3 2020 Up Boc Civil Law Reviewer.pdf

U.P. LAW BOC

CIVIL LAW

U.P. LAW BOC

CIVIL LAW

U.P. LAW BOC

CIVIL LAW

U.P. LAW BOC

CIVIL LAW

TABLE OF CONTENTS IN GENERAL ..........................................................1 A. B. C. D. E. F. G. H.

WHEN LAW TAKES EFFECT ............................2 RETROACTIVITY OF LAWS ........................2 MANDATORY OR PROHIBITORY LAWS .....2 WAIVER OF RIGHTS ...................................2 REPEAL OF LAWS ......................................3 CONFLICT OF LAWS ..................................3 HUMAN RELATIONS ................................. 22 APPLICABILITY OF PENAL LAWS............. 28

PERSONS AND FAMILY RELATIONS .................. 29 A.

PERSONS................................................. 30 1. Kinds of Persons.................................... 30 2. Capacity to act ....................................... 33 3. Domicile and Residence of Persons ....... 37 B. RIGHTS AND OBLIGATIONS OF COUPLES IN INTIMATE RELATIONSHIPS ......................... 38 C. MARRIAGE ............................................... 42 1. Requisites ............................................. 42 2. Marriages Celebrated Abroad................. 47 3. Foreign Divorce ..................................... 47 4. Void Marriages ...................................... 48 5. Voidable marriages ................................ 55 6. Unmarried Cohabitation ......................... 60 D. LEGAL SEPARATION................................ 60 1. Grounds for Legal Separation [Art. 55, FC]: ............................................................. 60 2. Defenses [Art. 56, FC]: ........................... 62 3. Procedure.............................................. 63 4. Effects of filing petition ........................... 64 5. Effects of pendency ............................... 64 6. Effects of decree of legal separation ....... 64 7. Reconciliation ........................................ 65 8. Effect of death of one of the parties ........ 65 E. RIGHTS AND OBLIGATIONS BETWEEN HUSBAND AND WIFE ................................... 69 F. PROPERTY RELATIONS OF THE SPOUSES ................................................................. 70 1. Marriage settlements.............................. 70 2. Donations by reason of marriage (Donations Propter Nuptias) ................... 71 3. Void donations by the spouses ............... 73 4. Absolute Community of Property ............ 74 5. Conjugal Partnership of Gains ................ 74 6. Regime of separation of property............ 82 7. Judicial separation of property ................ 82 8. Property regime of unions without marriage ............................................................. 84 G. THE FAMILY ............................................. 85 1. Concept of family ................................... 85 2. Effects on legal disputes ........................ 86 3. Family home .............................................. 86

H.

PATERNITY AND FILIATION ..................... 88 1. Legitimate children ................................ 90 2. Proof of filiation ..................................... 91 3. Illegitimate children................................ 92 4. Impugned Legitimacy/Action to Impugn Legitimacy ............................................... 95 5. Legitimated children .............................. 97 I. ADOPTION ............................................... 98 1. RA 8552: Domestic Adoption Law .......... 98 2. RA 8043: Law on Inter-Country Adoption 105 J. SUPPORT .............................................. 108 1. What it comprises ................................... 108 2. Who are obliged to give support ............... 108 3. Source of support ................................... 109 4. Order of support ..................................... 109 5. Amount of support .................................. 110 6. Manner and time of payment ................... 110 7. Renunciation and termination.................. 110 8. Support pendente lite.............................. 111 9. Procedure in applications for support........ 111 K. PARENTAL AUTHORITY ........................ 112 1. General Provisions .............................. 112 2. Substitute parental authority ................ 112 3. Special parental authority .................... 112 4. Effect of parental authority over the child’s person ................................................ 113 5. Effects of parental authority over the child’s property................................................. 114 6. Suspension or termination of parental authority ................................................ 114 7. Solo parents (R.A. No. 8972) ............... 115 L. EMANCIPATION ..................................... 117 1. Cause of emancipation ........................ 117 2. Effect of emancipation ......................... 117 M. SUMMARY JUDICIAL PROCEEDINGS IN THE FAMILY CODE ............................................ 117 N. USE OF SURNAMES .......................... 121 O. ABSENCE........................................... 122 1. Provisional measures in case of absence ... ........................................................... 122 2. Declaration of absence ........................ 122 3. Administration of the property of the absentee ............................................... 123 4. Presumption of death........................... 123 P. CIVIL REGISTRAR .................................. 124 PROPERTY ........................................................ 127 A.

CLASSIFICATION OF PROPERTY .......... 128 1. Immovables [Art. 415, CC] ...................... 128 2. Movables [Art. 416, 417, CC] .................. 129 B. OWNERSHIP .......................................... 130 1. Bundle of rights ................................... 130

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2. Distinction between real and personal rights. ........................................................... 130 3. Modes of Acquiring Ownership ............. 131 4. Limitations of Ownership ...................... 131 C. ACCESSION ........................................... 132 1. Right to hidden treasure ....................... 132 2. Rules of accession............................... 132 D. QUIETING OF TITLE ............................... 142 1. Requisites ........................................... 142 2. Distinctions between quieting title and removing/preventing a cloud ................... 142 3. Prescription/non-prescription of action .. 144 E. CO-OWNERSHIP .................................... 145 1. Characteristics of Co-ownership ........... 145 2. Sources of Co-ownership ..................... 146 3. Rights of Co-owners ............................ 147 4. Termination of Co-ownership................ 152 F. POSSESSION ......................................... 153 1. Characteristics ..................................... 153 2. Acquisition of Possession..................... 154 3. Effects of Possession ........................... 156 4. Loss of Movable or Unlawful Deprivation of a Movable .............................................. 157 5. Possession in the Concept of Owner, Holder, One’s Own Name, and in the Name of Another .................................................. 158 6. Rights of the Possessor ....................... 160 7. Loss or Termination of Possession ....... 162 G. USUFRUCT ................................................ 162 1. Characteristics ..................................... 162 2. Classification ....................................... 163 3. Rights and Obligations of Usufructuary . 166 4. Rights of the Owner ............................. 170 5. Extinction, Termination, and Extinguishment ........................................................... 171 H. EASEMENTS............................................... 174 1. Characteristics ..................................... 174 2. Classification ....................................... 176 3. Modes of Acquiring Easements ............ 184 4. Rights and Obligations of the Owners of Dominant and Servient Estates............... 186 5. Modes of Extinguishment ..................... 187 I. NUISANCE.............................................. 188 1. Nuisance per se................................... 188 2. Nuisance per accidens ......................... 188 3. Liabilities ............................................. 190 4. No Prescription .................................... 190 5. Criminal prosecution as a remedy......... 190 6. Judgment with abatement as a remedy. 190 7. Extrajudicial abatement as a remedy .... 191 8. Special Injury to Individual .................... 191 9. Right of Individual to Abate Public Nuisance. ........................................................... 192 10. Right to Damages ............................ 192 11. Defenses to Action........................... 193 12. Who May Sue on Private Nuisance... 193

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J.

MODES OF ACQUIRING OWNERSHIP ... 193

PRESCRIPTION ................................................. 205 A. 1. 2. B. C. D.

TYPES OF PRESCRIPTION .................... 205 Acquisitive Prescription........................ 205 Extinctive Prescription ......................... 206 WHEN PRESCRIPTION IS INAPPLICABLE ... ............................................................... 207 PRESCRIPTION OR LIMITATION OF ACTIONS................................................ 208 INTERRUPTION [ART. 1155, CC] ............ 209

SUCCESSION .................................................... 210 A.

GENERAL PROVISIONS ................................ 211 Definition ............................................. 211 Succession occurs at the moment of death ........................................................... 211 3. Kinds of successors............................. 212 B. TESTAMENTARY SUCCESSION ...................... 213 1. Wills .................................................... 213 2. Institution of heirs ................................ 221 3. Substitution of heirs ............................. 223 4. Conditional testamentary dispositions and testamentary dispositions with a term ..... 224 5. Legitime .............................................. 226 C. LEGAL OR INTESTATE SUCCESSION ............ 238 1. General Provisions .............................. 238 2. Order of Intestate Succession ................. 241 D. PROVISIONS COMMON TO TESTATE AND INTESTATE SUCCESSION ................................................. 243 1. Right of accretion ................................ 243 2. Capacity to Succeed by Will or Intestacy .... ........................................................... 244 3. Acceptance and repudiation of the inheritance............................................. 245 4. Collation.............................................. 246 5. Partition and Distribution of Estate ....... 248 1. 2.

OBLIGATIONS AND CONTRACTS .................... 252 A. 1. 2. 3. B. 1. 2. 3. 4. 5. 6. C. 1. 2. 3.

GENERAL PROVISIONS......................... 253 Definition ............................................. 253 Elements of an obligation..................... 253 Sources of Obligations......................... 253 NATURE AND EFFECT OF OBLIGATIONS 254 Obligation to give................................. 254 Obligation to do or not to do ................. 255 Transmissibility of obligations............... 255 Performance of Obligations.................. 255 Breaches of Obligations....................... 256 Remedies available to creditor in cases of breach................................................... 260 KINDS OF OBLIGATIONS ....................... 263 Pure.................................................... 263 Conditional .......................................... 263 Obligation with a period or a term ......... 267

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4. 5. 6. D. 1. 2. 3. 4. 5. 6.

Alternative or facultative ....................... 268 Joint and Solidary Obligations .............. 270 Obligations with a penal clause ............ 274 EXTINGUISHMENT OF OBLIGATIONS.... 275 Payment or performance ...................... 275 Loss of determinate thing due or impossibility or difficulty of performance .. 281 Condonation or remission of debt ......... 283 Confusion ............................................ 286 Compensation ..................................... 286 Novation .............................................. 289

CONTRACTS…………………………………………292 A. 1. 2. 3. B. C. D. E. 1. 2. 3. 4. 5.

GENERAL PROVISIONS ......................... 292 Stages of Contracts ............................. 292 Classification ....................................... 292 Essential requisites .............................. 293 FORMALITY ............................................ 302 REFORMATION OF INSTRUMENTS ....... 304 INTERPRETATION OF CONTRACTS ...... 307 DEFECTIVE CONTRACTS ...................... 310 Rescissible contracts ........................... 310 Voidable contracts ............................... 313 Unenforceable contracts ...................... 315 Void or inexistent contracts .................. 316 Distinguish: resolution and rescission of contracts ................................................ 319

NATURAL OBLIGATIONS .................................. 320 A. B. C. D. E.

DEFINITION ................................................ 324 KINDS OF ESTOPPEL ................................... 324 PERSONS BOUND........................................ 324 CASES WHERE ESTOPPEL APPLIES ................. 324 LACHES .................................................... 325

SPECIAL CONTRACTS ...................................... 326 A.

SALES ...................................................... 327 1. General provisions ............................... 327 2. Parties................................................. 333 3. Obligations of the Vendor ..................... 335 4. Obligations of the Vendee .................... 342 5. Transfer of Ownership.......................... 344 6. Risk of Loss ......................................... 350 7. Documents of Title ............................... 352 8. Warranties ........................................... 354 9. Breach of Contract ............................... 360 10. Performance of the Contract............. 368 11. Extinguishment of Sales ................... 371 B. TRUSTS .................................................... 379 C. AGENCY .................................................... 383 1. Nature and form ................................... 383 2. Kinds ................................................... 385 D. COMPROMISE........................................ 388 E. LOAN ...................................................... 392 1. Loan .................................................... 392 2. Commodatum ...................................... 394

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3. 4.

Simple Loan (mutuum) ........................ 396 Interests On Loan ................................ 397 F. DEPOSIT ................................................ 401 1. Voluntary Deposit ................................ 401 2. Necessary Deposit .............................. 403 3. Judicial Deposit Or Sequestration ........ 404 G. LEASE ...................................................... 404 1. Definition ............................................. 404 2. Who are Qualified or Disqualified? ........... 405 3. Obligations of Parties.............................. 405 4. Payment................................................. 406 5. Termination ............................................ 407 6. Renewal ................................................. 407 7. Unlawful Detainer ................................ 407 8. Transfer of Lease ................................ 408 9. Sub-Lease.............................................. 408 10. Warranties............................................ 409 11. Special Provisions ................................ 409 QUASI-CONTRACTS ......................................... 411 A.

NEGOTIORUM GESTIO (UNAUTHORIZED MANAGEMENT) .......................................... 411 SOLUTIO INDEBITI (UNDUE PAYMENT)............ 412 OTHER QUASI-CONTRACTS ......................... 414

B. C.

LAND TITLES AND DEEDS................................ 415 A.

TORRENS SYSTEM................................... 416 1. Concept and Background .................... 416 2. Certificate of Title ................................ 419 B. AGRARIAN TITLES AND ANCESTRAL LANDS AND DOMAINS ...................................................... 421 1. Concept and Registration of Agrarian Titles ........................................................... 422 2. Concept and Registration of Ancestral Lands and Domains ......................................... 424 C. CITIZENSHIP REQUIREMENT ......................... 425 1. Individuals ........................................... 425 2. Corporations ....................................... 426 D. ORIGINAL REGISTRATION ............................ 427 1. Who May Apply ................................... 427 2. Registration Process and Requirements..... ........................................................... 429 3. Remedies............................................ 434 4. Cadastral Registration ......................... 438 E. SUBSEQUENT REGISTRATION ....................... 440 1. Voluntary Dealings .............................. 442 2. Involuntary Dealings ............................ 445 F. NON-REGISTRABLE PROPERTIES .................. 448 G. DEALINGS WITH UNREGISTERED LANDS ......... 450 TORTS ............................................................... 451 A. 1. 2. 3. 4.

PRINCIPLES ............................................... 452 Abuse of Right; elements ..................... 452 Unjust Enrichment ............................... 454 Liability without fault ............................ 454 Acts Contrary to Law ........................... 455

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2. Distinction between real and personal rights. ........................................................... 130 3. Modes of Acquiring Ownership ............. 131 4. Limitations of Ownership ...................... 131 C. ACCESSION ........................................... 132 1. Right to hidden treasure ....................... 132 2. Rules of accession............................... 132 D. QUIETING OF TITLE ............................... 142 1. Requisites ........................................... 142 2. Distinctions between quieting title and removing/preventing a cloud ................... 142 3. Prescription/non-prescription of action .. 144 E. CO-OWNERSHIP .................................... 145 1. Characteristics of Co-ownership ........... 145 2. Sources of Co-ownership ..................... 146 3. Rights of Co-owners ............................ 147 4. Termination of Co-ownership................ 152 F. POSSESSION ......................................... 153 1. Characteristics ..................................... 153 2. Acquisition of Possession..................... 154 3. Effects of Possession ........................... 156 4. Loss of Movable or Unlawful Deprivation of a Movable .............................................. 157 5. Possession in the Concept of Owner, Holder, One’s Own Name, and in the Name of Another .................................................. 158 6. Rights of the Possessor ....................... 160 7. Loss or Termination of Possession ....... 162 G. USUFRUCT ................................................ 162 1. Characteristics ..................................... 162 2. Classification ....................................... 163 3. Rights and Obligations of Usufructuary . 166 4. Rights of the Owner ............................. 170 5. Extinction, Termination, and Extinguishment ........................................................... 171 H. EASEMENTS............................................... 174 1. Characteristics ..................................... 174 2. Classification ....................................... 176 3. Modes of Acquiring Easements ............ 184 4. Rights and Obligations of the Owners of Dominant and Servient Estates............... 186 5. Modes of Extinguishment ..................... 187 I. NUISANCE.............................................. 188 1. Nuisance per se................................... 188 2. Nuisance per accidens ......................... 188 3. Liabilities ............................................. 190 4. No Prescription .................................... 190 5. Criminal prosecution as a remedy......... 190 6. Judgment with abatement as a remedy. 190 7. Extrajudicial abatement as a remedy .... 191 8. Special Injury to Individual .................... 191 9. Right of Individual to Abate Public Nuisance. ........................................................... 192 10. Right to Damages ............................ 192 11. Defenses to Action........................... 193 12. Who May Sue on Private Nuisance... 193

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J.

MODES OF ACQUIRING OWNERSHIP ... 193

PRESCRIPTION ................................................. 205 A. 1. 2. B. C. D.

TYPES OF PRESCRIPTION .................... 205 Acquisitive Prescription........................ 205 Extinctive Prescription ......................... 206 WHEN PRESCRIPTION IS INAPPLICABLE ... ............................................................... 207 PRESCRIPTION OR LIMITATION OF ACTIONS................................................ 208 INTERRUPTION [ART. 1155, CC] ............ 209

SUCCESSION .................................................... 210 A.

GENERAL PROVISIONS ................................ 211 Definition ............................................. 211 Succession occurs at the moment of death ........................................................... 211 3. Kinds of successors............................. 212 B. TESTAMENTARY SUCCESSION ...................... 213 1. Wills .................................................... 213 2. Institution of heirs ................................ 221 3. Substitution of heirs ............................. 223 4. Conditional testamentary dispositions and testamentary dispositions with a term ..... 224 5. Legitime .............................................. 226 C. LEGAL OR INTESTATE SUCCESSION ............ 238 1. General Provisions .............................. 238 2. Order of Intestate Succession ................. 241 D. PROVISIONS COMMON TO TESTATE AND INTESTATE SUCCESSION ................................................. 243 1. Right of accretion ................................ 243 2. Capacity to Succeed by Will or Intestacy .... ........................................................... 244 3. Acceptance and repudiation of the inheritance............................................. 245 4. Collation.............................................. 246 5. Partition and Distribution of Estate ....... 248 1. 2.

OBLIGATIONS AND CONTRACTS .................... 252 A. 1. 2. 3. B. 1. 2. 3. 4. 5. 6. C. 1. 2. 3.

GENERAL PROVISIONS......................... 253 Definition ............................................. 253 Elements of an obligation..................... 253 Sources of Obligations......................... 253 NATURE AND EFFECT OF OBLIGATIONS 254 Obligation to give................................. 254 Obligation to do or not to do ................. 255 Transmissibility of obligations............... 255 Performance of Obligations.................. 255 Breaches of Obligations....................... 256 Remedies available to creditor in cases of breach................................................... 260 KINDS OF OBLIGATIONS ....................... 263 Pure.................................................... 263 Conditional .......................................... 263 Obligation with a period or a term ......... 267

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IN GENERAL

IN GENERAL CIVIL LAW

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4. 5. 6. D. 1. 2. 3. 4. 5. 6.

Alternative or facultative ....................... 268 Joint and Solidary Obligations .............. 270 Obligations with a penal clause ............ 274 EXTINGUISHMENT OF OBLIGATIONS.... 275 Payment or performance ...................... 275 Loss of determinate thing due or impossibility or difficulty of performance .. 281 Condonation or remission of debt ......... 283 Confusion ............................................ 286 Compensation ..................................... 286 Novation .............................................. 289

CONTRACTS…………………………………………292 A. 1. 2. 3. B. C. D. E. 1. 2. 3. 4. 5.

GENERAL PROVISIONS ......................... 292 Stages of Contracts ............................. 292 Classification ....................................... 292 Essential requisites .............................. 293 FORMALITY ............................................ 302 REFORMATION OF INSTRUMENTS ....... 304 INTERPRETATION OF CONTRACTS ...... 307 DEFECTIVE CONTRACTS ...................... 310 Rescissible contracts ........................... 310 Voidable contracts ............................... 313 Unenforceable contracts ...................... 315 Void or inexistent contracts .................. 316 Distinguish: resolution and rescission of contracts ................................................ 319

NATURAL OBLIGATIONS .................................. 320 A. B. C. D. E.

DEFINITION ................................................ 324 KINDS OF ESTOPPEL ................................... 324 PERSONS BOUND........................................ 324 CASES WHERE ESTOPPEL APPLIES ................. 324 LACHES .................................................... 325

SPECIAL CONTRACTS ...................................... 326 A.

SALES ...................................................... 327 1. General provisions ............................... 327 2. Parties................................................. 333 3. Obligations of the Vendor ..................... 335 4. Obligations of the Vendee .................... 342 5. Transfer of Ownership.......................... 344 6. Risk of Loss ......................................... 350 7. Documents of Title ............................... 352 8. Warranties ........................................... 354 9. Breach of Contract ............................... 360 10. Performance of the Contract............. 368 11. Extinguishment of Sales ................... 371 B. TRUSTS .................................................... 379 C. AGENCY .................................................... 383 1. Nature and form ................................... 383 2. Kinds ................................................... 385 D. COMPROMISE........................................ 388 E. LOAN ...................................................... 392 1. Loan .................................................... 392 2. Commodatum ...................................... 394

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3. 4.

Simple Loan (mutuum) ........................ 396 Interests On Loan ................................ 397 F. DEPOSIT ................................................ 401 1. Voluntary Deposit ................................ 401 2. Necessary Deposit .............................. 403 3. Judicial Deposit Or Sequestration ........ 404 G. LEASE ...................................................... 404 1. Definition ............................................. 404 2. Who are Qualified or Disqualified? ........... 405 3. Obligations of Parties.............................. 405 4. Payment................................................. 406 5. Termination ............................................ 407 6. Renewal ................................................. 407 7. Unlawful Detainer ................................ 407 8. Transfer of Lease ................................ 408 9. Sub-Lease.............................................. 408 10. Warranties............................................ 409 11. Special Provisions ................................ 409 QUASI-CONTRACTS ......................................... 411 A.

NEGOTIORUM GESTIO (UNAUTHORIZED MANAGEMENT) .......................................... 411 SOLUTIO INDEBITI (UNDUE PAYMENT)............ 412 OTHER QUASI-CONTRACTS ......................... 414

B. C.

LAND TITLES AND DEEDS................................ 415 A.

TORRENS SYSTEM................................... 416 1. Concept and Background .................... 416 2. Certificate of Title ................................ 419 B. AGRARIAN TITLES AND ANCESTRAL LANDS AND DOMAINS ...................................................... 421 1. Concept and Registration of Agrarian Titles ........................................................... 422 2. Concept and Registration of Ancestral Lands and Domains ......................................... 424 C. CITIZENSHIP REQUIREMENT ......................... 425 1. Individuals ........................................... 425 2. Corporations ....................................... 426 D. ORIGINAL REGISTRATION ............................ 427 1. Who May Apply ................................... 427 2. Registration Process and Requirements..... ........................................................... 429 3. Remedies............................................ 434 4. Cadastral Registration ......................... 438 E. SUBSEQUENT REGISTRATION ....................... 440 1. Voluntary Dealings .............................. 442 2. Involuntary Dealings ............................ 445 F. NON-REGISTRABLE PROPERTIES .................. 448 G. DEALINGS WITH UNREGISTERED LANDS ......... 450 TORTS ............................................................... 451 A. 1. 2. 3. 4.

PRINCIPLES ............................................... 452 Abuse of Right; elements ..................... 452 Unjust Enrichment ............................... 454 Liability without fault ............................ 454 Acts Contrary to Law ........................... 455

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PERSONS AND FAMILY RELATIONS

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 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.

CIVIL LAW

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.

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

Remedies

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 International Law [Coquia Pangalangan] Public Internatio As to nal Law States and Persons internationall y recognized involved organizations States in their relationships amongst Transactio themselves ns involved (Except cases of human rights violations)

v. Private and AguilingPrivate International Law Individuals or corporations Private transactions between private individuals which involve a foreign element

State may resort to diplomatic protest, peaceful means of settlement of international disputes such as diplomatic negotiations, arbitration or conciliation or adjudication by filing a case before international tribunals

All remedies provided by municipal laws of the state such as resort to courts or administrative 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. c. Sources 1. Codes and Statutes 2. Treaties and International Conventions 3. Treatises, Commentaries and Studies of Learned Societies 4. Judicial Decisions

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2. Jurisdiction and Choice of Law Jurisdiction [Coquia Aguiling-Pangalangan] Judicial Jurisdiction The power or authority of a court to try a case, render judgment, and execute it in accordance with law i.

and

Legislative Jurisdiction The ability of the state to promulgate laws and enforce them on all persons and property within its territory

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.

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Types of Judicial Jurisdiction

JURISDICTION OVER THE PERSON Competence or power of a court to render a judgment that will bind 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.

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Traditional approaches are used for simplicity, convenience, uniformity, and predictability. At times, at the expense of just results. Modern Approaches Place of Most Identifies a plurality of factors Significant and factual contacts in light Relationship of choice of law principles. Looks at the policy behind the laws of the involved state Interest Analysis and the interest each state had in applying its own law. Weighs conflicting interests and apply the law of the state Comparative whose interest would be Impairment more impaired if its laws were not followed. This approach looked into the general policies of the state beyond those reflected Functional in its substantive law and to Analysis policies and values “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 AguilingPangalangan] 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”

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The Problem of Characterization SINGLEMULTI-ASPECT ASPECT METHOD METHOD Traditional Modern All important factors of the Concentrates case are analyzed and the on one applicable law is arrived at element of a by “rationally elaborating situation in and applying the policies order to and purposes underlying connect the the particular legal rules case to a that come in question as particular legal well as the needs of community 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]

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CHARACTERIZATION 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.

the matter to the law of either the forum (remission – 2a in figure below) or a third state (transmission – 2b in figure below).

State B

State A Internal law

State C

Internal law

1

2b

SUBJECT-MATTER CHARACTERIZATION Classification by a court of a factual situation into a legal category. SUBSTANCE-PROCEDURE DICHOTOMY Directs the court to the extent it will apply foreign law SUBSTANTIVE PROCEDURAL The Court MAY The Court SHALL apply apply foreign law 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. 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

Conflict of Law Rule

2a

Conflict of Law Rule

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 Reject of that state (i.e. that which the would apply to a domestic case renvoi with no conflict-of-laws complications). Looks into not just the internal Accept law of the foreign state, but also the the choice-of-law rules renvoi applicable in multi-state cases. Desistan The forum court, upon ce/ reference to foreign law, sees Mutual that such law only applies to its disclaim own nationals and has no er of provision for application to a jurisdicti non-national. on The forum court would assume Foreign the same position that the Court foreign court would take were Theory the case litigated in the foreign court.

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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)].

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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

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 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

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 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

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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. ● 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; ● When the application of the Foreign law might ENDANGER THE VITAL INTEREST of the state; ● 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:

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a. Those who are citizens of the Philippines at the time of the adoption 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 Must be born in the birth Philippines Must have resided in the Residence Philippines since birth At least 18 at the time of filing Age the petition Must be of good moral character

Character

Education

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Must believe in the underlying principles of the Constitution Must have conducted self in a proper and irreproachable manner during entire period of residence Must have received primary and secondary education in any public or private educational institution duly

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recognized by the DECS, where Philippine history, government and civics are taught and prescribed as part of the school curriculum Should the applicant have minor children of school age, said children must be enrolled in schools mentioned above Must have a known trade, business, profession or lawful occupation

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

Must derive income sufficient to support self and family

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; o Within 1 year from reaching the age of majority

NOT APPLICABLE to applicants who are college degree holders but are unable to practice because of their citizenship Must be able to read, write, Language AND speak Filipino or any of the dialects Must have mingled with Filipinos; evinced a sincere Conduct 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

Rationale: Naturalization is a privilege and not a right. The law must be strictly construed against the applicant.

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

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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 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 An individual who has been stripped of his nationality by his own former government without having an opportunity to acquire another.

De Facto An individual possessed of a nationality but whose country does not give them protection outsider 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.

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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]

Kinds of Domicile Refers to a person’s domicile at birth Legitimate child: domicile of Domicile of father origin

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.

Illegitimate child: domicile of mother Freely chosen by a person sui juris Acquired by the concurrence of physical presence in the new place and unqualified intention to make that place one’s home Domicile assigned to a person legally incapable of choosing their own domicile Minors: follow the domicile of the parents

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. 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.

Domicile of Choice (Voluntary Domicile)

Constructive Domicile

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 Personal status Includes both condition and capacity.

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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 the fitness of a man to be the subject of legal relations

Capacity to Act the power to do acts with juridical 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

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for a number of years (followed by the Philippines) b. A person’s unexplained absence is judicially investigated and established 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 individual’s personal law.

by

the

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 RELATIONS

IN

FAMILY

Art. 15, CC. Laws relating to family rights and duties, or to the status, condition and legal

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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 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]

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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 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

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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.

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

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

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

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]

ii.

Divorce and Separation

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)

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.

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.”

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 Traditional approach: LEX CELEBRATIONIS

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]

iii.

Annulment and Declaration of Nullity

LOCI

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

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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)].

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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

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 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

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 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

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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. ● 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; ● When the application of the Foreign law might ENDANGER THE VITAL INTEREST of the state; ● 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:

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a. Those who are citizens of the Philippines at the time of the adoption 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 Must be born in the birth Philippines Must have resided in the Residence Philippines since birth At least 18 at the time of filing Age the petition Must be of good moral character

Character

Education

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Must believe in the underlying principles of the Constitution Must have conducted self in a proper and irreproachable manner during entire period of residence Must have received primary and secondary education in any public or private educational institution duly

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Occupation

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recognized by the DECS, where Philippine history, government and civics are taught and prescribed as part of the school curriculum Should the applicant have minor children of school age, said children must be enrolled in schools mentioned above Must have a known trade, business, profession or lawful occupation

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

Must derive income sufficient to support self and family

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; o Within 1 year from reaching the age of majority

NOT APPLICABLE to applicants who are college degree holders but are unable to practice because of their citizenship Must be able to read, write, Language AND speak Filipino or any of the dialects Must have mingled with Filipinos; evinced a sincere Conduct 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

Rationale: Naturalization is a privilege and not a right. The law must be strictly construed against the applicant.

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

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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 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 An individual who has been stripped of his nationality by his own former government without having an opportunity to acquire another.

De Facto An individual possessed of a nationality but whose country does not give them protection outsider 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.

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CIVIL 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]

Kinds of Domicile Refers to a person’s domicile at birth Legitimate child: domicile of Domicile of father origin

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.

Illegitimate child: domicile of mother Freely chosen by a person sui juris Acquired by the concurrence of physical presence in the new place and unqualified intention to make that place one’s home Domicile assigned to a person legally incapable of choosing their own domicile Minors: follow the domicile of the parents

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. 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.

Domicile of Choice (Voluntary Domicile)

Constructive Domicile

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 Personal status Includes both condition and capacity.

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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 the fitness of a man to be the subject of legal relations

Capacity to Act the power to do acts with juridical 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

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for a number of years (followed by the Philippines) b. A person’s unexplained absence is judicially investigated and established 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 individual’s personal law.

by

the

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 RELATIONS

IN

FAMILY

Art. 15, CC. Laws relating to family rights and duties, or to the status, condition and legal

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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 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]

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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 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

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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.

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

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

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

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]

ii.

Divorce and Separation

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)

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.

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.”

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 Traditional approach: LEX CELEBRATIONIS

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]

iii.

Annulment and Declaration of Nullity

LOCI

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

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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 jurisdiction over the parties. iv.

personal

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

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.

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

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.

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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 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.

Adoption

An act by which relations of paternity and affiliation are recognized as legally existing between persons not so related by nature.

Note: In the Philippines however, in light of Article 16 of the CC, one need not classify the subject property, as the aforementioned

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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 Property

to

Transfer

or

Acquire

Real property – governed by the law of the place where the property is located (LEX SITUS) 3. Extrinsic and Conveyances

Intrinsic

Validity

of

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

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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 CONTRACTS

LAW

IN

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,

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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).

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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 arbitral award is final and binding, oust our courts of jurisdiction international arbitral award, is still reviewable under certain conditions.

2. Intrinsic Validity of Contracts LEX LOCI CONTRACTUS Law of the place of making. Looks into where “the last act is done which is 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

that the does not as the judicially

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

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

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

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.

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:

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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 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.

CIVIL LAW

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]

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Includes issues of substance such as order of succession, amount of successional rights and intrinsic validity of testamentary provisions [Art. 16, CC]

GR: Lex Loci Celebrationis EXN: Art. 35(1), (4), (5), (6), FC; Art. 36-38, FC. Intrinsic Validity: Personal law Personal relations between spouses: Personal Law Property relations: see Art. 80, FC

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 Art. 15, CC and Art. 16, CC Art. 50, CC and Art. 51, Domicile CC Personal Status Personal Law (either and Capacity Nationality or Domicile) FAMILY RELATIONS Marriage Extrinsic Validity: Nationality

CIVIL LAW

Generally, lex rei sitae Divorce and Lex fori for grounds of Separation; divorce Grounds for legal separation Traditional Approach: Annulment and Lex loci celebrationis Declaration of Modern Approach: Lex Nullity domicilii (marital domicile) Determination of legitimacy: personal law Parental authority: Parental personal law of the father relations Adoption: personal law of the child if adopter and adoptee have different nationalities PROPERTY Immovables Lex situs Lex domicilii Movables Lex situs Lex loci actus Property in the Lex situs, WON real or Philippines personal Extrinsic validity: Lex situs Intrinsic validity: Lex situs Conveyances UNLESS Lex intentionis is different and is PROVED CONTRACTS Lex Loci Celebrationis Extrinsic Validity UNLESS clear that the intention was otherwise Lex contractus Intrinsic Validity Lex solutionis Lex intentionis

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Capacity to Personal law enter into contract Interpretation of Lex intentionis Contract WILLS, SUCCESSIONS, ADMINISTRATION OF ESTATES FILIPINO who makes a will ABROAD: Lex Nationalii Lex Loci Celebrationis Extrinsic Validity ALIEN who makes a will IN THE PHILIPPINES: Lex nationalii Lex domicilii Lex loci celebrationis Intrinsic validity Lex nationalii Lex nationalii Interpretation of Wills

Revocation

Probate

Trusts

If clear and unambiguous, Lex intentionis DONE ABROAD BY ONE NOT DOMICILED IN THE PHILIPPINES: Lex loci celebrationis Lex domicilii DONE ABROAD BY ONE DOMICILED IN THE PHILIPPINES: Lex loci actus Lex domicilii Lex loci celebrationis DONE WITHIN THE PHILIPPINES: Lex loci actus (Hence, Philippine law) Lex fori Lex loci celebrationis If there is an effective choice of law: courts of the place where the trust is being administered If there is no effective choice of law: law that will sustain the validity of the trust (place of administration or domicile)

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

1. Violation of Human Dignity 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 enumeration being

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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

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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 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)].

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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 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]. 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. L14986 (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

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person shall be liable to the latter for damages: (1) Freedom of religion;

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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;

(2) Freedom of speech; (3) Freedom to write for the press or to maintain a periodical publication; (4) Freedom detention;

from

arbitrary

or

illegal

(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

(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 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

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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. 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 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

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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)]

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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, 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.

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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 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.

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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. A pre-judicial question is one raised in a criminal case by the accused, which is of such a nature that, if decided favorably to the accused in a civil case, will cause the supposed crime to disappear; the prejudicial question must be determinative of the case before the court, and, that jurisdiction to try said question must be lodged in another tribunal.

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.

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Capacity and incapacity depends on the law, therefore it cannot be modified by agreements. It is a matter of public interest. [Tolentino]

A. PERSONS 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

Juridical Capacity

Capacity to Act

Fitness of a person Power to do acts with to be the subject of legal effect legal relations Passive

Active

Aptitude for the Aptitude to exercise holding and rights enjoyment of rights Inherent in natural Must be acquired persons Lost upon death

Lost through death and other causes

Can exist without Must exist with capacity to act juridical capacity Cannot be limited or May be restricted or restricted 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 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.

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

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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 twentyfour 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 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 7 months or more

Less than 7 months

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When Considered Born If alive (e.g. breathe independently, upon delivery)

can etc.

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]

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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. 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 Cannot be used for succession purposes succession purposes In any circumstance

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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, Male different sex Above 15 but under 60, Older same sex Under 15 but Between 15 Between 15 over 60 and 60 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 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

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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

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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 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? Those whose age are below the age of majority.

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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, G.R. No. L12471 (1959)].

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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, 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.

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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. 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]

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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 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]

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d. Prodigality

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f. Family Relations

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]. 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]

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: 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]

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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 concurrent application of the different laws of two or more states, a person is simultaneously considered a national by said states

Refers to the situation in which a person simultaneously owes, by some positive act, loyalty to two or more 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. 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

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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.

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]

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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)].

B. RIGHTS AND OBLIGATIONS OF COUPLES IN INTIMATE RELATIONSHIPS (R.A. 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. ○ 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,”

Foundlings cannot be considered stateless and citizenship is not required for domicile [PoeLlamanzares v. COMELEC, G.R. No. 221697 (2016)] A house is not necessary to establish domicile [Jalosjos v. COMELEC, G.R. No. 193237 (2012)].

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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].

Prohibited a. Causing physical harm to the woman or her child; Acts b. c. d.

The prohibited acts shall likewise constitute grounds for legal separation under Art. 55(1) of the Family Code. ! In which case, the coolingoff period under Art. 58 of the Family Code shall not apply [Sec. 19, RA 9262].

Scope

e.

Unmarried Cohabitants (i.e., couples in intimate relationships), wherein the parties live as husband and wife without the benefit of marriage. ! 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]. f.

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Threatening to cause the woman or her child physical harm; Attempting to cause the woman or her child physical harm; Placing the woman or her child in fear of imminent physical harm; 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; 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; Inflicting or threatening to inflict physical harm on oneself for the

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g.

h.

i.

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purpose of controlling her actions or decisions; 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; 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; 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.

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2. Right to be protected against acts of VAWC RULE ON VIOLENCE AGAINST WOMEN AND THEIR CHILDREN [A.M. No. 04-10-11SC] 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,

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c.

d.

e.

f.

g.

h. i.

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contacting or otherwise communicating in any form with the offended party, either directly or indirectly; 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; Requiring the respondent to stay away from the offended party and any designated family or household member at a distance specified by the court; 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; Directing lawful possession and use by the offended party of 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; 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; Directing the respondent to provide support to the woman and/or her child, if entitled to legal import; 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;

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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. 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

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Effect of Absence or Defect/Irregularity of the Requisites on the Marriage [Art. 4, FC]

C. MARRIAGE

Absence 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,

Essential

Formal

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

Void

Voidable

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.

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)]

Defect or Irregularity

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

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sex as registered is here allowed. [Republic v. Cagandahan, G.R. No. 166676 (2008)]

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

2. Age

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].

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; 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].

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 Either party was of unsound mind [Art. 45 (2), FC]

Consent

Status of Marriage

Vitiated/ Defective

Voidable

Mistake as to the identity of the other party [Art. 35 (5), FC] Absent e.g. if one mistakenly marries his fiancee's twin [Tolentino]

Void

Mistake as to the legal consequences and nature of the marriage ceremony e.g. thinking the ceremony is a joke, pretend, or playacting [Tolentino]

Void

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Absent

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Consent was obtained by fraud: 1. Non-disclosure of previous conviction of crime of moral turpitude 2. Concealment of pregnancy by another man Vitiated/ 3. Concealment of Defective STD 4. Concealment of drug addiction, habitual alcoholism, homosexuality, or lesbianism [Art. 46, FC] Consent was obtained by 1. Force 2. Intimidation 3. Undue Influence [Art. 45 (4), FC]

Vitiated/ Defective

Marriage entered into by a person whose real intent is to avoid prosecution for Absent rape [People v. Santiago, G.R. No. 27972 (1927)]

Voidable

Voidable

Void

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.

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Minimum Requirements Prescribed by Law: a. Appearance of contracting parties personally before the solemnizing 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.

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)]

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:

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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; 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] 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]

3.

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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 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)].

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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

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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 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)]. 4.

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;

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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 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 Inherent in the parties, carried everywhere Lex Nationalii – Laws relating to family rights and duties, or to the status, condition, and legal capacity of persons are binding upon PH citizens even though living abroad [Art. 15, CC] Foreign marriages void under PH law due to lack of an essential requisite, even if valid under foreign laws, will not be recognized.

Formal Requisites Requirements independent of parties

the

Lex loci celebrationis – If valid where celebrated, then valid everywhere; forms of contracting marriage are to be regulated by the law where it is celebrated. [Art. 2, CC]

Foreign marriages may be void under PH law due to absence of a formal requisite under foreign laws.

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

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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

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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 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

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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 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)]

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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).

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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; 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).

Exception to the Exception: If there is a judgment annulling the previous marriage or declaring it void ab initio. [Art. 42, FC]

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)]

Declaration of presumptive death is not necessary

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]

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 Family Code Family Code [Art. 41] 4 years under normal As to circumstances period 2 years under extraordinary circumstances In order to remarry, As to summary remarriage proceeding is necessary Can be instituted by As to who the spouse can present, any institute the interested action party, and the subsequent spouse Subsequent marriage is automatically As to effect terminated by on the recording subsequent of an affidavit marriage of reappearance of the absent spouse Well-founded belief that the As to absent ground spouse is dead

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in the CC and CC [Art. 390] Absent for at least 7 years Absent for at least 4 years

The spouses themselves

Upon reappearance, judicial proceeding is necessary to declare marriage null and void

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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

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the essential marital obligations of marriage, shall likewise be void even if such incapacity becomes manifest only after its solemnization. Psychological Vice of Incapacity Consent Has nothing to do with consent, but the incapacity The consent to comply with the essential itself is marital obligations of defective marriage Psychological Incapacity Consent might be valid, but the party is unable to assume essential marital obligations Ground for nullity

Insanity

Vice of consent Ground annulment

for

The application of Art. 36 is confined to the most serious cases of personality disorders clearly demonstrative of an utter insensitivity or inability 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)]

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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. 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)]. Note: Both disorders.

spouses

have

personality

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:

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a. Between collateral blood relatives, legitimate or illegitimate, up to the fourth civil degree;

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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]

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-inlaw; 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

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]

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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 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. L53703 (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

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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-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]

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

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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 twentyone, 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.

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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: 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.

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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 a cause 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; 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.

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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.

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Concealment of sexually transmissible disease The STD that was concealed from the other spouse need not be serious and 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

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party was obtained by violence, intimidation, or undue influence.

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

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)].

There is violence when in order to wrest consent, serious or irresistible force is employed. [Art. 1335, CC]

If the potent spouse was aware, it is implied that he/she renounced copulation by consenting to the marriage. [Tolentino]

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

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

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

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 Who Ground PrescripRatificacan file (Art. tion (art. tion (Art. (Art. 47, 45, FC) 47, FC) 45, FC) FC) Party 18 Within 5 Free or above years after cohabitati but attaining on of the Lack of below 21 age of 21 party who Parenta entered l the Parent or Before Consen guardian marriage party below t without who did 21 reaches parental not give 21 consent consent after

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Sane spouse with no knowled ge of the other’s insanity

Insanity

Force, Intimida -tion, undue influence

Impoten ce

Any time before the death of either party

attaining age of 21 Free cohabitati on of insane party after insane party comes to reason

Legal guardian of insane party

Insane party

Fraud

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Injured (defraud ed) party

Injured party

Potent spouse

STD

Healthy party

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Within 5 years after marriage

prescribe s Cannot be ratified by action; prescribe s

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.

During lucid interval or after regaining sanity, and before death

Within 5 years after discovery of fraud

Within 5 years after disappeara nce of force, undue influence, or intimidation

Within 5 years after marriage

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] Free cohabitati on of the defraude d party after having full knowledg e of fraud Free cohabitati on of the injured party after the force or intimidati on or undue influence has ceased or disappea red Cannot be ratified by action;

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].

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Comparative Table on Void and Voidable Marriages Void Voidable No validity from the time of Valid until Nature performance; annulled inexistent from the very beginning Can be Susceptible Cannot be ratified, to ratified subject to 2 Ratification exceptions Only coACP or any ownership other [Art. 147, FC] ; property No ACP or Property regime in CPG despite Relation accordance having with the entered into a marriage marriage settlement settlement Illegitimate Children under Art. are 165, FC (with legitimate if Status of Arts. 36 and conceived Children 53, FC as or born exceptions prior to the under Art. 54, decree FC) May be attacked directly or collaterally, but for the Cannot be purpose of attacked remarriage, a collaterally judicial How declaration of Cannot be Impugned nullity is impugned required [Art. after death 40, FC] of one of the parties Can be impugned even after death of the parties

Who May Challenge Validity

A proper interested person (depending on the dates of marriage and of filing of proceeding)

A party to the marriage

Susceptible to Prescription

Does not prescribe

Prescribes

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

1. Grounds for Legal Separation [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.

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Acts of Violence according to the “AntiViolence 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

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threat of force, physical harm, or through intimidation directed against the woman or her child or her/his immediate 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]

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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;

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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;

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)].

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 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.

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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 (1960)]

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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. L11766 (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. L11766 (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)]

f.

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)]

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. 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.

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

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h. Death of either pendency of action

party

during

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. L30977 (1972)].

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

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. 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. L9667 (1956)]

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

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. Page 64 of 532

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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 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)]

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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.

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]

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Void Marriages, Voidable Marriages and Legal Separation Void Marriages

Voidable Marriages

Grounds

1. Absence of essential or formal requisites a. One is a minor b. No authority to marry c. No valid marriage license d. Bigamous and polygamous marriages e. Mistake of identity f. Void subsequent marriages 2. Psychological incapacity 3. Incestuous marriages 4. Marriages against public policy 5. Subsequent marriages which did not comply with Art. 52

Defenses

None

Prescription No Prescription

Defect in any of the essential requisites: 1. Lack of parental consent, 2. Insanity, 3. Fraud, 4. Force, intimidation, undue influence, 5. Impotence, 6. Serious and incurable STD

Legal Separation Grounds not relating to any of the essential or formal requisites: 1. Repeated physical violence 2. Pressure to compel to change religious/political affiliation 3. Corruption/ inducement to engage in prostitution 4. Final judgment with sentence of more than 6 years 5. Drug addiction/ habitual alcoholism 6. Homosexuality/ lesbianism 7. Bigamous marriage 8. Sexual infidelity or perversion 9. Attempts against the life of petitioner 10. Abandonment without just cause for more than 1 year 1. 2. 3. 4. 5. 6.

1. Lack of parental consent a. Spouses 5 years after turning 21 b. Parents before the spouses turn 21 2. Insanity a. Insane spouse during

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Condonation Consent Connivance Collusion Recrimination Prescription

Within 5 years from the occurrence of the cause

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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 file

According to A.M. No. 0211-10-SC: 1. Before March 18, 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

Only the spouses (cannot survive the death of the plaintiff)

Effects of Pendency

In the absence of adequate provisions in a written agreement: 1. Support of spouses 2. Support and custody of children 3. Visitation rights

Effects of Decree

1. Properties [Art. 147 148, FC] a. Art. 147 (equal shares) governs property relations of

Only the spouses (cannot survive the death of the plaintiff)

1. Live separately 2. Designate either of them or a third person as administrator of property 3. Support of spouses 4. Support and custody of children 5. Visitation rights

1. Properties [Art. 50, 1. Properties [Art. 63(2), FC] FC] a. ACP/CPG a. Dissolution and dissolved, Liquidation of share ACP/CPG forfeited to heirs if bad 2. Support and Custody faith [Art. 213, FC]

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void marriages b. Art. 148 (in proportion) governs property relations of bigamous adulterous relationships 2. Status of Children [Art. 54, FC] General Rule: Conceived or born before the judgment of absolute nullity, illegitimate

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b. Donations a. Parental authority valid, to the parent except if designated by bad faith Court after all c. Insurance relevant may be consideration revoked if b. Tender years bad faith presumption for d. No Child under 7 y.o. succession [Art 213(2), FC] for spouse in bad faith 3. Inheritance, Donations and Designation in 2. Status of Children Insurance Policies [Sec. [Art. 54, FC] 22, rules on Legal a. Conceived Separation] or born before 4. Continued Use of judgment, Surname [Art. 372, CC] legitimate.

Exceptions: Conceived or born a. Before the judgment of 3. Continued Use of annulment; Surname [Art. b. Before the 371, CC] judgment of a. Dependent absolute on her nullity under being the Art. 36 innocent (Psychological or guilty Incapacity) party c. Of the subsequent marriage under Art. 53 (Failure to Record the 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) Page 68 of 532

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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.

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

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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].

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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

7. Use of Surname For Married Women A woman may use [Art. 370, CC]: 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)].

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. 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.

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govern the property relations of the subsequent marriage [Art. 103(3), FC]

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 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

2. Donations by reason of marriage (Donations Propter Nuptias) 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 3. Donations made in favor of persons other than the spouses even if founded on the intended marriage

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Distinguished from Ordinary Donations

B. Void marriage

Donations propter Ordinary Donations nuptias Does not require Express acceptance express acceptance required

General rule: There must be a judicial declaration of nullity for the void marriage.

May include future Cannot include property (subject to future property formalities of wills) If present property is donated and property regime is not absolute community, limited to 1/5 [Art. 84, FC]

No limit to donation of present property provided legitimes are not impaired

1. Art 40, in rel. to Art 52 and 53 (subseque nt marriage before securing judicial declaratio n of nullity)

If doneespouse contracted the second marriage in bad faith (knowing that it was void), donations in favor of the second marriage are revoked by operation of law.

2. Art 44 (bad faith in securing declaratio n of presumpti ve death)

If either or both spouses in the subseque nt marriage acted in bad faith (knowing that the person was still alive), donations in favor of the subseque nt marriage is revoked by

Grounds for Grounds for revocation found in 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 Propter Nuptias [Art. 86, FC]

Donation

A. Marriage not celebrated Donation contained marriage settlement

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Revoked by operation of in law Does not prescribe

Donation Donor’s choice contained in a separate Prescribes within 5 instrument years from supposed date of marriage

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If both parties acted in good faith, revocatio n will be by donor’s choice; within 5 years from date of finality of the judicial declaratio n of nullity.

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operation of law.

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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. All other Donor’s void choice, marriages regardless of good/bad faith of the donee.

3. Void donations spouses

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

by

the

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 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)]

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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 Property

Community

of

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 in the

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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 Gains

Partnership

of

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.

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The presumption applies that all properties acquired during the marriage belong to the CPG. There are 3 distinct patrimonies in this

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system, the husband’s capital property, the wife’s paraphernal property, and the conjugal property.

Comparison of ACP and CPG Absolute Community of Property (ACP)

Conjugal Partnership of Gains (CPG)

When it At the precise moment of the For marriages after the Family Code, CPG commences celebration of the marriage [Art. 88, becomes the property regime only if agreed FC] to by the parties through a marriage settlement. What consists of

it All the properties owned by the Proceeds, products, fruits, and income of spouses at the time of the their separate properties celebration of the marriage or Everything acquired by them during acquired thereafter [Art. 91, FC] marriage through their own efforts Under the ACP, spouses cannot Everything acquired through their efforts or exclude specific properties from by chance. the regime unless done in settlement. Winnings from gambling shall Specific properties [Art. 117, FC] accrue to the community property 1. Acquired by onerous title during but obligations from gambling shall the marriage at the expense of the not. [Art. 95, FC] Common Fund; 2. Acquired through the labor, Property acquired during marriage industry, work, or profession of is presumed to have been obtained either or both spouses through joint efforts of parties, even 3. Fruits from common property and though one did not actually net fruits of the exclusive property of participate in the acquisition. This each spouse is true for a party whose efforts 4. Share of either spouse in hidden consisted in the care and treasure, whether as finder or maintenance of the family owner of property where treasure household. Such is regarded as was found contributions to the acquisition of 5. Acquired through occupation such common property by one who has as fishing or hunting no salary, income, work or 6. Livestock existing at dissolution of industry. [Ocampo v. Ocampo, partnership in excess of what is G.R. No. 198908 (2015)] 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)]

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Loans contracted during the marriage are conjugal, and so is any property acquired therefrom [Mendoza v. Reyes, G.R. No. L31625 (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 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 remains exclusive property [Art. 92, FC]

Properties acquired before the Property brought into the marriage by marriage, for those with legitimate each spouse as his/her own descendants by a former marriage (to protect rights of children by a former marriage) Properties acquired during the marriage by a gratuitous title, i.e. donation, inheritance by testate and intestate succession, including the fruits of such properties

Properties acquired during the marriage by a gratuitous title, i.e. donation, inheritance by testate and intestate succession (but the fruits of such properties form part of the CPG)

Except: When expressly provided Except: When expressly provided by the by the donor or testator that the donor or testator that the property shall form property shall form part of the ACP part of the CPG

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Properties for personal use i.e. Property acquired by right of redemption, by wearing apparel, toilet articles, barter, or by exchange with property eyeglasses belonging to either spouse Except: 1. Luxurious jewelry and those of special value that increase in value over time (partakes of the nature of an investment)

Plata v. Yatco, G.R. No. L-20825 (1964): Plata purchased property when she was single. When married, she and her husband Bergosa co-signed a mortgage on the property. Upon foreclosure, Bergosa was sued for illegal detainer. A writ of 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)].

Presumption

All properties acquired during the marriage form part of the ACP, unless it be proven that they are excluded. [Art. 93, FC]

All property acquired during the marriage, whether made, contracted, or registered in the name of one spouse, are 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 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;

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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 insufficient, the spouses are solidarily liable for the unpaid balance from their separate properties except for: 1. Debts contracted by either spouse before marriage which have not redounded to the benefit of the family; 2. Support of illegitimate children; and 3. Liabilities incurred by either spouse arising from crime or quasi-delict.

If conjugal partnership property is insufficient, the spouses are solidarily liable for the unpaid balance from their separate properties. Gambling losses of any kind (i.e. legal or illegal) shall be borne by the losing spouse’s separate property [Art. 123, FC] DBP v. Adil, G.R. No. L-4085 (1988): Loan contracts signed by both spouses are conjugal, and they are jointly liable for payment, even if only one spouse signs a subsequent promissory note.

Ayala Investment v. Ching, G.R. No. 118305 (1998): The Supreme Court ruled Gambling losses of any kind (i.e. that the indirect benefits that might accrue legal or illegal) shall be borne by to a husband in signing as a surety or the losing spouse’s separate guarantee in an agreement not in favor of property [Art. 95, FC] 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 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, administration, enjoyment, and disposition of property

The administration and enjoyment of the community/conjugal property shall belong to both spouses jointly. In case of disagreement, the husband’s decision shall prevail, subject to recourse to the court by the wife for a proper remedy, within 5 years from the date of contract [Art. 96, 124 FC]. De Ansaldo v. Sheriff of Manila, G.R. No. L43257 (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

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title until it appears after the dissolution and liquidation of the partnership that there are net assets. Either spouse may, through a will, Disposition or encumbrance of conjugal dispose of his or her interest in the property requires the following: Authority of community property. [Art. 97, FC] the court or written consent of the other spouse. The absence of such will render However, the will should refer only such encumbrance void. [Art. 124, par. 2, to his or her share in the FC] community property. 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 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 of Terminates upon [Art. 99, 126 FC]: the regime 1. Death of either spouse – follow rules in Art. 103 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 ACP/CPG. facto 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

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Effect of de If it is necessary to administer or encumber separate property of spouse who left, facto spouse present may ask for judicial authority to do this. separation 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] Abandonment Present/aggrieved spouse may petition the court for: 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 of Procedure [Art. 102, FC] Procedure [Art. 129, FC] assets and 1. Prepare an inventory of 1. Prepare an inventory of all liabilities assets of ACP and of properties spouses with market 2. Amounts advanced by CPG in values payment of personal debts and 2. Debts and obligations obligations shall be credited to the are paid with community CPG property, and separate 3. Reimburse each spouse for the use debts and obligations not of his/her exclusive funds in the charged to ACP paid by acquisition of property or for the respective assets of value of his or her exclusive spouses property, the ownership of which a. If obligations has been vested by law in the exceed the assets conjugal partnership of the ACP, nothing 4. Debts and obligations of CPG is divided. shall be paid out of the conjugal Creditors can go assets, otherwise both spouses are after the separate solidarily liable with their exclusive properties of the property spouses, which are

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3. 4.

5.

6.

7. 8.

solidarily liable for the deficiency Delivery of whatever remains in their exclusive property The balance, or net remainder, is divided equally between the spouses, or in accordance to the proportion agreed upon in the marriage settlement, irrespective of how much each brought into the community If personal obligations of a spouse exceed his/her separate property, creditor can go after the share of the spouse on the net remainder of the ACP, without prejudice to the provisions of law on forfeitures and delivery of presumptive legitimes After covering all community obligations and obligations of spouses, balance of separate properties 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 Presumptive legitimes are delivered to common children Conjugal dwelling goes to: a. Spouse with whom majority of common children choose to remain (below 7 y.o., = deemed to have chosen the mother based on the Page 81 of 532

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5. Remains of the exclusive properties shall be delivered to respective owner-spouses. 6. Indemnification for loss/deterioration of movables belonging to either spouse, even due to fortuitous event, used for the benefit of the family 7. Net remainder of CPG shall constitute the profits which shall be divided equally between husband and wife except when: a. A different proportion or division was agreed upon in the marriage settlements b. There has been a voluntary waiver or forfeiture of such share as provided in the FC c. Presumptive legitimes are delivered to common children d. Conjugal dwelling goes to: i. 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) ii. Whoever the court chooses in case of lack of majority

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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 property

separation

of

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 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 property

separation

of

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

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Sufficient Causes for Judicial Separation of Property [Art. 135, FC]

When after voluntary dissolution of 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.

Grounds for Return to Previous Regime [Art. 141, FC]

Spouse of petitioner Termination of the civil has been sentenced interdiction to a penalty which carries with it the penalty of civil interdiction Spouse of petitioner Reappearance is judicially declared absentee spouse an absentee

of Separation of Property

Loss of parental authority of the spouse of petitioner has been decreed by the court

Restoration of parental authority to the spouse previously deprived of it

Spouse of petitioner has abandoned the latter or failed to comply with his or her obligations to the family

When the spouse who left the conjugal home without legal separation resumes common life with the other

The spouse granted the power of administration in the marriage settlements has abused that power

When the court, being satisfied that the spouse granted the power of administration will not again abuse that power, authorizes the resumption of said administration

At the time of the petition, the spouses have been separated in fact for at least 1 year and reconciliation is highly improbable.

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When it applies

Agreed upon in the marriage settlements by the 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 consists of

Reconciliation and resumption of common life of the spouses who had been separated in fact for at least 1 year

Present or future property or both 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

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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, administration, enjoyment, and disposition

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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

Applicabil ity

Spouses may own, dispose, possess, and administer separate estates without the consent of the other 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 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.

Art. 147, FC

Art. 148, FC

Man and woman living together as husband and wife, with capacity to marry (Art. 5, without any legal impediment) 1. at least 18 years old 2. not violative of Art. 37 (incestu ous void marriag e) 3. not violative of Art. 38 (void marriag e by reason of public policy) 4. not bigamo us

Man and woman living together as husband and wife, NOT capacitated to marry: 1. Under 18 years old 2. Adulterous relationship 3. Bigamous/polyga mous marriage 4. Incestuous marriages under Art. 37 5. Void marriages by reason of public policy under Art. 38

Other void marriages due to absence of formal requisite Salaries and Wages

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Owned in equal shares

Separately owned by parties

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Propertie s acquired through exclusive funds

Remains exclusive, provided there is proof

Remains exclusive

Propertie s acquired by both through work and industry

Governed by rules on coownership

Owned in common in proportion to respective contribution

Propertie s acquired while living together

Owned in equal shares since it is presumed to have been acquired through joint efforts

Forfeiture

Where only one party to a void marriage is in good faith, share of party in bad faith is forfeited: In favor of their common children In case of default of or waiver by any or all of the common children or their descendants , each vacant share shall belong to the respective surviving descendants

No presumption of joint acquisition. When there is evidence of joint acquisition but none as to the extent of actual contribution, there is a presumption of equal sharing.

If one party did not participate in acquisition, presumed to have 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 coowned property without the consent of the other party until cohabitation is terminated.

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If one party is validly married to another, his/her share in the co-owned properties will accrue to the ACP/CPG of his/her existing valid marriage. If the party who acted in bad faith is not validly married to another, his/her share shall be forfeited in the same manner as that provided in Art 147. The same rules on forfeiture shall apply if both parties are in bad faith.

In the absence of such descendants , such share belongs to the innocent party

G. THE FAMILY 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: Page 85 of 532

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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 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.

f.

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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)]

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,

The enumeration of brothers and sisters as members of the same family does not comprehend sisters-in-law and brothers-inlaw. [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]

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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]

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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 constitution. d. Debts due to laborers, mechanics, architects, builders, materialmen 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.

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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 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

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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 FILIATION

AND

The filiation of children may be by nature or by adoption. Natural filiation may be legitimate or illegitimate. [Art. 163, FC] See table below.

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Status

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Children Who Have this Status

Rights

Effects on Succession

Legitimate

a. Conceived OR born during the valid marriage of the parents [Art. 164, FC] b. Conceived through artificial insemination [Art. 164, FC] c. Children of a subsequent marriage (after declaration of presumptive death) conceived prior to its termination [Art. 43, FC] d. Conceived or born before the final judgement of annulment 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] g. Adopted Children** [RA 8552]

a. Bear the surnames of the father and the mother b. Receive support from parents, ascendants, and brothers/sisters in proper cases c. Entitled to legitimate and other successional rights [Art. 174, FC] d. Claim legitimacy [Art. 173, FC]

Legitimate children are entitled to 1/2 of the estate of the parent divided amongst themselves [Art. 888, CC]

Illegitimate

Conceived AND born outside a a. Bear the surname valid marriage [Art. 165, FC] of the mother b. Bear the surname of the father if filiation has been expressly 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]

Each illegitimate child is entitled to an amount 1/2 the share of a legitimate child [Art. 176, FC]

Legitimated* Conceived AND born outside a Same as Legitimate Same as Legitimate valid marriage provided that: Child [Art. 179, FC] Child a. At the time of conception: the parents were NOT Page 89 of 532

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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] Adopted**

Those adopted through From the Domestic From Domestic Domestic [RA 8552] or Adoption Act: Adoption Act: Intercountry Adoption [RA 8043] a. Same as Legitimate a. Same as Child [Sec. 17, RA Legitimate Child 8552] [Sec. 18, RA 8552] b. Right to rescind BUT the adopted adoption under child cannot inherit specific cases [Sec. by representation 19, RA 8552] because the relationship is only between adopter and adoptee [Sayson v. CA, G.R. No. 89224-25 (1992)] b. May also inherit from biological parents if they left a will [Sec. 18, RA 8552]

The time of birth is the criterion of legitimacy. [Tolentino]

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.

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]

A legitimate child is one that is born in lawful wedlock or within a competent time afterwards. Page 90 of 532

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

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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] 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]

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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 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.

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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.

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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]

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 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)]

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]

3. Illegitimate children

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)]

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) [SempioDy]

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)]

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)]

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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)]

parents. [De Jesus v. Syquia, G.R. No. L39110 (1933)]

"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 (1985)]

DNA evidence can still be used even after the death of the parent. [Estate of Rogelio Ong v. Diaz, G.R. No. 171713 (2007)]

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)]

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)]

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

Other evidence DNA evidence can be used as proof of paternity. [Agustin v. CA, G.R. No. 162571 (2005)]

Marriage certificates cannot be used as proof of filiation. [Lim v. CA, G.R. No. L-39381 (1975)]

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-

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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] 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]

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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)] 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)]

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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

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Day of Birth of the Child Status of Relative to the 2 Marriages the Child [Art 168, FC] 1st marriage: within 300 days Legitimate of termination to 1st AND Marriage 2nd marriage: before 180 days after solemnization 1st marriage: within 300 days Legitimate of termination to 2nd AND Marriage 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. 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.

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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)]

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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 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

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years from the time their cause of action accrues. [Art. 182, FC] 2.

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)

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 legal what exists by nature.

The law creates by fiction a relation which did not in fact exist.

Persons affected

Natural children

Strangers (generally)

Procedure

Extrajudicial acts of parents

Always judicial

Who should apply

Both parents

Both parents, except: 1. One spouse seeks to adopt the

3.

Effect on parentchild relationship

Same status and rights with that of a legitimate child not only in relation to the legitimizing parents but also to other relatives.

legitimate child of the other One spouse seeks to adopt his own illegitimate child, provided that the other spouse has signified their consent thereto Spouses are legally separated from each other

Creates a relationship only between the child and the adopting parents [Sayson v. CA, G.R. No. 89224-25 (1992)]

1. RA 8552: 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 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

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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]:

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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 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

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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 childplacing or child-caring agency which has custody of the child to exert all efforts to locate his/her unknown biological parent(s). If such efforts fail, the child shall be registered as a foundling and subsequently be the subject of legal proceedings where he/she shall be declared abandoned. [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. 026-02-SC or the "Rule on Adoption," all expressly refer to "Filipino children" and include foundlings as among Filipino children

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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-961362 (1997)]

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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 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].

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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 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].

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f. Who may not adopt

3. Succession [Sec. 18, RA 8552]

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

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.

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.

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 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]

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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. [AguilingPangalangan] 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 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

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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

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7. Living a dishonorable/disgraceful life 8. Conviction of a crime which carries with it the penalty of civil 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 Declaration of abandonment • Adoption decree

or

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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.

2. RA 8043: Law on Country Adoption

Inter-

Inter-Country Adoption refers to the sociolegal 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

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(d) (e) (f)

(g)

(h)

(i)

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parental authority under his national laws, and has undergone the appropriate counseling from an accredited counselor in his/her country; Has not been convicted of a crime involving moral turpitude; Is eligible to adopt under his/her national law; 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; 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; 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 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 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

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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

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proposal, no matching arrangement shall be made between the applicant and the child’s parents/guardians or 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.

shall exercise substitute parental authority over the child. [Sec. 44, RA 8043 Amended IRR]

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.

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 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]

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,

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]

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

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liability for a tortious act that have foreseen and which they prevented would be unconscionable. [Tamargo v. 85044 (1992)]

they could not could not have unfair and CA, G.R. No.

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 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. 8922425 (1992)]

J. SUPPORT 1. What it comprises Support consists of everything indispensable for sustenance, dwelling, clothing, medical attendance, education and transportation, in

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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 unless the parent has no adequate separate property, in which case, support will

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be taken from the CPG or ACP subject to reimbursement [Arts. 122, 197, FC].

due to the physician [Pelayo v. Lauron, G.R. No. L-4089 (1909)].

3. Source of support

In Case of Multiple Obligors 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].

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 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

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.

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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 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].

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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 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].

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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 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]

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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)]

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o

K. PARENTAL AUTHORITY o

1. General Provisions o 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.

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]. Exception: When several survive, the one designated by the court, taking into account all relevant considerations [Art. 214, FC].

General Rule: Joint exercise by the father and the mother of a child [par. 1, Art. 211, 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;

Upon judicial declaration of abandonment of the child, in a case filed for the purpose; Upon the final judgment of a competent court divesting the party concerned of parental authority, or; Upon judicial declaration of absence or incapacity of the person exercising parental authority

2. Substitute parental authority

Who Exercises Parental Authority [Arts. 211-213, 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].

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• •

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

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Substitute parental authority and special parental authority, distinguished 4. DIFFERENCE

SUBSTITUTE

Who Grandparents Exercises , oldest sibling, or courtappointed guardian

When Exercise d

How Liable

Only in case of death, absence, or unsuitability of parents Subsidiarily liable for damages caused by the minor

SPECIAL

Schools (administrator s and teachers) or individuals, entities engaged in child care

5.

Concurrent with parental authority or substitute parental authority

7.

Principally and solidarily liable for damages caused 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, selfreliance, industry and thrift, stimulate their

6.

8. 9.

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interest in civic affairs, and inspire in them compliance with the duties of citizenship; To enhance, protect, preserve, and maintain the children’s physical and mental health at all times; 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; To represent the children in all matter affecting their interests; To demand from the children respect and obedience; To impose discipline on the children as may be required under the circumstances, and; 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

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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. 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].

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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. 228229, 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]: 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].

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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].

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7. Solo parents (R.A. No. 8972) RA 8972 Solo Parents' Welfare Act

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 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;

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.

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(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 solo parent. A change in the status or circumstance of 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

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2.

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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. Nonformal 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] Any solo parent whose income is above the poverty threshold shall enjoy only the 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]

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1. Separation in Fact Between Husband and Wife

L. EMANCIPATION

Petition [Art. 239, FC]

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.

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]] 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

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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]. 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].

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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 unemancipated 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].

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. RA 8369 Family Courts Act The State recognizes the sanctity of family life and shall protect and strengthen the family Principle as a basic autonomous social institution. The courts shall preserve the solidarity of the family, provide procedures for

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the reconciliation of spouses and the amicable settlement of family controversy.

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 divulged unless necessary and with authority of the judge. [Sec. 12, RA 8369]

The State shall likewise provide a system of adjudication for youthful offenders which takes into account their peculiar circumstances. [Sec. 2, RA 8369]

Concept

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 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]

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Scope

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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 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

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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;

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h) Petitions for the constitution of the family home; i)

Cases against minors cognizable under the Dangerous Drugs Act, as amended;

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

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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]

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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.

N. USE OF SURNAMES 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].

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.

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3. Confusion of Names

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O. ABSENCE

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.

1. Provisional measures in case of absence

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.

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.

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.

Note: The same shall be observed when under similar circumstances the power conferred by the absentee has expired.

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]

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.

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

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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.

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4. Presumption of death 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.

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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

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 wellfounded belief that the absent spouse was already dead.

Presumed Survivor

Both under 15

Older

Both above 60

Younger

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P. CIVIL REGISTRAR

One under 15, the The one under 15 other above 60 Both over 15 and Male under 60; different sexes

RA 9048 Correction of Error in Name

Both over 15 and Older under 60; same sex

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 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

One under 15 or One between 15 and over 60, the other 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 wellfounded belief that the absent spouse was already dead. When there is a subsequent marriage due to extraordinary absence, where: Page 124 of 532

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1.

2.

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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)] 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

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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 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

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6.

7.

Prohibited Acts

Penalties

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. If there were no objection, the decision shall become final and executory. If there were objection, the petitioner may seek reconsideration or file the appropriate petition with the proper court.

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

Violation of any provision of the act [Sec. 9]. Sec. 9, RA 9048. Generally ! Imprisonment of not less than six years but not 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

Scope

Principle

The State expanded the exception by including typographical or clerical error in

New Exceptions Created 1. Correction of the day and month in the date of birth 2. Correction of the sex of a person 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.

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

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Prohibited Similar to RA 9048. Acts Penalties

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Similar to RA 9048.

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crops are to be attached in the same manner as realty. [Sec. 7, Rule 59]

A. CLASSIFICATION OF PROPERTY

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.

1. Immovables [Art. 415, CC] a. IMMOVABLES BY NATURE: cannot be moved from place to place; their intrinsic qualities have no utility except in a fixed place. [pars. 1 & 8]

Note: Whether attached by the owner himself or some other person. (e.g. Canals, walls, aqueducts) 3.

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)].

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]

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 Page 128 of 532

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 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

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machines owned by the owner of a garment factory)

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)].)

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. L17870 (1962)]

CIVIL LAW

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 [Art. 416, 417, CC]

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)] Page 129 of 532

a. Everything not included in Art. 415 (by exclusion); b. All things that can be transported from one place to another without 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.

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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 3. Imposed by the state – Eminent domain, taxation, and police power 4. Imposed by the owner himself 5. Other limitations like nuisance, easements, state of necessity, mortgages, and other security arrangements 6. Cannot make use of the thing in such manner as to injure the rights of a third person [Art. 431, CC] 7. Doctrine of state of necessity [Art. 432, CC]

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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.

Lawful deprived FISTS:

a. b. c. d. e.

1. Bundle of rights a. Actions to recover ownership and possession of real property and its distinctions 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.).

Unlawful Detainer Possessor refused possessor to vacate upon through demand by owner

Forcible Entry

Force Intimidation Strategy Threats, and Stealth

Period to Bring Action: 1 year from dispossession (force, intimidation, threats) or from knowledge of dispossession (strategy, stealth)

Note: Legal possession (by permission/ tolerance) becomes unlawful upon failure to vacate Period to Bring Action: 1 year from last demand to vacate.

b. Actions for recovery of possession of movable property Replevin For manual delivery of movable property, for either ownership or possession

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2. Distinction between real and personal rights

3. Modes of Ownership

a. Real rights

See Section J. Modes of Acquiring Ownership.

Rights that confer upon its holder an autonomous power to derive directly from a thing certain economic advantages independently of whoever the 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.

Acquiring

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.) 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

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or impairs the use of property. [Art. 694, CC]

2. Rules of accession a. FOR IMMOVABLES

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 rule stated

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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] 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]

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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 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.

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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 acquisition [Art. 526, CC]

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]

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]

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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 Rights: Shall own what is built, planted, sown (materials/improvements). [Accessio cedit principali] LO in GF Liabilities: shall pay for the value of the materials (no one shall be unjustly enriched at the expense of another) Rights: a. Limited right of removal (can only be resorted to if no injury can be inflicted OM in GF on the work constructed); or b. Right to reimbursement for the value of materials. Situation #2: Both the LO and OM are in BF Parties will be treated as Both LO and though both acted in GF. OM in BF [Art. 453, CC] Situation #3: LO in BF, while OM in GF Rights: To own what is built, planted, sown (materials/improvements).

LO in BF

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.

CIVIL LAW

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.

Situation #4: LO in GF, while OM in BF Rights: a. Right to acquire the improvements without paying indemnity. LO in GF b. Right to acquire indemnity for damages if there are hidden defects known to OM. Lose materials without right to OM in BF 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] Options: a. Acquire improvements after paying BPS for their value; or b. Oblige the one who built Landowner or planted to pay the price [Art. 446, of the land unless its CC] value is considerably more than that of the Note: building or trees, and the Option is one who sowed, the given proper rent. solely to c. If the value is LO, GF of considerably more, then BPS is the court can force the immaterial parties to enter into a forced lease. [Art. 448, CC] Note: The difference between a BUILDER and a SOWER.

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● ●

● 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]

CIVIL LAW

BPS in GF

Situation #4: LO in GF, while BPS in BF [Arts. 449-451, CC] 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 LO in GF 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.

Situation #2: Both the LO and BPS are in BF Parties will be treated as Both LO though both acted in GF, so and BPS in apply Art. 446. [Art. 453, CC] BF Situation #3: LO in BF, while BPS in GF a. Must indemnify BPS for the improvements AND pay damages as if he himself did the BPS. LO in BF b. Has no option to sell the land and cannot compel BPS to buy the land without the latter’s consent.

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.

BPS in BF

Landowner must STILL pay for necessary expenses for preservation. 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

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if the owner makes use of the right granted by Art. 450.

NATURALLY INCORPORATED [Arts. 457465, CC]

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).

a. Alluvium [Art. 457, CC]

PRIMARILY, from the BPS. If the BPS be insolvent, then the LO shall be subsidiarily liable to the OM. [Art. 455(1), CC] 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]

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)] 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.

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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. 461462, 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.

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.

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] 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

CIVIL LAW

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;

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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. 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.

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 Formed by Adjunction

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. L28379 (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)

CIVIL LAW

Object

Owner of Principal Object Good Faith: Acquires the thing but with the duty to indemnify the owner of the accessory [Article 466]. 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].

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Rules in Determination of the Principal Thing [Art. 467-468, CC] 
In the order of application, the principal thing is: ● That to which the other has been united as an ornament or for its use or perfection (“Rule of importance and purpose”) ● The thing of greater value. ● The thing of greater volume. ● 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.

CIVIL LAW

1. Definition • • •

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

Commixtion/Confusion [Arts. 427-423. 475, CC]

a. Worker/Maker in Good Faith [Art. 474, CC] General Rule: Worker becomes the owner but must indemnify the owner (who was also in Page 139 of 532

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good faith) for the value of the material. [Art. 474 (1), CC]

General Rule: Owner has two options • Owner may appropriate the new thing to himself without paying the maker

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]

CIVIL LAW

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 a. Right to acquire improvements and pay indemnity to BPS; subsidiary liability to OM b. Sell the land to BP except if the value of the land is considerably more; or c. Rent to S LO in GF a. Right to acquire improvements and pay indemnity to BPS; b. Sell land to BP except if the value of the land is considerably more; or c. Rent to S LO in GF

Builder/Planter/Sower ALL Acted in Good Faith a. Right of retention until necessary and useful expenses are paid b. To pay value of materials to OM

BPS in GF a. Right of retention until necessary and useful expenses are paid b. Keep improvements without indemnity to OM and collect damages from him BPS in BF

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Owner of Materials a. Collect value of material primarily from BPS and subsidiarily to landowner if BPS is insolvent; and b. Limited right of removal (if the removal will not cause any injury) OM in BF a. Lose the material without right to indemnity b. Must pay for damages to BPS

OM in BF

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a. Right to collect damages from BPS in any case and the option to either 1. Acquire improvements w/o paying for indemnity; 2. Demolition or restoration; or 3. Sell to BP, or to rent to sower b. Pay necessary expenses to BPS

Recover necessary expenses for preservation of land from LO unless LO sells land

CIVIL LAW

a. Recover from BPS (as if both are in GF) b. If BPS acquires improvements, remove materials if feasible w/o injury c. No action against LO but may be liable to LO for consequential damages

ALL Acted in Bad Faith Same as when all acted in GF under Art. 453

a.

b.

a.

b.

LO in BF Acquire improvement after paying indemnity and damages to BPS unless the latter decides to remove Subsidiarily liable to OM for value of materials if he acquires improvements and pays damages to BPS; no subsidiary liability if BPS chooses removal in any event. LO in BF Right to acquire improvements and pay indemnity to BPS; subsidiarily liable to OM Has option to: 1. Sell the land to BP except if the value of the land is considerably more; or 2. Rent to S

LO in GF LO has right to collect damages from BPS in any case and the option to either: a. Acquire improvements w/o paying for indemnity; b. Demolition or restoration; or c. Sell to BP or rent to S Pay necessary expenses to BPS

BPS in GF a. May remove improvements b. Be indemnified for damages in any event c. Pay OM the value of the materials

OM in GF a. Remove materials at any event b. Collect value of materials from BPS; subsidiarily from LO, if LO is made to pay for improvements and damages

BPS in BF a. No right of retention b. Pay value of materials to OM and pay him damages

OM in GF a. Collect value of materials primarily from BPS and subsidiarily from LO if LO acquires the improvements b. Collect damages from BPS c. Absolute right to remove materials in any event (if BPS acquires improvements)

BPS in BF a. Right to necessary expenses b. Pay value of materials to OM c. Pay damages to OM/LO

OM in GF a. Collect value of materials primarily from BPS and subsidiarily from LO b. Collect damages from BPS c. If BPS acquires improvements, absolute right of removal in any event

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LO in BF Acquire improvements and pay indemnity and damages to BPS unless the latter decides to remove materials

PROPERTY

BPS in GF b. Receive indemnity for damages c. Absolute right of removal of 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

CIVIL LAW

OM in BF a. Right to indemnity b. Loses right to the materials

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]

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.

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ACTION TO QUIET TITLE In General

Applicable to real property, subject to certain exceptions 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

Purpose

Requisites

When Not Applicable:

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)] 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, c. upon the owner's title to or interest in real property [Art. 476, CC] a. To questions involving interpretation of documents; 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 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: the party is the registered owner of the property. Legal Title v. Equitable Title Equitable title: the person has the beneficial ownership of the property. Page 143 of 532

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a. There is a claim emerging by reason of: 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.

A Cloud Exists If [Art. 476]:

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 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.

a. To questions involving interpretation of documents; 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; Does Not Cover and Is Not c. To boundary disputes; Applicable To: 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

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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 1. Characteristics ownership

of

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-

Definition There is co-ownership whenever the ownership of an undivided thing or right belongs to different persons [Art. 484 (1), CC]

CIVIL LAW

Co-ownership Distinguished from Partnership Co-Ownership Partnership As to creation Can be created Can be created only without formalities of by contract, express a contract or implied As to Juridical Personality Has juridical Has no juridical or personality distinct legal personality from partners As to Purpose Purpose is collective Purpose is to obtain enjoyment of the profits thing As to Disposition of Shares Consent of other co- Partner needs to be owners not needed; authorized; he transferee cannot substitute automatically another as a partner becomes co-owner in his place As to Existence of Mutual Agency A partner can There is no mutual generally bind the representation partnership As to Effect of Death or Incapacity Does not result in Results in dissolution dissolution As to Formal Requisites

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No public instrument May be made in any is needed even if the form except when object of the coreal property is ownership is a real contributed property As to Agreement on the Period An agreement to There may be keep the thing agreement as to a undivided for a definite term without period of more than limit set by law 10 years is void

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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]

2. Sources of Co-ownership

d. Succession

a. Marriage

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]

i. •

•

ii. •

•

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] 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 owned by them in equal shares and the property acquired by both of them through

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

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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 • 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]

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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

j. Occupation

3. Rights of Co-owners

Harvesting and fishing: co-ownership by two or more persons who have seized a res nullius thing [Art. 713, CC]

a. Right to Share in the Benefits as Well As the Charges [Art. 485, CC] i.

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 Page 147 of 532

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]

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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 Ejectment [Art. 487, CC]

in

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

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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 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].

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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.

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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]

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 • 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.

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, 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]

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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]

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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 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

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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.

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Consensus of all coLease for more owners (considered an act than 1 year of alteration, see Tolentino) Acts of administration (ex. Payment of Majority of co-owners [Art. taxes/association dues, hiring 492, CC] contractors to do minor repairs)

Improvement/ Embellishing the Thing/ Useful Majority of co-owners expenses (ex. [Arts. 489 and 492, CC] Swimming pool, CCTV, landscaped gardens, etc.)

Waiver of renunciation is not allowed if it is prejudicial to the co-ownership. [Art. 488, CC] 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 CoOwner Preservation (ex. Critical maintenance work – roof leaks, cracks in the walls, electrical wiring system which renders property unsafe/unhealthy to live in) Alterations (ex. Sale, mortgage, assignment)

Consent Needed

May be made at will by any co-owner, but preferably notice is given to others. [Arts. 488 and 489, CC]

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 House

the

Main and party walls, the roof, and the other things used in common Floor of the entrance, front door, common yard, and sanitary works common to all The floor of each coowner’s story

Consensus of all coowners [Art. 491, CC]

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Manner of Contribution All owners contribute in proportion to the value of the story belonging to each

All owners contribute pro rata or equally Each owner bears the cost of maintaining the floor of his story

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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

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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: 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)]

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(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.

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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.

2. As to the Necessary Expenses [Art. 546, (1), CC]

Exception: The one who recovers possession decides to refund the ornamental expenses/ expenses for pure luxury.

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.

POSSESSOR IN BAD FAITH 3. As to the Useful Expenses [Arts. 546 (2) and 547, CC] •

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.

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 of Movable 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] 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

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b. In the concept of holder c. In the concept of owner d. In good faith or in bad faith

Possession for Oneself, or Possession Exercised in One’s Own Name and Possession in the Name of Another [Art. 524, CC]

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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

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.

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, whether his belief is right or wrong, e.g. tenant, usufructuary, borrower in commodatum. Examples of Possession in Concept of Holder a. Lessees

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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 ○ 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.

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•

•

• •

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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 Voluntary: created by the will of private persons • By act inter vivos – such as contracts and donations: • By donation of the usufruct; As to Manner • By retention of the of Creation 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

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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 Simple: only one usufructuary enjoys the property. Multiple: several usufructuaries enjoy the property as cousufructuaries. Simultaneous: at the same time. Successive: one after the other. As to Limitations Number of • If by donation, ALL Beneficiaries 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 of Usufruct personal or intransmissible.

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Normal: involves nonconsumable things which the usufructuary can enjoy without altering their form or substance (e.g. form and substance are preserved).

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i.e. over an entire patrimony, a while inheritance of a compulsory heir, a dowry; SPECIAL CASES OF USUFRUCT

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. Pure – without term or condition With a term – with a period, which may either be As to suspensive (from a certain Effectivity 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) Total: all consumed by the usufruct. As to Partial: Fruits constituted only on a part or certain aspects of the As to Extent usufruct’s fruits. of the Usufruct Singular: only on particular property As to of the owner. the Universal: object pertains to the usufruct over universal property,

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 coowner 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.

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2. After partition, the usufruct is transferred to the part allotted to the 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.

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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.

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

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

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 make necessary thinnings to

h. Usufruct over Property that Deteriorates [Art. 573, CC] • Definition of Deteriorates: Without being consumed, gradually deteriorate

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6. Rights of the Possessor 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: 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]

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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] ● The following cannot acquire title by prescription: ○ Lessees, trustees, pledges, tenants on shares or planters, and all those who hold in the name or in representation of another. ○ Mere holders placed in possession of the property by the owner such as agents and employees. ○ Those holding the title in a fiduciary character such as receivers, attorneys,

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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] b. Right to natural and industrial fruits pending at the beginning of usufruct Fruits pending at the beginning of the usufruct Belong to the usufructuary Without need to reimburse the expenses to the owners

Fruits pending at the termination of the usufruct Belong to the naked owner The owner shall reimburse to the usufructuary ordinary cultivation expenses from the proceeds of the fruits (not to exceed the value of the fruits)

Fruits pending at the termination of the usufruct Without prejudice to the Rights of innocent right of 3rd persons e.g. 3rd parties should if the fruits arose by not be building, planting, prejudiced. 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] Fruits pending at the beginning of the usufruct

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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 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.

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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.

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depositaries, and antichretic creditors. 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.

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.

Possessor in Bad Faith

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.

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i.

Definition

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:

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.

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.

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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

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].

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]

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.

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]

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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; 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

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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 Possession

of

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 [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 • Includes jus abutendi, jus utendi, jus fruendi and jus possidendi and jus vindicandi. The only thing left with the

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•

• •

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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 Voluntary: created by the will of private persons • By act inter vivos – such as contracts and donations: • By donation of the usufruct; As to Manner • By retention of the of Creation 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

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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 Simple: only one usufructuary enjoys the property. Multiple: several usufructuaries enjoy the property as cousufructuaries. Simultaneous: at the same time. Successive: one after the other. As to Limitations Number of • If by donation, ALL Beneficiaries 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 of Usufruct personal or intransmissible.

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Normal: involves nonconsumable things which the usufructuary can enjoy without altering their form or substance (e.g. form and substance are preserved).

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i.e. over an entire patrimony, a while inheritance of a compulsory heir, a dowry; SPECIAL CASES OF USUFRUCT

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. Pure – without term or condition With a term – with a period, which may either be As to suspensive (from a certain Effectivity 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) Total: all consumed by the usufruct. As to Partial: Fruits constituted only on a part or certain aspects of the As to Extent usufruct’s fruits. of the Usufruct Singular: only on particular property As to of the owner. the Universal: object pertains to the usufruct over universal property,

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 coowner 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.

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2. After partition, the usufruct is transferred to the part allotted to the 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.

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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.

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

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

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 make necessary thinnings to

h. Usufruct over Property that Deteriorates [Art. 573, CC] • Definition of Deteriorates: Without being consumed, gradually deteriorate

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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] ! Rights of the Usufructuary as to the usufruct itself:

CIVIL LAW

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. 575576, 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

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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] b. Right to natural and industrial fruits pending at the beginning of usufruct Fruits pending at the beginning of the usufruct Belong to the usufructuary Without need to reimburse the expenses to the owners

Fruits pending at the termination of the usufruct Belong to the naked owner The owner shall reimburse to the usufructuary ordinary cultivation expenses from the proceeds of the fruits (not to exceed the value of the fruits)

Fruits pending at the termination of the usufruct Without prejudice to the Rights of innocent right of 3rd persons e.g. 3rd parties should if the fruits arose by not be building, planting, prejudiced. 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] Fruits pending at the beginning of the usufruct

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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 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.

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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.

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•

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e. Right to make improvements on the property as he may deem proper [Art. 579, CC]

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.

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.

ii. The period of the lease is coextensive with the period of usufruct.

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.

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]

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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]

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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

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].

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]

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.

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]

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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; 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

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upon or judicially allowed him for such administration.

usufruct or the fault or negligence of the usufructuary’s agent. [Art. 590, CC]

ii. Obligations during the usufruct

iii. Obligations at the Time of the Termination of 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]

j.

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Consequence: He is liable for damages if he fails to give notice. 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 he alienated, leased to the object of the

[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]

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●

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 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]: ○ By virtue of a donation: ALL DONEES - USUFRUCTUARIES must be alive at the time of donation [Art. 756, CC] ○ 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) ○ 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 usufructuary

of

the

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).

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the usufructuary refuses to contribute to the premium (Par. 2)

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]

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.

Situation

Effect Art. 607, CC If destroyed property is not insured If usufruct is If the owner does not on the rebuild: Usufruct continues building and over the land and materials the land (Par. (plus interests). 1) If the owner does not rebuild: Usufruct continues over the land and materials (plus interests). If the owner rebuilds: If usufruct is Owner can occupy the land on the and use the materials. building only (Par. 2) 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 If the owner rebuilds: When Usufructuary can continue insurance enjoying the new building. premium paid by owner and If the owner does not usufructuary rebuild: Usufructuary shall (Par. 1) receive interest on the insurance indemnity. When the Owner shall receive the full insurance is amount of the insurance taken by the indemnity in case of loss, naked owner and either of the following, only because

depending on the case (apply Art. 607, CC):

When insurance taken by usufructuary only depends on value of usufructuary’s insurable interest [Labitag Diagrams]

Insurance proceeds go to the usufructuary. No obligation to rebuild. Usufruct continues on the 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 • • •

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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]

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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 ○ For taxes on the capital which had been advanced by him [Art. 597(2), CC]; and ○ 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] • •

•

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] ●

Must cancel the security or mortgage after delivery is made [Art. 612, 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 ○ To replace it with an equivalent thing; or ○ 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

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●

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: ○ 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.]

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incorporation, by destination or by analogy. Also, it cannot be established on things beyond the commerce of man, (i.e. property of public dominion).

H. EASEMENTS 1. Characteristics 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]

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.

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 Page 174 of 532

It creates a relation between tenements. • 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.

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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.

j.

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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. 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 Real right, whether Real right only when registered or not. it is registered, or when its subject matter is real

May be constituted only on an immovable by nature. Limited to use of real property of another but without the right to possess.

property and the duration exceeds one year. May be constituted on real or personal property unless a contrary intention appears. Limited right to both the use and possession of the property of another.

Easement Distinguished from Usufruct Easement Usufruct May be constituted May be constituted on only on an either movable or immovable by immovable property. nature. Not extinguished by Extinguished by the the death of death of usufructuary. dominant owner. Non-possessory Involves a right of right over an possession over an immovable. immovable. Limited to particular Includes all the uses or specific use of and the fruits of the the servient estate. 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.

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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 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.

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[Art. 616, Negative: Prohibits the owner CC] of the servient estate from doing something that he could lawfully do if the easement did not exist Legal [Art. 619 and 634, CC]: created by law, whether 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 As to its Registry of Property to cause or prejudice third persons. origin Mixed: created partly by will or agreement and partly by law. 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)]

2. Classification Real or Praedial: exists for the benefit of a particular tenement. [Art. 613, CC] Personal: exists for the benefit of persons without a dominant tenement [Art. 614, CC] Continuous: Use is or may be without the As to its incessant, intervention of any act of man exercise [Art. 615, Discontinuous: Used at CC] intervals, and dependent upon the acts of man. Apparent: Made known and As indication continually kept in view by of its external signs that reveal the existence use and enjoyment of the same [Art. 615, Non-apparent: No external CC] indication of their existence. Positive: Imposes upon the As to the owner of the servient estate the object or obligation of allowing obligation something to be done, or of imposed doing it himself. As to recipient of benefits

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.

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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 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

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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. 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;

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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 orchards or gardens already existing. [Art. 644, CC]

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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. 2. RIGHT OF WAY [Arts. 649-657, 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

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

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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 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

CIVIL LAW

dominant estate, and may accordingly be changed from 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 Temporary right of way way Indemnity Consists of the Consists of the damages and the damages only. value of the land. Necessary repairs Dominant owner to Servient owner to spend. spend. Share in taxes The dominant owner shall reimburse a proportionate share Servient owner to of taxes to the spend on such. proprietor of the servient estate. Rules on Indemnity for Estates Enclosed Through a Sale, Exchange, Partition or Donation. Sale, exchange or Donation partition Buyer, grantee or done as dominant owners The buyer or grantee shall grant the right The donee shall pay of way without the donor indemnity. indemnity. Seller, grantor or donor as dominant owners The donee shall The seller or grantor grant the right of way shall pay indemnity. without indemnity. Notes on extinguishment • Extinguishment is not automatic. The owner of the servient estate must ask for such extinguishment.

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•

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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.

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.

CIVIL LAW

Party Wall Shares of the coowners cannot be physically segregated but they can be physically identified.

Co-Ownership Before division of shares, a co-owner cannot point to any definite portion of the property as belonging to him. None of the coowners may use the community property There is no such for his exclusive limitation. benefit because he would be invading the rights of the others. Any owner may free himself from contributing to the In a co-ownership, cost of repairs and partial renunciation construction of a is allowed. 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.

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When Existence of An Exterior Sign Is Presumed [Art. 660, CC] 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.

3. To acquire a half-interest in any increase in height or thickness of the 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.

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]

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]

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.

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 partownership, 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.

4. EASEMENT OF LIGHT AND VIEW [ARTS. 667-673, CC] Easement of light (jus luminum) 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

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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)] 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.

CIVIL LAW

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] 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

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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. 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

CIVIL LAW

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, 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.

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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 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.

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•

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. 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 Easements

Acquiring

An easement is either acquired through a title/juridical act or by prescription. [Art. 620 and 622, CC] Kind of Easement Continuous and apparent (CA) Continuous Nonapparent (CNA) Discontinuous and non-apparent (DA) Discontinuous Non-apparent (DNA)

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How acquired Title Prescription YES

YES

YES

NO

YES

NO

YES

NO

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When an easement is established, all rights necessary for its use are considered granted. [Art. 625, CC]

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)].

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] 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]

CIVIL LAW

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] 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]

Illustration: The presence of 4 windows was considered an apparent sign that created a Page 185 of 532

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d. By Prescription Example: Easement of drawing water carries with it the easement of right of way to the place where water is drawn.

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.

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] 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 Owner

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.

Dominant

Estate

1. To use the easement for the benefit of immovable and in the manner originally established [Art. 626, CC]

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 Dominant and Servient Estates

of

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]

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In an easement of a right of way, widening the road means making the easement more burdensome. [Valderrama v. North

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Negros Sugar Co., G.R. No. L-23810 (1925)]

Exception: Unless there is an agreement to the contrary.

4. To contribute to expenses of works necessary for use and preservation of servitude, if there are several dominant estates. [Art. 628, CC]

3. To pay for the expenses incurred for the change of location or form of the easement

The contribution is in proportion to the benefits which each may derive from the work.

Ways by which an easement may be extinguished: [Art. 631, CC] [MINERRO – Merger, Impossibility, Non-use, Expiration, Renunciation, Redemption, Other causes]

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] 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 Owner

of

Servient

Estate

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]

5. Modes of Extinguishment

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]

CIVIL LAW

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 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]

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Nuisance Definition

Abatement

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Nuisance per se Those which are unquestionably and under all circumstances nuisances, such as gambling houses, houses of ill fame, etc. [Iloilo Cold Storage v. Municipal Council, 24 Phil 471] ● Generally defined as an act, occupation, or structure, which is a nuisance at all times and under any circumstances, regardless of location or surrounding. [Aquino v. Municipality of Malay, GR 211356, 29 September 2014] 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] ●

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

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Nuisance per accidens Those that are nuisances because of particular facts and circumstances surrounding the otherwise harmless cause of the nuisance [Iloilo Cold Storage v. Municipal Council, 24 Phil 471] ● Generally a question of fact, to be determined in the first instance before the term nuisance can be applied to it. [Ibid.] ● That which depends upon certain conditions and circumstances, and its existence being a question of fact, it cannot be abated without due hearing thereon in 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] 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] ●

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)]

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3. Liabilities a. Who are Liable 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]

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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 as a remedy 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]

6. Judgment with abatement as a remedy 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]

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7. Extrajudicial abatement as a remedy 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

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act does in law constitute a nuisance. [Iloilo Cold Storage v. Municipal Council, 24 Phil 471] b. Need for Abatement 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]

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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]

9. Right of Individual to Abate 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

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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 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.

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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

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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]

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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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,

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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 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

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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]

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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. The patrimony or asset of the donor is decreased, while that of the donee is Effect increased. [CADAF – Capacity, Animus donandi, Delivery, Acceptance, Form]

Requisites

a. b. c. d. e.

Capacity of donor to make donation Donative intent (animus donandi) Delivery (actual or constructive) Acceptance by donee 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 account of the latter's instances merits or of the services rendered by him to the donor, provided they do not considered constitute a demandable debt. (Remuneratory donation) [Art. 726, CC] as a b. When the gift imposes upon the donee a burden that is less than the value of donation the thing given. (Onerous donation) [Art. 726, CC] Donation Inter Vivos [Art. 729-731, CC] 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. Kinds of As to its Donations taking effect

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 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; Page 195 of 532

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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.

As to cause or consideration

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. a. Simple - made out of pure liberality or because of the merits of the donee. 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 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 May include future property (same rule as wills) Cannot include future property [Art. 751, CC] [Art. 84, FC] As to limit on donation of present property No limit to donation of present property If present property is donated and property regime provided legitimes are not impaired. [Art. 750 is other than ACP, limited to 1/5. [Art. 84, FC] and 752, CC] As to grounds for revocation Enumerated in Arts. 760, 764, and 765, CC Enumerated in Art. 86, FC Inter vivos

Mortis causa As to formalities Executed and accepted with formalities Must be in the form of a will, with all the formalities prescribed by CC. [Art. 748 and 749] for the validity of wills. [Art. 728, CC] Page 196 of 532

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As to effectivity Effective during the lifetime of the donor. It takes effect independently of the donor’s Effective after the death of the donor. [Art. 728, CC] death. [Art. 729, CC] As to acceptance Acceptance must be made after the death of the donor, the donation being effective only after the Acceptance must be made during the lifetime death of donor. Acceptance during the donor’s of the donor. [Art. 746, CC] 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 transferred. Upon acceptance by the donee, but the effect of Delivery of possession is allowed after death. such retroacts to the time of death of the donor. As to revocation Irrevocable – may be revoked for the reasons Revocable upon the exclusive will of the donor. provided in Arts. 760, 764, 765, CC. [Ganuelas v. Cawed, G.R. No. 123968 (2003] As to reduction or suppression When it is excessive or inofficious [Art. 750, CC] or for any of the reasons provided for in When it is excessive or inofficious, it is reduced Art. 760, CC. Being preferred, it is reduced first, or even suppressed. only after the donations mortis causa had been reduced or exhausted. As to effect if donor survives donee Donation is void. [Maglasang v. Heirs of Not affected. Cabatingan, G.R. 131953 (2002)] FORMALITIES REQUIRED FOR MOVABLES [Art. 748, CC] FOR IMMOVABLES [Art. 749, CC] The donation of a movable may be made orally or in writing. Oral General Rule: Must be in a public document for it to be donation requires simultaneous valid. delivery. If value of property exceeds P5,000: If donation and acceptance are in the same instrument: a. Donation and acceptance a. It must be in a public instrument. must be in writing; otherwise, b. Instrument must specify the property donated and it is void. the value of the charges. b. It need not be in public instrument; neither is it If donation and acceptance are in separate instruments: a. It must be in a public instrument. necessary that the b. Instrument must specify the property and the value acceptance be in the same of the charges. instrument as the deed of c. Acceptance must also be in a public instrument. donation. [Tolentino] d. It must be made during the lifetime of the donor. [Art. 746, CC] If value is P5,000 or less: e. Donor must be notified in authentic form of such a. If orally: there must be acceptance made in a separate instrument. simultaneous delivery f. Fact of such notification must be noted in both b. If in writing: donation is valid instruments. even without simultaneous delivery Page 197 of 532

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c. In every case, acceptance Exceptions: must be made known to the a. Donations propter nuptias: need no express donor for perfection of a acceptance. donation to take place. [Art. b. Onerous donations: governed by rules on 746, CC] 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 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. Page 198 of 532

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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. [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.

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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] 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 donee 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] Page 200 of 532

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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, 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]

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Time of Action

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Transmissibility Effect Liability (Fruits) Birth, appearance, adoption [Art. 760, CC] • Property is returned. • If the property has been sold, its value at the time of donation shall be returned. • If the property Within 4 years Transmitted to was from birth, children and mortgaged, the Fruits returned from the filing of legitimation and descendants upon donor may the complaint. [Art, 768, CC] adoption. [Art. 763, the death of donor. redeem the CC] [Art. 763, CC] mortgage, by paying the amount guaranteed, with right to recover the amount from the done. [Art. 762, CC] Non-compliance with condition [Art. 764,CC] May be transmitted to donor’s heirs and may be exercised against donee’s heirs. Property returned Note: Art. 764 does to the donor, not apply to alienations by the Within 4 years Fruits received after having failed onerous donations donee and from nonto fulfill condition are to be in view of Art. 733, mortgages void compliance. returned. [Art. 768, CC] providing that subject to rights of onerous donations third persons in are governed by good faith. 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

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Property returned, but alienations and mortgages effected before the notation Fruits received from the filing of of the complaint for the complaint returned. [Art. 768, revocation in the CC] registry of property subsist. Later ones shall be void. [Art. 776, CC] Failure to reserve sufficient means for support [Art. 750, CC] Reduced to the At any time, by the extent necessary to donor or relatives Not transmissible. Donee entitled. [Art. 771, CC] provide support. entitled to support. [Art. 771, CC] Inofficiousness for being in excess of what the donor can give by will [Art. 752, CC] Donation takes effect on the Within 5 years from lifetime of donor. Transmitted to the death of the Reduction only donor’s heirs. [Art. Donee entitled. [Art. 771, CC] donor. [Art. 1149, upon his death with 772, CC] CC] regard to the excess. [Art. 771, CC] Fraud against creditors [Art. 1381] Rescission within 4 years from the Returned for the Transmitted to perfection of benefit of the Fruits returned, or if impossible, creditor’s heirs or donation creditor who indemnify creditor for damages. successors-in(knowledge of the brought the action. [Art. 1385 and 1388, CC] interest. donation). [Art. [Art. 1388, CC] 1389, CC] Not transmitted to Within 1 year after heirs of donor/ knowledge by donee, but if donor donor of the fact dies during and it was possible pendency of case, for him to bring the heirs may be action. [Art. 769, substituted. [Art. CC] 770, 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. Kinds of prescription a. Acquisitive Prescription • The acquisition of ownership and other real rights through possession in the

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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.

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●

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 Prescription Requires positive action of the possessor (a claimant) who is not the owner. Applicable to ownership and other real rights. Vests the property and raise a new title in the occupant. Results in the acquisition of ownership or other real rights in a person as well as the loss of said ownership or real rights in another. Can be proven under the general issue without its being affirmatively pleaded.

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Extinctive Prescription Requires inaction of the owner out of possession or neglect of one with a right to bring his action. Applicable to all kinds of rights, whether real or personal. Vests the property and raise a new title in the occupant. Merely results in the loss of a real or personal right, or bars the cause of action to enforce said right. Should be affirmatively pleaded and proved to bar the action or claim of the adverse party.

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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; 3. Possession of the thing under certain conditions; and 4. Lapse of time provided by law.

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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 Prescription Requires positive action of the possessor (a claimant) who is not the owner. Applicable to ownership and other real rights. Vests the property and raises a new title in the occupant. Results in the acquisition of ownership or other real rights in a person as well as the loss of said ownership or real rights in another. Can be proven under the general issue without its being affirmatively pleaded.

Extinctive Prescription Requires inaction of the owner out of possession or neglect of one with a right to bring his action. Applicable to all kinds of rights, whether real or personal. Vests the property and raises a new title in the occupant. Merely results in the loss of a real or personal right or bars the cause of action to enforce said right.

Should be affirmatively pleaded and proved to bar the action or claim of the adverse party.

1. Acquisitive Prescription 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

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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] ● 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]

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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 Prescription

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

Basis 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.

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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] Governing Law as to Place of Execution of Will Place of Testator Execution Governing Law of Will Philippine Law [Art. Philippines 16, CC] 1. Philippine Law [Art. 815, CC] Filipino Outside of 2. Law of the the country in Philippines which it is executed [Art. 17, CC] 1. Philippine Law; or 2. Law of the country of Philippines which testator is a citizen or subject [Art. 817, CC] 1. Philippine Law [Art. 816, CC]; or Alien 2. Law of the testator’s country; or Outside of 3. Law of the the place where the Philippines testator resides; or 4. Law of the country where the will is executed [Art. 17, CC]

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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 Subscribed at the end of the will by: a. Testator himself b. Testator’s name Subscription written by a representative in his presence and under his express direction Attested and subscribed by 3 or more credible witnesses in the presence of the testator and of one another [Art. 805, CC]

Attestation Clause

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The attestation clause shall state the following [par. 3, Art. 805, CC]: 1. Number of pages; 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

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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)].

Marginal Signatures

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. General rule: Testator or his representative shall write his name, and the witnesses shall sign each and every page except the last page [Art. 805, CC]. Exceptions:

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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. L13431 (1919)] 3. The use of thumbprint was allowed [Matias v. Salud, G.R. No. L10751 (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 denial of probate. [Icasiano v. Icasiano, G.R. No. L18979 (1964)] All the pages of the will shall be numbered correlatively in letters Page placed on the upper part of Numbers each page (i.e. Page One of Five Pages). [Art. 805, CC] The certification of acknowledgement need Acknowledged not be signed by the notary by a notary in the presence of the public [Art. testator and the witnesses. 806, CC] [Javellana v. Ledesma, G.R. L-7179 (1955)]

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Additional Requirements for handicapped testators

Subscribed by 3 or more witnesses in the presence of the testator and of one another

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1. Deaf Mute [Art. 807, CC] a. Testator must personally read the will; or 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)] Qualifications [Art. 820, CC] 1. Of sound mind 2. Aged 18 years or over 3. Not blind, deaf or dumb 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.

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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 If there are three other legacies in favor competent witnesses, of an interested the devise or legacy witness or his or shall be valid and the her spouse, interested witness shall parent, or child be treated as a mere will be void surplusage 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)]

Creditors may be witnesses [Art. 824, CC].

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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 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 Insertion considered After the not written. Validity execution, without cannot be defeated by consent of testator the malice or caprice of a third person After execution, Will is valid, insertion with consent is void

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Contemporaneous to the execution of the will

Will is void because it is not 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

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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,

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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 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. L28394 (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.

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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 Represents the juridical personal obligations not extinguished by death Succeeds to the remainder of the decedent’s properties after all the debts and all the legacies and devices have been paid Can exist in either testamentary or intestate succession

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Legatee / Devisee Does not represent regardless of the legacy or device’s value Succeeds only to the determinate thing or quantity which is mentioned in the legacy or device Can exist only in testamentary succession

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Note: testator must first specify the class and the amount of property for proper delegation

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 3rd persons a. designation of heirs, devisees 
and legatees b. duration/effi cacy of designation c. determinatio n of portions, when referred to by name [Art. 785, CC] 


What may be entrusted to 3rd persons a. designation of person/instit ution falling under a class specified by testator b. manner of distribution of property specified by testator [Art. 786, CC]

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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 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 capacity

with

testamentary

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

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11. Statutory grant – permitted only by law, not a constitutional right RULES OF CONSTRUCTION INTERPRETATION [Arts. 788-795]

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2. The testator must be at least 18 years old [Art. 797, CC]

AND

3. The testator must be of sound mind at the time of execution [Art. 798, CC]

Main principle: Testacy is preferred to intestacy. The intent of the testator is paramount and must be given effect as far as legally possible.

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]

Governing Laws, In General Aspect of the Will Governing Law Law in force at the time the will was Formal Validity executed [Art. 795, CC] Law of decedent’s nationality at the Intrinsic Validity 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. 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]

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. L25966 (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, Law of the country in which Forms & the will was executed [Art. Solemnities 17, CC] of a Will

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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.

Preterition NOT ALTHOUGH NAMED NAMED He is not He is neither: named in the 1. Instituted as an heir will. 2. Expressly disinherited 3. Assigned any part of the estate Thus: tacitly deprived of his right to legitime.

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].

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.

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].

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. L24365 (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.

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Distinguished from Disinheritance Preterition Disinheritance • Tacit • Express deprivation of a deprivation of a compulsory compulsory heir heir of his of his legitime legitime • Always voluntary • May be • For some legal voluntary but cause
 the • If the presumption of disinheritance is law is that it is valid, the involuntary 
 compulsory heir • Law presumes disinherited is there has been totally excluded merely from the oversight or inheritance. In mistake on the case of invalid part of the disinheritance, testator the compulsory • Since heir is merely preterition restored to his annuls the legitime institution of heirs, the omitted heir gets not only his legitime but also his share in the free portion not disposed of by way of legacies and devises 


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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

Effects of Preterition [Art. 854, CC] 1. The institution of the heir is annulled. 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 to the 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)]. Page 223 of 532

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

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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] 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

CIVIL LAW

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. L27860 and L-27896 (1974)] Effects of predecease of heir/fiduciary or the heir/fideicommissary

the first second

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 dispositions testamentary with a term

testamentary and dispositions

3 Kinds of Testamentary Disposition a. Conditional [Art. 871, CC] b. Dispositions with a term [Art. 885, CC] c. Dispositions with a mode/modal dispositions [Art. 882, CC]

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CONDITIONAL DISPOSITIONS

Casual or mixed Casual

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, CONDITIONS

CASUAL,

AND

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MIXED

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.

Mixed Fulfillment depends Fulfillment depends partly on the will of on chance or the will the heir and partly on of a third person. 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 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 Before the arrival of the term, the property the term, the should be delivered to property should be the legal or intestate delivered to the heirs. instituted heir. A caución muciana has to be posted by No caución muciana the legal or intestate required. 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.

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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 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

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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

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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 will. [Arts. 825-826, CC]

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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: 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.

Note: Even if a holographic will was not intended to be revoked, unless a xerox copy exists, it can no longer be proved.

Incorporation by Reference

Law Governing Revocation [Art. 829, CC]

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

Place of Revocation

Testator’s Domicile

Philippines

Philippines, or some other country

Outside the Philippines

1. Law of Domicile Philippine Philippines law (This 2. Law of lace situation is of not Revocation governed 3. Law of Place by Art. 829) of Execution of Will [Balane] 1. Law of the Place of Execution of Will; or 2. Law of the Foreign place in Country which the testator had his domicile at the time of revocation

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

Governing Law

Philippine Law

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]

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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 will containing it. The revocation of the 2nd will does not revive the 1st will which has already become a nullity.

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REPUBLICATION AND REVIVAL Republication vs.Revival Republication • Takes place by an act of the • testator • Corrects • extrinsic and intrinsic defects

Revival Takes place by operation of law Restores a revoked will

Art. 835

Art. 836 Void as to: 1. Non-formal Void as to form [Art. defect 805, CC] 2. Previously revoked How to Republish: How to Republish: 1. Execute new will 2. Execute new will 2. Copy out the or codicil provisions from 3. Simply make the original void references to old will will Reference to Reference to original original insufficient 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.

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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 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. PortugalBeltran, G.R. No. 155555 (2005)]. Revocation vs. Disallowance Revocation Disallowance Voluntary act of the Given by judicial testator decree Must always be for a With or without cause legal cause Always total, except when the ground is fraud or influence May be partial or total which affects only certain portions of the will

CIVIL LAW

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 6. If the signature of the testator was procured by fraud; 7. If it was procured by undue and improper pressure and influence, on the part of the beneficiary or some other person; 8. 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; 9. If the testator was insane or otherwise mentally incapable of making a will at the time of its execution; 10. If the formalities required by law have not been complied with; or 11. 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]

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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.

Preterition NOT ALTHOUGH NAMED NAMED He is not He is neither: named in the 1. Instituted as an heir will. 2. Expressly disinherited 3. Assigned any part of the estate Thus: tacitly deprived of his right to legitime.

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].

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.

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].

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. L24365 (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.

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Distinguished from Disinheritance Preterition Disinheritance • Tacit • Express deprivation of a deprivation of a compulsory compulsory heir heir of his of his legitime legitime • Always voluntary • May be • For some legal voluntary but cause
 the • If the presumption of disinheritance is law is that it is valid, the involuntary 
 compulsory heir • Law presumes disinherited is there has been totally excluded merely from the oversight or inheritance. In mistake on the case of invalid part of the disinheritance, testator the compulsory • Since heir is merely preterition restored to his annuls the legitime institution of heirs, the omitted heir gets not only his legitime but also his share in the free portion not disposed of by way of legacies and devises 


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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

Effects of Preterition [Art. 854, CC] 1. The institution of the heir is annulled. 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 to the 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)]. Page 223 of 532

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

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Valid – estate must Testator knew try to acquire property did not property or else give belong to him heir monetary value. Legacy of devise of a thing belonging to the legatee or devisee The thing already belongs to the legatee or devisee at the time of the Ineffective execution of the will [Art. 932, CC] The thing is subject to an Valid only as to encumbrance or interest the interest or of another person [Art. encumbrance 932, CC] Legatee or devisee subsequently alienates Ineffective the thing [Art. 933,CC] After alienating the thing, the legatee or devisee subsequently reacquires Ineffective it gratuitously [Art. 933, CC] Legatee or After alienating the thing, devisee can the legatee or devisee demand acquires it by onerous reimbursement title [Art. 933, CC] from the heir or estate

CIVIL LAW

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.

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.

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SUMMARY OF LEGITIMES COMPULSORY HEIRS Legend: LC – legitimate ILC – illegitimate children children Surv iving Rela tives

LC alon e

1 LC, SS

2 or more LC, SS

LC, ILC

1 LC, SS, ILC

LC and Desce ndant s ½ of the estate in equal portion s

½ of the estate

½ of the estate in equal portion s ½ of the estate in equal portion s

½

SS

ILC

¼ of the estat e take n from the free porti on Sam e porti on as 1 LC

½ shar e of 1 LC

¼ (pref erred over ILC)

½ shar e of 1 LC

CIVIL LAW

OF

r redu ction SS – surviving LP – legitimate pro ILP – illegitimate spouses parents rata parents beca use LP shar and I e of Asce L SS is ndant P given s prefe renc e ½ of 2 or the Sam ½ more estate e as shar LC, in shar e of 1 SS, equal e of 1 LC ILC portion LC s LP alon ½ e ¼ in LP, equal ½ ILC porti ons LP, ¼ ½ SS LP, SS, 1/8 ¼ ½ ILC ½ in ILC equal alon porti e ons 1/3 in ILC, equal 1/3 SS porti ons GR: ½ SS alon e

N.B. May suffe Page 233 of 532

Exce ption : marri age in

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artic ulo morti s and testa tor dies withi n 3 mont hs from marri age – 1/3 Exce ption to the exce ption : Have been living toget her as husb and and wife for more than 5 year s–½ ILP alon e ILP, SS

½ ¼

¼

Summary of Causes of Disinheritance Childr Paren Spo Unwort Groun en and ts and use hiness ds for Desce Ascen [Art [Art. disinhe ndants dants . 1032, ritance [Art. [Art. 921 CC]

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919, CC]

920, CC]

, CC]

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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 Never reduced, they are children primary and preferred Surviving Never reduced spouse Subject to reduction, pro rata, without preference (you get Illegitimate the remaining portion, divide children 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

CIVIL LAW

2. Prepositus – the first transferee of the reserved property 3. Reservista – an ascendant of the Prepositus other than the Origin or 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 1st

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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 reserva 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 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

CIVIL LAW

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]. 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].

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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 – Unworthiness – Note: this is Note: this is by expressly made by operation of law testator A subsequent Either: reconciliation is 1. written pardon, enough or

CIVIL LAW

2. subsequent will reconciliation is not enough Overlap of Rules: Remedy 1. If the offended party does not make a will subsequent to the occurrence of the cause • Unworthines s sets in • Written condonation is necessary to restore 2. If the offended party makes a If he did not know the will subsequent cause to the ● Unworthines occurrence of s stays 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 – unworthines s 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

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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 Person disinherited may be any compulsory heir Only annuls the institution in so far as it prejudices the person disinherited

Preterition Person omitted must be a compulsory heir in the direct line

Annuls the entire institution of heirs

CIVIL LAW

LEGACIES AND DEVISES Legacy A gift of personal property given in a will It is bequeathed

Devise A gift of real property given in a will 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 If testator expressly declares Exception that he gives the thing in its entirety. Legacy or Devise of a thing belonging to another [Art. 930, CC] Testator erroneously believed that the Void property belonged to him The thing bequeathed Effective afterwards becomes his by whatever title

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IN

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 halfblood 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 ironcurtain 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,

CIVIL LAW

sisters, 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 renunciation among heirs of the same degree. The relatives must be in the same relationship because of the Rule of Preference of Lines.

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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 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]

CIVIL LAW

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.

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]

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2. Order of Intestate Succession Decedent is a Legitimate Child Legitimate children or descendants (LCD) Legitimate parents or ascendants (LPA) Illegitimate children descendants (ICD)

or

Surviving spouse (SS) Brothers and sisters, nephews, nieces (BS/NN) Legitimate collateral relatives within the 5th degree (C5) State

Decedent is an Illegitimate Child Legitimate children or descendants (LCD) Illegitimate children or descendants (LPA)

Decedent is an Adopted Child

Legitimate children or descendants (LCD) Illegitimate children or descendants (ICD) Legitimate or illegitimate parents, Illegitimate parents (IP) or legitimate ascendants, adoptive parents Surviving spouse (SS) Surviving spouse (SS) Illegitimate brothers and sisters, Brothers and sisters, nephews, nephews, nieces (IBS/NN) nieces (BS/NN) State

State

RULES OF EXCLUSION AND CONCURRENCE IN INTESTATE SHARES Intestate Heirs Excludes Excluded By Concurs With Ascendants, LC + LD No one SS + ILC Collaterals and State ILP, Collaterals and ILC + D No one SS, LC, LP State LP + LA Collaterals and State LC ILC + SS ILP Collaterals and State LC and ILC SS Collaterals other than LC, ILC, LP, ILP, SS siblings, nephews and No one Siblings, Nephews, nieces, State Nieces Siblings, Nephews, All other collaterals LC, ILC, LP, ILP SS Nieces and State Other collaterals within Collateral more remote LC, ILC, LP, ILP and Collaterals in the same 5th degree in degree and State SS degree 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]. Page 241 of 532

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OUTLINE OF INTESTATE SHARES a.

Legitimate children only

b.

Legitimate children Illegitimate children

and

● ● ●

c.

Legitimate children surviving spouse

and

● ●

d.

Legitimate children, Surviving spouse, and Illegitimate children

● ●

Legitimate parents only Legitimate ascendants only (excluding parents) Legitimate parents and illegitimate children Legitimate parents and surviving spouse Legitimate parents, surviving spouse and illegitimate children Illegitimate children only

● ●

Illegitimate children and surviving spouse l. Surviving spouse only m. Surviving spouse and illegitimate parents n. Surviving spouse and legitimate brothers and sisters, nephews and nieces o. Surviving spouse and illegitimate brothers and sisters, nephews and nieces

●

p. q.

Illegitimate parents only Illegitimate parents and children of any kind (whether legitimate or illegitimate child) Legitimate brothers and sisters only

● ●

s.

Legitimate brothers and sisters, nephews and nieces

●

t.

Nephews and nieces only

●

u.

Other collaterals [Arts. 1009 and 1010]

●

v.

State

e. f. g. h. i.

j. k.

r.

● ● ● ●

● ● ● ●

●

● ●

Divide entire estate equally among all legitimate children [Art. 979, CC] Legitimate children include an adopted child. Divide entire estate such that each illegitimate child gets ½ of what a legitimate child gets [Art. 983, CC and Art. 176, FC] Ensure that the legitime of the legitimate children are first satisfied. Divide entire estate equally between the legitimate children and the surviving spouse, the latter deemed as one child. The same rule holds where there is only one child. Divide the entire estate such that the surviving spouse is deemed one legitimate child and each illegitimate child getting ½ of what the legitimate child gets. [Art. 996, CC and Art. 176, FC] Ensure that the legitime of the legitimate children and the spouse are first satisfied. Divide the entire estate equally [Art. 985, CC]. Divide the entire estate equally but with the observance of the rule of division by line [Art. 987, CC]. Legitimate parents get ½ of the estate, illegitimate children get the other ½ [Art. 991, CC]. Legitimate parents get ½ of the estate; The surviving spouse gets the other ½ [Art. 997, CC]. Legitimate parents get ½ of the estate; surviving spouse and the illegitimate child each get ¼ each, the latter to share among themselves if more than one [Art. 1000, CC]. Divide the entire estate equally [Art. 988, CC]. Illegitimate children get ½ of the estate; the surviving spouse gets the other ½ [Art. 998, CC]. Entire estate goes to the surviving spouse [Art. 994/995, CC]. Illegitimate parents get ½ and the spouse gets the other ½ [by analogy with Art. 997, CC]. Surviving spouse gets ½ of the estate, while the rest gets the other ½ with the nephews and nieces inheriting by representation if proper [Art. 1001, CC]. Surviving spouse gets ½ of the estate while the rest gets the other ½ with the nephews and nieces inheriting by representation, if proper; Note that all the other relatives should be “illegitimate” because of the iron-curtain rule [Art. 994, CC]. Entire estate goes to the illegitimate parents [Art. 993, CC]. Illegitimate parents are excluded and do not inherit. For the rule on the respective shares of the children, see numbers 1, 2 or 10, whichever is applicable. Divide the entire estate such that full-blood brothers/sisters gets a share double the amount of a half-blood brother or sister [Art. 1004 and 1006, CC]. Divide the entire estate observing the 2 is to 1 ratio for full and half-blood relationships with respect to the brothers and sisters, with the nephews and nieces inheriting by representation, if proper [Art. 1005 & 1008, CC]. Divide the entire estate per capita, observing the 2 is to 1 ratio [Arts. 975 and 1008, CC]. Divide entire estate per capita. Collateral relatives must be with the 5th degree of consanguinity. Note: the nearer relative excludes the more remote relatives. If there are no other intestate heirs, the State inherits the entire estate through escheat proceedings [Art. 1011, CC].

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Guilty or Convict ed of Attempt Against the Life of the ✓ Testato r, Spouse , Ascend ant or Descen dant Accuse d Testato r or Decede nt of Crime Punish able by Impriso ✓ nment of 6 years or more, and Found Groundl ess or False Causes testator or decede nt to Make a Will or Change ✓ one by Fraud, Violenc e, Intimida tion, or Undue

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Influenc e

✓

✓

✓

✓

✓

✓

✓

✓

✓

Unjustifi ed Refusal to Support Testato r Convict ed of Adulter y or Concub inage with Spouse of Testato r or Decede nt Maltrea tment of testator by Word and Deed Leading a Dishon orable or Disgrac eful Life Convicti on of Crime which carries the penalty of Civil Interdict ion Abando nment of Page 235 of 532

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

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Childre n or Inducin g Childre n to Live Corrupt and Immora l Life or Against Attempt ed Virtue Loss of Parenta l Authorit y Attempt by One Parent Against the Life of the Other Unless there is Reconc iliation Betwee n Parents Spouse Has Given Cause for Legal Separat ion Failure to Report Violent Death of Decede nt Within

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✓

✓

✓

✓

✓

✓

One Month Unless Authorit ies Have Already Taken Action Force, Violenc e, Intimida tion, or Undue Influenc e to Prevent Another from Making a Will or Revoki ng One Already Made or Who Suppla nts or Alters the Latter’s Will Falsifie s or Forges Suppos ed Will of Decede nt

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✓

✓

Different Objects of Legacies and Devises [Art. 934-944, CC] Objects of Legacy or Effect Devise Thing pledged or ● Estate is obliged to mortgaged to pay the debt secure a debt Page 236 of 532

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● ●

Credit or remission or release of a debt

●

●

Other charges pass to the legatee or devisee Effective only as regards the credit or debt existing at the 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

● Alternative legacies and devises

● ● ●

Legacy of generic personal property or indeterminate real property

● ● ●

Legacy of education ● ● ● Legacy of support

●

CIVIL LAW

● Thing pledged by debtor to a creditor

●

●

Order of payment of a debt

●

●

Only the pledge is extinguished; the debt remain Shall not be applied to his credit unless the testator so declares If testator does not really owe the debt, the 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

The choice is with the heir, or the executor or administrator If the heir, legatee or devisee dies, the right passes to their heirs Once made, the choice is irrevocable Legacy is valid even if there are no things of the same kind in the estate Devise of indeterminate real property valid only if there are immovable property of the same kind in the estate The choice belongs to the heir, legatee or devisee or the executor or administrator 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 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 Page 237 of 532

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● ●

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Preferential legacies or devises All other legacies or devises pro rata

● ● ● ●

Application ● When the reduction is necessary to preserve the legitime of compulsory heirs from impairment whether there are donations inter vivos or not; or 
 ● When, although, the legitime has been preserved by the testator himself there are donations inter vivos. 


● ●

CIVIL LAW

Legacy for support Legacy for education Legacy/devise of specific, determinate thing which forms a part of the estate All others pro rata When there are no compulsory heirs and the entire estate is distributed by the testator as legacies or devises; or When there are compulsory heirs but their legitime has already been provided for by the testator and there are no donations inter vivos.

Art. 911, CC governs when there is a conflict Art. 950, CC governs when the question of between compulsory heirs and the devisees and reduction is exclusively among legatees and legatees. 
 devisees 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 with respect 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. 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.

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IN

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 halfblood 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 ironcurtain 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,

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sisters, 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 renunciation among heirs of the same degree. The relatives must be in the same relationship because of the Rule of Preference of Lines.

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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 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]

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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.

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]

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2. Order of Intestate Succession Decedent is a Legitimate Child Legitimate children or descendants (LCD) Legitimate parents or ascendants (LPA) Illegitimate children descendants (ICD)

or

Surviving spouse (SS) Brothers and sisters, nephews, nieces (BS/NN) Legitimate collateral relatives within the 5th degree (C5) State

Decedent is an Illegitimate Child Legitimate children or descendants (LCD) Illegitimate children or descendants (LPA)

Decedent is an Adopted Child

Legitimate children or descendants (LCD) Illegitimate children or descendants (ICD) Legitimate or illegitimate parents, Illegitimate parents (IP) or legitimate ascendants, adoptive parents Surviving spouse (SS) Surviving spouse (SS) Illegitimate brothers and sisters, Brothers and sisters, nephews, nephews, nieces (IBS/NN) nieces (BS/NN) State

State

RULES OF EXCLUSION AND CONCURRENCE IN INTESTATE SHARES Intestate Heirs Excludes Excluded By Concurs With Ascendants, LC + LD No one SS + ILC Collaterals and State ILP, Collaterals and ILC + D No one SS, LC, LP State LP + LA Collaterals and State LC ILC + SS ILP Collaterals and State LC and ILC SS Collaterals other than LC, ILC, LP, ILP, SS siblings, nephews and No one Siblings, Nephews, nieces, State Nieces Siblings, Nephews, All other collaterals LC, ILC, LP, ILP SS Nieces and State Other collaterals within Collateral more remote LC, ILC, LP, ILP and Collaterals in the same 5th degree in degree and State SS degree 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]. Page 241 of 532

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OUTLINE OF INTESTATE SHARES a.

Legitimate children only

b.

Legitimate children Illegitimate children

and

● ● ●

c.

Legitimate children surviving spouse

and

● ●

d.

Legitimate children, Surviving spouse, and Illegitimate children

● ●

Legitimate parents only Legitimate ascendants only (excluding parents) Legitimate parents and illegitimate children Legitimate parents and surviving spouse Legitimate parents, surviving spouse and illegitimate children Illegitimate children only

● ●

Illegitimate children and surviving spouse l. Surviving spouse only m. Surviving spouse and illegitimate parents n. Surviving spouse and legitimate brothers and sisters, nephews and nieces o. Surviving spouse and illegitimate brothers and sisters, nephews and nieces

●

p. q.

Illegitimate parents only Illegitimate parents and children of any kind (whether legitimate or illegitimate child) Legitimate brothers and sisters only

● ●

s.

Legitimate brothers and sisters, nephews and nieces

●

t.

Nephews and nieces only

●

u.

Other collaterals [Arts. 1009 and 1010]

●

v.

State

e. f. g. h. i.

j. k.

r.

● ● ● ●

● ● ● ●

●

● ●

Divide entire estate equally among all legitimate children [Art. 979, CC] Legitimate children include an adopted child. Divide entire estate such that each illegitimate child gets ½ of what a legitimate child gets [Art. 983, CC and Art. 176, FC] Ensure that the legitime of the legitimate children are first satisfied. Divide entire estate equally between the legitimate children and the surviving spouse, the latter deemed as one child. The same rule holds where there is only one child. Divide the entire estate such that the surviving spouse is deemed one legitimate child and each illegitimate child getting ½ of what the legitimate child gets. [Art. 996, CC and Art. 176, FC] Ensure that the legitime of the legitimate children and the spouse are first satisfied. Divide the entire estate equally [Art. 985, CC]. Divide the entire estate equally but with the observance of the rule of division by line [Art. 987, CC]. Legitimate parents get ½ of the estate, illegitimate children get the other ½ [Art. 991, CC]. Legitimate parents get ½ of the estate; The surviving spouse gets the other ½ [Art. 997, CC]. Legitimate parents get ½ of the estate; surviving spouse and the illegitimate child each get ¼ each, the latter to share among themselves if more than one [Art. 1000, CC]. Divide the entire estate equally [Art. 988, CC]. Illegitimate children get ½ of the estate; the surviving spouse gets the other ½ [Art. 998, CC]. Entire estate goes to the surviving spouse [Art. 994/995, CC]. Illegitimate parents get ½ and the spouse gets the other ½ [by analogy with Art. 997, CC]. Surviving spouse gets ½ of the estate, while the rest gets the other ½ with the nephews and nieces inheriting by representation if proper [Art. 1001, CC]. Surviving spouse gets ½ of the estate while the rest gets the other ½ with the nephews and nieces inheriting by representation, if proper; Note that all the other relatives should be “illegitimate” because of the iron-curtain rule [Art. 994, CC]. Entire estate goes to the illegitimate parents [Art. 993, CC]. Illegitimate parents are excluded and do not inherit. For the rule on the respective shares of the children, see numbers 1, 2 or 10, whichever is applicable. Divide the entire estate such that full-blood brothers/sisters gets a share double the amount of a half-blood brother or sister [Art. 1004 and 1006, CC]. Divide the entire estate observing the 2 is to 1 ratio for full and half-blood relationships with respect to the brothers and sisters, with the nephews and nieces inheriting by representation, if proper [Art. 1005 & 1008, CC]. Divide the entire estate per capita, observing the 2 is to 1 ratio [Arts. 975 and 1008, CC]. Divide entire estate per capita. Collateral relatives must be with the 5th degree of consanguinity. Note: the nearer relative excludes the more remote relatives. If there are no other intestate heirs, the State inherits the entire estate through escheat proceedings [Art. 1011, CC].

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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? 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.

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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]

(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.

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Effect of Predecease, Disinheritance or Repudiation Cause of Vacancy

Predecease

Incapacity

Disinheritan ce Repudiation

Testamentary Succession Free Legitime Portion Representati on Intestate Succession Representati on Intestate Succession Representati on Intestate Succession Intestate Succession

Incapacity, Intestate Successio n

Accretion Intestate Successi on Accretion Intestate Successi on

Representati on Intestate Succession Representati on Intestate Succession

-

-

Accretion

Accretion

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

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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: 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;

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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 Effected when the execution of a testator makes a will document or any instituting the writing in which the unworthy heir with decedent condones knowledge of the the cause of cause of incapacity incapacity Revoked when the Cannot be revoked 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 Disinheritance is the Unworthiness act by which a renders a person testator, for just incapable of cause, deprives a succeeding to the compulsory heir of his succession, whether right to the legitime testate or intestate [Art. 815, CC] Determination of Capacity [Tolentino] General Rule: At the death of the decedent [Art. 1034, CC] 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

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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

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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 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]

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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. 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

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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 COLLATION

NOT

SUBJECT

TO

Absolutely no collation: Expenses for support, education (only elementary and secondary), medical

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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 The object is not specified. It could be anything of value. The donor is not specified. He or she could be anyone with capacity to dispose property. If given by a parent, the donee is either the child of the donor, or the future spouse of the child of the donor, or both of them jointly. The gift must be given before the celebration of the marriage.

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Wedding Gift The object is jewelry, clothing or outfit. The donor must be a parent or ascendant of the donee. The donee is either a child or a descendant of the donor. The gift may be given at any time, either before or

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after the celebration of the marriage. The donation is governed by the rules of ordinary donations, except as modified by the provisions of the Family Code. Thus, a donation propter nuptias given by a parent to a child is collationable in full, except if the donor declared it to be noncollationable

The gift is noncollationable to the extent of one-tenth of the disposable free portion of the hereditary estate of the donor.

JUDICIAL vs. EXTRAJUDICIAL PARTITION Judicial Extra-judicial Partition done by Partition made by Court pursuant to an the decedent himself Order of Distribution by an act inter vivos which may or may or by will or by a third not be based on a person entrusted by project of partition. the decedent or by the heirs themselves [Paras]. Partition Inter Vivos: It is one that merely allocates specific items or pieces of property on the basis of the pro-indiviso shares fixed by law or given under the will to heirs or successors [Art. 1080, CC].

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].

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Who may effect Partition?

Who may demand partition?

When Partition Page 248 of 532

1. The Decedent, during his lifetime by an act inter vivos or by will [Art.1080, CC] 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] 1. Compulsory heir 2. Voluntary heir upon fulfillment of condition, if any [Art. 1084, CC] 3. Legatee or devisee 4. Any person who has acquired interest in the estate 1. When expressly prohibited by the

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cannot be demanded?

2.

3. 4.

1.

2. Prohibition to Partition 3.

testator for a period not exceeding 20 years [Art. 1083, CC] When the co-heirs agreed that the estate shall not be divided for a period not exceeding 10 years, renewable for another 10 years [Art. 494, CC] When prohibited by law When to partition the estate would render it unserviceable for the use for which it is intended The prohibition to partition for a period not exceeding 20 years can be imposed even on the legitime. If the prohibition to the partition is for more than 20 years, the excess is void. 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

CIVIL LAW

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. L26855 (1989)]. Note: The redemption can be exercised only by a co-heir. 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].

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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:

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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. 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 PARTITION

AND

NULLIFICATION

OF

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 onefourth (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.

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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. 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.

CIVIL LAW

Important Periods in Partition 1 month or Testator, if publicly known to less before be insane, burden of proof is making a on the one claiming validity of will the will Maximum period testator can 20 years prohibit alienation of dispositions 5 years from To claim property escheated delivery to to the State the State To report knowledge of 1 month violent death of decedent lest he be considered unworthy 5 years from the Action for declaration of time incapacity and for recovery of disqualified the inheritance, devise or person legacy took possession 30 days from Must signify issuance of acceptance/repudiation; order of otherwise, deemed accepted distribution 1 month form Right to repurchase written hereditary rights sold to a notice of stranger by a co-heir sale To enforce warranty of title/quality of property 10 years adjudicated to co-heir from the time the right of action accrues To enforce warranty of 5 years solvency of debtor of the from estate at the time partition is partition made 4 years Action for rescission of from partition on account of lesion partition

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OBLIGATIONS AND CONTRACTS

OBLIGATIONS AND CONTRACTS CIVIL LAW

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CIVIL LAW

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OBLIGATIONS AND CONTRACTS

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]

CIVIL LAW

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. 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]

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)

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B. NATURE AND EFFECT OF OBLIGATIONS

4. To deliver its even if not accessions and mentioned accessories [Art. [Art. 1166, 1166, CC] CC] • Accessions – 4. Not to be compelled to everything receive a which is different one, produced by a although of thing, or which the same is incorporated value as, or or attached more valuable thereto, than that excluding fruits which is due • Accessories – [Art. 1244, things designed CC] for the recover embellishment, 5. To damages in use or case of preservation of breach, another thing of exclusive or in more addition to importance specific 5. To pay damages in performance case of breach [Art. [Arts. 1165, 1170, CC] 1170, CC]

1. Obligation to give a. Type of things Specific/ Determinate Thing

Generic Thing

Limited Generic Thing

Particularly designated or physically segregated from all others of the same class [Art.1460, CC]; Identified by individuality.

Object is designated only by its class/ genus/ species.

When the generic objects are confined to a particular class.

Cannot be substituted against the obligee’s will.

Can be substituted by any of the same class and same kind.

Can be substituted by any of the same particular class.

To Give a Generic Thing 1. To take care of the thing [Art. 1163, CC] 2. To deliver a thing of the quality intended by the parties taking into consideration the purpose of the obligation and other circumstances [Art. 1246, CC] 3. Creditor cannot demand a thing of superior quality; neither can the debtor deliver a thing of inferior quality. 4. To pay damages in case of breach [Art. 1170, CC]

b. Rights and Duties of Parties Duties of the Debtor

Rights of the Creditor

To Give a Specific Thing 1. To preserve or take 1. To compel care of the thing due delivery [Art. with the proper 1165, CC] diligence of a good 2. To the fruits father of a family from the time [Art. 1163, CC] the obligation 2. To deliver the to deliver thing itself [Art. arises [Art. 1165, CC] 1164, CC] 3. To deliver the 3. To the fruits of the thing accessions [Art. 1164, CC] and accessories,

Page

1. To ask that the obligation be complied with [Art. 1165, CC] 2. To ask that the obligation be complied with by a third person at the expense of the debtor 3. To recover damages in case of breach [Art. 1165, CC] 4. Not to be compelled to receive a

U.P. LAW BOC

OBLIGATIONS AND CONTRACTS

different one, although of the same value as, or more valuable than that which is due [Art. 1244, CC]

2. Obligation to do or not to do a. Rights and Duties of Parties Duties of the Debtor

Rights of the Creditor

Obligation To Do 1. To do it [Art. 1167, CC] 2. To shoulder the cost of execution should he fail to do it [Art. 1167, CC] 3. To undo what has been poorly done [Art. 1167, CC] 4. To pay damages in case of breach [Art. 1170, CC]

1. To have the obligation executed at the cost of the debtor [Art. 1167, CC] 2. To recover damages in case of breach [Art. 1170, CC] Note: The debtor cannot be compelled to perform his obligation. The ultimate sanction of civil obligations is indemnification of damages. This would be tantamount to involuntary servitude.

Obligation Not To Do 1. Not to do what 1. To ask to undo should not be what should not done be done, at the debtor’s

CIVIL LAW

2. To shoulder expense. [Art. cost of undoing 1168, CC] what should not 2. To recover have been done damages, where [Art. 1168, CC] it would be 3. To pay physically or damages in legally case of breach impossible to [Art. 1170, CC] 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 obligations

of

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] 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)]

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•

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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 Neither party demand, No delay.” incurs in delay if the other does not The mere expiration of comply or is not the period fixed by the ready to comply in parties is not enough in a proper manner order that the debtor with what is may incur in delay. incumbent upon him. From the Those obliged to deliver moment one of the or to do something parties fulfills his incur in delay from obligation, delay the time the obligee by the other judicially or begins. [Art. 1169 extrajudicially par. 3, CC] demands from them the fulfillment of their No delay if neither obligation. [Art. 1169 performs. par. 1, CC]

CIVIL LAW

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).

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Effects 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.

CIVIL LAW

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 committed a breach of the obligation, the liability of the first infractor shall be equitably tempered by the courts. xxx”

“In contracts, quasicontracts, and quasidelicts, the court may equitably mitigate the damages under circumstances other than the case referred to in the preceding article, as in the ff. instances: (1) That the plaintiff himself has contravened the terms of the contract xxx”

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]

Second infractor not liable for damages at all; only the first infractor is liable, but with his liability mitigated.

COMPENSATIO MORAE Delay of both parties obligations.

Art. 1171, CC. Responsibility arising from fraud is demandable in all obligations. Any waiver of an action for future fraud is void.

in

reciprocal

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]

Does not appear to consider which infractor first committed the breach.

c. Fraud (Dolo) in the Performance of the Obligation

Definition: Fraud (dolo) is the deliberate or intentional evasion of the normal fulfilment of an obligation. [de Leon]

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Two Types of Fraud Dolo Causante [Art. 1338, par. 1, Art. 1344, CC]

Dolo Incidente [par. 2, Art. 1344, CC]

Definition Those deceptions or misrepresentations of a serious character employed by one party and without which the other party would not have entered into the contract. [Tankeh v. DBP, G.R. No. 171428 (2013)]

Those which are not serious in character and without which the other party would still have entered into the contract. [Tankeh v. DBP, G.R. No. 171428 (2013)]

When Present Deception used by one party prior to or simultaneous with the contract, in order to secure the consent of the other [Tankeh v. DBP, G.R. No. 171428 (2013)]

Deception used by one party at the time of birth or perfection, or performance of the obligation

Object Essential cause of the Some particular or obligation without which accident of the 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]

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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]

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OBLIGATIONS AND CONTRACTS

Distinguished from Rescission under Art. 1380 Rescission / Resolution [Art. 1191, CC]

Rescission [Art. 1380, CC]

Based on non- Based on lesion or performance or fraud upon creditors. non-fulfillment of obligation. Action is instituted Action is instituted by only by the injured either party or by a party. third person. Principal retaliatory character.

action, Subsidiary action, in in the absence of any other legal means to obtain reparation.

Applies only to reciprocal obligations where one party is guilty of non-fulfillment

Applies to either unilateral or reciprocal obligations even when the contract has been fully fulfilled.

In some cases, court may grant a term for performance.

Court cannot grant a period or term within which one must comply.

Non-performance Non-performance by by the other party is the other party is important. immaterial.

b. Subsidiary Creditors

Remedies

of

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.

CIVIL LAW

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; 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.

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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 fulfillment or performance of the obligation at any time but the obligor cannot compel him to accept payment before the expiration of the period.

Debtor may oppose any premature demand on the part of the obligee for the performance of the obligation, or if he so desires, he may renounce the benefit of the 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] (f) When required by law or stipulation; (g) If parties stipulated an acceleration clause [Tolentino]

CIVIL LAW

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 the 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 Distinguished Alternative Obligations

Facultative

Conditions

Facultative Obligations

Of the two or more Of the two or more prestations, several prestations, only are due. one is due, while the other/s may be performed in substitution of the one due.

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May be complied with by performance of one of the prestations which are alternatively due.

OBLIGATIONS AND CONTRACTS

May be complied with by performance of another prestation in substitution of that which is due.

The right of choice Choice of prestation belongs to the pertains only to the debtor, unless it debtor. has been expressly granted to the creditor. [Art. 1200, CC] Loss/impossibility of all prestations due to a fortuitous event shall extinguish the obligation.

Loss/impossibility of the prestation due to a fortuitous event is sufficient to extinguish the obligation.

Loss/impossibility of one of the prestations does not extinguish the obligation.

Loss/impossibility of the substitute/s does not extinguish the obligation, provided the obligation which is due subsists

Culpable loss of any of the objects alternatively due before the choice is made may give rise to liability on the part of the debtor.

Culpable loss of the object which the debtor may deliver in substitution before the substitution 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

CIVIL LAW

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 [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]

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Loss of Specific Things or Impossibility of Performance of Prestations in an Alternative Obligation If Debtor’s Choice [Art. 1204, CC] Fortuitous Event

shall choose without a right to from among the damages OR price/value remainder. of the thing lost, with right to damages. One prestation remains

Debtor’s Fault

All prestations lost/impossible Debtor is Creditor shall have a released from right to indemnity for the obligation. 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 Debtor to perform that perform that which the debtor shall which he shall choose from among the choose from remainder, without among the liability for damages. remainder. One prestation remains Debtor to Debtor to perform that perform that which remains. which remains. If Creditor’s Choice [Art. 1205, CC] Fortuitous Event

CIVIL LAW

OBLIGATIONS AND CONTRACTS

Debtor to Creditor may claim the perform that remaining thing without a which remains. right to damages OR the price/value of the thing lost with right to damages. 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 obligor: obligor is liable.

The loss or deterioration of the substitute on account of the obligor’s delay, negligence, or fraud, renders the obligor If due to the liable because once the negligence of the substitution is made, the obligor: obligor is obligation is converted into a simple one with the not liable. substituted thing as the object of the obligation.

Debtor’s Fault

5. Joint and Obligations

All prestations lost/impossible Debtor is Creditor may claim the released from price/value of any of the obligation. them, with indemnity for damages. Some prestations lost/impossible Debtor to deliver Creditor may claim any that which he of those subsisting

Solidary

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).

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OBLIGATIONS AND CONTRACTS

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.

JOINT INDIVISIBLE 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 one of the debtors, damages due must be borne by him alone.

In case of breach where one of the joint debtors fails to comply with his 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.

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.

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

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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 in the same manner and by the same periods and conditions. [Art. 1211, CC] Solidarity

Indivisibility

Refers to the legal tie (vinculum juris), and consequently to the subjects or parties of the obligation

Refers to the prestation that is not capable of partial performance

More than one Exists even if there is creditor or more than only one creditor one debtor (plurality and/or one debtor of subjects) Each creditor may demand the entire prestation and each debtor is bound to pay the entire prestation

Each creditor cannot demand more than his share and each debtor is not bound to pay more than his share

Effect of breach: Effect of Solidarity remains Obligation converted indemnity damages

breach: is to for

All debtors are liable Only the debtors for breach committed guilty of breach of by a co-debtor obligation is liable for damages All debtors are Other debtors are proportionately liable not liable if one for insolvency of one debtor is insolvent debtor

CIVIL LAW

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) 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

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4.

5.

6.

7.

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not anything which may be prejudicial to the latter. [Art. 1212, CC] 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] 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] The credit and its benefits are divided equally among them, unless agreement to the contrary. 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]

2.

3.

a.

b.

4. 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

5.

6.

CIVIL LAW

can recover from the co-debtors their respective shares Each debtor may set up his own claims against the creditor as payment of the obligation 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 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] 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] 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 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) 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.

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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

Loss of the thing or impossibility of performance of the passive/mixed solidary obligation [Art. 1221, CC]

3. Those pertaining to his own share

Without The obligation fault of extinguished. the debtors

4. Those personally belonging to other codebtors but only as regards that part of the debt for which the latter are responsible.

With fault of any of the debtors

All debtors shall be responsible to the creditor, for the price and the payment of damages and interest, without prejudice to their action against the guilty or negligent debtor.

Through a fortuitous event after one incurred in delay

All debtors shall be responsible to the creditor, for the price and the payment of damages and interest, without prejudice to their action against the guilty or negligent debtor.

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 them shall not be an obstacle to those which may subsequently be directed against the others so long as the debt has not been fully collected [Art. 1216, CC].

Full payment made by one of the solidary debtors extinguishes the obligation [Art. 1217, CC].

The creditor may proceed against any one of the solidary debtors or all simultaneously [Art. 1216, CC].

If two or more solidary debtors offer to pay, the creditor may choose which offer to accept [Art. 1217, CC].

A creditor’s right to proceed against the surety exists independently of his right to proceed against the principal.

The solidary debtor who made the payment shall have the right to claim from his co-debtors the share which corresponds to them with interest, UNLESS barred by prescription or illegality [Art. 1218, CC].

6. Obligations clause

with

shall

a

be

penal

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

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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 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]

CIVIL LAW

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.

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].

1. Payment or performance

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.

The delivery of money OR The performance of obligation [Art. 1232, CC]

a. Payment

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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 fulfillment or performance of the obligation at any time but the obligor cannot compel him to accept payment before the expiration of the period.

Debtor may oppose any premature demand on the part of the obligee for the performance of the obligation, or if he so desires, he may renounce the benefit of the 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] (f) When required by law or stipulation; (g) If parties stipulated an acceleration clause [Tolentino]

CIVIL LAW

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 the 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 Distinguished Alternative Obligations

Facultative

Conditions

Facultative Obligations

Of the two or more Of the two or more prestations, several prestations, only are due. one is due, while the other/s may be performed in substitution of the one due.

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May be complied with by performance of one of the prestations which are alternatively due.

OBLIGATIONS AND CONTRACTS

May be complied with by performance of another prestation in substitution of that which is due.

The right of choice Choice of prestation belongs to the pertains only to the debtor, unless it debtor. has been expressly granted to the creditor. [Art. 1200, CC] Loss/impossibility of all prestations due to a fortuitous event shall extinguish the obligation.

Loss/impossibility of the prestation due to a fortuitous event is sufficient to extinguish the obligation.

Loss/impossibility of one of the prestations does not extinguish the obligation.

Loss/impossibility of the substitute/s does not extinguish the obligation, provided the obligation which is due subsists

Culpable loss of any of the objects alternatively due before the choice is made may give rise to liability on the part of the debtor.

Culpable loss of the object which the debtor may deliver in substitution before the substitution 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

CIVIL LAW

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 [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]

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Loss of Specific Things or Impossibility of Performance of Prestations in an Alternative Obligation If Debtor’s Choice [Art. 1204, CC] Fortuitous Event

shall choose without a right to from among the damages OR price/value remainder. of the thing lost, with right to damages. One prestation remains

Debtor’s Fault

All prestations lost/impossible Debtor is Creditor shall have a released from right to indemnity for the obligation. 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 Debtor to perform that perform that which the debtor shall which he shall choose from among the choose from remainder, without among the liability for damages. remainder. One prestation remains Debtor to Debtor to perform that perform that which remains. which remains. If Creditor’s Choice [Art. 1205, CC] Fortuitous Event

CIVIL LAW

OBLIGATIONS AND CONTRACTS

Debtor to Creditor may claim the perform that remaining thing without a which remains. right to damages OR the price/value of the thing lost with right to damages. 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 obligor: obligor is liable.

The loss or deterioration of the substitute on account of the obligor’s delay, negligence, or fraud, renders the obligor If due to the liable because once the negligence of the substitution is made, the obligor: obligor is obligation is converted into a simple one with the not liable. substituted thing as the object of the obligation.

Debtor’s Fault

5. Joint and Obligations

All prestations lost/impossible Debtor is Creditor may claim the released from price/value of any of the obligation. them, with indemnity for damages. Some prestations lost/impossible Debtor to deliver Creditor may claim any that which he of those subsisting

Solidary

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).

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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]

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

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

One creditor

Debtor must be partially or relatively insolvent

Debtor not necessarily in state of financial difficulty

Universality of property is ceded

Thing delivered is equivalent of performance

Merely releases debtor for the net proceeds of things ceded or assigned, unless there is contrary intention

Extinguishes obligation to the extent of the value of the thing delivered, as agreed upon, proved or implied from the conduct of the creditor

Involves all properties of debtor

Does not involve all properties of debtor

Creditor does not become owner of the ceded property

Creditor becomes owner

e. Tender of Payment and Consignation

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

Dacion en pago

Plurality of creditors

c. Dation in Payment Delivery and transmission of ownership of a thing by the debtor to the creditor as an accepted equivalent of the performance of the obligation (dacion en pago).

CIVIL LAW

Tender of payment Manifestation made by the debtor to the creditor of his desire to comply with his obligation, with offer of immediate

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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.

JOINT INDIVISIBLE 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 one of the debtors, damages due must be borne by him alone.

In case of breach where one of the joint debtors fails to comply with his 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.

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.

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

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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 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 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]

CIVIL LAW

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

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4.

5.

6.

7.

OBLIGATIONS AND CONTRACTS

not anything which may be prejudicial to the latter. [Art. 1212, CC] 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] 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] The credit and its benefits are divided equally among them, unless agreement to the contrary. 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]

2.

3.

a.

b.

4. 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

5.

6.

CIVIL LAW

can recover from the co-debtors their respective shares Each debtor may set up his own claims against the creditor as payment of the obligation 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 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] 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] 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 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) 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.

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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 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]

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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.

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].

1. Payment or performance

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.

The delivery of money OR The performance of obligation [Art. 1232, CC]

a. Payment

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Exception: Stipulation to the contrary [Art. 1236, NCC] Reimbursement for Payment Made by a Third Person The third party pays with the consent of the debtor

The third party pays without the knowledge or consent of the debtor

The third party may claim reimbursement for the full amount. [Art. 1236, CC]

The third party may only claim insofar as the payment has been beneficial to the debtor. [Art. 1236, CC]

The third party is presumed to be legally subrogated [Art. 1302, CC]

The third party cannot compel the creditor to subrogate him on his rights. [Art. 1237, CC]

Reimbursement Distinguished Reimbursement

&

Subrogation Subrogation

Personal action to Includes recover amount paid reimbursement, but also the exercise of other rights attached 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.

2. 3. 4. 5. 6. 7.

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interest; or any person authorized to receive it [Art. 1240, CC] Payment to a person who is incapacitated to administer his property shall be valid: if he has kept the thing delivered, OR insofar as the payment has been beneficial to him. [Art. 1241 par 1, CC] Payment made in good faith to any person in possession of the credit shall release the debtor. [Art. 1242, CC] Payment to a third person 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

TO WHOM General Rule: Upon demand 1. The person in whose favor the obligation has been constituted; orHis successor in

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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 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. L58961, (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.

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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 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.

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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 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 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]

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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

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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)]

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

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OBLIGATIONS AND CONTRACTS

Confusion

There must always be Involves only one two obligations. obligation.

There are two persons who are mutually debtors and creditors of each other in two separate obligations, each arising from the same cause.

There is only one person whom the characters of the creditor and debtor meet.

Compensation

Payment

Capacity to dispose and receive the thing is unnecessary since compensation operates by law

Requires capacity to dispose of the thing paid and capacity to receive

May be partial

Must be performance

Compensation Takes place operation of law

total

Counterclaim by Must be pleaded to be effectual

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.

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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

Eleme nts

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Fortuitous Events

Loss/ Impossibility

Unforseen Difficul-ty

Could not have been forseen or forseen but inevitable. Causes loss of the thing or obligation could not be complied with in the

Perishes, goes out of commerce or disappear s

Could not have been forseen. Service has become so difficult but not impossible.

normal manner Fault

Without fault

May be with or without fault

Without Fault

Effect

Nonliability for delay/ damages

If without fault, extinguish es the obligation; If with fault, liability for damages

Release from the obligation in whole or in part

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 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

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6. Novation

void: novation.

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 is Void

If New Obligation is Void

Old obligation is extinguished and replaced by the new one stipulated.

Novation is void if the original obligation was void, EXCEPT when annulment may be claimed only by the debtor, or when ratification validates acts that are voidable [Art. 1298, CC]

New obligation is void, the old obligation subsists, UNLESS the parties intended that the former relations shall be extinguished in any event [Art. 1297, CC]

No void: No novation.

b. Original obligation voidable: Effective if contract is ratified before novation.

B. New obligation voidable: Novation is effective.

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] 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: new obligation becomes demandable.

a. Original obligation is extinguished, while new obligation exists.

b. Fulfillment of condition concerning the original obligation: old obligation is revived; new obligation loses force.

b. Demandability shall be subject to fulfillment/ nonfulfillment of the condition affecting it.

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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.

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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]

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]

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.

Rules and Form 1. Express Remission

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 3. Compromise – when the matter renounced is in litigation or dispute and in exchange of some concession which the creditor receives. [Tolentino]

Kinds of 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.

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.

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

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1. Old debtor is released 2. Insolvency of the new debtor does not revive the old obligation in case the old debtor did not agree to expromision. 3. If with the knowledge and consent of the old debtor, the new debtor can demand reimbursement of the entire amount paid and with subrogation of creditor’s 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.

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OBLIGATIONS AND CONTRACTS

1. Insolvency of the new debtor revives the obligation of the old debtor if it was anterior and public, and known to the old debtor. 2. New debtor can demand reimbursement of the entire amount he has paid from the original debtor. He may compel the creditor to subrogate him to all of his rights.

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, the credit with all the rights thereto appertaining, either against the debtor or third persons.

A creditor, to whom partial payment has been made, may exercise his right for the remainder, 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 Debtor’s consent is not is necessary. required.

For subjective novation, it is insufficient that the juridical relation 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

Extinguishes an obligation and gives rise to a new one.

Refers to the same right which passes from one person to another, without modifying or extinguishing the obligation.

Defects/vices in Defects/vices in the old the old obligation obligation are not are cured. cured.

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donated and the value of the charges which the donee must satisfy. The acceptance may be made in the same deed of donation or in a separate public document, but it shall not take effect unless it is done during the lifetime of the donor. If the acceptance is made in a separate instrument, the donor shall be notified thereof in an authentic form, and this step shall be noted in both instruments. [Art. 749, CC]

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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. Effect: There is a presumption that it has been voluntarily delivered by the creditor.

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. 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

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.

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]

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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 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

CIVIL LAW

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 obligations Confusion in Joint Obligation

Confusion in Solidary Obligation

Confusion DOES NOT extinguish a joint obligation EXCEPT as regards the share of the person in whom the two characters concur [Art. 1277, CC]

Extinguishes the entire obligation, but the other debtors may be liable for reimbursement if payment was made prior to remission.

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; Note: The term ‘consumable’ is erroneously used in Art 1279. The appropriate term is ‘fungible’. [Tolentino] c. Both debts are due;

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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)]

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

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OBLIGATIONS AND CONTRACTS

Confusion

There must always be Involves only one two obligations. obligation.

There are two persons who are mutually debtors and creditors of each other in two separate obligations, each arising from the same cause.

There is only one person whom the characters of the creditor and debtor meet.

Compensation

Payment

Capacity to dispose and receive the thing is unnecessary since compensation operates by law

Requires capacity to dispose of the thing paid and capacity to receive

May be partial

Must be performance

Compensation Takes place operation of law

total

Counterclaim by Must be pleaded to be effectual

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.

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Option Contract 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 Offeror may withdraw unilaterally by communicating withdraw his offer. 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 be supported 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:

CIVIL LAW

1. Where necessaries are sold or delivered [Art 1489, CC] 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. L27710 (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

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5. Justices, judges, prosecutors, clerks of court, lawyers - property attached in litigation Incapacity to Give Consent Disqualification to Contract Incapacity to Give Consent

vs.

Disqualification to Contract

Restrains the exercise Restrains the very of the right to contract right itself Based upon Based upon public subjective policy and morality circumstances of certain persons Voidable

Void

INTELLIGENT, FREE, SPONTANEOUS, AND REAL (NOT VITIATED) Vices of Consent (makes voidable) [Art. 1330, CC] 1. Mistake 2. Intimidation 3. Violence 4. Undue influence 5. Fraud

contract

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. [Art.1331, CC]

CIVIL LAW

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 believe that a fact exists when in reality it does not, or vice versa

One or both parties arrive at an erroneous conclusion on the interpretation of a question of law or its legal effects

Vitiates consent

Does not vitiate consent EXCEPT when it involves mutual error as to the effect of an agreement

There is no mistake if the party alleging it knew the doubt, contingency or risk affecting the object of the contract. [Art. 1333, CC]

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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)]. 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.

CIVIL LAW

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 knowledge but without consent

Debtor may set up compensation of debts previous to the assignment but not of subsequent ones

Without debtor’s knowledge

Debtor may set up compensation of all credits 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]

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6. Novation

void: novation.

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 is Void

If New Obligation is Void

Old obligation is extinguished and replaced by the new one stipulated.

Novation is void if the original obligation was void, EXCEPT when annulment may be claimed only by the debtor, or when ratification validates acts that are voidable [Art. 1298, CC]

New obligation is void, the old obligation subsists, UNLESS the parties intended that the former relations shall be extinguished in any event [Art. 1297, CC]

No void: No novation.

b. Original obligation voidable: Effective if contract is ratified before novation.

B. New obligation voidable: Novation is effective.

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] 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: new obligation becomes demandable.

a. Original obligation is extinguished, while new obligation exists.

b. Fulfillment of condition concerning the original obligation: old obligation is revived; new obligation loses force.

b. Demandability shall be subject to fulfillment/ nonfulfillment of the condition affecting it.

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c. Fulfillment of condition concerning the new obligation: no novation; requisite of a previous valid and effective obligation lacking.

AS TO ESSENCE OR OBJECT

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 1. Objective/Real 2. Subjective/Personal

Objective/Real

Subjective/Personal

1. Change of the subject matter; 2. Change of cause or consideration; or 3. Change of the principal conditions or terms

1. Substitution of debtors a. Expromision b. Delegacion 2. Subrogation of a third person to the rights of the creditor a. Conventional b. Legal

1. Substitution of Debtors Expromision

Delegacion

Initiative for change does not emanate from the debtor, and may even be made without his knowledge.

Debtor (delegante) offers or initiates the change, and the creditor (delegatorio) accepts a third person (delegado) as consenting to the substitution.

Requisites 1. Consent of the creditor and the new debtor; and 2. Knowledge or consent of the old debtor is not required. Effects

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Consent of 1. old debtor; 2. new debtor; and 3. creditor.

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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]

[JLT Agro v. Balansag, G.R. No. 141882 (2005)]

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.

The essential and impelling reason why a party assumes an obligation.

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 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

c. Cause of Contracts

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] Cause vs. Object Cause

Object

As to Remuneration The service or The thing which is given benefit which is in remuneration remunerated As to Donation The liberality of The thing which is given the donor or or donated benefactor As to the Thing Prestation or The thing or service itself promise of a thing or service by the other As to Contracting Parties Different with May be the same for respect to each both parties part

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1. Old debtor is released 2. Insolvency of the new debtor does not revive the old obligation in case the old debtor did not agree to expromision. 3. If with the knowledge and consent of the old debtor, the new debtor can demand reimbursement of the entire amount paid and with subrogation of creditor’s 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.

CIVIL LAW

OBLIGATIONS AND CONTRACTS

1. Insolvency of the new debtor revives the obligation of the old debtor if it was anterior and public, and known to the old debtor. 2. New debtor can demand reimbursement of the entire amount he has paid from the original debtor. He may compel the creditor to subrogate him to all of his rights.

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, the credit with all the rights thereto appertaining, either against the debtor or third persons.

A creditor, to whom partial payment has been made, may exercise his right for the remainder, 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 Debtor’s consent is not is necessary. required.

For subjective novation, it is insufficient that the juridical relation 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

Extinguishes an obligation and gives rise to a new one.

Refers to the same right which passes from one person to another, without modifying or extinguishing the obligation.

Defects/vices in Defects/vices in the old the old obligation obligation are not are cured. cured.

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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 b. When a third person not interested in the obligation pays with the express or tacit approval of the debtor 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]

The stage to look at to determine the status of the contract (i.e., valid, voidable, void, unenforceable)

The stage to look at to determine whether there has been a breach of the contract

2. Classification

c.

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 Perfection

Exchanges Parties come of offers and to an counteragreement. offers. All the No contract essential yet, thus no requisites binding concur effect

of

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]

d.

Preparation

a. To their subject matter • Things, e.g. sale, deposit, pledge • Services, e.g. agency, lease services

Consummation Parties perform their obligations under the contract

c. To relation to other contracts • Principal – may exist alone; e.g. lease • Accessory – depends on another contract for its existence, e.g. guaranty • 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

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•

f.

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OBLIGATIONS AND CONTRACTS

Gratuitous – where no correlative prestation is received by one party, e.g. donation, commodatum

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

Book, by the rules governing the most analogous nominate contracts, and by the customs of 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 h. To risk • Commutative – fulfillment is predetermined in advance • Aleatory – fulfillment is dependent upon chance i.

j.

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. 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

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. 13191326, 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 ACCEPTANCE

OF

OFFER

AND

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

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merely constitute a counteroffer. [Insular Life v. Asset Builders Corp., G.R. No. 147410 (2004)] OFFER 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

CIVIL LAW

d. Lapse of the time stated in the offer without acceptance being conveyed e. Revocation of the offer before learning of acceptance 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]

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Option Contract 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 Offeror may withdraw unilaterally by communicating withdraw his offer. 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 be supported 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:

CIVIL LAW

1. Where necessaries are sold or delivered [Art 1489, CC] 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. L27710 (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

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5. Justices, judges, prosecutors, clerks of court, lawyers - property attached in litigation Incapacity to Give Consent Disqualification to Contract Incapacity to Give Consent

vs.

Disqualification to Contract

Restrains the exercise Restrains the very of the right to contract right itself Based upon Based upon public subjective policy and morality circumstances of certain persons Voidable

Void

INTELLIGENT, FREE, SPONTANEOUS, AND REAL (NOT VITIATED) Vices of Consent (makes voidable) [Art. 1330, CC] 1. Mistake 2. Intimidation 3. Violence 4. Undue influence 5. Fraud

contract

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. [Art.1331, CC]

CIVIL LAW

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 believe that a fact exists when in reality it does not, or vice versa

One or both parties arrive at an erroneous conclusion on the interpretation of a question of law or its legal effects

Vitiates consent

Does not vitiate consent EXCEPT when it involves mutual error as to the effect of an agreement

There is no mistake if the party alleging it knew the doubt, contingency or risk affecting the object of the contract. [Art. 1333, CC]

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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] Violence

Intimidation

Serious or Reasonable and wellirresistible force 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

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External or Internal or induces the prevents the will to performance of an act manifest itself Determined by 1) 1) Age 2) Sex 3) Intention 2) Means Condition employed 1) Physical force employed must be irresistible, or of such degree that victim has no other recourse under the circumstances but to submit

1) Intimidation must be the determining cause of the contract OR must have caused the consent to be given 2) Threatened act must be unjust or unlawful

2) Such force is the determining cause 3) The threat must be in giving of consent real and serious 4) Produces a reasonable and wellgrounded 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 Circumstances to consider a. Relationship of the parties (family, spiritual, confidential etc.)

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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 there is 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. 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)]

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Absolute vs. Relative Simulation [Art. 1345, CC] Absolute Simulation (Simulados)

Relative Simulation (Disimulados)

The parties have The parties conceal no intention to their true agreement. be bound at all Fictitious contract

Disguised contract

Void. (Because there is an absolute lack of cause) [Art. 1346, CC]

Bound to their real agreement, so 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, the contract 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 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]

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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]

[JLT Agro v. Balansag, G.R. No. 141882 (2005)]

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.

The essential and impelling reason why a party assumes an obligation.

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 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

c. Cause of Contracts

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] Cause vs. Object Cause

Object

As to Remuneration The service or The thing which is given benefit which is in remuneration remunerated As to Donation The liberality of The thing which is given the donor or or donated benefactor As to the Thing Prestation or The thing or service itself promise of a thing or service by the other As to Contracting Parties Different with May be the same for respect to each both parties part

EXCEPTIONS TO THE EXCEPTION b. In case of marriage settlements under Art. 130, CC c. In case of partition of properties inter vivos by the deceased under Art. 1080, NCC Page 300 of 532

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Distinguished from Motive Cause Proximate reason contract

Motive Remote reason for the for contract

Objective or Psychological and juridical reason purely personal reason Always the same Differs for for each contracting party contracting party

Contrary to law, morals, good customs, public policy and public order (unlawful cause)

each

Cause in contracts [Art. 1350] Remuneratory Pure Contracts Beneficence

The undertaking or the promise of the thing or service by the other party

The service or benefit which is remunerated

Mere liberality of the benefactor

Effect of Lack of Cause, Unlawful Cause, False Cause and Lesion [Arts. 1352 – 1355] Cause

Effect

Lack of Cause – absence or total lack of cause

VOID. Note: Cause must exist at the time of the perfection of the contract; it need not exist later.

VOID. If parts of a contract are illegal but the rest are supported by lawful cause, claimant of such has the burden of showing proof; otherwise, the whole contract is VOID. Contracts with illegal cause may still produce effect in 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).

Illegality affects Illegality does not affect existence or existence or validity of validity of the contract contract

Onerous Contracts

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Falsity of cause – cause is stated but is untrue

REVOCABLE/VOIDABLE Parties are given a chance to show that a cause really exists, and that said cause is true and lawful.

Lesion or inadequacy of cause – cause is not proportionate to object

General Rule: NO EFFECT. Exception: Inadequacy of cause shall invalidate the contract when: (1) there is fraud, mistake, undue influence (2) when parties intended a donation

Note: Inadequacy of cause may be a badge of fraud.

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instrument. Otherwise, the contract of partnership is void. [Art. 1773, CC]

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 Special Form Contract Required by Law Donation Immovables

of Must be in a public instrument, specifying therein the property donated and the value of the charges which the donee must satisfy. [Art. 749, CC]

Donation of movables when the value of the personal property donated exceeds P5,000

Must be in writing; otherwise, the donation is void. [Art. 748, CC]

Partnerships where immovable property is contributed

An inventory of said property must be made, signed by the parties and attached to the public

Contract antichresis

of 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 Authority of the agent land or any interest must be in writing; therein otherwise, the sale shall void [Art. 1874, CC] Stipulation to pay Must be expressly interest on loans, made in writing [Art. interest for the use 1956, CC] of money Stipulation limiting common carrier’s duty of extraordinary diligence to ordinary diligence

Must be (1) in writing, signed by the shipper or owner; (2) supported by a valuable consideration; and (3) reasonable, just, and not contrary to public policy [Art. 1744, CC]

Transfer of large Requires transfer of cattle 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 UNENFORCEABLE, ratified:

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contracts UNLESS they

are are

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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: 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

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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) 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;

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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.

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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 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)]

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Reformation v. Annulment [Veluz v. Veluz, supra] Reformation of Instrument

Annulment

Presupposes a valid, existing contract, in which there had been a meeting of the minds of the parties but the instrument drawn up and signed by them does not correctly express the terms of their agreement.

Presupposes a defective contract in which the minds of the parties did not meet, or the consent of one was vitiated.

Equity of reformation is ordinarily limited to written agreements, and its purpose is to establish and perpetuate the true agreement.

Intended to declare the inefficiency which the contract already carries in itself and to render the contract inefficacious.

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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 real agreement, but concealed it from the former [Art. 1363, CC]

b. Fraud

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)] Page 305 of 532

Active If one party was mistaken and the other acted fraudulently in such a way that the instrument does not show their true intention [Art. 1362, CC] Passive When one party was mistaken and the other knew or believed that the instrument did not state their real agreement [Art. 1363, CC]

c. Inequitable conduct If one party was mistaken and the other acted fraudulently or inequitably in such a way that the instrument does not show their true intention [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]

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subsequently ask for its reformation [Art. 1367, 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.

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6. Prescriptive Reformation

Period

for

The prescriptive period for actions based upon a written contract and for reformation of an instrument is ten (10) years under Article 1144 of the Civil Code. [Rosello-Bentir v. Leanda, G.R. No. 128991 (2000)]

4. Who May Ask for Reformation 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 to enforce the instrument cannot Page 306 of 532

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D. INTERPRETATION OF CONTRACTS

or

terms which he voluntarily consented to, or impose on him those which he did not. [Bautista v. CA, G.R. No. 1263655 (2000)]

a. Cardinal/First Rule of Interpretation – Literal Meaning Governs

b. Rule if Language Contrary to Intent – Intent over Literal Interpretation

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]

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]

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 be gathered 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

The cardinal test is the intention of the parties, to be derived from the terms/language of the contract.

1.

Primacy of Intention

Language

In order to judge the intention of the contracting parties, their contemporaneous and subsequent acts shall be principally considered. [Art. 1371, CC]

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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. 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 contract are present but the cause, object or purpose is contrary to law, morals, good customs, public order or public policy, or the contract itself is prohibited or declared void by law

Those where one or some or all of the requisites essential for the validity of a contract are absolutely lacking

Principle of pari Principle of pari delicto is applicable delicto is inapplicable May produce legal Cannot produce any effects effect Covers Art. 1409 Covers Art. 1409 (2) (1), (3), (4), (5), (6) and (3) and (7) Void vs. Voidable Contracts Void

Voidable

Those where one of the essential requisites is wanting, either in fact or in law, or is declared void by statute.

Those where all the essential requisites are present, but consent is vitiated by want of capacity, or by error, violence, intimidation, or deceit

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c. Exclusion to Rules – Distinct and Different Cases

Trigger: Words which may have different significations.

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]

Effect: They shall be understood in what is most keeping with the contract’s nature and object.

d. Stipulation Effectual

Rendered

to

be

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 Together

Interpreted

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

Art. 1374

Provides that which of the several meanings of a stipulation would most adequately render the contract effectual would be adopted. Provides that the various stipulations of a contract would be interpreted together, and attributing to doubtful stipulations the sense resulting from the joint interpretation.

g. Interpretation against Causing Obscurity

Party

The interpretation of obscure words or stipulations 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 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 that prepared the same, this rule applies only if the stipulations in such contract are obscure 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 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]

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

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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]

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 The contract shall upon the principal be null and void. object/s of any contract and it cannot be known what may have been the intention or will of the parties When doubts refer to the incidental circumstances of gratuitous contracts and it is absolutely impossible to settle doubts by the rules

The least transmission of rights and interests shall prevail.

When doubts refer to the incidental circumstances of onerous contracts and it is absolutely impossible to settle doubts by the rules

The doubt shall be settled in favor of the greatest reciprocity of interests.

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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 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] An instrument may be construed according to usage, in order to determine its true character. [Sec. 19] 10.

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their condition at the moment prior to the celebration of said contract. [Tolentino]

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 Voidable CONSENT of one of the (contrato nulo) parties is defective, either because of WANT OF CAPACITY or because it is VITIATED, but which contract is VALID until JUDICIALLY set aside. Unenforceable

Void Inexistent

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A contract that for some reason CANNOT BE ENFORCED, UNLESS RATIFIED in the manner PROVIDED BY LAW.

or A contract which is an ABSOLUTE NULLITY and produces NO EFFECT, as if it had never been executed or entered into.

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 Contracts

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 Page 310 of 532

of

Rescissible

1. The defect consists in injury or damage either to one of the contracting parties or 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].

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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 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]

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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 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.

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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 • • •

•

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 the contract, which did not essentially exist in the contract

Declares the inefficacy which the contract already carries in itself

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Private interest Direct influence of the alone governs public interest is involved May be compatible Based on a vice of the with the perfect contract which validity of the invalidates it contract A remedy

A sanction

Equity predominates

The predominates

law

May be demanded Can be demanded by third parties only by parties to the affected by the contract 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)]

Needs ratification to Requires an act of be effective ratification to be cured Page 313 of 532

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2. Confirmation is effected by the person who is entitled to do so under the law; 3. It is effected with knowledge of the vice or defect of the contract; 4. Cause of the nullity or defect 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 bring an action for annulment. [Art. 1395, CC] Effect of Ratification It extinguishes the action for annulment of a voidable contract. [Art. 1392, CC]

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]

b. Kinds of Unenforceable Contracts [Art. 1403, CC] 1. Unauthorized contracts – those entered into by one who has no authority or legal representation, 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]

It cleanses the contract from all its defects from the moment it was constituted. [Art. 1396, CC] LOSS OF THE THING Loss of thing by Plaintiff

Loss of thing by Defendant

If the loss of the object in his possession is due to his fault or fraud, the action for annulment of contracts shall be extinguished. He cannot ask for annulment. [Art. 14010, CC]

If it is lost through the defendant’s fault, he is liable for fruits received, value of the thing at the time it was lost, with interest from the same date. [Art. 1400, CC]

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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]

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SUMMARY OF UNENFORCEABLE CONTRACTS Contract entered Contracts covered by Statute Contract where both into without of Frauds parties are incapable of authority giving consent Effect on No effect unless ratified. Cannot be enforced by a proper action in court the Contract How assail

to Not by direct action. Not by direct action. As a defense, by motion to dismiss the complaint on the ground that the contract is unenforceable

Not by direct action.

As a defense, by motion to As a defense, by motion to dismiss on the ground that the dismiss the complaint on contract is unenforceable the ground that the contract is unenforceable Objection to the presentation of oral evidence to prove an oral contract [see Art. 1405]

Who can assail cannot be assailed by third persons [Art. 1408, CC]

By the person By the party against whom the whose name the contract is being enforced; or contract was his privies entered into / by owner of property

When

When a party asks the court to enforce the contract

How to Cure Ratification by Ratification by party against Defect person whose name whom the contract is being the contract was enforced entered into Failure to object to the presentation of oral evidence to prove the contract amounts to waiver [Art. 1405, CC]; makes it as binding as if written

4. Void or inexistent contracts

By the party against whom the contract is being enforced; or his privies; or parents or guardians, as it is a personal defense

Ratification of party against whom the contract is being enforced; or his privies; or parents or guardians The ratification by one party converts the contract into a voidable contract [Art. 1407, CC]

also those which are declared void by positive provision of law or statute.

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 Page 316 of 532

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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. 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 contract are present but the cause, object or purpose is contrary to law, morals, good customs, public order or public policy, or the contract itself is prohibited or declared void by law

Those where one or some or all of the requisites essential for the validity of a contract are absolutely lacking

Principle of pari Principle of pari delicto is applicable delicto is inapplicable May produce legal Cannot produce any effects effect Covers Art. 1409 Covers Art. 1409 (2) (1), (3), (4), (5), (6) and (3) and (7) Void vs. Voidable Contracts Void

Voidable

Those where one of the essential requisites is wanting, either in fact or in law, or is declared void by statute.

Those where all the essential requisites are present, but consent is vitiated by want of capacity, or by error, violence, intimidation, or deceit

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Void; no contract at Valid until annulled all May be indirectly

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assailed Must be assailed through an action for that purpose by a party to the contract, and never by a third person (direct attack)

General Rules Nullity proceeds from the illegality of the cause or object of the contract, and the act constitutes a criminal offense [Art. 1411, CC] 1. Parties shall have no cause of action against each other 2. Both parties shall be prosecuted. 3. Things or price of the contract which are considered as effects or instruments of a crime are forfeited in favor of the government.

Nullity may be set- Nullity may only be up against anyone set-up against a party who asserts a right thereto. arising from it. Not susceptible to May be validly ratified ratification Action to declare Action for annulment nullity does not prescribes prescribe [Art. 1410, CC]

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 pari delicto, non oritur actio) [Art. 1411, CC] 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." [Menchavez v. Tevez, G.R. No. 153201 (2005)].

The act in which the unlawful or forbidden cause consists does not constitute a criminal offense [Art. 1412, CC] When both When only one of the parties are contracting parties is at fault at fault Neither may recover what he has given by virtue of the contract, or demand the performanc e of the other's undertaking

Guilty Party

Innocent Party

1. He cannot recover what he has given by reason of the contract,

1. He may demand the return of what he has given

2. He cannot ask for the fulfillment of what has been promised him.

2. He is without any obligation to comply with his promise.

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 been caused to a third person. May allow

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3.

4.

5.

6.

7.

8.

9.

10.

OBLIGATIONS AND CONTRACTS

the repudiating party to recover money or property. [Art. 1414, CC] [See Hulst v. PR Builders Inc., G.R. No. 156364 (2007)] 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 yet been caused. [Art. 1415, CC] Agreement or contract not illegal per se but merely prohibited by law, and the prohibition is designed for the plaintiff’s protection. Plaintiff may recover as allowing recovery enhances public policy. [Art. 1416, CC] Note: When the assailed contracts are void ab initio, Art. 1416 cannot be applied, as in the case of aliens purchasing property despite 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)] Payment of any amount in excess of the maximum price of any article or commodity fixed by law [Art. 1417, CC] Contract whereby a laborer undertakes to work longer than the maximum number of hours fixed by law [Art. 1418, CC] Contract whereby a laborer accepts a wage 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] In case of divisible contracts, the legal portions/terms may be enforced separately from the illegal portions/terms [Art. 1420, CC]; and 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

CIVIL LAW

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 to the plaintiff’s economic interests as described in Articles 1380 and 1381.

As referred to in Article 1191, the action is based on the defendant’s breach of faith, a violation of the 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.

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SPECIAL CONTRACTS

Special Case If the sale involves the conjugal property of spouses, consent must be given by both.

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)]

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] • 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

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Sale of Things Having Potential Existence Emptio Rei Spei Emptio Rei Speratei Mere Hope Vain Hope Sale of a Sale of a Sale of a thing MERE HOPE VAIN HOPE expected or or or future thing expectancy expectancy General rule: Exception: Valid Valid Void Example: Example: Sale of the Example: Sale of a grain a field Sale of a valid fake lottery may grow in lottery ticket ticket a given time Deals with a future thing Deals with a thing that that is currently exists – the hope or currently not expectancy in existence Subject to Not subject to any condition; the condition The contract comes into that the thing existence immediately 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 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

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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.

Examples Of Obligations

Natural

1. Performance after prescription Art. 1424, CC. When a right to sue upon a civil obligation has lapsed by extinctive prescription, the obligor who voluntarily performs the contract cannot recover what he has delivered or the value of the service he has rendered. 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

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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 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

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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. 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)]

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3. Generally, the reasonable price is the market price at the time and place fixed by the contract or by law for delivery of goods. e. False price vs. simulated price False Price Simulated Price Price stated in the Price stated in the contract is not contract is not the intended to be paid. true price. Parties Parties never intended to be intended to be bound. bound. Effect: Void for lack Effect: Binds the of parties to their real cause/consideration, agreement when it but can be shown as does not prejudice a donation or some 3rd persons and is other contract. not intended for any Parties may recover purpose contrary to from each other law, morals, public what they may have policy, etc. 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 Separate and distinct consideration from the purchase price Given when sale is not yet perfected

Earnest Money Part of purchase price [Art. 1482, CC] Given only when there is already a sale

When given, the would-be-buyer is not When given, the required to buy, but buyer is bound to pay may even forfeit it the balance depending on the terms of the option Grantee of option is still undecided Buyer manifests his whether or not to buy earnest desire to buy or sell the property the property [Baviera] [Limson v. CA, G.R. No. 135929 (2001)]

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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 consumption or spending of the thing or money in good faith. Arts. 1426 and 1427, CC, distinguished Art. 1426

Art. 1427

Presupposes a prior No prior annulment annulment is involved Refers to any object

Refers to money or fungible things

Consumption in good Requires faith is not required consumption in good faith

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.

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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 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.

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Effect: The person cannot set up his own title as against the buyer or grantee.

E. LACHES

c. Title of the lessee or bailee against the lessor or bailor [Art. 1436, CC]. Requisites: a. There exists relationship

a

lessor-lessee

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].

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; 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 Concerned with the fact of delay effect of delay Question of inequity of Question or matter permitting the claim to of time be enforced Statutory Not statutory Applies in law Applies in equity Cannot be availed of unless it is Being a defense in specifically pleaded equity, it need not be as an affirmative specifically pleaded allegation Based on a fixed Not based on a fixed time time

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Contract of Sale Contract to sell Ownership is Ownership is only transferred upon transferred upon full delivery payment of price

A. SALES 1. General provisions 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 depends upon a contingency which may or may not happen.

Non-payment is a resolutory condition

Full payment is a positive suspensive condition; hence nonpayment would not give rise to the obligation to transfer ownership

Conditional Contract of Sale Sale is already perfected A subsequent buyer is presumed to be a buyer in bad faith

Contract to sell No perfected sale yet A subsequent buyer is presumed to be a buyer in good faith

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]

Article 1465, CC: Things subject to a resolutory condition may be the object of the contract of sale. Page 327 of 532

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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)]

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

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]

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)]

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 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)]

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 1.

4. Public officers and employees - Cannot acquire or purchase property of State/any of its subdivisions, GOCC or administration, the administration of which

Absolute incapacity

If both parties are incapacitated: unenforceable [Art. 1403 (3), CC].

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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.

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

(Note: Further discussion can also be found in Section J of this Sales Reviewer, on the Performance of the Contract.)

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 to common law spouses. [Calimlim-Canulas v. Fortun, G.R. No. L-57499 (1984)]

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]

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.

CIVIL LAW

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]

(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.

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 Page 335 of 532

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)]

U.P. LAW BOC

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o

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

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 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

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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. 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)]

CIVIL LAW

3. Generally, the reasonable price is the market price at the time and place fixed by the contract or by law for delivery of goods. e. False price vs. simulated price False Price Simulated Price Price stated in the Price stated in the contract is not contract is not the intended to be paid. true price. Parties Parties never intended to be intended to be bound. bound. Effect: Void for lack Effect: Binds the of parties to their real cause/consideration, agreement when it but can be shown as does not prejudice a donation or some 3rd persons and is other contract. not intended for any Parties may recover purpose contrary to from each other law, morals, public what they may have policy, etc. 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 Separate and distinct consideration from the purchase price Given when sale is not yet perfected

Earnest Money Part of purchase price [Art. 1482, CC] Given only when there is already a sale

When given, the would-be-buyer is not When given, the required to buy, but buyer is bound to pay may even forfeit it the balance depending on the terms of the option Grantee of option is still undecided Buyer manifests his whether or not to buy earnest desire to buy or sell the property the property [Baviera] [Limson v. CA, G.R. No. 135929 (2001)]

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ensues and both parties are then reciprocally bound to comply with their respective undertakings. [Ang Yu v. CA, G.R. No. 109125 (1994)]

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

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. 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].

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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.

CIVIL LAW

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 f.

Quasi-traditio

Mode of delivery of incorporeal things or rights.

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)]

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

d. Traditio Brevi Manu (Short Hand)

g. Delivery to a Common Carrier

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]

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.

Happens when the already has possession of the thing sold before the sale by virtue of another title (as lessee, borrower, depositary, etc.)

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.

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.

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Contract of sale distinguished

BARTER = where the value of the thing given as part of the consideration exceeds the amount of money given or its equivalent

1. Donation Sale Onerous

Donation Gratuitous Requires consent and must comply with the Perfected by mere formalities required by consent law for its validity. [Art. 745, CC] The property sold is replaced by the Requires that there be equivalent a diminution of the monetary estate of one party consideration; (donor) and the there is no enrichment of the other diminution of the party’s estate (donee) seller’s estate 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 power; otherwise, the donation shall be void. [Art. 745, CC] 2. Barter Sale Consideration is price in money 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 Goods are manufactured or procured in the ordinary course of business For the general market, whether on hand or not Governed by Statute of Frauds

is

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

Goods are manufactured for customer upon his special order For a customer

specific

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 No pre-existing debt

Barter Consideration another thing

Contract for a Piece of Work

Creates an obligation

Dacion en pago Pre-existing debt Extinguishes the obligation (mode of payment)

Price is more freely Price is the value of agreed upon, fixed by the thing given the parties Payment is received by the Buyer has to pay the debtor before price contract is perfected

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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 DEED OF SALE IN GOOD FAITH

OF

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)]

CIVIL LAW

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)] Annotation of Adverse Claim May be cancelled May be cancelled only in one even before the action instance, i.e., after is finally terminated the claim is for causes which may adjudged invalid or not be attributable to unmeritorious by the claimant the Court Lis Pendens

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-42956571988] 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

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5. Agency to sell Sale

Agency to sell Agent receives Buyer receives the good as goods of goods as owner the principal Agent delivers the Buyer pays the price price which he got from his principal Buyer cannot return Agent can’t return the object sold as a the goods general rule Seller warrants the thing sold Not unilaterally revocable

Agent makes warranty Essentially revocable

no

6. Lease Sale Lease Ownership No transfer of transferred by ownership delivery Permanent Temporary Seller must be Lessor need not be owner at time of 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.

CIVIL LAW

SPECIAL CONTRACTS

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. 14911492, 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] 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 settlement, OR • Judicial separation of property.

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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.

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

(Note: Further discussion can also be found in Section J of this Sales Reviewer, on the Performance of the Contract.)

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 to common law spouses. [Calimlim-Canulas v. Fortun, G.R. No. L-57499 (1984)]

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]

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.

CIVIL LAW

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]

(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.

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 Page 335 of 532

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)]

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b. Estoppel: Owner is, by his conduct, precluded from denying the seller’s authority to sell. [Art. 1434, CC]

b. c. d. e.

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]

CIVIL LAW

Contract to sell Contract of insurance Sale on acceptance/Trial 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. 14581459, 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.

ii. 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] iii. Manner of Transfer [Arts. 1477, 1496-150, CC]

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. iv. Concept of Delivery

General Rule: Ownership of the thing sold shall be transferred to the vendee upon actual or constructive delivery thereof [Art. 1477, CC]

Requisites a. Identity – between what must be delivered and what is actually delivered b. Integrity – in a condition suitable for enjoyment c. Intentional

Exceptions: a. Contrary stipulation

What to Deliver a. Thing sold [Art. 1495, CC] Page 336 of 532

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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; 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 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.

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

CIVIL LAW

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] 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

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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.

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.

CIVIL LAW

i. Obligation to pay interest 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 produces fruits or income; 3. If the vendee is in default, from the time of judicial or extrajudicial demand for payment [Art. 1589, CC]. ii. 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 or ownership of the thing bought; or 2. If he has reasonable grounds to fear such disturbance, by a vindicatory action or a foreclosure 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]

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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]

CIVIL LAW

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)] 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

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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)].

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.

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.

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]

Sale by Person Voidable Title

Having

a

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: • 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]

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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.

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.

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]. 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)]

CIVIL LAW

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

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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 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 May be cancelled even before the action is finally terminated for causes which may not be attributable to the claimant

Annotation of Adverse Claim May be cancelled only in one instance, i.e., after the claim is adjudged invalid or unmeritorious 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-42956571988]

CIVIL LAW

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) 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.

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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. 14581459, 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

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: 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.

When right to transfer ownership must exist At the time of delivery and not at the time of perfection of contract of sale.

The concept of delivery

CIVIL LAW

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

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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]

CIVIL LAW

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)] 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

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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.

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.

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]. 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)]

CIVIL LAW

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

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Res Perit domino [Arts. 1263, and 1189 CC] Owner bears risk of loss and deterioration. The ownership is transferred only upon delivery.

(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 did not exist at the time of the transaction.

Buyer may withdraw from the contract or Buy the remainder at a proportionate price

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]

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 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]

After Perfection Delivery

but

Before

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.

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 substantially changed in character, the buyer may at his option treat the sale: Page 351 of 532

This is an exception to the rule of res perit domino Basis: Art. 1504, CC only covers goods.

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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

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Warranty Goes into the Pertains to and performance of an affects the existence obligation and may, of the obligation in itself, be an obligation Non-happening does Non-fulfillment not amount to breach constitutes breach of contract of contract Stipulation or Must be stipulated operation of law Always relates to the May attach either to subject matter or the the seller’s duty to seller’s obligations deliver thing or some as to the subject other circumstance 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 Only seller is bound, Stipulated by parties, whether or not thereby binding both intended or known the seller and buyer by the parties.

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

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opportunity to know the facts, are not in themselves fraudulent.

Implied Warranties [Art. 1547, CC]

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.

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]

Express Warranty What is specifically represented as true in said document cannot be considered as mere dealer's talk. [Moles v. IAC, supra]

Dealer’s or Trader’s Talk Affirmation of the value of the thing or statement of only the seller’s opinion is not a warranty 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

Concealment of facts does not necessarily amount to false representation

False Representation When concealment of facts comes with an active misstatement of fact 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)]

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; 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)]

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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.

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.

In reciprocal obligations, the extinguishment of the obligation due to loss of the thing extinguishes the entire juridical relation.

SUMMARY OF RULES ON THE RISK OF LOSS Before Seller bears risk of loss or Perfection deterioration 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 Delivery deterioration Buyer also benefits from the fruits and improvements therein

Deterioration [Art. 1189 CC] Impairment is borne by the BUYER if the thing deteriorates without the fault of the seller. 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.

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;

7. Documents of Title In General

(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.

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,

General Rule: Buyer bears risk of loss and deterioration.

Bill of Lading – A document issued by the common carrier acknowledging receipt of

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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]

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

Effects of Waivers

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.

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

Only applicable to waiver of warranty against eviction; parties may increase 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

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 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

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A document of title refers to specific goods in the possession of the carrier 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 ○ 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.

•

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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 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

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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

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Warranty Goes into the Pertains to and performance of an affects the existence obligation and may, of the obligation in itself, be an obligation Non-happening does Non-fulfillment not amount to breach constitutes breach of contract of contract Stipulation or Must be stipulated operation of law Always relates to the May attach either to subject matter or the the seller’s duty to seller’s obligations deliver thing or some as to the subject other circumstance 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 Only seller is bound, Stipulated by parties, whether or not thereby binding both intended or known the seller and buyer by the parties.

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

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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 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. b. c. d.

Possessory lien; Stoppage in transitu; Special right of resale; and 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 transitu 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

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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

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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, 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

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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]

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

Effects of Waivers

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.

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

Only applicable to waiver of warranty against eviction; parties may increase 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

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 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

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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] 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]

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 REMEDIES

AND

EXCLUSIVE

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 restore. [Art. 1385, CC]

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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

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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 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.

RESCISSION FOR ANTICIPATORY BREACH [ART. 1591, CC] Note: This is applicable to both cash sales and sales in installments.

Buyer’s Remedy: At his option, he may reimburse the total amount paid including amortization interest with interest thereon at the legal rate.

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 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.

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

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

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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 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.

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 BUYER

OF

REMEDIES

OF

REMEDY Damages, Rescission, Price Movables through Specific Performance. Return or Offer to Return (with recovery of price or may become the seller’s bailee) Breach of Acceptance, for recoupment Warranty or with damages Refuse to Accept with Damages Rescission, Suspension of Payment, PD 957 (Reimbursement of the total Immovables amount paid/ compel the developer to complete facilities) Contract of Sale: Article Immovables 1592, CC on Contract to Sell: Maceda Law Installment (RA 6552)

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.

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IMPLIED WARRANTY AGAINST EVICTION [Arts. 1555, 1556, CC] Total Eviction Partial Eviction Enforce liability for eviction Enforce liability (demand Demand from seller: VICED) (VICED) OR a. Value of thing sold at Rescind within 6 time of eviction months from b. Income or fruits, if he delivery has been ordered to a. If he would deliver them to the not have party who won the bought the eviction suit thing sold c. Costs of eviction suit without the and in a proper case, part lost; suit against seller for b. BUT he must warranty return the d. Expenses of the thing without contract, if buyer has other paid them encumbranc e. Damages and es than interests, and those which ornamental it had when expenses, IF sale he acquired was made in bad it 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

CIVIL LAW

IMPLIED WARRANTY AGAINST ENCUMBRANCES [Art. 1560, 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 fortuitous event or fault of buyer Demand: If seller aware of a. Price paid defect, buyer may minus value demand: of thing a. Return of when it was price lost b. Refund of b. Damages, if expenses seller acted c. Damages in bad faith If seller not aware of defect: Buyer may demand price and expenses BUT NOT damages Due to hidden fault

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:

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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.

Remedies of the Seller QUICK SUMMARY SELLER

Prescriptive period: 40 days from delivery

Warranty in Sale of Consumer Goods If implied warranty accompanies express warranty, both will be of equal duration. [Sec. 68, RA 7394] Express Warranty a. Demand repair within 30 days; extendible for causes beyond the control of the warrantor b. Demand refund of price minus amount directly attributable to the use of the consumer prior to the discovery of the non-conformity

Implied Warranty a. Retain the goods and recover damages OR b. Reject the goods, cancel contract and recover from seller so much of the purchase price as has been paid + damages

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

Movables

Movables on Installment

Immovables

Immovables on Installment

OF

REMEDIES

OF

REMEDY Damages, Rescission, Price through Specific Performance. Special Remedies: Possessory lien, Stoppage in transitu, Resale, Rescission Exact fulfillment, Cancellation of the Sale, Foreclosure of Chattel Mortgage Price through Specific Performance, Rescission (for anticipatory breach and for non-payment) Contract of Sale: Rescission through Article 1592, CC 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 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].

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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.

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.

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.

CIVIL LAW

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.) 
 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. 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]

Exception: Unless it is otherwise stipulated. Where the contract calls for the delivery of goods at stated intervals which are to be

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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.

CIVIL LAW

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. 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 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

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

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 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.

How Right is Exercised [Art. 1532, CC] a. By obtaining actual possession of the goods

The right to resell the goods is not mandatory, but permissive.

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•

•

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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 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.

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 BUYER

OF

REMEDIES

OF

REMEDY Damages, Rescission, Price Movables through Specific Performance. Return or Offer to Return (with recovery of price or may become the seller’s bailee) Breach of Acceptance, for recoupment Warranty or with damages Refuse to Accept with Damages Rescission, Suspension of Payment, PD 957 (Reimbursement of the total Immovables amount paid/ compel the developer to complete facilities) Contract of Sale: Article Immovables 1592, CC on Contract to Sell: Maceda Law Installment (RA 6552)

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.

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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 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

CIVIL LAW

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. • 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

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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.

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.

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.

CIVIL LAW

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.) 
 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. 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]

Exception: Unless it is otherwise stipulated. Where the contract calls for the delivery of goods at stated intervals which are to be

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parties is for the transaction to secure a debt or other obligation.

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]

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.

3.

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. 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)] 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]

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.

By itself, no equitable mortgage under the ff. instances: 1. Mere tolerated possession 2. Mere delay in transferring title to the buyer

2.

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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 within 30 days

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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.

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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 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)]

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

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the reglementary period [Lee Chuy Realty v. CA, G.R. No. 104114 (1995)] 3. Period to redeem To whom granted

Period 30 days from notice ● In writing ● By the seller ● Of the actual execution and delivery of the deed of sale

Actual knowledge of the sale is immaterial, absent Co-owner any showing that [Art 1620, CC] the co-owner has been shown a copy Adjoining owner of of the deed of sale Rural Land through a written [Art 1621, CC] communication. [Doromal v. CA, Adjoining owner of G.R. No. L-36083 urban land (1975)] [Art. 1622, CC] The law did not provide for a particular mode of written notice, thus any compliance with “written 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 30 days from the credit or date the assignee incorporeal right in demands payment litigation is sold [Art. from debtor 1634, CC] Taxpayer in case of 1 year from date of tax sale [Sec. 215, forfeiture NIRC]

Judgment debtor, successor–ininterest, or creditor with subsequent lien, in case of execution sale [Sec. 27, Rule 39, ROC] Debtor-mortgagor, successors-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 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 of sale of landholding [Sec. 12, Agrarian Land Reform Code]

CIVIL LAW

1 year from the date of registration of the certificate of sale

1 year from the date of the sale

90 days from finality of judgment

2 years from the registration of the sale

The notice required in Art. 1623 must be given by the seller because the seller is in a better position to identify who his co-owners are. Said provision is clear. [Francisco v. Boiser, G.R. No. 137677 (2000)] 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.

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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)]. 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 Owner of any adjoining land has a right of pre-emption at a reasonable price when: a. Urban land is so small and so situated that a major portion of it cannot be used for any practical purpose w/in a reasonable time; b. Was bought merely for speculation; c. Was resold Arises before sale No rescission because no sale exists yet The action is directed against prospective seller

Right of Redemption

If the resale has been perfected, the owner of the adjoining land shall have a right of redemption, also at a reasonable price Priority if 2 or more adjoining owners want to redeem: owner whose intended use of the land appears to be best justified

Arises after sale There can be rescission of the original sale Action is directed against buyer

d. Redemption of Credit Available when it is sold while in litigation (From the time the complaint is answered)

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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 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 Execution Sales

CIVIL LAW

Foreclosure

and

Who may redeem In extra judicial In execution sales foreclosure • Judgment debtor ● Debtor • Successor in ● Successor in interest interest • Creditor having a ● Judicial or lien on the property judgment sold by attachment, creditor of said judgment or debtor mortgage on the ● Junior property encumbrancer subsequent to the judgment Period to redeem If land is mortgaged in Execution Extra-judicial favor of a bank: sale: foreclosure: within 1 year within 12 within 1 year after the sale months from the date (not available after the of the sale in case of a sale 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

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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

CIVIL LAW

TRUST AS DISTINGUISHED FROM OTHER CONCEPTS Stipulation pour Trust autrui Involves any Refers to a specific stipulation in favor property of a third person

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]

Trust Performance of trust is enforceable

Trust

Period: within 180 days from notice in writing Trustees has legal title to the property

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 Always involves ownership, embracing a set of rights and duties fiduciary in character, which may be created by a declaration without consideration

Trust The beneficiary of a trust has a beneficial interest in the trust property. There is a fiduciary relationship between a trustee and a beneficiary.

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Condition Performance accomplishment not enforceable

or is

Guardianship or Executorship Guardians or Executors do not have legal title but mere actual possession and limited powers over the property Contract A legal obligation based on an undertaking supported by a consideration, which obligation may or may not be fiduciary in character.

Debt A creditor has merely a personal claim against the debtor. There is no fiduciary relationship between a debtor and a creditor.

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Trust An express trust is not perfected by mere consent, but requires the actual delivery of the naked or legal title to the trustee for the relationship of legality to arise. Trustee in an express trust only takes naked or legal title and for the benefit of another person, the beneficiary. Constituted merely as a preparation, arrangement, medium, by which the trustee is expected to pursue other juridical acts for the benefit of the beneficiary. Trust Naked title is transferred to the trustee; full beneficial ownership is for the account of the beneficiary. Essence of the contract is for the trustee to manage the rust property as the legal title holder for benefit or interest of the beneficiary. Benefits enjoyed by the beneficiary are usually of a permanent nature. Trust An existing legal relationship which involves the separation of legal and equitable title

CIVIL LAW

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except in cases of gifts in the trust.

Sale Seller obliges himself to transfer ownership and deliver possession to the buyer

Buyer takes full ownership of the subject matter for his sole benefit.

Entered into for its own end, the acquiring of title of the subject matter by the buyer.

The beneficiary of a trust may demand performance of the obligation without having formally 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.

The donee must comply with the legal requirements in accepting donations.

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.

Lease 2. Parties [Art. 1440, CC] Lessor naked title.

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

retains

Essence of the contract is the enjoyment of the possession and use of the leased property. Benefits enjoyed by the lessee are only for a limited contracted period. Donation There is a transfer of property as well as the disposition of both legal and equitable ownership

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

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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. 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 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

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conveyance [Salao v. Salao, G.R. No. L26699 (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].

Express and Implied Trust Distinguished Express Trust Created by intention of trustor or parties. As to Creatio n

As to Proof

As to Prescri ption

As to Laches

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].

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the the the

Created by the direct and positive acts of the parties by some writing or deed or will or by words evidencing an intention to create a trust. An express trust over an immovable property or any interest therein cannot be proved by parol evidence

Action must be made within 10 years from knowledge of the repudiation, otherwise prescribed.

An express repudiation made known to the beneficiary is necessary in order that laches or acquisitive prescription may bar an action to enforce an express trust.

Implied Trust Comes into being by operation of law. Those, without being expressed, are deductible from the nature of the transaction by operation of law as matters of equity, independently of the particular intention of the parties. An implied trust may be proved by oral evidence In resulting trust: Action must be made within 10 years from knowledge of repudiation, otherwise prescribed. In constructive trust: It must be made within 10 years from date of registration. In constructive trusts, even if there is no repudiation, laches may bar an action to enforce an implied trust Exception: there concealment.

If is

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As to Suabilit y

Trustee can sue and be sued alone [PAL, Inc. v. Heald Lumber Co., G.R. No. L-11497 (1957)]

CIVIL LAW

SPECIAL CONTRACTS

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)]

Trustee cannot sue and be sued alone.

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 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

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

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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)]. Agency distinguished from other contracts Distinguishing Agency from Loan [De Leon (2010), 345-346] Agency Loan Principal gives funds Lender gives funds to agent to advance to borrower for principal’s own borrower’s own business purposes Does not carry with it Carries with it the the obligation to corresponding 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 Based on representation employment Agents generally Lessor (employee) exercises discretion only exercises ministerial acts Parties involved Parties involved are include agent, lessee (employer) principal, and third and lessor person (employee)

CIVIL LAW

Distinguishing Agency from Independent Contract [De Leon (2010), 349-352] Agency Independent Contract Agent may be Independent controlled and contractor is directed by the independent from principal the principal’s control and direction Generally, principal Generally, employer is liable for the is not liable for the agent’s acts independent contractor’s acts Distinguishing Agency from Partnership [De Leon (2010), 352-355; Art. 1767, CC] Agency Partnership Agent acts in Each partner is an representation of the agent of the principal, not vice partnership and his versa co-partners (i.e. contract of mutual agency) Unless acting Acting in outside the scope of representation of the authority, agent does partnership, a not incur personal partner binds liability himself, the partnership, and his co-partners [see Art. 1822] Agent is subject to Partners do not have the control of the the right to control principal co-partners Distinguishing Agency from Brokerage [Hahn v. CA, G.R. No. 113074, Jan. 22, 1997] Agency Brokerage “An agent receives a “[B]roker earns his commission upon pay merely by the successful bringing the buyer conclusion of a sale.” and the seller together, even if no sale is eventually made.”

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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 Seller transfers transfer ownership of ownership of the the goods to agent. goods Agent does not pay Buyer pays the price the price of the of a thing. goods to principal, but delivers the price he obtains from selling them to third persons Agent must return No obligation to the goods if the 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 Title passes to the representation of the trustee acting in his principal own name May be revoked any Terminated upon time [see fulfillment of purpose Extinguishment of of trust Agency]

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

CIVIL LAW

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]. 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 [Arts. 1881-1882] estoppel [Art. 1911] Actual or real No actual agency, agency. only the presence of an apparent authority Only the principal is Liability depends liable to third whether estoppel is persons. caused by the principal or the agent.

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A third party’s reliance in the representation is not necessary, since there is an actual agency.

SPECIAL CONTRACTS

A third party’s reliance in the representation is necessary to 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 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].

CIVIL LAW

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;

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o. Any other act of strict dominion. 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].

CIVIL LAW

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]

4. OTHER KINDS OF AGENCY OBLIGATIONS OF THE AGENT 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

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]. 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

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has had reasonable opportunity to take the necessary steps to meet the situation [Art. 1929, CC].

according to whether the agency was or was not for compensation [Art. 1909, CC]. LIABILITY FOR ACTS OF SUBSTITUTES

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; 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,

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]

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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 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. b.

Judicial – puts an end to a pending litigation 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

CIVIL LAW

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] 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]

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6. Effect on Criminal Action

3.

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

4.

5.

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: 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

6.

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intrusted to them, unless the consent of the principal has been given; Executors and administrators, the property of the estate under administration; 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; 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; 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

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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)] 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]

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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] 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.

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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 may ‘regard’ the compromise agreement already ‘rescinded’ [Sonley v. Anchor Savings Bank/ Equicom Savings Bank, G.R. No. 205623 (2016)]

E. LOAN 1. Loan Art. 1933, CC. By the contract of loan, one 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: Consensual perfected, not by mere Contract: consent, but by perfected by mere delivery of the object consent. 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

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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 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).

Commodatum v. Mutuum 1. Nature Commodatum

Mutuum Not purely Purely personal in personal in character [Art. 1939, CC] character 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 Loan for permissive or temporary use [Art.1935, CC]

Mutuum Loan for consumption

As to Object Commodatum GR: Involves nonconsumable movable or immovable property

CIVIL LAW

ii.

EX: Consumable goods may be the subject of commodatum if the purpose of the contract is NOT consumption of the object [Art. 1936, CC] (e.g., stamps for an exhibition)

Mutuum GR: Involves money or other consumable movable property Consumable cannot be used in a manner appropriate to their nature without their being consumed. [Art. 418, CC

iii.

As to Ownership of the Thing Loaned Commodatum Mutuum Retained by lender Transferred to the [Art.1933, CC] borrower iv. As to Consideration Commodatum Mutuum Essentially May be gratuitous or gratuitous onerous, i.e. with [Art.1933, CC] stipulated interest v.

As to Obligations of the Borrower Commodatum Mutuum Borrower must return the Borrower same thing loaned [Art. 1933, need only pay CC] an equal amount of the GR: Bailor CANNOT demand same kind the return of the thing until and quality after the expiration of the [Art. 1953, period stipulated or the CC] accomplishment of the use for which the contract was GR: Lender constituted [Art.1946, CC] may NOT demand the EX: Bailor may demand the return of the return of the thing loaned thing loaned before the expiration of the nor payment term: before the 1. In case of urgent need lapse of the [Art. 1946, CC] term agreed 2. If the commodatum is a upon precarium [Art. 1947, CC]

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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.

3. If the bailee commits any of the acts of ingratitude in Art. 765 [Art. 1948]

vi.

As to Liability for Loss Commodatum Mutuum Borrower suffers the loss even if Bailor suffers the loss of caused exclusively the subject matter since by a fortuitous he is the owner [Arts. event and he is not, 1942 and 1174, CC] 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]

Parties 1. Bailor: creditor 2. Bailee: debtor

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]

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]

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.

5. Pay for the ordinary expenses for the use and preservation of the thing loaned. [Art. 1941, CC]

Use by the Bailee Rules as to who may make use of the property loaned

6. Bear equally (with the bailor) the extraordinary expenses arising on the

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occasion of actual use of the thing by the bailee even though bailee acted without fault. [Art. 1949, CC]

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]

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]

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]

Obligations of the Bailor Exception: Contrary stipulation (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 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

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]

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]

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.

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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 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]

3. Simple Loan (mutuum) 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]

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 same kind. [Art. 1955, CC] 3. Pay Interest, if stipulated. [Art. 1956, CC]

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]

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].

Exception: The bailee has the right of retention for damages arising from hidden flaws. [Art. 1944, 1951, CC]

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)

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Obligations of the Creditor Barred from placing stipulations under any cloak or device that circumvent laws on usury [Art. 1957, CC].

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Rights of the Creditor

Conventional interest

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].

Simple interest – Paid for the principal at a certain rate fixed or stipulated by the parties.

4. Interests On Loan

Compound Interest – Interest which is imposed when interest due and unpaid is capitalized or added to the principal. [Art. 1959, CC]

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) 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]

Interest on interest

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 demand when there is no stipulation for payment of interest. [Art. 2212, CC]

Compensatory, penalty indemnity interest

or

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 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.

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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.

Finance Charges

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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]. “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;

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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.

b)

c)

d) 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]. 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

e)

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recovery, the creditor shall be liable for reasonable attorney's fees and court costs as determined by the court. 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. 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. No punishment or penalty provided by this Act shall apply to the Philippine Government or any agency or any political subdivision thereof. 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 Industry Regulation Law

Card

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 fees, penalties, and other charges which can be charged to the credit card;

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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.

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.

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 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.

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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] 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

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]

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]

Obligations of a Depositary (KRB)

Kinds Of Deposit 1. Extrajudicial i. Voluntary – obligation arises as a consequence of contract;

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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, where the thing may be [Art. 1987, CC].

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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]

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]

Note: The depositary must return the thing closed and sealed if it is delivered in that condition [Art. 1981, CC]

(CC-UR)

Authority of Depositary

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 Page 402 of 532

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]

Obligations of a Depositor 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.]

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Deposit by Travelers in Hotels and Inns

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].

Before keepers of hotels or inns may be held responsible as depositaries with 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]

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]

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]

Extent of Liability Art.1998, CC

Under

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.

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]

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]

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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]

Hotel-Keeper’s Retention

Right

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

The right of retention recognized in this article is in the nature of a pledge created by operation of law.

3. Judicial Deposit Sequestration

Or

Takes place when an attachment or seizure of property in litigation is ordered. [Arts. 20052009, CC] It is the only type of deposit that may involve immovable property.

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.

of

ended unless the court so orders. [Art. 2007, CC]

to

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].

Depositary Property

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Sequestered

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

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 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;

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3. And the Manager without special power [Art. 1647, CC]

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 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

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 Disqualified?

Qualified

or

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

CIVIL LAW

3. Obligations of Parties 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]

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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]

(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

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.

CIVIL LAW

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

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;

(9) To be liable for any deterioration caused by members of his household, guests or visitors [Art. 1668, CC]

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;

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.

(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.

General Rule: Payment shall be made in the place designated in the obligation.

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

4. Payment

Exception: There being no express stipulation and if the undertaking is to deliver a determinate thing, the payment shall be made where the thing might be at the moment the obligation was constituted. In any other case the place of payment shall be the domicile of the debtor.

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cease with respect to the new lease. [Art. 1672, CC]

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

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: ○ the lessee's appeal is frivolous or dilatory, or ○ 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

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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. Lack of payment Violation of any of the conditions in the contract 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. 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 existence of the lease.

CIVIL LAW

knows

of

the

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]

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●

10. Warranties General Rule: In a contract of sale, there is an implied warranty on the part of the seller that: 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 appears [Art. 1547, CC]

contrary

intention

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.

CIVIL LAW

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]

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.

Presumption of Good Condition [Art. 1666, CC]

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.

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

The contracting parties, however, may increase, diminish, or suppress this legal obligation of the vendor.

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

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Special Provisions on Lease of Rural Lands

the

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

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●

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]

○

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]

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]

Special Provisions for Lease of Urban Lands

the

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]

b. Duration of Lease if Not Fixed ●

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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; ○ The Outgoing Lessee; ○ To do whatever may be necessary for: 1. Gathering; or 2. Harvesting; and 3. Utilization; ○ Of the fruits;

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●

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iii.

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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]

QUASI-CONTRACTS

CIVIL LAW

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]

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 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

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]

(UNAUTHORIZED MANAGEMENT)

b. Liability in the management of the property

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.

Solidary liability 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:

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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]

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 have been derived. [Art. 2150, CC] The owner would still be liable, even if the owner did not derive any benefit and there was no imminent and manifest danger to the property or 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 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]

2. Obligations of the Owner of the Property or Business Although the management was not expressly ratified, the owner who enjoys the advantages of 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

of

B. SOLUTIO INDEBITI (UNDUE PAYMENT) 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 return it [Art. 2154, CC].

1. Requisites

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1. Something has been unduly delivered through mistake; and

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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 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]

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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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regulations concerning property, undertakes to do the necessary work, even over his objection, he shall be liable to pay the expenses. [Art. 2169, CC]

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 it appears 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]

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].

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]

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.

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When the government, upon the failure of any person to comply with health or safety Page 414 of 532

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)]

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LAND TITLES DEEDS CIVIL LAW

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CIVIL LAW

AND

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Estate An estate, strictly speaking, represents the nature, extent, degree, and quantity of a person’s interest in land.

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 Certificate of Title Title Lawful cause or ground of possessing that It is a mere which is ours. evidence of ownership; it is not That which constitutes the title to the land a just cause of itself [Castillo v. exclusive possession, Escutin, G.R. No. or which is the 171057 (2009). 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] 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

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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.

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f. 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 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]

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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 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

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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)

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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]

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 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,

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

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b. Administration Torrens System

LAND TITLES AND DEEDS

of

the

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: 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

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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 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

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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 title under 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 1. It is an elemental rule that a decree of registration bars all claims and rights which arose or may have existed prior

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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.

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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.

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)]

Exceptions: a. The grantor, 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

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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 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 BugalB’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

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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)]

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1. Concept and Registration of Agrarian Titles Agrarian lands Agrarian lands, otherwise called agricultural lands refer to land devoted to 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

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determining retention limits, the State shall respect the right of small land-owners. 3. Provide incentives for voluntary landsharing

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.

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 promulgation of the Decree. The total cost of the land, including interest at the rate of six (6) per centum per annum, shall be 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 governmentcontrolled corporations. 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

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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 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.

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Registration of Agrarian Lands Under PD No. 27, beneficiaries are issued certificates 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 of Deeds, 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 public domain, “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)].

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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 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.

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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 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

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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. L630, 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.

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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) 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. L31956]. 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)]

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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)] 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

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private corporations acquiring public agricultural lands will not apply. [RC Apostolic Administrator of Davao v. LRC, G.R. No. L8415 (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 NonFilipinos 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

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

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] Original Distinguished From Subsequent Original Subsequent Registration Registration When right of Any transaction ownership or title to affecting such land is for the first originally registered time made of public land, if in order, may record be registered in the

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

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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.

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

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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 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]

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2. Registration Process Requirements

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 8. Original muniments of title, and 9. If the land is bounded by a public or private way or road [Sec. 15, PD 1529]

and

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 Lands [Sec. 1858, Administrative Code]

c.

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 by the applicant. 5. Assessed value of the land and the buildings and improvements thereon;

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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

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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 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.

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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 the land involved, and invite them to take part in the

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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;

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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 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

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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 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

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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

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2.

3.

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discussed in Santiago v. SBMA, G.R. No. 156888, (2006)] 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)] Other proofs such as testimonial evidence

c. Applicable procedural law: 1. Reception of evidence is governed by PD 1529 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

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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 sufficient title proper for registration. [Sec. 29, PD 1529]

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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.

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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. ● 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, and also, 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.

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] Page 434 of 532

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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.

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 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]

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

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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 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

CIVIL LAW

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. L45648 (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 2. The fraud must consist in an intentional omission of fact required by law to be stated in the application or a wilful 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

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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]

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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. L59731 (1990)]

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)]

An ordinary action for damages prescribes in 10 years after the issuance of the Torrens title over the property.

Quieting of Title Quieting of title is the remedy for the removal of any cloud of doubt or uncertainty with respect to real property.

Annulment of Judgment or Final Orders and Resolutions A judgment of annulment shall set aside a questioned judgment or final order or resolution

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]

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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 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.

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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 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

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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 Cadastral Registration Registration Voluntary Applicant is a person claiming title to the land Usually involves private land; it may also refer to public agricultural 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 his title and seek registration of the land in his name

If the applicant fails to prove his title, application may be dismissed without prejudice. [Santiago v. Santos, G.R. No. 31568, March 19, 1930; Verzosa v. Nicolas, G.R. No. 9227, February 10, 1915] If the judgment determines ownership, then it is res judicata upon the parties.

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PROCEDURE IN CADASTRAL REGISTRATION (Sec. 35 and 36, PD 1529) STEP 1: Determination of the President that public interest requires title to unregistered lands be settled and adjudicated.

Compulsory

President then orders the Director of Lands to conduct a cadastral survey.

Applicant is the Director of Lands

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.

All classes of land are covered (private and public alienable lands)

Government asks the court to settle and adjudicate the title of the land In cadastral registration, if the applicant cannot prove that he is entitled to the land, the land becomes public land. However, the cadastral case decision does not constitute res judicata as to bar even the same claimant from subsequently filing 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]

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.

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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 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)]

CIVIL LAW

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)] 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)]

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Voluntary Dealings Involuntary Dealings Voluntary Dealings Refer to deeds, instruments, or documents which are results of the free and voluntary acts of the parties thereto.

LAND TITLES AND DEEDS

Compared

to

Involuntary Dealings Refer to the writs, orders, or processes 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.

1. Sale 2. Real property mortgage 3. Lease 4. Pacto de retro sale 5. Extra-judicial settlement 6. Free patent/homeste ad 7. Powers of attorney 8. Trusts

1. Attachment 2. Mandamus 3. Sale on execution of judgment or sales for taxes 4. Adverse claims 5. Notice of lis pendens 6. Expropriation 7. Forfeiture 8. Auction sale on foreclosure of mortgage

Presentation of the owner’s duplicate certificate of title is required to notify; mere entry in the day book of the Register of Deeds (ROD) is insufficient

Entry in the day book of ROD is sufficient notice to all persons

An innocent purchaser for value of registered land becomes the registered owner the moment he presents and files a duly notarized and valid deed of sale and the same is entered in the day book of the ROD and at the same time he surrenders or presents the owner’s duplicate certificate of title covering the land sold and pays the registration fees. Villasor v. Camon, R-C.A. No. 8551 (1951): It is necessary to register the deed or instrument in the entry book of the ROD and a memorandum thereof shall also be made in the owner’s duplicate certificate and its original Sps. Labayen v. Serafica, G.R. No. 178443 (2008): At the time of the filing of the petition for cancellation of encumbrance, the lease contract already lost its efficacy. Thus, there is no basis to save its annotation on defendant’s title. The fact that the cancellation of the lease contract was forged is of no moment, for there

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Saberon v. Ventanilla, Jr., G.R. No. 192669 (2014): Entry thereof in the day book of the ROD is sufficient notice to all persons even if the owner’s duplicate certificate of title is not presented to the ROD.

Director of Lands v. Reyes, G.R. No. L27594 (1976): Entry in the day book of the ROD is sufficient notice to all persons of an adverse claim without the same being annotated at the back of the certificate of title

Armed Forces and Police Mutual Benefit Association, Inc. v. Santiago, G.R. No. 147559 (2008): Entry of the attachment in the books is sufficient notice to all persons. Hence, the fact that the deed of sale was already annotated is of no moment with regard to third persons. The preference created by the levy on attachment is not diminished by the

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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 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

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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

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2.

3.

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discussed in Santiago v. SBMA, G.R. No. 156888, (2006)] 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)] Other proofs such as testimonial evidence

c. Applicable procedural law: 1. Reception of evidence is governed by PD 1529 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 sufficient title proper for registration. [Sec. 29, PD 1529]

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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.

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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. ● 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, and also, 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.

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] Page 434 of 532

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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.

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 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]

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

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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 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

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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. L45648 (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 2. The fraud must consist in an intentional omission of fact required by law to be stated in the application or a wilful 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

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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]

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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. L59731 (1990)]

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)]

An ordinary action for damages prescribes in 10 years after the issuance of the Torrens title over the property.

Quieting of Title Quieting of title is the remedy for the removal of any cloud of doubt or uncertainty with respect to real property.

Annulment of Judgment or Final Orders and Resolutions A judgment of annulment shall set aside a questioned judgment or final order or resolution

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]

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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 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.

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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 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

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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 Cadastral Registration Registration Voluntary Applicant is a person claiming title to the land Usually involves private land; it may also refer to public agricultural 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 his title and seek registration of the land in his name

If the applicant fails to prove his title, application may be dismissed without prejudice. [Santiago v. Santos, G.R. No. 31568, March 19, 1930; Verzosa v. Nicolas, G.R. No. 9227, February 10, 1915] If the judgment determines ownership, then it is res judicata upon the parties.

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PROCEDURE IN CADASTRAL REGISTRATION (Sec. 35 and 36, PD 1529) STEP 1: Determination of the President that public interest requires title to unregistered lands be settled and adjudicated.

Compulsory

President then orders the Director of Lands to conduct a cadastral survey.

Applicant is the Director of Lands

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.

All classes of land are covered (private and public alienable lands)

Government asks the court to settle and adjudicate the title of the land In cadastral registration, if the applicant cannot prove that he is entitled to the land, the land becomes public land. However, the cadastral case decision does not constitute res judicata as to bar even the same claimant from subsequently filing 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]

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.

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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 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)]

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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)] 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)]

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Voluntary Dealings Involuntary Dealings Voluntary Dealings Refer to deeds, instruments, or documents which are results of the free and voluntary acts of the parties thereto.

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Compared

to

Involuntary Dealings Refer to the writs, orders, or processes 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.

1. Sale 2. Real property mortgage 3. Lease 4. Pacto de retro sale 5. Extra-judicial settlement 6. Free patent/homeste ad 7. Powers of attorney 8. Trusts

1. Attachment 2. Mandamus 3. Sale on execution of judgment or sales for taxes 4. Adverse claims 5. Notice of lis pendens 6. Expropriation 7. Forfeiture 8. Auction sale on foreclosure of mortgage

Presentation of the owner’s duplicate certificate of title is required to notify; mere entry in the day book of the Register of Deeds (ROD) is insufficient

Entry in the day book of ROD is sufficient notice to all persons

An innocent purchaser for value of registered land becomes the registered owner the moment he presents and files a duly notarized and valid deed of sale and the same is entered in the day book of the ROD and at the same time he surrenders or presents the owner’s duplicate certificate of title covering the land sold and pays the registration fees. Villasor v. Camon, R-C.A. No. 8551 (1951): It is necessary to register the deed or instrument in the entry book of the ROD and a memorandum thereof shall also be made in the owner’s duplicate certificate and its original Sps. Labayen v. Serafica, G.R. No. 178443 (2008): At the time of the filing of the petition for cancellation of encumbrance, the lease contract already lost its efficacy. Thus, there is no basis to save its annotation on defendant’s title. The fact that the cancellation of the lease contract was forged is of no moment, for there

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Saberon v. Ventanilla, Jr., G.R. No. 192669 (2014): Entry thereof in the day book of the ROD is sufficient notice to all persons even if the owner’s duplicate certificate of title is not presented to the ROD.

Director of Lands v. Reyes, G.R. No. L27594 (1976): Entry in the day book of the ROD is sufficient notice to all persons of an adverse claim without the same being annotated at the back of the certificate of title

Armed Forces and Police Mutual Benefit Association, Inc. v. Santiago, G.R. No. 147559 (2008): Entry of the attachment in the books is sufficient notice to all persons. Hence, the fact that the deed of sale was already annotated is of no moment with regard to third persons. The preference created by the levy on attachment is not diminished by the

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2. Which is exercised in bad faith; 3. For the sole intent of prejudicing or injuring another.

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

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)].

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; Page 452 of 532

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CASE Velayo v. Shell (1959)

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LEGAL RIGHT AND INJURY Right to transfer credit.

DOCTRINE The standards in NCC 19 are implemented by NCC 21.

The transfer of credit from Shell Philippines to Shell USA was deemed a violation of 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 employee.

When a right is exercised in a manner which does not conform with the norms The dismissal itself was not illegal but it in NCC 19, and results in damage to was the manner of dismissal which was another, a legal wrong is thereby deemed in violation of Article 19, as committed. The law, therefore, such was based on unfounded recognizes a primordial limitation on all accusations of dishonesty. rights.

University of the The conscious indifference of the school East v. Jader in not informing its student that he could (2000) not graduate formed the basis for the award of damages.

The conscious indifference of a person to the rights or welfare of the others who may be affected by his act or omission can support a claim for damages.

Amonoy v. Right to demolish another’s house on Gutierrez (2001) his own property.

The principle of damnum absque injuria does not apply when the exercise of the legal right is suspended or extinguished Amonoy obtained a judgment in his pursuant to a court order. The exercise favor for Gutierrez to vacate. A of a right ends when the right demolition order was issued but the disappears, and it disappears when it is court suspended it with a TRO. Amonoy abused, especially to the prejudice of proceeded with the demolition. In a others. complaint for damages, he claims the principle of damnum absque injuria.

Right to forbid uninvited guests from entering the party.

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Article 19, known to contain what is commonly referred to as the principle of

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Nikko Hotel Ruby Lim’s throwing out of complainant Manila Garden Reyes, as a gatecrasher in a private v. Reyes (2005) party, was merely in exercise of her duties as Executive Secretary of the hotel where the party was held, and did not constitute a violation of 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.

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abuse of rights, is not a panacea for all human hurts and social grievances. The object of this article is to set certain standards which must be observed not only in the exercise of one’s rights but also in the performance of one’s duties.

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. 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

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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.

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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]. 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.

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

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

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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)] 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 the promise 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

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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 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;

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3. That in bringing the action, the prosecutor acted without probable cause 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].

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)].

The presence of probable cause signifies as a legal consequence the absence of malice [Que v. IAC, G.R. No. 66865 (1989].

B. CLASSIFICATION OF TORTS

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)].

1. According to Commission

Manner

of

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].

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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.

which consists in a failure to observe the requisite due care given circumstance.

How is intent proved? 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.

2. According to Scope

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

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

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 Rights) , Art. 20 (Acts Contrary to Law), Art. 21 (Acts contrary to morals), and Art. 26 (Violation of Human Dignity). b. Strict Liability Tort

Harmful consequences The act or omission are substantially certain merely creates a to occur or are intended foreseeable risk or harm, which may or may not actually be realized

This refers to instances where negligence is not required to be proven to incur liability; and diligence is not a defense.

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,

[See H. Special Liability in Particular Activities; I. Strict Liability.]

This includes Articles 1711, 1723, 2183, 2187, 2189-2193

c. Independent Civil Actions Civil Code provisions on independent civil actions include Articles 32-35.

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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]

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.

C. THE TORTFEASOR

xxx

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 consists in the payment of damages for the injury suffered.

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

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over the direct tortfeasor. These persons become liable for 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 Liable: Parents Guardians

Owners and managers of an establishment or enterprise Employers

State Teachers of heads of establishments of arts and trade

For Damages Caused By: Minor children who live in their company Minors or incapacitated children who are under their authority and live in their company Employees in the service of the branches in which the latter are employed or on the occasion of their functions Employees and household helpers acting within the scope of their assigned tasks; even though the former are not engaged in any business or industry Special agents Pupils and students or apprentices, so long as they remain in their custody

a. Persons Exercising Authority

Parental

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

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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.

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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)]

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“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

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. 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.

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. 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.

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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.

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 Arts and InstituAcademic trades, tion institutions establishments

Custody

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)]

Head of establishment

Required Heads of academic Heads of institutions establishments exercise only of arts and administrative trades have authority over apprentices, the students, who they are in and are not in close proximity close proximity to. to them.

Rationale

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)]

Teacher in charge; not administrator

Liable

Under the Family Code School, Parents, Administrators, Guardians, Teachers, etc. etc. Provided by

Art. 218

Art. 219

Kind of authority required

Special parental authority

Parental authority or substitute parental authority

Liability if tort is committed in school

Principal solidary

Subsidiary

and

Students covered ARTS. 218-219

ART. 2180

All students, even those no Minor students longer minors, as long as they only remain in the custody of the persons responsible

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c. Owners, Managers Establishments, Employers

of

Art. 2180 (4), FC. The owners and managers of an es ablis t h ment or enterpris e are lik w e is e res p onsible for damages c u as d e by their employ es in the s rev ci eof the branches in whic h the latter are employ d e or on the oc cs aon i of their func ions t . 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

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The basis of his liability is not his employee’s negligence, but his own negligence in hiring and supervising the employee.

The amount for which he is liable may be pursued without having to Primary exhaust the employee’s assets, as opposed to subsidiary liability under the RPC. He may recover the full amount of the liability from his employee, as Solidary 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

There is only a Master is absolutely presumption of liable to servant’s act negligence on the part or omission of the employer No defense negligence

of Defense of negligence available

Embodied in the subsidiary liability under RPC – no defense of diligence; only lack of criminal liability

Embodied in primary liability under Art. 2180, where the defense of diligence is available

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 they are 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

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a. Formulation of standard operating procedures, suitable rules and 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 of the registered owner is subject to his right of recourse against the transferee or buyer.

1. Owners and Establishment 2180(4))

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Managers of an or Enterprise (Art.

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 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)]

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d. The State

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pertain to his office [Merritt v. Government of the Philippine Islands, G.R. No. 11154 (1960)].

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 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

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 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)]

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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)]

Two Definitions 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)]

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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.

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Differentiated causes

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from

other

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 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

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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. L65295 (1987)]. Efficient Intervening Cause 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

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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. L65295 (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 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 the carrier 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:

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1. Right of action for a legal wrong inflicted by the defendant 2. Damage resulting to the plaintiff therefrom

3. Violation of right or legal injury

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

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)]

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 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)]

4. Classes of injury 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 some duty and the imposition of liability for that breach before damages may be awarded; it is not sufficient to state that there should be tort liability merely because the plaintiff suffered some pain and suffering. [Custodio v. CA, supra]

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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 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

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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 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)].

1. General 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.]

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)

Requirements [Carpio, Antonio T., Intentional Torts in Philippine Law, 47 PHIL L. J. 649, 651662 (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.]

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c. Contra bonus mores

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e. Rights under Art. 26, CC

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.

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.

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 limit of his liability. The plaintiff has the burden of proving the extent of the benefit or enrichment of the defendant. [Tolentino]

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:

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General rule: malice on the part of the defendant need not be proved by the plaintiff. 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. 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

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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].

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

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[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. L14986 (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:

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(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 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

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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. 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)].

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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 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].

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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. L19671(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.

ii.

iii.

iv.

Such distinction between the liability of parents and that of strangers is only with regard to what will justify interference. 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. 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… 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)].

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].

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4. Enticement

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his friends [Carpio, Antonio T., Intentional Torts in Philippine Law, supra].

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 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 (3) Intriguing to cause another to be alienated 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 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

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 is without 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

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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 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

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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 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

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

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

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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 holding himself out to the public as possessing the degree of skill commonly possessed by others in the

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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

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exposed to the danger flowing from the substitution of deadly poisons for harmless medicine” [US v. Pineda, G.R. No. L-12858 (1918)].

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and experience under the same or similar circumstances [Ylarde v. Aquino, G.R. No. L33722 (1988)]. b. Emergency rule

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 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)].

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

“Age brackets” standard No contributory negligence can be imputed to children below 9 years old [Jarco Marketing v. CA, G.R. No. 129792 (1999)].

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 claim or defense by the amount of evidence required by law.

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

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

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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 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.

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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

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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. L12634 (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)]. 2. Liability of the driver

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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)]. 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].

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.

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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.

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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 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

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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]. 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

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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 scientific knowledge, expert testimony is usually necessary to support the conclusion as to causation [Cruz v. CA, supra].

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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 Damage under Art. 2180, CC.

the

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

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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. 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

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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 Proximate Cause

is

the

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)].

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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 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. 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

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

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4. The obligor must be free from any participation in the aggravation of the injury resulting to the creditor.

h. Plaintiff’s Assumption Risk/Volenti Non Fit Unjuria

of

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

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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. 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

Art. 1146, CC. The following actions must be instituted within four years:

[See G.3.b. Emergency Rule.]

(1) Upon an injury to the rights of the plaintiff; (2) Upon a quasi-delict;

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H. SPECIAL LIABILITY IN PARTICULAR ACTIVITIES

1. In general; concept 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 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 Whether it was unreasonable for the defendant to act as he did in view of the threatened danger or harm to one in plaintiff’s position.

NEGLIGENCE Whether the defendant’s use of his property was unreasonable as to the plaintiff, without regard to foreseeability of injury.

Liability is for the Liability is based on resulting injury to a want of proper others regardless of care the degree of care or

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skill exercised to avoid such injury Principles ordinarily apply where the cause of action is for continuing harm caused by continuing or recurrent acts which cause discomfort or annoyance to plaintiff in the use of his property.

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at all times the free use by the public of the said properties. Principles ordinarily apply where the cause of action is for harm resulting from one act which created an unreasonable risk of injury.

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.

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.

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.

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.

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.

Criminal prosecution is only for a public nuisance, not a private one. Public nuisances are offenses against the State.

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

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

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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 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. 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 nuisances

to

action

on

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.

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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.

4. Impossibility of abatement

Definition

Remedies

Who may institute the complaint

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.

3. Non-existence of the nuisance

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 Criminal prosecution, civil action (abatement, damages, injunction), extrajudicial abatement City or municipal mayor, private person (only if the nuisance is especially injurious to him)

CIVIL LAW

PRIVATE NUISANCE

Affects the individual or a number of individuals only

Civil action (abatement, damages, injunction), extrajudicial abatement

Any private person injured by the nuisance

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

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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 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]

CIVIL LAW

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 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.

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 Page 491 of 532

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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 municipalities

and

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 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

CIVIL LAW

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 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. L12634 (1959)].

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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) Relations hip of Owner & Driver Car owner’s presence Presumpt ion of negligenc e

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TORTS AND DAMAGES

Employeremployee

Not required at the time of the mishap. On owner’s part, when his driver is negligent

ART. 2184 Need not establish Employeremployee relationship Required at the time of the mishap On driver’s part, when he has been found guilty of reckless

Defense

Owner’s liability

Good father of a family in employment and supervision

Primary—He may recover the full amount from the driver, as per Art. 2181

driving/violatin g traffic violations at least twice within the next preceding 2 months Due diligence to prevent mishap (greatly subjective) Solidary—The full amount may be pursued against him, but he may only recover the pro rata share as to the amount for which he is liable

8. Proprietor of building structure or thing

or

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;

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(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. 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)]. Liability of Engineer collapsed building

or

architect

of

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.

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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.

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.

CIVIL LAW

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 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

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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 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;

CIVIL LAW

(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 AntiMoney Laundering Act and other applicable laws; and (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;

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(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

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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 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.

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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 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.

CIVIL LAW

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.

5. Right to damages The individual may claim compensation if they suffered damages due to inaccurate, Page 498 of 532

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PERSONS WITH SPECIAL LIABILITY

LIABLE FOR

DEFENSES OR EXCEPTIONS

Manufacturers and processors of Death and injuries caused by any Absence of contractual relation not foodstuffs, drinks, noxious or harmful substances a defense toilet articles and used similar goods Owner/creator of and successive owner/possessor who fails or refuses to abate a nuisance

Resulting injury to another Liability attaches regardless of the (material annoyance, degree of care or skill exercised to inconvenience, discomfort or hurt) avoid such injury because of the nuisance

Public officer or employee or private Damages for impairment of rights individual who violates and liberties rights under Art. 32, CC The death or injuries suffered by any person by reason of the The defective public work is not Provinces, Cities and defective condition of roads, under the LGU’s control or Municipalities streets, bridges, public buildings, supervision and other public works !

Owner Vehicle

of

Motor

Motor vehicle mishaps !

Proprietor of building/ structure

Solidary liability only if the owner was in the vehicle and if he could have prevented it thru due diligence If not in vehicle, apply Art. 2180 for his liability as employer

a. Total or partial collapse of building or structure if due to lack of necessary repairs b. Explosion of machinery which has not been taken cared of with due diligence, and the Responsibility for collapse should inflammation of explosive be due to the lack of necessary substances which have repairs 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

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CIVIL LAW

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 Architect

If within 15 years from completion of the structure, the same should collapse by reason of: a. Defects in the plans or specifications; or b. Defects in the ground. If within the same period, the edifice falls on account of: Action not brought within 10 years a. Defects in the from collapse 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. If within 15 years from the completion of the structure, the edifice falls on account of: a. Defects in the Action not brought within 10 years construction; from collapse b. Used of materials of inferior quality furnished by him; or c. Violation of the terms of the contract

Contractor

Head of the Family that Liable for damages caused by lives in a building or things thrown or falling from the any part thereof same

Violators privacy

of

Collection, processing and storage of personal information and sensitive personal data information. Specifically: a. Unauthorized Processing b. Accessing due to Negligence c. Improper Disposal

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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 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. Attractive 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

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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. L4977 (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 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.

CIVIL LAW

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 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

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regulations shall be deemed mislabeled hazardous substance.

responsibility in the cause of the damage effected.

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.

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.

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

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:

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(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: 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;

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(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.

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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.

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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 Exemplary or corrective

violations:

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.

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)].

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;

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Nominal; Temperate or moderate; Liquidated; or Exemplary or corrective.

Actual and Damages

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 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)].

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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 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.

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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 ● If the obligor acted in GOOD FAITH, he shall be liable for all natural and probable consequences of the breach, which the Contracts parties have foreseen Art. and or could have 2201 Quasireasonably foreseen contracts at the time the obligation was constituted. ● If the obligor acted with FRAUD, BAD FAITH, MALICE or WANTON

Art. 2202

Crimes and Quasidelicts

ATTITUDE, he shall be responsible for all damages which may be reasonably attributed to the breach or nonperformance. ● Liability extends to all damages which are the natural and probable consequence of the act or omission complained of. ● WON the damage was foreseen or could have been reasonably foreseen by the defendant is irrelevant.

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 c notrac st , quas - i c notrac st ,and quas -delic i st ,the c uort may equitably mitigate the damages under c rcums i anc t se other than the c sa ereferred to in the prec deing artic e,l as in the following ins anc t se: 1. That the plaintiff himself has contravened the terms of the contract; 2. That the plaintiff has derived some benefit as a result of the contract;

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3.

4. 5.

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In cases where exemplary damages are to be awarded, that the defendant acted upon the advice of counsel; That the loss would have resulted in any event; That since the filing of the action, the defendant has done his best to lessen the plaintiff's loss or injury.

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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.

The damages recoverable upon breach of contract are, primarily, the ordinary, natural and necessary damages resulting from the breach.

In cases of crimes, damages are to be increased or decreased according to aggravating or mitigating circumstances present.

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)].

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.

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 Zalamea v. CA, G.R. No. 104235 (1993)].

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

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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)]. 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 = victim at the time of death)

× (80 – age of

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)].

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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; 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.

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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 judgment for attorney's fees by execution [Quirante v. IAC, G.R. No. 73886 (1989)].

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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.

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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 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 a. That In the absence of due which a stipulated

may have been stipulated in writing, provided it is not excessiv e or unconsci onable

reckoning date, shall be computed from default, (i.e., from 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 stipulatio n, the rate of interest, it shall be 6% per annum (legal interest)

From EXTRAJUDICIAL OR JUDICIAL DEMAND in accordance with Art. 1169 of the Civil Code, UNTIL FULL PAYMENT, without compounding any interest unless compounded interest is expressly stipulated by law or regulation. From the time of JUDICIAL DEMAND UNTIL FULL PAYMENT

Interest Legal due on the interest principal (6%) amount accruing as of judicial demand shall SEPARAT ELY earn LEGAL INTEREST

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No legal interest will be added after the judgement becomes final and executory 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 Legal From the time the demand is interest claim is made establishe (6%) EXTRAJUDICIAL d with LY OR reasonable JUDICIALLY until certainty FULL PAYMENT When Legal From the date of demand is interest the NOT (6%) JUDGMENT OF establishe THE TRIAL d with COURT (at which reasonable time the certainty) 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 executory 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 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.

Moral Damages 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

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vexation [Bagumbayan Corp. v. IAC, G.R. No. L-66274 (1984)]. 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

5.

6.

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)]:

7.

8.

9.

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 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

10.

11.

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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. 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. 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. 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)]. 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)]. 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)]. 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. L20081 (1968)] An appeal in a criminal case opens the whole case for review and this 'includes the review of the penalty, indemnity and damages’. Even if the offended party had not appealed from said award, and the only party who sought a review of the decision

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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

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mentioned in No. 9 of this article, in the order named. 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

Anent the award of damages, civil indemnity ex delicto is mandatory upon finding of the fact of

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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.

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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 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)].

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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,

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albeit done in bad faith or in violation of the "abuse of right" doctrine. 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;

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(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 mat be proved by a preponderance of evidence.

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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 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 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

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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.

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)].

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.

ii. Who may Recover Moral Damages

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)]. 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,

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 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].

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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)].

Nominal Damages 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. i. When Nominal Recoverable

Damages

are

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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)].

Art. 2221, CC. Nominal damages are adjudicated in order that a right of the Page 519 of 532

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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 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)].

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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. L41093, (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.

Temperate Damages 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 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.

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i. When Temperate Recoverable

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Damages

1. Nature of the case determination of actual loss

are

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actual and temperate damages as they cover two distinct phases [Ramos v. CA, G.R. No. 124354 (1999)].

prevents ii. Factors in determining amount

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 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

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 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)].

Liquidated Damages Art. 2226, CC. Liquidated damages are those agreed upon by the parties to a contract, to be paid in case of breach thereof.

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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. 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 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)].

Exemplary Damages

or

Corrective

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;

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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 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 Recoverable ARISING FROM Art. 2230

Crimes

Art. 2231

Quasidelicts

Art. 2232

Contracts and Quasicontracts

Damages

are

WHEN EXEMPLARY DAMAGES ARE GRANTED The crime was committed with an aggravating circumstance/s Defendant acted with gross negligence Defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner

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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 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)].

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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 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.

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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 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;

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3. The act must be accompanied by bad faith or done in a wanton, fraudulent, oppressive or malevolent manner.

accomplice [People v. Halil Gambao, G.R. No. 172707 (2013)]. Miscellaneous Rules

3. When damages recovered

may

be

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 wrong [Custodio v. CA, supra]. Injury vs. Damage vs. Damages [from Custodio] INJURY DAMAGE DAMAGES The The loss, The illegal recompense or hurt, or harm, invasion compensation which results of a legal awarded for from the right the damage injury 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

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)]. 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.

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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

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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; 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

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benefit of the injured party. [People v. Bartolini, G.R. No. 179498 (2010)].

not be charged with these expenses. [Lasam v. Smith, G.R. No. L-19495 (1924)]

C. GRADUATION OF DAMAGES

Principle: A party cannot recover damages flowing from consequences which the party could have reasonably avoided.

2. Rules

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 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

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 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,

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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.

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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 Consummat Frustrated Attempted ed 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 imposed is death but was ₱100,000.00 ₱75,000.00 ₱50,000.00 reduced to reclusion perpetua because of RA 9346 2. Where the penalty imposed is reclusion ₱75,000.00 ₱50,000.00 ₱25,000.00 perpetua, other than the above-mentioned: II. For Simple Rape/Qualified Rape: 1. Where the penalty imposed is Death but was ₱100,000.00 ----------------- ₱50,000.00 reduced to reclusion perpetua because of RA 9346 2. Where the penalty imposed is reclusion ₱75,000.00 ----------------- ₱25,000.00 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 Page 528 of 532

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penalty, extent of violence and sexual abuse; and the number of victims where the penalty consists of indivisible penalties:* 1. Where the penalty imposed is Death but was ₱100,000.00 ----------------- ----------------reduced to reclusion perpetua because of RA 9346 2. Where the penalty imposed is reclusion ₱75,000.00 ----------------- ----------------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 imposed is Death but was ₱100,000.00 ----------------- ----------------reduced to reclusion perpetua because of RA 9346 ● In Robbery with Intentional Mutilation if the ₱100,000.00 ----------------- ----------------penalty imposed is Death but was reduced to reclusion perpetua although death did not occur 1.2 For the victims who suffered mortal/fatal ₱75,000.00 ----------------- ----------------wounds and could have died if not for a timely medical intervention 1.3 For the victims who suffered non-mortal/non- ₱50,000.00 ----------------- ----------------fatal injuries 2.1 Where the penalty imposed is reclusion ₱75,000.00 ----------------- ----------------perpetua, other than the above-mentioned ● In Robbery with Intentional Mutilation, if the ₱75,000.00 ----------------- ----------------penalty imposed is reclusion perpetua. 2.2 For the victims who suffered mortal/fatal ₱50,000.00 ----------------- ----------------wounds and could have died if not for a timely medical intervention 2.3 For the victims who suffered non-mortal/non- ₱25,000.00 ----------------- ----------------fatal 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 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

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1. Homicide, Infanticide to conceal the dishonor ₱50,000.00 ₱30,000.00 ₱20,000.00 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 are no stages such as ₱50,000.00 ----------------- ----------------Reckless Imprudence and Death under tumultuous affray 3. If an aggravating circumstance was proven ₱50,000.00 ₱30,000.00 ₱20,000.00 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 imposable penalty is reclusion ₱100,000.00 ----------------- ----------------perpetua and death occurs in the course of the rebellion, the amount the heirs of those who died are entitled 1.1 For the victims who suffered mortal/fatal ₱75,000.00 ----------------- ----------------wounds in the course of the rebellion and could have died if not for a timely medical intervention 1.2 For the victims who suffered non-mortal/non- ₱50,000.00 ----------------- ----------------fatal 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.

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. L1719 (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]. 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].

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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.

In Contracts contracts

and

Quasi-

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; 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;

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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. 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. 14181419, CC].

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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 1st 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)].

General and Construction Services, G.R. No. 188027 (2017)]

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.

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 completed 90% of the project 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 Page 532 of 532