De La Salle University College Of Law: Lasallian Commission On Bar Operations

DE LA SALLE UNIVERSITY COLLEGE OF LAW Lasallian Commission on Bar Operations

CIVIL LAW Animo Notes 2019

GENERAL PRINCIPLES Q: When do laws take effect? A: As a general rule, laws shall take effect after fifteen days following the completion of their publication in the Official Gazette or in a newspaper of general circulation. (Art. 2, NCC, as amended by E.O. No. 200) The law shall take effect on the 16th day because in computing the period, the first day is excluded and the last day included. (Art. 13, NCC) Publication must be in full or it is not publication at all. (Tañada v. Tuvera, 1986) Exception: When it is otherwise provided by the law. This clause refers to the date of effectivity and not the requirement of publication itself, which cannot in any event be omitted. Such omission would offend due process insofar as it would deny the public knowledge of the laws that are supposed to govern it. (Tañada v. Tuvera, 1986) Q: When is publication not required? A: (1) Interpretative regulations and those internal in nature, that is, regulating only the personnel of the administrative agency and not the public; (2) Letters of instructions issued by administrative superiors on rules/guidelines to be followed by subordinates in the performance of their duties (Tanada v. Tuvera, 1986) Q: Explain the concept of non-retroactivity of laws. A: As a general rule, laws shall have no retroactive effect. (Art. 4, NCC). The exceptions are as follows: (1) Procedural or remedial; (2) Penal laws favorable to the accused; (3) When the law otherwise provides; (4) Tax laws when expressly declared or is clearly the legislative intent (Cebu Portland Cement Co. v. CIR, 1965); (5) Laws creating new rights (Bona v. Briones, 1918); (6) Interpretative statutes; (7) Curative or remedial statutes; and (8) Emergency laws. Exceptions to the exceptions: (a) Ex post facto laws; and (b) Laws that impair obligation of contracts. (Asiatic Petroleum v. Llanes, 1926) Q: Explain the rules on mandatory/prohibitory laws. A: As a general rule, acts contrary to mandatory or prohibitory laws are void. The exceptions are as follows: (1) The law makes the act valid but punishes the violator; (2) The law itself authorizes its validity; (3) The law makes the act only voidable; and (4) The law declares the nullity of an act but recognizes its effects as legally existing. Q: What are the elements of waiver of rights? A: (1) Existence of a right; (2) The knowledge of the evidence thereof; (3) An intention to relinquish such right (Valderamma v. Macalde, 2005) Q: Explain the rule on Judicial Decisions. A: It is elementary that the interpretation of a law by this Court constitutes part of that law from the date it was originally passed, since the Court’s construction merely establishes the contemporaneous legislative intent that the interpreted law carried into effect. (Republic v Rehman Enterprises, 2014)

The application or interpretation placed by the Court upon a law is part of the law as of the date of enactment of said law because the Supreme Court’s interpretation merely establishes the contemporaneous legislative intent that the construed law purports to carry into effect. (People v. Licera, 1975) However, when a doctrine is overruled and a different view is adopted, the new doctrine should be applied prospectively, and should not apply to parties who had relied on the old doctrine and acted on the faith thereof. (People v. Jabinal, 1974) Q: What are the two theories of personal law? A: The two theories are: (1) Domiciliary Theory – the personal laws of a person are determined by his domicile; (2) Nationality Theory – the nationality or citizenship determines the personal laws of the individual. Under Article 15, the Philippines follows the nationality theory. Family rights and duties, status, and legal capacity of Filipinos are governed by Philippine law. Q: Explain the rule of lex rei sitae. A: Lex rei sitae or the law where the property is situtated governs real or personal property. Generally, the law of the country where the property is situated shall govern. An exception to this rule is intestate and testamentary succession with respect to the order of succession, amount of successional rights and the intrinsic validity of testamentary provisions Q: Explain the rule of lex loci celebrationis. A: Lex loci celebrationis or the law of the place of the ceremony governs the formal or extrinsic validity of contracts. Q: Explain the rule on lex loci contractus. A: Lex loci contractus or the law of the place where a contract is executed or to be performed. It controls the nature, construction, and validity of the contract and it may pertain to the law voluntarily agreed upon by the parties or the law intended by them either expressly or implicitly. Q: What is the doctrine of Forum non conveniens? A: This doctrine requires the court to dismiss the case on the ground that the controversy may be more suitably tried elsewhere. This phrase literally means “the forum is inconvenient.” Q: Explain the concept of renvoi. A: Renvoi is a doctrine whereby a jural matter is presented which the conflict of laws rules of the forum refer to a foreign law which in turn, refers the matter back to the law of the forum or a third state. When reference is made back to the law of the forum, this is said to be “remission” while reference to a third state is called “transmission.” Q: What is a borrowing statute? A: Laws of the state or jurisdiction used by another state in deciding conflicts questioned involved in the choice of law (Black’s Law Dictionary, 5th ed. 1979) Q: Explain the doctrine of abuse of rights. A: Article 19 sets certain standard which may be observed not only in the exercise of one’s rights but also in the performance of one’s duties. These standards are the following: (1) To act with justice; (2) To give everyone his due; and (3) To observe honesty and good faith. The law, therefore, recognizes the primordial limitation on all rights: that in their exercise, the norms of human conduct set forth in Article 19 must be observed (Albenson Enterprises Corp. v. CA, 1993) Q: What are the elements of abuse of rights? A: (1) There is a legal right or duty;

(2) Which is exercised in bad faith; and (3) For the sole intent of prejudicing of injuring another (Albenson Enterprises Corp. v. CA, 1993) Q: What are the elements of acts contra bonus mores (against good morals)? A: (1) There is an act which is legal; (2) It is contrary to morals, good customs, public order, or public policy; and (3) It is done with intent to injure (Nikko Hotel Manila Garden v. Reyes, 2005) Q: Does breach of promise to marry give rise to liability for damages? A: As a general rule, it does not. However, when the breach causes moral and material injury to the other party, civil damages may be filed. In Wasmer v. Velez (1964), the Supreme Court ruled that the mere breach of contract to marry is not an actionable wrong; but to formally set a wedding and go through all the preparations and publicity, only to walk out of it when the matrimony is about to be solemnized, is quite different obviously and unjustifiably contrary to good customs for which the one who walked out must be held liable for damages under Article 21.

PERSONS AND FAMILY RELATIONS Q: What determines personality? A: Birth determines personality, but the conceived child shall be considered born for all purposes favorable to it. (Art. 40, NCC) Note: For civil purposes, the fetus is considered born if it is alive at the time it is completely delivered from the mother's womb. If the fetus had an intra-uterine life of less than seven (7) months, it is not deemed born if it dies within twenty-four (24) hours after its complete delivery from the maternal womb. (Art. 41, NCC) Q: Distinguish juridical capacity and capacity to act. Juridical Capacity It is the fitness to be the subject of legal relations. It is inherent in every natural person and is lost only through death

Capacity to act It is the power to do acts with legal effect. It is acquired and may be lost. (Art. 37, NCC)

Q: Enumerate the restrictions on capacity to act. A: (1) Minority; (2) Insanity or imbecility; (3) State of being deaf-mute; (4) Prodigality; and (5) Civil interdiction. (Art. 38, NCC) Note: These do not exempt the incapacitated person from certain obligations, as when the latter arise from his acts or from property relations, such as easements. Q: Enumerate the limitations on the capacity to act. A: (1) Age; (2) Insanity; (3) Imbecility; (4) State of being deaf mute; (5) Penalty; (6) Prodigality; (7) Family relations; (8) Alienage; (9) Absence; (10) Trusteeship; and

(11) Insolvency. (Art. 39, NCC) Q: Explain the rules on survivorship. A: If there is doubt as to who died first between two (2) or more persons called to succeed each other, the rule under Art. 43 of the NCC shall apply. Whoever alleges the death of one prior to the other has the burden to prove it. Absent such proof, the presumption is that they all died at the same time. Thus, there is no transmission of successional rights. Q: What are the conditions that warrant the application of the survivorship rule? A: (1) Parties are heirs to another; (2) No proof as to who died first; and (3) Doubt as to who died first (Sec. 3, Rule 131, Rules of Court) General Rule: When two persons perish in the same calamity, such as wreck, battle, or 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 the age of the sexes, according to the following rules: (1) If both were under the age of fifteen (15) years, the older is deemed to have survived; (2) If both were above the age sixty (60), the younger is deemed to have survived; (3) If one is under fifteen (15) years of age and the other above sixty (60) years of age, the former is deemed to have survived; (4) If both be over fifteen (15) years of age and under sixty (60) years of age, and the sex be different, the male is deemed to have survived, if the sex be the same, the older; (5) If one be under fifteen (15) years of age or over sixty (60) years of age, and the other between those ages, the latter is deemed to have survived (Sec. 30, Rule 131, Rules of Court). Exception: For purposes of succession. Disappearance upon or before reaching the age of seventy-five (75) years Absence of seven (7) years General Rule: The absentee is presumed dead for all purposes.

Absence of ten (10) years Absence of five (5) years

Exception: For the purposes of succession. The absentee is presumed dead for all purposes, including succession Disappearance after the age of seventy-five (75) years The absentee is presumed dead for all purposes, including succession.

Q: Explain the rules on presumption of death under extraordinary circumstances. A: (1) A passenger of a vessel lost during sea voyage, or an airplane which is missing and has not been heard of for four (4) years since the loss; (2) A member of the armed forces who has taken part in war, and missing for four (4) years; and (3) A person who has been in danger of death under other circumstances and his existence has not been known for four (4) years (Art. 391, NCC) Q: What are the characteristics of a name? A: (1) It is absolute, intended to protect the individual from being confused with others; (2) It is obligatory in certain respects, for nobody can be without a name; (3) It is fixed, unchangeable, or immutable, at least at the start, and maybe changed only for good cause and by judicial proceedings; (4) It is outside the commerce of man, and therefore inalienable and intransmissible by an act inter vivos or mortis causa; and (5) It is imprescriptible (In Re: Petition for Change of Name and/or Correction of Entry in the Civil Registry of Julia Lin Carulasan Wang, 2005)

Q: Explain the rules as to the use of surname by children A: (1) Legitimate and legitimated children shall principally use the surname of the father. (Art. 364, NCC); (2) An adopted child shall bear the surname of the adopter. (Art. 365, NCC) (3) Illegitimate children shall use the surname of the mother. (Art. 368, NCC). However, illegitimate children may use the surname of their father if their filiation has been expressly recognized by their father through the record of birth appearing in the civil register, or when an admission in a public document or private handwritten instrument is made by the father; Provided, the father has the right to institute an action before the regular courts to prove non-filiation during his lifetime. (Amended on March 19, 2004 by R.A. No. 9255) Q: Explain the rules on use of surname by a married woman. A: A married woman may use the following: (1) Her maiden first name and surname and add her husband's name; 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, NCC) Q: Explain the rules on use of surname in case of annulment. A: (1) If the wife is the guilty party, she shall resume her maiden name and surname; or (2) If she is the innocent spouse, she may resume the use of either her maiden name and surname, or her former husband's surname, except when the court decrees otherwise; or she or the former husband is married again to another person. (Art. 371, NCC) Q: Explain the rules on the use of surname in case of legal separation. A: The innocent wife shall continue using her name and surname employed before the legal separation. (Art. 372, FC) Q: Explain the additional rules on the use of names A: (1) In case of identity of names and surnames, the younger person shall be obliged to use such additional name or surname as will avoid confusion. (Art. 374, NCC); (2) In case of identity of names and surnames between ascendants and descendants, the word "Junior" can be used only by a son. Grandsons and other direct male descendants shall either: a. Add a middle name or the mother's surname; or b. Add the Roman numerals II, III, and so on. (Art. 375, NCC) Q: When is an illegitimate child allowed to use the surname of their father? A: An 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. Q: When can the civil register change or correct a first name or nickname without judicial authority? A: The city or municipal civil registrar or the consul general may, without the need of a judicial order, (1) correct clerical or typographical error which are visible to the eyes or obvious to the understanding; and, (2) change first name or nickname (Sec. 1, RA 9048, as amended) Q: Define absence. A: Absence is the special status of a person who has left his domicile and his whereabouts and fate are unknown, it being uncertain whether he is already dead or still alive. Q: What are the two kinds of absence? A: (1) Physical Absence; and (2) Legal Absence.

Q: Who may ask for the declaration of absence? A: (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 (Art. 385, NCC) Q: Distinguish presumptive death of spouse for the purpose of opening of succession from the purpose of contracting a subsequent marriage Opening of succession GR: Filed after the absence of 10 years XPN: After the absence of 5 years if the absentee is 76 years old or older; or absence of 4 years if under extraordinary presumption of death Filed by Absentee’s co-heirs, heirs, assigns, representative or successors-in-interest

Contracting a subsequent marriage GR: Filed after 4 consecutive years of absence of the spouse and the present spouse has a well-founded belief that the absent spouse is already dead E:Absence of 2 years if under extraordinary presumption of death Filed by present spouse

Q: Define marriage. A: It is a special contract of permanent union between a man and a woman entered into in accordance with law for the establishment of conjugal and family life. (Art. 1, FC) As a general rule, marriage is the foundation of the family and an inviolable social institution. Its nature, consequences, and incidents are governed by law and not subject to stipulation. Exception: Marriage settlements may fix the property relations during the marriage within the limits provided by the FC. (Art. 1, FC) Q: What are the essential requisites of marriage? A: (1) Legal capacity of the contracting parties who must be a male and a female; and (2) Consent freely given in the presence of the solemnizing officer. (Art. 2, FC) Q: What are the formal requisites of marriage? A: (1) Authority of the solemnizing officer; (2) A valid marriage license, except in the cases provided for in Chapter 2, Marriages Exempted from License Requirement (Arts. 27-34, FC); and (3) A marriage ceremony which takes place with the appearance of the contracting parties before the solemnizing officer and their personal declaration that they take each other as husband and wife in the presence of not less than two witnesses of legal age. (Art. 3, FC) Q: What is the effect of the absence of any of the formal and/or essential requisites? A: The absence of formal and essential requisites will render the marriage void. Exception: Those solemnized by any person not legally authorized to perform marriages unless such marriages were contracted with either or both parties believing in good faith that the solemnizing officer had the legal authority to do so. (Art. 35(2), FC) Q: When is a marriage exempt from the license requirement? A: (1) Marriages in Articulo Mortis (2) Residence is far from Local Civil Registry and there is no means of transportation (3) Marriages among Muslims or Ethnic Cultural Communities

(4) Cohabitation as husband and wife for at least 5 years and without any legal impediment to marry each other Q: What is the rule on marriages solemnized abroad? A: Under Article 26 of the Family Code, 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, is also valid in the Philippines. However, if the marriage is void under Philippine law, then the marriage is void even if it is valid in the country where the marriage was solemnized. Q: Who may initiate a foreign divorce proceeding between a Filipino and an alien spouse? A: Both the Filipino and the alien spouse, provided it was obtained abroad. It is not required that the alien spouse should be the one to initiate the foreign divorce proceeding as the law does not distinguish whether the Filipino spouse is the petitioner or the respondent therein (Republic v. Manalo, 2018). Q: Distinguish a void marriage from a voidable marriage. Voidable Marriage Valid until declared otherwise by the court Can be ratified by free cohabitation or prescription Can only be attached in a direct proceeding Action prescribes

Void Marriages Considered as never to have taken place Can never be ratified Can be attacked collaterally Imprescriptible

Q: What are the void marriages? A: (1) Those contracted by any party below 18 years of age; or (2) Those contracted 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; (3) Those solemnized without license except those covered by Chapter 2 of the FC; (4) Bigamous, polygamous marriages not falling under Art. 41 on presumptive death (absentee spouse); (5) Those contracted through mistake of one contracting party as to the identity of the other; (6) Subsequent marriages void under Art. 53 of the FC (Art. 35, FC); (7) Those contracted by any party who, at the time of the celebration, was psychologically incapacitated to comply with the essential marital obligations (Art. 36, FC) (8) Incestuous marriages under Art. 37; and (9) Void marriages by reason of public policy under Art. 38 (Art. 38, FC) NOTE: In psychological incapacity, each case must be judged, not on the basis of a priori assumptions, predilections or generalizations, but according to its own facts. Courts should interpret the provision on a caseto-case basis; guided by experience, the findings of experts and researchers in psychological disciplines, and by decisions of church tribunals. (Republic v. Court of Appeals, 1997) Q: What are the marriages that are incestuous and void from the beginning, whether relationship between the parties be legitimate or illegitimate? A: (1) Between ascendants and descendants of any degree; and (2) Between brothers and sisters, whether of full or half blood. (Art. 37, FC) Q: What are the void marriages by reason of public policy? A: (1) Between collateral blood relatives, whether legitimate or illegitimate, up to the fourth civil degree; (2) Between step-parents and step-children; (3) Between parents-in-law and children-in-law; (4) Between the adopting parent and the adopted child; (5) Between the surviving spouse of the adopting parents and the adopted child; (6) Between the surviving spouse of the adopted child and the adopter; (7) Between an adopted child and a legitimate child of the adopter; (8) Between the adopted children of the same adopter; and

(9) Between parties where one, with the intention to marry the other, killed that other person's spouse or his/her own spouse. (Art. 38, FC) Q: What are the voidable marriages? A: (1) Where one party is 18 years or over but below 21, without a consent from the parents, guardian or person having substitute parental authority over such party, unless after attaining the age of 21, such party freely cohabited with the other as husband and wife; (2) Where either party was of unsound mind, unless such party, after coming to reason, freely cohabited with the other as husband and wife; (3) Where consent of either party was obtained by fraud, unless such party freely cohabited with the other as husband and wife afterwards, with full knowledge of the facts constituting the fraud; (4) Where consent of either party was obtained by force, intimidation or undue influence, unless, after the same has disappeared, such party freely cohabited with the other as husband and wife; (5) Where either party was physically incapable of consummating the marriage, and such incapacity continues, and appears to be incurable (impotence); and (6) Where either party was afflicted with a sexually-transmissible disease found to be serious and appears to be incurable. (Art. 45, FC) Q: What is the rule of triennial cohabitation? A: There is a presumption that the husband is not impotent. But if the wife remains a virgin for at least three (3) years from the time the spouses started cohabiting, the presumption is rebutted. (Tompkins v. Tompkins, 1947) Q: Does nullity of marriage require judicial declaration? A: Yes. Nullity of marriage requires judicial declaration. For the purposes of remarriage, a nullity of a previous marriage may be invoked solely on the basis of a final judicial declaration of nullity of the previous marriage. (Art. 40, FC) Q: What are the various prescriptive periods for annulment? Ground No legal capacity to marry Unsound Mind Fraud Vices of consent (i.e force, intimidation, and undue influence) Impotence or sexually transmitted diseases (STD)

When to File Within 5 years from attaining the age of 21 Any time before death of either party or during a lucid interval or after regaining sanity Within 5 years after discovery of fraud Within five (5) years from the time the vice disappeared or ceased. Within five (5) years after the celebration of marriage.

Q: What is the prescriptive period for legal separation? A: The complaint for legal separation must be filed within five (5) years from time of occurrence of the cause. (Art. 57, FC) Q: Explain the nature of an action for legal separation. A: It involves nothing more than bed-and-board separation of the spouses. It is purely personal. (Lapuz Sy v. Eufemio, 1972) Q: What are the grounds for legal separation? A: (1) Repeated physical violence or grossly abusive conduct directed against the petitioner, a common child, or a child of the petitioner; (2) Physical violence or moral pressure to compel the petitioner to change religious or political affiliation; (3) 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; (4) Final judgment sentencing the respondent to imprisonment of more than six years, even if pardoned; (5) Drug addiction or habitual alcoholism of the respondent; (6) Lesbianism or homosexuality of the respondent;

(7) (8) (9) (10)

Contracting by the respondent of a subsequent bigamous marriage, whether in the Philippines or abroad; Sexual infidelity or perversion; Attempt by the respondent against the life of the petitioner; or Abandonment of petitioner by respondent without justifiable cause for more than one year. (Art. 55, FC)

Q: Is there a cooling off period in Legal Separation? A: Yes. An action for legal separation shall in no case be tried before six (6) months shall have elapsed since the filing of the petition. (Art. 58, FC) Exception: The 6-month-cooling-off-period can be dispensed with if the ground for legal separation involves violence against the woman or the child pursuant to the Anti-Violence Against Women and Children Act Q: What are the grounds to deny legal separation? A: (1) Where the aggrieved party has condoned the offense or act complained of; (2) Where the aggrieved party has consented to the commission of the offense or act complained of; (3) Where there is connivance between the parties in the commission of the offense or act constituting the ground for legal separation; (4) Where both parties have given ground for legal separation; (5) Where there is collusion between the parties to obtain the decree of legal separation; or (6) Where the action is barred by prescription. (Art. 56, FC) Q: What are the different rights and obligations between husband and wife? A: (1) Live together (Art. 68, FC); (2) Observe mutual love, respect, and fidelity; (3) Render mutual help and support; (4) Fix the family domicile (Art. 69, FC); (5) Joint responsibility for the support of family (Art. 70, FC) (6) Joint management of the household (Art. 71, FC) Q: What property regime should govern the property relationship between husband and wife? A: The following and in such order: (1) By marriage settlements executed before the marriage: a. Absolute community of property; b. Conjugal partnership of gains; c. Complete separation of property; or d. Mixed property regime. (2) By the provisions of the FC; (3) By the local custom (Art. 74, FC) In the absence of a marriage settlement, or the regime agreed upon is void, absolute community of property governs. (Art. 75, FC) In the 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. The exceptions to this are as follows: (1) Where both spouses are aliens; (2) With respect to the extrinsic validity of contracts affecting property not situated in the Philippines and executed in the country where the property is located; and (3) With respect to the extrinsic validity of contracts entered into in the Philippines but affecting property situated in a foreign country whose laws require different formalities for its extrinsic validity. (Art. 80, FC) Q: What are the requisites of a donation propter nuptias? A: (1) It must be made before celebration of the marriage; (2) In consideration of the marriage;

(3) In favor of one or both future spouses; and (4) It must comply with the formalities of donation. (Arts. 82 and 83, FC) Q: What are the grounds for revocation of donation propter nuptias? A: (1) If the marriage is not celebrated or judicially declared void ab initio, except donations made in the marriage settlements, which shall be governed by Art. 81 of the FC; (2) When the marriage takes place without the consent of the parents or guardian, as required by law; (3) When the marriage is annulled, and the donee acted in bad faith; (4) Upon legal separation, the donee being the guilty spouse; (5) If it is with a resolutory condition and the condition is complied with; and (6) When the donee has committed an act of ingratitude as specified by the provisions of the NCC on donations in general (Art. 86, FC) Q: When shall the regime of absolute community of property (ACP) commence? A: It shall commence at the precise moment of the celebration of the marriage. (Art. 88, FC) The presumption is that all properties acquired during the marriage belong to the community of property, unless it be proven otherwise. (Art. 93, FC) Q: What are excluded from the ACP? A: (1) Property acquired during the marriage by gratuitous title by either spouse, and the fruits and income thereof, if any, except where it is expressly provided by the donor, testator or grantor that they shall form part of the community property; (2) Property for personal and exclusive use of either spouse. Jewelry shall form part of the community property; and (3) Property acquired before the marriage by either spouse who has legitimate descendants by a former marriage, and the fruits and income thereof, if any. (Art. 92, FC) Q: What are the grounds for dissolution of ACP? A: (1) Death of either spouse; (2) Decree of legal separation; (3) When the marriage is annulled or declared void; or (4) In case of judicial separation of property during the marriage under Articles 134 to 138. (Art. 99, FC) Q: Explain the regime of conjugal partnership of gains. A: It is a property regime whereby the husband and wife place in a common fund the proceeds, products, fruits, and income from their separate properties and those acquired by either or both spouses through their efforts or by chance, and, upon dissolution of the marriage or of the partnership, the net gains or benefits obtained by either or both spouses shall be divided equally between them, unless otherwise agreed in the marriage settlements. (Art. 106, FC) No unilateral declaration by one spouse can change the character of a conjugal property. (Sps. Go v. Yamane, 2006) Q: What are the exclusive properties of each spouse under CPG? A: (1) That which is brought to the marriage as his or her own; (2) That which each acquires during the marriage by gratuitous title; (3) That which is acquired by right of redemption, by barter or by exchange with property belonging to only one of the spouses; and (4) That which is purchased with exclusive money of the wife or of the husband. (Art. 109, FC) Q: What are included in the CPG? A: (1) Those acquired by onerous title during the marriage at the expense of the common fund, whether for the partnership or for only one of the spouses;

(2) Those obtained from the labor, industry, work or profession of either or both of the spouses; (3) The fruits—natural, industrial or civil— due or received during the marriage from the common property, as well as the net fruits from the exclusive property of each spouse; (4) The share of either spouse in the hidden treasure which the law awards to the finder or owner of the property where the treasure is found; (5) Those acquired through occupation such as fishing or hunting; (6) Livestock existing upon the dissolution of the partnership in excess of the number of each kind brought to the marriage by either spouse; and (7) Those acquired by chance, such as winnings from gambling or betting. However, losses therefrom shall be borne exclusively by the loser-spouse. (Art. 117, FC) Q: Explain the concept of accession and reverse accession in CPG A: In Cases Of Improvement Of Exclusive Property (Art. 120, FC) 1. Reverse Accession – if the cost of the improvement and the plus value is more than the value of the principal property at the time of the improvement, the property becomes conjugal 2. Accession – if the cost of the improvement of the plus value is equal to or less than the value of the principal property at the time of the improvement, the entire property becomes the exclusive property of the spouse. Example: the lot is worth Php 100,000 the house is worth Php 50,000 the total is = Php 150,000 The value of the house and lot as a result of the improvement is Php 180,000 so that the “plus value” of the total value of the improvement is Php 30,000. The cost of the house plus the “plus value” of the total value of the improvement is Php 80,000 (Php 50,000 + 30,0000) Since the cost of the land is Php 100,000, which is still more than the value of the improvement, which is Php 80,000, it would still be a case of ordinary succession. Hence, the entire property becomes the exclusive property of the spouse. Q: When is separation of property of the spouses allowed? A: When there is an express stipulation in the marriage settlement. In the absence of which, it may be done only through a judicial order either voluntarily or for a sufficient cause (Art. 134, FC) Q: When is a judicial separation of property for a sufficient cause? A: When the petitioner’s spouse: (1) is penalized with civil interdiction; (2) has been judicially declared an absentee; (3) loses parental authority as decreed by the court; (4) has abandoned the petitioner or failed to comply with his obligations to the family as provided in Art. 101; (5) abused the power of administration he was granted in the marriage settlements; and, (6) that the spouses have been separated in fact for at least 1 year and reconciliation is highly improbable (Art 135, FC) Q: When is the regime of separation of property applicable? A: (1) In marriage settlements (Art. 143 FC) (2) When mandatory (Arts. 103, 130, FC) (3) Reconciliation in legal separation (Art. 66(2), FC) (4) Judicial separation of property (Art. 135, FC)

Q: Explain the rules on property regime of spouses without the benefit of marriage. A: When both parties capacitated to marry each other live exclusively with each other as husband and wife without the benefit of marriage or under a void marriage, the rules on co-ownership shall apply. (Art. 147, FC) Q: What are the effects when only one of the parties in a void marriage acted in good faith? A: (1) The share in the co-ownership of the party in bad faith shall be forfeited in favor of their common children; (2) In case of default or waiver by any or all the common children, the vacant share shall belong to their respective surviving descendants; and (3) In the absence of descendants, the share shall belong to the innocent party. (Art. 147, FC) Q: Explain the concept of family. A: 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. 149, FC) Q: What is a family home? A: The family home is the dwelling house of the family and the land on which it is situated. It is deemed constituted on the house and lot from the time it is occupied as a family residence. (Arts. 152 and 153, FC) Q: Is the family home exempt from execution, forced sale or attachment? A: From the time of its constitution and so long as any of its beneficiaries actually resides therein, the family home shall be exempt from execution, forced sale or attachment. The exceptions are as follows: (1) For nonpayment of taxes; (2) For debts incurred prior to the constitution of the family home; (3) For debts secured by mortgages on the premises before or after such constitution; and (4) For debts due to laborers, mechanics, architects, builders, materialmen and others who have rendered service or furnished material for the construction of the building. (Art. 155, FC) Q: What are the guidelines in the constitution of the family home? A: (1) It is constituted jointly by the husband and the wife or by an unmarried head of a family. (Art. 152, FC); (2) It is constituted on the dwelling house of the family and the land on which the house is situated. (Art. 152, FC); (3) It is deemed constituted on the house and lot from the time of actual occupation as a family residence. (Art .153, FC); (4) The beneficiaries of a family home are the husband and wife or the unmarried the head of a family; and their parents, ascendants, descendants, brothers and sisters, legitimate or illegitimate, who live in the family home and depend upon the head of the family for legal support. (Art. 154, FC); (5) It is generally exempt from execution, forced sale, or attachment, except as provided under Art. 155; (6) It must be owned by the person constituting it which may be either or both spouses or the single head of a family, but a property subject of a conditional sale where ownership is reserved by the vendor may be constituted as a family home. (Art. 156, FC); (7) It may be disposed by the owner/s with the written consent of the person constituting the same, the latter's spouse, and a majority of the beneficiaries of legal age. (Art. 158, FC); (8) It continues despite the death of one or both spouses or of the unmarried head of the family for ten years or as long as there is a minor beneficiary. (Art. 159, FC) (9) It cannot be partitioned by the heirs unless the court finds compelling reasons therefor. (Art. 159, FC); (10) A creditor whose claim is not among those mentioned in Art. 155 and who obtains a judgment in his favor may apply to the court for an order directing the sale of the family home if he has reasonable grounds to believe that it is actually worth more than the maximum amount fixed by law (Art. 157, FC). No bid below the value allowed for a family home shall be considered. The proceeds shall be applied first to the amount allowed for a family home and then to the liabilities under the judgment and the costs. Any excess shall be delivered to the judgment debtor. (Art. 160, FC); (11) For purposes of availing of the benefits of a family home, a person may constitute, or be the beneficiary of, only one family home. (Art. 161, FC);

(12) The rule on family home applies to valid and voidable marriages and even to common law spouses under Articles 147 and 148. Q: Who are considered legitimate children? A: (1) Those conceived or born during marriage (Art. 164, FC) (2) Those conceived by artificial insemination (Art 164, FC) (3) Adopted children (Sec 17, RA 8552) (4) Legitimated children (Sec. 179, FC) Q: What is the status of a child conceived and born outside of marriage? A: As a general rule, they are considered illegitimate. The exceptions are as follows: (1) Children conceived or born before the judgment of annulment (Art. 54, FC) (2) Children conceived or born of a void marriage in two instances: a. Children conceived or born before the judgment of absolute nullity of the marriage under Article 36 (declared void on the ground of psychological incapacity) has become final and executory (Art. 54, FC); and b. Children conceived or born of a void subsequent marriage for non- compliance with the requirements under Art. 52 (recording of the judgment of annulment or absolute nullity of the first marriage, partition and distribution of properties and delivery of their children's presumptive legitimes in the Registry of Property) (Art. 53, FC) Q: Who may institute an action for recognition of an illegitimate child? A: (1) The child, during his or her lifetime; (2) The child's heirs, within a period of five years if: a. The child dies during minority; or b. The child dies in a state of insanity. (Art. 173, FC) Q: What are the different rules in establishing illegitimate filiation? A: (1) When filiation of an illegitimate child is established by a record of birth appearing in the civil register or a final judgment or an admission of filiation in a public document or a private handwritten instrument signed by the parent concerned, the action for recognition may be brought by the child during his/her lifetime; (2) If the action is based upon open and continuous possession of the status of an illegitimate child, or any other means allowed by the rules of court or special laws, it may only be brought during the lifetime of the alleged parent (Guy v. CA, 2006) Q: What are the grounds for impugning the legitimacy of a child? A: (1) Physical impossibility of sexual intercourse within the first 120 days of the 300 days immediately preceding the child's birth due to: a. Physical incapacity of the husband; b. The fact that the spouses live separately; or c. Serious illness of husband which absolutely prevented sexual intercourse. (Art. 166(1), FC) (2) Biological or scientific proof that the child could not have been that of the husband, except where the spouses authorized or ratified an artificial insemination and the requisites under Art. 164 are complied with. (Art. 166(2), FC); (3) In case of children conceived through artificial insemination, the authorization or ratification of either parent obtained through fraud, mistake, violence, intimidation, or undue influence. (Art. 166(3), FC) Q: Who are considered legitimated children? A: Only children conceived and born outside of wedlock of parents who, at the time of the conception of the former, were not disqualified by any impediment to marry each other or were disqualified only because either or both of them were below 18 years old, may be legitimated. Legitimation shall take place by a subsequent valid marriage between the parents.

Q: What is the status of a child born of artificial insemination? A: 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 legitimate children of the husband and his wife, provided: (1) That the artificial insemination has been authorized or ratified by the spouses in a written instrument executed and signed by them before the birth of the child (Art. 164, FC); (2) That the written instrument is recorded in the civil registry together with the birth certificate of the child; and (3) That the written authorization or ratification of either parent was not obtained through mistake, fraud, violence, intimidation, or undue influence (Art. 166(3), FC) Q: What is the rule on joint adoption? A: Under the Domestic Adoption Act of 1998, the husband and wife shall jointly adopt. Exceptions: (1) If one spouse seeks to adopt the legitimate son or daughter of the other; (2) If one spouse seeks to adopt his or her own illegitimate son or daughter: Provided, that the other spouse has signified his or her consent thereto; or (3) If the spouses are legally separated from each other. (Sec. 7(c), RA. No. 8552) Q: What are the rights of an adopted child? A: The adoptee shall be considered the legitimate son/daughter of the adopter(s) for all intents and purposes and as such is entitled to all the rights and obligations provided by law to legitimate sons/daughters born to them without discrimination of any kind. To this end, the adoptee is entitled to love, guidance, and support in keeping with the means of the family. (Sec 17, R.A 8552) In legal and intestate succession, the adopter(s) and the adoptee shall have reciprocal rights of succession without distinction from legitimate filiation. However, if the adoptee and his/her biological parent(s) had left a will, the law on testamentary succession shall govern. Q: What are the grounds for rescission of adoption upon petition of the adoptee A: (1) Repeated maltreatment by the adopter(s) despite having undergone counseling; (2) Attempt on the life of the adoptee; (3) Sexual assault or violence; or (4) Abandonment and failure to comply with parental obligations. (Sec. 19, RA. No. 8552) Q: What are the effects of rescission of adoption? A: If the petition is granted, the parental authority of the adoptee's biological parent(s), if known, or the legal custody of the Department shall be restored if the adoptee is still a minor or incapacitated. The reciprocal rights and obligations of the adopter(s) and the adoptee to each other shall be extinguished. The court shall order the Civil Registrar to cancel the amended certificate of birth of the adoptee and restore his/her original birth certificate. Succession rights shall revert to its status prior to adoption, but only as of the date of judgment of judicial rescission. Vested rights acquired prior to judicial rescission shall be respected. All the foregoing effects of rescission of adoption shall be without prejudice to the penalties imposable under the Penal Code if the criminal acts are properly proven. (Sec 20, RA 8552) Q: Distinguish Domestic Adoption from Inter-Country Adoption. A: Domestic Adoption Inter-country Adoption Domestic adoption applies to domestic adoption of Inter-country adoption applies to adoption of a Filipino children, where the entire adoption process Filipino child in a foreign country, where the petition beginning from the filing of the petition up to the for adoption is filed, the supervised trial custody is issuance of the adoption decree takes place in the undertaken and the decree of adoption is issued Philippines (R.A. No. 8552) outside of the Philippines (R.A. No. 8043)

Q: What is inter-country adoption? A: It is the socio-legal process of adopting a Filipino child by a foreigner or a Filipino citizen permanently residing abroad where the petition is filed, the supervised trial custody is undertaken, and the decree of adoption is issued outside the Philippines. (Sec. 3(a) R.A 8043) Q: Who is qualified to adopt? A: Domestic Adoption (1) Any Filipino citizen who is: a. Of legal age; b. In possession of full civil capacity and rights; c. Good moral character; d. Not convicted of any crime involving moral turpitude; e. Emotionally and psychologically capable of caring for children; f. At least sixteen years older than the adoptee, except when the adopter is the biological parent of adoptee or spouse of adoptee’s parent; g. Capable to support and care his/her children in keeping with the means of the family. (2) Any alien with the same qualifications as stated for Filipino nationals, provided that: a. His country has diplomatic relations with the Philippines; b. He has been living in the Philippines for at least 3 continuous years prior to the filing of application and maintains residence until adoption decree is entered, except: i. A former Filipino citizen who seeks to adopt a relative within the 4th civil degree of consanguinity or affinity; ii. One who seeks to adopt a legitimate child of his Filipino spouse; iii. One who is married to a Filipino citizen and seeks to adopt jointly with his spouse a relative within 4th degree of consanguinity or affinity of the Filipino spouse; c. He has been certified as having legal capacity to adopt in his country; and d. His government allows the adoptee to enter his country as his adopted child; and (3) The guardian with respect to his ward after the termination of the guardianship and clearance of his financial accountabilities.

Inter-country Adoption Any alien or a Filipino citizen permanently residing abroad may file an application for inter-country adoption of a Filipino child if he is: (1) 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, except when the adopter is the parent by nature of the child to be adopted or the spouse of such parent; (2) If married, his or her spouse must jointly file for the adoption; (3) With the capacity to act and assume all rights and responsibilities of parental authority under his national laws, and has undergone the appropriate counseling from an accredited counselor in his or her country; (4) Not been convicted of a crime involving moral turpitude; (5) Eligible to adopt under his or her national law; (6) 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; (7) 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; (8) 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 or her national laws; and (9) Possesses all the qualifications and none of the disqualifications provided herein and in other applicable Philippine laws. (Sec. 9, R.A. No. 8043)

Q: Who are qualified to be adopted? A: Domestic Adoption (1) Person below 18 years of age declared and available for adoption; (2) Legitimate child of one spouse by the other spouse; (3) Illegitimate child by a qualified adopter to raise status to legitimacy; (4) Person of legal age if, prior to adoption, has been considered and treated by his adopters as his own child since minority; (5) Child whose adoption was previously rescinded; (6) Child whose biological or adoptive parent has died, provided that no proceedings shall be initiated within 6 months from the time of death of said parents (Sec 8, R.A. No. 8552)

Inter-country Adoption Only a legally free child may be subject of inter country adoption (Sec. 8, R.A No. 8043). A legally free child is a child who has been voluntarily or involuntarily committed to the DSWD in accordance with the Child and Youth Welfare Code. (Sec 3(f) R.A. No. 8043)

Q: Whose consent is necessary to the adoption? A: (1) The adoptee, if ten (10) years of age or over; (2) The biological parent(s) of the child, if known, or the legal guardian, or the proper government instrumentality which has the legal custody of the child; (3) The legitimate and adopted sons or daughters, ten (10) years of age or over, of the adopter(s) and adoptee, if any; (4) The illegitimate sons or daughters, ten years of age or over, of the adopter if living with said adopter and the latter's spouse, if any; and (5) The spouse, if any, of the person to, adopting or to be adopted. (Sec. 9, RA 8552), Q: What constitutes support? A: Support is everything indispensable for sustenance, including the education of the person entitled to be supported until he completes his education or training for some profession, trade or vocation, even beyond the age of majority. (Art. 194, FC) Q: Who are the persons obliged to support each other? A: (1) The spouses; (2) Legitimate ascendants and descendants; (3) Parents and their legitimate children and the legitimate and illegitimate children of the latter; (4) Parents and their illegitimate children and the legitimate and illegitimate children of the latter; and Legitimate brothers and sisters, whether of full or half-blood, except when the need for support of the brother or sister, being of age, is due to a cause imputable to the claimants fault or negligence. (Art. 195, FC) Q: What is the order of liability if two or more persons are obliged to give support? A: (1) The spouse; (2) The descendants in the nearest degree; (3) The ascendants in the nearest degree; and (4) The brothers and sisters. (Art. 199, FC) Q: What are the requisites for the enforcement of the right of reimbursement of a third person from the person obliged to give support? (1) Stranger who gives support to another person with the intention to be reimbursed; and (2) Person obliged to give support to the recipient is without knowledge of the stranger's act (Art. 206, FC); (3) There is an urgent need to be supported on the part of the recipient;

(4) The person is obliged to support unjustly refuses or fails to give the support; and (5) A third person furnishes the support to the needy individual (Art. 207, FC) Q: What is included in parental authority and responsibility? A: (1) Caring and rearing for civic consciousness and efficiency; and (2) Development of moral, mental, and physical character and well-being (Art. 209, FC) Q: Can parental authority and responsibility be renounced and transferred? A: As a general rule, it cannot. Parental authority and responsibility cannot be renounced and transferred. The exceptions are as follows: (1) Adoption; (2) Guardianship; and (3) Surrender to a children's home or an orphan institution. (Sagala-Eslao v. Court of Appeals, 1997) Q: What are the effects of changes in parental relations? A: (1) Absence or death of either parent: the surviving parent shall continue exercising parental authority (Art 212, FC); (2) Remarriage of the surviving parent shall not affect his parental authority over the children, except when the court appoints another person to be the guardian of the person or property of the children (Art. 212, FC); (3) Separation of parents: parental authority shall be exercised by the parent designated by the Court; maternal preference rule applies (Art. 213, FC); and (4) Death, absence or unsuitability of parents, substitute parental authority shall be exercised by the surviving grandparents. (Art. 214, FC) Q: Who has the right to exercise parental authority in default of parents? A: (1) Surviving grandparents; (2) Oldest brother or sister over 21; (3) Child’s actual custodian over 21, except when the sibling or custodian is unfit or disqualified. Q: Who is considered a foundling? A: A "foundling" is defined as a deserted or abandoned infant or child whose parents, guardian or relatives are unknown; or a child committed to an orphanage or charitable or similar institution with unknown facts of birth and parentage and registered in the Civil Register as a "foundling." Q: Who is an abandoned child? A: A child who has no proper parental care or guardianship, or whose parent(s) have deserted him/her for a period of at least three (3) continuous months, which includes a founding. (Sec. 2(3), R.A. No. 9253) Q: What are the grounds for the suspension of parental authority? A: (1) Conviction of a crime with the penalty of civil interdiction (Art. 230, FC); (2) Harsh or cruel treatment of the child (Art. 231(1), FC); (3) Giving the child corrupting orders, counsel or example (Art. 231(2), FC); (4) Compelling the child to beg (Art. 231(3), FC); (5) Subjecting the child or allowing the child to be subjected to acts of lasciviousness (Art. 231(4), FC); and (6) Culpable negligence. (Art. 231, FC) Q: What are the grounds for the termination of parental authority? A: (1) Death of the parents (Art. 228(1), FC); (2) Death of the child (Art. 228(2), FC); (3) Emancipation of the child (Art. 228(3), FC); (4) Adoption (Art. 229, FC); (5) Appointment of a general guardian (Art. 229(2), FC);

(6) Judicial declaration of abandonment of the child (Art 229(3), FC); (7) Final judgment of a competent court divesting the party concerned of parental authority (Art. 229(4), FC); or (8) Judicial declaration of absence or incapacity of the person exercising parental authority. (Art. 229(5), FC) Q: Can the Family Code be applied retroactively? A: Yes, insofar as it does not prejudice or impair vested rights in accordance with the Civil Code or other laws (Art 256, FC) A vested right is an immediate and fixed right of present and future payment as opposed to a contingent or expected right. It is a right which is fixed, unalterable, absolute, complete and unconditional to the exercise of which no obstacle exists, and which is perfect in itself and not dependent upon a contingency. Q: Who are the people obliged to arrange the funeral of a relative? A: (1) Spouse; (2) Descendant; (3) Ascendant; (4) Brothers or Sisters.

PROPERTY Q: What are the different classifications of property? A: The following are the classifications: (1) Immovable or real property (Art. 415, NCC); (2) Movable or personal property (Art. 414, NCC); (3) Property of the public dominion (Art. 420, NCC); (4) Patrimonial property of the state (Art. 421, NCC); (5) Property of private ownership (Art. 425, NCC). Q: What are the different categories of immovable properties? A: (1) Real by nature (Art. 415 (1) and (8), NCC) a. Land, buildings, roads, and constructions of all kinds adhered to the soil b. Mines, quarries and slag dumps, while the matter thereof forms part of the bed, and waters either running or stagnant (2) Real by incorporation (Art. 415 (2), (3) and (7), NCC) a. Trees, plants, and growing fruits, while they are attached to the land or form an integral part of an immovable b. 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 c. Fertilizer actually used on a piece of land (3) Real by destination (Art. 415 (4), (5), (6) and (9), NCC) a. Statues, reliefs, paintings or other objects for use or ornamentation, placed in buildings or on lands by the owner of the immovable in such manner that it reveals the intention to attach them permanently to the tenements b. Machinery, receptacles, instruments or implements intended by the owner of the tenement for an industry or works which may be carried on in a building or on a piece of land, and which tend directly to meet the needs of the said industry or works c. Animal houses, pigeon houses, beehives, fish ponds or breeding places of similar nature, in case their owner has placed them or preserves them with the intention to have them permanently attached to the land, and forming a permanent part of it; the animals in these places are included d. 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 (4) Real by analogy (Art. 415 (10), NCC) a. Contracts for public works, and servitudes and other real rights b. over immovable property

Q: Explain the concept of ownership. A: It is the right to enjoy or dispose of a thing, without other limitations than those established by law. (Art. 428, NCC) Q: What are the rights of an owner? A: Jus possidendi - right to possess Jus utendi - right to use Jus abutendi - right to abuse/consume Jus vindicandi - right to vindicate Jus disponendi - right to dispose Jus accessionis - right to accessories Jus fruendi - right to fruits Q: Differentiate Beneficial Ownership vis-à-vis Naked Ownership. Beneficial Ownership Ownership recognized by law and capable of being enforced in courts. Right to enjoyment in one person, while the legal title may be in another’s name.

Naked Ownership Enjoyment of all the benefits and privileges of ownership as against possession of the bare title to property. Bare title to property, where the right to the use and fruits has been denied.

Q: To what can ownership be exercised? A: It can be exercised over a thing (personal or real; usually refers to corporeal property) and over rights (personal or real, res of rights corporeal or incorporeal). Q: Explain the Doctrine of Self-Help. A: It is where the owner or lawful possessor of a thing has the right to exclude any person from the enjoyment and disposal thereof. He may use such force as may be reasonably necessary to repel or prevent an actual or threatened unlawful physical invasion or usurpation of his property. (Art. 429, NCC). Q: When can an owner or lawful possessor exercise the Doctrine of Self-Help? A: It can only be exercised at the time of actual or threatened dispossession. When possession has already been lost, the owner must resort to judicial process for the recovery of property. (Art. 536, NCC) Q: What is the concept of accession? A: The ownership of property gives the right by accession to everything which is produced thereby (accession discreta), or which is incorporated or attached thereto (accession continua), either naturally or artificially. (Art. 440, CC) It is not a mode of acquiring ownership. Q: What are the Kinds of Accession? A: (1) Accession Discreta: Right pertaining to owner of a thing over everything produced thereby: a. Natural fruits; b. Industrial fruits; and c. Civil fruits. (Arts. 440-441, NCC) (2) Accession Continua: Right pertaining to owner of a thing over everything incorporated or attached thereto, naturally or artificially. (Art. 440, NCC) a. With respect to immovable property: i. Industrial — Land is the principal. 1. Building; 2. Planting; and 3. Sowing. (Art. 445, NCC) ii. Natural 1. Alluvion or accretion (Arts. 457-458, NCC);

b.

2. Avulsion (Art. 459, NCC); 3. Change of course of rivers (Arts. 461-462, NCC); and 4. Formation of Islands (Arts. 463-465, NCC) With respect to movable property; i. Adjunction or conjunction (Arts. 466-471, NCC); ii. Mixture or confusion (Arts. 472-473, NCC); iii. Specification (Art. 474, NCC).

Q: What is the rule on accretion or alluvion? A: By law, accretion, the gradual and imperceptible deposit of soil and silt made through the efforts of the current of the water, belongs to the owner of the land adjacent to the banks of rivers where it forms. (Republic v. Santos, 2012) The drying up of the river is not accretion. Hence, the dried up river bed belongs to the State as property of public dominion, not to the riparian owner, unless a law vests the ownership in some other person. If the riparian land is registered in the Registry of Property, the land added through accretion is not automatically registered although ownership is automatically vested on the riparian owner. Q: What is an action for Quieting of Title? A: Whenever there is a cloud on title to real property or any interest therein, by reason of instrument, record, claim, encumbrance or proceeding, apparently valid or effective but in truth and in fact invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title, an action may be brought to remove such cloud or to quiet the title. (Art. 476, NCC) Q: What are the requisites for an action to quiet title? A: The following are the requisites for an action to quiet title: (1) The plaintiff or complainant has a legal or an equitable title to or interest in the real property subject of the action; and (2) The deed, record, claim, encumbrance, or proceeding claimed to be casting cloud on his title must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or legal efficacy. (Mananquil v. Moico, 2012) Q: What are the characteristics of a co-ownership? A: (1) Plurality of subjects, who are the co-owners; (2) Unity of object or material indivisibility; (3) The recognition of ideal shares, which determines the rights and obligations of the co-owners (Sanchez v. CA, 2003) Q: What are the rights of a co-owner? A: All the bundle of rights in ownership may be exercised by any co-owner concomitantly with other coowners. (1) To use the thing in common according to purpose intended (Art. 486, NCC); (2) To share in the benefits in proportion to his undivided interest, provided the charges are borne in the same proportion (Art. 485, NCC); (3) To compel the other co-owners to contribute to the necessary expenses for preservation of property and to the payment of taxes (Art. 488, NCC). Any of the co-owners may renounce so much of his undivided interest equivalent to his share in necessary expenses and taxes (Art. 489, NCC); (4) To bring an action in ejectment; (5) To oppose any act of alteration (Art. 491, NCC); (6) To protest resolutions of financial majority which are seriously prejudicial to the minority in acts of administration (Art. 497, NCC); (7) To exercise the right of legal redemption (Arts. 1620, 1623, 1088, NCC); and (8) To ask for partition as long as the co-ownership exists, unless: a. Indivision is imposed by stipulation among co-owners (Maximum of 10 years); b. Imposed by donor or testator (Maximum of 20 years);

c. d.

Generally prohibited by law; and Property is an indivisible thing. No physical partition, only legal partition. Co-owned property will be sold to one of the co-owners or to a third person, the proceeds to be divided among them. Q: How is co-ownership extinguished? A: (1) Total destruction of thing or loss of the property co-owned; (2) Merger of all interests in one person; (3) Acquisitive prescription. (Art. 1106, NCC) Q: Explain the concept of possession. A: It is the holding of a thing or the enjoyment of a right. (Art. 523, NCC) The right of possession is a necessary incident of ownership. (Monasterio-Pe v. Tong, 2011) Q: What are the elements of possession? A: (1) Holding or control; (2) Intention to possess (animus possidendi); (3) In one’s own right or that of another. (Art. 523-524, NCC) Q: Distinguish right of possession (jus possessionis) from right to possession (jus possidendi) A: The former pertains to the real right independent of ownership. The latter pertains to possession in itself as a right of ownership. Q: What are the different classes of possession? In the concept of an owner a. Possession by the owners themselves or those who claim to be so. b. Possession in one’s own name. In good faith Where possessor is not aware that there exists in his title or mode of acquisition any flaw which invalidates it. (Art. 526, NCC) Actual Possession Consists in the manifestation of acts of dominion over it of such a nature as a party would naturally exercise over his own property.

In the concept of a holder Acknowledge in another a superior right which he believes to be ownership, whether his belief be right or wrong. Possession in the name of another (e.g. possession by a caretaker or an agent) In bad faith Where possessor has knowledge of any flaw which invalidates his acquisition. Constructive Possession The possession and cultivation of a property under claim of ownership of its entirety, provided, that the property is not in the adverse possession of another.

Q: What is accion publiciana? A: It is an ordinary civil proceeding to determine the better right of possession of realty independent of title. It refers to an ejectment suit filed after the expiration of one (1) year from the accrual of the cause of action or from the unlawful withholding of possession of the realty. The objective of the plaintiff is to recover possession only, not ownership. Prescription of action: Ten (10) years from the adverse possession of defendant (Art. 555 (4), NCC), except if possession by defendant is merely tolerated. (Art. 537, NCC.) Q: What is a usufruct? A: It is the right to enjoy the property of another with the obligation of preserving its form and substance, unless the title constituting it or the law otherwise provides. (Art. 562, NCC)

Q: What are the characteristics of a usufruct? A: (1) Real right of use and enjoyment; (2) Temporary duration (Art. 605-606, NCC); (3) Transmissible (art. 572, NCC); and (4) Constituted on real or personal property, consumable or non-consumable, tangible or intangible. Q: What are the classifications of Usufruct? A: The following are the classifications: (1) As to how the usufruct was created: a. Legal or by law (Art. 563, NCC); b. Voluntary, or by the will of private persons; and c. Mixed or by prescription. (2) As to the obligation to preserve form and substance of property: a. Normal Usufructuary - Obligated to preserve the form and substance of the property; b. Abnormal - No need to preserve the form and substance of property. Usufructuary may consume or sell property held in usufruct. Q: Can a usufruct lease the property held? A: Yes. The usufruct can lease the property held in usufruct or assign his right of usufruct, unless the usufruct is purely personal to the usufructuary. Q: What are the modes of extinguishing Usufruct? A: (1) By the death of the usufructuary, unless a contrary intention clearly appears; (2) By the expiration of the period for which it was constituted, or by the fulfillment of any resolutory condition provided in the title creating the usufruct; (3) By merger of the usufruct and ownership in the same person; (4) By renunciation of the usufructuary; (5) By the total loss of the thing in usufruct; (6) By the termination of the right of the person constituting the usufruct; (7) By prescription. Q: What is an easement? A: An easement is a real right on another's property, corporeal and immovable, whereby the owner of the latter must refrain from doing or allowing somebody else to do or something to be done on his property, for the benefit of another person or tenement (Quimen v. CA, 1996) Q: Differentiate a Continuous easement vs. Discontinuous easement. A: Continuous easement Discontinuous easement It pertains to the use of which is or may be It pertains to that which is used at intervals and incessant, without the intervention of any act of depends upon the acts of man. (Art. 615, NCC) man. Q: Differentiate an Apparent easement vs. Non-apparent easement. A: Apparent easement Non-apparent It pertains to that which is known and is continually It pertains to that which shows no external kept in view by external signs that reveal that use indication of its existence. (Art. 615, NCC) and enjoyment of the same. Q: Differentiate a Positive easement vs. Negative easement. A: Positive easement Negative easement It pertains to that which imposes on the owner of It pertains to that which prohibits the owner of the the servient estate the obligation of allowing servient estate from doing something, which he something to be done or of doing it himself. could lawfully do if the easement did not exist. (Art. 616, NCC)

Q: Differentiate a Legal easement vs. Voluntary easement. A: Legal easement Voluntary easement It pertains to that which exists by law. It pertains to that which is formed by the will of the parties. (Art. 619, NCC) Q: What easements can be created through prescription? A: Only continuous and apparent easements may be created by prescription of ten (10) years of continuous use and enjoyment of easement. All other easements may be created by title, i.e., law, contracts, or last will. Q: How are easements extinguished? A: The following are the situations where an easement may be extinguished: (1) By merger of the same person of the ownership of the dominant and servient estates; (2) By nonuser for ten (10) years; (3) When either or both of the estates fall into such condition that the easement cannot be used; but it shall revive if the subsequent condition of the estates or either of them should again permit its use, unless when the use becomes possible, sufficient time for prescription has elapsed, in accordance with the provisions of the preceding number; 
 (4) By the expiration of the term or the fulfillment of the condition, if the easement is temporary or conditional; 
 (5) By the renunciation of the owner of the dominant estate; and 
 (6) By the redemption agreed upon between the owners of the dominant and servient estates. (Art. 631, NCC) 
 Q: What are the eight (8) legal easements? A: The following are the eight (8) legal easements: (1) Easements Relating to Waters; (2) Easement of Right of Way; (3) Easement of Light and View; (4) Easement of Party Wall; (5) Drainage of Buildings; (6) Intermediate Distances; (7) Easement against Nuisance; (8) Subjacent and Lateral Support. Q: What are the easements relating to waters? A: The following are easements relating to waters: (1) Natural drainage of waters; (2) Drainage of buildings (Right to divert the rain waters from one’s own roof to the neighboring estate); (3) Easement on riparian banks for navigation, floatage, fishing, recreation, salvage, and towpath (Art. 638 NCC, Sec. 51 P.D. a. Urban areas – within a zone of three (3) meters; b. Agricultural areas – twenty (20) meters c. Forest areas – forty (40) meters (Sec. 51, P.D. 1067, Water code) (4) Easement of a dam (Art. 639, CC); Requisites: a. Authority secured from the DPWH (Art. 38, RD. 1067); and b. Payment of proper indemnity to owner of servient estate (Art. 639, CC). (5) For drawing water or for watering animals (Art. 640-641, CC); a. It must be imposed only for reasons of public use; b. It must be in favor of a town or village; and c. There must be payment of proper indemnity. (Art. 640, CC) NOTE: Width of easement — 10 meters (Art. 657, par. 3) (6) Aqueduct (Art 644, CC); and Requisites:

(a) Proof that owner of the dominant estate can dispose the water and that it is sufficient for use intended; (b) Proof that the proposed right of way is the most convenient and least onerous to third persons; and (c) Indemnity to owner of the servient estate. (Art. 643, CC) (7) Construction of a stop lock or sluice gate (Art. 647, CC). Q: What are the easements relating to waters? A: The following are easements relating to waters: (1) Natural drainage of waters; (2) Drainage of buildings (Right to divert the rain waters from one’s own roof to the neighboring estate); Q: What are the requirements by law to grant right of way? A: The following are the requirements: (1) The dominant estate is surrounded by other immovables and is without an adequate outlet to a public highway; (2) The dominant estate pays proper indemnity; (3) The isolation was not due to the proprietor’s (dominant estate owner’s) own acts; and (4) The right of way claimed is at a point least prejudicial to the servient estate. Q: Who has the burden of proving the above-mentioned requirements? A: The burden of proving the foregoing pre-requisites lies on the owner of the dominant estate. Q: In determining where the easement shall be imposed, what is the rule? A: In easement of right of way, that easement where the way is shortest and will cause least prejudice shall be chosen. However, if the two circumstances do not concur in a single tenement, the way where damages will be least shall be used even if not the shortest route. This is so because least prejudice prevails over shortest distance. Q: What is an easement of light and view? A: It is a right to make openings in one’s wall to admit light and to make projections to afford a view upon or towards an adjoining land or tenement. (Arts. 669-670, NCC) Q: What are the restrictions on easement of light and view? A: (1) Direct view: Observe distance of 2 meters between the wall or the projection and the contiguous property (Art. 670, NCC); (2) Side or oblique view: Observe distance of 60 centimeters between the 2 properties (Arts. 670-671, NCC) Q: What is an easement of party wall? A: It is a wall used jointly by 2 parties under easement agreement, erected upon a line separating 2 parcels of land, each of which is a separate real estate (BP Blg. 220) Q: When is the easement of party wall presumed? A: (1) In dividing walls of adjoining buildings up to the point of common elevation; (2) In dividing walls of gardens or yards situated in cities, towns, or in rural communities; (3) In fences, walls and live hedges dividing rural lands (Art. 659, NCC) Q: Explain the rule on easement of drainage of buildings. A: 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 2 or more persons, one of whom is the owner of the roof (Art. 674, NCC) Q: Explain the rule on easement to receive water falling from one’s roofs to fall on roof of another. A: The owner of a tenement or a piece of land, subject to the easement of receiving water falling from roofs, may build in such manner as to receive the water upon his own roof or give it another outlet in accordance

with local ordinances or customs, and in such a way as not to cause any nuisance or damage whatever to the dominant estate (Art. 674, NCC) Q: Explain the rule on easement against nuisance. A: 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, NCC) Q: What is a nuisance? A: It is any act, omission, establishment, business, condition of property, or anything else which: (1) Injures or endangers the health or safety of others; (2) Annoys or offends the senses; (3) Shocks, defies or disregards decency or morality; (4) Obstructs or interferes with the free 
 passage of any public highway or street, or any body of water; or 
 (5) Hinders or impairs the use of property. (Art 694, NCC) 
 Q: Distinguish nuisance per se from nuisance per accidens. Nuisance per se Nuisance under any and all circumstances Constitutes a direct menace to public health or safety May be abated summarily under the undefined law of necessity.

Nuisance per accidens Depends upon certain conditions and circumstances Its existence is a question of fact Cannot be abated without due hearing in a tribunal authorized to decide whether such a thing does in law constitute a nuisance

Q: Differentiate a public nuisance vis-à-vis private nuisance. A: Public nuisance Private nuisance It pertains to a nuisance, which affects a community It pertains to a nuisance that violates only private or neighborhood or any considerable number of rights and produces damage to only one or a few persons. persons. (Salao et al v. Santos et al, 1939) Q: What are the remedies against a public nuisance? A: (1) Prosecution under the Revised Penal Code or a municipal ordinance; (2) Civil action; or (3) Abatement, without judicial proceedings (Art. 699, NCC) Q: What is the Doctrine of Attractive Nuisance? A: It is where 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, Inc. v. Balandan et al, 1952) Q: What are the modes of acquiring ownership? (OLDTIPS) A: (1) Occupation (2) Law (3) Donation (4) Traditional Delivery – Ownership of the thing sold is acquired by the vendee from the moment of delivery, or in any other manner signifying an agreement that possession is transferred. (Art. 1497, NCC) a. Real or actual – consists in placing the thing sold in the control and possession of the vendee. b. Legal or constructive: i. Symbolical tradition

ii. Traditio longa manu – by mere consent or agreement of the contracting parties, if the thing sold cannot be transferred to the possession of the vendee at the time of the sale. iii. Traditio brevi manu – if the vendee already had possession of the object even before the sale; iv. Traditio constitutum possessorium – the seller remains in possession of the property in a different capacity. c. Quasi-tradition; and d. By operation of law. (5) Intellectual Creation, Prescription (Acquisitive); and (6) Succession. (Art. 712, NCC) Q: Distinguish occupation from possession. A: Occupation can take place only with respect to property without an owner while possession can refer to all kinds of property, whether with owner or without an owner. Occupation itself, when proper, confers ownership but possession does not by itself give rise to ownership. (2007 Bar) Q: Explain how ownership is acquired by ownership of a thing res nullius. A: Occupation is a mode of acquiring ownership by the apprehension of a corporeal thing which has no owner, by a person having capacity for the purpose, with intent to appropriate it as his, and according to the rules established by law. Q: What are the requisites for acquiring ownership through occupation? A: (1) There must be seizure of a thing which is appropriable by nature; (2) The thing must be without owner; (3) The subject must have the intention to acquire ownership and must have the necessary capacity to consent; (4) There must be an act of taking possession of the thing. NOTE: The ownership of a piece of land cannot be acquired by occupation Reason: When the land is without owner, it pertains to the Stat Q: What is a donation? A: It is an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another, who accepts it. (Art. 725, NCC) Q: Differentiate donation mortis causa vs. donation inter vivos. A: Mortis causa Donation inter vivos Those where the donor intends the donation to take Donations that are to take effect upon the death of effect during his lifetime, upon concurrence of the the donor, and partakes the nature of testamentary formal requirements and the conditions of the provisions. (Art. 728, NCC donation.. (Art. 729, NCC) It is governed by the rules established in the Laws on It is governed by the rules on ordinary donations. Succession. Q: What are the forms of donations? A: It depends.  If it pertains to the donation of movable property: o IF the value is greater than Php 5,000, then the donation and acceptance must be in writing; otherwise it is void. o IF the value is less than Php 5,000, and made in writing, then simultaneous delivery is required. If in writing, it is valid with or without simultaneous delivery.  If it pertains to the donation of immovable property: o Donation must always be in a public document.

o

Acceptance may be made either in the same deed of donation or in a separate public document done during the lifetime of the donor, wherein the donor is notified thereof in an automatic form, and such step is noted in both instruments.

Q: What are the grounds for the revocation of a donation? A: The grounds for revocation are as follows: (1) Failure to comply with any condition imposed upon the donee (Art. 764, NCC); (2) Acts of ingratitude of the donee: a. If the donee commits an offense against the person, honor, or property of the donor, his wife or children under his parental authority; b. If the donee imputes to the donor any criminal offense or act involving moral turpitude, unless the crime has been committed against the donee himself, his wife or children under his authority; and c. If he unduly refuses him support when the donee is legally or morally bound to give support to the donor. (Art. 765, NCC) Q: What are the grounds for the reduction of a donation? A: The grounds are as follows: (1) Inofficious donations, that is, when the donor donated much more that what he could lawfully donate by law, i.e. donor donated more than the free portion of his estate; (2) Supervening birth, reappearance of child supposed to be dead, and adoption of a minor by donor who was childless at the time he made the donation. (Art. 760 and 761, NCC) Q: What are the prescriptive periods for revocation? A: The prescriptive periods are as follows: (1) For acts of ingratitude – One (1) year from the time the donor had knowledge of the fact and it was possible for him to bring action. (Art. 769, NCC); (2) For violation of condition – Four (4) years from the time the condition imposed by the donor was violated. (Art. 764, NCC); (3) For inofficious donations – Five (5) years; (4) For supervening birth, survival, or adoption of a child – Four (4) years from the birth of the first child, or from his legitimation, recognition or adoption, or from the judicial declaration of his filiation, or from the time information was received regarding the existence of the child believed dead. (Art. 763, NCC) Q: What is the effect of illegal and impossible conditions? A: Illegal and impossible conditions in simple and remuneratory donations shall be considered as not imposed. (Art. 727, NCC) Q: Can a null and void donation be ratified? A: No. It cannot be ratified by the acquiescence of the parties. The fact that nobody objected to the donation is of little consequence. The circumstance that parties to a void contract choose to ignore its nullity can in no way enhance the invalid character of such contract. It is axiomatic that void contracts cannot be the subject of ratification, either express or implied. The legal maxim nemo dat quod non habet applies to this instance (one cannot give what he doesn’t have). (Monteroso vs. CA, 2008) Q: Differentiate acquisitive prescription vis-à-vis extinctive prescription. A: The former pertains to the acquisition of a right by the lapse of time. It is based on the assertion by the usurper of an adverse right for such a long time, uncontested by the true owner. The effect is that it results in the acquisition of ownership or other real rights in a person as well as loss of said ownership or real rights in another. The latter pertains to the loss of a right of action by the lapse of time. It is based on probability that the alleged right which accrued in the distant past never existed or has already been extinguished. It results in the loss of a real or personal right, or bars the cause of action to enforce said right. Q: What is the prescriptive period for acquiring ownership over movables? A: 4 years if in good faith, and 8 years if in bad faith.

Q: What is the prescriptive period for acquiring ownership over immovables? A: 10 years if in good faith, and 30 years if in bad faith. Q: What are the instances where prescription is not available? A: If the movable is possessed through a crime, if the property stems from a void contract, and in terms of coownership whereby the separating co-owner still recognizes, impliedly or expressly, the co-ownership. Q: Explain the concept of “prescription or limitation of actions.” A: It refers to the time within which an action may be brought, or some act done, to preserve a right. Q: What is the Statute of Limitations? A: (1) Acts limiting the time within which actions shall be brought; (2) Do not confer any right of action, but enacted to restrict the period within the right might be asserted; (3) Not matters of substantive right, but are available only as a defense.

SUCCESSION Q: What is succession? A: Succession is a mode of acquisition by virtue of which the property, rights, and obligations to the extent of the value of the inheritance, of a person are transmitted through his death to another or others either by his will or by operation of law. (Art. 774, NCC) Q: How are successors classified? A: Successors can either be: (1) Heirs a. Voluntary Heirs: Those instituted by the testator in his will, to succeed to the inheritance or the portion thereof of which the testator can freely dispose. b. Compulsory or forced heirs: Those who are to succeed by operation of law to some portion of the inheritance, in an amount predetermined by law, known as the legitime. c. Legal or intestate heirs: Those who succeed to the estate of the decedent who dies without a valid will, or to the portion of such estate not disposed of by will. (2) Devisees/Legatees a. Devisees: Persons to whom gifts of real properties are given by will. b. Legatees: Persons to whom gifts of personal properties are given by will. Q: What is a will? A: A will is an act whereby a person is permitted, with the formalities prescribed by law, to control to a certain degree the disposition of his estate to take effect after his death. (Art.783, NCC) Q: What are the characteristics of a will? A: (1) Unilateral (2) Strictly personal act (3) Free and voluntary act (4) Ambulatory or revocable (5) Formal and solemn (6) An act mortis causa (7) Individual act. Q: What are acts which cannot be left to the discretion of a third person? A: Duration or efficacy of the designation of heirs, devisees or legatees: (1) Determination of the portions which they are to take, when referred to by name; and (2) Determination of whether or not the testamentary disposition is to be operative. (Arts. 785, 787, NCC)

Q: What are acts that may be entrusted to a third person? A: (1) Distribution of specific property or sums of money that the decedent may leave in general to specified classes or causes; and (2) Designation of the persons, institutions or establishments to which such properties or sums are to be given or applied. (Art. 786, NCC) Q: What law governs the extrinsic validity of wills (validity of form)? A: As to the time: Extrinsic validity of the will is determined by the laws in force as to the required form of the will at the time the will was made. (Art. 795, NCC) As to the place: Testator is Filipino (1) Philippine law; or (2) Law of the country where he may be (Art. 815 in relation to Art. 17, NCC) Testator is an alien residing abroad (1) Law of the country where he resides; or (2) Law of the country where he is a citizen (Art. 816, NCC) Testator is an alien who executed a will in the (1) Law of the country where he is a citizen; or Philippines (2) Philippine law (Art. 817, NCC) Q: What law governs the intrinsic validity of wills (validity of testamentary provisions)? A: As to the time: The law in force at the time of the testator’s death governs successional rights. (Art. 2263, NCC) As to the place: The national law of the testator governs, regardless of where the will was executed or where the testator died. (Arts. 15, 17, 815-817, NCC) Q: Are joint wills allowed for Philippine citizens? A: No. Filipino citizens cannot execute joint wills, with other Filipinos or even with foreigners. According to Article 819, joint wills, executed by Filipinos in a foreign country shall not be valid in the Philippines, even though authorized by the laws of the country where it may have been executed. Q: Is it necessary that the testator be in full possession of his reasoning faculties? A: No. It shall be sufficient if at the time of making the will, he knows: (1) The nature of the estate to be disposed of; (2) The proper objects of his bounty; and (3) The character of his testamentary act. (Art. 799, NCC) Q: Explain the presumption of sound mind. A: The law presumes that the testator is of sound mind, therefore the burden of proving otherwise is shifted unto the person who opposes the probate of the will. But if the testator, one month or less, before making his will, was publicly known to be insane, the person who maintains the validity of the will must prove that the testator made it during a lucid interval. (Art. 800, NCC) Q: What are the common formalities between holographic and notarial wills? A: (1) The will must be in writing, and (2) It must be executed in a language known to the testator. (Art. 804, NCC) Q: State the additional formalities for notarial wills. A: (1) Subscription – It must be subscribed at the end thereof by the testator himself or by the testator’s name written by some other person in his presence, and by his express direction, in the presence of the three subscribing witnesses and of one another. (2) Subscription and attestation by witnesses – It must be attested by three (3) or more credible witnesses in the presence of the testator and of one another.

(3) Signed by the testator and witnesses in every page – The testator or the person requested by him to write his name and the instrumental witnesses of the will, shall also sign, as aforesaid, each and every page thereof, except the last, on the last margin. (4) Pages must be numbered – All the pages shall be numbered correlatively in letters placed on the upper part of each page. (5) Must have an Attestation Clause – It must expressly state the following: a. Number of pages used upon which the will is written; b. The fact that the testator signed the will and every page thereof, or caused some other person to write his name, under his express direction, in the presence of the instrumental witnesses; and c. That the witnesses witnessed and signed the will and all the pages thereof in the presence of the testator and of one another. (6) Must be notarized – Every will must be acknowledged before a notary public by the testator and the witnesses. (Art. 805, NCC) Q: Is the attestation clause the act of the testator? A: No. It is an act of the witnesses. Hence, even if the language used in the attestation clause is not known to the witnesses, it shall be interpreted to them. Moreover, it is not necessary for the testator to sign the attestation clause. Q: What is the true test of presence of the testator and the witnesses in the execution of a will? A: It is 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 (Nera v. Rimando). Q: What is the doctrine of substantial compliance? A: Defects and imperfections in the form of attestation clause or the language used therein, in the absence of bad faith, forgery, or fraud or undue and improper pressure and influence, shall not render the will invalid if it is proved that the will was in fact executed and attested in substantial compliance with all the requirements of Art. 805. This rule only applies to the attestation clause which is not an act of the testator. (Art. 809, NCC). Q: What is the rule for the probate of a holographic will? A: It shall be necessary that at least one witness who knows the handwriting and signature of the testator explicitly declare that the will and the signature are in the handwriting of the testator. If contested, at least three witness may be required. In Azaola v. Singson, the Court ruled that the three-witness rule in case of a contested probate is not mandatory but merely directory. In any case, the trial court may resort to expert testimony. (Art. 811, NCC). Q: What is the effect of an unauthenticated alteration in a holographic will? A: Ordinarily, such would not have invalidated the will as a whole but at most only with respect to the particular words erased, corrected or interlined. However, when the holographic will only had one substantial provision which was altered without the authentication of the testator’s full signature, then the entire will is voided since nothing remains in the will that could be given effect. (Kalaw v. Relova) Q: What is the effect if a witness in a notarial will receives an economic benefit such will? A. Any devise or legacy given by the will to such witnesss, his spouse, his parents, his children, or any other person claiming under him, is voided; but he is still a competent witness to the will. This rule will not apply if there are three other competent witnesses to the will other than him. (Art. 823, NCC). Q: What is a codicil? A: It is a supplement or addition to a will, made after the execution of a will and annexed to be taken as part thereof, by which any disposition made in the original will is explained, added to or altered. (Art. 825, NCC). For it to be effective it must follow the formalities of a holographic or notarial will. (Art. 826, NCC) Q: What are the different modes of revocation of a will? A: A will may be revoked by the testator at any time before his death. Any waiver or restriction of this right is void. He can do this by: (1) By implication of law;

(2) Subsequent document; and (3) Physical destruction of a will. a. Overt act of physical destruction; b. Animus revocandi (intent to revoke); c. Testamentary capacity of the testator at the time of revocation; and d. Performed by the testator or other person in his presence and express direction. (Art. 830, NCC) Q: What is the doctrine of presumed revocation? A: Where a will which cannot be found was last seen to be in the possession of the testator, the disputable presumption is that the same was cancelled or destroyed. Such presumption also arises where it is shown that the testator had ready access to the will and it cannot be found after his death. (Gago v. Mamuyac) Q: Explain the concept of republication and revival of wills. A: It is the re-execution and re-establishment by a testator of a will which is void or a will which the testator had once revoked. There are two ways to republish a will: (1) Reproducing the contents of a previous will which was void as to its form. (2) Execution of a codicil referring to a previous will has the effect of republishing the will as modified by the codicil. Revival of a will is the restoration to validity of a previously revoked will by operation of law. (Jurado) Q: What is the rule on implied revocation made through a second will? A: If the second valid will expressly revoked the first will, the revocation of the second will does not revive the first will unless revived by another will or codicil. However, if the second valid will impliedly revoked the first will, the revocation of the second will results in the revival of the first will. (Art. 837, NCC). Q: What is the doctrine of dependent relative revocation? A: Where the act of destruction is connected with the making of another will, so as fairly to raise the inference that the testator meant the revocation of the old 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. (Molo v. Molo) Q: What is probate and why must a will be probated? A: It is a special proceeding mandatorily required for the purpose of establishing the validity of a will. A will must be probated in order for it to pass either real or personal property. (Art. 838, NCC) Q: Enumerate the grounds for disallowance of a will. A: (1) Formalities required by law have not been complied with; (2) Testator was insane, or otherwise mentally incapable of making a will, at the time of its execution; (3) Executed through force or under duress, or the influence of fear or threats; (4) Procured by undue and improper pressure and influence, on the part of the beneficiary or of some other person; (5) Signature of the testator was procured by fraud; and (6) Testator acted by mistake or did not intent that the instrument he signed should be his will at the time of affixing his signature thereto. (Art. 839, NCC) Q: Explain the concept of institution of heirs. A: Institution of an heir is an act by virtue of which a testator designates in his will the person or persons who are to succeed him in his property, transmissible rights, and obligations. (Art. 840, NCC) Q: What are the presumptions in the institution of heirs? A: (1) Equality of shares - heirs instituted without designation of shares shall inherit in equal parts. (Art. 846, NCC) (2) Individuality of designation - When the testator institutes some heirs individually and others collectively, those collectively designated shall be considered as individually instituted. (Art. 847, NCC)

(3) Institution is simultaneous - When the testator calls to the succession a person and his children they are all deemed to have been instituted simultaneously and not successively. (Art. 849, NCC) Q: Explain the rules on institution based on a false cause A: As a general rule, the institution of the heir is valid and the false cause is deemed not written. However, if it appears on the face of the will that the testator would not have made such institution if he had known the falsity of the cause, then the institution of heirs is invalidated. (Art. 850, NCC) Q: What is preterition? A: It is the omission of one, some or all of the compulsory heirs in the direct line, whether living at the time of the execution of the will or born after the death of the testator. Such will annul the institution of heirs. However, the devises and legacies shall be valid insofar as they are not inofficious. (Art. 854, NCC) Q: What are the requisitions of preterition? A: (1) Omitted heir must be a compulsory heir in the direct line; (2) Complete and total omission (did not receive any devise, legacy, or an advance in his legitime through donations inter vivos); and (3) Omitted compulsory heir survives the testator. (Art 854, NCC) Q: Can a spouse be preterited? How about an adopted child? A: No, a spouse cannot be preterited but an adopted child can. A spouse is not a compulsory heir in the direct line. On the other hand, an adopted child by virtue of law is treated as if he were a legitimate child of the adopter. (Acain v. IAC) Q: Explain and enumerate the kinds of substitution of heirs. A: Substitution is the appointment of another heir so that he may enter into the inheritance in default of the heir originally instituted. (1) Simple or common - takes place when the heir instituted predeceases the testator, repudiates the inheritance, or is incapable to succeed. (Art. 859, NCC) (2) Brief or compendious - when two or more persons may be substituted for one; and one person for two or more heirs. (Art. 860, NCC) (3) Reciprocal - one heir designated as substitute for an instituted heir while the latter is simultaneously instituted as substitute for the former. (Art. 861, NCC) (4) Fideicommissary - the fiduciary or first heir instituted is entrusted with the obligation to preserve and to transmit to a second heir the whole or part of the inheritance, shall be valid and shall take effect provided such substitution does not go beyond one degree from the heir originally instituted, and provided further, that the fiduciary or first heir and the second heir are living at the time of the death of the testator. (Art. 865, NCC) Q: What are the rules on a fideicommissary substitution? (1) Both the fiduciary and the fideicommissary must possess the capacity to inherit from the testator. Note that the fideicommisary does not inherit from the fiduciary, but from the testator himself (although his inheritance is suspended until the fiduciary’s death); (2) Fideicommissary must be expressly made; and (3) The substation must not go beyond one degree apart from the fiduciary. Q: What is the rule on the testator’s prohibition on inalienability of the estate? A: The dispositions of the testator declaring all or part of the estate inalienable for more than 20 years are void. It is only valid until 20 years. (Art. 870, NCC). Q: What are the various prohibited or void conditions? A: (1) Conditions cannot be imposed on legitimes; (2) Impossible conditions and those contrary to law or good customs (note: condition is deemed not written, but testamentary provision is still valid); (3) An absolute condition not to contract a first marriage;

(4) An absolute condition not to contract a subsequent marriage, unless imposed upon a widow by the deceased spouse or by the latter’s ascendants or descendants; and (5) Disposition Captatoria – any disposition made upon the condition that the heir shall make some provision in his will in favor of the testator or of any other person shall be void. Q: What is a modal institution? A: A modal institution imposes a specific obligation which the heir must comply with. While a mode obliges the heir to comply with the stated object of the institution, the application of the property given, or the charge imposed, it does not defer or suspend the efficacy of the institution unlike a conditional one. Q: Explain the concept of legitime. A: It is that part of the testator’s property which he cannot dispose of because the law has received it for certain heirs who are, therefore, called compulsory heirs. (Art. 886, NCC) Q: What are the general principles as regards legitimes? A: The general principles as regards legitimes are the following: (1) Those in the direct descending line shall exclude those in the direct ascending and collateral lines. (2) Rule of proximity - Nearer relatives excludes farther relatives, saving the right of representation. (3) Rule of equality of shares – All those in the same class shall inherit in equal shares. In case of legitimate ascendants, the legitime is divided equally between the maternal and paternal lines. (4) Iron curtain rule – An illegitimate child cannot inherit intestate from the legitimate relatives of his legitimate parents, and vice versa (Art. 992, NCC) Table of legitimes: Survivors

Legitimate child only (a) 1 Legitimate child (b) Surviving spouse (a) 2 or more Legitimate children; (b) Surviving spouse (a) 2 or more Legitimate children (b) Surviving spouse (c) Illegitimate children (a) Surviving spouse (b) Illegitimate child (a) Legitimate parent/s

Share of Legitimate Child (divided by number of LC) 1/2

Share Surviving Spouse

of

Share of Legitimate Parent/s

Share of Illegitimate Parent/s

Basis/es

-

Share of Illegitimate Child (divided by number of IC) -

excluded

excluded

1/2

1/4

-

excluded

excluded

Art. 888, NCC Art. 892, NCC

1/2

Equal to the share of 1 Legitimate child

-

excluded

excluded

Art. 892, NCC

1/2

Equal to the share of 1 Legitimate child

Half of the share of 1 Legitimate Child

excluded

excluded

Art. 892, 895, NCC

-

1/3

1/3

excluded

excluded

Art. 894, NCC

-

1/8

1/4

1/2

excluded

Art. 896, 899, NCC

(b) Surviving spouse (c) Illegitimate child (a) Legitimate parent/s only (a) Illegitimate child/ren only (a) Surviving spouse only

(a) Legitimate parent/s (b) Surviving spouse (a) Illegitimate parent/s only (a) Illegitimate parent/s (b) Surviving spouse

-

-

-

1/2

excluded

Art. 889, NCC

-

-

1/2

excluded

excluded

Art. 901, NCC

-

-

-

-

Art. 900, NCC

-

Generally, 1/2; If married in articulo mortis and decedent died within 3 mos, 1/3; If married in articulo mortis & died within 3 mos, but have been cohabiting for more than 5 years, 1/2 1/4

-

1/2

excluded

Art. 893, NCC

-

-

-

-

1/2

Art. 903, NCC

-

1/4

-

-

1/4

Art. 903, NCC

Adopters, Illegitimate Children & Legitimate Parents/Ascendants or Illegitimate Parents Art. 190, Family Code Heirs Adopter IC SS

Legitime 1/3 1/3 1/3

Q: What is reserva troncal? What are its requisites? A: An ascendant who inherited by operation of law any property from his descendant, which the latter acquired gratuitously from another ascendant, brother, or sister, to reserve such property in favor of the relatives of such descendant within the third degree from the same line where the property came. Requisites: (1) Ascendant/brother/sister (origin) gratuitously transfers property to a descendant/brother/sister; (2) Descendant/brother/sister (prepositus) transfers property by operation of law to an ascendant; (3) Ascendant (reservor or reservista) is required to reserve the property for the benefit of the legitimate relatives of the prepositus within the third degree of consanguinity from the line of origin (reserves or reservatorio) Q: What is disinheritance? A: It is the act of the testator in depriving a compulsory heir of his inheritance for causes expressly stated by law. (Art. 915, NCC) Q: What are the requisites of disinheritance? A: The following are the requisites of disinheritance: (1) Only against a compulsory heir; (2) Effected only through a valid will; (3) For a cause expressly stated by law; (4) Cause must be stated in the will itself; (5) Cause must be certain and true; (6) Unconditional; (7) Total; and (8) Disinherited heir must be designated in such a manner that there can be no doubt as to his identity. Q: What are the effects of disinheritance? A: The following are the effects of disinheritance: (1) Deprivation of compulsory heir; (2) Children/descendants of the person disinherited shall take his or her place and shall preserve the rights of compulsory heirs with respect to the legitime; and (3) Disinherited parent shall not have the usufruct or administration of the property which constitutes the legitime (Art. 915-923, NCC) Q: What is the effect of an invalid disinheritance? A: The institution of heirs may be annulled insofar as it may prejudice the person disinherited, but the devises and legacies shall be valid to such extent as will not impair the legitime. (Art. 918, NCC) Q: What are the characteristics of acceptance and repudiation of inheritance? A: The following are the characteristics of acceptance and repudiation of inheritance: (1) Acceptance and repudiation must be voluntary and free (Art. 1041, NCC); (2) They are irrevocable except if there is vitiation of consent or an unknown will appears (Art. 1056, NCC); and (3) They have a retroactive effect (Art. 1042, NCC) Q: When is a legacy or devise deemed without effect? A: (1) Testator transforms the thing bequeathed that it does not retain the form or denomination it had; (2) Testator alienates the thing bequeathed; (3) Thing bequeathed is totally lost during the lifetime of the testator, or after his death without the heir’s fault. (Art. 957, NCC) Q: When does legal or intestate succession take place? A: (1) Decedent died without a will, void will, or will that lost validity; (2) Will does not institute an heir, or dispose of all the property belonging to the testator (partial)

(3) Suspensive condition to the institution of heir does not happen or was not fulfilled (4) Heir dies before the testator or repudiates the inheritance, there being no substitution and no right of accretion (5) Heir instituted is incapable of succeeding (Art. 960, NCC) Q: What are the fundamental rules on intestacy? A: (1) Rule of proximity a. General rule: Nearest excludes the farthest b. Exception: nieces and nephews of the deceased excludes the uncles and aunts of the latter c. Rule of proximity yields to the right of representation d. Relatives in the descending line are preferred over relatives in the ascending line e. Relatives in the direct line are preferred over relatives in the collateral line (2) Rule of equal division a. General rule: heirs of the same degree shall inherit in equal shares b. Exception: brothers and sisters of the deceased who are full-blood are entitled to twice the share of those of half-blood c. Exception: in the ascending line, shares are divided equally between the paternal and maternal lines to be divided per capita (3) Right of representation a. Representative is raised to the place and degree of the person represented, and the former acquires the rights which the latter would have if he were living of if he could have inherited b. Exception: No right of representation in the ascending line c. Exception: An adopted child cannot represent his adoptive parent because the artificial relationship created by adopted is limited to the adopter and the adopted. d. Right of representation in the collateral line only takes place in favor of the children of the brothers and sisters of the deceased (full or half blood) e. Representative must be capacitated to inherit from the decedent. (4) Iron curtain rule a. Illegitimate child cannot inherit intestate from the legitimate relatives of his legitimate father or mother. In the same way, such legitimate relatives also cannot inherit from the illegitimate child intestate. b. Exception: if the illegitimate child’s parent is also illegitimate (line of illegitimacy), then the rule is not applicable. Q: May a repudiator be a representative? May a repudiator be represented? A: Yes, a repudiator may represent the person whose inheritance he has renounced. However, the repudiator may not be represented by his heirs. (Art. 976, 977, NCC) Q: What is the order of intestate succession? A: Order of intestate succession to a legitimate decedent First Legitimate children and their legitimate descendants Second In default, legitimate parents and other legitimate ascendants Third Illegitimate children and their descendants, whether legitimate or illegitimate Fourth Surviving spouse Fifth Legitimate brothers, sisters, nephews and nieces (may concur with the surviving spouse) Sixth Other legitimate collateral relatives up to the fifth degree Seventh The State Order of intestate succession to an illegitimate decedent First Legitimate children and their legitimate descendants Second Illegitimate children and their descendants, whether legitimate or illegitimate Third In default, illegitimate parents (no ascendants) Fourth Surviving spouse Fifth Illegitimate brothers, sisters, nephews and nieces (may concur with the surviving spouse) Sixth The State

Q: What is the right of accretion? A: 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, co-devisee, or co-legatee. (Art. 1015, NCC) Q: What are the requisites of accretion? (1) Two or more persons are called to the same inheritance or same portion thereof pro indiviso; (2) One of the persons predecease, renounce, or is incapacitated to receive the inheritance; and (3) There must be no substitution or right of representation. Q: How can a person be capacitated to succeed by will or by intestacy? A: The following are the requisites of capacity to succeed by will or by intestacy: (1) Heir, legatee/devisee must be living or in existence at the moment the succession opens, except in the case of representation (Art. 1025, NCC); and (2) Must not be incapacitated or disqualified by law to succeed. (Art. 1024[a], NCC) Q: Who are incapable of succeeding? A: (1) Those incapable under Art. 1027 by reason of undue influence; (2) Those incapable under Art. 1032 by reason of unworthiness; (3) Those validly disinherited. Q: What are the requisites for the acceptance and/or repudiation of inheritance? A: The following are the requisites of acceptance and repudiation of inheritance: (1) Certainty of death of the decedent; and (2) Certainty of the right to the inheritance (Art. 1043, NCC) Q: When is an inheritance deemed accepted? A: (1) Heir sells, donates, or assigns his right to a stranger, or to his co-heirs or to any of them; (2) Heir renounces the same gratuitously for the benefit of one or more of his co-heirs; (3) Heir renounces it for a price in favor of all his co-heirs indiscriminately. Q: What is the rule in case an heir repudiates his inheritance in a mixed succession? A: If a person who is called to the same inheritance as an heir by will and intestate repudiates the inheritance in his capacity as a testamentary heir, he is understood to have repudiated it in both capacities. Should he repudiate it as an intestate heir, without knowledge of his being a testamentary heir, he may still accept it in the latter capacity. Q: What is collation? A: Collation refers to the act of restoring to the common mass of the hereditary estate, either actually or fictitiously, any property or right, which a compulsory heir, who succeeds with other compulsory heirs, may have received by way of donation or any other gratuitous title from the decedent, during the lifetime of the latter, but which is understood for legal purposes as an advance of his legitime (Art. 1061, NCC) Q: What can be collated? A: The following can be collated: (1) Property or right received by gratuitous title during the testator’s lifetime (Art. 1061, NCC); (2) All that was received from the decedent during his lifetime (ibid); (3) 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, NCC); and (4) Any sums paid by a parent in satisfaction of the debts of his children, election expenses, fines, and similar expenses (Art. 1069, NCC)

Q: Explain partition of the estate. A: Partition is the separation, division and assignment of a thing held in common among those to whom it may belong. The thing itself may be divided, or its value (Art. 1069, NCC) Q: Who may effect partition? A: The following may effect partition: (1) Decedent during lifetime by an act inter vivos or by will (Art. 1080, NCC); (2) Heirs (Art. 1083, NCC); (3) Competent court (ibid); and (4) 3rd person designated by the decedent (Art. 1081, NCC). Q: Who can demand partition? A: The following may demand partition: (1) Compulsory heir (Art. 1061, NCC); (2) Voluntary heir (Art. 1084, NCC); (3) Legatee or devisee; and (4) Any person who acquired interest in the estate.

OBLIGATIONS AND CONTRACTS Q: What is an obligation? A: An obligation is a juridical necessity to give, to do or not to do. (Art. 1156, NCC) Q: What are the elements of an obligation? A: The elements of an obligation are the following: (1) Juridical or legal tie: the efficient cause established by various sources of obligations (law, contracts, quasi-contracts, delicts and quasi-delicts); (2) The subject persons who, viewed from the demandability of the obligation, are the: a. Active subject: known as the obligee or creditor who can demand the fulfillment of the obligation, b. Passive subject: known as the obligor or debtor against whom the obligation is juridically demandable; and (4) Object: the prestation or conduct required to be observed such as to give, to do, or not to do (The Wellex Group, Inc. v U-Land Airlines, Co, GR 167519, January 14, 2015). Q: What are the requisites of a valid obligation? A: The requisites of a valid obligation are the following: (1) It must be licit; (2) It must be physically and juridically possible; (3) It must be determinate or determinable; and (4) It must have pecuniary value. a. Vinculum Juris – juridical/legal tie which binds the parties to the obligation; b. Cause – reason for the existence of the obligation. Q: What are the sources of obligations? A: The sources of obligations are the following: (1) Law; (2) Contracts; (3) Quasi-contracts; (4) Delicts; (5) Quasi-delicts. (Art. 1156, NCC) Q: What are the kinds of quasi-contracts? A: The kinds of quasi-contracts are as follows: (1) Negotiorium Gestio, which exists when one: a. Voluntarily takes charge of the agency or management of the business or property of another, and

b. Without any power from the latter (2) Solutio Indebiti, which exists when: a. Something is received; b. When there is no right to demand it; and c. It was unduly delivered through mistake Q: What are the requisites of a quasi-delict? A: To sustain a claim based on a quasi-delict, the following requisites must concur: (1) Damage suffered by the plaintiff; (2) Fault or negligence of the defendant; (3) Causal connection between the fault or negligence of defendant and the damage incurred by the plaintiff (Guillang v Bedania, GR 162987, May 21, 2009). Q: What is the nature of obligations? A: The nature of obligations are the following: (1) Personal – obligations to do or not to do (Art. 1156, NCC); a. Positive – obligation to do b. Negative – obligation not to do (2) Real – obligations to give (Art. 1156, NCC). a. Specific – object is particularly designated or physically segregated from all other things of the same class b. Generic – object is designated by its class or genus c. Limited generic – generic objects confined to a particular class Q: What are the duties of a debtor in determinate obligations? A: The debtor shall have the following duties: (1) To perform the obligation specifically or to deliver the thing specified; (2) To preserve or take care of the thing with the proper diligence of a good father of a family; (3) To deliver the fruits of the thing; (4) To deliver its accessions and accessories, even though they may not have been mentioned; (5) To pay damages in case of breach of the obligation by reason of delay, fraud, negligence or contravention of the tenor of the obligation (Art. 1170, NCC). Q: What are the duties of the debtor in an obligation to give a generic thing? A: The duties of the debtor are the following: (1) To deliver the thing which is neither of superior or inferior quality (Art. 1246, NCC); and (2) To pay damages in case of breach of the obligation by reason of delay, fraud, negligence or contravention of the tenor of the obligation (Art. 1170, NCC) Q: When does the obligation to deliver the fruits of the thing arise? A: The general rule is that the obligation to deliver the fruits of the thing arises from the time of the perfection of the contract. The exceptions would be: (1) When the parties made a stipulation as regards the right of the creditor to the fruits of the thing; or (2) When the obligation is subject to a suspensive condition or period. In such cases, the obligation to deliver arises upon the fulfillment of the condition or the arrival of the period. Q: What is the rule on the delivery of the accessions and accessories? A: The general rule is that the obligation to give a determinate thing includes that of delivering all its accessions and accessories, even though they may not have been mentioned. The exception would be when there is contrary intention of the parties. (Art. 1166, NCC) Q: What is the rule on the delivery of the fruits? A: The creditor has a right to the fruits of the thing from the time the obligation to deliver it arises. However, there is no real right until the same has been delivered to him. (Art. 1164(2), NCC)

Q: What are the remedies of the creditor in case of non-performance in an obligation to give? A: (1) In Specific Real Obligation a. Demand specific performance or fulfillment of the obligation, with a right to recover damages (Art. 1165, NCC) b. Demand rescission or cancellation (in certain cases) of the obligation, also with right to recover damages (Art. 1170, NCC) c. Demand payment of damages only, where it is the only feasible remedy. (2) In Generic Real Obligation a. Demand specific performance, with a right to recover damages b. Ask that the obligation be performed by a third person at the expense of the debtor since the object is expressed only according to its family or genus (Art. 1165, NCC), with right to recover damages c. Demand payment of damages only, where it is the only feasible remedy. NOTE: If the prestation consists of an act where the personal and special qualification of the obligor is the principal motive for the establishment of the obligation, the remedy of the obligee is to proceed against the obligor for damages under Article 1170. Q: What are the remedies of the creditor in case of non-performance in an obligation to do? A: (1) If only the obligor can do (personalisimo): Demand payment of damages only. (2) If anyone else can do it (not personalisimo): a. Ask that the obligation be performed by a third person at the expense of the debtor with the right to recover damages (Art. 1167, NCC) b. Demand payment of damages, where it is the only feasible remedy. Q: What are the remedies of the creditor in case of non-performance in an obligation not to do or in an obligation not to give? A: (1) Ask that the obligation be performed by a third person at the expense of the debtor since the object is expressed only according to its family or genus (Art. 1168, NCC), with right to recover damages (2) Demand payment of damages only, where it is the only feasible remedy. Q: What are the different kinds of breach? A: The kinds of breach are: (1) Voluntary: When the debtor, in the performance of his obligation, is guilty of default (mora), fraud (dolo), or negligence (culpa), or in any other manner contravenes the tenor thereof. (2) Involuntary: When the debtor is unable to comply with his obligation because of a fortuitous event/force majeure (an event which cannot be foreseen, or which though foreseen, was inevitable.) (Art. 1174, NCC) Q: What are the kinds of breach through default or mora? A: The kinds of breach through mora are: (1) Mora Solvendi: Default on the part of the debtor (2) Mora Accipiendi: Default on the part of the creditor (3) Compensatio Morae: In reciprocal obligations, where both parties are in default. Q: What are the types of fraud or dolo? A: The types of fraud are Causal Fraud (Dolo Causante) and Incidental Fraud (Dolo Incedente). POINT OF COMPARISON As to Character

DOLO CAUSANTE Serious in character and without which the other party would not have entered into the contract.

DOLO INCIDENTE Not serious in character.

As to Inducement of the Other Party

Fraud in the execution of the contract. It is the cause which induces the party upon whom it is employed in entering into the contract.

As to Effect

It renders the contract voidable.

Fraud in the performance of an obligation by virtue on an existing contract. It is not the cause for inducing a party in entering into the contract. It renders the party who employed it liable for damages.

Q: What is a fortuitous event? A: These are extraordinary events which are unforeseeable or unavoidable. It is therefore, not enough that the event should not have been foreseen or anticipated, as is commonly believed but it must be one impossible to foresee or to avoid. The mere difficulty to foresee the happening is not impossibility to foresee the same. (Sicam v Jorge, GR 159617, August 8, 2007) Q: What are the requisites for one to be considered a fortuitous event? A: The requisites for one to be considered a fortuitous event are: (1) The event must be independent of the will of the debtor; (2) The event must be either unforeseeable or inevitable; (3) The event must be of such a character as to render it impossible for the debtor to fulfill his obligation in a normal manner; and (4) The debtor must be free of participation in, or aggravation of the injury to the creditor. Q: What are the effects of a fortuitous event? A: As a general rule, the debtor shall be exempt from liability if he is unable to comply with his obligation by reason of a fortuitous event. The following are the exceptions: (1) When it is expressly declared by law; (2) When it is expressly declared by stipulation or by contract; (3) When the nature of the obligation requires the assumption of risk (Art. 1174 and 1262, NCC); (4) When the object of the obligation is lost, and the loss is due partly to the fault of the debtor; (5) When the object of the obligation is lost, and the loss occurs after the debtor has incurred in delay; (6) When the debtor promised to deliver the same thing to two or more persons who do not have the same interest (Art. 1165 and 1262, NCC); (7) When the obligation to deliver arises from a criminal offense (Art. 1268, NCC); and (8) When the obligation is generic (Art. 1263, NCC). Q: What is a pure obligation? A: A pure obligation is one whose effectivity or extinguishment does not depend upon the fulfillment or nonfulfillment of a condition or upon the expiration of a term or period, and which, as a consequence is demandable at once. (Art. 1179, NCC) Q: What is a conditional obligation? A: A conditional obligation is one whose effectivity depends upon the fulfillment or nonfulfillment of a future and uncertain fact or event, or a past but uncertain event. (Art. 1181, NCC) Q: What is a suspensive condition? A: A suspensive condition (condition precedent) is a future and uncertain event, the happening or fulfillment of which will give rise to the obligation or the acquisition of a right. (Jurado) Q: What is a resolutory condition? A: A resolutory condition (condition subsequent) is a future or uncertain event upon the happening or fulfillment of which rights already acquired by virtue of the obligation are extinguished or lost. (Jurado) Q: What are the obligations that are immediately demandable? A: The following obligations are demandable at once: (1) Pure obligations (Art.1179(1), NCC) (2) Obligation subject to resolutory condition (Article 1179(2), NCC)

(3) Obligations with resolutory period (Article 1193(2), NCC) (4) Obligations subject to a condition not to do an impossible thing (Article 1183(2), NCC) Q: When is a condition potestative, casual, or mixed? A: The rules are as follows: (1) It is potestative: when the fulfillment of which depends upon the will of a party to the obligation. (2) It is casual: when its fulfillment depends on chance and/or will of a third person; (3) It is mixed: when its fulfillment depends partly on the will of a party to the obligation and partly on chance and/or will of a third person. Q: Is the conditional obligation void if its fulfillment depends upon the will of the debtor? A: (1) When the fulfillment of the condition depends upon the sole will of the debtor, the entire obligation shall be void (Art.1182, NCC) (2) When the fulfillment depends upon the will of a party to the obligation and partly upon chance and/or the will of a third person, the obligation including such condition shall take effect. NOTE: If the condition depends upon the will of the creditor, the obligation is valid (Balane). Although the law is silent with regard to potestative conditions whose fulfillment depends exclusively upon the will of the creditor, it is undeniable that it cannot have the effect of nullifying the obligation to which it is attached. This is so because the creditor is naturally interested in the fulfillment of the condition since it is only by such fulfillment that the obligation becomes effective. Q: Differentiate suspensive condition from resolutory condition. A: SUSPENSIVE RESOLUTORY The birth or effectivity of the obligation is The obligation is effective immediately after Before the suspended and rights are not yet acquired. its establishment or constitution and rights Condition is Hence, no demand can be made by the arising therefrom are immediately vested in Fulfilled creditor but certain remedies may be the creditor. Hence, a demand can already be availed by him. made. The obligation arises or becomes effective. After the The obligation and the rights arising Hence, rights arising out of the obligation Condition is therefrom are extinguished. Mutual are acquired and a demand can already be Fulfilled restitution shall take place. (Art. 1190) made by the creditor. No juridical relation is created. The juridical relation is consolidated and the If the rights become absolute. Condition is Not Fulfilled Q: What are the rules on suspensive conditional obligations? A: The rules are as follows: (1) Suspensive Positive: When the condition is that some event shall happen at a determinate time, the happening of the event shall extinguish the obligation as soon as the time expires or if it has become indubitable that the event will not take place. (Art. 1184, NCC) (2) Suspensive Negative: When the condition is that some event will not happen at a determinate time, the obligation shall be rendered effective from the moment the time indicated has elapsed, or if it has become evident that the event cannot occur. (Art. 1185, NCC) (3) If no time has been fixed, the condition shall be deemed fulfilled at such time as may have probably been contemplated, bearing in mind the nature of the obligation. (Art. 1185, NCC) (4) The condition shall be deemed fulfilled when the debtor voluntarily prevents its fulfillment. (Art. 1186, NCC) Q: What are the requisites of a constructive fulfillment of a suspensive condition? A: For the application of Article 1186, the following must concur: (1) The intent of the obligor to prevent the fulfillment of the condition; (2) The actual prevention of the fulfillment.

NOTE: Mere intention of the debtor to prevent the happening of the condition, or to place ineffective obstacles to its compliance, without actually preventing the fulfillment is insufficient (International Hotel Corporation v Joaquin, GR 158361, April 10, 2013). Q: What are the effects of the loss, deterioration or improvement of the thing in conditional obligations to give a determinate thing? A: Loss without the fault of the debtor Loss through the fault of the debtor  Obligation extinguished  Debtor obliged to pay damages Understood to be lost when— (1) Perishes (2) Goes out of commerce, or (3) Disappears in such a way that its existence is unknown or it cannot be recovered Thing deteriorates without the fault of the debtor 

Impairment is to be borne by the creditor



Thing is improved by its nature or by time improvement shall inure to the benefit of the creditor

Thing deteriorates through the fault of the debtor  Creditor may choose between (1) Rescission of the obligation (2) Fulfillment (3) With indemnity for damages in either case Improved at the expense of the debtor  he shall have no other right than that granted to the usufructuary. (Art. 1189, Civil Code)

Q: What is the effect of breach of one of the parties in reciprocal obligations? A: Either of the following may take place in case of breach: (1) Rescind the obligation if he is ready, willing, and able to comply with his own obligation while the other party is not, with a right to claim damages; (2) Demand for specific performance instead of rescission, with a right to claim damages; (3) Seek rescission, even after he has chosen fulfillment, if the latter should become impossible (Art. 1191, NCC); (4) The court, instead of rescinding the obligation, may instead fix a period within which the debtor is given a chance to comply with what is incumbent upon him. NOTE: Art. 1191 does not apply in Sales of Real Property by Installments (Maceda Law: R.A. 6552), and in Sales of Personal Property by Installments (Recto Law: Art. 1484-1486, NCC). Q: What is the effect of breach of both parties in reciprocal obligations? A: 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, NCC) Q: Can the injured party choose rescission after he has chosen fulfillment of the obligation? A: Generally, the injured party must choose between fulfillment and rescission of the obligation, with payment of damages in either case. However, he may also seek rescission even after he has chosen fulfillment should the latter become impossible (Art.1191(2), NCC). Q: What is a suspensive period? A: A period is suspensive when the obligation becomes demandable only upon the arrival of a day certain or upon the expiration of the term. (Art. 1193, NCC) Q: What is a resolutory period? A: A period is resolutory when the obligation is demandable at once, although it is terminated upon the arrival of a day certain or upon the expiration of the term. (Art. 1193, NCC)

Q: What are the effects of the loss, deterioration or improvement of the thing before the arrival of the period? A: In such cases, the following rules shall be observed: (1) If the thing is lost without the fault of the debtor, the obligation shall be extinguished; (2) If the thing is lost through the fault of the debtor, he shall be liable for damages; (3) If the thing deteriorates without the fault of the debtor, the impairment is to be borne by the creditor; (4) If the thing deteriorates through the fault of the debtor, the creditor may choose between the rescission of the obligation or specific performance, with indemnity for damages in either case; (5) If the thing is improved by nature or by time, the improvement shall inure to the benefit of the creditor; (6) If the thing is improved at the expense of the debtor, he shall have no other right than that granted to the usufructuary. (Art. 1189, NCC) Q: What is the effect of advance payment or delivery? A: The general rule is that if the debtor was unaware of the period or believed in good faith that the obligation has become due and demandable, then anything he paid or delivered may be recovered, including the fruits and interests (Art. 1195, NCC). The exceptions to the debtor’s right to recover are the following: (1) The payment or delivery was made voluntarily; (2) The payment or delivery was made with knowledge of the period; (3) The payment or delivery was made with knowledge that the obligation has not yet become due and demandable. Q: When may the courts fix the period? A: If no term or period has been agreed upon by the parties, the courts may fix such period only in the following cases: (1) If from its nature and circumstances, it can be inferred that a period was intended by the parties; (2) If the duration of the period depends upon the will of the debtor; (Art. 1197, NCC) (3) In case of reciprocal obligations, when there is a just cause for fixing a period (Art. 1191, NCC); and (4) If the debtor binds himself to pay when his means permit him to do so (Art. 1180, NCC). Q: What is the rule in the designation of the period? A: The general rule is that it is presumed to have been established for the benefit of both the creditor and the debtor. The exception is when from the tenor of the obligation or other circumstances, it appears that the period has been established in favor of only one of the parties. (Art. 1196, NCC) Q: When will the debtor lose the right to make use of the period? A: The debtor shall lose the right to make use of the period in the following cases: (1) When after the obligation has been contracted, he becomes insolvent, unless he gives a guaranty or security for the debt; (2) When he does not furnish to the creditor the guaranties or securities which he has promised; (3) When by his own acts he has impaired said guaranties or securities after their establishment, and when through a fortuitous event they disappear, unless he immediately gives new ones equally satisfactory; (4) When the debtor violates any undertaking, in consideration of which the creditor agreed to the period; or (5) When the debtor attempts to abscond. (Art. 1198, NCC) Q: What are alternative obligations? A: An obligation is alternative when it comprehends several objects or prestations which are due, but it may be complied with by the delivery or performance of only one of them. (Art. 1199, NCC) Q: Who has the right of choice in alternative obligations? A: As a general rule, the right of choice belongs to the debtor. The exception would be when such right was expressly given to the creditor. (Art. 1200, NCC) Q: What are the rules on the debtor’s exercise of his right of choice in alternative obligations? A: The rules are as follows: (1) The debtor may not choose those prestations which are impossible, unlawful, or could not have been the object of the obligation. (Art. 1200, NCC)

(2) The choice shall be communicated to the creditor orally or in writing, expressly or impliedly. It shall produce no effect except from the time it has been communicated and shall be binding once communicated. (Art. 1201, NCC) (3) The right of choice shall be lost when only one of the prestations is practicable. In such cases, the obligation loses its alternative character and thus becomes a simple obligation. (Art. 1202, NCC) (4) 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, NCC) Q: What is a facultative obligation? A: An obligation is facultative when only one prestation has been agreed upon, but the debtor may render another in substitution thereof. (Art. 1206, NCC) Q: What are the rules on the loss or deterioration of the thing intended as substitute? A: As a general rule, the loss or deterioration of the substitute through the fault of the debtor shall not render him liable. The exception would be when substitution has already been made, in which case the debtor may be held liable for the loss of the substitute on account of his delay, negligence or fraud. (Art. 1206, NCC) Q: Compare alternative obligations from facultative obligations. Alternative Obligations Various things are due but the giving principally of one is sufficient. If one of the prestations is illegal, the others may still be valid, and the obligation remains. If it is impossible to give all except one, the remaining shall still be given. The right of choice may be given either to the debtor or the creditor.

Facultative Obligations Only one thing is principally due but a substitute may be given. If the principal is illegal, then there is no necessity to give the substitute since the nullity of the principal carries with it the nullity of the accessory/substitute. If it is impossible to give the principal, then there is no necessity to give the substitute. If it is impossible to give the substitute, the principal must still be given. The right of choice is given only to the debtor.

Q: Differentiate Joint and Solidary obligations. Joint Obligations

Solidary Obligations As to definition One in which each of the debtor is liable only for a One in which any of the debtors may be held liable for proportionate part of the debt, and each creditor is the entire obligation, and any of the creditors is entitled only to proportionate part of the credit. entitled to demand the entire obligation. As to demand by the creditor The demand by one creditor produces the effects of The debtor may pay any of the solidary creditors. But default only with respect to the creditor who if any demand, judicial or extrajudicial, has been made demanded and the debtor on whom the demand was by one of them, payment should be made to him. made. As to insolvency of one debtor If one of the joint debtors should be insolvent, the When one of the solidary debtors cannot, because of others shall not be liable for his share. his insolvency, reimburse his share to the debtor paying the obligation, such share shall be borne by all his co-debtors, in proportion to the debt of each. As to personal defenses The vices of each obligation arising from personal Any solidary debtor may interpose against the claim defect of a particular debtor or creditor do not affect of the creditor/s any of the following defenses: the obligation or right of the others. (1) Defenses derived from the very nature of the obligation (e.g. payment or performance, res judicata, or prescription);

(2) Defenses personal to him or pertaining to his own share (e.g. minority or insanity); and (3) Defenses personal to others, but only as regards that part of the debt which the latter are responsible. (Art. 1222, NCC) Q: What is the rule on the determination of whether an obligation is joint or solidary? A: The general rule is that when there is a concurrence of several creditors and/or of several debtors in one and the same obligation, the obligation is presumed to be joint. However, the obligation shall be considered solidary when the following exceptions occur: (1) When the obligation expressly so states that there is solidarity; (2) When the law requires solidarity; or (3) When the nature of the obligation requires solidarity. (Art. 1207, NCC) Q: To whom shall payment be made in solidary obligations? A: The general rule is that payment may be made to any of the solidary creditors. An exception would be when a demand, judicial or extrajudicial, has been made by one solidary creditor, in which case payment shall be made to him. (Art. 1214, NCC) Q: To whom may a creditor proceed against in solidary obligations? A: The creditor may proceed against any one of the solidary debtors or some or all of them simultaneously. The demand made against one of them shall not be an obstacle to those which may subsequently be directed against the others, so long as the debt has not been fully collected. (Art. 1216, NCC) Q: What are the effects of payment by a solidary debtor? A: The effects of payment are the following: (1) There shall be whole or partial extinguishment of the debt; (2) The debtor who paid shall have a right to recover against his co-debtors only the share which corresponds to each; (3) The debtor who paid shall have a right to recover interest for the payment already made. If the payment is made before the debt is due, no interest for the intervening period may be demanded; (4) When one of the solidary debtors cannot, because of his insolvency, reimburse his share to the debtor paying the obligation, such share shall be borne by all his co-debtors, in proportion to the debt of each. (Art. 1217, NCC) Q: What obligations are deemed indivisible? A: Obligations that are deemed indivisible are: (1) Obligations to give a specific thing; (2) Those not susceptible of partial performance; (3) If so provided by law; (4) If intended by the parties. (Art. 1225, NCC) Q: When are obligations deemed divisible? A: Obligations are deemed divisible when: (1) The object of the obligation is the execution of a certain number of days of work; (2) The object of the obligation is the accomplishment of work by metrical units; (3) The purpose of the obligation is to pay a certain amount in installments (Soriano v. Ubat, 1961); (4) It is susceptible of partial performance. (Art. 1225, Civil Code) Q: How do you determine the divisibility or indivisibility of obligations not to do? A: Its divisibility or indivisibility shall be determined by the character of the prestation in each particular case. (Art. 1225, NCC) Q: What are obligations with a penal clause? A: An obligation with a penal clause is one to which an accessory undertaking is attached for the purpose of insuring its performance, and where in case of breach, the debtor is bound to pay a stipulated indemnity or perform a stipulated prestation. (Jurado)

Q: What is the effect of a penalty? A: As a general rule, the penalty, as fixed by the contracting parties, shall take the place of indemnity for damages and for the payment of interest in the case of breach of the obligation. However, the debtor shall still be liable to pay damages or interest in the following circumstances: (1) There is an express stipulation; (2) The debtor refuses to pay the penalty; (3) The debtor is guilty of fraud in the fulfillment of the obligation. (Art. 1226, NCC) Q: Can the debtor exempt himself from the performance of the obligation by paying the penalty? A: No. As a general rule, the debtor is not allowed to merely pay the penalty instead of fulfilling the obligation. An exception is when such right has been expressly reserved for him. (Art. 1227, NCC) Q: Can the creditor demand the fulfillment of the obligation and the satisfaction of the penalty at the same time? A: No. The general rule is that the creditor does not have a right to demand the fulfillment and the satisfaction of the penalty at the same time. However, the exceptions to the rule are the following: (1) The right has been expressly granted to him; (2) If the creditor chooses to demand the fulfillment of the obligation but the performance thereof becomes impossible, he may demand the satisfaction of the penalty (Art. 1227, NCC); and (3) If there was fault on the part of the debtor. (Art. 1226(2), NCC) Q: What is the rule in case of the nullity of either the principal obligation or the penal clause? A: If the principal obligation is void, the penal clause shall also be considered void. On the other hand, if the penal clause is void, the principal obligation will not suffer the same defect and shall subsist. (Art. 1230, NCC) Q: What are the main modes of extinguishing an obligation? A: The modes are: (1) Payment or performance; (2) Loss of the thing due; (3) Condonation or remission of the debt; (4) Confusion or merger of the rights of creditor and debtor; (5) Compensation; (6) Novation (Art. 1231, NCC); (7) Annulment; (8) Rescission; (9) Fulfillment of a resolutory condition; and (10) Prescription. Q: What are the other modes of extinguishing an obligation? A: The other modes are: (1) Renunciation or waiver by the obligee or creditor of the principal debt (Art. 1273, NCC); (2) Compromise (Magbanua v. Uy, 2005); (3) Death of one of the contracting parties in purely personal obligations (Stronghold Insurance Company v. Republic-Asabi Glass Corporation, 2006); (4) The will of one of the contracting parties in certain contracts; and (5) The agreement of both contracting parties or what is sometimes known as mutual assent or dissent. (Stronghold Insurance Company v. Republic-Asabi Glass Corporation, 2006) Q: When is an obligation understood to be paid or performed? A: A debt shall not be understood to have been paid unless the thing or service in which the obligation consists has been completely delivered or rendered, as the case may be, EXCEPT: (1) When the obligation has been substantially performed in good faith (Article 1234, NCC); (2) When the obligee accepts the performance, knowing its incompleteness or irregularity, and without expressing any protest or objection (Article 1235, NCC). Q: What are the rules on payment? A: Payment may be made in the following forms and shall be subject to the following rules:

(1) If the obligation is to give a specific thing, the debtor cannot compel the creditor to receive a different one, even if it be of the same value as, or more valuable than that which is due. (Art. 1244, NCC); (2) If the obligation is to do or not to do a specific service, the obligor cannot substitute the act or forbearance with another act or forbearance against the obligee’s will (Art. 1244, NCC); (3) If the obligation is to give, to do, or not to do a generic thing or service, the debtor must deliver a thing that is not of inferior quality, and the creditor cannot demand a thing of superior quality (Art. 1246, NCC); (4) If the obligation is to pay a sum of money, payment should be in the currency stipulated, and if not possible, then the currency which is legal tender in the Philippines (Art. 1249, NCC); and (5) If the creditor accepts payments by way of check or bills of exchange, payment is effected only upon encashment of the same, or when through the fault of the creditor they have been impaired (Art. 1249, NCC). Q: Where can payment be made? A: Payment can be made: (1) In the place stipulated by the parties; (2) If there is no stipulation and the obligation is to deliver a determinate thing, payment shall be made at the place where the thing might be at the time the obligation was constituted; and (3) In any other case, (i.e. delivery of a generic thing or an obligation to do or not to do) the payment shall be made at the domicile of the debtor. (Art. 1251, NCC) Q: What is the effect of payment to a third person? A: Payment to a third person is not valid unless it has redounded to the benefit of the creditor. However, the benefit to the creditor need not be proved in the following cases: (1) Subrogation of the payor in creditor’s right; (2) Ratification by the creditor; (3) Estoppel on the part of creditor (Article 1241(2), NCC) Q: What are the special forms of payment? A: The special forms of payment are the following: (1) Dation in Payment (dacion en pago): The transfer of ownership of a thing by the debtor to the creditor as an accepted equivalent of the performance of the obligation to pay a sum of money, and which shall be governed by the law on sales (Art. 1245, NCC; Ramos v. PNB, 2011); (2) Application of Payment: The designation of the debt to which the payment must be applied when the debtor has several obligations of the same kind in favor of the same creditor and his payment is not enough to pay all (Art. 1252, NCC); (3) Cession or Assignment: When the debtor cedes or assigns all of his property for the benefit of his creditors in order that from the proceeds thereof, the latter may obtain payment of their credits (Art. 1255, NCC); and (4) Consignation and Tender of Payment: The manifestation made by the debtor to the creditor of his decision to comply immediately with his obligation, and the deposit of the object of the obligation in a competent court in accordance with the rules prescribed by law after the unjustified refusal or inability of the creditor to accept the tender of payment (Art. 1256-1258, NCC). Q: What are the requisites of a valid consignation? A: The requisites of a valid consignation are: (1) The existence of a valid debt; (2) A valid prior tender of payment (Art. 1256, NCC); (3) Prior notice of consignation to the persons interested in the fulfillment of the obligation (Art. 1257, NCC); (4) Actual consignation by depositing the thing due at the disposal of the judicial authority (Art. 1258, NCC); (5) Subsequent notice of consignation (Art. 1258, NCC); (6) Judicial declaration that the consignation has been validly made and subsequent cancellation of the obligation. (Art. 1260, NCC). Q: What are the instances where consignation produces the effect of payment even without prior tender of payment? A: The instances are the following: (1) The creditor is absent or unknown, or does not appear at the place of payment; (2) The creditor is incapacitated to receive the payment at the time it is due;

(3) (4) (5) (6)

When without just cause, the creditor refuses to give a receipt; When two or more persons claim the right to collect; and When the title of the obligation has been lost The creditor, prior to the tender of payment, intimated that he will not accept the debtor’s payment.

NOTE: The list is not exclusive. Q: What is the effect of loss through a fortuitous event? A: The general rule is that if the thing is lost or destroyed through a fortuitous event, the debtor cannot be held responsible and the obligation is extinguished (Art. 1262, NCC). The following are the exceptions: (1) When it is otherwise provided by law (Art. 1174 and 1262, NCC); (2) When it is otherwise stipulated by the parties; (3) When the nature of the obligation requires the assumption of risk (Art. 1262, NCC); (4) When the loss of the thing due is partly to the fault of the debtor (Tan Chiong San v. Inchauti & Co., 1912); (5) When the loss of the thing occurs after the debtor has incurred in delay (Art. 1262(1), NCC); (6) When the debtor promised to deliver the same thing to two or more persons who do not have the same interest (Art. 1165(3), NCC); (7) When the obligation to deliver arises from a criminal offense (Art. 1268, NCC); and (8) When the obligation pertains to a generic thing (Art. 1263, NCC). Q: What are the requisites of condonation or remission of the debt? A: The requisites are the following: (1) There must be an agreement (2) There must be a subject matter (3) The cause or consideration must be liberality (4) The parties must be capacitated and must consent (5) It must be accepted by the obligor (implied in mortis causa and express for inter vivos) (6) The formalities of a donation must be complied with in case of an express remission (Art. 748-749, NCC) (7) It must not be inofficious (Art. 1270, NCC) (8) The obligation must be demandable at the time of remission. Q: What are the requisites for the implied condonation or remission of debt? A: The requisites are as follows: (1) The document evidencing credit was delivered by the creditor to the debtor (2) Such document is a private document; and (3) Delivery was voluntary NOTE: 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 (Article 1272, NCC) Q: What are the requisites that must be present for there to be a confusion of rights which will result in the extinguishment of the obligation? A: The following requisites must be present for there to be a confusion of rights which will result in the extinguishment of the obligation: (1) The merger of the characters of creditor and debtor must be in the same person (Art. 1278, Civil Code); (2) It must take place in the person of either the principal creditor or the principal debtor (Art. 1276, Civil Code); and (3) It must be complete and definite (Testate Estate of Mota v. Serra, 1925). Q: What are the requisites of legal compensation? A: The requisites of legal compensation are the following: (1) That each one of the obligors be bound principally, and that he be at the same time a principal creditor of the other; (2) That both debts consist in a sum of money, or if the things due are consumable, they be of the same kind, and also of the same quality if the latter has been stated; and (3) That the two debts be due, except in cases of: a. Voluntary compensation (Art. 1282, NCC) b. Judicial compensation or set-off (Art. 1283, NCC)

(4) That they be liquidated and demandable; (5) That over neither of them there be any retention or controversy, commenced by third persons and communicated in due time to the debtor (Art. 1279, NCC); and (6) The compensation must not be prohibited by law (Art. 1287, NCC). Q: What is novation? A: Novation is the substitution or change of an obligation by another, resulting in its extinguishment or modification, either: (1) By changing the object or principal conditions; (2) By substituting the person of the debtor; or (3) By subrogating a third person in the rights of the creditor. (Art. 1291, NCC) Q: What are the requisites of novation? A: The following requisites must concur for there to be a valid novation: (1) There must be previous valid obligation (2) The previous obligation must be extinguished (Art. 1291-1304, NCC) (3) There must be an agreement of the parties to the new obligation; (4) The new obligation must be valid (Quinto v. People, 1999) (5) The parties must be capacitated (6) There must be an intention to novate, and (7) The old and new obligation should be incompatible. (Lex Pareto Notes) Q: What are the two forms of substitution of debtors? A: The two forms of substitution of debtors are: (1) Expromision: It is effected with the consent of the creditor at the instance of the new debtor, even without the consent or against the will of the old debtor. (2) Delegacion: It is effected with the consent of the creditor at the instance of the old debtor, with the concurrence of the new debtor. (Lex Pareto Notes) Q: What are the requisites of expromision? A: The requisites of expromision are the following: (1) The initiative for substitution must come from a third person; and (2) The knowledge or consent of the old debtor is not required. Q: What are the requisites of delegacion? A: The requisites of delegacion are the following: (1) The initiative for substitution must come from the old debtor; (2) The new debtor must consent; (3) The old debtor must consent; and (4) There must be an acceptance by the creditor. Q: What are the essential requisites of a contract? A: The essential requisites are: (1) Consent of the contracting parties; (2) Object certain which is the subject matter of the contract; (3) Cause of the obligation which is established. (Art. 1318, NCC) Additional elements: Real contracts: Delivery is also an essential element. Formal contracts: Certain formalities are required for the contract to be valid and binding. Q: What are the characteristics or principles of contracts? A: The characteristics or principles of contracts are the following: (1) Obligatory force (Art. 1159, NCC); (2) Consensuality (Art. 1315, NCC); (3) Autonomy (Art. 1306, NCC); (4) Mutuality (Art. 1308, NCC); and (5) Relativity (Art. 1311, NCC).

Q: What are the kinds of contracts? (1) As to how it is perfected: a. Consensual; b. Formal; and c. Real. (2) As to whether there is a defect: a. Valid; b. Voidable; c. Unenforceable; d. Rescissible; and e. Void. (3) As to the degree of independence/dependence: a. Principal; b. Accessory: and c. Preparatory. (4) As to whether the obligations are fulfilled: a. Executed; and b. Executory. (5) As to whether a name is given by law: a. Nominate; and b. Innominate. (6) As to the nature of the consideration: a. Gratuitous; b. Onerous; and c. Remuneratory. Q: What are the elements of consent? A: (1) Plurality of subjects (2) Capacity (3) Intelligence and free will (4) Express or tacit manifestation of the will (5) Conformity of the internal will and its manifestation.(Balane) Q: What are the requisites for the object of a contract to be valid? A: For the contract to have a valid object, the following requisites must concur: (1) The object must be within the commerce of man (Art. 1347, NCC); (2) It must be transmissible; (3) It must be licit, or not contrary to law, morals, good customs, public policy, or public order (Art. 1347, NCC); (4) It must be possible (Art. 1348, NCC) (5) It must be determinate as to its kind or determinable without the need of a new contract or agreement. (Art. 1349, NCC) Q: What are the requisites for the cause of a contract to be valid? A: It must— (1) Exist (2) Be true (3) Be licit (Balane) Q: What is “motive” as distinguished from the cause of a contract? A: The motive of the parties to a contract is that which impels one to a sale or purchase. It is not always the consideration of the contract as the term understood in law. (De Jesus v. G. Urrutia & Co., 1916) Q: What is the rule on the formality of contracts? A: The general rule is that contracts are obligatory in whatever form they may have been entered into, provided all their essential requisites for validity are present. However, the following are the exceptions:

(1) When the law requires that the contract must be in a certain form in order to be valid; and (2) When the law requires that the contract must be in a certain form in order to be enforceable. (Art. 1356, NCC) Q: What contracts are prescribed by law to be in a certain form for convenience or efficacy? A: 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 are governed by Article 1403 (2) and 1405; (2) The cession, repudiation, or renunciation of hereditary rights or of those of the conjugal partnership of gains; (3) The power to administer property or any other power which has for its object an act appearing or which should appear in a public document, or should prejudice a third person; (4) The cession of actions or rights proceeding from an act appearing in a public document. (Article 1358(1), NCC) Q: What is the rule on the reformation of instruments? A: Once the minds of the contracting parties meet, a valid contract exists, whether the agreement is reduced into writing or not. When their true intention is not expressed in the instrument purporting to embody the agreement, by reason of mistake, fraud, inequitable conduct or accident, one of the parties may ask for the reformation of the instrument to the end that such true intention may be expressed. (Art. 1359 (1), NCC) Q: What are the requisites for a valid reformation? A: In order that there can be a reformation of the instrument, the following requisites must concur: (1) There must be a meeting of the minds; (2) The 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; (4) There must be clear and convincing proof thereof (Mondragon v. Santos, 1950); (5) It must be brought within the proper prescriptive period; and (6) The document must not refer to a simple unconditional donation inter vivos, or to wills, or to a contract where the real agreement is void. (Art. 1366, NCC) Q: What are the examples of instruments which may be reformed? A: The following instruments can be reformed: (1) When a mutual mistake of the parties causes the failure of the instrument to disclose their real agreement; (2) 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; (3) When one party was mistaken and the other knew or believed that the instrument did not state their real agreement, but concealed that fact from the former; (4) When through the ignorance, lack of skill, negligence or bad faith on the part of the person drafting the instrument of the clerk or typist, the instrument does not express the true intention of the parties; (5) 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. Q: What are the rules on the interpretation of contracts? A: The following rules shall apply on the interpretation of contracts: (1) 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, NCC) without reference to extrinsic facts or aids (2) In case of ambuiguity, the courts, in the exercise of their sound discretion, may admit direct and simultaneous circumstantial evidence necessary for the interpretation with the purpose of making the true intention of the parties prevail (Alonza v. Orillenedo, 1940) (3) 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, NCC) (4) 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, NCC)

(5) The contract should be read in its entirety to give effect to all (North Negros Sugar Co. v. Compania Gen. de Tabacos, 1957); (6) 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, NCC) (7) The language of a writing is to be interpreted according to the legal meaning it bears in the place of its execution, unless the parties intended otherwise (Art. 1376, NCC) (8) The interpretation of obscure words or stipulations in a contract shall not favor the party who caused the obscurity (Art. 1377, NCC) (9) In case of doubts in gratuitous contracts, the least transmission of rights and interests shall prevail. (Article 1378, NCC) (10) In case of doubts in onerous contracts, it should be settled in favor of the greatest reciprocity of interest. (Article 1378, NCC) (11) In case of doubts upon the principal object, the contract shall be null and void. (Article 1378, NCC) Q: What are rescissible contracts? A: A rescissible contract is one which has all the essential requisites of a valid contract, but by reason of injury or damage to either of the contracting parties or to third persons, it may be rescinded. (Jurado) Q: What are the kinds of rescissible contracts? A: The following contracts are rescissible: (1) Those which are entered into by guardians whenever the wards whom they represent suffer lesion by more than ¼th of the value of the things which are the object thereof (Art. 1381(1), NCC) (2) Those agreed upon in representation of absentees, if the latter suffers the lesion stated in the preceding number (Art. 1381(2), NCC); (3) Those undertaken in fraud of creditors when the latter cannot in any other manner collect the claims due them (Art. 1381(3), NCC); (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 (Art. 1381(4), NCC); (5) Payments made in a state of insolvency for obligations to whose fulfillment the debtor could not be compelled at the time they were effected, are also rescissible (Art. 1382, NCC); and (6) All other contracts specially declared by law to be subject to rescission (Art. 1381(5), NCC). Q: What are the requisites that must be present before an action for rescission can be brought? A: The following requisites must concur before an action for rescission can be brought: (1) The contract must be rescissible under Articles 1381 and 1382; (2) The party asking for rescission must have no other legal means to obtain reparation for damages suffered by him (Art. 1383, NCC); (3) The plaintiff must be able to return whatever he may be obliged to restore if rescission is granted (Art. 1385, NCC); (4) The things which are the object of the contract must not have passed legally to the possession of a third person acting in good faith (Art. 1385, NCC); (5) The action must be brought within four (4) years (Art. 1389, NCC). Q: What are the differences between resolution under Art. 1911 and rescission under Art. 1830? A: Art. 1191 (Resolution) Art. 1380 (Rescission) Principal action; retaliatory action against the other Subsidiary action and involves partial resolution party Based on lesion or economic prejudice, rendering the contract rescissible by law Based on breach of trust Note: Not all economic prejudices are recognized by law Requires mutual restitution as governed by Article Requires mutual restitution as governed by Article 1191 1381 Abrogation of the contract from the beginning and to Termination of the obligation and release of the restore the parties to their relative positions as if no parties from further obligations from each other contract has been made

May be demanded only by a party to the contract May be denied by court when there is sufficient reason to justify the extension of time Non-performance is the only ground for the right to rescission Applies only to reciprocal obligations where one party has not performed

To declare the contract void at its inception and to put an end to it though it never was May be demanded by a third party prejudiced in the contract Extension of time does not affect the right to ask for rescission Various reasons of equity are grounds for rescission Applies whether obligations are reciprocal or unilateral and whether the contract has been fully fulfilled

Q: What are voidable contracts? A: Voidable contracts are those in which all of the essential elements for validity are present, although the element of consent is vitiated either by lack of legal capacity of one of the contracting parties, or by mistake, violence, intimidation, undue influence, or fraud (Art. 1390, NCC). The contract remains valid and binding until it is annulled by a competent court. Q: What are unenforceable contracts? A: Unenforceable contracts are those which cannot be enforced by a proper action in court, unless they are ratified, because, either they are entered into without or in excess of authority or they do not comply with the Statute of Frauds, or both of the contracting parts do not possess the required legal capacity. (Art. 1403, NCC) Q: What are the characteristics of unenforceable contracts? A: The characteristics of unenforceable contracts are: (1) They cannot be enforced by a proper action in court (Art. 1403, NCC); (2) They are susceptible of ratification (Art. 1403, NCC); (3) They cannot be attacked or assailed by third persons (Art. 1408, NCC). Q: What is the rule on the Statute of Frauds? A: Those that do not comply with the Statute of Frauds as set forth below shall be unenforceable, unless they are ratified. In the following cases an agreement hereafter made shall be unenforceable by action, unless the same, or some note or memorandum, thereof, be in writing, and subscribed by the party charged, or by his agent; evidence, therefore, of the agreement cannot be received without the writing, or a secondary evidence of its contents: (1) An agreement that by its terms is not to be performed within a year from the making thereof; (2) A special promise to answer for the debt, default, or miscarriage of another; (3) An agreement made in consideration of marriage, other than a mutual promise to marry; (4) An agreement for the sale of goods, chattels or things in action, at a price not less than five hundred pesos, unless the buyer accept and receive part of such goods and chattels, or the evidences, or some of them, of such things in action or pay at the time some part of the purchase money; but when a sale is made by auction and entry is made by the auctioneer in his sales book, at the time of the sale, of the amount and kind of property sold, terms of sale, price, names of the purchasers and person on whose account the sale is made, it is a sufficient memorandum; (5) An agreement of the leasing for a longer period than one year, or for the sale of real property or of an interest therein; (6) A representation as to the credit of a third person. (Art. 1403 (2), NCC) Q: What kinds of contracts are covered by the Statute of Frauds? A: The Statute of Frauds is applicable only to executory contracts (Facturan v. Sabanal, 1948), and not to contracts that are totally or partially performed. (Almirol v. Monserrat, 1925) Q: What are void contracts? A: A void contract is one where all of 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.

Q: What are inexistent contracts? A: An inexistent contract is when one, some or all of the requisites which are essential for the validity of a contract are absolutely lacking. Q: What are the characteristics of void and inexistent contracts? A: Void and inexistent contracts have the following characteristics: (1) They produce no legal effects; (2) They are not susceptible of ratification (Art. 1409, NCC); (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 absolute nullity is imprescriptible (Art. 1410, NCC); (5) The inexistence or absolute nullity of a contract cannot be invoked by a person whose interests are not directly affected. (Art. 1421, NCC) Q: What are the kinds of void and inexistent contracts? A: The kinds of void and inexistent contracts are the following: (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; and (7) Those expressly prohibited or declared void by law. (Art. 1409, NCC) Q: Explain the nature of natural obligations. A: Natural obligations are not based on positive law but, on equity and natural law. As such they do not grant a right of action to enforce their performance, but after voluntary fulfillment by the obligor, they authorize the retention of what has been delivered or rendered by reason thereof. Q: Differentiate natural obligation and moral obligation. Natural Obligation

Moral Obligation

As to juridical tie There is juridical tie between the parties which is not No juridical tie whatsoever enforceable by court action As to effect of voluntary fulfillment Produces legal effects which the court will recognize Does not produce any legal effect which the court will and protect recognize and protect As to legal effect of voluntary fulfillment Within the domain of law Within the domain of morals Q: What is estoppel? A: Estoppel is a condition or state by virtue of which an admission or representation is rendered conclusive upon the person making it and cannot be denied or disproved as against the person relying thereon. (Art. 1431, NCC) Q: What is laches? A: Laches is the failure or neglect, for an unreasonable and unexplained length of time, to do what, by exercising due diligence, could or should have been done earlier. It is negligence or omission to assert a right within a reasonable time. (De Vera v. CA, 1999) Q: What is the difference of prescription and laches? Prescription Concerned with the fact of delay

Laches Concerned with the effects of delay

Question or matter of time Statutory Applies in law Cannot be availed of unless it is specifically pleaded as an affirmative allegation Based on fixed time

Question of inequality of permitting the claim to be enforced Not statutory Applies in equity Being a defense of equity, it need not be specifically pleaded Not based on a fixed time

Q: What is a trust? A: Trust is the fiduciary relationship between one person having equitable ownership in property and another owing 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 for the benefit of the former. Q: Who are the parties in a trust agreement? A: The parties are as follows: (1) Trustor: a person who established a trust (2) Trustee: one in whom confidence is reposed as regards property for the benefit of another person. (3) Beneficiary or cestui que trust: person in whose benefit the trust has been created. Q: What are the characteristics of trust? A: The characteristics of trust are the following: (1) It is a relationship; (2) Fiduciary in character’ (3) With respect to property, not one involving merely the personal duties; (4) 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; and (5) Arises as a result of a manifestation of intention to create the relationship (Morales v CA, GR 117228, June 19, 1997). Q: What are the kind of trusts? A: There are two kinds of trust: (1) Express trust: created by the intention of the trustor or of the parties (2) Implied trust: created by operation of law. 1. Resulting trust: trust raised by implication of law and presumed always to have been contemplated by the parties, the intention as to which is to be found in the nature of the transaction, but not expressed in deed or instrument of conveyance. 2. Constructive trust: trust created by construction of equity in order to satisfy the demands of justice and prevent unjust enrichment. Q: May prescription constitute a bar to enforce an implied trust? A: Yes. However, the following requisites are required before period of prescription may start: (1) The trustee has performed unequivocal acts of repudiation amounting to ouster of the beneficiary; (2) Such positive acts of repudiation have been made known to the beneficiary; (3) Evidence thereon is clear and positive. (Vda. De Cabrera v CA, GR 108547, February 3, 1997)

SALES Q: Define a contract of sale. A: 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. A contract of sale may be absolute or conditional. (Art. 1458, NCC) Q: What are the essential elements of a contract of sale? A: There must be (1) Consent or meeting of the minds, that is consent to transfer ownership in exchange for the price (2) Determinate or determinable object/subject matter (3) Price certain in money or its equivalent

Q: What are the requisites of valid subject matter? A: It must be— (1) Licit (2) Existing, future goods, or contingent (potential existence) (3) Determinate or determinable (Art. 1459-1465) Q: What are the requisites of price? A: The requisites are as follows: (1) It must be real; (2) In money or its equivalent; (3) For valuable consideration; (4) Certain or ascertainable at the time of the perfection of the contract. (Art. 1469, NCC) NOTE: Gross inadequate of price does not affect validity of a contract of sale. It merely indicates either a defect in the consent, or that the parties really intended a donation or some other act or contract. (Aquino) Q: What are the stages involved in the formation of a contract of sale? A: The stages involved are as follows: (1) Negotiation/Preparatory Offer/ Solicitation (Art. 1479, NCC); (2) Perfection; (3) Consummation. Q: When is a contract of sale perfected? A: The contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price. From that moment, parties may reciprocally demand performance. A sale by auction is perfected when the auctioneer announces its perfection by the fall of the hammer, or in other customary manner. (Art. 1475-1476) Q: Distinguish a contract of sale vis-à-vis a contract to sell. Contract of Sale Ownership or title passes to the buyer upon delivery of the thing sold. Non-payment of the price is a resolutory condition.

Contract to Sell Ownership is reserved in the seller and does not to transfer to the buyer until full payment of the purchase price. Full payment is a positive suspensive condition. Obligation to transfer ownership will not arise unless full payment is made.

Q: What is an option contract? A: It is a contract granting a privilege to one person, for which he has paid a consideration separate and distinct from the price, giving him the right to buy certain property at any time within the agreed period at a fixed price. (Enriquez de la Cavada v. Diaz, 1918) Q: Is an option a separate contract from the contract which is the subject of the offer? A: Yes. An option is a contract granting a privilege to buy or sell within an agreed time and at a determined price. It is a separate and distinct contract from that which the parties may enter into upon the consummation of the option. It must be supported by a consideration. (Equatorial Realty v. Mayfair, 1996) Q: What are the effects of a simulated sale? A: An absolutely simulated or fictitious contract is void. (Orosco, v. Sps. Domingo, 2014) However, a relative simulation, when it does not prejudice a third person and is not intended for any purpose contrary to law, morals, good customs, public order or public policy binds the parties to their real agreement. (Art. 1346, NCC) Q: Who can be a party in a contract of sale? A: All persons, natural and juridical, who have the capacity to enter into obligations may enter into a contract of sale. (Art. 1489, NCC)

Q: Can the husband and wife sell property with each other? A: As a general rule they are prohibited from selling property with 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, NCC) Q: Who are the persons that cannot acquire a property by purchase, even at a public or judicial auction, either in person or through the mediation of another? A: The following persons cannot acquire by purchase, even at a public or judicial auction, either in person or through the mediation of another (relative incapacity to buy): (1) The guardian, the property of the person or persons who may be under his guardianship; (2) Agents, the property whose administration or sale may have been entrusted to them, unless the consent of the principal has been given; (3) Executors and administrators, the property of the estate under administration; (4) Public officers and employees, the property of the State or of any subdivision thereof, or of any government-owned or controlled corporation, or institution, the administration of which has been entrusted to them; this provision shall apply to judges and government experts who, in any manner whatsoever, take part in the sale; (5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and other officers and employees connected with the administration of justice, the property and rights in litigation or levied upon an execution before the court within whose jurisdiction or territory they exercise their respective functions; this prohibition includes the act of acquiring by assignment and shall apply to lawyers, with respect to the property and rights which may be the object of any litigation in which they may take part by virtue of their profession; (6) Any others specially disqualified by law. (Art. 1491, NCC) Q: What is the effect of sale to a person suffering from relative incapacity enumerated above? A: The sale is void even if there is consent, except with regard to sale to an agent with the consent of the principal, which is valid under Art. 1491(2). (Aquino) Q: What are the obligations of the seller (vendor) upon perfection of the contract? A: The seller is bound to— (1) To transfer ownership of the thing (Art. 1495, NCC) (2) To deliver the thing, fruits thereof, and its accessions and accessories (Arts. 1458-1459, 1166, 1537 NCC) (3) To warrant against eviction and against hidden defects (Arts. 1545-1581, NCC) (4) To preserve the thing and its accessions and accessories, pending delivery, with proper diligence (Art. 1163, NCC) (5) To pay the expenses for execution and registration of the deed of sale (Art. 1487, NCC) and to put the goods in deliverable state (Art. 1521, NCC), unless otherwise stipulated.

Before Perfection

At the Time of Perfection

Seller bears risk of loss and deterioration (Res Perit Domino)  Owner bears the loss  Ownership is only transferred upon delivery

Seller bears risk of loss and deterioration (Res Perit Domino) (1) Entire/Total Loss: Contract shall be without any effect. (Art. 1493, NCC) (2) Partial Loss: The buyer may choose between— 1. Withdrawing from the contract 2. Demanding the remaining part, paying its price in proportion to the total sum agreed upon.

After Perfection Before Delivery

Seller bears risk of loss (Res Perit Domino)  Any injury to or benefit from the thing sold, after the contract has been perfected, from the moment of the perfection of the contract to the time of delivery, shall be governed by articles 1163 to 1165, and 1262. (Art 1480, NCC) Loss, deterioration or improvement of thing before delivery  the rules in Article 1189 shall be observed, the vendor being considered the debtor. (Art. 1538, Civil Code) NOTE: Kindly see table under Art. 1189 summarizing effects

After Perfection After Delivery GR: Buyer, who is now the owner, bears the risk of loss and deterioration. (Res Perit Domino)  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. EXCEPTIONS: (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 Goods are at the buyer’s risk from the time of such delivery; (2) Where actual delivery has been delayed through the fault of either the buyer or seller Goods are at the risk of the party in fault. (Art. 1504, Civil Code)

Seller bears risk even after perfection, before or after delivery (1)  (2) (3)

If the object sold consists of fungibles sold for a price fixed according to weight, number, or measure. unless the buyer is in mora accipiendi If the seller is guilty of fraud, negligence, default, or violation of contractual term. (Arts. 1165, 1262, 1170, Civil Code) When the object sold is generic because “genus does not perish” (genus nunquam perit)

Q: Define a warranty. A: It is an express or implied statement or representation made by the seller of goods, as part of the contract of sale, having reference to the character, quality, or title, of the goods, where he promises or undertakes to ensure that certain facts shall be as he represents. In case of breach, the buyer may refuse to proceed with the contract or proceed with the contract and waive the condition. (Arts. 1545-1547, NCC) Q: What are the obligations of a buyer (vendee)? A: The vendee is bound to— (1) To accept delivery of the goods (2) To pay the price and interest, if any

Q: What shall the buyer do when the seller delivers goods greater than that agreed? A: The buyer may accept only the goods included in the contract and reject the excess or the buyer may accept the entire goods and pay for them at the contract rate. But if the subject matter is indivisible, he may reject the whole. (Ibid.) Q: What shall the buyer do when the seller delivers mixed goods of different description not included in the contract? A: The buyer may accept some or those acceptable and reject the rest. But if the subject matter is indivisible, he may reject the whole. (Ibid.) Q: What is breach of contract? A: It is a failure without legal reason to comply with the terms of contract, to perform any promise which forms the whole or part of the contract. (Cathay Pacific Airways, Ltd. vs. Vasquez, 2003) Q: When is a seller liable for breach of contract? A: If the seller cannot transfer ownership over the thing sold at the time of delivery because he was not the owner thereof, he shall be liable for breach of contract. (2003 Bar) Q: What is the remedy of the buyer in case of such breach? A: The buyer may choose between the following remedies in addition to damages: (1) Specific Performance (2) Recoupment by diminution or extinction of price. (Art. 1599, NCC) (3) Rescission. (Art. 1191, NCC) Q: If fulfillment of the obligation becomes impossible, what is the remedy of the injured party? A: The injured party may also seek rescission even after he has chosen fulfillment, if the latter should become impossible. Q: Is rescission of contract proper for slight or casual breach? A: The general rule is that rescission of a contract will not be permitted for a slight or casual breach, but only for substantial and fundamental breach as would defeat the very object of the parties in executing the agreement. The question of whether a breach of contract is substantial depends upon the attendant circumstances. (Vermen Realty vs. CA, 1993) Q: What is the scope of the Recto Law? A: It covers contracts of sale of personal property by installments. It is also applied to contracts purporting to be leases of personal property with option to buy, when the lessor has deprived the lessee of the possession of enjoyment of a thing. (PCI vs. Giraffe-X, 2007) Q: What are the alternative and exclusive remedies under the Recto Law? A: The following are the alternative and exclusive remedies: (1) Specific Performance – Exact fulfillment should the buyer fail to pay.  General Rule: If availed of, the unpaid seller cannot anymore choose other remedies.  Exception: If after choosing, it has become impossible, rescission may be pursued. (Art. 1191, NCC) (2) Rescission – Cancel the sale if buyer fails to pay 2 or more installments deemed chosen when: a. Notice of rescission is sent; b. Take possession of subject matter of sale; and c. Files action for rescission (Art. 1385, NCC) (3) Foreclosure – Foreclose on chattel mortgage if buyer fails to pay 2 or more installments.  General Rule: Actual foreclosure is necessary to bar recovery of balance  Extent of barring effect: purchase price.  Exception: Mortgagor refuses to deliver property to effect foreclosure; expenses incurred in attorney’s fees, etc. Q: What is covered by the Maceda Law? A: It is the real estate equivalent of the Recto Law. It doesn’t apply to sales of: (1) Industrial lots;

(2) Commercial buildings and lots; and (3) Lands under the CARP Law. Q: Differentiate Recto Law from Maceda Law.

Source Scope Purpose When do you foreclose?

RECTO LAW Art. 1484, as amended by Act 4122 Covers installment sales of personal property.

MACEDA LAW R.A. 6552 Governs installment sales of real property.

Prevent abuses in the foreclosure of chattel mortgage. Seller can choose among the 3 remedies in case buyer defaults: (1) Specific Performance: Exact fulfilment should the buyer fail to pay (2) Rescission: Cancel the sale if buyer fails to pay 2 or more instalments (3) Foreclosure: if buyer fails to pay 2 or more instalments. If seller choose foreclosure, he is bar to recovery balance if any.

Prevent abuses in the foreclosure of real estate mortgage. The law do not apply on sale of: (1) Industrial lots (2) Commercial buildings and lots 3. Lands under the CARP Law

The remedies are alternative, not cumulative, such that the exercise of one would bar the exercise of the others.

To qualify for the benefit of the law, the buyer must have already paid at least 2 years of installment payments. Benefits for Buyer: (1) A grace period of one month to pay installment; for every one year of instalments paid; or (2) The buyer has the right to opt for a refund of the installment payments being made (includes the down payments, deposits or options on the contract). The buyer is entitled to 50% refund from his total payments made. (3) After 5 years of instalment payments, buyer is entitled to an additional 5% refund per year on top of the 50% but not exceeding 90% of the total payments made. Note: If buyer has paid less than two years installment, he is still entitled to 2 months grace period.

Q: Is transfer and delivery implied under a contract of sale? A: Yes. Obligation to transfer ownership and to deliver is implied in every contract of sale. (Arts. 1458-1459, NCC) Q: When is ownership of the thing sold transferred to the buyer or vendee? A: Ownership of the thing sold shall be transferred to the vendee upon the actual or constructive delivery thereof. (Art. 1477, NCC) Exceptions: (1) Contrary stipulation (Art. 1478, NCC); (2) Contract to sell; (3) Contract of insurance; (4) Sale on acceptance/trial (Art. 1502, NCC); (5) When the seller is not the owner or has voidable title (Article 1505, NCC). Q: What are the ways of effecting delivery? A: (1) Actual Delivery – When the thing is placed in the control and possession of the vendee (Art. 1497, Civil Code)

(2) Constructive Delivery – When sale is made through a public instrument, its execution is equivalent to delivery; As to movable, by delivery of the keys of the place or depository where it may be found (Art. 1498, Civil Code) (3) Symbolic Delivery – parties make use of a token symbol to represent the thing delivered (4) Traditio longa manu (long hand delivery) – delivery takes place by mere consent or agreement of the parties (Art. 1499, Civil Code) (5) Traditio breve manu (short hand delivery) – When the vendee is already in possession of the thing sold by virtue of another title (Art. 1499, Civil Code) (6) Traditio Constitutum possessorium – The vendor continues in possession of the property sold, but not as an owner but in some other capacity. (Amig v. Teves, 1954) Q: What is the rule in cases of double sale? A: In cases of double sale and both purchasers are in good faith, the ownership shall be transferred to: (1) To the person who first registered it (2) In default thereof, the person who possessed it first (3) In default thereof, the person who presents the oldest title (Payongayong vs CA, 2004) NOTE: A forged deed is an absolute nullity and conveys no title.  Exception: If the deed has already been transferred in the name of the forger, who then transfers title to an innocent purchaser for value. Q: Explain Pacto de retro sales. A: In a pacto de recto sale, the title and ownership of the property sold are immediately vested in the vendee a retro, subject to the resolutory condition of repurchase by a vendor a retro within the stipulated period. Failure on the part of the vendor a retro to repurchase the property within the period agreed upon by them, or in the absence thereof, as provided for by law, vests upon the vendee a retro absolute title and ownership over the property sold by operation of law. (Cadungog v. Yap, 2005) Q: When should the vendor exercise his right to redeem? A: The right of redemption should be exercised— (1) Within the period stipulated, which should not exceed 10 years from the date of contract. (2) In the absence of an agreement, 4 years from the date of the contract. (3) If a civil action was filed to establish that the contract is a true sale with right to repurchase, the vendor may still exercise the right to repurchase within 30 days from the time final judgment was rendered in a civil action. (Art. 1606, NCC) (Aquino) Q: What are instances when a contract is presumed an equitable mortgage? A: (1) When the price of a sale with right to repurchase is unusually inadequate; (2) When the vendor remains in possession as lessee or otherwise; (3) When upon or after the expiration of the right to repurchase another instrument extending the period of redemption or granting a new period is executed; (4) When the purchaser retains for himself a part of the purchase price; (5) When the vendor binds himself to pay the taxes on the thing sold; (Article 1602, NCC) NOTE: Incase of doubt, a contract purporting to be a sale with right to repurchase shall be construed as an equitable mortgage. (Art. 1603, NCC) Q: What are remedies of the apparent vendor in an equitable mortgage? A: The apparent vendor may ask for reformation of instrument, which must be brought within 10 years.(Art. 1605) Q: Define Assignment of Credit A: Assignment of credit is a contract by which the owner (assignor/creditor) of a credit and other incorporeal rights transfers, either onerously or gratuitously, to another (assignee) his rights and actions against a third person (debtor). (H. De Leon, Comments and Cases on Sales and Lease 588 [2014])

Q: What is the nature of assignment of credit? A: Assignment of credit and other incorporeal rights is a – (1) consensual (2) bilateral (3) generally onerous, and (4) commutative or aleatory contract. (H. De Leon, Comments and Cases on Sales and Lease 588 [2014]) Q: What are the binding effects of assignment of credit? A: (1) As between the parties – the assignment is valid although it appears only in a private document so long as the law does not require a specific form for its validity (Art. 1356, NCC) (2) To affect third persons – the assignment must appear in a public instrument, and in case it involves real property, it is indispensable that it be recorded in the Registry of Property. (Lopez vs. Alvarez, 9 Phil 28 [1908]) (3) The assignee merely steps into the shoes of the assignor, the former acquiring the credit subject to defenses available to the debtor against the assignor. (H. De Leon, Comments and Cases on Sales and Lease 591 [2014]) (4) An agreement for the sale of things in action, at a price not less than P500, must be in writing, unless the buyer has received evidence of the things in action or paid part of the purchase money. (Art. 1403(2)(d), NCC) Q: What is the extent of an assignment of credit? A: The assignment of credit includes not only the credit itself but also all rights accessory thereto. (Art. 1537, NCC)

LEASE Q: Define lease. A: Lease may be defined as a consensual, bilateral, onerous, and commutative contract by virtue of which one person binds himself to grant temporarily the use of a thing or to render some service to another who undertakes to pay some rent, compensation or price. (4 Sanchez Roman 746) Q: Define the concept of lease of things. A: 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, NCC) Q: Define the concept of lease of services. A: 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, NCC) Q: Distinguish lease of things vis-à-vis lease of services. Lease of Things As to Object

The object of the contract is a thing.

As to Obligation of Lessor

The principal obligation of the lessor is to deliver the thing leased to the lessee.

As to Remedies in case of Breach

Specific Performance or for Damages.

Lease of Services The object of the contract is some work or service. The principal obligation of the lessor is to perform some work or service for the lessee. Only remedy available as a general rule is an action for Damages.

Q: What are the obligations of the lessor? A: The following are the obligations of the 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 in order to keep it suitable for the use to which it has been devoted, unless there is a stipulation to the contrary; (3) To maintain the lessee in the peaceful and adequate enjoyment of the lease for the entire duration of the contract. (Art. 1654, NCC) Q: What are the obligations of the lessee? A: The following are the obligations of the 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; and in the absence of stipulation, to that which may be inferred from the nature of the thing leased, according to the custom of the place; (3) To pay expenses for the deed of lease. (Art. 1657, NCC) Q: May the lessee of real property assign the lease to a third person without the lessor’s consent? In the same case, instead of assigning his right to the leasehold, may he sublease the premises without the consent of the lessor? A: The lessee of a property may not assign the lease to a third person without the lessor’s consent, unless there is a stipulation in the contract of lease to the contrary. This is clear from Art. 1649 of the NCC which declares that the lessee cannot assign the lease without the consent of the lessor, unless there is a stipulation to the contrary. On the other hand, the lessee may sublease the premises to a third person without the consent of the lessor, unless there is an express prohibition in the contract of lease. This is clear from the provision of Art. 1650 of the NCC. But of course, such act of subleasing the property shall be without prejudice to his responsibility for the performance of the contract toward the lessor. Q: What shall the lessor pay to the lessee if the lessee, in good faith, makes useful improvements which are suitable to the use for which the lease was intended? Assuming the lessor is obliged to pay, yet he refused, what will be the remedy of the lessee? A: If the lessee makes, in good faith, useful improvements which are suitable to the use for which the lease is intended, without altering the form or substance of the property leased, the lessor upon the termination of the lease shall pay the lessee one-half of the value of the improvements at that time. Should the lessor refuse to reimburse said amount, the lessee may remove the improvements, even though the principal thing may suffer damage thereby. He shall not, however, cause any more impairment upon the property leased than is necessary. With regard to ornamental expenses, the lessee shall not be entitled to any reimbursement, but he may remove the ornamental objects, provided no damage is caused to the principal thing, and the lessor does not choose to retain them by paying their value at the time the lease is extinguished. (Art. 1678, NCC) Q: Is the lessee entitled to a right of reduction of the rent on account of the sterility of the land leased or by reason of the loss of fruits due to ordinary fortuitous events? A: As a general rule, the lessee shall have no right to a reduction of the rent on account of the sterility of the land leased, or by reason of the loss of fruits due to ordinary fortuitous events. (Art. 1680 NCC) Neither does the lessee have any right to a reduction of the rent if the fruits are lost after they have been separated from their stalk, root or trunk. (Art. 1681, NCC) However, as an exception, he shall have such right in case of the loss of more than one-half of the fruits through extraordinary and unforeseen fortuitous events, save always when there is a specific stipulation to the contrary. (Art. 1680, NCC) Q: What is the obligation of outgoing lessee in rural lease? A: The outgoing lessee shall allow the incoming lessee or lessor to make the necessary work preparatory for the crop the following year. (Art. 1683, NCC) Q: What is the obligation of incoming lessee or lessor? A: The incoming lessee and lessor shall permit the outgoing lessee to gather or harvest and utilize the fruits has produced. (Art. 1683, NCC)

PARTNERSHIP Q: What is a contract of partnership? A: It is a contract wherein: (1) Two or more persons bind themselves to contribute money, property, or industry to a common fund, (2) With the intention of dividing the profits among themselves. (Art. 1767, NCC) Q: Is it essential for one to contribute any capital to the common fund in order for a partnership to exist? A: No. A partnership may be deemed to exist among parties who agree to borrow money to pursue a business and to divide the profits or losses that may arise therefrom, even if it is shown that they have not contributed any capital of their own to a “common fund”. Their contribution may be in the form of credit or industry, not necessarily cash or fixed assets. Being a partner, they are all liable for debts incurred by or on behalf of the partnership. (Lim v. Phil. Fishing, 1999) Q: Must there be an actual division of profit in order for a partnership to exist? A: No. Actual division of profit is not essential to have a partnership. As long as the common fund is indispensable, beneficial and economically useful to the business of the partners and the primordial reason for the establishment of the partnership is for profit. (AFISCO V. CA, 1999) Q: Is an oral contract of partnership valid? A: Yes. An oral contract of partnership is valid even though not in writing. However, if it involves contribution of an immovable property or a real right, an oral contract of partnership is void. In such a case, the contract of partnership to be valid, must be in a public instrument (NCC, Art. 1771), and the inventory of said property signed by the parties must be attached to said public instrument (NCC, Art. 1773; Litonjua, Jr. v. Litonjua, Sr., G.R. Nos. 166299-300, December 13, 2005). Q: What are the rights and obligations in a partnership? A: While a partnership has a personality separate and distinct from the partners from the time of its perfection, the partners are usually liable to partnership creditors not only to the extent of their capital contribution to the firm but even with their own private property (general partnership). When a partnership for a fixed term or particular undertaking is continued after the termination of such term or particular undertaking without any express agreement, the rights and duties of the partners remain the same as they were at such termination, so far as is consistent with a partnership at will. (Art. 1785, NCC) Q: What are the rights and obligations of partners among themselves? To contribute what had been promised (Art. 1786, NCC)

Obligation with respect to contribution of property

Obligations with respect to contribution of money and money converted to personal use

Note: The failure to contribute is to make the partner ipso jure a debtor of the partnership even in the absence of demand. In case of failure, the remedy is not rescission but an action for specific performance with damages and interest. (Sancho v. Lizarrage, 1931) HOWEVER, if the defaulting partner is already dead, rescission may prosper. (Pabalan v. Velez, 1912) To warrant property contributed in case of eviction. (Art. 1786, NCC) To deliver the fruits of the property from the time they should have been delivered, without the need of any demand. (Art. 1786,NCC) To contribute on the date due the amount promised to be given. (Art. 1788, NCC) To reimburse any amount he may have taken from the partnership coffers and converted to his own personal use. (Art. 1788, NCC) To indemnify the partnership for the damages caused to it be the delay in the contribution; and To pay the agreed or legal interest, if he fails to pay in due time. (Art. 1788, NCC)

Obligation not to engage in other business for himself

Obligation to contribute capital and additional capital

Obligation of managing partner who collects debt Obligation of partner who received share in partnership credit

Obligation to pay for damages to partnership

Obligation to render information

Obligation to account for any benefit and hold as trustee unauthorized personnel

Note: The partner who fails to return partnership money received is guilty of estafa (Liwanag v. CA, 1997), especially in cases where there are specific directions to apply it to partnership purposes. Industrial Partner – he cannot engage in ANY business for himself unless the partnership expressly permits him to do so. The other partners have the remedy of either excluding the erring partner from the firm or of availing themselves of the benefits which he may have obtained. (Art. 1789, NCC) Capitalist Partner - the prohibition extends only to any operation which is of the same or similar kind of business in which the partnership is engaged unless there is a stipulation to the contrary. The test is the possibility of unfair competition. (Art. 1808, NCC) Contribution to partnership capital General Rule: The partners shall contribute equal shares. (Art. 1790, NCC) Exceptions: When there is a stipulation to the contrary; (Art. 1790, NCC) Industrial partners - This rule only applied to capitalist partners, unless besides his services, he has contributed capital pursuant to an agreement to that effect. Contribution of additional capital General Rule: A partner is not bound to contribute additional capital. Exception: If there is an agreement to the contrary. (Art. 1791, NCC) Where a person is separately indebted to the partnership and to the managing partner at the same time any sum received shall be applied to the two credits in proportion to their amounts even though he may have given a receipt for his own credit only, except where he received it entirely for the account of the partnership, in which case the whole sum shall be applied to the partnership credit only. (Art. 1792, NCC) Such partner is obliged, if the debtor should become insolvent, to bring to the partnership capital what he received even though he may have given receipt for his share only. (Art. 1793, NCC) Every partner is responsible to the partnership for damages suffered by it through his fault and he cannot compensate them with the profits and benefits which he may have earned for the partnership by his industry. However, the courts may equitably lessen this responsibility if through the partner’s extraordinary efforts in other activities of the partnership, unusual profits have been realized. (Art. 1794, NCC) Partners shall render on demand true and full information of all things affecting the partnership to any partner or the legal representative of any deceased partner of any partner under legal disability. (Art. 1806, NCC) Every partner must account to the partnership for any benefit, and hold as trustee for it any profits derived by him without the consent of the other partners from any transaction connected with the formation, conduct, or liquidation of the partnership or form any use by him of its property. (Art. 1807) General Rule: The partner cannot use or apply to his own benefit partnership assets or results of the knowledge or information gained by him as a partner to the detriment of the partnership. (Lim v. Send, 1921) Exception: If the taking by the partner is with the consent of all the other partners. (Lim Tanbu v. Ramolete, 1975) Note: Duty to account continues until the partnership relation is terminated, i.e. the winding up of partnership affairs is completed. The words “and hold as trustee” in Article 1787 of the NCC, indicate that the partnership can claim as its own any property or money that can be traced. Thus, should the partner be

insolvent, the partnership claim against him is a claim to specific property. In this case, the partnership in not regarded as an ordinary creditor. Q: What are the obligations and liabilities of the partnership to third persons? A: The following are the obligations of a partnership to third persons: (1) To operate under a firm name (Art. 1815, NCC) Persons who include their names in the partnership name even if they are not members shall be liable as a partner; (2) To be liable for contractual obligations of the partnership with their property, after all partnership assets have been exhausted: pro rata or subsidiary. (Art. 1816, NCC); (3) Admission or representation made by a partner concerning partnership affairs within the scope of his authority is evidence against the partnership; (4) Notice to partner of any matter relating to partnership affairs operates as notice to partnership, except in case of fraud: a. Knowledge of partner acting in the particular matter, acquired while a partner. b. Knowledge of the partner acting in the particular matter then present to his mind. c. Knowledge of any other partner who reasonably could and should have communicated it to the acting partner. (5) Partners and the partnership are solidarily liable to 3rd persons for the partner’s tort or breach of trust; (6) Liability of incoming partner is limited to: a. His share in the partnership property for existing obligations; b. His separate property for subsequent obligations. (7) Creditors of partnership preferred in partnership property & may attach partner’s share in partnership assets; (8) Every partner is an agent of the partnership. Q: What does dissolution mean in relation to a partnership? A: The dissolution of a partnership is the change in the relation of the partners caused by any partner ceasing to be associated in the carrying on as distinguished from the winding up of the business. (Art. 1828, NCC) Q: Is the partnership immediately terminated upon its dissolution? A: No. Upon dissolution, the partnership is not immediately terminated, but continues until the winding up of partnership affairs is completed. (Art. 1829, NCC) Q: What are the causes for the extrajudicial dissolution of a partnership? A: Extrajudicial dissolution is caused when: (1) Without violation of the agreement, by termination of the definite term or particular undertaking specified in the agreement; or by express will of the partner who must act in good faith when no definite term or particular undertaking is specified; (2) With violation of the agreement; it may be dissolved by any partner at any time; (3) In case of occurrence of any event that makes it unlawful for the partnership to continue; and (4) When a specific thing promised to be contributed perished before delivery. (Art. 1830, NCC) Q: Distinguish General vs. Limited Partner or Partnership

Liability Right in Management

General Partnership Personally liable for partnership obligations. When manner of management has not agreed upon, all general partners have an equal right in the management of the business.

Contribution

Money, property or industry.

If Proper Party to Proceedings by or Against Partnership

Proper party to proceedings by/against partnership.

Limited Partnership Liability extends only to his capital contributions. No participation in management. Cash or property only, not services. Not proper party to proceedings by/against partnership, unless: 1. He is also a general partner; or

2. Where the object of the proceeding is to enforce a limited partner’s right or liability to the partnership. Assignment of Interest

Firm Name

Prohibition to Engage in Other Business

Effect of Death, Insolvency, Retirement, Insanity

Interest is not assignable without consent of other partners.

Interest is freely assignable.

It must operate under a firm name, which may or may not include the name of one or more of the partners. NOTE: Those, who, not being members of the partnership, include their names in the firm name, shall be subject to the liability of a partner (NCC, Art. 1815)

It must also operate under a firm name, followed by the word “Limited.” GR: The surname of a limited partner shall not appear in the partnership name. XPNs: 1. It is also the surname of a general partner; 2. Prior to the time when the Limited partner became such, the business had been carried on under a name in which his surname appeared. NOTE: A limited partner whose surname appears in a partnership name is liable as a general partner to partnership creditors who extend credit to the partnership without actual knowledge that he is not a general partner (NCC, Art. 1846).

a. The capitalist partner cannot engage for their own account in any operation which is of the kind of business in which the partnership is engaged, unless there is a stipulation to the contrary. b. If he is an industrial partner- in any business for himself. Retirement, death, insolvency, insanity of general partner dissolves partnership.

Creation

As a rule, it maybe constituted in any form, by contract or conduct of the parties.

Composition/Membership

Composed only of general partners.

No prohibition against engaging in business.

Does not have same effect; rights are transferred to legal representative. Created by the members after substantial compliance in good faith of the requirements set forth by law. Composed of at least one general partner and one limited partner.

AGENCY Q: Define a contract of agency. A: A contract of agency is one whereby 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, NCC) Q: What are the powers of an agent? A: (1) To carry out the agency which he has accepted; (2) To answer for damages which, through his non-performance, the principal may suffer;

(3) To finish the business already begun prior to the death of the principal should delay entail any danger; (Art. 1884, NCC) (4) To advance necessary funds should there be a stipulation to do so; (5) To act in accordance with the instructions of the principal, and in default thereof, to do all that a good father of a family would do. In case a person declines an agency, he is bound to observe the diligence of a good father of a family in the custody and preservation of the goods forwarded to him by the owner until the latter should appoint an agent or take charge of the goods. (Art. 1885, NCC) Q: What are the characteristics of a contract of agency? A: 1. Bilateral – If it is for compensation, it gives rise to reciprocal rights and obligations. 2. Unilateral – If gratuitous, it creates obligations for only one of the parties. 3. Nominate – It has its own name. 4. Consensual – It is perfected by mere consent. 5. Principal – It can stand by itself without need of another contract. 6. Preparatory – It is entered into as a means to an end (De Leon, 2010). 7. Generally onerous 8. Representative relation- the agent acts for and on behalf of the principal on matters within the scope of his authority and said acts have the same legal effect as if they were personally executed by the principal (Rabuya, 2017). Q: Can an agency be created by necessity? A: Agency cannot be created by necessity. What is created instead is additional authority in an agent appointed and authorized before the emergency arose. By virtue of the existence of an emergency, the authority of an agent is correspondingly enlarged in order to cope with the exigencies or the necessities of the moment (De Leon, 2010). Q: What is the nature of relationship between the principal and agent? A: It is fiduciary in nature that is based on trust and confidence (De Leon, 2010). Q: Is mere representation of an alleged agent sufficient to prove the existence of a principal-agent relationship? A: No. Mere representation of an alleged agent is not sufficient to prove the existence of a principal-agent relationship. The declarations of the agent alone are generally insufficient to establish the fact or extent of agency. It is a settled rule that the persons dealing with the assumed agent are bound at their peril, if they would hold the principals liable, to ascertain not only the fact of agency but also the nature and extent of authority, and in case either is controverted, the burden of proof is upon them to establish it (Sps. Yu v. Pan American Airways, Inc., G.R. No. 123560, March 27, 2000). Q: Can an agent maintain an action against persons with whom they contracted on behalf of his principal. A: No. Agents are not a party with respect to that contract between his principal and third persons. As agents, they only render some service or do something in representation or on behalf of their principals. The rendering of such service did not make them parties to the contracts of sale executed in behalf of the latter. (Uy v. CA, G.R. No. 120465, September 9, 1999). Q: What are the obligations of the agent? A: The following are the obligations of the agent: (1) To carry out the agency which he has accepted. (2) To answer for damages which, through his non-performance, the principal may suffer; (3) To finish the business already begun prior to the death of the principal should delay entail any danger. (Art. 1884, NCC). In case a person declines the agency, he is bound to observe the diligence of a good father of a family in the custody and preservation of the goods forwarded to him by the owner until the latter should appoint an agent or take charge of the goods. (Art. 1885, NCC) (4) To advance necessary funds should there be a stipulation to do so. (5) To act in accordance with the instructions of the principal, and in default thereof, to do all that a good father of a family would do.

Q: What are the instances where a Special Power of Attorney is needed? A: Special powers of attorney are necessary in the following cases: (1) To make such payments as are not usually considered as acts of administration; (2) To effect novations which put an end to obligations already in existence at the time of the agency was constituted; (3) 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; (4) To waive any obligation gratuitously; (5) To enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration; (6) To make gifts, except customary ones for charity or those made to employees in the business managed by the agent; (7) To loan or borrow money, unless the latter’s act be urgent and indispensable for the preservation of the things which are under administration; (8) To lease any real property to another person for more than one year; (9) To bind the principal to render some service without compensation; (10) To bind the principal in a contract of partnership; (11) To obligate the principal as a guarantor or surety; (12) To create or convey real rights over immovable property; (13) To accept or repudiate an inheritance; (14) To ratify or recognize obligations contracted before the agency; (15) Any other act of strict dominion. (Art. 1878, NCC) Q: Distinguish Apparent Authority from Authority by Estoppel. A: Basis Apparent Authority As to the knowledge of the principal of the authority of the agent

That which is though not actually granted, the principal knowingly permits the agent to exercise or holds him out as possessing.

As to the establishment of the authority

Founded in conscious permission of acts beyond the powers granted.

Authority By Estoppel Arises when the principal, by his culpable negligence permits his agent to exercise powers not granted to him, even though the principal may have no notice or knowledge of the agent’s conduct. Founded on the principal’s negligence in failing properly to supervise the affairs of the agent

Q: What are the obligations of the principal? A: The following are the obligations of the principal: (1) Comply with all the obligations which the agent may have contracted within the scope of his authority and in the name of the principal. (Art. 1910, NCC) (2) To advance to the agent, should the latter request, sums necessary for the execution of the agency. (Art. 1912, NCC) (3) To reimburse the agent for what the latter has advanced, with interest, even if the business was not successful, provided the agent was free from fault. (Art. 1912, NCC) (4) To indemnify the agent for all damages, which the execution of the agency may have caused the latter without fault or negligence on his part. (Art. 1913, NCC) (5) To pay the agent the compensation agreed upon, or if not compensation was specified the reasonable value of the agent’s service. (Art. 1875, NCC) Q: What are the modes of extinguishing an agency? A: The following are the modes to extinguish an agency: (1) By revocation; (2) By the withdrawal of the agent; (3) By the death, civil interdiction, insanity, or insolvency of the principal or of the agent; (4) By the dissolution of the firm or corporation which entrusted or accepted the agency. (5) By the accomplishment of the object or purpose of the agency. (6) By the expiration of the period for which the agency was constituted. (Art. 1919, NCC)

CREDIT TRANSACTIONS Q: What are the elements of mutuum or simple loan? A: (1) Delivery of money or any other consumable thing; (2) Obligation of debtor to pay. (Art. 1953, NCC) It involves the return of the equivalent amount only and not the identical thing because the borrower acquires ownership of the money or other consumable thing loaned. (Art. 1978, NCC) Q: What are the elements of commodatum? A: (1) Delivery of a non-consumable thing; (2) Obligation to return it. (Art. 1933, NCC) Q: What are the kinds of commodatum? A: Ordinary

It pertains to use of the thing by the bailee is for a certain period of time.

Precarium One whereby the bailor may demand the return of the thing loaned at will if any of the following is present: (1) The duration and purpose of the contract is not stipulated; (2) The use of the thing is merely tolerated by the owner. (Art.1947, NCC)

Q: What is a deposit? A: It is a contract 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, NCC) Q: What are the kinds of deposit? A: Judicial (Sequestration)

It takes place when an attachment or seizure of property in litigation is ordered.(Art.2005, NCC)

Extrajudicial (1) Voluntary – that wherein the delivery is made by the will of the depositor or by two or more persons each of whom believes himself entitled to the thing deposited with a third person, who shall deliver it in a proper case to the one to whom it belongs (Art. 1968, NCC) (2) Necessary: a. When it is made in compliance with a legal obligation (Art.1996, NCC); b. When it takes place on occasion of any calamity (Art.1996, NCC); c. Deposit of effects made by travelers in hotels and inns (Art.1998, NCC), or d. By travelers with common carriers (Art.1733, NCC).

Both movables and immovable may be the object of sequestration. The depositary of property cannot be relieved of his responsibility until the controversy which gave rise thereto has come to an end, unless the court so orders. Q: Define a contract of guaranty. A: It is a contract whereby a person called the guarantor binds himself to the creditor to fulfil the obligation of the principal debtor in case the latter fail to do so. (Art.2047(1), NCC).

Q: What are the classifications of guaranty? A: (1) Personal - the guaranty is the credit given by the guarantor. (Art. 2047, par. 1, NCC) (2) Real - the guaranty is the property, movable. (3) Conventional - agreed upon by the parties. (Art. 2051, NCC) (4) Legal - imposed by virtue of a provision of law. (Art. 2051, NCC) (5) Judicial - one which is required by a court to guarantee the eventual right of one of the parties in a case. (Art. 2051, NCC) (6) Gratuitous - the guarantor does not receive anything for acting as such. (Art. 2051, NCC) (7) Onerous - the guarantor receives valuable consideration. (Art. 2051, NCC) (8) Single - one constituted solely to guarantee or secure performance by the debtor of the principal obligation. (9) Double or sub-guaranty - one constituted to secure the fulfillment by the guarantor of a prior guaranty. (Art. 2075, NCC) (10) Definite - the guaranty is limited to the principal obligation only, or to a specific portion thereof. (11) Indefinite or simple - one which not only includes the principal obligation but also all its accessories including judicial costs. (Art. 2055, par 2, NCC) (12) Specific. (13) Continuing. (Art. 2053, NCC) Q: Define a contract of suretyship. A: A contract whereby one person engages to be answerable for the debt, default or miscarriage of the principal. (Visayan Surety and Insurance Corporation v. CA, 2001) For it to be enforceable, it must be in writing. (Art. 1403, NCC) Q: Distinguish guaranty and suretyship. Guaranty Secondary obligation To pay if the principal debtor CANNOT pay Entitled to the benefit of excussion Insures the solvency of the principal debtor Subsidiary liable

Suretyship Primary obligation To pay if the principal debtor DOES NOT pay Not entitled to the benefit of excussion Insures the debt Solidarily liable with the principal debtor

Q: What is the limit of guarantor’s liability? A: (1) Where the guaranty is definite: It is limited in whole or in part to the principal debt, to the exclusion of accessories; (2) Where guaranty is indefinite or simple: It shall comprise not only the principal obligation, but also all its accessories, including the judicial costs, provided that with respect to the latter, that the guarantor shall only be liable for those costs incurred after he has been judicially required to pay. (Art. 2055, NCC) Q: What is the benefit of excussion? A: The benefit is given to a guarantor wherein he cannot be compelled to pay the creditor unless the latter has exhausted all the property of the debtor, and has resorted to all the legal remedies against the debtor. (Art 2058, NCC) Q: How is the benefit of excussion exercised? A: In order that the guarantor may make use of the benefit of exclusion, he must set it up against the creditor upon the latter's demand for payment from him, and point out to the creditor available property of the debtor within Philippine territory, sufficient to cover the amount of the debt. (Art. 2060, NCC) Q: What is the benefit of division? A: Should there be several guarantors of only one debtor and for the same debt, the obligation to answer for the same is divided among all. (Art. 2065, NCC)

Q: How is a guaranty extinguished? A: (1) When the principal obligation is extinguished (Art.2076, NCC); (2) For the same causes as all other obligations under Art. 1231 (Art. 2076, NCC); (3) If the creditor voluntarily accepts immovable or other properties in payment of the debt, even if he should afterwards lose the same through eviction or conveyance of property (Art. 2077, NCC); (4) Release in favor of one of the guarantors, without the consent of the others, benefits all to the extent of the share of the guarantor to whom it has been granted (Art. 2078, NCC); (5) Extension granted to the debtor by the creditor without the consent of the guarantor. (Art. 2079, NCC) (6) Whenever by some act of the creditor, the guarantors even though they are solidarily liable cannot be subrogated to the rights, mortgages and preferences of the former; (Art. 2080, NCC) Q: What is the contract of antichresis? A: By the contract of antichresis, the creditor acquires the right to receive the fruits of an immovable of his debtor, with the obligation to apply them to the payment of the interest, if owing, and thereafter to the principal of his credit. (Art. 2132, NCC) Q: What are the characteristics of a contract of antichresis? A: (1) Accessory; (2) Formal – the amount of the principal and of the interest shall be specified in writing; otherwise, the contract is void. Q: Enumerate the special requisites in a contract of antichresis. A: (1) It covers only the fruits of an immovable, not the immovable itself; (2) Delivery of immovable is necessary for the creditor to apply the fruits; (3) The amount of the principal and the interest shall be specified in writing; (4) The creditor shall apply the fruits to the payment of the interest, if any, then to the principal of his credit; (5) The debtor cannot reacquire the enjoyment of the immovable without first having totally paid what he owes the creditor. Q: Distinguish between equity of redemption and right of redemption A: Equity of redemption Right of Redemption It is the right of the mortgagor in case of judicial It is the right of the mortgagor in case of extrajudicial foreclosure to redeem the mortgaged property after foreclosure to redeem the mortgaged property within his default in the performance of the conditions of the a certain period after it was sold for the satisfaction mortgage but before the confirmation of the sale of of the mortgage debt. the mortgaged property.

Q: What is a mortgage? A: A mortgage is a contract whereby the debtor secures to the creditor the fulfilment of a principal obligation, specially subjecting to such security immovable property or real rights over immovable property which obligation shall be satisfied with the proceeds of the sale of said property or rights in case the said obligation is not complied with at the time stipulated. Q: What are the requisites of a real mortgage? A: (1) Secure fulfillment of the principal obligation (Art. 2085, NCC); (2) Absolute ownership by mortgagor of the thing mortgaged (Art. 2085, NCC); (3) Free disposal of property (Art. 2085, NCC); (4) Cannot exist without a valid obligation; (5) Thing mortgaged may be alienated for payment of the principal obligation, which is due (Art.2085, NCC); and (6) Public document recorded in the Registry of Deeds (Art. 2125, NCC).

Q: What are the objects of a real mortgage? A: (1) Immovable; (2) Alienable real rights imposed upon immovable. (An. 2124, CC) Q: What are the kinds of real mortgage? A: (1) Voluntary; (2) Legal (Art. 2125 (2), NCC); and (3) Equitable. (Art 1602, NCC) Q: What is foreclosure of mortgage? A: It is a remedy available to a mortgagee by which he subjects the mortgaged property to the satisfaction of the obligation secured by the mortgage. Q: What is redemption? A: Reacquisition of property which was mortgaged. Q: What are the kinds of redemption? A: (1) Equity of Redemption: Right to redeem mortgaged property after default in the performance of the condition of the mortgage but before the sale of the mortgaged property or confirmation of sale in judicial foreclosure. (2) Right of redemption: Right to redeem the property within a certain period after it was sold for the satisfaction of the debt in extra-judicial foreclosure. Q: What are the requisites of a valid exercise of the right of redemption? A: (1) Must be made within 12 months from the date of the registration of the sale in the Office of the Registry of Property; (2) Payment of the purchase price of the property involved, plus 1% interest per month thereon, together with the amounts of assessments of taxes thereon, if any, paid by the purchaser after the sale with the same rate of interest; and (3) Writ of notice of the redemption must be served on the officer who made the sale and a duplicate filed with the Registry of Property of the Province. (Rosales v. Uboa, 1996) Q: What are the periods of redemption? A: Extra-judicial (Act No. 3135) a) Natural person — one (1) year from registration of the certificate of sale with Registry of Deeds. b) Juridical person — same rule as natural person. c) Juridical person (mortgagor) and bank (mortgagee) — three (3) months after foreclosure or before registration of certificate of foreclosure whichever is earlier. (Sec. 47, General Banking Law)

Judicial Before confirmation of the sale by the court except when the mortgagee is a banking institution redemption will then be one (1) year from the registration of sale. (Sec. 25, P.D. 694)

Q: What does Sec. 47 of RA 8791 (The General Banking Law of 2000) provide in relation to the right of redemption? A: Sec. 47 of RA 8791 provide that in the event of foreclosure, whether judicially or extrajudicially, of any mortgage on real estate which is security for any loan or other credit accommodation granted, the mortgagor or debtor whose real property has been sold for the full or partial payment of his obligation shall have the right within one year after the sale of the real estate, to redeem the property by paying the amount due under the mortgage deed, with interest thereon at the rate specified in the mortgage, and all the costs and expenses incurred by the bank or institution from the sale and custody of said property less the income derived therefrom.

Notwithstanding Act 3135, juridical persons whose property is being sold pursuant to an extrajudicial foreclosure, shall have the right to redeem the property in accordance with this provision until, but not after, the registration of the certificate of foreclosure sale with the applicable Register of Deeds which in no case shall be more than three (3) months after foreclosure, whichever is earlier. Owners of property that has been sold in a foreclosure sale prior to the effectivity of this Act shall retain their redemption rights until their expiration.

LAND TITLES AND DEEDS Q: Explain the Torrens System. A: It is the system for registration of title to land only, and not a system established for the acquisition of land. It is not intended that the lands may be acquired through the system of registration. It is intended only that the title, which the petitioner has, shall be registered and thereby cleared of all liens and burdens of whatsoever character, except those which shall be noted in the order of registration and in the certificate issued. (Roxas v. Enriquez, 1914) Q: What are the purposes of the Torrens System? A: The main purpose of the Torrens System are: (1) Avoid conflicts of title in and to real estate, and (2) Facilitate transactions relative thereto by giving the public the right to rely upon the face of a Torrens certificate of title and to dispense with the need of inquiring further. (Sps. Peralta v Heirs of Abalon, 2014) Q: What is the Mirror Doctrine? A: The mirror doctrine is when a person may be obliged to go beyond the certificate of title issued. These instances are: (1) When the party has actual knowledge of facts and circumstances that would impel a reasonably cautious man to make such inquiry or; (2) When the purchaser has knowledge of a defect or the lack of title in his vendor or of sufficient facts to induce a reasonably prudent man to inquire into the status of the title of the property in litigation. (Locsin v Hizon, 2014) Q: What is an original certificate of title? A: An original certificate of title (OCT) is the first title issued in the name of the registered owner by virtue of judicial or administrative proceedings. (Salao v Salao, 1976) Q: Who may apply for registration? A: (1) Those who by themselves or through their predecessors-ininterest 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 (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 rights of accession or accretion under existing laws. (4) Those who have acquired ownership of land in any other manner provided for by law. Q: Compare and contrast the following: Title over land, Deed, Land title, and Certificate of title. A: TITLE OVER LAND It is a juridical act or a deed which is not sufficient by itself to transfer ownership but provides only for a juridical justification for the effectuation of a mode to acquire or transfer ownership.

LAND TITLE It is the evidence of the owner’s right or extent of interest, by which he can maintain control, and as a rule, assert right to exclusive possession and enjoyment of property.

CERTIFICATE OF TITLE It is the transcript of the decree of registration made by the Register of Deeds in the registry. It accumulates in one document a precise and correct statement of the exact status of the fee simple title which an owner possesses.

DEED It is the instrument in writing, by which any real estate or interest therein is created, alienated, mortgaged or assigned, or by which title to any real estate may be affected in law or equity.

Q: What are the effects when a land is placed under the Torrens system? A: (1) Title becomes indefeasible and imprescriptible; (Collado v Court of Appeals, 2002); (2) Every decree or certificate of title issued shall be incontrovertible; (Director of Lands v. Register of Deeds of Rival, 1953); (3) Certificate is no longer subject to collateral attack (Ong, et al. v Sps. Cabucos, 2001); (4) Relieved from all claims except those noted thereon: a. Liens, claims or rights arising or existing under the laws and Constitution of the Philippines which are not by law required to appear of record in the Registry of Deeds in order to be valid against subsequent purchasers or encumbrancers of record; b. Unpaid real estate taxes levied and assessed within two (2) years immediately preceding the acquisition of any right over the land by an innocent purchaser for value, without prejudice to the right of the government to collect taxes payable before that period from the delinquent taxpayer alone; c. Any public highway or private way established or recognized by law, or any government irrigation canal or lateral thereof, if the certificate of title does not state that the boundaries of such highway or irrigation canal or lateral thereof have been determined; and d. Any disposition of the property or limitation on the use thereof by virtue of, or pursuant to, Presidential Decree No. 27 or any other law or regulations on agrarian reform. (Sec. 44, P.D. 1529) Q: Difference between voluntary and involuntary subsequent registration? A: Voluntary registration refers to deeds, instruments or documents which are the results of the free and voluntary acts of the parties thereto. Involuntary registration refers to such writ, order or process issued by a court of record affecting registered land, and also other instruments which are not the willful acts of the registered owner, executed without his knowledge or consent. (Villasor v. Camon, 1951) Q: When registration becomes notice to the world, as regards to voluntary and involuntary A: As to Voluntary, the moment the innocent purchaser for value presents and files a duly notarized and valid deed of sale and the same is entered in the primary entry book 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. While in involuntary, entry thereof in the primary entry book of the Registry of Deeds is sufficient notice to all persons even if the owner’s duplicate certificate of title is not presented to the Registry of Deeds (Garcia v. CA, 1980) Q: What are non-registrable properties? A: (1) Forest or timberland; (2) Foreshore land and seashore; (3) Mangrove swamps (DoF v. Villareal, 1980); (4) Mineral Lands (Lepanto v. Dumyung, 1979); (5) Military Reservations (Republic v. Marcos, 1973); (6) Navigable rivers streams & creeks; (7) Lakes (Art. 502, NCC); (8) Watershed (Tan. v. DoF, 1983); (9) Grazing Lands; (10) Previously titled Land; (11) Alluvial Deposit along river when man-made (Republic v. CA, 1984).

Q: Give the classifications of lands of the public domain. A: (1) Agricultural; (2) Forest or timber; (3) Mineral lands; and (4) National Parks. Q: What is the effect of registration of an instrument dealing with unregistered land? A: In cases of unregistered lands, under Act 3344, registration of instruments affecting unregistered lands is without prejudice to a third party with a better right. (Radiowealth Finance Co. v. Palileo, 1991) Accordingly, if a parcel of land covered by a Torrens title is sold, but the sale is registered under Act 3344 and not under the Land Registration Act, the sale is not considered registered (Amodia Vda. De Melencion, et al. v. Court of Appeals, 2007) and the registration of the deed does not operate as constructive notice to the whole world. (Republic v. Heirs of Francisca Dignos-Sorono, 2008)

TORTS AND DAMAGES Q: Define a tort. A: 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. (Art. 2176, NCC) Q: What are the requisites of quasi-delict? A: A person may be held liable for quasi-delict if the following requisites concur: 1. There must be an act or omission constituting fault or negligence; 2. Damage caused by the said act or omission; and 3. Causal relation between the damage and the act or omission (Taylor v. Manila Electric Company, 1910) Q: Give the distinction between culpa aquiliana and culpa contractual. A: QUASI-DELICT (Culpa Aquiliana)

BREACH OF CONTRACT (Culpa Contractual) Juridical Tie or Vinculum Juris The wrongful act/omission creates the vinculum The vinculum juris is the contractual relation between juris. the parties, which already exists independently of the breach. (Cangco v. Manila Railroad, 1918) Nature of Negligence Negligence is direct, substantive and Negligence is merely incidental to the performance of independent. the contractual obligation. Presumption of Negligence There is no presumption of negligence. The There is a presumption of negligence upon proof that injured party must prove the negligence of the there was breach of contract. (Consolidated Bank v. CA, defendant. 2003) Legal Defenses The exercise of diligence of a good father of a The exercise of diligence of a good father of a family family to prevent damage is a proper defense to prevent damage is not a complete and proper insofar as parents, guardians, and employers are defense in the selection and supervision of employees. concerned. Employer’s Liability There is presumptive responsibility on his part for His liability is direct and immediate. the negligence of his servants. Existence of Pre-existing Contractual Obligation There may or may not be a pre-existing There is always a pre-existing contractual relation. contractual obligation. Doctrine of Proximate Cause

Applicable

Not applicable Governing Provisions Art. 2176 Arts. 1170-1174 Proof Required Mere proof of the existence of the contract and Negligence/fault on the part of the defendant (FGU the failure of its compliance Insurance v. Sarmiento, 2002) Q: Give the distinction between culpa aquiliana and culpa criminal. QUASI-DELICT (Culpa Aquiliana)

DELICT/CRIME (Culpa Criminal)

What is Being Violated A private right is violated. It is a wrongful act against a It affects public interest. The commission of a private individual. crime is a wrong against the State. Governing Law The Civil Code repairs the damage by means of The Revised Penal Code punishes/corrects indemnification. criminal acts. Scope Quasi-delicts include all acts in which any kind of Crimes only include acts clearly covered by a fault/negligence intervenes. penal law. Quantum of Proof Proof of the fault/negligence requires only The guilt of the accused must be proven beyond preponderance of evidence. (Sec. 1, Rule 133, Rules of reasonable doubt. Court) Available Defenses The exercise of diligence of a good father of the family The defenses are provided under the Revised is available as a defense. Penal Code. Employer’s Liability (if instituted against an employee) The plaintiff may directly hold the employer liable, the The plaintiff can only hold the employer employer being vicariously liable for the negligent act subsidiarily liable for the civil liability. (L.G. Foods of its employee. v. Philadelphia, 2006) Q: Can a quasi-delict exist despite the existence of contractual relations? A: Yes. The liabilities of a manufacturer or seller of injury-causing products may be based on negligence, breach of warranty, tort, or other grounds such as fraud, deceit, or misrepresentation. (Coca-Cola Bottlers Phils. v. CA, 1993) Q: If, in case of a negligent employee, the injured party does not file a separate civil action against the employer, can the employer still be held liable if the employee cannot pay damages? A: Yes, he can still be liable. The employer may still be held subsidiarily liable for the employee’s civil liability in a criminal action. (Art. 103, RPC) Q: When does vicarious liability apply? A: There is vicarious liability where a person is not only liable for torts committed by himself, but also for torts committed by others with whom he has a certain relationship and for whom he is responsible. (Tamargo vs. Court of Appeals, 209 SCRA 518) Q: Who are vicariously liable? A: Persons vicariously liable Parents

Persons for whose acts liability is imputed Acts of their children up to 21 years old, who live in their company.

Nature of liability Direct and primary

Defenses (1) The child is not living in their company. (2) Exercise of DGFF to prevent damage

Guardians

School, Administrators, Teachers and Individual, Entity or Institution Engaged in Child Care

Teachers or Heads of Establishment of Arts and Trade Note: Schools and Adminstrators are not liable. Employers

Minors and incapacitated persons who are under their authority and live in their company. A child who is a minor, under their supervision, instruction or custody, over which they exercise special parental authority.

Pupils, students, and apprentices, so long as they remain in custody—if no longer minors.

Direct and primary

Direct, Principal, Solidary

Exercise of DGFF to prevent damage and

Note: Parents, guardians, or persons exercising substitute parental authority are subsidiarily liable. Direct, Primary, and Solidary

Employees and household helpers—in the service or on occasion of their functions or the scope of their task.

Direct, Primary, Solidary with employee.

State

Special Agents—one who receives a fixed order, foreign to the exercise of the duties of the official.

Direct and Primary

Head of Department of Government or Superior Public Officer

Subordinates that he has authorized by written order the specific act or misconduct.

Direct and Primary

and the

(1) The activity is not an authorized activity (2) The child is not under their supervision, instruction, or custody (3) Exercise of due diligence (1) The student is not in their custody (2) Exercise of due diligence

The employee is not performing or is acting beyond the scope of his functions. The person who directly caused the loss is not a special agent; the official was performing the task pertaining to him. Did not give a written order.

(Taken from Aquino, 2018) Q: Is the cause of action against a negligent employee the same as the cause of action against his employer for the same act? A: No. The cause of action against the employee is rooted on Art. 2176 of the Civil Code, whereas that against the employer is rooted on his vicarious liability while his employee is in performance of his duties. Q: What is the doctrine of Res Ipsa Loquitur? A: It is a Latin phrase that literally means “the thing or the transaction speaks for itself”. It is a maxim for the rule that the fact of the occurrence of an injury, taken with the surrounding circumstances, may permit an inference or raise a presumption of negligence, or make out a plaintiff’s prima facie case, and present a question of fact for defendant to meet with an explanation. (Tan v. Jam Transit, 2009) Q: What are the Requirements for Res Ipsa Loquitur to apply? A: (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 (3) The possibility of contributing conduct, which would make the plaintiff responsible eliminated. (Rogelio Ramos vs. Court of Appeals, 1999)

is

Q: Discuss the Doctrine of Last Clear Chance. A: The doctrine of last clear chance states that where both parties are negligent but the negligent act of one is appreciably later than that of the other, or where it is impossible to determine whose fault or negligence caused the loss, the one who had the last clear opportunity to avoid the loss but failed to do so, is chargeable with the loss. 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. (Consolidated Bank vs. CA, 2003) Q: Discuss the Doctrine of Damnum Absque Injuria. A: If a person sustains actual damage, that is, harm or loss to his person or property, without sustaining any legal injury, that is, an act or omission which the law does not deem an injury, any injury or damage occasioned thereby must be borne solely by him. (Spouses Custodio v. Court of Appeals, 1996) Damages will not be awarded since the loss or harm was not the result of a violation of a legal duty. Q: Discuss the Doctrine of Volenti Non Fit Injuria. A: The doctrine of volenti non fit injuria or “to which a person assents is not esteemed 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 Manila Garden v. Roberto Reyes, 2005) Q: Discuss the Doctrine of Proximate Cause. A: It is 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. More comprehensively, the proximate legal cause is that acting first and producing the injury, either immediately or by setting other events in motion, all constituting a natural and continuous chain of events, 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 cause which first acted, 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 or default that an injury to some person might probably result therefrom. (Bataclan v. Medina, 1957) Q: Explain the concept of negligence. A: 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, time, and place. (Art. 1173, NCC) Note: In the determination of the presence or absence of negligence, what is important is the conduct of the actor. His state of mind, existence of good faith, or use of sound judgment are immaterial. (Aquino, 2018) Q: What is the default standard of care? A: Diligence of a good father of a family. The test by which to determine the existence of negligence in a particular case may be stated as follows: Did the defendant in doing the alleged negligent act use that reasonable care and caution which an ordinarily prudent person would have used in the same situation? If not, then he is guilty of negligence. (Picart v. Smith, 1918) Q: Is the “Diligence of a good father of a family” the standard of care all the time? A: No. There are special circumstances wherein a higher degree of care is required: Motorists, bicyclists

compared

to

Persons in possession or control of extremely dangerous instrumentalities Children

While the duty of using reasonable care falls alike on a motorist and a bicyclist, due to the inherent differences in the two vehicles, more care is required from the motorist to fully discharge the duty than from the bicyclist. (Anonuevo v. CA, 2004) 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. (Pacis v. Morales, 2010) The standard of conduct which a child must conform for his own protection is that degree of care ordinarily exercised by children of the same age, capacity, discretion, knowledge and experience under the same/similar circumstances. (Sangco, Cezar J. Philippine Law on Torts and Damages, pp. 71.)

Experts

Pharmacists

Medical professionals

Lawyers

Insane persons

Banks

Turntable Cases: These are cases where the owner of the property is held liable to children who are trespassing thereon and injured, upon the ground that the owner is bound to know that children may be attracted and may be injured thereby, although the owner is guilty of no negligence except in maintaining the property in such condition that children may trespass thereon to their harm. (Taylor v. MERALCO, 1910) 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 Ice v. Philippine Motors, 1930) There exists an imperative duty on the seller/druggist to take precaution to prevent death/injury to any person who relies on one’s absolute honesty and peculiar learning. (Mercury Drug v. De Leon, 2009) The responsibility of the druggist to use care can be qualified as the highest degree of care known to practical men. (U.S. v. Pineda, 1918) A doctor has a duty to use at least the same level of care that any other reasonable competent doctor would use to treat a condition under the same circumstances. (Cruz v. CA, 1997) The standard contemplated is not the average merit among all known practitioners, but the average merit among only the ordinarily good physicians. (Reyes v. Sisters of Mercy Hospital, 2000) An attorney is not bound to exercise extraordinary diligence, but only a reasonable degree of care and skill. He will be protected as long as he acts honestly and in good faith to the best of his skill and knowledge. (Adarne v. Aldaba, 1978) The act/omission of a person who is suffering from mental defect is still subject to the standard test of a reasonable man. A lunatic or demented person may incur civil liability even if he is held to be exempt from criminal liability. (US v. Baggay, Jr., 1911) The law imposes in banks the diligence higher than that of the good father of the family, in view of the fiduciary nature of banking. It is the bank’s obligation to observe high standards of integrity and performance is deemed written into every deposit agreement between the bank and its depositor. (Consolidated Bank v. CA, 2003)

Q: When is negligence excusable? A: Negligence to be excusable must be one which ordinary diligence and prudence could not have guarded against. (Santos v. Rustiao, 1951) Q: When is there a presumption of negligence? A: (1) 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 regulations. (Article 2185, NCC) (2) 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. (Article 2188, NCC). However, the presumption does not apply to those whose occupation or business requires the possession or use of a firearm, such as peace officers or armed forces, or in the case of poisonous substances, the drug companies or drug stores. (3) 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. Q: When does Strict Liability apply? A: A person may be held liable independent of fault or negligence. Negligence or intent is immaterial in awarding damages against the defendant in strict liability cases. (1) Cases covered by the Warsaw Convention. The Warsaw Convention seeks to accommodate or balance the interests of passengers seeking recovery for personal injuries and the interests of air carriers seeking

(2) (3) (4)

(5)

to limit potential liability. It employs a scheme of strict liability favoring passengers and imposing damage caps to benefit air carriers. (Philippine Airlines, Inc. v. Hon. Adrian Savillo, 2008) 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 except only in case the damage should come from force majeure or from the fault of the person who has suffered damage. (Art. 2183, NCC) 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. (Art. 2193, NCC) The employer is obliged to pay compensation for the death of or injuries to their employees, even though the event may have been purely accidental or entirely due to a fortuitous cause, if the death or personal injury arose out of and in the course of the employment. The employer is also liable for compensation if the employee contracts any illness or disease caused by such employment or as the result of the nature of the employment. (Art. 1171 , NCC) Cases under product liability law which holds manufacturers and sellers liable for damages resulting from defective products.

Q: Differentiate Injury, Damage, and Damages. A: Injury is the illegal invasion of a legal right. Damage is the loss, hurt, or harm which results from the injury. Damages are the recompense or compensation awarded for the damage suffered. (People v. Ballesteros, 1998) 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. (Sps. Custodio v. Court of Appeals, 1996) Q: Enumerate the different kinds of damages. A: (MENTAL) (1) Moral; (2) Exemplary; (3) Nominal; (4) Temperate; (5) Actual; and (6) Liquidated. (Art. 2197, NCC) Q: What are included in Actual/Compensatory Damages? A: It comprehends not only the value of the loss suffered (damnum emergens) but also that of the profits which the obligee failed to obtain (lucrum cessans). (RCPI v. CA, 1981) Q: What needs to be proved to claim for Actual or Compensatory Damages? A: (1) In granting actual or compensatory damages, the party making a claim for such must present the best evidence available, viz., receipts, vouchers, and the like, as corroborated by his testimony. (People v. Ballesteros, 1999) (2) To recover damages, the amount of loss must not only be capable of proof but must actually be proven with reasonable degree of certainty. (Luxuria Homes, Inc. v. CA, 1999) (3) The amount should be that which would put the plaintiff in the same position as he would have been in had he not sustained the wrong for which he is now getting compensation or reparation. (Lim v. CA, 2002) Q: What are included in Moral Damages? A: Moral damages includes 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 cause of the defendant's wrongful act or omission. (Art. 2217, NCC) Q: What needs to be proved to claim for Moral Damages? A: (1) An award of moral damages must be anchored on a clear showing that the party claiming the same actually experienced mental anguish, besmirched reputation, sleepless nights, wounded feelings, or similar injury. Bereft of any proof regarding the fact of suffering, moral damages may not be awarded. (International Container Terminal Services, Inc. v. Chua, 2014)

(2) To recover moral damages, the plaintiff must allege and prove factual basis for moral damages and causal relation to the defendant's act. (Mahinay v. Velasque Jr., 2004) The exception is that in rape cases, moral damages may be awarded to the victim in criminal proceedings without the need for pleading of proof or the basis thereof. (Cruz v. People, 2014) Q: What are Nominal Damages? A: It is 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 or where there has been a breach of contract and no substantial injury or actual damages whatsoever have been or can be shown (Francisco v. Ferrer, 2001) Q: What are the elements of nominal damages? A: (1) Plaintiff has a right; (2) Such right is violated; and (3) The purpose of awarding damages is to vindicate or recognize the right violated. (Art. 2221, NCC) Q: May nominal damages co-exist with other damages? A: No. Nominal damages cannot co-exist with actual or compensatory damages. (Armovit v. CA, 1990) The purpose of nominal damages is to vindicate or recognize a right that has been violated, to preclude further contest thereof and not for th purpose of indemnifying the plaintiff for any loss suffered by him. Q: What are Temperate/Moderate Damages? A: These are damages, which are more than nominal but, less than compensatory, and may be recovered when the court finds that some pecuniary loss has been suffered but its amount cannot be proved with certainty. (Art. 2224, NCC) Q: What are the elements of temperate/moderate damages? A: (1) Some pecuniary loss; (2) Loss is incapable of pecuniary estimation; (3) The damages awarded are reasonable. (Art. 2224, NCC) Q: What are Liquidated Damages? A: Liquidated damages are those agreed upon by the parties to a contract, to be paid in case of breach thereof. (Article 2226, NCC) Q: May Liquidated Damages be reduced? A: Liquidated damages, whether intended as an indemnity or a penalty, shall be equitably reduced if they are iniquitous or unconscionable (Article 2227, NCC) Q: When shall measure of damages be determined by law and not the stipulation of the parties? A: 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. Q: What is Exemplary/Corrective Damages? A: These are damages imposed by way of example or correction for the public good, in addition to moral, temperate, liquidated or compensatory damages. (Art. 2229, NCC) Exemplary damages are designed to permit the courts to mold behavior that has socially deleterious consequences, and its imposition is required by public policy to suppress the wanton acts of an offender. However, it cannot be recovered as a matter of right. It is based entirely on the direction of the court. (Kierulf v. CA, 1997) Q: What are the requirements for it to be imposed? A: (1) May be imposed by way of example or correction only in addition, among others, to compensatory damages, and cannot be recovered as a matter of right, their determination depending upon the amount of compensatory damages that may be awarded to the claimant; (2) The claimant must first establish his right to moral, temperate, liquidated or compensatory damages; and

(3) The wrongful act must be accompanied by bad faith, and the award would be allowed only if the guilty party acted in a wanton, fraudulent, reckless, oppressive or malevolent manner. (Globe Mackay v. CA, 1989) Q: What are included in damages in case of death caused by a negligent act or a crime? A: The following damages may be recovered (1) Civil indemnity ex delicto for the death of the victim  Currently fixed at P50,000 in case of homicide (De Villa v. People, 2012), and P75,000 in case of murder. (People v. Camat, 2012) (2) Loss of Earning Capacity of the deceased (3) Actual or compensatory damages (4) Moral damages for mental anguish by reason of the death of the deceased. (Art. 2206, NCC) (5) Exemplary damages (6) Attorney’s fees and expenses of litigation (7) Interest, in proper cases. (People v. Tolentino, 2008) (8) If the deceased was obliged to give support, 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, not exceeding five (5) years, the exact duration to be fixed by the court.