation/Set-Off; Banks (1998)
X, who has a savings deposit with Y Bank in the sum of
P1,000,000.00 incurs a loan obligation with the said Bank
in the sum of P800.000.00 which has become due. When
X tries to withdraw his deposit, Y Bank allows only
P200.000.00 to be withdrawn, less service charges,
claiming that compensation has extinguished its
obligation under the savings account to the concurrent
amount of X's debt. X contends that compensation is
improper when one of the debts, as here, arises from a
contract of deposit. Assuming that the promissory note
signed by X to evidence the loan does not provide for
compensation between said loan and his savings deposit,
who is correct? [3%]
SUGGESTED ANSWER:
Y bank is correct. An. 1287, Civil Code, does not apply.
All the requisites of Art. 1279, Civil Code are present. In
the case of Gullas vs. PNB [62 Phil. 519), the Supreme
Court held: "The Civil Code contains provisions regarding
compensation (set off) and deposit. These portions of
Philippine law provide that compensation shall take place
when two persons are reciprocally creditor and debtor of
each other. In this connection, it has been held that the
relation existing between a depositor and a bank is that of
creditor and debtor, x x x As a general rule, a bank has a
right of set off of the deposits in its hands for the payment
of any indebtedness to it on the part of a depositor."
Hence, compensation took place between the mutual
obligations of X and Y bank.
2012 Bar Exam Question
62. The following are the requisites of legal
compensation, except: a) That each of the
obligors is bound principally and that he be
the same time a principal creditor of the other.
b) That both debts consist in a sum of money,
or if the things due are consumable, they be
the same kind, and also of the same quality if
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the latter has been stated. c) That the two (2)
debts are not yet due. d) That they be
liquidated and demandable.
Extinguishment; Compensation (2008)
No. XV. Eduardo was granted a loan by XYZ
Bank for the purpose of improving a building
which XYZ leased from him. Eduardo,
executed the promissory note ("PN") in favor of
the bank, with his friend Recardo as co-
signatory. In the PN, they both acknowledged
that they are "individually and collectively"
liable and waived the need for prior demand.
To secure the PN, Recardo executed a real
estate mortgage on his own property. When
Eduardo defaulted on the PN, XYZ stopped
payment of rentals on the building on the
ground that legal compensation had set in.
Since there was still a balance due on the PN
after applying the rentals, XYZ foreclosed the
real estate mortgage over Recardo's property.
Recardo opposed the foreclosure on the
ground that he is only a co-signatory; that no
demand was made upon him for payment, and
assuming he is liable, his liability should not
go beyond half the balance of the loan.
Further, Recardo said that when the bank
invoked compensation between the reantals
and the amount of the loan, it amounted to a
new contract or novation, and had the effect of
extinguishing the security since he did not give
his consent (as owner of the property under
the real estate mortgage) thereto.
(A). Can XYZ Bank validly assert legal
compensation? (2%)
SUGGESTED ANSWER: Yes, XYZ Bank can
validly assert legal compensation. In the
present case, all of the elements of legal
compensation are present: (1) XYZ Bank is
the creditor of Eduardo while Eduardo is
the lessor of XYZ Bank; (2) both debts
consist in a sum of money, or if the things
due are consumable, they be of the same
kind, and also of the same quality if the
latter has been stated; (3) the two debts be
due; (4) they be liquidated and demandable,
and (5) over neither of them there be any
retention or controversy, commenced by
third persons and communicated in due
time to the debtor (Art. 1279, Civil Code).
Extinguishment; Compensation (2009)
No.XV. Sarah had a deposit in a savings
account with Filipino Universal Bank in the
amount of five million pesos (P5,000,000.00).
To buy a new car, she obtained a loan from
the same bank in the amount of
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
P1,200,000.00, payable in twelve monthly
installments. Sarah issued in favor of the bank
post-dated checks, each in the amount of
P100,000.00, to cover the twelve monthly
installment payments. On the third, fourth
and fifth months, the corresponding checks
bounced.
The bank then declared the whole obligation
due, and proceeded to deduct the amount of
one million pesos (P1,000,000.00) from
Sarah’s deposit after notice to her that this is
a form of
compensation allowed by law. Is the bank
correct? Explain. (4%) SUGGESTED ANSWER:
No, the bank is not correct. While the Bank
is correct about the applicability of
compensation, it was not correct as to the
amount compensated. A bank deposit is a
contract of loan, where the depositor is the
creditor and the bank the debtor. Since
Sarah is also the debtor of the bank with
respect to the loan, both are mutually
principal debtors and creditors of each
other. Both obligation are due, demandable
and liquidated but only up to the extent of
P300,000.00 (covering the unpaid third,
fourth and fifth monthly installments). The
entire one million was not yet due because
the loan has no acceleration clause in case
of default. And since there is no retention
or controversy commenced by third person
and communicated in due time to the
debtor, then all the requisites of legal
compensation are present but only up to
the amount of P300,000.00. The bank,
therefore, may deduct P300,000.00 from
Sarah’s bank deposit by way of
compensation.
Extinguishment; Compensation (2002)
Stockton is a stockholder of Core Corp. He desires to sell
his shares in Core Corp. In view of a court suit that Core
Corp. has filed against him for damages in the amount of
P 10 million, plus attorney’s fees of P 1 million, as a result
of statements published by Stockton which are allegedly
defamatory because it was calculated to injure and
damage the corporation’s reputation and goodwill. The
articles of incorporation of Core Corp. provide for a right
of first refusal in favor of the corporation. Accordingly,
Stockton gave written notice to the corporation of his offer
to sell his shares of P 10 million. The response of Core
corp. was an acceptance of the offer in the exercise of its
rights of first refusal, offering for the purpose payment in
form of compensation or set-off against the amount of
damages it is claiming against him, exclusive of the claim
for attorney’s fees. Stockton rejected the offer of the
corporation, arguing that compensation between the
value of the shares and the amount of damages
demanded by the corporation cannot legally take effect.
Is Stockton correct? Give reason for your answer. (5%)
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SUGGESTED ANSWERS:
Stockton is correct. There is no right of compensation
between his price of P10 million and Core Corp.’s
unliquidated claim for damages. In order that
compensation may be proper, the two debts must be
liquidated and demandable. The case for the P 10million
damages being still pending in court, the corporation has
as yet no claim which is due and demandable against
Stockton.
ANOTHER MAIN ANSWER:
The right of first refusal was not perfected as a right for commodatum.
the reason that there was a conditional acceptance
equivalent to a counter-offer consisting in the amount of
damages as being credited on the purchase price.
Therefore, compensation did not result since there was
no valid right of first refusal (Art. 1475 & 1319, NCC)
ANOTHER MAIN ANSWER:
refusal, compensation did not take place because the
claim is unliquidated.
Art. 1280. Notwithstanding the provisions of the
preceding article, the guarantor may set up
compensation as regards what the creditor may
owe the principal debtor. (1197)
Art. 1281. Compensation may be total or partial.
When the two debts are of the same amount, there
is a total compensation. (n)
Art. 1282. The parties may agree upon the
compensation of debts which are not yet due. (n)
Art. 1283. If one of the parties to a suit over an
obligation has a claim for damages against the
other, the former may set it off by proving his right
to said damages and the amount thereof. (n)
Art. 1284. When one or both debts are rescissible
or voidable, they may be compensated against
each other before they are judicially rescinded or
avoided. (n)
Art. 1285. The debtor who has consented to the
assignment of rights made by a creditor in favor of a
third person, cannot set up against the assignee the
compensation which would pertain to him against
the assignor, unless the assignor was notified by
the debtor at the time he gave his consent, that he
reserved his right to the compensation.
If the creditor communicated the cession to him but
the debtor did not consent thereto, the latter may
set up the compensation of debts previous to the
cession, but not of subsequent ones.
If the assignment is made without the knowledge of
the debtor, he may set up the compensation of all
credits prior to the same and also later ones until he
had knowledge of the assignment. (1198a)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 1286. Compensation takes place by operation
of law, even though the debts may be payable at
different places, but there shall be an indemnity for
expenses of exchange or transportation to the place
of payment. (1199a)
Art. 1287. Compensation shall not be proper when
one of the debts arises from a depositum or from
the obligations of a depositary or of a bailee in
Neither can compensation be set up against a
creditor who has a claim for support due by
gratuitous title, without prejudice to the provisions of
paragraph 2 of Article 301. (1200a)
FACULTATIVE COMPENSATION
That which can be set up only by or at the option of
the creditor.
Art. 1288. Neither shall there be compensation if
one of the debts consists in civil liability arising from
a penal offense. (n)
Art. 1289. If a person should have against him
several debts which are susceptible of
compensation, the rules on the application of
payments shall apply to the order of the
compensation. (1201)
Art. 1290. When all the requisites mentioned in
Article 1279 are present, compensation takes effect
by operation of law, and extinguishes both debts to
the concurrent amount, even though the creditors
and debtors are not aware of the compensation.
(1202a)
KINDS OF COMPENSATION:
1. Legal – by operation of law, as long as 5
requisites concur, even if unknown to
parties and if payable in different places.
2. Conventional – agreement of the parties is
enough, forget other requirements as long
as both consented.
3. Facultative – one party has the option of
claiming/opposing one who has benefit of
period may choose to compensate.
4. Judicial – upon order of the court.
5. Total – two debts are of the same amount.
6. Partial – debts are not of the same amount.
SECTION 6. – Novation
NOVATION
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Extinguishment of obligation by creating/substituting
a new one in its place.
Requisites:
1. Valid obligation;
2. Intent to extinguish old obligation;
3. Capacity and consent of parties to the new
obligation;
4. Valid new obligation.
Art. 1291. Obligations may be modified by:
(1) Changing their object or principal
conditions;
(2) Substituting the person of the debtor;
(3) Subrogating a third person in the rights
of the creditor. (1203)
NOTES:
 There is novation if the price agreed upon is
increased. BUT if the price is decreased, it is
but a partial remission.
 Agreement providing for payment of additional
interest is not a novation.
 Agreement providing for additional security is
not novation.
Art. 1292. In order that an obligation may be
extinguished by another which substitutes the
same, it is imperative that it be so declared in
unequivocal terms, or that the old and the new
obligations be on every point incompatible with
each other. (1204)
Extinguishment; Novation (2008)
No. XV. Eduardo was granted a loan by XYZ
Bank for the purpose of improving a building
which XYZ leased from him. Eduardo,
executed the promissory note ("PN") in favor of
the bank, with his friend Recardo as co-
signatory. In the PN, they both acknowledged
that they are "individually and collectively"
liable and waived the need for prior demand.
To secure the PN, Recardo executed a real
estate mortgage on his own property. When
Eduardo defaulted on the PN, XYZ stopped
payment of rentals on the building on the
ground that legal compensation had set in.
Since there was still a balance due on the PN
after applying the rentals, XYZ foreclosed the
real estate mortgage over Recardo's property.
Recardo opposed the foreclosure on the
ground that he is only a co-signatory; that no
demand was made upon him for payment, and
assuming he is liable, his liability should not
go beyond half the balance of the loan.
Further, Recardo said that when the bank
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
invoked compensation between the reantals
and the amount of the loan, it amounted to a
new contract or novation, and had the effect of
extinguishing the security since he did not give
his consent (as owner of the property under
the real estate mortgage) thereto. (C). Does
Recardo have basis under the Civil Code for
claiming that the original contract was
novated? (2%) SUGGESTED ANSWER: No.
Recardo has no basis for claiming novation
of the original contract when the bank
invoked compensation because there was
simply partial compensation (Art. 1290,
Civil Code) and this would not bar the bank
from recovering the remaining balance of
the obligation. ALTERNATIVE ANSWER:
No. In order that an obligation may be
extinguished by another, it is imperative
that it be so declared in unequivocal terms,
or that the old and new obligations be on
every point compatible with each other.
Novation is never presumed (Art. 1292,
Civil Code).
2011 Bar Exam Question
(4) Upon the proposal of a third person, a new
debtor substituted the original debtor without
the latter’s consent. The creditor accepted the
substitution. Later, however, the new debtor
became insolvent and defaulted in his
obligation. What is the effect of the new
debtor’s default upon the original debtor? (A)
The original debtor is freed of liability since
novation took place and this relieved him
of his obligation. (B) The original debtor shall
pay or perform the obligation with recourse to
the new debtor. (C) The original debtor
remains liable since he gave no consent to the
substitution. (D) The original debtor shall pay
or perform 50% of the obligation to avoid
unjust enrichment on his part.
Art. 1293. Novation which consists in substituting a
new debtor in the place of the original one, may be
made even without the knowledge or against the
will of the latter, but not without the consent of the
creditor. Payment by the new debtor gives him the
rights mentioned in Articles 1236 and 1237. (1205a)
SUBSTITUTING THE PERSON OF THE DEBTOR
a. Expromision – initiative is from a 3rd
person or new debtor.
 New debtor and creditor consents.
 Old debtor is released from obligation.
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 If made with the consent of the old
debtor, subject to full reimbursement
and subrogation.
 If without the consent or against the will
of the old debtor, only beneficial
reimbursement.
 If new debtor is insolvent, old debtor is
not responsible if without his consent.
b. Delegacion – initiative of old debtor.
 All parties must consent.
 If new debtor is insolvent, old debtor is
not liable unless insolvency is already
existing and of public knowledge or
known to him at the time of delegation.
Note: In substitution of the person of the debtor,
there must be an agreement that the old debtor/s
is/are released from the obligation. Otherwise, their
liability may continue.
Extinguishment; Assignment of Rights (2001)
The sugar cane planters of Batangas entered into a long-
term milling contract with the Central Azucarera de Don
Pedro Inc. Ten years later, the Central assigned its rights
to the said milling contract to a Taiwanese group which
would take over the operations of the sugar mill. The
planters filed an action to annul the said assignment on
the ground that the Taiwanese group was not registered
with the Board of Investments. Will the action prosper or
not? Explain briefly. (5%)
(Note: The question presupposes knowledge and
requires the application of the provisions of the Omnibus
Investment Code, which properly belongs to Commercial
law)
SUGGESTED ANSWER:
The action will prosper not on the ground invoked but on
the ground that the farmers have not given their consent
to the assignment. The milling contract imposes
reciprocal obligations on the parties. The sugar central
has the obligation to mill the sugar cane of the farmers
while the latter have the obligation to deliver their sugar
cane to the sugar central. As to the obligation to mill the
sugar cane, the sugar central is a debtor of the farmers.
In assigning its rights under the contract, the sugar
central will also transfer to the Taiwanese its obligation to
mill the sugar cane of the farmers. This will amount to a
novation of the contract by substituting the debtor with a
third party. Under Article 1293 of the Civil Code, such
substitution cannot take effect without the consent of the
creditor. The formers, who are creditors as far as the
obligation to mill their sugar cane is concerned, may
annul such assignment for not having given Even [if]
assuming that there was a perfect right of first their
consent thereto.
ALTERNATIVE ANSWER:
The assignment is valid because there is absolute
freedom to transfer the credit and the creditor need not
get the consent of the debtor. He only needs to notify
him.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 1294. If the substitution is without the
knowledge or against the will of the debtor, the new
debtor's insolvency or non-fulfillment of the
obligations shall not give rise to any liability on the
part of the original debtor. (n)
Art. 1295. The insolvency of the new debtor, who
has been proposed by the original debtor and
accepted by the creditor, shall not revive the action
of the latter against the original obligor, except
when said insolvency was already existing and of
public knowledge, or known to the debtor, when the
delegated his debt. (1206a)
Art. 1296. When the principal obligation is
extinguished in consequence of a novation,
accessory obligations may subsist only insofar as
they may benefit third persons who did not give
their consent. (1207)
NOTE: This article seemed to be an exception to
the rule that accessory follows the principal.
Extinguishment; Novation (1994)
In 1978, Bobby borrowed Pl,000,000.00 from Chito
payable in two years. The loan, which was evidenced by
a promissory note, was secured by a mortgage on real
property. No action was filed by Chito to collect the loan
or to foreclose the mortgage. But in 1991, Bobby, without
receiving any amount from Chito, executed another
promissory note which was worded exactly as the 1978
promissory note, except for the date thereof, which was
the date of its execution. 1) Can Chito demand payment
on the 1991 promissory note in 1994? 2) Can Chito
foreclose the real estate mortgage if Bobby fails to make
good his obligation under the 1991 promissory note?
SUGGESTED ANSWER:
1) Yes, Chito can demand payment on the 1991
promissory note in 1994. Although the 1978 promissory
note for P1 million payable two years later or in 1980
became a natural obligation after the lapse of ten (10)
years, such natural obligation can be a valid
consideration of a novated promissory note dated in 1991
and payable two years later, or in 1993. All the elements
of an implied real novation are present: a) an old valid
obligation; b) a new valid obligation; c) capacity of the
parties; d) animus novandi or intention to novate; and e)
The old and the new obligation should be incompatible
with each other on all material points (Article 1292). The
two promissory notes cannot stand together, hence, the
period of prescription of ten (10) years has not yet lapsed.
SUGGESTED ANSWER:
2) No. The mortgage being an accessory contract
prescribed with the loan. The novation of the loan,
however, did not expressly include the mortgage, hence,
the mortgage is extinguished under Article 1296 of the
NCC. The contract principal obligation insofar as third
parties are concerned.
Art. 1297. If the new obligation is void, the original
one shall subsist, unless the parties intended that
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the former relation should be extinguished in any Can be done without Needs consent of the
event. (n) the consent of the creditor (express or
debtor implied)
Art. 1298. The novation is void if the original two obligations, one is
obligation was void, except when annulment may One obligation extinguished and new
be claimed only by the debtor or when ratification one is created
validates acts which are voidable. (1208a) 3rd person has no New debtor is obliged to
obligation to pay if pay
Art. 1299. If the original obligation was subject to a insolvent
suspensive or resolutory condition, the new
obligation shall be under the same condition, unless
it is otherwise stipulated. (n)
CONVENTIONAL ASSIGNMENT OF
Art. 1300. Subrogation of a third person in the rights SUBROGATION RIGHTS
of the creditor is either legal or conventional. The Governed by arts. 1300 Governed by arts. 1624
former is not presumed, except in cases expressly – 1304 – 1627
mentioned in this Code; the latter must be clearly Debtor’s consent is Debtor’s consent is not
established in order that it may take effect. (1209a) required required
There is transmission of
Art. 1301. Conventional subrogation of a third the right of the creditor
person requires the consent of the original parties Extinguishes the to a 3rd person without
and of the third person. (n) obligation and gives rise modifying or
to a new one extinguishing the
Art. 1302. It is presumed that there is legal obligation
subrogation: Defects and vices in the Defects and vices of the
old obligation are cured obligation are not cured
Takes effect upon As far as the debtor is
(1) When a creditor pays another creditor
moment of novation or concerned, takes effect
who is preferred, even without the debtor's
subrogation upon notification
knowledge;

(2) When a third person, not interested in

the obligation, pays with the express or tacit
approval of the debtor; Title II. - CONTRACTS

(3) When, even without the knowledge of CHAPTER 1

the debtor, a person interested in the
fulfillment of the obligation pays, without
prejudice to the effects of confusion as to
the latter's share. (1210a)
Art. 1303. Subrogation transfers to the persons
subrogated the credit with all the rights thereto
appertaining, either against the debtor or against
third person, be they guarantors or possessors of
mortgages, subject to stipulation in a conventional
subrogation. (1212a)
Art. 1304. A creditor, to whom partial payment has
been made, may exercise his right for the
remainder, and he shall be preferred to the person
who has been subrogated in his place in virtue of
the partial payment of the same credit. (1213)
Payment by 3rd person Change of debtor
Debtor is not Debtor is released
necessarily released
from debt
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
GENERAL PROVISIONS
Art. 1305. A contract is a meeting of minds
between two persons whereby one binds himself,
with respect to the other, to give something or to
render some service. (1254a)
PRINCIPAL CHARACTERISTICS:
1. Autonomy of wills – parties may stipulate
anything as long as not contrary to law,
morals, public policy or public order.
2. Mutuality – performance or validity binds
both parties; not left to the will of one of the
parties.
3. Obligatory force – parties are bound from
the perfection of the contract. It is the law
between the parties.
4. Relativity – binding only between the
parties, their assigns, and heirs. Strangers
cannot demand enforcement (or
rescission).
Exceptions:
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a. Accion pauliana; b. Bilateral – both parties are
b. Accion directa; required to render reciprocal
c. Stipulation por autrui. prestations.

5. As to name of designation
KINDS OF CONTRACT a. Nominate – like sale, loan, pledge,
etc.
1. As to perfection or formation: b. Innominate – has no specific
a. Consensual – perfected by designation in the civil code.
agreement of the parties. I. Do ut des – I give that you
b. Real – perfected by delivery of the may give.
object (commodatum, pledge, II. Do ut facias – I give that
deposit). you may do.
c. Formal/solemn – perfected by III. Facio ut des – I do that you
conformity to essential formalities may give.
prescribed by law. IV. Facio ut facias – I do that
you may do.
Examples:
I. Donations; 2012 Bar Exam Question
II. Partnership where real 68. The following are the ways by which
property is contributed (art. innominate contracts are regulated, except: a)
1771, 1773; By the stipulation of the parties. b) By the
III. Antichresis – art. 2134; general principles of quasi-contracts and
IV. Stipulation charging delicts c) By the rules governing the most
interest – art. 1956; analogous nominate contracts. d) By the
V. Agency to sell real property customs of the place.
or an interest therein – art.
1874; 2012 Bar Exam Question
VI. Stipulation limiting common 48. It is a conduct that may consist of giving,
carrier’s duty of extra- doing, or not doing something. a) Obligation b)
ordinary diligence to Juridical necessity c) Prestation d) Contract
ordinary diligence – art.
1744; 2012 Bar Exam Question
VII. Chattel mortgage; 63. Which of the following statements is
VIII. Sale of large cattle. correct? a) All contracts are perfected by mere
consent. b) All contracts are perfected by
2. As to cause – delivery of the object. c) All contracts are
a. Onerous – with valuable required to be in writing. d) All contracts are
consideration. required to have a valid consideration.
b. Gratuitous – founded on liberality.
c. Remunerative – prestation is given
for service previously rendered not STAGES IN A CONTRACT:
as obligation. 1. Preparation/negotiation.
2. Perfection/birth.
3. As to importance or dependence of one 3. Consummation/performance.
upon another
a. Principal – contract can stand
alone (loan).
b. Accessory –may not exist on its Art. 1306. The contracting parties may establish
own (mortgage, pledge). such stipulations, clauses, terms and conditions as
c. Preparatory – not an end by itself they may deem convenient, provided they are not
but a means through which future contrary to law, morals, good customs, public order,
contracts may be made (not yet a or public policy. (1255a)
contract).
2012 Bar Exam Question
4. As to parties obliged 67. It is rule which holds that the freedom of
a. Unilateral – only one of the parties the parties to contract includes the freedom to
has an obligation. stipulate, provided the stipulations are not
contrary to law, morals, good customs, public
order or public policy. a) Obligatory force of
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 289
____________________________________________________________________________________________________
contracts b) Mutuality of contracts c)
Autonomy of contracts d) Relativity of
contracts
2011 Bar Exam Question
(33) Contracts take effect only between the
parties or their assigns and heirs, except
where the rights and obligations arising from
the contract are not transmissible by their
nature, by stipulation, or by provision of law.
In the latter case, the assigns or the heirs are
not bound by the contracts. This is known as
the principle of (A) Relativity of contracts.
(B) Freedom to stipulate. (C) Mutuality of
contracts. (D) Obligatory force of contracts.
Art. 1307. Innominate contracts shall be regulated
by the stipulations of the parties, by the provisions
of Titles I and II of this Book, by the rules governing
the most analogous nominate contracts, and by the
customs of the place. (n)
Art. 1308. The contract must bind both contracting
parties; its validity or compliance cannot be left to
the will of one of them. (1256a)
2012 Bar Exam Question
64. It is a principle which holds that parties
are bound not only by what has been
expressly provided for in the contract but also
to the natural consequences that flow out of
such agreement. a) Obligatory force of
contracts b) Mutuality of contracts c)
Autonomy of contracts d) Relativity of
contracts.
2012 Bar Exam Question
65. It is a principle which holds that contracts
must be binding to both parties and its validity
and effectivity can never be left to the will of
one of the parties. a) Obligatory force of
contracts b) Mutuality of contracts c)
Autonomy of contracts d) Relativity of
contracts
Art. 1309. The determination of the performance
may be left to a third person, whose decision shall
not be binding until it has been made known to both
contracting parties. (n)
Art. 1310. The determination shall not be obligatory
if it is evidently inequitable. In such case, the courts
shall decide what is equitable under the
circumstances. (n)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 1311. Contracts take effect only between the
parties, their assigns and heirs, except in case
where the rights and obligations arising from the
contract are not transmissible by their nature, or by
stipulation or by provision of law. The heir is not
liable beyond the value of the property he received
from the decedent.
If a contract should contain some stipulation in favor
of a third person, he may demand its fulfillment
provided he communicated his acceptance to the
obligor before its revocation. A mere incidental
benefit or interest of a person is not sufficient. The
contracting parties must have clearly and
deliberately conferred a favor upon a third person.
(1257a)
2012 Bar Exam Question
66. It refers to the rule that a contract is
binding not only between parties but extends to
the heirs, successors in interest, and
assignees of the parties, provided that the
contract involved transmissible rights by their
nature, or by stipulation or by law. a)
Obligatory force of contracts b) Mutuality of
contracts c) Autonomy of contracts d)
Relativity of contracts.
Requisites of Stipulation Por Autrui:
1. Parties must have clearly and deliberately
conferred a favor upon a 3rd person;
2. The stipulation in favor of 3rd person should
be a part of, not the whole contract.;
3. That favorable stipulation should not be
conditioned or compensated by any kind of
obligation whatsoever;
4. Neither of the contracting parties bears the
legal representation or authorization of 3 rd
party;
5. The 3rd party communicated his acceptance
before revocation by the original parties.
Note: Acceptance may be express
or implied.
TEST OF BENEFICIAL STIPULATION
There must be an express intention shown on the
face of the contract bestowing some benefit to a 3 rd
person.
EXCEPTIONS TO THE RULE ON RELATIVITY OF
CONTRACTS:
1. Stipulation por autrui;
2. Contracts creating real rights;
3. Creditors are protected from contracts
intended to defraud them;
4. Contracts creating status [marriage];
5. Group contract [CBA];
6. 3RD persons inducing another to violate a
contract.
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Nature of Contracts; Relativity of Contracts (2002)
Printado is engaged in the printing business. Suplico
supplies printing paper to Printado pursuant to an order
agreement under which Suplico binds himself to deliver
the same volume of paper every month for a period of 18
months, with Printado in turn agreeing to pay within 60
days after each delivery. Suplico has been faithfully
delivering under the order agreement for 10 months but
thereafter stopped doing so, because Printado has not
made
with publisher Publico for the printing of 10,000 volumes
of school textbooks. Suplico was aware of said printing
contract. After printing 1,000 volumes, Printado also fails
to perform under its printing contract with Publico. Suplico
sues Printado for the value of the unpaid deliveries under
their order agreement. At the same time Publico sues
Printado for damages for breach of contract with respect
to their own printing agreement. In the suit filed by
Suplico, Printado counters that: (a) Suplico cannot
demand payment for deliveries made under their order
agreement until Suplico has completed performance
under said contract; (b) Suplico should pay damages for
breach of contract; and (c) with Publico should be liable
for Printado’s breach of his contract with Publico because
the order agreement between Suplico and Printado was
for the benefit of Publico. Are the contentions of Printado
tenable? Explain your answers as to each contention.
(5%)
SUGGESTED ANSWER:
No, the contentions of Printado are untenable. Printado
having failed to pay for the printing paper covered by the
delivery invoices on time, Suplico has the right to cease
making further delivery. And the latter did not violate the
order agreement (Integrated Packaging Corporation v.
Court of Appeals, (333 SCRA 170, G.R. No. 115117,
June 8, [2000]).
Suplico cannot be held liable for damages, for breach of
contract, as it was not he who violated the order
agreement, but Printado. Suplico cannot be held liable for
Printado’s breach of contract with Publico. He is not a
party to the agreement entered into by and between
Printado and Publico. Theirs is not a stipulation pour
atrui. [Aforesaid] Such contracts do could not affect third
persons like Suplico because of the basic civil law
principle of relativity of contracts which provides that
contracts can only bind the parties who entered into it,
and it cannot favor or prejudice a third person, even if he
is aware of such contract and has acted with knowledge
thereof. (Integrated Packaging Corporation v. CA, supra.)
Art. 1312. In contracts creating real rights, third
persons who come into possession of the object of
the contract are bound thereby, subject to the
provisions of the Mortgage Law and the Land
Registration Laws. (n)
Art. 1313. Creditors are protected in cases of
contracts intended to defraud them. (n)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 1314. Any third person who induces another to
violate his contract shall be liable for damages to
the other contracting party. (n)
REQUISITES:
1. Existence of a valid contract;
2. Knowledge of the existence of the contract
by the 3rd person;
3. There is inducement (interference) by such
third person to any of the contracting
parties;
4. The inducement is for the violation of the
terms of the contract.
Note: This is also known as the Doctrine of
Tortuous Interference.
2012 Bar Exam Question
89. Which phrase most accurately completes
the statement – Any third person who induces
another to violate his contract: a) shall be
liable for damages only if he is a party to the
same contract. b) shall be liable for damages
to the other contracting party. c) shall not
be liable for damages to the other contracting
party. d) shall not be liable for damages if the
parties are in pari delicto.
Art. 1315. Contracts are perfected by mere consent,
and from that moment the parties are bound not
only to the fulfillment of what has been expressly
stipulated but also to all the consequences which,
according to their nature, may be in keeping with
good faith, usage and law. (1258)
Art. 1316. Real contracts, such as deposit, pledge
and Commodatum, are not perfected until the
delivery of the object of the obligation. (n)
Consensual vs. Real Contracts; Kinds of Real
Contracts (1998)
Distinguish consensual from real contracts and name at
least four (4) kinds of real contracts under the present
law. [3%]
SUGGESTED ANSWER:
CONSENSUAL CONTRACTS are those which are
perfected by mere consent (Art. 1315. Civil Code). REAL
CONTRACTS are those which are perfected by the
delivery of the object of the obligation. (Art. 1316, Civil
Code) Examples of real contracts are deposit, pledge,
commodatum and simple loan (mutuum).
Art. 1317. No one may contract in the name of
another without being authorized by the latter, or
unless he has by law a right to represent him.
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A contract entered into in the name of another by
one who has no authority or legal representation, or
who has acted beyond his powers, shall be
unenforceable, unless it is ratified, expressly or
impliedly, by the person on whose behalf it has
been executed, before it is revoked by the other
contracting party. (1259a)
CHAPTER 2
ESSENTIAL REQUISITES OF CONTRACTS
GENERAL PROVISIONS
Art. 1318. There is no contract unless the following
requisites concur:
(1) Consent of the contracting parties;
(2) Object certain which is the subject
matter of the contract;
(3) Cause of the obligation which is
established. (1261)
Contract of Option; Elements (2005)
Marvin offered to construct the house of Carlos for a very
reasonable price of P900,000.00, giving the latter 10 days
within which to accept or reject the offer. On the fifth day,
before Carlos could make up his mind, Marvin withdrew
his offer.
a) What is the effect of the withdrawal of Marvin's offer?
(2%)
SUGGESTED ANSWER:
The withdrawal of Marvin's offer will cause the offer to
cease in law. Hence, even if subsequently accepted,
there could be no concurrence of the offer and the
acceptance. In the absence of concurrence of offer and
acceptance, there can be no consent. (Laudico v. Arias
Rodriguez, G.R. No. 16530, March 31, 1922) Without
consent, there is no perfected contract for the
construction of the house of Carlos. (Salonga v. Farrales,
G.R. No. L-47088, July 10, 1981) Article 1318 of the Civil
Code provides that there can be no contract unless the
following requisites concur: (1) consent of the parties; (2)
object certain which is the subject matter of the contract;
and (3) cause of the obligation.
Marvin will not be liable to pay Carlos any damages for
withdrawing the offer before the lapse of the period
granted. In this case, no consideration was given by
Carlos for the option given, thus there is no perfected
contract of option for lack of cause of obligation. Marvin
cannot be held to have breached the contract. Thus, he
cannot be held liable for damages.
b) Will your answer be the same if Carlos paid Marvin
P10,000.00 as consideration for that option? Explain.
(2%)
ALTERNATIVE ANSWER:
My answer will be the same as to the perfection of the
contract for the construction of the house of Carlos. No
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
perfected contract arises because of lack of consent.
With the withdrawal of the offer, there could be no
concurrence of offer and acceptance.
My answer will not be the same as to damages. Marvin
will be liable for damages for breach of contract of option.
With the payment of the consideration for the option
given, and with the consent of the parties and the object
of contract being present, a perfected contract of option
was created. (San Miguel, Inc. v. Huang, G.R. No.
137290, July 31, 2000) Under Article 1170 of the Civil
Code, those who in the performance of their obligation
are guilty of contravention thereof, as in this case, when
Marvin did not give Carlos the agreed period of ten days,
are liable for damages.
ALTERNATIVE ANSWER:
My answer will not be the same if Carlos paid Marvin
P10,000.00 because an option contract was perfected.
Thus, if Marvin withdrew the offer prior to the expiration of
the 10-day period, he breached the option contract.
(Article 1324, Civil Code)
c) Supposing that Carlos accepted the offer before
Marvin could communicate his withdrawal thereof?
Discuss the legal consequences. (2%)
SUGGESTED ANSWER:
A contract to construct the house of Carlos is perfected.
Contracts are perfected by mere consent manifested by
the meeting of the offer and the acceptance upon the
thing and the cause which are to constitute the contract.
(Gomez v. Court of Appeals, G.R. No. 120747,
September 21, 2000)
Under Article 1315 of the Civil Code, Carlos and Marvin
are bound to fulfill what has been expressly stipulated
and all consequences thereof. Under Article 1167, if
Marvin would refuse to construct the house, Carlos is
entitled to have the construction be done by a third
person at the expense of Marvin. Marvin in that case will
be liable for damages under Article 1170.
SECTION 1. - Consent
Art. 1319. Consent is manifested by the meeting of
the offer and the acceptance upon the thing and the
cause which are to constitute the contract. The offer
must be certain and the acceptance absolute. A
qualified acceptance constitutes a counter-offer.
Acceptance made by letter or telegram does not
bind the offerer except from the time it came to his
knowledge. The contract, in such a case, is
presumed to have been entered into in the place
where the offer was made. (1262a)
REQUIREMENTS: (of consent)
1. Plurarity of subject (parties);
2. Capacity;
3. Intelligence and free will;
4. Manifestation of intent of parties;
5. Cognition by the other party;
6. Conformity of manifestation and cognition.
ELEMENTS OF VALID OFFER /ACCEPTANCE:
1. Definite - unequivocal;
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2. Complete - unconditional;
3. Intentional.
AMPLIFIED ACCEPTANCE
Under certain circumstances, a mere amplification
on the offer must be understood as an acceptance
of the original offer, plus a new offer which is
contained in the amplification.
RULE ON COMPLEX OFFERS
1. Offers are interrelated – contract is
perfected if all the offers are accepted.
2. Offers are not interrelated – single
acceptance of each offer results in a
perfected contract unless the offeror has
made it clear that one is dependent upon
the other and acceptance of both is
necessary.
CONTRACTS BY CORRESPONDENCE
Contracts made by letter or telegram, messengers
under the Civil Code follow the “COGNITION
THEORY”. That is, contract is perfected only when
the offeror comes to know, and not when the
offeree merely manifests his acceptance.
NOTE: Contracts governed by the Code of
Commerce, however, follow the “MANIFESTATION
THEORY”. That is, the contract is perfected from
the moment of acceptance. (art. 54, Code of
Commerce).
Samples:
a. Maritime commerce;
b. Bill of lading;
c. Crossed checks;
d. Commercial barter;
e. Transfer of negotiable credits;
f. Commercial contracts of overland
transportation.
Art. 1320. An acceptance may be express or
implied. (n)
Art. 1321. The person making the offer may fix the
time, place, and manner of acceptance, all of which
must be complied with. (n)
PERIODS FOR ACCEPTANCE:
1. Stated fixed period in the offer.
2. If no period is fixed in the offer –
a. Offer is made to a person present –
acceptance must be made
immediately.
Offer inter praesentes must be accepted
immediately. If the parties intended that there
be an express acceptance, the contract will be
perfected only upon knowledge by the offeror of
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
the express acceptance by the offeree of the
offer. An acceptance not made in the manner
prescribed by the offeror is not effective, but a
counter-offer which the offeror may accept or
reject (Malbarosa vs. CA, GR No.
12576,[2003]).
b. If offer is made to a person absent
– acceptance may be made within
such time that, under normal
circumstances, an answer can be
received from him.
NOTE: Acceptance may be revoked before it
comes to the knowledge of the offeror.
Art. 1322. An offer made through an agent is
accepted from the time acceptance is
communicated to him. (n)
Note: Does not apply to a mere messenger.
AUTO CONTRACTS
Made by a person acting in another’s name in one
capacity (like Special Power of Attorney).
COLLECTIVE CONTRACTS
Will of majority binds a minority to an agreement
notwithstanding the opposition of the latter. (like
CBA – Collective Bargaining Agreement).
CONTRACT OF ADHESION
A contract whereby a party has already a prepared
form of a contract, containing the stipulations he
desires, and simply asks the other party to agree to
them if he wants to enter into the contract. –
Samples:
1. Transportation (airwaybills, way bills, bill of
lading) tickets;
2. Insurance contracts;
3. Installment sales.
Art. 1323. An offer becomes ineffective upon the
death, civil interdiction, insanity, or insolvency of
either party before acceptance is conveyed. (n)
WHEN OFFER BECOMES INEFFECTIVE:
1. Art. 1323;
2. Express or implied revocation of the offer
by the offeree;
3. Qualified or conditional acceptance of the
offer, which becomes a counter-offer;
4. Subject matter becomes illegal or
impossible before acceptance is
communicated.
Art. 1324. When the offerer has allowed the offeree
a certain period to accept, the offer may be
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withdrawn at any time before acceptance by
communicating such withdrawal, except when the
option is founded upon a consideration, as
something paid or promised. (n)
OPTION CONTRACT
A distinct agreement, founded upon a distinct and
separate consideration granting a person the right
to buy or sell on a fixed period of time, which may
not be unilaterally withdrawn before the expiration
of the period.
Consideration need not be in money. It may
consist of anything of value (San Miguel vs.
Cojuangco).
Unilateral promise to buy or sell, if not supported by
a distinct consideration, may be withdrawn but may
not be done whimsically or arbitrarily; the right of
the grantee (would be buyer/seller) is damages and
not specific performance (Ang Yu vs. CA, 1994).
The basis of liability is abuse of right (art.
19, NCC).
An option clause in order to be valid and
enforceable must indicate the definite price at which
the person granting the option is willing to sell.
Contract can be enforced (specific performance)
and not only damages (Equatorial vs. Mayfair, 264
SCRA 483).
Option Contract (2002)
Explain the nature of an option contract. (2%)
SUGGESTED ANSWER:
An OPTION CONTRACT is one granting a privilege to
buy or sell within an agreed time and at a determined
price. It must be supported by a consideration distinct
from the price. (Art. 1479 and 1482, NCC)
Option Contract; Earnest Money (1993)
LT applied with BPI to purchase a house and lot in
Quezon City, one of its acquired assets. The amount
offered was Pl,000,000.00 payable, as follows:
P200,000.00 down payment, the balance of P800,000.00
payable within 90 days from June 1, 1985. BPI accepted
the offer, whereupon LT drew a check for P200,000.00 in
favor of BPI which the latter thereafter deposited in its
account. On September 5, 1985, LT wrote BPI requesting
extension until October 10, 1985 within which to pay the
balance, to which BPI agreed. On October 5, 1985, due
to the expected delay in the remittance of the needed
amount by his financier from the United States, LT wrote
BPI requesting a last extension until October 30, 1985,
within which to pay the balance. BPI denied LTs request
because another had offered to buy the same property for
P1,500,000.00. BPI cancelled its agreement with LT and
offered to return to him the amount of P200,000.00 that
LT had paid to it. On October 20, 1985, upon receipt of
the amount of P800,000.00 from his US financier, LT
offered to pay the amount by tendering a cashier's check
therefor but which BPI refused to accept. LT then filed a
complaint against BPI in the RTC for specific
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
performance and deposited in court the amount of
P800,000.00. Is BPI legally correct in canceling its
contract with LT?
SUGGESTED ANSWER:
BPI is not correct in canceling the contract with LT. In
Lina Topacio v Court of Appeals and BPI Investment (G.
R No. 102606, July 3. 1993, 211 SCRA 291) the
Supreme Court held that the earnest money is part of the
purchase price and is proof of the perfection of the
contract. Secondly, notarial or judicial rescission under
Art. 1592 and 1991 of the Civil Code is necessary
(Taguba v. de Leon, 132 SCRA 722.)
ALTERNATIVE ANSWER:
BPI is correct in canceling its contract with LT but BPI
must do so by way of judicial rescission under Article
1191 Civil Code. The law requires a judicial action, and
mere notice of rescission is insufficient if it is resisted.
The law also provides that slight breach is not a ground
for rescission (Song Fo & Co, vs, Hawaiian Phil Co., 47
Phils. 821), Delay in the fulfillment of the obligation (Art.
1169, Civil Code) is a ground to rescind, only if time is of
the essence. Otherwise, the court may refuse the
rescission if there is a just cause for the fixing of a period.
SITUATIONS IN AN OPTION CONTRACT:
a. With separate consideration –
I. Option contract is valid.
II. Offeror cannot withdraw offer until
after expiration of the period.
III. Subject to rescission and damages
but not specific performance
because it is not an obligation to
give.
b. Without separate consideration –
I. OLD RULE – offer is still valid, but
option contract is void and not
subject to rescission or damages,
(except when there is abuse of
right).
II. NEW RULE –Right of first refusal is
recognized.
RIGHT OF FIRST REFUSAL
Creates a promise to enter into a contract of sale
and it has no separate consideration. Generally not
subject to specific performance because there is no
contractual relationship here and it is not an
obligation to give.
The right of first refusal is only subject to specific
performance insofar as it is attached to a valid
written principal contract (e.g. lease). The right of
first refusal becomes one of the considerations
[conditions/terms] in the contract (Equatorail Realty
Dev’t Inc. vs. Mayfair Theater).
Right of First Refusal; Lessee; Effect (2008)
No.XVI. Dux leased his house to Iris for a
period of 2 years, at the rate of P25,000.00
monthly, payable annually in advance. The
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contract stipulated that it may be renewed for
another 2-year period upon mutual agreement
of the parties. The contract also granted Iris
the right of first refusal to purchase the
property at any time during the lease, if Dux
decides to sell the property at the same price
that the property is offered for sale to a third
party. Twenty-three months after execution of
the lease contract, Dux sold breach of her
right of first refusal. Dux said there was no
breach because the property was sold to his
mother who is not a third party. Iris filed an
action to rescind the sale and to compel Dux
to sell the property to her at the same price.
Alternatively, she asked the court to extend
the lease for another 2 years on the same
terms. (A). Can Iris seek rescission of the sale
of the property to Dux's mother? (3%)
SUGGESTED ANSWER:
Yes, because the right of first refusal is
included in the contract signed by the
parties. Only if the lessee failed to exercise
the right of first refusal could the lessor
lawfully sell the subject property to others,
under no less than the same terms and
conditions previously offered to the lessee.
Granting that the mother is not a third
party, this would make her privy to the
agreement of Dux and Iris, aware of the
right of first refusal. This makes the
mother a buyer in bad faith, hence giving
more ground for rescission of the sale to
her (Equatorial Realty, et al. v. Mayfair
Theater, G.R. No. 106063, 21 Nov. 1996).
ALTERNATIVE ANSWER: No, Iris cannot
seek rescission of the sale of the property
to Dux’s mother because the sale is not one
of those rescissible contracts under Art.
1381 of the Civil Code.
(B). Will the alternative prayer for extension of
the lease prosper? (2%) SUGGESTED
ANSWER: No. The contract stipulated that
it may be renewed for another 2-year period
upon mutual agreement of the parties.
Contracts are binding between the parties;
validity or compliance cannot be left to the
will of one of the parties (Art. 1308, Civil
Code).
ALTERNATIVE ANSWER:
It depends. The alternative prayer for the
extension of the lease may prosper if (a)
there is a stipulation in the contract of
sale; (b) Dux's mother is aware of the
existing contract of lease; or (c) the lease is
recorded in the Registry of Property (Art.
1676, Civil Code).
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
OPTION CONTRACT RIGHT OF FIRST
REFUSAL
Principal contract; Accessory; cannot
stands on its own stand on its own
Needs separate No need of separate
consideration consideration
Subject matter and There must be subject
price must be valid matter but price is not
important
Not conditional Conditional
Not subject to specific May be a Subject to
performance specific performance
Remedy is action for Remedies are:
damages 1. Rescission if
buyer is in bad
faith;
2. Damages;
3. Compel sale
under same
terms and
conditions.
Right of First Refusal; Lessee; Effect (1996)
Ubaldo is the owner of a building which has been leased
by Remigio for the past 20 years. Ubaldo has repeatedly
assured Remigio that if he should decide to sell the
building, he will give Remigio the right of first refusal. On
June 30, 1994, Ubaldo informed Remigio that he was
willing to sell the building for P5 Million. The following
day, Remigio sent a letter to Ubaldo offering to buy the
building at P4.5 Million. Ubaldo did not reply. One week
later, Remigio received a letter from Santos informing him
that the building has been sold to him by Ubaldo for P5
Million, and that he will not renew Remigio's lease when it
expires. Remigio filed an action against Ubaldo and
Santos for cancellation of the sale, and to compel Ubaldo
to execute a deed of absolute sale in his favor, based on
his right of first refusal. a) Will the action prosper?
Explain. b) If Ubaldo had given Remigio an option to
purchase the building instead of a right of first refusal, will
your answer be the same? Explain.
SUGGESTED ANSWER:
No, the action to compel Ubaldo to execute the deed of
absolute sale will not prosper. According to Ang Yu v.
Court of Appeals (238 SCRA 602), the right of first refusal
is not based on contract but is predicated on the
provisions of human relations and, therefore, its violation
is predicated on quasi-delict. Secondly, the right of first
refusal implies that the offer of the person in whose favor
that right was given must conform with the same terms
and conditions as those given to the offeree. In this case,
however, Remigio was offering only P4.5 Million instead
of P5 Million.
ALTERNATIVE ANSWER:
No, the action will not prosper. The lessee's right of first
refusal does not go so far as to give him the power to
dictate on the lessor the price at which the latter should
sell his property. Upon the facts given, the lessor had
sufficiently complied with his commitment to give the
lessee a right of first refusal when he offered to sell the
property to the lessee for P5 Million, which was the same
price he got in selling it to Santos. He certainly had the
right to treat the lessee's counter-offer of a lesser amount
as a rejection of his offer to sell at P5 Million. Thus, he
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was free to find another buyer upon receipt of such
unacceptable counter-offer (Art. 1319. NCC).
SUGGESTED ANSWER:
Yes, the answer will be the same. The action will not
prosper because an option must be supported by a
consideration separate and distinct from the purchase
price. In this case there is no separate consideration.
Therefore, the option may be withdrawn by Ubaldo at any
time. (Art. 1324, NCC)
Right of First Refusal; Lessee; Effect (1998)
In a 20-year lease contract over a building, the lessee is
expressly granted a right of first refusal should the lessor
decide to sell both the land and building. However, the
lessor sold the property to a third person who knew about
the lease and in fact agreed to respect it. Consequently,
the lessee brings an action against both the lessor-seller
and the buyer (a) to rescind the sale and (b) to compel
specific performance of his right of first refusal in the
sense that the lessor should be ordered to execute a
deed of absolute sale in favor of the lessee at the same
price. The defendants contend that the plaintiff can
neither seek rescission of the sale nor compel specific
performance of a "mere" right of first refusal. Decide the
case. [5%]
SUGGESTED ANSWER:
The action filed by the lessee, for both rescission of the
offending sale and specific performance of the right of
first refusal which was violated, should prosper. The
ruling in
Equatorial Realty Development, Inc. vs. Mayfair Theater,
Inc. (264 SCRA 483), a case with similar facts, sustains
both rights of action because the buyer in the subsequent
sale knew the existence of right of first refusal, hence in
bad faith.
ANOTHER ANSWER:
The action to rescind the sale and to compel the right to
first refusal will not prosper. (Ang Yu Asuncion vs. CA,
238 SCRA 602). The Court ruled in a unanimous en banc
decision that the right of first refusal is not founded upon
contract but on a quasi-delictual relationship covered by
the principles of human relations and unjust enrichment
(Art. 19, et seq. Civil Code). Hence the only action that
will prosper according to the Supreme Court is an "action
for damages in a proper forum for the purpose."
Art. 1325. Unless it appears otherwise, business
advertisements of things for sale are not definite
offers, but mere invitations to make an offer. (n)
Art. 1326. Advertisements for bidders are simply
invitations to make proposals, and the advertiser is
not bound to accept the highest or lowest bidder,
unless the contrary appears. (n)
2012 Bar Exam Question
70. Which of the following statements is
correct? a) Offers in interrelated contracts are
perfected upon consent. b) Offers in
interrelated contracts require a single
acceptance. c) Business advertisements are
definite offers that require specific acceptance.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
d) Advertisements for Bidders are only
invitations to make proposals and the
advertiser is not bound to accept the
highest/lowest bidder, unless it appears
otherwise.
Art. 1327. The following cannot give consent to
a contract:
(1) Unemancipated minors;
(2) Insane or demented persons, and deaf-
mutes who do not know how to write.
(1263a)
RULES ON CONTRACTS ENTERED INTO BY
MINORS
As a General Rule VOIDABLE.
Exceptions:
1. Where upon reaching the age of majority,
he ratifies the same;
2. They were entered into by the guardians
and appoved by the court of competent
jurisdiction;
3. Contracts for necessities.
4. PD 734 – minors more than 7 years old,
able to read and write may open savings
account.
Extra-Judicial Partition; Fraud (1990)
X was the owner of a 10,000 square meter property. X
married Y and out of their union. A, B and C were born.
After the death of Y, X married Z and they begot as
share allotted by law to the finder since the phrase "by
children, D, E and F. After the death of X, the children of
the first and second marriages executed an extrajudicial
partition of the aforestated property on May 1, 1970. D, E
and F were given a one thousand square meter portion of
the property. They were minors at the time of the
execution of the document. D was 17 years old, E was 14
and F was 12; and they were made to believe by A, B
and C that unless they sign the document they will not get
any share. Z was not present then. In January 1974, D, E
and F filed an action in court to nullify the suit alleging
they discovered the fraud only in 1973.
(a) Can the minority of D, E and F be a basis to nullify the
partition? Explain your answer.
(b) How about fraud? Explain your answer.
SUGGESTED ANSWER:
(a) Yes, minority can be a basis to nullify the partition
because D, E and F were not properly represented by
their parents or guardians at the time they contracted the
extra¬judicial partition. (Articles 1327. 1391, Civil Code).
(b) In the case of fraud, when through insidious words or
machinations of one party the other is induced to enter
into the contract without which he would not have agreed
to, the action still prosper because under Art, 1391 of the
Civil Code, in case of fraud, the action for annulment may
be brought within four years from the discovery of the
fraud
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2012 Bar Exam Question
80. When both parties to the contract are
minors, the contract is: a) voidable b)
rescissible c) void d) unenforceable
2012 Bar Exam Question
72. The following are rescissible contracts,
except: a) Entered into by guardian whenever
ward suffers damage more than ¼ of value of
property. b) Agreed upon in representation of
absentees, if absentee suffers lesion by more
than ¼ of value of property. c) Contracts
where fraud is committed on creditor (accion
pauliana). d) Contracts entered into by
minors.
Art. 1328. Contracts entered into during a lucid
interval are valid. Contracts agreed to in a state of
drunkenness or during a hypnotic spell are
voidable. (n)
Art. 1329. The incapacity declared in Article 1327 is
subject to the modifications determined by law, and
is understood to be without prejudice to special
disqualifications established in the laws. (1264)
DISQUALIFIED TO ENTER INTO CONTRACTS:
1. Those under civil interdiction;
2. Hospitalized lepers;
3. Prodigals;
4. Deaf and dumb who are unable to read and
write;
5. Those who by reason of age, disease,
weak mind and other similar caused,
cannot without outside aid, take care of
themselves and manage their property,
becoming an easy prey for deceit and
exploitation.
INCAPACITY DISQUALIFICATION
Restrains the exercise Restrains the very right
of the right to contract itself
May still enter into
contract though parent, Absolutely disqualified
guardian, or legal
representative
Based upon subjective Based upon public
circumstance of certain policy and morality
person
Voidable void
Art. 1330. A contract where consent is given
through mistake, violence, intimidation, undue
influence, or fraud is voidable. (1265a)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 1331. In order that mistake may invalidate
consent, it should refer to the substance of the thing
which is the object of the contract, or to those
conditions which have principally moved one or
both parties to enter into the contract.
Mistake as to the identity or qualifications of one of
the parties will vitiate consent only when such
identity or qualifications have been the principal
cause of the contract.
A simple mistake of account shall give rise to its
correction. (1266a)
Art. 1332. When one of the parties is unable to
read, or if the contract is in a language not
understood by him, and mistake or fraud is alleged,
the person enforcing the contract must show that
the terms thereof have been fully explained to the
former. (n)
Art. 1333. There is no mistake if the party alleging it
knew the doubt, contingency or risk affecting the
object of the contract. (n)
Art. 1334. Mutual error as to the legal effect of an
agreement when the real purpose of the parties is
frustrated, may vitiate consent. (n)
Art. 1335. There is violence when in order to wrest
consent, serious or irresistible force is employed.
There is intimidation when one of the contracting
parties is compelled by a reasonable and well-
grounded fear of an imminent and grave evil upon
his person or property, or upon the person or
property of his spouse, descendants or ascendants,
to give his consent.
To determine the degree of intimidation, the age,
sex and condition of the person shall be borne in
mind.
A threat to enforce one's claim through competent
authority, if the claim is just or legal, does not vitiate
consent. (1267a)
NOTE: Reluctant consent does not mean vitiated
consent.
Art. 1336. Violence or intimidation shall annul the
obligation, although it may have been employed by
a third person who did not take part in the contract.
(1268)
Art. 1337. There is undue influence when a person
takes improper advantage of his power over the will
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of another, depriving the latter of a reasonable
freedom of choice. The following circumstances
shall be considered: the confidential, family,
spiritual and other relations between the parties, or
the fact that the person alleged to have been unduly
influenced was suffering from mental weakness, or
was ignorant or in financial distress. (n)
Art. 1338. There is fraud when, through insidious
words or machinations of one of the contracting
parties, the other is induced to enter into a contract
which, without them, he would not have agreed to.
(1269)
Art. 1339. Failure to disclose facts, when there is a
duty to reveal them, as when the parties are bound
by confidential relations, constitutes fraud. (n)
Art. 1340. The usual exaggerations in trade, when
the other party had an opportunity to know the
facts, are not in themselves fraudulent. (n)
Art. 1341. A mere expression of an opinion does
not signify fraud, unless made by an expert and the
other party has relied on the former's special
knowledge. (n)
Art. 1342. Misrepresentation by a third person does
not vitiate consent, unless such misrepresentation
has created substantial mistake and the same is
mutual. (n)
Art. 1343. Misrepresentation made in good faith is
not fraudulent but may constitute error. (n)
Art. 1344. In order that fraud may make a contract
voidable, it should be serious and should not have
been employed by both contracting parties.
Incidental fraud only obliges the person employing it
to pay damages. (1270)
Art. 1345. Simulation of a contract may be absolute
or relative. The former takes place when the parties
do not intend to be bound at all; the latter, when the
parties conceal their true agreement. (n)
Art. 1346. An absolutely simulated or fictitious
contract is void. A relative simulation, when it does
not prejudice a third person and is not intended for
any purpose contrary to law, morals, good customs,
public order or public policy binds the parties to
their real agreement. (n)
2012 Bar Exam Question
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
81. When the consent of one of the parties was
vitiated, the contract is: a) voidable b)
rescissible c) void d) unenforceable
2012 Bar Exam Question
83. Consent was given by one in
representation of another but without
authority. The contract is: a) voidable b)
rescissible c) void d) unenforceable
2012 Bar Exam Question
84. Michael Fermin, without the authority of
Pascual Lacas, owner of a car, sold the same
car in the name of Mr. Lacas to Atty. Buko.
The contract between Atty. Buko and Mr.
Lacas is --- a) void because of the absence of
consent from the owner, Mr. Lacas. b) valid
because all of the essential requisites of a
contract are present. c) unenforceable
because Michael Fermin had no authority
but he sold the car in the name of Mr.
Lacas, the owner. d) rescissible because the
contract caused lesion to Atty. Buko.
SECTION 2. - Object of Contracts
Art. 1347. All things which are not outside the
commerce of men, including future things, may be
the object of a contract. All rights which are not
intransmissible may also be the object of contracts.
No contract may be entered into upon future
inheritance except in cases expressly authorized by
law.
All services which are not contrary to law, morals,
good customs, public order or public policy may
likewise be the object of a contract. (1271a)
2011 Bar Exam Question
(3) Can future inheritance be the subject of a
contract of sale? (A) No, since it will put the
predecessor at the risk of harm from a
tempted buyer, contrary to public policy. (B)
Yes, since the death of the decedent is certain
to occur. (C) No, since the seller owns no
inheritance while his predecessor lives. (D)
Yes, but on the condition that the amount of
the inheritance can only be ascertained after
the obligations of the estate have been paid.
Art. 1348. Impossible things or services cannot be
the object of contracts. (1272)
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Art. 1349. The object of every contract must be SECTION 3. - Cause of Contracts
determinate as to its kind. The fact that the quantity
is not determinate shall not be an obstacle to the
existence of the contract, provided it is possible to CAUSA (CONSIDERATION)
determine the same, without the need of a new Is the immediate, direct and most proximate reason
contract between the parties. (1273) why the parties enter into a contract.

Consideration; Validity (2000) Requisites:

Lolita was employed in a finance company. Because she 1. It must exist;
could not account for the funds entrusted to her, she was 2. It must be true;
charged with estafa and ordered arrested. In order to 3. It must be licit.
secure her release from jail, her parents executed a
promissory note to pay the finance company the amount
CAUSE MOTIVE
allegedly misappropriated by their daughter. The finance
company then executed an affidavit of desistance which Direct and most Indirect or remote
led to the withdrawal of the information against Lolita and proximate reason of a reasons
her release from jail. The parents failed to comply with contract
their promissory note and the finance company sued Objective and juridical Psychological and
them for specific performance. Will the action prosper or reason of contract purely personal reason
not? (3%) Cause is always same Motive differs for each
SUGGESTED ANSWER: for each contracting contracting party
The action will prosper. The promissory note executed by
parties
Lolita's parents is valid and binding, the consideration
being the extinguishment of Lolita's civil liability and not Legality of illegality of Legality or illegality of
the stifling of the criminal prosecution. the cause affects the motive does not affect
ALTERNATIVE ANSWER: existence or validity of the existence or validity
The action will not prosper because the consideration for the contract of contract
the promissory note was the non-prosecution of the
criminal case for estafa. This cannot be done anymore
because the information has already been filed in court Note: When the contract entered into is motivated
and to do it is illegal. That the consideration for the
by an intent to violate the constitution, motive may
promissory note is the stifling of the criminal prosecution
is evident from the execution by the finance company of nullify the contract executed based upon such
the affidavit of desistance immediately after the execution motive.
by Lolita's parents of the promissory note. The
consideration being illegal, the promissory note is invalid When the causa is conditioned upon the motive; the
and may not be enforced by court action. line between motive and causa disappears. Thus,
when the causa is conditioned upon an immoral
2012 Bar Exam Question and illegal motive, the illegal motive may annul the
73. The following are the requisites before a obligation predicated on such immoral/illegal
contract entered into in fraud of creditors may motive.
be rescinded, except: a) There must be
credited existing prior to the celebration of the
contract. b) There must be fraud, or at least, Art. 1350. In onerous contracts the cause is
the intent to commit fraud to the prejudice of understood to be, for each contracting party, the
the creditor seeking rescission. c) The creditor prestation or promise of a thing or service by the
cannot in any legal manner collect his credit other; in remuneratory ones, the service or benefit
(subsidiary character of rescission) d) The which is remunerated; and in contracts of pure
object of the contract must be legally in the beneficence, the mere liberality of the benefactor.
possession of a 3rd person in good faith. (1274)

2012 Bar Exam Question
98. Which phrase most accurately completes
the statement – If at the time the contract of
sale is perfected, the thing which is the object
of the contract has been entirely lost: a) the
buyer bears the risk of loss. b) the contract
shall be without any effect. c) the seller
bears the risk of loss. d) the buyer may
withdraw from the contract.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 1351. The particular motives of the parties in
entering into a contract are different from the cause
thereof. (n)
Art. 1352. Contracts without cause, or with unlawful
cause, produce no effect whatever. The cause is
unlawful if it is contrary to law, morals, good
customs, public order or public policy. (1275a)
Art. 1353. The statement of a false cause in
contracts shall render them void, if it should not be
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proved that they were founded upon another cause
which is true and lawful. (1276)
Art. 1354. Although the cause is not stated in the
contract, it is presumed that it exists and is lawful,
unless the debtor proves the contrary. (1277)
Art. 1355. Except in cases specified by law, lesion
or inadequacy of cause shall not invalidate a
contract, unless there has been fraud, mistake or
undue influence. (n)
2012 Bar Exam Question
69. An offer becomes ineffective on any of the
following grounds, except: a) Death, civil
interdiction, insanity/insolvency of either
party before acceptance is conveyed.
b) Acceptance of the offer by the offeree.
c) Qualified/conditional acceptance of the
offer, which becomes counter-offer. d) Subject
matter becomes illegal/impossible before
acceptance is communicated.
2012 Bar Exam Question
74. The following are the characteristics of a
voidable contract, except: a) Effective until set
aside. b) May be assailed/attacked only in an
action for that purpose. c) Can be confirmed or
ratified. d) Can be assailed only by either
party.
2012 Bar Exam Question
88. Which of the following statements is
wrong? a) Creditors are protected in cases of
contracts intended to defraud them. b)
Contracts take effect only between the parties,
their assign and heirs, except in case where
the rights and obligations arising from the
contract are not transmissible by their nature,
or by stipulation or by provision of law. c) If a
contract should contain some stipulation in
favor of a third person, he may demand its
fulfillment provided he communicated his
acceptance to the obligor before its revocation.
d) In contracts creating real rights, third
persons who come into possession of the
object of the contract are not bound
thereby.
CHAPTER 3
FORM OF CONTRACTS
Art. 1356. Contracts shall be obligatory, in whatever
form they may have been entered into, provided all
the essential requisites for their validity are present.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
However, when the law requires that a contract be
in some form in order that it may be valid or
enforceable, or that a contract be proved in a
certain way, that requirement is absolute and
indispensable. In such cases, the right of the parties
stated in the following article cannot be exercised.
(1278a)
Art. 1357. If the law requires a document or other
special form, as in the acts and contracts
enumerated in the following article, the contracting
parties may compel each other to observe that
form, once the contract has been perfected. This
right may be exercised simultaneously with the
action upon the contract. (1279a)
Art. 1358. The following must appear in a public
document:
(1) Acts and contracts which have for their
object the creation, transmission,
modification or extinguishment of real rights
over immovable property; sales of real
property or of an interest therein a
governed by Articles 1403, No. 2, and
1405;
(2) The cession, repudiation or renunciation
of hereditary rights or of those of the
conjugal partnership of gains;
(3) The power to administer property, or
any other power which has for its object an
act appearing or which should appear in a
public document, or should prejudice a third
person;
(4) The cession of actions or rights
proceeding from an act appearing in a
public document.
All other contracts where the amount involved
exceeds five hundred pesos must appear in writing,
even a private one. But sales of goods, chattels or
things in action are governed by Articles, 1403, No.
2 and 1405. (1280a)
NOTE:
RA 8792 (E- COMMERCE ACT) –Formal
requirements to make contracts effective as against
3rd persons and to establish the existence of a
contract are deemed complied with provided that
the electronic document is unaltered and can be
authenticated as to be useable for future reference.
Mortgage; Public or Private Instrument
(2013)
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No.VI. Lito obtained a loan of P1,000,000 from
Ferdie, payable within one year. To secure
payment, Lito executed a chattel mortgage on
a Toyota Avanza and a real estate mortgage on
a 200-square meter piece of property. (A)
Would it be legally significant - from the point
of view of validity and enforceability - if the
loan and the mortgages were in public or
private instruments? (6%) SUGGESTED
ANSWER: From the point of view of validity
and enforceability, there would be legal
significance if the mortgage was in a public
or private instrument. As for the loan,
there is no legal significance except of
interest were charged on the loan, in which
case, the charging of interest must be in
writing. A contract of loan is a real contract
and is perfected upon delivery of the object
of the obligation (Art 1934, Civil Code).
Thus, a contract of loan is valid and
enforceable even if it is neither in a private
nor in a public document. As a rule,
contracts shall be obligatory in whatever
form they may have been entered into
provided all the essential requisites for
their validity are present. With regards to
its enforceability, a contact of loan is not
among those enumerated under Art. 1403
(2) of the Civil Code, which are covered by
the Statute of Frauds.
It is important to note that under Art. 1358
of the Civil Code, all the other contracts
where the amount involved exceeds Five
Hundred pesos (P5000.00) must appear in
writing, even in private one. However, the
requirement is not for validity of the
contract, but only for its greater efficacy.
With regard to the chattel mortgage, Art.
1508, the Chattel Mortgage Law, requires
an affidavit of good faith stating that the
chattel mortgage is supposed to stand as
security of the loan; thus, for the validity of
the chattel mortgage, it must be in a public
document and recorded in the Chattel
Mortgage Register in the Register of Deeds.
A real estate mortgage, under the
provisions of Art. 2125 of the Civil Code,
requires that in order that a mortgage may
be validly constituted the document in
which it appears be recorded. If the
instrument is not recorded, the mortgage is
nevertheless valid and binding between the
parties. Hence, for validity of both chattel
and real estate mortgages, they must
appear in a public instrument. But the
purpose of enforceability, it is submitted
that the form of the contract, whether in a
public or private document, would be
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
immaterial (Mobil Oil v. Diocaresa, 29 SCRA
656, 1969).
Also, under Art 1358, acts and contracts
which have for their object the creation or
transmission of real rights over immovable
property must be in a public document for
greater efficacy and a real estate mortgage
is a real right over immovable property.
2012 Bar Exam Question
71. The following are solemn contracts
(Contracts which must appear in writing),
except: a) Donations of real estate or of
movables if the value exceeds P 5,000.00. b)
Stipulation to pay interest in loans. c) Sale of
land through an agent (authority must be in
writing). d) Construction contract of a
building.
CHAPTER 4
REFORMATION OF INSTRUMENTS (n)
Art. 1359. When, there having been a meeting of
the minds of the parties to a contract, their true
intention is not expressed in the instrument
purporting to embody the agreement, by reason of
mistake, fraud, inequitable conduct or accident, one
of the parties may ask for the reformation of the
instrument to the end that such true intention may
be expressed.
If mistake, fraud, inequitable conduct, or accident
has prevented a meeting of the minds of the
parties, the proper remedy is not reformation of the
instrument but annulment of the contract.
Art. 1360. The principles of the general law on the
reformation of instruments are hereby adopted
insofar as they are not in conflict with the provisions
of this Code.
Art. 1361. When a mutual mistake of the parties
causes the failure of the instrument to disclose their
real agreement, said instrument may be reformed.
Art. 1362. If one party was mistaken and the other
acted fraudulently or inequitably in such a way that
the instrument does not show their true intention,
the former may ask for the reformation of the
instrument.
Art. 1363. When one party was mistaken and the
other knew or believed that the instrument did not
state their real agreement, but concealed that fact
from the former, the instrument may be reformed.
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Art. 1364. When through the ignorance, lack of skill,
negligence or bad faith on the part of the person
drafting the instrument or of the clerk or typist, the
instrument does not express the true intention of
the parties, the courts may order that the instrument
be reformed.
Art. 1365. If two parties agree upon the mortgage or
pledge of real or personal property, but the
instrument states that the property is sold
absolutely or with a right of repurchase, reformation
of the instrument is proper.
Art. 1366. There shall be no reformation in the
following cases:
(1) Simple donations inter vivos wherein no
condition is imposed;
(2) Wills;
(3) When the real agreement is void.
Art. 1367. When one of the parties has brought an
action to enforce the instrument, he cannot
subsequently ask for its reformation.
Art. 1368. Reformation may be ordered at the
instance of either party or his successors in interest,
if the mistake was mutual; otherwise, upon petition
of the injured party, or his heirs and assigns.
Art. 1369. The procedure for the reformation of
instrument shall be governed by rules of court to be
promulgated by the Supreme Court.
CHAPTER 5
INTERPRETATION OF CONTRACTS
Art. 1370. If the terms of a contract are clear and
leave no doubt upon the intention of the contracting
parties, the literal meaning of its stipulations shall
control.
If the words appear to be contrary to the evident
intention of the parties, the latter shall prevail over
the former. (1281)
Art. 1371. In order to judge the intention of the
contracting parties, their contemporaneous and
subsequent acts shall be principally considered.
(1282)
Art. 1372. However general the terms of a contract
may be, they shall not be understood to
comprehend things that are distinct and cases that
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
are different from those upon which the parties
intended to agree. (1283)
Art. 1373. If some stipulation of any contract should
admit of several meanings, it shall be understood
as bearing that import which is most adequate to
render it effectual. (1284)
Art. 1374. The various stipulations of a contract
shall be interpreted together, attributing to the
doubtful ones that sense which may result from all
of them taken jointly. (1285)
Art. 1375. Words which may have different
significations shall be understood in that which is
most in keeping with the nature and object of the
contract. (1286)
Art. 1376. The usage or custom of the place shall
be borne in mind in the interpretation of the
ambiguities of a contract, and shall fill the omission
of stipulations which are ordinarily established.
(1287)
Art. 1377. The interpretation of obscure words or
stipulations in a contract shall not favor the party
who caused the obscurity. (1288)
Art. 1378. When it is absolutely impossible to settle
doubts by the rules established in the preceding
articles, and the doubts refer to incidental
circumstances of a gratuitous contract, the least
transmission of rights and interests shall prevail. If
the contract is onerous, the doubt shall be settled in
favor of the greatest reciprocity of interests.
If the doubts are cast upon the principal object of
the contract in such a way that it cannot be known
what may have been the intention or will of the
parties, the contract shall be null and void. (1289)
Art. 1379. The principles of interpretation stated in
Rule 123 of the Rules of Court shall likewise be
observed in the construction of contracts. (n)
CHAPTER 6
RESCISSIBLE CONTRACTS
Art. 1380. Contracts validly agreed upon may be
rescinded in the cases established by law. (1290)
RESCISSIBLE CONTRACTS
Those which have caused a particular economic
damage either to one of the parties or to a 3 rd
person and which may be set aside even if valid. It
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may be set aside in whole or in part, to the extent of
the damaged caused.
Art. 1381. The following contracts are
rescissible:
(1) Those which are entered into by
guardians whenever the wards whom they
represent suffer lesion by more than one-
fourth of the value of the things which are
the object thereof;
(2) Those agreed upon in representation of
absentees, if the latter suffer the lesion
stated in the preceding number;
(3) Those undertaken in fraud of creditors
when the latter cannot in any other manner
collect the claims due them;
(4) Those which refer to things under
litigation if they have been entered into by
the defendant without the knowledge and
approval of the litigants or of competent
judicial authority;
(5) All other contracts specially declared by
law to be subject to rescission. (1291a)
OTHER CONTRACTS DECLARED BY LAW TO
BE RESCISSIBLE:
1. Arts. 1191
2. 1526,
3. 1534,
4. 1539,
5. 1542,
6. 1556,
7. 1560,
8. 1567, and
9. 1569, NCC.
Art. 1382. Payments made in a state of insolvency
for obligations to whose fulfillment the debtor could
not be compelled at the time they were effected, are
also rescissible. (1292)
Requisites:
1. Plaintiff has no other means to obtain
reparation;
2. Plaintiff must be able to return what he may
be obliged to return due to rescission;
3. The things must not have passed to 3 rd
persons who acted in good faith;
4. It must be made within the prescribed
period of 4 years.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 1383. The action for rescission is subsidiary; it
cannot be instituted except when the party suffering
damage has no other legal means to obtain
reparation for the same. (1294)
Art. 1384. Rescission shall be only to the extent
necessary to cover the damages caused. (n)
Art. 1385. Rescission creates the obligation to
return the things which were the object of the
contract, together with their fruits, and the price with
its interest; consequently, it can be carried out only
when he who demands rescission can return
whatever he may be obliged to restore.
Neither shall rescission take place when the things
which are the object of the contract are legally in
the possession of third persons who did not act in
bad faith.
In this case, indemnity for damages may be
demanded from the person causing the loss. (1295)
Art. 1386. Rescission referred to in Nos. 1 and 2 of
Article 1381 shall not take place with respect to
contracts approved by the courts. (1296a)
Art. 1387. All contracts by virtue of which the debtor
alienates property by gratuitous title are presumed
to have been entered into in fraud of creditors,
when the donor did not reserve sufficient property
to pay all debts contracted before the donation.
Alienations by onerous title are also presumed
fraudulent when made by persons against whom
some judgment has been issued. The decision or
attachment need not refer to the property alienated,
and need not have been obtained by the party
seeking the rescission.
In addition to these presumptions, the design to
defraud creditors may be proved in any other
manner recognized by the law of evidence. (1297a)
Art. 1388. Whoever acquires in bad faith the things
alienated in fraud of creditors, shall indemnify the
latter for damages suffered by them on account of
the alienation, whenever, due to any cause, it
should be impossible for him to return them.
If there are two or more alienations, the first
acquirer shall be liable first, and so on successively.
(1298a)
Art. 1389. The action to claim rescission must be
commenced within four years.
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For persons under guardianship and for absentees, renders the contract (A) Rescissible. (B)
the period of four years shall not begin until the Unenforceable. (C) Voidable. (D) Void.
termination of the former's incapacity, or until the
domicile of the latter is known. (1299)

Inexistent Contracts vs. Annullable Contracts (2004)

Distinguish briefly but clearly between Inexistent
RESCISSION IN ART. RESCISSION IN ART contracts and annullable contracts.
1191 1381 SUGGESTED ANSWER:
It is a principal action It is a subsidiary remedy INEXISTENT CONTRACTS are considered as not having
retaliatory in character been entered into and, therefore, void ob initio. They do
Only one ground; non- not create any obligation and cannot be ratified or
performance of one’s There are five grounds validated, as there is no agreement to ratify or validate.
obligation or what is to rescind On the other hand, ANNULLABLE or VOIDABLE
incumbent upon him CONTRACTS are valid until invalidated by the court but
may be ratified. In inexistent contracts, one or more
Only a party to the Even 3rd person who is requisites of a valid contract are absent. In anullable
contract may demand prejudiced by the contracts, all the elements of a contract are present
fulfillment or seek contract may demand except that the consent of one of the contracting parties
rescission of the the rescission of the was vitiated or one of them has no capacity to give
contract contract consent.
Applies only to Applies to both
reciprocal obligations unilateral and reciprocal 2011 Bar Exam Question
obligations (19) When bilateral contracts are vitiated with
Court may fix a period Court cannot grant vices of consent, they are rendered (A)
or grant extension of extension of time for rescissible. (B) void. (C) unenforceable. (D)
time for the fulfillment of fulfillment of the voidable.
the obligation obligation
Its purpose is to seek
Its purpose is to cancel reparation for damage CHARACTERISTICS OF VOIDABLE CONTRACT
the contract or injury caused, thus 1. Effective until set aside;
allowing partial 2. May be assailed or attacked only in action
rescission of the for that purpose (only direct attack);
contract 3. Can be confirmed (confirmation is the
proper term for curing the defect of a
voidable contract – not ratification);
4. Can be assailed only by the party whose
consent was defective or his heirs or
assigns.
CHAPTER 7
VOIDABLE CONTRACTS WHAT CONTRACTS ARE VOIDABLE:
1. Between minors;
Art. 1390. The following contracts are voidable or 2. Insane, unless acted in lucid interval;
annullable, even though there may have been no 3. Deaf-mute who can’t read or write;
damage to the contracting parties: 4. Persons specifically disqualified by law/s
like those suffering from civil interdiction;
(1) Those where one of the parties is 5. Entered in state of drunkenness;
incapable of giving consent to a contract; 6. In state of hypnotic spell.

(2) Those where the consent is vitiated by

mistake, violence, intimidation, undue
influence or fraud.
These contracts are binding, unless they are
annulled by a proper action in court. They are
susceptible of ratification. (n)
2011 Bar Exam
(90) The presence of a vice of consent vitiates
the consent of a party in a contract and this
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
MISTAKE – false belief into something.
Requisites:
1. Refers to the subject thing which is the
object of the contract;
2. Refers to the nature of the contract;
3. Refers to the principal consideration of
the contract;
4. Error as to person – when it is the
principal consideration of the contract;
5. Error as to legal effect – when mistake
is mutual and frustrates the real
purpose of the parties.
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VIOLENCE
Serious irresistible force is employed to wrest
consent.
INTIMIDATION
One party is compelled by a reasonable and well-
grounded fear of an imminent and grave danger
upon person and property of himself, spouse,
ascendants or descendants (moral coercion).
UNDUE INFLUENCE
Person takes improper advantage of his power over
will of another depriving the latter of reasonable
freedom of choice.
DOCTRINE OF RELUCTANT CONSENT
It provides that a contract is still valid even if one of
the parties entered it against his wishes or even
against his better judgment. Contracts are also valid
even though they are entered into by one of the
parties without hope of advantage or profit
(Martinez vs. Hongkong and Shanghai Bank, 12
Phil. 252).
FRAUD
Thru insidious words or machinations of contracting
parties, other is induced to enter into contract
without which he will not enter (dolo causante).
KINDS OF FRAUD in the performance of
obligations:
1. Causal Fraud (dolo Causante) –
deception of serious character without
which the other party would not have
entered into; contract is VOIDABLE.
2. Incidental Fraud (dolo incidente) –
deception which are not serious and
without which the other party would still
have entered into the contract; holds guilty
party liable for DAMAGES.
3. Tolerated Fraud – includes minimizing the
defects of the thing, exaggeration of its
good qualities and giving it qualities it does
not have; lawful misrepresentation.
Example: TV commercials.
NOTE: If fraud is used to secure consent; the
contract is VOIDABLE. However, if it is used to
secure signature; the contract is VOID and
INEXISTENT
Art. 1391. The action for annulment shall be
brought within four years.
This period shall begin:
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
In cases of intimidation, violence or undue
influence, from the time the defect of the
consent ceases.
In case of mistake or fraud, from the time of
the discovery of the same.
And when the action refers to contracts entered into
by minors or other incapacitated persons, from the
time the guardianship ceases. (1301a)
NOTE: Discovery of fraud must be reckoned to
have taken place from the time the document is
registered in the register of deeds. Registration
constitutes constructive notice to the whole world
(Carantes vs. CA, 76 SCRA 514).
Extra-Judicial Partition; Fraud (1990)
X was the owner of a 10,000 square meter property. X
married Y and out of their union. A, B and C were born.
After the death of Y, X married Z and they begot as
share allotted by law to the finder since the phrase "by
children, D, E and F. After the death of X, the children of
the first and second marriages executed an extrajudicial
partition of the aforestated property on May 1, 1970. D, E
and F were given a one thousand square meter portion of
the property. They were minors at the time of the
execution of the document. D was 17 years old, E was 14
and F was 12; and they were made to believe by A, B
and C that unless they sign the document they will not get
any share. Z was not present then. In January 1974, D, E
and F filed an action in court to nullify the suit alleging
they discovered the fraud only in 1973.
(a) Can the minority of D, E and F be a basis to nullify the
partition? Explain your answer.
(b) How about fraud? Explain your answer.
SUGGESTED ANSWER:
(a) Yes, minority can be a basis to nullify the partition
because D, E and F were not properly represented by
their parents or guardians at the time they contracted the
extra¬judicial partition. (Articles 1327. 1391, Civil Code).
(b) In the case of fraud, when through insidious words or
machinations of one party the other is induced to enter
into the contract without which he would not have agreed
to, the action still prosper because under Art, 1391 of the
Civil Code, in case of fraud, the action for annulment may
be brought within four years from the discovery of the
fraud
Art. 1392. Ratification extinguishes the action to
annul a voidable contract. (1309a)
Art. 1393. Ratification may be effected expressly or
tacitly. It is understood that there is a tacit
ratification if, with knowledge of the reason which
renders the contract voidable and such reason
having ceased, the person who has a right to
invoke it should execute an act which necessarily
implies an intention to waive his right. (1311a)
Art. 1394. Ratification may be effected by the
guardian of the incapacitated person. (n)
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Art. 1395. Ratification does not require the
conformity of the contracting party who has no right
to bring the action for annulment. (1312)
Art. 1396. Ratification cleanses the contract from all
its defects from the moment it was constituted.
(1313)
2012 Bar Exam Question
87. Aligada orally offered to sell his two-
hectare rice land to Balane for P 10Million.
The offer was orally accepted. By agreement,
the land was to be delivered (through
execution of a notarized Deed of Sale) and the
price was to be paid exactly one-month from
their oral agreement. Which statement is most
accurate? a) If Aligada refuses to deliver the
land on the agreed date despite payment by
Balane, the latter may not successfully sue
Aligada because the contract is oral.
b) If Aligada refused to deliver the land, Balane
may successfully sue for fulfillment of the
obligation even if he has not tendered payment
of the purchase price. c) The contract between
the parties is rescissible. d) The contract
between the parties is subject to
ratification by the parties.
Art. 1397. The action for the annulment of contracts
may be instituted by all who are thereby obliged
principally or subsidiarily. However, persons who
are capable cannot allege the incapacity of those
with whom they contracted; nor can those who
exerted intimidation, violence, or undue influence,
or employed fraud, or caused mistake base their
action upon these flaws of the contract. (1302a)
Note: A party not obliged principally or subsidiarily
may ask for annulment if he can show that he is
prejudiced by the contract.
Donations; Condition; Capacity to Sue (1996)
Sometime in 1955, Tomas donated a parcel of land to his
stepdaughter Irene, subject to the condition that she may
not sell, transfer or cede the same for twenty years.
Shortly thereafter, he died. In 1965, because she needed
money for medical expenses, Irene sold the land to
Conrado. The following year, Irene died, leaving as her
sole heir a son by the name of Armando. When Armando
learned that the land which he expected to inherit had
been sold by Irene to Conrado, he filed an action against
the latter for annulment of the sale, on the ground that it
violated the restriction imposed by Tomas. Conrado filed
a motion to dismiss, on the ground that Armando did not
have the legal capacity to sue. If you were the Judge,
how will you rule on this motion to dismiss? Explain.
SUGGESTED ANSWER:
As judge, I will grant the motion to dismiss. Armando has
no personality to bring the action for annulment of the
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
sale to Conrado. Only an aggrieved party to the contract
may bring the action for annulment thereof (Art. 1397.
NCC). While Armando is heir and successor-in-interest of
his mother (Art. 1311, NCC), he [standing in place of his
mother) has no personality to annul the contract. Both are
not aggrieved parties on account of their own violation of
the condition of, or restriction on, their ownership
imposed by the donation. Only the donor or his heirs
would have the personality to bring an action to revoke a
donation for violation of a condition thereof or a restriction
thereon. (Garrido u. CA, 236 SCRA 450). Consequently,
while the donor or his heirs were not parties to the sale,
they have the right to annul the contract of sale because
their rights are prejudiced by one of the contracting
parties thereof [DBP v. CA, 96 SCRA 342; Teves vs.
PHHC. 23 SCRA 114]. Since Armando is neither the
donor nor heir of the donor, he has no personality to bring
the action for annulment.
ALTERNATIVE ANSWER:
As judge, I will grant the motion to dismiss. Compliance
with a condition imposed by a donor gives rise to an
action to revoke the donation under Art. 764, NCC.
However, the right of action belongs to the donor. Is
transmissible to his heirs, and may be exercised against
the donee's heirs. Since Armando is an heir of the donee,
not of the donor, he has no legal capacity to sue for
revocation of the donation. Although he is not seeking
such revocation but an annulment of the sale which his
mother, the donee, had executed in violation of the
condition imposed by the donor, an action for annulment
of a contract may be brought only by those who are
principally or subsidiarily obliged thereby (Art. 1397,
NCC). As an exception to the rule, it has been held that a
person not so obliged may nevertheless ask for
annulment if he is prejudiced in his rights regarding one
of the contracting parties (DBP us. CA. 96 SCRA 342 and
other cases) and can show the detriment which would
result to him from the contract in which he had no
intervention, (Teves vs. PHHC, 23 SCRA 1141).
Such detriment or prejudice cannot be shown by
Armando. As a forced heir, Armando's interest in the
property was, at best, a mere expectancy. The sale of the
land by his mother did not impair any vested right. The
fact remains that the premature sale made by his mother
(premature because only half of the period of the ban had
elapsed) was not voidable at all, none of the vices of
consent under Art. 139 of the NCC being present. Hence,
the motion to dismiss should be granted.
Art. 1398. An obligation having been annulled, the
contracting parties shall restore to each other the
things which have been the subject matter of the
contract, with their fruits, and the price with its
interest, except in cases provided by law.
In obligations to render service, the value thereof
shall be the basis for damages. (1303a)
Art. 1399. When the defect of the contract consists
in the incapacity of one of the parties, the
incapacitated person is not obliged to make any
restitution except insofar as he has been benefited
by the thing or price received by him. (1304)
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Art. 1400. Whenever the person obliged by the
decree of annulment to return the thing can not do
so because it has been lost through his fault, he
shall return the fruits received and the value of the
thing at the time of the loss, with interest from the
same date. (1307a)
Art. 1401. The action for annulment of contracts
shall be extinguished when the thing which is the
object thereof is lost through the fraud or fault of the
person who has a right to institute the proceedings.
If the right of action is based upon the incapacity of
any one of the contracting parties, the loss of the
thing shall not be an obstacle to the success of the
action, unless said loss took place through the fraud
or fault of the plaintiff. (1314a)
Art. 1402. As long as one of the contracting parties
does not restore what in virtue of the decree of
annulment he is bound to return, the other cannot
be compelled to comply with what is incumbent
upon him. (1308)
CHAPTER 8
UNENFORCEABLE CONTRACTS (n)
Art. 1403. The following contracts are
unenforceable, unless they are ratified:
(1) Those entered into in the name of
another person by one who has been given
no authority or legal representation, or who
has acted beyond his powers;
(2) Those that do not comply with the
Statute of Frauds as set forth in this
number. In the following cases an
agreement hereafter made shall be
unenforceable by action, unless the same,
or some note or memorandum, thereof, be
in writing, and subscribed by the party
charged, or by his agent; evidence,
therefore, of the agreement cannot be
received without the writing, or a secondary
evidence of its contents:
(a) An agreement that by its terms
is not to be performed within a year
from the making thereof;
(b) A special promise to answer for
the debt, default, or miscarriage of
another;
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(c) An agreement made in
consideration of marriage, other
than a mutual promise to marry;
(d) An agreement for the sale of
goods, chattels or things in action,
at a price not less than five
hundred pesos, unless the buyer
accept and receive part of such
goods and chattels, or the
evidences, or some of them, of
such things in action or pay at the
time some part of the purchase
money; but when a sale is made by
auction and entry is made by the
auctioneer in his sales book, at the
time of the sale, of the amount and
kind of property sold, terms of sale,
price, names of the purchasers and
person on whose account the sale
is made, it is a sufficient
memorandum;
(e) An agreement of the leasing for
a longer period than one year, or
for the sale of real property or of an
interest therein;
(f) A representation as to the credit
of a third person.
(3) Those where both parties are incapable
of giving consent to a contract.
Note: Oral agreement as to boundaries is
valid and not covered by the Statute of
Frauds.
Guaranty (2009) No.I. TRUE or FALSE.
Answer TRUE if the statement is true, or
FALSE if the statement is false. Explain your
answer in not more than two (2) sentences.
(D). An oral promise of guaranty is valid and
binding. (1%) SUGGESTED ANSWER : FALSE.
An oral contract of guaranty, being a
special promise to answer for the debt of
another, is unenforceable unless in writing
(Article 1403 [2] b, NCC ). ALTERNATIVE
ANSWER:
TRUE. An oral promise of guaranty is valid
and binding. While the contract is valid,
however ,it is unenforceable because it is
not writing . Being a special promise
answer for the debt, or miscarriage of
another, the Statute of Frauds requires it
to be in writing to be enforceable ( Article
1403 [2] b, NCC).The validity of the
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contract should be distinguished from its
enforceability .
2013 Bar Exam Question
X. Arlene owns a row of apartment houses in
Kamuning, Quezon City. She agreed to lease
Apartment No. 1 to Janet for a period of 18
months at the rate of P10,000 per month. The
lease was not covered by any contract. Janet
promptly gave Arlene two (2) months deposit
and 18 checks covering the rental payment for
18 months. This show of good faith prompted
Arlene to promise Janet that should Arlene
decide to sell the property, she would give
Janet the right of first refusal. X. (1) Not long
after Janet moved in, she received news that
her application for a Master of Laws
scholarship at King's College in London had
been approved. Since her acceptance of the
scholarship entailed a transfer of residence,
Janet asked Arlene to return the advance
rental payments she made. Arlene refused,
prompting Janet to file an action to recover the
payments. Arlene filed a motion to dismiss,
claiming that the lease on which the action is
based, is unenforceable. If you were the judge,
would you grant Arlene's motion? (1%)
(A) Yes, I will grant the motion because the
lease contract between Arlene and Janet was
not in writing, hence, Janet may not enforce
any right arising from the same contract. (B)
No, I will not grant the motion because to
allow Arlene to retain the advance payments
would amount to unjust enrichment. (C) Yes, I
will grant the motion because the action for
recovery is premature; Janet should first
secure a judicial rescission of the contract of
lease. (D) No. I will not grant the motion
because the cause of action does not seek
to enforce any right under the contract of
lease. SUGGESTED ANSWER: (D) No. I will
not grant the motion because the cause of
action does not seek to enforce any right
under the contract of lease. Janet is not
asking for the continued use of the leased
premises. Moreover, the contract is aside
the ambit of the Statute of Frauds as the
same has already been partially performed.
X. (2)Assume that Janet decided not to accept
the scholarship and continued leasing
Apartment No. 1. Midway through
the lease period, Arlene decided to sell
Apartment No. 1 to Jun in breach of her
promise to Janet to grant her the right of first
refusal. Thus, Janet filed an action seeking the
recognition of her right of first refusal, the
payment of damages for the violation of this
right, and the rescission of the sale between
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Arlene and Jun. Is Janet's action meritorious?
(1%) (A) Yes, under the Civil Code, a promise
to buy and sell a determinate thing is
reciprocally demandable. (B) No, the promise
to buy and sell a determinate thing was not
supported by a consideration. (C) Yes, Janet's
right of first refusal was clearly violated when
the property was not offered for sale to her
before it was sold to Jun. (D) No, a right of
first refusal involves an interest over real
property that must be embodied in a
written contract to be enforceable. (E) None
of the above. SUGGESTED ANSWER: (D) No, a
right of first refusal involves an interest
over real property that must be embodied
in a written contract to be enforceable.
The right of first refusal involves a transfer
of interest in the real property. As such, it
is covered by the Statute of Frauds under
Art 1403 (2)(e) of the Civil Code. It must be
in writing in order to be enforceable.
Art. 1404. Unauthorized contracts are governed by
Article 1317 and the principles of agency in Title X
of this Book.
Art. 1405. Contracts infringing the Statute of
Frauds, referred to in No. 2 of Article 1403, are
ratified by the failure to object to the presentation of
oral evidence to prove the same, or by the
acceptance of benefit under them.
Art. 1406. When a contract is enforceable under the
Statute of Frauds, and a public document is
necessary for its registration in the Registry of
Deeds, the parties may avail themselves of the right
under Article 1357.
Art. 1407. In a contract where both parties are
incapable of giving consent, express or implied
ratification by the parent, or guardian, as the case
may be, of one of the contracting parties shall give
the contract the same effect as if only one of them
were incapacitated.
If ratification is made by the parents or guardians,
as the case may be, of both contracting parties, the
contract shall be validated from the inception.
Art. 1408. Unenforceable contracts cannot be
assailed by third persons.
CHAPTER 9
VOID AND INEXISTENT CONTRACTS
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Art. 1409. The following contracts are inexistent and
void from the beginning:
(1) Those whose cause, object or purpose
is contrary to law, morals, good customs,
public order or public policy;
(2) Those which are absolutely simulated or
fictitious;
(3) Those whose cause or object did not
exist at the time of the transaction;
(4) Those whose object is outside the
commerce of men;
(5) Those which contemplate an impossible
service;
(6) Those where the intention of the parties
relative to the principal object of the
contract cannot be ascertained;
(7) Those expressly prohibited or declared
void by law.
These contracts cannot be ratified. Neither can the
right to set up the defense of illegality be waived.
VOID CONTRACTS (some provisions of the
NCC)
1. Pactum commissorium – arts. 2088, 2130,
1390.
2. Pactum de non alienando – art. 2130.
3. Pactum leonina – art. 1799.
Art. 1410. The action or defense for the declaration
of the inexistence of a contract does not prescribe.
Art. 1411. When the nullity proceeds from the
illegality of the cause or object of the contract, and
the act constitutes a criminal offense, both parties
being in pari delicto, they shall have no action
against each other, and both shall be prosecuted.
Moreover, the provisions of the Penal Code relative
to the disposal of effects or instruments of a crime
shall be applicable to the things or the price of the
contract.
This rule shall be applicable when only one of the
parties is guilty; but the innocent one may claim
what he has given, and shall not be bound to
comply with his promise. (1305)
Art. 1412. If the act in which the unlawful or
forbidden cause consists does not constitute a
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
criminal offense, the following rules shall be
observed:
(1) When the fault is on the part of both
contracting parties, neither may recover
what he has given by virtue of the contract,
or demand the performance of the other's
undertaking;
(2) When only one of the contracting parties
is at fault, he cannot recover what he has
given by reason of the contract, or ask for
the fulfillment of what has been promised
him. The other, who is not at fault, may
demand the return of what he has given
without any obligation to comply his
promise. (1306)
Art. 1413. Interest paid in excess of the interest
allowed by the usury laws may be recovered by the
debtor, with interest thereon from the date of the
payment.
Art. 1414. When money is paid or property
delivered for an illegal purpose, the contract may be
repudiated by one of the parties before the purpose
has been accomplished, or before any damage has
been caused to a third person. In such case, the
courts may, if the public interest will thus be
subserved, allow the party repudiating the contract
to recover the money or property.
Art. 1415. Where one of the parties to an illegal
contract is incapable of giving consent, the courts
may, if the interest of justice so demands allow
recovery of money or property delivered by the
incapacitated person.
Art. 1416. When the agreement is not illegal per se
but is merely prohibited, and the prohibition by the
law is designated for the protection of the plaintiff,
he may, if public policy is thereby enhanced,
recover what he has paid or delivered.
Art. 1417. When the price of any article or
commodity is determined by statute, or by authority
of law, any person paying any amount in excess of
the maximum price allowed may recover such
excess.
Art. 1418. When the law fixes, or authorizes the
fixing of the maximum number of hours of labor,
and a contract is entered into whereby a laborer
undertakes to work longer than the maximum thus
fixed, he may demand additional compensation for
service rendered beyond the time limit.
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Art. 1419. When the law sets, or authorizes the
setting of a minimum wage for laborers, and a
contract is agreed upon by which a laborer accepts
a lower wage, he shall be entitled to recover the
deficiency.
Art. 1420. In case of a divisible contract, if the illegal
terms can be separated from the legal ones, the
latter may be enforced.
Art. 1421. The defense of illegality of contract is not
available to third persons whose interests are not
directly affected.
Art. 1422. A contract which is the direct result of a
previous illegal contract, is also void and inexistent.
Title III. - NATURAL OBLIGATIONS
Art. 1423. Obligations are civil or natural. Civil
obligations give a right of action to compel their
performance. 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. Some natural
obligations are set forth in the following articles.
NOTE: The binding tie of these obligations is the
conscience of man, for under the law, they do not
have the necessary efficacy to give rise to an
action.
2012 Bar Exam Question
82. An obligation which is based on equity and
natural law is known as: a) pure
b) quasi-contract c) civil d) natural
Art. 1424. When a right to sue upon a civil
obligation has lapsed by extinctive prescription, the
obligor who voluntarily performs the contract cannot
recover what he has delivered or the value of the
service he has rendered.
Art. 1425. When without the knowledge or against
the will of the debtor, a third person pays a debt
which the obligor is not legally bound to pay
because the action thereon has prescribed, but the
debtor later voluntarily reimburses the third person,
the obligor cannot recover what he has paid.
Art. 1426. When a minor between eighteen and
twenty-one years of age who has entered into a
contract without the consent of the parent or
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
guardian, after the annulment of the contract
voluntarily returns the whole thing or price received,
notwithstanding the fact the he has not been
benefited thereby, there is no right to demand the
thing or price thus returned.
Art. 1427. When a minor between eighteen and
twenty-one years of age, who has entered into a
contract without the consent of the parent or
guardian, voluntarily pays a sum of money or
delivers a fungible thing in fulfillment of the
obligation, there shall be no right to recover the
same from the obligee who has spent or consumed
it in good faith. (1160A)
Art. 1428. When, after an action to enforce a civil
obligation has failed the defendant voluntarily
performs the obligation, he cannot demand the
return of what he has delivered or the payment of
the value of the service he has rendered.
Art. 1429. When a testate or intestate heir
voluntarily pays a debt of the decedent exceeding
the value of the property which he received by will
or by the law of intestacy from the estate of the
deceased, the payment is valid and cannot be
rescinded by the payer.
Art. 1430. When a will is declared void because it
has not been executed in accordance with the
formalities required by law, but one of the intestate
heirs, after the settlement of the debts of the
deceased, pays a legacy in compliance with a
clause in the defective will, the payment is effective
and irrevocable.
Title IV. - ESTOPPEL (n)
Art. 1431. Through estoppel an admission or
representation is rendered conclusive upon the
person making it, and cannot be denied or
disproved as against the person relying thereon.
Art. 1432. The principles of estoppel are hereby
adopted insofar as they are not in conflict with the
provisions of this Code, the Code of Commerce, the
Rules of Court and special laws.
Art. 1433. Estoppel may be in pais or by deed.
KINDS OF ESTOPPEL:
1. Estoppel in pais (by conduct) -
a. Estoppel by silence;
b. Estoppel by acceptance of benefits.
2. Technical estoppel –
a. Estoppel by deed;
b. Estoppel by record;
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c. Estoppel by judgment;
d. Estoppel by laches.
LACHES (STALE DEMANDS)
Failure or neglect, for an unreasonable and
unexplained length of time to do that which, by
exercising due diligence, could or should have been
done earlier. It is negligence or omission to assert a
right within reasonable time warranting a
presumption that the party entitled to assert it either
has abandoned it or declined to assert it.
Requisites:
1. Conduct on part of the defendant, or of one
under whom he claims, giving rise to the
situation of which the complaint is made
and for which the complaint seeks a
remedy;
2. Delay in asserting the complainant’s right,
having knowledge or notice of the
defendant’s conduct and having been
afforded the opportunity to institute a suit;
3. Lack of knowledge or notice on the part of
the defendant that the complainant would
assert the right on which he bases his suit;
4. Injury to the defendant in the event relief is
accorded to the complainant, or the suit is
not held to be barred.
PRESCRIPTION LACHES
Concerned with the fact Concerned with the
of delay effect of delay
It is a matter of time It is a matter of equity
Statutory Non-statutory
Applies at law Applies in equity
Based on a fixed time Not based on fixed time
Art. 1434. When a person who is not the owner of a
thing sells or alienates and delivers it, and later the
seller or grantor acquires title thereto, such title
passes by operation of law to the buyer or grantee.
Donation vs. Sale (2003)
a) May a person sell something that does not belong to
him? Explain. b) May a person donate something that
does not belong
to him? Explain. 5%
SUGGESTED ANSWER:
(a) Yes, a person may sell something which does not
belong to him. For the sale to be valid, the law does not
require the seller to be the owner of the property at the
time of the sale. (Article 1434, NCC). If the seller cannot
transfer ownership over the thing sold at the time of
delivery because he was not the owner thereof, he shall
be liable for breach of contact.
(b) As a general rule, a person cannot donate something
which he cannot dispose of at the time of the donation
(Article 751, New Civil Code).
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 1435. If a person in representation of another
sells or alienates a thing, the former cannot
subsequently set up his own title as against the
buyer or grantee.
Art. 1436. A lessee or a bailee is estopped from
asserting title to the thing leased or received, as
against the lessor or bailor.
Art. 1437. When in a contract between third
persons concerning immovable property, one of
them is misled by a person with respect to the
ownership or real right over the real estate, the
latter is precluded from asserting his legal title or
interest therein, provided all these requisites are
present:
(1) There must be fraudulent representation
or wrongful concealment of facts known to
the party estopped;
(2) The party precluded must intend that
the other should act upon the facts as
misrepresented;
(3) The party misled must have been
unaware of the true facts; and
(4) The party defrauded must have acted in
accordance with the misrepresentation.
Art. 1438. One who has allowed another to assume
apparent ownership of personal property for the
purpose of making any transfer of it, cannot, if he
received the sum for which a pledge has been
constituted, set up his own title to defeat the pledge
of the property, made by the other to a pledgee who
received the same in good faith and for value.
Art. 1439. Estoppel is effective only as between the
parties thereto or their successors in interest.
Title V. - TRUSTS (n)
CHAPTER 1
GENERAL PROVISIONS
Art. 1440. A person who establishes a trust is called
the trustor; one in whom confidence is reposed as
regards property for the benefit of another person is
known as the trustee; and the person for whose
benefit the trust has been created is referred to as
the beneficiary.
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Art. 1441. Trusts are either express or implied.
Express trusts are created by the intention of the
trustor or of the parties. Implied trusts come into
being by operation of law.
Art. 1442. The principles of the general law of
trusts, insofar as they are not in conflict with this
Code, the Code of Commerce, the Rules of Court
and special laws are hereby adopted.
CHAPTER 2
EXPRESS TRUSTS
Art. 1443. No express trusts concerning an
immovable or any interest therein may be proved by
parol evidence.
Art. 1444. No particular words are required for the
creation of an express trust, it being sufficient that a
trust is clearly intended.
Art. 1445. No trust shall fail because the trustee
appointed declines the designation, unless the
contrary should appear in the instrument
constituting the trust.
Art. 1446. Acceptance by the beneficiary is
necessary. Nevertheless, if the trust imposes no
onerous condition upon the beneficiary, his
acceptance shall be presumed, if there is no proof
to the contrary.
CHAPTER 3
IMPLIED TRUSTS
Art. 1447. The enumeration of the following cases
of implied trust does not exclude others established
by the general law of trust, but the limitation laid
down in Article 1442 shall be applicable.
Implied Trust (1998)
Juan and his sister Juana inherited from their mother two
parcels of farmland with exactly the same areas. For
convenience, the Torrens certificates of title covering both
lots were placed in Juan's name alone. In 1996, Juan
sold to an innocent purchaser one parcel in its entirety
without the knowledge and consent of Juana, and
wrongfully kept for himself the entire price paid.
1. What rights of action, if any, does Juana have
against and/or the buyer? |3%]
2. Since the two lots have the same area, suppose
Juana flies a complaint to have herself declared sole
owner of the entire remaining second lot, contending that
her brother had forfeited his share thereof by wrongfully
disposing of her undivided share in the first lot. Will the
suit prosper? [2%]
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
SUGGESTED ANSWER:
1. When, for convenience, the Torrens title to the two
parcels of land were placed in Joan's name alone, there
was created an implied trust (a resulting trust) for the
benefit of Juana with Juan as trustee of one-half
undivided or ideal portion of each of the two lots.
Therefore, Juana can file an action for damages against
Joan for having fraudulently sold one of the two parcels
which he partly held in trust for Juana's benefit. Juana
may claim actual or compensatory damage for the loss of
her share in the land; moral damages for the mental
anguish, anxiety, moral shock and wounded feelings she
had suffered; exemplary damage by way of example for
the common good, and attorney's fees.
Juana has no cause of action against the buyer who
acquired the land for value and in good faith, relying on
the transfer certificate of title showing that Juan is the
registered owner of the land.
ANOTHER ANSWER:
1. Under Article 476 of the Civil Code, Juana can file an
action for quieting of title as there is a cloud in the title to
the subject real property. Second, Juana can also file an
action for damages against Juan, because the settled
rule is that the proper recourse of the true owner of the
property who was prejudiced and fraudulently
dispossessed of the same is to bring an action for
damages against those who caused or employed the
same. Third, since Juana had the right to her share in the
property by way of inheritance, she can demand the
partition of the thing owned in common, under Article 494
of the Civil Code, and ask that the title to the remaining
property be declared as exclusively hers.
However, since the farmland was sold to an innocent
purchaser for value, then Juana has no cause of action
against the buyer consistent with the established rule that
the rights of an innocent purchaser for value must be
respected and protected notwithstanding the fraud
employed by the seller in securing his title. (Eduarte vs.
CA, 253 SCRA 391)
ADDITIONAL ANSWER:
share in the proceeds of the sale with legal interest
thereof, and (b) such damages as she may be able to
prove as having been suffered by her, which may include
actual or compensatory damages as well as moral and
exemplary damages due to the breach of trust and bad
faith (Imperial vs. CA, 259 SCRA 65). Of course, if the
buyer knew of the co-ownership over the lot he was
buying, Juana can seek (c) reconvenyance of her one-
half share instead but she must implead the buyer as co-
defendant and allege his bad faith in purchasing the
entire lot. Finally, consistent with the ruling in Imperial us.
CA. Juana may seek instead (d) a declaration that she is
now the sole owner of the entire remaining lot on the
theory that Juan has forfeited his one-half share therein.
ADDITIONAL ANSWER:
1. Juana can file an action for damages against Juan for
having fraudulently sold one of the two parcels which he
partly held in trust for Juana's benefit. Juana may claim
actual or compensatory damage for the loss of her share
in the land; moral damages for the mental anguish,
anxiety, moral shock and wounded feelings she had
suffered; exemplary damage by way of example for the
common good, and attorney's fees. Juana has no cause
of action against the buyer who acquired the land for
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value and in good faith, relying on the transfer certificate
showing that Juan is the registered owner of the land.
SUGGESTED ANSWER:
2. Juana's suit to have herself declared as sole owner of
the entire remaining area will not prosper because while
Juan's act in selling the other lot was wrongful. It did not
have the legal effect of forfeiting his share in the
remaining lot. However, Juana can file an action against
Juan for partition or termination of the co-ownership with
a prayer that the lot sold be adjudicated to Juan, and the
remaining lot be adjudicated and reconveyed to her.
ANOTHER ANSWER:
2. The suit will prosper, applying the ruling in Imperial vs.
CA cited above. Both law and equity authorize such a
result, said the Supreme Court.
Strictly speaking, Juana's contention that her brother had
forfeited his share in the second lot is incorrect. Even if
the two lots have the same area, it does not follow that
they have the same value. Since the sale of the first lot
on the Torrens title in the name of Juan was valid, all that
Juana may recover is the value of her undivided interest
therein, plus damages. In addition, she can ask for
partition or reconveyance of her undivided interest in the
second lot, without prejudice to any agreement between
them that in lieu of the payment of the value of Juana's
share in the first lot and damages, the second lot be
reconveyed to her.
ALTERNATIVE ANSWER:
2. The suit will not prosper, since Juan's wrongful act of
pocketing the entire proceeds of the sale of the first lot is
not a ground for divesting him of his rights as a co-owner
of the second lot. Indeed, such wrongdoing by Juan does
not constitute, for the benefit of Juana, any of the modes
of acquiring ownership under Art. 712, Civil Code
Trust; Implied Resulting Trust (1995)
In 1960, Maureen purchased two lots in a plush
subdivision registering Lot 1 in her name and Lot 2 in the
name of her brother Walter with the latter's consent. The
idea was to circumvent a subdivision policy against the
acquisition of more than one lot by one buyer. Maureen
constructed a house on Lot 1 with an extension on Lot 2
to serve as a guest house. In 1987, Walter who had
suffered serious business losses demanded that
Maureen remove the extension house since the lot on
which the extension was built was his property. In 1992,
Maureen sued for the reconveyance to her of Lot 2
asserting that a resulting trust was created when she had
the lot registered in Walter's name even if she paid the
purchase price. Walter opposed the suit arguing that
assuming the existence of a resulting trust the action of
Maureen has already prescribed since ten years have
already elapsed from the registration of the title in his
name. Decide. Discuss fully.
SUGGESTED ANSWER:
This is a case of an implied resulting trust. If Walter
claims to have acquired ownership of the land by
prescription or if he anchors his defense on extinctive
prescription, the ten year period must be reckoned from
1987 when he demanded that Maureen remove the
extension house on Lot No. 2 because such demand
amounts to an express repudiation of the trust and it was
made known to Maureen. The action for reconveyance
filed in 1992 is not yet barred by prescription. (Spouses
Huang v. Court of Appeals, Sept. 13, 1994).
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 1448. There is an implied trust when property is
sold, and the legal estate is granted to one party but
the price is paid by another for the purpose of
having the beneficial interest of the property. The
former is the trustee, while the latter is the
beneficiary. However, if the person to whom the title
is conveyed is a child, legitimate or illegitimate, of
the one paying the price of the sale, no trust is
implied by law, it being disputably presumed that
there is a gift in favor of the child.
Art. 1449. There is also an implied trust when a
donation is made to a person but it appears that
although the legal estate is transmitted to the
donee, he nevertheless is either to have no
beneficial interest or only a part thereof.
Art. 1450. If the price of a sale of property is loaned
or paid by one person for the benefit of another and
the conveyance is made to the lender or payor to
secure the payment of the debt, a trust arises by
operation of law in favor of the person to whom the
money is loaned or for whom its is paid. The latter
may redeem the property and compel a
conveyance thereof to him.
Art. 1451. When land passes by succession to any
person and he causes the legal title to be put in the
name of another, a trust is established by
implication of law for the benefit of the true owner.
Art. 1452. If two or more persons agree to purchase
property and by common consent the legal title is
taken in the name of one of them for the benefit of
all, a trust is created by force of law in favor of the
others in proportion to the interest of each.
Art. 1453. When property is conveyed to a person
in reliance upon his declared intention to hold it for,
or transfer it to another or the grantor, there is an
implied trust in favor of the person whose benefit is
contemplated.
Art. 1454. If an absolute conveyance of property is
made in order to secure the performance of an
obligation of the grantor toward the grantee, a trust
by virtue of law is established. If the fulfillment of
the obligation is offered by the grantor when it
becomes due, he may demand the reconveyance of
the property to him.
Art. 1455. When any trustee, guardian or other
person holding a fiduciary relationship uses trust
funds for the purchase of property and causes the
conveyance to be made to him or to a third person,
a trust is established by operation of law in favor of
the person to whom the funds belong.
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Art. 1456. If property is acquired through mistake or
fraud, the person obtaining it is, by force of law,
considered a trustee of an implied trust for the
benefit of the person from whom the property
comes.

Trust De Son Tort (2007) No.III. Explain the

following concepts and doctrines and give an
example of each: (A). concept of trust de son
tort (constructive trust) (5%) SUGGESTED
ANSWER:
A constructive trust is a trust NOT created THE LAW ON
by any word or phrase, either expressly or
impliedly, evincing a direct intention to
create a trust, but is one that arises in
SALES AND LEASE
order to satisfy the demands of justice. It
does not come about by agreement or Title VI. - SALES
intention but mainly operation of law and
construed as a trust against one who, by CHAPTER 1
fraud, duress or abuse of confidence, NATURE AND FORM OF THE CONTRACT
obtains or holds the legal right to property
which he ought not, in equity and good Art. 1458. By the contract of sale one of the
conscience, to hold (Heirs of Lorenzo Yap v. contracting parties obligates himself to transfer the
CA, 371 Phil 523, 1991). The following are ownership and to deliver a determinate thing, and
examples of constructive trust: 1. Art. 1456 the other to pay therefor a price certain in money or
NCC which provides: "If property is its equivalent.
acquired through mistake or fraud, the
person obtaining it is, by force of law
A contract of sale may be absolute or conditional.
considered a trustee of an implied trust for
(1445a)
the benefit of the person for whom the
property comes." 2. Art 1451 NCC which
provides: "When land passes by succession CHARACTERISTICS OF CONTRACT OF SALE:
through any person and he causes the legal 1. Nominate;
2. Principal;
title to be put in the name of another, a
3. Consensual;
trust is established by implication of law
4. Bilateral;
for the benefit of the true owner." 3. Art
5. Reciprocal;
1454 NCC which provides: "If an absolute
6. Onerous;
conveyance of property is made in order to
7. Commutative;
secure the performance of an obligation of
8. Title and not a mode
the grantor toward the grantee, a trust by ELEMENTS OF CONTRACT OF SALE:
virtue of law is established. If the 1. Consent;
fulfillment of the obligation is offered by 2. Determinate subject matter;
the grantor when it becomes due, he may 3. Price certain in money or its equivalent.
demand the reconveyance of the property
to him." 4. Art 1455 NCC which provides: STAGES IN THE LIFE OF CONTRACT OF SALE:
"When any trustee, guardian or any person 1. Negotiation;
holding a fiduciary relationship uses trust 2. Perfection;
funds for the purchase of property and 3. Consummation.
causes conveyance to be made to him or to
third person, a trust is established by
operation of law in favor of the person to DISTINGUISHED FROM OTHER CONTRACTS
whom the funds belong." DONATION SALE
Gratuitous or onerous Onerous
Formal contract Consensual contract
Art. 1457. An implied trust may be proved by oral Governed by law on Governed by law on
evidence. donation sales

DATION IN PAYMENT SALE

JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 314

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Pre-existing agent No pre-existing agent perfected when Linda and Ray agreed on the object of
Obligations are Obligations are created the sale and the price [Art. 1475, New Civil Code]. The
extinguished consent of Linda has already been given, as shown by
her agreement to the price of the sale. There is therefore
Debtor’s consideration: Consideration of seller: consent on her part as the consent need not be given in
extinguishment of the price. any specific form. Hence, her consent may be given by
debt. implication, especially since she was aware of, and
Consideration of buyer: participated in the sale of the property (Pelayo v. CA,
Creditor’s consideration: acquisition of the object. G.R. No. 141323, June 8, 2005). Her action for moral and
acquisition of the object exemplary damages will also not prosper because the
offered in lieu of the case does not fall under any of those mentioned in Art.
original credit 2219 and 2232 of the Civil Code.
ALTERNATIVE ANSWER:
Less freedom in Greater freedom in The suit will prosper. Sale of community property requires
determining the price determining the price written consent of both spouses. The failure or refusal of
Linda to affix her signature on the deed of sale, coupled
with her express declaration of opposing the sale negates
LEASE SALE any valid consent on her part. The consent of Biong by
Use of thing is for a Obligation absolutely himself is insufficient to effect a valid sale of community
specified period only transfer ownership of property (Art. 96, Family Code; Abalos v. Macatangay,
G.R. No. 155043, September 30, 2004).
and with the obligation thing
Does Ray have any cause of action against Biong and
to return Linda? Can he also recover damages from the spouses?
Consideration is rent Consideration is price Explain. (2.5%)
Seller must be the Considering that the contract has already been perfected
Lessor need not be owner at the time of and taken out of the operation of the statute of frauds,
owner delivery to transfer Ray can compel Linda and Biong to observe the form
ownership required by law in order for the property to be registered
in the name of Ray which can be filed together with the
Conditional Sale vs. Absolute Sale (1997) action for the recovery of house [Art. 1357 New Civil
Distinguish between a conditional sale, on the one hand, Code]. In the alternative, he can recover the amount of
and an absolute sale, on the other hand. Two million pesos (P2,000,000.00) that he paid.
SUGGESTED ANSWER: Otherwise, it would result in solutio indebiti or unjust
A CONDITIONAL SALE is one where the vendor is enrichment.
granted the right to unilaterally rescind the contract Ray can recover moral damages on the ground that the
predicated on the fulfillment or non-fulfillment, as the case action filed by Linda is clearly an unfounded civil suit
may be, of the prescribed condition. An ABSOLUTE which falls under malicious prosecution {Ponce v.
SALE is one where the title to the property is not reserved Legaspi, G.R. No. 79184, May 6,1992).
to the vendor or if the vendor is not granted the right to
rescind the contract based on the fulfillment or
non¬fulfillment, as the case may be, of the prescribed
condition.
Art. 1459. The thing must be licit and the vendor
Contract of Sale; Marital Community Property; must have a right to transfer the ownership thereof
Formalities (2006) at the time it is delivered. (n)
Spouses Biong and Linda wanted to sell their house.
They found a prospective buyer, Ray. Linda negotiated NOTE: Seller need not be the owner of the subject
with Ray for the sale of the property. They agreed on a matter at the time of the perfection; it is sufficient
fair price of P2 Million. Ray sent Linda a letter confirming
that he is the owner at the time of delivery.
his intention to buy the property. Later, another couple,
Bernie and Elena, offered a similar house at a lower price
of P 1.5 Million. But Ray insisted on buying the house of Exception: In sale in foreclosure sales, the
Biong and Linda for sentimental reasons. Ray prepared a property must be owned by the mortgage at the
deed of sale to be signed by the couple and a manager's time of the levy and NOT MERELY at the time of
check for P2 Million. After receiving the P2 Million, Biong foreclosure sale.
signed the deed of sale. However, Linda was not able to
sign it because she was abroad. On her return, she
refused to sign the document saying she changed her
mind. Linda filed suit for nullification of the deed of sale Art. 1460. A thing is determinate when it is
and for moral and exemplary damages against Ray. particularly designated or physically segregated
Will the suit prosper? Explain. (2.5%) from all other of the same class.
ALTERNATIVE ANSWER:
The requisite that a thing be determinate is satisfied
No, the suit will not prosper. The contract of sale was if at the time the contract is entered into, the thing is
In a CONTRACT OF SALE, ownership is transferred to
capable of being made determinate without the

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necessity of a new or further agreement between There may be a contract of sale of goods, whose
the parties. (n) acquisition by the seller depends upon a
contingency which may or may not happen. (n)
NOTE: Capacity of being determinate must be
determined at the time of the perfection of the Art. 1463. The sole owner of a thing may sell an
contract. undivided interest therein. (n)

Art. 1461. Things having a potential existence may Art. 1464. In the case of fungible goods, there may
be the object of the contract of sale. be a sale of an undivided share of a specific mass,
though the seller purports to sell and the buyer to
The efficacy of the sale of a mere hope or buy a definite number, weight or measure of the
expectancy is deemed subject to the condition that goods in the mass, and though the number, weight
the thing will come into existence. or measure of the goods in the mass is
undetermined. By such a sale the buyer becomes
owner in common of such a share of the mass as
The sale of a vain hope or expectancy is void. (n)
the number, weight or measure bought bears to the
number, weight or measure of the mass. If the
SUBJECT MATTER OF SALE mass contains less than the number, weight or
Requisites: measure bought, the buyer becomes the owner of
1. Things – the whole mass and the seller is bound to make
a. Possible – existing, future or good the deficiency from goods of the same kind
contingent. and quality, unless a contrary intent appears. (n)
b. Licit – not outside the commerce of
men.
Art. 1465. Things subject to a resolutory condition
c. Determinate or determinable.
may be the object of the contract of sale. (n)
2. Rights – must be transmissible
Not transmissible: Example: Property subject of a reserva
a. Future inheritance. troncal may be sold by the reservista, but
b. Service (personal consideration). the ownership of the buyer is subject to a
c. Right to support. resolutory condition. That is, when the
d. reservista dies, and there are remaining
qualified reservatarios, the latter may
Emptio rei speratae Emptio spei recover the reserved property.
Sale of a mere hope or
Sale of an expected expectancy that the Art. 1466. In construing a contract containing
thing thing will come to provisions characteristic of both the contract of sale
existence; sale of the and of the contract of agency to sell, the essential
hope itself clauses of the whole instrument shall be
Sale is subject to the Sale is effective even if considered. (n)
condition that the thing the thing does not come
will exist; if it does not, into existence; unless it AGENCY TO SELL SALE
there is no contract is a vain hope Agent is not obliged to
Uncertainty is with The uncertainty is with pay the price, merely Buyer pays for the price
regard to the quantity regard to the existence obliged to deliver the
and quality of the thing of the thing price received from
not the existence of the buyer
thing Principal remains owner Buyer becomes the
Object is a present thing even if the object is owner of the thing
Object is future thing which is the hope or delivered to the agent
expectancy Agent assumes no
risk/liability as long as Seller warrants
within the authority
Art. 1462. The goods which form the subject of a given
contract of sale may be either existing goods, May be revoked
owned or possessed by the seller, or goods to be unilaterally because Not unilaterally
manufactured, raised, or acquired by the seller after fiduciary and even if revocable
the perfection of the contract of sale, in this Title without ground
called "future goods." Agent not allowed to Seller receives profit

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profit
Personal contract;
rescission is not Real contract
available
Art. 1467. A contract for the delivery at a certain
price of an article which the vendor in the ordinary
course of his business manufactures or procures for
the general market, whether the same is on hand at
the time or not, is a contract of sale, but if the goods
are to be manufactured specially for the customer
and upon his special order, and not for the general
market, it is a contract for a piece of work. (n)
Contract of Sale vs. Agency to Sell (1999)
A granted B the exclusive right to sell his brand of Maong
pants in Isabela, the price for his merchandise payable
within 60 days from delivery, and promising B a
commission of 20% on all sales. After the delivery of the
merchandise to B but before he could sell any of them,
B’s store in Isabela was completely burned without his
fault, together with all of A's pants. Must B pay A for his
lost pants? Why? (5%)
SUGGESTED ANSWER:
The contract between A and B is a sale not an agency to
sell because the price is payable by B upon 60 days from
delivery even if B is unable to resell it. If B were an agent,
he is not bound to pay the price if he is unable to resell it.
As a buyer, ownership passed to B upon delivery and,
under Art. 1504 of the Civil Code, the thing perishes for
the owner. Hence, B must still pay the price.
CONTRACT OF PIECE SALE
OF WORK
Goods are to be Contract for delivery of
manufactured especially an article which the
for a customer and vendor in the ordinary
upon special order and course of business
not for the general manufacturers or
market procures for general
market (whether on
hand or not)
Essence is service Essence is object
Relevance: Applicability of Statute of Frauds.
Art. 1468. If the consideration of the contract
consists partly in money, and partly in another
thing, the transaction shall be characterized by the
manifest intention of the parties. If such intention
does not clearly appear, it shall be considered a
barter if the value of the thing given as a part of the
consideration exceeds the amount of the money or
its equivalent; otherwise, it is a sale. (1446a)
BARTER SALE
Consideration: giving of Consideration: giving of
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
a thing money as payment
A specie of the genus Governed by law on
sales sale
If consideration consists partly in money and partly
by thing – look at manifest intention
Intention is not clear: if Intention is not clear:
value of thing is more value of thing is equal
than amount of money – or less than the amount
barter of money - sale
Art. 1469. In order that the price may be considered
certain, it shall be sufficient that it be so with
reference to another thing certain, or that the
determination thereof be left to the judgment of a
special person or persons.
Should such person or persons be unable or
unwilling to fix it, the contract shall be inefficacious,
unless the parties subsequently agree upon the
price.
If the third person or persons acted in bad faith or
by mistake, the courts may fix the price.
Where such third person or persons are prevented
from fixing the price or terms by fault of the seller or
the buyer, the party not in fault may have such
remedies against the party in fault as are allowed
the seller or the buyer, as the case may be. (1447a)
PRICE
Requisites:
1. Real;
2. In money or its equivalent;
3. Certain or ascertainable.
Art. 1470. Gross inadequacy of price does not
affect a contract of sale, except as it may indicate a
defect in the consent, or that the parties really
intended a donation or some other act or contract.
(n)
Art. 1471. If the price is simulated, the sale is void,
but the act may be shown to have been in reality a
donation, or some other act or contract. (n)
EFFECTS WHERE PRICE IS SIMULATED:
1. The act may be shown to have been in
reality a donation, or some other act or
contract.
2. If not and neither party had any intention
whatsoever that the amount will be paid
(absolutely simulated); the sale is void.
3. If there is a real price but what is stated in
the contract is not one intended to be paid
(relatively simulated); the contract is valid
but subject to reformation.
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2012 Bar Exam Question
86. Which of the following expresses a correct
principle of law? Choose the best answer. a)
Failure to disclose facts when there is a duty
to reveal them, does not constitute fraud. b)
Violence or intimidation does not render a
contract annullable if employed not by a
contracting party but by a third person. c) A
threat to enforce one’s claim through
competent authority, if the claim is legal or
just, does not vitiate consent. d) Absolute
simulation of a contract always results in a
void contract.
Art. 1472. The price of securities, grain, liquids, and
other things shall also be considered certain, when
the price fixed is that which the thing sold would
have on a definite day, or in a particular exchange
or market, or when an amount is fixed above or
below the price on such day, or in such exchange
or market, provided said amount be certain. (1448)
Art. 1473. The fixing of the price can never be left to
the discretion of one of the contracting parties.
However, if the price fixed by one of the parties is
accepted by the other, the sale is perfected.
(1449a)
Note: The contract may be of adhesion.
Art. 1474. Where the price cannot be determined in
accordance with the preceding articles, or in any
other manner, the contract is inefficacious.
However, if the thing or any part thereof has been
delivered to and appropriated by the buyer he must
pay a reasonable price therefor. What is a
reasonable price is a question of fact dependent on
the circumstances of each particular case. (n)
Art. 1475. The contract of sale is perfected at the
moment there is a meeting of minds upon the thing
which is the object of the contract and upon the
price.
From that moment, the parties may reciprocally
demand performance, subject to the provisions of
the law governing the form of contracts. (1450a)
3 STAGES IN LIFE OF A CONTRACT OF SALE
1. Policitation/negotiation Stage – offer is
floated, acceptance is floated but they do
not meet; the time when the parties indicate
their interest but no concurrence of offer
and acceptance.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
2. Perfection Stage – concurrence of all the
requisites; meeting of the minds.
3. Consummation Stage – parties perform
their respective undertakings.
GR: Contract of sale is perfected at the moment
there is meeting of the minds upon object and upon
price.
Exception: When the sale is subject to a
suspensive condition.
RULES:
1. When parties are face to face – when
there is absolute acceptance of an offer
that is certain.
2. When thru correspondence or telegram
– when the offeror receives of had
knowledge of the acceptance (COGNITION
THEORY)
3. When sale is subject to suspensive
condition - from the moment the condition
is fulfilled.
Art. 1476. In the case of a sale by auction:
(1) Where goods are put up for sale by
auction in lots, each lot is the subject of a
separate contract of sale.
(2) A sale by auction is perfected when the
auctioneer announces its perfection by the
fall of the hammer, or in other customary
manner. Until such announcement is made,
any bidder may retract his bid; and the
auctioneer may withdraw the goods from
the sale unless the auction has been
announced to be without reserve.
(3) A right to bid may be reserved expressly
by or on behalf of the seller, unless
otherwise provided by law or by stipulation.
(4) Where notice has not been given that a
sale by auction is subject to a right to bid on
behalf of the seller, it shall not be lawful for
the seller to bid himself or to employ or
induce any person to bid at such sale on
his behalf or for the auctioneer, to employ
or induce any person to bid at such sale on
behalf of the seller or knowingly to take any
bid from the seller or any person employed
by him. Any sale contravening this rule may
be treated as fraudulent by the buyer. (n)
Art. 1477. The ownership of the thing sold shall be
transferred to the vendee upon the actual or
constructive delivery thereof. (n)
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Art. 1478. The parties may stipulate that ownership
in the thing shall not pass to the purchaser until he
has fully paid the price. (n)
CONTRACT OF SALE CONTRACT TO SELL
Absolute Conditional
Real obligation – to give Personal obligation – to
do
Ownership is reserved
Title passes to the in the seller and will
buyer upon delivery pass only upon full
payment of the price
full payment is a
Non-payment of the positive suspensive
price is a negative condition, the failure of
resolutory condition which is not a breach
but prevents the
obligation of the vendor
to convey title to arise
Remedies available: Remedies:
a. Specific a. Resolution (not
performance; Rescission);
b. Rescission; b. Damages
c. Damages
as payment of the full purchase price, or the
performance of other prestation to give, to do or
not to do. Compliance with the condition
automatically gives the right to the vendee to
demand the delivery of the object of the sale. In
a contract to sell, however, the compliance with
the condition does not automatically sell the
property to the vendee. It merely gives the
vendee the right to compel the vendor to
execute the deed of absolute sale.
Contract to Sell vs. Contract of Sale (1997)
State the basic difference (only in their legal effects)
¬Between a contract to sell, on the one hand, and a
contract of sale, on the other.
SUGGESTED ANSWER:
the buyer upon delivery of the object to him while in a
CONTRACT TO SELL, ownership is retained by the
seller until the purchase price is fully paid. In a contract to
sell, delivery of the object does not confer ownership
upon the buyer. In a contract of sale, there is only one
contract executed between the seller and the buyer, while
in a contract to sell, there are two contracts, first the
contract to sell (which is a conditional or preparatory sale)
and a second, the final deed of sale or the principal
contract which is executed after full payment of the
purchase price.

Contract to Sell (2001) Contract to Sell; Acceptance; Right of First Refusal

Arturo gave Richard a receipt which states:
Receipt Received from Richard as down payment for my
1995 Toyota Corolla with plate No. XYZ-1 23..............
P50.000.00
Balance payable: 12/30/01........ P50 000.00
September 15, 2001.
(Sgd.) Arturo Does this receipt evidence a contract to
sell? Why? (5%)
SUGGESTED ANSWER:
It is a contract of sale because the seller did not reserve
ownership until he was fully paid.
2011 Bar Exam Question
(35) Lino entered into a contract to sell with
Ramon, undertaking to convey to the latter
one of the five lots he owns, without specifying
which lot it was, for the price of P1 million.
Later, the parties could not agree which of five
lots he owned Lino undertook to sell to
Ramon. What is the standing of the contract?
(A) Unenforceable. (B) Voidable. (C)
Rescissible. (D) Void.
Contract to Sell vs. Conditional Contract of Sale
(2012) No.X.a) A contract to sell is the same as a
conditional contract of sale. Do you agree? Explain
your answer. (5%) SUGGESTED ANSWER: No. A
contract to sell is a species of conditional sale.
The contract to sell does not sell a thing or
property; it sells the right to buy property. A
conditional sale is a sale subject to the
happening or performance of a condition, such
(1991)
A is the lessee of an apartment owned by Y. A allowed
his married but employed daughter B, whose husband
works in Kuwait, to occupy it. The relationship between Y
and A soured. Since he has no reason at all to eject A, Y,
in connivance with the City Engineer, secured from the
latter an order for the demolition of the building. A
immediately filed an action in the Regional Trial Court to
annul the order and to enjoin its enforcement. Y and A
were able to forge a compromise agreement under which
A agreed to a twenty percent (20%) increase in the
monthly rentals. They further agreed that the lease will
expire two (2) years later and that in the event that Y
would sell the property, either A or his daughter B shall
have the right of first refusal. The Compromise
Agreement was approved by the court. Six (6) months
before the expiration of the lease, A died. Y sold the
property to the Visorro Realty Corp. without notifying
B. B then filed an action to rescind the sale in favor of the
corporation and to compel Y to sell the property to her
since under the Compromise Agreement, she was given
the right of first refusal which, she maintains is a
stipulation pour atrui under Article 1311 of the Civil Code.
Is she correct?
SUGGESTED ANSWER:
B is not correct. Her action cannot prosper. Article 1311
requires that the third person intended to be benefited
must communicate his acceptance to the obligor before
the revocation. There is no showing that B manifested her
acceptance to Y at any time before the death of A and
before the sale. Hence, B cannot enforce any right under
the alleged stipulation pour atrui.
Art. 1479. A promise to buy and sell a determinate
thing for a price certain is reciprocally demandable.

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An accepted unilateral promise to buy or to sell a
determinate thing for a price certain is binding upon
the promissor if the promise is supported by a
consideration distinct from the price. (1451a)
Option Contract; Liquor & “Pulutan” as
Consideration (2013) No.III.Sergio is the
registered owner of a 500-square meter land.
His friend, Marcelo, who has long been
interested in the property, succeeded in
persuading Sergio to sell it to him. On June 2,
2012, they agreed on the purchase price of
P600,000 and that Sergio would give Marcelo
up to June30, 2012 within which to raise the
amount. Marcelo, in a light tone usual
between them, said that they should seal their
agreement through a case of Jack Daniels
Black and P5,000 "pulutan" money which he
immediately handed to Sergio and which the
latter accepted. The friends then sat down and
drank the first bottle from the case of
bourbon.
On June 15, 2013, Sergio learned of another
buyer, Roberto, who was offering P800,000 in
ready cash for the land. When Roberto
confirmed that he could pay in cash as soon
as Sergio could get the documentation ready,
Sergio decided to withdraw his offer to
Marcelo, hoping to just explain matters to his
friend. Marcelo, however, objected when the
withdrawal was communicated to him, taking
the position that they have a firm and binding
agreement that Sergio cannot simply walk
away from because he has an option to buy
that is duly supported by a duly accepted
valuable consideration.
(A) Does Marcelo have a cause of action
against Sergio? (5%) SUGGESTED ANSWER:
Yes. Marcelo has a cause of action against
Sergio. Under Art. 1324, when the offerer
has allowed the offeree a certain period to
accept, the offer may be withdrawn at any
time before acceptance by communicating
such withdrawal, except when the option is
founded upon consideration, as something
paid or promised.
An accepted unilateral promise to buy or
sell a determinate thing for a price certain
is binding upon him if the promise is
supported by a consideration distinct from
the price (Art. 1479). Consideration in an
option contract may be anything of value,,
unlike in sale where it must be the price
certain in money or its equivalent (San
Miguel Properties Inc. v. Spouses Huang,
G.R. No. 137290, July 31, 2000). Here, the
case of Jack Daniels Black and the
P5,000.00 “pulutan” money was a
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
consideration to “seal their agreement,” an
agreement that Marcelo is given until June
30, 2012 to buy the parcel of land. There is
also no showing that such consideration
will be considered part of the purchase
price. Thus, Sergio’s unilateral withdrawal
of the offer violated the Option Contract
between him and Marcelo.
(B) Can Sergio claim that whatever they might
have agreed upon cannot be enforced because
any agreement relating to the sale of real
property must be supported by evidence in
writing and they never reduced their
agreement to writing? (3%)
SUGGESTED ANSWER: No. Sergio’s claim
has no legal basis. The contract at issue in
the present case is the option contract, not
the contract of sale for the real property.
Therefore, Art. 1403 does not apply. The
Statute of Frauds covers an agreement for
the sale of real property or of an interest
therein. Such agreement is unenforceable
by action, unless the same, or some note or
memorandum, thereof, be in writing, (Art.
1403 (e), Civil Code). Here, Marcelo and
Sergio merely entered into an Option
Contract, which refers to a unilateral
promise to buy or sell, which need not be in
writing to be enforceable (Sanchez v. Rigos,
G.R. No. L-25494, June 14, 1972, citing
Atkins, Kroll and Co. Inc. v. Cua Hian Tek
and Southwestern Sugar & Molasses Co. v.
Atlantic Gulf & Pacific Co.).
ALTERNATIVE ANSWER: No. Sergio’s claim
has no legal basis. The contract of sale has
already been partially executed which takes
it outside the ambit of the Statute of
Frauds is applicable only to executory
contracts, not to contracts that are totally
or partially performed (Carbonnel v. Poncio,
G.R. No. L-11231, May 12, 1958).
Art. 1480. Any injury to or benefit from the thing
sold, after the contract has been perfected, from the
moment of the perfection of the contract to the time
of delivery, shall be governed by Articles 1163 to
1165, and 1262.
This rule shall apply to the sale of fungible things,
made independently and for a single price, or
without consideration of their weight, number, or
measure.
Should fungible things be sold for a price fixed
according to weight, number, or measure, the risk
shall not be imputed to the vendee until they have
been weighed, counted, or measured and
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delivered, unless the latter has incurred in delay.
(1452a)
Art. 1481. In the contract of sale of goods by
description or by sample, the contract may be
rescinded if the bulk of the goods delivered do not
correspond with the description or the sample, and
if the contract be by sample as well as description,
it is not sufficient that the bulk of goods correspond
with the sample if they do not also correspond with
the description.
The buyer shall have a reasonable opportunity of
comparing the bulk with the description or the
sample. (n)
Art. 1482. Whenever earnest money is given in a
contract of sale, it shall be considered as part of the
price and as proof of the perfection of the contract.
(1454a)
OPTION MONEY EARNEST MONEY
Money given as distinct
consideration for an Part of purchase price
option contract
Applies to sale not Given when there is
perfected already a sale
Not required to buy When given, buyer is
bound to pay the
balance
Perfected Sale; Acceptance of Earnest Money (2002)
Bert offers to buy Simeon’s property under the following
terms and conditions: P1 million purchase price, 10%
option money, the balance payable in cash upon the
clearance of the property of all illegal occupants. The
option money is promptly paid and Simeon clears the
property of illegal occupants in no time at all. However,
when Bert tenders payment of the balance and ask
Simeon for the deed for absolute sale, Simeon suddenly
has a change of heart, May Adela still exercise her right
of redemption? Explain.
claiming that the deal is disadvantageous to him as he
has found out that the property can fetch three time the
agreed purchase price. Bert seeks specific performance
but Simeon contends that he has merely given Bert an
option to buy and nothing more, and offers to return the
option money which Bert refuses to accept.
B. Will Bert’s action for specific performance prosper?
Explain. (4%)
C. May Simeon justify his refusal to proceed with the sale
by the fact that the deal is financially disadvantageous to
him? Explain. (4%)
SUGGESTED ANSWER:
B. Bert’s action for specific performance will prosper
because there was a binding agreement of sale, not just
an option contract. The sale was perfected upon
acceptance by Simeon of 10% of the agreed price. This
amount is in really earnest money which, under Art. 1482,
“shall be considered as part of the price and as proof of
the perfection of the contract.” (Topacio v. CA, 211 SCRA
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
291 [1992]; Villongco Realty v. Bormaheco, 65 SCRA 352
[1975]).
C. Simeon cannot justify his refusal to proceed with the
sale by the fact that the deal is financially
disadvantageous to him. Having made a bad bargain is
not a legal ground for pulling out a biding contract of sale,
in the absence of some actionable wrong by the other
party (Vales v. Villa, 35 Phil 769 [1916]), and no such
wrong has been committed by Bert.
2012 Bar Exam Question
99. A contract granting a privilege to a person,
for which he has paid a consideration, which
gives him the right to buy certain merchandise
or specified property, from another person, at
anytime within the agreed period, at a fixed
price. What contract is being referred to? a)
Option Contract b) Contract to Sell c)
Contract of Sale d) Lease
Art. 1483. Subject to the provisions of the Statute of
Frauds and of any other applicable statute, a
contract of sale may be made in writing, or by word
of mouth, or partly in writing and partly by word of
mouth, or may be inferred from the conduct of the
parties. (n)
FORM OF SALES
1. Form not important in validity of sale –
a. Sale being consensual, may be
oral or written, perfected by mere
consent as to price and subject
matter.
b. If particular form is required under
the statute of frauds: valid and
binding between parties but not
binding to 3rd persons.
Reason: purposes of convenience
only and not for validity and
enforceability; cause of action is
granted to sue to compel other
party to execute the document.
2. When form is important for validity –
a. Power to sell a piece of land
granted to an agent – otherwise
void.
b. Sale of large cattle; must be
registered with Municipal Treasurer
– otherwise void.
c. Sale of land by non-Christian if not
approved by the Governor – void.
3. When form is important for enforceability
(Statute of Frauds).
a. A sale agreement which by its
terms is not to be performed within
a year from the making thereof;
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b. An agreement for the sale of
goods, chattel or things in action, at
a price not less than 500. 00;
c. Sale of real property or an interest
therein
Exceptions to the statue of frauds:
a. When there is a note or
memorandum in writing and
subscribed to by party or his agent;
b. When there has been partial
performance/execution;
c. When there has been failure to
object to the presentation of
(oral/testimonial) evidence);
d. When sales are effected through
electronic commerce.
Art. 1484. In a contract of sale of personal property
the price of which is payable in installments, the
vendor may exercise any of the following remedies:
(1) Exact fulfillment of the obligation, should
the vendee fail to pay;
(2) Cancel the sale, should the vendee's
failure to pay cover two or more
installments;
(3) Foreclose the chattel mortgage on the
thing sold, if one has been constituted,
should the vendee's failure to pay cover two
or more installments. In this case, he shall
have no further action against the
purchaser to recover any unpaid balance of
the price. Any agreement to the contrary
shall be void. (1454-A-a)
NOTE: This is the Recto Law.
The list is mutualy exclusive. The avail of one bar
the other remedy. However, the party may seek
another remedy of Petition for the issuance of Writ
of Replevin. Writ of replevin is a special civil action
which can be availed of by filing a bond double the
amount of the property involved in the case in order
to obtain possession thereof. (Rule 60 of ROC)
Repliven may be a provisional remedy or a main
suit at the same time. If it is the main action,
jurisdiction depends upon the amount of the
personal property as alleged in the complaint.
Upon dismissal of the case, without prejudice, for
failure to prosecute, the writ of seizure which is
merely auxiliary in nature becomes functus oficio
and should be lifted. Property must be returned
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(Advent Capital vs. Young, GR No. 183018, Aug 3,
2011).
Maceda Law; Recto Law (1999)
What are the so-called "Maceda" and "Recto" laws in
connection with sales on installments? Give the most
important features of each law. (5%)
SUGGESTED ANSWER:
The MACEDA LAW (R.A. 655) is applicable to sales of
immovable property on installments. The most important
features are (Rillo v. CA, 247 SCRA 461):
(1) After having paid installments for at least two years,
the buyer is entitled to a mandatory grace period of one
month for every year of installment payments made, to
pay the unpaid installments without interest.
If the contract is cancelled, the seller shall refund to the
buyer the cash surrender value equivalent to fifty percent
(50%) of the total payments made, and after five years of
installments, an additional five percent (5%) every year
but not to exceed ninety percent (90%) of the total
payments made.
(2) In case the installments paid were less than 2 years,
the seller shall give the buyer a grace period of not less
than 60 days. If the buyer fails to pay the installments due
at the expiration of the grace period, the seller may
cancel the contract after 30 days from receipt by the
buyer of the notice of cancellation or demand for
rescission by notarial act. The RECTO LAW (Art. 1484}
refers to sale of movables payable in installments and
limiting the right of seller, in case of default by the buyer,
to one of three remedies: a) exact fulfillment; b) cancel
the sale if two or more installments have not been paid; c)
foreclose the chattel mortgage on the things sold, also in
case of default of two or more installments, with no
further action against the purchaser.
Art. 1485. The preceding article shall be applied to
contracts purporting to be leases of personal
property with option to buy, when the lessor has
deprived the lessee of the possession or enjoyment
of the thing. (1454-A-a)
Art. 1486. In the case referred to in two preceding
articles, a stipulation that the installments or rents
paid shall not be returned to the vendee or lessee
shall be valid insofar as the same may not be
unconscionable under the circumstances. (n)
Art. 1487. The expenses for the execution and
registration of the sale shall be borne by the vendor,
unless there is a stipulation to the contrary. (1455a)
Art. 1488. The expropriation of property for public
use is governed by special laws. (1456)
CHAPTER 2
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CAPACITY TO BUY OR SELL
Art. 1489. All persons who are authorized in this
Code to obligate themselves, may enter into a
contract of sale, saving the modifications contained
in the following articles.
Where necessaries are those sold and delivered to
a minor or other person without capacity to act, he
must pay a reasonable price therefor. Necessaries
are those referred to in Article 290. (1457a)
Art. 1490. The husband and the wife cannot sell
property to each other, except:
(1) When a separation of property was
agreed upon in the marriage settlements; or
(2) When there has been a judicial
separation or property under Article 191.
(1458a)
Art. 1491. The following persons cannot acquire by
purchase, even at a public or judicial auction, either
in person or through the mediation of another:
(1) The guardian, the property of the person
or persons who may be under his
guardianship;
(2) Agents, the property whose
administration or sale may have been
entrusted to them, unless the consent of
the principal has been given;
(3) Executors and administrators, the
property of the estate under administration;
(4) Public officers and employees, the
property of the State or of any subdivision
thereof, or of any government-owned or
controlled corporation, or institution, the
administration of which has been intrusted
to them; this provision shall apply to judges
and government experts who, in any
manner whatsoever, take part in the sale;
(5) Justices, judges, prosecuting attorneys,
clerks of superior and inferior courts, and
other officers and employees connected
with the administration of justice, the
property and rights in litigation or levied
upon an execution before the court within
whose jurisdiction or territory they exercise
their respective functions; this prohibition
includes the act of acquiring by assignment
and shall apply to lawyers, with respect to
the property and rights which may be the
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
object of any litigation in which they may
take part by virtue of their profession.
(6) Any others specially disqualified by law.
(1459a)
Art. 1492. The prohibitions in the two preceding
articles are applicable to sales in legal redemption,
compromises and renunciations. (n)
Registration; Party Who First took
Possession (2013)
No.IX.Rica petitioned for the annulment of her
ten-year old marriage to Richard. Richard
hired Atty. Cruz to represent him in the
proceedings. In payment for Atty. Cruz's
acceptance and legal fees, Richard conveyed to
Atty. Cruz a parcel of land in Taguig that he
recently purchased with his lotto winnings.
The transfer documents were duly signed and
Atty. immediately took possession by fencing
off the property's entire perimeter. Desperately
needing money to pay for his mounting legal
fees and his other needs and despite the
transfer to Atty. Cruz, Richard offered the
same parcel of land for sale to the spouses
Garcia. After inspection of the land, the
spouses considered it a good investment and
purchased it from Richard. Immediately after
the sale, the spouses Garcia commenced the
construction of a three-story building over the
land, but they were prevented from doing this
by Atty. Cruz who claimed he has a better
right in light of the prior conveyance in his
favor. Is Atty. Cruz's claim correct? (8%)
SUGGESTED ANSWER:
No. Atty. Cruz is not correct. At first
glance, it may appear that Atty. Cruz is the
one who has the better right because he
first took possession of the property.
However, a lawyer is prohibited under Art
1491 of the Civil Code from acquiring the
property and rights which may be the
object of any litigation in which they may
take part by virtue of their profession.
While the suit is for annulment of marriage
and it may be urged that the land itself is
not the object of the litigation, the
annulment of marriage, if granted, will
carry with it the liquidation of the absolute
community or conjugal partnership of the
spouses as the case may be (Art. 50 in
relation to Art 43 of the Family Code).
Richard purchased the land with his lotto
winnings during the pendency of the suit
for annulment and on the assumption that
the parties are governed by the regime of
absolute community or conjugal
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partnership, winnings from gambling or
betting will form part thereof. Also, since
the land is part of the absolute community
or conjugal partnership of Richard and
Rica, it may not be sold or alienated
without the consent of the latter and any
disposition or encumbrance of the property
of the community or the conjugal property
without the consent of the other spouse is
void (Art 96 and Art 124, Family Code).
CHAPTER 3
EFFECTS OF THE CONTRACT
WHEN THE THING SOLD HAS BEEN LOST
Art. 1493. If at the time the contract of sale is
perfected, the thing which is the object of the
contract has been entirely lost, the contract shall be
without any effect.
But if the thing should have been lost in part only,
the vendee may choose between withdrawing from
the contract and demanding the remaining part,
paying its price in proportion to the total sum agreed
upon. (1460a)
Art. 1494. Where the parties purport a sale of
specific goods, and the goods without the
knowledge of the seller have perished in part or
have wholly or in a material part so deteriorated in
quality as to be substantially changed in character,
the buyer may at his option treat the sale:
(1) As avoided; or
(2) As valid in all of the existing goods or in
so much thereof as have not deteriorated,
and as binding the buyer to pay the agreed
price for the goods in which the ownership
will pass, if the sale was divisible. (n)
WHO BEARS THE RISK OF LOSS:
1. Before Perfection –
a. Res perit domino
b. Seller is the owner, so seller bears
the risk of loss.
2. At Perfection –
a. Res perit domino.
b. Contract is inefficacious because
loss of the subject matter does not
affect the validity of the sale.
c. Seller cannot anymore comply, so
buyer cannot anymore be
compelled.
3. After perfection but before delivery –
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
a. Loss – conflicting
I. Paras – buyer
II. Tolentino – seller
b. Deterioration and fruits – buyer
bears loss.
4. After delivery –
a. Res perit domino
b. Delivery extinguishes ownership.
c. Buyer bears the loss.
CHAPTER 4
OBLIGATIONS OF THE VENDOR
SECTION 1. - General Provisions
Art. 1495. The vendor is bound to transfer the
ownership of and deliver, as well as warrant the
thing which is the object of the sale. (1461a)
Delivery of the thing together with the payment of
the price marks the consummation of the contract of
sale (PNB vs. ling, 69 Phil. 611).
Art. 1496. The ownership of the thing sold is
acquired by the vendee from the moment it is
delivered to him in any of the ways specified in
Articles 1497 to 1501, or in any other manner
signifying an agreement that the possession is
transferred from the vendor to the vendee. (n)
SECTION 2. - Delivery of the Thing Sold
Art. 1497. The thing sold shall be understood as
delivered, when it is placed in the control and
possession of the vendee. (1462a)
The act of delivery must be coupled with the
intention of delivering the thing and putting
the buyer under control (Norkis Distributor vs.
CA, 195 SCRA 694).
Transfer of Ownership; Risk of Loss (1990)
D sold a second-hand car to E for P150,000.00 The
agreement between D and E was that half of the
purchase price, or P75,000.00, shall be paid upon
delivery of the car to E and the balance of P75,000.00
shall be paid in five equal monthly installments of
P15,000.00 each. The car was delivered to E, and E paid
the amount of P75.000.00 to D. Less than one month
thereafter, the car was stolen from E's garage with no
fault on E's part and was never recovered. Is E legally
bound to pay the said unpaid balance of P75.000.00?
Explain your answer.
SUGGESTED ANSWER:
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Yes, E is legally bound to pay the balance of P75,000.00.
The ownership of the car sold was acquired by E from the
moment it was delivered to him. Having acquired
ownership, E bears the risk of the loss of the thing under
the doctrine of res perit domino. [Articles 1496. 1497,
Civil Code).
Art. 1498. When the sale is made through a public
instrument, the execution thereof shall be
equivalent to the delivery of the thing which is the
object of the contract, if from the deed the contrary
does not appear or cannot clearly be inferred.
With regard to movable property, its delivery may
also be made by the delivery of the keys of the
place or depository where it is stored or kept.
(1463a)
The execution of a public instrument is
equivalent to delivery. But to be effective, it is
necessary that the vendor have such control
over the thing sold that, at the moment of
sale, its material delivery could have been
made (Adisson vs. Felix, 38 Phil. 404).
Art. 1499. The delivery of movable property may
likewise be made by the mere consent or
agreement of the contracting parties, if the thing
sold cannot be transferred to the possession of the
vendee at the time of the sale, or if the latter
already had it in his possession for any other
reason. (1463a)
Art. 1500. There may also be tradition constitutum
possessorium. (n)
Art. 1501. With respect to incorporeal property, the
provisions of the first paragraph of article 1498 shall
govern. In any other case wherein said provisions
are not applicable, the placing of the titles of
ownership in the possession of the vendee or the
use by the vendee of his rights, with the vendor's
consent, shall be understood as a delivery. (1464)
DIFFERENT KINDS OF DELIVERY:
1. Actual or Real – when thing sold is placed
in the control and possession of the buyer.
2. Legal or Constructive – can take several
forms and may be any manner signifying an
agreement that the possession is
transferred from the vendor to the vendee.
Note: Gives rise only to a prima facie
presumption of delivery which is
destroyed when actual delivery is not
effected because of some legal
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
impediment (Ten Forty Realty vs. Cruz,
10 Sept. 2003).
DIFFERENT KINDS OF CONSTRUCTIVE
DELIVERY:
1. Tradition Longa Manu – delivery of the
thing is by mere agreement as when the
seller points to the property without need of
actually delivering.
2. Tradition Brevi Manu – before contract of
sale, the would be buyer was already in
possession subject matter of sale (from
other title to owner title).
3. Constitutum Possessorium – the vendor
is allowed to remain in possession but not
in concept of an owner but in concept of a
mere holder (from owner title to other title).
4. Symbolic delivery – delivery of keys as to
movable.
5. Quasi-tradicion – delivery of rights, credits
or incorporeal property, made by:
a. Placing titles of ownership in the
hands of the buyer.
b. Allowing buyer to make use of
rights.
6. Tradition by operation of law.
WHEN EXECUTION OF PUBLIC INSTRUMENT
DOES NOT PRODUCE THE EFFECTS OF
DELIVERY:
1. When there is stipulation to contrary,
execution does not produce effect of
delivery.
2. When at the time of execution of
instrument, subject matter was not subject
to control of the seller.
a. Subject matter should be within control
of seller; he should have capacity to
deliver at the time he wants to effect
actual delivery.
b. Such capacity should subsist for a
reasonable time after the execution of
instrument.
3. When there is no intention to deliver.
TIME AND PLACE OF DELIVERY
1. Follow stipulation in contract; or
2. Follow usage in trade, or;
3. Seller’s place of business or his residence;
4. Specific goods – place where the thing is;
5. At a reasonable time.
EFFECTS OF DELIVERY
The ownership of the thing sold shall be transferred
to the buyer upon the actual or constructive
delivery.
Exception: When contrary is provided in the
contract, in cases of:
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1. Contract to sale;
2. Sale on acceptance/approval;
3. Sale or return.
Art. 1502. When goods are delivered to the buyer
"on sale or return" to give the buyer an option to
return the goods instead of paying the price, the
ownership passes to the buyer on delivery, but he
may revest the ownership in the seller by returning
or tendering the goods within the time fixed in the
contract, or, if no time has been fixed, within a
reasonable time. (n)
When goods are delivered to the buyer on approval
or on trial or on satisfaction, or other similar terms,
the ownership therein passes to the buyer:
(1) When he signifies his approval or
acceptance to the seller or does any other
act adopting the transaction;
(2) If he does not signify his approval or
acceptance to the seller, but retains the
goods without giving notice of rejection,
then if a time has been fixed for the return
of the goods, on the expiration of such time,
and, if no time has been fixed, on the
expiration of a reasonable time. What is a
reasonable time is a question of fact. (n)
Art. 1503. When there is a contract of sale of
specific goods, the seller may, by the terms of the
contract, reserve the right of possession or
ownership in the goods until certain conditions have
been fulfilled. The right of possession or ownership
may be thus reserved notwithstanding the delivery
of the goods to the buyer or to a carrier or other
bailee for the purpose of transmission to the buyer.
Where goods are shipped, and by the bill of lading
the goods are deliverable to the seller or his agent,
or to the order of the seller or of his agent, the seller
thereby reserves the ownership in the goods. But, if
except for the form of the bill of lading, the
ownership would have passed to the buyer on
shipment of the goods, the seller's property in the
goods shall be deemed to be only for the purpose
of securing performance by the buyer of his
obligations under the contract.
NOTE: What is reserved here is right of
ownership to the goods. But be careful, the
retention of ownership is only for the
purpose of securing performance of the
contract. Thus, risk of loss or deterioration
(without fault or negligence of the seller) is
on the buyer.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Where goods are shipped, and by the bill of lading
the goods are deliverable to order of the buyer or of
his agent, but possession of the bill of lading is
retained by the seller or his agent, the seller thereby
reserves a right to the possession of the goods as
against the buyer.
NOTE: What is reserve here is only right of
possession. Ownership is already
transferred to the buyer. The purpose is for
the exercise of possessory lien. That is,
the seller may exercise stoppage in
transitu, if seller is unpaid.
Where the seller of goods draws on the buyer for
the price and transmits the bill of exchange and bill
of lading together to the buyer to secure
acceptance or payment of the bill of exchange, the
buyer is bound to return the bill of lading if he does
not honor the bill of exchange, and if he wrongfully
retains the bill of lading he acquires no added right
thereby. If, however, the bill of lading provides that
the goods are deliverable to the buyer or to the
order of the buyer, or is indorsed in blank, or to the
buyer by the consignee named therein, one who
purchases in good faith, for value, the bill of lading,
or goods from the buyer will obtain the ownership in
the goods, although the bill of exchange has not
been honored, provided that such purchaser has
received delivery of the bill of lading indorsed by the
consignee named therein, or of the goods, without
notice of the facts making the transfer wrongful. (n)
Art. 1504. Unless otherwise agreed, the goods
remain at the seller's risk until the ownership therein
is transferred to the buyer, but when the ownership
therein is transferred to the buyer the goods are at
the buyer's risk whether actual delivery has been
made or not, except that:
(1) Where delivery of the goods has been
made to the buyer or to a bailee for the
buyer, in pursuance of the contract and the
ownership in the goods has been retained
by the seller merely to secure performance
by the buyer of his obligations under the
contract, the goods are at the buyer's risk
from the time of such delivery;
(2) Where actual delivery has been delayed
through the fault of either the buyer or seller
the goods are at the risk of the party in
fault. (n)
Art. 1505. Subject to the provisions of this Title,
where goods are sold by a person who is not the
owner thereof, and who does not sell them under
authority or with the consent of the owner, the buyer
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acquires no better title to the goods than the seller
had, unless the owner of the goods is by his
conduct precluded from denying the seller's
authority to sell.
Nothing in this Title, however, shall affect:
(1) The provisions of any factors' act,
recording laws, or any other provision of
law enabling the apparent owner of goods
to dispose of them as if he were the true
owner thereof;
(2) The validity of any contract of sale
under statutory power of sale or under the
order of a court of competent jurisdiction;
(3) Purchases made in a merchant's store,
or in fairs, or markets, in accordance with
the Code of Commerce and special laws.
(n)
Art. 1506. Where the seller of goods has a voidable
title thereto, but his title has not been avoided at the
time of the sale, the buyer acquires a good title to
the goods, provided he buys them in good faith, for
value, and without notice of the seller's defect of
title. (n)
SALE BY NON-OWNER
1. Perfection Stage –
a. Sale by owner – VALID
b. Sale by non-owner – VALID.
Reason: Ownership is not
necessary in the perfection stage.
Ownership is necessary only at the
time of delivery, that is the time of
transfer of title to the buyer.
2. Consummation stage –
a. Contract of sale is valid because it
has passed perfected stage,
despite seller not being the owner
or seller having no authority to sell.
b. What is void is the transfer of title –
ownership did not pass.
Effect: buyer acquired no better
right than transferor.
Art. 1507. A document of title in which it is stated
that the goods referred to therein will be delivered
to the bearer, or to the order of any person named
in such document is a negotiable document of title.
(n)
Art. 1508. A negotiable document of title may be
negotiated by delivery:
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(1) Where by the terms of the document the
carrier, warehouseman or other bailee
issuing the same undertakes to deliver the
goods to the bearer; or
(2) Where by the terms of the document the
carrier, warehouseman or other bailee
issuing the same undertakes to deliver the
goods to the order of a specified person,
and such person or a subsequent endorsee
of the document has indorsed it in blank or
to the bearer.
Where by the terms of a negotiable document of
title the goods are deliverable to bearer or where a
negotiable document of title has been indorsed in
blank or to bearer, any holder may indorse the
same to himself or to any specified person, and in
such case the document shall thereafter be
negotiated only by the endorsement of such
endorsee. (n)
Art. 1509. A negotiable document of title may be
negotiated by the endorsement of the person to
whose order the goods are by the terms of the
document deliverable. Such endorsement may be
in blank, to bearer or to a specified person. If
indorsed to a specified person, it may be again
negotiated by the endorsement of such person in
blank, to bearer or to another specified person.
Subsequent negotiations may be made in like
manner. (n)
Art. 1510. If a document of title which contains an
undertaking by a carrier, warehouseman or other
bailee to deliver the goods to bearer, to a specified
person or order of a specified person or which
contains words of like import, has placed upon it the
words "not negotiable," "non-negotiable" or the like,
such document may nevertheless be negotiated by
the holder and is a negotiable document of title
within the meaning of this Title. But nothing in this
Title contained shall be construed as limiting or
defining the effect upon the obligations of the
carrier, warehouseman, or other bailee issuing a
document of title or placing thereon the words "not
negotiable," "non-negotiable," or the like. (n)
Art. 1511. A document of title which is not in such
form that it can be negotiated by delivery may be
transferred by the holder by delivery to a purchaser
or donee. A non-negotiable document cannot be
negotiated and the endorsement of such a
document gives the transferee no additional right.
(n)
Art. 1512. A negotiable document of title may be
negotiated:
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(1) By the owner therefor; or
(2) By any person to whom the possession
or custody of the document has been
entrusted by the owner, if, by the terms of
the document the bailee issuing the
document undertakes to deliver the goods
to the order of the person to whom the
possession or custody of the document has
been entrusted, or if at the time of such
entrusting the document is in such form that
it may be negotiated by delivery. (n)
Art. 1513. A person to whom a negotiable
document of title has been duly negotiated acquires
thereby:
(1) Such title to the goods as the person
negotiating the document to him had or had
ability to convey to a purchaser in good
faith for value and also such title to the
goods as the person to whose order the
goods were to be delivered by the terms of
the document had or had ability to convey
to a purchaser in good faith for value; and
(2) The direct obligation of the bailee
issuing the document to hold possession of
the goods for him according to the terms of
the document as fully as if such bailee had
contracted directly with him. (n)
Art. 1514. A person to whom a document of title has
been transferred, but not negotiated, acquires
thereby, as against the transferor, the title to the
goods, subject to the terms of any agreement with
the transferor.
If the document is non-negotiable, such person also
acquires the right to notify the bailee who issued the
document of the transfer thereof, and thereby to
acquire the direct obligation of such bailee to hold
possession of the goods for him according to the
terms of the document.
Prior to the notification to such bailee by the
transferor or transferee of a non-negotiable
document of title, the title of the transferee to the
goods and the right to acquire the obligation of such
bailee may be defeated by the levy of an
attachment of execution upon the goods by a
creditor of the transferor, or by a notification to such
bailee by the transferor or a subsequent purchaser
from the transfer of a subsequent sale of the goods
by the transferor. (n)
Art. 1515. Where a negotiable document of title is
transferred for value by delivery, and the
endorsement of the transferor is essential for
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
negotiation, the transferee acquires a right against
the transferor to compel him to endorse the
document unless a contrary intention appears. The
negotiation shall take effect as of the time when the
endorsement is actually made. (n)
Art. 1516. A person who for value negotiates or
transfers a document of title by endorsement or
delivery, including one who assigns for value a
claim secured by a document of title unless a
contrary intention appears, warrants:
(1) That the document is genuine;
(2) That he has a legal right to negotiate or
transfer it;
(3) That he has knowledge of no fact which
would impair the validity or worth of the
document; and
(4) That he has a right to transfer the title to
the goods and that the goods are
merchantable or fit for a particular purpose,
whenever such warranties would have
been implied if the contract of the parties
had been to transfer without a document of
title the goods represented thereby. (n)
Art. 1517. The endorsement of a document of title
shall not make the endorser liable for any failure on
the part of the bailee who issued the document or
previous endorsers thereof to fulfill their respective
obligations. (n)
Art. 1518. The validity of the negotiation of a
negotiable document of title is not impaired by the
fact that the negotiation was a breach of duty on the
part of the person making the negotiation, or by the
fact that the owner of the document was deprived of
the possession of the same by loss, theft, fraud,
accident, mistake, duress, or conversion, if the
person to whom the document was negotiated or a
person to whom the document was subsequently
negotiated paid value therefor in good faith without
notice of the breach of duty, or loss, theft, fraud,
accident, mistake, duress or conversion. (n)
Art. 1519. If goods are delivered to a bailee by the
owner or by a person whose act in conveying the
title to them to a purchaser in good faith for value
would bind the owner and a negotiable document of
title is issued for them they cannot thereafter, while
in possession of such bailee, be attached by
garnishment or otherwise or be levied under an
execution unless the document be first surrendered
to the bailee or its negotiation enjoined. The bailee
shall in no case be compelled to deliver up the
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actual possession of the goods until the document
is surrendered to him or impounded by the court.
(n)
Art. 1520. A creditor whose debtor is the owner of a
negotiable document of title shall be entitled to such
aid from courts of appropriate jurisdiction by
injunction and otherwise in attaching such
document or in satisfying the claim by means
thereof as is allowed at law or in equity in regard to
property which cannot readily be attached or levied
upon by ordinary legal process. (n)
Art. 1521. Whether it is for the buyer to take
possession of the goods or of the seller to send
them to the buyer is a question depending in each
case on the contract, express or implied, between
the parties. Apart from any such contract, express
or implied, or usage of trade to the contrary, the
place of delivery is the seller's place of business if
he has one, and if not his residence; but in case of
a contract of sale of specific goods, which to the
knowledge of the parties when the contract or the
sale was made were in some other place, then that
place is the place of delivery.
Where by a contract of sale the seller is bound to
send the goods to the buyer, but no time for
sending them is fixed, the seller is bound to send
them within a reasonable time.
Where the goods at the time of sale are in the
possession of a third person, the seller has not
fulfilled his obligation to deliver to the buyer unless
and until such third person acknowledges to the
buyer that he holds the goods on the buyer's behalf.
Demand or tender of delivery may be treated as
ineffectual unless made at a reasonable hour. What
is a reasonable hour is a question of fact.
Unless otherwise agreed, the expenses of and
incidental to putting the goods into a deliverable
state must be borne by the seller. (n)
Art. 1522. Where the seller delivers to the buyer a
quantity of goods less than he contracted to sell,
the buyer may reject them, but if the buyer accepts
or retains the goods so delivered, knowing that the
seller is not going to perform the contract in full, he
must pay for them at the contract rate. If, however,
the buyer has used or disposed of the goods
delivered before he knows that the seller is not
going to perform his contract in full, the buyer shall
not be liable for more than the fair value to him of
the goods so received.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Where the seller delivers to the buyer a quantity of
goods larger than he contracted to sell, the buyer
may accept the goods included in the contract and
reject the rest. If the buyer accepts the whole of the
goods so delivered he must pay for them at the
contract rate.
Where the seller delivers to the buyer the goods he
contracted to sell mixed with goods of a different
description not included in the contract, the buyer
may accept the goods which are in accordance with
the contract and reject the rest.
In the preceding two paragraphs, if the subject
matter is indivisible, the buyer may reject the whole
of the goods.
The provisions of this article are subject to any
usage of trade, special agreement, or course of
dealing between the parties. (n)
2011 Bar Exam Question
(34) A buyer ordered 5,000 apples from the
seller at P20 per apple. The seller delivered
6,000 apples. What are the rights and
obligations of the buyer? (A) He can accept all
6,000 apples and pay the seller at P20 per
apple. (B) He can accept all 6,000 apples and
pay a lesser price for the 1,000 excess apples.
(C) He can keep the 6,000 apples without
paying for the 1,000 excess since the seller
delivered them anyway. (D) He can cancel the
whole transaction since the seller violated the
terms of their agreement.
Art. 1523. Where, in pursuance of a contract of
sale, the seller is authorized or required to send the
goods to the buyer, delivery of the goods to a
carrier, whether named by the buyer or not, for the
purpose of transmission to the buyer is deemed to
be a delivery of the goods to the buyer, except in
the case provided for in Article 1503, first, second
and third paragraphs, or unless a contrary intent
appears.
Unless otherwise authorized by the buyer, the seller
must make such contract with the carrier on behalf
of the buyer as may be reasonable, having regard
to the nature of the goods and the other
circumstances of the case. If the seller omits so to
do, and the goods are lost or damaged in course of
transit, the buyer may decline to treat the delivery to
the carrier as a delivery to himself, or may hold the
seller responsible in damages.
Unless otherwise agreed, where goods are sent by
the seller to the buyer under circumstances in which
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the seller knows or ought to know that it is usual to
insure, the seller must give such notice to the buyer
as may enable him to insure them during their
transit, and, if the seller fails to do so, the goods
shall be deemed to be at his risk during such
transit. (n)
Connect to 1582, NCC.
DELIVERY THROUGH CARRIER
GR: Where the seller is authorized or required to
send the goods to the buyer, delivery to the carrier
is delivery to the buyer.
EXCEPTION: When contrary intention appears or
implied reservation of ownership under pars. 1, 2, 3
of art. 1503, NCC.
1. FAS – FREE ALONG SIDE – when goods
delivered alongside the ship, there is
already delivery to the buyer (twin effects
deemed fulfilled).
2. FOB – FREE ON BOARD –
a. Shipment - when goods are
delivered at ship at point of
shipment; delivery to carrier by
placing the goods on vessel is
delivery to the buyer.
b. Destination – when goods reach
the port, even if not disembarked
yet from the vessel, there is
delivery to the buyer.
3. CIF –COST, INSURANCE, FREIGHT –
a. When buyer pays for services of
carrier, delivery to carrier is delivery
to buyer (carrier is agent of the
buyer).
b. When buyer pays seller the price –
from moment the vessel is at port
of destination, there is already
delivery to buyer.
Art. 1524. The vendor shall not be bound to deliver
the thing sold, if the vendee has not paid him the
price, or if no period for the payment has been fixed
in the contract. (1466)
Art. 1525. The seller of goods is deemed to be an
unpaid seller within the meaning of this Title:
(1) When the whole of the price has not
been paid or tendered;
(2) When a bill of exchange or other
negotiable instrument has been received as
conditional payment, and the condition on
which it was received has been broken by
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
reason of the dishonor of the instrument,
the insolvency of the buyer, or otherwise.
In Articles 1525 to 1535 the term "seller" includes
an agent of the seller to whom the bill of lading has
been indorsed, or a consignor or agent who has
himself paid, or is directly responsible for the price,
or any other person who is in the position of a
seller. (n)
THE FOLLOWING ARTICLES ARE REMEDIES
OF AN UNPAID SELLER:
SPECIAL REMEDIES OF UNPAID SELLER:
1. Possessory lien;
2. Stoppage in transitu;
3. Special right of re-sale;
4. Special right to rescind.
Art. 1526. Subject to the provisions of this Title,
notwithstanding that the ownership in the goods
may have passed to the buyer, the unpaid seller of
goods, as such, has:
(1) A lien on the goods or right to retain
them for the price while he is in possession
of them;
(2) In case of the insolvency of the buyer, a
right of stopping the goods in transitu after
he has parted with the possession of them;
(3) A right of resale as limited by this Title;
(4) A right to rescind the sale as likewise
limited by this Title.
Where the ownership in the goods has not passed
to the buyer, the unpaid seller has, in addition to his
other remedies a right of withholding delivery similar
to and coextensive with his rights of lien and
stoppage in transitu where the ownership has
passed to the buyer. (n)
Art. 1527. Subject to the provisions of this Title, the
unpaid seller of goods who is in possession of them
is entitled to retain possession of them until
payment or tender of the price in the following
cases, namely:
(1) Where the goods have been sold
without any stipulation as to credit;
(2) Where the goods have been sold on
credit, but the term of credit has expired;
(3) Where the buyer becomes insolvent.
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The seller may exercise his right of lien
notwithstanding that he is in possession of the
goods as agent or bailee for the buyer. (n)
Art. 1528. Where an unpaid seller has made part
delivery of the goods, he may exercise his right of
lien on the remainder, unless such part delivery has
been made under such circumstances as to show
an intent to waive the lien or right of retention. (n)
Art. 1529. The unpaid seller of goods loses his lien
thereon:
(1) When he delivers the goods to a carrier
or other bailee for the purpose of
transmission to the buyer without reserving
the ownership in the goods or the right to
the possession thereof;
(2) When the buyer or his agent lawfully
obtains possession of the goods;
(3) By waiver thereof.
The unpaid seller of goods, having a lien thereon,
does not lose his lien by reason only that he has
obtained judgment or decree for the price of the
goods. (n)
Art. 1530. Subject to the provisions of this Title,
when the buyer of goods is or becomes insolvent,
the unpaid seller who has parted with the
possession of the goods has the right of stopping
them in transitu, that is to say, he may resume
possession of the goods at any time while they are
in transit, and he will then become entitled to the
same rights in regard to the goods as he would
have had if he had never parted with the
possession. (n)
Art. 1531. Goods are in transit within the meaning
of the preceding article:
(1) From the time when they are delivered
to a carrier by land, water, or air, or other
bailee for the purpose of transmission to
the buyer, until the buyer, or his agent in
that behalf, takes delivery of them from
such carrier or other bailee;
(2) If the goods are rejected by the buyer,
and the carrier or other bailee continues in
possession of them, even if the seller has
refused to receive them back.
Goods are no longer in transit within the meaning of
the preceding article:
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(1) If the buyer, or his agent in that behalf,
obtains delivery of the goods before their
arrival at the appointed destination;
(2) If, after the arrival of the goods at the
appointed destination, the carrier or other
bailee acknowledges to the buyer or his
agent that he holds the goods on his behalf
and continues in possession of them as
bailee for the buyer or his agent; and it is
immaterial that further destination for the
goods may have been indicated by the
buyer;
(3) If the carrier or other bailee wrongfully
refuses to deliver the goods to the buyer or
his agent in that behalf.
If the goods are delivered to a ship, freight train,
truck, or airplane chartered by the buyer, it is a
question depending on the circumstances of the
particular case, whether they are in the possession
of the carrier as such or as agent of the buyer.
If part delivery of the goods has been made to the
buyer, or his agent in that behalf, the remainder of
the goods may be stopped in transitu, unless such
part delivery has been under such circumstances
as to show an agreement with the buyer to give up
possession of the whole of the goods. (n)
Art. 1532. The unpaid seller may exercise his right
of stoppage in transitu either by obtaining actual
possession of the goods or by giving notice of his
claim to the carrier or other bailee in whose
possession the goods are. Such notice may be
given either to the person in actual possession of
the goods or to his principal. In the latter case the
notice, to be effectual, must be given at such time
and under such circumstances that the principal, by
the exercise of reasonable diligence, may prevent a
delivery to the buyer.
When notice of stoppage in transitu is given by the
seller to the carrier, or other bailee in possession of
the goods, he must redeliver the goods to, or
according to the directions of, the seller. The
expenses of such delivery must be borne by the
seller. If, however, a negotiable document of title
representing the goods has been issued by the
carrier or other bailee, he shall not obliged to deliver
or justified in delivering the goods to the seller
unless such document is first surrendered for
cancellation. (n)
Art. 1533. Where the goods are of perishable
nature, or where the seller expressly reserves the
right of resale in case the buyer should make
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default, or where the buyer has been in default in
the payment of the price for an unreasonable time,
an unpaid seller having a right of lien or having
stopped the goods in transitu may resell the goods.
He shall not thereafter be liable to the original buyer
upon the contract of sale or for any profit made by
such resale, but may recover from the buyer
damages for any loss occasioned by the breach of
the contract of sale.
Where a resale is made, as authorized in this
article, the buyer acquires a good title as against
the original buyer.
It is not essential to the validity of resale that notice
of an intention to resell the goods be given by the
seller to the original buyer. But where the right to
resell is not based on the perishable nature of the
goods or upon an express provision of the contract
of sale, the giving or failure to give such notice shall
be relevant in any issue involving the question
whether the buyer had been in default for an
unreasonable time before the resale was made.
It is not essential to the validity of a resale that
notice of the time and place of such resale should
be given by the seller to the original buyer.
The seller is bound to exercise reasonable care and
judgment in making a resale, and subject to this
requirement may make a resale either by public or
private sale. He cannot, however, directly or
indirectly buy the goods. (n)
Art. 1534. An unpaid seller having the right of lien or
having stopped the goods in transitu, may rescind
the transfer of title and resume the ownership in the
goods, where he expressly reserved the right to do
so in case the buyer should make default, or where
the buyer has been in default in the payment of the
price for an unreasonable time. The seller shall not
thereafter be liable to the buyer upon the contract of
sale, but may recover from the buyer damages for
any loss occasioned by the breach of the contract.
The transfer of title shall not be held to have been
rescinded by an unpaid seller until he has
manifested by notice to the buyer or by some other
overt act an intention to rescind. It is not necessary
that such overt act should be communicated to the
buyer, but the giving or failure to give notice to the
buyer of the intention to rescind shall be relevant in
any issue involving the question whether the buyer
had been in default for an unreasonable time before
the right of rescission was asserted. (n)
Art. 1535. Subject to the provisions of this Title, the
unpaid seller's right of lien or stoppage in transitu is
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
not affected by any sale, or other disposition of the
goods which the buyer may have made, unless the
seller has assented thereto.
If, however, a negotiable document of title has been
issued for goods, no seller's lien or right of
stoppage in transitu shall defeat the right of any
purchaser for value in good faith to whom such
document has been negotiated, whether such
negotiation be prior or subsequent to the notification
to the carrier, or other bailee who issued such
document, of the seller's claim to a lien or right of
stoppage in transitu. (n)
Art. 1536. The vendor is not bound to deliver the
thing sold in case the vendee should lose the right
to make use of the terms as provided in Article
1198. (1467a)
Art. 1537. The vendor is bound to deliver the thing
sold and its accessions and accessories in the
condition in which they were upon the perfection of
the contract.
All the fruits shall pertain to the vendee from the
day on which the contract was perfected. (1468a)
Art. 1538. In case of loss, deterioration or
improvement of the thing before its delivery, the
rules in Article 1189 shall be observed, the vendor
being considered the debtor. (n)
Art. 1539. The obligation to deliver the thing sold
includes that of placing in the control of the vendee
all that is mentioned in the contract, in conformity
with the following rules:
If the sale of real estate should be made with a
statement of its area, at the rate of a certain price
for a unit of measure or number, the vendor shall be
obliged to deliver to the vendee, if the latter should
demand it, all that may have been stated in the
contract; but, should this be not possible, the
vendee may choose between a proportional
reduction of the price and the rescission of the
contract, provided that, in the latter case, the lack in
the area be not less than one-tenth of that stated.
The same shall be done, even when the area is the
same, if any part of the immovable is not of the
quality specified in the contract.
The rescission, in this case, shall only take place at
the will of the vendee, when the inferior value of the
thing sold exceeds one-tenth of the price agreed
upon.
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Nevertheless, if the vendee would not have bought
the immovable had he known of its smaller area of
inferior quality, he may rescind the sale. (1469a)
Art. 1540. If, in the case of the preceding article,
there is a greater area or number in the immovable
than that stated in the contract, the vendee may
accept the area included in the contract and reject
the rest. If he accepts the whole area, he must pay
for the same at the contract rate. (1470a)
Art. 1541. The provisions of the two preceding
articles shall apply to judicial sales. (n)
Art. 1542. In the sale of real estate, made for a
lump sum and not at the rate of a certain sum for a
unit of measure or number, there shall be no
increase or decrease of the price, although there be
a greater or less area or number than that stated in
the contract.
The same rule shall be applied when two or more
immovables as sold for a single price; but if,
besides mentioning the boundaries, which is
indispensable in every conveyance of real estate,
its area or number should be designated in the
contract, the vendor shall be bound to deliver all
that is included within said boundaries, even when it
exceeds the area or number specified in the
contract; and, should he not be able to do so, he
shall suffer a reduction in the price, in proportion to
what is lacking in the area or number, unless the
contract is rescinded because the vendee does not
accede to the failure to deliver what has been
stipulated. (1471)
Art. 1543. The actions arising from Articles 1539
and 1542 shall prescribe in six months, counted
from the day of delivery. (1472a)
Art. 1544. If the same thing should have been sold
to different vendees, the ownership shall be
transferred to the person who may have first taken
possession thereof in good faith, if it should be
movable property.
Should it be immovable property, the ownership
shall belong to the person acquiring it who in good
faith first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall
pertain to the person who in good faith was first in
the possession; and, in the absence thereof, to the
person who presents the oldest title, provided there
is good faith. (1473)
REQUISITES: (double sale)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
1. Two or more sales transactions must
constitute valid sales;
2. Two or more sales transactions must
pertain to the same object or subject
matter;
3. Two or more buyers at odds over the
rightful ownership of the subject matter
must each represent conflicting interest;
and
4. Two or more buyers must have bought from
the very same seller.
If not all the elements are present for art. 1544 to
apply, the principle of “prior tempore, potior jure”
(he who is first in time is preferred in right) should
apply (Consolidated Rural Bank vs. CA, Jan. 17,
2005).
Good faith must concur with registration. To be
entitled to priority, the 2nd purchaser must not only
establish prior recording of his deed, but must have
acted in good faith (Gabriel vs. Mabanta, et al.
[2003]).
Double Sales (2001)
On June 15, 1995, Jesus sold a parcel of registered land
to Jaime. On June 30, 1995, he sold the same land to
Jose. Who has a better right if: a) the first sale is
registered ahead of the second sale,
with knowledge of the latter. Why? (3%) b) the second
sale is registered ahead of the first sale,
with knowledge of the latter? Why? (5%)
SUGGESTED ANSWER:
(a) The first buyer has the better right if his sale was first
to be registered, even though the first buyer knew of the
second sale. The fact that he knew of the second sale at
the time of his registration does not make him as acting in
bad faith because the sale to him was ahead in time,
hence, has a priority in right. What creates bad faith in the
case of double sale of land is knowledge of a previous
sale.
b) The first buyer is still to be preferred, where the second
(2) years, or until 3 June 1973. It is further stated therein
sale is registered ahead of the first sale but with
knowledge of the latter. This is because the second
buyer, who at the time he registered his sale knew that
the property had already been sold to someone else,
acted in bad faith. (Article 1544, C.C.)
Double Sales (2004)
JV, owner of a parcel of land, sold it to PP. But the deed
of sale was not registered. One year later, JV sold the
parcel again to RR, who succeeded to register the deed
and to obtain a transfer certificate of title over the
property in his own name. Who has a better right over the
parcel of land, RR or PP? Why? Explain the legal basis
for your answer. (5%)
SUGGESTED ANSWER:
It depends on whether or not RR is an innocent
purchaser for value. Under the Torrens System, a deed
or instrument operated only as a contract between the
parties and as evidence of authority to the Register of
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Deeds to make the registration. It is the registration of the
deed or the instrument that is the operative act that
conveys or affects the land. (Sec. 51, P.D. No. 1529).
In cases of double sale of titled land, it is a well-settled
rule that the buyer who first registers the sale in good
faith acquires a better right to the land. (Art. 1544, Civil
Code).
Persons dealing with property covered by Torrens title
are not required to go beyond what appears on its face.
(Orquiola v. CA 386, SCRA 301, [2002]; Domingo v.
Races 401 SCRA 197, [2003]). Thus, absent any
showing that RR knew about, or ought to have known the
prior sale of the land to PP or that he acted in bad faith,
and being first to register the sale, RR acquired a good
and a clean title to the property as against PP.
SECTION 3. - Conditions and Warranties
Art. 1545. Where the obligation of either party to a
contract of sale is subject to any condition which is
not performed, such party may refuse to proceed
with the contract or he may waive performance of
the condition. If the other party has promised that
the condition should happen or be performed, such
first mentioned party may also treat the
nonperformance of the condition as a breach of
warranty.
Where the ownership in the thing has not passed,
the buyer may treat the fulfillment by the seller of
his obligation to deliver the same as described and
as warranted expressly or by implication in the
contract of sale as a condition of the obligation of
the buyer to perform his promise to accept and pay
for the thing. (n)
Rescission of Contracts; Proper Party (1996)
In December 1985, Salvador and the Star Semiconductor
Company (SSC) executed a Deed of Conditional Sale
wherein the former agreed to sell his 2,000 square meter
lot in Cainta, Rizal, to the latter for the price of
P1,000,000.00, payable P100,000.00 down, and the
balance 60 days after the squatters in the property have
been removed. If the squatters are not removed within six
months, the P100,000.00 down payment shall be
returned by the vendor to the vendee, Salvador filed
ejectment suits against the squatters, but in spite of the
decisions in his favor, the squatters still would not leave.
In August, 1986, Salvador offered to return the
P100,000.00 down payment to the vendee, on the ground
that he is unable to remove the squatters on the property.
SSC refused to accept the money and demanded that
Salvador execute a deed of absolute sale of the property
in its favor, at which time it will pay the balance of the
price. Incidentally, the value of the land had doubled by
that time.
Salvador consigned the P 100,000.00 in court, and filed
an property of ZY, his wife may also sue to recover it
underaction for rescission of the deed of conditional sale,
plus damages. Will the action prosper? Explain.
SUGGESTED ANSWER:
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
No, the action will not prosper. The action for rescission
may be brought only by the aggrieved party to the
contract. Since it was Salvador who failed to comply with
his conditional obligation, he is not the aggrieved party
who may file the action for rescission but the Star
Semiconductor Company. The company, however, is not
opting to rescind the contract but has chosen to waive
Salvador's compliance with the condition which it can do
under Art. 1545, NCC.
ALTERNATIVE ANSWER:
The action for rescission will not prosper. The buyer has
not committed any breach, let alone a substantial or
serious one, to warrant the rescission/resolution sought
by the vendor. On the contrary, it is the vendor who
appears to have failed to comply with the condition
imposed by the contract the fulfillment of which would
have rendered the obligation to pay the balance of the
purchase price demandable. Further, far from being
unable to comply with what is incumbent upon it, ie., pay
the balance of the price ¬the buyer has offered to pay it
even without the vendor having complied with the
suspensive condition attached to the payment of the
price, thus waiving such condition as well as the 60-day
term in its favor The stipulation that the P100,000.00
down payment shall be returned by the vendor to the
vendee if the squatters are not removed within six
months, is also a covenant for the benefit of the vendee,
which the latter has validly waived by implication when it
offered to pay the balance of the purchase price upon the
execution of a deed of absolute sale by the vendor. (Art.
1545, NCC)
Art. 1546. Any affirmation of fact or any promise by
the seller relating to the thing is an express
warranty if the natural tendency of such affirmation
or promise is to induce the buyer to purchase the
same, and if the buyer purchase the thing relying
thereon. No affirmation of the value of the thing, nor
any statement purporting to be a statement of the
seller's opinion only, shall be construed as a
warranty, unless the seller made such affirmation or
statement as an expert and it was relied upon by
the buyer. (n)
Art. 1547. In a contract of sale, unless a contrary
intention appears, there is:
(1) An implied warranty on the part of the
seller that he has a right to sell the thing at
the time when the ownership is to pass,
and that the buyer shall from that time have
and enjoy the legal and peaceful
possession of the thing;
(2) An implied warranty that the thing shall
be free from any hidden faults or defects, or
any charge or encumbrance not declared or
known to the buyer.
This Article shall not, however, be held to render
liable a sheriff, auctioneer, mortgagee, pledgee, or
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other person professing to sell by virtue of authority
in fact or law, for the sale of a thing in which a third
person has a legal or equitable interest. (n)
Connect to 1552.
SUBSECTION 1. - Warranty in Case of Eviction
Art. 1548. Eviction shall take place whenever by a
final judgment based on a right prior to the sale or
an act imputable to the vendor, the vendee is
deprived of the whole or of a part of the thing
purchased.
The vendor shall answer for the eviction even
though nothing has been said in the contract on the
subject.
The contracting parties, however, may increase,
diminish, or suppress this legal obligation of the
vendor. (1475a)
Art. 1549. The vendee need not appeal from the
decision in order that the vendor may become liable
for eviction. (n)
Art. 1550. When adverse possession had been
commenced before the sale but the prescriptive
period is completed after the transfer, the vendor
shall not be liable for eviction. (n)
Art. 1551. If the property is sold for nonpayment of
taxes due and not made known to the vendee
before the sale, the vendor is liable for eviction. (n)
Art. 1552. The judgment debtor is also responsible
for eviction in judicial sales, unless it is otherwise
decreed in the judgment. (n)
Art. 1553. Any stipulation exempting the vendor
from the obligation to answer for eviction shall be
void, if he acted in bad faith. (1476)
Art. 1554. If the vendee has renounced the right to
warranty in case of eviction, and eviction should
take place, the vendor shall only pay the value
which the thing sold had at the time of the eviction.
Should the vendee have made the waiver with
knowledge of the risks of eviction and assumed its
consequences, the vendor shall not be liable.
(1477)
Art. 1555. When the warranty has been agreed
upon or nothing has been stipulated on this point, in
case eviction occurs, the vendee shall have the
right to demand of the vendor:
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(1) The return of the value which the thing
sold had at the time of the eviction, be it
greater or less than the price of the sale;
(2) The income or fruits, if he has been
ordered to deliver them to the party who
won the suit against him;
(3) The costs of the suit which caused the
eviction, and, in a proper case, those of the
suit brought against the vendor for the
warranty;
(4) The expenses of the contract, if the
vendee has paid them;
(5) The damages and interests, and
ornamental expenses, if the sale was made
in bad faith. (1478)
Art. 1556. Should the vendee lose, by reason of the
eviction, a part of the thing sold of such importance,
in relation to the whole, that he would not have
bought it without said part, he may demand the
rescission of the contract; but with the obligation to
return the thing without other encumbrances that
those which it had when he acquired it.
He may exercise this right of action, instead of
enforcing the vendor's liability for eviction.
The same rule shall be observed when two or more
things have been jointly sold for a lump sum, or for
a separate price for each of them, if it should clearly
appear that the vendee would not have purchased
one without the other. (1479a)
Art. 1557. The warranty cannot be enforced until a
final judgment has been rendered, whereby the
vendee loses the thing acquired or a part thereof.
(1480)
Art. 1558. The vendor shall not be obliged to make
good the proper warranty, unless he is summoned
in the suit for eviction at the instance of the vendee.
(1481a)
Art. 1559. The defendant vendee shall ask, within
the time fixed in the Rules of Court for answering
the complaint, that the vendor be made a co-
defendant. (1482a)
Art. 1560. If the immovable sold should be
encumbered with any non-apparent burden or
servitude, not mentioned in the agreement, of such
a nature that it must be presumed that the vendee
would not have acquired it had he been aware
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thereof, he may ask for the rescission of the
contract, unless he should prefer the appropriate
indemnity. Neither right can be exercised if the non-
apparent burden or servitude is recorded in the
Registry of Property, unless there is an express
warranty that the thing is free from all burdens and
encumbrances.
Within one year, to be computed from the execution
of the deed, the vendee may bring the action for
rescission, or sue for damages.
One year having elapsed, he may only bring an
action for damages within an equal period, to be
counted from the date on which he discovered the
burden or servitude. (1483a)
SUBSECTION 2. - Warranty Against Hidden
Defects
of or Encumbrances Upon the Thing Sold
2011 Bar Exam
(68) A warranty inherent in a contract of sale,
whether or not mentioned in it, is known as
the (A) warranty on quality. (B) warranty
against hidden defects. (C) warranty against
eviction. (D) warranty in merchantability.
Art. 1561. The vendor shall be responsible for
warranty against the hidden defects which the thing
sold may have, should they render it unfit for the
use for which it is intended, or should they diminish
its fitness for such use to such an extent that, had
the vendee been aware thereof, he would not have
acquired it or would have given a lower price for it;
but said vendor shall not be answerable for patent
defects or those which may be visible, or for those
which are not visible if the vendee is an expert who,
by reason of his trade or profession, should have
known them. (1484a)
2011 Bar Exam Question
(36) Knowing that the car had a hidden crack
in the engine, X sold it to Y without informing
the latter about it. In any event, the deed of
sale expressly stipulated that X was not liable
for hidden defects. Does Y have the right to
demand from X a reimbursement of what he
spent to repair the engine plus damages? (A)
Yes. X is liable whether or not he was aware of
the hidden defect. (B) Yes, since the defect
was not hidden; X knew of it but he acted
in bad faith in not disclosing the fact to Y.
(C) No, because Y is in estoppel, having
changed engine without prior demand. (D) No,
because Y waived the warranty against hidden
defects.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 1562. In a sale of goods, there is an implied
warranty or condition as to the quality or fitness of
the goods, as follows:
(1) Where the buyer, expressly or by
implication, makes known to the seller the
particular purpose for which the goods are
acquired, and it appears that the buyer
relies on the seller's skill or judgment
(whether he be the grower or manufacturer
or not), there is an implied warranty that the
goods shall be reasonably fit for such
purpose;
(2) Where the goods are brought by
description from a seller who deals in
goods of that description (whether he be
the grower or manufacturer or not), there is
an implied warranty that the goods shall be
of merchantable quality. (n)
2011 Bar Exam Question
(37) Acme Cannery produced sardines in cans
known as "Sards." Mylene bought a can of
Sards from a store, ate it, and suffered from
poisoning caused by a noxious substance
found in the sardines. Mylene filed a case for
damages against Acme. Which of the following
defenses will hold? (A) The expiry date of the
"Sards" was clearly printed on its can, still
the store sold and Mylene bought it. (B)
Mylene must have detected the noxious
substance in the sardines by smell, yet she
still ate it. (C) Acme had no transaction with
Mylene; she bought the "Sards" from a store,
not directly from Acme. (D) Acme enjoys the
presumption of safeness of its canning
procedure and Mylene has not overcome such
presumption.
Art. 1563. In the case of contract of sale of a
specified article under its patent or other trade
name, there is no warranty as to its fitness for any
particular purpose, unless there is a stipulation to
the contrary. (n)
Art. 1564. An implied warranty or condition as to the
quality or fitness for a particular purpose may be
annexed by the usage of trade. (n)
Art. 1565. In the case of a contract of sale by
sample, if the seller is a dealer in goods of that kind,
there is an implied warranty that the goods shall be
free from any defect rendering them
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unmerchantable which would not be apparent on
reasonable examination of the sample. (n)
Art. 1566. The vendor is responsible to the vendee
for any hidden faults or defects in the thing sold,
even though he was not aware thereof.
This provision shall not apply if the contrary has
been stipulated, and the vendor was not aware of
the hidden faults or defects in the thing sold. (1485)
Art. 1567. In the cases of Articles 1561, 1562, 1564,
1565 and 1566, the vendee may elect between
withdrawing from the contract and demanding a
proportionate reduction of the price, with damages
in either case. (1486a)
Art. 1568. If the thing sold should be lost in
consequence of the hidden faults, and the vendor
was aware of them, he shall bear the loss, and shall
be obliged to return the price and refund the
expenses of the contract, with damages. If he was
not aware of them, he shall only return the price
and interest thereon, and reimburse the expenses
of the contract which the vendee might have paid.
(1487a)
Art. 1569. If the thing sold had any hidden fault at
the time of the sale, and should thereafter be lost by
a fortuitous event or through the fault of the vendee,
the latter may demand of the vendor the price which
he paid, less the value which the thing had when it
was lost.
If the vendor acted in bad faith, he shall pay
damages to the vendee. (1488a)
Art. 1570. The preceding articles of this Subsection
shall be applicable to judicial sales, except that the
judgment debtor shall not be liable for damages.
(1489a)
Art. 1571. Actions arising from the provisions of the
preceding ten articles shall be barred after six
months, from the delivery of the thing sold. (1490)
Art. 1572. If two or more animals are sold together,
whether for a lump sum or for a separate price for
each of them, the redhibitory defect of one shall
only give rise to its redhibition, and not that of the
others; unless it should appear that the vendee
would not have purchased the sound animal or
animals without the defective one.
The latter case shall be presumed when a team,
yoke pair, or set is bought, even if a separate price
has been fixed for each one of the animals
composing the same. (1491)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 1573. The provisions of the preceding article
with respect to the sale of animals shall in like
manner be applicable to the sale of other things.
(1492)
Art. 1574. There is no warranty against hidden
defects of animals sold at fairs or at public auctions,
or of live stock sold as condemned. (1493a)
Art. 1575. The sale of animals suffering from
contagious diseases shall be void.
A contract of sale of animals shall also be void if the
use or service for which they are acquired has been
stated in the contract, and they are found to be unfit
therefor. (1494a)
Art. 1576. If the hidden defect of animals, even in
case a professional inspection has been made,
should be of such a nature that expert knowledge is
not sufficient to discover it, the defect shall be
considered as redhibitory.
But if the veterinarian, through ignorance or bad
faith should fail to discover or disclose it, he shall be
liable for damages. (1495)
Art. 1577. The redhibitory action, based on the
faults or defects of animals, must be brought within
forty days from the date of their delivery to the
vendee.
This action can only be exercised with respect to
faults and defects which are determined by law or
by local customs. (1496a)
Art. 1578. If the animal should die within three days
after its purchase, the vendor shall be liable if the
disease which cause the death existed at the time
of the contract. (1497a)
Art. 1579. If the sale be rescinded, the animal shall
be returned in the condition in which it was sold and
delivered, the vendee being answerable for any
injury due to his negligence, and not arising from
the redhibitory fault or defect. (1498)
Art. 1580. In the sale of animals with redhibitory
defects, the vendee shall also enjoy the right
mentioned in article 1567; but he must make use
thereof within the same period which has been fixed
for the exercise of the redhibitory action. (1499)
Art. 1581. The form of sale of large cattle shall be
governed by special laws. (n)
CHAPTER 5
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OBLIGATIONS OF THE VENDEE
Art. 1582. The vendee is bound to accept delivery
and to pay the price of the thing sold at the time and
place stipulated in the contract.
If the time and place should not have been
stipulated, the payment must be made at the time
and place of the delivery of the thing sold. (1500a)
Connect to 1523, NCC
Art. 1583. Unless otherwise agreed, the buyer of
goods is not bound to accept delivery thereof by
installments.
Where there is a contract of sale of goods to be
delivered by stated installments, which are to be
separately paid for, and the seller makes defective
deliveries in respect of one or more installments, or
the buyer neglects or refuses without just cause to
take delivery of or pay for one more installments, it
depends in each case on the terms of the contract
and the circumstances of the case, whether the
breach of contract is so material as to justify the
injured party in refusing to proceed further and
suing for damages for breach of the entire contract,
or whether the breach is severable, giving rise to a
claim for compensation but not to a right to treat the
whole contract as broken. (n)
Art. 1584. Where goods are delivered to the buyer,
which he has not previously examined, he is not
deemed to have accepted them unless and until he
has had a reasonable opportunity of examining
them for the purpose of ascertaining whether they
are in conformity with the contract if there is no
stipulation to the contrary.
Unless otherwise agreed, when the seller tenders
delivery of goods to the buyer, he is bound, on
request, to afford the buyer a reasonable
opportunity of examining the goods for the purpose
of ascertaining whether they are in conformity with
the contract.
Where goods are delivered to a carrier by the seller,
in accordance with an order from or agreement with
the buyer, upon the terms that the goods shall not
be delivered by the carrier to the buyer until he has
paid the price, whether such terms are indicated by
marking the goods with the words "collect on
delivery," or otherwise, the buyer is not entitled to
examine the goods before the payment of the price,
in the absence of agreement or usage of trade
permitting such examination. (n)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 1585. The buyer is deemed to have accepted
the goods when he intimates to the seller that he
has accepted them, or when the goods have been
delivered to him, and he does any act in relation to
them which is inconsistent with the ownership of the
seller, or when, after the lapse of a reasonable time,
he retains the goods without intimating to the seller
that he has rejected them. (n)
Art. 1586. In the absence of express or implied
agreement of the parties, acceptance of the goods
by the buyer shall not discharge the seller from
liability in damages or other legal remedy for breach
of any promise or warranty in the contract of sale.
But, if, after acceptance of the goods, the buyer
fails to give notice to the seller of the breach in any
promise of warranty within a reasonable time after
the buyer knows, or ought to know of such breach,
the seller shall not be liable therefor. (n)
Art. 1587. Unless otherwise agreed, where goods
are delivered to the buyer, and he refuses to accept
them, having the right so to do, he is not bound to
return them to the seller, but it is sufficient if he
notifies the seller that he refuses to accept them. If
he voluntarily constitutes himself a depositary
thereof, he shall be liable as such. (n)
Art. 1588. If there is no stipulation as specified in
the first paragraph of article 1523, when the buyer's
refusal to accept the goods is without just cause,
the title thereto passes to him from the moment
they are placed at his disposal. (n)
Art. 1589. The vendee shall owe interest for the
period between the delivery of the thing and the
payment of the price, in the following three cases:
(1) Should it have been so stipulated;
(2) Should the thing sold and delivered
produce fruits or income;
(3) Should he be in default, from the time of
judicial or extrajudicial demand for the
payment of the price. (1501a)
Art. 1590. Should the vendee be disturbed in the
possession or ownership of the thing acquired, or
should he have reasonable grounds to fear such
disturbance, by a vindicatory action or a foreclosure
of mortgage, he may suspend the payment of the
price until the vendor has caused the disturbance or
danger to cease, unless the latter gives security for
the return of the price in a proper case, or it has
been stipulated that, notwithstanding any such
contingency, the vendee shall be bound to make
the payment. A mere act of trespass shall not
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authorize the suspension of the payment of the
price. (1502a)
Art. 1591. Should the vendor have reasonable
grounds to fear the loss of immovable property sold
and its price, he may immediately sue for the
rescission of the sale.
Should such ground not exist, the provisions of
Article 1191 shall be observed. (1503)
Art. 1592. In the sale of immovable property, even
though it may have been stipulated that upon failure
to pay the price at the time agreed upon the
rescission of the contract shall of right take place,
the vendee may pay, even after the expiration of
the period, as long as no demand for rescission of
the contract has been made upon him either
judicially or by a notarial act. After the demand, the
court may not grant him a new term. (1504a)
Art. 1593. With respect to movable property, the
rescission of the sale shall of right take place in the
interest of the vendor, if the vendee, upon the
expiration of the period fixed for the delivery of the
thing, should not have appeared to receive it, or,
having appeared, he should not have tendered the
price at the same time, unless a longer period has
been stipulated for its payment. (1505)
REPUBLIC ACT No. 6552
AN ACT TO PROVIDE PROTECTION TO BUYERS OF
REAL ESTATE ON INSTALLMENT PAYMENTS. (Rep.
Act No. 6552)
Section 1. This Act shall be known as the "Realty
Installment Buyer Act."
Section 2. It is hereby declared a public policy to
protect buyers of real estate on installment
payments against onerous and oppressive
conditions.
Section 3. In all transactions or contracts involving
the sale or financing of real estate on installment
payments, including residential condominium
apartments but excluding industrial lots,
commercial buildings and sales to tenants under
Republic Act Numbered Thirty-eight hundred forty-
four, as amended by Republic Act Numbered Sixty-
three hundred eighty-nine, where the buyer has
paid at least two years of installments, the buyer is
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
entitled to the following rights in case he defaults
in the payment of succeeding installments:
(a) To pay, without additional interest, the
unpaid installments due within the total grace
period earned by him which is hereby fixed at
the rate of one month grace period for every
one year of installment payments made:
Provided, That this right shall be exercised by
the buyer only once in every five years of the
life of the contract and its extensions, if any.
(b) If the contract is canceled, the seller shall
refund to the buyer the cash surrender value of
the payments on the property equivalent to
fifty per cent of the total payments made, and,
after five years of installments, an additional
five per cent every year but not to exceed
ninety per cent of the total payments made:
Provided, That the actual cancellation of the
contract shall take place after thirty days from
receipt by the buyer of the notice of
cancellation or the demand for rescission of
the contract by a notarial act and upon full
payment of the cash surrender value to the
buyer.
Down payments, deposits or options on the
contract shall be included in the computation of
the total number of installment payments made.
Section 4. In case where less than two years of
installments were paid, the seller shall give the
buyer a grace period of not less than sixty days
from the date the installment became due.
If the buyer fails to pay the installments due at the
expiration of the grace period, the seller may
cancel the contract after thirty days from receipt
by the buyer of the notice of cancellation or the
demand for rescission of the contract by a notarial
act.
Section 5. Under Section 3 and 4, the buyer shall
have the right to sell his rights or assign the same
to another person or to reinstate the contract by
updating the account during the grace period and
before actual cancellation of the contract. The
deed of sale or assignment shall be done by
notarial act.
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Section 6. The buyer shall have the right to pay in
advance any installment or the full unpaid balance
of the purchase price any time without interest and
to have such full payment of the purchase price
annotated in the certificate of title covering the
property.
Section 7. Any stipulation in any contract hereafter
entered into contrary to the provisions of Sections
3, 4, 5 and 6, shall be null and void.
Section 8. If any provision of this Act is held invalid notarial notice before rescission may be effected. All
or unconstitutional, no other provision shall be
affected thereby.
Section 9. This Act shall take effect upon its
approval.
Approved: August 26, 1972.
NOTES on Maceda Law:
1. Applicability – Residential
2. Installment basis
3. “Forfeiture clause” is void if buyer has
already paid for at least 4 years
4. “Automatic cancellation” clause is void.
SUGGESTED ANSWER:
b) No, the vendor cannot rescind the contract under the
circumstances. Under the Maceda Law, which is the law
applicable, the seller on installment may not rescind the
contract till after the lapse of the mandatory grace period
of 30 days for every one year of installment payments,
and only after 30 days from notice of cancellation or
demand for rescission by a notarial act. In this case, the
refusal of the seller to accept payment from the buyer on
the 49th month was not justified because the buyer was
entitled to 60 days grace period and the payment was
tendered within that period. Moreover, the notice of
rescission served by the seller on the buyer was not
effective because the notice was not by a notarial act.
Besides, the seller may still pay within 30 days from such
these requirements for a valid rescission were not
complied with by the seller. Hence, the rescission is
invalid.
CHAPTER 6
ACTIONS FOR BREACH OF CONTRACT OF
SALE OF GOODS
Art. 1594. Actions for breach of the contract of sale
of goods shall be governed particularly by the
provisions of this Chapter, and as to matters not
specifically provided for herein, by other applicable
provisions of this Title. (n)

Art. 1595. Where, under a contract of sale, the

Maceda Law (2000)
Priscilla purchased a condominium unit in Makati City
from the Citiland Corporation for a price of P10 Million,
payable P3 Million down and the balance with interest
thereon at 14% per annum payable in sixty (60) equal
monthly installments of P198,333.33. They executed a
Deed of Conditional Sale in which it is stipulated that
should the vendee fail to pay three (3) successive
installments, the sale shall be deemed automatically
rescinded without the necessity of judicial action and all
payments made by the vendee shall be forfeited in favor
of the vendor by way of rental for the use and occupancy
of the unit and as liquidated damages. For 46 months,
Priscilla paid the monthly installments religiously, but on
the 47th and 48th months, she failed to pay. On the 49th
month, she tried to pay the installments due but the
vendor refused to receive the payments tendered by her.
The following month, the vendor sent her a notice that it
was rescinding the Deed of Conditional Sale pursuant to
the stipulation for automatic rescission, and demanded
that she vacate the premises. She replied that the
contract cannot be rescinded without judicial demand or
notarial act pursuant to Article 1592 of the Civil Code. a)
Is Article 1592 applicable? (3%) b) Can the vendor
rescind the contract? (2%)
SUGGESTED ANSWER:
a) Article 1592 of the Civil Code does not apply to a
conditional sale. In Valarao v. CA, 304 SCRA 155, the
Supreme Court held that Article 1592 applies only to a
contract of sale and not to a Deed of Conditional Sale
where the seller has reserved title to the property until full
payment of the purchase price. The law applicable is the
Maceda Law.
ownership of the goods has passed to the buyer
and he wrongfully neglects or refuses to pay for the
goods according to the terms of the contract of sale,
the seller may maintain an action against him for
the price of the goods.
Where, under a contract of sale, the price is
payable on a certain day, irrespective of delivery or
of transfer of title and the buyer wrongfully neglects
or refuses to pay such price, the seller may
maintain an action for the price although the
ownership in the goods has not passed. But it shall
be a defense to such an action that the seller at any
time before the judgment in such action has
manifested an inability to perform the contract of
sale on his part or an intention not to perform it.
Although the ownership in the goods has not
passed, if they cannot readily be resold for a
reasonable price, and if the provisions of article
1596, fourth paragraph, are not applicable, the
seller may offer to deliver the goods to the buyer,
and, if the buyer refuses to receive them, may notify
the buyer that the goods are thereafter held by the
seller as bailee for the buyer. Thereafter the seller
may treat the goods as the buyer's and may
maintain an action for the price. (n)
Immovable Property; Rescission of Contract (2003)

JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 340

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and delivery to be made on 01 February 2002. It was
stipulated that if payment were not to be made by Y on 01
February 2002, the sale between the parties would
automatically be rescinded. Y failed to pay on 01
February 2002, but offered to pay three days later, which
payment X refused to accept, claiming that their contract
of sale had already been rescinded. Is X’s contention
correct? Why? 5%
SUGGESTED ANSWER:
No, X is not correct. In the sale of immovable property,
even though it may have been stipulated, as in this case,
that upon failure to pay the price at the time agreed upon
the rescission of the contract shall of right take place, the
vendee may pay, even after the expiration of the period,
as long as no demand for rescission of the contract has
been made upon him either judicially or by a notarial act
(Article 1592, New Civil code). Since no demand for
rescission was made on Y, either judicially or by a
notarial act, X cannot refuse to accept the payment
offered by Y three (3) days after the expiration of the
period.
ANOTHER SUGGESTED ANSWER:
This is a contract to sell and not a contract of absolute
sale, since as there has been no delivery of the land.
Article 1592 of the New Civil code is not applicable.
Instead, Article 1595 of the New Civil Code applies. The
seller has two alternative remedies: (1) specific
performance, or (2) rescission or resolution under Article
1191 of the New Civil code. In both remedies, damages
are due because of default.
ALTERNATIVE ANSWER:
Yes, the contract was automatically rescinded upon Y’s
failure to pay on 01 February 2002. By the express terms
of the contract, there is no need for X to make a demand
in order for rescission to take place. (Article 1191, New
Civil Code, Suria v. IAC 151 SCRA 661 [1987]; U.P. v. de
los Angeles 35 SCRA 102 [1970]).
Art. 1596. Where the buyer wrongfully neglects or
refuses to accept and pay for the goods, the seller
may maintain an action against him for damages for
nonacceptance.
The measure of damages is the estimated loss
directly and naturally resulting in the ordinary
course of events from the buyer's breach of
contract.
Where there is an available market for the goods in
question, the measure of damages is, in the
absence of special circumstances showing
proximate damage of a different amount, the
difference between the contract price and the
market or current price at the time or times when
the goods ought to have been accepted, or, if no
time was fixed for acceptance, then at the time of
the refusal to accept.
If, while labor or expense of material amount is
necessary on the part of the seller to enable him to
fulfill his obligations under the contract of sale, the
buyer repudiates the contract or notifies the seller to
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
proceed no further therewith, the buyer shall be
liable to the seller for labor performed or expenses
made before receiving notice of the buyer's
repudiation or countermand. The profit the seller
would have made if the contract or the sale had
been fully performed shall be considered in
awarding the damages. (n)
Art. 1597. Where the goods have not been
delivered to the buyer, and the buyer has
repudiated the contract of sale, or has manifested
his inability to perform his obligations thereunder, or
has committed a breach thereof, the seller may
totally rescind the contract of sale by giving notice
of his election so to do to the buyer. (n)
Art. 1598. Where the seller has broken a contract to
deliver specific or ascertained goods, a court may,
on the application of the buyer, direct that the
contract shall be performed specifically, without
giving the seller the option of retaining the goods on
payment of damages. The judgment or decree may
be unconditional, or upon such terms and
conditions as to damages, payment of the price and
otherwise, as the court may deem just. (n)
Art. 1599. Where there is a breach of warranty by
the seller, the buyer may, at his election:
(1) Accept or keep the goods and set up
against the seller, the breach of warranty by
way of recoupment in diminution or
extinction of the price;
(2) Accept or keep the goods and maintain
an action against the seller for damages for
the breach of warranty;
(3) Refuse to accept the goods, and
maintain an action against the seller for
damages for the breach of warranty;
(4) Rescind the contract of sale and refuse
to receive the goods or if the goods have
already been received, return them or offer
to return them to the seller and recover the
price or any part thereof which has been
paid.
When the buyer has claimed and been
granted a remedy in anyone of these ways,
no other remedy can thereafter be granted,
without prejudice to the provisions of the
second paragraph of Article 1191.
Where the goods have been delivered to
the buyer, he cannot rescind the sale if he
knew of the breach of warranty when he
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accepted the goods without protest, or if he 3) Physical possession is with the seller.
fails to notify the seller within a reasonable SPECIAL REMEDIES OF UNPAID SELLER:
time of the election to rescind, or if he fails 5. Possessory lien;
to return or to offer to return the goods to 6. Stoppage in transitu;
the seller in substantially as good condition 7. Special right of re-sale;
as they were in at the time the ownership 8. Special right to rescind.
was transferred to the buyer. But if
deterioration or injury of the goods is due to
the breach or warranty, such deterioration
or injury shall not prevent the buyer from CHAPTER 7
returning or offering to return the goods to EXTINGUISHMENT OF SALE
the seller and rescinding the sale.
Art. 1600. Sales are extinguished by the same
Where the buyer is entitled to rescind the causes as all other obligations, by those stated in
sale and elects to do so, he shall cease to the preceding articles of this Title, and by
be liable for the price upon returning or conventional or legal redemption. (1506)
offering to return the goods. If the price or
any part thereof has already been paid, the SEE Art. 1231.
seller shall be liable to repay so much
thereof as has been paid, concurrently with
the return of the goods, or immediately after SECTION 1. - Conventional Redemption
an offer to return the goods in exchange for
repayment of the price. Art. 1601. Conventional redemption shall take place
when the vendor reserves the right to repurchase
the thing sold, with the obligation to comply with the
Where the buyer is entitled to rescind the
provisions of Article 1616 and other stipulations
sale and elects to do so, if the seller
which may have been agreed upon. (1507)
refuses to accept an offer of the buyer to
return the goods, the buyer shall thereafter
2011 Bar Exam
be deemed to hold the goods as bailee for
(77) In a true pacto de retro sale, the title and
the seller, but subject to a lien to secure
ownership of the property sold are immediately
payment of any portion of the price which
vested in the vendee a retro subject only to the
has been paid, and with the remedies for
resolutory condition of repurchase by the
the enforcement of such lien allowed to an
vendor a retro within the stipulated period.
unpaid seller by Article 1526.
This is known as (A) equitable mortgage. (B)
conventional redemption. (C) legal
(5) In the case of breach of warranty of redemption. (D) equity of redemption.
quality, such loss, in the absence of special
circumstances showing proximate damage
of a greater amount, is the difference
Art. 1602. The contract shall be presumed to be an
between the value of the goods at the time
equitable mortgage, in any of the following cases:
of delivery to the buyer and the value they
would have had if they had answered to the
warranty. (n) (1) When the price of a sale with right to
repurchase is unusually inadequate;
REMEDIES OF PARTIES FOR BREACH OF
CONTRACT OF SALE: (2) When the vendor remains in possession
A. Subject Matter: MOVABLES (in general) as lessee or otherwise;

GR: No man may take the law into his own hands; (3) When upon or after the expiration of the
he must seek remedy through courts. right to repurchase another instrument
extending the period of redemption or
Exceptions: granting a new period is executed;
a. Doctrine of self- help.
b. Special remedies (4) When the purchaser retains for himself
a part of the purchase price;
SPECIAL REMEDIES
Requisites:
(5) When the vendor binds himself to pay
1) Subject matter – goods the taxes on the thing sold;
2) Seller is unpaid.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 342
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(6) In any other case where it may be fairly
inferred that the real intention of the parties
is that the transaction shall secure the
payment of a debt or the performance of
any other obligation.
In any of the foregoing cases, any money, fruits, or
other benefit to be received by the vendee as rent
or otherwise shall be considered as interest which
shall be subject to the usury laws. (n)
Mortgage; Equitable Mortgage (2012)
No.VI. (b) Eulalia was engaged in the business
of buying and selling large cattle. In order to
secure the financial capital, she advanced for
her employees (biyaheros). She required them
to surrender TCT of their properties and to
execute the corresponding Deeds of Sale in her
favor. Domeng Bandong was not required to
post any security but when Eulalia discovered
that he incurred shortage in cattle
procurement operation, he was required to
execute a Deed of Sale over a parcel of land in
favor of Eulalia. She sold the property to her
grandneice Jocelyn who thereafter instituted
an action for ejectment against the Spouses
Bandong. To assert their right, Spouses
Bandong filed an action for annulment of sale
against Eulalia and Jocelyn alleging that there
was no sale intended but only equitable
mortgage for the purpose of securing the
shortage incurred by Domeng in the amount of
P 70, 000.00 while employed as "biyahero" by
Eulalia. Was the Deed of Sale between
Domeng and Eulalia a contract of sale or an
equitable mortgage? Explain. (5%)
SUGGESTED ANSWER:
The contract between Domeng Bandong and
Eulalia was an equitable mortgage rather
than a contract of sale. The purported deed
of sale was actually intended to merely
secure the payment of the shortage
incurred by Domeng in the conduct of the
cattle-buying operations. Under Art 1602,
Civil Code, the contract shall be presumed
to be an equitable mortgage when it may be
fairly inferred that the real intention of the
parties is simply to secure the payment of a
debt or the performance of any other
obligation. The present transaction was
clearly intended to just secure the shortage
incurred by Eulalia because Bandung
remained in possession of the property
inspite of the execution of the sale.
Equitable Mortgage (1991)
On 20 December 1970, Juliet, a widow, borrowed from
Romeo P4,000.00 and, as security therefore, she
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
executed a deed of mortgage over one of her two (2)
registered lots which has a market value of P15,000.00.
The document and the certificate of title of the property
were delivered to Romeo.
On 2 June 1971, Juliet obtained an additional sum of
P3,000 from Romeo. On this date, however, Romeo
caused the preparation of a deed of absolute sale of the
above property, to which Juliet affixed her signature
without first reading the document. The consideration
indicated is P7,000.00. She thought that this document
was similar to the first she signed. When she reached
home, her son X, after reading the duplicate copy of the
deed, informed her that what she signed was not a
mortgage but a deed of absolute sale. On the following
day, 3 June 1971, Juliet, accompanied by X, went back to
Romeo and demanded the reformation it, Romeo
prepared and signed a document wherein, as vendee in
the deed of sale above mentioned, he obligated and
bound himself to resell the land to Juliet or her heirs and
successors for the same consideration as reflected in the
deed of sale (P7,000) within a period of two
that should the Vendor (Juliet) fail to exercise her right to
redeem within the said period, the conveyance shall be
deemed absolute and irrevocable. Romeo did not take
possession of the property. He did not pay the taxes
thereon.
Juliet died in January I973 without having repurchased
the property. Her only surviving heir, her son X, failed to
repurchase the property on or before 3 June 1973. In
1975, Romeo sold the property to Y for P50,000.00. Upon
learning of the sale, X filed an action for the nullification of
the sale and for the recovery of the property on the
ground that the so-called deed of absolute sale executed
by his mother was merely an equitable mortgage, taking
into account the inadequacy of the price and the failure of
Romeo to take possession of the property and to pay the
taxes thereon. Romeo and Y maintain that there was a
valid absolute sale and that the document signed by the
former on 3 June 1973 was merely a promise to sell. a) If
you were the Judge, would you uphold the theory of
X? b) If you decide in favor of Romeo and Y, would you
uphold the validity of the promise to sell?
SUGGESTED ANSWER:
A. I will not uphold the theory of X for the nullification of
the sale and for the recovery of the property on the
ground that the so-called sale was only an equitable
mortgage. An equitable mortgage may arise only if, in
truth, the sale was one with the right of repurchase. The
facts of the case state that the right to repurchase was
granted after the absolute deed of sale was executed.
Following the rule in Cruzo vs. Carriaga (174 SCRA 330),
a deed of repurchase executed independently of the deed
of sale where the two stipulations are found in two
instruments instead of one document, the right of
repurchase would amount only to one option granted by
the buyer to the seller. Since the contract cannot be
upheld as a contract of sale with the right to repurchase,
Art. 1602 of the Civil Code on equitable mortgage will not
apply. The rule could have been different if both deeds
were executed on the same occasion or date, in which
case, under the ruling in spouses Claravall v. CA (190
SCRA 439), the contract may still be sustained as an
equitable mortgage, given the circumstances expressed
in Art. 1602. The reserved right to repurchase is then
deemed an original intention.
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B. If I were to decide in favor of Romeo and Y, I would not
uphold the validity of the promise to sell, so as to enforce
it by an action for specific performance. The promise to
sell would only amount to a mere offer and, therefore, it is
not enforceable unless it was sought to be exercised
before a withdrawal or denial thereof.
Even assuming the facts given at the end of the case,
there would have been no separate consideration for
such promise to sell. The contract would at most amount
to an option which again may not be the basis for an
action for specific performance.
Equitable Mortgage vs. Sale (2005)
On July 14, 2004, Pedro executed in favor of Juan a
Deed of Absolute Sale over a parcel of land covered by
TCT No. 6245. It appears in the Deed of Sale that Pedro
received X sold a parcel of land to Y on 01 January 2002,
payment from Juan P120,000.00 as purchase price.
However, Pedro retained the owner's duplicate of said
title. Thereafter, Juan, as lessor, and Pedro, as lessee,
executed a contract of lease over the property for a
period of one (1) year with a monthly rental of Pl,000.00.
Pedro, as lessee, was also obligated to pay the realty
taxes on the property during the period of lease.
Subsequently, Pedro filed a complaint against Juan for
the reformation of the Deed of Absolute Sale, alleging
that the transaction covered by the deed was an
equitable mortgage. In his verified answer to the
complaint, Juan alleged that the property was sold to him
under the Deed of Absolute Sale, and interposed
counterclaims to recover possession of the property and
to compel Pedro to turn over to him the owner's duplicate
of title. Resolve the case with reasons. (6%)
SUGGESTED ANSWER:
The complaint of Pedro against Juan should be
dismissed. The instances when a contract — regardless
of its nomenclature — may be presumed to be an
equitable mortgage are enumerated in Article 1602 of the
Civil Code: "Art. 1602. The contract shall be presumed to
be an equitable mortgage, in any of the following cases:
1 When the price of a sale with right to repurchase
is unusually inadequate:
2 When the vendor remains in possession as
lessee or otherwise;
3 When upon or after the expiration of the right to
repurchase another instrument extending the period of
redemption or granting a new period is executed;
4 When the purchaser retains for himself a part of
the purchase price;
5 When the vendor binds himself to pay the taxes
on the thing sold;
6 In any other case where it may be fairly inferred
that the real intention of the parties is that the transaction
shall secure the payment of a debt or the performance of
any other obligation.
"In any of the foregoing cases, any money, fruits, or other
benefit to be received by the vendee as rent or otherwise
shall be considered as interest which shall be subject to
the usury laws."
Article 1604 states that "the provisions of article 1602
shall also apply to a contract purporting to be an absolute
sale."
For Articles 1602 and 1604 to apply, two requisites must
concur: 1) the parties entered into a contract
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
denominated as a contract of sale; and 2) their intention
was to secure an existing debt by way of mortgage.
(Heirs of Balite v. Lim, G.R. No. 152168, December 10,
2004) In the given case, although Pedro retained
possession of the property as lessee after the execution
of the Deed of Sale, there is no showing that the intention
of the parties was to secure an existing debt by way of
mortgage. Hence, the complaint of Pedro should be
dismissed.
Art. 1603. In case of doubt, a contract purporting to
be a sale with right to repurchase shall be
construed as an equitable mortgage. (n)
Art. 1604. The provisions of Article 1602 shall also
apply to a contract purporting to be an absolute
sale. (n)
Art. 1605. In the cases referred to in Articles 1602
and 1604, the apparent vendor may ask for the
reformation of the instrument. (n)
Art. 1606. The right referred to in Article 1601, in
the absence of an express agreement, shall last
four years from the date of the contract.
Should there be an agreement, the period cannot
exceed ten years.
However, the vendor may still exercise the right to
repurchase within thirty days from the time final
judgment was rendered in a civil action on the basis
that the contract was a true sale with right to
repurchase. (1508a)
Right of Repurchase (1993)
On January 2, 1980, A and B entered into a contract
whereby A sold to B a parcel of land for and in
consideration of P10.000.00. A reserving to himself the
right to repurchase the same. Because they were friends,
no period was agreed upon for the repurchase of the
property. 1) Until when must A exercise his right of
repurchase? 2) If A fails to redeem the property within the
allowable period, what would you advise B to do for his
better protection?
SUGGESTED ANSWER:
1) A can exercise his right of repurchase within four (4)
years from the date of the contract (Art. 1606, Civil
Code).
SUGGESTED ANSWER:
2} I would advise B to file an action for consolidation of
title and obtain a judicial order of consolidation which
must be recorded in the Registry of Property (Art. 1607.
Civil Code).
Art. 1607. In case of real property, the consolidation
of ownership in the vendee by virtue of the failure of
the vendor to comply with the provisions of article
1616 shall not be recorded in the Registry of
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Property without a judicial order, after the vendor
has been duly heard. (n)
Art. 1608. The vendor may bring his action against
every possessor whose right is derived from the
vendee, even if in the second contract no mention
should have been made of the right to repurchase,
without prejudice to the provisions of the Mortgage
Law and the Land Registration Law with respect to
third persons. (1510)
Art. 1609. The vendee is subrogated to the vendor's
rights and actions. (1511)
Art. 1610. The creditors of the vendor cannot make
use of the right of redemption against the vendee,
until after they have exhausted the property of the
vendor. (1512)
Art. 1611. In a sale with a right to repurchase, the
vendee of a part of an undivided immovable who
acquires the whole thereof in the case of article
498, may compel the vendor to redeem the whole
property, if the latter wishes to make use of the right
of redemption. (1513)
Art. 1612. If several persons, jointly and in the same
contract, should sell an undivided immovable with a
right of repurchase, none of them may exercise this
right for more than his respective share.
The same rule shall apply if the person who sold an
immovable alone has left several heirs, in which
case each of the latter may only redeem the part
which he may have acquired. (1514)
Art. 1613. In the case of the preceding article, the
vendee may demand of all the vendors or co-heirs
that they come to an agreement upon the purchase
of the whole thing sold; and should they fail to do
so, the vendee cannot be compelled to consent to a
partial redemption. (1515)
Art. 1614. Each one of the co-owners of an
undivided immovable who may have sold his share
separately, may independently exercise the right of
repurchase as regards his own share, and the
vendee cannot compel him to redeem the whole
property. (1516)
2011 Bar Exam Question
(10) Raul, Ester, and Rufus inherited a 10-
hectare land from their father. Before the land
could be partitioned, however, Raul sold his
hereditary right to Raffy, a stranger to the
family, for P5 million. Do Ester and Rufus
have a remedy for keeping the land within
their family? (A) Yes, they may be
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
subrogated to Raffy’s right by reimbursing
to him within the required time what he
paid Raul. (B) Yes, they may be subrogated to
Raffy’s right provided they buy him out before
he registers the sale. (C) No, they can be
subrogated to Raffy’s right only with his
conformity. (D) No, since there was no
impediment to Raul selling his inheritance to a
stranger.
Art. 1615. If the vendee should leave several heirs,
the action for redemption cannot be brought against
each of them except for his own share, whether the
thing be undivided, or it has been partitioned among
them.
But if the inheritance has been divided, and the
thing sold has been awarded to one of the heirs, the
action for redemption may be instituted against him
for the whole. (1517)
Art. 1616. The vendor cannot avail himself of the
right of repurchase without returning to the vendee
the price of the sale, and in addition:
(1) The expenses of the contract, and any
other legitimate payments made by reason
of the sale;
(2) The necessary and useful expenses
made on the thing sold. (1518)
Art. 1617. If at the time of the execution of the sale
there should be on the land, visible or growing
fruits, there shall be no reimbursement for or
prorating of those existing at the time of
redemption, if no indemnity was paid by the
purchaser when the sale was executed.
Should there have been no fruits at the time of the
sale and some exist at the time of redemption, they
shall be prorated between the redemptioner and the
vendee, giving the latter the part corresponding to
the time he possessed the land in the last year,
counted from the anniversary of the date of the
sale. (1519a)
Art. 1618. The vendor who recovers the thing sold
shall receive it free from all charges or mortgages
constituted by the vendee, but he shall respect the
leases which the latter may have executed in good
faith, and in accordance with the custom of the
place where the land is situated. (1520)
SECTION 2. - Legal Redemption
Art. 1619. Legal redemption is the right to be
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subrogated, upon the same terms and conditions
stipulated in the contract, in the place of one who
acquires a thing by purchase or dation in payment,
or by any other transaction whereby ownership is
transmitted by onerous title. (1521a)
Art. 1620. A co-owner of a thing may exercise the
right of redemption in case the shares of all the
other co-owners or of any of them, are sold to a
third person. If the price of the alienation is grossly
excessive, the redemptioner shall pay only a
reasonable one.
Should two or more co-owners desire to exercise
the right of redemption, they may only do so in
proportion to the share they may respectively have
in the thing owned in common. (1522a)
Art. 1621. The owners of adjoining lands shall also
have the right of redemption when a piece of rural
land, the area of which does not exceed one
hectare, is alienated, unless the grantee does not
own any rural land.
This right is not applicable to adjacent lands which
are separated by brooks, drains, ravines, roads and
other apparent servitudes for the benefit of other
estates.
If two or more adjoining owners desire to exercise
the right of redemption at the same time, the owner
of the adjoining land of smaller area shall be
preferred; and should both lands have the same
area, the one who first requested the redemption.
(1523a)
Art. 1622. Whenever a piece of urban land which is
so small and so situated that a major portion thereof
cannot be used for any practical purpose within a
reasonable time, having been bought merely for
speculation, is about to be re-sold, the owner of any
adjoining land has a right of pre-emption at a
reasonable price.
If the re-sale has been perfected, the owner of the
adjoining land shall have a right of redemption, also
at a reasonable price.
When two or more owners of adjoining lands wish
to exercise the right of
pre-emption or redemption, the owner whose
intended use of the land in question appears best
justified shall be preferred. (n)
Art. 1623. The right of legal pre-emption or
redemption shall not be exercised except within
thirty days from the notice in writing by the
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
prospective vendor, or by the vendor, as the case
may be. The deed of sale shall not be recorded in
the Registry of Property, unless accompanied by an
affidavit of the vendor that he has given written
notice thereof to all possible redemptioners.
The right of redemption of co-owners excludes that
of adjoining owners. (1524a)
Redemption; Legal; Formalities (2001)
Betty and Lydia were co-owners of a parcel of land. Last
January 31, 2001, when she paid her real estate tax,
Betty discovered that Lydia had sold her share to Emma
on November 10, 2000. The following day, Betty offered
to redeem her share from Emma, but the latter replied
that Betty's right to redeem has already prescribed. Is
Emma correct or not? Why? (5%)
SUGGESTED ANSWER:
Emma, the buyer, is not correct. Betty can still enforce
her right of legal redemption as a co-owner. Article 1623
of the Civil Code gives a co-owner 30 days from written
notice of the sale by the vendor to exercise his right of
legal redemption. In the present problem, the 30-day
period for the exercise by Betty of her right of redemption
had not even begun to run because no notice in writing of
the sale appears to have been given to her by Lydia.
Redemption; Legal; Formalities (2002)
Adela and Beth are co-owners of a parcel of land. Beth
sold her undivided share of the property to Xandro, who
promptly notified Adela of the sale and furnished the latter
a copy of the deed of absolute sale. When Xandro
presented the deed for registration, the register of deeds
also notified Adela of the sale, enclosing a copy of the
deed with the notice. However, Adela ignored the notices.
A year later, Xandro filed a petition for the partition of the
property. Upon receipt of summons, Adela immediately
tendered the requisite amount for the redemption. Xandro
contends that Adela lost her right of redemption after the
expiration of 30 days from her receipt of the notice of the
sale given by him.
(5%)
SUGGESTED ANSWER:
Yes, Adela may still exercise her right of redemption
notwithstanding the lapse of more than 30 days from
notice of the sale given to her because Article 1623 of the
New Civil Code requires that the notice in writing of the
sale must come from the prospective vendor or vendor as
the case may be. In this case, the notice of the sale was
given by the vendee and the Register of Deeds. The
period of 30 days never tolled. She can still avail of that
right.
ALTERNATIVE ANSWER:
Adela can no longer exercise her right of redemption. As
co-owner, she had only 30 days from the time she
received written notice of the sale which in this case took
the form of a copy of the deed of sale being given to her
(Conejero v. CA, 16 SCRA 775 [1966]). The law does not
prescribe any particular form of written notice, nor any
distinctive method for notifying the redemptioner (Etcuban
v. CA, 148 SCRA 507 [1987]). So long as the
redemptioner was informed in writing, he has no cause to
complain (Distrito v. CA, 197 SCRA 606, 609 [1991]). In
fact, in Distrito, a written notice was held unnecessary
where the co-owner had actual knowledge of the sale,
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having acted as middleman and being present when the
vendor signed the deed of sale.
PRE-EMPTION REDEMPTION
Arises before sale Arises after sale
No rescission because There can be rescission
no sale exists yet of the original sale
The action is directed Action is directed
against the prospective against the buyer.
seller
NOTE: Written notice is mandatory for the right of
redemption to commence. Thus, the general rule is
that notice in writing is still required, actual
knowledge notwithstanding, except when actual
knowledge is acquired (“extra-ordinary
circumstances”) by co-heirs living in the same land
with purchaser, or co-owner was the middle man in
the sale to 3rd party (PSC vs. Sps. Valencia, 19
Aug. 2003).
OTHER INSTANCES WHEN RIGHT OF LEGAL
REDEMPTION IS GRANTED:
1. Redemption of homestead grants – 5 years
(or even more than 5 years if agreed upon
by the parties) from date of conveyance.
2. Redemption in tax delinquency sales – 1
year from date of sale.
3. Redemption by judgment debtor – 1 year
from date of registration of certificate of
sale.
4. Redemption in extra-judicial – 1 year from
date of sale and registration.
5. Redemption in judicial foreclosure only in
cases of bank is mortgagee – 90 days after
finality of judgment.
Prescription; Judicially Foreclosed Real
Property Mortgage (2012) No.IX.a) Does the right
to request for the issuance of a writ of possession
over a foreclosed real property prescribe in five (5)
years? (5%) SUGGESTED ANSWER: Yes, it
prescribes in five (5) years. If the real property
mortgaged is judicially foreclosed, the action
for judicial foreclosure should be filed within a
period of ten (10) years. The request for
issuance of a writ of possession should be filed
upon motion of the winning bidder within five
(5) years after the judgment of foreclosure. The
writ of possession is an order commanding the
sheriff to place a person named therein in
possession of real property (BPI v. Icot. G.R.
No. 168081, Oct 12, 2009).
CHAPTER 8
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
ASSIGNMENT OF CREDITS AND OTHER
INCORPOREAL RIGHTS
Art. 1624. An assignment of creditors and other
incorporeal rights shall be perfected in accordance
with the provisions of Article 1475. (n)
ASSIGNMENT
The owner of a credit transfers to another his rights
and actions in consideration of a price certain in
money or its equivalent.
Nature:
1. Transfers the right to collect the full value of
the credit, even if he paid a price less than
such value.
2. Transfers all accessory rights.
3. Debtor can set up against the assignee all
defenses he could have set up against the
assignor.
Assignment of Credit vs. Subrogation (1993)
Peter Co, a trader from Manila, has dealt business with
Allied Commodities in Hongkong for five years. All
through the years, Peter Co accumulated an
indebtedness of P500,000.00 with Allied Commodities.
Upon demand by its agent in Manila, Peter Co paid Allied
Commodities by check the amount owed. Upon deposit in
the payee's account in Manila, the check was dishonored
for insufficiency of funds. For and in consideration of
P1.00, Allied Commodities assigned the credit to Hadji
Butu who brought suit against Peter Co in the RTC of
Manila for recovery of the amount owed. Peter Co moved
to dismiss the complaint against him on the ground that
Hadji Butu was not a real party in interest and, therefore,
without legal capacity to sue and that he had not agreed
to a subrogation of creditor. Will Peter Co's defense of
absence of agreement to a subrogation of creditor
prosper?
SUGGESTED ANSWER:
No, Co's defense will not prosper. This is not a case of
subrogation, but an assignment of credit. ASSIGNMENT
OF CREDIT is the process of transferring the right of the
assignor to the assignee. The assignment may be done
either gratuitously or onerously, in which case, the
assignment has an effect similar to that of a sale (Nyco
Sales Corp.v.BA Finance Corp. G.R No.71694. Aug.16,
1991 200 SCRA 637). As a result of the assignment, the
plaintiff acquired all the rights of the assignor including
the right to sue in his own name as the legal assignee. In
assignment, the debtor's consent is not essential for the
validity of the assignment
(Art. 1624; 1475. CC; Rodriguez v. CA, et al, G. R No.
84220, March 25. 1992 207 SCRA 553).
ALTERNATIVE ANSWER:
No, the defense of Peter Co will not prosper. Hadji Butu
validly acquired his right by an assignment of credit under
Article 1624 of the Civil Code. However, the provisions on
the contract of sale (Article 1475 Civil Code) will apply,
and the transaction is covered by the Statute of Frauds.
(Art. 1403 par. (2) Civil Code)
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Art. 1625. An assignment of a credit, right or action
shall produce no effect as against third person,
unless it appears in a public instrument, or the
instrument is recorded in the Registry of Property in
case the assignment involves real property. (1526)
Art. 1626. The debtor who, before having
knowledge of the assignment, pays his creditor
shall be released from the obligation. (1527)
Art. 1627. The assignment of a credit includes all
the accessory rights, such as a guaranty, mortgage,
pledge or preference. (1528)
Art. 1628. The vendor in good faith shall be
responsible for the existence and legality of the
credit at the time of the sale, unless it should have
been sold as doubtful; but not for the solvency of
the debtor, unless it has been so expressly
stipulated or unless the insolvency was prior to the
sale and of common knowledge.
Even in these cases he shall only be liable for the
price received and for the expenses specified in No.
1 of Article 1616.
The vendor in bad faith shall always be answerable
for the payment of all expenses, and for damages.
(1529)
Art. 1629. In case the assignor in good faith should
have made himself responsible for the solvency of
the debtor, and the contracting parties should not
have agreed upon the duration of the liability, it
shall last for one year only, from the time of the
assignment if the period had already expired.
If the credit should be payable within a term or
period which has not yet expired, the liability shall
cease one year after the maturity. (1530a)
Art. 1630. One who sells an inheritance without
enumerating the things of which it is composed,
shall only be answerable for his character as an
heir. (1531)
Art. 1631. One who sells for a lump sum the whole
of certain rights, rents, or products, shall comply by
answering for the legitimacy of the whole in general;
but he shall not be obliged to warrant each of the
various parts of which it may be composed, except
in the case of eviction from the whole or the part of
greater value. (1532a)
Art. 1632. Should the vendor have profited by some
of the fruits or received anything from the
inheritance sold, he shall pay the vendee thereof, if
the contrary has not been stipulated. (1533)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 1633. The vendee shall, on his part, reimburse
the vendor for all that the latter may have paid for
the debts of and charges on the estate and satisfy
the credits he may have against the same, unless
there is an agreement to the contrary. (1534)
Art. 1634. When a credit or other incorporeal right in
litigation is sold, the debtor shall have a right to
extinguish it by reimbursing the assignee for the
price the latter paid therefor, the judicial costs
incurred by him, and the interest on the price from
the day on which the same was paid.
A credit or other incorporeal right shall be
considered in litigation from the time the complaint
concerning the same is answered.
The debtor may exercise his right within thirty days
from the date the assignee demands payment from
him. (1535)
Art. 1635. From the provisions of the preceding
article shall be excepted the assignments or sales
made:
(1) To a co-heir or co-owner of the right
assigned;
Reason: the law disfavors co-ownership.
(2) To a creditor in payment of his credit;
Reason: Presumption is that the
assignment is above suspicion, assignment
is in the form of dacion in pago.
(3) To the possessor of a tenement or piece
of land which is subject to the right in
litigation assigned. (1536)
Reason: Purpose is presumably to
preserve the tenement.
CHAPTER 9
GENERAL PROVISIONS
Art. 1636. In the preceding articles in this Title
governing the sale of goods, unless the context or
subject matter otherwise requires:
(1) "Document of title to goods" includes
any bill of lading, dock warrant, "quedan,"
or warehouse receipt or order for the
delivery of goods, or any other document
used in the ordinary course of business in
the sale or transfer of goods, as proof of the
possession or control of the goods, or
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authorizing or purporting to authorize the
possessor of the document to transfer or
receive, either by endorsement or by
delivery, goods represented by such
document.
"Goods" includes all chattels personal but
not things in action or money of legal tender
in the Philippines. The term includes
growing fruits or crops.
"Order" relating to documents of title means
an order by endorsement on the
documents.
"Quality of goods" includes their state or
condition.
"Specific goods" means goods identified
and agreed upon at the time a contract of
sale is made.
An antecedent or pre-existing claim,
whether for money or not, constitutes
"value" where goods or documents of title
are taken either in satisfaction thereof or as
security therefor.
(2) A person is insolvent within the meaning
of this Title who either has ceased to pay
his debts in the ordinary course of business
or cannot pay his debts as they become
due, whether insolvency proceedings have
been commenced or not.
(3) Goods are in a "deliverable state" within
the meaning of this Title when they are in
such a state that the buyer would, under
the contract, be bound to take delivery of
them. (n)
Art. 1637. The provisions of this Title are subject to
the rules laid down by the Mortgage Law and the
Land Registration Law with regard to immovable
property. (1537a)
Title VII. - BARTER OR EXCHANGE
Art. 1638. By the contract of barter or exchange one
of the parties binds himself to give one thing in
consideration of the other's promise to give another
thing. (1538a)
Art. 1639. If one of the contracting parties, having
received the thing promised him in barter, should
prove that it did not belong to the person who gave
it, he cannot be compelled to deliver that which he
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
offered in exchange, but he shall be entitled to
damages. (1539a)
Art. 1640. One who loses by eviction the thing
received in barter may recover that which he gave
in exchange with a right to damages, or he may
only demand an indemnity for damages. However,
he can only make use of the right to recover the
thing which he has delivered while the same
remains in the possession of the other party, and
without prejudice to the rights acquired in good faith
in the meantime by a third person. (1540a)
Art. 1641. As to all matters not specifically provided
for in this Title, barter shall be governed by the
provisions of the preceding Title relating to sales.
(1541a)
Title VIII. - LEASE
CHAPTER 1
GENERAL PROVISIONS
CONTRACT OF LEASE
A contract by which one person binds himself to
grant temporarily, the use of a thing or the
rendering of some service to another who
undertakes to pay some rent, compensation, or
price.
RENT
Is the compensation either in money, provisions,
chattels or labor, received by the lessor from the
lessee.
Requisites:
1. Must not be fictitious or nominal;
otherwise the contract is considered
essentially gratuitous.
2. Must be capable of determination.
3. Must be something of value; may be in
the form of products, fruits, or
construction.
Art. 1642. The contract of lease may be of things, or
of work and service. (1542)
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Art. 1643. In the lease of things, one of the parties The object of the The object of the
binds himself to give to another the enjoyment or contract is the result of contract is the service
use of a thing for a price certain, and for a period the work without itself and not the result
which may be definite or indefinite. However, no considering the labor which it generates
lease for more than ninety-nine years shall be valid. that produced it
(1543a) If the result promised is Even if the result
not accomplished, the intended is not attained,
CHARACTERISTICS: (lease of things) lessor or promissory is the services of the
1. Consensual; not entitled to lessor must still be paid
2. Principal; compensation
3. Nominate;
4. Subject matter must be within commerce of
men; Art. 1645. Consumable goods cannot be the subject
5. Purpose should not be minimal; matter of a contract of lease, except when they are
6. Onerous; merely to be exhibited or when they are accessory
7. Period is temporary; to an industrial establishment. (1545a)
8. Period may be definite or indefinite, but
cannot exceed 99 years;
9. Lessor need not be the owner.
LEASE USUFRUCT
Ownership of the part of Ownership on the part
Art. 1644. In the lease of work or service, one of the the lessor is not of the grantor is
parties binds himself to execute a piece of work or necessary to constitute necessary to constitute
to render to the other some service for a price a contract of lease usufruct
certain, but the relation of principal and agent does Is generally a personal
not exist between them. (1544a) right and is real right
only by way of Always a real right
LEASE OF WORK (refers to contract for a piece exception when lease is
of work) registered or it exceeds
One of the parties binds himself to produce a result one year.
out of his work or labor and the other party binds It is limited to the use It includes all possible
himself to pay remuneration therefor. specified in the contract use and enjoyment of
the thing
DUTY OF CONTRACTOR WHO FURNISHES Lessor places and Owner allows the
WORK & MATERIAL: maintains the lessee in usufructuary to use and
1. Duty to deliver; the peaceful enjoyment enjoy the property
2. Duty to transfer ownership; of the thing
3. Duty to warrant eviction and hidden Its term is generally for Its term may be for an
defects. a definite period indefinite period
It may be created by It may be created by
REMEDY OF EMPLOYER IN CASE OF DEFECTS contract as a general law, contract, last will,
Ask the contractor to remove the defect or execute rule or prescription
another work; if contractor fails or refuses, employer Lessee has no duty to Usufructuary has duty
can ask another at contractor’s expense. make repairs to make repairs
Lessee has no duty to Usufructuary has duty
LEASE OF SERVICE pay taxes to pay taxes
One party binds himself to render some service to Lessee cannot Usufructuary may
the other party consisting his own free activity of constitute a usufruct constitute a lease
labor, and not its result and the other party binds over the property leased
himself to pay a remuneration therefor.
2011 Bar Exam Question
3 KINDS: (39) X, the owner, constituted a 10-year
1. Household; usufruct on his land as well as on the building
2. Contract of labor;
standing on it in Y’s favor. After flood totally
3. Common carriers.
destroyed the building 5 years later, X told Y
that an act of God terminated the usufruct
and that he should vacate the land. Is X, the
CONTRACT OF PIECE CONTRACT OF
owner of the land, correct? (A) No, since the
OF WORK LEASE OF SERVICE

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building was destroyed through no fault of Y.
(B) No, since Y still has the right to use the
land and the materials left on it. (C) Yes,
since Y cannot use the land without the
building. (D) Yes, since the destruction of the
building without the X’s fault terminated the
usufruct.
CHAPTER 2
LEASE OF RURAL AND URBAN LANDS
SECTION 1. - General Provisions
Art. 1646. The persons disqualified to buy referred
to in Articles 1490 and 1491, are also disqualified to
become lessees of the things mentioned therein. (n)
PERSONS DISQUALIFIED TO BECOME
LESSEES:
1. Husband and wife cannot lease to each
other their separate properties except when
there is separation of property.
2. Those disqualified by reason of fiduciary
relationship –
a. Guardian: ward
b. Agent: principal
c. Executor/administrator: estate of
deceased
d. Public officer: state property
e. Justices, judges, attorneys:
property under litigation
f. Others disqualified by law.
LEASE BY FILIPINOS
May lease land (alienable) of public domain with an
area of 500 hectares and may acquire not more that
12 hectares.
LEASE BY CORPORATIONS
Corporations at least 60% Filipino owned may lease
lands (alienable) of public domain for a period of 25
years, renewable for not more than 25 years; the
area not to exceed more than 1,000 hectares.
RULES ON LEASE OF THINGS WHEN LESSEE
IS AN ALIEN:
1. 99-years limit applies to aliens as long as it
is a lease of personal property.
2. Aliens CANNOT lease public lands, and
cannot acquire private lands except through
succession.
3. If lease of real property (private lands),
maximum of 25 years renewable of another
25 years (PD 713).
4. Under Investor’s Lease Act of 1995, the 25-
year period was extended to 50 years
renewable for another 25 years if the
following conditions are met –
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
a. Lessee must make investments;
b. Lease is approved by the DTI;
c. If terms are violated, DTI can
terminate it (the lease).
FORM OF CONTRACT OF LEASE OF THINGS
May be made orally but if the lease of real property
is for more than one year, it must be in writing to be
enforceable under the Statute of Frauds.
Art. 1647. If a lease is to be recorded in the
Registry of Property, the following persons cannot
constitute the same without proper authority: the
husband with respect to the wife's paraphernal real
estate, the father or guardian as to the property of
the minor or ward, and the manager without special
power. (1548a)
Art. 1648. Every lease of real estate may be
recorded in the Registry of Property. Unless a lease
is recorded, it shall not be binding upon third
persons. (1549a)
WHEN LEASE OF REAL PROPERTY IS A REAL
RIGHT:
1. When it is for more than one year and to be
enforceable, it must be in writing.
2. When it is registered in the Registry of
Property, regardless of period.
EFFECTS OF NON- REGISTRATION:
1. Lease is not binding to 3rd persons, unless
3rd person has actual knowledge;
If the 3rd person knows of the existence
of the lease, but was led to believe that
the lease would expire soon or before
the new lease in favor of him begins,
the 3rd person is considered innocent.
2. Such 3rd person is allowed to terminate the
lease in case he buys the property from the
owner-lessor.
Art. 1649. The lessee cannot assign the lease
without the consent of the lessor, unless there is a
stipulation to the contrary. (n)
Art. 1650. When in the contract of lease of things
there is no express prohibition, the lessee may
sublet the thing leased, in whole or in part, without
prejudice to his responsibility for the performance of
the contract toward the lessor. (1550)
Art. 1651. Without prejudice to his obligation toward
the sublessor, the sublessee is bound to the lessor
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for all acts which refer to the use and preservation
of the thing leased in the manner stipulated
between the lessor and the lessee. (1551)
Sublease; Sublessee; Liability (2000)
A leased his house to B with a condition that the leased
premises shall be used for residential purposes only. B
subleased the house to C who used it as a warehouse for
fabrics. Upon learning this, A demanded that C stop using
the house as a warehouse, but C ignored the demand, A
then filed an action for ejectment against C, who raised
the defense that there is no privity of contract between
him and
Will the action prosper? (3%)
SUGGESTED ANSWER:
Yes, the action will prosper. Under Article 1651 of the
Civil Code, the sublessee is bound to the lessor for all
acts which refer to the use and preservation of the thing
leased in the manner stipulated between the lessor and
the lessee.
Art. 1652. The sublessee is subsidiarily liable to the
lessor for any rent due from the lessee. However,
the sublessee shall not be responsible beyond the
amount of rent due from him, in accordance with
the terms of the sublease, at the time of the
extrajudicial demand by the lessor.
Payments of rent in advance by the sublessee shall
be deemed not to have been made, so far as the
lessor's claim is concerned, unless said payments
were effected in virtue of the custom of the place.
(1552a)
Sublease; Delay in Payment of Rentals (1994)
In January 1993, Four-Gives Corporation leased the
entire twelve floors of the GQS Towers Complex, for a
period of ten years at a monthly rental of P3,000,000.00.
There is a provision in the contract that the monthly
rentals should be paid within the first five days of the
month. For the month of March, May, June, October and
December 1993, the rentals were not paid on time with
some rentals being delayed up to ten days. The delay
was due to the heavy paper work involved in processing
the checks.
Four-Gives Corporation also subleased five of the twelve
floors to wholly-owned subsidiaries. The lease contract
expressly prohibits the assignment of the lease contract
or any portion thereof. The rental value of the building
has increased by 50% since its lease to Four-Gives
Corporation. 1) Can the building owner eject Four-Gives
Corporation on grounds of the repeated delays in the
payment of the rent? 2} Can the building owner ask for
the cancellation of the contract for violation of the
provision against assignment?
SUGGESTED ANSWERS:
1) a) The "repeated delays" in the payment of rentals
would, at best, be a slight or casual breach which does
not furnish a ground for ejectment especially because the
delays were only due to heavy paper work. Note that
there was not even a demand for payment obviously
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
because the delay lasted for only a few days (10 days
being the longest), at the end of which time payments
were presumably made and were accepted. There was,
therefore, no default. Note also that there was no demand
made upon the lessee to vacate the premises for non-
payment of the monthly rent. There is, therefore, no
cause of action for ejectment arising from the "repeated
delays".
b) The building owner cannot eject Four-Gives
Corporation on the ground of repeated delays in the
payment of rentals. The delay in the payment of the
rentals is minimal and cannot be made the basis of an
ejectment suit. The delay was due to the heavy
paperwork involved in processing the checks. It would be
otherwise if the lease contract stated that in the payment
of rentals within the first five days of the month, time is of
the essence or that the lessee will be in delay if he falls to
pay within the agreed period without need of demand. In
this case he can judicially eject the tenant on the ground
of lack of payment of the price stipulated after a demand
to vacate, (Article 1673(2), New Civil Code),
c) No. Resolution of a contract will not be permitted for a
slight or casual breach, but only for such substantial and
fundamental breach as would defeat the very object of
the parties in making the agreement.(Zepeda v. CA, 216
SCRA 293]. The delay of ten (10)) days is not such a
substantial and fundamental breach to warrant the
resolution of the A, and that he has not been remiss in
the payment of rent.
contract of lease specially so when the delay was due to
the heavy paperwork in processing the checks.
SUGGESTED ANSWER:
2) a) No. Sublease is different from assignment of lease.
Sublease, not being prohibited by the contract of lease is
therefore allowed and cannot be invoked as a ground to
cancel the lease,
b) No, the lessor cannot have the lease cancelled for
alleged violation of the provision against assignment. The
lessee did not assign the lease, or any portion thereof, to
the subsidiaries. It merely subleased some floors to its
subsidiaries. Since the problem does not state that the
contract of lease contains a prohibition against sublease,
the sublease is lawful, the rule being that in the absence
of an express prohibition a lessee may sublet the thing
leased, in whole or in part, without prejudice to his/its
responsibility to the lessor for the performance of the
contract.
Sublease; Sublessee; Liability (1999)
May a lessee sublease the property leased without the
consent of the lessor, and what are the respective
liabilities of the lessee and sub-lessee to the lessor in
case of such sublease? (3%)
SUGGESTED ANSWER:
Yes, provided that there is no express prohibition against
subleasing. Under the law, when in the contract of lease
of things there is no express prohibition, the lessee may
sublet the thing leased without prejudice to his
responsibility for the performance of the contract toward
the lessor. [Art, 1650) In case there is a sublease of the
premises being leased, the sublessee is bound to the
lessor for all the acts which refer to the use and
preservation of the thing leased in the manner stipulated
between the lessor and the lessee. (Art. 1651} The
sublessee is subsidiarily liable to the lessor for any rent
due from the lessee. However, the sublessee shall not be
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responsible beyond the amount of the rent due from him.
(Art. 1652) As to the lessee, the latter shall still be
responsible to the lessor for the rents; bring to the
knowledge of the lessor every usurpation or untoward act
which any third person may have committed or may be
openly preparing to carry out upon the thing leased;
advise the owner the need for all repairs; to return the
thing leased upon the termination of the lease just as he
received it, save what has been lost or impaired by the
lapse of time or by ordinary wear and tear or from an
inevitable cause; responsible for the deterioration or loss
of the thing leased, unless he proves that it took place
without his fault.
Sublease; Validity; Assignment of Sublease (1990)
A leased a parcel of land to B for a period of two years.
The lease contract did not contain any express prohibition
against the assignment of the leasehold or the subleasing
of the leased premises. During the third year of the lease,
B subleased the land to C. In turn, C, without A's consent,
assigned the sublease to D. A then filed an action for the
rescission of the contract of lease on the ground that B
has violated the terms and conditions of the lease
agreement. If you were the judge, how would you decide
the case, particularly with respect to the validity of:
(a) B's sublease to C? and
(b) C's assignment of the sublease to D?
SUGGESTED ANSWER:
(a) B's sublease to C is valid. Although the original
period of two years for the lease contract has expired, the
lease continued with the acquiescence of the lessor
during the third year. Hence, there has been an implied
renewal of the contract of lease. Under Art. 1650 of the
Civil Code, the lessee may sublet the thing leased, in
whole or in part, when the contract of lease does not
contain any express prohibition. [Articles 1650, 1670
Civil Code). A's action for rescission should not prosper
on this ground.
SUGGESTED ANSWER:
(b) C's assignment of the sublease to D is not valid.
Under Art. 1649, of the Civil Code, the lessee cannot
assign the lease without the consent of the lessor, unless
there is a stipulation to the contrary. There is no such
stipulation in the contract. If the law prohibits assignment
of the lease without the consent of the lessor, all the more
would the assignment of a sublease be prohibited without
such consent. This is a violation of the contract and is a
valid ground for rescission by A.
2011 Bar Exam Question
(46) The term of a 5-year lease contract
between X the lessor and Y the lessee, where
rents were paid from month to month, came to
an end. Still, Y continued using the property
with X’s consent. In such a case, it is
understood that they impliedly renewed the
lease (A) from month to month under the
same conditions as to the rest. (B) under the
same terms and conditions as before. (C)
under the same terms except the rent which
they or the court must fix. (D) for only a year,
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
with the rent raised by 10% pursuant to the
rental control law.
SUBLEASE ASSIGNMENT OF
LEASE
Lessee remains a party Lessee is disassociated
in the contract from the original
contract of lease
Sublessee does not Assignee has a direct
have any direct action action against the
against the lessor lessor, there being no
novation
Subleasing is allowed Assignment is not
unless there is an allowed unless the
express prohibition to lessor gives his consent
the contrary
Sublease vs. Assignment of Lease; Rescission of
Contract (2005)
Under a written contract dated December 1, 1989, Victor
leased his land to Joel for a period of five (5) years at a
monthly rental of Pl,000.00, to be increased to Pl,200.00
and Pl,500.00 on the third and fifth year, respectively. On
January 1, 1991, Joel subleased the land to Conrad for a
period of two (2) years at a monthly rental of Pl,500.00.
On December 31, 1992, Joel assigned the lease to his
compadre, Ernie, who acted on the belief that Joel was
the rightful owner and possessor of the said lot. Joel has
been faithfully paying the stipulated rentals to Victor.
When Victor learned on May 18, 1992 about the sublease
and assignment, he sued Joel, Conrad and Ernie for
rescission of the contract of lease and for damages.
a) Will the action prosper? If so, against whom? Explain.
(2%)
SUGGESTED ANSWER:
Yes, the action of for rescission of the contract of lease
and for damages will prosper. Under Article 1659 of the
Civil Code, "if the lessor or the lessee should not comply
with the obligations set forth in Articles 1654 and 1657,
the aggrieved party may ask for rescission of the contract
and indemnification for damages, or only the latter,
allowing the contract to remain in force." Article 1649 of
the same Code provides that "the lessee cannot assign
the lease without the consent of the lessor, unless there
is a stipulation to the contrary." Consent is necessary
because assignment would cause novation by the
substitution of one of the parties.
(Bangayan v. Court of Appeals, G.R. No. 123581, August
29, 1997) However, the rule is different in the case of
subleasing. When there is no express prohibition in the
Contract of Lease, the lessee may sublet the thing
leased. (Art. 1650, Civil Code)
In the given case, when Joel assigned the lease to Ernie,
the same was done without the consent of Victor. The
assignment is void. However, there is no indication that in
the written contract of lease between Victor and Joel, that
subleasing the premises is prohibited. Hence, the
sublease of Joel with Conrad is valid. In view of the
foregoing, Victor can file the case of rescission and
damages only against Joel and Ernie but he cannot
include Conrad.
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b) In case of rescission, discuss the rights and obligations
of the parties. (2%)
SUGGESTED ANSWER:
Rescission of the lease necessarily requires the return of
the thing to the lessor. Hence, the judgment granting
rescission of the contract should also order the lessee to
vacate and return the leased premises to the lessor.
However, since the sublessor, the moment the sublessor
is duly ousted from the premises, the sublessee has no
leg to stand on. The sublessee's right, if any, is to
demand reparation for damages from his sublessor,
should the latter be at fault.
(Heirs ofSevilla v. Court of Appeals G.R. No. 49823,
February 26, 1992).
Art. 1653. The provisions governing warranty,
contained in the Title on Sales, shall be applicable
to the contract of lease.
In the cases where the return of the price is
required, reduction shall be made in proportion to
the time during which the lessee enjoyed the thing.
(1553)
SECTION 2. - Rights and Obligations of the
Lessor and the Lessee
Art. 1654. The lessor is obliged:
(1) To deliver the thing which is the object
of the contract in such a condition as to
render it fit for the use intended;
(2) To make on the same during the lease
all the necessary repairs in order to keep it
suitable for the use to which it has been
devoted, unless there is a stipulation to the
contrary;
(3) To maintain the lessee in the peaceful
and adequate enjoyment of the lease for
the entire duration of the contract. (1554a)
Lease; Caveat Emptor (2009)
No.VIII. Jude owned a building which he had
leased to several tenants. Without informing
his tenants, Jude sold the building to
Ildefonso. Thereafter, the latter notified all the
tenants that he is the new owner of the
building. Ildefonso ordered the tenants to
vacate the premises within thirty (30) days
from notice because he had other plans for the
building. The tenants refused to vacate,
insisting that they will only do so when the
term of their lease shall have expired. Is
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Ildefonso bound to respect the lease contracts
between Jude and his tenants? Explain your
answer. (3%)
SUGGESTED ANSWER: Yes, Ildefonso must
respect the lease contracts between Jude
and his tenants. While it is true that the
said lease contracts were not registered and
annotated on the title to the property,
Ildefonso is still not an innocent purchaser
for value. He ought to know the existence
of the lease because the building was
already occupied by the tenants at the time
he bought it. Applying the principle of
caveat emptor, he should have checked and
known the status of the occupants of their
right to occupy the building before buying
it.
Art. 1655. If the thing leased is totally destroyed by
a fortuitous event, the lease is extinguished. If the
destruction is partial, the lessee may choose
between a proportional reduction of the rent and a
rescission of the lease. (n)
Extinguishment; Total Distruction; Leased Property
(1993)
A is the owner of a lot on which he constructed a building
in the total cost of P10,000,000.00. Of that amount B
contributed P5,000,000.00 provided that the building as a
phenomenon are still unpredictable despite the advances
in whole would be leased to him (B) for a period of ten
years from January 1. 1985 to December 31, 1995 at a
rental of P100,000.00 a year. To such condition, A
agreed. On December 20, 1990, the building was totally
burned. Soon thereafter, A's workers cleared the debris
and started construction of a new building. B then served
notice upon A that he would occupy the building being
constructed upon completion, for the unexpired portion of
the lease term, explaining that he had spent partly for the
construction of the building that was burned. A rejected
B's demand. Did A has a right in rejecting B's demand?
SUGGESTED ANSWER:
Yes. A was correct in rejecting the demand of B. As a
result of the total destruction of the building by fortuitous
event, the lease was extinguished. (Art. 1655, Civil
Code.)
Leasee; Death Thereof; Effects (1997)
Stating briefly the thesis to support your answer to each
of the following cases, will the death - a) of the lessee
extinguish the lease agreement?
SUGGESTED ANSWER:
No. The death of the lessee will not extinguish the lease
agreement, since lease is not personal in character and
the right is transmissible to the heirs. (Heirs of
Dimaculangan vs. IAC, 170 SCRA 393).
Art. 1656. The lessor of a business or industrial
establishment may continue engaging in the same
business or industry to which the lessee devotes
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the thing leased, unless there is a stipulation to the
contrary. (n)
Art. 1657. The lessee is obliged:
(1) To pay the price of the lease according
to the terms stipulated;
(2) To use the thing leased as a diligent
father of a family, devoting it to the use
stipulated; and in the absence of
stipulation, to that which may be inferred
from the nature of the thing leased,
according to the custom of the place;
(3) To pay expenses for the deed of lease.
(1555)
Art. 1658. The lessee may suspend the payment of
the rent in case the lessor fails to make the
necessary repairs or to maintain the lessee in
peaceful and adequate enjoyment of the property
leased. (n)
Art. 1659. If the lessor or the lessee should not
comply with the obligations set forth in Articles 1654
and 1657, the aggrieved party may ask for the
rescission of the contract and indemnification for
damages, or only the latter, allowing the contract to
remain in force. (1556)
Art. 1660. If a dwelling place or any other building
intended for human habitation is in such a condition
that its use brings imminent and serious danger to
life or health, the lessee may terminate the lease at
once by notifying the lessor, even if at the time the
contract was perfected the former knew of the
dangerous condition or waived the right to rescind
the lease on account of this condition. (n)
Art. 1661. The lessor cannot alter the form of the
thing leased in such a way as to impair the use to
which the thing is devoted under the terms of the
lease. (1557a)
Art. 1662. If during the lease it should become
necessary to make some urgent repairs upon the
thing leased, which cannot be deferred until the
termination of the lease, the lessee is obliged to
tolerate the work, although it may be very annoying
to him, and although during the same, he may be
deprived of a part of the premises.
If the repairs last more than forty days the rent shall
be reduced in proportion to the time - including the
first forty days - and the part of the property of
which the lessee has been deprived.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
When the work is of such a nature that the portion
which the lessee and his family need for their
dwelling becomes uninhabitable, he may rescind
the contract if the main purpose of the lease is to
provide a dwelling place for the lessee. (1558a)
Art. 1663. The lessee is obliged to bring to the
knowledge of the proprietor, within the shortest
possible time, every usurpation or untoward act
which any third person may have committed or may
be openly preparing to carry out upon the thing
leased.
He is also obliged to advise the owner, with the
same urgency, of the need of all repairs included in
No. 2 of Article 1654.
In both cases the lessee shall be liable for the
damages which, through his negligence, may be
suffered by the proprietor.
If the lessor fails to make urgent repairs, the lessee,
in order to avoid an imminent danger, may order the
repairs at the lessor's cost. (1559a)
Art. 1664. The lessor is not obliged to answer for a
mere act of trespass which a third person may
cause on the use of the thing leased; but the lessee
shall have a direct action against the intruder.
There is a mere act of trespass when the third
person claims no right whatever. (1560a)
Art. 1665. The lessee shall return the thing leased,
upon the termination of the lease, as he received it,
save what has been lost or impaired by the lapse of
time, or by ordinary wear and tear, or from an
inevitable cause. (1561a)
Art. 1666. In the absence of a statement concerning
the condition of the thing at the time the lease was
constituted, the law presumes that the lessee
received it in good condition, unless there is proof
to the contrary. (1562)
Art. 1667. The lessee is responsible for the
deterioration or loss of the thing leased, unless he
proves that it took place without his fault. This
burden of proof on the lessee does not apply when
the destruction is due to earthquake, flood, storm or
other natural calamity. (1563a)
Art. 1668. The lessee is liable for any deterioration
caused by members of his household and by
guests and visitors. (1564a)
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Art. 1669. If the lease was made for a determinate
time, it ceases upon the day fixed, without the need
of a demand. (1565)
Art. 1670. If at the end of the contract the lessee
should continue enjoying the thing leased for fifteen
days with the acquiescence of the lessor, and
unless a notice to the contrary by either party has
previously been given, it is understood that there is
an implied new lease, not for the period of the
original contract, but for the time established in
Articles 1682 and 1687. The other terms of the
original contract shall be revived. (1566a)
Implied New Lease / Tacita reconduccion(1999)
Under what circumstances would an implied new lease or
a tacita reconduccion arise? (2%)
SUGGESTED ANSWER:
An implied new lease or tacita reconduccion arises if at
the end of the contract the lessee should continue
enjoying the thing leased for 15 days with the
acquiescence of the lessor, and unless a notice to the
contrary by either parties has previously been given (Art.
1670). In short, in order that there may be tacita
reconduccion there must be expiration of the contract;
there must be continuation of possession for 15 days or
more; and there must be no prior demand to vacate.
Art. 1671. If the lessee continues enjoying the thing
after the expiration of the contract, over the lessor's
objection, the former shall be subject to the
responsibilities of a possessor in bad faith. (n)
NOTE: Only provisions that are germane to the
contract of lease are deemed renewed in an implied
new lease. Thus “option to buy” is not deemed
renewed.
Option to Buy; Expired (2001)
On January 1, 1980, Nestor leased the fishpond of Mario
for a period of three years at a monthly rental of
P1,000.00, with an option to purchase the same during
the period of the lease for the price of P500,000.00. After
the expiration of the three-year period, Mario allowed
Nestor to remain in the leased premises at the same
rental rate. On June 15, 1983, Nestor tendered the
amount of P500,000.00 to Mario and demanded that the
latter execute a deed of absolute sale of the fishpond in
his favor. Mario refused, on the ground that Nestor no
longer had an option to buy the fishpond.
Nestor filed an action for specific performance. Will the
sublessee can invoke no right superior to that of his
action prosper or not? Why? (5%)
SUGGESTED ANSWER:
No, the action will not prosper. The implied renewal of the
lease on a month-to-month basis did not have the effect
of extending the life of the option to purchase which
expired at the end of the original lease period. The lessor
is correct in refusing to sell on the ground that the option
had expired.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 1672. In case of an implied new lease, the
obligations contracted by a third person for the
security of the principal contract shall cease with
respect to the new lease. (1567)
Art. 1673. The lessor may judicially eject the
lessee for any of the following causes:
(1) When the period agreed upon, or that
which is fixed for the duration of leases
under Articles 1682 and 1687, has expired;
(2) Lack of payment of the price stipulated;
(3) Violation of any of the conditions agreed
upon in the contract;
(4) When the lessee devotes the thing
leased to any use or service not stipulated
which causes the deterioration thereof; or if
he does not observe the requirement in No.
2 of Article 1657, as regards the use
thereof.
The ejectment of tenants of agricultural lands is
governed by special laws. (1569a)
Art. 1674. In ejectment cases where an appeal is
taken the remedy granted in Article 539, second
paragraph, shall also apply, if the higher court is
satisfied that the lessee's appeal is frivolous or
dilatory, or that the lessor's appeal is prima facie
meritorious. The period of ten days referred to in
said article shall be counted from the time the
appeal is perfected. (n)
Art. 1675. Except in cases stated in Article 1673,
the lessee shall have a right to make use of the
periods established in Articles 1682 and 1687.
(1570)
Art. 1676. The purchaser of a piece of land which is
under a lease that is not recorded in the Registry of
Property may terminate the lease, save when there
is a stipulation to the contrary in the contract of
sale, or when the purchaser knows of the existence
of the lease.
If the buyer makes use of this right, the lessee may
demand that he be allowed to gather the fruits of
the harvest which corresponds to the current
agricultural year and that the vendor indemnify him
for damages suffered.
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If the sale is fictitious, for the purpose of
extinguishing the lease, the supposed vendee
cannot make use of the right granted in the first
paragraph of this article. The sale is presumed to
be fictitious if at the time the supposed vendee
demands the termination of the lease, the sale is
not recorded in the Registry of Property. (1571a)
Art. 1677. The purchaser in a sale with the right of
redemption cannot make use of the power to eject
the lessee until the end of the period for the
redemption. (1572)
Art. 1678. If the lessee makes, in good faith, useful
improvements which are suitable to the use for
which the lease is intended, without altering the
form or substance of the property leased, the lessor
upon the termination of the lease shall pay the
lessee one-half of the value of the improvements
at that time. Should the lessor refuse to reimburse
said amount, the lessee may remove the
improvements, even though the principal thing may
suffer damage thereby. He shall not, however,
cause any more impairment upon the property
leased than is necessary.
With regard to ornamental expenses, the lessee
shall not be entitled to any reimbursement, but he
may remove the ornamental objects, provided no
damage is caused to the principal thing, and the
lessor does not choose to retain them by paying
their value at the time the lease is extinguished. (n)
Connect to 448, NCC.
Leasee & Lessor; Rights and Obligations (1990)
A vacant lot several blocks from the center of the town
was leased by its owner to a young businessman B for a
term of fifteen (15) years renewal upon agreement of the
parties. After taking possession of the lot, the lessee built
thereon a building of mixed materials and a store. As the
years passed, he expanded his business, earning more
profits. By the tenth (10th) year of his possession, he was
able to build a three (3)-story building worth at least
P300,000.00. Before the end of the term of the lease, B
negotiated with the landowner for its renewal, but despite
their attempts to do so, they could not agree on the new
conditions for the renewal. Upon the expiration of the
term of the lease, the landowner asked B to vacate the
premises and remove his building and other
improvements. B refused unless he was reimbursed for
necessary and useful expenses. B claimed that he was a
possessor and builder in good faith, with right of
retention. This issue is now before the court for resolution
in a pending litigation. a) What are the rights of B? b)
What are the rights of the landowner?
SUGGESTED ANSWER:
a) B has the right to remove the building and other
improvements unless the landowner decides to retain the
building at the time of the termination of the lease and
pay the lessee one-half of the value of the improvements
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
at that time. The lessee may remove the building even
though the principal thing may suffer damage but B
should not cause any more impairment upon the property
leased than is necessary. The claim of B that he was a
possessor and builder in good faith with the right of
retention is not tenable. B is not a builder in good faith
because as lessee he does not claim ownership over the
property leased.
SUGGESTED ANSWER:
b) The landowner/lessor may refuse to reimburse 1/2 of
the value of the improvements and require the lessee to
remove the improvements. [Article 1678, Civil Code),
Builder; Good Faith; Useful Improvements
(2013) No.IV.Anselmo is the registered owner
of a land and a house that his friend Boboy
occupied for a nominal rental and on the
condition that Boboy would vacate the
property on demand. With Anselmo's
knowledge, Boboy introduced renovations
consisting of an additional bedroom, a covered
veranda, and a concrete block fence, at his
own expense. Subsequently, Anselmo needed
the property as his residence and thus asked
Boboy to vacate and turn it over to him.
Boboy, despite an extension, failed to vacate
the property, forcing Anselmo to send him a
written demand to vacate. In his own written
reply, Boboy signified that he was ready to
leave but Anselmo must first reimburse him
the value of the improvements he introduced
on the property as he is a builder in good
faith. Anselmo refused, insisting that Boboy
cannot ask for reimbursement as he is a mere
lessee. Boboy responded by removing the
improvements and leaving the building in its
original state.
(IVa) Resolve Boboy's claim that as a builder in
good faith, he should be reimbursed the value
of the improvements he introduced. (4%)
SUGGESTED ANSWER: Boboy’s claim that
he is a builder in good faith has no basis. A
builder in good faith is someone who
occupies the property in concept of an
owner. The provisions on builder-planter-
sower under the Civil Code cover cases in
which the builder, planter and sower
believe themselves to be owners of the
land, or at least, to have a claim of title
thereto. As Boboy is a lessee of the
property, even if he was paying nominal
rental, Art. 1678, Civil Code, is applicable.
Under this provision, if the lessee makes, in
good faith, useful improvements which are
suitable to the use for which the lease is
intended, without altering the form or
substance of the property leased, the lessor
upon the termination of the lease, shall pay
the lessee one-half of the value of
improvements at that time. Should the
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lessor refuse to reimburse said amount, the
lessee may remove the improvements, even
though the principal thing may suffer
damage thereby.
(IVb) Can Boboy be held liable for damages for
removing the improvements over Anselmo's
objection? (4%) SUGGESTED ANSWER: No.
Boboy cannot be held liable for damages.
The lessor, Anselmo, refused to reimburse
one-half of the value of the improvements,
so the lessee, Boboy, may remove the same,
even though the principal thing may suffer
damage thereby. If in removing the useful
improvements Boboy caused more
impairment in the property leased than is
necessary he will be liable for damages (Art.
1678, Civil Code).
Art. 1679. If nothing has been stipulated concerning
the place and the time for the payment of the lease,
the provisions or Article 1251 shall be observed as
regards the place; and with respect to the time, the
custom of the place shall be followed. (1574)
SECTION 3. - Special Provisions for Leases of
Rural Lands
ALTERNATIVE ANSWER:
Yes, Mark is entitled to a reduction of the rent. His loss
was more than 1/2 of the fruits and the loss was due to
an extraordinary and unforeseen fortuitous event. The "El
Nino" phenomenon is extraordinary because it is
uncommon; it does not occur with regularity. And neither
could the parties have foreseen its occurrence. The event
should be foreseeable by the parties so that the lessee
can change the time for his planting, or refrain from
planting, or take steps to avoid the loss. To be
foreseeable, the time and the place of the occurrence, as
well as the magnitude of the adverse effects of the
fortuitous event must be capable of being predicted.
Since the exact place, the exact time, and the exact
magnitude of the adverse effects of the "El Nino"
science, the phenomenon is considered unforeseen.
Art. 1681. Neither does the lessee have any right to
a reduction of the rent if the fruits are lost after they
have been separated from their stalk, root or trunk.
(1576)
Art. 1682. The lease of a piece of rural land, when
its duration has not been fixed, is understood to
have been for all the time necessary for the
gathering of the fruits which the whole estate leased
may yield in one year, or which it may yield once,
although two or more years have to elapse for the
purpose. (1577a)

Art. 1680. The lessee shall have no right to a
reduction of the rent on account of the sterility of the
land leased, or by reason of the loss of fruits due to
ordinary fortuitous events; but he shall have such
right in case of the loss of more than one-half of the
fruits through extraordinary and unforeseen
fortuitous events, save always when there is a
specific stipulation to the contrary.
Extraordinary fortuitous events are understood to
be: fire, war, pestilence, unusual flood, locusts,
earthquake, or others which are uncommon, and
which the contracting parties could not have
reasonably foreseen. (1575)
Art. 1683. The outgoing lessee shall allow the
incoming lessee or the lessor the use of the
premises and other means necessary for the
preparatory labor for the following year; and,
reciprocally, the incoming lessee or the lessor is
under obligation to permit the outgoing lessee to do
whatever may be necessary for the gathering or
harvesting and utilization of the fruits, all in
accordance with the custom of the place. (1578a)
Art. 1684. Land tenancy on shares shall be
governed by special laws, the stipulations of the
parties, the provisions on partnership and by the
customs of the place. (1579a)

Lease of Rural Lands (2000)

In 1995, Mark leased the rice land of Narding in Nueva
Ecija for an annual rental of P1,000.00 per hectare. In
1998, due to the El Nino phenomenon, the rice harvest
fell to only 40% of the average harvest for the previous
years. Mark asked Narding for a reduction of the rental to
P500.00 per hectare for that year but the latter refused. Is
Mark legally entitled to such reduction? (2%)
SUGGESTED ANSWER:
No, Mark is not entitled to a reduction. Under Article 1680
of the Civil Code, the lessee of a rural land is entitled to a
reduction of the rent only in case of loss of more than 1/2
of the fruits through extraordinary and unforeseen
fortuitous events. While the drought brought about by the
"El Nino" phenomenon may be classified as
extraordinary, it is not considered as unforeseen.
Art. 1685. The tenant on shares cannot be ejected
except in cases specified by law. (n)
SECTION 4. - Special Provisions of the Lease of
Urban Lands
Art. 1686. In default of a special stipulation, the
custom of the place shall be observed with regard
to the kind of repairs on urban property for which
the lessor shall be liable. In case of doubt it is
understood that the repairs are chargeable against
him. (1580a)

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Art. 1687. If the period for the lease has not been
fixed, it is understood to be from year to year, if the
rent agreed upon is annual; from month to month, if
it is monthly; from week to week, if the rent is
weekly; and from day to day, if the rent is to be paid
daily. However, even though a monthly rent is paid,
and no period for the lease has been set, the courts
may fix a longer term for the lease after the lessee
has occupied the premises for over one year. If the
rent is weekly, the courts may likewise determine a
longer period after the lessee has been in
possession for over six months. In case of daily
rent, the courts may also fix a longer period after
the lessee has stayed in the place for over one
month. (1581a)
Art. 1688. When the lessor of a house, or part
thereof, used as a dwelling for a family, or when the
lessor of a store, or industrial establishment, also
leases the furniture, the lease of the latter shall be
deemed to be for the duration of the lease of the
premises. (1582)
CHAPTER 3
WORK AND LABOR
SECTION 1. - Household Service (n)
Art. 1689. Household service shall always be
reasonably compensated. Any stipulation that
household service is without compensation shall be
void. Such compensation shall be in addition to the
house helper's lodging, food, and medical
attendance.
Art. 1690. The head of the family shall furnish, free
of charge, to the house helper, suitable and sanitary
quarters as well as adequate food and medical
attendance.
Art. 1691. If the house helper is under the age of
eighteen years, the head of the family shall give an
opportunity to the house helper for at least
elementary education. The cost of such education
shall be a part of the house helper's compensation,
unless there is a stipulation to the contrary.
Art. 1692. No contract for household service shall
last for more than two years. However, such
contract may be renewed from year to year.
Art. 1693. The house helper's clothes shall be
subject to stipulation. However, any contract for
household service shall be void if thereby the house
helper cannot afford to acquire suitable clothing.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 1694. The head of the family shall treat the
house helper in a just and humane manner. In no
case shall physical violence be used upon the
house helper.
Art. 1695. House helper shall not be required to
work more than ten hours a day. Every house
helper shall be allowed four days' vacation each
month, with pay.
Art. 1696. In case of death of the house helper, the
head of the family shall bear the funeral expenses if
the house helper has no relatives in the place
where the head of the family lives, with sufficient
means therefor.
Art. 1697. If the period for household service is
fixed neither the head of the family nor the house
helper may terminate the contract before the
expiration of the term, except for a just cause. If the
house helper is unjustly dismissed, he shall be paid
the compensation already earned plus that for
fifteen days by way of indemnity. If the house helper
leaves without justifiable reason, he shall forfeit any
salary due him and unpaid, for not exceeding fifteen
days.
Art. 1698. If the duration of the household service is
not determined either by stipulation or by the nature
of the service, the head of the family or the house
helper may give notice to put an end to the service
relation, according to the following rules:
(1) If the compensation is paid by the day,
notice may be given on any day that the
service shall end at the close of the
following day;
(2) If the compensation is paid by the week,
notice may be given, at the latest on the
first business day of the week, that the
service shall be terminated at the end of the
seventh day from the beginning of the
week;
(3) If the compensation is paid by the
month, notice may be given, at the latest,
on the fifth day of the month, that the
service shall cease at the end of the month.
Art. 1699. Upon the extinguishment of the service
relation, the house helper may demand from the
head of the family a written statement on the nature
and duration of the service and the efficiency and
conduct of the house helper.
SECTION 2. - Contract of Labor (n)
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Art. 1700. The relations between capital and labor
are not merely contractual. They are so impressed
with public interest that labor contracts must yield to
the common good. Therefore, such contracts are
subject to the special laws on labor unions,
collective bargaining, strikes and lockouts, closed
shop, wages, working conditions, hours of labor and
similar subjects.
Art. 1701. Neither capital nor labor shall act
oppressively against the other, or impair the interest
or convenience of the public.
Art. 1702. In case of doubt, all labor legislation and
all labor contracts shall be construed in favor of the
safety and decent living for the laborer.
Art. 1703. No contract which practically amounts to
involuntary servitude, under any guise whatsoever,
shall be valid.
Art. 1704. In collective bargaining, the labor union
or members of the board or committee signing the
contract shall be liable for non-fulfillment thereof.
Art. 1705. The laborer's wages shall be paid in legal
currency.
Art. 1706. Withholding of the wages, except for a
debt due, shall not be made by the employer.
Art. 1707. The laborer's wages shall be a lien on the
goods manufactured or the work done.
Art. 1708. The laborer's wages shall not be subject
to execution or attachment, except for debts
incurred for food, shelter, clothing and medical
attendance.
Art. 1709. The employer shall neither seize nor
retain any tool or other articles belonging to the
laborer.
Art. 1710. Dismissal of laborers shall be subject to
the supervision of the Government, under special
laws.
Art. 1711. Owners of enterprises and other
employers are obliged to pay compensation for the
death of or injuries to their laborers, workmen,
mechanics or other employees, even though the
event may have been purely accidental or entirely
due to a fortuitous cause, if the death or personal
injury arose out of and in the course of the
employment. The employer is also liable for
compensation if the employee contracts any illness
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
or disease caused by such employment or as the
result of the nature of the employment. If the
mishap was due to the employee's own notorious
negligence, or voluntary act, or drunkenness, the
employer shall not be liable for compensation.
When the employee's lack of due care contributed
to his death or injury, the compensation shall be
equitably reduced.
Art. 1712. If the death or injury is due to the
negligence of a fellow worker, the latter and the
employer shall be solidarily liable for compensation.
If a fellow worker's intentional malicious act is the
only cause of the death or injury, the employer shall
not be answerable, unless it should be shown that
the latter did not exercise due diligence in the
selection or supervision of the plaintiff's fellow
worker.
SECTION 3. - Contract for a Piece of Work
Art. 1713. By the contract for a piece of work the
contractor binds himself to execute a piece of work
for the employer, in consideration of a certain price
or compensation. The contractor may either employ
only his labor or skill, or also furnish the material.
(1588a)
Art. 1714. If the contractor agrees to produce the
work from material furnished by him, he shall
deliver the thing produced to the employer and
transfer dominion over the thing. This contract shall
be governed by the following articles as well as by
the pertinent provisions on warranty of title and
against hidden defects and the payment of price in
a contract of sale. (n)
Art. 1715. The contractor shall execute the work in
such a manner that it has the qualities agreed upon
and has no defects which destroy or lessen its
value or fitness for its ordinary or stipulated use.
Should the work be not of such quality, the
employer may require that the contractor remove
the defect or execute another work. If the contract
fails or refuses to comply with this obligation, the
employer may have the defect removed or another
work executed, at the contractor's cost. (n)
Art. 1716. An agreement waiving or limiting the
contractor's liability for any defect in the work is void
if the contractor acted fraudulently. (n)
Art. 1717. If the contractor bound himself to furnish
the material, he shall suffer the loss if the work
should be destroyed before its delivery, save when
there has been delay in receiving it. (1589)
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Art. 1718. The contractor who has undertaken to
put only his work or skill, cannot claim any
compensation if the work should be destroyed
before its delivery, unless there has been delay in
receiving it, or if the destruction was caused by the
poor quality of the material, provided this fact was
communicated in due time to the owner. If the
material is lost through a fortuitous event, the
contract is extinguished. (1590a)
Art. 1719. Acceptance of the work by the employer
relieves the contractor of liability for any defect in
the work, unless:
(1) The defect is hidden and the employer
is not, by his special knowledge, expected
to recognize the same; or
(2) The employer expressly reserves his
rights against the contractor by reason of
the defect. (n)
Art. 1720. The price or compensation shall be paid
at the time and place of delivery of the work, unless
there is a stipulation to the contrary. If the work is to
be delivered partially, the price or compensation for
each part having been fixed, the sum shall be paid
at the time and place of delivery, in the absence if
stipulation. (n)
Art. 1721. If, in the execution of the work, an act of
the employer is required, and he incurs in delay or
fails to perform the act, the contractor is entitled to a
reasonable compensation.
The amount of the compensation is computed, on
the one hand, by the duration of the delay and the
amount of the compensation stipulated, and on the
other hand, by what the contractor has saved in
expenses by reason of the delay or is able to earn
by a different employment of his time and industry.
(n)
Art. 1722. If the work cannot be completed on
account of a defect in the material furnished by the
employer, or because of orders from the employer,
without any fault on the part of the contractor, the
latter has a right to an equitable part of the
compensation proportionally to the work done, and
reimbursement for proper expenses made. (n)
Art. 1723. The engineer or architect who drew up
the plans and specifications for a building is liable
for damages if within fifteen years from the
completion of the structure, the same should
collapse by reason of a defect in those plans and
specifications, or due to the defects in the ground.
The contractor is likewise responsible for the
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
damages if the edifice falls, within the same period,
on account of defects in the construction or the use
of materials of inferior quality furnished by him, or
due to any violation of the terms of the contract. If
the engineer or architect supervises the
construction, he shall be solidarily liable with the
contractor.
Acceptance of the building, after completion, does
not imply waiver of any of the cause of action by
reason of any defect mentioned in the preceding
paragraph.
The action must be brought within ten years
following the collapse of the building. (n)
Art. 1724. The contractor who undertakes to build a
structure or any other work for a stipulated price, in
conformity with plans and specifications agreed
upon with the land-owner, can neither withdraw
from the contract nor demand an increase in the
price on account of the higher cost of labor or
materials, save when there has been a change in
the plans and specifications, provided:
(1) Such change has been authorized by
the proprietor in writing; and
(2) The additional price to be paid to the
contractor has been determined in writing
by both parties. (1593a)
Art. 1725. The owner may withdraw at will from the
construction of the work, although it may have been
commenced, indemnifying the contractor for all the
latter's expenses, work, and the usefulness which
the owner may obtain therefrom, and damages.
(1594a)
Art. 1726. When a piece of work has been
entrusted to a person by reason of his personal
qualifications, the contract is rescinded upon his
death.
In this case the proprietor shall pay the heirs of the
contractor in proportion to the price agreed upon,
the value of the part of the work done, and of the
materials prepared, provided the latter yield him
some benefit.
The same rule shall apply if the contractor cannot
finish the work due to circumstances beyond his
control. (1595)
Art. 1727. The contractor is responsible for the work
done by persons employed by him. (1596)
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Art. 1728. The contractor is liable for all the claims
of laborers and others employed by him, and of
third persons for death or physical injuries during
the construction. (n)
Art. 1729. Those who put their labor upon or furnish
materials for a piece of work undertaken by the
contractor have an action against the owner up to
the amount owing from the latter to the contractor at
the time the claim is made. However, the following
shall not prejudice the laborers, employees and
furnishers of materials:
(1) Payments made by the owner to the
contractor before they are due;
(2) Renunciation by the contractor of any
amount due him from the owner.
This article is subject to the provisions of special
laws. (1597a)
Art. 1730. If it is agreed that the work shall be
accomplished to the satisfaction of the proprietor, it
is understood that in case of disagreement the
question shall be subject to expert judgment.
If the work is subject to the approval of a third
person, his decision shall be final, except in case of
fraud or manifest error. (1598a)
Art. 1731. He who has executed work upon a
movable has a right to retain it by way of pledge
until he is paid. (1600)
SECTION 4. - Common Carriers (n)
SUBSECTION 1. - General Provisions
Art. 1732. Common carriers are persons,
corporations, firms or associations engaged in the
business of carrying or transporting passengers or
goods or both, by land, water, or air, for
compensation, offering their services to the public.
Art. 1733. Common carriers, from the nature of their
business and for reasons of public policy, are
bound to observe extraordinary diligence in the
vigilance over the goods and for the safety of the
passengers transported by them, according to all
the circumstances of each case.
Such extraordinary diligence in the vigilance over
the goods is further expressed in Articles 1734,
1735, and 1745, Nos. 5, 6, and 7, while the
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
extraordinary diligence for the safety of the
passengers is further set forth in Articles 1755 and
1756.
SUBSECTION 2. - Vigilance Over Goods
Art. 1734. Common carriers are responsible for the
loss, destruction, or deterioration of the goods,
unless the same is due to any of the following
causes only:
(1) Flood, storm, earthquake, lightning, or
other natural disaster or calamity;
(2) Act of the public enemy in war, whether
international or civil;
(3) Act or omission of the shipper or owner
of the goods;
(4) The character of the goods or defects in
the packing or in the containers;
(5) Order or act of competent public
authority.
Art. 1735. In all cases other than those mentioned
in Nos. 1, 2, 3, 4, and 5 of the preceding article, if
the goods are lost, destroyed or deteriorated,
common carriers are presumed to have been at
fault or to have acted negligently, unless they prove
that they observed extraordinary diligence as
required in Article 1733.
Art. 1736. The extraordinary responsibility of the
common carrier lasts from the time the goods are
unconditionally placed in the possession of,
and received by the carrier for transportation
until the same are delivered, actually or
constructively, by the carrier to the consignee,
or to the person who has a right to receive
them, without prejudice to the provisions of Article
1738.
Art. 1737. The common carrier's duty to observe
extraordinary diligence over the goods remains in
full force and effect even when they are temporarily
unloaded or stored in transit, unless the shipper or
owner has made use of the right of stoppage in
transitu.
Art. 1738. The extraordinary liability of the common
carrier continues to be operative even during the
time the goods are stored in a warehouse of the
carrier at the place of destination, until the
consignee has been advised of the arrival of the
goods and has had reasonable opportunity
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thereafter to remove them or otherwise dispose
of them.
Art. 1739. In order that the common carrier may be
exempted from responsibility, the natural disaster
must have been the proximate and only cause of
the loss. However, the common carrier must
exercise due diligence to prevent or minimize loss
before, during and after the occurrence of flood,
storm or other natural disaster in order that the
common carrier may be exempted from liability for
the loss, destruction, or deterioration of the goods.
The same duty is incumbent upon the common
carrier in case of an act of the public enemy
referred to in Article 1734, No. 2.
Art. 1740. If the common carrier negligently incurs
in delay in transporting the goods, a natural disaster
shall not free such carrier from responsibility.
Art. 1741. If the shipper or owner merely
contributed to the loss, destruction or deterioration
of the goods, the proximate cause thereof being the
negligence of the common carrier, the latter shall be
liable in damages, which however, shall be
equitably reduced.
Art. 1742. Even if the loss, destruction, or
deterioration of the goods should be caused by the
character of the goods, or the faulty nature of the
packing or of the containers, the common carrier
must exercise due diligence to forestall or lessen
the loss.
Art. 1743. If through the order of public authority the
goods are seized or destroyed, the common carrier
is not responsible, provided said public authority
had power to issue the order.
Art. 1744. A stipulation between the common carrier
and the shipper or owner limiting the liability of the
former for the loss, destruction, or deterioration of
the goods to a degree less than extraordinary
diligence shall be valid, provided it be:
(1) In writing, signed by the shipper or
owner;
(2) Supported by a valuable consideration
other than the service rendered by the
common carrier; and
(3) Reasonable, just and not contrary to
public policy.
Art. 1745. Any of the following or similar stipulations
shall be considered unreasonable, unjust and
contrary to public policy:
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(1) That the goods are transported at the
risk of the owner or shipper;
(2) That the common carrier will not be
liable for any loss, destruction, or
deterioration of the goods;
(3) That the common carrier need not
observe any diligence in the custody of the
goods;
(4) That the common carrier shall exercise
a degree of diligence less than that of a
good father of a family, or of a man of
ordinary prudence in the vigilance over the
movables transported;
(5) That the common carrier shall not be
responsible for the acts or omission of his
or its employees;
(6) That the common carrier's liability for
acts committed by thieves, or of robbers
who do not act with grave or irresistible
threat, violence or force, is dispensed with
or diminished;
(7) That the common carrier is not
responsible for the loss, destruction, or
deterioration of goods on account of the
defective condition of the car, vehicle, ship,
airplane or other equipment used in the
contract of carriage.
Art. 1746. An agreement limiting the common
carrier's liability may be annulled by the shipper or
owner if the common carrier refused to carry the
goods unless the former agreed to such stipulation.
Art. 1747. If the common carrier, without just cause,
delays the transportation of the goods or changes
the stipulated or usual route, the contract limiting
the common carrier's liability cannot be availed of in
case of the loss, destruction, or deterioration of the
goods.
Art. 1748. An agreement limiting the common
carrier's liability for delay on account of strikes or
riots is valid.
Art. 1749. A stipulation that the common carrier's
liability is limited to the value of the goods
appearing in the bill of lading, unless the shipper or
owner declares a greater value, is binding.
Art. 1750. A contract fixing the sum that may be
recovered. by the owner or shipper for the loss,
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destruction, or deterioration of the goods is valid, if
it is reasonable and just under the circumstances,
and has been fairly and freely agreed upon.
Art. 1751. The fact that the common carrier has no
competitor along the line or route, or a part thereof,
to which the contract refers shall be taken into
consideration on the question of whether or not a
stipulation limiting the common carrier's liability is
reasonable, just and in consonance with public
policy.
Art. 1752. Even when there is an agreement limiting
the liability of the common carrier in the vigilance
over the goods, the common carrier is disputably
presumed to have been negligent in case of their
loss, destruction or deterioration.
Art. 1753. The law of the country to which the
goods are to be transported shall govern the liability
of the common carrier for their loss, destruction or
deterioration.
Art. 1754. The provisions of Articles 1733 to 1753
shall apply to the passenger's baggage which is not
in his personal custody or in that of his employee.
As to other baggage, the rules in Articles 1998 and
2000 to 2003 concerning the responsibility of hotel-
keepers shall be applicable.
SUBSECTION 3. - Safety of Passengers
Art. 1755. A common carrier is bound to carry the
passengers safely as far as human care and
foresight can provide, using the utmost diligence of
very cautious persons, with a due regard for all the
circumstances.
Defense; Due Diligence in Selection (2003)
As a result of a collision between the taxicab owned by A
and another taxicab owned by B, X, a passenger of the
first taxicab, was seriously injured. X later filed a criminal
action against both drivers.
May both taxicab owners raise the defense of due
diligence in the selection and supervision of their drivers
to be absolved from liability for damages to X? Reason.
5%
SUGGESTED ANSWER:
It depends. If the civil action is based on a quasi-delict the
taxicab owners may raise the defense of diligence of a
good father of a family in the selection and supervision of
the driver; if the action against them is based on culpa
contractual or civil liability arising from a crime, they
cannot raise the defense.
Fortuitous Event; Mechanical Defects (2002)
negotiating a downhill slope of a city road, suddenly
gained speed, obviously beyond the authorized limit in
the area, and bumped a car in front of it, causing severed
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
damage to the care and serious injuries to its
passengers. Orlando was not in the car at the time of the
incident. The car owner and the injured passengers sued
Orlando and Diego for damages caused by Diego’s
negligence. In their defense, Diego claims that the
downhill slope caused the van to gain speed and that, as
he stepped on the brakes to check the acceleration, the
brakes locked, causing the van to go even faster and
eventually to hit the car in front of it. Orlando and Diego
contend that the sudden malfunction of the van’s brake
system is a fortuitous even and that, therefore, they are
exempt from any liability. Is this contention tenable?
Explain. (2%)
SUGGESTED ANSWER:
No. Mechanical defects of a motor vehicle do not
constitute fortuitous event, since the presence of such
defects would have been readily detected by diligent
maintenance check. The failure to maintain the vehicle in
safe running condition constitutes negligence.
Art. 1756. In case of death of or injuries to
passengers, common carriers are presumed to
have been at fault or to have acted negligently,
unless they prove that they observed extraordinary
diligence as prescribed in Articles 1733 and 1755.
Extraordinary Diligence (2000)
Despite a warning from the police that an attempt to
hijack a PAL plane will be made in the following week, the
airline did not take extra precautions, such as frisking of
passengers, for fear of being accused of violating human
rights. Two days later, an armed hijacker did attempt to
hijack a PAL flight to Cebu. Although he was subdued by
the other passengers, he managed to fire a shot which hit
and killed a female passenger. The victim's parents sued
the airline for breach of contract, and the airline raised the
defense of force majeure. Is the airline liable or not? (2%)
SUGGESTED ANSWER:
The airline is liable. In case of death of a passenger,
common carriers are presumed to have been at fault or to
have acted negligently, unless they prove that they
observed extraordinary diligence (Article 1756, Civil
Code). The lure of the airline to take extra precautions
despite a
negate sale because they indicate that ownership over
the
police warning that an attempt to hijack the plane would
be made, was negligence on the part of the airline. Being
negligent, it is liable for the death of the passenger. The
defense of force majeure is not tenable since the
shooting incident would not have happened had the
airline taken steps that could have prevented the hijacker
from boarding the plane.
ALTERNATIVE ANSWER:
Under Article 1763 of the Civil Code, the common carrier
is not required to observe extraordinary diligence in
preventing injury to its passengers on account of the
willful acts or negligence of other passengers or of
strangers. The common carrier, in that case, is required
to exercise only the diligence of a good father of a family;
hence, the failure of the airline to take EXTRA
precautions in frisking the passengers and by leaving that
matter to the security personnel of the airport, does not
constitute a breach of that duty so as to make the airline
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liable. Besides, the use of irresistible force by the
hijackers was farce majeure that could not have been
prevented even by the observance of extraordinary
diligence.
Art. 1757. The responsibility of a common carrier for
the safety of passengers as required in Articles
1733 and 1755 cannot be dispensed with or
lessened by stipulation, by the posting of notices,
by statements on tickets, or otherwise.
Art. 1758. When a passenger is carried gratuitously,
a stipulation limiting the common carrier's liability for
negligence is valid, but not for willful acts or gross
negligence.
The reduction of fare does not justify any limitation
of the common carrier's liability.
Art. 1759. Common carriers are liable for the death
of or injuries to passengers through the negligence
or willful acts of the former's employees, although
such employees may have acted beyond the scope
of their authority or in violation of the orders of the
common carriers.
This liability of the common carriers does not cease
upon proof that they exercised all the diligence of a
good father of a family in the selection and
supervision of their employees.
Art. 1760. The common carrier's responsibility
prescribed in the preceding article cannot be
eliminated or limited by stipulation, by the posting of
notices, by statements on the tickets or otherwise.
Art. 1761. The passenger must observe the
diligence of a good father of a family to avoid injury
to himself.
Art. 1762. The contributory negligence of the
passenger does not bar recovery of damages for
his death or injuries, if the proximate cause thereof
is the negligence of the common carrier, but the
amount of damages shall be equitably reduced.
Art. 1763. A common carrier is responsible for
injuries suffered by a passenger on account of the
willful acts or negligence of other passengers or of
strangers, if the common carrier's employees
through the exercise of the diligence of a good
father of a family could have prevented or stopped
the act or omission.
SUBSECTION 4. - Common Provisions
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 1764. Damages in cases comprised in this
Section shall be awarded in accordance with Title
XVIII of this Book, concerning Damages. Article
2206 shall also apply to the death of a passenger
caused by the breach of contract by a common
carrier.
Art. 1765. The Public Service Commission may, on
its own motion or on petition of any interested party,
after due hearing, cancel the certificate of public
convenience granted to any common carrier that
repeatedly fails to comply with his or its duty to
observe extraordinary diligence as prescribed in
this Section.
Art. 1766. In all matters not regulated by this Code,
the rights and obligations of common carriers shall
be governed by the Code of Commerce and by
special laws.
THE LAW ON
PARTNERSHIP &
AGENCY
Title IX. - PARTNERSHIP
CHAPTER 1
GENERAL PROVISIONS
Art. 1767. By the contract of partnership 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.
Two or more persons may also form a partnership
for the exercise of a profession. (1665a)
ELEMENTS:
1. There is meeting of the minds;
2. To form a common fund;
3. With intention that profits (and losses) will
be divided among the contracting parties.
ESSENTIAL FEATURES:
1. There must be a valid contract.
2. The parties must have legal capacity to
enter into the contract;
3. There must be a mutual contribution of
money, property, or industry to a common
fund;
4. There must be lawful object;
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5. The primary purpose must be to obtain
profits and divide the same among the
parties.
CHARACTERISTICS:
1. Essentially contractual;
2. Separate juridical personality;
3. Delectus personae;
4. Mutual agency;
5. Personal liability of partners for partnership
debts;
6. Preparatory.
WHO MAY BE PARTNERS:
GR: Any person capacitated to contract may enter
into a contract of partnership.
Exceptions:
1. Persons who are prohibited from giving
each other any donation or advantage
cannot enter into a universal partnership.
2. Persons suffering from civil interdiction.
3. Persons who cannot give consent to a
contract –
a. Minors
b. Insane persons
c. Deaf-mutes who do not know how
to read or write.
Art. 1768. The partnership has a judicial personality
separate and distinct from that of each of the
partners, even in case of failure to comply with the
requirements of Article 1772, first paragraph. (n)
AS A JURIDICAL PERSON, it may:
1. Acquire and possess property of all kinds:
2. Incur obligations;
3. Bring civil or criminal action
Art. 1769. In determining whether a partnership
exists, these rules shall apply:
(1) Except as provided by Article 1825,
persons who are not partners as to each
other are not partners as to third persons;
(2) Co-ownership or co-possession does
not of itself establish a partnership, whether
such-co-owners or co-possessors do or do
not share any profits made by the use of
the property;
(3) The sharing of gross returns does not of
itself establish a partnership, whether or not
the persons sharing them have a joint or
common right or interest in any property
from which the returns are derived;
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(4) The receipt by a person of a share of
the profits of a business is prima facie
evidence that he is a partner in the
business, but no such inference shall be
drawn if such profits were received in
payment:
(a) As a debt by installments or
otherwise;
(b) As wages of an employee or
rent to a landlord;
(c) As an annuity to a widow or
representative of a deceased
partner;
(d) As interest on a loan, though
the amount of payment vary with
the profits of the business;
(e) As the consideration for the sale
of a goodwill of a business or other
property by installments or
otherwise. (n)
Art. 1770. A partnership must have a lawful object
or purpose, and must be established for the
common benefit or interest of the partners.
When an unlawful partnership is dissolved by a
judicial decree, the profits shall be confiscated in
favor of the State, without prejudice to the
provisions of the Penal Code governing the
confiscation of the instruments and effects of a
crime. (1666a)
EFFECTS OF AN UNLAWFUL PARTNERSHIP:
1. The contract is void ab initio and the
partnership never existed in the eyes of the
law. (art. 1409[1]).
2. The profits shall be confiscated in favor of
the government (art. 1770).
3. The instruments or tools and proceeds of
the crime shall also be forfeited in favor of
the government (art. 1770, NCC art. 45,
RPC).
4. The contributions of the partners shall not
be confiscated unless they fall under no. 3
(arts. 1411 and 1412, NCC).
NOTE: Judicial decree is not necessary to dissolve
an unlawful partnership.
EFFECTS OF PARTIAL ILLEGALITY:
1. Where a part of the business of a
partnership is legal and a part illegal, an
account of that which is legal may be had.
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2. Where without the knowledge or
participation of the partners, the firm’s
profits in a lawful business have been
increased by wrongful acts, the innocent
partners are not precluded as against the
guilty partners from recovering their share
of the profits (De Leon, p. 65).
Art. 1771. A partnership may be constituted in any
form, except where immovable property or real
rights are contributed thereto, in which case a
public instrument shall be necessary. (1667a)
GR: Partnership may be constituted in any form.
Exceptions:
1. Where immovable property or real rights
are contributed.
a. Public instrument is necessary.
b. Inventory of the property
contributed must be made, signed
by the parties and attached to the
public instrument; otherwise, VOID.
2. When contract falls under the coverage of
the State of Frauds.
3. Where capital is P3,000 or more, in money
or property.
a. Public instrument is necessary.
b. Must be registered with SEC.
a case, requires the partnership to be in a
public document, the law does not
expressly declare the contract void if not
executed in the required form (Article 1409
(7 ,NCC ). And there being nothing in the
law from which it can be inferred that the
said requirement is prohibitory or
mandatory (Article 5, NCC), the said oral
contract of partnership must also be valid.
The interested party may simply require
the contract to be made into a public
document in order to comply with the
required form (Article 1357, NCC). The
purpose of the law in requiring a public
document is simply to notify the public
about the contribution.
Art. 1772. Every contract of partnership having a
capital of three thousand pesos or more, in money
or property, shall appear in a public instrument,
which must be recorded in the Office of the
Securities and Exchange Commission.
Failure to comply with the requirements of the
preceding paragraph shall not affect the liability of
the partnership and the members thereof to third
persons. (n)

Art. 1773. A contract of partnership is void,

whenever immovable property is contributed
Oral Partnership (2009) No.I. TRUE or thereto, if an inventory of said property is not made,
FALSE. Answer TRUE if the statement is true, signed by the parties, and attached to the public
or FALSE if the statement is false. Explain instrument. (1668a)
your answer in not more than two (2)
sentences. (C). An oral partnership is valid.
(1%)
SUGGESTED ANSWER: TRUE. Partnership is CONDITION OF
a consensual contract, hence, it is valid PARTNERSHIP According to According
even though not in writing. WITH REAL Bautista, E. to De
ALTERNATIVE ANSWER: TRUE. An oral is a PROPERTY Leon
consensual of the partnership is valid even CONTRIBUTED
though not in writing. However, If it No public
involves contribution of an immovable instrument, no VOID VOID
property or a real right, an oral contract of inventory
partnership is void. In such a case, the With public
contract of partnership to be valid, must be instrument, but VOID VOID
in a public instrument ( Art. 1771 ,NCC ), NO inventory
and the inventory of said property signed VALID but either
by the parties must be attached to said party may compel
public instrument (Art. 1773, NCC). execution of public
ALTERNATIVE ANSWER: TRUE. Partnership instrument so it
is a consensual contract, hence, it is valid may be registered
even though not in writing. The oral No public in the registry of VOID
contract of partnership is also valid even if instrument but property;
an immovable property or real right is WITH inventory nonetheless,
contributed thereto. While the law, in such partnership

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____________________________________________________________________________________________________
agreement may be industry or work during the existence of the
enforced (arts. partnership.
1356 to 1358,
NCC). Movable or immovable property which each of the
With public partners may possess at the time of the celebration
instrument, AND VALID VALID of the contract shall continue to pertain exclusively
with inventory to each, only the usufruct passing to the
partnership. (1675)
Partnerships void under art. 1773, in relation to art.
1771 may still be considered either de facto or Art. 1781. Articles of universal partnership, entered
estoppel partnerships vis-à-vis third persons, may into without specification of its nature, only
even be treated as an ordinary contract from which constitute a universal partnership of profits. (1676)
rights and obligations may validly arise, although
not exactly a partnership under the Civil Code
Art. 1782. Persons who are prohibited from giving
(Torres vs. CA, 320 SCRA 428, [1999]).
each other any donation or advantage cannot enter
into universal partnership. (1677)
Art. 1774. Any immovable property or an interest
therein may be acquired in the partnership name.
Art. 1783. A particular partnership has for its object
Title so acquired can be conveyed only in the
determinate things, their use or fruits, or specific
partnership name. (n)
undertaking, or the exercise of a profession or
vocation. (1678)
Art. 1775. Associations and societies, whose
articles are kept secret among the members, and
wherein any one of the members may contract in
PARTNERSHIP CO- CORPORATI
his own name with third persons, shall have no
OWNERSHIP ON
juridical personality, and shall be governed by the
provisions relating to co-ownership. (1669) Created by
contract, by Created by law Created by
mere law
Art. 1776. As to its object, a partnership is either agreement of
universal or particular. As regards the liability of the the parties
partners, a partnership may be general or limited. Has juridical Has juridical
(1671a) personality personality
separate and No juridical separate and
Art. 1777. A universal partnership may refer to all distinct from personality distinct from
the present property or to all the profits. (1672) each other that of each
partner stockholder
Art. 1778. A partnership of all present property is Purpose: Common Purpose:
that in which the partners contribute all the property realization of enjoyment of a depends on
which actually belongs to them to a common fund, profits thing or right the Articles
with the intention of dividing the same among of
themselves, as well as all the profits which they Incorporation
may acquire therewith. (1673) Not more than
Ten years by 50 years
Art. 1779. In a universal partnership of all Duration: No agreement; or maximum,
present property, the property which belongs to limitation Not more than extendible to
each of the partners at the time of the constitution 20 years if not more
of the partnership, becomes the common property imposed by the than 50
of all the partners, as well as all the profits which testator or donor years in any
they may acquire therewith. one instance
Parties may not Stockholder
A stipulation for the common enjoyment of any dispose of his has a right to
other profits may also be made; but the property individual Co- owner may transfer
which the partners may acquire subsequently by interest unless freely transfer shares
inheritance, legacy, or donation cannot be included agreed upon by his interest without prior
in such stipulation, except the fruits thereof. (1674a) all the partners consent of
the other
stockholders
Art. 1780. A universal partnership of profits
There is mutual
comprises all that the partners may acquire by their
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representation Co-owner Management were at such termination, so far as is consistent
in case the cannot is vested in with a partnership at will.
management is represent the the Board of
not provided for co-ownership Directors/Tru A continuation of the business by the partners or
in the Articles stees such of them as habitually acted therein during the
Death of Death of co- Death of term, without any settlement or liquidation of the
partner results owner does not stockholder partnership affairs, is prima facie evidence of a
in dissolution of necessarily does not continuation of the partnership. (n)
partnership dissolve co- dissolve the
ownership corporation Art. 1786. Every partner is a debtor of the
May be Generally, may partnership for whatever he may have promised to
dissolved at be dissolved Can be contribute thereto.
any time by the anytime by the dissolved
will of any or all will of any or all with the
He shall also be bound for warranty in case of
of the partners of the co-owners consent of
eviction with regard to specific and determinate
the state
things which he may have contributed to the
Minimum of 2 Minimum of two Incorporator:
partnership, in the same cases and in the same
persons persons minimum of 5
manner as the vendor is bound with respect to the
Juridical vendee. He shall also be liable for the fruits thereof
personality From date of from the time they should have been delivered,
commenced None issuance of without the need of any demand. (1681a)
from the time of certificate of
execution of the incorporation
contract of by the SEC. Art. 1787. When the capital or a part thereof which
partnership. a partner is bound to contribute consists of goods,
their appraisal must be made in the manner
prescribed in the contract of partnership, and in the
absence of stipulation, it shall be made by experts
chosen by the partners, and according to current
PARTNERSHIP JOINT VENTURE prices, the subsequent changes thereof being for
(particular) account of the partnership. (n)
A sort of informal
A formal partnership partnership, with no firm Art. 1788. A partner who has undertaken to
name (American contribute a sum of money and fails to do so
concept of Joint becomes a debtor for the interest and damages
Account) from the time he should have complied with his
Has legal personality No legal personality obligation.
Various transaction Limited to a single
transaction generally The same rule applies to any amount he may have
taken from the partnership coffers, and his liability
shall begin from the time he converted the amount
A corporation cannot enter into a partnership, it may to his own use. (1682)
however, engage in a joint venture with others
(Aurbach vs. Sanitary Wares, 180 SCRA 130).
CHAPTER 2 Art. 1789. An industrial partner cannot engage in
OBLIGATIONS OF THE PARTNERS business for himself, unless the partnership
expressly permits him to do so; and if he should do
SECTION 1. - Obligations of the Partners Among so, the capitalist partners may either exclude him
Themselves from the firm or avail themselves of the benefits
which he may have obtained in violation of this
Art. 1784. A partnership begins from the moment of provision, with a right to damages in either case. (n)
the execution of the contract, unless it is otherwise
stipulated. (1679) Obligations of a Partner; Industrial Partner (2001)
Joe and Rudy formed a partnership to operate a car
repair shop in Quezon City. Joe provided the capital while
Art. 1785. When a partnership for a fixed term or Rudy contributed his labor and industry. On one side of
particular undertaking is continued after the their shop, Joe opened and operated a coffee shop, while
termination of such term or particular undertaking on the other side, Rudy put up a car accessories store.
without any express agreement, the rights and May they engage in such separate businesses? Why?
duties of the partners remain the same as they [5%]
SUGGESTED ANSWER:

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Joe, the capitalist partner, may engage in the restaurant
business because it is not the same kind of business the
partnership is engaged in. On the other hand, Rudy may
not engage in any other business unless their partnership
expressly permits him to do so because as an industrial
partner he has to devote his full time to the business of
the partnership [Art. 1789, CC).
Art. 1790. Unless there is a stipulation to the
contrary, the partners shall contribute equal shares
to the capital of the partnership. (n)
Art. 1791. If there is no agreement to the contrary,
in case of an imminent loss of the business of the
partnership, any partner who refuses to contribute
an additional share to the capital, except an
industrial partner, to save the venture, shall he
obliged to sell his interest to the other partners. (n)
Art. 1792. If a partner authorized to manage collects
a demandable sum which was owed to him in his
own name, from a person who owed the
partnership another sum also demandable, the sum
thus collected shall be applied to the two credits in
proportion to their amounts, even though he may
have given a receipt for his own credit only; but
should he have given it for the account of the
partnership credit, the amount shall be fully applied
to the latter.
The provisions of this article are understood to be
without prejudice to the right granted to the other
debtor by Article 1252, but only if the personal
credit of the partner should be more onerous to him.
(1684)
Art. 1793. A partner who has received, in whole or
in part, his share of a partnership credit, when the
other partners have not collected theirs, shall be
obliged, if the debtor should thereafter become
insolvent, to bring to the partnership capital what he
received even though he may have given receipt for
his share only. (1685a)
Art. 1794. Every partner is responsible to the
partnership for damages suffered by it through his
fault, and he cannot compensate them with the
profits and benefits which he may have earned for
the partnership by his industry. However, the courts
may equitably lessen this responsibility if through
the partner's extraordinary efforts in other activities
of the partnership, unusual profits have been
realized. (1686a)
Art. 1795. The risk of specific and determinate
things, which are not fungible, contributed to the
partnership so that only their use and fruits may be
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
for the common benefit, shall be borne by the
partner who owns them.
If the things contribute are fungible, or cannot be
kept without deteriorating, or if they were
contributed to be sold, the risk shall be borne by the
partnership. In the absence of stipulation, the risk of
the things brought and appraised in the inventory,
shall also be borne by the partnership, and in such
case the claim shall be limited to the value at which
they were appraised. (1687)
Art. 1796. The partnership shall be responsible to
every partner for the amounts he may have
disbursed on behalf of the partnership and for the
corresponding interest, from the time the expense
are made; it shall also answer to each partner for
the obligations he may have contracted in good
faith in the interest of the partnership business, and
for risks in consequence of its management.
(1688a)
Art. 1797. The losses and profits shall be distributed
in conformity with the agreement. If only the share
of each partner in the profits has been agreed upon,
the share of each in the losses shall be in the same
proportion.
In the absence of stipulation, the share of each
partner in the profits and losses shall be in
proportion to what he may have contributed, but the
industrial partner shall not be liable for the losses.
As for the profits, the industrial partner shall receive
such share as may be just and equitable under the
circumstances. If besides his services he has
contributed capital, he shall also receive a share in
the profits in proportion to his capital. (1689a)
Art. 1798. If the partners have agreed to entrust to a
third person the designation of the share of each
one in the profits and losses, such designation may
be impugned only when it is manifestly inequitable.
In no case may a partner who has begun to execute
the decision of the third person, or who has not
impugned the same within a period of three months
from the time he had knowledge thereof, complain
of such decision.
The designation of losses and profits cannot be
entrusted to one of the partners. (1690)
Art. 1799. A stipulation which excludes one or more
partners from any share in the profits or losses is
void. (1691)
NOTE: aka “pactum leonina”
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NOTE: Stipulation exempting a partner
from losses should be allowed. If a person
can make a gift to another, there is no
sound reason why a person cannot also
agree to bear all the losses. Of course, as
far as third persons are concerned, any
such stipulation may be properly declared
void. (De Leon, pp. 124 – 125, citing Esiritu
and Sibal.
Art. 1800. The partner who has been appointed
manager in the articles of partnership may execute
all acts of administration despite the opposition of
his partners, unless he should act in bad faith; and
his power is irrevocable without just or lawful cause.
The vote of the partners representing the controlling
interest shall be necessary for such revocation of
power.
A power granted after the partnership has been
constituted may be revoked at any time. (1692a)
Art. 1801. If two or more partners have been
entrusted with the management of the partnership
without specification of their respective duties, or
without a stipulation that one of them shall not act
without the consent of all the others, each one may
separately execute all acts of administration, but if
any of them should oppose the acts of the others,
the decision of the majority shall prevail. In case of
a tie, the matter shall be decided by the partners
owning the controlling interest. (1693a)
Art. 1802. In case it should have been stipulated
that none of the managing partners shall act without
the consent of the others, the concurrence of all
shall be necessary for the validity of the acts, and
the absence or disability of any one of them cannot
be alleged, unless there is imminent danger of
grave or irreparable injury to the partnership. (1694)
Art. 1803. When the manner of management has
not been agreed upon, the following rules shall be
observed:
(1) All the partners shall be considered
agents and whatever any one of them may
do alone shall bind the partnership, without
prejudice to the provisions of Article 1801.
(2) None of the partners may, without the
consent of the others, make any important
alteration in the immovable property of the
partnership, even if it may be useful to the
partnership. But if the refusal of consent by
the other partners is manifestly prejudicial
to the interest of the partnership, the court's
intervention may be sought. (1695a)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 1804. Every partner may associate another
person with him in his share, but the associate shall
not be admitted into the partnership without the
consent of all the other partners, even if the partner
having an associate should be a manager. (1696)
Art. 1805. The partnership books shall be kept,
subject to any agreement between the partners, at
the principal place of business of the partnership,
and every partner shall at any reasonable hour
have access to and may inspect and copy any of
them. (n)
Art. 1806. Partners shall render on demand true
and full information of all things affecting the
partnership to any partner or the legal
representative of any deceased partner or of any
partner under legal disability. (n)
Art. 1807. Every partner must account to the
partnership for any benefit, and hold as trustee for it
any profits derived by him without the consent of
the other partners from any transaction connected
with the formation, conduct, or liquidation of the
partnership or from any use by him of its property.
(n)
Art. 1808. The capitalist partners cannot engage for
their own account in any operation which is of the
kind of business in which the partnership is
engaged, unless there is a stipulation to the
contrary.
Any capitalist partner violating this prohibition shall
bring to the common funds any profits accruing to
him from his transactions, and shall personally bear
all the losses. (n)
Art. 1809. Any partner shall have the right to a
formal account as to partnership affairs:
(1) If he is wrongfully excluded from the
partnership business or possession of its
property by his co-partners;
(2) If the right exists under the terms of any
agreement;
(3) As provided by article 1807;
(4) Whenever other circumstances render it
just and reasonable. (n)
2011 Bar Exam Question
(16) The liability of the partners, including
industrial partners for partnership contracts
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entered into in its name and for its account,
when all partnership assets have been
exhausted is (A) Pro-rata. (B) Joint. (C)
Solidary. (D) Voluntary.
SECTION 2. - Property Rights of a Partner
Art. 1810. The property rights of a partner are:
(1) His rights in specific partnership
property;
(2) His interest in the partnership; and
(3) His right to participate in the
management. (n)
Art. 1811. A partner is co-owner with his partners of
specific partnership property.
The incidents of this co-ownership are such that:
(1) A partner, subject to the provisions of
this Title and to any agreement between
the partners, has an equal right with his
partners to possess specific partnership
property for partnership purposes; but he
has no right to possess such property for
any other purpose without the consent of
his partners;
(2) A partner's right in specific partnership
property is not assignable except in
connection with the assignment of rights of
all the partners in the same property;
(3) A partner's right in specific partnership
property is not subject to attachment or
execution, except on a claim against the
partnership. When partnership property is
attached for a partnership debt the
partners, or any of them, or the
representatives of a deceased partner,
cannot claim any right under the
homestead or exemption laws;
(4) A partner's right in specific partnership
property is not subject to legal support
under Article 291. (n)
Art. 1812. A partner's interest in the partnership is
his share of the profits and surplus. (n)
Art. 1813. A conveyance by a partner of his whole
interest in the partnership does not of itself dissolve
the partnership, or, as against the other partners in
the absence of agreement, entitle the assignee,
during the continuance of the partnership, to
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
interfere in the management or administration of the
partnership business or affairs, or to require any
information or account of partnership transactions,
or to inspect the partnership books; but it merely
entitles the assignee to receive in accordance with
his contract the profits to which the assigning
partner would otherwise be entitled. However, in
case of fraud in the management of the partnership,
the assignee may avail himself of the usual
remedies.
In case of a dissolution of the partnership, the
assignee is entitled to receive his assignor's interest
and may require an account from the date only of
the last account agreed to by all the partners. (n)
Art. 1814. Without prejudice to the preferred rights
of partnership creditors under Article 1827, on due
application to a competent court by any judgment
creditor of a partner, the court which entered the
judgment, or any other court, may charge the
interest of the debtor partner with payment of the
unsatisfied amount of such judgment debt with
interest thereon; and may then or later appoint a
receiver of his share of the profits, and of any other
money due or to fall due to him in respect of the
partnership, and make all other orders, directions,
accounts and inquiries which the debtor partner
might have made, or which the circumstances of
the case may require.
The interest charged may be redeemed at any time
before foreclosure, or in case of a sale being
directed by the court, may be purchased without
thereby causing a dissolution:
(1) With separate property, by any one or
more of the partners; or
(2) With partnership property, by any one or
more of the partners with the consent of all
the partners whose interests are not so
charged or sold.
Nothing in this Title shall be held to deprive a
partner of his right, if any, under the exemption
laws, as regards his interest in the partnership. (n)
SECTION 3. - Obligations of the Partners
With Regard to Third Persons
Obligations of a Partner (1992)
W, X, Y and Z organized a general partnership with W
and X as industrial partners and Y and Z as capitalist
partners. Y contributed P50,000.00 and Z contributed
P20,000.00 to the common fund. By a unanimous vote of
the partners, W and X were appointed managing
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partners, without any specification of their respective
powers and duties.
A applied for the position of Secretary and B applied for
the position of Accountant of the partnership.
The hiring of A was decided upon by W and X, but was
opposed by Y and Z.
The hiring of B was decided upon by W and Z, but was
opposed by X and Y.
Who of the applicants should be hired by the partnership?
Explain and give your reasons.
SUGGESTED ANSWER:
of A prevails because it is an act of administration which
can be performed by the duly appointed managing
partners, W and X.
B cannot be hired, because in case of a tie in the decision
of the managing partners, the deadlock must be decided
by the partners owning the controlling interest. In this
case, the opposition of X and Y prevails because Y owns
the controlling Interest (Art. 1801, Civil Code).
Art. 1815. Every partnership shall operate under a
firm name, which may or may not include the name
of one or more of the partners.
Those who, not being members of the partnership,
include their names in the firm name, shall be
subject to the liability of a partner. (n)
Art. 1816. All partners, including industrial ones,
shall be liable pro rata with all their property and
after all the partnership assets have been
exhausted, for the contracts which may be entered
into in the name and for the account of the
partnership, under its signature and by a person
authorized to act for the partnership. However, any
partner may enter into a separate obligation to
perform a partnership contract. (n)
Art. 1817. Any stipulation against the liability laid
down in the preceding article shall be void, except
as among the partners. (n)
Art. 1818. Every partner is an agent of the
partnership for the purpose of its business, and the
act of every partner, including the execution in the
partnership name of any instrument, for apparently
carrying on in the usual way the business of the
partnership of which he is a member binds the
partnership, unless the partner so acting has in fact
no authority to act for the partnership in the
particular matter, and the person with whom he is
dealing has knowledge of the fact that he has no
such authority.
An act of a partner which is not apparently for the
carrying on of business of the partnership in the
usual way does not bind the partnership unless
authorized by the other partners.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Except when authorized by the other partners or
unless they have abandoned the business, one or
more but less than all the partners have no
authority to:
(1) Assign the partnership property in trust
for creditors or on the assignee's promise to
pay the debts of the partnership;
(2) Dispose of the good-will of the business;
(3) Do any other act which would make it
impossible to carry on the ordinary
business of a partnership;
(4) Confess a judgment;
(5) Enter into a compromise concerning a
partnership claim or liability;
(6) Submit a partnership claim or liability to
arbitration;
(7) Renounce a claim of the partnership.
No act of a partner in contravention of a restriction
on authority shall bind the partnership to persons
having knowledge of the restriction. (n)
Art. 1819. Where title to real property is in the
partnership name, any partner may convey title to
such property by a conveyance executed in the
partnership name; but the partnership may recover
such property unless the partner's act binds the
partnership under the provisions of the first
paragraph of article 1818, or unless such property
has been conveyed by the grantee or a person
claiming through such grantee to a holder for value
without knowledge that the partner, in making the
conveyance, has exceeded his authority.
Where title to real property is in the name of the
partnership, a conveyance executed by a partner, in
his own name, passes the equitable interest of the
partnership, provided the act is one within the
authority of the partner under the provisions of the
first paragraph of Article 1818.
Where title to real property is in the name of one or
more but not all the partners, and the record does
not disclose the right of the partnership, the
partners in whose name the title stands may convey
title to such property, but the partnership may
recover such property if the partners' act does not
bind the partnership under the provisions of the first
paragraph of Article 1818, unless the purchaser or
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his assignee, is a holder for value, without
knowledge.
Where the title to real property is in the name of one
or more or all the partners, or in a third person in
trust for the partnership, a conveyance executed by
a partner in the partnership name, or in his own
name, passes the equitable interest of the
partnership, provided the act is one within the
authority of the partner under the provisions of the
first paragraph of Article 1818.
Where the title to real property is in the name of all
the partners a conveyance executed by all the
partners passes all their rights in such property. (n)
Art. 1820. An admission or representation made by
any partner concerning partnership affairs within the
scope of his authority in accordance with this Title is
evidence against the partnership. (n)
Art. 1821. Notice to any partner of any matter
relating to partnership affairs, and the knowledge of
the partner acting in the particular matter, acquired
while a partner or then present to his mind, and the
knowledge of any other partner who reasonably
could and should have communicated it to the
acting partner, operate as notice to or knowledge of
the partnership, except in the case of fraud on the
partnership, committed by or with the consent of
that partner. (n)
Art. 1822. Where, by any wrongful act or omission
of any partner acting in the ordinary course of the
business of the partnership or with the authority of
co-partners, loss or injury is caused to any person,
not being a partner in the partnership, or any
penalty is incurred, the partnership is liable therefor
to the same extent as the partner so acting or
omitting to act. (n)
Art. 1823. The partnership is bound to make good
the loss:
(1) Where one partner acting within the
scope of his apparent authority receives
money or property of a third person and
misapplies it; and
(2) Where the partnership in the course of
its business receives money or property of
a third person and the money or property
so received is misapplied by any partner
while it is in the custody of the partnership.
(n)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 1824. All partners are liable solidarily with the
partnership for everything chargeable to the
partnership under Articles 1822 and 1823. (n)
Art. 1825. When a person, by words spoken or
written or by conduct, represents himself, or
consents to another representing him to anyone, as
a partner in an existing partnership or with one or
more persons not actual partners, he is liable to any
such persons to whom such representation has
been made, who has, on the faith of such
representation, given credit to the actual or
apparent partnership, and if he has made such
representation or consented to its being made in a
public manner he is liable to such person, whether
the representation has or has not been made or
communicated to such person so giving credit by or
with the knowledge of the apparent partner making
the representation or consenting to its being made:
(1) When a partnership liability results, he is
liable as though he were an actual member
of the partnership;
(2) When no partnership liability results, he
is liable pro rata with the other persons, if
any, so consenting to the contract or
representation as to incur liability, otherwise
separately.
When a person has been thus represented to be a
partner in an existing partnership, or with one or
more persons not actual partners, he is an agent of
the persons consenting to such representation to
bind them to the same extent and in the same
manner as though he were a partner in fact, with
respect to persons who rely upon the
representation. When all the members of the
existing partnership consent to the representation, a
partnership act or obligation results; but in all other
cases it is the joint act or obligation of the person
acting and the persons consenting to the
representation. (n)
Art. 1826. A person admitted as a partner into an
existing partnership is liable for all the obligations of
the partnership arising before his admission as
though he had been a partner when such
obligations were incurred, except that this liability
shall be satisfied only out of partnership property,
unless there is a stipulation to the contrary. (n)
Art. 1827. The creditors of the partnership shall be
preferred to those of each partner as regards the
partnership property. Without prejudice to this right,
the private creditors of each partner may ask the
attachment and public sale of the share of the latter
in the partnership assets. (n)
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CHAPTER 3
DISSOLUTION AND WINDING UP
Art. 1828. The dissolution of a partnership is the
change in the relation of the partners caused by any
partner ceasing to be associated in the carrying on
as distinguished from the winding up of the
business. (n)
WINDING UP
Is the process of settling the business or
partnership affairs after dissolution.
TERMINATION
Is that point when all partnership affairs are
completely wound up and finally settled. It signifies
the end of the partnership life.
Art. 1829. On dissolution the partnership is not
terminated, but continues until the winding up of
partnership affairs is completed. (n)
Dissolution of Partnership; Termination (1993)
A, B and C formed a partnership for the purpose of
contracting with the Government in the construction of
one of its bridges. On June 30, 1992, after completion of
the project, the bridge was turned over by the partners to
the Government. On August 30, 1992, D, a supplier of
materials used in the project sued A for collection of the
indebtedness to him. A moved to dismiss the complaint
against him on the ground that it was the ABC
partnership that is liable for the debt. D replied that ABC
partnership was dissolved upon completion of the project
for which purpose the partnership was formed. Will you
dismiss the complaint against A If you were the Judge?
SUGGESTED ANSWER:
As Judge, I would not dismiss the complaint against A.
because A is still liable as a general partner for his pro
rata share of 1/3 (Art. 1816, C. C.J. Dissolution of a
partnership caused by the termination of the particular
undertaking specified in the agreement does not
extinguish obligations, which must be liquidated during
the "winding up" of the partnership affairs (Articles 1829
and 1830. par. 1-a, Civil Code).
Art. 1830. Dissolution is caused:
(1) Without violation of the agreement
between the partners:
(a) By the termination of the
definite term or particular
undertaking specified in the
agreement;
(b) By the express will of any
partner, who must act in good faith,
when no definite term or particular
is specified;
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(c) By the express will of all the
partners who have not assigned
their interests or suffered them to
be charged for their separate
debts, either before or after the
termination of any specified term or
particular undertaking;
(d) By the expulsion of any partner
from the business bona fide in
accordance with such a power
conferred by the agreement
between the partners;
(2) In contravention of the agreement
between the partners, where the
circumstances do not permit a dissolution
under any other provision of this article, by
the express will of any partner at any time;
(3) By any event which makes it unlawful
for the business of the partnership to be
carried on or for the members to carry it on
in partnership;
(4) When a specific thing which a partner
had promised to contribute to the
partnership, perishes before the delivery; in
any case by the loss of the thing, when the
partner who contributed it having reserved
the ownership thereof, has only transferred
to the partnership the use or enjoyment of
the same; but the partnership shall not be
dissolved by the loss of the thing when it
occurs after the partnership has acquired
the ownership thereof;
(5) By the death of any partner;
(6) By the insolvency of any partner or of
the partnership;
(7) By the civil interdiction of any partner;
(8) By decree of court under the following
article. (1700a and 1701a)
Effect of Death of Partner (1997)
Stating briefly the thesis to support your answer to each
of the following cases, will the death - of a partner
terminate the partnership?
SUGGESTED ANSWER:
Yes. The death of a partner will terminate the partnership,
by express provision of par. 5, Art. 1830 of the Civil Code.
Art. 1831. On application by or for a partner the
court shall decree a dissolution whenever:
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(1) A partner has been declared insane in
any judicial proceeding or is shown to be of
unsound mind;
(2) A partner becomes in any other way
incapable of performing his part of the
partnership contract;
(3) A partner has been guilty of such
conduct as tends to affect prejudicially the
carrying on of the business;
(4) A partner wilfully or persistently commits
a breach of the partnership agreement, or
otherwise so conducts himself in matters
relating to the partnership business that it is
not reasonably practicable to carry on the
business in partnership with him;
(5) The business of the partnership can
only be carried on at a loss;
(6) Other circumstances render a partnership if dissolution had not taken
dissolution equitable.
On the application of the purchaser of a partner's
interest under Article 1813 or 1814:
(1) After the termination of the specified
term or particular undertaking;
(2) At any time if the partnership was a
partnership at will when the interest was
assigned or when the charging order was
issued. (n)
Art. 1832. Except so far as may be necessary to
wind up partnership affairs or to complete
transactions begun but not then finished, dissolution
terminates all authority of any partner to act for the
partnership:
(1) With respect to the partners:
(a) When the dissolution is not by
the act, insolvency or death of a
partner; or
(b) When the dissolution is by such
act, insolvency or death of a
partner, in cases where article
1833 so requires;
(2) With respect to persons not partners, as
declared in article 1834. (n)
Art. 1833. Where the dissolution is caused by the
act, death or insolvency of a partner, each partner
is liable to his co-partners for his share of any
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
liability created by any partner acting for the
partnership as if the partnership had not been
dissolved unless:
(1) The dissolution being by act of any
partner, the partner acting for the
partnership had knowledge of the
dissolution; or
(2) The dissolution being by the death or
insolvency of a partner, the partner acting
for the partnership had knowledge or notice
of the death or insolvency.
Art. 1834. After dissolution, a partner can bind the
partnership, except as provided in the third
paragraph of this article:
(1) By any act appropriate for winding up
partnership affairs or completing
transactions unfinished at dissolution;
(2) By any transaction which would bind the
place, provided the other party to the
transaction:
(a) Had extended credit to the
partnership prior to dissolution and
had no knowledge or notice of the
dissolution; or
(b) Though he had not so extended
credit, had nevertheless known of
the partnership prior to dissolution,
and, having no knowledge or notice
of dissolution, the fact of dissolution
had not been advertised in a
newspaper of general circulation in
the place (or in each place if more
than one) at which the partnership
business was regularly carried on.
The liability of a partner under the first paragraph,
No. 2, shall be satisfied out of partnership assets
alone when such partner had been prior to
dissolution:
(1) Unknown as a partner to the person
with whom the contract is made; and
(2) So far unknown and inactive in
partnership affairs that the business
reputation of the partnership could not be
said to have been in any degree due to his
connection with it.
The partnership is in no case bound by any act of a
partner after dissolution:
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(1) Where the partnership is dissolved
because it is unlawful to carry on the
business, unless the act is appropriate for
winding up partnership affairs; or
(2) Where the partner has become
insolvent; or
(3) Where the partner has no authority to
wind up partnership affairs; except by a
transaction with one who:
(a) Had extended credit to the
partnership prior to dissolution and
had no knowledge or notice of his
want of authority; or
(b) Had not extended credit to the
partnership prior to dissolution,
and, having no knowledge or notice
of his want of authority, the fact of
his want of authority has not been
advertised in the manner provided
for advertising the fact of
dissolution in the first paragraph,
No. 2 (b).
Nothing in this article shall affect the liability under
Article 1825 of any person who, after dissolution,
represents himself or consents to another
representing him as a partner in a partnership
engaged in carrying business. (n)
Art. 1835. The dissolution of the partnership does
not of itself discharge the existing liability of any
partner.
A partner is discharged from any existing liability
upon dissolution of the partnership by an
agreement to that effect between himself, the
partnership creditor and the person or partnership
continuing the business; and such agreement may
be inferred from the course of dealing between the
creditor having knowledge of the dissolution and the
person or partnership continuing the business.
The individual property of a deceased partner shall
be liable for all obligations of the partnership
incurred while he was a partner, but subject to the
prior payment of his separate debts. (n)
Art. 1836. Unless otherwise agreed, the partners
who have not wrongfully dissolved the partnership
or the legal representative of the last surviving
partner, not insolvent, has the right to wind up the
partnership affairs, provided, however, that any
partner, his legal representative or his assignee,
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
upon cause shown, may obtain winding up by the
court. (n)
Art. 1837. When dissolution is caused in any way,
except in contravention of the partnership
agreement, each partner, as against his co-partners
and all persons claiming through them in respect of
their interests in the partnership, unless otherwise
agreed, may have the partnership property applied
to discharge its liabilities, and the surplus applied to
pay in cash the net amount owing to the respective
partners. But if dissolution is caused by expulsion of
a partner, bona fide under the partnership
agreement and if the expelled partner is discharged
from all partnership liabilities, either by payment or
agreement under the second paragraph of Article
1835, he shall receive in cash only the net amount
due him from the partnership.
When dissolution is caused in contravention of the
partnership agreement the rights of the partners
shall be as follows:
(1) Each partner who has not caused
dissolution wrongfully shall have:
(a) All the rights specified in the first
paragraph of this article, and
(b) The right, as against each
partner who has caused the
dissolution wrongfully, to damages
breach of the agreement.
(2) The partners who have not caused the
dissolution wrongfully, if they all desire to
continue the business in the same name
either by themselves or jointly with others,
may do so, during the agreed term for the
partnership and for that purpose may
possess the partnership property, provided
they secure the payment by bond approved
by the court, or pay any partner who has
caused the dissolution wrongfully, the value
of his interest in the partnership at the
dissolution, less any damages recoverable
under the second paragraph, No. 1 (b) of
this article, and in like manner indemnify
him against all present or future partnership
liabilities.
(3) A partner who has caused the
dissolution wrongfully shall have:
(a) If the business is not continued under
the provisions of the second paragraph,
No. 2, all the rights of a partner under the
first paragraph, subject to liability for
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damages in the second paragraph, No. 1
(b), of this article.
(b) If the business is continued under the
second paragraph, No. 2, of this article,
the right as against his co-partners and
all claiming through them in respect of
their interests in the partnership, to have
the value of his interest in the
partnership, less any damage caused to
his co-partners by the dissolution,
ascertained and paid to him in cash, or
the payment secured by a bond approved
by the court, and to be released from all
existing liabilities of the partnership; but in
ascertaining the value of the partner's
interest the value of the good-will of the
business shall not be considered. (n)
Art. 1838. Where a partnership contract is
rescinded on the ground of the fraud or
misrepresentation of one of the parties thereto, the
party entitled to rescind is, without prejudice to any
other right, entitled:
(1) To a lien on, or right of retention of, the
surplus of the partnership property after
satisfying the partnership liabilities to third
persons for any sum of money paid by him
for the purchase of an interest in the
partnership and for any capital or advances
contributed by him;
(2) To stand, after all liabilities to third
persons have been satisfied, in the place of
the creditors of the partnership for any
payments made by him in respect of the
partnership liabilities; and
(3) To be indemnified by the person guilty
of the fraud or making the representation
against all debts and liabilities of the
partnership. (n)
Art. 1839. In settling accounts between the partners
after dissolution, the following rules shall be
observed, subject to any agreement to the contrary:
(1) The assets of the partnership are:
(a) The partnership property,
(b) The contributions of the partners
necessary for the payment of all the
liabilities specified in No. 2.
(2) The liabilities of the partnership shall
rank in order of payment, as follows:
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(a) Those owing to creditors other than
partners,
(b) Those owing to partners other than for
capital and profits,
(c) Those owing to partners in respect of
capital,
(d) Those owing to partners in respect of
profits.
(3) The assets shall be applied in the order
of their declaration in No. 1 of this article to
the satisfaction of the liabilities.
(4) The partners shall contribute, as
provided by article 1797, the amount
necessary to satisfy the liabilities.
(5) An assignee for the benefit of creditors
or any person appointed by the court shall
have the right to enforce the contributions
specified in the preceding number.
(6) Any partner or his legal representative
shall have the right to enforce the
contributions specified in No. 4, to the
extent of the amount which he has paid in
excess of his share of the liability.
(7) The individual property of a deceased
partner shall be liable for the contributions
specified in No. 4.
(8) When partnership property and the
individual properties of the partners are in
possession of a court for distribution,
partnership creditors shall have priority on
partnership property and separate creditors
on individual property, saving the rights of
lien or secured creditors.
(9) Where a partner has become insolvent
or his estate is insolvent, the claims against
his separate property shall rank in the
following order:
(a) Those owing to separate creditors;
(b) Those owing to partnership creditors;
(c) Those owing to partners by way of
contribution. (n)
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Art. 1840. In the following cases creditors of the
dissolved partnership are also creditors of the
person or partnership continuing the business:
(1) When any new partner is admitted into
an existing partnership, or when any
partner retires and assigns (or the
representative of the deceased partner
assigns) his rights in partnership property to
two or more of the partners, or to one or
more of the partners and one or more third
persons, if the business is continued
without liquidation of the partnership affairs;
(2) When all but one partner retire and
assign (or the representative of a deceased
partner assigns) their rights in partnership
property to the remaining partner, who
continues the business without liquidation
of partnership affairs, either alone or with
others;
(3) When any partner retires or dies and the
business of the dissolved partnership is
continued as set forth in Nos. 1 and 2 of
this article, with the consent of the retired
partners or the representative of the
deceased partner, but without any
assignment of his right in partnership
property;
(4) When all the partners or their
representatives assign their rights in
partnership property to one or more third
persons who promise to pay the debts and
who continue the business of the dissolved
partnership;
(5) When any partner wrongfully causes a
dissolution and the remaining partners
continue the business under the provisions
of article 1837, second paragraph, No. 2,
either alone or with others, and without
liquidation of the partnership affairs;
(6) When a partner is expelled and the
remaining partners continue the business
either alone or with others without
liquidation of the partnership affairs.
The liability of a third person becoming a partner in
the partnership continuing the business, under this
article, to the creditors of the dissolved partnership
shall be satisfied out of the partnership property
only, unless there is a stipulation to the contrary.
When the business of a partnership after dissolution
is continued under any conditions set forth in this
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
article the creditors of the dissolved partnership, as
against the separate creditors of the retiring or
deceased partner or the representative of the
deceased partner, have a prior right to any claim of
the retired partner or the representative of the
deceased partner against the person or partnership
continuing the business, on account of the retired or
deceased partner's interest in the dissolved
partnership or on account of any consideration
promised for such interest or for his right in
partnership property.
Nothing in this article shall be held to modify any
right of creditors to set aside any assignment on the
ground of fraud.
The use by the person or partnership continuing the
business of the partnership name, or the name of a
deceased partner as part thereof, shall not of itself
make the individual property of the deceased
partner liable for any debts contracted by such
person or partnership. (n)
Art. 1841. When any partner retires or dies, and the
business is continued under any of the conditions
set forth in the preceding article, or in Article 1837,
second paragraph, No. 2, without any settlement of
accounts as between him or his estate and the
person or partnership continuing the business,
unless otherwise agreed, he or his legal
representative as against such person or
partnership may have the value of his interest at the
date of dissolution ascertained, and shall receive as
an ordinary creditor an amount equal to the value of
his interest in the dissolved partnership with
interest, or, at his option or at the option of his legal
representative, in lieu of interest, the profits
attributable to the use of his right in the property of
the dissolved partnership; provided that the
creditors of the dissolved partnership as against the
separate creditors, or the representative of the
retired or deceased partner, shall have priority on
any claim arising under this article, as provided
Article 1840, third paragraph. (n)
Liability; Liability of a Partner (2010)
No.XV. A, B, and C entered into a partnership
to operate a restaurant business. When the
restaurant had gone past break-even stage
and started to garner considerable profits, C
died. A and B continued the business without
dissolving the partnership. They in fact opened
a branch of the restaurant, incurring
obligations in the process. Creditors started
demanding for the payment of their
obligations. (A). Who are liable for the
settlement of the partnership’s obligations?
Explain? (3%) SUGGESTED ANSWER: The
two remaining partners, A and B, are liable.
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When any partner dies and the business is GENERAL
continued without any settlement of PARTNER/SHIP LIMITED
accounts as between him or his estate, the PARTNER/SHIP
surviving partners are held liable for Personally liable for Liability extends only to
continuing the business despite the death partnership obligations capital contributions
of C (Art 1841, 1785, par 2, and Art 1833 of When manner of
NCC). (B).What are the creditors’ recourse/s? management is not
Explain. (3%) SUGGESTED ANSWER: agreed upon, all general No participation in
Creditors can file the appropriate actions, partners have an equal management
for instance, an action for collection of sum right in the management
of money against the “partnership at will” of the business
and if there are no sufficient funds, the Contribute cash, Contribute cash or
creditors may go after the private property or industry property only, not
properties of A and B (Art 816, NCC). industry
Creditors may also sue the estate of C. The Proper party to Not proper party to
estate is not excused from the liabilities of proceedings by/against proceedings by/against
the partnership even if C is dead already partnership partnership
but only up to the time that he remained a Interest not assignable Interest is freely
partner (Art 1829, 1835, par 2, NCC; without consent of other assignable
Testate Estate of Mota v. Serra, 47 Phil 464 partners
[1925]). However, the liability of C’s Name may appear in Name must not appear
individual properties shall be subject first firm name in firm name
to the payment of his separate debts (Art Prohibition against No prohibition against
1835. NCC). engaging in business engaging in business
Retirement, death, Does not have same
insolvency, insanity of effect; rights transferred
Art. 1842. The right to an account of his interest general partner to legal representative
shall accrue to any partner, or his legal dissolves partnership
representative as against the winding up partners or
the surviving partners or the person or partnership
continuing the business, at the date of dissolution, Art. 1844. Two or more persons desiring to form a
in the absence of any agreement to the contrary. (n) limited partnership shall:

CHAPTER 4 (1) Sign and swear to a certificate, which shall state

LIMITED PARTNERSHIP (n) -

Art. 1843. A limited partnership is one formed by
two or more persons under the provisions of the
following article, having as members one or more
general partners and one or more limited partners.
The limited partners as such shall not be bound by
the obligations of the partnership.
CHARACTERISTICS: (limited partnership)
1. Formed by compliance with requirements of
law;
2. One or more general partners control the
business;
3. One or more limited partners contribute to
capital and share in the profits but do not
participate in the management;
4. Limited partners are not personally liable
beyond their capital contributions;
5. Partnership debts are paid by common fund
and individual properties of the general
partner/s.
(a) The name of the partnership, adding thereto
the word "Limited";
(b) The character of the business;
(c) The location of the principal place of
business;
(d) The name and place of residence of each
member, general and limited partners being
respectively designated;
(e) The term for which the partnership is to
exist;
(f) The amount of cash and a description of and
the agreed value of the other property
contributed by each limited partner;
(g) The additional contributions, if any, to be
made by each limited partner and the times at

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____________________________________________________________________________________________________
which or events on the happening of which they
shall be made;
(h) The time, if agreed upon, when the
contribution of each limited partner is to be
returned;
(i) The share of the profits or the other
compensation by way of income which each
limited partner shall receive by reason of his
contribution;
(j) The right, if given, of a limited partner to
substitute an assignee as contributor in his
place, and the terms and conditions of the
substitution;
(k) The right, if given, of the partners to admit
additional limited partners;
(l) The right, if given, of one or more of the
limited partners to priority over other limited
partners, as to contributions or as to
compensation by way of income, and the nature
of such priority;
(m) The right, if given, of the remaining general
partner or partners to continue the business on
the death, retirement, civil interdiction, insanity
or insolvency of a general partner; and
(n) The right, if given, of a limited partner to
demand and receive property other than cash in
return for his contribution.
(2) File for record the certificate in the Office of the
Securities and Exchange Commission.
A limited partnership is formed if there has been
substantial compliance in good faith with the
foregoing requirements.
Art. 1845. The contributions of a limited partner may
be cash or property, but not services.
Art. 1846. The surname of a limited partner shall
not appear in the partnership name unless:
(1) It is also the surname of a general
partner, or
(2) Prior to the time when the limited
partner became such, the business has
been carried on under a name in which his
surname appeared.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
A limited partner whose surname appears in a
partnership name contrary to the provisions of the
first paragraph is liable as a general partner to
partnership creditors who extend credit to the
partnership without actual knowledge that he is not
a general partner.
Art. 1847. If the certificate contains a false
statement, one who suffers loss by reliance on such
statement may hold liable any party to the
certificate who knew the statement to be false:
(1) At the time he signed the certificate, or
(2) Subsequently, but within a sufficient time
before the statement was relied upon to enable
him to cancel or amend the certificate, or to file
a petition for its cancellation or amendment as
provided in Article 1865.
Art. 1848. A limited partner shall not become liable
as a general partner unless, in addition to the
exercise of his rights and powers as a limited
partner, he takes part in the control of the business.
Art. 1849. After the formation of a limited
partnership, additional limited partners may be
admitted upon filing an amendment to the original
certificate in accordance with the requirements of
Article 1865.
Art. 1850. A general partner shall have all the rights
and powers and be subject to all the restrictions
and liabilities of a partner in a partnership without
limited partners. However, without the written
consent or ratification of the specific act by all the
limited partners, a general partner or all of the
general partners have no authority to:
(1) Do any act in contravention of the certificate;
(2) Do any act which would make it impossible
to carry on the ordinary business of the
partnership;
(3) Confess a judgment against the partnership;
(4) Possess partnership property, or assign
their rights in specific partnership property, for
other than a partnership purpose;
(5) Admit a person as a general partner;
(6) Admit a person as a limited partner, unless
the right so to do is given in the certificate;
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(7) Continue the business with partnership
property on the death, retirement, insanity, civil
interdiction or insolvency of a general partner,
unless the right so to do is given in the
certificate.
Art. 1851. A limited partner shall have the same
rights as a general partner to:
(1) Have the partnership books kept at the
principal place of business of the
partnership, and at a reasonable hour to
inspect and copy any of them;
(2) Have on demand true and full
information of all things affecting the
partnership, and a formal account of
partnership affairs whenever circumstances
render it just and reasonable; and
(3) Have dissolution and winding up by
decree of court.
A limited partner shall have the right to receive a
share of the profits or other compensation by way of
income, and to the return of his contribution as
provided in Articles 1856 and 1857.
Art. 1852. Without prejudice to the provisions of
Article 1848, a person who has contributed to the
capital of a business conducted by a person or
partnership erroneously believing that he has
become a limited partner in a limited partnership, is
not, by reason of his exercise of the rights of a
limited partner, a general partner with the person or
in the partnership carrying on the business, or
bound by the obligations of such person or
partnership, provided that on ascertaining the
mistake he promptly renounces his interest in the
profits of the business, or other compensation by
way of income.
Art. 1853. A person may be a general partner and a
limited partner in the same partnership at the same
time, provided that this fact shall be stated in the
certificate provided for in Article 1844.
A person who is a general, and also at the same
time a limited partner, shall have all the rights and
powers and be subject to all the restrictions of a
general partner; except that, in respect to his
contribution, he shall have the rights against the
other members which he would have had if he were
not also a general partner.
Art. 1854. A limited partner also may loan money to
and transact other business with the partnership,
and, unless he is also a general partner, receive on
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
account of resulting claims against the partnership,
with general creditors, a pro rata share of the
assets. No limited partner shall in respect to any
such claim:
(1) Receive or hold as collateral security
any partnership property, or
(2) Receive from a general partner or the
partnership any payment, conveyance, or
release from liability if at the time the assets
of the partnership are not sufficient to
discharge partnership liabilities to persons
not claiming as general or limited partners.
The receiving of collateral security, or payment,
conveyance, or release in violation of the foregoing
provisions is a fraud on the creditors of the
partnership.
Art. 1855. Where there are several limited partners
the members may agree that one or more of the
limited partners shall have a priority over other
limited partners as to the return of their
contributions, as to their compensation by way of
income, or as to any other matter. If such an
agreement is made it shall be stated in the
certificate, and in the absence of such a statement
all the limited partners shall stand upon equal
footing.
Art. 1856. A limited partner may receive from the
partnership the share of the profits or the
compensation by way of income stipulated for in the
certificate; provided that after such payment is
made, whether from property of the partnership or
that of a general partner, the partnership assets are
in excess of all liabilities of the partnership except
liabilities to limited partners on account of their
contributions and to general partners.
Share; Demand during the Existence of
Partnership (2012) No.X.b) A partner cannot
demand the return of his share (contribution) during
the existence of a partnership. Do you agree?
Explain your answer. (5%) SUGGESTED
ANSWER: Yes, he is not entitled to the return of
his contribution to the capital of the
partnership, but only to the net profits from the
partnership business during the life of the
partnership period. If he is a limited partner,
however, he may ask for the return of his
contributions as provided in Art 1856 and 1857,
Civil Code.
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Art. 1857. A limited partner shall not receive from a
general partner or out of partnership property any
part of his contributions until:
(1) All liabilities of the partnership, except
liabilities to general partners and to limited
partners on account of their contributions,
have been paid or there remains property
of the partnership sufficient to pay them;
(2) The consent of all members is had,
unless the return of the contribution may be
rightfully demanded under the provisions of
the second paragraph; and
(3) The certificate is cancelled or so
amended as to set forth the withdrawal or
reduction.
Subject to the provisions of the first paragraph, a
limited partner may rightfully demand the return of
his contribution:
(1) On the dissolution of a partnership; or
(2) When the date specified in the
certificate for its return has arrived, or
(3) After he has six months' notice in writing
to all other members, if no time is specified
in the certificate, either for the return of the
contribution or for the dissolution of the
partnership.
In the absence of any statement in the certificate to
the contrary or the consent of all members, a limited
partner, irrespective of the nature of his
contribution, has only the right to demand and
receive cash in return for his contribution.
A limited partner may have the partnership
dissolved and its affairs wound up when:
(1) He rightfully but unsuccessfully
demands the return of his contribution, or
(2) The other liabilities of the partnership
have not been paid, or the partnership
property is insufficient for their payment as
required by the first paragraph, No. 1, and
the limited partner would otherwise be
entitled to the return of his contribution.
Art. 1858. A limited partner is liable to the
partnership:
(1) For the difference between his
contribution as actually made and that
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
stated in the certificate as having been
made; and
(2) For any unpaid contribution which he
agreed in the certificate to make in the
future at the time and on the conditions
stated in the certificate.
A limited partner holds as trustee for the
partnership:
(1) Specific property stated in the certificate
as contributed by him, but which was not
contributed or which has been wrongfully
returned, and
(2) Money or other property wrongfully paid
or conveyed to him on account of his
contribution.
The liabilities of a limited partner as set forth in this
article can be waived or compromised only by the
consent of all members; but a waiver or
compromise shall not affect the right of a creditor of
a partnership who extended credit or whose claim
arose after the filing and before a cancellation or
amendment of the certificate, to enforce such
liabilities.
When a contributor has rightfully received the return
in whole or in part of the capital of his contribution,
he is nevertheless liable to the partnership for any
sum, not in excess of such return with interest,
necessary to discharge its liabilities to all creditors
who extended credit or whose claims arose before
such return.
Art. 1859. A limited partner's interest is assignable.
A substituted limited partner is a person admitted to
all the rights of a limited partner who has died or
has assigned his interest in a partnership.
An assignee, who does not become a substituted
limited partner, has no right to require any
information or account of the partnership
transactions or to inspect the partnership books; he
is only entitled to receive the share of the profits or
other compensation by way of income, or the return
of his contribution, to which his assignor would
otherwise be entitled.
An assignee shall have the right to become a
substituted limited partner if all the members
consent thereto or if the assignor, being thereunto
empowered by the certificate, gives the assignee
that right.
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An assignee becomes a substituted limited partner
when the certificate is appropriately amended in
accordance with Article 1865.
The substituted limited partner has all the rights and
powers, and is subject to all the restrictions and
liabilities of his assignor, except those liabilities of
which he was ignorant at the time he became a
limited partner and which could not be ascertained
from the certificate.
The substitution of the assignee as a limited partner
does not release the assignor from liability to the
partnership under Articles 1847 and 1848.
Art. 1860. The retirement, death, insolvency,
insanity or civil interdiction of a general partner
dissolves the partnership, unless the business is
continued by the remaining general partners:
(1) Under a right so to do stated in the
certificate, or
(2) With the consent of all members.
Art. 1861. On the death of a limited partner his
executor or administrator shall have all the rights of
a limited partner for the purpose of setting his
estate, and such power as the deceased had to
constitute his assignee a substituted limited partner.
The estate of a deceased limited partner shall be
liable for all his liabilities as a limited partner.
Art. 1862. On due application to a court of
competent jurisdiction by any creditor of a limited
partner, the court may charge the interest of the
indebted limited partner with payment of the
unsatisfied amount of such claim, and may appoint
a receiver, and make all other orders, directions
and inquiries which the circumstances of the case
may require.
The interest may be redeemed with the separate
property of any general partner, but may not be
redeemed with partnership property.
The remedies conferred by the first paragraph shall
not be deemed exclusive of others which may exist.
Nothing in this Chapter shall be held to deprive a
limited partner of his statutory exemption.
Art. 1863. In settling accounts after dissolution the
liabilities of the partnership shall be entitled to
payment in the following order:
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(1) Those to creditors, in the order of
priority as provided by law, except those to
limited partners on account of their
contributions, and to general partners;
(2) Those to limited partners in respect to
their share of the profits and other
compensation by way of income on their
contributions;
(3) Those to limited partners in respect to
the capital of their contributions;
(4) Those to general partners other than for
capital and profits;
(5) Those to general partners in respect to
profits;
(6) Those to general partners in respect to
capital.
Subject to any statement in the certificate or to
subsequent agreement, limited partners share in
the partnership assets in respect to their claims for
capital, and in respect to their claims for profits or
for compensation by way of income on their
contribution respectively, in proportion to the
respective amounts of such claims.
Art. 1864. The certificate shall be cancelled when
the partnership is dissolved or all limited partners
cease to be such.
A certificate shall be amended when:
(1) There is a change in the name of the
partnership or in the amount or character of
the contribution of any limited partner;
(2) A person is substituted as a limited
partner;
(3) An additional limited partner is admitted;
(4) A person is admitted as a general
partner;
(5) A general partner retires, dies, becomes
insolvent or insane, or is sentenced to civil
interdiction and the business is continued
under Article 1860;
(6) There is a change in the character of
the business of the partnership;
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(7) There is a false or erroneous statement
in the certificate;
(8) There is a change in the time as stated
in the certificate for the dissolution of the
partnership or for the return of a
contribution;
(9) A time is fixed for the dissolution of the
partnership, or the return of a contribution,
no time having been specified in the
certificate, or
(10) The members desire to make a
change in any other statement in the
certificate in order that it shall accurately
represent the agreement among them.
Art. 1865. The writing to amend a certificate shall:
(1) Conform to the requirements of Article
1844 as far as necessary to set forth clearly
the change in the certificate which it is
desired to make; and
(2) Be signed and sworn to by all members,
and an amendment substituting a limited
partner or adding a limited or general
partner shall be signed also by the member
to be substituted or added, and when a
limited partner is to be substituted, the
amendment shall also be signed by the
assigning limited partner.
The writing to cancel a certificate shall be signed by
all members.
A person desiring the cancellation or amendment of
a certificate, if any person designated in the first
and second paragraphs as a person who must
execute the writing refuses to do so, may petition
the court to order a cancellation or amendment
thereof.
If the court finds that the petitioner has a right to
have the writing executed by a person who refuses
to do so, it shall order the Office of the Securities
and Exchange Commission where the certificate is
recorded, to record the cancellation or amendment
of the certificate; and when the certificate is to be
amended, the court shall also cause to be filed for
record in said office a certified copy of its decree
setting forth the amendment.
A certificate is amended or cancelled when there is
filed for record in the Office of the Securities and
Exchange Commission, where the certificate is
recorded:
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(1) A writing in accordance with the
provisions of the first or second paragraph,
or
(2) A certified copy of the order of the court
in accordance with the provisions of the
fourth paragraph;
(3) After the certificate is duly amended in
accordance with this article, the amended
certified shall thereafter be for all purposes
the certificate provided for in this Chapter.
Art. 1866. A contributor, unless he is a general
partner, is not a proper party to proceedings by or
against a partnership, except where the object is to
enforce a limited partner's right against or liability to
the partnership.
Art. 1867. A limited partnership formed under the
law prior to the effectivity of this Code, may become
a limited partnership under this Chapter by
complying with the provisions of Article 1844,
provided the certificate sets forth:
(1) The amount of the original contribution
of each limited partner, and the time when
the contribution was made; and
(2) That the property of the partnership
exceeds the amount sufficient to discharge
its liabilities to persons not claiming as
general or limited partners by an amount
greater than the sum of the contributions of
its limited partners.
A limited partnership formed under the law prior to
the effectivity of this Code, until or unless it
becomes a limited partnership under this Chapter,
shall continue to be governed by the provisions of
the old law.
Title X. - AGENCY
CHAPTER 1
NATURE, FORM AND KINDS OF AGENCY
Art. 1868. 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. (1709a)
CHARACTERISTICS:
1. Consensual;
2. Nominate;
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3. Preparatory;
4. Principal;
5. Unilateral but bilateral (if agency is for
compensation).
NATURE: Since it is a contract, there must be a
meeting of the minds as to consent, object, and
cause.
Exception to the contractual nature: When the
agency is created by operation of law. Ex: Agency
by Estoppel.
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.
PURPOSE:
To extend the personality of the principal through
the facility of the agent.
KINDS:
1. Actual
2. Apparent (ostensible)
3. By estoppels.
CAPACITY OF THE PARTIES:
1. Principal –
a. He may be a natural or juridical
person;
b. He must be capacitated. The rule is
if a person is capacitated to act for
himself or his own right, he can act
through an agent.
The agent is not liable where he
was ignorant of the principal’s
incapacity.
2. Agent –
a. In so far as 3rd persons are
concerned, it is enough that the
principal is capacitated.
b. In so far as his obligation to his
principal is concerned, the agent
must be able to bind himself.
c. But as an agent, some mental
capacity is necessary, so, those
who are absolutely incapacitated
(like insane persons) cannot act as
agents.
ESSENTIAL ELEMENTS OF AGENCY:
1. Consent;
2. Object – the execution of a juridical act in
relation to 3rd persons;
3. Agent acts as a representative and not for
himself;
4. Agent acts within the scope of his authority.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
An illegal termination of agency does not justify
reinstatement of the agent as such. The agency
cannot be compelled by the courts to be reinstated
because such relationship can only be effected with
the consent of the principal (Orient Air Services vs.
CA, GR No. 76931, May 29, 1991).
Reason: Agency is essentially fiduciary in
character.
Agency (2003)
Jo-Ann asked her close friend, Aissa, to buy some
groceries for her in the supermarket. Was there a
nominate contract entered into between Jo-Ann and
Aissa? In the affirmative, what was it? Explain. 5%
SUGGESTED ANSWER:
Yes, there was a nominate contract. On the assumption
that Aissa accepted the request of her close friend Jo-
Ann to but some groceries for her in the supermarket,
what they entered into was a nominate contract of
Agency. Article 1868 of the New Civil Code provides that
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.
ALTERNATIVE ANSWER:
Yes, they entered into a nominate contract of lease to
service in the absence of a relation of principal and agent
between them (Article 1644, New Civil Code).
ACTS THAT CANNOT BE DONE BY AGENT:
1. Personal acts like –
a. Making of will
b. Entering into marriage contract
2. Criminal acts – criminal liability is strictly
personal to the actor.
NOTE: There is, however, PRINCIPAL BY
INDUCEMENT but NO AGENT AS
DIRECT PARTICIPANT in the crime. There
is joint criminal liability not because of
agency but because of CONSPIRACY.
Nature of relations between agent and principal
– FIDUCIARY; based on trust and confidence.
1. Agent is stopped from asserting interest
against principal.
2. Agent must not act as an adverse party.
3. Agent must not act for an adverse party.
4. Agent must not use or disclose secret
information.
5. Agent must give notice of material facts.
AGENCY LEASE OF SERVICE
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Representation Employment A foreign manufacturer of computers and a Philippine
Agent exercises Lessor ordinarily distributor entered into a contract whereby the distributor
discretionary powers performs only agreed to order 1,000 units of the manufacturer's
computers every month and to resell them in the
ministerial functions Philippines at the manufacturer's suggested prices plus
3 persons are involved: 2 persons involved: 10%. All unsold units at the end of the year shall be
a. Principal; a. Lessor; bought back by the manufacturer at the same price they
b. Agent; b. Lessee were ordered. The manufacturer shall hold the distributor
c. 3rd person free and harmless from any claim for defects in the units.
dealing with the Is the agreement one for sale or agency? (5%)
agent SUGGESTED ANSWER:
Relates to commercial Relates more to the The contract is one of agency, not sale. The notion of
sale is negated by the following indicia: (1) the price is
or business transactions matters of mere manual fixed by the manufacturer with the 10% mark-up
or mechanical execution constituting the commission; (2) the manufacturer
reacquires the unsold units at exactly the same price; and
(3) warranty for the units was borne by the manufacturer.
The foregoing indicia
AGENCY GUARDIANSHIP units was never intended to transfer to the distributor.
Agent represents a Guardian represents an
capacitated person incapacitated person
Agent is appointed by Agent is appointed by AGENT INDEPENDENT
the principal the court and stands in CONTRACTOR
loco parentis Represents his principal Employed by the
Agent is subject to Guardian is subject to employer
directions of the the orders of the court Acts under the Acts according to his
principal and must act for the principal’s control and own method.
benefit of the ward instructions
Agent can make Guardian has no power Principal liable for torts Employer not liable for
principal personally to impose personal committed by the agent torts committed by the
liable liability on the ward within the scope of his independent contractor
authority

AGENCY TO SELL SALE AGENCY PARTNERSHIP

Agent receives the Buyer receives the A co-partner is not
goods as the principal’s goods as owner An agent must submit to subject to co-partner’s
goods the principal’s right to right to control, unless
Agent delivers the Buyer pays the price control there is agreement ot
proceeds of the sale the that effect
Agent can return the Buyer as a general rule Agent assumes no The partner binds not
object in case he is cannot return the object personal liability as long only the partnership
unable to sell the same sold as he acts within the members but himself as
to a 3rd person scope of his authority well
Agent in dealing with Buyer can deal with the Agent takes his agreed The profits belong to all
the thing received is thing as he pleases share of profits not as partners as common
bound to act according being the owner owner but as an agreed proprietors in agreed
to the instructions of his measure of proportions
principal compensation for his
service

2012 Bar Exam Question

85. Which of the following contracts is void? a)
An oral sale of a parcel of land. b) A sale of
land by an agent in a public instrument
where his authority from the principal is
oral. c) A donation of a wrist watch worth P
4,500.00. d) A relatively simulated contract
Agency vs. Sale (2000)
Art. 1869. Agency may be express, or implied from
the acts of the principal, from his silence or lack of
action, or his failure to repudiate the agency,
knowing that another person is acting on his behalf
without authority.
Agency may be oral, unless the law requires a
specific form. (1710a)

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Art. 1870. Acceptance by the agent may also be
express, or implied from his acts which carry out the
agency, or from his silence or inaction according to
the circumstances. (n)
Art. 1871. Between persons who are present, the
acceptance of the agency may also be implied if the
principal delivers his power of attorney to the agent
and the latter receives it without any objection. (n)
Art. 1872. Between persons who are absent, the
acceptance of the agency cannot be implied from
the silence of the agent, except:
(1) When the principal transmits his power
of attorney to the agent, who receives it
without any objection;
(2) When the principal entrusts to him by
letter or telegram a power of attorney with
respect to the business in which he is
habitually engaged as an agent, and he did
not reply to the letter or telegram. (n)
Art. 1873. If a person specially informs another or
states by public advertisement that he has given a
power of attorney to a third person, the latter
thereby becomes a duly authorized agent, in the
former case with respect to the person who
received the special information, and in the latter
case with regard to any person.
The power shall continue to be in full force until the
notice is rescinded in the same manner in which it
was given. (n)
WHAT IS AGENCY BY ESTOPPEL
There is really no agency at all, but the alleged
agent seemed to have APPARENT or
OSTENSIBLE authority, although in truth and in
fact, there is no real authority to represent another.
This is intended for the protection of 3rd persons
who rely in good faith upon such apparent authority.
AGENCY BY IMPLIED AGENCY
ESTOPPEL
No agency at all There is an actual
agency
Can be invoked only by
3rd person who in good
faith relied on the Reliance is not needed
conduct of the principal since the agent is a real
in holding the agent out agent
as being authorized
An agent by estoppel
has none of the rights of
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
an agent, except where An agent by implied
principal’s conducts are appointment has all the
such that the agent rights and liabilities of
reasonably believed an agent.
that the principal
intended him to act as
an agent
Art. 1874. When a sale of a piece of land or any
interest therein is through an agent, the authority of
the latter shall be in writing; otherwise, the sale
shall be void. (n)
2012 Bar Exam Question
100. Which of the following contracts of sale is
void? a) Sale of EGM’s car by KRP, EGM’s
agent, whose authority is not reduced into
writing. b) Sale of EGM’s piece of land by
KRP, EGM’s agent, whose authority is not
reduced into writing. c) Sale of EGM’s car by
KRP, a person stranger to EGM, without
EGM’s consent or authority. d) Sale of EGM’s
piece of land by KRP, a person stranger to
EGM, without EGM’s consent or authority.
2011 Bar Exam
(76) X, who was abroad, phoned his brother, Y,
authorizing him to sell X’s parcel of land in Pasay. X
sent the title to Y by courier service. Acting for his
brother, Y executed a notarized deed of absolute
sale of the land to Z after receiving payment. What
is the status of the sale? (A) Valid, since a notarized
deed of absolute sale covered the transaction and
full payment was made. (B) Void, since X should
have authorized agent Y in writing to sell the
land. (C) Valid, since Y was truly his brother X’s
agent and entrusted with the title needed to effect
the sale. (D) Valid, since the buyer could file an
action to compel X to execute a deed of sale.
Art. 1875. Agency is presumed to be for
compensation, unless there is proof to the contrary.
(n)
BROKER
One who negotiates contracts relative to property in
behalf of others and for a compensation/fee.
BROKER IS ENTITLED TO COMPENSATION
WHEN:
Whenever he brings to his principal a party who is
able and willing to take the property, and enter into
a valid contract upon the terms named by the
principal, although the particulars may be arranged
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and the matter negotiated and completed between scope of his authority beyond or outside the
the principal and purchaser directly. although it may be specific acts which he is
contrary to the latter’s authorized to perform
The broker should be paid his commission where special instructions
he is the efficient procuring cause in bringing the Termination of authority
sale. Efficient procuring cause means that there is a Duty imposed upon the
close proximate and causal connection between the 3rd party to inquire
efforts and labor of the agent and the principal’s makes termination of
sale of property (Manotoc Brothers Inc. vs. CA, 221 Apparent authority does the relationship as
SCRA 224, [1994]). not terminate by mere between the principal
revocation of his and agent effective as
RULE ON DOUBLE AGENCY authority without notice to such 3rd person
Disapproved by law for being against public plicy rd
to the 3 party unless the agency has
and sound morality EXCEPT where the agent acted been entrusted for the
with full knowledge of the principals. purpose of contracting
to such 3rd party
Right of compensation is case of double Construction of principal’s instructions
agency: Merely advisory in Strictly construed as
1. With knowledge of both principals – nature they limit the agent’s
recovery can be had from both principals. authority
2. Without knowledge of both principals –
agent cannot recover from any.
3. With knowledge of one principal – as to
Art. 1878. Special powers of attorney are
the principal who knew of the fact and as to
necessary in the following cases:
the agent, they are in pari delicto, the
courts shall leave them as they were, the
contract being void as against public policy (1) To make such payments as are not
and good morals. usually considered as acts of
administration;
Art. 1876. An agency is either general or special.
(2) To effect novations which put an end to
obligations already in existence at the time
The former comprises all the business of the
the agency was constituted;
principal. The latter, one or more specific
transactions. (1712)
(3) To compromise, to submit questions to
arbitration, to renounce the right to appeal
Art. 1877. An agency couched in general terms
from a judgment, to waive objections to the
comprises only acts of administration, even if the
venue of an action or to abandon a
principal should state that he withholds no power or
prescription already acquired;
that the agent may execute such acts as he may
consider appropriate, or even though the agency
should authorize a general and unlimited (4) To waive any obligation gratuitously;
management. (n)
(5) To enter into any contract by which the
ownership of an immovable is transmitted
GENERAL AGENT SPECIAL AGENT or acquired either gratuitously or for a
Scope of Authority valuable consideration;
Specific acts in
All acts connected with pursuance of particular (6) To make gifts, except customary ones
the business or instructions or with for charity or those made to employees in
employment in which he restrictions necessarily the business managed by the agent;
is engaged implied from the act to
be done (7) To loan or borrow money, unless the
Nature of Service Authorized latter act be urgent and indispensable for
Involves continuity of No continuity of service the preservation of the things which are
service under administration;
Extent to which agent may bind the principal
May bind his principal Cannot bind his (8) To lease any real property to another
by an act within the principal in a manner person for more than one year;

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(9) To bind the principal to render some Art. 1880. A special power to compromise does not
service without compensation; authorize submission to arbitration. (1713a)

(10) To bind the principal in a contract of Art. 1881. The agent must act within the scope of
partnership; his authority. He may do such acts as may be
conducive to the accomplishment of the purpose of
(11) To obligate the principal as a guarantor the agency. (1714a)
or surety;
Art. 1882. The limits of the agent's authority shall
(12) To create or convey real rights over not be considered exceeded should it have been
immovable property; performed in a manner more advantageous to the
principal than that specified by him. (1715)
(13) To accept or repudiate an inheritance;
Art. 1883. If an agent acts in his own name, the
principal has no right of action against the persons
(14) To ratify or recognize obligations
with whom the agent has contracted; neither have
contracted before the agency;
such persons against the principal.
(15) Any other act of strict dominion. (n)
In such case the agent is the one directly bound in
favor of the person with whom he has contracted,
as if the transaction were his own, except when the
General Agency vs. Special Agency (1992)
contract involves things belonging to the principal.
A as principal appointed B as his agent granting him
general and unlimited management over A's properties,
stating that A withholds no power from B and that the The provisions of this article shall be understood to
agent may execute such acts as he may consider be without prejudice to the actions between the
appropriate. principal and agent. (1717)
Accordingly, B leased A's parcel of land in Manila to C for
four (4) years at P60,000.00 per year, payable annually in
advance.
Agency; Real Estate Mortgage (2004)
B leased another parcel of land of A in Caloocan City to D
CX executed a special power of attorney authorizing DY
without a fixed term at P3,000.00 per month payable
to secure a loan from any bank and to mortgage his
monthly.
property covered by the owner’s certificate of title. In
B sold to E a third parcel of land belonging to A located in
securing a loan from MBank, DY did not specify that he
Quezon City for three (3) times the price that was listed in
was acting for CX in the transaction with said bank. Is CX
the inventory by A to B.
liable for the bank loan? Why or why not? Justify your
confined due to illness in the Makati Medical Center. Rule
answer. (5%)
on the validity and binding effect of each of the above
SUGGESTED ANSWER:
contracts upon A the principal. Explain your answers,
CX is liable for the bank loan because he authorized the
SUGGESTED ANSWER:
mortgage on his property to secure the loan contracted
The agency couched in general terms comprised only
by DY. If DY later defaults and fails to pay the loan, CX is
acts of administration (Art. 1877, Civil Code). The lease
liable to pay. However, his liability is limited to the extent
contract on the Manila parcel is not valid, not enforceable
of the value of the said property. ALTERNATIVE
and not binding upon A. For B to lease the property to C,
ANSWER: CX is not personally liable to the bank loan
for more than one (1) year, A must provide B with a
because it was contracted by DY in his personal capacity.
special power of attorney (Art. 1878. Civil Code).
Only the property of CX is liable. Hence, while CX has
The lease of the Caloocan City property to D is valid and
authorized the mortgage on his property to secure the
binding upon A. Since the lease is without a fixed term, it
loan of DY, the bank cannot sue CX to collect the loan in
is understood to be from month to month, since the rental
case DY defaults thereon. The bank can only foreclose
is payable monthly (Art. 1687, Civil Code).
the property of CX.
The sale of the Quezon City parcel to E is not valid and
not binding upon A. B needed a special power of attorney
And if the proceeds of the foreclosure are not sufficient to
to validly sell the land (Arts. 1877 and 1878, Civil Code).
All those contracts were executed by B while A was
The sale of the land at a very good price does not cure
pay the loan in full, the bank cannot run after CX for the
the defect of the contract arising from lack of authority
deficiency.
ALTERNATIVE ANSWER:
While as a general rule the principal is not liable for the
Art. 1879. A special power to sell excludes the contract entered into by his agent in case the agent acted
power to mortgage; and a special power to in his own name without disclosing his principal, such rule
mortgage does not include the power to sell. (n) does not apply if the contract involves a thing belonging
to the principal. In such case, the principal is liable under
Article 1883 of the Civil Code. The contract is deemed

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made on his behalf (Sy-juco v. Sy-juco 40 Phil. 634 committed to the agent private rule of guidance
[1920]). by the principal to the agent;
ALTERNATIVE ANSWER: independent and
CX would not be liable for the bank loan. CX's property
distinct in character
would also not be liable on the mortgage. Since DY did
not specify that he was acting for CX in the transaction Relates to the
with the bank, DY in effect acted in his own name. In the subject/business with Refers to the manner or
case of Rural Bank of Bombon v. CA, 212 SCRA, (1992), which the agent is mode of agent’s action
the Supreme Court, under the same facts, ruled that "in empowered to deal or
order to bind the principal by a mortgage on real property act
executed by an agent, it must upon its face purport to be Limitations of authority Without significance as
made, signed and sealed in the name of the principal, are operative as against against those with
otherwise, it will bind the agent only. It is not enough
those who neither knowledge nor
merely that the agent was in fact authorized to make the
mortgage, if he, has not acted in the name of the have/charged with notice of them
principal. Neither is it ordinarily sufficient that in the knowledge of them
mortgage the agent describes himself as acting by virtue Contemplated to be Not expected to be
of a power of attorney, if in fact the agent has acted in his made known to 3rd made known to those
own name and has set his own hand and seal to the parties dealing with the the agent deals
mortgage. There is no principle of law by which a person agent
can become liable on a real estate mortgage which she
never executed in person or by attorney in fact".

Art. 1888. An agent shall not carry out an agency if

CHAPTER 2
OBLIGATIONS OF THE AGENT
Art. 1884. The agent is bound by his acceptance to
carry out the agency, and is liable for the damages
which, through his non-performance, the principal
may suffer.
He must also finish the business already begun on
the death of the principal, should delay entail any
danger. (1718)
Art. 1885. In case a person declines an agency, he
is bound to observe the diligence of a good father of
a family in the custody and preservation of the
goods forwarded to him by the owner until the latter
should appoint an agent or take charge of the
goods. (n)
its execution would manifestly result in loss or
damage to the principal. (n)
Art. 1889. The agent shall be liable for damages if,
there being a conflict between his interests and
those of the principal, he should prefer his own. (n)
AGENT HAS THE RIGHT TO DISOBEY
PRINCIPAL’S INSTRUCTIONS WHEN:
1. When the instruction calls for the
commission of illegal acts;
2. Where he is privileged to do so to protect
his security in the subject matter of the
agency.
Art. 1890. If the agent has been empowered to
borrow money, he may himself be the lender at the
current rate of interest. If he has been authorized to
lend money at interest, he cannot borrow it without
the consent of the principal. (n)

Art. 1886. Should there be a stipulation that the
agent shall advance the necessary funds, he shall
be bound to do so except when the principal is
insolvent. (n)
Art. 1887. In the execution of the agency, the agent
shall act in accordance with the instructions of the
principal.
In default thereof, he shall do all that a good father
of a family would do, as required by the nature of
the business. (1719)
AUTHORITY INSTRUCTIONS
Sum total of the powers Contemplates only a
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 1891. Every agent is bound to render an
account of his transactions and to deliver to the
principal whatever he may have received by virtue
of the agency, even though it may not be owing to
the principal.
Every stipulation exempting the agent from the
obligation to render an account shall be void.
(1720a)
WHEN OBLIGATION TO ACCOUNT IS NOT
APPLICABLE:
1. If the agent acted only as a middle man
with the task of merely bringing together the
vendor and the vendee.
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2. If the agent informed the principal of the
gift/bonus he received from the purchaser
and his principal did not object thereto.
3. Where a right of lien exists in favor of the
agent
:
Art. 1892. The agent may appoint a substitute if the
principal has not prohibited him from doing so; but
he shall be responsible for the acts of the
substitute:
(1) When he was not given the power to
appoint one;
(2) When he was given such power, but
without designating the person, and the
person appointed was notoriously
incompetent or insolvent.
All acts of the substitute appointed against the
prohibition of the principal shall be void. (1721)
Art. 1893. In the cases mentioned in Nos. 1 and 2
of the preceding article, the principal may
furthermore bring an action against the substitute
with respect to the obligations which the latter has
contracted under the substitution. (1722a)
Art. 1894. The responsibility of two or more agents,
even though they have been appointed
simultaneously, is not solidary, if solidarity has not
been expressly stipulated. (1723)
Art. 1895. If solidarity has been agreed upon, each
of the agents is responsible for the non-fulfillment of
agency, and for the fault or negligence of his fellow
agents, except in the latter case when the fellow
agents acted beyond the scope of their authority.
(n)
Art. 1896. The agent owes interest on the sums he
has applied to his own use from the day on which
he did so, and on those which he still owes after the
extinguishment of the agency. (1724a)
Art. 1897. The agent who acts as such is not
personally liable to the party with whom he
contracts, unless he expressly binds himself or
exceeds the limits of his authority without giving
such party sufficient notice of his powers. (1725)
AGENT MAY INCUR PERSONAL LIABILITY –
1. When the agent expressly binds himself;
2. When the agent exceeds his authority;
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
3. When the agent by his own acts prevents
performance on the part of the principal;
4. When a person acts as an agent without
authority or without a principal;
5. A person who purports to act as agents of
an incapacitated principal.
Art. 1898. If the agent contracts in the name of the
principal, exceeding the scope of his authority, and
the principal does not ratify the contract, it shall be
void if the party with whom the agent contracted is
aware of the limits of the powers granted by the
principal. In this case, however, the agent is liable if
he undertook to secure the principal's ratification.
(n)
DOCTRINE OF AGENCY BY NECESSITY
Actually, an agency can never be created by
necessity; what is created is additional authority n
an agent appointed and authorized before the
emergency arose. The existence of emergency or
other unusual conditions may operate to invest in
an agent authority to meet the emergency.
Requisites:
1. The agent’s enlarged authority is exercised
for the principal’s protection;
2. The agent is unable to communicate with
the principal;
3. The means adopted are reasonable under
the circumstance;
4. The emergency really exists.
When may 3rd person repudiate the contract:
Before actual ratification by the principal or
before the principal has signified his
willingness to ratify the agent’s acts.
Effects of the act of the principal in receiving
the benefits of the transaction:
He is deemed to have ratified it. A principal
may not accept the benefits of a transaction
and at the same time repudiates its
burdens.
Conditions/requisites for ratification:
1. The principal must have capacity and
power to ratify;
2. He must have knowledge of material facts;
3. He must ratify the acts in its entirety;
4. The act must be capable of ratification;
5. The act must be done in behalf of the
principal.
NOTE: To be effective, ratification need not be
communicated or made known to the agent or to
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the 3rd party. The act of the principal, rather than his
communication is the key. But before ratification,
the 3rd person is free to revoke the unauthorized
contract.
Effects of ratification:
1. With respect to agent – relieves the agent
from liability to the 3rd party for the
unauthorized transaction, and to his
principal for acting without authority; may
recover compensation.
2. With respect to the principal – assumes
responsibility for the unauthorized act, as
fully as if the agent had acted under original
authority but not liable for acts outside the
authority approved by his ratification.
3. With respect to 3rd person – bound by the
ratification to the same extent as if the
ratified act had been authorized; cannot
raise the question of the agent’s authority to
do the ratified act.
Ratification is spelled out when the principal brings
legal proceedings to enforce the contract entered
into by the unauthorized agent, subject to the
qualification, however, that the bringing of the legal
proceedings is not deemed ratification where the
principal’s action is undertaken to avert a greater
loss rather than to assert gain (Robinson vs.
Borse).
Art. 1899. If a duly authorized agent acts in
accordance with the orders of the principal, the
latter cannot set up the ignorance of the agent as to
circumstances whereof he himself was, or ought to
have been, aware. (n)
Art. 1900. So far as third persons are concerned, an
act is deemed to have been performed within the
scope of the agent's authority, if such act is within
the terms of the power of attorney, as written, even
if the agent has in fact exceeded the limits of his
authority according to an understanding between
the principal and the agent. (n)
Powers of the Agent (1994)
Prime Realty Corporation appointed Nestor the exclusive
agent in the sale of lots of its newly developed
subdivision. Prime Realty told Nestor that he could not
collect or receive payments from the buyers. Nestor was
able to sell ten lots to Jesus and to collect the down
payments for said lots. He did not turn over the
collections to Prime Realty. Who shall bear the loss for
Nestor's defalcation, Prime Realty or Jesus?
SUGGESTED ANSWER:
a) The general rule is that a person dealing with an agent
must inquire into the authority of that agent. In the
present case, if Jesus did not inquire into that authority,
he is liable for the loss due to Nestor's defalcation unless
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Article 1900, Civil Code governs, in which case the
developer corporation bears the loss.
Art. 1900 Civil Code provides: "So far as third persons
are concerned, an act is deemed to have been performed
within the scope of the agent's authority, if such act is
within the terms of the power of attorney, as written, even
if the agent has in fact exceeded the limits of his authority
according to an understanding between the principal and
the agent.
However, if Jesus made due inquiry and he was not
informed by the principal Prime Realty of the limits of
Nestor's authority. Prime Realty shall bear the loss.
b) Considering that Prime Realty Corporation only
"told" Nestor that he could not receive or collect
payments, it appears that the limitation does not appear
in his written authority or power of attorney. In this case,
insofar as Jesus, who is a third person is concerned,
Nestor's acts of collecting payments is deemed to have
been performed within the scope of his authority {Article
1900. Civil Code). Hence, the principal is liable.
However, if Jesus was aware of the limitation of Nestor's
power as an agent, and Prime Realty Corporation does
not
ratify the sale contract, then Jesus shall be liable (Article
allowing the other general partner to bind the corporation
1898. Civil Code).
Art. 1901. A third person cannot set up the fact that
the agent has exceeded his powers, if the principal
has ratified, or has signified his willingness to ratify
the agent's acts. (n)
Art. 1902. A third person with whom the agent
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
secret orders and instructions of the principal do not
prejudice third persons who have relied upon the
power of attorney or instructions shown them. (n)
LIABILITY OF 3RD PERSONS TO THE PRINCIPAL
1. In contract – a 3rd person is liable to the
principal upon contracts entered into by his
agent, as if the contract has been entered
into by the principal.
2. In tort – the 3rd person’s tort liability to the
principal, in so far as the agent is involved
in tort, arises in 3 situations:
a. Where the 3rd person damages or
injures property or interest of the
principal in the possession of the
agent.
b. Where the 3rd person colludes with
the agent to injure or defraud the
principal.
c. Where the 3rd person induces the
agent to violate his contract (of
agency) with the principal to betray
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the trust reposed upon him by the
principal.
Art. 1903. The commission agent shall be
responsible for the goods received by him in the
terms and conditions and as described in the
consignment, unless upon receiving them he should
make a written statement of the damage and
deterioration suffered by the same. (n)
COMMISSION AGENT
One whose business is to receive and sell goods
for a commission and who is entrusted by the
principal with the possession of goods to be sold,
and usually selling in his own name.
ORDINARY AGENT COMMISSION AGENT
(FACTOR)
Acts for and in behalf of May act in his own
the principal name or in that of the
principal
Need not have Must be in possession
possession of the of the thing he disposes
principal’s goods
Art. 1904. The commission agent who handles
goods of the same kind and mark, which belong to
different owners, shall distinguish them by
countermarks, and designate the merchandise
respectively belonging to each principal. (n)
Art. 1905. The commission agent cannot, without
the express or implied consent of the principal, sell
on credit. Should he do so, the principal may
demand from him payment in cash, but the
commission agent shall be entitled to any interest or
benefit, which may result from such sale. (n)
Art. 1906. Should the commission agent, with
authority of the principal, sell on credit, he shall so
inform the principal, with a statement of the names
of the buyers. Should he fail to do so, the sale shall
be deemed to have been made for cash insofar as
the principal is concerned. (n)
Art. 1907. Should the commission agent receive on
a sale, in addition to the ordinary commission,
another called a guarantee commission, he shall
bear the risk of collection and shall pay the principal
the proceeds of the sale on the same terms agreed
upon with the purchaser. (n)
Agency; Guarantee Commission (2004)
As an agent, AL was given a guarantee commission, in
addition to his regular commission, after he sold 20 units
of refrigerators to a customer, HT Hotel. The customer,
however, failed to pay for the units sold. AL’s principal,
DRBI, demanded from AL payment for the customer’s
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
accountability. AL objected, on the ground that his job
was only to sell and not to collect payment for units
bought by the customer. Is AL’s objection valid? Can
DRBI collect from him or not? Reason. (5%)
SUGGESTED ANSWER:
No, AL's objection is not valid and DRBI can collect from
AL. Since AL accepted a guarantee commission, in
addition to his regular commission, he agreed to bear the
risk of collection and to pay the principal the proceeds of
the sale on the same terms agreed upon with the
purchaser (Article 1907, Civil Code)
Art. 1908. The commission agent who does not
collect the credits of his principal at the time when
they become due and demandable shall be liable
for damages, unless he proves that he exercised
due diligence for that purpose. (n)
Art. 1909. 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 a
compensation. (1726)
CHAPTER 3
OBLIGATIONS OF THE PRINCIPAL
Art. 1910. The principal must comply with all the
obligations which the agent may have contracted
within the scope of his authority.
As for any obligation wherein the agent has
exceeded his power, the principal is not bound
except when he ratifies it expressly or tacitly. (1727)
Art. 1911. Even when the agent has exceeded his
authority, the principal is solidarily liable with the
agent if the former allowed the latter to act as
though he had full powers. (n)
NOTE: There is estoppel in this case (provision).
WHO CAN BE ESTOPPED TO DENY THE
AGENCY:
1. Estoppel of agent – one professing to act
as agent is stopped to deny his agency
both as against his asserted principal and
the 3rd person interested in the transaction
in which he is engaged.
2. Estoppel by the principal –
a. As to agent – one knowing another is
acting as his agent and fails to
repudiate his acts, or accepts the
benefits of them, will be estopped to
deny the agency against such other.
b. As to sub-agent – for the principal to
be stopped from denying his liability to
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a 3rd person, he must have known or be the conduct of the agent
charged with knowledge of the
transaction and the terms of the
agreement between the agent and the
sub-agent. Art. 1912. The principal must advance to the agent,
c. As to 3rd persons – one who knows should the latter so request, the sums necessary for
that another is acting as his agent or the execution of the agency.
permitted another to appear as his
agent, to the injury of 3rd persons who
Should the agent have advanced them, the
have dealt with the apparent agent as
principal must reimburse him therefor, even if the
such in good faith and in the exercise of
business or undertaking was not successful,
reasonable prudence, is estopped to
provided the agent is free from all fault.
deny the agency.

3. Estoppel to third persons – 3rd person, The reimbursement shall include interest on the
having dealt with one as an agent may be sums advanced, from the day on which the
estopped to deny the agency as against the advance was made. (1728)
principal, agent and or 3rd persons in
interest. Art. 1913. The principal must also indemnify the
4. Estoppel of the government – agent for all the damages which the execution of
government (state) is neither estopped by the agency may have caused the latter, without
the mistake/error of its agents; but may be fault or negligence on his part. (1729)
estopped though affirmative acts of its
officers acting within the scope of their Art. 1914. The agent may retain in pledge the things
authority. which are the object of the agency until the principal
effects the reimbursement and pays the indemnity
set forth in the two preceding articles. (1730)
Appointment of Sub-Agent (1999)
X appoints Y as his agent to sell his products in Cebu
City. Can Y appoint a sub-agent and if he does, what are Art. 1915. If two or more persons have appointed
the effects of such appointment? (5%) an agent for a common transaction or undertaking,
SUGGESTED ANSWER: they shall be solidarily liable to the agent for all the
Yes, the agent may appoint a substitute or sub-agent if consequences of the agency. (1731)
the principal has not prohibited him from doing so, but he
shall be responsible for the acts of the substitute: NOTE: The rule in art. 1915 applies even when the
(1) when he was not given the power to appoint one;
(2) when he was given such power, but without
appointments were made by the principals in
designating the person, and the person appointed was separate acts, provided that they are for the same
notoriously incompetent or insolvent. transaction. The solidarity arises from the common
interest of the principals and not from the act of
RATIFICATION ESTOPPEL constituting the agency.
Rests on intention Rests on prejudice
Affects the entire Affects only relevant Art. 1916. When two persons contract with regard
transaction from the parts of the transaction to the same thing, one of them with the agent and
beginning the other with the principal, and the two contracts
Substance of ratification Substance of estoppel are incompatible with each other, that of prior date
is confirmation of an is the principal’s shall be preferred, without prejudice to the
unauthorized acts or inducement to another provisions of Article 1544. (n)
conduct after it has to act to his prejudice
been done Art. 1917. In the case referred to in the preceding
article, if the agent has acted in good faith, the
principal shall be liable in damages to the third
APPARENT AUTHORITY BY person whose contract must be rejected. If the
AUTHORITY ESTOPPEL agent acted in bad faith, he alone shall be
Though not actually Where the principal, by responsible. (n)
granted, principal his negligence, permits
knowingly permits/holds his agent to exercise Art. 1918. The principal is not liable for the
out agent as possessing powers not granted to expenses incurred by the agent in the following
the necessary powers him, even though the cases:
to act in a certain way principal may have no
notice or knowledge of
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____________________________________________________________________________________________________
(1) If the agent acted in contravention of the
principal's instructions, unless the latter
should wish to avail himself of the benefits
derived from the contract;
(2) When the expenses were due to the
fault of the agent;
(3) When the agent incurred them with
knowledge that an unfavorable result would
ensue, if the principal was not aware
thereof;
(4) When it was stipulated that the
expenses would be borne by the agent, or
that the latter would be allowed only a
certain sum. (n)
CHAPTER 4
MODES OF EXTINGUISHMENT OF AGENCY
Art. 1919. Agency is extinguished:
(1) By its revocation;
(2) By the withdrawal of the agent;
(3) By the death, civil interdiction, insanity
or insolvency of the principal or of the
agent;
(4) By the dissolution of the firm or
corporation which entrusted or accepted
the agency;
(5) By the accomplishment of the object or
purpose of the agency;
(6) By the expiration of the period for which
the agency was constituted. (1732a)
NOTE: The list is not exclusive. Causes particular
only to agency; may be extinguished by the modes
of extinguishment of obligations in general,
whenever they are applicable.
Agency is also terminated, as a matter of
law, upon the outbreak of war.
Art. 1920. The principal may revoke the agency at
will, and compel the agent to return the document
evidencing the agency. Such revocation may be
express or implied. (1733a)
Art. 1921. If the agency has been entrusted for the
purpose of contracting with specified persons, its
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
revocation shall not prejudice the latter if they were
not given notice thereof. (1734)
Art. 1922. If the agent had general powers,
revocation of the agency does not prejudice third
persons who acted in good faith and without
knowledge of the revocation. Notice of the
revocation in a newspaper of general circulation is a
sufficient warning to third persons. (n)
Art. 1923. The appointment of a new agent for the
same business or transaction revokes the previous
agency from the day on which notice thereof was
given to the former agent, without prejudice to the
provisions of the two preceding articles. (1735a)
Art. 1924. The agency is revoked if the principal
directly manages the business entrusted to the
agent, dealing directly with third persons. (n)
Art. 1925. When two or more principals have
granted a power of attorney for a common
transaction, any one of them may revoke the same
without the consent of the others. (n)
Art. 1926. A general power of attorney is revoked
by a special one granted to another agent, as
regards the special matter involved in the latter. (n)
Art. 1927. An agency cannot be revoked if a
bilateral contract depends upon it, or if it is the
means of fulfilling an obligation already contracted,
or if a partner is appointed manager of a
partnership in the contract of partnership and his
removal from the management is unjustifiable. (n)
Agency; coupled with an interest (2001)
Richard sold a large parcel of land in Cebu to Leo for
P100 million payable in annual installments over a period
of ten years, but title will remain with Richard until the
purchase price is fully paid. To enable Leo to pay the
price, Richard gave him a power-of-attorney authorizing
him to subdivide the land, sell the individual lots, and
deliver the proceeds to Richard, to be applied to the
purchase price. Five years later, Richard revoked the
power of attorney and took over the sale of the
subdivision lots himself. Is the revocation valid or not?
Why? (5%)
SUGGESTED ANSWER:
The revocation is not valid. The power of attorney given
to the buyer is irrevocable because it is coupled with an
interest: the agency is the means of fulfilling the
obligation of the buyer to pay the price of the land (Article
1927, CC). In other words, a bilateral contract (contract to
buy and sell the land) is dependent on the agency.
Art. 1928. The agent may withdraw from the agency
by giving due notice to the principal. If the latter
should suffer any damage by reason of the
withdrawal, the agent must indemnify him therefor,
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unless the agent should base his withdrawal upon
the impossibility of continuing the performance of
the agency without grave detriment to himself.
(1736a)
Art. 1929. The agent, even if he should withdraw
from the agency for a valid reason, must continue to
act until the principal has had reasonable
opportunity to take the necessary steps to meet the
situation. (1737a)
Art. 1930. The agency shall remain in full force and
effect even after the death of the principal, if it has
been constituted in the common interest of the latter
and of the agent, or in the interest of a third person
who has accepted the stipulation in his favor. (n)
Art. 1931. Anything done by the agent, without
knowledge of the death of the principal or of any
other cause which extinguishes the agency, is valid
and shall be fully effective with respect to third
persons who may have contracted with him in good
faith. (1738)
2011 Bar Exam Question
(20) An agent, authorized by a special power of
attorney to sell a land belonging to the
principal succeeded in selling the same to a
buyer according to the instructions given the
agent. The agent executed the deed of absolute
sale on behalf of his principal two days after
the principal died, an event that neither the
agent nor the buyer knew at the time of the
sale. What is the standing of the sale? (A)
Voidable. (B) Valid. (C) Void. (D)
Unenforceable.
Art. 1932. If the agent dies, his heirs must notify the
principal thereof, and in the meantime adopt such
measures as the circumstances may demand in the
interest of the latter. (1739)
NOTE: Title XIII and Title XIV are transferred to
group them with similar or related topics (THE
LAW ON CONTRACTS)
Title XIII. - ALEATORY CONTRACTS
GENERAL PROVISIONS
Art. 2010. By an aleatory contract, one of the
parties or both reciprocally bind themselves to give
or to do something in consideration of what the
other shall give or do upon the happening of an
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
event which is uncertain, or which is to occur at an
indeterminate time. (1790)
CHAPTER 1
INSURANCE
Art. 2011. The contract of insurance is governed by
special laws. Matters not expressly provided for in
such special laws shall be regulated by this Code.
(n)
Art. 2012. Any person who is forbidden from
receiving any donation under Article 739 cannot be
named beneficiary of a life insurance policy by the
person who cannot make any donation to him,
according to said article. (n)
CHAPTER 2
GAMBLING
Art. 2013. A game of chance is that which depends
more on chance or hazard than or skill or ability.
For the purposes of the following articles, in case of
doubt a game is deemed to be one of chance. (n)
Art. 2014. No action can be maintained by the
winner for the collection of what he has won in a
game of chance. But any loser in a game of chance
may recover his loss from the winner, with legal
interest from the time he paid the amount lost, and
subsidiarily from the operator or manager of the
gambling house. (1799a)
Aleatory Contracts; Gambling (2004)
A. Mr. ZY lost P100,000 in a card game called Russian
poker, but he had no more cash to pay in full the winner
at the time the session ended. He promised to pay PX,
the winner, two weeks thereafter. But he failed to do so
despite the lapse of two months, so PX filed in court a
suit to collect the amount of P50,000 that he won but
remained unpaid. Will the collection suit against ZY
prosper? Could Mrs. ZY file in turn a suit against PX to
recover the P100,000 that her husband lost? Reason.
(5%)
SUGGESTED ANSWER:
A. 1. The suit by PX to collect the balance of what he won
from ZY will not prosper. Under Article 2014 of the Civil
Code, no action can be maintained by the winner for the
collection of what he has won in a game of chance.
Although poker may depend in part on ability, it is
fundamentally a game of chance.
2) If the money paid by ZY to PX was conjugal or
community property, the wife of ZY could sue to recover it
because Article 117(7) of the Family Code provides that
losses in gambling or betting are borne exclusively by the
loser-spouse. Hence, conjugal or community funds may
not be used to pay for such losses. If the money were
exclusive
Article 2016 of the Civil Code if she and the family
needed the money for support.
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ALTERNATIVE ANSWER (2):
A. (2). Mrs. ZY cannot file a suit to recover what her
husband lost. Art 2014 of the Civil Code provides that any
loser in a game of chance may recover his loss from the
winner, with legal interest from the time he paid the
amount lost. This means that only he can file the suit.
Mrs. ZY cannot recover as a spouse who has interest in
the absolute community property or conjugal partnership
of gains, because under Art. 117(7} of the Family Code,
losses are borne exclusively by the loser-spouse.
Therefore, these cannot be charged against absolute
community property or conjugal partnership of gains. This
being so, Mrs. ZY has no interest in law to prosecute and
recover as she has no legal standing in court to do so.
Art. 2015. If cheating or deceit is committed by the
winner, he, and subsidiarily the operator or
manager of the gambling house, shall pay by way
of exemplary damages, not less than the equivalent
of the sum lost, in addition to the latter amount. If
both the winner and the loser have perpetrated
fraud, no action for recovery can be brought by
either. (n)
Art. 2016. If the loser refuses or neglects to bring an
action to recover what has been lost, his or her
creditors, spouse, descendants or other persons
entitled to be supported by the loser may institute
the action. The sum thereby obtained shall be
applied to the creditors' claims, or to the support of
the spouse or relatives, as the case may be. (n)
Art. 2017. The provisions of Article 2014 and 2016
apply when two or more persons bet in a game of
chance, although they take no active part in the
game itself. (1799a)
Art. 2018. If a contract which purports to be for the
delivery of goods, securities or shares of stock is
entered into with the intention that the difference
between the price stipulated and the exchange or
market price at the time of the pretended delivery
shall be paid by the loser to the winner, the
transaction is null and void. The loser may recover
what he has paid. (n)
Art. 2019. Betting on the result of sports, athletic
competitions, or games of skill may be prohibited by
local ordinances. (n)
Art. 2020. The loser in any game which is not one
of chance, when there is no local ordinance which
prohibits betting therein, is under obligation to pay
his loss, unless the amount thereof is excessive
under the circumstances. In the latter case, the
court shall reduce the loss to the proper sum.
(1801a)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
CHAPTER 3
LIFE ANNUITY
Art. 2021. The aleatory contract of life annuity binds
the debtor to pay an annual pension or income
during the life of one or more determinate persons
in consideration of a capital consisting of money or
other property, whose ownership is transferred to
him at once with the burden of the income. (1802a)
Art. 2022. The annuity may be constituted upon the
life of the person who gives the capital, upon that of
a third person, or upon the lives of various persons,
all of whom must be living at the time the annuity is
established.
It may also be constituted in favor of the person or
persons upon whose life or lives the contract is
entered into, or in favor of another or other persons.
(1803)
Art. 2023. Life annuity shall be void if constituted
upon the life of a person who was already dead at
the time the contract was entered into, or who was
at that time suffering from an illness which caused
his death within twenty days following said date.
(1804)
Art. 2024. The lack of payment of the income due
does not authorize the recipient of the life annuity to
demand the reimbursement of the capital or to
retake possession of the property alienated, unless
there is a stipulation to the contrary; he shall have
only a right judicially to claim the payment of the
income in arrears and to require a security for the
future income, unless there is a stipulation to the
contrary. (1805a)
Art. 2025. The income corresponding to the year in
which the person enjoying it dies shall be paid in
proportion to the days during which he lived; if the
income should be paid by installments in advance,
the whole amount of the installment which began to
run during his life shall be paid. (1806)
Art. 2026. He who constitutes an annuity by
gratuitous title upon his property, may provide at the
time the annuity is established that the same shall
not be subject to execution or attachment on
account of the obligations of the recipient of the
annuity. If the annuity was constituted in fraud of
creditors, the latter may ask for the execution or
attachment of the property. (1807a)
Art. 2027. No annuity shall be claimed without first
proving the existence of the person upon whose life
the annuity is constituted. (1808)
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Title XIV. - COMPROMISES AND ARBITRATIONS
CHAPTER 1
COMPROMISES
Art. 2028. A compromise is a contract whereby the
parties, by making reciprocal concessions, avoid a
litigation or put an end to one already commenced.
(1809a)
Art. 2029. The court shall endeavor to persuade the
litigants in a civil case to agree upon some fair
compromise. (n)
Art. 2030. Every civil action or proceeding shall be
suspended:
(1) If willingness to discuss a possible
compromise is expressed by one or both
parties; or
(2) If it appears that one of the parties,
before the commencement of the action or
proceeding, offered to discuss a possible
compromise but the other party refused the
offer.
The duration and terms of the suspension of the
civil action or proceeding and similar matters shall
be governed by such provisions of the rules of court
as the Supreme Court shall promulgate. Said rules
of court shall likewise provide for the appointment
and duties of amicable compounders. (n)
Art. 2031. The courts may mitigate the damages to
be paid by the losing party who has shown a
sincere desire for a compromise. (n)
Art. 2032. The court's approval is necessary in
compromises entered into by guardians, parents,
absentee's representatives, and administrators or
executors of decedent's estates. (1810a)
Art. 2033. Juridical persons may compromise only
in the form and with the requisites which may be
necessary to alienate their property. (1812a)
Art. 2034. There may be a compromise upon the
civil liability arising from an offense; but such
compromise shall not extinguish the public action
for the imposition of the legal penalty. (1813)
Art. 2035. No compromise upon the following
questions shall be valid:
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(1) The civil status of persons;
(2) The validity of a marriage or a legal
separation;
(3) Any ground for legal separation;
(4) Future support;
(5) The jurisdiction of courts;
(6) Future legitime. (1814a)
Art. 2036. A compromise comprises only those
objects which are definitely stated therein, or which
by necessary implication from its terms should be
deemed to have been included in the same.
A general renunciation of rights is understood to
refer only to those that are connected with the
dispute which was the subject of the compromise.
(1815)
Art. 2037. A compromise has upon the parties the
effect and authority of res judicata; but there shall
be no execution except in compliance with a judicial
compromise. (1816)
Art. 2038. A compromise in which there is mistake,
fraud, violence, intimidation, undue influence, or
falsity of documents, is subject to the provisions of
Article 1330 of this Code.
However, one of parties cannot set up a mistake of
fact as against the other if the latter, by virtue of the
compromise, has withdrawn from a litigation already
commenced. (1817a)
Art. 2039. When the parties compromise generally
on all differences which they might have with each
other, the discovery of documents referring to one
or more but not to all of the questions settled shall
not itself be a cause for annulment or rescission of
the compromise, unless said documents have been
concealed by one of the parties.
But the compromise may be annulled or rescinded
if it refers only to one thing to which one of the
parties has no right, as shown by the newly-
discovered documents. (n)
Art. 2040. If after a litigation has been decided by a
final judgment, a compromise should be agreed
upon, either or both parties being unaware of the
existence of the final judgment, the compromise
may be rescinded.
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Ignorance of a judgment which may be revoked or
set aside is not a valid ground for attacking a
compromise. (1819a)
Art. 2041. If one of the parties fails or refuses to
abide by the compromise, the other party may
either enforce the compromise or regard it as
rescinded and insist upon his original demand. (n)
CHAPTER 2
ARBITRATIONS
Art. 2042. The same persons who may enter into a
compromise may submit their controversies to one
or more arbitrators for decision. (1820a)
Art. 2043. The provisions of the preceding Chapter
upon compromises shall also be applicable to
arbitrations. (1821a)
Art. 2044. Any stipulation that the arbitrators' award
or decision shall be final, is valid, without prejudice
to Articles 2038, 2039, and 2040. (n)
Art. 2045. Any clause giving one of the parties
power to choose more arbitrators than the other is
void and of no effect. (n)
Stipulation; Arbitration Clause (2009)
No. XI. TRUE or FALSE. Answer TRUE if the
statement is true, or FALSE if the statement is
false. Explain your answer in not more than
two (2) sentences.
(A). A clause in an arbitration contract
granting one of the parties the power to choose
more arbitrators than the other renders the
arbitration contract void. (1%) SUGGESTED
ANSWER: True. The Civil Code provides
that “Any clause giving one of the parties
power to choose more arbitrators than the
other is void and of no effect” (Art 2045,
NCC).
Art. 2046. The appointment of arbitrators and the
procedure for arbitration shall be governed by the
provisions of such rules of court as the Supreme
Court shall promulgate. (n)
CREDIT
TRANSACTIONS
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Includes all transactions involving the purchase or
loan of goods, services or money in the present
with a promise to pay or deliver in the future
(contract of security).
2 TYPES OF CREDIT TRANSACTIONS:
1. Secured transactions – those supported
by collateral or an encumbrance of
property.
2. Unsecured transaction – those supported
only by a promise to pay or the personal
commitment of another such as a guarantor
or surety.
SECURITY
Something given, deposited or serving as a means
to ensure the fulfillment or enforcement of an
obligation of of protecting some interest in the
property.
2 TYPES OF SECURITY
1. Personal – when an individual becomes a
surety or guarantor.
2. Real or property – when an encumbrance
is made on property.
Title XI. - LOAN
GENERAL PROVISIONS
Art. 1933. By the contract of loan, one of the parties
delivers to another, either something not
consumable so that the latter may use the same for
a certain time and return it, in which case the
contract is called a commodatum; or money or
other consumable thing, upon the condition that the
same amount of the same kind and quality shall be
paid, in which case the contract is simply called a
loan or mutuum.
Commodatum is essentially gratuitous.
Simple loan may be gratuitous or with a stipulation
to pay interest.
In commodatum the bailor retains the ownership of
the thing loaned, while in simple loan, ownership
passes to the borrower. (1740a)
Commodatum & Mutuum
Commodatum (1993)
A, upon request, loaned his passenger Jeepney to B to
enable B to bring his sick wife from Paniqui. Tarlac to the
Philippine General Hospital in Manila for treatment. On
the way back to Paniqui, after leaving his wife at the
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hospital, people stopped the passenger Jeepney. B
stopped for them and allowed them to ride on board,
accepting payment from them just as in the case of
ordinary passenger Jeepneys plying their route. As B was
crossing Bamban, there was an onrush of Lahar from Mt
Pinatubo, the Jeep that was loaned to him was wrecked.
1) What do you call the contract that was entered into by
A and B with respect to the passenger Jeepney that was
loaned by A to B to transport the latter's sick wife to
Manila? 2) Is B obliged to pay A for the use of the
passenger
jeepney? 3) Is B liable to A for the loss of the Jeepney?
SUGGESTED ANSWER:
1) The contract is called "commodatum". [Art. 1933. Civil
Code). COMMODATUM is a contract by which one of the
parties (bailor) delivers to another (bailee) something not
consumable so that the latter may use it for a certain time
and return it.
2) No, B is not obliged to pay A for the use of the
passenger Jeepney because commodatum is essentially
gratuitous. (Art. 1933. Civil Code]
3) Yes, because B devoted the thing to a purpose
different from that for which it has been loaned (Art. 1942,
par. 2, Civil Code)
ALTERNATIVE ANSWER:
No, because an obligation which consists in the delivery
of a determinate thing shall be extinguished if it should be
lost or destroyed without the fault of the debtor, and
before he has incurred in delay. (Art. 1262. Civil Code)
2012 Bar Exam Question
76. The borrower in a contract of loan or
mutuum must pay interest to the lender. a) If
there is an agreement in writing to the
effect. b) As a matter of course. c) If the
amount borrowed is very large. d) If the lender
so demands at the maturity date.
Commodatum (2005)
Before he left for Riyadh to work as a mechanic, Pedro
left his Adventure van with Tito, with the understanding
that the latter could use it for one year for his personal or
family use while Pedro works in Riyadh. He did not tell
Tito that the brakes of the van were faulty. Tito had the
van tuned up and the brakes repaired. He spent a total
amount of P15,000.00. After using the vehicle for two
weeks, Tito discovered that it consumed too much fuel.
To make up for the expenses, he leased it to Annabelle.
Two months later, Pedro returned to the Philippines and
asked Tito to return the van. Unfortunately, while being
driven by Tito, the van was accidentally damaged by a
cargo truck without his fault.
a) Who shall bear the P15,000.00 spent for the repair of
the van? Explain. (2%)
ALTERNATIVE ANSWER:
Tito must bear the P15,000.00 expenses for the van.
Generally, extraordinary expenses for the preservation of
the thing loaned are paid by the bailor, he being the
owner of the thing loaned. In this case however, Tito
should bear the expenses because he incurred the
expenses without first informing Pedro about it. Neither
was the repair shown to be urgent. Under Article 1949 of
the Civil Code, bailor generally bears the extraordinary
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
expenses for the preservation of the thing and should
refund the said expenses if made by the bailee; Provided,
The bailee brings the same to the attention of the bailor
before incurring them, except only if the repair is urgent
that reply cannot be awaited.
ALTERNATIVE ANSWER:
The P15,000.00 spent for the repair of the van should be
borne by Pedro. Where the bailor delivers to the bailee a
non-consummable thing so that the latter may use it for a
certain time and return the identical thing, the contract
perfected is a Contract of Commodatum. (Art. 1933, Civil
Code) The bailor shall refund the extraordinary expenses
during the contract for the preservation of the thing
loaned provided the bailee brings the same to the
knowledge of the bailor before incurring the same, except
when they are so urgent that the reply to the notification
cannot be awaited without danger. (Art. 1949 of the Civil
Code)
In the given problem, Pedro left his Adventure van with
Tito so that the latter could use it for one year while he
was in Riyadh. There was no mention of a consideration.
Thus, the contract perfected was commodatum. The
amount of P15,000.00 was spent by Tito to tune up the
van and to repair its brakes. Such expenses are extra-
ordinary expenses because they are necessary for the
preservation of the van Thus, the same should be borne
by the bailor, Pedro.
b) Who shall bear the costs for the van's fuel, oil and
other materials while it was with Tito? Explain. (2%)
SUGGESTED ANSWER:
Tito must also pay for the ordinary expenses for the use
and preservation of the thing loaned. He must pay for the
gasoline, oil, greasing and spraying. He cannot ask for
reimbursement because he has the obligation to return
the identical thing to the bailor. Under Article 1941 of the
Civil Code, the bailee is obliged to pay for the ordinary
expenses for the use and preservation of the thing
loaned.
c) Does Pedro have the right to retrieve the van even
before the lapse of one year? Explain. (2%)
ALTERNATIVE ANSWER:
No, Pedro does not have the right to retrieve the van
before the lapse of one year. The parties are mutually
bound by the terms of the contract. Under the Civil Code,
there are only 3 instances when the bailor could validly
ask for the return of the thing loaned even before the
expiration of the period. These are when: (1) a precarium
contract was entered (Article 1947); (2) if the bailor
urgently needs the thing (Article 1946); and (3) if the
bailee commits acts of ingratitude (Article 1948). Not one
of the situations is present in this case.
The fact that Tito had leased the thing loaned to
Annabelle would not justify the demand for the return of
the thing loaned before expiration of the period. Under
Article 1942 of the Civil Code, leasing of the thing loaned
to a third person not member of the household of the
bailee, will only entitle bailor to hold bailee liable for the
loss of the thing loaned.
ALTERNATIVE ANSWER:
As a rule, Pedro does not have the right to retrieve the
van before the lapse of one year. Article 1946 of the
Code provides that "the bailor cannot demand the return
of the thing loaned till after the expiration of the period
stipulated, or after the accomplishment of the use for
which the commodatum has been constituted. However,
if in the meantime, he should have urgent need of the
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thing, he may demand its return or temporary use." In the
given problem, Pedro allowed Tito to use the van for one
year. Thus, he should be bound by the said agreement
and he cannot ask for the return of the car before the
expiration of the one year period. However, if Pedro has
urgent need of the van, he may demand for its return or
temporary use.
d) Who shall bear the expenses for the accidental
damage caused by the cargo truck, granting that the truck
driver and truck owner are insolvent? Explain. (2%)
SUGGESTED ANSWER:
Generally, extraordinary expenses arising on the
occasion of the actual use of the thing loaned by the
bailee, even if incurred without fault of the bailee, shall be
shouldered equally by the bailor and the bailee. (Art.
1949 of the Civil Code). However, if Pedro had an urgent
need for the vehicle, Tito would be in delay for failure to
immediately return the same, then Tito would be held
liable for the extraordinary expenses.
Art. 1934. An accepted promise to deliver
something by way of commodatum or simple loan is
binding upon parties, but the commodatum or
simple loan itself shall not be perfected until the
delivery of the object of the contract. (n)
CHAPTER 1
COMMODATUM
SECTION 1 - Nature of Commodatum
Art. 1935. The bailee in commodatum acquires the
used of the thing loaned but not its fruits; if any
compensation is to be paid by him who acquires the
use, the contract ceases to be a commodatum.
(1941a)
Art. 1936. Consumable goods may be the subject of
commodatum if the purpose of the contract is not
the consumption of the object, as when it is merely
for exhibition. (n)
Commodatum vs. Usufruct (1998)
Distinguish usufruct from commodatum and state whether
these may be constituted over consumable goods. [2%]
SUGGESTED ANSWER:
1. USUFRUCT is a right given to a person (usufructuary)
to enjoy the property of another with the obligation of
preserving its form and substance. (Art. 562. Civil Code)
On the other hand, COMMODATUM is a contract by
which one of the parties (bailor) delivers to another
(bailee) something not consumable so that the latter may
use it for a certain time and return it.
In usufruct the usufructuary gets the right to the use and
to the fruits of the same, while in commodatum, the bailee
only acquires the use of the thing loaned but not its fruits.
Usufruct may be constituted on the whole or a part of the
fruits of the thing. (Art. 564. Civil Code). It may even be
constituted over consumables like money (Alunan v.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Veloso, 52 Phil. 545). On the other hand, in
commodatum, consumable goods may be subject thereof
only when the purpose of the contract is not the
consumption of the object, as when it is merely for
exhibition. (Art. 1936, Civil Code)
ANOTHER ANSWER:
1. There are several points of distinction between
usufruct and commodatum. Usufruct is constituted by
law, by contract, by testamentary succession, or by
prescription (Art. 1933. Civil Code). Usufruct creates a
real right to the fruits of another's property, while
commodatum creates only a purely personal right to use
another's property, and requires a stipulation to enable
the bailee to "make use" of the fruits (Arts. 1939& 1940,
Civil Code). Usufruct maybe onerous while commodatum
is always or essentially gratuitous (Arts. 1933 & 1935,
Civil Code). The contract constituting usufruct is
consensual, while commodatum is a real contract
(perfected only by delivery of the subject matter thereof).
However, both involve the enjoyment by a person of the
property of another, differing only as to the extent and
scope of such enjoyment [jus fruendi in one and Jus
utendi in the other); both may have as subject matter
either an immovable or a movable; and, both maybe
constituted over consumable goods (Arts. 574 & 1936,
Civil Code). A consumable thing may be the subject-
matter of an abnormal usufruct but in a normal usufruct,
the subject-matter may be used only for exhibition. A
commodatum of a consumable thing may be only for the
purpose of exhibiting, not consuming it.
Art. 1937. Movable or immovable property may be
the object of commodatum. (n)
Art. 1938. The bailor in commodatum need not be
the owner of the thing loaned. (n)
Art. 1939. Commodatum is purely personal in
character. Consequently:
(1) The death of either the bailor or the
bailee extinguishes the contract;
(2) The bailee can neither lend nor lease
the object of the contract to a third person.
However, the members of the bailee's
household may make use of the thing
loaned, unless there is a stipulation to the
contrary, or unless the nature of the thing
forbids such use. (n)
Art. 1940. A stipulation that the bailee may make
use of the fruits of the thing loaned is valid. (n)
SECTION 2. - Obligations of the Bailee
Art. 1941. The bailee is obliged to pay for the
ordinary expenses for the use and preservation of
the thing loaned. (1743a)
2013 Exam MCQ (October 13, 2013)
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IV. Cruz lent Jose his car until Jose finished
his Bar exams. Soon after Cruz delivered the
car, Jose brought it to Mitsubishi Cubao for
maintenance check up and incurred costs of
P8,000. Seeing the car's peeling and faded
paint, Jose also had the car repainted for
P10,000. Answer the two questions below
based on these common facts. IV. (1) After the
bar exams, Cruz asked for the return of his
car. Jose said he would return it as soon as
Cruz has reimbursed him for the car
maintenance and repainting costs of P 18,000.
Is Jose's refusal justified? (1%) (A) No, Jose's
refusal is not justified. In this kind of contract,
Jose is obliged to pay for all the expenses
incurred for the preservation of the thing
loaned. (B) Yes, Jose's refusal is justified. He is
obliged to pay for all the ordinary and
extraordinary expenses, but subject to
reimbursement from Cruz. (C) Yes, Jose's
refusal is justified. The principle of unjust
enrichment warrants the reimbursement of
Jose's expenses. (D) No, Jose's refusal is not
justified. The expenses he incurred are
useful for the preservation of the thing
loaned. It is Jose's obligation to shoulder
these useful expenses.
SUGGESTED ANSWER: (D) No, Jose's refusal
is not justified. The expenses he incurred
are useful for the preservation of the thing
loaned. It is Jose's obligation to shoulder
these useful expenses. In commodatum, the
bailee is obliged to pay for the ordinary
expenses for the use and preservation of
the thing loaned (Art 1941, Civil Code). The
bailee, Jose, has no right of retention on
the ground that the bailor owes him
something, even if it may be by reason of
expenses. He can only retain it if he suffers
damages by reason of a flaw or defect in the
thing loaned of which the bailor knows (Art
1951, Civil Code). IV. (2) During the bar exam
month, Jose lent the car to his girlfriend, Jolie,
who parked the car at the Mall of Asia's open
parking lot, with the ignition key inside the
car. Car thieves broke into and took the car. Is
Jose liable to Cruz for the loss of the car due
to Jolie's negligence? (1%)
(A) No, Jose is not liable to Cruz as the loss
was not due to his fault or negligence. (B) No,
Jose is not liable to Cruz. In the absence of
any prohibition, Jose could lend the car to
Jolie. Since the loss was due to force majeure,
neither Jose nor Jolie is liable. (C) Yes, Jose
is liable to Cruz. Since Jose lent the car to
Jolie without Cruz's consent, Jose must
bear the consequent loss of the car. (D) Yes,
Jose is liable to Cruz. The contract between
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
them is personal in nature. Jose can neither
lend nor lease the car to a third person.
SUGGESTED ANSWER: (C) Yes, Jose is liable
to Cruz. Since Jose lent the car to Jolie
without Cruz's consent, Jose must bear the
consequent loss of the car. The bailee is
liable for the loss of the thing, even if it
should be through a fortuitous event if he
lends or leases the thing to a third person,
who is not a member of his household (Art
1942, Civil Code).
Art. 1942. The bailee is liable for the loss of the
thing, even if it should be through a fortuitous event:
(1) If he devotes the thing to any purpose
different from that for which it has been
loaned;
(2) If he keeps it longer than the period
stipulated, or after the accomplishment of
the use for which the commodatum has
been constituted;
(3) If the thing loaned has been delivered
with appraisal of its value, unless there is a
stipulation exemption the bailee from
responsibility in case of a fortuitous event;
(4) If he lends or leases the thing to a third
person, who is not a member of his
household;
(5) If, being able to save either the thing
borrowed or his own thing, he chose to
save the latter. (1744a and 1745)
Art. 1943. The bailee does not answer for the
deterioration of the thing loaned due only to the use
thereof and without his fault. (1746)
Art. 1944. The bailee cannot retain the thing loaned
on the ground that the bailor owes him something,
even though it may be by reason of expenses.
However, the bailee has a right of retention for
damages mentioned in Article 1951. (1747a)
Art. 1945. When there are two or more bailees to
whom a thing is loaned in the same contract, they
are liable solidarily. (1748a)
SECTION 3. - Obligations of the Bailor
Art. 1946. The bailor cannot demand the return of
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the thing loaned till after the expiration of the period
stipulated, or after the accomplishment of the use
for which the commodatum has been constituted.
However, if in the meantime, he should have urgent
need of the thing, he may demand its return or
temporary use.
In case of temporary use by the bailor, the contract
of commodatum is suspended while the thing is in
the possession of the bailor. (1749a)
Art. 1947. The bailor may demand the thing at will,
and the contractual relation is called a precarium,
in the following cases:
(1) If neither the duration of the contract nor
the use to which the thing loaned should be
devoted, has been stipulated; or
(2) If the use of the thing is merely tolerated
by the owner. (1750a)
Art. 1948. The bailor may demand the immediate
return of the thing if the bailee commits any act of
ingratitude specified in Article 765. (n)
2013 Exam MCQ (October 13, 2013)
V. In 2005, L, M, N, 0 and P formed a
partnership. L, M and N were capitalist
partners who contributed P500,000 each,
while 0, a limited partner, contributed P1
,000,000. P joined as an industrial partner,
contributing only his services. The Articles of
Partnership, registered with the Securities and
Exchange Commission, designated L and 0 as
managing partners; L was liable only to the
extent of his capital contribution; and P was
not liable for losses. In 2006, the partnership
earned a net profit of P800,000. In the same
year, P engaged in a different business with
the consent of all the partners. However, in
2007, the partnership incurred a net loss of
P500,000. In 2008,the partners dissolved the
partnership. The proceeds of the sale of
partnership assets were insufficient to settle
its obligation. After liquidation, the
partnership had an unpaid liability
ofP300,000.
V. (l) Assuming that the just and equitable
share of the industrial partner, P, in the profit
in 2006 amounted to P1 00,000, how much is
the share of 0, a limited partner, in the
P800,000 net profit? (1%) (A) P160,000. (B)
P175,000.
(C) P280,000. (D) P200,000. (E) None of the
above.
SUGGESTED ANSWER: (C) P280,000. First,
deduct the share of P from the profits.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
P800,000 less P100,000 is P700,000. Next,
get the share of O by following the
proportion that the shares of L, M, N, O is
1:1:1:2, respectively.
V. (2) In 2007, how much is the share of 0, a
limited partner, in the net loss of P500,000?
(1%) (A) P 0. (B) P1 00,000. (C) P125,000. (D)
P200,000. (E) None of the above.
SUGGESTED ANSWER: (D) P200,000 A
limited partner shall not become liable a s a
general partner unless, in addition to the
exercise of his rights and powers as a
limited partner, he takes part in the
control of the business (Art 1948, Civil
Code). In the absence of stipulation as to
profits and losses, the share of each partner
in the losses shall be proportionate to what
he may have contributed (Art 1797).
V. (3) Can the partnership creditors hold L, 0
and Pliable after all the assets of the
partnership are exhausted? (1%) (A) Yes. The
stipulation exempting P from losses is valid
only among the partners. L is liable because
the agreement limiting his liability to his
capital contribution is not valid insofar as the
creditors are concerned. Having taken part in
the management of the partnership, 0 is liable
as capitalist partner. (B) No. P is not liable
because there is a valid stipulation exempting
him from losses. Since the other partners
allowed him to engage in an outside business
activity, the stipulation absolving P from
liability is valid. For 0, it is basic that a limited
partner is liable only up to the extent of his
capital contribution. (C) Yes. The stipulations
exempting P and L from losses are not binding
upon the creditors. 0 is likewise liable because
the partnership was not formed in accordance
with the requirements of a limited partnership.
(D) No. The Civil Code allows the partners to
stipulate that a partner shall not be liable for
losses. The registration of the Articles of
Partnership embodying such stipulations
serves as constructive notice to the
partnership creditors.(E) None of the above is
completely accurate. (E) None of the above is
completely accurate. SUGGESTED
ANSWER: (E) None of the above is
completely accurate.
Art. 1949. The bailor shall refund the extraordinary
expenses during the contract for the preservation of
the thing loaned, provided the bailee brings the
same to the knowledge of the bailor before incurring
them, except when they are so urgent that the reply
to the notification cannot be awaited without
danger.
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If the extraordinary expenses arise on the occasion risk of loss suffered by the exclusively by
of the actual use of the thing by the bailee, even bailor since he is a fortuitous
though he acted without fault, they shall be borne the owner event and he
equally by both the bailor and the bailee, unless is not therefore
there is a stipulation to the contrary. (1751a) discharged
from his duty
Art. 1950. If, for the purpose of making use of the to pay)
thing, the bailee incurs expenses other than those Nature Purely personal Not purely
referred to in Articles 1941 and 1949, he is not personal
entitled to reimbursement. (n)
Mutuum vs. Commodatum (2004)
Distinguish briefly but clearly between Mutuum and
Art. 1951. The bailor who, knowing the flaws of the commodatum.
thing loaned, does not advise the bailee of the SUGGESTED ANSWER:
same, shall be liable to the latter for the damages In MUTUUM, the object borrowed must be a consumable
which he may suffer by reason thereof. (1752) 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
Art. 1952. The bailor cannot exempt himself from
same kind and quality. In COMMODATUM, the object
the payment of expenses or damages by borrowed is usually a non-consumable thing the
abandoning the thing to the bailee. (n) ownership of which is not transferred to the borrower who
incurs the obligation to return the very thing to the lender.

CHAPTER 2
COMMODATUM MUTUUM SIMPLE LOAN OR MUTUUM
(simple loan)
Ordinarily non- Money or Art. 1953. A person who receives a loan of money
Object consumable other or any other fungible thing acquires the ownership
consumable thereof, and is bound to pay to the creditor an equal
thing amount of the same kind and quality. (1753a)
Ownership of Ownership is Ownership is
the thing retained by the transferred to LOAN DISCOUNTING PAPER
lender the borrower Interest is usually taken Interest is deducted in
Gratuitous or at the expiration of a advance
Cause Essentially onerous (if credit
gratuitous with stipulation Always on a single- Double-name paper
to pay interest) name paper
Borrower need More expensive for the
Thing to be Borrower must only pay the borrower because
returned return the same same amount interest is calculated on
thing loaned of same kind the amount loaned and
and quality not the amount actually
May involve real Only personal received.
Subject matter or personal property
property
Loan for use or Loan for Art. 1954. A contract whereby one person transfers
Purpose temporary consumption the ownership of non-fungible things to another with
possession the obligation on the part of the latter to give things
Bailor may of the same kind, quantity, and quality shall be
demand the Lender may considered a barter. (n)
return of the not demand its
When to thing loaned return before Art. 1955. The obligation of a person who borrows
return before the the lapse of money shall be governed by the provisions of
expiration of the the term Articles 1249 and 1250 of this Code.
term in case of agreed upon
urgent need If what was loaned is a fungible thing other than
Borrower money, the debtor owes another thing of the same
suffers the kind, quantity and quality, even if it should change
Loss of the loss (even if in value. In case it is impossible to deliver the same
Who bears the subject is caused

JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 405

____________________________________________________________________________________________________
kind, its value at the time of the perfection of the
loan shall be paid. (1754a)
Art. 1249. The payment of debts in money shall be
made in the currency stipulated, and if it is not
possible to deliver such currency, then in the
currency which is legal tender in the Philippines.
The delivery of promissory notes payable to order, or
bills of exchange or other mercantile documents shall
produce the effect of payment only when they have
been cashed, or when through the fault of the
creditor they have been impaired.
In the meantime, the action derived from the original
obligation shall be held in the abeyance. (1170)
Art. 1250. In case an extraordinary inflation or
deflation of the currency stipulated should
supervene, the value of the currency at the time of
the establishment of the obligation shall be the basis
of payment, unless there is an agreement to the
contrary.
Art. 1956. No interest shall be due unless it has
been expressly stipulated in writing. (1755a)
EXCEPTIONS TO ART. 1956:
1. Indemnity for damages – the debtor in
delay is liable to pay legal interest (6% or
12 %) as indemnity for damages even in
the absence of a stipulation for the payment
of interest. Interest as indemnity for
damages is payable only in case of default
or non-performance of contract.
Basis for computation:
a. Central Bank Circular 416 – 12%
per annum in cases of –
1) Loans
2) Forbearance of money,
goods or credits
3) Judgments involving such
loans or forbearance, in the
absence as to such rate of
interest
4) During the interim period
from the date of judgment
until actual payment
b. Art. 2209 of the Civil Code – 6%
per annum in cases of –
1) Other sources (like sale)
2) Damages arising from
injury to persons
3) Loss of property which
does not involve a loan.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
2. Interest accruing from unpaid interest –
interest due shall earn legal interest from
the time it is judicially demanded although
the obligation may be silent upon this point.
Mutuum; Interests (2001)
Samuel borrowed P300,000.00 housing loan from the
bank at 18% per annum interest. However, the
promissory note contained a proviso that the bank
"reserves the right to increase interest within the limits
allowed by law," By virtue of such proviso, over the
objections of Samuel, the bank increased the interest rate
periodically until it reached 48% per annum. Finally,
Samuel filed an action questioning the right of the bank to
increase the interest rate up to 48%. The bank raised the
defense that the Central Bank of the Philippines had
already suspended the Usury Law. Will the action prosper
or not? Why? (5%)
SUGGESTED ANSWER:
The action will prosper. While it is true that the interest
ceilings set by the Usury Law are no longer in force, it
has been held that PD No. 1684 and CB Circular No. 905
merely allow contracting parties to stipulate freely on any
adjustment in the interest rate on a loan or forbearance of
money but do not authorize a unilateral increase of the
interest rate by one party without the other's consent
(PNB v. CA, 238 SCRA 2O [1994]]). To say otherwise will
violate the principle of mutuality of contracts under Article
1308 of the Civil Code. To be valid, therefore, any change
of interest must be mutually agreed upon by the parties
(Dizon v, Magsaysay, 57 SCRA 25O [1974]). In the
present problem, the debtor not having given his consent
to the increase in interest, the increase is void.
Mutuum; Interest; Solutio Indebiti (2012)
No.VI.a) Siga-an granted a loan to Villanueva
in the amount of P 540, 000.00. Such
agreement was not reduced to writing. Siga-an
demanded interest which was paid by
Villanueva in cash and checks. The total
amount Villanueva paid accumulated to P 1,
200, 000.00. Upon advice of her lawyer,
Villanueva demanded for the return of the
excess amount of P 660, 000.00 which was
ignored by Siga-an. (1) Is the payment of
interest valid? Explain. (3%) SUGGESTED
ANSWER: No, Art. 1956, Civil Code,
provides that “no interest shall be due
unless it has been expressly stipulated in
writing.”
(2) Is solution indebiti applicable? Explain.
(2%)
SUGGESTED ANSWER: Yes, Solutio Indebiti
is applicable because Villanueva Overpaid
by P600,000.00 representing interest
payment which is not due. He can,
therefore, demand its return.
406
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Art. 1960. If the borrower pays interest when there
Mutuum; Interests (2002) has been no stipulation therefor, the provisions of
Carlos sues Dino for (a) collection on a promissory note this Code concerning solutio indebiti, or natural
for a loan, with no agreement on interest, on which Dino obligations, shall be applied, as the case may be.
defaulted, and (b) damages caused by Dino on his
(Carlos’) priceless Michaelangelo painting on which Dino
(n)
is liable on the promissory note and awards damages to
Carlos for the damaged painting, with interests for both Art. 1961. Usurious contracts shall be governed by
awards. What rates of interest may the court impose with the Usury Law and other special laws, so far as
respect to both awards? Explain. (5%) they are not inconsistent with this Code. (n)
SUGGESTED ANSWER:
With respect to the collection of money or promissory
note, it being a forbearance of money, the legal rate of
interest for having defaulted on the payment of 12% will SIMPLE LOAN RENT/LEASE
apply. With respect to the damages to the painting, it is Signifies the delivery of One party delivers to
6% from the time of the final demand up to the time of money or same other another some non-
finality of judgment until judgment credit is fully paid. The consumable thing to consumable thing in
court considers the latter as a forbearance of money. another with a promise order that the latter may
(Eastern Shipping Lines, Inc. v. CA, 234 SCRA 78 [1994]; to repay an equivalent use it during a certain
Art 2210 and 2211, CC)
amount of the same period and return it to
Mutuum; Interests (2004) kind and quality the former
The parties in a contract of loan of money agreed that the The lessor does not
yearly interest rate is 12% and it can be increased if there There is transfer of lose ownership. He
is a law that would authorize the increase of interest ownership of the thing simply loses control
rates. Suppose OB, the lender, would increase by 5% the delivered over the property during
rate of interest to be paid by TY, the borrower, without a the period of the
law authorizing such increase, would OB’s action be just contract
and valid? Why? Has TY a remedy against the imposition
The relation between The relation is that of
of the rate increase? Explain. (5%)
SUGGESTED ANSWER:
the parties is that of tenant and landlord
OB's action is not just and valid. The debtor cannot be obligor and obligee
required to pay the increase in interest there being no law The owner of property
authorizing it, as stipulated in the contract. Increasing the receives
rate in the absence of such law violates the principle of The creditor receives “compensation” or price
mutuality of contracts. payment of his loan either in money,
ALTERNATIVE ANSWER: provisions, chattel, or
Even if there was a law authorizing the increase in labor from the occupant
interest rate, the stipulation is still void because there is
thereof in return for its
no corresponding stipulation to decrease the interest due
when the law reduces the rate of interest. use

Art. 1957. Contracts and stipulations, under any

cloak or device whatever, intended to circumvent
the laws against usury shall be void. The borrower MUTUUM COMMODATUM BARTER
may recover in accordance with the laws on usury. Money or other Personal or real Non-fungible
(n) fungible things property or non-
(personal (generally non- consumable
Art. 1958. In the determination of the interest, if it is properties) consumable) things
payable in kind, its value shall be appraised at the Pay or deliver Return the The
current price of the products or goods at the time the same kind identical thing equivalent
and place of payment. (n) and quality borrowed when thing is given
loaned to the the time has in return for
Art. 1959. Without prejudice to the provisions of bailee expired or the what has
Article 2212, interest due and unpaid shall not earn purpose has been
interest. However, the contracting parties may by been served received
stipulation capitalize the interest due and unpaid, May be Always onerous
which as added principal, shall earn new interest. gratuitous gratuitous
(n)

Art. 2212. Interest due shall earn legal interest

from the time it is judicially demanded, although Title XII. - DEPOSIT
the obligation may be silent upon this point.

JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 407

____________________________________________________________________________________________________
CHAPTER 1 and b SUGGESTED ANSWER: (E). letters a
DEPOSIT IN GENERAL AND ITS DIFFERENT and b
KINDS ALTERNATIVE ANSWER:
(D). all the above
Art. 1962. A deposit is constituted from the moment
a person receives a thing belonging to another, with
the obligation of safely keeping it and of returning KINDS OF BAILMENT (with reference to
the same. If the safekeeping of the thing delivered compensation):
is not the principal purpose of the contract, there is
no deposit but some other contract. (1758a) 1. For the sole benefit of the bailor
(gratuitous) e.g. gratuitous deposit,
CHARACTERISTICS: (of deposit) mandatum (do some act with respect to a
1. Real – perfected upon delivery. thing).
2. Unilateral – if gratuitous. 2. For the sole benefit of the bailee
3. Bilateral – if with compensation. (gratuitous) e.g. commodatum, gratuitous
simple loan or mutuum.
3. For the benefit of both parties e.g.
DEPOSIT MUTUUM COMMODATUM deposit for compensation, involuntary
Principal purpose deposit, pledge and bailments for hire.
Safekeeping Consumption Transfer for use
Demandability a. Hire of things – temporary use.
May demand b. Hire of service – work or labor.
return at will c. Hire of carriage of goods – for
(PRECARIUM) carriage.
Demand of the Lender must or only after the d. Hire of custody – for storage
thing at will (if wait until expiration of the
unilateral) expiration of period or
period granted accomplishment Art. 1963. An agreement to constitute a deposit is
to debtor of the use of the binding, but the deposit itself is not perfected until
thing subject to the delivery of the thing. (n)
exceptions
Object Art. 1964. A deposit may be constituted judicially or
Both movable extrajudicially. (1759)
and
immovable. Only money
But in extra- and other Both movable
JUDICIAL DEPOSIT EXTRA-JUDICIAL
judicial fungible thing and immovable
Creation
deposit, only may be object
movable Will of the court Will of the contracting
property parties
(corporeal) Purpose
may be object Security or to ensure
Nature the right of a party to Custody and
the property or to safekeeping
May be May be Essentially and
recover in case of
gratuitous gratuitous always
favorable judgment
gratuitous
BAILMENT Subject matter
Is the delivery of property of one person to another Generally immovables Movables only
in trust for a specific purpose, with a contract, Cause
express or implied, that the trust shall be faithfully Always onerous May be compensated
executed and the property returned or duly but generally gratuitous
accounted for when a special purpose is Return of thing
accomplished or kept until the bailor claims it. Upon order of the Upon demand of
court/end of litigation depositor
2010 Bar Exam In whose behalf it is held
No.IX. Multiple choice: Choose the right Person who has a right Depositor or 3rd person
answer. (2% each) (1). The parties to a designated
bailment are the: (A). bailor; (B). bailee; (C)
comodatario; (D). all the above; (E). letters a

JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 408

____________________________________________________________________________________________________
Art. 1965. A deposit is a gratuitous contract, except
when there is an agreement to the contrary, or
unless the depositary is engaged in the business of
storing goods. (1760a)
GR: Deposit is essentially gratuitous.
Exceptions:
1. There is a contrary stipulation in the
contract.
2. When the depositary is engaged I the
business of storing goods (warehouseman).
3. Where the property is saved without the
knowledge of the owner (other quasi-
contract – art. 2168, NCC).
Art. 1966. Only movable things may be the object of
a deposit. (1761)
Art. 1967. An extrajudicial deposit is either voluntary
or necessary. (1762)
CHAPTER 2
VOLUNTARY DEPOSIT
SECTION 1. - General Provisions
Art. 1968. A voluntary deposit is that wherein the
delivery is made by the will of the depositor. A
deposit may also be made by two or more persons
each of whom believes himself entitled to the thing
deposited with a third person, who shall deliver it in
a proper case to the one to whom it belongs. (1763)
Art. 1969. A contract of deposit may be entered into
orally or in writing. (n)
Art. 1970. If a person having capacity to contract
accepts a deposit made by one who is
incapacitated, the former shall be subject to all the
obligations of a depositary, and may be compelled
to return the thing by the guardian, or administrator,
of the person who made the deposit, or by the latter
himself if he should acquire capacity. (1764)
Art. 1971. If the deposit has been made by a
capacitated person with another who is not, the
depositor shall only have an action to recover the
thing deposited while it is still in the possession of
the depositary, or to compel the latter to pay him
the amount by which he may have enriched or
benefited himself with the thing or its price.
However, if a third person who acquired the thing
acted in bad faith, the depositor may bring an action
against him for its recovery. (1765a)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
SECTION 2. - Obligations of the Depositary
Art. 1972. The depositary is obliged to keep the
thing safely and to return it, when required, to the
depositor, or to his heirs and successors, or to the
person who may have been designated in the
contract. His responsibility, with regard to the
safekeeping and the loss of the thing, shall be
governed by the provisions of Title I of this Book.
If the deposit is gratuitous, this fact shall be taken
into account in determining the degree of care that
the depositary must observe. (1766a)
Art. 1973. Unless there is a stipulation to the
contrary, the depositary cannot deposit the thing
with a third person. If deposit with a third person is
allowed, the depositary is liable for the loss if he
deposited the thing with a person who is manifestly
careless or unfit. The depositary is responsible for
the negligence of his employees. (n)
Art. 1974. The depositary may change the way of
the deposit if under the circumstances he may
reasonably presume that the depositor would
consent to the change if he knew of the facts of the
situation. However, before the depositary may
make such change, he shall notify the depositor
thereof and wait for his decision, unless delay
would cause danger. (n)
Art. 1975. The depositary holding certificates,
bonds, securities or instruments which earn interest
shall be bound to collect the latter when it becomes
due, and to take such steps as may be necessary in
order that the securities may preserve their value
and the rights corresponding to them according to
law.
The above provision shall not apply to contracts for
the rent of safety deposit boxes. (n)
Art. 1976. Unless there is a stipulation to the
contrary, the depositary may commingle grain or
other articles of the same kind and quality, in which
case the various depositors shall own or have a
proportionate interest in the mass. (n)
Note: Compare with art. 1904, NCC.
Art. 1977. The depositary cannot make use of the
thing deposited without the express permission of
the depositor.
Otherwise, he shall be liable for damages.
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____________________________________________________________________________________________________
However, when the preservation of the thing
deposited requires its use, it must be used but only
for that purpose. (1767a)
Art. 1978. When the depositary has permission to
use the thing deposited, the contract loses the
concept of a deposit and becomes a loan or
commodatum, except where safekeeping is still the
principal purpose of the contract.
The permission shall not be presumed, and its
existence must be proved. (1768a)
Art. 1979. The depositary is liable for the loss of the
thing through a fortuitous event:
(1) If it is so stipulated;
(2) If he uses the thing without the
depositor's permission;
(3) If he delays its return;
(4) If he allows others to use it, even though
he himself may have been authorized to
use the same. (n)
Art. 1980. Fixed, savings, and current deposits of
money in banks and similar institutions shall be
governed by the provisions concerning simple loan.
(n)
NATURE:
1. Contract of loan – deposits in banks are
really loans because the bank can use the
same for its ordinary transactions.
2. Relation of creditor and debtor – the
relation between a depositor and a bank is
that of a creditor and a debtor.
Art. 1981. When the thing deposited is delivered
closed and sealed, the depositary must return it in
the same condition, and he shall be liable for
damages should the seal or lock be broken through
his fault.
Fault on the part of the depositary is presumed,
unless there is proof to the contrary.
As regards the value of the thing deposited, the
statement of the depositor shall be accepted, when
the forcible opening is imputable to the depositary,
should there be no proof to the contrary. However,
the courts may pass upon the credibility of the
depositor with respect to the value claimed by him.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
When the seal or lock is broken, with or without the
depositary's fault, he shall keep the secret of the
deposit. (1769a)
Art. 1982. When it becomes necessary to open a
locked box or receptacle, the depositary is
presumed authorized to do so, if the key has been
delivered to him; or when the instructions of the
depositor as regards the deposit cannot be
executed without opening the box or receptacle. (n)
Art. 1983. The thing deposited shall be returned
with all its products, accessories and accessions.
Should the deposit consist of money, the provisions
relative to agents in article 1896 shall be applied to
the depositary. (1770)
Art. 1984. The depositary cannot demand that the
depositor prove his ownership of the thing
deposited.
Nevertheless, should he discover that the thing has
been stolen and who its true owner is, he must
advise the latter of the deposit.
If the owner, in spite of such information, does not
claim it within the period of one month, the
depositary shall be relieved of all responsibility by
returning the thing deposited to the depositor.
If the depositary has reasonable grounds to believe
that the thing has not been lawfully acquired by the
depositor, the former may return the same. (1771a)
Art. 1985. When there are two or more depositors, if
they are not solidary, and the thing admits of
division, each one cannot demand more than his
share.
When there is solidarity or the thing does not admit
of division, the provisions of Articles 1212 and 1214
shall govern. However, if there is a stipulation that
the thing should be returned to one of the
depositors, the depositary shall return it only to the
person designated. (1772a)
Art. 1986. If the depositor should lose his capacity
to contract after having made the deposit, the thing
cannot be returned except to the persons who may
have the administration of his property and rights.
(1773)
TO WHOM RETURN MUST BE MADE:
a. The depositary is obliged to return the thing
deposited, when required to –
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____________________________________________________________________________________________________
1. The depositor
2. To his heirs or successors in
interest
3. Or to the person designated in the
contract.
b. If the depositor was incapacitated at the
time of the deposit, the property must be
returned to –
1. His guardian or administrator
2. To the person who made the
deposit
3. Or to the depositor himself should
he acquire capacity.
c. If the depositor was capacitated at the time
of delivery but he subsequently loses his
capacity, the thing must be returned to his
legal representative.
Art. 1987. If at the time the deposit was made a
place was designated for the return of the thing, the
depositary must take the thing deposited to such
place; but the expenses for transportation shall be
borne by the depositor.
If no place has been designated for the return, it
shall be made where the thing deposited may be,
even if it should not be the same place where the
deposit was made, provided that there was no
malice on the part of the depositary. (1774)
Art. 1988. The thing deposited must be returned to
the depositor upon demand, even though a
specified period or time for such return may have
been fixed.
This provision shall not apply when the thing is
judicially attached while in the depositary's
possession, or should he have been notified of the
opposition of a third person to the return or the
removal of the thing deposited. In these cases, the
depositary must immediately inform the depositor of
the attachment or opposition. (1775)
Art. 1989. Unless the deposit is for a valuable
consideration, the depositary who may have
justifiable reasons for not keeping the thing
deposited may, even before the time designated,
return it to the depositor; and if the latter should
refuse to receive it, the depositary may secure its
consignation from the court. (1776a)
NOTE: In this case, it is the depositary who is
returning the deposit with or without the demand of
the depositor.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
GR: The depositary may return the thing deposited
notwithstanding that a period has been fixed ir the
deposit is gratuitous and there is justifiable reason.
Exception: If the deposit is for a valuable
consideration (compensation), the depositary
cannot return the thing even if he should suffer
inconvenience as a consequence.
Art. 1990. If the depositary by force majeure or
government order loses the thing and receives
money or another thing in its place, he shall deliver
the sum or other thing to the depositor. (1777a)
Art. 1991. The depositor's heir who in good faith
may have sold the thing which he did not know was
deposited, shall only be bound to return the price he
may have received or to assign his right of action
against the buyer in case the price has not been
paid him. (1778)
NOTE: The heir who is in good faith need not pay
the actual price of the thing deposited. But if he is in
bad faith, the actual price of the thing deposited
may be recovered plus damages.
SECTION 3. - Obligations of the Depositor
Art. 1992. If the deposit is gratuitous, the depositor
is obliged to reimburse the depositary for the
expenses he may have incurred for the
preservation of the thing deposited. (1779a)
Art. 1993. The depositor shall reimburse the
depositary for any loss arising from the character of
the thing deposited, unless at the time of the
constitution of the deposit the former was not aware
of, or was not expected to know the dangerous
character of the thing, or unless he notified the
depositary of the same, or the latter was aware of it
without advice from the depositor. (n)
Art. 1994. The depositary may retain the thing in
pledge until the full payment of what may be due
him by reason of the deposit. (1780)
Art. 1995. A deposit its extinguished:
(1) Upon the loss or destruction of the thing
deposited;
(2) In case of a gratuitous deposit, upon the
death of either the depositor or the
depositary. (n)
NOTE: Other causes for extinguishment of
obligations (like novation, performance,
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____________________________________________________________________________________________________
merger/confusion, etc.) may also extinguish
contract of deposit, when properly applicable.
CHAPTER 3
NECESSARY DEPOSIT
Art. 1996. A deposit is necessary:
(1) When it is made in compliance with a
legal obligation;
(2) When it takes place on the occasion of
any calamity, such as fire, storm, flood,
pillage, shipwreck, or other similar events.
(1781a)
Art. 1997. The deposit referred to in No. 1 of the
preceding article shall be governed by the
provisions of the law establishing it, and in case of
its deficiency, by the rules on voluntary deposit.
The deposit mentioned in No. 2 of the preceding
article shall be regulated by the provisions
concerning voluntary deposit and by Article 2168.
(1782)
2010 Bar Exam
(2). A deposit made in compliance with a legal
obligation is: (A). an extrajudicial deposit; (B).
a voluntary deposit; (C). a necessary deposit;
(D). a deposit with a warehouseman; (E).
letters a and b SUGGESTED ANSWER: (C). a
necessary deposit
Art. 2168. When during a fire, flood, storm, or other
calamity, property is saved from destruction by
another person without the knowledge of the owner,
the latter is bound to pay the former just
compensation.
Art. 1998. The deposit of effects made by the
travellers in hotels or inns shall also be regarded as
necessary. The keepers of hotels or inns shall be
responsible for them as depositaries, provided that
notice was given to them, or to their employees, of
the effects brought by the guests and that, on the
part of the latter, they take the precautions which
said hotel-keepers or their substitutes advised
relative to the care and vigilance of their effects.
(1783)
Art. 1999. The hotel-keeper is liable for the
vehicles, animals and articles which have been
introduced or placed in the annexes of the hotel.
(n)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 2000. The responsibility referred to in the two
preceding articles shall include the loss of, or injury
to the personal property of the guests caused by
the servants or employees of the keepers of hotels
or inns as well as strangers; but not that which may
proceed from any force majeure. The fact that
travelers are constrained to rely on the vigilance of
the keeper of the hotels or inns shall be considered
in determining the degree of care required of him.
(1784a)
Art. 2001. The act of a thief or robber, who has
entered the hotel is not deemed force majeure,
unless it is done with the use of arms or through an
irresistible force. (n)
Art. 2002. The hotel-keeper is not liable for
compensation if the loss is due to the acts of the
guest, his family, servants or visitors, or if the loss
arises from the character of the things brought into
the hotel. (n)
Art. 2003. The hotel-keeper cannot free himself
from responsibility by posting notices to the effect
that he is not liable for the articles brought by the
guest. Any stipulation between the hotel-keeper and
the guest whereby the responsibility of the former
as set forth in articles 1998 to 2001 is suppressed
or diminished shall be void. (n)
Art. 2004. The hotel-keeper has a right to retain the
things brought into the hotel by the guest, as a
security for credits on account of lodging, and
supplies usually furnished to hotel guests. (n)
CHAPTER 4
SEQUESTRATION OR JUDICIAL DEPOSIT
Art. 2005. A judicial deposit or sequestration takes
place when an attachment or seizure of property in
litigation is ordered. (1785)
NATURE: Auxiliary to a case pending in court.
PURPOSE: To maintain the status quo during the
pendency of the litigation or to insure the right of
the parties to the property in case of a favorable
judgment.
Art. 2006. Movable as well as immovable property
may be the object of sequestration. (1786)
Art. 2007. The depositary of property or objects
sequestrated cannot be relieved of his responsibility
until the controversy which gave rise thereto has
come to an end, unless the court so orders. (1787a)
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Art. 2008. The depositary of property sequestrated undertakes directly for
is bound to comply, with respect to the same, with the payment without
all the obligations of a good father of a family. Secondarily liable – he reference to the
(1788) contracts to pay if, by solvency of the
the use of due principal, and is so
Art. 2009. As to matters not provided for in this diligence, the debt responsible at once the
Code, judicial sequestration shall be governed by cannot be paid latter makes a default,
the Rules of Court. (1789) without any demand by
the creditor upon the
NOTE: OPTIONAL – WAREHOUSE RECEIPTS principal whatsoever or
LAW may be inserted in this area. any notice of default
Only binds himself to Undertakes to pay if the
NOTE: Arts. 2010 – 2056 are transferred and pay if the principal principal do not pay,
placed after the topic on agency. cannot or unable to pay without regard to his
ability to do so
Insurer of the solvency Insurer of the debt
of the debtor
Title XV. - GUARANTY Less onerous More onerous

CHAPTER 1
NATURE AND EXTENT OF GUARANTY Surety (2010) No.III. Define, Enumerate or
Explain. (2% each) (A). What is the difference
Art. 2047. By guaranty a person, called the between "guaranty" and "suretyship"?
guarantor, binds himself to the creditor to fulfill the SUGGESTED ANSWER: Guaranty and
obligation of the principal debtor in case the latter Suretyship distinguished (1)The obligation
should fail to do so. in guaranty is secondary; whereas, in
suretyship, it is primary. (2) In guranty, the
If a person binds himself solidarily with the principal undertaking is to pay if the principal debtor
debtor, the provisions of Section 4, Chapter 3, Title cannot pay; whereas, in suretyship, the
I of this Book shall be observed. In such case the undertaking is to pay if the principal debtor
contract is called a suretyship. (1822a) does not pay . (3) In guranty, the guarantor
is entitled to the benefit of excussion;
CHARACTERISTICS OF CONTRACT: (in whereas, in suretyship the surety is not
general) entitled. (4) Liability in guaranty depends
1. Accessory – dependent for its existence upon an independent agreement to pay the
upon the principal obligation guaranteed by obligations of the principal if he fails to do
it. so; whereas, in suretyship, the surety
2. Subsidiary and conditional – takes effect assumes liability as a regular party.
only when the principal debtor fails in his (5)The Guarantor insures the solvency of
obligation. the principal debtor; whereas, the surety
3. Unilateral – in gives rise only to a duty on insures the debt. (6)In a guaranty, the
the part of the guarantor in relation to the guarantor is subsidiarlty liable; whereas, in
creditor and not vice-versa. It may also be a suretyship, the surety binds himself
entered without the intervention of the solidarity with the principal debtor (Art
principal debtor, 2047, Civil Code).
4. Guarantor must be a person distinct
from the debtor – a person cannot be the
personal guarantor of himself.
GUARANTY WARRANTY
An undertaking that the
GUARANTY SURETYSHIP title, quality, or quantity
Liability depends upon Assumes liability as a Contract by which a of the subject matter of
an independent regular party to the person is bound to a contract is what it has
agreement to pay the undertaking another for the been represented to be,
obligation if the primary fulfillment of a promise and relates to some
debtor fails to do so or engagement of a agreement made
Engagement is a Charged as an original third party ordinarily by the party
collateral undertaking promisor who makes the
Primarily liable – warranty
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 413
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SURETYSHIP
A relation which exists where one person (principal)
has undertaken an obligation and another person
(surety) is also under a direct and primary obligation
or other duty to the obligee, who is entitled to but
one performance, and as between the two who are
bound, the second, rather than the first should
perform.
NATURE OF SURETY UNDERTAKING:
1. Liability is contractual and accessory but
direct;
2. Liability is limited by the terms of the
contract;
3. Liability arises only if the principal debtor is
held liable –
a. In the absence of collusion, the
surety is bound by a judgment
against the principal though he was
not a party to the proceedings;
b. The creditor may sue, separately or
together, the principal debtor and the
surety;
c. A demand or notice of default is not
necessary to fix the surety’s liability
except when required by the
provisions of the contract;
d. A surety bond is void where there is
no principal debtor because such an
undertaking presupposes that the
obligation is to be enforceable
against someone else besides the
surety, and the latter can always
claim that it was never his intention to
be the sole person obligated thereby.
e. Surety is not entitled to excussion.
4. Undertaking is to creditor, not to debtor –
the surety makes no covenant or
agreement with the principal that it will fulfill
the obligation guaranteed for the benefit of
the principal. The surety’s undertaking is
that the principal shall fulfill his obligation
and that the surety shall be relieved of
liability when the obligation secured is
fulfilled.
NOTE: Surety is not entitled to notice of
principal’s default.
5. Prior demand by the creditor upon principal
is not required.
6. Surety is not exonerated by neglect of the
creditor to sue principal.
NOTE: “Strictissimi Juris Rule” applies only to an
ACCOMMODATION SURETY.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Reason: An accommodation surety acts
without motive of pecuniary gain and hence,
should be protected against unjust pecuniary
impoverishment by imposing on the principal,
duties akin to those of a fiduciary.
This rule will apply only after it has been
definitely ascertained that the contract is one of
suretyship or guaranty.
Strictissimi juris rule is not applicable to
compensated sureties.
Reasons:
1. Compensated corporate sureties are
business association organized for the
purpose of assuming classified risks in
large numbers, for profit and on an
impersonal basis.
2. They are secured from all possible loss by
adequate counter-bonds or indemnity
agreements.
3. Such corporations are in fact insurers and
in determining their rights and liabilities, the
rules peculiar to suretyship do not apply.
Art. 2048. A guaranty is gratuitous, unless there is a
stipulation to the contrary. (n)
NOTE: The cause of a contract of guaranty is the
same cause which supports the obligation as to the
principal debtor. Absence of direct consideration or
benefit to the guarantor is immaterial.
Art. 2049. A married woman may guarantee an
obligation without the husband's consent, but shall
not thereby bind the conjugal partnership, except in
cases provided by law. (n)
GR: Married woman binds only her separate
property.
Exceptions:
1. When with her husband’s consent, the
absolute community or conjugal partnership
property is bound.
2. Without the husband’s consent but such
guaranty has (directly) redounded to the
benefit of the family.
Art. 2050. If a guaranty is entered into without the
knowledge or consent, or against the will of the
principal debtor, the provisions of Articles 1236 and
1237 shall apply. (n)
Art. 1236. The creditor is not bound to accept
payment or performance by a third person who has
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no interest in the fulfillment of the obligation, unless
there is a stipulation to the contrary.
Whoever pays for another may demand from the
debtor what he has paid, except that if he paid
without the knowledge or against the will of the
debtor, he can recover only insofar as the payment
has been beneficial to the debtor.
Art. 1237. Whoever pays on behalf of the debtor
without the knowledge or against the will of the latter,
cannot compel the creditor to subrogate him in his
rights, such as those arising from a mortgage,
guaranty, or penalty.
Art. 2051. A guaranty may be conventional, legal or
judicial, gratuitous, or by onerous title.
It may also be constituted, not only in favor of the
principal debtor, but also in favor of the other
guarantor, with the latter's consent, or without his
knowledge, or even over his objection. (1823)
Art. 2052. A guaranty cannot exist without a valid
obligation.
Nevertheless, a guaranty may be constituted to
guarantee the performance of a voidable or an
unenforceable contract. It may also guarantee a
natural obligation. (1824a)
Art. 2053. A guaranty may also be given as security
for future debts, the amount of which is not yet
known; there can be no claim against the guarantor
until the debt is liquidated. A conditional obligation
may also be secured. (1825a)
Art. 2054. A guarantor may bind himself for less,
but not for more than the principal debtor, both as
regards the amount and the onerous nature of the
conditions.
Should he have bound himself for more, his
obligations shall be reduced to the limits of that of
the debtor. (1826)
EXCEPTIONS: (of art. 2054)
1. Interest, judicial costs, and attorney’s
fees as part of damages may be recovered.
Reason: Surety (guarantor) is made to
pay, not by reason of the contract, but by
reason of his failure to pay when demanded
and for having compelled the creditor to
resort to the courts to obtain reliefs.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
2. For a penalty – if a penalty clause is
provided in the contract.
NOTE: The principal’s liability may exceed
guarantor’s obligations. The amount specified in a
surety bond as the surety’s obligation does not limit
the extent of the damages that may be recovered
from the principal; the latter’s liability being
governed by the obligations he assumed under his
contract.
Recovery of Deficiency (1997)
AB sold to CD a motor vehicle for and in consideration of
P120,000.00 to be paid in twelve monthly equal
installments of P10,000,00, each installment being due
and payable on the 15th day of each month starting
January 1997.
To secure the promissory note, CD (a) executed a chattel
mortgage on the subject motor vehicle, and (b) furnished
a surety bond issued by Philam life, CD failed to pay
more than two (2) installments, AB went after the surety
but he was only able to obtain three-fourths (3/4) of the
total amount still due and owing from CD. AB seeks your
advice on how he might, if at all, recover the deficiency.
How would you counsel AB?
SUGGESTED ANSWER:
Yes, he can recover the deficiency. The action of AB to
go after the surety bond cannot be taken to mean a
waiver of his right to demand payment for the whole debt,
The amount received from the surety is only payment pro
tanto, and an action may be maintained for a deficiency
debt.
Art. 2055. A guaranty is not presumed; it must be
express and cannot extend to more than what is
stipulated therein.
If it be simple or indefinite, it shall comprise not only
the principal obligation, but also all its accessories,
including the judicial costs, provided with respect to
the latter, that the guarantor shall only be liable for
those costs incurred after he has been judicially
required to pay. (1827a)
NOTE: Guaranty requires the expression of
consent on the part of the guarantor to be bound. It
cannot be presumed because of the existence of a
contract or principal obligation.
Reasons:
1. There be assurance that the guarantor had
the true intention to bind himself.
2. To make certain that on making it, the
guarantor proceeded with consciousness of
what he was doing.
GUARANTY IS COVERED BY THE STATUTE OF
FRAUDS
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Guaranty must not only be expressed but must also
be reduced into WRITING. Hence, it shall be
unenforceable by action, unless the same or some
note or memorandum thereof be in writing, and
subscribed by the party charged, or by his agent;
evidence, therefore, of the agreement cannot be
received without the writing, or a secondary
evidence of its contents. BUT it need not appear in
a public instrument.
GUARANTY IS STRICTLY CONSTRUED
Strictly construed against the creditor in favor of the
guarantor and is not extended beyond its terms or
specified limits. If there is any doubt on the terms
and conditions of the guaranty or surety
agreements, doubts should be resolved in favor of
the gurantor or surety.
Art. 2056. One who is obliged to furnish a guarantor
shall present a person who possesses integrity,
capacity to bind himself, and sufficient property to
answer for the obligation which he guarantees. The
guarantor shall be subject to the jurisdiction of the
court of the place where this obligation is to be
complied with. (1828a)
Art. 2057. If the guarantor should be convicted in
first instance of a crime involving dishonesty or
should become insolvent, the creditor may demand
another who has all the qualifications required in
the preceding article. The case is excepted where
the creditor has required and stipulated that a
specified person should be the guarantor. (1829a)
SELECTION OF GUARANTOR:
1. Specified person stipulated as guarantor
– substitution of the guarantor may not be
demanded.
Reason: the selection of the guarantor is a
term of the agreement and, therefore, both
parties are bound thereby. It may be
changed if all parties consent (agree)
because it already constitutes a novation of
the contract.
2. Guarantor is selected by the principal
debtor – debtor answers for the integrity,
capacity, and solvency of the guarantor.
3. Guarantor is personally designated by
the creditor – responsibility of the selection
should fall upon the creditor because he
considered the guarantor to have the
qualifications for the purpose.
CHAPTER 2
EFFECTS OF GUARANTY
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
SECTION 1. - Effects of Guaranty
Between the Guarantor and the Creditor
Art. 2058. The guarantor cannot be compelled to
pay the creditor unless the latter has exhausted all
the property of the debtor, and has resorted to all
the legal remedies against the debtor. (1830a)
REASONS:
1. Guarantor is only secondarily liable.
2. All the legal remedies against the debtor to
be first exhausted.
Right of the creditor to secure judgment against
guarantor prior to exhaustion
GR: An ordinary personal guarantor (not a pledgor
or mortgagor), may demand exhaustion of all the
property of the debtor before he can be compelled
to pay.
HOWEVER: The creditor may, prior thereto, secure
a judgment against the guarantor, who shall be
entitled, however, to a deferment of the execution of
said judgment against him, until after the properties
of the principal debtor shall have been exhausted,
to satisfy the latter’s obligation.
2013 Exam MCQ (October 13, 2013)
III. Amador obtained a loan of P300,000 from
Basilio payable on March25, 2012. As security
for the payment of his loan, Amador
constituted a mortgage on his residential
house and lot in Basilio's favor. Cacho, a good
friend of Amador, guaranteed and obligated
himself to pay Basilio, in case Amador fails to
pay his loan at maturity.
III. (1) If Amador fails to pay Basilio his loan on
March 25, 2012, can Basilio compel Cacho to
pay? (1%) (A) No, Basilio cannot compel Cacho
to pay because as guarantor, Cacho can
invoke the principle of excussion, i.e., all the
assets of Basilio must first be exhausted. (B)
No, Basilio cannot compel Cacho to pay
because Basilio has not exhausted the
available remedies against Amador.
(C) Yes, Basilio can compel Cacho to pay
because the nature of Cacho's undertaking
indicates that he has bound himself solidarily
with Amador. (D) Yes, Basilio can compel
Cacho who bound himself to unconditionally
pay in case Amador fails to pay; thus the
benefit of excussion will not apply.
SUGGESTED ANSWER: (B) No, Basilio
cannot compel Cacho to pay because
Basilio has not exhausted the available
remedies against Amador. The guarantor
cannot be compelled to pay the creditor
unless the latter has exhausted all the
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property of the debtor and has resorted to
all the legal remedies against the debtor
(Art. 2058, Civil Code) (Note: “A” is not the
correct answer because it states that “all
the assets of Basilio (the creditor) must
first be exhausted”)
III. (2) If Amador sells his residential house
and lot to Diego, can Basilio foreclose the real
estate mortgage? (1%) (A) Yes, Basilio can
foreclose the real estate mortgage because real
estate mortgage creates a real right that
attaches to the property. (B) Yes, Basilio can
foreclose the real estate mortgage. It is
binding upon Diego as the mortgage is
embodied in a public instrument. (C) No,
Basilio cannot foreclose the real estate
mortgage. The sale confers ownership on
the buyer, Diego, who must therefore
consent.
(D) No, Basilio cannot foreclose the real estate
mortgage. To deprive the new owner of
ownership and possession is unjust and
inequitable. SUGGESTED ANSWER: (B) Yes,
Basilio can foreclose the real estate
mortgage. It is binding upon Diego as the
mortgage is embodied in a public
instrument. Since the mortgage is in a
public instrument, there is constructive
notice to Diego, who is the buyer if the
mortgaged property. ALTERNATIVE
ANSWER:
(C) No, Basilio cannot foreclose the real
estate mortgage. The sale confers
ownership on the buyer, Diego, who must
therefore consent. The mortgage is not
registered, thus, cannot be binding against
third persons (Art. 2125, Civil Code)
Art. 2059. The excussion shall not take place:
(1) If the guarantor has expressly
renounced it;
(2) If he has bound himself solidarily with
the debtor;
(3) In case of insolvency of the debtor;
(4) When he has absconded, or cannot be
sued within the Philippines unless he has
left a manager or representative;
(5) If it may be presumed that an execution
on the property of the principal debtor
would not result in the satisfaction of the
obligation. (1831a)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
EXCEPTIONS TO THE BENEFIT OF
EXCUSSION:
1. As provided in art. 2059;
2. Failure to comply with art. 2060;
3. If he is a judicial bondsman and sub-surety
(art. 2084);
4. Where a pledge or mortgage has been
given by him as a special security;
5. If he fails to interpose it as a defense before
judgment is rendered against him (amounts
to a waiver).
Art. 2060. In order that the guarantor may make use
of the benefit of excussion, he must set it up against
the creditor upon the latter's demand for payment
from him, and point out to the creditor available
property of the debtor within Philippine territory,
sufficient to cover the amount of the debt. (1832)
DUTY OF CREDITOR TO MAKE PRIOR DEMAND
FOR PAYMENT FROM GUARANTOR
1. When demand is to be made – only after
judgment of the debt for obviously the
exhaustion of the principal’s property
cannot even begin to take place before
judgment has been obtained.
2. Actual demand is to be made – joining
the guarantor in a suit against the principal
debtor is not the demand intended by law.
Art. 2061. The guarantor having fulfilled all the
conditions required in the preceding article, the
creditor who is negligent in exhausting the property
pointed out shall suffer the loss, to the extent of
said property, for the insolvency of the debtor
resulting from such negligence. (1833a)
Art. 2062. In every action by the creditor, which
must be against the principal debtor alone, except
in the cases mentioned in Article 2059, the former
shall ask the court to notify the guarantor of the
action. The guarantor may appear so that he may, if
he so desire, set up such defenses as are granted
him by law. The benefit of excussion mentioned in
Article 2058 shall always be unimpaired, even if
judgment should be rendered against the principal
debtor and the guarantor in case of appearance by
the latter. (1834a)
JOINDER OF GUARANTOR AND PRINCIPAL AS
PARTIES DEFENDANT
GR: the guarantor, not being a joint contractor with
his principal, cannot be sued with his principal.
Exception: where it would serve merely to delay
the ultimate accounting of the guarantor or if no
different result would be attained if the plaintiff were
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forced to institute separate actions against the
principal and the guarantors.
Art. 2063. A compromise between the creditor and
the principal debtor benefits the guarantor but does
not prejudice him. That which is entered into
between the guarantor and the creditor benefits but
does not prejudice the principal debtor. (1835a)
Art. 2064. The guarantor of a guarantor shall enjoy
the benefit of excussion, both with respect to the
guarantor and to the principal debtor. (1836)
Art. 2065. Should there be several guarantors of
only one debtor and for the same debt, the
obligation to answer for the same is divided among
all. The creditor cannot claim from the guarantors
except the shares which they are respectively
bound to pay, unless solidarity has been expressly
stipulated.
The benefit of division against the co-guarantors
ceases in the same cases and for the same
reasons as the benefit of excussion against the
principal debtor. (1837)
SECTION 2. - Effects of Guaranty
Between the Debtor and the Guarantor
Art. 2066. The guarantor who pays for a debtor
must be indemnified by the latter.
The indemnity comprises:
(1) The total amount of the debt;
(2) The legal interests thereon from the
time the payment was made known to the
debtor, even though it did not earn interest
for the creditor;
(3) The expenses incurred by the guarantor
after having notified the debtor that
payment had been demanded of him;
(4) Damages, if they are due. (1838a)
Art. 2067. The guarantor who pays is subrogated by
virtue thereof to all the rights which the creditor had
against the debtor.
If the guarantor has compromised with the creditor,
he cannot demand of the debtor more than what he
has really paid. (1839)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 2068. If the guarantor should pay without
notifying the debtor, the latter may enforce against
him all the defenses which he could have set up
against the creditor at the time the payment was
made. (1840)
Art. 2069. If the debt was for a period and the
guarantor paid it before it became due, he cannot
demand reimbursement of the debtor until the
expiration of the period unless the payment has
been ratified by the debtor. (1841a)
Art. 2070. If the guarantor has paid without notifying
the debtor, and the latter not being aware of the
payment, repeats the payment, the former has no
remedy whatever against the debtor, but only
against the creditor. Nevertheless, in case of a
gratuitous guaranty, if the guarantor was prevented
by a fortuitous event from advising the debtor of the
payment, and the creditor becomes insolvent, the
debtor shall reimburse the guarantor for the amount
paid. (1842a)
Art. 2071. The guarantor, even before having paid,
may proceed against the principal debtor:
(1) When he is sued for the payment;
(2) In case of insolvency of the principal
debtor;
(3) When the debtor has bound himself to
relieve him from the guaranty within a
specified period, and this period has
expired;
(4) When the debt has become
demandable, by reason of the expiration of
the period for payment;
(5) After the lapse of ten years, when the
principal obligation has no fixed period for
its maturity, unless it be of such nature that
it cannot be extinguished except within a
period longer than ten years;
(6) If there are reasonable grounds to fear
that the principal debtor intends to abscond;
(7) If the principal debtor is in imminent
danger of becoming insolvent.
In all these cases, the action of the guarantor is to
obtain release from the guaranty, or to demand a
security that shall protect him from any proceedings
by the creditor and from the danger of insolvency of
the debtor. (1834a)
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Art. 2072. If one, at the request of another,
becomes a guarantor for the debt of a third person
who is not present, the guarantor who satisfies the
debt may sue either the person so requesting or the
debtor for reimbursement. (n)
SECTION 3. - Effects of Guaranty as Between
Co-Guarantors
Art. 2073. When there are two or more guarantors
of the same debtor and for the same debt, the one
among them who has paid may demand of each of
the others the share which is proportionally owing
from him.
If any of the guarantors should be insolvent, his
share shall be borne by the others, including the
payer, in the same proportion.
The provisions of this article shall not be applicable,
unless the payment has been made by virtue of a
judicial demand or unless the principal debtor is
insolvent. (1844a)
Art. 2074. In the case of the preceding article, the
co-guarantors may set up against the one who paid,
the same defenses which would have pertained to
the principal debtor against the creditor, and which
are not purely personal to the debtor. (1845)
Art. 2075. A sub-guarantor, in case of the
insolvency of the guarantor for whom he bound
himself, is responsible to the co-guarantors in the
same terms as the guarantor. (1846)
CHAPTER 3
EXTINGUISHMENT OF GUARANTY
Art. 2076. The obligation of the guarantor is
extinguished at the same time as that of the debtor,
and for the same causes as all other obligations.
(1847)
Art. 2077. If the creditor voluntarily accepts
immovable or other property in payment of the debt,
even if he should afterwards lose the same through
eviction, the guarantor is released. (1849)
Art. 2078. A release made by the creditor in favor of
one of the guarantors, without the consent of the
others, benefits all to the extent of the share of the
guarantor to whom it has been granted. (1850)
Art. 2079. An extension granted to the debtor by the
creditor without the consent of the guarantor
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
extinguishes the guaranty. The mere failure on the
part of the creditor to demand payment after the
debt has become due does not of itself constitute
any extension of time referred to herein. (1851a)
Art. 2080. The guarantors, even though they be
solidary, are released from their obligation
whenever by some act of the creditor they cannot
be subrogated to the rights, mortgages, and
preference of the latter. (1852)
Art. 2081. The guarantor may set up against the
creditor all the defenses which pertain to the
principal debtor and are inherent in the debt; but not
those that are personal to the debtor. (1853)
CHAPTER 4
LEGAL AND JUDICIAL BONDS
Art. 2082. The bondsman who is to be offered in
virtue of a provision of law or of a judicial order shall
have the qualifications prescribed in Article 2056
and in special laws. (1854a)
Art. 2056. One who is obliged to furnish a
guarantor shall present a person who possesses
integrity, capacity to bind himself, and sufficient
property to answer for the obligation which he
guarantees. The guarantor shall be subject to
the jurisdiction of the court of the place where
this obligation is to be complied with.
Art. 2083. If the person bound to give a bond in the
cases of the preceding article, should not be able to
do so, a pledge or mortgage considered sufficient to
cover his obligation shall be admitted in lieu thereof.
(1855)
Art. 2084. A judicial bondsman cannot demand the
exhaustion of the property of the principal debtor.
A sub-surety in the same case, cannot demand the
exhaustion of the property of the debtor of the
surety.
Title XVI. - PLEDGE, MORTGAGE AND
ANTICHRESIS
CHAPTER 1
PROVISIONS COMMON TO PLEDGE AND
MORTGAGE
Chattel Mortgage vs. Pledge (1999)
Distinguish a contract of chattel mortgage from a contract
of pledge. (2%)
SUGGESTED ANSWER:
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In a contract of CHATTEL MORTGAGE possession
belongs to the creditor, while in a contract of PLEDGE
possession belongs to the debtor.
A chattel mortgage is a formal contract while a pledge is
a real contract.
A contract of chattel mortgage must be recorded in a
public instrument to bind third persons while a contract of
pledge must be in a public instrument containing
description of the thing pledged and the date thereof to
bind third persons.
Art. 2085. The following requisites are essential to
the contracts of pledge and mortgage:
(1) That they be constituted to secure the
fulfillment of a principal obligation;
(2) That the pledgor or mortgagor be the
absolute owner of the thing pledged or
mortgaged;
(3) That the persons constituting the pledge
or mortgage have the free disposal of their
property, and in the absence thereof, that
they be legally authorized for the purpose.
Third persons who are not parties to the principal
obligation may secure the latter by pledging or
mortgaging their own property. (1857)
Chattel Mortgage; Immovables (1994)
Vini constructed a building on a parcel of land he leased
from Andrea. He chattel mortgaged the land to Felicia.
When he could not pay Felicia. Felicia initiated
foreclosure proceedings. Vini claimed that the building he
had constructed on the leased land cannot be validly
foreclosed because the building was, by law, an
immovable. Is Vini correct?
SUGGESTED ANSWERS:
a) The Chattel Mortgage is void and cannot be foreclosed
because the building is an immovable and cannot be an
object of a chattel mortgage.
b) It depends. If the building was intended and is built of
light materials, the chattel mortgage may be considered
as valid as between the parties and it may be considered
in respect to them as movable property, since it can be
removed from one place to another. But if the building is
of strong material and is not capable of being removed or
transferred without being destroyed, the chattel mortgage
is void and cannot be foreclosed.
c) If it was the land which Vini chattel mortgaged, such
mortgage would be void, or at least unenforceable, since
he was not the owner of the land.
If what was mortgaged as a chattel is the building, the
chattel mortgage is valid as between the parties only, on
grounds of estoppel which would preclude the mortgagor
from assailing the contract on the ground that its subject-
matter is an immovable. Therefore Vini's defense is
untenable, and Felicia can foreclose the mortgage over
the building, observing, however, the procedure
prescribed for the execution of sale of a judgment
debtor's immovable under Rule 39, Rules of Court,
specifically, that the notice of auction sale should be
published in a newspaper of general circulation.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
d) The problem that Vini mortgaged the land by way of a
chattel mortgage is untenable. Land can only be the
subject matter of a real estate mortgage and only an
absolute owner of real property may mortgage a parcel of
land. (Article 2085 (2) Civil Code). Hence, there can be
no foreclosure.
But on the assumption that what was mortgaged by way
of chattel mortgage was the building on leased land, then
the parties are treating the building as chattel. A building
that is not merely superimposed on the ground is an
immovable property and a chattel mortgage on said
building is legally void but the parties cannot be allowed
to disavow their contract on account of estoppel by deed.
However, if third parties are involved such chattel
mortgage is void and has no effect.
Chattel Mortgage; Immovables (2003)
X constructed a house on a lot which he was leasing from
Y. Later, X executed a chattel mortgage over said house
in favor of Z as security for a loan obtained from the
latter. Still later, X acquired ownership of the land where
his house was constructed, after which he mortgaged
both house and land in favor of a bank, which mortgage
was annotated on the Torrens Certificate of Title. When X
failed to pay his loan to the bank, the latter, being the
highest bidder at the
house and lot. Learning of the proceedings conducted by
the bank, Z is now demanding that the bank reconvey to
him X’s house or pay X’s loan to him plus interests. Is Z’s
demand against the bank valid and sustainable? Why?
5%
SUGGESTED ANSWER:
No, Z’s demand is not valid. A building is immovable or
real property whether it is erected by the owner of the
land, by a usufructuary, or by a lessee. It may be treated
as a movable by the parties to chattel mortgage but such
is binding only between them and not on third parties
(Evangelista v. Alto Surety Col, inc. 103 Phil. 401 [1958]).
In this case, since the bank is not a party to the chattel
mortgage, it is not bound by it, as far as the Bank is
concerned, the chattel mortgage, does not exist.
Moreover, the chattel mortgage does not exist. Moreover,
the chattel mortgage is void because it was not
registered. Assuming that it is valid, it does not bind the
Bank because it was not annotated on the title of the land
mortgaged to the bank. Z cannot demand that the Bank
pay him the loan Z extended to X, because the Bank was
not privy to such loan transaction.
ANOTHER SUGGESTED ANSWER:
No, Z’s demand against the bank is not valid. His demand
that the bank reconvey to him X’s house presupposes
that he has a real right over the house. All that Z has is a
personal right against X for damages for breach of the
contract of loan.
The treatment of a house, even if built on rented land, as
movable property is void insofar as third persons, such as
the bank, are concerned. On the other hand, the Bank
already had a real right over the house and lot when the
mortgage was annotated at the back of the Torrens title.
The bank later became the owner in the foreclosure sale.
Z cannot ask the bank to pay for X’s loan plus interest.
There is no privity of contract between Z and the bank.
ALTERNATIVE ANSWER:
The answer hinges on whether or not the bank is an
innocent mortgagee in good faith or a mortgagee in bad
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faith. In the former case, Z’s demand is not valid. In the
latter case, Z’s demand against the bank is valid and
sustainable.
Under the Torrens system of land registration, every
person dealing with registered land may rely on the
correctness of the certificate of title and the law will not in
any way oblige to him to look behind or beyond the
certificate in order to determine the condition of the title.
He is not bound by anything not annotated or reflected in
the certificate. If he proceeds to buy the land or accept it
as a collateral relying on the certificate, he is considered
a buyer or a mortgagee in good faith. On this ground, the
Bank acquires a clean title to the land and the house.
However, a bank is not an ordinary mortgagee. Unlike
private individuals, a bank is expected to exercise greater
care and prudence in its dealings. The ascertainment of
the condition of a property offered as collateral for a loan
must be a standard and indispensable part of its
operation. The bank should have conducted further
inquiry regarding the house standing on the land
considering that it was already standing there before X
acquired the title to the land. The was then valued only at
P1 Million. Lawrence was declared
bank cannot be considered as a mortgagee in good faith.
On this ground, Z’s demand against the Bank is valid and
sustainable.
Art. 2086. The provisions of Article 2052 are
applicable to a pledge or mortgage. (n)
Art. 2052. A guaranty cannot exist without a
valid obligation.
Nevertheless, a guaranty may be constituted to
guarantee the performance of a voidable or an
unenforceable contract. It may also guarantee a
natural obligation.
Art. 2087. It is also of the essence of these
contracts that when the principal obligation
becomes due, the things in which the pledge or
mortgage consists may be alienated for the
payment to the creditor. (1858)
Art. 2088. The creditor cannot appropriate the
things given by way of pledge or mortgage, or
dispose of them. Any stipulation to the contrary is
null and void. (1859a)
PROHIBITION AGAINST PACTUM
COMMISSORIUM
1. Stipulation is null and void.
2. Requisites:
a. There should be a pledge or
mortgage;
b. There should be a stipulation for an
automatic appropriation by the
creditor of the property in the event
of non-payment.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
3. Effect on security contract – nullity of the
stipulation does not affect validity and
efficacy of the principal contract.
Mortgage; Pactum Commissorium (1999)
(a) X borrowed money from Y and gave a piece of
land
Are the right of redemption and the equity of redemption
as security by way of mortgage. It was expressly agreed
between the parties in the mortgage contract that upon
nonpayment of the debt on time by X, the mortgaged land
would already belong to Y. If X defaulted in paying, would
Y now become the owner of the mortgaged land? Why?
(3%)
(b) Suppose in the preceding question, the
agreement between X and Y was that if X failed to pay
the mortgage debt on time, the debt shall be paid with the
land mortgaged by X to Y. Would your answer be the
same as in the preceding question? Explain. (3%)
SUGGESTED ANSWER:
(a) No, Y would not become the owner of the land. The
stipulation is in the nature of pactum commissorium which
is prohibited by law. The property should be sold at public
auction and the proceeds thereof applied to the
indebtedness. Any excess shall be given to the
mortgagor.
SUGGESTED ANSWER:
(d) No, the answer would not be the same. This is a valid
stipulation and does not constitute pactum
commissorium. In pactum commissorium, the acquisition
is automatic without need of any further action. In the
instant problem another act is required to be performed,
namely, the conveyance of the property as payment
(dacion en pago).
Pledge; Pactum Commissorium (2009) No.XVII.
Rosario obtained a loan of P100,000.00 from
Jennifer, and pledged her diamond ring. The
contract signed by the parties stipulated that if
Rosario is unable to redeem the ring on due date,
she will execute a document in favor of Jennifer
providing that the ring shall automatically be
considered full payment of the loan. (A). Is the
contract valid? Explain. (3%) SUGGESTED
ANSWER: The contract is valid because Rosario
has to execute a document in favor of Jennifer
to transfer the ownership of the pledged ring to
the latter. The contract does not amount to
pactum commissorium because it does not
provide for the automatic appropriation by the
pledgee of the thing pledged in case of default
by the pledgor. (B). Will your answer to [a] be the
same if the contract stipulates that upon failure of
Rosario to redeem the ring on due date, Jennifer
may immediately sell the ring and appropriate the
entire proceeds thereof for herself as full payment
of the loan? Reasons. (3%) SUGGESTED
ANSWER: No, my answer will be different. While
the contract of pledge is valid, the stipulation
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authorizing the pledgee to immediately sell the
thing pledged is void under Art 2088 of the New
Civil Code, which provides that “the creditor
cannot appropriate the things given by way of
pledge or mortgage, or dispose of them xxx.”
Jennifer cannot immediately sell by herself the
thing pledged. It must be foreclosed by selling it
at a public auction in accordance with the
procedure under Art 2112 of the New Civil Code.
Mortgage; Pactum Commissorium (2001)
To secure a loan obtained from a rural bank, Purita
assigned her leasehold rights over a stall in the public
market in favor of the bank. The deed of assignment
provides that in case of default in the payment of the
loan, the bank shall have the right to sell Purita's rights
over the market stall as her attorney-in-fact, and to apply
the proceeds to the payment of the loan. 1) Was the
assignment of leasehold rights a mortgage or a
cession? Why? (3%)
2) Assuming the assignment to be a mortgage,
does the provision giving the bank the power to sell
Purita's rights constitute pactum commissorium or not?
Why? (2%)
SUGGESTED ANSWER:
1) The assignment was a mortgage, not a cession, of
the leasehold rights. A cession would have transferred
ownership to the bank. However, the grant of authority to
the bank to sell the leasehold rights in case of default is
proof that no such ownership was transferred and that a
mere encumbrance was constituted. There would have
been no need for such authority had there been a
cession.
SUGGESTED ANSWER:
2) No, the clause in question is not a pactum
commissorium. It is pactum commissorium when default
in the payment of the loan automatically vests ownership
of the encumbered property in the bank. In the problem
given, the bank does not automatically become owner of
the property upon default of the mortgagor. The bank
has to sell the property and apply the proceeds to the
indebtedness.
Art. 2089. A pledge or mortgage is indivisible, even
though the debt may be divided among the
successors in interest of the debtor or of the
creditor.
Therefore, the debtor's heir who has paid a part of
the debt cannot ask for the proportionate
extinguishment of the pledge or mortgage as long
as the debt is not completely satisfied.
Neither can the creditor's heir who received his
share of the debt return the pledge or cancel the
mortgage, to the prejudice of the other heirs who
have not been paid.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
From these provisions is expected the case in
which, there being several things given in mortgage
or pledge, each one of them guarantees only a
determinate portion of the credit.
The debtor, in this case, shall have a right to the
extinguishment of the pledge or mortgage as the
portion of the debt for which each thing is specially
answerable is satisfied. (1860)
Art. 2090. The indivisibility of a pledge or mortgage
is not affected by the fact that the debtors are not
solidarily liable. (n)
Art. 2091. The contract of pledge or mortgage may
secure all kinds of obligations, be they pure or
subject to a suspensive or resolutory condition.
(1861)
Art. 2092. A promise to constitute a pledge or
mortgage gives rise only to a personal action
between the contracting parties, without prejudice
to the criminal responsibility incurred by him who
defrauds another, by offering in pledge or mortgage
as unencumbered, things which he knew were
subject to some burden, or by misrepresenting
himself to be the owner of the same. (1862)
Art. 315. Swindling (estafa). — Any person who
shall defraud another by any of the means mentioned
hereinbelow shall be punished by:
2. By means of any of the following false
pretenses or fraudulent acts executed prior to or
simultaneously with the commission of the
fraud:
(a) By using fictitious name, or falsely
pretending to possess power, influence,
qualifications, property, credit, agency,
business or imaginary transactions, or by
means of other similar deceits.
Art. 316, RPC. Other forms of swindling. — The
penalty of arresto mayor in its minimum and
medium period and a fine of not less than the value
of the damage caused and not more than three times
such value, shall be imposed upon:
2. Any person, who, knowing that real property is
encumbered, shall dispose of the same, although
such encumbrance be not recorded.
PLEDGE MORTGAGE
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Constituted on Constituted on
movables movables and
immovables
Property is delivered to
the pledge, or by Delivery is not
common consent to a necessary
3rd person
Not valid against 3rd
persons unless a Not valid against 3rd
description of the thing persons if not registered
pledged and the date of
the pledge appear in a
public instrument
Chattel Mortgage; Possession (1993)
A, about to leave the country on a foreign assignment,
entrusted to B his brand new car and its certificate of
registration. Falsifying A's signature. B sold A's car to C
for P200,000.00. C then registered the car in his name.
To complete the needed amount, C borrowed
P100.000.00 from the savings and loan association in his
office, constituting a chattel mortgage on the car. For
failure of C to pay the amount owed, the savings and loan
association filed in the RTC a complaint for collection with
application for issuance of a writ of replevin to obtain
possession of the vehicle so that the chattel mortgage
could be foreclosed. The RTC issued the writ of replevin.
The car was then seized from C and sold by the sheriff at
public auction at which the savings and loan association
was the lone bidder. Accordingly, the car was sold to it. A
few days later, A arrived from his foreign assignment.
Learning of what happened to his car, A sought to
recover possession and ownership of it from the savings
and loan association. Can A recover his car from the
savings and loan association? Explain your answer.
SUGGESTED ANSWER:
Under the prevailing rulings of the Supreme Court, A can
recover the car from the Savings and Loan Association
provided he pays the price at which the Association
bought the car at a public auction. Under that doctrine,
there has been an unlawful deprivation by B of A of his
car and, therefore, A can recover it from any person in
possession thereof. But since it was bought at a public
auction in good faith by the Savings and Loan
Association, he must reimburse the Association at the
price for which the car was bought.
ALTERNATIVE ANSWER:
Yes, A can recover his car from the Savings and Loan
Association. In a Chattel Mortgage, the mortgagor must
be the absolute owner of the thing mortgaged.
Furthermore, the person constituting the mortgage must
have the free disposal of the property, and in the absence
thereof, must be legally authorized for the purpose. In the
case at bar, these essential requisites did not apply to the
mortgagor B, hence the Chattel Mortgage was not valid.
CHAPTER 2
PLEDGE
Art. 2093. In addition to the requisites prescribed in
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Article 2085, it is necessary, in order to constitute
the contract of pledge, that the thing pledged be
placed in the possession of the creditor, or of a third
person by common agreement. (1863)
PLEDGE
A contract by virtue of which the debtor delivers to
the creditor or to a 3rd person a movable or
document evidencing incorporeal rights for the
purpose of securing the fulfillment of a principal
obligation with the understanding that when the
obligation is fulfilled, the thing delivered shall be
returned with all its fruits and accessions.
Pledge (2004)
ABC loaned to MNO P40,000 for which the latter pledged
400 shares of stock in XYZ Inc. It was agreed that if the
pledgor failed to pay the loan with 10% yearly interest
within four years, the pledgee is authorized to foreclose
on the shares of stock. As required, MNO delivered
possession of the shares to ABC with the understanding
that the shares would be returned to MNO upon the
time. A month after 4 years, may the shares of stock
pledged be deemed owned by ABC or not? Reason.
(5%)
SUGGESTED ANSWER:
The shares of stock cannot be deemed owned by ABC
upon default of MNO. They have to be foreclosed. Under
Article 2088 of the Civil Code, the creditor cannot
appropriate the things given by way of pledge. And even
if the parties have stipulated that ABC becomes the
owner of the shares in case MNO defaults on the loan,
such stipulation is void for being a pactum commissorium.
Pledge; Mortgage; Antichresis (1996)
In the province, a farmer couple borrowed money from
the local merchant. To guarantee payment, they left the
Torrens Title of their land with the merchant, for him to
hold until they pay the loan. Is there a - a) contract of
pledge, b) contract of mortgage, c) contract of
antichresis, or d) none of the above? Explain.
SUGGESTED ANSWER:
None of the above. There is no pledge because only
movable property may be pledged (Art. 2094. NCC). If at
all, there was a pledge of the paper or document
constituting the Torrens Title, as a movable by itself, but
not of the land which the title represents.
There is no mortgage because no deed or contract was
executed in the manner required by law for a mortgage
(Arts. 2085 to 2092, NCC; 2124 to 2131, NCC).
There is no contract of antichresis because no right to the
fruits of the property was given to the creditor (Art. 2132
NCC).
A contract of simple loan was entered into with security
arrangement agreed upon by the parties which is not one
of those mentioned above.
ALTERNATIVE ANSWER:
There is a contract of mortgage constituted over the land.
There is no particular form required for the validity of a
mortgage of real property. It is not covered by the statute
of frauds in Art. 1403, NCC and even assuming that it is
covered, the delivery of the title to the creditor has taken
it out of the coverage thereof. A contract of mortgage of
real property is consensual and is binding on the parties
despite absence of writing. However, third parties are not
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bound because of the absence of a written instrument
evidencing the mortgage and, therefore the absence of
registration. But this does not affect the validity of the
mortgage between the parties (Art. 2125, NCC), The
creditor may compel the debtor to execute the mortgage
in a public document in order to allow its registration (Art.
1357.NCC in relation to Art. 1358. NCC).
CHARACTERISTICS:
1. Real – perfected by delivery.
2. Accessory – has no independent
existence of its own.
3. Unilateral - creates obligation solely on the
part of the creditor to return the thing
subject upon the fulfillment of the principal
obligation.
4. Subsidiary – obligation does not arise until
the fulfillment of the principal obligation.
CAUSE OR CONSIDERATION IN PLEDGE
1. Principal obligation – in so far as the
pledgor is concerned.
2. Compensation stipulated for the pledge
or mere liberality of the pledgor – if
pledgor is not the debtor.
Art. 2094. All movables which are within commerce
may be pledged, provided they are susceptible of
possession. (1864)
Art. 2095. Incorporeal rights, evidenced by
negotiable instruments, bills of lading, shares of
stock, bonds, warehouse receipts and similar
documents may also be pledged. The instrument
proving the right pledged shall be delivered to the
creditor, and if negotiable, must be indorsed. (n)
Art. 2096. A pledge shall not take effect against
third persons if a description of the thing pledged
and the date of the pledge do not appear in a public
instrument. (1865a)
Art. 2097. With the consent of the pledgee, the
thing pledged may be alienated by the pledgor or
owner, subject to the pledge. The ownership of the
thing pledged is transmitted to the vendee or
transferee as soon as the pledgee consents to the
alienation, but the latter shall continue in
possession. (n)
Art. 319, RPC. Removal, sale or pledge of mortgaged
property. — The penalty or arresto mayor or a fine
amounting to twice the value of the property shall be
imposed upon:
1. Any person who shall knowingly remove any
personal property mortgaged under the Chattel
Mortgage Law to any province or city other than
the one in which it was located at the time of the
execution of the mortgage, without the written
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
consent of the mortgagee, or his executors,
administrators or assigns.
2. Any mortgagor who shall sell or pledge
personal property already pledged, or any part
thereof, under the terms of the Chattel Mortgage
Law, without the consent of the mortgagee written
on the back of the mortgage and noted on the
record hereof in the office of the Register of
Deeds of the province where such property is
located.
Art. 2098. The contract of pledge gives a right to the
creditor to retain the thing in his possession or in
that of a third person to whom it has been delivered,
until the debt is paid. (1866a)
Art. 2099. The creditor shall take care of the thing
pledged with the diligence of a good father of a
family; he has a right to the reimbursement of the
expenses made for its preservation, and is liable for
its loss or deterioration, in conformity with the
provisions of this Code. (1867)
Art. 2100. The pledgee cannot deposit the thing
pledged with a third person, unless there is a
stipulation authorizing him to do so.
The pledgee is responsible for the acts of his
agents or employees with respect to the thing
pledged. (n)
Art. 2101. The pledgor has the same responsibility
as a bailor in commodatum in the case under Article
1951. (n)
Art. 1951. The bailor who, knowing the flaws of
the thing loaned, does not advise the bailee of
the same, shall be liable to the latter for the
damages which he may suffer by reason
thereof.
Art. 2102. If the pledge earns or produces fruits,
income, dividends, or interests, the creditor shall
compensate what he receives with those which are
owing him; but if none are owing him, or insofar as
the amount may exceed that which is due, he shall
apply it to the principal. Unless there is a stipulation
to the contrary, the pledge shall extend to the
interest and earnings of the right pledged.
In case of a pledge of animals, their offspring shall
pertain to the pledgor or owner of animals pledged,
but shall be subject to the pledge, if there is no
stipulation to the contrary. (1868a)
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Art. 2103. Unless the thing pledged is expropriated,
the debtor continues to be the owner thereof.
Nevertheless, the creditor may bring the actions
which pertain to the owner of the thing pledged in
order to recover it from, or defend it against a third
person. (1869)
Art. 2104. The creditor cannot use the thing
pledged, without the authority of the owner, and if
he should do so, or should misuse the thing in any
other way, the owner may ask that it be judicially or
extrajudicially deposited. When the preservation of
the thing pledged requires its use, it must be used
by the creditor but only for that purpose. (1870a)
Art. 2105. The debtor cannot ask for the return of
the thing pledged against the will of the creditor,
unless and until he has paid the debt and its
interest, with expenses in a proper case. (1871)
Art. 2106. If through the negligence or wilful act of
the pledgee, the thing pledged is in danger of being
lost or impaired, the pledgor may require that it be
deposited with a third person. (n)
Art. 2107. If there are reasonable grounds to fear
the destruction or impairment of the thing pledged,
without the fault of the pledgee, the pledgor may
demand the return of the thing, upon offering
another thing in pledge, provided the latter is of the
same kind as the former and not of inferior quality,
and without prejudice to the right of the pledgee
under the provisions of the following article.
The pledgee is bound to advise the pledgor, without
delay, of any danger to the thing pledged. (n)
Art. 2108. If, without the fault of the pledgee, there
is danger of destruction, impairment, or diminution
in value of the thing pledged, he may cause the
same to be sold at a public sale. The proceeds of
the auction shall be a security for the principal
obligation in the same manner as the thing
originally pledged. (n)
Art. 2109. If the creditor is deceived on the
substance or quality of the thing pledged, he may
either claim another thing in its stead, or demand
immediate payment of the principal obligation. (n)
Art. 2110. If the thing pledged is returned by the
pledgee to the pledgor or owner, the pledge is
extinguished. Any stipulation to the contrary shall
be void.
If subsequent to the perfection of the pledge, the
thing is in the possession of the pledgor or owner,
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
there is a prima facie presumption that the same
has been returned by the pledgee. This same
presumption exists if the thing pledged is in the
possession of a third person who has received it
from the pledgor or owner after the constitution of
the pledge. (n)
Art. 2111. A statement in writing by the pledgee that
he renounces or abandons the pledge is sufficient
to extinguish the pledge. For this purpose, neither
the acceptance by the pledgor or owner, nor the
return of the thing pledged is necessary, the
pledgee becoming a depositary. (n)
Art. 2112. The creditor to whom the credit has not
been satisfied in due time, may proceed before a
Notary Public to the sale of the thing pledged. This
sale shall be made at a public auction, and with
notification to the debtor and the owner of the thing
pledged in a proper case, stating the amount for
which the public sale is to be held. If at the first
auction the thing is not sold, a second one with the
same formalities shall be held; and if at the second
auction there is no sale either, the creditor may
appropriate the thing pledged. In this case he shall
be obliged to give an acquittance for his entire
claim. (1872a)
Art. 2113. At the public auction, the pledgor or
owner may bid. He shall, moreover, have a better
right if he should offer the same terms as the
highest bidder.
The pledgee may also bid, but his offer shall not be
valid if he is the only bidder. (n)
Art. 2114. All bids at the public auction shall offer to
pay the purchase price at once. If any other bid is
accepted, the pledgee is deemed to have received
the purchase price, as far as the pledgor or owner
is concerned. (n)
Art. 2115. The sale of the thing pledged shall
extinguish the principal obligation, whether or not
the proceeds of the sale are equal to the amount of
the principal obligation, interest and expenses in a
proper case. If the price of the sale is more than
said amount, the debtor shall not be entitled to the
excess, unless it is otherwise agreed. If the price of
the sale is less, neither shall the creditor be entitled
to recover the deficiency, notwithstanding any
stipulation to the contrary. (n)
Art. 2116. After the public auction, the pledgee shall
promptly advise the pledgor or owner of the result
thereof. (n)
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Art. 2117. Any third person who has any right in or
to the thing pledged may satisfy the principal
obligation as soon as the latter becomes due and
demandable.(n)
Art. 2118. If a credit which has been pledged
becomes due before it is redeemed, the pledgee
may collect and receive the amount due. He shall
apply the same to the payment of his claim, and
deliver the surplus, should there be any, to the
pledgor. (n)
Art. 2119. If two or more things are pledged, the
pledgee may choose which he will cause to be sold,
unless there is a stipulation to the contrary. He may
demand the sale of only as many of the things as
are necessary for the payment of the debt. (n)
Art. 2120. If a third party secures an obligation by
pledging his own movable property under the
provisions of Article 2085 he shall have the same
rights as a guarantor under Articles 2066 to 2070,
and Articles 2077 to 2081. He is not prejudiced by
any waiver of defense by the principal obligor. (n)
Art. 2121. Pledges created by operation of law,
such as those referred to in Articles 546, 1731, and
1994, are governed by the foregoing articles on the
possession, care and sale of the thing as well as on
the termination of the pledge. However, after
payment of the debt and expenses, the remainder
of the price of the sale shall be delivered to the
obligor. (n)
LEGAL PLEDGES:
1. Art. 1731. He who has executed work upon a
movable has a right to retain it by way of pledge
until he is paid.
2. Art. 1914. The agent may retain in pledge the
things which are the object of the agency until
the principal effects the reimbursement and pays
the indemnity set forth in the two preceding
articles.
3. Art. 1944. The bailee cannot retain the thing
loaned on the ground that the bailor owes him
something, even though it may be by reason of
expenses. However, the bailee has a right of
retention for damages mentioned in Article 1951.
4. Art. 1994. The depositary may retain the thing in
pledge until the full payment of what may be due
him by reason of the deposit.
5. Art. 546. Necessary expenses shall be refunded
to every possessor; but only the possessor in
good faith may retain the thing until he has been
reimbursed therefor.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Useful expenses shall be refunded only to the
possessor in good faith with the same right of
retention, the person who has defeated him in
the possession having the option of refunding
the amount of the expenses or of paying the
increase in value which the thing may have
acquired by reason thereof.
Art. 2122. A thing under a pledge by operation of
law may be sold only after demand of the amount
for which the thing is retained. The public auction
shall take place within one month after such
demand. If, without just grounds, the creditor does
not cause the public sale to be held within such
period, the debtor may require the return of the
thing. (n)
Art. 2123. With regard to pawnshops and other
establishments, which are engaged in making loans
secured by pledges, the special laws and
regulations concerning them shall be observed, and
subsidiarily, the provisions of this Title. (1873a)
CHAPTER 3
MORTGAGE
Art. 2124. Only the following property may be the
object of a contract of mortgage:
(1) Immovables;
(2) Alienable real rights in accordance with
the laws, imposed upon immovables.
Nevertheless, movables may be the object of a
chattel mortgage. (1874a)
REAL ESTATE MORTGAGE (REM)
It is a contract whereby the debtor secures to the
creditor the fulfillment of a principal obligation,
specially subjecting to such security immovable
property or real rights over immovable property in
case the principal obligation is not complied with at
the time stipulated.
KINDS OF MORTGAGE:
1. Voluntary
2. Legal
3. Equitable – one which, although it lacks the
proper formalities of a mortgage shows the
intention of the parties to make the property
as a security for a debt (governed by arts.
1365, 1450, 1454, 1602, 1603, 1604 and
1607).
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Art. 2125. In addition to the requisites stated in
Article 2085, it is indispensable, in order that a
mortgage may be validly constituted, that the
document in which it appears be recorded in the
Registry of Property. If the instrument is not
recorded, the mortgage is nevertheless binding
between the parties.
The persons in whose favor the law establishes a
mortgage have no other right than to demand the
execution and the recording of the document in
which the mortgage is formalized. (1875a)
Art. 2085. The following requisites are essential to
the contracts of pledge and mortgage:
(1) That they be constituted to secure the
fulfillment of a principal obligation;
(2) That the pledgor or mortgagor be the
absolute owner of the thing pledged or
mortgaged;
(3) That the persons constituting the pledge or
mortgage have the free disposal of their
property, and in the absence thereof, that they
be legally authorized for the purpose.
Third persons who are not parties to the principal
obligation may secure the latter by pledging or
mortgaging their own property.
INCIDENTS OF REGISTRATION OF MORTGAGE
1. Mortgagee entitled to registration of
mortgage as a matter of right.
2. Proceedings for registration do not
determine validity of mortgage or its effect.
3. Registration is without prejudice to better
right of third parties.
4. Mortgage deed once registered forms part
of the records for the registration of the
property mortgaged.
5. Mortgage by surviving spouse of his/her
undivided share of conjugal property can be
registered.
EFFECT OF INVALIDITY OF MORTGAGE ON
PRINCIPAL OBLIGATION
1. Principal obligation remains valid.
2. Mortgage deed remains as evidence of a
personal obligation.
Art. 2126. The mortgage directly and immediately
subjects the property upon which it is imposed,
whoever the possessor may be, to the fulfillment of
the obligation for whose security it was constituted.
(1876)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
EFFECT OF MORTGAGE
1. Creates real rights, a lien inseparable from
the property mortgaged, enforceable
against the whole world.
2. Creates merely an encumbrance.
Art. 2127. The mortgage extends to the natural
accessions, to the improvements, growing fruits,
and the rents or income not yet received when the
obligation becomes due, and to the amount of the
indemnity granted or owing to the proprietor from
the insurers of the property mortgaged, or in virtue
of expropriation for public use, with the
declarations, amplifications and limitations
established by law, whether the estate remains in
the possession of the mortgagor, or it passes into
the hands of a third person. (1877)
Art. 2128. The mortgage credit may be alienated or
assigned to a third person, in whole or in part, with
the formalities required by law. (1878)
Art. 2129. The creditor may claim from a third
person in possession of the mortgaged property,
the payment of the part of the credit secured by the
property which said third person possesses, in the
terms and with the formalities which the law
establishes. (1879)
Art. 2130. A stipulation forbidding the owner from
alienating the immovable mortgaged shall be void.
(n)
NOTE: aka “Pactum de non alienando”.
Art. 2131. The form, extent and consequences of a
mortgage, both as to its constitution, modification
and extinguishment, and as to other matters not
included in this Chapter, shall be governed by the
provisions of the Mortgage Law and of the Land
Registration Law. (1880a)
LAWS GOVERNING MORTGAGE:
1. New Civil Code
2. PD 1952
3. Revised Administrative Code
4. RA 4882, as regards aliens becoming
mortgagees.
FORECLOSURE OF MORTGAGE
It is the remedy available to the mortgagee by
which he subjects the mortgaged property to the
satisfaction of the obligation to secure which the
mortgage was given.
KINDS:
1. Judicial Foreclosure.
2. Extra-judicial Foreclosure.
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JUDICIAL EXTRA-JUDICIAL STIPULATION OF UPSET PRICE “TIPO”

FORECLOSURE FORECLOUSE A stipulation of minimum price at which the property
There is court No court intervention shall be sold to become operative in the event of a
intervention foreclosure sale at public auction is NULL and
Decisions are Not appealable, it is VOID.
appealable immediately executory
Order of the court cuts Foreclosure does not REDEMPTION
off all rights of the cut off right of all parties It is a transaction by which the mortgagor
parties impleaded involved reacquires the property which may have passed
There is equity of under the mortgage or divests the property of the
redemption except on There is right of lien which the mortgage may have created.
banks which provides redemption
for a right of redemption KINDS OF REDEMPTION:
Period of redemption Period of redemption 1. Equity Redemption – right of the
starts from the finality of starts from date of mortgagor to redeem the mortgaged
judgment until order of registration of certificate property after his default in the performance
confirmation of sale of the conditions of the mortgage but before
No need for a special SPA in favor of the sale of the mortgaged property or
power of attorney in the mortgagee is needed in confirmation of sale.
contract of mortgage the contract. Applies to judicial foreclosure of real
mortgage and chattel mortgage
SOME NOTES: foreclosure.
 A foreclosure sale retroacts to the date of NOTE: Redemption of the banking
registration of the mortgage and that a institutions (mortgagor bank) is allowed
person who takes a mortgage in good faith within 1 year from confirmation of sale.
and for valuable consideration, the record
showing clear title to the mortgagor, will be 2. Right of Redemption – right of the
protected against equitable claims on the mortgagor to redeem the property within a
title in favor of third persons of which he certain period after it was sold for the
had no actual or constructive notice (St. satisfaction of the debt.
Dominic Corporation vs. IAC, 151 SCRA Applies only to extra-judicial
577, [1987]). foreclosure of real estate mortgage.
NOTE: The right of redemption, as
 Mere inadequacy of the price obtained at long as within the period
the sheriff’s sale will not be sufficient to set prescribed, may be exercised
aside the sale unless “the price is so irrespective of whether or not the
inadequate as to shock the conscience of mortgagee has subsequently
the court” taking into consideration the conveyed the property to some
peculiar circumstances attendant thereto other party (Sta. Ignacia Rural
(Sulit vs. CA, 268 SCRA 441). Bank, Inc. vs. CA, 230 SCRA 513,
[1994]).
 The action to recover deficiency after
Mortgage; Right of Redemption vs. Equity of
foreclosure prescribes in 10 years from the
Redemption (1999)
time the right of action accrues (arts. 1142 given by law to a mortgagor the same? Explain. (2%)
and 1144). SUGGESTED ANSWER:
The equity of redemption is different from the right of
redemption. EQUITY OF REDEMPTION is the right of the
NATURE OF POWER OF FORECLOSURE BY mortgagor after judgment in a judicial foreclosure to
EXTRA-JUDICIAL SALE: redeem the property by paying to the court the amount of
1. Conferred for the mortgagee’s protection. the judgment debt before the sale or confirmation of the
2. An ancillary stipulation. sale. On the other hand, RIGHT OF REDEMPTION is the
right of the mortgagor to redeem the property sold at an
3. A prerogative of the mortgagee.
extra-judicial foreclosure by paying to the buyer in the
foreclosure sale the amount paid by the buyer within one
WAIVER OF SECURITY BY CREDITOR year from such sale.
1. Mortgagee may waive right to foreclose his
mortgage and maintain a personal action PERIODS OF REDEMPTION:
for the recovery of the indebtedness.
2. Mortgagee cannot have both remedies. 1. Extra-judicial (Act No. 3135)-

JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 428

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a. Natural person -- 1 year from
registration of the certificate of sale
with the Register of Deeds.
b. Juridical person – same rule as
natural person,
c. Juridical person (mortgagee is a
bank) – 3 months after foreclosure
or before registration of certificate
of foreclosure, whichever is earlier.
2. Judicial – before confirmation of sale by
the court.
NOTE: There is no right of redemption in
judicial foreclosure sale after confirmation
of sale.
Exception: If the mortgagee is a bank
(Government Insurance System vs. CFI of
Iloilo, 185 SCRA 19).
In extra-judicial foreclosure, the mortgagor
has the right to redeem the property within
1 year from registration of the deed of sale.
HOWEVER, sec. 47 of the General
Banking Act provides that in case of
extrajudicial foreclosure notwithstanding
Act 3135, juridical persons shall have the
right to redeem the property until, but not
after, the registration of the certificate of
foreclosure sale with the Register of Deeds
which in no case shall be more than 3
months after the foreclosure, which ever is
earlier.
NOTE: Allowing redemption after the lapse of
the statutory period when the buyer at the
foreclosure sale does not object but even
consents to the redemption, will upholdd the
policy of the law which is to aid rather than
defeat the right of redemption (Ramirez vs. CA,
219 SCRA 598, [1993]).
Prescription; Judicially Foreclosed Real
Property Mortgage (2012) No.IX.a) Does the right
to request for the issuance of a writ of possession
over a foreclosed real property prescribe in five (5)
years? (5%) SUGGESTED ANSWER: Yes, it
prescribes in five (5) years. If the real property
mortgaged is judicially foreclosed, the action
for judicial foreclosure should be filed within a
period of ten (10) years. The request for
issuance of a writ of possession should be filed
upon motion of the winning bidder within five
(5) years after the judgment of foreclosure. The
writ of possession is an order commanding the
sheriff to place a person named therein in
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
possession of real property (BPI v. Icot. G.R.
No. 168081, Oct 12, 2009).
AMOUNT OF REDEMPTION PRICE:
1. Mortgagee is not a bank (Act No. 3135 in
relation to sec. 28, Rule 39 of Rules of
Court) –
a. Purchase price of the property.
b. 1% per month on the purchase
price.
c. Taxes paid and amount of
purchaser’s prior lien, if any, with
the same rate of interest computed
from the date of registration of sale,
up to the time of redemption.
2. Mortgagee is a bank (GBL 2000) –
a. Amount due under the mortgage
deed.
b. Interest.
c. Cost and expenses.
d. Note: Redemption price in this case
is reduced by the income received
from the property.
NOTE: For the Procedural Rules on Judicial
Foreclosure and Extra-judicial Foreclosure, see
Rule 68, of the Rules of Court (REMEDIAL LAW
REVIEWER).
Ownership; Co-Ownership; Redemption (2000)
Ambrosio died, leaving his three daughters, Belen,
Rosario and Sylvia a hacienda which was mortgaged to
the Philippine National Bank due to the failure of the
daughters to pay the bank, the latter foreclosed the
mortgage and the hacienda was sold to it as the highest
bidder. Six months later, Sylvia won the grand prize at the
lotto and used part of it to redeem the hacienda from the
bank. Thereafter, she took possession of the hacienda
and refused to share its fruits with her sisters, contending
that it was owned exclusively by her, having bought it
from the bank with her own money. Is she correct or not?
(3%)
SUGGESTED ANSWER:
Sylvia is not correct. The 3 daughters are the co-owners
of the hacienda being the only heirs of Ambrosio. When
the property was foreclosed, the right of redemption
belongs also to the 3 daughters. When Sylvia redeemed
the entire property before the lapse of the redemption
period, she also exercised the right of redemption of her
co-owners on their behalf. As such she is holding the
shares of her two sisters in the property, and all the fruits
corresponding thereto, in trust for them. Redemption by
one co-owner inures to the benefit of all (Adille v. CA.157
SCRA 455). Sylvia, however, is entitled to be reimbursed
the shares of her two sisters in the redemption price.
Ownership; Co-Ownership; Redemption (2002)
Antonio, Bart, and Carlos are brothers. They purchased
from their parents specific portions of a parcel of land as
evidenced by three separates deeds of sale, each deed
referring to a particular lot in meter and bounds. When
the deeds were presented for registration, the Register of
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Deeds could not issue separate certificates of Title had to
be issued, therefore, in the names of three brothers as
co¬owners of the entire property. The situation has not
changed up to now, but each of the brothers has been
receiving rentals exclusively from the lot actually
purchased by him. Antonio sells his lot to a third person,
with notice to his brothers. To enable the buyer to secure
a new title in his name, the deed of sale was made to
refer to undivided
Salvador, a timber concessionaire, built on his lot a
interest in the property of the seller (Antonio), with the
metes and bounds of the lot sold being stated. Bart and
Carlos reacted by signifying their exercise of their right of
redemption as co owners. Antonio in his behalf and in
behalf of his buyer, contends that they are no longer
co¬owners, although the title covering the property has
remained in their names as such. May Bart and Carlos
still redeem the lot sold by Antonio? Explain. (5%)
SUGGESTED ANSWER:
No, they may not redeem because there was no
Co¬ownership among Antonio, Bart, and Carlos to start
with. Their parents already partitioned the land in selling
separate portions to them. The situation is the same as in
the case Si v. Court of Appeals, (342 SCRA 653 [2000]).
2011 Bar Exam
(85) X borrowed money from a bank, secured
by a mortgage on the land of Y, his close
friend. When the loan matured, Y offered to
pay the bank but it refused since Y was not
the borrower. Is the bank’s action correct? (A)
Yes, since X, the true borrower, did not give
his consent to Y’s offer to pay. (B) No, since
anybody can discharge X’s obligation to his
benefit. (C) No, since Y, the owner of the
collateral, has an interest in the payment
of the obligation. (D) Yes, since it was X who
has an obligation to the bank.
2011 Bar Exam
(86) The right of a mortgagor in a judicial
foreclosure to redeem the mortgaged property
after his default in the performance of the
conditions of the mortgage but before the sale
of the mortgaged property or confirmation of
the sale by the court, is known as (A) accion
publiciana. (B) equity of redemption. (C)
pacto de retro. (D) right of redemption.
CHAPTER 4
ANTICHRESIS
Art. 2132. By the contract of antichresis the creditor
acquires the right to receive the fruits of an
immovable of his debtor, with the obligation to apply
them to the payment of the interest, if owing, and
thereafter to the principal of his credit. (1881)
2010 Bar Exam
(3). A contract of antichresis is always: (A). a
written contract; (B). a contract, with a
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
stipulation that the debt will be paid through
receipt of the fruits of an immovable; (C).
Involves the payment of interests, if owing; (D).
All of the above; (E). Letters a and b
SUGGESTED ANSWER: (D). All of the above;
Antichresis (1995)
Olivia owns a vast mango plantation which she can no
longer properly manage due to a lingering illness. Since
she is indebted to Peter in the amount of P500.000.00
she asks Peter to manage the plantation and apply the
harvest to the payment of her obligation to him, principal
and interest, until her indebtedness shall have been fully
paid. Peter agrees. 1) What kind of contract is entered
into between Olivia
and Peter? Explain. 2) What specific obligations are
imposed by law on Peter
as a consequence of their contract? 3) Does the law
require any specific form for the validity
of their contract? Explain 4) May Olivia re-acquire the
plantation before her entire
indebtedness shall have been fully paid? Explain.
SUGGESTED ANSWER:
1. A contract of antichresis was entered into between
payment of the loan. However, the loan was not paid on
Olivia and Peter. Under Article 2132 of the New Civil
Code, by a contract of antichresis the creditor acquires
the right to receive the fruits of an immovable of his
debtor, with the obligation to apply them to the payment
of the interest, and thereafter to the principal of his credit.
SUGGESTED ANSWER:
2. Peter must pay taxes and charges upon the land and
bear the necessary expenses for preservation and repair
which he may deduct from the fruits. (Art, 2135, NCC)
SUGGESTED ANSWER:
3. The amount of the principal and interest must be
specified in writing, otherwise the antichresis will be void.
(Art. 2134, NCC)
SUGGESTED ANSWER:
4. No. Art. 2136 specifically provides that the debtor
cannot re-acquire the enjoyment of the immovable
without first having totally paid what he owes the creditor.
However, it is potestative on the part of the creditor to do
so in order to exempt him from his obligation under Art.
2135, NCC, The debtor cannot re-acquire the enjoyment
unless Peter compels Olivia to enter again the enjoyment
of the property.
CHARACTERISTICS:
1. Accessory contract – it secures the
performance of a principal obligation.
2. Formal contract – it must be in a specified
form to be valid.
3. Prohibition against pactum commissorium
applies.
Art. 2133. The actual market value of the fruits at
the time of the application thereof to the interest
and principal shall be the measure of such
application. (n)
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Art. 2134. The amount of the principal and of the
interest shall be specified in writing; otherwise, the
contract of antichresis shall be void. (n)
Art. 2135. The creditor, unless there is a stipulation
to the contrary, is obliged to pay the taxes and
charges upon the estate.
He is also bound to bear the expenses necessary
for its preservation and repair.
The sums spent for the purposes stated in this
article shall be deducted from the fruits. (1882)
Art. 2136. The debtor cannot reacquire the
enjoyment of the immovable without first having
totally paid what he owes the creditor.
But the latter, in order to exempt himself from the
obligations imposed upon him by the preceding
article, may always compel the debtor to enter
again upon the enjoyment of the property, except
when there is a stipulation to the contrary. (1883)
Art. 2137. The creditor does not acquire the
ownership of the real estate for non-payment of the
debt within the period agreed upon.
Every stipulation to the contrary shall be void. But
the creditor may petition the court for the payment
of the debt or the sale of the real property. In this
case, the Rules of Court on the foreclosure of
mortgages shall apply. (1884a)
Art. 2138. The contracting parties may stipulate that
the interest upon the debt be compensated with the
fruits of the property which is the object of the
antichresis, provided that if the value of the fruits
should exceed the amount of interest allowed by
the laws against usury, the excess shall be applied
to the principal. (1885a)
Art. 2139. The last paragraph of Article 2085, and
Articles 2089 to 2091 are applicable to this contract.
(1886a)
Art. 2085. The following requisites are essential to
the contracts of pledge and mortgage:
(1);
(2);
(3)
Third persons who are not parties to the principal
obligation may secure the latter by pledging or
mortgaging their own property.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 2089. A pledge or mortgage is indivisible, even
though the debt may be divided among the
successors in interest of the debtor or of the creditor.
Therefore, the debtor's heir who has paid a part of
the debt cannot ask for the proportionate
extinguishment of the pledge or mortgage as long as
the debt is not completely satisfied.
Neither can the creditor's heir who received his share
of the debt return the pledge or cancel the mortgage,
to the prejudice of the other heirs who have not been
paid.
From these provisions is expected the case in which,
there being several things given in mortgage or
pledge, each one of them guarantees only a
determinate portion of the credit.
The debtor, in this case, shall have a right to the
extinguishment of the pledge or mortgage as the
portion of the debt for which each thing is specially
answerable is satisfied. (1860)
Art. 2090. The indivisibility of a pledge or mortgage is
not affected by the fact that the debtors are not
solidarily liable. (n)
Art. 2091. The contract of pledge or mortgage may
secure all kinds of obligations, be they pure or
subject to a suspensive or resolutory condition.
ANTICHRESIS PLEDGE
Refers to real property Refers to personal
property
Perfected by mere Perfected by delivery of
consent the thing pledged
Consensual contract Real contract
Pledge (1994)
In 1982, Steve borrowed P400.000.00 from Danny,
collateralized by a pledge of shares of stock of
Concepcion Corporation worth P800,000,00. In 1983,
because of the economic crisis, the value of the shares
pledged fell to only P100,000.00. Can Danny demand
that Steve surrender the other shares worth
P700,000.00?
SUGGESTED ANSWER:
a) No. Bilateral contracts cannot be changed unilaterally.
A pledge is only a subsidiary contract, and Steve is still
indebted to Danny for the amount of P400,000.00 despite
the fall in the value of the stocks pledged.
b) No. Danny's right as pledgee is to sell the pledged
shares at a public sale and keep the proceeds as
collateral for the loan. There is no showing that the fall in
the value of the pledged property was attributable to the
pledger's fault or fraud. On the contrary, the economic
crisis was the culprit. Had the pledgee been deceived as
to the substance or quality of the pledged shares of stock,
he would have had the right to claim another thing in their
place or to the immediate payment of the obligation. This
is not the case here.
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estoppel)
Delivery of personal Delivery of personal
ANTICHRESIS REAL ESTATE property is NOT property IS necessary
MORTGAGE necessary
Property is delivered to Debtor usually retains Registration is Registration is not
creditor possession of the necessary for validity necessary for validity
property Procedure id governed Procedure is governed
Creditor acquires only Creditor does not have by sec. 14 of Act No. by art. 2112 of NCC
the right to receive the any right to receive the 1508, as amended
fruits of the property, fruits, but the mortgage If the property is If the property is sold,
hence, it does not creates a real right over foreclosed, the excess debtor is not entitled
produce a real right the property over the amount due unless it is otherwise
The creditor, unless goes to the debtor stipulated or in case of
there is stipulation to The creditor has no legal pledge
the contrary, is obliged such obligation Creditor is entitled to
to pay the taxes and deficiency form the Creditor is not entitled
charges upon the estate debtor EXCEPT if it is a to deficiency, any
It is expressly stipulated security for the stipulation to the
that the creditor given in purchace of personal contrary is void
possession of the There is no such property in installments
property shall apply all obligation on part of (Recto Law)
the fruits thereof to the mortgagee
payment of interest, if
owing, and thereafter to Art. 2141. The provisions of this Code on pledge,
the principal insofar as they are not in conflict with the Chattel
Mortgage Law shall be applicable to chattel
mortgages. (n)
REMEDIES OF CREDITOR IN CASE OF NON-
PAYMENT OF DEBT: LAWS GOVERNING CHATTEL MORTGAGE
1. Action for specific performance; or 1. Chattel Mortgage Law (Act No. 1508).
2. Petition for the sale of real property as in 2. Civil Code.
foreclosure of mortgages under Rule 68 of 3. Revised Administrative Code.
Rules of Court. 4. Revised Penal Code.
5. Ship Mortgage Decree of 1978 (PD 1521).
NOTE: The parties, however, may agree on an
extra-judicial foreclosure in the same manner
as they are allowed in contracts of mortgage AFFIDAVIT OF GOOD FAITH
and pledge (Tavera vs. El Hogar Filipino, Inc., An oath in a contract of chattel mortgage wherein
68 Phil. 712). the parties severally swear that the mortgage is
made for the purpose of securing the obligation
specified in the conditions thereof and for no other
CHAPTER 5 purposes and that the same is a just and valid
CHATTEL MORTGAGE obligation and not one entered into for the purpose
of fraud.
Art. 2140. By a chattel mortgage, personal property
is recorded in the Chattel Mortgage Register as a EFFECT OF REGISTRATION
security for the performance of an obligation. If the 1. Creates real rights
movable, instead of being recorded, is delivered to 2. Adds nothing to the mortgage.
the creditor or a third person, the contract is a
pledge and not a chattel mortgage. (n) Note: Registration of assignment of chattel
mortgage is not required.
CHATTEL PLEDGE RIGHT OF REDEMPTION
MORTGAGE 1. When the condition of a chattel mortgage is
Involves movable broken, the following may redeem –
property (but may a. Mortgagor
include real property by Involves movable b. Person holding a subsequent
way of exception solely property mortgage.
on the basis of c. Subsequent attaching creditor.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 432
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2. An attaching creditor who so redeems shall
be subrogated to the rights of the
mortgagee and entitled to foreclose the
mortgage in the same manner that the
mortgagee could foreclose it.
3. The redemption is made by paying or
delivering on the mortgagee the amount
due on such mortgage and the costs and
expenses incurred by such breach of
condition before the sale.
FORECLOSURE OF CHATTEL MORTGAGE
1. Public sale.
2. Private sale – there is nothing illegal,
immoral or against public order in an
agreement for the private sale of the
personal properties covered by the chattel
mortgage.
PERIOD TO FORECLOSE
1. After 30 days from the time of the condition
is broken.
2. The 30-day period is the minimum period
after violation of the mortgage condition for
the creditor to cause the sale at public
auction with at least 10 days notice to the
mortgagor and posting of public notice of
time, place, and purpose of sale, and is a
period of grace for the mortgagor, to
discharge the obligation.
3. After the sale at public auction, the right of
redemption is not anymore available.
CIVIL ACTION TO RECOVER CREDIT
1. Independent action not required.
2. Mortgage lien deemed abandoned by
obtaining a personal judgment.
RIGHT OF MORTGAGEE TO RECOVER
DEFICIENCY
1. Where the mortgage is foreclosed –
creditor may maintain action for the
deficiency although the chattel mortgage
law is silent in this point. The reason is that
chattel mortgage is only given as a security
and not as payment of the debt.
2. Where mortgage constituted as security
for purchase of personal property
payable in installments – no deficiency
judgment can be asked and any agreement
to the contrary is void.
3. Where the mortgage property is
attached pursuant to an action for
collection of sum of money (specific
performance), the judgment creditor can
recover the deficiency.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
APPLICATIONS OF PROCEEDS OF SALE
1. Costs and expenses of keeping and sale.
2. Payment of the obligation.
3. Claims of persons holding subsequent
mortgages in their order.
4. Balance, if any, shall be paid to the
mortgagor, or person holding under him.
Title XIX. - CONCURRENCE AND PREFERENCE
OF CREDITS
CHAPTER 1
GENERAL PROVISIONS
CONCURRENCE OF CREDITS
It implies possession by two or more creditors of
equal right or privileges over the same property or
all of the property of a debtor.
PREFERRENCE OF CREDIT
It is the right held by a creditor to be preferred in the
payment of his claim above other out of the debtor’s
assets.
Art. 2236. The debtor is liable with all his property,
present and future, for the fulfillment of his
obligations, subject to the exemptions provided by
law. (1911a)
Section 13, Rule 39, Rules of Court. Property exempt
from execution. — Except as otherwise expressly
provided by law, the following property, and no other,
shall be exempt from execution:
(a) The judgment obligor's family home as provided by
law, or the homestead in which he resides, and land
necessarily used in connection therewith;
(b) Ordinary tools and implements personally used by
him in his trade, employment, or livelihood;
(c) Three horses, or three cows, or three carabaos, or
other beasts of burden, such as the judgment obligor
may select necessarily used by him in his ordinary
occupation;
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(d) His necessary clothing and articles for ordinary
personal use, excluding jewelry;
(e) Household furniture and utensils necessary for
housekeeping, and used for that purpose by the
judgment obligor and his family, such as the judgment
obligor may select, of a value not exceeding one
hundred thousand pesos;
(f) Provisions for individual or family use sufficient for
four months;
(g) The professional libraries and equipment of
judges, lawyers, physicians, pharmacists, dentists,
engineers, surveyors, clergymen, teachers, and other
professionals, not exceeding three hundred thousand
pesos in value;
(h) One fishing boat and accessories not exceeding
the total value of one hundred thousand pesos owned
by a fisherman and by the lawful use of which he
earns his livelihood;
(i) So much of the salaries, wages, or earnings of the
judgment obligor for his personal services within the
four months preceding the levy as are necessary for
the support of his family;
(j) Lettered gravestones;
(k) Monies, benefits, privileges, or annuities accruing
or in any manner growing out of any life insurance;
(l) The right to receive legal support, or money or
property obtained as such support, or any pension or
gratuity from the Government;
(m) Properties specially exempted by law.
But no article or species of property mentioned in this
section shall be exempt from execution issued upon a
judgment recovered for its price or upon a judgment of
foreclosure of a mortgage thereon. (12a)
NOTE: RA 4917 provides that retirement benefits of
employees in private firms shall be except from
attachment, levy, or execution or any tax
whatsoever. Except for:
1. Debt due to such private benefit plan;
2. Debt arising from criminal acts.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 2237. Insolvency shall be governed by special
laws insofar as they are not inconsistent with this
Code. (n)
Art. 2238. So long as the conjugal partnership or
absolute community subsists, its property shall not
be among the assets to be taken possession of by
the assignee for the payment of the insolvent
debtor's obligations, except insofar as the latter
have redounded to the benefit of the family. If it is
the husband who is insolvent, the administration of
the conjugal partnership of absolute community
may, by order of the court, be transferred to the wife
or to a third person other than the assignee. (n)
Art. 2239. If there is property, other than that
mentioned in the preceding article, owned by two or
more persons, one of whom is the insolvent debtor,
his undivided share or interest therein shall be
among the assets to be taken possession of by the
assignee for the payment of the insolvent debtor's
obligations. (n)
Art. 2240. Property held by the insolvent debtor as
a trustee of an express or implied trust, shall be
excluded from the insolvency proceedings. (n)
2007 Bar Exam
(4). An, assignee in a proceeding under the
Insolvency Law does not have the duty of: (A).
suing to recover the properties of the state of
the insolvent debtor; (B). selling property of the
insolvent debtor; (C). ensuring that a debtor
corporation operate the business efficiently
and effectively while the proceedings are
pending; (D). collecting and discharging debts
owed to the insolvent debtor. SUGGESTED
ANSWER: (C). ensuring that a debtor
corporation operate the business efficiently
and effectively while the proceedings are
pending;
2007 Bar Exam
(5). In order to obtain approval of the proposed
settlement of the debtor in an insolvency
proceeding. (A). the court must initiate the
proposal (B). 2/3 of the number of creditors
should agree to the settlement; (C). 3/5 of the
number of creditors should agree to the
settlement; (D). 1/3 of the total debts must
be represented by the approving creditors;
(E). Letters a and b SUGGESTED ANSWER:
(C). 3/5 of the number of creditors should
agree to the settlement; [Note: Items 4&5
on Insolvency Law are not included within
the coverage of Civil Law but Commercial
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Law. It is therefore suggested that the
examinees be given full credit for the two
items regardless of their answers.]
CHAPTER 2
CLASSIFICATION OF CREDITS
CLASSIFICATION OF CREDITS:
1. Special Preferred Credits (arts. 2241 and
2242, NCC).
Considered as mortgages or
pledges of real or personal property
or liens within the purview of legal
provisions governing insolvency.
Taxes due to the state shall first be
satisfied.
2. Ordinary Preferred Credits (art. 2244) –
preferred in the order given by the law.
3. Common Credits (art. 2245) – credits of
any other kind or class, or by any other
right or title not comprised in arts. 2241 –
2244 shall enjoy no preference.
Art. 2241. With reference to specific movable
property of the debtor, the following claims or liens
shall be preferred:
(1) Duties, taxes and fees due thereon to
the State or any subdivision thereof;
(2) Claims arising from misappropriation,
breach of trust, or malfeasance by public
officials committed in the performance of
their duties, on the movables, money or
securities obtained by them;
(3) Claims for the unpaid price of movables
sold, on said movables, so long as they are
in the possession of the debtor, up to the
value of the same; and if the movable has
been resold by the debtor and the price is
still unpaid, the lien may be enforced on the
price; this right is not lost by the
immobilization of the thing by destination,
provided it has not lost its form, substance
and identity; neither is the right lost by the
sale of the thing together with other
property for a lump sum, when the price
thereof can be determined proportionally;
(4) Credits guaranteed with a pledge so
long as the things pledged are in the hands
of the creditor, or those guaranteed by a
chattel mortgage, upon the things pledged
or mortgaged, up to the value thereof;
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(5) Credits for the making, repair,
safekeeping or preservation of personal
property, on the movable thus made,
repaired, kept or possessed;
(6) Claims for laborers' wages, on the
goods manufactured or the work done;
(7) For expenses of salvage, upon the
goods salvaged;
(8) Credits between the landlord and the
tenant, arising from the contract of tenancy
on shares, on the share of each in the fruits
or harvest;
(9) Credits for transportation, upon the
goods carried, for the price of the contract
and incidental expenses, until their delivery
and for thirty days thereafter;
(10) Credits for lodging and supplies
usually furnished to travelers by hotel
keepers, on the movables belonging to the
guest as long as such movables are in the
hotel, but not for money loaned to the
guests;
(11) Credits for seeds and expenses for
cultivation and harvest advanced to the
debtor, upon the fruits harvested;
(12) Credits for rent for one year, upon the
personal property of the lessee existing on
the immovable leased and on the fruits of
the same, but not on money or instruments
of credit;
(13) Claims in favor of the depositor if the
depositary has wrongfully sold the thing
deposited, upon the price of the sale.
In the foregoing cases, if the movables to
which the lien or preference attaches have
been wrongfully taken, the creditor may
demand them from any possessor, within
thirty days from the unlawful seizure.
(1922a)
Chattel Mortgage; Preference of Creditors (1995)
Lawrence, a retired air force captain, decided to go into
the air transport business. He purchased an aircraft in
cash except for an outstanding balance of P500,000.00.
He incurred an indebtedness of P300,000.00 for repairs
with an aircraft repair company. He also borrowed P1
Million from a bank for additional capital and constituted a
chattel mortgage on the aircraft to secure the loan.
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While on a test flight the aircraft crashed causing physical
injuries to a third party who was awarded damages of
P200,000.00.
Lawrence's insurance claim for damage to the aircraft
was denied thus leaving him nothing else but the aircraft
which
insolvent.
Assuming that the aircraft was sold for Pl Million, give the
order of preference of the creditors of Lawrence and
distribute the amount of P1 Million.
SUGGESTED ANSWER:
Assuming that the aircraft was sold for P1 Million, there is
no order of preference. The P1 Million will all go to the
bank as a chattel mortgagee because a chattel mortgage
under Art. 2241 (4) NCC defeats Art. 2244 (12) and (14}.
Art. 2241 (3) and (5) are not applicable because the
aircraft is no longer in the possession of the creditor.
Art. 2242. With reference to specific immovable
property and real rights of the debtor, the following
claims, mortgages and liens shall be preferred, and
shall constitute an encumbrance on the immovable
or real right:
(1) Taxes due upon the land or building;
(2) For the unpaid price of real property
sold, upon the immovable sold;
(3) Claims of laborers, masons, mechanics
and other workmen, as well as of
architects, engineers and contractors,
engaged in the construction, reconstruction
or repair of buildings, canals or other works,
upon said buildings, canals or other works;
(4) Claims of furnishers of materials used in
the construction, reconstruction, or repair of
buildings, canals or other works, upon said
buildings, canals or other works;
(5) Mortgage credits recorded in the
Registry of Property, upon the real estate
mortgaged;
(6) Expenses for the preservation or
improvement of real property when the law
authorizes reimbursement, upon the
immovable preserved or improved;
(7) Credits annotated in the Registry of
Property, in virtue of a judicial order, by
attachments or executions, upon the
property affected, and only as to later
credits;
(8) Claims of co-heirs for warranty in the
partition of an immovable among them,
upon the real property thus divided;
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(9) Claims of donors of real property for
pecuniary charges or other conditions
imposed upon the donee, upon the
immovable donated;
(10) Credits of insurers, upon the property
insured, for the insurance premium for two
years. (1923a)
QA. Which of the following claims against the
debtor enjoys preference over the
others with respect to his specific immovable
property and real rights?
A. Unpaid price of real property sold, upon the
immovable property.
B. Mortgage credits recorded in the registry of
property, upon the mortgaged real
estate.
C. Taxes due, upon the land or building.
D. Expenses for the preservation and improvement
of property, when the law
authorizes reimbursement, upon the preserved or
improved immovable.
Art. 2243. The claims or credits enumerated in the
two preceding articles shall be considered as
mortgages or pledges of real or personal property,
or liens within the purview of legal provisions
governing insolvency. Taxes mentioned in No. 1,
Article 2241, and No. 1, Article 2242, shall first be
satisfied. (n)
Art. 2244. With reference to other property, real and
personal, of the debtor, the following claims or
credits shall be preferred in the order named:
(1) Proper funeral expenses for the debtor,
or children under his or her parental
authority who have no property of their
own, when approved by the court;
(2) Credits for services rendered the
insolvent by employees, laborers, or
household helpers for one year preceding
the commencement of the proceedings in
insolvency;
(3) Expenses during the last illness of the
debtor or of his or her spouse and children
under his or her parental authority, if they
have no property of their own;
(4) Compensation due the laborers or their
dependents under laws providing for
indemnity for damages in cases of labor
accident, or illness resulting from the nature
of the employment;
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(5) Credits and advancements made to the
debtor for support of himself or herself, and
family, during the last year preceding the
insolvency;
(6) Support during the insolvency
proceedings, and for three months
thereafter;
(7) Fines and civil indemnification arising
from a criminal offense;
(8) Legal expenses, and expenses incurred
in the administration of the insolvent's
estate for the common interest of the
creditors, when properly authorized and
approved by the court;
(9) Taxes and assessments due the
national government, other than those
mentioned in Articles 2241, No. 1, and
2242, No. 1;
(10) Taxes and assessments due any
province, other than those referred to in
Articles 2241, No. 1, and 2242, No. 1;
(11) Taxes and assessments due any city
or municipality, other than those indicated
in Articles 2241, No. 1, and 2242, No. 1;
(12) Damages for death or personal injuries
caused by a quasi-delict;
(13) Gifts due to public and private
institutions of charity or beneficence;
(14) Credits which, without special
privilege, appear in (a) a public instrument;
or (b) in a final judgment, if they have been
the subject of litigation. These credits shall
have preference among themselves in the
order of priority of the dates of the
instruments and of the judgments,
respectively. (1924a)
Art. 2245. Credits of any other kind or class, or by
any other right or title not comprised in the four
preceding articles, shall enjoy no preference. (1925)
CHAPTER 3
ORDER OF PREFERENCE OF CREDITS
Art. 2246. Those credits which enjoy preference
with respect to specific movables, exclude all others
to the extent of the value of the personal property to
which the preference refers.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 2247. If there are two or more credits with
respect to the same specific movable property, they
shall be satisfied pro rata, after the payment of
duties, taxes and fees due the State or any
subdivision thereof. (1926a)
Art. 2248. Those credits which enjoy preference in
relation to specific real property or real rights,
exclude all others to the extent of the value of the
immovable or real right to which the preference
refers.
Art. 2249. If there are two or more credits with
respect to the same specific real property or real
rights, they shall be satisfied pro rata, after the
payment of the taxes and assessments upon the
immovable property or real right. (1927a)
Art. 2250. The excess, if any, after the payment of
the credits which enjoy preference with respect to
specific property, real or personal, shall be added to
the free property which the debtor may have, for the
payment of the other credits. (1928a)
Art. 2251. Those credits which do not enjoy any
preference with respect to specific property, and
those which enjoy preference, as to the amount not
paid, shall be satisfied according to the following
rules:
(1) In the order established in Article 2244;
(2) Common credits referred to in Article 2245 shall
be paid pro rata regardless of dates. (1929a)
Note: Insolvency Law is discussed in
Commercial Law Reviewer.
2011 Bar Exam Question
(18) Which of the following claims against the
debtor enjoys preference over the others with
respect to his specific immovable property and
real rights? (A) Unpaid price of real property
sold, upon the immovable property. (B)
Mortgage credits recorded in the registry of
property, upon the mortgaged real estate. (C)
Taxes due, upon the land or building. (D)
Expenses for the preservation and
improvement of property, when the law
authorizes reimbursement, upon the preserved
or improved immovable.
Title XVII. - EXTRA-CONTRACTUAL
OBLIGATIONS
CHAPTER 1
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QUASI-CONTRACTS
Art. 2142. Certain lawful, voluntary and unilateral
acts give rise to the juridical relation of quasi-
contract to the end that no one shall be unjustly
enriched or benefited at the expense of another. (n)
Obligations; Without Agreement (2007)
No.V. What are obligations without an
agreement"? Give five examples of situations
giving rise to this type of obligations? (10%)
SUGGESTED ANSWER: "Obligations without
an agreement" are obligations that do not
arise from contract such as those arising
from: 1. delicts; 2. quasi-delicts; 3. solutio
indebiti; 4. negotiorum gestio; and 5. all
other obligations arising from law.
ALTERNATIVE ANSWER: "Obligations
without an agreement" refer to the juridical
relation of quasi-contract which arise from
certain lawful, voluntary and unilateral acts
to the end that no one shall be unjustly
enriched or benefited at the expense of
another. (Art. 2142, NCC)
First Example of an obligation without an
agreement is a case of negotiorum gestio,
whereby one who voluntarily takes charge
of the agency or management of the
business or property of another without any
power from the latter, is obliged to
continue the same until the termination of
the affair and its incidents, or to require
the person concerned to substitute him, if
the owner is in a position to do so (Art.
2144, NCC). Second example, a case of
solutio indebiti may also give rise to an
obligation without an agreement. This
refers to the obligation to return which
arises when something is received when
there is no right to demand it, and it was
unduly delivered through mistake (Art.
2154, NCC). Third example, is when
without the knowledge of the person
obliged to give support, it is given by a
stranger, the latter shall have a right to
claim the same from the former, unless it
appears that he gave it out of piety and
without intention of being repaid (Art.
2164, NCC).
Fourth example, is when through accident
or other causes a person is injured or
becomes seriously ill, and he is treated or
helped while he is not in a condition to give
consent to a contract, he shall be liable to
pay for the services of the physician or
other person aiding him, unless the service
has been rendered out of pure generosity
(Art. 2167, NCC). Fifth instance of an
obligation without an agreement is when
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
the person obliged to support an orphan or
an insane or other indigent person unjustly
refuses to give support to the latter, any
third person may furnish support to the
needy individual, with right of
reimbursement from the person obliged to
give support. The provisions of this article
apply when the father or mother of a child
under eighteen years of age unjustly
refuses to support him (Art. 2166, NCC).
Art. 2143. The provisions for quasi-contracts in this
Chapter do not exclude other quasi-contracts which
may come within the purview of the preceding
article. (n)
SECTION 1. - Negotiorum Gestio
Art. 2144. Whoever voluntarily takes charge of the
agency or management of the business or property
of another, without any power from the latter, is
obliged to continue the same until the termination of
the affair and its incidents, or to require the person
concerned to substitute him, if the owner is in a
position to do so. This juridical relation does not
arise in either of these instances:
(1) When the property or business is not
neglected or abandoned;
(2) If in fact the manager has been tacitly
authorized by the owner.
In the first case, the provisions of Articles 1317,
1403, No. 1, and 1404 regarding unauthorized
contracts shall govern.
In the second case, the rules on agency in Title X of
this Book shall be applicable. (1888a)
Quasi-Contracts; Negotiorium Gestio (1992)
In fear of reprisals from lawless elements besieging his
barangay, X abandoned his fishpond, fled to Manila and
left for Europe. Seeking that the fish in the fishpond were
ready for harvest, Y, who is in the business of managing
fishponds on a commission basis, took possession of the
property, harvested the fish and sold the entire harvest to
Z. Thereafter, Y borrowed money from W and used the
money to buy new supplies of fish fry and to prepare the
fishpond for the next crop. a) What is the Juridical
relation between X and Y during X's absence? b) Upon
the return of X to the barangay, what are the obligations
of Y to X as regards the contract with Z? c) Upon X's
return, what are the obligations of X as regards Y's
contract with W? d) What legal effects will result if X
expressly ratifies Y's management and what would be the
obligations of X in favor of Y? Explain all your answers.
SUGGESTED ANSWER:
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(a) The juridical relation is that of the quasi-contract of
"negotiorum gestio". Y is the "gestor" or "officious
manager" and X is the "owner" (Art. 2144, Civil Code).
(b) Y must render an account of his operations and
deliver to X the price he received for the sale of the
harvested fish (Art, 2145, Civil Code).
(c) X must pay the loan obtained by Y from W because X
must answer for obligations contracted with third persons
in the interest of the owner (Art. 2150, Civil Code),
(d) Express ratification by X provides the effects of an
express agency and X is liable to pay the commissions
habitually received by the gestor as manager (Art. 2149,
Civil Code).
Quasi-Contracts; Negotiorium Gestio (1993)
In September, 1972, upon declaration of martial rule in
the Philippines. A, together with his wife and children.
disappeared from his residence along A. Mabini Street.
Ermita, Manila. B, his immediate neighbor, noticing that
mysterious disappearance of A and his family, closed the
doors and windows of his house to prevent it from being
burglarized. Years passed without B hearing from A and
his family, B continued taking care of A's house, even
causing minor repairs to be done at his house to preserve
it. In 1976, when business began to perk up in the area,
an enterprising man. C, approached B and proposed that
they build stores at the ground floor of the house and
convert its second floor into a pension house. B agreed to
Cs proposal and together they spent for the construction
of stores at the ground floor and the conversion of the
second floor into a pension house. While construction
was going on, fire occurred at a nearby house. The
houses at the entire block, including A's were burned.
After the EDSA revolution in February 1986, A and his
family returned from the United States where they took
refuge in 1972. Upon learning of what happened to his
house. A sued B for damages, B pleaded as a defense
that he merely took charge of his
house under the principle of negotiorum gestio. He was
not liable as the burning of the house is a fortuitous
event. Is B liable to A for damages under the foregoing
circumstances?
SUGGESTED ANSWER:
No. B is not liable for damages, because he is a gestor in
negotiorum gestio (Art. 2144, Civil Code) Furthermore, B
is not liable to A because Article 2147 of the Civil Code is
not applicable.
B did not undertake risky operations which the owner was
not accustomed to embark upon: a) he has not preferred
his own interest to that of the owner; b) he has not failed
to return the property or business after demand by the
owner; and c) he has not assumed the management in
bad faith.
ALTERNATIVE ANSWER:
He would be liable under Art. 2147 (1) of the Civil Code,
because he used the property for an operation which the
operator is not accustomed to, and in so doing, he
exposed the house to increased risk, namely the
operation of a pension house on the second floor and
stores on the first floor
Quasi-Contracts; Negotiorium Gestio (1995)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Armando owns a row of residential apartments in San
Juan, Metro Manila, which he rents out to tenants. On 1
April 1991 he left for the United States without appointing
any administrator to manage his apartments such that
uncollected rentals accumulated for three (3) years.
Amparo, a niece of Armando, concerned with the interest
of her uncle, took it upon herself to administer the
property. As a consequence, she incurred expenses in
collecting the rents and in some instances even spent for
necessary repairs to preserve the property.
1. What Juridical relation between Amparo and Armando,
if any, has resulted from Amparo's unilateral act of
assuming the administration of Armando's apartments?
Explain.
2. What rights and obligations, if any, does Amparo have
under the circumstances? Explain.
SUGGESTED ANSWER:
1. Negotiorum gestio existed between Amparo and
Armando, She voluntarily took charge of the agency or
management of the business or property of her uncle
without any power from her uncle whose property was
neglected. She is called the gestor negotiorum or
officious manager, (Art. 2144, NCC)
2. It is recommended by the Committee that an
enumeration of any two (2) obligations and two (2) rights
as enumerated in Arts. 2145 to 2152, NCC, would entitle
the examinee to full credit.
Art. 2145. The officious manager shall perform his duties
with all the diligence of a good father of a family, and pay
the damages which through his fault or negligence may
be suffered by the owner of the property or business
under management.
The courts may, however, increase or moderate the
(2) When the contract refers to things pertaining to the
indemnity according to the circumstances of each case.
Art. 2146. If the officious manager delegates to another
person all or some of his duties, he shall be liable for the
acts of the delegate, without prejudice to the direct
obligation of the latter toward the owner of the business.
The responsibility of two or more officious managers shall
be solidary, unless management was assumed to save
the thing or business from imminent danger.
Art. 2147. The officious manager shall be liable for any
fortuitous event:
(1) If he undertakes risky operations which the owner was
not accustomed to embark upon;
(2) If he has preferred his own interest to that of the
owner;
(3) If he fails to return the property or business after
demand by the owner,
(4) If he assumed the management in bad faith.
Art. 2148. Except when the management was assumed
to save the property or business from imminent danger,
the officious manager shall be liable for fortuitous events
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(1) If he is manifestly unfit to carry on the management;
(2) If by his Intervention h e prevented a more competent
person from taking up the management.
Art. 2149. The ratification of the management by the
owner of the business produces the effects of an express
agency, even if the business may not have been
successful.
Art. 2150, Although the officious management may not
have been expressly ratified, the owner of the property or
business who enjoys the advantages of the same shall be
liable for obligations incurred in his interest, and shall
reimburse the officious manager for the necessary and
useful expenses and for the damages which the latter
may have suffered in the performance of his duties.
The same obligation shall be incumbent upon him when
the management had for its purpose the prevention of an
imminent and manifest loss, although no benefit may
have been derived.
Art. 2151. Even though the owner did not derive any
benefit and there has been no imminent and manifest
danger to the property or business, the owner is liable as
under the first paragraph of the preceding article,
provided:
(1) The officious manager has acted in good faith, and
(2) The property or business is intact, ready to be
returned to the owner.
Art. 2152. The officious manager is personally liable for
contracts which he has entered into with third persons,
even though he acted in the name of the owner, and
there shall be no right of action between the owner and
third persons. These provisions shall not apply:
(1) If the owner has expressly or tacitly ratified the
management, or
owner of the business,
(NOTE: It is recommended by the Committee that an
enumeration of any two (2) obligations and any two (2)
rights as enumerated la Arts. 2145 to 2152, NCC would
entitle the examinee to full credit.)
Quasi-Contracts; Solutio Indebiti (2004)
DPO went to a store to buy a pack of cigarettes worth
P225.00 only. He gave the vendor, RRA, a P500-peso
bill. The vendor gave him the pack plus P375.00 change.
Was there a discount, an oversight, or an error in the
amount given? What would be DPO’s duty, if any, in case
of an excess in the amount of change given by the
vendor? How is this situational relationship between
DPO and RRA denominated? Explain. (5%)
SUGGESTED ANSWER:
There was error in the amount of change given by RRA.
This is a case of solutio indebiti in that DPO received
something that is not due him. He has the obligation to
return the P100.00; otherwise, he will unjustly enrich
himself at the expense of RRA. (Art. 2154, Civil Code)
ALTERNATIVE ANSWER:
DPO has the duty to return to RRA the excess P100 as
trustee under Article 1456 of the Civil Code which
provides: If property is acquired through mistake or fraud,
the person obtaining it is, by force of law, considered a
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
trustee of an implied trust for the benefit of the person
from whom the property comes. There is, in this case, an
implied or constructive trust in favor of RRA.
Art. 2145. The officious manager shall perform his
duties with all the diligence of a good father of a
family, and pay the damages which through his fault
or negligence may be suffered by the owner of the
property or business under management.
The courts may, however, increase or moderate the
indemnity according to the circumstances of each
case. (1889a)
Art. 2146. If the officious manager delegates to
another person all or some of his duties, he shall be
liable for the acts of the delegate, without prejudice
to the direct obligation of the latter toward the owner
of the business.
The responsibility of two or more officious
managers shall be solidary, unless the
management was assumed to save the thing or
business from imminent danger. (1890a)
Art. 2147. The officious manager shall be liable for
any fortuitous event:
(1) If he undertakes risky operations which
the owner was not accustomed to embark
upon;
(2) If he has preferred his own interest to
that of the owner;
(3) If he fails to return the property or
business after demand by the owner;
(4) If he assumed the management in bad
faith. (1891a)
Art. 2148. Except when the management was
assumed to save property or business from
imminent danger, the officious manager shall be
liable for fortuitous events:
(1) If he is manifestly unfit to carry on the
management;
(2) If by his intervention he prevented a
more competent person from taking up the
management. (n)
Art. 2149. The ratification of the management by
the owner of the business produces the effects of
an express agency, even if the business may not
have been successful. (1892a)
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Art. 2150. Although the officious management may
not have been expressly ratified, the owner of the
property or business who enjoys the advantages of
the same shall be liable for obligations incurred in
his interest, and shall reimburse the officious
manager for the necessary and useful expenses
and for the damages which the latter may have
suffered in the performance of his duties.
The same obligation shall be incumbent upon him
when the management had for its purpose the
prevention of an imminent and manifest loss,
although no benefit may have been derived. (1893)
Art. 2151. Even though the owner did not derive
any benefit and there has been no imminent and
manifest danger to the property or business, the
owner is liable as under the first paragraph of the
preceding article, provided:
(1) The officious manager has acted in
good faith, and
(2) The property or business is intact, ready
to be returned to the owner. (n)
Art. 2152. The officious manager is personally liable
for contracts which he has entered into with third
persons, even though he acted in the name of the
owner, and there shall be no right of action between
the owner and third persons. These provisions shall
not apply:
(1) If the owner has expressly or tacitly
ratified the management, or
(2) When the contract refers to things
pertaining to the owner of the business. (n)
Art. 2153. The management is extinguished:
(1) When the owner repudiates it or puts an
end thereto;
(2) When the officious manager withdraws
from the management, subject to the
provisions of Article 2144;
(3) By the death, civil interdiction, insanity
or insolvency of the owner or the officious
manager. (n)
SECTION 2. - Solutio Indebiti
Art. 2154. If something is received when there is no
right to demand it, and it was unduly delivered
through mistake, the obligation to return it arises.
(1895)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 2155. Payment by reason of a mistake in the
construction or application of a doubtful or difficult
question of law may come within the scope of the
preceding article. (n)
Art. 2156. If the payer was in doubt whether the
debt was due, he may recover if he proves that it
was not due. (n)
Art. 2157. The responsibility of two or more payees,
when there has been payment of what is not due, is
solidary. (n)
Art. 2158. When the property delivered or money
paid belongs to a third person, the payee shall
comply with the provisions of article 1984. (n)
Art. 2159. Whoever in bad faith accepts an undue
payment, shall pay legal interest if a sum of money
is involved, or shall be liable for fruits received or
which should have been received if the thing
produces fruits.
He shall furthermore be answerable for any loss or
impairment of the thing from any cause, and for
damages to the person who delivered the thing,
until it is recovered. (1896a)
Art. 2160. He who in good faith accepts an undue
payment of a thing certain and determinate shall
only be responsible for the impairment or loss of the
same or its accessories and accessions insofar as
he has thereby been benefited. If he has alienated
it, he shall return the price or assign the action to
collect the sum. (1897)
Art. 2161. As regards the reimbursement for
improvements and expenses incurred by him who
unduly received the thing, the provisions of Title V
of Book II shall govern. (1898)
Art. 2162. He shall be exempt from the obligation to
restore who, believing in good faith that the
payment was being made of a legitimate and
subsisting claim, destroyed the document, or
allowed the action to prescribe, or gave up the
pledges, or cancelled the guaranties for his right.
He who paid unduly may proceed only against the
true debtor or the guarantors with regard to whom
the action is still effective. (1899)
Art. 2163. It is presumed that there was a mistake
in the payment if something which had never been
due or had already been paid was delivered; but he
from whom the return is claimed may prove that the
delivery was made out of liberality or for any other
just cause. (1901)
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VIII.Which of the following actions or defenses
are meritorious: (1%) (A) An action for
recovery of down payment paid under a
rescinded oral sale of real property. (B) A
defense in an action for ejectment that the
lessor verbally promised to extend or renew
the lease.
(C) An action for payment of sum of money
filed against one who orally promised to
answer another's debt in case the latter
defaults. (D) A defense in an action for
damages that the debtor has sufficient, but
unliquidated assets to satisfy the credit
acquired when it becomes due. (E) None of
the above. SUGGESTED ANSWER: (A) An
action for recovery of down payment paid
under a rescinded oral sale of real property.
An oral sale of real property is an
unenforceable contract under the Statute
of Frauds. Since, in the problem, the
vendee paid down payment, it takes it out
of the ambit of Statute of Frauds. The
rescission here must be in the sense of
resolution of the reciprocal obligation
arising from the contract of sale. If
rescinded (resolved) by the vendee on
account of the vendors’ failure to deliver
the thing sold, the parties will go back to
their status prior to the contract. If the
vendor refuses to return the down
payment, then the vendee can file an
action to recover the down payment. If, on
the other hand, the vendor and the vendee
mutually agree to rescind i.e. cancel the
contract, the vendee likewise can file an
action for the recovery of the down
payment on the basis of solution indebiti.
ALTERNATIVE ANSWER:
(E) None of the above. (a) The recovery of
the down payments should be made in the
same action for rescission. Otherwise, it
would be a ground for dismissal under Rule
2, Sec 4 of Rules of Court. (b) Lease of a
real property is covered by the Statute of
Frauds. Furthermore, it also consists of
interest in real property. Hence, it must be
in writing. (Art 1403, Civil Code) (c) A
contract of guaranty is a promise to answer
for the debt of another and hence, it is also
covered by the Statute of Frauds. It must
be in writing before it can be enforced in a
court action. (Art 1403, Civil Code) (d) The
fact that a debtor has unliquidated assets
does not excuse him from paying his debt.
(e) In the technical meaning of rescission
under Art 1191 of the Civil Code will be
adhered to, then there is no absolutely
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
correct answer. Hence, letter E is also a
possible answer.
SECTION 3. - Other Quasi-Contracts
Art. 2164. When, without the knowledge of the
person obliged to give support, it is given by a
stranger, the latter shall have a right to claim the
same from the former, unless it appears that he
gave it out of piety and without intention of being
repaid. (1894a)
Liability; owner who was in the vehicle (1996)
Marcial, who does not know how to drive, has always
been driven by Ben, his driver of ten years whom he had
chosen carefully and has never figured in a vehicular
mishap. One day, Marcial was riding at the back seat of
his Mercedes Benz being driven along EDSA by Ben.
Absorbed in reading a book, Marcial did not notice that
they were approaching the corner of Quezon Avenue,
when the traffic light had just turned yellow. Ben suddenly
stepped on the gas to cross the intersection before the
traffic light could turn red. But, too late. Midway in the
intersection, the traffic light changed, and a Jeepney full
of passengers suddenly crossed the car's path. A
collision between the two vehicles was inevitable. As a
result, several jeepney passengers were seriously
injured. A suit for damages based on culpa aquiliana was
filed against Marcial and Ben, seeking to hold them jointly
and severally liable for such injuries. May Marcial be held
liable? Explain.
SUGGESTED ANSWER:
Marcial may not be liable because under Art. 2184, NCC,
the owner who is in the vehicle is not liable with the driver
if by the exercise of due diligence he could have
prevented the injury. The law does not require the owner
to supervise the driver every minute that he was driving.
Only when through his negligence, the owner has lost an
opportunity to prevent the accident would he be liable
(Caedo v. Ytt Khe Thai, 26 SCRA 410 citing Chapman v.
Underwood and Manlangit v. Mauler, 250 SCRA 560). In
this case, the fact that the owner was absorbed in reading
a book does not conclusively show that he lost the
opportunity to prevent the accident through his
negligence.
ALTERNATIVE ANSWER:
Yes, Marcial should be held liable. Art. 2164. NCC makes
an owner of a motor vehicle solidarily liable with the driver
if, being in the vehicle at the time of the mishap, he could
have prevented it by the exercise of due diligence. The
traffic conditions along EDSA at any time of day or night
are such as to require the observance of utmost care and
total alertness in view of the large number of vehicles
running at great speed. Marcial was negligent in that he
rendered himself oblivious to the traffic hazards by
reading a book instead of focusing his attention on the
road and supervising the manner in which his car was
being driven. Thus he failed to prevent his driver from
attempting to beat the traffic light at the junction of
Quezon Avenue and EDSA, which Marcial, without being
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a driver himself could have easily perceived as a reckless
course of conduct.
Liability; owner who was in the vehicle (2002)
Does the presence of the owner inside the vehicle
causing damage to a third party affect his liability for his
driver’s negligence? Explain (2%)
SUGGESTED ANSWER:
In motor vehicle mishaps, the owner is made solidarily
liable with his driver if he (the owner) was in the vehicle
and could have, by the use of due diligence, prevented
the mishap. (Caedo v. Yu Khe Thai, 26 SCRA 410
[1968]).
Art. 2165. When funeral expenses are borne by a
third person, without the knowledge of those
relatives who were obliged to give support to the
deceased, said relatives shall reimburse the third
person, should the latter claim reimbursement.
(1894a)
Art. 2166. When the person obliged to support an
orphan, or an insane or other indigent person
unjustly refuses to give support to the latter, any
third person may furnish support to the needy
individual, with right of reimbursement from the
person obliged to give support. The provisions of
this article apply when the father or mother of a
child under eighteen years of age unjustly refuses
to support him.
Art. 2167. When through an accident or other cause
a person is injured or becomes seriously ill, and he
is treated or helped while he is not in a condition to
give consent to a contract, he shall be liable to pay
for the services of the physician or other person
aiding him, unless the service has been rendered
out of pure generosity.
Filing of Separate Civil Action; Need for Reservation
(2003)
As a result of a collision between the taxicab owned by A
and another taxicab owned by B, X, a passenger of the
first taxicab, was seriously injured. X later filed a criminal
action against both drivers.
Is it necessary for X to reserve his right to institute a civil
action for damages against both taxicab owners before
he can file a civil action for damages against them? Why
SUGGESTED ANSWER:
It depends. If the separate civil action is to recover
damages arising from the criminal act, reservation is
necessary. If the civil action against the taxicab owners is
based on culpa contractual, or on quasi-delict, there is no
need for reservation.
ALTERNATIVE ANSWER:
No, such reservation is not necessary. Under Section 1 of
Rule 111 of the 2000 Rules on Criminal Procedure, what
is “deemed instituted” with the criminal action is only the
action to recover civil liability arising from the crime or ex
delicto. All the other civil actions under Articles 32, 33, 34
and 2176 of the New Civil Code are no longer “deemed
instituted”, and may be filed separately and prosecuted
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
independently even without any reservation in the
criminal action (Section 3, Rule 111, Ibid). The failure to
make a reservation in the criminal action is not a waiver
of the right to file a separate and independent civil action
based on these articles of the New Civil Code
(Casupanan v. Laroya GR No. 145391, August 26, 2002).
Art. 2168. When during a fire, flood, storm, or other
calamity, property is saved from destruction by
another person without the knowledge of the owner,
the latter is bound to pay the former just
compensation.
Art. 2169. When the government, upon the failure of
any person to comply with health or safety
regulations concerning property, undertakes to do
the necessary work, even over his objection, he
shall be liable to pay the expenses.
Art. 2170. When by accident or other fortuitous
event, movables separately pertaining to two or
more persons are commingled or confused, the
rules on co-ownership shall be applicable.
Art. 2171. The rights and obligations of the finder of
lost personal property shall be governed by Articles
719 and 720.
Art. 2172. The right of every possessor in good faith
to reimbursement for necessary and useful
expenses is governed by Article 546.
Art. 2173. 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. 2174. 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. 2175. Any person who is constrained to pay the
taxes of another shall be entitled to reimbursement
from the latter.
TORTS AND
DAMAGES
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NOTE: Chapter 2, on Quasi-Delicts is still included dolo
in the topic of Extra-Contractual Obligations (Title (deliberate,
XVII). malicious, in
bad faith)
Proof needed
CHAPTER 2 Preponderanc Preponderance Proof
QUASI-DELICTS e of evidence of evidence beyond
reasonable
Art. 2176. Whoever by act or omission causes doubt
damage to another, there being fault or negligence, Defense available
is obliged to pay for the damage done. Such fault or Exercise of Exercise of
negligence, if there is no pre-existing contractual extraordinary diligence of a
relation between the parties, is called a quasi-delict diligence (in good father of a
and is governed by the provisions of this Chapter. contract of family in the
(1902a) carriage), selection and
force majeure supervision of
employees
ELEMENTS OF QUASI-DELICTS/TORTS Pre-existing contract
1. Act or omission; There is pre- No pre-existing No pre-
2. Damage or injury is caused to another; existing contract existing
3. Fault or negligence is present; contract contract
4. There is no pre-existing contractual Burden of proof
relations between the parties; Contractual Victim prove
5. Causal connection between damage done party proved the following –
and act/omission. the following – a. Negligence; Accused is
a. Existence b. Causal presumed
NEGLIGENCE: of connection innocent
contract; between until contrary
Art. 1173. The fault or negligence of the obligor
consists in the omission of that diligence which is b. Breach negligence is proved
required by the nature of the obligation and and
corresponds with the circumstances of the persons, damage
of the time and of the place. When negligence shows done
bad faith, the provisions of Articles 1171 and 2201,
paragraph 2, shall apply.
QUASI-DELICT DELICT
If the law or contract does not state the diligence
which is to be observed in the performance, that Source of obligation is
which is expected of a good father of a family shall injury by fault or Crime
be required. negligence
Intent is required except
2012 Bar Exam Question No intent in criminal negligence
50. The following are the elements of quasi- (art. 365)
delict, except: Private right violated Public right violated
a) Act or omission b) Fault/negligence c) Not always liable for
Damage/injury d) Pre-existing contract damages as when the
there is always liability crime does not involve
for damages private interest (like
KINDS OF NEGLIGENCE illegal possession of
1. Quasi delict (art. 2176, NCC); deadly weapon)
2. Criminal Negligence (art. 365, RPC); Penalty is civil only There may be
3. Contractual negligence (arts. 1170 – 1174). imprisonment or fine
Liability of employer is
solidary (direct and Subsidiary
CONTRACT QUASI- DELICT primary)
DELICT Defense of due
Vinculum juris diligence in the Not a defense
Negligent act or Act or selection and
omission omission supervision of
(culpa, committed employees is available
Contract imprudence) by means of
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The action of the child will not necessarily
be judged according to the standard of an
CULPA CULPA CULPA adult. But if the minor is mature enough to
AQUILIANA CONTRACTUAL CRIMINAL understand and appreciate the nature and
Negligence is consequences of his actions, he will be
Negligence is merely an Negligence is considered negligent if he fails to exercise
substantive incident of also due care and precaution in the commission
and performance of substantive of such acts.
independent an obligation
There may or There is a pre- The law fixes no arbitrary age at which a
may not be a existing No minor can be said to have the necessary
pre-existing contractual contractual capacity to understand and appreciate the
contractual relation relation nature and consequences of his acts
relation (Taylor vs. Meralco, 16 Phil. 8.
Source of Source of
Source of obligation is the obligation is NOTE: Absence of negligence of the child
obligation is breach the right of may not excuse the parents from their
the negligence contractual the state to vicarious liability under art. 2180, NCC or
itself relation punish for art. 221, FC.
breach of
public order 2. PHYSICAL DISABILITY
Negligence Proof of existing Negligence
must be contract and its must be GR: A weak or accident prone person must
proved by breach is prima proved by come up to the standard of a reasonable
preponderance facie sufficient to proof beyond man, otherwise, he will be considered as
of evidence warrant recovery reasonable negligent.
doubt
Diligence in Diligence in the Diligence in Exception: If the defect amounts to a real
the selection selection and the selection disability, the standard of the conduct is
and supervision is and that of a reasonable person under the like
supervision of not a defense supervision is disability.
employees is a not a defense.
defense
Liability of Liability of Liability of 3. EXPERTS AND PROFESSIONALS
employer is employer is employer is
direct and solidary subsidiary They should exibit the care and skill of one
primary who is ordinarily skilled in the particular
field that he is in; the rule regarding experts
TESTS OF NEGLIGENCE is applicable not only to professionals who
have undergone formal education
1. Did the defendant in doing the alleged (Fernando vs. CA).
negligent act use reasonable care and
caution which an ordinary prudent person 4. NATURE OF ACTIVITY
would have used in the same situation?
There are activities which by nature impose
If not, then he is guilty of negligence. duties to exercise a higher degree of
diligence (ex. Banks and Common Carriers
2. Could a prudent man, in the case under – extraordinary diligence, Doctors/medical
consideration, foresee harm as a result of personnel – utmost diligence).
the course pursued?
5. INTOXICATION
If so, it is the duty of the actor to take
precautions to guard against harm. GR: Mere intoxication is not negligence nor
establishes want of ordinary care. But it
may be considered to prove negligence
SPECIAL RULES (Wright vs. Manila Electric).

1. CHILDREN Exception: Under art. 2185, NCC it is

presumed that a person driving a motor

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vehicle has been negligent if at the time of
the mishap, he was violating any traffic
regulation.
There must be causal connection between
the presumed negligence and the violation
of the law or traffic regulation (Tison vs.
Pomasin, GR No. 173180, Aug 24. 24,
2011).
6. INSANITY
An insane person is exempt from liability.
However, by express provision of law, there
may be civil liability even when the
perpetrator is held to be exempt from
criminal liability. The insanity of a person
does not excuse him or his guardian from
liability based on quasi-delict (art. 2180 and
2182, NCC).
WHAT MUST BE PROVED:
1. Negligence – plaintiff must prove
negligence of defendant.
Exceptions:
a. In cases where negligence is
presumed for imputed by law – but
this is rebuttable by contrary proof.
b. When principle of res ipsa loquitor
applies – the thing speaks for itself.
It is grounded on the difficulty in
proving thru competent evidence,
and public policy considerations.
Like when a surgical instrument is
left inside the body of the person
subjected to surgical operation
2. Damage/injury
3. Causal connection between negligence
and damage – defendant’s negligence
must be the proximate cause of the injury
sustained by the plaintiff to enable plaintiff
to recover. Thus, if plaintiff’s own conduct is
the cause of the injury there can be no
recovery.
Quasi-Delict; Mismanagement of Depositor’s Account
(2006)
Tony bought a Ford Expedition from a car dealer in
Muntinlupa City. As payment, Tony issued a check drawn
against his current account with Premium Bank. Since he
has a good reputation, the car dealer allowed him to
immediately drive home the vehicle merely on his
assurance that his check is sufficiently funded. When the
car dealer deposited the check, it was dishonored on the
ground of "Account Closed." After an investigation, it was
found that an employee of the bank misplaced Tony's
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
account ledger. Thus, the bank erroneously assumed that
his account no longer exists. Later it turned out that
Tony's account has more than sufficient funds to cover
the check. The dealer however, immediately filed an
action for recovery of possession of the vehicle against
Tony for which he was terribly humiliated and
embarrassed. Does Tony have a cause of action against
Premium Bank? Explain. (5%)
SUGGESTED ANSWER:
Yes, Tony may file an action against Premium Bank for
damages under Art. 2176. Even if there exists a
contractual relationship between Tony and Premium
Bank, an action
Court has consistently ruled that the act that breaks the
contract may also be a tort. There is a fiduciary
relationship between the bank and the depositor,
imposing utmost diligence in managing the accounts of
the depositor. The dishonor of the check adversely
affected the credit standing of Tony, hence, he is entitled
to damages (Singson v. BPI,
G.R. No. L-24932, June 27, 1968; American Express
International, Inc. v. IAC, G.R. No. 72383, November 9,
1988; Consolidated Bank and Trust v. CA, G.R. No. L-
70766 November 9,1998).
Art. 2177. Responsibility for fault or negligence
under the preceding article is entirely separate and
distinct from the civil liability arising from negligence
under the Penal Code. But the plaintiff cannot
recover damages twice for the same act or
omission of the defendant. (n)
Art. 2178. The provisions of Articles 1172 to 1174
are also applicable to a quasi-delict. (n)
Art. 1172. Responsibility arising from negligence in
the performance of every kind of obligation is also
demandable, but such liability may be regulated by
the courts, according to the circumstances. (1103)
Art. 1173. The fault or negligence of the obligor
consists in the omission of that diligence which is
required by the nature of the obligation and
corresponds with the circumstances of the persons,
of the time and of the place. When negligence shows
bad faith, the provisions of Articles 1171 and 2201,
paragraph 2, shall apply.
If the law or contract does not state the diligence
which is to be observed in the performance, that
which is expected of a good father of a family shall
be required. (1104a)
Art. 1174. Except in cases expressly specified by the
law, or when it is otherwise declared by stipulation,
or when the nature of the obligation requires the
assumption of risk, no person shall be responsible
for those events which could not be foreseen, or
which, though foreseen, were inevitable.
Art. 2179. When the plaintiff's own negligence was
the immediate and proximate cause of his injury, he
cannot recover damages. But if his negligence was
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only contributory, the immediate and proximate
cause of the injury being the defendant's lack of
due care, the plaintiff may recover damages, but
the courts shall mitigate the damages to be
awarded. (n)
PROXIMATE CAUSE
The adequate and efficient cause which in the
natural order of events and under the particular
circumstances surrounding the case, would
naturally produce the event.
DEFENSES
1. Contributory Negligence – contributory
negligence of plaintiff will mitigate the liability of
the defendant. If the negligence of the plaintiff is
the proximate cause of injury, there is no
recovery.
2. Concurrent Negligence – if both parties are
equally negligent, the courts will leave them as
they are, there can be no recovery.
3. Doctrine of Last Clear Chance – even though
a person’s own acts may have placed him in a
position of peril and an injury results, the injured
is entitled to recover if the defendant thru the
exercise of reasonable care and prudence
might have avoided injurious consequences to
the plaintiff. This defense is available only in an
action by the driver or owner of one vehicle
against the driver or owner of the motor vehicle
involved.
Requisites:
a. Plaintiff was in a possession of
danger by his own negligence;
b. Defendant knew of such position of
the plaintiff;
c. Defendant had the last clear
chance to avoid accident by
exercise of ordinary care but failed
to exercise such last clear chance;
and
d. Accident occurred as proximate
cause of such failure.
Doctrine of Discovered Peril (Last Clear
Chance) (2007)
No.III. Explain the following concepts and
doctrines and give an example of each:
(B). doctrine of discovered peril (last clear
chance) (5%) SUGGESTED ANSWER: The
doctrine of last clear chance states that
where the plaintiff was guilty of prior or
antecedent negligence, but the defendant,
who had the ultimate opportunity to avoid
the impending harm failed to do so, it is
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
the defendant who is liable for all the
consequences of the accident
notwithstanding the prior negligence of the
plaintiff. An example is where a person was
riding a pony on a bridge and improperly
pulled the pony to the wrong side when he
saw a car coming. The driver of the car did
not stop or change direction, and nearly hit
the horse, and, the frightened animal
jumped to its death. The driver of the car is
guilty of negligence because he had a fair
opportunity to avoid the accident and
failed to avail himself of that opportunity.
He is liable under the doctrine of last clear
chance (Picart v. Smith, 37 Phil. 809,
1918).
Who may invoke: PLAINTIFF
Doctrine is inapplicable to –
a. Joint tortfeasors;
b. Defendants concurrently negligent;
c. As against 3rd persons.
4. Emergency Rule – one who suddenly finds
himself in a place of danger, and is required to
act without time to consider the best means that
may be adopted to avoid the impending danger,
is not guilty of negligence, if he fails to adopt
what subsequently and upon reflection may
appear to have been a better method, unless
the emergency in which he finds is due to his
own fault, negligence or carelessness.
Note: Applicable only to situations that are
sudden and unexpected such as to deprive
actor of all opportunity for deliberation
(absence of foreseeability); the action shall
still be judged by the standard of the
ordinary prudent man.
FACTORS TO CONSIDER:
a. Gravity of the harm to be avoided.
b. Alternative courses of action – if the
alternative presented to the actor is too
costly, the harm that may result may still be
considered unforeseeable to a reasonable
man.
c. Social value and utility of the action –
the act which subjects an innocent person
to an unnecessary risk is a negligent act if
the risk outweighs the advantage accruing
to the actor and even to the innocent
person himself.
d. Persons exposed to the risk – a higher
degree of diligence is required if the person
involved is a child.
447
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5. DOCTRINE OF ASSUMPTION OF RISK
(volenti non fit injuria)
Requisites:
a. Intentional exposure to a known
danger;
b. One who voluntarily assumed the risk
of an injury from a known danger
cannot recover in an action for
negligence or an injury is incurred;
c. Plaintiff’s acceptance of risk (by
law/contract/nature of obligation) has
erased defendant’s duty so that his
negligence is not a legal wrong;
d. Applies to all known danger.
6. Due Diligence – diligence required by
law/contract depends on circumstances of
persons, places and things.
7. Fortuitous Event – no person shall be
responsible for those events which cannot be
foreseen, or which though foreseen, is
inevitable.
Requisites:
a. The cause of the unforeseen and
unexpected occurrence, or of failure of
the debtor to comply with his obligation,
must be independent of human will;
b. It must be impossible to foresee the
event which constitutes caso fortuito or
if it can be foreseen it must be
inevitable;
c. The occurrence must be such as to
render it impossible for the debtor to
fulfill his obligation in a normal manner;
d. The obligor must be free from any
participation in the aggravation of the
injury resulting to the creditor.
GR: Fortuitous event is a complete defense and
a person is not liable if the cause of the damage
is fortuitous.
Exception: It is merely a partial defense and
the courts may mitigate the damages if the loss
would have resulted in any event (art. 2215. [5],
NCC).
NOTE: A person may still be liable for a
fortuitous event if such person made an
assumption of risk.
8. Law – specific provision of law.
9. The Principle of Damnum Absque Injuria – a
principle that involves damage without
injury, therefore no liability is incurred;
there is no legal injury.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
10. Exercise of the diligence of a good father of
a family in the selection and supervision of
employees
.
11. Prescription –
a. Injury to the rights of the plaintiff/quasi-
delict – 4 years
b. Defamation – 1 year
c. When there is no specific provision,
must be counted from the day may be
brought.
12. Proscription against double recovery.
13. Action or omission is not the proximate
cause of the damage.
14. Other grounds – Grounds for Motion to
Dismiss under the Rules of Court.
Art. 2180. The obligation imposed by Article 2176 is
demandable not only for one's own acts or
omissions, but also for those of persons for whom
one is responsible.
The father and, in case of his death or incapacity,
the mother, are responsible for the damages
caused by the minor children who live in their
company.
Guardians are liable for damages caused by the
minors or incapacitated persons who are under
their authority and live in their company.
The owners and managers of an establishment or
enterprise are likewise responsible for damages
caused by their employees in the service of the
branches in which the latter are employed or on the
occasion of their functions.
Employers shall be liable for the damages caused
by their employees and household helpers acting
within the scope of their assigned tasks, even
though the former are not engaged in any business
or industry.
The State is responsible in like manner when it acts
through a special agent; but not when the damage
has been caused by the official to whom the task
done properly pertains, in which case what is
provided in Article 2176 shall be applicable.
Lastly, teachers or heads of establishments of arts
and trades shall be liable for damages caused by
their pupils and students or apprentices, so long as
they remain in their custody.
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The responsibility treated of in this article shall
cease when the persons herein mentioned prove
that they observed all the diligence of a good father
of a family to prevent damage. (1903a)
PERSONS LIABLE FOR QUASI—DELICT
1. Tortfeasor – whoever by act or omission
causes damage to another, there being fault or
negligence is obliged to pay for the damage
done.
2. Persons vicariously liable – the obligation
imposed in 2176 is demandable not only for
one’s own act or omission but also for those
persons from whom one is responsible.
VICARIOUS LIABILITY
The law on imputed negligence; a person who
himself is not negligent is made liable for the
negligent conduct of another.
Liability is direct and primary.
Person vicariously liable is impleaded in the
complaint.
NOTE: Vicarious liability is not governed by the
doctrine of respondeat superior. Employers or
parents are made liable not only because of the
negligent or wrongful act of the person for
whom they are responsible but also because of
their own negligence (like he is negligent in the
selection and supervision of his employees).
Exception: respondeat superior applies in –
a. Liability of employers under article 103,
RPC;
b. Liability of a partnership for the tort
committed by a partner.
PERSONS VICARIOUSLY LIABLE:
1. Parents
Other persons that may be held liable other
than the parents: (only in proper cases)
a. Those exercising substitute
parental authority;
b. Surviving grandparents;
c. Oldest sibling, over 21 years old
unless unfit or unqualified;
d. Child’s actual custodian, over 21
years old unless unfit or
unqualified.
2. Guardian – liable for acts of minor or
incapacitated persons under their authority
who live in their company.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
3. Owners and managers of establishment/
enterprise – liable for damages caused by
their employees in the service of the
branches in which the latter are employed
or on the occasion of their function.
4. Employers – employees and house
helpers who are acting within their assigned
task.
Defenses available to employers –
a. Due diligence in the selection and
supervision of employees;
b. Act or omission was made outside
working hours and in violation of
company’s rules and regulations.
5. State – when acting through special agent.
SPECIAL AGENT
A public officer performing acts foreign to
his ordinary duties.
6. School administrator, teacher
Death Indemnity (2009) No. X. Rommel’s
private car, while being driven by the regular
family driver, Amado, hits a pedestrian
causing the latter’s death. Rommel is not in
the car when the incident happened. (A). Is
Rommel liable for damages to the heirs of the
deceased? Explain. (2%) SUGGESTED
ANSWER: Yes, Rommel may be held liable
for damages if he fails to prove that he
exercised the diligence of a good father of a
family (Art. 2180, par 5, NCC) in selecting
and supervising his family driver. The
owner is presumed liable unless he proves
the defense of diligence. If the driver was
performing his assigned task when the
accident happened, Rommel shall be
solidarily liable with the driver.
In case the driver is convicted of reckless
imprudence and cannot pay the civil
liability, Rommel is subsidiarily liable for
the damage awarded against the driver and
the defense of diligence is not available.
(B).Would your answer be the same if Rommel
was in the car at the time of the accident?
Explain. (2%) SUGGESTED ANSWER: Yes, my
answer would be the same. Rommel, who
was in the car, shall be liable for damages if
he could have prevented the misfortune by
the use of due diligence in supervising his
driver but failed to exercise it (Art. 2184,
NCC). In such case, his liability is solidary
with his driver. ALTERNATIVE ANSWER:
Yes, my answer will be the same except
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that in such case the liability of the owner
is not presumed. When the owner is inside
the vehicle, he becomes liable only when it
is shown that he could have prevented the
misfortune by the use of due diligence (Art.
2184, NCC). For the owner to be held liable,
the burden of proving that he could have
prevented the misfortune rests on the
shoulder of the victim.
2012 Bar Exam Question
77. The liability of the school, its
administrators and teachers, or the individual,
entity or institution engaged in child care over
the minor child or damage caused by the acts
or omissions of the unemancipated minor
while under their supervision, instruction or
custody shall be: a) Joint and subsidiary b)
Principal and solidary c) Principal and joint
d) Subsidiary and solidary.
and supervision of peter would not be a material issue
since the conviction of Peter would result in a subsidiary
liability where the defense would not be available by the
employer.
In the case of Paul, since the basis of subsidiary liability
is the pater familias rule under Art. 2180, the defense of
selection and supervision of the employee would be a
valid defense.
ALTERNATIVE ANSWER:
C. In the case of Peter, if he were to be considered an
The doctrine of VICARIOUS LIABILITY is that which
employee, the exercise of due diligence in the selection
and supervision of Peter would not be a material issue
since the conviction of Peter would result in a subsidiary
liability where the defense would not be available by the
employer.
In the case of Paul, since he was in the performance of
his work at the time the incident occurred, the school may
be held subsidiarily liable not because of the conviction of
Peter, but because of the negligence of Paul under Art.
2180.

Vicarious Liability (2001)

After working overtime up to midnight, Alberto, an
Vicarious Liability (1991)
executive of an insurance company drove a company
Romano was bumped by a minivan owned by the
vehicle to a favorite Videoke bar where he had some
Solomon School of Practical Arts (SSPA). The minivan
drinks and sang some songs with friends to "unwind". At
was driven by Peter, a student assistant whose
2:00 a.m., he drove home, but in doing so, he bumped a
assignment was to clean the school passageways daily
tricycle, resulting in the death of its driver. May the
one hour before and one hour after regular classes, in
insurance company be held liable for the negligent act of
exchange for free tuition. Peter was able to drive the
Alberto? Why?
school vehicle after persuading the regular driver, Paul, to
SUGGESTED ANSWER:
turn over the wheel to him (Peter). Romano suffered
The insurance company is not liable because when the
serious physical injuries. The accident happened at night
accident occurred, Alberto was not acting within the
when only one headlight of the vehicle was functioning
assigned tasks of his employment.
and Peter only had a student driver's permit. As a
It is true that under Art. 2180 (par. 5), employers are
consequence, Peter was convicted in the criminal case.
liable for damages caused by their employees who were
Thereafter, Romano sued for damages against Peter and
acting within the scope of their assigned tasks. However,
SSPA. a) Will the action for damages against Peter and
the mere fact that Alberto was using a service vehicle of
SSPA
the employer at the time of the injurious accident does
prosper? b) Will your answer be the same if, Paul, the
not necessarily mean that he was operating the vehicle
regular
within the scope of his employment. In Castilex Industrial
driver, was impleaded as party defendant for allowing
Corp. v. Vasquez Jr (321 SCRA393 [1999]). the Supreme
Peter to drive the minivan without a regular driver's
Court held that notwithstanding the fact that the employee
license. c) Is the exercise of due diligence in the selection
did some overtime work for the company, the former was,
and
nevertheless, engaged in his own affairs or carrying out a
supervision of Peter and Paul a material issue to be
personal purpose when he went to a restaurant at 2:00
resolved in this case?
a.m. after coming out from work. The time of the accident
SUGGESTED ANSWER:
(also
A. Yes. It will prosper (Art, 2180) because at the time he
2:00 a. m.) was outside normal working hours.
drove the vehicle, he was not performing his assigned
ALTERNATIVE ANSWER:
tasks as provided for by Art. 2180. With respect to SSPA,
The insurance company is liable if Alberto was negligent
it is not liable for the acts of Peter because the latter was
in the operation of the car and the car was assigned to
not an employee as held by Supreme Court in Filamer
him for the benefit of the insurance company, and even
Christian Institute vs. CA. (190 SCRA 485). Peter belongs
though he was not within the scope of his assigned tasks
to a special category of students who render service to
when the accident happened. In one case decided by the
the school in exchange for free tuition fees.
Supreme Court, where an executive of a pharmaceutical
B. I would maintain the same answer because the
company was given the use of a company car, and after
incident did not occur while the employee was in the
office hours, the executive made personal use of the car
performance of his duty as such employee. The incident
and met an accident, the employer was also made liable
occurred at night time, and in any case, there was no
under Art. 2180 of the Civil Code for the injury caused by
indication in the problem that he was performing his
the negligent operation of the car by the executive, on the
duties as a driver.
ground that the car which caused the injury was assigned
C. In the case of Peter, if he were to be considered as
to the executive by the employer for the prestige of the
employee, the exercise of due diligence in the selection

JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 450

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company. The insurance company was held liable even
though the employee was not performing within the scope
of his assigned tasks when the accident happened
[Valenzuela v. CA, 253 SCRA 3O3 (1996)].
Vicarious Liability (2002)
Explain the concept of vicarious liability in quasi-delicts.
(1%)
SUGGESTED ANSWER:
renders a person liable for the negligence of others for
whose acts or omission the law makes him responsible
on the theory that they are under his control and
supervision.
Vicarious Liability (2004)
OJ was employed as professional driver of MM Transit
bus owned by Mr. BT. In the course of his work, OJ hit a
pedestrian who was seriously injured and later died in the
hospital as a result of the accident. The victim’s heirs
sued the driver and the owner of the bus for damages. Is
there a presumption in this case that Mr. BT, the owner,
had been negligent? If so, is the presumption absolute or
not? Explain. (5%)
SUGGESTED ANSWER:
Yes, there is a presumption of negligence on the part of
the employer. However, such presumption is rebuttable.
The liability of the employer shall cease when they prove
that they observed the diligence of a good father of a
family to prevent damage (Article 2180, Civil Code).
When the employee causes damage due to his own
negligence while performing his own duties, there arises
the juris tantum presumption that the employer is
negligent, rebuttable only by proof of observance of the
diligence of a good father of a family (Metro Manila
Transit v. CA, 223 SCRA 521 [1993]; Delsan Transport
Lines v, C&tA Construction, 412 SCRA 524 2003).
Likewise, if the driver is charged and convicted in a
criminal case for criminal negligence, BT is subsidiarily
liable for the damages arising from the criminal act.
Vicarious Liability (2006)
Arturo sold his Pajero to Benjamin for P1 Million.
Ben¬jamin took the vehicle but did not register the sale
with the Land Transportation Office. He allowed his son
Carlos, a minor who did not have a driver's license, to
drive the car to buy pan de sal in a bakery. On the way,
Carlos driving in a reckless manner, sideswiped Dennis,
then riding a bicycle. As a result, he suffered serious
physical injuries. Dennis filed a criminal complaint against
Carlos for reckless imprudence resulting in serious
physical injuries.
1. Can Dennis file an independent civil action against
Carlos and his father Benjamin for damages based on
quasi-delict? Explain. (2,5%)
SUGGESTED ANSWER: Yes, Dennis can file an
independent civil action against Carlos and his father for
damages based on quasi-delict there being an act or
omission causing damage to another without contractual
obligation. Under Section 1 of Rule 111 of the 2000 Rules
on Criminal Procedure, what is deemed instituted with the
criminal action is only the action to recover civil liability
arising from the act or omission punished by law. An
action based on quasi-delict is no longer deemed
instituted and may be filed separately [Section 3, Rule
111, Rules of Criminal Procedure].
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
2. Assuming Dennis' action is tenable, can Benjamin
raise the defense that he is not liable because the vehicle
is not registered in his name? Explain. (2.5%)
SUGGESTED ANSWER: No, Benjamin cannot raise the
called “oncomouse” in Manila? What will be your advice
to defense that the vehicle is not registered in his name.
His liability, vicarious in character, is based on Article
2180 because he is the father of a minor who caused
damage due to negligence. While the suit will prosper
against the registered owner, it is the actual owner of the
private vehicle who is ultimately liable (See Duavit v. CA,
G.R. No. L-29759, May 18, 1989). The purpose of car
registration is to reduce difficulty in identifying the party
liable in case of accidents (Villanueva v. Domingo, G.R.
No. 144274, September 14, 2004).
Liability; Special Parental Authority (2010)
No.XII. On May 5, 1989, 16-year old Rozanno,
who was issued a student permit, drove to
school a car, a gift from his parents. On even
date, as his class was scheduled to go on a
field trip, his teacher requested him to
accommodate in his car, as he did, four (4) of
his classmates because the van rented by the
school was too crowded. On the way to a
museum which the students were scheduled
to visit, Rozanno made a wrong maneuver,
causing a collision with a jeepney. One of his
classmates died. He and the three (3) others
were badly injured. (A). Who is liable for the
death of Rozanno’s classmate and the injuries
suffered by Rozanno and his 3 other
classmates? Explain. (2%)
SUGGESTED ANSWER: At the time the
incident occurred in May 1989, Rozanno
was still a minor. Being a minor, Art 218 of
the Family Code applies. Pursuant to Art
218, the school, its administrators and
teachers shall be liable for the acts of minor
Rozanno because of the special parental
authority and responsibility that they
exercise over him. The authority applies to
all authorized activities, whether inside or
outside the premises of the school, entity
or institution. The field trip on which
occasion Rozanno drove the car, was an
authorized activity, and , thus, covered by
the provision. Furthermore, the parents of
Rozanno are subsidiarily liable pursuant to
Art 219 (FC), and principally liable under
Art 221 (FC), if they are negligent.
(B). How about the damage to the jeepney?
Explain. (2%)
SUGGESTED ANSWER: With respect to the
damages caused to the jeepney, only
Rozanno should be held liable because his
negligence or tortuous act was the sole,
proximate and immediate cause thereof.
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(C). Under the same facts, except the date of
occurrence of the incident, this time in mid-
1994, what would be your answer? Explain.
(2%) SUGGESTED ANSWER: Since Rozanno
was 16 years old in 1989, if the incident
happened sometime in the middle of 1994,
Rozanno have been 21 years old at the
time. Hence, he was already of legal age.
The law reducing the age of majority to 18
years took effect in December 1989.
Being of legal age, articles 218, 219, and
221 of the Family Code are no longer
applicable. In such case, only Rozanno will
be personally responsible for all the
consequences of his act unless his school
or his parents were themselves also
negligent and such negligence contributed
to the happening of the incident. In that
event, the school or his parents are not
liable under Art 218, 218 or 221 of the
Family Code, but will be liable under
general provision on the Civil Code on
quasi-delict.
2011 Bar Exam Question
(2) The authority that school administrators
exercise over school children under their
supervision, instruction, or custody is called
(A) legal parental authority. (B) substitute
parental authority. (C) ordinary parental
authority. (D) special parental authority.
Vicarious Liability; Public Utility (2000)
Silvestre leased a car from Avis-Rent-A-Car Co. at the
Mactan International Airport. No sooner had he driven the
car outside the airport when, due to his negligence, he
bumped an FX taxi owned and driven by Victor, causing
damage to the latter in the amount of P100,000.00. Victor
filed an action for damages against both Silvestre and
Avis, based on quasi-delict. Avis filed a motion to dismiss
the complaint against it on the ground of failure to state a
cause of action. Resolve the motion. (3%)
SUGGESTED ANSWER:
The motion to dismiss should be granted, AVIS is not the
employer of Silvestre; hence, there is no right of action
against AVIS under Article 2180 of the Civil Code. Not
being the employer, AVIS has no duty to supervise
Silvestre. Neither has AVIS the duty to observe due
diligence in the selection of its customers. Besides, it was
given in the problem that the cause of the accident was
the negligence of Silvestre.
ALTERNATIVE ANSWER:
The motion should be denied. Under the Public Service
Law, the registered owner of a public utility is liable for
the damages suffered by third persons through the use of
such public utility. Hence, the cause of action is based in
law, the Public Service Law.
INTELLECTUAL PROPERTY
Intellectual Creation (2004)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Dr. ALX is a scientist honored for work related to the
human genome project. Among his pioneering efforts
concern stem cell research for the cure of Alzheimer’s
disease. Under corporate sponsorship, he helped
develop a microbe that ate and digested oil spills in the
sea.
Now he leads a college team for cancer research in MSS
State. The team has experimented on a mouse whose
body cells replicate and bear cancerous tumor. Called
“oncomouse”, it is a life-form useful for medical research
and it is a novel creation. Its body cells do not naturally
occur in nature but are the product of man’s intellect,
industry and ingenuity. However, there is a doubt
whether local property laws and ethics would allow rights
of exclusive ownership on any life-form. Dr. ALX needs
your advice: (1) whether the reciprocity principle in private
international law could be applied in our jurisdiction; and
(2) whether there are legal and ethical reasons that could
frustrate his claim of exclusive ownership over the life-
form him? (5%)
SUGGESTED ANSWER:
(1) The reciprocity principle in private international law
may be applied in our jurisdiction. Section 3 of R.A. 8293,
the Intellectual Property Code, provides for reciprocity, as
follows: "Any person who is a national, or who is
domiciled, or has a real and effective industrial
establishment in a country which is a party to any
convention, treaty or agreement relating to intellectual
property rights or the repression of unfair competition, to
which the Philippines is also a party, or extends
reciprocal rights to nationals of the Philippines by law,
shall be entitled to benefits to the extent necessary to
give effect to any provision of such convention, treaty or
reciprocal law, in addition to the rights to which any owner
of an intellectual property right is otherwise entitled by
this Act. (n)" To illustrate: the Philippines may refrain from
imposing a requirement of local incorporation or
establishment of a local domicile for the protection of
industrial property rights of foreign nationals (citizens of
Canada, Switzerland, U.S.) if the countries of said foreign
nationals refrain from imposing said requirement on
Filipino citizens.
ALTERNATIVE ANSWER:
Reciprocity principle cannot be applied in our jurisdiction
because the Philippines is a party to the TRIPS
agreement and the WTO. The principle involved is the
most-favored nation clause which is the principle of non-
discrimination. The protection afforded to intellectual
property protection in the Philippines also applies to other
members of the WTO. Thus, it is not really reciprocity
principle in private international law that applies, but the
most-favored nation clause under public international law.
(2) There is no legal reason why "oncomouse" cannot be
protected under the law. Among those excluded from
patent protection are "plant varieties or animal breeds, or
essentially biological process for the production of plants
and animals" (Section 22.4 Intellectual Property Code,
R.A. No. 8293). The "oncomouse" in the problem is not
an essentially biological process for the production of
animals. It is a real invention because its body cells do
not naturally occur in nature but are the product of man's
ingenuity, intellect and industry.
The breeding of oncomouse has novelty, inventive step
and industrial application. These are the three requisites
of patentability. (Sec. 29, IPC)
452
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There are no ethical reasons why Dr. ADX and his
college team cannot be given exclusive ownership over
their invention. The use of such genetically modified
mouse, useful for cancer research, outweighs
considerations for animal rights.
There are no legal and ethical reasons that would
frustrate Dr. ALX's claim of exclusive ownership over
"oncomouse". Animals are property capable of being
appropriated and owned'. In fact, one can own pet dogs
or cats, or any other animal. If wild animals are capable of
being owned, with more reason animals technologically
enhanced or corrupted by man's invention or industry are
susceptible to exclusive ownership by the inventor.
ALTERNATIVE ANSWER:
The oncomouse is a higher life form which does not fall
within the definition of the term "invention". Neither may it
fall within the ambit of the term "manufacture" which
usually implies a non-living mechanistic product. The
oncomouse is better regarded as a "discovery" which is
the common patrimony of man.
ALTERNATIVE ANSWER:
The "oncomouse" is a non-patentable invention. Hence,
cannot be owned exclusively by its inventor. It is a
method for the treatment of the human or animal body by
surgery or therapy and diagnostic methods practiced on
said bodies are not patentable under Sec. 22 of the IPC.
TEACHER’S LIABILITY
The basis of the teacher’s liability is the principle of
loco parentis (stand in place of parents). So long as
the students remain in the protective and
supervisory capacity of teachers, the latter shall be
deemed to have custody over the students. It is not
necessary for the students to board and live with
the teachers so that there can be custody over
them
SCHOOL’S LIABILITY
GR: The school itself is not liable as party
defendant.
Exceptions:
1. Art. 218, FC –
Art. 218. The school, its administrators and
teachers, or the individual, entity or institution
engaged in child care shall have special
parental authority and responsibility over the
minor child while under their supervision,
instruction or custody.
Authority and responsibility shall apply to all
authorized activities whether inside or outside
the premises of the school, entity or institution.
Art. 219. Those given the authority and
responsibility under the preceding Article shall
be principally and solidarily liable for damages
caused by the acts or omissions of the
unemancipated minor. The parents, judicial
guardians or the persons exercising substitute
parental authority over said minor shall be
subsidiarily liable.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
The respective liabilities of those referred to in
the preceding paragraph shall not apply if it is
proved that they exercised the proper
diligence required under the particular
circumstances.
All other cases not covered by this and the
preceding articles shall be governed by the
provisions of the Civil Code on quasi-delicts.
2. St. Francis ruling – school’s liability as
employer.
3. PSBA ruling – school’s liability based on
contract; therefore –
a. If culprit is a teacher, follow St.
Francis Ruling – sue school as
employer.
b. If culprit is a stranger, follow PSBA
ruling – sue school based on
contract.
c. If culprit is a student, apply art.
2180, NCC.
Liability; Employer; Damage caused by Employees
(1997)
a) When would an employer's liability for damage, caused
by an employee in the performance of his assigned
tasks, be primary and when would it be subsidiary in
nature? b) Would the defense of due diligence in the
selection and
supervision of the employee be available to the
employer in both instances? SUGGESTED ANSWER::
(a) The employer's liability for damage based on culpa
aquiliana under Art, 2176 and 2180 of the Civil Code is
primary; while that under Art. 103 of the Revised Penal
Code is subsidiary.
(b) The defense of diligence in the selection and
the vehicle at the time of the accident, be held solidarily
supervision of the employee under Article 2180 of the
Civil Code is available only to those primarily liable
thereunder, but not to those subsidiarily liable under
Article 103 of the Revised Penal Code (Yumul vs.
Juliano, 72 Phil. 94).
Quasi-Delict (2005)
Under the law on quasi-delict, aside from the persons
who caused injury to persons, who else are liable under
the following circumstances:
a) When a 7-year old boy injures his playmate while
playing with his father's rifle. Explain. (2%)
SUGGESTED ANSWER:
The parents of the 7-year old boy who caused injury to
his playmate are liable under Article 219 of the Family
Code, in relation to Article 2180 of the Civil Code since
they exercise parental authority over the person of the
boy. (Tamargo v. Court of Appeals, G.R. No. 85044, June
3, 1992; Elcano v. Hill, G.R. No. L-24803, May 26, 1977)
b) When a domestic helper, while haggling for a lower
price with a fish vendor in the course of buying foodstuffs
for her employer's family, slaps the fish vendor, causing
her to fall and sustain injuries. Explain. (2%)
SUGGESTED ANSWER:
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Employer of the domestic helper who slapped a fish
vendor. Under Article 2180, par. 5 of the Civil Code,
"employers shall be liable for the damages caused by
their employees and household helpers acting within the
scope of their assigned tasks, even though the former are
not engaged in any business or industry."
c) A carpenter in a construction company accidentally hits
the right foot of his co-worker with a hammer. Explain.
(2%)
SUGGESTED ANSWER:
The owner of the construction company. Article 2180,
paragraph 4 states that "the owners and managers of an
establishment or enterprise are likewise responsible for
damages caused by their employees in the service of the
branches in which the latter are employed or on the
occasion of their functions."
d) A 15-year old high school student stabs his classmate
who is his rival for a girl while they were going out of the
classroom after their last class. Explain. (2%)
SUGGESTED ANSWER:
The school, teacher and administrator as they exercise
special parental authority. (Art. 2180, par. 7 in relation to
Art. 218 and Art. 219 of the Family Code)
e) What defense, if any, is available to them? (2%)
SUGGESTED ANSWER:
The defense that might be available to them is the
observance of a good father of the family to prevent the
damage. (Last par., Art. 2180, Civil Code)
Quasi Tort (2010) No.III. Define, Enumerate
or Explain. (2% each) (B). Define quasi tort.
Who are the persons liable under quasi torts
and what are the defenses available to them?
Note: It is recommended that the examiner
exercise leniency and liberality in grading the
answers given to this question. The term quasi-
tort is not part of legal developments in civil
law. In Philippine legal tradition, quasi-delict
has been treated as the closest civil law
equivalent of the common law tort. In fact, in a
number of Supreme Court decisions, the two
terms have been considered synonymous. In
reality, however, the common law tort is much
broader in scope than the civil law quasi-delict.
In recent developments in common law, the
concept of “quasi-torts” can be considered as
the closest common law equivalent of the civil
law concept of quasi-delict. This is because it is
argued that the growing recognition of quasi-
torts as a source of obligation is hinged on the
acceptance at common law of the civil law
principles of quasi-delict. SUGGESTED
ANSWER: Quasi -tort is a legal concept
upholding the doctrine that some legal
duty exists that cannot be classified
strictly as a personal duty (thus resulting in
a tort), nor as a contractual duty but rather
some other kind of duty recognizable by
the law. ” Tort “ or ” Quasi-tort” is an Anglo
American or Common Law concept, while
“Delict” or “Quasi-Delict“ is a Civil Law
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
concept (Wikipedia encyclopedia).
ALTERNATIVE ANSWER:
Quasi -tort is considered as the equivalent
of quasi-delict. Hence the rules of the latter
pertaining to persons who can be held liable
and their defenses would also apply.
Those liable for quasi-delict include: (1)
Those tortfeasor or the person causing
damage to another through fault or
negligence ( Article 2176 NCC ); and (2)
Persons vicariously liable under Article
2180 (NCC ). The defenses available
include: (a) That the defendant was not
negligent or that he exercised due diligence
( Article 2176 NCC ); (b) That although the
defendant is negligent his negligence is not
the proximate cause of the injury ( Article
2179 NCC ); (c) That the plaintiff's own
negligence was the immediate and
proximate cause of his injury ( Article 2179
NCC ); (d ) That the person vicariously liable
has observed all the diligence of a good
father of a family to prevent damage (
Article 2180 NCC ); and (e) That the cause
of action has prescribed after the lapse s
(Article 2179 NCC ). The fact that the
plaintiff had committed contributory
negligence is a partial defense (Art 2179,
NCC).
Art. 2181. Whoever pays for the damage caused by
his dependents or employees may recover from the
latter what he has paid or delivered in satisfaction of
the claim. (1904)
Art. 2182. If the minor or insane person causing
damage has no parents or guardian, the minor or
insane person shall be answerable with his own
property in an action against him where a guardian
ad litem shall be appointed. (n)
PERSONS EXPRESSLY MADE LIABLE BY LAW
EVEN WITHOUT FAULT (Doctrine of Strict
Liability)
1. Possessor of animal under 2183;
2. Owner of vehicle under 2184;
3. Manufacturers and processors of
foodstuffs, drinks, toilet articles and similar
goods under 2187;
4. Defendant in possession of dangerous
weapons or substances under 2188;
5. Provinces, cities and municipalities under
2189;
6. Proprietor of building or structure under
2190;
7. Engineer, architect, or contractor under
1723;
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8. Head of family that lives in a building under
2193.
Art. 2183. The possessor of an animal or whoever
may make use of the same is responsible for the
damage which it may cause, although it may
escape or be lost. This responsibility shall cease
only in case the damage should come from force
majeure or from the fault of the person who has
suffered damage. (1905)
Liability; Owner of a Pet; Fortuitous Event
(2010)
No.XIV. Primo owns a pet iguana which he
keeps in a man-made pond enclosed by a
fence situated in his residential lot. A typhoon
knocked down the fence of the pond and the
iguana crawled out of the gate of Primo’s
residence. N, a neighbor who was passing by,
started throwing stones at the iguana, drawing
the iguana to move toward him. N panicked
and ran but tripped on something and
suffered a broken leg. Is anyone liable for N’s
injuries? Explain. (4%) SUGGESTED
ANSWER: No one is liable. The possessor of
an animal or whoever may make use of the
same is responsible for the damage it may
cause, although it may escape or be lost.
This responsibility shall cease only in case
the damage should come from force
majeure or from the fault of the person who
has suffered damage (Art 2183, NCC).
Art. 2184. In motor vehicle mishaps, the owner is
solidarily liable with his driver, if the former, who
was in the vehicle, could have, by the use of the
due diligence, prevented the misfortune. It is
disputably presumed that a driver was negligent, if
he had been found guilty of reckless driving or
violating traffic regulations at least twice within the
next preceding two months.
If the owner was not in the motor vehicle, the
provisions of Article 2180 are applicable. (n)
Liability; owner who was in the vehicle (1998)
A Gallant driven by John and owned by Art, and a Corolla
driven by its owner, Gina, collided somewhere along
Adriatico Street. As a result of the accident, Gina had a
concussion. Subsequently. Gina brought an action for
damages against John and Art. There is no doubt that the
collision is due to John's negligence. Can Art, who was in
liable with his driver, John? (5%)
SUGGESTED ANSWER:
Yes. Art may be held solidary liable with John, if it was
proven that the former could have prevented the
misfortune with the use of due diligence. Article 2184 of
the Civil Code states: "In motor mishaps, the owner is
solidary liable with his driver, if the former, who was in the
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
vehicle, could have, by the use of due diligence,
prevented the misfortune, x x x"
ALTERNATIVE ANSWER:
1. It depends. The Supreme Court in Chapman vs,
Underwood (27 Phil 374), held: "An owner who sits in his
automobile, or other vehicle, and permits his driver to
continue in a violation of law by the performance of
negligent acts, after he has had a reasonable opportunity
to observe them and to direct that the driver cease
therefrom, becomes himself responsible for such acts, x x
x On the other hand, if the driver, by a sudden act of
negligence, and without the owner having a reasonable
opportunity to prevent the act or its continuance, injures a
person or violates the criminal law, the owner of the
automobile, although present therein at the time the act
was committed is not responsible, either civilly or
criminally, therefor. The act complained of must be
continued in the presence of the owner for such a length
of time that the owner, by his acquiescence, makes his
driver's act his own."
Art. 2185. Unless there is proof to the contrary, it is
presumed that a person driving a motor vehicle has
been negligent if at the time of the mishap, he was
violating any traffic regulation. (n)
Art. 2186. Every owner of a motor vehicle shall file
with the proper government office a bond executed
by a government-controlled corporation or office, to
answer for damages to third persons. The amount
of the bond and other terms shall be fixed by the
competent public official. (n)
Art. 2187. Manufacturers and processors of
foodstuffs, drinks, toilet articles and similar goods
shall be liable for death or injuries caused by any
noxious or harmful substances used, although no
contractual relation exists between them and the
consumers. (n)
Art. 2188. There is prima facie presumption of
negligence on the part of the defendant if the death
or injury results from his possession of dangerous
weapons or substances, such as firearms and
poison, except when the possession or use thereof
is indispensable in his occupation or business. (n)
Art. 2189. Provinces, cities and municipalities shall
be liable for damages for the death of, or injuries
suffered by, any person by reason of the defective
condition of roads, streets, bridges, public buildings,
and other public works under their control or
supervision. (n)
Art. 2190. The proprietor of a building or structure is
responsible for the damages resulting from its total
or partial collapse, if it should be due to the lack of
necessary repairs. (1907)
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Collapse of Structures; Last Clear Chance (1990)
Mr and Mrs R own a burned-out building, the firewall of
which collapsed and destroyed the shop occupied by the
family of Mr and Mrs S, which resulted in injuries to said
couple and the death of their daughter. Mr and Mrs S had
been warned by Mr & Mrs R to vacate the shop in view of
its proximity to the weakened wall but the former failed to
do so. Mr & Mrs S filed against Mr and Mrs R an action
for recovery of damages the former suffered as a result of
the collapse of the firewall. In defense, Mr and Mrs R rely
on the doctrine of last clear chance alleging that Mr and
Mrs S had the last clear chance to avoid the accident if
only they heeded the former’s warning to vacate the
shop, and therefore Mr and Mrs R’s prior negligence
should be disregarded. If you were the judge, how would
you decide the case? State your reasons.
SUGGESTED ANSWER:
I would decide in favor of Mr & Mrs S. The proprietor of a
building or structure is responsible for the damages
resulting from its total or partial collapse, if it should be the necessary repairs in order to keep the
due to the lack of necessary repairs (Art 2190 Civil Code)
As regards the defense of “last clear chance,” the same is
not tenable because according to the SC in one case (De
Roy v CA L-80718, Jan 29, 1988, 157 S 757) the doctrine
of last clear chance is not applicable to instances covered
by Art 2190 of the Civil Code.
Further, in Phoenix Construction, Inc. v. Intermediate
Availing of that portion of Section 12 of Article II of the
Appellate Court (G.R. L-65295, March 10, 1987. 148
SCRA 353) the Supreme Court held that the role of the
common law "last clear chance" doctrine in relation to
Article 2179 of the Civil Code is merely to mitigate
damages within the context of contributory negligence.
Art. 2191. Proprietors shall also be responsible for
damages caused:
(1) By the explosion of machinery which
has not been taken care of with due
diligence, and the inflammation of explosive
substances which have not been kept in a
safe and adequate place;
(2) By excessive smoke, which may be
harmful to persons or property;
(3) By the falling of trees situated at or near
highways or lanes, if not caused by force
majeure;
(4) By emanations from tubes, canals,
sewers or deposits of infectious matter,
constructed without precautions suitable to
the place. (1908)
Art. 2192. If damage referred to in the two
preceding articles should be the result of any defect
in the construction mentioned in Article 1723, the
third person suffering damages may proceed only
against the engineer or architect or contractor in
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
accordance with said article, within the period
therein fixed. (1909)
2010 Bar Exam
No.II. Multiple choice.
(A). A had a 4-storey building which was
constructed by Engineer B. After five years,
the building developed cracks and its stairway
eventually gave way and collapsed, resulting to
injuries to some lessees. Who should the
lessees sue for damages? (1%) (1). A, the owner
(2). B, the engineer (3). both A & B
SUGGESTED ANSWER: 3. Both A & B. The
lessee may proceed against A for breach of
contract, and against B for tort or statutory
liability. Under Article 1654 (2) of the New
Civil Code, the lessor is obliged to make all
leased property suitable for the use to
which it has been devoted. Consequently,
under Article 1659 NCC, the proprietor of a
building or structure is responsible for the
damages resulting from its total or partial
collapse, if it is due to lack of necessary
repairs.
Under Article 1723, NCC, the engineer or
architect who drew up the plans and
specifications for a building is liable for
damage if 15 years from the completion of
the structure the same should collapse by a
reason of a defect by those plans and
specifications, or due to the defects in the
ground. This liability maybe enforced
against the architect or engineer even by a
third party who has no privity of contract
with the architect or engineer under Article
2192, NCC.
ALTERNATIVE ANSWER: No.1. A , the
owner . The lessee can sue only the lessor
for breach of contract under Article 1659 in
relation to Article 1654, NCC. The lessee
cannot sue the architect or the engineer
because there was no privity of contracts
between them. When sued, however, the
lessor may file a third party claim against
the architect or the engineer. ANOTHER
ALTERNATIVE ANSWER: No. 2. B, the
Engineer . Under Article 1723 the engineer
or architect who drew up the plans and
specifications for a building is liable for
damages if within 15 years from the
completion of the structure, the same
should collapse by reason of a defect in
those plans and specifications, or due to
the defects in the ground. Under Article
2192 (NCC), however, if the damages should
be the result of any of the defects in the
construction mentioned in Art 1723, NCC,
the third person suffering damages may
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proceed only against the engineer or
architect or contractor within the period
fixed therein. The damages suffered by the
lessee in the problem are clearly those
resulting from defects in the construction
plans or specifications.
Art. 2193. The head of a family that lives in a
building or a part thereof, is responsible for
damages caused by things thrown or falling from
the same. (1910)
Art. 2194. The responsibility of two or more persons
who are liable for quasi-delict is solidary. (n)
SPECIAL TORTS
Art. 19. Every person must, in the exercise of his
rights and in the performance of his duties, act with
justice, give everyone his due, and observe honesty
and good faith.
PRINCIPLE OF ABUSE OF RIGHTS
It is when the right is exercised for the purpose of
prejudicing or injuring another.
Requisites:
a. There is a legal right or duty;
b. Which is exercised in bad faith;
c. For the sole intent of prejudicing or
injuring another.
QA. When one exercises a right recognized by
law, knowing that he thereby causes an
injustice to another, the latter is entitled to
recover damages. This is known as the
principle of
A. res ipsa loquitur.
B. damnum absque injuria.
C. vicarious liability.
D. abuse of rights.
2011 Bar Exam Question
(43) Six tenants sued X, the landowner, for
willfully denying them water for their farms,
which water happened to flow from land under
X’s control, his intention being to force them to
leave his properties. Is X liable for his act and
why? (A) No, because the tenants must be
content with waiting for rainfall for their
farms. (B) No, since X owns both the land and
the water. (C) Yes, because the tenants’ farms
have the natural right of access to water
wherever it is located. (D) Yes, since X
willfully caused injury to his tenants
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
contrary to morals, good customs or public
policy.
2011 Bar Exam Question
(11) When one exercises a right recognized by
law, knowing that he thereby causes an
injustice to another, the latter is entitled to
recover damages. This is known as the
principle of (A) res ipsa loquitur. (B) damnum
absque injuria. (C) vicarious liability. (D)
abuse of rights.
DOCTRINE OF VOLENTI NON FIT INJURIA
Pertains to self-inflicted injuries or to the consent to
injury which precludes the recovery of damages by
one who has knowingly and voluntarily exposed
himself to danger, even if he is not negligent in
doing so.
Art. 20. Every person who, contrary to law, willfully
or negligently causes damage to another, shall
indemnify the latter for the same.
Damages (2012)
No.I. a) Roberto was in Nikko Hotel when he
bumped into a friend who was then on her
way to a wedding reception being held in said
hotel. Roberto alleged that he was then invited
by his friend to join her at the wedding
reception and carried the basket full of fruits
which she was bringing to the affair. At the
reception, the wedding coordinator of the hotel
noticed him and asked him, allegedly in a loud
voice, to leave as he was not in the guest list.
He retorted that he had been invited to the
affair by his friend, who however denied doing
so. Deeply embarrassed by the incident,
Roberto then sued the hotel for damages
under Articles 19 and 21 of the Civil Code. Will
Roberto’s action prosper? Explain. (5%)
SUGGESTED ANSWER: No. Roberto’s action
will not prosper. From the facts given in
the problem, the wedding coordinator did
not abuse her right when she asked him to
leave the wedding reception because he was
not in the guest list. Hotel Nikko could not
be held liable for damages as its liable
spring from the liability of its employee
(Nikko Hotel Manila Garden v. Reyes, G.R.
No. 154259, Feb 28, 2005). ALTERNATIVE
ANSWER:
It depends. While the hotel has the right to
exclude an uninvited guest from the
wedding reception, that does not give the
hotel the license to humiliate Roberto. If
the wedding coordinator of the hotel acted
wrongfully e.g. with the abuse of right,
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unfairly, or in a matter that exposed
Roberto to unnecessary ridicule or shame,
his action will prosper. Otherwise,
Roberto’s action will not prosper.
The hotel is liable for the wrongful acts of
its employees. COMMENT: The facts of the
problem are almost similar to the facts of
Nikko Hotel Manila Garden v. Reyes, G.R.
No. 154259, Feb 28, 2005. In the said case,
however, there is a categorical finding that
the hotel employee did not, exposed the
complainant to the ridicule, shame or
embarrassment; hence, did not commit any
abuse of right. The present problem makes
no statement of that finding. In the
contrary, the problem states that it is a
mere allegation.
Art. 21. 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 the latter for the damage.
ACTS CONTRA BONUS MORES
Presupposes loss or injury, material or otherwise,
which one may differ as a result of such violation.
Requisites:
a. There is an act which is legal;
b. But which is contrary to morals, good
customs, public order or public policy;
c. And it is done with intent to injure.
Under arts. 19 and 21, the act must be done
intentionally. However, art. 20 does not distinguish,
the act may be done either intentionally or
negligently, as long as the act is contrary to law.
EXAMPLES OF ACTS CONTRA BONUS MORES:
1. Breach of promise to marry –
While breach of promise to marry is,
generally, not actionable, it has been held
that to formally set a wedding and go through
and spend for all the wedding preparations
and publicity, only to walk out of it when the
matrimony was about to be solemnized is a
different matter. Such act is palpably and
unjustifiably contrary to good customs for
which the defendant must be held
answerable for damages in accordance with
art. 21, NCC. In summary breach of promise
to marry may be actionable if –
a. There is already financial damage;
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
b. There is social humiliation caused to
one of the parties;
c. Where there is moral seduction;
d. When breach was done in a manner
that is clearly contrary to good
morals.
NOTE: An action can only be proper when
damage, material or otherwise, was suffered
by the plaintiff. An action based on articles 19
– 21 will be dismissed if the plaintiff merely
seeks “recognition”.
Moral seduction connotes the idea of deceit,
enticement, superior power or abuse of
confidence on the part of the seducer to
which the woman has yielded for which the
seducer can be held liable (Gashem Shookat
Baksh vs. CA).
Sexual intercourse is not by itself a basis for
recovery but damages could be awarded if
the sexual intercourse is not a product of
voluntariness or mutual desire (Constantino
vs. Mendez).
For one whole year, the plaintiff, a woman of
adult age, maintained intimate sexual
relations with the appellant with repeated acts
of sexual intercourse. There is here
voluntariness and mutual passion. Hence, no
case is made under art. 21, NCC (Tanjanco
vs. CA).
Damages; Moral & Exemplary (2009) No.XIV.
Rodolfo, married to Sharon, had an illicit affair
with his secretary, Nanette, a 19-year old girl,
and begot a baby girl, Rona. Nanette sued
Rodolfo for damages: actual, for hospital and
other medical expenses in delivering the child
by caesarean section; moral, claiming that
Rodolfo promised to marry her, representing
that he was single when, in fact, he was not;
and exemplary, to teach a lesson to like-
minded Lotharios.
(A). If you were the judge, would you award all
the claims of Nanette? Explain. (3%)
SUGGESTED ANSWER: If Rodolfo's marriage
could not have been possibly known to
Nanette or there is no gross negligence on
the part of Nanette, Rodolfo could be held
liable for moral damages. If there is gross
negligence in a suit for quasidelict,
exemplary could be awarded.
2. Seduction without breach of promise to
marry – seduction by itself is an act contrary to
morals, good customs and public policy.
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3. Sexual assault – defendant is liable for all
forms of sexual assault.
4. Desertion by a spouse – a spouse has the
legal obligation to live with his/her spouse. If a
spouse does not perform his/her duty to the
other, he may be liable for damages for such
omission because the same is contrary to law,
morals, good customs and public policy.
5. Trespass to and/or deprivation of property
2 kinds:
a. Trespass to and/or deprivation of
real property.
Liability for damages under RPC
and art. 451, NCC requires
intent and bad faith.
A builder in good faith who
acted negligently may be held
liable under art. 2176, NCC.
Art. 448, NCC in relation to art.
456 does not permit action for
damages where the builder,
planter or sower acted in good
faith. The landowner is limited
to the options given to him
under article 448.
b. Trespass to and/or deprivation of
personal property.
In the field of tort, trespass
extends to all cases where a
person is deprived of his
personal property even in the
absence of criminal liability.
It may cover cases where the
defendant was deprived of
personal property for the
purpose of obtaining
possession of real property.
The defendant landlord, was
held liable because he
deprived the plaintiffs, his
tenants of water in order to
force them to vacate the lot
they were cultivating
(Magbanua vs. IAC, 137 SCRA
352).
The right to disconnect and
deprive the customer, who
unreasonable fails to pay his
bills of electricity, should be
exercised in accordance with
the law and rules. If the
company disconnects the
electricity service without prior
notice as required by the rules,
the company commits a tort
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
under art. 21, NCC (Manila
Electric vs. CA).
6. Abortion and wrongful death – damages may
be recovered by both spouses if –
a. Abortion was done intentionally
without their consent; or
b. Caused through the physician’s
negligence.
Note: A doctor who performs an illegal
abortion is criminally liable under art. 259,
RPC.
Husband of a woman who voluntarily
procured her abortion may recover
damages from the physician who cause the
same on account of distress and mental
anguish attendant to the loss of the unborn
child and the disappointment of his parental
expectation (Galuz vs. CA, 2 SCRA 802).
Damages arising from Death of Unborn Child (2003)
If a pregnant woman passenger of a bus were to suffer
an abortion following a vehicular accident due to the
gross negligence of the bus driver, may she and her
husband claim damages from the bus company for the
death of their unborn child? Explain. 5%
SUGGESTED ANSWER:
No, the spouses cannot recover actual damages in the
form of indemnity for the loss of life of the unborn child.
This is because the unborn child is not yet considered a
person and the law allows indemnity only for loss of life of
person. The mother, however may recover damages for
the bodily injury she suffered from the loss of the fetus
which is considered part of her internal organ. The
parents may also recover damages for injuries that are
inflicted directly upon them, e.g., moral damages for
mental anguish that attended the loss of the unborn child.
Since there is gross negligence, exemplary damages can
also be recovered. (Gelus v. CA, 2 SCRA 801 [1961])
7. Illegal dismissal
If the dismissal was done anti-socially and
oppressively, the employer should be
deemed to have violated art. 1701, NCC
(which prohibits acts of oppression by
either capital or labor against the other) and
art. 21, NCC. An employer may be held
liable for damages if the manner of
dismissing is contrary to morals, good
customs and public policy.
NOTE: The right of the employer to
dismiss his employees should not
be confused with the manner in
which the right is exercised and the
effects flowing therefrom.
8. Malicious prosecution
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An action for damages brought by one against
another whom a criminal prosecution, civil suit,
or other legal proceeding has been commenced
maliciously and without probable cause, after
termination of such prosecution, suit or
proceeding in favor of the defendant therein.
The action which is terminated
should be one begun in malice,
without probable cause to believe
that the charges can be sustained.
Elements:
a. The fact of the prosecution and the
further fact the defendant was himself
the prosecutor, and that the action was
finally terminated with an acquittal;
b. That in bringing the action, the
prosecutor acted without probable
cause;
c. The prosecutor was actuated or
impelled by legal malice.
Absence of malice signifies good faith on
the part of the defendant. Good faith may
even be based on mistake of law. Acquittal
presupposes that a criminal
information/complaint is filed in court and
final judgment is rendered dismissing the
case, nevertheless, prior acquittal may
include dismissal by the prosecutor after
preliminary investigation (Globe Mackay
and Radio Corp. vs. CA).
9. Public humiliation – such act may also
constitute an offense under art 359, RPC
(Slander b y Deed).
A person can be held liable for damages for
slapping another in public (Patricio vs. Hon.
Oscar Liveste).
A defendant may likewise be guilty of a tort
even is he acted in good faith if the action
has caused humiliation to another (Grand
Union Supermarket vs. Espino.).
10. Unjust enrichment
Art. 23. Even when an act or event causing
damage to another's property was not due to
the fault or negligence of the defendant, the
latter shall be liable for indemnity if through the
act or event he was benefited.
NOTE: This is the Principle of Unjust
Enrichment.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Take note that theft is likewise committed
by any person who, after having maliciously
damaged the property of another, shall
remove or make use of the fruits or objects
of the damaged caused by him (art. 308 [2],
RPC).
Art. 24. In all contractual, property or other
relations, when one of the parties is at a
disadvantage on account of his moral
dependence, ignorance, indigence, mental
weakness, tender age or other handicap, the
courts must be vigilant for his protection.
Art. 2142. Certain lawful, voluntary and
unilateral acts give rise to the juridical relation
of quasi-contract to the end that no one shall be
unjustly enriched or benefited at the expense of
another.
11. Ostentatious display of wealth (art. 25, NCC)
12. Violation of right of privacy and family
relations (art. 26, NCC)
13. Dereliction of duty of public officers (art. 27,
NCC)
14. Unfair competition (art. 28, NCC)
15. Violation of rights and liberties of another
person (art. 32, NCC)
16. Nuisance (art. 694, NCC)
Title XVIII. - DAMAGES
CHAPTER 1
GENERAL PROVISIONS
Art. 2195. The provisions of this Title shall be
respectively applicable to all obligations mentioned
in Article 1157.
Art. 2196. The rules under this Title are without
prejudice to special provisions on damages
formulated elsewhere in this Code. Compensation
for workmen and other employees in case of death,
injury or illness is regulated by special laws. Rules
governing damages laid down in other laws shall be
observed insofar as they are not in conflict with this
Code.
DAMAGE
The detriment, injury or loss which is occasioned by
reason of fault of another in the property or person.
DAMAGES
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The pecuniary compensation, recompense or stipulation, one is entitled to an adequate
satisfaction for an injury sustained or as otherwise compensation only for such pecuniary loss suffered
expressed, the pecuniary consequences which the by him as he has duly proved. Such compensation
law imposes for the breach of some duty or is referred to as actual or compensatory damages.
violation of some rights.
Damages arising from Death of Unborn Child (1991)
DAMNUM ABSQUE INJURIA (damage without On her third month of pregnancy, Rosemarie, married to
injury) Boy, for reasons known only to her, and without informing
Boy, went to the clinic of X, a known abortionist, who for a
A person may have suffered physical hurt or injury, fee, removed and expelled the fetus from her womb, Boy
but for as long as no legal injury or wrong has been learned of the abortion six (6) months later.
done, there is no liability. 1987 Constitution which reads;
The State x xx shall equally protect the life of the mother
INJURY DAMAGE DAMAGES and the life of the unborn from conception, "xxx" which
The he claims confers a civil personality on the unborn from
invasion of a Loss, hurt or recompense or the moment of conception.
legal right harm which compensation Boy filed a case for damages against the abortionist,
praying therein that the latter be ordered to pay him: (a)
results from awarded for P30,000.00 as indemnity for the death of the fetus, (b)
the injury the damage P100.000.00 as moral damages for the mental anguish
suffered. and anxiety he suffered, (c) P50,000.00 as exemplary
damages, (d) P20,000.00 as nominal damages, and (e)
NOTE THAT: P25,000.00 as attorney's fees. May actual damages be
 Complaint for damages is a personal also recovered? If so, what facts should be alleged and
action. proved?
 Proof of pecuniary loss is necessary to SUGGESTED ANSWER:
Yes, provided that the pecuniary loss suffered should be
recover actual damages from the
substantiated and duly proved.
defendant.
 No proof of pecuniary loss is necessary in
case of moral, nominal, temperate,
liquidated, or exemplary damages. KINDS OF ACTUAL OR COMPENSATORY
 The assessment of damages, except DAMAGES:
liquidated ones, is left to the discretion of 1. General Damage – natural, necessary and
the court according to the circumstances of logical consequences of a particular
each case. wrongful act which result in injury; need not
be specifically pleaded because the law
Art. 2197. Damages may be: itself implies or presumes that they resulted
from the wrongful act.
(1) Actual or compensatory; 2. Special Damages – damages which are
the natural, but not the necessary and
(2) Moral; inevitable result of the wrongful act (like
attorney’s fees).
(3) Nominal; Requirements:
a. Need to be pleaded;
(4) Temperate or moderate; b. Pray for the relief to be granted;
c. Prove the loss.
(5) Liquidated; or

(6) Exemplary or corrective. WHEN LOSS NEED NOT BE PROVED:

Art. 2198. The principles of the general law on
damages are hereby adopted insofar as they are
not inconsistent with this Code.
CHAPTER 2
ACTUAL OR COMPENSATORY DAMAGES
Art. 2199. Except as provided by law or by
1. Liquidated damages;
2. Damages other than actual damages are
sought;
3. Loss is presumed;
4. Forfeiture of bonds in favor of the
government for the purpose of promoting
public interest or policy (like bond for the
temporary stay of aliens).
Art. 2200. Indemnification for damages shall
comprehend not only the value of the loss suffered,

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____________________________________________________________________________________________________
but also that of the profits which the obligee failed to If it can be proved that DT's pain in his arm and wrist
obtain. (1106) occasioned by the transfer of luggage was caused by
fault or negligence on the part of the airline's stewardess,
actual damages may be recovered.
Art. 2201. In contracts and quasi-contracts, the The airline may be liable for moral damages pursuant to
damages for which the obligor who acted in good Art. 2219 (10) if the cause of action is based on Article 21
faith is liable shall be those that are the natural and or an act contrary to morals in view of the humiliation
probable consequences of the breach of the suffered by DT and MT when they were separated from
obligation, and which the parties have foreseen or their guests and were threatened to be offloaded.
could have reasonably foreseen at the time the
obligation was constituted. Liability; Airline Company; Non-Performance of an
Obligation (2005)
Dr. and Mrs. Almeda are prominent citizens of the country
In case of fraud, bad faith, malice or wanton and are frequent travelers abroad. In 1996, they booked
attitude, the obligor shall be responsible for all round-trip business class tickets for the Manila-Hong
damages which may be reasonably attributed to the Kong-Manila route of the Pinoy Airlines, where they are
non-performance of the obligation. (1107a) holders of Gold Mabalos Class Frequent Flier cards. On
their return flight, Pinoy Airlines upgraded their tickets to
first class without their consent and, inspite of their
Liability; Airline Company; Non-Performance of an
protestations to be allowed to remain in the business
Obligation (2004)
class so that they could be with their friends, they were
DT and MT were prominent members of the frequent
told that the business class was already fully booked, and
travelers’ club of FX Airlines. In Hongkong, the couple
that they were given priority in upgrading because they
were assigned seats in Business Class for which they
are elite members/holders of Gold Mabalos Class cards.
had bought tickets. On checking in, however, they were
Since they were embarrassed at the discussions with the
told they were upgraded by computer to First Class for
flight attendants, they were forced to take the flight at the
the flight to Manila because the Business Section was
first class section apart from their friends who were in the
overbooked.
business class. Upon their return to Manila, they
Both refused to transfer despite better seats, food,
demanded a written apology from Pinoy Airlines. When it
beverage and other services in First Class. They said
went unheeded, the couple sued Pinoy Airlines for breach
they had guests in Business Class they should attend to.
of contract claiming moral and exemplary damages, as
They felt humiliated, embarrassed and vexed, however,
well as attorney's fees. Will the action prosper? Give
when the stewardess allegedly threatened to offload them
reasons. (5%)
if they did not avail of the upgrade. Thus they gave in,
ALTERNATIVE ANSWER:
but during the transfer of luggage DT suffered pain in his
Yes, the action will prosper. Article 2201 of the Civil Code
arm and wrist. After arrival in Manila, they demanded an
entitles the person to recover damages which may be
apology from FX’s management as well as indemnity
attributed to non-performance of an obligation. In Alitalia
payment. When none was forthcoming, they sued the
Airways v. Court of Appeals (G.R. No. 77011, July 24,
airline for a million pesos in damages. Is the airline liable
1990), when an airline issues ticket to a passenger
for actual and moral damages? Why or why not? Explain
confirmed on a particular flight, a contract of carriage
briefly. (5%)
arises and the passenger expects that he would fly on
SUGGESTED ANSWER:
that day. When the airline deliberately overbooked, it took
FX Airlines committed breach of contract when it
the risk of having to deprive some passengers of their
upgraded DT and MT, over their objections, to First Class
seat in case all of them would show up. For the indignity
because they had contracted for Business Class
and inconvenience of being refused the confirmed seat,
passage. However, although there is a breach of
said passenger is entitled to moral damages.
contract, DT and MT are entitled to actual damages only
In the given problem, spouses Almeda had a booked
for such pecuniary losses suffered by them as a result of
roundtrip business class ticket with Pinoy Airlines. When
such breach. There seems to be no showing that they
their tickets were upgraded to first class without their
incurred such pecuniary loss. There is no showing that
consent, Pinoy Airlines breached the contract. As ruled in
the pain in DT's arm and wrist resulted directly from the
Zulueta v. Pan American (G.R. No. L-28589, January 8,
carrier's acts complained of. Hence, they are not entitled
1973),
to actual damages. Moreover, DT could have avoided the
in case of overbooking, airline is in bad faith. Therefore,
alleged injury by requesting the airline staff to do the
spouses Almeda are entitled to damages.
luggage transfer as a matter of duty on their part. There is
ALTERNATIVE ANSWER:
also no basis to award moral damages for such breach of
physical suffering, mental anguish, fright, serious anxiety,
contract because the facts of the problem do not show
besmirched reputation, wounded feelings, moral shock,
bad faith or fraud on the part of the airline. (Cathay
social humiliation, and similar injury. Although incapable
Pacific v. Vazquez, 399 SCRA 207 [2003]). However,
of pecuniary computation, moral damages may be
they may recover moral damages if the cause of action is
recovered if they are the proximate result of the
based The action may or may not prosper. Moral
defendant's wrongful act or omission. Moral damages
damages include
predicated upon a breach of contract of carriage are
on Article 21 of the Civil Code for the humiliation and
recoverable only in instances where the carrier is guilty of
embarrassment they felt when the stewardess threatened
fraud or bad faith or where the mishap resulted in the
to offload them if they did not avail of the upgrade.
death of a passenger. (Cathay Pacific Airways, Ltd. v.
ALTERNATIVE ANSWER:
Court of Appeals, G.R. No. 60501, March 5, 1993) Where

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____________________________________________________________________________________________________
there is no showing that the airline acted fraudulently or in
bad faith, liability for damages is limited to the natural and
probable consequences of the breach of the contract of
carriage which the parties had foreseen or could have
reasonably foreseen. In such a case the liability does not
include moral and exemplary damages.
In the instant case, if the involuntary upgrading of the
Almedas' seat accommodation was not attended by fraud
or bad faith, the award of moral damages has no leg to
stand on.
Thus, spouses would not also be entitled to exemplary
damages. It is a requisite in the grant of exemplary
damages that the act of the offender must be
accompanied by bad faith or done in wanton, fraudulent
or malevolent manner.
(Morris v. Court of Appeals, G.R. No. 127957, February
21, 2001) Moreover, to be entitled thereto, the claimant
must first establish his right to moral, temperate, or
compensatory damages. (Art. 2234, Civil Code) Since the
Almedas are not entitled to any of these damages, the
award for exemplary damages has no legal basis. Where
the awards for moral and exemplary damages are
eliminated, so must the award for attorney's fees be
eliminated. (Orosa v. Court of Appeals, G.R. No. 111080,
April 5, 2000; Morris v. Court of Appeals, G.R. No.
127957, February 21, 2001) The most that can be
adjudged in their favor for Pinoy Airlines' breach of
contract is an award for nominal damages under Article
2221 of the Civil Code. (Cathay Pacific Airways v. Sps.
Daniel & Maria Luisa Vasquez, G.R. No. 150843, March
14, 2003)
However, if spouses Almeda could prove that there was
bad faith on the part of Pinoy Airlines when it breached
the contract of carriage, it could be liable for moral,
exemplary as well as attorney's fees.
Damages (1994)
On January 5, 1992, Nonoy obtained a loan of
Pl,000,000.00 from his friend Raffy. The promissory note
did not stipulate any payment for Interest. The note was
due on January 5, 1993 but before this date the two
became political enemies. Nonoy, out of spite,
deliberately defaulted in paying the note, thus forcing
Raffy to sue him. 1) What actual damages can Raffy
recover? 2) Can Raffy ask for moral damages from
Nonoy? 3) Can Raffy ask for nominal damages? 4) Can
Raffy ask for temperate damages? 5) Can Raffy ask for
attorney's fees?
SUGGESTED ANSWER:
1) Raffy may recover the amount of the promissory note
of P1 million, together with interest at the legal rate from
the date of judicial or extrajudicial demand. In addition,
however, inasmuch as the debtor is in bad faith, he is
liable for all damages which may be reasonably attributed
to the non-performance of the obligation. (Art. 2201(2).
NCC).
2) Yes, under Article 2220, NCC moral damages are
recoverable in case of breach of contract where the
defendant acted fraudulently or in bad faith.
3) Nominal damages may not be recoverable in this case
because Raffy may already be indemnified of his losses
with the award of actual and compensatory damages.
NOMINAL DAMAGES are adjudicated only in order that a
right of the plaintiff, which has been violated or invaded
by the defendant may be vindicated or recognized, and
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
not for the purpose of indemnifying the plaintiff for any
loss suffered by him. (Article 2231. Civil Code)
4) Raffy may ask for, but would most likely not be
awarded temperate damages, for the reason that his
actual damages may already be compensated upon proof
thereof with the promissory note. TEMPERATE
DAMAGES may be awarded only when the court finds
that some pecuniary loss has been suffered but its
amount cannot, from the nature of the case, be proved
with certainty. (Article 2224, Civil Code)
5) Yes, under paragraph 2, Article 2208 of the Civil Code,
considering that Nonoy's act or omission has compelled
Raffy to litigate to protect his interests. Furthermore.
attorneys' fees may be awarded by the court when it is
just and equitable. (Article 2208(110) Civil Code).
Art. 2202. In crimes and quasi-delicts, the
defendant shall be liable for all damages which are
the natural and probable consequences of the act
or omission complained of. It is not necessary that
such damages have been foreseen or could have
reasonably been foreseen by the defendant.
Art. 2203. The party suffering loss or injury must
exercise the diligence of a good father of a family to
minimize the damages resulting from the act or
omission in question.
Art. 2204. In crimes, the damages to be adjudicated
may be respectively increased or lessened
according to the aggravating or mitigating
circumstances.
Art. 2205. Damages may be recovered:
(1) For loss or impairment of earning
capacity in cases of temporary or
permanent personal injury;
(2) For injury to the plaintiff's business
standing or commercial credit.
LOSS OF EARNING CAPACITY
Variables to consider:
1. life expectancy (LE)
(80 – AoD)
2. Gross Annual Income (GAI)
(MI x 12 [months])
3. Living Expenses (LE)
In the absence of proof, 50% of GAI
4. Age on Death (AoD)
5. Monthly Income (MI)
6. Net Earning Capacity (NEC)
7. Gross Net Income (GNI)
GAI - LE
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FORMULA:
NEC = 2/3 x (LE x GNE) or
NEC = 2/3 (80 – AoD) x (GAI – LE)
APPLICATION:
A person died at the age of 40 and with a monthly
income of P5, 000.
NEC = 2/3 (80 – 40) x ([5, 000 x 12] – 50% of GAI)
= 2/3 (40) x (60, 000 – 30, 000)
= 26. 66 x 30, 000
= 800, 000.
LOSS OF PROFITS
May be determined by considering the average
profit for the preceding years multiplied by the
number of years during which the business was
affected by the wrongful act or breach.
Death Indemnity (1994)
Johnny Maton's conviction for homicide was affirmed by
the Court of Appeals and in addition, although the
prosecution had not appealed at all. The appellate court
increased the indemnity for death from P30,000.00 to
P50,000.00. On his appeal to the Supreme Court, among
the other things Johnny Maton brought to the high court's
attention, was the increase of indemnity imposed by the
Court of Appeals despite the clear fact that the People
had not appealed from the appellate court's judgment. Is
Johnny Maton correct?
SUGGESTED ANSWER:
a) In Abejam v. Court of Appeals, the Supreme Court said
that even if the issue of damages were not raised by the
appellant in the Court of Appeals but the Court of Appeals
in its findings increased the damages, the Supreme Court
will not disturb the findings of the Court of Appeals.
b) No, the contention of the accused is not correct
because upon appeal to the Appellate Court, the court
acquired jurisdiction over the entire case, criminal as well
as civil. Since the conviction of homicide had been
appealed, there is no finality in the amount of indemnity
because the civil A van owned by Orlando and driven by
Diego, while liability arising from the crime and the
judgment on the crime has not yet become final
c) Yes. Since the civil indemnity is an award in the civil
action arising from the criminal offense, the rule that a
party cannot be granted affirmative relief unless he
himself has appealed should apply. Therefore, it was
error for the Court of Appeals to have expanded the
indemnity since the judgment on the civil liability had
become final.
d) No. Courts can review matters not assigned as
errors.
(Hydro Resource vs. CA . 204 SCRA 309).
Art. 2206. The amount of damages for death
caused by a crime or quasi-delict shall be at least
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
three thousand pesos, even though there may have
been mitigating circumstances. In addition:
(1) The defendant shall be liable for the
loss of the earning capacity of the
deceased, and the indemnity shall be paid
to the heirs of the latter; such indemnity
shall in every case be assessed and
awarded by the court, unless the deceased
on account of permanent physical disability
not caused by the defendant, had no
earning capacity at the time of his death;
(2) If the deceased was obliged to give
support according to the provisions of
Article 291, the recipient who is not an heir
called to the decedent's inheritance by the
law of testate or intestate succession, may
demand support from the person causing
the death, for a period not exceeding five
years, the exact duration to be fixed by the
court;
(3) The spouse, legitimate and illegitimate
descendants and ascendants of the
deceased may demand moral damages for
mental anguish by reason of the death of
the deceased.
DAMAGES RECOVERABLE IN CASE OF DEATH
1. Medical and hospital bills.
2. Damages for death –
a. Minimum amount of 50, 000.
As per recent jurisprudence, liability
ex-delictu is at least 75, 000.
b. Loss of earning capacity;
c. Support in proper cases only;
d. Moral damages
Art. 2207. If the plaintiff's property has been
insured, and he has received indemnity from the
insurance company for the injury or loss arising out
of the wrong or breach of contract complained of,
the insurance company shall be subrogated to the
rights of the insured against the wrongdoer or the
person who has violated the contract. If the amount
paid by the insurance company does not fully cover
the injury or loss, the aggrieved party shall be
entitled to recover the deficiency from the person
causing the loss or injury.
Art. 2208. In the absence of stipulation, attorney's
fees and expenses of litigation, other than judicial
costs, cannot be recovered, except:
(1) When exemplary damages are
awarded;
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(2) When the defendant's act or omission
has compelled the plaintiff to litigate with
third persons or to incur expenses to
protect his interest;
(3) In criminal cases of malicious
prosecution against the plaintiff;
(4) In case of a clearly unfounded civil
action or proceeding against the plaintiff;
(5) Where the defendant acted in gross and
evident bad faith in refusing to satisfy the
plaintiff's plainly valid, just and demandable
claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of
household helpers, laborers and skilled
workers;
(8) In actions for indemnity under
workmen's compensation and employer's
liability laws;
(9) In a separate civil action to recover civil
liability arising from a crime;
(10) When at least double judicial costs are
awarded;
(11) In any other case where the court
deems it just and equitable that attorney's
fees and expenses of litigation should be
recovered.
In all cases, the attorney's fees and expenses of
litigation must be reasonable.
NOTE: They are actual damages. It is due to the
plaintiff and not to counsel.
Moral Damages & Atty Fees (2002)
Ortillo contracts Fabricato, Inc. to supply and install tile
materials in a building he is donating to his province.
Ortillo pays 50% of the contract price as per agreement. It
is also agreed that the balance would be payable
periodically after every 10% performance until completed.
After performing about 93% of the contract, for which it
has been paid an additional 40% as per agreement,
Fabricato, Inc. did not complete the project due to its
sudden cessation of operations. Instead, Fabricato, Inc.
demands payment of the last 10% of the contract despite
its non-completion of the project. Ortillo refuses to pay,
invoking the stipulation that payment of the last amount
10% shall be upon completion. Fabricato, Inc. brings suit
for the entire 10%. Plus damages, Ortillo counters with
claims for (a) moral damages for Fabricato, Inc.’s
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
unfounded suit which has damaged his reputation as a
philanthropist and respect businessman in his
community, and (b) attorney’s fees.
A. Does Ortillo have a legal basis for his claim for moral
damages? (2%)
B. How about his claim for attorney’s fees, having hired a
lawyer to defend him? (3%)
SUGGESTED ANSWER:
A. There is no legal basis to Ortillo’s claim for moral
damages. It does not fall under the coverage of Article
2219 of the New Civil Code.
B. Ortillo is entitled to attorney’s fees because Fabricato’s
complaint is a case of malicious prosecution or a clearly
unfounded civil action. (Art. 2208 [4] and [11], NCC).
Art. 2209. If the obligation consists in the payment
of a sum of money, and the debtor incurs in delay,
the indemnity for damages, there being no
stipulation to the contrary, shall be the payment of
the interest agreed upon, and in the absence of
stipulation, the legal interest, which is six per cent
per annum. (1108)
Art. 2210. Interest may, in the discretion of the
court, be allowed upon damages awarded for
breach of contract.
Art. 2211. In crimes and quasi-delicts, interest as a
part of the damages may, in a proper case, be
adjudicated in the discretion of the court.
Art. 2212. Interest due shall earn legal interest from
the time it is judicially demanded, although the
obligation may be silent upon this point. (1109a)
Art. 2213. Interest cannot be recovered upon
unliquidated claims or damages, except when the
demand can be established with reasonably
certainty.
Art. 2214. In quasi-delicts, the contributory
negligence of the plaintiff shall reduce the damages
that he may recover.
Art. 2215. In contracts, quasi-contracts, and quasi-
delicts, the court may equitably mitigate the
damages under circumstances other than the case
referred to in the preceding article, as in the
following instances:
(1) That the plaintiff himself has
contravened the terms of the contract;
(2) That the plaintiff has derived some
benefit as a result of the contract;
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(3) In cases where exemplary damages are
to be awarded, that the defendant acted
upon the advice of counsel;
(4) That the loss would have resulted in any
event;
(5) That since the filing of the action, the
defendant has done his best to lessen the
plaintiff's loss or injury.
CHAPTER 3
OTHER KINDS OF DAMAGES
Art. 2216. No proof of pecuniary loss is necessary
in order that moral, nominal, temperate, liquidated
or exemplary damages, may be adjudicated. The
assessment of such damages, except liquidated
ones, is left to the discretion of the court, according
to the circumstances of each case.
SECTION 1. - Moral Damages
Art. 2217. Moral damages include physical
suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral
shock, social humiliation, and similar injury. Though
incapable of pecuniary computation, moral
damages may be recovered if they are the
proximate result of the defendant's wrongful act for
omission.
GR: The plaintiff must allege and prove the
factual basis for moral damages and its causal
relation to the defendant’s acts.
Exception: Moral damages may be awarded to
the victim in criminal proceedings without the
need for pleading proof of the basis thereof.
Art. 2218. In the adjudication of moral damages, the
sentimental value of property, real or personal, may
be considered.
Note: The social and economic or financial
standing of the offender and the offended party
should be taken into consideration in the
computation of moral damages.
Art. 2219. Moral damages may be recovered in the
following and analogous cases:
(1) A criminal offense resulting in physical
injuries;
(2) Quasi-delicts causing physical injuries;
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(3) Seduction, abduction, rape, or other
lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
(7) Libel, slander or any other form of
defamation;
(8) Malicious prosecution;
(9) Acts mentioned in Article 309;
(10) Acts and actions referred to in Articles
21, 26, 27, 28, 29, 30, 32, 34, and 35.
The parents of the female seduced, abducted,
raped, or abused, referred to in No. 3 of this article,
may also recover moral damages.
The spouse, descendants, ascendants, and
brothers and sisters may bring the action mentioned
in No. 9 of this article, in the order named.
NOTE: The enumeration of cases is not exclusive.
Note: Moral damages is awarded only to enable the
injured party to obtain means, diversions or
amusements that will serve to alleviate the moral
suffering he has undergone, by reason of
defendant’s culpable action and not intended to
enrich a complainant at the expense of the
defendant.
Moral Damages; Non-Recovery Thereof (2006)
Under Article 2219 of the Civil Code, moral damages may
be recovered in the cases specified therein several of
which are enumerated below. Choose the case wherein
you cannot recover moral damages. Explain. (2.5%) a) A
criminal offense resulting in physical injuries b) Quasi-
delicts causing physical injuries c) Immorality or
dishonesty d) Illegal search e) Malicious prosecution
SUGGESTED ANSWER: Immorality and dishonesty, per
se, are not among those cases enumerated in Article
2219 which can be the basis of an action for moral
damages. The law specifically mentions adultery or
concubinage, etc. but not any and every immoral act.
Quasi-Delict (1992)
As the result of a collision between a public service
passenger bus and a cargo truck owned by D, X
sustained physical injuries and Y died. Both X and Y were
passengers of the bus. Both drivers were at fault, and so
X and Z, the only heir and legitimate child of the
deceased Y, sued the owners of both vehicles. a) May
the owner of the bus raise the defense of having
exercised the diligence of a good father of a family? b)
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May D raise the same defense? c) May X claim moral
damages from both defendants? d) May Z claim moral
damages from both defendants? Give reasons for all your
answers,
SUGGESTED ANSWER:
(a) No. The owner of the bus cannot raise the defense
because the carrier's liability is based on breach of
contract
(b) Yes. D can raise the defense because his liability is
based on a quasi-delict.
(c) Because X suffered physical injuries, X can claim
moral damages against D, but as against the owner of
the bus. X can claim moral damages only if X proves
reckless negligence of the carrier amounting to fraud.
(d) Z can claim moral damages against both defendants
because the rules on damages arising from death due to
a quasi-delict are also applicable to death of a passenger
caused by breach of contract by a common carrier (Arts.
1755. 1756, 1764, 2206 and 2219. Civil Code).
Art. 2220. Willful injury to property may be a legal
ground for awarding moral damages if the court
should find that, under the circumstances, such
damages are justly due. The same rule applies to
breaches of contract where the defendant acted
fraudulently or in bad faith.
NOTE: As per recent jurisprudence on the matter of
moral damages, the award of 50, 000 – 75, 000 is
recoverable.
Quasi-Delict; Acts contrary to morals (1996)
Rosa was leasing an apartment in the city. Because of
the Rent Control Law, her landlord could not increase the
rental as much as he wanted to, nor terminate her lease
as long as she was paying her rent. In order to force her
to leave the premises, the landlord stopped making
repairs on the apartment, and caused the water and
electricity services to be disconnected. The difficulty of
living without electricity and running water resulted in
Rosa's suffering a nervous breakdown. She sued the
landlord for actual and moral damages. Will the action
prosper? Explain.
SUGGESTED ANSWER:
Yes, based on quasi-delict under the human relations
for quasi-delict may nonetheless prosper. The Supreme
provisions of the New Civil Code (Articles 19, 20 and 21)
because the act committed by the lessor is contrary to
morals. Moral damages are recoverable under Article
2219
(10) in relation to Article 21. Although the action is based
on quasi-delict and not on contract, actual damages may
be recovered if the lessee is able to prove the losses and
expenses she suffered.
ALTERNATIVE ANSWERS:
a) Yes, based on breach of contract. The lessor has the
obligation to undertake repairs to make the apartment
habitable and to maintain the lessee in the peaceful and
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
adequate enjoyment of the lease for the entire duration of
the contract (Article 1654. NCC). Since there was willful
breach of contract by the lessor, the lessee is entitled to
moral damages under Article 3220, NCC. She is also
entitled to actual damages, e. g. loss of income, medical
expenses, etc., which she can prove at the trial.
b) Yes, based on contract and/or on tort. The lessor
willfully breached his obligations under Article 1654.
NCC, hence, he is liable for breach of contract. For such
breach, the lessee may recover moral damages under
Art. 2220 of the NCC, and actual damages that she may
have suffered on account thereof. And since the conduct
of the lessor was contrary to morals, he may also be held
liable for quasi-delict. The lessee may recover moral
damages under Article 2219 (10) in relation to Article 21,
and all actual damages which she may have suffered by
reason of such conduct under Articles 9, 20 and 21.
c) Yes, the action should prosper for both actual and
moral damages. In fact, even exemplary damages and
attorney's fees can be claimed by Rosa, on the authority
of Magbanua vs. IAC (137 SCRA 328), considering that,
as given, the lessor's willful and illegal act of
disconnecting the water and electric services resulted in
Rosa's suffering a nervous breakdown. Art. 20 NCC and
Art, 21, NCC authorize the award of damages for such
willful and illegal conduct.
2011 Bar Exam Question
(5) Lennie bought a business class ticket from
Alta Airlines. As she checked in, the manager
downgraded her to economy on the ground
that a Congressman had to be accommodated
in the business class. Lennie suffered the
discomfort and embarrassment of the
downgrade. She sued the airlines for quasi-
delict but Alta Airlines countered that, since
her travel was governed by a contract between
them, no quasi-delict could arise. Is the airline
correct?
(A) No, the breach of contract may in fact
be tortious as when it is tainted as in this
case with arbitrariness, gross bad faith, and
malice. (B) No, denying Lennie the comfort
and amenities of the business class as
provided in the ticket is a tortious act. (C) Yes,
since the facts show a breach of contract, not
a quasi-delict. (D) Yes, since quasi-delict
presupposes the absence of a pre-existing
contractual relation between the parties.
SECTION 2. - Nominal Damages
Art. 2221. Nominal damages are adjudicated in
order that a right of the plaintiff, which has been
violated or invaded by the defendant, may be
vindicated or recognized, and not for the purpose of
indemnifying the plaintiff for any loss suffered by
him.
ELEMENTS:
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1. Plaintiff has a right;
2. Right of plaintiff is violated;
3. Purpose is not to identify but to vindicate or
recognize right violated.
Art. 2222. The court may award nominal damages
in every obligation arising from any source
enumerated in Article 1157, or in every case where
any property right has been invaded.
Note: Recent jurisprudence may grant award of 50,
000 for nominal damages.
Art. 2223. The adjudication of nominal damages
shall preclude further contest upon the right
involved and all accessory questions, as between
the parties to the suit, or their respective heirs and
assigns.
NOTE: Nominal damages cannot co-exist with
actual or compensatory damages.
SECTION 3. - Temperate or Moderate Damages
Art. 2224. Temperate or moderate damages, which
are more than nominal but less than compensatory
damages, may be recovered when the court finds
that some pecuniary loss has been suffered but its
amount can not, from the nature of the case, be
provided with certainty.
Art. 2225. Temperate damages must be reasonable
under the circumstances.
NOTE: In cases where the resulting injury might be
continuing and possible future complications
directly arising from the injury, while certain to occur
are difficult to predict, temperate damages can and
should be awarded on top of actual or
compensatory damages; in such cases there is no
compatibility between actual and temperate
damages.
REQUISITES:
1. Some pecuniary loss;
2. Loss is incapable of pecuniary estimation;
3. Must be reasonable.
SECTION 4. - Liquidated Damages
Art. 2226. Liquidated damages are those agreed
upon by the parties to a contract, to be paid in case
of breach thereof.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Art. 2227. Liquidated damages, whether intended
as an indemnity or a penalty, shall be equitably
reduced if they are iniquitous or unconscionable.
WHEN LIQUIDATED DAMAGES MAY BE
REDUCED:
1. When iniquitous of unconscionable;
2. When there is partial or irregular
performance.
Art. 2228. When the breach of the contract
committed by the defendant is not the one
contemplated by the parties in agreeing upon the
liquidated damages, the law shall determine the
measure of damages, and not the stipulation.
SECTION 5. - Exemplary or Corrective Damages
Art. 2229. Exemplary or corrective damages are
imposed, by way of example or correction for the
public good, in addition to the moral, temperate,
liquidated or compensatory damages.
Art. 2230. In criminal offenses, exemplary damages
as a part of the civil liability may be imposed when
the crime was committed with one or more
aggravating circumstances. Such damages are
separate and distinct from fines and shall be paid to
the offended party.
NOTE: In any case, even without the attendance of
aggravating circumstance, exemplary damages
may still be awarded where the circumstances of
the case show the “highly reprehensible or
outrageous conduct of the offender (P. vs. Laog,
GR No. 178321, Oct. 5, 2011).
Thus, exemplary damages can be granted
despite lack of allegation in the
complaint/information of attendant
aggravating circumstances.
As per recent jurisprudence, exemplary
damages in the amount of 30,000 may be
granted in proper cases.
Art. 2231. In quasi-delicts, exemplary damages may
be granted if the defendant acted with gross
negligence.
Art. 2232. In contracts and quasi-contracts, the
court may award exemplary damages if the
defendant acted in a wanton, fraudulent, reckless,
oppressive, or malevolent manner.
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Art. 2233. Exemplary damages cannot be
recovered as a matter of right; the court will decide
whether or not they should be adjudicated.
Art. 2234. While the amount of the exemplary
damages need not be proved, the plaintiff must
show that he is entitled to moral, temperate or
compensatory damages before the court may
consider the question of whether or not exemplary
damages should be awarded. In case liquidated
damages have been agreed upon, although no
proof of loss is necessary in order that such
liquidated damages may be recovered,
nevertheless, before the court may consider the
question of granting exemplary in addition to the
liquidated damages, the plaintiff must show that he
would be entitled to moral, temperate or
compensatory damages were it not for the
stipulation for liquidated damages.
Art. 2235. A stipulation whereby exemplary
damages are renounced in advance shall be null
and void.
TRANSITIONAL PROVISIONS
Art. 2252. Changes made and new provisions and
rules laid down by this Code which may prejudice or
impair vested or acquired rights in accordance with
the old legislation shall have no retroactive effect.
For the determination of the applicable law in cases
which are not specified elsewhere in this Code, the
following articles shall be observed: (Pars. 1 and 2,
Transitional Provisions).
Art. 2253. The Civil Code of 1889 and other
previous laws shall govern rights originating, under
said laws, from acts done or events which took
place under their regime, even though this Code
may regulate them in a different manner, or may not
recognize them. But if a right should be declared for
the first time in this Code, it shall be effective at
once, even though the act or event which gives rise
thereto may have been done or may have occurred
under prior legislation, provided said new right does
not prejudice or impair any vested or acquired right,
of the same origin. (Rule 1)
Art. 2254. No vested or acquired right can arise
from acts or omissions which are against the law or
which infringe upon the rights of others. (n)
Art. 2255. The former laws shall regulate acts and
contracts with a condition or period, which were
executed or entered into before the effectivity of this
Code, even though the condition or period may still
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
be pending at the time this body of laws goes into
effect. (n)
Art. 2256. Acts and contracts under the regime of
the old laws, if they are valid in accordance
therewith, shall continue to be fully operative as
provided in the same, with the limitations
established in these rules. But the revocation or
modification of these acts and contracts after the
beginning of the effectivity of this Code, shall be
subject to the provisions of this new body of laws.
(Rule 2a)
Art. 2257. Provisions of this Code which attach a
civil sanction or penalty or a deprivation of rights to
acts or omissions which were not penalized by the
former laws, are not applicable to those who, when
said laws were in force, may have executed the act
or incurred in the omission forbidden or condemned
by this Code.
If the fault is also punished by the previous
legislation, the less severe sanction shall be
applied.
If a continuous or repeated act or omission was
commenced before the beginning of the effectivity
of this Code, and the same subsists or is
maintained or repeated after this body of laws has
become operative, the sanction or penalty
prescribed in this Code shall be applied, even
though the previous laws may not have provided
any sanction or penalty therefor. (Rule 3a)
Art. 2258. Actions and rights which came into being
but were not exercised before the effectivity of this
Code, shall remain in full force in conformity with
the old legislation; but their exercise, duration and
the procedure to enforce them shall be regulated by
this Code and by the Rules of Court. If the exercise
of the right or of the action was commenced under
the old laws, but is pending on the date this Code
takes effect, and the procedure was different from
that established in this new body of laws, the
parties concerned may choose which method or
course to pursue. (Rule 4)
Art. 2259. The capacity of a married woman to
execute acts and contracts is governed by this
Code, even if her marriage was celebrated under
the former laws. (n)
Art. 2260. The voluntary recognition of a natural
child shall take place according to this Code, even if
the child was born before the effectivity of this body
of laws. (n)
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Art. 2261. The exemption prescribed in Article 302
shall also be applicable to any support, pension or
gratuity already existing or granted before this Code
becomes effective. (n)
Art. 2262. Guardians of the property of minors,
appointed by the courts before this Code goes into
effect, shall continue to act as such,
notwithstanding the provisions of Article 320. (n)
Art. 2263. Rights to the inheritance of a person who
died, with or without a will, before the effectivity of
this Code, shall be governed by the Civil Code of
1889, by other previous laws, and by the Rules of
Court. The inheritance of those who, with or without
a will, die after the beginning of the effectivity of this
Code, shall be adjudicated and distributed in
accordance with this new body of laws and by the
Rules of Court; but the testamentary provisions
shall be carried out insofar as they may be
permitted by this Code. Therefore, legitimes,
betterments, legacies and bequests shall be
respected; however, their amount shall be reduced
if in no other manner can every compulsory heir be
given his full share according to this Code. (Rule
12a)
Art. 2264. The status and rights of natural children
by legal fiction referred to in article 89 and
illegitimate children mentioned in Article 287, shall
also be acquired by children born before the
effectivity of this Code. (n)
Art. 2265. The right of retention of real or personal
property arising after this Code becomes effective,
includes those things which came into the creditor's
possession before said date. (n)
Art. 2266. The following shall have not only
prospective but also retroactive effect:
(1) Article 315, whereby a descendant
cannot be compelled, in a criminal case, to
testify against his parents and ascendants;
(2) Articles 101 and 88, providing against
collusion in cases of legal separation and
annulment of marriage;
(3) Articles 283, 284, and 289, concerning
the proof of illegitimate filiation;
(4) Article 838, authorizing the probate of a
will on petition of the testator himself;
(5) Articles 1359 to 1369, relative to the
reformation of instruments;
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(6) Articles 476 to 481, regulating actions to
quiet title;
(7) Articles 2029 to 2031, which are
designed to promote compromise. (n)
Art. 2267. The following provisions shall apply not
only to future cases but also to those pending on
the date this Code becomes effective:
(1) Article 29, Relative to criminal
prosecutions wherein the accused is
acquitted on the ground that his guilt has
not been proved beyond reasonable doubt;
(2) Article 33, concerning cases of
defamation, fraud, and physical injuries. (n)
Art. 2268. Suits between members of the same
family which are pending at the time this Code goes
into effect shall be suspended, under such terms as
the court may determine, in order that compromise
may be earnestly sought, or, in case of legal
separation proceedings, for the purpose of
effecting, if possible, a reconciliation. (n)
2011 Bar Exam
(75) No decree of legal separation can be issued
(A) unless the children’s welfare is attended to first.
(B) without prior efforts at reconciliation shown
to be futile. (C) unless the court first directs
mediation of the parties. (D) without prior
investigation conducted by a public prosecutor.
Art. 2269. The principles upon which the preceding
transitional provisions are based shall, by analogy,
be applied to cases not specifically regulated by
them. (Rule 13a)
REPEALING CLAUSE
Art. 2270. The following laws and regulations are
hereby repealed:
(1) Those parts and provisions of the Civil
Code of 1889 which are in force on the date
when this new Civil Code becomes
effective:
(2) The provisions of the Code of
Commerce governing sales, partnership,
agency, loan, deposit and guaranty;
(3) The provisions of the Code of Civil
Procedure on prescription as far as
inconsistent with this Code; and
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(4) All laws, Acts, parts of Acts, rules of
court, executive orders, and administrative
regulations which are inconsistent with this
Code. (n)
Approved, June 18, 1949
1. To proscribe the conditions under which a
court or agency is competent to entertain a
suit or proceeding involving facts containing
a foreign element;
2. To determine the extent, validity and
enforceability of foreign judgment;
3. To determine for each class of cases the
particular system of law by reference to
which the rights of the parties must be
ascertained.

CONFLICT OF LAW LAW OF NATIONS

Nature
Municipal in character International in
character
Persons involved
Sovereign states; and
Dealt with by private other entities
individuals; possessing international
Governs individuals in personality like UN.
their private Governs states in their
transactions which relationships amongst
involve a foreign themselves

CONFLICT OF element
Transactions involved

LAWS
Generally affected by
Private transactions public interest; those in
between private general are of interest
individuals only to sovereign states
Remedies and sanctions
CHAPTER 1: GENERAL PROVISIONS May be peaceful or
forcible.
PRIVATE INTERNATIONAL LAW Peaceful includes –
1. Diplomatic
That part of the law of each State or nation which
determines whether, in dealing with a legal negotiations;
situation, the law of some other State or nation will 2. Tender and
be recognized, given effect, or applied (16 Am Jur, exercise of good
offices;
2nd, Conflict of Laws, sect.1).
3. Mediation;
That part of municipal law of a state which directs 4. Inquiry;
its courts and administrative agencies, when 5. Conciliation;
Resort to municipal 6. Arbitration;
confronted with a legal problem involving a foreign
element, whether or not they should apply a foreign tribunals 7. Judicial settlement
by ICJ;
law/s (Paras).
8. Reference ot
NOTE: A factual situation that cuts across territorial regional agencies.
lines and is affected by diverse laws of two or more Forcible –
1. Severance of
states is said to contain a foreign element.
2012 Bar Exam Question diplomatic
relations;
3. This attribute or incident of a case
2. Retorsions;
determine whether it is a conflict-of-laws case
3. Reprisals;
or one covered by domestic law. a) Cause of
4. Embargo;
action b) Foreign element c) Jurisdiction d)
5. Boycott;
Forum non conveniens
6. Non-intercourse;
7. Pacific blockades;
8. Collective
FUNCTIONS OF CONFLICT RULES:
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 471
____________________________________________________________________________________________________
measures under is governed by the law of the state where it is
the UN Charter; situated.
9. War.
Sources 7. Lex loci actus – law of the place where the act
Custom, Treaty, and is done.
Generally derived from General Principles of
the internal law of the Law, recognized by 8. Lex loci celebrationis – law of the place where
state; except any civilized nations and the contract was made.
conflict of law question juridical decisions and
governed by a treaty teachings of the most 9. Lex loci solutionis – law of the place of
highly qualified solution; the law of the place where payment or
publicists performance of a contract is to be made.

10. Lex loci delicti commissi – law of the place

SOURCES OF CONFLICT OF LAWS: where the crime took place.
1. Direct sources –
a. Constitutions; 11. Lex mercatoria – law merchant/ commercial
b. Codifications; law; system of laws adopted by all commercial
c. Special laws; nations and constitute as part of the law of the
d. International customs; land, part of common law.
e. Treatises; and
f. International conventions. 12. Lex non scripta – unwritten common law,
which includes general and particular customs
2. Indirect sources – and particular local law.
a. Natural moral law;
b. Work of writers. 13. Lex patriae – national law.

14. Depecage – where different aspects of a case

DEFINITION OF TERMS:
1. Lex Domicilii – law of domicile; in conflicts, the
law of one’s domicile applied in the choice of
law questions.
2. Lex Fori – law of the forum; that is, the positive
law of the state, country or jurisdiction of whose
judicial system the suit is brought or remedy is
sought. Substantive rights are determined by
the law where the action arose (lex loci) while
the procedural rights are governed by the law of
the place of the forum (lex fori).
3. Lex Loci Contractus – the law of the place
where the contract was made or the law of the
place where the contract is to be governed
(place of performance) which may or may not
be the same as that of the place where it was
made.
4. Lex Loci – law of the place.
5. Lex Loci Rei Sitae – law of the place where
the thing or subject matter is situated; the title to
realty or question or eral estate law can be
affected only by the law of the place where it is
situated.
6. Lex situs – law of the place where the property
is situated; the general rule is that real property
involving a foreign element may be governed by
different systems of law.
15. Renvoi Doctrine – doctrine whereby a jural
matter is presented which the conflict of laws
rules of the forum refer to a foreign law which in
turn, refers the matter back to the law of the
forum or a third state. When reference is made
back to the law of the forum, this is said to be
remission, while reference to a third state is
called transmission.
16. Double Renvoi – occurs when the local court
in adopting the foreign court theory, discovers
that the foreign court accepts the renvoi;
ultimately, then, the foreign internal law shall be
applied.
17. Foreign court theory – the local forum, in
deciding the case, will put itself in the position
of the foreign court, and whatever the foreign
court will do respecting the case, the local
forum will likewise do.
18. Desistment – mutual disclaimer of jurisdiction.
19. Nationality theory – by virtue of which the
status, condition and capacity of an individual
are generally governed by the law of his
nationality. This is the principle applied in this
jurisdiction.

JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 472

____________________________________________________________________________________________________
20. Domiciliary theory – in general, the status,
condition, rights, obligations, and capacity of a
person should be governed by the law of his
domicile.
21. Long arm statutes – statutes allowing the
courts to exercise jurisdiction when there are
minimum contacts between the non-resident
defendant and the forum.
Torts; Prescriptive Period (2004) Lex Fori is applied
In a class suit for damages, plaintiffs claimed they
suffered injuries from torture during martial law. The suit
was filed upon President EM’s arrival on exile in HI, a
U.S. state. The court in HI awarded plaintiffs the
equivalent of P100 billion under the U.S. law on alien tort
claims. On appeal, EM’s Estate raised the issue of
prescription. It argued that since said U.S. law is silent
on the matter, the court should apply: (1) HI’s law setting
a two-year limitation on tort claims; or (2) the Philippine
law which appears to require that claims for personal
injury arising from martial law be brought within one year.
Plaintiffs countered that provisions of the most analogous
federal statute, the Torture Victims Protection Act, should
be applied. It sets ten years as the period for prescription.
Moreover, they argued that equity could toll the statute of
limitations. For it appeared that EM had procured
Constitutional amendments granting himself and those
acting under his direction immunity from suit during his
tenure.
In this case, has prescription set in or not? Considering
the differences in the cited laws, which prescriptive period
should be applied: one year under Philippine law, two
years under HI’s law, ten years under U.S. federal law, or
none of the above? Explain. (5%)
SUGGESTED ANSWER:
The US Court will apply US law, the law of the Jorum, in
determining the applicable prescriptive period. While US
law is silent on this matter, the US Court will not apply
Philippine law in determining the prescriptive period. It is
generally affirmed as a principle in private international
law that procedural law is one of the exceptions to the
application of foreign law by the forum. Since prescription
is a matter of procedural law even in Philippine
jurisprudence, (Codaltn v. POEA/ JVLRC/Broum and
Root International, 238 SCRA 721 [1994]), the US Court
will apply either HI or Federal law in determining the
applicable prescriptive period and not Philippine law. The
Restatement of American law affirms this principle.
CHAPTER 2: JURISDICTION
In international law, it is often defined as the right of
a state to exercise authority over persons and
things within its boundaries, subject to certain
exceptions.
JURISDICTION OVER THE PERSON
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
1. Jurisdiction over the person of the plaintiff is
acquired from the moment he invokes the aid of
the court and voluntarily submits himself by
institution of the suit through proper pleadings.
2. Jurisdiction over the person of the defendant is
acquired through –
a. Voluntary appearance;
b. Personal or substituted service of
summons.
JURISDICTION OVER THE PROPERTY
1. Results either from seizure of the property
under a legal process or from the institution of
legal proceedings wherein the court’s power
over the property is recognized and made
effective.
2. This kind of jurisdiction is referred to as in rem
jurisdiction. Another form of jurisdiction is quasi-
in rem which affects only the interests of
particular persons in the thing.
Note: Summons by publication is authorized in
3 cases –
a. If the action is in rem;
b. Action is quasi-in rem;
c. Action involves the personal status of
the plaintiff.
COMPLETE JURISDICTION
Power to hear and decide the case and to carry into
effect its judgment.
MINIMUM CONTACTS TEST AND
FUNDAMENTAL FAIRNESS TEST
 Due process requires only that in order to
subject a defendant to a judgment in
personam, if he is not present within the
territory he should have certain minimum
contacts with it such that the maintenance
of the suit does not offend traditional
notions of fair play and substantial justice.
 In both in rem and quasi-in rem, all that due
process requires is that defendant be given
adequate notice and opportunity to be
heard which are met by service of
summons by publication.
LONG ARM STATUTES
Statutes which specify the kinds of contacts which
jurisdiction will be asserted over a defendant
outside of state territory.
Definition; Cognovit; Borrowing Statute;
Characterization(1994)
In Private International Law (Conflict of Laws) what is: 1}
Cognovit? 2) A borrowing statute? 3) Characterization?
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SUGGESTED ANSWER:
1) a) COGNOVIT is a confession of judgment whereby a
portion of the complaint is confessed by the defendant
who denies the rest thereof (Philippine law Dictionary, 3rd
Ed.) (Ocampo v. Florenciano, L-M 13553, 2/23/50).
b) COGNOVIT is a "statement of confession" Oftentimes,
it is referred to as a "power of attorney" or simply as a
"power", it is the written authority of the debtor and his
direction to the clerk of the district court, or justice of the
peace to enter judgment against the debtor as stated
therein. (Words and Phrases, vol. 7, pp. 115-166).
c) COGNOVIT is a plea in an action which acknowledges
that the defendant did undertake and promise as the
plaintiff in its declaration has alleged, and that it cannot
deny that it owes and unjustly detains from the plaintiff
the sum claimed by him in his declaration, and consents
that judgment be entered against the defendant for a
certain sum. [Words and Phrases, vol. 7, pp. 115-166).
d) COGNOVIT is a note authorizing a lawyer for
confession of judgment by defendant.
2) "BORROWING STATUTE" -Laws of the state or
jurisdiction used by another state in deciding conflicts
questioned involved in the choice of law (Black's Law
Dictionary, 5th ed. 1979).
3) a) "CHARACTERIZATION" is otherwise called
"classification" or "qualification." It is the process of
assigning a disputed question to its correct legal category
(Private International Law, Salonga).
b) "CHARACTERIZATION" is a process in determining
under what category a certain set of facts or rules fall.
(Paras, Conflict of Laws, p. 94. 1984 ed.)
JURISDICTION OVER THE SUBJECT MATTER
Jurisdiction over the subject matter is conferred by
law and never by agreement of the parties.
Note: For more substantial discussions on the topic
of jurisdiction, please refer to the Remedial Law
Reviewer.
CHAPTER 3: WAYS OF DISPOSING CONFLICTS
CASES.
1. Dismiss the case for lack of jurisdiction.
2. Dismiss the case on the ground of forum
non-conveniens.
DOCTRINE OF FORUM NON-CONVENIENS
A forum may resist imposition upon its
jurisdiction even when jurisdiction is authorized
by law on the ground that the forum is
inconvenient or the ends of justice would be
best served by trial in another forum or the
controversy may be more suitably tried
elsewhere.
Elements:
a. The forum state is one to which the
parties may conveniently resort to;
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
b. It is in the position to make an
intelligent decision as to the law and
the facts; and
c. It has or is likely to have power to
enforce its decision.
Both our citizens and aliens should endeavor to
have their rights established by the tribunals of
the State, which have coercive means to
enforce their decisions; otherwise, a person
runs the risk of incurring useless expenditures
to obtain a judgment that cannot be enforced
(Ibanez, 29 Phil 606).
Definition; forum non-conveniens; long-arm statute
(1994)
1) What is the doctrine of Forum non conveniens? 2)
What is a "long arm statute"?
SUGGESTED ANSWER:
1) a) FORUM NON CONVENIENS is a principle in
Private International Law that where the ends of justice
strongly indicate that the controversy may be more
suitably tried elsewhere, then jurisdiction should be
declined and the parties relegated to relief to be sought in
another forum. (Moreno. Philippine Law Dictionary, p.
254, 1982 ed.).
b) Where in a broad sense the ends of justice strongly
indicate that the controversy may be more suitably tried
elsewhere, then jurisdiction should be declined and the
parties relegated to relief to be sought in another forum.
(Handbook on Private International Law, Aruego).
c) FORUM NON CONVENIENS means simply that a
court may resist imposition upon its jurisdiction even
when jurisdiction is authorized by the letter of a general
venue statute. (Salonga. Private International Law. p, 51.
1967 ed.)
d) Forum non conveniens is a doctrine whereby a court of
law having full Jurisdiction over a case brought in a
proper venue or district declines to determine the case on
its merits because Justice would be better served by the
trial over the case in another jurisdiction. (Webster's
Dictionary)
SUGGESTED ANSWER:
(2} a) LONG ARM STATUTE is a legislative act which
provides for personal jurisdiction, via substituted service
or process, over persons or corporations which are
non¬residents of the state and which voluntarily go into
the state, directly or by agent or communicate with
persons in the state for limited purposes, inactions which
concern claims relating to performance or execution of
those purposes (Black's Law Dictionary, 5th Ed. 1979).
b) Long arm statute refers simply to authorized
substituted service.
Forum Non Conveniens & Lex Loci Contractus (2002)
Felipe is a Filipino citizen. When he went to Sydney for
vacation, he met a former business associate, who
proposed to him a transaction which took him to Moscow.
Felipe brokered a contract between Sydney Coals Corp.
(Coals), an Australian firm, and Moscow Energy Corp.
(Energy), a Russian firm, for Coals to supply coal to
Energy on a monthly basis for three years. Both these
firms were not doing, and still do not do, business in the
Philippines. Felipe shuttled between Sydney and Moscow
to close the contract. He also executed in Sydney a
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commission contract with Coals and in Moscow with Coals and Energy as the court was not able to acquire
Energy, under which contracts he was guaranteed jurisdiction over the said corporations. (Manila Hotel
commissions by both firms based on a percentage of Corp. v. NLRC. 343 SCRA 1, 13¬14[2000])
deliveries for the three-year period, payable in Sydney
and in Moscow, respectively, through deposits in
accounts that he opened in the two cities. Both firms paid
Felipe his commission for four months, after which they 3. Assume jurisdiction and apply the forum
stopped paying him. Felipe learned from his contacts, law.
who are residents of Sydney and Moscow, that the two
firms talked to each other and decided to cut him off. He
now files suit in Manila against both Coals and Energy for INSTANCES WHEN THE INTERNAL LAW
specific performance. SHOULD BE APPLIED:
A. Define or explain the principle of “lex loci
contractus”. (2%) a. A specific law of the forum decrees
B. Define or explain the rule of “forum non that internal law should apply.
conveniens” (3%)
C. Should the Philippine court assume jurisdiction Examples:
over the case? Explain. (5%) 1) Art. 16. Real property as well as
SUGGESTED ANSWER: personal property is subject to the
A. LEX LOCI CONTRACTUS may be understood in two law of the country where it is
senses, as follows: situated.
(1) It is the law of the place where contracts, wills, and However, intestate and
other public instruments are executed and governs their testamentary successions, both
“forms and solemnities”, pursuant to the first paragraph, with respect to the order of
Article 17 of the New Civil Code; or succession and to the amount of
successional rights and to the
(2) It is the proper law of the contract; e.i., the system of intrinsic validity of testamentary
law intended to govern the entire contract, including its provisions, shall be regulated by
essential requisites, indicating the law of the place with the national law of the person
which the contract has its closest connection or where the whose succession is under
main elements of the contract converge. As country of consideration, whatever may be
which they are citizens. Since their marriage is illustrated the nature of the property and
by Zalamea v. Court of Appeals (228 SCRA 23 [1993]), it regardless of the country wherein
is the law of the place where the airline ticket was issued, said property may be found.
where the passengers are nationals and residents of, and
where the defendant airline company maintained its 2) Art. 829. A revocation done
office. outside the Philippines, by a
ALTERNATIVE ANSWER: person who does not have his
A. Under the doctrine of lex loci contractus, as a general domicile in this country, is valid
rule, the law of the place where a contract is made or when it is done according to the
entered into governs with respect to its nature and law of the place where the will was
validity, obligation and interpretation. This has been said made, or according to the law of
to be the rule even though the place where the contract the place in which the testator had
was made is different from the place where it is to be his domicile at the time; and if the
performed, and particularly so, if the place of the making revocation takes place in this
and the place of performance are the same (United country, when it is in accordance
Airline v. CA, G.R. No. 124110, April 20, 2001). with the provisions of this Code.
SUGGESTED ANSWER:
B. FORUM NON CONVENIENS means that a court has 3) Art. 819. Wills, prohibited by the
discretionary authority to decline jurisdiction over a cause preceding article, executed by
of action when it is of the view that the action may be Filipinos in a foreign country shall
justly and effectively adjudicated elsewhere. not be valid in the Philippines,
SUGGESTED ANSWER: even though authorized by the
C. No, the Philippine courts cannot acquire jurisdiction laws of the country where they
over the case of Felipe. Firstly, under the rule of forum may have been executed.
non conveniens, the Philippine court is not a convenient
forum as all the incidents of the case occurred outside the b. When the proper foreign law was not
Philippines. Neither are both Coals and Energy doing
business inside the Philippines. Secondly, the contracts
properly pleaded and proved.
were not perfected in the Philippines. Under the principle
of lex loci contractus, the law of the place where the NOTE: As a general rule, courts do not
contract is made shall apply. Lastly, the Philippine court take judicial notice of foreign laws;
has no power to determine the facts surrounding the foreign laws must be pleaded and
execution of said contracts. And even if a proper decision proved.
could be reached, such would have no biding effect on

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Actions that may be resorted in case
of failure to plead and prove proper
foreign law –
1) Dismiss the case for inability to
establish cause of action;
2) Assume that the foreign law is
the same as the law of the
forum (doctrine of processual
presumption).
3) Apply the law of the forum.
c. When exempted from the application
of foreign law
FOREIGN LAW CANNOT APPLY
WHEN –
1) The foreign law is contrary to
the public policy of the forum;
2) The foreign law is procedural in
nature;
3) The case involves issues
related to real or personal
property located in foreign
territory (lex situs applies);
4) The foreign law or judgment is
contrary to morals (contra
bonos mores);
5) The foreign law is penal in
character;
6) The application of the foreign
law would work undeniable
injustice to the citizens of the
forum;
7) The application of the foreign
law might endanger the vital
interest of the state.
4. Assume jurisdiction and apply foreign
law.
GR: No rule of private international law
would be violated if the courts should
decide to dispose of cases, according to
the internal law of the forum.
Except: Where a foreign, sovereign,
diplomatic official, or public vessel or
property of another state is involved, or
where a state has by treaty, accepted
limitations upon its jurisdiction over certain
persons or things.
THEORIES WHY FOREIGN LAW
SHOULD BE GIVEN EFFECT:
a. Theory of Comity – foreign law is
applied because of its convenience and
because we want to give protection to
our citizens, residents, and transients in
our land.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
b. Theory of Vested Rights – we seek to
enforce not foreign law itself but the
rights that have been vested under
such foreign law; an act done in
another state may give rise to the
existence of a right if the laws of that
state created such right.
c. Theory of Local Law – we apply the
foreign law not because it is foreign, but
because our laws, by applying similar
rules, requires us to do so; hence, it is
as if the foreign law has become part
and parcel of our local law.
d. Theory of Harmony of Laws – we
have to apply the foreign laws so that
wherever a case is decided, that is,
irrespective of the forum, the solution
should approximately be the same;
thus, identical or similar solutions
anywhere and everywhere. When the
goal is realized, there will be harmony
of laws.
e. Theory of Justice – the purpose of all
laws, including Conflict of Laws, is the
dispensing of justice, if this can be
attained in many cases applying the
proper foreign law, we must do so.
CHAPTER 4: RECOGNITION AND
ENFORCEMENT OF FOREIGN JUDGMENTS
A foreign judgment is recognized when it is given
the same effect that it has in the state where it was
rendered with respect to the parties, the subject
matter of the action and the issues involved. Where
the foreign judgment is being presented as a
defense to the claim of the plaintiff, what is involved
is the recognition of a foreign judgment.
A foreign judgment is enforced when, in addition to
being recognized, a party is given affirmative relief
to which the judgment entitles him. When the
plaintiff asks the court of one state to carry out and
make effective a judgment obtained by him in
another state, what is involved is the enforcement
of a foreign judgment.
REQUISITES: (for recognition and enforcement)
1. Foreign judgment was rendered by a judicial or
a quasi-judicial tribunal which had competent
jurisdiction over the parties and the case in the
proper judicial proceedings in which the
defendant shall have been given reasonable
notice and opportunity to be heard;
2. It must be a judgment on civil and commercial
matters;
3. The judgment must be valid according to the
court that delivered it.
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4. Judgment must be final and executory to (a) In case of a judgment or final order upon a
constitute res judicata in another action. specific thing, the judgment or final order, is
5. Foreign judgment must not be contrary to the
conclusive upon the title to the thing, and
public policy or the good morals of the state
where it is to be enforced; and
6. Judgment must not have been obtained by (b) In case of a judgment or final order against a
fraud, collusion, mistake of fact or mistake of person, the judgment or final order is presumptive
law. evidence of a right as between the parties and their
7. The foreign judgment must not be barred by
prescription under the law of the state in which successors in interest by a subsequent title.
it was promulgated or under the law of the state
in which its recognition/enforcement is sought. In either case, the judgment or final order may be
repelled by evidence of a want of jurisdiction, want of
notice to the party, collusion, fraud, or clear mistake of
RECOGNITION ENFORCEMENT law or fact.
Courts will allow the Plaintiff wants courts to
foreign judgment to be positively carry out and
presented as a defense make effective in the CHAPTER 5: CHARACTERIZATION
to a local litigationstate a foreign judgment
Involves merely the Virtually implies a direct The process by which a court at the beginning of a
sense of justice act of sovereignty choice of law process assigns a disputed question
Necessitates a separate to the proper area in substantive law.
Does not require either action or proceeding
an action or a special brought precisely to STAGES IN CHARACTERIZATION:
proceeding make the foreign 1. Determination of the factual situation;
judgment effective 2. Characterization of the factual situation;
May exist without Necessarily carries with 3. Determination of the applicable conflict rule;
enforcement it recognition 4. Characterization of the point of contact or
For BOTH, recognition and enforcement, proof of the connecting factor;
foreign judgment shall have to be presented. 5. Determination between procedural and
Moreover, the requisites or conditions for the substantive matter;
recognition or enforcement of foreign judgments 6. Pleading and proving the proper law.
must be present.
STATUTE OF FRAUDS
1. Substantive – if the words of the law relate
PROOF OF FOREIGN LAWS: to the forbidding the obligation.
2. Procedural – if the law forbids the
1. Written Law – enforcement of the obligation.
a. By written publication
b. Copy attested to by the officer having
custody accompanied with a certificate STATUTE OF LIMITATIONS
that such officer has the custody and 1. Substantive – when the limitation was
sealed by the appropriate public officer directed to the newly created liability
(section. 24, Rule 132 of the Rules of specifically to warrant a qualification of the
Court. right.
2. Procedural – if it operates to bar the legal
2. Unwritten Law – remedy without impairing the substantive
a. Oral testimony of expert witnesses; right involved.
b. Writings of jurists.
BORROWING STATUTES
Direct the state of the forum to apply the foreign
EFFECTS OF FOREIGN JUDGMENTS: statute of limitations to the pending claim based on
Section 48, Rule 39, Rules of Court. Effect of foreign a foreign law (treats the statute of limitations as a
judgments or final orders. — The effect of a judgment substantive law).
or final order of a tribunal of a foreign country, having
jurisdiction to render the judgment or final order is as DEPECAGE
follows: The phenomenon where the different aspects of the
case involving a foreign element may be governed
by different systems of laws.

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TESTS OR FACTORS TO DETERMINE POINTS
OF CONTACT:
Circumstances which may serve as the possible
test for the determination of applicable law –
1. The nationality of a person, his domicile,
residence, place of sojourn or his origin;
2. The seat of legal or juridical person;
3. Lex situs;
4. Locus actus;
5. The place where the act is intended to take
effect, the place of performance of
contractual duties, or the place where the
power of attorney is to be exercised;
6. Lex loci intentionis;
7. Lex fori;
8. The flag of the ship. Which in many cases
is decisive of practically all legal
relationships of the ship and of its master or
owner as such.
CHAPTER 6: PERSONAL LAWS
 The law which governs a person’s family
relations, capacity or status.
 Three most common personal laws are the
Nationality Rule, Domiciliary Rule, and
Eclectic Theory.
NATIONALITY LAW THEORY
The Philippines adheres to the nationality theory.
Art. 15. Laws relating to family rights and duties, or
to the status, condition and legal capacity of
persons are binding upon citizens of the
Philippines, even though living abroad.
Nationality Theory (2004)
PH and LV are HK Chinese. Their parents are now
Filipino citizens who live in Manila. While still students in
MNS State, they got married although they are first
cousins. It appears that both in HK and in MNS State first
cousins could marry legally.
They plan to reside and set up business in the
Philippines. But they have been informed, however, that
the marriage of first cousins here is considered void from
the beginning by reason of public policy. They are in a
dilemma. They don’t want to break Philippine law, much
less their marriage vow. They seek your advice on
whether their civil status will be adversely affected by
Philippine domestic law? What is your advice? (5%)
SUGGESTED ANSWER:
My advise is as follows: The civil status of' PH and LV will
not be adversely affected by Philippine law because they
are nationals of Hong Kong and not Filipino
citizens.Being foreigners, their status, conditions and
legal capacity in the Philippines are governed by the law
of Hong Kong, the
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
valid under Hong Kong law, it shall be valid and
respected in the Philippines.
PROBLEMS IN APPLYING THE NATIONALITY
PRINCIPLES
1. Multiple Citizenship – in matters of status, he
is usually considered by the forum as
exclusively his own national, his additional
foreign nationality is disregarded.
In case the litigation arises in a third
country, the most consistently applied
is that of the country of which the
person is not only a national but where
he has his domicile or habitual
residence or in the absence thereof, his
residence.
NOTE: Article 5 of the Hague Convention on
the Conflict of Nationality Laws provides: “a
third state shall, of the nationalities which such
person possesses, recognize exclusively in its
territory either the nationality of the country of
which he is habitually and principally resident,
or the nationality of the country with which in
the circumstances he appears to be closely
connected”.
MULTIPLE CITIZENSHIP ARISES DUE TO:
a. Through a naturalized citizen’s failure
to comply with certain legal
requirements in the country of origin;
b. From combined application of jus soli
and jus sanguinis principle;
c. By the legislative acts of the states;
d. By voluntary act of individual
concerned.
2. Statelessness
Stateless persons are generally subject to the
law of their domicile or habitual residence, or in
default thereof, to the law of their temporary
residence.
STATELESSNESS ARISES DUE TO:
a. Deprivation of his citizenship for any
cause, such as commission of a crime;
b. Renunciation of one’s nationality by
certain acts, express or implied;
c. Voluntary release from his original
state;
d. If born in a country which recognizes
only the principle of jus sanguinis of
parents whose law recognizes only the
principle of jus soli.
NOTE; The Convention on the Adoption on
the Reduction of Statelessness (1961)
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mandates that the jus sanguinis country DOMICILE
grants its nationality to person born within Is that place where a person has certain settled,
its territory if he would be otherwise fixed, legal relations because –
stateless, and jus soli country to extend its
nationality to a person who would otherwise 1. It is assign to him by law at the moment
be considered stateless when of his of birth (Domicile of Origin).
parents is a citizen of contracting state. 2. It is assigned to him by law after birth
on account of legal disability caused for
Naturalization (2003) instance by minority, insanity or
Miss Universe, from Finland, came to the Philippines on a marriage in the case of a woman
tourist visa. While in this country, she fell in love with and (Constructive Domicile or Domicile
married a Filipino doctor. Her tourist visa having been by Operation of Law).
expired and after the maximum extension allowed
therefore, the Bureau of Immigration and Deportation
3. He has a home there – that to which
(BID) is presently demanding that she immediately leave whenever he is absent, he intends to
the country but she refuses to do so, claiming that she is return (Domicile of Choice).
already a Filipino Citizen by her marriage to a Filipino
citizen. Can the BID still order the deportation of Miss NOTE: The forum determines domicile
Universe? Explain. 5% according to his own standards.
SUGGESTED ANSWER:
Yes, the BID can order the deportation of Miss Universe.
The marriage of an alien woman to a Filipino does not GENERAL RULES ON DOMICILE:
automatically make her a Filipino Citizen. She must first
prove in an appropriate proceeding that she does not
1. No natural person must ever be without a
have any disqualification for Philippine citizenship. (Yung domicile;
Uan Chu v. Republic of the Philippines, 158 SCRA 593 2. No person can have two or more domiciles
[1988]). Since Miss Universe is still a foreigner, despite at the same time, except for certain
her marriage to a Filipino doctor, she can be deported purposes and from different legal
upon expiry of her allowable stay in the Philippines. viewpoints.
ANOTHER SUGGESTED ANSWER: 3. Every sui juris (competent person) may
No, the Bureau of Immigration cannot order her change his domicile;
deportation. An alien woman marrying a Filipino, native- 4. Once acquired, it remains the domicile
born or naturalized, becomes ipso facto a Filipino if she is
not disqualified to be a citizen of the Philippines (Mo Ya
unless a new one is obtained –
Lim v Commission of Immigration, 41 SCRA 292 [1971]),
(Sec 4, Naturalization Law). All that she has to do is a. By capacitated persons;
prove in the deportation proceeding the fact of her b. With freedom of choice;
marriage and that she is not disqualified to become a c. With actual physical presence;
Filipino Citizen. d. And provable intent that it should
ANOTHER SUGGESTED ANSWER: be one’s fixed and permanent
It depends. If she is disqualified to be a Filipino citizen, place of abode, there should be
she may be deported. If she is not disqualified to be a animus manendi (intent to remain)
Filipino citizen, she may not be deported. An alien
woman who marries a Filipino citizen becomes one. The
or animus no-revertendi (intent not
marriage of Miss Universe to the Filipino doctor did not to return)
automatically make her a Filipino citizen. She still has to e. The presumption is in favor of
prove that she is not disqualified to become a citizen. continuance of domicile. The
burden of proof is on the one who
alleges that a change of domicile
DOMICILIARY THEORY has taken place.
The individual’s private rights, status, capacity and
conditions are determined by his domicile.
Abandonment of one’s domicile requires deliberate
Domiciliary theory vs. Nationality Theory (2004) and provable choice of a new domicile, coupled
Distinguish briefly but clearly between: Domiciliary theory with actual residence in the place chosen, with a
and nationality theory of personal law. (5%) declared or provable intent that it should be one’s
SUGGESTED ANSWER: fixed and permanent place of abode (Vellila vs.
DOMICILIARY THEORY posits that the personal status
Posadas).
and rights of a person are governed by the law of his
domicile or the place of his habitual residence. The
NATIONALITY THEORY, on the other hand, postulates
that it is the law of the person's nationality that governs SITUS OR ECCLECTIC THEORY
such status and rights The capacity, legal condition, or status of an
individual should be governed by the law of the

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place where an important element of the problem
occurs or is situated.
CHAPTER 7: RENVOI
RENVOI
A procedure whereby a legal matter is referred by
the conflict of law rules of the forum to a foreign
state, the conflict of laws rule of which, in turn refers
the matter back to the law of the forum (remission
or a third state (transmission)
Divorce; effect of divorce granted to former Filipinos;
Renvoi Doctrine (1997)
In 1977, Mario and Clara, both Filipino citizens, were
married in the Philippines. Three years later, they went to
the United States of America and established their
residence in San Francisco, California. In 1987, the
couple applied for, and were granted, U.S. citizenship. In
1989, Mario, claiming to have been abandoned by Clara,
was able to secure a decree of divorce in Reno, Nevada,
U.S.A.
In 1990, Mario returned to the Philippines and married
Juana who knew well Mario's past life.
(a) Is the marriage between Mario and Juana valid?
(b) Would the renvoi doctrine have any relevance to the
case?
SUGGESTED ANSWER:
(a) Yes, because Phil law recognizes the divorce
between Mario and Clara as valid.
SUGGESTED ANSWER:
(b) No, The renvoi doctrine is relevant in cases where
one country applies the domiciliary theory and the other
the
nationality theory, and the issue involved is which of the
laws of the two countries should apply to determine the
order of succession, the amount of successional rights,
or, the intrinsic validity of testamentary provisions. Such
issue is not involved in this case.
ALTERNATIVE ANSWER:
Yes. "Renvoi" - which means "referring back" is relevant
because here, we are applying U.S. law to Mario, being
already its citizen, although the formalities of the second
marriage will be governed by Philippine law under the
principle of lex loci celebrationis.
SOLUTIONS TO THE RENVOI:
1. Reject the renvoi
If the conflict rules of the forum refer the case to
the law of another state, it is deemed to mean
only the internal law of the state. Thus, the
court will apply the foreign law.
2. Accept the renvoi
If the conflict rules of the forum refer the case to
the law of another state, it is deemed to include
the totality of the foreign law. Thus, the court
will recognize the referral back and apply the
local law.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
3. Desistment theory
The forum court upon reference to another
state’s law sees that that such law is limited in
application to its nationals domiciled in its
territory and has no provision for the application
to nationals domiciled outside of the territory.
Hence, the local court will apply local law.
This has the same result as the acceptance of
renvoi but the process used by the forum court
is to desist applying the foreign law.
4. Foreign Court Theory
Forum court assumes the same possession
that the foreign court would take if the case is
litigated in the foreign state. Hence –
a. If the foreign court would accept the
renvoi, the local court will apply the
foreign law.
b. If the foreign court would reject the
renvoi, the local court shall apply the
local law;
c. If the foreign court would apply the
desistment theory, the local court shall
apply the foreign law;
d. If the foreign court would use the
foreign court theory, then international
pingpong would ensue.
DOUBLE RENVOI THEORY
Occurs when the local court, in adopting the foreign
court theory, discovers that the foreign court
accepts the renvoi.
The renvoi doctrine does not apply when the
referred foreign law does not have a conflict of rule
law on the same subject matter. The referral to the
foreign law shall immediately pertain to the internal
laws of the foreign state (Testate Estate of Amos G.
Bellis).
CHAPTER 8: RULE ON STATUS
Status is the place of an individual in a society and
consists of personal qualities and relationships,
more or less permanent, with which the state and
the community are concerned.
FACTUAL POINTS OF
SITUATION CONTACT
Beginning of National law of the
personality of natural child (art. 15, NCC)
persons
Ways and effects of National law
emancipation
Use of names and National law
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surnames 3. Ecclesiastical rule – the formalities of both
Age of majority National law the lex loci celebracionis and national law
Use of titles of nobility National law must be complied with.
Absence National law
Presumptions of death Lex fori (arts. 43, 390,
and survivorship 391, NCC; Rule 131, FACTUAL POINTS OF CONTACT
sec. 5 (jj), Rules of SITUATION
Court. Celebrated abroad
GR: Lex loci celebracionis
Exceptions:
CHARACTERISTICS OF STATUS: Between Filipinos 1. Arts. 26, 35 (1), (4), (5)
1. Status is conferred principally by the state and (6), 36, 37, and 38
not by the individual; of FamCod;
2. Status is a matter of public or social 2. Consular marriages
interest; GR: lex loci celebracionis.
3. Status being a concept of social order, Exceptions:
cannot easily be terminated at the mere will 1. Highly immoral
or desire of the parties concerned; (bigamous and
4. Status is supposed to have a universal polygamous marriages);
character; when a certain status is created Between 2. Universally considered
by law of one country, it is generally foreigners incestuous
judicially recognized all over the world. a. Between
brothers and
sisters;
CHAPTER 9: RULES ON MARRIAGE b. Between
ascendants and
Marriage as a Contract: - has two kinds of descendants.
requisites – Apply rule on marriages
Mixed between foreigners – to
Art. 2, FC. No marriage shall be valid, unless these uphold the validity of the
essential requisites are present: marriage
(1) Legal capacity of the contracting parties who Celebrated in the Philippines
must be a male and a female; and
National law (art. 21, FC)
(2) Consent freely given in the presence of the provided that the marriage is
solemnizing officer. Between not highly immoral or
foreigners universally considered
incestuous
Art. 3,FC. The formal requisites of marriage are: National law of the Filipino
Mixed (otherwise, public policy
(1) Authority of the solemnizing officer; may be offended
(2) A valid marriage license except in the cases
provided for in Chapter 2 of this Title; and Marriage by proxy

(3) A marriage ceremony which takes place with the Celebrated within the Phils.
appearance of the contracting parties before the National law and lex loci
solemnizing officer and their personal declaration Between Filipinos celebracionis (Not valid
that they take each other as husband and wife in the because of art. 2 [2], FC in
presence of not less than two witnesses of legal age.
relation to art. 17, NCC)
THEORIES ON THE FORMAL REQUISITES OF Lex loci celebracionis
Between (hence not valid because of
MARRIAGE:
foreigners art. 2 [2], FC in relation to
1. Compulsory theory – It is imperative for art. 17, NCC)
the parties to follow the formalities of the Mixed Lex loci celebracionis same
place of celebration. (This is followed in the as above
Philippines) Celebrated abroad
2. Optional theory – parties may follow either Lex loci celebracionis. Thus valid if valid in the
the lex loci celebracionis or their national place where it is celebrated.
law. This rule is followed in most countries.
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RULES GOVERNING EXTRINSIC VALIDITY:
GR: Lex loci celebracionis.
1. All states recognize as valid those marriages
celebrated in foreign countries if they comply
with the formalities prescribed therein (Hague
Convention).
2. The forms and solemnities of contracts, wills
and other public instruments shall be
governed by the laws of the country in which
they were executed (article 17, Civil).
3. All marriages solemnized outside the
Philippines in accordance with laws in force in
the country where they were solemnized and
valid there as such shall also be valid in this
country, subject to certain exceptions.
Exceptions to lex loci celebracionis:
1. Art. 26. All marriages solemnized outside
the Philippines, in accordance with the laws
in force in the country where they were
solemnized, and valid there as such, shall
also be valid in this country, except those
prohibited under Articles 35 (1), (4), (5) and
(6), 36, 37 and 38.
2. When lex situs applies.
INTRINSIC VALIDITY
Personal laws either domiciliary or nationality
theory.
MARRIAGE AS A STATUS
Marriage as a status carries with it implications in
two fields:
1. Personal rights and obligations of the
spouses – personal affair between
husband and wife will not ordinarily be
interfered by the courts of justice. Includes
mutual fidelity, cohabitation, respect,
assistance and support, right of wife to use
the husband’s surname, duty to follow
husband’s residence.
GOVERNING LAW
National law of the husband. Subsequent
change on the nationality of the spouses are
proposed to have the following effects –
a. If both will have common nationality –
the new one.
b. If only one will change – the last
common nationality.
c. If there never was any common
nationality – the national law of the
husband at the time of the wedding
(Hague Convention).
2. Property relations
GOVERNING LAW – In the absence of a
contrary stipulation in the marriage settlement,
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
national law of the husband regardless of the
place of celebration of the marriage and their
residence. However, this rule shall not apply –
a. Where both parties are aliens;
b. With respect to the extrinsic validity of
contracts affecting property not situated
in the Philippines and executed in the
country where the property is located.
c. With respect to the extrinsic validity of
contracts entered into in the Philippines
not affecting property situated in a
foreign country whose laws require
different formalities for their extrinsic
validity (art. 80, FC).
DOCTRINE OF IMMUTABILITY IN THE
MATRIMONIAL PROPERTY REGIME
The subsequent change of nationality of the
husband or the wife has no effect on the
spouses’ original property regime except when
the law of the original nationality itself changes
the marital regime, in which case the property
relations should change accordingly.
Legislative jurisdiction, aside from the authority
to enact laws, is the competence of a person’s
national law to govern his status (Recto vs.
Harden, 100 Phil. 427).
CHAPTER 10: ANNULMENT/DECLARATION OF
NULLITY/LEGAL SEPARATION
ANNULMENT/DECLARATION OF NULLITY
Grounds for annulment (if the marriage is merely
voidable) and grounds for the declaration of nullity
(if the marriage is void ab initio) are governed by
the law alleged to have been violated; in other
words, it is the law of the place of celebration,
subject to certain exceptions, that furnishes the
grounds.
1. Jurisdiction to annul – in practically all civil
countries following the nationality principle,
nationals of the forum are permitted to sue for
annulment irrespective of their domicile. In
many countries today however, jurisdiction is
vested in the court of the domicile of the parties.
Jurisdiction over the non-resident defendant is
not essential. It is the status of the plaintiff that
is in issue. He should be domiciled in the forum.
2. The governing law – lex loci celebracionis of
the marriage determines the consequences of
any defect to form. Generally, the same applies
with reference to substantive or intrinsic validity.
482
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But with regard to capacity of the parties to does not affect the
marry, their national law is determinative. status of the child
In general, national
ABSOLUTE DIVORCE Adoption – creation of law of the adopter.
GR: Our courts only observe relative divorce (legal the status of adoption;
separation). Any divorce sought in the Philippine rights and obligation of NOTE: In the
courts will not be granted. Filipino couples cannot the adopter and Philippines, adoption
obtain absolute divorce abroad and neither shall a adopted by a Filipino of an alien
valid divorce obtained abroad by Filipino couples be does not confer
recognized here. Filipino citizenship to
the adopted child.
Exceptions: Guardianship 1) Court of the
1. Valid divorce obtained abroad between a. Over the person - domicile of the
foreigners whose national laws allow 1. Appointing court ward
divorce. 2. Powers of 2) Coextensive with
2. Cases falling under article 26 par.2, FC. guardian those of
appointing court
Note: Hague Convention provides that the granting (law of the
of divorce or separation must comply with the b. Over the property appointing state)
national law of the spouses and the law of the place –
where the application for divorce is made. 1. Appointing court 1) Court where the
2. Powers of property is found
LEGAL SEPARATION guardian 2) Coextensive with
 There is no obstacle to aliens in securing those of the
relative divorce in the Philippines, provided: appointing court
a. Their national law is willing to recognize (law of the
Philippine jurisdiction. appointing state)
b. Separation is agreeable to the internal c. Over the person
law of the national state of the parties. and over the Combine the above.
property
NOTE: Grounds for Legal separation are the Funerals Where the body is
cumulative grounds provided by the national law of buried
the parties. GOVERNING LAW ON THE LEGITIMACY OF A
CHAPTER 11: LEGITIMACY, LEGITIMATION CHILD
AND ADOPTION The legitimacy of the child is determined by the
national law of the parents. If the parents belong to
different nationalities, legitimacy of the child is
FACTUAL POINT OF CONTACT determined by the national law of the male parent.
SITUATION
1. If legitimate – Note: Presumptions of Legitimacy are not mere
national law of the rules of evidence but are considered as substantive
father (art. 15, law, hence governed as well by the national law of
NCC); the male parent.
Paternity and Filiation 2. If illegitimate –
(including parental national law of the
authority and mother unless LEGITIMATE ILLEGITIMATE
reciprocal support) – recognized by the Use of father’s Use of mother’s
legitimacy, father in which and mother’s surname or
legitimation, case, national law Surname surname father’s
recognition, of the father; surname under
presumptions of 3. Determination of RA 9225 (March
legitimacy, rights and whether legitimate 19, 2004)
obligations of parents or legitimate Entitled to Entitled to ½ of
and children, including (national law of the legitime and legitime of
parental authority, and father, as a rule) other legitimate child
reciprocal support Legitime successional NOTE: the
Doctrine of rights granted legitime of the
Immutability of them by the children and the
Status – change of NCC surviving
parent’s nationality
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spouse must
not be impaired LAWS REGULATING RELATIONS BETWEEN
Entitled to LEGITIMATE/D CHILDREN AND PARENTS
receive
support from Receive support GR: Personal law of the father controls the rights
Support parents, according the and duties of parents and children.
ascendants, provision of FC Exception: Parental interest in the immovable
and in proper property of the child which may be regulated by the
cases, lex situs.
brothers and
sisters under Note: Reference to the personal law of the father
art. 174 may result in joint exercise of parental authority
 His/her over the property of the child by the father and
lifetime mother (art. 221, FC).
regardless of
type of RIGHTS AND OBLIGATIONS INVOLVED UNDER
His/her lifetime proofs PHILIPPINE LAWS INCLUDE:
regardless of provided 1. Personal care;
Action to claim the type of under art. 2. Parental authority;
for legitimacy proofs 172 par. 1; 3. Provide for education;
or illegitimacy provided under  Only lifetime 4. Reciprocal support.
art. 172 of the
alleged
parent for ADOPTION
art. 172 par. An act which renders a child legitimate in relation to
2 the adopting parents, to whom the child may or may
not be related.
Transmissibility
to heirs under Yes No JURISDICTION TO GRANT ADOPTION
art. 173 The Philippine Courts shall have jurisdiction to grant
No right to petition for adoption but must apply the lex fori with
inherit ab respect to procedural matters.
intestate from
Right to inherit Yes legitimate CAPACITY OF ALIENS TO ADOPT
ab intestate children and The cumulative substantive requirements of the
relatives of the forum and of the national law of the adopter must
father or mother be complied with (Salonga).
under art 992, EFFECTS OR CONSEQUENCES OF ADOPTION
NCC. (IRON- a. Successional rights – governed by the
SHIELD RULE) conflict rules on succession.
b. Parental authority – governed by the
national law of the adopter.
LAWS REGULATING RELATIONS BETWEEN
ILLEGITIMATE CHILDREN RECOGNITION OF DECREE ON ADOPTION
 Relations between the mother and the The Philippines recognizes the principle of foreign
illegitimate child are governed by the mother’s adoptions validly rendered and recognized where
personal law. effected. However, such adoption is still subject to
 If the child is later on legitimated, personal law the municipal law (like obligation to register said
of the child follows that of the father. adoption in the civil registry)

LEGITIMATION Exception: adoption will not be recognized if it is

contrary to public policy or resident’s interest forbids
Art. 177, FC. Children conceived and born outside of its enforcement (Agpalo).
wedlock of parents who, at the time of conception of
the former, were not disqualified by any impediment to
marry each other, or were so disqualified only because
either or both of them were below eighteen (18) years CHAPTER 12: RULES ON PROPERTY
of age, may be legitimated.(as amended by RA 9858,
July 27, 2009) RULES ON REAL PROPERTY
GR: Lex rei sitae [lex situs] (art. 16, NCC).
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Exceptions: Locus regit actum

1. Successional rights – national law of Validity and effect of (where the property is
decedent; the seizure of goods seized) because said
2. Capacity to succeed – national law of the place is their
decedent; temporary situs
3. Contracts involving real property which
do not deal with the title thereto – The
law intended will be the proper law of the
contract (lex loci voluntatis or lex loci Lex loci voluntatis or
intentionis). lex loci intentionis –
because here there is
Disposition or a contract
TANGIBLE PERSONAL PROPERTY alienation of goods
GR: Lex situs.
Exceptions: same as those for real property.

RULES GOVERNING DIFFERENT KINDS OF

TRANSFER:

1. Voluntary transfers of interests in INTANGIBLE PERSONAL PROPERTY

chattels (other than assignment for the (choses in action)
benefit of the creditors) – validity and effect FACTUAL POINT OF CONTACT
of conveyance as between parties are SITUATION
determined by the local law of the state Recovery of debts or Where the debtor may
which with respect to the particular issue, involuntary assignment be effectively served
has the most significant relationship to of debts (garnishment) with summons (usually
the parties. the domicile)
2. Acquisitions of title by operation of law Voluntary assignment Lex loci voluntatis of
(like acquisition by prescription, of debts lex loci intentionis
attachments, statutory lies) – governed by (proper law of the
lex situs. contract)
Taxation of debts Domicile of creditor
Lex situs of assets of
Administration of debts the debtor (for there
assets may be liable
for the debts)
TANGIBLE PERSONAL PROPERTY The right embodied in
(choses in possession) Negotiability and non- the instrument (for
FACTUAL POINT OF CONTACT negotiability of an example, in the case
SITUATION instrument of a Chinese bill of
Means of exchange, Chinese
transportation law determines its
Law of the flag (or in negotiability.
Vessels some cases, place of Validity of transfer, In general, situs of the
registry) delivery or negotiation instrument at the time
Law of the depot of an instrument of transfer, delivery or
Other means (storage place for negotiation
supplies or resting Effect on a corporation Law of the place of
place) of the sale of corporate incorporation
Things in transit (these shares
things have a Lex loci voluntatis or
changing status Effect between the lex loci intentionis – for
because they move parties of the sale of this is really a contract;
corporate shares usually this is the
Loss, destruction or Law of destination (art. place where the
deterioration 1753, NCC) certificate is delivered
Taxation on the Law of the place of
dividends of corporate incorporation

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____________________________________________________________________________________________________
shares
Taxation on the Law of the place Intrinsic validity of wills
income from the sale where the sale was It concerns itself with the order of succession, the
of corporate shares consummated amount of successional rights, and the intrinsic
Franchisees Law of the place that validity of the provisions of the will. It is governed by
granted them the national law of the person whose will is under
Goodwill of the Law of the place consideration in force at the time of his death.
business and taxation where the business is
thereto carried on Capacity to succeed is governed by the
In the absence of a law of the nation of the decedent (art.
treaty, they are 1039, NCC).
protected only by the
state that granted
Patents, copyrights, them. THEORIES ON THE PROPER LAW FO THE
trademarks, and trade NOTE: Foreigners TRANSMISSION OF SUCCESSIONAL RIGHTS
names may sue for 1. Unitary of single system – one law
infringement of governs the transmission of BOTH real and
trademarks and trade personal property.
names in the
Philippines only if 2. Split or scission system – one law
Filipinos are granted governs real property while another for
reciprocal concessions personal property.
in the state of the
foreigners
CADUCIARY RIGHT
It is the right of the state to claim through escheat
proceedings the properties of a decedent who are
CHAPTER 13: WILLS, SUCCESSIONS and not survived by any heir.
ADMINISTRATION OF CONFLICT RULES
Note, however, that under our jurisdiction, the state
is the last heir of any person:
Extrinsic validity of wills:
Deals with the forms and solemnities in the making Art. 1011, NCC. In default of persons entitled to
of wills. succeed in accordance with the provisions of the
preceding Sections, the State shall inherit the whole
estate.

GOVERNING LAWS: Hence, technically, caduciary right is not applied.

REVOCATION OF WILLS
1. If the testator is a Filipino
a. Executed in the Philippines – 1. Done in the Philippines – lex loci actus (law
Philippine law. of the place of revocation – art. 829, NCC).
b. Executed in foreign country 2. Done outside the Philippines –
I. Lex nationalii a. By a non-domiciliary
II. Lex loci celibrationis (art. I. Law of the place of making
817, NCC) of the will;
II. Law of the domicile.
2. If testator is an alien
a. Executed in the Philippines – b. By a domiciliary of RP –
I. Lex nationalii I. Law of domicile
II. Lex loci celebrationis (art. II. Law of the place of
815). revocation (in relation to
art. 17, par. 1, NCC).
b. Executed abroad –
I. Lex nationally PROBATE OF WILLS
II. Lex domicilii  If the will is not yet probated, lex fori of the RP
III. RP law (art. 816, NCC) applies as to the procedural aspects (like the
IV. Lex loci celebrationis (art. will must be duly probated here and due
17, par. 1, NCC) execution must be shown.

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____________________________________________________________________________________________________
 If the will is already probated abroad, lex fori of
the RP again applies as to the procedural
aspects. Although it has been probated abroad,
the will must also be probated here, but instead
of proving due execution, generally it is enough
to ask for the enforcement here of the foreign
judgment of the probate abroad.
EXECUTORS AND ADMINISTRATORS
1. The executor is qualified and the
administrator is appointed by the court of the
place where the deceased was domiciled at
the time of death; or in case of a non-
domiciliary, where the assets of properties of
the deceased are found.
2. Their rights, powers and obligations are co-
extensive with the qualifying or the appointing
court – powers may only be exercised within
the territorial jurisdiction of the court
concerned.
NOTE: These rules apply also to principal,
domiciliary, or ancillary administrators and receivers
even in non-succession cases.
(65) In the order of intestate succession where
the decedent is legitimate, who is the last
intestate heirs or heir who will inherit if all
heirs in the higher level are disqualified or
unable to inherit?
(A) Nephews and nieces. (B) Brothers and
sisters. (C) State. (D) Other collateral relatives
up to the 5th degree of consanguinity.
CHAPTER 14: RULES ON CONTRACTS
GR: Governed by lex loci celebrationis.
Exceptions:
1. Alienation and encumbrance of
property – lex situs.
2. Consular contracts – RP law if made in
RP consulates)
3. Revocation of a will in a foreign country
of a non-domiciliary of the Philippines is
in accordance with the law of the place
of making of the will or the testator’s
domicile, and NOT the place of
revocation (art. 829, NCC).
RULE ON VALIDATION
Parties entering into a contract upon equal terms
intended their agreement to be binding, and the law
will give effect on their intent whenever it can do so
under any law whose application the parties can
reasonably be assumed to have taken into account.
The rule on validation especially becomes
significant in cases involving multi-states
contracts and there is difficulty determining
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
where exactly the contract has been
celebrated.
INTRINSIC VALIDITY OF CONTRACTS
1. The intrinsic validity of contracts including
the interpretation of the instrument, and
amount of damages for breach is governed
by the proper law of the contract (lex
contactus, meaning lex voluntatis or lex loci
intentionis.
Note: The parties may stipulate that the
contract be governed by a specific law, such
will be recognized, such is subject to the
limitation that it is not against the law, morals
and public policy of the forum and it must bear
a substantive relationship to the transaction.
2. If there is no effective choice of law – the
governing law of the state with the most
substantial connection with the transaction
and parties governs.
The contacts to be taken into account in
determining the applicable law to an issue are
the following:
a. Place of contracting;
b. Place of negotiation;
c. Place of performance;
d. The location of the subject mater of the
contract;
e. The domicile, residence, nationality,
place of incorporation and place of
business of the parties.
The Philippines has no express conflict rules
regarding the intrinsic validity of contract. The SC
held that in such instances, the party may apply the
law expressly agreed upon by the parties or the law
intended by the parties to govern their transactions.
The intended law may be inferred from the
nationality of the parties, their residence, place of
performance, etc. in this case, the parties did not
agree upon on which law shall apply. Hence, the
SC, applied the law with the most substantial
connection to the transaction. Absent proof of the
law of the proper state, the presumption is that it is
the same as the law of the forum (VCEPI vs.
Philippine Guarantee).
CAPACITY TO ENTER INTO CONTRACTS
PHILIPPINE RULE: The capacity of the contracting
parties is governed by their national laws.
Exception: in alienation and encumbrance of
property, the capacity of the contracting parties is
governed by the lex situs (art. 16, [1]).
487
____________________________________________________________________________________________________
4. Special contracts.
The doctrine of estoppel may be invoked in
case a party incapacitated to enter into a
contract under his national law later invokes
such law to evade his obligations. CHAPTER 15: TORTS
PROVIDED: The other party entered the
contract in good faith.
The courts must uphold the Justified As a general rule, the liability and damages for torts
Expectations of the Party, especially in are governed by lex loci delicti (law of the place
cases where the national laws of the parties where the delict was committed).
are incidental or without substantial
connection to the contract. CHARACTERIZATION OF THE PLACE OF
WRONG (locus delicti)
OTHER THEORIES ON CAPACITY 1. Common law theory – looks to the place
THEORY DEFECT where the last event necessary to make an
Lex loci celebrationis Makes possible the actor liable for an alleged tort occurs
evasion of national law (where the injury is sustained.
Lex nationalii May impede 2. Civil law theory – view the situs of torts as
commercial the place where the tortuous act was
transaction committed.
Lex loci solutionis There may be several
places of performance OBLIGATION THEORY
Professor Minor’s The tortuous act gives rise to an obligation, which is
solution: transitory and follows the person committing the
1. Perfection – lex This theory combines tortuous act and may be enforced wherever he may
loci celebrationis all the defects of the be found.
2. Cause or others.
consideration – lex MODERN THEORIES IN TORT LIABILITY
loci considerationis
3. Performance – lex 1. Doctrine of Elective Concurrence –
solutionis Either the laws of the state where the actor
engaged in his conduct and where the
injury was incurred may be invoked.
CHOICE OF LAW ISSUES IN CONFLICTS
CANTRACT CASES 2. Theory of Most Significant Relationship
1. Choice of forum clause – parties may – The applicable law shall be the law of the
stipulate on the venue of the suit in case of country which has the most significant
litigation concerning the contract. However, a relationship to the situation. In determining
case arising from a contract will be litigated in the state which has the most significant
the forum chosen by the parties if the choice of relationship, the following factors are to be
the forum clause specifically identifies it as the taken into account –
only venue a. Place where the injury occurred;
b. Place of conduct causing the injury;
The SC held that where the relationship between c. Domicile, residence, nationality,
the parties is affected with public interest and the place of incorporation and place of
multiple and substantive contacts of the contracts business;
are with the Philippine law, Philippine courts may d. Place where the relationship of the
not be ousted of their jurisdiction (Pakistan parties is centered.
International Airlines vs. Ople).
3. State-Interest Analysis – This principle
2. Contracts with arbitration clause – many provides for the following methodology:
courts apply to arbitration agreements the law a. Determine false or spurious
of whatever place the parties have designated conflicts (like internal laws of
as governing, thus sustaining their agreement different states have the same
to arbitrate. result or when only one state has
3. Adhesion contracts – when there is no proof as interest in applying its tort law.
of arbitrariness, abuse of power, or gross b. If there is true conflict –
negligence, the contract or stipulation will be I. If interested forum – apply
enforced. the law of such state which

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has greater interest in
upholding its tort law
II. If disinterested forum –
dismiss on the ground of
forum non conveniens.
4. Caver’s Principle of Preference –
guideline on which rules on torts may be
applied by states in absence of statutory
provision:
a. Where the state of injury and
conduct provides for higher
standard of conduct or financial
protection against injury than the
state where the tortuous act was
done, the law of the former shall
govern.
b. Where the state of injury and
conduct provides for a lower
standard of conduct and financial
protection than the home state of
the person suffering injury, the law
of the state of conduct and injury
shall govern.
c. Where the state in which the
defendant has acted has
established special controls over
the conduct of the kind in which
defendant was engaged, the
special controls and benefits must
be applied although the state has
no relationship to the defendant.
d. Where the law in which the
relationship has its seat imposed
higher standard of conduct or
financial protection than the law of
the state of injury, the former shall
govern.
Theory; significant relationships theory (1994)
Able, a corporation domiciled in State A, but, doing
business in the Philippines, hired Eric, a Filipino engineer,
for its project in State B. In the contract of employment
executed by the parties in State B, it was stipulated that
the contract could be terminated at the company's will,
which stipulation is allowed in State B. When Eric was
summarily dismissed by Able, he sued Able for damages
in the Philippines. Will the Philippine court apply the
contractual stipulation?
SUGGESTED ANSWER:
a) Using the "SIGNIFICANT RELATIONSHIPS
THEORY", there are contacts significant to the
Philippines. Among these are that the place of business
is the Philippines, the employee concerned is a Filipino
and the suit was filed in the Philippines, thereby justifying
the application of Philippine law. In the American Airlines
case the Court held that when what is involved is
PARAMOUNT STATE INTEREST such as the
protection of the rights of Filipino laborers, the court can
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
natural mother as her middle name. The Court has ruled
disregard choice of forum and choice of law. Therefore
the Philippine Court should not apply the stipulation in
question.
ALTERNATIVE ANSWER:
b) No, lex fori should be applied because the suit is filed
in Philippine courts and Eric was hired in the Philippines.
The Philippine Constitution affords full protection to labor
and the stipulation as to summary dismissal runs counter
to our fundamental and statutory laws.
CONDITIONS FOR THE ENFORCEMENT OF
TORT CLAIMS
1. The tort is penal in character;
2. If the enforcement of the tortuous liability
won’t contravene our public policy;
3. If our judicial machinery is adequate for
such enforcement.
PHILIPPINE RULE
 Salonga suggests for the following
methodology in solving tort problems in the
Philippines –
a. Ascertain and weigh the purpose
underlying the tort law of the forum.
If the tort law of the Philippines
embodies a social or economic
policy, then the law of the forum on
torts shall be applied.
b. If the Philippines has no concern or
interest in the application of the
internal law and the other state
states have interest, apply the law
of such state.
NOTE: The state where an injury has occurred has
interest in compensating the injured party.
Whereas, the state where the actor has acted has
interest in regulating the conduct of persons found
in its territory.
SPECIAL RULES
1. If the tort is committed aboard a public
vessel, whether on the high seas or in a
foreign territorial waters, the country to
which the vessel belongs is the locus
delicti; the law of the flag is thus the lex loci
delicti commissi.
2. If the tort takes place aboard a private or
merchant vessel on the high seas, the law
of the flag is likewise the lex loci delicti
commissi.
3. If the tort concerns property, whether real
or personal, lex situs is usually the lex loci
delicti commissi.
4. Maritime torts
489
____________________________________________________________________________________________________
a. If the colliding vessels are of the
same state, or carry the same flag,
said law is the lex loci delicti
commissi.
b. If the vessel come different states,
whose laws however, on the matter
are identical, said laws constitute
the lex loci delicti commissi.
c. If the vessels come from different
states with different laws, the lex
loci delicti commissi is the general
maritime law as understood and
applied by the forum where the
case is tried.
In order to successfully maintain an action of tort,
the act which is the cause of the injury and the
foundation of the action must at least be actionable
or punishable by the law of the place in which it was
done, if not also by the law [of the place where the
action is filed](Le Forest vs. Tolman).
CHAPTER 16: CRIMES
GR: The essential elements of a crime and its
penalties are generally determined by the law
where the crime was committed (locus regit actum).
Exceptions:
1. Crimes committed by the state officials,
diplomatic representatives and officials of
recognized international organizations
(based on the theory of state immunity from
suits).
2. Crimes committed on board a foreign
vessel even within the territorial waters of
the coastal state, along as the effect of
such crime does not affect the peace and
order of the coastal state.
3. Crimes which, although committed by the
Philippines nationals abroad are punishable
under the local law pursuant to the
protective principle of criminal jurisdiction
(art. 2, RPC).
THEORIES AS TO WHAT COURT HAS
JURISDICTION
1. Territoriality theory – where the crime
was committed.
2. Nationality theory – country which the
criminal is citizen or subject.
3. Real theory – any state whose penal law
has been violated has jurisdiction, whether
the crime was committed inside or outside
its territory.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
4. Protective theory – any state whose
national interest may be jeopardized has
jurisdiction so that it may protect itself.
5. Cosmopolitan or universal theory – state
where the criminal is found or which has his
custody has jurisdiction.
6. Passive personality theory – the state of
which the victim is a citizen or subject has
jurisdiction.
NOTE: In the Philippines, we follow the territoriality
theory in general. Hence, our penal laws apply only
to crimes committed within the country.
Exception: art. 2, RPC stresses the protective
theory.
a) Art. 2. Application of its provisions. — Except as
provided in the treaties and laws of preferential
application, the provisions of this Code shall be
enforced not only within the Philippine
Archipelago, including its atmosphere, its
interior waters and maritime zone, but also
outside of its jurisdiction, against those who:
1. Should commit an offense while on a
Philippine ship or airship
2. Should forge or counterfeit any coin or
currency note of the Philippine Islands or
obligations and securities issued by the
Government of the Philippine Islands;
3. Should be liable for acts connected with
the introduction into these islands of the
obligations and securities mentioned in the
presiding number;
4. While being public officers or
employees, should commit an offense in
the exercise of their functions; or
5. Should commit any of the crimes against
national security and the law of nations,
defined in Title One of Book Two of this
Code.
b) Crimes committed under REPUBLIC
ACT NO. 9851
AN ACT DEFINING AND PENALIZING CRIMES
AGAINST INTERNATIONAL HUMANITARIAN
LAW, GENOCIDE AND OTHER CRIMES AGAINST
HUMANITY, ORGANIZZING JURISDICTION,
490
____________________________________________________________________________________________________
DESIGNATING SPECIAL COURTS, AND FOR performed
RELATED PURPOSES Where the property
was unlawfully taken
Section 17. Jurisdiction.- The State shall Theft and robbery from the victim (not the
exercise jurisdiction over persons, whether place to which the
military or civilian, suspected or accused of a criminal went after the
crime defined and penalized in this Act, commission of the
regardless of where the crime is committed, crime)
provided, any one of the following conditions is Where the object of
Estafa or swindling the crime was received
met:
thru false (not where the false
(a) The accused is a Filipino citizen;
representation representation were
(b) The accused, regardless of citizenship made)
or residence, is present in the Philippines; Conspiracy to commit
or treason, rebellion, or Where the conspiracy
(c) The accused has committed the said sedition. was formed (not where
crime against a Filipino citizen. Note: other the overt act of
conspiracies may not treason, rebellion or
In the interest of justice, the relevant Philippine be punishable unless sedition was
authorities may dispense with the investigation expressly made so by committed)
or prosecution of a crime punishable under this special laws.
Act if another court or international tribunal is Libel Where published or
already conducting the investigation or circulated
undertaking the prosecution of such crime. Any place where the
Instead, the authorities may surrender or Continuing crime offense begins, exists
extradite suspected or accused persons in the or continues
Philippines to the appropriate international Any place where any
court, if any, or to another State pursuant to Complex crime of the essential
the applicable extradition laws and treaties. elements of the crime
took place
No criminal proceedings shall be initiated
against foreign nationals suspected or accused
of having committed the crimes defined and CHAPTER 17: BUSINESS ASSOCIATIONS
penalized in this Act if they have been tried by
a competent court outside the Philippines in CORPORATIONS
respect of the same offense and acquitted, or FACTUAL POINTS OF CONTACT
having been convicted, already served their SITUATION
sentence. GR: The law of the place
of incorporation.
Exceptions:
1. For constitutional
THE LOCUS DELICTI OF CERTAIN CRIMES purposes – even if
the corporation was
Frustrated and Where the victim was incorporated in the
consummated injured (not where the RP, it is not deemed
homicide, murder, aggressor wielded his a Filipino corporation
infanticide and weapon) and therefore can’t
parricide acquire land, exploit
Where the intended our natural
victim was (not where Powers and liabilities resources, and
the aggressor was operate public utilities
Attempted homicide, situated) – so long as unless 60% of capital
etc. the weapon or the is Filipino owned
bullet either touch him 2. For wartime
or fell inside the purposes – we
territory where he was pierce the corporate
Bigamy Where the illegal veil and go to the
marriage was nationality of the

JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 491

____________________________________________________________________________________________________
controlling
stockholders to
determine if the
corporation is an
enemy (CONTROL
TEST)
Formation of the
corporation
(REQUISITES), kind
of stocks, transfer of
stocks to bind the Law of the place of
corporation, issuance, incorporation
amount and legality
and dividends, powers
and duties of
members,
stockholders and
officers
Law of the place of
Validity of corporate incorporation and law of
acts and contract the place of performance
(including ultra vires (the act or contract must
acts) be authorized by both
laws)
Law of the place of
Manner and effect of incorporation provided
dissolution that the policy of the forum
is not militated against
If not fixed by the law
creating or recognizing the
corporation or by any
other provision – the
Domicile domicile is where its legal
representation is
established or where it
exercises its principal
functions
Right to sue and
amenability to court Lex fori
processes and suits
against it
Principal receivers are
appointed by the courts of
the place of incorporation;
Receivers ancillary receivers, by the
(appointment and courts of any state where
powers) the corporation has assets
(authority is CO-
EXTENSIVE with the
appointing court.
THEORIES ON THE PERSONAL AND/OR
GOVERNING LAW OF CORPORATIONS:
1. Law of the place of incorporation – this is
generally the rule adhered to by the
Philippines.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Exceptions:
a) Exploration and exploitation of natural
resources
b) Media
c) Wartime rule piercing of corporate
veil.
2. Law of the place or center of management
(center for administration or siege social) or
(center office principle).
3. Law if the place of exploitation.
WHEN DOES PERSONAL LAW OF THE
CORPORATION GOVERNS:
1. Requisites for formation of the corporation
and its legal character;
2. The capacity and powers of the corporation
Note however that the two questions should
be asked in determining the legal effect of
an act of a corporation:
a) Is the corporation authorized by its
charter to do the particular act?
b) Is the act permitted by the law of
the place where the act is done?
3. Kinds of stocks allowed and transfer of
stocks in a way that would be binding to the
corporation.
4. Issuance, amount and legality of dividends.
5. The internal organization of the corporate
enterprise, the rights and liabilities of
shareholders, members, directors, officers,
their relations inter se, and stockholders’
participation in the management and in the
profits.
6. Alteration or modification of the charter and
the dissolution of the corporation.
PHILIPPINE JURISDICTION OVER FOREIGN
CORPORATIONS
Consent doctrine – a foreign corporation will
be recognized and will be allowed to transact
business in any state which gives its consent
(secs. 125 – 128, Corporation Code).
NOTE: All foreign corporations lawfully
doing business here in the Philippines shall
be bound by all laws, rules and regulations
applicable to domestic corporations
EXCEPT provisions for the creation,
formation, organization or dissolution of
corporations or those which fix the relations
and liabilities or duties of the stockholders,
members or officers of the corporation to
each other.
RIGHT TO BRING SUIT
492
____________________________________________________________________________________________________
GR: If a corporation doing business in the country is FACTUAL POINT OF
not duly licensed or authorized to transact business SITUATION CONTACT
in the Philippines, it cannot be permitted to maintain The personal law of
or intervene in any action, suit or proceeding in any The existence or the partnership, i.e.,
court or administrative agency BUT it can be sued non-existence of the law of the place
before any court or administrative tribunals on a legal personality of where it was created
valid cause (sec. 133 of CorpCod). the firm, the capacity (art. 15 of the Code
to contract; of Commerce)
EXCEPTIONS: (foreign corporation can maintain liability of the firm subject to certain
a suit) and partners to 3rd exceptions provided
1. Isolated transactions persons as in the case of a
2. Action to protect trademark, trade name, corporation
goodwill, patent or unfair competition. Creation of branches
3. Agreements fully transacted outside the in the RP;
Philippines. Validity and effect of RP law (law of the
4. Petition filed is merely a corollary defense the branches’ place where
in a suit against it. commercial branches were
5. In case of estoppel – a person who enters transaction; created (art. 15
into a contract with a foreign corporation The jurisdiction of Code of Commerce)
and receives benefits from the contract is the court
stopped from setting up failure of said Dissolution, winding RP law (art. 15,
corporation to comply with the requirements up and termination Code of Commerce)
for doing business, in order to avoid liability. of branches in the
RP
If not fixed by the
DOING BUSINESS law creating or
A corporation is “doing business” when it is recognizing the
continuing the body or substance of the business or partnership or by
enterprise for which it was organized. The term any other provision –
implies a continuity of commercial dealings and Domicile the domicile is where
arrangements and contemplates, to that extent, the its legal
performance of acts and works or the exercise of representation is
some of the functions normally incident to, and in established or where
progressive prosecution of, the purpose and it exercises its
objective of its organization. principal functions
(art. 15, Code of
MULTINATIONAL CORPORATIONS Commerce)
Cluster of corporations of diverse nationalities
joined together by ties of common ownership and
responsive to a common management strategy.

 Jurisdiction over a local counterpart may

amount to jurisdiction on the parent company if
the local counterpart is only a branch and is LAND TITLES AND
DEEDS
without separate juridical personality from the
mother company and when such local
counterpart is but a conduit or alter-ego of the
parent company.
 However, if the local counterpart is a subsidiary
with an entirely distinct personality, jurisdiction LAND TITLE
over the local counterpart is not jurisdiction over Is the evidence of the owner’s right or extent of
the parent company. interest, by which he can maintain control and a
rule assert right to exclusive possession and
NOTE: A subsidiary is one which is enjoyment of property.
incorporated separately from the mother
company, thus obtaining its own juridical DEED
personality. Is the instrument in writing by which any real estate
or interest therein is created, alienated, mortgaged,
PARTNERSHIP
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 493
____________________________________________________________________________________________________
or assigned, or by which title to any real estate may
be effected in law or equity.
LAND REGISTRATION
Is a judicial or administrative proceeding whereby a
person’s claim over a particular land is determined
and confirmed or recognized so that such land and
the ownership thereof may be recorded in a public
registry.
Registration; Governing Law (2007)
No.IV. Bedrock Land & Property Development
Corp. is a development company engaged in
developing and selling subdivisions,
condominium units and industrial estates. In
order to replenish its inventories, it embarked
on an aggressive land banking program. It
employed "scouts" who roam all over the
Philippines to look for and conduct
investigations on prospective sites for
acquisition and development, whether
developed, semi-developed or raw land. The
management of Bedrock asks you as the
company counsel to prepare a manual
containing a summary of the pertinent laws
and regulations relating to land registration
and acquisition of title to land. The manual
should include the following items: (A). What is
the governing law? (5%) SUGGESTED
ANSWER: The governing law is the Land
Registration Act as amended by Property
Registration Decree (Act 496 as amended
by PD 1529). [Note: It is respectfully
recommended that full credit be given to
examinees who did not give the exact title
or number of the law but merely stated a
description of the law.] ALTERNATIVE
ANSWER: In general, the governing law
relating to registration and acquisition of
title to land is Act 496 of 1902 as amended
by PD 1529, otherwise known as Property
Registration Decree of June 11, 1978. (1.)
Chapter III-I governs original registration of
land title under the Torrens System by
voluntary ordinary judicial proceedings. (2.)
Chapter II-II governs compulsory
registration of lands through cadastral
proceedings.
(3.) Section 103 governs registration of
homestead, sales, free patent under CA No.
141, as amended, otherwise known as the
Public Land Act. (4.) Section 104 governs
registration of certificates of land transfers,
emancipation patents and Certificates of
Land Ownership Award (CLOA) under
Comprehensive Land Reform Law. (5.)
Chapter V governs the registration of land
dealings on registered land like
conveyances, transfers, mortgages, leases,
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
powers of attorney, trusts and similar
contracts inter vivos. (6.) Chapter V-II
governs the registration of involuntary
dealings on registered land like
attachments, adverse claims, enforcement
of liens on registered land, notices of lis
pendens. (7.) Chapter VI governs the
registration of judgments, orders and
partitions, condemnation in eminent
domain proceedings, judicial and extra-
judicial settlement of estates. (8.) Sections
107, 108 and 109 govern petitions and
actions after original registration like:
(a).Compulsory surrender of withheld
owner's duplicate certificate of title; (b)
Amendment and alteration of certificate of
title; (c) Replacement of lost or destroyed
owner's duplicate certificate of title.
(9.) R.A. No. 26 governs judicial
reconstitution of lost or destroyed originals
of the certificate of title. (10.) R.A. No.
6732 governs administrative reconstitution
of lost or destroyed original certificates of
title. (11.) Section 113 governs the
registration of instruments affecting
unregistered private lands. (12.) Section
117 governs "consultas," where the Register
of Deeds refuses to register a deed or when
he is in doubt as to what action to take on
an instrument presented for registration.
Registration; Requisites; Proof (2013)
No.X. Manuel was born on 12 March 1940 in a
1 000-square meter property where he grew up
helping his father, Michael, cultivate the land.
Michael has lived on the property since the
land was opened for settlement at about the
time of the Commonwealth government in
1935, but for some reason never secured any
title to the property other than a tax
declaration in his name. He has held the
property through the years in the concept of
an owner and his stay was uncontested by
others. He has also conscientiously and
continuously paid the realty taxes on the land.
Michael died in 2000 and Manuel - as
Michael’s only son and heir -now wants to
secure and register title to the land in his own
name. He consults you for legal advice as he
wants to perfect his title to the land and
secure its registration in his name. (A) What
are the laws that you need to consider in
advising Manuel on how he can perfect his
title and register the land in his name?
Explain the relevance of these laws to your
projected course of action. (4%) SUGGESTED
ANSWER: (Note: With all due respect, it is
recommended that the examiner accept and
494
____________________________________________________________________________________________________
give full credit to any of the answers given in
each of the following paragraphs.)
I would advice Manuel to file an application
for registration under Sec 14 of Pres.
Decree No. 1529, or the Property
Registration Decree (PRD), specifically
Sec14 (1) which requires (a) that the land
applied for forms part of the alienable and
disposable (A & D) portion of the public
domain, and (b) that the applicant has been
in open, continuous and notorious
possession and occupation thereof under
bona fide claim of ownership since June
12, 1945, or earlier. However, it is only
necessary that the land is already declared
A & D land “at the time for application for
registration is filed” (Malabanan v.
Republic, G.R. No. 180067, June 30, 2009).
Manuel could also invoke Sec 14 (2) of the
same Decree, which allows registration
through ordinary acquisitive prescription
for thirty years, provided, however, that
the land is “patrimonial” in character, i.e.
already declared by the government (a) as A
& D, and (b) no longer needed for public use
or public service (Malabanan, supra).
Manuel could also file an application for
“confirmation of imperfect or incomplete
title’ through “judicial legalization” under
Sec. 48 (b) of CA no. 141, or the Public
Land Act (PLA). But, as held in Malabanan,
there is no substantial difference between
this provision and Sec 14 (1) of the PRD.
Both refer to agricultural lands already
classified as alienable and disposable at the
time the application is filed, and require
possession and occupation since June 12,
1945. The only difference is that under the
PRD, there already exists a title which is to
be confirmed, whereas under the PLA, the
presumption is that land is still public land
(Republic v. Aquino, G.R. No. L-33983,
January 27, 1983). Manuel may also invoke
“vested rights’ acquired under Rep. Act. No.
1942, dated June 2, 1957, which amended
Sec. 48 (b) of the PLA by providing for a
prescriptive period of thirty years for
judicial confirmation of imperfect title. It
must only be demonstrated that possession
and occupation commenced on January 24,
1947 and the 30-year period was completed
prior to the effectivity of PD No. 1073 on
January 25, 1977. PD No. 1073 now
requires possession and occupation since
June 12, 1945 (Republic v. Espinosa, G.R.
No. 171514, July 18, 2012). Another
alternative is for Manuel to secure title
through administrative proceedings under
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
the homestead or free patent provisions of
the PLA. The title issued has the same
efficacy and validity as a title issued
through judicial proceedings, but with the
limitations that the land cannot be sold or
disposed of within five years from the
issuance of patent (Sec. 118, CA No. 141, as
amended). (B) What do you have to prove to
secure Manuel's objectives and what
documentation are necessary? (4%)
SUGGESTED ANSWER: Manuel has a the
burden to overcome the presumption of
State ownership by “well-nigh
incontrovertible” evidence (Ong v.
Republic, G.R. No. 175746, March 12,
2008). Accordingly, he must show that ht
eland is already classified as A & D “at the
time the application for registration is
filed” and that he has been in “possession
and occupation thereof” in the manner
required by law since June 12, 1945, or
earlier. Manuel may tack his possession to
that of his predecessor-in-interest (Michael)
by the testimony of disinterested and
knowledgeable eyewitnesses. Overt acts of
possession may consist in introducing
valuable improvements like fencing the
land, constructing a residential house
thereon, cultivating the land and planting
fruit bearing trees, declaring the land for
taxation purposes and paying realty taxes,
all of which are corroborative proof of
possession. To identify the land, he must
submit the tracing cloth plan or a duly-
certified blueprint or whiteprint copy
thereof (Director of Lands v. Reyes, G.R.
No. L-27594, November 28, 1975; Director
of Lands v. CA and Iglesia ni Cristo, G.R.
No. L-56613, March 14, 1988).
To show the classification of the land as A
& D, the application must be accompanied
by (1) a CENRO or PENRO certification; and
(2) a certified true copy of the original
classification approved by the DENR
Secretary (Republic v. Bantigue, G.R.No.
162322, March 14, 2012). A presidential or
legislative act may also be considered
TORRENS SYSTEM
Is a system for registration of land under which,
upon the landowner’s application, the court may,
after appropriate proceedings, direct the issuance
of a certificate of title.
PURPOSES: (Legarda vs. Saleeby, 31 Phil. 590,
[1951])
1. To quiet title to the land and to stop
forever any question as to the legality of
said title.
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2. To relieve the land of unknown claims.
3. To guarantee the integrity of land titles
and to protect their indefeasibility once the
claim of ownership is established and
recognized.
4. To give every registered owner a complete
peace of mind.
5. To issue a certificate of title to the owner
which shall be the best evidence of his
ownership of the land.
6. To avoid conflicts of title in and to real
estate and to facilitate transactions.
The registration of property is to:
1. Avoid possible conflict of title in and to real
property; and
2. Facilitate transactions relative thereto by
giving the public the right to rely upon the
face of the Torrens certificate of title and to
dispense with the need of inquiring further,
EXCEPT when the party concerned has
actual knowledge of facts and
circumstances that should impel a
reasonably cautious man to make such
further inquiry (Capitol Subdivision, Inc. vs.
Province of Negros Occidental, 7 SCRA 60,
[1963]).
NATURE OF TORRENS SYSTEM:
1. Judicial in character.
2. Proceeding is in rem.
CONCEPT OF TORRENS SYSTEM
Does not create or vest title; only CONFIRMS (but
does not confer) OWNERSHIP.
Torrens System vs. Recording of Evidence of Title
(1994)
Distinguish the Torrens system of land registration from
the system of recording of evidence of title.
SUGGESTED ANSWER:
a) The TORRENS SYSTEM OF LAND REGISTRATION
is a system for the registration of title to the land. Thus,
under this system what is entered in the Registry of
Deeds, is a record of the owner's estate or interest in the
land, unlike the system under the Spanish Mortgage Law
or the system under Section 194 of the Revised
Administrative Code as amended by Act 3344 where only
the evidence of such title is recorded. In the latter system,
what is recorded is the deed of conveyance from hence
the owner's title emanated—and not the title itself.
b) Torrens system of land registration is that which is
prescribed in Act 496 (now PD 1529), which is either
Judicial or quasi-judicial. System or recording of evidence
of title is merely the registration of evidence of
acquisitions of land with the Register of Deeds, who
annotates the same on the existing title, cancels the old
one and issues a new title based on the document
presented for registration.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
TORRENS TITLE
Is a certificate of ownership issued under the
Torrens System, through the Register of Deeds,
naming and declaring the owner of the real property
described therein, free from all liens and
encumbrances except such as may be expressly
noted there or otherwise reserved by law.
GR: A title once registered cannot be impugned,
altered, changed, modified, enlarged, or diminished.
Exception: By a direct proceeding permitted by
law, usually for the protection of innocent 3rd
persons.
PROBATIVE TITLE OF TORRENS TITLE
Torrens title may be received I evidence in all
courts in the Philippines, and shall be conclusive as
t all matters contained therein, principally as to the
identity of the landowner except so far as provided
in the Land Registration Act.
TYPES OF TORRENS CERTIFICATE OF TITLE
1. Original Certificate of Title (OCT) – the
first title issued in the name of the
registered owner by the Register of Deeds
(ROD) covering a parcel of land which had
been registered by virtue of a judicial or
administrative proceeding.
2. Transfer Certificate of Title ( TCT) – the
title issued by the ROD in favor of the
transferee to whom the ownership of
already registered land had been
transferred by virtue of a sale or other
modes of conveyance.
MODES OF ACQUIRING TITLE:
1. Public Grant – a conveyance of public land by
government to a private individual.
2. Acquisitive Prescription – Must be in open,
continuous, exclusive, and notorious
possession.
a) If in good faith and with just title – 10
years of uninterrupted possession.
b) If in bad faith and even without just title
– 30 years of continuous possession.
NOTE: Only available if the land
possessed is a public land that is
alienable and disposable.
A property registered under the
provisions of PD 1529 is not
subject to prescription.
Protection extends not only to the
registered owner, but also to his
hereditary successors.
Ownership of registered land
may however, be lost by the
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equitable doctrine of estoppel by
laches.
Prescription; Real Rights (1992)
A owned a parcel of unregistered land located on the
Tarlac side of the boundary between Tarlac and
Pangasinan. His brother B owned the adjoining parcel of
unregistered land on the Pangasinan side.
A sold the Tarlac parcel to X in a deed of sale executed
as a public instrument by A and X. After X paid in full the,
price of the sale, X took possession of the Pangasinan
parcel in the belief that it was the Tarlac parcel covered
by the deed of sale executed by A and X.
After twelve (12) years, a controversy arose between B
and X on the issue of the ownership of the Pangasinan
parcel, B claims a vested right of ownership over the
Pangasinan parcel because B never sold that parcel to X
or to anyone else.
On the other hand, X claims a vested right of ownership
over the Pangasinan parcel by acquisitive prescription,
because X possessed this parcel for over ten (10] years
under claim of ownership.
Decide on these claims, giving your reasons.
The right to recover possession of registered land
likewise
SUGGESTED ANSWER:
At this point in time, X cannot claim the right of vested
ownership over the Pangasinan parcel by acquisitive
prescription. In addition to the requisites common to
ordinary and extraordinary acquisitive prescription
consisting of uninterrupted, peaceful, public, adverse and
actual possession in the concept of owner, ordinary
acquisitive prescription for ten (10) years requires (1)
possession in good faith and (2) just title. "Just title"
means that the adverse claimant came into possession of
the property through one of the modes recognized by law
for the acquisition of ownership but the grantor was not
the owner or could not transmit any right (Art. 1129. Civil
Code). In this case, there is no "just title" and no "mode"
that can be invoked by X for the acquisition of the
Pangasinan parcel. There was no constructive delivery of
the Pangasinan parcel because it was not the subject-
matter of the deed of sale. Hence, B retains ownership of
the Pangasinan parcel of land.
Primary Entry Book; Acquisitive Prescription; Laches
(1998)
In 1965, Renren bought from Robyn a parcel of
registered land evidenced by a duly executed deed of
sale. The owner presented the deed of sale and the
owner's certificate of title to the Register of Deeds. The
entry was made in the daybook and corresponding fees
were paid as evidenced by official receipt. However, no
transfer of certificate of title was issued to Renren
because the original certificate of title in Robyn's name
was temporarily misplaced after fire partly gutted the
Office of the Register of Deeds. Meanwhile, the land had
been possessed by Robyn's distant cousin, Mikaelo,
openly, adversely and continuously in the concept of
owner since 1960. It was only in April 1998 that Renren
sued Mikaelo to recover possession. Mikaelo invoked a)
acquisitive prescription and b) laches, asking that he be
declared owner of the land. Decide the case by
evaluating these defenses, [5%]
SUGGESTED ANSWER:
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
a) Renren's action to recover possession of the land will
prosper. In 1965, after buying the land from Robyn, he
submitted the Deed of Sale to the Registry of Deeds for
registration together with the owner's duplicate copy of
the title, and paid the corresponding registration fees.
Under Section 56 of PD No. 1529, the Deed of Sale to
Renren is considered registered from the time the sale
was entered in the Day Book (now called the Primary
Entry Book).
For all legal intents and purposes, Renren is considered
the registered owner of the land. After all, it was not his
fault that the Registry of Deeds could not issue the
corresponding transfer certificate of title.
Mikaelo's defense of prescription can not be sustained. A
Torrens title is imprescriptible. No title to registered land
in derogation of the title of the registered owner shall be
acquired by prescription or adverse possession. (Section
47, P.D. No, 1529)
does not prescribe because possession is just a
necessary incident of ownership.
SUGGESTED ANSWER:
b) Mikaelo's defense of laches, however, appears to be
more sustainable. Renren bought the land and had the
sale registered way back in 1965. From the facts, it
appears that it was only in 1998 or after an inexplicable
delay of 33 years that he took the first step asserting his
right to the land. It was not even an action to recover
ownership but only possession of the land. By ordinary
standards, 33 years of neglect or inaction is too long and
maybe considered unreasonable. As often held by the
Supreme Court, the principle of imprescriptibility
sometimes has to yield to the equitable principle of laches
which can convert even a registered land owner's claim
into a stale demand.
Mikaelo's claim of laches, however, is weak insofar as the
element of equity is concerned, there being no showing in
the facts how he entered into the ownership and
possession of the land.
3. Accretion
Requisites:
5. Result of the action of the waters of
the river;
6. Deposit of soil or sediment is gradual
and imperceptible;
7. The land where the accretion takes
place is adjacent to the banks of river
(or the sea coast
Accretion needs new registration
to be considered registered land.
It is not included in the original
title issued.
There must be no human
intervention.
The current causing the alluvial
deposit must be from a river. If it
is from the sea, the deposit will
pertain to the state (Government
of the Philippines vs. Cabangis,
53 Phil. 112, [1929]).
497
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The accretion may be lost by
adverse possession in the
character required by law.
8. Reclamation – filling of submerged land
by deliberate act and reclaiming title
thereto.
a) Must be initially owned by the
government.
b) May be transferred to private
owners.
9. Voluntary Transfer – voluntary execution
of deed of conveyance.
a) Private grant
b) Contractual relationship between
parties
c) Consensual.
10. Involuntary – no consent from the owner
Like –
a. Foreclosure sale;
b. Expropriation.
11. Descent or devise – hereditary succession
to the estate of deceased owner.
12. Emancipation patent/grant (Certificate of
Land Ownership Award [CLOA]) – To
ameliorate the sad plight of tenant-farmers.
Such grant is generally not
transferable except hereditary
succession.
LAWS IMPLEMENTING LAND REGISTRATION:
1. Property Registration Decree (PD 1529, as
amended);
2. Cadastral Act (Act No. 2259, as amended);
3. Public Land Act (CA 141, as amended);
4. Comprehensive Agrarian Reform Law (RA
6657, as amended).
ADMINISTRATION OF THE TORRENS SYSTEM
1. Land Registration Authority (LRA) –
 Agency charged with the efficient
execution of the laws relative to the
registration of lands, under the
executive supervision of the DOJ.
 Consists of an Administrator assisted
by 2 Deputy Administrator.
FUNCTIONS OF THE LRA:
a. Extend speedy and effective assistance
to the Department of Agrarian Reform,
the Land Bank, and other agencies in
the implementation of the land reform
program of the government.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
b. Extend assistance to courts in ordinary
and cadastral land registration
proceedings.
c. Be the central repository of records
relative to original registration of lands
titled under the Torrens system,
including the subdivision and
consolidation plans of titled lands.
2. Register of Deeds (ROD)
 Constitutes a public repository of
records of instruments affecting
registered or unregistered lands and
chattel mortgages in the province or
city wherein such office is situated.
 Headed by the Register of Deeds,
assisted by a Deputy.
FUNCTIONS OF THE ROD
a. Immediately register an instrument
presented for registration dealing with
real or personal property which
complies with the requisites for
registration.
b. Shall see to it that the instrument bears
the proper documentary and science
stamps and that the same are properly
cancelled.
c. If the instrument is not registrable, he
shall deny the registration thereof and
inform the presentor of such denial in
writing, stating the ground or reason
therefore, and advising him of his right
to appeal by consulta in accordance
with sec. 117 of PD 1529.
d. Prepare and keep an index system
which contains the names of all
registered owners and lands registered.
The function of the ROD with respect to registration
of deeds, encumbrances, instruments, and the like
is MINISTERIAL in nature (Baranda vs. Gustillo,
165 SCRA 757, [1988]).
It is enough that in the ROD’s opinion an instrument
is registrable for him to register it. The act being an
administrative act does not contemplate notice to
and hearing of interested parties (Ledesma vs.
Villaseñor, 13 SCRA 494, [1965]).
The determination of whether the instrument is valid
or not is a function of the court of competent
jurisdiction and not of the ROD (Almirol vs. ROD of
Agusan, GR No. L-22486, Mar. 20, 1968).
Instances when ROD may validly deny
registration of voluntary instruments: (Balbin vs.
ROD, 28 SCRA 12)
498
____________________________________________________________________________________________________
1. Where there are more than one copy of the • Within five days from receipt of the notice of
owner’s duplicate certificate of title and not denial, the interested party may elevate the matter by
all such copies are presented to the ROD; consulta to the Commissioner of Land Registration who
2. When the voluntary instrument bears on its shall enter an order prescribing the step to be taken or
memorandum to be made. Resolution in consulta shall
face an infirmity; be binding upon all Registers of Deeds provided that the
3. Where the validity of the instrument sought party in interest may appeal to the Court of Appeals
to be registered is in issue in a pending within the period prescribed (Sec. 117, P.D. 1529).
court suit-
a. Notice of pending suit must be
given to parties NON-REGISTRABLE PROPERTIES
b. Registration may be suspended 1. Art. 420 NCC;
pending final adjudication of the a. Public use;
court case. b. Public service;
c. Development of national wealth.
4. When the document presented is a private
document since sec. 112 of OD 1529 2. Art. 5 and 6 of the Water Code (PD
provides that deed of conveyances 1067);
affecting lands should be verified and a. Rivers and their riverbeds;
acknowledged before a notary public or b. Continuous or intermittent waters of
other officer authorized by law to take springs and brooks and their beds;
acknowledgement (Gallardo vs. IAC, 155 c. Natural lakes and lagoons;
SCRA 248). d. All other categories of surface
waters such as water flowing over
NOTE: When the ROD is in doubt as to the proper lands, water from rainfall whether
action to take on an instrument or deed presented natural or artificial, and water from
to him for registration, he should submit the agricultural runoff, seepage and
question to the Administrator of the LRA en drainage;
consulta (section 117, PD 1529.) e. Atmospheric waters;
f. Subterranean or ground water;
Remedies; Procedure; Consulta (1994) g. Seawater;
What is the procedure of consulta when an instrument is
denied registration?
SUGGESTED ANSWER:
Those found in private lands –
1) The Register of Deeds shall notify the interested h. Continuous and intermittent waters
party in writing, setting forth the defects of the instrument rising on such lands;
or the legal ground relied upon for denying the i. Lakes and lagoons
registration, and advising that if he is not agreeable to j. Rain water and failing on such
such ruling, he may, without withdrawing the documents lands;
from the Registry, elevate the matter by Consulta to the k. Subterranean or ground water;
Administrator of the Land Registration Authority (LRA). l. Waters in swamps and marshes.
2) Within five {5) days from receipt of notice of
denial, the party-in-interest shall file his Consulta with the
3. Those falling under the Regalian
Register of Deeds concerned and pay the consulta fee.
3) After receipt of the Consulta and payment of the Doctrine –
corresponding fee the Register of Deeds makes an a. Forest or timberland;
annotation of the pending consulta at the back of the b. Public forest;
certificate of title. c. Forest reserves;
4) The Register of Deeds then elevates the case to d. Mineral land
the LRA Administrator with certified records thereof and a
summary of the facts and issues involved.
5) The LRA Administrator then conducts hearings
after due notice or may just require parties to submit their
memoranda.
Non-Registrable Properties (2007)
6) After hearing, the LRA Administrator issues an No.IV. (B). What properties are not registrable?
order prescribing the step to be taken or the (5%) Supply this information. SUGGESTED
memorandum to be made. His resolution in consulta shall ANSWER: The following properties are not
be conclusive and binding upon all Registers of Deeds registrable: (1.) Properties of the Public
unless reversed on appeal by the Court of Appeals or by dominion; (2.) Properties for public use or
the Supreme Court. (Section 117, P.D. 1529). public service; (3.) Inalienable lands of the
• The procedure of consulta is a mode of appeal
public domain; (4.) Military installations,
from denial by the Register of Deeds of the registration of
the instrument to the Commissioner of Land Registration. civil and quasi-public lands; and (5.) All

JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 499

____________________________________________________________________________________________________
lands not classified as alienable and
disposable. ALTERNATIVE ANSWER:
(1). Properties of public dominium intended
for public use, like roads, canals, rivers,
torrents, ports and bridges constructed by
the State, banks, shores, roadsteads, and
the like, are incapable of private
appropriation, much less registration (Art.
420 NCC). This includes public markets,
public plazas, municipal streets and public
buildings (Municipality of Antipolo v.
Zapanta, 133 SCRA 820, 1986; Martinez v.
CA, 56 SCRA 647, 1974; Navera v. Quicho,
5 SCRA 454, 1962).
(2.) Lands proclaimed or classified as forest,
timberlands, mineral lands and national
parks. Under Sec 2, Art XII, Constitution of
the Philippines, these lands are inalienable.
(3.) Lands that are reserved by law or
Presidential proclamation for military, civic
or quasi-public purpose, Under Sec 88,
Chapter XII of the Public Land Act, such
lands shall be inalienable and shall not be
subject to occupation, entry, sale, lease or
other disposition.
(4.) In general, all lands of the public
domain that has not been classified as
alienable and disposable under the Public
Land Act.
(5.) Lands that form part of the seabed,
riverbed or lakebed. These lands are not
susceptible to private appropriation.
(6.) Foreshore lands is that strip of land
that lies between the high and low water
marks and alternately wet and dry
according to the flow of the tide belong to
the public domain, and can only be
acquired by lease if not needed by the
government for public or quasi-public
purposes.
(7.) Lands reclaimed by the government
from the sea, lakes, or other bodies of water
are disposed or acquisible only by lease and
not otherwise, under the Public Land Act.
The classification or reclassification of public lands
into alienable or disposable, mineral, or forest lands
is now a prerogative of the Executive Department of
the government and not the courts (Bureau of
Forestry vs. CA, 153 SCRA 351, [1987]).
A parcel of forest land is within the exclusive
jurisdiction of the Bureau of Forestry and beyond
the power and jurisdiction of the cadastral court to
register under the Torrens system (Republic vs.
Vera, 120 SCRA 210, [1983]).
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
The state has an imprescriptible right to cause the
reversion of a piece of property belonging to the
public domain if title has been acquired through
fraudulent means (Republic vs. Heirs of Felipe
Alejaga, Sr. 393 SCRA 361, [2002]).
Until a given parcel of land is released from its
classification as part of the military reservation zone
and reclassified by law or by presidential
proclamation as disposable and alienable, its status
as part of a military reservation remains, even if
incidentally it is devoted for a purpose other than as
a military camp or for defense (Republic vs.
Southside Homeowners Association Inc. GR No.
156951 and 1 73408, Sep. 22, 2006).
TYPES OF REGISTRATION
1. Original Registration
2. Subsequent Registration
ORIGINAL REGISTRATION UNDER PD 1529
Is a proceeding brought before the RTC (as a land
registration court) to determine title or ownership of
land on the basis of an application for registration or
answer by a claimant in a cadastral registration.
KINDS OF JUDICIAL REGISTRATION:
1. Judicial/voluntary/ordinary – by filing with
the proper court; application by the private
individual himself.
2. Administrative/involuntary/cadastral –
compulsory registration initiated by the
government.
PROCEDURE IN ORDINARY LAND
REGISTRATION:
1. SURVEY of land by the Bureau of Lands or a
duly licensed private surveyor.
a. Survey plan must be duly approved by
the Director of Lands.
2. FILING of application for registration by the
applicant.
a. With all the muniments of title and
copies thereof;
b. Survey plans approved by the Bureau
of Lands
Muniments of Title
Instruments or written evidence which applicant
holds or possesses to enable him to substantiate
and prove title to his estate.
I. Filed at the RTC of the place where the
land is situated;
II. May be endorsed to the MTC if there is no
controversy over the land or if its value is
less than 100, 000.
500
____________________________________________________________________________________________________
III. Cases decided by the MTC, in the exercise III. Sec. of Agrarian
of its delegated jurisdiction, is appealable to Reform, Solicitor
the CA; General, Director of
IV. If land is situated between boundaries of 2 Lands, Director of
provinces, the application must be filed – Fisheries, and Director
a) When boundaries are NOT defined, of Mines, if the land
in the RTC of the place where it is borders on a river,
declared for taxation purposes. navigable stream, or
b) When boundaries are defined, shore, or on arm of the
separate plans for each portion sea where a river or
must be made by a surveyor and harbor lies.
separate application for each lot IV. Other persons as the
must be filed with the appropriate court may deem
RTC. proper.

3. Setting of the DATE of the initial hearing c) Posting

of application by the RTC.
Within 5 days, set hearing 45- 90
days from date of order.
4. TRANSMITTAL of the application and date
of initial hearing, with all the documents or
other evidence attached thereto, by the
clerk of court to the LRA.
5. PUBLICATION of notice of the filing of the
application and the date and place of the
hearing in the Official Gazette.
a) Publication of notice of initial
hearing –
I. Once in the Official Gazette
(this confers jurisdiction upon
the court).
II. Once in a newspaper of
general circulation.
Purpose of publication: to
confer jurisdiction over the land
applied for upon the court and
to charge the whole world with
knowledge of the application of
the land involved, and invite
them to take part in the case
and assert and prove their
rights over the subject land.
Posting in conspicuous place
on subject land and on bulletin
board of municipal building at
least 14 days before initial
hearing.
6. SERVICE OF NOTICE by the sheriff upon
contiguous owners, occupants and those
known to have interest in the property.
7. FILING OF ANSWER to the application by
any person whether named in the notice or
not
8. HEARING by the court.
9. PROMULGATION OF JUDGMENT by the
court.
10. ISSUANCE OF THE DECREE declaring
the decision final and instructing the LRA to
issue a decree of confirmation and
registration.
11. ENTRY of the decree of registration in the
LRA.
One year after the date of entry, it
becomes incontrovertible and
amendments will not be allowed except
clerical errors. It is deemed conclusive
as to the whole world.
12. SENDING A COPY of the decree of
registration to the corresponding ROD.

b) Mailing 13. TRANSCRIPTION of the decree of

Within 7 days after publication registration in the registration book and
of said notice in the OG, issuance of the owner’s duplicate original
mailing of notice to – certificate of title to the applicant by the
I. Persons named in the ROD upon payment of the prescribed fees.
notice;
II. Secretary of public NOTE: Non-compliance with the requisites will
highways, Provincial make the Certificate of Title issued invalid and
Governor, and Mayor, cancellable by the courts.
if the applicant
requests to have the WHO MAY APPLY IN ORDINARY
line of a public way or REGISTRATION PROCEEDING UNDER PD 1529
road determined. 1. Those who by themselves or through their
predecessors-in-interest have been in
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 501
____________________________________________________________________________________________________
open, continuous, exclusive, notorious
possession of alienable and disposable
lands of public domain under a bona fide
claim of ownership since June 12, 1945 or
earlier.
2. Those who acquired ownership of private
land by prescription under provisions of
existing laws.
3. Those who acquired ownership of private
land or abandoned river beds by right of
accession or accretion under existing laws.
4. Those who have acquired ownership of
lands in any manner provided by law.
NOTE: All there persons must be natural-born
Filipino citizens. However, by way of exception,
juridical persons may apply for registration of
leased agricultural and disposable lands not
exceeding 1,000 hectares in area for a period of 25
years and renewable for not more than 25 years
(sec. 3, article XII, 1987 Constitution), and except
when the land has been previously acquired by
prescription by a natural person and subsequently
transferred to a juridical entity (in this case, a
corporation may apply for judicial confirmation of
title).
Acquisition of Lands; Sale of Real Property
to an Alien (2009)
No.XIX. In 1972, Luciano de la Cruz sold to
Chua Chung Chun, a Chinese citizen, a parcel
of land in Binondo. Chua died in 1990, leaving
behind his wife and three children, one of
whom, Julian, is a naturalized Filipino citizen.
Six years after Chua’s death, the heirs
executed an extrajudicial settlement of estate,
and the parcel of land was allocated to Julian.
In 2007, Luciano filed suit to recover the land
he sold to Chua, alleging that the sale was
void because it contravened the Constitution
which prohibits the sale of private lands to
aliens. Julian moved to dismiss the suit on
grounds of pari delicto, laches and acquisitive
prescription. Decide the case with reasons.
(4%) SUGGESTED ANSWER: The case must
be dismissed. Julian, who is a naturialized
Filipino citizen and to whom the property
was allocated in a n extra-judicial partition
of the estate, is now the owner of the
property. The defect in ownership of the
property of Julian’s alien father has already
been cured by its transfer to Julian. It has
been validated by the transfer of the
property to a Filipino citizen. Hence, there
is no more violation of the Constitution
because the subject real property is now
owned by a Filipino citizen (Halili v. CA,
287 SCRA 465, [1998]). Further, after the
lapse of 35 year, laches has set in and the
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
motion to dismiss may be granted, for the
failure of Luciano to question the
ownership of Chua before its transfer of
ownership to Julian.
LIMITATION TO OWNERSHIP OF LAND BY
CORPORATION:
1. Private lands –
a) At least 60% Filipino(sec. 7, art. XII,
1987, Const.);
b) Restricted as to extent reasonably
necessary to enable it to carry out
purpose for which it was created;
c) If engaged in agriculture, it is
restricted to 1, 024 hectares.
2. Patrimonial property of the state (sec. 3,
art. XII, 1987, Const.) –
a) Lease for 25 years renewable
(cannot own land of public domain);
b) Limited to 1, 000 hectares;
c) Apply to both Filipino and foreign
corporations.
Acquisition of Lands; Citizenship Requirement (2003)
In 1970, the spouses Juan and Juana de la Cruz, then
Filipinos, bought the parcel of unregistered land in the
Philippines on which they built a house which became
their residence. In 1986, they migrated to Canada and
became Canadian citizens. Thereafter, in 1990, they
applied, opposed by the Republic, for the registration of
the aforesaid land in their names. Should the application
of the spouses de la Cruz be granted over the Republic’s
opposition? Why? 5%
SUGGESTED ANSWER:
Yes, the application should be granted. As a rule, the
Constitution prohibits aliens from owning private lands in
the Philippines. This rule, however, does not apply to the
spouses Juan and Juana de la Cruz because at the time
they acquired ownership over the land, albeit imperfect,
they were still Filipino citizens. The application for
registration is a mere confirmation of the imperfect title
which the spouses have already acquired before they
became Canadian citizens. (Republic v. CA, 235 SCRA
567 [1994]).
PERSONS WHO CANNOT PROPERLY FILE AN
APPLICATION FOR REGISTRATION OF LAND:
1. Public land sales applicant admits he is not
the owner in his application;
2. Mortgagee or his successors in interest to
the mortgage when mortgage is assigned
(prohibition on pactum commissorium);
3. Antichretic creditor since he hold not in
concept of an owner;
4. Persons or entity whose claim of ownership
has been previously denied in a
reinvindicatory action and right of
502
____________________________________________________________________________________________________
ownership thereto of another is upheld by
the court.
Unregistered Land (1991)
Maria Enriquez failed to pay the realty taxes on her
unregistered agricultural land located in Magdugo, Toledo
City. In 1989, to satisfy the taxes due, the City sold it at
public auction to Juan Miranda, an employee at the
Treasurer's Office of said City, whose bid at P10,000.00
was the highest. In due time, a final bill of sale was
executed in his favor. Maria refused to turn-over the
possession of the property to Juan alleging that (1) she
had been, in the meantime, granted a free patent and on
the basis thereof an Original Certificate of Title was
issued to her, and (2) the sale in favor of Juan is void
from the beginning in view of the provision in the
employees of the government from purchasing directly or
indirectly any property sold by the government for
nonpayment of any tax, fee or other public charge.
(a) Is the sale to Juan valid? If so, what is the effect of the
Issuance of the Certificate of Title to Maria?
(b) If the sale is void, may Juan recover the P10,000.00?
If not, why not?
(c) If the sale is void, did it not nevertheless, operate to
divert Maria of her ownership? If it did, who then is the
owner of the property?
SUGGESTED ANSWER:
A. The sale of the land to Juan is not valid, being contrary
to law. Therefore, no transfer of ownership of the land
was effected from the delinquent taxpayer to him. The
original certificates of title obtained by Maria thru a free
patent grant from the Bureau of Lands under Chapter VII,
CA 141 is valid but in view of her delinquency, the said
title is subject to the right of the City Government to sell
the land at public auction. The issuance of the OCT did
not exempt the land from the tax sales. Section 44 of
P.O. No. 1529 provides that every registered owner
receiving a Certificate of Title shall hold the same free
from an encumbrances, subject to certain exemptions.
B. Juan may recover because he was not a party to the
violation of the law.
C. No, the sale did not divest Maria of her title precisely
because the sale is void. It is as good as if no sale ever
took place. In tax sales, the owner is divested of his land
initially upon award and issuance of a Certificate of Sale,
and finally after the lapse of the 1 year period from date
of registration, to redeem, upon execution by the
treasurer of an instrument sufficient in form and effects to
convey the property. Maria remained owner of the land
until another tax sale is to be performed in favor of a
qualified buyer.
FORM OF THE APPLICATION: (sec. 15, PD 1529)
1. In writing;
2. Signed by the applicant or person duly
authorized in his behalf;
3. Sworn to before an officer authorized to
administer oath for the province or city
where the application was actually signed;
4. If there is more than one applicant, they
shall be signed and sworn to by and in
behalf of each.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
CONTENTS OF THE APPLICATION (sec. 15, PD
1529)
1. Description of the land –
a. Together with the buildings and
improvements;
b. Survey plan approved by the
Director of Lands;
c. Technical description must be
attached (to the application).
2. Citizenship and civil status of applicant
a. If married; name of spouse
b. If marriage was dissolve; when and
how it was dissolved.
3. Assessed value of the land together with
the improvements based on the last
assessment for taxation purposes.
4. Mortgage or encumbrance affecting the
land or name of other persons having legal
or equitable interest therein.
5. Manner of acquisition of the land.
6. Full names and addresses of all occupants
of the land and those of the adjoining
owners, if known, and if not known, the
applicant shall state the extent of the
search made to find them.
7. If he applicant describes the land as
bounded by a public road or private way or
road, it shall state whether or not the
applicant claims any portion of the land
within the limits of the way or road and
whether the applicant desires to have the
line of way or road determined (sec. 20 PD
1529).
8. The court may require facts to be stated in
the application in addition to those
prescribed by the Decree not inconsistent
therewith and may require the filing of
additional papers.
9. If the applicant is a non-resident of the
Philippines, he shall file and instrument
appointing an agent residing in the
Philippines and shall agree that service of
any legal process shall be of the same legal
effect as if made upon the applicant within
the Philippines (sec. 16 PD 1529) .
WHERE TO FILE APPLICATION
GR: RTC of the province or city where the land is
situated.
Exception: Delegated jurisdiction of the MTC to
hear and determine cadastral or land registration
cases covering lots where –
a. There is no controversy or opposition;
b. Contested lots, the value of which does not
exceed 100, 000.
503
____________________________________________________________________________________________________
PD 1529 has eliminated the distinction between the
general jurisdiction vested in the RTC and the If transaction is If transaction is
limited jurisdiction when acting merely as a land BEFORE issuance of AFTER issuance of
registration court. Aimed at avoiding multiplicity of decree decree
suits, the change has simplified registration  Record instrument Register directly with
proceedings by conferring upon RTCs the authority in the ROD in the the ROD for purposes
to act not only on original applications but also same manner as if of cancelling such title
those filed after original registration, with power to no application was and issuing a TCT
hear and determine all questions arising upon such made
applications or petitions (Averia vs. Caguioa, 146  Present instrument
SCRA 459 [1986]). to the RTC, with a
motion praying
that the same be
AMENDMENTS IN ORDINARY considered in
REGISTRATION PROCEEDINGS relation to the
Striking out one or pending
more of the parcels of The court may strike application
land applied for or by a out at any time
severance of the
application Requisites of Opposition:
Substantial change in New technical 1. Set forth objections to the petition;
the boundaries, description and new 2. State the interest claimed by the oppositor;
increase in area, publication and notice 3. Apply for the remedy desired;
inclusion of additional are necessary (Benin 4. Signed and sworn to by him or by some
land vs. Tuason, 57 SCRA other duly authorized person.
531, [1974])
Joinder, substitution, GENERAL DEFAULT
or discontinuance of File motion with court When no person appears and answers within the
any of the parties time prescribed.
File motion with court;
Decrease in area no need for new SPECIAL DEFAULT
publication or notice When a party appears at the initial hearing without
having filed an answer and asks court for time to file
answer but failed to do so within the period allowed.
DOCTRINE OF NON-COLLATERAL ATTACK OF
DECREE OR TITLE JUDICIAL CONFIRMATION OF IMPERFECT OR
A decree of registration and registered title cannot INCOMPLETE TITLE UNDER THE PULIC LAND
be impugned, enlarged, altered, modified, or ACT
diminished either in collateral or direct proceeding  In rem judicial proceedings.
after the lapse of 1-year period prescribed by law.  The decree of registration issued is
conclusive and final.
Ejectment Suit vs. Cancellation of Title (2005)  Governed by court procedure and the law of
In an ejectment case filed by Don against Cesar, can the evidence.
latter ask for the cancellation of Don's title considering
that he (Cesar) is the rightful owner of the lot? Explain. WHEN TO FILE:
(2%)  Extended up to December 31 , 2020, as
SUGGESTED ANSWER:
provided in sec. 2, RA 9176.
Cesar cannot ask for the cancellation of Don's title even if
he is the rightful owner of the lot. In an action for
ejectment, the only issue involved is one of possession
de facto, the purpose of which is merely to protect the LIMITATION TO AREA APPLIED FOR:
owner from any physical encroachment from without. The Maximum of 12 hectares (sec. 3, RA 6940).
title of the land or its ownership is not involved, for if a
person is in actual possession thereof, he is entitled to be
maintained and respected in it even against the owner
himself. (Garcia WHO MAY BE APPLICANTS:
v. Anas, G.R. No. L-20617, May 31, 1965)
1. Filipino citizens who by themselves or
Since the case filed by Don against Cesar is an ejectment
case, the latter cannot ask for the cancellation of Don's through their predecessors-in-interest have
title. He has to file the proper action where the issue of been in open, continuous, exclusive and
ownership over the property can be raised. notorious possession and occupation of
alienable and disposable lands of public
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 504
____________________________________________________________________________________________________
domain under a bona fide claim of
acquisition of ownership since June 12,
1945 or prior thereto, or ever since time
immemorial (Oh Cho vs. Director of Lands,
75 Phil. 890, [1946]).
2. Filipino citizens who by themselves or
through their predecessors-in-interest have
been, prior to effectivity of PD 1073 (Jan.
25, 1977), in open, continuous, exclusive
and notorious possession and occupation
of agricultural lands of the public domain
under a bona fide claim of acquisition of
ownership, for at least 30 years, or at least
since Jan. 24, 1947 (RA 1942, Director of
Lands vs. IAC, and ACME, 146 SCRA 509
[1986]).
3. Public corporations or associations which
had acquired lands, formerly part of the
alienable and disposable lands of public
domain, form Filipino citizens who had
possessed the same in the manner and for
the length of time indicated in 1 and 2
above (Director of Lands vs. IAC and
ACME, 146 SCRA 509).
Note: a private corporation may institute
confirmation proceedings under sec. 48
(b) of CA 141 if at the time of the
institution of the registration proceedings,
the land was already a private land.
As long as the land is already considered
as having become private through
prescription, a corporation may institute
confirmation proceedings. Having a
private character, the land would no
longer be barred by the constitution to be
owned by a corporation. Land has
already become private, ipso jure, when
previously acquired by prescription by
natural person.
When the registration proceedings were
commenced, if the land had already
become private, the constitutional
prohibition against acquisitions by a
private corporation would not apply
(Natividad vs. CA, 202 SCRA 439
[1991]).
4. Natural-born citizens of the Philippines who
may have lost their Philippine citizenship,
who have acquired disposable and
alienable lands of the public domain from
Filipino citizens who had possessed the
same in the manner and for the length of
time indicated in 1 and 2 above (Republic
vs. CA, 235 SCRA 567 [1994]).
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
WHAT APPLICANT MUST PROVE:
1. The land is alienable and disposable land
of the public domain;
2. His possession was for the length of time
and in the manner and concept required by
law.
A judicial declaration that a parcel of land is public
does not preclude even the same applicant from
subsequently seeking a judicial confirmation of his
title to the same land, provided he thereafter
complies with the provisions of sec. 48 of CA 141,
as amended and as long as said land remains
alienable and disposable (Director of Lands vs. CA,
106 SCRA 426 [1981]).
Remedies; Judicial Confirmation; Imperfect Title
(1993)
On June 30, 1986, A filed in the RTC of Abra an
application for registration of title to a parcel of land under
P. D. No. 1529, claiming that since June 12, 1945, he has
been in open, continuous, exclusive and notorious
possession and occupation of said parcel of land of the
public domain which was alienable and disposable, under
a bona fide claim of ownership. After issuance of the
notice of initial hearing and publication, as required by
law, the petition was heard on July 29, 1987. On the day
of the hearing nobody but the applicant appeared. Neither
was there anyone who opposed the application.
Thereupon, on motion of the applicant, the RTC issued
an order of general default and allowed the applicant to
present his evidence. That he did. On September 30,
1989, the RTC dismissed A's application for lack of
sufficient evidence. A appealed to the Court of Appeals.
The appellant urged that the RTC erred in dismissing his
application for registration and in not ordering registration
of his title to the parcel of land in question despite the fact
that there was no opposition filed by anybody to his
application. Did the RTC commit the error attributed to it?
SUGGESTED ANSWER:
No, the RTC did not commit the error attributed to it. In an
application for Judicial confirmation of imperfect or
incomplete title to public agricultural land under Section
48 of the Public Land Act, the lack of opposition and the
consequent order of default against those who did not
guarantee the success of the application. It is still
incumbent upon the applicant to prove with well nigh
incontrovertible evidence that he has acquired a title to
the land that is fit for registration. Absent such registrable
title, it is the clear duty of the Land Registration Court to
dismiss the application and declare the land as public
land.
An application for land registration is a proceeding in rem.
Its main objective is to establish the status of the res
whether it is still part of our public domain as presumed
under the Regalian doctrine or has acquired the character
of a private property. It is the duty of the applicant to
overcome that presumption with sufficient evidence.
Remedies; Judicial Reconstitution of Title (1996)
In 1989, the heirs of Gavino, who died on August 10,
1987, filed a petition for reconstitution of his lost or
destroyed Torrens Title to a parcel of land in Ermita,
Manila. This was opposed by Marilou who claimed
ownership of the said land by a series of sales. She
505
____________________________________________________________________________________________________
claimed that Gavino had sold the property to Bernardo by the parties, the court continues to retain
way back in 1941 and as evidence thereof, she presented control over the case until the expiration of 1
a Tax Declaration in 1948 in the name of Bernardo, which year after the entry of decree of registration
cancelled the previous Tax Declaration in the name of by the LRA (Republic vs. Association
Gavino. Then she presented two deeds of sale duly
registered with the Register of Deeds, the first one
Benevola de Cebu, 178 SCRA 692 [1989]).
executed by Bernardo in 1954 selling the same property
to Carlos, and the second one executed by Carlos in
1963, selling the same property to her. She also claimed POST-JUDGMENT INCIDENTS
that she and her predecessors in interest have been in 1. Writ of Possession – order to sheriff to
possession of the property since 1948. If you were the deliver the land to the successful party
judge, how will you decide the petition? Explain. litigant.
SUGGESTED ANSWER: No prescription against the loser
If I were the judge, I will give due course to the petition of and anyone unlawfully and
the heirs of Gavino despite the opposition of Marilou for
the following reasons: a) Judicial reconstitution of a
adversely occupying.
certificate of title under RA. When writ may not issue: When a
No. 26 partakes of a land registration proceeding and is party entered into property after the
perforce a proceeding in rem. It denotes restoration of an issuance of final decree, is not an
existing instrument which has been lost or destroyed in its oppositor in registration
original form and condition. The purpose of reconstitution proceeding, and in possession of
of title or any document is to have the same reproduced, land for at least 10 years.
after proceedings. In the same form they were when the
loss or destruction occurred. 2. Writ of Demolition – The complement of
b) If the Court goes beyond that purpose, it acts
without or in excess of jurisdiction. Thus, where the
writ of possession; to demolish
Torrens Title sought to be reconstituted is in the name of improvements introduced by oppositor or
Gavino, the court cannot receive evidence proving that his successors in interest.
Marilou is the owner of the land. Marilou's dominical claim
to the land should be ventilated in a separate civil action MEANS TO RECOVER POSSESSION:
before the Regional Trial Court in its capacity as a court 1. Forcible Entry;
of general jurisdiction. 2. Unlawful Detainer;
REFERENCES: Heirs of Pedro Pinate vs. Dulay. 187 3. Accion Publiciana;
SCRA 12-20 (1990); Bunagan vs. CF1 Cebu Branch VI. 4. Accion Reivindicatoria.
97 SCRA 72 (1980); Republic vs. IAC. 157 SCRA 62,66
(1988); Margolles vs. CA, 230 SCRA 709; Republic us,
Feliciano, 148 SCRA 924.
DECREE OF REGISTRATION
Issued by the LRA pursuant to the order of the
PROOFS OF PRIVATE OWNERSHIP: court.
1. Spanish Title – inadmissible and  Binds the land, quiets title thereto, subject
ineffective proof of ownership in land only to such exceptions or liens as may be
registration proceedings filed after Aug. 16, provided by law.
1976.  Conclusive upon all persons including the
2. Tax declarations and tax payments – not government.
conclusive proof of ownership, must be
coupled with actual possession for the CONTENTS OF THE DECREE:
period required by law. 1. Date, hour and minute of its entry.
3. Other kinds of proof (ex. Testimonial 2. Whether the owner is married or
evidence to prove accretion, deed of sale). unmarried, and if married, the name of the
4. Presidential issuances and legislative spouse; provided that if the land is conjugal
acts – in favor of the grantee, a law ceding property, the decree shall be issued in the
full ownership to a government institution. name of both spouses.
3. If the owner is under disability, the nature of
such disability, and if a minor, his age.
JUDGMENT 4. Description of the land and shall set forth
Decision of court constituting its opinion after taking the estate of the owner, and also show their
into consideration the evidence submitted. relative easements, liens, attachments, and
 It becomes final upon the lapse of 15 (30) other encumbrances.
days from the receipt of notice of the 5. Other matters to be determined in
judgment. pursuance of the law.
 However, notwithstanding the lapse of the 15
(30) day period from the receipt of judgment PROCESS OF ISSUING THE OCT:

JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 506

____________________________________________________________________________________________________
1. Within 15 days from finality of order of
judgment directing registration of title –
court orders the LRA to issue decree of
registration and certificate of title.
2. Clerk of court will send order of court and
copies of judgment.
3. Writ of demolition may be issued. The court
has authority to order, as a consequence of
the writ of possession issued by it, the
demolition of improvements introduced by
the defeated oppositor or his successors-in-
interest.
4. Administrator will issue a decree of
registration and original and duplicate of
OCT that is signed by the Administrator,
entered and file decree of registration in the
LRA.
5. Send to ROD the original and duplicate title
and certificate for entry in his registration
book.
6. Enter in the record book, dated, signed,
numbered and sealed to take effect upon
date of entry.
7. ROD sends notice to the registered owner
ready for delivery after payment of fees.
8. ROD shall send duplicate and note on each
certificate of title to whom it is issued.
9. Original copy to be filed in the ROD.
10. Bound in consecutive order.
ATTRIBUTES AND LIMITATIONS ON
CERTIFICATE OF TITLE AND REGISTERED
LANDS:
1. Free from liens and encumbrances.
a. Claims and liens of whatever
character existing against the land
prior to the issuance of the
certificate of title are cut off by such
certificate and the certificate so
issued binds the whole world,
including the government.
b. EXCEPTIONS:
I. Those noted on the
certificate.
II. Liens, claims or rights
arising or existing under
the laws and the
constitution, which are not,
by law, required to appear
on record in the Register of
Deeds in order to be valid.
III. Unpaid real estate taxes
levied and assessed within
2 years immediately
preceding the acquisition of
any right over the land by
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
an innocent purchaser for
value.
IV. Any public highway, or
private way established or
recognized by law, or any
government irrigation,
canal or lateral thereof, if
the certificate of title does
not state the boundaries of
such highway or irrigation
canal or lateral thereof
have been determined.
V. Any disposition of the
property or limitation on the
issue thereof pursuant to
PD 27 or any other law or
regulations on agrarian
reform.
2. Incontrovertible and indefeasible –
a. GR: Upon expiration of 1 year from
and after the entry of the decree of
registration in the LRA, the decree
and the corresponding certificate of
title becomes incontrovertible and
indefeasible.
b. Exceptions:
I. If previous valid title of the
same land exists;
II. When land covered is not
capable of registration;
III. When registration of
certificate is attended by
fraud.
Prescription: Registration of land attended by
Fraud(1990)
In 1960, an unregistered parcel of land was mortgaged by
owner O to M, a family friend, as collateral for a loan. O
acted through his attorney-in-fact, son S, who was duly
authorized by way of a special power of attorney, wherein
O declared that he was the absolute owner of the land,
that the tax declarations/receipts were all issued in his
name, and that he has been in open, continuous and
adverse possession in the concept of owner.
As O was unable to pay back the loan plus interest for the
past five [5) years, M had to foreclose the mortgage. At
the foreclosure sale, M was the highest bidder. Upon
issuance of the sheriff’s final deed of sale and registration
in January, 1966, the mortgage property was turned over
to M's possession and control M has since then
developed the said property. In 1967, O died, survived by
sons S and P.
In 1977, after the tenth (10th) death anniversary of his
father O. son P filed a suit to annul the mortgage deed
and subsequent sale of the property, etc., on the ground
of fraud. He asserted that the property in question was
conjugal in nature actually belonging, at the time of the
mortgage, to O and his wife, W, whose conjugal share
went to their sons (S and P) and to O.
507
____________________________________________________________________________________________________
Torrens title (JM Tuason and Co.
(a) Is the suit filed by P barred by prescription? Explain inc. vs. CA, 93 SCRA 146 [1979]).
your answer.
b. The fact that the title to the land
(b) After the issuance of the sheriff's final deed of sale in
1966 in this case, assuming that M applied for registration
was lost does not mean that the
under the Torrens System and was issued a Torrens Title land ceased to be registered land
to the said property in question, would that added fact before the reconstitution of its title.
have any significant effect on your conclusion? State your (It cannot perforce be acquired by
reason. prescription (Ruiz vs. CA, 79 SCRA
525 [1977]).
SUGGESTED ANSWER: c. LACHES may be invoked to bar
(a) Under Art. 173 of the Civil Code, the action is barred reconveyance of land to the
by prescription because the wife had only ten (10) years registered owner only if there are
from the transaction and during the marriage to file a suit
for the annulment of the mortgage deed. Alternative
intervening rights of 3rd persons
Answers to (a) first Alternative Answer: which may be affected or
voidable contract since it involves a conjugal partnership prejudiced is such land is returned
property. The action to annul the same instituted in 1977, to the registered owner (De Lucas
or eleven years after the execution of the sheriff's final vs. Gamponia, 100 Phil. 277
sale, has obviously prescribed because: 1) An action to [1956]).
annul a contract on the ground of fraud
must be brought within four (4) years from the date of d. Possession by tolerance may not
discovery of the fraud. Since this is in essence an action be counted for the purpose of
to recover ownership, it must be reckoned from the date
of execution of the contract or from the registration of the
invoking the equitable doctrine of
alleged fraudulent document with the assessor's office for laches. Thus, possession of 41
the purpose of transferring the tax declaration, this being years cannot constitute
unregistered land, (Bael u. Intermediate Appellate Court unreasonable delay in asserting the
G. R. L-74423 Jan.30, 1989 169 SCRA 617). registered owner’s right when the
2) If the action is to be treated as an action to recover possession is merely tolerated
ownership of land, it would have prescribed just the same (Feliciano vs. Spouses Zaldivar,
because more than 10 years have already elapsed since GR No. 162593, Sep. 26, 2006).
the date of the execution of the sale.
SECOND ALTERNATIVE ANSWER:

(a) The action to recover has been barred by acquisitive

prescription in favor of M considering that M has
possessed the land under a claim of ownership for ten 4. Certificate of title is not subject to
(10) years with a just title. collateral attack

(b) If M had secured a Torrens Title to the land, all the
more S and P could not recover because if at all their
remedies would be:
1. A Petition to Review the Decree of Registration. This
can be availed of within one (1) year from-the entry
thereof, but only upon the basis of "actual fraud." There is
no showing that M committed actual fraud in securing his
title to the land; or
2. An action in personam against M for the reconveyance
of the title in their favor. Again, this remedy is available
within four years from the date of the discovery of the
fraud but not later than ten (10) years from the date of
registration of the title in the name of M.
3. Registered land is not subject
prescription
a. Even adverse, notorious and
continuous possession under claim
of ownership for the period required
by law is ineffective against a
Sec. 48 of PD 1529 provides that a
certificate of title shall not be subject to
collateral attack. It cannot be altered,
modified, or cancelled except in a direct
proceeding in accordance with the law.
5. Torrens Certificate is presumed valid
and devoid of flaws
a. Torrens Certificate of Title is
presumed to have been regularly
issued, valid and without defects.
The buyer has the right to rely upon
the face of the Torrens title and
dispense with the trouble of
inquiring further.
to b. Exception: When he has actual
knowledge of facts and
circumstances that would impel a
reasonably cautious and prudent
man to make and inquiry (Erasuta,
Jr. vs. CA, GR No> 149231, July
17, 2006).

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____________________________________________________________________________________________________
2. It is only the act of registering the
6. General incidents of registered land instrument to the ROD in the province or
city where the land lies which is the
Registered land or owners thereof are not operative act that conveys ownership or
relieved from the following – affects the land insofar as 3rd persons are
a. From any rights incident to the concerned.
relation of husband and wife,
landlord and tenant; 3. The act of registration creates a
b. From liability to attachment or levy constructive notice to the whole world of
on execution; such voluntary or involuntary instrument or
c. From liability to any lien of any court writ or process.
description established by law on
the land and buildings thereon, or
in the interest of the owner in such VOLUNTARY INVOLUNTARY
land or building; DEALINGS DEALINGS
d. From any right or liability that may Refer to such writ or
arise due to change of the law on order or processes
descent; issued by a court of
e. From rights of partition between co- record affecting
owners; Refer to deeds, registered land which by
f. From the right of the government to instruments, or law should be
take land by eminent domain; documents which are registered to be
g. From liability to be recovered by an results of the free and effective, and also to
assignee in insolvency or trustee in voluntary acts of the such instruments which
bankruptcy under the law relative to parties thereto are not the willful acts of
preferences; the registered owner
h. From any other rights or liabilities and which may have
created by law and applicable to been executed even
unregistered land. without his knowledge
or against his consent
7. Where certificate of title is obtained by a  Sale  Attachment
trustee  Real property  Injunction
mortgage  Mandamus
a. Trustee who obtains a Torrens title  Lease  Sale on execution
in his name, over the property held  Pacto de retro sale  Sale for unpaid
in trust by him for another cannot  Extra-judicial taxes (destraint)
repudiate the trust relying on the settlement  Adverse claims
registrations, such being one of the  Free  Notice of lis
limitations upon finality of title. patent/homestead pendens
 Powers of attorney
b. Trustee could not perforce legally  Trusts
convey ownership of the registered An innocent purchaser
property in her will for she is not the for value of registered
absolute owner thereof. land becomes the
registered owner the Entry thereof in the day
moment he presents book of the ROD is
SUBSEQUENT REGISTRATION and files a duly sufficient notice to all
notarized and valid persons even if the
 Rules as to the necessity and effects of deed of sale and the owner’s duplicate
registration in general – same is entered in the certificate of title is not
1. Except a will that purports to convey or day book and at the presented to the ROD
affect a registered land, the mere execution same time he
of the deeds of sale, mortgage, or lease or surrenders or presents
other voluntary documents serves only 2 the owner’s duplicate
purposes: certificated of title
a. As a contract between the parties covering the land sold
thereto; and and pays registration
b. As evidence of authority to the fees
ROD to register such documents. Need to present title to No presentation

JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 509

____________________________________________________________________________________________________
record the deed in required; annotation in
registry and to make entry book is sufficient
memorandum of title
2012 Bar Exam Question
75. The following are void contracts, except: a)
Pactum commissorium b) Pactum de non
alienando c) Pactum leonina d) Pacto de retro
VOLUNTARY DEALINGS
Operative Act: Registration by owner, if deed is not
registered, it is binding only between parties.
GR: Where there is nothing on the certificate of title
to indicate any cloud or vice in the ownership of the
property, or any encumbrance thereon, the
purchaser is not required to explore further than
what the Torrens title upon its face indicates in
quest for any hidden defect or inchoate right that
may defeat his right thereto (Fule vs. Legare, 7
SCRA 351).
 Every person dealing with registered land may
safely rely on the correctness of the certificate
of title issued therefore and the law will in no
way oblige him to go behind the certificate to
determine the condition of the property. Even if
a decree in a registration proceeding is infected
with nullity, still, an innocent purchaser for value
relying on the Torrens title issued in pursuance
therewith is protected (Cruz vs. CA and Suzara,
281 SCRA 491).
 Although generally a forged or fraudulent deed
is a nullity and conveys no title, however, there
are instances where such fraudulent document
may become the root of a valid title. One such
instance is where the certificate of title was
already transferred from the name of true owner
to the forger, and while it remained that way,
the land was subsequently sold to an innocent
purchaser for value (Fule vs. Legare, supra).
EXCEPTIONS:
1. Where the purchaser or mortgagee is a
bank/financing institution, the bank is by
nature of its business required to look
further into the Torrens title especially so
when there are facts and circumstances
which would impel a reasonably cautious
and prudent man to make further inquiry
(Dela Merced vs. GSIS, 365 SCRA 1).
2. Where the owner still holds a valid and
existing certificate of title covering the same
property because the law protects the
lawful holder of a registered title over the
transfer of a vendor bereft of any
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
transmissible right (Tomas vs. Tomas, 98
SCRA 280)
3. Purchaser is in bad faith (Ergeo vs. CA,
174 SCRA 484).
4. Sufficiently strong indications to impel
closer inquiry into the location, boundaries,
condition of the lot (Francisco vs. CA, 153
SCRA 330).
5. Where a person buys land not from the
registered owner but from one whose rights
to the land has been merely annotated on
the certificate (Quiniano vs. CA, 39 SCRA
221).
6. Purchaser of land with a certificate
containing a notice of lis pendens.
7. Purchaser had full knowledge of flaws and
defects of title (Bernales vs. IAC, 166
SCRA 519).
Purchaser in Good Faith; Mortgaged
Property (2008)
No. XIX. Juliet offered to sell her house and
lot, together with all the furniture and
appliances therein to Dehlma. Before agreeing
to purchase the property, Dehlma went to the
Register of Deeds to verify Juliet's title. She
discovered that while the property was
registered in Juliet's name under the Land
Registration Act, as amended by the Property
Registration Decree, it property, Dehlma told
Juliet to redeem the property from Elaine, and
gave her an advance payment to be used for
purposes of realesing the mortgage on the
property. When the mortgage was released,
Juliet executed a Deed of Absolute Sale over
the property which was duly registered with
the Registry of Deeds, and a new TCT was
issued in Dehlma's name. Dehlma immediately
took possession over the house and lot and
the movables therein. Thereafter, Dehlma went
to theAssessor's Office to get a new tax
declaration under her name. She was
surprised to find out that the property was
already declared for tax purposes in the name
of XYZ Bank which had foreclosed the
mortgage on the property before it was sold to
her. XYZ Bank was also the purchaser in the
foreclosure sale of the property. At that time,
the property was still unregistered but XYZ
Bank registered the Sheriff's Deed of
Conveyance in the day book of the Register of
Deeds under Act. 3344 and obtained a tax
declaration in its name.
(A). Was Dehlma a purchaser in good faith?
(2%)
SUGGESTED ANSWER: Yes, Dehlma is a
purchaser in good faith. In the present
case, before Dehlma bought the property,
510
____________________________________________________________________________________________________
she went to the Register of Deeds to verify
Juliet's title. When she discovered that the
property was mortgaged to Elaine, she gave
an advance payment so that Juliet could
release the mortgage. It was only after the
mortgage was released and free from the
claims of other persons that Dehlma bought
the property. Thus, Dehlma is a purchaser
in good faith (Mathay v. CA, G.R. No.
115788, 17 Sept, 1998).
(B). Who as between Dehlma and XYZ Bank
has a better right to the house and lot? (2%)
SUGGESTED ANSWER:
Between Dehlma and XYZ Bank, Dehlma
has a better right to the house and lot.
After the release of the mortgage, the Deed
of Absolute Sale was registered and a new
title was issued in Dehlma's name. Act
3344 is applicable exclusively to
instruments resulting from agreement of
parties thereto and does not apply to deeds
of a sheriff conveying to a purchaser
unregistered lands sold to him under
execution (Williams v. Suñer, 49 Phil. ,534).
(C). Who owns the movables inside the house?
(2%) SUGGESTED ANSWER: Dehlma owns
the movables because when she acquired
the house and lot from Juliet, all the
furniture and appliances therein were
included in the sale. As owner of the real
property, Dehlma also owns the movables
found therein (Art. 542, Civil Code).
PROCESS OF REGISTRATION: (generally)
1. File the instrument creating or transferring
the interest and the certificate of title with
ROD, including –
a. Owner’s duplicate;
b. Payment of fees and documentary
stamp tax;
c. Evidence of full payment of real
estate tax;
d. Document of transfer; 1 additional
copy for city/provincial assessor.
2. ROD shall make a memorandum on the
certificate of title, signed by him;
3. Issuance of the TCT.
REGISTRATION OF REAL PROPERTY
MORTGAGE:
1. Execution of deed in form sufficient in law
(public instrument);
2. Registration with the ROD where the land
lies –
a. Present deed of mortgage together
with
b. Owner’s duplicate
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
c. Payment of fees
d. ROD shall enter upon original
certificate and upon duplicate a
memorandum (date, time of filing,
signature file number assigned to
the deed)
e. ROD to note on the deed the date
and time of filing, and reference to
volume and page of the registration
book in which it was registered
3. No duplicate need be issued.
Registration; Deed of Mortgage (1994)
How do you register now a deed of mortgage of a parcel
of land originally registered under the Spanish Mortgage
Law?
SUGGESTED ANSWER:
a) After the Spanish Mortgage Law was abrogated by
P.D. 892 on February 16, 1976, all lands covered by
Spanish titles that were not brought under the Torrens
system within six 16] months from the date thereof have
been considered as "unregistered private lands."
Thus, a deed of mortgage affecting land originally
registered under the Spanish Mortgage Law is now
governed by the system of registration of transactions or
instruments affecting unregistered land under Section
194 of the Revised Administrative Code as amended by
Act No. 3344. Under this law, the instrument or
transaction affecting unregistered land is entered in a
book provided for the purpose but the registration thereof
is purely voluntary and does not adversely affect third
persons who have a better right.
b) By recording and registering with the Register of
Deeds of the place where the land is located, in
accordance with Act 3344. However, P.D. 892 required
holders of Spanish title to bring the same under the
Torrens System within 6 months from its effectivity on
February 16, 1976.
REGISTRATION OF CHATTEL MORTGAGE:
1. Execution of document
2. Present the document together with
affidavit of good faith
3. Payment of fees
4. ROD enters in DAY BOOK in strict order of
their presentation chattel mortgages and
other instruments relating thereto (primary
process)
5. ROD thereafter enter in a more detailed
form the essential contents of the
instrument in the Chattel Mortgage Register
(Complementary process).
EFFECT OF REGISTRATION;
1. Creates a lien that attaches to the property
in favor of the mortgagee;
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2. Constructive notice of his interest in the
property to the whole world.
EFFECT OF FAILURE TO REGISTER:
1. Valid between parties but void against 3 rd
persons.
2. Actual knowledge is same effect as
registration.
NOTE: If the thing is delivered, it shall be a pledge
and not a chattel mortgage.
AFFIDAVIT OF GOOD FAITH
A statement that the mortgage is made to secure a
valid and existing obligation and that it is not
entered into for purposes of fraud.
EFFECT OF ABSENCE OF AFFIDAVIT OF GOOD
FAITH:
1. Vitiates mortgage as against creditors and
subsequent encumbrancers.
2. Cannot be registered
3. May be valid between the parties.
REGISTRATION OF LEASE
It is the lessee, not the lessor, who is required to
initiate the registration.
1. File with the ROD the instrument creating
lease together with the owner’s duplicate of
certificate of title;
2. ROD to register by way of memorandum
upon certificate of title;
3. No new certificate shall be issued.
NOTE: When there is prohibition in mortgaged
property as regards subsequent conveyances, etc.,
leasehold cannot be registered in the title thereof.
EFFECT OF REGISRATION
1. Creates real right but without prejudice to
rights of 3rd persons;
2. If it is not registered, it is valid between
parties but not to 3rd persons without
notice.
MAY ALIENS REGISTER LEASE:
1. May be granted temporary rights for
residential purposes;
2. Limit of 25 years, renewable for another 25
years.
WHO ELSE MAY REGISTER
A builder on good faith.
REGISTRATION OF TRUST
1. Implied Trust: present a sworn statement
claiming interest by reason on an implied
trust with description of land and reference
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
to the number of certificate shall be
registered in the ROD.
2. Express Trust: instrument creating the
trust does not prohibit registration.
REGISTRATION OF APPOINTED TRUSTEE BY
THE COURT
1. Certified copy of decree shall be presented
to the ROD and surrender duplicate
certificate.
2. Cancel duplicate and new certificate shall
be entered by the ROD.
INVOLUNTARY DEALINGS
Transactions affecting land in which cooperation of
registered owner is not needed, or even against his
will.
1. Attachment
A writ issued at the institution or during
progress of an action commanding the
sheriff to attach the property, rights, credits,
or effects of the defendant to satisfy
demands of the plaintiff.
Kinds:
a. Preliminary
b. Garnishment
c. Levy on execution.
REGISTRATION OF ATTACHMENT/OTHER
LIENS:
a) Copy of writ in order to preserve any
lien, right, or attachment upon
registered land may be filed with the
ROD where the land lies, containing
number of certificate of title of land to
be affected or description of land.
b) ROD to index attachment in names of
both plaintiff and defendant or name of
persons for whom property is held or in
whose name stands in the record.
c) If duplicate of certificate is not
presented –
I. ROD shall, within 36 hours,
send notice to registered owner
by mail stating that there has
been registration and request
him to produce duplicate so
that memorandum may be
made;
II. If the owner neglects or refuses
to comply, the ROD shall report
the matter to the court;
III. The court, after notice, shall
enter an order to owner to
surrender certificate at the time
and place named therein.
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d) Although notice of attachment is not
noted in duplicate, notation in book of
entry of ROD produces the effect of
registration already.
EFFECTS OF REGISTRATION OF
ATTACHMENT:
a) Creates real right
b) Has priority over execution sale
c) But between two attachments, one that is
earlier in registration is preferred.
d) If it is not registered, actual knowledge is
same as registration.
2. Execution Sale
 To enforce a lien of any description on
registered land, any execution or affidavit to
enforce such lien shall be filed with the
ROD where the land lies.
 Register in registration book and
memorandum upon proper certificate of title
as adverse claim or as an encumbrance.
 To determine preferential rights between 2
liens; priority of registration of attachment.
a. Tax Sale:
 Sale of land for collection of
delinquent taxes and penalties due
the government.
 In personam (all persons interested
shall be notified so that they are
given an opportunity to be heard.
 Notice to be given to delinquent tax
payer at his last known address.
 Publication of notice must also be
made in a public and conspicuous
place where the property is situated
and at the main entrance of the
provincial building.
 Sale cannot affect rights of other
lien holders unless given the right
to defend their rights; due process
must be strictly observed.
 Tax lien superior to an attachment.
 There is no need to register a tax
lien because it is automatically
registered once the tax accrues.
 But the sale of registered land to
foreclose a tax lien needs to be
registered.
PROCEDURE OF REGISTRATION OF TAX
SALE:
a) Officer’s return shall be submitted to
the ROD together with the owner’s
duplicate title.
b) Registration in the registration book.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
c) Memorandum shall be entered in the
certificate as an adverse claim or
encumbrance.
d) After a period of redemption has
expired and no redemption made (2
years from registration of auction sale),
title must be cancelled and new title will
be issued.
e) Before the cancellation, notice shall be
sent to registered owner, to ask him to
surrender title and show cause why it
shall not be cancelled.
3. Adverse Claim
Is a notice to third persons that someone is
claiming an interest on the property or has
a better than the registered owner thereof.
The disputed land is subject to the outcome
of the dispute (Sajonas vs. CA, 258 SCRA
79).
CLAIM IS ADVERSE WHEN:
a) A claimant’s right or interest in
registered land is adverse to the
registered owner.
b) Such right arose subsequent to
date of original registration.
c) No other provision is made in the
Decree for the registration of such
right or claim (sec. 70, PD 1529)
A mere money claim cannot be registered as an
adverse claim (Sanchez vs. CA, 69 SCRA 327).
 Actual knowledge is equivalent to
registration of adverse claim.
 No 2nd adverse claim based on the
same ground may be registered by the
same claimant.
FORMAL REQUISITES OF AN ADVERSE CLAIM
(for purposes of registration):
1. Adverse claimant must state the
following in writing –
a. His alleged right or interest.
b. How and under whom such
alleged right or interest is
acquired.
c. The description of the land in
which the right or interest is
claimed.
d. Certificate of title number.
2. Such statement must be signed and
sworn to before a notary public.
3. Claimant shall state his residence or
place to which all notices may be
served upon him.
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NOTE: Non-compliance of the formal
requisites renders such adverse claim
non-registrable and ineffective.
PERIOD OF EFFECTIVITY; WHEN
CANCELLED:
 The adverse claim shall be effective for a
period of 30 days from the date of
registration and it may be cancelled:
a. After the lapse of 30 days, upon
the filing by the party-in-interest of
a verified petition for such
purpose.
b. Before the lapse of said 30 days,
upon the filing by the claimant of a
sworn petition withdrawing his
adverse claim.
c. Before the lapse of the 30-day
period, when a party-in-interest
files a petition in the proper RTC
for the cancellation of the adverse
claim and, after notice and
hearing, the court finds that the
claim is invalid. If the court also
finds the claim to be frivolous, it
may fine the claimant the amount
of not less than P1,000 nor more
than P5,000, in its discretion.
The ROD cannot on its own automatically
cancel the adverse claim. For this purpose, the
interested party must file with the proper court a
petition for cancellation of adverse claim (Diaz-
Duarte v. Ong, 298 SCRA 388 [1998]).
An adverse claim may exist concurrently with a
subsequent annotation of a notice of lis
pendens (Ty Sin Tei vs. Dy Piao, 103 Phil. 858,
GR No. 11272, May 28, 1958).
When an adverse claim exists concurrently with
a notice of lis pendens, the notice of adverse
claim may be validly cancelled after the
registration of such notice, since the notice of lis
pendens also serves the purpose of the
adverse claim (Villaflor vs. Juezan, 184 SCRA
315 [1990]).
Adverse Claims; Notice of Levy (1998)
Section 70 of Presidential Decree No. 1529, concerning
adverse claims on registered land, provides a 30-day
period of effectivity of an adverse claim, counted from the
date of its registration. Suppose a notice of adverse claim
based upon a contract to sell was registered on March 1,
1997 at the instance of the BUYER, but on June 1, 1997,
or after the lapse of the 30-day period, a notice of levy on
execution in favor of a JUDGMENT CREDITOR was also
registered to enforce a final judgment for money against
the registered owner. Then, on June 15, 1997 there
having been no formal cancellation of his notice of
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
adverse claim, the BUYER pays to the seller-owner the
agreed purchase price in full and residential, commercial,
industrial, or similar productive registers the
corresponding deed of sale. Because the annotation of
the notice of levy is carried over to the new title in his
name, the BUYER brings an action against the
JUDGMENT CREDITOR to cancel such annotation, but
the latter claims that his lien is superior because it was
annotated after the adverse claim of the BUYER had ipso
facto ceased to be effective. Will the suit prosper? [5%]
SUGGESTED ANSWER:
The suit will prosper. While an adverse claim duly
annotated at the back of a title under Section 7O of P.D.
1529 is good only for 30 days, cancellation thereof is still
necessary to render it ineffective, otherwise, the
inscription thereof will remain annotated as a lien on the
property. While the life of adverse claim is 3O days under
P.D. 1529, it continuous to be effective until it is canceled
by formal petition filed with the Register of Deeds.
The cancellation of the notice of levy is justified under
Section 108 of P.D. 1529 considering that the levy on
execution can not be enforced against the buyer whose
adverse claim against the registered owner was recorded
ahead of the notice of levy on execution.
4. Notice of lis pendens
The purpose of the notice of lis pendens is
to constructively advise, or warn all people
who deal with the property that they so deal
with it at their own risk, and whatever rights
they may acquire in the property in any
voluntary transaction are subject to the
results of the action, and may well be
inferior and subordinate to those which may
be finally determined and laid down therein
(Heirs of Marasigan vs. IAC, 152 SCRA
253 [1987]).
NOTE: It merely creates a contingency and
not a lien.
Annotation of Lis Pendens; When Proper (2001)
Mario sold his house and lot to Carmen for P1 million
payable in five (5) equal annual installments. The sale
was registered and title was issued in Carmen's name.
Carmen failed to pay the last three installments and Mario
filed an. action for collection, damages and attorneys fees
against her. Upon filing of the complaint, he caused a
notice of lis pendens to be annotated on Carmen's title. Is
the notice of lis pendens proper or not? Why? (5%)
SUGGESTED ANSWER:
The notice of lis pendens is not proper for the reason that
the case filed by Mario against Carmen is only for
collection, damages, and attorney's fees.
Annotation of a lis pendens can only be done in cases
involving recovery of possession of real property, or to
quiet title or to remove cloud thereon, or for partition or
any other proceeding affecting title to the land or the use
or occupation thereof. The action filed by Mario does not
fall on anyone of these.
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WHEN NOTICE OF LIS PENDENS IS
PROPER:
a. To recover possession of real estate;
b. To quiet title thereto;
c. To remove clouds upon title thereof;
d. For partition;
e. Other proceeding of any kind in court
directly affecting the title to the land or
the use or occupation thereof or the
building thereon.
EFFECT OF REGISTRATION:
a. Impossibility of alienating the property
during the pendency of the suit;
b. It may still be alienated but subject to
the result of the pending action;
c. ROD is duty bound to carry over notice
of lis pendens on all new titles to be
issued.
CANCELLATION OF LIS PENDENS:
Before final judgment, the court may order the
cancellation –
1) After showing that the notice is only for
the purpose of molesting an adverse
party.
2) When it is shown that it is not
necessary to protect the right of the
party who caused the registration
thereof.
3) When the consequences of the trial are
unnecessarily delaying the
determination of the case to the
prejudice of the other party.
4) ROD may also cancel by verified
petition of party who caused such
registration.
5) Deemed cancelled when the certificate
issued by the clerk of court stating
manner of disposal of proceeding is
registered.
LIS PENDENS HAS NO APPLICATION ON
THE FOLLOWING CASES:
1) Preliminary attachment;
2) Proceedings for the probate of will;
3) Levies on execution;
4) Proceedings for the administration of
the estate of a deceased person; and
5) Proceedings in which the only object is
the recovery of money judgment.
Notice of Lis Pendens (1995)
Rommel was issued a certificate of title over a parcel of
land in Quezon City. One year later Rachelle, the
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
legitimate owner of the land, discovered the fraudulent
registration obtained by Rommel. She filed a complaint
against Rommel for reconveyance and caused the
annotation of a notice of lis pendens on the certificate of
title issued to Rommel. Rommel now invokes the
indefeasibility of his title considering that one year has
already elapsed from its issuance. He also seeks the
cancellation of the notice of Lis pendens. May the court
cancel the notice of lis pendens even before final
judgment is rendered? Explain.
SUGGESTED ANSWER:
A Notice of Lis Pendens may be canceled even before
final Judgment upon proper showing that the notice is for
the purpose of molesting or harassing the adverse party
or that the notice of lis pendens is not necessary to
protect the right of the party who caused it to be
registered. (Section 77, P.D. No. 1529)
In this case, it is given that Rachelle is the legitimate
owner of the land in question. It can be said, therefore,
that when she filed her notice of lis pendens her purpose
was to protect her interest in the land and not just to
molest Rommel. It is necessary to record the Lis pendens
to protect her interest because if she did not do it, there is
a possibility that the land will fall into the hands of an
innocent purchaser for value and in that event, the court
loses control over the land making any favorable
judgment thereon moot and academic. For these
reasons, the notice of lis pendens may not be canceled.
Notice of Lis Pendens; Transferee Pendente Lite
(2002)
Sancho and Pacifico are co-owners of a parcel of land.
Sancho sold the property to Bart. Pacifico sued Sancho
and Bart for annulment of the sale and reconveyance of
the property based on the fact that the sale included his
one-the obligation. However, the action was brought
within the half pro-indiviso share. Pacifico had a notice of
lis pendens annotated on the title covering the property
and ordered the cancellation of the notice of lis pendens.
The notice of lis pendens could not be cancelled
immediately because the title over the property was with
a bank to which the property had been mortgaged by
Bart. Pacifico appealed the case. While the appeal was
pending and with the notice of lis pendens still
uncancelled, Bart sold the property to Carlos, who
immediately caused the cancellation of the notice of lis
pendens, as well as the issuance of a new title in his
name. Is Carlos (a) a purchaser in good faith, or (b) a
transferee pendente lite? If your answer is (a), how can
the right of Pacifico as co-owner be protected? Explain.
(5%)
SUGGESTED ANSWER:
A. Carlos is a buyer in bad faith. The notice of lis pendens
was still annotated at the back of the title at the time he
bought the land from Bart. The uncancelled notice of lis
pendens operates as constructive notice of its contents
as well as interests, legal or equitable, included therein.
All persons are charged with the knowledge of what it
contains. In an earlier case, it was held that a notice of an
adverse claim remains effective and binding
notwithstanding the lapse of the 30 days from its
inscription in the registry. This ruling is even more
applicable in a lis pendens.
Carlos is a transferee pendente lite insofar as Sancho’s
share in the co-ownership in the land is concerned
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because the land was transferred to him during the
pendency of the appeal.
B. Pacifico can protect his right as a co-owner by
pursuing his appeal; asking the Court of Appeals to order
the re-annotation of the lis pendens on the title of Carlos;
and by invoking his right of redemption of Bart’s share
under Articles 1620 of the New Civil Code.
ALTERNATIVE ANSWER:
A. Carlos is a purchaser in good faith. A possessor in
good faith has been defined as “one who is unaware that
there exists a flaw which invalidates his acquisition of the
thing” (Art. 526, NCC). Good faith consists in the
possessor’s belief that the person from whom he received
the thing was the owner of the same and could convey
his title. In the case [at bar], in question, while Carlos
bought the subject property from Bart while a notice of lis
pendens was still annotated thereon, there was also an
existing court order canceling the same. Hence, Carlos
cannot be considered as being “aware of a flaw which
invalidates [their] the acquisition of the thing” since the
alleged flaw, the notice of lis pendens, was already being
ordered cancelled at the time of the purchase. On this
ground alone, Carlos can already be considered a buyer
in good faith. (Po Lam v. Court of Appeals, 347 SCRA
86, [2000]).
B. To protect his right over the subject property, Pacifico
should have timely filed an action for reconveyance and
reinstated the notice of lis pendens.
OTHER PARTIES WHO NEED TO REGISTER:
1. Assignee in insolvency proceedings –
 Duty of the officer serving notice to file
copy of notice to ROD where the
property of debtor lies.
 Assignee appointed or elected shall be
entitled to entry of a new certificate of
registered land upon presentment of
copy of assignment with the
bankrupt’s duplicate certificate of title.
 New certificate shall (not?) state that it
is entered to him as assignee or
trustee in insolvency proceedings.
Judgment/Order vacating insolvency
Proceedings –
 Order shall also be registered.
 Surrender title issued in the name of
assignee and debtor shall be entitled
to entry of new certificate.
2. Government in eminent domain –
 Copy of judgment filed in ROD which
states description of property,
certificate number, interest
expropriated, nature of public use.
 Memorandum shall be made or new
certificate shall be issued, as the case
may be.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
CADASTRAL REGISTRATION
Is a proceedings in rem initiated by the filing of a
petition for registration by the government, not by
the persons claiming ownership of the land subject
thereof, and the latter are, on the pain of losing their
claim thereto, in effect, compelled to go to court to
make known their claim or interest therein and to
substantiate such claim or interest.
 The government does not seek registration of
the land in its own name.
 The objective of the proceeding is the
adjudication of title to the lands involved in the
proceeding.
PROCEDURE:
1. NOTICE of cadastral survey published
once in Official Gazette and posted in
conspicuous place with a copy furnished to
the mayor, and barangay captain.
2. NOTICE of date of survey by the Bureau of
Land Management and posting in bulletin
board of the municipal building of the
municipality or barrio, and shall mark the
boundaries of the lands by monuments set-
up in proper places thereon.
3. CADASTRAL survey.
4. FILING of petition.
5. PUBLICATION (twice in successive issues
of the Official Gazette), mailing, posting.
6. FILING answer.
7. HEARING of the case.
8. DECISION.
9. ISSUANCE of the decree and certificate of
title.
NOTE: The cadastral court is not limited to mere
adjudication of ownership in favor of one or more
claimants. If there are no successful claimants, the
property is declared public land. Additionally, while
the court has no jurisdiction to adjudicate lands
already covered by a certificate of title, it is
nonetheless true that this rule only applies where
there exists no serious controversy as to the
certificate’s authenticity vis-à-vis the land covered
therein (Republic vs. Vera, 120 SCRA 210 [1983])
PD 1529 CADASTRAL
Nature Voluntary Compulsory
Applicant Landowner Director of
Lands
 Usually  All cases of
involves lands are
private included
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Lands land  Anyone who applies for confirmation of
covered  It may also imperfect title has the burden of proof
refer to to overcome the presumption that the
public land sought to be registered forms part
agricultural of public domain (Regalian doctrine)
lands if the
object of UNDER THE CONSTITUTION:
the action 1. Agricultural – only one subject to alienation
is 2. Forest or timber
confirmatio 3. Mineral lands
n of an 4. National Park
imperfect UNDER THE PUBLIC LAND ACT:
title 1. Alienable/disposable:
Government, a. Agricultural
Landowners b. Residential, commercial, industrial
Parties Applicant and must come to c. Education, charitable
opponent court as d. Town sites and for public and
claimants of quasi-public uses
their own 2. Timber lands: inalienable
lands 3. Mineral lands: inalienable
Petitioner  If patent of title is issued, it is void
Purpose comes to ab initio for lack of jurisdiction
court to  It is not subject to acquisitive
confirm his prescription even if in possession
title and seeks for long time, it will not ripen into
the ownership
registration of  Except: mineral lands and forest
the land in his lands acquired before inauguration
name of Commonwealth in November 15,
Person who 1935 because there are vested
requests the Landowner Government rights which are protected
survey FISHPONDS
 No adverse  If no of the  Before: It was included in the definition of
claim applicants agriculture, therefore the conversation of
 If the can prove agricultural land to fishponds did not
applicant that he is change character of land
Effect of fails to entitled to  Now: It has a restricted meaning;
judgment prove his the land, Fishponds have a distinct category and
title, his the same cannot be alienated but may be leased
applicant shall be from government
may be declared
dismissed public (res WHEN GOVERNMENT GRANT DEEMED
without judicata) ACQUIRED BY OPERATION OF LAW:
prejudice 1. Deed of conveyance issued by government
(no res patent/grant
judicata) 2. Registered with ROD: mandatory, it is the
operative act to convey and transfer title
3. Actual physical possession, open and
continuous
 Land ceased to be part of public
domain and now ownership vests
to the grantee
PATENTS  Any further grant by Government
CLASSIFICATION OF LAND OF PUBLIC on same land is null and void
DOMAIN:  Upon registration, title is
 The classification is the exclusive indefeasible
prerogative of executive and not by
judiciary TITLE ISSUED PURSUANT TO REGISTRATION
OF PATENT:

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1. Indefeasible when registered, and deemed
incorporated with Torrens system 1 year
after the issuance of patent
2. May not be opened 1 year after entry by
LRA ( otherwise, confusion and uncertainty
on the government system of the
distribution of public lands may arise and
this must avoided)
Except: if it is annullable on ground of
fraud, then it may be reopened even after 1
year because registration does not shield
bad faith.
 The court, in the exercise of its
equity jurisdiction, may direct
reconveyance even without
ordering cancellation of title.
HOMESTEAD RESTRICTIONS:
1. Cannot be alienated within 5 years after
approval application for patent.
2. Cannot be liable for satisfaction of debt
within 5 years after approval of patent
application
3. Subject to repurchase of heirs within 5
years after alienation, when allowed
already
4. No private corporation, partnership,
association may lease land unless it is
solely for commercial, industrial,
educational, religious of charitable purpose,
or right of way (subject to consent of
grantee and approval of Secretary of
Environment & Natural Resources)
EXCEPTIONS:
1. Action for partition because it is not a
conveyance
2. Alienation or encumbrances made in favor
of the government.
Homestead Patents; Void Sale (1999)
In 1950, the Bureau of Lands issued a Homestead patent
to A. Three years later, A sold the homestead to B. A died
in 1990, and his heirs filed an action to recover the
homestead from B on the ground that its sale by their
father to the latter is void under Section 118 of the Public
Land Law. B contends, however, that the heirs of A
cannot recover the homestead from him anymore
because their action hasCesar bought a residential
condominium unit from Highprescribed and that
furthermore, A was in pari delicto. Decide. (5%)
SUGGESTED ANSWER:
The sale of the land by A to B 3 years after issuance of
the homestead patent, being in violation of Section 118 of
the Public Land Act, is void from its inception.
The action filed by the heirs of B to declare the nullity or
inexistence of the contract and to recover the land should
be given due course.
B's defense of prescription is untenable because an
action which seeks to declare the nullity or inexistence of
A contract does not prescribe. (Article 1410; Banaga vs.
Soler, 2 8CRA 765)
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
On the other hand, B's defense of pari delicto is equally
untenable. While as a rule, parties who are in pari delicto
have no recourse against each other on the principle that
a transgressor cannot profit from his own wrongdoing,
such rule does not apply to violations of Section 118 of
the Public Land Act because of the underlying public
policy in the said Act "to conserve the land which a
homesteader has acquired by gratuitous grant from the
government for himself and his family". In keeping with
this policy, it has been held that one who purchases a
homestead within the five-year prohibitory period can only
recover the price which he has paid by filing a claim
against the estate of the deceased seller (Labrador vs.
Delos Santos 66 Phil. 579) under the principle that no
one shall enrich himself at the expense of another.
Applying the pari delicto rule to violation of Section 118 of
the Public Land Act, the Court of Appeals has ruled that
"the homesteader suffers the loss of the fruits realized by
the vendee who in turn forfeits the improvement that he
has introduced into the land." (Obot vs. SandadiUas, 69
OG, April 35, 1966}
FIRST ALTERNATIVE ANSWER:
The action to declare the nullity of the sale did not
prescribe (Art. 1410}, such sale being one expressly
prohibited and declared void by the Public Lands Act [Art.
1409, par. (7)]. The prohibition of the law is clearly for the
protection of the heirs of A such that their recovering the
property would enhance the public policy regarding
ownership of lands acquired by homestead patent (Art.
1416). The defense of pari delicto is not applicable either,
since the law itself allows the homesteader to reacquire
the land even if it has been sold.
SECOND ALTERNATIVE ANSWER:
Prescription does not arise with respect to actions to
declare a void contract a nullity (Article 1410). Neither is
the doctrine of pari delicto applicable because of public
policy. The law is designed for the protection of the
plaintiff so as to enhance the public policy of the Public
Land Act to give land to the landless.
If the heirs are not allowed to recover, it could be on the
ground of laches inasmuch as 40 years had elapsed and
the owner had not brought any action against B
especially if the latter had improved the land. It would be
detrimental to B if the plaintiff is allowed to recover.
ERRING HOMESTEADER NOT BARRED BY
PARI DELICTO
 Pari delicto rule does not apply in
void contracts
 Violation of prohibition results in
void contract
 Action to recover does not
prescribe
TO WHOM REQUIREMENTS
GRANTED
HOMESTEAD PATENT
To any  Does not own more than 12
Filipino hectares of land in the
citizen over Philippines or has not had the
the age of benefit of any gratuitous
18 years or allotment of more than 12
head of a hectares
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family  Must have resided alienation
continuously for at least 1 year SPECIAL PATENT
in the municipality where the To Non-  Secretary of the DILG shall
land is situated Christian certify that the majority of the
 Must have cultivated at least Filipinos non- Christian inhabitants of
1/5 of the land applied for under the any given reservation have
FREE PATENT Public Land advanced sufficiently in
To any  Does not own more than 12 Act civilization
natural born hectares of land
citizen of the  Has continuously occupied and Fraud; Procurement of Patent; Effect (2000)
Philippines cultivated, either by himself or In 1979, Nestor applied for and was granted a Free
(filing ended Patent over a parcel of agricultural land with an area of
his predecessors-in-interest,
30 hectares, located in General Santos City. He
Dec. 31, tracts of disposable agricultural presented the Free Patent to the Register of Deeds, and
2000) public land for at least 30 years he was issued a corresponding Original Certificate of Title
prior to March 28, 1990 (OCT) No. 375, Subsequently, Nestor sold the land to
 Paid real property taxes on the Eddie. The deed of sale was submitted to the Register of
property while the same has Deeds and on the basis thereof, OCT No, 375 was
not been occupied by any cancelled and Transfer Certificate of Title (TCT) No. 4576
person was issued in the name of Eddie. In 1986, the Director of
Lands filed a complaint for annulment of OCT No, 375
 Grant will be limited to 12
and TCT No. 4576 on the ground that Nestor obtained
hectares only the Free Patent through fraud. Eddie filed a motion to
SALES PATENT dismiss on the ground that he was an innocent purchaser
Citizens of  To have at least 1/5 of the land for value and in good faith and as such, he has acquired
the broken and cultivated within 5 a title to the property which is valid, unassailable and
Philippines years from the date of the indefeasible. Decide the motion. (5%)
of lawful age award (public auction) SUGGESTED ANSWER:
The motion of Nestor to dismiss the complaint for
or head of  Shall be established actual
annulment of O.C.T. No. 375 and T.C.T. No. 4576 should
the family occupancy, cultivation, and be denied for the following reasons: 1) Eddie cannot
may improvement of at least 1/5 of claim protection as an innocent
purchase the land until the date of such purchaser for value nor can he interpose the defense of
public final payment indefeasibility of his title, because his TCT is rooted on a
agricultural  For agricultural lands suitable void title. Under Section 91 of CA No. 141, as amended,
land of not for residential, commercial or otherwise known as the Public Land Act, statements of
more than industrial purposes, patent is material facts in the applications for public land must be
12 hectares under oath. Section 91 of the same act provides that such
issued only after:
statements shall be considered as essential conditions
1. Full payment of purchase and parts of the concession, title, or permit issued, any
price, and false statement therein, or omission of facts shall ipso
2. Completion of the facto produce the cancellation of the concession. The
construction of permanent patent issued to Nestor in this case is void ab initio not
improvements appropriate only because it was obtained by fraud but also because it
for purpose for which the covers 30 hectares which is far beyond the maximum of
land is purchased (must be 24 hectares provided by the free patent law.
completed within 18 months 2) The government can seek annulment of the
original and transfer certificates of title and the reversion
from date of award)
of the land to the state. Eddie's defense is untenable. The
To any  Does not own a home lot in the protection afforded by the Torrens System to an innocent
citizen of municipality in which he purchaser for value can be availed of only if the land has
legal age for resides been titled thru judicial proceedings where the issue of
residential  In good faith, established his fraud becomes academic after the lapse of one (1) year
purposes residence on a parcel of land from the issuance of the decree of registration. In public
of public domain not needed land grants, the action of the government to annul a title
for public service fraudulently obtained does not prescribe such action and
will not be barred by the transfer of the title to an innocent
 Not more than 1000 sq.m. purchaser for value.
 Occupant must have
constructed his house on the
land and actually resided
therein PROCEDURE FOR REGISTRATION OF PUBLIC
 No public auction required LANDS (IFEFI)
 Not subject to any restriction
against encumbrance or
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 519
____________________________________________________________________________________________________
1. Official Issues and instrument of conveyance.
2. File the instrument with ROD
3. Instrument is to be entered in books and
owner’s duplicate to be issued
 Instrument is only a contract
between Government and private person
and does not take effect as conveyance if
unregistered; it is registration which is
operative act of conveying land; evidence
of authority for ROD to register.
4. Fees to be paid by grantee
5. After issuance of certificate of title, land is
deemed registered land within the purview of
the Torrens system
RESTRICTION ON ALIENATION/
ENCUMBRANCE OF LANDS TITLED PURSUANT
TO PATENTS:
1. Lands under free patent or homestead
patent is prohibited from being
alienated/encumbered, except if in favor of
the government, within 5 years from and
after the issuance of the patent or grant
(Republic v. Heirs of Felipe Alejaga, Sr.,
393 SCRA 361 [2002])
2. Transfer or conveyance of any homestead
after 5 years and before 25 years after the
issuance of the title without the approval of
the DENR Secretary
3. Lands acquired under emancipation
patents issued to landless tenants and
farmers must not be alienated or
encumbered within 10 years from issuance
of the title.
4. Conveyances and encumbrances made by
persons belonging to the “non-Christian
tribes” may be made only when the person
making the conveyance or encumbrance is
able to read and understand the language
in which the instrument or deed is written. If
illiterate, must be approved by the then
Commissioners of Mindanao and Sulu.
Foreshore Lands (2000)
Regina has been leasing foreshore land from the Bureau
of Fisheries and Aquatic Resources for the past 15 years.
Recently, she learned that Jorge was able to obtain a free
patent from the Bureau of Agriculture, covering the same
land, on the basis of a certification by the District Forester
that the same is already "alienable and disposable".
Moreover, Jorge had already registered the patent with
the Register of Deeds of the province, and he was issued
an Original Certificate of Title for the same. Regina filed
an action for annulment of Jorge's title on the ground that
it was obtained fraudulently. Will the action prosper? (2%)
SUGGESTED ANSWER:
An action for the annulment of Jorge's Original Certificate
of Title will prosper on the following grounds:
(1) Under Chapter IX of C .A, No. 141, otherwise known
as the Public Land Act, foreshore lands are disposable
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
for purposes, and only by lease when not needed by the
government for public service.
(2) If the land is suited or actually used for fishpond or
aquaculture purposes, it comes under the Jurisdiction of
the Bureau of Fisheries and Aquatic Resources (BFAR)
and can only be acquired by lease. (P.D. 705)
(3) Free Patent is a mode of concession under Section
41, Chapter VII of the Public Land Act, which is
applicable only for agricultural lands.
(4) The certificate of the district forester that the land is
already "alienable and disposable" simply means that the
land is no longer needed for forest purposes, but the
Bureau of Lands could no longer dispose of it by free
patent because it is already covered by a lease contract
between BFAR and Regina. That contract must be
respected.
(5) The free patent of Jorge is highly irregular and void ab
initio, not only because the Bureau has no statutory
authority to issue a free patent over a foreshore area, but
also because of the false statements made in his sworn
application that he has occupied and cultivated the land
since July 4, 1945, as required by the free patent law.
Under Section 91 of the Public Land Act, any patent
concession or title obtained thru false representation is
void ab initio. In cases of this nature, it is the government
that shall institute annulment proceedings considering
that the suit carries with it a prayer for the reversion of the
land to the state. However, Regina is a party in interest
and the case will prosper because she has a lease
contract for the same land with the government.
Reclamation of Foreshore Lands; Limitations (2000)
Republic Act 1899 authorizes municipalities and
chartered cities to reclaim foreshore lands bordering them
and to construct thereon adequate docking and harbor
facilities. Pursuant thereto, the City of Cavite entered into
an agreement with the Fil-Estate Realty Company,
authorizing the latter to reclaim 300 hectares of land from
the sea bordering the city, with 30% of the land to be
reclaimed to be owned by Fil-Estate as compensation for
its services. The Solicitor General questioned the validity
of the agreement on the ground that it will mean
reclaiming land under the sea which is beyond the
commerce of man. The City replies that this is authorized
by RA. 1899 because it authorizes the construction of
docks and harbors. Who is correct? (3%)
SUGGESTED ANSWER:
The Solicitor General is correct. The authority of the City
of Cavite under RA 1899 to reclaim land is limited to
foreshore lands. The Act did not authorize it to reclaim
land from the sea. "The reclamation being unauthorized,
the City of Cavite did not acquire ownership over the
reclaimed land. Not being the owner, it could not have
conveyed any portion thereof to the contractor.
ALTERNATIVE ANSWER:
It depends. If the reclamation of the land from the sea is
necessary in the construction of the docks and the
harbors, the City of Cavite is correct. Otherwise, it is not.
Since RA 1899 authorized the city to construct docks and
harbors, all works that are necessary for such
construction are deemed authorized. Including the
reclamation of land from the sea. The reclamation being
authorized, the city is the owner of the reclaimed land and
it may convey a portion thereof as payment for the
services of the contractor.
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ANOTHER ALTERNATIVE ANSWER:
On the assumption that the reclamation contract was
entered into before RA 1899 was repealed by PD 3-A, the
City of Cavite is correct. Lands under the sea are "beyond
the commerce of man" in the sense that they are not
susceptible of private appropriation, ownership or
alienation. The contract in question merely calls for the
answer or show up on the date of initial hearing, does not
reclamation of 300 hectares of land within the coastal
waters of the city. Per se, it does not vest, alienate or
transfer ownership of land under the sea. The city merely
engaged the services of Fil-Estate to reclaim the land for
the city.
NATURE OF TITLE TO PUBLIC LANDS
CONVEYED: INDEFEASIBLE AND CONCLUSIVE
 In the absence of registration, title to public land
is not perfected and therefore not indefeasible.
 In case of 2 titles obtained on the same date,
the one procured through a decree of
registration is superior than patent issued by
Director of Lands.
 2 titles procured by one person: on from
homestead patent and one from judicial decree
and sold to 2 different persons, the one who
bought if for value and in good faith and who
registered first shall have preference.
A free patent obtained through fraud or
misrepresentation is void. Furthermore, the one-
year prescriptive period provided in the Public Land
Act does not bar the state from asking for the
reversion of property acquired through such means.
---------- Well-settled is the doctrine that the
registration of a patent under the Torrens system
does not itself vest title; it merely confirms the
registrant’s already existing one. Verily registration
under the Torrens system is NOT A MODE of
ACQUIRING OWNERSHIP (Republic vs. Heirs of
Felipe Alejaga, 393 SCRA 361 [2002]).
Forgery; Innocent Purchaser; Holder in Bad Faith
(2005)
Rod, the owner of an FX taxi, found in his vehicle an
envelope containing TCT No. 65432 over a lot registered
in Cesar's name. Posing as Cesar, Rod forged Cesar's
signature on a Deed of Sale in Rod's favor. Rod
registered the said document with the Register of Deeds,
and obtained a new title in his name. After a year, he sold
the lot to Don, a buyer in good faith and for value, who
also registered the lot in his name.
a) Did Rod acquire title to the land? Explain. (2%)
SUGGESTED ANSWER:
No, Rod did not acquire title to the land. The inscription in
the registry, to be effective, must be made in good faith.
The defense of indefeasibility of a Torrens Title does not
extend to a transferee who takes the certificate of title
with notice of a flaw. A holder in bad faith of a certificate
of title is not entitled to the protection of the law, for the
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
law cannot be used as a shield for frauds. (Samonte v.
Court of Appeals, G.R. No. 104223, July 12, 2001)
In the case at bar, Rod only forged Cesar's signature on
the -Deed of Sale. It is very apparent that there was bad
faith on the part of Rod from the very beginning. As such,
he is not entitled to the protection of the Land
Registration Act.
b) Discuss the rights of Don, if any, over the property.
(2%)
SUGGESTED ANSWER:
It is a well-known rule in this jurisdiction that persons
dealing with registered land have the legal right to rely on
the face of the Torrens Certificate of Title and to dispense
with the need to inquire further, except when the party
concerned has actual knowledge of facts and
circumstances that would impel a reasonably cautious
man to make such inquiry. (Naawan Community Rural
Bank v. Court of Appeals, G.R. No. 128573, January 13,
2003)
In the given problem, the property was already registered
in the name of Rod when he bought the same from the
latter. Thus, Don could be considered as a buyer in good
faith and for value. However, since Rod did not actually
sell any property to him, Don has no right to retain
ownership over the property. He has only the right to
recover the purchase price plus damages.
Innocent Purchaser for Value (2001)
Rise Co. and paid the price in full. He moved into the unit,
but somehow he was not given the Condominium
Certificate of Title covering the property. Unknown to him,
High Rise Co. subsequently mortgaged the entire
condominium building to Metrobank as security for a loan
of P500 million. High Rise Co. failed to pay the loan and
the bank foreclosed the mortgage. At the foreclosure
sale, the bank acquired the building, being the highest
bidder. When Cesar learned about this, he filed an action
to annul the foreclosure sale insofar as his unit was
concerned. The bank put up the defense that it relied on
the condominium certificates of title presented by High
Rise Co., which were clean. Hence, it was a mortgagee
and buyer in good faith. Is this defense tenable or not?
Why? (5%.)
SUGGESTED ANSWER:
Metrobank's defense is untenable. As a rule, an innocent
purchaser for value acquires a good and a clean title to
the property. However, it is settled that one who closes
his eyes to facts that should put a reasonable man on
guard is not an innocent purchaser for value. In the
present problem the bank is expected, as a matter of
standard operating procedure, to have conducted an
ocular inspection, of the promises before granting any
loan. Apparently, Metrobank did not follow this procedure.
Otherwise, it should have discovered that the
condominium unit in question was occupied by Cesar and
that fact should have led it to make further inquiry. Under
the circumstances, Metrobank cannot be considered a
mortgagee and buyer in good faith.
Remedies; Fraud; Rights of Innocent
Purchaser (2009) No.IX. Before migrating to
Canada in 1992, the spouses Teodoro and
Anita entrusted all their legal papers and
documents to their nephew, Atty. Tan. Taking
advantage of the situation, Atty. Tan forged a
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deed of sale, making it appear that he had
bought the couple’s property in Quezon City.
In 2000, he succeeded in obtaining a TCT over
the property in his name. Subsequently, Atty.
Tan sold the same property to Luis, who built
an auto repair shop on the property. In 2004,
Luis registered the deed of conveyance, and
title over the property was transferred in his
name. In 2006, the spouses Teodoro and Anita
came to the Philippines for a visit and
discovered what had happened to their
property. They immediately hire you as lawyer.
What action or actions will you institute in
order to vindicate their rights? Explain fully.
(4%) SUGGESTED ANSWER:
I will institute the following actions against
Atty. Tan: (a). A civil action for damage for
the fraudulent transfer of the title in his
name and to recover the value of the
property; (b). An action against the National
Treasurer for compensation from the State
Assurance Fund which is set aside by law to
pay those who lose their land suffer
damages as a consequence of the operation
of the Torrens system; (c). A criminal
action for forgery or falsification of public
document; (d). A complaint with the
Supreme Court/Integrated Bar of the
Philippines to disbar or suspend him or
other disciplinary action for violation or
the Code of Professional Ethics. Any action
against Luis will not prosper because he is
an innocent purchaser for value. The Title
to the land he bought was already in the
name of the person who sold the property
to him, and there is nothing on the title
which will make him suspect about the
fraud committed by Atty. Tan.
Mirror Principle (1990)
In 1950's, the Government acquired a big landed estate
in Central Luzon from the registered owner for
subdivision into small farms and redistribution of bonafide
occupants, F was a former lessee of a parcel of land, five
hectares in area. After completion of the resurvey and
subdivision, F applied to buy the said land in accordance
with the guidelines of the implementing agency. Upon full
payment of the price in 1957, the corresponding deed of
absolute sale was executed in his favor and was
registered, and in 1961, a new title was issued in his
name. In 1963, F sold the said land to X; and in 1965 X
sold it to Y, new titles were successively issued in the
names of the said purchasers.
In 1977, C filed an action to annul the deeds of sale to F,
X and Y and their titles, on the ground that he (C) had
been in actual physical possession of the land, and that
the sale to F and the subsequent sales should be set
aside on the ground of fraud. Upon motion of defendants,
the trial court dismissed the complaint, upholding their
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
defenses of their being innocent purchasers for value,
prescription and laches. Plaintiff appealed.
(a) Is the said appeal meritorious? Explain your answer
(b) Suppose the government agency concerned joined C
in filing the said action against the defendants, would that
change the result of the litigation? Explain.
SUGGESTED ANSWER:
(a) The appeal is not meritorious. The trial court ruled
correctly in granting defendant's motion to dismiss for the
following reasons:
1. While there is the possibility that F, a former lessee of
the land was aware of the fact that C was the bona fide
occupant thereof and for this reason his transfer
certificate
required to explore beyond what the record in the registry
of title may be vulnerable, the transfer of the same land
and the issuance of new TCTs to X and Y who are
innocent purchasers for value render the latter's titles
indefeasible. A person dealing with registered land may
safely rely on the correctness of the certificate of title and
the law will not in any way oblige him to go behind the
certificate to determine the condition of the property in
search for any hidden defect or inchoate right which may
later invalidate or diminish the right to the land. This is the
mirror principle of the Torrens System of land registration.
1. The action to annul the sale was instituted in
1977 or more than (10) years from the date of execution
thereof in 1957, hence, it has long prescribed.
2. Under Sec 45 of Act 496, “the entry of a
certificate of title shall be regarded as an agreement
running with the land, and binding upon the applicant and
all his successors in title that the land shall be and always
remain registered land. A title under Act 496 is
indefeasible and to preserve that character, the title is
cleansed anew with every transfer for value (De Jesus v
City of Manila; 29 Phil. 73; Laperal v City of Manila, 62
Phil 313; Penullar v PNB 120 S 111).
SUGGESTED ANSWER:
(b) Even if the government joins C, this will not alter the
outcome of the case so much because of estoppel as an
express provision in Sec 45 of Act 496 and Sec 31 of PD
1529 that a decree of registration and the certificate of
title issued in pursuance thereof “shall be conclusive
upon and against all persons, including the national
government and all branches thereof, whether mentioned
by name in the application or not.”
Mirror Principle; Forgery; Innocent Purchaser (1999)
The spouses X and Y mortgaged a piece of registered
land to A, delivering as well the OCT to the latter, but they
continued to possess and cultivate the land, giving 1/2 of
each harvest to A in partial payment of their loan to the
latter, A, however, without the knowledge of X and Y,
forged a deed of sale of the aforesaid land in favor of
himself, got a TCT in his name, and then sold the land to
B, who bought the land relying on A's title, and who
thereafter also got a TCT in his name. It was only then
that the spouses X and Y learned that their land had been
titled in B's name. May said spouses file an action for
reconveyance of the land in question against b? Reason.
(5%)
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SUGGESTED ANSWER: void, it having been issued on the basis of a simulated or
The action of X and Y against B for reconveyance of the forged Deed of Sale. A forged deed is an absolute nullity
land will not prosper because B has acquired a clean title and conveys no title. The mortgage in favor of Desiderio
to the property being an innocent purchaser for value. is likewise null and void because the mortgagor is not the
A forged deed is an absolute nullity and conveys no title. owner of the mortgaged property. While it may be true
The fact that the forged deed was registered and a that under the "Mirror Principle" of the Torrens System of
certificate of title was issued in his name, did not operate Land Registration, a buyer or mortgagee has the right to
to vest upon an ownership over the property of X and Y. rely on what appears on the Certificate of Title, and in the
The registration of the forged deed will not cure the absence of anything to excite suspicion, is under no
infirmity. However, once the title to the land is registered obligation to look beyond the certificate and investigate
in the name of the forger and title to the land thereafter the mortgagor's title, this rule does not find application in
falls into the hands of an innocent purchaser for value, the case at hand because here. Catalino's title suffers
the latter acquires a clean title thereto. A buyer of a from two fatal infirmities, namely: a) The fact that it
registered land is not emanated from a forged deed of a
indicates on its face in quest for any hidden defect or simulated sale; b) The fact that it was derived from a
inchoate right which may subsequently defeat his right fraudulently
thereto. This is the "mirror principle' of the Torrens procured or improvidently issued second owner's copy,
system which makes it possible for a forged deed to be the real owner's copy being still intact and in the
the root of a good title. possession of the true owner, Bruce.
Besides, it appears that spouses X and Y are guilty of The mortgage to Desiderio should be cancelled without
contributory negligence when they delivered this OCT to prejudice to his right to go after Catalino and/or the
the mortgagee without annotating the mortgage thereon. government for compensation from the assurance fund.
Between them and the innocent purchaser for value, they
should bear the loss.
ALTERNATIVE ANSWER:
If the buyer B, who relied on the teller A's title, was not
aware of the adverse possession of the land by the REMEDIES AVAILABLE TO AGGRIEVED PARTY
spouses X and Y, then the latter cannot recover the
property from
IN REGISTRATION PROCEEDINGS:
B. B has in his favor the presumption of good faith which
can only be overthrown by adequate proof of bad faith. 1. Motion to Set Aside or Lift Order of
However, nobody buys land without seeing the property, Default –
hence, B could not have been unaware of such adverse a. Before judgment.
possession. If after learning of such possession, B simply b. FAME and with a valid defense.
closed his eyes and did nothing about it, then the suit for c. Under oath.
reconveyance will prosper as the buyer's bad faith will
have become evident. 2. Motion for New Trial –
a. 15 days from notice of judgment.
Forgery; Innocent Purchaser; Mirror Principle (1991) b. Grounds:
Bruce is the registered owner, of a parcel of land with a I. FAME which ordinary
building thereon and is in peaceful possession thereof. prudence could not have
He pays the real estate taxes and collects the rentals guarded against.
therefrom. Later, Catalino, the only brother of Bruce, filed II. Newly discovered
a petition where he, misrepresenting to be the attorney- evidence.
in-fact of Bruce and falsely alleging that the certificate of III. Award of excessive
title was lost, succeeded in obtaining a second owner's damages, or insufficiency
duplicate copy of the title and then had the same
transferred in his name through a simulated deed of sale
of evidence to justify
in his favor. Catalino then mortgaged the property to decision, or that the
Desiderio who had the mortgage annotated on the title. decision is against the law.
Upon learning of the fraudulent transaction, Bruce filed a
complaint against Catalino and Desiderio to have the title
of Catalino and the mortgage in favor of Desiderio 3. Appeal –
declared null and void. Will the complaint prosper, or will a. 15 days from notice of judgment (or
the title of Catalino and the mortgage to Desiderio be order denying motion for new
sustained?
trial/reconsideration?)
SUGGESTED ANSWER:
The complaint for the annulment of Catalino's Title will
b. To the CA/ SC.
prosper. In the first place, the second owner's copy of the
title secured by him from the Land Registration Court is 4. Relief from Judgment –
void ab initio, the owner's copy thereof having never been a. 60 days after petitioner learns of
lost, let alone the fact that said second owner's copy of judgment, but not more than 6
the title was fraudulently procured and improvidently months after entry of judgment.
issued by the Court. In the second place, the Transfer b. Requisites:
Certificate of Title procured by Catalino is equally null and

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____________________________________________________________________________________________________
I. FAME, with affidavit of
merit; in case of extrinsic
fraud, state that deprived of
hearing or prevented from
appealing.
II. After judgment.
III. Person deprived of right is
party to the case.
5. Petition for Review of Registration
Decree –
a. Within 1 year after entry of decree
of registration.
b. It will not prosper if transferred to
innocent purchaser for value.
c. Grounds:
I. Actual or extrinsic fraud
committed outside trial
preventing petitioner from
presenting his side;
II. Fatal infirmity in the
decision for want of due
process;
III. Lack of jurisdiction of the
court.
d. Requisites:
I. Petitioner has real and
dominical right;
II. He has been deprived of
such right;
III. Through actual or extrinsic
fraud;
IV. Petition is filed within 1
year from the issuance of
the decree;
V. Property has not been
passed to an innocent
purchaser for value
6. Action for Reconveyance –
a. Available so long as the property
has not passed to innocent
purchaser for value;
b. By aggrieved party, whose land
was registered wrongly to another
person;
c. Before issuance of decree, or
within/after 1 year from entry;
d. Action in personam;
e. If based on implied trust, it must be
instituted within 10 years, and
imprescriptible if by registered
owner or his children, co-heir, or
plaintiff in possession.
f. If based on expressed trust and
void trust, imprescriptible;
g. If based on fraud, it must be
instituted within 4 years from
discovery of the fraud.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Remedies; Reconveyance vs. Reopening of a Decree;
Prescriptive Period (2003)
Louie, before leaving the country to train as a chef in a
five-star hotel in New York, U.S.A., entrusted to his first-
degree cousin Dewey an application for registration,
under the Land Registration Act, of a parcel of land
located in Bacolod City. A year later, Louie returned to
the Philippines and discovered that Dewey registered the
land and obtained an Original Certificate of Title over the
property in his Dewey’s name. Compounding the matter,
Dewey sold the land to Huey, an innocent purchaser for
value. Louie promptly filed an action for reconveyance of
the parcel of land against Huey.
(a) Is the action pursued by Louie the proper remedy?
(b) Assuming that reconveyance is the proper remedy,
will the action prosper if the case was filed beyond one
year, but within ten years, from the entry of the decree of
registration? 5%
SUGGESTED ANSWER:
(a) An action for reconveyance against Huey is not the
proper remedy, because Huey is an innocent purchaser
for value. The proper recourse is for Louie to go after
Dewey for damages by reason of the fraudulent
registration and subsequent sale of the land. If Dewey is
insolvent, Louie may file a claim against the Assurance
Fund (Heirs of Pedro Lopez v. De Castro 324 SCRA 591
[2000] citing Sps.
Eduarte v. CA, 323 Phil. 462, 467 [1996]).
(b) Yes, the remedy will prosper because the action
prescribes in ten (10) years, not within one (1) year when
a petition for the reopening of the registration decree may
be filed. The action for reconveyance is distinct from the
petition to reopen the decree of registration (Grey Alba v.
De la Cruz, 17 Phil. 49 [1910}). There is no need to
reopen the registration proceedings, but the property
should just be reconveyed to the real owner.
The action for reconveyance is based on implied or
constructive trust, which prescribes in ten (10) years from
the date of issuance of the original certificate of title. This
rule assumes that the defendant is in possession of the
land. Where it is the plaintiff who is in possession of the
land, the action for reconveyance would be in the nature
of a suit for quieting for the title which action is
imprescriptible (David v. Malay, 318 SCRA 711 [1999]).
2011 Bar Exam
(94) An action for reconveyance of a registered
piece of land may be brought against the
owner appearing on the title based on a claim
that the latter merely holds such title in trust
for the plaintiff. The action prescribes,
however, within 10 years from the registration
of the deed or the date of the issuance of the
certificate of title of the property as long as the
trust had not been repudiated. What is the
exception to this 10-year prescriptive period?
(A) When the plaintiff had no notice of the deed
or the issuance of the certificate of title. (B)
When the title holder concealed the matter
from the plaintiff. (C) When fortuitous
524
____________________________________________________________________________________________________
circumstances prevented the plaintiff from Percival had been in actual cultivation of Lot B since
filing the case sooner. 1947.
(D) When the plaintiff is in possession of On 28 November 1986, the Solicitor General filed in
behalf of the Republic of the Philippines a complaint for
the property. cancellation of the free patent and the OCT issued in the
name of Melvin and the reversion of the land to public
domain on the ground of fraud and misrepresentation in
Remedies; Reconveyance; Elements (1995)
obtaining the free patent. On the same date, Percival
Rommel was issued a certificate of title over a parcel of
sued Martin for the reconveyance of Lot B.
land in Quezon City. One year later Rachelle, the
Melvin filed his answers interposing the sole defense in
legitimate owner of the land, discovered the fraudulent
both cases that the Certificate of Title issued in his name
registration obtained by Rommel. She filed a complaint
became incontrovertible and indefeasible upon the lapse
against Rommel for reconveyance and caused the
of one year from the issuance of the free patent.
annotation of a notice of lis pendens on the certificate of
Given the circumstances, can the action of the Solicitor
title issued to Rommel. Rommel now invokes the
General and the case for reconveyance filed by Percival
indefeasibility of his title considering that one year has
possibly prosper?
already elapsed from its issuance. He also seeks the
SUGGESTED ANSWER:
cancellation of the notice of Lis pendens. Will Rachelle's
"If fraud be discovered in the application which led to the
suit for reconveyance prosper? Explain.
issuance of the patent and Certificate of Title, this Title
SUGGESTED ANSWER:
becomes ipso facto null and void. Thus, in a case where
Yes, Rachelle's suit will prosper because all elements for
a person who obtained a free patent, knowingly made a
an action for reconveyance are present, namely: a)
false statement of material and essential facts in his
Rachelle is claiming dominical rights over the same
application for the same, by stating therein that the lot in
land. b) Rommel procured his title to the land by fraud. c)
question was part of the public domain not occupied or
The action was brought within the statutory period of
claimed by any other person, his title becomes ipso facto
four (4) years from discovery of the fraud and not later
canceled and consequently rendered null and void." "It is
than ten (10} years from the date of registration of
to the public interest that one who succeeds In
Rommel's title. d) Title to the land has not passed into the
fraudulently acquiring title to public land should not be
hands of an innocent purchaser for value.
allowed to benefit therefrom and the State, through the
Rommel can invoke the indefeasibility of his title if
Solicitor General, may file the corresponding action for
Rachelle had filed a petition to reopen or review the
annulment of the patent and the reversion of the land
decree of registration. But Rachelle instead filed an
involved to the public domain" (Dinero us. Director of
ordinary action in personam for reconveyance. In the
Lands; Kayaban vs. Republic L-33307,8-20-73; Director
latter action, indefeasibility is not a valid defense
of Lands us. Hon. Pedro Samson Animas, L-37682, 3-29-
because, in filing such action, Rachelle is not seeking to
74.) action for reconveyance, it would have prescribed,
nullify nor to impugn the indefeasibility of Rommel's title.
having been filed more than ten (10) years after
She is only asking the court to compel Rommel to
registration and issuance of an O.C.T. in the name of
reconvey the title to her as the legitimate owner of the
Melvin, were it not for the inherent infirmity of the latter's
land.
title. Under the facts, the statute of limitations will not
ALTERNATIVE ANSWER:
apply to Percival because Melvin knew that a part of the
land covered by his title actually belonged to Percival. So,
Yes. The property registered is deemed to be held in trust
instead of nullifying in toto the title of Melvin, the court, in
This action does not prescribe. With respect to Percival's
the exercise of equity and jurisdiction, may grant prayer
for the real owner by the person in whose name it is
for the reconveyance of Lot B to Percival who has
registered. The Torrens system was not designed to
actually possessed the land under a claim of ownership
shield one who had committed fraud or misrepresentation
since 1947. After all, if Melvin's title is declared void ab
and thus holds the title in bad faith. (Walstrom v. Mapa
initio and the land is reverted to the public domain,
Jr., (G .R 38387, 29 Jan. 1990) as cited in Martinez, D.,
Percival would just the same be entitled to preference
Summary of SC Decisions, January to June, 1990, p.
right to acquire the land from the government. Besides,
359],
well settled is the rule that once public land has been in
open, continuous, exclusive and notorious possession
Remedies; Reconveyance; Prescriptive Period (1997)
under a bonafide claim of acquisition of ownership for the
On 10 September 1965, Melvin applied for a free patent
period prescribed by Section 48 of the Public Land Act,
covering two lots - Lot A and Lot B - situated in Santiago,
the same ipso jure ceases to be public and in
Isabela. Upon certification by the Public Land Inspector
contemplation of law acquired the character of private
that Melvin had been in actual, continuous, open,
land. Thus, reconveyance of the land from Melvin to
notorious, exclusive and adverse possession of the lots
Percival would be the better procedure, (Vitale vs. Anore,
since 1925, the Director of Land approved Melvin's
90 Phil. 855; Pena, Land Titles and Deeds, 1982, Page
application on 04 June 1967. On 26 December 1967,
427)
Original Certificate of Title (OCT) No. P-2277 was issued ALTERNATIVE ANSWER:
in the name of Melvln.
The action of the Solicitor General should prosper,
On 7 September 1971, Percival filed a protest alleging
considering that the doctrine of indefeasibility of title does
that Lot B which he had been occupying and cultivating
not apply to free patent secured through fraud. A
since 1947 was included in the Free Patent issued in the
certificate of title cannot be used as shield to perpetuate
name of Melvin. The Director of Lands ordered the
fraud. The State is not bound by the period of prescription
investigation of Percival's protest. The Special
Investigator who conducted the investigation found that

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____________________________________________________________________________________________________
stated in Sec. 38 of Act 496. (Director of Lands vs. b. No negligence on his part;
Abanilla, 124 SCRA 358) c. Barred from bringing an action
The action for reconveyance filed by Percival may still (after 1 years from the decree);
prosper provided that the property has not passed to an d. Action for compensation has not
innocent third party for value (Dablo us. Court of Appeals.
226 SCRA 618), and provided that the action is filed
prescribed.
within the prescriptive period of ten years (Tale vs. Court
of Appeals. 208 SCRA 266). Since the action was filed by 8. Action for Compensation from the
Percival 19 years after the issuance of Melvin's title, it is Assurance Fund –
submitted that the same is already barred by prescription.
ALTERNATIVE ANSWER (to second part of question) Requisites:
The action for reconveyance filed by Percival will prosper, a. The aggrieved party sustained loss
because the land has ceased to be public land and has or damage, or is deprived of land or
become private land by open, continuous, public, any estate or interest therein;
exclusive possession under a bona fide claim of
ownership for more than thirty years, and Percival is still
b. Such loss, damage or deprivation
in possession of the property at present. His action for was occasioned by the bringing of
reconveyance can be considered as an action to quiet the land under the operation of the
title, which does not prescribe if the plaintiff is in Torrens system or arose after the
possession of the property. (Olviga v. CA. GR 1048013. original registration of the land;
October 21, 1993) c. The loss, damage, or deprivation
was due to fraud, or any error,
Remedies; Reopening of a Decree; Elements (1992) omission, mistake, or
What are the essential requisites or elements for the misdescription in any certificate of
allowance of the reopening or review of a decree of
registration?
title or in any entry or memorandum
SUGGESTED ANSWER: in the registration book;
The essential elements are: (1) that the petitioner has a d. There was no negligence on his
real or dominical right; (2) that he has been deprived part.
thereof through fraud; (3) that the petition is filed within
one (1) year from the issuance of the decree; and (4) that 9. Cancellation Suits –
the property has not yet been transferred to an innocent
purchaser {Rublico vs. Orellana 30 SCRA 511; Ubudan a. Where 2 certificates are issued to
vs. Gil Administrative Code of 1987 which prohibits different persons covering the
officers and 45 SCRA 17).
OPTIONAL EXTENDED ANSWER:
same land, the title earlier in date
Petition for review of the Decree of Registration. A must prevail, unless procured by
remedy expressly provided in Section 32 of P. D. No. fraud or is jurisdictionally flawed.
1529 (formerly Section 38. Act 496), this remedy has the b. The later title should be declared
following elements: a) The petition must be filed by a null and void and ordered
person claiming dominical or other real rights to the land cancelled.
registered in the name of respondent. c. It is the aggrieved party that
b) The registration of the land in the name of institutes the action;
respondent was procured by means of actual, (not just d. In case of non-registered land,
constructive) fraud, which must be extrinsic. Fraud is
actual if the registration was made through deceit or any
must be filed by the OSG for
other intentional act of downright dishonesty to enrich cancellation of the title or reversion
oneself at the expense of another. It is extrinsic when it is to the state.
something that was not raised, litigated and passed upon e. Voiding or cancellation of OCT
in the main proceedings. does not affect derivative TCTs if
c) The petition must be filed within one (1) year their holders are not given
from the date of the issuance of the decree. opportunity to be heard and defend
d) Title to the land has not passed to an Innocent their title.
purchaser for value (Libudan vs. Gil, 45_ SCRA 27,
1972), Rublico vs. Orrelana. 30 SCRA 511, 1969); RP vs.
CA, 57 G. R No. 40402. March 16, 1987).
10. Annulment of Judgment –

7. Recovery for Damages – May only be availed of when the ordinary

Requisites:
a. Person is wrongfully deprived of his
land by registration in name of
another (actual or constructive
fraud);
remedies of new trial, petition for relief, or
other appropriate remedies are no longer
available through no fault of the petitioner
(Linzag vs. CA, 291 SCRA 304 [1988]).
11. Reversion Suit –

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____________________________________________________________________________________________________
The objective is the cancellation of the
certificate of title and the consequential
reversion of the land covered in the grant to
the state.
GROUNDS:
a. Violation of sections 118, 120, 121
and 122 of the Public Land Act (ex.
Alienation or sale of homestead
executed within the 5 year
prohibitory period.
b. When land patented and titled is
not capable of registration.
c. Failure of the grantee to comply
with the conditions imposed by law
to entitle him to a patent or grant.
d. When area is an expanded area;
e. When the land is acquired in
violation of the constitution.
Note: indefeasibility of title,
prescription, laches and estoppels do
not bar reversion suits.
12. Quieting of Title -
NOTE: See arts. 476 to 481, NCC.
13. Criminal Action –
The state may criminally prosecute for
perjury the party who obtains registration
through fraud, such as by stating false
assertions in the sworn answer required of
applicants in cadastral proceedings (P. vs.
Cainglet, 16 SCRA 749 [1966]).
ASSURANCE FUND
 State creates a fund for the compensation of
persons injured by divesting/cutting-off of rights
due to the indefeasibility of title, following that
act of registration is operative act by which
state transfers title.
 It is created to relieve innocent persons from
harshness of doctrine that certificate of title is
conclusive evidence of an indefeasible title to
land.
 Upon entry of certificate in name of owner or
TC, ¼ of 1% shall be paid to the ROD based on
assessed value of the land as a contribution to
the assurance fund.
 If there is yet no assessment, a sworn
declaration of 2 disinterested persons on the
value of the land, subject to the determination
of the court, is required.
 Money shall be in the custody of the National
Treasurer who shall invest it until principal plus
interest aggregates to 500, 000. The excess
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
shall be paid to the assurance fund and be
included in the annual report of Treasurer to
Budget Secretary.
WHO IS ENTITLED:
1. Claimant must be owner, purchaser or
encumbrancer in good faith who suffered
actual damage by loss of land. In short, he
is deprived of his land or interest therein;
2. No negligence attributable to him;
3. Claimant is barred from filing action to
recover such land;
4. Action to recover from the assurance fund
has not prescribed.
LOSS/DAMAGES SHOULD NOT BE DUE TO
FOLLOWING REASONS:
1. Breach of trust;
2. Mistake in resurvey resulting in expansion
of area in certificate of title.
LOSS/DAMAGES SHOULD BE DUE TO THE
FOLLOWING REASONS:
1. Omission, mistake, misfeasance of ROD or
clerk of court;
2. Registration of 3rd persons as owner;
3. Mistake, omission, misdescription in
certificate of title, duplicate or entry in
books;
4. Cancellation.
AGAINST WHOM ACTION IS FILED:
1. Action due to deprivation of land due to
mistake, negligence, omission of ROD, etc;
ROD and National Treasurer as
Defendants; Solgen must appear.
2. Private persons involved should also be
impleaded.
LIABILITY:
1. Satisfy claims from private persons first.
2. When unsatisfied: secondarily liable is the
National Treasurer who shall pay through
the assurance fund – thereafter, the
government shall be subrogated to rights of
plaintiff to go against other parties or
securities.
MEASURE OF DAMAGES:
1. Based on the amount not greater than fair
market value of land.
2. Amount to be recovered not limited to 500,
000 which is maintained as standing fund.
3. If fund is not sufficient, National Treasurer
is authorized to make up deficiency from
other funds available even if not
appropriated.
527
____________________________________________________________________________________________________

WHEN AND WHERE TO FILE ACTION AGAINST 4. AMENDMENT AND ALTERATION OF

ASSURANCE FUND: CERTIFICATE OF TITLE
1. Any court of competent jurisdiction: RTC in A certificate of title cannot be altered,
city where property lies or resident of amended except in direct proceeding in
plaintiff. court (summary proceeding). Entries in
2. Action prescribes in 6 years from time registration books are not allowed to be
plaintiff actually suffered loss. altered except by order of court.
3. If plaintiff is a minor, insane, or imprisoned,
he has additional 2 years after disability is
removed to file action notwithstanding Grounds:
expiration of regular period. a. New interest that does not appear
on the instrument have been
created;
PETITIONS AND MOTIONS AFTER ORIGINAL b. Interest have been terminated or
REGISTRATION: ceased;
c. Omission or error was made in
1. LOST DUPLICATE CERTIFICATE entering certificate;
Sworn statement that certificate is lost to be d. Name of person on certificate has
filed by person-in-interest with ROD. been changed;
 Petition to court for the issuance of e. Registered owner has married;
a new title. f. Marriage has terminated;
 After notice and hearing, the court g. Corporation which owns registered
is to order issuance of new title with land has dissolved and has not
memorandum that it is issued in conveyed the property within 3
place of lost certificate (duplicate). years after its dissolution.
 If false statement, he can be
charged with the complex crime of What corrections are permitted –
estafa through falsification of public I. Alterations which do not
document. impair rights;
II. Alterations which impair
2. ADVERSE CLAIM rights but with consent of
all parties;
ADVERSE CLAIM NOTICE OF LIS III. Alterations to correct
PENDENS obvious mistakes.
Period is only for 30 Has no expiration
days
Somebody is claiming Notice that property is
a better right subject of a litigation 5. RECONSTITUTION OF ORIGINAL
Can only be removed Ends upon termination CERTIFICATE OF TITLE
upon court order of the case The restoration of the instrument which is
supposed to have been lost or destroyed in
its original form and condition, under the
3. PETITION SEEKING SURRENDER OF custody of ROD.
DUPLICATE TITLE
a. In voluntary and involuntary PURPOSE: To have the same reproduced,
conveyances, when the duplicate after proper proceedings in the same form
cannot be produced, the party must they were when the loss or destruction
petition the court to compel the occurred (Heirs of Pedro Pinote vs. Dulay,
surrender of duplicate certificate of 187 SCRA 12 [1990]).
title to the ROD.
b. After hearing, the court may order Effect: When reconstituted, the new title
issuance of a new certificate and has the same validity as old title.
annul the old certificate.
c. The new certificate shall contain an KINDS:
annotation regarding the annulment a. Judicial
of the old certificate. I. File a petition with the
RTC.
II. To be published in the
Official Gazette for 2
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 528
____________________________________________________________________________________________________
consecutive issues and on
main entrance of
municipality for at least 30
days before hearing.
III. In rem proceedings.
IV. Court is to order
reconstitution if it deemed
fit; and issue an order to
ROD.
V. The lack of essential data
is fatal.
Sources of judicial reconstitution of
title:
1) For OCT (in this order):
a) Owner’s duplicate of the
certificate of title;
b) Co-owner’s mortgagee’s or
lessee’s duplicate of said
certificate;
c) Certified copy of such certificate
previously issued by the ROD;
d) Authenticated copy of the
decree of registration or patent,
as the case may be, which was
the basis of the certificate of
title;
e) Deed of mortgage, lease, or
encumbrance containing
description of property covered
by the certificate of title and on
file with the ROD, or an
authenticated copy thereof
indicating that its original had
been registered;
f) Any other document which, in
the judgment of the court, is
sufficient and proper basis for
reconstitution.
2)For TCT –
a) Same as sources a, b and c for
reconstitution of OCT;
b) Deed of transfer or other
document containing description
of property covered by the TCT
and on file with the ROD, or an
authenticated copy thereof
indicating its original had been
registered and pursuant to
which the lost or destroyed
certificate of title was issued.
c) Same as sources (e) and (f) for
reconstitution of OCT.
b. Administrative
May be availed only on case of –
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
1) Substantial loss or destruction of
the original land titles due to fire,
flood, or other force majeure as
determined by the Administrator of
the LRA.
2) The number of certificates of title
lost or damaged should be at least
10 % of the total number in the
possession of the office of the
ROD.
3) In no case shall the number of
certificates of title lost or damaged
be less tan 500, and
4) Petitioner must have the duplicate
copy of the certificate of title (RA
6732).
NOTES:
 The law provides for retroactive application
thereof to cases 15 years immediately
preceding 1989.
 When the duplicate title of the landowner is lost,
the proper petition is not reconstitution of title,
but one filed with the court for issuance of new
title in lieu of the lost copy.
Sources for administrative reconstitution:
1) Owner’s duplicate of the certificate of title;
2) Co-owner’s, mortgagee’s or lessee’s
duplicate of said certificate.
CONTENTS OF PETITION:
1. That the owner’s duplicate of the certificate
of title had been lost or destroyed;
2. That no co-owner’s, mortgagor’s or lessee’s
duplicate had been issued;
3. The location, area and boundaries of the
property;
4. The nature and description of the 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
be any, the registration thereof has not
been accomplished, as yet.
PUBLICATION, MAILING AND POSTING IN
PETITIONS FOR RECONSTITUTION OF TITLE:
529
____________________________________________________________________________________________________
a. Notice thereof shall be published twice in
successive issues of the Official Gazette.
b. Must be posted on the main entrance of the
provincial building and municipal building in the
municipality or city where the land is situated.
c. To be sent by registered mail or otherwise, at
the expense of the petitioner, to every person
named in said notice.
d. This should be done at least 30 days prior to
the date of hearing.
The publication of the petition in 2 successive
issues of the OG, the service of the notice of
hearing to the adjoining owners and actual
occupants of the land, as well as posting of the
notices in the main entrance of the provincial and
municipal building where the property lies at least
30 days prior to the date of the hearing, as
prescribed by sec. 13 of RA 26, are MANDATORY
AND JURISDICTIONAL (MWSS vs. Sison, 124
SCRA 394 (1983).
Notice must be actually sent or delivered to parties
affected by the petition for reconstitution. The order
of reconstitution, therefore having been issued
without compliance of said requirements, has never
become final as it was null and void (Manila
Railroad Company vs. Moya, 215 P593).
Service of notice of the petition for reconstitution
filed under RA 26 to the occupants of the property,
owners of the adjoining properties, and all persons
who may have any interest in the property is not
required if the petition is based on the owner’s
duplicate certificate of title or on that of the co-
owner’s. mortgagee’s or lessee’s (Puzon vs. Sta
Lucia Realty and Development, Inc., 353 SCRA 699
[2001]).
Note: But Puzon does not apply if there is a
challenge as to the authenticity of the
duplicate certificate of title. The owner’s
duplicate is claimed by the LRA to be
spurious (Republic vs. Sanchez, GR No.
146081, July 17, 2006).
It has been consistently held that when the owner’s
duplicate certificate of title has not been lost, but is
in fact in the possession of another person, then the
reconstituted certificate is void because the court
that rendered the decision had no jurisdiction
(Feliciano vs. Zaldivar, GR No. 162593, Sep. 26,
2006).
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
REGISTRATION OF TRANSACTION EVIDENCED
BY LOST DOCUMENT:
 ROD is forbidden to effect registration of lost or
destroyed documents;
 Steps by interested parties –
1. Procure an authenticated copy of lost
or destroyed documents;
2. Secure an order from the court.
OFFENSES IN LAND REGISTRATION:
1. Larcency;
2. Perjury; false statement under oath;
3. Fraudulent procurement of certificate of
title;
4. Forgery –
a. Forging of seal in ROD, name,
signature or handwriting of any
officer of court or ROD;
b. Fraudulent stamping or assistance
in stamping;
c. Forging of handwriting, signature of
persons authorized to sign;
d. Use of any document which an
impression of the seal of the ROD
is forged.
5. Fraudulent sale: sale of mortgaged property
under the misrepresentation that it is not
encumbered; deceitful disposition of
property as free from encumbrance.
SYSTEM OF REGISTRATION FOR
UNREGISTERED LANDS
ROD keeps a day book and a register, and an index
system is also kept.
Procedure:
1. Presentment of instrument dealing in
unregistered land;
2. If found in order, register;
3. If found defective, then registration is
refused writing his reason for refusal.
CADASTRAL REGISTRATION
PROCEEDINGS
530
____________________________________________________________________________________________________

ORDINARY LAND
CADASTRAL SURVEY REGISTRATION
President orders Director Geodetic
PROCEEDINGS
of Lands to cause Engineers/employees
cadastral survey of the Bureau of Lands FILING of APPLICATION
inform
occupants/persons  Survey Plan approved by the Bureau of
claiming interest Lands.
NOTICE OF survey to Persons claiming  Muniments of Title
persons appearing to interest cooperate with
claim interest: engineers/employees SETTING OF DATE
 Publication, 1 Re: determination of Of Initial Hearing by Court Order
time in the boundaries.
Official Gazette.  Set 45-90 days from order
 Mailing. TRANSMITTAL
 Posting.
 Of documents and evidence to LRA
STATE FILES PETITION NOTICE OF INITIAL HEARING
PUBLICATION
Instituted by the Director of Lands (represented by
the Solicitor General)  Once in the OG and once in news papers.
Containing: MAILING
 Technical description;
 Survey plan  To named parties within 7 days from OG
NOTICE of Initial Hearing to parties appearing to POSTING
have interest and adjoining owners.
 Publication – 2 times in the Official Gazette  14 days at least before initial hearing.
(successive issues) FILING OF OPPOSITION
 Mailing
 Posting.  By any party claiming interest.
 On or before hearing or time allowed by
HEARING court
INITIAL HEARING
ANSWER to Petition – MOTION TO DISMISS
any claimant files answer  If land covered  Order of Default against all who did not
(partakes of an action to by prior OCT oppose
recover) on or before pursuant to TRIAL
hearing OR time allowed land patent.
by the court  If barred by res  Same order as ordinary civil proceedings.
judicata. JUDGMENT
APPEAL
JUDGMENT (same as ordinary land registration
FINALITY OF JUDGMENT
Proceedings)
 Decree of finality.
APPEAL  Instruction to LRA to issue decree of
registration.
DECREE ENTRY OF DECREE OF REGISTRATION
In the LRA

OCT  Copy sent to Register of Deeds

OCT

 Transcription of the decree and issuance of

the OCT.

JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer 531

____________________________________________________________________________________________________
SUBSTANTIALLY
COMPLETED:
FEBRUARY 28, 2012
10: 37 PM TUESDAY
ANNEXES
Republic Act No. 8552
February 25, 1998
AN ACT ESTABLISHING THE RULES AND
POLICIES ON THE DOMESTIC ADOPTION OF
FILIPINO CHILDREN AND FOR OTHER
PURPOSES
Be it enacted by the Senate and House of
Representatives of the Philippines in Congress
assembled:
ARTICLE I
GENERAL PROVISIONS
Section 1. Short Title. – This Act shall be known
as the "Domestic Adoption Act of 1998."
Section 2. Declaration of Policies. – (a) It is
hereby declared the policy of the State to ensure
that every child remains under the care and custody
of his/her parent(s) and be provided with love, care,
understanding and security towards the full and
harmonious development of his/her personality.
Only when such efforts prove insufficient and no
appropriate placement or adoption within the child's
extended family is available shall adoption by an
unrelated person be considered.
(b) In all matters relating to the care, custody and
adoption of a child, his/her interest shall be the
paramount consideration in accordance with the
tenets set forth in the United Nations (UN)
Convention on the Rights of the Child; UN
Declaration on Social and Legal Principles Relating
to the Protection and Welfare of Children with
Special Reference to Foster Placement and
Adoption, Nationally and Internationally; and the
Hague Convention on the Protection of Children
and Cooperation in Respect of Intercountry
Adoption. Toward this end, the State shall provide
alternative protection and assistance through foster
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
care or adoption for every child who is neglected,
orphaned, or abandoned.
(c) It shall also be a State policy to:
(i) Safeguard the biological parent(s) from
making hurried decisions to relinquish his/her
parental authority over his/her child;
(ii) Prevent the child from unnecessary
separation from his/her biological parent(s);
(iii) Protect adoptive parent(s) from attempts to
disturb his/her parental authority and custody
over his/her adopted child.
Any voluntary or involuntary termination of
parental authority shall be administratively or
judicially declared so as to establish the status
of the child as "legally available for adoption"
and his/her custody transferred to the
Department of Social Welfare and Development
or to any duly licensed and accredited child-
placing or child-caring agency, which entity
shall be authorized to take steps for the
permanent placement of the child;
(iv) Conduct public information and educational
campaigns to promote a positive environment
for adoption;
(v) Ensure that sufficient capacity exists within
government and private sector agencies to
handle adoption inquiries, process domestic
adoption applications, and offer adoption-
related services including, but not limited to,
parent preparation and post-adoption education
and counseling; and
(vi) Encourage domestic adoption so as to
preserve the child's identity and culture in
his/her native land, and only when this is not
available shall intercountry adoption be
considered as a last resort.
Section 3. Definition of Terms. – For purposes of
this Act, the following terms shall be defined as:
(a) "Child" is a person below eighteen (18) years
of age.
(b) "A child legally available for adoption"
refers to a child who has been voluntarily or
involuntarily committed to the Department or to a
duly licensed and accredited child-placing or
child-caring agency, freed of the parental
authority of his/her biological parent(s) or
guardian or adopter(s) in case of rescission of
adoption.
532
____________________________________________________________________________________________________
(c) "Voluntarily committed child" is one whose
parent(s) knowingly and willingly relinquishes
parental authority to the Department.
(d) "Involuntarily committed child" is one
whose parent(s), known or unknown, has been
permanently and judicially deprived of parental
authority due to abandonment; substantial,
continuous, or repeated neglect; abuse; or
incompetence to discharge parental
responsibilities.
(e) "Abandoned child" refers to one who has no
proper parental care or guardianship or whose
parent(s) has deserted him/her for a period of at
least six (6) continuous months and has been
judicially declared as such.
(f) "Supervised trial custody" is a period of time
within which a social worker oversees the
adjustment and emotional readiness of both
adopter(s) and adoptee in stabilizing their filial
relationship.
(g) "Department" refers to the Department of
Social Welfare and Development.
(h) "Child-placing agency" is a duly licensed and
accredited agency by the Department to provide
comprehensive child welfare services including,
but not limited to, receiving applications for
adoption, evaluating the prospective adoptive
parents, and preparing the adoption home study.
(i) "Child-caring agency" is a duly licensed and
accredited agency by the Department that
provides twenty four (24)-hour residential care
services for abandoned, orphaned, neglected, or
voluntarily committed children.
(j) "Simulation of birth" is the tampering of the
civil registry making it appear in the birth records
that a certain child was born to a person who is
not his/her biological mother, causing such child
to lose his/her true identity and status.
ARTICLE II
PRE-ADOPTION SERVICES
Section 4. Counseling Service. – The Department
shall provide the services of licensed social workers
to the following:
(a) Biological Parent(s) – Counseling shall be
provided to the parent(s) before and after the birth
of his/her child. No binding commitment to an
adoption plan shall be permitted before the birth of
his/her child. A period of six (6) months shall be
allowed for the biological parent(s) to reconsider
any decision to relinquish his/her child for adoption
before the decision becomes irrevocable.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Counseling and rehabilitation services shall also be
offered to the biological parent(s) after he/she has
relinquished his/her child for adoption.
Steps shall be taken by the Department to ensure
that no hurried decisions are made and all
alternatives for the child's future and the
implications of each alternative have been provided.
(b) Prospective Adoptive Parent(s) – Counseling
sessions, adoption fora and seminars, among
others, shall be provided to prospective adoptive
parent(s) to resolve possible adoption issues and to
prepare him/her for effective parenting.
(c) Prospective Adoptee – Counseling sessions
shall be provided to ensure that he/she understands
the nature and effects of adoption and is able to
express his/her views on adoption in accordance
with his/her age and level of maturity.
Section 5. Location of Unknown Parent(s). – It
shall be the duty of the Department or the child-
placing or child-caring agency which has custody of
the child to exert all efforts to locate his/her
unknown biological parent(s). If such efforts fail, the
child shall be registered as a foundling and
subsequently be the subject of legal proceedings
where he/she shall be declared abandoned.
Section 6. Support Services. – The Department
shall develop a pre-adoption program which shall
include, among others, the above mentioned
services.
ARTICLE III
ELIGIBILITY
Section 7. Who May Adopt. – The following may
adopt:
(a) Any Filipino citizen of legal age, in possession of
full civil capacity and legal rights, of good moral
character, has not been convicted of any crime
involving moral turpitude, emotionally and
psychologically capable of caring for children, at
least sixteen (16) years older than the adoptee, and
who is in a position to support and care for his/her
children in keeping with the means of the family.
The requirement of sixteen (16) year difference
between the age of the adopter and adoptee may
be waived when the adopter is the biological parent
of the adoptee, or is the spouse of the adoptee's
parent;
(b) Any alien possessing the same qualifications as
above stated for Filipino nationals: Provided, That
his/her country has diplomatic relations with the
Republic of the Philippines, that he/she has been
living in the Philippines for at least three (3)
533
____________________________________________________________________________________________________
continuous years prior to the filing of the application
for adoption and maintains such residence until the
adoption decree is entered, that he/she has been
certified by his/her diplomatic or consular office or
any appropriate government agency that he/she
has the legal capacity to adopt in his/her country,
and that his/her government allows the adoptee to
enter his/her country as his/her adopted
son/daughter: Provided, Further, That the
requirements on residency and certification of the
alien's qualification to adopt in his/her country may
be waived for the following:
(i) a former Filipino citizen who seeks to adopt a
relative within the fourth (4th) degree of
consanguinity or affinity; or
(ii) one who seeks to adopt the legitimate
son/daughter of his/her Filipino spouse; or
(iii) one who is married to a Filipino citizen and
seeks to adopt jointly with his/her spouse a
relative within the fourth (4th) degree of
consanguinity or affinity of the Filipino spouse; or
(c) The guardian with respect to the ward after the
termination of the guardianship and clearance of
his/her financial accountabilities.
Husband and wife shall jointly adopt, except in
the following cases:
(i) if one spouse seeks to adopt the legitimate
son/daughter of the other; or
(ii) if one spouse seeks to adopt his/her own
illegitimate son/daughter: Provided, However, that
the other spouse has signified his/her consent
thereto; or
(iii) if the spouses are legally separated from each
other.
In case husband and wife jointly adopt, or one
spouse adopts the illegitimate son/daughter of the
other, joint parental authority shall be exercised
by the spouses.
Section 8. Who May Be Adopted. – The following
may be adopted:
(a) Any person below eighteen (18) years of age
who has been administratively or judicially
declared available for adoption;
(b) The legitimate son/daughter of one spouse by
the other spouse;
(c) An illegitimate son/daughter by a qualified
adopter to improve his/her status to that of
legitimacy;
(d) A person of legal age if, prior to the adoption,
said person has been consistently considered
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
and treated by the adopter(s) as his/her own child
since minority;
(e) A child whose adoption has been previously
rescinded; or
(f) A child whose biological or adoptive parent(s)
has died: Provided, That no proceedings shall be
initiated within six (6) months from the time of
death of said parent(s).
Section 9. Whose Consent is Necessary to the
Adoption. – After being properly counseled and
informed of his/her right to give or withhold his/her
approval of the adoption, the written consent of the
following to the adoption is hereby required:
(a) The adoptee, if ten (10) years of age or over;
(b) The biological parent(s) of the child, if known,
or the legal guardian, or the proper government
instrumentality which has legal custody of the
child;
(c) The legitimate and adopted sons/daughters,
ten (10) years of age or over, of the adopter(s)
and adoptee, if any;
(d) The illegitimate sons/daughters, ten (10) years
of age or over, of the adopter if living with said
adopter and the latter's spouse, if any; and
(e) The spouse, if any, of the person adopting or
to be adopted.
ARTICLE IV
PROCEDURE
Section 10. Hurried Decisions. – In all
proceedings for adoption, the court shall require
proof that the biological parent(s) has been properly
counseled to prevent him/her from making hurried
decisions caused by strain or anxiety to give up the
child, and to sustain that all measures to strengthen
the family have been exhausted and that any
prolonged stay of the child in his/her own home will
be inimical to his/her welfare and interest.
Section 11. Case Study. – No petition for adoption
shall be set for hearing unless a licensed social
worker of the Department, the social service office
of the local government unit, or any child-placing or
child-caring agency has made a case study of the
adoptee, his/her biological parent(s), as well as the
adopter(s), and has submitted the report and
recommendations on the matter to the court hearing
such petiti
on.
At the time of preparation of the adoptee's case
study, the concerned social worker shall confirm
with the Civil Registry the real identity and
registered name of the adoptee. If the birth of the
adoptee was not registered with the Civil Registry, it
shall be the responsibility of the concerned social
worker to ensure that the adoptee is registered.
534
____________________________________________________________________________________________________
The case study on the adoptee shall establish that
he/she is legally available for adoption and that the
documents to support this fact are valid and
authentic. Further, the case study of the adopter(s)
shall ascertain his/her genuine intentions and that
the adoption is in the best interest of the child.
The Department shall intervene on behalf of the
adoptee if it finds, after the conduct of the case
studies, that the petition should be denied. The
case studies and other relevant documents and
records pertaining to the adoptee and the adoption
shall be preserved by the Department.
Section 12. Supervised Trial Custody. – No
petition for adoption shall be finally granted until the
adopter(s) has been given by the court a
supervised trial custody period for at least six (6)
months within which the parties are expected to
adjust psychologically and emotionally to each
other and establish a bonding relationship. During
said period, temporary parental authority shall be
vested in the adopter(s).
The court may motu proprio or upon motion of any
party reduce the trial period if it finds the same to be
in the best interest of the adoptee, stating the
reasons for the reduction of the period. However,
for alien adopter(s), he/she must complete the six
(6)-month trial custody except for those enumerated
in Sec. 7 (b) (i) (ii) (iii).
If the child is below seven (7) years of age and is
placed with the prospective adopter(s) through a
pre-adoption placement authority issued by the
Department, the prospective adopter(s) shall enjoy
all the benefits to which biological parent(s) is
entitled from the date the adoptee is placed with the
prospective adopter(s).
Section 13. Decree of Adoption. – If, after the
publication of the order of hearing has been
complied with, and no opposition has been
interposed to the petition, and after consideration of
the case studies, the qualifications of the
adopter(s), trial custody report and the evidence
submitted, the court is convinced that the
petitioners are qualified to adopt, and that the
adoption would redound to the best interest of the
adoptee, a decree of adoption shall be entered
which shall be effective as of the date the original
petition was filed. This provision shall also apply in
case the petitioner(s) dies before the issuance of
the decree of adoption to protect the interest of the
adoptee. The decree shall state the name by which
the child is to be known.
Section 14. Civil Registry Record. – An amended
certificate of birth shall be issued by the Civil
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Registry, as required by the Rules of Court,
attesting to the fact that the adoptee is the child of
the adopter(s) by being registered with his/her
surname. The original certificate of birth shall be
stamped "cancelled" with the annotation of the
issuance of an amended birth certificate in its place
and shall be sealed in the civil registry records. The
new birth certificate to be issued to the adoptee
shall not bear any notation that it is an amended
issue.
Section 15. Confidential Nature of Proceedings
and Records. – All hearings in adoption cases
shall be confidential and shall not be open to the
public. All records, books, and papers relating to the
adoption cases in the files of the court, the
Department, or any other agency or institution
participating in the adoption proceedings shall be
kept strictly confidential.
If the court finds that the disclosure of the
information to a third person is necessary for
purposes connected with or arising out of the
adoption and will be for the best interest of the
adoptee, the court may merit the necessary
information to be released, restricting the purposes
for which it may be used.
ARTICLE V
EFFECTS OF ADOPTION
Section 16. Parental Authority. – Except in cases
where the biological parent is the spouse of the
adopter, all legal ties between the biological
parent(s) and the adoptee shall be severed and the
same shall then be vested on the adopter(s).
Section 17. Legitimacy. – The adoptee shall be
considered the legitimate son/daughter of the
adopter(s) for all intents and purposes and as such
is entitled to all the rights and obligations provided
by law to legitimate sons/daughters born to them
without discrimination of any kind. To this end, the
adoptee is entitled to love, guidance, and support in
keeping with the means of the family.
Section 18. Succession. – In legal and intestate
succession, the adopter(s) and the adoptee shall
have reciprocal rights of succession without
distinction from legitimate filiation. However, if the
adoptee and his/her biological parent(s) had left a
will, the law on testamentary succession shall
govern.
ARTICLE VI
RESCISSION OF ADOPTION
535
____________________________________________________________________________________________________
Section 19. Grounds for Rescission of
Adoption. – Upon petition of the adoptee, with the
assistance of the Department if a minor or if over
eighteen (18) years of age but is incapacitated, as
guardian/counsel, the adoption may be rescinded
on any of the following grounds committed by the
adopter(s): (a) repeated physical and verbal
maltreatment by the adopter(s) despite having
undergone counseling; (b) attempt on the life of the
adoptee; (c) sexual assault or violence; or (d)
abandonment and failure to comply with parental
obligations.
Adoption, being in the best interest of the child,
shall not be subject to rescission by the adopter(s).
However, the adopter(s) may disinherit the adoptee
for causes provided in Article 919 of the Civil Code.
Section 20. Effects of Rescission. – If the petition
is granted, the parental authority of the adoptee's
biological parent(s), if known, or the legal custody of
the Department shall be restored if the adoptee is
still a minor or incapacitated. The reciprocal rights
and obligations of the adopter(s) and the adoptee to
each other shall be extinguished.
The court shall order the Civil Registrar to cancel
the amended certificate of birth of the adoptee and
restore his/her original birth certificate.
Succession rights shall revert to its status prior to
adoption, but only as of the date of judgment of
judicial rescission. Vested rights acquired prior to
judicial rescission shall be respected.
All the foregoing effects of rescission of adoption
shall be without prejudice to the penalties
imposable under the Penal Code if the criminal acts
are properly proven.
ARTICLE VII
VIOLATIONS AND PENALTIES
Section 21. Violations and Penalties. – (a) The
penalty of imprisonment ranging from six (6) years
and one (1) day to twelve (12) years and/or a fine
not less than Fifty thousand pesos (P50,000.00),
but not more than Two hundred thousand pesos
(P200,000.00) at the discretion of the court shall be
imposed on any person who shall commit any of the
following acts:
(i) obtaining consent for an adoption through
coercion, undue influence, fraud, improper
material inducement, or other similar acts;
(ii) non-compliance with the procedures and
safeguards provided by the law for adoption; or
(iii) subjecting or exposing the child to be adopted
to danger, abuse, or exploitation.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(b) Any person who shall cause the fictitious
registration of the birth of a child under the name(s)
of a person(s) who is not his/her biological parent(s)
shall be guilty of simulation of birth, and shall be
punished by prision mayor in its medium period and
a fine not exceeding Fifty thousand pesos
(P50,000.00).
Any physician or nurse or hospital personnel who,
in violation of his/her oath of office, shall cooperate
in the execution of the abovementioned crime shall
suffer the penalties herein prescribed and also the
penalty of permanent disqualification.
Any person who shall violate established
regulations relating to the confidentiality and
integrity of records, documents, and
communications of adoption applications, cases,
and processes shall suffer the penalty of
imprisonment ranging from one (1) year and one (1)
day to two (2) years, and/or a fine of not less than
Five thousand pesos (P5,000.00) but not more than
Ten thousand pesos (P10,000.00), at the discretion
of the court.
A penalty lower by two (2) degrees than that
prescribed for the consummated offense under this
Article shall be imposed upon the principals of the
attempt to commit any of the acts herein
enumerated. Acts punishable under this Article,
when committed by a syndicate or where it involves
two (2) or more children shall be considered as an
offense constituting child trafficking and shall merit
the penalty of reclusion perpetua.
Acts punishable under this Article are deemed
committed by a syndicate if carried out by a group
of three (3) or more persons conspiring and/or
confederating with one another in carrying out any
of the unlawful acts defined under this Article.
Penalties as are herein provided, shall be in
addition to any other penalties which may be
imposed for the same acts punishable under other
laws, ordinances, executive orders, and
proclamations.
When the offender is an alien, he/she shall be
deported immediately after service of sentence and
perpetually excluded from entry to the country.
Any government official, employee or functionary
who shall be found guilty of violating any of the
provisions of this Act, or who shall conspire with
private individuals shall, in addition to the above-
prescribed penalties, be penalized in accordance
with existing civil service laws, rules and
regulations: Provided, That upon the filing of a
case, either administrative or criminal, said
government official, employee, or functionary
536
____________________________________________________________________________________________________
concerned shall automatically suffer suspension
until the resolution of the case.
Section 22. Rectification of Simulated Births. –
A person who has, prior to the effectivity of this Act,
simulated the birth of a child shall not be punished
for such act: Provided, That the simulation of birth
was made for the best interest of the child and that
he/she has been consistently considered and
treated by that person as his/her own son/daughter:
Provided, further, That the application for correction
of the birth registration and petition for adoption
shall be filed within five (5) years from the effectivity
of this Act and completed thereafter: Provided,
finally, That such person complies with the
procedure as specified in Article IV of this Act and
other requirements as determined by the
Department.
ARTICLE VIII
FINAL PROVISIONS
Section 23. Adoption Resource and Referral
Office. –
Section 24. Implementing Rules and Regulations. –
Section 25. Appropriations. –
Section 26. Repealing Clause. –
Section 27. Separability Clause. –
Section 28. Effectivity Clause. –
Approved: February 25, 1998
REPUBLIC ACT NO. 8043
. (g) Matching refers to the judicious pairing of the
. adoptive child and the applicant to promote a
AN ACT ESTABLISHING THE RULES TO
GOVERN INTER-COUNTRY ADOPTION OF
FILIPINO CHILDREN, AND FOR OTHER
PURPOSES.
ARTICLE I
GENERAL PROVISIONS
Section 1. Short Title. — This Act shall be known
as the "Inter-Country Adoption Act of 1995."
Sec. 2. Declaration of Policy. — It is hereby
declared the policy of the State to provide every
neglected and abandoned child with a family that
will provide such child with love and care as well as
opportunities for growth and development.
Towards this end, efforts shall be exerted to place
the child with an adoptive family in the
Philippines. However, recognizing that inter-country
adoption may be considered as allowing aliens not
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
presently allowed by law to adopt Filipino children if
such children cannot be adopted by qualified
Filipino citizens or aliens, the State shall take
measures to ensure that inter-country adoptions are
allowed when the same shall prove beneficial to the
child's best interests, and shall serve and protect
his/her fundamental rights.
Sec. 3. Definition of Terms. — As used in this
Act. the term:
(a) Inter-country adoption refers to the socio-legal
process of adopting a Filipino child by a foreigner or
a Filipino citizen permanently residing abroad
where the petition is filed, the supervised trial
custody is undertaken, and the decree of adoption
is issued outside the Philippines.
(b) Child means a person below fifteen (15) years
of age unless sooner emancipated by law.
(c) Department refers to the Department of Social
Welfare and Development of the Republic of the
Philippines.
(d) Secretary refers to the Secretary of the
Department of Social Welfare and Development.
(e) Authorized and accredited agency refers to the
State welfare agency or a licensed adoption agency
in the country of the adopting parents which provide
comprehensive social services and which is duly
recognized by the Department.
(f) Legally-free child means a child who has been
voluntarily or involuntarily committed to the
Department, in accordance with the Child and
Youth Welfare Code.
mutually satisfying parent-child relationship.
(h) Board refers to the Inter-country Adoption
Board.
ARTICLE II
THE INTER-COUNTRY ADOPTION BOARD
Sec. 4. The Inter-Country Adoption Board. —
There is hereby created the Inter-Country Adoption
Board, hereinafter referred to as the Board to act as
the central authority in matters relating to inter-
country adoption. It shall act as the policy-making
body for purposes of carrying out the provisions of
this Act, in consultation and coordination with the
Department, the different child-care and placement
agencies, adoptive agencies, as well as non-
governmental organizations engaged in child-care
and placement activities. As such, it shall:
537
____________________________________________________________________________________________________
(a) Protect the Filipino child from abuse,
exploitation, trafficking and/or sale or any other
practice in connection with adoption which is
harmful, detrimental, or prejudicial to the child;
(b) Collect, maintain, and preserve confidential
information about the child and the adoptive
parents;
(c) Monitor, follow up, and facilitate completion of
adoption of the child through authorized and
accredited agency;
(d) Prevent improper financial or other gain in
connection with an adoption and deter improper
practices contrary to this Act;
(e) Promote the development of adoption services
including post-legal adoption;
(f) License and accredit child-caring/placement
agencies and collaborate with them in the
placement of Filipino children;
(g) Accredit and authorize foreign adoption
agency in the placement of Filipino children in
their own country; and
(h) Cancel the license to operate and blacklist the
child-caring and placement agency or adoptive
agency involved from the accreditation list of the
Board upon a finding of violation of any provision
under this Act.
Sec. 5. Composition of the Board. —
Sec. 6. Powers and Functions of the Board. —
ARTICLE III
PROCEDURE
Sec. 7. Inter-Country Adoption as the Last
Resort. — The Board shall ensure that all
possibilities for adoption of the child under the
Family Code have been exhausted and that inter-
country adoption is in the best interest of the
child. Towards this end, the Board shall set up the
guidelines to ensure that steps will be taken to
place the child in the Philippines before the child is
placed for inter-country adoption: Provided,
however, That the maximum number that may be
allowed for foreign adoption shall not exceed six
hundred (600) a year for the first five (5) years.
Sec. 8. Who May be Adopted. — Only a legally
free child may be the subject of inter-country
adoption. In order that such child may be
considered for placement, the following documents
must be submitted to the Board:
(a)Child study;
(b)Birth certificate/foundling certificate;
(c)Deed of voluntary commitment/decree of
abandonment/death certificate of parents;
(d)Medical evaluation /history;
(e)Psychological evaluation, as necessary; and
(f)Recent photo of the child.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Sec. 9. Who May Adopt. — An alien or a Filipino
citizen permanently residing abroad may file an
application for inter-country adoption of a Filipino
child if he/she:
(a) is at least twenty-seven (27) years of age and
at least sixteen (16) years older than the child to
be adopted, at the time of application unless the
adopter is the parent by nature of the child to be
adopted or the spouse of such parent:
(b) if married, his/her spouse must jointly file for
the adoption;
(c) has the capacity to act and assume all rights
and responsibilities of parental authority under his
national laws, and has undergone the appropriate
counseling from an accredited counselor in
his/her country;
(d) has not been convicted of a crime involving
moral turpitude;
(e) is eligible to adopt under his/her national law;
(f) is in a position to provide the proper care and
support and to give the necessary moral values
and example to all his children, including the child
to be adopted;
(g) agrees to uphold the basic rights of the child
as embodied under Philippine laws, the U.N.
Convention on the Rights of the Child, and to
abide by the rules and regulations issued to
implement the provisions of this Act;
(h) comes from a country with whom the
Philippines has diplomatic relations and whose
government maintains a similarly authorized and
accredited agency and that adoption is allowed
under his/her national laws; and
(i) possesses all the qualifications and none of the
disqualifications provided herein and in other
applicable Philippine laws.
Sec. 10. Where to File Application. — An
application to adopt a Filipino child shall be filed
either with the Philippine Regional Trial Court
having jurisdiction over the child, or with the Board,
through an intermediate agency, whether
governmental or an authorized and accredited
agency, in the country of the prospective adoptive
parents, which application shall be in accordance
with the requirements as set forth in the
implementing rules and regulations to be
promulgated by the Board.
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The application shall be supported by the following
documents written and officially translated in
English.
(a) Birth certificate of applicant(s);
(b) Marriage contract, if married, and divorce
decree, if applicable;
(c) Written consent of their biological or adoptive
children above ten (10) years of age, in the form
of sworn statement;
(d) Physical, medical and psychological
evaluation by a duly licensed physician and
psychologist;
(e) Income tax returns or any document showing
the financial capability of the applicant(s);
(f) Police clearance of applicant(s);
(g) Character reference from the local
church/minister, the applicant's employer and a
member of the immediate community who have
known the applicant(s) for at least five (5) years;
and
(h) Recent postcard-size pictures of the
applicant(s) and his immediate family;
The Rules of Court shall apply in case of adoption
by judicial proceedings.
Sec. 11. Family Selection/Matching. — No child
shall be matched to a foreign adoptive family unless
it is satisfactorily shown that the child cannot be
adopted locally. The clearance, as issued by the
Board, with the copy of the minutes of the meetings,
shall form part of the records of the child to be
adopted. When the Board is ready to transmit the
Placement Authority to the authorized and
accredited inter-country adoption agency and all the
travel documents of the child are ready, the
adoptive parents, or any one of them, shall
personally fetch the child in the Philippines.chan
robles virtual law library
Sec. 12. Pre-adoptive Placement Costs. — The
applicant(s) shall bear the following costs incidental
to the placement of the child;
(a) The cost of bringing the child from the
Philippines to the residence of the applicant(s)
abroad, including all travel expenses within the
Philippines and abroad; and
(b) The cost of passport, visa, medical
examination and psychological evaluation
required, and other related expenses.
Sec. 13. Fees, Charges and Assessments. —
Fees, charges, and assessments collected by the
Board in the exercise of its functions shall be used
solely to process applications for inter-country
adoption and to support the activities of the Board.
Sec. 14. Supervision of Trial Custody. — The
governmental agency or the authorized and
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
accredited agency in the country of the adoptive
parents which filed the application for inter-country
adoption shall be responsible for the trial custody
and the care of the child. It shall also provide family
counseling and other related services. The trial
custody shall be for a period of six (6) months from
the time of placement. Only after the lapse of the
period of trial custody shall a decree of adoption be
issued in the said country a copy of which shall be
sent to the Board to form part of the records of the
child.
During the trial custody, the adopting parent(s) shall
submit to the governmental agency or the
authorized and accredited agency, which shall in
turn transmit a copy to the Board, a progress report
of the child's adjustment. The progress report shall
be taken into consideration in deciding whether or
not to issue the decree of adoption.
The Department of Foreign Affairs shall set up a
system by which Filipino children sent abroad for
trial custody are monitored and checked as
reported by the authorized and accredited inter-
country adoption agency as well as the repatriation
to the Philippines of a Filipino child whose adoption
has not been approved.
Sec. 15. Executive Agreements. — The
Department of Foreign Affairs, upon representation
of the Board, shall cause the preparation of
Executive Agreements with countries of the foreign
adoption agencies to ensure the legitimate
concurrence of said countries in upholding the
safeguards provided by this Act.
ARTICLE IV
PENALTIES
Sec. 16. Penalties. — (a) Any person who shall
knowingly participate in the conduct or carrying out
of an illegal adoption, in violation of the provisions
of this Act, shall be punished with a penalty of
imprisonment ranging from six (6) years and one (1)
day to twelve (12) years and/or a fine of not less
than Fifty thousand pesos (P50,000), but not more
than Two hundred thousand pesos (P200.000), at
the discretion of the court. For purposes of this Act,
an adoption is illegal if it is effected in any manner
contrary to the provisions of this Act or established
State policies, its implementing rules and
regulations, executive agreements, and other laws
pertaining to adoption. Illegality may be presumed
from the following acts:
(1)consent for an adoption was acquired through,
or attended by coercion, fraud, improper material
inducement;
(2)there is no authority from the Board to effect
adoption;
539
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(3)the procedures and safeguards placed under
the law for adoption were not complied with; and
(4)the child to be adopted is subjected to, or
exposed to danger, abuse and exploitation.
(b)Any person who shall violate established
regulations relating to the confidentiality and
integrity of records, documents and
communications of adoption applications, cases
and processes shall suffer the penalty of
imprisonment ranging from one (1) year and one (1)
day to two (2) years, and/or a fine of not less than
Five thousand pesos (P5,000), but not more than
Ten thousand pesos (P10,000), at the discretion of
the court.
A penalty lower by two (2) degrees than that
prescribed for the consummated felony under this
Article shall be imposed upon the principals of the
attempt to commit any of the acts herein
enumerated.
Acts punishable under this Article, when committed
by a syndicate or where it involves two or more
children shall be considered as an offense
constituting child trafficking and shall merit the
penalty of reclusion perpetua.
Acts punishable under this Article are deemed
committed by a syndicate if carried out by a group
of three (3) or more persons conspiring and/or
confederating with one another in carrying out any
of the unlawful acts defined under this
Article.Penalties as are herein provided shall be in
addition to any other penalties which may be
imposed for the same acts punishable under other
laws, ordinances, executive orders, and
proclamations.
Sec. 17. Public Officers as Offenders. — Any
government official, employee or functionary who
shall be found guilty of violating any of the
provisions of this Act, or who shall conspire with
private individuals shall, in addition to the above-
prescribed penalties, be penalized in accordance
with existing civil service laws, rules and
regulations: Provided, That upon the filing of a
case, either administrative or criminal, said
government official, employee or functionary
concerned shall automatically suffer suspension
until the resolution of the case.
ARTICLE V
FINAL PROVISIONS
Sec. 18. Implementing Rules and Regulations. —
Sec. 19. Appropriations.
Sec. 20. Separability Clause. —
Sec. 21. Repealing Clause. —
Sec. 22. Effectivity Clause. —
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Approved: June 7, 1995
REPUBLIC ACT NO.
4726 June 18, 1966
AN ACT TO DEFINE CONDOMINIUM,
ESTABLISH REQUIREMENTS FOR ITS
CREATION, AND GOVERN ITS INCIDENTS.
Sec. 1. The short title of this Act shall be "The
Condominium Act".
Sec. 2. A condominium is an interest in real
property consisting of separate interest in a unit in a
residential, industrial or commercial building and an
undivided interest in common, directly or indirectly,
in the land on which it is located and in other
common areas of the building. A condominium may
include, in addition, a separate interest in other
portions of such real property. Title to the common
areas, including the land, or the appurtenant
interests in such areas, may be held by a
corporation specially formed for the purpose
(hereinafter known as the "condominium
corporation") in which the holders of separate
interest shall automatically be members or
shareholders, to the exclusion of others, in
proportion to the appurtenant interest of their
respective units in the common areas.
The real right in condominium may be ownership or
any other interest in real property recognized by
law, on property in the Civil Code and other
pertinent laws.
Sec. 3. As used in this Act, unless the context
otherwise requires:
(a) "Condominium" means a condominium as
defined in the next preceding section.
(b) "Unit" means a part of the condominium
project intended for any type of independent use
or ownership, including one or more rooms or
spaces located in one or more floors (or part or
parts of floors) in a building or buildings and such
accessories as may be appended thereto.
540
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(c) "Project" means the entire parcel of real
property divided or to be divided in
condominiums, including all structures thereon,
(d) "Common areas" means the entire project
excepting all units separately granted or held or
reserved.
(e) "To divide" real property means to divide the
ownership thereof or other interest therein by
conveying one or more condominiums therein but
less than the whole thereof.
Sec. 4. The provisions of this Act shall apply to
property divided or to be divided into condominiums
only if there shall be recorded in the Register of
Deeds of the province or city in which the property
lies and duly annotated in the corresponding
certificate of title of the land, if the latter had been
patented or registered under either the Land
Registration or Cadastral Acts, an enabling or
master deed which shall contain, among others, the
following:
(a) Description of the land on which the building
or buildings and improvements are or are to be
located;
(b) Description of the building or buildings, stating
the number of stories and basements, the number
of units and their accessories, if any;
(c) Description of the common areas and
facilities;
(d) A statement of the exact nature of the interest
acquired or to be acquired by the purchaser in the
separate units and in the common areas of the
condominium project. Where title to or the
appurtenant interests in the common areas is or
is to be held by a condominium corporation, a
statement to this effect shall be included;
(e) Statement of the purposes for which the
building or buildings and each of the units are
intended or restricted as to use;
(f) A certificate of the registered owner of the
property, if he is other than those executing the
master deed, as well as of all registered holders
of any lien or encumbrance on the property, that
they consent to the registration of the deed;
(g) The following plans shall be appended to the
deed as integral parts thereof:
(1) A survey plan of the land included in the
project, unless a survey plan of the same
property had previously bee filed in said office;
(2) A diagrammatic floor plan of the building or
buildings in the project, in sufficient detail to
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
identify each unit, its relative location and
approximate dimensions;
(h) Any reasonable restriction not contrary to law,
morals or public policy regarding the right of any
condominium owner to alienate or dispose of his
condominium.
The enabling or master deed may be amended or
revoked upon registration of an instrument
executed by the registered owner or owners of the
property and consented to by all registered holders
of any lien or encumbrance on the land or building
or portion thereof. The term "registered owner" shall
include the registered owners of condominiums in
the project. Until registration of a revocation, the
provisions of this Act shall continue to apply to such
property.
Sec. 5. Any transfer or conveyance of a unit or an
apartment, office or store or other space therein,
shall include the transfer or conveyance of the
undivided interests in the common areas or, in a
proper case, the membership or shareholdings in
the condominium corporation: Provided, however,
That where the common areas in the condominium
project are owned by the owners of separate units
as co-owners thereof, no condominium unit therein
shall be conveyed or transferred to persons other
than Filipino citizens, or corporations at least sixty
percent of the capital stock of which belong to
Filipino citizens, except in cases of hereditary
succession. Where the common areas in a
condominium project are held by a corporation, no
transfer or conveyance of a unit shall be valid if the
concomitant transfer of the appurtenant
membership or stockholding in the corporation will
cause the alien interest in such corporation to
exceed the limits imposed by existing laws.
Sec. 6. Unless otherwise expressly provided in the
enabling or master deed or the declaration of
restrictions, the incidents of a condominium grant
are as follows:
(a) The boundary of the unit granted are the
interior surfaces of the perimeter walls, floors,
ceilings, windows and doors thereof. The
following are not part of the unit bearing walls,
columns, floors, roofs, foundations and other
common structural elements of the building;
lobbies, stairways, hallways, and other areas of
common use, elevator equipment and shafts,
central heating, central refrigeration and central
air-conditioning equipment, reservoirs, tanks,
pumps and other central services and facilities,
pipes, ducts, flues, chutes, conduits, wires and
other utility installations, wherever located, except
the outlets thereof when located within the unit.
541
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(b) There shall pass with the unit, as an
appurtenance thereof, an exclusive easement for
the use of the air space encompassed by the
boundaries of the unit as it exists at any particular
time and as the unit may lawfully be altered or
reconstructed from time to time. Such easement
shall be automatically terminated in any air space
upon destruction of the unit as to render it
untenantable.
(c) Unless otherwise, provided, the common
areas are held in common by the holders of units,
in equal shares, one for each unit.
(d) A non-exclusive easement for ingress, egress
and support through the common areas is
appurtenant to each unit and the common areas
are subject to such easements.
(e) Each condominium owner shall have the
exclusive right to paint, repaint, tile, wax, paper or
otherwise refinish and decorate the inner surfaces
of the walls, ceilings, floors, windows and doors
bounding his own unit.
(f) Each condominium owner shall have the
exclusive right to mortgage, pledge or encumber
his condominium and to have the same appraised
independently of the other condominiums but any
obligation incurred by such condominium owner is
personal to him.
(g) Each condominium owner has also the
absolute right to sell or dispose of his
condominium unless the master deed contains a
requirement that the property be first offered to
the condominium owners within a reasonable
period of time before the same is offered to
outside parties;
Sec. 7. Except as provided in the following section,
the common areas shall remain undivided, and
there shall be no judicial partition thereof.
Sec. 8. Where several persons own condominiums
in a condominium project, an action may be brought
by one or more such persons for partition thereof by
sale of the entire project, as if the owners of all of
the condominiums in such project were co-owners
of the entire project in the same proportion as their
interests in the common areas: Provided, however,
That a partition shall be made only upon a showing:
(a) That three years after damage or destruction
to the project which renders material part thereof
unit for its use prior thereto, the project has not
been rebuilt or repaired substantially to its state
prior to its damage or destruction, or
(b) That damage or destruction to the project has
rendered one-half or more of the units therein
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
untenantable and that condominium owners
holding in aggregate more than thirty percent
interest in the common areas are opposed to
repair or restoration of the project; or
(c) That the project has been in existence in
excess of fifty years, that it is obsolete and
uneconomic, and that condominium owners
holding in aggregate more than fifty percent
interest in the common areas are opposed to
repair or restoration or remodeling or modernizing
of the project; or
(d) That the project or a material part thereof has
been condemned or expropriated and that the
project is no longer viable, or that the
condominium owners holding in aggregate more
than seventy percent interest in the common
areas are opposed to continuation of the
condominium regime after expropriation or
condemnation of a material portion thereof; or
(e) That the conditions for such partition by sale
set forth in the declaration of restrictions, duly
registered in accordance with the terms of this
Act, have been met.
Condominium Act; Partition of a Condominium
(2009) No.XVIII. The Ifugao Arms is a condominium
project in Baguio City. A strong earthquake
occurred which left huge cracks in the outer walls of
the building. As a result, a number of condominium
units were rendered unfit for use. May Edwin,
owner of one of the condominium units affected,
legally sue for partition by sale of the whole project?
Explain. (4%) SUGGESTED ANSWER: Yes,
Edwin may legally sue for partition by sale of
the whole condominium project under the
following conditions: (a) the damage or
destruction caused by the earthquake has
rendered one-half (1/2) or more of the units
therein untenantable, and (b) that the
condominium owners holding an aggregate of
more than thirty percent (30%) interests of the
common areas are opposed to the restoration of
the condominium project (Sec 8 [b], Republic
Act No. 472 “Condominium Act”).
Sec. 9. The owner of a project shall, prior to the
conveyance of any condominium therein, register a
declaration of restrictions relating to such project,
which restrictions shall constitute a lien upon each
condominium in the project, and shall insure to and
bind all condominium owners in the project. Such
liens, unless otherwise provided, may be enforced
by any condominium owner in the project or by the
management body of such project. The Register of
Deeds shall enter and annotate the declaration of
restrictions upon the certificate of title covering the
land included within the project, if the land is
542
____________________________________________________________________________________________________
patented or registered under the Land Registration
or Cadastral Acts.
The declaration of restrictions shall provide for the
management of the project by anyone of the
following management bodies: a condominium
corporation, an association of the condominium
owners, a board of governors elected by
condominium owners, or a management agent
elected by the owners or by the board named in the
declaration. It shall also provide for voting majorities
quorums, notices, meeting date, and other rules
governing such body or bodies.
Such declaration of restrictions, among other
things, may also provide:
(a) As to any such management body;
(1) For the powers thereof, including power to
enforce the provisions of the declarations of
restrictions;
(2) For maintenance of insurance policies,
insuring condominium owners against loss by fire,
casualty, liability, workmen's compensation and
other insurable risks, and for bonding of the
members of any management body;
(3) Provisions for maintenance, utility, gardening
and other services benefiting the common areas,
for the employment of personnel necessary for
the operation of the building, and legal,
accounting and other professional and technical
services;
(4) For purchase of materials, supplies and the
like needed by the common areas;
(5) For payment of taxes and special
assessments which would be a lien upon the
entire project or common areas, and for discharge
of any lien or encumbrance levied against the
entire project or the common areas;
(6) For reconstruction of any portion or portions of
any damage to or destruction of the project;
(7) The manner for delegation of its powers;
(8) For entry by its officers and agents into any
unit when necessary in connection with the
maintenance or construction for which such body
is responsible;
(9) For a power of attorney to the management
body to sell the entire project for the benefit of all
of the owners thereof when partition of the project
may be authorized under Section 8 of this Act,
which said power shall be binding upon all of the
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
condominium owners regardless of whether they
assume the obligations of the restrictions or not.
(b) The manner and procedure for amending such
restrictions: Provided, That the vote of not less than
a majority in interest of the owners is obtained.
(c) For independent audit of the accounts of the
management body;
(d) For reasonable assessments to meet authorized
expenditures, each condominium unit to be
assessed separately for its share of such expenses
in proportion (unless otherwise provided) to its
owners fractional interest in any common areas;
(e) For the subordination of the liens securing such
assessments to other liens either generally or
specifically described;
(f) For conditions, other than those provided for in
Sections eight and thirteen of this Act, upon which
partition of the project and dissolution of the
condominium corporation may be made. Such right
to partition or dissolution may be conditioned upon
failure of the condominium owners to rebuild within
a certain period or upon specified inadequacy of
insurance proceeds, or upon specified percentage
of damage to the building, or upon a decision of an
arbitrator, or upon any other reasonable condition.
Sec. 10. Whenever the common areas in a
condominium project are held by a condominium
corporation, such corporation shall constitute the
management body of the project. The corporate
purposes of such a corporation shall be limited to
the holding of the common areas, either in
ownership or any other interest in real property
recognized by law, to the management of the
project, and to such other purposes as may be
necessary, incidental or convenient to the
accomplishment of said purposes. The articles of
incorporation or by-laws of the corporation shall not
contain any provision contrary to or inconsistent
with the provisions of this Act, the enabling or
master deed, or the declaration of restrictions of the
project. Membership in a condominium corporation,
regardless of whether it is a stock or non-stock
corporation, shall not be transferable separately
from the condominium unit of which it is an
appurtenance. When a member or stockholder
ceases to own a unit in the project in which the
condominium corporation owns or holds the
common areas, he shall automatically cease to be a
member or stockholder of the condominium
corporation.
Sec. 11. The term of a condominium corporation
shall be co-terminus with the duration of the
543
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condominium project, the provisions of the
Corporation Law to the contrary notwithstanding.
Sec. 12. In case of involuntary dissolution of a
condominium corporation for any of the causes
provided by law, the common areas owned or held
by the corporation shall, by way of liquidation, be
transferred pro-indiviso and in proportion to their
interest in the corporation to the members or
stockholders thereof, subject to the superior rights
of the corporation creditors. Such transfer or
conveyance shall be deemed to be a full liquidation
of the interest of such members or stockholders in
the corporation. After such transfer or conveyance,
the provisions of this Act governing undivided co-
ownership of, or undivided interest in, the common
areas in condominium projects shall fully apply.
Sec. 13. Until the enabling or the master deed of
the project in which the condominium corporation
owns or holds the common area is revoked, the
corporation shall not be voluntarily dissolved
through an action for dissolution under Rule 104 of
the Rules of Court except upon a showing:
(a) That three years after damage or destruction
to the project in which the corporation owns or
holds the common areas, which damage or
destruction renders a material part thereof unfit
for its use prior thereto, the project has not been
rebuilt or repaired substantially to its state prior to
its damage or destruction; or
(b) That damage or destruction to the project has
rendered one-half or more of the units therein
untenantable and that more than thirty percent of
the members of the corporation, if non-stock, or
the shareholders representing more than thirty
percent of the capital stock entitled to vote, if a
stock corporation, are opposed to the repair or
reconstruction of the project, or
(c) That the project has been in existence in
excess of fifty years, that it is obsolete and
uneconomical, and that more than fifty percent of
the members of the corporation, if non-stock, or
the stockholders representing more than fifty
percent of the capital stock entitled to vote, if a
stock corporation, are opposed to the repair or
restoration or remodeling or modernizing of the
project; or
(d) That the project or a material part thereof has
been condemned or expropriated and that the
project is no longer viable, or that the members
holding in aggregate more than seventy percent
interest in the corporation, if non-stock, or the
stockholders representing more than seventy
percent of the capital stock entitled to vote, if a
stock corporation, are opposed to the
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
continuation of the condominium regime after
expropriation or condemnation of a material
portion thereof; or
(e) That the conditions for such a dissolution set
forth in the declaration of restrictions of the
project in which the corporation owns of holds the
common areas, have been met.
Sec. 14. The condominium corporation may also be
dissolved by the affirmative vote of all the
stockholders or members thereof at a general or
special meeting duly called for the purpose:
Provided, That all the requirements of Section sixty-
two of the Corporation Law are complied with.
Sec. 15. Unless otherwise provided for in the
declaration of restrictions upon voluntary dissolution
of a condominium corporation in accordance with
the provisions of Sections thirteen and fourteen of
this Act, the corporation shall be deemed to hold a
power of attorney from all the members or
stockholders to sell and dispose of their separate
interests in the project and liquidation of the
corporation shall be effected by a sale of the entire
project as if the corporation owned the whole
thereof, subject to the rights of the corporate and of
individual condominium creditors.
Sec. 16. A condominium corporation shall not,
during its existence, sell, exchange, lease or
otherwise dispose of the common areas owned or
held by it in the condominium project unless
authorized by the affirmative vote of all the
stockholders or members.
Sec. 17. Any provision of the Corporation Law to
the contrary notwithstanding, the by-laws of a
condominium corporation shall provide that a
stockholder or member shall not be entitled to
demand payment of his shares or interest in those
cases where such right is granted under the
Corporation Law unless he consents to sell his
separate interest in the project to the corporation or
to any purchaser of the corporation's choice who
shall also buy from the corporation the dissenting
member or stockholder's interest. In case of
disagreement as to price, the procedure set forth in
the appropriate provision of the Corporation Law for
valuation of shares shall be followed. The
corporation shall have two years within which to pay
for the shares or furnish a purchaser of its choice
from the time of award. All expenses incurred in the
liquidation of the interest of the dissenting member
or stockholder shall be borne by him.
Sec. 18. Upon registration of an instrument
conveying a condominium, the Register of Deeds
shall, upon payment of the proper fees, enter and
annotate the conveyance on the certificate of title
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covering the land included within the project and the
transferee shall be entitled to the issuance of a
"condominium owner's" copy of the pertinent portion
of such certificate of title. Said "condominium
owner's" copy need not reproduce the ownership
status or series of transactions in force or annotated
with respect to other condominiums in the project. A
copy of the description of the land, a brief
description of the condominium conveyed, name
and personal circumstances of the condominium
owner would be sufficient for purposes of the
"condominium owner's" copy of the certificate of
title. No conveyance of condominiums or part
thereof, subsequent to the original conveyance
thereof from the owner of the project, shall be
registered unless accompanied by a certificate of
the management body of the project that such
conveyance is in accordance with the provisions of
the declaration of restrictions of such project.
In cases of condominium projects registered under
the provisions of the Spanish Mortgage Law or Act
3344, as amended, the registration of the deed of
conveyance of a condominium shall be sufficient if
the Register of Deeds shall keep the original or
signed copy thereof, together with the certificate of
the management body of the project, and return a
copy of the deed of conveyance to the
condominium owner duly acknowledge and
stamped by the Register of Deeds in the same
manner as in the case of registration of
conveyances of real property under said laws.
Sec. 19. Where the enabling or master deed
provides that the land included within a
condominium project are to be owned in common
by the condominium owners therein, the Register of
Deeds may, at the request of all the condominium
owners and upon surrender of all their
"condominium owner's" copies, cancel the
certificates of title of the property and issue a new
one in the name of said condominium owners as
pro-indiviso co-owners thereof.
Sec. 20. An assessment upon any condominium
made in accordance with a duly registered
declaration of restrictions shall be an obligation of
the owner thereof at the time the assessment is
made. The amount of any such assessment plus
any other charges thereon, such as interest, costs
(including attorney's fees) and penalties, as such
may be provided for in the declaration of
restrictions, shall be and become a lien upon the
condominium assessed when the management
body causes a notice of assessment to be
registered with the Register of Deeds of the city or
province where such condominium project is
located. The notice shall state the amount of such
assessment and such other charges thereon a may
be authorized by the declaration of restrictions, a
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
description of the condominium, unit against which
same has been assessed, and the name of the
registered owner thereof. Such notice shall be
signed by an authorized representative of the
management body or as otherwise provided in the
declaration of restrictions. Upon payment of said
assessment and charges or other satisfaction
thereof, the management body shall cause to be
registered a release of the lien.
Such lien shall be superior to all other liens
registered subsequent to the registration of said
notice of assessment except real property tax liens
and except that the declaration of restrictions may
provide for the subordination thereof to any other
liens and encumbrances.
Such liens may be enforced in the same manner
provided for by law for the judicial or extra-judicial
foreclosure of mortgages of real property. Unless
otherwise provided for in the declaration of
restrictions, the management body shall have
power to bid at foreclosure sale. The condominium
owner shall have the same right of redemption as in
cases of judicial or extra-judicial foreclosure of
mortgages.
Sec. 21. No labor performed or services or
materials furnished with the consent of or at the
request of a condominium owner or his agent or his
contractor or subcontractor, shall be the basis of a
lien against the condominium of any other
condominium owner, unless such other owners
have expressly consented to or requested the
performance of such labor or furnishing of such
materials or services. Such express consent shall
be deemed to have been given by the owner of any
condominium in the case of emergency repairs of
his condominium unit. Labor performed or services
or materials furnished for the common areas, if duly
authorized by the management body provided for in
a declaration of restrictions governing the property,
shall be deemed to be performed or furnished with
the express consent of each condominium owner.
The owner of any condominium may remove his
condominium from a lien against two or more
condominiums or any part thereof by payment to
the holder of the lien of the fraction of the total sum
secured by such lien which is attributable to his
condominium unit.
Sec. 22. Unless otherwise provided for by the
declaration of restrictions, the management body,
provided for herein, may acquire and hold, for the
benefit of the condominium owners, tangible and
intangible personal property and may dispose of the
same by sale or otherwise; and the beneficial
interest in such personal property shall be owned
by the condominium owners in the same proportion
as their respective interests in the common areas. A
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transfer of a condominium shall transfer to the
transferee ownership of the transferor's beneficial
interest in such personal property.
Sec. 23. Where, in an action for partition of a
condominium project or for the dissolution of
condominium corporation on the ground that the
project or a material part thereof has been
condemned or expropriated, the Court finds that the
conditions provided for in this Act or in the
declaration of restrictions have not been met, the
Court may decree a reorganization of the project,
declaring which portion or portions of the project
shall continue as a condominium project, the
owners thereof, and the respective rights of said
remaining owners and the just compensation, if
any, that a condominium owner may be entitled to
due to deprivation of his property. Upon receipt of a
copy of the decree, the Register of Deeds shall
enter and annotate the same on the pertinent
certificate of title.
Sec. 24. Any deed, declaration or plan for a
condominium project shall be liberally construed to
facilitate the operation of the project, and its
provisions shall be presumed to be independent
and severable.
Sec. 25. Whenever real property has been divided
into condominiums, each condominium separately
owned shall be separately assessed, for purposes
of real property taxation and other tax purposes to
the owners thereof and the tax on each such
condominium shall constitute a lien solely thereon.
Sec. 26. All Acts or parts of Acts in conflict or
inconsistent with this Act are hereby amended
insofar as condominium and its incidents are
concerned.
Sec. 27. This Act shall take effect upon its approval.
Approved: June 18, 1966
PRESIDENTIAL
DECREE No. 957
July 12, 1976
REGULATING THE SALE OF SUBDIVISION
LOTS AND CONDOMINIUMS, PROVIDING
PENALTIES FOR VIOLATIONS THEREOF
WHEREAS, it is the policy of the State to afford its
inhabitants the requirements of decent human
settlement and to provide them with ample
opportunities for improving their quality of life;
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
WHEREAS, numerous reports reveal that many
real estate subdivision owners, developers,
operators, and/or sellers have reneged on their
representations and obligations to provide and
maintain properly subdivision roads, drainage,
sewerage, water systems, lighting systems, and
other similar basic requirements, thus endangering
the health and safety of home and lot buyers;
WHEREAS, reports of alarming magnitude also
show cases of swindling and fraudulent
manipulations perpetrated by unscrupulous
subdivision and condominium sellers and operators,
such as failure to deliver titles to the buyers or titles
free from liens and encumbrances, and to pay real
estate taxes, and fraudulent sales of the same
subdivision lots to different innocent purchasers for
value;
WHEREAS, these acts not only undermine the land
and housing program of the government but also
defeat the objectives of the New Society,
particularly the promotion of peace and order and
the enhancement of the economic, social and moral
condition of the Filipino people;
WHEREAS, this state of affairs has rendered it
imperative that the real estate subdivision and
condominium businesses be closely supervised and
regulated, and that penalties be imposed on
fraudulent practices and manipulations committed
in connection therewith.
NOW, THEREFORE, I, FERDINAND E. MARCOS,
President of the Philippines, by virtue of the powers
vested in me by the Constitution, do hereby decree
and order:
Title I
TITLE AND DEFINITIONS
Section 1. Title. This Decree shall be known as
THE SUBDIVISION AND CONDOMINIUM
BUYERS' PROTECTIVE DECREE.
Section 2. Definition of Terms When used in this
Decree, the following terms shall, unless the
context otherwise indicates, have the following
respective meanings:
(a) Person. "Person" shall mean a natural or a
juridical person. A juridical person refers to a
business firm whether a corporation, partnership,
cooperative or associations or a single
proprietorship.
(b) Sale or sell. "Sale" or "sell" shall include
every disposition, or attempt to dispose, for a
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valuable consideration, of a subdivision lot,
including the building and other improvements
thereof, if any, in a subdivision project or a
condominium unit in a condominium project.
"Sale" and "sell" shall also include a contract to
sell, a contract of purchase and sale, an
exchange, an attempt to sell, an option of sale or
purchase, a solicitation of a sale, or an offer to
sell, directly or by an agent, or by a circular, letter,
advertisement or otherwise.
A privilege given to a member of a cooperative,
corporation, partnership, or any association
and/or the issuance of a certificate or receipt
evidencing or giving the right of participation in, or
right to, any land in consideration of payment of
the membership fee or dues, shall be deemed a
sale within the meaning of this definition.
(c) Buy and purchase. The "buy" and "purchase"
shall include any contract to buy, purchase, or
otherwise acquire for a valuable consideration a
subdivision lot, including the building and other
improvements, if any, in a subdivision project or a
condominium unit in a condominium project.
(d) Subdivision project. "Subdivision project"
shall mean a tract or a parcel of land registered
under Act No. 496 which is partitioned primarily
for residential purposes into individual lots with or
without improvements thereon, and offered to the
public for sale, in cash or in installment terms. It
shall include all residential, commercial, industrial
and recreational areas as well as open spaces
and other community and public areas in the
project.
(e) Subdivision lot. "Subdivision lot" shall mean
any of the lots, whether residential, commercial,
industrial, or recreational, in a subdivision project.
(f) Complex subdivision plan. "Complex
subdivision plan" shall mean a subdivision plan of
a registered land wherein a street, passageway or
open space is delineated on the plan.
(g) Condominium project. "Condominium
project" shall mean the entire parcel of real
property divided or to be divided primarily for
residential purposes into condominium units,
including all structures thereon.
(h) Condominium unit. "Condominium unit" shall
mean a part of the condominium project intended
for any type of independent use or ownership,
including one or more rooms or spaces located in
one or more floors (or part of parts of floors) in a
building or buildings and such accessories as
may be appended thereto.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
(i) Owner. "Owner" shall refer to the registered
owner of the land subject of a subdivision or a
condominium project.
(j) Developer. "Developer" shall mean the person
who develops or improves the subdivision project
or condominium project for and in behalf of the
owner thereof.
(k) Dealer. "Dealer" shall mean any person
directly engaged as principal in the business of
buying, selling or exchanging real estate whether
on a full-time or part-time basis.
(l) Broker. "Broker" shall mean any person who,
for commission or other compensation,
undertakes to sell or negotiate the sale of a real
estate belonging to another.
(m) Salesman. "Salesman" shall refer to the
person regularly employed by a broker to
perform, for and in his behalf, any or all functions
of a real estate broker.
(n) Authority. "Authority" shall mean the National
Housing Authority.
Title II
REGISTRATION AND LICENSE TO SELL
Section 3. National Housing Authority The
National Housing Authority shall have exclusive
jurisdiction to regulate the real estate trade and
business in accordance with the provisions of this
Decree.
Section 4. Registration of Projects The registered
owner of a parcel of land who wishes to convert the
same into a subdivision project shall submit his
subdivision plan to the Authority which shall act
upon and approve the same, upon a finding that the
plan complies with the Subdivision Standards' and
Regulations enforceable at the time the plan is
submitted. The same procedure shall be followed in
the case of a plan for a condominium project except
that, in addition, said Authority shall act upon and
approve the plan with respect to the building or
buildings included in the condominium project in
accordance with the National Building Code (R.A.
No. 6541).
The subdivision plan, as so approved, shall then be
submitted to the Director of Lands for approval in
accordance with the procedure prescribed in
Section 44 of the Land Registration Act (Act No.
496, as amended by R.A. No. 440): Provided, that it
case of complex subdivision plans, court approval
shall no longer be required. The condominium plan
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as likewise so approved, shall be submitted to the
Register of Deeds of the province or city in which
the property lies and the same shall be acted upon
subject to the conditions and in accordance with the
procedure prescribed in Section 4 of the
Condominium Act (R.A. No. 4726).
The owner or the real estate dealer interested in the
sale of lots or units, respectively, in such
subdivision project or condominium project shall
register the project with the Authority by filing
therewith a sworn registration statement containing
the following information:
(a) Name of the owner;
(b) The location of the owner's principal business
office, and if the owner is a non-resident Filipino,
the name and address of his agent or
representative in the Philippines is authorized to
receive notice;
(c) The names and addresses of all the directors
and officers of the business firm, if the owner be a
corporation, association, trust, or other entity, and
of all the partners, if it be a partnership;
(d) The general character of the business actually
transacted or to be transacted by the owner; and
(e) A statement of the capitalization of the owner,
including the authorized and outstanding amounts
of its capital stock and the proportion thereof
which is paid-up.
The following documents shall be attached to the
registration statement:
(a) A copy of the subdivision plan or condominium
plan as approved in accordance with the first and
second paragraphs of this section.
(b) A copy of any circular, prospectus, brochure,
advertisement, letter, or communication to be
used for the public offering of the subdivision lots
or condominium units;
(c) In case of a business firm, a balance sheet
showing the amount and general character of its
assets and liabilities and a copy of its articles of
incorporation or articles of partnership or
association, as the case may be, with all the
amendments thereof and existing by-laws or
instruments corresponding thereto.
(d) A title to the property which is free from all
liens and encumbrances: Provided, however, that
in case any subdivision lot or condominium unit is
mortgaged, it is sufficient if the instrument of
mortgage contains a stipulation that the
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
mortgagee shall release the mortgage on any
subdivision lot or condominium unit as soon as
the full purchase price for the same is paid by the
buyer.
The person filing the registration statement shall
pay the registration fees prescribed therefor by
the Authority.
Thereupon, the Authority shall immediately cause
to be published a notice of the filing of the
registration statement at the expense of the
applicant-owner or dealer, in two newspapers
general circulation, one published in English and
another in Pilipino, once a week for two
consecutive weeks, reciting that a registration
statement for the sale of subdivision lots or
condominium units has been filed in the National
Housing Authority; that the aforesaid registration
statement, as well as the papers attached thereto,
are open to inspection during business hours by
interested parties, under such regulations as the
Authority may impose; and that copies thereof
shall be furnished to any party upon payment of
the proper fees.
The subdivision project of the condominium project
shall be deemed registered upon completion of the
above publication requirement. The fact of such
registration shall be evidenced by a registration
certificate to be issued to the applicant-owner or
dealer.
Section 5. License to sell. Such owner or dealer
to whom has been issued a registration certificate
shall not, however, be authorized to sell any
subdivision lot or condominium unit in the registered
project unless he shall have first obtained a license
to sell the project within two weeks from the
registration of such project.
The Authority, upon proper application therefor,
shall issue to such owner or dealer of a registered
project a license to sell the project if, after an
examination of the registration statement filed by
said owner or dealer and all the pertinent
documents attached thereto, he is convinced that
the owner or dealer is of good repute, that his
business is financially stable, and that the proposed
sale of the subdivision lots or condominium units to
the public would not be fraudulent.
Section 6. Performance Bond. No license to sell
subdivision lots or condominium units shall be
issued by the Authority under Section 5 of this
Decree unless the owner or dealer shall have filed
an adequate performance bond approved by said
Authority to guarantee the construction and
maintenance of the roads, gutters, drainage,
sewerage, water system, lighting systems, and full
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development of the subdivision project or the
condominium project and the compliance by the
owner or dealer with the applicable laws and rules
and regulations.
The performance bond shall be executed in favor of
the Republic of the Philippines and shall authorize
the Authority to use the proceeds thereof for the
purposes of its undertaking in case of forfeiture as
provided in this Decree.
Section 7. Exempt transactions. A license to sell
and performance bond shall not be required in any
of the following transactions:
(a) Sale of a subdivision lot resulting from the
partition of land among co-owners and co-heirs.
(b) Sale or transfer of a subdivision lot by the
original purchaser thereof and any subsequent
sale of the same lot.
(c) Sale of a subdivision lot or a condominium unit
by or for the account of a mortgagee in the
ordinary course of business when necessary to
liquidate a bona fide debt.
Section 8. Suspension of license to sell. Upon
verified complaint by a buyer of a subdivision lot or
a condominium unit in any interested party, the
Authority may, in its discretion, immediately
suspend the owner's or dealer's license to sell
pending investigation and hearing of the case as
provided in Section 13 hereof.
The Authority may motu proprio suspend the
license to sell if, in its opinion, any information in the
registration statement filed by the owner or dealer is
or has become misleading, incorrect, inadequate or
incomplete or the sale or offering for a sale of the
subdivision or condominium project may work or
tend to work a fraud upon prospective buyers.
The suspension order may be lifted if, after notice
and hearing, the Authority is convinced that the
registration statement is accurate or that any
deficiency therein has been corrected or
supplemented or that the sale to the public of the
subdivision or condominium project will neither be
fraudulent not result in fraud. It shall also be lifted
upon dismissal of the complaint for lack of legal
basis.
Until the final entry of an order of suspension, the
suspension of the right to sell the project, though
binding upon all persons notified thereof, shall be
deemed confidential unless it shall appear that the
order of suspension has in the meantime been
violated.
Section 9. Revocation of registration certificate
and license to sell. The Authority may, motu
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
proprio or upon verified complaint filed by a buyer of
a subdivision lot or condominium unit, revoke the
registration of any subdivision project or
condominium project and the license to sell any
subdivision lot or condominium unit in said project
by issuing an order to this effect, with his findings in
respect thereto, if upon examination into the affairs
of the owner or dealer during a hearing as provided
for in Section 14 hereof, if shall appear there is
satisfactory evidence that the said owner or dealer:
(a) Is insolvent; or
(b) has violated any of the provisions of this
Decree or any applicable rule or regulation of the
Authority, or any undertaking of his/its
performance bond; or
(c) Has been or is engaged or is about to engage
in fraudulent transactions; or
(d) Has made any misrepresentation in any
prospectus, brochure, circular or other literature
about the subdivision project or condominium
project that has been distributed to prospective
buyers; or
(e) Is of bad business repute; or
(f) Does not conduct his business in accordance
with law or sound business principles.
Where the owner or dealer is a partnership or
corporation or an unincorporated association, it
shall be sufficient cause for cancellation of its
registration certificate and its license to sell, if any
member of such partnership or any officer or
director of such corporation or association has been
guilty of any act or omission which would be cause
for refusing or revoking the registration of an
individual dealer, broker or salesman as provided in
Section 11 hereof.
Section 10. Registers of subdivision lots and
condominium units.
Title III
DEALERS, BROKERS AND SALESMEN
Section 11. Registration of dealers, brokers and
salesmen. No real estate dealer, broker or
salesman shall engage in the business of selling
subdivision lots or condominium units unless he has
registered himself with the Authority in accordance
with the provisions of this section.
If the Authority shall find that the applicant is of
good repute and has complied with the applicable
rules of the Authority, including the payment of the
prescribed fee, he shall register such applicant as a
dealer, broker or salesman upon filing a bond, or
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other security in lieu thereof, in such sum as may
be fixed by the Authority conditioned upon his
faithful compliance with the provisions of this
Decree: Provided, that the registration of a
salesman shall cease upon the termination of his
employment with a dealer or broker.
Every registration under this section shall expire on
the thirty-first day of December of each year.
Renewal of registration for the succeeding year
shall be granted upon written application therefor
made not less than thirty nor more than sixty days
before the first day of the ensuing year and upon
payment of the prescribed fee, without the
necessity of filing further statements or information,
unless specifically required by the Authority. All
applications filed beyond said period shall be
treated as original applications.
The names and addresses of all persons registered
as dealers, brokers, or salesmen shall be recorded
in a Register of Brokers, Dealers and Salesmen
kept in the Authority which shall be open to public
inspection.
Section 12. Revocation of registration as
dealers, brokers or salesmen. Registration under
the preceding section may be refused or any
registration granted thereunder, revoked by the
Authority if, after reasonable notice and hearing, it
shall determine that such applicant or registrant:
1. Has violated any provision of this Decree or
any rule or regulation made hereunder; or
2. Has made a material false statement in his
application for registration; or
3. Has been guilty of a fraudulent act in
connection with any sale of a subdivision lot or
condominium unit; or
4. Has demonstrated his unworthiness to transact
the business of dealer, broker, or salesman, as
the case may be.
In case of charges against a salesman, notice
thereof shall also be given the broker or dealer
employing such salesman.
Pending hearing of the case, the Authority shall
have the power to order the suspension of the
dealer's, broker's, of salesman's registration;
provided, that such order shall state the cause for
the suspension.
The suspension or revocation of the registration of
a dealer or broker shall carry with it all the
suspension or revocation of the registrations of all
his salesmen.
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
Title IV
PROCEDURE FOR REVOCATION OF
REGISTRATION CERTIFICATE
Section 13. Hearing. In the hearing for determining
the existence of any ground or grounds for the
suspension and/or revocation of registration
certificate and license to sell as provided in Section
8 and 9 hereof, the following shall be complied with:
(a) Notice. No such hearing shall proceed unless
the respondent is furnished with a copy of the
complaint against him or is notified in writing of
the purpose of such hearing.
(b) Venue. The hearing may be held before the
officer or officers designated by the Authority on
the date and place specified in the notice.
(c) Nature of proceeding. The proceedings shall
be non-litigious and summary in nature without
regard to legal technicalities obtaining in courts of
law. The Rules of court shall not apply in said
hearing except by analogy or in a suppletory
character and whenever practicable and
convenient.
(d) Power incidental to the hearing. For the
purpose of the hearing or other proceeding under
this Decree, the officer or officers designated to
hear the complaint shall have the power to
administer oaths, subpoena witnesses, conduct
ocular inspections, take depositions, and require
the production of any book, paper,
correspondence, memorandum, or other record
which are deemed relevant or material to the
inquiry.
Section 14. Contempt.
(a) Direct contempt. The officer or officers
designated by the Authority to hear the complaint
may summarily adjudge in direct contempt any
person guilty of misbehavior in the presence of or
so near the said hearing officials as to obstruct or
interrupt the proceedings before the same or of
refusal to be sworn or to answer as a witness or to
subscribe an affidavit or deposition when lawfully
required to do so. The person found guilty of direct
contempt under this section shall be punished by a
fine not exceeding Fifty (P50.00) Pesos or
imprisonment not exceeding five (5) days, or both.
(b) Indirect contempt. The officer or officers
designated to hear the complaint may also adjudge
any person in indirect contempt on grounds and in
the manner prescribed in Rule 71 of the Revised
Rules of Court.
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Section 15. Decision. The case shall be decided
within thirty (30) days from the time the same is
submitted for decision. The Decision may order the
revocation of the registration of the subdivision or
condominium project, the suspension, cancellation,
or revocation of the license to sell and/or forfeiture,
in whole or in part, of the performance bond
mentioned in Section 6 hereof. In case forfeiture of
the bond is ordered, the Decision may direct the
provincial or city engineer to undertake or cause the
construction of roads and of other requirements for
the subdivision or condominium as stipulated in the
bond, chargeable to the amount forfeited. Such
decision shall be immediately executory and shall
become final after the lapse of 15 days from the
date of receipt of the Decision.
Section 16. Cease and Desist Order. Whenever it
shall appear to the Authority that any person is
engaged or about to engage in any act or practice
which constitutes or will constitute a violation of the
provisions of this Decree, or of any rule or
regulation thereunder, it may, upon due notice and
hearing as provided in Section 13 hereof, issue a
cease and desist order to enjoin such act or
practices.
Section 17. Registration. All contracts to sell,
deeds of sale and other similar instruments relative
to the sale or conveyance of the subdivision lots
and condominium units, whether or not the
purchase price is paid in full, shall be registered by
the seller in the Office of the Register of Deeds of
the province or city where the property is situated.
Whenever a subdivision plan duly approved in
accordance with Section 4 hereof, together with the
corresponding owner's duplicate certificate of title,
is presented to the Register of Deeds for
registration, the Register of Deeds shall register the
same in accordance with the provisions of the Land
Registration Act, as amended: Provided, however,
that it there is a street, passageway or required
open space delineated on a complex subdivision
plan hereafter approved and as defined in this
Decree, the Register of Deeds shall annotate on the
new certificate of title covering the street,
passageway or open space, a memorandum to the
effect that except by way of donation in favor of a
city or municipality, no portion of any street,
passageway, or open space so delineated on the
plan shall be closed or otherwise disposed of by the
registered owner without the requisite approval as
provided under Section 22 of this Decree.
Section 18. Mortgages. No mortgage on any unit
or lot shall be made by the owner or developer
without prior written approval of the Authority. Such
approval shall not be granted unless it is shown that
the proceeds of the mortgage loan shall be used for
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
the development of the condominium or subdivision
project and effective measures have been provided
to ensure such utilization. The loan value of each lot
or unit covered by the mortgage shall be
determined and the buyer thereof, if
any, shall be notified before the release of the loan.
The buyer may, at his option, pay his installment for
the lot or unit directly to the mortgagee who shall
apply the payments to the corresponding mortgage
indebtedness secured by the particular lot or unit
being paid for, with a view to enabling said buyer to
obtain title over the lot or unit promptly after full
payment thereto;
Section 19. Advertisements. Advertisements that
may be made by the owner or developer through
newspaper, radio, television, leaflets, circulars or
any other form about the subdivision or the
condominium or its operations or activities must
reflect the real facts and must be presented in such
manner that will not tend to mislead or deceive the
public.
The owner or developer shall answerable and liable
for the facilities, improvements, infrastructures or
other forms of development represented or
promised in brochures, advertisements and other
sales propaganda disseminated by the owner or
developer or his agents and the same shall form
part of the sales warranties enforceable against
said owner or developer, jointly and severally.
Failure to comply with these warranties shall also
be punishable in accordance with the penalties
provided for in this Decree.
Section 20. Time of Completion. Every owner or
developer shall construct and provide the facilities,
improvements, infrastructures and other forms of
development, including water supply and lighting
facilities, which are offered and indicated in the
approved subdivision or condominium plans,
brochures, prospectus, printed matters, letters or in
any form of advertisement, within one year from the
date of the issuance of the license for the
subdivision or condominium project or such other
period of time as may be fixed by the Authority.
Section 21. Sales Prior to Decree. In cases of
subdivision lots or condominium units sold or
disposed of prior to the effectivity of this Decree, it
shall be incumbent upon the owner or developer of
the subdivision or condominium project to complete
compliance with his or its obligations as provided in
the preceding section within two years from the
date of this Decree unless otherwise extended by
the Authority or unless an adequate performance
bond is filed in accordance with Section 6 hereof.
Failure of the owner or developer to comply with the
obligations under this and the preceding provisions
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shall constitute a violation punishable under
Sections 38 and 39 of this Decree.
Section 22. Alteration of Plans. No owner or
developer shall change or alter the roads, open
spaces, infrastructures, facilities for public use
and/or other form of subdivision development as
contained in the approved subdivision plan and/or
represented in its advertisements, without the
permission of the Authority and the written
conformity or consent of the duly organized
homeowners association, or in the absence of the
latter, by the majority of the lot buyers in the
subdivision.
Section 23. Non-Forfeiture of Payments. No
installment payment made by a buyer in a
subdivision or condominium project for the lot or
unit he contracted to buy shall be forfeited in favor
of the owner or developer when the buyer, after due
notice to the owner or developer, desists from
further payment due to the failure of the owner or
developer to develop the subdivision or
condominium project according to the approved
plans and within the time limit for complying with the
same. Such buyer may, at his option, be
reimbursed the total amount paid including
amortization interests but excluding delinquency
interests, with interest thereon at the legal rate.
Section 24. Failure to pay installments. The
rights of the buyer in the event of this failure to pay
the installments due for reasons other than the
failure of the owner or developer to develop the
project shall be governed by Republic Act No. 6552.
Where the transaction or contract was entered into
prior to the effectivity of Republic Act No. 6552 on
August 26, 1972, the defaulting buyer shall be
entitled to the corresponding refund based on the
installments paid after the effectivity of the law in
the absence of any provision in the contract to the
contrary.
Section 25. Issuance of Title. The owner or
developer shall deliver the title of the lot or unit to
the buyer upon full payment of the lot or unit. No
fee, except those required for the registration of the
deed of sale in the Registry of Deeds, shall be
collected for the issuance of such title. In the event
a mortgage over the lot or unit is outstanding at the
time of the issuance of the title to the buyer, the
owner or developer shall redeem the mortgage or
the corresponding portion thereof within six months
from such issuance in order that the title over any
fully paid lot or unit may be secured and delivered
to the buyer in accordance herewith.
Section 26. Realty Tax. Real estate tax and
assessment on a lot or unit shall de paid by the
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
owner or developer without recourse to the buyer
for as long as the title has not passed the buyer;
Provided, however, that if the buyer has actually
taken possession of and occupied the lot or unit, he
shall be liable to the owner or developer for such
tax and assessment effective the year following
such taking of possession and occupancy.
Section 27. Other Charges. No owner or
developer shall levy upon any lot or buyer a fee for
an alleged community benefit. Fees to finance
services for common comfort, security and
sanitation may be collected only by a properly
organized homeowners association and only with
the consent of a majority of the lot or unit buyers
actually residing in the subdivision or condominium
project.
Section 28. Access to Public Offices in the
Subdivisions. No owner or developer shall deny
any person free access to any government office or
public establishment located within the subdivision
or which may be reached only by passing through
the subdivision.
Section 29. Right of Way to Public Road. The
owner or developer of a subdivision without access
to any existing public road or street must secure a
right of way to a public road or street and such right
of way must be developed and maintained
according to the requirement of the government and
authorities concerned.
Section 30. Organization of Homeowners
Association. The owner or developer of a
subdivision project or condominium project shall
initiate the organization of a homeowners
association among the buyers and residents of the
projects for the purpose of promoting and protecting
their mutual interest and assist in their community
development.
Section 31. Donations of roads and open
spaces to local government. The registered
owner or developer of the subdivision or
condominium project, upon completion of the
development of said project may, at his option,
convey by way of donation the roads and open
spaces found within the project to the city or
municipality wherein the project is located. Upon
acceptance of the donation by the city or
municipality concerned, no portion of the area
donated shall thereafter be converted to any other
purpose or purposes unless after hearing, the
proposed conversion is approved by the Authority.
Section 32. Phases of Subdivision. For purposes
of complying with the provisions of this Decree, the
owner or developer may divide the development
and sale of the subdivision into phases, each phase
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to cover not less than ten hectares. The
requirement imposed by this Decree on the
subdivision as a whole shall be deemed imposed
on each phase.
Section 33. Nullity of waivers. Any condition,
stipulation, or provision in contract of sale whereby
any person waives compliance with any provision of
this Decree or of any rule or regulation issued
thereunder shall be void.
Section 34. Visitorial powers. This Authority,
through its duly authorized representative may, at
any time, make an examination into the business
affairs, administration, and condition of any person,
corporation, partnership, cooperative, or association
engaged in the business of selling subdivision lots
and condominium units. For this purpose, the
official authorized so to do shall have the authority
to examine under oath the directors, officers,
stockholders or members of any corporation,
partnership, association, cooperative or other
persons associated or connected with the business
and to issue subpoena or subpoena duces tecum in
relation to any investigation that may arise
therefrom.
The Authority may also authorize the Provincial,
City or Municipal Engineer, as the case may be, to
conduct an ocular inspection of the project to
determine whether the development of said project
conforms to the standards and specifications
prescribed by the government.
The books, papers, letters, and other documents
belonging to the person or entities herein
mentioned shall be open to inspection by the
Authority or its duly authorized representative.
Section 35. Take-over Development. The
Authority, may take over or cause the development
and completion of the subdivision or condominium
project at the expenses of the owner or developer,
jointly and severally, in cases where the owner or
developer has refused or failed to develop or
complete the development of the project as
provided for in this Decree.
The Authority may, after such take-over, demand,
collect and receive from the buyers the installment
payments due on the lots, which shall be utilized for
the development of the subdivision.
Section 36. Rules and Regulations.
Section 37. Deputization of law enforcement
agencies.
Section 38. Administrative Fines. The Authority
may prescribe and impose fines not exceeding ten
thousand pesos for violations of the provisions of
JANNYCER M. AUZA * GENESIS M. AUZA – Civil Law Reviewer
this Decree or of any rule or regulation thereunder.
Fines shall be payable to the Authority and
enforceable through writs of execution in
accordance with the provisions of the Rules of
Court.
Section 39. Penalties. Any person who shall
violate any of the provisions of this Decree and/or
any rule or regulation that may be issued pursuant
to this Decree shall, upon conviction, be punished
by a fine of not more than twenty thousand
(P20,000.00) pesos and/or imprisonment of not
more than ten years: Provided, That in the case of
corporations, partnership, cooperatives, or
associations, the President, Manager or
Administrator or the person who has charge of the
administration of the business shall be criminally
responsible for any violation of this Decree and/or
the rules and regulations promulgated pursuant
thereto.
Section 40. Liability of controlling persons.
Every person who directly or indirectly controls any
person liable under any provision of this Decree or
of any rule or regulation issued thereunder shall be
liable jointly and severally with and to the same
extent as such controlled person unless the
controlling person acted in good faith and did not
directly or indirectly induce the act or acts
constituting the violation or cause of action.
Section 41. Other remedies. The rights and
remedies provided in this Decree shall be in
addition to any and all other rights and remedies
that may be available under existing laws.
Section 42. Repealing clause.
Section 43. Effectivity.
Done in the City of Manila, this 12th day of July, in
the year of Our Lord, nineteen hundred and
seventy-six.
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