CIVIL LAW

SYLLABUS FOR THE 2021 BAR EXAMINATION

I. IN GENERAL
A. When law takes effect

Art. 2, CC. Laws shall take effect after fifteen

days following the completion of their
publication either in the Official Gazette, or in
a newspaper of general circulation in the
Philippines, unless it is otherwise provided (As
amended by E.O. 200).

General Rules
 The clause "unless it is otherwise provided" refers to the date of
effectivity (i.e., as to when a law shall take effect) and not to the
requirement of publication itself, which cannot, in any event, be
omitted.
[Tañada v. Tuvera, G.R. No. L-63915 (1986)]
o Publication is indispensable in every case, but the legislature may in its
discretion provide that the usual fifteen-day period shall be shortened or
extended. [Tañada v. Tuvera, G.R. No. L-63915 (1986)]
 When, on the other hand, the administrative rule goes beyond merely
providing for the means that can facilitate or render least cumbersome
the implementation of the law but substantially increases the burden of
those governed, it behooves the agency to accord at least to those
directly affected a chance to be heard, and thereafter to be duly
informed, before that new issuance is given the force and effect of law.
[Commissioner v. Hypermix, G.R. No. 179579 (2012)]

Exception: Interpretative [implementing] rules and regulations and those

internal in nature. [Tañada v. Tuvera, G.R. No. L-63915 (1986)]
B. Retroactivity of laws

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 Laws shall have no retroactive effect, unless the contrary is provided.
[Art. 4, CC]

General Rule: All statutes are to be construed as having only prospective

operation.

Exceptions
a. When the law itself expressly provides
• Exceptions to Exception:
1. Ex post facto law
2. Impairment of contract
a) In case of remedial statutes
b) In case of curative statutes
c) In case of laws interpreting others
d) In case of laws creating new rights [Bona v. Briones, G.R. No. L-10806
(1918)].
e) f. Penal Laws favorable to the accused [Art. 22, RPC].

C. Mandatory or prohibitory laws

Art. 5, CC. Acts executed against the provisions of mandatory or prohibitory

laws shall be void, except when the law itself authorizes their validity.

Par. 3, Art. 17, CC. 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.

D. Waiver of rights

Art. 6, CC. 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.

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 Waiver
Voluntary and intentional relinquishment or abandonment of a known legal
right or privilege.

It has been ruled that a waiver to be valid and effective must be couched in clear
and unequivocal terms which leave no doubt as to the intention of a party to give up a
right or benefit which legally pertains to him. [RB Michael Press v. Galit, G.R. No.
153510 (2008)]

The waiver should be made in a positive manner [Dona Adela v. Tidcorp, G.R. No.
201931 (2015)].

Requisites of a Valid Waiver

a. Existence of a right
b. Knowledge of the existence thereof
c. An intention to relinquish the right. [Herrera v. Borromeo, G.R. No.
L-41171, (1987)]

General Rule: Rights may be waived.

Exceptions
a. If the waiver is contrary to law, public order, public policy, morals or
good customs
b. If the waiver prejudices a third person
c. If the alleged rights do not yet exist
d. If the right is a natural right
No compromise upon the following questions shall be valid [Art. 2035, CC]:
a. The civil status of persons;
b. The validity of a marriage or a legal separation;
c. Any ground for legal separation;
d. Future support;
e. The jurisdiction of courts;
f. Future legitime.

E. Repeal of laws

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 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 declare 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. [Art. 7, CC]

TWO KINDS OF REPEAL [Tolentino]

a. Express or Declared: contained in a special provision of a subsequent
law; names the law repealed.
b. Implied or Tacit: takes place when the provisions of the subsequent
law are incompatible or inconsistent with those of an earlier law.

The fundamental rule is that the legislature should be presumed to

have known the existing laws on the subject and not have enacted
conflicting statutes. Hence, all doubts must be resolved against any implied
repeal, and all efforts should be exerted in order to harmonize and give
effect to all laws on the subject. [Republic v. Marcopper Mining, G.R. No.
137174 (2000)]

F. Conflict of laws
1. Introduction

The world is divided into many territorial units, each imposing its own
set of laws. With the developed means of transportation and communication,
distances between these nations have shortened allowing more and more
people to travel and enter into contracts.

These dynamics cause the occurrence of events that contain elements

significant to more than one legal system which give rise to problems that
private international law seeks to resolve. [Coquia and Aguiling-
Pangalangan] Its incorporation in municipal laws is based not on
extraterritorial validity of the foreign law but on comity of nations.

“Comity,” in the legal sense, is neither a matter of absolute obligation, on

the one hand, nor of mere courtesy and good will, upon the other. But it is
the recognition which one nation allows within its territory to the legislative,
executive or judicial acts of another nation, having due regard both to
international duty and convenience, and to the rights of its own citizens or of

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other persons who are under the protection of its laws. [Hilton v. Guyot, 159
US 113 (1895)]

a. Definition
That part of municipal law which governs cases involving a foreign element.

That part of law which comes into play when the issue before the court
affects some fact or event, or transaction that is so closely connected with a
foreign system of law as to necessitate recourse to that system. [Chesire]

The law concerning the rights of persons within the territory and dominion
of one nation by reason of acts, private or public, done within the dominion
of another nation. [Hilton v. Guyot]

Public International Law v. Private International Law [Coquia and Aguiling-

Pangalangan]
As to Public International Law Private International Law
Persons involved
States and internationally
Individuals or corporations
recognized organizations
Transactions
involved States in their relationships Private transactions between
amongst themselves (Except cases private individuals which
of human rights violations) involve a foreign element

Remedies
State may resort to diplomatic
protest, peaceful means of
All remedies provided by
settlement of international disputes
municipal laws of the state
such as diplomatic negotiations,
such as resort to courts or
arbitration or conciliation or
administrative tribunals
adjudication by filing a case before
international tribunals

b. Scope

1. Adjudicatory jurisdiction: Determines the circumstances that allow

for a legal order to impose upon its judiciary the task of deciding
multi-state and multinational disputes
2. Choice-of-law: Refers to the probable sources from which the
applicable law of the controversy may be derived.
3. Recognition and enforcement of foreign judgments: Deals with the
study of situations which justify recognition by the forum court of
a judgment rendered by a foreign court or the enforcement of such
within the forum.

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c. Sources
1. Codes and Statutes
2. Treaties and International Conventions
3. Treatises, Commentaries and Studies of Learned Societies
4. Judicial Decisions

2. Jurisdiction and Choice of Law

a. Jurisdiction [Coquia and Aguiling-Pangalangan]

Judicial Jurisdiction Legislative Jurisdiction

The ability of the state to

The power or authority of a court to
promulgate laws and enforce them
try a case, render judgment, and
on all persons and property within
execute it in accordance with law
its territory

i. Basis of Exercise of Judicial Jurisdiction

Traditional Approach: Based on the state’s physical power over

persons and property within its territory.

Modern Approach: Minimum contacts and fundamental fairness test.

Minimum contacts must exist between the forum and defendant.

Due process only requires that a defendant, if not present within the
territory, should have certain minimum contacts with it such that
maintenance of the suit does not offend traditional notions of fair play and
substantive justice. It includes presence in the state through acts of
authorized agents. [International Shoe Co. v. Washington, 326 US 310
(1945)]
Long-Arm Statutes – Municipal Laws that specify the kinds of contacts upon
which jurisdiction will be asserted by the forum court.
These laws allow a court to obtain to obtain personal jurisdiction over an out
of-state defendant who has sufficient connection with the state, e.g. tortious
act done within the state, or a contract celebrated in the state.

ii. Types of Judicial Jurisdiction

JURISDICTION OVER THE PERSON

Competence or power of a court to render a judgment that will bind

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the parties to a case. Required in in personam proceedings. Acquired by the
voluntary appearance of a party and his submission to authority.

How Acquired
a. Over the person of the PLAINTIFF – acquired from the moment he
invokes the aid of the court by filing a suit.

b. Over the person of the DEFENDANT –

 When he enters his appearance UNLESS appearance is for the sole
purpose of protesting the jurisdiction of the court.
 When he is served with the legal process within the state
 Personal Service
 Substituted Service
 When subsequent proceedings arise out of his original cause of action
including counterclaims filed by the defendant

JURISDICTION OVER THE PROPERTY

Results either from:
a. Seizure of the property under a legal process; or
b. Institution of legal proceedings wherein the court’s power over
the property is recognized and made effective

Due process is satisfied by summons through publication in these in

rem and quasi in rem proceedings

JURISDICTION OVER THE SUBJECT MATTER

More than the general power conferred by law to take
cognizance of cases of a general class to which the case belongs. The
power of the court must be properly invoked by filing a petition.
Jurisdiction over the subject matter cannot be conferred by consent of
the parties.

DIRECT VS. INDIRECT JURISDICTION

Direct Jurisdiction Indirect Jurisdiction

answers the question WON a court

answers the question WON a court
can recognize and/or enforce a
can try and decide a case
judgment

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 iii. Ways of Dealing with a Conflicts Problem

DISMISS THE CASE

a) For Lack of Jurisdiction: Absent jurisdiction over the person, property
or subject matter, the court should dismiss the case.
b) Doctrine of Forum Non Conveniens: Literally means “forum is
inconvenient.” Thus, even if the court assumes jurisdiction over the
parties and the subject matter, it may decline to try the case on the
ground that the controversy may be more suitably tried elsewhere.

ASSUME JURISDICTION
Courts may apply either:
a) Forum Law; or
b) Foreign Law

The presence of any one of the following factors would justify the
application of forum law:
1. A specific law of the forum decrees that internal law should apply

2. The proper foreign law was not properly pleaded and proved
 Foreign law must be proved as a fact through Rules of Evidence
(e.g. official publication or a copy which has been consularized)
 Doctrine of Processual Presumption – absent contrary proof,
foreign law is presumed to be the same as Philippine law. (Also
known as the Doctrine of Presumed Identity)

3. The case falls under any of the exceptions to the application of foreign
law.
 When the foreign law is CONTRARY to an important PUBLIC
POLICY of the forum;
 When the foreign law is PENAL in nature;
 When the foreign law is PROCEDURAL in nature;
 When the foreign law is purely FISCAL OR
ADMINISTRATIVE in nature;
 When the application of foreign law will work UNDENIABLE
INJUSTICE TO CITIZENS of the forum;
 When the case involves REAL OR PERSONAL PROPERTY
situated in the forum;

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  When the application of the foreign law might ENDANGER
THE VITAL INTEREST of the state;
 When the foreign law is CONTRARY TO GOOD MORALS.

b. Choice of Law

1. Approaches to Choice of Law

Traditional Approaches

An act done in a foreign jurisdiction gives

rise to the existence of a right if the laws of
that state provides so.
Vested This right vests in the plaintiffs and carry it
Rights with them to be enforced in any forum he
Theory chooses to bring suit.
The forum refers to the law of the place of
occurrence of the “last act” necessary to
complete the cause of action.

The court treats a case as purely domestic

Local Law
case and applies local law regardless of
Theory
foreign elements.

Made with reference to principles of

Cavers’ preference based on considerations of
Principles justice and social expediency and should not
of Preference be the result of mechanical application of
the rule.

Traditional approaches are used for simplicity, convenience,

uniformity, and predictability. At times, at the expense of just
results.

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 Modern Approaches

Place of Most
Identifies a plurality of factors and factual
Significant
contacts in light of choice of law principles.
Relationship

Looks at the policy behind the laws of the

Interest
involved state and the interest each state had in
Analysis
applying its own law.

Weighs conflicting interests and apply the law

Comparative
of the state whose interest would be more
Impairment
impaired if its laws were not followed.

This approach looked into the general policies

of the state beyond those reflected in its
Functional
substantive law and to policies and values
Analysis
“relating to effective and harmonious
intercourse between states.”

Escape devices: The difficulty in following territorially-oriented

rules is the inherent rigidity and unjust decisions that may result
from their application. [Coquia and Aguiling- Pangalangan]

To avoid this, courts have resorted to “escape devices” such as:

a) Characterization
b) Renvoi
c) Dépeçage
d) Public policy exemption – the “ultimate escape device”

The Problem of Characterization

SINGLE ASPECT METHOD MULTI-ASPECT METHOD
Traditional Modern

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 All important factors of the case are
analyzed and the applicable law is
Concentrates on one element arrived at by “rationally elaborating
of a situation in order to and applying the policies and
connect the case to a purposes underlying the particular
particular legal community legal rules that come in question as
well as the needs of interstate or
international intercourse”

The Philippines follows the single-aspect method.

Examples
 Philippine law governs citizens of the Philippines in matters relating to
family rights, duties, the status, condition and legal capacity of persons.
[Art. 15, CC]
 Real and personal property are governed by the law of the country where
they are situated. [Art. 16, CC]
 National law of the deceased person governs intestate and testamentary
succession both with respect to order of succession, amount of
successional rights and intrinsic validity of testamentary provisions
regardless of where the property may be found. [Art. 16, CC]
 Law of the place of execution governs the forms and solemnities of wills
and other public instruments. [Art. 17, CC]
 When acts are executed before the diplomatic or consular officials of the
Republic of the Philippines in a foreign country, the solemnities
established by Philippine laws shall be observed in their execution. [Art.
17, CC]
 Prohibitive laws concerning persons, acts or property and those which
have as their object, public order, public policy, and good customs are to
be governed by Philippine law, unaffected by laws, judgments and
determinations of foreign countries. [Art. 17, CC]

CHARACTERIZATION
is the process by which a court at the beginning of the choice-of-law
process assigns a disputed question to an area in substantive law.
It is an escape device because by characterizing the problem
differently, it can produce results which the forum court considers as just
and sound.

SUBJECT-MATTER CHARACTERIZATION

Classification by a court of a factual situation into a legal category.

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 SUBSTANCE-PROCEDURE DICHOTOMY

Directs the court to the extent it will apply foreign law

SUBSTANTIVE PROCEDURAL

The Court MAY apply foreign law The Court SHALL apply forum law

Statute of Frauds: May be substantive or procedural:

• SUBSTANTIVE – if the words of the law relate to forbidding the
CREATION of obligation.
• PROCEDURAL – one that forbids ENFORCEMENT of the
obligation.
Statutes of Limitation and Borrowing Statute

General Rule: Statutes of limitations were classified as procedural because

they barred only the legal remedy without impairing the substantive right
involved.

Exception: If the statute provides a shorter period for certain types of claims
that fall within a wider classification covered by a general statute of
limitations. (Specificity Test)

Borrowing statutes
Bars the filing of a suit in the forum if it is already barred by the statute of
limitations in the place where the cause of action arose.

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;

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 (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.

RENVOI
Procedure whereby a jural matter presented is referred by the
conflict of laws rules of the forum to a foreign state (Step 1 in figure
below), the conflict of laws rule of which, in turn, refers the matter to
the law of either the forum (remission – 2a in figure below) or a third
state (transmission – 2b in figure below).

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 Internal Internal
law 1 law

2b
Conflict Conflict
of Law of Law
Rule Rule
2a

Limitation of renvoi
The process of renvoi is not applicable in instances where
there is a FALSE CONFLICT. There’s a false conflict when one
of the states does not have a real interest in applying its law in the
controversy

Ways of Dealing with the Problem of Renvoi

Forum conflict rules is deemed to refer

only to the internal law of that state (i.e. that
Reject the renvoi
which would apply to a domestic case with no
conflict-of-laws complications).

Looks into not just the internal law of the

Accept the renvoi foreign state, but also the choice-of-law rules
applicable in multi-state cases.

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 The forum court, upon reference to foreign
Desistance/ Mutual
law, sees that such law only applies to its own
disclaimer of
nationals and has no provision for application
jurisdiction
to a non-national.

The forum court would assume the same

Foreign Court Theory position that the foreign court would take were
the case litigated in the foreign court.

DÉPEÇAGE
Phenomenon where “different aspects of a case involving a foreign
element may be governed by different systems of laws.”

● A case may be dissected into different issues, each analyzed as to

which law shall apply.
● When such issue by issue analysis results in the application of
different laws to different issues, then dépeçage occurs.
● Dépeçage is the effect of issue by issue analysis.

PUBLIC POLICY EXEMPTION

The courts of the forum will not enforce any foreign claim
obnoxious to the forum’s public policy. To enforce the one-year
prescriptive period of the law of Bahrain...would contravene the public
policy on the protection to labor…[therefore], the applicable law on
prescription is the Philippine law [Cadalin v. POEA Administrator, 238 SCRA
721 (1994)].

2. Notice and Proof of Foreign Law

Extent of Judicial Notice

General Rule: Judge is not authorized to take judicial notice of foreign law
and is presumed to know only domestic law.

Exception: When judicial notice is allowed. [Rule 129, Section 1, Rules of

Court] It is allowed when the court is evidently familiar with such foreign
law. [Delgado v. Republic, G.R. No. L-2546 (1950)]

Familiarity with the foreign law may be because Philippine law was derived

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therefrom or the judge had previously ruled upon it in other cases. [Coquia
and Aguiling-Pangalangan]

Burden of Proof
The party whose cause of action or defense depended upon the foreign law
has the burden of proving the foreign law. [“He who alleges must prove”]

Such foreign law is treated as a question of fact to be properly pleade and

proved in conformity with the law of evidence of the state where it is
presented.

Proof of Foreign Law

Methods to prove foreign law
a) Official publication of the law (and consularized) [Rule 132,
Section 24, Rules of Court]
b) Copy of the law attested by the officer having the legal custody
of the record or by his deputy. (and consularized) [Rule 132,
Section 24, Rules of Court]
c) Learned treatises and expert witness for unwritten foreign law
[Rule 130, Section 46, Rules of Court]

Effect of Failure to Plead and Prove Foreign Law

a. Dismiss the case for inability to establish a cause of action
b. Processual Presumption / Presumed Identity – assume that the
foreign law is the same as the law of the forum
c. Apply the law of the forum

Apostille Convention
The Apostille Convention on Authentication of Documents took
effect in the Philippines on May 14, 2019. This means that the DFA will
no longer issue Authentication Certificates and instead will affix an
Apostille to public documents for use abroad as proof of authentication in
Apostille-contracting parties.

An apostille certifies “the authenticity of the signature, the capacity

in which the person signing the document has acted and, where
appropriate, the identity of the seal or stamp which it bears.” [Art. 5,
Apostille Convention]

Exceptions to the Application of Foreign Law

a. A specific law of the forum decrees that internal law
should apply
Examples:
 Real and personal property are subject to the law of the country where

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 they are situated. [Art. 16, CC]
 Revocation of a will done outside the Philippines may be valid if done
according to the law of the place where the will was made or lex
domicilii. [Art. 829, CC]
 Filipinos are prohibited from making joint wills even when done
abroad. [Art. 819, CC]
b. The proper foreign law was not properly pleaded and
proved.
c. The case falls under any of the exceptions to the
application of foreign law.
o When the foreign law is CONTRARY to an important PUBLIC
POLICY of the forum;
o When the foreign law is PENAL in nature;
o When the foreign law is PROCEDURAL in nature;
o When the foreign law is purely FISCAL OR ADMINISTRATIVE in
nature;
o When the application of foreign law will work UNDENIABLE
INJUSTICE TO CITIZENS of the forum;
o When the case involves REAL OR PERSONAL PROPERTY situated
in the forum;
o When the application of the Foreign law might ENDANGER THE
VITAL INTEREST of the state;
o When the foreign law is CONTRARY TO GOOD MORALS

3. Personal Law
Importance of a Personal Law
An individual’s personal law follows him wherever he is and governs those
transactions which affect him most closely.

a. Nationality

Importance of Nationality in the Philippines – Regulates:

a) Civil status
b) Capacity
c) Condition
d) Family rights and duties
e) Laws on succession
f) Capacity to succeed

Determination of Nationality
According to Article IV of the 1987 Constitution, the following are Filipino
citizens:
a. Those who are citizens of the Philippines at the time of the adoption

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 of the Constitution (1987)
b. Those whose fathers or mothers are citizens of the Philippines
c. Those born before January 17, 1973 of Filipino mothers, who elect
Philippine citizenship upon reaching the age of majority
d. Those who are naturalized in accordance with law

NATURAL-BORN CITIZENS
Natural-born citizens are those who are citizens of the Philippines without
having to perform any act to acquire or perfect citizenship.

The Philippines follows the jus sanguinis principle which means the rule of
descent or blood. This is in contrast with the jus soli principle where
nationality is determined by the law of the place of one’s birth.

NATURALIZED CITIZENS
Naturalized citizens refer those who underwent a procedure provided by law
in order to acquire or perfect citizenship.

Qualifications for Applicants [Sec. 3, RA 9139]

Place of birth Must be born in the Philippines
Residence Must have resided in the Philippines since birth
Age At least 18 at the time of filing the petition
Character Must be of good moral Character

Must believe in the underlying principles of the

Constitution

Must have conducted self in a proper and irreproachable

manner during entire period of residence
Education Must have received primary and secondary education in
any public or private educational institution duly
recognized by the DECS, where Philippine history,
government and civics are taught and prescribed as part
of the school curriculum
Children Should the applicant have minor children of school age,
said children must be enrolled in schools mentioned
above
Occupation Must have a known trade, business, profession or lawful
occupation

Must derive income sufficient to support self and family

NOT APPLICABLE to applicants who are college

degree holders but are unable to practice because of
their citizenship
Language Must be able to read, write, AND speak Filipino or any
of the dialects

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 Conduct Must have mingled with Filipinos; evinced a sincere
desire to learn and embrace custom traditions and ideals
of the Filipino people

Disqualification
The following cannot be naturalized [Sec. 4, Commonwealth Act No. 473]:
a) Commission of a crime involving moral turpitude
b) Not receiving and dealing with Filipinos in his home or
visiting Filipino homes in the community in a spirit of
friendship, friendliness and equality without any
discrimination
c) Applicant’s country does not grant reciprocal rights to
Filipino citizens at the time of the hearing of his
application.
d) Persons opposed to organized government or affiliated
with any association or group of persons who uphold
and teach doctrines opposing all organized governments
e) Persons defending or teaching the necessity or propriety
of violence, personal assault, or assassination for the
success and predominance of their ideas
f) Polygamists or believers in the practice of polygamy
g) Persons suffering from mental alienation or incurable
contagious diseases
h) Citizens or subjects of nations with whom the United
States and the Philippines are at war, during the period
of such war

Rationale: Naturalization is a privilege and not a right. The law must be

strictly construed against the applicant.

Derivative Citizenship [Sec. 15, Com. Act No. 473]

a. Wife shall be deemed a citizen if she is:
o Any woman who is now or may hereafter be married to a citizen of
the Philippines; and
o Might herself be lawfully naturalized.
b. Minor children born in the Philippines shall be considered citizens
c. FOREIGN-BORN minor children:
o IN THE PHILIPPINES at the time of naturalization: shall
automatically become Philippine citizens;
o NOT IN THE PHILIPPINES at the time of naturalization: deemed a
Filipino citizen only during his minority. Unless, he begins to reside
permanently in the Philippines when still a minor.
d. FOREIGN-BORN children AFTER NATURALIZATION of parent are
considered citizens if:
o He registers himself as a Philippine citizen; and
o Take the necessary oath of allegiance;

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 o Within 1 year from reaching the age of majority

Loss of Citizenship
a. By naturalization in foreign countries;
b. By express renunciation of citizenship;
c. By subscribing to an oath of allegiance to support the constitution or
laws of a foreign country upon attaining 21 years of age or more,
subject to certain exceptions;
d. By rendering service to, or accepting commission in the armed forces
of a foreign country, subject to certain exceptions;
e. By having been declared by competent authority, a deserter of the
Philippine armed forces in time of war, unless pardoned;
f. By marriage of a woman to a foreigner, if by virtue of the laws of her
husband’s country, she acquires nationality;
g. By cancellation of the certificate of naturalization
1) It was obtained fraudulently or illegally;
2) Person naturalized shall return to his native country or to some foreign
country and establish his permanent residence therein within 5 years
from the issuance of the certificate;
3) Petition was made on an invalid declaration of intention;
4) Minor children failed to graduate from the schools required through
the fault of their parents either by neglect to support them or by
transfer to another school;
5) Naturalized citizen allowed himself to be used as a dummy.

Methods of reacquiring Philippine citizenship [Frivaldo v. COMELEC, G.R.

No. 87193 (1989)]
a. By direct act of Congress;
b. By naturalization;
c. By repatriation.

PROBLEMS IN APPLYING NATIONALITY PRINCIPLE

Dual or Multiple Citizenship

An individual can be claimed as a national of 2 or more states pursuant to
the rule that each State determine who its own nationals are. [Hague
Convention on Conflict of National Laws]

Examples
• Child born of parents who are nationals of a country applying
jus sanguinis in a country applying jus soli principle;
• Citizen who marries an alien may acquire the citizenship of
his/her spouse if the spouse’s national law allows.

Effective nationality
In the determination of the rights of an individual who may claim multiple
nationality in a third state, the ICJ applied the principle of “effective

20
nationality,” i.e. that based on stronger factual ties between the person
concerned and one of the States whose nationality is involved. [Nottebohm
Case (Liechtenstein v. Guatemala [1955] ICJ Rep 4)]

Statelessness
Types
De Jure De Facto
An individual who has been stripped An individual possessed of a
of his nationality by his own former nationality but whose country does
government without having an not give them protection outsider
opportunity to acquire another. their own territory. Commonly
known as refugees.

Remedies :
a. Convention on the Status of Refugees provided some basic rights of
stateless persons.
b. Convention on the Reduction on Statelessness enumerates certain
conditions such as marriage, divorce, adoption, naturalization,
expatriation, under which an individual would not lose nationality at
the risk of becoming stateless, unless a new nationality is provided.
Also prohibits states from depriving their nationals of their identity as
punishment or a discriminatory instrument for political, religious or
ethnic reasons

b. Domicile

Domicile is defined by municipal law (Philippine Law) and private

international law.

Under municipal law

For the exercise of civil rights and the fulfillment of civil obligations, the
domicile of natural persons is the place of their habitual residence. [Art. 50,
CC]
For juridical persons: domicile is determined by the law creating or
recognizing it. In the absence thereof it shall be understood to be the place
where their legal representation or place of business is.

Under private international law

The place with which a person has a settled connection for certain legal
purposes, either because his home is there or because that place is assigned
to him by law. [Restatement (First) of Conflict of Laws]

To acquire a domicile, there must be concurrence of intention to make it

one’s domicile and physical presence.

General Rules on Domicile

a. No person shall be without a domicile.

21
 b. A person’s domicile of origin prevails until he acquires a new
domicile.
c. A person can have only one domicile for a given purpose or a given
time under the law of a particular State.

General Rule: A person cannot have two simultaneous domiciles.

Exception: Domicile may vary depending on the purpose (e.g. domicile for
divorce will be different from domicile for the purpose of running for public
office.)

d. It establishes a connection between a person and a particular territorial

unit.
e. The burden of proving a change of domicile is upon whoever alleges
that a change has been secured.

Without overwhelming evidence to show a change of domicile, the court

will decide in favor of the continuance of an existing domicile.

Kinds of Domicile
Domicile of origin Refers to a person’s domicile at birth
Legitimate child: domicile of father Illegitimate
child: domicile of mother
Domicile of Choice Freely chosen by a person sui juris
(Voluntary Acquired by the concurrence of physical presence in
Domicile) the new place and unqualified intention to make that
place one’s home
Constructive Domicile assigned to a person legally incapable of
Domicile choosing their own domicile
Minors: follow the domicile of the parents

Those with mental disabilities:

GR: inherent inability to decide where to make his
home
EXN: If it is shown that the person is capable of
understanding his act and its consequences

How one’s domicile of origin is lost

a. Actual removal or change of domicile
b. A bona fide intention of abandoning the former residence and
establishing a new one
c. Acts which correspond with the purpose

In the absence of concurrence of all these, the domicile of origin is deemed

to continue. [Pundaodaya v. COMELEC, G.R. No. 179313 (2009)]

c. Principles on Personal Status And Capacity

22
Personal status
Includes both condition and capacity.

Embraces such matters as:

a. The beginning and end of human personality
b. Capacity to have rights in general
c. Capacity to engage in legal transactions
d. Protection of personal interests
e. Family relations, particularly the relations between:
1. Husband wife
2. Parent and child
3. Guardian and ward
f. Transactions of family law, especially:
1. Marriage
2. Divorce
3. Separation
4. Adoption
5. Legitimation
6. Emancipation
g. Succession (both testate and intestate)

Capacity
The union of juridical capacity and capacity to act PRODUCES complete
civil capacity.

Juridical Capacity Capacity to Act

the fitness of a man to be the subject the power to do acts with juridical
of legal relations effects

Legislative Jurisdiction Distinguished from Judicial Jurisdiction

Status, once established by the personal law of the party, is given
UNIVERSAL RECOGNITION.

Beginning and End of Personality

The determination of the exact moment personality begins is referred to the
individual’s personal law.

A declaration of death issued by a competent court is considered valid for all

purposes. Upon the death of a person, some of his rights and obligations are
totally extinguished while others are passed on to his successors.

Absence
Three ways of addressing conflict of laws problem regarding absence:
a. There is a rebuttable presumption that a person is dead when he has been
absent for a number of years (followed by the Philippines)
b. A person’s unexplained absence is judicially investigated and established

23
which results in legal effects similar to those of death
c. A judicial decree shall have to be issued declaring the person dead before
the legal effects of death take place.

Name
General Rule: No person can change his name or surname without judicial
authority.

Exceptions (according to Jurisprudence):

a. That the name is ridiculous or tainted with dishonor or extremely
difficult to pronounce.
b. When the change is necessary to avoid confusion
c. When the right to a new name is a consequence of a change in status
d. A sincere desire to adopt a Filipino name to erase signs of a former
alien nationality which unduly hamper social and business life.

Whether an alien’s change of name is valid DEPENDS SOLELY ON HIS

PERSONAL LAW.

Age of Majority
Age of majority is determined by the individual’s personal law.

Capacity
Capacity to act is governed by his personal law.

The incapacities attached to his legal status go with him wherever he is.

3. Choice of Law Problems

a. CHOICE-OF-LAW IN FAMILY RELATIONS

Art. 15, CC. 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.

Governing Law: Lex Nationalii.

i. Marriage

Philippine Policy on Marriage and the Family

In case of doubt, courts will apply FORUM law because marriage is greatly
influenced by the values of society. [Prof. Aguiling-Pangalangan]

Examples:
Sec. 2, Art. XV, 1987 Constitution. Marriage, as an inviolable social
institution, is the foundation of the family and shall be protected by the
State.

Art. 220, CC. In case of doubt, all presumptions favor the solidarity of the

24
family. Thus, every intendment of law or facts leans toward the validity of
the marriage , the indissolubility of the marriage bonds, the legitimacy of
children, the community of property during the marriage, the authority of
parents over their children, and the validity of defense for any member of the
family in case of unlawful aggression.

EXTRINSIC Validity of Marriage: Lex Loci Celebrationis

Covers questions relating to formalities or “external conduct required of the
parties or of third persons especially of public officers, necessary to the
formation of a legally valid marriage.”

All States recognize as valid marriages celebrated in foreign countries if they

complied with the formalities prescribed therein [The Hague Convention].

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. [par. 1, Art. 26, FC]

Exceptions to the rule of lex loci celebrationis: Lex nationalii

a. Either/both parties are below 18 years old
b. Bigamous or polygamous marriages
c. Subsequent marriage without recording:
1. The judgment of nullity of the first marriage
2. Partition and distribution of the properties of the spouses
3. Delivery of the children’s presumptive legitimes
d. Mistake as to identity of the contracting party
e. One of the parties was psychologically incapacitated to comply
with the essential marital obligations
f. Incestuous marriages
g. Void by reason of public policy

The abovementioned involve the question capacity to marry, which is a

substantive requirement for marriage. Since personal law governs questions
of intrinsic validity, the above are exceptions to lex loci celebrationis
because they are controlled by lex nationalii.

INTRINSIC Validity of Marriage: Personal Law of the Parties – Lex

Nationalii or Lex Domicilii
Refers to the capacity or general ability of a person to marry (e.g. age
requirement and parental consent).

Governing Law: Personal Law, either Lex Nationalii or Lex Domicilii

Note: In the Philippines: Lex Nationalii

Consular marriages
Marriage celebrated by a diplomatic agent or consular official in accordance

25
with his state law shall be considered valid as long as it is not prohibited by
the state of celebration. [Art. 9, Hague Convention on Validity of Marriages]
Under Philippine law, marriage between spouses with at least one Filipino
officiated by the Philippine consul general, consul or vice consul must
comply with the

FORMAL AND INTRINSIC REQUIREMENTS

under Philippine law:
a. Valid marriage license and due publication and registration
b. Alien must comply with marriage requisites under his or her national
law and submit a certificate of legal capacity to contract marriage
issued by his diplomatic or consular office
c. Stateless persons or refugees shall submit an affidavit in lieu of the
certificate of legal capacity.

Effects of Marriage
Refers to personal relations between spouses and property relations of the
spouses

Governing Law on Personal Relations Between the Spouses: Lex Nationalii

If the spouses are of different nationalities, generally, the national law of the
husband may prevail if not contrary to law, customs and good morals of the
form.

Under Philippine law, both husband and wife have the right to fix the family
domicile. [Art. 69, FC]

Property Relations of Spouses

According to The Hague Convention on the Law applicable to Matrimonial
Property Regimes, the governing law is:
a. Internal law designated by the spouses before the marriage; or
b. In the absence thereof, the internal law of the state in which both spouses
fix their habitual residence.

Principle of Immutability
The applicable law continues notwithstanding any change of their nationality
or habitual residence. [Art. 7, The Hague Convention on Matrimonial
Property Regime]

Governing Law for Filipinos: Philippine Law

Under Philippine law, absent a contrary stipulation in a marriage settlement,

property relations are governed by Philippine law [Art. 80, FC]

Exceptions
a. Both spouses are aliens
b. With respect to extrinsic validity of contracts affecting property not

26
situated in the Philippines and executed in the country where property is
located
c. With respect to extrinsic validity of contracts entered into in the
Philippines but affecting property situated in a foreign country requiring
different formalities

ii. Divorce and Separation

Divorce may be either:

a. Absolute – termination of legal relationship between spouses by an act of
law
b. Relative or Legal Separation – separation from bed and board

Rules
a. Bases of obtaining jurisdiction over divorce proceedings:
1. Domicile of one of the parties; or
2. Marital domicile
b. On grant of divorce:
1. Lex nationalii;
2. Lex Fori (law of the country in which an action is brought)

Divorce Decrees Obtained by Filipinos

In the case of Republic v. Tanedo-Manalo [G.R. No. 221029 (2018)], the
Supreme Court declared that “the foreign divorce secured by a Filipino
against a foreign spouse is also considered valid in the Philippines.”

iii. Annulment and Declaration of Nullity

Governing Law
Traditional approach: LEX LOCI CELEBRATIONIS

Modern Approach: LAW OF THE MARITAL DOMICILE because it is

considered to have the most significant interest in the status of the spouses.

Note: In both choice of law approaches, since the action turns on the validity
of the marriage, lex fori, which is crucial in divorce, plays no substantial role
in annulment and declaration of nullity.

Bases of Jurisdiction
a. Lex loci celebrationis,
b. Law of marital domicile,
c. Any court which acquires personal jurisdiction over the parties.

iv. Parental Relations

Includes paternity which is the civil status of the father or mother with
respect to the child and filiation which is the status of the child in relation to
his parents.

27
Governing Law
Legitimacy of the child is submitted to the personal law of the parents which
is either: 1) Lex nationalii; or 2) Lex domicilii.

Note: In the Philippines, it is determined by the national law of the parents.

If the parents belong to different nationalities, it is determined by the
national law of the father.

Determination of Legitimacy of a Child

Kinds of filiations
a. Natural
1. Legitimate – governed by the personal law of the father
2. Illegitimate – governed by the personal law of the mother
b. Adopted

Parental Authority over the Child

Most countries follow the personal law of the father.

In the Philippines, joint exercise of parental authority by the father and

mother [Art. 211, FC]

v. Adoption

An act by which relations of paternity and affiliation are recognized as

legally existing between persons not so related by nature.

Bases of Adoption Jurisdiction

General Rule: Child’s personal law, if the adopter and adoptee have different
domiciles
Exception: Adopter’s personal law is considered, if the child’s domicile is
merely constructive Governing law on the process of adoption: LEX
DOMICILII

b. CHOICE OF LAW IN PROPERTY

1. The Controlling Law

a. Immovables: LEX SITUS

1. Determined by the law of the place where the land is situated
2. Connecting factor is immovable itself and not the parties

b. Movables:

i. Lex Domicilii

Rights over movables are governed by the law of owner’s domicile. For
simplicity and convenience because it is difficult to anticipate where they

28
may be situated at a given time.

ii. Lex Situs

Based on the state’s power over its territory. State where property is located
has the sole power to decide the validity and effects of transfer of the
property.

iii. Lex Loci Actus

Law of the place where the transaction was completed.

iv. Proper Law of The Forum

Law of the state having the most real connection with the transfer.
Note: In the Philippines however, in light of Article 16 of the CC, one need
not classify the subject property, as the aforementioned provision expressly
provides that, “real and personal property are subject to the law of the
country where they are situated (LEX SITUS).”

Traditional approach – physically part of the country and subject to the laws

Modern approach – situs is the place most closely and significantly related
to the issue
Thus, the only time the court has to classify the subject property is when it is
located in a foreign country WHICH HAS A LAW THAT
DISTINGUISHES BETWEEN REAL AND PERSONAL PROPERTY.
[Coquia and Aguiling-Pangalangan]

2. Capacity to Transfer or Acquire Property

Real property – governed by the law of the place where the property is
located (LEX SITUS)

3. Extrinsic and Intrinsic Validity of Conveyances

Formalities, essential validity, and effects of conveyance – governed by

LEX SITUS.
Rationale: The validity and effect of conveyance of property are treated as a
question of property rather than contract.

4. Exception to Lex Situs Rule

a. The transaction does not affect transfer of title to/ownership of the land –
LEX INTENTIONIS or LEX VOLUNTATIS
b. Contracts where real property is offered by way of a security for the
performance of an obligation such as a loan.
1. LOAN – covered by rules on ordinary contracts
2. MORTGAGE – LEX SITUS

29
c. Testate or intestate succession and capacity to succeed – LEX
NATIONALII

5. Situs of Certain Properties

Situs of Personal Property for Tax Purposes

The maxim mobilia sequuntur personam has been viewed as a mere fiction
of law having its origins in considerations of general convenience and public
policy. It cannot be applied to limit the right of the state to tax property
within its jurisdiction. It yields to established facts of legal ownership, actual
presence, and control elsewhere, and cannot be applied if it would result in
inescapable and patent injustice. [Wells Fargo Bank and Union Trust
Compny v. Collector, G.R. No. 46720 (1940)]

Situs of Money
Where such funds are located physically or where the institution holding
such funds is located.

Situs of Debts
Unsettled in Philippine jurisdiction, however, Prof. Aguiling-Pangalangan
suggests that the law which governs the contract from which the debt arises
shall also govern the transfer of the debt.

Corporate Shares of Stock

i. For tax purposes – domicile of the corporation
ii. For sale – place where the title to the goods passes from the seller to the
buyer

c. CHOICE OF LAW IN CONTRACTS

1. Extrinsic Validity of Contracts

LEX LOCI CELEBRATIONIS

Art. 17, CC. 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 the Philippines in a foreign country, the
solemnities established by Philippine laws shall be observed in their
execution. This principle is derived from a broader proposition that the place
governs the act (locus regit actum).

2. Intrinsic Validity of Contracts

LEX LOCI CONTRACTUS

Law of the place of making. Looks into where “the last act is done which is

30
necessary to bring the binding agreement into being so far as the acts of the
parties are concerned.”

LEX LOCI SOLUTIONIS

Law of the place of performance governs all matters relating to the:

a. Time
b. Place and manner of performance
c. Sufficiency of performance
d. Valid excuses for non-performance

LEX LOCI INTENTIONIS

Law intended by the parties. Intent may be expressed in a choice-of-law
provision, unless contrary to law, morals, good customs, public order or
public policy of the Philippines [Art. 1306, CC]; or may be implied from the
parties’ contemporaneous and subsequent acts.

3. Capacity to Enter into Contracts

Governed by the personal law of the parties –

a. LEX NATIONALII; or
b. LEX DOMICILII

4. Choice of Law Issues in Conflicts Contracts Cases

Choice of Forum Clause

Under the principle of freedom of contract, parties may stipulate the law to
govern their contract.
● Questions of venue, not jurisdiction
● Includes arbitration, not only choice of court.

Contracts with Arbitration Clause Arbitration clause – a provision in a

contract stipulating that any dispute arising from the contract shall be
submitted to a particular body for arbitration.

An arbitration clause, stipulating that the arbitral award is final and binding,
does not oust our courts of jurisdiction as the international arbitral award, is
still judicially reviewable under certain conditions.

The pertinent features of R.A. 9285 applying and incorporating the

UNCITRAL Model Law are the following: (1) the RTC must refer to
arbitration in proper cases; (2) foreign arbitral awards must be confirmed by
the RTC; (3) the RTC has jurisdiction to review foreign arbitral awards; (4)
grounds for judicial review different in domestic and foreign arbitral awards;
(5) RTC decision of assailed foreign arbitral award appealable. [Korea
Technologies v. Lerma, G.R. No. 143581, 2008]

5. Adhesion Contracts

31
Contracts that are not negotiated by the parties and drafted by only one
dominant party. The only participation of the other party would be to affix
his signature.

General Rule: Not void per se.

Exception: The court may not recognize the law stipulated and invoke public
interest or public policy, when there is an undue advantage made by a
dominant party.

6. Special Contracts

a. Carriage of Goods by Sea

b. Contracts for International Air Transportation
1. The Warsaw Convention was concluded in order to establish uniform
rules and regulations on the liability of international airline carriers in
cases of death, injuries of passengers, or loss or damage of cargo.
2. Any action for damages may be brought either:
a. In the court of the domicile of the carrier; OR
b. In the principal place of business of the carrier; OR
c. In the place of business of the carrier through which the contract has
been made; OR
d. Before the court at the place of destination.
c. The procedural rules of the forum shall apply.

7. Limitations to Choice of Law

a. Parties may not select a law that has no connection at all with
the transaction or the parties.
b. If the law selected should change, the law as changed will
govern.

Exception: If the change is so revolutionary that it was never contemplated

by the parties.

c. Should not be interpreted to oust the jurisdiction court already

acquired over the parties and the subject matter
d. Public policy deemed written into contracts impressed with
public interest
e. Cognovit Clauses / Confession of Judgment Clauses – debtor
may agree to be subject to the jurisdiction of a specific court in
case of breach or default in payment.

d. CHOICE OF LAW IN WILLS, SUCCESSION AND

ADMINISTRATION OF ESTATES

1. Extrinsic Validity of Wills

32
Includes age, testamentary capacity of the testator, and the form of the will.

Art. 17, CC. 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.

Art. 815, CC. 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.

Art. 816, CC. 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.

Art. 817, CC. 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.

Filipino nationals
a. LEX LOCI CELEBRATIONIS – formalities established by the law of the
country where the will is executed [Art. 17 and 815, CC]
b. LEX NATIONALII – formalities prescribed under Philippine law

Note: There is no express provision, only by analogy with rules applicable to

aliens. The ratio is that it cannot be assumed that the Code places the
Filipino citizen in a worse position that the alien in relation to our law

For Aliens
a. LEX NATIONALII [Art. 816 and 817, CC]
b. LEX DOMICILII
c. LEX LOCI CELEBRATIONIS

With Regard to Joint Wills

a. By Filipinos: VOID under Philippine law on the ground of public policy.
[Art. 818, CC]
b. By Foreigners: VALID UNLESS it affects heirs in the Philippines.

2. Intrinsic Validity of Wills

Governed by the national law of the decedent [Art. 16, CC]

Includes issues of substance such as order of succession, amount of

successional rights and intrinsic validity of testamentary provisions [Art. 16,
CC]

33
3. Interpretation of Wills
Governed by the rules of interpretation of the national law of the decedent
[Art. 16, CC]

4. Revocation

When done in the Philippines

Philippine Law applies

Done outside the Philippines, by a person domiciled in the Philippines

a. LEX DOMICILII – Philippine Law
b. LEX LOCI ACTUS – Law of the place of revocation
c. LEX LOCI CELEBRATIONIS – Law of the place where the will was
made [Balane]

Done outside the Philippines, by a nondomiciliary

a. LEX LOCI CELEBRATIONIS – Law of the place where the will was
made
b. LEX DOMICILII – Law of the place where testator was domiciled at the
time of revocation

5. Probate

FORUM LAW governs because disallowance is essentially procedural in

character.

However, the court will look into the law of the foreign state where the will
was made as to whether the extrinsic requirements in the execution of the
will have been complied with.

SUMMARY OF CHOICE OF LAW RULES

Nationality Art. 15, CC and Art. 16, CC

Domicile Art. 50, CC and Art. 51, CC
Personal Status and Personal Law (either Nationality or
Capacity Domicile)
FAMILY RELATIONS
Extrinsic Validity:
GR: Lex Loci Celebrationis
EXN: Art. 35(1), (4), (5), (6), FC; Art. 36-
Marriage 38, FC.
Intrinsic Validity: Personal law
Personal relations between spouses: Personal
Law
Property relations: see Art. 80, FC
Generally, lex rei sitae
Divorce and Separation; Lex fori for grounds of divorce

34
Grounds for legal
separation
Annulment and Declaration Traditional Approach: Lex loci celebrationis
of Nullity Modern Approach: Lex domicilii (marital
domicile)
Parental relations Determination of legitimacy: personal law
Parental authority: personal law of the father
Adoption: personal law of the child if
adopter and adoptee have different
nationalities
PROPERTY
Lex situs
Lex domicilii
Immovables
Lex situs
Lex loci actus
Property in the Philippines Lex situs, WON real or personal
Conveyances Extrinsic validity: Lex situs
Intrinsic validity: Lex situs UNLESS Lex
intentionis is different and is PROVED
CONTRACTS
Extrinsic Validity Lex Loci Celebrationis UNLESS clear that
the intention was otherwise
Lex contractus
Intrinsic Validity Lex solutionis
Lex intentionis
Capacity to enter into Personal law
contract
Interpretation of Contract Lex intentionis
WILLS, SUCCESSIONS, ADMINISTRATION OF ESTATES
Extrinsic Validity FILIPINO who makes a will ABROAD: Lex
Nationalii Lex Loci Celebrationis
ALIEN who makes a will IN THE
PHILIPPINES: Lex nationalii Lex domicilii
Lex loci celebrationis
Intrinsic validity Lex nationalii
Lex nationalii
Interpretation of Wills
If clear and unambiguous, Lex intentionis
DONE ABROAD BY ONE NOT
DOMICILED IN THE PHILIPPINES:Lex
Revocation loci celebrationis Lex domicilii
DONE ABROAD BY ONE DOMICILED
IN THE PHILIPPINES:
Lex loci actus Lex domicilii Lex loci
celebrationis

35
 DONE WITHIN THE PHILIPPINES:
Lex loci actus (Hence, Philippine law)
Probate Lex fori
Lex loci celebrationis
If there is an effective choice of law: courts
of the place where the trust is being
Trusts administered
If there is no effective choice of law: law
that will sustain the validity of the trust
(place of administration or domicile)

G. Human relations
[See XII. Torts, Section A; Principles. This section is a continuation of
Section A.]

Art. 26, CC. 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:
(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; Vexing or
humiliating another on account of his religious beliefs, lowly station in
life, place of birth, physical defect, or other personal condition.

Article 26 specifically applies to intentional acts which fall short of being

criminal offenses. It itself expressly refers to tortious conduct which "may
not constitute criminal offenses." The purpose is precisely to fill a gap or
lacuna in the law where a person who suffers injury because of a wrongful
act not constituting a crime is left without any redress. Under Article 26, the
person responsible for such act becomes liable for "damages, prevention and
other relief." In short, to preserve peace and harmony in the family and in
the community, Article 26 seeks to eliminate cases of damnum absque
injuria in human relations [MVRS Publications v. Islamic Da'wah Council,
G.R. No. 135306 (2003)].

The principal rights protected under this provision are the following:
1. The right to personal dignity
2. The right to personal security
3. The right to family relations
4. The right to social intercourse
5. The right to privacy
6. The right to peace of mind

Note: Coverage of Art. 26 is not limited to those enumerated therein, the

36
enumeration being merely examples of acts violative of a person’s rights to
dignity, personality, privacy and peace of mind. Other “similar acts” are also
covered within the scope of the article.

a. Violation of personal dignity

In order to be actionable it is not necessary that the act constitutes a criminal
offense. The remedy afforded by the law is not only the recovery of
damages. Injunction and other appropriate reliefs may also be obtained by
the aggrieved party.

b. Violation of Privacy
Privacy is the right to be let alone, or to be free from unwarranted publicity,
or to live without unwarranted interference by the public in matters in which
the public is not necessarily concerned. This right is purely personal in
nature, such that it can be invoked only by the person actually injured, it is
subject to a proper waiver, and it ceases upon death. However, the privilege
may be given to heirs of a deceased to protect his memory, to protect the
feelings of the living heirs.

Reasonableness of Expectation of Privacy

Test: [Ople v. Torres, G.R. No. 127685 (1998)]
a. Whether by one’s conduct, the individual has exhibited an expectation of
privacy
b. Whether this expectation is one that society recognizes and accepts as
reasonable

c. Interference with relations

An interference with the continuance of unimpaired interests founded upon
the relation in which the plaintiff stands toward one or more third persons
[Prosser and Keeton].

Kinds
1. Family relations
2. Social relations
3. Economic relations
4. Political relations

1. Family Relations

Alienation of affection

Elements:
1. Wrongful conduct of the defendant: intentional and malicious enticing of
a spouse away from the other spouse
2. Loss of affection or consortium (Note: Complete absence of affection
between the spouses is not a defense.)
3. Causal connection between such conduct and loss

37
Liability of Parents, Guardians or Kin
The law distinguishes between the right of a parent to interest himself in the
marital affairs of his child and the absence of rights in a stranger to meddle
in such affairs.
1. Such distinction between the liability of parents and that of strangers
is only in regard to what will justify interference.
2. A parent is liable for alienation of affections resulting from his own
malicious conduct, as where he wrongfully entices his son or daughter
to leave his or her spouse, but he is not liable unless he acts
maliciously, without justification and from unworthy motives.
3. He is not liable where he acts and advises his child in good faith
with respect to his child's marital relations in the interest of his
child as he sees it…
4. He may in good faith take his child into his home and afford him or
her protection and support, so long as he has not maliciously enticed
his child away or does not maliciously entice or cause him or her to
stay away from his or her spouse. This rule has more frequently been
applied in the case of advice given to a married daughter, but it is
equally applicable in the case of advice given to a son. [Tenchavez v.
Escaño, G.R. No. L-19671 (1965)].

2. Social Relations

Meddling with or disturbing family relations

Art. 26, CC. 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; xxx (2)
Meddling with or disturbing the private life or family relations of another;

3. Economic Relations

Art. 1314, CC. Any person who induces another to violate his contract
with another person shall be liable for damages to the other contracting
party.

Elements of tort interference: [So Ping Bun v. CA, G.R. No. 120554
(1999)]
1. Existence of a valid contract
2. Knowledge on the part of the third person of the existence of contract; and
3. Interference of the third person is without legal justification or excuse.

Everyone has a right to enjoy the fruits and advantages of his own
enterprise, industry, skill nd credit. He has no right to be protected against
competition; but he has a right to be free from malicious and wanton

38
interference, disturbance or annoyance. If disturbance or loss comes as a
result of competition, or the exercise of like rights by others, it is damnum
absque injuria, unless some superior right by contract or otherwise is
interfered with. Thus, a plaintiff loses his cause of action if the defendant
provides a sufficient justification for such interference, which must be an
equal or superior right in themselves. The defendant may not legally excuse
himself on the ground that he acted on a wrong understanding of his own
rights, or without malice, or bona fide, or in the best interests of himself
[Gilchrist v. Cuddy, G.R. No. 9356 (1915)].

Bad faith/Malice is required to make the defendant liable for damages in

cases of tortuous interference [So Ping Bun v. CA, supra].

4. Dereliction of Duty

Art. 27, CC. 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.

This applies only to acts of nonfeasance or the nonperformance of some acts

which a person is obliged or has responsibility to perform. The duty of the
public servant must be ministerial in character. If the duty is discretionary,
he is not liable unless he acted in a notoriously arbitrary manner.

The defense of good faith is not available because an officer is under

constant obligation to discharge the duties of his office, and it is not
necessary to show that his failure to act was due to malice or willfulness.

Requisites: [Amaro v. Sumanguit, G.R. No. L- 14986 (1962)]

1. Defendant is a public officer charged with a performance of a duty in
favor of the plaintiff;
2. He refused or neglected without just cause to perform the duty;
3. Plaintiff sustained material or moral loss as a consequence of such
nonperformance;
4. The amount of such damages, if material.

Art. 32, CC. 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;

39
(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 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

40
 mat 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.

Violation of Civil and Political Rights

Both private individuals and public officers can be held liable under this
provision.

This article further implements the civil liberties guaranteed by the

Constitution and creates an absolutely separate and independent civil action
for the violation of these civil liberties.

Malice not required, to require that a person act with malice before he is held
liable under this article would defeat the purpose to protect individual rights.
The object of the article is to put an end to official abuse under the guise of
being done in good faith.

Liability for violation or obstruction of civil liberties

Any person, whether public officer/employee or private individual, who
directly or indirectly obstructs, violates or in any manner impede or impair
the rights of a person as enumerated (these are actually rights under the Bill
of Rights) shall be liable to the latter for damages.

Separate and distinct civil action; quantum of evidence

The aggrieved party has the right to commence a civil action for damages
separate, distinct and independent of any criminal action that may arise from
the same violation of right. Only preponderance of evidence is required.

Type of damages
Indemnity shall include moral damages. Exemplary damages for also be
awarded.

Type of damages
Indemnity shall include moral damages. Exemplary damages for also be
awarded.

Limited liability for judges

Persons are liable under this provision whether or not their act or omission
constitutes a criminal offense. But Judges can only be held liable only when
their act or omission in violation of civil liberties of others also constitutes a
criminal offense.

Art. 34, CC. 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

41
 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.

The primary liability upon a member of a local police force is already

covered by Article 27.
However, Article 34 creates a separate civil action to enforce that liability,
independent of any criminal proceedings.

Article 34 makes the city or municipality subsidiarily liable for the omission
of its police officers to render aid or protection to anyone. This liability,
therefore, can be enforced against the city or municipality only when the
guilty police officer is insolvent. However, it cannot be avoided by proving
that the city or municipality has exercised due diligence in the selection and
supervision of its policemen. [Tolentino]

5. Civil Action

Art. 29, CC. 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.

Acquittal predicated on the conclusion “that the guilt of the defendant has
not been satisfactorily established” is equivalent to one on reasonable doubt,
and a suit to enforce civil liability for the same act or omission lies. [PNB v.
Catipon, G.R. No. L-6662 (1956)]

The accused once found by the court not to have been the author of an
offense and being acquitted of the accusation under no condition can he be
made civilly responsible for the harm caused and for the damages and losses
suffered by reason of the criminal act. [Almeida v. Abaroa, G.R. No. L-2993
(1907)]

Art. 30, CC. 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.

Under Art. 100 of the Civil Code, “every person criminally liable for a
felony is also civilly liable”. Civil Liability is dependent upon facts, if true,

42
would constitute a crime.

The civil liability is a necessary consequence of criminal responsibility and

is to be declared and enforced in the criminal proceeding. The Final
Judgement rendered in the case constitutes a bar to the subsequent civil
action for damages based upon the same case. [Tolentino]

Art. 31, CC. 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.

This article is intended to cover cases where the civil action can be based on
an act or omission distinct from that which is complained of as a felony.
[Tolentino]

Art. 33, CC. 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.

In these cases, a civil action may be filed independently of the criminal

action, even if there has been no reservation made by the injured party; the
law in itself makes such reservation. The result of the civil action is thus
independent of the result of the criminal action.

The underlying purpose for this independent civil action (also in Articles 32
and 34) is to allow the citizen to enforce his rights in a private action brought
by him, regardless of the action of the State attorney.

The term “physical injuries” mean bodily injuries, not the crime of physical
injuries defined in the Revised Penal Code, whether inflicted with intent to
kill or not. [Tolentino]

Art. 35, CC. 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
complaint 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 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

43
 presented by the prosecuting attorney, the civil action shall be suspended
until the termination of the criminal proceedings.

The right to file a civil action provided in the first paragraph also exists with
respect to offenses for which the law expressly provides a separate civil
action independent of the criminal prosecution.

However, the second paragraph only applies to offenses for which no

independent civil action is provided. The filing of a criminal case suspends
the civil case, inasmuch as the decision in the civil case would generally
depend upon the judgment in the criminal case. But if the offense is one for
which an independent civil action is provided by law (Articles 32-34), the
filing of the criminal action will not suspend the civil action.

Art. 36, CC. 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.

Art. 36, CC. 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.

H. Applicability of penal laws

Territoriality Principle
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. [Art. 14, CC]

Exemptions to the Territoriality Principle under International Law

(Theory of Extraterritoriality):
1. When the offense is committed by a foreign sovereign while in Philippine
territory
2. When the offense is committed by diplomatic representatives
3. When the offense is committed in a public or armed vessel of a foreign
country.

II. PERSONS AND FAMILY RELATIONS

A. PERSONS

44
Persons
Any being, physical, moral, real, juridical and legal susceptible of rights and
obligations or being the subject of legal relations. [Tolentino, citing Sanchez
Roman and Planio and Ripert]

Personality
The aptitude of a person of becoming the subject of legal relations, inherent
in every natural person and is lost only through death. [Tolentino]

Status
The legal condition or class to which one belongs in society or the legal and
juridical position of the individual in society, which determines the nature
and number of rights of an individual. [Tolentino]

Status can be political and civil, and civil status may be grouped into three
classes.
1. As a member of society
a. Resident or non-resident
b. Citizen or alien
2. As a member of family
a. Single, married, widowed, divorced
b. Parent, child, brother or sister
c. Legitimate, illegitimate, adopted
3. As himself
a. Age, whether minor or major
b. Sex, whether male or female
c. Mental condition, whether sane or insane

Art. 37, CC. Juridical capacity, which is the fitness to be the subject of
legal relations, is inherent in every natural person and is lost only through
death. Capacity to act, which is the power to do acts with legal effect, is
acquired and may be lost.

Juridical capacity can exist even without capacity to act; the existence of the
latter implies that of the former. Full civil capacity is the existence of both
capacity to act and juridical capacity.

Capacity and incapacity depends on the law, therefore it cannot be modified

by agreements. It is a matter of public interest. [Tolentino]

Juridical Capacity Capacity to Act

Fitness of a person to be the subject Power to do acts with legal effect
of legal relations
Passive Active
Aptitude for the holding and Aptitude to exercise rights
enjoyment of rights
Inherent in natural persons Must be acquired

45
 Lost upon death Lost through death and other causes
Can exist without capacity to act Must exist with juridical capacity
Cannot be limited or restricted May be restricted or limited

1. Kinds of Persons
Persons could be natural or juridical.
1. Natural persons refer to individuals or human beings who are created by
procreation.
2. Juridical persons are artificial, abstract entities created through laws
[Tolentino].

a. Natural Persons

Article 40 provides that "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" (i.e., that the fetus be alive at the time it is
completely delivered from the mother's womb as defined under Art. 41, CC).
This proviso, however, is not a condition precedent to the right of the
conceived child; for if it were, the first part of Article 40 would become
entirely useless and ineffective. [Quimiging v. Icao, GR. No. L-26795
(1970)]

Characteristics of fetal personality

1. Limited – because it only has rights for purposes favorable to it
2. Provisional/conditional – because it should be born alive later before the
rights can be claimed
3. Can enjoy rights – inherit from will or intestacy and be given donations
even before birth

A conceived child has a provisional personality for all purposes favorable to

it.
1. It is entitled to support [Quimiging v. Icao, GR. No. L-26795 (1970)]
2. It may inherit or succeed [Art. 1025, CC]
3. It may receive donations [Art. 742, CC]
Period of Conception: the first 120 days of the 300 days preceding the birth
of the child. [Tolentino]

Art. 41, CC. 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 intrauterine 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.

Birth
The removal of the fetus from the mother’s womb, which may be done
naturally or artificially by surgery. Before birth, the fetus is not a person but
merely a part of the internal organs of the mother. But because of the

46
expectancy that it may be born, the law protects it and reserves its rights,
making its legal existence, if born alive, retroact to the moment of its
conception. [Tolentino]

The presumption is that the baby was born alive, and the burden of proof lies
on those who allege the contrary.

Intrauterine Life When Considered

Born
7 months or more If alive (e.g. can breathe
independently, etc. upon delivery)
Less than 7 months If alive after completion of 24 hours
from delivery

Since birth determines personality, an aborted fetus never acquired legal

rights or civil personality because it was not alive at the time of delivery
from the mother’s womb. No damages can be claimed in behalf of the
unborn child since an action for pecuniary damages on account of personal
injury or death pertains primarily to the one injured. This is not to say that
the parents [of an aborted fetus] are not entitled to collect any damages at all.
But such damages must be those inflicted directly upon them as
distinguished from the injury or violation of the rights of the [aborted fetus]”
e.g. moral damages for their loss and the disappointment of their parental
expectations (Art. 2217, CC). [Geluz v. CA, G.R. No. L-16439 (1961)]

Death
Art. 42, CC. 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.

Only natural or physical death. The law does not recognize “civil death,”
(i.e. death due to conviction or a religious profession). [Tolentino]

For certain purposes, after the death of a person, his personality continues in
his estate—the estate of a deceased person is also considered as having legal
personality independent of the heirs, wherein the mass of property, rights,
and assets left by the decent becomes directly vested and charged with his
rights and obligations. [Tolentino]

Criminal liability ends with death but civil liability may be charged against
the estate [People v. Tirol, G.R. No. L-30538 (1981)].

Art. 43, CC. 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.

47
The statutory presumption provided by Article 43 of CC applies only when
there is doubt on the order of death between persons who are called to
succeed each other. It does not apply when there is credible eyewitness as to
who died first [Joaquin v. Navarro, G.R. No. 5426 (1953)].

Art. 43, CC v. Sec. 3(jj), Rule 131, Rules of Court (hereinafter, ROC)
Art. 43, CC Sec. 3(jj), Rule 131
Only use the presumptions when there are no facts to get inferences from.
Only used for succession purposes Cannot be used for succession
purposes
In any circumstance Only during death in calamities,
wreck, battle or conflagration

Rule 131, Section 3(jj) provides that if there are no

inferential/circumstantial evidences to be inferred from, it can be presumed
that when two persons perish in the same calamity, and it is not shown who
died first, the survivorship is determined from the probabilities resulting
from the strength and the age of the sexes. [Tolentino]

Sec. 3(jj), Rule 131, ROC: Presumption of Survivorship

Deceased A Deceased B Presumed to have
survived
Under 15 Under 15 Older
Above 60 Above 60 Younger
Under 15 Above 60 Under 15
Above 15 but under 60, different sex Male
Above 15 but under 60, same sex Older
Under 15 but over 60 Between 15 and 60 Between 15 and 60

b. Juridical Persons

A juridical person is an abstract being, formed for the realization of

collective purposes, to which the law has granted capacity for rights and
obligations. The entity must be recognized as having its own rights and
obligations which are not that of its component members. Its personality is
manifested only in the realm of patrimonial relations—it has no family and
personal rights. [Tolentino]

The following are juridical persons [Art. 44, CC]:

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:
a. These are governed by the laws creating or recognizing them. [par. 1,
Art. 45, CC]
b. Upon the dissolution of corporations, institutions and other entities for

48
 public interest or purpose their property and other assets shall be
disposed of in pursuance of law or the charter creating them. If
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. [Art. 47, CC]
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.
a. Private corporations are regulated by laws of general application on
the subject.
b. Partnerships and associations for private interest or purpose are
governed by the provisions of this Code concerning partnerships
[pars. 2 and 3, Art. 45, CC].

Juridical persons may:

1. Acquire and possess property of all kinds.
2. Incur obligations.
3. Bring civil or criminal actions. [Tolentino]
Juridical persons are not completely at par with natural persons as to
capacity because it cannot exercise rights which presuppose physical
existence, such as family rights, making of wills, etc. But like natural
persons, it can have a nationality, a domicile, a name, and a right to
reputation. It can own and possess property, dispose such property, enter
into contracts, and inherit by will. It can also incur obligations. [Tolentino]

2. Capacity to act
Art. 37, CC. Juridical capacity, which is the fitness to be the subject of
legal relations, is inherent in every natural person and is lost only through
death. Capacity to act, which is the power to do acts with legal effect, is
acquired and may be lost.

Presumption of capacity: Capacity to act must be supposed to attach to a

person who has not previously been declared incapable, and such capacity is
presumed to continue for so long as the contrary is not proved [Standard Oil
Co. v. Aranas (1911)]

Restrictions on Capacity to Act

Art. 38, CC. Minority, insanity or imbecility, the state of being a deaf-
mute, prodigality and civil interdiction are mere restrictions on capacity to
act, and do not exempt the incapacitated person from certain obligations,
as when the latter arise from his acts or from property relations, such as

49
 easements.

Circumstances which modify, limit, or restrict capacity to act:

1. Minority

2. Insanity or imbecility

3. Deaf-mutism

4. Civil Interdiction (Penalty)

5. Prodigality

6. Family relations

7. Alienage

8. Absence

9. Insolvency and trusteeship

Only religious belief and political opinion are the circumstances which do
not limit capacity to act according to CC. [Art. 39, CC]

General Rule: Incapacitated persons are not exempt from certain obligations
arising from his acts or property relations. Restrictions in capacity to act
generally affect obligations arising from contracts only. As a rule, they do
not affect those arising from law, quasi-delicts, etc. Also, certain rights are
not affected by incapacity, such as right to inherit or to support. Perez]

a. Minority

Article 234 of the Family Code (hereinafter FC) is amended, lowering the
age of emancipation/majority from 21 to 18 years. Articles 235 and 237 of
FC are repealed.

Who are minors?

50
Those whose age are below the age of majority.

Effects on Contracts

1. They cannot give consent to a contract [Art. 1327 (1), CC]

2. Minority cannot be asserted by the other party in an action for
annulment [Art. 1397, CC]
3. Not obliged to make restitution except insofar as he has been
benefited [Art. 1399, CC]
4. Minor has no right to demand the thing/price voluntarily returned by
him [Art. 1426, CC]
5. Minor has no right to recover voluntarily paid sum or delivered thing,
if consumed in good faith [Art. 1427, CC]
6. Must pay reasonable amount for necessaries delivered to him [Art.
1489, CC]
7. A contract where one of the parties is a minor is voidable [Art.
1390(1), CC]
8. A contract is unenforceable when both of the parties are minors
(incapable of giving consent) [Art. 1403(3), CC]

Estoppel works against minors who misrepresent their ages in a contract

and are compelled to comply with its terms. [Mercado v Espiritu, G.R. No.
L-11872 (1917)]

However, when a minor made no active misrepresentation as to his minority

and such minority is known to the other party, the contract may be annulled
by the minor upon attaining the age of majority. [Bambalan v. Maramba,
G.R. No. L-277710 (1928)]

Failure of the minors to disclose their age does not constitute fraud. Because
it was merely a passive misrepresentation, they were not estopped and
cannot be legally bound by their signatures in the contract. They do not have
to pay the interest, they may just return their portion of the loan. However,
the minors are obliged to make restitution insofar as they have been
benefited from what they received [Art. 1399, CC; Braganza v. Villa Abrille,

51
G.R. No. L- 12471 (1959)].

Effects on Marriage

1. May not yet contract marriage [Art. 5, FC].

2. Marriages, where one of the parties is below 18, even with the consent of
parents/guardians, are void [Art. 35, FC].

Effect on Crimes [RA 9344: Juvenile Justice and Welfare Act of 2006]

General Rule: EXEMPTED from criminal liability

Exception: Acted with discernment, and the minor is between 15 and 18

years of age.

Section 6 states that a child fifteen (15) years of age or under at the time of
the commission of the offense shall be exempt from criminal liability but
will be subject to an intervention program.

• A child above 15 but below 18 shall also be exempted from

criminal liability and be subjected to an intervention program,
unless the child has acted with discernment.
• Exemption from criminal liability does not include exemption
from civil liability.

Section 7 states that a child in conflict with the law shall enjoy the
presumption of minority and shall enjoy all the rights until he or she is
proven to be 18 years old or older.

Section 20 states that if the child taken into custody is 15 years old or below,
the authority which had the initial contact with the child has the duty to
immediately release the child to the custody of his/her parents, guardians, or
nearest relatives.

• If those cannot be located, the child may be released to a duly

registered NGO or religious organization, a barangay official or
member of the Barangay Council for the Protection of Children,

52
 or to the DSWD.

Section 57 states that any conduct not considered an offense or not

penalized if committed by an adult shall not be considered an offense and
shall not be punished if committed by a child.

Section 58 states that persons below 18 years of age shall be exempt from
prosecution for the crime of vagrancy and prostitution, mendicancy, and
sniffing of rugby, as such are inconsistent with the United Nations
Convention on the Rights of the Child.

Section 59 states that no death penalty shall be imposed upon children in

conflict with the law.

b. Insanity

Insanity includes many forms of mental disease, either inherited or

acquired. A person may not be insane but only mentally deficient (idiocy,
imbecility, feeble-mindedness). Insanity is the complete deprivation of
reason or intelligence or power to discern [People v. Austria].

On the other hand, imbecility is the weakness of mind which, without

depriving the person entirely of the use of his reason, leaves only the faculty
of conceiving the most common and ordinary ideas and such as relate almost
always to physical wants and habits. [Black’s Law Dictionary, 2nd Edition]

Prevailing Presumption: Every person is of sound mind, in the absence of

proof to the contrary. [par. 1, Art. 800, CC]

It is presumed that a person who enters into a contract is of sound mind. The
burden of proof of insanity rests upon him who alleges insanity. [Engle v.

53
Doe, G.R. No. L-23317 (1925)] (see Exception below)

Effect on Contracts

1. Incapacity to give consent to a contract [Art. 1327(2), CC]

2. Contracts entered into during lucid intervals are valid [Art. 1328, CC].
Burden of proof lies with party asserting the contract was entered into by the
insane during a lucid interval.

3. Restitution of benefits [Art. 1399, CC]

4. Voidable if one of the parties is insane [Art. 1390, CC]

5. Unenforceable if both of the parties are insane [Art. 1403 (3), CC]

Effect on Crimes

General rule: EXEMPTED from criminal liability [Art. 12(1), RPC]

Exception: Acted during lucid interval [Art. 1328, CC].

Effect on Marriage

May be annulled if either party was of unsound mind unless such party, after
coming to reason, freely cohabited with the other. [Art. 45(2), FC]

Action for annulment of marriage must be filed by the sane spouse who had
no knowledge of the other’s insanity, or by any relative/guardian of the
insane before the death of either party; or by the insane spouse during a lucid
interval or after regaining sanity. [Art. 47(2), FC]

In the absence of proof that the defendant had lost his reason or became
demented a few moments prior to or during the perpetration of the crime, it
is presumed that he was in a normal condition of mind. [USA v. Vaguilar,
G.R. No. L-9471 (1914)]

c. Deaf-Mutism

54
Effect on Contracts

1. Cannot give consent to a contract if he/she also does not know how to
write [Art. 1327(2), CC]

2. Can make a valid WILL, provided: he must personally read the will. The
contents of the same have either been read personally by him or otherwise
communicated to him by 2 persons [Art. 807, CC]

3. Cannot be a witness to the execution of a will [Art. 820, CC]

4. Voidable if one of the parties is a deafmute who does not know how to
write [Art. 1390, CC]

5. Unenforceable if both of the parties are deaf-mutes and do not know how
to write [Art. 1403(3), CC]

d. Prodigality

Incompetent includes prodigals [Sec. 2, Rule 92, ROC]

Prodigality may be inferred but must show a morbid state of mind and a
disposition to spend, waste, and lessen the estate to such an extent as is
likely to expose the family to want of support, or to deprive the forced heirs
of their undisposable part of the estate. [Martinez v. Martinez, G.R. No. 445
(1902)]

Note: It is not the circumstance of prodigality, but the fact of being under
guardianship that restricts capacity to act.

e. Civil Interdiction

It is an accessory penalty imposed upon persons who are sentenced to a

principal penalty not lower than reclusion temporal [Art. 41, RPC].

55
Effect on Parental/Marital Authority

Offender is deprived of the rights of parental authority, or guardianship, of

marital authority, of the right to manage his property and of the right to
dispose of such by any act inter vivos [Art. 34, RPC].

Effect on Marriage and Property

1. For the validity of marriage settlements, the participation of the

guardian shall be indispensable [Art. 123, FC]
2. Sentence of one’s spouse to a penalty which carries with it civil
interdiction is sufficient cause for judicial separation of property [Art.
135 (1), FC]
3. The administration of exclusive property of either spouse may be
transferred by the court to the other spouse when one of them is
sentenced to civil interdiction [Art. 142 (3), FC]

f. Family Relations

Effect on Crimes

1. Justifying circumstance if acted in defense of person/rights of spouse,

ascendants, descendants, brothers/sisters, and other relatives up to the 4th
civil degree [Art. 11(2), RPC]

2. Mitigating circumstance if acted in the immediate vindication of a grave

offense/felony committed against his spouse, ascendants or relatives of the
same civil degree [Art. 13(5), RPC]

3. Descendants cannot be compelled to testify in a criminal case, against his

parents and grandparents.

• Unless: the crime was against the descendant OR by one parent

against the other [Art. 215, FC]

Effect on Marriages

Incestuous and void marriages:

56
1. Between ascendants and descendants of any degree;

2. Between brothers and sisters, whether full or half-blood. [Art. 37, FC]

Effect on Contracts

1. Donations/grants of gratuitous advantage between spouses during the

marriage shall be VOID, except moderate gifts during family
occasions [Art. 87, FC]
2. Prescription does not run between spouses, parent and child, guardian
and ward [Art. 1109, CC]
3. Spouses cannot sell property to each other, EXCEPT:
a. Absolute separation is agreed upon in the marriage settlements
b. Judicial separation of property [Art. 1490, CC]

g. Alienage

Dual Citizenship v. Dual Allegiance [Cordora v. COMELEC, G.R.

No.176947 (2009)]

Dual Citizenship Dual Allegiance

Arises when, as a result of the Refers to the situation in which a
concurrent application of the person Simultaneously owes, by
different laws of two or more states, some positive act, loyalty to two or
a person is simultaneously more states
considered a national by said states
Involuntary Result of individual’s volition

For candidates with dual citizenship, it should suffice if, upon the filing of
their certificates of candidacy, they elect Philippine citizenship to terminate
their status as persons with dual citizenship considering that their condition
is the unavoidable consequence of conflicting laws of different states.
[Cordora v. COMELEC, G.R. No. 176947 (2009)]

Effect on Property

Aliens cannot own or operate public utilities. Corporations should be at least

40% Filipino, and their managing or executive officials should be Filipinos.

57
Furthermore, alien Corporations cannot operate for more than 50 years. [Sec.
11, Art. XII, 1987 Constitution]

h. Absence

Note: More thorough discussion under “Rules Governing Absent Persons”

Absence is a limitation because it is a ground for the judicial appointment of

a representative [Art. 381, FC]

Art. 390, CC. 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.

The following, after being missing for four years, shall be presumed dead
for all purposes including the division of the estate among the heirs [Art.
391, CC.]:

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.

The 4-year period provided by Art. 391 is shorter than that of Art. 390 (7
and 10 years) because it involves situations where the absentee’s life is in
danger.

58
 i. Insolvency and Trusteeship

Under the Insolvency Law, a debtor who has been found insolvent cannot
dispose of his property or receive payments. [Perez citing Act No. 1956,
Rules on Corporate Rehabilitation]

3. Domicile and residence of persons

Domicile of Natural Persons

The place of their habitual residence [Art. 50, CC]

Domicile of Juridical Persons

The place where their legal representation is established, or where they
exercise their primary functions, unless there is a law or other provision that
fixes the domicile [Art. 51, CC]

Domicile v. Residence
While domicile is permanent (there is intent to remain), residence is
temporary and may be changed anytime (there is no necessary intent to
remain).

Requisites of Domicile
1. Residence or bodily appearance in a new locality;
2. Intention to permanently remain there (animus manendi); and
3. An intention to abandon the old domicile (animus non revertendi).

There must be animus manendi coupled with animus non revertendi. One
must have actual change of domicile and a bona fide intention to establish a
new residence. [Poe Llamanzares v. COMELEC, G.R. No. 221697 (2016)]

Kinds of Domicile
1. Domicile of Origin: Domicile of parents of a person at the time he was
born.
2. Domicile of Choice: Domicile chosen by a person, changing his domicile
of origin. Domicile where he intends to remain (animus revertendi).
3. Domicile by Operation of Law (i.e. Art. 69, domicile of minor).

A married woman does not lose her domicile to her husband. Unless there is
a clear proof of abandonment, domicile of origin subsists [Romualdez-
Marcos v. COMELEC, G.R. No. 119976 (1995)].

Foundlings cannot be considered stateless and citizenship is not required for

domicile [Poe- Llamanzares v. COMELEC, G.R. No. 221697 (2016)]

59
A house is not necessary to establish domicile [Jalosjos v. COMELEC, G.R.
No. 193237 (2012)].

B. RIGHTS AND OBLIGATIONS OF COUPLES IN INTIMATE

RELATIONSHIPS (REP. ACT No. 9262)
1. Obligation not to commit acts of VAWC

Sec. 3(a) of R.A. No. 9262, otherwise known as “An Act Defining Violence
Against Women and their Children, Providing for Protective Measures for
Victims, Prescribing Penalties Therefore, and for Other Purposes,”
elucidates that violence against women and their children may be
committed by any person against a woman with whom the person has or
had a sexual or dating relationship.
 Sec. 3(e) defines a dating relationship to contemplate a situation
wherein the parties live as husband and wife without the benefit of
marriage or are romantically involved over time and on a continuing
basis during the course of the relationship.
o A casual acquaintance or ordinary socialization between two
individuals in a business or social context is not a dating relationship.
 Sec. 3(f), on the other hand, defines “sexual relations” to contemplate
a single sexual act which may or may not result in the bearing of a
common child.

Principle RA 9262 does not violate the equal protection clause.

The unequal power relationship between women and men;
the fact that women are more likely than men to be victims
of violence; and the widespread gender bias and prejudice
against women all make for real differences justifying the
classification as allowed by the equal protection clause of
the 1987 Philippine Constitution [Garcia v. Drilon
(2006)].
Concept The prohibited acts under this law are in the nature of
“public crime,” which means they may be prosecuted
upon the filing of a complaint by any citizen having
personal knowledge of the circumstances involving the
commission of the crime [Sec. 25, RA 9262].

The prohibited acts shall likewise constitute grounds for

legal separation under Art. 55(1) of the Family Code.
• In which case, the cooling-off period under
Art. 58 of the Family Code shall not apply
[Sec. 19, RA 9262].
Scope Unmarried Cohabitants (i.e., couples in intimate
relationships), wherein the parties live as husband and
wife without the benefit of marriage.

60
  However, in the case of Garcia v. Drilon (2006),
the Supreme Court held that “there is likewise no
merit to the contention that R.A. 9262 singles out
the husband or father as the culprit.” As defined
above, VAWC may likewise be committed “against
a woman with whom the person has or had a sexual
or dating relationship.”
This effectively contemplates a scenario where one of
the parties is a lesbian.

Violence, as prohibited under this Act, includes, but is not

limited to:
1. Physical Violence or acts that include bodily or
physical harm;
2. Sexual Violence or acts which is sexual in nature,
committed against a woman or her child;
3. Psychological Violence or acts or omissions causing or
likely to cause mental or emotional suffering of the victim;
and
4. Economic Abuse or acts that make or attempt to make
a woman financially dependent [Sec. 3(a), RA 9262].
Prohibited a. Causing physical harm to the woman or her
Acts child;
b. Threatening to cause the woman or her child
physical harm;
c. Attempting to cause the woman or her child
physical harm;
d. Placing the woman or her child in fear of
imminent physical harm;
e. Attempting to compel or compelling the
woman or her child to engage in conduct
which the woman or her child has the right to
desist from or desist from conduct which the
woman or her child has the right to engage in,
or attempting to restrict or restricting the
woman's or her child's freedom of movement
or conduct by force or threat of force,
physical or other harm or threat of physical or
other harm, or intimidation directed against
the woman or child. This shall include, but
not limited to, the following acts committed
with the purpose or effect of controlling or
restricting the woman's or her child's
movement or conduct:
i. Threatening to deprive or actually depriving the
woman or her child of custody to her/his family;

61
 ii. Depriving or threatening to deprive the woman or
her children of financial support legally due her or
her family, or deliberately providing the woman's
children insufficient financial support;
iii. Depriving or threatening to deprive the woman or
her child of a legal right;
iv. Preventing the woman in engaging in any legitimate
profession, occupation, business or activity or
controlling the victim's own money or properties, or
solely controlling the conjugal or common money,
or properties;
f. Inflicting or threatening to inflict physical
harm on oneself for the purpose of controlling
her actions or decisions;
g. Causing or attempting to cause the woman or
her child to engage in any sexual activity
which does not constitute rape, by force or
threat of force, physical harm, or through
intimidation directed against the woman or
her child or her/his immediate family;
h. Engaging in purposeful, knowing, or reckless
conduct, personally or through another, that
alarms or causes substantial emotional or
psychological distress to the woman or her
child. This shall include, but not be limited to,
the following acts:
i. Stalking or following the woman or her child in public
or private places;
ii. Peering in the window or lingering outside the
residence of the woman or her child;
iii. Entering or remaining in the dwelling or on the
property of the woman or her child against her/his will;
iv. Destroying the property and personal belongings or
inflicting harm to animals or pets of the woman or her
child; and
v. Engaging in any form of harassment or violence;

i. Causing mental or emotional anguish, public

ridicule or humiliation to the woman or her
child, including, but not limited to, repeated
verbal and emotional abuse, and denial of
financial support or custody of minor children
of access to the woman's child/children.

2. Right to be protected against acts of VAWC

62
RULE ON VIOLENCE AGAINST WOMEN AND THEIR CHILDREN
[A.M. No. 04-10-11- SC]

Who may file a petition for a protection order?

a. The offended party
b. Parents or guardians of the offended party
c. Ascendants, descendants or collateral relatives of the offended
party, within the fourth civil degree of consanguinity or affinity
d. Officers or social workers of the DSWD or social workers of LGUs
e. Police officers, preferably those in charge of women and children's
desks
f. Punong Barangay or Barangay Kagawad
g. Lawyer, counselor, therapist or healthcare provider of the
petitioner; or
h. At least two concerned, responsible citizens of the place where the
violence against women and their children occurred and who have
personal knowledge of the offense committed. [Sec. 8]

Where to File the Petition

The petition may be filed with the Family Court of the place where the
offended party resides. If there is no existing Family Court, it may be filed
with the Regional Trial Court, Metropolitan Trial Court, Municipal Trial
Court in Cities, Municipal Trial Court or Municipal Circuit Trial Court with
territorial jurisdiction over the place of residence of the offended party. [Sec.
9]

What Reliefs are Available?

The protection order shall include any, some or all of the following reliefs:
a. Prohibiting the respondent from threatening to commit or
committing, personally or through another, acts of violence
against the offended party
b. Prohibiting the respondent from harassing, annoying,
telephoning, contacting or otherwise communicating in any
form with the offended party, either directly or indirectly;
c. Removing and excluding the respondent from the residence
of the offended party, regardless of ownership of the
residence, either temporarily or permanently where no property
rights are violated;
d. Requiring the respondent to stay away from the offended
party and any designated family or household member at a
distance specified by the court;
e. Requiring the respondent to stay away from the residence,
school, place of employment or any specified place
frequented regularly by the offended party and any designated
family or household member;
f. Directing lawful possession and use by the offended party of

63
 an automobile and other essential personal effects,
regardless of ownership, and directing the appropriate law
enforcement officer to accompany the offended party to the
residence of the parties to ensure that the offended party is
safely restored to the possession of the automobile and other
essential personal effects;
g. Ordering temporary or permanent custody of the
child/children with the offended party, taking into
consideration the best interests of the child. An offended party
suffering from Battered Woman Syndrome shall not be
disqualified. In no case shall custody of minor children be given
to the batterer;
h. Directing the respondent to provide support to the woman
and/or her child, if entitled to legal import;
i. Prohibiting the respondent from carrying or possessing any
firearm or deadly weapon and ordering him to surrender the
same to the court for appropriate disposition, including
revocation of license and disqualification to apply for any
license to carry or possess a firearm;
j. Directing the DSWD or any appropriate agency to prepare a
program of intervention for the offended party;
k. Requiring the respondent to receive professional counseling
from agencies or persons who have demonstrated expertise and
experience in anger control, management of alcohol, substance
abuse and other forms of intervention to stop violence;
l. Awarding the offended party actual damages caused by the
violence inflicted, including, but not limited to, property
damage, medical expenses, childcare expenses and loss of
income; and compensatory, moral, and exemplary damages.

The court may grant such other forms of relief. [Sec. 11]

3. Other rights and obligations

Unmarried cohabitants
• Are NOT considered next of kin
• Are NOT extended visitation rights
• Have NO right to make medical decisions on behalf of their
partner
• Do NOT automatically enjoy welfare benefits or dependent
status arising from partner’s employment
• However, in case of life insurance, if the partner is validly
designated as the beneficiary by the other, he/she is entitled to
the insurance proceeds arising from the life insurance of the
other.
• Have NO right to use the surname of the other partner [Silva v.

64
 Peralta (1960)].
• Have NO right to make funeral arrangements for the deceased
• The right to make funeral arrangements for the deceased
remains with the surviving legal wife, notwithstanding their
30 year separation [Valino v. Adriano (2014)].
• Are NOT allowed to adopt jointly
• CAN NOT exercise parental authority over the child of the
other

C. MARRIAGE
Marriage
a. A special contract of permanent union;
b. Between a man and a woman;
c. Entered into in accordance with law;
d. For the establishment of conjugal and family life.
e. It is the foundation of the family and an inviolable social institution;
f. Its nature, consequences, and incidents are governed by law and not
subject to stipulation,

Exception: Marriage settlements may fix the property relations during the
marriage, within the limits provided by this Code. [Art. 1, FC.]

Marriage is an institution, the maintenance of which the public is deeply

interested. It is a relation for life and the parties cannot terminate it at any
shorter period by virtue of any contract they may make. The reciprocal rights
arising from this relation, so long as it continues, are such as the law
determines from time to time, and none other. [Goitia v. Campos Rueda,
G.R. No. 11263 (1916)]

1. Requisites
Essential Requisites [Art. 2, FC]
2. Legal capacity of the contracting parties, who must be a male and a
female; and
3. Consent (of the contracting parties) freely given in the presence of a
solemnizing officer.

Formal Requisites [Art. 3, FC]

1. Authority of solemnizing officer (subject to Art. 35(2), FC)
2. A valid marriage license (subject to exceptions)
3. Marriage ceremony

Effect of Absence or Defect/Irregularity of the Requisites on the

Marriage [Art. 4, FC]
Absence Defect or Irregularity
Essential Void Voidable

65
 Formal Void No effect, but makes the party responsible
for such irregularity civilly, criminally or
administratively liable
Note: The term “defect” is used for essential requisites while “irregularity”
is used for formal requisites.

a. Essential Requisites

1. Gender

N.B. The best source for citing the requirement of male/female is still
statutory, as provided explicitly in the Family Code: Art. 1, FC.
Marriage is a special contract of permanent union between a man and a
woman…

Sex is determined at birth; marriage between two people who had the same
sex at birth is invalid even if one changes sex by law. [Republic v.
Cagandahan, G.R. No. 166676 (2008)]

Changing of sex in one’s birth certificate on the basis of sex reassignment

shall be denied; otherwise, it would result in confusion and would allow
marriage between persons of the same sex which is in defiance of the law, as
marriage is a union between a man and a woman. [Silverio v. Republic, G.R.
No. 174689 (2007)]

But when the change in sex happens naturally, as when the person has
Congenital Adrenal Hyperplasia (CAH) or is “biologically or naturally
intersex,” the determining factor in their gender classification would be what
they, having reached the age of majority, with good reason thinks is their
sex. Change in name and sex as registered is here allowed. [Republic v.
Cagandahan, G.R. No. 166676 (2008)]

2. Age

Legal Capacity
Art. 5, FC. 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.

OTHER IMPEDIMENTS REFERENCED:

Art. 37, FC: Incestuous marriages

a. Between ascendants and descendants of any degree; and
b. Between brothers and sisters, whether of the full or half blood. Art. 38,
FC: Void for public policy
a. Between collateral blood relatives, whether legitimate or illegitimate, up
to the fourth civil degree;
b. Between step-parents and step-children;

66
c. Between parents-in-law and children-inlaw;
d. Between the adopting parent and the adopted child;
e. Between the surviving spouse of the adopting parent and the adopted
child;
f. Between the surviving spouse of the adopted child and the adopter;
g. Between an adopted child and a legitimate child of the adopter;
h. Between adopted children of the same adopter; and
i. Between parties where one, with the intention to marry the other, killed
that other person's spouse or his or her own spouse.

LIMITED EMANCIPATION:

a. Parental Consent: Needed for parties between 18 to below 21 years old,

given by their father, mother, surviving parent or guardian, or persons
having legal charge of them, in the order mentioned. [Art. 14, FC]

If no parental consent is obtained, it makes the marriage voidable [Art. 45,

FC].

b. Parental Advice: Needed for parties 21 to below 25 years old.

However, absence of such does not make the marriage void or voidable.
Absence will merely delay the issuance of the marriage license by three
months [Art 15, FC].

3. Consent Freely Given

Consent here refers to the consent of the contracting parties. The consent
must refer to the contracting parties’ bona fide intention to be married to the
other. i.e. to make the woman his wife. [People v. Santiago, G.R. No. 27972
(1927)]

In People v. Santiago, it was held that the marriage entered into by a person
whose real intent is to avoid prosecution for rape is void for total lack of
consent. Here, it was the intent of the accused—not the victim of rape,
whom he married under duress—that was considered. The accused did not
intend to make the victim his wife. He merely used such marriage to escape
criminal liability. [G.R. No. 27972 (1927)]

Absence of consent renders the marriage void while defective consent makes
it voidable [Art. 4, FC].

Situation Consent Status of

Marriage
Either party was of unsound mind Vitiated/ Voidable
[Art. 45 (2), FC] Defective
Mistake as to the identity of the Absent Void
other party [Art. 35 (5), FC] e.g. if

67
 one mistakenly marries his fiancee's
twin [Tolentino]
Mistake as to the legal Absent Void
consequences and nature of the
marriage ceremony e.g. thinking the
ceremony is a joke, pretend, or
playacting [Tolentino]
Consent was obtained by fraud: Vitiated/ Voidable
1. Non-disclosure of previous Defective
conviction of crime of moral
turpitude
2. Concealment of pregnancy by
another man
3. Concealment of STD
4. Concealment of drug addiction,
habitual alcoholism, homosexuality,
or lesbianism [Art. 46, FC]
Consent was obtained by Vitiated/ Voidable
1. Force Defective
2. Intimidation
3. Undue Influence [Art. 45 (4), FC]
Marriage entered into by a person Absent Void
whose real intent is to avoid
prosecution for rape [People v.
Santiago, G.R. No. 27972 (1927)]
Note: Defects in consent are discussed further in “Voidable or Annullable
Marriages.”

4. No Subsisting Marriage

A judicial decree terminating the previous marriage is required for

remarriage.

b. Formal Requisites

1. Marriage Ceremony

No prescribed form or religious rite for the solemnization of marriage is

required. [Art. 6, FC]

The couple's written agreement where they declare themselves as husband

and wife, signed by them before a judge and two capable witnesses, even
though it was independently made by them, still counts as a valid ceremony.
[Martinez v. Tan, G.R. No. L-4904 (1909)]

Minimum Requirements Prescribed by Law:

a. Appearance of contracting parties personally before the solemnizing

68
officer. [Art. 3, FC]
b. Personal declaration that they take each other as husband and wife. [Art.
3, FC]
c. Presence of at least two witnesses of legal age. [Art. 3, FC]
d. The declaration shall be contained in the Marriage Certificate. [Art. 6,
FC]
e. Marriage certificate shall be signed by the contracting parties and their
witnesses and attested by the solemnizing officer. [Art. 6, FC]

N.B. In a marriage in articulo mortis, when one or both parties are unable to
sign the marriage certificate, it shall be sufficient for one of the witnesses to
write the name of said party, which shall be attested by the solemnizing
officer. [par. 2, Art. 6. FC]

Places where marriage shall be publicly solemnized:

a. Chambers of the judge or in open court
b. Church, chapel, or temple
c. Office of the consul-general, consul, or vice-consul [Art. 8, FC]

Exceptions to public solemnization requirement

a. Marriages performed in articulo mortis or in remote places. [Art. 29, FC]
b. Where both parties request in writing that marriage be solemnized at a
place designated by them.

Note: Non-compliance with this requirement does not invalidate the

marriage (premise: more witnesses = more people can notify officer of
impediments to marriage).

2. Authority of Solemnizing Officer

Who May Solemnize Marriage:

Normal Circumstances
Incumbent member of the Judiciary, within his jurisdiction. [Art. 7, FC]
Priest, Rabbi, Imam or Minister of any Church or Religious Sect who must
be:
a. Duly authorized by his church or religious sect;
b. Registered with the civil registrar general;
c. Acting within the limits of the written authority granted to him by
his church or religious sect;
3. d. At least one of the contracting parties belongs to the solemnizing
officer’s church or religious sect. [Art. 7, FC]
Municipal and City Mayors [Secs. 444-445, Local Government Code

Articulo Mortis
(in addition to those above mentioned)
Ship Captain or Airplane Chief may solemnize a marriage in articulo
mortis between passengers or crew members [Arts. 7 and 31, FC]

69
 A Military Commander of a unit may solemnize marriages in articulo
mortis between persons within the zone of military operation in the
absence of a chaplain [Arts. 7 and 32, FC]
Marriages Abroad
Consul-general, consul or vice-consul may solemnize marriages between
Filipino citizens abroad [Arts. 7 and 10, FC]

General rule: Those solemnized by any person not legally authorized to

perform marriages are void.

Exception: 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. [Art. 35(2), FC]

Good faith refers to questions of fact, not ignorance of the law (e.g. they did
not know the priest’s license expired vs. thinking a Senator could solemnize
their marriage). [Legarda, Deriquito-Mawis, and Vargas]

Note: An irregularity in a formal requisite will not affect the validity of the
marriage but those responsible may be held criminally, civilly, and
administratively liable [Art. 4 & 7, FC]

4. Marriage License

General rule: The license required is that which is issued by local registrar
of city or municipality where either contracting party habitually resides [Art.
9, FC].

Note: No marriage license shall be issued by the Local Civil Registrar unless
the applicants present a Certificate of Compliance issued for free by the
local Family Planning Office certifying that they had duly received adequate
instructions and information on responsible parenthood, family planning,
breastfeeding and infant nutrition [RA 10354, Sec. 15].

Determination of Age
General rule: The local civil registrar shall require presentation of:
a. Original birth certificates, or
b. Baptismal certificates

Exception: If parents appear personally or when the local civil registrar is

convinced that the parties are of the required age.

Where Valid: License valid in any part of the Philippines

Period of Validity: It will be valid for 120 days from date of issue,
automatically cancelled at the expiration of such period.

Marriages celebrated without a marriage license before the effectivity of the

70
Family Code are void ab initio as marriage license was an essential requisite
in the CC. [Kho v. Republic, G.R. No. 147862 (2016)]

A marriage which preceded the issuance of the marriage license is void and
the subsequent issuance of such license cannot render valid the marriage.
Except in cases provided by law, it is the marriage license that gives the
solemnizing officer the authority to solemnize a marriage. [Aranes v.
Occiano, MTJ-02-1390 (2002)].

Special Situations
If the party has been previously married, s/he shall furnish, instead of birth
or baptismal certificate:
a. Death certificate of deceased spouse (if cannot be obtained, the party shall
make an affidavit setting forth this circumstance, his/her actual civil status
and name and date of death of deceased spouse), or
b. Judicial decree of the absolute divorce, or
c. Judicial decree of annulment, or
d. Declaration of nullity of previous marriage [Art. 13, FC]

Foreign National
a. When either or both parties are foreign nationals: Certificate of legal
capacity to contract marriage issued by a diplomatic or consular official,
shall be submitted before a marriage license can be obtained [Art. 21, FC]
b. Stateless persons or refugees from other countries: Affidavit stating
circumstances showing capacity to
contract marriage, instead of certificate of legal capacity [Art. 21, FC]

Note: The Apostille Convention, which took effect in the PH on 14 May

2019, simplifies the authentication of foreign documents. Public documents
executed in Apostille-contracting countries, once Apostillized, no longer
need authentication from the Philippine embassy or consulate general. In the
same way, PH documents Apostillized by the DFA need not be
authenticated by Foreign embassies or consulate generals if the country is a
member of the convention. [DFA Public Advisory]

Exceptions to the Marriage License Requirement

a. Marriage in articulo mortis [Art. 27, FC]
The marriage may be solemnized without the necessity of a marriage
license. It remains valid even if ailing party survives.
1. Between passengers or crew members in a ship or airplane
[Art. 31, FC]
2. Persons within a military zone [Art. 32, FC]
3. Other situations in articulo mortis
b. Marriage in remote and inaccessible places [Art. 28, FC]
c. Marriages by Muslims and Ethnic cultural minorities provided they are
solemnized in accordance with their customs, rites or practices. [Art. 33, FC]
d. Marriage by parties who have cohabited for at least 5 years without

71
any legal impediment to marry each other. [Art. 34, FC; Ninal v. Badayog,
G.R. No. 133778 (2000)]

Note: A false affidavit of having lived together for 5 years as husband and
wife cannot be considered as a mere irregularity in the formal requisites of
marriage but a complete absence, rendering their marriage void ab initio.
[De Castro v. Assidao-De Castro, G.R. No. 160172 (2008)]

Requisites for the 5-year cohabitation to be valid for the exemption

from acquiring a marriage license
a. The man and woman must have been living together as husband and wife
for at least five years before the marriage;
b. The parties must have no legal impediment to marry each other;
c. The fact of absence of legal impediment between the parties must be
present at the time of marriage;
d. The parties must execute an affidavit stating that they have lived together
for at least five years [and are without legal impediment to marry each
other]; and
e. The solemnizing officer must execute a sworn statement that he had
ascertained the qualifications of the parties and that he had found no legal
impediment to their marriage [Borja-Manzano v. Judge Sanchez, A.M. MTJ-
00-1329 (2001)].

5. Marriage Certificate

Where parties declare that they take each other as husband and wife;
contains the following:
a. Full name, sex, age of party;
b. Citizenship, religion, habitual residence;
c. Date and precise time of celebration of marriage;
d. That marriage license was properly issued (except in marriages of
exceptional character);
e. That parental consent was secured, when required;
f. That requirement as to parental advice was complied with, when required;
g. That parties have entered into marriage settlements, if any [Art. 22, FC]

N.B. Not an essential or formal requisite without which the marriage will be
void [Madridejo v. de Leon, G.R. No. L-32473 (1930)]. It is the best
evidence that a marriage does exist. [Tenebro v. CA, G.R. No. 150758
(2004)]

Non-existence of a marriage contract will not overthrow the presumption of

a valid marriage where all the requisites for its validity have been complied
with. [People v. Borromeo, G.R. No. L-61873 (1984)]

2. Marriages celebrated abroad

General Rule: Marriages solemnized abroad in accordance with the laws in

72
force in that country shall be valid in the Philippines. [par. 1, Art 26, FC]

Exceptions
1. Marriage where one or both parties are below 18 years old [Art. 35(1),
FC]
2. Bigamous or polygamous marriage [Art. 35(4), FC]
3. Mistake in identity [Art. 35 (5), FC]
4. Marriages void under Article 53 [Art. 35 (6), FC]
5. Psychological incapacity [Art. 36, FC]
6. Incestuous marriages [Art. 37, FC]
7. Marriage void for reasons of public policy [Art. 38, FC]

Note: This means that the foreign marriage may still be recognized as valid
in the Philippines even if it would have fallen under Art. 35 (2 and 3) of the
FC so long as it is valid under the law of the country in which it was
solemnized.

Essential Requisites Formal Requisites

Inherent in the parties, carried Requirements
everywhere independent of the
parties
Lex Nationalii – Laws relating to Lex loci celebrationis – If valid
family rights and where celebrated, then valid
duties, or to the status, condition, everywhere; forms of contracting
and legal capacity of persons are marriage are to be regulated by the
binding upon PH citizens even law where it is celebrated. [Art. 2,
though living abroad [Art. 15, CC] CC]
Foreign marriages void under PH Foreign marriages may be void
law due to lack of an essential under PH law due to absence of a
requisite, even if valid under formal requisite under foreign laws.
foreign laws, will not be
recognized.

Proof of Foreign Marriage in order that it may be upheld:

1. Provisions of the foreign law, and
2. Celebration of the marriage in accordance with said provisions

3. Foreign divorce
If the foreign spouse obtains a valid divorce decree abroad capacitating
him/her to remarry, the Filipino spouse shall have capacity to remarry under
Philippine law. [Art. 26(2), FC]

The citizenship of the spouses at the time of the divorce determines their
capacity to obtain a valid divorce. [Quita v. Dandan, G.R. No. 124862
(1998)]

A marriage between two Filipinos cannot be dissolved even by a divorce

73
obtained abroad, because of Articles 15 and 17 of the CC [Garcia v. Recio,
G.R. No. 138322 (2001)].

Question: Since it is the citizenship at the time of the divorce that determines
capacity to obtain a valid divorce, can spouses who are both dual citizens
(Filipino & Alien) get divorced? What about if both spouses were originally
Filipino, were later naturalized (i.e. lost their Filipino citizenship), and even
later regained their Filipino citizenship and are now dual citizens?

Aliens may obtain divorces abroad, which may be recognized in the

Philippines, provided they are valid according to their national law. The
marriage tie when thus severed as to one party, ceases to bind either. [Van
Dorn v. Romillo, G.R. No. L-68470 (1985)]

A divorce obtained abroad by a couple, who are both aliens, may be

recognized in the Philippines, provided it is consistent with their respective
national laws. [Garcia v. Recio, G.R. No. 138322 (2001)]

Note: Divorces obtained abroad by Filipino citizens may now be validly

recognized in the Philippines but only in cases of mixed marriages involving
a Filipino and a foreigner. [Republic of the Philippines v. Manalo, G.R. No.
221029 (2018)]

In mixed marriages involving a Filipino and a foreigner, Article 26 of the

Family Code allows the former to contract a subsequent marriage in case the
divorce is (1) “validly obtained abroad by the alien spouse and (2) is of the
type that legally dissolves the marriage and capacitating him or her to
remarry.” [Garcia v. Recio, G.R. No. 138322 (2001)]

Note: Following the ruling of Republic of the Philippines v. Manalo, the

divorce may now be one that was validly obtained by the Filipino spouse
against the foreigner spouse. This is because Art. 26(2), FC makes no
distinction as to who obtains the divorce. All that is required is that it is
validly obtained abroad. A Filipino who initiates the divorce proceeding
against a foreign spouse still ends up in the same position as one whose
foreign spouse initiated proceedings: they both no longer have spouses.
There should be no distinction between the two cases in order to avoid the
absurd situation where a Filipino spouse is still married to the alien spouse
even though the latter is capacitated by his own laws to remarry and is no
longer married to the Filipino. [G.R. No. 221029 (2018)].

Courts will only determine (1) whether the foreign judgment is inconsistent
with an overriding public policy in the Philippines; and (2) whether any
alleging party is able to prove an extrinsic ground to repel the foreign
judgment, i.e. want of jurisdiction, want of notice to the party, collusion,
fraud, or clear mistake of law or fact. If there is neither inconsistency with
public policy nor adequate proof to repel the judgment, Philippine courts

74
should, by default, recognize the foreign judgment as part of the comity of
nations. [Fujiki v. Marinay, G.R. No. 1196049 (2013)]

4. Void marriages
Types of void marriages
1. Absence of any formal/essential requisites [Art. 35, FC]
2. Bigamous and polygamous marriages [Art. 35, (4)]
3. Subsequent marriage, upon reappearance of spouse [Art. 42, FC]
4. Bad faith of both spouses in the subsequent marriage under Art. 41, FC
5. Psychologically Incapacitated spouse [Art. 36, FC]
6. Void subsequent marriages [Art. 35(6), FC]
7. Incestuous Marriages [Art. 37, FC]
8. Void by reasons of public policy [Art. 38, FC]

Art. 39, FC. The action or defense for the declaration of absolute nullity
shall not prescribe. (as amended by RA 8533)

a. Absence of Requisites

Void from the Beginning [Art. 35, FC]

a. Marriage where any party is below eighteen years of age even with
the consent of parents or guardians

b. Marriage 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
legal authority to do so.

Note: One’s belief in good faith that the solemnizing officer has the required
authority is a mistake of fact, and not of law.

c. Marriage solemnized without a valid marriage license, except in

marriages under exceptional circumstances

d. Bigamous or polygamous marriages not falling under Article 41

(Art. 41: Subsequent marriage by present spouse who obtained a
declaration of presumptive death for absent spouse prior to the
subsequent marriage)

e. There is a mistake as to the identity of the other contracting party

f. Subsequent marriages that are void under Article 53 (Non-

compliance with Art. 52)

To be considered void on the ground of absence of a marriage license, the

law requires that the absence of such marriage license must be apparent on
the marriage contract, or at the very least, supported by a certification from
the local civil registrar that no such marriage license was issued to the

75
parties. [Alcantara v. Alcantara, G.R. No. 167746 (2007)]

b. Bigamous and Polygamous Marriages

Elements of a Bigamous Marriage

a. Offender legally married
b. Marriage not legally dissolved
c. Offender contracts a subsequent marriage
d. Subsequent marriage has all the essential requisites for validity, except
legal capacity [Capili v. People, G.R. No. 183805, (2013)]

No judicial declaration of nullity

A person entered into a subsequent marriage WITHOUT first getting a
judicial declaration of nullity of the first void marriage. [Art. 40, FC]

Presumptive death
Failure of the spouse present to obtain a judicial declaration of presumptive
death before entering a subsequent marriage. [Art. 41, FC]

Bad faith of both spouses

Both spouses entering a subsequent marriage after presumptive death, who
acted in bad faith. [Art. 44, FC]

It is now settled that the fact that the first marriage is void from the
beginning is not a defense in a bigamy charge. As with a voidable marriage,
there must be a judicial declaration of the nullity of a marriage before
contracting the second marriage. [Mercado v. Tan, G.R. No. 137110 (2000)]

The accused may still be charged with the crime of bigamy, even if there is a
subsequent declaration of the nullity of the second marriage, so long as the
first marriage was still subsisting when the second marriage was celebrated.
[Capili v. People, G.R. No. 183805 (2013)]

c. Subsequent Marriage When One Spouse is Absent

Requirements for Subsequent Marriage to be Valid When Prior Spouse

is Absent [Art. 41, FC]
a. Subsequent marriage due to ordinary absence where:
1. Absent spouse had been absent for 4 consecutive years;
2. The spouse present had a wellfounded belief that the absent spouse
is dead; and
3. Judicial declaration of presumptive death was secured (no
prejudice to the effect of the reappearance of the absent spouse).
b. Subsequent marriage due to extraordinary absence where:
1. Absent spouse had been missing for 2 consecutive years;
2. There is danger of death under the circumstances set forth in Art.
391, CC attendant to the disappearance;

76
 o Onboard vessel lost at sea voyage, airplane,
o Armed forces in war, or o Danger of death under other circumstances,
existence not known
3. The spouse present had a wellfounded belief that the missing person
is dead; and
4. Judicial declaration of presumptive death was secured (no
prejudice to the effect of the reappearance of the absent spouse).

The belief of the present spouse must be the result of proper and honest to
goodness inquiries and efforts to ascertain the whereabouts of the absent
spouse and whether the absent spouse is still alive or is already dead. This is
drawn from circumstances before and after the disappearance and the nature
and extent of inquiries made. [Republic v. Granada, G.R. No. 187592
(2012)]

Effect of Reappearance of Absent Spouse

General rule: The subsequent marriage remains valid.

Exception: It is automatically terminated by the recording of the affidavit

of reappearance of the absent spouse at the instance of any interested person,
with due notice to the spouses of the subsequent marriage. [Art. 42, FC]

Note: It is the recording of the affidavit of reappearance that automatically

terminates the subsequent marriage. Hence, if absentee spouse reappears
without recording affidavit of reappearance, then there is no legal effect.
Meanwhile, absentee spouse cannot remarry. [Tolentino]

Exception to the Exception: If there is a judgment annulling the previous

marriage or declaring it void ab initio. [Art. 42, FC]

Good faith: Period of absence for presumptive death is MANDATORY and

thus cannot be shortened by good faith and if done so, will be void. This
period is counted from when the party last heard from his/her absentee
spouse. [Jones v. Hortiguela, G.R. No. 43701 (1937)]

Difference between Absence in the CC and Family Code

Family Code [Art. 41] CC [Art. 390]
As to period 4 years under normal Absent for at least 7
circumstances years
2 years under extraordinary Absent for at least 4
circumstances years
As to remarriage In order to remarry, Declaration of
summary proceeding is presumptive death is not
necessary necessary
As to who can Can be instituted by the The spouses
institute the spouse present, any themselves
action interested party, and the

77
 subsequent spouse
As to effect on Subsequent marriage is Upon reappearance,
subsequent automatically terminated by judicial proceeding is
marriage the recording of an affidavit necessary to declare
of reappearance of the marriage null and void
absent spouse
As to ground Well-founded belief that the Generally believed to be
absent spouse is dead dead

Related Provisions
Art. 390, CC. After an absence of 7 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 10 years. If he disappeared after the age
of 75 years, an absence of 5 years shall be sufficient in order that his
succession may be opened.

The following shall be presumed dead for all purposes, including the
division of the estate among the heirs:
a. 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;
b. A person in the armed forces who has taken part in war, and has been
missing for four years;
c. A person who has been in danger of death under other circumstances
and his existence has not been known for four years. [Art. 391, CC]

N.B. Although 7 years is required for the presumption of death of an

absentee in the CC, the FC makes an exception for the purpose of remarriage
by limiting such requirement to 4 years.

d. Bad Faith of Both Spouses

Art. 44, FC. 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.

e. Psychological Incapacity

Art. 36, FC. 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.

78
 Psychological Incapacity Vice of Consent
Has nothing to do with consent, but The consent itself is defective
the incapacity to comply with the
essential marital obligations of
marriage

Psychological Incapacity Insanity

Consent might be valid, but the party Vice of consent
is unable to assume essential marital
obligations
Ground for nullity Ground for annulment

The application of Art. 36 is confined to the most serious cases of

personality disorders clearly demonstrative of an utter insensitivity or
nability to give meaning and significance to the marriage. [Santos v. CA,
G.R. No. 112019 (1995)]

The psychological illness that must have afflicted a party at the inception
of the marriage should be a malady so grave and permanent as to deprive
one of awareness of the duties and responsibilities of the matrimonial
bond he or she is about to assume. [Marcos v. Marcos, G.R. No. 136490
(2000)]

There are 3 characteristics for determining psychological incapacity:

a. Gravity - grave or serious such that the party cannot carry out normal and
ordinary duties of marriage under ordinary circumstances;
b. Juridical Antecedence - it must be rooted in the history of the party before
the marriage; and
c. Incurability - must be incurable OR the cure is beyond the means of the
party [Santos v. Bedia-Santos, G.R. No. 112019 (1995)]

Molina Doctrine in Psychological Incapacity

a. The burden of proof to show the nullity of the marriage
belongs to the plaintiff. This is to be investigated by the OSG
for collusion.
b. The root cause of the psychological incapacity must be:
1. Medically or clinically identified;
2. Alleged in the complaint;
3. Sufficiently proven by the experts; and
4. Clearly explained in the decision.
c. The incapacity must be proven to be existing at “the time of
the celebration” of the marriage.
d. Such incapacity must also be shown to be medically or
clinically permanent or incurable.
e. Such illness must be grave enough to bring about the disability
of the party to assume the essential obligations of marriage.

79
 f. The essential marital obligations must be those embraced by
Articles 68 up to 71 of the Family Code as regards the husband
and wife as well as Articles 220, 221, and 225 of the same Code
in regard to parents and their children.
g. Interpretations given by the National Appellate
Matrimonial Tribunal of the Catholic Church in the
Philippines, while not controlling/decisive, should be given
great respect by our courts.
h. The trial court must order the prosecuting attorney or fiscal
and the Solicitor General to appear as counsel for the state.
No decision shall be handed down unless the Solicitor General
issues a certification. [Republic v. Molina, G.R. No. 108763
(1997)]

Psychological incapacity may be established by the totality of the evidence

presented. Personal medical examination could be dispensed with. [Marcos
v. Marcos, G.R. No. 136490 (2000)]

There is no requirement that the respondent be medically examined first.

[Republic v. San Jose, G.R. No. 168328 (2007)]

The stringent requirements set forth by Molina should be relaxed and

applied case-to-case.

To require the allegation of the root cause of psychological incapacity by an

accredited psychologist may prove too expensive for the parties. But where
the parties had full opportunity to present expert opinions, such will be
weighed by the Court in its decision. [Ting v. Velez-Ting, G.R. No. 166562,
(2009)]

Examples of Psychological Incapacity

The senseless and protracted refusal of one of the parties to fulfill the marital
obligation "to procreate children based on the universal principle that
procreation of children through sexual cooperation is the basic end of
marriage," is equivalent to psychological incapacity. “A man who can but
won’t is psychologically incapacitated.” [Tsoi v. CA, G.R. No. 119190
(1997)]

“Pathological liar” considered as psychological incapacity; Molina

guidelines met. [Antonio v. Reyes, G.R. No. 155800 (2006)]

Note: This case also gave weight to the fact that the Church annulled the
marriage. Marriages where both parties are afflicted with grave, severe, and
incurable psychological incapacity shall likewise be void [Te v. Te, G.R. No.
161793 (2009)].

80
Note: Both spouses have personality disorders.

f. Incestuous Marriage

Marriages between the following are considered incestuous, and are

therefore void ab initio:
a. Between ascendants and descendants of any degree, legitimate or
illegitimate
b. Between brothers and sisters, whether full or half blood, legitimate or
illegitimate [Art. 37, FC]

g. Against Public Policy

Marriages between the following are considered against public policy,

and are therefore void ab initio:
a. Between collateral blood relatives, legitimate or illegitimate, up to the
fourth civil degree;

b. Between step-parents and step-children; N.B. Stepbrothers and

stepsisters can marry because marriages between them are not among
those enumerated in Article 38.

c. Between parents-in-law and children-in-law;

d. Between adopting parent and adopted child;

e. Between the surviving spouse of the adopting parent and the adopted
child;

f. Between the surviving spouse of the adopted child and the adopter;

g. Between an adopted child and a legitimate child of the adopter;

h. Between adopted children of the same adopter; and

i. Between parties where one, with the intention to marry the other,
killed that other person's spouse, or his or her own spouse [Art. 38,
FC]

Note: The following relationships are outside of Articles 37 and 38, and are
therefore not impediments to marriage:
a. Brother-in-law with sister-in-law;
b. Stepbrother with stepsister;
c. Guardian with ward;
d. Adopted with illegitimate child of the adopter;
e. Adopted son of the husband with adopted daughter of the wife.

h. Non-Compliance with Recording Requirement after Declaration

of Nullity

81
Subsequent marriage of spouses, where the requirements of recording under
Art. 52 have not been complied with, shall be null and void. [Art. 53, FC]

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. [Art. 52, FC]

Under the CC, no judicial declaration for nullity of previous marriage was
required to contract a subsequent marriage. [People v. Mendoza, G.R. No. L-
5877 (1954)]

EFFECTS OF TERMINATION OF SUBSEQUENT MARRIAGE

UNDER ART. 42 [Art. 43, FC]
a. Children of subsequent marriage: conceived prior to its termination
considered legitimate; custody and support decided by court in a
proper proceeding.
b. Property Regime: dissolved and liquidated (party in bad faith shall
forfeit his/her share in favor of the common children or if there are
none, children of the guilty spouse by a previous marriage, and in case
there are none, to the innocent spouse).
c. Donation propter nuptias: remains valid, (but if the donee contracted
marriage in bad faith, donations are revoked by operation of law)
d. Insurance benefits: innocent spouse may revoke designation of guilty
party as beneficiary, even if such designation is stipulated as
irrevocable.
e. Succession Rights: party in bad faith shall be disqualified to inherit
from the innocent spouse, whether testate or intestate.

Both spouses guilty of bad faith

If both spouses of the subsequent marriage acted in bad faith, all donations
by reason of marriage and testamentary dispositions made by one party in
favor of the other are revoked by operation of law. [Art. 44, FC]

Who may file the petition for nullity of void marriages?

General Rule: Only the husband or wife may file the petition. [AM No. 02-
11-10 SC, Sec. 2]

Specifically, A.M. No. 02-11-10-SC extends only to marriages covered by

the Family Code, which took effect on August 3, 1988, but, being a
procedural rule that is prospective in application, is confined only to
proceedings commenced after March 15, 2003. [Ablaza v. Republic, G.R.
No 158298 (2010)]

Exceptions

82
a. Nullity of marriage cases commenced before effectivity of A.M. No. 02-
11-10-SC
b. Marriages celebrated during the effectivity of the CC. [Carlos v.
Sandoval, G.R. No 179922 (2008)]

Procedure in Attacking a Void Marriage

General Rule: Void Marriages may be attacked collaterally or directly.

Exception: A person in a void marriage must first file for a declaration of

nullity in order to subsequently marry.

Requisites for Valid Remarriage

a. The previous marriage should be judicially declared void or annulled
(final judgment) [Terre v. Terre, A.M. No. 2349 (1992), Atienza v.
Brillantes, A.M. No. MTJ-92-706 (1995)]; Wiegel v. Sempio-Dy, G.R. No.
L- 53703 (1986)].
b. Must comply with the requirements of Art. 52, FC.

Art. 52, FC. 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.

Safeguard Against Collusion and No Confession of Judgment

In the cases referred to in the preceding paragraph, no judgment shall be
based upon a stipulation of facts or confession of judgment. [Art. 48 (2), FC]

Stipulation of Facts
An admission by both parties after agreeing to the existence of any of the
grounds or facts that would constitute a void/voidable marriage.

Confession of Judgment
The admission by one party admitting his/her fault to cause the invalidity of
the marriage. Although the admission of guilt of the wife constitutes a
confession of judgment, the husband was also able to present other evidence
to support the allegation. Hence, there was no collusion. [Ocampo v.
Florenciano, G.R. No. L-13553 (1960)]

Participation of the OSG

The obvious intent of the AM 02-11-10-SC was to require the OSG to
appear as counsel for the State in the capacity of a defensor vinculi (i.e.,
defender of the marital bond) to oppose petitions for, and to appeal
judgments in favor of declarations of nullity of marriage under Article 36 of
the Family Code, thereby ensuring that only the meritorious cases for the
declaration of nullity of marriages based on psychological incapacity-those
sufficiently evidenced by gravity, incurability and juridical antecedence-

83
would succeed. [Mendoza v. Republic, G.R. No. 157649 (2012)]

No Motion to Dismiss
AM 02-11-10-SC Sec. 7 prohibits the filing of a motion to dismiss in actions
for annulment of marriage. [Aurelio v. Aurelio, G.R. No. 175367 (2011)]

Effect of pendency of action for declaration of nullity:

a. The court shall provide for the support of the spouses.
b. The custody and support of the common children, giving paramount
consideration to their moral and material welfare, their choice of
parent with whom they wish to remain.
c. The court shall also provide for visitation rights of the other parent.
[Art. 49, FC]

Effect of Res Judicata

Suffice it to state that parties are bound not only as regards every matter
offered and received to sustain or defeat their claims or demand but as to any
other admissible matter which might have been offered for that purpose and
of all other matters that could have been adjudged in that case. [Mallion v.
Alcantara, G.R. No. 141528 (2006)]

Effect of Final Judgment Declaring Nullity

The effects provided for by paragraphs (2), (3), (4) and (5) of Article 43 and
by Article 44 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 [Art. 50(1), FC].

Final judgment in such cases shall provide for:

a. Liquidation, partition, and distribution of the properties of the spouses
b. Custody and support of the common children
c. Delivery of their presumptive legitimes
UNLESS: such matters had been adjudicated in previous judicial
proceedings. [Art. 50(2), FC]

All creditors of the spouses/property regime shall be notified of the

proceedings for liquidation [Art. 50(2 and 3), FC]

In the partition, the conjugal dwelling and lot shall be adjudicated to the
spouse with whom majority of the common children remain [Art. 102 and
129, Art. 50(4), FC]

Generally, children born or conceived within void marriages are

illegitimate.

Exceptions
a. Children conceived or born before the judgment under Article 36 has
become final and executory [Art. 54, FC]

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b. Children conceived or born of subsequent marriages under Article 53
[Art. 54, FC]

5. Voidable marriages
Art. 4, FC states that “xxx A defect in any of the essential requisites shall
render the marriage voidable as provided in Article 45.”

Grounds for annulment that must exist at the time of the marriage [Art.
45, FC]
a. 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;
b. Either party was of unsound mind, UNLESS such party after
coming to reason, freely cohabited with the other as husband and
wife;
c. 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;
d. 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;
e. Either party was physically incapable of consummating the
marriage with the other, and such incapacity continues and appears to
be incurable; or
f. Either party was afflicted with a sexually transmissible disease
found to be serious and appears to be incurable.

Nature of an Action for Annulment

Action in rem, concerns status of parties; res is relation between parties or
marriage tie; jurisdiction depends on nationality or domicile not the place of
celebration.

a. Lack of Parental Consent

Article 45(1) provides the first ground for a voidable marriage, which is the
solemnization of a marriage of a party between 18-21 years of age without
the consent of their parents.

Note: Art. 14, FC states that 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:

85
a. Exhibit to the local civil registrar the consent to their marriage of their
father, mother, surviving parent or guardian, or persons having legal charge
of them, in the order mentioned
1. Manifested in writing by the interested party, who personally appears
before the proper local civil registrar, or
2. In the form of an affidavit made in the presence of two witnesses and
attested before any official authorized by law to administer oaths
b. Record such personal manifestation in both applications for marriage
license, and the affidavit, if one is executed instead, shall be attached to said
applications.

May be ratified by the party 18 or above but below 21 upon free

cohabitation upon reaching 21.

b. Insanity

Article 45(2) provides the second ground for a voidable marriage, which is a
marriage entered into by an insane party or a person of unsound mind.

Test of Insanity: Whether the party at the time of marriage was capable of
understanding the nature and consequences of marriage itself [Sempio-Diy]

Mental incapacity or insanity is a vice of consent. It can be ratified by

cohabitation after insanity is cured or during a lucid interval.

Mere mental weakness is not a ground for annulment, but if found grave
enough, it may amount to psychological incapacity.

Intoxication amounting to lack of mental capacity as well as somnambulism

are considered unsoundness of mind, as there was no knowledge of what he
or she was giving consent to. [Tolentino]

Must exist at the time of the celebration of the marriage. Insanity that occurs
after the celebration of marriage does not constitute acause for nullity
[Katipunan v. Tenorio, G.R.No. 43442 (1937)]

c. Fraud

Article 45(3) provides the third ground for a voidable marriage, wherein
consent to the marriage was obtained through fraud. The party who was the
victim of the fraud may, however, ratify the detect in the marriage by
voluntarily cohabiting with the party after knowledge of the facts
constituting the fraud.

Art. 46, FC. Any of the following circumstances shall constitute fraud
referred to in No. 3 of the preceding Article:
1. Non-disclosure of a previous conviction by final judgment of the
other party of a crime involving moral turpitude;

86
 2. Concealment by the wife of the fact that at the time of marriage, she
was pregnant by a man other than her husband;
3. Concealment of sexually transmissible disease, regardless of its
nature, existing at the time of marriage; or
4. Concealment of drug addiction, habitual alcoholism or
homosexuality or lesbianism existing at the time of marriage.
No other misrepresentation or deceit as to character, health, rank, fortune
or chastity shall constitute such fraud as will give grounds for the action of
annulment of marriage.

Note: The enumeration of the grounds for annulment under Art. 46 for
reasons of fraud or vice of consent is exclusive. No other misrepresentation
or deceit of character, health, rank, fortune or chastity shall constitute fraud.

Non-disclosure of conviction of crime involving moral turpitude

1. The crime must involve moral turpitude, or “Conduct that is contrary to
justice, honesty, and morality” [Black’s Law Dictionary].
2. Must be convicted by final judgment
3. Conviction must be prior to marriage

A crime involves moral turpitude when it pertains to an act of “baseness,

vileness, depravity in the private and social duties which a man owes to his
fellow man or to society in general, contrary to the accepted and customary
rules of right and duty between man and man.” [Teves v. COMELEC
(2009)]

Concealment of pregnancy by another man

Wife must have:
a. Concealed her pregnancy AND
b. Pregnancy is by another man other than her husband

If the husband knew of pregnancy, the marriage cannot be annulled on the

ground of concealment.

The woman was 7 months pregnant at the time she met petitioner. He cannot
claim that the pregnancy was concealed from him and that he was defrauded
into marrying her. [Buccat v. Buccat, G.R. No 47101 (1941)]

But where the wife concealed the fact that she was 4 months pregnant during
the time of the marriage and was “naturally plump,” Delizo could hardly be
expected to know, by mere looking, whether or not she was pregnant at the
time of the marriage. [Aquino v. Delizo, G.R. No. L-15853 (1960)]

Note: May be ratified upon free cohabitation after knowledge of fraud.

Concealment of sexually transmissible disease

The STD that was concealed from the other spouse need not be serious and

87
incurable. When the ground for annulment falls under Article 46(3) vis-à-vis
Article 45(3), the healthy spouse through cohabitation can still ratify the
marriage because the defect is in the fact of the concealment and not the
gravity of the disease. Hence, even if the STD is treatable, the fraud gives
the unsuspecting spouse the right to file for annulment.

Concealment of drug addiction, habitual alcoholism, homosexuality or

lesbianism
The non-disclosure of the drug addiction, habitual alcoholism,
homosexuality or lesbianism must have been done prior to the marriage.
Recovery or rehabilitation from STD, drug addiction, and habitual
alcoholism will NOT bar action for annulment; the defect is not the disease,
but the fraud which vitiated consent. [Tolentino]

It is the concealment of homosexuality, and not homosexuality per se, that

vitiates the consent of the innocent party. Such concealment presupposes bad
faith and intent to defraud the other party in giving consent to the marriage.
[Almelor v. RTC, G.R. No. 179620 (2008)]

Any other misrepresentation

Article 46 categorically states that any other misrepresentation as to
character, health, rank, fortune, or chastity shall not be a manifestation of
fraud sufficient to be a ground for annulment of marriage.

The non-disclosure of a husband’s premarital relationship with another

woman does not constitute fraud. It was expressly stated in Article 46 that
misrepresentation or deceit as to one’s chastity shall not be a basis for an
action to annul a marriage. [Anaya v. Palaroan (1970)]

d. Force, Intimidation, Undue Influence

Article 45(4) provides the fourth ground for a voidable marriage, wherein
the consent of one party was obtained by violence, intimidation, or undue
influence.

Force must be one to prevent the party from acting as a free agent; will be
destroyed by fear/compulsion.

There is violence when in order to wrest consent, serious or irresistible

force is employed. [Art. 1335, CC]

Intimidation must be one as to compel the party by a reasonable and well-

grounded fear of an imminent and grave evil upon his person/properties
[Art. 1335, CC]
a. Degree of intimidation: age, sex, condition of person borne in mind
b. Threat or intimidation as not to act as free agent

Note: A threat to enforce one’s claim through competent authority, if one’s

88
claim is just and legal, does not vitiate consent [Art. 1335, CC]

There is undue influence when a person takes improper advantage of his

power or position over the will of another, depriving the latter of a
reasonable freedom of choice.
Among the circumstances that define improper advantage are the (1)
confidential, (2) family, (3) spiritual, (4) professional or other relationship
between the parties, or the fact that the person alleged to have been unduly
influenced was suffering from (5) mental weakness, (6) ignorance, or (7)
was in financial or emotional distress. [Art. 1337, CC]

May be ratified upon voluntary cohabitation after force, intimidation, or

undue influence has ceased or disappeared.

e. Impotency

Impotency refers to the person’s physical condition where sexual

intercourse with a person of the opposite sex is impossible. It does not refer
to mere sterility.

Refers to the inability to copulate, not procreate.

To constitute fraud, the concealed impotency must exist at time of marriage,

and be continuous and incurable. If incapacity can be remedied or is
removable by operation, not annullable [Sarao v. Guevarra, G.R. No. 47063
(1940)].

If the potent spouse was aware, it is implied that he/she renounced

copulation by consenting to the marriage. [Tolentino]

When both spouses are impotent, marriage cannot be annulled because

neither spouse is aggrieved. [Sempio-Dy]

REFUSAL of wife to be examined DOES NOT PRESUME impotency

[Jimenez v. Canizares, G.R. No. L-12790 (1960)].

f. Sexually-Transmissible Disease Serious And Incurable

Affliction of STD is unknown to the other spouse. The other spouse must
also be free from a similar STD. [Balane]

Requisites
a. Should exist at the time of the marriage
b. Should be found serious
c. Should appear to be incurable Not subject to ratification: cannot be
ratified or validated by cohabitation.

Who may file, prescription, ratification

89
 Ground Who can file Prescription Ratification
(Art. 45, FC) (Art. 47, FC) (art. 47, FC) (Art. 45, FC)
Lack of Party 18 or above but Within 5 years Free
Parental below 21 after attaining
cohabitation
Consent age of 21 of the party
Parent or guardian Before who entered
party
who did not give below 21 reaches the marriage
consent 21 without
parental
consent after
attaining age
of 21
Insanity Sane spouse with no Any time before Free
knowledge of the the death of cohabitation
other’s insanity either party of insane party
after insane
party comes to
reason
Legal guardian of
insane party
Insane party During lucid
interval or after
regaining sanity,
and before death
Fraud Injured(defrauded) Within 5 years Free
party after discovery of cohabitation
fraud of the
defrauded
party after
having full
knowledge of
fraud
Force, Injured party Within 5 years Free
Intimidation, after cohabitation
undue disappearance of of the injured
influence force, undue party after the
influence, or force or
intimidation intimidation or
undue
influence has
ceased or
disappeared
Impotence Potent spouse Within 5 years Cannot be
after marriage ratified by
action;

90
 prescribes
STD Healthy Within 5 years Cannot be
party after marriage ratified by
action;
prescribes

Marriages not subject to ratification

a. One spouse is incurably impotent
b. One spouse has incurable STD

Reason: Public policy and health.

Note: Though these marriages cannot be ratified, the petition for annulment
will prescribe within 5 years.

Presence of Prosecutor
To prevent collusion between the parties, fabrication or suppression of
evidence, the prosecuting attorney or fiscal shall appear on behalf of the
State. [Art. 48, FC]

In a legal separation or annulment case, the prosecuting attorney must first

rule out collusion as a condition sine qua non for further proceedings. A
certification by the prosecutor that he was present during the hearing and
even cross-examined the plaintiff does not suffice to comply with the
mandatory requirement. [Corpuz v. Ochoterena, A.M. No. RTJ- 04-1861
(2004)]

Effects of Pending Decree of Annulment

The Court shall provide for the support of spouses and support and custody
of common children [Art. 49, FC]. In determining which parent should have
custody of them, their moral and material welfare shall be given paramount
consideration. [Art. 49, FC; Luna and Luna v. IAC, G.R. No. L-68374
(1985)]

Effects of Decree of Annulment

(Same as Decree of Nullity)
The effects provided for by paragraphs (2), (3), (4) and (5) of Article 43 and
by Article 44 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 [Art. 50(1), FC].

Comparative Table on Void and Voidable Marriages

Void Voidable
Nature No validity from the Valid until annulled
time of performance;
inexistent from the very
beginning

91
 Susceptible to Cannot be ratified Can be ratified, subject
Ratification to 2 exceptions
Property Relation Only coownership [Art. ACP or any other
147, FC] ; property regime in
No ACP or CPG accordance with the
despite having entered marriage settlement
into a marriage
settlement
Status of Illegitimate under Art. Children are legitimate
Children 165, FC (with Arts. 36 if conceived or born
and 53, FC as prior to the decree
exceptions under Art.
54, FC)
How Impugned May be attacked Cannot be attacked
directly or collaterally, collaterally
but for the purpose of Cannot be impugned
remarriage, a judicial after death of one of
declaration of nullity is the parties
required [Art. 40, FC]

Can be impugned even

after death of the parties
Who May Challenge A proper interested A party to the marriage
Validity person (depending on
the dates of marriage
and of filing of
proceeding
Susceptible to Does not prescribe Prescribes
Prescription

6. Unmarried cohabitation

Though there is no technical marital partnership between persons living as

husband and wife, without being lawfully married, nevertheless there is
between them an informal civil partnership which would entitle the parties to
an equal interest in property acquired by their joint efforts [Lesaca v.
Lesaca, G.R. No. L-3605 (1952)]

Property regimes for common-law marriages are provided for in Art. 147
and 148 of the Family Code (Refer to “Property Regime of Unions without
Marriage” for further discussion).

D. LEGAL SEPARATION
An action for legal separation involves nothing more than the bed-and-board
separation of the spouses. It is purely personal in nature. [Lapuz Sy v.

92
Eufenio, G.R. No. L-30977 (1972)]

1. Grounds [Art. 55, FC]:

a. 1st Ground: Repeated physical violence or grossly abusive
conduct directed against the petitioner, a common child, or a child
of the petitioner;

For the purposes of Art. 55, the term “child” shall include a child by nature
or by adoption.

Acts of Violence according to the “Anti- Violence Against Women and

Their Children Act of 2004” [R.A. No. 9262] (as grounds for legal
separation under Art. 55(1), FC)
1. Causing physical harm to the woman or her child;
2. Threatening to cause the woman or her child physical harm;
3. Attempting to cause the woman or her child physical harm;
4. Placing the woman or her child in fear of imminent physical
harm;
5. Attempting to compel or compelling the woman or her child to
engage in conduct which the woman or her child has the right
to desist from or desist from conduct which the woman or her
child has the right to engage in, or attempting to restrict or
restricting the woman's or her child's freedom of movement or
conduct by force or threat of force, physical or other harm or
threat of physical or other harm, or intimidation directed against
the woman or child. This shall include, but not limited to, the
following acts committed with the purpose or effect of
controlling or restricting the woman's or her child's movement
or conduct:
a. Threatening to deprive or actually depriving the woman or her child
of custody to her/his family;
b. Depriving or threatening to deprive the woman or her children of
financial support legally due her or her family, or deliberately
providing the woman's children insufficient financial support;
c. Depriving or threatening to deprive the woman or her child of a legal
right;
d. Preventing the woman in engaging in any legitimate profession,
occupation, business or activity or controlling the victim's own money
or properties, or solely controlling the conjugal or common money, or
properties;
6. Inflicting or threatening to inflict physical harm on oneself for
the purpose of controlling her actions or decisions;
7. Causing or attempting to cause the woman or her child to
engage in any sexual activity which does not constitute rape, by
force or threat of force, physical harm, or through intimidation
directed against the woman or her child or her/his immediate

93
 family;
8. Engaging in purposeful, knowing, or reckless conduct,
personally or through another, that alarms or causes substantial
emotional or psychological distress to the woman or her child.
This shall include, but not be limited to, the following acts:
i. Stalking or following the woman or her child in public or private
places;
ii. Peering in the window or lingering outside the residence of the
woman or her child;
iii. Entering or remaining in the dwelling or on the property of the woman
or her child against her/his will;
iv. Destroying the property and personal belongings or inflicting harm to
animals or pets of the woman or her child; and
v. Engaging in any form of harassment or violence.
9. Causing mental or emotional anguish, public ridicule or
humiliation to the woman or her child, including, but not
limited to, repeated verbal and emotional abuse, and denial of
financial support or custody of minor children of access to the
woman's child/children.

b. 2nd Ground: Physical violence or moral pressure to compel the

petitioner to change religious or political affiliation;

The law does not require the violence or moral pressure to be repeated. A
single act of violence is sufficient to be a ground since religious and political
belief are human rights. [Tolentino]

c. 3rd Ground: Attempt of respondent to corrupt or induce the

petitioner, a common child, or a child of the petitioner, to engage
in prostitution, or connivance in such corruption or inducement;

Only the respondent spouse must be guilty of corrupting or inducing the

petitioner, a common child or a child of the petitioner to engage in
prostitution.

d. 4th Ground: Final judgment sentencing the respondent to

imprisonment of more than six years, even if pardoned;

e. 5th Ground: Drug addiction or habitual alcoholism of the

respondent

f. 6th Ground: Lesbianism or homosexuality of the respondent;

To constitute grounds for legal separation, the cause (i.e., drug addiction,
habitual alcoholism, lesbianism or homosexuality) does not have to be
existing at the time of the celebration of marriage; it is enough that it arises
during the existence of the marriage. Otherwise, it will be a ground for

94
annulment under Art. 46(4), FC in relation to Art. 45(3), FC.

g. 7th Ground: Contracting by the respondent of a subsequent

bigamous marriage, whether in the Philippines or abroad;

The elements for bigamy to be prosecuted in the Philippines are:

1. Offender has been legally married
2. The marriage has not been legally dissolved or, in case his or her
spouse is absent, the absent spouse could not yet be presumed dead
3. Offender contracts a subsequent marriage
4. Subsequent marriage has all the essential requisites for validity,
except legal capacity. [Capili v. People, G.R. No. 183805 (2013)]

As a ground for legal separation however, there is no need for a criminal

conviction for bigamy.

h. 8th Ground: Sexual infidelity or perversion;

Adultery is not a continuing crime; it is consummated at every moment of

carnal knowledge. Thus, every sexual act is a ground for legal separation.
[People v. Zapata and Bondoc, G.R. No. L-3047 (1951)]

A civil action for legal separation based on concubinage may proceed ahead
of, or simultaneously with, a criminal action for concubinage; conviction is
not a prerequisite [Gandionco v. Penaranda, G.R. No. 79284 (1987)].

i. 9th Ground: Attempt by the respondent against the life of the

petitioner; or

j. 10th Ground: Abandonment of petitioner by respondent without

justifiable cause for more than one year.

Abandonment is not mere physical estrangement but also financial and

moral desertion. There must be an absolute cessation of marital relations,
duties, and rights with the intention of perpetual separation. [Dela Cruz. v.
Dela Cruz, G.R. No. L-19565 (1968)]

To be a ground for legal separation, abandonment must be without

just cause. [Ong Eng Kiam v. Ong, G.R. No. 153206 (2006)]

2. Defenses [Art. 56, FC]:

a. Condonation by aggrieved party – after the commission of the
offense; may be expressed or implied.

Condonation may be given expressly or impliedly. An example of an

implied condonation is when a husband repeatedly has intercourse with the
wife despite the wife’s cruelty. “Although he did not wish it, [he did it]
eventually for the sake of peace.” [Willan v. Willan, G.R. No. L-13553

95
(1960)]

b. Consent by aggrieved party to the commission of the offense –

before the commission of the offense; may be express (e.g. written
agreement, [Matubis v. Praxedes, G.R. No. L- 11766 (1960)] or
implied

A written agreement between the spouses, which provided that they were
“free to get any mate and live with as husband and wife without any
interference by any of us, nor either of us can prosecute the other for
adultery or concubinage or any other crime or suit arising from our
separation” amounted to express condonation of and consent to the
adulterous acts of wife. [Matubis v. Praxedes, G.R. No. L- 11766 (1960)]

The non-interference of the husband with regard to the amorous relations

between his wife and Ramos constitutes consent. [People v. Sensano and
Ramos, G.R. No. L-37720 (1933)]

c. Connivance between parties in the commission of the offense

Connivance is present when the husband throws no protection around his

wife nor warns her against intimacy with the driver. A husband who had
reliable reports for two months that gave him reason to suspect that his wife
was having an affair with her driver yet did nothing to keep the latter away is
guilty of connivance. [Sargent v. Sargent, 114 A. 428 (1920)]

d. Mutual guilt or recrimination between spouses in the commission

of any ground for legal separation

e. Collusion between parties to obtain decree of legal separation

Collusion in matrimonial cases is the act of married persons in procuring a

divorce by mutual consent, whether by preconcerted commission by one of a
matrimonial offense, or by failure, in pursuance of agreement, to defend
divorce proceedings. [Brown v. Yambao, G.R. No. L-10699 (1957)]

f. Prescription of action for legal Separation

Art. 57, FC. An action for legal separation shall be filed within five years
from the time of the occurrence of the cause.

g. Reconciliation of parties during pendency of action [Art. 66(1),

FC]

Art. 65, FC. 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.

96
 Art 66, FC. 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.

h. Death of either party during pendency of action

Death of plaintiff before decree of legal separation abates the action. There
is no more need for legal separation because the marriage is already
dissolved by the death of one of the parties. [Lapuz Sy v. Eufemio, G.R. No.
L- 30977 (1972)].

3. Procedure
Who may file the action
A petition for legal separation may be filed only by the husband or the wife.
[Sec. 2, A.M. No. 02-11- 11-SC (Rule on Legal Separation)]

Where to file the action

The petition shall be filed in the Family Court of the province or city where
the petitioner or the respondent has been residing for at least six months
prior to the date of filing “or in the case of a non-resident respondent, where
he may be found in the Philippines, at the election of the petitioner.” [Sec. 2,
A.M. No. 02-11-11-SC]

When to File Action

An action for legal separation shall be filed within five years from the time
of the occurrence of the cause. [Art. 57, FC and A.M. No. 02-11-11-SC]

Cooling-off and Reconciliation Effects

An action for legal separation shall in no case be tried before six months
shall have elapsed since the filing of the petition. [Art. 58, FC]
Actions cannot be tried unless the court has attempted to reconcile the
spouses, and determined that despite such efforts, reconciliation is highly
improbable. [Art. 59]

N.B. This is without prejudice to judicial determination of custody of

children, alimony, and support pendente lite.

97
Courts can still resolve other issues, pending the waiting period or cooling
off period. In resolving other issues, courts should try not to touch, as much
as possible, on the main issue (i.e. adultery if that is the ground used).
However, Court must still receive evidence if just to settle incidental issues
of support and custody. [Araneta v. Concepcion, G.R. No. L- 9667 (1956)]

N.B. This provision of the Family Code dictating a mandatory 6-month

cooling-off period does not apply in cases where violence, as used in R.A.
No. 9262 (Anti-Violence Against Women and their Children), is alleged.

The case should be heard as soon as possible by the court.

Contents and Form of the Petition [Sec. 2, A.M. No. 02-11-11-SC]

a. Allege the complete facts constituting the cause of action;
b. Names and ages of the common children of the parties, specify
the regime governing their property relations, the properties
involved, and creditors, if any;
c. Be verified and accompanied by a certification against forum
shoppin;
d. Be filed in six copies.

4. Effects of filing petition

a. The spouses are entitled to live separately, but the marital bond is not
severed. [Art. 61 (1), FC]
b. Administration of community or conjugal property – If there is no
written agreement between the parties, the court shall designate one of
them or a third person to administer the ACP or CPG. [Art. 61, par. 2,
FC]

Note: No motion to dismiss the petition shall be allowed except on the

ground of lack of jurisdiction over the subject matter or over the parties;
provided, however, that any other ground that might warrant a dismissal of
the case may be raised as an affirmative defense in an answer. [Sec. 4, A.M.
No. 02-11-11-SC]

5. Effects of pendency
The Court shall provide for: [Art. 62, cf. Art. 49, FC]
a. Support of spouses
b. Custody of children: The court shall give custody of children to one of
them, if there is no written agreement between the spouses.
c. Visitation rights of the other spouse

6. Effects of decree of legal separation

a. The spouses can live separately [Art. 63, FC] but the marriage bonds
are not severed.
b. The ACP or CPG shall be dissolved and liquidated, and the share of

98
 the guilty spouse shall be forfeited in favor of the common children,
previous children, or innocent spouse, in that order [Art. 63, FC; cf.
Art. 43(2), FC]
c. Custody of the minor children shall be awarded to the innocent spouse
[Art. 63, FC; cf. Art 213, FC]
d. Guilty spouse shall be disqualified from inheriting from the innocent
spouse by intestate succession. The provisions in favor of the guilty
party in the will of the innocent spouse shall also be revoked by
operation of law. [Art. 63, FC]
e. Donations in favor of the guilty spouse may be revoked [Art. 64, FC]
but this action prescribes after 5 years from the decree of legal
separation.
f. Innocent spouse may also revoke designation of guilty spouse as
beneficiary in an Insurance policy, even if such stipulations are
irrevocable. [Art. 64. FC; cf. Sec. 11, P.D. 612]
g. Obligation for mutual support ceases, but the court may order the
guilty spouse to support the innocent spouse. [Art. 198, FC]
h. The wife shall continue to use the surname of the husband even after
the decree for legal separation. [Laperal v. Republic, G.R. No. L-
18008 (1992)]

7. Reconciliation
Art. 65, FC. 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.

Effects of Reconciliation:

a. Proceedings for legal separation shall be terminated at whatever stage

[Art. 66(1), FC].
b. If there is a final decree of legal separation, it shall be set aside [Art.
66(2), FC].
c. The separation of property and forfeiture of share of guilty spouse
shall subsist, unless the spouses agree to revive their former property
regime or to institute another property regime [Art. 66 cf. Art. 67,
FC].
d. Joint custody of children is restored.
e. The right to intestate succession by guilty spouse from innocent
spouse is restored.
f. The right to testamentary succession depends on the will of the
innocent spouse.

99
8. Effect of death of one of the parties
The death of either party to a legal separation proceeding, before final
decree, abates the action. There is no more need for legal separation because
the marriage is already dissolved by the death of one of the parties. An
action for legal separation is also purely personal between the spouses.
[Lapuz Sy v. Eufemio]

Void Marriages Voidable Marriages Legal Separation

Grounds 1. Absence of Defect in any of the Grounds not relating t
essential or formal essential requisites: of the essential or f
requisites 1. Lack of requisites:
a. One is a parental 1. Repeated
minor consent, physical
b. No 2. Insanity, violence
authority 3. Fraud, 2. Pressure
to marry 4. Force, compel
c. No valid intimidation change
marriage , undue religious
license influence, cal affilia
d. Bigamo 5. Impotence, 3. Corruptio
us and 6. Serious and induceme
polygam incurable engage
ous STD prostituti
marriage 4. Final
s judgmen
e. Mistake sentence
of more th
identity years
f. Void 5. Drug
subsequ addiction
ent habitual
marriage alcoholis
s 6. Homosex
2. Psychological y/ lesbian
incapacity 7. Bigamou
3. Incestuous marriage
marriages 8. Sexual
4. Marriages against infidelity
public policy perversio
5. Subsequent 9. Attempts
marriages which did against th
not comply with Art. of petitio
52 10. Abandon
without
cause for

100
 than 1 ye
Defenses None 1. Condonation
2. Consent
3. Connivance
4. Collusion
5. Recrimination
6. Prescription
Prescriptio No Prescription 1. Lack of parental Within 5 years from the
n consent occurrence of the cause
a. Spouses - 5 years
after turning 21
b. Parents - before the
spouses turn 21
2. Insanity
a. Insane spouse -
during lucid
intervals
b. Sane spouse/
guardian - lifetime
3. Fraud - 5 years after the
discovery of the fraud
4. Force, intimidation,
undue influence - 5 years
after cessation
5. Impotence/STD - 5
years from marriage
Who can According to A.M. Only the spouses (cannot Only the spouses (c
file No. 02- 11-10-SC: survive the death of the survive the death o
1. Before March 18, plaintiff) plaintiff)
2003 (petition for
nullity or celebration
of marriage) – any
party
2. On and after
March 18, 2003
(petition for nullity or
celebration of
marriage) - only the
spouses
Effects of In the absence of adequate provisions in a written 1. Live separately
Pendency agreement: 2. Designate either of th
1. Support of spouses or a third person
2. Support and custody of children administrator of propert
3. Visitation rights 3. Support of spouses
4. Support and custo

101
 children
5. Visitation rights
Effects of 1. Properties [Art. 1. Properties [Art. 50, FC] 1. Properties [Art. 63(2)
Decree 147 - 148, FC] a. ACP/CPG a. Dissolution
a. Art. 147 dissolved, share Liquidation
(equal shares) forfeited to heirs if ACP/CPG
governs bad faith 2. Support and Custody
property b. Donations valid, 213, FC]
relations of except if bad faith a. Parental authori
void c. Insurance may be the parent desig
marriages revoked if bad faith by Court afte
b. Art. 148 (in d. No succession for relevant consider
proportion) spouse in bad faith b. Tender
governs 2. Status of Children [Art. presumption for
property 54, FC] under 7 y.o.
relations of a. Conceived or born 213(2), FC]
bigamous before judgment, 3. Inheritance, Donation
adulterous legitimate. Designation in Insu
relationships 3. Continued Use of Policies [Sec. 22, rul
Surname [Art. 371, CC] Legal Separation]
2. Status of Children a. Dependent on her being 4. Continued Use of Su
[Art. 54, FC] the innocent or guilty [Art. 372, CC]
General Rule: party
Conceived or born
before the judgment
of absolute nullity,
illegitimate

Exceptions:
Conceived or born
a. Before the
judgment of
annulment;
b. Before the
judgment of
absolute
nullity under
Art. 36
(Psychological
Incapacity)
c. Of the
subsequent
marriage under
Art. 53
(Failure to
Record the

102
 Decree of
Nullity of
Annulment);
d. Prior to the
termination of
the subsequent
marriage under
Art. 42 (when
the absent
spouse files an
affidavit of
reappearance)

E. RIGHTS AND OBLIGATIONS BETWEEN HUSBAND AND WIFE

These rights and duties are not subject to stipulation between the spouses;
and though they may voluntarily agree to any change in their personal
relations, this agreement will be void and have no legal effect.

1. Live Together
The right to live together refers to the right of consortium which is not
susceptible of precise or complete definition but, broadly speaking,
companionship, love, affection, comfort, mutual services, sexual intercourse
—all belonging to the marriage state—taken together make up what we refer
to as consortium.

Art. 68, FC. The husband and wife are obliged to live together, observe
mutual love, respect and fidelity, and render mutual help and support.

Exception: One spouse living abroad or there are valid and compelling
reasons [Art. 69(2), FC] - at the discretion of the court.

Exception to the Exception: Incompatibility with the solidarity of the

family [Art. 69(2), FC].

If the wife abandons the family domicile with justifiable cause (i.e. being
forced to perform lewd sexual acts), the husband’s obligation to support her
is not terminated. The law will not permit the husband to terminate the
obligation to support his wife by his own wrongful acts driving the wife to
seek protection in her parents’ home [Goitia v. Campos Rueda, G.R. No.
11263 (1916)].

2. Family Domicile
Art. 69(1), FC. The husband and wife shall fix the family domicile. In
case of disagreement, the court shall decide.

3. Support
The spouses are jointly responsible for the support of the family. The

103
expenses for such support and other conjugal properties shall be paid:
a. From the conjugal property;
b. If none, income or the fruits of their separate properties;
c. If none, from their separate properties, wherein they shall be liable in
proportion to their properties [Art. 70, FC].

Support is not just limited to financial support - includes emotional and

moral support.

In case of a de facto separation, if it is proved that the husband and wife

were still living together at the time of his death, it would be safe to presume
that she was dependent on the husband for support, unless it is shown that
she is capable of providing for herself [SSS v. Aguas, G.R. No. 165546
(2006)].

4. Management of Family Life

Art. 71, FC. The management of the household shall be the right and duty
of both spouses. The expenses for such management shall be paid in
accordance with the provisions of Article 70.

5. Effect of Neglect of Duty

Art. 72, FC. When one of the spouses neglects his or her duties 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.

Note: Injury contemplated here is physical, moral, emotional or

psychological, not financial.

6. Exercise of Profession
Either spouse may exercise any legitimate profession, without need for
consent of the other [Art. 73, FC].

The other spouse may only object on valid serious and moral grounds.

In case of disagreement, the Court shall decide whether:

a. The objection is proper, and
b. Benefit has accrued to the family
i. If benefit accrued before the objection: enforce against community
property
ii. If benefit accrued after the objection: enforce against separate
property of spouse who has not obtained consent [Art. 73, FC, as
amended by RA 10572].

7. Use of Surname

For Married Women

A woman may use [Art. 370, CC]:

104
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.

For Widows
A widow may use the deceased husband’s surname as though he were still
living, in accordance with Art. 370 [Art. 373, CC].

In case of Annulment [Art. 371, CC]

1) If the wife is the guilty party, she shall resume her maiden name and
surname
2) If the wife is innocent
a) She may resume her maiden name and surname; or
b) She may choose to continue employing her former husband’s
surname, unless:
i. The court decrees otherwise; or
ii. She or the former husband is married again to another person.

For Legally Separated Spouses

The wife shall continue using her name and surname employed before the
legal separation [Art. 372, CC].

In case of absolute divorce, the effect of divorce is more akin to the death of
the spouse where the widow can continue using the surname or be referred
as Mrs. of her husband [Tolentino v. CA, G.R. No. L-41427 (1988)].

Note: From the foregoing provisions, it can be gleaned that a woman is not
mandated by law to adopt her husband’s surname after marriage. Art. 370,
CC is merely directory, since it provides that a woman may choose any of
the options provided.

F. PROPERTY RELATIONS OF THE SPOUSES

1. Marriage settlements
Art. 74, FC. 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
3. By the local custom.

Requisites for Validity [Art. 75, FC]

1. Future spouses agree upon the regime of absolute community, conjugal

partnership of gains, complete separation of property, or any other regime.

105
2. In the absence of marriage settlement, or when the regime agreed upon is
void, the system of absolute community property as established in this Code
shall govern.

Requirements for marriage settlements and any modification thereof

[Art. 77, FC]

1. Must be made in writing

2. Signed by the parties
3. Executed before the marriage celebration
4. If executed by a person below 21 years, valid only
when persons required to give consent to the marriage
(father, mother, or guardian, respectively) are made
parties to the agreement [Art. 78, FC]

The parties have the freedom to stipulate regarding their property relations in
their marriage settlements in which the lex intentionis of the parties governs
the contract. When the couple agrees on a property regime in their marriage
settlement, the provisions of the Code are merely suppletory.

When modifications can be made

For modification to be valid, it must be determined before the celebration
of marriage [Art. 76, FC]
Upon finality of legal separation, the property regime is dissolved and
liquidated, subject to forfeiture for the guilty spouse [Art, 63(2), FC]
In case of reconciliation, the separation of property subsists unless the
parties agree to revive their former property regime. [Arts. 66 and 67, FC]
For judicial separation of property, the following are sufficient causes:
1. The spouse of the petitioner has been sentenced to a penalty which
carries with it civil interdiction;
2. The spouse of the petitioner has been judicially declared an
absentee;
3. Loss of parental authority of the spouse of petitioner has been
decreed by the court;
4. The spouse of the petitioner has abandoned or failed to comply
with his or her obligations to the family
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

106
 fact for at least one year and reconciliation is highly improbable.

N.B. Marriage settlements are considered accessory to the marriage,

therefore as per Art. 81, stipulations in consideration of future marriage and
donations will be void if the marriage does not take place.

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 [Art. 103(3), FC]

2. Donations by reason of marriage

Art. 82, FC. 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.

Donations propter nuptias are made in consideration of marriage. There can

be a valid donation even if the marriage never took place, but the absence of
marriage is a ground for the revocation of the donation. [Solis v. Barroso,
G.R. No. 27939 (1928)]

Donations propter nuptias are without onerous consideration, marriage

being merely the occasion or motive for the donation, not its cause. Being
liberalities, they remain subject to reduction for inofficiousness upon the
donor’s death, if they should infringe the legitime of a forced heir. [Mateo v.
Lagua, G.R. No. L-26270 (1969)]

Requisites of donation propter nuptias

1. Made before the celebration of marriage
2. Made in consideration of marriage
3. Made in favor of one or both of the future spouses
4. In a public document and not merely privately stipulated [Solis v.
Barroso, supra]

Who may donate

1. Spouses to each other
2. Parents of one or both spouses
3. Third persons to either or both spouses

Donations excluded are:

1. Ordinary wedding gifts given after the celebration of marriage
2. Donations in favor of future spouses made before marriage but not in
consideration thereof

107
3. Donations made in favor of persons other than the spouses even if
founded on the intended marriage

Distinguished from Ordinary Donations

Donations propter nuptias Ordinary Donations
Does not require express acceptance Express acceptance required
May include future property Cannot include future property
(subject to formalities of wills
If present property is donated and No limit to donation of present
property regime is property provided legitimes are not
not absolute community, limited to impaired
1/5 [Art. 84, FC]
Grounds for revocation found in Grounds for revocation found in
Art. 86, FC donation laws CC provisions

Donations of property subject to encumbrances

a. Are considered valid.
b. In case of foreclosure:
i. If property value < obligation, donee shall not be liable for the deficiency
ii. If property value > obligation, donee shall be entitled to the excess [Art.
85, FC]

Grounds for Revocation of Donation Propter Nuptias [Art. 86, FC]

A. Marriage not celebrated
Donation contained in marriage Revoked by operation of law
settlement Does not prescribe
Donation contained in a Donor’s choice
separate instrument Prescribes within 5 years from
supposed date of marriage

B. Void marriage
General rule: There must be a judicial declaration of nullity for the void
marriage.
1. Art 40, in rel. to Art If done spouse If both parties acted in
52 and 53 (subsequent contracted the second good faith, revocation
marriage before marriage in bad faith n will be by donor’s
securing judicial (knowing that it was choice; within 5 years
declaration of nullity) void), donations in from date of finality of
favor of the second the judicial declaration
marriage are revoked of nullity.
by operation of law.
2. Art 44 (bad faith in If either or both
securing declaration of spouses in the
presumptive death) subsequent marriage
acted in bad faith
(knowing that the

108
 person was still alive),
donations in favor of
the subsequent
marriage is revoked by
operation of law.
3. All other void Donor’s choice,
marriages regardless of good/bad
faith of the donee.

C. No consent of parents or guardian

General rule: Does not require final decree of annulment
Revocation will be by donor’s choice and done within 5 years from
discovery that consent was not obtained

D. Other cause of annulment

Revoked by operation of law if donee is the guilty spouse who acted in
bad faith

E. No consent of parents or guardian

General rule: Revocation is by donor’s choice and done within 5 years
from finality of decree of legal separation
Exception: If cause is adultery or concubinage, revoked by operation of
law

F. Resolutory condition complied with

General rule: Revocation is by donor’s choice and done within 5 years
from finality of decree of legal separation
Exception: If the other spouse is the donor, action does not prescribe

G. Acts of ingratitude [Art. 765, CC]

General rule: Revocation is by donor’s choice and done within 1 year from
knowledge of fact of ingratitude with donor being capable of bringing suit.

3. Void donations by the spouses

Donations Before Marriage
General rule: Future spouses who agree upon a regime other than ACP cannot
donate to each other more than 1/5 of their present property (excess shall be
considered void). [Art. 84, FC]

Reason for excluding ACP: All property will again be shared by both spouses
after the marriage.

Exception: The limit of 1/5 only applies when the donation is contained in the
marriage settlements. If it is contained in another instrument, the general rules
on inofficious donations shall apply.

Donations During Marriage

109
General rule: Spouses cannot donate to each other, directly or indirectly;
donations made by spouses to each other during the marriage are void. [Art. 87,
FC] These donations refer to donations inter vivos. [Tolentino]

Exception: Moderate gifts on the occasion of any family rejoicing.

A spouse cannot donate to persons which the other spouse may inherit from as
it constitutes an indirect donation. [Nazareno v. Birog, 45 O.G. No. 5 (1947)]

Donations Between Common-law Spouses

The donation between common-law spouses falls within the provision
prohibiting donations between spouses during marriage. [Matabuena v.
Cervantes, G.R. No. L-2877 (1971)]

In order to fall under the prohibition, it must be proved that they were living in
a common-law relationship at the time of the donation. [Sumbad v. CA, G.R.
No. 106060 (1999)]

4. Absolute community of property

Definition
The community property consists of all the property owned by the spouses at
the time of the celebration of the marriage, and those either one or both of
them acquired during the marriage. There is a presumption provided in the
Family Code that properties acquired during the marriage belong to the
community, unless it is proved that it is one of those excluded therefrom.
[Tolentino]

Governing law
Art. 80, FC. In absence of a contrary stipulation in a marriage settlement, the
property relations of the spouses shall be governed by Philippine laws,
regardless of the place of the celebration of the marriage and their residence.

By the Nationality Rule [Art. 15, CC], the rule that Absolute Community
Property (ACP) is the default mode of property relations absent any
marriage settlement applies to all Filipinos, regardless of the place of the
marriage and their residence. [N.B.]

Exceptions
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
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 [Art. 80, FC]

If marriage does not take place

Art. 81, FC. Everything stipulated in the settlements or contracts referred to

110
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.

Waiver Not Allowed

General Rule: No waiver of rights, shares and effects of the absolute
community of property during the marriage can be made
Exception: 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. [Art. 89, FC.]

Provisions on Co-ownership Apply

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.
[Art. 90, FC]

N.B. 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.

5. Conjugal partnership of gains

This property regime was formerly the default regime under the CC.

In this regime, the spouses retain ownership of their separate property.

However, the spouses also place in a common fund the proceeds, products,
fruits and income of their separate property and those acquired by either or
both spouses through their efforts or by chance.

The presumption applies that all properties acquired during the marriage
belong to the CPG. There are 3 distinct patrimonies in this system, the
husband’s capital property, the wife’s paraphernal property, and the conjugal
property.

Comparison of ACP and CPG

Absolute Community of Conjugal Partnership of
Property (ACP) Gains (CPG)
When it At the precise moment of For marriages after the Family
commences the celebration of the Code, CPG becomes the
marriage [Art. 88, FC] property regime only if agreed
to by the parties through a
marriage settlement.

111
All the properties owned Proceeds, products, fruits, and
by the spouses at the time income of their separate
of the celebration of the properties
marriage or acquired Everything acquired by them
thereafter [Art. 91, FC] during marriage through
their own efforts
Under the ACP, spouses Everything acquired through
cannot exclude specific their efforts or by chance.
properties from the regime
unless done in settlement.
Winnings from gambling Specific properties [Art. 117,
shall accrue to the FC]
community property but 1. Acquired by
obligations from gambling onerous title
shall not. [Art. 95, FC] during the
Property acquired during marriage at the
marriage is presumed to expense of the
have been obtained Common Fund;
through joint efforts of 2. Acquired through
parties, even though one the labor,
did not actually participate industry, work,
in the acquisition. This is or profession of
true for a party whose either or both
efforts consisted in the care spouses
and maintenance of the 3. Fruits from
family household. Such is common
regarded as contributions property and net
to the acquisition of fruits of the
common property by one exclusive
who has no salary, income, property of each
work or industry. [Ocampo spouse
v. Ocampo, G.R. No. 4. Share of either
198908 (2015)] spouse in hidden
treasure,
whether as finder
or owner of
property where
treasure was
found
5. Acquired through
occupation such
as fishing or
hunting
6. Livestock
existing at

112
 dissolution of
partnership in
excess of what is
brought by either
spouse to the
marriage
7. Acquired by
chance, such as
winnings from
gambling or
betting
Moral damages arising from a
contract paid from the CPG
[Zulueta v. Pan American
World Airways, G.R. No. L-
28589 (1973)]
Loans contracted during the
marriage are conjugal, and so
is any property acquired
therefrom [Mendoza v. Reyes,
G.R. No. L- 31625 (1983)]
Property purchased by
installment, paid partly with
conjugal funds and partly with
exclusive funds, if full
ownership was vested during
the marriage; the CPG shall
reimburse the owner-spouse
[Art. 118, FC]
If a winning ticket is bought
by conjugal funds, the prize is
conjugal (otherwise, the prize
is exclusive property of the
spouse who owns the ticket)
Improvement on exclusive
property: if original value is
less than new value (where
new value = value of land +
value of improvements + net
change in value), then land
becomes conjugal property,
subject to the reimbursement
of the value of the property of
the owner-spouse at the
dissolution of the CPG

113
 Property belonging to one
spouse converted into another
kind totally different in nature
from its original form during
marriage becomes conjugal in
the absence of proof that the
expenses of the conversion
were exclusively for the
account of the original owner-
spouse, subject to
reimbursement of the value of
the original property from the
conjugal partnership
What Properties acquired before Property brought into the
remains the marriage, for those marriage by each spouse as
exclusive with legitimate his/her own
property descendants by a former
[Art. 92, marriage (to protect rights
FC] of children by a former
marriage)
Properties acquired Properties acquired during
during the marriage by a the marriage by a gratuitous
gratuitous title, i.e. title, i.e. donation, inheritance
donation, inheritance by by testate and intestate
testate and intestate succession (but the fruits of
succession, including the such properties form part of
fruits of such properties the CPG)

Except: When expressly Except: When expressly

provided by the donor or provided by the donor or
testator that the property testator that the property shall
shall form part of the ACP form
part of the CPG
Properties for personal use Property acquired by right of
i.e. wearing apparel, toilet redemption, by barter, or by
articles, eyeglasses exchange with property
Except: belonging to either spouse
1. Luxurious jewelry and Plata v. Yatco, G.R. No. L-
those of special value that 20825 (1964):
increase in value over time Plata purchased property
(partakes of the nature of when she was single. When
an investment) married, she and her husband
Bergosa co-signed a mortgage
on the property. Upon
foreclosure, Bergosa was sued
for illegal detainer. A writ of

114
 execution on the property was
carried out but Plata refused
to leave the premises. SC
ruled that Plata cannot be held
in contempt. Property is not
conjugal.
Her husband signing as co-
mortgagor does not convert it
to CPG. She could ignore
execution because the
decision was for her husband
alone.
Property purchased with
exclusive money
of either spouse
Property purchased by
installment, paid partly with
conjugal funds and partly with
exclusive funds, if full
ownership was vested before
the marriage [Art. 118, FC].
Even if the installment is
completed after the marriage,
the property is exclusive if
ownership was vested in one
spouse before the marriage
[Lorenzo v. Nicolas, G.R. No.
L-4085 (1952)].
Presumptio All properties acquired All property acquired during
n during the marriage form the marriage, whether made,
part of the ACP, unless it contracted, or registered in the
be proven that they are name of one spouse, are
excluded. [Art. 93, FC] presumed conjugal unless the
contrary is proven. [Art. 116,
FC]
Charges and Art. 94, 121-123 FC
Obligations 1. Support of the following:
a. Spouses;
b. Common children;
c. Legitimate children of previous
marriage;
d. Illegitimate children – follow the
provisions on Support; common
property liable in case of absence
or insufficiency of the exclusive

115
 property of the debtor-spouse, but
the payment shall be considered
as an advance on the share of the
debtor-spouse.
2. Expenses to enable either spouse to
commence/complete a professional/vocational
course or activity for self-improvement;
3. Value donated or promised by both spouses in
favor of common legitimate children for the
exclusive purpose of commencing/ completing
a professional/ vocational course or activity
for self-improvement;
4. Generally: all expenses incurred with the
consent to the spouses or for the benefit of the
family.
If community property is If conjugal partnership
insufficient, the spouses property is insufficient, the
are solidarily liable for the spouses are solidarily liable
unpaid balance from their for the unpaid balance from
separate properties except their separate properties.
for: Gambling losses of any kind
1. Debts contracted by (i.e. legal or illegal) shall be
either spouse before borne by the losing spouse’s
marriage which have not separate property [Art. 123,
redounded to the benefit of FC] DBP v. Adil, G.R. No. L-
the family; 4085 (1988): Loan contracts
2. Support of illegitimate signed by both spouses are
children; and conjugal, and they are jointly
3. Liabilities incurred by liable for payment, even if
either spouse arising from only one spouse signs a
crime or quasi-delict. subsequent promissory note.
Ayala Investment v. Ching,
Gambling losses of any G.R. No. 118305 (1998): The
kind (i.e. legal or illegal) Supreme Court ruled that the
shall be borne by the indirect benefits that might
losing spouse’s separate accrue to a husband in signing
property [Art. 95, FC] as a surety or guarantee in an
agreement not in favor of the
family but in favor of his
employer corporation are not
benefits that can be
considered as giving a direct
advantage accruing to the
family. Hence, the creditors
cannot go against the conjugal

116
 partnership property in
satisfying the obligation
subject of the surety
agreement. A contrary view
would put in peril the
conjugal partnership by
allowing it to be given
gratuitously as in cases of
donation of conjugal
partnership property, which is
prohibited.
Ownership, The administration and enjoyment of the
administrati community/conjugal property shall belong to both spouses
on, jointly.
enjoyment,
and In case of disagreement, the husband’s decision shall
disposition prevail, subject to recourse to the court by the wife for a
of proper remedy, within 5 years from the date of contract
property [Art. 96, 124 FC].
De Ansaldo v. Sheriff of
Manila, G.R. No. L- 43257
(1937): Spouses are not co-
owners of CPG during the
marriage and cannot alienate
the supposed 1/2 interest of
each in the said properties.
The interest of the spouses in
the CPG is only inchoate or a
mere expectancy and does not
ripen into title until it appears
after the dissolution and
liquidation of the partnership
that there are net assets.
Either spouse may, through Disposition or encumbrance
a will, dispose of his or her of conjugal property requires
interest in the community the following: Authority of
property. [Art. 97, FC] the court or written consent of
However, the will should the other spouse. The absence
refer only to his or her of such will render such
share in the community encumbrance void. [Art. 124,
property. par. 2, FC]
Donation of one spouse without the consent of the other is
not allowed. [Art. 98, 125 FC]

Exception:
Moderate donations to charity or on occasion of family

117
 rejoicing or distress
Jader-Manalo v. Camaisa, G.R. No. 147978 (2002): Mere
awareness of a transaction is NOT consent.

Homeowner’s Savings & Loan Bank v. Dailo, G.R. No.

153802 (2005): In the absence of (court) authority or
written consent of the other spouse, any disposition or
encumbrance of the conjugal property shall be void.

Cheeseman v. IAC, G.R. No. 7483 (1991): If, however, one

of the spouses is an alien, the Filipino spouse may
encumber or dispose of the property w/o the consent of the
former. The property is presumed to be owned exclusively
by the Filipino spouse.
Dissolution Terminates upon [Art. 99, 126 FC]:
of 1. Death of either spouse – follow rules in Art. 103
the regime 2. Legal separation – follow rules in Arts. 63 and 64
3. Annulment or judicial declaration of nullity – follow
rules in Arts. 50 and 52

Judicial separation of property during marriage – follow

rules in Arts. 134 to 138
Rules on de General rule: De facto separation does NOT affect the
facto ACP/CPG.
separation
Exceptions:
1. Spouse who leaves the conjugal home without
just cause shall not be entitled to support;
however, he/she is still required to support the
other spouse and the family
2. If consent is necessary for transaction but is
withheld or otherwise unobtainable,
authorization may be obtained from the court
3. Support for family will be taken from the
ACP/CPG
4. If ACP/CPG is insufficient, spouses shall be
solidarily liable
Effect of de If it is necessary to administer or encumber separate
facto property of spouse who left, spouse present may ask for
separation judicial authority to do this.

If ACP/CPG is not enough and one spouse has no separate

property, spouse who has property is liable for support,
according to provisions on support.
Rules on Abandonment [Art. 101, 128 FC]
Abandonme Present/aggrieved spouse may petition the court for:

118
nt 1. Receivership
2. Judicial Separation of Property
3. Authority to be the sole administrator of the absolute
community, subject to precautionary conditions that
the court may impose

A spouse is deemed to have abandoned the other when he

or she has left the conjugal dwelling without any intention
of returning.
Spouse is prima facie considered to have abandoned the
other spouse and the family if he or she has:
1. Left for a period of 3 months
2. Failed to inform the other spouse of his or her
whereabouts for a period of 3 months
Partosa-Jo v. CA, G.R. No.
82606 (1992):
Physical separation of the
spouses, coupled with the
husband’s refusal to give
support to the wife, sufficed
to constitute abandonment as
a ground for an action for the
judicial separation of their
conjugal property.
Liquidation Procedure [Art. 102, FC] Procedure [Art. 129, FC]
of 1. Prepare an 1. Prepare an
assets and inventory of inventory of all
liabilities assets of ACP properties
and of 2. Amounts
spouses with advanced by
market values CPG in payment
2. Debts and of personal
obligations debts and
are paid with obligations shall
community be credited to the
property, and CPG
separate debts 3. Reimburse each
and spouse for the
obligations use of his/her
not charged to exclusive funds
ACP paid by in the acquisition
respective of property or for
assets of the value of his
spouses or her exclusive
a. If obligations exceed property, the
the assets of the ownership of

119
ACP, nothing is which has been
divided. Creditors vested by law in
can go after the the conjugal
separate properties partnership
of the spouses, 4. Debts and
which are solidarily obligations of
liable for the CPG shall be
deficiency paid out of the
3. Delivery of conjugal assets,
whatever otherwise both
remains in spouses are
their exclusive solidarily liable
property with their
4. The balance, exclusive
or net property
remainder, is 5. Remains of the
divided exclusive
equally properties shall
between the be delivered to
spouses, or in respective
accordance to owner-spouses.
the proportion 6. Indemnification
agreed upon for
in the loss/deterioration
marriage of movables
settlement, belonging to
irrespective of either spouse,
how much even due to
each brought fortuitous event,
into the used for the
community benefit of the
5. If personal family
obligations of 7. Net remainder of
a spouse CPG shall
exceed his/her constitute the
separate profits which
property, shall be divided
creditor can equally between
go after the husband and wife
share of the except when:
spouse on the a. A different proportion
net remainder or division was agreed
of the ACP, upon in the marriage
without settlements
prejudice to b. There has been a

120
 the provisions voluntary waiver or
of law on forfeiture of such share
forfeitures and as provided in the FC
delivery of c. Presumptive legitimes
presumptive are delivered to
legitimes common children
6. After d. Conjugal dwelling goes
covering all to:
community i. Spouse with whom majority
obligations of common children choose to
and remain (below 7 y.o. =
obligations of deemed to have chosen the
spouses, mother based on the tender
balance of years presumption)
separate ii. Whoever the court chooses
properties in case of lack of majority
shall be
delivered to
respective
spouses or
their heirs,
and they will
also divide
into two equal
shares
whatever is
left of the
community
assets,
without
prejudice to
the provisions
of law on
forfeitures and
delivery of
presumptive
legitimes
7. Presumptive
legitimes are
delivered to
common
children
8. Conjugal
dwelling goes
to:

121
 a. Spouse with whom
majority of common
children choose to
remain (below 7
y.o., = deemed to
have chosen the
mother based on the
tender years
presumption)
b. Whoever the court
chooses in case of
lack of majority
Rules in case of termination of marriage by death of one of
the spouses [Art. 104, FC]:
1. The community property shall be liquidated in
the same proceeding for the settlement of the
estate of the deceased spouse.
2. If no such judicial settlement proceeding is
instituted, surviving spouse shall liquidate the
community property either judicially or extra-
judicially, within one year from the death of
the deceased spouse.
a. If no liquidation is made within the period, any
disposition or encumbrance involving
community property of the terminated
marriage shall be void.
b. Non-compliance with liquidation procedures
would mean that a subsequently contracted
marriage will follow a regime of complete
separation of property.
Procedure for liquidation of properties of two marriages
[Art. 104, FC]:
1. Determine the capital, fruits, and income of each
community upon such proof as may be considered
according to the rules of evidence.
2. In case of doubt as to which community the existing
properties belong, they shall be divided between two
communities in proportion to the capital and duration
of each.

6. Regime of separation of property

Each spouse has complete control and ownership of his or her own
properties which will include “all earnings from his or her profession,
business or industry and all fruits, natural, industrial or civil, due or received
during the marriage form his or her separate property.” Expenses of the

122
family shall be shouldered by the spouses in proportion to their income, or,
in case of insufficiency or default thereof, to the current market value of
their separate properties.

7. Judicial separation of property

Art. 134, FC. 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.

If the spouses did not execute a written agreement regarding their property
regime prior to the marriage, they can no longer change it after the marriage
ceremony has taken place unless they have secured judicial approval.

Sufficient Causes and Grounds for Return to Previous Regime

Sufficient Causes for Judicial Grounds for Return to Previous

Separation of Property [Art. 135, Regime [Art. 141, FC]
FC]
Spouse of petitioner has been Termination of the civil interdiction
sentenced to a penalty which carries
with it the penalty of civil
interdiction
Spouse of petitioner is judicially Reappearance of absentee spouse
declared an absentee
Loss of parental authority of the Restoration of parental authority to
spouse of petitioner has been the spouse previously deprived of it
decreed by the court
Spouse of petitioner has abandoned When the spouse who left the
the latter or failed to comply with conjugal home without legal
his or her obligations to the family separation resumes common life
with the other
The spouse granted the power of When the court, being satisfied that
administration in the marriage the spouse granted the power of
settlements has abused that power administration will not again abuse
that power, authorizes the
resumption of said administration
At the time of the petition, the Reconciliation and resumption of
spouses have been separated in fact common life of the spouses who had
for at least 1 year and reconciliation been separated in fact for at least 1
is highly improbable. year

When after voluntary dissolution of

123
 the ACP or CPG 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.

Separation of Property

When it Agreed upon in the marriage settlements by the

applies spouses
Mandatory under Arts. 103 & 130, FC (subsequent
marriages contracted by a surviving spouse without
judicial settlement of previous property regime)
Judicial separation of property (Voluntary or just
cause)
Default property regime when there is reconciliation
between spouses after judicial separation of property
What it Present or future property or both
consists of Each spouse’s earnings from his or her own
profession, business, or industry
Natural, industrial or civil fruits of spouse’s separate
properties
May be total or partial. If partial, property not
considered separate is presumed to pertain to the
ACP
Liabilities Family expenses: Both spouses are liable in
proportion to their income; if insufficient, based on
the current value of their separate properties
Creditors for family expenses: Spouses solidarily
liable
Ownership, Spouses may own, dispose, possess, and administer
administration, separate
enjoyment, and estates without the consent of the other
disposition Administration of exclusive properties may be
transferred between spouses when:
1. One spouse becomes the other spouse’s
guardian
2. One spouse is judicially declared an
absentee
3. One spouse is given the penalty of civil
interdiction
4. One spouse becomes a fugitive
Conveyance between the spouses is allowed under

124
 Art. 1490, NCC.

In Re: voluntary dissolution of CPG of Sps. Bermas, G.R. No. L-20379

(1965): A voluntary separation of properties is not perfected by mere
consent but upon the decree of the court approving the same. The petition
for voluntary separation of property was denied because the children of the
1st and 2nd marriages were not informed; the separation of property may
prejudice the rights and shares of the children.

Maquilan v. Maquilan, G.R. No. 155409 (2007): A compromise agreement

with judicial recognition is valid, pending petition for declaration of nullity
of marriage.

8. Property regime of unions without marriage

Art. 147, FC Art. 148, FC
Applicability Man and woman living together as Man and woman living tog
husband and wife, with capacity to as husband and wife,
marry (Art. 5, without any legal capacitated to marry:
impediment) 1. Under 18 years
1. at least 18 years old 2. Adulterous
2. not violative of Art. 37 relationship
(incestuous void marriage) 3. Bigamous/
3. not violative of Art. 38 polygamous
(void marriage by reason of marriage
public policy) 4. Incestuous
4. not bigamous marriages u
Other void marriages due to absence of Art. 37
formal requisite 5. Void marriage
reason of p
policy under Ar
Salaries and Owned in equal shares Separately owned by parties
Wages
Properties Remains exclusive, provided there is Remains exclusive
acquired proof
through
exclusive funds
Properties Governed by rules on coownership Owned in common in propo
acquired by to respective contribution
both through
work and
industry

125
Properties Owned in equal shares since it is No presumption of
acquired while presumed to have been acquired through acquisition. When there
living together joint efforts evidence of joint acquisitio
none as to the extent of a
If one party did not participate in contribution, there is
acquisition, presumed to have presumption of equal sharin
contributed jointly, if the former’s effort
consisted in the care and maintenance of
family and household

N.B. Neither party can encumber or

dispose by acts inter vivos his share in
co-owned property without the consent
of the other party until cohabitation is
terminated.
Forfeiture Where only one party to a void marriage If one party is validly marri
is in good faith, share of party in bad another, his/her share in th
faith is forfeited: owned properties will accr
the ACP/CPG of his/her exi
In favor of their common children valid marriage.
In case of default of or waiver by any or If the party who acted in
all of the common children or their faith is not validly marrie
descendants, each vacant share shall another, his/her share sha
belong to the respective surviving forfeited in the same mann
descendants that provided in Art 147.
same rules on forfeiture
In the absence of such descendants, apply if both parties are in
such share belongs to the innocent party faith.

G. THEFAMILY
1. Concept of family
Art. 149, FC. 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.

Art. 150, FC. Family relations include those:

a. Between husband and wife
b. Between parents and children
c. Among other ascendants and descendants
d. Among brothers and sisters, full or half blood

126
The family is an institution that is governed by law. The internal aspect of
the family is sacred and inaccessible to law because law must respect the
freedom of action of man.

2. Effects on legal disputes

Art. 151, FC. 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 case must
be dismissed.

General Rule: No suit between members of the same family shall prosper.
[Art. 151, FC]

Exception: Suits between members of the same family shall prosper only if
it shall appear in a verified complaint or petition that:

a. Earnest efforts towards a compromise have been made;

b. Such efforts have failed; and
c. Such earnest efforts and the fact of failure must be alleged.

The case will be dismissed if it is shown that no such efforts were made.
[Art. 151, FC]

Exception to the Exception

A verified complaint or petition is not needed for matters not subject to

compromise.

Under Art. 2035, CC, the following cannot be subject of compromise:

a. Civil status of persons,

b. Validity of marriage or a legal separation,
c. Any ground for legal separation,
d. Future support (as it is presumed to be needed for the survival of the
one receiving support),
e. Jurisdiction of courts,

127
 f. Future legitime.

Note: In case of doubt, all presumptions favor the solidarity of the family.
[Art. 220, CC]

Art. 151, FC only applies when the case is exclusively among family
members. Whenever a stranger is included as a party to the case, Art. 151
does not apply. [Hontiveros v. RTC, G.R. No. 125465 (1999)]

Suits between brothers-in-law can prosper even without a verified complaint

or petition. [Guerrero v. RTC, G.R. No 109068 (1994)]

The enumeration of brothers and sisters as members of the same family does
not comprehend sisters-in-law and brothers-in-law. [Gayon v. Gayon, G.R.
No. L-28394 (1970)].

3. Family home
What Constitutes the Family Home
The family home is the dwelling house where family resides and the land on
which it is sustained. [Art. 152]

Limitations on the Family Home

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 other’s consent. It may also be constituted by an unmarried head of
a family in his or her own property. [Art. 156, FC]

The actual value of the family home shall not exceed, at the time of its
constitution, the amount of P300,000 in urban areas, and P200,000 in rural
areas, or such amounts as may hereafter be fixed by law. [Art. 157, FC]

A person may constitute, or be the beneficiary of, only one home. [Art. 161,
FC]

Who May Constitute the Family Home

The family home may be constituted
a. Jointly by the husband and wife; or
b. An unmarried head of the family [Art. 152, FC]

128
Note: A person may constitute and be the beneficiary of only one family
home [Art. 161, FC]

Beneficiaries of the Family Home

a. The husband and wife, or an unmarried person who is the head of a
family; and
b. Their parents, ascendants, descendants, brothers, and sisters whether
relationship be legitimate or illegitimate, who are living in the family home
and who depend on the head of the family for support. [Art. 154, FC]

Requisites to be a Beneficiary of the Family Home:

a. The relationship is within those enumerated in Art. 150, FC.
b. They live in the family home
c. They are dependent for legal support on the head of the family

Occupancy of a family home must be “actual” in order for one to be a

beneficiary. Actual occupancy, need not be by the owner of the house
specifically. Rather, the property may be occupied by the “beneficiaries”
enumerated in Art. 154, FC, which may include the in-laws where the family
home is constituted jointly by the husband and wife. But the law definitely
excludes maids and overseers. They are not the beneficiaries contemplated
by the Code. [Patricio v. Dario, G.R. No. 170829 (2006)]

The term "descendants" contemplates all descendants of the person or

persons who constituted the family home without distinction; hence, it must
necessarily include the grandchildren and great grandchildren of the spouses
who constitute a family home. However descendants cannot be considered
beneficiaries if they are supported by their own parents and not by the
ascendants who constituted the family home. [Patricio v. Dario, G.R. No.
170829 (2006)]

When Deemed Instituted

The family home is deemed constituted on a house and lot from the time it is
occupied as a family residence. [Art. 153, FC]

Exemption from Forced Sale, Execution, Attachment

General Rule: The family home is exempt from the following from the time
of its constitution and so long as any of its beneficiaries actually resides
therein:
a. Execution;
b. Forced sale;
c. Attachment [Art. 153].

Exceptions in the exemption of the family home from execution

a. Nonpayment of taxes.
b. Debts incurred prior to the constitution of the family home.
c. Debts secured by mortgages on the premises before or after such

129
 constitution.
d. Debts due to laborers, mechanics, architects, builders, material men
and others who have rendered service or furnished material for the
construction of the building. [Art. 155, FC]

Re: Claims Not Among Those in Art. 155

When a creditor whose claim is not among those mentioned in Art. 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 Art. 157, he may apply to the court which rendered the judgment for an
order directing the sale of the property under execution. [Art. 160, par. 1,
FC]

To warrant the execution of sale of the family home under Art 160, the
following facts need to be established:
a. there was an increase in actual value,
b. the increase resulted from voluntary improvements,
c. the increase in actual value exceeded the maximum limit allowed by
Art 157 [Eulogio vs. Bell, G.R. No. 186322 (2015)]

The actual value of the family home shall not exceed at the time of its
constitution the amount of 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.

Urban areas include chartered cities and municipalities. All others are
deemed to be rural areas. [Art. 157, FC]

Procedure to avail of right under Art. 160

a. The creditor must file a motion in the court proceeding where he
obtained a favorable decision for a writ of execution against the
family home.
b. There will be a hearing on the motion where the creditor must prove
that the actual value of the family home exceeds the maximum
amount fixed by the FC either at the time of its constitution or as a
result of improvements introduced thereafter.
c. If the creditor proves that the actual value exceeds the maximum
amount the court will order its sale in execution.
d. If the family home is sold for more than the value allowed, the
proceeds shall be applied as follows:
1. First, the obligation enumerated in Article 157 must be paid
2. Then the judgment in favor of the creditor will be paid, plus all the
costs of execution

130
 3. The excess, if any, shall be delivered to the judgment debtor

General Rule
The proof that the house is the family home must be alleged against
creditors; Applied the rule in Art. 160, FC. [Versola v. Mandolaria, G.R.
No. 164740 (2006)]

Note: The provisions of this Chapter shall also govern existing family
residences insofar as said provisions are applicable. [Art. 162, FC]

When the Family Home may be Sold

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. [Art.
158, FC]

Requirements for the sale, alienation, donation, assignment, or

encumbrance of the family home
a. The written consent of the following:
1. the person constituting it;
2. the spouse of the person constituting it; and
3. the majority of the beneficiaries who are of legal age [Art. 158, FC].

When Terminated
The family home shall continue despite the death of one or both of the
spouses or of the unmarried head of the family:
a. for a period of ten years; or
b. for as long as there is a minor beneficiary.

And the heirs cannot partition the same unless the court finds compelling
reasons therefor.
The rule shall apply regardless of whoever owns the property or constituted
the family home [Art. 159, FC]

Article 159 imposes the proscription against the immediate partition of

the family home regardless of its ownership. This signifies that even if the
family home has passed by succession to the co-ownership of the heirs, or
has been willed to any one of them, this fact alone cannot transform the
family home into an ordinary property, much less dispel the protection cast
upon it by the law. The rights of the individual co-owner or owner of the
family home cannot subjugate the rights granted under Article 159 to the
beneficiaries of the family home. [Arriola v. Arriola, G.R. No. 177703
(2008)]

H. PATERNITY AND FILIATION

131
The filiation of children may be by nature or by adoption. Natural
filiation may be legitimate or illegitimate. [Art. 163, FC]

Status Children Who Rights Effects on

Have this Succession
Status
Legitimate a. Conceived OR a. Bear the Legitimate
born during surnames children are
the valid of the entitled to 1/2
marriage of father and of the estate of
the parents the mother the parent
[Art. 164, FC] b. Receive divided
b. Conceived support amongst
through from themselves
artificial parents, [Art. 888, CC]
insemination ascendants,
[Art. 164, FC] and
c. Children of a brothers/sis
subsequent ters in
marriage (after proper
declaration of cases
presumptive c. Entitled to
death) legitimate
conceived and other
prior to its successiona
termination l rights
[Art. 43, FC] [Art. 174,
d. Conceived or FC]
born before d. Claim
the final legitimacy
judgement of [Art. 173,
annulment FC]
under Art. 45
or absolute
nullity under
Art. 36 [Art.
54, FC]
e. Conceived or
born of the
subsequent
marriage
under Art. 53
[Art. 54, FC]
f. Legitimated
children* [Art.
177, FC]

132
 g. Adopted
Children**
[RA 8552]
Illegitimate Conceived AND a. Bear the Each
born outside a surname of the illegitimate
valid marriage [Art. mother child is entitled
165, FC] b. Bear the to an amount
surname of the 1/2 the share of
father if filiation a legitimate
has been child [Art. 176,
expressly FC]
recognized by the
father through:
record of birth,
public document,
or private
handwritten
instrument
c. Receive
support
d. Entitled to
successional
rights [Art 176,
FC]
e. Establish
illegitimate
filiation [Art 175,
FC]
Legitimated* Conceived AND Same as Same as
born outside a valid Legitimate Child Legitimate
marriage provided [Art. 179, FC] Child
that:
a. At the time of
conception: the
parents were NOT
disqualified to marry
each other (unless
the impediment was
minority of either or
both of them) [Art.
177, FC] AND
b. The parents
subsequently enter
into a valid marriage
[Art. 178, FC]

133
 Adopted** Those adopted From the From Domestic
through Domestic Domestic Adoption Act:
[RA 8552] or Adoption Act: a. Same as
Intercountry a. Same as Legitima
Adoption [RA 8043] Legitimate Child te Child
[Sec. 17, RA [Sec. 18,
8552] RA
b. Right to 8552]
rescind adoption BUT the
under specific adopted child
cases [Sec. 19, RA cannot inherit
8552] by
representation
because the
relationship is
only between
adopter and
adoptee
[Sayson v. CA,
G.R. No.
89224-25
(1992)]
b. b. May
also
inherit
from
biologic
al
parents
if they
left a
will
[Sec. 18,
RA
8552]

1. Legitimate children
Art. 164, FC. 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.

134
A legitimate child is one that is born in lawful wedlock or within a
competent time afterwards.

The time of birth is the criterion of legitimacy. [Tolentino]

WHO ARE LEGITIMATE CHILDREN?

1. Children conceived OR born during the valid marriage of the

parents [Art. 164, FC]
2. Children conceived through artificial insemination [Art. 164,
FC]
3. Children of a subsequent marriage conceived prior to its
termination [Art. 43, FC]

This refers to those subsequent marriages which were terminated after the
reappearance of the spouse presumed dead.

4. Children conceived or born before the judgement of annulment

under Art. 45 or absolute nullity under Art. 36 has become final
and executory [Art. 54, FC]
5. Children conceived or born of the subsequent marriage under
Art. 53 [Art. 54, FC]
6. Legitimated children [Art. 177, FC]
7. Adopted Children [RA 8552]

NATURAL/BIOLOGICAL

A child conceived or born during a valid marriage is presumed to belong to

that marriage, regardless of the existence of extramarital relationships.
[Liyao v. Liyao, G.R. No. 138969 (2002)]

ARTIFICIAL INSEMINATION [Art. 164, FC]

135
Artificial insemination is the impregnation of a female with the semen from
male without sexual intercourse.

The child conceived through artificial insemination with the consent of both
husband and wife is legitimate.

The FC does not require, as a condition for the legitimacy of the child, the
impotence of the husband.

Even without the initial consent, the child can still be legitimated so long as
the husband subsequently gives his consent before the child is born through
AI.

Requisites to be considered legitimate:

a. Artificial insemination made on wife

b. Sperm comes from any of the following:

1. Husband
2. Third Person Donor
3. Husband and third person donor

c. In case of donor sperm, husband and wife must authorize/ratify

insemination in a written instrument.

1. Executed & signed by husband and wife before the birth of the
child.
2. Recorded in the civil registry together with the birth certificate
of the child. [Art. 164, FC]

Dual consent is required whether the semen used comes from the husband or
a third person donor. [Tolentino]

Common children born before the annulment are legitimate, and therefore

136
entitled to support from each of the spouses. [De Castro v. Assidao-De
Castro, G.R. No. 160172 (2008)]

2. Proof of filiation
Proof of filiation is necessary:
1. Where the child is born after 300 days following the termination of the
marriage → child has no status, and whoever alleges legitimacy must prove
it.
2. If the legitimacy of a child conceived or born in wedlock is impugned and
the plaintiff has presented evidence to prove any of the grounds provided in
Article 166 → proof of filiation may be used as a defense. [Tolentino]

Legitimate children may establish their filiation by any of the following

[Art. 172, FC]:
a. Primary Evidence (for voluntary recognition)
1. Their record of birth appearing in the civil registry or a final judgement.
2. An admission of his filiation by his parent in a public document or a
private handwritten instrument and signed by said parent.
b. Secondary Evidence (for involuntary recognition)
1. Proof of open and continuous possession of status as legitimate child.
2. Any other means stated by the rules of court or special laws.
Note: Only in the absence of primary evidence can secondary evidence be
admitted

Action for Claiming Filiation (Legitimate Children) [Art. 173, FC]:

a. The child can bring the action during his or her lifetime.

b. If the child dies during minority or in a state of insanity, such action

shall be transmitted to his heirs, who shall have a period of five years
within which to institute the action.
c. The action commenced by the child shall survive notwithstanding the
death of either or both of the parties.

Rights of Legitimate Children [Art. 174, FC] 3S → Support, Surname,

Succession
a. To bear the Surnames of the father and the mother, in conformity with
the provisions of the CC on surnames.
b. To receive Support from their parents, their ascendants, and in proper
cases, their brothers and sisters, in conformity with the provisions of
the Code on Support.
c. To be entitled to the legitimate and other Successional rights granted
to them by the CC.

Future support cannot be the subject of a compromise, pursuant to Article

2035 of CC.
The reason behind this prohibition is because the right to support is founded

137
upon the need of the recipient to maintain his existence, and thus the
renunciation of such will be tantamount to allowing the suicide of the person
or his conversion to a public burden, which is contrary to public policy. [De
Asis v. CA, G.R. No. 127578 (1999)]

3. Illegitimate children
Art. 165, FC. Children conceived and born outside a valid marriage are
illegitimate, unless otherwise provided in this Code.

WHO ARE ILLEGITIMATE CHILDREN?

General rule: Those conceived and born outside of a valid marriage. [Art.
165, FC]

Exceptions

a. Children of marriages void under Art. 36 (psychological incapacity); and

b. Under Art. 53 (subsequent marriages which did not comply with Art. 52)
[Sempio- Dy]

ACTION FOR CLAIMING ILLEGITIMATE FILIATION

Illegitimate children may establish their illegitimate filiation in the same

way and on the same evidence as legitimate children. [Art. 175, FC]

a. For actions based on primary evidence, the same periods stated in Art.
173 of FC apply - lifetime of the child, will not be extinguished by death of
either parties

b. For actions based on secondary evidence, the action may only be brought
during the lifetime of the alleged parent.

The same kind of evidence provided in Art. 172 for establishing legitimate
filiation may be used to prove the filiation of illegitimate children, and the
action for this purpose must be brought within the same period and by the
same parties as provided in Article 173. [Art. 175, FC]

138
However, if the evidence to prove the filiation is secondary, the action must
be brought within the lifetime of the alleged parent. [Art. 175, FC]

Primary evidence

Baptismal certificates are given probative value only for births before 1930.
Birth certificates must be signed by the parents and sworn for it to be
admitted as evidence. [Mendoza v. Mella, G.R. No. L-18752 (1966)]

Signature of the father on the birth certificate is considered as an

acknowledgement of paternity and mere presentation of a duly authenticated
copy of such certificate will successfully establish filiation. [Eceta v. Eceta,
G.R. 157037 (2004)]

Unsigned birth certificates are not evidence of recognized filiation. [Baluyut

v. Baluyut, G.R. No. L-33659 (1990)]

The due recognition of an illegitimate child in a record of birth, a will, a

statement before a court of record, or in any authentic writing, is in itself a
consummated act of acknowledgement of the child, and no further court
action is required. [De Jesus v. Estate of Decedent Juan Gamboa Dizon,
G.R. No. 142877 (2001)]

Secondary evidence

Rule 130, Sec. 40 is limited to objects commonly known as family

possessions reflective of a family's reputation or tradition regarding pedigree
like inscriptions on tombstones, monuments, or coffin plates. [Jison v. CA,
G.R. No. 124853 (1998)]

"Su padre [Your father]" ending in a letter is only proof of paternal

solicitude and not of actual paternity. Signature on a report card under the
entry of "Parent/Guardian" is likewise inconclusive of open admission.
[Heirs of Rodolfo Bañas v. Heirs of Bibiano Bañas, G.R. No. L-25715

139
(1985)]

Mere possession of status as an illegitimate child does not make an

illegitimate child recognized but is only a ground for bringing an action to
compel judicial recognition by the assumed parent. [Gono-Javier v. CA,
G.R. No. 111994 (1994)]

To prove open and continuous possession of the status of an illegitimate

child, there must be evidence of the manifestation of the permanent intention
of the supposed father to consider the child as his, by continuous and clear
manifestations of parental affection and care, which cannot be attributed to
pure charity. [Perla v. Baring, G.R. No. 172471 (2012)]

Meanwhile, the lack of participation of the supposed father in the

preparation of a baptismal certificate renders this document incompetent to
prove paternity. Baptismal certificates are per se inadmissible in evidence as
proof of filiation and they cannot be admitted indirectly as circumstantial
evidence to prove the same. [Perla v. Baring, supra]

By "open and continuous possession of the status of a legitimate child" is

meant the enjoyment by the child of the position and privileges usually
attached to the status of a legitimate child, like bearing the paternal surname,
treatment by the parents and family of the child as legitimate, constant
attendance to the child's support and education, and giving the child the
reputation of being a child of his parents. [De Jesus v. Syquia, G.R. No. L-
39110 (1933)]

Other evidence

DNA evidence can be used as proof of paternity. [Agustin v. CA, G.R. No.
162571 (2005)]

DNA evidence can still be used even after the death of the parent. [Estate of

140
Rogelio Ong v. Diaz, G.R. No. 171713 (2007)]

Marriage certificates cannot be used as proof of filiation. [Lim v. CA, G.R.

No. L-39381 (1975)]

There are four significant procedural aspects of a traditional paternity action

that parties have to face: a prima facie case, affirmative defenses,
presumption of legitimacy, and physical resemblance between the putative
father and the child. A prima facie case exists if a woman declares —
supported by corroborative proof — that she had sexual relations with the
putative father; at this point, the burden of evidence shifts to the putative
father. Further, the two affirmative defenses available to the putative father
are: (1) incapability of sexual relations with the mother due to either
physical absence or impotency, or (2) that the mother had sexual relations
with other men at the time of conception. [Gotardo v. Buling, G.R. No.
165166 (2012)]

RIGHTS OF ILLEGITIMATE CHILDREN

Art. 176, FC. 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 nonfiliation
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 No. 9255
in 2004).

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. The legitime of each illegitimate child shall consist of one half of
the legitime of a legitimate child. [Art. 176, FC]

141
Rights of Illegitimate Children [Art. 176, FC]

a. Use the surname and be under the parental authority of the mother

b. However, may use the surname of father if:

1. Their filiation has been expressly recognized by the father through the
record of birth appearing in the civil register; or

2. There is an admission in a public document or private handwritten

instrument made by the father.

3. Provided, the father has the right to institute an action before the regular
courts to prove non-filiation during his lifetime [RA 9255]

4. The use of the word “may” in Art. 176 readily shows that an
acknowledged illegitimate child is under no compulsion to use the surname
of his illegitimate father. The word “may” is permissive and operates to
confer discretion upon the illegitimate children. [Grande v. Antonio, G.R.
No. 206248 (2014)]

c. Shall be entitled to support in conformity with the FC.

d. Legitime shall consist of one-half of the legitime of a legitimate child.

The writ of habeas corpus does not distinguish between a mother of a

legitimate and a mother of an illegitimate child who is deprived of rightful
custody of her child. [David v. CA, G.R. No. 111180 (1995)]

The order of payment of allowance need not be conditioned on the grant of

custody of the child., since under Art. 204 of FC, a parent may fulfill his
obligation to support by paying the allowance fixed by the court. [David v.
CA, supra]

Compulsory acknowledgment and support of the child are proper as there is

no legal impediment in doing so. The crime of rape carries with it the
obligations to acknowledge the child if the character of its origin does not
prevent it, and to support the same. [People v. Namayan, G.R. No. 106539
(1995)]

142
Criminal liability for neglect of a child under PD 603 does not depend on
whether the other parent is also guilty of neglect. The irresponsible parent
cannot exculpate himself from the consequences of his neglect by invoking
the other parent’s faithful compliance with his or her own parental duties
because to allow such defeats the prescription that in all questions regarding
the care, custody, education and property of the child, his welfare shall be
the paramount consideration. [De Guzman v. Perez, G.R. No. 156013
(2006)]

Although the issuance of TPO under RA 9262 may include the grant of legal
support for the wife and the child, this assumes that both are entitled to a
protection order and to legal support. Illegitimate children are entitled to
support and successional rights, but their filiation must be duly proved
through a judicial action for compulsory recognition or a direct action for
support where the issue of compulsory recognition may be integrated and
resolved. [Dolina v. Vallecera, G.R. No. 182367 (2010)]

Summary proceedings under Rule 108 of RC and Art. 412 of CC may be

used only to correct clerical or innocuous errors, not to alter or increase
substantive rights, such as those involving the legitimacy or illegitimacy of a
child. Where the effect of a correction in a civil registry will change the civil
status of a child from legitimate to illegitimate, the same cannot be granted
except only in an adversarial proceeding. Moreover, a petition for substantial
change in the civil registry should implead not only the civil registrar, but
also all other persons who have or claim to have any interest that would be
affected thereby. [Republic v. Labrador, G.R. No. 132980 (1999)]

The use of the word “may” in Art. 176 of FC, as amended by RA 9255,
shows that an acknowledged illegitimate child is not compelled to use the
surname of his illegitimate father. Illegitimate children shall use the surname
of their mother, and the discretion on the part of the illegitimate child to use
the surname of his father is conditional upon proof of compliance with the
IRR of RA 9255, including the execution of an Affidavit to Use the Surname
of the Father. [Barcelote v. Republic and Tinitigan, G.R. No. 22095 (2017)]

143
4. Action to impugn legitimacy
Legitimacy of a child may be impugned only on the following grounds:
[Art. 166, FC]
a. Physical impossibility for the husband to have sexual intercourse with his
wife within the first 120 days of the 300 days which immediately preceded
the child's birth due to:
1. Physical incapacity of the husband to have sexual intercourse
with his wife
2. Husband and wife were living separately as to make sexual
intercourse impossible
3. Serious illness of the husband absolutely preventing sexual
intercourse
b. Other biological or scientific reasons, except Artificial Insemination.
c. And in case of Artificial Insemination, the written consent of either
parent was vitiated through fraud, violence, mistake, intimidation, or undue
influence.

Physical impossibility of access

To overthrow the presumption of legitimacy, it must be shown beyond all
reasonable doubt that there was no access as could have enabled the husband
to be the father of the child. Moral impossibility of access, such as when the
wife is in open adultery, or there is bitter hatred between the spouses, cannot
defeat the presumption of legitimacy. [Tolentino]

Impotence of husband
Impotence is the inability of the male organ of copulation to perform its
proper function. It does not include sterility, which refers to the inability to
procreate. [Tolentino]

Spouses living separately

The separation between the spouses must be such as to make sexual access
impossible.
This may take place when they reside in different countries or provinces, and
they have never been together during the period of conception. [Tolentino]

Serious illness of husband

The illness must be of such a nature as to exclude the possibility of his
having sexual intercourse with his wife. [Tolentino]

Mere proximate separation between the spouses is not sufficient physical

separation to constitute as ground for impugning legitimacy.
[Macadangdang v. CA, G.R. No. L-49542 (1980)]

Serious illness of the husband which absolutely prevented him from having
sexual intercourse with his wife, like if the husband was already in comatose
or in a vegetative state, or sick with syphilis in the tertiary stage so that

144
copulation was not possible. But tuberculosis, even in its most crucial stage,
does not preclude copulation between the sick husband and his wife. [Andal
v. Macaraig, G.R. No. 2474 (1951)]

Blood-type matching is an acceptable means of impugning legitimacy,

covered by Art. 166(2), under "biological or other scientific reasons." But
this is only conclusive of the fact of non-paternity. [Jao v. CA, G.R. No. L-
49162 (1987)]

Art. 167, FC. The child shall be considered legitimate although the mother
may have declared against its legitimacy or may have been sentenced as an
adulteress.

Legitimacy with Regard to the Mother:

a. Child considered legitimate although [Art. 167, FC]:
1. Mother may have declared against its legitimacy
2. Mother may have been sentenced as an adulteress (also applies to wife
who was raped)
b. If the marriage is terminated and the mother contracted another marriage
within 300 days after the termination of the former marriage, the following
rules shall govern in the absence of proof to the contrary [Art 168, FC]:
1. If born before 180 days after the solemnization of the subsequent marriage
– child is considered conceived during the former marriage, provided it be
born within 300 days after termination of the former marriage
2. If born after 180 days following the celebration of the subsequent
marriage – child is considered conceived during such marriage, even if it be
born within 300 days after the termination of the former marriage

Day of Birth of the Child Relative to the Status of the Child [Art
2 Marriages 168, FC]
1st marriage: within 300 days of Legitimate to 1st Marriage
termination AND 2nd marriage: before
180 days after solemnization
1st marriage: within 300 days of Legitimate to 2nd Marriage
termination AND 2nd marriage: after 180
days following solemnization

Art. 169, FC. 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.

The legitimacy or illegitimacy of a child born after 300 days following the
termination of the marriage – burden of proof upon whoever alleges the
status. [Art. 169, FC]

If nobody asserts the legitimacy or illegitimacy of the child described in Art.

169, the child should be considered illegitimate unless legitimacy is proved.

145
Legitimacy cannot be presumed here since the birth was beyond the 300-day
period of gestation. While it goes against the policy of law to lean in favor of
legitimacy, this interpretation is better than the anomalous situation created
by Art. 169, which is a child without a status. [Tolentino]

ACTION FOR IMPUGNING LEGITIMACY

An action to impugn legitimacy may be brought within 1, 2, or 3 years from
the knowledge of the birth or of registration of birth. [Arts. 170 and 171, FC]
a. Within 1 year - If the husband or any heirs reside in the same city or
municipality where the child was born or his birth was recorded.
b. Within 2 years - If the husband or all heirs live in the Philippines but
do not reside in the same city or municipality where the child's birth
took place or was recorded.
c. Within 3 years - if the husband or all heirs live outside the
Philippines when the child's birth took place or was recorded in the
Philippines.

If the birth of the child has been concealed or was unknown to the husband,
the above periods shall be counted:
a. From the discovery or knowledge of the birth of the child, or
b. From the discovery or knowledge of its registration, whichever is earlier.

General rule: Only the husband can impugn the legitimacy of a child. If he
does not bring an action within the prescribed periods, he cannot file such
action anymore thereafter, and this is also true with his heirs.

Exception: That the heirs of the husband may file the action or continue
the same within the periods prescribed in Art. 170 [Art. 171, FC]:
a. If the husband died before the expiration of the period fixed for bringing
his action
b. If he should die after the filing of the complaint without having desisted
therefrom
c. If the child was born after the death of the husband.

Example: If the husband was living in Dubai and the child was born in
Quezon City, and he had older children (heirs) also living in Quezon City,
the period for impugning legitimacy would be within 1 year from knowledge
of birth or registration. Although the husband resided abroad, he still had
heirs residing in the same city.

Legitimacy can only be attacked directly. [Sayson v. CA, G.R. No. 89224-
25 (1992)]

5. Legitimated children
Art. 177, FC. Children conceived and born outside of 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

146
or both of them were below eighteen (18) years of age, may be legitimated
(as amended by RA No. 9858, 2009).

General rule: "Legitimated" children are illegitimate children who because

of the subsequent marriage of their parents are, by legal fiction, considered
legitimate.

Requisites for Legitimation:

a. The child must have been conceived and born outside of wedlock; and
b. The parents, at the time of the child's conception, were not
disqualified by any impediment to marry each other, or disqualified
only because either or both of them were below 18 years old. [Art.
177, as amended by RA 9858, FC]

Procedure and Effects:

a. Legitimation shall take place by a subsequent valid marriage between
the parents. The annulment of a voidable marriage shall not affect the
legitimation. [Art. 178, FC]

b. Effects of legitimation shall retroact to the time of the child’s birth

[Art. 180, FC]
c. Legitimation of children who died before the celebration of the
marriage shall benefit their descendants [Art. 181, FC]

Grounds for Impugning Legitimation:

a. The subsequent marriage of the child's parents is void.
b. Those born under these circumstances:
1. There was an impediment to the marriage at the time of
conception AND
2. The subsequent marriage of the parents is valid
c. The child is not really the child of the alleged parents. [Sempio-Dy]

Legitimation may be impugned only by those who are prejudiced in their

rights, within five years from the time their cause of action accrues. [Art.
182, FC]

Rights of legitimated children

Legitimated children have the same rights as those of legitimate children.
[Art. 179, FC]

When an illegitimate child is subsequently legitimated by reason of

marriage, he shall be allowed to use his mother’s surname as his middle
name and his father’s surname as his surname. Thus, as a legitimated child,
Julian shall use the surnames of both his mother and father. [In Re: Petition
for Change of Name of Julian Lin Carulasan Wang, G.R. No. 159966 (2005)

147
I. ADOPTION
Adoption is a juridical act, a proceeding in rem, which creates between two
persons a relationship similar to that which results from legitimate paternity
and filiation. [Lazatin v. Campos, G. R. No. L-43955-56 (1979)]

Since adoption is wholly and entirely artificial, to establish the relation the
statutory requirements must be strictly carried out; otherwise, the adoption is
an absolute nullity. [Republic v. CA and Caranto, G.R. No. 103695 (1996)]

LEGITIMATION ADOPTION
Legal effect The law merely makes The law creates by fiction a
legal what exists by relation which did not in fact
nature. exist.
Persons Natural children Strangers (generally)
Affected
Procedure Extrajudicial acts of Always judicial
parents
Who should Both parents Both parents, except:
apply 1. One spouse seeks to adopt
the legitimate child of the
other
2. One spouse seeks to adopt
his own illegitimate child,
provided that the other
spouse has signified their
consent thereto
3. Spouses are legally
separated from each other
Effect on Same status and rights Creates a relationship only
parent-child with that of a legitimate between the child and the
relationship child not only in relation adopting parents [Sayson v.
to the legitimizing CA, G.R. No. 89224-25
parents but also to other (1992)]
relatives.

1. Domestic Adoption Law

a. Who can adopt

1. Filipino Citizens [Sec. 7(a), RA 8552]

a. Of legal age
b. With full civil capacity and legal rights
c. Of good moral character and has not been convicted of any crime
involving moral turpitude
d. Emotionally and psychologically capable of caring for children
e. At least sixteen (16) years older than adoptee, except when adopter is

148
 biological parent of the adoptee or is the spouse of the adoptee’s
parent
f. In a position to support and care for his/her children in keeping with
the means of the family
g. Has undergone pre-adoption services
2. Aliens [Sec. 7(b), RA 8552]
Same for Filipinos provided further that:
a. His/her country has diplomatic relations with the Philippines
b. Has been living in the Philippines for 3 continuous years prior to the
filing of application and maintains such residence until the decree is
entered
 Note: absences not exceeding 60 days per 1 year for professional,
business, or emergency reasons are allowed
c. 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
d. His/her government allows the adoptee to enter his/her country as
his/her adoptee and reside there permanently as an adopted child
e. Has submitted all the necessary clearances and such certifications as
may be required
Requirements of residency and certification of legal capacity may be
waived under the following circumstances:
a. Adopter is a former Filipino Citizen who seeks to adopt a relative
within the 4th degree of consanguinity or affinity.
b. Adopter seeks to adopt the legitimate child of his/her Filipino spouse
c. Adopter 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
 Note: Requirements may not be waived for an alien married to a
former Filipino
3. Guardians [Sec. 7(c), RA 8552]
With respect to their wards, after the termination of the guardianship and
clearance of his/her accountabilities.
General Rule: Husband and wife must jointly adopt
Exception [Sec. 7]:
a. One spouse seeks to adopt the legitimate child of the other
b. One spouse seeks to adopt his own illegitimate child, provided that the
other spouse has signified their consent thereto
c. Spouses are legally separated from each other

b. Who can be adopted

Those who can be adopted [Sec. 8, RA 8552]:

1. Minor (below 18) who has been administratively or judicially declared
available for adoption
2. Legitimate son/daughter of one spouse by another

149
3. Illegitimate son/daughter by a qualified adopter to improve the child’s
status to that of legitimacy
4. A person of legal age if, prior to the adoption, said person has been
consistently considered and treated by the adopter(s) as his/her child since
minority
5. A child whose previous adoption has been rescinded
6. A child whose biological or adoptive parent(s) has died, provided that no
proceedings shall be initiated within 6 months from the time of death of said
parent(s)

Exceptions to the Requirement of a Certification that the Child is

Available for Adoption [Sec. 4, RA 8552]:
1. Adoption of an illegitimate child by his/her biological parent;
2. Adoption of a child by his/her stepparent;
3. Adoption by a relative within the 4th civil degree by
consanguinity or affinity

Persons whose written consent is necessary for adoption [Sec. 9, RA

8552]
1. The prospective adoptee if 10 years or older
2. The prospective adoptee’s biological parents, legal guardian or
the government instrumentality or institution that has custody
of the child
3. The prospective adopters’ legitimate and adopted children who
are 10 years or older
4. The prospective adopters’ illegitimate children, if any, who are
10 years or older and living with them
5. The spouse, if any, of the person adopting or to be adopted.
Note: A decree of adoption shall be effective as of the date the original
petition was filed. It also applies in case the petitioner dies before the
issuance of the decree of adoption to protect the interest of the adoptee. [Sec.
13, RA 8552]

c. Foundlings

Foundling shall refer to a deserted or abandoned infant or a child found, with

parents, guardian, or relatives being unknown, or a child committed in an
orphanage or charitable or similar institution with unknown facts of birth
and parentage and registered in the Civil Register as a foundling. [Sec. 3(h),
Rules And Regulations To Implement The Domestic Adoption Act Of 1998]

When is a child considered a foundling?

It shall be the duty of the DSWD 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

150
declared abandoned. [Sec. 5, RA 8552]

If efforts to locate the child's parent/s fail, the child shall be registered as a
foundling and within three (3) months from the time he/she is found, be the
subject of legal proceedings where he/she shall be declared abandoned. [Sec.
5, Rules And Regulations To Implement The Domestic Adoption Act Of
1998]
Domestic laws on adoption also support the principle that foundlings are
Filipinos. These laws do not provide that adoption confers citizenship upon
the adoptee. Rather, the adoptee must be a Filipino in the first place to be
adopted. The Inter-Country Adoption Act (R.A. No. 8043), the Domestic
Adoption Act (R.A. No. 8552) and the Court's A.M. No. 02- 6-02-SC or the
"Rule on Adoption," all expressly refer to "Filipino children" and include
foundlings as among Filipino children who may be adopted. [Poe-
Llamanzares v. COMELEC, G.R. No. 221697 (2016)]

d. Pre-Adoption Procedures

a. Voluntary commitment by biological parent(s) wanting to put their

child up for adoption
1. Counseling on their options other than adoption
2. Explaining to them the implications of losing their parental authority
over the child
3. Continuing services shall be provided after relinquishment to cope
with feelings of loss, etc. and other services for the reintegration to the
community of the biological parent(s)
4. Biological parent(s) who decided to put the child for adoption shall
sign the Deed of Voluntary Commitment (DVC), which shall be
rescissible within 3 months from signing of the same
b. Involuntary commitment of abandoned/neglected child
1. Filing of a petition at Regional DSWD in the form of an affidavit and
with the required supporting documents
2. Posting of the petition, then recommendation by the Regional Director
of the DSWD (5 days each)
3. Issuance of certification by DSWD Secretary declaring the child
legally available for adoption within 3 months following involuntary
commitment
c. Required supporting documents for a petition for the declaration of
involuntary commitment:
1. Social Case Study Report by DSWD / LGU / institution charged with
child’s custody
2. Proof of efforts to locate the child’s parents/known relatives
a. Written certification that a local/national radio/TV case was
aired on 3 different occasions
b. Publication in 1 newspaper of general circulation
c. Police report/barangay certification of due diligence

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 d. Returned registered mail to last known address of parents
3. Birth certificate, if available
4. Recent photo and photo upon abandonment of child

e. Adoption Procedures

Note: DSWD must certify the child as legally available for adoption as a
prerequisite for adoption proceedings. [RA 9253]

After the decree of adoption, the court may also issue a travel authority, if
needed.

The case study report by the DSWD/LGU is indispensable. Without it, the
adoption decree shall be void. [DSWD v. Judge Belen, RTJ-96- 1362 (1997)]

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153
 f. Who may not adopt

Those who may not adopt [Art. 184, FC, amended by RA 8552]:
1. The guardian, with respect to the ward, prior to the approval of the final
accounts rendered upon the termination of the guardianship
2. Any person convicted of a crime of moral Turpitude

g. Rights of an Adopted Child

1. Parental Authority [Sec. 16, RA 8552]

Except in cases where the biological parent is the adopter’s spouse, all legal
ties between biological parent and adoptee shall be severed, and the same
shall then be vested on the adopters.

The general effect of the adoption decree is to transfer to the adopting

parents the parental authority of the parents by nature, as if the child had
been born in lawful wedlock. [Tolentino]

The relationship established by adoption is limited to the adopting parent

and does not extend to his other relatives, except as expressly provided by
law. [Tolentino]

The law does not prohibit the biological parent(s) from entering an
agreement with the adopters on post adoption visitation. Neither do our laws
compel the adopters to grant visitation rights if such is not beneficial to the
child. [Aguiling-Pangalangan]

2. Legitimacy [Sec. 17, RA 8552]

The adoptee shall be considered the legitimate son/daughter of the adopters

for all intents and purposes, and as such is entitled to all rights and
obligations provided by law to legitimate children born to them without
discrimination of any kind. The adoptee is entitled to love, guidance, and
support in keeping with the means of the family.

3. Succession [Sec. 18, RA 8552]

In legal and intestate succession, the adopter and the adoptee shall have
reciprocal rights of succession without distinction from legitimate filiation.
However, if the adoptee and his/her biological parents had left a will, the law
on testamentary succession shall govern.

Legal or intestate succession to the estate of the adopted shall be governed

by the following rules:
a. Legitimate and illegitimate children, descendants and the surviving spouse
of the adoptee shall inherit in accordance with the ordinary rules of
legal/intestate succession.
b. When the surviving spouse OR illegitimate children AND adopters

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concur, they shall inherit on a 50-50 basis.
c. When the surviving spouse AND illegitimate children AND adopters
concur, they shall inherit on a 1/3-/1/3-1/3 basis.
d. When only adopters survive, they shall inherit 100% of the estate.
e. When only collateral blood relatives survive, ordinary rules of legal or
intestate succession shall apply. [Art. 190 (as amended), FC]

Between adoptee and adopter

The adopter and adoptee have reciprocal rights of succession without
distinction from legitimate children in legal and intestate succession. [Sec.
18, RA 8552]

Between adoptee and adopter’s relatives

The relationship created by adoption is exclusively between the adopter and
the adopted. Hence, the adopted child has no right to inherit from the
relatives of his adopted parents. [Aguiling-Pangalangan]

While an adopted child has the same rights as a legitimate child, these rights
do not include the right of representation. The relationship created by the
adoption is between only the adopting parents and the adopted child and
does not extend to the blood relatives of either party. [Sayson v. CA, supra]

Between adoptee and biological parents

One effect of adoption is that the adopted shall remain an intestate heir of his
parents and other blood relatives. [Art. 189, FC] Since many biological
parents relinquish their child for adoption by reason of poverty or emotional
unpreparedness, their biological child should not be prevented from
inheriting if they were able to improve their lot. There is nothing that
precludes the biological parents to give their biological child his or her
rightful share in their last will and testament. [Aguiling- Pangalangan]

4. Name [Art. 365, CC.]

An adopted child shall bear the surname of the adopter.

While an effect of adoption is that the adoptee shall bear the surname of the
adopter, the change of surname of the adopted child is more an incident
rather than the object of adoption proceedings. The purpose of adoption is to
effect a new status of relationship between the child and his or her adoptive
parents, and the change of name is more of an incident only than the object
of the proceeding. [Republic v. CA and Wong, G.R. No. 97906 (1992)]

Sec. 13 of RA 8552 allows the change of first name to be instituted in the

same proceeding as the adoption: “the decree of adoption shall state the
name by which the child is to be known.”

The law is silent as to what middle name the adoptee may use but the SC has

155
held that an adoptee is entitled to all the rights provided by law to a
legitimate child, including the right to bear the surname of her father and
mother. [In re: Adoption of Stephanie Nathy Astorga Garcia, G.R. No.
148311 (2005)]

5. Nationality

Adoption does not confer citizenship of the adopter to the adopted. Under
Sec. 3, Art. IV of the Constitution, Philippine citizenship may be
lost/acquired [only] in the manner provided by law. The adoption of an alien
is not a means of acquiring Philippine citizenship. A Filipino adopted by an
alien does not lose his Philippine citizenship.

The right to confer citizenship belongs to the State (political) and cannot be
granted by a citizen through adoption. Adoption creates a relationship
between the adopter and adoptee, not between the State and the adoptee.
[Tolentino]

h. Rescission of Adoption

Adoptee may file action for rescission, with the assistance of DSWD if
he/she is a minor or over 18 but incapacitated, based on the following
grounds [Sec. 19, RA 8552]:
1. Repeated physical and verbal maltreatment by adopters despite having
undergone counseling
2. Attempt on life of adoptee
3. Sexual assault or violence
4. Abandonment or failure to comply with parental obligations

Adoption is a privilege that is governed by the state’s determination on what

it may deem to be for the best interest and welfare of the child, and as a
corollary, a right of action given by statute may be taken away any time
before it has been exercised. [Lahom v. Sibulo, G.R. No. 143989 (1992)]

Adoption, being in the best interest of the child, shall not be subject to
rescission by the adopter. However, the adopter may disinherit the child
based on causes enumerated in Art. 919 of CC:
1. Conviction of an attempt on the life of the adopter
2. Having accused, without grounds, the adopter of a crime punishable
by imprisonment for more than 6 years
3. Conviction of adultery/concubinage with the adopter’s spouse
4. Having caused the adopter to make or change a will by force,
intimidation or undue influence
5. Refusal without just cause to support the adopter
6. Maltreatment of the adopter by word/deed
7. Living a dishonorable/disgraceful life
8. Conviction of a crime which carries with it the penalty of civil

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 interdiction

Effects of Rescission [Sec. 20, RA 8552]:

1. Restoration of parental authority of the adoptee’s biological parent(s)
OR the legal custody of the Department if the adoptee is a minor or
incapacitated.
2. Extinguishing of the reciprocal rights and obligations of the adopters
and adoptee.
3. Cancellation of the new birth certificate of the adoptee as ordered by
the court and restoration of the adoptee’s original birth certificate.
4. Reverting successional rights to its status prior to adoption but not
only as of the date of judgment of judicial rescission.
5. Vested rights acquired prior to judicial rescission shall be respected.

Note: Rescission contemplates a situation where the adoption decree remains

valid until its termination.

i. Rectification of Simulated Birth

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 or
her biological mother, causing such child to lose his or her true identity and
status. [Sec. 3(j), RA 8552]

Any person who shall cause the fictitious registration of the birth of a child
under the name(s) of a person who is not his or her biological parents shall
be penalized for simulation of birth with the penalty of prision mayor in its
medium period and a fine not exceeding Fifty thousand pesos
(P50,000.00). [Sec. 21(b), RA 8552]

Three-in-one Procedure
 Correction of entries in birth certificate
 Deed of Voluntary Commitment or Declaration of
abandonment
 Adoption decree

Sec. 8 of the SC Rule on Adoption requires that the petition that seeks to
rectify a simulated birth allege that:
1. Petitioner is applying for rectification of a simulated birth;
2. The simulation of birth was made prior to the date of effectivity
of RA 8552 and the application for rectification of the birth
registration and the petition for adoption were filed within five
years from said date;
3. The petitioner made the simulation of birth for the best interests
of the adoptee; and
4. The adoptee has been consistently considered and treated by the
petitioner as his own child.

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2. Law on Inter-Country Adoption
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.

When Allowed
No child shall be matched to a foreign adoptive family unless it can be
satisfactorily shown that the child cannot be adopted locally [Sec. 11, RA
8043].

Who Can Adopt

Sec. 9, RA 8043. Any alien or 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.

Who Can be Adopted

1. Only a legally-free child may be the subject of inter-country adoption
[Sec. 8].
 A legally-free child is one who has been voluntarily or involuntarily

158
 committed to the DSWD of the Philippines, in accordance with the
Child and Youth Welfare Code [Sec. 3(f)].
2. A Filipino child [Sec. 3(a)]
3. Below 15 years old [Sec. 3(b)]

In order that such child may be considered for placement, the following
documents must be submitted to the Board:
1. Child study
2. Birth Certificate / Foundling Certificate
3. Deed of Voluntary Commitment / Decree of Abandonment / Death
Certificate of parents
4. Medical Evaluation / History
5. Psychological Evaluation, if necessary
6. Recent photo of the child [Sec. 8]

Inter-Country Adoption Procedure

1. Pre-Adoptive Placement Costs

i. Sec. 12, RA 8043. 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.

The Inter-Country Adoption Board shall also collect fees, charges, and
assessments [Sec. 13].

2. Venue for Filing Applications

Applications shall be filed either with:

a. The Philippine Regional Trial Court having jurisdiction over the child, or
with
b. The Board, through an intermediate agency (governmental or accredited
agency) in the country of the prospective adoptive parents [Sec. 10].

3. Family Selection / Matching Process

The Board shall ensure that inter-country adoption is done in the best
interest of the child [Sec. 7].

The matching of the child with an applicant involves three stages: (1) pre-
matching, (2) matching conference, and (3) post-matching conference [Sec.
37, RA 8043 Amended IRR].
Before the Board approves the matching proposal, no matching arrangement
shall be made between the applicant and the child’s parents/guardians or

159
custodians concerning a particular child, except in cases of adoption of a
relative or in cases where the child’s best interests is at stake [Sec. 38, RA
8043 Amended IRR]. This is to preserve the integrity of the adoption
proceedings.

4. Applicant’s Acceptance
Once the matching proposal is approved, a notice of matching shall be sent
to the concerned Central Authority or foreign adoption agency within five
(5) days.

The applicant/s shall notify the Central Authority or Foreign Adoption

Agency (FAA) in writing of their decision on the matching proposal within
fifteen (15) working days from receipt of said proposal.

If the applicant/s needs additional information about the child and/or they
need more time to make a decision, an extension of thirty (30) working days
may be granted. [Sec. 37, RA 8043 Amended IRR]

5. Pre-Departure Preparation of the Child

The concerned Child Placing Agency shall prepare the child for his/her
placement to minimize the anxiety and trauma due to separation from
persons with whom the child may have formed attachments. [Sec. 41, RA
8043 Amended IRR]

6. Physical Transfer of the Child

For not later than twenty (20) working days after the issuance of the child’s
visa, the adoptive parents or anyone of them shall personally fetch the child
from the Philippines.
The applicant shall stay in the country with the child for at least five (5) days
to allow bonding among them.

The unauthorized failure to do so may result in the cancellation of the

Placement Authority. [Sec. 42, RA 8043 Amended IRR]

7. Trial Custody
Trial custody begins upon the physical transfer of the child to the applicant
who, as custodian, shall exercise substitute parental authority over the child.
[Sec. 44, RA 8043 Amended IRR]

The trial custody shall last for six (6) months during which the Central
Authority and/or the FAA shall be responsible for the pre-adoptive
placement, care and family counseling of the child. [Sec. 45, RA 8043
Amended IRR]

Any serious ailment, injury or abuse of the child from the adoptive parent(s)
or from other household members or the adoptive parent(s) suffer from any
serious ailment or injury that will make the adoption untenable shall be

160
reported to the Board. In the event that all efforts to restore the parent-child
relationship between the child and applicant/s fail, the placement may be
terminated and the child may be given a new placement or repatriated. [Secs.
46, 48, 49, RA 8043 Amended IRR]

8. Petition for Adoption

If a satisfactory pre-adoptive relationship is formed between the applicant/s
and the child, the Board shall transmit an Affidavit of Consent to the
Adoption. The Central Authority and/or the FAA shall file the petition for
adoption of the child to the proper court or agency in accordance with their
national law. [Secs. 50 and 51, RA 8043 Amended IRR]

9. Decree of Adoption
A copy of the final Decree of Adoption or its equivalent shall be transmitted
by the Central Authority and/or the FAA to the Board within one (1) month
after its issuance. [Sec. 52, RA 8043 Amended IRR]

Where the petition for adoption was granted after the child had shot and
killed a girl, the Supreme Court did not consider the retroactive effect given
to the decree of adoption so as to impose a liability upon the adopting
parents at a time when the adopting parents had no actual or physical
custody over the child. Retroactive effect may perhaps be given where such
is essential to permit the accrual of some benefit or advantage in favor of the
adopted child. In the instant case, however, to hold that parental authority
had been retroactively lodged in the adopting parents so as to burden them
with liability for a tortious act that they could not have foreseen and which
they could not have prevented would be unfair and unconscionable.
[Tamargo v. CA, G.R. No. 85044 (1992)]

Adoption is a juridical act, proceeding in rem. Because it is artificial, the

statutory requirements in order to prove it must be strictly carried out.
Petition must be announced in publications and only those proclaimed by the
court are valid. Adoption is never presumed. [Lazatin v. Campos, G.R. No.
L-54955-54 (1979)]

Validity of facts behind a final adoption decree cannot be collaterally

attacked without impinging on that court’s jurisdiction. [Santos v.
Aranzanso, G.R. No. L-23828 (1966)]

Participation of the appropriate government instrumentality in performing

the necessary studies and precautions is important and is indispensable to
assure the child’s welfare. [DSWD v. Belen, GRTJ-96-1362 (1997)]

Consent for adoption must be written and notarized. [Landingin v. Republic,

G.R. No. 164948 (2006)]

Although an adopted child is deemed to be a legitimate child and have the

161
same rights as the latter, these rights do not include the right of
representation (because the adopted child has no right to inherit from the
grandparent). The relationship created by the adoption is between only the
adopting parents and the adopted child. It does not extend to the blood
relatives of either party. [Sayson v. CA, G.R. No. 89224- 25 (1992)]

J. SUPPORT
1. What it compromises
Support consists of everything indispensable for sustenance, dwelling,
clothing, medical attendance, education and transportation, in keeping with
the financial capacity of the family [Art. 194(1), FC].
a. Education includes a person’s schooling or training for some profession,
trade or vocation, the right to which shall subsist beyond the age of majority
[Art. 194, FC].
b. Transportation includes expenses in going to and from school, or to and
from place of work [Art. 194, FC].

2. Who are obliged to give support

Those obliged to support each other are:
a. Spouses,
b. Legitimate ascendants and descendants,
c. Parents and their children (legitimate and illegitimate) and the
children of the latter (legitimate and illegitimate),
d. Legitimate brothers and sisters, whether of full or half-blood;
[Art. 195, FC]
e. Illegitimate brothers and sisters, whether of full or half-blood
 Except when the need for support of one (who is of age) is due to a
cause imputable to his/her fault or negligence [Art. 196, FC]

Mutual Obligation to Support of Spouses [Arts. 142, 143, FC]

 A wife’s right to support depends upon her status as such.
 A wife is entitled to expenses of the litigation, including attorney’s
fees.
 If a wife is forced to leave the conjugal home for a justifiable cause,
she is entitled to separate maintenance.
 In an action by the wife against the husband, the court may grant
alimony pendente lite.

Note: Both legitimate and illegitimate children are entitled to support. The
only difference is the source of support which, for illegitimate children, is
the parent’s separate properties.
Where the illegitimate parent is legally married to another person, their CPG
or ACP cannot answer for support for the illegitimate child of one of them

162
unless the parent has no adequate separate property, in which case, support
will be taken from the CPG or ACP subject to reimbursement [Arts. 122,
197, FC].

3. Source of support
CPG or ACP shall answer for the support of the:
(1) spouse,
(2) their common children, and
(3) the legitimate children of their spouse [Arts. 94 and 121, FC].

The separate property of the obligor shall answer for the support of the:
(1) Legitimate ascendants,
(2) (all other) descendants, whether legitimate or illegitimate, and
(3) Brothers and sisters, whether legitimate or illegitimately related.
If no separate property, the ACP/CPG (if financially capable) shall advance
the support, to be deducted from the obligor’s share upon liquidation of such
regime [Art. 197, FC].

4. Order of support
Art. 199, FC. Whenever two or more persons are obliged to give support,
the liability shall devolve upon the following persons in the order herein
provided:
1. The spouse;
2. The descendants in the nearest degree;
3. The ascendants in the nearest degree; and
(1) 4. The brothers and sisters.

The order of liability among ascendants and descendants would be:

(1) Legitimate children and descendants,

(2) Legitimate parents and ascendants, and

(3) Illegitimate children and their descendants [Tolentino].

Example: Even if the parents-in-law were the ones who called for the
physician’s services for the childbirth of their daughter-in-law, it is the
woman’s husband who is bound to pay the fees due to the physician [Pelayo
v. Lauron, G.R. No. L-4089 (1909)].

In Case of Multiple Obligors

163
When the obligation to give support falls upon two or more persons, the
payment of the same shall be divided between them in proportion to their
resources [Art. 200(1), FC].

Also, in case of urgent need and by special circumstance, the judge may
order only one obligor to furnish support without prejudice to
reimbursement from other obligors of the share due from them [Art. 200(2),
FC].

In Case of Multiple Recipients

If there are multiple recipients and only one obligor, and the latter has no
sufficient means to satisfy all claims:

a. Observe order in Art. 199 as to whose claim shall be satisfied first;

b. But if the concurrent obligees are the spouse and a child subject to
parental authority, the child shall be preferred [Art. 200(3), FC].

The above preference given to a child under parental authority over the
spouse should prevail only if the person obliged to support pays it out his
separate property. So if the support comes from ACP or CPG, the above rule
of preference for the child does not apply [Tolentino].

Support Given by a Stranger

Art. 206, FC. 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 without intention of
being reimbursed.

The stranger contemplated in this provision is one who does not have any
obligation to support the recipient.

Person Obliged Refuses or Fails to Give Support

Art. 207, FC. When the person obliged to support another unjustly refuses
or fails to give support when urgently needed by the latter, any third
person may furnish support to the needy individual, with the right of
reimbursement from the person obliged to give support. This Article shall

164
 particularly apply 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.

Example: The father who abandoned his two daughters in their tender years,
was ordered by the Court to pay support in arrears. The Court said that the
father could not plausibly expect his children of tender years to demand
support from him. In like manner, the uncle who lent money for the
education and support of the two sisters, may exact reimbursement from the
father [Lacson v. Lacson, G.R. No. 150644 (2006)].

5. Amount of support
The amount of support is in proportion to the means of the provider and the
needs of the receiver, and can be reduced or increased if such circumstances
change [Arts. 201 and 202, FC].

The amount of support is variable and, for this reason, no final judgment on
the amount of support is made as the amount shall be in proportion to the
resources or means of the giver and the necessities of the recipient [Gotardo
v. Buling, G.R. No. 165166 (2012)].

Contractual Support or That Given By Will

The excess in amount beyond that required for legal support shall be subject
to levy on attachment or execution [Art. 208, FC].
Reason: The amount of support agreed upon in the contract or given in the
will can be more than what the recipient needs [Sempio-Diy].

Furthermore, contractual support shall be subject to adjustment whenever

modification is necessary due to changes in circumstances manifestly
beyond the contemplation of the parties [Art. 208, FC].

6. Manner and time of payment

Art. 203, FC. The obligation to give support shall be demandable from the
time the person who has a right to receive the same needs it for
maintenance, but it shall not be paid except from the date of judicial or
extrajudicial demand.

Support pendente lite may be claimed in accordance with the Rules of

Court.

Payment shall be made within the first five days of each corresponding
month or when the recipient dies, his heirs shall not be obliged to return
what he has received in advance.

Payment of alimony is demandable from the moment the necessity for it

165
arises and is payable from the time of extrajudicial demand.

Unless support is demanded, it is presumed that such necessity does not

exist.

Support in arrears may be subject to compromise. The Court may consider

whether the support is no longer indispensable for the recipient's sustenance
[Tolentino].

Two Options to Fulfill Obligation to Give Support

a. Payment of the amount; or

b. Receiving and maintaining the recipient in the home of the provider

Requisites:

1. The obligor has his own home or domicile, and

2. There is no moral or legal reason which prevents the recipient from living
in the obligor’s home or domicile [Art. 204, FC].

7. Renunciation and termination

The obligation of spouses to mutual support lies on the existence of marriage
bonds. Once the marriage has been declared null, this obligation ceases.

The Court held that the validity of marriage can be collaterally attacked in an
action for support. Although the suit is not instituted to directly address the
issue of validity, the Court deems it essential to the determination of the
issue on support. [De Castro v. Assidao-De Castro, G.R. No. 170172
(2008)]

In case of separation in fact between husband and wife, the spouse who
leaves the conjugal home or refuses to live therein, without just cause, shall
not have the right to be supported [Art. 100(1), FC].

Under Art. 194, FC, the obligation to support a recipient’s education may
continue even after the person entitled has reached the age of majority.

However, the Court recognizes that although the duty to support is a

continuing one, the child’s right to support and the parent’s right to custody

166
and services are reciprocal: the father, in return for maintenance and support
may establish and impose reasonable regulations for his child. In case a child
voluntarily abandons the parent’s home for the purpose of avoiding parental
discipline and restraint, that child forfeits the claim to support. [Roe v. Doe,
324 N.Y.S. 2d 71 (1971)]

8. Support pendente lite

Pending legal separation or annulment, and for declaration of nullity,
support pendente lite for spouses and children will come from the
ACP/CPG. After final judgment granting the petition, mutual support
obligation between spouses ceases. However, in legal separation, the court
may order the guilty spouse to give support to the innocent spouse. [Art.
198, FC]

Note: In Art. 100(1), FC, de facto separation does not affect the ACP and the
CPG, except that the spouse who leaves the conjugal home without just
cause shall not be entitled to support.

9. Procedure in applications for support

Petitions for support and/or acknowledgement may be filed with Family
Courts which have original jurisdiction over such cases [Sec. 5, RA 8369].

In cases involving violence among immediate family members living in the

same household, the court may order the temporary custody of children in all
civil actions for their custody. The court may also order support pendente
lite, including deduction from the salary and use of conjugal home and other
properties in all civil actions for support. [Sec. 7, RA 8369]

A woman or her child experiencing violence may also be granted a

protection order which may include directing the respondent to provide
support to the women and/or her child if entitled to legal support. An
appropriate percentage of the income or salary of the respondent shall be
withheld regularly by the respondent’s employer for it to be automatically
remitted to the woman. Failure to remit and/or withhold or any delay in the
remittance of support without justifiable cause shall render the respondent or
his employer liable for indirect contempt of court. [Sec. 8(g), RA 9262]

In case the filiation of a child claiming for support is disputed, the rules on
proving filiation apply. An order for support must be issued only if paternity
or filiation is established by clear and convincing evidence; the reason being
that such order may create an unwholesome situation in the lives of the
parties. [Perla v. Baring, G.R. No. 172471 (2012)]

K. PARENTAL AUTHORITY
1. General provisions

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What Comprises Parental Authority [Art. 209, FC]
• Caring for and rearing of children for civic consciousness and efficiency,
and;
• Development of the moral, mental, and physical character and well-being
of children.

What Characterizes Parental Authority [Art. 210, FC]

General Rule: Parental authority is not renounceable and nontransferable.
Exception: In cases provided by law.
Who Exercises Parental Authority [Arts. 211-213, FC]

General Rule: Joint exercise by the father and the mother of a child [par. 1,
Art. 211, FC].

Exceptions:
• In case of disagreement, the father’s decision prevails [par. 2, Art. 211,
FC].

o Exception to the exception: If there is judicial order to the contrary.

• In case of absence or death of either parent, the parent present or alive [Art.
212, FC].
• In case of separation of the parents, the parent designated by the court [Art.
213, FC].

When Terminated [Art. 228, FC]

• Art. 228, FC
o Upon the death of the parents;
o Upon the death of the child;
o Upon the emancipation of the child;
• Art. 229, FC
o Upon adoption of the child;
o Upon appointment of a general guardian;
o Upon judicial declaration of abandonment of the child, in a case filed for
the purpose;
o Upon the final judgment of a competent court divesting the party
concerned of parental authority, or;
o Upon judicial declaration of absence or incapacity of the person exercising
parental authority

2. Substitute parental authority

When Substitute Parental Authority is Exercised [Art. 214, FC]
In case of death, absence, or unsuitability of the parents

Who Exercises Substitute Parental

Authority (in order)
• The surviving grandparent [Art. 214, FC].

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Exception: When several survive, the one designated by the court, taking
into account all relevant considerations [Art. 214, FC].

• The oldest brother or sister, over 21 years of age [Art. 216, FC].
• The child’s actual custodian, over 21 years of age [Art. 216, FC].

3. Special parental authority

Who Exercises Special Parental Authority [Art. 218, FC]
• The school (its administrators and teachers), or;
• The individual, entity, or institution engaged in child care

When is Special Parental Authority Exercised [Art. 218, FC]

• While the child is under their supervision, instruction, or custody
• During all authorized activities, whether inside or outside the premises of
the school, entity, or institution

Substitute parental authority and special parental authority,

distinguished

DIFFERENCE SUBSTITUTE SPECIAL

Who Exercises Grandparents, oldest Schools (administrators and
sibling, or teachers) or individuals,
Court-appointed entities
guardian engaged in child care
When Exercised Only in case of death, Concurrent with parental
absence, or authority or
unsuitability of parents substitute parental authority
How Liable Subsidiarily liable for Principally and solidarily
damages caused by the liable for damages caused
minor the minor’s acts or omissions
while under their custody,
supervision, or instruction

4. Effect of parental authority over the child's person

Rights and Duties of Persons Exercising Parental Authority upon the
Person of a Child [Art. 220, FC].
1. To keep the children in their company, to support, educate and
instruct them by right precept and good example, and to provide
for their upbringing in keeping with their means;
2. To give the children love and affection, advice and counsel,
companionship and understanding;
3. To provide the children with moral and spiritual guidance,
inculcate in them honesty, integrity, self-discipline, self-
reliance, industry and thrift, stimulate their interest in civic
affairs, and inspire in them compliance with the duties of
citizenship;

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 4. To enhance, protect, preserve, and maintain the children’s
physical and mental health at all times;
5. To furnish the children with good and wholesome educational
materials, supervise their activities, recreation and association
with others, protect them from bad company, and prevent them
from having habits detrimental to their health, studies, and
morals;
6. To represent the children in all matter affecting their interests;
7. To demand from the children respect and obedience;
8. To impose discipline on the children as may be required under
the circumstances, and;
9. To perform such other duties as are imposed by law upon
parents and guardians.

Civil Liability [Art. 221, FC]

Parents and other persons exercising parental authority shall be civilly liable
for the injuries and damages caused by the acts or omissions of their
unemancipated children living in their company and under their personal
authority subject to the appropriate defenses provided by law.

Disciplinary Measures over the Child [Art. 223, FC]

Persons exercising parental authority over a child may petition the proper
court of the place where the child resides for an order providing for
disciplinary measures over the child.

Note: 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 petition 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.

For Persons Exercising Substitute Parental Authority [Art. 233, par. 1,

FC]
The person exercising substitute parental authority shall have the same
authority over the person of the child as the parents.

5. Effects of parental authority over the child's property

Joint Legal Guardianship [Art. 225, par. 1, FC].
The father and the mother shall jointly exercise legal guardianship over the
property of their unemancipated child without the necessity of a court
appointment.

In case of disagreement, the father’s decision shall prevail.

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Exception: Unless there is judicial order to the contrary.

Nature of Administration
The property of the unemancipated child earned or acquired with his work or
industry or by onerous or gratuitous title shall belong the child in owner 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 incomes of the child’s property
shall be limited primarily to the child’s support and secondarily to the
collective daily needs of the family [Art. 226, FC].

Bonds
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, 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 [Art. 225,
par. 2, FC].

The petition shall be considered as a summary special proceeding, with the

ordinary rules on guardianship being merely suppletory.

Except the following, in which case the ordinary rules on guardianship shall
apply:
1. When the child is under substitute parental authority;
2. When the guardian is a stranger, or;
3. A parent has remarried.

Trusts
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 reasonably 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 given in whole or in part shall not be charged
to the child’s legitime.

6. Suspension or termination of parental authority

When Permanently Terminated [Arts. 228- 229, FC].
1. Upon the death of the parents;
2. Upon the death of the child, or;
3. Upon the emancipation of the child.

Unless subsequently revived by final judgment, there is permanent

termination [Art. 229, FC]:

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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;
a. Also mandatory if the person exercising parental authority has subjected
the child or allowed him to be subjected to sexual abuse [Art. 232, FC].
5. Upon judicial declaration of absence or incapacity of the person
exercising parental authority.

When Suspended [Arts. 230-231, FC].

1. Upon conviction of the parent or the person exercising the same of a
crime which carries with it the penalty of civil interdiction;
2. Upon final judgment of a competent court in an action filed for the
purpose or in a related case, if the parent or the person exercising the same:
a. Treats the child with excessive harshness or cruelty;
b. Gives the child corrupting orders, counsel or example;
c. Compels the child to beg, or;
d. Subjects the child or allows him to be subjected to acts of
lasciviousness
e. Is culpably negligent [Art. 231, par. 2, FC].

When Reinstated [Arts. 230-231, FC].

1. Automatically upon service of penalty (civil interdiction).
2. Automatically upon pardon or amnesty of the offender.
3. By judicial order, if the court finds that the cause therefore has ceased and
will not be repeated [Art. 231, par. 4, FC].

Prohibition for Persons Exercising Special Parental Authority [Art. 233,

FC].
In no case shall the school administrator, teacher or individual engaged in
child care and exercising special parental authority inflict corporal
punishment upon the child.

7. Solo parents (Rep. Act No. 8972)

Principle It is the policy of the State to promote the family as the
foundation of the nation, strengthen its solidarity and
ensure its total development. Towards this end, it shall
develop a comprehensive program of services for solo
parents and their children. [Sec. 2, RA 8972]
Concept "Solo parent" - any individual who falls under any of the
following categories:
(1) A woman who gives birth as a result
of rape and other crimes against
chastity even without a final

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 conviction of the offender: Provided,
That the mother keeps and raises the
child;
(2) Parent left solo or alone with the
responsibility of parenthood due to
death of spouse;
(3) Parent left solo or alone with the
responsibility of parenthood while the
spouse is detained or is serving
sentence for a criminal conviction for
at least one (1) year;
(4) Parent left solo or alone with the
responsibility of parenthood due to
physical and/or mental incapacity of
spouse as certified by a public
medical practitioner;
(5) Parent left solo or alone with the
responsibility of parenthood due to
legal separation or de facto separation
from spouse for at least one (1) year,
as long as he/she is entrusted with the
custody of the children;
(6) Parent left solo or alone with the
responsibility of parenthood due to
declaration of nullity or annulment of
marriage as decreed by a court or by a
church as long as he/she is entrusted
with the custody of the children;
(7) Parent left solo or alone with the
responsibility of parenthood due to
abandonment of spouse for at least
one (1) year;
(8) Unmarried mother/father who has
preferred to keep and rear her/his
child/children instead of having others
care for them or give them up to a
welfare institution;
(9) Any other person who solely provides
parental care and support to a child or
children;
(10) Any family member who
assumes the responsibility of head of
family as a result of the death,
abandonment, disappearance or
prolonged absence of the parents or

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 solo parent.
A change in the status or circumstance f the parent
claiming benefits under this Act, such that he/she is no
longer left alone with the responsibility of parenthood,
shall terminate his/her eligibility for these benefits.
Scope Benefits granted to solo parents:
1. Any solo parent whose income in the place of
domicile falls below the poverty threshold
as set by the National Economic and
Development Authority (NEDA) and subject
to the assessment of the DSWD worker in the
area shall be eligible for the following
assistance:
a. Comprehensive Package of Social
Development and Welfare Services,
consisting of:
i. Livelihood development services;
ii. Counseling services;
iii. Parent effectiveness services;
iv. Critical incidence stress debriefing;
v. Special projects for individuals in need of protection
[Sec. 5, RA 8972]
b. Flexible work schedule or the right granted
to a solo parent employee to vary his/her
arrival and departure time without affecting
the core work hours as defined by the
employer [Sec. 6, RA 8972]
c. Right to be protected against work
discrimination with respect to terms and
conditions of employment [Sec. 7, RA 8972]
d. Parental leave of not more than seven (7)
working days every year, in addition to
current leave privileges, provided the solo
parent employee has already rendered service
of at least one (1) year [Sec. 8, RA 8972]
e. Educational benefits, consisting of:
i. Scholarship programs for qualified solo parents and
their children in institutions of basic, tertiary and
technical/skills education; and
ii. Non-formal education programs appropriate for solo
parents and their children [Sec. 9, RA 8972]
f. Housing benefits [Sec. 10, RA 8972]
g. Medical assistance [Sec. 11, RA 8972]
2. Any solo parent whose income is above the
poverty threshold shall enjoy only the

174
 following benefits:
a. Flexible work schedule [Sec. 6, RA 8972]
b. Right to be protected against work
discrimination with respect to terms and conditions
of employment [Sec. 7, RA 8972]
c. Parental leave of not more than seven (7) working
days every year, in addition to current leave
privileges, provided the solo parent employee has
already rendered service of at least one (1) year
[Sec. 8, RA 8972]

L. EMANCIPATION
1. Cause of emancipation
When Emancipation Takes Place [Art. 234, FC, as amended by R.A. No.
6089] By attainment of majority, at the age of eighteen years

2. Effect of emancipation
Effects of Emancipation
General:
• Termination of parental authority over the person and property of the
child emancipated [Art. 228 [3], FC]
• The person emancipated becomes qualified and responsible for all
acts of civil life.
Exception:
• Persons possessing parental authority over the emancipated individual
are needed to give their respective parental consent until the
emancipated individual is at the age of twenty-one.
• Nothing shall be construed to derogate the duty and 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.
• Other exceptions established by existing laws in special cases.

M. SUMMARY JUDICIAL PROCEEDINGS IN THE FAMILY CODE

Art. 238, FC. Until modified by the Supreme Court, the procedural rules
in this Title shall apply in all cases provided for in this Code requiring
summary court proceedings. Such cases shall be decided in an expeditious
manner without regard to technical rules.

1. Separation in Fact Between Husband and Wife

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Petition [Art. 239, FC]

A verified petition alleging the following facts is required 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 the same is
withheld or cannot be obtained

The petition shall attach the proposed deed, if any, embodying the
transaction, if none, shall describe in detail the said transaction and state the
reason why the required consent thereto cannot be secured.

The final deed duly executed by the parties shall be submitted to and
approved by the court.

Separate claim for damages [Art. 240, FC].

Claims for damages by either spouse, except costs of the proceedings, may
be litigated only in a separate action.

Jurisdiction

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. [Art. 241, FC]

There shall be established a Family Court in every province and city in the
country. In case where the city is the capital of the province, the Family
Court shall be established in the municipality which has the highest
population. [Sec. 3, R.A. 8069 [Family Courts Act of 1997]]

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The Family Courts shall have exclusive original jurisdiction to hear and
decide the following cases:

(f). Summary judicial proceedings brought under the provisions of Executive

Order No. 209, otherwise known as the "Family Code of the Philippines".
[Sec. 5[f], R.A. 8069 [Family Courts Act of 1997]]

Notification of the other spouse

Upon 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 the petition and shall be served at the last known address of the
spouse concerned. [Art. 242, FC].

Procedure

A preliminary conference shall be conducted by the judge personally

without the parties being assisted by counsel. After the court deems it useful,
the parties may be assisted by counsel at the succeeding conferences and
hearings. [Art. 243, FC].

If the petition is not resolved at the initial conference, said petition shall be
decided in a summary on the basis of affidavits, documentary evidence or
oral testimonies at the sound discretion of the court. If testimony is needed,
the court shall specify the witnesses to be heard and the subject-matter of
their testimonies, directing the parties to present said witnesses [Art. 246,
FC].

When appearance of spouses is required

In case of non-appearance of the spouse whose consent is sought, the court

shall inquire into the reasons for his or her failure, and shall require such
appearance, if possible [Art. 244, FC].

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Note: If, despite all efforts, the attendance of the non-consenting spouse is
not secured, the court may proceed ex parte and render judgment as the facts
and circumstances may warrant. In any case, the judge shall endeavor to
protect the interests of the non-appearing spouse [Art. 245, FC].

Nature of judgment

The judgment of the court shall be immediately final and executory [Art.
247, FC].

2. Incidents Involving Parental Authority

Verified petitions are needed in the following situations [Art. 249, FC]

• For an order providing for disciplinary measures over the child [Art.
223, FC].
• For the approval of the bond in the exercise of the parents’ joint legal
guardianship over the property of their un-emancipated common child
where the market value of the property or the annual income of the
child exceeds P50,000.00 [Art. 225, FC].
• For the approval of a deed or transaction where the required consent
of the other spouse is withheld or cannot be obtained [Art. 239, FC].

Jurisdiction

In the proper court of the place where the child resides [Art. 250, FC].

Procedure

The rules governing Chapter 2 (summary judicial proceedings for when

there is separation in fact between husband and wife, Arts. 239-248, FC)
shall govern herein as they are applicable [Art. 252, FC].

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3. Other Matters

Art. 248, FC

The petition for judicial authority to administer or encumber specific

separate property of the abandoning spouse and to use the fruits or proceeds
thereof for the support of the family shall also be governed by the procedural
rules requiring summary court proceedings in the Family Code.

The State recognizes the sanctity of family life and shall

protect and strengthen the family as a basic autonomous
Principle social institution. The courts shall preserve the solidarity of
the family, provide procedures for the reconciliation of
spouses and the amicable settlement of family controversy.

The State shall likewise provide a system of adjudication

for youthful offenders which takes into account their
peculiar circumstances. [Sec. 2, RA 8369]
The following are the powers granted to the family courts:
1. In cases of violence among immediate family members
living in the same domicile or household, the Family Court
may issue a restraining order against the accused or
defendant upon verified application by the complainant or
the victim for relief from abuse [Sec. 7, RA 8369];
2. The court may order the temporary custody of
children in all civil actions for their custody [Sec. 7, RA
8369];
3. The court may also order support pendente lite,
including deduction from the salary and use of conjugal
Concept home and other properties in all civil actions for support
[Sec. 7, RA 8369];
4. Direct control and supervision of the youth detention
home which the local government unit shall establish to
separate the youth offenders from adult criminals; [Sec. 8,
RA 8369]

Note: All hearings and conciliation of the child and family

cases shall be treated in a manner consistent with the
promotion of the child's and the family's dignity and worth,
and shall respect their privacy at all stages of the
proceedings.
Records of the cases shall be dealt with utmost
confidentiality and the identity of parties shall not be

179
 divulged unless necessary and with authority of the judge.
[Sec. 12, RA 8369]
The Family Courts shall have exclusive original
jurisdiction to hear and decide the following cases:
a) Criminal cases where one or more of the accused is
below eighteen (18) years of age but not less than nine (9)
years of age but not less than nine (9) years of age or where
one or more of the victims is a minor at the time of the
commission of the offense: Provided, That if the minor is
found guilty, the court shall promulgate sentence and
Scope ascertain any civil liability which the accused may have
incurred.

The sentence, however, shall be suspended without need of

application pursuant to Presidential Decree No. 603,
otherwise known as the "Child and Youth Welfare Code";

b) Petitions for guardianship, custody of children, habeas

corpus in relation to the latter;

c) Petitions for adoption of children and the revocation

thereof;

d) Complaints for annulment of marriage, declaration of

nullity of marriage and those relating to marital status and
property relations of husband and wife or those living
together under different status and agreements, and
petitions for dissolution of conjugal partnership of gains;

e) Petitions for support and/or acknowledgment;

f) Summary judicial proceedings brought under the

provisions of Executive Order No. 209, otherwise
known as the "Family Code of the Philippines";

g) Petitions for declaration of status of children as

abandoned, dependent
o neglected children, petitions for voluntary or involuntary
commitment of children; the suspension, termination, or
restoration of parental authority and other cases cognizable
under Presidential Decree No. 603, Executive Order No.
56, (Series of 1986), and other related laws;

h) Petitions for the constitution of the family home;

i) Cases against minors cognizable under the Dangerous

Drugs Act, as amended;

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 j) Violations of Republic Act No. 7610, otherwise known
as the "Special Protection of Children Against Child
Abuse, Exploitation and Discrimination Act," as amended
by Republic Act No. 7658; and

k) Cases of domestic violence against:

i) Women – which are acts of gender based violence that
results, or are likely to result in physical, sexual or
psychological harm or suffering to women; and other
forms of physical abuse such as battering or threats and
coercion which violate a woman's personhood, integrity
and freedom movement; and
ii) Children – which include the commission of all forms of
abuse, neglect, cruelty, exploitation, violence, and
discrimination and all other conditions prejudicial to their
development.

If an act constitutes a criminal offense, the accused or

batterer shall be subject to criminal proceedings and the
corresponding penalties.

If any question involving any of the above matters should

arise as an incident in any case pending in the regular
courts, said incident shall be determined in that court. [Sec.
5, RA 8369]

Note: In areas where no Family Court has been

established or no Regional Trial Court was designated by
the Supreme Court due to the limited number of cases, the
DSWD shall designate and assign qualified, trained, and
DSWD accredited social workers of the local government
units to handle juvenile and family cases filed in the
designated Regional Trial Court of the place. [Sec. 11, RA
8369]

N. USEOFSURNAMES
1. Surname of Children

Legitimate and legitimated children:

Legitimate and legitimated children shall principally use the surname of the
father. [Art. 364, CC; Article 174 [1], FC].

Adopted child:
An adopted child shall bear the surname of the adopter. [Art. 365, CC; Art.
189 [1], FC].

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Natural child:
A natural child acknowledged by both parents shall principally use the
surname of the father. [Art. 366, CC].

Illegitimate child
Illegitimate children shall use the surname of their mother. [Art. 176, FC].

2. Surname of Wife After and During Marriage

During Marriage
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. 370, CC]

After Marriage
Annulment [Art. 371, CC]:
In case of annulment of marriage and the wife is the guilty party, she shall
resume her maiden name and signature.

In case of annulment of marriage and the wife is the innocent party, 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

Legal Separation [Art. 373, CC]

When legal separation has been granted, the wife shall continue using her
name and surname employed before the legal separation.

Note: Before the legal separation, not before the marriage.

Death of Husband [Art. 373, CC]

A widow may use the deceased husband’s surname as though he were still
living, in accordance with Article 370.

3. Confusion of Names

General Rule [Art. 374, CC]:

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.

Special Rules [Art. 375, CC]:

In case of identity of names and surnames between ascendants and
descendants, the word “Junior” can only be used 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.

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Usurpation and Unauthorized or Unlawful
Use of Name [Arts. 377-378, CC].
Usurpation of a name and surname may be the subject of an action for
damages and other relief [Art. 377, CC].

The unauthorized or unlawful use of another person’s surname gives a right

of action to the latter [Art. 378, CC].

4. Change of Names

General Rule [Art. 376, CC]: No person can change his name or surname
without judicial authority.

Exception [Arts. 379-380, CC]: 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. 379,
CC]

Except as provided in the preceding article, no person shall use different

names and surnames. [Art. 380, CC]

O. ABSENCE
1. Provisional measures in case of absence
General Rule [Art. 381, CC]: A judge, at the instance of an interested
party, a relative, or a friend, may appoint a person to represent the absentee
in all that may be necessary.

Note: The same shall be observed when under similar circumstances the
power conferred by the absentee has expired.

Requisites
1. A person disappears from his domicile.
2. His whereabouts are unknown.
3. He did not leave an agent to administer his property.

Who May Be Appointed [Art. 383, CC]

General Rule: The spouse present shall be preferred, when there is no legal
separation.
Exception: If there is no spouse, any competent person may be appointed by
the court.

Safeguarding the Absentee’s Rights and

Properties [Art. 382, CC]
The judge shall specify the powers, obligations, and remuneration of the
absentee’s representative, regulating them, according to the circumstances,
by the rules concerning guardians.

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2. Declaration of absence
When Absence May Be Declared [Art. 384, CC]
A person’s absence may be declared
1. After two years have elapsed without any news about the absentee or
since the receipt of the last news, or;
2. After five years have elapsed, in case the absentee left a person in charge
of the administration of his property

Who May Ask for the Declaration of Absence [Art. 385, CC]
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.

Effectivity of the Judicial Declaration of Absence [Art. 386, CC]

The judicial declaration of absence shall not take effect until six months
after its publication in a newspaper of general circulation.

3. Administration of the property of the absentee

Appointment of Administrator [Art. 387, CC]
An administrator of the absentee’s property shall be appointed in accordance
with Article 383.

On Alienation or Encumbrance of the Property Administered [Art. 388,

CC]
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.

Cessation of Administration [Art. 389, CC]

When Administration Ceases
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.

Effects of Cessation
1. The administrator shall cease in the performance of his office, and;
2. The property shall be at the disposal of those who may have a right
thereto.

4. Presumption of death

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General Rule [Art. 390, CC]
1. Seven years, for all purposes, except succession.
2. Ten years, for the purpose of opening his succession.

Exception [Art. 390, CC]

If the absentee disappeared at the age of seventy-five years, an absence of
five years shall be sufficient to open his succession.

Where Disappearance is Attendant with Dangerous Circumstances

[Art. 391, CC]
The absentee shall be presumed dead for all purposes, if he were absent
under the following circumstances:
1. Where the absentee is 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. Where the absentee is in the armed forces who has taken part in war, and
has been missing for four years;
3. Where the absentee has been in danger of death under other circumstances
and his existence has not been known for four years.

In Case of the Absentee’s Reappearance or Proof of Existence [Art. 392,

CC]
If the absentee appears, or without appearing, his existence is proved, he
shall recover his property 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.

Statutory Presumption on the Order of Death Between Persons Who

Are Called to Succeed Each Other [Art. 43, CC]
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.

Disputable Presumption from the Rules of Court [Rule 131, Sec. 3 [jj]]
The following presumptions are satisfactory if uncontradicted, but may be
contradicted and overcome by other evidence: (jj). That except for purposes
of succession, when two persons perish in the same calamity, such as wreck,
battle of conflagration, and it is not shown who died first, and there are no
particular circumstances from which it can be inferred, the survivorship is
determined from the probabilities resulting from the strength and age of the
sexes, according to the following rules:

Age Presumed Survivor

Both under 15 Older
Both above 60 Younger

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 One under 15, the other above 60 The one under 15
Both over 15 and under 60; different Male
sexes
Both over 15 and under 60; same sex Older
One under 15 or over 60, the other One between 15 and 60
between those ages

Rule on Subsequent Marriages

General Rule [Art. 41, FC]
Marriage contracted by any person during the subsistence of a previous
marriage is void.

Exceptions [Art. 41, FC]

When there is a subsequent marriage due to ordinary absence, where:
1. The prior spouse had been absent for four consecutive years;
2. The surviving spouse had a well-founded belief that the absent spouse was
already dead.

When there is a subsequent marriage due to extraordinary absence, where:

1. The prior spouse had been absent for two consecutive years.
2. There is danger of death attendant to the disappearance as provided in
Article 391 of the Civil Code:
a. A person on board a vessel lost during a sea voyage, or an aeroplane
which is missing, and has not been heard of.
b. A person in the armed forces who has taken part in war and has been
missing.
c. A person who has been in danger of death under other circumstances and
his existence has not been known.
3. The surviving spouse had a well-founded belief that the absent spouse was
already dead.

P. CIVIL REGISTRAR
RA 9048 Correction of Error in Name
Principle The State created an exception to the general rules
provided by Article 376 and 412 of the Civil Code, i.e.
“No personal can change his name or surname without
judicial authority”, and; “No entry in a civil register shall
be changed or corrected without a judicial order”,
respectively.
Concept Sec. 3, RA 9048. Any person having direct and personal
interest in the correction of a clerical or typographical
error in an entry and/or change of first name or nickname
in the civil register may file, in person, a verified petition
with the local civil registry office of the city or
municipality where the record being sought to be

186
 corrected or changed in kept, or with the nearest
Philippine Consulates for citizens who are presently
residing or domiciled in foreign countries.
Scope Exceptions to the General Rule as Provided by
Articles 376 and 412 of the Civil Code
1. Correction of a clerical or typographical
error
a. Defined as “a mistake committed in the
performance of clerical work in writing, copying,
transcribing or typing an entry in the civil register
that is harmless and innocuous, such as misspelled
name or misspelled place of birth or the like,
which is visible to the eyes or obvious to the
understanding and can be corrected or changed
only by reference to other existing record or
records: Provided, however, That no correction
must involve the change of nationality, age, status
or sex of the petitioner [Sec. 2(3)]

2. Change of first name or nickname

a. Grounds [Sec. 4, RA 9048]
o The petitioner finds the first name or
nickname to be ridiculous, tainted with
dishonor or extremely difficult to write or
pronounce;
o The new first name or nickname has been
habitually and continuously used by the
petitioner and he has been publicly known
by the first name or nickname in the
community, or;
o The change will avoid confusion

Petition [Sec. 5, RA 9048].

The petition shall be in the form of an affidavit,
subscribed and sworn to before any person authorized by
law to administer oaths, setting forth the facts necessary
to establish the merits of the petition, the petitioner’s
competence to testify to the matters states, and the
particularly erroneous entry or entries which are sought
to be correct and/or the change sought to be made, in
three copies.

Documentary Attachments:
1. A certified true machine copy of the
certificate or of the page of the registry book
containing the entry or entries sought to be

187
 corrected or changed;
2. At least two public or private documents
showing the correct entry or entries upon
which the correction or change shall be
based, and;
3. Other documents which the petitioner or the
city or municipal civil registrar, or the
consul general may consider relevant and
necessary for the approval of the provision

Procedure [Secs. 6-7, RA 9048]

1. Petition is filed before the civil registrar or the
consul general.
2. The petition is placed in a conspicuous place for
10 consecutive days after finding it sufficient in
form and substance.
3. The civil registrar/consul general shall act on the
petition and render a decision not later than five
working days after the completion of the
publication requirement.
a. If the petition were denied, the petitioner may
appeal the decision to the Civil Registrar General
or file the appropriate petition before the proper
court.
4. The civil registrar/consul general shall transmit a
copy of the decision with records of the
proceedings to the Office of the Civil Registrar
General within five working days from the date of
the decision.
5. The civil registrar general shall exercise the power
to impugn such a decision by objection on the ff
grounds within 10 working days.
a. Where the error is not clerical or typographical;
b. Where the correction of an entry or entries is
substantial or controversial as it affects the civil
status of a person, or;
c. The basis used in changing the first name or
nickname of a person does not fall under Sec. 4.
6. If there were no objection, the decision shall
become final and executory.
7. If there were objection, the petitioner may seek
reconsideration or file the appropriate petition with
the proper court.
Prohibited Sec. 9, RA 9048.
Acts Generally
• Imprisonment of not less than six years but not

188
 more than twelve years, or;
• A fine of not less than Ten thousand pesos
(P10,000.00) but not more than One hundred
thousand pesos (P100,000.00), or;
• Both

If the offender were a government official or employee,

he shall suffer the penalties provided under civil service
laws, rules, and regulations.

RA 10172 Correction of Error in Birthday and Sex

Principle The State expanded the exception by including
typographical or clerical error in the day and month in
the date of birth or sex of a person appearing in the civil
register to entries that do not need a judicial order to be
changed or corrected.
Concept New Exceptions Created
1. Correction of the day and month in the date of birth
2. Correction of the sex of a person
Scope Additional Documentary Attachments
Generally:
1. Certification from appropriate law enforcement
agencies that petitioner has no pending case or no
criminal record.
For Day and Month in Date of Birth and Sex:
1. Earliest school record or earliest school documents.
2. Medical records.
3. Other documents issued by religious authorities.
For Sex:
1. Certification by an accredited government physician
attesting to the fact that petitioner did not undergo sex
change or sex transplant.

Changes in Procedure
1. The petition shall be published at least once a week
for two consecutive weeks in a newspaper of general
circulation.
Prohibited Acts Similar to RA 9048.
Penalties Similar to RA 9048.

II. PROPERTY

A. CLASSIFICATION OF PROPERTY
1. Immovables
a. IMMOVABLES BY NATURE: cannot be moved from place to place;

189
their intrinsic qualities have no utility except in a fixed place. [pars. 1 &
8]

1. Land, buildings, roads, and constructions of all kinds adhered to the soil
[415 (1)]

Note: When a building is sold to be demolished immediately, it is

considered a movable [Bicerra v. Teneza, G.R. No. L-16219 (1962)].

Note: A building is immovable whether erected by the owner of the land or

by a usufructuary or by a lessee subject to provisions of the chattel mortgage
law or the PPSA.

2. Mines, quarries, and slag dumps, while the matter thereof forms part of
the bed, and waters either running or stagnant. [415 (8)]

b. IMMOVABLES BY INCORPORATION: movables but are attached to

an immovable in such a way as to be an integral part [Pars. 2, 3, & 7]

1. Trees and plants and growing fruits: only immovables when they are
attached to the land or form an integral part of an immovable.

Note: By special treatment of Act 1508 (Chattel Mortgage Law), growing

crops may be subject of a Chattel Mortgage.
For the purpose of attachment: growing crops are to be attached in the
same manner as realty. [Sec. 7, Rule 59]

2. 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.

Note: Whether attached by the owner himself or some other person. (e.g.
Canals, walls, aqueducts)

3. Fertilizer actually used on a piece of Land

c. IMMOVABLES BY DESTINATION: essentially movables but by the

purpose for which they have been placed in an immovable, partake of
the nature of an immovable [Pars. 4, 5, 6 & 9]

1. Statues, reliefs, paintings etc. [415 (4)]

Requisites
a. Placed by the owner or by the tenant (as agent);
b. With intention of attaching them permanently even if adherence will not
involve breakage or injury.
c. Where the improvement or ornaments placed by the lessee are not to pass
to the owner at the expiration of the lease, they remain movables for chattel

190
mortgage purposes. [Davao Sawmill v. Castillo, G.R. No. L-40411 (1935)]

2. Machinery, receptacles, instruments or implements

INTENDED by the OWNER of the tenement which tend directly to meet the
needs of the said industry
or works [415 (5)] (e.g. Sewing machines owned by the owner of a garment
factory)

Requisites
a. Must be machinery, receptacles, instruments, or implements
b. Placed by the owner or the tenant (as agent);
c. The machine, receptacle, instrument, implement must also be essential to
the business (tend directly to meet the needs of industry or work) in order to
be considered realty. [Mindanao Bus Co. v City Assessor, G.R. No. L- 17870
(1962)]

Examples: Gasoline station equipment and machinery, for without them, the
gas station would be useless [Caltex Phils. v. Central Board of Assessment
Appeals, 114 SCRA 296]; machines for chocolate-making industry [Serg
Product, Inc v. PCI Leasing and Finance Inc., 338 SCRA 499]; sawmill
machineries in a sawmill company [Ago v. Court of Appeals, 6 SCRA 1962].

Note: The moment they are separated, (from the immovable or from the
industry or work in which they are utilized) they revert to being movables.

3. Animal houses, etc. [415 (6)]

Requisites
a. Placed by the owner or the tenant (as agent);
b. With the intention of permanent attachment;
c. Forming a permanent part of the immovable.

4. 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 (need
not be placed by owner of land) [415 (9)]

Note: Vessels are considered as movables, although they partake the nature
of real property, in view of its importance in the world of commerce [Rubiso
v. Rivera, G.R. No. L-11407 (1917)].)

d. BY ANALOGY [Par. 10]: Contracts for public works, servitudes,

other real rights over immovable property e.g. usufruct and lease of real
property for a period of 1 year, and registered.

2. Movables
a. Everything not included in Art. 415 (by exclusion);
b. All things that can be transported from one place to another without

191
substantial injury to the immovable to which it is attached (by description)

Unless expressly included in Art. 415 (Test by Exclusion is Superior)

c. Real property which by any special provision of law is considered as a
movable
d. FORCES OF NATURE brought under the control of science (e.g.
electricity, gas, heat, oxygen)
e. OBLIGATIONS AND ACTIONS which have for their object movables
or demandable sums (i.e. any credit)
f. SHARES OF STOCK of agricultural, commercial and industrial entities,
although they may have real estate (e.g. stock certificates of a corporation)

g. OTHER MOVABLES:
1. Cultural properties under R.A. 9846 as amended by P.D. 374, like old
buildings, shrines, documents considered antiques, relics, or artifacts etc.
2. A concession granted to a private person with the right of usufruct in a
building erected on a lot belonging to the municipality is a personal property
[Tufexis v. Olaguera and Municipal Council of Guinobatan, 32 Phil. 654]

B. OWNERSHIP
RIGHTS OF AN OWNER IN GENERAL
1. Jus Possidendi – the right to possess
2. Jus Fruendi – the right to enjoy the fruits (natural, industrial,
and civil)
3. Jus Utendi – the right to use and enjoy
4. Jus Acessiones – the right to accessories
5. Jus Abutendi – the right to abuse or to consume
6. Jus Disponendi – the right to dispose

SUMMARY OF LIMITATIONS ON OWNER

1. Imposed by the state – Eminent domain, taxation, and police
power
2. Imposed by the owner himself
3. Other limitations like nuisance, easements, state of necessity,
mortgages, and other security arrangements
4. Cannot make use of the thing in such manner as to injure the
rights of a third person [Art. 431, CC]
5. Doctrine of state of necessity [Art. 432, CC]

1. Bundle of rights
a. Actions to recover ownership and possession of real property and its
distinctions
a. Actions to recover ownership and possession of real property and its
distinctions

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Accion Reivindicatoria
• An action to recover ownership of and dominion over real property. It
includes, but is not limited to, possession.
• It must be filed in the RTC or the MTC, depending on the assessed value
(RTC, if the value is more than P20,000 and is outside Metro Manila; or the
property is within Metro Manila and its assessed value exceeds P50,000. If
the aforementioned conditions are not met, then at the MTC.).

Requisites [Art. 434, CC]

a. Property must be identified; and
b. Plaintiff must rely on the strength of his title E incumbit probatio qui
dicit, non qui negat: “He who asserts, not he who denies, must prove.”

Accion Publiciana
An action for the recovery of real right of possession of real property
(possession de jure).

Note: Actions for ejectment not filed within one year must be filed as accion
publiciana.

Accion Interdictal - Action for Ejectment

A summary action for recovery of actual, material or de facto physical
possession through an action for forcible entry or unlawful detainer. It must
be filed in the MTC or MeTC.

Forcible Entry Unlawful Detainer

Lawful possessor deprived through Possessor refused to vacate upon
FISTS: demand by owner
a. Force Note: Legal possession (by
b. Intimidation permission/ tolerance)
c. Strategy becomes unlawful upon failure to
d. Threats, and vacate
e. Stealth
Period to Bring Action: 1 year from Period to Bring Action: 1 year
dispossession (force, intimidation, from last demand to vacate.
threats) or from knowledge of
dispossession (strategy, stealth)

b. Actions for recovery of possession of movable property

Replevin For manual delivery of movable property, for either ownership or
possession

2. Distinction between real and personal rights

a. Real rights

Rights that confer upon its holder an autonomous power to derive directly
from a thing certain economic advantages independently of whoever the

193
possessor of the thing.

In real rights, (1) there is a definite subject who has a right against persons
as an indefinite passive subject, (2) directed against the whole world, (3) the
object is a corporeal thing in most instances, and (4) it is extinguished by
destruction or loss of the thing.

The number of real rights is an open classification:

a. Ownership
b. Real right of Possession
c. Usufruct
d. Easement
e. Recorded lease
f. Real Estate Mortgage
g. Chattel Mortgage
h. Pledge
i. Antichresis
j. Retention
k. Pre-emption
l. Redemption
m. Stewardship
n. Certificate of Ancestral Domain Title; Certificate of Ancestral
Domain Claims in the IPRA Law

b. Personal rights

Rights of a person to demand from another as a definite passive subject, the

fulfillment of a prestation to give, to do or not to do.

3. Modes of acquiring ownership

See Section J. Modes of Acquiring Ownership.

4. Limitations of ownership
a. General Limitations

1. Taxation
2. Eminent domain
3. Police power

b. Specific Limitations

1. Legal Servitudes [Arts. 2191, 677-679, 670, 644, 666, 684-687, 676,
649, 637, 652, CC]
Once requisites are satisfied, the servient owner may ask the Court to declare
the existence of an easement. (e.g. Easement of Right of Way, Easement of
Light and View etc.)

194
2. Must not injure the rights of a third person (Sic Utere Tuo Ut Alienum
Non Laedas) [Art. 431, CC]

3. Actions in a State of Necessity

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. [Art. 432, CC]

4. Nuisance
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; (2) annoys or offends the senses; (3) shocks, defies or
disregards decency or morality; (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. 694, CC]

5. Limitations imposed by the owner himself (e.g. voluntary easements)

Valid, provided they are not contrary to law.

6. Limitations imposed by the party transmitting the property either by

the contract or will (e.g. onerous donations or easement constituted when
dividing one property)

C. ACCESSION
Accession – the right by virtue of which the owner of a thing becomes the
owner of everything that is produced thereby, or which is incorporated or
attached thereto, either naturally or artificially. [Art. 440, CC]

Not a mode of acquiring property; it does not depend upon a new title.

1. Right to hidden treasure

Definition: Any hidden and unknown deposit of money, jewelry, or other
precious objects, the lawful ownership of which does not appear. [Art. 439,
CC]

General Rule: Belongs to the owner of the land, building, or other property
on which it is found. [Art. 438, CC]

Exceptions
• If discovery made on property of another, the State, or any of its
subdivisions AND by chance: one half shall be allowed to the finder
• If finder is a trespasser: he shall not be entitled to any
• If the things found be of interest to science or the arts: State may
acquire them at their just price, which shall be divided in conformity with

195
rule stated

2. Rules of accession
a. For immovables
i. ACCESSION DISCRETA
To the owner belongs:
(1) The natural fruits;
(2) The industrial fruits;
(3) The Civil fruits. [Art. 441, CC]

General Rule and Exceptions

General Rule: To the owner of the principal belongs the natural, industrial,
and civil fruits.

Exceptions:
• Possession in good faith: the possessor is entitled to the fruits received
before the possession is legally interrupted [Art. 526, CC]
• Usufruct, fruits belong to the usufructuary. [Art. 556, CC]
• Lease, fruits belong to the lessee in civil law lease of agricultural land;
lessor gets rentals as civil fruits
• Antichresis [Art. 2132, CC]

Kinds of fruits
1. Natural – spontaneous products of the soil and the young, and
other products of animals. [Art. 442(1), CC]
a. Partus sequitur ventrem: To the owner of female animals would also
belong the young of such animals although this cannot apply when the
owner mixes his cattle with those of another and they interbreed, thus
co-ownership is applied. [Siari Valley Estate v. Lucasan, G.R. No. L-
13281 (1960)].
2. Industrial – Fruits produced by the lands of any kind through
cultivation of labor [Art. 442 (2), CC]
3. Civil – Rents of buildings, price of leases of lands and other
property and the amount of perpetual or life annuities or other
similar income [Art. 442 (3), CC]

Principles Applicable to Accession Discreta

a. Time of Accrual depending on kind:
i. Annuals: from the time seedlings appear on the ground.
ii. Perennials: from the time fruits actually appear on the plants.
iii. Young of animals: from the time they are in the womb, although unborn
– beginning of maximum ordinary period of gestation.
iv. Fowls: from the time of incubation.
b. Pay expenses to third person possessor in good faith - He who
receives the fruits has the obligation to pay the expenses
incurred by a third person in the production, gathering and

196
 preservation of the fruits. [Art. 443, CC]
i. Exception: Owner does not have to pay if land is recovered before
gathering from a possessor in bad faith.
ii. But if owner recovers land from possessor in bad faith, he may choose to
acquire the land and he can make the possessor, builder, planter, sower
account for the fruits that have been gathered, with the obligation to deduct
the expenses for producing, harvesting and preservation of the fruits.

ii. ACCESSION CONTINUA

Right pertaining to the owner of a thing over everything that is incorporated

or attached thereto either naturally or artificially (by external forces). [Art.
440, CC]

ARTIFICIALLY/INDUSTRIALLY INCORPORATED [Arts. 445-456,

CC]
Building, planting or sowing on land owned by another (over immovables).

General rule: Whatever is built, planted or sown on the land of another and
the improvements or repairs made thereon, belong to the owner of the land,
subject to the rules on BPS. [Art. 445, CC]

Presumptions
• All works, sowing and planting are presumed made by the owner and at
his expense, unless the contrary is proved. [Art. 446, CC]
● The incorporation must be done in such a manner that to separate the
principal from the accessory would result in injury to both principal and
accessory.
● The party in bad faith is always liable for damages.
● When both parties are in bad faith, they are considered to be in good faith.
● The owner of the principal thing owns the natural, industrial and civil
fruits, except when the following persons exist:
a. Possessor in Good Faith
b. Usufructuary
c. Lessee
d. Antichretic creditor

Bad Faith
On the part of the landowner
Whenever the building, planting or sowing was done with his knowledge
and without opposition on his part. [Art. 453(2), CC]

On the part of the owner of materials

Allows the use of his materials without protest.

On the part of the builder, planter and sower

One who has knowledge of any flaw or defect in his title or mode of

197
acquisition [Art. 526, CC]

He is a possessor in bad faith at the time of BPS if he knows that:

a. He does not have title to the land, and thus, has no right to build thereon;
or
b. He has no permission to build, plant, or sow on the land which he
possesses but does not own.

Note: Bad faith leads to liability for damages and the loss of the works or
the improvement without right to indemnity. [Art. 449, CC]

If both parties are in bad faith, then treat them as if they are both in good
faith. [Art. 453(1), CC]

Rules (see end of Section for Summary of Rules)

1. Case where the landowner differs from the owner of materials [Art.
447, CC]

Situation #1: Both the landowner (LO) and the owner of materials (OM)
are in GF
LO in Rights: Shall own what is built, planted, sown
GF (materials/improvements). [Accessio cedit principali]

Liabilities: shall pay for the value of the materials (no one shall
be unjustly enriched at the expense of another)
OM in Rights:
GF a. Limited right of removal (can only be resorted to if no injury
can be inflicted on the work constructed); or
b. Right to reimbursement for the value of materials.

Situation #2: Both the LO and OM are in BF

Both LO and OM in Parties will be treated as though both acted in GF.
BF [Art. 453, CC]

Situation #3: LO in BF, while OM in GF

LO in BF Rights: To own what is built, planted, sown
(materials/improvements).

Liabilities: shall pay for the value of the materials, as

well as pay OM indemnity for damages.

Note: Subject to OM’s absolute right of removal.

OM in GF Rights:
a. Absolute right of removal + Right to
indemnification for damages; OR
b. Right to reimbursement for the value of materials
+ Right to indemnification for damages.

198
Situation #4: LO in GF, while OM in BF
LO in GF Rights:
a. Right to acquire the improvements without
paying indemnity.
b. b. Right to acquire indemnity for damages if
there are hidden defects known to OM.
OM in BF Lose materials without right to indemnity (no right
of removal).

2. Cases where one builds, plants, or sows on land owned by another

(BPS v. LO) [Arts. 448-454, CC]

Situation #1: BPS in GF [Art. 448, CC]

Landowner [Art. 446, Options:
CC] a. Acquire improvements after paying BPS for
their value; or
Note: Option is given b. Oblige the one who built or planted to pay
solely to LO, GF of the price of the land unless its value is
BPS is immaterial considerably more than that of the building
or trees, and the one who sowed, the proper
rent.
c. If the value is considerably more, then the
court can force the parties to enter into a
forced lease. [Art. 448, CC]

Note: The difference between a BUILDER and a

SOWER.
BPS in GF ● Generally, has right to reimbursement for the
improvement.
● Pending LO’s payment, has right to retention of
the land (during this period, BPS is not required to
pay rent).
● Whatever fruits (rents) he receives during the
period of retention must be deducted from
whatever indemnity is due to him; and in case it
exceeds the value of the indemnity, the excess
shall be returned to the owner of the land. [de
Leon, citing Mendoza v. De Guzman, G.R. No. L-
28721 (1928)]

Note: Landowner can be forced to choose under pain of direct contempt, or

court can choose for him.

Note: In every case, the BPS is entitled to reimbursement of necessary

expenses for the preservation of the land. [Art. 452, CC]

Situation #2: Both the LO and BPS are in BF

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 Both LO and BPS in Parties will be treated as though both acted in GF,
BF so apply Art. 446. [Art. 453, CC]

Situation #3: LO in BF, while BPS in GF

LO in BF a. Must indemnify BPS for the improvements AND
pay damages as if he himself did the BPS.
b. Has no option to sell the land and cannot compel
BPS to buy the land without the latter’s consent.
BPS in GF Rights:
a. Absolute right of removal + Right to
indemnification for damages; OR
b. Right to reimbursement for the value of materials
+ Right to indemnification for damages.

Situation #4: LO in GF, while BPS in BF

[Arts. 449-451, CC]
LO in GF Right to collect damages in any case AND option
to:
a. Acquire improvements without paying indemnity
if the improvements are still standing on the land;
b. Sell the land to BP or collect rent from the sower
unless value of the improvements in which case
there will be a forced lease; or
c. Order demolition of improvements or restoration
of land to its former condition at the expense of the
BPS.

Landowner must STILL pay for necessary expenses

for preservation.
BPS in BF a. Pay damages to landowner.
b. Lose materials without right to indemnity.
c. No right to refuse to buy the land.
d. Recover necessary expenses for preservation of
land.

3. Case where LO, BPS, and OM are different persons [Art. 455, CC]

Note: If there are 3 parties in BPS, solve the problem by considering the
options open to the landowner vis-à-vis BPS depending on their good faith
or bad faith; apply Art. 455 re: one who acted in good faith. Art. 455 shall
not apply if the owner makes use of the right granted by Art. 450.

GENERAL RULES [de Leon]

a. OM in GF entitled to reimbursement for the value of the materials
used (regardless of the GF or BF of the LO and/or the BPS).
PRIMARILY, from the BPS. If the BPS be insolvent, then the LO shall be
subsidiarily liable to the OM. [Art. 455(1), CC]

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Requisites for the LO’s subsidiary liability
• The OM acted in GF;
• BPS is insolvent; and
• The LO appropriates the accession to himself.
b. The BPS who has paid the OM may seek reimbursement from the LO
(value of materials + labor). [Art. 455(2), CC]

Requisites
• The BPS acted in GF; and
• The LO appropriates the improvement to himself.

c. if only the OM is in BF, he loses his materials, as well as his right to

indemnity. He also becomes liable for damages. [Arts. 449, 451, CC]

d. If only the BPS acted in BF, he becomes liable to the OM for the
value of the materials + damages. Should he become insolvent, the
LO shall pay for the value of the materials but he will not be liable for
damages. Additionally, he shall still be liable to the LO. [Arts. 450-
451, CC]

e. If only the LO acted in GF, he can exercise any of his options under
Arts. 449 and 450, both having an additional right to ask for damages
[Art. 451, CC]. He shall also not be subsidiarily liable to the OM.

f. If ALL acted in BF, they shall be treated as though all of them acted
in GF. [Art. 453, CC]

NATURALLY INCORPORATED [Arts. 457- 465, CC]

a. Alluvium [Art. 457, CC]

Soil is gradually deposited on banks adjoining the river.

Requisites [GAC – Gradual, Adjacent, Currents]

1. Deposit of soil or sediment is gradual and imperceptible;
2. As a result of the action of the currents of the waters of the river and
should have no human intervention;
3. Land where the accretion takes place is adjacent to the banks of the
rivers (RIPARIAN LAND); and
4. Deemed to Exist: When the deposit of the sediment has reached a
level higher than the highest level of the water during the year, i.e.
higher than the riverbank. [Meneses v. CA, G.R. No. 82220 (1995)]

Effect: The riparian owner automatically owns the alluvion but it does not
automatically become registered property in his name. [Grande v. CA, G.R.
No. L-17652 (1962)]

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Rationale: To compensate the owners of the land from forces of nature and
to encourage riparian owners to cultivate and enrich the land.

Exception: Deposits due to human action or intervention and abrupt or

unanticipated flooding brought about by extreme weather conditions.

Note: Action of the sea over the estate because of the tide and which results
to a strip of land becomes foreshore land and passes to the realm of the
public domain. [Republic v. Court of Appeals, 281 SCRA 639]

b. Avulsion [Art. 459, CC]

A known portion of land is segregated from one estate by the forceful

current of a river, creek or torrent and transferred to another.

Requisites: [ACFI – Abrupt, caused by Current or other Forces of nature,

Identifiable]
1. Segregation and transfer of land is sudden and abrupt;
2. Caused by the current of the river, creek or torrent; and
3. The portion of land transported must be known and identifiable; or

Effect: The ownership of the detached property is retained by the owner

provided that he removes the same within 2 years from the detachment. [Art.
459, CC]

c. Uprooted Trees [Art. 460, CC]

In case of uprooted trees, the owner retains ownership if he makes a claim

within 6 months. This refers only to uprooted trees and does not include
trees which remain planted on a known portion of land carried by the force
of the waters. In this latter case, the trees are regarded as accessions of the
land through gradual changes in the course of adjoining stream. [Payatas v.
Tuazon, G.R. No. L-30067 (1929)]

d. Change Of Course Of River [Arts. 461- 462, CC]

Requisites:
1. Change in the natural course of the waters of the river;
2. Such change causes the abandonment of the riverbeds; “Natural Bed”:
ground covered by its waters during the highest floods. [Binalay v. Manalo,
G.R. No. 92161 (1991)]
3. Such change is sudden or abrupt; and
4. Change is permanent.

Effects
a. Owners whose lands are occupied by the new course of the river
automatically (ipso facto) become owners of the old bed, in proportion to the
area they lost [Art. 461, CC]

202
b. Owners of the lands adjoining the old bed are given the right to acquire
the same by paying the value of the land. Not exceeding the value of the
land invaded by the new bed (the old property of the owner) [Art. 461, CC]
c. The new bed opened by the river on a private estate shall become of
public dominion. [Art. 462, CC]

Exceptions:
a. Where the river simply dries up, the abandoned riverbed belongs to the
State because there are no persons whose lands are occupied by the waters of
the river. It is still public dominion.
b. Where the government reverts back the course of the river, there is no
compensation.
Note: Sec. 58 of the Water Code (PD 1067) provides that when a river or
stream suddenly changes its course to traverse private lands, the owners of
the affected lands may not compel the government to restore the river to its
former river bed, nor can they restrain the government from taking steps to
revert the river or stream to its former course. The owners of the land thus
affected are not entitled to compensation for any damage sustained thereby.
However, the former owners of the new bed shall be the owners of the
abandoned bed in proportion to the area lost by it.

e. Division of River into Branches [Art. 463, CC]

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
and there is no accession. He also retains it if a portion of land is separated
from the estate by the current.

f. Formation of Islands [Arts. 464-465, CC]

They belong to the State if [Art. 464]:

a. Formed on the seas within the jurisdiction of the Philippines;
b. Formed on lakes; or
c. Formed on navigable or floatable rivers:
• Capable of affording a channel or passage for ships and vessels;
• Must be sufficient not only to float bancas and light boats, but also bigger
watercraft;
• Deep enough to allow unobstructed movements of ships and vessels.

Test of whether river is navigable: Whether it can be used as a highway of

commerce, trade and travel.

They belong to the private owner of the separated land if [Art. 463]:
The island is formed in a place not mentioned in Art. 464.

Note: There is no accession when islands are formed by the branching of a

river; the owner retains ownership of the isolated piece of land.

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They belong to the owners of the nearest margins or banks if [Art. 465]:
a. Formed through successive accumulation of alluvial deposits; and
b. On non-navigable and non-floatable rivers.
Note: If island is in the middle of the river, divide longitudinally in half. If
nearer to one margin or bank, to the nearer riparian owner.
Note: If a landowner allows the sea or a lake to eat up his land completely,
it is a case of natural expropriation and if the land later reappears, he does
not regain ownership thereof. [Republic v. Cabangis, G.R. No. L- 28379
(1929)]

b. For movables
i. Conjunction/Adjunction

[Arts. 466-471, 475, CC]

Definition: There is adjunction or conjunction when 2 movables belonging
to different owners are attached to each other such that separation is without
injury.

General Rule: Accession only exists only if separation is not feasible.

Otherwise, separation may be demanded (Civil Code Art 469)

1. Adjunction

Process by virtue of which 2 movable things belonging to different owners

are united in such a way that they form a single object.

Requisites
1. There are 2 movables belonging to 2 different owners;
2. They are united in such a way that they form single object; and
3. They are so inseparable that their separation would impair their nature or
result in substantial injury to either component.

Kinds
a. Inclusion (engraftment)
b. Soldering (adjoining two or more metals)
c. Ferruminatio (same metals)
d. Plumbatura (different metals)
e. Escritura (writing)
f. Pintura (painting)
g. Weaving

2. Ownership of New Object Formed by Adjunction

Owner of Principal Object

Good Faith: Acquires the thing but with the duty to indemnify the owner of
the accessory [Article 466].

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Owner of Accessory
Good Faith: Has a right to demand separation even though there may be
damage if the accessory is more valuable.

If Owner of Principal Object in Bad Faith

Demand value of the accessory plus damages, OR Demand separation even
if the principal will be destroyed plus damages [par. 2, Art.470]

If Owner of Accessory in Bad Faith

Loses the thing plus is liable for damages [Article 470] If both are in bad
faith, treat as if both are in good faith [Article 453 by analogy].

Thing [Art. 467-468, CC]

In the order of application, the principal thing is:
a. That to which the other has been united as an ornament or for its use
or perfection (“Rule of importance and purpose”)
b. The thing of greater value.
c. The thing of greater volume.
d. The that of greater merits, taking into consideration all the pertinent
legal provisions, as well as the comparative merits, utility and volume
of their respective things. [Manresa]

Exception: In painting and sculpture, writings, printed matter, engraving

and lithographs the MATERIAL (board, metal, stone, canvas, paper or
parchment) which the writer/artist used SHALL BE DEEMED THE
ACCESSORY THING in all cases. [Art. 468, CC]

When separation allowed

• When separation will not cause any injury, the respective owners can
demand separation [Art. 469, CC]; or
• When the accessory is more precious:
1. Owner of accessory may demand separation even though the principal
thing may suffer [Art. 469, CC].
2. Owner who caused the union shall bear the expenses for separation
even if he acted in good faith.
● When the any of the owners are in bad faith :
1. If owner of accessory in BF, then he shall lose the accessory and pay
damages to owner of principal.
2. If owner of principal in BF, then the owner of the accessory shall
choose between paying the value of the principal or have the
accessory separated from the principal even if the principal thing is
destroyed and be paid damages.

ii. Commixtion/Confusion [Arts. 427-423. 475, CC]

1. Definition

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• Mixture: the union of materials belonging to different owners where the
components lose their identity
• Commixtion: mixture of solid things
• Confusion: mixture of liquid things or mixture of gases

2. Rules [Arts. 472 – 473, CC]:

a. If caused by the will of the parties or by chance, or by the will of one

party but is in good faith, then there will be a coownership based on
proportional value (not volume).
b. If caused by the will of one party in bad faith, then the party in bad faith
loses the entire thing and must pay indemnity for damages.

Notes:
• Good faith in accession does not necessarily exclude negligence, which
gives rise to damages. [Art. 456, CC by analogy]
• Also, there is a co-ownership.

iii. Specification [NCC 474-475]

1. Definition [Art. 474, CC]

Takes place when the work of a person is done on the material of another,
and such material, in consequence of the work itself, undergoes a
transformation.

It is the transformation of another’s material by the application of labor, into

a thing of a different kind.

Examples: Turning grapes into wine, flour into Bread

2. Rules

a. Worker/Maker in Good Faith [Art. 474, CC]

General Rule: Worker becomes the owner but must indemnify the owner
(who was also in good faith) for the value of the material. [Art. 474 (1), CC]

Exception: If the material is more valuable than the new thing, the owner of
the material may choose [Art. 474 (2), CC]:
● To take the new thing but must pay for the value of the work; or
● To demand indemnity for the value of the material.

If the owner was in bad faith, the maker may appropriate the new thing
without paying the owner, or require the owner to pay him the value of the
thing or his work, with right to indemnity.

b. Worker/Maker in bad faith [Art. 474 (3), CC]

• Owner may appropriate the new thing to himself without paying the maker

206
Exception: This option is not available in case the value of the work, for
artistic or scientific reasons, is considerably more than that of the material,
in which case the owner of the material can ask for the payment of the
material and damages.
• Owner may demand the value of the material plus damages

c. Worker/Maker made use of material with consent and without

objection of owner

Rights shall be determined as though both acted in good faith. [Apply Art.
474 (1), CC]

Note: For the right of accession with regards to moveable property,

sentimental value is duly appreciated. [Art. 476, CC]

SUMMARY OF BPS/LO/OM RULES

Landowner Builder/Planter/Sower Owner of
Materials
ALL Acted in Good Faith
a. Right to a. Right of retention a. Collect value of
acquire until necessary and material primarily
improveme useful expenses are from BPS and
nts and pay paid subsidiarily to
indemnity b. To pay value of landowner if BPS
to BPS; materials to OM is insolvent; and
subsidiary b. Limited right
liability to of removal (if the
OM removal will not
b. Sell the cause any injury)
land to BP
except if
the value
of the land
is
considerabl
y more; or
c. Rent to S
LO in GF BPS in GF OM in BF
a. Right to acquire a. Right of retention a. Lose the
improvements until necessary and material without
and pay useful expenses are right to indemnity
indemnity to paid b. Must pay for
BPS; b. Keep improvements damages to BPS
b. Sell land to BP without indemnity
except if the to OM and collect

207
 value of the land damages from him
is considerably
more; or
c. Rent to S
LO in GF BPS in BF OM in BF
a. Right to collect Recover necessary expenses a. Recover from
damages from BPS in for preservation of land BPS (as if both
any case and the option from LO unless LO sells are in GF)
to either land b. If BPS acquires
1. Acquire improvements,
improvements remove materials
w/o paying for if feasible w/o
indemnity; injury
2. Demolition or c. No action
restoration; or against LO but
3. Sell to BP, or to may be liable to
rent to sower LO for
b. Pay necessary consequential
expenses to BPS damages
ALL Acted in Bad Faith
Same as when all acted in GF under Art. 453
LO in BF BPS in GF OM in GF
a. Acquire a. May remove a. Remove
improvement improvements materials at
after paying b. Be indemnified for any event
indemnity and damages in any event b. Collect
damages to BPS c. Pay OM the value of value of
unless the latter the materials materials
decides to from BPS;
remove subsidiarily
b. Subsidiarily from LO, if
liable to OM for LO is made
value of to pay for
materials if he improveme
acquires nts and
improvements damages
and pays
damages to BPS;
no subsidiary
liability if BPS
chooses removal
in any event.
LO in BF BPS in BF OM in GF
a. Right to acquire a. No right of a. Collect
improvements and pay retention value of

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indemnity to BPS; b. Pay value of materials
subsidiarily liable to materials to primarily
OM OM and pay from BPS
b. Has option to: him damages and
1. Sell the land to subsidiaril
BP except if the y from LO
value of the land if LO
is considerably acquires
more; or the
2. Rent to S improveme
nts
b. Collect
damages
from BPS
c. Absolute
right to
remove
materials
in any
event (if
BPS
acquires
improveme
nts)
LO in GF BPS in BF OM in GF
LO has right to collect a. Right to necessary a. Collect
damages from BPS in expenses value of
any case and the option b. Pay value of materials
to either: materials to OM primarily
a. Acquire c. Pay damages to from BPS
improvements OM/LO and
w/o paying for subsidiaril
indemnity; y from LO
b. Demolition or b. Collect
restoration; or damages
c. Sell to BP or rent from BPS
to S Pay c. If BPS
necessary acquires
expenses to BPS improveme
nts,
absolute
right of
removal in
any event
LO in BF BPS in GF OM in BF

209
 Acquire improvements a. Receive a. Right to
and pay indemnity and indemnity for indemnity
damages to BPS unless damages b. Loses right
the latter decides to b. Absolute right to the
remove materials of removal of materials
improvements
in any event

D. QUIETING OF TITLE
Quieting of Title – remedy for the removal of any cloud of doubt or
uncertainty with respect to real property

1. Requisites
a. Plaintiff or complainant has a legal or an equitable title to or interest in the
real property subject of the action; and [Art. 477, CC]
b. The deed, claim, encumbrance or proceeding claimed to be casting a
cloud on his title must be shown to be in fact invalid or inoperative despite
its prima facie appearance of validity or legal efficacy.

Such cloud must be due to some instrument, record, claim, encumbrance or

proceeding which is apparently valid but is in truth invalid, ineffective,
voidable or unenforceable, and is prejudicial to the plaintiff’s title. Plaintiff
must return to the defendant all benefits he may have received from the
latter, or reimburse him for expenses that may have redounded to his benefit.
[Art. 479, CC]

Note: An action to quiet title applies only to real property; except to some
personal properties like vessels or stock certificates which partake of the
nature of real property, or when they are considered as real property because
of special registration requirements [De Leon].

Who may file [Sec. 1, Rule 63, ROC]

Any person interested under a deed, will, contract or other written
instrument, or whose rights are affected by a statute, executive order or
regulation, ordinance, or any other governmental regulation may, before
breach or violation thereof, bring an action in the appropriate Regional Trial
Court to determine any question of construction or validity arising, and for a
declaration of his rights or duties, thereunder. [Bar Matter No. 803, 17
February 1998]

An action for the reformation of an instrument, to quiet title to real property

or remove clouds therefrom, or to consolidate ownership under Article 1607
of the Civil Code, may be brought under this Rule. [Sec. 1, Rule 63, ROC]

210
2. Distinctions between quieting title and removing/preventing a cloud
Action to quiet title
A common law remedy for the removal of any cloud upon a doubt or
uncertainty with respect to title to real property [Paras]
● A cloud on title is a semblance of title (legal or equitable) which legally
appears valid but is, in fact, unfounded.
o Legal title: the party is the registered owner of the property
o Equitable title: the person has the beneficial ownership of the
property
● It is in the nature of a quasi in rem action.

Note: Some commentaries provide that an action to quiet title is different

from removing a cloud.

The purpose of quieting is to put a stop to vexatious litigation in relation to

the property. Removing a cloud pertains to the cancellation, delivery,
removal or release of an encumbrance which can be considered a claim re:
plaintiff’s title.

ACTION TO QUIET TITLE

In General Applicable to real property, subject to certain exceptions
Purpose a. To declare the invalidity of a claim on a title or the
invalidity of an interest in property
b. To free the plaintiff and all those claiming under
him from any hostile claim on the property

Notes:
● To prevent multiplicity of suits, an action for quieting of
title takes precedence over an ejectment case. [Luzuriaga
v. Adil, G.R. No. L-58912 (1985)]
● Pending an action for quieting of title, possession of
actual possessor must be respected until the case is
decided on the merits. [Balbecino v. Judge Ortega, G.R.
No. L-14231 (1962)]
Requisites a. Claimant must show that there is an:
1. Instrument;
2. record;
3. Claim;
4. encumbrance; or
5. proceeding,

b. Which constitutes or casts a

1. cloud;
2. doubt;
3. question; or
4. shadow,

211
 c. upon the owner's title to or interest in real property [Art.
476, CC]
When Not a. To questions involving interpretation of documents;
Applicable: b. To mere written or oral assertions of claim
● UNLESS made in a legal proceeding, or asserts that an
instrument or entry in plaintiff’s favor is not what it
purports to be;
c. To boundary disputes;
d. To deeds by strangers to the title;
● UNLESS purporting to convey the property of the
plaintiff;
e. To instruments invalid on their face; or
a. f. Where the validity of the instrument involves a
pure question of law.

ACTION TO PREVENT A CLOUD

“Cloud on title” means a semblance of title, either legal or equitable,
or a claim or a right in real property, appearing in some legal form
but which is, in fact, invalid or which would be inequitable to enforce.
Legal Title v. Legal title: the party is the registered owner of the
Equitable Title property.
Equitable title: the person has the beneficial
ownership of the property.
A Cloud Exists If a. There is a claim emerging by reason of:
[Art. 476]: 1. Any instrument e.g. a contract, or any
deed of conveyance, mortgage,
assignment, waiver, etc. covering the
property concerned;
2. Any record, claim, encumbrance e.g.
an attachment, lien, inscription,
adverse claim, lis pendens, on a title; or
3. Any proceeding e.g. an extrajudicial
partition of property.

b. The claim should appear valid or effective and

extraneous evidence is needed to prove their
validity or invalidity;
Test: Would the owner of the property in an action
for ejectment brought by the adverse party be
required to offer evidence to defeat a recovery?
As a general rule, a cloud is not created by mere
verbal or parole assertion of ownership or an
interest in property.

c. Such instrument, etc. is, in truth and in fact,

invalid, ineffective, voidable, or unenforceable, or

212
 has been extinguished or terminated, or has been
barred by extinctive prescription; and

d. Such instrument, etc. may be prejudicial to the

true owner or possessor.
Does Not Cover a. To questions involving interpretation
and Is Not of documents;
Applicable To: b. To mere written or oral assertions of
claim, EXCEPT IF made in a legal
proceeding or asserts that an
instrument or entry in plaintiff’s favor
is not what it purports to be;
c. To boundary disputes;
d. To deeds by strangers to the title
UNLESS purporting to convey the
property of the plaintiff;
e. To instruments invalid on their face; or
f. Where the validity of the instrument
involves a pure question of law
Requisites a. Plaintiff has a title to a real property or
interest therein;
b. Defendant is bent on creating a cloud on the
title or interest therein. The danger must not
be merely speculative or imaginary but
imminent; and
c. Unless the defendant is restrained or stopped,
the title or interest of the plaintiff will be
prejudiced or adversely affected.

3. Prescription/non-prescription of action
a. When the plaintiff is in possession of the property, the action to quiet
title does not prescribe.

b. When the plaintiff is NOT in possession of the real property, the

action to quiet title may prescribe depending upon the right of action
filed by the plaintiff:
1. 10 years – if plaintiff is a possessor with a real right, i.e. accion
publiciana, or if action is for reconveyance on the basis of a
constructive trust under Art. 1456, CC
2. 30 years – if plaintiff is the owner of real property

Note: An action to quiet title may be defeated by a claim of ordinary or

extraordinary acquisitive prescription by the defendant.

E. Co-OWNERSHIP

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1. Characteristics of co-ownership
Definition
There is co-ownership whenever the ownership of an undivided thing or
right belongs to different persons [Art. 484 (1), CC]

Co-ownership is governed by:

• Contracts;
• Special laws; and
• In default of the above, the provisions of the Civil Code [Art. 484 (2), CC]

Summary of Characteristics
1. There are 2 or more co-owners.
2. There is a single object which is not materially or physically divided
and his ideal share of the whole.
3. There is no mutual representation by the co-owners.
4. It exists for the common enjoyment of the co-owners.
5. It has no distinct legal personality.
6. It is a trust and every co-owner is a trustee for the rest.
7. It is governed first of all by the contract of the parties; otherwise, by
special legal provisions, and in default of such provisions, by the
provisions of Title III on Co-Ownership.

Limitation
• Each co-owner of realty held pro indiviso exercises his rights over the
whole property and may use and enjoy the same with no other limitation
than that he shall not injure the interests of his co-owners. [Pardell v.
Bartolome, G.R. No. L-4656 (1912)]
• Rationale: Until a division is actually made, the respective share of each
cannot be determined, and every co-owner exercises joint ownership of the
pro indiviso property. [Coja v. CA, 539 SCRA 517]
• Use should be in accordance with the purpose for which it was created or
intended.

Note: The law discourages co-ownerships among individuals as oftentimes,

it results in inequitable situations. No co-owner can be compelled to stay in a
co-ownership indefinitely and may insist on a partition of the common
property [Patricio v. Dario, 507 SCRA 438, 2006].

Co-ownership Distinguished from Partnership

Co-Ownership Partnership
As to creation
Can be created without formalities Can be created only by contract,
of a contract express or implied
As to Juridical Personality
Has no juridical or legal personality Has juridical personality distinct
from partners

214
 As to Purpose
Purpose is collective enjoyment of Purpose is to obtain profits
the thing
As to Disposition of Shares
Consent of other co-owners not Partner needs to be authorized; he
needed; transferee automatically cannot substitute another as a
becomes co-owner partner in his place
As to Existence of Mutual Agency
There is no mutual representation A partner can generally bind the
partnership
As to Effect of Death or Incapacity
Does not result in dissolution Results in dissolution
As to Formal Requisites
No public instrument is needed even May be made in any form except
if the object of the coownership is a when real property is contributed
real property
As to Agreement on the Period
An agreement to keep the thing There may be agreement as to a
undivided for a period of more than definite term without limit set by
10 years is void law

2. Sources of co-ownership
a. Marriage

i. System of Absolute Community

• 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. [Art, 91, FC]
• The administration and enjoyment of the community property shall belong
to both the spouses jointly. [Art. 96 (1), FC]

ii. Conjugal Partnership of Gains

• 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. [Art.
116, FC]
• The administration and enjoyment of the conjugal property shall belong to
both spouses jointly. [Art. 124 (1), FC]

b. Cohabitation

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

215
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. [Art. 147, FC]

c. Joint Purchase

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.1452, CC]

d. Succession

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. [Art. 1078, CC]

e. Donation

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 among them, unless
the donor has otherwise provided. [Art. 753 (1), CC]

f. Chance

If by the will of the owners two things of the same or different kinds are
mixed, or if the mixture occurs by chance, and in the latter case things are
not separable without injury, each owner shall acquire a right
proportional to the part belonging to him, bearing in mind the value of
the things mixed or confused. [Art. 472, CC]

g. Hidden Treasure

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 [Art. 438, CC]

h. Easement of Party Wall

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 [Art. 658, CC]
Easement of party ditches in 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.

i. Contract

a. In General

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• By agreement of two or more persons [Art. 494, CC]
b. Universal Partnership
• The property which belonged to each of their partners at the time of the
constitution of the partnership, becomes the common property of all
partners, as well as all the profit which they may acquire therewith [Art.
1779, CC]
c. Associations
• Associations and societies, whose articles are kept secret among members,
and wherein any one of the members may contract in his own name with
third persons, shall have no juridical personality, and shall be governed by
the provisions relating to coownership [Art. 1775, CC]

j. Occupation

Harvesting and fishing: co-ownership by two or more persons who have

seized a res nullius thing [Art. 713, CC]

k. Condominium (RA 4726)

Condominium Law: co-ownership of the common areas by holders of units

[Sec. 6, RA 4726]

1. Definition of a condominium: Interest in a real property consisting of a

separate interest in a unit in a residential, industrial or commercial building
and an undivided interest in the land on which it is located and in other
common areas of the building.
2. Effect of transfer of a condominium unit:
a. it shall include the transfer/conveyance of the undivided interest in the
common area or in the membership or shareholdings in the
condominium corporation
b. With the unit comess an exclusive easement for the use of the air
space encompassed by the boundaries of the unit
c. Common areas are held in common by the unit owners in equal
shares; one for each unit
3. Rights of a condominium owner (subject to master deed’s limitations):
a. Non-exclusive easement for ingress, egress, and support through the
common areas
b. Right to paint, repaint, tile, wax, paper or refinish and decorate the
inner surface of the walls, ceilings, floors, windows and doors
bounding his/her own unit
c. Exclusive right to mortgage, pledge, or encumber
d. Absolute right to sell or dispose of his condominium
4. Common areas shall remain undivided and there shall be no judicial
partition subject to Sec. 8 of the Condominium Law

3. Rights of co-owners
a. Right to Share in the Benefits as Well As the Charges [Art. 485, CC]

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i. Proportionality – The share of the co-owners shall be proportional to
their respective interests. Any stipulation to the contrary is void. [Art. 485,
par. 1, CC]
ii. Presumption of Equal share – The portions belonging to the co-owners
in the co-ownership shall be presumed equal, unless the contrary is proved.
[Art. 485, par. 2, CC]

b. Right to Use the Thing Owned In Common [Art. 486, CC]

Limitations
1. In accordance with the purpose for which the co-ownership is intended.
a. The purpose for which the coownership may be changed by
agreement, express or implied
2. In such a way as to not injure the interest of the co-ownership
3. In such a way as not to prevent the other co-owners from using it
according to their right.

c. Right to Bring an Action in Ejectment [Art. 487, CC]

Actions contemplated: Covers all cases for recovery of possession (forcible

entry, unlawful detainer, accion publiciana, replevin, accion reinvidicatoria).
Action is considered to be filed to benefit all the co-owners.

A co-owner may bring such an action without joining all the other co-
owners as co-plaintiffs because the suit is presumed to have been filed to
benefit his co-owners. If the plaintiff/coowner claims to be the sole owner,
the action should be dismissed. [Adlawan v. Adlawan, G.R. No. 161919,
(2006)]

d. Right to Compel Other Co-Owners to Contribute to the Expenses of

Preservation and to the Taxes [Art. 488, CC]

General Rule: Each co-owner shall have a right to compel the other co-
owners to contribute:
1. To the necessary expenses (incurred for preservation of the thing or right).
If practicable, he must first notify his coowners of the necessity for such
repairs. [Art. 489, CC]
2. To the taxes [Art. 488, CC]

Exception to paying necessary expenses and taxes: Co-owner no longer

has to pay if he renounces his undivided interest as equivalent to his share of
expenses and taxes. [Art. 488, CC] This means that his/her renunciation does
not cover all of his/her interest in the property co-owned.

Exception to Exception: No waiver shall be made if prejudicial to co-

ownership. [Art. 488, CC]
1. Expenses to improve or embellish the thing shall be decided upon by a

218
majority as determined in Art. 492, NCC.
2. As for the expenses for pure luxury or mere pleasure, these are not
refundable for not serving purposes of preservation. [Art. 548, CC]

e. Right to Reimbursement for Necessary Repairs [Art. 488-489, CC]

General rule: A co-owner has the right to compel the other co-owners to
contribute to the expenses of preservation, maintenance, or necessary repairs
of the thing or right owned in common and to the taxes. [Art. 488, CC]

Requirement of notice: If practicable, the coowner must first notify the co-
owners of the necessity for the repairs. [Art. 489, CC]

Exception to the requirement of notice: If impracticable or where the

repairs are very urgent, and the other co-owners are in remote places and
cannot be reached by an ordinary means of communication. This means that
his/her renunciation does not cover all of his/her interest in the property co-
owned.

Lack of notice even if practicable: Does not exempt other co-owners to

contribute. The coowner who advanced them has the burden of proving that
they were properly incurred. When Majority opposes repairs: If necessary,
repairs insisted by once were not done and it resulted to damages those who
made the opposition shall be responsible for damages. [Paras quoting 3
Manresa 448].

f. Right to Oppose Alternations [Art. 491, CC]

General Rule: Unanimous Consent: 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.

Rationale: Alteration is an act of ownership.

Alteration – a change in the nature or use of a thing; it contemplates a

PERMANENT CHANGE. Examples:
• Change of the thing from the state or essence in which the others believe it
should remain
• Withdrawal of the thing from the use to which they wish it to be intended
• Any other transformation which prejudices the condition or substance of
the thing or its enjoyment by the others. [Manresa]

Examples of alterations
• The construction of a house on the coowned property is an act of
dominion. It is an alteration of the property owned in common. [Cruz v.
Catapang, 544 SCRA 2008]
• Mortgage, donation, or sale of a portion or the whole of the property co-
owned

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• Allowing or entering into an easement

Exception: 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.

g. Right to Full Ownership of His Part and of the Fruits and Benefits
Pertaining Thereto [Art. 493, CC]

As a result, the co-owner has a right to:

1. Alienate;
2. Assign;
3. Mortgage; and
4. Substitute another person in its enjoyment.

Note: Actions above can only pertain to the coowner’s ideal share prior to
partition.

Exception
1. When personal rights are involved; and
2. Effect of alienation or mortgage, with respect to co-owners shall be
limited to the portion which may be allotted to him in the division upon the
termination of the coownership

h. Right to Partition [Art. 494, CC]

Definition of Partition: Separation, division and assignment of a thing held

in common among those to whom it may belong. Partition may be inferred
from circumstances sufficiently strong to support the presumption.
[Maestrado v. Court of Appeals, 327 SCRA 678 (2000)]

General Rule
1. No co-owner shall be obliged to remain in the co-ownership; and
2. Each co-owner may demand at any time the partition of the thing owned
in common, insofar as his share is concerned. [Art. 494 par.1, CC]

Note: An assignee of a co-owner 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 to prevent
it. [Budlong v. Pondoc, 79 SCRA 24 (1977)]

Limitations
• An agreement to keep the thing undivided for a certain period of time, not
exceeding 10 years, shall be valid. [Art. 494, CC]
• A donor or testator may prohibit partition for a period which shall not
exceed 20 years. [Art. 494, CC]
• Neither shall there be any partition when it is prohibited by law. [Art. 494,

220
CC]
• When physical partition would render the thing unserviceable for the use
for which it is intended. [Art. 495, CC]

Exception: If it is indivisible (physical partition not possible), allot to one of

the co-owners who shall indemnify others, or have it sold and divide the
process from the sale. [Art. 498, CC]

• When another co-owner has possessed the property as exclusive owner and
for a period sufficient to acquire it by prescription.

Note: No prescription shall run in favor of a coowner or co-heir against his

co-owners or coheirs so long as he expressly or impliedly recognizes the co-
ownership. [Art. 494, CC]

For prescription to run in favor of a co-owner, the following elements must

concur to show adverse possession of a co-owner:
1. He has performed unequivocal acts of repudiation amounting to an ouster
of the other co-owners;
2. Such positive acts of repudiation have been made known to the other co-
owners; and
3. The evidence thereon must be clear and convincing. [Salvador v. CA,
supra]

Sample of Acts of Repudiation

1. Filing of actions in court like quieting of title, accion reinvidicatoria and
other similar suit
2. Co-owner who causes cancellation of the existing title and petitions for an
issuance of a new title in his favor
3. Co-owner who permanently fences the property and hires security
personnel to prevent other co-owners from entering the property

i. Right to Redemption [Art. 1619, CC]

Definition
Legal redemption – the right to be 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 [Art. 1619, CC].

General Rule: 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
third person. [Art. 1620, CC]
As legal redemption is intended to minimize coownership, once a property is
subdivided and distributed among the co-owners, the community ceases to
exist and there is no more reason to sustain any right of legal redemption.
Every act intended to put an end to indivision among co-heirs is deemed to

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be a partition. [Avila vs. Sps. Barabat, supra]

j. Right to Participate in Administration of Property Owned In

Common [Art. 492, CC]

General Rule
a. For the administration and better enjoyment of the thing owned in
common, the resolutions of the majority of the coowners shall be binding.
[Art. 492 par. 1, CC]
b. 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. [Art. 492 par. 2, CC]

Exceptions to acts of administration only by majority

• If there be no majority; or
• If the resolution of the majority is seriously prejudicial to those interested
in the property owned in common.
• In which case, the court will intervene: the court, at the instance of an
interested party, shall order such measures as it may deem proper, including
the appointment of an administrator.

Examples of acts seriously prejudicial

• Call for a substantial change of the thing
• Authorizing leases, loans, and other contracts without the necessary
security, thereby exposing the property to serious danger
• Continued employment of an administrator who is guilty of fraud or
negligence in his management [Manresa]

Note: A co-owner is entitled to a written notice from a selling co-owner in

order to remove all uncertainties about the sale, its terms and conditions, as
well as its efficacy and status. [Verdad v. Court of Appeals, 256 SCRA 593
(2000)]

k. Other Rules

1. Renunciation of Share

General Rule: A co-owner may exempt himself from the payment of

expenses of preservation by renouncing his undivided interest in the co-
ownership as may be equivalent to his share in the necessary expenses and
taxes. [Art. 488, CC]
A co-owner who has not waived his share in the co-ownership may be
compelled to pay his share in the cost of its maintenance, but he may not be
compelled to renounce.
Waiver of renunciation is not allowed if it is prejudicial to the co-ownership.
[Art. 488, CC]

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2. Repairs for Preservation, Embellishment, or Improvements
General rule: Requires consent of majority of co-owners representing the
controlling interest in the undivided thing. [Art. 489 and 492, CC]

Note: The rules under Art. 492 are applicable, so judicial intervention
may be resorted to.

Summary
Act of Co-Owner Consent Needed
Preservation (ex. Critical May be made at will by any co-
maintenance work – roof leaks, owner, but preferably notice is
cracks in the walls, electrical wiring given to others. [Arts. 488 and
system which renders property 489, CC]
unsafe/unhealthy to live in)
Alterations (ex. Sale, mortgage, Consensus of all co-owners [Art.
assignment) 491, CC]
Lease for more than 1 year Consensus of all co-owners
(considered an act of alteration, see
Tolentino)
Acts of administration (ex. Payment Majority of co-owners [Art. 492,
of taxes/association dues, hiring CC]
contractors to do minor repairs)
Improvement/ Embellishing the Majority of co-owners [Arts. 489
Thing/ Useful expenses (ex. and 492, CC
Swimming pool, CCTV, landscaped
gardens, etc.)

3. Multi-Story House [Art. 490, CC]

Applies when:
• The different stories of a house belong to different owners;
• 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.

Part of the House Manner of Contribution

Main and party walls, All owners contribute in proportion to the
the roof, and the other value of the story belonging to each
things used in common
Floor of the entrance, All owners contribute pro rata or equally
front door, common
yard, and sanitary
works common to all
The floor of each co- Each owner bears the cost of maintaining the
owner’s story floor of his story
Stairs from the first entrance to the first story

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 Stairs – pro rata sharing of all owners except the
owner of the ground floor
Stairs from the first to the second story - pro
rata sharing of all owners except the owner of
the ground floor and that of the first story; and
so on.

4. Termination of co-ownership
Means of Termination
a. Total Destruction of the Thing Owned in Common
b. Merger of All Interests in One Person
c. Acquisitive Prescription
d. Partition
e. Sale of Property Co-Owned
f. Termination of Period Agreed upon in Coownership

a. Total Destruction of Thing or Loss of the Property Co-Owned

Exception: If a building is destroyed, there is still co-ownership over the

land and the debris. [Tolentino]

b. Merger of All Interests in One Person

This may take place by any of the causes which are sufficient to transmit
title to an obligation, either by assignment, subrogation, and sale of
inheritance.

c. Acquisitive Prescription

This is a mode of acquiring ownership by a possessor through the requisite

lapse of time. It may be ordinary or extraordinary. [Art. 1117, CC]

Ordinary Acquisitive prescription requires possession of things in GOOD

FAITH and with a just title for the time fixed by the law [De Leon].
Extraordinary Prescription is the opposite. No good faith or just title is
required, but long possession under Art. 1132 , par. 2 [De Leon].

d. Partition or Division

May be judicial or extrajudicial:

• Extrajudicial partition – The agreement may be oral or written, done
outside of court.
• Judicial partition – Governed by the Rules of Court insofar as they are
consistent with the CC. [Art. 496, CC]

Action for partition will determine:

• Whether or not the plaintiff is indeed a coowner of the property
• How the property will be divided between the plaintiff and defendant

224
Incidents of Partition
• Mutual accounting for benefits received and reimbursement for expenses
made [Art. 500, CC]
• Payment of damages by each co-owner caused by reason of his negligence
or fraud. [Art. 500, CC]
• Liability of each co-owner for defects of title and quality of the portion
assigned to each of the co-owners. [Art. 501, CC]

Effects of Partition
• Confers exclusive ownership of the property adjudicated to a co-heir. [Art.
1091, CC]
• Co-heirs shall be reciprocally bound to warrant the title to, and the quality
of each property adjudicated. [Art. 1092, CC]
• Reciprocal obligation of warranty shall be proportionate to the respective
hereditary shares of co-heirs. [Art. 1093, CC]
• An action to enforce the warranty must be brought within 10 years from
the date the right of action accrues. [Art. 1094, CC]
• 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.
[Art. 1095, CC]

Rights of Third Parties in Partition

1. The partition of a thing owned in common shall not prejudice
third persons, who shall retain the rights of mortgage, servitude,
or any real rights belonging to them before the division was
made. [Art. 499, CC]
Note: A “third person” is defined as all those who did not in any way
participate or intervene in the partition [Paras citing 3 Manresa 54 and
Gonzaga v. Martinez, 9 Phil. 489].
2. The creditors or assignees of the coowners may take part in the
division of the thing owned in common and object to its being
effected without their concurrence. [Art. 497, CC]

Note: All kinds of creditors whether preferred or ordinary are included

within the scope of creditors; but they must have become creditors during
the existence of the co-ownership and not before or after [Paras citing 3
Manresa 528-529].

Exception: If the partition was already executed, the creditors/assignees

cannot impugn the same.

Exception to the exception: There was fraud or a previous formal

opposition against the partition, without prejudice to the right of the debtor
or assignor to maintain its validity. [Art. 497, CC]
The law does not expressly require previous notice to the creditors and
assignees before a partition. [Tolentino]

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If notice is not given, the partition is not binding on the creditors and
assignees. But once notice has been given, it is the duty of creditors and
assignees to intervene and make known their stand. If they fail to do so, they
cannot question the division made, EXCEPT in cases of fraud.

Partition of an indivisible thing [Art. 498, CC]

1st option: The co-owners can agree that one of them shall be the sole owner
by paying the value of the other co-owners’ shares.
2nd option: If they cannot agree who among them shall be the sole owner,
the property will be sold to a 3rd person and the proceeds will be distributed
among them.

e. Sale of Property Co-Owned [Art. 498, CC]

The sale shall be resorted to only if:

• The property is essentially indivisible.
• The co-owners cannot agree that the entire property be allotted or assigned
to one of them, who shall reimburse the other co-owners of their shares.

f. Termination of Period Agreed Upon by the Co-Owners [Art. 494. CC]

An agreement to keep the thing undivided for a certain period of time, not
exceeding 10 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 20 years.

F. POSSESSION
1. Characteristics
Definition
Possession is the holding of a thing or the enjoyment of a right. [Art. 523,
CC]

It includes the idea of occupation – i.e. the person exercises control over the
object. It cannot exist without it.

Right of possession Right to possess

(jus possessionis) (jus possidendi)
Independent right (ex: Lessee Incident to ownership (ex: person A
possessing a property) lives in a house that he owns)

Possession may be exercised in one’s own name or in that of another. [Art.

524, CC]
Possession is not a definitive proof of ownership nor is non-possession

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inconsistent therewith. [Heirs of G. Bofill v. CA, G.R. No. 107930 (1994)]

Essential Requisites of Possession

• Material occupation – There must be olding or control of a thing or right.
Also known as possession in fact.
• Intent to possess (animus possidendi) – The holding must be with
intention to possess which reflects the state of mind of the possessor.

Object of Possession [Art. 530, CC]

• Must be susceptible of being appropriated
• Abandoned or property with no owner may be possessed but cannot be
acquired by prescription.
• Things must be within the commerce of Men

What May Not Be Possessed

• Res communes
• Property of public dominion
• Right under discontinuous and/or non-apparent Easement

Extent of Possession
• Actual – consists in manifestation of acts of dominion over the thing of
such a nature as a party would naturally exercise over his own property.
• Constructive – possession of a portion of the thing under claim of
ownership is a constructive possession of the whole of such thing, if the
remainder is not in the adverse possession of another.
○ Possession in the eyes of the law does not mean that a man has to have his
feet on every square meter of ground before it can be said that he is in
possession. [Ramos vs. Director of Lands, G.R. No. 13298, (1918)]

2. Acquisition of possession
Ways of Acquiring Possession [Art. 531, CC]
a. By material occupation of a thing or the exercise of a right
b. By the fact that it is subject to the action of our will
c. By the proper acts and legal formalities for acquiring possession

a. By the material occupation of a thing or the exercise of a right

Possession is acquired through the following modes of constructive delivery:

• Traditio brevi manu – If the transferee/buyer already had possession of
the object under a different title even before the sale (e.g., lessee, depositary
subsequently buys the property)
• Traditio constitutum possessorium – the transferor/seller continues in the
possession of the object, but not in the concept of an owner (e.g., owner sells
the property and becomes lessee)

For constructive possession, see the discussion under Characteristics of

Possession.

227
b. By the fact that the thing is subject to the action of our will

Possession is acquired through the following modes of constructive delivery:

• Traditio simbolica – delivering an object or symbol, and placing the thing
under the control of the transferee (ex. Giving a key where the thing or
object is stored, kept or under custody. Since the key is with the vendee,
then it means that the latter can gain access to the object)
• Traditio longa manu – the transferor points out to the transferee the
things which are being transferred, or they merely agree or consent that
delivery has been effected

c. By the proper acts and legal formalities established for acquiring such
right

Acquisition by virtue of a just title such as when property is transmitted by

succession, donation, contract, or execution of a public instrument, etc.

Who Acquires Possession [Arts. 532-534, CC]

a. The same person who is to enjoy it
b. His legal representative
c. His agent
d. Any person without any power whatsoever

General rule: Only acquired upon Ratification

Exception: In cases of negotiorum gestio (Person who voluntarily manages

the property or business of another. In this case, the stanger’s possession
takes effect even without ratification by the property owner)
e. His heirs
• If there is bad faith on the part of the decedent: The effects of the
decedent’s wrongful possession will not affect his heirs. The heir suffers the
consequences of such possession only from the moment he becomes aware
of the flaws affecting the decedent’s title [Art. 528 as cited in De Leon].
• If there is good faith on the part of the decedent: The effects of the
decedent’s possession will benefit the heirs only from the date of his death.

Legal Capacity to Acquire Possession [Art. 535, CC]

Minors and incapacitated persons may acquire possession BUT they need
the assistance of their legal representatives to exercise their rights arising
from such possession.

Preference of Possession [Art. 538, CC]

General Rule: Possession as a fact cannot be recognized at the same time in
two different personalities

Exception: Co-possession In case a dispute arises, the order of preference

is as follows:

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a. The present possessor shall be preferred
b. If there are two possessors, the one longer in possession is preferred
c. If the dates of the possession are the same, the one who presents a title is
preferred
d. If all the foregoing conditions are equal, the thing shall be placed in
judicial deposit pending determination of its possession or ownership
through proper proceedings.

What Does Not Affect Possession

a. Acts merely tolerated [Art. 537, CC]
• Those which because of neighborliness or familiarity, the owner of
property allows another person to do on the property [Tolentino]
• Permissive use merely tolerated by the possessor cannot affect possession
and cannot be the basis of acquisitive prescription. [Art. 1119, CC]
o Possession to constitute the foundation of prescriptive right must be
possession under claim of title; it must be adverse. [Cuaycong v.
Benedicto, G.R. No. L-9989 (1918)]
• A possessor by tolerance is necessarily bound by an implied promise to
vacate upon demand, failing which a summary action for ejectment is the
proper remedy against him. [Peran vs. CFI, G.R. No. L-57259, (1983)]

b. Acts executed clandestinely and without the knowledge of the

possessor [Art. 537, CC]
• Possession by the possessor is not affected as long as it remains clandestine
and unknown.
● “Clandestine possession” is secret possession or possession by stealth. The
possession here must be unknown to the owner. [Paras quoting 4 Manresa
199]
• Possession has to be in the concept of an owner, public, peaceful and
uninterrupted. [Art. 1120, CC]

c. Acts of violence as long as the possessor objects thereto [Art. 536, CC]
• Possession cannot be acquired through force or intimidation as long as
there is a possessor who objects thereto.
o This includes forcibly taking away the property from another, and also
when one occupies the property in the absence of another, and repels
the latter upon his return. [Tolentino]
o Force may be: 1) actual or threatened; 2) done by possessor or agent,
3) done against the owner or any other possessor or the owner’s
representative; 4) done to oust the possessor [Paras].
o Art. 536 applies to one who believes himself the owner of real
property. If he takes justice into his own hands, he is a mere intruder
and he can be compelled to return the property and must suffer the
NECESSARY and NATURAL consequences of his lawlessness. [De
Leon citing Santiago v. Cruz, 54 Phil. 640]
• He who believes that he has an action or a right to deprive another of the

229
holding of a thing must invoke the aid of a competent court, if the holder
refuses to deliver the thing.

3. Effects of possession
a. Possession in the concept of owner is converted into ownership after
the required lapse of time necessary of prescription [Art. 540, CC]

o To consolidate title by prescription, the possession must be under

claim of ownership, and it must be peaceful, public, and uninterrupted
[Art. 1118, CC].
o Acts of possessory character done by virtue of a license or mere
tolerance on the part of the real owner do not apply for purposes of
acquisitive prescription. [Art. 1119, CC]
o The following cannot acquire title by prescription (i.e. they are not
adversely possessing the property)
1. Lessees, trustees, pledges, tenants on shares or planters and all those
who hold in the name or in representation of another.
2. Mere holders placed in possession of the property by the owner, such
as agents, employees.
3. Those holding in a fiduciary character like receivers, attorneys,
depositaries and antichretic creditors.
4. Co-owner, with regard to common property, EXCEPT: when he holds
the same adversely against all of them with notice to them the
exclusive claim of ownership.

b. Entitlement to fruits/expenses

POSSESSOR IN GOOD FAITH – Arts. 544, 526-527, CC

1. As to the Fruits

• Fruits already received [Art. 544(1), CC]

o Entitled to all the fruits until possession is legally interrupted (i.e.
before summons, or demand; see Art. 528 for when possession in
good faith is interrupted)
• Fruits still pending [Art. 545, CC]
o Entitled pro-rata to the fruits already growing when his possession is
legally interrupted.

2. As to the Necessary Expenses [Art. 546, (1), CC]

Definition: necessary for the preservation of the thing [Art. 452, CC by

analogy]. The possessor in good faith may retain the thing until he is
reimbursed for necessary expenses.

3. As to the Useful Expenses [Arts. 546 (2) and 547, CC]

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• Definition: incurred to give greater utility or productivity to the thing
o They are reimbursed only to the possessor in GF as a
compensation or reward for him. Possessor in BF cannot
recover such expenses.
o The possessor in good faith may retain the thing until he is
reimbursed for useful expenses.
o The person who defeats the possessor in possession has the
option to:
o Refund the amount of expenses; or
o Pay the increase in value which the thing may have acquired.
o The possessor has the option of removing the useful
improvements, provided there is no damage to the principal
thing. [Art. 547, CC]
o Exception: When the option to pay for the value of the expenses
or the increase in value of the thing is exercised by the person
who recovered possession.

4. As to Ornamental Expenses or Expenses for Pure Luxury [Art. 548,

CC]

The possessor in good faith is not entitled to a refund for ornamental

expenses. But he may remove the ornamental improvements if they do not
cause damage to the principal thing.

Exception: The one who recovers possession decides to refund the

ornamental expenses/ expenses for pure luxury.

POSSESSOR IN BAD FAITH

1. Possessor in Bad Faith

• One who is aware that there exists in his title or mode of acquisition a
flaw which invalidates it. [Art. 526, CC]
2. Rights of a possessor in bad faith
• Right to be respected in possession; [Art. 539, CC]
• Right to necessary expenses and the expenses for production,
gathering, and preservation of fruits [Arts. 545 and 546; Art. 443, CC]
• Does not have right to reimbursement of expenses for luxury but may
remove them as long as the principal thing suffers no injury or may
sell them to the owner who opts to buy the removable ornaments.
[Art. 549, CC]
• No right to reimbursement for useful improvements and no limited
right of removal.

4. Loss or unlawful deprivation of a movable

One who has lost any movable or has been unlawfully deprived thereof, may
recover it from the person in possession of the same. [Art. 559, CC]

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Note: Relate this to Art. 556 which states that 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
(e.g. A ring misplaced or just lost in a particular place or vicinity). The
possessor has not lost his legal right to the object. He retains his juridical
control of the thing which remains in his, and not another’s patrimony [De
Leon citing 4 Manresa 323].

Possession of Movable Acquired in Good Faith (in Concept of Owner) is

Equivalent to Title [Art. 559, CC]

Doctrine of Irrevindicability: Possession in good faith of a movable is a

presumed ownership. It is equivalent to a title. However, it is merely
presumptive because it can be defeated by the true owner.

Requisites of the doctrine of Irrevindicability

1. The possession should be in good faith;
2. The former owner voluntarily parted with the possession of the thing; and
3. The possession is in the concept of owner.

Exception: One who has lost or has been unlawfully deprived of a movable
may recover it from whoever possesses it without reimbursement
The owner of the thing must prove:
(a) ownership of the thing, and
(b) loss or unlawful deprivation; or bad faith of the possessor

Exception to the Exception

• Where the owner acts negligently or voluntarily parts with the thing
owned, he cannot recover it from the possessor
• If the possessor of the movable acquired it in good faith at a public sale,
the owner cannot obtain its return without first reimbursing the price paid
therefore by the keeper [Art 559. Par 2, CC]

Period to Recover Movable Property [NCC Arts. 1140, 1132, 1133]

• 8 years – from the time the possession of the movable is lost, for
uninterrupted possession (whether in bad faith or good faith). [Art.
1140, CC] Subject to Article 1505 and Article 559.
• 4 years – action to recover prescribes if there is uninterrupted
possession in good faith, subject to Article 1505 and Article 559. [Art.
1132, CC]
• No prescription – if possessed through a crime. [Art. 1133, CC]

Finder of Lost Movable [Arts. 719-720, CC]

a. Whoever finds a movable, which is not a treasure, must return it to its
previous possessor.
b. If the previous possessor is unknown, the finder shall immediately

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 deposit it with the mayor of the city or municipality where the finding
has taken place.
c. The finding shall be publicly announced by the mayor for two
consecutive weeks in the way he deems best.
d. If the movable cannot be kept without deterioration, or without
expenses which considerably diminish its value, it shall be sold at
public auction 8 days after the publication.
e. Six (6) 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.
f. If the owner should appear in time, he shall be obliged to pay, as a
reward to the finder, 1/10 of the sum or of the price of the thing found.

5. Possession in concept of owner, holder, in one's own name, and in name

of another
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 [Art. 525, CC].

Classifications of Possession
a. In one’s own name or in that of another
b. In the concept of holder
c. In the concept of owner
d. In good faith or in bad faith

a. Possession for Oneself, or Possession Exercised in One’s Own

Name and Possession in the Name of Another [Art. 524, CC]

1. In one’s own name – the fact of possession and the right to such
possession is found in the same person.
2. In the name of another – the one in actual possession is without any
right of his own, but is merely an instrument of another in the exercise of the
latter’s possession. It can either be:
● Voluntary – when exercised by virtue of an agreement, e.g. agents or
administrators appointed by the owner or possessor. Third person may also
voluntarily exercise possession in the name of another, but it does not
become effective unless ratified by the person in whose name it is exercised.
● Necessary or legal – when exercised by virtue of law, e.g. representatives
who exercise possession in behalf of a conceived child, juridical persons,
persons not sui juris, and the CPG.

b. Possession in the Concept of Holder with the Ownership

Belonging to Another [Art. 525, CC]

One who possesses as a mere holder, not in the concept of owner,

acknowledges in another a superior right which he believes to be ownership,

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whether his belief is right or wrong, e.g. tenant, usufructuary, borrower in
commodatum.
Examples of Possession in Concept of Holder
a. Lessees
b. Trustees, including: parents over the properties of their children; and
husband and wife over each other’s property
c. Antichretic Creditors
d. Agents
e. Attorneys regarding their client’s properties
f. Depositaries
g. Co-Owners

c. Possession in the Concept of an Owner

i. Concept of ‘Owner’
• Other people believe through one’s actions, that he or she is the owner
of the property and is considered in the opinion of others as owner
• Regardless of good faith or bad faith
• Contrary to concept of holder wherein one recognizes another to be
the owner of the property
• May be exercised by the owner himself or one who claims to be so.
• DOES NOT refer to the possessor‘s inner belief or disposition
regarding the property in his possession.

ii. Possession in the Concept of Owner

• Possession in the concept of an owner refers to his overt acts which
tend to induce the belief on the part of others that he is the owner.
• Possession in the concept of an owner is ius possidendi.
• If a person possesses in the concept of owner—he may eventually
become the owner by prescription
o Thus, a possessor merely in the concept of holder cannot acquire
property by acquisitive prescription—one cannot recognize the right
of another and at the same time claim adverse possession.

6. Rights of the possessor

a. Possessor In Good Faith [Arts. 526-527, 544, 546-547, 548, 552, 1132,
1134, CC]

i. Possessor in Good Faith

One who is unaware that there exists a flaw which invalidates his acquisition
of the thing. He believes that the person from whom he received a thing was
the owner of the same and that therefore he is now the owner based upon
ostensible title or mode of acquisition, e.g. sale, donation, inheritance, or
other means of transmitting ownership. [Art. 526, CC]

ii. Rights of a Possessor in Good Faith:

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 1. Fruits [Art. 544, CC]
2. Refund of necessary expenses [Art. 546, CC]
3. Refund of useful expenses [Art. 546, CC]
4. Right of retention when there are unpaid necessary or useful expenses
[Art. 546, CC]
5. Removal of useful/ornamental improvements without damage to the
principal thing [Arts. 546-547, CC]
6. No liability for deterioration or loss, except in cases of fraudulent
intent or negligence [Art. 552, CC]
7. May acquire full ownership by prescription [Arts. 1117-1138, CC]
8. Presumption of just title [Art. 541, CC]
9. Can ask for the inscription of possession in the Registry of Property
[Art 708, CC]
10.Generally, he/she can do on the things possessed everything that the
law authorizes an owner to do until he/she is ousted by one who has a
better right
11.Can exercise the right of pre-emption and is entitled to indemnity in
case of appropriation
12.Has presumption of continuity of good faith [Arts. 528-529, CC]
13.Non-interruption of possession (possession during intermediate
period) [Arts. 554 and 561, CC]
14.Right to be respected and protected/restored in his/her possession by
the means established by the laws and the Rules of Court. [Art. 539,
CC]. These include summary actions (forcible entry and unlawful
detainer), accion publiciana, and action for replevin. Accion
reivindicatoria is not included. “Every possessor” – includes all kinds
of possession, from that of an owner to that of a mere holder, except
that which constitutes a crime.
15.Lawful possessor can employ self-help [Art. 429, CC]
16.Possession of an immovable extends to the movables within or inside
[Arts. 542 and 426, CC]

Exception: When it is shown or proven that such movables should be

excluded

iii. Other Consequences:

1. Possession is converted into ownership after the required lapse of time

necessary of prescription [Art. 540, CC]
 To consolidate title by prescription, the possession must be under
claim of ownership, and it must be peaceful, public and uninterrupted.
[Art. 1118, CC]
 Acts of possessory character done by virtue of a license or mere
tolerance on the part of the real owner are not sufficient and will not
confer title by prescription or adverse possession. [Art. 1119, CC]

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  The following cannot acquire title by prescription:
o Lessees, trustees, pledges, tenants on shares or planters, and all those
who hold in the name or in representation of another.
o Mere holders placed in possession of the property by the owner such
as agents and employees.
o Those holding the title in a fiduciary character such as receivers,
attorneys depositaries, and antichretic creditors.
o Co-owner, with regard to common property:

Exception: When he/she holds the same adversely against all of the other
co-owners with notice to them of the exclusive claim of ownership.

2. Entitlement to fruits/expenses: Possessor in Good Faith [Arts. 544, 526-

527, CC]

As to the fruits
• Fruits already received [Art. 544(1), CC]: Entitled to all the fruits received
before possession is legally interrupted. (i.e. before summons)
• Fruits still pending [Art. 545, CC]: Entitled to prorate the fruits already
growing when possession is legally interrupted.

As to necessary expenses [Art. 546(1), CC]

• Imposed by the thing itself and have no relation to the desire or purpose of
the possessor; hence they are reimbursed, whatever may be the juridical
character of the person who advanced them.
• The possessor in good faith may retain the thing until he/she is reimbursed
for necessary expenses.

As to useful expenses [Arts. 546 (2) and 547, CC]

• Incurred to give greater utility or productivity to the thing.
• They are reimbursed only to the possessor in good faith as a compensation
or reward. A possessor in bad faith cannot recover such expenses.
• The possessor in good faith may retain the thing until he/she is reimbursed
for useful expenses.
• The other party has the option to:
○ Refund the amount of expenses; or
○ Pay the increase in value which the thing may have acquired.

As to ornamental expenses or expenses for pure luxury [Art. 548, CC]

• The possessor in good faith is not entitled to a refund for ornamental
improvements but such improvements may be removed if they do not cause
damage to the principal thing.

b. Possessor in Bad Faith

i. Definition

236
One who is aware that there exists in his/her title or mode of acquisition any
flaw which invalidates it. [Art. 526, CC]

ii. Requisites:

1. Possessor has a title or mode of acquisition;

2. There is a flaw or defect in said title or mode;
3. Examples of vice or defect in title:
 Grantor was not the owner.
 Requirements for transmission were not complied with.
 Mistake in the identity of the person.
 Property was not really res nullius.
4. The possessor is aware of the flaw or defect in the title.

iii. Rights of a Possessor in Bad Faith:

1. Right to be respected in possession. [Art. 539, CC]

2. Right to necessary expenses and the expenses for production,
gathering, and preservation of fruits. [Arts. 545-546, CC]
3. Does not have right to reimbursement of expenses for luxury
but may remove them as long as the principal thing suffers no
injury or may sell them to the owner who opts to buy the
removable ornaments. [Art. 549, CC]
4. No right to reimbursement for useful improvements and no
limited right of removal. [Art. 546, CC]
5. Right to remove ornamental improvements or be paid the value
of such at the time of recovery but at the owner’s option.

iv. Obligations of a Possessor in Bad Faith:

1. Reimburse the value of fruits received and which the legitimate

possessor could have received. [Art. 549, CC]
2. Pay in proportion to the charges, expenses of cultivation and the
net proceeds upon cessation of good faith. [Art. 545, CC]
3. Bear the costs of litigation. [Art. 550, CC]
4. Liability to the deterioration/loss of a thing possessed in every
case, including fortuitous events. [Art. 552, CC]

7. Loss or termination of possession

A possessor may lose his possession [Art. 555, CC]:
1. By the abandonment of the thing;

Note: The one who abandons must have been a possessor in the concept of
an owner [Paras quoting 4 Manresa 315].

2. By an assignment made to another either by onerous or gratuitous title;

Note: There should be complete transmission of ownership to another person

237
[Paras].

3. By the destruction or total loss of the thing, or because it goes out of

commerce;

4. By the possession of another for more than one year, subject to the
provisions of Art. 537 (acts merely tolerated, clandestine acts and violence).
But the real right of possession is not lost till after the lapse of 10 years.

Other Causes for loss of possession:

1. Acquisitive prescription;
2. Recovery by another lawfully entitled person/entity.

G. USUFRUCT
1. Characteristics
Usufruct is a temporary real right which gives a right to enjoy the property
as well as its fruits of another with the obligation of preserving its form and
substance, unless the title constituting it or the law otherwise provides. [Art.
562, CC]

Constituted by: [PILL: Prescription, Inter vivos acts, Law, Last Will]
1. Law
2. Will of private persons expressed in acts inter vivos
3. Will of private persons expressed in a last will
4. Prescription [Art. 563, CC]

Can be constituted over:

1. The whole or part of the fruits of the thing
2. A right, provided it is not strictly personal or intransmissible. [Art. 564,
CC]

General Characteristics
• Nature: It is a real right of the use and enjoyment of the property, whether
or not the same be registered in the Registry of
Property;
Note: It must be registered in the Registry of Property to prejudice third
persons (Art 709, CC)
o It is transmissible
• Term: Of temporary duration;
• Purpose: To enjoy the benefits and derive all advantages from the
thing due to normal exploitation;
• Scope: May be constituted on real or personal property, consumable
or nonconsumable, tangible or intangible, the ownership of which is
vested upon another.

Natural Characteristics

238
 • Includes jus abutendi, jus utendi, jus fruendi and jus possidendi and
jus vindicandi. The only thing left with the grantor of the usufruct is
the jus disponendi.
• Usufructuary must preserve the form or substance of the thing. (ex:
Usufruct over a house to be used as a dwelling by the usufructuary
cannot be transformed into a boarding house where other people can
occupy the same – akin to De Leon’s comments, p. 413)
• Preservation is a natural requisite, not essential because the title
constituting it, the will of the parties, or the law may provide
otherwise.
• Usufruct is extinguished by the death of the usufructuary.
• A person cannot create a usufruct over his own property and retain it
at the same time. [De Leon quoting Gaboya v. Cui, 38 SCRA 85
(1981)]

Reasons for preserving form and substance

• To prevent extraordinary exploitation;
• To prevent abuse, which is frequent;
• To prevent impairment.

Exception: In an abnormal usufruct, alteration is allowed.

2. Classification
As to Manner Voluntary: created by the will of private persons
of Creation • By act inter vivos – such as contracts and
donations:
• By donation of the usufruct;
• By retention of the usufruct by donor;
• Where a usufruct is constituted inter vivos and for
valuable consideration, the contract is
unenforceable unless in writing;
• By act mortis causa – such as testament
Legal: as provided by law.
Usufruct of parents over the property of unemancipated
children. (now limited to the
collective daily needs of the family) [Art. 226, CC]
Mixed: created both by law and the acts of persons, i.e.
by acquisitive prescription.
The rights and duties of the usufructuary provided by
law may be modified or eliminated by the parties. If the
usufructuary is authorized to alienate the thing in case
of necessity, it is the usufructuary who determines the
question of necessity
As to Simple: only one usufructuary enjoys the property.
Number of Multiple: several usufructuaries enjoy the property as
Beneficiaries cousufructuaries.

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 Simultaneous: at the same time.
Successive: one after the other.
Limitations
• If by donation, ALL donees must be alive. [Art. 756,
CC]
• Fiduciary and the second heir must be alive at the time
of the death of the testator. [Art. 863, CC]
• If by testamentary succession, there must be only 2
successive usufructuaries, and both must be alive or at
least already conceived at the time of the testator’s
death and later born alive. [Art. 869, CC]
As to Object Rights: Must not be strictly personal or intransmissible.
of Usufruct Normal: involves nonconsumable things which the
usufructuary can enjoy without altering their form or
substance (e.g. form and substance are preserved).
Abnormal or irregular: when the usufruct includes
things which cannot be used in a manner appropriate to
its nature without being consumed, and if not
consumed, may be useless. (ex: money, grain, liquors,
per De Leon p. 414).
Quasi-usufruct [Art. 574, CC] Includes things which
cannot be used without being consumed. Money may be
the object of usufruct.
As to Pure – without term or condition
Effectivity With a term – with a period, which may either be
suspensive (from a certain day) or resolutory (to a
certain day)
Conditional – subject to a condition which may either
be suspensive (from a certain event) or resolutory (until
a certain event)
As to Extent As to Fruits Total: all consumed by the usufruct.
of the Partial: constituted only on a part or
Usufruct certain aspects of the usufruct’s fruits.
As to Singular: only on particular property of
the the owner.
object Universal: pertains to the usufruct over
universal property, i.e. over an entire
patrimony, a while inheritance of a
compulsory heir, a dowry;

SPECIAL CASES OF USUFRUCT

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a. Usufruct over a Pension or a Periodical Income [Art. 570, CC]

Covers the right to receive: 1) rent or periodical pensions in money or fruit;

2) interest on bonds or securities; and 3) enjoyment of benefits from an
industrial/commercial enterprise.

Each payment/benefit shall be considered a civil fruit. Being a civil fruit, the
usufructuary is entitled to it in proportion to the time the usufruct lasts. The
date when the benefits accrue determines whether they should belong to the
usufructuary or to the owner. [De Leon, p. 423]

b. Usufruct of Property Owned in Common [Art. 582, CC]

The usufructuary takes the place of the coowner as to:

1. Management;

2. Fruits; and

3. Interest.

Rationale: A co-owner has full ownership of his part and he may alienate,
assign, mortgage or give it in usufruct without the consent of the others [Art.
489, CC]

Note: If a co-owner gives the usufruct of his share to a person, the

usufructuary shall exercise all the rights pertaining to the co-owner
regarding the administration and the collection of fruits.

Effect of partition:

1. The right of the usufructuary is not affected by the division of the property
in usufruct among the co-owners but he is considered bound by such
partition made by the owners of the property.

2. After partition, the usufruct is transferred to the part allotted to the

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coowner.

c. Usufruct Constituted on a Flock or Herd of Livestock [Art. 591, CC]

• On sterile stock: same rules on fungible property govern. (i.e. it is an

abnormal usufruct – may dispose of or consume the animal [Art. 574,
CC]
• ON FRUITFUL STOCK: Must replace ordinary losses of the stock
with the young if:

1. Some animals die from natural causes; or;

2. Some animals are lost due to rapacity of beasts of prey.

Note: If the number of the young produced is less than the animals that died
from natural causes or due to beasts of prey, then the usufructuary does not
have to replace those which are in excess of the young that he currently has.

• No obligation to replace if:

1. There is a total loss of animals because of some unexpected or unnatural

loss (like contagious disease or any other uncommon event, provided the
usufructuary has no fault); or

2. All perish, the usufructuary should deliver the remains to the owner. If
there is partial loss, the usufruct subsists on the remainder.

d. Usufruct over Fruit Bearing Trees and Shrubs and Woodlands [Arts.
575-577, CC]

The usufructuary may fell or cut trees in accordance to the following:

1. Habitual felling or cutting of the owner;

2. Customs of the place as to manner, amount, and season

Note: The rule in accession if a tree falls on another’s land - he cannot fell or
cut trees in a manner that will prejudice the land. The usufructuary may

242
make necessary thinnings to ensure that the remaining trees may properly
grow.

e. Usufruct on a Right of Action to Recover Property or Real Rights

Over Property [Art. 578, CC]

● The action may be brought in the name of the usufructuary.

● If the purpose is the recovery of the property or right, he also has the right
to oblige the owner to give the authority for such purpose, as well as to
furnish him whatever pieces of evidence he may have.

● Relate to Rule 3, Sec. 2 of the Rules of Court or any amendments in

relation thereto as usufructuary being a real party in interest.

f. Usufruct on Mortgaged Property [Art. 600, CC]

• If the usufruct is over the entire patrimony of the owner, Art. 598, CC
should apply. If the usufructuary mortgaged the usufruct himself, he is
liable to pay his own debt.

g. Usufruct over an Entire Patrimony [Art. 598, CC]

Applies when:

1. The usufruct is a universal one;

2. The naked owner has debts or is obliged to make periodical payments

General Rule: The usufructuary is NOT liable for the owner’s debts.

Exceptions:

1. When stipulated, in which case the usufructuary shall be liable for the
debt specified
2. If there is no specification, he is liable only for debts incurred by the
owner before the usufruct was constituted
3. When the usufruct is constituted in fraud of creditors

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h. Usufruct over Property that Deteriorates [Art. 573, CC]

• Definition of Deteriorates: Without being consumed, gradually

deteriorate through wear and tear (e.g. House, furniture, drapes,
equipment). The usufructuary is not liable for deterioration due to
fortuitous event. [De Leon, p. 426]
• Right of Usufructuary: To make use of it in accordance with the
purpose for which they are intended.
• Obligation of Usufructuary: Returns the things in the condition in
which they may have been found at the time of the expiration of the
usufruct despite ordinary defects caused by use and deterioration
produced by age and time.

○ Exception: When it is caused by the usufructuary’s fraud and negligence

(His obligation can be set off against improvements made on the property
under art. 580)

• If usufructuary does not return the things upon the expiration of the
usufruct, he should pay an indemnity equivalent to the value of the
things at the time of such expiration.

i. Usufruct over Consumable Property [Art. 574, CC]

• Consumable: Cannot be used without being consumed; example:

food.
• Right of Usufructuary: To make use of them Obligation of
Usufructuary upon return:

1. If they were appraised at the time of delivery, pay their appraised value.

2. If they were not appraised at time of delivery, either return the same
goods in the same quality and quantity, or pay the current price at time of
cessation of usufruct.

• Usufruct over hidden treasure: The usufructuary, not being the

landowner, is not entitled as owner but is entitled as finder to one half
of the treasure. If somebody else is the finder, the usufructuary gets
nothing. [4 Manresa, p. 386-387]

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 • Rights of the Usufructuary as to the usufruct itself:

1. To mortgage the right of usufruct except parental usufruct

2. To alienate the usufructuary right [Paras, pp. 589-590]

3. To bring action and oblige owner to give him proper authority and
necessary proof in a usufruct to recover property or a real right under Art.
578

3. Rights and obligations of Usufructuary

Rights
1. Right to the thing
2. Right to the fruits
3. Right to lease the thing
4. Right to improve the thing
5. Right of retention
6. Right to mortgage or alienate the right of usufruct
7. Right to bring action [Art. 579, CC]
8. Right to set off improvements [Art. 580, CC]
9. Right to use/leave dead trunks [Art. 575- 576, CC]
10.Right to return but indemnify owner if there is deterioration [Art. 573,
CC]
11.Right to exercise rights of co-owner [Art. 582, CC]

Obligations:
1. To make inventory
2. To give a bond for faithful performance of duties as usufructuary
3. To take care of the thing
4. To undertake ordinary repairs
5. To notify owner of need to undertake extraordinary repairs
6. To pay annual charges and taxes on the fruits.
7. To shoulder costs of litigation
8. To deliver the thing in usufruct to the owner in the condition received.
9. To pay debts
10.To replace animals that die
11.To make inventory and give security

RIGHTS OF USUFRUCTUARY

a. Rights as to the Thing and its Fruits

[SER3IAL: Set-off, Enjoy, Receive, Remove, Retain, Improve, Accession,

Lease]
a. To enjoy the property personally [Art. 572, CC]
b. To receive the fruits of the property [Art. 567, CC]

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b. Right to natural and industrial fruits pending at the beginning of
usufruct

Fruits pending at the beginning of Fruits pending at the termination

the usufruct of the usufruct
Belong to the usufructuary Belong to the naked owner
Without need to reimburse the The owner shall reimburse to the
expenses to the owners usufructuary ordinary cultivation
expenses from the proceeds of the
fruits (not to exceed the value of the
fruits)

Fruits pending at the beginning of Fruits pending at the termination

the usufruct of the usufruct
Without prejudice to the right of 3rd Rights of innocent 3rd parties should
persons e.g. if the fruits arose by not be prejudiced.
building, planting, sowing by a
possessor in good faith, the pending
crop expenses of cultivation and of
the net harvest and charges shall be
prorated between said possessor and
the usufructuary in proportion to the
time of possession [Art. 545, CC]

N.B. In the case of civil fruits, no

need to prorate, as civil fruits accrue
daily [Art. 544, CC]

Right to Civil Fruits – deemed to accrue daily and belong to the

usufructuary in proportion to the time the usufruct may last. [Art. 569, CC]

Special Rule as to Usufruct on Rent, Pension or Interest

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. [Art. 570 par. 1, CC]

Special Rule as to benefits from enterprise with no date fixed for

distribution:
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. [Art. 570 par. 2, CC]

Special Rule for a Usufruct over a co-owned property:

To exercise all rights of the particular co-owner with respect to the

246
administration and collection of fruits/interests from the aliquot share of
property [Art. 582, CC]

Should co-ownership cease by reason of partition, the usufruct of the part

allotted to the co-owner shall still belong to the usufructuary.

c. Right to lease the thing in usufruct [Art. 572, CC]

i. Can be leased without consent of owner.

Exceptions:
• Caucion Juratoria, wherein the lease would show that the property is
not needed by the usufructuary and therefore the use for which the
usufruct was constituted is changed.
• Condition imposed by naked owner i.e. Usufruct is purely personal,
e.g. title creating usufruct provides that usufructuary shall personally
use and enjoy the property given in usufruct.
• Legal usufructs cannot be leased.

ii. The period of the lease is coextensive with the period of usufruct.

Exception: Lease of rural lands will subsist during the agricultural year
despite expiration of the usufruct [Art. 572, CC]

Rules as to Lease:
• A lease executed by the usufructuary before the termination of the
usufruct and subsisting after the termination of the usufruct must be
respected, but the rents for the remaining period will belong to the
owner.
• 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. [Art. 568, CC]
• A lease executed by the owner before the creation of the usufruct is
not extinguished by such usufruct.

Notes:
• Future crops may be sold but such sale would be void if usufruct
terminates prior to harvest of future fruits. The buyer’s remedy is to recover
from the usufructuary.
• The usufructuary-lessor is liable for the act of the substitute.
• 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. [Art. 590, CC]

d. Right to enjoy any increase which the thing may acquire through
accession [Art. 571, CC]

247
e. Right to make improvements on the property as he may deem proper
[Art. 579, CC]

i. He may improve the thing without altering its form and substance.
ii. He is not entitled to indemnification.
iii. He may also remove improvements made by him if it is possible to do
so without damage to property.

Note: The option to remove improvements belongs to the usufructuary, and

the naked owner cannot compel him to do so, neither can the owner compel
the usufructuary to leave the improvements and just pay for their value.

iv. The usufructuary has the right to set-off the improvements on the
property against any damage to the same [Art. 580]

Note: Registration of improvements – to protect usufructuary against 3rd

persons

f. Right of retention: to retain the thing/property until he is reimbursed

for taxes on the capital and advances for extraordinary expenses [Art.
612, CC]

The usufructuary has the right of retention until he is reimbursed of the

amount he paid for taxes and the increase in value caused by the
extraordinary repairs he made.

RIGHTS AS TO THE LEGAL RIGHT OF USUFRUCT ITSELF [ABE

– Alienate, Bring action, Exercise all rights]

i. To alienate or mortgage the right itself [Art. 572, CC]

The usufructuary may alienate his right of usufruct, even by a gratuitous title
(e.g. donation); but all the contracts he may enter into as such usufructuary
shall terminate upon the expiration of the usufruct. [Art. 572, CC]

Except
1. Parental usufruct [Arts. 225 and 226, FC]
2. Usufruct given in consideration of the person of the usufructuary intended
to last during his lifetime

ii. To bring action and oblige the owner to give him proper authority
and necessary proof in cases of usufruct to recover real property, real
right, or movable property [Art. 578, CC]
The action may be brought in the name of the usufructuary.

If a favorable judgement is obtained, the usufruct shall be limited to the

fruits, and the naked ownership shall belong to the owner. [Art. 578, CC]

248
OBLIGATIONS OF USUFRUCTUARY

i. Obligations at the beginning of the usufruct or before exercising the

usufruct

• 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 [Art.
583 (1), CC]

Exceptions to making inventory

a. No one will be injured thereby [Art. 585, CC]
b. Title constituting usufruct excused the making of inventory.
c. Title constituting the usufruct already made the inventory.

• To give security, binding himself to fulfill the obligations imposed

upon him in accordance with this Chapter. [Art. 583 (2), CC]

Exceptions to Giving Security

1. No prejudice would result; [Art. 585, CC]
2. Usufruct is reserved by a donor; [Art. 584, CC]
3. Gratitude on the donee’s part demands that the donor be excused from
filing the bond.
4. Title constituting usufruct excused usufructuary.
5. A usufructuary may take possession under a caucion juratoria (bond
by oath) [Art. 587, CC]
6. When there is waiver by the naked owner [Paras (Property), p. 612].
7. When the usufructuary is the donor of the property who has reserved
the usufruct [Art. 584, CC].
8. When there is a parental usufruct under the Family Code [Art. 225,
CC].

Requisites of Caucion juratoria:

1. Proper court petition;
2. Usufruct is over a house, furniture or tools of a trade and the necessity
for delivery of furniture, implements or house included in the
usufruct;
3. Approval of the court; and
4. Sworn promise.

Note: These requirements are not conditions precedent to the

commencement of the right of the usufruct but merely to the entry upon the
possession and enjoyment of the property.

Effect of failure to give bond: [Art. 586, CC]

a. The owner may demand that the immovable properties be placed
under administration;

249
 b. That the movable properties be sold and the proceeds of the sale be
the property held in usufruct – legal interest of 6% shall be the fruits;
c. 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
d. That the capital or sums in cash and the proceeds of the sale of the
movable property be invested in safe securities.
e. The owner may, until the usufructuary gives security, retain in his
possession the property in usufruct as administrator, subject to the
obligation to deliver to the usufructuary the net proceeds, after
deducting the sums, which may be agreed upon or judicially allowed
him for such administration.

ii. Obligations during the usufruct

[CAPCORN – Care, Allow improvements, Pay AIDE (Annual taxes,

Interest, Debts, Expenses for litigation), Collect credit, Ordinary repairs,
Replace animals, Notify UP (Urgent repairs, Prejudicial act)]
a. To take Care of the property as a good father of the family [Art. 589]
b. To make Ordinary repairs – required by the wear and tear due to the
natural use of the thing and are indispensable for its preservation.
[Art. 592, CC]
c. To inform/Notify the owner of urgent extraordinary repairs [Art. 593,
CC]
d. To Allow the naked owner to make works and improvements of
which the immovable in usufruct is susceptible, or plantings, if rural
[Art. 595, CC].

Provided:
1. The works or improvements are not prejudicial to the usufructuary’s
rights.
2. No diminution in the value of the object in usufruct.
e. To pay Annual taxes and charges on the fruits for the time the
usufruct lasts. [Art. 596, CC]
f. To pay Interest on taxes on capital paid by the naked owner. [Art.
597, CC]
g. To pay Debts if the usufruct is over the entirety of a patrimony [Art.
598, CC]
h. To Secure the approval of the owner or the court to collect credit
which form part of the usufruct, if he has not given proper security or
has been excused from giving security. [Art. 599, CC]
i. To notify owner of any Prejudicial act to the rights of ownership over
the usufruct, by a third person. [Art. 601, CC]
Consequence: He is liable for damages if he fails to give notice.
j. To pay Expenses and costs for litigation if incurred because of the
usufruct. [Art. 602, CC] To answer for fault or negligence of the one

250
 he alienated, leased to the object of the usufruct or the fault or
negligence of the usufructuary’s agent. [Art. 590, CC]

iii. Obligations at the Time of the

Termination of the Usufruct

[RIP – Return, Indemnify, Pay interest]

a. To return the thing upon termination.
b. To pay legal interest for the duration of the usufruct on the expenses
for extraordinary repairs, if naked owner made the repairs [Art. 594,
CC]
c. To pay proper interest on sums paid as taxes by the owner
d. To indemnify the naked owner for any loss caused by the negligence
of the usufructuary or his transferees

4. Rights of the owner

a. At the Beginning of the Usufruct

See obligations of usufructuary at the beginning of the usufruct

discussed above.

b. During the Usufruct

1. The owner retains title to the thing or property.

2. He may alienate the property. [Art. 581, CC] He may not alter the
form or substance of the thing, nor do anything prejudicial to the
usufructuary.
3. He may construct buildings, make improvements and plantings,
provided:
● The value of the usufruct is not impaired; and
● The rights of the usufructuary are not prejudiced. [Art. 595, CC]
4. He can constitute a voluntary easement over land/building held in
usufruct without the usufructuary’s consent. But if it affects the
usufructuary’s right, the latter must give his consent. [Art. 689, CC]
• If the easement is perpetual, the consent of both must be obtained.
[Art. 690, CC]

5. Extinction, termination, and extinguishment

HOW EXTINGUISHED; TERMINATED

a. By the death of the usufructuary

Usufruct is personal and it cannot be extended beyond the lifetime of the

usufructuary. [Eleizegui v. Lawn Tennis Club, 2 Phil 309 (1903)].

This is true even if a resolutory period or condition has been stipulated and
the usufructuary dies before the expiration of the period or the fulfillment of

251
the condition. [De Leon]

Exceptions
1. When a contrary intention clearly appears [Art. 603, CC]
• The parties may expressly stipulate that the usufruct shall continue
even after the death of the usufructuary until the arrival of a period or
the happening of a certain event. [Paras]
2. In cases of multiple usufructs, the usufruct ends at the death of the last
survivor [Art. 611, CC]
• If constituted simultaneously: ALL USUFRUCTUARIES must be
alive or at least conceived at the time of the constitution [Art. 863,
CC] [Paras]
• If constituted successively [Paras]:
o By virtue of a donation: ALL DONEES – USUFRUCTUARIES must
be alive at the time of donation [Art. 756, CC]
o By virtue of a will: there should only be 2 successive usufructuaries’,
and both must have been alive at the time of testator’s death [Same
rule as in fideicommissary substitution in Art. 863 and 869, CC]
3. If the period is fixed using the life of another person as reference or there
is a resolutory condition
 In this case, the death of the usufructuary would not affect the
usufruct and the right is instead transmitted to the heirs of the
usufructuary until the expiration of the term or the fulfillment of the
condition.

b. By the expiration of the period for which it was constituted

Special Cases of Period:

1. Special case of juridical persons [Art. 605, CC]
 Usufruct cannot be constituted in favor of a town, corporation, or
association for more than 50 years.
 If before the expiration of such period the town is abandoned, or the
corporation or association is dissolved, the usufruct shall be
extinguished.
2. Special case of third person attaining a certain age [Art. 606, CC]
 Subsists for the period specified (until the birthday at which the
person would’ve attained that age)
o Exception: The usufruct has been expressly granted only in
consideration of the existence of such person.

c. By the fulfillment of any resolutory condition provided in the title

creating the usufruct

d. By merger of the usufruct and ownership in the same person

e. By renunciation of the usufructuary

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Limitations [De Leon]
1. May be made expressly or impliedly, but must comply with the forms of
donation
2. Does not require the consent of the naked owner
3. If made in fraud of creditors, they may rescind the waiver through an
action under Art. 1381, CC (accion pauliana).

f. By the total loss of the thing in usufruct

Total loss: when the thing in usufruct is completely destroyed, or perishes,

or disappears in such a way that its existence is unknown or it cannot be
recovered, or it goes out of commerce [Art. 1189, CC]

Situation Effect
Art. 607, CC
If destroyed property is not insured
If usufruct is on the building and the If the owner does not rebuild:
land (Par. 1) Usufruct continues over the land
and materials (plus interests).
If usufruct is on the building only If the owner does not rebuild:
(Par. 2) Usufruct continues over the land
and materials (plus interests).

If the owner rebuilds: Owner can

occupy the land and use the
materials.

If the owner occupies the land and

uses the materials, he must pay the
usufructuary during the continuance
of the usufruct the interest on the
value of the land and materials.
Art. 608, CC
If destroyed property is insured before termination of the usufruct
When insurance premium paid by If the owner rebuilds:
owner and Usufructuary can continue enjoying
Usufructuary (Par. 1) the new building.

If the owner does not rebuild:

Usufructuary shall receive interest
on the insurance indemnity.
When the insurance is taken by the Owner shall receive the full amount
naked owner only because the of the insurance indemnity in case
usufructuary refuses to contribute to of loss, and either of the following,
the premium (Par. 2) depending on the case (apply Art.
607, CC):

253
 If the owner does not rebuild:
Usufruct continues over the
remaining land and materials (plus
interests)

If the owner rebuilds:

Usufruct does not continue on the
new building, but owner should pay
interest on the value of the land and
materials.
When insurance taken by Insurance proceeds go to the
usufructuary only depends usufructuary. No obligation to
on value of usufructuary’s insurable rebuild. Usufruct continues on the
interest [Labitag Diagrams land.
Owner has no share in insurance
proceeds.

g. By the termination of the right of the person constituting the usufruct

Example: A usufruct constituted by a vendee a retro terminates upon

redemption.

h. By prescription

• This refers to acquisitive prescription by a stranger. [Paras]

• It is not the non-use which extinguishes the usufruct by prescription,
but the use by a 3rd person. [Tolentino]
• There can be no prescription as long as the usufructuary receives the
rents from the lease of the property, or he enjoys the price of the sale
of his right. [Tolentino]

EFFECT OF TERMINATION [ART. 612, CC]

a. Obligations and Rights of the Usufructuary [Paras]

 Must return the property to the naked owner [Art. 612, CC]
 Right to retain the property till he is reimbursed
o For taxes on the capital which had been advanced by him [Art. 597(2),
CC]; and
o Indispensable extraordinary repairs or expenses insofar as there has
been an increase in the value [Art. 594(2), CC]
 Right to remove removable improvements [Art. 579, CC] or set them
off against damages he has caused [Art. 580, CC].

b. Obligations of the Owner [Paras]

• Must cancel the security or mortgage after delivery is made [Art. 612,

254
 CC]
• Must in case of rural leases, respect leases made by the usufructuary,
till the end of the agricultural year [Art. 572, CC]
• Must make reimbursements to the usufructuary in the proper cases.
[Arts. 597 and 594, CC]

ACTS WHICH DO NOT EXTINGUISH THE USUFRUCT

a. Expropriation of Thing in Usufruct [Art. 609, CC]

1. If the naked owner alone was given the indemnity

• General Rule: The naked owner has the option
o To replace it with an equivalent thing; or
o To pay to the usufructuary legal interest on the indemnity. This
requires a security to be given by the naked owner for the payment of
the interest.
• Exception: If both the naked owner and the usufructuary were
separately given indemnity, each owns the indemnity given to him,
the usufruct being totally extinguished.
2. If both the naked owner and the usufructuary were separately given
indemnity [Paras]
 Each owns the indemnity given to him, the usufruct being totally
extinguished.
3. If usufructuary alone was given the indemnity [Paras]
 He must give it to the naked owner and compel the naked owner to
return either the interest or to replace the property.
 He may even deduct the interest himself, if the naked owner fails to
object.

b. Bad Use of Thing in Usufruct [Art. 610, CC]

 Bad use of the thing in usufruct does not extinguish the right of the
usufructuary whether there is security or not.
 If bad use causes considerable injury to the owner:
o It does not extinguish the usufruct but the owner is entitled to demand
delivery and administration of the thing with the obligation to pay
annually the net proceeds.
 The usufructuary is liable for damages caused to property.

c. Usufruct over a Building of Thing in Usufruct [Art. 607 and 608, CC]

[See table above for the application.]

H. EASEMENTS
1. Characteristics

255
a. It is a real right.
• It gives rise to an action in rem or real action against any possessor of the
servient estate. It is enforceable against the whole world. The owner of the
dominant estate can file a real action for enforcement of right to an
easement.

Note: Being a real right, an easement is constituted on corporeal immovable

property of another by virtue of which the owner has to refrain from doing,
or must allow someone to do something on his property for the benefit of
another thing or person. It exists only when the servient and dominant
estates belong to two different owners. It gives the holder of the land but
grants no title thereto. Therefore, an acknowledgment of the easement is an
admission that the property belongs to another.
Having held the property by virtue of an easement, petitioner cannot assert
that its occupancy since 1929 was in the concept of an owner. [Cuaycong v.
Benedicto, 37 Phil. 781]

b. It is a right enjoyed over another’s property (jus in re aliena). • When

the dominant and the servient estates have the same owner, the easement is
extinguished. Separate ownership is a prerequisite to an easement. The
acknowledgment of an easement is an admission that the property belongs to
another.

c. It can only exist between neighboring estates in case of real

easements.

d. It is a right constituted only over an immovable by nature (land and

buildings). [Art. 613, CC]
• It cannot be constituted over movable properties or even immovable by
incorporation, by destination or by analogy. Also, it cannot be established on
things beyond the commerce of man, (i.e. property of public dominion).

e. It limits the servient owner’s right of ownership for the benefit of the
dominant estate.
• There exists a limitation on ownership: the dominant owner is allowed
to enjoy or use part of the servient estate, and owner of the servient
estate is restricted in his enjoyment of his property. The right given is
right of limited use, but no right to possess servient estate.
• It is essential that there be a benefit though it is not essential that it be
great in character or actually exercised. The benefit goes to the
dominant estate, not necessarily to the owner of said estate. [Paras, p.
653]
• The right given is the right of limited use, but no right to possess
servient estate.
• Being an abnormal limitation of ownership, it cannot be presumed.

f. It creates a relation between tenements.

256
 • There is no transfer of ownership but a relationship is created,
depending on the type of easement.
• General Rule: It may consist in the owner of the dominant estate
demanding that the owner of the servient estate refrain from doing
something (servitus in non faciendo) or that the latter permit that
something be done over the servient property (servitus in patendo),
but not in the right to demand that the owner of the servient do
something (servitus in faciendo), except if such act is an accessory
obligation to a praedial servitude (obligation propter rem). The
servient owner merely allows something to be done to his estate.
• Praedial servitudes
○ Right to place beams in an adjoining wall to support a structure.
○ Right to use another’s wall to support a building.

g. It is inherent or inseparable from estate to which they actively or

passively belong. [Art. 617, CC]
• Easements are merely accessory to the tenements, and a “quality
thereof.”
They cannot exist without tenements. However, they may exist even if
they are not expressly stated or annotated as an encumbrance on the
titles.

h. It is intransmissible.
• It cannot be alienated separately from the tenement affected or
benefited.
Any alienation of the property covered carries with it the servitudes
affecting said property. However, this affects only the portion of the
tenement with the easement, meaning that the portions unaffected can
be alienated without the servitude.

i. It is indivisible. [Art. 618, CC]

• 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
that corresponds to him.
• If the dominant estate 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.

j. It has permanence or is perpetual.

• Once it attaches, whether used or not, it continues and may be used
anytime
• Perpetual: Exists as long as property exists, unless it is extinguished.

EASEMENTS V. OTHERS

Easement Distinguished from Lease

Easement Lease

257
 Real right, whether Real right only when it is registered, or
registered or not. when its subject matter is real property and
the duration exceeds one year.
May be constituted only on an immovable
by nature.
May be constituted
May be constituted only on May be constituted on real or personal
an immovable by nature. property unless a contrary intention
appears.
Limited to use of real Limited right to both the use and
property of another but possession of the property of another.
without the right to possess.

Easement Distinguished from Usufruct

Easement Usufruct
May be constituted only on an May be constituted on either
immovable by nature. movable or immovable property.
Not extinguished by the death of Extinguished by the death of
dominant owner. usufructuary.
Non-possessory right over an Involves a right of possession over
immovable. an immovable.
Limited to particular or specific use Includes all the uses and the fruits
of the servient estate. of the property.

Note:
1. There can be no easement over a usufruct. Since an easement
may be constituted only on a corporeal immovable property, no
easement may be constituted on a usufruct which is not a
corporeal right.
2. There can be no usufruct over an easement. While a usufruct
may be created over a right, such right must have an existence
of its own independent of the property. An easement cannot be
the object of a usufruct because it has no existence independent
of the property to which it attaches.
3. There can be no easement over another easement for the same
reason as in no. 1 above.

General Rules
1. Nulli res sua servi: No one can have a servitude over one’s own
property.
2. Servitus in faciendo consistere nequit: A servitude cannot consist in
doing. Although some easements seem to impose a positive prestation
upon the owner of the servient estate, in reality, the primary obligation
is still negative.

Illustration: The owner of a tree whose branches extend over to a

258
neighboring property is required to cut off the extended branches, but the
real essence of the easement is the obligation not to allow the branches of
the tree to extend beyond the land.

Exception: Praedial servitude, where the positive obligation is an accessory

to the negative easement. [Art. 680, CC]
3. Servitus servitutes esse non potest: There can be no servitude over
another servitude.
4. A servitude must be exercised civiliter, or in a way least burdensome
to the owner of the servient estate.
5. A servitude must have a perpetual cause.

2. Classification
As to recipient Real or Praedial: exists for the benefit of a particular
of benefits tenement. [Art. 613, CC]
Personal: exists for the benefit of persons without a
dominant tenement [Art. 614, CC]
As to its Continuous: Use is or may be incessant, without the
exercise [Art. intervention of any act of man
615, CC] Discontinuous: Used at intervals, and dependent upon
the acts of man.
As indication of Apparent: Made known and continually kept in view
its existence by external signs that reveal the use and enjoyment of
[Art. 615, CC] the same
Non-apparent: No external indication of their
existence.
As to the objectPositive: Imposes upon the owner of the servient estate
or obligation
the obligation of allowing something to be done, or of
imposed doing it himself.
[Art. 616, CC] Negative: Prohibits the owner of the servient estate
from doing something that he could lawfully do if the
easement did not exist
As to its cause Legal [Art. 619 and 634, CC]: created by law, whether
or origin for public use or for the interest of private persons.
Example: Natural drainage of waters, Abutment of land,
Aqueduct, etc.
Voluntary [Art. 619, CC]: created by the will of the
owners of the estate through contract, last will or
donation.
These must be recorded in the Registry of Property to
prejudice third persons.
Mixed: created partly by will or agreement and partly
by law.

259
 Note: There is no such thing as a JUDICIAL
EASEMENT. The Courts cannot create easements, they
can only declare the existence of one, if it exists by
virtue of the law or will of the parties. [Castro v.
Monsod, G.R. No. 183719 (2011)]

Relevance of Classifications

1. Determines whether or not the easement can be acquired by

prescription of ten years or by title. [Art. 620 and 622, CC]
2. Determines how to compute the prescriptive period in case it
can be acquired by prescription. [Art. 621, CC]
3. Determines how easement is lost by prescription [Art. 631(2),
CC]

LAW GOVERNING LEGAL EASEMENTS

For public easements

• Special laws and regulations relating thereto. (e.g. PD 1067 (Water

Code) and PD 705 (Forestry Code))
• By the provisions of Chapter 2, Title VII, Book II, CC.

For private legal easements

• By agreement of the interested parties whenever the law does not

prohibit it and no injury is suffered by a 3rd person.
• By the provisions of Chapter 2, title VII, Book II.

KINDS OF PRIVATE LEGAL EASEMENTS PROVIDED BY THE

NEW CIVIL CODE

1. THOSE ESTABLISHED FOR THE USE OF WATERS OR

RELATING TO WATERS

260
1. Natural Drainage [Art. 637, CC]

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.

Refer to Art. 456 of the Water Code which states that “when artificial means
are employed to drain water from higher to lower land, the owner of the
highest land shall select the routes and methods of drainage that will cause
the minimum damage to the lower lands, subject to the requirements of just
compensation.” [P.D. 1067, Water Code]

2. Riparian Banks [Art. 638, CC]

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 3 meters for
urban areas, 20 meters for agricultural areas and 40 meters for forest areas
(PD 1067, Water Code as amended by PD 1067) along their margins, to the
easement of public use in the general interest of navigation, floatage, fishing,
recreation and salvage.

Estates adjoining the banks of navigable or floatable rivers are subject to the
easement of towpath for the exclusive service of river navigation and
floatage. If it be necessary to occupy lands of private ownership, the proper
indemnity shall first be paid.

3. Abutment of a Dam [Art. 639, CC]

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.

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4. Drawing Water and Watering Animals [Arts. 640-641, CC]

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. [Art. 640, CC]

Easements for drawing water and for watering animals carry with them the
obligation of the owners of the servient estates to allow passage to persons
and animals to the place where such easements are to be used, and the
indemnity shall include this service. [Art. 641, CC]

The width of the easement must not exceed 10 meters. [Art. 657, CC]

5. Aqueduct [Arts. 642-646, CC]

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. [Art. 642,
CC]

Requisites to establish easement of Aqueduct [Art. 643, CC]:

• To prove that he can dispose of the water and that it is sufficient for the use
for which it is intended;

• To show that the proposed right of way is the most convenient and the least
onerous to third persons;

• To indemnify the owner of the servient estate in the manner determined by

the laws and regulations.

What it cannot be imposed on: Easement of aqueduct for private interest

cannot be imposed on buildings, courtyards, annexes, or outhouses, or on

262
orchards or gardens already existing. [Art. 644, CC]

Right of servient estate owner: This easement 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. [Art. 645, CC]

Treatment under law: This easement is 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. [Art. 646, CC] In the appropriation of water, there is
a need to apply for water rights.

Any person having an easement for an aqueduct may enter upon the servient
land for the purpose of cleaning, repairing or replacing the aqueduct or the
removal of obstructions therefrom [P.D. 1067, Water Code]

Easements for aqueduct and of right of way cannot be acquired by

prescription because although it may be apparent, it is discontinuous in
character. Under the Water Code of the Philippines, all waters belong to the
state. Water legally appropriated shall be subject to the control of the
appropriator from the moment

it reaches the appropriator from the moment it reaches the appropriator’s

canal or aqueduct leading to the place where the water will be used or stored
and, thereafter, so long as it is being beneficially used for the purposes for
which it was appropriated. [Art. 8, Water Code]

6. Stop Lock or Sluice Gate [Art. 647, CC]

The construction of a stop lock or sluice gate in the bed of the stream from
which the water is to be taken, for the purpose of improving an estate. Such
person 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.

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2. RIGHT OF WAY [Arts. 649-657, CC]

Who may demand [Art. 649, CC]

1. The owner of the dominant estate; or

2. Any person with the real right to cultivate or use the dominant estate e.g. a
usufructuary, a de jure possessor.

Note: A lessee cannot demand such easement, because the lessor is the one
bound to maintain him in the enjoyment of the property.

Note: A right of way can be established through the will of parties as well,
and the provisions on the legal easement of right of way will not govern.

Requisites for legal demand to establish the easement of right of way

[Art. 649, CC and Floro v. Llenado, G.R. No. 75723, 1995]]

The dominant estate is surrounded by other immovables owned by other

persons;

1. There must absolutely be no access i.e. means of entrance or exit/egress to

a public highway;

2. Even if there is access, it is difficult or dangerous to use, or grossly

insufficient;

• Mere inconvenience in the use of an outlet does not render the

easement a necessity.
• An adequate outlet is one that is sufficient for the purpose and needs
of the dominant owner, and can be established at a reasonable
expense.
• Does not necessarily have to be by land – an outlet through a
navigable river or a lake or the sea if suitable to the needs of the
tenement is sufficient.

3. The isolation of the immovable is not due to the dominant owner’s own
acts e.g. if he constructs building to others obstructing the old way; and

264
4. There is payment of indemnity.

If right of way is permanent and continuous for the needs of the dominant
estate = value of the land + amount of damage caused to the servient estate.

If right of way is limited to necessary passage for cultivation of the estate

and for gathering crops, without permanent way = damage caused by
encumbrance.

Rules for establishing Right of Way

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, CC]

The criterion of least prejudice to the servient estate must prevail over the
criterion of shortest distance although this is a matter of judicial
appreciation. While shortest distance may ordinarily imply least prejudice,
it is not always so as when there are permanent structures obstructing the
shortest distance; while on the other hand, the longest distance may be free
of obstructions and the easiest or most convenient to pass through. [Quimen
v. CA, G.R. No. 112331 (1996)]

The fact that LGV had other means of egress to the public highway cannot
extinguish the said easement, being voluntary and not compulsory. The free
ingress and egress along Mangyan Road created by the voluntary agreement
between the parties is thus legally demandable with the corresponding duty
on the servient estate not to obstruct the same. [La Vista Association v. CA,
G.R. No. 95252 (1997)]

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

265
time to time. Art. 651, CC]

Who has the burden of proof in an action for right of way? The burden of
proving the existence of the prerequisites to validly claim a compulsory right
of way lies on the owner of the dominant estate.

Obligations in Permanent and Temporary Easements of Right of Way

Permanent right of way Temporary right of way

Indemnity
Consists of the damages and the Consists of the damages only.
value of the land.
Necessary repairs
Dominant owner to spend. Servient owner to spend.
Share in taxes
The dominant owner shall reimburse Servient owner to spend on such.
a proportionate share of taxes to the
proprietor of the servient estate.

Rules on Indemnity for Estates Enclosed Through a Sale, Exchange,

Partition or Donation.

Sale, exchange or partition Donation

Buyer, grantee or done as dominant owners
The buyer or grantee shall grant the The donee shall pay the donor
right of way without indemnity. indemnity.
Seller, grantor or donor as dominant owners
The seller or grantor shall pay The donee shall grant the right of
indemnity. way without indemnity.

Notes on extinguishment

• Extinguishment is not automatic. The owner of the servient estate

must ask for such extinguishment.
• Indemnity paid to the servient owner must be returned without
interest. Interest on account of indemnity is deemed to be rent for use
of easement.

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Special Rights of Way

a. Right of way to carry materials for the construction, repair,

improvement, alteration or beautification of a building through the
estate of another; or
b. Right of way to raise on another’s land 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. [Art. 656, CC]
c. Right of way for the passage of livestock known as animal path,
animal trail, watering places, resting places, animal folds: Governed
by the ordinances and regulations relating thereto, and, in the absence
thereof, by the usages and customs of the place. [Art. 657, CC]

Limitations as to measurements:

• Animal path - max width of 75 meters.

• Animal trail - max width of 37 meters and 50 centimeters.

• Watering place for animals - max width of 10 meters.

3. PARTY WALL [Arts. 658-666, CC]

Definition

A common wall which separates two estates, built by common agreement at

the dividing line such that it occupies a portion of both estates on equal
parts.

A party wall is a special form of co-ownership (see Art. 658, CC).

• Each owner owns part of the wall but it cannot be separated from the other
portions belonging to the others. A party wall has a special characteristic that
makes it more of an easement as it is called by law.

• An owner may use a party wall to the extent of the ½ portion on his
property.

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 Party Wall Co-Ownership
Shares of the co-owners cannot be Before division of shares, a co-
physically segregated but they can owner cannot point to any definite
be physically identified. portion of the property as belonging
to him.
There is no such limitation. None of the coowners may use the
community property for his
exclusive benefit because he would
be invading the rights of the others.
Any owner may free himself from In a co-ownership, partial
contributing to the renunciation is allowed.
cost of repairs and construction of a
party wall by renouncing all his
rights thereto.

When Existence of Easement of Party Wall

is Presumed [Art. 659, CC]

• In dividing walls of adjoining buildings up to the point of common

elevation;

• In dividing walls of gardens or yards situated in cities, or towns, or in rural

communities;

• In fences, walls and live hedges dividing rural lands.

Note: A title or an exterior sign, or any other proof showing that the entire
wall in controversy belongs exclusively to one of the adjoining property
owners may rebut these presumptions.

Question: In an easement of party wall, what estate is dominant and what is

servient? The party wall itself is servient, while the adjoining estates
belonging to the co-owners of the party wall are dominant. Refer to Arts.
613 and 614 of the Civil Code.

When Existence of An Exterior Sign Is Presumed [Art. 660, CC]

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 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 enclosed by fences or live hedges adjoin others
that are not enclosed.

Note: The deposit of earth or debris on one side alone is an exterior sign that
the owner of that side is the owner of the ditch or drain. The presumption is
an addition to those enumerated in Art. 660, CC. [Art. 661, CC]

Rights of Owners of a Party Wall

1. Generally, part-owners may use the wall in proportion to their respective

interests [Art. 666, CC], provided that:

• The right to use by the other party is not interfered with;

• The consent by the other owner is needed if a party wants to open a
window; and
• The condition of the building is determined by experts.

2. To increase the height of the wall [Art. 664, CC].

• He does this at his expense, including the thickening of the wall on his
land.
• He shall indemnify the other party for any damages.

3. To acquire a half-interest in any increase in height or thickness of the

269
wall, paying a proportionate share in the cost of the work and the value of
the land covered [Art. 665, CC].

4. To renounce his part ownership of a party wall if he desires to demolish

his building supported by the wall. [Art. 663, CC]

He shall bear all the expenses of repairs and work necessary to prevent any
damage which the demolition may cause to the party wall.

Obligations of Owners of a Party Wall

1. To contribute proportionately to the repair and maintenance of the party

wall [Art. 662, CC].

Exception: He renounces his part ownership, and this includes the

renunciation of the share in the wall and the land.

Exception to exception: He cannot renounce his part if his building is being

supported by the party wall.

2. If he raises the height of the wall, he must:

• Bear the cost of maintenance of the additions;

• Bear the cost of construction, if the wall cannot support the additional
height;

• Give additional land, if necessary to thicken the wall;

• Pay for damages, if necessary, even if temporary; and

• Bear the increased expenses for preservation. [Art. 664, CC]

4. EASEMENT OF LIGHT AND VIEW [ARTS. 667-673, CC]

Easement of light (jus luminum)

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The right to admit light from the neighboring estate by virtue of the opening
of a window or the making of certain openings.

Easement of view (jus prospectus)

The right to make openings or windows, to enjoy the view through the estate
of another and the power to prevent all constructions or works which would
obstruct such view or make the same difficult.

The easement of view necessarily includes the easement of light, because It

is impossible to have a view only without a light. However, it is possible to
have light without a view.

How acquired

Through a period of prescription of 10 years, counted depending on whether

it was positive or negative in nature.

Nature [Art. 668, CC]

1. Positive: Opening a window through a party wall.

• Period of prescription begins upon the opening being made through

the wall of another.
o When a part owner of a party wall opens a window therein, such act
implies the exercise of the right of ownership by the use of the entire
thickness of the wall.
• The easement is created only after the lapse of the prescriptive period.

2. Negative: Opening a window through a wall on the dominant estate.

• Period of prescription begins upon the formal prohibition upon the

owner of the adjoining land or tenement.
o Formal means that the prohibition has been notarized. Meaning notice
and demand was given to the owner of the possible servient estate
[Cortes v Yu-Tibo, G.R. No. 911 (1903)]

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 o When a person opens a window on his own building, he is exercising
his right of ownership on his property, which does not establish an
easement.
• Coexistent is the right of the owner of the adjacent property to build
or plant on his own land, even if such structures or planting cover the
window.
• If the adjacent owner does not build structures to obstruct the window,
such is considered mere tolerance and NOT a waiver of the right to
build.
• An easement is created only when the owner opens up a window and
subsequently prohibits or restrains the adjacent owner from doing
anything that may tend to cut off or interrupt the light and the 10-year
prescriptive period has lapsed by a notarial prohibition.

Note: What is the reason why the easement of light and view and the
easement not to build a higher easement (altius non tollendi) cannot go
together? The reason is because an easement of light and view requires that
the owner of the servient estate shall not build to a height that will obstruct
the window. They are, as it were, the two sides of the same coin. While an
easement of light and view is positive, that of altius non tollendi is negative.
[Amor v. Florentino, 74 Phil. 403 (1943)]

Limitations as to measurements

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. [Art. 670, CC]

In cases of direct views from the outer line of the wall when the openings do
not project, the distance shall be measured from the outer line of the latter
when they do, and in cases of oblique view from the dividing line between
the two properties. [Art. 671, CC]

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Exception: In buildings separated by a public way or alley, not less than 3
meters wide, the distances required do not apply [Art. 672, CC].

Exception: The distances may be stipulated by the parties, provided that the
distance should not be less than what is prescribed by the law (2 meters and
60 centimeters). [Art. 673, CC]

Whenever by any title a right has been acquired to have direct views,
balconies or 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. [Art. 673, CC]

Note: Breach of the required distances results into the prescriptive period not
running. [Art. 670, CC]

Notes on the Acquisition of the Easement

• Period of acquisitive prescription depends upon whether the easement of

light and view is positive or negative.

o If positive, then the prescription period is counted from the day the
window is opened.
o If negative, then the prescription period is counted from the formal
prohibition made on the owner of the servient estate. [Art. 668, CC]

5. DRAINAGE OF BUILDINGS [Art. 674, CC]

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.

273
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. [Art. 674, CC]

The true easement is where the adjacent estate has the obligation of
receiving the rainwater falling from a neighboring roof and giving it an
outlet on his own lot so as not to cause damage to the dominant estate. [Art.
675, CC]

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. [Art. 676, CC]

Note: When is there a violation of easement of drainage? Refer to

Purugganan v. Paredes, 69 SCRA 69: When the roof of the appellants
protrudes by 98 centimeters over the property of the appellee, so that during
a heavy rainfall, the propulsion of the water would go as far as one meter
over the property of the latter. Also check on Sec. 8.01.05 (d) (1) of the
National Building Code.

6. INTERMEDIATE DISTANCES [Arts. 677-681, CC]

Prohibiting the construction and plantings near fortified places or fortresses

without complying with special laws, ordinances and regulations relative
hereto, Art. 677 of the Civil Code, in effect, establishes an easement in favor
of the State. The general prohibition is dictated by the demands of national
security.

No person shall build any aqueduct, well, sewer, furnace, forge, chimney,

274
stable, depository of corrosive substances, machinery, or factory 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.

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. [Art. 678, CC]

Note: For definition of dangerous buildings, please refer to Sec. 1.01.08 (b),
R.A. 6541, The National Building Code. Cases applicable are De la Torre v.
Bicol University, 468 SCRA 542 and Tague v. Fernandez, 51 SCRA 181.

Planting of trees [Art. 679, CC]

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. In the absence thereof:

• At least 2 meters from the dividing line of the estates if tall trees are
planted.

• At least 50 centimeters if shrubs or small trees are planted.

In case of a violation, a landowner shall have the right to demand the

uprooting of the plant even if it has grown spontaneously.

Branches, Roots and Fruits [Art. 680, CC]

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. If it be the roots of a neighboring tree, which

275
should penetrate into the land of another, the latter may cut them off himself
within his property.

Fruits naturally falling upon adjacent land belong to the owner of said land.
[Art. 681, CC]

7. LATERAL AND SUBJACENT SUPPORT [Arts. 684-687, CC]

The proprietor is prohibited from making dangerous excavations upon his

land as to deprive any adjacent land or building of sufficient lateral or
subjacent support. [Art. 684, CC]

Any stipulation or testamentary provision allowing excavations that cause

danger to an adjacent land or building shall be void. [Art. 685, CC]

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. 686, CC]

• Easement of lateral and subjacent support is deemed essential to the

stability of buildings.

• Lateral: When a vertical plane divides the supported and supporting lands.

• Subjacent: When the supported land is above the supporting land.

Any proprietor intending to make any excavation contemplated in Arts. 684-

686, CC shall notify all owners of adjacent lands. [Art. 687, CC]

Note: Refer to Castro v. Monsod, 641 SCRA 486 (2011) on the need to
annotate an easement of lateral support at the back of the land title of the
servient estate where there is judicial recognition existing.

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8. EASEMENT AGAINST NUISANCE [Arts. 682-683, CC]

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. 682,
CC].

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. [Art. 683, CC]

3. Modes of acquiring easements

An easement is either acquired through a title/juridical act or by prescription.
[Art. 620 and 622, CC]

Kind of Easement How acquired Title How acquired

Prescription
Continuous and YES YES
apparent (CA)
Continuous Non- YES NO
apparent (CNA)
Discontinuous and non- YES NO
apparent (DA)
Discontinuous Non- YES NO
apparent (DNA)

When an easement is established, all rights necessary for its use are
considered granted. [Art. 625, CC]

a. By Title (or by Something Equivalent to a Title)

Something Equivalent to a Title: Refers to law or juridical acts such as

donations, contracts, or wills.
• Continuous and apparent easements may be acquired by virtue of a title.
[Art. 620, CC]
• Continuous non-apparent easements, and discontinuous ones, whether
apparent or not, are acquired only by virtue of a title. [Art. 622, CC]
• 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. [Art.
623, CC]

277
Deed of recognition: By an affidavit or a formal deed acknowledging the
servitude.

Final judgment: Owner of the dominant estate must file a case in court to
have the easement declared by proving its existence through other evidence.

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. This is also applicable to cases of co-ownership. [Art.
624, CC]

Exception: At the time the ownership of the two estates is divided, the title
of conveyance of either of the two estates provides for the contrary (says the
easement will not continue) or the apparent sign of easement is removed
before the execution of the deed of conveyance. [Art. 624, CC]

Illustration: The presence of 4 windows was considered an apparent sign

that created a negative easement of light and view (altius non tollendi) i.e.
not to build a structure that will cover the windows. [Amor v. Florentino,
G.R. No. L-48384 (1943)].

b. By Law (Legal Easements)

Easements imposed by law have for their object either public use or the
interest of private persons. [Art. 634, CC]

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. [Art. 636, CC]

c. By Will of the Owner (Voluntary Easements)

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. [Art. 688, CC]

Note: If an owner constitutes an easement over his own property and makes
such easement available to the general public, said owner may not arbitrarily
discriminate against certain persons by not letting them use the easement.
[Negros Sugar Company v Hidalgo, G.R. No. L-42334 (1936)]

When the property subject of the easement is also in usufruct, the owner of
the property may establish an easement on the property, without consent of
the usufructuary; provided, the right of the usufructuary is not injured. [Art.
689, CC]

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Whenever the naked ownership belongs to one person and the beneficial
ownership to another, no perpetual voluntary easement may be established
thereon without the consent of both owners. [Art. 690, CC]

When the property is co-owned, consent of all co-owners is required to

impose an easement. [Art. 691, CC]

d. By Prescription

Continuous and apparent easements may be acquired by prescription of 10

years. [Art. 620, CC]

Requisites:
1. The easement must be continuous and apparent;
2. The easement must have been used for 10 years; and
3. There is no need for good faith or just title.

Computation of time of possession [Art. 621, CC]

1. 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
2. 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.

Note: Example of a continuous and apparent easement is of light and view,

as opposed to a right of way which is discontinuous but apparent, and thus
cannot be acquired by prescription.

Mere passage which was permitted and is under an implied license cannot be
the basis of prescription. [Archbishop of Manila v. Roxas, G.R. No. L-7386
(1912)]

4. Rights and obligations of the owners of the dominant and servient estates
a. Rights of Dominant Estate Owner
1. To use the easement and exercise all rights necessary for it [Art. 625, CC].
2. The owner of the dominant estate is granted the right to use the principal
easement, and all accessory servitudes.

Example: Easement of drawing water carries with it the easement of right of

way to the place where water is drawn.

Limitation: Only for the original immovable and the original purpose.

3. To make, at his own expense, on the servient estate, any works necessary
for the use and preservation of the servitude, but without altering it or
rendering it more burdensome. [Art. 627(1), CC]

279
4. In a right of way, to ask for change in width of easement sufficient for the
needs of the dominant estate. [Art. 651, CC]

The needs of the dominant property ultimately determine the width of the
passage. And these needs may vary from time to time. [Encarnacion v. CA,
G.R. No. 77628 (1991)]

5. To renounce totally the easement, if he desires to be exempt from

contributing to the expenses. [Art. 628, CC]

b. Obligations of Dominant Estate Owner

1. To use the easement for the benefit of immovable and in the manner
originally established [Art. 626, CC]

If established for a particular purpose, the easement cannot be used for a

different one. However, if established in a general way, without specific
purpose, the easement can be used for all the needs of the dominant estate.

2. To notify the owner of the servient estate before making repairs and to
make repairs in a manner least inconvenient to the servient estate [Art.
627(2), CC]
3. Not to alter the easement or render it more burdensome. [Art. 627, CC]

In an easement of a right of way, widening the road means making the

easement more burdensome. [Valderrama v. North Negros Sugar Co., G.R.
No. L-23810 (1925)]

4. To contribute to expenses of works necessary for use and preservation of

servitude, if there are several dominant estates. [Art. 628, CC]

The contribution is in proportion to the benefits which each may derive from
the work.

c. Rights of the Servient Estate Owner

1. To retain the ownership of the portion of the estate on which the easement
is established [Art. 630, CC]

2. To use the easement, provided he shall also be obliged to pay the

expenses necessary for the preservation and use of the servitude. [par. 2, Art.
628, CC]

Exception to paying expenses: There is an agreement to the contrary.

3. To change the place or manner of the use of the easement, provided it be

equally convenient [par. 2, Art. 629, CC]

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In case the easement becomes very inconvenient for the servient estate
owner, or if it prevents him from making any important works, repairs, or
improvements, the easement MAY BE CHANGED, provided:
1. He offers another place/manner equally convenient.
2. Does not cause injury to the dominant estate owner.
3. Does not cause injury to those who have a right to use the easement, if
any.

d. Obligations of Servient Estate Owner

1. Not to impair the use of the easement [Art. 629(1), CC]

2. To contribute proportionately to expenses if he uses the easement [Art.
628(2), CC]
Exception: Unless there is an agreement to the contrary.
3. To pay for the expenses incurred for the change of location or form of the
easement

5. Modes of extinguishment
Ways by which an easement may be extinguished: [Art. 631, CC]
[MINERRO – Merger, Impossibility, Non-use, Expiration, Renunciation,
Redemption, Other causes]

1. By merger in the same person of the ownership of the dominant and

servient estates – must be absolute, perfect and definite, and not merely
temporary. If the merger is temporary, there is at most a suspension of the
easement, but no extinguishment.
2. By non-user for ten years – there is inaction, and not outright
renunciation. This is due to the voluntary abstention by the dominant owner,
and not due to a fortuitous event.
• If discontinuous easement, period is counted from day it ceased to be used.
If continuous easement, counted from the day an act adverse to the exercise
of the right of easement took place.
• Note use by a co-owner bars prescription as to others as well. [Art. 633,
CC]
3. Impossibility of use – impossibility referred to must render the entire
easement unusable for all time.
Impossibility of using the easement due to the condition of the tenements
(e.g. flooding) only suspends the servitude until it can be used again.
• Exception: If the suspension exceeds 10 years, the easement is deemed
extinguished by non-use.

4. By the expiration of the term or the fulfillment of the resolutory

condition - applies only to voluntary easements.

5. By the renunciation of the owner of the dominant estate – must be

specific, clear, express (distinguished from non-user); or

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6. By the redemption agreed upon between the owners of the dominant
and servient estates.

Other Causes Not Mentioned in Art. 631, CC

1. Annulment and rescission of the title constituting the
voluntary easement;
2. Termination of the right of grantor of the voluntary
easement;
3. Abandonment of the servient estate; Owner of the servient
estate gives up ownership of the easement (e.g. the strip of land
where the right of way is constituted) in favor of the dominant
estate. The easement is extinguished because ownership is
transferred to the dominant owner, who now owns both
properties.
4. Eminent domain; The government’s power to expropriate
property for public use, subject to the payment of just
compensation.
5. Special cause for extinction of legal rights of way: if right of
way no longer necessary. [Art. 655, CC]

Right of way ceases to be necessary [Art. 655, CC]:

• Owner of the dominant estate has joined to another abutting on a
public road.
• A new road is opened giving access to the isolated estate.
• Owner of the servient estate must return indemnity he received (value
of the land) with interest deemed as rent.
• Requisite: the public highway must substantially meet the needs of
the dominant estate.

Note: The Owner of the servient estate burdened by the right of way may
demand that the easement be extinguished when it is shown that the
easement ceases to be necessary [Art. 655, CC]

I. NUISANCE
1. Nuisance per se

2. Nuisance per accidens

“Nuisances have been divided into two classes: Nuisances per se, and
nuisances per accidens” [Iloilo Cold Storage v. Municipal Council, 24 Phil
471]

Definition
A nuisance is any act, omission, establishment, condition of property, or
anything else which:
(1) Injures or endangers the health or safety of others; or others (Ex. House

282
in danger of falling, fireworks or explosives factory, houses without building
permits and without provisions for disposal of waste matter [Ayala v.
Baretto, 33 Phil. 538]); or
(2) Annoys or offends the senses; (Ex. leather factory, garbage cans,
pumping station with a high chimney, smoke, noise [Bengzon v. Prov. Of
Pangasinan, 62 Phil. 816]; or
(3) Shocks, defies, or disregards decency or morality; (Ex. Movie actress
strips nude in the lobby of a movie house for sake of publicity for a movie,
citing Paras, p. 748); or
(4) Obstructs or interferes with the free passage of any public highway or
street, or any body of water; (Ex. Houses or flea market stalls constructed in
public streets); or
(5) Hinders or impairs the use of property [Art. 694, CC] (Ex. Illegal
constructions or activities on another person or entity’s land).

Differentiate Nuisance from Negligence:

Negligence is penalized because of lack of proper care but a nuisance is
wrong not because of the presence or absence of care, but because of the
injury caused. [Paras quoting 39 AmJur 282]

Nuisance Nuisance per se Nuisance per accidens

Definition ● Those which are ● Those that are nuisances
unquestionably and under because of particular facts and
all circumstances circumstances surrounding the
nuisances, such as otherwise harmless cause of
gambling houses, houses the nuisance [Iloilo Cold
of ill fame, etc. [Iloilo Storage v. Municipal Council,
Cold Storage v. 24 Phil 471]
Municipal Council, 24 ● Generally a question of fact,
Phil 471] to be determined in the first
● Generally defined as an instance before the term
act, occupation, or nuisance can be applied to it.
structure, which is a [Ibid.]
nuisance at all times and ● That which depends upon
under any circumstances, certain conditions and
regardless of location or circumstances, and its
surrounding. [Aquino v. existence being a question of
Municipality of Malay, fact, it cannot be abated
GR 211356, 29 without due hearing thereon in
September 2014] a tribunal authorized to decide
whether such a thing does in
law constitute a nuisance.
[Aquino v. Municipality of
Malay, GR 211356, 29
September 2014]
Abatement Since they affect the No authority has the right to

283
 immediate safety of compel the abatement of a
persons and property, particular thing or act as a
they may be summarily nuisance without reasonable
abated under the notice to the person alleged to
undefined law of be maintaining or doing the
necessity. [Monteverde v. same of the time and place of
Generoso, 52 Phil 123] hearing before a tribunal
authorized to decide whether
such a thing or act does in law
constitute a nuisance.
[Monteverde v. Generoso, 52
Phil 123]

a. Public v. Private Nuisance

Public Nuisance
Nuisance that affects a community or neighborhood or any considerable
number of persons [Art. 695, CC]. (Ex. A noisy or dangerous factory in a
residential district; a karaoke bar inside a subdivision)

Private Nuisance
One that is not included in the foregoing (Public nuisance) definition. [Art.
695, CC]

One which violates only private rights and produces damages to but one or a
few specific persons.

b. Doctrine of Attractive Nuisance

One who maintains on his premises dangerous instrumentalities or
appliances of a character likely to attract children at 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. [Jarco Marketing
Corp. v. CA, G.R. No. 129792 (1999)]

Reason for doctrine: Although the danger is apparent to those of age, it is

so enticing or alluring to children of tender years as to induce them to
approach [Ibid].

Note: The attractive nuisance doctrine is generally not applicable to bodies

of water in the absence of some unusual condition or artificial feature. A
swimming pool is not an attractive nuisance, for while it is attractive, it is
merely a duplication of a work of nature [Hidalgo Enterprises v. Balandan,
G.R. L-3422, (1952)]

3. Liabilities
a. Who are Liable

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1. Person responsible for creating the nuisance; If the prejudice exceeds the
inconveniences that such proximity habitually brings, the neighbor who
causes such disturbance is held responsible for the resulting damage, 1 being
guilty of causing nuisance. [Velasco v. Manila Electric Co., 40 SCRA 342]
2. 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. 696, CC];
• Provided that he knew of the nuisance and must knowingly fail or
refuse to abate the nuisance [Lambs v. Roberts, 196 Ala. 679, quoted
by Paras].
• “To render the new owner or possessor liable, it is necessary that he
has actual knowledge of the existence of the nuisance, and that it is
within his power to abate the same.”
• “If he cannot physically abate the nuisance without legal action
against another person, then he shall not be liable for such nuisance.”
3. A private person or public official shall be liable for damages if:
a. In an extrajudicial abatement;
b. He causes unnecessary injury; or
c. An alleged nuisance is later declared by the courts to be not a real
nuisance. [Art. 707, CC]

4. No prescription
a. General Rule
Lapse of time cannot legalize any nuisance, whether public or private. [Art.
698, CC]

Note: Art. 698 and 1143(2) does not apply to easements which are
extinguished by obstruction or non-use for ten years under Art. 631
[Ongsiako v. Ongsiako, G.R. No. L-7510, (1957)]

The abatement of a nuisance does not preclude the right of any person
injured to recover damages for its past existence. [Art. 697, CC]

Note: Remedies of abatement and damages are cumulative and may both be
demanded.

b. Extinctive Prescription – No Extinctive Prescription to abate a nuisance

or Acquisitive Prescription for the right to use of the property that creates
such nuisance. The action to abate a public or private nuisance is NOT
extinguished by prescription. [Art. 1143(2), CC]

5. Criminal prosecution
The remedies against a public nuisance are:
1. A prosecution under the Penal Code or any local ordinance; or
2. A Civil Action; or

285
3. Abatement, without judicial proceedings. [Art. 699, CC]

6. Judgment with abatement

The remedies against a public nuisance are:
1. A prosecution under the Penal Code or any local ordinance; or
2. A Civil Action; or
3. Abatement, without judicial proceedings. [Art. 699, CC]

If a civil action is brought by reason of the maintenance of a public nuisance,

such action shall be commenced by the city or municipal mayor. [Art. 701, CC]

7. Extrajudicial abatement
The remedies against a public nuisance are:
1. A prosecution under the Penal Code or any local ordinance; or
2. A Civil Action; or
3. Abatement, without judicial proceedings. [Art. 699, CC]
• It must be reasonably and efficiently exercised.
• Means employed must not be unduly oppressive on individuals.
• No more injury must be done to the property or rights of individuals
than is necessary to accomplish the abatement.
• No right to compensation if property taken or destroyed is a nuisance.

a. Summary Abatement

Nuisances per se
Since they affect the immediate safety of persons and property, they may be
summarily abated under the undefined law of necessity. [Monteverde v.
Generoso, 52 Phil 123]

Nuisances per accidens

No authority has the right to compel the abatement of a particular thing or
act as a nuisance without reasonable notice to the person alleged to be
maintaining or doing the same of the time and place of hearing before a
tribunal authorized to decide whether such a thing or act does in law
constitute a nuisance. [Monteverde v. Generoso, 52 Phil 123]

If no compelling necessity requires the summary abatement of a nuisance,

the municipal authorities, under their power to declare and abate nuisances,
do not have the right to compel the abatement of a particular thing or act as a
nuisance without reasonable notice to the person alleged to be
maintaining or doing the same of the time and place of hearing before a
tribunal authorized to decide whether such a thing or act does in law
constitute a nuisance. [Iloilo Cold Storage v. Municipal Council, 24 Phil
471]

b. Need for Abatement

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One of the most serious hindrances to the enjoyment of life and property is a
nuisance. Provisions for its abatement are indispensable (Report of the Code
Commission, p.51).

c. Who May Abate Public Nuisances District Officer

The district health officer shall take care that one or all of the remedies
against a public nuisance are availed of. [Art. 700, CC]

The district health officer shall determine whether or not abatement, without
judicial proceedings, is the best remedy against a public nuisance. [Art. 702,
CC]

Note: If the district health officer or the city engineer is not consulted
beforehand in the case of extrajudicial abatement, the person doing the
abating is not necessarily liable. They would be liable for damages under
Art.
707 if the abatement is carried out with unnecessary injury, or if the alleged
nuisance is later declared by the courts to be not a real nuisance [Paras, p.
756]

Private Persons
Any private person may abate a public nuisance which is specially injurious
to him by removing or, if necessary, destroying the thing which constitutes
the same, without committing a breach of the peace, or doing necessary
injury.

Other persons authorized by law

Other persons may be authorized by law to remove nuisances such as in
Sitchon v. Aquino, 98 Phil 458 where the Manila charter authorized the City
Engineer to do so.

8. Special injury to individual

A private person may file an action on account of public nuisance, if it is
specially injurious to himself. [Art. 703, CC]

Any private person may abate a public nuisance which is specially injurious to
him by removing or, if necessary, destroying the thing which constitutes the
same, without committing a breach of the peace, or doing necessary injury. But
if necessary:
1. That demand be first made upon the owner or possessor of the property to
abate the nuisance;
2. That demand has been rejected;
3. That the abatement be approved by the district health officer and executed
with the assistance of the local police; and
4. That the value of the destruction does not exceed Three-Thousand Pesos.
[Art. 704, CC]

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9. Right of individual to abate a public nuisance
Process for Extrajudicial Abatement:
1. The district health officer shall take care that one or all of the remedies
against a public nuisance are availed of. [Art. 700, CC]
2. The district health officer shall determine whether or not abatement,
without judicial proceedings, is the best remedy against a public nuisance.
[Art. 702, CC]

Process for Judicial Abatement (through Civil Action):

1. General Rule: If a civil action is brought by reason of the maintenance of
a public nuisance, such action shall be commenced by the city or municipal
mayor. [Art. 701, CC]
2. Exception: A private person may file an action on account of a public
nuisance if it is especially injurious to him. [Art. 703, CC]

Rationale for Exception: An individual who has suffered some special

damage different from that sustained by the general public may maintain a
suit in equity for an injunction to abate it, or an action for damages which he
has sustained. The action becomes a tort if an individual has suffered
particular harm, in which case the nuisance is treated as a private nuisance
with respect to such person.

Requisites of the right of a private individual to bring a civil action to

abate a public nuisance [Art. 704, CC]
1. That demand be first made upon the owner or possessor of the
property to abate the nuisance;
2. That such demand has been rejected;
3. That the abatement be approved by the district health officer
and executed with the assistance of the local police; and
4. That the value of the destruction does not exceed P3,000.

Rules
1. The right must be exercised only in cases of urgent or extreme
necessity. The thing alleged to be a nuisance must be existing at
the time that it was alleged to be a nuisance.
2. A summary abatement must be resorted to within a reasonable
time after knowledge of the nuisance is acquired or should have
been acquired by the person entitled to abate.
3. The person who has the right to abate must give reasonable
notice of his intention to do so, and allow thereafter a
reasonable time to enable the other to abate the nuisance
himself.
4. The means employed must be reasonable and for any
unnecessary damage or force, the actor will be liable. The right
to abate is not greater than the necessity of the case and is

288
 limited to the removal of only so much of the objectionable
thing as actually causes the nuisance.
5. The property must not be destroyed unless it is absolutely
necessary to do so.

10. Right to damages

The abatement of a nuisance does not preclude the right of any person
injured to recover damages for its past existence. [Art. 697, CC]

Abatement and damages are cumulative remedies.

11. Defenses to action

Remedies of the property owner
A person whose property is seized or destroyed as a nuisance may resort to
the courts to determine whether or not it was in fact a nuisance.
1. An action for replevin;
2. To enjoin the sale or destruction of the property;
3. An action for the proceeds of its sale and damages if it has been sold; or
4. To enjoin private parties from proceeding to abate a supposed nuisance.

12. Who may sue on private nuisance

Remedies [Art. 705, CC]
The remedies against a private nuisance are:
1. A civil action; or
2. Extrajudicial abatement

Requisites for a valid extrajudicial

abatement [Art. 706, CC]:
• The procedure for extrajudicial abatement of a public nuisance by a private
person will also be followed.

Note: See municipal health officer under Art. 700 and Art. 702.
• No breach of peace or unnecessary injury

Liability for invalid extrajudicial abatement:

The person (whether private person or public official) extrajudicially abating
a nuisance is liable for damages if:
a. If he causes unnecessary injury; or
b. If an alleged nuisance is later declared by the courts to be not a real
nuisance.

Methods of abatement [Art. 706, CC]:

1. By removing the thing causing the nuisance
2. By destroying the thing causing the nuisance

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J. MODES OF ACQUIRING OWNERSHIP
Three modes of acquiring ownership:
a. Occupation – Arts. 713-720, CC
b. Donation – Arts. 712, 725 – 726, CC
c. Prescription and Laches – Arts. 712, 1106 – 1107, CC

1. Occupation
How Occupation Effected
1. Hunting and Fishing
2. Finding Hidden Treasures
3. Finding of abandoned movables
4. Finding movables which never had an owner [Art. 713, CC]

Kinds of Occupation
1. Of Animals
a. Wild or Feral Animals
Wild animals are possessed only while they are under one’s control [Art.
560, CC]

b. Tamed/domesticated animals
Domesticated or tamed animals are considered domestic or tame if they
retain the habit of returning to the premises of the possessor. [Art. 560, CC]

The owner of domesticated animals may also claim them within 20 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. [Art. 716,
CC]

c. Occupation of a Swarm of Bees

The owner of a swarm of bees shall have the right to pursue them to
another’s land, indemnifying the possessor of the latter for damage.

If the owner has not pursued the swarm, or ceases to do so within 2

consecutive days, the possessor of the land may occupy or retain the same,
the owner having lost his ownership by leaving, abandoned them (no
intention to recover). [Art. 716, CC]

d. Pigeons and Fish

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.

2. Of Other Personal Property

a. Abandoned – may be acquired
b. Lost
Whoever finds a movable, which is not treasured, must return it to its
previous possessor. If the latter is unknown, the finder shall immediately

290
deposit it with the mayor of the city or municipality where the finding has
taken place.

The finding shall be publicily 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 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. [Art. 719, CC]

3. Of Land
• Land cannot be the object of occupation. [Art. 714, CC]
• Land of public dominion belongs to the State.
• Abandoned private lands are deemed as patrimonial property of the State

4. Hidden Treasure
Definition: Any hidden and unknown deposit of money, jewelry, or other
precious objects, the lawful ownership of which does not appear. [Art. 439,
CC]

General Rule: Belongs to the owner of the land, building, or other property
on which it is found. [Art. 438, CC]

Exceptions
1. If discovery made on property of another, the State, or any of its
subdivisions AND by chance: one-half shall be allowed to the finder
2. If finder is a trespasser: he shall not be entitled to any share of the
treasure
3. If the things found be of interest to science or the arts: State may
acquire them at their just price, which shall be divided in conformity with
rule stated [Art. 438 (3), CC]

2. Donation
Donation is an act of liberality whereby a person disposes gratuitously of a
thing or right in favor of another, who accepts it. (simple donation) [Art.
725, CC]

Although under Art. 725, CC, donation is an act, it is really a contract.

The essential requisites of consent, subject matter, and cause must be
present. [Tolentino]
Nature Generally, donation includes all forms of gratuitous
dispositions.

291
Effect The patrimony or asset of the donor is decreased, while
that of the donee is increased.
Requisites [CADAF – Capacity, Animus donandi, Delivery,
Acceptance, Form]

a. Capacity of donor to make donation

b. Donative intent (animus donandi)
c. Delivery (actual or constructive)
d. Acceptance by donee
e. Necessary form prescribed by law

Note: Acceptance by the donee is required because

donation is never obligatory. One cannot be compelled to
accept the generosity of another.
Other a. When a person gives to another a thing or right on
instances account of the latter's merits or of the services rendered by
considered him to the donor, provided they do not constitute a
as a demandable debt. (Remuneratory donation) [Art. 726, CC]
donation b. When the gift imposes upon the donee a burden that is
less than the value of the thing given. (Onerous donation)
[Art. 726, CC]
Kinds of As to its taking Donation Inter Vivos [Art. 729-731, CC]
Donations effect Donation which shall take effect during
the lifetime of the donor upon
concurrence of the requirements of
donation, though the property shall not
be delivered until after the donor's death.
General Rule: Irrevocable
Exceptions:
a. Subsequent birth of the donor’s
children [Art. 760, CC];
b. Donor’s failure to comply with
imposed conditions [Art. 764, CC];
c. Donee’s ingratitude [Art. 765, CC]; or
d. Reduction of donation by reason of
inofficiousness [Art. 752, CC].
Donation Propter Nuptias [Art. 82, FC]
A special type of donation made by
reason of marriage.

Requisites:
a. Must be made before the celebration
of marriage;
b. Made in consideration of the
marriage; and
c. Made in favor of one or both of the

292
 future spouses.

Causes for revocation of donation

propter nuptias [Art. 86, FC]:
a. If the marriage is not celebrated or
judicially declared void ab initio, except
donations made in the marriage
settlements, which shall be governed by
Article 81;
b. When the marriage takes place
without the consent of the parents or
guardian, as required by law;
c. When the marriage is annulled, and
the donee acted in bad faith;
d. Upon legal separation, the one being
the guilty spouse;
e. If it is with a resolutory condition and
the condition is complied with; or

When the donee has committed an act of

ingratitude as specified by the
provisions of the CC on donations in
general.
Donation Mortis Causa [Art. 728, CC]
It only becomes effective upon the death
of the donor, as the donor’s death ahead
of the donee works as a suspensive
condition for the existence of the
donation.

Characteristics:
a. The transferor retains ownership and
control of the property while alive;
b. The transfer is revocable at will
before his death; and The transfer will
be VOID if the transferor should survive
the transferee.
As to cause a. Simple - made out of pure liberality or
Or because of the merits of the donee.
consideration b. Remuneratory - made for services
already rendered to the donor.
c. Onerous - imposes a burden inferior
in value to property donated.
d. Improper - burden equal in value to
property donated.
e. Sub-modo or modal - imposes a

293
 prestation upon donee as to how
property donated will be applied. Mixed
donations – e.g. sale for price lower than
value of property. [Labitag Syllabus]

Ordinary Propter Nuptias

As to requirement of express acceptance
Necessary [Art. 745-747, CC] Not necessary. Implied acceptance
is enough.
As to future property
Cannot include future property [Art. May include future property (same
751, CC] rule as wills) [Art. 84, FC]
As to limit on donation of present property
No limit to donation of present If present property is donated and
property provided legitimes are not property regime is other than ACP,
impaired. [Art. 750 and 752, CC] limited to 1/5. [Art. 84, FC]
As to grounds for revocation
Enumerated in Arts. 760, 764, and Enumerated in Art. 86, FC
765, CC

Inter vivos Mortis causa

As to formalities
Executed and accepted with Must be in the form of a will, with
formalities prescribed by CC. [Art. all the formalities
748 and 749] for the validity of wills. [Art. 728,
CC]
As to effectivity
Effective during the lifetime of the Effective after the death of the
donor. It takes effect independently donor. [Art. 728, CC]
of the donor’s death. [Art. 729, CC]
As to acceptance
Acceptance must be made during Acceptance must be made after the
the lifetime of the donor. [Art. 746, death of the donor, the donation
CC] being effective only after the death
of donor. Acceptance during the
donor’s lifetime is premature and
ineffective because there can be no
contract regarding future
inheritance. [Art. 728, CC]
As to transfer of ownership for right of disposition
Ownership is immediately Upon acceptance by the donee, but
transferred. the effect of such retroacts to the
Delivery of possession is allowed time of death of the donor.

294
after death.
As to revocation
Irrevocable – may be revoked for Revocable upon the exclusive will
the reasons provided in Arts. 760, of the donor. [Ganuelas v. Cawed,
764, 765, CC. G.R. No. 123968 (2003]
As to reduction or suppression
When it is excessive or inofficious When it is excessive or inofficious,
[Art. 750, CC] or for any of the it is reduced first, or even
reasons provided for in Art. 760, suppressed.
CC. Being preferred, it is reduced
only after the donations mortis causa
had been reduced or exhausted.
As to effect if donor survives done
Not affected. Donation is void. [Maglasang v.
Heirs of Cabatingan, G.R. 131953
(2002)]

FORMALITIES REQUIRED
FOR MOVABLES [Art. 748, CC] FOR IMMOVABLES [Art. 749,
CC]
The donation of a movable may be General Rule: Must be in a public
made orally or in writing. Oral document for it to be valid.
donation requires simultaneous
delivery.
If value of property exceeds P5,000: If donation and acceptance are in
a. Donation and acceptance must be the same instrument:
in writing; otherwise, it is void. a. It must be in a public instrument.
b. It need not be in public b. Instrument must specify the
instrument; neither is it necessary property donated and the value of
that the acceptance be in the same the charges.
instrument as the deed of donation.
[Tolentino] If donation and acceptance are in
separate instruments:
If value is P5,000 or less: a. It must be in a public instrument.
a. If orally: there must be b. Instrument must specify the
simultaneous delivery property and the value of the
b. If in writing: donation is valid charges.
even without simultaneous delivery c. Acceptance must also be in a
c. In every case, acceptance must be public instrument.
made known to the donor for d. It must be made during the
perfection of a donation to take lifetime of the donor. [Art. 746, CC]
place. [Art. 746, CC] e. Donor must be notified in
authentic form of such acceptance
made in a separate instrument.
f. Fact of such notification must be

295
 noted in both instruments.

Exceptions:
a. Donations propter nuptias: need
no express acceptance.
b. Onerous donations: governed by
rules on contracts.

Notes:
a. Donation of real property in a
private instrument is null and void.
b. Registration is not necessary for
the donation to be considered valid
and effective. This only comes into
play with respect to affected third
persons.
c. There is nothing that prevents the
donor or his heirs to execute a
public document ratifying a
previous donation that has been
avoided for lack of compliance with
the legal requisites. This ratification
had the effect of a new donation
[Abragan v. Centenera, G.R. No.
22173, (1924)].
d. Action to declare the inexistence
of a void donation does not
prescribe [Art. 1410, CC].

What may be donated

All present property of the donor or part thereof. [Art. 750, CC]
Limitation:
a. The donor reserves, in full ownership or usufruct, sufficient means for
support of himself and all relatives entitled to be supported by donor at the
time of acceptance. [Art. 750, CC]
b. The donor reserves property sufficient to pay donor’s debts contracted
before donation, otherwise, donation is in fraud of creditors. [Arts. 759,
1387, CC]
c. Donations provided for in marriage settlements between future spouses
– must be not more than 1/5 of present property. [Art. 84, FC]
d. Donation propter nuptias by an ascendant consisting of jewelry,
furniture or clothing not to exceed 1/10 of disposable portion. [Art. 1070,
CC]
What may not be donated
a. Future property; those which the donor cannot dispose of at the time of

296
the donation [Art. 751, CC]
b. More than what he may give or receive by will [Art. 752, CC]. If it
exceeds what he may give or receive by will, then it is considered
inofficious.
Limitations
a. Reservation of sufficient means for support of donor and relatives
[Art. 750, CC]
1. A donor may donate his present property provided he reserves sufficient
property in ownership or in usufruct for the support of himself and all of
his relatives who are entitled to be supported by him.
2. Present property: property which the donor can rightfully dispose of at
the time of donation.
3. Donation without reservation is not null and void in its entirety; it is
only subject to reduction by the court.
4. Limitation applies to simple, remunerative and modal donations but not
to onerous ones nor to donations mortis causa.
b. Donations cannot comprehend future property [Art. 751, CC]
1. Future property: understood as anything which the donor cannot
dispose of at the time of the donation.
2. Nobody can dispose of that which does not belong to him.
3. Future inheritance cannot be donated because it is considered future
property. However, upon the death of his predecessor, the inheritance
ceases to be future and consequently, may be the object of donation.
[Osorio v Osorio, supra]
c. Amount of donation limited to what donor may give by will [Art.
752, CC]
1. A person may not donate more than he can give by will.
2. Limitation applies where donor has forced or compulsory heirs.
Donations made to several persons jointly
A joint donation (donation to two or more persons) could not be accepted
by a donee independently of the other donee/s. [Genato v. de Lorenzo,
G.R. No. L-24983 (1968)]

No accretion – one donee does not get the share of the other donees who
did not accept. [Art. 753, CC]

Exception: those given to husband and wife, except when the donor
otherwise provides. [Art. 753, CC]
Donor
Who are allowed: All persons who may contract (of legal age) and
dispose of their property. [Art. 735, CC]

Donor’s capacity is determined at the time of the making of donation [Art.

737, CC] Subsequent incapacity is immaterial.

Note: Capacity to donate is NOT required for donations mortis causa.

297
[Tolentino]

Who are NOT allowed:

a. Guardians and trustees with respect to the property entrusted to them.
[Art. 736, CC]
b. Those disqualified by reason of public policy: [Art. 739, CC]
c. Those made between persons guilty of adultery or concubinage at the
time of the donation;
d. Those made between persons guilty of the same criminal offense if the
donation is made in consideration thereof; or
e. Those made to a public officer, his spouse, descendants, and/or
ascendants by reason of the office.
Donee
Who are allowed to accept donations:
a. Those who are not specifically disqualified by law. [Art. 738, CC]
b. Those who are allowed, with qualifications:
1. Minors, insane/imbecile, deaf-mute and others who are incapacitated
[see Art. 38, CC], provided that their acceptance is done through their
parents or legal representatives. [Art. 741, CC]
2. Conceived and unborn children, provided that the donation is accepted
by those who would legally represent them if they were already born. [Art.
742, CC]

Who are not allowed:

a. Made between persons who are guilty of adultery or concubinage. [Art.
739, CC]
b. Made between persons found guilty of the same criminal offense, in
consideration thereof. [Art. 739, CC]
c. Made to a public officer or his wife, descendant and ascendants, by
reason of his office. [Art. 739, CC]
d. Those who cannot succeed by will. [Art. 740, CC] – covers those stated
under Arts. 1027 and 1032, CC.
e. Those made to incapacitated persons, although simulated under the
guise of another contract. [Art. 743, CC]
Acceptance of the donation
Who may accept: [Art. 745, CC]
a. Donee personally; or
b. Authorized person with a special power for the purpose, or with a
general sufficient power.

When to accept: During the lifetime of the donor and of the donee. [Art.
746, CC]
What the donee acquires with the
thing
He shall be subrogated to all the rights and actions that would pertain to
the donor in case of eviction. [Art. 754, CC]

298
 Obligation of the donor
No obligation to warrant. [Art. 754, CC]

Exceptions:
a. When the donation is onerous. [Art. 754, CC] In which case, the donor
shall be liable for eviction to the concurrence of the burden; and
b. Liable for eviction or hidden defects in case of bad faith on the donor’s
part.
Obligation of the done
If the donation so states, the donee may be obliged to pay the only debts
previously contracted by the donor and in no case shall he be responsible
for the debts exceeding the value of the thing donated. [Art. 758, CC]
Exception: When a contrary intention clearly appears. [Art. 758, CC]

SPECIAL PROVISIONS
What may be reserved by the donor [Art. 755, CC]
The right to dispose of some of the things donated, or of some amount
which shall be a charge thereon.
Exception: If the donor dies without exercising this right. In which case,
the property or amount reserved shall belong to the done.
Donation of naked ownership to one donee and usufruct to another
[Art. 756, CC]
The naked ownership and the usufruct may be donated separately,
provided that all the donees are living at the time of the donation.
Payment of donor’s debt [Art. 758, CC]
a. If expressly stipulated, the donee must pay only the debts contracted
before the donation unless specified otherwise.
But in no case shall the donee be responsible for debts exceeding the
value of the property donated unless clearly intended.
b. If there’s no stipulation, the donee will be answerable only for the
donor’s debt only in case the donation is in fraud of creditors. [Art. 759,
CC]
Reversion [Art. 757, CC]
The property donated may be restored or returned to:
a. Donor or his estate (reversion may be for any case and circumstance); or
b. Other persons (such persons MUST all be living at the time of the
donation)

Note: Any reversion stipulated by the donor in favor of a third person in

violation of what is provided in the foregoing shall be void, but shall not
nullify the donation.
Double donations [Art. 744, CC]
Rule: Priority in time, priority in right.
a. If movable: One who first took possession in good faith. [Art. 1544,
CC]

299
b. If immovable: One who first recorded in Registry of Property in good
faith. [Art. 1544, CC]
c. If there is no inscription, the one who first took possession in good
faith. [Art. 1544, CC]
d. In the absence thereof (possession), one who can present the oldest title,
provided there is good faith. [Art. 1544, CC]
Excessive/Inofficious Donations [Art. 752, CC]
Inofficious donation: A type of donation in which a person gives or
receives more than what he may give or receive by will. If a donation is
inofficious, it shall be reduced with regard to the excess.

But this reduction shall not prevent the donations from taking effect during
the life of the donor, nor shall it bar the donee from appropriating the
fruits. [Art. 771, CC]

Note: Only those who, at the time of the donor's death, have a right to the
legitime, and their heirs and successors-in-interest, may ask for the
reduction or inofficious donations. [Art. 772, CC]

If, there being two or more donations, the disposable portion is not
sufficient to cover all of them, those of the more recent date shall be
suppressed or reduced with regard to the excess. [Art. 773, CC]
Donations cannot comprehend future property [Art. 751, CC]
Future property: Understood as anything which the donor cannot dispose
of at the time of the donation.

Note: It is immaterial that the then-future property may subsequently

belong to the donor. [Tolentino]
In fraud of creditors [Art. 759, CC]
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.
There being no stipulation regarding the payment of debts, the donee shall
be responsible for donor’s debts only when the donation has been made in
fraud of creditors, otherwise creditors may rescind donation by way of
accion pauliana.
VOID DONATIONS
a. Donation between spouses [Art. 87, FC]
General Rule: Every donation or grant of gratuitous advantage, direct or
indirect, between the spouses during the marriage shall be VOID. The
prohibition applies to persons living together as husband and wife without
a valid marriage.
Exception: Moderate gifts which the spouses may give each other on the
occasion of any family rejoicing.
b. Those made between persons mentioned under Art. 739, CC
c. Those made to persons incapacitated to succeed by will. [Art. 740,

300
 CC]

REVOCATION/REDUCTION

Reduction

● Total withdrawal of amount, whether the legitime is impaired or not.

● Benefits the donor.

Revocation

● Amount is only insofar as the legitime is prejudiced.

● Benefits the donor’s heirs (except when made on the ground of the
appearance of a child).

● Revocation due to birth, appearance, or adoption of a child applies only to

donations inter vivos and not to donations mortis causa, onerous donations,
and donations propter nuptias. [De Leon, p. 676]

Time of Action Transmissibility Effect Liability

(Fruits)
Birth, appearance, adoption [Art. 760, CC]
Within 4 years Transmitted to • Property is Fruits
from birth, children and returned. returned from
legitimation and descendants upon • If the property the filing of
adoption. [Art. 763, the death of has been sold, the complaint.
CC] donor. [Art. 763, its value at the [Art, 768,
CC] time of CC]
donation shall
be returned.
• If the property
was mortgaged,
the donor may
redeem the
mortgage, by
paying the
amount
guaranteed,
with right to
recover the

301
 amount from
the done. [Art.
762, CC]
Non-compliance with condition [Art. 764,CC]
Within 4 years May be Property Fruits
from transmitted to returned to the received after
noncompliance. donor’s heirs and donor, having failed
may be exercised alienations by to fulfill
against donee’s the donee and condition are
heirs. mortgages void to be
subject to rights returned. [Art.
Note: Art. 764 of third persons 768, CC]
does not apply to in good faith.
onerous
donations in view
of Art. 733,
providing that
onerous
donations are
governed by the
rules on
contracts. [De
Luna v. Abrigo,
181 SCRA 150
(1990)]
Ingratitude [Art. 765, CC]
Applies to all donations
EXCEPT: Mortis causa; Propter nuptias; Onerous donations
Within 1 year after Not transmitted Property Fruits
knowledge by to heirs of donor/ returned, but received from
donor of the fact donee, but if alienations and the filing of
and it was possible donor dies during mortgages the complaint
for him to bring the pendency of case, effected before returned. [Art.
action. [Art. 769, heirs may be the notation of 768, CC]
CC] substituted. [Art. the complaint
770, CC] for revocation
in the registry
of property
subsist. Later
ones shall be
void. [Art. 776,
CC]
Failure to reserve sufficient means for support [Art. 750, CC]
At any time, by the Not Reduced to the Donee
donor or relatives transmissible. extent entitled. [Art.

302
 entitled to support. necessary to 771, CC]
provide
support. [Art.
771, CC]
Inofficiousness for being in excess of what the donor can give by will
[Art. 752, CC]
Within 5 years from Transmitted to Donation takes Donee
the death of the donor’s heirs. effect on the entitled. [Art.
donor. [Art. 1149, [Art. 772, CC] lifetime of 771, CC]
CC] donor.
Reduction only
upon his death
with regard to
the excess. [Art.
771, CC]
Fraud against creditors [Art. 1381]
Rescission within 4 Transmitted to Returned for Fruits
years from the creditor’s heirs or the benefit of returned, or if
perfection of successors-in the creditor impossible,
donation interest. who brought indemnify
(knowledge of the the action. [Art. creditor for
donation). [Art. 1388, CC] damages.
1389, CC] [Art. 1385
and 1388,
CC]

3. Prescription
[See also, Part III. PRESCRIPTION.]

Definition
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. [Art. 1106, CC]

Note: For purposes of ACQUIRING OWNERSHIP, only ACQUISITIVE

PRESCRIPTION is being referred to.

Who may acquire

Persons who are capable of acquiring property or rights by the other legal
modes may acquire the same by means of prescription. [Art. 1107 (1), CC]

Minors and other incapacitated persons may acquire property or rights

personally or through their parents, guardians, or legal representatives.

303
Kinds of prescription
a. Acquisitive Prescription
• The acquisition of ownership and other real rights through possession in
the concept of owner of a thing in the manner and condition provided by
law.

• Ordinary acquisitive prescription: requires possession of things in good

faith and with just title for the time fixed by law.

Note: Ownership and other real rights over immovable property are acquired
by ordinary prescription through
possession of ten years [Art. 1134, CC].

• Extraordinary acquisitive prescription: acquisition of ownership and

other real rights without need of title or of good faith or any other condition.

• Prescription where possession in good faith converted into possession

in bad faith:
a. Ordinary
i. Movable properties – 4 years [Art. 1132, CC]
ii. Immovable properties – 10 years [Art. 1134, CC]
b. Extraordinary:
i. Movable properties – 8 years [Art. 1132 and 1140, CC]
ii. Immovable properties – 30 years [Art. 1137, CC]

• As a mode of acquisition, prescription requires existence of

following [Tolentino]:
a. Capacity of the claimant to acquire by prescription;
b. A thing capable of acquisition by prescription;
c. Adverse possession of the thing under certain conditions; and
d. Lapse of time provided by law.
e. Possession must be in the concept of owner, not holder.
● For extraordinary prescription, only possession in the concept of owner is
required; no need of good faith and just title.
● Possession has to be in the concept of an owner, public, peaceful, and
uninterrupted. [Art. 1118, CC]

b. Extinctive prescription
● The loss or extinguishment of property rights or actions through the
possession by another of a thing for the
period provided by law or through failure to bring the necessary action to
enforce one’s right within the period fixed by law.

Acquisitive Pr Extinctive Prescription

scription
Requires positive action of the Requires inaction of the owner out

304
 possessor (a claimant) who is not of possession or neglect of one with
the owner. a right to bring his action.
Applicable to ownership and other Applicable to all kinds of rights,
real rights. whether real or personal.
Vests the property and raise a new Vests the property and raise a new
title in the occupant. title in the occupant.
Results in the acquisition of Merely results in the loss of a real
ownership or other real rights in a or personal right, or bars the cause
person as well as the loss of said of action to enforce said right.
ownership or real rights in another
Can be proven under the general Should be affirmatively pleaded and
issue without its being affirmatively proved to bar the action or claim of
pleaded. the adverse party.

III. PRESCRIPTION

PRESCRIPTION

Definition
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. [Art. 1106, CC]

In the same way, rights and actions are lost by prescription. [Art. 1106, CC]

Note: The provision impliedly differentiates two kinds of prescription:

acquisitive (par. 1) and extinctive (par. 2). For purposes of ACQUIRING
OWNERSHIP, only ACQUISITIVE PRESCRIPTION is being referred to.

Negligence as basis of prescription – both kinds of prescription are

essentially based on negligence of the owner of the right.

Retroactive – acquisition of rights through prescription is retroactive. One is

deemed to have acquired the right at the moment the prescription began to
run, once the period is completed.

Rationale
It is purely statutory in origin. It is founded on grounds of public policy
which requires for the peace of society, that juridical relations susceptible of
doubt and which may give rise to disputes, be fixed and established after the
lapse of a determinate time so that ownership and other rights may be certain
for those who have claim in them.

Requisites of prescription as a mode of acquiring ownership

1. Capacity to acquire by prescription;
2. A thing capable of acquisition by prescription;

305
3. Possession of the thing under certain conditions; and
4. Lapse of time provided by law.

Who may acquire by prescription

1. Persons who are capable of acquiring property by other legal modes;
2. State;
3. Minors – through guardians of personally.

A. TYPES OF PRESCRIPTION
Acquisitive Extinctive
Prescription Prescription
Requires positive action of the Requires inaction of the owner out of
possessor (a claimant) who is not the possession or neglect of one with a
owner. right to bring his action.
Applicable to ownership and other Applicable to all kinds of rights,
real rights. whether real or personal.
Vests the property and raises a new Vests the property and raises a new
title in the occupant. title in the occupant.
Results in the acquisition of Merely results in the loss of a real or
ownership or other real rights in a personal right or bars the cause of
person as well as the loss of said action to enforce said right.
ownership or real rights in another.
Can be proven under the general Should be affirmatively pleaded and
issue without its being affirmatively proved to bar the action or claim of
pleaded. the adverse party

1. Acquisitive
a. acquisition of a right, adverse possession, or usurpation;
b. refers to the possessor as the actor, as a claimant in possession;
c. vests property;
d. the basis is the assertion of the usurper of an adverse right, uncontested by
the true owner of the right, and gives rise to the presumption that the latter
has given up the right to the former.

The acquisition of ownership and other real rights through possession in the
concept of owner of a thing in the manner and condition provided by law.
May be ordinary or extraordinary:
1. Ordinary: requires possession of things in good faith and with just title
for the time fixed by law.
2. Extraordinary: acquisition of ownership and other real rights without
need of title or of good faith or any other condition.

Prescription where possession in good faith converted into possession in bad

faith:
1. Ordinary
● Movable properties - 4 years [Art. 1132, CC]

306
● Immovable properties - 10 years [Art. 1134, CC]
2. Extraordinary:
● Movable properties - 8 years [Art. 1132 and 1140, CC]
● Immovable properties - 30 years [Art. 1137, CC]

Possession has to be in the concept of an owner, public, peaceful, and

uninterrupted. [Art. 1118, CC]

a. Ordinary
It requires possession of things in good faith and with just title for the time
fixed by law.

Good faith
If he is not aware of the existence of any flaw or defect in his title or mode
of acquisition which invalidates it [Art. 526 in relation to Art. 1128, CC] and
has reasonable belief that the person from whom he received the thing was
the owner thereof, and could transmit his ownership [Art. 1127, CC].

Just title
It means that the possessor obtained the possession of the property through
one of the modes recognized by law for acquiring ownership but the
transferor or grantor was not the owner of the property or he has no power to
transmit the right [Art. 1129, CC].

b. Extraordinary
a. a loss of the right and limitation of actions;
b. refers to the neglect of the owner, who is out of possession;
c. bars the right of action;
d. the basis is the probability that alleged right never existed or
has already been extinguished, or if it exists, the inconvenience
caused by the prescription should be borne by the negligent
party.

Prescription where the possessor is in bad faith. It does not require good
faith or just title but possession for a period longer than ordinary acquisitive
prescription [Pineda, 2009].

Requisites
1. Capacity of the possessor to acquire by prescription;
2. Susceptibility of object to prescription;
3. Adverse possession of the character prescribed by law;
4. Lapse of time required by law; and
5. Good faith of possessor or proof of just title.

2. Extinctive
Basis

307
It based on the probability, born of experience, that the alleged right which
accrued in the past never existed or has already been extinguished; or if it
exists, the inconvenience caused by the lapse of time should be borne by the
party negligent in the assertion of his right [Tolentino].

a. Characteristics
The loss or extinguishment of property rights or actions through the
possession by another of a thing for the period provided by law or through
failure to bring the necessary action to enforce one’s right within the period
fixed by law.

b. Requisites
1. Capacity to acquire by prescription;
2. A thing capable of acquisition by prescription;
3. Possession of the thing under certain conditions; and
4. Lapse of time provided by law.

c. Periods
1. Movables
a. 4 years ‐ If in good faith; and
b. 8 years ‐ If in bad faith [Art. 1140 in relation to Art. 1132, CC].
2. Immovables
a. 10 years ‐ If in good faith
b. 30 years ‐ If in bad faith

B. WHEN PRESCRIPTION IS INAPPLICABLE

1. By offender
The offender can never acquire, through prescription, movable properties
possessed through a crime such as robbery, theft, or estafa [Art. 1133, CC].

Note: The person who cannot invoke the right of prescription is the offender
or person who committed the crime or offense, not a subsequent transferee
who did not participate in the crime or offense, unless the latter knew the
criminal nature of the acquisition of the property by the transferor.

2. Registered lands
No title to registered land in derogation of the title of the registered owner
shall be acquired by prescription or adverse possession. [PD 1529]

3. Actions to demand right of way; to abate a nuisance

Rights not extinguished by prescription [Art.1143, CC]
● To demand a right of way, regulated in [Art. 649, CC];
● To bring an action to abate a public or private nuisance.

308
4. Action to quiet title if plaintiff is in possession
When plaintiff is in possession of the property, the action to quiet title does
not prescribe. The reason is that the owner of the property or right may wait
until his possession is disturbed or his title is assailed before taking steps to
vindicate his right.

5. Void contracts
The action or defense for the declaration of the inexistence of a contract does
not prescribe. [Art.1410, CC]

6. Action to demand partition; distinguished from !aches

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. [Art. 494, CC]

Prescription distinguished from laches:

Prescription Laches
Concerned with the fact of delay. Concerned with the effect of delay.
A matter of time. Principally a question of inequity of
permitting a claim to be enforced,
this inequity being founded on some
subsequent change in the condition
or the relation of the parties.
Prescription Laches
Statutory. NOT statutory
Applies at law Applies at equity
Cannot be availed of unless it is Being a defense of equity, need not
especially pleaded as an affirmative be specifically pleaded.
allegation.
Based on a fixed time. NOT based on a fixed time.

Laches – (or “estoppel by laches”) is unreasonable delay in the bringing of a

cause of action before the courts of justice; it is 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 a reasonable time, warranting a presumption
that the party entitled thereto either has abandoned it or declined to assert it.

Requisites of Laches:
1. Conduct on the part of the defendant which gives rise to a claim;
2. Delay in asserting complainant’s rights (the complainant having
knowledge/opportunity to file suit);
3. Lack of knowledge/notice of the part of the defendant that the
complainant would assert a right; and
4. Injury or prejudice to the defendant in the event relief is accorded to the
complainant.

309
7. Property of public dominion
Prescription, both acquisitive and extinctive, does not run against the State
in the exercise of its sovereign function to protect its interest EXCEPT with
respect to its patrimonial property which may be the object of prescription.
[Art. 1113, CC]

C. PRESCRIPTION OR LIMITATION OF ACTIONS

1. To recover movables
The action prescribes in 8 years from the time the possession thereof is lost.
[Art. 1132 and 1140, CC]

However, the action shall not prosper if it is brought after 4 years when the
possessor has already acquired title by ordinary acquisitive prescription.
[Art. 1132, CC]

If the possessor acquired the movable in good faith at a public sale, the
owner cannot obtain its return without reimbursing the price paid. [Art.559,
CC]

2. To recover immovables
General Rule: Real actions prescribe after 30 years [Art. 1141, CC]

Exception: The possessor has acquired ownership of the immovable by

ordinary acquisitive prescription through possession of 10 years. [Art. 1134,
CC]

3. Other actions
Action for reconveyance
 Based on fraud: Prescribes 4 years from the discovery of fraud. [Art.
1391, CC]
 Based on implied or constructive trust: 10 years from the alleged
fraudulent registration or date of issuance of certificate of title over
the property. [Art. 1144, CC]

Prescriptive Action
Period
10 years [Art. 1144, 1. Action to foreclose a mortgage (from the
CC] time the principal obligation becomes due and
demandable)
2. Actions upon:
a. A written contract
b. An obligation created by law
c. A judgment

310
 6 years [Art. 1145, Actions upon:
CC] 1. An oral contract
2. A quasi-contract
5 years [Art. 1149, All other actions whose periods are not fixed in
CC] the CC or in other laws.
4 years [Art. 1145, Actions upon:
CC] 1. An injury to the rights of the plaintiff.
2. A quasi-delict.
1 year 1. Actions for Art. 1147, CC.
a. Forcible entry within one year from date of
dispossession thru FISTS or unlawful detainer 1
year from date of last demand.
b. Defamation

2. Actions upon an injury to the rights of the

plaintiff or upon a quasi-delict resulting from any
act of any public officer involving the exercise of
powers arising from Martial Law including the
arrest, detention and/or trial of the plaintiff.

3. To recover possession de facto. [Art. 554 (4),

CC]

4. To revoke a donation on the ground of

ingratitude. [Art. 769, CC]

5. To rescind or recover damages if immovable is

old with non-apparent burden or servitude. [Art.
1560 (3,4), CC]

6. To enforce warranty of solvency of debts in

assignment of credits. [Art. 1629, CC]

D. INTERRUPTION
1. When prescription of actions is interrupted
a. They are filed before the court;
b. When there is a written extrajudicial demand by the creditors; and
c. When there is any written acknowledgment of the debt by the debtor.

2. Types of interruption
1. Natural - Any natural cause that interrupts the possession for more than
one year. [Art. 1121, CC]
2. Civil [Art. 1123, CC]
a. For acquisitive prescription – starts from the time judicial summons are
received.
b. For extinctive prescription – starts from the time action is filed in court,

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written extrajudicial demand by the creditors is received, or when there is
written acknowledgment of the debt by the debtor. [Art. 1155, CC]

Suspension in case of acquisitive prescription

The period of interruption shall be counted in favor of prescription (i.e. as if
interruption never happened but is merely suspended) if:
a. Judicial summons is void
b. Plaintiff should desist from the complaint
c. Possessor be absolved from the complaint

Note: There is no suspension in extinctive prescription.

Effects of interruption
1. All the benefits acquired so far from the possession ceases.
2. When the prescription runs again, it will be reset (i.e. entirely new
prescriptive period)

IV. SUCCESSION

A. GENERAL PROVISIONS
1. Definition
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. [Art. 774, CC]

Succession is one of the modes of acquiring ownership and other real rights
over property. [par 2, Art. 712, CC]

Kinds of Succession:
a. Testamentary
b. Legal or Intestate
c. Mixed
d. Compulsory

Scope of Inheritance
General rule:
a. All the property, rights and obligations of a person which are not
extinguished by his death [Art. 776, CC]
b. 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 [Art. 781, CC]

Exceptions:

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a. Rights and obligations extinguished by death and are not transmissible
[Art. 1311, CC]

1. Intransmissible by nature: this refers to rights and obligations which are

strictly personal (intuit personae)

Examples:
• Those relating to family relations
• Those arising from public law
• Those which involve or require the personal skills, qualifications,
characteristics or circumstances of a particular individual
• Criminal responsibility

2. Intransmissible by stipulation

3. Intransmissible by provision of law

Examples:
• Usufruct [Art. 603, CC]
• Agency [Art. 1919, CC]
• Commodatum [Art. 1939, CC]

b. Monetary debts left by the decedent are intransmissible in the sense that
they are paid from the estate of the decedent and only the net estate or
remainder goes to the heirs. If the decedent’s estate is not sufficient to pay
his debts, his heirs cannot be held liable for said debts in their personal
capacity [Rule 88-90, Rules of Court].

Rule on Transmission
General rule: All property rights which have accrued to the hereditary estate
since the opening of succession are transmitted to the heirs [Art. 777, CC].

2. Succession occurs at the moment of death

Rules on Opening of Succession
a. The rights to succession are transmitted from the moment of the death of
the decedent. [Art. 777, CC]

Implications of this principle

1. The law in effect at the time of death of the decedent governs
the succession [Art. 2236, CC]
2. The heir becomes the owner of his share as well as all fruits
which accrue after the death of the decedent.
3. Upon death of the decedent, heirs may immediately possess,
administer and dispose of their shares in the estate (in the
absence of existing debts/claims against the estate);
4. Since succession takes place by operation of law at the moment
of the death of the decedent, the heirs can sue upon the rights of

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 the decedent, without having to be appointed executor or
administrator [Emnace v. CA, G.R. No. 126334 (2001)], and
without need of a judicial declaration of their status as heirs [De
Vera v. Galauran, 67 Phil 213 (1939)]. Heirs may also be sued
without a previous declaration of heirship, provided there is no
pending special proceeding for the settlement of estate of the
decedent [Gayon v. Gayon, G.R. No. L- 28394 (1970)].
5. The possession of hereditary property is deemed transmitted to
the heir without interruption and from the moment of death of
the decedent, in case the inheritance is accepted [Art. 533, CC]
6. Estate taxes accrue upon death of the decedent, even if the heirs
come into possession only later.

b. A person may be “presumed” dead for the purpose of opening his

succession. In this case, succession is only of provisional character because
there is always a chance that the absentee may still be alive [Arts. 390-391,
CC].

Subjects of Succession
a. Decedent – person whose property is transmitted through succession,
whether or not he left a will [Art. 775, CC]
○ Testator – a decedent who left a will [Art. 775, CC]
b. Successor – person who succeeds to the property of the decedent.

3. Kinds of Successors
1. Heirs – those who are called to the whole or an aliquot portion of the
inheritance either by will or by operation of law [Art. 782, CC]
● Compulsory Heirs
● Voluntary or Testamentary Heir
● Legal or Intestate Heirs

2. Devisees and Legatees

• Devisees are persons to whom gifts of real property are given by virtue of a
will. [Art. 782]
• Legatees are persons to whom gifts of personal property are given by
virtue of a will. [Art. 782]

Note: In case of preterition, the distinction between heir and legatee/devisee

is significant. Preterition annuls the institution of heirs. It does not affect the
institution of legatees and devisees provided that the legitimes are not
impaired [Art. 854, CC].

Heir Legatee / Devisee

Represents the juridical personal Does not represent regardless of the
obligations not extinguished by legacy or device’s value
death

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 Succeeds to the remainder of the Succeeds only to the determinate
decedent’s properties after all the thing or quantity which is
debts and all the legacies and mentioned in the legacy or device
devices have been paid
Can exist in either testamentary or Can exist only in testamentary
intestate succession succession

B. TESTAMENTARY SUCCESSION
1. Wills
Definition of a will: An act whereby a person is permitted, with the
formalities prescribed by law to control to a certain degree the disposition
of his estate to take effect after his death [Art. 783, CC].

KINDS OF WILLS
1. Notarial – an ordinary or attested will, which must comply with the
requirements of the law [Arts. 804-808, CC]
2. Holographic – a will entirely written, dated and signed by the hand of the
testator [Art. 810, CC]

CHARACTERISTICS OF WILLS
1. Purely personal
General rule: the making of a will is a strictly personal act. Thus,
a. It cannot be left in whole or in part to the discretion of a third person, or
b. It cannot be accomplished through an agent or attorney.

Exception
What cannot be delegated to 3 rd What may be entrusted to 3rd
persons persons
a. designation of heirs, devisees and a. designation of person/institution
legatees falling under a class specified by
b. duration/efficacy of designation testator
c. determination of portions, when b. manner of distribution of
referred to by name [Art. 785,CC] property specified by testator [Art.
786, CC]

Note: testator must first specify the

class and the amount of property for
proper delegation

2. Free and intelligent [Art. 839, CC] – Execution of a will tainted by any
vices affecting the free will of the testator can cause its disallowance.

3. Solemn or formal – if the formalities of a will required by law are not

complied with, it will be disallowed. [Art. 839, CC]

4. Revocable and ambulatory – will can be revoked at any time before the

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testator’s death [Art. 828, CC]

5. Mortis causa – takes effect upon the testator’s death [Art. 783, CC]

6. Individual – prohibition against joint wills [Art. 818, CC]

7. Executed with animus testandi – intent to dispose of the property

8. Executed with testamentary Capacity

9. Unilateral act – does not involve an exchange of values or depend on

simultaneous offer and acceptance

10. Dispositive – disposes of property

Even in the absence of dispositive provisions, a will disinheriting a
compulsory heir is still a dispositive will because a disinheritance has the
effect of disposing the legitime of the disinherited compulsory heir in favor
of other compulsory heirs [Seangio v. Reyes, G.R. Nos. 140371-72 (2006)].

Exceptions: Non-dispositive wills.

e.g. A will recognizing an illegitimate child

11. Statutory grant – permitted only by law, not a constitutional right

RULES OF CONSTRUCTION AND INTERPRETATION [Arts. 788-

795]

Main principle: Testacy is preferred to intestacy. The intent of the testator

is paramount and must be given effect as far as legally possible.

Governing Laws, In General

Aspect of the Will Governing Law
Formal Validity Law in force at the time the will was
executed [Art. 795, CC]
Intrinsic Validity Law of decedent’s nationality at the
time of his death [Arts. 16 and 2263,
CC]

Aspects of the Will Governed by the National Law of the Decedent:

1. Order of succession;
2. Amount of successional rights;
3. Intrinsic validity of testamentary provisions; and
4. Capacity to succeed [Art. 16, CC]

TESTAMENTARY CAPACITY AND INTENT

Time of Determining Capacity

Capacity to make a will is determined as of the time of making thereof [Art.

316
798, CC].

Supervening incapacity does not invalidate an effective will. Likewise, a

supervening capacity does not validate the will of an incapable [Art. 801,
CC].

Requisites for Capacity to Make a Will

1. The testator must not be expressly prohibited by law to make a will [Art.
796, CC]

2. The testator must be at least 18 years old [Art. 797, CC]

3. The testator must be of sound mind at the time of execution [Art. 798,
CC]

Test of soundness of mind: To be of sound mind, the testator must know:

a. The nature of the estate to be disposed of;
b. The proper objects of his bounty;
c. The character of the testamentary act [Art. 799, CC]

General rule: Soundness of mind is presumed [Art. 800, CC]

Exceptions:
a. When the testator, one month or less before the execution of the will, was
publicly known to be insane. [Art. 800, CC]
b. When the testator executed the will after being placed under guardianship
or ordered committed, in either case, for insanity under Rules 93 and 101 of
the Rules of Court, and before said order has been lifted. [Torres v. Lopez,
G.R. No. L- 25966 (1926); Balane]

FORMS OF WILLS

In General [Art. 804, CC]

1. The will must be in writing
2. It must be in a language or dialect known to the testator

Applicable Laws as to Formal Validity

Applicable Law
Formal Validity Law in force at the time the will
was executed [Art. 795, CC]
Place, Forms & Solemnities of a Law of the country in which the will
Will was executed [Art. 17, CC

Arts. 815-817, CC (summarized in the table below) provide for the various
governing laws in these instances:
1. A will was made in a foreign country by a Filipino [Art. 815]
2. A will was made in a foreign country by an alien [Art. 816]
3. A will was made in the Philippines by an Alien [Art. 817]

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Governing Law as to Place of Execution of Will
Testator Place of Execution Governing Law
of Will
Filipino Philippines Philippine Law [Art. 16, CC]
Outside of the 1. Philippine Law [Art. 815, CC]
Philippines 2. Law of the country in which it is
executed [Art. 17, CC]
Alien Philippines 1. Philippine Law; or
2. Law of the country of which
testator is a citizen or subject [Art.
817, CC]
Outside of the 1. Philippine Law [Art. 816, CC]; or
Philippines 2. Law of the testator’s country; or
3. Law of the place where the testator
resides; or
4. Law of the country where the will
is executed [Art. 17, CC]

ATTESTED OR NOTARIAL WILLS

Formal requirements for notarial wills

1. Subscribed at the end
2. Attestation clause
3. Marginal signatures
4. Page numbers
5. Acknowledged by a notary public
6. Additional requirements for handicapped testators
7. Subscribed by 3 or more witnesses in the presence of the testator and of
one another

Note: Unlike in holographic wills, there is no requirement that an attested

will should be dated.

Formal Requirement
Subscription Subscribed at the end of the will by:
a. Testator himself
b. Testator’s name written by a
representative in his presence and under
his express direction
Attestation Attested and subscribed by 3 or more credible
Clause witnesses in the presence of the testator and of one
another [Art. 805, CC]
The attestation clause shall state the following [par.
3, Art. 805, CC]:
1. Number of pages;

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 2. The fact that the testator or his
representative under his express
direction signed the will and every page
in the presence of instrumental
witnesses
3. That the witnesses signed the will and
all its pages in the presence of the
testator and of one another.
The signatures of the witnesses must be at the
bottom of the attestation clause [Cagro v. Cagro,
G.R. No. L-5826 (1953)].
The notary public cannot be counted as an attesting
witness [Cruz v. Villasor, G.R. No. L-32213 (1973)].
Test of presence: 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 with
relation to each other at the moment of inscription of
each signature [Jaboneta v. Gustilo, G.R. No. 1641
(1906)].
Effect of Omissions: Omissions can be supplied by
an examination of the will itself, without the need of
resorting to extrinsic evidence, will not be fatal and
will not prevent allowance of the will.
Marginal General rule: Testator or his representative shall
Signatures write his name, and the witnesses shall sign each and
every page except the last page [Art. 805, CC].

Exceptions:
1. When the will consists of only one page
2. When the will consists of only two
pages, the first of which contains all
dispositions 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. [Abangan v.
Abangan, G.R. No. L- 13431 (1919)]
3. The use of thumbprint was allowed
[Matias v. Salud, G.R. No. L- 10751
(1958)]
4. The inadvertent failure of one witness to
affix his signature to one page of a
testament, due to the simultaneous
lifting of two pages in the course of
signing, is not per se sufficient to justify

319
 denial of probate. [Icasiano v. Icasiano,
G.R. No. L- 18979 (1964)]
Page All the pages of the will shall be numbered
Numbers correlatively in letters placed on the upper part of
each page (i.e. Page One of Five Pages). [Art. 805,
CC]
Acknowledged by The certification of acknowledgement need not be
a notary public signed by the notary in the presence of the testator
[Art. 806, CC] and the witnesses. [Javellana v. Ledesma, G.R. L-
7179 (1955)]
Additional 1. Deaf Mute [Art. 807, CC]
Requirements for a. Testator must personally read the will;
handicapped or
testators b. Testator shall personally designate two
persons to read the contents and
communicate it to him in some
practicable manner.
2. Blind [Art. 808, CC]
a. The will shall be read to the testator twice –
By one of the subscribing witnesses and by the
notary public acknowledging the will.
b. A testator suffering from glaucoma may be
considered as legally blind [Garcia v.
Vasquez, G.R. No. L-26615 (1970)]
Subscribed by 3 or Qualifications [Art. 820, CC]
more witnesses in 1. Of sound mind
the presence of the 2. Aged 18 years or over
testator and of one 3. Not blind, deaf or dumb
another 4. Able to read and write Disqualifications [Art. 821,
CC]
1. Person not domiciled in the Philippines
2. Those who have been convicted of falsification,
perjury, or false testimony.

Creditors may be witnesses [Art. 824, CC].

Supervening incompetency shall not prevent the

allowance of the will [Art. 822, CC].

Rules on Interested Witness [Art. 823, CC]

General Rule Exception
Devises or legacies in favor of an If there are three other competent
interested witness or his or her witnesses, the devise or legacy shall
spouse, parent, or child will be void be valid and the interested witness
shall be treated as a mere surplus
age

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HOLOGRAPHIC WILLS

Formal Requirements for Holographic Wills

1. In writing [Art. 804, CC]
2. In a language known to the testator [Art. 804, CC]
3. Entirely written, dated and signed in the hand of the testator himself [Art.
810, CC]

Witnesses Required for Probate [Art. 811, CC]

1. At least one witness who knows the handwriting and signature
of the testator; explicitly declare that it is the testator’s
2. If contested – at least 3 of such witnesses
3. In the absence of a competent witness, expert testimony may
be resorted to

General rule: The holographic will itself must be presented for probate
[Gan v. Yap, G.R. No. L-12190 (1958)]

Exception: If there is a photostatic copy or xerox copy of the holographic

will, it may be presented for probate [Rodelas v. Aranza, G.R. No. L58509
(1982)]

Additional Dispositions
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 [Art. 812, CC]

When a number of dispositions appearing in a holographic will are signed

without being dated, and the last disposition has a signature and date, such
date validates the dispositions preceding it, whatever be the time of prior
dispositions. [Art. 813, CC]

Insertion, Cancellation, Erasure Or Alteration [Art. 814, CC]

Testator must authenticate by his full signature.

If such change is not authenticated by the testator, such change is considered

not made.
Thus, “the will is not thereby invalidated as a whole, but at most only as
regards the particular words erased, corrected, or inserted.” [Kalaw v.
Relova, G.R. No. L-40207 (1984), citing Velasco v. Lopez (1903)]

Note, however, that in the case of Kalaw v. Relova, the alteration involved
the designation of the testator’s sole heir. In this case, the holographic Will
had only one substantial provision, which was altered by substituting the
original heir with another, but which alteration did not carry the requisite of
full authentication by the full signature of the testator, the effect must be that
the entire Will is voided or revoked for the simple reason that nothing

321
remains in the Will after that which could remain valid.

Effect of Insertion Written by Another Person on the Validity of a

Holographic Will
When Made Effect
After the execution, without consent Insertion considered not written.
of testator Validity cannot be defeated by the
malice or caprice of a third person
After execution, with consent Will is valid, insertion is void
Contemporaneous to the execution of Will is void because it is not
the will written entirely by the testator

JOINT WILLS

Elements
1. A single testamentary instrument,
2. Which contains the wills of two or more persons,
3. Jointly executed by them,
4. Either for their reciprocal benefit or for the benefit of a third person.

Filipinos cannot make Joint Wills

Joint wills executed by Filipinos, whether in the Philippines or abroad, are
prohibited.
Note: Separate documents, each serving as one independent will (even if
written on the same sheet) are not considered joint wills.

MUTUAL WILLS

1. Executed pursuant to an agreement between two or more persons,

2. Jointly executed by them,
3. Either for their reciprocal benefit or for the benefit of a third person.

This is prohibited under Article 818.

RECIPROCAL WILLS

1. Testators name each other as beneficiaries in their own wills (there are
therefore 2 separate documents),
2. Under similar testamentary plans – Valid

CODICILS

1. It is a supplement or addition to a will,

2. made after the execution of a will,
3. and annexed to be taken as a part of the will,
4. by which any disposition made in the original will is explained, added to,
or altered.
5. in order that it may be effective, it shall be executed as in the case of a

322
will. [Arts. 825-826, CC]

Note: A codicil must be in the form of a will – can have a notarial codicil
attached to a holographic will, and a holographic codicil attached to a
notarial will.

Incorporation by Reference

Requisites [Art. 827, CC]

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.
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.

Note: Not available to holographic wills.

REVOCATION OF WILLS

A will may be revoked by the testator at any time before his death [Art. 828,
CC]

Modes of Revocation [Art. 830, CC]

1. By implication of law
EXAMPLE:
i. Preterition [Art. 854, CC];
ii. Legal separation [Art. 63, FC];
iii. Unworthiness to succeed [Art. 1032, CC], et al.);
2. By the execution of a will, codicil or other writing executed as provided in
the case of wills (may be total or partial)
3. By burning, tearing, canceling, 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.

The act contemplating revocation must be done at any time before the death
of the testator. The right of revocation cannot be waived or restricted. [Art.
828, CC]

Note: Even if a holographic will was not intended to be revoked, unless a

xerox copy exists, it can no longer be proved.

Law Governing Revocation [Art. 829, CC]

Place of Revocation Testator’s Domicile Governing Law
Philippines Philippines, or some Philippine Law
other country

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 Outside the Philippines Philippines (This 1. Law of Domicile –
situation is not Philippine law
governed by Art. 829) 2. Law of lace of
Revocation
3. Law of Place of
Execution of Will
[Balane]
Foreign Country 1. Law of the Place of
Execution of Will; or
2. Law of the place in
which the testator had
his domicile at the time
of revocation

General Rule: 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.
[Art. 832, CC]

Exception: Doctrine of Dependent Relative Revocation [Molo v. Molo, G.R.

No. L-2538 (1951)]

The rule that where the act of destruction is connected with the making of
another will so as to fairly raise the inference that the testator meant the
revocation of the old to depend upon the efficacy of the new disposition
intended to be substituted, the revocation will be conditional and dependent
upon the efficacy of the new disposition; and if for any reason, the new will
intended to be made as a substitute is inoperative, the revocation fails and
the original will remain in full force.

The failure of the new testamentary disposition upon whose validity the
revocation depends is equivalent to the non-fulfillment of a suspensive
condition and hence prevents the revocation.

False Cause/Illegal Cause

A revocation based on a false cause or illegal cause is null and void [Art.
833, CC].
It must appear from the will that the testator is revoking because of the cause
which he did not know was false.

Recognition of Illegitimate Child

The recognition of an illegitimate child does not lose its legal effect even
though the will wherein it was made should be revoked [Art. 834, CC].

Principle of Instanter
Revoking clause in the 2nd will is not testamentary in character but operates
to revoke the prior will instanter (immediately) upon the execution of the

324
will containing it. The revocation of the 2nd will does not revive the 1 st will
which has already become a nullity.

REPUBLICATION AND REVIVAL

Republication vs. Revival

Republication Revival
• Takes place by an act of the • Takes place by operation of law
testator • Restores a revoked will
• Corrects extrinsic and intrinsic
defects

Art. 835 Art. 836

Void as to form [Art. 805, CC] Void as to:
1. Non-formal defect
2. Previously revoked
How to Republish: How to Republish:
1. Execute new will 1. Execute new will or codicil
2. Copy out the provisions from the 2. Simply make references to old
original void will will
Reference to original insufficient Reference to original sufficient

ALLOWANCE AND DISALLOWANCE OF WILLS

Probate Requirement: No will shall pass either real or personal property

unless it is proved and allowed in accordance with the Rules of Court. [Art.
838, CC]

Definition of a Probate: A proceeding in rem required to establish the

validity of a will and in order to pass real or personal property. The testator
himself may, during his lifetime petition the court having jurisdiction for the
allowance of his will. [Art. 838, CC]

Kinds of Probate
1. Post-mortem: after death
2. Ante-mortem: during the testator’s lifetime

Note: Probate of a will is mandatory.

Matters to be proved in probate:

1. Identity
2. Due Execution
3. Capacity of the Testator

SCOPE OF PROBATE PROCEEDINGS [Art. 839, CC]

General rule: The probate court cannot inquire into the intrinsic validity of
testamentary provisions. Only the extrinsic validity of such wills may be

325
examined.

Exceptions:
1. When practical considerations demand that the intrinsic validity
of the will be resolved: When the will is intrinsically void on its
face (e.g., when there is clearly a preterition) such that to rule
on its formal validity would be a futile exercise [Acain v. IAC,
G.R. No. L-72706 (1987)].
2. Claimants are all heirs and they consent, either expressly or
impliedly, to the submission of the question of intrinsic validity
to the court [Valera v. Inserto, G.R. No. L-56504 (1987)].
3. Probate court may pass upon the title to a property, but such
determination is provisional and not conclusive, and is subject
to the final decision in a separate action to resolve title [Pastor
v.CA, G.R. No. L-56340 (1983)].
4. Probate court may decide on the ownership of a property when
the estate contains only one property to be adjudicated upon
[Portugal v. Portugal- Beltran, G.R. No. 155555 (2005)].

Revocation vs. Disallowance

Revocation Disallowance
Voluntary act of the testator Given by judicial Decree
With or without cause Must always be for a legal cause
May be partial or total Always total, except when the
ground is fraud or influence which
affects only certain portions of the
will

Effect of Final Decree of Probate, Res Judicata on Formal Validity

The probate of a will by the probate court having jurisdiction thereof is
usually considered as conclusive as to its due execution and validity and is
also conclusive that the testator was of sound and disposing mind at the time
when he executed the will, and was not acting under duress, menace, fraud,
or undue influence, and that the will is genuine and not a forgery. [Mercado
v. Santos, G.R. No. 45629 (1938)]

Grounds for Denying Probate

1. If the signature of the testator was procured by fraud;
2. If it was procured by undue and improper pressure and
influence, on the part of the beneficiary or some other person;
3. If the testator acted by mistake or did not intend that the
instrument he signed should be his will at the time affixing his
signature thereto;
4. If the testator was insane or otherwise mentally incapable of
making a will at the time of its execution;
5. If the formalities required by law have not been complied with;

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 or
6. If it was executed through force or under duress, or the
influence of fear, or threats. [Art. 839, CC]

2. Institution of heirs
A will shall be valid even though it —
a. should not contain an institution of an heir; or
b. such institution should not comprise the entire estate; or
c. the person so instituted should not accept the inheritance or 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. [Art. 841, CC]

Extent of Grant [Art. 842, CC]

Freedom of disposition depends upon the existence, kind and number of
compulsory heirs.
a. No compulsory heirs – Testator has full power of disposition
b. With compulsory heirs – Testator cannot disregard the rights of the
compulsory heirs. Testator may dispose of the free portion of his estate only.

Effect of Predecease of Heir [Art. 856, CC]

Any heir who dies before the testator or is incapacitated to succeed or
renounces the inheritance transmits no rights of the testator to his own heirs.
This is without prejudice to the rights of representation [Tolentino].

Manner of Distribution
1. Heirs instituted without designation of shares shall inherit in
equal parts [Art. 846, CC]
2. If the institution pertains to some heirs individually and others
collectively, the presumption is that all are individually
instituted [Art. 847, CC]
3. If siblings are instituted (whether full or half-blood), the
presumption is that the inheritance is to be distributed equally
[Art. 848, CC]. This is different from the rules of distribution in
intestate succession.
4. If parents and children are instituted, they are presumed to have
been instituted simultaneously and not successively [Art. 849,
CC]

Note: By “unknown,” the Code actually means persons who could not be
ascertained; a disposition in favor of a stranger is valid [Tolentino].

Preterition
NOT NAMED ALTHOUGH NAMED
He is not named in the will. He is neither:

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 1. Instituted as an heir
2. Expressly disinherited
3. Assigned any part of the estate
Thus: tacitly deprived of his right to legitime.

Concept [Art. 854, CC]

1. There must be a total omission of one, some or all of the heir/s from the
inheritance. [Seangio v. Reyes, G.R. Nos. 140371-72 (2006)]
2. The omission must be that of a compulsory heir.
3. The compulsory heir omitted must be of the direct line.
4. The omitted compulsory heir must be living at the time of the testator’s
death or must at least have been conceived before the testator’s death.

No Preterition
If the heir in question is instituted in the will but the portion given to him by
the will is less than his legitime – there is no preterition. [Reyes v. Barretto-
Datu, G.R. No. L-17817 (1967)]
If the heir is given a legacy or devise – there is no preterition. [Aznar v.
Duncan, G.R. No. L- 24365 (1966)]

If the heir had received a donation inter vivos from the testator – the better
view is that there is no preterition. The donation inter vivos is treated as an
advance on the legitime under Articles 906, 909, 910 and 1062.

The remedy, if the value of inheritance, legacy or devise, or donation inter

vivos is only for completion of his legitime under Articles 906 and 907.

Distinguished from Disinheritance

Preterition Disinheritance
• Tacit deprivation of a compulsory • Express deprivation of a
heir of his legitime compulsory heir of his legitime
• May be voluntary but the • Always voluntary
presumption of law is that it is • For some legal cause
involuntary • If the disinheritance is valid, the
• Law presumes there has been compulsory heir disinherited is
merely oversight or totally excluded from the
mistake on the part of the testator inheritance. In case of invalid
• Since preterition annuls the disinheritance, the compulsory heir
institution of heirs, the is merely restored to his legitime
omitted heir gets not only his
legitime but also his share in the
free portion not disposed of by way
of legacies and devises

Effects of Preterition [Art. 854, CC]

1. The institution of the heir is annulled.

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2. Devises and legacies shall remain valid as long as they are not inofficious.
3. If the omitted compulsory heir should die before the testator, the
institution shall be effective, without prejudice tothe right of representation.

When there are no devises and legacies,preterition will result in the

annulment of the will and give rise to intestate succession [Neri v. Akutin,
G.R. No. L-47799 (1941)].

3. Substitution of heirs
Substitution - the appointment of another heir, so that he may enter into the
inheritance in default of the heir originally instituted [Art. 857, CC].

The substitute shall be subject to the same charges and conditions imposed
upon the instituted heir, unless the testator has expressly provided the
contrary, or the charges or conditions are personally applicable only to the
heir instituted [Art. 862, CC].

Kinds of Substitution

1. BRIEF OR COMPENDIOUS [Art. 860, CC]

Brief – Two or more persons were designated by the testator to substitute

for only one heir

Compendious – One person is designated to take the place of two or more

heirs

2. RECIPROCAL [Art. 861, CC]

If the heirs instituted in unequal shares should be reciprocally substituted,

the substitute shall acquire the share of the heir who dies, renounces, or is
incapacitated, unless it clearly appears that the intention of the testator was
otherwise.
If there is more than one substitute, they shall have the same share in the
substitution as the institution.

Example (only 1 substitute): If two heirs are reciprocally substituted, then

if one of them dies before the testator dies, renounces, or turns out to be
incapacitated, the other will get his share, regardless of whether or not their
shares are equal.

Example (more than 1 substitute): A is instituted to 1/3, B to 1/6, and C to

½. If C dies before the testator, renounces or turns out to be incapacitated,
then the other two will get his shares in the same proportion as in the
institution. A will get twice as much as B (because his share of 1/3 in the
institution is twice the size of B’s share of 1/6)

3. SIMPLE SUBSTITUTION [Art. 859, CC]

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The testator may designate one or more persons to substitute the heir/s
instituted in case the heirs should:
a. die before him (predecease),
b. should not wish to accept the inheritance (repudiation), or
c. should be incapacitated to accept the inheritance (incapacitated).

4. FIDEICOMMISSARY SUBSTITUTION
The testator institutes an heir with an obligation to preserve and to deliver to
another the property so inherited. The heir instituted to such condition is
called the First Heir or the Fiduciary Heir; the one to receive the property is
the Fideicommissary or the Second Heir [Art. 863, CC].

Requisites [Arts. 863-865, CC]

a. A Fiduciary or first heir instituted is entrusted with the obligation to
preserve and to transmit to a Fideicommissary Substitute or second
heir the whole or part of the inheritance.
b. The substitution must not go beyond one degree from the heir
originally instituted.
c. The Fiduciary Heir and the Fideicommissary are living at the time of
the death of the testator.
d. The fideicommissary substitution must be expressly made.
e. The fideicommissary substitution is imposed on the free portion of the
estate and never on the legitime
In the absence of an obligation on the part of the first heir to preserve the
property for the second heir, there is no fideicommissary substitution. [PCIB
v. Escolin, G.R. Nos. L- 27860 and L-27896 (1974)]

Effects of predecease of the first heir/fiduciary or the second

heir/fideicommissary
Situation 1: If the heir dies followed by the second heir, then the testator
dies, who will inherit? The legal heirs. There is no fideicommissary
substitution because first and second heirs are not living at the time of the
testator’s death [Art. 863, CC].

Situation 2: The testator dies first followed by the second heir. The first heir
survived them but subsequently dies, who will inherit? The SH and his heirs
under Art. 866, CC. This is because the SH passes his rights to his own heirs
when he dies before FH.

Situation 3: If the first heir dies, followed by the testator, then the second
heir, who will inherit? No specific provision in law, but SH inherits because
the T intended him to inherit.

4. Conditional testamentary dispositions and testamentary dispositions with

a term
3 Kinds of Testamentary Disposition
a. Conditional [Art. 871, CC]

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b. Dispositions with a term [Art. 885, CC]
c. Dispositions with a mode/modal dispositions [Art. 882, CC]

CONDITIONAL DISPOSITIONS
Prohibited conditions: (considered as not imposed)
a. Any charge, condition or substitution whatsoever upon the legitimes
[Art. 872, CC]
b. Impossible and illegal conditions [Art. 873, CC]
c. Absolute condition not to contract a first marriage [Art. 874, CC]
d. Absolute condition not to contract a subsequent marriage unless
imposed on the widow or widower by the deceased spouse, or by the
latter’s ascendants or descendants [Art. 874, CC]
e. Scriptura captatoria or legacy-hunting dispositions - dispositions
made upon the condition that the heir shall make some provision in
his will in favour of the testator or of any other person [Art. 875, CC]
Effect: Entire disposition is void.

POTESTATIVE, CASUAL, AND MIXED CONDITIONS

Potestative Conditions
Depends solely on the will of the heir

General rule: Must be fulfilled as soon as the heir learns of the testator’s
death.

Exception: If the condition was already complied with at the time the heir
learns of the testator’s death; or if the condition is of such a nature that it
cannot be fulfilled again.
If there is constructive compliance, it is deemed fulfilled.

Casual or mixed
Casual Mixed
Fulfillment depends on chance or Fulfillment depends partly on the
the will of a third person. will of the heir and partly on chance
or the will of a third person.

General rule: May be fulfilled at any time (before or after testator’s death),
unless testator provides otherwise.

Exception: If already fulfilled at the time of execution of will:

a. If testator unaware of the fact of fulfillment – deemed fulfilled
b. If testator aware:
● can no longer be fulfilled again: deemed fulfilled
● can be fulfilled again: must be fulfilled again.

Constructive Compliance:
a. If casual – not applicable

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b. If mixed – applicable only if dependent partly on the will of a third party
not interested.

Dispositions with a Term

A term may either be suspensive or resolutory
Suspensive Resolutory
Before the arrival of the term, the Before the arrival of the term, the
property should be delivered to the property should be delivered to the
legal or intestate heirs. instituted heir
A caución muciana has to be posted No caución muciana required.
by the legal or intestate heirs.

Modal Dispositions
Dispositions with an obligation imposed upon the heir, without suspending
the effectivity of the institution, as a condition does.
A mode functions similarly to a resolutory condition.

In modal institutions, the testator states:

● the object of the institution,
● the purpose or application of the property left by the testator, or
● the charge imposed by the testator upon the heir [Rabadilla v. CA, G.R.
No. 113725 (2000)].

CAUCIÓN MUCIANA
A security to guarantee the return of the value of property, fruits, and
interests, in case of contravention of condition, term or mode

Instances when it is needed:

1. Suspensive term [Art. 885,CC]
2. Negative potestative condition – when the condition imposed upon the
heir is negative, or consists in not doing or not giving something [Art. 879,
CC]
3. Mode [Art. 882, par. 2, CC]

5. Legitime
It is that part of the testator’s property which he cannot dispose of because
the law has reserved it for his compulsory heirs. [Art. 886, CC]

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; but they must bring to collation
whatever they may have received by virtue of the renunciation or
compromise [Art. 905, CC].

Classes of Compulsory Heirs [Art. 887, CC]

1. Primary: Legitimate Children and Legitimate Descendants with respect
to their Legitimate Parents and Ascendants

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2. Secondary: Those who succeed only in the absence of the primary
compulsory heirs:
a. Legitimate Parents and Legitimate Ascendants, with respect to their
Legitimate Children and Descendants. (They will inherit only in default of
legitimate children and their descendants)
b. Illegitimate Parents with respect to their Illegitimate Children. (They will
inherit only in default of the illegitimate and legitimate children and their
respective descendants).
Note that other illegitimate ascendants are not included.
3. Concurring: Those who succeed together with the primary or the
secondary compulsory heirs:
● Surviving Spouse
● Illegitimate Children and Illegitimate Descendants

SPECIFIC RULES ON LEGITIME

1. Direct Descending Line
a. Rule of Preference between lines [Arts. 978 and 985, CC]
 Those in the direct descending line shall exclude those in the direct
ascending and collateral lines; and
 Those in the direct ascending line shall, in turn, exclude those in the
collateral line.
Rule of Proximity [Art. 926, CC]:
 The relative nearest in degree excludes the farther one.
b. Right of representation ad infinitum in case of predecease, incapacity, or
disinheritance [Arts. 972 and 992, CC]
 For decedents who are Legitimate Children, only the Legitimate
Descendants are entitled to right of representation.
 For decedents who are Illegitimate Children, both the Legitimate and
the Illegitimate Descendants can represent, only with respect to the
decedent’s illegitimate parents.
c. If all the Legitimate Children repudiate their legitime, the next generation
of Legitimate Descendants may succeed in their own right.

2. Direct Ascending Line

a. Rule of division between lines
 The father and the mother shall inherit equally if both living. One
parent succeeds to the entire estate of the child if the other parent is
dead [Art. 986, CC].
 In default of the mother and the father, the ascendants nearest in
degree will inherit [Art. 987, CC].
 If there is more than one relative of the same degree but of different
lines, one half will go to the paternal ascendants and the other half to
the maternal ascendants [Art. 987, CC].
b. Rule of equal division
 The relatives who are in the same degree shall inherit in equal shares

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 [Art. 987, CC].

Steps in Determining the Legitimate of Compulsory Heirs [Arts. 908-

910, CC]

Value of the Estate

- Taxes
- Less Liabilities
NET ESTATE
+ collationable donations
THEORETICAL* HEREDITARY ESTATE

*Because this amount is what the legitime will be based on, but the actual
amount available for physical distribution is the net estate

Remedy of a Compulsory Heir in Case of Impairment of Legitime

Extent and Nature of Impairment Remedy
Total omission of a compulsory heir Annulment of institution and
who is a direct descendant or reduction of legacies and devises
ascendant (preterition) [Art. 854, CC]
Testamentary dispositions impairing Reduction of the disposition insofar
or diminishing the legitime as they may be inofficious or
excessive [Art. 907, CC]
Partial impairment Completion of the legitime [Art.
906, CC]
Impairment by inofficious donations Collation – reduction of donations
[Arts. 771 and 911, CC]

Method of Reduction [Art. 911, CC]

Order of priorities to be observed in the reduction [Balane]:
1. Reduce pro rata the non-preferred legacies and devises, and the
testamentary dispositions to heirs
2. Reduce pro rata the preferred legacies and devises
3. Reduce the donations inter vivos accordingto the inverse order
of their dates (oldest is the most preferred)
How are Devises and Legacies with usufructs, life annuities and pensions
reduced?
1. If the value of these grants exceeds the free portion, it impairs the
legitimes and should be reduced
2. The compulsory heir has 2 options:
a. Delivering to the devisee or legatee the free portion
b. Complying with the testamentary provision

Note: 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 ½ of its value; and in a contrary case, to the
compulsory heirs; but the former and the latter shall reimburse each other in

334
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 a legitime [Art. 912, CC].

If the heirs or devisees do not choose to avail themselves of the right granted
by the foregoing, 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 [Art. 913,
CC].

Note: Rule on Reduction of Legitimes (Shares)

Legitimate children Never reduced, they are primary
and preferred
Surviving spouse Never reduced
Illegitimate children Subject to reduction, pro rata,
without preference (you get the
remaining portion, divide it by the
number of illegitimate children)

RESERVA TRONCAL
The ascendant who inherits from his descendant any property which the
latter may have acquired by gratuitous title from another ascendant, 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 [Art. 891,
CC].

Concept of Reserva Troncal

1. A descendant (prepositus) inherits or acquires property from an
ascendant or from a brother or sister (origin or mediate source)
by gratuitous title.
2. The same property is inherited by another ascendant
(reservista) or is otherwise acquired by him by operation of law
from the said descendant (prepositus).
3. The said ascendant (reservista) must reserve the property for
the benefit of the relatives of the deceased descendant within
the third civil degree and who belong to the line from which the
said property came (reservatarios).

Parties: [Balane]
1. Origin or Mediate Source – either an ascendant of any degree of
ascent or a brother or sister of the Prepositus; responsible for the 1st
transfer
2. Prepositus – the first transferee of the reserved property
3. Reservista – an ascendant of the Prepositus other than the Origin or

335
 Mediate Source; the one obligated to reserve the property
4. Reservatarios – within the 3rd degree of consanguinity from the
Prepositus [Cabardo v. Villanueva, G.R. No. L-19003 (1922)]
belonging to the line from which the property came

Requisites for Reserva Troncal [Chua v. CFI, G.R. No. L-29901 (1977)]:
1. That the property was acquired by a descendant (Prepositus) from an
ascendant or from a brother or sister (Origin or Mediate Source) by
gratuitous title,
2. That the Prepositus died without (legitimate*) issue,
3. That the property is inherited by another ascendant (Reservista) by
operation of law, and
4. That there are relatives within the 3rd degree (Reservatarios)
belonging to the line from which said property came.

Note: Only legitimate descendants will prevent the property from being
inherited by the legitimate ascending line by operation of law [Balane]

Three transmissions involved: [Balane]

a. 1st transfer – by gratuitous title, from a person to his descendant,
brother or sister
b. 2nd transfer – by operation of law, from the transferee in the 1st
transfer to another ascendant. This creates the reserva.
c. 3rd transfer – from the transferee in the second transfer to the relatives

The 1st transfer from the origin does not make the property reservable.
The 1st transferee owns the property he receives in full and in fee simple. If
he sells the property, then there is no reserva that can be created. It is at this
point, however, that a reserva may ignite, because if the 1 st transferee has no
legitimate descendants, the property, by operation of law, will go back up to
his ascendant.

The 2nd transferee is the reservor.

The reservor can enjoy the property, but his title is subject to a double
resolutory condition.
So, if he dies, you need to ask 2 questions:
a. Does the prepositus have relatives?
b. Are these relatives qualified to inherit from the prepositus?

If the answers are YES: then a reserve occurs.

Note: The reservatarios actually inherit, by delayed intestacy, from the

prepositus.

Nature of the reservista’s right: [Edroso v. Sablan, G.R. No. 6878 (1913)]
1. The reservista’s right over the reserved property is one of ownership
2. The right of ownership is subject to a resolutory condition, i.e. the

336
existence of reservatarios at the time of the reservista's death
3. The right of ownership is alienable, but subject to the same resolutory
condition.
4. The reservista’s right of ownership is registrable.

Nature of reservatarios’ right: [Sienes v. Esparcia, G.R. No. L-12957

(1961)]
1. The reservatarios have a right of expectancy over the property.
2. The right is subject to a suspensive condition, i.e. the
expectancy ripens into ownership if the reservatarios survive
the reservistas.
3. The right is alienable but subject to the same suspensive
condition.
4. The right is registrable.

Reserva Minima vs. Reserva Maxima

1. The prepositus acquired property gratuitously from an ascendant, a
brother or sister
2. In his will, he institutes as his heir his ascendant (who is also a
compulsory heir) such that the ascendant receives half of the estate by
operation of law as legitime and the other half by testamentary disposition

Two Views
 Reserva Maxima: As much of the potentially reservable property as
possible must be deemed included in the part that passes by operation
of law (maximizing the scope of the reserva)
 Reserva Minima: every single property in the prepositus’s estate must
be deemed to pass, partly by will and partly by operation of law, in the
same proportion that the part given by will bears to the part not so
given [Balane]
Either view is defensible, but Reserva Minima finds wider acceptance
in the Philippines. [Balane]

Extinguishment of the Reserva

1. Loss of the reservable property
2. Death of the reservista
3. Death of all the relatives within the third degree belonging to the line
from which the property came
4. Renunciation by the reservatarios, but a future reservatario is not
bound by such renunciation → a conditional extinguishment.
5. Prescription, when the reservista holds the property adversely against
the reservatarios, as free from reservation

DISINHERITANCE
A compulsory heir may, in consequence of disinheritance, be deprived of his
legitime, for causes expressly stated by law [Art. 915, CC].

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Effect of Disinheritance
A disinherited heir is totally excluded from the inheritance. This means that
he forfeits not only his legitime, but also his intestate portion (if any), and
any testamentary disposition made in a prior will of the disinheriting testator
[Balane].

Requisites of a Valid Disinheritance

a. Heir disinherited must be designated by name or in such a manner as
to leave no room for doubt as to who is intended to be disinherited.
b. It must be for a cause designated by law.
c. It must be made in a valid will.
d. It must be made expressly, stating the cause in the will itself.
e. The cause must be certain and true, and must be proved by the
interested heir if the person should deny it.
f. It must be unconditional.
g. It must be total.

Note: 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 [Art. 917, CC].

Causes Common to Disinheritance and Unworthiness

Article 1032 enumerates five acts of unworthiness which likewise constitute
grounds to disinherit a compulsory heir.

The effect of the concurring causes of unworthiness and grounds for

disinheritance is as follows: If the testator failed to disinherit the offender,
the law nonetheless intervenes by excluding the offender from the
inheritance of the testator or the decedent by reason of unworthiness.

How do you reconcile unworthiness and disinheritance as regards

Restoration to Capacity?
Under the rules on Disinheritance – Under the rules on
Note: this is expressly made by Unworthiness –
testator Note: this is by operation of law
A subsequent reconciliation is enough Either:
1. written pardon, Or
2. subsequent will reconciliation is
not enough
Overlap of Rules: Remedy If he did not know the
1. If the offended party does not make cause
a will subsequent to the occurrence of ● Unworthiness stays
the cause
• Unworthiness sets in
• Written condonation is
necessary to restore

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 2. If the offended party makes a will
subsequent to the occurrence of the
cause
• If he knew the cause
• If he disinherits - Art 922
• If he institutes or pardons the
offender
• Restored to capacity
• If will silent – unworthiness
stays

Modes of Revocation of Disinheritance

a. Reconciliation [Art. 922, CC]
b. Subsequent institution of the disinherited heir
c. Nullity of the will which contains the disinheritance.

Note: The moment that testator uses one of the acts of unworthiness as a
cause for disinheritance; he thereby submits it to the rules on disinheritance.
Thus, reconciliation renders the disinheritance ineffective.

RECONCILIATION [ART. 922, CC]

Effect of Reconciliation between Offender and Offended Person:
● If no disinheritance has been made yet, the offended person will be
deprived of his right to disinherit.
● If disinheritance has been effected, it will be rendered ineffectual.

Rights of Descendants of Person Disinherited [Art. 923, CC]

Disinheritance gives rise to the right of representation in favor of the
children and descendants of the disinherited person with respect to his
legitime.

INEFFECTIVE DISINHERITANCE [Art. 918, CC]

Instances of Ineffective disinheritance:
a. There is no specification of the cause.
b. The cause is not proved.
c. The cause is not among those specified in the provisions.

Effect of Ineffective Disinheritance: if the disinheritance lacks one or other

of the requisites mentioned in this article, the heir in question gets his
legitime [Balane].

Ineffective Disinheritance Preterition

Person disinherited may be any Person omitted must be a
compulsory heir compulsory heir in the direct line
Only annuls the institution in so far Annuls the entire institution of
as it prejudices the person heirs
disinherited

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LEGACIES AND DEVISES

Legacy Devise
A gift of personal property given in a A gift of real property given in a
will will
It is bequeathed It is devised

Persons Charged with the Duty to Give Legacies and Devises in a Will
a. Compulsory heir, provided, their legitimes are not impaired [Art. 925,
CC]
b. Voluntary heir
c. Legatee or devisee can be charged with the duty of giving a sub-legacy or
subdevise but only to the extent of the value of the legacy or devise given
him [Art. 925, CC]
d. The estate represented by the executor or administrator, if no one is
charged with this duty to pay or deliver the legacy or devise in the will
If there is an administration proceeding, it constitutes a charge upon the
estate. If there is no administration proceeding, it is a charge upon the heirs.

Validity and Effect of Legacy or Devise

Legacy or Devise of a thing owned in part by the testator [Art. 929,
CC]
The legacy or devise shall be understood to be limited to such part or
interest
Exception If testator expressly declares that he
gives the thing in its entirety.

Legacy or Devise of a thing belonging to another [Art. 930, CC]

Testator erroneously believed that Void

the property belonged to him
The thing bequeathed afterwards Effective
becomes his by whatever title
Testator knew property did not Valid – estate must try to acquire
belong to him property or else give heir monetary
value.

Legacy of devise of a thing belonging to the legatee or devisee

The thing already belongs to the Ineffective
legatee or devisee at the time of the
execution of the will [Art. 932, CC
The thing is subject to an Valid only as to the interest or
encumbrance or interest of another encumbrance
person [Art. 932, CC]
Legatee or devisee subsequently Ineffective

340
 alienates the thing [Art. 933,CC]
After alienating the thing, the Ineffective
legatee or devisee subsequently
reacquires it gratuitously [Art. 933,
CC]
After alienating the thing, the Legatee or devisee can demand
legatee or devisee acquires it by reimbursement from the heir or
onerous title [Art. 933, CC] estate

Delivery of Legacy/Devise [Art. 951, CC]

The very thing bequeathed shall be delivered and not its value
a. With all its accessions and accessories
b. In the condition in which it may be upon the death of the testator
c. Legacies of money must be paid in cash

Effect of ineffective legacies or devises [Art. 956, CC]

In case of repudiation, revocation or incapacity of the legatee or devisee, the
legacy or devise shall be merged with the mass of the hereditary estate,
except in cases of substitution or accretion.

Revocation of Legacies and Devises [Art. 957, CC]

a. Testator transforms the thing such that it does not retain its original form
or denomination
b. Testator alienates the thing by any title or for any cause. Reacquisition of
the thing by the testator does not make the legacy or devise valid, unless it is
effected by right of repurchase.
c. Thing is totally lost during the lifetime or after the death of the testator
d. Other causes: nullity of will, noncompliance with suspensive condition,
sale of the thing to pay the debts of the deceased during the settlement of his
estate.

SUMMARY OF LEGITIMES OF COMPULSORY HEIRS

Legend: LC – legitimate children
ILC – illegitimate children
SS – surviving Spouses
LP – legitimate parents
ILP – illegitimate parents
Survivin LC and SS ILC LP and IL
g Descendants Ascendants P
Relatives
LC alone ½ of the estate
in equal
portions
1 LC, ½ of the estate ¼ of the
SS estate taken
from the

341
 free portion
2 or ½ of the estate Same
more in equal portion as
LC, portions 1 LC
SS
LC, ½ of the estate ½ share of 1
ILC in equal LC
portions
1 LC, ½ ¼ ½ share of 1
SS, (preferred LC
ILC over ILC)
N.B. May
suffer
reduction
pro rata
because
share of SS
is given
preference
2 or more ½ of the estate Same as ½ share of 1
LC, SS, in equal share of 1 LC
ILC portion s LC
LP alone ½
LP, ¼ in equal ½
ILC portions
LP, 1/8 ¼ ½
SS,
ILC
ILC ½ in equal
alon portions
e
ILC, 1/3 1/3 in equal
SS portions
SS Exception:
alon marriage in
e articulo
mortis and
testator dies
within 3
months
from
marriage –
1/3
Exception
to the

342
 exception:
Have been
living
together as
husband
and wife
for more
than 5 year
s–½
ILP alone ½
ILP, ¼ ¼
SS

Summary of Causes of Disinheritance

Grounds for Children and Parents and Spouse Unworthines
disinheritance Descendants Ascendants [Art. s [Art. 1032,
[Art. 919, [Art. 920, 921 CC]
CC] CC] CC]

Guilty or ✓ ✓ ✓ ✓
Convicted of
Attempt Against
the Life of the
Testator,
Spouse,
Ascendant or
Descendant
Accused ✓ ✓ ✓ ✓
Testator or
Decedent of
Crime Punish
able by
Imprisonment of
6 years or more,
and Found
Groundless or
False
Causes testator ✓ ✓ ✓ ✓
or decedent to
Make a Will or
Change one by
Fraud, Violence,
Intimidation, or
Undue Influence
Unjustified ✓ ✓ ✓

343
Refusal to
Support Testator
Convicted of ✓ ✓ ✓
Adultery or
Concubinage
with Spouse of
Testator or
Decedent
Maltreatment of ✓
testator by
Word andDeed
Leading a ✓
Dishonorable or
Disgraceful Life
Conviction of ✓
Crime which
carries
The penalty of
Civil
Interdiction
Abandonment ✓ ✓
of Children or
Inducing
Children to Live
Corrupt and
Immoral Life or
Against
Attempted
Virtue
Loss of Parental ✓ ✓
Authority
Attempt by One ✓
Parent Against
the Life of the
Other Unless
there is
Reconciliation
Between Parents
Spouse Has ✓ ✓
Given Cause for
Legal
Separation
Failure to ✓
Report Violent
Death of

344
 Decedent
Within One
Month Unless
Authorities
Have Already
Taken Action
Force, Violence, ✓
Intimidation, or
Undue Influence
to Prevent
Another from
Making a Will
or Revoking
One Already
Made or Who
Supplants or
Alters the
Latter’s Will
Falsifies or ✓
Forges
Supposed Will
of Decedent

Different Objects of Legacies and Devises[Art. 934-944, CC]

Objects of Effect
Legacy or Devise
Thing pledged or ● Estate is obliged to pay the debt
mortgaged to ● Other charges pass to the legatee or devisee
secure a debt
Credit or ● Effective only as regards the credit or debt existing
remission or at the
release of a debt time of the testator’s death
● Legacy lapses if the testator later brings action
against the debtor
● If generic, comprises all credits/debts existing at
time of execution of will
Thing pledged by ● Only the pledge is extinguished; the debt remain
debtor to a ● Shall not be applied to his credit unless the testator
creditor so declares
Order of payment ● If testator does not really owe the debt, the
of a debt disposition is void
● If the order is to pay more than the debt, the excess
is not due
● This is without prejudice to the payment of natural
obligations

345
Alternative legacies ● The choice is with the heir, or the executor or
and administrator
devises ● If the heir, legatee or devisee dies, the right
passes to their heirs
● Once made, the choice is irrevocable
Legacy of generic ● Legacy is valid even if there are no things of the
personal same kind in the estate
property or ● Devise of indeterminate real property valid only
indeterminate if there are immovable property of the same kind
real property in the estate
● The choice belongs to the heir, legatee or
devisee or the executor or administrator
Legacy of education ● Lasts until the legatee is of age or beyond the
age of majority in order that he may finish some
professional, vocational or general course
provided he pursues his course diligently
● If testator did not fix the amount, it is fixed in
accordance with the social standing and
circumstances of the legatee and the value of the
estate
Legacy of support ● Lasts during lifetime of legatee
● If the testator used to give the legatee a sum of
money for support, give the same amount unless it
is markedly disproportionate to the estate
● If testator did not fix the amount, it is fixed in
accordance with the social standing and
circumstances of the legatee and the value of the
estate

Order of Payment in Case the Estate Is Not Sufficient to Cover All the
Legacies and Devises
Art. 911: Order or Preference Art. 950
● Legitime of compulsory heirs ● Remuneratory legacy/devise
● Donations inter vivos ● Preferential legacy/devise
● Preferential legacies or devises ● Legacy for support
● All other legacies or devises pro ● Legacy for education
rata ● Legacy/devise of specific,
determinate thing which forms a part
of the estate
● All others pro rata
Application
● When the reduction is necessary ● When there are no compulsory
to preserve the legitime of heirs and the entire estate is
compulsory heirs from impairment distributed by the testator as legacies
whether there are donations inter or devises; or

346
 vivos or not; or ● When there are compulsory heirs
● When, although, the legitime has but their legitime has already been
been preserved by the testator provided for by the testator and there
himself there are donations inter are no donations inter vivos.
vivos.
Art. 950, CC governs when the
Art. 911, CC governs when there is question of reduction is exclusively
a conflict between compulsory among legatees and devisees
heirs and the devisees and legatees. themselves.

C. LEGAL OR INTESTATE SUCCESSION

1. General provisions
Intestacy – that which takes place by operation of law in default of
compulsory and testamentary succession. Not defined in the Civil Code.

Legal succession is a mode of transmission mortis causa which takes place

in the absence of the expressed will of the decedent embodied in a testament
[Tolentino].

Instances when Legal or Intestate

Succession operates [Art. 960, CC]
a. If a person dies without a will, or with a void will, or will has
subsequently lost its validity
b. When the will does not institute an heir
c. Upon the expiration of term, or period of institution of heir
[Balane]
d. Upon fulfillment of a resolutory condition attached to the
institution of heir, rendering the will ineffective [Balane]
e. When the will does not dispose of all the property belonging to
the testator. Legal succession shall take place only withrespect
to the property which the testator has not disposed (mixed
succession)
f. If the suspensive condition attached to the institution of the heir
does not happen or is not fulfilled
g. If the heir dies before the testator
h. If the heir repudiates the inheritance, there being no
substitution, and no right of accretion takes place
i. When the heir instituted is incapable of succeeding, except in
cases provided in the Civil Code
j. Preterition – Intestacy may be total or partial depending on
whether or not there are legacies or devises [Balane]

Note: In all cases where there has been an institution of heirs, follow the
ISRAI order:
a. If the Institution fails, Substitution occurs.

347
 b. If there is no substitute, the right of Representation applies in the
direct descending line to the legitime if the vacancy is caused by
predecease, incapacity, or disinheritance.
c. The right of Accretion applies to the free portion when the requisites
in Art. 1016 are present.
d. If there is no substitute, and the right of representation or accretion is
not proper, the rules on Intestate succession shall apply.

FUNDAMENTAL PRINCIPLES IN INTESTATE SUCCESSION

Rule of Preference between Lines

• Those in the direct descending line shall exclude those in the direct
ascending and collateral lines;
• Those in the direct ascending line shall, in turn, exclude those in the
collateral line.

Rule of Proximity: The relative nearest in degree excludes the farther one
[Art. 962(1), CC], saving the right of representation when it properly takes
place.

Rule of Equal Division

General Rule: The relatives who are in the same degree shall inherit in equal
shares [Arts. 962(2), 987 and 1006, CC].

Exceptions [Balane]
1. Rule of preference between Lines
2. Distinction between legitimate and illegitimate filiation. The ratio
under the present law is 2:1 [Art. 983, in relation to Art. 895 as
amended by Art. 176, FC].
3. Rule of division by line in the ascending line [Art. 987 (2), CC]
4. Distinction between full-blood and half-blood relationship among
brothers and sisters, as well as nephews and nieces [Art. 1006 and
1008, CC]
5. Right of representation

Rule of Barrier between the legitimate family and the illegitimate family
(the iron-curtain rule): The illegitimate family cannot inherit by intestate
succession from the legitimate family and vice-versa. [Art. 992, CC]

Rule of Double Share for full blood collaterals: When full and half-blood
brothers or sisters, nephews or nieces, survive, the full blood shall take a
portion in the inheritance double that of the half-blood [Arts. 895 and 983,
CC].

Note:
a. If one of the legitimate ascendants, illegitimate parents, legitimate
children or illegitimate children survives, the brother, sisters,

348
 nephews, and nieces (BSNN) are excluded.
b. If one of the legitimate ascendants, illegitimate parents, legitimate
children, illegitimate children or surviving spouse survives, the other
collateral relatives and the state are excluded.
c. If any of the heirs concur in legitimes, then they also concur in
intestacy.

a. Relationship
PROXIMITY OF RELATIONSHIP: determined by the number of
generations. Each generation forms one degree [Art. 963, CC].

Note: It is important to distinguish between direct and collateral, as the

direct has preference over the collateral.

In a line, as many degrees are counted as there are generations [Art. 966,
CC].

Note: Descending line is preferred over ascending.

Blood relationship is either full or half-blood [Art. 967, CC].

Note: As among brothers and sisters and nephews and nieces, there is a 2:1
ratio for fullblood and half-blood relatives. Direct relatives are preferred.
But this distinction does not apply with respect to other collateral relatives.

Incapacity [Art. 968, CC]

General rule: 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.

Exception: When the right of representation should take place.

Note: This accretion in intestacy takes place in case of predecease,

incapacity, or renunciationamong heirs of the same degree. The relatives
must be in the same relationship because of the Rule of Preference of Lines.

REPUDIATION [Arts. 968-969, CC]

There is no right of representation in repudiation. If the nearest relative/s
repudiates the inheritance, those of the following degree shall inherit in their
own right.

In case of repudiation by all in the same degree, the right of succession

passes on the heirs in succeeding degrees: descending line first, ascending
line next, and collateral line next [Balane].

Adoption [Art. 189, FC]

In adoption, the legal filiation is personal and exists only between the
adopter and the adopted. The adopted is deemed a legitimate child of the
adopter, but still remains as an intestate heir of his natural parents and other

349
blood relatives.

Note: Section 16 of the Domestic Adoption Act (RA 8552) provides that 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).”

b. Right of representation
Representation – 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 [Art. 970, CC]

Effect of representation
The representative heir acquires the rights which the person represented
would have if he were living or if he could have inherited.

When it occurs
Representation is allowed with respect to inheritance conferred by law
(legitime and intestate based on Art. 923)

It occurs only in the following instances: (DIP)

a. Predecease of an heir
b. Incapacity or unworthiness
c. Disinheritance [Art. 923, CC]

Note: There is no representation to a devise or a legacy.

A renouncer can represent, but cannot be represented. Rationale is found in
Art. 971 which states that “The representative does not succeed the person
represented but the one whom the person represented would have
succeeded.”

Representation in the Direct Descending Line

Representation takes place ad infinitum in the direct descending line but
never in the direct ascending line [Art. 972, CC].
General rule: Grandchildren inherit from the grandparents by right of
representation, if proper.

Exception: Whenever all the children repudiate, the grandchildren inherit in

their own right because representation is not proper [Art. 969, CC].

Representation in Collateral Line

In the collateral line, representation takes place only in favor of the children
of the brothers or sisters (i.e., nephews and nieces) whether of the full or
half-blood [Art. 972, CC] and only if they concur with at least one.

2. Order of intestate succession

Decedent is a Decedent is an Decedent is an

350
Legitimate Child Illegitimate Child Adopted Child
Legitimate children or Legitimate children or Legitimate children or
descendants (LCD) descendants (LCD) descendants (LCD)
Legitimate parents or Illegitimate children or Illegitimate children or
ascendants (LPA) descendants (LPA) descendants (ICD)
Illegitimate children or Illegitimate parents Legitimate or
descendants (ICD) (IP) illegitimate parents,
or legitimate
ascendants,
adoptive parents
Surviving spouse (SS) Surviving spouse (SS) Surviving spouse (SS)
Brothers and sisters, Brothers and sisters, Brothers and sisters,
nephews, nieces
(BS/NN)
Legitimate collateral State State
relatives within the 5th
degree (C5)
State

RULES OF EXCLUSION AND CONCURRENCE IN INTESTATE

SHARES

Intestate Heirs Excludes Excluded By Concurs With

LC + LD Ascendants, No one SS + ILC
Collaterals and
State
ILC + D ILP, Collaterals No one SS, LC, LP
and
State
LP + LA Collaterals and LC ILC + SS
State
ILP Collaterals and State LC and SS
State ILC
SS Collaterals other No one LC, ILC, LP,
than ILP,
siblings, nephews Siblings,
and Nephews,
nieces, State Nieces
Siblings, All other LC, ILC, LP, SS
Nephews, collaterals ILP
Nieces and State
Other collaterals Collateral more LC, ILC, LP, Collaterals in the
within remote ILP and same
5th degree in degree and SS Degree

351
 State
State No one Everyone No one

Note: In partial intestacy, the testamentary dispositions can reduce the shares
of intestate heirs, provided that their legitimes, if they are also compulsory
heirs, are not impaired. More specifically:

a. The law of legitimes must be brought into operation in partial intestacy.

b. If among the concurring intestate heirs there are compulsory heirs whose
legal or intestate portions exceed their respective legitimes, the amount of
the testamentary disposition must be deducted from the disposable portion,
to be borne by all the intestate heirs in the proportions that they are entitled
to receive from such disposable portion as intestate heir.

c. If the legal or intestate share of a compulsory heir is equal to his legitime,

then the amount of the testamentary disposition must be deducted only from
the legal or intestate shares of the others.

d. If the testamentary dispositions consume the entire disposable portion,

then the intestate heirs who are compulsory heirs will get only their
legitimes, and those who are not compulsory heirs will get nothing
[Tolentino].

OUTLINE OF INTESTATE SHARES

a. Legitimate ● Divide entire estate equally among all

children only legitimate children [Art. 979, CC]
● Legitimate children include an adopted child.
b. Legitimate ● Divide entire estate such that each illegitimate
children and child gets ½ of what a legitimate child gets [Art.
Illegitimate children 983, CC and Art. 176, FC]
● Ensure that the legitime of the legitimate
children are first satisfied.
c. Legitimate ● Divide entire estate equally between the
children and legitimate children and the surviving spouse, the
surviving spouse latter deemed as one child. The same rule holds
where there is only one child
d. Legitimate ● Divide the entire estate such that the surviving
children, spouse is deemed one legitimate child and each
Surviving spouse, illegitimate child getting ½ of what the legitimate
and child gets. [Art. 996, CC and Art. 176, FC]

352
Illegitimate children ● Ensure that the legitime of the legitimate
children and the spouse are first satisfied.
e. Legitimate parents ● Divide the entire estate equally [Art. 985, CC].
only
f. Legitimate ● Divide the entire estate equally but with the
ascendants only observance of the rule of division by line [Art.
(excluding parents) 987, CC].
g. Legitimate parents ● Legitimate parents get ½ of the estate,
and illegitimate children get the other ½ [Art. 991,
illegitimate children CC].
h. Legitimate ● Legitimate parents get ½ of the estate; The
parents and surviving spouse gets the other ½ [Art. 997, CC].
surviving spouse
i. Legitimate parents, ● Legitimate parents get ½ of the estate;
surviving spouse and surviving spouse and the illegitimate child each
illegitimate children get ¼ each, the latter to share among themselves
if more than one [Art. 1000, CC].
j. Illegitimate ● Divide the entire estate equally [Art. 988, CC].
children only
k. Illegitimate ● Illegitimate children get ½ of the estate; the
children and surviving spouse gets the other ½ [Art. 998, CC].
surviving spouse
l. Surviving spouse ● Entire estate goes to the surviving spouse [Art.
only 994/995, CC].
m. Surviving spouse ● Illegitimate parents get ½ and the spouse gets
and the other ½ [by analogy with Art. 997, CC].
illegitimate parents
n. Surviving spouse ● Surviving spouse gets ½ of the estate, while the
and rest gets the other ½ with the nephews and nieces
legitimate brothers inheriting by representation if proper [Art. 1001,
and CC].
sisters, nephews and
nieces
o. Surviving spouse ● Surviving spouse gets ½ of the estate while the
and rest gets the other ½ with the nephews and nieces
illegitimate brothers inheriting by representation, if proper; Note that
and all the other relatives should be “illegitimate”
sisters, nephews and because of the iron-curtain rule [Art. 994, CC].
nieces
p. Illegitimate ● Entire estate goes to the illegitimate parents
parents only [Art. 993, CC].
q. Illegitimate ● Illegitimate parents are excluded and do not
parents and inherit. For the rule on the respective shares of the
children of any kind children, see numbers 1, 2 or 10, whichever is
(whether legitimate applicable.

353
 or
illegitimate child)
r. Legitimate ● Divide the entire estate such that full-blood
brothers and brothers/sisters gets a share double the amount of
sisters only a half-blood brother or sister [Art. 1004 and 1006,
CC].
s. Legitimate ● Divide the entire estate observing the 2 is to 1
brothers and ratio for full and half-blood relationships with
sisters, nephews and respect to the brothers and sisters, with the
nieces nephews and nieces inheriting by representation,
if proper [Art. 1005 & 1008, CC].
t. Nephews and ● Divide the entire estate per capita, observing
nieces only the 2 is to 1 ratio [Arts. 975 and 1008, CC].
u. Other collaterals ● Divide entire estate per capita. Collateral
[Arts. 1009 relatives must be with the 5th degree of
and 1010] consanguinity.
● Note: the nearer relative excludes the more
remote relatives.
v. State ● If there are no other intestate heirs, the State
inherits the entire estate through escheat
proceedings [Art. 1011, CC].

D. PROVISIONS COMMON TO TESTATE AND INTESTATE

SUCCESSION
1. Right of accretion
Definition of Accretion [Art. 1015, CC]
It 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 one who renounces
or cannot receive his share or who died before the testator is added or
incorporated to that of his co-heirs, codevisees, or co-legatees.

Basis
The right of accretion is based upon the presumed will of the decedent.
Thus, the testator can expressly provide that there shall be no accretion
among persons who would otherwise be entitled thereto. Conversely, the
testator may validly provide for accretion in a case where no accretion
would take place under the provisions of the law [Tolentino].

Requisites [Tolentino]
a. Unity of object and plurality of subjects (two or more persons are
called to the same inheritance or same portion thereof)
b. Vacancy of share (one of the heirs dies before the testator, or
renounces the inheritance, or is incapacitated)

When does Accretion Occur?

354
Accretion happens when there is repudiation, incapacity, or predecease of
an heir.

It is the mechanism where the share of an heir is increased by vacant shares

vacated by heirs who cannot inherit for various reasons.

(Rationale: the decedent intended to give the property to nobody but the co-
heirs.)

There can only be accretion if there is an institution of heirs with respect to

specific properties [Art. 1016, CC]. In other words, both heirs were called to
inherit the same whole.
If there was “earmarking” – there can be no accretion.
• What is “earmarking?” – when the whole has been subdivided into
specific portions
Ex: Heir #1 was called to inherit the southern part of Plot A, and Heir #2
was called to inherit the northern part of Plot A.

Among compulsory heirs, there can only be accretion with respect to the free
portion. There can be no accretion with respect to the legitimes [Arts. 1021
and 1018, CC].

The heirs to whom the portion goes by the right of accretion take it in the
same proportion that they inherit [Art. 1019, CC].

Exceptions [Balane]
a. In testamentary succession, if the testator provides otherwise
b. If the obligation is purely personal, and hence intransmissible

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 [Art. 1020, CC].
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 [Art. 1022, CC].

Accretion shall also take place among devisees, legatees and usufructuaries
under the same conditions established for heirs [Art. 1023, CC]

Effect of Predecease, Incapacity, Disinheritance or Repudiation

Cause of Testamentary Succession Intestate
Vacancy Legitime Free Portion Succession
Predecease Representation Accretion Representation
Intestate Intestate Intestate
Succession Succession Succession
Incapacity Representation Accretion Representation

355
 Intestate Intestate Intestate
Succession Succession Succession
Disinheritance Representation - -
Intestate
Succession

2. Capacity to succeed by will or intestacy

Requisites for Capacity to Succeed by Will or by Intestacy: [Art. 1024 –
1025, CC]
a. The heir, legatee or devisee must be living or in existence at the moment
the succession opens; [Art. 1025, CC] and
b. He must not be incapacitated or disqualified by law to succeed [Art. 1024,
par.1, CC].

PERSONS INCAPABLE OF SUCCEEDING [Arts. 1027, 739, 1032,

CC]
Based on undue influence or interest [Art. 1027, CC]
a. Priest who heard the last confession of the testator during his last
illness, or the minister of the gospel who extended spiritual aid to him
during the same period;
b. Individuals, associations and corporations not permitted by law to
inherit;
c. 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;
except if the guardian is his ascendant, descendant, brother, sister, or
spouse;
d. Relatives of the 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;
e. Attesting witness to the execution of a will, the spouse, parents, or
children, or anyone claiming under such witness, spouse, parents, or
children;
f. Physician, surgeon, nurse, health officer or druggist who took care of
the testator during his last illness.

Based on morality or public policy [Arts. 739 and 1028, CC]

a. Those made in favor of a person with whom the testator was guilty of
adultery or concubinage at the time of the making of the will.
b. Those made in consideration of a crime of which both the testator and
the beneficiary have been found guilty.
c. Those made in favor of a public officer or his spouse, descendants and
ascendants, by reason of his public office.

Based on acts of unworthiness [Art. 1032, CC]

The following are incapable of succeeding by reason of unworthiness:

356
 a. Parents who have abandoned their children or induced their daughters
to lead a corrupt or immoral life, or attempted against their virtue;
b. Any person who has been convicted of an attempt against the life of
the testator, his or her spouse, descendants, or ascendants;
c. 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;
d. 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;
e. Any person convicted of adultery or concubinage with the spouse of
the testator;
f. Any person who by fraud, violence, intimidation, or undue influence
should cause the testator to make a will or to change one already
made;
g. 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;
h. Any person who falsifies or forges a supposed will of the decedent.

Pardon of Acts of Unworthiness

Express Implied
Made by the execution of a Effected when the testator makes a
document or any writing in which will instituting the unworthy heir
the decedent condones the cause of with knowledge of the cause of
incapacity incapacity
Cannot be revoked Revoked when the testator revokes
the will or the institution

Effect of Pardon
Once the act of unworthiness has been pardoned, whether expressly or
tacitly, the heir is restored to full capacity to succeed the decedent, as if the
cause of unworthiness had never existed.

Unworthiness vs. Disinheritance

Unworthiness Disinheritance
Unworthiness renders a person Disinheritance is the act by which a
incapable of succeeding to the testator, for just cause, deprives a
succession, whether testate or compulsory heir of his right to the
intestate legitime [Art. 815, CC]

Determination of Capacity [Tolentino]

General Rule: At the death of the decedent [Art. 1034, CC]

357
Exceptions
a. Those falling under 2, 3, and 5 of Art. 1032 – when the final judgment is
rendered
b. Those falling under 4 of Art. 1032 – when the month allowed for the
report expired
c. If the institution is conditional – when the condition is complied with

3. Acceptance and repudiation of the inheritance

Definition of Acceptance
The act by which the person called to succeed by universal title either by the
testator or by law manifests his will of making his own the universality of
the rights and obligations which are transmitted to him [Tolentino].

Definition of Repudiation
The manifestation by an heir of his desire not to succeed to the rights and
obligations transmitted to him [Tolentino].

Requisites [Art. 1043, CC]

a. Certainty of death of the decedent
b. Certainty of the right to the inheritance

FORMS OF ACCEPTANCE [Arts. 1049 – 1050, CC]

a. Express Acceptance – one made in a public or private document
[Art. 1049, par. 1, CC]
b. Tacit Acceptance – one resulting from acts by which the intention to
accept is necessarily implied or from acts which one would have no
right to do except in the capacity of an heir.
c. Implied Acceptance - 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 [Art. 1057, CC].

An inheritance is deemed accepted:

a. If the heir sells, donates, or assigns his right to a stranger, or to his co-
heirs, or to any of them – the heir must first accept the inheritance
before he can dispose of it.
b. If the heir renounces the same, even though gratuitously, for the
benefit of one or more of his co-heirs – this is actually a donation. The
heir must first accept the inheritance before he can donate it.
c. If the heir renounces it for a price in favor of all his co-heirs
indiscriminately – this is actually an onerous disposition. The heir
must first accept the inheritance before he can dispose of it.

Note: But if the renunciation should be gratuitous, and in favor of all the co-
heirs (to whom the portion renounced should devolve by accretion), the

358
inheritance shall not be deemed as accepted [Art. 1050, CC]. This is a true
case of renunciation.

Forms of Repudiation [Art. 1051, CC]

a. In a public instrument acknowledged before a notary public; or
b. In an authentic document – equivalent of an indubitable writing or a
writing whose authenticity is admitted or proved; or
c. By petition presented to the court having jurisdiction over the
testamentary or intestate proceeding

Heirs in Two Capacities [Art. 1055, CC]

a. If a person is called to the same inheritance as an heir by will and by law
and he repudiates the inheritance in his capacity as a testamentary heir, he
will be considered to have also repudiated the inheritance as a legal heir.
b. If he repudiates it as a legal heir, without knowledge of his being a
testamentary heir, he may still accept it in the latter capacity.

Irrevocability of Acceptance or Repudiation

General Rule: The acceptance or repudiation of an inheritance, once made,
is irrevocable and cannot be impugned.

Exceptions
a. When the acceptance or repudiation suffers from any of the vices which
annul consent; and
b. When an unknown will appears [Art. 1056, CC]

4. Collation
Concept of Collation
To collate is to bring back or to return to the hereditary mass in fact or by
fiction, property which came from the estate of the decedent during his
lifetime, by donation or other gratuitous title but which the law considers as
an advance from the inheritance [Art. 1061, CC].

It is the act by virtue of which, the compulsory heir who concurs with other
compulsory heirs in the inheritance brings back to the common hereditary
mass the property which they may have received from the testator so that a
division may be effected according to law and the will of the testator.

In reducing inofficious donations, the last to be donated should be the first to

be reduced.

Rationale for collation: If donations inter vivos will not be collated, then
the rule on legitimes shall be circumvented or disregarded.

OPERATIONS RELATED TO COLLATION [Tolentino]

a. Collation – adding to the mass of the hereditary estate the value of the
donation or gratuitous disposition.

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 b. Imputing or Charging – crediting the donation as an advance on the
legitime (if the donee is a compulsory heir) or on the free portion (if
the donee is a stranger, i.e., not a compulsory heir). [Balane at 522]
c. Reduction – determining to what extent the donation will remain and
to what extent it is excessive or inofficious.
d. Restitution – returning or the act of payment of the excess to the
mass of hereditary estate.

Persons Obliged to Collate

General rule: Compulsory heirs

Exceptions
a. When the testator should have so expressly provided [Art. 1062, CC] – in
which case you collate against the disposable free portion because there
MUST be collation.
b. When the compulsory heir should have repudiated his inheritance [Art.
1062, CC]
c. When there is only ONE compulsory heir Grandchildren who survive with
their uncles, aunts, or first cousins and inherit by right of representation [Art.
1064, CC]

Note: Grandchildren may inherit from their grandparents in their own right,
i.e., as heirs next in degree, and not by right of representation if their parent
repudiates the inheritance of the grandparent, as no living person can be
represented except in cases of disinheritance and incapacity. In this case, the
grandchildren are not obliged to bring to collation what their parent has
received gratuitously from their grandparent.

What to Collate
a. Any property or right received by gratuitous title during the testator’s
lifetime [Art. 1061, CC]
b. All that they may have received from the decedent during his lifetime
[Art. 1061, CC]
c. 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 [Art. 1068, CC]
d. 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 [Art. 1069, CC]
Note: Only the value of the thing donated shall be brought to collation.

PROPERTIES NOT SUBJECT TO COLLATION

Absolutely no collation:

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Expenses for support, education (only elementary and secondary), medical
attendance, even in extraordinary illness, apprenticeship, ordinary
equipment, or customary gifts [Art. 1067, CC]

Generally not imputable to legitime/ cannot be collated, subject to

exceptions:
a. Expenses incurred by parents in giving their children professional,
vocational or other career unless the parents so provide, or unless they
impair the legitime [Art. 1067, CC]
b. Wedding gifts by parents and ascendants, consisting jewelry, clothing and
outfit, except when they exceed 1/10 of the sum disposable by will [Art.
1070, CC]
c. 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 [Art.
1066, CC]

Note: 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 [Art. 1065, CC].

Wedding Gifts
The wedding gift under Article 1070 of the Civil Code may be compared to
a donation propter nuptias as follows:

Donation Propter Nuptias Wedding Gift

The object is not specified. It could The object is jewelry, clothing or
be anything of value. outfit.
The donor is not specified. He or The donor must be a parent or
she could be anyone with capacity ascendant of the donee.
to dispose property.
If given by a parent, the donee is The donee is either a child or a
either thechild of the donor, or the descendant of the donor.
future spouse of the child of the
donor, or both of them jointly.
The gift must be given before the The gift may be given at any time,
celebration of the marriage. either before or after the celebration
of the marriage.
The donation is governed by the The gift is noncollationable to the
rules of ordinary donations, except extent of one-tenth of the disposable
as modified by the provisions of the free portion of the hereditary estate
Family Code. Thus, a donation of the donor.
propter nuptias given by a parent to
a child is collationable in full,
except if the donor declared it to be
noncollationable

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5. Partition and distribution of estate
Definition of Partition: Separation, division and assignment of a thing
held in common among those to whom it may belong.

What can be divided?

The thing itself or its value may be divided [Art. 1079, CC].

Before Partition: Whole estate of the decedent is owned in common by the

heirs [Art. 1078, CC].

What acts are deemed partition?

Every act which is intended to put an end to indivision among heirs and
legatees or devisees is deemed a partition, although it should purport to be a
sale, an exchange, a compromise, or any other transaction [Art. 1082, CC].

A void partition may be valid if:

1. The will was in fact a partition
2. The beneficiaries of the void will were legal Heirs

The titles of acquisition or ownership of each property shall be delivered to

the co-heir to whom said property has been adjudicated [Art. 1089, CC].

JUDICIAL vs. EXTRAJUDICIAL PARTITION

Judicial Extra-judicial
Partition done by Partition made by the decedent himself by an act
Court pursuant to an inter vivos or by will or by a third person entrusted
Order of by the decedent or by the heirs themselves [Paras].
Distribution which
may or may not be Partition Inter Vivos: It is one that merely allocates
based on a project of specific items or pieces of property on the basis of
partition. the pro-indiviso shares fixed by law or given under
the will to heirs or successors [Art. 1080, CC].

Who may 1. The Decedent, during his lifetime by an act

effect inter vivos or by will [Art.1080, CC]
Partition? 2. The decedent’s heirs [Art.1083, CC]
3. A competent court [Art. 1083, CC]
4. A third person not an heir designated by the
decedent [Art.1081, CC]
Who may 1. Compulsory heir
Demand 2. Voluntary heir upon fulfillment of condition, if any
partition? [Art. 1084, CC]
3. Legatee or devisee
4. Any person who has acquired interest in the estate
When 1. When expressly prohibited by the testator for a

362
 Partition period not exceeding 20 years [Art. 1083, CC]
cannot be 2. When the co-heirs agreed that the estate shall not
demanded? be divided for a period not exceeding 10 years,
renewable for another 10 years [Art. 494, CC]
3. When prohibited by law
4. When to partition the estate would render it
unserviceable for the use for which it is intended
Prohibition to 1. The prohibition to partition for a period not
Partition exceeding 20 years can be imposed even on the
legitime.
2. If the prohibition to the partition is for more than
20 years, the excess is void.
3. Even if a prohibition is imposed, the heirs by
mutual agreement can still make the partition.

Effects of Inclusion of Intruder in Partition [Art. 1108, CC]

1. Between a true heir and several mistaken heirs – partition is VOID
2. Between several true heirs and a mistaken heir – transmission to mistaken
heir is void
3. Through error or mistake, share of true heir is allotted to mistaken heir –
partition shall not be rescinded unless there is bad faith or fraud on the part
of the other persons interested, but the latter shall be proportionately obliged
to pay the true heir of his share. The partition with respect to the mistaken
heir is void [Sempio-Dy].

Right of Redemption in Partition

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 [Art. 1088, CC].

Strangers – those who are not heirs on the succession.

Legal Redemption by Co-Heir;

Requisites
1. That there are several heirs of the common inheritance;
2. That one of them sells his hereditary rights;
3. That the sale is made to a stranger, and before the partition has been
made;
4. That one or more of the co-heirs demand the repurchase within a
period of one month, counted from the time he or they were notified
in writing of the sale; and
5. That the buyer is reimbursed the price of the sale [Garcia v.
Calaliman, G.R. No. L- 26855 (1989)].
Note: The redemption can be exercised only by a co-heir.

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EFFECTS OF PARTITION
Effect: A partition legally made confers upon each heir the exclusive
ownership of the property adjudicated to him [Art. 1091, CC].
No partition shall be construed so as to prejudice, defeat, or destroy the right
or title of any person claiming the real estate involved in the action for
partition by title under any other person, or by title paramount to the title of
the parties among whom the partition may have been made [Rule 69, Sec.
12, ROC].

Warranty: 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 [Art. 1092, CC].

Reciprocal obligation of warranty: shall be proportionate to the respective

hereditary shares of the co-heirs.

In case of insolvency of any of the co-heirs:

Other co-heirs shall be liable for his part in the same proportion, deducting
the part corresponding to the one who should be indemnified.

RIGHT OF ACTION FOR REIMBURSEMENT:

Those who pay for the insolvent heir shall have a right of action against him
for reimbursement, should his financial condition improve [Art. 1093, CC].

Prescription period for action to enforce warranty among the co-heirs:

Ten (10) years from the date the right of action accrues [Art. 1094, CC].

If a credit should be assigned as collectible: 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 [Art. 1095, CC].

Prescription period of the warranty of the solvency of the debtor: Can

only be enforced during the five (5) years following the partition.

Warrant of bad debts

General Rule: Co-heirs do not warrant bad debts, if so known to, and
accepted by the distributee.

Exception: 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 [Art. 1095, CC].

Cessation of Obligation of warranty among co-heirs: The obligation of

warranty among co-heirs shall cease in the following cases:
1. 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.

364
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 [Art. 1096, CC].

RESCISSION AND NULLIFICATION OF PARTITION

Causes for Rescission or Annulment

1. A partition may be rescinded or annulled for the same causes as
contracts [Art. 1097, CC].
2. A partition, judicial or extrajudicial, 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 (¼) than the share to
which he is entitled, considering the value of the things at the
time they were adjudicated [Art. 1098, CC].
 This article applies only to cases of partition among-coheirs
 Lesion is the injury suffered in consequence of inequality of situation
by one party who does not receive the full equivalent for what she
gives in a sale or any commutative contract
3. 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 be
reasonably presumed that the intention of the testator was
otherwise [Art. 1099, CC].
4. Preterition of a compulsory heir in the partition [Art. 1104,
CC]:
 Partition shall not be rescinded unless bad faith or fraud on the part of
other heirs is proved.
 The culpable heirs shall share in the damages of the prejudiced
compulsory heir proportionately.
5. A partition which includes a person believed to be an heir, but
who is not, shall be void only with respect to such person [Art.
1105, CC].

Rescission on account of lesion

PRESCRIPTION: After four (4) years from the time the partition was
made [Art. 1100, CC].
OPTION OF HEIR SUED:
a. Indemnifying the plaintiff for the loss; or
b. Consenting to a new partition

Indemnity may be made:

1. By payment in cash or
2. By the delivery of a thing of the same kind and quality as that awarded to
the plaintiff.

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If option of consenting to a new partition was chosen: Shall affect neither
those who have not been prejudiced nor those who have not received more
than their just share [Art. 1101, CC].

Who cannot maintain an action for rescission on the ground of lesion?

An heir who has alienated the whole or a considerable part of the real
property adjudicated to him, but he shall have a right to be indemnified in
cash [Art. 1102, CC].

When is rescission of the partition on the ground of lesion not allowed?

When there is omission of one or more objects or securities of the
inheritance, but the partition shall be completed by the distribution of the
objects or securities which have been omitted [Art. 1103, CC].

DIFFERENCE OF NULLITY FROM RESCISSION

● Nullity – the act is supposed to never have existed
● Rescission – the act is valid at the origin though it afterwards became
ineffective.

Important Periods in Partition

1 month or less before Testator, if publicly known to be insane, burden
making a will of proof is on the one claiming validity of the will
20 years Maximum period testator can prohibit alienation
of dispositions
5 years from delivery To claim property escheated to the State
to the State
1 month To report knowledge of violent death of decedent
lest he be considered unworthy
5 years from the time Action for declaration of incapacity and for
disqualified person recovery of the inheritance, devise or legacy
took possession
30 days from issuance Must signify acceptance/repudiation; otherwise,
of order of deemed accepted
distribution
1 month form written Right to repurchase hereditary rights sold to a
notice of sale stranger by a co-heir
10 years To enforce warranty of title/quality of property
adjudicated to co-heir from the time the right of
action accrues
5 years from partition To enforce warranty of solvency of debtor of the
estate at the time partition is made
4 years from partition Action for rescission of partition on account of
lesion

V. OBLIGATIONS

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A. GENERAL PROVISIONS
1. Definition
Art. 1156, CC. An obligation is a juridical necessity to give, to do or not to
do.

An obligation is a juridical relation, whereby a person (called the creditor)

may demand from another (called the debtor) the observance of a
determinative conduct, and in case of breach, may obtain satisfaction from
the assets of the latter. [Makati Stock Exchange v. Campos, G.R. No. 138814
(2009)]

2. Elements of an obligation
a. Active Subject (Obligee/Creditor): The person (natural or
juridical) who has the right or power to demand the prestation.
b. Passive Subject (Obligor/Debtor): The person bound to
perform the prestation.
c. Prestation (Object): The conduct required to be observed by
the debtor/obligor (to give, to do, or not to do).

Requisites
1. Must be possible - physically and juridically.
2. Must be determinate or at least determinable according to preestablished
elements.
3. Must have possible equivalent in Money

d. Vinculum Juris (Juridical or Legal Tie; Efficient Cause): That

which binds or connects the parties to the obligation. [de Leon]

It is established by:
1. law
2. bilateral acts (e.g. contracts giving rise to obligations stipulated therein)
3. unilateral acts (e.g. crimes and quasidelicts)

3. Sources of obligations
Art. 1157, CC. Obligations arise from:
1. Law;
2. Contracts;
3. Quasi-contracts;
4. Acts or omissions punished by law; and
5. Quasi-delicts.

367
a. Law

Obligations arise when imposed by the law itself and cannot be presumed.
[Art. 1158, CC]

b. Contracts

Obligations arise from the stipulation of the parties; it has the force of law
and should be complied with in good faith. [Art. 1159, CC]

c. Quasi-Contracts

Certain lawful, voluntary and unilateral acts give rise to the juridical
relation of quasicontract to the end that no one shall be unjustly enriched
or benefited at the expense of another. [Art. 2142, CC]

d. Acts or Omissions Punishable by Law

Responsibility for fault or negligence under a quasi-delict [Art. 2176, CC] 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. [Art. 2177, CC]

e. Quasi-Delicts

Obligations arise from damages caused to another through an act or

omission, there being fault or negligence but no contractual relations exist
between the parties. [Art. 2176, CC]

B. NATURE AND EFFECT OF OBLIGATIONS

1. Obligation to give
a. Type of things
Specific/ Determinate Generic Thing Limited Generic
Thing Thing
Particularly designated Object is designated When the generic
or physically only by its class/ objects are confined to
segregated from all genus/ species. a particular class.

368
others of the same class
[Art.1460, CC];
Identified by
individuality.
Cannot be substituted Can be substituted by Can be substituted by
against the obligee’s any of the same class any of the same
will. and same kind. particular class.

b. Rights and Duties of Parties

Duties of the Debtor Rights of the Creditor
To Give a Specific Thing
1. To preserve or take care of the 1. To compel delivery [Art. 1165,
thing due with the proper diligence CC]
of a good father of a family [Art. 2. To the fruits from the time the
1163, CC] obligation to deliver arises [Art.
2. To deliver the thing itself [Art. 1164, CC]
1165, CC] 3. To the accessions and
3. To deliver the fruits of the thing accessories, even if not mentioned
[Art. 1164, CC] [Art. 1166, CC]
4. To deliver its accessions and 4. Not to be compelled to receive a
accessories [Art. 1166, CC] different one, although of the same
• Accessions – everything which is value as, or more valuable
produced by a thing, or which is than that which is due [Art. 1244,
incorporated or attached thereto, CC]
excluding fruits 5. To recover damages in case of
• Accessories – things designed for breach, exclusive or in addition to
the embellishment, use or specific Performance [Arts. 1165,
preservation of another thing of 1170, CC
more importance
5. To pay damages in case of breach
[Art. 1170, CC]
To Give a Generic Thing
1. To take care of the thing [Art. 1. To ask that the obligation be
1163, CC] complied with [Art. 1165, CC]
2. To deliver a thing of the quality 2. To ask that the obligation be
intended by the parties taking into complied with by a third person at
consideration the purpose of the the expense of the debtor
obligation and other circumstances 3. To recover damages in case of
[Art. 1246, CC] breach [Art. 1165, CC]
3. Creditor cannot demand a thing 4. Not to be compelled to receive a
of superior quality; neither can the different one, although of the same
debtor deliver a thing of inferior value as, or more valuable than that
quality. which is due [Art. 1244, CC]
4. To pay damages in case of breach
[Art. 1170, CC]

369
2. Obligation to do or not to do
a. Rights and Duties of Parties
Duties of the Rights of the
Debtor Creditor
Obligation To Do
1. To do it [Art. 1167, 1. To have the obligation executed
CC] at the cost of the debtor [Art. 1167,
2. To shoulder the cost CC]
of execution should he 2. To recover damages in case of
fail to do it [Art. 1167, breach [Art. 1170, CC]
CC]
3. To undo what has been Note: The debtor cannot be
poorly done [Art. 1167, compelled to perform his obligation.
CC] The ultimate sanction of civil
4. To pay damages in obligations is indemnification of
case of breach [Art. damages. This would be tantamount
1170, CC] to involuntary servitude.
Obligation Not To Do
1. Not to do what should not be 1. To ask to undo what
done should not be done, at
2. To shoulder cost of undoing the debtor’s expense.
what should not have been [Art. 1168, CC]
done [Art. 1168, CC] 2. To recover damages,
3. To pay damages in case of where it would be
breach [Art. 1170, CC] physically or legally
impossible to undo
what should not have
been done, because of:
• the very nature of the act
itself;
• rights acquired by third
persons who acted in good
faith;
 when the effects of the acts
prohibited are definite in
character and will not cease
even if the thing prohibited
be undone.

3. Transmissibility of obligations
General Rule: All rights acquired by virtue of an obligation are
transmissible. [Art. 1178, CC];
Contracts take effect only between the parties, their assigns and heirs [Art.
1311, CC]

370
Exception: Nature of obligation, law or stipulation to the contrary provides
otherwise [Art. 1178].

Only personal obligations, or those identified with the persons themselves

are extinguished by death. [Stronghold Insurance Co. v. Republic-Asahi
Glass Corp., G.R. No. 147561 (2006)]

4. Performance of obligations
a. Definition
Payment means not only (1) the delivery of money, but also (2) the
performance, in any other manner, of an obligation. [Art. 1232, CC]

b. General Rule/Requirement
The thing or service in which the obligation consists [must be] completely
delivered or rendered, as the case may be. [Art. 1233, CC]

c. Exceptions
1. Substantial performance
TRIGGER: The obligation has been substantially performed in good faith.

EFFECT: The obligor may recover as though there had been a strict and
complete fulfillment, less damages suffered by the obligee. [Art. 1234, CC]

2. Incomplete/irregular performance
TRIGGER: Obligee accepts performance despite knowledge of its
incompleteness or irregularity.

EFFECT: The obligation is deemed fully complied with. [Art. 1235, CC]

3. Partial prestation
General rules:
1. The creditor CANNOT be compelled to receive partial payments.
2. The debtor CANNOT be required to make partial payments.

Exception: when expressly stipulated. [Art. 1248, par. 1, CC]

4. Partial liquidation
TRIGGER: The debt is partly liquidated and partly unliquidated.

EFFECT: The creditor may demand and the debtor may effect the payment
of the liquidated debt without waiting for the liquidation of the unliquidated
debt.

5. Breaches of obligations
Those who in the performance of their obligations are guilty of the following
are liable for damages [Art. 1170, CC]:
a. Fraud (dolo): The fraud contemplated by the foregoing provision is the

371
deliberate and intentional evasion of the normal fulfillment of obligations.
b. Negligence (culpa): Fault or negligence of the debtor as an incident in the
fulfillment of an existing obligation.
c. Delay (mora): Delay in the fulfillment of the obligation. The delay
however must be imputable to the debtor/obligor.
d. And those who in any manner contravene the tenor thereof: Covers any
illicit act which impairs the strict and faithful fulfillment of the obligation,

a. Failure to Perform

Effect of Failure to Perform

Substantial Breach Slight or Casual Breach
1. Total breach 1. Partial breach
2. Amounts to nonperformance, basis 2. There is partial/ substantial
for rescission under Art. 1191 and performance in good faith
payment of damages 3. Gives rise to liability for
damages only [Art. 1234, CC]

General Rule
Rescission of a contract will not be permitted for a slight or causal breach,
but only for such substantial and fundamental breach as would defeat the
very object of the parties in executing the agreement. [Vermen Realty Corp.
v. CA, G.R. No. 101762 (1993)]

Substantial performance contemplates

• an attempt in good faith to perform, without any willful or intentional
departure therefrom
• the deviation from the obligation must be slight, and the omission or
defect must be technical and unimportant, and must not pervade the whole
or be so material that the object which the parties intended to accomplish in
a particular manner is not attained. [International Hotel Corp v. Joaquin,
G.R. No. 158361 (2013)]

The question of whether a breach of contract is substantial depends upon the

attending circumstances and not merely on the percentage of the amount
not paid. [Cannu v. Galang, G.R. No. 139523 (2005)]

b. Default, Delay, or Mora

Definition: Failure to perform an obligation on time which constitutes a

breach of the obligation. [de Leon]

Rules on Default, Delay, or Mora

Unilateral Obligations Reciprocal Obligations
General Rule: “No demand, No Neither party incurs in delay if the
delay.” other does not comply or is not
The mere expiration of the period ready to comply in a proper manner

372
 fixed by the parties is not enough in with what is incumbent upon him.
order that the debtor may incur in From the moment one of the parties
delay. fulfills his obligation, delay by the
Those obliged to deliver or to do other begins. [Art. 1169 par. 3, CC]
something incur in delay from the
time the oblige judicially or No delay if neither performs.
extrajudicially demands from them
the fulfillment of their obligation.
[Art. 1169 par. 1, CC]

When demand is not necessary in order that delay may exist [par. 2,
Art. 1169, CC]
1. When demand would be useless, as when the obligor has rendered it
beyond his power to perform; such as:
a. When the impossibility is caused by some act or fault of the
debtor (e.g. debtor absconded or has destroyed the thing to be
delivered);
b. When the impossibility is caused by a fortuitous event, but the
debtor has bound himself to be liable in case of such event.
[Tolentino]
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 (time is of the essence);
3. When the law so provides; or
4. When the obligation expressly so declares.

Note: It is insufficient that the law or obligation fixes a date for

performance. It must further state expressly that after the period lapses,
default will commence.

KINDS OF DELAY
1. Moral Solvendi;
2. Mora Accipiendi;
3. Compensatio Morae

MORA SOLVENDI
Delay on the part of the debtor to fulfil his obligation either to give (ex re)
or to do (ex persona).

Requisites
1. Obligation must be liquidated, due and demandable
2. Non-performance by the debtor within the period agreed upon
3. Demand, judicial or extra-judicial, by the creditor, unless demand is not
necessary under the circumstances enumerated in Art 1169 par (2).

Effects

373
1. The debtor is liable for damages. [Art. 1170, CC]
2. For determinate objects, the debtor shall bear the risk of loss, even if the
loss is due to fortuitous events. [Art. 1165 par. 3, CC]

MORA ACCIPIENDI
Delay on the part of the creditor to accept the performance of the
obligation.

Requisites
1. Debtor offers performance.
2. Offer must be in compliance with the prestation as it should be
performed.
3. Creditor refuses performance without just cause.

Effects
1. The responsibility of the debtor is reduced to fraud and gross
negligence.
2. The debtor is exempted from risk of loss of the thing, which is
borne by the creditor.
3. The expenses incurred by the debtor for the preservation of the
thing after the mora shall be chargeable to the creditor.
4. If the obligation bears interest, the debtor does not have to pay
from the time of delay.
5. The creditor is liable for damages.
6. The debtor may relieve himself of the obligation by consigning
the thing. [Tolentino]

COMPENSATIO MORAE
Delay of both parties in reciprocal obligations.

Effects
1. Delay of the obligor cancels delay of obligee (and vice versa) hence it is
as if there is no default.
2. The liability of the first infractor shall be equitably tempered by the
courts. If it cannot be determined which of the parties first violated the
contract, the same shall be deemed extinguished, and each shall bear his own
damages. [Art. 1192, CC]

Equitable Tempering under Art. 1192 vs. Under Art. 2215 [Ong v.
Bognalbal, G.R. No. 149140 (2006)]
Art 1192 Art 2215
“In case both parties have “In contracts, quasicontracts, and
committed a breach of the quasidelicts, the court may equitably
obligation, the liability of the first mitigate the damages under
infractor shall be equitably circumstances other than the case
tempered by the courts. xxx” referred to in the preceding article, as
in the ff. instances:

374
 (1) That the plaintiff himself has
contravened the terms of the contract
xxx”
Second infractor not liable for Does not appear to consider which
damages at all; only the first infractor first committed the breach.
infractor is liable, but with his
liability mitigated.

c. Fraud (Dolo) in the Performance of the Obligation

Art. 1171, CC. Responsibility arising from fraud is demandable in all

obligations. Any waiver of an action for future fraud is void.

Definition: Fraud (dolo) is the deliberate or intentional evasion of the

normal fulfilment of an obligation. [de Leon]

Dolo Causante [Art. 1338, par. 1, Dolo Incidente [par. 2, Art. 1344,
Art. 1344, CC] CC]
Definition
Those deceptions or Those which are not serious in
misrepresentations of a serious character and without which the
character employed by one party and other party would still have
without which the other party would entered into the contract. [Tankeh
not have entered into the contract. v. DBP, G.R. No. 171428 (2013)]
[Tankeh v. DBP, G.R. No. 171428
(2013)]
When Present
Deception used by one party prior to Deception used by one party at the
or simultaneous with the contract, in time of birth or perfection, or
order to secure the consent of the performance of the obligation
other [Tankeh v. DBP, G.R. No.
171428 (2013)]
Object
Essential cause of the obligation Some particular or accident of the
without which the other party would obligation
not have entered into the contract.
Effect
Voidable and Damages Damages

Requisites for Fraud to Vitiate a Contract (Dolo Causante)

1. It must have been employed by one contracting party upon the other;
2. It must have induced the other party to enter into the contract;
3. It must have been serious; and
4. It must have resulted in damage or injury to the party seeking annulment.
[Tolentino]

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d. Negligence (Culpa) in the Performance of the Obligation
Art. 1172, CC. 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.

Art. 1173, CC. 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.
xxxx
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.

General Rule: Standard of care required is diligence of a good father of

family.

Exceptions (Other standards of care)

1. Common Carriers
They are bound to observe extraordinary diligence in the vigilance over
the goods and for the safety of the passengers transported by them [Art.
1733, CC]

2. Hotel and inn-keepers

The keepers of hotels or inns shall be responsible for the deposit of effects,
made by travellers, as depositaries, provided that notice was given to them,
or their employees of such effects and that they take precautions relative to
the care and vigilance of their effects [Art. 1998, CC]

This responsibility 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. [Art. 2000, CC]

3. Banks
Banks have the obligation to treat the accounts of its clients ‘meticulously
and with the highest degree of care’. [Poole- Blunden v. UnionBank, G.R.
No. 205838 (2017)]

4. Pharmacists
As active players in the field of dispensing medicines to the public, the
highest degree of care and diligence is expected [Mercury Drug Corporation
v. de Leon, G.R. No. 165622 (2008)]

Test of Negligence
“Whether or not the defendant, in doing the alleged negligent act, observed
the reasonable care and caution, which an ordinary and prudent person

376
would have used in the same situation.” If not, then he is guilty of
negligence. [Mandarin Villa Inc. v. CA, G.R. No. 119850 (1996)]

Kinds of Civil Negligence

Culpa Contractual Culpa Aquiliana
Negligence is merely incidental in Negligence is direct, substantive
the performance of an obligation. and independent.
There is always a preexisting There may or may not be a
contractual relation. preexisting contractual obligation.
The source of the obligation of the The source of obligation is the
defendant to pay damages is the defendant’s negligence itself.
breach or non-fulfillment of the
contract.
Proof of the existence of the The negligence of the defendant
contract and of its breach or must be proven.
nonfulfillment is sufficient prima
facie to warrant recovery.

Extent of Damages to be Awarded [Art. 2201, CC]

Good Faith Bad Faith
Obligor is liable for those that are Obligor shall be responsible for all
the natural and probable damages which may be reasonably
consequences of the breach of the attributed to the nonperformance of
obligation, and which the parties the obligation.
have foreseen or could have Any waiver or renunciation made in
reasonably foreseen at the time the the anticipation of such liability is
obligation was constituted. null and void.

e. Contravention of the Tenor of the Obligation

“In any manner contravenes the tenor” means any illicit act, which impairs
the strict and faithful fulfillment of the obligation, or every kind of defective
performance. [Tolentino

6. Remedies available to creditor in cases of breach

a. Principal remedies of creditors
Obligation to Give a Specific Obligation to Give a Generic
Thing Thing and Obligation to Do
Alternative Remedies
Compel the debtor to make delivery Ask the obligation be complied
(specific performance) [par. 1, Art. with at the expense of the debtor.
1165, CC] [par. 2, Art. 1165, CC]
Rescission [Art. 1191] If a person obliged to do something
fails to do it, the same shall be
executed at his cost [Art. 1167,
CC ]

377
 What has been poorly done [may]
be undone. [Art. 1167]
Rescission [Art. 1191
Damages in any event
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. [Art. 1170, CC]

Rescission (Resolution in Reciprocal Obligations)

Art. 1191, CC. 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 fulfillment of
the obligation should become impossible.

The court shall decree the rescission claimed, unless there be just cause
authorizing the fixing of a period.
This is understood to be without prejudice to the rights of third persons
who have acquired the thing, in accordance with articles 1385 and 1388
and the Mortgage Law.

Rescission
The unmaking of a contract, or its undoing from the beginning, and not
merely its termination [Pryce Corp v. Pagcor, G.R. No. 157480 (2005)]

Right to Rescind
The rescission on account of breach of stipulations is not predicated on
injury to economic interests of the party plaintiff but on the breach of
faith by the defendant, that violates the reciprocity between the parties.
[Universal Food Corporation v. CA, G.R. No. L- 29155 (1970)]

Effect of Rescission under Art 1191

Extinguishes the obligatory relation as if it had never been created, the
extinction having a retroactive effect. Both parties must surrender what they
have respectively received and return each other as far as practicable to their
original situation. [Tolentino]

Rescission may take place extrajudicially, by declaration of the injured

party. The party who deems the contract violated may consider it
resolved or rescinded, and act accordingly, without previous court
action, but it proceeds at its own risk. For it is only the final judgment of
the corresponding court that will conclusively and finally settle whether the
action taken was or was not correct in law. But the law definitely does not
require that the contracting party who believes itself injured must first

378
file suit and wait for a judgment before taking extrajudicial steps to protect
its interest. [UP v. Delos Angeles, G.R. No. L- 28602 (1970)]

Under Art 1191, the right to rescind an obligation is predicated on the

violation of the reciprocity between parties, brought about by a breach of
faith by one of them. Rescission, however, is allowed only where the breach
is substantial and fundamental to the fulfillment of the obligation. [Del
Castillo Vda de Mistica v. Naguiat,G.R. No. 137909 (2003); Cannu v.
Galang, G.R. No. 139523 (2005)].

It will not be permitted in casual or slight breach. [Song Fo v. Hawaiian

Philippines, G.R. No. 23769, (1925)]

Distinguished from Rescission under Art. 1380

Rescission / Resolution [Art. 1191, Rescission [Art. 1380, CC]
CC]
Based on nonperformance or non- Based on lesion or fraud upon
fulfillment of obligation. creditors.
Action is instituted only by the Action is instituted by either party
injured party. or by a third person.
Principal action, retaliatory in Subsidiary action, in the absence of
character. any other legal means to obtain
reparation.
Applies only to reciprocal Applies to either unilateral or
obligations where one party is guilty reciprocal obligations even when
of non-fulfillment the contract has been fully fulfilled.
In some cases, court may grant a Court cannot grant a period or term
term for performance. within which one must comply.
Non-performance by the other party Non-performance by the other
is important. party is immaterial.

b. Subsidiary Remedies of Creditors

ACCION SUBROGATORIA
Art. 1177, CC. The creditors, after having pursued the property in
possession of the debtor to satisfy their claims, may exercise all the rights
and bring all 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.

Right of the creditor to exercise all of the rights and bring all the actions
which his debtor may have against third persons.

In order to satisfy their claims against the debtor, creditors have the ff.
successive rights:
1. To levy by attachment and execution upon all the property of the debtor,
except those exempt from execution;

379
2. To exercise all the rights and actions of the debtor, except such as are
inherently personal to him; and
3. To ask for rescission of the contracts made by the debtor in fraud of their
rights.

Requisites
1. The person to whom the right of action pertains must be indebted to the
creditor
2. The debt is due and demandable
3. The creditor must be prejudiced by the failure of the debtor to collect his
debts due him from third persons, either through malice or negligence
4. The debtors assets are insufficient (debtor is insolvent)
5. The right of action is not purely personal to the debtor
Previous approval of the court is not necessary to exercise the accion
subrogatoria.

ACCION PAULIANA
Creditors may also impugn the acts which the debtor may have done to
defraud them. [Art. 1177, CC]

Par. 3, Art. 1381. The following contracts are rescissible:

(3) Those undertaken in fraud of creditors when the latter cannot in any
other manner collect the claims due them.

Requisites [Cheng v. CA, G.R. No. 144169 (2001)]

1. There is a credit in favor of the plaintiff prior to the alienation by the
debtor
2. The debtor has performed a subsequent contract conveying
patrimonial benefit to third person/s.
3. The debtor’s acts are fraudulent to the prejudice of the creditor.
4. The creditor has no other legal remedy to satisfy his claim
5. The third person who received the property is an accomplice to the
fraud.

An accion pauliana thus presupposes the following:

1. A judgment;
2. the issuance by the trial court of a writ of execution for the satisfaction of
the judgment, and;
3. the failure of the sheriff to enforce and satisfy the judgment of the court.

It requires that the creditor has exhausted the property of the debtor. The
date of the decision of the trial court is immaterial. What is important is
that the credit of the plaintiff antedates that of the fraudulent alienation
by the debtor of his property. After all, the decision of the trial court
against the debtor will retroact to the time when the debtor became indebted
to the creditor. [Cheng v. CA, supra]

380
 Accion Subrogatoria Accion Pauliana
Not necessary that creditor’s claim Credit must exist before the
is prior to the acquisition of the fraudulent act [Tolentino]
right by the debtor
Note: Commentators have
conflicting views on WoN new
debts contracted by the debtor fall
under the scope of accion pauliana.
No need for fraudulent intent Fraudulent intent is required if the
contract rescinded is onerous
No period for prescription Prescribes in 4 years from the
discovery of the fraud

C. KINDS OF OBLIGATIONS
1. Pure
Art. 1179, CC. 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.

A pure obligation is IMMEDIATELY DEMANDABLE, regardless of the

presence of a condition or a term/period.

2. Conditional
Art. 1181, CC. 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.

A condition is a future AND uncertain event. This includes acquisition of

proof/knowledge of a past event unknown to the parties.

a. Kinds of conditions

i. As to Effect

381
1. SUSPENSIVE – Obligation shall only be effective upon the fulfillment
of the condition [Art. 1181, CC]. The obligee acquires a mere hope or
expectancy, protected by law, upon the constitution of the obligation.

Before Fulfillment After Fulfillment

The demandability and acquisition/ The obligation arises or becomes
effectivity of the rights arising from effective.
the obligation is suspended, but the
creditor may bring theappropriate The obligor can be compelled to
actions for the preservation of his comply with what is incumbent
right. [Art. 1188, CC] upon him.

Doctrine of Constructive Fulfillment of Suspensive Conditions

Art. 1186, CC. The condition shall be deemed fulfilled when the obligor
voluntarily prevents its fulfillment.

Suspensive condition is deemed fulfilled when:

1. Obligor intends to prevent obligee from complying with the condition

2. Obligor actually prevents obligee from complying with the condition

The two requisites must concur. Mere intention of the debtor to prevent the
happening of the condition, or to place ineffective obstacles to its
compliance, without actually preventing the fulfillment, is insufficient.
[International Hotel Corporation v. Joaquin, G.R. No. 158361 (2013)]

Doctrine does not apply to:

1. Resolutory conditions

2. External contingency that is lawfully within the control of the obligor

[Taylor v Uy Tieng, G.R. No. L-16109 (1922)]

3. Obligor, in preventing the fulfillment of the condition, acts pursuant to a

right

382
Principle of Retroactivity in Suspensive Conditions

Par. 1, Art. 1187, CC. 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.

Rationale: Obligation is constituted when its essential elements concur. The

condition imposed is only an accidental element.

Applicability: This applies to consensual contracts only.

Exception: This does not apply to real contracts which can only be
perfected by delivery.

Effects of the Happening of Suspensive Conditions

To Give To Do/Not To Do
If reciprocal, the fruits and interests In obligations to do or not to do, the
shall be deemed to have been court shall determine the retroactive
mutually compensated a matter of effect of the condition that has been
justice and convenience [Art. 1187, complied with [Art. 1187, par. 2]
par. 1]
If unilateral, the debtor shall The power of the court includes the
appropriate the fruits and interests determination of whether or not
received, unless from the nature and there will be any retroactive effect.
circumstance it should be inferred This rule shall likewise apply in
that the intention of the persons obligations with a resolutory
constituting the same was different. condition. [Art. 1190, par. 3]
[Art. 1187, par. 1]

2. RESOLUTORY – The obligation is demandable at once, without

prejudice to the effects of the happening of the event [par. 2, Art. 1179, CC].

Before Fulfillment After Fulfillment

Preservation of creditor’s rights Whatever may have been paid or
[par. 1, Art. 1188, CC] also applies delivered by one or both of the

383
 to obligations with a resolutory parties upon the constitution of the
condition. obligation shall have to be returned
upon the fulfillment of the condition
[par. 1, Art. 1190, CC].
There is no return to the status quo.
However, when the condition is not
fulfilled, rights are consolidated and
they become absolute in character.

ii. As to Cause/Origin

a. POTESTATIVE – The fulfillment of the condition depends on the sole

act or decision of a party.

b. CASUAL – The fulfilment of the condition depends upon chance or upon

the will of a third person. [Art. 1182, CC]

c. MIXED – The fulfilment of the condition depends partly upon the will of
a party to the contract and partly upon chance and/or will of a third person.

Exclusively upon the Creditor’s Condition and obligation are valid.

Will
Exclusively upon the Debtor’s Will Condition and obligation are void
in case of a Suspensive Condition because to allow such condition
[Art. 1182, CC] would be equivalent to sanctioning
obligations which are illusory. It
also constitutes a direct
contravention of the principle of
mutuality of contracts.
Exclusively upon the Debtor’s Will Condition and obligation are valid
in case of a Resolutory Condition because in such situation, the
[par. 2, Art. 1179, CC] position of the debtor is exactly the
same as the position of the creditor
when the condition is suspensive. It
does not render the obligation
illusory.

The condition that payment should be made byHermosa as soon as he

receives funds from the sale of his property in Spain is a mixed condition.
The condition implies that the obligor already decided to sell the house

384
and all that was needed to make the obligation demandable is that the
sale be consummated and the price thereof remitted to the islands. There
were still other conditions that had to concur to effect the sale, mainly that of
the presence of a buyer, ready, able and willing to purchase the property
under the conditions set by the intestate. [Hermosa vs. Longara, G.R. No. L-
5267 (1953)]

Loss, Deterioration, or Improvement of aSpecific Thing before

Fulfillment of Suspensive Condition in Obligations to Give (Art. 1189)
or of Resolutory Condition in Obligations to Do or Not to Do [par. 2,
Art. 1190, CC]

Loss of a Thing A thing is deemed lost:

a. When it perishes;
b. When it goes out of commerce of man; or
c. When it disappears in such a manner that its
existence is unknown or it cannot be recovered
Deterioration of a Thing Any reduction or impairment in the substance
or value of a thing which does not amount to a
loss
Improvement of a Thing Anything added to, incorporated in, or attached
to the thing that is due.

Re: Obligation to Deliver a Determinate Thing

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 [Art. 1189, CC]:

Without Debtor’s Fault/Act With Debtor’s Fault/Act

Loss
Obligation is extinguished. Obligation is converted into one of
indemnity for damages.
Deterioration
Impairment to be borne by the Creditor may choose between
creditor. bringing an action for rescission of
the obligation OR bringing an

385
 action for specific performance,
with damages in either case.
Improvement
Improvement at the debtor’s Improvement by the thing’s nature
expense, the debtor shall ONLY or by time shall inure to the benefit
have usufructuary rights. of the creditor.

Re: Obligations To Do and Not To Do

Par. 3, Art. 1190, CC. 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.

Par. 2, Art. 1187, CC. 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.

Re: Obligations With a Resolutory Condition

Upon the happening of the resolutory condition, the rules of Article 1189
shall be applied to the party who is bound to return (i.e. the creditor in the
original obligation).

b. Impossible Conditions

1. Impossible conditions, those contrary to good customs or public policy,

and those prohibited by law shall annul the obligation which depends upon
them.

2. The part of a divisible obligation which is not affected by such condition

shall be valid. [Art. 1183, CC]

c. Positive and Negative Conditions

Positive [Art. 1184, CC] Negative [Art. 1185, CC]

The condition that some event The condition that some event will
happen at a determinate time shall not happen at a determinate time

386
 extinguish the obligation shall render the obligation effective
1. as soon as the time expires or from the moment
2. if it has become indubitable that 1. the time indicated has elapsed, or
the event will not take place. 2. if it has become evident that the
event cannot occur

3. Obligation with a period or a term

1. Obligations for whose fulfillment a day certain has been fixed ⎯ shall be
demandable only when that day comes. [Art. 1193, CC]
2. Obligations with a resolutory period ⎯ take effect at once, but terminate
upon arrival of the day certain. [Art. 1193, CC]
3. 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 [Art. 1180, CC]

Period or Term
Interval of time, which either suspends demandability or produces
extinguishment. A fortuitous event does not interrupt the running of the
period. It only relieves the contracting parties from the fulfillment of their
respective obligations during the period. [Victoria’s Planters v. Victoria
Milling Co., G.R. No. L-6648 ]

Term/Period and Condition Distinguished

Term/Period Condition
Interval of time which is future and Fact or event which is future and
certain uncertain
Must necessarily come, although it May or may not happen
may not be known when
No effect on existence of the Gives rise to an obligation or
obligation, only its demandability or extinguishes one already existing
performance
No retroactive effect unless there is Has retroactive effect
an agreement to the contrary
When it is left exclusively to the will When it is left exclusively to the
of the debtor, the existence of the will of the debtor, the very
obligation is not affected existence of the obligation is
affected

Kinds of Period [Art. 1193, CC]

1. Ex die/ Suspensive Period – Obligation becomes demandable after the
lapse of the period.
2. In die/ Resolutory period – Obligation becomes demandable at once but
is extinguished after the lapse of the period.

Effect of Advance Payment or Delivery [Art. 1195, CC]

Trigger: (1) Something has been paid or delivered before the arrival of the

387
period, (2) the obligor being unaware of the period or believing that the
obligation has become due and demandable
Effect: That thing paid or delivered may be recovered with fruits and
interests

Loss, Deterioration, or Improvement of the Thing Before Period

Expires [Art. 1194, CC]

Trigger: In case of loss, deterioration or improvement of the thing before

the arrival of the day certain
Effect: The rules in Art. 1189 shall apply

Benefit of the Period [Art. 1196, CC]

Trigger: Whenever in an obligation a period is designated

Effect: It is presumed to have been established for the benefit of both the
creditor and the debtor

Exception: From the tenor of the same or other circumstances it should

appear that the period has been established in favor of one or of the other.

Period for the benefit of either creditor or debtor

Creditor Debtor
Creditor may demand the Debtor may oppose any premature
fulfillment or performance of the demand on the part of the obligee
obligation at any time but the for the performance of the
obligor cannot compel him to accept obligation, or if he so desires, he
payment before the expiration of the may renounce the benefit of the
period. period by performing his obligation
in advance.

If the period is for the benefit of the debtor alone, he shall lose every
right to make use of it:
(a) When after the obligation has been contracted, he
becomes insolvent, unless he gives a guaranty or
security for the debt;
(b) When he does not furnish to the creditor the guaranties
or securities which he has promised;
(c) 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;
(d) When the debtor violates any undertaking, in
consideration of which the creditor agreed to the
period;
(e) When the debtor attempts to abscond [Art. 1198, CC]

388
 (f) When required by law or stipulation;
(g) If parties stipulated an acceleration clause [Tolentino]

When Courts May Fix Period

General Rule: Courts may fix the period of an obligation when:
1. the obligation does not fix a period but from its nature and the
circumstances it can be inferred that a period was intended;
2. the obligation depends upon the will of the debtor.

Exceptions: If the Court determines that one of the 3 circumstances [below]

are present, it must decide the period “probably contemplated by the parties”
[Araneta v. Phil. Sugar Estates, G.R. No. L-22558 (1967)]
1. obligation does not fix a period, but from its nature and
circumstances, it can be inferred that a period was intended
2. the period is void, such as when it depends upon the will of the debtor
3. If the debtor binds himself when his means permit him to do so.

Courts shall determine such period as may have been probably

contemplated by the0 parties [Art. 1197, CC]
Application: When a period was intended by the parties [Macasaet v.
Macasaet, G.R. Nos. 154391-92 (2004)]
General Rule: Once fixed by the courts, the period cannot be changed by
them.
Exception: The rule does not apply to contract of services and to pure
obligations. [Tolentino]

4. Alternative or facultative
Alternative and Facultative Conditions Distinguished
Alternative Obligations Facultative
Obligations
Of the two or more prestations, Of the two or more prestations, only
several are due. one is due, while the other/s may be
performed in substitution of the one
due.
May be complied with by May be complied with by
performance of one of the performance of another prestation
prestations which are alternatively in substitution of that which is
due. due.
The right of choice belongs to the Choice of prestation pertains only to
debtor, unless it has been the debtor.
expressly granted to the creditor.
[Art. 1200, CC]
Loss/impossibility of all Loss/impossibility of the
prestations due to a fortuitous prestation due to a fortuitous event
event shall extinguish the is sufficient to extinguish the
obligation. obligation.

389
 Loss/impossibility of one of the Loss/impossibility of the
prestations does not extinguish the substitute/s does not extinguish the
obligation. obligation, provided the obligation
which is due subsists
Culpable loss of any of the objects Culpable loss of the object which
alternatively due before the choice the debtor may deliver in
is made may give rise to liability substitution before the substitution
on the part of the debtor. is effected does not give rise to any
liability on the part of the debtor.

Right of Choice [Art. 1200, CC]

General Rule: Belongs to the debtor

Exceptions
1. it is expressly granted to the creditor
2. it is expressly granted to a third person

Form of notice
Notice of selection or choice may be in any form provided it is sufficient to
make the other party know that the selection has been made.
It can be:
1. oral
2. in writing
3. tacit
4. any other equivocal means [Tolentino]

Consent of other party

The law does not require the other party to consent to the choice made by the
party entitled to choose. The only possible exception is when the debtor has
chosen a prestation which could not have been the object of the obligation;
the creditor’s consent would bring about a novation of the obligation [Ibid.]

Debtor cannot make a choice, or delays selection

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. [Art. 1203, CC]

If the debtor does not select at the time when performance should be
effected, the choice can be made for him by the creditor by applying
Art. 1167
In obligations to do (debtor considered to have waived his right, subject to
equity considerations) [Tolentino].

Effect of notice of choice

The effect of the notice is to limit the obligation to the object or prestation
selected. The obligation is converted into a simple obligation to perform the
prestation chosen. Once a selection has been communicated, it is irrevocable

390
[Ibid.]

Instances when obligation is converted into a simple obligation

1. The person with the right of choice has communicated his choice [Arts.
1201 and par. 1, 1205, CC]
2. Only one prestation is practicable [Art. 1202, CC]

Loss of Specific Things or Impossibility of Performance of Prestations

in an Alternative Obligation

If Debtor’s Choice [Art. 1204, CC]

Fortuitous Event Debtor’s Fault
All prestations lost/impossible
Debtor is released from the Creditor shall have a right to
obligation. indemnity for damages based on the
value of the last thing which
disappeared or service which
become impossible, plus damages
other than the value may also be
awarded
Some prestations lost/impossible
Debtor to perform that which he Debtor to perform that which the
shall choose from among the debtor shall choose from among the
remainder. remainder, without liability for
damages.
One prestation remains
Debtor to perform that which Debtor to perform that which
remains. remains.

If Creditor’s Choice [Art. 1205, CC]

Fortuitous Event Fortuitous Event
All prestations lost/impossible
Debtor is released from the Creditor may claim the price/value
obligation. of any of them, with indemnity for
damages.
Some prestations lost/impossible
Debtor to deliver that which he Creditor may claim any of those
shall choose from among the subsisting without a right to
remainder. damages OR price/value of the
thing lost, with right to damages.
One prestation remains
Debtor to perform that which Creditor may claim the remaining
remains. thing without a right to damages OR
the price/value of the thing lost with
right to damages.

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Facultative Obligations
Only one prestation is agreed upon, but the obligor may render another in
substitution. [Art. 1206, CC]

Loss or deterioration of Substitute in Facultative Obligations [Art. 1206,

CC]
Before Substitution is Made After Substitution is Made
If due to bad faith or fraud of The loss or deterioration of the
obligor: obligor is liable. substitute on account of the
If due to the negligence of the obligor’s delay, negligence, or
obligor: obligor is not liable. fraud, renders the obligor liable
because once the substitution is
made, the obligation is converted
into a simple one with the
substituted thing as the object of the
obligation.

5. Joint and solidary obligations

a. Joint Obligations

The whole obligation, whether capable of division into equal parts or not, is
to be paid or performed by several debtors (joint debtors) and/or demanded
by several creditors (joint creditors).

Each debtor is liable only for a proportionate part of the debt, and each
creditor is entitled only to a proportionate part of the credit. [Tolentino]
Presumption of Joint Obligation [Article 1207, CC]
General Rule: An obligation is presumed joint if there is a concurrence of
several creditors, or of several debtors, or of several creditors and debtors in
one and the same obligation

Exceptions
1. When the obligation expressly states that there is solidarity
2. When the law requires solidarity, i.e. quasi-delicts [Art. 2194, CC],
joint payees by mistake [Art. 2157, CC], acts under articles 19-22 if
committed by two or more persons acting jointly
3. When the nature of the obligation requires solidarity
4. When a charge or condition imposed upon heirs or legatees, and the
testament expressly makes the charge or condition in solidum
5. When the solidary responsibility is imputed by a final judgment upon
several defendants

Presumption of Divisibility in Joint Obligations [Art. 1208, CC]

Credit or debt shall be presumed to be divided into as many equal shares as
there are creditors or debtors, the credits or debts being considered distinct
from one another.

392
JOINT DIVISIBLE OBLIGATION
One where a concurrence of several creditors, or of several debtors, or of
several creditors and debtors, by virtue of which, each of the creditors has a
right to demand, and each of the debtors is bound to render compliance with
his proportionate part of the prestation which constitute the object of the
obligation.

Art. 1209, CC. If the division is impossible, the right of the creditors may
be prejudiced only by their collective acts, and the debt can be enforced
only by proceeding against all the debtors. If one of the latter should be
insolvent, the others shall not be liable for his share.

When there are several debtors or creditors, but the prestation is indivisible,
the obligation is joint, unless solidarity has been stipulated [Tolentino]

When Indivisible [Art. 1225, CC]

1. Obligations to give definite things
2. Obligations not susceptible of partial performance
3. Indivisibility is provided by law or intended by the parties, even though
the object or service may be physically divisible
4. In obligations not to do, when character of prestation requires
indivisibility

Summary: in case of breach

Joint Divisible Obligations Joint Indivisible Obligations
In case of breach of obligation by In case of breach where one of the
one of the debtors, damages due joint debtors fails to comply with his
must be borne by him alone. undertaking, the obligation can no
longer be fulfilled or performed.
Thus, the action must be converted
into one for indemnity for damages,
with each debtor liable only for his
part in the price or value of the
prestation.

b. Solidary Obligations

An obligation where there is concurrence of several creditors, or of several

debtors, or of several creditors and several debtors, by virtue of which, each
of the creditors has the right to demand, and each of the debtors is bound to
render, entire compliance with the prestation which constitutes the object of
the obligation.

The indivisibility of an obligation does not necessarily give rise to solidarity.

Nor does solidarity of itself imply indivisibility. [Art. 1210, CC]

Solidarity may exist although the creditors and the debtors may not be bound

393
in the same manner and by the same periods and conditions. [Art. 1211, CC]

Solidarity Indivisibility
Refers to the legal tie (vinculum Refers to the prestation that is not
juris), and consequently to the capable of partial performance
subjects or parties of the obligation
More than one creditor or more than Exists even if there is only one
one debtor (plurality of subjects) creditor and/or one debtor
Each creditor may demand the entire Each creditor cannot demand more
prestation and each debtor is bound than his share and each debtor is
to pay the entire prestation not bound to pay more than his
share
Effect of breach: Solidarity remains Effect of breach: Obligation is
converted to indemnity for damages
All debtors are liable for breach Only the debtors guilty of breach of
committed by a co-debtor obligation is liable for damages
All debtors are proportionately Other debtors are not liable if one
liable for insolvency of one debtor debtor is insolvent

KINDS OF SOLIDARY OBLIGATIONS

As to Source
1. Legal – imposed by law
2. Conventional – agreed upon by parties
3. Real – imposed by the nature of the Obligation

As to Parties Bound
1. Active (solidarity among creditors) – Each creditor has the authority to
claim and enforce the rights of all, with the resulting obligation of paying
everyone what belongs to him.
2. Passive (solidarity among debtors) – Each debtor can be made to answer
for the others, with the right on the part of the debtor-payor to recover from
the others their respective shares.
3. Mixed (solidarity among creditors and debtors) – The creditor can
commence an action against anyone of the debtors for the compliance with
the entire obligation minus the portion or share which corresponds to the
debtor affected by the condition or period. [Art. 1211, CC]

ACTIVE SOLIDARY OBLIGATION (among creditors)

Art. 1214, CC. 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.

Effects of Active Solidarity [Tolentino]

1. Death of solidary creditor does not transmit solidarity to his heirs but
rather to all of them taken together (joint)

394
 2. Each represents the other in receiving payment and all other
advantageous acts (i.e. interrupt prescription and render the debtor in
default for the benefit of all creditors)
3. Each one of the solidary creditors may do whatever may be useful to
the others, but not anything which may be prejudicial to the latter.
[Art. 1212, CC]
4. One creditor does NOT represent all others in acts such as novation
(even if advantageous), compensation and remission. In this case,
even if the debtor is released, the other creditors can still enforce their
rights against the creditor who made the novation, compensation or
remission [par. 2, Art. 1215, CC]
5. The creditor who collects the debt, shall be liable to the others for the
share in the obligation corresponding to them. [par. 2, Art. 1215, CC]
6. The credit and its benefits are divided equally among them, unless
agreement to the contrary.
7. 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 who demanded [Art. 1214, CC]

PASSIVE SOLIDARY OBLIGATION

General Rules
1. The creditor may proceed against any one of the solidary debtors or some
or all of them simultaneously...so long as the debt has not been fully
collected [Art. 1216, CC]
2. 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. [Art. 1217, CC]
3. 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. For defenses which
personally belong to the others, such debtor may avail himself thereof only
as regards that part of the debt for which the latter are responsible. [Art.
1222, CC]

Effects of Passive Solidarity [Tolentino]

1. Each debtor can be required to pay the entire obligation, but after
payment he can recover from the co-debtors their respective shares
2. Each debtor may set up his own claims against the creditor as
payment of the obligation
3. Remission of the entire debt affects all debtors, but when remission is
limited to the share of one debtor, the other debtors are still liable for
the balance of the obligation
a. The remission of the whole obligation, obtained by one of the solidary
debtors, does not entitle him to reimbursement from his co-debtors.
[Art. 1220, CC]

395
 b. 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 any
one of them before the remission was effected. [Art. 1219, CC]
4. All debtors are liable for the loss of the thing due, even if only one of
them is at fault, or after incurring delay it is lost by fortuitous event
5. Interruption of prescription as to one debtor affects all others, but
renunciation of prescription already had does not prejudice the others.
(Reason: prescription extinguishes the mutual representation among
solidary debtors)
6. Interests due by delay of one is borne by all of them

DEFENSES AVAILABLE TO A SOLIDARY DEBTOR [Art. 1222, CC]

1. Those derived from the nature of the obligation

Defenses inherent in an obligation include non-existence of the obligation
because of absolute simulation or illicit object, nullity due to defect in
capacity or consent of all debtors, unenforceability, nonperformance of
suspension condition or non-arrival of period, extinguishment of the
obligation, res judicata, and prescription.

2. Those personal to him

Personal defenses such as minority, insanity, fraud, violence, or intimidation
will serve as a complete exemption of the defendant debtor from liability to
the creditor

3. Those pertaining to his own share

4. Those personally belonging to other co-debtors but only as regards

that part of the debt for which the latter are responsible.

Comparing demand upon Solidary Debtor and Payment by a Solidary

Debtor

Demand Upon a Solidary Debtor Payment by a Solidary Debtor

The demand made against one of Full payment made by one of the
them shall not be an obstacle to solidary debtors extinguishes the
those which may subsequently be obligation [Art. 1217, CC].
directed against the others so long as
the debt has not been fully collected
[Art. 1216, CC].
The creditor may proceed against If two or more solidary debtors
any one of the solidary debtors or alloffer to pay, the creditor may
simultaneously [Art. 1216, CC]. choose which offer to accept [Art.
1217, CC].
A creditor’s right to proceed against The solidary debtor who made the
the surety exists independently of payment shall have the right to

396
 his right to proceed against the claim from his co-debtors the share
principal. which corresponds to them with
interest, UNLESS barred by
prescription or illegality [Art. 1218,
CC].

Loss of the thing or impossibility of performance of the passive/mixed

solidary obligation [Art. 1221, CC]

Without fault of the The obligation shall be extinguished.

debtors
With fault of any of All debtors shall be responsible to the creditor, for
the debtors the price and the payment of damages and interest,
without prejudice to their action against the guilty
or negligent debtor.
Through a All debtors shall be responsible to the creditor, for
fortuitous event after the price and the payment of damages and interest,
one incurred in without prejudice to their action against the guilty
delay or negligent debtor.

6. Obligations with a penal clause

Penal Clause
An accessory undertaking to assume greater liability in case of breach. It is
generally a sum of money, but it can be any other thing like an act or
abstention. [Tolentino]

If the principal obligation is void, the penal clause shall also be void.
However, the nullity of the penal clause does not carry with it the nullity of
the principal obligation [Art.1230, CC].

Rules on Penalty
a. The penalty shall substitute the indemnity for damages and payment of
interest in case of non-compliance [Art. 1226, CC], unless:
i. There is an express provision to that effect
ii. The obligor refuses to pay the penalty
iii. The obligor is guilty of fraud in non-fulfillment
b. Debtor cannot exempt himself from the performance of the principal
obligation by paying the stipulated penalty unless this right has been
expressly reserved for him [Art. 1227, CC].
c. Creditor cannot demand the fulfillment of the principal obligation and
demanding the satisfaction of the penalty at the same time unless the right
has been clearly granted to him [Art. 1227, CC]. A tacit or implied grant is
admissible.
i. If the creditor chooses to demand the satisfaction of the penalty,
he cannot afterwards demand the fulfillment of the obligation.
ii. If there was fault on the part of the debtor, creditor may demand

397
 not only the satisfaction of the penalty but also the payment of
damages. iii. If the creditor has chosen to demand the fulfillment
of the principal obligation and the performance thereof becomes
impossible without his fault, he may still demand the satisfaction of
the penalty.

Enforcement of the Penalty

The enforcement of the penalty can be demanded by the creditor only when
the nonperformance is due to the fault or fraud of the debtor. However, the
creditor does not have to prove fault or fraud, since the non-performance
gives rise to the presumption of fault. [Tolentino]

Proof of Actual Damage

Proof of actual damage suffered by the creditor is not necessary in order
that the penalty may be enforced [Art. 1228, CC].

When Penalty may be Reduced [Art. 1229, CC]:

1. If the principal obligation has been partly complied with.
2. If the principal obligation has been irregularly complied with.
3. If the penalty is iniquitous or unconscionable, even if there has been no
performance.

The question of whether a penalty is reasonable or iniquitous can be

partly subjective and partly objective. Its resolution would depend on
such factors as, but not necessarily confined to, the type, extent and purpose
of the penalty, the nature of the obligation, the mode of breach and its
consequences, the supervening realities, the standing and relationship of the
parties, and the like, the application of which, by and large, is addressed to
the sound discretion of the court. [Ligutan v CA, G.R. No. 138677 (2002)]

D. EXTINGUISHMENT OF OBLIGATIONS
Modes of extinguishing obligations
Art. 1231, CC. 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.

1. Payment or performance

398
a. Payment

The delivery of money OR The performance of obligation [Art. 1232,

CC]

OBJECT OF PAYMENT

1. Integrity of Prestation

General Rule: A debt is understood to have been paid when the thing or
service in which the obligation consists has been completely delivered or
rendered [Art. 1233, CC]

2. Identity of Prestation

For obligations to give: 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. [Art. 1244, CC]

For obligations to do or not to do: an act or forbearance cannot be

substituted by another act or forbearance against the obligee's will. [Art.
1244, CC]

Exceptions to Art. 1244, CC:

a. If the obligation is facultative [Art. 1206, CC]
b. If the creditor agrees (Dation in payment) [Art. 1245, CC]
c. Substantial Performance by Debtor (Creditor only has a right to
damages) [Art. 1234, CC]

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.

d. 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. [Art. 1235, CC]

Necessity of Complete Performance [Art. 1248, CC]

General Rules:
1. Creditor cannot be compelled partially to receive the prestations in which
the obligation consists.
2. Debtor may not be required to make partial payments
Exception:
1. There is an express stipulation that permits partial performance.
2. 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.

399
BY WHOM

Payor must have (1) free disposal of the thing due and (2) capacity to
alienate it. [Art. 1239, CC]

Free disposal of the thing due means that the thing to be delivered must not
be subject to any claim or lien or encumbrance of a third person. Capacity to
alienate means that the person is not incapacitated to enter into contracts
[Arts. 1327, 1329, CC] and for that matter, to make a disposition of the thing
due. [de Leon]

Payor may either be:

1. The debtor or his duly authorized agent
2. The debtor’s heir or successor in interest
3. A third person interested in the fulfillment of the obligation
(i.e. codebtor, guarantor) whether the debtor consents to it or
not, and even without debtor’s knowledge [Art. 1302, CC]. This
includes payment by a joint debtor [Monte de Piedad y Caja de
Ahorros de Manila v. Rodrigo, G.R. No. L-42928 (1936)] but
not a solidary co-debtor.
4. A third person not interested in the obligation; but the
creditor is not bound to accept payment by him, unless there is
a stipulation to the contrary [Art. 1236, CC].

Payment by a third person

General Rule: The creditor is not bound to accept payment or
performance by a third person who has no interest in the fulfillment of the
obligation [Art. 1236, CC]

Exception: Stipulation to the contrary [Art. 1236, NCC

Reimbursement for Payment Made by a Third Person
The third party pays with the The third party pays without the
consent of the debtor knowledge or consent of the
debtor
The third party may claim The third party may only claim
reimbursement for the full amount. insofar as the ayment has been
[Art. 1236, CC] beneficial to the debtor. [Art. 1236,
CC]
The third party is presumed to be The third party cannot compel the
legally subrogated [Art. 1302, CC] creditor to subrogate him on his
rights. [Art. 1237, CC]

Reimbursement & Subrogation Distinguished

Reimbursement Subrogation
Personal action to recover amount Includes reimbursement, but also
paid the exercise of other rights attached

400
 to the original obligation (e.g.
guaranties, securities)

Art. 1238, CC. 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.

TO WHOM

1. The person in whose favor the obligation has been constituted; orHis
successor in interest; or any person authorized to receive it [Art. 1240,
CC]
2. Payment to a person who is incapacitated to administer his property
shall be valid:
3. if he has kept the thing delivered, OR
4. insofar as the payment has been beneficial to him. [Art. 1241 par 1,
CC]
5. Payment made in good faith to any person in possession of the credit
shall release the debtor. [Art. 1242, CC]
6. Payment to a third person
7. Payment made to the creditor by the debtor after the latter has been
judicially ordered to retain the debt shall not be valid. [Art. 1243, CC]

General Rule
1. Valid insofar as it has redounded to the benefit of the creditor [par. 2, Art.
1241, CC]
2. Proof that such payment has redounded to the benefit of the creditor is
required.

Exceptions: [par. 2, Art. 1241, CC]

1. If after the payment, the third person acquires the creditor's rights
(SUBROGATION);
2. If the creditor ratifies the payment to the third person (RATIFICATION);
3. If by the creditor's conduct, the debtor has been led to believe that the
third person had authority to receive the payment (ESTOPPEL). [Art. 1241,
CC]

PLACE OF PAYMENT

1. In the place designated in the obligation.

2. In the absence of stipulation—
a. If obligation is to deliver a determinate thing: wherever the thing might
be at the moment the obligation was constituted.
b. In any other case: domicile of debtor [Art. 1251]

TIME OF PAYMENT

401
General Rule: Upon demand

Exceptions:
1. When time is of the essence
2. When the debtor loses the benefit of the period
3. When the obligation is reciprocal

FORM OF PAYMENT

Art. 1249, CC. 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.

When payment is made in money/ legal tender

General Rule: pay in the currency stipulated
Exception: payment not possible in such currency, then pay in legal tender.

Legal Tender
Such currency which in a given jurisdiction can be used in the payment of
debts, and which cannot be refused by the creditor.

When payment is not in legal tender

General Rule: The creditor may refuse to accept payment (e.g. checks) not
made in legal tender [Philippine Airlines v. Court of Appeals, G.R. No. L-
49188 (1990)].

Extraordinary Inflation or Deflation

Art. 1250, CC. 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.

b. Application of Payments

Art. 1252, par. 1, CC. 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.

Requisites

402
 1. There is a plurality of debts
2. Debts are of the same kind
3. Debts are owed to the same creditor and by the same debtor
4. All debts must be due, UNLESS parties so stipulate, or when
application is made by the party for whose benefit the term has been
constituted
5. Payment made is not sufficient to cover all debts [Art. 1252, CC]

Rules on Application of Payments

1. Preferential right of debtor - debtor has the right to select which of his
debts he is paying. [Art. 1252, CC]
2. The debtor makes the designation at the time he makes the payment.
3. If not, the creditor makes the application, by so stating in the receipt
that he issues, unless there is cause for invalidating the contract.
4. If neither the creditor nor debtor exercises the right to apply, or if the
application is not valid, the application is made by operation of law.
(see no. 6)
5. If debt produces interest, the payment is not to be applied to the
principal unless the interests are covered. [Art. 1253, CC]
6. When no application can be inferred from the circumstances of
payment, it is applied: (a) to the most onerous debt of the debtor; or
(b) if debts due are of the same nature and burden, to all the debts in
proportion. [Art. 1254, CC
7. Rules on application of payment may not be invoked by a surety or
solidary guarantor.

Exceptions
1. Rules on application of payment cannot be made applicable to a person
whose obligation as a mere surety is both contingent and singular. There
must be full and faithful compliance with the terms of the contract.
[Reparations Commission v. Universal Deep Sea Fishing Corp, G.R. Nos.
L-21901 and L-21996 (1978)]
2. The debtor’s right to apply payment can be waived and even granted to
the creditor if the debtor so agrees [Premiere Development v. Central Surety,
G.R. No. 176246 (2009)]

Limitations
1. Right of creditor to refuse partial payment [Art. 1248, CC]
2. Rule on satisfaction of interest before the Principal. [Art. 1453, CC]
3. Debtor cannot apply payment to a debt which is not yet liquidated
4. He cannot choose a debt with a period (established for the creditor’s
benefit) before the period has arrived.
5. Stipulation as to preference of payment. [Tolentino]

c. Dation in Payment

Delivery and transmission of ownership of a thing by the debtor to the

403
creditor as an accepted equivalent of the performance of the obligation
(dacion en pago).

Requisites
1. Existence of a money obligation
2. Alienation to the creditor of a property by the debtor with the creditor’s
consent
3. Satisfaction of the money obligation

d. Payment by Cession

Special form of payment where the debtor assigns/abandons ALL his

property for the benefit of his creditors in order that from the proceeds
thereof, the latter may obtain payment of their credits.

Requisites
1. There is a plurality of debts
2. There is a plurality of creditors
3. Partial or relative insolvency of debtor
4. Acceptance of the cession by the creditors [Art. 1255, CC]
5. Debtor is released only for the net proceeds unless there is a stipulation to
the contrary.

Cession and Dation Distinguished

Cession Dacion en pago
Plurality of creditors One creditor
Debtor must be partially or Debtor not necessarily in state of
relatively insolvent financial difficulty
Universality of property is ceded Thing delivered is equivalent of
performance
Merely releases debtor for the net Extinguishes obligation to the extent
proceeds of things of the value of the thing delivered,
ceded or assigned, unless there is as agreed upon, proved or implied
contrary intention from the conduct of the creditor
Involves all properties of debtor Does not involve all properties of
debtor
Creditor does not become owner of Creditor becomes Owner
the ceded property

e. Tender of Payment and Consignation

Tender of payment
Manifestation made by the debtor to the creditor of his desire to comply
with his obligation, with offer of immediate performance. [Del Carmen v.
Sps. Sabordo, G.R. No. 181723 (2014)]

Tender of payment must be made in the lawful currency. The tender of a

404
check to pay for an obligation is not a valid tender of payment thereof. [Soco
v. Militante, G.R. No. L-58961, (1983)]

Consignation
Deposit of the object of obligation in a competent court in accordance with
the rules prescribed by law whenever the creditor unjustly refuses payment
or because of some circumstances which render direct payment to the
creditor impossible or inadvisable.

Requisites of consignation
1. There is a debt due
2. Consignation is made because of some legal cause
a. There was tender of payment and creditor refuses without just
cause to accept it
b. Instances when consignation alone would suffice as provided
under Art. 1256
3. Previous notice of consignation was given to those persons interested in
the performance of the obligation. Previous notice is essential to the validity
of the consignation and its lack invalidates the same. [Soco v. Militante, G.R.
No. L- 58961, (1983)] (1st notice)
4. Amount or thing due was placed at the disposal of the court
5. After the consignation has been made, the persons interested were
notified thereof (2nd notice)

When tender and refusal not required [Art. 1256, CC]

1. Creditor is absent or unknown, or does not appear at the place of
payment.
2. Creditor is incapacitated to receive the thing due at the time of
payment.
3. Without just cause, creditor refuses to give receipt.
4. Two or more persons claim the same right to collect (i.e.
Interpleader)
5. Title of the obligation has been lost.
Unless there is an unjust refusal by a creditor to accept payment from a
debtor, Article 1256 cannot apply. [Llobrera v. Fernandez, G.R. No. 142882
(2006)].

What constitutes valid consignation

In order that the consignation of the thing due may release the obligor, it
must first be announced to the persons interested in the fulfilment of the
obligation. The consignation shall be ineffectual if it is not made strictly in
consonance with the provisions which regulate payment. [Art. 1257, CC]

How consignation is made

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

405
consignation having been made, the interested parties shall also be notified
thereof.

Who bears the expenses

The expenses of consignation, when properly made, shall be charged against
the creditor. [Art. 1259, CC]

Effects of Consignation
If accepted by the creditor or declared properly made by the Court:
1. Debtor is released in same manner as if he had performed the
obligation at the time of consignation
2. Accrual of interest is suspended from the moment of consignation.
3. Deterioration or loss of the thing or amount consigned, occurring
without the fault of debtor, must be borne by creditor from the
moment of deposit

Withdrawal of Consigned Amount by the Debtor

1. Before approval of the court or acceptance of the creditor- Obligation
remains in force. [par. 2, Art. 1260, CC]
2. After approval of the court or acceptance by the creditor, with the
consent of the latter - Obligation remains in force, but guarantors and
co-debtors are liberated. Preference of the creditor over the thing is
lost. [Art. 1261, CC]
3. After approval of the court or acceptance by the creditor, and without
creditor’s consent - debtor can no longer withdraw the consigned
amount since the obligation has already been extinguished [Pabugais
v. Sahijwani, G.R. No. 156846 (2004)]
4. If the creditor authorizes the debtor to withdraw, third persons who
were benefited by the consignation are not prejudiced by the revival
of the obligation.

2. Loss of determinate thing due or impossibility or difficulty of

performance
a. Loss

1. Loss of Determinate Things

General Rule: Loss of determinate things extinguishes the obligation

when: [Par. 1, Art. 1262 CC].
a. An obligation which consists in the delivery of a determinate thing
b. Thing is lost or destroyed
c. Debtor is without fault
d. Delay not incurred

However, the obligor is still liable for damages when the following
requisites concur: [Par. 2, Art. 1262 CC].
e. There is law or a stipulation for fortuitous events or the nature of

406
 the obligation requires an assumption of risk
f. The thing is lost

Exceptions (When the Loss Does Not Extinguish)

a. When the obligation to deliver a determinate object arises from a criminal
act. [Art. 1268, CC]
b. Acceptance of payments in bad faith. [Art. 2159, CC]

When the legal excuse of fortuitous event is not applicable, in cases of:
1. Delay or promise to deliver thing to two or more persons. [Art. 1165
(3), CC]
2. Nature of the Obligation Requires Assumption of Risk [Art. 1174, CC]
3. Liability of a Bailee in fortuitous events. [Art. 1942 , CC]
4. Liability of a depositary in fortuitous events. [Art. 1979, CC]
5. Liability of the officious manager in fortuitous events. [Art. 2147, CC]

2. Loss of Generic Things

Obligation is NOT Extinguished: In an obligation to deliver a generic

thing, the loss or destruction of anything of the same kind does not
extinguish the obligation. [Art. 1263 , CC]

3. Partial Losses

Upon the Determination of the Court: 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. [Art. 1264, CC]

4. Presumption of Fault

When Presumption Applies [Art. 1265, CC]:

a. Thing is lost while in the possession of the debtor
b. No proof of fortuitous event Effect: It is presumed that loss was due to
his fault.
Exceptions [Art. 1265, CC]
a. There is proof to the contrary
b. In case of earthquake, flood, storm or other natural calamity.

5. Loss in Obligations to Give With Resolutory Conditions

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:
a. If the thing is lost without the fault of the debtor, the obligation shall be
extinguished;
b. 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

407
goes out of commerce, or disappears in such a way that its existence is
unknown or it cannot be recovered. [Art. 1189, CC]

Effects of Loss [Arts. 1262-1263, CC]

Obligation to Deliver a Specific Obligation to Deliver a Generic
Thing Thing
Obligation is extinguished if the Loss of a generic thing does not
thing was destroyed without fault of extinguish an obligation, EXCEPT
the debtor and before he has in case of delimited generic things,
incurred delay. where the kind or class is limited
itself, and the whole class perishes.

b. Impossibility or Difficulty of Performance

1. Impossibility
The debtor in obligations to do shall also be released when the prestation
becomes legally or physically impossible without the fault of the obligor.
[Art. 1266, CC]

Triggers
a. Obligation to do
b. Becomes legally or physically impossible

Impossibility at Constitution and Subsequent Impossibility

Distinguished
Impossibility at the Time the Impossibility which Supervenes at
Obligation was Constituted [Art. the Time of Performance [Art.
1348, CC] 1266]
Brings about the nullity of the Brings about a modification or
contract extinguishment of the obligation,
depending on whether or not it is
imputable to the debtor

TYPES OF IMPOSSIBILITY
a. Physical and Legal
Physical Impossibility: There is physical impossibility when the act, by
reason of its nature, cannot be accomplished. [Tolentino]

Legal Impossibility: There is legal impossibility when, the act, by

subsequent law, is prohibited. [Tolentino]

b. Subjective and Objective

Objective Impossibility: There is objective impossibility when the act or
service in itself, without considering the person of the obligor, becomes
impossible. [Tolentino]

Subjective Impossibility: There is subjective impossibility when the act or

408
service cannot be done by the debtor himself, but it can be accomplished by
others. [Tolentino]
Partial Impossibility: The rule in Art. 1264 (Partial Loss) may be applied.
Thus the Courts shall determine whether it is so important as to extinguish
the obligation. If the debtor has performed part of the obligation when
impossibility occurred, the creditor must pay the part done as long as he
benefits from it. [Tolentino]

2. Unforeseen Difficulty

When the service has become so difficult as to be manifestly beyond the

contemplation of all the parties, the obligor may also be released
therefrom, in whole or in part. [Art. 1267, CC].

Requisites
a. The event or change in circumstances could not have been foreseen at
the time of the execution of the contract;
b. It makes the performance of the contract extremely difficult but not
impossible;
c. The event must not be due to the act of any of the parties; and
d. The contract is for a future prestation. [Tagaytay Realty Co, Inc. v.
Gacutan G.R. No. 160033, July 01, 2015]

Doctrine of Unforeseen Events

The parties to the contract must be presumed to have assumed the risks of
unfavorable developments. It is therefore only in absolutely exceptional
changes of circumstances that equity demands assistance for the debtor.
[PNCC v. CA, G.R. No. 1116896 May 5, 1997.]

Fortuitous Events, Loss/Impossibility, and Unforeseen Difficulty

Distinguished
Fortuitous Loss/ Unforeseen
Events Impossibility Difficulty
Elements Could not have Perishes, goes out Could not have
been foreseen or of commerce or been foreseen.
foreseen but disappears Service has
inevitable. become so
Causes loss of difficult but not
the thing or impossible.
obligation could
not be complied
with in the
normal manner
Fault Without fault May be with or Without
without fault Fault
Effect Non-liability for If without fault, Release from the

409
 delay/ damages extinguishes the obligation in
obligation; If with whole or in part
fault, liability for
damages

Creditors’ rights
Art. 1269, CC. 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.

Requisites:
a. Obligation is extinguished
b. Extinguishment is due to the loss of the thing

Effect: Creditor shall have all rights of action which the debtor may have
against third persons by reason of the loss.

3. Condonation or remission of debt

a. Definition and General Rule

General Rules
1. Condonation or remission is essentially gratuitous, and
2. requires the acceptance by the obligor.
3. It may be made expressly or impliedly.
4. One and the other kinds shall be subject to the rules which govern
inofficious donations. Express condonation shall, furthermore, comply with
the forms of donation. [Art. 1270, CC]

Requisites [Tolentino]
1. The debt must be existing and demandable;
2. The renunciation must be gratuitous; and
3. The debtor must accept the remission.
Effect: The obligation is extinguished.

Definition
Remission is an act of liberality, by virtue of which, without receiving any
equivalent, the creditor renounces the enforcement of the obligation. The
obligation is extinguished either in whole or in such part of the same to
which remission refers. [Tolentino]

If 2nd Requisite not Met

If the renunciation is not gratuitous, the nature of the act changes and it may
become:
1. Dation in payment – when the creditor receives a thing different from
that stipulated;
2. Novation – when the object or principal conditions of the obligation have
changed; or

410
3. Compromise – when the matter renounced is in litigation or dispute and
in exchange of some concession which the creditor receives. [Tolentino]

b. Kinds of Remission

1. As to Form
a. Express Condonation

It is formally: in accordance with forms of ordinary donations. [Art. 1270,

CC]

An express remission must be accepted in order to be effective.

When the debt refers to movable or personal property, Art. 748 will govern;
if it refers to immovable or real property, Art. 749 applies.

b. Implied Condonation

It is inferred from the acts of the parties.

2. As to Extent
a. Total - extinguishes the entire obligation; or
b. Partial - refers to only a particular aspect of the obligation, i.e. amount of
indebtedness or an accessory obligation. [Tolentino]

3. As to Manner
a. Inter vivos - effective during the lifetime of the creditor; or
b. Mortis Causa - effective upon the death of the creditor.
c. Rules and Form

1. Express Remission
Art. 1270 (2), CC: One and the other kinds shall be subject to the rules
which govern inofficious donations. Express condonation shall,
furthermore, comply with the forms of donation.

The law subjects express remission to the same formalities as donations.

Express Remission of Movable or Personal Property

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. [Art. 748, CC]

Express Remission of Immovable or Real Property

In order that the donation of an immovable may be valid, it must be made
in a public document, specifying therein the property donated and the value

411
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. [Art. 749, CC]

2. Implied Remission

Presumption of Renunciation
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 [Art. 1271, CC]

Trigger: (1) Delivery of a private document evidencing a credit; and (2)

delivery was made voluntarily by the creditor to the debtor

Effect: There will be implied renunciation.

Exception: The contrary is proved.

Note: 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. [Art.
1271, CC]

Presumption of Renunciation of Accessory

Obligation
Accessory obligation of pledge has been remitted when the thing after its
delivery is found in the possession of the debtor or third person. [Art. 1274,
CC]

Triggers: (1) A thing is pledged; (2) there has been a delivery of such thing
to the creditor; or (3) the thing pledged is found in the possession of the
debtor, or of a third person who owns the thing.

Effect: It is presumed that the accessory obligation of pledge has been

remitted.

Presumption of Delivery
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. [Art. 1272, CC]

Trigger: The private document in which the debt appears is found in the
possession of the debtor.

412
Effect: There is a presumption that it has been voluntarily delivered by the
creditor.

Exception: The contrary is proved.

3. Partial Remission

Renunciation of the principal debt shall extinguish the accessory

obligations, but remission of the latter leaves the principal obligation in
force. [Art. 1273, CC]

Trigger: The remission was only to the extent of the accessory obligation
Effect: The principal obligation remains in Force

4. Other Rules on Donation Applicable to Remission

Condonation or remission is essentially a donation. It is a bilateral act which

requires acceptance by the debtor. It is therefore subject to the rule on
donations with respect to acceptance, amount and revocation; where donor
refers to the creditor, and donee to the debtor, and donation to the remission.
[Tolentino]

On Acceptance
1. 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. [Art. 745, CC]
2. Acceptance must be made during the lifetime of the donor and of the
donee. [Art. 746, CC]

On Amount
1. The donation may comprehend all the present property of the donor, or
part thereof, 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 on petition of any
person affected. [Art. 750, CC]
2. The provisions of Art. 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. [Art.
752, CC]

Effect: Renunciation of the principal debt shall extinguish the accessory

obligations, but remission of the latter leaves the principal obligation in
force. [Art. 1273, CC]

4. Confusion

413
Definition
The meeting in one person of the qualities of creditor and debtor of the same
obligation. [Tolentino]

Requisites
a. It should take place between principal debtor and creditor;
b. The very same obligation must be involved; and
c. The confusion must be total, i.e. as regards the whole obligation.
[Valmonte v. CA, G.R. No. L-41621, February 18, 1999]

Effects
a. In general
The obligation is extinguished from the time the characters of the debtor and
creditor are merged in the same person. [Art. 1275, CC]

b. Confusion among the Guarantors

A 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.

c. In case of joint or solidary obligation

Confusion in Joint Obligation Confusion in Solidary Obligation
Confusion DOES NOT extinguish Extinguishes the entire obligation,
a joint obligation EXCEPT as but the other debtors may be liable
regards the share of the person in for reimbursement if payment was
whom the two characters concur made prior to remission.
[Art. 1277, CC]

Obligation is not extinguished when confusion takes place in the person of

subsidiary debtor (i.e. guarantor), but merger in the person of the principal
debtor shall benefit the former.

Note: Where, however, the mortgagee acquires ownership of the entire

mortgaged property, the mortgage is extinguished; but this does not
necessarily mean the extinguishment of the obligation secured thereby,
which may become an unsecured obligation.

5. Compensation
Definition [Art. 1278, CC]
Compensation shall take place when two persons, in their own right, are
creditors and debtors of each other.

Requisites [Art. 1279, CC]

a. Each obligor is bound principally, and at the same time a
principal creditor of the other;
b. Both debts must consist in a sum of money, or if the things due
are consumable, of the same kind and quality;

414
Note: The term ‘consumable’ is erroneously used in Art 1279. The
appropriate term is ‘fungible’. [Tolentino]

c. Both debts are due;

d. Debts are liquidated and demandable; and
e. There must be no retention or controversy over either of the
debts, commenced by third persons and communicated in due
time to the debtor.

To warrant the application of set off under Article 1278 of the Civil Code,
the debtor’s admission of his obligation must be clear and categorical
and not one which merely arise by inference or implication from the
customary execution of official documents in assuming the responsibilities
of a predecessor [Bangko Sentral v. COA, G.R. No. 168964 (2006)]

a. Nature and Effects

General Rule
When all requisites mentioned in Art. 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. [Art. 1290, CC]

By Operation of Law
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. [Art. 1286 CC]

Compensation takes effect by operation of law even without the consent or

knowledge of the parties concerned when all the requisites mentioned in
Article 1279 of the Civil Code are present. [Trinidad v. Acapulco, G.R.
No. 147477, June 27, 2006.]

Compensation Distinguished from Other Modes of Extinguishment

Compensation Confusion
There must always be two Involves only one obligation.
obligations.
There are two persons who are There is only one person whom the
mutually debtors and creditors of characters of the creditor and
each other in two separate debtor meet.
obligations, each arising from the
same cause.

Compensation Payment
Capacity to dispose and receive the Requires capacity to dispose of the
thing is unnecessary since thing paid and capacity to receive

415
 compensation operates by law
May be partial Must be total Performance

Compensation Counterclaim
Takes place by operation of law Must be pleaded to be effectual

b. Kinds of Compensation

As to extent [Art. 1281, CC]

1. Total – when two debts are of the same amount
2. Partial - when the two obligations are of different amounts and a balance
remain

As to cause
1. Legal
2. Voluntary
3. Judicial
4. Facultative

LEGAL COMPENSATION
Takes place by operation of law from the moment all requisites are present.

Since it takes place ipso jure, when used as a defense, it retroacts to the date
when all its requisites are fulfilled.

Art. 1290, CC. 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.

Legal compensation may apply to:

1. Awards of attorney’s fees, against the litigant and not his lawyer [Gan
Tion v. CA, G.R. No. L-22490 (1969)]
2. Bank deposits, against the accounts of a depositor whose checks were
dishonored [BPI v. CA, G.R. No. 116792 (1996)]

VOLUNTARY COMPENSATION
Takes place when parties who are mutually creditors and debtors of each
other agree to compensate their respective obligations even though one of
the requisites of compensation may be lacking.

Art. 1282, CC. The parties may agree upon the compensation of debts
which are not yet due.

The only requisites of conventional compensation are (1) that each of the
parties can dispose of the credit he seeks to compensate, and (2) that
they agree to the mutual extinguishment of their credits [United Planters
v. CA, G.R. No. 126890 ((2009)].

416
JUDICIAL COMPENSATION
Takes place by judicial decree.

Art. 1283, CC. 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.

FACULTATIVE COMPENSATION
When it can be claimed by one of the parties who, however, has the right to
object to it.

This kind of compensation can only be set up at the option of a creditor,

when legal compensation cannot take place because some legal requisites in
favor of the creditor are lacking.

Obligations which cannot be compensated [Arts. 1287-1288, CC]

1. Contracts of depositum
2. Contracts of commodatum
3. Future support due by gratuitous title
4. Civil liability arising from a penal offense
5. Obligations due to the government
6. Damage caused to the partnership by a partner

Right of a Guarantor
A guarantor may set up compensation as regards what the creditor may owe
the principal debtor. [Art. 1280, CC]

Effect of Assignment of Rights by the Creditor to a Third Person [Art.

1285, CC]
With debtor’s consent Debtor cannot set up against assignee
compensation pertaining to him against assignor
UNLESS he reserved such right at the time he
gave his consent
With debtor’s Debtor may set up compensation of debts
knowledge but previous to the assignment but not of subsequent
without consent ones
Without debtor’s Debtor may set up compensation of all credits
knowledge prior and also later to the assignment until he had
knowledge of the assignment

Order of Compensation
If a person should have against him several debts which are susceptible of
compensation, the rules on application of payments shall apply to the order
of the compensation. [Art. 1289 CC]

6. Novation

417
Obligations may be modified by:
a. Changing their object or principal conditions;
b. Substituting the person of the debtor; and
c. Subrogating a third person in the rights of the creditor. [Art. 1291, CC]

Unlike other modes of extinguishment, it is a juridical act of dual function

—it extinguishes an obligation, and at the same time, it creates a new one
in lieu of the old. It operates as a relative, not an absolute, extinction.

Requisites:
a. A previous valid obligation
b. Agreement of all the parties to the new obligation
c. Animus novandi or intent to novate
d. Substantial difference between old and new obligations and,
consequently, extinguishment of the old obligation
e. Validity of the new obligation

Effects
In General If Original Obligation If New Obligation is
is Void Void
Old obligation is Novation is void if the New obligation is void,
extinguished and original obligation was the old obligation
replaced by the new void, EXCEPT when subsists, UNLESS the
one stipulated. annulment may be parties intended that the
claimed only by the former relations shall be
debtor, or when extinguished in any
ratification validates event [Art. 1297, CC]
acts that are voidable
[Art. 1298, CC] a. New obligation void:
No novation.
a. Original obligation is b. New obligation
void: No novation. voidable: Novation is
b. Original obligation effective.
voidable: Effective if
contract is ratified
before novation.

Accessory Obligations
Accessory obligations are also extinguished, but may subsist only insofar as
they may benefit third persons who did not give their consent to the
novation. [Art. 1296, CC]

Accidental Modifications
The extension or shortening of the period for the performance of the
obligation is generally considered as merely accidental and does not bring
about a novation. [Tolentino]

418
Original or new obligation with suspensive or resolutory condition
Art. 1299, CC. If the original obligation was subject to a suspensive or
resolutory condition, the new obligation shall be under the same condition,
unless it is otherwise stipulated.

Compatible Conditions Incompatible Conditions

a. Fulfillment of both conditions: a. Original obligation is
new obligation becomes extinguished, while new obligation
demandable. exists.

b. Fulfillment of condition b. Demandability shall be subject to

concerning the original fulfillment/ nonfulfillment of the
obligation: old obligation is condition affecting it.
revived; new obligation loses force.

c. Fulfillment of condition
concerning the new obligation: no
novation; requisite of a previous
valid and effective obligation
lacking.

a. Kinds of Novation

AS TO FORM
1. Express – declared in unequivocal terms
2. Implied – the old and new obligations are on every point incompatible
with each other

Novation is not presumed

In the absence of an unequivocal declaration of extinguishment of the pre-
existing obligation, only proof of incompatibility between the old and new
obligation would warrant a novation by implication. [California Bus Line v.
State Investment, G.R. No. 147950 (2003)]

Test of Incompatibility
The test of incompatibility is whether or not the two obligations can stand
together, each one having its independent existence. If they cannot, they are
incompatible and the latter obligation novates the first.

The incompatibility must take place in any of the essential elements of the
obligation, such as its object, cause or principal conditions thereof;
otherwise, the change would be merely modificatory in nature and
insufficient to extinguish the original obligation [Quinto v. People, G.R. No.
126712 (1999)]

AS TO ESSENCE OR OBJECT

419
1. Objective/Real
2. Subjective/Personal

AS TO ESSENCE OR OBJECT
Objective/Real Subjective/Personal
1. Change of the subject matter; 1. Substitution of debtors
2. Change of cause or a. Expromision
consideration; or b. Delegacion
3. Change of the principal 2. Subrogation of a third person to
conditions or terms the rights of the creditor
a. Conventional
b. Legal

1. Substitution of Debtors

Expromision Delegacion
Initiative for change does not Debtor (delegante) offers or
emanate from the debtor, and initiates the change, and the
may even be made without his creditor (delegatorio) accepts a
knowledge. third person (delegado) as
consenting to the substitution.
Requisites
1. Consent of the creditor and the Consent of
new debtor; and 1. old debtor;
2. Knowledge or consent of the 2. new debtor; and
old debtor is not required. 3. creditor.
Effects
1. Old debtor is released 1. Insolvency of the new debtor
2. Insolvency of the new debtor revives the obligation of the old
does not revive the old debtor if it was anterior and
obligation in case the old debtor public, and known to the old
did not agree to expromision. debtor.
3. If with the knowledge and 2. New debtor can demand
consent of the old debtor, the reimbursement of the entire
new debtor can demand amount he has paid from the
reimbursement of the entire original debtor. He may compel
amount paid and with the creditor to subrogate him to
subrogation of creditor’s rights. all of his rights.
4. If without knowledge of the
old debtor, the new debtor can
demand reimbursement only up
to the extent that the latter has
been benefited without
subrogation of creditor’s rights.

For subjective novation, it is insufficient that the juridical relation

420
between the parties to the original contract is extended to a third
person. If the old debtor is not released, no novation occurs and the third
person who has assumed the debtor’s obligation becomes merely a co-debtor
or surety or co-surety. [Conchinyan, Jr. v. R&B Surety and Insurance
Company, G.R. No. L-47369, (1987)]

An accessory surety may not be released if he expressly waives his

discharge from the obligation in case of change or novation in the original
agreement. [Molino v. Security Diners International Corp, G.R. No. 136780
(2001)].

2. Subrogation

Transfers to the person subrogated the credit with all the rights thereto
appertaining, either against the debtor or against third persons, be they
guarantors or possessors of mortgages, subject to stipulation in a
conventional subrogation. [Art. 1303, CC]

Effects
Total Partial
Transfers to the person subrogated, A creditor, to whom partial
the credit with all the rights thereto payment has been made, may
appertaining, either against the exercise his right for the remainder,
debtor or third persons. and shall be preferred to the person
subrogated in his place in virtue of
the partial payment.

Conventional Subrogation – takes place by agreement of parties

Difference between Conventional Subrogation and Assignment of

Credit [Licaros v. Gatmaitan, G.R. No. 142838 (2001)]
Conventional subrogation Assignment of credit
Debtor’s consent is necessary. Debtor’s consent is not required.
Extinguishes an obligation and Refers to the same right which
gives rise to a new one. passes from one person to another,
without modifying or extinguishing
the obligation.
Defects/vices in the old obligation Defects/vices in the old obligation
are cured. are not cured.

Legal Subrogation
Takes place by operation of law.

Legal subrogation is not presumed, except in the following

circumstances:
a. When creditor pays another creditor who is preferred, even without the
debtor’s knowledge

421
b. When a third person not interested in the obligation pays with the express
or tacit approval of the debtor
c. When, even without the knowledge of 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 [Art. 1302, CC]

VI. CONTRACTS

A. GENERAL PROVISIONS
1. Stages of contracts
a. Preparation (conception or “generation” or negotiation) – begins from
time the parties manifest their interest and ends prior to the moment of
agreement
b. Perfection (or birth) – when the parties agreed upon essential elements of
contract
c. Consummation (or death) - when parties fulfill or perform the agreement

Preparation Perfection Consummation

Exchanges of offers Parties come to an Parties perform their
and counteroffers. agreement. obligations under the
contract
No contract yet, thus All the essential
no binding effect requisites concur The stage to look at to
determine whether
The stage to look at to there has been a breach
determine the status of of the contract
the contract (i.e., valid,
voidable, void,
unenforceable)

2. Classification
a. To their subject matter
• Things, e.g. sale, deposit, pledge
• Services, e.g. agency, lease of services

b. To formation or perfection
• Consensual – consent is sufficient to perfect the contract [Art. 1315, CC]
• Real – delivery, actual or constructive, is required in addition to consent
[Art. 1316, CC]
• Solemn or formal – where special formalities are required for perfection
[Art. 1356, CC]

c. To relation to other contracts

• Principal – may exist alone; e.g. lease
• Accessory – depends on another contract for its existence, e.g. guaranty

422
• Preparatory – a preliminary step towards the celebration of a subsequent
contract; e.g. agency

d. To form
• Common or informal – may be entered into in whatever form as long as
there is consent, object and cause
• Special or formal – required by law to be in a certain specified form

e. To cause/by equivalence of prestations

• Onerous – there is an exchange of correlative values, e. g. sale
• Remuneratory – where the outstanding prestation is premised upon
services or benefits already received

• Gratuitous – where no correlativeprestation is received by one party, e.g.

donation, commodatum

f. To purpose
• Transfer of ownership, e.g. sale
• Conveyance of Use, e.g. commodatum
• Rendition of Service, e.g. agency

g. To time of fulfillment
• Executed – where the obligations are fulfilled at the time the contract is
entered into
• Executory – where fulfillment of obligations does not take place at the
time the contract is made

h. To risk
• Commutative – fulfillment is predetermined in advance
• Aleatory – fulfillment is dependent upon chance
i. To the nature of the vinculum produced
• Unilateral – only one party is bound by the prestation, e.g. commodatum
• Bilateral – both parties are bound by reciprocal prestations, e.g. sale
o All contracts are bilateral in the consent, but not all are bilateral in effects.

j. To their designation/name
• Nominate – where the law gives the contract a special designation or
particular name; e.g. deposit
• Innominate – where the contract has no special name
o Do ut des (I give so that you may give)
o Do ut facias (I give so that you may do)
o Facio ut facias (I do so that you may do)
o Facio ut des (I do so that you may give)

Art. 1307, CC. 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

423
 the place.

3. Essential requisites
Art 1318, CC. There is no contract unless the following requisites concur:
a. Consent of the contracting parties;
b. Object certain which is the subject matter of the contract
c. Cause of the obligation which is established

a. Consent

The meeting of the minds of the parties on the subject matter and cause
of the contract. The facts that the signatures of the witnesses and the notary
public were forged does not negate the existence of the contract for as
long as the parties consented to it. The signatures of the witnesses and the
notary public are necessary simply to make the contract binding on the third
person. [Soriano v. Soriano, G.R. No. 130348 (2007)]

Requisites for valid consent

a. It must be manifested by the concurrence of the offer and acceptance

[Arts. 1319- 1326, CC].

b. The contracting parties must possess the necessary legal capacity [Arts.
1327-1329, CC].

c. It must be intelligent, free, spontaneous, and real (not vitiated) [Arts.

1330-1346, CC].

CONCURRENCE OF OFFER AND ACCEPTANCE

A contract is perfected by mere consent. From the moment of a meeting of

the offer and the acceptance upon the object and the cause that would
constitute the contract, consent arises. However, “the offer must be
certain” and “the acceptance seasonable and absolute; if qualified, the
acceptance would merely constitute a counteroffer. [Insular Life v. Asset
Builders Corp., G.R. No. 147410 (2004)]

OFFER

424
A unilateral proposition which one party makes to the other for the
celebration of the contract. [Tolentino]

Invitation to make offers (Advertisements)

a. Business Advertisements of things for sale are NOT definite offers, just
invitations to make an offer, UNLESS the contrary appears [Art. 1325, CC].

b. Advertisement for bidders are invitations to make proposals, the

advertiser is NOT bound to accept the lowest or highest bid; UNLESS the
contrary appears. The bidder is the offeror [Art. 1326, CC].

The Terms and Conditions of the bidding disseminated… constitutes the

"advertisement" to bid on the project. The bid proposals or quotations
submitted by the prospective suppliers… are the offers. The reply…
constitutes the acceptance or rejection of the respective offers. [Jardine
Davies v. CA, G.R. No. 128066 (2000)]

c. Statements of intention: no contract results even if accepted.

In a letter informing another that the sender was “in a position and is willing
to entertain” the purchase of a yacht under some terms, the word “entertain”
applied to an act does not mean the resolution to perform said act, but
simply a position to deliberate for deciding to perform or not to perform said
act. It was merely a position to deliberate whether or not he would purchase
the yacht and invitation to a proposal being made to him, which might be
accepted by him or not. [Rosenstock v. Burke, G.R. No. 20732 (1924)]

Termination of Offer

a. Rejection by the offeree

b. Incapacity (death, civil interdiction, insanity, or insolvency) of the
offeror or offeree before acceptance is conveyed [Art. 1323, CC]
c. Submission of a counter-offer
d. Lapse of the time stated in the offer without acceptance being
conveyed
e. Revocation of the offer before learning of acceptance

425
 f. Supervening illegality before acceptance [Reyes and Puno]

ACCEPTANCE

To produce a contract, the acceptance must not qualify the terms of the offer.
It is necessary that the acceptance be unequivocal and unconditional, and
the acceptance and the proposition shall be without any variation
whatsoever; and any modification or variation from the terms of the offer
annuls the latter and frees the offeror. [Tolentino]

Acceptance must be absolute, unconditional, and without variance of any

sort from the offer. It must also be made known to the offeror. An
acceptance not made in the manner prescribed is not effective but
constitutes a counter-offer. [Malbarosa v. CA, G.R. No. 125761 (2003)]

Requisites of Acceptance

a. Unqualified and unconditional, i.e. it must conform with all the

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

Cognition Theory

Acceptance made by letter or telegram does not bind the offeror 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. [par. 2, Art.
1319, CC]

Option Contract

426
A preparatory contract in which one party grants to the other, for a fixed
period, the option to decide whether or not to enter into a principal contract.
[Art. 1324, CC]

With consideration Without consideration

Offeror cannot unilaterally Offeror may withdraw by
withdraw his offer. communicating withdrawal to the
offeree before acceptance.

Art. 1324, CC provides the General Rule regarding offer and acceptance:
when the offerer gives to the offeree a certain period to accept, "the offer
may be withdrawn at any time before acceptance" except when the
option is founded upon consideration.

However, Art. 1479, CC modifies the General Rule, which applies to "a
promise to buy and sell" specifically. This rule requires that a promise to
sell to be valid and binding must besupported by a consideration distinct
from the price. Otherwise, the option can still be withdrawn, even if
accepted. [Tuazon v. Del Rosario-Suarez, G.R. No. 168325 (2010)]

NECESSARY LEGAL CAPACITY

There are two types of void contracts:

a. Those where one of the essential requisites of a valid contract as

provided for by Article 1318 of the Civil Code is totally wanting; and

b. Those declared to be so under Article 1409 of the Civil Code. By

contrast, a voidable or annullable contract is one in which the essential
requisites for validity under Article 1318 are present, but vitiated by mistake,
violence, intimidation, undue influence, or fraud [Art. 1330, CC].

Persons incapacitated to give consent [Art. 1327, CC]

a. Minors, EXCEPT:

1. Where necessaries are sold or delivered [Art 1489, CC]

427
 2. Where the minor actively misrepresents his age (estoppel)
3. When it involves a natural obligation and such obligation is fulfilled
voluntarily by the minor [Art. 1425-27, CC]
4. Contracts entered into by guardians or legal representatives
5. When upon reaching the age of majority they ratify the same
6. When a minor opens a savings account without the assistance of his
parents, provided that the minor is at least 7 years old and can read
and write [PD 1734].

b. Insane or demented persons, UNLESS they contract during a lucid

interval. [Art. 1328, CC]

c. Deaf-mutes who do not know how to read AND write.

Minors were held in estoppel through active misrepresentation. [Mercado

v. Espiritu, G.R. No. L-11872 (1917)]

There is no estoppel if the minority was known by the other party, and
there was no active misrepresentation on the part of the minors. [Bambalan
v. Maramba, G.R. No. L- 27710 (1928)]

Persons Disqualified to Contract

a. Those under civil interdiction for transactions inter vivos [Art. 34,
RPC]
b. Undischarged insolvents [Sec. 24, Insolvency Law]
c. Husband and wife cannot donate to each other [Art. 123, FC], nor sell
to each other if the marriage is under the regime of Absolute
Community of Property [Art. 1490, CC]
d. The ff. cannot purchase, whether in public or private sale [Art. 1491,
CC]:
1. Guardian - Property of the ward
2. Agent - Property of the Principal
3. Executors and Administrators - Property under administration
4. Public Officers - Property under their administration

5. Justices, judges, prosecutors, clerks of court, lawyers - property

428
 attached in litigation

Incapacity to Give Consent vs. Disqualification to Contract

Incapacity to Give Consent Disqualification to Contract

Restrains the exercise of the right to Restrains the very right itself
contract
Based upon subjective Based upon public policy and
circumstances of certain persons morality
Voidable Void

INTELLIGENT, FREE, SPONTANEOUS, AND REAL (NOT

VITIATED)

Vices of Consent (makes contract voidable) [Art. 1330, CC]

1. Mistake

2. Intimidation

3. Violence

4. Undue influence

5. Fraud

MISTAKE

“A misunderstanding of the meaning or implication of something” or a

“wrong action or statement proceeding from a faulty judgment”. [Domingo
Realty v. CA]

Inadvertent and excusable disregard of a circumstance material to the

contract [Reyes and Puno]

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.

429
[Art.1331, CC]

There is no mistake if the party alleging it knew the doubt, contingency or

risk affecting the object of the contract. [Art. 1333, CC]

Requisites

a. The error must be substantial regarding:

1. The object of the contract (error in re) which may be:

• Mistake as to the identity of the thing (error in corpore)
• Mistake as to the substance of the thing (error in substantia)
• Mistake as to the conditions of the thing provided, or
• Mistake as to the quantity of the thing (error in quantitate)
2. The condition which primarily moved or induced one or both
parties to enter the contract.
3. Identity or qualifications of one of the parties (error in persona),
but only if such was the principal cause of the contract.

b. The error must be excusable

c. The error must be a mistake of fact and not of law.

Mistake which vitiates consent is an error of fact, and not an error of law.
Ignorance of the law excuses no one from compliance therewith [Art. 3,
CC]; but the modern tendency is to allow an excusable mistake of law to be
invoked as vitiating consent. [Tolentino]

See also Art. 526, CC on Possession: Mistake upon a doubtful or difficult

question of law may be the basis of good faith.

Ignorantia Facti Excusat vs. Ignorantia Legis Neminem Excusat

Mistake of Fact Mistake of Law

One or both contracting parties One or both parties arrive at an
believe that a fact exists when in erroneous conclusion on the
reality it does not, or vice versa interpretation of a question of law or

430
 its legal effects
Vitiates consent Does not vitiate consent EXCEPT
when it involves mutual error as to
the effect of an agreement when the
real purpose is frustrated.

Note: The obligation to show that the terms of the contract had been fully
explained to the party who is unable to read or understand the language of
the contract, when fraud or mistake is alleged, devolves on the party seeking
to enforce it. [Art. 1332, CC]

INTIMIDATION

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. [Art. 1335, CC]

To determine the degree of intimidation, the age, sex and condition of the
person shall be borne in mind. [Art. 1335, CC]

Requisites

a. One party is compelled to give his consent by a reasonable and well-

grounded fear of an evil;

b. The evil must be imminent and grave;

c. The evil must be upon his person or property, spouse, descendants or

ascendants;

d. The evil must be unjust.

VIOLENCE

Serious or irresistible force used to wrest consent [Art. 1335, CC]

431
 Violence Intimidation
Serious or irresistible force Reasonable and well-grounded fear of an
imminent and grave evil upon his person
or property, or person or property of his
spouse, descendants, or ascendants
Physical compulsion Moral compulsion
External or prevents the will Internal or induces the performance of an
to manifest itself act
Determined by 1) Intention 2) 1) Age 2) Sex 3) Condition
Means employed
1) Physical force employed 1) Intimidation must be the determining
must be irresistible, or of such cause of the contract OR must have
degree that victim has no caused the consent to be given
other recourse under the
circumstances but to submit 2) Threatened act must be unjust or
unlawful
2) Such force is the
determining cause in giving of 3) The threat must be real and serious
consent
4) Produces a reasonable and well-
grounded fear from the fact the person
has the necessary means or ability to
inflict threatened injury

Note: 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.
[Art. 1336, CC]

UNDUE INFLUENCE

When a person takes improper advantage of his power over the will of
another, depriving the latter of a reasonable freedom of choice. [Art. 1337,
CC]

Requisites

a. Improper advantage

b. Power over the will of another

c. Deprivation of the latter’s will of a reasonable freedom of choice

432
Circumstances to consider

a. Relationship of the parties (family, spiritual, confidential etc.)

b. That the person unduly influenced was suffering from mental weakness,
ignorance or in financial distress [Art.1337, CC]

Note: By analogy, undue influence employed by a third person may annul

the contract.

Test of Undue Influence: Whether or not the influence exerted has so

overpowered or subjugates the mind of a contracting party as to destroy
his free agency, making him express the will of another rather than his own.
[Coso-Fernandez v. Deza, G.R. No. L-16763 (1921)]

Intimidation Undue Influence

Must be an unlawful act or unjust There need not be an unjust or
act which is threatened and which unlawful act.
causes the consent to be given

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. [Art. 1338, CC]

In order that fraud may make a contract voidable, it should be serious and
should not have been employed by both contracting parties. [Art. 1344,
CC]

Requisites:

a. It must be made in bad faith

b. One party must have employed fraud or insidious words or

433
 machinations
c. Damage or injury resulted to the other party
d. It must have been serious
e. It induced the other party to enter into a contract
f. It must have been employed by one contracting party upon the
other and not employed by both contracting parties nor by third
persons.

Determining the existence of Fraud

a. Not Fraudulent

1. Usual exaggerations in trade, when the other party had an opportunity

to know the facts [Art. 1340, CC]
2. A mere expression of an opinion UNLESS made by an expert and the
other party has relied on the former’s special knowledge [Art. 1341,
CC]
3. Misrepresentation made in good faith [Art. 1343, CC]

Note: Not fraudulent, but this may constitute error

b. Fraudulent

Failure to disclose facts, when there is a duty to reveal them, as when the
parties are bound by confidential relations [Art. 1339, CC]

Dolo Causante vs. Dolo Incidente

Dolo Causante (Causal Fraud) Dolo Incidente

(Incidental Fraud)
Refers to those deceptions or Refers to those deceptions or
misrepresentations of a serious misrepresentations which are not
character employed by one party serious in character and without
and without which the other party which the other party would have
would not have entered into the still entered into the contract [Art.
contract 1344, CC]

Determines or is the essential cause Refers only to some particular or

of the consent [Tankeh v. DBP, accident of the obligation [Tankeh

434
 G.R. No. 171428 (2013)] v. DBP, G.R. No. 171428 (2013)]
Renders the contract voidable Renders the party liable for
damages

Fraud to vitiate consent must fulfill two conditions

1. The fraud must be dolo causante or it must be fraud in obtaining the

consent of the party. The deceit must be serious. The fraud is serious when
it is sufficient to impress, or to lead an ordinarily prudent person into error;
that which cannot deceive a prudent person cannot be a ground for nullity.
The circumstances of each case should be considered, taking into account
the personal conditions of the victim.

2. The fraud must be proven by clear and convincing evidence and not
merely by a preponderance thereof. [ECE Realty v. Mandap, G.R. No.
196182 (2014)]

Note: However, fraud in its general sense (false representation of a fact)

coming about in the consummation stage of the sale, as opposed to the
negotiation and perfection stages, entitles the aggrieved party to the
rescission of the sales contract. [Sps. Tongson v. Emergency Pawnshop, GR.
No. 167874 (2010)]

SIMULATION OF CONTRACTS

Simulation is the declaration of a fictitious will, deliberately made by

agreement of the parties, in order to produce, for the purposes of deception,
the appearances of a judicial act which does not exist or is different with
that which was really executed [Nautica Canning Corporation v. Yumul,
G.R. No. 164588 (2005)]. There exists an instrument, but thereis no contract.

Requisites of Simulation

a. An outward declaration of will different from the will of the parties

b. The false appearance must have been intended by mutual agreement

c. The purpose is to deceive third persons [Penalosa v. Santos, G.R. No.

435
133749(2001)]

The primary consideration in determining the true nature of a contract is the

intention of the parties. Such intention is determined not only from the
express terms of their agreement, but also from the contemporaneous and
subsequent acts of the parties. [Spouses Lopez v. Sps. Lopez, G.R. No.
161925 (2009)]

Absolute vs. Relative Simulation [Art. 1345, CC]

Absolute Simulation (Simulados) Relative Simulation (Disimulados)

The parties have no intention to be The parties conceal their true
bound at all agreement.
Fictitious contract Disguised contract
Void. (Because there is an absolute Bound to their real agreement, so
lack of cause) [Art. 1346, CC] long as it does not prejudice a third
person and is not contrary to law,
morals, good customs, public order
or public policy. [Art. 1346, CC]

If the parties merely state a false cause in the contract to conceal their real
agreement, thecontract is relatively simulated and the parties are still
bound by their real agreement. Hence, where the essential requisites of a
contract are present and the simulation refers only to the content or terms of
the contract, the agreement is absolutely binding and enforceable
between the parties and their successors in interest. [Valerio v. Refresca,
G.R. No. 163687 (2006)]

b. Object of Contracts

The subject matter; the thing, right or service which is the subject matter of
the obligation arising from the contract. [Tolentino]

Requisites

436
1. Within the commerce of men [Art. 1347, CC]

2. Not legally or physically impossible [Art. 1348, CC]

3. In existence or capable of coming into existence [See Arts. 1461, 1493,

1495, CC]

4. Determinate or determinable, without the need of a new contract between

the parties [Arts. 1349 and par. 2, 1460, CC]

What may be the object of a contract

General Rule: All things or services may be the object of contracts, which
includes future things [Art. 1347, CC]

In order that a thing, right, or service may be the object of a contract, it

should be in existence at the moment of the celebration of the contract,
or at least, it can exist subsequently or in the future.

A showing of mere inconvenience, unexpected impediments, or increased

expenses is not enough to relieve a party of the obligation. [De Castro v.
Longa, G.R. No L-2152-53 (1951)]

A future thing may be the object of a contract.

Such contract may be interpreted as a:

a. Conditional contract, where its efficacy should depend upon the future
existence of the thing.

b. Aleatory contract, where one of the contracting parties assumes the risk
that the thing will never come into existence, e.g. insurance. [Tolentino]

Except [Art. 1347-1349, CC]

a. Things which are outside the commerce of men

b. Intransmissible rights

437
 c. Future inheritance except in cases authorized by law

Requisites

1. The succession has not yet been opened;

2. The object of the contract forms part of the inheritance; and

3. The promissor has an expectancy of a right which is purely hereditary in

nature

d. Services that are contrary to law, morals, good customs, public order,
or public policy
e. Impossible things or services
f. Objects which are indeterminable as to their kind, the genus should be
expressed

EXCEPTIONS TO THE EXCEPTION

a. In case of marriage settlements under Art. 130, CC

b. In case of partition of properties inter vivos by the deceased under Art.
1080, NCC [JLT Agro v. Balansag, G.R. No. 141882 (2005)]

c. Cause of Contracts

The essential and impelling reason why a party assumes an obligation.

Motive, on the other hand, is the particular reason for a contracting party
which does not affect the other. [Manresa]

Requisites

a. Exists at the time the contract is entered into [Par. 3, Art. 1409, CC]

b. Lawful [Art. 1352, CC]

c. True or real [Art. 1353, CC]

438
Cause vs. Object

Cause Object
As to Remuneration
The service or benefit which is The thing which is given in
remunerated remuneration
As to Donation
The liberality of the donor or The thing which is given or donated
benefactor
As to the Thing
Prestation or promise of a thing or The thing or service itself
service by the other
As to Contracting Parties
Different with respect to each part May be the same for both parties

Distinguished from Motive

Cause Motive
Proximate reason for contract Remote reason for the contract
Objective or juridical reason Psychological and purely personal
reason
Always the same for each Differs for each contracting party
contracting party
Illegality affects existence or Illegality does not affect existence
validity of the contract or validity of contract

Cause in contracts [Art. 1350]

Onerous Contracts Remuneratory Pure Beneficence

Contracts
The undertaking or the The service or benefit Mere liberality of the
promise of which is remunerated benefactor
the thing or service by
the other party

Effect of Lack of Cause, Unlawful Cause, False Cause and Lesion [Arts.
1352 – 1355]

Cause Cause
Lack of Cause – VOID.
absence or total Note: Cause must exist at the time of the perfection of
lack of the contract; it need not exist later.
cause

439
 Contrary to VOID.
law, morals, If parts of a contract are illegal but the rest are
good customs, supported by lawful cause, claimant of such has the
public policy burden of showing proof; otherwise, the whole contract
and public is VOID.
order (unlawful Contracts with illegal cause may still produce effect in
cause) certain cases where parties are not of equal guilt:
(1) innocent party cannot be compelled to perform his
obligation and he may recover what has already been
given;
(2) if both parties are guilty, neither can sue the other,
the law leaving them as they are (in pari delicto, Art.
1411, CC).
Falsity of cause REVOCABLE/VOIDABLE Parties are given a chance
– cause is stated to show that a cause really exists, and that said cause is
but is untrue true and lawful.
Lesion or General Rule: NO EFFECT.
inadequacy of Exception: Inadequacy of cause shall invalidate the
cause – cause is contract when:
not (1) there is fraud, mistake, undue influence
proportionate (2) when parties intended a donation
to object

Note: Inadequacy of cause may be a badge of fraud.

B. FORMALITY
General rule: No form necessary for contracts provided that all the
essential requisites for their validity are present [Par. 1, Art. 1356, CC]

Exception:
1. When the law requires that a contract be in some form in order that it may
be valid [par. 2, Art. 1356, CC]
2. When the law requires that a contract be proved in a certain way to be
enforceable (Statute of Frauds) [par. 2, Art. 1356, CC]
3. When the law requires a contract to be in some form for convenience, or
to be effective against third parties [Arts. 1357 and 1358, CC]

Kinds of Formalities Required by Law

1. For the Validity of Contracts (Ad Essentia /Ad Solemnitatem/ Solemn
Contracts)
Formal or Solemn Contract Special Form Required by Law
Donation of Immovables Must be in a public instrument,
specifying therein the property donated

440
 and the value of the charges which the
donee must satisfy. [Art. 749, CC]
Donation of movables when Must be in writing; otherwise, the
the value of the personal donation is void. [Art. 748, CC]
property donated exceeds
P5,000
Partnerships where An inventory of said property must be
immovable property is made, signed by the parties and attached
contributed to the public instrument. Otherwise, the
contract of partnership is void. [Art.
1773, CC]
Contract of antichresis The amount of the principal and the
interest, if any, must be specified in
writing; otherwise, the contract of
antichresis shall be void [Art. 2134, CC]
Agency to sell land or any Authority of the agent must be in
interest therein writing; otherwise, the sale shall void
[Art. 1874, CC
Stipulation to pay interest on Must be expressly made in writing [Art.
loans, interest for the use of 1956, CC]
money
Stipulation limiting common Must be (1) in writing, signed by the
carrier’s duty of shipper or owner; (2) supported by a
extraordinary diligence to valuable consideration; and (3)
ordinary diligence reasonable, just, and not contrary to
public policy [Art. 1744, CC]
Transfer of large cattle Requires transfer of the certificate of
registration [Sec. 523, Administrative
Code]

2. For the Purpose of Proving the Existence of the Contract (Ad

Probationem/ Statute of Frauds)

The following contracts are UNENFORCEABLE, UNLESS they are

ratified:
1. Those entered into in the name of another person by one who has
been:
i. given no authority
ii. or legal representation,
iii. or who has acted beyond his powers;
2. Those that do not comply with the Statute of Frauds
3. Those where both parties are incapable of giving consent to a
contract. [Art. 1403, CC]

Statute of Frauds
An agreement as to the following shall be unenforceable UNLESS:

441
1. The agreement, or some note or memorandum, thereof, be in writing, and
2. 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. [Art. 1403, CC]

Agreements under the Statute of Frauds [Art. 1403, CC]:

1. An agreement that by its terms is not to be performed within
a year from the making thereof;
2. A special promise to answer for the debt, default, or
miscarriage of another;
3. An agreement made in consideration of marriage, other than a
mutual promise to marry;
4. 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;
5. An agreement of the leasing for a longer period than one
year, or for the sale of real property or of an interest therein;
6. A representation as to the credit of a third person

This article speaks of contracts that cannot be proven except by written note
or memorandum, unless the party charged waives the objection. [Rule 123,
Sec. 21, Rules of Court]

This article applies to executory contracts only. [Almirol v. Monserrat,

G.R. No. 23717 (1925)]
3. For the Effectivity of the Contract Against Third Persons

If the law requires a document or other special form (Art. 1357, CC)
1. The contracting parties may compel each other to observe that form,
once the contract has been perfected.
2. This right may be exercised simultaneously with the action upon the
contract.

Art. 1358, CC which requires the embodiment of certain contacts in a public

instrument, is only for convenience, and registration of the instrument only
adversely affects third parties.
Formal requirements are, therefore, for the benefit of third parties.
Non-compliance therewith does not adversely affect the validity of the
contract nor the contractual rights and obligations of the parties thereunder.
[Fule v. CA, G.R. No. 112212 (1998)

442
 Art. 1358, CC. 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 as
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.

Enumerated contracts in Art. 1358, CC are valid even when not reduced into
writing, although parties may have recourse under Art. 1357, CC to compel
execution of the writing, except in the following cases:
1. Solemn Contracts (action under Art. 1357, CC is not available at all)
2. Real Contracts (action under Art. 1357, CC is available if there is
consent, subject matter, cause, and delivery)
3. Contracts under the Statutes of Fraud (remedy under Art. 1357, CC is
applicable only if the defense of the Statute is waived expressly or impliedly
by the party charged

Actions under Art. 1357, CC may be exercised simultaneously with (i.e.

need not be separate nor need it precede) the action to enforce the contract,
although questions of form must be decided first.

C. REFORMATION OF INSTRUMENTS
Reformation – remedy in equity by means of which a written instrument is
made or construed so as to express or conform to the real intention of the
parties when some error or mistake has been committed [Reyes and Puno]

Requisites [Art. 1359, CC]:

1. There must be a meeting of the minds of the contracting parties
2. Their true intention is not expressed in the instrument;
3. Such failure to express their true intention is due to mistake, fraud,
inequitable conduct, or accident; and
4. There is clear and convincing proof of mistake, fraud, inequitable
conduct, or accident.

The appellant’s complaint states no cause of action, for it fails to allege that

443
the instrument to be reformed does not express the real agreement or
intention of the parties. Such allegation is essential since the object sought in
an action for reformation is to make an instrument conform to the real
agreement or intention of the parties. Moreover, courts do not reform
instruments merely for the sake of reforming them, but only to enable some
party to assert right under them as reformed. [Garcia v. Bisaya, G.R. No. L-
8060 (1955)].

Note: 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 [par. 2, Art. 1359, CC]

The action for reformation of instrument should not be confused with the
action for annulment of contract. [Veluz v. Veluz, G.R. No. L-23261 (1968)]

Reformation v. Annulment [Veluz v. Veluz, supra]

Reformation of Instrument Annulment
Presupposes a valid, existing Presupposes a defective contract in
contract, in which there had been a which the minds of the parties did
meeting of the minds of the parties not meet, or the consent of one was
but the instrument drawn up and vitiated.
signed by them does not correctly
express the terms of their
agreement.
Equity of reformation is ordinarily Intended to declare the inefficiency
limited to written agreements, and which the contract already carries in
its purpose is to establish and itself and to render the contract
perpetuate the true agreement. inefficacious.

1. Burden of Proof

The presumption is that an instrument sets out the true agreement of the
parties and that it was executed for valuable consideration. Thus, when there
is some error or mistake in the contract, the onus probandi is upon the party
who insists that the contract should be reformed.
While intentions involve a state of mind, subsequent and
contemporaneous acts of the parties as well as the evidentiary facts as
proved and admitted can be reflective of one’s intention. [Multi-Ventures
Capital Management Corporation v Stalwart, G.R. No. 157439 (2007)]

2. Effect of Reformation

In granting reformation, the remedy in equity is not making a new contract

for the parties, but establishing and perpetuating the real contract
between the parties which, under the technical rules of law, could not be
enforced but for such reformation. [Quiros vs Arjona, G.R. No. 158901
(2004)]

444
3. Cases Where Reformation is Proper

a. Mistake
The mistake should be of fact generally, and not of law [BPI v Fidelity and
Surety Co., G.R. No. L-26743 (1927)]

Mutual
Mutual mistake of parties that causes failure to disclose real agreement [Art.
1361, CC]

Unilateral
1. One party was mistaken, while the other acted fraudulently [Art. 1362,
CC]
2. One party was mistaken, while the other knew or believed that the
instrument did not state their realagreement, but concealed it from the
former [Art. 1363, CC]

b. Fraud
Active
If one party was mistaken and the otheracted fraudulently in such a way
that the instrument does not show their true intention [Art. 1362, CC]

Passive
When one party was mistaken and theother knew or believed that
theinstrument did not state their realagreement [Art. 1363, CC]

c. Inequitable conduct
If one party was mistaken and the otheracted fraudulently or inequitably in
such a way that the instrument does not show their true intention [Art. 1362,
CC]

d. Accident
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 [Art. 1364, CC]

No fraud exists in the sense that neither of the parties took part therein.

e. Severe Pacto de Retro / Relative Simulation

Art. 1365, CC. 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.

4. Who May Ask for Reformation

445
a. When through mistake of the parties
b. Either party or his successors in interest, if the mistake was
mutual;otherwise.
c. Upon petition of the injured party, or his heirs and assigns [Art. 1368, CC]
d. 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, Courts
may order that the instrument be reformed [Art. 1364, CC]

5. Cases Where Reformation is Not Proper

1. Simple donations inter vivos— wherein no condition is imposed—

because donation is an act of liberality [Art. 725, CC] and cannot be
compelled;
2. Wills—no reformation before the testator dies because the making of
a will is strictly personal [Art. 784, CC], a free act [Art. 839, CC], and
essentially revocable [Art. 828, CC];
3. When the real agreement is void— because there is nothing to
reform. The power of the court to reform is not for accomplishing a
vain thing [Tolentino].
4. Implied Ratification/Estoppel: the party who has brought an action
toenforce the instrument cannot subsequently ask for its reformation
[Art. 1367, CC]

6. Prescriptive Period for Reformation

The prescriptive period for actions based upon a written contract and for
reformation of aninstrument is ten (10) years under Article 1144 of the Civil
Code. [Rosello-Bentir v. Leanda, G.R. No. 128991 (2000)]

D. INTERPRETATION OF CONTRACTS

446
1. Primacy of Language or Intention

a. Cardinal/First Rule of Interpretation – Literal Meaning Governs

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.
[Art. 1370, par. 1, CC]

Application

Where the language of a contract is plain and unambiguous, its meaning

should be determined without reference to extrinsic facts or aids. The
intention of the parties must begathered from that language, and from that
language alone. Courts cannot make for the parties better or more equitable
agreements than they themselves have been satisfied to make, or rewrite
contracts because they operate harshly or inequitably as to one of the parties,
or alter them for the benefit of one party and to the detriment of the other, or
by construction, relieve one of the parties from the terms which he
voluntarily consented to, or impose on him those which he did not. [Bautista
v. CA, G.R. No. 1263655 (2000)]

447
b. Rule if Language Contrary to Intent – Intent over Literal
Interpretation

If the words appear to be contrary to the evident intention of the parties,

the latter shall prevail over the former. [Art. 1370, par. 2, CC]

The cardinal test is the intention of the parties, to be derived from the
terms/language of the contract.

In order to judge the intention of the contracting parties, their

contemporaneous and subsequent acts shall be principally considered.
[Art. 1371, CC]

c. Exclusion to Rules – Distinct and Different Cases

However general the terms of a contract may be, they shall not be
understood to comprehend things that are distinct and cases that are
different from those upon which the parties intended to agree. [Art.
1372, CC]

d. Stipulation Rendered to be Effectual

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. [Art. 1373, CC]

e. Stipulations Interpreted Together

448
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. [Art. 1374, CC]

Difference between Art. 1373 and Art. 1374

Art. 1373 Provides that which of the several meanings of a

stipulation would most adequately render the contract
effectual would be adopted.
Art. 1374 Provides that the various stipulations of a contract would be
interpreted together, and attributing to doubtful stipulations
the sense resulting from the joint interpretation.

f. Interpretation according to Nature and Object of Contract

Words which may have different significations shall be understood in that

which is most in keeping with the nature and object of the contract. [Art.
1375, CC]

Trigger: Words which may have different significations.

Effect: They shall be understood in what is most keeping with the contract’s
nature andobject.

g. Interpretation against Party Causing Obscurity

The interpretation of obscure words orstipulations in a contract shall not

favor the party who caused the obscurity. [Art. 1377, CC]

Interpretation of Contracts of Adhesion

A contract of adhesion is just as binding as ordinary contracts. Contracts of

adhesion are not invalid per se; they are not entirely prohibited. The one

449
who adheres to the contract is in reality free to reject it entirely; if he
adheres, he gives his consent.

While ambiguities in a contract of adhesion are to be construed against

the party thatprepared the same, this rule applies only if the stipulations
in such contract areobscure or ambiguous. If the terms thereof are clear
and leave no doubt upon the intention of the contracting parties, the literal
meaning of its stipulations shall control. In the latter case, there would be no
need for construction.[RCBC v. CA G.R. No. 133107(1999)]

h. Nomenclature not Decisive of the Character

A contract is what the law defines it to be, and not what it is called by the
contracting parties. The Title of the contract does not necessarily determine
its nature. [Tolentino]

i. Separability Clause

Another fundamental rule in the interpretation of contracts is that the terms,

clauses and conditions contrary to law, morals and public order should
be separated from the valid and legal contract and when such
separation can be made because they are independent of the valid contract.
[Kasilag v. Rodriguez, G.R. No. 46623 (1939)]

Exceptions:

a. Where the statute expressly or by necessary implication declares the entire

contract void; or

b. Where the terms, clauses, and conditions, by an established connection or

by manifest intention of the parties, is inseparable from the principal
obligation, and is a condition, juridically speaking, of that the nullity of
which it would also occasion. [Manresa]

450
2. Rules on Doubt [Art. 1378, CC]

When it is absolutely impossible to settle doubts by the rules established in

the preceding articles:

When doubts are cast upon the principal object/s The contract shall be
of any contract and it cannot be known what may null and void.
have been the intention or will of the parties
When doubts refer to the incidental circumstances The least
of gratuitous contracts and it is absolutely transmission of
impossible to settle doubts by the rules rights and interests
shall prevail.
When doubts refer to the incidental circumstances The doubt shall be
of onerous contracts and it is absolutely settled in favor of
impossible to settle doubts by the rules the greatest
reciprocity of
interests.

3. Rule 123, Rules of Court

Note: This is now found in Secs. 10-19, Rule 130.

Art. 1379, CC. The principles of interpretation stated in Rule 123 of the
Rules of Court shall likewise be observed in the construction of contracts.

Summary of rules on interpretation [Rule 130, ROC]

1. Writing is to be interpreted according to its legal meaning UNLESS

parties intended otherwise. [Sec. 10]
2. Instrument must be construed to give effect to all provisions. [Sec. 11]
3. Particular provisions are paramount to general ones when they are
inconsistent. [Sec. 12]
4. The circumstances under which the instrument was made must be
considered. [Sec. 13]
5. The terms of a writing are presumed to have been used in their

451
 primary and general acceptation unless contrary evidence is presented.
[Sec. 14]
6. Written words prevail over printed ones. [Sec. 15]
7. Experts and interpreters may be used in explaining language not
understood by the court. [Sec. 16]
8. When conflicting constructions of provisions are equally proper that
which is the most favorable to the party in whose favor the provision
was made shall be accepted. [Sec. 17]
9. When an instrument is equally susceptible of two interpretations, one
in favor of natural right and the other against it, the former is to be
adopted. [Sec. 18]
10. An instrument may be construed according to usage, in order to
determine its true character. [Sec. 19]

E. DEFECTIVE CONTRACTS
[Tolentino]
Rescissible A contract that has caused a particular damage to one of
the parties or to a third person and which for
EQUITABLE REASONS may be set aside even if valid.
Annulable or A contract in which CONSENT of one of the parties is
Voidable defective, either because of WANT OF CAPACITY or
(contrato nulo) because it is VITIATED, but which contract is VALID
until JUDICIALLY set aside.
Unenforceable A contract that for some reason CANNOT BE
ENFORCED, UNLESS RATIFIED in the manner
PROVIDED BY LAW.
Void or A contract which is an ABSOLUTE NULLITY and
Inexistent produces NO EFFECT, as
if it had never been executed or entered into.

1. Rescissible contracts
Contracts which are valid until rescinded. All essential requisites of a
contract exist but there is injury or damage to one of the parties or to third
persons – external or extrinsic defect consisting of an economic damage or
lesion. [Paras]

a. Rescission

Rescission is a remedy granted by law to the contracting parties and even to

third persons, to secure reparation for damages caused to them by a
contract, even if this should be valid, by means of the restoration of things
to their condition at the moment prior to the celebration of said

452
contract. [Tolentino]

Relief to protect one of the parties or a third person from all injury and
damages which the contract may cause, to protect some preferential right
[Aquino v. Tañedo, G.R. No. L-12457 (1919)]

Lesion
The injury which one of the parties suffers by virtue of a contract which is
disadvantageous for him. To give rise to rescission, the lesion must be
known or could have been known at the time of making of the contract.
[Tolentino] Lesion does not invalidate a contract except only in special cases
provided by law [Art. 1355, CC]

Subsidiary Remedy
Rescission is not a principal remedy, but a subsidiary one. It can only be
availed of only if the injured party proves that he has no other legal means to
obtain redress for the damage caused [Art. 1177, CC]

Necessary Extent
The rescission shall only be to the extent necessary to cover the damages
caused, i.e. partial rescission. [Art. 1384, CC]

b. Characteristics of Rescissible Contracts

1. The defect consists in injury or damage either to one of the contracting

partiesor to third persons;
2. Before rescission, they are valid, and therefore, legally effective;
3. They can only be attacked directly only and not collaterally;
4. They can be attacked only by a contracting party or a third person who is
injured or defrauded;
5. They are susceptible of convalidation only by prescription and not
ratification; and
6. They must be rescinded within four years, the prescription for actions to
claim rescission [Art.1389, CC].

c. Rescissible Contracts and Their Requisites [Arts. 1381-1383, 1385,

1389, CC]

Art. 1381, CC. 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

453
 into by the defendant without the knowledge and approval of the litigants
or of competent judicial authority;

All other contracts specially declared by law to be subject to rescission.

[Art. 1381, CC]

Requisites for Rescission under Art. 1381 (1) (2), CC

1. Contract was entered into by a guardian in behalf of his ward or by a
legal representative in behalf of an absentee. [Arts. 1381 (1) and (2)
CC]

Note: A guardian is authorized only to manage the estate of the ward; should
he dispose a portion thereof without authority from the court by way of a
contract, the same is unenforceable under Art. 1403(1), CC, irrespective of
whether there is lesion or not.
2. It was entered into without judicial approval. [Art. 1386, CC]
3. Ward or absentee suffered lesion of more than one-fourth of the value
of the property which is the object of the contract. [Art. 1381 (1) and
(2), CC]
4. There is no other legal means of obtaining reparation for the lesion.
[Art. 1383, CC]
5. The person bringing the action must be able to return whatever he
may be obliged to restore. [Art. 1385(1), CC]
6. The object of the contract must not be legally in the possession of a
third person who did not act in bad faith [Art. 1385(2), CC]

Note: For Art. 1381 (4), CC: Any disposition of the thing subject of
litigation or any act which tends to render inutile the court’s impending
disposition in such case without the knowledge and approval of the litigants
or of the court, is unmistakably and irrefutably indicative of bad faith.

However, even without knowledge or approval from the court, the

conveyance of a property subject of litigation may still be valid but is
susceptible for rescission under Art. 1381(4), CC.

A definitive judicial determination with respect to the thing subject of

litigation is not a condition sine qua non before the rescissory action
contemplated under Article 1381(4) of the Civil Code may be instituted. The
primordial purpose of Article 1381(4) of the Civil Code is to secure the
possible effectivity of the impending judgment by a court with respect to the
thing subject of litigation. [Ada v. Baylon, G.R. No. 182435 (2012)]

Requisites before a Contract Entered Into in Fraud of Creditors May

Be Rescinded under Art. 1381 (3):
1. There is a credit existing prior to the celebration of the contract, although
not yet due or demandable;
2. There is fraud, or at least, the intent to commit fraud to the prejudice of

454
the creditor seeking rescission, which may be presumed or proved [Art 1387,
CC];
3. Creditor cannot in any legal manner collect his credit; insolvency of the
debtor is not required; and
4. The object of the contract must not be legally in the possession of a third
person who did not act in bad faith.

Accion Pauliana
The action to rescind contracts in fraud of creditors. Consequently, accion
pauliana presupposes a judgment and unsatisfied execution which cannot
exist when the debt is not yet demandable at the time the rescissory action is
brought. [Tolentino]

Note: Even secured creditors are entitled to accion pauliana.

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. [Art. 1382, CC]

Requisites Before Payment Made by Insolvent can be Rescinded:

1. It was made in a state of insolvency;
2. Obligation must have been one which debtor could not be compelled to
pay at the time such payment was effected.

Note: A debtor can be compelled to pay by the creditor even before the
expiration of the period since by his insolvency he has already lost his right
to the benefit of such period. [Art. 1198(1), CC]

d. Effects of Rescission [Art. 1385, CC]

It creates an obligation of mutual restitution or the obligation to return the

things which were the object of the contract, together with their fruits, and
the price with its interests.
However, if the object of the contract is in the possession of third persons in
good faith, rescission cannot take place and indemnity for damages may be
demanded from the person causing the loss [Art. 1385, CC]
Rescission prescribes in a period of four years. For persons under
guardianship and for absentees, the period of four years shall not begin until
the termination of the former's incapacity, or until the domicile of the latter
is known. [Art. 1389, CC]

Do all creditors benefit from the rescission?

As a rule, the rescission should benefit only the creditor who obtained the
rescission, because the rescission is to repair the injury caused to him by the
fraudulent alienation. If a balance is left after satisfying the claim of the
creditor who brought the action, other creditors who are qualified to bring an
accion pauliana should be given the benefit of rescission, instead of
requiring them to bring other rescissory actions. However, creditors who

455
only became such after the fraudulent alienation, cannot benefit from the
rescission.

e. Presumption of Fraud

When alienation of property presumed in fraud of creditors:

1. Alienation by gratuitous title if the debtor has not reserved sufficient
property to pay all of his debts contracted before alienation [Art. 1387(1),
CC]
2. Alienation by onerous title if made by a debtor against whom some
judgment has been rendered in any instance or some writ of attachment has
been issued [Art. 1387(2), CC]

Badges of Fraud
A conveyance leaving no property for other creditors to attach is an evidence
of fraud. [China Banking v. CA, G.R. No. 129644 (2000)]:
1. Consideration is fictitious or inadequate;
2. Transfer was made while suit had begun or pending;
3. Sale was upon credit by insolvent debtor;
4. There was large indebtedness or complete insolvency;
5. Transfer consisted of all or nearly all property especially when
insolvent or greatly;
6. The transfer was made between father and son when other above
circumstances present; and
7. There was failure of vendee to take exclusive possession of all
property embarrassed financially.

2. Voidable contracts
Voidable or annullable contracts are existent, valid and binding, although
they can be annulled because of want of capacity or vitiated consent of one
of the parties. [Tolentino]

Art. 1390, CC. The following contracts are voidable or annullable, even
though there may have been no damage to the contracting parties:
1. Those where one of the parties is incapable of giving consent to a
contract;
2. Those where the consent is vitiated by mistake, violence, intimidation,
undue influence or fraud.
These contracts are binding, unless they are annulled by a proper action in
court. They are susceptible of ratification.

Note: Art. 1390 refers to a “proper action in court”. The validity of a

voidable contract may only be attacked either by way of a direct action or by
way of defense via a counterclaim, and not a special or affirmative defense.
[Jurado]

a. Characteristics of Voidable Contracts

456
 • Its defect consists of the vitiation of consent of one of the contracting
parties;
• It is binding until it is annulled;
• It is susceptible of convalidation by ratification or prescription;
once ratified, they become absolutely valid and can no longer be
annulled [Art. 1392, CC]; and
• Its defect or voidable character cannot be invoked by third persons.

Rescission Annulment
Merely produces the inefficacy of Declares the inefficacy which the
the contract, which did not contract already carries in itself
essentially exist in the contract
Needs ratification to be effective Requires an act of ratification to be
cured
May be compatible with the perfect Based on a vice of the contract
validity of the contract which invalidates it
A remedy A sanction
Equity predominates The law predominates
May be demanded by third parties Can be demanded only by parties to
affected by the contract the contract

b. Who may institute action for annulment

General Rule: Action for annulment may be instituted by all who are
thereby obliged principally or subsidiarily.

Exceptions: (1) Persons capable of giving consent and (2) guilty parties who
have caused the vitiation of consent cannot allege the incapacity or want of
consent of those they contracted with. [Art. 1397, CC].

Requisites:
1. Plaintiff must have an interest in the contract;
2. The victim and not the party responsible for the vice or defect must
assert the same

Exception: If a third person is prejudiced in his rights with respect to one of

the contracting parties and can show detriment which would positively result
to him from the contract in which he has no intervention. [Teves v. People’s
Homesite & Housing Corp., G.R. No. L-21498 (1968)]

c. Effects of Annulment

Contract has been Consummated Contract has not been

Consummated
The parties shall be released from Mutual Restitution - the contracting
the obligations arising therefrom. parties shall restore to each other

457
 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. [Art. 1398-1402]

Mutual Restitution
Vitiation of Parties shall restore to each other the subject matter
Consent of the contract with its fruits and the price thereof
with legal interest.

In obligations to render service, the value thereof shall

be the basis for damages. [Art. 1398, CC]
Incapacity Incapacitated person is not obliged to make any
restitution except insofar as he has been benefited by
the thing or price received by him. [Art. 1399, CC]

d. Three Ways or Modes of Convalidating a Voidable Contract

1. By prescription of the action for annulment [Art.1391, CC]

2. By ratification or confirmation [Art. 1392- 1396, CC]
3. By loss of the thing which is the object of the contract through the fraud
or fault of the person who is entitled to institute the action for the annulment
[Art.1401, CC]

PRESCRIPTION

Prescription of the Action for Annulment

Grounds for being voidable Reckoning Point
Intimidation, violence, or Four years from the time the defect of
undue influence the consent ceases
Fraud or Mistake Four years from discovery thereof
Minors and Incapacitated Four years from the time the
Persons guardianship ceases.

Constructive Notice
Discovery or fraud must be reckoned from the time the document was
registered in the office of the Register of Deeds. Registration constitutes
constructive notice to the whole world. [Carantes v. CA, G.R. No. L-33360
(1977)]

RATIFICATION

The act or means by virtue of which efficacy is given to a contract which

suffers from a vice of curable nullity [Arts. 1392-1396, CC].
Ratification is either express or tacit.
1. EXPRESS or

458
2. TACIT
When the person who has the right toinvoke it, with the knowledge of
thereason which renders the contract
voidable and such reason having ceased, executes an act implying
anintention to waive his right [Art. 1393,CC]

Requisites of Ratification
1. Contract is tainted with a vice susceptible of being cured;
2. Confirmation is effected by the personwho is entitled to do so under the
law;
3. It is effected with knowledge of the vice or defect of the contract;
4. Cause of the nullity or defect has already disappeared.

The right to ratify may be transmitted to the heirs of the party entitled to
such right. It may likewise be exercised by the guardian of the incapacitated
person having such right. [Art. 1394, CC]

Ratification does not require the conformity of the contracting party who has
no right to bringan action for annulment. [Art. 1395, CC]

Effect of Ratification
It extinguishes the action for annulment of a voidable contract. [Art. 1392,
CC]

It cleanses the contract from all its defects fromthe moment it was
constituted. [Art. 1396, CC]

LOSS OF THE THING

Loss of thing byPlaintiff Loss of thing by Defendant

If the loss of the object in his If it is lost through the defendant’s
possession is due to his fault or fault, he is liable for fruits received,
fraud, the action for annulment of value of thething at the time it was
contracts shall be extinguished. He lost, with interest from the same
cannot ask for annulment. [Art. date. [Art. 1400, CC]
14010, CC]

3. Unenforceable contracts
Unenforceable Contracts – contracts that by reason of statutory defects do
not confer any action to enforce the same until and unless they are ratified in
the manner prescribed by law [Reyes]

a. Characteristics

1. Cannot be enforced by a proper action in court;

2. Susceptible of ratification;
3. Cannot be assailed by third persons [Art. 1408, CC]

459
b. Kinds of Unenforceable Contracts [Art. 1403, CC]

1. Unauthorized contracts – those entered into by one who has no authority

or legalrepresentation, or who has acted beyond his powers [par. 1, Art.
1403, CC]
2. Those which did not comply with the Statute of Frauds [par. 2, Art. 1403,
CC]
3. Those where both parties are incapable of giving consent to a contract
[par. 3, Art. 1403, CC]

SUMMARY OF UNENFORCEABLE CONTRACTS

Contract Contracts Contract where
entered into covered by both parties are
without Statute of incapable of
authority Frauds giving consent
Effect on the No effect unless ratified. Cannot be enforced by a proper
Contract action in court
How to assail Not by direct Not by direct Not by direct
action. action. action.

As a defense, by As a defense, by As a defense, by

motion to dismiss motion to dismiss motion to dismiss
the complaint on on the ground the complaint on
the ground that that the contract the ground that
the contract is is unenforceable the contract is
unenforceable unenforceable
Objection to the
presentation of
oral evidence to
prove an oral
contract [see Art.
1405]
Who can By the person By the party By the party
assail - whose name the against whom the
against whom the
cannot be contract was contract is being
contract is being
assailed by entered into / by enforced; or his
enforced; or his
thirdpersons owner of property privies privies; or parents
[Art. 1408, or guardians, as it
CC] is a personal
defense
When When a party asks the court to enforce the contract
How to Cure Ratification by Ratification by Ratification of
Defect person whose party against party against
name the contract whom the whom the
was entered into contract is being contract is being

460
 enforced enforced; or his
privies; or parents
Failure to object or guardians
to the
presentation of The ratification
oral evidence to by one party
prove the contract converts the
amounts to contract into a
waiver [Art. voidable contract
1405, CC]; makes [Art. 1407, CC]
it as binding as if
written

4. Void or inexistent contracts

Those which, because of certain defects, generally produce no effect at all.
They are considered as inexistent from its inception or from the very
beginning [de Leon].

Includes not only those contracts in which one of the essential requisites is
totally wanting, but also those which are declared void by positive provision
of law or statute.

Art. 1409, CC. 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.

a. Characteristics of a Void Contract

1. It does not produce any legal effect;

2. It is not susceptible of ratification;
3. The right to set up the defense of inexistence or absolute nullity cannot be
waived or renounced;
4. The action or defense for the declaration of their inexistence or nullity is
imprescriptible; [Art. 1410, CC]

Note: This provision does not apply to wills. [Gallanosa v. Arcangel, G.R.

461
No. L-29300 (1978)]
5. The inexistence or absolute nullity of a contract cannot be invoked by a
person whose interests are not directly affected. [Art. 1421, CC]

Note: Article 1421 is subject to exceptions. For instance, the creditors of a

party to an illegal contract may, under the conditions set forth in Article
1177 of said Code, exercise the rights and actions of the latter, EXCEPT
only those which are inherent in his person, including therefore, his right to
the annulment of said contract, even though such creditors are not affected
by the same, except indirectly, in the manner indicated in said legal
provision. [Pascual v. Secretary of Public Works, G.R. No. L-10405 (1960)]

Void vs. Inexistent Contracts

Void Inexistent
Those where all the requisites of a Those where one or some or all of
contract are present but the cause, therequisites essential for the
object or purpose is contrary to law, validity of acontract areabsolutely
morals, good customs, public order lacking
or public
policy, or the contract itself is
prohibited or declared void by law
Principle of pari delicto is Principle of pari delicto is
applicable inapplicable
May produce legal effects Cannot produce any Effect
Covers Art. 1409 (1), (3), (4), (5), Covers Art. 1409 (2)and (3)
(6) and (7)

Void vs. Voidable Contracts

Void Voidable
Those where one of the essential Those where all the essential
requisites is wanting, either in fact
requisites are present, but consent is
or in law, or is declared void by vitiated by want of capacity, or by
statute. error, violence, intimidation, or
deceit
Void; no contract at all Valid until annulled
May be assailed indirectly Must be assailed through an action
for that purpose by a party to the
contract, and never by a third person
(direct attack)
Nullity may be setup against Nullity may only be set-up against a
anyone who asserts a right arising party thereto.
from it.
Not susceptible to ratification May be validly ratified
Action to declare nullity does not Action for annulment prescribes
prescribe [Art. 1410, CC]

462
b. Divisibility of Contracts

Trigger: A contract has separate provisions of which only one or more

provisions is invalid

General Rule: if the illegal terms can be separated from the legal ones, the
latter may be enforced [Art. 1420, CC]

c. In Pari Delicto Principle (in paridelicto, non oritur actio) [Art.

1411,CC]

Parties to a void agreement cannot expect theaid of the law; the courts leave
them as theyare, because they are deemed in pari delicto or"in equal fault."
[Menchavez v. Tevez, G.R. No.153201 (2005)].

General Rules
Nullity proceeds from the illegality of thecause or object of the contract,
and the act constitutes a criminal offense [Art.1411, CC]
1. Parties shall have no cause ofaction against each other
2. Both parties shall be prosecuted.
3. Things or price of the contract which are considered as effects
orinstruments of a crime are forfeitedin favor of the government.
The act in which the unlawful or forbidden cause consists does not
constitute a criminal offense[Art. 1412, CC]
When both parties areat fault
When only one of thecontracting parties is at fault
Neither mayrecoverwhat Guilty Party Innocent Party
he has given byvirtue of 1. He cannot recover 1. He may demand
thecontract, or demand what he has given by the return of what he
the performance of the reason of the contract, has given
other's undertaking
2. He cannotask for 2. He is without any
the fulfillment of what obligation to comply
has been promised with his promise.
him.

Exceptions to the Principle of In Pari Delicto:

1. Payment of usurious interest paid in excess of the interest may be
recovered by the debtor. [Art. 1413, CC]
2. Payment of money or delivery of property for an illegal purpose,
where the party who paid or delivered repudiates the contract before
the purpose has been accomplished, or before any damage has the
repudiating party to recover money or property. [Art. 1414, CC] [See
Hulst v. PRBuilders Inc., G.R. No. 156364 (2007)]
3. Payment of money or delivery of property made by an incapacitated
person. It is not necessary that the illegal purpose has not been
accomplished, or no damage has yetbeen caused. [Art. 1415, CC]

463
 4. Agreement or contract not illegal per se butmerely prohibited by law,
and theprohibition is designed for the plaintiff’s protection. Plaintiff
may recover asallowing recovery enhances public policy. [Art. 1416,
CC]
5. Note: When the assailed contracts are void ab initio, Art. 1416 cannot
be applied, as inthe case of aliens purchasing propertydespite knowing
fully well the constitutional prohibition against foreigners owning
land in the Philippines at the time of purchase. [Frenzel v. Catito,
G.R. No. 143958 (2003)]
6. Payment of any amount in excess of the maximum price of any article
or commodity fixed by law [Art. 1417, CC]
7. Contract whereby a laborer undertakes to work longer than the
maximum number ofhours fixed by law [Art. 1418, CC]
8. Contract whereby a laborer accepts awage lower than the minimum
wage fixed by law. He may recover the deficiency with legal interest,
and the employer shall be criminally liable [Art. 1419, CC]
9. In case of divisible contracts, the legal portions/terms may be
enforced separately from the illegal portions/terms [Art. 1420, CC];
and
10.One who lost in gambling because of fraudulent schemes practiced on
him. He is allowed to recover his losses [Art. 315(3)(b)] even if
gambling is prohibited

The principle of in pari delicto admits of an exception under Art. 1416 of

the Civil Code.
Under this article, recovery for what has been paid or delivered pursuant to
an inexistent contract is allowed only when the following requisites are met:
1. the contract is not illegal per se but merely prohibited;
2. the prohibition is for the protection of the plaintiffs; and
3. if public policy is enhanced thereby. [Acabal v. Acabal, G.R. No. 148376
(2005)]

d. Void contract cannot be novated [Art 1422, CC]

A contact which is a direct result of a previous illegal contract is also void and
inexistent. This is based on requisites of a valid novation [Art 1298, CC].

5. Distinguish: resolution and rescission of contracts

Tolentino notes that Article 1191 is taken from Article 1124 of the Old Civil
Code, but the present Code uses the term “rescission” instead of the original
“resolution” in the old Code. Nevertheless, the Code uses the terms
synonymously.

Definition
Rescission Resolution
A subsidiary action based on injury As referred to in Article 1191, the

464
 to the plaintiff’s economic interests action is based on the defendant’s
as described in Articles 1380 and breach of faith, a violation of the
1381. reciprocity between the parties.
[Heirs of Sofia Quirong v. Development Bank of the Philippines, G.R. No.
173441, December 3, 2009]

Similarities According to Tolentino:

1. Both presuppose contracts validly entered into and existing (this
distinguishes rescission from annulment, in which there is a defect which
vitiates the contract)
2. Both require mutual restitution when declared proper.

Differences
Rescission Resolution [Art 1191, CC]
[Art 1380 and 1381,
CC]
As to Nature of Subsidiary Action Principal Action, retaliatory in
Action involving partial nature
resolution
As to Basis Economic prejudice Breach of faith
rendering the contract
legally rescissible

Note: Not all forms of

economic prejudice are
recognized by law as a
ground to rescind
As to effect The cause of action is The reparation of damages for
subordinated to the the breach is purely secondary.
existence of an
economic prejudice.

Hence, where the

defendant makes good
the damages caused, the
action cannot be
maintained or
continued.
As to parties in Prejudiced third party Only party to the contract may
interest may also seek remedy seek remedy
As to grounds Equity Noncompliance or
nonperformance
As to action by Right to seek remedy is May be denied if court finds
courts not affected by that there is sufficient reason
extension of time to justify extension
As to Four years [Art. 1389, Ten years

465
 prescriptive CC]
period

[Congregation of the Religious Virgin Mary v. Orola, G.R. No. 169790

(2008)]

VII. NATURAL OBLIGATIONS

Art 1423, CC. 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.

General Rule: Do not grant a right of action to enforce their performance.

Exception: After voluntary fulfillment, they authorize the retention of what

has been delivered/rendered by reason thereof.

In order that there may be a natural obligation there must exist a juridical tie
which is not prohibited by law and which in itself could give a cause of
action but because of some special circumstances is actually without legal
sanction or means of enforcing compliance by intervention of courts.
[Tolentino]

Two Conditions Necessary for Natural Obligations

a. That there be a juridical tie between two persons; (this distinguishes it

from moral obligations) and

b. That this tie is not given effect by law (this distinguishes it from civil
obligations).

Four Types of Obligations in Juridical Science

a. Moral Obligations – duties of conscience completely outside the field of

law

466
b. Natural Obligations – duties not sanctioned by any action but have a
relative judicial effect

c. Civil Obligations – juridical obligations that are in conformity with

positive law but are contrary to juridical principles and susceptible of being
annulled; enforceable by action

d. Mixed Obligations – full juridical effect; falls under civil obligations

Natural Obligations Civil Obligations

As to enforceability Not by court actions, Court action or the
but by good coercive power of
conscience of debtor public authority
As to basis Equity and natural Positive law
justice [Art. 1157,
CC]

Natural Obligations Imperfect Obligations

Only the performance of the Existence of the obligation depends
obligation is left to the will of the exclusively upon the judgment of
debtor debtor

Natural Obligations Moral Obligations

There is a juridical tie between the No juridical tie whatsoever
parties which is not enforceable by
court action.
Voluntary fulfillment of such Voluntary fulfillment of such does
produces legal effects which the not produce any legal effect which
court will recognize and protect. the court will recognize and protect.
Within the domain of law Within the domain of morals

a. Conversion to Civil Obligations

General Rule: Partial payment of a natural obligation does not make it civil;
the part paid cannot be recovered but the payment of the balance cannot be
enforced.

This is applicable only to natural obligations because of prescription or lack

467
of formalities (nullity due to form e.g. Art. 1430) and not to natural
obligations subject to ratification or confirmation

Note: Payment by mistake is not voluntary and may be recovered. Payment

is voluntary when the debtor knew that the obligation is a natural one. The
debtor, however, has the burden of proving the mistake.

Natural obligations may be converted to civil obligations by way of:

1. Novation

2. Ratification or confirmation

Rules on Natural Obligation:

a. The promise to perform a natural obligation is as effective as

performance itself and converts the natural obligation to a civil
obligation.
b. Partial payment of a natural obligation does not make it civil; the part
paid cannot be recovered, but payment of the balance cannot be
enforced. The exception would be if the natural obligation is
susceptible of ratification.
c. Guaranties for the performance of a natural obligation are valid. [Art.
2052, CC]
d. In principle, however, natural obligations cannot be guaranteed. The
guaranty changes the character of obligation. The debtor impliedly
accepts coercive remedies to enforce the guaranty, and the
transformation into civil. [Tolentino]
e. Payment of a natural obligation is not subject to reduction by reason
of inofficiousness, appearance of children or ingratitude.

b. Examples Of Natural Obligations

1. Performance after prescription

Art. 1424, CC. When a right to sue upon a civil obligation has lapsed by

468
 extinctive prescription, the obligor who voluntarily performs the contract
cannot recover what he has delivered or the value of the service he has
rendered.

Requisites under Art. 1424 (Prescribed Civil Obligation – Obligor)

a. There is a civil obligation

b. The right to sue upon it has already lapsed by extinctive prescription

c. Obligor performs contract voluntarily

Consequence: Obligor cannot recover what he has delivered or value of the

service he rendered. Obligee gains the right to retain what has been paid.

Art. 1425, CC. 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.

Requisites under Art. 1425 (Prescribed Civil Obligation – Payment to 3rd

Person)

a. There is a debt

b. Action upon the debt has prescribed

c. A third person, without the knowledge or against the will of the debtor,
pays the debt

d. Debtor voluntarily reimburses the third person

Consequence: Obligor cannot recover what he has paid.

2. Contract Made by a Minor

Art. 1426, CC. When a minor between eighteen and twenty-one years of
age who has entered into a contract without the consent of the parent or

469
 guardian, after the annulment of the contract voluntarily returns the
whole thing or price received, notwithstanding the fact that he has not
been benefited thereby, there is no right to demand the thing or price thus
returned.

Requisites under Art. 1426 (Voluntary Return of Payment – Minor

between 18 and 21)

a. There is a civil obligation

b. Minor between 18 and 21 entered into the contract without consent of

parent or guardian

c. Obligation is annulled after minor has received the price or whole thing

d. Minor returns whole thing or price received voluntarily

Consequence: There is no right to demand the thing or price 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.

Requisites under Art 1427 (Voluntary Payment – Minor between 18 and

21)

a. There is a civil obligation

b. Minor between 18 and 21 entered into the contract without consent of

parent or guardian

c. Minor pays a sum of money or delivers a fungible thing voluntarily

d. Obligee spends the money or consumes the thing in good faith

Consequence: There is no right to recover the money paid or thing

delivered. It is not the voluntary payment that prevents recovery, but the

470
consumption or spending of the thing or money in good faith.

Arts. 1426 and 1427, CC, distinguished

Art. 1426 Art. 1427

Presupposes a prior annulment No prior annulment is involved
Refers to any object Refers to money or fungible things
Consumption in good faith is not Requires consumption in good faith
required

3. Performance by Winning Party

Art. 1428, CC. 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

Requisites under Art 1428 (Payment by Defendant notwithstanding failed

action)

a. There is a civil obligation

b. An action to enforce such has failed

c. Defendant voluntarily performs the obligation

Consequence: Defendant cannot demand return of what he has delivered or

the payment of the value of the service.

4. Payment beyond Inheritance

Art. 1429, CC. 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.

Requisites under Art 1429 (Payment made by Heir)

a. Decedent incurred in debt during his lifetime

b. Heir voluntarily pays debt

471
c. Value of debt exceeds value of heir’s inheritance

Consequence: Payment is valid and heir cannot rescind it.

5. Payment of a Void Legacy

Art. 1430, CC. 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.

Requisites under Art 1430 (Payment of legacy – Will declared Void)

a. There is a will providing for a legacy

b. The will is declared void because it was not executed in accordance with
the formalities required by law

c. Heir pays legacy in compliance with a clause in the defective will

Consequence: Payment is effective and irrevocable.

VIII. ESTOPPEL
A. DEFINITION

A condition or state by virtue of which an admission or representation is

rendered conclusive upon the person making it, and cannot be denied or
disproved as against the person relying thereon [Art. 1431, CC]

Estoppel is a bar which precludes a person from asserting anything

contrary to that which has been established as the truth, either by the acts of
judicial or legislative officers or by his own deed or representation, either
express or implied. [Tolentino]

B. KINDS OF ESTOPPEL

a. Equitable Estoppel or Estoppel in pais or by conduct [Art. 1433, CC]

1. Estoppel by silence [Art. 1437, CC]
2. Estoppel by acceptance of benefits

472
b. Technical Estoppels
1. Estoppel by Deed – a party to a deed is precluded from asserting as
against the other party, a material fact asserted therein; [Art. 1433,
CC] and
2. Estoppel by Record – a party is precluded from denying the truth of
the matters set forth in a record whether judicial or legislative and also
to deny the facts adjudicated by a court of competent jurisdiction.
c. Estoppel by Judgment – a party to a case is precluded from denying the
facts adjudicated by a court of competent jurisdiction
d. Estoppel by laches

C. PERSONS BOUND

Estoppel is effective only as between the:

1. parties thereto or
2. their successors-in-interest. [Art. 1439, CC]
The government is not estopped by mistake or error on the part of its
officials or agents. In Manila Lodge No. 761 Benevolent and Protective
Order of the Elks v. CA, G.R. No. L- 41001 (1976), the sale executed by the
City of Manila to Manila Lodge was certainly a contract prohibited by law,
and that estoppel cannot be urged even if the City of Manila accepted the
benefits of such contract of sale and the Manila Lodge No. 761 had
performed its part of the agreement, for to apply the doctrine of estoppel
against the City of Manila in this case would be tantamount to enabling it to
do indirectly what it could not do directly.

D. CASES WHERE ESTOPPEL APPLIES

a. Sale or alienation of a thing which does not belong to the seller or

grantor and later on acquire title thereto [Art. 1434, CC].

Requisites
a. The seller or grantor is not the owner of a thing
b. The person sells or alienates and delivers it to another
c. The person later on acquires title to the thing

Effect: Title passes by operation of law to the buyer or grantee.

b. Agent sells or alienates a thing [Art. 1435, CC]

Requisites:
a. Person in representation of another sells or alienates a thing

Effect: The person cannot set up his own title as against the buyer or
grantee.

c. Title of the lessee or bailee against the lessor or bailor [Art. 1436,
CC].

473
Requisites:
a. There exists a lessor-lessee relationship

Effect: The lessee or bailee is estopped from asserting title to the thing
leased or received.

d. Contract between third persons concerning immovable property where

one of them is misled by a person with respect to the ownership or
real right over the real estate. [Art. 1437, CC]

Requisites:
a. There must be fraudulent representation or wrongful concealment of facts
known to the party estopped;
b. The party precluded must intend that the other should act upon the facts as
misrepresented;
c. The party misled must have been unaware of the true facts; and
d. The party defrauded must have acted in accordance with the
misrepresentation

Effect: The guilty party is precluded from asserting his legal title or interest
therein, provided all these requisites are present.

e. 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.
1438, CC].

E. LACHES

Laches is defined as the 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 a reasonable time, warranting a presumption that the party
entitled to assert it either has abandoned it or declined to assert it.
[Pangasinan v. Disonglo-Almazora, G.R. No. 200558 (2015)]

Elements [Pangasinan v. Disonglo-Almazora, G.R. No. G.R. No. 200558

(2015)]
a. Conduct on the part of the defendant, or of one under whom he
claims, giving rise to the situation of which complaint is made for
which the complaint seeks a remedy;
b. 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 a suit;

474
 c. Lack of knowledge or notice on the part of the defendant that the
complainant would assert the right on which he bases his suit; and
d. 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
Concerned with the fact of delay Concerned with the effect of delay
Question or matter of time Question of inequity of permitting
the claim to be enforced
Statutory Not statutory
Applies in law Applies in equity
Cannot be availed of unless it is Being a defense in equity, it need
specifically pleaded as an not bespecifically pleaded
affirmative allegation
Based on a fixed time Not based on a fixed time

IX. SPECIAL CONTRACTS

A. SALES
1. General provisions
a. Definition

Contract of Sale
Article 1458, CC: By the contract of sale one of the contracting parties
obligates himself to transfer the ownership and to deliver a determinate
thing, and the other to pay therefor a price certain in money or its
equivalent.

Contract to Sell
Article 1478, CC: The parties may stipulate that ownership in the thing
shall not pass to the purchaser until he has fully paid the price

Conditional Contract of Sale

Article 1461, CC: Things having a potential existence may be the object of
the contract of sale.

The efficacy of the sale of a mere hope or expectancy is deemed subject to

the condition that the thing will come into existence.

The sale of a vain hope or expectancy is void.

Article 1462, CC: The goods which form the subject of a contract of sale
may be either existing goods, owned or possessed by the seller, or goods
to be manufactured, raised, or acquired by the seller after the perfection of
the contract of sale, in this Title called “future goods.”

There may be a contact of sale of goods, whose acquisition by the seller

475
 depends upon a contingency which may or may not happen.

Article 1465, CC: Things subject to a resolutory condition may be the

object of the contract of sale.

Contract of Sale Contract to sell

Ownership is transferred upon Ownership is only transferred upon
delivery full payment of price
Non-payment is a resolutory Full payment is a positive
condition suspensive condition; hence
nonpayment would not give rise to
the obligation to transfer ownership

Conditional Contract of Sale Contract to sell

Sale is already perfected No perfected sale yet
A subsequent buyer is presumed to A subsequent buyer is presumed to
be a buyer in bad faith be a buyer in good faith

b. Essential requisites [Art. 1318, CC]

1. Consent of contracting parties

Consent refers to seller’s consent to transfer ownership of, and deliver, a

determinate thing, and to buyer’s consent to pay the price certain.

Being a consensual contract, the contract of sale is perfected at the moment

there is a “meeting of the minds” upon the thing which is the object of the
contract and upon the price. [Art. 1475, CC]

Can there be sales without consent?

1. Expropriation [Art. 1488, CC]
2. Ordinary Execution Sale [Rule 39, Sec. 15, Rules of Court]
3. Judicial Foreclosure Sale [Rule 68, Rules of Court], and
4. Extra-Judicial Foreclosure Sale [Act. 3135, as amended]

Special Case
If the sale involves the conjugal property of spouses, consent must be given
by both.

2. Object certain which is the subject matter of the contract

The things must be licit and the vendor must have a right to transfer the
ownership thereof at the time it is delivered [Art. 1459].

Requisites of a Valid Subject Matter [Arts. 1459-1465, CC]

a. Must be licit
• Within the commerce of man
• When right is not intransmissible [Art. 1347, CC]

476
 • It does not contemplate a future inheritance, unless expressly
authorized by law
• Example of illicit things per se (of its nature) and per accidens (due to
provisions of law
o Sale of animals if the use or service for which they are acquired has
been stated in the contract, and they are found to be unfit therefor
[Art. 1575, CC]
o Sale of animals suffering from contagious diseases [Art. 1575, CC]
o Sale of future inheritance is void [Art. 1347, CC]
Sale of land in violation of Constitutional prohibition against the
transfer of lands to aliens. [Art. XII of Constitution]

b. Existing, Future, Contingent

 Existing goods owned or possessed by the seller;
 Goods to be manufactured, raised, OR acquired by the seller – “Future
Goods” [Art. 1462, CC]
 Things having potential existence may be the object of a contract of
sale [Art. 1461, CC]. A sale may be made of a thing which, though
not yet actually in existence is reasonably certain to come into
existence as the natural increment or usual incident of something in
existence already belonging to the seller, and the title will vest in the
buyer the moment the thing comes into existence. [Sibal v. Valdez,
G.R. No. L-26278 (1927)]

Sale of Things Having Potential Existence

Emptio Rei Emptio Rei Spei Vain Hope
Speratei Mere Hope
Sale of a thing Sale of a MERE HOPE Sale of a VAIN HOPE
expected or future or expectancy or expectancy
thing
Valid General rule: Valid Exception: Void
Example: Sale of the Example: Sale of a Example: Sale of a fake
grain a field may grow valid lottery ticket lottery ticket
in a given time
Deals with a future Deals with a thing that currently exists – the hope
thing that is currently or expectancy
not in existence
Subject to the Not subject to any condition; The contract comes
condition that the into existence immediately
thing will exist
Future thing is certain
as to itself, but
uncertain as to
quantity and quality
In case of doubt, the presumption is in favor of emptio rei speratae since it

477
 is more in keeping with the commutative character of the contract.

c. Determinate or Determinable Determinate

When it is particularly designated or physically segregated from all others of
the same class. [Art. 1460, CC]

Determinable
When it is capable of being made determinate at the time the contract was
entered into without the necessity of a new or further agreement between the
parties. [Art. 1460, CC]

Failure to state the exact location of the land does not make the subject
matter indeterminate, so long as it can be located. [Camacho v. CA, G.R. No.
127520 (2007)]

3. Cause of the obligation which is established

This refers to the “price certain in money or its equivalent” [Art. 1458]. It
does not include goods or merchandise although they have their own value
in money.

However, the words “its equivalent” have been interpreted to mean that
payment need not be in money, so that there can be a sale where the thing
given as token of payment has “been assessed and evaluated and [its] price
equivalent in terms of money [has] been determined.” [De Leon]

a. Requisites of a valid price

1. Certain or ascertainable at the time of perfection
2. In money or its equivalent
• If price is partly in money and partly in another thing: determine
manifest intention of the parties to see whether it was barter or sale.
[Art. 1468, CC]
• If intention does not clearly appear, it shall be considered a barter if
the value of the thing exceed the amount of money or its equivalent.
[Art. 1468, CC]
3. Real
• When buyer has an intention to pay and the seller has an expectation
to receive the price
• If simulated: Sale is VOID; BUT act may be shown to have been a
donation or some other act or contract. [Art. 1471, CC]
• If Price is false – when the real consideration is not the price stated in
the contract:
o Sale is void
o UNLESS proved to be founded on another true and lawful price [Art.
1353, CC]

b. How price is determined/when certain

1. Fixed by agreement of the parties and cannot be left to the discretion of

478
one of the parties – BUT if such is accepted by the other, sale is perfected.
[Art. 1473, CC]
2. Determination is left to the judgment of a specified person.

General Rule: Price fixed by 3rd persons designated by the parties is

binding upon them

Exceptions:
• If 3rd person is unable or unwilling: Sale is inefficacious unless
parties subsequently agree about the price.
• If 3rd person fixed the price in bad faith/by mistake: Courts may fix
price (but mere error in judgment cannot serve as basis for impugning
price fixed)
• If 3rd person is prevented from fixing price by fault of seller or buyer:
Innocent party may avail of remedies (rescission or fulfillment of
obligation, with damages)
• If 3rd person disregards specific instructions/data/procedure, thereby
fixing an arbitrary price
• The price is made in reference to another thing, or when the price
fixed is the price of the commodity on a definite day, or in a particular
exchange or market, or when the amount fixed is above or below the
price on such day, exchange or market. [Art. 1472, CC]

General Rule: When the price is not certain, the contract is without effect
and no obligation arises from it.

Exception: When the thing is already delivered, the buyer must pay a
reasonable price therefor. This exception only arises when the means
contemplated by the parties for fixing the price have become ineffectual.

c. Inadequacy of price
The stipulation in a contract of sale which states that the consideration is
“PhP1 and other valuable considerations” does not make the contract void.
Gross inadequacy of price does not affect the contract of sale except that it
may indicate a defect in consent. [Bagnas v. CA, G.R. No. L-38498 (1989)]

General Rule: Does not affect a contract of sale’s validity. [Art. 1470, CC]

Exceptions:
a. In Voluntary sales
• Where low price indicates a vice of consent, sale may be annulled.
• Where price is so low to be shocking to the conscience (fraud,
mistake, undue influence), then sale may be set aside
• Where price is simulated such as when the real intention was a
donation or some other contract.
• Where the parties did not intend to be bound at all, sale is void.

479
b. In Involuntary sales
• A judicial or execution sale is one made by a court with respect to the
property of a debtor for the satisfaction of his indebtedness.
• Rescissible contracts of sale – Inadequacy of price is a ground for
rescission of conventional sale under Art. 1381 (a) and (b), CC.

d. When no price agreed

1. Sale is inefficacious [Art. 1474, CC]
2. But if the thing or part thereof has been delivered and appropriated by the
buyer, he must pay a reasonable price therefore
• What is a reasonable price is a question of fact dependent on the
circumstances of each particular case. [Art. 1474, CC]
• The reasonableness of a price may be determined on the basis of a
company’s balance sheet showing the book value or fair market value
of its shares. [Philippine Free Press v. CA, G.R. No. 132864 (2005)]
3. Generally, the reasonable price is the market price at the time and place
fixe d by the contract or by law for delivery of goods.

e. False price vs. simulated price

False Price Simulated Price
Price stated in the contract is not Price stated in the contract is not
the true price. Parties intended to intended to be paid. Parties never
be bound. intended to be bound.
Effect: Binds the parties to their Effect: Void for lack of
real agreement when it does not cause/consideration, but can be shown
prejudice 3rd persons and is not as a donation or some other contract.
intended for any purpose contrary Parties may recover from each other
to law, morals, public policy, etc. what they may have given under the
contract.

f. Earnest money vs. option money

Earnest Money – paid in advance of the purchase price agreed upon by the
parties in a contract of sale, given by the buyer to the seller, to bind the latter
to the bargain
Option Money Earnest Money
Separate and distinct consideration Part of purchase price [Art. 1482,
from the purchase price CC]
Given when sale is not yet perfected Given only when there is already a
sale
When given, the would-be-buyer is When given, the buyer is bound to
not required to buy, but may even pay the balance
forfeit it depending on the terms of
the option
Grantee of option is still undecided Buyer manifests his earnest desire
whether or not to buy or sell the to buy the property
property [Baviera]

480
[Limson v. CA, G.R. No. 135929 (2001)]

c. Perfection

1. Offer

The offer must be certain and the acceptance absolute. [Art. 1319, CC]

The person making the offer may fix the time, place, and manner of
acceptance, all of which must be complied with. [Art. 1321, CC]

An offer becomes ineffective upon the death, civil interdiction, insanity, or

insolvency of either party before acceptance is conveyed. [Art. 1323, CC]

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 a consideration, as
something paid or promised. [Art. 1324, CC]

Unless it appears otherwise, business advertisements of things for sale are

not definite offers, but mere invitations to make an offer. [Art. 1325, CC]

2. Option contracts

Option
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. [Art. 1479(2), CC; De Leon]

Separate Consideration
A consideration for an optional contract is just as important as the
consideration for any other kind of contract. If there was no consideration
for the contract of option, then it cannot be enforced any more than any other
contract where no consideration exists. [Enriquez dela Cavada v. Diaz, G.R.
No. 11668 (1918)]

The option is not the contract of sale itself. The optionee has the right, but
not the obligation, to buy. Once the option is exercised timely, i.e., the offer
is accepted before a breach of the option, a bilateral promise to sell and to
buy ensues and both parties are then reciprocally bound to comply with their
respective undertakings. [Ang Yu v. CA, G.R. No. 109125 (1994)]

The offeror is still free and has the right to withdraw the offer:
• If the period is not itself founded upon or supported by a consideration and
withdrawn before its acceptance,
• If an acceptance has been made, before the offeror's coming to know of
such fact, by communicating that withdrawal to the offeree.

481
Breach of contract
It will be a breach of contract when the offer was withdrawn during the
agreed period if the period has separate consideration since the contract of
“option is deemed perfected.”

3. Right of first refusal

While the object might be made determinate, the exercise of the right,
however, would be dependent not only on the grantor's eventual intention to
enter into a binding juridical relation with another but also on terms,
including the price, that obviously are yet to be later firmed up.

Even on the premise that such right of first refusal has been decreed under a
final judgment, like here, its breach cannot justify correspondingly an
issuance of a writ of execution under a judgment that merely recognizes its
existence, nor would it sanction an action for specific performance without
thereby negating the indispensable element of consensuality in the perfection
of contracts. [Ang Yu v. CA, G.R. No. 109125 (1994)]

4. Mutual promise to buy and sell

The obligation is not to enter into a sale, but rather to negotiate in good faith
for the possibility of entering into a sale. When the promissor has in fact
negotiated in good faith, but the parties’ minds could not meet on the price
and the terms of payment, then promissor has complied with his obligation
[Villanueva].

d. Contract of sale distinguished

1. Donation

Sale Donation
Onerous Gratuitous
Perfected by mere consent Requires consent and must comply
with the formalities required by law
for its validity. [Art. 745, CC]
The property sold is replaced by the Requires that there be a diminution
equivalent monetary consideration; of the estate of one party (donor)
there is no diminution of the seller’s and the enrichment of the other
estate party’s estate (donee)

When the price of the contract of sale is simulated, the sale may be void but
the act may be shown to have been in reality a donation or some other
contract. [Art. 1471, CC]

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

482
power; otherwise, the donation shall be void. [Art. 745, CC]

2. Barter

Sale Barter
Consideration is price in money or Consideration is another thing
its equivalent

Rules to determine whether contract is sale or barter:

a. Manifest intention of the parties: Even if the acquisition of a thing is
paid for by another object of greater value than the money component,
it may still be a sale and not a barter, when such was the intention of
the parties
b. When intention does not appear and consideration consists partly in
money and partly in another thing

BARTER = where the value of the thing given as part of the consideration
exceeds the amount of money given or its equivalent

SALE = where the value of the thing given as part of the consideration
equals or is less than the amount of money given

3. Contract for a piece of work

Sale Contract for a Piece of Work

Goods are manufactured or Goods are manufactured for
procured in the ordinary course of customer upon his special order
business
For the general market, whether on For a specific customer
hand or not
Governed by Statute of Frauds Not within Statute of Frauds

When each product or system executed is always UNIQUE and could not
mass-produce the product because of its very nature, such is a contract for a
piece of work. [Commissioner v. Engineering Equipment and Supply Co.,
G.R. No. L-27044 (1975)]

4. Dacion en pago

Sale Dacion en pago

No pre-existing debt Pre-existing debt
Creates an obligation Extinguishes the obligation (mode
of payment)
Price is more freely agreed upon, Price is the value of the thing given
fixed by the parties
Buyer has to pay the price Payment is received by the debtor
before contract is perfected

483
5. Agency to sell

Sale Agency to sell

Buyer receives the goods as owner Agent receives good as goods of the
principal
Buyer pays the price Agent delivers the price which he
got from his principal
Buyer cannot return the object sold Agent can’t return the goods
as a general rule
Seller warrants the thing sold Agent makes no warranty
Not unilaterally revocable Essentially revocable

6. Lease

Sale Lease
Ownership transferred by delivery No transfer of ownership
Permanent Temporary
Seller must be owner at time of Lessor need not be owner
delivery

In the lease of things, one of the parties binds himself to give to another the
enjoyment or use of a thing for a price certain, and for a period which may
be definite or indefinite. However, no lease for more than ninety-nine years
shall be valid. [Art. 1643, CC]

2. Parties
General Rule: Any person who has capacity to act may enter into a contract
of sale. [Villanueva]

As a general rule, all persons, whether natural or juridical, who can bind
themselves have also legal capacity to buy and sell. [De Leon]

a. Capacity of Parties

Kinds of incapacity
1. Absolute [Art. 1327, 1397, 139, CC] – In the case of persons who cannot
bind themselves
2. Relative - Married persons
3. Special disqualifications [Arts. 1491- 1492, CC]

1. Absolute incapacity

a. Minors [Art. 1327, CC]

b. Insane or Demented [Art. 1327, CC]
c. Deaf-mutes who do not know how to write [Art. 1327, CC]
d. Civil Interdiction [Art. 38, CC]

484
 e. Judicially-declared Incompetents [Art. 39, CC]
• Prodigal
• Imbeciles
• Absence & presumption of death
• Persons not of unsound mind but by reason of age, disease, weak
mind, and other similar causes, cannot take care of themselves and
manage their property without outside aid (Easy prey for deceit and
exploitation)

General Rule: Contracts entered into by a minor and other incapacitated

persons are voidable.

Exception: Where necessaries are sold and delivered to him (without parent
or guardian), he must pay a reasonable price therefor.
• Such contract is VALID
• But the minor has the right to recover any excess above a reasonable
value paid by him.

2. Relative incapacity

1. Husband and wife [Art. 1490, CC]

General Rule: Cannot sell property to each other

Exceptions:
• Separation of property in marriage settlement, OR
• Judicial separation of property.

Sale by husband in favor of a concubine after he had abandoned his family

and left conjugal home where his wife and children lived and from whence
they derived their support, is void. [Ching v. Goyanko, Jr., G.R. No. 165879
(2006)]

Reason for this rule: Such prohibition is for the protection of third persons
who, relying upon supposed property of either spouse, enters into a contract
with either of them only to find out that the property relied upon was
transferred to the other spouse. [De Leon]

2. Alienage [Art. 39, CC]

General Rule: Aliens are disqualified from purchasing or acquiring real
property.

Exception: If acquisition is through hereditary succession

3. Trusteeship [Art. 39, CC]

3. Special disqualifications

Such is grounded on public policy considerations which disallow the

485
transactions entered into by them (directly or indirectly) in view of the
fiduciary relationship involved or the peculiar control exercised by
these individuals over the properties or rights covered. [Mananquil v.
Villegas (1990)]
1. Agents – Cannot purchase or acquire property whose administration
or sale was entrusted to them, except if principal gives consent
2. Guardian – Cannot purchase property of person under his
guardianship
3. Executors and administrators –Cannot acquire or purchase property
of estate under their administration.

The prohibition on executors and administrators does not apply if the

principal consents to the sale. [Distajo v. CA, G.R. No. 112954
(2000)]

4. Public officers and employees – Cannot acquire or purchase property

of State/any of its subdivisions, GOCC or administration, the
administration of which was entrusted to them. Prohibition includes
judges and government experts who, in any manner, take part in the
sale.

5. Lawyers - Cannot acquire or purchase property or rights in litigation

in which they take part by virtue of their profession

For the prohibition to operate, the sale or assignment must take place during
the pendency of the litigation involving the property. [Laig v. Court of
Appeals (1991)]

Exceptions: An assignment to a lawyer by his client of an interest in the

property does not violate Art 1491, where:
a. A judgment has been rendered and has become final; and
b. In case of contingency fee arrangements: the interest of the lawyer may be
annotated as an adverse claim on the property awarded to his client
[Director of Lands v. Ababa, G.R. No. L-26096 (1979)]

6. Justices, Judges, prosecuting attorneys, clerks and other officers

and employees connected with the administration of justice –
Cannot acquire or purchase property or rights in litigation or levied
upon on execution before the court within whose jurisdiction or
territory they exercise their respective functions.

7. Others specially disqualified by law

i. Unpaid sellers with goods in transit from buying the goods
ii. Officer conducting the execution sale of deputies
iii. Aliens who are disqualified to purchase private agricultural lands

b. Effects of incapacity

486
1. Absolute incapacity

If both parties are incapacitated: unenforceable [Art. 1403 (3), CC].

If only 1 party is incapacitated: voidable.

Exception: Where necessaries are sold and delivered to a minor or to a

person without capacity to act, he must pay a reasonable price therefor. [Art.
1489, par. 2, CC] The resulting sale therefore described in the foregoing
article is valid and binding.

2. Relative incapacity

Sale between spouses is void.

Rationale:
1. To protect 3rd persons who may have contracted with the spouse
2. To avoid undue advantage of the dominant spouse over the weaker
spouse.
3. To avoid circumvention of the prohibition against donations between
spouses. [Medina v. CIR, G.R. No. L-15113 (1961)]

Such prohibition shall likewise apply tocommon law spouses. [Calimlim-

Canulas v. Fortun, G.R. No. L-57499 (1984)]

But if already sold to a third person who relied on the title of his immediate
seller, reconveyance to the seller spouse is no longer available [Cruz v. CA,
G.R. No. 120122 (1997)]

Sale contracted by aliens is void [Art. XII of the Constitution]

3. Specific incapacity

General rule: Contracts expressly prohibited by law are VOID and

CANNOT BE RATIFIED. Neither can the right to set-up the defense of
illegality be waived. [Art. 1409 (7), CC]

Those entered into by public officers/employees, justices and judges, and

lawyers in violation of Art. 1491 are inexistent and VOID from the
beginning. [Rubias v. Batiller, supra]. It is NOT subject to RATIFICATION.

Exception: Sales entered into by guardians, administrators, and agents

(specific incapacities) in violation of Art. 1491 may be RATIFIED by means
of and in the form of a new contract when the cause of nullity has ceased to
exist. Ratification is valid only from date of execution of the new contract
and does not retroact.

3. Obligations of the vendor

487
(Note: Further discussion can also be found in Section J of this Sales
Reviewer, on the Performance of the Contract.)

a. Obligations of the Vendor in General

1. To transfer ownership of the thing [Art. 1495, CC]

2. To deliver the thing, with its accessions and accessories, if any [Arts.
1164, 1166, CC]
3. To warrant against eviction and against hidden defects [Arts. 1545-1581,
CC]
4. To take care of the thing, pending delivery, with proper diligence [Art.
1163, CC]
5. To pay for the expenses of the deed of sale [Art. 1487, CC]

(1) To Transfer Ownership of the Thing and To Deliver the Thing, with
its Accessions and Accessories

i. When Seller is Not the Owner

General Rule: Ownership is not acquired by the buyer. One cannot give
what one does not have. [Art. 1505, CC]

Exceptions:
a. Seller has a right to transfer ownership.

Seller need not be the owner of the thing at the time of perfection of the
contract. It is sufficient that the seller has a right to transfer ownership
thereof at the time it is delivered. [Art. 1459, CC]

One who sells something he does not own yet is bound by the sale when he
acquires the thing later. [Bucton v. Gabar, G.R. No. L-36359 (1974)]

b. Estoppel: Owner is, by his conduct, precluded from denying the seller’s
authority to sell. [Art. 1434, CC]

c. Registered land bought in good faith

General rule: Buyer need not go beyond the Torrens Title

Exception: When he has actual knowledge of facts and circumstances that

would impel a reasonably cautious man to make further inquiry

d. Order of courts; Statutory Sale – In execution sale, the buyer merely steps
into the shoes of the judgment debtor [Sec. 33, Rule 39, ROC]

e. When goods are purchased in Merchant’s store, Fair, or Market [Art.

1505, CC]

ii. Sale by Person having a Voidable Title

488
a. True owner may recover the thing when the ff. requisites concur:
• Subject matter is movable
• Owner has either lost the thing or has been unlawfully deprived. [Art. 559,
CC]

b. Reimbursement is necessary before owner can recover when:

● Buyer acted in good faith
● Acquired at a public auction [Art. 559, CC]

c. Recovery no longer possible when:

● Buyer in good faith
● Acquired it at a merchant’s store, fair or market. [Art. 1506, CC]

iii. Manner of Transfer [Arts. 1477, 1496-150, CC]

General Rule: Ownership of the thing sold shall be transferred to the

vendee upon actual or constructive delivery thereof [Art. 1477, CC]

Exceptions:
a. Contrary stipulation
b. Contract to sell
c. Contract of insurance
d. Sale on acceptance/Trial
e. When seller is not the owner or has voidable title
Obligation to transfer ownership and to deliver is implied in every contract
of sale [Arts. 1458- 1459, CC]
Transfer of ownership requires delivery [Art. 1495, CC]

General Concepts
Under Article 1495, the seller has twin obligations to (a) transfer the
ownership and (b) deliver the thing, which is the object of sale to the buyer.
In Article 1164, this includes the obligation to deliver the fruits and
accessories from the time the obligation to deliver it arises; however he shall
acquire no real right over them until the same has been delivered to him.

Transfer of ownership is effected even if the purchase has been made on

credit. Payment of the purchase price is not essential to transfer of ownership
as long as the property sold was delivered.

Intention to transfer ownership

• All forms of delivery shall be coupled with intention of delivering the thing
sold.
• Seller must be the owner or authorized by owner of the thing sold

When right to transfer ownership must exist: At the time of delivery and
not at the time of perfection of contract of sale.

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iv. Concept of Delivery

Requisites
a. Identity – between what must be delivered and what is actually
delivered
b. Integrity – in a condition suitable for enjoyment
c. Intentional

What to Deliver
a. Thing sold [Art. 1495, CC]
b. Fruits [Art. 1164 & 1537, CC] – belong to the vendee from day of
perfection.
c. Accessions and accessories [Art. 1166 & 1537, CC] – in the same
condition they were in on day of perfection
● Improvements by seller at his expense grants him a usufructuary right
[Art. 1138, 1189, CC]
● No indemnification
● But he may remove it to the extent that there is no damage [Art. 1538, CC]

Where to Deliver
a. A hierarchy is followed:
1. Stipulation
2. Usage of trade
3. Seller’s place of business (office)
4. Seller’s residence
b. In case of specific goods, which the parties knew to be at some other place
when the contract was perfected, that place is the place of delivery
c. If goods at the time of sale are possessed by a third person, then there is
no delivery until he acknowledges to the buyer that he holds the goods for
the buyer.

When to Deliver
Absent a stipulation as to time, delivery must be made within a reasonable
time; demand or tender of delivery shall be made at a reasonable hour.

v. When Delivery Does Not Transfer Title

Sale on Approval or Trial

● Title remains with the seller notwithstanding delivery of the goods.
● Buyer becomes the owner when he:
a. Signifies his approval or acceptance to the seller
b. Does any other act adopting the transaction (i.e. sale to a third person)
c. Retains the goods without giving notice of rejection after the time fixed
has expired; if no time has been fixed, after the expiration of a reasonable
time [Art. 1502, CC]

Sale or Return

490
● Buyer becomes owner of the property on delivery, BUT has the option to
revest ownership in the seller instead of paying the price by returning the
goods within the time fixed in the contract, or, if no time is fixed, within a
reasonable time. Otherwise, the sale becomes absolute.
● Loss or destruction of the property prior to return falls upon the buyer and
makes him responsible for the purchase price.

Sale on Approval v. Sale or Return

Sale on Approval Sale or Return
Ownership does not pass upon Ownership passes to buyer on
delivery remaining with the seller delivery and subsequent return
until buyer signifies his approval. revests ownership in the seller.
Depends on the character or quality Depends on the will of the buyer
of goods
Subject to a suspensive condition Subject to a resolutory condition
Risk of loss remains with the seller Risk of loss remains with the buyer

Express Reservation
If it was stipulated that ownership in the thing shall not pass to the purchaser
until he has fully paid the price, then ownership remains with seller even
when delivery is made [Art. 1478, CC].

Implied Reservation
The following are instances when there is an implied reservation of
ownership:
a. Goods are shipped, but by the bill of lading goods are
deliverable to the seller or his agent, or to the order of the seller
or his agent
b. Bill of lading is retained by the seller or his agent.

When the seller of the goods draws on the buyer for the price and transmits
the bill of exchange and bill of lading to the buyer, and the latter does not
honor the bill of exchange by returning the bill of lading to the seller.

When Sale Not Valid

When the thing sold is a public property

Sale by Person Having a Voidable Title

a. True owner may recover the thing when the ff. requisites
concur:
● Subject matter is movable
● Owner has either lost the thing or has been unlawfully deprived. [Art. 559,
CC]
b. Reimbursement is necessary before owner can recover when:
● Buyer acted in good faith
● Acquired at a public auction [Art. 559, CC]
c. Recovery no longer possible when:

491
● Buyer in good faith
● Acquired it at a merchant’s store, fair or market. [Art. 1506, CC]

vi. Kinds of Delivery

Actual Delivery
Deemed made when the thing sold is placed in the control and possession of
the vendee [Art. 1497, CC]

Not always essential to passing of title [Art. 147, CC]

Parties may agree when and on what conditions the ownership shall pass to
the buyer [e.g.: Art 1478 where ownership will only pass after full payment
of the price]

Constructive Delivery
a. Execution of public instrument [par. 1, Art. 1498, CC]

General Rule: produces the same legal effects of actual delivery.

Exceptions:
1. The parties intended otherwise.
2. At the time of execution, the subject matter was not subject to the control
of the seller, which control must subsist for a reasonable length of time after
execution. [Pasagui v. Villablanca, G.R. No. L-21998 (1975)]

“Control” over thing sold must be such that the seller is capable of
physically transferring it to buyer.

Although parties may stipulate that the execution of a public instrument is

equivalent to delivery, this legal fiction holds true only when there is no
impediment that may prevent the passing of the property from the vendor to
the vendee. [Vda. de Sarmiento v. Lesaca, G.R. No. L-15385 (1960)]

If, notwithstanding execution of the instrument, the buyer cannot enjoy

material tenancy and make use of the object himself or through another in
his name, there is no delivery. [Power Commercial v. CA, G.R. No. 119745
(1997)]

Execution of a public instrument gives rise only to a prima facie

presumption of delivery, negated by failure of the buyer to take actual
possession of land sold. A person who does not have actual possession
cannot transfer constructive possession by execution and delivery of public
instrument. [Spouses Santiago v. Villamor, G.R. No. 168499 (2012)]

b. Symbolic Delivery
Delivery of keys of the place or depositary where the movable is stored or
kept. [Art. 1498, CC]

492
Unless otherwise agreed, when symbolic delivery has been made, the seller
is not obliged to remove tenants to place the buyer in actual possession of
the property as he has already complied with his obligation to transfer
ownership of and deliver the thing sold. [Power Commercial and Industrial
Corp. v. CA, G.R. No. 119745 (1997); Sabio v. The International Corporate
Bank, Inc., G.R. No. 132709 (2001)]

c. Traditio Longa Manu (Long Hand)

Delivery of movable property by mere consent or agreement, if the thing

sold cannot be transferred to the possession of the buyer at the time of sale.
[Art. 1499, CC]

Example: Seller points to the property without actually transferring physical

possession thereof.

Delivery by mere agreement; seller points out to the buyer the property
without need of actually delivering (as when the thing sold cannot be
transferred to the possession of the vendee at the time of sale). Delivery
takes place when the thing is placed in the sight of the purchaser so that he
can take possession of it at pleasure. 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.

When an employer assigned all its rights and title to all surplus property
salvaged by the contractor, traditio longa manu takes place.
Delivery is upon the moment a thing is salvaged. [Board of Liquidators v.
Floro, G.R. No. L-15155 (1960)]

d. Traditio Brevi Manu (Short Hand)

Delivery of movable property by mere consent or agreement, if the buyer

already had it in his possession for any other reason. [Art. 1499, CC]

Happens when the already has possession of the thing sold before the sale by
virtue of another title (as lessee, borrower, depositary, etc.)

e. Traditio Constitutum Possessorium

Seller continues to be in possession of the property sold not as owner but in

some other capacity, like as tenant or lessee. At the time of perfection, the
seller held possession of the subject matter in the concept of owner, and
pursuant to the contract, the seller continues to hold physical possession
thereof as lessee or other form of possession other than the concept of
owner.

For example, a seller remains in possession of the property sold, by virtue of

493
a lease agreement with the vendee, at the time of the perfection of the
contract of sale.

Vendee became, as lessor, the legal possessor while the vendor is in material
possession of the property in the name and representation of the vendee.

Seller continues to be in possession of the property sold

f. Quasi-traditio

Mode of delivery of incorporeal things or rights.

Delivery is effected:
● By execution of public instrument
● When such is not applicable, by placing the titles of ownership in the
possession of the buyer
● By allowing the buyer to use his rights as new owner with the consent of
the seller

g. Delivery to a Common Carrier

General Rule: Delivery to the courier or carrier is tantamount to delivery to

buyer, whether carrier is named by buyer or not. The buyer assumes the risk
of loss.

Exceptions
1. Seller reserved title through the form of the bill of lading, with
intent to remain the owner, not merely for the purpose of
securing payment, OR
2. Contrary intention appears in the contract (i.e. seller is required
to deliver goods to buyer at the point of destination)
3. Delivery by the seller is in breach of the contract
4. F.O.B. (Free on Board or Freight on Board) - When seller bears
the expenses of transportation up to the F.O.B. point.
5. C.I.F. (Cost, Insurance, Freight) – Price quoted includes the
costs of the goods, insurance, and freight charges on the goods
up to the point of destination.
6. F.A.S. (Free Alongside) – Seller bears the expenses of
transportation until he delivers the goods alongside a vessel at a
named port.

vii. Double Sales [Art. 1544, CC]

General Rule: Prior tempore, prior jure (“First in time, priority in right”)
applies.

Requisites:
a. 2 or more valid sales;
b. Same subject matter;

494
 c. 2 or more buyers with conflicting interests over the rightful ownership
of the thing sold;
d. Same seller. [Cheng v. Genato, G.R. No. 129760 (1998)]

Rules on Double Sale

There is no double sale when:
a. Not all the elements of a sale are present
b. The principle of prior tempore, prior jure (he who is first in time is
preferred in right) should apply
c. The two different contracts of sale are made by two different persons,
one of them not being the owner of the property sold.
d. The land sold is not yet registered under the Torrens system
e. The first sale occurred when land was not yet registered, and the
second sale was done when the land was already registered – prior
tempore, prior jure should apply

Rules on Preference
a. Personal property
b. First possessor in good faith
c. Real property
d. First registrant in good faith: second buyer must register the document
in good faith, otherwise, he does not have a better right
e. First possessor in good faith
f. Person with oldest title in good faith

Caveat emptor: One who purchases real property which is in actual

possession of others should make some inquiry concerning the rights of
those in posses

Rules Governing Sale of Movables, Immovables and Unregistered

Lands

a. Sale of Movable: Ownership shall be transferred to the person who may

have first taken possession in good faith.

b. Sale of Immovables: Registered Land – Ownership belongs to the person

who:
• In good faith first recorded the sale in the Registry of Property; or
• If there is no inscription of sale on the title, ownership passes to the
person who in good faith was first in possession; or
• In the absence thereof, to the person who presents the oldest title,
provided there is good faith.

Possession refers to any of the modes of possession in Arts. 1497-1501, CC

Oldest Title as to any public document showing acquisition of the land in

good faith. To constitute “title,” the transmission of ownership must appear

495
in a public document [Art. 1358 (1), CC]

Registration includes any entry made in the Primary Entry Book of the
registry, including both registration in its ordinary and strict sense and
cancellation, annotation, and even marginal notes. [Cheng v. Genato, G.R.
No. 129760 (1998)]

Pencilled entries on the title are not considered registration. [AFPMBAI v.

Court of Appeals, G.R. No. 126745 (1999)]

c. Second Sale Made by Virtue of Execution and Attachment – Art. 1544

does NOT apply in cases where the first sale of an unregistered immovable
occurred prior to an execution sale and the second sale occurred by virtue of
an execution sale. This is because a buyer of unregistered land at an
execution sale only steps into the shoes of the judgment debtor (the person
who sold the property prior to the execution sale). The second buyer merely
acquires the latter’s interest in the property sold as of the time the property
was levied upon. [Carumba v. CA, G.R. No. L-27587 (1970)]

d. Sale of Immovables: Unregistered Land

Instrument or deeds establishing, transmitting, acknowledging, modifying or

extinguishing rights with respect to lands not registered under the Land
Registration Act or the Spanish Mortgage Law, are required to be registered
in the Registry of Property to prejudice 3rd persons, although such
registration is understood to be “without prejudice to a third party with a
better right”. [PD 1528 Sec 113]
Art. 1544 applies to unregistered land subject to a conventional sale
(because of Art. 1358) but NOT to unregistered land subject to judicial sale.
Unregistered by both buyers, the first buyer is preferred. If first buyer did
not register but second buyer registered property, second buyer is preferred.

viii. Property Registration Decree [P.D. 1529]

REQUISITES FOR REGISTRATION OF DEED OF SALE IN GOOD

FAITH

a. Purchaser in Good Faith - One who buys the property of another,

without notice that some other person has a right to or interest in such
property, and who pays a full and fair price for the sale, at the time of the
purchase or before he has notice of the claim/interest of some other person in
the property. [Agricultural and Home Extension Development Group v. CA,
G.R. No. 92310 (1992)]

General Rule: As a rule, he who asserts the status of a purchaser in good

faith and for value has the burden of proving such assertion. [Mathay v. CA,
G.R. No. 115788 (1998)]

496
When buyer is presumed to be in bad faith
● Annotation of adverse claim: Places any subsequent buyer of the
registered land in bad faith. [Balatbat v. CA, G.R. No. 109410 (1996)]
● Annotation of Lis Pendens: Buyer cannot be considered an innocent
purchaser for value where it ignored the lis pendens on the title.
● A purchaser of a parcel of land cannot close his eyes to facts which should
put a reasonable man upon his guard, such as when the property subject of
the purchase is in the possession of persons other than the seller. A buyer
who could not have failed to know or discover that the land sold to him was
in the adverse possession of another is a buyer in bad faith. [Heirs of Ramon
Durano v. Uy, G.R. No. 136456 (2000)]

Lis Pendens Annotation of Adverse Claim

May be cancelled even before the May be cancelled only in one
action is finally terminated for instance, i.e., after the claim is
causes which may not be adjudged invalid or unmeritorious
attributable to the claimant by the Court

The two are not contradictory or repugnant to one another; nor does the
existence of one automatically nullify the other, and if any of the
registrations should be considered unnecessary or superfluous, it would be
the
notice of lis pendens [A. Doronila Resources Development Inc v. CA, G.R.
Nos. L-42956- 571988]

b. Accompanied by vendors duplicate certificate of title, payment of

capital gains tax, and documentary tax registration fees

Must be accompanied by:

● Vendor’s duplicate certificate of title
● Payment of capital gains tax – 6% of the selling price or zonal value,
whichever is higher
● Documentary tax registration fees – 1.5% of the selling price or zonal
value, whichever is higher

ix. Risk of Loss

(Note: This is discussed under Section F of this Sales Reviewer, on Risk of

Loss.)

(2) To Warrant Against Eviction and Against Hidden Defects

(Note: This is discussed under Section H of this Sales Reviewer, on

Warranties.)

4. Obligations of the vendee

a. Inspection and acceptance

497
The buyer is deemed to have accepted the goods when:
1. He intimates to the seller that he has accepted them
2. 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
3. After the lapse of a reasonable time, he retains the goods without
intimating to the seller that he has rejected them. [Art. 1585, CC]

General rule: Exercise of acts of ownership over the goods is a

manifestation of acceptance, such as making use of them as owner, making
alterations in the goods, or subjecting it to the process of manufacture.

Exception: Buyer’s right to make a test of goods, but only if necessary, to

enable him to determine whether to accept or reject the goods.

Modes of acceptance
1. Express acceptance - Buyer intimates to the seller that the has
accepted them
2. Implied acceptance
a. When the vendee, after delivery of goods,
does any act inconsistent with the vendor’s
ownership or makes an alteration in them in
a manner proper only for an owner; or
b. When the buyer, after the lapse of a
reasonable time, retains the goods without
intimating his rejection.

Vendee’s refusal
If vendee has the right to refuse and rightfully refused upon delivery,

He has no obligation to return them UNLESS otherwise agreed BUT he has

to take reasonable care of the goods

He is not a depositary thereof UNLESS he voluntarily agrees to be one

i. Inspection/buyer’s right to examine [Art. 1584]

General rule: The buyer is not deemed to have accepted the goods
delivered which he has not previously examined unless and until he has had
a reasonable opportunity to examine them for the purpose of ascertaining
whether they are in conformity with the contract.

Exception: If there is a stipulation to the contrary [par. 1, Art. 1584, CC]

General rule: The seller is bound, when he tenders delivery to the buyer, on
request, to afford the buyer a reasonable opportunity to examine the goods
for the purpose of ascertaining whether they are in conformity with the
contract.

498
Exception: Unless otherwise agreed upon [par. 2, Art. 1584, CC]

Exception to the right to examine: C.O.D. Sales

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:
a. agreement; or
b. usage of trade
c. permitting such examination. [par. 3, Art. 1584, CC]

ii. Delivery of goods in installment

General rule: The vendee is not bound to accept delivery of goods in

installment

Exception: Unless otherwise agreed upon [par. 1, Art. 1583, CC]

Where separate price has been fixed for each installment [par. 2, Art.
1583, CC]
Where there is a contract of sale of goods
1. To be delivered by stated installments,
2. To be separately paid for, and
3. 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 or more installments.

It depends in each case on the terms of the contract and the circumstances of
the case:
1. 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
2. Whether the breach is severable, giving rise to a claim for compensation
but not to a right to treat the whole contract as broken.

b. Obligation to pay the price

Article 1582, CC: 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.

a. Obligation to pay interest

499
The buyer shall owe interest on the price from the time the thing is delivered
up to the time of payment if there is stipulation requiring interests, or even if
there is none, if the thing delivered produces fruits or income, or if the buyer
incurs in default from the time of judicial or extrajudicial demand for
payment [Baviera].

The three instances when the vendee shall pay interest for the period
between delivery and payment of the price:
1. If there was a stipulation;
2. If the thing sold and delivered producesfruits or income;
3. If the vendee is in default, from the time of judicial or extrajudicial
demand for payment [Art. 1589, CC].

b. Right of vendee to suspend payment of price

The vendee has the right to suspend in two instances:

1. If he is disturbed in the possession orownership of the thing bought; or
2. If he has reasonable grounds to fear such disturbance, by a vindicatory
action or aforeclosure of mortgage [Art. 1590, CC]

Except
1. If the vendor gives security for the return of the price in a proper case
2. If it has been stipulated
3. If the vendor caused disturbance or danger to cease
4. If the disturbance is a mere act of trespass
5. If the vendee has already fully paid the price [De Leon]

Should the vendee be disturbed in the possession or ownership of the thing

delivered, or should he have reasonable grounds to fear such disturbance by
a vindicatory action, or a foreclosure of mortgage, he may suspend payment
until the vendor has caused the disturbance or danger to cease, unless there
is a stipulation to the contrary [Baviera]

In cases of delay of payment, one should also be liable for interest and
penalties for such delay in payment. It would be grossly unfair for
respondent to be deprived of the amount it would have received from the
sale of their properties, while petitioners benefited from the use and
continued possession of the properties [Sps. Mahusay v. B.E. San Diego
(2011)].

c. Obligation to Bear the Expenses for the Execution and

Registration of the Sale and Putting the Goods in a Deliverable
State, if so Stipulated

Art.1521, par. 5: Unless otherwise agreed, the expenses of and incidental to

putting the goods into a deliverable state must be borne by the seller.

500
5. Transfer of ownership
The ownership of the thing sold shall be transferred to the vendee upon the
actual or constructive delivery thereof, or in any manner signifying an
agreement that possession is transferred from the vendor to the vendee.
[Baviera]

Note: The contract of sale constitutes only a right to the transfer or

acquisition of ownership, while delivery is the method of accomplishing the
same.

a. When the seller is not the owner

General Rule: Ownership is not acquired by the buyer. One cannot give
what one does not have. [Art. 1505, CC]

Exceptions
1. Seller has a right to transfer ownership

Seller need not be the owner of the thing at the time of perfection of the
contract. It is sufficient that seller has a right to transfer ownership thereof at
the time it is delivered. [Art. 1459, CC]

One who sells something he does not own yet is bound by the sale when he
acquires the thing later. [Bucton v. Gabar, G.R. No. L-36359 (1974)]

2. Estoppel: Owner is, by his conduct, precluded from denying the seller’s
authority to sell. [Art. 1434, CC]

3. Registered land bought in good faith

General rule: Buyer need not go beyond the Torrens Title

Exception: When he has actual knowledge of facts and circumstances that

would impel a reasonably cautious man to make further inquiry

4. Order of courts; statutory sale – In execution sale, the buyer merely steps
into the shoes of the judgment debtor [Sec. 33, Rule 39, ROC]

5. When goods are purchased in Merchant’s store, Fair, or Market [Art.

1505, CC]

b. Sale by Person Having a Voidable Title

1. True owner may recover the thing when the ff. requisites concur:
• Subject matter is movable
• Owner has either lost the thing or has been unlawfully deprived. [Art. 559,
CC]

2. Reimbursement is necessary before owner can recover when:

501
• Buyer acted in good faith
• Acquired at a public auction [Art. 559, CC]

3. Recovery no longer possible when:

• Buyer in good faith
• Acquired it at a merchant’s store, fair or market. [Art. 1506, CC]

c. The manner of transfer

General Rule: Ownership of the thing sold shall be transferred to the

vendee upon actual or constructive delivery thereof [Art. 1477, CC]

Exceptions
a. Contrary stipulation
b. Contract to sell
c. Contract of insurance
d. Sale on acceptance/Trial
e. When seller is not the owner or has voidable title

Obligation to transfer ownership and to deliver is implied in every contract

of sale [Arts. 1458- 1459, CC]

General Concepts
Under Article 1495, the seller has twin obligations to (a) transfer the
ownership and (b) deliver the thing, which is the object of sale to the buyer.
In Article 1164, this includes the obligation to deliver the fruits and
accessories from the time the obligation to deliver it arises; however he shall
acquire no real right over them until the same has been delivered to him.

Transfer of ownership is effected even if the purchase has been made on

credit. Payment of the purchase price is not essential to transfer of ownership
as long as the property sold was delivered.

Intention to transfer ownership

All forms of delivery shall be coupled with intention of delivering the thing
sold.

Seller must be owner or authorized by owner of the thing sold

When right to transfer ownership must exist

At the time of delivery and not at the time of perfection of contract of sale.

d. The concept of delivery

Requisites
a. Identity – between what must be delivered and what is actually delivered
b. Integrity – in a condition suitable for enjoyment
c. Intentional

502
What to Deliver
a. Thing sold [Art. 1495, CC]
b. Fruits [Art. 1164 & 1537, CC] – belong to the vendee from day of
perfection.
c. Accessions and accessories [Art. 1166 & 1537, CC] – in the same
condition they were in on day of perfection
• Improvements by seller at his expense grants him a usufructuary right [Art.
1138, 1189, CC]
• No indemnification
• But he may remove it to the extent that there is no damage [Art. 1538, CC]

Where to Deliver
a. A hierarchy is followed:
i. Stipulation
ii. Usage of trade
iii. Seller’s place of business (office)
iv. Seller’s residence
b. In case of specific goods, which the parties knew to be at some other place
when the contract was perfected, that place is the place of delivery
c. If goods are at the time of sale are possessed by a third person, then there
is no delivery until he acknowledges to the buyer that he holds the goods for
the buyer.

When to Deliver
Absent a stipulation as to time, delivery must be made within a reasonable
time; demand or tender of delivery shall be made at a reasonable hour.

e. When delivery does not transfer title

Title remains with the seller notwithstanding delivery of the goods. Buyer
becomes the owner when he:
a. Signifies his approval or acceptance to the seller
b. Does any other act adopting the transaction (i.e. sale to a third person)
c. Retains the goods without giving notice of rejection after the time fixed
has expired; if no time has been fixed, after the expiration of a reasonable
time [Art. 1502, CC]

Sale on Return
Buyer becomes owner of the property on delivery, BUT has the option to
revest ownership in the seller instead of paying the price by returning the
goods within the time fixed in the contract, or, if no time is fixed, within a
reasonable time. Otherwise, the sale becomes absolute.

Loss or destruction of the property prior to return falls upon the buyer and
makes him responsible for the purchase price.

503
 Sale on Approval Sale on Return
Ownership does not pass upon Ownership passes to buyer on
delivery remaining with the seller delivery and subsequent return
until buyer signifies his approval. revests ownership in the seller.
Depends on the character or quality Depends on the will of the buyer
of goods
Subject to a suspensive condition Subject to a resolutory condition
Risk of loss remains with the seller Risk of loss remains with the buyer

Express Reservation
If it was stipulated that ownership in the thing shall not pass to the purchaser
until he has fully paid the price, then ownership remains with seller even
when delivery is made [Art. 1478, CC]

Implied Reservation
The following are instances when there is an implied reservation of
ownership:
a. Goods are shipped, but by the bill of lading goods are deliverable to the
seller or his agent, or to the order of the seller or his agent
b. Bill of lading is retained by the seller or his agent.

When the seller of the goods draws on the buyer for the price and transmits
the bill of exchange and bill of lading to the buyer, and the latter does not
honor the bill of exchange by returning the bill of lading to the seller.

Sale by Person Having a Voidable Title

a. True owner may recover the thing when the ff. requisites concur:
• Subject matter is movable
• Owner has either lost the thing or has been unlawfully deprived. [Art.
559, CC]
b. Reimbursement is necessary before owner can recover when:
• Buyer acted in good faith
• Acquired at a public auction [Art. 559, CC]
c. Recovery no longer possible when:
• Buyer in good faith
• Acquired it at a merchant’s store, fair or market. [Art. 1506, CC]

i. Actual delivery

Actual Delivery
Deemed made when the thing sold is placed in the control and possession of
the vendee [Art. 1497, CC]

Not always essential to passing of title [Art. 147, CC]

Parties may agree when and on what conditions the ownership shall pass to
the buyer [E.g.: Art 1478 where ownership will only pass after full payment

504
of the price]

ii. Execution of public instrument [par. 1, Art. 1498, CC]

General Rule: produces the same legal effects of actual delivery.

Exceptions
1. The parties intended otherwise.
2. At the time of execution, the subject matter was not subject to the control
of the seller, which control must subsist for a reasonable length of time after
execution. [Pasagui v. Villablanca, G.R. No. L-21998 (1975)]

Although parties may stipulate that the execution of a public instrument is

equivalent to delivery, this legal fiction holds true only when there is no
impediment that may prevent the passing of the property from the vendor to
the vendee. [Vda. de Sarmiento v. Lesaca, G.R. No. L-15385 (1960)]

If, notwithstanding execution of the instrument, the buyer cannot enjoy

material tenancy and make use of the object himself or through another in
his name, there is no delivery. [Power Commercial v. CA, G.R. No. 119745
(1997)]

Execution of a public instrument gives rise only to a prima facie

presumption of delivery, negated by failure of the buyer to take actual
possession of land sold. A person who does not have actual possession
cannot transfer constructive possession by execution and delivery of public
instrument. [Spouses Santiago v. Villamor, G.R. No. 168499 (2012)]

iii. Symbolic delivery

Delivery of keys of the place or depositary where the movable is stored or

kept. [Art. 1498, CC]

Unless otherwise agreed, when symbolic delivery has been made, the seller
is not obliged to remove tenants to place the buyer in actual possession of
the property as he has already complied with his obligation to transfer
ownership of and deliver the thing sold. [Power Commercial and Industrial
Corp. v. CA, G.R. No. 119745 (1997); Sabio v. The International Corporate
Bank, Inc., G.R. No. 132709 (2001)]

iv. Traditio longa manu (long hand)

Delivery of movable property by mere consent or agreement, if the thing

sold cannot be transferred to the possession of the buyer at the time of sale.
[Art. 1499, CC]

Example:
Seller points to the property without actually transferring physical

505
possession thereof.

Delivery by mere agreement; seller points out to the buyer the property
without need of actually delivering (as when the thing sold cannot be
transferred to the possession of the vendee at the time of sale). Delivery
takes place when the thing is placed in the sight of the purchaser so that he
can take possession of it at pleasure. 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.

When an employer assigned all its rights and title to all surplus property
salvaged by the contractor, traditio longa manu takes place. Delivery is upon
the moment a thing is salvaged. [Board of Liquidators v. Floro, G.R. No. L-
15155 (1960)]

v. Traditio brevi manu (short hand)

Delivery of movable property by mere consent or agreement, if the buyer

already had it in his possession for any other reason. [Art. 1499, CC]

Happens when the already has possession of the thing sold before the sale by
virtue of another title (as lessee, borrower, depositary, etc.)

vi. Traditio constitutum possessorium

Seller continues to be in possession of the property sold not as owner but in

some other capacity, like as tenant or lessee.

At the time of perfection, the seller held possession of the subject matter in
the concept of owner, and pursuant to the contract, the seller continues to
hold physical possession thereof as lessee or other form of possession other
than the concept of owner.

For example, a seller remains in possession of the property sold, by virtue of

a lease agreement with the vendee, at the time of the perfection of the
contract of sale.

Vendee became, as lessor, the legal possessor while the vendor is in material
possession of the property in the name and representation of the vendee.

Seller continues to be in possession of the property sold.

vii. Quasi-traditio

Mode of delivery of incorporeal things or rights.

Delivery is effected:
• By execution of public instrument
• When such is not applicable, by placing the titles of ownership in the

506
possession of the buyer
• By allowing the buyer to use his rights as new owner with the consent of
the seller

viii. Delivery to a common carrier

General Rule: Delivery to the courier or carrier is tantamount to delivery to

buyer, whether carrier is named by buyer or not. The buyer assumes the risk
of loss.

Exceptions
1. Seller reserved title through the form of the bill of lading, with intent
to remain the owner, not merely for the purpose of securing payment,
OR
2. Contrary intention appears in the contract (i.e. seller is required to
deliver goods to buyer at the point of destination)
3. Delivery by the seller is in breach of the contract
4. F.O.B. (Free on Board or Freight on Board) - When seller bears the
expenses of transportation up to the F.O.B. point.
5. C.I.F. (Cost, Insurance, Freight) – Price quoted includes the costs of
the goods, insurance, and freight charges on the goods up to the point
of destination.
6. F.A.S. (Free Alongside) – Seller bears the expenses of transportation
until he delivers the goods alongside a vessel at a named port.

f. Double sale

Article 1544 (1), CC: 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.

Article 526, CC: 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.

He is deemed a possessor in bad faith who possesses in any case contrary

to the foregoing.

Mistake upon a doubtful or difficult question of law may be the basis of

good faith.

Article 527, CC: Good faith is always presumed, and upon him who
alleges bad faith on the part of a possessor rests the burden of proof.

General Rule: Prior tempore, prior jure (“First in time, priority in right”)
applies.

507
Requisites:
a. 2 or more valid sales;
b. Same subject matter;
c. 2 or more buyers with conflicting interests over the rightful
ownership of the thing sold;
d. Same seller. [Cheng v. Genato, G.R. No. 129760 (1998)]

Rules on Double Sale

There is no double sale when:
a. Not all the elements of a sale are present
b. The principle of prior tempore, prior jure (he who is first in
time is preferred in right) should apply
c. The two different contracts of sale are made by two different
persons, one of them not being the owner of the property sold.

d. The land sold is not yet registered under the Torrens system
e. The first sale occurred when land was not yet registered, and
the second sale was done when the land was already registered
– prior tempore, prior jure should apply

Rules on preference
a. Personal property
b. First possessor in good faith
c. Real property
d. First registrant in good faith: second buyer must register the document
in good faith, otherwise, he does not have a better right
e. First possessor in good faith
f. Person with oldest title in good faith

Rules Governing Sale of Movables, Immovables and Unregistered

Lands
a. Sale of Movable: Ownership shall be transferred to the person who
may have first taken possession in good faith.
b. Sale of Immovables: Registered Land – Ownership belongs to the
person who:
• In good faith first recorded the sale in the Registry of Property; or
• If there is no inscription of sale on the title, ownership passes to the
person who in good faith was first in possession; or
• In the absence thereof, to the person who presents the oldest title,
provided there is good faith.

Possession refers to any of the modes of possession in Arts. 1497-1501, CC.

Oldest Title as to any public document showing acquisition of the land in

good faith. To constitute “title,” the transmission of ownership must appear
in a public document [Art. 1358 (1), CC].

508
Registration includes any entry made in the Primary Entry Book of the
registry, including both registration in its ordinary and strict sense and
cancellation, annotation, and even marginal notes. [Cheng v. Genato, G.R.
No. 129760 (1998)]
c. Second Sale Made by Virtue of Execution and Attachment – Art. 1544
does NOT apply in cases where the first sale of an unregistered
immovable occurred prior to an execution sale and the second sale
occurred by virtue of an execution sale. This is because a buyer of
unregistered land at an execution sale only steps into the shoes of the
judgment debtor (the person who sold the property prior to the
execution sale). The second buyer merely acquires the latter’s interest
in the property sold as of the time the property was levied upon.
[Carumba v. CA, G.R. No. L-27587 (1970)]
d. Sale of Immovables: Unregistered Land – Instrument or deeds
establishing, transmitting, acknowledging, modifying or extinguishing
rights with respect to lands not registered under the Land Registration
Act or the Spanish Mortgage Law, are required to be registered in the
Registry of Property to prejudice 3rd persons, although such
registration is understood to be “without prejudice to a third party
with a better right”. [PD 1528 Sec 113]

Art. 1544 applies to unregistered land subject to a conventional sale

(because of Art. 1358) but NOT to unregistered land subject to judicial sale.

Unregistered by both buyers, the first buyer is preferred.

If first buyer did not register but the second buyer registered the property,
the second buyer is preferred.

g. Property Registration Decree

Requisites for registration of deed of sale in good faith

a. Purchaser in Good Faith - One who buys the property of another,

without notice that some other person has a right to or interest in such
property, and who pays a full and fair price for the sale, at the time of the
purchase or before he has notice of the claim/interest of some other person in
the property. [Agricultural and Home Extension Development Group v. CA,
G.R. No. 92310 (1992)]

General Rule: As a rule, he who asserts the status of a purchaser in good

faith and for value has the burden of proving such assertion. [Mathay v. CA,
G.R. No. 115788 (1998)]

When buyer is presumed to be in bad faith

Annotation of adverse claim: Places any subsequent buyer of the registered

509
land in bad faith. [Balatbat v. CA, G.R. No. 109410 (1996)]

Annotation of Lis Pendens: Buyer cannot be considered an innocent

purchaser for value where it ignored the lis pendens on the title.

A purchaser of a parcel of land cannot close his eyes to facts which should
put a reasonable man upon his guard, such as when the property *subject of
the purchase is in the possession of persons other than the seller. A buyer
who could not have failed to know or discover that the land sold to him was
in the adverse possession of another is a buyer in bad faith. [Heirs of Ramon
Durano v. Uy, G.R. No. 136456 (2000)]

Lis Pendens Annotation of Adverse Claim

May be cancelled even before the May be cancelled only in one
action is finally terminated for instance, i.e., after the claim is
causes which may not be adjudged invalid or unmeritorious
attributable to the claimant by the Court

The two are not contradictory or repugnant to one another; nor does the
existence of one automatically nullify the other, and if any of the
registrations should be considered unnecessary or superfluous, it would be
the notice of lis pendens [A. Doronila Resources Development Inc v. CA,
G.R. Nos. L-42956- 571988]

b. Accompanied by vendors duplicate certificate of title, payment of

capital gains tax, and documentary tax registration fees

Must be accompanied by:

• Vendor’s duplicate certificate of title
• Payment of capital gains tax – 6% of the selling price or zonal value,
whichever is higher
• • Documentary tax registration fees – 1.5% of the selling price or
zonal value, whichever is higher

6. Risk of loss
The Code Commission followed the common law rule that the OWNER
bears the risk of loss in absence of stipulation to the contrary, while
retaining the rule in Roman Law which requires delivery by the seller,
whether actual or constructive, to transfer OWNERSHIP to the buyer.

Article 1263, CC: In an obligation to deliver a generic thing, the loss or

destruction of anything of the same kind does not extinguish the
obligation.

General Rule: Risk of loss shall be borne by the owner (Note: owner is not
always the seller)

510
Exceptions
1. When ownership of the goods has been transferred to him, the buyer
bears the risk of loss.
2. When there is a stipulation to the contrary.
3. When the seller retains the title for security, the buyer bears the risk of
loss.
4. When there is delay in the delivery, the party in fault bears the risk of
loss.
5. When sale is for “approval or trial”, the seller bears the risk of loss
until the buyer approves or the trial period lapses.
6. When sale is on “return”, the buyer bears the risk of loss until he
returns it.

a. Res Perit domino [Arts. 1263, and 1189 CC]

Owner bears risk of loss and deterioration. The ownership is transferred only
upon delivery.

b. Prior to Perfection of Contract

Seller bears risk of loss and deterioration.

Basis: Res perit domino

When there is no proof that the parties have agreed as to the thing which
should be the subject of the contract and that one has accepted the terms
proposed by the other, it cannot be said that the contracting parties have
given their mutual consent as to the subject and consideration of the
contract. The disappearance or loss of property which the owner intended or
attempted to sell can only interest the owner, who should suffer the loss, and
not a third party who has acquired no rights nor incurred any liability with
respect thereto. [Roman v. Grimalt, 1906]

c. At Time of Perfection [Arts. 1493 and 1494, CC]

Seller bears risk of loss and deterioration.

Basis: Res perit domino.

Article 1493, CC: 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 with- out 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.

Article 1494, CC: 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

511
 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.

Total Loss Partial Loss (Or loss which results

in substantial change in character)
Contract is void because the object Buyer may withdraw from the
did not exist at the time of the contract or Buy the remainder at a
transaction. proportionate price

Article 1496 of the Civil Code which provides that in the absence of an
express assumption’ of risk by the buyer, the things sold remain at seller’s
risk until the ownership thereof is transferred to the buyer,” is applicable to
this case, for there was neither an actual nor constructive delivery of the
thing sold, hence, the risk of loss should be borne by the seller, Norkis,
which was still the owner and possessor of the motorcycle when it was
wrecked. This is in accordance with the wellknown doctrine of res perit
domino. [Norkis v. CA, 1991]

d. After Perfection but Before Delivery

Loss
General Rule: Stipulations in the contract will govern.

Exception: In the absence of stipulation, there are two conflicting views:

1. Res perit creditori or the buyer bears the risk of loss.

This is an exception to the rule of res perit domino

Basis: Art. 1504, CC only covers goods.

Pursuant to Art. 1262, CC if the thing is destroyed without the fault of the
debtor/seller, the obligation to pay shall subsist.
2. Res perit domino or the seller bears the risk of loss.
Basis: The rule on loss is different from the rule on deterioration for the loss
would be for the account of the seller, while the deterioration would be for
the account of the buyer.

In reciprocal obligations, the extinguishment of the obligation due to loss of

the thing extinguishes the entire juridical relation.

Deterioration [Art. 1189 CC]

Impairment is borne by the BUYER if the thing deteriorates without the
fault of the seller.

512
If it deteriorates through the fault of the seller, the buyer may choose
between rescission of obligation and fulfillment, either case with indemnity
for damages.

e. After Delivery

Article 1504, CC: 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.

General Rule: Buyer bears risk of loss and deterioration.

Exceptions: [Art. 1504 (1) and (2), CC]

a. Where delivery has been made either to the buyer or to the bailee for the
buyer, but ownership in the goods has been retained by the seller merely to
secure performance by the buyer of his obligations under the contract; and
b. 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.

SUMMARY OF RULES ON THE RISK OF LOSS

Before Seller bears risk of loss or deterioration
Perfection Seller also benefits from the fruits and improvements
therein
At Entire Loss will be ineffective
Perfection Substantial Loss or Deterioration shall allow buyer to
withdraw or buy the remainder at a proportionate price.
After Seller bears risk of loss
Perfection Buyer bears risk of deterioration
Buyer also benefits from the fruits and improvements
therein
Before Buyer bears risk of loss or deterioration
Delivery Buyer also benefits from the fruits and improvements
therein

7. Documents of title
a. In General

513
Documents of Title to Goods – Includes bills of lading, dock warrants,
“quedans” or warehouse receipts or orders for the delivery of goods
• This is proof of possession or control of the goods
• This also authorizes the possessor of the document to transfer or
receive, either by indorsement or delivery, the goods represented by
the document,

Bill of Lading – A document issued by the common carrier acknowledging

receipt of goods described therein for transportation to a designated place
and delivery to a named consignee
• It is a symbol of possession and control of the goods if it is negotiable
in form
• This authorizes the consignee to transfer the goods to another
• If properly negotiated, this shall operate as a transfer of possession of
the goods in transit as effectively as a physical delivery thereof

b. Kinds of Documents of Title

Negotiable – the goods described therein are deliverable to bearer or to the

order of the consignee

Non-Negotiable – deliverable only to a specified person

NEGOTIABLE DOCUMENTS OF TITLE

How Negotiated
A negotiable bill of lading may be negotiated by delivery of the document
to another if by the terms thereof, the goods are deliverable to bearer

When the bill of lading was endorsed in blank by the person to whose
order the goods were deliverable.

If by its terms the goods are deliverable to the order of a specified person, it
can only be negotiated by indorsement of such person.

Who May Negotiate It

Only the owner of the document or one to whom possession or custody of
the document has been entrusted by the owner, may negotiate it. [Art. 1512,
CC]

Or the one to whom possession or custody of document has been entrusted

by the owner. This was in accordance with common law denying the full
effects of negotiability of bills of lading inasmuch as they do not represent
money but merely evidence of performance of certain contractual duties.
Owner should not be divested of his rights merely upon loss of the
documents.

514
Rights Acquired by Negotiation
A document of title represents the right of the consignee in the goods so
that:
• A person to whom a negotiable document of title had been duly
negotiated acquires not merely the rights of his vendor but also
whatever rights the original consignee had over the goods.
• The buyer of the document of title may acquire a better title than his
vendor, constituting an exception to Art. 1505, CC.

Note: The validity of the negotiation of a document of title to an innocent

purchaser for value is not affected by the fact that there was a breach of duty
on the part of the person to whom such document was entrusted by the
owner, or by the fact that the owner of the document was deprived of it by
loss, theft, fraud, accident, mistake, duress or conversion. [Baviera]

Example: If a negotiable instrument was indorsed in blank by the consignee

and was stolen by the one who sold and delivered the document to an
innocent purchaser for value = the latter acquires the title of the consignee

Implied Warranties
A person who transfers or negotiates a document of title for value:
• Warrants not only the genuineness and validity of the document and
his right to transfer it
• BUT ALSO assumed all the warranties of a vendor of goods.

However, he does NOT warrant that the common carrier will fulfill its
obligations to deliver the goods or that the previous indorsers will fulfill
their obligation.
• The indorser of a negotiable document of title does not assume the
same warranties like that of a general indorser of a negotiable bill of
exchange/promissory note
o A document of title refers to specific goods in the possession of the
carrier
o This cannot be substituted by similar goods of the same kind and
quantity should the carrier fail to deliver the goods described in the
document.

Creditor’s Rights Against the Goods

General Rule: Goods in the hands of the carrier covered by a negotiable
document of title cannot be attached or levied upon
Exception: Unless the document be first surrendered to the carrier or
impounded by the court or its negotiation be enjoined.

For the mercantile theory of documents of title is founded on the idea that a
negotiable document of title represents the goods [Baviera]:
• THUS, it is not allowable for the carrier to deliver the goods without
the surrender of the negotiable bill of lading to them

515
 o Or for the law to allow attachment or levy on the goods, regardless of
an outstanding negotiable document of title.

NON-NEGOTIABLE DOCUMENTS OF TITLE

How Transferred
Goods described in a non-negotiable document of title are deliverable only
to a specified person:
• Thus, the carrier will NOT deliver the goods to any holder of the
document,
• Or to whom such document of title may have been endorsed by the
consignee.

There must be evidence of the sale or donation of the goods:

• The person must present to the carrier the deed of sale or donation in
his favor.
• Hence, delivery of such document to a purchaser or donee cannot
operate as a symbolic delivery of the goods described therein as
would pass title to the latter.
• Even if the deed of sale or donation is evidenced in a public
instrument, the execution of such instrument will not operate as a
constructive delivery of the goods described in the bill of lading
where the goods are in possession of a third person.

Rights Acquired by Transfer of Documents of Title

Transfer – the assignment of the rights of the consignee of a non-negotiable
document of title to another.

Also refers to a case where an “order” document of title was sold or

assigned, without indorsement.

The effect of a transfer of document of title is that the transferee does not
acquire a better title than his transferor.
The same rules governing sales of goods not covered by a document of title
apply.

Illustration: Where an "order" bill of lading was sold without endorsement,

the transferee can bring an action to compel the transferor to endorse the
document, unless a contrary intention appears – but the “negotiation” will
take effect only as of the time endorsement is actually made.

Hence, before endorsement, the rights of the transferee may be defeated by

the rights of a prior party who was illegally deprived of possession of such
document.

8. Warranties
Warranties - A statement or representation made by the seller

516
contemporaneously and as part of the contract of sale, having reference to
the character, quality, or title of the goods, and by which he promises or
undertakes to ensure that certain facts are or shall be as he then represents.

Not every false representation voids the contract, only those matters
substantially affecting the buyer’s interest, not matters of opinion, judgment,
probability, or expectation. When the buyer undertakes his own
investigation, and the seller does nothing to prevent it from being as full as
the buyer chooses, the buyer cannot afterwards allege misrepresentations.
[Songco v. Sellner, G.R. No. L-11513 (1917)]

Economic Loss Doctrine: Where the defect makes the goods less valuable

Condition v. Warranty
Article 1545, CC: 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 de- scribed
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.

Condition Warranty
Pertains to and affects the existence Goes into the performance of an
of the obligation obligation and may,
in itself, be an obligation
Non-happening does not amount to Non-fulfillment constitutes breach
breach of contract of contract
Must be stipulated Stipulation or operation of law
May attach either to the seller’s duty Always relates to the subject matter
to deliver thing or some other or the seller’s obligations as to the
circumstance subject matter

If seller has promised that the condition should happen or be performed, the
buyer may treat the nonperformance of the condition as a breach of
warranty. [Art. 1545, CC]

Express Implied
Nature is Contractual; Freely Constituted by Law
Represented
Stipulated by parties, thereby Only seller is bound, whether or not
binding both the seller and buyer intended or known by the parties.

517
 a. Express Warranties

For there to be express warranty, the following requisites must concur:

a. An affirmation of fact or any promise relating to the thing sold;
b. The natural tendency of such affirmation or promise is to induce the buyer
to buy;
c. The buyer buys the thing relying thereon. [Art. 1546, CC]
d. Made before the sale, not upon delivery or any other point

An express warranty can be made by and also be binding on the seller even
in the sale of a second hand article. [Moles v. IAC, G.R. No. 73913 (1989)]

Express Warranty v. Dealer’s/Trader’s Talk

Article 1545, CC: 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.

Article 1340, CC: The usual exaggerations in trade, when the other party
had an opportunity to know the facts, are not in themselves fraudulent.

Article 1341, CC: 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.

Express Warranty Dealer’s or Trader’s Talk

What is specifically represented as Affirmation of the value of the
true in said document cannot be thing or statement of only the
considered as mere dealer's talk. seller’s opinion is not a warranty
[Moles v. IAC, supra] unless:
● The seller made it as an expert;
● It was relied upon by the buyer.
[Art.1546, CC]
● Ordinarily, what does not appear
on the face of the written
instrument [Moles v. IAC, supra]

Express Warranty v. False Representation

Article 1342, CC: Misrepresentation by a third person does not vitiate
consent, unless such misrepresentation has created substantial mistake and
the same is mutual.

Express Warranty False Representation

518
 Concealment of facts does not When concealment of facts comes
necessarily amount to false with an active misstatement of fact
representation or a partial statement of fact, such
that withholding of that unsaid
portion makes that which is stated
absolutely false.

However, a buyer who fails to

inspect the condition of property
despite ample opportunity to do so
when there is no opposition on the
part of seller to inspect cannot later
on allege false representation.
[Philippine Manufacturing Co. v.
Go Jocco, G.R. No. L-24256
(1926)]

b. Implied Warranties [Art. 1547, CC]

An implied warranty is derived by law, by implication, or inference from the

nature of the transaction or relativation, or circumstances of the parties,
irrespective of any intention of the seller to create it. [De Leon]

Implied Warranty of Title

a. Implied Warranty against Encumbrance/Non-Apparent Servitudes
b. Implied Warranty against Hidden Defects [Art. 1547, CC]
• Implied Warranty as to Merchantable Quality and Fitness of Goods
• Implied Warranty against Redhibitory Defect in the Sale of Animals
[Art. 1572, CC]
• Quality and Fitness of Goods in Sale by Sample or Description
c. Other Warranties

IMPLIED WARRANTY OF TITLE

Implied warranty arises by operation of law and need not be stipulated in the
contract of sale.

Warranty of Seller’s Right to Sell: Seller warrants his right to sell at the
time the ownership is to pass.

Inapplicable to a sheriff, auctioneer, mortgagee, pledgee, or other person

professing to sell by virtue of authority in fact or law. [Art. 1547, CC]

Warranty against Eviction: Seller warrants that buyer, from the time
ownership passes, shall have and enjoy legal and peaceful possession of the
thing. Its requisites are:
a. Buyer is deprived of the whole or a part of the thing sold;

519
 b. Eviction is by final judgment;
c. Final judgment based on a right prior to the sale or an act imputable to
the vendor;
d. Seller is summoned and made codefendant in the suit for eviction at
the instance of the buyer. [Power Commercial and Industrial Corp. v.
CA, G.R. No. 119745 (1997)]

IMPLIED WARRANTY AGAINST ENCUMBRANCE/NON-

APPARENT SERVITUDES

Requisites for breach:

a. Thing sold is an immovable
b. Burden or servitude encumbering the thing sold is:
1. Non-apparent to the naked eye
2. Not mentioned in the agreement
3. Of such nature that it must be presumed that the buyer would not have
bought it had he been aware of it
4. Not recorded in the Registry of Property unless there is an express
warranty that the thing is free from all burdens and encumbrances
[Art. 1560, CC]

IMPLIED WARRANTY AGAINST HIDDEN DEFECTS

Requisites for breach:

a. The defect renders the thing sold unfit for the use for which it was
intended OR diminishes its fitness for such use to such an extent that
had the buyer been aware thereof, he would not have bought it or
would have paid a lower price;
b. The defect is not patent or visible;
c. The buyer is not an expert who, by reason of his trade or profession,
should have known the defect
d. The seller is aware of the hidden fault or defect, OR even if he is not
aware thereof, if there is no stipulation to the contrary [Art.1566]

The buyer must also give notice of such redhibitory defect within a
reasonable time. The use contemplated must be that which is stipulated, and
in the absence of stipulation, that which is adopted to the nature of the thing,
and to the business of the buyer.

IMPLIED WARRANTY AS TO MERCHANTABLE QUALITY AND

FITNESS OF GOODS

Merchantable Quality
a. Where the goods are brought by description from a seller who deals in
goods of that description [Art. 1562, CC]
b. In a sale by sample, if the seller is a dealer in goods of that kind and the
defect is not apparent on reasonable examination of the sample [Art. 1566,

520
CC]

Warranty of merchantability is warranty that goods are reasonably fit for the
general purpose for which the same are sold.

Warranty of fitness is warranty that goods are suitable for the special
purpose of the buyer which will not be satisfied by mere fitness for general
purposes.

In a sale by sample, there is implied warranty that goods are free from
defects not apparent on reasonable examination of sample and which render
goods unmerchantable. [Mendoza v. David, G.R. No. 147575 (2004)]

“Fitness for a particular purpose”: Where the buyer expressly or

impliedly makes known to the seller the particular purpose for which the
goods are acquired AND it appears that the buyer relied on the seller’s skill
or judgment [Art.1562(1), CC]

IMPLIED WARRANTY AGAINST REDHIBITORY DEFECT IN

THE SALE OF ANIMALS [Art. 1572, CC]

Redhibitory defect – a hidden defect of animals of such nature that expert

knowledge is not sufficient to discover it, even in a case where a
professional inspection has been made

No warranty in case of [Art. 1574, CC]

a. Animals sold at fairs or public auctions
b. Livestock sold as condemned

The following sales are void [Art. 1575, CC]

a. Sale of animals suffering from contagious diseases
b. Sale of animals unfit for the purpose for which they are acquired as stated
in the contract

Veterinarians are liable if they fail to discover or disclose the hidden defect
through ignorance or bad faith. [Art. 1576, CC]

Seller liable if animal dies within 3 days after its purchase due to a disease
that existed at the time of sale. [Art. 1578, CC]

c. Effects of Warranties

a. Natural tendency is to induce buyer to purchase the subject matter

b. Buyer purchases subject matter relying thereon
c. Seller liable for damages in case of breach

d. Effects of Waivers

Only applicable to waiver of warranty against eviction; parties may increase

521
or decrease warranty against eviction but the effect depends on good/bad
faith of the seller:
a. Seller in bad faith and there is warranty against eviction – null and void
b. Buyer without knowledge of a particular risk and made general
renunciation of warranty – not waiver but merely limits liability of seller in
case of eviction (pay value of subject matter at the time of eviction)
c. Buyer with knowledge of risk of eviction assumed its consequences and
made a waiver – vendor not liable
d. Waiver to a specific case of eviction – wipes out warranty as to that
specific risk but not as to eviction caused by other reasons

One who purchases real estate with knowledge of defect or lack of title
cannot claim he acquired title thereto in good faith, as against true owner of
land or of interest therein. [J.M. Tuason v. CA, G.R. No. L-41233 (1979)]
The same rule must be applied to one who has knowledge of facts which
should have put him upon such inquiry and investigation as might be
necessary to acquaint him with the defects in the title of his vendor. A
purchaser cannot close his eyes to facts which should put a reasonable man
upon his guard and then claim that he acted in good faith under the belief
that there was no defect in the title of the vendor.

e. Buyer’s Options in Case of Breach of Warranty

Remedies of buyer for breach of warranty, both implied and express:

• Accept goods + demand diminution/extinction of price
• Accept goods + damages
• Refuse to accept goods + damages Rescind (Refuse to accept or return or
offer to return) + recover price paid [Art. 1599, CC]

EXPRESS WARRANTY

Prescriptive period: Period specified in express warranty OR 4 years, if no

period is specified (following the general rule on rescission of contracts)

Remedies
Rescission not available when buyer:
a. Knew of breach of warranty when he accepted the goods without protest
b. Fails to notify the seller about election to rescind within a reasonable
period of time
c. Fails to return or offer to return the goods to the seller in substantially a
good condition as they were when delivered, unless deterioration was due to
breach of warranty

Measure of damages: Difference between value of goods at the time of

delivery and the value they would have had if they had answered to the
warranty

522
Effects of rescission
a. Buyer no longer liable for price: Entitled to the return of any part of price
paid, concurrently with or immediately after an offer to return the goods
b. If seller refuses to accept offer to return goods: buyer deemed as bailee for
seller and has right of lien to secure payment of part of price paid

IMPLIED WARRANTY AGAINST EVICTION [Arts. 1555, 1556, CC]

Total Eviction Partial Eviction
Enforce liability for eviction Enforce liability (demand
VICED) OR Rescind within 6
Demand from seller: (VICED) months from delivery
a. Value of thing sold at
time of eviction a. If he would not have
b. Income or fruits, if he bought the thing sold
has been ordered to without the part lost;
deliver them to the party b. BUT he must return
who won the eviction the thing without
suit other encumbrances
c. Costs of eviction suit and than those which it
in a proper case, suit had when he
against seller for acquired it
warranty
d. Expenses of the contract,
if buyer has paid them
e. Damages and interests,
and ornamental
expenses, IF sale was
made in bad faith

Rules
a. Buyer need not appeal from decision to hold seller liable for eviction
b. When adverse possession commenced before sale, but prescription
period completed after transfer: seller is not liable
c. If property sold for nonpayment of taxes due and not made known to
the buyer before the sale: seller liable
d. Judgment debtor also responsible for eviction in judicial sales, unless
it is otherwise decreed in the judgment

If there is waiver of warranty:

a. Seller acted in bad faith: Waiver is void, seller liable for eviction
b. Buyer made waiver without knowledge of risks of eviction: Seller
liable only for the value of the thing sold at time of eviction
c. Buyer made waiver with knowledge of risks: Seller not liable; buyer
assumed the consequences

IMPLIED WARRANTY AGAINST ENCUMBRANCES [Art. 1560,

523
CC]

Rescission: Within 1 year from execution of deed of sale OR

Damages: Within 1 year from execution of deed of sale or discovery of the

burden or servitude

IMPLIED WARRANTY AGAINST HIDDEN DEFECTS [Arts. 1567-

1571, CC]

If thing is not lost:

• Withdraw from contract (accion redhibitoria) + damages
• Demand a proportionate reduction of the price (accion quanti minoris) +
damages

If thing is lost:
Due to hidden fault Due to fortuitous event or fault of
buyer
If seller aware of defect, buyer may Demand:
demand: a. Price paid minus value of thing
a. Return of price when it was lost
b. Refund of expenses b. Damages, if seller acted in bad
c. Damages faith
If seller not aware of defect:
Buyer may demand price and
expenses BUT NOT damages

Prescriptive period: 6 mos. from delivery

IMPLIED WARRANTY AGAINST REDHIBITORY DEFECTS OF

ANIMALS

Remedies
• Withdraw from contract + damages
• Demand a proportionate reduction of the price + damages

If sale is rescinded:
a. Buyer must return animal in the condition in which it was sold and
delivered
b. Buyer shall be liable for injury due to his negligence.

Prescriptive period: 40 days from delivery

f. Warranty in Sale of Consumer Goods

If implied warranty accompanies express warranty, both will be of equal

duration. [Sec. 68, RA 7394]
Express Warranty Implied Warranty

524
 a. Demand repair within 30 days; a. Retain the goods and recover
extendible for causes beyond the damages OR
control of the warrantor b. Reject the goods, cancel contract
b. Demand refund of price minus and recover from seller so much of
amount directly attributable to the the purchase price as has been paid
use of the consumer prior to the + damages
discovery of the non-conformity

9. Breach of contract
The following remedies arise from the bilateral nature of the contract of
sale:
a. Specific performance
b. Rescission
c. Damages

General rule: Rescission of a contract will not be permitted for a slight or

casual breach, but only for such substantial and fundamental breach as
would defeat the very object of the parties in making the agreement. [Song
Fo & Co. v. Hawaiian-Philippine Co., G.R. No. 23769 (1925)]

Prescriptive periods
• 10 years if based on written contract
• 6 years if based on oral contract

a. Remedies of the Seller

QUICK SUMMARY OF REMEDIES OF SELLER

REMEDY
Movables Damages, Rescission, Price through Specific
Performance. Special Remedies:
Possessory lien, Stoppage in transitu, Resale, Rescission
Movables on Exact fulfillment, Cancellation of the Sale, Foreclosure
Installment of Chattel Mortgage
Immovables Price through Specific Performance, Rescission (for
anticipatory breach and for non-payment)
Immovables on Contract of Sale: Rescission through Article 1592, CC
Installment Contract to Sell: Rescission through Maceda Law (RA
6552)

1. Sale of Goods

ACTION FOR PRICE [Art. 1595, CC]

a. When the ownership of the goods has passed to the buyer and he
wrongfully neglects or refuses to pay for the price
b. When the price is payable on a certain day and the buyer wrongfully
neglects to pay such price, whether or not ownership has passed

525
 c. When the goods cannot readily be resold for a reasonable price, and
the buyer wrongfully refuses to accept the goods, whether or not
ownership has passed

In an action by the seller under (2), buyer can set up the defense that the
seller, at any time before judgment in such action, could not or did not
intend to deliver the goods.

Unless the contrary appears, payment and delivery are presumed to be

concurrent acts, and the obligation of each party to perform the contract is
dependent upon the simultaneous performance by the other party [de Leon].

If ownership has not yet passed to the buyer, the seller cannot maintain an
action for the price, unless it involves (1) or (3).
Title to goods passes from the moment the goods are placed at the buyer’s
disposal when refusal to accept is without just cause. [de Leon citing Art.
1588, CC]

ACTION FOR DAMAGES [Art. 1596, CC]

When ownership has not yet passed and the buyer, without lawful cause,
neglects or refuses to ACCEPT and PAY for the goods

General rule: Measure of damages is the ESTIMATED LOSS directly and

naturally resulting in the ordinary course of events from the buyer’s breach.

Exceptions:
a. Where there is available market for goods:
Difference between the contract price and the market price. The market price
is fixed at the time the goods ought to have been accepted, or if no time was
fixed, at the time of refusal to accept.

Note: When there are special circumstances showing proximate damages of

a greater amount than the difference between the contract price and market
price, seller is entitled to such higher amount of damages when such
damages may be reasonably attributed to the non-performance of the
obligation. [de Leon; par. 3, Art. 1596 read with par. 2, Art. 2201, CC]

b. Where labor or expense of material amount is necessary on the part of the

seller to perform the contract: Cost of labor performed or expenses made
before receiving notice of buyer’s repudiation, and unrealized profit.

RESCISSION BY GIVING THE BUYER NOTICE OF THE

ELECTION TO RESCIND [Art. 1597, CC]

When the goods have not yet been delivered to the buyer, and the buyer
repudiated the contract of sale, or manifested his inability to perform his
obligations, or has committed a breach of the contract of sale. Under this
rule, rescission would bar an action on the contract because it means

526
cancellation of the contractual obligations between the parties. [Baviera]

The unpaid seller’s right to rescind for nonperformance is not absolute. Not
allowed to rescind when:
a. There are 3rd persons possessing the objects of the contract to
whom no bad faith is imputable [de Leon; Ocejo Perez & Co. v.
International Bank, G.R. No. L-10658 (1918)]
b. Breach is on slight or casual [de Leon; Song Fo & Co. v.
Hawaiian-Phil. Co., supra]

The seller cannot unilaterally and extrajudicially rescind a contract absent

express stipulation to do so, except as provided in Art. 1597. [De Leon]

2. Special Remedies of the Unpaid Seller [Arts. 1525-1535, CC]

a. Possessory lien;
b. Stoppage in transitu;
c. Special right of resale; and
d. Special right to rescind

Note: These special remedies have a hierarchical application. The special

rights to resell and to rescind can be availed of by the unpaid seller only
when either of the two prior rights of possessory lien or stoppage in transit
have been exercised by the unpaid seller. [Villanueva]

Definition of an Unpaid Seller

Art. 1525. Seller is deemed to be unpaid seller:

1. When the whole of the price has not been paid or tendered;
2. When a bill of exchange or other negotiable instrument has been received
as conditional payment, and the condition on which it was received has been
broken by reason of the dishonor of the instrument, the insolvency of the
buyer, or otherwise.

Unpaid Seller also includes:

a. The agent of the seller to whom the bill of lading was endorsed,
b. The consignor or agent who had paid the price or is responsible for the
price
c. Any other person who is in the position of a seller (i.e. buyer who paid the
price and had a right to return the goods). [Art. 1525, CC]

A seller is considered to be an unpaid seller if the whole price has not been
paid or tendered, or when check received as a conditional payment was
dishonored by non-payment or insolvency of the buyer. [Baviera]

POSSESSORY LIEN OVER THE GOODS

Right to retain possession of goods until payment or tender of the whole
price, or unless he agrees to sell on credit [Arts. 1526-1529, 1503, 1535, CC]

527
When lien available
a. The seller is unpaid
b. The unpaid seller has possession over the thing
c. Ownership of the thing has passed to the buyer
d. Any of the following: [Art 1527, CC]
• Goods are sold without stipulation as to credit
• Goods are sold on credit, but term of credit has expired
• Buyer becomes insolvent
The seller may exercise his right of lien notwithstanding that he is in
possession of the goods as agent or bailee for the buyer [par. 2, Art. 1527,
CC]

When unpaid seller loses his lien [Art. 1529, CC]

a. Seller delivers goods to carrier or other bailee for transmission to the
buyer without reserving ownership or right of possession (i.e. under a
straight or non-negotiable bill of lading)
b. Buyer or his agent lawfully obtains possession of goods
c. Seller waives the lien
● But it is not lost with respect to the remainder of the goods when only
partial delivery is made (unless such is symbolic delivery of the whole)
● It is not lost by the mere fact that seller obtained a judgment for the price

When Lien May Be Revived After Delivery

a. If the buyer refuses to receive the goods after the same are delivered to the
carrier or other bailee on his behalf, though the seller has parted with both
ownership and possession. Here, the seller may reclaim the goods and revest
the lien. [par. 1 (2). Art 1531, CC]

b. If the buyer returns the goods in wrongful repudiation of the sale, and the
seller, in accepting the goods from the buyer, says he does not assent to the
rescission.

Possessory lien is lost after the seller loses possession but his lien as an
unpaid seller remains. His preference can only be defeated by the
government’s claim to the specific tax on the goods. [Arts. 2241, 2247, CC]

RIGHT OF STOPPAGE IN TRANSITU

An extension of the lien for the price; entitles unpaid seller to resume
possession of the goods while they are in transit before the goods come in
possession of the vendee. [Arts. 1530- 1532, 1535, 1636(2) CC]

Note: This is an old common law remedy which is an extension of the lien
for the price and entitles the unpaid seller to resume possession of the goods
while they are in transit before the goods come in possession of the vendee if
the latter is or becomes insolvent.

528
Requisites for the exercise of stoppage in transitu
a. The seller is unpaid
b. The buyer is insolvent
c. The goods are in transit
d. The seller either takes actual possession, or gives notice of claim to
the carrier or other person possessing the goods
e. The seller must surrender the negotiable instrument or title, if any,
issued by the carrier/bailee
f. The seller must bear the expenses of the delivery of the goods after
exercise of such right.

When Goods Are In Transit [par. 1, Art 1531, CC]

a. From the time of delivery to the carrier or other bailee by the seller,
for the purpose of transmission to the buyer, until the buyer or his
agent takes such delivery from the carrier.
b. Even when goods have reached their ultimate destination, if buyer
rejects them and carrier retains possession
To terminate transit by delivery to a middleman, delivery must be to keep,
not to transport.
In case of misdelivery, the goods are still considered in transit, hence, the
seller may still exercise his right pursuant to Article 1523.

When Goods are No Longer in Transit [par. 2, Art. 1531, CC]

a. Buyer obtained delivery of the goods before they have reached their
appointed destination
b. Goods have arrived at the appointed destination, and the carrier/bailee
acknowledges to hold the goods on behalf of the buyer
c. Goods have arrived at the appointed destination, but carrier wrongfully
refuses to deliver to buyer/his agent

Note: 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.

How Right is Exercised [Art. 1532, CC]

a. By obtaining actual possession of the goods
b. By giving notice of his claim to the carrier/other bailee who has
possession of the goods
• Carrier must redeliver goods to seller, or according to his instructions
• Carrier not obliged to redeliver until the negotiable document of title, if
any, has been surrendered for cancellation

Effect When Buyer Has Sold the Goods [Art. 1535, CC]
General Rule: Seller’s right to stoppage in transitu is not affected even if
buyer has sold or disposed of the goods unless the seller has given his assent
thereto.

529
Exceptions:
a. When seller has given consent thereto
b. When a negotiable document of title has been issued for the goods to a
purchaser for value in good faith

SPECIAL RIGHT OF RESALE

Available to unpaid seller who has a right of lien or who has stopped the
goods in transitu [Art. 1533, CC].

When available
When the unpaid seller has either a right of lien or has stopped the goods in
transitu and under any of the following conditions:
a. The goods are perishable in nature
b. The right to resell is expressly reserved in case the buyer should default
c. The buyer delays in paying the price for an unreasonable time

The right to resell the goods is not mandatory, but permissive.

How exercised
a. He must do so within a reasonable time and in such manner as to
obtain the best price possible.
b. The place of sale shall be at the place of delivery, except if the seller
cannot sell the thing at a fair price at the place of delivery.
c. Resale is deemed to be a fair sale if it is undertaken in accordance
with established business practices, with no attempt to take advantage
of the original buyer.
d. Resale may be in a private or public sale, but seller cannot buy
directly or indirectly.
e. For resale to be valid, buyer need not be notified of an intention to
resell or the time and place of the resale.

Exception: if the ground for resale is failure to pay for an unreasonable

amount of time The seller must exercise reasonable judgment in making the
sale.

Effects of Resale:
a. Seller is no longer liable to the original buyer upon the contract of sale or
for any profit made by the resale
b. Buyer at resale acquires good title as against the original owner
c. In case resale is at a loss, seller is entitled to recover the difference from
the original buyer
d. Seller may recover damages from original buyer for breach of contract

SPECIAL RIGHT TO RESCIND

Return of the title over the undelivered goods to the seller, and right to
recover damages for breach of contract [Art. 1534, CC]

530
When available
When the unpaid seller has either a right of lien or has stopped the goods in
transitu and under any of the following conditions:
a. Seller expressly reserved his right to rescind in case buyer defaults
b. Buyer has been in default in payment for an unreasonable time

Transfer of title shall not be held to have been rescinded by the unpaid seller
until he manifests by notice to the buyer or some other overt act an intention
to rescind.

Communication of rescission to buyer is not always necessary (it can be an

overt act). But giving/failure to give notice is relevant in determining
reasonableness of time given to the buyer to make good his obligation under
contract. [de Leon]

3. Recto Law: Sale of Movables on Installment – Arts. 1484-1486, CC

WHEN APPLICABLE

Sale of movables in installment

The rule is intended to apply to sales of movables, the price of which is
payable in 2 or more installments, but not to straight-term sales where the
price is payable in full, after making a down payment because the law aims
to protect improvident buyers who may be tempted to buy beyond their
means. [Levy Hermanos v. Gervacio, G.R. No. l-46306 (1939)]

Lease of personal property with option to buy

When lessor has deprived the lessee of the possession or enjoyment of the
thing (i.e. lessor files a complaint for replevin against lessee).
Also applies when seller assigns his credit to someone else.

ALTERNATIVE AND EXCLUSIVE REMEDIES

Note: The exercise of one remedy bars the exercise of the others.

a. Specific Performance
General Rule: When the seller has chosen specific performance, he can no
longer seek for rescission or foreclosure of the chattel mortgage

Exception: If specific performance has become impossible, the seller may

still choose rescission [Art. 1191, CC]

b. Cancellation of sale if vendee fails to pay 2 or more installments

When the seller cancels the sale by repossessing the property sold, he is
barred from exacting payment for its price. It can only be carried out when
he who demands rescission can return whatever he may be obliged to

531
restore. [Art. 1385, CC]

c. Foreclosure of Chattel Mortgage if vendee fails to pay 2 or more

installments

If seller chooses this remedy, he shall have no further action to recover any
unpaid balance, and any stipulation to the contrary shall be void. The
purpose of the law is to remedy the abuses committed in foreclosure of
chattel mortgages. It prevents mortgagees from seizing the mortgaged
property, buying it at foreclosure sale for a low price and then bringing the
suit against the mortgagor for a deficiency judgment. The almost invariable
result of this procedure was that the mortgagor found himself minus the
property and still owing practically the full amount of his original
indebtedness. [Bachrach Motor Co., Inc. v. Millan, G.R. No. L-42256
(1935)]

4. Sale of Immovables

RESCISSION FOR ANTICIPATORY BREACH [ART. 1591, CC]

Note: This is applicable to both cash sales and sales in installments.

Requisites
a. There is delivery of immovable property
b. Vendee has not yet paid the price; and
c. Vendor has reasonable grounds to fear the loss of property and the loss of
price
If there is no such reasonable ground, Art. 1191 applies (specific
performance or rescission with damages).

Court has no discretion to compel the seller to wait for the expiration of the
period to pay, or to grant the buyer more time to pay.

SPECIFIC PERFORMANCE + DAMAGES OR RESCISSION +

DAMAGES [Art. 1191, CC]
Seller may choose between specific performance and rescission, with
damages in either case. Court has discretion, for a just cause, to give the
buyer more time to pay even if the seller chooses rescission.

If seller chose specific performance, and such becomes impossible, he may

still avail of rescission. If absolute sale, seller must make a demand for
rescission.
a. Judicially, OR
b. By a notarial act Demand necessary even if automatic rescission is
stipulated
a. Effect of lack of demand: Buyer can still pay
b. Effect of demand: Court may not grant buyer a new term

532
SECS. 23 AND 24, PD 957
Non-forfeiture of payments
No installment payment made by the buyer shall be forfeited in favor of the
owner or developer of the condominium or subdivision project, after due
notice, when the buyer desists from paying due to the failure of the
developer or owner to develop the project according to the approved plans or
within the time limit stated.

Buyer’s Remedy: At his option, he may reimburse the total amount paid
including amortization interest with interest thereon at the legal rate.
If the buyer fails to pay the installments for reasons other than the failure of
the owner or developer to develop the project, his rights shall be governed
by RA 6552.

5. Maceda Law (RA 6552): Sale of Immovables on Installment

RA 6552 does NOT apply to:

a. Industrial lots
b. Commercial buildings
c. Sale to tenants under Agricultural Reform Code [RA 3844]
d. Sale of lands payable in straight terms [Sec. 3, RA 6552]

Rights of the Buyer:

The law imposes additional requirements on the part of the seller for a valid
rescission.
a. If buyer has paid at least 2 years of installments then defaults:
• Buyer has right to a grace period of 1 month per year of installment
payment made BUT the buyer may only avail of the grace period once
every 5 years
• Buyer has right to the refund of Cash Surrender Value (CSV): 50% of
total amount paid + 5% for every year after the first 5 years of
installments BUT total CSV should not be greater than 90% of total
amount paid
• After the lapse of the grace period, buyer is given a notice of
cancellation or demand for rescission by notarial act, effective 30 days
from the buyer’s receipt thereof AND only upon full payment of CSV

b. If buyer has paid less than 2 years of installments:

• Grace period of at least 60 days
• After the lapse of the grace period, buyer is given a notice of
cancellation or demand for rescission by notarial act, effective 30 days
upon receipt thereof

c. During the grace period, the buyer shall also have the right:
• To sell or assign his rights, evidenced in a notarial instrument
• To update his account
• To pay in advance any installment, or the full unpaid balance of the

533
 price, without any interest, and to have such full payment of the
purchase price annotated in the certificate of title covering the
property.

Down payments, deposits, or options on the contract shall be included in the

total number of installments made.

The seller may go to court for judicial rescission in lieu of a notarial act of
rescission.

Cancellation pertains to extrajudicial cancellation. Absence of notice does

not bar the filing of an action to cancel the contract.

A decision in an ejectment case can operate as notice of cancellation as

required by RA 6552.
However, mere filing of an unlawful detainer suit by the seller does not
operate as such notice. [de Leon]

b. Remedies of the Buyer

General rule: Courts will refuse to decree specific performance with respect
to chattels because damages are a sufficient remedy.
Exception: Buyer is entitled to the specific thing which to him has special
value and which he cannot readily obtain in the market OR where damages
would not furnish a complete and adequate remedy. [Baviera]

QUICK SUMMARY OF REMEDIES OF BUYER

REMEDY
Movables Damages, Rescission, Price through Specific
Performance.
Breach of Return or Offer to Return (with recovery of price or may
Warranty become the seller’s bailee) Acceptance, for recoupment or
with damages Refuse to Accept with Damages
Immovables Rescission, Suspension of Payment, PD 957
(Reimbursement of the total amount paid/ compel the
developer to complete facilities)
Immovables Contract of Sale: Article 1592, CC
on Installment Contract to Sell: Maceda Law (RA 6552)

1. Sale of Movables

REMEDY FOR BREACH OF OBLIGATION TO PRESERVE

If thing is lost:
Without fault of seller Through fault of seller /
Through Fortuitous
Event (if seller is liable)
NO BREACH Obligation is Damages

534
extinguished.

A thing is lost when it:

a. Perishes;
b. Goes out of commerce of man; or
c. Disappears in such a way that its existence is unknown or it cannot be
recovered

If thing deteriorates:
Without fault of seller Through fault of seller
NO BREACH. Impairment shall be Rescission + damages OR Specific
borne by buyer performance + Damages

REMEDY FOR BREACH OF OBLIGATION TO DELIVER

Delivery of wrong quantity [Art. 1522, CC]

Goods are LESS THAN Goods are MORE THAN
what was contracted what was contracted
Reject the goods OR Accept and Reject the excess OR Reject the
pay: whole, if indivisible OR Accept the
a. At contract rate if buyer whole and pay at contract rate
accepts knowing that seller
won’t perform in full
b. At fair value if goods were
used before knowing that
seller won’t be able to
perform in full

Buyer becomes the owner of the

whole mass and the seller is bound
to make good the deficiency [Art.
1464]

2. Sale of Immovables [Art 1539 – 1543, CC]

IF AT THE RATE OF A CERTAIN PRICE PER UNIT OF MEASURE

OR NUMBER
Less (in area or quality) More (in area or quality)
than what was agreed upon: than what was agreed upon:
Proportional reduction of price OR Reject the excess OR Accept the
Rescission, if: whole and pay at contract rate
a. Lack in area is at least 1/10 of
what is stated, or inferior
value of thing sold exceeds
1/10 of price
b. Buyer would not have bought
the property has he been

535
 aware of the inferior quality or
smaller area

Note: This rule also applies to judicial sales [Art. 1541, CC].

IF FOR A LUMP SUM

Everything is within boundaries, Not everything is within the
even if less or more than stated boundaries
area
No remedy Proportional reduction in price OR
Rescission
Where both the area and the
boundaries of the immovable are
declared, the area covered within
the boundaries of the immovable
prevails over the stated area.
[Rudolf Lietz, Inc. v. CA, G.R. No.
122463 (2005)]

Prescriptive period: 6 months counted from date of delivery.

10. Performance of contract

Note: The obligations of the vendor and vendee are also discussed in detail
in sections C and D of this Sales Reviewer.

a. Delivery of the Thing Sold

1. In General
Payment and delivery of the thing sold are concurrent acts, in consonance
with the rule in reciprocal obligations. [Baviera]
The rule is that 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.

The Agreement of the parties determines whether it is for the buyer to take
possession of the goods or for the seller to send them to the buyer.

Place, Time and Manner of Delivery

General Rule: The vendor is not bound to deliver the thing sold if the
vendee has not paid the price
Exception: When the thing is sold on credit

RULE ON THE PLACE

Whether it is for the buyer to take possession of the goods or for the seller to
send them to the buyer depends on the AGREEMENT between the two
parties.
• In the absence of stipulation: delivery should be at the seller’s place of
business if he has one

536
• In case of sale of specific goods which are in another place: the buyer
should take delivery from such place.

Note: Demand or tender of delivery shall be made at a reasonable hour.

RULE ON THE TIME

Where by agreement, the seller is bound to send the goods to the buyer, he is
bound to send them within the time agreed upon.
• If no time fixed: within a reasonable time.
• The expenses of placing the goods in a deliverable state shall be borne by
the seller (unless otherwise stipulated)

RULE ON THE MANNER

Where the goods at the time of the sale are in the possession of a third
person: NO DELIVERY unless such third person acknowledges to the
buyer that he holds the goods on the latter’s behalf.

What Constitutes a Reasonable Time?

When the time of delivery is not fixed in the contract, time is not of the
essence. Delivery must be made within a reasonable time. [Smith Bell v.
Matti (1922)]

General Rule: The reasonable time for delivery is determined by the

circumstances attending the particular transaction.

When Time is of the Essence

Time is of the essence of the contract whenever the intention of the parties is
clear that performance of its terms shall be accomplished exactly at the
stipulated day. It could also be implied from the nature of the contract itself,
or of the subject matter, or of the circumstances under which the contract is
made. [Baviera]

Whenever the intention of the parties is clear that performance of its terms
shall be:
• Accomplished exactly at the stipulated day
• Implied from the nature of the contract itself, the subject matter or the
circumstances under which the contract is made

When the Vendor is not Bound to Delive

Article 1524, CC: 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

Article 1536, CC: 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.

537
 Article 1198, CC: The debtor shall lose every right to make use of the
period:

(1) When after the obligation has been contracted, he becomes insol- vent,
unless he gives a guaranty or security for the debt;

(2) When he does not furnish to the creditor the guaranties or securities
which he has promised;

(3) When by his own acts he has impaired said guaranties or securities
after their establishment, and when through a fortuitous event they
disappear, unless he immediately gives new ones equally satisfactory;

(4) When the debtor violates any undertaking, in consideration of which

the creditor agreed to the period;

(5) When the debtor attempts to abscond.

a. Sales of Goods/ Movables

1. Delivery of Wrong Quantity

Article 1522, CC: 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 con- tract and reject the rest. If the buyer accepts the whole
of the goods so delivered, he must pay for them at the contract rate. xxxx
In the preceding two paragraphs, if the subject matter is indivisible, the
buyer may reject the whole of the goods.

Quantity is always of the essence of a sales contract and a seller is bound to

tender the amount of goods contracted for, in order to hold the buyer liable
for performance. [Baviera]

General Rule: The buyer is not bound to accept delivery of a quantity of

goods more or less than that agreed upon or to accept goods which are of a
description different from that agreed upon.

Exception: There is usage of trade, special stipulation, or course of dealing

to the contrary.

REMEDIES PROVIDED FOR BY LAW:

1. Where the seller delivers a quantity less than that agreed upon, the
buyer may reject them. If the buyer accepts or retains that goods
delivered, knowing the inability of the seller to deliver the rest, the
buyer is bound to pay for them at the contract rate.
If the buyer has used or disposed of the goods before knowing the
inability of the seller to deliver the rest, the buyer shall pay not more
than the fair value of the goods. (Note: “fair value” means the price of
the goods in the open market.)

538
 2. If the quantity delivered is more than that agreed upon, the buyer may
reject the excess, unless the subject matter is indivisible, in which
case, the buyer may reject the whole.
3. Where the seller delivers the goods 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,
unless the subject matter is in- divisible, in which case, the buyer may
reject the whole.

2. Delivery by Installments

Article 1538, CC: 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.

General Rule: The buyer is not bound to accept the delivery of goods by
installments.

Exception: Unless it is otherwise stipulated.

Where the contract calls for the delivery of goods at stated intervals which
are to be separately paid for, whether prompt payment or delivery is of the
essence of the contract such that a delay or breach of the obligation would
entitle the aggrieved party to treat the entire contract as broken or to regard
each breach as severable would depend on the terms of the contract and the
circumstances of the case. [Baviera]

Severability: is whether the breach is so material as to justify the aggrieved

party in refusing to proceed further with the entire contract or so immaterial
that the breach is severable, giving rise merely to a claim for damages.

Sale of Immovables

1. Where Price is at Certain Rate Per Unit of Measure

WHEN VENDEE HAS THE OPTION TO DEMAND A

PROPORTIONATE REDUCTION OF THE PRICE (OR DEMAND
RESCISSION OF CONTRACT)

General Rule: If price is fixed at a certain rate per unit of measure and the
area is delivered is less than that stated in the contract, or even if the area is
correct but part of the land is not of the quality stated in the contract.

Exception: Where the entire land is not of the quality stated in the contract,
as in such a case, the consent must have been obtained by mistake or fraud
(contract may then be voidable). These rules presuppose that the actual area
was not known to both parties until a survey was made after the execution of
the contract.

539
Note: These rules do not apply where the entire land is not of the quality
stated in the contract because in such case, the consent must have been
obtained by mistake or fraud. [Baviera]

2. Sales for a Lump Sum

Article 1542, CC: 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.

If the sale of property is for a lump sum, there shall be no increase or

decrease in the price, whether the actual area delivered turned out to be
greater or less than that stated in the contract. [Baviera]

b. Inspection and Acceptance

Note: This is discussed in Section D of this sales reviewer, on the

Obligations of the Vendee.

1. Payment of Price

LIABILITY FOR INTEREST

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 (Art. 1582, CC: If the time
and place should not have been stipulated, payment must be made at the
time and place of delivery of the thing sold).

General Rule: The vendee shall owe interest on the price from the time the
thing is delivered up to the time of payment if there is a stipulation
requiring interests
• If there is no stipulation: from the time of judicial or extrajudicial
demand for payment.
• This applies if the thing delivered produces fruits or income, or if the buyer
incurs in default

SUSPENSION OF PAYMENT
Art. 1590, CC A vendee may suspend payment when:
• The vendee is disturbed in the possession or ownership of the thing
delivered; or should he have reasonable grounds to fear such disturbance by
vindicatory action, or a foreclosure of mortgage.
• Unless there is a stipulation to the contrary notwithstanding any such
contingency; or unless the vendor gives security for the return of the price in
a proper case. (Note: Disturbance or threat of disturbance must come
through a vindicatory action or a foreclosure of mortgage, and not through a
mere threat or claim of a third person.)
● Neither can the buyer suspend payment, on the ground that the vendor is

540
incapacitated.
● If the third person claims a servitude on the thing sold, the remedy of the
buyer is to demand rescission of the contract or payment of the proper
indemnity.

A vendee may not suspend payment when:

• For a mere act of trespass by a third person, the buyer could defend himself
and has no right to suspend payment

Note: There is a mere trespass when the third person claims no right to the
thing whatsoever.

Therefore, in order that the buyer may have a right to suspend payment, it is
absolutely necessary that the cause of disturbance or danger be based on a
fact arising before the sale or if it arose after the sale, the cause is imputable
to the vendor or his successor-ininterest. [Baviera]

EFFECT OF NON-PAYMENT
General Rule: 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 fulfillment and rescission of the
obligation, with payment of damages in either case.
● The court shall order the rescission claimed, unless there is just cause
authorizing the granting of a new period.
However, in absolute sales of real property, even if there is a stipulation
providing for ipso jure rescission, in case of default in payment, the law
required the seller to demand the resolution of the contract from the buyer
judicially or by a notarial act, before such stipulation could be given effect.
Otherwise, the buyer could still pay the price, even after the expiration of the
period to pay. [Baviera]

RA 6552 (MACEDA LAW)

Note: This was discussed in Section I, Subsection 1.a.5 of this Sales
Reviewer, on Maceda Law.

August 26, 1972: The Realty Installment Buyer Protection Act was
approved:
• It declared a public policy to protect buyers of real-estate on installments.
• This included residential condominium apartments, excluding industrial
lots, commercial buildings and lands sold under RA 3844, against onerous
and oppressive conditions.

11. Extinguishment
a. Causes [Arts. 1600, 1231, CC]

Generally, extinguished by the same causes as all other obligations

541
[Arts.1600, 1231, CC]
a. Payment/performance
b. Prescription
c. Loss of thing due
d. Annulment
e. Novation
f. Condonation/remission
g. Confusion/merger
h. Compensation
i. Rescission
j. Resolutory condition fulfilled
k. Redemption (Conventional or Legal)

b. Conventional redemption (Pacto de Retro Sale)

1. Definition

Conventional Redemption exists when the vendor reserves the right to

repurchase the thing sold, with the obligation to:
1. Return price of the sale
2. Expenses of the contract
3. Any other legitimate payments by reason of the sale
4. Necessary and useful expenses [Art. 1601, CC]

Note: Redemption feature does not prevent the full consummation of the
contract of sale.

Available when the seller reserves the right to repurchase the thing sold in
the same instrument of sale as one of the stipulations of the contract
[Villarica v. CA, G.R. No. L-19196 (1968)]

2. Period

General Rule: Follow period stipulated in contract, but should not exceed
10 years.

Exceptions:
1. If no period stipulated but the parties intended a period, then it shall
be 10 years from the date of the contract.
2. If no period stipulated, then it shall be four years from the execution
of the contract
3. But 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

3. By whom exercised

1. Vendor, after returning to vendee price of sale plus expenses of the

542
 contract, other legitimate payments made by reason of sale, and
necessary and useful expenses made on the thing sold [Art. 1616, CC]
2. His heirs, assigns or agents
3. Creditor, after he has exhausted the property of the vendor [Art. 1610,
CC]
4. Co-owners of an immovable, if they sold their interests to the same
person, may only redeem their respective shares [Art. 1612, CC]
• Vendee cannot be compelled to agree to a partial redemption [Art.
1613, CC]
• If the co-owners sold their interest to the same person who previously
bought the share of a co-owner subject to a right of redemption, then
the latter may be compelled to redeem the whole property

4. From whom to redeem

1. Vendee a retro
2. His heirs, assigns or agents
3. Subsequent purchaser of property, even if the right to redeem was not
mentioned in the subsequent contract; except if registered land, where
the right to redeem must be annotated on the title
4. If several heirs, then the right of redemption can be exercised against
each heir for his share of the property [Art. 1615, CC]

5. How exercised

1. By returning the ff. to the buyer:

• Price of the sale; except if the parties agreed on a redemption price
• Expenses of the contract and other legitimate payments made by reason of
the sale;
• Necessary and useful expenses made on the thing sold
2. Complying with any other stipulation agreed upon, if any.

The general rule in redemption is that it is not sufficient that a person

offering to redeem manifests his desire to do so. The statement of intention
must be accompanied by an actual and simultaneous tender of payment for
the full amount of the repurchase price. [BPI Family Savings Bank, Inc. v.
Sps. Veloso, G.R. No. 141974 (2004)]

6. Effect of Redemption

1. The sale is extinguished

2. The seller shall receive the thing free from all charges or mortgages
constituted by the buyer BUT he shall respect leases executed by the
buyer in good faith and in accordance with local custom.
3. As to fruits:
• If parties agreed on a distribution, the fruits shall be distributed
according to the agreement.

543
 • If parties did not agree on a distribution,
o If there are growing fruits at the time of sale and at the time of
redemption:
a. Buyer receives reimbursement if the buyer paid indemnity at the time
of the sale
b. Buyer receives no reimbursement or prorating if the buyer did not pay
indemnity at the time of sale
o If there were no growing fruits at the time of sale, but some exist at
the time of redemption: fruits prorated (buyer entitled to part
corresponding to time he possessed the land in the last year, counted
from the anniversary of the date of sale)

7. Effect of non-redemption

Ownership is consolidated in the buyer BUT the consolidation shall not be

recorded in the Registry of property without a judicial order, after the vendor
has been duly heard.

8. Right to redeem vs. Option to purchase

Right to Redeem Option to Purchase
Not a separate contract but part of a Generally a principal contract and
main contract of sale, and cannot may be created independent of
exist unless reserved at the time of another contractn to Purchase
the perfection of the main contract
of sale
Does not need its separate Must have a consideration separate
consideration to be valid and and distinct from the purchase price
effective to be valid and effective [Arts. 1324
and 1479, CC]
The maximum period for the The period of the option contract
exercise of the right to repurchase may be beyond the 10- year period
cannot exceed 10 years
Requires in addition a tender of May be exercised by notice of its
payment of the amount required by exercise to the offeror
law, including consignment thereof
if tender of payment cannot be
made effectively on the buyer

c. Equitable Mortgage

An equitable mortgage is defined as one which, although lacking in some

formality, or form or words, or other requisites demanded by a statute,
nevertheless reveals the intention of the parties to charge real property as
security for a debt, and contains nothing impossible or contrary to law.
[Molina v. CA, G.R. No. 125755 (2003)]

544
A pactum commissorium is a stipulation enabling the mortgagee to acquire
ownership of the mortgaged properties without need of foreclosure
proceedings which is a nullity being contrary to the provisions of Article
2088 of the Civil Code. The inclusion of such stipulation in the deed shows
the intention to mortgage rather than to sell. [Legaspi v. Sps. Ong, G.R. No.
141311 (2005)]

A pactum commissorium is contrary to the nature of a true pacto de retro

sale since ownership of the property sold is immediately transferred to the
vendee a retro upon execution of the sale, subject only to the repurchase of a
vendor a retro within the stipulated period.

1. Presumption that a contract is an equitable mortgage

Art. 1602. The contract shall be presumed to be an equitable mortgage, in

any of the following cases:
1. Price unusually inadequate;
2. Possession retained by the seller as lessee or otherwise;
3. Period of redemption extended (or granted anew) upon or after the
expiration of the right to repurchase;
4. Part of the purchase price retained by the seller;
5. Payment of taxes on the thing sold borne by the seller;
6. Any other case where it may be fairly inferred that the Real intention of
the parties is for the transaction to secure a debt or other obligation.

Note: A contract shall be construed as an equitable mortgage when any of

the circumstances in Art. 1602 is present. When in doubt whether equitable
mortgage or sale, settle in favour or equitable mortgage because it involves a
lesser transmission of rights.

By itself, no equitable mortgage under the ff. instances:

1. Mere tolerated possession
2. Mere delay in transferring title to the buyer

The provisions on equitable mortgage of Art.1602, CC also applies to a

contract purporting to be a deed of absolute sale.

Remedy: Reformation of the instrument [must be brought within 10 years]

1. If the agreement is construed to be an equitable mortgage, any money or
other benefit received as “rents,” shall be considered as “interest” (and
subject to usury laws)
2. The court may decree that the vendordebtor to pay the outstanding loan to
the vendee-creditor
3. Where the agreement is upheld as a pacto de retro sale, the vendor may
still exercise the right within 30 days from the time the judgment becomes
final.

545
The right of repurchase is not a right granted to the seller by the buyer in a
subsequent instrument, but one reserved by the seller in the same instrument
as the sale contract. Any right granted after the execution of the sale
instrument is not a right to repurchase, but some other right like an option to
buy. [Roberts v. Papio, G.R. No. 166714 (2007)]

2. Requisites for presumption of an equitable mortgage

a. That the parties entered into a contract denominated as a contract of sale,

and
b. That their intention was to secure an existing debt by way of a mortgage.
[Molina v. CA, supra]

In case of doubt, a contract purporting to be a sale with right to repurchase

shall be construed as an equitable mortgage [Art. 1603, CC]

3. Rationale behind provision on equitable mortgage

a. Circumvention of usury law

b. Circumvention of prohibition against pactum commissorium – creditor
cannot appropriate the things given by way of pledge or mortgage since
remedy is foreclosure.

4. Remedies of apparent vendor

a. If the instrument does not reflect the true agreement: remedy is

reformation
b. If decreed to be an equitable mortgage: any money, fruits or other benefit
to be received by the buyer as rent or otherwise considered as interest.
c. If decreed as a true sale with right to purchase: seller may redeem within
30 days from finality of judgment, even if the period for redemption has
expired.

5. Period of redemption

No stipulation: 4 years from the date of contract [Art. 1606, CC]

When there is agreement: Period not to exceed 10 years [Art. 1606, CC]
General Rule: Period starts to run from the date of the execution of the
contract

Exception: When the efficacy of the sale is subject to a suspensive

condition, period should be counted not from the date appearing on the
instrument, but from the date when the condition is fulfilled, marking the
consummation of the sale [Tolentino citing Manresa].

Additional 30 days for Repurchase

The last paragraph of Art. 1606 giving the vendor the right to repurchase

546
within 30 days from the time of the rendition of final judgment applies only
where the nature and the character of the transaction, whether as a pacto de
retro or an equitable mortgage, was put in issue before the court [Gonzales v.
de Leon, G.R. No. L-14532 (1965)]

When an unrecorded pacto de retro sale was construed as an equitable

mortgage, the plaintiff had the right to enforce his lien in a separate
proceeding notwithstanding the fact that he had failed to obtain judgment
declaring him the sole and absolute owner of the land. [Heirs of Arches v.
Diaz, G.R. No. L-27136 (1973)]

Where the petition of the buyer in a pacto de retro sale is for a judicial orders
pursuant Art. 1607, so that there may be consolidation of ownership since
there was failure to redeem during the redemption period, the right of action
to foreclose or to collect the indebtedness arises from the court judgment
declaring the contract an equitable mortgage.

6. Exercise of the right to redeem [Art. 1616, CC]

The seller can avail himself of the right of repurchase by returning to the
buyer:
1. the price of the sale;
2. the expenses of the contract and any other legitimate payments made by
reason of the sale;
3. the necessary and useful expenses made on the thing sold [Art.1616, CC].

7. How redemption is exercised

1. The vendor de retro must complete the repurchase before the

expiration of the redemption period [Panganiban v. Cuevas,
G.R. No. 2001 (1907)]
2. A sincere or genuine tender of payment is enough. The deposit
of the amount of the repurchase money with the Clerk of Court
was simply an additional security [Legaspi v. CA, G.R. No. L-
45519 (1986)]
3. When tender of payment cannot be validly made because the
buyer cannot be located, it becomes imperative for the seller a
retro to file a suit for consignation with the courts of the
redemption price [Catangcatang v. Legayada, G.R. L-26295
(1978)].
4. If the offer or tender of payment for repurchase is refused, it is
not necessary for the vendor a retro to consign in court or make
judicial deposit of the repurchase price [Rosales v. Reyes, G.R.
No. 8162 (1913)].

The seller a retro is given no option to require the buyer a retro to remove
the useful improvements on the land subject of the sale a retro, unlike that

547
granted the owner of a land under Arts. 546 and 547. Under Art. 1616, the
seller a retro must pay for useful improvements introduced by the buyer a
retro; otherwise, the latter may retain possession of the land until
reimbursement is made. [Gargollo v. Duero, G.R. No. L-15973 (1961)]

d. Legal Redemption [Art. 1619, CC]

Rationale for the law: Public policy (to minimize co-ownership) and benefit
of the redemptioner

1. Definition

1. Right to be 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 [Art. 1619, CC]
2. Applies to transfers of ownership by onerous title where subrogation is
possible. Hence, it cannot apply to barter or to transfer by gratuitous title or
hereditary succession.
3. Applies to sales with pacto de retro [Baviera citing Manresa]

2. Manner

1. A formal offer to redeem or

2. Filing of an action in court together with the consignation of the
redemption price within the reglementary period [Lee Chuy Realty v. CA,
G.R. No. 104114 (1995)]

3. Period to redeem
To whom granted Period
Co-owner 30 days from notice
[Art 1620, CC] ● In writing
● By the seller
Adjoining owner of ● Of the actual execution and
Rural Land delivery of the deed of sale
[Art 1621, CC]
Actual knowledge of the sale is
Adjoining owner of immaterial, absent any showing that
urban land the co-owner has been shown a
[Art. 1622, CC] copy of the deed of sale through a
written communication. [Doromal
v. CA, G.R. No. L-36083 (1975)]

The law did not provide for a

particular mode of written notice,
thus any compliance with “written

548
 notice” should suffice, including the
giving of a copy of the deed of sale.
[Conejero v. CA, G.R. No. L-21812
(1966)]
Debtor in case a credit or 30 days from the date the assignee
incorporeal right in litigation is sold demands payment from debtor
[Art. 1634, CC]
Taxpayer in case of tax sale [Sec. 1 year from date of forfeiture
215, NIRC]
Judgment debtor, successor– 1 year from the date of registration
ininterest, or creditor of the certificate of sale
with subsequent lien, in case of
execution sale [Sec. 27, Rule 39,
ROC]
Debtor-mortgagor, successors- 1 year from the date of the sale
ininterest, judicial/judgment
creditor, any person having a lien on
the property, in case of extrajudicial
foreclosure of
mortgage [Sec. 6, Act No. 3135]
Debtor-mortgagor in case of judicial 90 days from finality of judgment
foreclosure of real estate mortgage
IF the mortgagee is a bank or a
banking institution. [General
Banking Law of 2000]
Agricultural lessee w/o knowledge 2 years from the registration of the
of sale of landholding [Sec. 12, sale
Agrarian Land Reform Code]

4. Instances of legal redemption

a. Redemption by co-owners [Art. 1621, CC]

A co-owner of a thing may exercise the right of redemption in case the

shares of all the coowners or any of them are sold to a third person Third
person refers to all persons who are not heirs of the vendor, by will or
intestate succession.

The right is available not only to original coowners, but to those who had
later acquired the share of the co-owner.

But the right of redemption may be exercised by a co-owner only when part
of the community property is sold to a stranger. When the portion is sold to
another co-owner, the right does not arise because a new participant is not
added to the co-ownership [Fernandez v. Sps. Tarun, G.R. No. 143868
(2002)].

549
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, they may also do
so in proportion to the share they may respectively have in the thing owned
in common.

The ff. requisites must concur:

a. Co-ownership of a thing
b. Alienation of shares of co-owners or all of the other co-owners
c. Sale must be to a third person or stranger
d. Sale must be before partition
e. Right must be exercised within the period specified in Article 1623
f. Buyer must be reimbursed the price of the sale

Rationale: Public Policy, since co-ownership is a hindrance to the

development and administration of the property. [Baviera]

b. Redemption by adjoining landowners of rural land [Art. 1621, CC]

The ff. requisites must concur:

a. All lands must be rural lands
b. Lands must be adjacent to each other
c. A piece of rural land is alienated
d. Area does not exceed one hectare
e. Buyer must already own other rural lands

When not applicable

a. The grantee does not own any rural land
b. Adjacent lands are separated by brooks, drains, roads and other apparent
servitudes for the benefit of other estates

Order of preference if two or more wishes to exercise the right:

• Owner with smaller land area
• If same land area, then the one who first requested the redemption

c. Redemption by adjoining land-owners of urban land (applies only to

small portions of urban land) [Art. 1621, CC]

Right of Preemption Right of Redemption

Owner of any adjoining land has a If the resale has been perfected, the
right of pre-emption at a reasonable owner of the adjoining land shall
price when: have a right of redemption, also at a
a. Urban land is so small and so reasonable price
situated that a major portion of it
cannot be used for any practical Priority if 2 or more adjoining
purpose w/in a reasonable time; owners want to redeem: owner
whose intended use of the land

550
 b. Was bought merely for appears to be best justified
speculation;
c. Was resold
Arises before sale Arises after sale
No rescission because no sale exists There can be rescission of the
yet original sale
The action is directed against Action is directed against buyer
prospective seller

d. Redemption of Credit

Available when it is sold while in litigation (From the time the complaint is
answered)

Not available when the assignment is in favor of:

a. Co-heir/co-owner of right assigned
b. Creditor in payment of his credit
c. Possessor of a tenement or piece of land which is subject to the right
assigned

How exercised: reimburse the assignee for the:

a. Price paid
b. Judicial expenses incurred
c. Interest on the price from date of payment

e. Under the Public Land Act

Coverage
a. Every conveyance of land acquired under
a free patent or homestead
b. The ownership of the land must have been transferred to another. If the
transaction is a mere promise to sell, there is no right yet to redeem
c. This refers to conveyances made after the prohibited 5 years from the
issuance of the patent or grant
Period:
a. Within 5 years from the date of conveyance
b. If pacto de retro sale, the period to redeem cannot be less than 5 years

Who may redeem

General Rule: Applicant, widow, or heirs

Exception: land is sold to another member of the family of the applicant, or

his direct descendant or heir

From whom: Subsequent purchasers

The right to redeem can be exercised against any subsequent purchaser even

551
if the land is registered under the Torrens System because the fact that it was
acquired through a homestead or free patent can be seen from the description
of the property in the certificate of title.

f. Redemption in Foreclosure and Execution Sales

Who may redeem
In extra judicial foreclosure In execution sales
● Debtor • Judgment debtor
● Successor in interest • Successor in interest
● Judicial or judgment creditor of • Creditor having a lien on the
said debtor property sold by attachment,
● Junior encumbrancer judgment or mortgage on the
property subsequent to the
judgment
Period to redeem
Extra-judicial Execution sale: If land is mortgaged in
foreclosure: favor of a bank:
within 12 months
within 1 year from the after the sale within 1 year after the
date of the sale sale (not available in
case of a corporate
mortgagor)
Amount of redemption
a. Amount of the purchase
b. Interest at 1% per month from the time of the sale up to the time of
redemption
c. Any assessment or taxes which the purchaser may have paid

Note: Every conveyance of land acquired under a free patent or

homestead, when proper, shall be subject to repurchase by the applicant,
his widow or legal heirs within 5 years from the date of conveyance.

Sale within the 5-year prohibition is void even if the sale is in favor of the
homesteader’s own son or daughter. This right of repurchase by the
homesteader cannot be waived.

g. Under the Agrarian Land Reform Code

Lessee’s right of pre-emption

The agricultural lessee shall have the preferential right to buy under the
same reasonable terms and conditions, in case the lessor decides to hold the
landholding

Conditions
a. The landholding must be pre-empted by the DAR
b. When two or more lessees, each shall have preferential right only to the
extent of the area cultivated by him

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Period: 180 days from notice in writing

Lessee’s right of redemption

In case landholding is sold to 3rd person without the knowledge of the
lessee, the latter shall have the right to redeem the same at a reasonable price
and consideration. [Sec. 12, RA 3844]

Period: within 180 days from notice in writing

B. TRUSTS
Definition
A trust is the legal relationship between one person having an equitable
ownership of property and another person owning the legal title to such
property, the equitable ownership of the former entitling him to the
performance of certain duties and the exercise of certain powers by the
latter. [Estate of Cabacungan v. Laigo, G.R. No. 175073 (2011)]

Characteristics of Trust:
1. It is a relationship
2. The relationship is of fiduciary character
3. The relationship is with respect to property, not one involving merely
personal duties
4. It involves the existence of equitable duties imposed upon the holder of
the title to the property to deal with it for the benefit of another
5. It arises as a result of a manifestation of intention to create the relationship

TRUST AS DISTINGUISHED FROM OTHER CONCEPTS

Trust Stipulation pour autrui
Refers to a specific property Involves any stipulation in favor of
a third person

Trust Condition
Performance of trust is enforceable Performance or accomplishment is
not enforceable

Trust Guardianship or Executorship

Trustees has legal title to the Guardians or Executors do not have
property legal title but mere actual possession
and limited powers over the property

Trust Contract
Always involves ownership, A legal obligation based on an

553
embracing a set of rights and duties undertaking supported by a
fiduciary in character, which may consideration, which obligation may
be created by a declaration without or may not be fiduciary in character.
consideration

Trust Debt
The beneficiary of a trust has a A creditor has merely a personal
beneficial interest in the trust claim against the debtor.
property.
There is a fiduciary relationship There is no fiduciary relationship
between a trustee and a beneficiary. between a debtor and a creditor.

Trust Sale
An express trust is not perfected by Seller obliges himself to transfer
mere consent, but requires the actual ownership and deliver possession
delivery of the naked or legal title to to the buyer
the trustee for the relationship of
legality to arise.
Trustee in an express trust only takes Buyer takes full ownership of the
naked or legal title and for the subject matter for his sole benefit.
benefit of another person, the
beneficiary.
Constituted merely as a preparation, Entered into for its own end, the
arrangement, medium, by which the acquiring of title of the subject
trustee is expected to pursue other matter by the buyer.
juridical acts for the benefit of the
beneficiary.

Trust Lease
Naked title is transferred to the Lessor retains naked title.
trustee; full beneficial ownership is
for the account of the beneficiary.
Essence of the contract is for the Essence of the contract is the
trustee to manage the rust property enjoyment of the possession and use
as the legal title holder for benefit or of the leased property.
interest of the beneficiary.
Benefits enjoyed by the beneficiary Benefits enjoyed by the lessee are
are usually of a permanent nature. only for a limited contracted period.

Trust Donation
An existing legal relationship which There is a transfer of property as
involves the separation of legal and well as the disposition of both legal
equitable title and equitable ownership except in
cases of gifts in the trust.

554
 The beneficiary of a trust may The donee must comply with the
demand performance of the legal requirements in accepting
obligation without having formally donations.
accepted the benefit of the trust in
public document, upon mere
acquiescence in the formation of the
trust and acceptance under the
second paragraph of Art. 1311.

1. Governing Rules

Art. 1442, CC. 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.

2. Parties [Art. 1440, CC]

a. Trustor – the person who establishes the trust

b. Trustee – one in whom the confidence is reposed as regards property for
the benefit of another person
c. Beneficiary or cestui que trust – person for whose benefit the trust has
been created

3. Kinds of Trust

a. Express Trust

Created by the intention of the trustor or of the parties [Art. 1441, CC]

Elements:
1. Competent trustor or settlor
2. Trustee
3. Ascertainable trust res / Trust property
4. Sufficiently certain beneficiaries

Trust is created:
1. By declaration of the trustor or settlor that he holds property in trust,
2. By conveyance to the trustee,
3. Inter vivos, or
4. By testament.

Proof Required:
1. No express trusts concerning an immovable or any interest therein may be
proved by parol evidence [Art. 1443, CC].
Trusts over real property are unenforceable unless in writing, although
writing is not required for validity, only for proof.
2. Where the trust is over personal property, an oral trust is sufficient
between the parties.

555
3. But to bind third persons the trust must be in a public instrument [Art.
1358(1) and (3), CC]

Form of Express Trusts

Art. 1444, CC. No particular words are required for the creation of an
express trust, it being sufficient that trust is clearly intended

Want of Trustee
Art. 1445, CC. No trust shall fail because the trustee appointed declines
the designation, unless the contrary should appear in the instrument
constituting the trust.

Acceptance by beneficiary
Acceptance by beneficiary is necessary [Art. 1446, CC]. It may be:
1. Express
2. Implied – acceptance by the beneficiary is not subject to the formal
rules of donations [Cristobal v. Gomez, G.R. No. L-27014 (1927)]
3. Presumed – if the trust imposes no onerous condition upon the
beneficiary

Termination of Express Trusts

1. Revocation or modification by the trustor under a reserved power
2. Rescission
3. Expiration of the period or happening of the resolutory condition
4. Accomplishment of the purpose or its becoming impossible or illegal
5. Dissolution by the Court if continuation will defeat the purpose of the
trust
6. Dissolution by the consent of all the beneficiaries and/or the settlor
7. Merger

b. Implied Trust

How established
Implied trusts come into being by operation of law [Art. 1441, CC].

The essential idea involves a certain antagonism between the cestui que trust
and the trustee even where the trust has not arisen out of fraud or an immoral
transaction [Reyes]

Proof required
Art. 1457. An implied trust may be proved by oral evidence.

A trust must be proven by clear, satisfactory and convincing evidence. It

cannot rest on vague and uncertain evidence or on loose, equivocal or
indefinite declarations [de Leon v. Molo-Peckson, G.R. No. L-17809 (1962)]

As a rule, the burden of proving the existence of a trust is on the party

556
asserting its existence, and such proof must be clear and satisfactorily show
the existence of the trust and its elements. While implied trusts may be
proved by oral evidence, the evidence must be trustworthy and received by
the courts with extreme caution, and should not be made to rest on loose,
equivocal or indefinite declarations. Trustworthy evidence is required
because oral evidence can easily be fabricated. [Morales v. Court of
Appeals, (1997)]

Kinds of Implied Trusts

1. Resulting Trusts - a trust raised by implication of law and presumed to
have been contemplated by the parties, the intention as to which is to be
found in the nature of their transaction, but not expressed in the deed or
instrument of conveyance [Salao v. Salao, G.R. No. L- 26699 (1976)]

Rules on Resulting Trusts

a. 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. 1448, CC].

b. 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. 1449, CC].

c. 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. 1451, CC].

d. 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. 1452, CC].

e. 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.
1453, CC].

Express and Implied Trust Distinguished

Express Trust Implied Trust
As to Created by the intention of Comes into being by
Creation the trustor or the parties. operation of law.

557
 Created by the direct andThose, without being
positive acts of the parties
expressed, are deductible
by some writing or deed or
from the nature of the
will or by words evidencing
transaction by operation of
an intention to create a trust.
law as matters of equity,
independently of the
particular intention of the
parties.
As to Proof An express trust over an An implied trust may be
immovable property or any proved by oral evidence
interest therein cannot be
proved by parol evidence
As to Action must be made within In resulting trust:
Laches 10 years from knowledge of Action must be made within
the repudiation, otherwise 10 years from knowledge of
prescribed. repudiation, otherwise
prescribed.

In constructive trust: It must

be made within 10 years
from date of registration.
As to Trustee can sue and be sued Trustee cannot sue and be
Suability alone [PAL, Inc. v. Heald sued alone.
Lumber Co., G.R. No. L-
11497 (1957)]

2. Constructive Trusts - a trust not created by any words, either expressly

or impliedly evincing a direct intension to create a trust, but by the
construction of equity in order to satisfy the demands of justice [Salao v.
Salao, supra]

Rules on Constructive Trusts

a. 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 it is paid. The latter
may redeem the property and compel a conveyance thereof to him. [Art.
1450, CC].

b. 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. 1454, CC].

c. When any trustee, guardian or other person holding a fiduciary

558
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. [Art.
1455, CC].

d. If property is acquired through mistake or fraud, the person obtaining it is,

by force of law, considered a trustee of an implied trust by prescription, the
title thereto may be attacked, either directly or collaterally, by the State
which is not bound by any prescriptive period provided by the Statute of
Limitation. [Peña, citing Martinez v. CA, G.R. No. L-31271 (1974)]

C. AGENCY
1. Nature and form

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 [Art. 1868, CC].

Using this definition, there are two parties in a contract of agency. The agent
is the one who binds himself to represent another; while the principal is the
one who is represented by the agent.

A contract of agency has at least four essential elements:

1. There is consent, express or implied of the parties to establish the
relationship;
2. The object is the execution of a juridical act in relation to a third person;
3. The agents acts as a representative and not for himself, and
4. The agent acts within the scope of his authority [Rallos v. Felix Go Chan,
G.R. No. L-24332 (1978)].

It must be noted, however, that agency is not always contractual. As will

be discussed, even if some of these elements are missing, agency may still
be created by operation of law, such as Articles 1930 and 1931.

General rule as to form

Agency may be written or oral, unless the law requires a specific form [Art.
1869, CC].

Exceptions as to form
1. In an agency to sell a piece of land or any interest therein, the authority
of the agent shall be in writing. Otherwise, the sale shall be void [Art. 1874,
CC].
2. A corporation may act only through its board of directors or, when
authorized either by its bylaws or by its board resolution, through its
officers or agents in the normal course of business [San Juan Structural
Steel v. CA, G.R. No. 129549 (1998)].

559
Agency distinguished from other contracts
Distinguishing Agency from Loan
[De Leon (2010), 345-346]
Agency Loan
Principal gives funds to agent to Lender gives funds to borrower for
advance principal’s own business borrower’s own purposes
Does not carry with it the Carries with it the corresponding
obligation to return the money obligation to return the money

Distinguishing Agency from Lease of Service

[De Leon (2010), 347-349]
Agency Lease of Service
Based on representation Based on employment
Agents generally exercises Lessor (employee) only exercises
discretion ministerial acts
Parties involved include agent, Parties involved are lessee
principal, and third person (employer) and lessor (employee)

Distinguishing Agency from Independent Contract

[De Leon (2010), 349-352]
Agency Independent Contract
Agent may be controlled and Independent contractor is
directed by the principal independent from the principal’s
control and direction
Generally, principal is liable for the Generally, employer is not liable for
agent’s acts the independent contractor’s acts

Distinguishing Agency from Partnership

[De Leon (2010), 352-355; Art. 1767, CC]
Agency Partnership
Agent acts in representation of the Each partner is an agent of the
principal, not vice versa partnership and his co-partners (i.e.
contract of mutual agency)
Unless acting outside the scope of Acting in representation of the
authority, agent does not incur partnership, a partner binds himself,
personal liability the partnership, and his co-partners
[see Art. 1822]
Agent is subject to the control of the Partners do not have the right to
principal control co-partners

Distinguishing Agency from Brokerage

[Hahn v. CA, G.R. No. 113074, Jan. 22,
1997]
Agency Brokerage

560
 “An agent receives a commission “[B]roker earns his pay merely by
upon the successful conclusion of a bringing the buyer and the seller
sale.” together, even if no sale is
eventually made.”

Distinguishing Agency from Sale

[Art. 1458, CC; Quiroga v. Parsons, G.R. No. L-11491, Aug. 23, 1918]
Agency to sell Sale
Principal does not transfer Seller transfers ownership of the
ownership of the goods to agent. goods
Agent does not pay the price of the Buyer pays the price of a thing.
goods to principal, but delivers the
price he obtains from selling them
to third persons
Agent must return the goods if the No obligation to return the goods if
goods remain unsold the buyer is unable to sell it to third
persons

Distinguishing Agency from Trust

[De Leon (2010), 368-369; Art. 1440, CC]
Agency Trust
Agent acts in representation of the Title passes to the
principal trustee acting in his
own name
May be revoked any time [see Terminated upon fulfillment of
Extinguishment of Agency] purpose of trust

2. Kinds

A contract of agency may be classified:

1. As to manner of creation: express and implied [Arts. 1869-1873, CC]
2. As to scope of business: general and special [Art. 1876, CC]
3. As to authority conferred: couched in general terms and couched in
specific terms [Art. 1877-1880, CC]
4. As to consideration: gratuitous or onerous [Art. 1875, CC]

1. AS TO MANNER OF CREATION: EXPRESS AND IMPLIED

An agency may be express or implied [Art. 1869, CC].

1. Express: oral or written
2. Implied from
a. The acts of the principal,
b. His silence or lack of action, or
c. His failure to repudiate the agency, knowing that another person is acting
on his behalf without authority [Art. 1869, CC].

561
Acceptance by the agent may also be express or implied.
1. Express: oral or written
2. Implied from
a. His acts which carry out the agency, or
b. His silence or inaction according to the circumstances [Art. 1870, CC]

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 [Art. 1871, CC].

Between persons who are absent, the acceptance of the agency cannot be
implied from the silence of the agent, except:
a. When the principal transmits his power of attorney to the agent, who
receives it without any objection;
b. When the principal entrusts to him by letter or telegram a power of
attorney with respect to the business in which he is habitually engaged as
an agent, and he did not reply to the letter or telegram [Art. 1872, CC].

Implied agency v. Agency by estoppel

Distinguishing implied agency from agency by estoppel
[De Leon (2010), 386-388]
Implied agency Agency by estoppel
[Arts. 1881-1882] [Art. 1911]
Actual or real agency. No actual agency, only the presence
of an apparent authority
Only the principal is liable to third Liability depends whether estoppel
persons. is caused by the principal or the
agent.
A third party’s reliance in the A third party’s reliance in the
representation is not necessary, representation is necessary to
since there is an actual agency. invoke agency by estoppel.

2. AS TO SCOPE OF BUSINESS: GENERAL AND SPECIAL

An agency is either general or special [Art. 1876, CC]:

1. General: comprises of all the business of the principal
2. Special: Comprises one or more specific transactions

A general agent is “one authorized to do all acts pertaining to a business

of a certain kind or at a particular place, or all acts pertaining to a business of
a particular class or series, while a special agent is “one authorized to do
some particular act or to act upon some particular occasion. He acts
usually in accordance with specific instructions or under limitations
necessarily implied from the nature of the act to be done.” [Siasat v. IAC,
G.R. No. L-67889 (1985), citing Padilla (1969)]

3. AS TO AUTHORITY CONFERRED: COUCHED IN GENERAL

562
TERMS AND COUCHED IN SPECIFIC TERMS

An agency may also be couched in general terms or specific terms [Art.

1877, CC]:
1. Couched in general terms: comprises only acts of administration, even
if:
a. The principal should state that he withholds no power or that the agent
may execute such acts as he may consider appropriate, or
b. Or even though the agency should authorize a general and unlimited
management [Art. 1877, CC].

The term “acts of administration” are “those which do not imply the
authority to alienate for the exercise of which an express power is
necessary” [De Leon (2010), 408-409].

2. Couched in specific terms: A special power of attorney is necessary in

acts of strict dominion [De Leon (2010), 414]. The circumstances
enumerated in Art. 1878 pertain to this, namely:
a. To make such payments as are not usually considered as acts of
administration;
b. To effect novations which put an end to obligations already in
existence at the time the agency was constituted;
c. To compromise, to submit questions to arbitration, to renounce
the right to appeal from a judgment, to waive objections to the
venue of an action or to abandon a prescription already
acquired;
d. To waive any obligation gratuitously;
e. To enter into any contract by which the ownership of an
immovable is transmitted or acquired either gratuitously or for a
valuable consideration;
f. To make gifts, except customary ones for charity or those made
to employees in the business managed by the agent;
g. To loan or borrow money, unless the latter act be urgent and
indispensable for the preservation of the things which are under
administration;
h. To lease any real property to another person for more than one
year;
i. To bind the principal to render some service without
compensation;
j. To bind the principal in a contract of partnership;
k. To obligate the principal as a guarantor or surety;
l. To create or convey real rights over immovable property;
m. To accept or repudiate an inheritance;
n. To ratify or recognize obligations contracted before the agency;
o. Any other act of strict dominion.

563
Note that the special power to sell excludes the power to mortgage; and a
special power to mortgage does not include the power to sell [Art. 1879,
CC]. Note further that the power to compromise does not authorize
submission to arbitration [Art. 1880, CC].

4. OTHER KINDS OF AGENCY

Agency by estoppel
In an agency by estoppel, there is no agency at all, but the one assuming to
act as agent has apparent authority, to represent another, although not real
[Yun Kwan Byung v. PAGCOR, G.R. No. 163553, Dec. 11, 2009].

To establish agency by estoppel, the following elements must be shown:

1. The principal manifested a representation of the agent’s authority or
knowingly allowed the agent to assume such authority;
2. The third person, in good faith, relied upon such representation; and
3. Relying upon such representation, such third person has changed his
position to his detriment [Litonjua v. Eternit Corporation, G.R. No. 144805,
June 8, 2006].

Agency by operation of law

While agency is generally contractual, the Civil Code admits several
exceptions.
1. The agent must finish the business already begun on the death of the
principal, should delay entail any danger [Art. 1884, par. 2, CC]
2. 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. [Art.
1929, CC]
3. 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 [Art. 1930, CC]
4. 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. [Art. 1931, CC]

OBLIGATIONS OF THE AGENT

a. To act within the scope of authority

One of the primary obligations of an agent is to act within the scope of his
authority [Art. 1881, CC]. This includes acting according to the instructions
of the principal; and in default thereof, to the diligence of a good father of a
family [Art. 1887, CC].

564
In the following cases, the acts performed by the agent shall be deemed
within the scope of his authority:
1. Acts that may be conducive to the accomplishment of the purpose of the
agency [Art. 1881, CC];
2. Acts performed in a manner more advantageous to the principal than
that specified by him [Art. 1882, CC];
3. So far as third persons are concerned, acts within the terms of the
written power of attorney, even if the agent has in fact exceeded the limits
of his authority according to an understanding between the principal and the
agent [Art. 1900, CC]

b. To carry out the agency

Another primary obligation of an agent is to carry out the agency [Art. 1884,
CC]. Such obligation entails that the agent shall
1. Be liable for the damages caused to the principal through his
nonperformance [Art. 1884, CC];
2. Finish the business already begun on the death of the principal, should
delay entail danger [Art. 1884, CC];
3. Even if the agent withdraws, continue to act as an agent until the
principal has had reasonable opportunity to take the necessary steps to meet
the situation [Art. 1929, CC].
The obligation to carry out the agency also includes the obligation to not
carry out the agency if its execution would manifestly result in loss or
damage to the principal [Art. 1888, CC].

c. To prefer the interest of the principal over his own

This obligation is manifested in two ways:

1. An agent shall be liable for damages if, there being a conflict between his
interests and those of the principal, he should prefer his own [Art. 1889,
CC];
2. An agent, who has been authorized to lend money, may not borrow it
without the consent of the principal [Art. 1890, CC].

d. To render account and to deliver

An agent must render an account of his transactions and deliver to the

principal whatever he may have received by virtue of the agency, even
though it may not be owing to the principal [Art. 1891, CC].
A stipulation exempting the agent from the obligation to render an account
shall be void [Art. 1891, CC].

e. To pay interest

The agent owes interest on

1. The sums he has applied to his own use from the day on which he did so;

565
and
2. Those which he still owes after the extinguishment of the agency [Art.
1896, CC].

f. To be liable for fraud and negligence

The agent is also liable for fraud and negligence. In this case, negligence
shall be judged with more or less rigor by the courts, according to whether
the agency was or was not for compensation [Art. 1909, CC].

LIABILITY FOR ACTS OF SUBSTITUTES

Appointment of a substitute
General rule: An agent may appoint a substitute.

Exemption: Principal prohibits the agent from doing so. In this case, all of
the substitute’s acts shall be void [Art. 1892, CC].

Liability of the agent for his substitutes

General rule: The agent shall not be responsible for the acts of the
substitute.
Exemptions: An agent is responsible for the acts of the substitute in the
following cases:
1. When the agent was not given the power to appoint one;
2. When the agent was given such power, but without designating the
person, and the person appointed was notoriously incompetent or
insolvent [Art. 1892, CC].

In both of these cases, the principal may bring an action against the
substitute with respect to the obligations the substitute has contracted under
the said substitution [Art. 1893, CC].

Solidary Liability
Just like ordinary contracts, solidary liability is not presumed, even if two
or more agents are appointed simultaneously. Solidary liability among such
agents must be expressly stipulated [Art. 1894, CC].

D. COMPROMISE
1. Definition

A compromise is a contract whereby the parties, by making reciprocal

concessions, avoid a litigation or put an end to one already commenced.
[Art. 2028, CC]

As a contract, a valid compromise agreement must possess the following

requisites:
1. The consent of the parties to the compromise,
2. An object certain that is the subject matter of the compromise, and

566
3. The cause of the obligation that is established. [Magbanua v. Uy, G.R.
No. 161003 (2005)]

The Civil Code provides for additional requisites in special cases:

1. A special power of attorney for a compromise agreement to be entered
into by an agent on behalf of the principal [Art. 1878(3), CC]
Note: A special power to compromise does not authorize submission to
arbitration. [Art. 1880, CC]
2. The consent of all the partners in a partnership, except when authorized by
the other partners or unless they have abandoned the business. [Art. 1818,
CC]

2. Kinds of Compromise

a. Judicial – puts an end to a pending litigation

b. Extrajudicial – to avoid litigation [Sps. Abinujar and Lana v. Court of
Appeals, G.R. No. 104133 (1995)]

3. Coverage

A compromise comprises only those objects which are:

1. definitely stated therein, or
2. 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 [Art.
2036, CC]

Limitation on Juridical Persons

Juridical persons may compromise only in the form and with the requisites
which may be necessary to alienate their property. [Art. 2033, CC].

4. Effects

a. Suspension of Pending Litigation

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. [Art.
2030, CC]

567
b. Res Judicata
A compromise has upon the parties the effect and authority of res judicata;
but there shall be no execution except in compliance with a judicial
compromise. [Art. 2037, CC]

5. Role of the Court

Persuade Litigants to Compromise

The court shall endeavor to persuade the litigants in a civil case to agree
upon some fair compromise [Art. 2029, CC]

Mitigate Damages
The courts may mitigate the damages to be paid by the losing party who has
shown a sincere desire for a compromise [Art. 2031, CC]

Approve Compromise in Special Cases

The court's approval is necessary in compromises entered into by guardians,
parents, absentee's representatives, and administrators or executors of
decedent's estates. [Art. 2032, CC]

6. Effect on Criminal Action

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. [Art. 2034, CC]

Trigger(s): A person has committed an offense; The offender party and the
offender is willing to seek compromise on the civil liability.

Effect: Compromise may extinguish or novate the civil liability but shall not
affect criminal liability

7. Void Compromise

No compromise upon the following questions shall be valid:

(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.

The prohibitions in the two preceding articles (see below) are applicable
to sales in legal redemption, compromises and renunciations. [Art. 2035,
CC]

The husband and the wife cannot sell property to each other, except:

568
 1. When a separation of property was agreed upon in the marriage
settlements; or
2. When there has been a judicial separation of property under article 191.
[Art. 1490, CC]

The following persons cannot acquire by purchase, even at a public or

judicial auction, either in person or through the mediation of another:
1. The guardian, the property of the person or persons who may be under
his guardianship;
2. Agents, the property whose administration or sale may have been
intrusted to them, unless the consent of the principal has been given;
3. Executors and administrators, the property of the estate under
administration;
4. Public officers and employees, the property of the State or of any
subdivision thereof, or of any government-owned or controlled
corporation, or institution, the administration of which has been intrusted
to them; this provision shall apply to judges and government experts who,
in any manner whatsoever, take part in the sale;
5. Justices, judges, prosecuting attorneys, clerks of superior and inferior
courts, and other officers and employees connected with the administration
of justice, the property and rights in litigation or levied upon an
execution before the court within whose jurisdiction or territory they
exercise their respective functions; this prohibition includes the act of
acquiring by assignment and shall apply to lawyers, with respect to the
property and rights which may be the object of any litigation in which they
may take part by virtue of their profession;
6. Any others specially disqualified by law. [Art. 1492, CC]

Civil Status
General Rule: Parties cannot compromise on the civil status of persons
Exception: The law does not prohibit a simple and full recognition of the
status of another, not amounting to compromise.

A possible objection to the promise of the defendants to give the plaintiff his
share in the estate as an acknowledged natural child is that such agreement
may run counter to article 1814, (old) Civil Code [Now Art. 2035, NCC].
However, it does not appear from the complaint that the defendants ever
impugned or denied the plaintiff's status as an acknowledged natural child;
on the contrary, according to the complaint, the defendants admitted such
status by promising to give the plaintiff his lawful share in the estate of the
father. There having been, in accordance with the allegations in the
complaint, no controversy over the condition of the plaintiff as
acknowledged natural child, the agreement between the plaintiff and
defendants alleged in par. 7 of the complaint, if shown at the trial, is not a
compromise at all, and is not frowned upon by the legislator in article 1814
of the Civil Code. [Lajom v. Viola, G.R. No. L-47475 (1942)]

569
Validity of Marriage or Legal Separation and any of its Grounds
General Rule: Parties cannot compromise on the validity of marriage or
legal separation, the validity of which is governed by the provisions of the
Family Code.

Future Support
General Rule: The law prohibits a compromise on future support.

Jurisdiction of the Courts

General Rule: Jurisdiction is conferred by law and cannot be compromised
by the parties.

Future Legitime
General Rule: The law prohibits a compromise on future legitimes.

Sale of Property Between Married Spouses

General Rule: Spouses cannot by compromise evade the prohibition on the
sale of property to one another
Exception(s): When a separation of property has been agreed upon in the
marriage settlements; When there is legal separation

8. Voidable Compromise

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. [Art. 2038, CC]

General Rule: Mistake, fraud, violence, intimidation, undue influence or

falsity of documents are grounds to annul the compromise agreement.
Exception: Mistake of fact cannot be set up if the other party, by virtue of
the compromise has already withdrawn from the litigation

9. Annulment/ Rescission

Newly-discovered Documents
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. [Art. 2039, CC]

570
Triggers:
1. Parties have compromised generally in all differences they have.
2. There is a subsequent discovery of documents referring to one or more but
not to all of the questions settled.

General Rule: Discovery shall not itself be a cause for annulment of the
compromise
Exception: Discovery shall be a cause for annulment if:
● The said documents were concealed by one party;
● The compromise refers only to one thing to which one of the parties has
no right, as shown by the newlydiscovered documents.

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.

Ignorance of a judgment which may be revoked or set aside is not a valid

ground for attacking a compromise. [Art. 2040, CC]

Triggers:
1. The parties to the compromise had a case pending litigation
2. Final judgement has been rendered on the case
3. Parties are unaware of the existence of final judgement
4. Parties have entered a compromise agreement

General Rule: The compromise agreement may be rescinded.

Exception: Ignorance of a judgment which may be revoked or set aside is
not a valid ground for attacking a compromise. “This refers to the instance
when the court’s decision is still appealable or otherwise subject to
modification. Ignorance of the decision is not a ground to rescind a
compromise agreement, because the parties are still unsure of the final
outcome of the case at this time”. [Magbanua v. Uy, G.R. No. 161003
(2005)]

10. In Case of Breach

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. [Art. 2041, CC]

Trigger: One of the parties fails or refuses to abide by the compromise

agreement
Effect: The innocent party may either:
● Demand specific performance of the compromise agreement.
● Rescind the compromise agreement and insist upon the original demand.

The innocent party need not seek a judicial declaration of rescission, for he

571
may ‘regard’ the compromise agreement already ‘rescinded’ [Sonley v.
Anchor Savings Bank/ Equicom Savings Bank, G.R. No. 205623 (2016)]

E. LOAN
1. Loan
of the parties delivers to another, either something not consumable so 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.

Contract of Loan vs. Contract to Loan

Contract of Loan Contract to Loan

Real Contract: perfected, not by Consensual Contract: perfected by
mere consent, but by delivery of mere consent.
the object of the contract.
An accepted promise to deliver
something by way of commodatum
or simple loan is binding upon the
parties [Art. 1934, CC]

Two Types of Contracts of Loan

1. Commodatum – a contract where one party delivers to another

something not consumable so that the latter may use the same for a certain
time and return it. [Art. 1933, CC]

2. Mutuum (Simple Loan) – a contract where one party delivers to another,

money or other consumable thing, upon the condition that the same amount
of the same kind and quality shall be paid. [Art. 1933, CC]

Note: A contract of commodatum is a gratuitous real contract, and is purely

personal in nature. It does not require compensation for its use, and is
perfected upon delivery by the bailor. However it demands that the same
exact thing be returned, and that generally the use of the thing is only limited
to the bailor, with exceptions in Art. 1939 (2). A contract of loan is a real

572
contract, perfected upon delivery of a loan of money or any fungible thing,
with the borrower acquiring the ownership of the money/fungible thing with
the corresponding obligation to pay the creditor an equal amount of the same
kind and quality (Art. 1933, cf. Art.1953, CC).

a. Commodatum v. Mutuum

1. Nature

Commodatum Mutuum
Purely personal in character [Art. Not purely personal in character
1939, CC]
Both are reciprocal obligations

Note: As a purely personal obligation, consequently:

a. The death of either the bailor or the bailee extinguishes the contract

b. 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 [Art. 1939, CC]

i. Purpose

Commodatum Mutuum
Loan for permissive or temporary Loan for consumption
use [Art.1935, CC]

ii. As to Object

Commodatum Mutuum
GR: Involves nonconsumable GR: Involves money or other
movable or immovable property consumable movable property

EX: Consumable goods may be the Consumable - cannot be used in a

subject of commodatum if the manner appropriate to their nature
purpose of the contract is NOT without their being consumed. [Art.

573
 consumption of the object [Art. 418, CC
1936, CC] (e.g., stamps for an
exhibition)

iii. As to Ownership of the Thing Loaned

Commodatum Mutuum
Retained by lender [Art.1933, CC] Transferred to the borrower

iv. As to Consideration

Commodatum Mutuum
Essentially gratuitous [Art.1933, CC] May be gratuitous or onerous, i.e.
with stipulated interest

v. As to Obligations of the Borrower

Commodatum Mutuum
Borrower must return the same thing Borrower need only pay an equal
loaned [Art. 1933, CC] amount of the same kind and
quality [Art. 1953, CC]
GR: Bailor CANNOT demand the
return of the thing until after the GR: Lender may NOT demand the
expiration of the period stipulated or return of the thing loaned nor
the accomplishment of the use for payment before the lapse of the
which the contract was constituted term agreed upon
[Art.1946, CC]

EX: Bailor may demand the return of

the thing loaned before the expiration
of the term:
1. In case of urgent need [Art. 1946,
CC]
2. If the commodatum is a precarium
[Art. 1947, CC
3. If the bailee commits any of the
acts of ingratitude in Art. 765 [Art.
1948]

vi. As to Liability for Loss

Commodatum Mutuum
Bailor suffers the loss of the subject Borrower suffers the loss even if

574
 matter since he is the owner [Arts. caused exclusively
1942 and 1174, CC] by a fortuitous event and he is not,
therefore, discharged from his duty
to pay

2. Commodatum
Commodatum – an essentially gratuitous contract where one party (bailor)
delivers to another (bailee) something not consumable so that the latter may
use the same for a certain time and return it. [Art. 1933]

KINDS OF COMMODATUM
a. Ordinary commodatum – the use of the thing by the bailee is for a
certain period of time [Art. 1933]
b. Precarium – the bailor may demand the thing loaned at will; if any one
of the following is present
1. The duration and purpose of the contract is not stipulated, or
2. The use of the thing is merely tolerated by the owner [Art. 1947]

i. Parties

1. Bailor: creditor
2. Bailee: debtor

Who may be a bailor in commodatum?

Anyone. The bailor in commodatum need not be the owner of the thing
loaned [Art. 1938], but as against the bailee, the bailor retains ownership of
the thing loaned.

ii. Use by the Bailee

Rules as to who may make use of the property loaned

General rule: The bailee acquires permissive use of the thing loaned only
for himself. He may not lend nor lease the thing loaned to him to a third
person.

Exception: The members of the bailee’s household may make use of the
thing loaned

Exceptions to the exception:

1. If there is a stipulation to the contrary, or
2. The nature of the thing forbids such use. [Art. 1939(2), CC]

Rules as to the use of fruits of the thing loaned

General rule: The bailee acquires the permissive use of the thing loaned but
NOT its fruits [Art. 1935, CC]
Exception: Parties stipulate otherwise; such stipulation is considered valid
[Art. 1940, CC]

575
iii. Obligations of the Bailee

(TUNR-PBS)
1. Take care of the thing loaned with the proper diligence of a good father of
a family. [Art. 1163, CC]
2. Use the thing loaned only for the purpose for which it was loaned and not
for any other purpose. [Art. 1935, 1939(2), 1942 [1], CC]
3. Not to lend the thing to a third person who is not a member of his
household. [Art. 1942 (4), CC]
4. Return the thing upon the expiration of the period stipulated or after the
accomplishment of the use for which it has been constituted. [Art. 1944,
1946, CC]

Exception: Bailee has right of retention for damages when the bailor who,
knowing the flaws of the thing loaned, does not advise the bailee of the
same. [Arts. 1946, 1944, CC]

5. Pay for the ordinary expenses for the use and preservation of the thing
loaned. [Art. 1941, CC]

6. Bear equally (with the bailor) the extraordinary expenses arising on the
occasion of actual use of the thing by the bailee even though bailee acted
without fault. [Art. 1949, CC]

Exception: Contrary stipulation

7. Solidarily liable when there are two or more bailees to whom a thing is
loaned in the same contract. [Art. 1945, CC]
Note: If, for the purpose of making use of the thing loaned, the bailee incurs
ordinary or extraordinary expenses which are neither for the use nor the
preservation of the thing, he is not entitled to reimbursement. [Art. 1950,
CC]

iv. Obligations of the Bailor

(DR-BP)

1. Demand the return of the thing only upon the expiration of the term or
after the accomplishment of the use [Art. 1946, CC]

Exceptions:
a. When bailor has urgent need of the thing, he may demand its return
(extinguish commodatum) or its temporary use (suspend commodatum) [Art.
1946, CC]
b. Precarium [Art. 1947, CC] or a contractual relation where the bailor may
demand the property loaned at will
c. If bailee commits any acts of ingratitude in Art. 765: [Art. 1948, CC]
a) Bailee committed some offense against the person, honor or property

576
 of the bailor, or of his wife or children under his parental authority;
b) Bailee imputes to bailor any criminal offense, or any act involving
moral turpitude, even though he should prove it, unless the crime or
act has been committed against the bailee himself, his wife or children
under his authority; or
c) Bailee unduly refuses bailor support when bailee is legally or morally
bound to give support the bailor.

2. Refund the extraordinary expenses during the contract for the preservation
of the thing loaned. [Art. 1949, CC]
Provided that: Bailee brings the same to the knowledge of the bailor before
incurring them, except when they are so urgent that the reply cannot be
awaited without danger.

3. Bear equally (with the bailee) the extraordinary expenses arising on the
occasion of actual use of the thing by the bailee. [Art. 1949, CC]

Exception: Contrary stipulation

4. Pay damages to the bailee for hidden flaws known to the bailor. [Art.
1951, CC]

Note: Bailor has no right of abandonment; he cannot exempt himself from

payment of expenses or damages to the bailee by abandoning the thing to the
latter. [Art. 1952, CC]

v. Liability for Deterioration

General rule: The bailee is NOT liable for the deterioration of the thing
loaned when the deterioration of the thing is due only to the use thereof and
without his fault. [Art. 1943, CC]

Exception: The bailee is liable only when the deterioration of the thing is
due to his fault. [Art. 1943, CC]

vi. Liability for Loss

General Rule: The bailee is NOT liable for loss of the thing due to
fortuitous event. [Art. 1174, CC]

Since the bailor retains ownership of the property loaned, generally, it is the
bailor who bears the liability for loss of the property loaned due to fortuitous
events.

Exceptions: The bailee is liable for loss of the thing, even if it is through a
fortuitous event, if the bailee: (DDS-KL)
1. Devoted the thing to any purpose different from that for which it has been
loaned;
2. Loaned thing has been Delivered with appraisal of its value

577
Exception: Unless there is a stipulation exempting the bailee from
responsibility in case of a fortuitous event;
3. Saved his own thing, being able to save either the thing borrowed or his
own thing
4. Kept the thing longer than the period stipulated, or after the
accomplishment of the use for which the commodatum has been constituted;
5. Lent or leased the thing to a third person, who is not a member of his
household; [Art. 1942, CC]

vii. Right of Retention

General Rule: The bailee has no right of retention of the thing loaned on the
ground that the bailor owes him something, even though it may be by reason
of expenses. [Art. 1944, CC]
Exception: The bailee has the right of retention for damages arising from
hidden flaws. [Art. 1944, 1951, CC]

viii. Extinguishment (DEA-PU)

1. Death of either the bailor or the bailee [Art. 1939, CC]

2. Expiration of term or accomplishment of purpose [Art. 1946, CC]
3. Act/s of ingratitude has/have been committed by the bailee, and the bailor
demands the return
4. Upon demand in case of Precarium
5. Bailor has Urgent need of the thing loaned, and he demands the return
(and not just temporary use)

3. Simple loan
Art. 1953, CC. A person who receives a loan of money or any other
fungible thing acquires the ownership thereof, and is bound to pay to the
creditor an equal amount of the same kind and qualit.

Mutuum – a contract where one of the parties (creditor) delivers to another

(debtor/borrower) money or other consumable thing upon the condition that
the same amount of the same kind and quality shall be paid. [Art. 1953]

a. Obligations of the Borrower (EVI)

1. Pay the creditor an Equal amount of the same kind and quality. [Art.
1953, CC]

2. Pay Value at the time of perfection of loan, if impossible, to deliver the

578
same kind. [Art. 1955, CC]

3. Pay Interest, if stipulated. [Art. 1956, CC]

b. Rights of the Borrower

1. Right of ownership; upon delivery/receipt of the loan of money or any

fungible thing, the person acquires ownership of the money/fungible thing
[Art. 1953, CC]

2. Right to not pay interest, unless stipulated [Art. 1956, CC]

a. If the debtor however pays interest when there is no stipulation, the rules
on Solutio Indebiti, or natural obligations, shall be applied [Art. 1956, CC].

c. Obligations of the Creditor

Barred from placing stipulations under any cloak or device that circumvent
laws on usury [Art. 1957, CC].

d. Rights of the Creditor

1. Right to receive an equal amount of the same kind and quality [Art.
1953, CC]

2. Right to impose interest, once stipulated [Art. 1959, CC].

4. Interests on loan
A mutuum or simple loan may be gratuitous or with a stipulation to pay
interest. [Art. 1933, CC]

Interest – The compensation allowed by law or fixed by the parties for the
loan or forbearance of money, goods or credits (conventional interest), or the
amount imposed by law or by courts as penalty or indemnity for damages
(compensatory interest)

579
Requisites for Interest to be Chargeable (EWL)
1. Must be Expressly stipulated [Art. 1956, CC]
Exceptions:
a. The debtor in delay is liable to pay legal interest (6% per annum) as
indemnity for damages [Art. 2209, CC]
b. Interest accruing from unpaid interest – Interest demanded shall earn
interest from the time it is judicially demanded [Art. 2212, CC] or where
there is an
express stipulation [Art.1959, CC]
2. Agreement must be in Writing [Art.1956, CC]
3. Must be Lawful

Note: If the abovementioned requisites are not met, and the borrower:
a. Paid interest by mistake, the creditor is obliged to return what was
delivered [Arts 1960 and 2154, CC]
b. Voluntarily paid interest (i.e., with knowledge that the requisites have
not been met), the creditor is authorized to retain what was paid [Art. 1423,
CC]

a. Conventional interest
Simple interest – Paid for the principal at a certain rate fixed or stipulated
by the parties.

b. Interest on interest
Compound Interest – Interest which is imposed when interest due and
unpaid is capitalized or added to the principal. [Art. 1959, CC]

Compound interest is allowed:

a. When there is an express written stipulation to that effect [Art.1956, CC]
OR
b. Upon judicial demand. However, debtor is not liable to pay compound
interest even after judicial demandwhen there is no stipulation for payment
of interest. [Art. 2212, CC]

c. Compensatory, penalty or indemnity interest

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

Rules for the Award of Interest in the Concept of Actual and

Compensatory Damages

Note: Jurisprudential basis is Nacar v. Gallery Frames, G.R. No. 189871

(2013) modifying Eastern Shipping Lines vs. CA, G.R. No. 97412 (1994)] in
light of BSP-MB Circular No. 799]
1. When the obligation is breached, and it consists in the payment of a

580
sum of money, i.e., a loan or forbearance of money,
a. The interest due should be that which may have been stipulated
in writing.
b. The interest due shall itself earn legal interest from the time it is
judicially demanded.
c. In the absence of stipulation, the rate of interest shall be 6% per
annum to be computed from default, i.e., from judicial or
extrajudicial demand under and subject to the provisions of
Article 1169 of the CC.

2. When an obligation, not constituting a loan or forbearance of money,

is breached
a. An interest on the amount of damages awarded may be imposed
at the discretion of the court at the rate of 6% per annum.
b. No interest, however, shall be adjudged on unliquidated claims
or damages, except when or until the demand can be established
with reasonable certainty.
c. Where the demand is established with reasonable certainty, the
interest shall begin to run from the time the claim is made
judicially or extrajudicially [Art. 1169, CC]
d. When such certainty cannot be so reasonably established at the
time the demand is made, the interest shall begin to run only
from the date the judgment of the court is made [at which time
the quantification of damages may be deemed to have been
reasonably ascertained].
e. The actual base for the computation of legal interest shall, in
any case, be on the amount finally adjudged.

3. When the judgment of the court awarding a sum of money becomes

final and executory, the rate of legal interest, whether the case falls under
paragraph 1 or paragraph 2, above, shall be 6% per annum from such finality
until its satisfaction, this interim period being deemed to be by then an
equivalent to a forbearance of credit.

d. Finance charges
1. Under the Truth in Lending Act

Rep. Act No. 3765, “Truth in Lending Act” (TILA)

Sec. 3(3) "Finance charge" includes interest, fees, service charges,

discounts, and such other charges incident to the extension of credit as the
Board may be regulation prescribe.

Note: This law applies to all persons who extend credit, who require as an
incident to extending credit, the payment of a finance charge [Sec. 3(4),
TILA].

581
“Credit” is defined in the TILA as “any loan, mortgage, deed of trust,
advance, or discount; any conditional sales contract; any contract to sell, or
sale or contract of sale of property or services, either for present or future
delivery, under which part or all of the price is payable subsequent to the
making of such sale or contract; any rental-purchase contract; any contract
or arrangement for the hire, bailment, or leasing of property; any option,
demand, lien, pledge, or other claim against, or for the delivery of, property
or money; any purchase, or other acquisition of, or any credit upon the
security of, any obligation of claim arising out of any of the foregoing; and
any transaction or series of transactions having a similar purpose or effect.
[Sec. 3(2), TILA]

Requirement for Disclosure

Under Sec. 4 (6) of the TILA, finance charges must be included in the
disclosure form prior to the consummation of transactions:

Sec. 4, TILA. Any creditor shall furnish to each person to whom credit is
extended, prior to the consummation of the transaction, a clear statement
in writing setting forth, to the extent applicable and in accordance with
rules and regulations prescribed by the Board, the following information:
1) the cash price or delivered price of the property or
service to be acquired;
2) the amounts, if any, to be credited as down payment
and/or trade-in;
3) the difference between the amounts set forth under
clauses (1) and (2);
4) the charges, individually itemized, which are paid or
to be paid by such person in connection with the
transaction but which are not incident to the extension
of credit;
5) the total amount to be financed;
6) the finance charge expressed in terms of pesos and
centavos; and
7) the percentage that the finance bears to the total
amount to be financed expressed as a simple annual
rate on the outstanding unpaid balance of the
obligation.

Under Section 4(6), "finance charge" represents the amount to be paid by the
debtor incident to the extension of credit such as interest or discounts,
collection fees, credit investigation fees, attorney’s fees, and other service
charges. The total finance charge represents the difference between (1) the
aggregate consideration (down payment plus installments) on the part of the
debtor, and (2) the sum of the cash price and non-finance charges [Sps. Silos
v. Philippine National Bank, G.R. No. 181045, July 2, 2014].

582
Should the requirement under the TILA be not complied with, the penalties
under Sec. 9 will apply:

Section 6, TILA
a) Any creditor who in connection with any credit transaction fails to
disclose to any person any information in violation of this Act or
any regulation issued thereunder shall be liable to such person in the
amount of P100 or in an amount equal to twice the finance charged
required by such creditor in connection with such transaction,
whichever is the greater, except that such liability shall not exceed
P2,000 on any credit transaction. Action to recover such penalty
may be brought by such person within one year from the date of the
occurrence of the violation, in any court of competent jurisdiction.
In any action under this subsection in which any person is entitled to
a recovery, the creditor shall be liable for reasonable attorney's fees
and court costs as determined by the court.
b) Except as specified in subsection (a) of this section, nothing
contained in this Act or any regulation contained in this Act or any
regulation thereunder shall affect the validity or enforceability of
any contract or transactions.
c) Any person who willfully violates any provision of this Act or any
regulation issued thereunder shall be fined by not less than P1,00 or
more than P5,000 or imprisonment for not less than 6 months, nor
more than one year or both.
d) No punishment or penalty provided by this Act shall apply to the
Philippine Government or any agency or any political subdivision
thereof.
e) A final judgment hereafter rendered in any criminal proceeding
under this Act to the effect that a defendant has willfully violated
this Act shall be prima facie evidence against such defendant in an
action or proceeding brought by any other party against such
defendant under this Act as to all matters respecting which said
judgment would be an estoppel as between the parties thereto

2. Under the Philippine Credit Card Industry Regulation Law

Sec. 5(k). Finance charges refer to the interest charged to the cardholder
on all credit card transactions in accordance with the terms and conditions
specified in the agreement on the use of the credit card;

Note: This law governs all credit card issuers, acquirers and all credit card
transactions.

In Relation to Credit Limit

Sec. 5(i). Credit card limit refers to the maximum total amount for
purchases, cash advances, balance transfers, and finance charges, service

583
 fees, penalties, and other charges which can be charged to the credit card;

Thus, in computing for credit limit, the finance charge is included.

Requirement for Disclosure

Section 11. Information to be Disclosed. – A credit card issuer shall
disclose to all credit cardholders and potential credit cardholders the
following information:
(a) Finance charges for unpaid amounts after payment due date

When Finance Charge is Imposed

Section 10. Imposition of Finance Charges. - Finance charges and other
fees arising from nonpayment in full or on time of the outstanding balance
shall be based on the unpaid amount of the outstanding balance.

How Finance Charge is Imposed

Credit card issuers shall only charge interest or finance charges arising from
the non-payment in full or on time of the outstanding balance based on the
unpaid amount of the outstanding balance as of statement cut-off date, but
excluding:
a) the current billing cycle's purchase transactions reckoned from the
previous cycle's statement cut-off date; and
b) deferred payments under zero-interest installment arrangements which are
not yet due Interest or finance charges shall be imposed on the unpaid
outstanding balance as of cut-off date each time a cardholder pays less than,
or does not pay on time, the outstanding balance stated in his/her statement
of account. Such interest or finance charge shall continue to be imposed until
the outstanding balance and applicable interest are fully paid.
For credit card cash advances, a cardholder may be charged cash advance
fees and finance charges on the date that the cash is obtained, subject to
terms and conditions under the credit card agreement or contract. For a loan
where the principal is payable in installments, interest per installment period
shall be calculated based on the outstanding balance of the loan at the
beginning of each installment period.
All credit card-related documents shall show repayment schedules in a
manner consistent with this provision. Marketing and advertising materials
shall likewise be consistent with this provision.
Note: Basis is Circular No. 1003, Series of 2018, “Guidelines on the
Establishment and Operations of Credit Card lssuers to Implement the
Philippine Credit Card Industry Regulations law.

e. Usury
Unlawful or Usurious Interest – Paid or stipulated to be paid beyond the
maximum fixed by law.

The Usury Law [Act No. 2566] – an act fixing rates of interests upon loans

584
and declaring the effect of receiving or taking usurious rates and for other
purposes. [Arevalo v. Dimayuga, G.R. No. 26218 (1927)]

CB Circular No. 905 abolished interest rate ceilings. With the promulgation
of such circular, usury has become “legally inexistent” as the parties can
now legally agree on any interest that may be charged on the loan.

Although usury is legally inexistent, courts will not hesitate to declare void
“excessive, iniquitous, unconscionable, exorbitant” interest. [Gomez-
Somera]

Elements of Usury (MR-IT)

1. A loan or forbearance of Money
2. An understanding between parties that the loan shall and may be Returned
3. An unlawful Intent to take more than the legal rate for the use of money
or its equivalent
4. The Taking or agreeing to take for the use of the loan of something in
excess of what is allowed by law.

Note: A usurious loan transaction is not a complete nullity but defective only
with respect to the agreed interest, i.e., as if no interest was stipulated.
[Carpo v. Chua, G.R. Nos. 150773 and 153599 (2005)] Hence, if the
principal obligation is the payment of a sum of money, the debtor will be
liable for the principal plus legal interest, following Article 2209.

F. DEPOSIT
A deposit is constituted from the moment a person receives a thing
belonging to another, with the obligation of safely keeping it and of
returning the same. [Art. 1962, CC]

Object of Deposit
Art. 1966 provides that only movable things may be the object of a deposit.
However, Art. 2006 provides that movable as well as immovable property
may be the object of sequestration or judicial deposit.

Principal Purpose
Safekeeping of the thing; if safekeeping is NOT the principal purpose, or is
only an accessory obligation, there is NO DEPOSIT but some other contract.
[Art. 1962, CC]

Consideration
A deposit is generally gratuitous, except:
1. If there is an agreement to the contrary
2. When the depositary is engaged in the business of storing goods [Art.
1965, CC]

585
Parties
1. Depositor: the person who delivers, or formally transfers, gives, or yields
possession or control of the movable property for purposes of safekeeping
2. Depositary: the person who receives it

Kinds Of Deposit
1. Extrajudicial
i. Voluntary – obligation arises as a consequence of contract;
ii. Necessary – obligation arises as a consequence of law or quasi-contract
2. Judicial – obligation arises as a consequence of a law allowing the
issuance of a judicial order constituting a deposit

1. Voluntary Deposit

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

perfected until the delivery of the thing. [Art. 1968, CC] A contract to
deposit, or an agreement to constitute a deposit, is consensual and binding.
A deposit may be made by two or more persons (who believe that they are
entitled to the thing deposited with a third person). The third person is to
deliver the thing to the one to whom it belongs. [Art. 1968, CC]

How Entered Into: Orally or in writing [Art. 1969, CC]

How Perfected: The deposit is perfected upon delivery, which is made by

the will of the depositor. [Arts. 1963 and 1968, CC]

a. Extinguishment

1. Loss or destruction of thing deposited, or

2. In case of a gratuitous deposit, upon the death of either the depositor or
depositary [Art. 1995]. The depositary is not obliged to continue with the
contract of deposit
3. By other modes provided in the CC, e.g. novation, merger, etc. [See
Art.1231, CC]

b. Obligations of a Depositary (KRB)

1. Keep the thing safely

2. Return the thing to the depositor, heirs, successors or person designated in
the contract, when required [Art. 1972, CC], together with all its products,
accessories and accessions. [Art. 1983, CC] at the place designated when
deposit was made. Otherwise, here the thing may be [Art. 1987, CC].

Exception to return on demand: there is no obligation to return on demand

when (a) the thing is judicially attached while in the depositary’s possession,
or (b) when depositary is notified of the opposition of a third person [Art.
1988, CC]
Note: The depositary must return the thing closed and sealed if it is delivered

586
in that condition [Art. 1981, CC]
3. Bear the expenses for preservation of the thing deposited if the deposit is
onerous [Art. 1992. CC]

Depositary NOT LIABLE FOR LOSS

General rule: The depositary is not liable in the event of loss. The required
degree of care however, is greater if the deposit is for compensation.

Exceptions: (NPC-FUTR)
1. Loss is through his fault or Negligence [Art. 1170, CC] or the negligence
of his employee [Art. 1973], even if the thing was insured [Art. 2207, CC];
2. Loss while in his Possession, ordinarily raises presumption of fault on his
part. [See Art. 1265, CC]
3. Loss arose from the Character of the thing deposited, and the depositary
was notified of, or was aware of such character at the time of the constitution
of the deposit [Art. 1993, CC]
4. Loss is through a Fortuitous event, and if
a. It is stipulated that depositary will be liable;
b. Depositary uses the thing without Depositor’s permission;
c. Depositary delays its return; or
d. Depositary allows others to use it. [Art. 1979, CC]
5. Loss when depositary Uses the thing
Exception: Use with permission or for preservation
6. Loss when depositary deposits the thing with a Third person

Exception: if deposit with a third person is allowed

Exception to the exception: if such third person is manifestly careless or

unfit [Art. 1973, CC];
7. Loss occurs and the depositary Receives money/replacement, he must
deliver such to the depositor [Art. 1990, CC]

c. Authority of Depositary (CC-UR)

1. Depositary may Change way of deposit if he may reasonably presume that

the depositor would consent if he knew the situation. He is to notify the
depositor thereof and wait for the latter’s decision, unless delay would cause
danger. [Art. 1974, CC]
2. Depositary is required to Collect on interest earned by certificates, bonds,
securities and instruments when it becomes due. [Art 1975, CC]
3. Depositary cannot make Use of the thing deposited unless with
depositor’s consent or its preservation requires its use. [Art 1977, CC]
4. Depositary may Return the thing to the depositor even before the time
designated, if there is justifiable reason not to keep it.
Exception: when the deposit is for valuable consideration [Art. 1989, CC]

d. Obligations of a Depositor

587
1. Depositor is obliged to reimburse the depositary for expenses incurred for
preservation in a gratuitous deposit. [Art.1992, CC]
2. Depositor is obliged to pay losses incurred due to the character of thing
deposited. [Art. 1993, CC]

Exceptions:
a. Depositor was not aware nor expected to know of the dangerous character
of the thing;
b. Depositor notified the depositary of such dangerous character;
c. Depositary was aware of the danger without advice from the depositor.
[Ibid.]

e. Authority of Depositor

1. When there are two or more depositors and they are not solidary and the
thing admits of division, one cannot demand more than his share [Art. 1985,
CC].
2. If he should lose his capacity to contract after having made the deposit,
the thing cannot be returned except to persons who may have administration
of his property and rights. [Art. 1986, CC].

f. Right of Retention

The depositary may retain the thing until the full payment of what may be
due him by reason of the deposit [Art. 1994, CC]

2. Necessary Deposit

Made in compliance with a legal obligation, or on the occasion of any

calamity, or by travelers with common carriers [Arts.1734-1735, CC], or by
travelers in hotels and inns [Arts.1996-2004, CC]

a. Kinds of Necessary Deposit (LCCH)

1. Deposit made in compliance with a Legal obligation, in which case it is

governed by the law establishing it, and in case of deficiency, the rules on
voluntary deposit, e.g., Arts. 538, 586 and 2104
2. Deposit taking place on the occasion of any Calamity [Art. 2168, CC]
Note: There must be a causal relation between the calamity and the
constitution of the deposit. In this case the deposit is governed by the rules
on voluntary deposit.
3. Deposit made by passengers with Common carriers. [Art.1754, CC]
4. Deposit made by travelers in Hotels or inns. [Art. 1998, CC]

b. Deposit by Travelers in Hotels and Inns

Before keepers of hotels or inns may be held responsible as depositaries with

588
regard to the effects of their guests, the following must concur:
1. Keepers or their employees have previously been informed about the
effects brought by the guests; and
2. The latter have taken the precautions prescribed regarding their
safekeeping. [Art. 1998, CC]

c. Extent of Liability Under Art.1998, CC

1. Those in hotel rooms which come under the term “baggage” or articles
such as clothing as are ordinarily used by travelers
2. Those lost or damaged in hotel annexes such as vehicles in the hotel’s
garage.

d. When Hotel-Keeper Liable

Regardless of the amount of care exercised, the hotel-keeper is liable when

—
1. The loss or injury to personal property is caused by his servants or
employees as well as by strangers [Art. 2000, CC].
2. The loss is caused by the act of a thief or robber done without the use of
arms and irresistible force. [Art. 2001, CC]

e. When Hotel-Keeper not Liable

1. The loss or injury is caused by force majeure, like flood, fire, [Art.2000,
CC] theft or robbery by a stranger—not the hotelkeeper’s servant or
employee—with the use of firearms or irresistible force [Art.2001, CC]

Exception: Hotel-keeper is guilty of fault or negligence in failing to provide

against the loss or injury from his cause. [Arts.1170 and 1174, CC]

2. The loss is due to the acts of the guests, his family, servants, visitors
[Art.2002, CC]
3. The loss arises from the character of the things brought into the hotel [Art.
2002, CC]
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. Such
kind of stipulation shall be void. [Art. 2003, CC]

f. Hotel-Keeper’s Right to Retention

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—
1. lodging,
2. supplies usually furnished to hotel guests [Art. 2004, CC].

The right of retention recognized in this article is in the nature of a pledge

created by operation of law.

589
3. Judicial Deposit Or Sequestration

Takes place when an attachment or seizure of property in litigation is

ordered. [Arts. 2005- 2009, CC] It is the only type of deposit that may
involve immovable property.

a. Nature and Purpose

It is auxiliary to a case pending in court. The purpose is to maintain the

status quo during pendency of the litigation or to insure the right of the
parties to the property in case of a favorable judgment.

b. Depositary of Sequestered Property

A person is appointed by the court [Art. 2007] with the obligations—

1. To take care of the property with the diligence of a good father of the
family. [Art. 2008, CC]
2. To continue in his responsibility until the controversy which give rise
thereto is ended unless the court so orders. [Art. 2007, CC]

c. Applicable Law

Judicial deposit law is remedial or procedural.

The Rules of Court shall govern matters not provided for in the CC. [Art.
2009, CC]

G. LEASE
1. Definition

Scope
The contract of lease may be of things, or of work and service. [Art. 1642,
CC]

Lease of Things
In the lease of things, one of the parties binds himself to give to another the
enjoyment or use of a thing for a price certain, and for a period, which may
be definite or indefinite. However, no lease for more than ninety-nine years
shall be valid. [Art. 1642, CC]

Lease of Work and Service

In the lease of work or service, one of the parties binds himself to execute a
piece of work or to render to the other some service for a price certain, but
the relation of principal and agent does not exist between them. [Art. 1644,
CC]

Limitation

590
Consumable goods cannot be the subject matter of a contract of lease, except
when they are merely to be exhibited or when they are accessory to an
industrial establishment. [Art. 1645, CC]

Record in the Registry of the Property

If the lease is to be recorded in the Registry of property, the following
persons cannot constitute the same without proper authority:
1. The husband with respect to the wife’s paraphernal real estate;
2. The father or guardian as to the property of a minor or ward;
3. And the Manager without special power [Art. 1647, CC]

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. [Art.
1648, CC]

2. Who are Qualified or Disqualified?

Those Disqualified
The persons disqualified to buy referred to in Articles 1490 and 1491, are
also disqualified to become lessees of the things mentioned therein [Art.
1646, CC]

Those disqualified under Art. 1490

● The husband and wife cannot sell property, except for
○ When a separation of property was agreed upon in the marriage
settlements; or
○ When there has been a judicial separation of property under Art. 191.

Those disqualified under Article 1941

● The following persons cannot acquire by purchase, even at a public or
judicial auction, either in person or through the mediation of another:
1. The guardian,
● The property of the person or persons who may be under his guardianship;
2. Agents
● The property whose administration or sale may have been intrusted to
them, unless the consent of the principal have been given;
3. Executors and administrators
● The property of the estate under their 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

591
● The property and rights in litigation or levied upon an execution before the
court within those jurisdiction or territory they exercise their respective
functions this prohibition includes the act of acquiring by assignment and
shall apply to lawyers, with respect to the property and rights which may be
the object of any litigation in which they may be the object of any litigation
in which they may take part by virtue of their profession
6. Others specially disqualified by law

3. Obligations of Parties

a. Obligations of a Lessor

(1) To deliver the thing which is the object of the contract in such a
condition as to render it fit for the use intended;
(2) To make on the same during the lease all the necessary repairs,
unless there is a stipulation to the contrary;
(3) To maintain the lessee in the peaceful and adequate enjoyment of the
lease [Art. 1654, CC]
(4) If lessee makes improvements in good faith, without altering form or
substance, lessor, upon the termination of the lease, shall pay the
lessee one-half of the value of the improvements at that time. If
payment is refused, lessee may remove the improvements, even
though the principal thing may suffer damage thereby. [Art. 1678,
CC]

Note: 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
1. Proportional reduction of the rent and,
2. A rescission of the lease [Art. 1655, CC]

In cases of business or industrial establishment, the lessor may continue

engaging in the same business or industry to which the lessee devotes the
thing leased, unless there is a stipulation to the contrary. [Art. 1656, CC]

Lessor is not obliged to answer for a mere act of trespass which a third
person may cause; however he or she shall have a direct action against the
intruder. [Art 1664, CC]

Prohibited Acts By the Lessor

Lessor cannot alter the form of the thing leased in such a way as to impair
the use to which the thing is devoted.

b. Obligations of a Lessee

(1) To pay the price of the lease according to the terms stipulated;

(2) To use the thing leased as a diligent father of a family, devoting it to

the use stipulated;

592
Note: In the absence of stipulation, the diligence required is 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 [Art. 1657, CC]

(4) To notify the lessor of usurpation or untoward act which any third
person may or will commit [Art. 1663, CC]

(5) To advise the lessor of need for repairs, to return the property leased
upon.
Note: If the lessor fails to make any urgent repairs, lessee may order the
repairs at the lessor’s cost. Lessee shall be liable for any damages caused by
his own negligence

(6) Lessee is obliged to tolerate the need for urgent repairs made during
his lease.
Note: If repairs last more than 40 days, rent may be reduced. If the work is
of such nature to render the dwelling uninhabitable, lessee may rescind the
contract [Art. 1662, CC]

(7) To Return the thing leased upon termination of lease just as he received
it, except for impairment due to lapse of time, ordinary wear and tear or
inevitable causes
Note: In the absence of stipulation, the law presumes that the lessee had
received it in good condition [Art. 1666, CC]

(8) To be Responsible for the loss or deterioration of the thing leased,

unless he proves it is without his fault [Art. 1667, CC]

Note: This does not apply to cases when destruction is caused by natural
calamity

(9) To be liable for any deterioration caused by members of his

household, guests or visitors [Art. 1668, CC]

4. Payment

In the absence of stipulation, Article 1251 shall be observed as regards the

place; and with respect to the time, the custom of the place shall be
followed.

General Rule: Payment shall be made in the place designated in the

obligation.

Exception: There being no express stipulation and if the undertaking is to

deliver a determinate thing, the payment shall be made where the thing

593
might be at the moment the obligation was constituted.

In any other case the place of payment shall be the domicile of the debtor.

5. Termination

The lease may terminate:

1. By the expiration of the period [Art. 1669];
2. By the total loss of the thing;
3. By the resolution of the right of the lessor, such as when the lessor is
usufructuary and the usufruct is terminated;
4. By the will of the purchaser or transferee of the things;
5. By rescission due to nonperformance of the obligations of one of the
parties [Art. 1659, CC]
● The aggrieved party may either ask for the rescission of the contract and
indemnification for damages, OR only ask for indemnification for damages
(the contract remains in force).
6. 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 [Art. 1660, CC]
● To terminate the lease, the lessee must notify 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.

6. Renewal

Implied renewal of lease

a. Occurs if at the end of the contract, the lessee continues enjoying the thing
leased for 15 days with the lessor’s acquiescence [Art. 1670, CC]
b. Period of new lease: Unless a notice to the contrary by either party has
previously been given, it is understood that there is an implied new lease for
the time established in Art. 1682 and 1687.
 Such period depends on the character of the property and the periods
of payment of the rent [Tolentino]. See Special Provisions.
c. The other terms of the original contract shall be revived.
d. Obligations contracted by a third person for the security of the principal
contract shall cease with respect to the new lease. [Art. 1672, CC]

7. Unlawful Detainer

If the lessee continues enjoying the thing after the expiration of the contract,
over the lessor's objection, he is subject to the responsibilities of a possessor
in bad faith. [Art. 1671, CC]

In ejectment cases where an appeal is taken, a preliminary mandatory

injunction may be granted to restore the lessor in possession if the higher
court is satisfied that:

594
 o the lessee's appeal is frivolous or dilatory, or
o the lessor's appeal is prima facie meritorious, by motion filed within
10 days from the time the appeal is perfected. [Art. 1674, CC]

Causes for judicial ejection of the lessee (Art. 1673)

i. When the period agreed upon, or that which is fixed for the duration of
leases under Articles 1682 and 1687, has expired
ii. Art. 1682: When the duration of the lease of rural land has not been
fixed
a. The duration is for all the time necessary to gather the fruits of the estate
which it may yield in one year, or which it may yield once, although two or
more years have to elapse for the purpose.
iii. Art. 1687: If the period for the lease has not been fixed
a. The duration is from year to year, if the rent is annual; from month to
month, if it is monthly; from week to week, if it is weekly; and from
day to day, if it is to be paid daily.
b. In case of monthly rent, and there is no period for the lease, the courts
may fix a longer term if the lessee was in possession for over one
year.
c. In case of weekly rent, the courts may fix a longer term if the lessee
was in possession for over six months.
d. In case of daily rent, the courts may fix a longer period if the lessee
was in possession for over one month.
iv. Lack of payment
v. Violation of any of the conditions in the contract
vi. When the lessee devotes the thing leased to any use or service not
stipulated which causes its deterioration, or if he does not observe his
obligations in Art. 1657

Note: The ejectment of tenants of agricultural lands is governed by special

laws.

Right to make use of periods

General Rule: The lessee has the right to make use of the periods
established in Articles 1682 and 1687.

Exceptions: Art. 1673

Right to repurchase (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.

8. Transfer of Lease

General Rule: The lessee cannot assign the lease without the consent of the
lessor.

595
Exception: There is a stipulation to the contrary. [Art. 1649, CC]

Rights of a Purchaser of Land Under a Lease [Art. 1676, CC]

General Rule: 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.

Exceptions:
1. There is a stipulation to the contrary in the contract of sale; or
2. When the purchaser knows of the existence of the lease.

If the buyer makes use of this right, the lessee may demand:
1. That he be allowed to gather the fruits of the harvest which corresponds to
the current agricultural year; and
2. That the vendor indemnifies him for damages suffered.

If the sale is fictitious, for the purpose of extinguishing the lease, the
supposed vendee cannot make use of the right to terminate the lease.
 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.

9. Sub-Lease

General Rule: 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. [Art. 1650, CC]

Liability of sublessee
Without prejudice to his obligation toward the sublessor, 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.
1651, CC]

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 extra-judicial 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. [Art. 1652, CC]

10. Warranties

General Rule: In a contract of sale, there is an implied warranty on the part

of the seller that:

596
1. 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; and
2. The thing shall be free from any hidden faults or defects, or any charge or
encumbrance not declared or known to the buyer.

Exception: Unless a contrary intention appears [Art. 1547, CC]

Note: Art. 1547 shall not be held to render liable a sheriff, auctioneer,
mortgagee, pledgee, or 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.

a. Eviction [Art. 1548, CC]

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.

b. Warranty against Defects [Art. 1676, CC]

General Rule: 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.

Exception: Said vendor shall not be answerable for:

● Patent defects;
● 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.

The provisions governing warranty, contained in the Title on Sales, shall be

applicable to the contract of lease. [Art. 1653(1), CC]

c. Where Return of the Price is Required [Art. 1653(2), CC]

Reduction shall be made in proportion to the time during which the lessee
enjoyed the thing.

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 d. Presumption of Good Condition [Art. 1666, CC]

General Rule: 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.

Exception: There is proof to the contrary.

11. Special Provisions

a. Special Provisions on the Lease of Rural Lands

a. Reduction of Rent

● 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 the fruits due to
ordinary fortuitous events;
○ Exception in case of Extraordinary
Fortuitous Events: He shall have such right in case of loss of more than one-
half of the fruits through extraordinary and unforeseen fortuitous events
○ Extraordinary Fortuitous events:
a. Fire;
b. War;
c. Pestilence;
d. Unusual Flood;
e. Locusts;
f. Earthquake;
g. Or others which are uncommon, and which contracting parties could not
have foreseen [Art. 1680, CC]
○ Exception to Exception: Unless there is stipulation to the contrary.
● The lessee shall also have NO right to the reduction of the rent if the fruits
are lost after they have been separated from their stalk, root, or trunk.
[Art. 1682, CC]

b. Duration of Lease if Not Fixed

● 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 may have elapsed for the purpose. [Art. 1682, CC]

c. Obligation of Lessees

● Outgoing Lessees
○ Shall allow the incoming lessee or the lessor use of the premises; and
other means necessary;
○ For the preparatory labor for the following year
 Incoming Lessee or Lessor
○ Must permit;

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○ The Outgoing Lessee;
○ To do whatever may be necessary for:
1. Gathering; or
2. Harvesting; and
3. Utilization;
○ Of the fruits;
○ All in accordance to the customs of the place. [Art. 1683, CC]

d. Land Tenancy On Shares

● Governed by special laws, the stipulations of the parties, the provisions on

partnership and by the customs of the place. [Art. 1684, CC]
● The tenant on shares cannot be ejected except in cases specific by law.
[Art. 1685, CC]

b. Special Provisions for the Lease of Urban Lands

i. Rules on Repair
● The customs 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, repairs are chargeable against the lessor
● Exception: Unless there is a special stipulation [Art. 1686, NCC]

ii. Period if Unfixed

● Depends on the rent agreed upon
○ If rent is annual, the lease is understood to be from year to year;
○ If the rent is monthly, lease is understood to be from month to month;
○ If rent is weekly, lease is understood to be from week to week
○ If rent is to be paid daily, lease is daily.
● Exception: Court may fix a longer period IF:
○ In case of monthly rent:
■ Lessee has occupied the premises for over a year
○ In case of weekly rent:
■ Lessee has been in possession for over six months
○ In case of daily rent:
■ Lessee has stayed in the place for over one month [Art. 1687, CC]

iii. Period of Lease of Furniture

When the lessor of a house, or part thereof, used as 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. [Art. 1688, NCC]

X. QUASI-CONTRACTS
A quasi-contract is that juridical relation resulting from a lawful, voluntary
and unilateral act, and which has for its purpose the payment of indemnity to

599
the end that no one shall be unjustly enriched or benefited at the expense of
another [Art. 2142, CC]

Based on presumed will or intent of the obligor dictated by equity and by the
principles of absolute justice [Padcom v. Ortigas Center, G.R. No. 146807
(2002)]

Unlike contracts, here there is absence of consent. It is voluntary and

unilateral [Casis]

A. NEGOTIORUM GESTIO
Negotiorum gestio takes place when a person voluntarily takes charge of
another’s abandoned business or property without the owner’s authority
[Art. 2144, CC]. As a rule, reimbursement must be made to the gestor (i.e.,
one who carried out the business) for necessary and useful expenses.

Requisites:
1. Person voluntary takes charge of;
2. the agency or management of a business or property belonging to another;
3. property or business is neglected or abandoned; and
4. manager has not been tacitly authorized by the owner.

The obligation does not arise:

a. When the property or business is not neglected or abandoned;
b. If in fact the manager has been tacitly authorized by the owner.

In the first case, the provisions of Articles 1317, 1403(1), and 1404
regarding unauthorized contracts shall govern.

In the second case, the rules on agency shall be applicable. [Art. 2144, CC]

1. Obligations of a Gestor

a. Observe the requisite standard of diligence

The officious manager must perform his duties with all the diligence of a
good father of a family

He must pay the damages which through his fault and negligence may be
suffered by the owner of the property/business under his management. The
courts may, however, increase or moderate the indemnity according to the
circumstances of each case. [Art. 2145, CC]

b. Liability in the management of the property

Solidary liability

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The officious manager is liable for the acts of the persons to whom he
delegated all or some of his duties. The responsibility of two or more
gestors shall be solidary, unless the management was assumed to save the
thing or business from imminent danger. [Art. 2146, CC]

Note: This is without prejudice to the direct obligation of the delegate to the
owner of the business.

Liability for fortuitous events

The officious manager is liable for any fortuitous event under the following
conditions:
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 of the owner
4. If he assumed management in bad faith [Art. 2147, CC]
5. If he is manifestly unfit to carry on the management
6. If by his intervention he prevented a more competent person from
taking up the management. [Art. 2148, CC]

Note: The gestor shall not be liable for (e) and (f) if the management was
assumed to save the property or business from imminent danger.

Personal liability
Be personally liable for contracts which he 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.

The gestor shall NOT be personally liable for such contracts, provided:
• The owner has expressly or tacitly ratified the management, or
• When the contract refers to things pertaining to the owner of the business.
[Art. 2152, CC]

2. Obligations of the Owner of the Property or Business

Although the management was not expresslyratified, the owner who enjoys
the advantagesof the same shall:

1. Be liable for the obligations incurred in his interest

2. Reimburse the gestor for the necessary and useful expenses and for the
damages the latter may have suffered in the performance of his duties

The above obligations shall be incumbent upon the owner if the management
had for its purpose the prevention of an imminent and manifest loss,
although no benefit may havebeen derived. [Art. 2150, CC]

The owner would still be liable, even if theowner did not derive any benefit
and therewas no imminent and manifest danger to the property or

601
business, provided:
1. The gestor has acted in good faith;and
2. The property or business is intact,ready to be returned to the owner.
[Art. 2151, CC]

3. Effect of Ratification

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. 2149, CC]

4. Extinguishment of Management

1. When the owner repudiates or puts an end thereto

2. When the gestor withdraws from the management, subject to Art. 2144
3. By the death, civil interdiction, insanity or insolvency of the owner or
the gestor. [Art. 2153, CC]

B. SOLUTIO INDEBITI
Solutio indebiti takes place when something is received when there is no
right to demand it, and it was unduly delivered through mistake. The
recipient has the duty to returnit [Art. 2154, CC].

1. Requisites

1. Something has been unduly delivered through mistake; and

2. Something was received when there was no right to demand it [Metrobank
v. Absolute Management Corp., G.R. No. 170498 (2013)]

This situation may cover payment by reason of a mistake in the construction

or application of a doubtful or difficult question of law [Art. 2155, CC].

The Government also comes within the scope of solutio indebiti. Tax
refunds are based on such. [CIR v. Acesite, G.R. No. 147295 (2007)]

2. When Debt Not Yet Due

If the payer was in doubt whether the debt was due, he may recover if he
proves that it was not due. [Art. 2156, CC]

3. Responsibility of Two or More Payees

When there has been payment of what is not due, their responsibility is
solidary. [Art. 2157, CC]

4. When Money or Thing Delivered is Owned by Third Person

602
The payee cannot demand that the payor prove his ownership of the thing
delivered.

Nevertheless, should he discover that the thing has been stolen and who its
true owner is, he must advise the latter.

If the owner, in spite of such information, does not claim it within the period
of one month, the payee shall be relieved of all responsibility by returning
the thing deposited to the payor.

If the payee has reasonable grounds to believe that the thing has not been
lawfully acquired by the payor, the former may return the same. [Art. 2158]

5. Liability of Payee

If in bad faith, he shall be liable:

1. For legal interest if a sum of money is involved, or
2. For the fruits received or which should have been received if the thing
produces fruits, and
3. For any loss or impairment of the thing for any cause, and
4. For damages to the person who delivered the thing, until it is recovered.
[Art. 2159, CC] If in good faith, he shall be liable:

1. For the impairment or loss of the thing certain and determinate or its
accessories and accessions insofar as he has thereby been benefited.
2. For the return of the price or assign the action to collect the sum if he
has alienated the same. [Art. 2160, CC]

6. Exemption from the Obligation to Restore the Payment Unduly

Made

A person who, believing in good faith that the payment was being made of a
legitimate and subsisting claim,
1. destroyed the document, or
2. allowed the action to prescribe, or
3. gave up the pledges, or
4. cancelled the guaranties for his right shall be exempt from the obligation
to restore.

The person who paid unduly may proceed only against the true debtor or the
guarantors with regard to whom the action is still effective. [Art. 2162, CC]

7. Presumption of Payment by Mistake, Defense

The presumption arises 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. [Art. 2163, CC]

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C. OTHER QUASICONTRACTS
a. 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 itappears that he gave it out of piety and without intention of
being repaid. [Art. 2164, CC]

b. 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. 2166, CC]

c. 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. [Art. 2165, CC]
Note: Only necessary expenses. 3rd person must claim [Casis].

d. 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. [Art. 2167, CC]

e. 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. 2168, CC]

f. 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. 2169, CC]

g. 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. 2170, CC]

h. The rights and obligations of the finder of lost personal property shall be
governed by Articles 719 and 720. [Art. 2171, CC]

i. The right of every possessor in good faith to reimbursement for necessary

and useful expenses is governed by Article 546. [Art. 2172, CC]

Note: Possessor in good faith may retain the thing until he has been
reimbursed [Casis].

604
j. When a third person, without the knowledge of the debtor, pays the debt,
the rights of the former are governed by Articles 1236 and 1237. [Art. 2173,
CC]
Note: Cannot compel creditor to subrogate him in his rights [Art. 1237, CC].

k. 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, anyone who objects to the plan and refuses to contribute to
the expenses but is benefited by the project as executed shall be liable to pay
his share of said expenses. [Art. 2174, CC]

l. Any person who is constrained to pay the taxes of another shall be

entitled to reimbursement from the latter. [Art. 2175, CC]

Note: The list of quasi-contracts in the Civil Code is not exhaustive. A

quasi-contractual relation may be forced upon the parties to prevent unjust
enrichment [PNB v. Court of Appeals, G.R. No. 97995 (1993)]

XI. LAND TITLES AND DEEDS

A. TORRENS SYSTEM
1. Concept and background
Land title
It is the evidence of the right of the owner or the extent of his interest, by
which he can maintain control, and as a rule, assert right to exclusive
possession and enjoyment of the property. [Peña]

Title and Certificate of Title Distinguished

Title Certificate of Title
Lawful cause or ground of It is a mere evidence of ownership;
possessing that which is ours. it is not the title to the land itself
[Castillo v. Escutin, G.R. No.
That which constitutes a just cause 171057 (2009).
of exclusive possession, or which is
the foundation of ownership of
property.

The title is a conclusive evidence of ownership and it cannot be attacked

collaterally.

Deed
A written instrument executed in accordance with law, wherein a person
grants or conveys to another certain land, tenements or hereditaments.
[Peña]

605
Elements of A Deed
a. Grantor
b. Grantee
c. Words of Grant
d. Description of the property involved
e. Signature of the grantor
f. At least two (2) witnesses
g. Notarial acknowledgment

Estate
An estate, strictly speaking, represents the nature, extent, degree, and
quantity of a person’s interest in land.

Types of Estates
a. Freehold Estate – Indicates title of ownership
1. Fee Simple – An absolute title; Absolute estate in perpetuity; Title to land
is conferred upon a man and his
heirs absolutely and without any limitation imposed upon the estate
2. Fee Tail – One designed to pass title from grantee to his heirs, in the
intent of the grantor being to keep the property in the grantee’s line of issue
3. Life Estate – One held for the duration of the life of the grantee; In some
cases, it may terminate earlier as by forfeiture
b. Less-than-Freehold Estate – Signifies some sort of right short of title
1. Estate for Years – In the nature of a lease short of title; grantee or lessee
takes over possession of the land for a period agreed upon but the grantor
retains the legal title to the property
2. Tenancy from period to period – Also in the nature of a lease which
may run from month to month or from year to year, with the peculiarity of
automatic renewal from time to time, unless expressly terminated by either
party
3. Tenancy at will – Another form of lease agreement where a person is
permitted to occupy the land of another without any stipulation as to period,
but either party reserves the right to terminate the occupation at will or at
any time

Land Registration
A judicial or administrative proceeding whereby a person’s claim of
ownership 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.

Note: Registration does not vest title. It is not a mode of acquiring

ownership but is merely evidence of such title over a particular property.

Nature of Land Registration

Judicial proceedings for the registration of lands throughout the Philippines
shall be in rem and shall be based on the generally accepted principles

606
underlying the Torrens system [Sec. 2, par. 1, PD 1529]

A proceeding in rem is when the object of the action is to bar indifferently

all who might be mined to make an objection of any sort against the right
sought to be established, and if anyone in the world has a right to be heard
on the strength of alleging facts which if true, show an inconsistent interest.
[Agcaoili]

The land registration is binding on the whole world because “by the
description in the notice (of initial hearing of the application for registration)
“To Whom It May Concern,” all the world are made parties defendant.”
[Aquino, citing Esconde v. Barlongay, G.R. No. L-67582 (1987)]

In a registration proceeding, the judgment of the court confirming the title,

and ordering its registration in one’s name constitutes, when final, res
judicata against the whole world [Ting v. Heirs of Liro, G.R. No. 16891
(2007)]

There is no need to personally notify the owners or claimants of the land

sought to be registered if it is involved in a land registration case since it is a
proceeding in rem. This gives automatic power and authority to the court
over the res. [Guido-Enriquez v. Victorino, et al., G.R. No. 180427 (2013)]

Laws Implementing Land Registration

a. Public Land Act [CA 141, as amended]
b. Property Registration Decree [PD 1529, as amended]
c. Cadastral Act [Act 2259, as amended]
d. Indigenous Peoples Rights Act of 1997 [RA 8371]
e. Emancipation Decree [PD 27, as amended]
f. Comprehensive Agrarian Reform Law of 1988 [RA 6657, as amended]

To simplify and streamline land registration proceedings, Presidential

Decree No. 1529 was issued on June 11, 1978, otherwise known as the
Property Registration Decree, governing registration of lands under the
Torrens system as well as the recording of transactions relating to
unregistered lands, including chattel mortgages. This Decree consolidates, in
effect, all pre-existing laws on property registration with such appropriate
modifications as are called for by existing circumstances. [Peña]

Purposes of Land Registration

Registration is merely a species of notice.The act of registering a document
is never necessary in order to give it legal effect as between the parties. The
system maintains a permanent record of landholdings, in order to prevent
fraudulent claims to land by concealment of transfers.

Another purpose is to notify and protect the interests of strangers to a

given transaction, who may be ignorant thereof. However, where a

607
document so registered is invalid or legally defective, registration will not in
any way render it valid or cure its defect.

Object of Registration
Only real property or real rights may be the object of registration under
the existing land registration laws.

Classification of Lands [Art. XII, Sec. 3, 1987 Constitution]

a. Agricultural
b. Forestland or timberland
c. Mineral Lands
d. National Parks

Classification of lands is an exclusive prerogative of the executive

department. In the absence of such classification, the lands remain as
unclassified until it is released therefrom and rendered open to disposition.
The President, through a Presidential Proclamation or Executive Order can
classify or reclassify land to be included or excluded from the public
domain. The DENR Secretary is also empowered to approve a land
classification and declare such land as alienable and disposable. [Agcaoili,
citing Fortuna v. Republic, G.R. No. 173423 (2014)]

Registrable lands are

a. Alienable public agricultural lands If the land is in the public domain,
the land must be classified as alienable and disposable. It must be classified
as such at the time of filing the application for registration. [Republic v. CA
and Naguit, G.R. No. 144057 (2005)]
b. Private lands

Non-registrable lands
Those found in the CC dealing with nonregistrable properties (e.g. property
of public dominion)

a. Torrens System

Torrens System
A system for registration of land under which, upon landowner’s
application, the court may, after appropriate proceedings, direct the issuance
of a certificate of title. [Black’s Law Dictionary]; those systems of
registration of transactions with interest in land whose declared object is,
under governmental authority, to establish and certify to the ownership of an
absolute and indefeasible title to realty, and to simplify its transfer. [Grey
Alba v. De la Cruz, G.R. No. L-5246 (1910)]

Background
The Torrens system was devised in 1857 by Mr. Torrens, a layman in South
Australia. In the Torrens system, title by registration takes the place of "title

608
by deeds" of the system under the "general" law. A sale of land, for example,
is effected by a registered transfer, upon which a certificate of title is issued.
The certificate is guaranteed by statute, and, with certain exceptions,
constitutes indefeasible title to the land mentioned therein. The object of the
Torrens system is to do away with the delay, uncertainty, and expense of the
old conveyancing system which relied on the correctness of a long series of
prior deeds, wills, and other documents for the validity of conveyances.

The Torrens system was introduced in the Philippines by Act No. 496, which
took effect on Jan. 1, 1903. This was later amended and superseded by PD
1529 which took effect on June 11, 1978.

The underlying principle of the Torrens system is security with facility in

dealing with land. It requires that the government issue an official certificate
of title attesting to the fact that the person named is the owner of the
property described therein, subject to such liens and encumbrances thereon
noted or the law warrants or reserves. The certificate of title is indefeasible
and imprescriptible and all claims to the parcel of land are quieted upon
issuance of said certificate. [Cruz v. Secretary of Environment and Natural
Resources]

Nature
Judicial in nature.

Purpose
The real purpose of the Torrens system of registration is to quiet title to land;
to put a stop forever to any question of the legality of the title, except claims
which may arise subsequent thereto. [Agcaoili]

It aims to decree land titles that shall be final, irrevocable and indisputable
[Government of the Philippine Islands v. Abural, GR No. 14167 (1919), and
to relieve the land of the burden of known as well as unknown claims. [SM
Prime Holdings, Inc. v. Madayag]

General Rule: A title once registered cannot be impugned, altered, changed,

modified, enlarged, or diminished.

Exception: Direct proceeding permitted by law, usually for the protection of

innocent third persons

b. Administration of the Torrens System

1. Land Registration Authority

Agency under the executive supervision of the DOJ charged with the
efficient execution of the laws relative to the registration of lands

Composition:

609
1. Administrator
2. 2 Deputy Administrators (as assistants)

Functions of LRA
1. Extend speedy and effective assistance to the Department of Agrarian
Reform, the Land Bank, and other agencies in the implementation of land
reform program of the government
2. Extend assistance to courts in ordinary and cadastral land registration
proceedings; and
3. 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

Public repository of records of instruments affecting registered or

unregistered lands and chattel mortgages in the province or city wherein
such office is situated.

Composition:
1. Register of Deeds
2. Deputy (as assistant)

Functions of Registers of Deeds:

1. Immediately register an instrument presented for registration dealing with
real or personal property which complies with the requisites for registration;
2. Shall see to it that said instrument bears the proper documentary stamps
and that the same are properly cancelled;
3. If the instrument is not registerable, 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.
4. Prepare and keep an index system which contains the names of all
registered owners and lands registered.

The function of the ROD with reference to registration of deeds,

encumbrances, instruments, and the like is ministerial in nature, provided
the applicant complies with all the requisites. [Baranda v. Gustilo, G.R. No.
81163 (1988)]

Note: When the ROD is in doubt as to the proper action to take on an

instrument or deed presented to him for registration, he should submit the
question to the Administrator of the LRA en consulta [P.D. 1529, Sec 117]

2. Certificate of title
The Torrens Title
Certificate of ownership issued by the Register of Deeds naming and

610
declaring the owner of the real property described therein free from all
liens and encumbrances, except such as may be expressly noted thereon or
otherwise reserved by law.

a. Original Certificate of Title (OCT) – It is the first certificate of title

issued in the name of the registered owner by the Register of Deeds covering
a parcel of land which had been registered under the Torrens System, by
virtue of judicial or administrative proceedings

b. Transfer Certificate of Title (TCT) – The subsequent certificate of title

pursuant to any deed of transfer or conveyance to another person. The
Register of Deeds shall make a new certificate of title and give the registrant
an owner’s duplicate certificate. The previous certificate shall be stamped
“cancelled.”

c. Patents – Whenever public land is by the Government alienated, granted

or conveyed to any person, the same shall be brought forthwith under the
operation of this Decree [PD 1529, Sec. 103, par. 1]
1. Patents only involve public lands which are alienated by the
Government pursuant to the Public Land Act [CA 141, as
amended]
2. The patent (even if denominated as a deed of conveyance) is
not really a conveyance but a contract between the grantee and
the Government and evidence of authority to the Register of
Deeds to make registration.
3. The act of registration is the operative act to affect and convey
the land.

Probative Value
A Torrens Certificate of Title is valid and enforceable against the whole
world. It may be received in evidence in all courts of the Philippines, and
shall be conclusive as to all matters contained therein, principally the
identity of the owner of the covered land thereby and identity of the land.

A Torrens title, once registered, cannot be defeated, even by adverse,

open and notorious possession. A registered titleunder the Torrens system
cannot be defeated by prescription. The title, once registered, is notice to the
whole world. All persons must take notice. No one can plead ignorance of
the registration. [Egao v. CA, G.R. No. L-79787 (1989)]

a. Effect of Registration under the Torrens System

Land is placed under the operation of the Torrens system

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

611
1. It is an elemental rule that a decree of registration bars all claims and
rights which arose or may have existed prior to the decree of registration. By
the issuance of the decree, the land is bound and title thereto quieted, subject
only to certain exceptions under the property registration decree. [Heirs of
Alejandra Delfin, namely, Leopoldo Delfin, et al. v. Avelina Rabadon, G.R.
No. 165014 (2013)]
2. Exceptions:
• Those claims noted on the certificate
• 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 in order to be valid
• Unpaid real estate taxes levied and assessed within 2 years
immediately preceding the acquisition of any right over the land by an
innocent purchaser for value

Title to the land becomes non-prescriptible:

1. Even adverse, notorious, and continuous possession under claim of
ownership for the period fixed by law is ineffective against a Torrens title
[JM Tuason and Co. Inc. v. CA, G.R. No. L-41233 (1979)]
2. The fact that the title to the land was lost does not mean that the land
ceased to be registered land before the reconstitution of its title. It cannot
perforce be acquired by prescription. [Ruiz v. CA, 1977]

Land becomes incontrovertible and indefeasible. A decree of registration

and registered title cannot be impugned, enlarged, altered, modified, or
diminished either in collateral or direct proceeding after the lapse of the 1-
year period prescribed by the law.

Exceptions:
1. If previous valid title of the same land exists
2. When the land covered is not capable of registration
3. When acquisition of certificate is attended by fraud

Torrens certificate is presumed valid and devoid of flaws

Note: Registration is not equivalent to legal title. Under the Torrens system,
registration only gives validity to the transaction or creates a lien upon the
land. It merely confirms, but does not confer, ownership [Lu v. Manipon,
G.R. No. 147072 (2002)]

Effect of Non-Registration
If a purchaser, mortgagee or grantee should fail to register his deed the
conveyance, considering our existing registration laws, it shall not be valid
against any person unless registered.

Exceptions:
a. The grantor,

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b. His heirs and devisees, and
c. Third persons having actual notice or knowledge thereof.

It is a settled rule that lands under a Torrens title cannot be acquired by

prescription or adverse possession. Section 47 of P.D. No. 1529, the Property
Registration Decree, expressly provides that no title to registered land in
derogation of the title of the registered owner shall be acquired by
prescription or adverse possession. [Dream Village Neighborhood
Association, Inc., represented by its Incumbent President Greg Seriego v.
Bases Conversion Development Authority, G.R. No.192896 (2013)]

Dealings in Land before Issuance of Decree

With the filing of an application for registration, the land described therein
does not cease to become open to any lawful transaction. If the transaction
takes place before the issuance of the decree of registration, Section 22 of
PD 1529 provides that the instrument is to be presented to the RTC, together
with a motion praying that the same be considered in relation with the
pending application.

However, if the motion is filed after the decision of adjudication has become
final but before the issuance of the decree by the Administrator of Land
Registration Authority, the court shall require the interested party to pay the
fees prescribed as if such instrument had been presented for registration in
the office of the Register of Deeds. [Peña]

Laches, When Applicable

Laches sets in if it would take 18 years for a person to file an action to annul
the land registration proceedings, especially so if the registrant has already
subdivided the land and sold the same to innocent third parties. A party’s
long inaction or passivity in asserting his rights over disputed property
precludes him from recovering the same. [Heirs of Teodoro dela Cruz v. CA,
G.R. No. 1117384 (1998); Aurora Ignacio v. Valeriano Basilio, et al., G.R.
No. 122824 (2001)]

B. AGRARIAN TITLES AND ANCESTRAL LANDS AND DOMAINS

Concept of the Regalian Doctrine
A western legal concept that was first introduced by the Spaniards into the
country through the laws of the Indies and the Royal Cedulas whereby the
Philippines passed to Spain by virtue of “discovery” and conquest.
Consequently, all lands became the exclusive patrimony and dominion of
the Spanish Crown. [Agcaoili]

The present Constitution provides that, except for agricultural lands of the
public domain which alone may be alienated, forest or timber, and mineral
lands, as well as all other natural resources must remain with the State,
the exploration, development, and utilization of which shall be subject to its

613
full control and supervision albeit allowing it to enter into co-production,
joint venture, or production-sharing agreements, or into agreements with
foreign-owned corporations involving technical or financial assistance for
large-scale exploration, development, and utilization. [Secs. 2 and 3, Art.
XII; La Bugal- B’laan Tribal Association, Inc. v. Ramos, G.R. No. 127882
(2004)]

The Regalian Doctrine is enshrined in the 1987 Constitution [Art 12, Sec 2
& 3] which states that all lands of public domain belong to the State, thus
private title to land must be traced to some grant, express or implied,
from the State, i.e. The Spanish Crown or its successors, the American
Colonial government and thereafter the Philippine Republic

It does not negate native title to lands held in private ownership since time
immemorial. [Cruz v. Sec. of Environment and Natural Resources, G.R. No.
135385 (2000)]

Native title recognizes ownership of land by Filipinos independent of any

grant from the Spanish crown on the basis of possession since time
immemorial [cf: Cariño v. Insular Government, G.R. No. 2869 (1907)].
Lands embraced by native title are presumed to have been held prior to the
Spanish conquest and never to have been public land.

Effects of the Regalian Doctrine

a. All lands of public domain belong to the State, and that the
State is the source of any asserted right to ownership in land
and charged with the conservation of such patrimony [Republic
v. IAC, G.R. No. 71285 (1987)]
b. Under the Regalian doctrine, all lands of whatever classification
and other natural resources not otherwise appearing to be
clearly within private ownership are presumed to belong to
the State which is the source of any asserted right to ownership
of land. [Repubic v. Remnan Enterprises, Inc. G.R. No. 199310
(2014)]
c. The burden of proof in overcoming the presumption of State
ownership of the lands of the public domain is on the person
applying for registration (or claiming ownership), who must
prove that the land subject of the application is alienable or
disposable. To overcome this presumption, incontrovertible
evidence must be established that the land subject of application
(or claim) is alienable or disposable. [Valiao v. Republic, G.R.
No. 170757 (2011)]

1. Concept and registration of agrarian titles

Agrarian lands
Agrarian lands, otherwise called agricultural lands refer to land devoted to

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agricultural activity as defined in RA 6657 and not classified as mineral,
forest, residential, commercial or industrial land.

Agricultural activity
Refers to the cultivation of the soil, planting of crops, growing of fruit trees,
raising of livestock, poultry or fish, including the harvesting of such farm
products, and other farm activities and practices performed by a farmer in
conjunction with such farming operations done by person whether natural or
juridical.

Agrarian reform
Agrarian reform is defined as the redistribution of lands, regardless of crops
or fruits produced, to farmers and regular farmworkers who are landless,
irrespective of tenurial arrangement, to include the totality of factors and
support services designed to lift the economic status of the beneficiaries and
all other arrangements alternative to the physical redistribution of lands,
such as production or profit-sharing, labor administration, and the
distribution of shares of stocks, which will allow beneficiaries to receive a
just share of the fruits of the lands they work.

The 1987 Constitution; Section 4, Article XIII

Provides that The State shall:
1. Undertake an agrarian reform program founded on the right of
landless farmers to own directly or collectively the lands they
till and regular farmworkers to receive a just share of the fruits
thereof.
2. Encourage and undertake the just distribution of all agricultural
lands, subject to such priorities and reasonable retention limits
prescribed by the Congress, taking into account ecological,
developmental, or equity considerations, and subject to the
payment of just compensation. In determining retention limits,
the State shall respect the right of small land-owners.
3. Provide incentives for voluntary landsharing

P.D. 27, or The Tenant Emancipation

Doctrine
Provides for the emancipation of farmers of private agricultural lands
primarily devoted to rice and corn under a system of sharecrop or lease-
tenancy, whether classified as landed estate or not.

The tenant farmer shall be deemed owner of a portion constituting a family-

size farm of five (5) hectares if not irrigated and three (3) hectares if
irrigated. The landowner may retain an area of not more than seven (7)
hectares if such landowner is cultivating such area or will now cultivate it.

The value of the land shall be equivalent to two and one-half (2 1/2) times
the average harvest of three normal crop years immediately preceding the

615
promulgation of the Decree.

The total cost of the land, including interest at the rate of six (6) per centum
per annum, shallbe paid by the tenant in fifteen (15) years of fifteen (15)
equal annual amortizations.

In case of default, the amortizations due shall be paid by the farmers’

cooperative in which the defaulting tenant farmer is a member, with the
cooperative having a right of recourse against him; The government shall
guaranty such amortizations with shares of stock in government-owned and
governmentcontrolledcorporations.

No title to the land owned by the tenant-farmers under this Decree shall be
actually issued to a tenant farmer unless and until the tenantfarmer has
become a full-fledged member of a duly recognized farmer’s cooperative.

R.A. 6657 OR THE COMPREHENSIVE AGRARIAN REFORM LAW

OF 1988

Scope
1. All alienable and disposable lands of the public domain devoted to or
suitable for agriculture;
2. All lands of the public domain in excess of the specific limits as
determined by Congress in the preceding paragraph;
3. All other lands owned by the Government devoted to or suitable for
agriculture;
4. All private lands devoted to or suitable for agriculture regardless of the
agricultural products raised or that can be raised thereon.

Exemptions and exclusions

1. Lands actually, directly and exclusively used for parks, wildlife, forest
reserves, reforestation, fish sanctuaries and breeding grounds, watersheds
and mangroves;
2. Private lands actually, directly and exclusively used for prawn farms and
fishponds;
3. Lands actually, directly and exclusively used and found to be necessary
for:
a. national defense, school sites and campuses;
b. church sites and convents appurtenant thereto, mosque sites and Islamic
centers appurtenant thereto, communal burial grounds and cemeteries;

Valuation and mode of compensation

The LBP shall compensate the landowner in such amounts as may be agreed
upon by the landowner and the DAR and the LBP.

In determining just compensation, the cost of acquisition of the land, the

current value of the like properties, its nature, actual use and income, the

616
sworn valuation by the owner, the tax declarations, and the assessment made
by government assessors shall be considered.
The social and economic benefits contributed by the farmers and the
farmworkers and by the Government to the property as well as the
nonpayment of taxes or loans secured from any government financing
institution on the said land shall be considered as additional factors to
determine its valuation.

Registration of Agrarian Lands

Under PD No. 27, beneficiaries are issuedcertificates of land transfer (CLTs)
to entitle them to possess lands. Thereafter, they are issued emancipation
patents (EPs) after compliance with all necessary conditions. Such EPs,
upon their presentation to the Register ofDeeds, shall be the basis for the
issuance of the corresponding transfer certificates of title (TCTs) in favor of
the corresponding beneficiaries.

Under RA No. 6657, only certificates of land ownership award (CLOAs) are
issued, in lieu of EPs, after compliance with all prerequisites. Thereafter,
upon presentation of the CLOAs to the Register of Deeds, TCTs are issued
to the designated beneficiaries. CLTs are no longer issued.

The issuance of EPs or CLOAs to beneficiaries does not absolutely bar the
landowner from retaining the area covered thereby.

Under AO No. 2, series of 1994, an EP or CLOA may be cancelled if the

land covered is later found to be part of the landowner’s retained area.
[Agcaoili]

2. Concept and registration of ancestral lands and domains

A recognized exception to the theory of jura regalia, the ruling in Cariño v.
Insular Government (supra) institutionalized the recognition of the existence
of native title to land, or ownership of land by Filipinos by virtue of
possession under a claim of ownership since time immemorial and
independent of any grant from the Spanish Crown [Agcaoili].

Lands under native title are not part of publicdomain, “lands possessed by
an occupant and his predecessors since time immemorial, such possession
would justify the presumption that the land had never been part of the public
domain or that it had been private property even before the Spanish conquest
[Republic v. CA, G.R. No. 130174 (2000)].

Ancestral lands
Refers to land occupied, possessed and utilized by individuals, families and
clans who are members of the ICCs/IPs since time immemorial, by
themselves or through their predecessors-in-interest.

Ancestral domains

617
Refer to all areas generally belonging to ICCs/IPs comprising lands, inland
waters, coastal areas, and natural resources therein, held under a claim of
ownership, occupied or possessed by ICCs/IPs, by themselves or through
their ancestors, communally or individually since time immemorial,
continuously to the present except when interrupted by war, force majeure or
displacement by force, deceit, stealth or as a consequence of government
projects or any other voluntary dealings entered into by government and
private individuals/corporations, and which are necessary to ensure their
economic, social and cultural welfare.

It shall include ancestral lands, forests, pasture, residential, agricultural, and

other lands individually owned whether alienable and disposable or
otherwise, hunting grounds, burial grounds, worship areas, bodies of water,
mineral and other natural resources, and lands which may no longer be
exclusively occupied by ICCs/IPs but from which they traditionally had
access to for their subsistence and traditional activities, particularly the home
ranges of ICCs/IPs who are still nomadic and/or shifting cultivators.

Registration of Ancestral Lands Two modes of acquiring Ancestral

Lands and Ancestral Domains:
1. By native title over both ancestral lands and domains; or
2. By Torrens title under the Property Registration Decree with respect to
ancestral lands only.

Requisites for Registration of Ancestral Lands:

1. Applicant must be a member of the Indigenous ICCs/IPs
2. Possession of ancestral land must not be less than 30 years immediately
preceding the approval of IPRA on October 29, 1997
3. By operation of law, the land is already classified as alienable and
disposable even with a slope of 18% or more.
Hence, no need to submit a separate certification that the land has been
classified as alienable and disposable. (IPRA, Sec. 12.)

Certificate of Ancestral Domain Title (CADT) refers to a title formally

recognizing the rights of possession and ownership of ICCs/IPs over their
ancestral domains identified and delineated in accordance with this law [Sec.
3(c), IPRA]

Certificate of Ancestral Lands Title (CALT) refers to a title formally

recognizing the rights of ICCs/IPs over their ancestral lands.

Individually-owned ancestral lands, which are agricultural in character and

actually used for agricultural, residential, pasture, and tree farming purposes,
including those with a slope of eighteen percent (18%) or more, are hereby
classified as alienable and disposable agricultural lands [Sec. 12, IPRA]

Native title, however, is a right of private ownership particularly granted to

618
ICCs/IPs over their ancestral lands and domains. The IPRA categorically
declares ancestral lands and domains held by native title as never to have
been public land. [Cruz v. Sec. of Environment and Natural Resources,
supra]

C. CITIZENSHIP REQUIREMENT
1. Individuals
General Rule: Only Filipinos can acquire or hold title to private lands of
public domain. [Halili v. CA, G.R. No. 113539 (1998); Secs. 2 and 5, Art.
XII, 1987 Constitution]

Citizens of the Philippines may lease not more than five hundred hectares, or
acquire not more than twelve hectares thereof, by purchase, homestead, or
grant. [Art. XII, Sec. 3, 1987 Constitution]

The Krivenko Doctrine

The capacity to acquire private land is made dependent upon the capacity to
acquire or hold lands of public domain. Private land may be transferred or
conveyed only to individuals or entities ‘qualified to acquire lands of public
domain.’ [Bernas]

The 1935 Constitution reserved the right for Filipino citizens or corporations
at least sixty percent of the capital of which was owned by Filipinos. Aliens,
whether individuals or corporations, have been disqualified from acquiring
public lands; hence they have also been disqualified from acquiring private
lands. [Krivenko v. Register of Deeds, G.R. No. L- 630, 1947]

Exceptions
a. Aliens by way of hereditary succession [Sec. 7, Art. XII, 1987
Constitution]
b. Natural born citizens who have lost their citizenship:

For business use: limited to 5,000 sq. m. for urban land and 3 hectares for
rural land. In the case of married couples, the total area acquired by both of
them shall not exceed the maximum [RA No. 7042 as amended by RA No.
8179]

For residential purposes: limited to 1,000 sq m. for urban land and 1 hectare
for rural land. [BP 185, Sec. 2]

For married couples in either case: one of them may avail of the privilege
granted. If both shall avail of the same, the total area acquired by both of
them shall not exceed the maximum specified above.

But where a Filipino citizen naturalized as a citizen in a foreign country has

“reacquired” his Philippine citizenship under the terms of RA 9225 (2003)

619
otherwise known as the “Citizenship Retention and Re-acquisition Act of
2003,” the area limitations may no longer apply since the law expressly
grants him the same right, as any Filipino citizen, to “enjoy full civil and
political rights” upon the re-acquisition of his Filipino citizenship [Agcaoili].

c. Aliens, although disqualified to acquire lands of public domain, may

lease private land provided that such lease does not amount to a
virtual transfer of ownership. They may also be given an option to buy
property on the condition that he is granted Philippine citizenship.
[Llantino v. Co liong Chong, G.R. No. L-29663 (1990)]

d. Lands acquired by an American citizen prior the proclamation of

Philippine Independence on July 4, 1946 but after the passage of the
1935 Constitution may be registered, based on the ordinance
appended to the 1935 Constitution. [Moss v. Director of Lands, G.R.
No. L-27170 (1977)]

e. Land sold to an alien which is now in the hands of a naturalized

citizen can no longer be annulled [De Castro v. Tan, GR No. L-
31956]. The litigated property is now in the hands of a naturalized
Filipino. It is no longer owned by a disqualified vendee. The purpose
of the prohibition ceases to be applicable. [Barsobia v. Cuenco, G.R.
No. L-33048 (1982)]

f. Aliens may acquire condominium units and shares in condominium

corporations up to no more than 40% of the total and outstanding
capital stock of a Filipinoowned or controlled corporation. [RA 4726,
The Condominium Act, Sec. 5]

Under such circumstances, the ownership of the land is legally separated

from the unit itself, therefore the proscription against aliens owning real
property does not apply. [Hurst v. PR Builders, Inc., G.R. No. 156364
(2008)]

2. Corporations
General Rule: Private corporations may not hold alienable lands of the
public domain. [Sec. 3, Art. XII, 1987 Constitution]

Exceptions
a. By lease for a period not exceeding twentyfive years, renewable for not
more than twenty-five years and not to exceed one thousand hectares in area.
[Sec. 3, Art. XII, 1987 Constitution]

b. If the predecessors-in-interest of the corporation have been in possession

of the land in question since June12,1945 or earlier, then it may rightfully
apply confirmation of title to the land. The vested right has to be respected.
[Republic v. Intermediate Appellate Court and Acme, G.R. L-73002 (1986)]

620
Limitations to Ownership of Land by Corporations

a. For private lands:

1. At least 60% Filipino [Sec. 2, Art. XII, 1987 Constitution [Agcaoili]
2. Restricted as to extent reasonably necessary to enable it to carry out the
purpose for which it was created
3. If engaged in agriculture, it is restricted to 1,024 hectares

b. For patrimonial property of the State [Sec. 3, Art. XII, 1987 Constitution]
1. Lease only for a limited period of 25 years
2. Limited to 1,000 hectares
3. Applies to both Filipino and Foreign corporations
4. This limitation does not apply where the corporation acquired the land,
the same was already private land [Republic v. IAC and Acme Plywood &
Veneer co., Inc., G.R. No. 73002 (1986)]

A Corporation Sole may acquire and register private agricultural land. It

has no nationality, thus the constitutional proscription against private
corporations acquiring public agricultural lands will not apply. [RC
Apostolic Administrator of Davao v. LRC, G.R. No. L- 8415 (1957)] A
corporation sole, which consists of one person only, is vested with the right
to purchase and hold real estate and register the same in trust for the faithful
or members of the religious society or church for which the corporation was
organized.

A Religious Association Controlled by Non- Filipinos is not excepted by

the Constitutional provisions. To permit them to acquire agricultural lands
would be to drive the opening wedge to revive alien religious land-holdings
in the country. [Agcaoili]

D. ORIGINAL REGISTRATION
ORIGINAL REGISTRATION
This is a proceeding brought before the 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.

A decree of registration merely confirms, but does not confer ownership.

[City Mayor of Parañaque City v. Ebio, G.R. No. 178411, (2010)]
Registration does not vest title or give title to the land, but merely confirms
and thereafter protects the title already possessed by the owner, making it
imprescriptible by occupation of third parties. The registration does not give
the owner any better title than he has. He does not obtain title by virtue of
the certificate. He secures his certificate by virtue of the fact that he has a fee
simple title. [Legarda v. Saleeby, supra]

621
Original Distinguished From Subsequent
Original Registration Subsequent Registration
When right of ownership or title to Any transaction affecting such
land is for the first time made of originally registered land, if in
public record order, may be registered in the
Office of the Register of Deeds
concerned

a. Voluntary – by filing with the proper court under:

1. PD 1529, Property Registration Decree
2. CA 141, Public Land Act
3. RA 8371, IPRA

b. Involuntary – as in Cadastral Proceedings

● This is compulsory registration initiated by the government to adjudicate
ownership of the land
● Involuntary on the part of the claimant but they are compelled to
substantiate their claim or interest

1. Who may apply

a. Under Sec. 14, PD 1529:
1. Those who by themselves or through their predecessors-in-
interest, have been in open, continuous, exclusive and notorious
possession and occupation of alienable and disposable lands of
the public domain under a bona fide claim of ownership since
June 12, 1945, or earlier.
2. Those who have acquired ownership of private lands by
prescription under the provisions of existing laws.
3. Those who have acquired ownership of private lands or
abandoned river beds by right or accession or accretion under
the existing laws.
4. Those who have acquired ownership of land in any other
manner provided for by law [see: Republic represented by
Mindanao Medical Center v CA, G.R. No. 40912 (1976)]
• Land owned in common: ALL coowners shall file the application
jointly.
• Land has been sold under pacto de retro: the vendor a retro may file
an application for the original registration of the land, provided,
however, that should the period for redemption expire during the
pendency of the registration proceedings and ownership to the
property consolidated in the vendee a retro, the latter shall be
substituted for the applicant and may continue the proceedings.
• Land subject of a trust agreement: A trustee on behalf of his principal
may apply for original registration of any land held in trust by him,
unless prohibited by the instrument creating the trust.

622
b. Under Sec. 16, PD 1529; Land Applied for Registration by a Non-
Resident of the Philippines:
He shall file his application:
1. An instrument in due form;
2. Appointing a duly authorized representative or attorney-in-fact, whose
authority shall accompany the application;
3. Giving his full name and postal address; and
4. Shall therein agree that the service of any legal process in the
proceedings under or growing out of the application made upon his
agent or representative shall be of the same legal effect as if made
upon the applicant within the Philippines.

c. Under Sec. 12, CA 141; Any person who:

1. Is a citizen of the Philippines over the age of 18, or the head of a
family;
2. Does not own more than 24 hectares of land in the Philippines, or has
not had the benefit of any gratuitous allotment of more than 24
hectares of land since the occupation of the Philippines by the United
States
Note: they may enter a homestead of not exceeding 24 hectares of
agricultural land of the public domain

d. Under RA 8371:
1. Sec. 11 – Formal recognition of ancestral domains by virtue of Native
Title may be solicited by ICCs/IPs concerned
2. Sec. 12 – Option to secure certificate of title under CA 141 or Land
Registration Act 496
• Individual members of cultural communities with respect to
individually-owned ancestral lands who, by themselves or through
their predecessors-in -interest, have been in continuous possession and
occupation of the same in the concept of owner since time
immemorial or for a period of not less than thirty (30) years
immediately preceding the approval of this Act and uncontested by
the members of the same ICCs/IPs shall have the option to secure title
to their ancestral lands
• Option granted shall be exercised within 20 years from the approval
of RA 8371

JURISDICTION

Where to File: The court that should take cognizance of a registration case
is that which has territorial jurisdiction over the property.

General Rule: RTC of the province, city, or municipality where the

property is situated.

The RTC shall have exclusive jurisdiction over all applications original for

623
registration of title, with power to hear and determine all questions arising
upon such applications or petition. [Sec. 2, par. 2, P.D. No. 1529]

Exception: Delegated jurisdiction to the MTC, MeTC, and MCTC by the

Supreme Court in cadastral and land registration cases if:
a. There is no controversy over the land, OR
b. Its value is less than P100,000 [Sec. 34, BP 129]

2. Registration process and requirements

STEP 1: Survey
Survey of the land by the Bureau of Lands or a duly registered private
surveyor drawn on a tracing cloth plan.

Note: No plan of such survey, whether it be original or subdivision, may be

admitted in land registration proceedings until approved by the Director of
La nds [Sec. 1858, AdministrativeCode]

STEP 2: Filing of Application

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

a. Form of the application

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

b. Contents of the application:

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

624
 8. Original muniments of title, and
9. If the land is bounded by a public or private way or road [Sec. 15, PD
1529]

c. Documents to accompany the application [from Regulations in Ordinary

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

d. Land Registration Application Covering Two or More Parcels: An

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

e. Amendments to the Application

1. Sec. 19, PD 1529 permits the applicants to amend the application
including joinder, substitution, or discontinuance as to parties at any
stage of the proceedings upon such just and reasonable terms as the
court may order:
● Joinder – inclusion of additional applicants; amended by adding names of
new applicants;
● Substitution – replacement of the original party by another
● Discontinuance – removal of names of one or more applicants
2. However, substantial amendments shall be subject to the same
requirements of publication and notice as in an original application
under Sec. 23 of PD 1529. Such substantial amendments include:
● A change in the boundaries
● An increase in the area of the land applied for; or
● The inclusion of an additional land
3. Only where the original survey plan is amended during the
registration proceedings, by the addition of land not previous included
in the original plan, should publication be made in order to confer
jurisdiction on the court to order the registration of the area added

625
 after the publication of the original plan. If the amendment involves a
reduction in the original area, no new publication is required.
[Republic v. Court of Appeals and Ribaya G.R. No. 113549 (1996)]

f. Special Cases:
1. If the land is bounded by a road, the applicant must state in his
application if he claims any portion of the land within the limits of the
road, or if he likes to have the boundaries determined. [Sec. 20, PD
1529]
2. If the applicant is a non-resident, he shall appoint an agent or
representative who is a Philippine resident. [Sec. 16, PD 1529]
3. Intestate Estate of Don Mariano San Pedro v. CA G.R. No. 130727
(1996)]: A person claiming ownership of real property must clearly
identify the land claimed by him.
4. In re: Application for Land Registration v. Republic [G.R. No. 147359
(2008)] An applicant in a land registration case must prove the facts
and circumstances evidencing the alleged ownership of the land
applied for. General statements which are mere conclusions of law
and not factual proof of possession are unavailing. The deeds in its
favor only proved possession of its predecessors-ininterest as early as
1948. (The law now stands that a mere showing of possession for 30
years is not sufficient. Open, continuous, exclusive, and notorious
(OCEN) possession must be shown to have started on June 12, 1945
or earlier.)

STEP 3: Setting of the date for the initial hearing of the application by
the Court
a. The Court shall issue an order setting the date and hour of the initial
hearing within 5 days from filing of the application
b. The initial hearing shall be 45 – 90 days from the date of the order [Sec.
23, PD 1529]
● If the date of the initial hearing was set beyond the 90-day period, the
Court will still acquire jurisdiction where the applicant has complied with all
the requirements of the law. [Republic v. San Lorenzo Dev’t, G.R. No.
170724 (2007)]

STEP 4: Transmittal to the LRA

The application and the date of initial hearing together with all the
documents or other evidences attached thereto are transmitted by the Clerk
of Court to the Land Registration Authority (LRA).

STEP 5: Publication of a Notice of the Filing of the Application and date

and place of hearing
a. Publication shall be sufficient to confer jurisdiction upon the court. [Sec.
23, PD 1529]

b. It is done to charge the whole world of knowledge of the application of

626
the land involved, and invite them to take part in the case and assent and
prove their rights over the subject property thereof. [Agcaoili]

c. Form and contents of the notice:

1. Addressed to all persons appearing to have an interest in the land involved
2. Requires all persons concerned to appear in court on the date and time
indicated to show cause why the application for registration should not be
granted

d. The public shall be given notice of the initial hearing of the application by
publication
1. The Commissioner of Land Registration (CLR) shall cause it to be
published once in the Official gazette AND once in a newspaper of
general circulation
2. This is sufficient to confer jurisdiction to the court

e. It is not necessary to give personal notice to the owners or claimants of the

land sought to be registered to vest the court with authority over the res.
Land registration proceedings are actions in rem. [Director of Lands v. CA,
G.R. No. 102858 (1997)]

f. Once the registration court had acquired jurisdiction over a certain parcel,
or parcels, of land in the registration proceedings in virtue of the publication
of the application, that jurisdiction attaches to the land or lands mentioned
and described in the application. If it is later shown that the decree of
registration had included land or lands not included in the original
application as published, then the registration proceedings and the decree of
registration must be declared null and void insofar — but only insofar — as
the land not included in the publication is concerned. [Benin v. Tuason, G.R.
No. L-26127 (1974)]

STEP 6: Service of Notice

Service of notice upon contiguous owners, occupants and those known to
have interest in the property by the Sheriff;

a. Mailing:
1. Within 7 days from publication, the CLR shall mail a copy of the notice
2. Copies of the notice shall be mailed to:
● Every person named in the notice whose address is known.
● the Secretary of Public Highways, to the Provincial Governor, and to the
Mayor of the municipality or city, in which the land lies, if the applicant
requests to have the line of a public way or road determined
● Secretary of Agrarian Reform, the Solicitor General, the Director of
Lands, the Director of Mines and/or the Director of Fisheries and Aquatic
Resources, (as appropriate) if the land borders on a river, navigable stream
or shore, or on an arm of the sea where a river or harbor line has been
established, or on a lake, or if it otherwise appears from the application or

627
the proceedings that a tenant-farmer or the national government may have a
claim adverse to that of the applicant

b. Posting:
1. CLR shall cause the sheriff or his deputy to post the notice at least 14
days before the hearing:
2. In a conspicuous place on each parcel of land included in the application
and in a conspicuous place on the bulletin board of the municipal building of
the municipality or city in which the land or portion thereof is situated.
3. The court may also cause notice to be served to such other persons and in
such manner as it may deem proper.

c. Notice of application and initial hearing by publication is sufficient and

the mere fact that a person purporting to have a legitimate claim in the
property did not receive personal notice is not a sufficient ground to
invalidate the proceedings although he may ask for the review of the
judgment or the reopening of the decree of registration, if he was made the
victim of actual fraud. [Republic v. Abadilla, CA, G.R. No. 6902-R (1951)]

STEP 7: Answer
Filing of answer or opposition to the application by any person whether
named in the notice or not;

a. Who may file? Any person claiming an interest, whether named in the
notice or not.

b. When to file? On or before the date of initial hearing, or within such

further time as may be allowed by the court.

c. What shall it contain? It shall state all the objections and the interest
claimed by the party the remedy desired.

d. How shall it be made? It shall be signed and sworn to by him or by some

other duly authorized person. Sec. 25, PD 1529 provides for the requisites of
an opposition:
1. It shall set forth “all the objections to the application” and
2. It shall state the “interest claimed by the party filing the same”

e. Effect of Failure to Answer:

1. If no one appears/files an answer, upon motion, the court shall order a
default to be recorded.
2. By the description in the notice "To all Whom It May Concern", all the
world are made parties defendant and shall be concluded by the default
order.
3. Where an appearance has been entered and an answer filed, a default
order shall be entered against persons who did not appear and answer.
4. Absence of opposition does not justify outright registration. [Director of

628
Lands vs. Agustin, G.R. No. L-16173 (1921)]

f. Order of Default:

If no person appears and answers within the time allowed, the court shall,
upon motion of the applicant, no reason to the contrary appearing, order a
general default to be recorded and require the applicant to present evidence.
By the description in the notice “To all Whom It May Concern,” all the
world are made parties defendant and shall be concluded by the default
order.

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

g. Effects of Default:
1. With respect to the Applicant – he has the right to present or adduce
evidence ex parte
2. With respect to those covered by the default order – they have no legal
standing in court; therefore, they are no longer allowed to participate and no
opportunity to present evidence

h. For relief from an order of default, see Sec. 3, Rule 18, Rules of Court.

STEP 8: Hearing of the case by the court

a. Proof necessary in land registration
1. Proof that land has been declassified from the forest zone, is alienable or
disposable, and is registrable (e.g. Presidential proclamation, legislative acts.
2. Identity of the land (survey plan)
3. Possession and occupation of the land for the length of time and in the
manner required by law. [Sec. 4, PD 1073 amending Sec. 48(b) and (c) of
the Public Land Act]
4. If he claims private ownership not because of his possession, he must
prove the basis of such claim by submitting muniments of title.

b. Proving Private Ownership

1. Spanish titles are inadmissible and ineffective proof of ownership in land
registration proceedings filed
AFTER Aug. 16, 1976 [PD 892 as discussed in Santiago v. SBMA, G.R. No.
156888, (2006)]
2. Tax declaration and receipts are not conclusive but have strong probative
value when accompanied by proof of actual possession. [Municipality of
Santiago v. CA, G.R. No. L-49903 (1983)]
3. Other proofs such as testimonial evidence

c. Applicable procedural law:

1. Reception of evidence is governed by PD 1529

629
2. Rules of Court shall, insofar as not inconsistent with the provisions of the
Decree, be applicable to land registration and cadastral cases by analogy or
in a suppletory character and whenever practicable and convenient [Sec. 34,
PD 1529]
3. Sec. 27, PD 1529: The trial court shall see to it that all registration
proceedings are disposed within ninety days from the date the case is
submitted for decision. The Court may either:
1) Hear the parties and their evidence, or
2) Refer the case or any part thereof to a referee
● Referee shall hear the parties, receive their evidence, and submit his report
thereon to the Court within 15 days after termination of such hearing
● Hearing before a referee may be held at any convenient place within the
province or city as may be fixed by him and after reasonable notice thereof
shall have been served to the parties concerned
● Upon receipt of the report the Court may:
a. Adopt the same
b. Set aside the report
c. Modify the report
d. Refer back or recommit the case to the referee for presentation
of evidence
● According to Heirs of Mario Malabanan v. Republic [G.R. No. 179987
(2014)], the following matters must be established:
a. Issue of ownership;
b. Possession and occupation of the land;
c. Identity and description of the land;
d. That the land is alienable and disposable of the public domain; and
e. The applicant has acquired the land through any other modes of
acquiring ownership

STEP 9: Promulgation of Judgment by the Court

a. This is the adjudication, determination, and resolution of the issue of
ownership

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

630
 sufficient title proper for registration. [Sec. 29, PD 1529]

c. Finality of Judgment - Sec. 30, par. 1, PD 1529 provides that the

judgment becomes final upon the expiration of 30 days counted from receipt
of notice of judgment.

Note: This has been MODIFIED to the lapse of 15 days counted from
receipt of notice of judgment as per Sec. 39, BP 129

STEP 10: Issuance of the decree

a. If the court finds after hearing that the applicant or adverse claimant has
title as stated in his application or adverse claim and proper for registration,
a decree of confirmation and registration shall be entered

b. The Court declares the decision final and instructs the LRA to issue a
decree of confirmation and registration within 15 days from entry of
judgment

Note: It is not the court that issues the decree, but the LRA who issues the
decree of confirmation and registration. This duty to issue the decree of
registration does not prescribe. Republic v. Nillas, G.R. No. 159595 (2007)]

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

amendments of the same will not be allowed except in cases of clerical
errors

Court retains jurisdiction over the case until after the expiration of 1 year
from the issuance of the decree of registration. [Gomez v. CA, (1988)]

Note: While a decision in land registration proceeding becomes final after

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

STEP 11: Entry of the decree of registration

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

a. Decree is entered in the LRA

b. Every decree of registration shall:
1. Bear the day of the year, hour, and minute of its entry,
2. Be signed by the Administrator of the Land Registration
Authority in his ex officio capacity as Clerk of Court in land
registration matters
3. State whether the owner is:
● Married or unmarried, and if married, the name of the husband or wife,
provided that if the land adjudicated is conjugal property, it shall be issued
in the names of both spouses.

631
● If the owner is under disability, it shall state the nature of the disability,
● If the owner is a minor, his age
4. Contain a description of the land as finally determined by the
court,
5. Set forth the estate of the owner, andalso, in such manner as to
show their relative priority, all particular estates, mortgages,
easements, liens, attachments and other encumbrances,
including rights of tenant-farmer, if any, to which the land or
owner’s estate is subject,
6. Contain any other matter properly to be determined [Sec. 31,
PD 1529]

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

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

STEP 13: Transcription of the decree of registration

a. It is transcribed in the registration book of the Registrar of Land Titles and
Deeds
b. Registrar issues owner’s duplicate OCT of the applicant by the Registrar
of Land Titles and Deeds, upon payment of the prescribed fees.

3. Remedies
REMEDIES OF AN AGGRIEVED PARTY

An aggrieved party in a registration proceeding may avail himself of the

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

Motion for New Trial

The aggrieved party may move the trial court to set aside the judgment or
final order and grant a new trial for one or more of the causes materially
affecting the substantial rights of the said party. [Herrera]

a. Grounds:
1. Fraud, accident, mistake, or excusable negligence which ordinary

632
 prudence could not have guarded against and by reason of which such
aggrieved party has probably been impaired in his rights;
2. Award of excessive damages, or insufficiency of the evidence to
justify the decision; and
3. Newly discovered evidence which with reasonable diligence could
have not been discovered and produced at the trial and which if
presented would probably alter the result.
b. Period of filing: Within the 15 day period of perfecting an appeal. [Sec.
39, BP 129]

Appeal
Sec. 30, PD 1529 as amended by BP 129 provides that an appeal may be
taken from the judgment of the court as in ordinary civil cases. a. Modes of
appeal:
1. Ordinary appeal – Appeal to the Court of Appeals in cases decided by the
Regional Trial Court in the exercise of its original jurisdiction
2. Petition for review – Appeal to the Court of Appeals in cases decided by
the Regional Trial Court in the exercise of its appellate jurisdiction, in
accordance with Rule 42.
3. Appeal by certiorari – In all cases where only questions of law are raised
or involved, the appeal shall be to the Supreme Court, in accordance with
Rule 45.

b. Period of ordinary appeal: Within 15 days from notice of the judgment of

final order appealed from. Where a record on appeal is required, the
appellant shall file a notice of appeal and a record on appeal within 40 days
from notice of the judgment or final order. [Sec. 39, BP 129]

c. Perfection of appeal:
1. A party’s appeal by notice of appeal is deemed perfected as to him upon
the filing of the notice of appeal in due time. The Court loses jurisdiction
over the case upon the perfection of the appeals filed in due time and the
expiration of the time to appeal of the other parties.
2. A party’s appeal by record on appeal is deemed perfected as to him with
respect to the subject matter thereof upon the approval of the record on
appeal filed in due time. the court loses jurisdiction only over the subject
matter thereof upon the approval of the records on appeal filed in due time
and the expiration of the time to appeal of the other parties. [Sec. 9, Rule 41
of the Rules of Court]

Unlike ordinary civil actions, the adjudication of land in a cadastral or land

registration proceeding does not become final in the sense of
incontrovertibility until after the expiration of one (1) year after the entry of
the final decree of registration. As long as a final decree has not been entered
by the LRA and the period of 1 year has not elapsed from date of such
decree, the title is not finally adjudicated and the decision in the registration

633
proceeding continues to be under the control and sound discretion of the
court rendering it. [Gomez v. CA, G.R. No. 77770 (1988)]

Relief from Judgment

a. Grounds:
1. When a judgment or final order is entered, or any proceeding is thereafter
taken against a party in any court through accident, mistake, or excusable
negligence.
2. When a judgment or final order is rendered by any court in a case, and a
party thereto, by fraud, accident, mistake, or excusable negligence, has been
prevented from taking an appeal.

b. Period of filing: Within 60 days after the petitioner learns of the judgment,
final order, or other proceedings to be set aside, and not more than 6 months
after such judgment or final order was entered, or such proceeding was
taken.

Petition for Review of Decree of Registration

a. Requisites:
1. The petitioner has a real and dominical right;
2. That he has been deprived thereof (through fraud);
3. That the action is filed within one year from the issuance and entry of the
decree of registration; and
4. That the property has not been transferred to an innocent purchaser for
value. [Agcaoili, citing Walstrom v. Mapa, G.R. No. 38387 (1990)]
● An innocent purchaser for value is one who buys the property of another
without notice that some other person has a right to or interest in it, and who
pays a full and fair price at the time of the purchase or before receiving any
notice of another person’s claim [Rosales v. Burgos, G.R. No. 143573
(2009)]

b. To whom available: Only to an aggrieved party who has been deprived of

land or any estate or interest therein by decree of registration

c. When to file: Any time after the rendition of the court’s decision and
before the expiration of 1 year from entry of decree of registration
1. Upon expiration of the 1 year period, every decree becomes
incontrovertible
2. The Court held that the petition may be filed at any time after rendition of
the court’s decision (no need to wait for actual entry in the LRA) and before
expiration of one year from entry of the final decree of registration. [Rivera
v. Moran, G.R. No. L-24568 (1925); Director of Lands v. Aba, G.R. No. L-
45648 (1939)]

d. Sole and ONLY Ground: Actual Fraud

1. Actual fraud proceeds from an intentional deception practiced by means
of misrepresentation or concealment of material fact

634
2. The fraud must consist in an intentional omission of fact required by law
to be stated in the application or a willful statement of a claim against the
truth
3. Any fraudulent act of the successful party in a litigation which is
committed outside the trial of a case against the defeated party, or his agents,
attorneys or witnesses, whereby said defeated party is prevented from
presenting fully and fairly his side of the case. [Sterling Investment
Corporation v. Ruiz, G.R. No. L-30694 (1969)]

Action for Reconveyance

An action for reconveyance is the remedy granted to the rightful owner of
land which has been wrongfully or erroneously registered in the name of
another for the purpose of compelling the latter to transfer or reconvey the
land to him. [Esconde v. Barlongay, G.R. No. L-67583 (1987)]

Reconveyance is available not only to the legal owner of the property, but
also the the person with a better right than the person under whose name said
property was erroneously registered. [Gasataya v. Mabasa, G.R. No. 148147
(2007)]

1. When to file:
a. Before issuance of decree, or within/after 1 year from entry
b. If based on implied trust, 10 years;
c. If based on express trust and void contract, or if the plaintiff is
in possession of the land, imprescriptible
d. If based on fraud, 4 years from the discovery

2. It does not reopen proceedings but a mere transfer of the land from
registered owner to the rightful owner [Esconde v. Barlongay, supra]

3. Requisites:
a. The action must be brought in the name of a person claiming
ownership or dominical right over the land registered in the name of
the defendant;
b. The registration of the land in the name of the defendant was procured
through fraud or other illegal means;
c. The property has not yet passed to an innocent purchaser for value;
and
d. The action is filed after the certificate of title had already become final
and incontrovertible but within 4 years from the discovery of the fraud
[Balbin v. Medalla, G.R. No. L-46410 (1981)] or not later than 10
years in the case of an implied trust [New Regent Sources, Inc. v.
Tanjuatco, G.R. No. 168800 (2009)]

Quieting of Title
Quieting of title is the remedy for the removal of any cloud of doubt or
uncertainty with respect to real property.

635
1. Who may file: See Sec. 1, Rule 63, ROC
2. Requisites:
a. Plaintiff or complainant has a legal or an equitable title to or interest in the
real property subject of the action; and
b. The deed, claim, encumbrance or proceeding claimed to be casting a
cloud on his title must be shown to be in fact invalid or inoperative despite
its prima facie appearance of validity or legal efficacy.

Cancellation of Title
The cancellation of title is initiated by a private party usually in a case where
there are two titles issued to different persons for the same lot. [Agcaoili]

Action for Damages

An Action for damages can be availed of when reconveyance is no longer
possible as when the land has been transferred to an innocent purchaser for
value [Ching v. CA, G.R. No. L- 59731 (1990)]
An ordinary action for damages prescribes in 10 years after the issuance of
the Torrens title over the property.

Action for Compensation from the Assurance Fund

Requisites:
1. That a person sustains loss or damage, or is deprived of any
estate or interest in land;
2. On account of the bringing of land under the operation of the
Torrens System arising after original registration;
3. Through fraud, error, omission, mistake or misdescription in a
certificate of title or entry or memorandum in the registration
book;
4. Without negligence on his part; and
5. Is barred or precluded from bringing an action for the recovery
of such land or estate or interest therein. [Agcaoili]

Annulment of Judgment or Final Orders and Resolutions

A judgment of annulment shall set aside a questioned judgment or final
order or resolution in civil actions of the Regional Trial Courts for which the
ordinary remedies of new trial, appeal, petition for relief or other appropriate
remedies are no longer available through no fault of the petitioner.

a. Grounds:
1. Extrinsic Fraud
● Extrinsic fraud shall not be a valid ground if it was availed of, or could
have been availed of, in a motion for new trial or petition for relief. [Sec. 2,
Rule 47 of the Rules of Court]
2. Lack of Jurisdiction

Reversion
A reversion is instituted by the government, through the Solicitor General in

636
all cases where lands of public domain are held in violation of the
Constitution or were fraudulently conveyed. Any acquisition, conveyance,
alienation, transfer, or other contract made or executed in violation of any of
the provisions of sections 118, 121, 122, and 123 of the Public Land Act
may be the subject of reversion. [Sec. 24, C.A. No. 141 or The Public Land
Act, as amended]

The certificate of title issued pursuant to a void patent may be ordered

cancelled and the land reverted to the State through an action for reversion
filed by the Solicitor General. Similarly, an action for cancellation of title
and reversion may be filed by the Solicitor General where the land decreed
by the registration court is inalienable. This action cannot be barred by the
prior judgment of said court since it had no jurisdiction over the subject
matter. [Republic v. Court of Appeals and Alpuerto, G.R. No. L-45202
(1980)]

The Indefeasibility of title, prescription, laches, and estoppel do not bar

reversion suits.

Criminal Prosecution
Sec. 116 of the Land Registration Act:
Whoever knowingly swears falsely to any statement required to be made
under oath by this Act shall be guilty of perjury and liable to the penalties
provided by laws for perjury. 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. [People of the Philippines v. Cainglet, G.R. Nos. L-21493-94
(1966)

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

Unlike other kinds of registration, this is compulsory as it is initiated by the

government.

The government does not seek the registration of land in its name. The
objective of the proceeding is the adjudication of title to the lands or lots
involved in said proceeding. [Agcaoili]

Purpose:
1. To serve the public interest by requiring that the titles to any unregistered
lands be settled and adjudicated
2. To settle all disputes over the land; and

637
3. To remove all clouds over land titles, as far as practicable

Period of Filing: Extended up to December 31, 2020 [Sec. 2, R.A. 9176

(2002)]

Only unregistered lands may be the subject of a Cadastral Survey

The object of cadastral proceedings is to “settle and adjudicate” lands.
Private lands are not contemplated since ownership thereof had already been
finally determined and adjudicated. [Agcaoili]

When once decreed by a court of competent jurisdiction, the title to the land
thus determined is already res judicata, and binding on the whole world, the
proceeding being in rem. [Duran v. Olivia, G.R. No. L-16589 (1961)]

Cadastral Distinguished from Ordinary Registration

Ordinary Registration Cadastral Registration
Voluntary Compulsory
Applicant is a person claiming title Applicant is the Director of Lands
to the land
Usually involves private land; it All classes of land are covered
may also refer to public agricultural (private and public alienable lands)
lands if the object of the action is
judicial confirmation of imperfect
or incomplete title (in which case
CA 141 applies)
Applicant comes to court to confirm Government asks the court to settle
his title and seek registration of the and adjudicate the title of the land
land in his name
If the applicant fails to prove his In cadastral registration, if the
title, application may be dismissed applicant cannot prove that he is
without prejudice. [Santiago v. entitled to the land, the land
Santos, G.R. No. 31568, March 19, becomes public land.
1930; Verzosa v. Nicolas, G.R. No.
9227, February 10, 1915] However, the cadastral case
decision does not constitute res
If the judgment determines judicata as to bar even the same
ownership, then it is res judicata claimant from subsequently filing
upon the parties. an application for judicial
confirmation of title to the same
land, provided the requisites are
complied with. [Director of Lands
v. CA & Pastor, G.R. No. L-47847,
July 31, 1981]

PROCEDURE IN CADASTRAL REGISTRATION (Sec. 35 and 36, PD

1529)

638
STEP 1: Determination of the President that public interest requires title to
unregistered lands be settled and adjudicated.

President then orders the Director of Lands to conduct a cadastral survey.

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

STEP 3: Director of Lands gives notice to interested persons and to the

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

STEP 4: Publication of notice

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

A copy of the notice shall also be sent to:

a. Mayor of the municipality
b. Barangay captain
c. Sangguniang Panlalawigan and Sangguniang Bayan concerned

STEP 5: Geodetic engineers or other Bureau of Land employees in charge

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

STEP 6: Interested persons should communicate with the geodetic engineer

if he requests for any information about the land.

STEP 7: Actual survey and plotting of the land.

STEP 8: Director of Lands represented by Solicitor General shall institute

original registration proceedings.

1. Petition is filed in the appropriate RTC where the land is situated

2. Contents of the Petition:
a. That public interest requires that the title to such lands be
settled and adjudicated and praying that such titles be so settled
and adjudicated
b. Description of the lands
c. Accompanied by a plan thereof
d. Such other data as may serve to furnish full notice to the
occupants of the lands and to all persons who may claim any
right or interest therein

STEP 9: Publication, mailing posting

639
STEP 10: Hearing

Jurisdiction of the Cadastral Court:

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

STEP 11: Decision

STEP 12: Issuance of the decree and certificate of title

Note: Reopening of cadastral cases no longer allowed. RA 931, effective

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

Courts are thus without jurisdiction or authority to reopen a cadastral

proceeding since Dec. 31, 1968. [Aquino, citing Republic v. Estenzo, G.R.
No. L-35512 (1988)]

E. SUBSEQUENT REGISTRATION
SUBSEQUENT REGISTRATION
A proceeding where incidental matters after original registration may be
brought before the land registration court by way of motion or petition filed
by the registered owner or a party in interest

Necessity and Effects Of Registration [Sec. 51 and 52, PD 1529]

1. The deed, mortgage, lease, or other voluntary instrument, except a will

shall ONLY operate as:
a. A contract between the parties and
b. Evidence of authority to the Register of Deeds to make registration.
2. The act of registration shall be the operative act to convey or affect the
land insofar as third persons are concerned.
3. Also, by registration, it creates constructive notice to the world.

Registration of a document is ministerial on the part of the Register of

Deeds. The purpose of registering an instrument is to give notice thereof to
all persons, not to destroy or affect already registered rights over the land at
the time of the registration. Registration must first be allowed, and validity
or effect litigated afterwards. [Gurbax Singh Pabla & Co. v. Reyes, G.R. No.
L-3970 (1952)]

640
As between the parties to a contract of sale, registration is not necessary to
make it valid and effective, for actual notice is equivalent to registration.
[Agcaoili]

The act of registration creates a constructive notice to the whole world and
binds third persons. [Garcia v. Court of Appeals, G.R. No. L-56483 (1984)]

Voluntary Dealings Compared to Involuntary Dealings

Voluntary Dealings Involuntary Dealings
Refer to deeds, instruments, or Refer to the writs, orders, or
documents which are results of the processes issued by the court of
free and voluntaryacts of the parties record affecting registered land,
thereto. also other instruments which are
not willful acts of the registered
owner, executed without his
knowledge or consent.
1. Sale 1. Attachment
2. Real propertymortgage 2. Mandamus
3. Lease 3. Sale onexecution ofjudgment or
4. Pacto de retrosale sales for taxes
5. Extra-judicial settlement 4. Adverse claims
6. Free patent/homeste ad 5. Notice of lis pendens
7. Powers ofattorney 6. Expropriation
8. Trusts 7. Forfeiture
8. Auction sale on foreclosure of
mortgage
Presentation of the owner’s duplicate Entry in the daybook of ROD
certificate of title is required to issufficient notice toall persons
notify; mere entry in the day book of
the Register of Deeds (ROD) is
insufficient

An innocent purchaser for valueof Saberon v. Ventanilla, Jr., G.R. No.

registered land becomes the 192669 (2014): Entry thereof in the
registered owner the moment he day book of the ROD is sufficient
presents and files a duly notarized notice to all persons even if the
and valid deed of sale and the owner’s duplicatecertificate of title is
same is entered in the day book of not presented to the ROD.
the
ROD and at the same time he
surrenders or presents the owner’s
duplicate certificateof title
covering the land sold and pays the
registration fees.
Villasor v. Camon, R-C.A. No. Director of Lands v.Reyes, G.R. No.

641
 8551(1951): It is necessary L- 27594 (1976): Entryin the day
toregister the deed or instrument in book ofthe ROD is sufficient notice
the entry book of the ROD and a to all persons of an adverse claim
memorandum thereof shall also without the samebeing annotated at
bemade in the owner’s duplicate the back of the certificate of title
certificate
and its original
Sps. Labayen v.Serafica, G.R. No. Armed Forces and Police Mutual
178443 (2008): At the time of the Benefit Association, Inc. v. Santiago,
filing of the petition for G.R. No. 147559 (2008): Entry of the
cancellation of encumbrance, the attachment in the books is sufficient
lease contract already lost its notice to all persons.
efficacy. Thus, there is no basis to Hence, the fact that the deed of sale
save its annotation on defendant’s was already annotated is of no
title. moment with regard to third persons.
The fact that the cancellation of the The preference created by the levy
lease contract was forged is of no on attachment is not diminished by
moment, for there was no violation the subsequent registration of the
of a right. deed of sale.

1. Voluntary dealings
Voluntary dealings are deeds, instruments, documents which are the results
of free and voluntary acts of parties thereto. The act of registration shall be
the operative act to convey or affect the land insofar as third persons are
concerned. [Sec. 51, PD 1529]

INNOCENT PURCHASER FOR VALUE AND IN GOOD FAITH

An innocent purchaser for value refers to someone who "buys the property
of another without notice that some other person has a right to or interest in
it, and who pays a full and fair price at the time of the purchase or before
receiving any notice of another person’s claim." [Sps. Villamil v. Villarosa,
602 Phil. 932, 941 (2009)]

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, and
there was an honest intention to abstain from taking any unconscientious
advantage from another. [Duran v. IAC, G.R. No. L-64159 (1985), Fule v.
De Lagra]

Where innocent third persons relying on the correctness of the certificate of

title issued acquire rights over the property, the court cannot disregard such
rights and order the total cancellation of the certificate of title for that would
impair the public confidence in the certificate of title. [Duran v.IAC, G.R.
No. L- 64159]

MORTGAGEE IN GOOD FAITH

642
Even if the mortgagor is not the rightful owner of, or does not have the valid
title to the mortgaged property, the mortgagee in good faith is entitled to
protection. [Llanto v. Alzona, G.R. No. 150730, (2005)]

RELIANCE ON TITLE
General Rule: A person dealing with registered property need not go
beyond, but only has to rely on, the title. [Campillo v. PNB, G.R. No. L-
19890 (1969)]

He is charged with notice only of such burdens and claims which are
annotated on the title, for registration is the operative act that binds the
property.

Exception: When should a purchaser investigate?

1. Banks are required to exercise more care and prudence in
dealing with registered lands for their business is one affected
with public interest. The general rule does not apply. [Omengan
v. PNB, G.R. No. L161319 (2007)]
2. When the purchaser or mortgagee is a financing institution
[Dela Merced v. GSIS, G.R. No. 140398]
3. When party concerned has actual knowledge of facts and
circumstances that would impel a reasonably cautious man to
make inquiry. [Leung Yee v. Strong Machinery Company, G.R.
No. L-11658 (1918)]
4. When purchaser is in bad faith; e.g. he had full knowledge of a
previous sale.[Jamoc v. CA, 200 SCRA 74 (1991)]
5. Purchaser of land where the certificate of title contains a notice
of Lis pendens;
6. When a person buys land from one whose rights over the land
is evidencedonly by a deed of sale and an annotation in the
certificate of title but no TCT. [Quiniano v. CA, G.R. No. L-
28466 (1971)]

DOUBLE SALE
Where two certificates of title are issued to two different persons covering
the same parcel of land in whole or in part, the earlier in date must prevail as
between the original parties and in case of successive registration where
more than one certificate is issued over the land, the person holding title
under the prior certificate is entitled to the property as against the person
who relies on the second certificate. [National Housing Authority v. Laurito,
G.R. No. 191657 (2017)]

The purchaser from the owner of the later certificate and his successors
should resort to the vendor for redress, rather than molest the holder of the
first certificate and his successors, who should be permitted to rest secure in
their title. [Gatioan v. Gaffud, G.R. No. L-2153 (1969)

643
FORGED DEED
General Rule: A forged deed is an absolute nullity and conveys no title.

Exception: If there is good faith, a TCT has already been issued to the
purchaser, the latter being an innocent purchaser for value according to Sec.
39, PD 1529, then the title is good.

Registration of Voluntary Instruments in General Process of

Registration [Sec. 55, PD 1529]
a. The deed or other voluntary instrument must contain:
1. The following details of the grantee or other person acquiring or claiming
interest:
● Full name
● Nationality
● Residence
● Postal address
● Civil status (if married, include name in full of spouse)
2. If grantee is a corporation: It must contain a recital showing that such
corporation or association is legally qualified to acquire private lands

b. It must be executed in accordance with P.D. Sec. 112. It shall

be:
a. In a public instrument executed in accordance with law
b. Signed by the parties in the presence of at least 2 witnesses who
shall likewise sign thereon;
c. Where the instrument has for its object 2 or more parcels of
land, the number thereof shall also be stated in the
acknowledgment
d. Each page of the copy of the instrument, except the page where
the signatures already appear at the foot of the instrument, shall
be signed on the left margin thereof by the parties and their
witnesses, and sealed with the notarial seal. This fact as well as
the number of the pages shall be stated in the acknowledgment

c. File instrument creating or transferring interest and certificate

of title with Register of Deeds together with:
1. Owner’s duplicate
• Serves as conclusive authority from the registered owner to the Register of
Deeds to enter a new certificate or to make a new memorandum of
registration in accordance with the voluntary instrument presented. [Sec.
107. P.D. 1529]
• The issuance of a new transfer certificate without presentation of an
owner’s duplicate is unwarranted and confers no right on the purchaser
[PNB v. Fernandez, 1935]
2. Payment of fees & documentary stamp tax
3. Evidence of full payment of real estate tax

644
4. Document of transfer – 1 copy additional for city/provincial assessor

d. Payment of fees and DST

1. After payment of entry fee the Register of Deeds shall enter the
instruments in a primary entry book [Sec. 56, PD 1529].
2. The national, provincial and city governments are exempted from
payment of entry fees.
3. RA 456 prohibits registration of documents affecting real property which
is delinquent in the payment of real estate taxes. Further, if evidence of such
payment is not presented with 15 days from the date of entry of said
document in the primary entry book of the register of deeds the entry shall
be deemed cancelled.

e. Entry of the Instrument in the Primary Entry Book:

Instruments are regarded as registered from the time the
Register of Deeds enters them in the book.

f. TCT shall then be issued.

Registration of Dealings Less than Ownership [Sec. 54, PD 1529]

If an instrument does not divest ownership or title from owner or from
transferee of the registered owners, then NO NEW CERTIFICATE shall
be entered or issued.

Process of Registration for Dealings less than Ownership

a. Filing of the instrument with the Register of Deeds
b. A brief memorandum thereof is made:
1. On the certificate of title by the Register of Deeds and signed by him,
and
2. On the owner’s duplicate

Cancellation or extinguishment of such interests shall be registered in the

same manner.

Registration of Deeds of Sale and Transfers

a. If entire property is the subject [Sec. 57, PD 1529]
1. Owner executes and registers the deed which must be sufficient in
form.
2. A new certificate of title is issued and Register of Deeds prepares and
delivers to grantee his owner's duplicate certificate
3. Register of Deeds notes upon the OCT and the duplicate certificate
the date of transfer, the volume and page of the registration book
where the new certificate is registered
4. The original and the owner's duplicate of the grantor's certificate shall
be stamped "cancelled".
5. The deed of conveyance shall be filedand indorsed with the number
and the place of registration of the certificate of title of the land

645
 conveyed.

b. If only a portion of property is the subject [Sec. 58, PD 1529]

1. Include a plan which shows all the portions already subdivided with
verified and approved technical description.
2. That plan with the certified copy of the technical descriptions shall be
filed with the Register of Deeds for annotation in the TCT.
3. Register of Deeds shall issue a TCT and cancel the grantor's
certificate partially OR it may be cancelled totally and a new one
issued describing therein the remaining portion

c. If there are SUBSISTING encumbrances and annotations: They shall be

carried over in the new certificate or certificates; except when they have
been simultaneously discharged.

Registration of Mortgages and Leases [Sec. 60, PD 1529]

Sec. 60, PD 1529 provides that mortgages and leases shall be registered in
the manner provided in Sec. 54 (Dealings less than ownership).

The deed shall take effect upon the title only from the time of registration.

When a deed of mortgage is presented, the Register of Deeds will enter upon
the OCT and upon the owner’s duplicate a memorandum thereof and shall
sign said memorandum.

Registration of Powers of Attorneys [Sec. 64, PD 1529]

Powers of attorney and revocations shall be registered with the Register of
Deeds of the province or city where the land lies.

Any instrument revoking such power shall be registered in like manner.

Registration of Trusts
Registration is by memorandum:
a. A memorandum by the words “in trust” or “upon condition” or other apt
words is made if a deed or other instrument is filed in order to:
1. Transfer registered land in trust, or upon any equitable condition or
limitation expressed therein, or
2. Create or declare a trust or other equitable interests in such land without
transfer [Sec. 65, PD 1529]

b. A memorandum by the words “with power to sell,” or “power to

mortgage” or other apt words is made when: The instrument creating or
declaring a trust or other equitable interest contains an EXPRESS POWER
to sell, mortgage, or deal with the land in any manner

However, if an implied or constructive trust is claimed, person claiming such

must execute a sworn statement thereof with the Register of Deeds,
containing a description of the land, the name of the registered owner and a

646
reference to the number of the certificate of title. Such claim shall not affect
the title of a purchaser for value and in good faith before its registration.
[Sec. 68, PD 1529]

2. Involuntary dealings
Involuntary dealings refer to the writ, order, or process issued by the court of
record affecting registered land, also other instruments which are not willful
acts of the registered owner, executed without his knowledge or consent.

The entry thereof in the day book is sufficient notice to all persons of such
adverse claim. [Agcaoili]

The following involuntary dealings affecting registered land must be

registered:
a. Attachments [Sec. 69, PD 1529]
b. Adverse claim [Sec. 70, PD 1529]
c. Sale on execution or for taxes or for any assessment [Sec. 74, PD 1529]
d. Notice of lis pendens [Sec. 76, PD 1529]

ATTACHMENTS
Attachment is 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

Process of Registration
a. Copy of writ in order to preserve any lien, right or attachment upon
registered land shall be filed with the Register of Deeds where the land lies,
containing number of certificate of title of land to be affected or description
of land [PD 1529, Sec 69]

b. Register of Deeds to index attachment in names of both plaintiff &

defendant or name of person whom property is held or in whose name stands
in the records
1. If duplicate of certificate of title is not presented:
● Register of Deeds shall within 36 hours send notice to registered owner by
mail stating that there has been registration & requesting him to produce
duplicate so that memorandum be made
● If owner neglects or refuses – Register of Deeds shall report matter to
court.
2. Court after notice shall enter an order to owner to surrender certificate at
time & place to be named therein.

647
c. Although notice of attachment is not noted in duplicate, notation in book
of entry of Register of Deeds produces effect of registration already

Effect of registration of attachment

i. Creates real right
ii. Has priority over execution sale
iii. But between 2 attachments – one that is earlier in registration is preferred

Duty of Register of Deeds - Duty is ministerial but may refuse registration

in the following circumstances:
a. Title to land is not in the name of defendant

Exception: If petitioner is an heir

b. No evidence is submitted to show that he has present or possible future
interest in land

ADVERSE CLAIM
A claim is adverse when: [Sec. 70, par. 1, PD 1529]
a. Claimant’s right or interest in registered land is adverse to the registered
owner, and
b. Such right arose subsequent to date of original registration, and
c. No other provision is made in the Decree for the registration of such right
or claimant

Requisites for registration of an adverse claim:

a. The adverse claimant must give a statement of the following in writing:
1. His alleged right or interest
2. How and under whom such alleged right or interest is acquired
3. The description of the land in which the right or interest is
claimed and
4. The number of the certificate of title
b. The statement must be:
1. Signed by the adverse claimant
2. Sworn before a notary public
c. The statement must also state his residence or the place to which all
notices may be served upon him. [Lozano v Ballesteros, G.R. No. 49470
(1991)]

Duration of an adverse claim

a. 30 days from the date of registration.
b. After that the annotation of adverse claim may be cancelled upon filing of
a verified petition by the party in interest.

When cancelled, no second adverse claim based on the same ground may be
registered by the same claimant.

Adverse claim is not ipso facto cancelled after 30 days, hearing is necessary.

648
[Sajonas v. CA, G.R. No. 102377 (1996)]

SALE ON EXECUTION OR FOR TAXES OR FOR ASSESSMENT

Execution sale
1. To enforce a lien of any description on registered land, any execution
oraffidavit to enforce such lien shall be filed with Register of Deeds where
the land lies
2. Register in the registration book & memorandum upon proper certificate
of title as adverse claim or as anencumbrance
3. To determine preferential rights between 2 liens: priority of registrationof
attachment

Tax sale
1. Sale of land for collection of delinquent taxes and penalties due the
Government
2. In personam (all persons interested shall be notified so that they are given
opportunity to be heard)
a. Notice to be given to delinquent taxpayer at last known address
b. Publication of notice must also be made in English, Spanish &
localdialect & posted in a public & conspicuous place in place
whereinproperty is situated & at the mainentrance of the provincial
building
3. Sale cannot affect rights of other lienholders unless they are given the
right to defend their rights: due process must be strictly observed
4. Tax lien superior to attachment

Note: No need to register tax lien because it is automatically registered once

the tax accrues. However, sale of registered land to foreclose a tax lien needs
to be registered.

Process of Registration
1. Officer’s return shall be submitted to Register of Deeds together with
duplicate title
2. Register in the registration book
3. Memorandum shall be entered in the certificate as an adverse claim or
encumbrance
4. After the period of redemption has expired & no redemption (2 years
from registration of auction sale) is made: cancellation of title &
issuance of a new one
5. Before cancellation, notice shall be sent to registered owner: to
surrender title & show cause why it shall not be cancelled

Note: Actual knowledge of a person is equivalent to registration as against

him

LIS PENDENS

649
Literally means “pending suit.” It is an announcement to the whole world
that a particular real property is in litigation. The inscription serves as a
warning that one who acquires an interest over litigated property does so at
his own risk, or that he gambles on the result of the litigation over the
property. [Marasigan v. Intermediate Appellate Court, GR No. L-69393
(1987)]

It keeps the subject matter within the power of the court until the entry of
final judgment. It is not a lien or encumbrance, but a mere cautionary notice.
[Tanchoco v. Aquino, GR No. L-30670 (1987)]

When notice of lis pendens is proper:

1. To recover possession of real estate
2. To quiet title
3. To remove clouds upon the title thereof
4. For partition
5. Other proceedings of any kind in court directly affecting the title to land
or the use or occupation thereof or the buildings thereon

When notice of lis pendens is NOT proper:

1. Proceedings for the recovery of money judgments
2. Attachments
3. Proceedings on the probate of wills
4. Administration of the estate of deceased persons
5. Levies on execution
6. Foreclosure [Magdalena Homeowners Association, Inc. v. Court of
Appeals, GR No. 60323 (1990)]

Process of Registration: By Memorandum or Notice stating

1. The institution of the action or proceeding
2. The court wherein the same is pending
3. The date of the institution of the action
4. Reference to the number of the certificate of title
5. Adequate description of the land affected and registered owner thereof

Other parties who need to register

1. Assignee in involuntary proceeding for insolvency
a. Duty of the officer serving notice to file a copy of the notice to
the Register of Deeds where the property of debtor lies
b. Assignee elected or appointed by court shall be entitled to entry
of new certificate of registered land upon presentment of copy
of assignment with bankrupt’s certificate of title (duplicate)
c. New certificate shall note that it isentered to him as assignee or
trustee in insolvency proceedings
2. Government in eminent domain
a. Copy of judgment shall be filed in the Register of Deeds which states
description of property, certificate number, interest expropriated,

650
 nature of public use
b. Memorandum shall be made or new certificate of title shall be issued

Effect of registration
1. Impossibility of alienating the property in dispute during the pendency of
the suit – may be alienated but purchaser is subject to final outcome of
pending suit
2. Register of Deeds is duty bound to carry over notice of lis pendens on all
new titles to be issued

Cancellation of lis pendens [Sec. 77, PD 1529]

Under Sec. 4, Rule 13 of the 1997 Rules of Civil Procedure, a notice of lis
pendens may cancelled on the following grounds:
1. The annotation was for the purpose of molesting the title of the adverse
party;
2. The annotation is not necessary to protect the title of the party who caused
it to be recorded.

Requisites:
1. Before final judgment
2. Upon order of the court
3. Upon Action by the Register of Deeds at the instance of the party that
caused the registration or upon verified petition of the latter; and
4. Must be due to the grounds mentioned. [Pena]

F. NON-REGISTRABLE PROPERTIES
Sec. 2, Art. XII, 1987 Constitution. All lands of the public domain, waters,
minerals, coal, petroleum, and other mineral oils, all forces of potential
energy, fisheries, forests or timber, wildlife, flora and fauna, and other
natural resources are owned by the State.

Sec. 2, Art. XI, 1987 Constitution. With the exception of agricultural lands,
all other natural resources shall not be alienated.

The classification of public lands is an exclusive prerogative of the

Executive Department of the Government and not of the courts. In the
absence of such classification, the land remains as unclassified land until it
is released therefrom and rendered open to disposition. [Aquino, citing
Director Lands and Director of Forest Development v. CA, G.R. No. L-
58867 (1984)]

651
Civil Code provisions dealing with nonregistrable properties

1. Properties of public dominion [Art. 420, CC]

i. Those intended for public use, such as roads, canals,

rivers, torrents, ports and bridges constructed by the
State, banks, shores, roadsteads, and othersof similar
character;
ii. Those which belong to the State, without being for public
use, and are intended for some public service or for the
development of the national wealth.

2. Waters under Art. 502, CC

(i) Rivers and natural beds

(ii) Continuous or intermittent waters of springs and brooks running in their

natural beds and the beds themselves

(iii) Waters rising continuously or intermittently on lands of public dominion

(iv) Lakes and lagoons formed by Nature on public lands, and their beds

(v) Rain waters running through ravines or sand beds, which are also part of
public dominion;

(vi) Subterranean waters on public lands

(vii) Waters found within the zone of operation of public works, even if
constructed by a contractor

(viii) Waters rising continuously or intermittently on lands belonging to

private persons, to the State, to a province, or to a city or municipality from
the moment they leave such lands

(ix) The waste waters of fountains, sewers, and public establishments

Specific kinds of non-registrable properties or lands

1. Forest or timberland, public forest, forest reserves

2. National parks – Under the present Constitution, national
parks are declared part of the public domain, and shall be
conserved and may not be increased nor diminished, except by

652
 law [Rep. v AFP Retirement and Separation Benefits System,
G.R. No. 180463 (2013)]
3. Mangrove swamps - Mangrove swamps or mangroves should
be understood as comprised within the public forests of the
Philippines as defined in Sec. 1820, Administrative Code of
1917. [Director of Forestry v. Villareal, G.R. No. L-32266
(1980)]
4. Mineral lands - Both under the 1987 Constitution and Sec. 2 of
the Public Land Act, mineral lands are not alienable and
disposable. [Lepanto Consolidated Mining Co. v. Dumyung,
G.R. No. L-31666 (1979)]
5. Foreshore land and seashore and reclaimed lands- Seashore,
foreshore, and/or portions of territorial waters and beaches,
cannot be registered. Even alluvial formation along the seashore
is part of public domain. [Aquino, citing Dizon v. Rodriguez,
G.R. Nos. L-20300-01 (1965)]
6. Lakes - Lakes are part of public dominion. [Art. 502(4), CC]
7. Creeks and Streams – A dried up creek bed is property of
public dominion [Fernando v. Acuna, G.R. No. 161030 (2011)]
8. Military or Naval Reservations – The reservation made
segregates it from the public domain and no amount of time in
whatever nature of possession could have ripen such possession
into private ownership. [Republic v. Marcos, G.R. No. L-32941
(1973)]
9. Watershed - The Constitution expressly mandates the
conservation and utilization of natural resources, which
includes the country’s watershed. [Tan v. Director of Forestry,
G.R. No. L-24548, (1983)]
10.Grazing lands - While the 1987 Constitution does not
specifically prove that grazing lands are not disposable, yet if
such lands are part of a forest reserve, there can be no doubt
that the same are incapable of registration. [Aquino, citing
Director of Lands v. Rivas, G.R. No. L- 61539 (1986)]
11.Previously titled land - Proceeds from the indefeasibility of
the Torrens title.
12.Alluvial deposit along river when manmade - Such deposit is
really an encroachment of a portion of the bed of the river,
classified as property of the public domain under Art. 420, par.
1 and Art. 502 (1) of the CC, hence not open to registration.

653
 [Republic v. CA, G.R. No. L- 61647 (1984)]
13.Reservations for public and semi-public purposes – Sec. 14,
Chapter 4, Book III of EO No. 292 provides that the President
shall have the power to reserve for settlement or public use, and
for specific public purposes, any of the lands of public domain,
the use of which is not otherwise directed by law.

The land registration court has no jurisdiction over non-registrable property

and cannot validly adjudge the registration of title thereof in favor of a
private applicant. [Peña] Thus, where it has so been adjudged, the river not
being capable of private appropriation or acquisition by prescription, the title
thereto may be attacked, either directly or collaterally, by the State which is
not bound by any prescriptive period provided by the Statute of Limitation.
[Peña, citing Martinez v. CA, G.R. No. L-31271 (1974)]

Patrimonial Property

Refers to property that is open to disposition by the Government, or

otherwise property pertaining to the national domain, or public lands.

The property of provinces, cities, and municipalities is divided into property

for public use and patrimonial property. 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, and
municipalities. All other property possessed by any of them is patrimonial
and shall be governed by the Civil Code, without prejudice to the provisions
of special laws. [Art. 424, CC]

G. DEALINGS WITH UNREGISTERED LANDS

No deed, conveyance, mortgage, lease, or other voluntary instrument
affecting land not registered under the Torrens system shall be valid, except
as between the parties thereto, unless such instrument shall have been
recorded in the manner herein prescribed in the office of the Register of
Deeds for the province or city where the land lies. [Sec. 113, par. 1, PD
1529]

Effects of Transactions Covering Unregistered Land

654
1. As between the parties – The contract is binding and valid even if not
registered
2. As among third persons – There must be registration for the transaction
to be binding against third persons

Primary Entry Book and Registration Book

The Register of Deeds for each province or city shall keep a Primary Entry
Book and a Registration Book.
1. The Primary Entry Book shall contain, among other particulars:
a. Entry number
b. Names of the parties
c. Nature of the document
d. Date, hour and minute it was presented and received
2. The Registration Book – Provides spaces whereon the annotation is
made after the instrument has been entered in the Primary Entry Book

Process of Registration
1. Registration is by way of annotation
2. The instrument dealing with unregistered land is presented before the
Register of Deeds
3. The Register will then determine if it can be registered:
a. If, on the face of the instrument, it appears that it is sufficient in law,
the Register of Deeds shall forthwith record the instrument
b. In case the Register of Deeds refuses its administration to record, he
shall advise the party in interest in writing of the ground or grounds
for his refusal

The latter may appeal the matter to the Commissioner of Land Registration.

Recording by the Register of Deeds is ministerial.

Recording made under this section shall be without prejudice to a third party
with a better right. [Sec. 113, PD 1529]

Better right
Refers to a right which must have been acquired by a third party
independently of the unregistered deed, such, for instance, as title by
prescription, and that it has no reference to rights acquired under that
unregistered deed itself. [Peña]

Involuntary Dealings in Unregistered Lands

PD 1529 now permits the registration of involuntary dealings in unregistered
lands.

Tax sale, attachment and levy, notice of lis pendens, adverse claim and other
instruments in the nature of involuntary dealings with respect to unregistered
lands, if made in the form sufficient in law, shall likewise be admissible to

655
record under Sec. 113. [Sec. 113 (d), PD 1529]

XII. TORTS

A. PRINCIPLES
Tort
A private or civil wrong violating a right for which the law provides a
remedy in the form of damages

Elements
1. Duty
2. Breach
3. Injury; and
4. Proximate Causation [Garcia v. Salvador, G.R. No. 168512 (2007)]

Definition of Quasi-Delict (also known as culpa aquiliana)

Art. 2176, CC. Whoever by act or omission causes damage to another,
there being fault or negligence, is obliged to pay for the damage done.
Such fault or negligence, if there is no pre-existing contractual relation
between the parties, is called a quasi-delict and is governed by the
provisions of this Chapter

Elements of quasi-delict
1. Act/omission committed through fault/negligence
2. Damage/injury is caused by such act/omission
3. Does not arise under a pre-existing contractual obligation

Note: Jurisprudence replaces the third element with causal connection [PNR
v. Brunty, G.R. No. 169891 (2006); Andamo v. IAC, G.R. No. 74761
(1990)].

1. Abuse of right; elements

Art. 19, CC. 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

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

1. There is a legal right or duty;

2. Which is exercised in bad faith;

3. For the sole intent of prejudicing or injuring another.

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Test of abuse of rights

No hard and fast rule; depends on the circumstances of each case. The
exercise of a right must be in accordance with the purpose for which it was
established, and must not be excessive or unduly harsh; there must be no
intention to injure another.

Generally, the exercise of any right must be in accordance with the purpose
for which it was established. It must not be excessive or unduly harsh; there
must be no intention to injure another.

There is abuse of right when:

1. The right is exercised for the only purpose of prejudicing or injuring

another

2. The objective of the act is illegitimate

3. There is an absence of good faith

Effects of the application of Art. 19:

a. “A right, though by itself legal because recognized or granted by law as

such, may nevertheless become the source of some illegality” [Globe
Mackay v. CA, G.R. No. 81262 (1989)];

b. It precludes the defense of damnum absque injuria. Damnum absque

injuria does not apply when there is an abuse of a person’s right [Amonoy v.
Gutierrez, G.R. No. 140420 (2001)].

CASE LEGAL RIGHT AND DOCTRINE

INJURY
Velayo v. Shell (1959) Right to transfer credit. The standards in NCC
The transfer of credit 19 are implemented by
from Shell Philippines NCC 21.
to Shell USA was
deemed a violation of

657
 NCC 21 as it allowed
Shell to attach
properties of their
creditor CALI to the
prejudice of its other
creditors.
Globe v. CA (1989) Right to dismiss an When a right is
employee. exercised in a manner
The dismissal itself was which does not conform
not illegal but it was the with the norms in NCC
manner of dismissal 19, and results in
which was deemed in damage to another, a
violation of Article 19, legal wrong is thereby
as such was based on committed. The law,
unfounded accusations therefore, recognizes a
of dishonesty. primordial limitation on
all rights.
University of the East The conscious The conscious
v. Jader (2000) indifference of the indifference of a person
school in not informing to the rights or welfare
its student that he could of the others who may
not graduate formed the be affected by his act or
basis for the award of omission can support a
damages. claim for damages.
Amonoy v. Gutierrez Right to demolish The principle of
(2001) another’s house on his damnum absque injuria
own property. does not apply when the
Amonoy obtained a exercise of the legal
judgment in his favor right is suspended or
for Gutierrez to vacate. extinguished pursuant
A demolition order was to a court order. The
issued but the court exercise of a right ends
suspended it with a when the right
TRO. Amonoy disappears, and it
proceeded with the disappears when it is
demolition. In a abused, especially to the
complaint for damages, prejudice of others.
he claims the principle
of damnum absque
injuria.
Nikko Hotel Manila Right to forbid Article 19, known to
Garden v. Reyes uninvited guests from contain what is
(2005) entering the party. commonly referred to as
the principle of abuse of
Ruby Lim’s throwing rights, is not a panacea

658
 out of complainant for all human hurts and
Reyes, as a gatecrasher social grievances. The
in a private party, was object of this article is
merely in exercise of to set certain standards
her duties as Executive which must be observed
Secretary of the hotel not only in the exercise
where the party was of one’s rights but also
held, and did not in the performance of
constitute a violation of one’s duties.
Article 19.

2. Unjust enrichment
Art. 22, CC. 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.

Art. 23, CC. 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.

Art. 2142, CC. 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.

Art. 2143, CC. The provisions for quasi contracts in this Chapter do not
exclude other quasi-contracts which may come within the purview of the
preceding article.

One person should not be permitted to unjustly enrich himself at the expense
of another, but should be required to make restitution of, or for property or
benefits received, retained, or appropriated where it is just and equitable that
such restitution be made, and where such action involves no violation or
frustration of law or opposition to public policy, either directly or indirectly.

Enrichment at the expense of another is not per se forbidden. It is such

enrichment without just or legal cause that is contemplated here. Just and
legal cause is always presumed, and the plaintiff has the burden of proving
its absence.

659
The restitution must cover the loss suffered by the plaintiff but it can never
exceed the amount of unjust enrichment of the defendant if it is less than the
loss of the plaintiff.

Requisites

1. That the defendant has been enriched;

2. That the plaintiff has suffered a loss;

3. That the enrichment of the defendant is without just or legal ground; and

4. That the plaintiff has no other action based on contract, crime or

quasidelict.

“Under the civil law principle of unjust enrichment, the registered owner of
the motor vehicle has a right to be indemnified by the actual employer of the
driver; and under Article 2181 of the Civil Code, 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.” [Mendoza v. Sps
Gomez, G.R No. 160110 (2014)]

3. Liability without fault

Art. 23, CC. 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

This provision imposes liability even without fault, as long as the injurious
act or event benefited the defendant.

This article is based on equity, An involuntary act, because of its character

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

660
4. Acts contrary to law
Art. 20, CC. Every person who, contrary to law, willfully or negligently
causes damage to another, shall indemnify the latter for the same

The provision is intended to provide a remedy in cases where the law

declares an act illegal but fails to provide for a relief to the party injured.
[Jarencio]

Art. 20 does not distinguish, and the act may be done willfully or
negligently.

Requisites

1. The act must be willful or negligent;

2. It must be contrary to law; and

3. Damages must be suffered by the injured party.

Salvador was misdiagnosed with Hepatitis, as a result of which she lost her
job. During trial, it was proven that the clinic was operating under
substandard conditions, in violation of the Clinical Laboratory Law, DOH
Administrative Order No. 49-B, and the Philippine Medical Technology Act
of 1969. The Court held that violation of a statutory duty is negligence, and
that Article 20 provides the legal basis for award of damages to a party who
suffers damage whenever one commits an act in violation of some legal
provision [Garcia v.

Salvador, G.R. No. 168512 (2007)].

5. Acts contrary to morals

Art. 21, CC. 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.

Elements [Albenson v. CA, supra].

661
1. There is an act which is legal;

2. But which is contrary to morals, good customs, and public policy; and

3. It is done with intent to injure.

This article is designed “to expand the concept of torts and quasi-delict in
this jurisdiction by granting adequate legal remedy for the untold number of
moral wrongs which is impossible for human foresight to specifically
enumerate and punish in statute books” [Baksh v. CA, supra].

The injury suffered by the plaintiff may refer to any determinate right or
property, whether material or not.

The doctrine of proximate cause must apply, because the defendant must
have caused the injury through their act or omission. If through the
plaintiff’s own fault or negligence, they sustained injury, they cannot
recover. Does a “willful” act require malice or deceit?

Yes. The Code uses the motive-laden word “willfully” rather than the
comparatively weaker word “intentionally.” An act which is “willful”
connotes an evil or malicious motive, while an act which is merely
intentional has ordinarily no such implication [Carpio, Antonio T.,
Intentional Torts in Philippine Law, supra].

a. Acts contrary to morals, in general

Article 21 is the result of adopting moral norms into actual legal rules, which
the Court found as acceptable, as it notes that the “conscience of man has
remained fixed to ancient moorings” and that this will impart an “enduring
quality” to our laws, which is a desirable thing from the Court’s perspective.
[Velayo v. Shell, G.R. No. L-7817. (1956)]

662
A reading of the provision may provide an inference of three requisites for a
cause of action under Article 21:

1. that one willfully causes injury or loss to another;

2. that it was done in a manner that is contrary to morals, good customs, or

public policy

3. That the act done to cause injury or loss must be legal

The complaint must ask for damages because it presupposes losses or

injuries material or otherwise; if complaint doesn’t ask for damages, Art. 21
cannot be invoked. [Albenson v. CA, G.R. No. 88694, (1993)]

b. Breach of Promise to Marry and Moral Seduction

Mere breach of promise to marry is not an actionable wrong. But to formally

set a wedding and go through all the above-described preparation and
publicity, only to walk out of it when the matrimony is about to be
solemnized, is quite different. This is palpably and unjustifiably contrary to
good customs xxx [Wassmer v. Velez, G.R. No. L-20089 (1964)].

Where a man's promise to marry is in fact the proximate cause of the

acceptance of his love by a woman and his representation to fulfill that
promise thereafter becomes the proximate cause of the giving of herself unto
him in a sexual congress, proof that he had, in reality, no intention of
marrying her and that thepromise was only a subtle scheme or deceptive
device to entice or inveigle her to accept him and to obtain her consent to the
sexual act, could justify the award of damages pursuant to Article 21 not
because of such promise to marry but because of the fraud and deceit behind
it and the willful injury to her honor and reputation. It is essential, however,
that such injury should have been committed in a manner contrary to morals,
good customs or public policy [Baksh v. CA, supra].

(Note on Baksh: The test, however, is problematic, in that it employs the

concept of proximate cause even if Article 21 cases do not require the

663
application of proximate cause.)

However, when for one whole year, the plaintiff, a woman of legal age,
maintained sexual relations with the defendant, with repeated acts of
intercourse, there is here voluntariness. No case under Article 21 is made
[Tanjanco v. CA, G.R. No. L-18630 (1966)].

In an action by the woman, the enticement, persuasion or deception is the

essence of the injury; mere proof of intercourse is insufficient to warrant a
recovery. It is not seduction where the willingness arises out of sexual desire
or curiosity of the female, and the defendant merely affords her the needed
opportunity for the commission of the act [Tanjanco v. CA, G.R. No. L-
18630 (1966)].

c. Malicious Prosecution

Malicious prosecution is the institution of any action or proceeding, either

civil or criminal, maliciously and without probable cause.

Malicious prosecution is an action for damages brought by one against

whom a criminal prosecution, civil suit, or other legal proceeding has been
instituted maliciously and without probable cause, after the termination of
such prosecution, suit, or other proceeding in favor of the defendant therein
[Magbanua v. Junsay, G.R. No. 132659 (2007)].

Elements [Magbanua v. Junsay, G.R. No.132659 (2007)]

1. The fact of the prosecution or that the prosecution did occur and that the
defendant was himself the prosecutor or that he instigated its
commencement;

2. That the action finally terminated with an acquittal;

3. That in bringing the action, the prosecutor acted without probable cause

664
4. That the prosecutor was actuated or impelled by legal malice, that is, by
improper or sinister motive.

The mere dismissal of the criminal complaint by the fiscal’s office did not
create a cause of action for malicious prosecution, because the proceedings
therein did not involve an exhaustive examination of the elements of
malicious prosecution. To constitute such, there must be proof that the
prosecution was prompted by a sinister design to vex and humiliate a person
and that it was initiated deliberately by the defendant knowing that his
charges were false and groundless [Que v. IAC, G.R. No. 66865 (1989)].

Malicious prosecution involves not only criminal but civil and

administrative suits as well [Magbanua v. Junsay, supra].

The presence of probable cause signifies as a legal consequence the absence

of malice [Que v. IAC, G.R. No. 66865 (1989].

d. Public Humiliation

The circumstances under which the defendant tried to win Lolita’s affection
cannot lead to any other conclusion than that it was he who, through an
ingenious scheme or trickery, seduced the latter to the extent of making her
fall in love with him. The wrong he has caused her and her family is indeed
immeasurable considering the fact that he is a married man. Verily, he has
committed an injury to Lolita's family in a manner contrary to morals, good
customs and public policy as contemplated in Article 21 of the new Civil
Code [Pe v. Pe, G.R. No. L-17396 (1962)].

It is against morals, good customs and public policy to humiliate, embarrass

and degrade the dignity of a person. Everyone must respect the dignity,
personality, privacy and peace of mind of his neighbors and other persons
(Article 26, CC) [Grand Union v. Espino, G.R. No. L-48250 (1979)].

665
A person may be held liable under Article 21 if they make an accusation
against another and acts to prejudice such person, without proof
substantiating her accusation

e. Oppressive Dismissal

The right of an employer to dismiss an employee is not to be confused with

the manner in which this right is to be exercised and the effects flowing
therefrom. If the dismissal was done antisocially or oppressively, then there
is a violation of Article 1701, which prohibits acts of oppression by either
capital or labor against the other, and Article 21, which makes a person
liable for damages if he willfully causes loss or injury to another in a manner
that is contrary to morals, good customs, or public policy. When the manner
in which the company exercised its right to dismiss was abusive, oppressive
and malicious, it is liable for damages [Quisaba v. Sta. Ines, G.R. No. L-
38000 (1974)].

B. CLASSIFICATION OF TORTS
1. According to manner of commission
a. Intentional Torts

Liability for personal acts or omission is founded on that indisputable

principle of justice recognized by all legislators that when a person by his act
or omission causes damage or prejudice to another, a juridical relation is
created by virtue of which the injured person acquires a right to be
indemnified and the person causing the damage is charged with the
corresponding duty of repairing the damage.
The reason for this is found in the obvious truth that man should subordinate
his acts to the precepts of prudence and if he fails to observe them and cause
damage to another, he must repair the damage [Manresa].

Elements of Intentional Torts

A tort is intentional when the tortfeasor:
1. Desires the consequence of their act; or
2. They believe that the consequences are substantially certain to result from
his act.

How is intent proved?

666
The defendant’s intent is usually proved circumstantially, or is inferred from
their conduct. If the defendant’s conduct causes injury, they are presumed to
intend the natural consequences of their act.

b. Negligent Torts

Negligence
It is the omission to do something which a reasonable man, guided by those
considerations which ordinarily regulate the conduct of human affairs,
would do, or the doing of something which a prudent and reasonable man
would not do [Layugan v. IAC, G.R. No. 73998 (1988)].

The diligence with which the law requires the individual to at all times
govern his conduct varies with the nature of the situation in which he is
placed and the importance of the act which he is to perform [Jorge v. Sicam,
G.R. No. 159617 (2007)].

INTENTIONAL TORTS NEGLIGENT TORTS

Harmful consequences are The act or omission merely creates
substantially certain to occur or are a foreseeable risk or harm, which
intended may or may not actually be realized

The difference lies in the certainty of the harmful consequences. Where in

intentional torts there is substantial certainty of harmful consequences, in
negligence, the conduct of the defendant creates a risk or harm which may or
may not result. This comparison is consistent with the definition of
negligence, which consists in a failure to observe the requisite due care
given circumstance.

Will Motive Be Material? Generally, motive is immaterial. But it may be

used to aggravate or mitigate the harmful consequences resulting from an
intentional tort

2. According to scope
a. Human Relations Tort

Liability for personal acts or omission is founded on that indisputable

principle of justice recognized by all legislators that when a person by his act
or omission causes damage or prejudice to another, a juridical relation is
created by virtue of which the injured person acquires a right to be
indemnified and the person causing the damage is charged with the
corresponding duty of repairing the damage.
The reason for this is found in the obvious truth that man should subordinate
his acts to the precepts of prudence and if he fails to observe them and cause
damage to another, he must repair the damage [Manresa].

Human Relations provisions in the Civil Code include Art. 19 (Abuse of

667
Rights) , Art. 20 (Acts Contrary to Law), Art. 21 (Acts contrary to morals),
and Art. 26 (Violation of Human Dignity).

b. Strict Liability Tort

This refers to instances where negligence is not required to be proven to

incur liability; and diligence is not a defense.

This includes Articles 1711, 1723, 2183, 2187, 2189-2193

[See H. Special Liability in Particular Activities; I. Strict Liability.]

c. Independent Civil Actions

Civil Code provisions on independent civil actions include Articles 32-35.

In these cases, a civil action may be filed independently of the criminal

action, even if there has been no reservation made by the injured party; the
law in itself makes such reservation. The result of the civil action is thus
independent of the result of the criminal action.

The underlying purpose for this independent civil action is to allow the
citizen to enforce his rights in a private action brought by him, regardless of
the action of the State attorney. [Tolentino]

C. THE TORTFEASOR
1. Direct tortfeasor
Art. 2176, CC. Whoever by act or omission causes damage to another,
there being fault or negligence, is obliged to pay for the damage done.
Such fault or negligence, if there is no pre-existing contractual relation
between the parties, is called a quasi-delict and is governed by the
provisions of this Chapter.

The direct tortfeasor is one who is made liable for a tort committed through
his own acts. The tortfeasor may be a natural or juridical person.

a. Natural persons
In order for one to be liable as a direct tortfeasor, the requisites of Art. 2176
must be fulfilled:
1. Act or omission
2. Damage to another
3. Fault or negligence
4. No pre-existing contractual relation

In other words, the direct tortfeasor is liable for quasi-delict. Liability

668
consists in the payment of damages for the injury suffered.

Note: Damage under the 2nd requisite pertains to injury. [PNR v. Brunty,
G.R. No. 169891 (2006)]

b. Juridical persons
For juridical persons, the rules on vicarious liability in the next section
applies.

2. Persons made responsible for others

Art. 2180, CC. 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.

xxx

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 the damage.

Doctrine of Vicarious Liability (Art. 2180)

The obligation imposed under Art. 2176 (i.e., to pay for injury suffered) is
also demandable from those persons (natural or juridical) who are
responsible for the person who has committed a quasi-delict (i.e., the direct
tortfeasor).

Under this, liability is primary and direct (solidarily liable with the direct
tortfeasor), not subsidiary. It is not conditioned upon the insolvency of or
prior recourse against the direct tortfeasor.

Note: Art. 2180 does not provide for automatic liability. It only gives rise to
a presumption of negligence on the part of the persons mentioned. The
presumption is rebuttable by a showing of the person’s exercise of the
diligence required (See ‘Available Defense’ in the following sections).

Rationale

To extend liability by legal fiction to those in a position to exercise absolute

or limited control over the direct tortfeasor. These persons become liable for

669
their own omission to comply with their duty to exercise supervision over
the persons for whom they are responsible.

When Not Applicable

When moral culpability can be directly imputed to the direct tortfeasor, as

when there is actual intent to cause harm to others.

Persons Vicariously For Damages Caused By:

Liable:
Parents Minor children who live in their company
Guardians Minors or incapacitated children who are
under their authority and live in their
company
Owners and managers of Employees in the service of the branches in
an establishment or which the latter are employed or on the
enterprise occasion of their functions
Employers Employees and household helpers acting
within the scope of their assigned tasks; even
though the former are not engaged in any
business or industry
State Special agents
Teachers of heads of Pupils and students or apprentices, so long as
establishments of arts they remain in their custody
and trade

a. Persons Exercising Parental Authority

Parental Authority

It consists, to a large extent, of the instruction and supervision of the child.

May be exercised by:

1. Parents/Adoptive parents

2. Court-appointed guardians

3. Substitute Parental Authorities

a. Grandparents

670
 b. Oldest qualified sibling over 21 years
c. Child’s actual custodian, provided he is qualified and over 21 years

4. Special Parental Authorities

a. School
b. Administrators
c. Teachers
d. Individual, entity, or institution engaged in child care

Available Defense

Proof that the parent/guardian observed all diligence of a good father of a

family to prevent the damage.

1. Parents

Art. 2180 (2), CC. 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.

Art. 211, FC. Parents and other persons exercising parental authority shall
be civilly liable for the injuries and damages caused by the acts or
omissions of their unemancipated children living in their company and
under their parental authority subject to the appropriate defenses provided
by law.

Parents are responsible for their minor children who live in their
company.

“Minors” Defined

Minors refer to those who are below 21 years old, not below 18 years. The
law reducing majority age did not amend Art. 2180. The basis is the Art.
236(3) of the Family Code, as amended by RA 6809, which provides that
nothing in the Family Code shall be construed to derogate from the duty or
responsibility of parents and guardians for children and wards below 21
years of age mentioned in Art. 2180, CC.

671
Death/Incapacity of Father Irrelevant

The provision in Art. 2180, which makes the mother liable only upon the
death/incapacity of the father is no longer operative due to Family Code
provisions:

• Art. 221 states that persons exercising parental authority shall be civilly
liable for the torts of the children in their care.

• Art. 211 states that both the father and the mother exercise parental
authority.

Note: Even if the complaint for damages is filed when parental authority is
already lodged with the adoptive parents, the parents who shall be made
vicariously liable are those who exercised parental authority at the time
the quasi-delict was committed. In this case, it was the biological parents.
[Tamargo v. IAC, G.R. No. 85044 (1992)]

Basis of liability of parents and adopters

Parental liability is anchored upon parental authority coupled with presumed

parental dereliction in the discharge of the duties accompanying such
authority. The parental dereliction is, of course, only presumed and the
presumption can be overturned under Article 2180 CC, by proof that the
parents had exercised all the diligence of a good father of a family to prevent
the damage [Tamargo v. CA, supra].

Illegitimate children

Responsibility is with the mother whom the law vests with parental
authority.

2. Guardians

Art. 2180 (3), CC. Guardians are liable for damages caused by the minors
or incapacitated persons who are under their authority and live in their
company.

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The liability of guardians with respect to their wards is governed by the
same rule as in the liability of parents with respect to their children below 21
years and who live with them.

“Incapacitated” Defined (Rule 92, Rules of Court)

Also known as those who are “incompetent:”

1. Those suffering penalty of civil interdiction

2. Prodigals

3. Deaf and dumb unable to read and write

4. Unsound mind, even though they have lucid intervals

5. Being of sound mind, but by reason of age, disease, weak mind, and other
similar causes, cannot take care of themselves or manage their property

Minors or incapacitated tortfeasors without a parent or guardian (Art.

2182)

Answerable with his own property in an action against him. A guardian ad

litem shall be appointed.

b. Teachers and Schools

Art. 2180 (7), CC. 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.

Art. 218, FC. The school, its administrators and teachers, or the
individual, entity or institution engaged in child 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.

673
 Art. 219, FC. 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.

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 CC on quasi-delicts.

Under Art. 2180, teachers or heads of establishments of arts and trades are
responsible for their pupils and students or apprentices, so long as they
remain in the former’s custody, regardless of age.

Under the Family Code, liability attaches to the school, its administrators
and teachers, or the individual or entity engaged in child care, so long as the
child is under their supervision, instruction, or custody, and the child is
below 18 years old.

Basis of liability

The persons vicariously liable stand in loco parentis and are called upon to
exercise reasonable supervision over the conduct of the students.

“Custody” Defined

“Custody” means the protective and supervisory custody that the school, its
head and teachers exercise over the pupils, for as long as they are in
attendance in school, which includes recess time. It is not required that the
student must live and board in the school.

Custody does not connote immediate and actual physical control. It refers
more to the influence exerted on the student and the discipline instilled in
him. [Palisoc v. Brillantes, G.R. No. L-29025 (1971)]

674
As long as it is shown that the student is in the school premises pursuant to a
legitimate student objective, in the exercise of a legitimate right, or the
enjoyment of a legitimate student privilege, the responsibility of the school
authorities over the student continues. [Amadora v CA, G.R. No. L-47745
(1988)]

Available Defense

Proof that the teacher/school observed all diligence of a good father of a

family to prevent the damage.

Under the Civil Code (Art. 2180)

Teachers Heads
Institution Academic institutions Arts and trades,
establishments
Liable Teacher in charge; not Head of establishment
administrator
Custody Required
Rationale Heads of academic Heads of establishments
institutions exercise of arts and trades have
only administrative apprentices, who they
authority over the are in close proximity
students, and are not in to.
close proximity to them.

Under the Family Code

School, Parents, Guardians,
Administrators, etc.
Teachers, etc.
Provided by Art. 218 Art. 219
Kind of authority Special parental Parental authority or
required authority substitute parental
authority
Liability if tort is Principal and solidary Subsidiary
committed in school

Students covered
ARTS. 218-219 ART. 2180
Minor students only All students, even those no longer
minors, as long as they remain in the

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 custody of the persons responsible

c. Owners, Managers of Establishments, Employers

Art. 2180 (4), FC. 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
occassion of their functions

Art. 2180 (5), FC. 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.

Nature of employers’ liability

Direct The basis of his liability is not his employee’s negligence,
but his own negligence in hiring and supervising the
employee.
Primary The amount for which he is liable may be pursued without
having to exhaust the employee’s assets, as opposed to
subsidiary liability under the RPC.
Solidary He may recover the full amount of the liability from his
employee, as per Art. 2181, and not merely a prorated
amount, unlike in Art. 2184, CC.

What must be established for vicarious liability:

1. Existence of an employer-employee relationship between company and

tortfeasor

2. Tortious act had been committed while the tortfeasor was acting in the
normal course of employment

Basis for liability is not respondeat superior, but pater familias.

Respondeat superior Pater familias

Master is absolutely liable to There is only a presumption of
servant’s act or omission negligence on the partof the

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 employer
No defense of negligence Defense of negligence available
Embodied in the subsidiary liability Embodied in primary liability under
under RPC – no defense of Art. 2180, where thedefense of
diligence; only lack of criminal diligence is available
liability

Basis of liability

Employer’s negligence in:

1. The selection of their employees (culpa in eligiendo)

2. The supervision over their employees (culpa in vigilando)

The liability imposed upon employers with respect to damages occasioned

by the negligence of their employees to whom theyare not bound by contract
is based on the employer’s own negligence, such as when he places a
powerful automobile in the hands of a servant whom he knows to be
ignorant of the method of managing such vehicle [Cangco v. Manila
Railroad, supra].

Presumption of Negligence

The presentation of proof of the negligence of its employee gives rise to the
presumption that the defendant employer did not exercise the diligence of a
good father of a family in the selection and supervision of its employees
[Lampesa v. De Vera, G.R. No. 155111 (2008)].

Available Defense

Proof of due care and diligence in the:

1. Selection of employees

a. Careful examination of the applicant for employment as to his

qualifications, experience and record of service

2. Supervision of employees

a. Formulation of standard operating procedures, suitable rules and

677
 regulations, and issuance of proper instructions
b. Monitoring of their implementation
c. Imposition of disciplinary measures in case of their breach

When Applicable

Vicarious liability arises when there is an employer-employee relationship.

To determine its existence, the “control test” is used. Under this, a
relationship exists if the “employer” controls both the means and the details
of the process by which the “employee” is to accomplish his task.
[Professional Services v. CA and Agana, G.R. No. 126297 (2010)].

Criminal Negligence

The vicarious liability of the employer for criminal negligence of his

employee is governed by RPC 103. Conviction of the employee
conclusively binds the employer.

Defense of due diligence in the selection and supervision of the employee is

not available. The employer cannot appeal the conviction [Fernando v.
Franco (1971)].

Note: The liability of the employer under Art. 103 RPC is subsidiary.

Registered Owner Rule

The registered owner of the vehicle is primarily responsible to the public for
whatever damage or injury the vehicle may have caused, even if he had
already sold the same to someone else.

The policy is the easy identification of the owner who can be held
responsible so as not to inconvenience or prejudice the third party injured
[Cadiente v. Macas (2008)]. The registered owner, however, has the right to
be indemnified by the real or actual owner of the amount that he may be
required to pay as damages for the injury caused to the plaintiff [Orix Metro
Leasing v. Mangalinan (2012)].

This rule applies even if the vehicle is leased to third persons. The liability

678
of the registered owner is subject to his right of recourse against the
transferee or buyer.

1. Owners and Managers of an Establishment or Enterprise (Art.

2180(4))

They are responsible for employees in the service of the branches in which
the latter are employed or on the occasion of their functions.

“Manager” Defined

This does not include a manager of a corporation, as such is not an

employer, but merely an employee of the corporation. [Philippine Rabbit v.
Philam Forwarders, G.R. No. L-25142 (1975)].

2. Employers (Art. 2180(5))

They are responsible for employees and household helpers acting within the
scope of their assigned tasks; even though the former are not engaged in any
business or industry.

“Within the scope of their assigned task” in Art. 2180 includes any act done
by an employee in furtherance of the interests, or for the account of the
employer at the time of the infliction of the injury or damage [Filamer v.
CA, G.R. No. 75112 (1990)].

Distinguishing Par. 4 and Par. 5

The distinction is necessary to determine which paragraph is applicable:

1. Kind of employer made liable:

a. Par. 4: To owners and managers of an establishment or enterprise

b. Par. 5: To employers in general, whether or not engaged in any
business or industry

679
2. Acts of employees responsible for:

a. Par. 4: Negligent acts committed either in the service of the branches

or on the occasion of their functions
b. Par. 5: Negligent acts done within the scope of their assigned task

However, essentially, there is no distinction between the two. It can be said

that Par. 5 is merely an expansion of what has been provided for under Par.
4. [Castilex v. Vasquez, G.R. No. 132266 (1999)]

d. The State

Sec. 3, Art. XVI, 1987 Constitution. The State may not be sued without its
consent.

Art. 2180 (6), CC. 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.

Who may be sued under the State

1. A special agent under Art. 2180

2. Instrumentalities discharging proprietary functions

a. The power to enter into contracts implies the consent to be sued

b. The charter of the instrumentality may expressly provide that it may
be sued

3. Those that consent to be sued

Instances where the State gives its consent to be sued

1. Art. 2180 (6) is an example of an express legislative consent. Here, the

State assumes a limited liability for the acts of its special agents.

2. Art. 2189 provides for state liability for damages caused by defective

680
condition of public works.

3. Local Government Code provides for the liability of local government

units for wrongful exercise of its proprietary (as opposed to its
governmental) functions.

The latter is the same as that of a private corporation or individual.

[Mendoza v. de Leon, G.R. No. L-9596 (1916)]

“Special Agent” Defined

One who receives a definite and fixed order or commission, foreign to the
exercise of the duties of his office (if he is a special official).

Does not pertain to any executive agent who is an employee of the active
administration and who on his own responsibility performs functions which
are inherent and naturally pertain to his office [Merritt v. Government of the
Philippine Islands, G.R. No. 11154 (1960)].

A corporate body (e.g., GOCCs) performing non-governmental functions

becomes liable for the damage resulting from the tortious act of its
employee. Liability will be that of an ordinary employer under Par. 4 or 5,
Art. 2180. [Fontanilla v. Maliaman, G.R. No. 55963 (1991)].

Why the State Cannot be Sued

Neither fault nor negligence can be presumed on the part of the State in the
organization of branches of public service and in the appointment of its
agents. Also, suing the State will divert its focus from the delivery of
necessary public services.

3. Joint tortfeasors
Art. 2194, FC. The responsibility of two or more persons who are liable
for quasi-delict is solidary.

Joint tortfeasors are all persons responsible for a quasi-delict. They are all
persons who command, instigate, promote, encourage, advise, countenance,
cooperate in, aid or abet in the commission of a tort, or who approve of it

681
after it is done, if done for their benefit. Under Art. 2194, their responsibility
is solidary.

When Applicable

When the concurrent or successive negligent acts or omissions of two or

more persons, although acting independently, are together the direct and
proximate cause of a single injury to a third person, and it is impossible to
determine in what proportion each contributed to the injury and either of
them is responsible for the whole injury. Where their concurring negligence
resulted in injury or damage to a third party, they become joint tortfeasors
and are solidarily liable for the resulting damage. [Far Eastern Shipping v.
CA, G.R. No. 130068 (1998)]

D. PROXIMATE CAUSE
1. Concept
In order that civil liability for negligence may arise, there must be a direct
causal connection between the damage suffered by the plaintiff and the act
or omission of the defendant.

Plaintiff, however, must establish a sufficient link between the act or

omission and the damage or injury. That link must not be remote or far-
fetched; otherwise, no liability will attach.
The damage or injury must be a natural and probable result of the act or
omission. [Dy Teban Trading, Inc. v. Ching, G.R. No. 161803 (2008)]

Note: It is not required that it be shown that the injury would not have
occurred without the act or omission complained of. It only requires some
reasonable connection between the act or omission and the injury.

If the actor’s conduct is a material element and a substantial factor in

bringing about harm to another, the fact that the actor neither foresaw nor
should have foreseen the extent of the harm or the manner in which it
occurred does not prevent him from being liable [Philippine Rabbit v. IAC,
G.R. No. 66102-04 (1990)]

There is no exact formula to determine proximate cause. It is based upon

mixed considerations of logic, common sense, policy and precedent. [Dy
Teban Trading, Inc. v. Ching, G.R. No. 161803 (2008)]

a. Two Definitions

682
Proximate cause immediately resulting in injury:
1. That cause, which, in natural and continuous sequence, unbroken by any
efficient intervening cause, produces the injury, and without which the result
would not have occurred. [Bataclan v. Medina, G.R. No. 10126 (1957)]

2. Foreseen by a person of ordinary care that the injury complained of or

some similar injury would result from the cause as a natural and probable
consequence. [Pilipinas Bank v. CA, G.R. No. 105410 (1994)]

Proximate cause not immediately resulting in injury but sets in motion a

chain of events, which eventually result in injury:
a. That cause acting first and producing the injury, by setting other events in
motion, all constituting a natural and continuous chain, each having a close
causal connection with its immediate predecessor, the final event in the
chain immediately effecting the injury as a natural and probable result of the
first cause, under such circumstances that the person responsible for the first
event should, as an ordinary prudent and intelligent person, have reasonable
ground to expect at the moment of his act that an injury might probably
result therefrom.
b. Also known as the proximate legal cause
c. A cause is still proximate, although farther in time to the injury, if the
happening of it set other foreseeable events into motion resulting ultimately
in the damage. [Abrogar v. Cosmos Bottling Co., G.R. No. 164749 (2017)]

Respondent was mistakenly given Dormicum, a potent sleeping tablet,

instead of medication for his blood sugar. He took a pill for 3 consecutive
days and on the third day, he fell asleep on the wheel and figured in a
vehicular accident. The Court found that the proximate cause of the accident
was the Mercury Drug employee’s mistake in reading the prescription
[Mercury Drug v. Baking, G.R. No. 156037 (2007)].

Note: Here, 3 days have elapsed from the time of the negligent act
determined by the Court as the proximate cause; thus, the Court did not
consider the time element in determining proximate cause but the nature and
gravity of the injury.

b. Differentiated from other Causes

Concurrent Cause
A concurrent cause is one, which along with other causes, produces the
injury. Each cause is an efficient cause without which the injury would not
have happened. Injury is attributed to any or all the causes, and recovery
may be had against any or all of those responsible.
Note: They’re the same thing from the point of view of solidarity.

As a general rule, that negligence in order to render a person liable need not
be the sole cause of an injury. It is sufficient that his negligence, concurring

683
with one or more efficient causes other than the plaintiff’s, is the proximate
cause of the injury.

Remote Cause
A remote cause is one, which would have been a proximate cause, had there
been no efficient intervening cause after it and prior to the injury.

It cannot be made the basis of an action if such did nothing more than
furnish the condition or give rise to the occasion by which the injury was
made possible, if there intervened between such prior or remote cause and
the injury a distinct, successive, unrelated, and efficient cause of the injury,
even though such injury would not have happened but for such condition or
occasion [Manila Electric v. Remonquillo, G.R. No. L-8328 (1956)].

Intervening Cause
An intervening cause is an event that takes place after the first cause and
before the injury. (See Efficient Intervening Cause)

2. Cause in fact
Whether such negligent conduct is a cause without which the injury would
not have occurred or is the efficient cause which set in motion the chain of
circumstances leading to the injury. [Bataclan v. Medina, G.R. No. 10126
(1957)] An act or omission is not regarded as a cause of an event if the
particular event would not have occurred without it.

3. Efficient intervening cause

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

Foreseeable Intervening Cause

If the intervening cause is one which in ordinary human experience is
reasonably to be anticipated, or one which the defendant has reason to
anticipate under the particular circumstances, the defendant may be
negligent, among other reasons, because of failure to guard against it. There
is an intervening cause combining with the defendant’s conduct to produce
the result, and the defendant’s negligence consists in failure to protect the
plaintiff against that very risk [Phoenix Construction v. IAC, G.R. No. L-
65295 (1987)].

Efficient Intervening Cause

684
When there is an intervening cause, which is not a consequence of the first
wrongful cause (not under the control of the first wrongdoer and could not
be foreseen), that eventually leads to an injury, the first wrongful cause can
no longer be considered the proximate cause. [Abrogar v. Cosmos Bottling
Co., G.R. No. 164749 (2017)]

4. Cause as distinguished from condition

The distinction between cause and condition has been almost entirely
discredited. So far as it has any validity at all, it must refer to the type of
case where the forces set in operation by the defendant have come to rest in
a position of apparent safety, and some new force intervenes. But even in
such cases, it is not the distinction between “cause” and “condition” which is
important, but the nature of the risk and the character of the intervening
cause. [Phoenix Construction v. IAC, G.R. No. L- 65295 (1987)].

5. Last clear chance

The test is also known as the “Doctrine of Discovered Peril” or “Doctrine of
Supervening Negligence” or “Humanitarian Doctrine.”

Effect on Plaintiff's Right to Recover

The antecedent negligence of the plaintiff does not preclude him from
recovering damages caused by the supervening negligence of the defendant,
who had the last fair chance to prevent the impending harm by the exercise
of due diligence. [PNR v. Brunty, G.R. No. 169891 (2006)]

Establishing the Defendant’s Liability

Where both parties are negligent, but the negligent act of one is appreciably
later in time than that of the other, or when it is impossible to determine
whose fault or negligence should be attributed to the incident, the one who
had the last clear opportunity to avoid the impending harm and failed to do
so is chargeable with the consequences. [Philippine Bank of Commerce v.
CA, G.R. No. 97626 (1997)]

It is necessary to show that the person who allegedly had the last opportunity
to avert the accident was aware of the existence of the peril, or should, with
exercise of due care, have been aware of it. [Pantranco v. Baesa, G.R. No.
79050-51 (1989)]

When Not Applicable

a. Where the proximate cause of the injury has been established [PNR v.
Brunty, G.R. No. 169891 (2006)]
b. In a case of culpa contractual, where neither the contributory
negligence of the plaintiff nor his last clear chance to avoid the loss,
would exonerate the defendant from liability. Such contributory
negligence or last clear chance by the plaintiff merely serves to reduce
the recovery of damages by the plaintiff but does not exculpate the

685
 defendant from his breach of contract [Consolidated Bank v. CA, G.R.
No.138569 (2003)]
c. When the party charged is required to act instantaneously, and if the
injury cannot be avoided by the application of all means at hand after
peril is or should have been discovered [Pantranco v. Baesa, G.R. No.
79050-51 (1989)]
d. The doctrine of last clear chance, as enunciated in Anuran v. Buno,
applies in a suit between the owners and drivers of colliding vehicles.
It does not arise where a passenger demands responsibility from
thecarrier to enforce its contractual obligations. It will be inequitable
to exempt the negligent driver of the jeepney and its owners on the
ground that the other driver was likewise guilty of
negligence[Bustamante v. CA, G.R. No. 89880 (1991)].

Note:
• If plaintiff is the proximate cause: no recovery can be made.
• If plaintiff is not the proximate cause: Recovery can be made but such will
be mitigated.
• If negligence of parties is equal in degree, then each bears his own loss.

E. LEGAL INJURY
1. Concept
In order that the law will give redress for an act causing damage, that act
must be not only hurtful, but wrongful. The damage must be damnum et
injuria or legal injury.

To warrant the recovery of damages, there must be:

1. Right of action for a legal wrong inflicted by the defendant
2. Damage resulting to the plaintiff therefrom

Injury v. Damage v. Damages [Custodio v. CA, supra]

• Injury: The illegal invasion of a legal right (i.e., legal injury)
• Damage: The loss, hurt, or harm which results from the injury
• Damages: The compensation awarded for the damage suffered

Distinguished from Damnum Absque Injuria

If a person sustains actual damage (harm or loss to his person or property)
that is not considered by law as an injury (i.e., legal injury), such damage is
regarded as damnum absque injuria. [Custodio v. CA, G.R. No. 116100
(1996)]

The proper exercise of a lawful right cannot constitute a legal wrong for
which an action will lie, although the act may result in damage to another,
for no legal right has been invaded. [Custodio v. CA, supra]

There can be damage without injury in those instances in which the loss or

686
harm was not the result of a violation of a legal duty. In such cases, the
consequences must be borne by the injured person alone.

2. Elements of right
The legal rights of each member of society constitute the measure of the
corresponding legal duties, mainly negative in character, which the existence
of those rights imposes upon all other members of society. The breach of
these general duties whether due to willful intent or to mere inattention gives
rise to an obligation to indemnify the injured party. [Cangco v. Manila
Railroad Co., G.R. No. 12191 (1918)]

3. Violation of right or legal injury

Under Articles 19 to 21 of the Civil Code, an act which causes injury to
another may be made the basis for an award of damages. The elements of an
abuse of right under Article 19 are the following: (1) There is a legal right or
duty; (2) which is exercised in bad faith; (3) for the sole intent of prejudicing
or injuring another. Article 20 speaks of the general sanction for all other
provisions of law which do not especially provide for their own sanction.
Thus, anyone who, whether willfully or negligently, in the exercise of his
legal right or duty, causes damage to another, shall indemnify his victim for
injuries suffered thereby.
Article 21 deals with acts contra bonus mores, and has the following
elements: 1) There is an act which is legal; 2) but which is contrary to
morals, good custom, public order, or public policy; 3) and it is done with
intent to injure. [Albenson v. CA, G.R. No. 88694 (1993)]

4. Classes of injury
a. Legal Injury

In order that a plaintiff may maintain an action for the injuries of which he
complains, he must establish that such injuries resulted from a breach of
duty which the defendant owed to the plaintiff, and concurrence of injury to
the plaintiff and legal responsibility by the person causing it. The underlying
basis for the award of tort damages is the premise that an individual was
injured in contemplation of law.
Thus, there must first be the breach of someduty and the imposition of
liability for that breach before damages may be awarded; it is not sufficient
to state that there should be tortliability merely because the plaintiff
sufferedsome pain and suffering. [Custodio v. CA,supra]

b. Damnum absque injuria

Under this principle, the legitimate exercise of a person's rights, even if it

causes loss to another, does not automatically result in an actionable injury.
The law does not prescribe a remedy for the loss. This principle does not,
however, apply when there is an abuse of a person's right, or when the

687
exercise of this right is suspended or extinguished pursuant to a court order.
Indeed, in the availment of one's rights, one must act with justice, give their
due, and observe honesty and good faith. [Amonoy v. Gutierrez, G.R. No.
140420 (2001)].

The proper exercise of a lawful right cannot constitute a legal wrong for
which an action will lie, although the act may result in damage to another,
for no legal right has been invaded.
One may use any lawful means to accomplish a lawful purpose and though
the means adopted may cause damage to another, no cause of action arises in
the latter's favor. An injury or damage occasioned thereby is damnum
absque injuria. The courts can give no redress for hardship to an individual
resulting from action reasonably calculated to achieve a lawful means.
[Custodio v. CA, supra]

F. INTENTIONAL TORTS
1. General
a. Concept
Intentional torts include conduct where the actor desires to cause the
consequences of his act or believes the consequences are substantially
certain to result from it [Aquino].

[See also B. Classification of Torts.]

b. Classes
1. Adopted from American jurisprudence (Articles 26, 32, and 1314, CC)
2. Taken from the codes of civil law jurisdictions (Articles 19, 20, 21, 23,
27, and 28, CC)

2. Interference with rights to persons and property

a. Abuse of right

Art. 19, CC. 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.

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

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

[See A.1. Abuse of Right]

b. Breach of statutory duty

Art. 20, CC. Every person who, contrary to law, willfully or negligently

688
 causes damage to another, shall indemnify the latter for the same.

Violation of a statutory duty is negligence [Garcia v. Salvador, G.R. No.

168512 (2007)].

Requirements [Carpio, Antonio T., Intentional Torts in Philippine Law, 47

PHIL L. J. 649, 651- 662 (1972)]:
1. Plaintiff must establish that he belongs to the class of persons sought to be
protected by the statute; and
2. There must be an invasion of a particular interest the law seeks to protect.

With the exception of laws which especially grant civil indemnity for
damages resulting from breach thereof, Art. 20 applies to all appropriate
laws, whether criminal or otherwise.

[See A.4. Acts Contrary to Law.]

c. Contra bonus mores

Art. 21, CC. 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.

Elements [Albenson v. CA, supra]

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

Examples of acts contra bonus mores

• Breach of Promise to Marry and Moral seduction
• Malicious prosecution
• Public humiliation
• Oppressive dismissal

[See A.5. Acts contrary to morals]

d. Damage to property

Art. 23, CC. 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.

This article is based on equity. An involuntary act, because of its character,

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

689
limit of his liability. The plaintiff has the burden of proving the extent of the
benefit or enrichment of the defendant. [Tolentino]

e. Rights under Art. 26, CC

Art. 26, CC. 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:

(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.

Note: The enumeration under Art. 26 is merely illustrative. It extends to

“similar acts,” regardless of whether they constitute a criminal·offense or
not. Thus, the prohibition in No. 1 is not limited to invasion of the privacy of
residence; encroachment on one’s personal privacy is included.

f. Right to personal dignity

Violation of the right to personal dignity is analogous to the American law

concept of defamation. Defamation is an invasion of a person’s right to
enjoy a reputation and good name unimpaired by false attacks which tend to
diminish the esteem in which a person is held by men whose standard of
opinion the court can properly recognize. The reputation that is protected is
the opinion of others [Carpio, Antonio T., Intentional Torts in
Philippine Law, supra].

Is malice required?
a. Under the Revised Penal Code: malice is required as an element of
defamation.
b. As a tort action under Art. 26, CC:
i. General rule: malice on the part of the defendant need not be proved
by the plaintiff.
ii. Exception: malice or ill will remain important where the exercise of a
qualified privilege is in question.

g. Right to personal security

A violation of the right to personal security is identical with the American

intentional torts of battery and assault.

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Battery is the actual and willful infliction of any unlawful or unauthorized
violence on the person of another, irrespective of its degree.
The interest protected by this action is the freedom from intentional and
unpermitted contacts with the plaintiff’s person. The term “person” includes
any part of the body, or anything attached to it and practically identified with
it. Accordingly, the slightest contact with the plaintiff's clothes or anything
attached to his person constitutes battery. No harm or actual damage of any
kind is required.

Assault is the intentional, unlawful offer of physical injury to another by

force unlawfully directed toward the person of another, under such
circumstances as to create a wellfounded fear of imminent battery, coupled
with the apparent present ability to effectuate the attempt if not prevented.
The interest protected by this action is the freedom from apprehension of a
harmful or offensive contact with the person, as distinguished from the
contact itself. No actual contact is necessary, and the plaintiff is protected
against a purely mental disturbance of his personal integrity.

The defendant must have intended to interfere with the plaintiff's personal
integrity to hold him liable for assault. In short, he must have intended to
bring about an assault or a battery. Assault, therefore, cannot be committed
through negligence. But the intent need not be to inflict physical harm, it
being sufficient that there is an intent to arouse apprehension [Carpio,
Antonio T., Intentional Torts in Philippine Law, supra].

h. Right to privacy

The right of privacy has been concisely defined as “the right to be let
alone.” The interference of the right, to be actionable, must be serious and
outrageous, or beyond the limits of common ideas of decent conduct.

Invasion of the right of privacy involves four distinct types of tort:

1. intrusion upon the plaintiff's physical and mental solitude;
2. public disclosure of private facts;
3. placing the plaintiff in false light in the public eye; and
4. the commercial appropriation of the plaintiff’s name or likeness.

Note: The right of privacy does not prohibit the publication of materials
which are of legitimate public or general interest.

It has been frequently held that those who unwillingly court public attention
become reluctant public figures and “until they have reverted to the lawful
and unexciting life led by the great bulk of the community, they are subject
to the privileges which publishers have to satisfy the curiosity of the public
as to their leaders, heroes, villains and victims.” [Carpio, Antonio T.,
Intentional Torts in Philippine Law, supra].

691
i. Right to peace of mind

Violation of the right to peace of mind under Art. 26 is akin to the American
tort of intentional infliction of mental distress (physical illness suffered by
the plaintiff as a result of the offensive words or act). However, the view that
physical illness is immaterial in infliction of mental distress appears to be
applicable in this jurisdiction since Art. 26 itself creates a cause of action for
violation of the right to “peace of mind.” Violation of the right in itself
constitutes a legal injury sufficient to support the action [Carpio, Antonio T.,
Intentional Torts in Philippine Law, supra].

j. Dereliction of duty

Art. 27, CC. 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.

This applies only to acts of nonfeasance or the nonperformance of some acts

which a person is obliged or has responsibility to perform. The duty of the
public servant must be ministerial in character. If the duty is discretionary,
he is not liable unless he acted in a notoriously arbitrary manner.

The defense of good faith is not available because an officer is under

constant obligation to discharge the duties of his office, and it is not
necessary to show that his failure to act was due to malice or willfulness.

Requisites: [Amaro v. Sumanguit, G.R. No. L- 14986 (1962)]

1. Defendant is a public officer charged with a performance of a duty in
favor of the plaintiff;
2. He refused or neglected without just cause to perform the duty;
3. Plaintiff sustained material or moral loss as a consequence of such
nonperformance;
4. The amount of such damages, if material.

k. Violation of civil and political rights

Art. 32, CC. 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;

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 (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 a 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 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.

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Article 32 speaks of an officer or employee or person “directly or
indirectly” responsible for the violation of the constitutional rights and
liberties of another. Thus, it is not the actor alone (i.e., the one directly
responsible) who must answer for damages under Article 32; the person
indirectly responsible has also to answer for the damages or injury caused to
the aggrieved party. Article 32 makes the persons who are directly, as well
as indirectly, responsible for the transgression, joint tortfeasors [MHP
Garments v. CA, G.R. No. 86720 (1994)].

It is not necessary that the defendant under Article 32 should have acted with
malice or bad faith, otherwise, it would defeat its main purpose, which is the
effective protection of individual rights. It suffices that there is a violation of
the constitutional right of the plaintiff [Vinzons-Chato v. Fortune, G.R. No.
141309 (2007)].

3. Interference with relations

An interference with the continuance of unimpaired interests founded upon
the relation in which the plaintiff stands toward one or more third persons
[Prosser and Keeton].

a. Family relations

Art. 26, CC. 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: x x x

(2) Meddling with or disturbing the private life or family relations of

another; x x x

1. Husband and wife

The law expressly recognizes the right of either spouse to sue the other
without any limitations as to the subject matter of litigation. Litigations
between members of the same family are expressly allowed by the Code as
long as earnest efforts towards a compromise have been made. Moreover,
the Code defines family relations as including those between husband and
wife. It is therefore our belief that in this jurisdiction, a personal tort action,
like battery, can be maintained by a wife against her husband, or vice versa
[Carpio, Antonio T., Intentional Torts in Philippine Law, supra].

2. Interferences by third persons

The right to family relations includes the right to consortium and to recover
damages in case of breach thereof. A spouse’s interest in his relationship
with the other spouse is known as consortium. The gist of a husband’s cause

694
of action for loss of his wife’s consortium is a loss sustained by him and not
the damage sustained by her [Carpio, Antonio T., Intentional Torts in
Philippine Law, supra].

Forms of interference
1. Adultery with the wife: the husband may maintain an action not only
where the intercourse is the result of rape, but also where the wife consents
to it, or where she herself seduces the defendant.
2. Alienation of affection: interference with the wife’s affection and mental
attitude toward the husband. In the same manner, the wife has a cause of
action for the alienation of her husband’s affection. The attempt to alienate
must be successful to be actionable. Affirmative action on the part of the
defendant is required in order that he may be liable for interference with the
marriage relation. Although the defendant need not be motivated by spite or
ill will toward the plaintiff, the tort must nevertheless be an intentional one,
directed at the relation itself.
a. Requisites:
i. that the defendant acted for the purpose of effecting the relation; and
ii. that he was a substantial factor in causing the alienation.
b. Elements:
i. Wrongful conduct of the defendant: intentional and malicious enticing
of a spouse away from the other spouse
ii. Loss of affection or consortium
iii. Causal connection between such conduct and loss
c. Can a meddling mother-in-law be liable for alienation of affection?
No.
Parents enjoy a qualified privilege to interest themselves in the marital
affairs of their child. “An action for alienation of affections against the
parents of one consort does not lie in the absence of proof of malice or
unworthy motives on their part” [Tenchavez v. Escano, G.R. No. L-
19671(1965)].
d. Liability of Parents, Guardians or Kin. The law distinguishes between
the right of a parent to interest himself in the marital affairs of his child and
the absence of rights in a stranger to intermeddle in such affairs.
i. Such distinction between the liability of parents and that of strangers
is only with regard to what will justify interference.
ii. A parent is liable for alienation of affections resulting from his own
malicious conduct, as where he wrongfully entices his son or daughter
to leave his or her spouse, but he is not liable unless he acts
maliciously, without justification and from unworthy motives.
iii. He is not liable where he acts and advises his child in good faith
with respect to his child's marital relations in the interest of his
child as he sees it…
iv. He may in good faith take his child into his home and afford him or
her protection and support, so long as he has not maliciously enticed
his child away, or does not maliciously entice or cause him or her to

695
 stay away from his or her spouse. This rule has more frequently been
applied in the case of advice given to a married daughter, but it is
equally applicable in the case of advice given to a son. [Tenchavez v.
Escaño, G.R. No. L-19671 (1965)].

3. Parent and child

Nowhere in the law is there a prohibition against a child suing the parent. A
child can bring a tort action for injuries inflicted on him by the parent
through excessive punishment.

By parity of reasoning, a parent can also institute a personal tort action

against the child under Art. 26, like an action for assault or battery. There is
no law which prohibits a parent from suing his own child on a personal tort
[Carpio, Antonio T., Intentional Torts in Philippine Law, supra].

4. Enticement

Under Art. 26, a parent may institute a tort action against a person who
entices a child away from home. The right to family relations is quite broad,
and includes within its embrace the right of parents to the custody of the
child. Hence, intruding upon the parents’ right to the child's custody is an
actionable tort under Art. 26.

Can a child sue his mother’s paramour for enticing her to leave the
conjugal home under Art. 26? Yes. The child can sue on the basis of
interference with family relations. Family relations include those between
ascendants and descendants. Moreover, a child has a right to an undisturbed
family life. He has an interest in the family honor and reputation for after all
he is part of the family and he will carry the family honor and reputation as
he grows up. When the mother is enticed away from the family home, the
child is deprived of the right to be educated by the parent, which includes the
moral and spiritual upbringing of the child, such as the guidance of his
conscience, the development of family affection and formation of his
character [Carpio, Antonio T., Intentional Torts in Philippine Law, supra].

b. Social relations

Art. 26, CC. Every person shall respect the dignity, personality, privacy
and peace ofmind of his neighbors and other persons. The following and
similar acts, though they may not constitute a criminal offense,
shallproduce a cause of action for damages,prevention and other relief: x x
x

(3) Intriguing to cause another to bealienated from his friends; x x x

The right to social relations embodied in Art. 26 imposes liability for

intriguing to cause another to be alienated from his friends. The word

696
intrigue implies malice or ill will, coupled with some scheme or secret plot
to bring about the desired purpose, that is, to alienate one from his friends
[Carpio, Antonio T., Intentional Torts in Philippine Law, supra].

c. Economic relations

1. Interference with contractual relations

Art. 1314, CC. Any person who induces another to violate his contract
with another person shall be liable for damages to the other contracting
party.

Elements of tort interference [So Ping Bun v. CA, G.R. No. 120554
(1999)]:
1. Existence of a valid contract
2. Knowledge on the part of the third person of the existence of contract; and
3. Interference of the third person iswithout legal justification or excuse.

Everyone has a right to enjoy the fruits and advantages of his own
enterprise, industry, skill and credit. He has no right to be protected against
competition; but he has a right to be free from malicious and wanton
interference, disturbance or annoyance. If disturbance or loss comes as a
result of competition, or the exercise of like rights by others, it is damnum
absque injuria, unless some superior right by contract or otherwise is
interfered with. Thus, a plaintiff loses his cause of action if the defendant
provides a sufficient justification for such interference, which must be an
equal or superior right in themselves. The defendant may not legally excuse
himself on the ground that he acted on a wrong understanding of his own
rights, or without malice, or bona fide, or in the best interests of himself
[Gilchrist v. Cuddy, G.R. No. 9356 (1915)].

Bad faith/Malice is required to make the defendant liable for damages in

cases of tortuous interference [So Ping Bun v. CA, supra].

2. Unfair Competition

Art. 28, CC. 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.

In order to qualify the competition as “unfair,” it must have two

characteristics [Willaware Products v. Jesichris Manufacturing, G.R. No.
195549 (2014)].
1. It must involve an injury to a competitor or trade rival; and
2. It must involve acts which are characterized as “contrary to good
conscience,” or “shocking to judicial sensibilities,” or otherwise unlawful. In

697
the language of our law, these include force, intimidation, deceit,
machination or any other unjust, oppressive or high-handed method.

When a person starts an opposing place of business, not for the sake of profit
to himself, but regardless of loss and for the sole purpose of driving his
competitor out of business so that later on he can take advantage of the
effects of his malevolent purpose, he is guilty of wanton wrong [Willaware
Products v. Jesichris Manufacturing, supra].

G. NEGLIGENCE
1. Concept
Art. 1173, CC. 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.

Negligence

It is the omission to do something which a reasonable man, guided by those

considerations which ordinarily regulate the conduct of human affairs,
would do, or the doing of something which a prudent and reasonable man
would not do [Layugan v. IAC, G.R. No. 73998 (1988)].

To determine whether or not a person has been negligent requires

determining 2 things:

1) the diligence required of the actor under the circumstances, and

2) whether the actor has performed the diligence required.

Failing the second requisite would lead to the conclusion that one has been
negligent.

By jumping into the sea, the employee failed to exercise even slight care and
diligence and displayed a reckless disregard of the safety of his person. His
death was caused by his notorious negligence. Notorious negligence has

698
been held to be tantamount to gross negligence which is want of even slight
care and diligence [Ameda v. Rio, G.R. No. L-6870 (1954)].

2. Good father of a family or reasonably prudent person

Pursuant to Art. 1173, the diligence of a good father of a family is the
standard of conduct if the law or contract does not provide otherwise.

Test to determine the existence of negligence: Did the defendant in doing

the alleged negligent act use that reasonable care and caution which an
ordinarily prudent man would have used in the same situation? If not, then
he is negligent. Negligence in a given case is not determined by reference to
the personal judgment of the actor in the situation before him, but is
determined in the light of human experience and the facts involved in the
particular case. Conduct is said to be negligent when a prudent man in the
position of the tortfeasor would have foreseen that an effect harmful to
another was sufficiently probable to warrant his foregoing the conduct or
guarding against its consequences [Picart v. Smith, G.R. No. L-12219
(1918)].

3. Standard of care; emergency rule

a. Standard of care needed in specific circumstances

Operators of Motor Vehicles

In Relation to Cyclists
Because of the inherent differences between motorists and cyclists, the
former being capable of greater speed and destruction, operators of motor
vehicles have a higher standard in his duty of care [Anonuevo v. CA, G.R.
No. 130003 (2004)].

Banks
The law imposes on banks high standards in view of the fiduciary nature of
banking. Section 2 of Republic Act No. 8791 (R.A. 8791), which took effect
on 13 June 2000, declares that the State recognizes the ‘fiduciary nature of
banking that requires high standards of integrity and performance.’ This
fiduciary relationship means that the bank’s obligation to observe high
standards of integrity and performance is deemed written into every deposit
agreement between a bank and its depositor. The fiduciary nature of banking
requires banks to assume a degree of diligence higher than that of a good
father of a family [Consolidated Bank v. CA, G.R. No. 138569 (2003)].

Experts (In General)

Those who undertake any work calling for special skills are required not
only to exercise reasonable care in what they do but also possess a standard
minimum of special knowledge and ability. In all employments where
peculiar skill is requisite, one who offers his services is understood as

699
holding himself out to the public as possessing the degree of skill commonly
possessed by others in the same employment [Far Eastern Shipping v. CA,
G.R. No. 130068 (1998)].

When a person holds himself out as being competent to do things requiring

professional skill, he will be held liable for negligence if he fails to exhibit
the care and skill of one ordinarily skilled in the particular work which he
attempts to do [Culion v. Philippine Motors, G.R. No 32611 (1930)].

Doctors
Whether or not a physician has committed an ‘inexcusable lack of
precaution’ in the treatment of his patient is to be determined according to
the standard of care observed by other members of the profession in
good standing under similar circumstances bearing in mind the advanced
state of the profession at the time of treatment of present state of medical
science. It is in this aspect of medical malpractice that expert testimony is
essential to establish not only the standard of care of the profession but also
that the physician’s conduct in the treatment and care falls below such
standard [Cruz v. CA, GR. No. 122445 (1997)].

Although resident physicians are subject to the same standard of care

applicable to attending physicians, a finding of negligence should also
depend on several competing factors, among them, the resident physician’s
authority to make his or her own diagnosis, the degree of supervision of the
attending physician over him or her, and the shared responsibility between
him or her and the attending physicians [Casumpang v. Cortejo, G.R. Nos.
171127, 171217 & 17122 (2015)].

Pharmacists
The profession of pharmacy, it has been said again and again, is one
demanding care and skill. Even under the first conservative expression,
“ordinary care” with reference to the business of a druggist…must be held to
signify “the highest practicable degree of prudence, thoughtfulness, and
vigilance, and most exact and reliable safeguards consistent with the
reasonable conduct of the business in order that human life may not
constantly be exposed to the danger flowing from the substitution of deadly
poisons for harmless medicine” [US v. Pineda, G.R. No. L-12858 (1918)].

Mistake is negligence and care is no defense [Mercury Drug v. de Leon,

G.R. No. 165622 (2008)].

Possessors of Extremely Dangerous Instrumentalities

[A] higher degree of care is required of someone who has in his possession
or under his control an instrumentality extremely dangerous in character,
such as dangerous weapons or substances. Such person in possession or
control of dangerous instrumentalities has the duty to take exceptional
precautions to prevent any injury being done thereby. Unlike the ordinary

700
affairs of life or business which involve little or no risk, a business dealing
with dangerous weapons requires the exercise of a higher degree of care
[Pacis v. Morales, G.R. No. 169467 (2010)].

Children
Take into account the specific characteristic of the child in question
The conduct of an infant of tender years is not to be judged by the same rule,
which governs that of an adult. …The care and caution required of a child is
according to his maturity and capacity only, and this is to be determined in
each case by the circumstances of the case [Taylor v. Manila Railroad, G.R.
No. 4977 (1910)].

“Age brackets” standard

No contributory negligence can be imputed to children below 9 years old
[Jarco Marketing v. CA, G.R. No. 129792 (1999)].

Measure the acts of the child against “average conduct of persons his age
and experience”
The degree of care required to be exercised must vary with the capacity of
the person endangered to care for himself. …The standard of conduct to
which a child must conform for his own protection is that degree of care
ordinarily exercised by children of the same age, capacity, discretion,
knowledge and experience under the same or similar circumstances
[Ylarde v. Aquino, G.R. No. L- 33722 (1988)].

b. Emergency rule

An individual who suddenly finds himself in a situation of danger and is

required to act without much time to consider the best means that may be
adopted to avoid the impending danger, is not guilty of negligence if he fails
to undertake what subsequently and upon reflection may appear to be a
better solution, unless the emergency was brought by his own negligence
[Gan v. CA, GR. No. 44264 (1988)].

4. Unreasonable risk of harm

Negligence, as it is commonly understood, is a conduct that creates an undue
risk of harm to others. [Valenzuela v. CA, 253 SCRA 303 (1996)].

However, in negligence, risk means a danger which is apparent, or should be

apparent, to one in the position of the actor. [Prosser and Keeton, pp. 169-
170]. Such type of risk is unreasonable risk. If such unreasonable risk results
in injury to the plaintiff, the latter can recover from the defendant. [Phoenix
Construction vs. IAC, G.R. No. L-65295 (1987)].

5. Evidence
Rule 131. Sec. 1, ROC. Burden of proof. — Burden of proof is the duty of
a party to present evidence on the facts in issue necessary to establish his

701
 claim or defense by the amount of evidence required by law.

Rule 131. Sec. 3, ROC. Disputable presumptions. — The following

presumptions are satisfactory if uncontradicted, but may be contradicted
and overcome by other evidence: x x x
(d) That a person takes ordinary care of his concerns; x x x

Rule 133. Sec. 1, ROC. Preponderance of evidence, how determined. —

In civil cases, the party having burden of proof must establish his case by a
preponderance of evidence. x x x

General rule

In accordance with the fundamental principle of proof that the burden

thereof is upon the plaintiff, it is the duty of him who shall claim damages to
establish their existence.

Negligence is not presumed, but must be proven by him who alleges it.
[Taylor v. Manila Electric Railroad, G.R. No. L-4977 (1910), citing
Scaevola, Jurisprudencia del Codigo Civil, vol. 6, pp. 551, 552].

It is presumed that a person takes ordinary care of his concerns [Rule 131,
Sec. 3(d), Rules of Court].

The quantum of proof required is a preponderance of evidence [Rule 133,

Sec.1, Rules of Court].

Exception

There are exceptional cases when the rules or the laws provide for cases
when negligence is presumed [See G.6. Presumption of Negligence].

6. Presumption of negligence
a. In motor vehicle mishaps

1. Liability of the owner

Art. 2184, CC. In motor vehicle mishaps, the owner is solidarily liable

702
 with his driver, if the former, who was in the vehicle, could have, by the
use of the due diligence, prevented the misfortune. x x x

If the owner was not in the motor vehicle, the provisions of Article 2180
are applicable.

Art. 2186, CC. Every owner of a motor vehicle shall file with the proper
government office a bond executed by a governmentcontrolled 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.

The owner is solidarily liable with the driver for motor vehicle mishaps
when:
a. The owner was inside the vehicle at the time; and
b. The owner could have, by the use of due diligence, prevented the
misfortune.

If the owner was not inside the vehicle, he may be held liable under Art.
2180.

The presumption is against the owner of the motor vehicle. He has the
burden of proving due diligence. Thus, once a driver is proven negligent in
causing damage, the law presumes the vehicle owner equally negligent
and imposes upon the latter the burden of proving proper selection and
supervision of the employee as a defense [Carticiano v. Nuval, G.R. No.
138054 (2000), citing Sangco, Philippine Law on Torts and Damages, Vol.
II, 1994 ed., pp. 555-556].

The registered owner/operator of a passenger vehicle is jointly and severally

liable with the driver for damages incurred by passengers or third persons as
a consequence of injuries or death sustained in the operation of said vehicles.
Regardless of who the actual owner of a vehicle is, the operator of record
continues to be the operator of the vehicle as regards the public and third
persons and as such is directly and primarily responsible for the
consequences incident to its operation, so that in contemplation of law, such
owner/operator of record is the employer of the driver, the actual operator
and employer being considered merely as his agent [Vargas v. Langcay,
G.R. No. 17459 (1962)].

The registered owner of a motor vehicle is primarily liable for the damage or
injury caused to another, but he has a right to be indemnified by the real
owner of the amount he was required to pay. This rule applies both to private
and to common carriers with respect to their passengers [Tamayo v. Aquino,
G.R. No. L- 12634 (1959)].

The law does not require that a person must possess a certain measure of
skill or proficiency either in the mechanics of driving or in the observance of

703
traffic rules before he may own a motor vehicle. The test of his negligence,
within the meaning of Article 2184, is his omission to do that which the
evidence of his own senses tells him he should do in order to avoid the
accident. And as far as perception is concerned, absent a minimum level
imposed by law, a maneuver that appears to be fraught with danger to one
passenger may appear to be entirely safe and commonplace to another. Were
the law to require a uniform standard of perceptiveness, employment of
professional drivers by car owners who, by their very inadequacies, have
real need of drivers’ services, would be effectively proscribed [Caedo v. Yu
Khe Tai, G.R. No. L-20392 (1968)].

The owner of the motor vehicle is not liable for the misfortune unless the
negligent acts of the driver are continued for such a length of time as to give
the owner a reasonable opportunity to observe them and to direct his driver
to desist therefrom. 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 [Chapman v. Underwood, G.R. No. L-9010
(1914)].

2. Liability of the driver

Art. 2184, CC. x x x 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.

Art. 2185, CC. 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.

Art. 2184 establishes a presumption of negligence on the part of the driver

based on previous violations of traffic regulations.

Art. 2185 establishes a presumption of negligence on the basis of

simultaneous violations.

Under Article 2185, a legal presumption of negligence arises if at the time of

the mishap, a person was violating any traffic regulation.
However, a causal connection must exist between the injury received and
the violation of the traffic regulation. It must be proven that the violation of
the traffic regulation was the proximate or legal cause of the injury or that it
substantially contributed thereto [Tison v. Sps. Tomasin, G.R. No. 173180
(2011)].

Despite the presumption of negligence arising from the traffic regulation

violation, the claimant must still prove that such negligence was the
proximate cause in order to successfully claim for damages [Sanitary Steam
v. CA, G.R. No. 119092 (1998)].

704
Article 2185 was not formulated to compel or ensure obeisance by all to
traffic rules and regulations. It does not apply to non-motorized vehicles, in
recognition of the unequal footing of standards applicable to motor vehicles
as opposed to other types of vehicles [Añonuevo v. CA, supra].

b. Possession of dangerous weapons or substances

Art. 2188, CC. 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.

c. Common carriers

Art. 1734, CC. 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, CC. 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. 1752, CC. 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.

d. Res ipsa loquitur

Definition
Literally, res ipsa loquitur means “the thing speaks for itself” [Professional
Services, Inc. v. Agana, G.R. No. 126297(2007)].

Statement of the Rule

Where the thing which causes injury is shown to be under the management
of the defendant (or his servants), and the accident is such as in the ordinary

705
course of things does not happen if those who have the management (or
control) used proper care, it affords reasonable evidence, in the absence of
an explanation by the defendant, that the accident arose from (or was caused
by the defendants) want of care [Tan v. JAM Transit, G.R. No. 183198
(2009)].

Where the thing which caused the injury, without the fault of the injured,
is under the exclusive control of the defendant and the injury is such that it
should not have occurred if he, having such control used proper care, it
affords reasonable evidence, in the absence of explanation that the injury
arose from the defendant’s want of care, and the burden of proof is shifted to
him to establish that he has observed due care and diligence [Professional
Services v. Agana, G.R. No. 126297(2007)].

Elements [Ramos v. CA, G.R. No. 124354 (1999)]

1. The accident is of a kind which ordinarily does not occur in the absence of
someone’s negligence;
2. It is caused by an instrumentality within the exclusive control of the
defendant or defendants; and
3. The possibility of contributing conduct, which would make the plaintiff
responsible, is eliminated.

Note: In Professional Services v. Agana, supra, the Court added “the

absence of explanation by the defendant” as a fourth element.

1st element: Nature of the accident

As a matter of common knowledge and experience, the very nature of
certain types of occurrences may justify an inference of negligence on the
part of the person who controls the instrumentality causing the injury in the
absence of some explanation by the defendant who is charged with
negligence [Ramos v. CA, supra].

2nd element: Control over the cause

Of the three elements, the fundamental element is the “control of
instrumentality” which caused the damage. Such element of control must be
shown to be within the dominion of the defendant [Ramos v. CA, supra].

General rule: The instrumentality causing the injury must be under the
exclusive control of the person sought liable.
Exception: “Control and management” is sufficient [Professional Services v.
Agana, supra].

3rd element: No contribution to the injury from the injured

It is not necessary that the plaintiff be completely inactive, but merely that
there be evidence removing the inference of the plaintiff’s own
responsibility [Prosser and Keeton, supra at 254].

706
Effect of direct evidence
Res ipsa loquitur can only be invoked when under the circumstances
involved, direct evidence of negligence or direct cause of the injury is
absent and not readily available.

It has generally been held that the presumption of inference arising from the
doctrine cannot be availed of, or is overcome, where plaintiff has knowledge
and testifies or presents evidence as to the specific act of negligence which is
the cause of the injury complained of or where there is direct evidence as to
the precise cause of the accident and all the facts and circumstances
attendant on the occurrence clearly appear [Layugan v. IAC, G.R. No. 73998
(1988)]

However, notwithstanding the doctrine in Layugan, it does not mean that res
ipsa loquitur can only be invoked in the complete absence of other evidence.
The rule allows the plaintiff to present enough of the attending
circumstances to invoke the doctrine, “along with the proof of the accident”
[Ramos v. CA, supra].

Nature of the rule

Res ipsa loquitur is in the nature of a procedural rule, a rule of evidence and
not a rule of substantive law; thus, it does not create or constitute an
independent or separate ground of liability. It is merely a mode of proof or a
mere procedural convenience. It is a rule peculiar to the law of negligence
that recognizes that prima facie negligence may be established without
direct proof and furnishes a substitute for specific proof of negligence and
relieves a plaintiff of the burden of producing specific proof of negligence
[Ramos v. CA, supra].

Effect of the rule

Mere invocation and application of the doctrine does not dispense with the
requirement of proof of negligence. It is simply a step in the process of such
proof, permitting the plaintiff to present along with the proof of the accident,
enough of the attending circumstances to invoke the doctrine, creating an
inference or presumption of negligence, and to thereby place on the
defendant the burden of going forward with the proof [Ramos v. CA, supra].

Res Ipsa Loquitur vs. expert testimony in medical negligence cases

It is apparent that medical negligence cases are best proved by opinions of
expert witnesses belonging in the same general neighborhood and in the
same general line of practice as defendant physician or surgeon [Lucas v.
Tuaño, G.R. No. 178763 (2009)].

Expert testimony is essential to establish the standard of care of the

profession and whether or not the physician’s conduct in the treatment and
care falls below such standard. Inasmuch as the causes of the injuries
involved in malpractice actions are determinable only in the light of

707
scientific knowledge, expert testimony is usually necessary to support the
conclusion as to causation [Cruz v. CA, supra].

When the doctrine of res ipsa loquitur is availed by the plaintiff, the need
for expert medical testimony is dispensed with because the injury itself
provides the proof of negligence. The reason is that the general rule on the
necessity of expert testimony applies only to such matters clearly within the
domain of medical science, and not to matters that are within the common
knowledge of mankind which may be testified to by anyone familiar with
the facts [Ramos v. CA, supra].

7. Defenses
a. Due Diligence to Prevent the Damage under Art. 2180, CC.

Art. 2180, CC. 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.
xxx
(8) 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.

The presumption of negligence on the part of the master or employer, either

in the selection of servant/employee or in the supervision, when an injury is
caused by the negligence of a servant/employee may be rebutted if the
employer shows to the satisfaction of the court that in the selection and
supervision, he has exercised the care and diligence of a good father of a
family [Ramos v. PEPSI, G.R. No. L-22533 (1967)].

b. Acts of Public Officers

A public officer is not liable for damages which a person may suffer arising
from the just performance of his official duties and within the scope of his
assigned tasks. An officer who acts within his authority to administer the
affairs of the office which he/she heads is not liable for damages that may
have been caused to another, as it would virtually be a charge against the
Republic, which is not amenable to judgment for monetary claims without
its consent. However, a public officer is by law not immune from damages
in his/her personal capacity for acts done in bad faith which, being outside
the scope of his authority, are no longer protected by the mantle of immunity
for official actions. [Vinzons-Chato v. Fortune, G.R. No. 141309 (2008)].

c. Authority of Law

Art. 5, CC. Acts executed against the provisions of mandatory or

prohibitory laws shall be void, except when the law itself authorizes their
validity.

708
 Art. 11, RPC. The following do not incur any criminal liability: xxx
(5) Any person who acts in the fulfillment of a duty or in the lawful
exercise of a right or office xxx
(8) Any person who acts in obedience to an order issued by a superior for
some lawful purpose.

d. Damnum Absque Injuria

There can be damage without injury in those instances in which the loss or
harm was not the result of a violation of a legal duty.

Right to recover damages does not arise from the mere fact that the plaintiff
suffered losses. To warrant the recovery of damages, there must be both a
right of action for a legal wrong inflicted by the defendant, and damage
resulting to the plaintiff therefrom. Wrong without damage, or damage
without wrong, does not constitute a cause of action, since damages are
merely part of the remedy allowed for the injury caused by a breach or
wrong [Custodio v. CA, G.R. No. 116100 (1996)].

One who made use of his own legal right does no injury, thus, whatever
damages are caused to another should be borne solely by him under the
principle of damnum absque injuria. This principle, however, does not apply
when there is an abuse in the exercise of a person’s right. [Amonoy v.
Gutierrez, G.R. No. 140420 (2001)]

e. Plaintiff’s Negligence is the Proximate Cause

Art. 2179, CC. When the plaintiff’s own negligence was the proximate
cause of his injury, he cannot recover damages. x x x

This defense of plaintiff’s negligence as proximate cause is absolute, for it

bars recovery on the part of the plaintiff. In Manila Electric v. Remoquillo,
supra, the Court did not allow recovery by Magno, ruling that his death was
primarily caused by his own negligence and in some measure by the too
close proximity of the “media agua” to the electric wire.

If the plaintiff in a negligence action, by his own carelessness contributed to

the principal occurrence, that is, to the accident, as one of the determining
causes thereof, he cannot recover [Bernardo v. Legaspi, G.R. No. 9308
(1914)].

f. Contributory Negligence of the Plaintiff

Art. 2179, CC. x x x But if his negligence was only contributory, the
immediate and proximate cause of the injury being the defendant's lack of
due care, the plaintiff may recover damages, but the courts shall mitigate
the damages to be awarded.

709
 Art. 2214, CC. In quasi-delicts, the contributory negligence of the plaintiff
shall reduce the damages that he may recover.

Definition
Contributory negligence is conduct on the part of the injured party,
contributing as a legal cause to the harm he has suffered, which falls below
the standard which he is required to conform for his own protection. There is
contributory negligence when the party’s act showed lack of ordinary care
and foresight that such act could cause him harm or put his life in danger
[NPC v. Heirs of Casionan, G.R. No. 165969 (2008)].

Contributory negligence does not defeat an action if it can be shown that the
defendant might, by the exercise of reasonable care and prudence, have
avoided the consequences of the injured party's negligence. Where the
plaintiff contributes to the principal occurrence as one of its determining
factors, he cannot recover. Where, in conjunction with the occurrence, he
contributes only to his own injury, he may recover the amount that the
defendant responsible for the event should pay for such injury, less a sum
deemed a suitable equivalent for his own imprudence [MH Rakes v. Atlantic,
G.R. No. L-1719 (1907)].

The defense of contributory negligence does not apply in criminal cases

committed through reckless imprudence, since one cannot allege the
negligence of another to evade the effects of his own negligence
[Genobiagon v. CA, G.R. No. 40452 (1989)].

g. Fortuitous Event

Art. 1174, CC. 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.

Elements of caso fortuito [Juntilla v. Fontanar, G.R. No. L-45637 (1985)]:

1. The cause of the unforeseen and unexpected occurrence, or of the failure
of the debtor to comply with his obligation, must be independent of the
human will;
2. It must be impossible to foresee the event or if it can be foreseen, it must
be impossible to avoid;
3. The occurrence must be such as to render it impossible for the debtor to
fulfill his obligation in a normal manner; and
4. The obligor must be free from any participation in the aggravation of
the injury resulting to the creditor.

h. Plaintiff’s Assumption of Risk/Volenti Non Fit Unjuria

710
The doctrine of volenti non fit injuria (that to which a person assents is not
presumed in law as injury) refers to self-inflicted injury 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 [Nikko Hotel v. Reyes, G.R. No. 154259, (2005)].

Requisites [Abrogar v. Cosmos Bottling, G.R. No. 164749 (2017)]:

1. That the plaintiff had actual knowledge of the danger;
2. That he understood and appreciated the risk from the danger; and
3. That he voluntarily exposed himself to such risk.

The doctrine of assumption of risk does not apply in the ff. cases:
1. If an emergency is found to exist or if the life or property of another is
in peril or when he seeks to rescue his endangered property [Ilocos Norte
v. CA, G.R. No. 53401 (1989)].
2. Even if respondent Reyes assumed the risk of being asked to leave the
party, petitioners, under Articles 19 and 21 of the CC, were still under the
obligation to treat him fairly in order not to expose him to unnecessary
ridicule and shame [Nikko Hotel v. Roberto Reyes, supra].

i. Prescription

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.

Art. 1150, CC. The time for prescription for all kinds of actions, when
there is no special provision which ordains otherwise, shall be counted
from the day they may be brought.

Prescription periods:
 4 years for quasi-delict
 1 year for defamation [Art. 1147, CC]

It is clear that the prescriptive period must be counted when the last element
occurs or takes place, the time of the commission of an act or omission
violative of the right of the plaintiff, which is the time when the cause of
action arises. Thus, the prescription period begins from the day the quasi-
delict is committed [Kramer v. CA, G.R. No. 83524 (1989)].

j. Waiver

Art. 6, CC. 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.

711
 Art. 1171, CC. Responsibility arising from fraud is demandable in all
obligations. Any waiver of an action for future fraud is void.

k. Emergency Rule or Sudden Peril

[See G.3.b. Emergency Rule.]

H. SPECIAL LIABILITY IN PARTICULAR ACTIVITIES

1. In general; concepts
While any person may be liable for a quasidelict or tort, the law has also
identified specific individuals as being liable for particular types of injuries
under certain conditions.

2. Products liability; manufacturers or processors

Art. 2187, CC. 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.

Under the foregoing provision, liability is not made to depend upon fault or
negligence of the manufacturer or processor. The provision likewise
dispensed with any contractual relation between the manufacturer and the
consumer, thereby clearly implying that liability is imposed by law as a
matter of public policy.

Requisites of Liability

1. Defendant is a manufacturer or possessor of foodstuff, drinks, toilet

articles and similar goods;

2. He used noxious or harmful substances in the manufacture or processing

of the foodstuff, drinks or toilet articles consumed or used by the plaintiff;

3. Plaintiff’s death or injury was caused by the product so consumed or used;

and

4. The damages sustained and claimed by the plaintiff and the amount
thereof.

Burden of proof

712
The burden of proof that the product was in a defective condition at the time
it left the hands of the manufacturer and particular seller is upon the injured
plaintiff.

Who may recover

Although the article used the term “consumer”, such term includes a “user”
and “purchaser” of the injuriously defective food product or toilet article.
The person who may recover need not be the purchaser of the foodstuff or
toilet article.

3. Nuisance
Art. 694, CC. 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

Definition of a Nuisance

A nuisance is that which unlawfully annoys or does damage to another, or

anything that works an injury, harm or prejudice to an individual or the
public. The term “nuisance” is applied to that class of wrongs which arises

from the unreasonable, unwarrantable, or unlawful use by a person of his

own property, and which produces such material annoyance, inconvenience,
discomfort or hurt, that the law will presume a consequent damage.

NUISANCE NEGLIGENCE
Whether it was unreasonable for the Whether the defendant’s use of his
defendant to act as he did in view of property was unreasonable as to the
the threatened danger or harm to plaintiff, without regard to
one in plaintiff’s position. foreseeability of injury.
Liability is for the resulting injury Liability is based on a want of
to others regardless of the degree of proper care
care or skill exercised to avoid such
injury

713
 Principles ordinarily apply where Principles ordinarily apply where
the cause of action is for continuing the cause of action is for harm
harm caused by continuing or resulting from one act which created
recurrent acts which cause an unreasonable risk of injury.
discomfort or annoyance to plaintiff
in the use of his property.

Art. 695, CC. 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.

a. Classification of Nuisances

1. According to Nature

Nuisance per se or at law

This is an act, occupation or structure which is a nuisance at all times and

under any circumstances, regardless of location or surroundings. Examples
include gambling houses, houses of ill fame, etc.

Nuisance per accidens or in fact

This becomes a nuisance by reason of particular facts and circumstances

surrounding the otherwise harmless cause of the nuisance.

2. According to Scope of Injurious Effects Public

This nuisance is a direct encroachment upon public rights or property. It is

the doing of or failure to do something that injuriously affects the safety,
health or morals of the public, or works some substantial annoyance,
inconvenience, or injury to the public. An example would be a house
constructed on a public street or a river bed, since this obstructs at all times

714
the free use by the public of the said properties.

Private

This nuisance is one which violates only private rights and produces damage
to but one or a few persons.

Mixed

It may be a public nuisance because it violates public rights to the injury of

many persons, and it may also be private in character in that it produces
special injury to private rights to any extent beyond the injury to the public.

Art. 696, CC. 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, CC. The abatement of a nuisance does not preclude the right of
any person injured to recover damages for its past existence.

Art. 699, CC. The remedies against a public nuisance are:

(1) A prosecution under the Penal Code or any local ordinance; or
(2) A civil action; or
(3) Abatement, without judicial proceedings.

Criminal prosecution is only for a public nuisance, not a private one.

Public nuisances are offenses against the State.

Art. 703, CC. A private person may file an action on account of a public
nuisance, if it is specially injurious to himself.

An individual has no right of action against a public nuisance. However,

an individual who has suffered some special damage different from that
sustained by the general public, may maintain a suit in equity for an
injunction to abate it, or an action for damages which he has sustained. If
an individual has suffered a particular harm, the action becomes a tort, in
which case the nuisance is treated as a private nuisance with respect to
such person.

Art. 704, CC. Any private person may abate a public nuisance which is
specially injurious to him by removing, or if necessary, by destroying the
thing which constitutes the same, without committing a breach of the

715
 peace, or doing unnecessary injury. But it is necessary:
(1) That demand be first made upon the owner or possessor of the property
to abate the nuisance;
(2) That such demand has been rejected;
(3) That the abatement be approved by the district health officer and
executed with the assistance of the local police; and
(4) That the value of the destruction does not exceed three thousand pesos.

Art. 705, CC. The remedies against a private nuisance are:

(1) A civil action; or
(2) Abatement, without judicial proceedings.

Art. 706, CC. Any person injured by a private nuisance 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, CC. A private person or a public official extrajudicially abating a

nuisance shall be liable for damages:
(1) If he causes unnecessary injury; or
(2) If an alleged nuisance is later declared by the courts to be not a real
nuisance.

b. Extrajudicial Abatement

The remedy of extrajudicial abatement is available:

1. When there is a public nuisance; or

2. When there is a private nuisance, but the destruction of the thing must not
exceed P3,000.

Requisite for the exercise of the right to extrajudicially abate nuisances:

1. The right must be exercised only in cases of urgent or extreme

necessity, and if such nuisance is especially injurious to him.
The summary abatement should be resorted to within a
reasonable time after knowledge of the nuisance.
2. Demand to abate the nuisance must be made on the owner of
the property originating the nuisance, and such demand must
have been rejected.

716
 3. Notice of the intention to abate must be given to the one
causing the nuisance, within a reasonable time.
4. The abatement must be approved by the District Health Officer.
5. The local police must assist in the exercise of the right to abate
extrajudicially.
6. The means employed must be reasonable, without causing any
breach of peace or unnecessary injury. The property must not
be destroyed, unless it is absolutely necessary to do so.

c. Defenses to action on nuisances

1. Public necessity

Private interest must yield to the public good. The creation of a nuisance
amounts to taking of property; therefore, just compensation must be made.

2. Estoppel

One who voluntarily places himself in a situation whereby he suffers an

injury will not be heard to say that his damage is due to a nuisance
maintained by another.

3. Non-existence of the nuisance

4. Impossibility of abatement

PUBLIC NUISANCE PRIVATE NUISANCE

Definition Affects a community or Affects the individual or a
neighborhood number of individuals only
or any considerable
number of persons,
although the extent of the
annoyance, danger, or
damage upon individuals
may be unequal
Remedies Criminal prosecution, civil Civil action (abatement,

717
 action (abatement, damages, injunction),
damages, injunction), extrajudicial abatement
extrajudicial abatement
Who may City or municipal mayor, Any private person injured
institute private person (only if the by the nuisance
the complaint nuisance is especially
injurious to him)

4. Violation of constitutional rights; violation of civil liberties

Persons who violate constitutional rights and civil liberties are liable for
damages, regardless of whether the act or omission which lead to
impairment of such rights constitutes a criminal offense.

Art. 32, CC. 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 just compensation when property is taken for
public use
8. The right to 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 right to privacy of communication and correspondence
12.The right to become a member of associations and societies
for purposes not contrary to law
13.The right to take part in a peaceable assembly and 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 the cause of the accusation
against him, to have a speedy and public trial, to meet the
witnesses face to face, to have compulsory process to secure
the attendance of witnesses on is behalf;
17.Freedom from being compelled to be a witness against one’s
self, or from being forced to confess his guilt, or from being

718
 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;
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 any other
penal statute.

Art. 32, CC
Speaks of a particular specie of an “act” that may give rise to an action for
damages against a public officer, and that is, a tort for impairment of rights
and liberties. [Vinzons-Chato v. Fortune, supra]

Not only public officers but also private individuals can incur civil liability
for violation of rights enumerated therein. Because the provision speaks of
an officer, employee or person “directly or indirectly” responsible for the
violation of the constitutional rights and liberties of another, it is not the
actor alone who must answer for damages under Article 32. It is not even
necessary that the defendant should have acted with malice or bad faith,
otherwise, it would defeat its main purpose, which is the effective protection
of individual rights. [Silahis v. Soluta, G.R. No. 163087 (2006)]

It is obvious that the purpose of Art. 32 is to provide a sanction to the deeply

cherished rights and freedoms enshrined in the Constitution.

Its message is clear; no man may seek to violate those sacred rights with
impunity. In times of great upheaval or of social and political stress, when
the temptation is strongest to yield. [Aberca, et al. v. Ver, et al., G.R. No.
69866(1988)].

5. Violation of rights committed by public officers

Art. 34, CC. When a member of a city or municipal police force refuses or

719
 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. 34 covers a situation where

a. There is danger to the life or property of a person;

b. A member of a city or municipal police force who is present in the scene

refused or failed to render aid or protection to the person; and

c. Damages are caused whether to the person and/or property of the victim.

Nature of liability

a. Of the police officer – Primary

b. City or municipality – Subsidiary

The defense of having observed the diligence of a good father of a family to

prevent the damage is not available to the city/municipality.

6. Provinces, cities and municipalities

Art. 2189, CC. 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.

It is not even necessary that the defective roads or streets belong to the
province, city or municipality for liability to attach. The article only requires
that either control or supervision be exercised over said street or road
[Guilatco v. Dagupan, G.R. No. 61516 (1989)].

7. Owner of motor vehicle

Art. 2184, CC. 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

720
 presumed that a driver was negligent, if he had been found guilty or
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.

Art. 2180 (5), CC. 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.

Art. 2186, CC. Every owner of a motor vehicle shall file with the proper
government office a bond executed by a governmentcontrolled 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.

The owner is solidarily liable with the driver for motor vehicle mishaps
when:

a. The owner was IN the vehicle at the time, AND

b. The owner could have, by the use of due diligence, prevented the
misfortune.

Note: If the owner was NOT inside the vehicle, Art. 2180 applies.

The presumption is against the owner of the motor vehicle. He has the
burden of proving due diligence. Thus, once a driver is proven negligent in
causing damage, the law presumes the vehicle owner equally negligent and
imposes upon the latter the burden of proving proper selection and
supervision of employee as a defense.

As held in Vargas v. Langcay [G.R. No. 17459 (1962)], “the registered

owner/operator of a passenger vehicle is jointly and severally liable with the
driver for damages incurred by passengers or third persons as a consequence
of injuries or death sustained in the operation of said vehicles. Regardless of
who the actual owner of a vehicle is, the operator of record continues to be
the operator of the vehicle as regards the public and third persons and as

721
such is directly and primarily responsible for the consequences incident to
its operation, so that in contemplation of law, such owner/operator of record
is the employer of the driver, the actual operator and employer being
considered merely as his agent.”

The registered owner of a motor vehicle is primarily liable for the damage or
injury caused to another, but he has a right to be indemnified by the real
owner of the amount he was required to pay. This rule applies both to private
and to common carriers with respect to their passengers [Tamayo v. Aquino,
G.R. No. L- 12634 (1959)].

The law does not require that a person must possess a certain measure of
skill or proficiency either in the mechanics of driving or in the observance of
traffic rules before he may own a motor vehicle. The test of his negligence,
within the meaning of Article 2184, is his omission to do that which the
evidence of his own senses tells him he should do in order to avoid the
accident. And as far as perception is concerned, absent a minimum level
imposed by law, a maneuver that appears to be fraught with danger to one
passenger may appear to be entirely safe and commonplace to another. Were
the law to require a uniform standard of perceptiveness, employment of
professional drivers by car owners who, by their very inadequacies, have
real need of drivers' services, would be effectively proscribed [Caedo v. Yu
Khe Tai, G.R. No. L-20392 (1968)].

The owner of the motor vehicle is not liable for the misfortune unless the
negligent acts of the driver are continued for such a length of time as to give
the owner a reasonable opportunity to observe them and to direct his driver
to desist therefrom. 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 [Chapman v. Underwood, G.R. No. L-9010
(1914)].

ART. 2180 (5) ART. 2184

Relations hip of Employer - employee Need not establish
Owner & Driver Employer-employee
relationship

722
 Car owner’s Not required at the time
Required at the time of the
presence of the mishap. mishap
Presumption of On owner’s part, when On driver’s part, when he
negligence his driver is negligent
has been found guilty of
reckless driving/violating
traffic violations at least
twice within the next
preceding 2 months
Defense Good father of a family Due diligence to prevent
in employment and mishap (greatly subjective)
supervision
Owner’s liability Primary—He may Solidary—The full amount
recover the full amount may be pursued against
from the driver, as per him, but he may only
Art. 2181 recover the pro rata share as
to the amount for which he
is liable

8. Proprietor of building or structure or thing

Art. 2190, CC. 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.

Art. 2191, CC. 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.

Art. 2192, CC. 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 accordance with said article, within the period
therein fixed.

723
Ownership of a building imposes on the proprietor thereof the duty to
maintain it in good condition at all times to the end that it may not collapse
either totally or partially as to cause damage or injury to another’s person or
property. This duty obtains whether the building is leased or held in
usufruct. Considering, however, that the lessee or usufructuary has direct
and immediate control of the building, the law imposes on him the duty to
notify the proprietor of such urgent or extraordinary repairs. And where the
proprietor’s failure to make the necessary repairs was due to the failure of
the lessee or usufructuary to notify him, the proprietor is entitled to
indemnification for damages he may have been required to pay to the
parties.

Liability does not attach to the proprietor if the damage was caused by any
defect in the construction mentioned in Article 1723, in which case the
action should be against the engineer or architect.

Under Article 2190, the plaintiff is required to prove

1. The total or partial collapse of a building or structure

2. That the defendant is the proprietor

3. That the collapse was due to the lack of necessary repairs

Note: There is no requirement to prove negligence.

Under Article 2191, with the exception of No. 1, negligence is also not an
issue.

The owner or proprietor of a place of public amusement impliedly warrants

that the premises, appliances and amusement devices are safe for the
purpose for which they are designed, the doctrine being subject to no other
exception or qualification than that he does not contract against unknown
defects not discoverable by ordinary or reasonable means [Gotesco
Investment Corp. v. Chatto, G.R. No. 87584 (1992)].

724
Liability of Engineer or architect of collapsed building

Art. 1723, CC. The engineer or architect who drew up the plans and
specifications for a building is liable for damages if within fifteen years
from the completion of the structure, the same should collapse by reason
of a defect in those plans and specifications, or due to the defects in the
ground. The contractor is likewise responsible for the damages if the
edifice falls, within the same period, on account of defects in the
construction or the use of materials of inferior quality furnished by him, or
due to any violation of the terms of the contract. If the engineer or
architect supervises the construction, he shall be solidarily liable with the
contractor.

Acceptance of the building, after completion, does not imply waiver of

any of the cause of action by reason of any defect mentioned in the
preceding paragraph.

The action must be brought within ten years following the collapse of the
building.

Engineer or architect who drew up the plans and specifications is liable if the
building collapses within 15 years due to:

1. A defect in those plans and specifications; or

2. Due to the defects in the ground.

Contractor is liable if the edifice falls within 15 years due to:

1. Defects in the construction;

2. The use of materials of inferior quality furnished by the contractor; or

3. Due to any violation of the terms of the contract.

Here, the plaintiff need only prove that such conditions (defects) exist and
need not prove that negligence of the defendant be the cause of the
conditions.

725
9. Head of family
Art 2193, CC. 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.

The purpose of the law is to relieve the injured party of the difficulty of
determining and proving who threw the thing or what caused it to fall, or
that either was due to the fault or negligence of any particular individual.

Lessee is considered as the head of the family. It is enough that he lives in

and has control over it [Dingcong v. Kanaan, G.R. No. L-47033 (1941)].

10. Violations of data privacy

The right to data privacy is the right of an individual not to have private
information about himself disclosed, and to live freely from surveillance and
intrusion.

RA 10173, or the Data Privacy Act, protects individuals from unauthorized

processing of personal information that is (1) private, not publicly available;
and (2) identifiable, where the identity of the individual is apparent either
through direct attribution or when put together with other available
information.

DATA PRIVACY ACT OF 2012 RA 10173

Section 3. Definition of Terms.
(g) Personal information refers to any information whether recorded in a
material form or not, from which the identity of an individual is apparent
or can be reasonably and directly ascertained by the entity holding the
information, or when put together with other information would directly
and certainly identify an individual.

(h) Personal information controller refers to a person or organization who

controls the collection, holding, processing or use of personal information,
including a person or organization who instructs another person or
organization to collect, hold, process, use, transfer or disclose personal
information on his or her behalf. The term excludes:
(1) A person or organization who performs such functions as
instructed by another person or organization; and
(2) An individual who collects, holds, processes or uses personal
information in connection with the individual’s personal,
family or household affairs.

(k) Privileged information refers to any and all forms of data which under

726
the Rules of Court and other pertinent laws constitute privileged
communication.

(l) Sensitive personal information refers to personal information:

(1) About an individual’s race, ethnic origin, marital
status, age, color, and religious, philosophical or
political affiliations;
(2) About an individual’s health, education, genetic or
sexual life of a person, or to any proceeding for any
offense committed or alleged to have been committed
by such person, the disposal of such proceedings, or
the sentence of any court in such proceedings;
(3) Issued by government agencies peculiar to an
individual which includes, but not limited to, social
security numbers, previous or current health records,
licenses or its denials, suspension or revocation, and
tax returns; and
(4) Specifically established by an executive order or an
act of Congress to be kept classified.

Section 4. Scope. – This Act applies to the processing of all types of

personal information and to any natural and juridical person involved in
personal information processing including those personal information
controllers and processors who, although not found or established in the
Philippines, use equipment that are located in the Philippines, or those
who maintain an office, branch or agency in the Philippines subject to the
immediately succeeding paragraph: Provided, That the requirements of
Section 5 are complied with.
This Act does not apply to the following:
(a) Information about any individual who is or was an
officer or employee of a government institution that
relates to the position or functions of the individual,
including:
(1) The fact that the individual is or was an officer or employee of the
government institution;
(2) The title, business address and office telephone number of the
individual;
(3) The classification, salary range and responsibilities of the position
held by the individual; and
(4) The name of the individual on a document prepared by the
individual in the course of employment with the government;
(b) Information about an individual who is or was
performing service under contract for a government
institution that relates to the services performed,
including the terms of the contract, and the name of
the individual given in the course of the performance

727
 of those services;
(c) Information relating to any discretionary benefit of a
financial nature such as the granting of a license or
permit given by the government to an individual,
including the name of the individual and the exact
nature of the benefit;
(d) Personal information processed for journalistic,
artistic, literary or research purposes;
(e) Information necessary in order to carry out the
functions of public authority which includes the
processing of personal data for the performance by
the independent, central monetary authority and law
enforcement and regulatory agencies of their
constitutionally and statutorily mandated functions.
Nothing in this Act shall be construed as to have
amended or repealed Republic Act No. 1405,
otherwise known as the Secrecy of Bank Deposits
Act; Republic Act No. 6426, otherwise known as the
Foreign Currency Deposit Act; and Republic Act No.
9510, otherwise known as the Credit Information
System Act (CISA);
(f) Information necessary for banks and other financial
institutions under the jurisdiction of the independent,
central monetary authority or Bangko Sentral ng
Pilipinas to comply with Republic Act No. 9510, and
Republic Act No. 9160, as amended, otherwise
known as the Anti- Money Laundering Act and other
applicable laws; and
(g) (g) Personal information originally collected from
residents of foreign jurisdictions in accordance with
the laws of those foreign jurisdictions, including any
applicable data privacy laws, which is being
processed in the Philippines.

Section 11. General Data Privacy Principles. – The processing of personal

information shall be allowed, subject to compliance with the requirements
of this Act and other laws allowing disclosure of information to the public
and adherence to the principles of transparency, legitimate purpose and
proportionality.

Personal information must be:

(a) Collected for specified and legitimate purposes determined
and declared before, or as soon as reasonably practicable
after collection, and later processed in a way compatible with
such declared, specified and legitimate purposes only;
(b) Processed fairly and lawfully;

728
 (c) Accurate, relevant and, where necessary for purposes for
which it is to be used the processing of personal information,
kept up to date; inaccurate or incomplete data must be
rectified, supplemented, destroyed or their further processing
restricted;
(d) Adequate and not excessive in relation to the purposes for
which they are collected and processed;
(e) Retained only for as long as necessary for the fulfillment of
the purposes for which the data was obtained or for the
establishment, exercise or defense of legal claims, or for
legitimate business purposes, or as provided by law; and
(f) Kept in a form which permits identification of data subjects
for no longer than is necessary for the purposes for which the
data were collected and processed:
Provided, That personal information collected for other purposes may lie
processed for historical, statistical or scientific purposes, and in cases laid
down in law may be stored for longer periods:
Provided, further, That adequate safeguards are guaranteed by said laws
authorizing their processing.

The personal information controller must ensure implementation of

personal information processing principles set out herein.

SEC. 21. Principle of Accountability. – Each personal information

controller is responsible for personal information under its control or
custody, including information that have been transferred to a third party
for processing, whether domestically or internationally, subject to cross-
border arrangement and cooperation.
(a) The personal information controller is accountable for complying
with the requirements of this Act and shall use contractual or other
reasonable means to provide a comparable level of protection while
the information are being processed by a third party.
(b) The personal information controller shall designate an individual or
individuals who are accountable for the organization’s compliance
with this Act. The identity of the individual(s) so designated shall be
made known to any data subject upon request.

SEC. 34. Extent of Liability. – If the offender is a corporation, partnership

or any juridical person, the penalty shall be imposed upon the responsible
officers, as the case may be, who participated in, or by their gross
negligence, allowed the commission of the crime. If the offender is a
juridical person, the court may suspend or revoke any of its rights under
this Act. If the offender is an alien, he or she shall, in addition to the
penalties herein prescribed, be deported without further proceedings after
serving the penalties prescribed. If the offender is a public official or
employee and lie or she is found guilty of acts penalized under Sections 27

729
 and 28 of this Act, he or she shall, in addition to the penalties prescribed
herein, suffer perpetual or temporary absolute disqualification from office,
as the case may be.

SEC. 36. Offense Committed by Public Officer. – When the offender or

the person responsible for the offense is a public officer as defined in the
Administrative Code of the Philippines in the exercise of his or her duties,
an accessory penalty consisting in the disqualification to occupy public
office for a term double the term of criminal penalty imposed shall he
applied.

Data Privacy Rights

1. Right to be informed
Personal data should never be collected, processed and stored by any
organization without the individual’s explicit consent, unless otherwise
provided by law. Aside from protecting against unfair means of personal
data collection, this right also requires personal information controllers
(PICs) to notify individuals if their data have been compromised, in a timely
manner.

2. Right to access
This is the individual’s right to find out whether an organization holds any
personal data about them and if so, gain “reasonable access” to them.
Through this right, organizations may also be asked to provide a written
description of the kind of information they have about the individual as well
as their purpose/s for holding them.

3. Right to object
This right can be exercised if the personal data processing involved is based
on consent or on legitimate interest. When the individual objects or
withholds consent, the PIC should no longer process the personal data,
unless the processing is pursuant to a subpoena, for obvious purposes
(contract, employeremployee relationship, etc.) or a result of a legal
obligation.

4. Right to erasure or blocking

This is the right to suspend, withdraw or order the blocking, removal or
destruction of personal data. This right can be exercised upon discovery and
substantial proof of the following:
a. Personal data is incomplete, outdated, false, or unlawfully obtained.
b. It is being used for purposes the individual did not authorize.
c. The data is no longer necessary for the purposes for which they were
collected.
d. The individual has decided to withdraw consent or object to its
processing, and there is no overriding legal ground for its processing.
e. The data concerns information prejudicial to the data subject — unless

730
 justified by freedom of speech, of expression, or of the press; or
otherwise authorized (by court of law)
f. The processing is unlawful.
g. The personal information controller, or the personal information
processor, violated the rights of the data subject.

5. Right to damages
The individual may claim compensation if they suffered damages due to
inaccurate, incomplete, outdated, false, unlawfully obtained or unauthorized
use of personal data, considering any violation of their rights and freedoms
as data subject.

6. Right to file a complaint

If individuals feel that their personal information has been misused,
maliciously disclosed, or improperly disposed, or that any of their data
privacy rights have been violated, they have a right to file a complaint with
the NPC.

7. Right to rectify
This refers to the right to dispute and have corrected any inaccuracy or error
in the data a personal information controller (PIC) holds about the
individual. The PIC should act on it immediately and accordingly, unless the
request is vexatious or unreasonable. Once corrected, the PIC should ensure
that access and receipt of both new and retracted information. PICs should
also furnish third parties with said information, should it be requested by the
data subject.

8. Right to data portability

This right assures that individuals remain in full control of their data. Data
portability allows data subjects to obtain and electronically move, copy or
transfer their data in a secure manner, for further use. It enables the free flow
of their personal information across the internet and organizations, according
to their preference. This is important especially now that several
organizations and services can reuse the same data.

PERSONS LIABLE FOR DEFENSES

WITH OR
SPECIAL EXCEPTIO
LIABILITY NS
Manufacturers Death and injuries caused by any noxious Absence of
and processors or harmful substances used contractual
of foodstuffs, relation not a
drinks, toilet defense
articles and
similar goods
Owner/creator Resulting injury to another (material Liability

731
of and annoyance, inconvenience, discomfort or attaches
successive hurt) because of the nuisance regardless of
owner/possess the degree of
or who fails or care or skill
refuses to exercised to
abate a avoid such
nuisance injury
Public officer Damages for impairment of rights and
or employee or liberties
private
individual who
violates rights
under Art. 32,
CC
Provinces, The death or injuries suffered by any The defective
Cities and person by reason of the defective condition public work
Municipalities of roads, streets, bridges, public buildings, is not under
and other public works the LGU’s
control or
supervision
Owner of Motor vehicle mishaps  Solidar
Motor Vehicle y
liabilit
y only
if the
owner
was in
the
vehicle
and if
he
could
have
prevent
ed it
thru
due
diligen
ce
 If not
in
vehicle
, apply
Art.
2180

732
 for his
liabilit
y as
employ
er
Proprietor of a. Total or partial collapse of building Responsibilit
building/ or structure if due to lack of y for collapse
structure necessary repairs should be due
b. Explosion of machinery which has to the lack of
not been taken cared of with due necessary
diligence, and the inflammation of repairs
explosive substances which have not
been kept in a safe and adequate
place
c. By excessive smoke, which may be
harmful to persons or property
d. By falling of trees situated at or near
highways or lanes, if not caused by
force majeure
e. By emanations from tubes, canals,
sewers or deposits of infectious
matter, constructed without
precautions suitable to the place
Engineer or If within 15 years from completion of the Action not
Architect structure, the same should collapse by brought
reason of: within 10
a. Defects in the plans or years from
specifications; or collapse
b. Defects in the ground. If within the
same period, the edifice falls on
account of:
a. Defects in the construction;
b. Used of materials of inferior quality
furnished by him; or
c. Violation of the terms of the contract
and he supervised the construction.
Contractor If within 15 years from the completion of Action not
the structure, the edifice falls on account brought
of: within 10
years from
a. Defects in the collapse
construction;
b. Used of materials
of inferior quality
furnished by him;
or

733
 c. Violation of the
terms of the
contract
Head of the Liable for damages caused by things
Family that thrown or falling from the same
lives in a
building or
any part
thereof
Violators of Collection, processing and storage of
data personal information and sensitive personal
privacy information. Specifically:
a. Unauthorized Processing
b. Accessing due to Negligence
c. Improper Disposal
d. Processing for Unauthorized
Purposes
e. Unauthorized Access or Intentional
Breach
f. Concealment of Security Breaches
Involving Sensitive Personal
Information
g. Malicious Disclosure
h. Unauthorized Disclosure.

I. STRICT LIABILITY

1. Animals; possessor and user of an animal

Art. 2183, CC. 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.

The law makes no distinction as to what kind of animal is used or possessed.

Hence, it may be construed as applicable generally to all animals, whether
domestic, domesticated, or wild. It would seem that birds are covered since
they can also cause damage. [de Leon]

Possession of the animal, not ownership, is determinative of liability under

Art. 2183. The obligation imposed by said article is not based on the
negligence or on the presumed lack of vigilance of the possessor or user of
the animal causing damage. It is based on natural equity and on the principle
of social interest that he who possesses animals for his utility, pleasure, or
service, must answer for any damage which such animal may cause. The

734
contention that the defendant could not be expected to exercise remote
control of the animal is not acceptable. In fact, Art. 2183 holds the possessor
liable even if the animal should “escape or be lost” and so be removed from
his control. It is likewise immaterial that the animal was tame and was
merely provoked by the victim. The law does not speak only of vicious
animals but covers even tame ones as long as they cause injury [Vestil v.
IAC, G.R. No. 74431 (1989)].

Possible defenses against this liability

1. Force Majeure
2. Fault of person suffering damage
3. Act of third persons

2. Nuisance
Art 2193, CC. 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; xxx

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 [Hidalgo
Enterprises v. Balandan, G.R. No. L-3422 (1952)].

The owner's failure to take reasonable precautions to prevent the child from
entering his premises at a place where he knows or ought to know that
children are accustomed to roam about or to which their childish instincts
and impulses are likely to attract them is a breach of duty, a negligent
omission, for which he may and should be held responsible, if the child is
actually injured, without other fault on its part than that it had entered on the
premises of a stranger without his express invitation or permission. [Taylor
v. MERALCO, G.R. No. L- 4977 (1910)].

The attractive nuisance doctrine generally is 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 [Hidalgo

735
Enterprises v. Balandan, G.R. No. L-3422 (1952)].

3. Products liability; Consumer Act

Coverage of the Consumer Act
The law covers consumer products and services which are defined in Art.
4(q) as “goods, services and credits, debts or obligations which are primarily
for personal, family, household or agricultural purposes, which shall include
but not limited to, food, drugs, cosmetics and devices.”

Bases of Liability to Consumers

1. Fraud/misrepresentation (based on Art. 33, CC)

Art. 50 of RA 7394 prohibits against deceptive sales acts or practices, while
Art. 51 prohibits unfair or unconscionable sales acts of practices. However,
not all expressions of opinion constitute misrepresentation; usual
exaggerations of trade under Art. 1340, CC or mere expressions of an
opinion not made by an expert under Art. 1341, CC are strictly not
actionable.

2. Warranty
A representation made by a seller is a warranty if he is an expert, and the
buyer is induced to part with his money on the basis of this representation.
The law on sales provides for implied warranties against hidden defects.

3. Negligence
Failure to meet safety and quality standards for consumer products [Art. 5 to
46 of RA 7394] creates liability based on negligence. It is the failure to
observe the requisite due care considering the circumstances, governed by
the provisions on quasi-delict.

4. Strict Liability
For instances under Art. 97-99 (defective products and services), the
primarily liability for death or injury is on the manufacturer and processor,
instead of the seller. There is no requirement that they act negligently.

CONSUMER ACT RA 7394, Secs. 92-107 (Ch. 1)

Article 4. Definition of Terms. (n) "Consumer" means a natural person

who is a purchaser, lessee, recipient or prospective purchaser, lessor or
recipient of consumer products, services or credit.

(as) "Manufacturer" means any person who manufactures, assembles or

processes consumer products, except that if the goods are manufactured,
assembled or processed for another person who attaches his own brand
name to the consumer products, the latter shall be deemed the
manufacturer. In case of imported products, the manufacturer's

736
representatives or, in his absence, the importer, shall be deemed the
manufacturer.

Article 92. Exemptions. – If the concerned department finds that for good
or sufficient reasons, full compliance with the labeling requirements
otherwise applicable under this Act is impracticable or is not necessary for
the adequate protection of public health and safety, it shall promulgate
regulations exempting such substances from these requirements to the
extent it deems consistent with the objective of adequately safeguarding
public health and safety, and any hazardous substance which does not bear
a label in accordance with such regulations shall be deemed mislabeled
hazardous substance.

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

A product is defective when it does not offer the safety rightfully expected
of it, taking relevant circumstances into consideration, including but not
limited to:
(a) presentation of product
(b) use and hazards reasonably expected of it;
(c) the time it was put into circulation.

A product is not considered defective because another better quality

product has been placed in the market. The manufacturer, builder,
producer or importer shall not be held liable when it evidences:
(a) that it did not place the product on the market;
(b) that although it did place the product on the market such product has
no defect;
(c) that the consumer or a third party is solely at fault.

Article 98. Liability of Tradesman or Seller. – The tradesman/seller is

likewise liable, pursuant to the preceding article when:
(a) it is not possible to identify the manufacturer, builder, producer or
importer;
(b) the product is supplied, without clear identification of the
manufacturer, producer, builder or importer;
(c) he does not adequately preserve perishable goods. The party making
payment to the damaged party may exercise the right to recover a part of
the whole of the payment made against the other responsible parties, in
accordance with their part or responsibility in the cause of the damage

737
effected.

Article 99. Liability for Defective Services. – The service supplier is liable
for redress, independently of fault, for damages caused to consumers by
defects relating to the rendering of the services, as well as for insufficient
or inadequate information on the fruition and hazards thereof.

The service is defective when it does not provide the safety the consumer
may rightfully expect of it, taking the relevant circumstances into
consideration, including but not limited to:
1. the manner in which it is provided;
2. the result of hazards which may reasonably be expected of it;
3. the time when it was provided.

A service is not considered defective because of the use or introduction of

new techniques.
The supplier of the services shall not be held liable when it is proven:
(a) that there is no defect in the service rendered;
(b) that the consumer or third party is solely at fault.

Article 100. Liability for Product and Service Imperfection. – The

suppliers of durable or nondurable consumer products are jointly liable for
imperfections in quality that render the products unfit or inadequate for
consumption for which they are designed or decrease their value, and for
those resulting from inconsistency with the information provided on the
container, packaging, labels or publicity messages/advertisement, with due
regard to the variations resulting from their nature, the consumer being
able to demand replacement to the imperfect parts.
If the imperfection is not corrected within thirty (30) days, the consumer
may alternatively demand at his option:
(a) the replacement of the product by another of the same kind, in a perfect
state of use;
(b) the immediate reimbursement of the amount paid, with monetary
updating, without prejudice to any losses and damages;
(c) a proportionate price reduction.
The parties may agree to reduce or increase the term specified in the
immediately preceding paragraph; but such shall not be less than seven (7)
nor more than one hundred and eighty (180) days.

The consumer may make immediate use of the alternatives under the
second paragraph of this Article when by virtue of the extent of the
imperfection, the replacement of the imperfect parts may jeopardize the
product quality or characteristics, thus decreasing its value.

If the consumer opts for the alternative under sub-paragraph (a) of the
second paragraph of this Article, and replacement of the product is not
possible, it may be replaced by another of a different kind, mark or model:

738
Provided, That any difference in price may result thereof shall be
supplemented or reimbursed by the party which caused the damage,
without prejudice to the provisions of the second, third and fourth
paragraphs of this Article.

Article 101. Liability for Product Quantity Imperfection. – Suppliers are

jointly liable for imperfections in the quantity of the product when, in due
regard for variations inherent thereto, their net content is less than that
indicated on the container, packaging, labeling or advertisement, the
consumer having powers to demand, alternatively, at his own option:
(a) the proportionate price
(b) the supplementing of weight or measure differential;
(c) the replacement of the product by another of the same kind, mark or
model, without said imperfections;
(d) the immediate reimbursement of the amount paid, with monetary
updating without prejudice to losses and damages if any.

The provisions of the fifth paragraph of Article 99 shall apply to this

Article.

The immediate supplier shall be liable if the instrument used for weighing
or measuring is not gauged in accordance with official standards.

Article 102. Liability for Service Quality Imperfection. – The service

supplier is liable for any quality imperfections that render the services
improper for consumption or decrease their value, and for those resulting
from inconsistency with the information contained in the offer or
advertisement, the consumer being entitled to demand alternatively at his
option:
(b) the performance of the services, without any additional cost and when
applicable;
(c) the immediate reimbursement of the amount paid, with monetary
updating without prejudice to losses and damages, if any;
(d) a proportionate price reduction.

Reperformance of services may be entrusted to duly qualified third parties,

at the supplier's risk and cost.

Improper services are those which prove to be inadequate for purposes

reasonably expected of them and those that fail to meet the provisions of
this Act regulating service rendering.

Article 103. Repair Service Obligation. – When services are provided for
the repair of any product, the supplier shall be considered implicitly bound
to use adequate, new, original replacement parts, or those that maintain the
manufacturer's technical specifications unless, otherwise authorized, as
regards to the latter by the consumer.

739
 Article 104. Ignorance of Quality Imperfection. – The supplier's ignorance
of the quality imperfections due to inadequacy of the products and services
does not exempt him from any liability.

Article 105. Legal Guarantee of Adequacy. – The legal guarantee of

product or service adequacy does not require an express instrument or
contractual exoneration of the supplier being forbidden.

Article 106. Prohibition in Contractual Stipulation. – The stipulation in a

contract of a clause preventing, exonerating or reducing the obligation to
indemnify for damages effected, as provided for in this and in the
preceding Articles, is hereby prohibited, if there is more than one person
responsible for the cause of the damage, they shall be jointly liable for the
redress established in the pertinent provisions of this Act. However, if the
damage is caused by a component or part incorporated in the product or
service, its manufacturer, builder or importer and the person who
incorporated the component or part are jointly liable.

XIII. DAMAGES

A. GENERAL CONSIDERATIONS
Damages may be defined as the pecuniary compensation, recompense, or
satisfaction for an injury sustained, or as otherwise expressed, the pecuniary
consequences, which the law imposes for the breach of some duty or the
violation of some right [People v. Ballesteros, G.R. No. 120921 (1998)].

It is the recompense or compensation awarded for the damage suffered

[Custodio v. CA, G.R. No. 116100 (1996)].

1. Classification
According to Purpose:

a. For adequate reparation of the injury

1. Compensatory damages (reparation of pecuniary losses)
2. Moral (reparation for non-pecuniary losses: injury to feelings; physical
suffering, etc.)

b. For vindication of the right violated:

Nominal damages

c. For less than adequate reparation:

Moderate damages

d. For deterring future violations:

740
Exemplary or corrective

According to Manner of Determination

a. Conventional (or liquidated)

b. Non-conventional, which may either be:
(i) Statutory (fixed by law, as in moratory interest)
(ii) Judicial (determined by the courts)

General Damages
Those which are the natural and necessary result of the wrongful act or
omission asserted as the foundation of liability. It includes those which
follow as a conclusion of law from the statement of the facts of the injury.

Special Damages
Damages that arise from the special circumstance of the case, which, if
properly pleaded, may be added to the general damages which the law
presumes or implies from the mere invasion of the plaintiff’s rights. Special
damages are the natural, but NOT the necessary result of an injury. These
are not implied by law.

2. Kinds of damages
Art. 2197, CC. Damages may be:
a. Actual or compensatory;
b. Moral;
c. Nominal;
d. Temperate or moderate;
e. Liquidated; or
f. Exemplary or corrective

a. Actual and Compensatory

Compensatory damages
Damages in satisfaction of, or in recompense for, loss or injury sustained.
The phrase “actual damages” is sometimes used as a synonym of
compensatory damages.

Requisites:
To seek recovery of actual damages, it is necessary to prove the actual
amount of loss with a reasonable degree of certainty, premised upon
competent proof and on the best evidence obtainable [Asilo, Jr. v. People
and Sps. Bombasi, G.R. No. 159017-18 (2011); ICTSI v. Chua, G.R. No.
195031 (2014)].

Alleged and proved with certainty

Art. 2199, CC. Except as provided by law or by stipulation, one is entitled
to an adequate compensation only for such pecuniary loss suffered by him
as he has duly proved. Such compensation is referred to as actual or

741
 compensatory damages.

The damages must be proven by competent evidence (admissible or

probative).

There must be pleading and proof of actual damages suffered for the same to
be recovered. In addition to the fact that the amount of loss must be capable
of proof, it must also be actually proven with a reasonable degree of
certainty, premised upon competent proof or the best evidence obtainable
such as receipts, cash and check vouchers, and other documentary evidence
of the same nature. The burden of proof of the damage suffered is imposed
on the party claiming the same. Selfserving statements are not sufficient
basis for an award of actual damages [Oceaneering Contractors v. Baretto,
G.R. No. 184215 (2011)].

Actual or compensatory damages cannot be presumed, but must be proven

with a reasonable degree of certainty [MCC Industrial Sales Corp. v.
Ssangyong Corp., G.R. No. 170633 (2007)].

Damages must be proved with reasonable accuracy, even when not denied
[Valencia v. Tantoco, G.R. No. L-7267 (1956)].

When is a person entitled? [PeLoRePLS]

1. When there is a pecuniary loss suffered by him;
2. When he has alleged and prayed for such relief [Manchester Dev’t Corp
v. CA, G.R. No. L-75919 (1987)];
3. When he has duly proved it;
4. When provided by law or by stipulation.

No proof of pecuniary loss is necessary for: moral, nominal, temperate,

liquidated or exemplary damages. The assessment of such damages is
discretionary upon the court, except liquidated ones. [Art. 2216, CC].

If the physical integrity of a person’s body is violated or diminished, actual

injury is suffered for which actual or compensatory damages are due and
assessable. Such violation entitles a person to actual or compensatory
damages. A scar, especially on a woman’s face, is a violation of bodily
integrity, giving rise to a legitimate claim for restoration to her condition
ante. [Gatchalian v. Delim, G.R. No. 56487 (1991)].

Components:
Actual damage covers the following: [LIPA]
1. Value of loss; unrealized profit
2. Attorney’s fees and expenses of litigation
3. Interest

1. Loss Covered

742
IN GENERAL
Art. 2200, CC. Indemnification for damages shall comprehend not only
the value of the loss suffered, but also that of the profits which the obligee
failed to obtain.

Two kinds of actual damages [PNOC v. CA, G.R. No. 107518, (1998)]:
1. Damnum emergens/ dano emergente - actual loss or loss of what a
person already possesses
2. Lucrum cessans/lucro cesante – a cession of gain or amount of profit
lost or loss of which would have pertained to a person

Indemnification for damages is not limited to damnum emergens but

extends to lucrum cessans. This rule is important when the thing lost or
damaged either earns income or is used for business.

The award of damages for loss of earning capacity is concerned with the
determination of losses or damages sustained by the [plaintiffs] as
dependents and intestate heirs of the deceased. Such damages consist, not
only of the full amount of his earnings, but also of the support they received
or would have received from him had he not died as a consequence of the
negligence of [defendant’s] agent. Only net earnings, and not gross earnings
are to be considered, that is, the total of the earnings less expenses necessary
in the creation of such earnings or income and less living and other
incidental expenses [Candano Shipping Lines, Inc. v. Sugata-on, G.R. No.
163212 (2007)].

Extent or scope of actual damages

SOURCE EXTENT OF LIABILITY
Art. Contracts and ● If the obligor acted in GOOD FAITH, he
2201 Quasicontracts shall be liable for all natural and probable
consequences of the breach, which the
parties have foreseen or could have
reasonably foreseen at the time the
obligation was constituted.
● If the obligor acted with FRAUD, BAD
FAITH, MALICE or WANTON
ATTITUDE, he shall be responsible for all
damages which may be reasonably
attributed to the breach or nonperformance.
Art. Crimes ● Liability extends to all damages which are
2202 and the natural and probable consequence of the
Quasidelicts act or omission complained of.
● WON the damage was foreseen or could
have been reasonably foreseen by the
defendant is irrelevant.

743
IN CONTRACTS AND QUASI-CONTRACTS
Art. 2201, CC. In contracts and quasicontracts, the damages for which the
obligor who acted in good faith is liable shall be those that are the natural
and probable consequences of the breach of the obligation, and which the
parties have foreseen or could have reasonably foreseen at the time the
obligation was constituted.

In case of fraud, bad faith, malice or wanton attitude, the obligor shall be
responsible for all damages which may be reasonably attributed to the
non-performance of the obligation.

Art. 2214, CC. In quasi-delicts, the contributory negligence of the plaintiff

shall reduce the damages that he may recover.

Art. 2215, CC. In contract , quasi-contract ,and quasi-delic ,the court may
equitably mitigate the damages under circumtanse other than the case
referred to in the prec deing 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;
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.

The damages recoverable upon breach of contract are, primarily, the

ordinary, natural and necessary damages resulting from the breach.

Other damages, known as special damages, are recoverable where it appears

that the particular conditions which made such damages a probable
consequence of the breach were known to the delinquent party at the time
the contract was made [Daywalt v. Recoletos et al., G.R. No. L-13505
(1919)].

Bad faith does not simply connote bad judgment or negligence; it imports a
dishonest purpose or some moral obliquity and conscious doing of wrong; it
partakes of the nature of fraud. In this case, BPI-FB acted out of the impetus
of self-protection and not out of malevolence or ill will. BPI-FB was not in
the corrupt state of mind contemplated in Art. 2201 and should not be held
liable for all damages being imputed to it for its breach of obligation [BPI
Family Bank v. Franco, G.R. No. 123498 (2007)].

Overbooking amounts to bad faith, entitling the passengers to an award of

moral damages when the airline did not allow passengers to board their
flight despite having confirmed their tickets. Hence, in accordance with Art.
2201, TransWorld was held responsible for all the damages which may be
reasonably attributed to the non-performance of its obligation [Spouses

744
Zalamea v. CA, G.R. No. 104235 (1993)].

IN CRIMES AND QUASI-DELICTS

Art. 2202, CC. 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.

In cases of crimes, damages are to be increased or decreased according to

aggravating or mitigating circumstances present.

Contributory negligence of the plaintiff, in case of quasi-delicts, shall reduce

the damages to which he may be entitled. However, in cases of crimes, there
is no mitigation for contributory negligence of the plaintiff.

The principal consideration for the award of damages is the penalty provided
by law or imposable for the offense because of its heinousness, and not the
public penalty actually imposed on the offender. The fact of minority of the
offender at the time of the commission of the offense has no bearing on the
gravity and extent of injury caused to the victim and her family. Hence,
notwithstanding the fact that the imposable public penalty against the
offender should be lowered due to his minority, there is no justifiable ground
to depart from the jurisprudential trend in the award of damages in the case
of qualified rape, considering the compensatory nature of the award of civil
indemnity and moral damages. [People v. Sarcia, G.R. No. 169641 (2009)].

2. Earning Capacity; Business Standing

Art. 2205, CC. 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 or impairment of earning capacity

The Court did not award actual damages because it was found that plaintiff’s
employment was lost even before the injury upon which she was suing. The
Court equated loss of employment with loss of earning capacity [Gatchalian
v. Delim, supra].

The plaintiff need not be actually engaged in gainful employment to recover

damages due to loss or impairment of earning capacity. In determining the
amount of damages to be awarded, the Supreme Court considered the
plaintiff’s age, probable life expectancy, the state of his health, and his
mental and physical condition before the accident. The court took into
account [the plaintiff’s] outstanding abilities, and the possibility that he
would have enjoyed a successful professional career in banking [Mercury
Drug v. Huang, G.R. No. 172122 (2007)].

745
Injury to business standing or commercial credit
Loss of goodwill should be proven with the same standard of proof as other
compensatory damages [Tanay Recreation Center v. Fausto, G.R. No.
140182 (2005)].

Formula for the net earning capacity Net earning capacity = Life
Expectancy × (Gross annual income – Reasonable living expenses)
[People v. Aringue, G.R. No. 116487 (1997); Candano v. Sugata-On, G.R.
163212, (2007)].

Where: Life expectancy = × (80 – age of victim at the time of death)

General Rule: Damages for loss of earning capacity shall be awarded in

every case, and that claimant shall present documentary evidence to
substantiate claim for damages. [Tan, et al. v. OMC Carriers, Inc., G.R. No.
190521 (2011)].

Exceptions:
1. If the deceased was self-employed and earning less than the minimum
wage; or
2. The deceased was a daily wage worker earning less than the minimum
wage under current labor laws. [Philippine Hawk v. Lee, G.R. No. 166869
(2010)].
Additional Exception: Testimonial evidence suffices to establish a basis for
which the court can make a fair and reasonable estimate of the loss of
earning capacity [Pleyto v. Lomboy, G.R. No. 148737 (2004)]

Note: Such an exception to documentary proof requirement only exists as to

the loss of earning capacity.

3. Attorney’s fees and expenses of litigation

Art. 2208, CC. 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;
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;

746
 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.

General Rule: Attorney’s fees and costs of litigation are recoverable IF

stipulated.

Exceptions:
If there is no stipulation, they are recoverable only in the following cases:
1. By reason of malice or bad faith
a. When exemplary damages are awarded
b. In case of a clearly unfounded civil action
c. Where defendant acted in gross and evident bad faith
d. When at least double judicial costs are awarded
2. By reason of plaintiff’s indigence in
a. Actions for legal support
b. Actions for recovery of wages of laborers, etc.
c. Actions for workmen’s compensation
3. By reason of crimes in
a. Criminal cases of malicious prosecution
b. Separate actions to recover civil liability arising from crime
4. By reason of equity
a. Where the defendant’s act compelled plaintiff to litigate with third
persons
b. Where the Court deems it just and equitable
Note: In all cases, attorney’s fees and costs of litigation must be reasonable.
Even if expressly stipulated, attorney’s fees are subject to control by the
Courts.

Two kinds of attorney’s fees:

1. Ordinary - reasonable compensation paid to a lawyer for his services
2. Extraordinary - awarded to a successful litigant; to be paid by the losing
party as indemnity for damages. [Aquino v. Casabar, G.R. No. 191470,
(2015)].
Attorney’s fees in CC 2208 is an award made in favor of the litigant, not of
his counsel, and the litigant is the judgment creditor who may enforce the

747
judgment for attorney's fees by execution [Quirante v. IAC, G.R. No. 73886
(1989)].

Attorney's fees cannot be recovered except in cases provided for in CC 2208

[MERALCO v. Ramoy, G.R. No. 158911 (2008)].
Attorney’s fees and expenses of litigation are recoverable only in the
concept of actual damages, not as moral damages nor judicial costs. Hence,
such must be specifically prayed for and may not be deemed incorporated
within a general prayer for "such other relief and remedy as this court may
deem just and equitable” [Briones v. Macabagdal, G.R. No. 150666 (2010)].

For Art. 2208 (2), an adverse decision does not ipso facto justify an award of
attorney’s fees to the winning party. Even when a claimant is compelled to
litigate with third persons or to incur expenses to protect his rights, still
attorney’s fees may not be awarded where no sufficient showing of bad faith
could be reflected in a party’s persistence in a case other than an erroneous
conviction of the righteousness of his cause [Bank of America v. Philippine
Racing Club, G.R. No. 150228 (2009)].

4. Interest

Art. 2209, CC. 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.

Art. 2210, CC. Interest may, in the discretion of the court, be allowed
upon damages awarded for breach of contract

Art. 2211, CC. 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, CC. Interest due shall earn legal interest from the time it is
judicially demanded, although the obligation may be silent upon this point.

Art. 2213, CC. Interest cannot be recovered upon unliquidated claims or

damages, except when the demand can be established with reasonable
certainty.

Interest accrues in the concept of damages when:

1. The obligation consists in the payment of a sum of money;
2. Debtor incurs in delay; and
3. There being no stipulation to the contrary.

Interest on the amount of damages awarded may be imposed at the

748
discretion of the court and in the prevailing legal interest. No interest,
however, shall be adjudged on unliquidated claims or damages until the
demand can be established with reasonable certainty [Lara’s Gifts &
Decors, Inc., v. Midtown Industrial Sales Inc., G.R. No. 225433 (2019)].

Compounding of interest
Interest due shall earn legal interest from the time it is judicially demanded,
although the obligation may be silent on the point.

Note that interest due can earn only at 6%, whether the rate of interest of the
principal is greater than 6%.

Determination of legal interest

1. When an obligation, regardless of its source (i.e., law, contracts,
quasicontracts, delicts or quasi-delicts) is breached, the contravenor can be
held liable for damages.
2. With regard to an award of in the concept of actual and compensatory
damages, the rate of interest, as well as the accrual thereof, is imposed, as
follows [Lara’s Gifts & Decors, Inc., v. Midtown Industrial Sales Inc.,
supra]:

BASE RATE ACCRUAL

When the obligation is breached and it consists in the PAYMENT OF
SUM OF MONEY (i.e, a loan or forbearance of money, goods, credits or
judgments):
Interest due a. That which may have In the absence of a
been stipulated in stipulated reckoning
writing, provided it is date, shall be computed
not excessive or from default, (i.e., from
unconscionable EXTRAJUDICIAL OR
JUDICIAL
DEMAND in
accordance with Art.
1169) until FULL
PAYMENT without
compounding any
interest unless
Compounded interest is
expressly stipulated by
the parties, by law or
regulation
b. In the absence of From
stipulation, the rate of EXTRAJUDICIAL OR
interest, it shall be 6% JUDICIAL DEMAND
per annum (legal in accordance with Art.
interest) 1169 of the Civil Code,

749
 UNTIL FULL
PAYMENT, without
compounding
any interest unless
compounded interest is
expressly stipulated by
law or regulation.
Interest due on the Legal interest (6%) From the time of
principal amount JUDICIAL DEMAND
accruing as of UNTIL FULL
judicial demand shall PAYMENT
SEPARATELY earn
LEGAL INTEREST
No legal interest will be added after the judgement becomes final and
executor unlike in Eastern Shipping Lines v. CA, G.R. No. 97412 (1994)
and Nacar v. Gallery Frames G.R. No. 189871, (2013)
When an obligation, NOT constituting a loan or forbearance of money, is
breached:
When demand is Legal interest (6%) From the time the claim
established with is made
reasonable certainty EXTRAJUDICIALLY
OR JUDICIALLY until
FULL PAYMENT
When demand is Legal interest (6%) From the date of the
NOT established JUDGMENT OF THE
with reasonable TRIAL COURT (at
certainty) which time the
quantification of
damages may be deemed
to have been reasonably
ascertained) UNTIL
FULL PAYMENT
No legal interest will be added after the judgement becomes final and
executor unlike in Eastern Shipping Lines v. CA, G.R. No. 97412 (1994)
andNacar v. Gallery Frames

Note: The new rate of legal interest (6%) in Nacar v. Gallery Frames, G.R.
No. 189871 (2013), does not apply to judgments that have become final and
executory prior to July 1, 2013.

Start of Delay
1. Extrajudicial: Demand letter
2. Judicial: Filing of complaint

Duty to Minimize
Art. 2203, CC. The party suffering loss or injury must exercise the

750
diligence of a good father of a family to minimize the damages resulting
from the act or omission in question.

Art. 2203 exhorts parties suffering from loss or injury to exercise the
diligence of a good father of a family to minimize the damages resulting
from the act or omission in question. The one who is injured then by the
wrongful or negligent act of another should exercise reasonable care and
diligence to minimize the resulting damage. [Lim and Gunnaban v. CA, G.R.
No. 125817 (2002)].

Burden of Proof
The DEFENDANT has the burden of proof to establish that the victim, by
the exercise of the diligence of a good father of a family, could have
mitigated the damages. In the absence of such proof, the amount of damages
cannot be reduced. [Lim and Gunnaban v. CA, G.R. No. 125817 (2002)].

Note:
The victim is required only to take such steps as an ordinary prudent man
would reasonably adopt for his own interest.

b. Moral
Art. 2217, CC. 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 or omission.

Art. 2218, CC. In the adjudication of moral damages, the sentimental

value of property, real or personal, may be considered.

Moral damages are emphatically not intended to enrich a complainant at the

expense of the defendant. Its award is aimed at the restoration, within the
limits of the possible, of the spiritual status quo ante, and it must be
proportional to the suffering inflicted [Visayan Sawmill v. CA, G.R. No.
83851 (1993)].

Mental suffering means distress or serious pain as distinguished from

annoyance, regret or vexation [Bagumbayan Corp. v. IAC, G.R. No. L-
66274 (1984)].

751
When awarded (Art. 2217)

Awarded when injury consists of:

1. Physical suffering

2. Besmirched reputation

3. Mental anguish

4. Fright

5. Moral shock

6. Wounded feelings

7. Social humiliation

8. Serious anxiety

9. Similar injury

Requisites for awarding moral damages

The conditions for awarding moral damages are [InAP-2219]

1. There must be an injury, whether physical, mental, or psychological,

clearly substantiated by the claimant;

2. There must be a culpable act or omission factually established;

3. The wrongful act or omission of the defendant must be the proximate

cause of the injury sustained by the claimant; and

4. The award of damages is predicated on any of the cases stated in Art.

2219 of the CC. [Sulpicio Lines v. Curso, G.R. No. 157009 (2010)]:

General Principles of Recovery:

1. Moral damages must somehow be proportional to the suffering

inflicted.
2. In culpa contractual or breach of contract, moral damages may
be recovered when the defendant acted in bad faith or was
guilty of gross negligence (amounting to bad faith) or in wanton
disregard of his contractual obligation and, exceptionally, when

752
 the act of breach of contract itself is constitutive of tort
resulting in physical injuries.
3. By special rule in Art. 1764, in relation to Art. 2206, moral
damages may also be awarded in case the death of a passenger
results from a breach of carriage.
4. In culpa aquiliana or quasi-delict,

a. when an act or omission causes physical injuries, or

b. where the defendant is guilty of intentional tort, moral damages may aptly
be recovered. This rule also applies to contracts when breached by tort.

5. In culpa criminal, moral damages could be lawfully due when

the accused is found guilty of physical injuries, lascivious acts,
adultery or concubinage, illegal or arbitrary detention, illegal
arrest, illegal search, or defamation.
6. Malicious prosecution can also give rise to a claim for moral
damages. The term "analogous cases," referred to in Art. 2219,
following the ejusdem generis rule, must be held similar to
those expressly enumerated by the law.
7. Although the institution of a clearly unfounded civil suit can at
times be a legal justification for an award of attorney's fees,
such filing, however, has almost invariably been held not to be
a ground for an award of moral damages. [Expertravel & Tours
v. CA., G.R. No. 130030 (1999)].
8. The burden rests on the person claiming moral damages to
show convincing evidence for good faith is presumed. In a case
involving simple negligence, moral damages cannot be
recovered. [Villanueva v. Salvador, G.R. No. 139436 (2006)].
9. Failure to use the precise legal terms or "sacramental phrases"
of "mental anguish, fright, serious anxiety, wounded feelings or
moral shock" does not justify the denial of the claim for
damages. It is sufficient that these exact terms have been
pleaded in the complaint and evidence has been adduced
[Miranda-Ribaya v. Bautista, G.R. No. L-49390 (1980)].
10.Even if the allegations regarding the amount of damages in the
complaint are not specifically denied in the answer, such
damages are not deemed admitted. [Raagas, et al. v. Traya et
al, G.R. No. L- 20081 (1968)]
11.An appeal in a criminal case opens the whole case for review
and this 'includes the review of the penalty, indemnity and

753
 damages’. Even if the offended party had not appealed from
said award, and the only party who sought a review of the
decision of said court was the accused, the court can increase
damages awarded. [Sumalpong v. CA, G.R. No. 123404
(1997)].
12.It can only be awarded to natural persons. The award of moral
damages cannot be granted in favor of a corporation because,
being an artificial person and having existence only in legal
contemplation, it has no feelings, no emotions, no senses, It
cannot, therefore, experience physical suffering and mental
anguish, which can be experienced only by one having a
nervous system. [ABS-CBN v. CA, G.R. No. 128690 (1999)].
13.While it is true that besmirched reputation is included in moral
damages, it cannot cause mental anguish to a corporation,
unlike in the case of a natural person, for a corporation has no
reputation in the sense that an individual has, and besides, it is
inherently impossible for a corporation to suffer mental anguish
[NAPOCOR v. Philipp Brothers, G.R. Ni, 126204 (2001)].

i. When moral damages are recoverable

Art. 2219, CC. Moral damages may be recovered in the following and
analogous cases:
1. A criminal offense resulting in physical injuries;
2. Quasi-delicts causing physical injuries;
3. Seduction, abduction, rape, or other lascivious acts;
4. Adultery or concubinage;
5. Illegal or arbitrary detention or arrest;
6. Illegal search;
7. Libel, slander or any other form of defamation;
8. Malicious prosecution;
9. Acts mentioned in article 309;
10. Acts and actions referred to in articles 21, 26, 27, 28, 29, 30, 32, 34,
and 35.
The parents of the female seduced, abducted, raped, or abused, referred to
in No. 3 of this article, may also recover moral damages.

The spouse, descendants, ascendants, and brothers and sisters may bring
the action mentioned in No. 9 of this article, in the order named.

754
1. In Criminal Offense resulting in physical injuries and death

Under paragraph (1), Art. 2219 of the CC, moral damages may be recovered
in a criminal offense resulting in physical injuries. In its generic sense,
"physical injuries" includes death [People v. Villaver, G.R. No. 133381

(2001)].

Moral damages are awarded despite the absence of proof of mental and
emotional suffering of the victim’s heirs since a violent death necessarily
brings about emotional pain and anguish on the part of the victim’s family.
[People v. Vilarmea, G.R. No. 200029, November 13, (2013)].

2. In Quasi-delicts resulting in physical Injuries

In culpa aquiliana, or quasi-delict, moral damages may be recovered (a)

when an act or omission causes physical injuries, or (b) where the defendant
is guilty of intentional tort. The SC held that an employer that is vicariously
liable with its employee-driver may also be held liable for moral damages to
the injured plaintiff [B.F. Metal v. Lomotan, G.R. No. 170813 (2008)].

In Laconsay v. Berog G.R. No. 188686 (2014), the court awarded

₱1,000,000.00 as moral damages which is commensurate to the suffering
inflicted to Fidel. This is in accord with the extent and nature of the physical
and psychological injuries suffered by Fidel. The damage which caused the
loss of his right leg is not only permanent and lasting but would likewise
permanently alter and adjust the physiological changes that his body would
normally undergo as he matures.

3. In seduction, abduction, rape, and other lascivious acts

755
Anent the award of damages, civil indemnity ex delicto is mandatory upon
finding of the fact of rape while moral damages is awarded upon such
finding without need of further proof because it is assumed that a rape victim
has actually suffered moral injuries entitling the victim to such award.
[People v. Calongui, G.R. No. 170566(2006); People v. Lizano G.R. No.
174470, (2007)]

The award of moral damages in a conviction for simple rape should equal
the award of moral damages in convictions for qualified rape. Truly, [the
victim’s] moral suffering is just as great as when her father who raped her is
convicted for qualified rape as when he is convicted only for simple rape due
to a technicality [People v. Bartolini, supra].

Where there are multiple counts of rape and other lascivious acts, the court
awarded moral damages for each count of lascivious acts and each count of
rape [People v. Abadies, G.R. Nos. 13946-50 (2002)].

Note: Recovery may be had by the offended party and also by her parents.

4. In illegal or arbitrary detention or arrest

Since the crime committed in this case is kidnapping and failure to return a
minor under Art. 270 of the RPC, the crime was clearly analogous to illegal
and arbitrary detention or arrest. Therefore, the award of moral damages is
justified [People v. Bernardo, G.R. No. 144316 (2002)].

In People v. Madsali G.R. No. 179570 (2010), two separate informations

were filed: 1) for abduction with rape and 2) for serious illegal detention.
The court awarded moral damages predicated on AAA having suffered
serious anxiety and fright when she was detained for more than 5 months.
Such award is different from the award of moral damages based on the rape
case since the court granted it based on the odious act or rape.

756
5. In case of libel, slander, or any other form of defamation

The court ruled that the commission of Slight Oral Defamation caused injury
to the petitioner’s feelings and reputation as a barangay captain. Hence, the
petitioner is entitled to moral damages in the sum of ₱5,000.00 [Occena v.
Icamina, supra].

6. In case of malicious prosecution

A person's right to litigate, as a rule, should not be penalized. This right,

however, must be exercised in good faith. Absence of good faith in the
present case is shown by the fact that petitioner clearly has no cause of
action against respondents, but it recklessly filed a suit anyway and
wantonly pursued pointless appeals, thereby causing the latter to spend
valuable time, money and effort in unnecessarily defending themselves,
incurring damages in the process [Industrial Insurance v. Bondad, G.R. No.
136722 (2000)].

Moral damages cannot be recovered from a person who has filed a

complaint against another in good faith, or without malice or bad faith. If
damage results from the filing of the complaint, it is damnum absque injuria
[Mijares v. CA, G.R. No. 113558(1997)].

7. In acts referred to in Arts. 21, 26, 27, 28, 29, 32, 34 and 35, CC

Art. 21, CC. Any person who wilfully 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

Moral damages are recoverable where the dismissal of the employee was

757
attended by bad faith or fraud or constituted an act oppressive to labor, or
was done in a manner contrary to morals, good customs, or public policy
[Triple Eight v. NLRC, G.R. No. 129584, (1998)].

Art. 26, CC. 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:
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.

Violation of Human Dignity

The law seeks to protect a person from being unjustly humiliated so the
court awarded moral damages to the plaintiff who was accused by the
respondent of having an adulterous relationship with another woman in the
presence of his wife, children, neighbors and friends [Concepcion v. CA,
G.R. No. 120706 (2000)].

Art. 27, CC. 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.

Refusal or Neglect of Duty

Under Art. 27, in relation to Arts. 2219 and 2217, a public officer may be
liable for moral damages for as long as the moral damages suffered by [the
plaintiff] were the proximate result of [defendant’s] refusal to perform an
official duty or neglect in the performance thereof. In fact, under Arts. 19
and 27 of the CC, a public official may be made to pay damages for
performing a perfectly legal act, albeit done in bad faith or in violation of the
"abuse of right" doctrine.

758
Art. 28, CC. 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, CC. 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. 32, CC. 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

759
 speedy and public 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
mat 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.

Violation of Civil and Political Rights

The purpose of [CC 32] is to provide a sanction to the deeply cherished

rights and freedoms enshrined in the Constitution. Under [CC 32], it is not
necessary that the public officer acted with malice or bad faith. To be liable,
it is enough that there was a violation of the constitutional rights of the
petitioner, even on the pretext of justifiable motives or good faith in the
performance of one's duties [Cojuangco v. CA, G.R. No. 119398 (1999)].

Art. 32 of the CC provides that moral damages are proper when the rights of
individuals, including the right against deprivation of property without due
process of law, are violated [Meralco v. Spouses Chua, G.R. No. 160422
(2010)].

Art. 34, CC. 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

760
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, CC. 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 nstitute criminal proceedings, the
complaint 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 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. 2220, CC. 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.

In Willful Injury to Property

To sustain an award of damages, the damage inflicted upon [plaintiff’s]

property must be malicious or willful, an element crucial to merit an award
of moral damages under Art. 2220 of the CC [Regala v. Carin, G.R. No.
188715 (2011)].

In Breach of Contract in Bad Faith

To recover moral damages in an action for breach of contract, the breach

must be palpably wanton, reckless, malicious, in bad faith, oppressive, or
abusive. Bad faith imports a dishonest purpose and conscious doing of a
wrong and the person claiming moral damages must prove bad faith by clear
and convincing evidence because good faith is always presumed. The Court
held that there was no bad faith on the part of the petitioners. Hence, the
award for moral damages was not proper [Francisco v. Ferrer G.R. No.
130030, (1999)].

761
It is not enough that one merely suffered sleepless nights, mental anguish,
and serious anxiety as a result of the actuations of the other party. The action
must have been willfully done in bad faith or with ill motive [Spouses
Valenzuela v. Spouses Mano, G.R. No. 172611, July 9, (2010)].

A conscious or intentional design need not always be present to award moral

damages since negligence may occasionally be so gross as to amount to
malice or bad faith. Bad faith, in the context of Art. 2220 of the CC, includes
gross negligence. Thus, we have held in a number of cases that moral
damages may be awarded in culpa contractual or breach of contract when
the defendant acted fraudulently or in bad faith, or is guilty of gross
negligence amounting to bad faith, or in wanton disregard of his contractual
obligations [Bankard, Inc. v. Feliciano, G.R. No 141761 (2006)].

ii. Who may Recover Moral Damages

Relatives of Injured Persons

The omission of brothers and sisters of the deceased passenger in Art.

2206(3) reveals the legislative intent to exclude them from the persons
authorized to recover moral damages for mental anguish by reason of the
death of the deceased (inclusion unius est exclusion alterius). The usage of
the phrase analogous cases in the provision means simply that the situation
must be held similar to those expressly enumerated in the law in question
[Sulpicio Lines v. Curso, supra].

Art. 233 of the Family Code states that the person exercising substitute
parental authority shall have the same authority over the child as the parents.
Persons exercising substitute parental authority are to be considered
ascendants for the purpose of awarding moral damages. [Caravan Travel
and Tours International, Inc. v. Abejar, G.R. No. 170631, (2016)].

Juridical Persons

The award of moral damages cannot be granted in favor of a corporation

762
because, being an artificial person and having existence only in legal
contemplation, it has no feelings, no emotions, no senses. It cannot,
therefore, experience physical suffering and mental anguish, which can be
experienced only by one having a nervous system. The statement in People
vs. Manero and Mambulao Lumber Co. vs. PNB that a corporation may
recover moral damages if it "has a good reputation that is debased, resulting
in social humiliation" is an obiter dictum [ABS-CBN v. CA, supra].

Although the general rule is that a juridical person is not entitled to moral
damages since it cannot experience the same suffering that a natural person
does, Art. 2219(7) expressly authorizes the recovery of moral damages in
cases of libel, slander, or any other form of defamation. Art. 2219(7) does
not qualify whether the plaintiff is a natural or juridical person. Therefore, a
corporation can validly file a complaint for libel or any other form of
defamation and claim for moral damages [Filipinas Broadcasting v. Ago,
G.R. No. 141994, (2005)].

Factors Considered in Determining Amount

The amount of damages awarded in this appeal has been determined by

adequately considering the official, political, social, and financial standing
of the offended parties on one hand, and the business and financial position
of the offender on the other. The SC further considered the present rate of
exchange and the terms at which the amount of damages awarded would
approximately be in U.S. dollars, the defendant being an international airline
[Lopez v. Pan American, G.R. No. L-22415 (1966)].

c. Nominal
Nominal damages consist of damages awarded not for the purposes of
indemnifying the plaintiff for any loss suffered, but for the vindication or
recognition of a right violated by the defendant. Nominal damages are
awarded in every obligation arising from law, contracts, quasi-contracts, acts
or omissions punished by law, and quasi-delicts [PNOC v. CA, G.R. No.
107518, (1998)].

Requisites and characteristics

1. Invasion or violation of any legal or property right.
2. No proof of loss is required.
3. The award is to vindicate the right violated.

763
i. When Nominal Damages are Recoverable

Art. 2221, CC. 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.

Art. 2222, CC. 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.

Art. 2223, CC. 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.

1. Violation of a right

Nominal damages "are recoverable where a legal right is technically violated

and must be vindicated against an invasion that has produced no actual
present loss of any kind.” Its award is thus not for the purpose of
indemnification for a loss but for the recognition and vindication of a right.
When granted by the courts, they are not treated as an equivalent of a wrong
inflicted but simply a recognition of the existence of a technical injury
[Gonzales v. PCIB, G.R. No. 180257 (2011)].

Nominal damages may also be awarded in cases where a property right has
been invaded. [Twin Ace v. Rufina, G.R. No. 160191, (2006)].

2. No actual loss caused or proven

When the plaintiff suffers injury not enough to warrant an award of actual
damages, then nominal damages may be given. [Twin Ace v. Rufina, supra].

Nominal damages may also be awarded where there has been a breach of
contract and no substantial injury or actual damages whatsoever have been
or can be shown [Areola v. CA, G.R. No. 95641, (1994)].

The amount to be awarded shall be equal to or at least commensurate to the

injury sustained considering the concept and purpose of such damages.
[Lufthansa v. CA as cited in PNOC v. CA, supra].

3. Under conditions of equity

The plaintiffs sought to recover damages from the hotel due to its breach of
contract as regards food service for the plaintiff’s guests. The SC did not
award actual and moral damages because it found that the plaintiff’s failure
to inform the hotel of the increase of guests was the proximate cause of the

764
plaintiff’s injury. Nevertheless, the SC awarded nominal damages under
considerations of equity, for the discomfiture that the plaintiffs were
subjected to during the event, averring that the hotel could have managed the
"situation" better, it being held in high esteem in the hotel and service
industry. [Spouses Guanio v. Makati Shangri-la, G.R. No. 190601 (2011)].

Nature and determination of amount

The assessment of nominal damages is left to the discretion of the trial court
according to the circumstances of the case.

Small but substantial

Generally, nominal damages, by their nature, are small sums fixed by the
court without regard to the extent of the harm done to the injured party.
However, it is generally held that nominal damages is a substantial claim, if
based upon the violation of a legal right; in such a case, the law presumes
damage although actual or compensatory damages are not proven [Gonzales
v. People, G.R. No. 159950 (2007)].

Commensurate to the injury suffered

Even if there was no documentary evidence to justify Maria’s claim for
actual damages, she was still awarded nominal damages to vindicate her
right and its value was commensurate to the injury she suffered [Pedrosa v.
CA, G.R. No. 118680, (2001)].

Special reasons extant in the case

Since the assessment of damages are being left to the discretion of the court,
the circumstances of a particular case will determine whether the amount
assessed as nominal damage is within the scope or intent of the law [Robes-
Francisco v. CFI, G.R. No. L- 41093, (1978)].

For instance, in the case of People v. Bernardo, supra, given the relatively
short duration of the child’s kidnapping, the court found the amount of
₱50,000.00 awarded as nominal damages excessive, so it was reduced to
₱10,000.00.

d. Temperate
Art. 2224, CC. 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
cannot, from the nature of the case, be provided with certainty.

Art. 2225, CC. Temperate damages must be reasonable under the

circumstances.

These damages are awarded for pecuniary loss, in an amount that, from the

765
nature of the case, cannot be proved with certainty.

Temperate damages are more than nominal but less than compensatory
damages. [Tan v. OMC Carriers, 2011 supra].

Temperate damages are incompatible with nominal damages hence, cannot

be granted concurrently [Citytrust Bank v. IAC, G.R. No. 84281(1994)].

Requisites

1. Actual existence of pecuniary loss;

2. The nature and circumstances of the loss prevents proof of the exact
amount;

3. They are more than nominal and less than compensatory;

4. Causal connection between the loss and the defendant’s act or omission;

5. Amount must be reasonable.

i. When Temperate Damages are Recoverable

1. Nature of the case prevents determination of actual loss

There are cases where from the nature of the case, definite proof of
pecuniary loss cannot be offered, although the court is convinced that there
has been such loss. For instance, injury to one's commercial credit or to the
goodwill of a business firm is often hard to show certainty in terms of
money.

2. In addition to civil indemnity

766
3. Cases where amount of loss is not Proven

Temperate damages are included in the context of compensatory damages.

In cases where definite proof of pecuniary loss cannot be offered, temperate
damages can be granted if the court is convinced that there has been such
loss. The court awarded temperate damages in lieu of actual damages for
loss of earning capacity where earning capacity is plainly established but no
evidence was presented to support the allegation of the injured party’s actual
income [Pleno v. CA, G.R. No. 56505 (1988)].

The allowance of temperate damages when actual damages were not

adequately proven is ultimately a rule drawn from equity, the principle
affording relief to those definitely injured who are unable to prove how
definite the injury is [Republic v. Tuvera, G.R. No. 148246 (2007)].

4. In addition to other actual damages proven when there is a chronic

and continuing injury involved

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 incompatibility
between actual and temperate damages as they cover two distinct phases
[Ramos v. CA, G.R. No. 124354 (1999)].

ii. Factors in determining amount

In general

The court awarded temperate damages where from the nature of the case,
definite proof of pecuniary loss cannot be adduced, although the court is
convinced that the plaintiff suffered some pecuniary loss. The court also
increased the award of temperate damages from ₱100,000 to ₱150,000,
taking into account the cost of rebuilding the damaged portions of the

767
perimeter fence [De Guzman v. Tumolva, G.R. No. 188072 (2011)].

Receipts amounting to less than P25,000

If the actual damages, proven by receipts during the trial, amount to less than
₱25,000.00, the victim shall be entitled to temperate damages in the amount
of ₱25,000.00, in lieu of actual damages. In this case, the victim is entitled
to the award of ₱25,000.00 as temperate damages considering that the
amount of actual damages proven by receipts is only ₱3,858.50. Hence, the
actual damages shall be deleted.

Conversely, if the amount of actual damages proven exceeds ₱25,000, then

temperate damages may no longer be awarded; actual damages based on the
receipts presented during trial should instead be granted. [People v. Lucero,
G.R. No. 179044 (2010)].

Where no receipts were provided

When no documentary evidence of burial or funeral expenses is presented in

court, the amount of ₱50,000.00 as temperate damages shall be awarded
[People v. Jugueta, G.R. No. 202124, (2016)].

e. Liquidated
Art. 2226, CC. Liquidated damages are those agreed upon by the parties to
a contract, to be paid in case of breach thereof.

Art. 2227, CC. Liquidated damages, whether intended as an indemnity or a

penalty, shall be equitably reduced if they are iniquitous or
unconscionable.

Requisites and characteristics

1. Liquidated damages must be validly stipulated.

2. There is no need to prove the amount of actual damages.

3. Breach of the principal contract must be proved.

768
Rules Governing Breach of Contract

Art. 2228, CC. 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.

The stipulation on attorney’s fees contained in the promissory note

constitutes what is known as a penalty clause. A penalty clause, expressly
recognized by law, is an accessory undertaking to assume greater liability on
the part of the obligor in case of breach of an obligation. It functions to
strengthen the coercive force of obligation and to provide, in effect, the
liquidated damages resulting from such a breach. The obligor would then be
bound to pay the stipulated indemnity without the necessity of proof on the
existence and on the measure of damages caused by the breach [Suatengco v.
Reyes, G.R. No. 162729 (2008)].

General Rule: The penalty shall substitute the indemnity for damages and
the payment of the interests in case of breach.

Exceptions:

1. When there is a stipulation to the contrary.

2. When the obligor is sued for refusal to pay the agreed penalty.

3. When the obligor is guilty of fraud.

The amount can be reduced if:

1. It is unconscionable as determined by the court;

2. There is partial or irregular performance.

In Titan v Unifield, G.R. No. 153874 (2007), the Supreme Court found that
the attorney’s fees stipulated were too high. Since Uni-Field was adequately
protected by separate stipulations on the balance, liquidated damages, and
attorney’s fees in case of breach, the Court reduced the attorney’s fees to

769
25% of the principal amount instead of the whole claim. It also allowed the
recovery of both liquidated damages and attorney’s fees even if both were in
the nature of penalty clauses.

In Ligutan v. CA, G.R. No. 138677 (2002) the court reduced the penalty
from 5% to 3% for being unconscionable. The question of whether a penalty
is reasonable or iniquitous can be partly subjective and partly objective. Its
resolution would depend on such factors as, but not necessarily confined to,
the type, extent and purpose of the penalty, the nature of the obligation, the
mode of breach and its consequences, the supervening realities, the standing
and relationship of the parties, and the like, the application of which, by and
large, is addressed to the sound discretion of the court.

A penalty may be deleted if there is substantial performance or if the penalty

has a fatal infirmity [RCBC v. CA, G.R. No. 128833 (1998)].

f. Exemplary
Art. 2229, CC. 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

General Principles

1. Exemplary damages cannot be awarded alone: they must be

awarded IN ADDITION to moral, temperate, liquidated or
compensatory damages.
2. The purpose of the award is to deter the defendant (and others
in a similar condition) from a repetition of the acts for which
exemplary damages were awarded; hence, they are not
recoverable as a matter of right.
3. The defendant must be guilty of malice or negligence above the
ordinary.
4. Plaintiff is not required to prove the amount of exemplary
damages.
(a) But plaintiff must show that he is entitled to moral, temperate, or
compensatory damage; that is, substantial damages, not purely
nominal ones. This requirement applies even if the contract stipulates

770
 liquidated damages [PNB v. CA, G.R. No. 116181 (1996)].
(b) The amount of exemplary damage need not be pleaded in the
complaint because the same cannot be proved. It is merely incidental
or dependent upon what the court may award as compensatory
damages.

Under Art. 2234 of the CC, a showing that the plaintiff is entitled to
temperate damages allows the award of exemplary damages [Canada v. All
Commodities Marketing (2008)].

Exemplary damages are imposed not to enrich one party or impoverish

another but to serve as a deterrent against or as a negative incentive to curb
socially deleterious actions. [PNB v. CA, supra].

i. When Exemplary Damages are Recoverable

ARISING FROM WHEN EXEMPLARY

DAMAGES ARE GRANTED
Art. Crimes The crime was committed with an
2230 aggravating circumstance/s
Art. Quasidelicts Defendant acted with gross
2231 negligence
Art. Contracts Defendant acted in a wanton,
2232 and Quasicontracts fraudulent, reckless, oppressive,
or malevolent manner

In criminal offenses

Art. 2230, CC. 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.

Award of exemplary damages is part of the civil liability, not of the penalty.
Damages are paid to the offended party separately from the fines.

Unlike the criminal liability which is basically a state concern, the award of

771
damages is primarily intended for the offended party who suffers thereby. It
would make little sense for an award of exemplary damages to be due the
private offended party when the aggravating circumstance is ordinary but to
be withheld when it is qualifying. Withal, the ordinary or qualifying nature
of an aggravating circumstance is a distinction that should only be of
consequence to the criminal, rather than to the civil, liability of the offender.
In fine, relative to the civil aspect of the case, an aggravating circumstance,
whether ordinary or qualifying, should entitle the offended party to an award
of exemplary damages within the unbridled meaning of Art. 2230 [People v.
Dadulla, G.R. No. 172321 (2011)].

In Rape Cases

The retroactive application of these procedural rules cannot adversely affect

the rights of a private offended party that have become vested, where the
offense was committed prior to the effectivity of said rules. Consequently,
aggravating circumstances which were not alleged in the information but
proved during the trial may be appreciated for the limited purpose of
determining appellant’s liability for exemplary damages. The presence of the
qualifying circumstance of knowledge by the offender of the offended
party’s mental disability, although not alleged in the information, was
proved during trial, which justifies the award of exemplary damages [People
v. Diunsay-Jalandoni, G.R. No. 174277 (2007)].

Being corrective in nature, exemplary damages, therefore, can be awarded,

not only in the presence of an aggravating circumstance, but also where the
circumstances of the case show the highly reprehensible or outrageous
conduct of the offender. As in this case, where the offender sexually
assaulted a pregnant married woman, the offender has shown moral
corruption, perversity, and wickedness. He has grievously wronged the
institution of marriage. The imposition then of exemplary damages by way
of example to deter others from committing similar acts or for correction for
the public good is warranted [People v. Alfredo, G.R. No. 188560 (2010)].

In quasi-delicts

Art. 2231, CC. In quasi-delicts, exemplary damages may be granted if the

772
 defendant acted with gross negligence.

In Globe Mackay v. CA, G.R. No. 81262 (1989) the previous employer of
the plaintiff, wrote a letter to the company where the plaintiff subsequently
applied for employment, stating that the plaintiff was dismissed by the
defendant from work due to dishonesty and malversation of the defendant’s
funds.

Previous police investigations revealed that the defendant’s accusations

against the plaintiff were unfounded, and they cleared the plaintiff of such
‘anomalies’. Here, the lower court awarded exemplary damages to the
plaintiff, which the defendant questioned, averring that CC 2231 may be
awarded only for grossly negligent acts, not for willful or intentional acts.

The SC upheld the grant of exemplary damages, stating that while CC 2231
provides that for quasi-delicts, exemplary damages may be granted if the
defendant acted with gross negligence, with more reason is its imposition
justified when the act performed is deliberate, malicious and tainted with
bad faith.

In contracts and quasi-contracts

Art. 2232, CC. In contracts and quasicontracts, the court may award
exemplary damages if the defendant acted in a wanton, fraudulent,
reckless, oppressive, or malevolent manner.

The Court held that the airline’s disrespectful and unhelpful treatment of
Andion amounted to bad faith. Andion was awarded exemplary damages
under Art. 2232 [Singapore Airlines v. Fernandez, G.R. No. 142305 (2003)].

Exemplary damages may be awarded to serve as a deterrent to those who,

like Arco, use fraudulent means to evade their liabilities [Arco Pulp and
Paper Co., Inc. v. Lim, G.R. No. 206806 (2014)].

ii. Requisites

773
 Art. 2233, CC. Exemplary damages cannot be recovered as a matter of
right; the court will decide whether or not they should be adjudicated.

Art. 2234, CC. 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, CC. A stipulation whereby exemplary damages are renounced

in advance shall be null and void.

Requirements for an award of exemplary damages [Francisco v. Ferrer,

supra]:

1. They may be imposed by way of example in addition to

compensatory damages, and only after the claimant's right to
them has been established;
2. They can not be recovered as a matter of right; their
determination depends upon the amount of compensatory
damages that may be awarded to the claimant;
3. The act must be accompanied by bad faith or done in a wanton,
fraudulent, oppressive or malevolent manner.

3. When damages may be recovered

When Allowed
The obligation to repair the damages exists whether done intentionally or
negligently and whether or not punishable by law [Occena v. Icamina,
G.R. No. 82146 (1990)].

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

774
wrong [Custodio v. CA, supra].

Injury vs. Damage vs. Damages [from Custodio

INJURY DAMAGE DAMAGES
The illegal invasion of The loss, hurt, or The recompense or
a legal right harm, which results compensation awarded
from the injury for the damage suffered

Elements for recovery of damages

1. Right of action
2. For a wrong inflicted by the defendant
3. Damage resulting to the plaintiff

Apportionment of Damages
The entire amount of the civil liabilities should be apportioned among all
those who cooperated in the commission of the crime according to the
degrees of their liability, respective responsibilities and actual participation.
Hence, each principal accusedappellant should shoulder a greater share in
the total amount of indemnity and damages than someone who was adjudged
as only an accomplice [People v. Halil Gambao, G.R. No. 172707 (2013)].

Miscellaneous Rules

i. Damages that cannot coexist

Nominal with other damages

Art. 2223, CC. 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.

Nominal damages are incompatible with temperate and exemplary damages.

Nominal damages cannot co-exist with actual or compensatory damages

[Armovit v. CA, G.R. No. 88561 (1990)].

Actual and liquidated

Art. 2226, CC. Liquidated damages are those agreed upon by the parties to
a contract, to be paid in case of breach thereof.

ii. Damages that must co-exist

Exemplary with moral, temperate, liquidated or compensatory

There was no legal basis for the award of exemplary damages since the
private respondent was not entitled to moral, temperate, or compensatory
damages and there was no agreement on stipulated damages [Scott
Consultants & Resource Development Corp. v. CA, G.R. No. 112916
(1995)].

775
iii. Damages that must stand alone

Nominal damages
Art. 2223, CC. 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.

B. DAMAGES IN CASE OF DEATH

1. Death by Crime or Quasi-Delict

Art. 2206, CC. The amount of damages for death caused by a crime or
quasi-delict shall be at least three thousand pesos, even though there may
have been mitigating circumstances. In addition:
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.

In death caused by breach of conduct by a common crime

When death occurs as a result of a crime, the heirs of the deceased are
entitled to the following items of damages:
a. Indemnity for the loss of earning capacity of the deceased — an
amount to be fixed by the Court according to the circumstances of the
deceased related to his actual income at the time of death and his
probable life expectancy, the said indemnity to be assessed and
awarded by the court as a matter of duty, unless the deceased had no
earning capacity at said time on account of permanent disability not
caused by the accused. If the deceased was obliged to give support,
under Art. 291, CC, the recipient who is not an heir, may demand
support from the accused for not more than five years, the exact
duration to be fixed by the court;
b. Moral damages for mental anguish, — an amount to be fixed by the
court. This may be recovered even by the illegitimate descendants and
ascendants of the deceased;

776
 c. Exemplary damages, when the crime is attended by one or more
aggravating circumstances, — an amount to be fixed in the discretion
of the court, the same to be considered separate from fines.
d. Attorney's fees and expenses of litigation, — the actual amount
thereof, (but only when a separate civil action to recover civil liability
has been filed or when exemplary damages are awarded);
e. Interests in the proper cases. [Heirs of Raymundo Castro v. Bustos,
G.R. No. L-25913 (1969)].

2. Civil or Death indemnity

Mere commission of the crime shall entitle the heirs of the deceased to such
damages.

In Rape Cases
Civil indemnity, in the nature of actual and compensatory damages, is
mandatory upon the finding of the fact of rape. [People v. Astrologo, G.R.
No. 169873 (2007)].

The Court explained that the principal consideration for the award of
damages is not the public penalty imposed upon the offender, but based on
the heinousness of the offense of a crime against chastity [People vs.
Apattad, G.R. No. 193188 (2011)].

Even though the qualifying circumstance of minority was not alleged in the
information for rape, the court may still award civil indemnity. The Court
held that the designation of the offense only affects criminal liability, and
not civil liability because civil liability is for the benefit of the injured
party. [People v. Bartolini, G.R. No. 179498 (2010)].

C. GRADUATION OF DAMAGES
1. Duty of injured party
Art. 2203, CC. 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.

This clearly obligates the injured party to undertake measures that will
alleviate and not aggravate his condition after the infliction of the injury, and
places upon him the burden of explaining why he could not do so [Chua v.
Colorite Marketing Corporation, G.R. No. 193969-193970 (2017)].

The plaintiffs maintain that the evidence clearly establishes that they are
entitled to damages in the sum of P7,832.80 instead of P1,254.10 as found

777
by the trial court. There can be no doubt that the expenses incurred by the
plaintiffs as a result of the accident greatly exceeded the amount of the
damages awarded. But bearing in mind that in determining the extent of the
liability for losses or damages resulting from negligence in the fulfillment of
a contractual obligation, the courts have "a discretionary power to moderate
the liability according to the circumstances", we do not think that the
evidence is such as to justify us in interfering with the discretion of the court
below in this respect. As pointed out by that court in its wellreasoned and
well-considered decision, by far the greater part of the damages claimed by
the plaintiffs resulted from the fracture of a bone in the left wrist of Joaquina
Sanchez and from her objections to having a decaying splinter of the bone
removed by a surgical operation. As a consequence of her refusal to submit
such an operation, a series of infections ensued and which required constant
and expensive medical treatment for several years. We agree with the court
below that the defendant should not be charged with these expenses. [Lasam
v. Smith, G.R. No. L-19495 (1924)]

Principle: A party cannot recover damages flowing from consequences

which the party could have reasonably avoided.

2. Rules
a. In crimes
Art. 2204, CC. In crimes, the damages to be adjudicated may be
respectively increased or lessened according to the aggravating or
mitigating circumstances.

Generally, in criminal cases, there are three kinds of damages awarded by

the Court, namely: civil indemnity, moral, and exemplary damages. Actual
damages or temperate damages may be awarded in some instances.

These are the damages that are usually increased or decreased by the court
depending on the attendant circumstances according to [People v. Jugueta,
supra.].

1. Civil Indemnity

It is the indemnity authorized in criminal law for the offended party, in the

778
amount authorized by the prevailing judicial policy and is set apart from
other proven actual damages. This award stems from Art. 100 of the RPC
which states that "Every person criminally liable for a felony is also civilly
liable.” It is technically, not a penalty or a fine; hence, it can be increased by
the Court when appropriate.

2. Moral Damages

Compensatory damages awarded for mental pain and suffering or mental

anguish resulting from a wrong.

They may also be considered and allowed "for resulting pain and suffering,
and for humiliation, indignity, and vexation suffered by the plaintiff as result
of his or her assailant's conduct, as well as the factors of provocation, the
reasonableness of the force used, the attendant humiliating circumstances,
the sex of the victim, [and] mental distress.”

The rationale for awarding moral damages has been explained in Lambert v.
Heirs of Rey Castillon: "[T]he award of moral damages is aimed at a
restoration, within the limits possible, of the spiritual status quo ante; and
therefore, it must be proportionate to the suffering inflicted."

Art. 2220 does not fix the amount of damages that can be awarded. It is
discretionary upon the court, depending on the mental anguish or the
suffering of the private offended party so long as it does not exceed the
award of civil indemnity.

3. Exemplary damages

Also known as "punitive" or "vindictive" damages, exemplary or corrective

damages are intended to serve as a deterrent to serious wrong doings, and as
a vindication of undue sufferings and wanton invasion of the rights of an
injured or a punishment for those guilty of outrageous conduct.

779
It is based on the theory that there should be compensation for the pain
caused by the highly reprehensible conduct of the defendant associated with
such circumstances as willfulness, wantonness, malice, gross negligence or
recklessness, oppression, insult or fraud or gross fraud that intensifies the
injury.

Even without any aggravating circumstances, can be awarded where the

circumstances of the case show the highly reprehensible or outrageous
conduct of the offender.

4. Temperate Damages

Under Art. 2224 of the Civil Code, temperate damages may be recovered, as
it cannot be denied that the heirs of the victims suffered pecuniary loss
although the exact amount was not proved. When no documentary evidence
of burial or funeral expenses is presented in court, the amount of ₱50,000.00
as temperate damages shall be awarded

Amount of Civil Indemnity, Moral Damages, and Exemplary Damages

to be paid for the commission of certain crimes based on People v.
Jugueta (2019):

(e.g. Civil indemnity= 100,000; Moral damages=100,000; Exemplary

Damages=100,000)

Crime Degree of Consummation of Crime

Consummated Frustrated Attempted
I. For those crimes like Murder, Parricide, Serious Intentional Mutilation,
Infanticide, and other crimes involving death of a victim where the penalty
consists of indivisible penalties:
1. Where the penalty ₱100,000.00 ₱75,000.00 ₱50,000.00
imposed is death but
was reduced to
reclusion perpetua
because of RA 9346

780
2. Where the penalty ₱75,000.00 ₱50,000.00 ₱25,000.00
imposed is reclusion
perpetua, other than
the above-mentioned:
II. For Simple Rape/Qualified Rape:
1. Where the penalty ₱100,000.00 ---------------- ₱50,000.00
imposed is Death but -
was
reduced to reclusion
perpetua because of
RA
9346
2. Where the penalty ₱75,000.00 ---------------- ₱25,000.00
imposed is reclusion -
perpetua, other than
the above-mentioned:
III. For Complex crimes under Art. 48 of the Revised Penal Code where
death, injuries, or sexual abuse results, the civil indemnity, moral damages
and exemplary damages will depend on the penalty, extent of violence and
sexual abuse; and the number of victims where the penalty consists of
indivisible penalties:*
1. Where the penalty ₱100,000.00 ---------------- ----------------
imposed is Death but - -
was reduced to
reclusion perpetua
because of RA 9346
2. Where the penalty ₱75,000.00 ---------------- ----------------
imposed is reclusion - -
perpetua, other than
the above-mentioned
*The above Rules apply to every victim who dies as a result of the crime
committed. In other complex crimes where death does not result, like in
Forcible Abduction with Rape, the civil indemnity, moral and exemplary
damages depend on the prescribed penalty and the penalty imposed, as the
case may be.
IV. For Special Complex Crimes like Robbery with Homicide Robbery
with Rape, Robbery with @Intentional Mutilation, Robbery with Arson,
Rape with Homicide, Kidnapping with Murder, Carnapping with
Homicide or Carnapping with Rape, Highway Robbery with Homicide,
Qualified Piracy, Arson with Homicide, Hazing with Death, Rape,
Sodomy or Mutilation and other crimes with death, injuries, and sexual
abuse as the composite crimes, where the penalty consists of indivisible
penalties**
1.1 Where the penalty ₱100,000.00 ---------------- ----------------
imposed is Death but - -

781
was reduced to
reclusion perpetua
because of RA 9346
● In Robbery with ₱100,000.00 ---------------- ----------------
Intentional Mutilation - -
if the penalty imposed
is Death but was
reduced to reclusion
perpetua although
death did not occur
1.2 For the victims ₱75,000.00 ---------------- ----------------
who suffered - -
mortal/fatal wounds
and could have died if
not for a timely
medical intervention
1.3 For the victims ₱50,000.00 ---------------- ----------------
who suffered non- - -
mortal/nonfatal
Injuries
2.1 Where the penalty ₱75,000.00 ---------------- ----------------
imposed is reclusion - -
perpetua, other than
the above-mentioned
● In Robbery with ₱75,000.00 ---------------- ----------------
Intentional Mutilation, - -
if the penalty imposed
is reclusion perpetua.
2.2 For the victims ₱50,000.00 ---------------- ----------------
who suffered - -
mortal/fatal wounds
and could have died if
not for a timely
medical intervention
2.3 For the victims ₱25,000.00 ---------------- ----------------
who suffered non- - -
mortal/nonfatal
injuries:
**1. In Robbery with Physical Injuries, the amount of damages shall
likewise be dependent on the nature/severity of the wounds sustained,
whether fatal or non-fatal.
2. The above rules do not apply if in the crime of Robbery with Homicide,
the robber/s or perpetrator/s are themselves killed or injured in the
incident.
3. Where the component crime is rape, the above rules shall likewise

782
apply, and that for every additional rape committed, whether against the
same victim or other victims, the victims shall be entitled to the same
damages unless the other crimes of rape are treated as separate crimes, in
which case, the damages awarded to simple rape/qualified rape shall
apply.
V. In other crimes that result in the death of a victim and the penalty
consists of divisible penalties
1. Homicide, ₱50,000.00 ₱30,000.00 ₱20,000.00
Infanticide to conceal
the dishonor of the
offender, Duel,
Intentional Abortion
and Unintentional
Abortion, etc.
Note: The amount
indicated here is for
the payment of civil
indemnity and moral
damages only. No
exemplary damages
are awarded in these
cases.
2. Crimes where there ₱50,000.00 ---------------- ----------------
are no stages such as - -
Reckless Imprudence
and Death under
tumultuous affray
3. If an aggravating ₱50,000.00 ₱30,000.00 ₱20,000.00
circumstance was
proven during the trial,
even if not alleged in
the Information,
exemplary damages
are to be awarded in
the following manner,
in addition to civil
indemnity and moral
damages in V.1.:
VI. A. In the crime of Rebellion
1. Where the ₱100,000.00 ---------------- ----------------
imposable penalty is - -
reclusion perpetua and
death occurs in the
course of the rebellion,
the amount the heirs of

783
 those who died are
entitled
1.1 For the victims ₱75,000.00 ---------------- ----------------
who suffered - -
mortal/fatal wounds in
the course of the
rebellion and could
have died if not for a
timely medical
intervention
1.2 For the victims ₱50,000.00 ---------------- ----------------
who suffered non- - -
mortal/nonfatal
Injuries
VII. In all of the above instances, when no documentary evidence of burial
or funeral expenses is presented in court, the amount of ₱50,000.00 as
temperate damages shall be awarded.

b. In quasi-delicts
Art. 2214, CC. In quasi-delicts, the contributory negligence of the plaintiff
shall reduce the damages that he may recover.

Contributory negligence

The alleged contributory negligence of the victim, if any, does not exonerate
the accused in criminal cases committed through reckless imprudence, since
one cannot allege the negligence of another to evade the effects of his own
negligence [Genobiagon v. CA, supra].

If the act of the injured contributed to the principal occurrence of the event
causing the injury, he cannot recover. However, where in conjunction of the
occurrence, he contributes only to his own injury, he may recover the
amount that the defendant responsible for the event should pay for the injury
less a sum deemed a suitable equivalent for his own imprudence. [Rakes v.
Atlantic, G.R. No. L- 1719 (1907)].

In determining whether the passenger is guilty of contributory negligence,

the age, sex, and his or her physical condition should be considered [Cangco
v. Manila Railroad Co., supra].

784
Plaintiff’s negligence

Even if Manila Electric is negligent, its negligence must be proven to be the

proximate and direct cause of the accident [Manila Electric v. Remonquillo,
supra].

If both the parties contributed to the proximate cause, they cannot recover
from one another [Bernardo v. Legaspi, supra].

Grounds for mitigation of damages for quasi-delicts:

1. That the loss would have resulted in any event because of the negligence
or omission of another, and where such negligence or omission is the
immediate and proximate cause of the damage or injury;

2. Defendant has done his best to lessen the plaintiff’s injury or loss.

c. In contracts and quasi-contracts

Art. 2215, CC. 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;
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

1. Grounds for mitigation of damages

For contracts:

1. Violation of terms of the contract by the plaintiff himself;

2. Obtention or enjoyment of benefits under the contract by the plaintiff

himself;

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3. Defendant acted upon advice of counsel in cases where exemplary
damages are to be awarded such as under Arts. 2230, 2231, and 2232;

4. Defendant has done his best to lessen the plaintiff’s injury or loss.

For quasi-contracts:

1. In cases where exemplary damages are to be awarded such as in Art.

2232;

2. Defendant has done his best to lessen the plaintiff’s injury or loss.

The SC deemed CC 2215(2) inapplicable where the harm done to private

respondents outweighs any benefits the plaintiffs may have derived from
being transported to Tacloban instead of being taken to Catbalogan, their
destination and the vessel's first port of call, pursuant to its normal schedule
[Sweet Lines v. CA, G.R. No. L-46340(1983)].

Rule when contracting parties are in pari delicto

Generally, parties to a void agreement cannot expect the aid of the law; the
courts leave them as they are, because they are deemed in pari delicto or "in
equal fault." In pari delicto is "a universal doctrine which holds that no
action arises, in equity or at law, from an illegal contract; no suit can be
maintained for its specific performance, or to recover the property agreed to
be sold or delivered, or the money agreed to be paid, or damages for its
violation; and where the parties are in pari delicto, no affirmative relief of
any kind will be given to one against the other."

This rule, however, is subject to exceptions that permit the return of that
which may have been given under a void contract to:

1. the innocent party [Arts. 1411-1412, CC];

2. the debtor who pays usurious interest [Art. 1413, CC];
3. the party repudiating the void contract before the illegal
purpose is accomplished or before damage is caused to a third
person and if public interest is subserved by allowing recovery
[Art. 1414, CC];
4. the incapacitated party if the interest of justice so demands [Art.

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 1415, CC];
5. the party for whose protection the prohibition by law is
intended if the agreement is not illegal per se but merely
prohibited, and if public policy would be enhanced by
permitting recovery [Art. 1416, CC]; and
6. the party for whose benefit the law has been intended such as in
price ceiling laws [Art. 1417, CC] and labor laws [Arts. 1418-
1419, CC].

Art. 1192 provides that in case both parties have committed a breach of the
obligation, the liability of the first infractor shall be equitably tempered by
the courts. Art. 2215(1), on the other hand, warrants equitable mitigation of
damages in case the plaintiff himself has contravened the terms of the
contract. The plaintiff referred to in Art 2215(1) should be deemed to be the
2nd infractor, while the one whose liability for damages may be mitigated is
the 1st infractor. In this case, Ong was the 1 st infractor while Bogñalbal is
the 2nd infractor. Hence, Ong should first pay the value of the accomplished
work before the damage scheme under Art 1192 is applied [Ong v.
Bogñabal, G.R. No. 149140, (2006)].

d. Liquidated damages
Art. 2227, CC. Liquidated damages, whether intended as an indemnity or a
penalty, shall be equitably reduced if they are iniquitous or
unconscionable.

Pursuant to settled jurisprudence and Article 1229, in relation to Article

2227, of the New Civil Code, the Court deems it proper to reduce the
penalty involved.

The respondents are obligated under the Agreement to complete the

waterproofing works on April 6, 1997, but failed. The remaining work to be
done had to be performed by Esicor, who accomplished the same on April 5,
1998. In light of these, the respondents are then liable for delay for a period
of 365 days, which corresponds to the amount of Php 3,650,000.00 as
penalty under the Agreement.

Without doubt, taking into consideration that the respondents have

787
completed 90% of theproject and the absence of any showing of bad faith on
their part, as well as the fact that the waterproofing works have already been
completed at the respondents' expense, the amount of Php 3,650,000.00 as
penalty is exorbitant under the premises. Therefore, the Court reduces the
same and imposes the amount of Php 200,000.00 as liquidated damages, by
way of penalty. [Swire Realty Development Corp v. Specialty Contracts
General and Construction Services, G.R. No. 188027 (2017)]

e. Compromise
Art. 2031, CC. The courts may mitigate the damages to be paid by the losing
party who has shown a sincere desire for a compromise.

LIST OF RELEVANT LAWS AND REGULATIONS

I. THE CIVIL CODE OF THE PHILIPPINES AND ALL ITS

AMENDATORYLAWS

II. FAMILY CODE OF THE PHILIPPINES (EXECUTIVE ORDER

NO. 209, AS AMENDED)

III. SPECIAL LAWS AND REGULATIONS

Rep. Act No. 7192 Women in Development and Nation

Building Act
Rep. Act No. 8043 Intercountry Adoption Act of 1995
as amended by
Rep. Act No. 9523
Rep. Act No. 8369 Family Courts Act of 1997
Rep. Act No. 8552 Domestic Adoption Law

788
as amended by
Rep. Act No. 9523
Rep. Act No. 8972 Solo Parents' Welfare Act of 2000
Rep. Act No. 9048 An Act Authorizing the City or
Municipal
Civil Registrar or the Consul General
to
Correct a Clerical or Typographical
Error in
an Entry and/or Change of First Name
or
Nickname in the Civil Register
without
need of a Judicial Order, amending for
this
purpose Articles 376 and 412 of the
Civil
Code of the Philippines
Rep. Act No. 9262 Anti-Violence Against Women and
Their
Children Act of 2004
Rep. Act No. 9710 The Magna Carta of Women
Rep. Act No. 10165 Foster Care Act of 2012
Rep. Act No. 10172 An Act Further Authorizing the City
or
Municipal Civil Registrar or the
Consul
General to Correct Clerical or
Typographical Errors in the Day and

789
 Month
in the Date of Birth or Sex of a Person
Appearing in the Civil Register
without /
need of a Judicial Order, amending for
this
purpose Republic Act No. 9048
Rep. Act No. 10354 The Responsible Parenthood and
Reproductive Health Act of 2012
Rep. Act No. 10821 Children's Emergency Relief and
Protection
Act
Rep. Act No. 11166 Philippine HIV and AIDS Policy Act
Rep. Act No. 11222 An Act Allowing the Rectification of
Simulated Birth Records and
Prescribing
Administrative Adoption Proceedings
for
the Purpose
Com. Act No. 141 The Public Land Act
as amended
Pres. Decree No. 1529 Property Registration Decree
as amended by as amended by the Personal Property
Rep. Act No. 11057 Security Act
Pres. Decree No. 957 Subdivision and Condominium
as amended by Buyer's
Pres. Decree No. 1216 Protection Act
Act No. 3952 The Bulk Sales Law
as amended by
Rep. Act No. 111
Act No. 4122 Installment Sales Law (Recto Law)

790
Rep. Act No. 4726 The Condominium Act
as amended by
Rep. Act No. 7899
Rep. Act No. 6552 Realty Installment Buyer Protection
Act
(Maceda Law)
Rep. Act No. 6657 Comprehensive Agrarian Reform Law
as amended by
Rep. Act No. 9700
Rep. Act No. 6732 Administrative Reconstitution of Lost
or
Destroyed Original Copies of
Certificates of
Titles
Rep. Act No. 7279 Urban Development and Housing Act
of 1992
Rep. Act No. 7394 Consumer Act of the Philippines
Rep. Act No. 83 71 The Indigenous Peoples' Rights Act of
1997
Rep. Act No. 8792 Electronic Commerce Act
Rep. Act No. 9646 Real Estate Service Act of the
Philippines
Rep. Act No. 9904 Magna Carta for Homeowners and
Homeowners' Associations
Rep. Act No. 10023 Authorizing the Issuance of Free
Patents to
Residential Lands
Rep. Act No. 10173 Data Privacy Act of 2012
Rep. Act No. 11201 Department of Human Settlements

791
 and
Urban Development Act
Rep. Act No. 11231 Agricultural Free Patent Reform Act
Rep. Act No. 10752 The Right-of-Way Act
Rep. Act No. 11313 Safe Spaces Act
Rep. Act No. 11291 Magna Carta of the Poor
Central Bank (now Suspension of Usury Law
Bangko Sentral ng
Pilipinas) Circular No.
905, series of 1982
Bangko Sentral ng Rate of interest in absence of
Pilipinas Circular No. stipulation
799, series of 2013

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