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TABLE OF CONTENTS
TABLE OF CONTENTS ........................................................................................................................................ 6
I. EFFECT AND APPLICATION OF LAWS ............................................................................................................... 9
A. WHEN LAW TAKES EFFECT; PUBLICATION....................................................................................................... 9
B. IGNORANCE OF THE LAW; IGNORANCE OF FACT .......................................................................................... 10
C. RETROACTIVITY OF LAWS; VESTED RIGHTS PRINCIPLE ................................................................................. 10
D. MANDATORY, PROHIBITORY AND PERMISSIVE LAWS .................................................................................. 10
E. WAIVER OF RIGHTS ....................................................................................................................................... 11
F. REPEAL OF LAWS ........................................................................................................................................... 12
G. JUDICIAL DECISION ........................................................................................................................................ 13
H. DUTY TO RENDER JUDGMENT ....................................................................................................................... 13
I. INTERPRETATION OF DOUBTFUL STATUTES ..................................................................................................... 13
J. CUSTOM ............................................................................................................................................................ 13
K. LEGAL PERIODS.............................................................................................................................................. 14
L. GENERALITY PRINCIPLE OF PENAL LAWS ...................................................................................................... 14
M. CONFLICT OF LAWS ....................................................................................................................................... 14
1. JURISDICTION; FORUM NON CONVENIENS .............................................................................................. 15
2. CHOICE OF LAW; DOCTRINE OF RENVOI; DOCTRINE OF PROCESSUAL PRESUMPTION ........................... 16
Choice of Law ........................................................................................................................................................ 16
3. RECOGNITION AND ENFORCEMENT OF FOREIGN JUDGMENT................................................................. 24
II. HUMAN RELATIONS ................................................................................................................................... 27
A. ABUSE OF RIGHTS .......................................................................................................................................... 27
1. ACTS CONTRA BONUS MORES .................................................................................................................. 27
2. BREACH OF PROMISE OF MARRIAGE ........................................................................................................ 28
B. UNJUST ENRICHMENT (ACCION IN REM VERSO)........................................................................................... 28
C. THOUGHTLESS EXTRAVAGANCE ................................................................................................................... 28
D. TORTIOUS INTERFERENCE ............................................................................................................................. 28
III. PERSONS AND FAMILY RELATIONS ............................................................................................................. 30
A. NATURAL PERSONS ....................................................................................................................................... 31
1. CAPACITY TO ACT; RESTRICTIONS ............................................................................................................. 31
2. COMMENCEMENT AND END OF CIVIL PERSONALITY ............................................................................... 31
3. PROOF OF DEATH ...................................................................................................................................... 31
B. JURIDICAL PERSONS ...................................................................................................................................... 32
C. DOMICILE; RESIDENCE .................................................................................................................................. 32
D. SURNAMES .................................................................................................................................................... 32
E. ABSENTEES .................................................................................................................................................... 33
F. MARRIAGE; GENERAL PRINCIPLES ................................................................................................................ 34
1. ESSENTIAL AND FORMAL REQUISITES....................................................................................................... 34
2. EFFECTS OF ABSENCE, DEFECT OR IRREGULARITY .................................................................................... 35
G. MIXED MARRIAGES ....................................................................................................................................... 36
H. VOID MARRIAGES; EFFECTS AND REMEDIES ................................................................................................. 37
I. VOIDABLE MARRIAGES; EFFECTS AND REMEDIES............................................................................................. 41
J. LEGAL SEPARATION........................................................................................................................................... 44
K. PROPERTY RELATIONS BETWEEN SPOUSES .................................................................................................. 45
1. DONATION PROPTER NUPTIAS; VOID DONATIONS .................................................................................. 46
2. MARRIAGE SETTLEMENTS ......................................................................................................................... 47
3. JUDICIAL SEPARATION OF PROPERTY ....................................................................................................... 54
4. PROPERTY REGIME OF UNIONS WITHOUT MARRIAGE ............................................................................ 54
L. RIGHTS AND OBLIGATIONS BETWEEN HUSBAND AND WIFE ........................................................................ 57

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M. THE FAMILY; FAMILY HOME .......................................................................................................................... 57

N. PATERNITY AND FILIATION ............................................................................................................................ 59
1. CONCEPTS OF PATERNITY, FILIATION AND LEGITIMACY .......................................................................... 59
2. LEGITIMATE AND ILLEGITIMATE CHILDREN .............................................................................................. 59
3. LEGITIMATED CHILDREN ........................................................................................................................... 62
4. ADOPTED CHILDREN.................................................................................................................................. 63
O. SUPPORT ....................................................................................................................................................... 66
P. PARENTAL AUTHORITY .................................................................................................................................. 68
IV. PROPERTY, OWNERSHIP, AND ITS MODIFICATIONS .................................................................................... 73
A. CLASSIFICATION OF PROPERTY ..................................................................................................................... 73
1. IMMOVABLES AND MOVABLES................................................................................................................. 74
2. PUBLIC DOMINION, PATRIMONIAL AND PRIVATE PROPERTY .................................................................. 76
B. OWNERSHIP .................................................................................................................................................. 77
C. RIGHT OF ACCESSION .................................................................................................................................... 79
D. QUIETING OF TITLE ........................................................................................................................................ 87
E. CO-OWNERSHIP ............................................................................................................................................ 89
F. POSSESSION .................................................................................................................................................. 93
G. ACTIONS TO RECOVER OWNERSHIP AND POSSESSION OF PROPERTY .......................................................... 98
1. ACCION INTERDICTAL (more commonly known as Ejectment Cases) ...................................................... 98
2. ACCION PUBLICIANA ................................................................................................................................. 99
3. ACCION REIVINDICATORIA ...................................................................................................................... 100
H. EASEMENTS; EASEMENT OF RIGHT OF WAY ............................................................................................... 101
I. NUISANCE ....................................................................................................................................................... 104
V. DIFFERENT MODES OF ACQUIRING OWNERSHIP........................................................................................ 107
A. OCCUPATION............................................................................................................................................... 107
B. DONATION .................................................................................................................................................. 107
C. PRESCRIPTION ............................................................................................................................................. 113
VI. LAND TITLES & DEEDS.............................................................................................................................. 121
A. REGALIAN DOCTRINE .................................................................................................................................. 121
B. NATIONALITY RESTRICTIONS ON LAND OWNERSHIP .................................................................................. 122
C. REGISTRY OF PROPERTY .............................................................................................................................. 124
D. TORRENS SYSTEM; CERTIFICATE OF TITLE (P.D. NO. 1529) .......................................................................... 124
E. ORIGINAL REGISTRATION ............................................................................................................................ 127
1. WHO MAY APPLY .................................................................................................................................... 138
2. DECREE OF REGISTRATION ...................................................................................................................... 139
3. REVIEW OF DECREE OF REGISTRATION; ................................................................................................. 140
4. INNOCENT PURCHASER FOR VALUE (IPV); RIGHTS OF IPV ..................................................................... 141
F. CONFIRMATION OF IMPERFECT TITLES (RA 11573) .................................................................................... 142
G. SUBSEQUENT REGISTRATION...................................................................................................................... 146
1. VOLUNTARY DEALINGS ........................................................................................................................... 148
2. INVOLUNTARY DEALINGS ........................................................................................................................ 151
H. NON-REGISTRABLE PROPERTIES ................................................................................................................. 157
I. DEALINGS WITH UNREGISTERED LANDS ......................................................................................................... 158
J. ASSURANCE FUND .......................................................................................................................................... 159
K. RECONSTITUTION OF TITLES ....................................................................................................................... 161

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VII. WILLS AND SUCCESSION ......................................................................................................................... 175

A. GENERAL PROVISIONS................................................................................................................................. 175
B. TESTAMENTARY SUCCESION ....................................................................................................................... 176
1. WILLS ....................................................................................................................................................... 176
2. TESTAMENTARY SUCCESSION ................................................................................................................. 178
3. NOTARIAL AND HOLOGRAPHIC WILLS; JOINT WILL ................................................................................ 179
4. WITNESSES TO A NOTARIAL WILL; QUALIFICATIONS AND DISQUALIFICATIONS ................................... 183
5. CODICILS AND INCORPORATION BY REFERENCE .................................................................................... 183
6. CONFLICT RULES...................................................................................................................................... 184
7. REVOCATION OF WILLS ........................................................................................................................... 184
8. REPUBLICATION AND REVIVAL OF WILLS................................................................................................ 185
9. ALLOWANCE AND DISALLOWANCE OF WILLS ........................................................................................ 186
10. INSTITUTION OF SUBSTITUTION OF HEIRS.............................................................................................. 188
11. DISPOSITIONS WITH A CONDITION OR TERM......................................................................................... 191
12. COMPULSORY HEIRS; LEGITIME .............................................................................................................. 193
13. DISINHERITANCE ..................................................................................................................................... 193
14. LEGACIES AND DEVISES ........................................................................................................................... 198
C. INTESTATE SUCCESSION .............................................................................................................................. 202
1. CAUSES OF INTESTACY AND RELATIONSHIP ........................................................................................... 202
2. RIGHT OF REPRESENTATION ................................................................................................................... 204
3. ORDER OF INTESTATE SUCCESSION ........................................................................................................ 204
D. PROVISIONS COMMON TO TESTATE AND INTESTATE SUCCESSION ........................................................... 209
VIII. OBLIGATIONS AND CONTRACTS ............................................................................................................. 218
A. OBLIGATIONS .............................................................................................................................................. 218
1. CIVIL AND NATURAL OBLIGATIONS......................................................................................................... 218
2. GENERAL PROVISIONS............................................................................................................................. 219
3. NATURE AND EFFECTS OF OBLIGATIONS ................................................................................................ 221
4. DIFFERENT KINDS OF OBLIGATIONS ....................................................................................................... 226
5. EXTINGUISHMENT OBLIGATIONS............................................................................................................ 235
B. CONTRACTS ................................................................................................................................................. 245
1. ESSENTIAL REQUISITES OF CONTRACT.................................................................................................... 245
2. PRINCIPLES IN CONTRACT LAW............................................................................................................... 248
3. REAL VS CONSENSUAL CONTRACTS; FORMS, REFORMATION AND INTERPRETATION .......................... 249
4. DEFECTIVE CONTRACTS........................................................................................................................... 250
C. ESTOPPEL .................................................................................................................................................... 257
IX. CONTRACT OF SALE ................................................................................................................................. 260
A. NATURE AND FORM .................................................................................................................................... 260
1. CONTRACT OF SALE VS. CONTRACT TO SELL .......................................................................................... 264
2. OPTION CONTRACT ................................................................................................................................. 264
3. RIGHT OF FIRST REFUSAL ........................................................................................................................ 265
4. EARNEST MONEY IN CONTRACT OF SALE AND CONTRACT TO SELL....................................................... 266
B. CAPACITY TO BUY OR SELL........................................................................................................................... 266
C. OBLIGATIONS OF THE VENDOR ................................................................................................................... 267
D. DOUBLE SALE............................................................................................................................................... 269
E. EFFECTS OF LOSS OF THING SOLD ............................................................................................................... 270
F. RECTO LAW ................................................................................................................................................. 270
G. MACEDA LAW .............................................................................................................................................. 271
H. RIGHTS OF UNPAID SELLER.......................................................................................................................... 272
I. CONVENTIONAL REDEMPTION ....................................................................................................................... 273
J. EQUITABLE MORTGAGE .................................................................................................................................. 274

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X. CONTRACT OF LEASE ................................................................................................................................ 286

A. GENERAL PROVISIONS................................................................................................................................. 286
B. RIGHTS AND OBLIGATIONS OF LESSOR AND LESSEE ................................................................................... 287
C. SUBLEASE AND ASSIGNMENT OF LEASE ...................................................................................................... 289
XI. AGENCY .................................................................................................................................................. 291
A. NATURE, FORMS, AND KINDS...................................................................................................................... 292
B. OBLIGATIONS OF THE AGENT AND THE PRINCIPAL ..................................................................................... 300
C. MODES OF EXTINGUISHMENT .................................................................................................................... 306
XII. CREDIT TRANSACTIONS ...................................................................................................................... 310
A. MUTUUM AND COMMODATUM ................................................................................................................ 310
B. DEPOSIT....................................................................................................................................................... 316
C. GUARANTY AND SURETYSHIP...................................................................................................................... 324
D. REAL ESTATE MORTGAGE............................................................................................................................ 333
E. PERSONAL PROPERTY SECURITY ACT .......................................................................................................... 342
XIII. COMPROMISE ....................................................................................................................................... 347
XIV. QUASI-CONTRACTS ............................................................................................................................... 350
A. NEGOTIORIUM GESTIO ............................................................................................................................... 350
B. SOLUTIO INDEBITI ....................................................................................................................................... 350
C. OTHER QUASI-CONTRACTS ......................................................................................................................... 351
XV. TORTS.................................................................................................................................................... 353
A. COMMON PRINCIPLES ................................................................................................................................ 353
1. TORTS VS CRIMES .................................................................................................................................... 353
2. TORTS VS CONTRACTS............................................................................................................................. 354
B. CLASSIFICATION OF TORTS .......................................................................................................................... 355
1. NEGLIGENCE ............................................................................................................................................ 355
2. DEGREES OF DILIGENCE AND NEGLIGENCE; PRESUMPTION .................................................................. 355
3. INTENTIONAL .......................................................................................................................................... 356
4. STRICT LIABILITY ...................................................................................................................................... 356
C. THE TORTFEASOR; JOINT AND DIRECT LIABILITIES ...................................................................................... 357
D. PROXIMATE CAUSE; CONCEPT; DOCTRINE OF LAST CLEAR CHANCE .......................................................... 357
E. VICARIOUS LIABILITY ................................................................................................................................... 358
F. RES IPSA LOQUITOR..................................................................................................................................... 363
G. DAMNUM ABSQUE INJURIA ........................................................................................................................ 363
H. DEFENSES IN TORT ACTIONS ....................................................................................................................... 364
I. MEDICAL NEGLIGENCE AND MALPRACTICE .................................................................................................... 366
J. DAMAGES; KINDS OF DAMAGES; WHEN MAY BE RECOVERED ....................................................................... 366
1. ACTUAL AND COMPENSATORY DAMAGES ............................................................................................. 366
2. MORAL DAMAGES ................................................................................................................................... 371
3. NOMINAL DAMAGES ............................................................................................................................... 372
4. TEMPERATE OR MODERATE DAMAGES .................................................................................................. 373
5. LIQUIDATED DAMAGES ........................................................................................................................... 373
6. EXEMPLARY OR CORRECTIVE DAMAGES ................................................................................................ 373
K. DAMAGES IN CASES OF DEATH.................................................................................................................... 373
L. DUTY OF INJURED PARTY ............................................................................................................................ 374

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I. EFFECT AND APPLICATION OF LAWS A. WHEN LAW TAKES EFFECT;

PUBLICATION
TOPIC OUTLINE UNDER THE SYLLABUS
General Rule: Laws shall take effect after fifteen
days following the completion of their publication
A. WHEN LAW TAKES EFFECT; either in the Official Gazette or in a newspaper of
PUBLICATION general circulation in the Philippines, unless it is
otherwise provided. (Art. 2, CC as amended by E.O.
B. IGNORANCE OF THE LAW; No. 200)
IGNORANCE OF FACT
NOTE: The phrase “unless it is otherwise provided”
C. RETROACTIVITY OF LAWS; VESTED means a different effectivity date is provided by the
RIGHTS PRINCIPLE law itself. (Tañada v. Tuvera, G.R. No. L-63915,
1986) It refers to a different effectivity date other
D. MANDATORY, PROHIBITORY AND than fifteen days following the completion of the
PERMISSIVE LAWS law’s publication. (Nagkakaisang Maralita ng Sitio
Masigasig, Inc. v. Military Shrine Services, G.R. No.
E. WAIVER OF RIGHTS 187587, 2013)
F. REPEAL OF LAWS Notes Regarding Publication
1. Publication is mandatory.
G. JUDICIAL DECISION 2. Publication must be in full. Otherwise, it is
no publication at all.
H. DUTY TO RENDER JUDGMENT 3. The purpose of publication is to inform the
public of its contents.
I. INTERPRETATION OF DOUBTFUL 4. It applies to all statutes, including
STATUTES presidential issuances “of a public nature”
or “of general applicability” (Tañada v.
J. CUSTOM Tuvera, G.R. No. L-63915, 1986)
K. LEGAL PERIODS Effects of Non-Publication
If there is a lack of/absence of full compliance with
L. GENERALITY PRINCIPLE OF PENAL the publication requirement, it will render the law
LAWS ineffective.
M. CONFLICT OF LAWS Newspaper of General Circulation
1. Jurisdiction; Forum Non Conveniens 1. A newspaper of general circulation is
2. Choice of Law; Doctrine of Renvoi; published for the dissemination of local
Doctrine of Processual Presumption news and general information.
a. Lex Nationalii 2. It has a bona fide subscription list of paying
b. Lex Rei Sitae subscribers.
c. Lex Contractus 3. It is published at regular intervals.
d. Lex Loci Celebrationis 4. The newspaper must not also be devoted
e. Lex Domicilii to the interest or published for the
f. Lex Fori entertainment of a particular class,
g. Lex Loci Delicti profession, trade, calling, race or religious
h. Lex Loci Solutionis denomination.
3. Recognition and Enforcement of 5. The newspaper need not have the largest
Foreign Judgment circulation so long as it is of general
circulation. (China Banking Corp. v.
Spouses Martir, G.R. No. 184252, 2009)

Internet Publication
The publication of the Rules of Procedure in the
website of the Senate, or in pamphlet form available
at the Senate, is not sufficient under the Tañada v.
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Official Gazette or in a newspaper of general Exceptions to the Exceptions:

circulation. 1. Ex post facto laws;
2. Bills of attainder;
R.A. No. 8792, otherwise known as the Electronic 3. When to give retroactive effect will impair
Commerce Act of 2000, considers an electronic data the obligation of contracts;
message or an electronic document as the 4. When to give retroactive effect will affect
functional equivalent of a written document only for injuriously vested rights;
evidentiary purposes. (Garcillano v. HOR, G.R. 5. When to give retroactive effect to a change
No. 170338/ G.R. No. 179275, 2008) in a substantive law will prejudice a party
that has followed the earlier law or judicial
Notes Regarding the Exception doctrine. (People v. Licera, L-39990, 1975);
1. If the law provides for a different period, and
regardless of the fact that the period 6. When there is doubt as to whether the
provided is shorter or longer than the 15- legislature intended the law to have
day period as written in Article 2 of the New retroactive effect.
Civil Code, that period will prevail.
2. If the law explicitly provides that it shall take Note Regarding Retroactivity of Penal Laws
effect immediately, it means that the law will An accused is deemed to be a habitual delinquent
take effect immediately after compliance if, within 10 years from his or her release or final
with the publication requirement. conviction for the same crimes, he was found guilty
any of the following crimes for the third time or as an
oftener: serious or less serious physical injuries,
B. IGNORANCE OF THE LAW; robo, hurto, estafa or falsification. (Art. 62, RPC)
IGNORANCE OF FACT
Vested Rights
General Rule: Ignorance of the law excuses no one Vested right is some right or interest in property that
from compliance therewith. (Art. 3, CC). Ignorantia has become fixed and established that it is no longer
legis non excusat. Once a law is published, the open to controversy. (Balbao v. Farrales, G.R. No.
public is given constructive notice of the law’s L-27059, 1928)
existence and effectivity.
Statutes are generally not to be construed as
Note: The application of Article 3 is limited to intended to have a retroactive effect so as to affect
mandatory and prohibitory laws. This may be pending proceedings, unless such intent is
deduced from the language of the provision, which, expressly declared or clearly and necessarily
notwithstanding a person’s ignorance, does not implied from the language of the enactment.
excuse his or her compliance with the (Espiritu v. Cipriano, G.R. No. L-32743, 1974)
laws.(Consunji Inc. v. CA, G.R. No. 137873, 2001)

D. MANDATORY, PROHIBITORY AND

C. RETROACTIVITY OF LAWS; VESTED PERMISSIVE LAWS
RIGHTS PRINCIPLE
General Rule: Acts executed against the provisions
General Rule: Laws shall have no retroactive effect, of mandatory or prohibitory laws shall be void. (Art.
unless the contrary is provided. (Art. 4, CC) 5, CC)

Exceptions: Exception: If the law expressly provides for the

1. When the law is penal in nature and is validity of acts committed in violation of a mandatory
favorable to the accused, who is not a or prohibitory provision of a statute.
habitual criminal/delinquent. (Art. 22, RPC)
2. When the law expressly provides for Mandatory Laws
retroactivity. Obligatory laws whereby the omission of which
3. When the law is interpretative. renders the proceeding or acts to which it relates to
4. When the law is curative. generally illegal or void.
5. When the law is remedial.
6. When the law is procedural. Example: Prescriptive periods are mandatory; when
7. Emergency laws. one files a suit after the prescriptive period, the
action becomes void.

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Prohibitive Laws E. WAIVER OF RIGHTS

Laws which specifically prohibit certain acts and
provide for their liabilities and penalties. Prohibitive Right
laws contain positive prohibitions and are couched A legally enforceable claim of one person against
in negative terms, importing that the act shall not be another, that the other shall do a given act, or shall
done, unless otherwise provided. not do a given act.

Example: No decree of legal separation shall be KINDS OF RIGHTS

based upon a stipulation of facts or a confession of 1. Natural Rights
judgment. Those which grow out of the nature of human
and depend upon personality.
General Rule: Prohibitive laws concerning persons,
their acts or property, and those which have for their Example: right to life, liberty, privacy, and good
object public order, public policy, or good customs reputation.
are not rendered ineffective by laws of judgments
promulgated or by determinations or conventions 2. Political rights
agreed upon in a foreign country. (Art. 17, par. 3, Consist in the power to participate, directly or
CC) indirectly, in the establishment or administration
of government.
Exception: Art. 26, Par. 2 of the Family Code (e.g.
Divorce) Example: Right of suffrage, right to hold public
office, right of petition.
Permissive Laws
If the law commands that what it permits to be done 3. Civil rights
should be tolerated or respected, in which case, it is Those that pertain to a person by virtue of his
permissive or directory. citizenship in a state or community.

Such kinds of law merely supplies what is lacking in Example: Property rights, marriage, equal
the absence of stipulation by the parties. protection of laws, freedom of contract, trial by
jury.
Mandatory Law vs. Permissive Law
Mandatory Law Permissive Law a. Real rights
Usually, a mandatory A permissive law is one Enforceable against the whole world
or obligatory law uses which is statutorily (absolute rights)
words such as “shall” expressed and worded
or “must.” It commands by the use of the word b. Personal rights
and leaves no “may.” Enforceable against a particular individual
discretion in the matter. (relative rights)
Statutory provisions Generally, provisions
which relate to matters which are mere matter Waiver
of substance, affect of form, or which are Intentional relinquishment of a known right. (Castro
substantial rights and not material, do not v. Del Rosario, G.R. No. L-17915, 1967)
are the very essence of affect any substantial
the thing required to be right, and do not relate Waivers are not presumed but must be clearly and
done, are regarded as to the essence of the convincingly shown either by express stipulation or
mandatory. thing to be done, so acts admitting no other reasonable explanation.
(TOLENTINO; Home that compliance is a (Arrieta v. National Rice and Corn Corporation, G.R.
Bankers Savings v. matter of convenience No. L-15645, 1964)
CA, G.R. No. 128354, rather than substance,
2005) are considered to be General Rule: Rights may be waived. (Art. 6, CC)
directory.
(TOLENTINO; Home Requisites of a Valid Waiver
Bankers Savings v. 1. Existence of a right.
CA, G.R. No. 128354, 2. Knowledge of the existence of such right.
2005) 3. An intention to relinquish the right. (Herrera
v. Borromeo, G.R. No. L-41171, 1987)

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Exceptions: Rights may not be waived if the waiver Example: Law A is expressly repealed by
is: Law B. If Law B is itself repealed by Law C,
1. Contrary to law, public order, public policy, is Law A revived?
morals, good customs.
No, unless Law C expressly so provides.
Example: Waiver of future inheritance,
political rights, future support. 2. When a law which impliedly repeals a prior
law is itself repealed, the prior law shall be
2. Prejudicial to a third person with a right revived unless the language of the
recognized by law. repealing statute provides otherwise. (U.S.
v. Soliman, G.R. No. L-11555, 1917)
No compromise upon the following questions shall
be valid: Example: Law A is impliedly repealed by
1. The civil status of persons. Law B. Law B is later repealed by Law C. Is
2. The validity of a marriage or a legal Law A revived?
separation.
3. Any ground for legal separation. Yes, unless Law C provides otherwise.
4. Future support.
5. The jurisdiction of courts. General Law vs. Special Law
6. Future legitime. (Art. 2035, CC) General Rule The special law prevails as an
exception to the general law, regardless of which
law was enacted first.
F. REPEAL OF LAWS
When there is a conflict between a general law and
Repeal a special statute, the special statute should prevail
It is the legislative act of abrogating through a since it evinces the legislative intent more clearly
subsequent law the effects of a previous statute or than the general statute. (Laguna Lake
portions thereof. (STA. MARIA) Development Authority vs. CA, G.R. Nos. 120865-
71, 1995).
Types of Repeal
1. Express repeal Exceptions: (A subsequent general law prevails
An express repeal is one which is literally and the special law repealed, if):
declared by a new law, either in specific 1. There is an express declaration to the
terms, where particular laws and provisions contrary.
are named, or in general terms. (Ibid.) 2. There is a clear, necessary and
unreconcilable conflict. (Cia General v.
2. Implied repeal Coll. of Customs, G.R. No. L-43810, 1989)
An implied repeal is one which takes place 3. The subsequent general law covers the
when a new law contains provisions whole subject and is clearly intended to
contrary to or inconsistent with those of a replace the special law on the matter.
former without expressly repealing them. (Lichauco & Company v. Aposto, G.R. No.
(Ibid.) L-19628, 1922).

Requisites of an Implied Repeal Unconstitutional Statutes

1. The laws cover the same subject matter. General Rule: A void law or administrative act
cannot be the source of legal rights or duties. An
2. The latter law is repugnant to the earlier
unconstitutional act is not a law; it confers no rights;
law. (Agujetas v. CA, G.R. No. 106560,
it imposes no duties; it affords no protection; it
1996)
creates no office; it is inoperative as if it has not been
passed at all.
Note: Implied repeals are not looked upon with
favor. (US v. Palacio, G.R. No. 11002, 1916)
Exception: Operative Fact Doctrine
The actual existence of a statute, prior to such a
Effect if the Repealing Law Itself is Repealed
determination [of unconstitutionality], is an operative
1. When a law which expressly repeals a prior
fact and may have consequences which cannot
law is itself repealed, the law first repealed
justly be ignored. The past cannot always be erased
shall not be revived, unless expressly so
by a new judicial declaration. (De Agbayani v. PNB,
provided. (PARAS)
G.R. No. L- 23127, 1971)

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Thus, a legislative or executive act, prior to its being possible cases to which the law may apply Nor has
declared as unconstitutional by the courts, is valid the human mind the infinite capacity to anticipate all
and must be complied with. (Chavez .v NHA, G.R. situations. (Floresca v. Philex Mining Corporation,
No. 164527, 2007) G.R. No. L-30642, 1985)

Judicial Legislation
G. JUDICIAL DECISION The judiciary is tasked with resolving legal
controversies and interpreting statutes; it cannot
Judicial Decisions legislate.
Judicial decisions applying or interpreting the law
shall form a part of the legal system. (Art. 8, CC) BUT: “Even the legislator himself, through Article 9
of the New Civil Code, recognizes that in certain
Effects of Judicial Decisions instances, the court, in the language of Justice
1. Judicial decisions applying or interpreting Holmes, ‘do and must legislate’ to fill in the gaps in
the laws or the Constitution shall form part the law; because the mind of the legislator, like all
of the legal system of the Philippines (Art. human beings, is finite and therefore cannot
8, CC) envisage all possible cases to which the law may
2. Only decisions of the Supreme Court apply. (STA. MARIA, citing Floresca v. Philex, 136
establish jurisprudence or doctrines in this SCRA 136)
jurisdiction (Vda. De Miranda v Imperial,
G.R. No. L-49090, 1947)
I. INTERPRETATION OF DOUBTFUL
Judicial Decisions Deemed Part of the Law STATUTES
The application or interpretation placed by the Court
upon a law is part of the law as of the date of the Rule in Case of Doubt
enactment of the said law since the Court's In case of doubt in the interpretation or application
application or interpretation merely establishes the of laws, it is presumed that the lawmaking body
contemporaneous legislative intent that the intended right and justice to prevail. (Art. 10, CC)
construed law purports to carry into effect. (People
v. Licera, G.R. No. L-39990, 1975) In interpreting and applying the laws, we must take
into account the constitutional principles of social
BUT: When a doctrine of the Supreme Court is justice. “The constitutional mandate on social justice
overruled and a different view is adopted, the new is addressed not only to the legislature but also to
doctrine will be applied prospectively and will not be the two other branches of government.”
applied to parties who had relied on the old doctrine (Oceanmarine Resources Corp. v. Jenny Rose
and acted on the faith thereof. (People v. Jabinal, Nedic on behalf of minor Jerome Nedic Ellao, G.R.
G.R. No. L-30061, 1974) No. 236263, 2022)
How Judicial Decisions may be Abrogated When Applicable
1. By contrary ruling of the Supreme Court Where the law is clear, it must be applied according
itself. to its unambiguous provisions. (Acting
2. By corrective legislative acts of Congress, Commissioner of Customs v. Manila Electric
although said laws cannot adversely affect Company, G.R. No. L-23623, 1977)
those favored prior to the Supreme Court
decisions. (PARAS) Construction and interpretation come only after it
has been demonstrated that application is
impossible or inadequate without them. (Republic
H. DUTY TO RENDER JUDGMENT Flour Mills, Inc. v. Commissioner of Customs, G.R.
No. L-28463, 1971)
Duty of a Judge if the Law is Silent
No judge or court shall decline to render judgment
by reason of the silence, obscurity, or insufficiency J. CUSTOM
of the laws. (Art. 9, CC)
Custom
The court, in the language of Justice Holmes, "do A custom is a rule of conduct formed by repetition of
and must legislate" to fill in the gaps in the law; acts, uniformly observed or practiced as a social
because the mind of the legislator, like all human rule, legally binding, and obligatory.
beings, is finite and therefore cannot envisage all

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Rules L. GENERALITY PRINCIPLE OF PENAL

1. Customs which are contrary to law public LAWS
order or public policy shall not be
countenanced (Art. 11, CC) Generality Principle
2. Customs must be proved as a fact General Rule: Penal laws and those of public
according to the rules of evidence (Art. 12, security and safety shall be obligatory upon all who
CC) live or sojourn in the Philippine territory. (Art. 14,
CC)
The members of the Civil Code and Family Law
Committees that drafted the Family Code Exceptions:
recognized the Filipino custom of adding the 1. Principles of public international law
surname of the child’s mother as his middle name.
The SC sustained the petitioner’s claim that there is Example: Immunities granted to diplomatic
no law prohibiting an adopted child from having a officials and visiting heads of state.
middle name in case there is only one adopting
parent. (In The Matter of the Adoption of Stephanie 2. Treaty stipulations
Nathy Astorga Garcia Honorato B. Catindig, G.R.
No. 148311, 2005) Example: Diplomatic immunities granted
under the Vienna Convention on Diplomatic
Relations (1061).
K. LEGAL PERIODS
3. Laws of preferential application
RULE ON PERIODS
Period Rule Example: R.A. No. 75, § 4 (Foreign
Year shall be understood to be ambassadors, ministers)
12 calendar months. (E.O. 292,
Book I, § 31)
Year M. CONFLICT OF LAWS
NOTE: Art. 13 has been
impliedly repealed by E.O. 292 Laws Binding to Citizens in the Philippines and
or the Revised Administrative Abroad
Code of 1987. Laws relating to family rights and duties, or to the
30 days, unless the month is status, condition and legal capacity of persons are
identified, in which case it shall binding upon citizens of the Philippines, even
Month be computed according to the though living abroad. (Art. 15, Civil Code)
number of days the specific
month contains. (Art. 13, CC) Subject laws for Real Property and Personal
Day 24 hours. Property
Night Sunset to sunrise. Real property as well as personal property is subject
Count 7 days as indicated, not to the law of the country where it is situated. (Art. 16,
Weak necessarily Saturday to Civil Code)
Sunday.
Subject Laws for Succession
To count the period, the first day is excluded and the Intestate and testamentary successions, both with
last day is included. (Art. 13, CC) respect to the order of succession and to the amount
of successional rights and to the intrinsic validity of
Example: If a law states that a statute takes effect testamentary provisions, shall be regulated by the
on the 20th day from its publication and such national law of the person whose succession is
publication was made on Feb. 3, 1988, then the law under consideration, whatever may be the nature of
shall be effective on Feb. 23, 1988. the property and regardless of the country wherein
said property may be found. (Art. 16, Civil Code)
The first day, which is Feb. 3, 1988, is excluded
while the last day, which is Feb. 23, 1998, is Subject Laws for Contracts/Wills/Other Public
included. Instruments
General Rule: The forms and solemnities of
contracts, wills, and other public instruments shall
be governed by the laws of the country in which they
are executed.

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Exception: When the acts referred to are executed Basis Private Public
before the diplomatic or consular officials of the Municipal or International in
Republic of the Philippines in a foreign country, the Nature national in character
solemnities established by Philippine laws shall be character
observed in their execution. (Art. 17, Civil Code) Private Generally
transactions affected by
Laws Effective Despite Laws and Conventions between public interest,
Prohibitive laws concerning persons, their acts or Transactions individuals or those that
property, and those which have, for their object, Involved are of interest
public order, public policy and good customs shall only to
not be rendered ineffective by laws or judgments sovereign
promulgated, or by determinations or conventions states
agreed upon in a foreign country. (Art. 17, Civil Remedies Resort to May be
Code) and municipal peaceful or
Sanctions tribunals forcible
Supplemental Application of Civil Code a. Codifications h. Customs
In matters which are governed by the Code of b. Special i. Treatises
Commerce and special laws, their deficiency shall Legislation j. Principles
be supplied by the provisions of this Code. (Art. 18, c. Multilateral of law
Civil Code) Treaties and recognized
International by civilized
Private International Law or Conflict of Laws is Conventions nations
that part of the municipal law of the state, which Sources d. Bilateral k. Judicial
directs its courts and administrative agencies, when Treaties Decision
confronted with a legal problem involving a foreign e. Case Law l. Teachings
element, whether or not they should apply foreign f. International of the most
laws. Custom highly
g. Constitution qualified
Foreign Element – A factual situation that cuts publicists
across territorial lines and is affected by the diverse
laws of two or more states. (Saudi Arabian Airlines
v. Court of Appeals, G.R. No. 122191, 1998) 1. JURISDICTION; FORUM NON
CONVENIENS
Private International Law is not a separate, distinct
branch of law; nor is it a mere part of Civil Law but Jurisdiction
rather it traverses and concerns almost every Jurisdiction is the authority of a tribunal to hear and
department of law. decide a case
Threefold Functions of Private International Law In the realm of Conflict of Laws, jurisdiction has
(CJS) essentially the same definition, with the added
1. Prescribe conditions under which a court or element of possible enforceability in foreign states,
agency is Competent to entertain a suit or subject, of course, to the rights of said states.
proceeding involving facts containing a foreign (Paras, Philippine Conflicts of Laws, p. 26, 1996)
element;
2. Specify circumstances under which foreign Alternatives Given to the Court
Judgment will be recognized as valid and 1. Whenever a conflicts problem presents itself
binding in the forum; and before a tribunal of the forum, the court is
3. Determine for each class of cases the particular primarily confronted with the question of
System of law by reference to which the rights jurisdiction.
of parties must be ascertained. 2. When a court is without jurisdiction, it has no
alternative except to dismiss the case.
Difference Between Private (PRIL) and Public 3. When a tribunal possesses jurisdiction, it may:
International Law (PIL) a. Refuse to assume jurisdiction on the
ground of forum non conveniens; OR
Public international law (PIL) - the law that b. Assume jurisdiction, in which case it
regulates the relations of States and other entities may either apply:
possessing international personality. (1) Lex fori – apply the internal law of
the forum

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(2) Lex causae – apply the proper The reason often given for refusal to assume
foreign law jurisdiction is that to do so would prove inconvenient
for the forum.
Three Kinds of Jurisdiction
1. Jurisdiction over the subject matter Inconvenience may be determined, among other
This is conferred by law and is defined as the things, in the following ways:
authority of a court to hear and decide cases of
the general class to which the proceedings in 1. Evidence and the witnesses may not be
question belong. Law on the jurisdiction of our readily available
courts may be found in the PH Constitution and 2. Court dockets of the forum may already be
in the Judiciary Act of 1948, as amended by BP clogged: to permit additional cases would
129. inevitably hamper the speedy
administration of justice;
2. Jurisdiction over the person 3. Evils of forum-shopping (practice of looking
The power of a court to render a judgment that over the courts of the world for possible
will be binding on the parties involved – the procedural advantages) ought to be
plaintiff and the defendant. curbed;
4. Forum has no particular interest in the
Jurisdiction over the plaintiff is acquired when case;
acquired from the moment he institutes the 5. Parties may either be citizens or residents;
action by the proper pleading. 6. Subject matter of litigation had evolved
somewhere else;
Jurisdiction over the defendant is acquired Other courts are open: certainly, the case
through the following means: may be better tried in said courts. (id, p. 36)
a. Voluntary Appearance (except if the
precise purpose of the appearance is Under the doctrine of forum non conveniens, a
to question the jurisdiction of the court Philippine court in a conflict-of-laws case may
over his person) assume jurisdiction if it chooses to do so, provided,
b. Personal or substituted service of that the following requisites are met:
summons 1. that the PH Court is one to which the parties
may conveniently resort to;
The effects of summons by publication is good 2. that the PH Court is in a position to make
only if the action is in rem or quasi in rem or an intelligent decision as to the law and the
involves the personal status of the plaintiff. For facts; and
actions in personam, summons by publication 3. that the PH Court has or is likely to have
would not be sufficient service on the person of power to enforce its decision. (Continental
the defendant, whether or not said defendant is Micronesia, Inc. v. Basso, GR No. 178382-
in the Philippines. 83, 2015)

3. Jurisdiction over the res 2. CHOICE OF LAW; DOCTRINE OF

This is jurisdiction over the particular subject RENVOI; DOCTRINE OF PROCESSUAL
matter in controversy, regardless of the persons PRESUMPTION
who may be interested thereon. Said
jurisdiction may for instance be acquired by Choice of Law
coercive seizure of the property by attachment There are three functions of Conflict of Laws:
proceedings (e.g. specific properties which are 1. the question of jurisdiction;
the subject of the litigation have been properly 2. the question of choice of law; and
attached) (id., pp. 26-29) 3. the question of enforceability of a foreign
judgment.
Forum non Conveniens
The forum which has jurisdiction can choose to Among the three, the choice of law is the most
either decline or accept it. Each sovereign holds the important.
right to decline jurisdiction over a specific case, even
if it does have jurisdiction. Meanwhile, a state Jurisdiction vs Choice of Law
lacking jurisdiction, or the potential to obtain it, Jurisdiction considers whether it is fair to cause a
cannot decline jurisdiction because there is no defendant to travel to this state. Jurisdiction pertains
jurisdiction to decline. to the court or tribunal's competence to rule on a
matter before it.

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Choice of law asks the further question whether the Proof of Foreign Law
application of a substantive law which will determine 1. If the foreign law is WRITTEN LAW (e.g.
the merits of the case is fair to both parties. Choice statute, constitution), it may be proved by:
of law deals with determining which law applies. a. an official publication thereof
(Esther Alcala Vda. de Alcañeses v. Jose b. by a copy attested by the officer having
Alcañeses, G.R. No. 187847, 2021) the legal custody of the record, or by
his/her deputy, and accompanied with
Questions to Resolve in Choice of Law a certificate that such officer has
Problems custody. Certificate may be made by a
1. What legal system should control a given secretary of the embassy or legation,
situation where some of the significant facts consul general, consul, vice-consul, or
occurred in 2 or more states? consular agent or by any officer in the
2. To what extent should the chosen legal system foreign service of the PH stationed in
regulate the situation? (Id.) the foreign country in which the record
is kept, and authenticated by the seal
Characterization/Doctrine of Qualification of his [or her] office. (Rule 132, Sec. 24,
Before a choice can be made, it is necessary for us 2019 ROC)
to determine under what category a certain set of 2. If the foreign law is UNWRITTEN LAW as
facts or rules fall. It is the process of deciding customs or traditions, it may be proved by:
whether or not the facts relate to the kind of a. Oral testimony of expert witnesses
question specified in a conflicts rule. The purpose of b. Printed and published books of reports
characterization is to enable the forum to select the of decisions of the country involved, if
proper law. proved to be commonly admitted in
such courts. (Rule 130, Sec. 45, old
Choice-of-law rules invariably consist of a factual ROC)
relationship (such as property right, contract claim)
and a connecting factor or point of contact, such as Doctrine of Renvoi
the situs of the res, place of celebration, place of Renvoi is a method of disposing a conflict problem
performance, or place of wrongdoing. by referring a matter for judgment or consideration
to another State.
Test Factors or Points of Contact in Choice of
Law Types of Renvoi
1. Nationality of a person, his/her domicile, his/her a. Remission – reference is made back to the
residence, his/her place of sojourn, or his/her law of the forum
origin; b. Transmission – reference is made to a third
2. Seat of a legal or juridical person, such as a State
corporation;
3. Situs of a thing, that is, the place where a thing Theories to Solve Renvoi Problem
is, or is deemed to be situated. a. Rejection of Renvoi – the reference of the
4. Place where an act has been done (locus actus) matter for judgment is confined exclusively
such as the place where a contract has been to the internal law of the other State.
made, a marriage celebrated, a will signed or a b. Acceptance of Renvoi – reference is to
tort committed. the entirety, including the conflicts rule of
5. Place where an act is intended to come into the other State; and if the State of the forum
effect, finds that the matter is referred back to it,
6. Intention of the contracting parties as to the law the court might conclude that the reference
that should govern their agreement, the lex loci to the other State has not provided a direct
intentionis; solution, in such case, the court might
7. Place where judicial or administrative accept the reference and apply its own
proceedings are instituted or done. (Ibid.) internal law (remission) or the laws of the
third State (transmission). Also called
Doctrine of Processual Presumption single renvoi.
If the foreign law involved is not properly pleaded 1. The doctrine of renvoi was
and proved, our courts will presume that the foreign accepted and applied by the Court.
law is the same as our local or domestic or internal It made reference not just to the
law. internal law of California but to its
whole law, including the choice-of-
law rules. Since the choice-of-law
rules referred the case back to

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Philippine law, the Court held that as State B would. (No

the Philippine court cannot and renvoi in this scenario)
should not refer the case back to ii. Assuming however that
California because such issue the State B’s court
would leave the issue incapable of determines that State C’s
determination. It cannot be tossed court would have referred
back and forth between the two the matter to State B’s
states, between the country of laws in its entirety; Then
which the decedent was a citizen State C would have found
(California) and the country of his that State B’s conflict
domicile (Philippines). If the Court rules refers the matter
rejected the renvoi, the national back to State C’s again or
law of the deceased, which was a third State; Thus, State
California law, would have been C, which adopts the
applied. Instead, the Court applied acceptance of the renvoi
the doctrine of renvoi and thus theory, would have
administered justice to the therefore applied its own
acknowledged natural child of the laws or that of the third
deceased by granting them the State. The court of the
devise in accord with law (Adolfo forum, State B, thus
Aznar v. Helen Garcia, G.R. No. L- decides the case the way
16749, 1963). State C would.
c. Desistment or Mutual Disclaimer of
Jurisdiction – reference is also to the a. Lex Nationalii
entirety, including the conflicts rule of the
other State; and if the State of the forum Definition
finds that the matter is referred to back to it, The Nationality Theory is the theory by virtue of
the court might conclude that the other which the status and capacity of an individual are
State has no rule of law applicable to the generally governed by the law of his nationality. This
situation, in such case, the court left is with is the theory which the Philippines has principally
no other alternative but to apply its own adopted under Articles 15, 16, and 1039 of the Civil
internal law. Code, and Article 21 of the Family Code. (Paras,
d. Foreign Court Theory – the law to be Philippine Conflict Laws, p. 104, 1996)
applied by the court of the forum is that law
the court of the State referred would have Kinds of Citizens of the Philippines
applied. a. Natural-born citizens
1. Double renvoi may arise, i.e., the b. Naturalized citizens
court of the forum, in applying the c. Citizens by election
foreign court theory, finds that the
referred State accepts the renvoi. Defects of the Nationality Theory:
In which case, the court of the a. Change of nationality or citizenship is hard
forum shall therefore apply what to effectuate; thus, a person who may no
the court of the State referred longer wish the law of his country to follow
would have applied. him whenever he may go (because he has
2. Example: X was a citizen of State found it undesirable) may find it difficult to
B but domiciled in State C. A left be naturalized elsewhere.
immovables in State B. As the b. Some individuals are stateless.
courts of State B follows the c. There are persons who possessed dual or
foreign court theory, it will multiple nationalities.
therefore decide the case exactly d. It is not always desirable to apply to aliens
as State C will decide. their national law. (id., p. 105)
i. Assuming that State B’s
court determines that Dual and Multiple Nationalities
State C’s court would This can hardly arise because citizenship is a matter
have referred the matter to be exclusively determined by a country’s own law.
to State B’s internal laws Philippine law are only allowed to determine who are
alone, State B would Filipino citizens and who are not.
therefore apply its own
(State B’s) internal laws

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Article 2 of the Hague Convention on Conflict of b. Lex Rei Sitae

Nationality Laws provides that any question as to
whether a person possesses the nationality of a Concept
particular state should be determined in accordance The Civil Code gives exclusive importance to the lex
with the law of that state. situs, regardless of the nature of the property; thus,
it provides that real property as well as personal
The situations in which dual or multiple nationalities property is subject to the law of the country where
may arise are: situated. (Civil Code, Art.16)
a. Through a naturalized citizen’s failure to
comply with certain legal requirements in Scope of Lex Situs Rules as to Immovables
the country of origin; a. Capacity to take and transfer immovables;
b. From a combined application of jus soli and Exception: Lex rei sitae is not applicable
jus sanguinis; where the issue is the authority of a State
c. By the legislative acts of states official to validly dispose of property
d. By the voluntary act of the individual. belonging to the State and the validity of the
procedures adopted to effect its sale.
Stateless Individuals (Salvador Laurel v. Ramon Garcia, G.R.
A person may become stateless by any of the No. 92013, 1990).
following means: b. Formalities of conveyance;
a. He may have been deprived of his c. Essential validity and effect of the transfer;
citizenship for any cause, such as the d. Interpretation and effect of conveyance;
commission of a crime; e. Validity and effect of mortgages and other
b. He may have renounced his nationality by encumbrances;
certain acts, express or implied; f. Marital interest in land; and
c. He may have voluntarily asked for a g. Equitable interest in land
released for a released from his original
state; or Elements of a Conflict Of Laws Problem as to
d. He may have been born in a country which Immovables: (CFEI)
recognizes only the principle of jus a. There is a dispute over the title or
sanguinis – citizenship by blood, of parents ownership of an immovable, such that the:
whose law recognizes only the principle of i. Capacity to take and transfer
jus soli – citizenship by birth in a certain immovables,
place. Thus, he is neither a citizen of the ii. Formalities of conveyance,
country where he was born, nor a citizen of iii. Essential validity and effect of the
the country of his parents. transfer, or
iv. Interpretation and effect of a
NOTE: Presumption regarding paternity is neither conveyance, are to be determined;
unknown nor unacceptable in Philippine Law. There and
is more than sufficient evidence that Poe has b. A foreign law on land ownership and its
Filipino parents and is therefore a natural-born conveyance is asserted to conflict with a
Filipino. Hence, the burden of proof was on private domestic law on the same matters. Hence,
respondents to show that petitioner is not a Filipino the need to determine which law should
citizen. There are disputable presumptions that apply.
things have happened according to the ordinary
course of nature. On this basis, it is safer to assume Exceptions To The Lex Situs Rule As To
that Poe’s parents are Filipinos. To assume Immovables: (SCOFTSt)
otherwise is to accept the absurd (Grace Poe- a. Succession - capacity to succeed, order of
Llamanzares v. COMELEC, G.R. No. 221697, succession, amount of successional rights
2016). and intrinsic validity of testamentary
provisions, shall be regulated by the
The Hague Conference of 1928 on International national law of the person whose
Private Law suggested that the personal law of succession is under consideration,
stateless individuals shall be: whatever may be the nature of the property.
a. The law of the domicile (habitual (Civil Code, Arts. 16 and 1039)
residence); or b. Parties’ Contractual Obligations - where
b. Secondarily the law of the place of the issue involves the rights and liabilities
temporary residence of the parties inter se as a matter of
contractual obligation, even though the
subject matter of the contract is the land,

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the governing law is the law that regulates where the instrument is at the time
the contract as a whole. of the transfer.
c. Principal Obligation Secured - validity 3) Corporate stocks or shares. When
and effect of the principal obligation, which the transfer has the consequence
the encumbrance secures are determined of changing the relations of the
by principles applicable to contracts in parties with the corporation, the
general. law of the place of incorporation
d. Contract to Transfer - while the validity of governs. As an exception, as
the transfer of immovable is governed by between the assignor and
the lex situs rule, the validity of the contract assignee, the effect of an
to transfer is determined by the proper law assignment of the stock certificate
of the contract. will be governed by the law most
e. When the property within the situs belongs connected to the transaction.
to a Foreign State. (Holy See v. Edilberto
Rosario, G.R. No. 101949, 1994) c. Lex Contractus
f. Corporate Stocks or Shares – where the
transfer has the consequence of changing Three Approaches to Contractual Conflicts of
the relations of the parties with the Law
corporation, the law of the place of 1. Lex loci contractus
incorporation governs. The SC declared that lex loci contractus
governs in the Philippine jurisdiction. This clear
Scope of Lex Situs Rules as to Movables and unequivocal declaration means that our
The rule, with reference to personal property, courts are obliged to apply the law of the place
extends in general to all relations and situations of execution of the contract in case a conflict of
already adverted to in the case of real property. The laws dispute concerning contracts is brought to
exceptions to the rule under the immovables also the courts. (Triple Eight v NLRC,GR No.
apply to movables. 129584, 1998)

In addition to the general rule, personal property 2. Lex loci solutionis

may be tangible or intangible. This relates to the "law of the place of the ceremony"
a. The tangibles are referred to as choses or the law of the place where a contract is made.
in possession. The law of the state in (Hasegawa and Nippon v Kitamura, GR No.
which the property is located at the 149177, 2007)
time of the transaction in question
determines the creation and transfer of 3. State of the most significant relationship rule
interests in choses in possession Under the "state of the most significant relationship
b. Intangibles are referred to as choses in rule," to ascertain what state law to apply to a
action. Choses in action are divided dispute, the court should determine which state
into three categories: has the most substantial connection to the
1) Debts or simple rights of action occurrence and the parties. In a case involving a
arising from any loans or ordinary contract, the court should consider where the
commercial contracts. The laws contract was made, was negotiated, was to be
that may govern are: (a) the law of performed, and the domicile, place of business, or
the domicile of owner; (b) the law place of incorporation of the parties. This rule takes
of the place where assignment is into account several contracts and evaluates them
executed; (c) the law of the place according to their relative importance with respect to
where the debt is recoverable or the particular issue to be resolved. (Id.)
where the performance of the duty
would be expected; (d) if the debt Definition
is created by a contract between The law of the place where the contract is executed.
the assignor and the debtor, follow The reason behind this approach is that the parties'
the proper law of the contract. mindset are usually focused on the law of the place
2) Negotiable instruments. The law of execution when they enter into contracts.
governing the rights embodied in
the instrument decides whether a Without specifying any choice of law, it is
given instrument is negotiable. The understood that the parties wanted the local law to
validity and effect of a transfer of a govern their contractual relation. The law of the
negotiable instrument are place of execution is the default law based on the
determined by the law of the place presumption that the parties would have specified a

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particular law if they did not want local law to govern law of the domicile or the nationality, which can
their contractual relationship. (Paras, Philippine claim to regulate that person’s act.
Conflict of Laws, p. 381, 1996)
Formal Validity of Marriages
No rule is better settled in law than that matters If the marriage is valid by the law of the place of
bearing upon the execution, interpretation, and celebration or lex loci celebrationis, it is also valid in
validity of a contract are determined by the law of other places.
the place where the contract is made. (Government
of the Philippine Islands v. George Frank, G.R. No. Philippine Conflict Rule on Formal and
L-2935, 1909) Substantive Validity of Marriage
All marriages solemnized outside the Philippines, in
In Allstate Ins. Co. v. Hart, the issue before the Court accordance with the laws in force in the country
was whether the household exclusion provision in a where they were solemnized, and valid there as
Florida automobile insurance policy should be such, shall also be valid in this country. (Family
enforced in light of MDs public policy against Code, Art. 26)
household exclusion clauses contained in such
policies. We noted that "in deciding questions of Substantive Validity of Marriages
interpretation and validity of contract provisions, MD General Rule: Law of the place of celebration (lex
courts ordinarily should apply the law of the loci celebrationis)
jurisdiction where the contract was made. This is
referred to as the principle of lex loci contractus. Exceptions:
(EIE v. Heffernan II, 399 Md. 598, 2007) a. Philippine law governs marriage between
Filipino nationals abroad solemnized by a
Conflicts Rule on Essential Validity of Contracts consul-general of the Philippines. (Family
No conflicts rule on essential validity of contracts is Code, Art. 10)
expressly provided for in our laws. b. Marriages prohibited under Philippine Law
will not be upheld as valid in the Philippines.
The rule followed by most legal systems, however, (Family Code, Art. 26)
is that the intrinsic validity of a contract must be i. Contracted by any party below
governed by the lex contractus or "proper law of the eighteen years of age even with
contract." This is the law voluntarily agreed upon by consent (Family Code, Art. 35 (1))
the parties (lex loci voluntatis) or the law intended by ii. Bigamous or polygamous
them either expressly or implicitly (lex loci marriage not falling under Art. 41
intentionis). The law selected may be implied from (Family Code, Art. 35 (4))
such factors as substantial connection with the iii. Contracted through mistake of one
transaction, or the nationality or domicile of the party as to the identity of the other
parties. (Family Code, Art. 35 (5))
iv. Subsequent marriages void under
PH courts would do well to adopt the first and most Art. 53 (Family Code, Art. 35 (6))
basic rule in most legal systems, namely, to allow v. Psychological incapacity (Family
the parties to select the law applicable to their Code, Art. 36)
contract, subject to the limitation: vi. Incestuous marriage (Family
• that it is not against the law, morals, or Code, Art. 37)
public policy of the forum and vii. Marriage against public policy
• that the chosen law must bear a (Family Code, Art. 38)
substantive relationship to the transaction.
(Phil Export v Eusebio, GR No. 140047, Requisites to Uphold Marriages Contracted
2014) Abroad
a. Existence of the foreign law as a question
d. Lex Loci Celebrationis of fact;
b. Alleged foreign marriage by convincing
Capacity to Contract Marriage evidence (Mora Adong v. Cheong Seng
It refers to his power to acquire and exercise rights. Gee, G.R. No. 18081, 1922)
In Conflict of Laws, the inquiry is to ascertain what
system of law will determine a person’s capacity to Annulment of marriages
enter into a legal transaction when there is conflict a. Jurisdiction to Annul – acquired by the
between the law of the place where the transaction following forums:
is entered into and some system of law, such as the i. Where the spouses are domiciled
in; and

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ii. In which either parties are CATEGORY GOVERNING LAW

nationals Personal Personal law or national law of the
b. Governing Law on Annulment or Nullity – Status person (lex nationalii)
lex loci celebrationis determines the cause Capacity to Personal law or national law of the
or ground for annulment. Contract person (lex nationalii)
Marriage
Recognition of Foreign Divorce Decrees Formal Law of the place of celebration (lex
a. Between Filipino citizens – not entitled to Validity of loci celebrationis)
recognition because of the local policy Marriages
against absolute divorce. Law of the place of celebration (lex
Substantive loci celebrationis)
Note: Divorce between Filipinos is void and Validity of Exception: Marriage before the
ineffectual under the nationality rule. Any Marriages Philippine consular and marriages
settlement of property submitted as an prohibited under Philippine law.
incident of a divorce obtained in a foreign Law of the place of celebration (lex
country between Filipino spouses cannot Annulment
loci celebrationis)
be enforced. (Soledad Lavadia v. Heirs of
Luna, G.R. No. 171914, 2014) e. Lex Domicilii
b. Between alien spouses – entitled, if valid Either the “lex nationalii” or the “lex domicilii” (the
under their national law. national law or the domiciliary law) of the deceased
c. Mixed marriages – entitled, even the governs the successional rights to his estate. In our
Filipino spouse may seek for divorce country, we have expressly adopted the “lex
(Republic v. Marelyn Manalo, G.R. 221029, nationalii.” (Art. 16, Civil Code)
2018)
Joint wills made by aliens abroad shall be
Note: Whether the Filipino spouse initiated the considered as valid in the Philippines if valid
foreign divorce proceeding or not, a favorable according to the lex nationalii or lex domicilii or lex
decree dissolving the marriage bond and celebrationis. (Arts. 816 and 17, Civil Code)
capacitating his or her alien spouse to remarry will
have the same result: the Filipino spouse will
If the revocation is done outside the Philippines by
effectively be without a husband or wife. A Filipino
a non-domiciliary of the Philippines, the testator may
who initiated a foreign divorce proceeding is in the
a follow either the law of the place where the will had
same place and in "like circumstance as a Filipino
been made (lex loci celebrationis of the making not
who is at the receiving end of an alien initiated
the revoking) or the lex domicilii. (Art. 829, Civil
proceeding. Therefore, the subject provision should
Code)
not make a distinction. (ibid.)
f. Lex Fori
BUT: J. Perlas-Bernabe joined the dissent of J.
Caguioa.
Application
An approach where the rights and liabilities of the
How Foreign Divorce Decrees can be
parties are governed by the law of the forum.
Recognized
a. In an action instituted specifically for the
purpose (e.g. special proceeding for It applies whenever the content of the otherwise
cancellation or correction of entries in the applicable foreign law is excluded from application
Civil Registry under Rule 108) (Minoru in a given case for the reason that it falls under one
Fujiki v. Maria Marinay, G.R. No. 196049, of the exceptions to the applications of foreign law.
2013) (Esther Alcala Vda. De Alcañeses v. Jose
b. In another action where a party invokes the Alcañeses, G.R. No. 187847, 2021)
foreign decree as an integral aspect of his
claim or defense. (Doreen Medina v. Importance
Michiyuki Koike, G.R. No. 215723, 2016) Lex fori (law of the forum) is particularly important
because, matters of 'procedure' not going to the
substance of the claim involved are governed by it.
(Id.)

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Instances When The Forum Has to Apply Lex imprisonment as she was held guilty of (1) adultery;
Fori in adjudicating a conflicts problem (2) going to disco, dancing, and listening to music in
1. When the law of the forum (internal law) violation of Islamic laws; and (3) socializing with the
expressly so provides in its conflicts rules male crew, in contravention of Islamic tradition.
2. When the proper foreign law has not been
properly pleaded and proved; Here, the Court held that ““For in our view what is
3. When the case involves any of the exceptions important here is the place where the over-all
to the application of the proper foreign law harm or the totality of the alleged injury to the
(exceptions to comity) person, reputation, social standing and human
rights of complainant, had lodged, according to
Exceptions to Comity the plaintiff below (herein private respondent). All
1. Foreign law, judgment, or contract is contrary to told, it is not without basis to identify the Philippines
a sound and established public policy of the as the situs of the alleged tort.” (Saudi Arabian
forum; Airlines, GR No. 122191, 1998)
2. Foreign law, judgment, or contract, is contrary
to almost universally conceded principles of Dowis, a Tennessee resident, was hired by Mud
morality (contra bonos mores); Slingers, a Missouri corporation, to hang large
3. Foreign law, judgment, or contract involves sheets of precast plaster molding at a national chain
procedural matters; hotel in Roswell, Georgia. He fell 4 stories from the
4. Case involves penal laws, contracts, basket of a telescopic boom forklift and suffered
judgments; injuries. He filed his claim and received benefits
5. Case involves purely fiscal (revenue producing) under Mud Slingers compensation insurance in
or administrative matters; Missouri. He later filed a tort action in Georgia
6. Application of the foreign law, judgment, or against Mud Slingers.
contract, may work undeniable injustice to the
citizens or residents of the forum; Applying the exclusive remedy provision of the
7. Application of the foreign law, judgment, or Georgia Workers' Compensation Act and the lex
contract, may work against the vital interests loci delicti rule regarding the applicable substantive
and national security of the state of the forum; law, the trial court granted summary judgment to the
8. Case involves real or personal property situated defendants and this was affirmed by the CA,
in the forum precluding Dowis from maintaining his tort action in
Georgia.
g. Lex Loci Delicti
The place of an allegedly tortious act is not irrelevant
Definition to the conflict issue, in that a state has an interest in
This is the traditional rule that employs the law of the wrongs committed within its boundaries. The
place of injury. doctrine of lex loci delicti has served the resolution
of conflict of laws issues in tort actions in this State
This is fairly straightforward since what only needs for nearly 100 years. It is desirable to have stability
to be done is the application of the law of the place and certainty in the law; therefore, stare decisis is a
where the injury or damage was sustained. This is valid and compelling argument for maintaining the
based on the vested rights theory since the rights of doctrine. Moreover, as appellants acknowledge, lex
the parties vested in the place of injury and nowhere loci delicti has the virtues of consistency,
else. predictability, and relative ease of application. The
relative certainty, predictability, and ease of the
When someone is wronged in a particular place, the application of lex loci delicti, even though sometimes
rights of the parties arise from that jurisdiction leading to results which may appear harsh, are
whose law must then be applied to determine the preferable to the inconsistency and capriciousness
parties' rights and liabilities. Furthermore, the state that the replacement choice-of-law approaches
where the damage or injury is sustained has as have wrought. (Dowis, et al v. Mud Slingers, Inc., et
much interest in redressing the wrongs committed al., 621 S.E.2d 413, 2005)
within its jurisdiction. (Paras, Philippine Conflict of
Laws, pp. 390-391, 1996) A motor vehicle collision involving Indiana
residents Stephens, on the one hand, and Melton,
Application on the other hand, occurred in Laurence County,
Saudi Arabian Airlines hired Milagros Morada as Illinois. Stephens sued Melton before a trial court in
flight attendant. Their contract was entered in the Indiana.
Philippines. Milagros was almost raped in Saudi.
Moreover, she was sentenced to 5 months of

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When the place of the tort is an insignificant contact, Recognition vs Enforcement of Foreign
then the trial court should be allowed to evaluate Judgments
other factors. In these instances, where the place of Recognition Enforcement
the tort bears little connection to the legal action, our Means that our courts Exists when a plaintiff
Supreme Court allows the consideration of factors will allow said foreign wants the courts to
that may be more relevant, such as judgment to be positively carry out and
1. the place where the conduct causing the injury presented as a defense make effective in the
occurred; (by defendant) to a PH a foreign judgment.
2. the residence or place of business of the local litigation (defense
parties; and of res judicata)
3. the place where the relationship is centered. Involves merely the Virtually implies a
sense of justice direct act of
Because the drivers' conduct in operating their sovereignty
motor vehicles prior to the collision will be the focus
of attention to determine liability, and that conduct
was governed by the rules of the road of the state in
which the accident occurred, we conclude that the
presumption of the lex loci delicti remains significant
and is not overcome. (James Melton v. Chad Does NOT require Necessitates a
Stephens, 13 N.E. 3d 533, 2014) either action or a separate action or
special proceeding proceeding
h. Lex Loci Solutionis brought precisely to
make the foreign
Definition and Rationale judgment
The law of the place where the contract is performed
or celebrated. The reason behind this principle is May exist without Necessarily carries
that since a contract is to be performed in a enforcement with its recognition
particular place or state, it is proper that the law of
that state governs the relationship of the parties.

It is but natural that the law of the place of

performance governs contractual disputes since
parties to a contract are expected to follow and (Id.)
comply with the laws where they are operating or
performing their obligations. Otherwise, there is a Reasons Why Not All Foreign Judgments Can
great chance that they will be in violation of the law Be Recognized Or Enforced In Our Country
of the place of performance, which can also become (Id.)
a ground for invalidation of their contract or render
performance of the contract impossible or very 1. Requisite proof thereof may not be adequate;
difficult. (Paras, Philippine Conflicts of Laws, p. 384, 2. They may contravene our established public
1996) policies;
3. They may contradict one another: we cannot be
3. RECOGNITION AND ENFORCEMENT guided by contradictions;
OF FOREIGN JUDGMENT 4. In some countries, the administration of justice
may be shockingly corrupt.
Nature of Foreign Judgment
A foreign judgment does not of itself have any extra- Conditions And Requisites Before Foreign
territorial application. Thus, it may ordinarily be Judgments May Be Recognized and Enforced In
enforced only within the territory of the tribunal The Philippines
issuing it. For a foreign judgment to be ever made 1. There must be proof of the foreign judgment;
effective in our country, it is imperative that it be 2. Judgment must be on a civil or commercial
proved in accordance with our prescribed rules on matter
the matter. (Id., p. 74) 3. There must be no lack of jurisdiction, no want of
notice, no collusion, no fraud, no clear mistake
of law or fact (Sec. 50 (b), Rule 39, ROC)
4. Judgment must not contravene a sound and
established public policy of the forum

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5. Judgment must be res judicata in the state that right prescinding either from a "conclusive judgment
rendered it. (Paras, Philippine Conflicts of upon title" or the "presumptive evidence of a right."
Laws, pp. 76-77, 1996) Absent perhaps a statutory grant of jurisdiction to a
quasi-judicial body, the claim for enforcement of
In this jurisdiction, a valid judgment rendered by a judgment must be brought before the regular courts.
foreign tribunal may be recognized insofar as the (Mijares v Ranada, GR No. 139325, 2005)
immediate parties and the underlying cause of
action are concerned so long as: --end of topic--

1. it is convincingly shown that there has been

an opportunity for a full and fair hearing before
a court of competent jurisdiction;
2. that trial upon regular proceedings has been
conducted, following due citation or voluntary
appearance of the defendant and under a
system of jurisprudence likely to secure an
impartial administration of justice; and
3. that there is nothing to indicate either a
prejudice in court and in the system of laws
under which it is sitting or fraud in procuring the
judgment.

A foreign judgment is presumed to be valid and

binding in the country from which it comes, until a
contrary showing, on the basis of a presumption of
regularity of proceedings and the giving of due
notice in the foreign forum.
(Philippine Aluminum v FAGSI, GR No. 137378,
2000)

Provisions of the Rules of Court on Foreign

Judgment
The effect of a judgment or final order of a tribunal
of a foreign country, having jurisdiction to render the
judgment or final order is as follows:

1. In case of a judgment or final order upon a

specific thing, the judgment or final order is
conclusive upon the title to the thing; and
2. In case of a judgment or final order against a
person, the judgment or final order is
presumptive evidence of a right as between the
parties and their successors in interest by a
subsequent title.

In either case, the judgment or final order may be

repelled by evidence of a want of jurisdiction, want
of notice to the party, collusion, fraud, or clear
mistake of law or fact. (Section 48, Rule 39, ROC)

The rules are silent as to what initiatory procedure

must be undertaken in order to enforce a foreign
judgment in the Philippines. But there is no question
that the filing of a civil complaint is an appropriate
measure for such purpose. A civil action is one by
which a party sues another for the enforcement or
protection of a right, and clearly an action to enforce
a foreign judgment is in essence a vindication of a

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II. HUMAN RELATIONS A. ABUSE OF RIGHTS

Principle of Abuse of Rights

TOPIC OUTLINE UNDER THE SYLLABUS Every person must, in the exercise of his rights and
in the performance of his duties, act with justice,
A. ABUSE OF RIGHTS give everyone his due, and observe honesty and
1. Acts Contra Bonus Mores good faith. (Art. 19, CC)
2. Breach of Promise of Marriage
The principle of abuse of rights requires that
B. UNJUST ENRICHMENT everyone must act with justice, give everyone his
due, and observe honesty and good faith. The law
C. THOUGHTLESS EXTRAVAGANCE recognizes a primordial limitation on all human
rights; that in their exercise, the norms of human
conduct must be observed. A right, though by itself
D. TORTIOUS INFERENCE legal because it is recognized or granted by law as
such, may nevertheless become the source of some
illegality. When a right is exercised in a manner
which does not conform with the norms enshrined in
Article 19 and results in damage to another, a legal
wrong is thereby committed for which the wrongdoer
must be held responsible. (Tan v. Valeriano, G.R.
No. 185559, 2017)

Requisites of Abuse of Rights:

1. There is a legal right or duty
2. Which is exercised in bad faith
3. For the sole purpose of prejudicing or
injuring another. (Petrophil Corp. v.
Court of Appeals, G.R. No. 122796,
2001)

Acts Contrary to Law

Every person who, who contrary to law, willfully or
negligently causes damage to another, shall
indemnify the latter for the same. (Art. 20, CC)

Acts Contra Bonus Mores

Any person who willfully causes loss or injury to
another in a manner that is contrary to morals, good
customs or public policy shall compensate the latter
for the damage. (Art. 21, CC)

NOTE:
Similarities: In Art. 19-21, at the core is bad faith or
malice and the aggrieved party must be indemnified.
Differences: Under Art. 19 & 21, the act must be
done intentionally. Art. 20, however, does not
distinguish (the act may be done either willfully or
negligently, as long as the act is to be contrary to
law).

1. ACTS CONTRA BONUS MORES

Any person who willfully causes loss or injury to

another in a manner that is contrary to morals, good
customs or public policy shall compensate the latter
for the damage. (Art. 21, CC)

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Adopted to remedy the countless gaps in the Note: Mistake is an essential element in 28olution
statutes, which leave so many victims of moral indebiti, but not in accion in rem verso.
wrongs helpless, even though they have actually
suffered material and moral injury. (Globe Mackay Duty to Indemnify One for Damage to Property
Cable and Radio Corp. v. Court of Appeals, G.R. Even when an act or event causing damage to
No. 81262, 1989) another’s property was not due to the fault or
negligence of the defendant, the latter shall be liable
Note: Whenever an act that’s not punishable or for indemnity if through the act or event he was
covered by any law causes loss or injury to another, benefited. (Art. 23, CC)
Art. 21 can be invoked the legal basis to claim
damages. Duty Arising from Quasi-Contracts
Certain lawful, voluntary and unilateral acts give rise
2. BREACH OF PROMISE OF to the juridical relation of the quasi-contract to the
MARRIAGE end that no one shall be unjustly enriched or
benefited at the expense of another. (Art. 2142, CC)
General Rule: Breach of promise to marry is not
actionable. The provisions for quasi-contracts in this Chapter do
not exclude other quasi-contracts which may come
Exception: When one party has already made real within the purview of the preceding article. (Art.
efforts to prepare and spend for the wedding. Such 2143, CC)
act is unjustifiably contrary to good customs for
which the defendant must be held answerable for
damages in accordance with Art. 21 of the CC. C. THOUGHTLESS EXTRAVAGANCE
(Wassmer v. Velez, G.R. No. L-20089, 1964)
Thoughtless extravagance in expenses for pleasure
or display during a period of acute public want or
B. UNJUST ENRICHMENT (ACCION IN emergency. (Art. 25, CC)
REM VERSO) May be stopped by order of courts if the following
requisites are present:
Unjust Enrichment
1. During an acute public want or emergency
Every person who through an act of performance by
2. Person seeking to stop it is the government
another, or any other means, acquires or comes into
or a private charitable institution (Art. 25,
possession of something at the expense of the latter
CC)
without just or legal ground, shall return the same to
him. (Art. 22, CC)
Extravagance During Emergency
Entities which are given legal standing to seek an
There is unjust enrichment when a person unjustly
retains a benefit at the loss of another, or when a injunction:
person retains the money or property of another 1. Government; or
against the fundamental principles of justice, equity 2. Private charitable institution.
and good conscience. (Grandteq Industrial Steel
Products, Inc., v. Margallo, G.R. No. 181393, 2009)
D. TORTIOUS INTERFERENCE
Conditions for Unjust Enrichment
1. The person must have been benefited Any third person who induces another to violate his
without a real or valid basis or justification. contract shall be liable for damages to the other
2. The benefit was derived at another contracting party. (Art. 1314, CC)
person’s expense or damage. (Art. 22, CC)
(Loria v. Muñoz, G.R. 187240, 2014) Elements of Tortious Interference
1. Existence of a valid contract
Requisites (ELWN) 2. Knowledge on the part of the third person
1. Defendant had been Enriched; of the existence of contract
2. Plaintiff suffered a Loss; 3. Interference of the third persons is without
3. Unjust enrichment of defendant is Without legal justification or excuse
just or legal ground; and
4. Plaintiff has No other action based on
contract, quasi-contract, crime, or quasi-
delict.

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Liability of Third Person Responsible for Breach

of Contract
A stranger to a contract can be sued for damages
for his unwarranted interference with the contract of
another without legal justification or excuse. This tort
or wrongful conduct recognized is known as
“interference with contractual relations.” (Art. 1314,
CC)

Interference with Contractual Relations

Presupposes that the contract interfered with is valid
and the third person has knowledge of the existence
of the contract or must have known of it after a
reasonable inquiry.

Inducement
Refers to situations where a person causes another
to choose one course of conduct by persuasion or
intimidation.

Remedy for Wrongful Interference

An injunction is an appropriate remedy to prevent
wrongful interference with contracts by strangers to
such contracts where the legal remedy is insufficient
and the resulting injury is irreparable. (Yu vs CA,
G.R. No. 86683, 1993).

--end of topic--

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2. Legitimate and Illegitimate Children –

III. PERSONS AND FAMILY RELATIONS
Family Code, arts. 164-165 and 167-
169
TOPIC OUTLINE UNDER THE SYLLABUS a. Proof of Filiation
b. Rights of Legitimate Children
A. NATURAL PERSONS c. Rights of Illegitimate Children
1. Capacity to Act; Restrictions d. Action to Impugn Legitimacy
2. Commencement and End of Civil 3. Legitimated Children
Personality a. Rights of Legitimated
3. Proof of Death Children
b. Action to Impugn Legitimacy
B. JURIDICAL PERSONS 4. Adopted Children
a. Domestic Administrative
C. DOMICILE; RESIDENCE Adoption and Alternative
Child Care Act
D. SURNAMES b. Inter-Country Adoption Act
c. Simulated Birth Rectification
E. ABSENTEES Act

O. SUPPORT
F. MARRIAGE; GENERAL PRINCIPLES
1. Essential and Formal Requisites
2. Effects of Absence, Defect or P. PARENTAL AUTHORITY
Irregularity

G. MIXED MARRIAGES

H. VOID MARRIAGES; EFFECTS AND

REMEDIES

I. VOIDABLE MARRIAGES; EFFECTS

AND REMEDIES

J. LEGAL SEPARATION

K. PROPERTY RELATIONS BETWEEN

SPOUSES
1. Donation Propter Nuptias; Void
Donations
2. Marriage Settlements
a. Absolute Community of
Property Regime
b. Conjugal Partnership of
Gains Regime
c. Separation of Property
Regime – Family Code, arts.
143-146
3. Judicial Separation of Property
4. Property Regime of Unions Without
Marriage

L. RIGHTS AND OBLIGATIONS BETWEEN

HUSBAND AND WIFE

M. THE FAMILY; FAMILY PATERNITY AND

FILIATION
1. Concepts of Paternity, Filiation and
Legitimacy

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A. NATURAL PERSONS Death of Natural Persons

Civil personality is extinguished by death. The effect
1. CAPACITY TO ACT; RESTRICTIONS of death upon the rights and obligations of the
deceased is determined by law, by contract and by
Capacity to Act will. (Art. 42, CC)
It is the power to do acts with legal effect and is
acquired and may be lost. (Art. 37, CC) 3. PROOF OF DEATH

Restrictions on Capacity to Act (MInD-ICIP) Presumed to have survived

a. Minority If there is a doubt, as between two or more persons
b. Insanity who are called to succeed each other, as to which
c. State of being Deaf-mute of them died first.
d. Imbecility
e. Civil Interdiction General Rule: Whoever alleges the death of one
f. Prodigality - state of squandering money or prior to the other, shall prove the same
property with a morbid desire to prejudice
the heirs of a person (Martinez v. Martinez, Exception: In the absence of proof, it is presumed
G.R. No. 445, 1902) that they died at the same time and there shall be
no transmission of rights from one to the other. (Art.
Note: But these do not exempt the incapacitated 43, CC)
person from certain obligations.
Statutory presumption provided by Art. 43 applies
Circumstances that Modify or Limit Capacity to only when there is doubt on the order of death
Act (FAT-DA-PAPIII) between persons who are called to succeed each
a. Family relations other. It does not apply when there is credible
b. Alienage eyewitness as to who died first. (Joaquin v.
c. Trusteeship Navarro, G.R. No. 5426)
d. State of being Deaf-mute
e. Age Disputable Presumptions
Penalty That except for purposes of succession, when two
f. Absence persons perish in the same calamity, such as wreck,
g. Prodigality battle, or conflagration, and it is not shown who died
h. Insanity first, and there are no particular circumstances from
i. Insolvency which it can be inferred, the survivorship is
j. Imbecility (Art. 39, CC) determined from the probabilities resulting from the
strength and the age of the sexes, according to the
2. COMMENCEMENT AND END OF following rules:
CIVIL PERSONALITY a. Both under the age of fifteen (15) years, the
older is deemed to have survived;
b. Both were above the age sixty (60), the
Birth of Natural Persons
younger is deemed to have survived;
c. One is under fifteen (15) and the other
General Rule: Birth determines personality
above sixty (60), the former is deemed to
have survived;
Exception: A fetus or conceived child shall be
d. Both be over fifteen (15) and under sixty
considered born for all purposes that are favorable
(60), and the sex be different, the male is
to it, provided it be born later with the following
deemed to have survived, if the sex be the
conditions:
same, the older;
1. If the fetus is alive at the time it is
e. One be under fifteen (15) or over sixty (60),
completely delivered from the mother’s
and the other between those ages, the
womb, it is considered born for all purposes
latter is deemed to have survived. (Rules of
that are favorable to it.
Court, Rule 131, § 3 (jj))
2. If the fetus had an intra-uterine life of less
than 7 months, it is not considered born if it
dies within 24 hours after its complete
delivery from the maternal womb.

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B. JURIDICAL PERSONS institution derived the principal benefits from the

same. (Art. 47, CC)
Juridical Persons
a. The State and its political subdivisions
b. Other corporations, institutions, and C. DOMICILE; RESIDENCE
created by law
c. Corporations, partnerships, and Place of Domicile
associations for private interest or purpose 1. For natural persons, it is the place of
to which the law grants a juridical habitual residence.
personality (Art. 44, CC)
2. For juridical persons,
Laws Governing Juridical Persons
a. The State, its political subdivisions, and General Rule: In accordance with the law
corporations, institutions, and entities for creating or recognizing them, or any other
public interest or purpose: Governed by the provision
laws creating or recognizing them.
b. Private corporations: Governed by the Exception: If the law is silent, the residence
Revised Corporation Code. (R.A. No. shall understood to be the place where their
11232) legal representation is established or where
c. Partnerships and associations: Governed they exercise their principal functions. (Art. 50-
by the provisions of the New Civil Code on 51, CC)
partnerships, except those registered with
the SEC which should be governed like Note: A person may have as many residences as
corporations. (Art. 45, CC) he wants, but he can only have one domicile. Under
the Family Code, the husband and wife shall fix the
Extinguishment family domicile. In case of disagreement, the Court
By termination of existence either through law, shall decide (Art. 69, CC)
dissolution, or expiration of corporate life.
A minor follows the domicile of his parent
Rights of a Juridical Person Domicile of origin can only be lost when a change of
1. Acquire and possess property of all kinds domicile occurs
2. Incur obligations
3. Bring civil or criminal actions (Art. 46, CC) If the child is illegitimate, the domicile of the mother
is followed
JURIDICAL CAPACITY V. CAPACITY TO ACT
Requirements for the Acquisition of New
Fitness to be the Power to do acts with Domicile
subject of legal legal effect a. Bodily presence in new locality
relations) b. Intention to remain therein (animus
Passive Active manendi)
Inherent Not Inherent; attained c. Intention to abandon the old domicile
or conferred (animus non revertendi)
Lost only through Lost through death and
death other causes Kinds of Domicile
Can exist without Cannot exist without 1. Domicile of Origin: Received by a person at
capacity to act juridical capacity birth
Cannot be limited or Can be restricted, 2. Domicile of choice: The place freely chosen
restricted modified, or limited by a person sui juris

Upon the dissolution of corporations, institutions,

and other entities for public interest or purpose, D. SURNAMES
Their property and other assets shall be disposed of
in pursuance of law or the charter creating them. If 1. Legitimate and legitimated children shall
nothing has been specified on this point, the principally use the surname of the father.
property and other assets shall be applied to similar 2. Adopted child shall bear the surname of the
purposes for the benefit of the region, province, city adopter.
or municipality which during the existence of the 3. Illegitimate children shall use the surname
of the mother.

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Note: Illegitimate children may use the 3. Without leaving an agent to administer his
surname of their father if their filiation has property
been expressly recognized by the father:
Then, the judge, at the instance of an interested
4. Through the record of birth appearing in the party, a relative, or a friend, may appoint a person
civil register or when an admission in a to represent him in all that may be necessary.
public document or private handwritten
instrument is made by the father (R.A. No. Same rule applies when under similar
9225, amending Art. 176 of the Family circumstances, the power conferred by the
Code) absentee has expired (Art. 381, CC).
5. Children conceived before the decree
annulling a voidable marriage shall Preferred representative
principally use the surname of the father. The spouse present shall be preferred when there is
6. A married woman may use: no legal separation.
a. Her maiden first name and If the absentee left no spouse, any competent
surname and add her husband’s person may be appointed by the court. (Art. 383,
surname, or CC)
b. Her maiden first name and her
husband’s surname or When absence may be declared
c. Her husband’s full name, but 1. Two (2) years having elapsed without any
prefixing a word indicating that she news about the absentee, or since the
is his wife, such as “Mrs.”. receipt of the last news, and
7. In case of annulment of marriage, and the 2. Five (5) years in case the absentee has left
wife is the guilty party, she shall resume her a person in charge of the administration of
maiden name and surname. If she is the his property (Art. 384, CC)
innocent spouse, she may resume her
maiden name and surname. However, she Who may ask for a declaration of absence
may choose to continue employing her 1. The spouse present
former husband’s surname, unless: 2. The heirs instituted in a will, who may
8. The Court decrees otherwise, or present an authentic copy of the same
9. She or the former husband is married again 3. The relatives who may succeed by the law
to another person. of intestacy
10. When legal separation has been granted, 4. Those who may have over the property of
the wife shall continue using her name and the absentee some right subordinated to
surname before the legal separation the condition of his death. (Art. 385, CC)
11. A widow may use the deceased husband’s
surname as though he were still living. When will a judicial declaration take effect
12. In case of identity of names and surnames, Six (6) months after its publication in a newspaper
the younger person shall be obliged to use of general circulation. (Art. 386, CC)
such additional name or surname as will
avoid confusion. Alienation and Encumbrance of Property
13. In case of identity of names and surnames The wife who is appointed as an administratrix of the
between ascendants and descendants, the husband’s property cannot alienate or encumber the
word “Junior” can be used only by a son. husband’s property; or that of the conjugal
Grandsons and other direct male partnership, without judicial authority. (Art. 388, CC)
descendants shall either:
a. Add a middle name or the mother’s Administrator of absentee’s property shall be
surname, or appointed in accordance with Art. 383. (Art. 387,
b. Add the Roman Numerals II, III, CC).
and so on.
When will administration cease
1. When the absentee appears personally or
E. ABSENTEES by means of an agent
2. When the death of the absentee is proved
Provisional measures in case of absence and his testate or intestate heirs appear
When a person 3. When a third person appears, showing by
1. Disappears from his domicile a proper document that he has acquired the
2. His whereabouts being unknown and absentee’s property by purchase or other
title

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In these cases, the property shall be at the disposal a. Marriage in articulo mortis (one or
of those who may have a right thereto. (Art. 389, CC) both of the parties at the point of
death) (Art. 27, FC)
b. If the residence of either party is so
F. MARRIAGE; GENERAL PRINCIPLES remote there is no means of
transportation to enable such party
Definition of Marriage to appear personally before the
1. Special contract civil registrar (Art. 28, FC)
2. Permanent union 3. Marriage solemnized outside the
3. Between a man and a woman Philippines where no marriage license is
4. Entered in accordance with law required by the country where it was
5. For the establishment of conjugal and solemnized (Art. 26, FC)
family life. (Art. 1, FC) 4. Marriage among Muslims or among
members of ethnic cultural communities in
accordance with their customs (Art. 33, FC)
1. ESSENTIAL AND FORMAL 5. Marriage between persons who have lived
REQUISITES together as husband and wife for at least
five years and without any legal
Essential Requisites of Marriage: (LCI) (Art. 3) impediment to marry each other during the
1. Legal capacity of contracting parties 5-year period of cohabitation (Art. 34, FC)
a. Must be between a male and
female Procedural Requirements in Case of
b. Must be at least 18 years old Cohabitation for 5 Years:
2. Consent freely given, in the presence of the 1. The parties must execute an affidavit
solemnizing officer stating that they have lived together for at
3. Absence of any Impediment (Art. 3, FC) least 5 years and are without legal
impediment to marry each other; and
Formal Requisites of Marriage: (ALC) 2. The solemnizing officer must execute a
1. Authority of solemnizing officer; sworn statement that he had ascertained
2. Valid marriage License (except in cases the qualifications of the parties and that he
where a marriage license is not required); had found no legal impediment to their
and marriage (Art. 34, FC)
3. Valid only for 120 days from issue in any
part of the Philippines Note: Absence of any of these procedural
4. Marriage Ceremony where the contracting requirements does not make the marriage void.
parties appear before the solemnizing What is indispensable is the 5-year cohabitation as
officer, with their personal declaration that husband and wife.
they take each other as husband and wife
in the presence of not less than two The 5-year period should be a period of cohabitation
witnesses of legal age. (Art. 4, FC) characterized by exclusivity – meaning no third party
was involved at any time – that is, unbroken. (Niñal
EXEMPTION FROM LICENSE REQUIREMENT: v. Bayadog, G.R. No. 133778, 2000)

Effects of the Absence of Requisites for The absence of the legal impediment must be
Marriage throughout the 5-year period. (Office of the
Administrator v. Necessario, A.M. No. MTJ-07-
General Rule: Absence of any of the essential or 1691, 2013)
formal requisites – void ab initio
Authorized Solemnizing Officers: (JPCCCM)
Exceptions: 1. Incumbent member of the Judiciary (judge
1. If solemnized by an unauthorized person, – within the court’s jurisdiction; Justices –
the marriage will still be valid if either or within Philippine territory)
both contracting parties believed in good 2. Any Priest, rabbi, imam or the minister of
faith that the solemnizing officer had legal any church or religious sect
authority (Art. 35[2], FC) a. Duly authorized by his church or
2. In instances where marriage license need religious sect
not be procured: b. Registered with the civil registrar
general;

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c. Within limits of the written authority EFFECTS OF LACK OF PARENTAL CONSENT,

of the church or sect; and PARENTAL ADVICE, OR MARRIAGE
d. At least one of the contracting COUNSELLING IF REQUIRED
parties belongs to the church or
religious sect. Lack of parental Marriage is voidable
3. Ship Captain or airplane chief consent
a. At least one of the parties is in No effect on validity of
articulo mortis; marriage. However,
b. Between passengers or crew this will suspend the
members; and Lack of parental issuance of the
c. While the ship is at sea or the advice or failure to marriage license for 3
plane is in flight and also during attach certificate of months from the
stopover at ports of call (Art. 31, marriage counseling completion of
FC) publication of the
4. Military Commander (Art. 7 and Art. 32, FC) application. (Art. 16,
a. Must be a commissioned officer FC)
b. Of a unit to which a chaplain is If they get married
assigned during the 3-month
c. Chaplain is absent at the time of period with a license,
marriage the marriage shall be
d. During military operations valid but civil and
e. Must be one in articulo mortis and criminal liability may
f. Between persons within the zone attach. (Art. 16, FC)
of military operations or whether
members of the armed forces or If they get married
civilians during the 3-month
5. Consul-general, consul, or vice-consul period without a
Between Filipino citizens abroad license, the marriage
6. Mayor - Effective January 1, 1992 (LGC) shall be void for lack of
a formal requirement.
Venues for Marriage (Directory) No marriage license
General Rule: Must be solemnized publicly, and not will be issued in the
elsewhere, in the: absence of Certificate
1. Chambers of the judge or in open court of Compliance issued
2. Church, chapel, or office of consul-general, by the Family Planning
consul, or vice-consul (Art. 8, FC) Office. (R.A. No.
10354, § 15)
Exceptions:
1. Marriage at the point of death (in articulo Marriage Certificate
mortis) While a marriage certificate is considered the
2. Marriage in remote places primary evidence of a marital union, it is not
3. Marriage at a house or place designated by regarded as the sole and exclusive evidence of
the parties in a sworn statement upon their marriage. The fact of marriage may be proven by
written request to the solemnizing officer relevant evidence other than the marriage
certificate. Hence, even a person’s birth certificate
OTHER REQUIREMENTS (Art. 14-15, CC) may be recognized as competent evidence of the
marriage between his parents. (Anonuevo v. Int.
18 years old and Parental consent and Estate of Jalandoni, G.R. No. 178221, 2010)
above but below 21 Marriage counseling
21 years old and Parental advice and 2. EFFECTS OF ABSENCE, DEFECT
above but below 25 Marriage Counseling OR IRREGULARITY

Effects of Absence, Defect, Irregularities in

Essential and Formal Requirements

Absence of any of the formal or essential

requisites: Void marriage

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Defect in any of the essential requisites: 9. Failure of local civil registrar to post
Voidable marriage required notices;
10. Issuance of a marriage license despite
Irregularity in any of the formal requisites: Does absence of publication or prior to
not affect the validity of the marriage but will make completion of 10-day publication period;
the party responsible civilly, criminally, or 11. Failure of contracting parties to pay
administratively liable. prescribed fees for marriage license; and
12. Failure of the person solemnizing the
ABSENCE IN REQUISITES OF MARRIAGE marriage to send copies of the marriage
General Rule: If there is an absence of essential or certificate to the local civil registrar
formal requisites of marriage, said marriage is void.
(Art. 4[1], FC) Exception: Contracting parties are 18-21 years old
with no consent from parents, therefore, making the
Exceptions: marriage annullable.
1. No marriage license but listed in Chapter 2,
Title I of the Family Code Example:
Marriage of two persons living in places G. MIXED MARRIAGES
where there is no means of transportation
allowing them to appear personally before Marriages celebrated abroad (Art. 26, par. 1)
the civil registrar; General Rule: Marriages solemnized outside the
2. Art. 35 (2), FC – When a solemnizing officer Philippines in accordance with the laws of the
has no authority, but either party believed foreign country shall be valid here (lex loci
in good faith that he had the authority to do celebrationis)
so.
Basis: Principle of Comity
DEFECTS IN REQUISITES OF MARRIAGE However, if solemnized inside the Philippine
Defects in essential requisites makes the marriage Consulate abroad, Philippine laws must be
voidable but shall make the party responsible civilly, observed
criminally, or administratively liable. (Art. 4[2], FC)
EXCEPTION TO LEX CELEBRATIONIS:
IRREGULARITIES IN REQUISITES OF 1. Where either or both parties are below 18
MARRIAGE years old
General Rule: Irregularities in formal requisites do 2. Bigamous or polygamous marriage (except
not affect validity of the marriage. (Art. 4[3], FC) Art. 41 on presumptive death of spouse)
3. Mistake in identity
Examples: 4. Marriage void under Art. 53 – contracted
1. Absence of two witnesses of legal age following the annulment or declaration of
during ceremony; nullity of a previous marriage but before
2. Marriage solemnized in a place other than recording of partition
publicly in the chambers of the judge or in 5. Psychological incapacity
open court, in church, chapel, or temple, or 6. Incestuous marriage
in the office of the consul-general, consul or 7. Marriage void for reasons of public policy
vice-consul;
3. Issuance of a marriage license in city or FOREIGN DIVORCE
municipality not the residence of either of Requisites for a Filipino Spouse to Gain Capacity to
the contracting parties; Remarry under Philippine Law After Divorce with
4. Unsworn application for a marriage license; Foreigner-spouse (Art. 26, Par. 2, FC)
5. Failure of the contracting parties to present 1. A valid marriage that had been celebrated
original birth certificates or baptismal between a Filipino citizen and a foreigner
certificate to the local civil registrar who 2. A valid divorce subsequently obtained
likewise failed to ask for the same; abroad by the alien spouse capacitating
6. Failure of the contracting parties between him or her to remarry
the ages of 18-21 to exhibit consent of
parents or persons having legal charge of The letter of the law does not demand that the alien
them to local civil registrar; spouse should be the one who initiated the
7. Failure of the parties between ages 21-25 proceeding wherein the divorce decree was
to exhibit advice of parents to the local civil granted. It does not distinguish whether the Filipino
registrar; spouse is the petitioner or the respondent in the
8. Failure to undergo marriage counseling;

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foreign divorce proceeding (Republic v. Manalo, An Apostille is a certificate that authenticates the
G.R. No. 221029, 2018). origin of a public document. It is issued by a country
that is party to the Apostille Convention to be used
Art. 26 should be interpreted to mean that it is in another country which is also a State-Party.
irrelevant for courts to determine if it is the foreign
spouse that procures the divorce abroad. Once a Public documents executed in Apostille-contracting
divorce decree is issued, the divorce becomes countries and territories to be used in the Philippines
"validly obtained" and capacitates the foreign no longer have to be authenticated by the Philippine
spouse to marry. The same status should be given Embassy or Consulate General once Apostillized.
to the Filipino spouse. The national law of Japan
does not prohibit the Filipino spouse from initiating In relation to this, OCA CIRCULAR NO. 157- 2022
or participating in the divorce proceedings. It would which was addressed to all judges, branch clerks of
be inherently unjust for a Filipino woman to be court and officers-in charge/acting clerks of court of
prohibited by her own national laws from something the family courts stated:
that a foreign law may allow. (Racho v. Seiichi
Tanaka, G.R. No. 199515, 2018) SUBJECT: Compilation of the Laws of
Foreign Countries on Marriage and Divorce
NOTE: Article 26 (2) applies to mixed marriages
where the divorce decree is: (i) obtained by the The Family Courts are advised to take
foreign spouse; (ii) obtained jointly by the Filipino judicial notice of this compilation of the laws
and foreign spouse; and (iii) obtained solely by the of foreign countries on marriage and
Filipino spouse. (Galapon v. Republic, G.R. No. divorce in the resolution of cases requiring
243722, January 22, 2020). the presentation of the laws of foreign
countries on marriage and divorce.
How to prove foreign divorce:
1. Present the divorce decree, proven as a
public or official record of a foreign country
H. VOID MARRIAGES; EFFECTS AND
by either
a. An official publication, or REMEDIES
b. A copy thereof attested by the
officer having legal custody of the VOID MARRIAGES
document Marriages Void from the Beginning (Void Ab
c. If the record is not kept in the Initio):
Philippines, such copy must be: 1. Void under Art. 35:
i. Accompanied by a a. Contracted by any party below 18
certificate issued by the years old ;
proper or consular officer b. Solemnized by an unauthorized
in the Philippine foreign solemnizing officer;
service stationed in the
foreign country in which Exception: If either or both parties
the record is kept believed in good faith that the
ii. Authenticated by the seal officer had authority
of his office
2. Prove the conformity of the decree to the c. Solemnized without a valid
foreign law (Garcia v. Recio, G.R. No. marriage license;
138322, 2001)
Exception: When license not
Settled is the rule that in actions involving the required
recognition of a foreign divorce judgment, it is
indispensable that the petitioner proves not only the d. Bigamous or polygamous
foreign divorce judgment granting the divorce, but marriages;
also the alien spouse’s national law.
Exception: Art. 41 – Marriage
Apostille contracted by a person whose
On May 14, 2019, the Hague Convention Abolishing spouse has been absent for 4
the Requirement of Legalization for Foreign Public years (ordinary absence) or 2
Documents (Apostille Convention) entered into years (extraordinary absence),
force for the Philippines. where such person has a well-
founded belief that his/her absent

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spouse is already dead, and had Exception: If subsequent marriage was contracted
obtained a declaration of with a valid declaration of presumptive death.
presumptive death, and at the time
of marriage ceremony is in good First marriage was not judicially declared void nor
faith together with the subsequent was Z judicially declared presumptively dead under
spouse the Civil Code. Parties to a marriage should not be
permitted to judge for themselves its nullity, only
e. Those contracted through mistake competent courts having such authority. Prior to
of one contracting party as to the such declaration of nullity, the validity of the first
identity of the other; and marriage is beyond question. A party who contracts
f. Those subsequent marriages that a second marriage then assumes the risk of being
are void under Article 53. prosecuted for bigamy.
2. Psychological Incapacity (Art. 36, FC)
3. Incestuous Marriage (Art. 37, FC) The absolute nullity of a previous marriage may be
4. By Reasons of Public Policy (Art. 38, FC) invoked for purposes of remarriage on the basis
solely of a final judgment declaring such previous
Good faith marriage marriage void.
Good faith means an honest and reasonable belief
that the marriage was valid at its inception, and that Mistake in Identity
no legal impediment exists to impair its validity (52 The contemplated mistake refers to the actual
Am. Jur. 2d 96) Marriage without a valid marriage physical identity of the other party, and not merely
license A certification of no marriage license by the mistake in the name, character, age, or other
local civil registrar stating that there was not enough attributes of the person. (Art. 35[5], FC)
staff to search for the marriage license is not
adequate and will not prove absence of a marriage Subsequent Marriage Void
license. The certification, in fact, proves that no A person whose marriage has been annulled or
diligent search was made. (Art. 35[2], FC) (Sevilla declared null and void may remarry as long as, after
vs. Cardenas, G.R. No. 167684, 2006) the marriage is annulled/nullified, he does the
following:
A Certification of the Civil Registrar to the effect that 1. Partition and distribution of the properties of
“after a diligent search on the files of Registry Book the spouses.
on Application for marriage license and license 2. Distribution of the presumptive legitimes of
Issuance available in this office, no record could be the children; and
found on the alleged issuance of this office of 3. Recording of the judgement of annulment
Marriage License No. XXXXX in favor of Mr. A and or absolute nullity (Art. 40, FC), the partition
B dated XXXX” does not categorically prove that and distribution, and the delivery of the
there was no marriage license. Furthermore, presumptive legitimes in the appropriate
marriages are not dissolved through mere civil registry and registries of the property.
certifications by the civil registrar. It will be wrong to
establish a doctrine that a certification that a
Failure to comply with these requisites will make the
marriage license cannot be found may substitute for
subsequent marriage void ab initio. Furthermore,
a definite statement that no such license existed or
failure to record in the proper registries will mean
was issued. (Vitangcol v. People, G.R. No. 207406,
that such will not affect third persons (Art. 52-53,
2016)
FC).
The Certification by the Municipal Civil Registrar that
the Office of the Local Civil Registrar “has no record Liquidation, partition, and distribution of
nor copy of any marriage license” ever issued in presumptive legitimes apply only to marriages
favor of petitioner and respondent, coupled with declared void under Art. 40 and 45. (Diño v. Diño,
respondent’s failure to produce a copy of the alleged G.R. No. 178044, 2011)
marriage license or of any evidence to show that
such license was ever issued, proves that no valid Psychological Incapacity
marriage license was, in fact, issued. (Kho v. Marriage where any of the parties, at the time of the
Republic and Kho, G.R. No. 187462, 2016) celebration of the marriage, was psychologically
incapacitated to comply with the essential marital
Valid Bigamous Marriages obligation, even if incapacity becomes manifest only
General Rule: Marriage contracted by any person after solemnization. (Art. 36, FC)
during the subsistence of a previous marriage is
void (Art. 35, FC)

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Psychological Incapacity must be judged on a The burden falls upon petitioner, not just to prove
case-by-case basis. It must be characterized that respondent suffers from a psychological
by: (JIG) disorder, but also that such psychological disorder
1. Juridical antecedence renders her "truly incognitive of the basic marital
2. Incurability covenants that concomitantly must be assumed and
3. Gravity discharged by the parties to the marriage."
(Baccay v. Baccay, GR No. 117318, 2010)
Note: Not being an illness, psychological incapacity
is not something to be cured. Jurisprudential guidelines: (C-PIE-GOI)
1. The quantum of evidence required for
Psychological Incapacity is neither a mental nullity cases is Clear and convincing
incapacity nor a personality disorder that must be evidence standard, not mere
proven by through expert opinion. There must be preponderance
proof of a spouse’s “personality structure” which 2. The proof required is “of the durable or
manifests itself through clear acts of dysfunctionality enduring aspects of a person's personality,
that undermines the family. It must make it called with ‘Personality structure,’ which
impossible for them to understand and comply with manifests itself through clear acts of
their essential marital obligations. The incapacity dysfunctionality that undermines the family.
must be so enduring and persistent with respect to 3. The Incapacity is relative to the other
the specific partner, and contemplates a situation spouse and not medical but legal -
where the couple's respective personality structures incapacity is so enduring and persistent
are so incompatible and antagonistic that the only with respect to a specific partner, and
result of the union would be the inevitable and contemplates a situation where the
irreparable breakdown of the marriage. (Tan-Andal couple's respective personality structures
v. Andal. G.R. No. 196359, 2021) are so incompatible and antagonistic that
the only result of the union would be the
Mere showing of irreconcilable differences and inevitable and irreparable breakdown of the
conflicting personalities do not constitute marriage.
psychological incapacity. (Carating-Siaynco v. 4. Existing at the time of the celebration of the
Siaynco, G.R. No. 158896, 2004) marriage
5. Such illness must be Grave - it must be
Mere sexual infidelity or perversion and shown that the incapacity is caused by a
abandonment do not by themselves constitute genuinely serious psychic cause.
psychological incapacity within the contemplation of 6. Essential marital Obligations must be those
the Family Code. (Dedel v. CA, G.R. No. 151867, embraced by Arts. 68-71, as well as Arts.
2004) 220, 221, and 225 of the Family Code.
7. Interpretations given by the National
One of the essential marital obligations is "to Appellate Matrimonial Tribunal of the
procreate children based on the universal principle Catholic Church in the Philippines, while
that procreation of children through sexual not controlling or decisive, should be given
cooperation is the basic end of marriage." Constant great respect by our courts.
non-fulfillment of this obligation will finally destroy
the integrity or wholeness of the marriage. The Note: Proof of a spouse’s “personality structure”
senseless and protracted refusal of one of the need not be given by an expert. Ordinary witnesses
parties to fulfill this marital obligation is equivalent to who have been present in the life of the spouses
psychological incapacity. (Chi Ming Tsoi v. CA, G.R. before they contracted marriage may testify on the
No. 119190, 1997) behavior of the incapacitated spouse. (Tan-Andal v.
Andal. G.R. No. 196359, 2021)
A finding of psychological incapacity on the part of
one spouse shows non-cognizance of one’s Incestuous Marriage
essential marital obligation, and therefore negates Whether the relationship is legitimate or illegitimate:
bad faith. As a consequence, moral and exemplary 1. Between ascendants and descendants of
damages cannot be awarded. Moral damages any degree
should be predicated on specific evidence that was 2. Between brothers and sisters, whether full
done deliberately and with malice by a party who or half-blood (Art. 37, FC)
had known of his or her disability and yet willfully
concealed the same. (Buenaventura v. CA, GR No.
127358, 2005)

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Void for Reasons of Public Policy (exclusive not as a defense in bigamy. Art. 40 did not amend
list) or repeal Art. 349 of the RPC.
1. Between collateral blood relatives up to 4th
civil degree After careful consideration, this Court is constrained
a. There is no prohibition regarding to abandon our earlier rulings that a judicial
marriages between collateral declaration of absolute nullity of the first and/or
blood relatives by half-blood second marriages cannot be raised as a defense by
2. Between step-parents and step-children the accused in a criminal prosecution for bigamy.
3. Between parents-in-law and children-in-law We hold that a judicial declaration of absolute nullity
4. Between adopting parent and adopted child is not necessary to prove a void ab initio prior and
5. Between surviving spouse of the adopter subsequent marriages in a bigamy case.
and the adopted child Consequently, a judicial declaration of absolute
6. Between surviving spouse of the adopted nullity of the first and/or second marriages
child and the adopter presented by the accused in the prosecution for
7. Between adopted and a legitimate child of bigamy is a valid defense, irrespective of the time
adopter within which they are secured. (Pulido v. People,
8. Between adopted children of same adopter (G.R. No. 220149. July 27, 2021)
9. Between parties where one, with the
intention to marry the other, killed the other Absence of a Formal Requisite of solemnization
person’s spouse or his/her own spouse of Marriage
a. No prior criminal conviction by the A judicial declaration of nullity is not needed where
court is required by the law since the parties merely signed a marriage contract on
mere preponderance of the killing their own and NO marriage ceremony was
(Art. 38, FC) performed by a duly authorized solemnizing officer.
Such act alone, without more, cannot be deemed to
The following can marry each other: constitute an ostensibly valid marriage. (Morigo v.
1. Brother-in-law and sister-in-law People, G.R. No. 145226, 2004)
2. Stepbrother and stepsister
3. Guardian and ward Void Marriage under the Civil Code
4. Adopted and illegitimate child of the If a marriage is void under a ground provided in the
adopter Civil Code and a subsequent marriage was
5. Parties who have been convicted of contracted before the effectivity of the FC without
adultery or concubinage having the first marriage declared null and void, the
second marriage is valid. The Civil Code contains
Note: Relationship by affinity between the surviving no express provision on the necessity of a judicial
spouse and the kindred of the deceased spouse declaration of nullity of a marriage considered void
continues even after the death of the deceased under the Civil Code. The requirement of a judicial
spouse, regardless of whether the marriage decree of nullity does not apply to marriages
produced children or not. (Vda. de Carungcong v. celebrated before the effectivity of the Family Code,
People, G.R. No. 181409, 2010) particularly if the children of the parties were born
while the Civil Code was in force. (Castillo v.
Subsequent Marriage Without Judicial Castillo, G.R. No. 189607, 2016)
Declaration of Nullity of Previous Void Marriage
For purposes of remarriage, the only acceptable Remedies
evidence that the previous marriage has been Where the petitioner proved by convincing evidence
voided is a final judgment declaring such marriage that the entries in a marriage certificate showing that
null and void; if the purpose is NOT TO REMARRY, she was married to a particular man was absolutely
other evidence can be presented to prove the nullity false, that her signature in the marriage certificate
of the previous marriage. (Art. 40, FC) was forged, that she did not know the man
appearing as the husband, that she had no
Even if a marriage is void, it must be declared void knowledge of the marriage ceremony, and that the
first by final judgment before the parties to such void alleged bride was an impostor and not the petitioner,
marriage can remarry. The parties cannot decide for the Supreme Court held that the “Petition for the
themselves the invalidity of their marriage. Correction of Entries” under Rule 108 of the Rules
of Court filed by the alleged wife for purposes of
Judicial Declaration of Absolute Nullity of canceling the certificate of marriage was the proper
Marriage as a Valid Defense in Bigamy Cases remedy, not a “Petition for the Declaration of a
Art. 40 of the Family Code requires a judicial Nullity of Marriage” under the Family Code,
declaration of nullity for purposes of remarriage but considering that there was no actual marriage to

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speak of where the petitioner participated as the Note: Grounds for annulment must exist at the time
bride. (Republic v. Olaybar, G.R. No. 189538, of the celebration of the marriage.
February 10, 2014).
Remedies
Void marriages can never be ratified or cured by any
I. VOIDABLE MARRIAGES; EFFECTS act of any of the contracting parties. Neither could
estoppel or acquiescence apply to remedy the
AND REMEDIES infirmity. Thus, even if one of the parties stated
under oath in his or her marriage application that he
VOIDABLE MARRIAGES Grounds for
or she was 21 years of age when in fact he or she
Annulment (PUFFIS)
was only 16 years of age and a marriage was
1. Lack of Parental consent
solemnized at the time he or she was a minor, the
2. Either party is of Unsound mind
marriage is still void and can still be judicially
3. Fraudulent means of obtaining consent of
declared as void. (De Castro v. Assidao-De Castro,
either party
G.R. No. 160172, 2008; Republic v. Dayot, G.R. No.
4. Consent was obtained by Force,
175581, 2008).
intimidation, or undue influence
5. That either party was physically Incapable
If the judicial declaration of presumptive death has
of consummating the marriage with the
already become final but the procedure for
other. Such incapacity:
notification was not followed and the respondent
a. Continues, and
was in fact not missing, the remedy of annulment of
b. Is Incurable
judgment with the Court of Appeals must be availed
6. Either party is afflicted with a Sexually
of to declare the judicial declaration of presumptive
transmissible disease. The disease:
death null and void. (Santos v. Santos, G.R. No.
a. Is found to be Serious; and
187061, 2014).
b. Appears to be incurable (Art. 45,
FC)

Circumstances constituting fraud

1. Non-disclosure of conviction by final
judgment of crime involving moral turpitude
2. Concealment of pregnancy by another man
3. Concealment of sexually transmissible
disease, regardless of nature, existing at
the time of marriage
4. Concealment of drug addiction, habitual
alcoholism, homosexuality, and lesbianism
(Art. 46, FC)

ARTICLE 45 STD V. ARTICLE 46 STD

Ground for annulment Type of fraud which is

a ground for annulment
Does not have to be Must be concealed
concealed
Must be serious and Need not be serious
appears to be and appear to be
incurable incurable
STD itself is a ground It is the concealment of
for annulment which constitute the
ground for annulment

Doctrine of Triennial Cohabitation

Presumption that the husband is impotent should
the wife still remain a virgin after 3 years of living
together with her husband. Burden of proof to prove
non-impotency shifts to the husband.

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VOID MARRIAGE V. VOIDABLE MARRIAGE

As to nature Inexistent from the time of performance Valid until annulled

As to Does not prescribe (Art. 39, FC) Prescriptive period depends on the
prescriptibility ground/s invoked.
a. May be attacked directly or collaterally a. Cannot be attacked collaterally, only
but for the purpose of remarriage, there directly (i.e. there must be a decree of
must be a judicial declaration of nullity annulment)
As to how
marriage may b. Direct: Only the spouses b. Can no longer be impugned after
be death of one of the parties
impugned c. Collateral: Any interested party in any
proceeding where the determination of
the validity of the marriage is necessary
to give rise to or negate certain rights
As to Cannot be ratified Can be ratified either by free
susceptibility cohabitation or prescription
to ratification
No community property, only Absolute community exists unless they
As to effect
co-ownership (Art. 147/148, FC) agreed upon another system in their
on property
marriage settlement
Children are illegitimate Children are legitimate if conceived
Except those falling under the following: before decree of annulment

i. In case of psychological incapacity

As to effect
(Art. 36, FC)
on children
ii. Children born of subsequent marriage
(Art. 53, FC)

SUMMARY FOR VOIDABLE MARRIAGES

Underage Within 5 years after Free cohabitation after

party (18- turning 21 reaching 21
Lack of
21
parental
years old)
consent
Parent or Before child reaches 21
guardian
Sane Before the death of the Free cohabitation after
spouse other party insane spouse regains
who had sanity
no
Insanity of
knowledge
one party
of insanity
Guardian Any time before the death
of insane of either party
spouse
Insane During lucid interval or
spouse after regaining sanity also
before death of other
party
Injured Within 5 years after discovery of Free cohabitation with full knowledge of facts
Fraud
Party fraud constituting the fraud

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Within 5 years from time force, Free cohabitation after the cause (force,
intimidations or undue influence intimidation, undue influence) disappeared or
Vitiated
disappeared or ceased ceased. Intimidation can be on the person or
consent
the property of the injured party and his/her
immediate family
Incapability Within 5 years after the No ratification since defect is permanent, but
to marriage ceremony right of action may prescribe
consummate/
STD

EFFECTS OF VALID BIGAMOUS MARRIAGE, DECLARATION OF NULLITY, AND ANNULMENT

Status of Children of subsequent marriage Illegitimate except Art. 36 Children conceived or

Children conceived before its termination – and Art. 53. born before annulment
legitimate. decree – legitimate.

Property ACP/CPG shall be liquidated. If void under Art. 40 (when ACP/CPG shall be
Relations contracted by a spouse of a liquidated.
The share in the net profits of prior valid marriage, before
community property or conjugal the latter is judicially The share in the net
partnership property of the spouse declared void): Same as profits of community
who contracted the marriage in bad property relations of Valid property or conjugal
faith, shall be forfeited in favor of Bigamous Marriage. Art. 43, partnership property of the
common children or if there are par. 2 applies. spouse who contracted
none, children of the guilty spouse the marriage in bad faith,
by previous marriage or in default If not void under Art. 40, the shall be forfeited in favor
thereof, the innocent spouse. (Art. provisions of Art. 147 and of common children or if
43 [2], FC) Art. 148 govern. The share there are none, children of
of the party in bad faith in the guilty spouse by
the co-ownership shall be previous marriage or in
forfeited in favor of their default thereof, the
common children. innocent spouse. Same
as Art. 40.

Donations Shall remain valid except: If void under Art. 40: Same Same as effect on
Propter as effect on donations for donations for Valid
Nuptias - If donee contracted the marriage in Valid Bigamous Marriage. Bigamous Marriage. Art.
bad faith, donations propter nuptias Art. 43, par. 3, and Art. 44, 43, par. 3, and Art. 44,
made to the donee are revoked by apply. apply.
operation of law. (Art. 43[3], FC)
If not under Art. 40: option
- If both spouses acted in bad faith, belongs to the donee. (Art.
donations propter nuptias made by 86[1], FC)
one in favor of the other are revoked
by operation of law.

Succession If one spouse contracted the If void under Art. 40: Same Same as effect on
marriage in bad faith, he shall be as effect on succession for succession for Valid
disqualified to inherit from the Valid Bigamous Marriage. Bigamous Marriage of Art.
innocent spouse in both testate and Art. 43, par. 5, and Art. 44, 43, par. 5, and Art. 44,
intestate succession. (Art. 43[5], FC) apply. apply.

If both spouses acted in bad faith, all If marriage is void, no

testamentary dispositions made by successional rights
one in favor of the other are revoked involved.
by operation of law. (Art. 44, FC)

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J. LEGAL SEPARATION No legal separation may be declared unless the

court has taken steps towards the reconciliation of
Grounds for Legal Separation: (PRC-FAAL the spouses and is fully satisfied, despite such
BILA) efforts, that reconciliation is highly improbable. (Art.
1. Repeated Physical violence or grossly 59, FC)
abusive conduct directed against petitioner,
a common child or a child of the petitioner The six-month-cooling-off-period requirement can
2. Physical violence or moral pressure to be dispensed with if the ground for legal separation
compel the petitioner to change Religious involves violence against the woman or the child.
or political affiliation Thus, the Court shall proceed on the main case and
3. Attempt of respondent to Corrupt or induce other incidents of the case as soon as possible. (§
the petitioner, a common child, or a child of 28, R.A. No. 9262)
the petitioner, to engage in prostitution, or
connivance in such corruption or Stipulation of Facts or Confession of Judgement
inducement No decree of legal separation shall be based upon
4. Final judgment sentencing respondent to a stipulation of facts of confession of judgement. In
imprisonment of more than 6 years (even if any case, the court shall order the prosecuting
pardoned) attorney or fiscal assigned to it to take steps to
5. Drug Addiction or habitual Alcoholism prevent collusion between the parties and to take
6. Lesbianism or homosexuality care that the evidence is not fabricated or
7. Subsequent Bigamous marriage suppressed. (Art. 60, FC)
8. Sexual Infidelity or perversion
9. Attempt by respondent against the Life of Effects of Filing a Petition for Legal Separation
the petitioner 1. The spouses shall be entitled to live
10. Abandonment for more than 1 year without separately from each other
justifiable cause (Art. 55, FC) 2. The court, in the absence of a written
agreement between the spouses, shall
Grounds to Deny Legal Separation/Defenses to designate either of them or a third person
Legal Separation: (C4-D-GRP) to administer the absolute community or
1. Condonation conjugal partnership property. The
administrator appointed by the court shall
Note: Failure of the husband to look for his have the same powers and duties as those
adulterous wife is not a condonation of of a guardian under the Rules of Court (Art.
wife’s adultery. 61, FC)

2. Consent Effects of Pendency of Action for Legal

3. Connivance Separation
4. Collusion During the pendency of the action and in the
5. Death of either party during the pendency absence of adequate provisions in a written
of the case (Lapuz-Sy v. Eufemio, G.R. No. agreement between the spouses, the Court shall
L-30977, 1972). provide for the following:
6. Equal Guilt 1. The support of the spouses;
7. Reconciliation of the spouses during the 2. The custody and support of their common
pendency of the case (Art. 66, FC) children; and
8. Prescription
Note: The Court shall give paramount
When to file/try an action for legal separation consideration to the moral and material
An action for legal separation shall be filed within 5 welfare of said children and their choice as
years from the time of occurrence of the cause. (Art. to the parent with whom they wish to remain
57, FC)
3. Appropriate visitation rights of the other
The time of discovery of the ground for legal parent. (Art. 62 in relation to Art. 49, FC)
separation is not material in the counting of the
prescriptive period. The action for legal separation Effects of Decree of Legal Separation
shall not be tried before 6 months shall have 1. Spouses are entitled to live separately;
elapsed since the filing of the petition, (Art. 58, FC) 2. Marriage bond is not severed;
except interlocutory matters such as the 3. Dissolution of property regime;
determination of custody of children, alimony, and
support pendente lite.

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4. Forfeiture of the share of the guilty spouse of the insurance beneficiary shall take
in the net profits of the ACP/CPG; effect upon written notification to the
insured. (Art. 64, FC)
Note: For purposes of computing the net
profits subject to forfeiture, the said profits Note: Action to revoke the donation must be brought
shall be the increase in value between the within 5 years from the time the decree has attained
market price of the community property at finality.
the time of the celebration of the marriage
and at the time of dissolution. What is Reconciliation If the spouses should reconcile, a
forfeited is not the share of the guilty corresponding joint manifestation under oath duly
spouse in the liquidation of the community signed by them shall be filed with the court in the
property but merely the profits. (Siochi v. same proceeding for legal separation (Art. 65. FC).
Gozon, GR Nos. 169900 and 169977,
2010) Effects of Reconciliation
1. The legal separation proceedings, if still
If there is no separate property, the net pending, shall thereby be terminated at
remainder is the profit and therefore the whatever stage (Art. 66, FC)
remainder (which includes the profit) 2. The final decree of legal separation shall be
pertaining to the share of the guilty spouse set aside (Art. 66, FC)
is his/her entire share which must be 3. The separation of property and any
forfeited. (Quiao v. Quiao, G.R. No 176556, forfeiture of the share of the guilty spouse
2012) already effected shall subsist, unless the
spouses agree to revive their former
5. Custody of minor children to innocent property regime (Art. 66, FC)
spouse; (subject to Art. 213: parental 4. Joint custody of the children is restored
authority shall be exercised by parent 5. The right to intestate succession by the
designated by the court) The imposed guilty spouse from the innocent spouse is
custodial regime under the second restored
paragraph of Article 213 is limited in 6. The right to testamentary succession
duration, lasting only until the child’s depends on the will of the innocent spouse
seventh year. From the eighth year until the
child’s emancipation, the law gives the
separated parents freedom, subject to the K. PROPERTY RELATIONS BETWEEN
usual contractual limitations, to agree on
SPOUSES
custody regimes they see fit to adopt
(Dacasin vs. Dacasin, G.R. No. 168785,
What Governs Property Relations Between
2010).
Spouses
6. Guilty spouse is disqualified from intestate
1. Marriage Settlement – future spouses may
succession and provisions made by
agree upon the regime of ACP, CPG,
innocent spouse in his favor in a will shall
complete separation of property, or any
be revoked by operation of law. (Art. 63,
other regime
FC)
2. Family Code – if there is no marriage
settlement or when the regime agreed upon
Effects Upon Finality of the Decree (Art. 64) therein is void, the system of ACP shall
1. Innocent spouse may revoke the donation govern
made by him or her in favor of the offending 3. Local customs (Art. 74, FC)
spouse. The revocation of the donations
shall be recorded in the registries of General Rule: Property Relations are governed by
property in the places where the properties Philippine laws (Art. 80, FC)
are located. However, alienations, liens
and encumbrances registered in good faith Exceptions:
before the recording of the complaint for 1. When there is a contrary stipulation in the
revocation in the registries of property shall marriage settlement
be respected. 2. When both are aliens, even if married in the
2. Innocent spouse may revoke designation of PH
guilty spouse as beneficiary in the 3. As to extrinsic validity of contracts affecting
insurance policy even if such designation property not situated in the Philippines (Art.
be stipulated as irrevocable. The 80, FC).
revocation of or change in the designation

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MARRIAGE SETTLEMENTS Exception: If they are governed by ACP (because

they own everything in common)
Requisites of a Valid Marriage Settlement:
(WSB-TCR) Grounds to Revoke Donation Propter Nuptias:
1. In Writing; (CARNIVAL)
2. Signed by the parties; 1. Marriage without the needed parental
3. Executed Before the celebration of Consent
marriage 2. Marriage is Annulled and donee is in bad
4. To fix the Terms and conditions of their faith
property relations; 3. If it is with a Resolutory condition and the
5. If the party executing the settlement is condition is complied with
under Civil interdiction or any other 4. Marriage is Not celebrated
disability, the guardian appointed by the 5. Donee commits acts of Ingratitude such as:
court must be made a party to the a. Commits an offense against the
settlement (Art. 79, FC); and person, honor or property of the
6. Registration: To bind third persons donor, his wife, or children under
his parental authority
Requisites for a Valid Modification of Marriage b. Imputes to the donor any criminal
Settlement: offense or any act involving moral
1. In writing turpitude, unless the crime was
2. Signed by the parties committed against the donee
3. Executed before the celebration of the himself, his wife, or children under
marriage, unless: his authority
a. There is a revival of property c. Unduly refuses to support the
regime in case of reconciliation in donor when he is legally or morally
legal separation proceedings (Art. bound to give such support
66-67, FC) 6. Marriage is judicially declared Void Ab
b. There is sufficient cause for initio
judicial separation of property 7. In Legal separation and donee is the guilty
under Art. 135, FC spouse (Art. 86, FC)
c. Spouses file for voluntary
dissolution of property regime Note: In case of donations included in the marriage
under Art. 136, FC settlement, when the marriage thereafter is not
4. Registration: To bind third persons celebrated or is judicially declared void ab marriage
shall be void, while those not dependent shall
Effectivity of a Marriage Settlement in remain valid.
Consideration of Future Marriage
Everything stipulated in the settlements or contracts DONATION PROPER NUPTIAS V. ORDINARY
referred to in the preceding articles in consideration DONATIONS
of a future marriage, including donation made
between prospective spouses, shall be void if the Governed by Governed by
marriage does not take place. Stipulations not the rules on rules on
dependent on the celebration of the marriage shall ordinary donations
be valid (Art. 81, FC). donations (Arts. 725-
except if future 773, CC)
Formalities
1. DONATION PROPTER NUPTIAS; property, it
VOID DONATIONS must conform
with
Donations Propter Nuptias formalities of
Requisites: (BCF) wills
1. Made Before celebration of marriage; May be No person
2. In Consideration of marriage; and donated but may give or
3. In Favor of one or both future spouses (Art. up to 1/5 of receive, by
82, FC) donor’s way of
Present
present donation,
Property
General Rule: Future spouses cannot donate to property more than he
each other more than 1/5 of their present property. may give or
Any excess shall be considered void (Art. 84, FC) receive by will.
(Art. 752, CC)

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May be Cannot be properties to the later. It seeks to prevent such

included included exploitation which might have been contracted due
Future
provided to greed. (Perez, Jr. v. Perez-Senerpida, G.R. No.
Property
donation is 233365, 2021)
mortis causa
Art. 86 of Arts. 752, 760, Common Law Relationship
Grounds for The prohibition shall also apply to persons living
Family Code 764, 765 of
revocation together as husband & wife without a valid marriage.
CC
(Art. 87, FC)
PRESCRIPTIVE PERIODS FOR FILING ACTION
FOR REVOCATION OF DONATION PROPTER The prohibition against donations between spouses
NUPTIAS now applies to donations between persons living
together as husband and wife without a valid
If marriage is not 5 years (Art. 1149, CC) marriage,15 for otherwise, the condition of those
celebrated (Except: from the time marriage who incurred guilt would turn out to be better than
donations in marriage is not solemnized on those in legal union. (Agpay v. Palang, G.R. No.
settlements the fixed date 116668, 1997)
automatically void if
marriage not 2. MARRIAGE SETTLEMENTS
celebrated)
If marriage is judicially By operation of law if a. Absolute Community of
declared void (Note: donee-spouse Property Regime
deleted items – no contracted subsequent
distinction made by void marriage in bad Absolute Community Of Property Regime
law) faith, and if not, five (5) The property regime of spouses in the absence of a
years from finality of marriage settlement or when the regime agreed
judicial declaration of upon is void (Art. 75, FC)
nullity
When marriage takes Five (5) years from Note: It shall commence at the precise moment that
place without the celebration of marriage the marriage is celebrated. Any stipulation, express
required parental or implied, for the commencement of the regime at
consent any other time, shall be VOID (Art. 88, FC).
If resolutory condition Five (5) years from
is complied with happening of condition No waiver of rights, interests, shares and effects of
If donee commits an One (1) year from the ACP during the marriage, except in case of
act of ingratitude donor’s knowledge of judicial separation of property. The waiver must be
that fact in a public instrument. Creditors of the spouse who
In case of legal Five (5) years from the made such waiver may petition the court to rescind
separation time the decree of the waiver to the extent that is sufficient to cover the
separation has amount of the credit (Art. 89, FC).
become final
Property acquired during the marriage, whether
Void Donations by the Spouses acquisition appears to have been made in the name
of one or both spouses, is PRESUMED to belong to
Donations during the marriage the community (Art. 93, FC).
Every donation or grant of gratuitous advantage,
direct or indirect, between the spouses during the The original property regimes subsisting under the
marriage shall be void, except moderate gifts which New Civil Code when the Family Code took effect
the spouses may give to each other on the occasion are immutable and remain effective.
of any family rejoicing. (Art. 87, FC)
Art. 256 provides that the Family Code shall have
Reason for Prohibition retroactive effect insofar as it does not prejudice or
Article 87 refers to donations inter vivos. It is impair the vested or acquired rights in accordance
intended to avoid possible transfer of property from with the Civil Code or other laws.
one spouse to the other due to passion or avarice.
The intimate relation of the spouses places the General Rule: The community property consists of
weaker spouse under the will of the stronger spouse all the property owned by the spouses before, at the
so that the former might be obliged to transfer some

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time of, or after the celebration of the marriage (Art. 9. Expenses of litigation between spouses
91, FC). unless the suit is found to be groundless

EXCEPTIONS/EXCLUSIONS FROM COMMUNITY Note: If the community property is insufficient to

PROPERTY: cover all these liabilities (except those falling under
1. Those indicated in the marriage settlement cases of absence or insufficiency of the exclusive
(Art. 91, FC) property of the debtor-spouse), the spouses shall be
2. Property acquired during the marriage by solidarily liable for the unpaid balance with their
gratuitous title plus its fruits and income, separate properties.
except when the donor, testator, or grantor
expressly provides otherwise A loan used for the family business is one which
3. Property for personal and exclusive use, redounds to the benefit of the family, even if the
except jewelry business fails. (ROS v. Phil National Bank, GR No.
4. Property acquired before the marriage by 170166, 2011)
either spouse who has legitimate
descendants by a former marriage and its Under the Family Code, one spouse cannot sell
fruits and income property which is part of the community properties
without the written consent of the other spouse or
Presumption of Community Property the authority of the court. Without such consent or
Property acquired during the marriage is presumed authority, the entire sale is void. While the law does
to belong to the community, unless it is proved that not require a person dealing with registered land to
it is one of those excluded therefrom. (Art. 93, FC) inquire further than what the Torrens Title on its face
indicates, the rule is not absolute. If there are other
Charges Upon and Obligations of the ACP surrounding circumstances relevant to the sale
1. Support of spouses, their common children which show that the purchaser should have taken
and legitimate children of either spouse the necessary precaution required of a prudent
2. Debts and obligations contracted during the buyer, the purchaser cannot be considered in good
marriage: faith. (Nobleza v. Nuega G.R. No. 193038, 2015)
a. By a designated administrator-
spouse for the benefit of the In order to be considered a buyer in good faith, the
community following must be shown: (a) the diligence in
b. By both spouses verifying the validity of the title covering the property;
c. By one with the consent of the and (b) the diligence in inquiring into the authority of
other the transacting spouse to sell conjugal property in
d. By either spouse without the behalf of the other spouse. Mere reliance on the
consent of the other to the extent SPA given by the selling spouse without further
that it benefited the family questioning despite knowing that the lots were
3. Taxes, liens, charges and expenses conjugal property is insufficient. (Spouses Aggabao
including major or minor repairs upon v. Parulan, G.R. No. 165803, 2010)
community property
4. Taxes and expenses for mere preservation Disposition of Community Property
made during the marriage upon the The title bears the name of the registered owner as
separate property of either spouse used by "Cidra Garcia married to Oscar Garcia." The Deed
the family of Absolute Sale dated December 9, 1991 was
5. Expenses for professional or vocational executed by Oscar Garcia only. It bears no
course indication whatsoever regarding Oscar's authority to
6. Ante-nuptial debts which redounded to the sign the deed of conveyance in her behalf. Hence,
benefit of the family the sale of the property in favor of petitioners is void.
7. Donated or promised to common legitimate Under the Family Code, the consent of both
children for profession, vocational course spouses is indispensable for purposes of disposing
or self-improvement either conjugal or community property. (Gatmaytan
8. Other ante-nuptial debts, support of v. Misibis Land Inc, G.R. No. 222166, June 10,
illegitimate child, and liabilities for crime or 2020)
quasi-delicts in the absence of separate
property are chargeable against the Administration, Enjoyment, and Disposition of
separate properties of the spouses but may Community Property
be advanced by the ACP in case of General Rule: The administration and enjoyment of
absence or insufficiency of the exclusive the conjugal partnership shall belong to both
property of the debtor-spouse spouses jointly

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Exceptions: 5. Presumptive legitimes of children are

1. In case of disagreement, the husband’s delivered
decision shall prevail subject to recourse by 6. Adjudication of conjugal dwelling and
the wife in court to be availed within five (5) custody of common children
years from the date of the contract a. Given to the spouse to whom the
implementing the husband’s decision majority of the common children
2. In case of incapacity of one spouse or choose to remain (Art. 102, FC)
inability to administer the common
properties, the other spouse may assume Since the petitioner is the guilty party in the legal
sole powers of administration, except separation, his share from the net profits is forfeited
powers of disposition and encumbrance in favor of the common children. In both regimes
which requires authority from the court or (assuming that it was ACP), petitioner, as the guilty
written consent of the other spouse In the spouse, is not entitled to any property at all. The
absence of such authority or consent, the husband and the wife did not have any separate
disposition or encumbrance shall be void. properties. Therefore, there is no separate property
However, the transaction shall be which may be accounted for in the guilty party’s
construed as a continuing offer on the part favor. (Quiao v. Quiao G.R. No. 176556, 2012)
of the consenting spouse and the third
person, and may be perfected as a binding b. Conjugal Partnership of Gains
contract upon the acceptance by the other Regime
spouse or authorization of the court before
the offer is withdrawn by either or both
When applicable: If the spouses agree in the
offerors. (Art. 96, FC) marriage settlement to be governed by the regime
of conjugal partnership of gains
Donation of Community Property
General Rule: Neither spouse may donate any Governing law: The marriage settlement shall
community property without the consent of the primarily govern but the provisions of the Family
other. Code on CPG shall apply suppletorily. The rules on
contract of partnership shall also apply in all that is
Exception: Moderate donations for charity or on not in conflict with the marriage settlement and the
occasions of family rejoicing or family distress. provisions of the Family Code on CPG.
Dissolution of the ACP The spouses contribute the following to a common
1. Upon death of either spouse fund:
2. Decree of legal separation 1. Proceeds, products, fruits and income of
3. Marriage is annulled or nullified separate properties of spouses
4. Judicial separation of property during the 2. Everything acquired by spouses through
marriage (Arts. 134-138, FC) their efforts
3. Everything acquired by spouses through
Liquidation of the ACP chance (Art. 106, FC)
1. Inventory of all properties
a. Inventory of community property It shall commence at the precise moment that the
b. Inventory of separate property of marriage is celebrated. Any stipulation, express or
the wife implied, for the commencement of the regime at any
c. Inventory of separate property of other time shall be void.
the husband
2. Debts and obligations of ACP are paid No waiver of rights allowed during the marriage
a. In case of insufficiency of assets, except in case of judicial separation of property. The
the spouses shall be solidarily waiver must be in a public instrument. The fruits,
liable for the unpaid balance with natural, industrial, or civil, due or received during the
their separate properties. marriage from the common property, as well as the
3. Remainder of the separate properties of the net fruits from the exclusive property of each spouse
spouses are returned to the owner are included in the conjugal partnership properties.
4. Net remainder of the ACP is divided equally (Art. 117[3], FC)
between husband and wife
a. Unless a different proportion is
agreed upon in the marriage
settlement or there has been a
voluntary waiver of such share

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What Constitutes CPG (FOLCHIC) Installment purchases (Art. 118, FC)

1. Fruits of conjugal property due or received Property bought on installments paid partly from
during the marriage and net fruits of exclusive funds and party from conjugal funds:
separate property 1. Belongs to the buyer/s: If full ownership
2. Those acquired through Occupation vested before the marriage
3. Livestock in excess of what was brought to 2. Belongs to the conjugal partnership: If full
the marriage ownership vested during the marriage In
4. Those acquired by onerous title during the either case, any amount advanced by the
marriage with Conjugal funds partnership or by either or both spouses
5. Share in Hidden treasure shall be reimbursed by the owner upon
6. Those obtained from labor, Industry, work liquidation.
or profession of either or both spouse
7. Those acquired by Chance (Art. 117, FC) Credits in Installment
Whenever an amount or credit payable within a
Accession period of time belongs to one of the spouses:
If the cost of the improvement and any resulting 1. Belongs to the spouse: Sums collected in
increase in value are equal or less than the value of partial payments or by installments during
the entire property at the time of the improvement, the marriage
the entire property remains the exclusive property of 2. Belongs to the conjugal partnership:
the owner-spouse (subject to reimbursement of Interests falling due during the marriage on
improvement cost to the CPG). the principal of both spouses shall pertain
to the partnership (Art. 119, FC)
Reverse Accession
If the cost of the improvement and any resulting Rules in Cases of Improvement of Exclusive
increase in value are more than the value of the Property
entire property at the time of the improvement, the The ownership of improvements made on the
property becomes conjugal (subject to separate property of the spouses at the expense of
reimbursement of the value of the property of the the partnership or through resulting in increase in
owner-spouse). value are equal or less than the value of the entire
property at the time of the improvement, the
Exclusive Property in CPG property becomes conjugal (subject to
1. That brought into the marriage as his/her reimbursement of the value of the property of the
own owner-spouse).
2. That acquired during the marriage
gratuitously (net fruits and income are Charges upon CPG
conjugal) General Rule: Same as that under ACP
3. That acquired by redemption, barter or
exchange with exclusive property Exception: Under taxes and expenses for
4. That purchased with exclusive money (Art. preservation of separate property of either spouse
109, FC) during the marriage property need not used by the
family (Art. 121, FC)
Presumption of Conjugality (Art. 116, FC)
Property acquired during the marriage, whether Note: If the conjugal partnership is insufficient, the
acquisition appears to have been made in the name spouses shall be solidarily liable for the unpaid
of one or both spouses, is presumed to be conjugal. balance with their separate properties. The conjugal
The party who invokes the presumption must first partnership property shall likewise be liable for the
prove that the property was acquired during the payment of the personal debts of either spouse
marriage. Otherwise, the presumption of conjugality insofar as they have redounded to the benefit of the
will not apply. (Tan v. Andrade, G.R. Nos. 171904 & family. (Art. 121, FC)
172017, 2013)
Payment of criminal indemnities can be advanced
The presumption is created even if the acquisition by the conjugal partnership assets even before
appears to have been made, contracted or these are liquidated. It may be enforced against the
registered in the name of one spouse. (Spouses partnership assets after the responsibilities in Article
Anastacio v. Heirs of Coloma and Parazo, (G.R. No. 121 have been covered. No prior liquidation of those
224572, August 27, 2020) assets is required. (Pana v. Heirs of Juanite, Sr.,
G.R. No. 165201, 2012)

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Administration and Enjoyment of CPG (Art. 124, a. In case of insufficiency of assets,

FC): Same as that under ACP. the spouses shall be solidarily
liable for the unpaid balance with
Donation of Conjugal Property (Art. 125, FC): their separate properties.
Same as that under ACP 5. Remains of exclusive properties are
returned
Dissolution of the CPG (Art. 126, FC): Same as 6. Indemnify loss of deterioration of movables
that under ACP. belonging to either spouse used for the
An extrajudicial dissolution of the conjugal benefit of the family
partnership without judicial approval is void. A 7. Net remainder of conjugal property is
notary public should not facilitate the disintegration divided equally
of a marriage and the family. In so doing, a notary a. Unless a different proportion is
public may be held accountable administratively. agreed upon in the marriage
(Rodolfo Espinoso v. Juliet Omana, A.C. 9081, settlement or there has been a
2011) voluntary waiver or forfeiture of
such share
Liquidation of the CPG 8. Delivery of children’s presumptive legitimes
1. Inventory of all property 9. Adjudication of conjugal dwelling and
2. Amounts advanced by CP in payment of custody of children
personal debts and obligations of either a. Given to the spouse to whom the
spouse is credited majority of the common children
3. Reimbursement for use of exclusive funds (Art. 129, FC)
4. Debts and obligations of the CP are paid

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ABSOLUTE COMMUNITY OF PROPERTY V. CONJUGAL PARTNERSHIP OF GAINS

WHAT IT CONSISTS OF
All the properties owned by the spouses at the time of 1. Fruits of conjugal property due or received during
marriage become community property (Art. 91, FC) the marriage and net fruits of separate property

2. Those acquired through Occupation

3. Livestock in excess of what was brought to the

marriage

4. Those acquired during the marriage with conjugal

funds

5. Share in Hidden treasure

6. Those obtained from labor, Industry, work, or

profession of either or both spouse

7. Those acquired by Chance (Art. 117, FC)

8. The ownership of improvements made on the

separate property of the spouses at the expense of
the partnership or through efforts of both spouses
shall pertain to the partnership (Art. 120, FC)

WHAT REMAINS AS EXCLUSIVE PROPERTY

1. Property acquired before the marriage by either 1. That brought into the marriage as his/her own
spouse who has legitimate descendants by a former
marriage and its fruits and income 2. That acquired during the marriage gratuitously

2. Property for personal and exclusive use, except 3. That acquired by redemption, barter, or exchange
jewelry with exclusive property

3. Property acquired during the marriage by 4. That purchased with exclusive money (Art. 109,
gratuitous title plus its fruits and income, except when FC)
the donor, testator, or grantor expressly provides
otherwise (Art. 92, FC)

PRESUMPTION
Property acquired during the marriage is presumed to All property acquired during the marriage, whether the
belong to the community, unless it is proved that it is acquisition appears to have been made, contracted or
one of those excluded therefrom (Art. 93, FC) registered in the name of one or both spouses, is
presumed to be conjugal unless the contrary is proved
(Art. 116, FC)

CHARGES AND OBLIGATIONS

1. Debts and obligations contracted during the 1. The support of the spouse, their common children,
marriage: and the legitimate children of either spouse

● By either spouse without the consent of the 2. All debts and obligations contracted during the
other to the extent that it benefited the family marriage by the designated administrator spouse for
the benefit of the conjugal partnership of gains, or by
● By designated administrator-spouse by both spouses or by one of them with the consent of
both spouses the other

● By one with the consent of the other

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2. Taxes, liens, charges, and expenses including 3. Debts and obligations contracted by either spouse
major or minor repairs, upon community property without the consent of the other to the extent that the
family may have benefited
3. Support of spouses, their common children, and
legitimate children of either spouse 4. All taxes, liens, charges, and expenses, including
major or minor repairs upon the conjugal partnership
4. Expenses of litigation between spouses unless the property
suit is found to be groundless
5. All taxes and expenses for mere preservation made
5. Ante-nuptial debts which redounded to the benefit during the marriage upon the separate property of
of the family either spouse

6. Taxes and expenses for mere preservation made 6. Expenses to enable either spouse to commence or
during the marriage upon the separate property of complete a professional, vocational, or other activity
either spouse used by the family for self-improvement

7. Expenses for professional or vocational course 7. Ante-nuptial debts of either spouse insofar as they
have redounded to the benefit of the family
8. Other ante-nuptial debts, support of illegitimate
child, and liabilities for crime or quasi delicts in 8. The value of what is donated or promised by both
absence of separate property are chargeable against spouses in favor of their common legitimate children
the separate properties of the spouses but may be the for the exclusive purpose of commencing or
advanced by the ACP in case of absence or completing a professional or vocational course or
insufficiency of the exclusive property of the debtor- other activity for self-improvement
spouse
9. Expenses of litigation between the spouses
9. Donated or promised to common legitimate
children for profession, vocational course, or self-
improvement (Art. 94, FC)

LIQUIDATION
1. Inventory of all properties 1. Inventory of all property

• Inventory of community property 2. Amounts advanced by CP as payment for personal

debts and obligations of either spouse are credited
• Inventory of separate property of the wife
3. Reimbursement for use of exclusive funds
• Inventory of separate property of the
husband 4. Debts and obligations of the CP are paid

2. Debts and obligations of ACP are paid 5. Remains of exclusive properties are returned

3. Remainder of the separate properties of the 6. Indemnify loss of deterioration of movables

spouses are returned to the owner belonging to either spouse used for the benefit of the
family
4. Net remainder of the ACP is divided equally
between husband and wife 7.Net remainder of conjugal property is divided
equally
5. Presumptive legitimes of children are delivered
8. Delivery of children’s presumptive legitimes
6. Adjudication of conjugal dwelling and custody of
common children (Art. 102, FC) 9. Adjudication of conjugal dwelling and custody of
children (Art. 129, FC)

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c. Separation of Property Regime 3. JUDICIAL SEPARATION OF

PROPERTY
Separation Of Property Regime
General Rule: Separation of property between Judicial Separation Of Property
spouses during the marriage is only applicable if
there is an express declaration in the marriage When applicable: In case of a judicial order, which
settlement. may either be voluntary or for sufficient cause. (Art.
134, FC)
Exception: Separation of property by judicial order.
Such judicial separation of property may either be Voluntary separation
voluntary or for sufficient cause. (Art. 134, FC) The spouses may jointly file a verified petition with
the court.
When applicable:
If expressly provided under the marriage settlement All creditors of the absolute community or of the
(Art. 134, FC) conjugal partnership of gains, as well as the
personal creditors of the spouse, shall be listed in
Properties Included the petition and notified of the filing thereof. The
The parties may agree on the extent of their court shall take measures to protect the creditors
separation of property regime. It may involve and other persons with pecuniary interest. (Art. 136,
present or future property or both. It may be total or FC)
partial. If it is partial, the property not agreed upon
as separate shall pertain to the absolute community Sufficient cause for judicial separation
(Art. 144, FC) 1. That the spouse of the petitioner has been
sentenced to a penalty which carries with it
Rights and Liabilities of the Spouses Each civil interdiction
spouse shall: 2. That the spouse of the petitioner has been
1. Own, dispose of, possess, administer and judicially declared an absentee
enjoy his or her own separate estate, 3. That loss of parental authority of the spouse
without need of the consent of the other of the petitioner has been decreed by the
2. Own all earnings from his or her own court
profession, business or industry 4. That the spouse of the petitioner has
3. Own all fruits, natural, industrial or civil, due abandoned the latter or failed to comply
or received during the marriage from his or with his or her obligations to the family as
her provided for in Article 101
5. That the spouse granted the power of
Both spouses shall bear the family expenses in administration in the marriage settlements
proportion to their income, or, in case of has abused that power
insufficiency or default thereof, to the current market 6. That at the time of the petition, the spouses
value of their separate properties. The liability of the have been separated in fact for at least one
spouses to creditors for family expenses shall be year and reconciliation is highly improbable
solidary. (Art. 146, FC) (Art. 135, FC)

Grounds for Transfer of Administration of Note: In the cases provided for in letters (a), (b) and
Exclusive Property of Either Spouse (GACA) (c), the presentation of the final judgment against
1. One spouse becomes Guardian of the the guilty or absent spouse shall be enough basis
other for the grant of the decree of judicial separation of
2. One spouse is judicially declared Absent property.
3. One spouse is sentenced to penalty with
Civil interdiction 4. PROPERTY REGIME OF UNIONS
4. One spouse becomes a fugitive from
WITHOUT MARRIAGE
justice or is hiding as an Accused in a
criminal case (Art. 142, FC)

If the other spouse is not qualified by reason of

incompetence, conflict of interest, or any other just
cause, the court shall appoint a suitable person to
be the administrator.

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PROPERTY REGIME OF UNIONS WITHOUT MARRIAGE

A. To a man and woman who are: A. To a man and woman who are:

1. Capacitated to marry each 1. Not capacitated to marry each

other: other (under 18 years old)

a. At least eighteen (18) 2. Live exclusively with each other as

years old husband and wife

b. Not falling under Article 3. Without the benefit of marriage

37 (incestuous void
marriage) B. Adulterous relationship (e.g. concubinage)

Applicability c. Not falling under Art. 38 C. Bigamous or polygamous marriage (Art.

(void marriage by reason 35[4], FC)
of public policy)
D. Incestuous marriages under Art. 37, FC
d. Not bigamous
E. Void marriages by reason of public policy
2. Live exclusively with each other under Art. 38
as husband and wife
NOTE: If capacitated, but relationship is NOT
3. Without the benefit of marriage exclusive, it will fall under this provision

B. Other void marriages/live-in

Owned by parties in equal shares Exclusively owned, but If one of the parties is
validly married to another, it shall accrue to the
Salaries and
absolute community or conjugal partnership
Wages
existing in such valid marriage.

Properties Remains exclusive provided that there is Remains exclusive

acquired proof that it was acquired by exclusive
through funds
exclusive
funds
Presumed to have been obtained by their Only the properties acquired by both parties
joint efforts, work or industry and shall be through their actual joint contribution of money,
owned by them in equal shares If a party property, or industry shall be owned by them in
did not participate in the acquisition—shall common in proportion to their respective
be deemed to have contributed jointly if contributions. (Art. 148, FC) Without proof of
efforts consisted in the care and actual contribution by both parties, there can
Property
maintenance of the family and the be no presumption of co-ownership and equal
acquired
household sharing. (Villanueva v. CA, G.R. No. 143286)
while living
together
Once proof of actual contribution is shown,
their contributions and corresponding shares
are presumed to be equal, in the absence of
proof to the contrary. The same rule and
presumption shall apply to joint deposits of
money and evidences of credit. (Art. 148, FC)
Encumbrance Neither party can encumber or dispose by
or Disposal acts inter vivos of his/her share in the
of his/her property acquired during cohabitation and
share owned in common, without the consent of

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the other, until after the termination of their

cohabitation

When only one of the parties to a void If one of the parties is validly married to
marriage is in good faith, the share of the another, his or her share in the co-ownership
party in bad faith in the co-ownership shall shall accrue to the absolute community or
be forfeited in favor of their common conjugal partnership existing in such valid
children, descendants, or innocent party. marriage. If the party who acted in bad faith is
not validly married to another, his or her share
In case of default of or waiver by any or all shall be forfeited in favor of their common
of the common children or their children, descendants, or innocent party. The
Forfeiture descendants, each vacant share shall share shall be forfeited in the same manner as
belong to the respective surviving in Art. 147. Rules on forfeiture of shares will
descendants. apply even if both are in bad faith.

In the absence of descendants, such share

shall belong to the innocent party. In all
cases, the forfeiture shall take place upon
termination of the cohabitation.

A reading of Article 147 of the Family Code would therefore alienate, assign or mortgage it, and even
show that the provision did not make any distinction substitute another person in its enjoyment, except
or make any qualification in terms of the manner the when personal rights are involved. (Art. 493 of the
property must be acquired before the presumption Civil Code)
of co-ownership shall apply. As such, the term
"acquired" must be taken in its ordinary acceptation. Art. 493 cannot supersede, and must yield to, Art.
For as long as the property had been purchased, 147 of the Family Code, which expressly mandates
whether on installment, financing or other mode of that: "Neither party can encumber or dispose by
payment, during the period of cohabitation, the acts inter vivos of his or her share in the property
disputable presumption that they have been acquired during cohabitation and owned in
obtained by the parties' joint efforts, work or common, without the consent of the other, until after
industry, and shall be owned by them in equal the termination of their cohabitation.” (Perez, Jr. v.
shares, shall arise. Perez-Senerpida, G.R. No. 233365, 2021)

The petitioner may rebut the presumption by Under Article 148, only the properties acquired by
presenting proof that the properties, although both of the parties through their actual joint
acquired during the period of their cohabitation, contribution of money, property or industry shall be
were not obtained through their joint efforts, work owned by them in common in proportion to their
and industry. If the respondent is able to present respective contributions. If the actual contribution of
proof that she contributed through her salary, the party is not proved, there will be no co-
income, work or industry in the acquisition of the ownership and no presumption of equal shares.
properties, the parties' share shall be in proportion (Dultra v. Baclot, G.R. No. 221874, 2020
to their contributions. In the event that the
respondent had not been able to contribute through
her salary, income, work or industry, but was able to
show that she cared for and maintained the family
and the household, her efforts shall be deemed the
equivalent of the contributions made by the
petitioner. (Paterno v. Paterno, G.R. No. 213687,
2020)

It is true that Art. 147 provides that the property

acquired during the cohabitation shall be governed
by the rules on co-ownership, thus: "Each co-owner
shall have the full ownership of his part and of the
fruits and benefits pertaining thereto, and he may

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L. RIGHTS AND OBLIGATIONS BETWEEN If benefit accrued to the family before the objection,
HUSBAND AND WIFE the resulting obligation shall be enforced against the
community property.
RIGHTS AND OBLIGATIONS BETWEEEN
HUSBAND AND WIFE If benefit accrued to the family after the objection has
been made, the resulting obligation shall be enforced
Obligations of Husband and Wife (L2H2DS) against the separate property of the spouse who has
1. Live together not obtained consent. (R.A. No. 10572, 2013)
2. Observe mutual Love, respect and fidelity
3. Render mutual Help and support Note: This is without prejudice to the rights of
4. Management of the Household creditors who acted in good faith.
5. Fix the family Domicile
6. Joint responsibility for the Support of the
family (Art. 68-71, FC) M. THE FAMILY; FAMILY HOME

General Principles
Fixing the Family Domicile
General Rule: The husband and wife shall fix the Concept of Family
family domicile. The foundation of the nation and the basic social
institution which public policy cherishes and protects.
Exception: In case of disagreement, the court shall (Art. 149, FC)
decide. (Art. 69, FC)
Family Relations
Note: The Court may exempt one spouse from living 1. Between husband and wife
with the other if the latter should live abroad or there 2. Between parents and children
are other valid and compelling reasons, unless it is 3. Among other ascendants and descendants
not compatible with the solidarity of the family. 4. Among brothers and sisters, full or half
blood. (Art. 150, FC)
Sources for Support and Management of Household
From the community property Governed by: Family relations are governed by law
1. In the absence thereof, from the income or and no custom, practice or agreement destructive of
fruits of the separate properties the family shall be recognized or given effect. (Art.
2. In case of insufficiency or absence thereof, 149, FC)
from their separate properties (Art. 70-71,
FC) Effects On Legal Disputes Suit Between Family
Members
Right to Bring an Action in Court General Rule: No suit between members of the
When one of the spouses neglects his or her duties same family shall prosper unless it should appear
to the conjugal union or commits acts which tend to from the verified complaint or petition that earnest
bring danger, dishonor, or injury to the other or to the efforts toward a compromise have been made, but
family, the aggrieved party may apply to the court for that the same have failed. If it is shown that no such
relief. (Art. 72, FC) efforts were in fact made, the same case must be
dismissed.
Profession
General Rule: Either spouse may exercise any Case law states that Article 151 of the Family Code
legitimate profession, business, or activity without the must be construed strictly, it being an exception to
consent of the other. the general rule. Hence, any person having a
collateral familial relation with the plaintiff other than
Exception: The other spouse may object on valid, what is enumerated in Article 150 of the Family Code
serious, and moral grounds. In case of disagreement, is considered a stranger who, if included in a suit
the court shall decide whether: between and among family members, would render
1. The objection is proper, and unnecessary the earnest efforts requirement under
2. Benefit has accrued to the family before or Article 151. (Moreno v. Moreno, et. al, G.R. No.
after the objection (Art. 73, FC) 217744, 2018)

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Exception: These rules shall not apply to cases ten (10) years or as long as there is a minor
which may not be the subject of compromise under beneficiary (Art. 159, FC)
the Civil Code. (Art. 151, FC) 4. Only one FH can be constituted.

Allegation of “earnest efforts” is jurisdictional: If Beneficiaries of a Family Home

it is absent, the Court can dismiss the case. 1. Husband and wife, or unmarried head of the
family
BUT this rule is inapplicable in the following cases: 2. Parents (may include parent-in-laws)
(CLV FJF) 3. Ascendants
1. Civil status of persons 4. Descendants
2. Any ground for Legal separation 5. Brothers and sisters (legitimate/illegitimate)
3. Validity of marriage or legal separation living in the family home and dependent on
4. Future support head of family for support. (Art. 154, FC)
5. Jurisdiction of courts
6. Future legitime (Art. 2035, Civil Code) Qualified Property
Actual value of the family home shall not exceed, at
Spouses Jointly Sued the time of its constitution, P300,000 in urban areas
The husband and wife shall sue or be sued jointly and P200,000 in rural areas. (Art.157, FC)
except as provided by law. (§ 4, Rule 3 of the 1997
Rules of Civil Procedure) Rules regarding Subsequent Improvements of
Family Home
The term “jointly” means that the spouses shall be Any subsequent improvement of the family home by
sued together and it does not refer to the nature of the persons constituting it, its owners, or any of its
the civil liability. This is so because when the spouses beneficiaries will still be exempt from execution,
are sued for the enforcement of an obligation entered forced sale or attachment provided the following
into by them or of an obligation which redounded to conditions obtain:
the benefit of the family, they are being impleaded in 1. The actual value of the property at the time
their capacity as representatives of the absolute of its constitution does not exceed Php
community or the conjugal partnership and not as 300,000 in urban areas and Php 200,000 in
independent debtors such that the concept of joint or rural areas under Art. 157; and
solidary liability, as between them, does not arise. 2. The improvement does not result in an
(Alipio v. CA, G.R. No. 134100, 2000) increase in its value exceeding the statutory
limit.
The necessity of being jointly sued is also because
generally the spouses are joint administrators of Otherwise, the family home can be the subject of a
either the absolute community property or the forced sale, and any amount above the statutory limit
conjugal partnership of gains. However, if what is is applicable to the obligations under Art. 160. To
involved in the litigation is his or her separate and warrant the execution sale of a family home under
exclusive property, the spouse may appear alone in Art. 160, the following facts should be established:
court (Art. 111, FC). 1. There was an increase in its actual value;
2. The increase resulted from voluntary
The Family Home improvements on the property introduced by
The dwelling house where they (husband and wife or the persons constituting the family home, its
an unmarried head of the family) and their family owners or any of its beneficiaries; and
reside, and the land on which it is situated. (Art. 152, 3. The increased actual value exceeded the
FC) maximum allowable under Art. 157.
(Eulogio v. Bell, G.R. No. 186322, 2015)
Constitution of a Family House (FH):
1. Jointly by the husband and wife or by an Exempt from Execution
unmarried head of a family General Rule: The FH is exempted from:
2. From the time it is occupied as a family 1. Execution
residence so long as any of its beneficiaries 2. Forced sale
actually reside therein (Art. 153, FC) a. The right to exemption from forced
sale is a personal privilege granted
Other Rules: to the judgment debtor which must
1. FH must be owned by person constituting it be asserted before the public
2. FH must be permanent auction. Failure to do so would
3. FH continues despite death of one or more estop the party from later claiming
spouses or unmarried head of the family for on the exemption. It is a right that

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can be waived or be barred by b. Then the judgment in favor of the

laches by failure to set up and prove creditor will be paid, plus all the
the status of the property as a costs of execution
family home at the time of levy. (De c. The excess, if any, shall be
Mesa v Acero, G.R. No. 185064, delivered to the judgment debtor.
2012)
3. Attachment (Art. 153, FC)
N. PATERNITY AND FILIATION
Exception:
1. Non-payment of taxes
2. Debts incurred prior to constitution of home
1. CONCEPTS OF PATERNITY,
3. Debts secured by mortgages on the FILIATION AND LEGITIMACY
premises
4. Debts due laborers, mechanics, architects, Paternity, Filiation, and Legitimacy
builders, materialmen, and others who have Defines the relationship which exists between
rendered service or furnished materials for parents and children.
the construction of the building (Art. 155, FC)
Paternity
Note: The exemption is limited to the value allowed Determines whether one is the father of the child or
by the Family Code. not.

Sale, Alienation, Donation, Assignment, or Filiation

Encumbrance of the Family Home Determines whether one is a legitimate or illegitimate
1. The person who constituted the same must child. The filiation of children may be by nature or by
give his/her written consent. adoption. Natural filiation may be legitimate or
2. The spouse of the person who constituted illegitimate (Art. 163, FC)
the family home must also give his/her
written consent. Legitimacy
3. A majority of the beneficiaries of legal age The legitimacy or illegitimacy of a child is determined
must also give their written consent. by law and cannot be left to will of the parties.
4. In case of conflict, the court shall decide.
(Art. 158, FC) 2. LEGITIMATE AND ILLEGITIMATE
CHILDREN
Requisites for Creditor to Avail of The Right to
Execute Legitimate Children
1. He must be a judgment creditor; Those conceived or born during a valid marriage.
2. His claim is not among those excepted (Art. 164, FC).
under Art. 155; and
3. He has reasonable grounds to believe that This also includes children who are:
the family home is worth more than the 1. Conceived as a result of artificial
maximum amount fixed in (Art. 157, FC) insemination
2. Conceived or born of a voidable marriage
Procedure: before decree of annulment;
1. Creditor must file a motion in the court 3. Conceived or born before judgment of
proceeding where he seeks to obtain a writ absolute nullity under Art. 36 (psychological
of execution against the FH. incapacity) becomes final and executory;
2. Hearing on the motion where the creditor 4. Conceived or born of a subsequent marriage
must prove that the actual value of the FH under Art. 53 (failure to record the judgment,
exceeds the maximum amount fixed by the partition and distribution of properties, and
Family Code, either at the time of its delivery of children’s presumptive legitime);
constitution or as a result of improvements 5. Legally adopted; and
introduced thereafter. 6. Legitimated, conceived and born outside of
3. If creditor proves that the actual value wedlock of parents without impediment at
exceeds the maximum amount, the court will the time of conception and who
order its sale in execution. subsequently married
4. If FH is sold for more than the value allowed,
the proceeds shall be applied as follows: A child born inside a valid marriage is legitimate.
a. First, the obligations enumerated in Hence a child born inside a bigamous marriage,
Art. 155 must be paid (listed above) which is void, is considered a child under the first

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marriage, which has not been nullified or annulled, handwritten instrument and signed by the
unless the husband timely impugns the legitimacy of parent concerned.
the child.
Exception: In the absence of these pieces of
An agreement by parties as to the status of a child is evidence, the legitimate filiation may be proved by
void. Only the law determines legitimacy or (Art. 172, Par. 2, FC):
illegitimacy. Thus, the child, in the eyes of the law, is 1. Open and continuous possession of the
legitimate under the first marriage notwithstanding status of a legitimate child
the admission in pleadings by the wife and her
second husband that the child is their legitimate son. “Continuous” does not mean that the
Similarly, any declaration of the mother that her child possession of status shall continue forever
is illegitimate has no probative value. (Concepcion v. but only that it shall not be of an intermittent
CA, G.R. No. 123450, 2005) character while it continues. The possession
of such status means that the father has
Requisites for Children by Artificial Insemination treated the child as his own, directly and not
to be Considered Legitimate through others, spontaneously and without
1. The artificial insemination must be made on concealment though without publicity.
the wife (Mendoza v. CA, G.R. No. 86302, 1991)
2. Either the sperm of the husband or a third
party donor may be used There must be evidence of the manifestation
3. The artificial insemination has been of the permanent intention of the supposed
authorized or ratified by both spouses on a father to consider the child as his, by
written instrument executed and signed by continuous and clear manifestations of
them before the birth of the child parental affection and care, which cannot be
4. The written instrument is recorded in civil attributed to pure charity. Such acts must be
registry together with the birth certificate of of such a nature that they reveal not only the
the child (Art. 164, par. 2, FC) conviction of paternity, but also the apparent
5. Proof of Filiation – Family Code, arts. 172, desire to have and treat the child as such in
173 and 175 all relations in society and in life, not
accidentally, but continuously. (Jison v. CA,
a. Proof of Filiation G.R. No. 124853, 1998)

General Rule: Filiation of legitimate children is Any other means allowed by the Rules of Court
established by any of the following (Art. 172, par. 1, and special laws
FC): The father’s SSS Form E-1 satisfies the requirement
1. The record of birth appearing in the civil for proof of filiation and relationship of petitioner to
register or a final judgment the Aguilar spouses under Article 172 of the Family
Code. Filiation may be proved by an admission of
A certificate of live birth purportedly legitimate filiation in a public document or a private
identifying the putative father is not handwritten instrument and signed by the parent
competent evidence of paternity when there concerned, and such due recognition in any authentic
is no showing that the putative father had a writing is, in itself, a consummated act of
hand in the preparation of said certificate. acknowledgment of the child, and no further court
The local civil registrar has no authority to action is required. (Aguilar v. Siasat, G.R. 200169,
record the paternity of an illegitimate child on 2015)
the information of a third person. (Cabatania
v. CA, G.R. No. 124814, 2004) A thumb mark has been repeatedly considered a
valid mode of signature. Thus, the document
It is well settled that a record of birth is executed by the putative father evidencing his
merely a prima facie evidence of the facts voluntary recognition of filiation is valid. (San Agustin
contained therein. It is not conclusive v. Sales, G.R. No. 189289, 2016)
evidence of the truthfulness of the
statements made by the interested parties. Rules in Filing an Action (Art. 173 in relation to
(Benitez Badua v. CA, G.R. No. 105625, Art. 175, FC):
1994) General Rule: Only the child can bring an action to
claim legitimacy. It must be filed during his or her
2. An admission of legitimate or illegitimate lifetime.
filiation in a public document or a private

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Exception: The right may be transmitted to the heirs that sexual intercourse was not
of the child in the following cases: possible, or
1. Death during minority; c. Serious illness of the husband
2. Insanity; or which absolutely prevented
3. When the action has already been instituted intercourse
by the child 2. If it’s proved that for Biological or other
scientific reasons, the child could not have
Note: Under a & b, the heirs shall have a period of 5 been that of the husband, except in the case
years within which to institute the action. of children conceived through artificial
insemination
b. Rights of Legitimate Children 3. In case of children conceived through
Artificial insemination, when the written
Rights of Legitimate Children authorization or ratification of either parent
Greatest and preferential sum of rights is given to the was obtained through mistake, fraud,
legitimate child: violence, intimidation, or undue influence.
1. To bear the surname of the father and the (Art. 166, FC)
mother
2. To receive support from their parents, their Note: This assumes that there was written
ascendants, and in proper cases, their authorization
brothers and sisters
3. To be entitled to the legitime and other Who may impugn the Legitimacy of a Child
successional rights (Art. 147, FC) General Rule: Only the husband can impugn the
legitimacy of a child
c. Rights of Illegitimate Children
Exceptions: The heirs of the husband may impugn
the child’s filiation in the following cases: (Art. 171,
Rights of Illegitimate Children
FC)
To use the surname of the mother; to be under the
1. If the husband dies before the expiration of
parental authority and entitled to support of the
period for filing the action
mother; to have a legitime which shall consist of 1⁄2
2. If the husband dies after filing without
of the legitime of a legitimate child.
desisting
3. If the child was born after the death of the
Note: However, illegitimate children may use the
husband
surname of their father if their filiation has been
expressly recognized by the father through:
Periods for Filing of Action to Impugn
Birth certificate appearing in the civil register, or when Legitimacy
1. If the husband (or his heirs, in proper cases)
an admission in a public document, or
resides in the same city or municipality
Private handwritten instrument is made by the father where the birth took place or was recorded:
within one (1) year
2. If the husband (or his heirs) does not reside
Provided, the father has the right to institute an action
before the courts to prove non-filiation during his in the city or municipality where the child’s
lifetime. (Art. 176, FC) birth took place or was recorded but his
residence is in the Philippines: within two (2)
years.
d. Action to Impugn Legitimacy 3. If the child’s birth took place or was recorded
in the Philippines while the husband has his
Grounds to Impugn the Illegitimacy of the Child residence abroad, or vice-versa: within three
(Exclusive List) (PBA) (3) years. (Art. 170, FC)
1. It was Physically impossible for the husband
to have sexual intercourse with his wife Note: The period shall be counted from the
within the first 120 days of the 300 days knowledge of the child’s birth OR its recording in the
which immediately preceded the birth of the civil register. However, if the child’s birth was
child because of: concealed from or was unknown to the husband or
a. Physical incapacity of the husband his heirs, the period shall be counted from the
to have sexual intercourse with his discovery or knowledge of the birth of the child or of
wife the fact of registration of said birth, whichever is
b. Fact that the husband and wife earlier.
were living separately in such a way

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Both mother and child cannot impugn legitimacy of Requisites for Legitimation
the child, although in Yap v. Yap, G.R. No. 222259, 1. The child was conceived and born out of
2022, a division decision of the Supreme Court ruled wedlock.
that: 2. The parents, at the time of child’s
conception, were not disqualified by any
“In this day and age, the theory that only the father is impediment to marry each other or were
affected by the infidelity of the wife no longer holds disqualified only because either or both of
true. them were below eighteen (18).
3. There is a valid marriage subsequent to the
In this case, it would be antithetical to the best child’s birth.
interests of the child should the Petition be denied
based merely on the archaic view that only the Benefit to Descendants
husband is "directly confronted with the scandal and The legitimation of children who died before the
ridicule which the infidelity of his wife produces." The celebration of the marriage shall benefit their
best interest of the child is to allow petitioner to prove descendants. (Art. 181, FC)
and establish her true filiation.”
Legitimate ascendants & descendants are obliged to
Presumption on the Status of a Child in Case of support each other. (Art. 195[2], FC)
Successive (Valid) Marriages
In the absence of proof to the contrary: Who May Impugn Legitimacy of a Legitimated
1. Presumed to have been conceived during Child
the first marriage: If the child was born Legitimation may be impugned only by those who are
before 180 days after celebration of 2nd prejudiced in their successional rights
marriage provided it be born within 300 days 1. Legal heirs of parents
after the termination of the 1st marriage. 2. An adopted child can be a prejudiced heir of
2. Presumed to have been conceived during his adopter and his natural parents in case a
the second marriage: If the child was born child of the said parents is legitimated (Art.
after 180 days following the celebration of 182, FC)
the 2nd marriage, even though it be born
within 300 days after termination of 1st Periods for Filing of Action to Impugn
marriage. (Art. 168, FC) Legitimacy of a Legitimated Child
3. No presumption: If the child was born after Within 5 years from the time their cause of action
300 days following the termination of the first accrues which is only upon the death of the parents
marriage. In such a case, the legitimacy or of the legitimated child. (Art. 182, FC)
illegitimacy of the child shall be proved by
whoever alleges such (Art. 169, FC) a. Rights of Legitimated Children

Legitimation
Legitimation takes place by the subsequent marriage
of the child’s parents. Annulment of a voidable
marriage shall not affect the legitimation. (Art. 178,
FC)

Effect of Legitimation
1. Confers on the child the rights of legitimate
children
2. Retroacts to the time of the child’s birth
3. LEGITIMATED CHILDREN 3. The legitimation of children who died before
the celebration of the marriage shall benefit
Children who were conceived and born outside of their descendants. (Art. 179-181, FC)
wedlock of parents who, at the time of the conception 4. Action to Impugn Legitimacy – Family Code,
of the former, were not disqualified by any art. 182
impediment to marry each other, or were so
disqualified only because either or both of them were Legitimation may be impugned only by those who are
below eighteen (18) years of age, may be prejudiced in their rights within 5 years from the time
legitimated. (Art. 177, FC) the cause of action accrues. (Art. 182, FC)

Note: Parents need not die for the cause of action to

accrue.

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Rights of Legitimate/Legitimated Child answerable,

1. Use the surname of the mother if the provided that
requisites of R.A. No. 9255 are not complied in case the
with obligor has no
2. Use the surname of the father if the child’s separate
filiation has been expressly recognized by property, the
the father, either through: absolute
a. Record of birth in civil register community or
b. Father’s admission in public the conjugal
document partnership, if
c. Father’s admission in private financially
handwritten document capable, shall
advance the
RIGHTS OF LEGITIMATE/LEGITIMATED VIS-À- support, which
VIS ILLEGITIMATE CHILDREN shall be
deducted from
Bear the Use of the share of
surnames of surname of the spouse
the father and the mother, obliged upon
mother and has no the liquidation
right to use the of ACP or
surname of CPG
(See NOTE the father Preferential Preferential
below.) Exception: successional successional
They may be Successional rights in both rights in both
allowed to use Rights intestate and intestate and
the surname compulsory compulsory
of their father succession succession
only if there is
primary Note: The provision states that legitimate children
evidence of shall “principally” use the surname of the father, but
such “principally” does not mean “exclusively.” This gives
Surname
illegitimate ample room to incorporate into Article 364 the State
filiation policy of ensuring the fundamental equality of women
between them and men before the law.
but without
need of Regardless of which name the petitioner uses, his
establishing father's identity still appears in his birth certificate,
such filiation in where it will always be written, and which can be
a judicial referred to in cases where paternity is relevant.
proceeding. In (Alanis v. CA, GR. No. 216425, 2020)
such case, the
father during 4. ADOPTED CHILDREN
his lifetime,
may institute a. Domestic Administrative
an action to
prove non-
Adoption and Alternative Child
filiation. Care Act
Has the right Has right to
to receive receive Domestic Administrative Adoption and
support from support from Alternative Child Care Act (R.A. No. 11642)
their parents, both parents
their but only the Note: R.A. No. 8552 as amended by R.A. No. 9523
Support ascendants, separate were
and in proper property of the repealed, and R.A. No. 8043 was amended by R.A.
cases, their person No. 11642, which took effect on January 28, 2022.
brothers and obliged to give
sisters support shall
be

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Purpose of R.A. No. 11642 Exception: Publication can be dispensed with in the
Recognizes that the administrative adoption case of step-parent and relative adoption.
processes for the cases of legally-available children,
relative, stepchild, and adult adoptees are the most Who May File a Petition for CDCLAA
expeditious proceedings that will redound to their The Head or Executive Director of a licensed or
best interest. It provides for simpler and inexpensive accredited child-caring for child-placing agency or
domestic administrative adoption proceedings. institution managed by the government, PGU, NGO,
or provincial, city, or municipal social welfare
General Rule: Administrative proceedings development officer (SWDO) who has actual custody
of the minor may file a petition before the NACC,
Exception: When initiated under the Old Law (R.A. through the Regional Alternative Child Care Office
No. 8552 as amended by R.A. No. 9532 and R.A. No. (RACCO), for the issuance of a CDCLAA.
8043)
Note: If the child is under the custody of any other
General Rule: No child shall be a subject of individual, the child-caring for child-placing agency or
administrative adoption institution shall do so with the consent of the child's
custodian.
Exception: Unless the status of the child has been
declared legally available for adoption Petition for CDCLAA
In the form of an affidavit, subscribed and sworn to
Exception To The Exception: In cases of relatives before any person authorized by law to administer
or step-parent adoption where such declaration is not oaths which shall contain:
required. 1. Facts necessary to establish the merits of
the petition
National Authority for Child Care (NACC) 2. Circumstances surrounding the
Principal agency who has original and exclusive abandonment, neglect, voluntary
jurisdiction over all matters pertaining to alternative commitment of the child, or discovery of the
child care programs, which include domestic foundling
adoption and inter-country adoption, foster care and 3. Attached supporting documents
the declaration of a child legally available for a. Social case study report
adoption. Attached to the DSWD. b. Proof that efforts were made to
locate the parents or any known
NACC shall exercise all powers and functions relatives of the child
relating to alternative child care including, declaring a i. Written certification from a
child legally available for both domestic, local or national radio or
administrative adoption and inter-country adoption, television station that the
foster care, kinship care, family-like care, or case was aired on three (3)
residential care. different occasions
ii. Publication in one (1)
Child Legally Available for Adoption (CLAA) newspaper of general
A child in whose favor a certification was issued by circulation
the NACC that such child is legally available for iii. Police report or barangay
adoption after abandonment or neglect has been certification which states
proven through the submission of evidence, or one that despite due diligence,
who was voluntarily committed by the child's parents the child's parents could
or legal guardians not be found
iv. Returned registered mail
Certificate Declaring a Child Legally Available to the last known address
for Adoption (CDCLAA) of the parents or known
Final written administrative order issued by the relatives, if any, or in the
NACC declaring a child to be abandoned and case of a voluntarily
neglected, and committing such child to the care of committed child, the DVC
the NACC. Upon issuance, the rights of biological signed by the biological
parents, guardian, or other custodian to exercise parent
authority of the child shall cease. v. Birth certificate, if available
vi. Recent photograph of the
General Rule: CDCLAA must be published in one (1) child
newspaper of general circulation.

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Petitioners, who are both American citizens, have of the Child and Youth Welfare Code may be the
been residing and have been gainfully employed in subject of Inter-Country Adoption: Provided, That in
the Philippines since the year 2007/2009; and are case of a child who is voluntarily committed, the
thus living in the Philippines for at least three physical transfer of said child shall be made not
continuous years prior to the filing of the petition for earlier than six (6) months from the date the Deed of
adoption, as required by the Domestic Adoption Act. Voluntary Commitment was executed by the child’s
In view of the foregoing, this Court finds that biological parent/s. The prohibition against physical
petitioners' Petition for Adoption was appropriately transfer shall not apply to adoption by a relative or
filed under the Domestic Adoption Act in order for the children with special medical conditions.
appropriate Family Court or RTC to take cognizance
thereof. (Park v. Liwanag, G.R. No. 248035, 2019. Qualified Adopters
If a married person is to adopt, the rules likewise
The illegitimate child of co-petitioner in an adoption clarify that he or she shall file jointly with his or her
case is considered a relative within the first civil spouse, if any, who shall have the same
degree of consanguinity of his biological mother, in qualifications and none of the disqualifications to
the term "relatives" under Section 7(b)(iii) which adopt as prescribed in the rules. (§ 6[d], Article VIII,
provides a waiver of the requirements on residency Rules and Regulations)
and certification of an alien if married to a Filipino
citizen and seeks to adopt jointly with his/her spouse Article 184 of the Family Code provided that, as a
a relative within the fourth (4th) degree of general rule, aliens cannot adopt except in certain
consanguinity or affinity of the Filipino spouse. (In Re: special circumstances. However, under the present
Petition For Adoption of Jan Aurel, G.R. No. 205752, law, aliens can now generally adopt provided that
2019) they possess the same qualifications required of a
Filipino who is qualified to adopt and provided further
b. Inter-Country Adoption Act that they possess the required residency and
certification requirements unless they fall under the
Inter-Country Adoption Act exceptions provided by law.
(Amended by R.A. No. 11642)
All procedures, including the issuances of the Where to File Application
Certification Declaring a Child Legally Available for Filed either with the Regional Trial Court having
Adoption (CDCLAA) and the adoption process shall jurisdiction over the child, or with the Board, through
directly fall within the authority of the National an intermediate agency, whether governmental or an
Authority for Child Care (NACC). authorized and accredited agency, in the country of
the prospective adoptive parents, which application
Inter-Country Adoption shall be in accordance with the requirements as set
Socio-legal process of adopting a Filipino child by a forth in the implementing rules and regulations to be
foreign national or a Filipino Citizen permanently promulgated by the Board.
residing abroad where the petition for adoption is
filed, the supervised trial custody is undertaken, and Matching
the decree of adoption is issued in the foreign country Matching refers to the judicious pairing of the
where the applicant resided, thereby creating a applicant and the child to promote a mutually
permanent parent-child relationship between the satisfying parent-child relationship.
child and the adoptive parents.
Confidentiality
Guidelines Just like in domestic adoption, the inter- country
The law provides that the Board shall set up the adoption law provides for the confidentiality of the
guidelines to ensure that steps will be taken to place records of adoption.
the child in the Philippines before the child is placed
for inter-country adoption. The Board’s function is c. Simulated Birth Rectification Act
now undertaken by the National Authority for Child
Care (NACC). The matter of the placement of the Simulated Birth Rectification Act
child depends largely on the placement committee (Amended by R.A. No. 11642)
and the licensed local child-caring-placing- agencies All procedures, including the issuance of the
and the accredited foreign adoption agencies. Certification Declaring a Child Legally Available for
Adoption (CDCLAA) and the adoption process shall
Qualified Children directly fall within the authority of the National
Any child who has been voluntarily or involuntarily Authority for Child Care (NACC) established under
committed to the Department as dependent, Republic Act No. 11642. (§ 6, R.A. No. 11642)
abandoned, or neglected pursuant to the provisions

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Date of Effectivity Rules Regarding Support for Illegitimate

March 29, 2019. Brothers and Sisters (Whether Full or Half
Blood)
Immunity and Eligibility 1. If the one asking for support is below
Requisites: majority age, he is entitled to support from
1) Proof that such simulation of birth certificate was his illegitimate brother or sister to the full
for the best interest of the child; and extent, without any condition
2) File a petition for adoption, included therein, the 2. If the one asking for support is of majority
rectification of the simulated birth certificate within age, he is entitled to support only if his need
ten (10) years from the effectivity of the law. for support is not due to a cause imputable
to his fault or negligence. (Art. 196, FC)
Who Could Avail
Only those who made the simulated birth certificate Insofar as Philippine laws are concerned, specifically
within three (3) years before the effectivity of the law. the provisions of the Family Code on support, the
(§. 5, R.A. No. 11642) same only applies to Filipino citizens. Petitioner
cannot rely on Article 195 in demanding support from
respondent, who is a foreign citizen. However, in
O. SUPPORT view of respondent’s failure to prove the national law
of the Netherlands, the doctrine of processual
What Comprises Support presumption shall govern, which states that if the
foreign law involved is not properly pleaded and
Support consists of everything indispensable proved, our courts will presume that the foreign law
for: (METS-DC) is the same as our local or domestic or internal law.
1. Medical attendance Thus, the law in the Netherlands is presumed to be
2. Education – includes schooling (formal the same with Philippine law, which enforces the
education) or training (non-formal obligation of parents to support their children and
education) for some profession, trade or penalizing the non-compliance therewith. Moreover,
vocation, even beyond the age of majority foreign law should not be applied when its application
3. Transportation – includes expenses going to would work undeniable injustice to the citizens or
and from school, or to and from place of residents of the forum. (Norma A. Del Socorro, for
work and in behalf of her minor child, Roderigo Norjo Van
4. Sustenance Wilsem v. Ernst Johan Brinkham Van Wilsem, G.R.
5. Dwelling No. 193707, 2014)
6. Clothing (Art. 194, FC)
Source of Support
There is no distinction between natural support (basic Support for spouses, common children, and
necessities) and civil support (those beyond the basic legitimate children of either spouse For the support
necessities). of spouses, their common children, and legitimate
children of either spouse, the absolute community or
In an action for support, the court can declare a the conjugal partnership shall be liable (Art. 94[1],
marriage void to determine the rights of the child to FC, Art. 121[1], FC).
be supported. There is no need that a judicial
declaration of nullity be filed first before the lower Others obliged to give support
court can rule that the marriage was void. (De Castro For others obliged to give support, the separate
v. Assidao-De Castro, G.R. No. 160172, 2008) property of the obligor shall be answerable. Provided
that:
Who are Obliged to Give Support 1. The absolute community or the conjugal
partnership shall advance the support in
Persons Obliged to give Support to Each Other case the obligor has no separate property
to the Whole Extent: (SAPL) a. Under CPG, in case of
1. Spouses insufficiency, the conjugal
2. Legitimate Ascendants and Descendants partnership shall be liable only after
3. Parents and their Legitimate/Illegitimate the responsibilities under Art. 121
Children/Grandchildren have been covered (Art. 122, FC)
4. Legitimate Brothers and Sisters, whether full 2. Any advance/s made shall be deducted from
or half-blood (Art. 195, FC) the share of the obligor spouse upon
liquidation of the absolute community or of
the conjugal partnership (Art. 197, FC)

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Order of Support In case the recipient dies, his heirs shall not be
When two or more persons are obliged to give obliged to return what he has received in advance
support, liability shall devolve based on the following (Art. 203, FC)
order:
1. Spouse Manner of payment
2. Descendants in the nearest degree Here, the obligor has two options:
3. Ascendants in the nearest degree 1. To pay the allowance fixed; or
4. Brothers and sisters (Art. 199, FC) 2. To receive and maintain the person who has
a right to receive support in the family
Rule in case of multiple obligors with one and dwelling, unless there is a moral or legal
the same obligee obstacle. (Art. 204, FC)
1. The payment shall be divided between the
obligors in proportion to their resources (Art. Renunciation and Termination
200(1), FC) The waiver, renunciation, transmission, or
2. In case of urgency or special circumstances, compensation of the right to receive support cannot
the judge may order only one of them to still be undertaken as such acts are contrary to law,
furnish provisional support public policy, morals, or good customs pursuant to
3. Without prejudice to his or her right of Article 6 of the Civil Code.
reimbursement from the other/s (Art. 200[2],
FC) It is in violation of the of the mandatory obligation
under Article 195 and therefore, if such prescribed
Rule in case of multiple obligees with one and acts are undertaken, they shall be void pursuant to
the same obligor Article 5 of the Civil Code.
General Rule: The obligor must satisfy all the claims
Support pendente lite
Exception: In case the obligor has no sufficient Support shall be given during the proceedings for:
means to satisfy all the claims, the order above (See: 1. Legal separation
Order of Support or Art. 199, FC) shall be followed. 2. Annulment of marriage
3. Declaration of nullity of marriage
Exception To The Exception: Between the spouse
and a child subject to parental authority, the child is Who are entitled to Support Pendente Lite
preferred. (Art. 200 [3], FC) Spouses and their children

Amount of support General Rule: As between spouses, the obligation

Amount of support shall be in proportion to: of mutual support ceases after final judgement
1. The resources or means of the giver and granting the petition.
2. To the necessities of the recipient (Art. 201,
FC) Exception: This is unless, in case of legal
separation, the court orders the guilty spouse to
Amount of support shall be reduced or increased furnish support to the innocent one, specifying the
proportionately according to: terms thereof
1. Changes in the necessities of the recipient
and Source of support: The absolute community or the
2. The resources of the provider (Art. 202, FC) conjugal partnership (Art. 198, FC)

Manner and time of payment In an action for support, adultery is a good defense
and if properly proved and sustained, will defeat the
Time of payment action (Reyes v. Ines-Luciano, G.R. No. L-48219,
The obligation to give support can be demanded from 1979).
the time the person who has the right to receive the
same needs it for maintenance. However, while adultery may be a defense in an
action for personal support, that is, support of the wife
However, it shall be paid only from the date of judicial by the husband from his own funds, it is not a defense
or extrajudicial demand. when the support is to be taken from the conjugal
partnership property. (Lerma v. Court of Appeals,
Payment shall be made within the first five (5) days G.R. No. L-33352, 1974)
of each corresponding month

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Procedure in application for support pendente A: Yes, the Supreme Court held that Section 8(g) of
lite R.A. No. 9262, being a later enactment, should be
construed as laying down an exception to the general
Interlocutory nature of support pendente lite rule that retirement benefits are exempt from
In a Petition for Review under Rule 45, petitioner execution. It bears stressing that Section 8(g)
argues that the CA should not have dismissed her providing for spousal and child support, fulfills the
appeal because the arrears in support pendente lite objective of restoring the dignity of women who are
which respondent failed to pay have ceased to be victims of domestic violence and provides them
provisional and have become final. continued protection against threats to their personal
safety and security (PGMC v. AAA, G.R. No. 201292,
The SC held that it is important to emphasize the 2018).
provisional or temporary nature of support pendente
lite. It is but an incident to the main action for
declaration of nullity; and whether an order or P. PARENTAL AUTHORITY
resolution is final or interlocutory is not dependent on
compliance or non-compliance by a party to its
Concept of Parental Authority
directive, questioning the subject interlocutory orders
of the RTC, petitioner's appeal was correctly
Parental Authority (patria potestas)
dismissed by the CA.
The mass of rights and obligations which parents
have in relation to the person and property of their
Remedy
children until their emancipation, and even after,
The remedy against an interlocutory order not subject
under certain circumstances
of an appeal is a special civil action under Rule 65
provided that the interlocutory order is rendered
without or in excess of jurisdiction or with grave
abuse of discretion. Having chosen the wrong Characteristics of Parental Authority:
1. It is a natural right and duty of the parents
remedy in questioning the subject interlocutory
orders of the RTC, petitioner's appeal was correctly over the person and property of their
dismissed by the CA. (Calderon v. Roxas and CA, unemancipated children (Art. 209, FC);
2. It cannot be renounced, transferred, except
G.R. No. 185595, 2013)
in cases authorized by law (Art. 210, FC);
X prayed for support from the putative father of her 3. It is jointly exercised by the father and the
child (who is also X’s father). While the grant of mother (Art. 211, FC);
4. It is purely personal and cannot be exercised
support was contingent on ascertaining parental
relations between the child and the putative parent, it through agents; and
was unnecessary for the action for support to be 5. It is temporary.
dismissed by the appellate court. An integrated
determination of filiation is "entirely appropriate" to an Rules as to the exercise of Parental Authority
action for support. Concerned parties may be allowed 1. The father and the mother shall jointly
exercise parental authority over the persons
to present evidence to establish their cause of action,
of their common children. In case of
inclusive of their underlying claim of paternal
relations. An action for support may very well resolve disagreement, the father's decision shall
that ineluctable issue of paternity if it involves the prevail, unless there is a judicial order to the
contrary (Art. 211, FC);
same parties, is brought before a court with the
proper jurisdiction, prays to impel recognition of 2. If the child is illegitimate, parental authority
paternal relations, and invokes judicial intervention to is with the mother;
3. In case of absence or death of either parent,
do so. This also serves the interest of judicial
economy — avoiding multiplicity of suits and the parent present shall continue exercising
cushioning litigants from the vexation and costs of a parental authority (Art. 212, FC);
a. The marriage of the surviving
protracted pleading of their cause (Abella v.
parent shall not affect parental
Cabañero, G.R. No. 206647, 2017).
authority over the children, unless
Q: Can the Pension Gratuity Management Center the court appoints another person
to be the guardian of the person or
of the AFP (PGMC) be ordered to automatically
deduct a percentage from the retirement benefits property of the children
of its enlisted personnel, and to give the same 4. In case of separation of the parents, parental
authority shall be exercised by the parent
directly to the latter's lawful wife as spousal
support in compliance with a protection order designated by the Court
issued by the RTC pursuant to R.A. No. 9262?

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a. The Court shall take into account all 3. The child’s actual custodian, over 21 years
relevant considerations, especially old, unless unfit or disqualified (Art. 216, FC)
the choice of the child over 7 years
of age, unless the parent chosen is In a custody case where the father of an illegitimate
unfit child was the actual custodian of said child, the SC
b. No child under 7 years old shall be ruled that while it may be argued that Article 176 has
separated from the mother, unless effectively disqualified the father from exercising
the Court finds compelling reasons substitute parental authority under Article 216, the
to order otherwise Court cannot adopt a rigid view, without running afoul
to the overarching consideration in custody cases,
Once parental authority is vested, it cannot be waived which is the best interest of the minor. The best
except in cases of adoption, guardianship and interest demands a determination if the mother is
surrender to a children’s home or an orphan unfit; and if so, whether it is best that custody be with
institution. (Sagala-Eslao v. Court of Appeals, G.R. her father rather than her grandparents upon whom
No. 116773, 1997) the law accords a far superior right to exercise
substitute parental authority. (Masbate and Spouses
It is not enough to show that the biological mother is Masbate v. Relucio, G.R. No. 235498, 2018)
a lesbian so that she can be denied the custody of a
child not more than 7 years of age. X must also In case of foundlings, abandoned children, neglected
demonstrate that she carried on her purported children, or abused children, and other children
relationship which is not conducive to the child’s similarly situated, summary judicial proceedings shall
proper moral development. In choosing the parent to be instituted so that they may be entrusted to:
whom custody is given, the welfare of the minor 1. Heads of children’s homes
should always be the paramount consideration. The 2. Orphanages, or
“tender-age presumption” may be overcome only by 3. Similar institutions duly accredited by the
compelling evidence of the mother’s unfitness. proper government agency (Art. 217, FC)
(Pablo-Gualberto v. Gualberto, G.R. No. 154994,
2005) Special Parental Authority

The matter of custody is not permanent and People Exercising Special Parental Authority:
unalterable and can always be re-examined and 1. School
adjusted. Custody, even if previously granted by a 2. Administrators and teachers
competent court in favor of a parent, is not 3. Individual, entity, or institution engaged in
permanent. The paramount interest of the child childcare
should always be considered. (Beckett v. Sarmiento,
RTJ-12-2326, 2013) Note: Special parental authority can be exercised
only over minors while under their supervision,
A joint agreement that the father shall have custody instruction, or custody. The authority and supervision
of the child below seven is void for being contrary to also attach to all authorized activities whether inside
law. To limit this provision’s enforceability to court or outside the school, entity, or institution.
sanctioned agreements while placing private
agreements beyond its reach is to sanction a double Liability of those Exercising Special Parental
standard in custody regulation of children under Authority Over the Child
seven years old of separated parents. This effectively They are principally and solidarily liable for damages
empowers separated parents, by the simple caused by the acts or omissions of the child while
expedient of avoiding the courts, to subvert a under their supervision, instruction or custody.
legislative policy vesting to the separated mother sole However, this liability is subject to the defense that
custody of her children under seven years of age. the person exercising parental authority exercised
(Dacasin v. Dacasin, G.R. No. 168785, 2010) proper diligence. The parents and judicial guardians
of the minor or those exercising substitute parental
Substitute Parental Authority authority over the minor are subsidiarily liable for said
acts and omissions of the minor. The responsibility
Order of Substitute Parental Authority: given to an academic institution for the welfare of its
In default of parents or a judicially appointed students has been characterized by law and judicial
guardian, substitute parental authority shall be doctrine as a form of special parental authority and
exercised by: responsibility.
1. The surviving grandparent;
2. The oldest brother or sister over 21 years This responsibility has been amplified by the
old, unless unfit or disqualified; enactment of the Anti-Hazing Law, in that the failure

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by school authorities to take any action to prevent the living in their company and under their parental
offenses as provided by the law exposes them to authority. This is subject to appropriate defenses
criminal liability as accomplices in the criminal acts. provided by law (such as the exercise of diligence of
Thus, the institution and its officers cannot stand idly a good father of a family). (Libi v. IAC, G.R. No.
by in the face of patently criminal acts committed 70890, 1992).
within their sphere of responsibility. They bear the
commensurate duty to ensure that the crimes EFFECTS OF PARENTAL AUTHORITY OVER
covered by the Anti-Hazing Law are not committed. THE CHILD’S PROPERTY
(People v. Bayabos, G.R. No. 171222, 2015)
Effect of Parental Authority Upon the Property of
EFFECTS OF PARENTAL AUTHORITY the Child:
1. The father and mother shall jointly exercise
Effect of Parental Authority Over the Child’s legal guardianship over the property of the
Person minor common child without court
appointment
Parental Rights and Duties: 2. In case of disagreement, the father’s
1. To keep them in their company decision shall prevail, unless there is judicial
2. To support, educate and instruct them by order to the contrary
right precept and good example 3. If the market value of the property or the
3. To provide for their upbringing in keeping annual income of the child exceeds
with their means P50,000, the parent is required to furnish a
4. To give them love and affection, advice and bond of not less than 10% of the value of the
counsel, companionship and understanding child’s property or income
5. To provide them with moral and spiritual 4. The property of the unemancipated child
guidance, inculcate in them honesty, earned or acquired with his work or industry
integrity, self-discipline, self-reliance, or by onerous or gratuitous title shall belong
industry and thrift, stimulate their interest in to the child in ownership and shall be
civic affairs, and inspire in them compliance devoted exclusively for support and
with the duties of citizenship education, unless the title or transfer
6. To furnish them with good and wholesome provides otherwise
educational materials, supervise their a. The fruits and income of the child’s
activities, recreation and association with property shall be limited primarily to
others, protect them from bad company, and the child’s support and secondarily
prevent them from acquiring habits to the collective daily needs of the
detrimental to their health, studies and family
morals
7. To represent them in all matters affecting The parent’s authority over the estate of the ward as
their interests a legal guardian would not extend to acts of
8. To demand from them respect and encumbrance or disposition, as distinguished from
obedience acts of management or administration. (Nario v.
9. To impose discipline on them as may be Philippine American Life Ins. Co., G.R. No. L- 22796,
required under the circumstances 1967)
10. To perform such other duties as are imposed
by law upon parents and guardians (Art. A parent has no power to compromise their children’s
220, FC) claims, for a compromise has always been deemed
equivalent to an alienation, and is an act of strict
The person exercising substitute parental authority ownership that goes beyond mere administration.
shall have the same authority over the person of the (Visaya, et al. v. Suiguitan, et al., G.R. No. L-8300,
child as the parents 1956)

In no case shall the school administrator, teacher, or SUSPENSION OR TERMINATION OF PARENTAL

individual engaged in childcare and exercising AUTHORITY
special authority, inflict corporal punishment upon the
child (Art. 233, FC) Grounds for Suspension of Parental Authority:
(CHOBA)
Liability of Persons Exercising Parental 1. Conviction of parent for crime with civil
Authority interdiction (Art. 230, FC)
Civilly liable for the injuries and damages caused by 2. Treats child with excessive Harshness and
the acts or omissions of their unemancipated children cruelty

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3. Gives corrupting Orders counsel, or

example
4. Compels child to Beg
5. Subjects to or allows him to be subjected to
Acts of lasciviousness (Art. 231, FC)

Revival of Suspended Parental Authority

If under letter a: The authority is automatically
reinstated upon service of the penalty or upon pardon
or amnesty of the offender.

If under letters b-e: The suspension or deprivation

may be revoked and the parental authority revived in
a case filed for the purpose or in the same proceeding
if the court finds that the cause therefore has ceased
and will not be repeated.

Termination of Parental Authority:

1. Death of parents
2. Death of child
3. Emancipation of child
4. Parents exercising parental authority has
subjected the child or allowed him to be
subjected to sexual abuse (ground for
permanent termination) (Art. 228, FC)

Other Cases Where Parental Authority May Be

Terminated
1. Adoption of child
2. Appointment of general guardian
3. Judicial declaration of abandonment
4. Final judgment divesting parental authority
5. Judicial declaration of absence or incapacity
of person exercising parental authority (Art.
229, FC)

RETROACTIVITY OF FAMILY CODE

This code shall have retroactive effect insofar as it
does not prejudice or impair vested or acquired rights
in accordance with the Civil Code or other laws. (Art.
256, FC)

Since the petitioner and the respondent suffer no

legal impediment and exclusively lived with each
other under a void marriage, their property relation is
one of co-ownership under Article 147 of the Family
Code. The said provision finds application in this
case even if the parties were married before the
Family Code took effect by express provision of the
Family Code on its retroactive effect for as long as it
does not prejudice or impair vested or acquired rights
in accordance with the Civil Code or other laws.
(Paterno v. Paterno, G.R. No. 213687, 2020)

--end of topic--

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IV. PROPERTY, OWNERSHIP, AND ITS A. CLASSIFICATION OF PROPERTY

MODIFICATIONS
What are the Classifications of Property as to
Mobility?
TOPIC OUTLINE UNDER THE SYLLABUS a) Immovables
b) Movables
A. CLASSIFICATION OF PROPERTY
1. Immovables and Movables
2. Public Dominion; Patrimonial; Private What are the Classifications of Property as to
Ownership?
B. OWNERSHIP a) Public property
b) Private property
C. RIGHT OF ACCESSION; MOVABLES
AND IMMOVABLE What are the Classifications of Property as to
Alienability?
D. QUIETING OF TITLE a) Within the commerce of man (or which may
be the objects of contracts or judicial
E. CO-OWNERSHIP; CONDOMINIUM ACT transactions)
(R.A. NO. 4726, AS AMENDED) b) Outside the commerce of man

F. POSSESSION
What are the Classifications of Property as to
Existence?
G. ACTIONS TO RECOVER OWNERSHIP
AND POSSESSION OF REAL PROPERTY a) Present property (res existents)
1. Accion Interdictal b) Future property (res futurae)
2. Accion Publiciana
3. Accion Reinvidicatoria Note: Both present and future property may be the
subject of sale but generally not the subject of
H. EASEMENTS; EASEMENT OF RIGHT OF donation. Sale of a property that has a potential for
WAY existence (Emptio Rae Speratae) is valid, while sale
of a hope (Emptio Spei) is considered void.
I. NUISANCE
What are the Classifications of Property as to
Physical Existence?
a) Tangible or corporeal
b) Intangible or incorporeal

What are the Classifications of Property as to

Dependence?
a) Principal
b) Accessory

What are the Classifications of Property as to

Capability of Substitution?
a) Fungible: Capable of substitution by other
things of the same quality and quantity
b) Non-Fungible: Incapable of such
substitution, hence, the identical thing must
be given or returned

What are the Classifications of Property as to Use

or Enjoyment?
a) Consumable: It is used or enjoyed by being
consumed.
b) Non-consumable: It is used or enjoyed
without being consumed.

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What are the Classifications of Property as to be considered immovable property. (Leung Yee v.
Nature or Definiteness? Strong Machinery, GR No. L-11658, 1918)
a) Generic – one referring to a group or class
b) Specific – one referring to a single, unique A valid real estate mortgage can be constituted on
object the building erected on the land belonging to another.
(Prudential Bank v. Panis, GR No. L-50008, 1987)
What are the Classifications of Property as to
Whether in The Custody Of The Court Or Free? A party to a chattel mortgage is estopped from
assailing the deed as void on the ground that the
a) In “Custodia Legis” – in the custody of the
house subject of the mortgage is real property.
court
Parties are bound by their agreement to treat real
b) Free” property (Tolentino, supra, p. 7-10)
property as personal property, but not third persons.
(Tumalad v. Vicencio, GR No. L-30173, 1971)
1. IMMOVABLES AND MOVABLES
If contracting parties stipulate that a real property be
What are the Four Juridical Classifications of considered personal, they are consequently
Immovable Properties? (NIDA) (Tolentino, supra, estopped from claiming otherwise. However, third
p. 8) persons acting in good faith are not affected by the
1. by Nature stipulation or agreement characterizing the subject
2. by Incorporation machinery as personal. (Serg’s Products v. PCI
3. by Destination Leasing, GR No. 137705, 2000)
4. by Analogy
What are Immovables by INCORPORATION? –
What are those that are Immovable by NATURE? Properties that are essentially movables but attached
– What cannot be moved from place to place? to an immovable in a fixed manner to be an integral
part of it such as:
1. Land (Art. 415 (1))
2. Buildings (Art. 415 (1)) 1. Trees, plants, and growing fruits while they
3. Roads (Art. 415 (1)) are attached to the land or form an integral
4. Constructions of all kinds adhered to soil part of an immovable. (Art. 415 (2))
(Art. 415 (1)) 2. Everything attached to an immovable in a
5. Mines, quarries, and slag dumps, while the fixed manner in such a way that it cannot be
matter forms part of the bed (Art. 415 (8)) separated therefrom without breaking the
6. Waters, either running or stagnant (Art. 415 material or deterioration of the object. (Art.
(8)) 415 (3))
3. Statues, reliefs, paintings, or other objects
for use or ornamentation, placed in buildings
Note: A structure, which is merely superimposed on or on land by the owner of the immovable in
the soil, may be considered movable. Similarly, a such a way that it reveals the intention to
shovelful of land is a movable for it is no longer attach them permanently to the tenement.
adhered to the soil. (Art. 415 (4))
4. Animal houses, pigeon houses, beehives,
Note: When the minerals have been extracted, they fishponds, or breeding places of similar
become movables. nature in case their owner has placed them
or preserves them with the intention to have
Buildings are always immovable under the Code. The them permanently attached to the land and
mere fact that the parties to a contract treat the forming a permanent part of it, the animals
building as separate does not change its character as in these places are included. (Art. 415 (6))
immovable property. (Punsalan v. Lacsamana, GR
No. L-55729, 1983)
What are considered as Trees, Plants, and
Once a house is demolished, its character as an Growing Fruits?
immovable ceases. (Bicerra v. Teneza, GR No. L- Trees and plants are immovable by incorporation if
16218, 1962) they are planted through labor but are immovable by
nature if they are spontaneous products of the soil.
A mortgage of land necessarily includes buildings, in
the absence of stipulation of the improvements Note: Once cut or uprooted, they become movable
thereon. A building by itself may be mortgaged apart properties.
from the land on which it has been built. Such would
be a real estate mortgage for the building would still

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What are the requisites of the properties that are elements in carrying out the industry;
attached to an Immovable in a Fixed Manner? 4. Machines must tend Directly to meet the
1. Intent to attach permanently is essential; needs of said industry or works (utility). (Art.
2. In case of separation, the injury, breakage, 415 (5))
deterioration must be Substantial. (Art. 415
(3)) Note: If the business can still operate even without
the machines, the machines will be considered
What are the Schools of Thought in Temporary movables. The machines must essential and
Separation? important to the business.
May either be:
Machinery is immobilized if placed by the owner of a
1. Immovable if there is intent to put them back;
plant or property; not so if placed by a tenant or
or
usufructuary or any person having any temporary
2. Movable because the material fact of
right. (Davao Sawmill Co. v. Castillo, GR No. L-
incorporation is what determines its 40411, 1935)
condition.
Equipment used or intended only to repair
What are the requisites of Statues, Reliefs, equipment in a transportation business may not be
Painting, or Other Objects for Use or deemed real property. (Mindanao Bus v. City
Ornamentation? Assessor, GR No. L-17870, 1962)
1. Placed by the Owner of the immovable (not
the object) or his agent; Fertilizer Actually Used on a Piece of Land
2. Intent to attach them Permanently to the Fertilizers still in the barn or still wrapped inside a
tenements. (Art. 415 (4)) package even though already on the ground are still
movables.
What are the requisites of Animal Houses, Pigeon
Houses, Beehives, Fishponds, or Breeding Docks and Floating Structures
Places of Similar Nature? Docks and structures which, though floating, are
intended by their nature and object to remain at a
1. Placed by the Owner of the immovable or his fixed place on a river, lake, or coast are considered
agent; immovable. (Art. 415 (9))
2. Intent to attach them Permanently to the
land. (Art. 415 (6)) Note: A floating house is immovable if it is tied to a
shore or bank post and used as a residence, since
Note: The animals inside are also immovable the “waters” on which it floats, are considered
properties. immovables. Otherwise, it assumes the category of a
vessel.
What are considered as Immovables by
DESTINATION? – Properties that are movable Note further: According to the Supreme Court,
placed on an immovable for the utility it gives to the although personal property, vessels partake, to a
activity carried thereon such as: certain extent, the nature and conditions of real
1. Machinery, receptacles, instruments, or property because of their value and importance in the
implements (Art. 415 (5)) world of commerce. However, according to Art 585 of
2. Fertilizer actually used on a piece of land the Code of Commerce, vessels shall continue to be
(Art. 415 (7)) considered as personal property.
3. Docks and structures which, though floating,
are intended by their nature and object to Immovables by Analogy or by Law – Contracts for
remain at a fixed place on a river, lake, or public works and servitudes & other real rights over
coast (Art. 415 (9)) immovable property (Art. 415 (10)). These are
intangible or incorporeal rights such as the real right
over a real estate mortgage which can be sold or
What are the requisites of Machinery,
assigned by the mortgagee to a different creditor who
Receptacles, Instruments or Implements for an
will become the new mortgagee.
Industry or Works?
1. Industry or works must be Carried on inside
the building or on the land;
2. Placed by the Owner of the building or
property or his agent;
3. Machines must be Essential and principal

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MOVABLES What are the two Classifications of Movables

According to Nature?
What are considered as Movables? (SIFTOS) 1. Consumable – cannot be utilized w/o being
consumed
1. Properties not included in Art. 415. (Art. 416
(1)) This is called the “test of exclusion”. 2. Non-consumable – may be used or enjoyed
2. Immovables that are designated as movables without being consumed (Tolentino, supra,
by special provision of law. (Art. 416 (2)) p. 10)
3. Forces of nature brought under control by
science. (Art. 416 (3)) What are the two Classifications According to
4. Things which can be transported from place Intention of the Parties/Purpose? (whether it can
to place without impairment of the real be substituted by other things of same kind, quality,
property to which they are fixed (Art. 416 (4)) and quantity)
5. Obligations, which have for their object 1. Fungible (res fungibles) – an equivalent or
movables or demandable sums (credits), similar thing may be returned
obligations and actions must be legally 2. Non-fungible (res nec fungibles) – the exact
demandable - demandable sums must be same identical thing is returned; no
liquidated (this means determined or substitution is allowed (Tolentino, supra, p.
computed) (Art. 417 (1)) 10)
6. Shares of stock of agricultural, commercial &
industrial entities although they may have real What are the Tests To Determine Whether
estate (Art. 417 (2)) Property Is Real or Personal?
1. Whether the property can be transported or
What is an example of “Susceptible of carried from place to place (test by
Appropriation”? description);
An interest in business, that is, providing 2. Whether such change of location can be made
telecommunication and telephone service, is without injuring the immovable to which the
personal property since it is capable of appropriation object may be attached (test by description);
and not included in the enumeration of real and
properties. Thus, it could be the subject to theft under 3. Whether the object does not fall within any of
the RPC. (Laurel v. Abrogar, GR No. 155076, 2009) the cases enumerated in Art. 415 (test by
exclusion)
What is an example of a movable Designated by
Special Provision of Law?
Growing crops are considered immovable under Art. Note: Test by exclusion is superior to the test by
415(2) but personal property under the Chattel description.
Mortgage Law (Sibal v. Valdez, GR No. L-26278,
1927) 2. PUBLIC DOMINION, PATRIMONIAL
AND PRIVATE PROPERTY
Houses built on leased land may be treated as
personal property and be the object of a chattel
mortgage, insofar as the parties are concerned if they Public Dominion
have an agreement to treat real property as personal
property. What is considered to be property of public
dominion?
Note: This agreement will only be binding on them. It 1. Those intended for public use, such as
will not bind third parties or anyone else. (Navarro v. roads, canals, rivers, torrents, ports and
Reyes, GR No. L-18456, 1963) bridges constructed by the State, banks,
shores, roadsteads, and others of similar
What are examples of Forces of Nature? character;
Electricity, gas, rays, heat, light, oxygen, atomic
2. Those which belong to the State, without
energy, water, power etc. Electricity, the same as
being for public use, and are intended for
gas, is an article bought and sold like other personal
some public service or for the development
property and is capable of appropriation by another.
of the national wealth.
It is considered as personal property; therefore, if it is
3. Property of provinces, cities, and
stolen, the crime will be theft. (United States v.
municipalities that are for public use, which
Carlos, GR No. 6295, 1911)
consist of the provincial roads, city streets,
municipal streets, squares, fountains, public
waters, promenades, and public works for

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public service paid for by said province, city piece of paper such as an OCT or TCT. This causes
and municipality. great confusion and makes it difficult fot the general
public to understand the law on property.
What are the three kinds of properties of public
What are the KINDS OF OWNERSHIP?
dominion?
1. Full Ownership (dominium or jus in re
1. For public use – may be used by anybody propia) – includes all the rights of the owner
e.g. roads, canals, plazas 2. Naked Ownership (nuda proprietas) – where
2. For public service – may be used only by the right to the use and the fruits has been
duly authorized persons denied.
a. Naked ownership + Usufruct = Full
e.g. the president’s desk, the ownership
mayor’s computer, navy vessels, army rifles 3. Sole Ownership – ownership is vested only
3. For the development of national wealth in one person.
e.g. natural resources 4. Co-Ownership/Tenancy in Common –
ownership is vested in two or more owners;
unity of property, but plurality of owners; each
Patrimonial Property co-owner is the owner of the physical
undivided whole and at the same time, the
What are considered as patrimonial properties? absolute owner of his abstract, aliquot,
1. All other properties of the State, which are fractional, pro-rata, spiritual, metaphysical
not public, are patrimonial properties. share.
2. All properties of public dominion, when no
longer intended for public use or for public What are the Seven Rights of Ownership? (PUFA-
service, shall form part of the patrimonial DVA) (De leon, Comments and Cases on Property,
property of the state. 77, 1993)
3. All properties of provinces, cities and 1. Jus Possidendi (right to possess)
municipalities that are not for public use. a. Right to hold the thing and does not
necessarily include the right to use (e.g.,
Private Property contract of deposit)

What are considered private properties? 2. Jus Utendi (right to use and enjoy)
All properties belonging to private persons, either a. Includes the right to exclude any person
individually or collectively from the enjoyment and disposal thereof
b. Limitation: use in such a manner as not
to injure the rights of a third person

B. OWNERSHIP 3. Jus Fruendi (right to the fruits)

a. Right to the fruits
What is OWNERSHIP? b. Kinds of Fruits: (NIC)
The independent and general right of a person to the i. Natural
exclusive enjoyment and control of a thing in his ii. Industrial
possession, enjoyment, disposition, and recovery, iii. Civil
subject only to the restrictions or limitations
established by law and the rights of others. (Art. 427) 4. Jus Abutendi (right to consume)
a. Includes the right to transform or abuse
Possession is an essential attribute of ownership. or destroy by its use
Whoever owns the property has the right to possess
it. Adjudication of ownership includes the delivery of 5. Jus Disponendi (right to dispose, transfer or
possession if the defeated party has not shown any alienate)
right to possess the land independently of ownership. a. Also includes the right not to dispose,
(Pascual vs. Daquioag, GR No. 162063, 2014) transfer or alienate

What is TITLE? 6. Jus Vindicandi (right to vindicate or recover)

It is a just cause of exclusive possession or the a. Includes the right of action against the
foundation of ownership of property. In the holder and possessor of the thing in
Philippines, the big problem is that the word “title” is order to recover it
used in common or colloquial language to refer to a b. Must resort to judicial process for the

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recovery of the property (unless the SELF-HELP

doctrine of self-help is available to the Article 429. The owner or lawful possessor of a thing
owner) has the right to exclude any person from the
enjoyment and disposal thereof. For this purpose, he
7. Jus Accesionis (right to accessories) may use such force as may be reasonably necessary
to repel or prevent an actual or threatened unlawful
What are the Modes of Acquiring Ownership? physical invasion or usurpation of his property. (n)
(OLD-TIPS)
Does the Right of Self-Help allow a person to take
1. Occupation
the law into his own hands?
2. Law Yes. The doctrine of self-help in civil law is similar to
3. Donation
the doctrine of self-defense in criminal law. In both, a
4. Tradition
person has the human right to defend his private
5. Intellectual Creation
property (in the case of self-help) and the human right
6. Prescription
to defend himself (in the case of self-defense) or
7. Succession (Art. 712)
defend other people (in defense of strangers).
However, similar to self-defense, there must be
What is the definition of Mode?
unlawful aggression and one must also act
It is the process of acquiring or transferring
immediately and a reasonable amount of time must
ownership
not be allowed to lapse in order to use the doctrine of
self-help.
What is the definition of Original Mode?
There was no previous owner.
Doctrine of State of Necessity
What is Derivative Mode?
What is the doctrine of State of Necessity?
There was a previous owner. (De Leon, supra, p.
It is the principle that authorizes the destruction of a
580)
property which is less valuable to avert the danger
posed to another property of greater value. (Art. 432)
What are the Limitations on Private Property
Imposed by The State: What are the Requisites of State of Necessity?
1. Eminent Domain; 1. Destruction of property is necessary to avert
2. Police Power; an imminent danger.
3. Taxation 2. Property destroyed is less valuable than the
property saved from the imminent danger
In the exercise of eminent domain, just compensation (Art. 432)
should be computed using the values at the time of
payment judicially determined and not at the time of Does the Doctrine of State of Necessity consider
taking considering that the government and the Sentimental Value?
farmer-beneficiaries have already benefited from the Yes. The sentimental value of the property is
land although ownership thereof has not yet been considered. (Tolentino, supra, p. 68-69)
transferred in their names. However, if, in the
exercise of their judicial discretion, courts find that a What is the Measure of Rational Necessity?
strict application of said formulas is not warranted The law does not require a person acting in a state of
under the specific circumstances of the case before necessity to be free from negligence or mistake. He
them, they may deviate or depart therefrom, provided must be given the benefit of the doubt as to whether
that this departure or deviation is supported by a he employed rational means to avert the threatened
reasoned explanation grounded on the evidence on injury. (De Leon, supra, p. 99).
record. In other words, courts of law possess the
power to make a final determination of just The owner of the property sacrificed is obliged to
compensation. (J. Hernando: Land Bank of the tolerate the act of destruction but he is allowed to
Philippines v. Del Moral, Inc., G.R. No. 187307, recover reimbursement from all those who were
2020) benefited. (De leon, supra)

In case of conflict between the Right of Self-Help

Note: Eminent domain is the power. Expropriation is
and the Doctrine of State of Necessity, which one
the procedure (it is a special civil action). (Rules of
Court, Rule 67). will prevail?
In case of conflict between the right of self-help and
the doctrine of the state of necessity, the latter

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prevails because there is no unlawful aggression Note: It is not one of the modes of acquiring
when a person or group of persons act pursuant to ownership enumerated in Art. 712. (Manresa, 6th Ed.,
the right given in a state of necessity. (Tolentino, Vol. 3, p. 116; 180-182) However, despite this
supra, p. 70) statement, accession may be covered by the mode
“law” in OLD TIPS. Law is the mode of acquiring
What is a hidden treasure? ownership for accession.
Hidden treasure is any hidden and unknown deposit
of money, jewelry or other precious objects, the Is the right to accession automatic?
lawful ownership of which does not appear. Yes. The right to accession is automatic (ipso jure).
(Memorize) The owner does not need to do anything for
accession to take place. (Villanueva v. Castro, 23
To whom will a hidden treasure belong to? Phil. 54, 1912)
Hidden treasure belongs to the owner of the land,
building, or other property on which it is found. What are the Classifications of Accession?
Nevertheless, when the discovery is made on the 1. Accession Discreta
property of another, or of the State or any of its 2. Accession Continua
subdivisions, and by chance, one-half thereof shall
be allowed to the finder. If the finder is a trespasser,
What is the definition of ACCESSION DISCRETA?
he shall not be entitled to any share of the treasure. Accession Discreta is the the right of the owner to
the fruits. (Paras, Civil Code of the Philippines
If the things found be of interest to science or the arts,
Annotated Property Articles, 414-773, 211, 2016)
the State may acquire them at their just price, which
shall be divided in conformity with the rule stated. What are the kinds of ACCESSION DISCRETA?
(This is eminent domain.)
1. Natural Fruits – spontaneous products of
What is the meaning of “by chance” the soil and the young and other products of
1. Minority view: Intentionally looking for treasure animals, there is no human intervention,
(with a treasure map or special equipment) is still purely natural (Art. 442(1)).
considered “by chance”. 2. Industrial Fruits – those produced by lands
of any kind through cultivation or labor, there
2. Majority view: Intentionally looking for treasure
is human intervention, not purely natural,
(with a treasure map or special equipment) is not
i.e., artificial (Art. 442(2)).
considered “by chance”. The discovery must be
3. Civil Fruits – rent of buildings, the price of
purely accidental or fortuitous to be considered “by
lease of lands and other property and the
chance”.
amount of perpetual or life annuities or other
similar income (Art. 442(3)).
Who is a trespasser?
A trespasser is one prohibited to enter, or not given
authority to enter. A trespasser who discovers hidden General Rule: All fruits belong to the owner of a
treasure is not entitled to any share of it. thing. (Art. 441)

Note: The rules on hidden treasure will not apply to

Exceptions: (PULPA)
raw minerals. Raw minerals in their natural
unprocessed state such as gold or silver are 1. Possession in good faith by another; (Art.
considered natural resources and will be owned by 554 (1))
the State based on the Regalian Doctrine. (§ 2, 2. Usufruct; (Art. 566)
Article XII, 1987 Constitution) 3. Lease of rural lands; (Art. 1654)
4. Pledge;
5. Antichresis. (Art. 2132)

C. RIGHT OF ACCESSION What is the definition of ACCESSION

CONTINUA?
General Principles Accession Continua is the right of the owner over
anything that is attached to the principal or
What is the definition of Accession? incorporated thereto, whether naturally or artificially.
Right of the owner of a thing, real or personal, to
become the owner of everything which is produced When may it take place?
thereby, or which is incorporated or attached thereto,
either naturally or artificially. (Art. 440) 1. With respect to real property
a. Accession industrial;

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b. Accession natural 3. The person in good faith will have be granted

2. With respect to personal property most of the rights and options while the
a. Adjunction or conjunction; person in bad faith will have no rights (with a
b. Commixtion or confusion; few exceptions).
c. Specification. (Paras, supra, p. 209- 4. Bad faith of one party neutralizes the bad
210) faith of the other.
5. No one should enrich himself at the expense
Accession Industrial of another. (Paras, supra, p. 221)
6. A person who is in bad faith is always liable
for damages.
What are the principles of Accession Industrial?
1. Accessory follows the principal. What are the Two Disputable Presumptions as To
2. The incorporation or union must be intimate Improvements on Land?
that removal or separation cannot be
effected without substantial injury to either or 1. Works are made by the owner
2. Works are made at the owner’s expense (Art.
both.
446

What are the Rules when a Landowner Builder/Planter/Sower (LO-BPS) makes Constructions/Plantings
with Materials of Another (OM)? (Art. 455)

Landowner – Builder/Planter/Sower (LO-BPS) Owner of Materials (OM)

A. Good Faith Good Faith

LO-BPS can acquire the materials provided there is full OM is entitled to full payment or OM may remove the
payment. materials provided there is no substantial injury to work
done.

B. Good Faith Bad Faith

LO-BPS can acquire the materials for free and will be OM loses the materials and will be liable for damages
entitled to damages due to defects or inferior quality due to defects or inferior quality of the materials.
of the materials.

C. Bad Faith Good Faith

LO-BPS can acquire the materials provided there is full OM is entitled to full payment for the materials plus
payment plus damages. damages or OM may remove the materials even if there
is substantial injury to the work done plus damages.

D. Bad Faith Bad faith

Same as A. Same as A.

Note: This chart is from Atty. Francis H. Ampil for 2022 Bar Examination

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What are the Rules on Accession Industrial between the Landowner (LO) and a Builder/Planter/Sower
(BPS)? (Art. 448)

Landowner (LO) Builder/Planter/Sower (BPS)

A. Good Faith Good Faith
Option 1: To acquire whatever has been built, planted To receive payment for the value of the land and
or sown and payment of the necessary expenses, useful necessary, useful and luxurious expenses (if LO wants
expenses and luxurious expenses (if the LO wants to get to get luxurious improvements) with right of retention
the luxurious improvements). without any obligation to pay rent until full payment.

To remove the useful improvements provided it does

not cause any injury (this is part of right of retention).

If LO does not get the luxurious improvements, BPS

can remove the same provided there is no injury to the
land or the building.

Option 2: To oblige the BP to buy the land or the S to To purchase land at fair market value provided its value
pay rent unless the value of the land is considerably is not considerably more than that of the building or
more than that of the building or trees. trees.

If BP cannot pay purchase price of the land or the S

cannot pay the rent, LO can require BPS to remove
whatever has been built, planted or sown.

If the value of land is considerably more than that of the

building or trees, BPS cannot be compelled to buy the
land. In such case, BPS will pay reasonable rent.

If BPS cannot pay the rent, LO can eject BPS from the
land.

B. Good Faith Bad Faith

Option 1: To acquire whatever has been built, planted Loses whatever has been built, planted or sown and
or sown for free but must pay necessary expenses and liable to pay damages.
luxurious expenses (if LO wants to get the luxurious
improvements) plus damages. Entitled to payment for necessary expenses for
preservation without right of retention.

Not entitled to payment for useful expenses and cannot

remove even if removal will not cause injury.

If LO wants luxurious improvements, BPS is entitled to

payment. The value of the luxurious improvements will
be as of the date LO obtains possession.

If LO does not want luxurious improvements, BPS may

remove luxurious improvements if it will not cause
injury.

Option 2: To oblige BP to buy land or S to pay rent plus Obliged to pay for land or to pay rent plus damages
damages regardless whether the value of the land is regardless whether the value of the land is considerably
considerably more than that of the building or the trees. more than that of the building or the trees.

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Option 3: To compel BPS to remove or demolish Obliged to remove or demolish work done plus
work done plus damages. damages.

C. Bad Faith Good Faith

To pay for whatever has been built, planted or sown plus Option 1: To receive payment for whatever has been
damages. built, planted or sown plus damages.

Option 2: To remove whatever has been built, planted

or sown even if it will cause injury plus damages.

BPS has no option to acquire or buy the land.

D. Bad Faith Bad Faith

Same as A. Same as A.

Note: This chart is from Atty. Francis H. Ampil for the 2022 Bar Examinations.

What is Planting? Why is the Right of Choice given to the

Planting pertains to a perennial fact. Something that Landowner?
will grow and produce fruits year after year without 1. The right of ownership of the landowner is
having to be replanted. (Paras, supra, p. 220-221) older.
2. The accessory follows the principal.
What is Sowing?
Sowing pertains to an annual crop. Something that The right to choose between appropriating the
will grow and produce fruits every year and then will improvement or selling the land on which the
have to be planted again before it will produce fruits improvement of the builder, planter or sower stands,
again. (Paras, supra, p. 221) is given to the owner of the land (not the court)
(Ballatan v. CA, GR No. 125683, 1999)
Note: For the BPS rules to apply, the construction
must be of a permanent character. If it is of a If the LO and the BPS are both in good faith, can
transitory or temporary character, there is no true the LO choose to remove or demolish what was
accession, and the builder must remove the built, planted or sown?
construction. (Alviola v. CA, GR No. 117642, 1998) No. Removal or demolition may only be done if the
LO chooses Option 2 (which is to sell his land) and
Who has the Right of Choice? the BP cannot pay the purchase price or the S cannot
The landowner always has the right of choice. No one pay rent. Option 3 is available only when the BPS is
can choose the option except for the landowner. in bad faith.
Neither the BPS nor the court can choose the option.
If the landowner refuses to make a choice, the court The owner of the land on which improvement was
may order the landowner to make a choice. If the built by another in good faith is entitled to removal of
landowner still refuses to make a choice, the court improvement only after landowner chose to sell the
can declare the landowner in contempt until he land and the builder refused to pay for the same.
makes a choice. But the court still cannot make the Where the land’s value is greater than the
choice or choose the option. improvement, the landowner cannot compel the
builder to buy the land. A “forced lease” is then
The owner of the land on which a building has been created and the court shall fix the terms thereof in
built in good faith by another has the option to buy the case the parties disagree thereon. (Depra v. Dumlao,
building or sell his land to the builder, he cannot GR No. L-57348, 1985)
refuse to exercise either option. (Sarmiento v. Agana,
GR No. L-57288, 1984)

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If the LO is in good faith and the BPS is in bad nor its existence even proven. (Jurado, Civil Law
faith, can the LO choose to remove or demolish Reviewer, 2008)
what was built, planted or sown?
Yes. Since the BPS is in bad faith, the LO can choose A mere promise by the landowner to donate the
Option 3 which is to remove or demolish. This is an property to the builder cannot convert the latter into a
additional option given to the LO when the BPS is in builder in good faith. If at all, he is a mere possessor
bad faith. by tolerance. A person whose occupation of realty is
by tolerance of its owners is a not possessor in good
If the LO is in good faith and the BPS is in bad faith. Hence, he is not entitled to the value of the
faith, can the LO choose Option 2 if the value of improvements built thereon. (Verona Pada-Kilario v.
the land is considerably more than that of the CA, GR No. 134329, 2000)
building or the trees?
Yes. The fact that the value of the land is Improvements made prior to the annotation of the
considerably more than that of the building or the notice of lis pendens are deemed to have been made
trees is relevant only when the BPS is in good faith. in good faith. After such annotation, P can no longer
If the BPS is in bad faith, the LO can choose Option invoke the rights of a builder in good faith. Should E
2 (or to sell his land) regardless if the value of the opt to appropriate the improvements made by P, it
land is considerably more than that of the building or should only be made to pay for those improvements
the trees. at the time good faith existed to be pegged at its
current market value. (Carrascoso v. CA, GR No.
Will the Rules on Accession Industrial or the LO- 123672, 2005)
BPS charts apply if there is a contract of lease?
No. If there is a lease, Accession Industrial will not be The party asserting the status of builder in good faith,
applicable. Instead, apply Art. 1678 which states: If must substantiate their claim through preponderance
the lessee makes, in good faith, useful improvements of evidence. (Padilla, Jr. v. Malicsi, G.R. No. 201354,
which are suitable to the use for which the lease is 2016)
intended, without altering the form or substance of
the property leased, the lessor, upon termination of Q: On July 2, 2012, Spouses X sent Spouses Y a
the lease shall pay the lessee one-half of the value of letter requiring the latter to vacate the property within
the improvements at that time. Should the lessor 30 days from receipt of the letter. Spouses Y refused
refuse to reimburse said amount, the lessee may to comply. After unsuccessful barangay conciliation
remove the improvements, even though the principal proceedings, Spouses X filed a complaint for
thing may suffer damage thereby. With regard to unlawful detainer and damages against Spouses Y.
ornamental expenses, the lessee shall not be entitled Spouses X alleged that they are the owners of the
to any reimbursement, but he may remove the 28,772 sqm. lot and that they only allowed Spouses
ornamental objects, provided no damage is caused Y to possess the lot since they were close relatives
to the principal thing, and the lessor does not choose and subject to the condition that they would vacate
to retain them by paying their value at the time the the same upon demand. On the other hand, Spouses
lease is extinguished. Y claimed that, in 1979, the subject property was
purchased by the mother of Mr. X and Mrs. Y. but the
Estoppel applies even if the lessor had no title at the former, however, allegedly succeeded in registering
time. The relation of lessor and lessee was created the property solely in his name. Hence, an implied
and may be asserted not only by the original lessor, trust was allegedly created over the undivided
but also by those who succeed to his title. As lessees, hereditary share of Mrs. Y. For over 34 years,
they knew that their occupation of the premises Spouses Y alleged that they possessed and
would continue only for the life of the lease. They cultivated the lot in the concept of an owner, believing
cannot be considered as possessors nor builders in in good faith that they were co-owners of the subject
good faith. (Racaza v. Susan Realty, Inc., GR No. L- lot. In the course of their possession, they allegedly
20330, 1966); (Vda. De Bacaling v. Laguna, GR No. introduced various improvements thereon by planting
L-26694, 1973); (Santos v. CA, 221 SCRA 42, 1993) bamboos, nipa palms and coconut trees, and by
constructing fishponds. Spouses Y further claimed
Rules on How to Determine whether the BPS is in that Spouses X failed to personally appear during the
Good Faith or Bad Faith: barangay conciliation proceedings and their
Even if the lessor promised to sell, it would not make representative, Z, had no authority to appear on their
the lessee a possessor or builder in good faith so as behalf. MTC ordered Spouses Y to vacate the
to be covered by the provisions of Art. 448 of the property and to pay nominal rent until the property is
NCC, if he improves the land. The latter cannot raise fully returned. MCTC held that, although Spouses Y
the mere expectancy of ownership of the land claimed that Spouses X failed to personally appear
because the alleged promise to sell was not fulfilled during the mandatory barangay conciliation

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proceedings, the Office of the Punong Barangay What is Accretion?

nevertheless issued a Certification to File Action in Act or process by which a riparian land gradually and
accordance with Section 412 of R.A. No. 7160. imperceptibly receives alluvial deposits naturally
Further, the case was referred to the Philippine from the current of a river. (Paras, supra, p. 265)
Mediation Center (PMC) during pre-trial but the
parties still failed to amicably settle the same. RTC What are the Essential Elements of Alluvium?
and CA upheld the MTC’s decision. Are Spouses Y (GCA)
builders in good faith under Article 448 and have a 1. Deposit or accumulation of soil or sediment
right to retain the subject lot until payment of must be Gradual and imperceptible. (Art.
necessary useful and luxurious expenses? 457)
2. Accretion results from the effects or action of
A: YES. While the Supreme Court ruled that Spouses the Current of the waters of the river. (Gov’t
Y have no right to retain the lot under Article 448 as of the Phils. v. Cabangis, 53 Phil. 112, 1929)
they were aware that their tolerated possession could 3. The land where the alluvial deposits are
be terminated at any time and they could not have found must be Adjacent to the bank of a
built on the property in the concept of an owner, the river. (Art. 457)
CA and the lower courts overlooked the fact that
Spouses Y constructed improvements on the lot with Registration under the Torrens System does not
the knowledge and consent of Spouses X. In protect the riparian owner against the diminution of
exceptional cases, the Court applied Article 448 to his registered land as a result of the natural course of
instances where a builder, planter, or sower a river. (Viajar v. CA, GR No. 77294, 1998)
introduces improvements on titled land with the
knowledge and consent of the owner. While Spouses Failure to register the alluvial deposit subjected the
X merely tolerated Spouses Y’s possession, the alluvial deposit to acquisitive prescription in favor of
former never denied having knowledge of the fact third persons who had possession for 50 years.
that the latter possessed, cultivated and constructed (Reynante v. CA, GR No. 95907,1992)
various permanent improvements on the subject lot
for over 34 years. (Spouses Belvis v. Spouses Erola, Note: The natural current of a river can either
G.R. No. 239727, July 24, 2019) increase the size of registered land by giving it
alluvial deposits or decrease its size by taking away
Note: In this case, the LO had knowledge of the alluvial deposits. In either case, the Torrens System
construction and the BPS had knowledge that will not cover nor protect the alluvial deposit unless
possession was merely being tolerated. Therefore, and until it is registered. An alluvial deposit is not
both the LO and the BPS were in bad faith. When automatically registered just because it is attached to
both parties are in bad faith, their rights will be registered land. For this reason, a third person or
determined as if they are both in good faith. another person may acquire ownership over it based
on acquisitive prescription.
Accession Natural
The rules on alluvion do not apply to man-made or
What are the Principal Forms of Accession artificial accretions to lands that adjoin canals or
Natural? esteros or artificial drainage system. The accretion
1. Alluvium (Art. 457) must be natural and not artificial. (Ronquillo v. CA,
2. Avulsion (Art. 459) GR No. L-43346, 1991)
3. Change in the course of rivers (Arts. 461-
462) Lands added to the shores by accretions and alluvial
4. Formation of islands (Art. 464-465) deposits caused by the action of the sea, form part of
the public domain. When they are no longer washed
What is Alluvium? by the waters of the sea and are not necessary for
The accretion which the banks of rivers gradually the purposes of public utility, or for the establishment
receive from the effects of the current of the waters of special industries, or for the coastguard service,
and which belong to the owners of lands adjoining the the Government shall declare them to be the property
said banks. (Art. 457) of the owners of the estates adjacent thereto and as
an increment thereof.” (Lanzar v. Dir. Of Lands, GR
Note: Alluvium is also called “alluvion”. Alluvium and No. L-31934, 1977)
alluvion are the same. It can also be called “alluvial
deposits”. Alluvium or alluvion is the actual soil What is Avulsion?
deposited. Accretion is the process. Process which takes place when the current of a
river, creek, or torrent suddenly and violently
segregates from an estate on its bank a known and

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identifiable large chunk or portion and transfers it to Change in the Course of Rivers
another estate, in which case, the owner of the estate
from which the segregated portion came from, retains What are the Parts of a River?
the ownership thereof provided he removes the same 1. River bed
within two years. (Art. 459) 2. River banks
3. River itself or the water.
What are the differences between Alluvium and
Avulsion? What are the Requisites of Change in the Course
ALLUVIUM AVULSION of Rivers?
1. There must be a natural change in the
Deposit of soil is gradual Transfer of large chunk
course of the waters of the river.
and imperceptible. of land is sudden,
2. The change must be abrupt or sudden. (Art.
violent and abrupt.
461)
Soil cannot be identified. Large chunk of land is
known and identifiable. What are the Rights Of Owner of Land Occupied
by New River Course?
Deposit of soil belongs Large chunk of land 1. Right to the old river bed ipso facto in
to the riparian owner belongs to the original proportion to area lost;
upon which the alluvial owner provided he 2. Owner of adjoining land to the old river bed:
deposit is attached. removes the same right to acquire (buy) the shares of the other
within two years. owners. Value not to exceed the value of
area occupied by new bed. (Art. 461)
Reason: The owner of the adjoining land to
the old river bed is in the best position to
cultivate the old river bed.
What are the Essential Elements of Avulsion?
(CSK)
What are considered as New River banks?
1. Segregation and transfer must be caused by
Whenever a river, changing its course by natural
the Current of a river, creek or torrent. (Art. 459)
causes, opens a new bed through a private estate,
2. Segregation and transfer must be Sudden,
this bed shall become public dominion. (Art.462)
violent or abrupt. (Canas v. Tuason, 5 Phil. 688,
1929)
New river bed may itself be abandoned, due to
3. The large portion of land transported must be
natural or artificial causes authorized by law.
Known or identifiable. (Art. 459)
Owners will get back their previous property if the
Note: In avulsion, the original owner must remove or
course of the river reverts to its original place.
take back his known and identifiable chunk of land
(Sanchez v. Pascual, 11 Phil. 395, 1969)
within two years; otherwise, he will lose ownership
over it and the law will transfer ownership to the
What are the Islands Belonging to the State?
owner of the land upon which the chunk of land is
Islands, which may be formed:
found. (Art. 459)
1. On the seas within the jurisdiction of the
Philippines;
What are Uprooted Trees?
2. On lakes; and
Trees uprooted and carried away by the current of
3. On navigable or floatable rivers. (Art.464)
the waters (Art.460)
What are Islands Formed in Non-Navigable or
What are the Rules Regarding Uprooted Trees?
Non-Floatable Rivers?
The uprooted trees must be claimed by the original
1. Belong to the owners of the margins or
owner within six months; otherwise, he will lose
banks of the river nearest to each of them.
ownership and the law will transfer ownership to the
2. If EQUIDISTANT – divided longitudinally in
owner of the land upon which the uprooted trees are
halves, each riparian owner getting half
found.
(Art.465)
Note: The law only requires the original owner to
Note: River beds that dry up continue to belong to
claim the uprooted trees within six months, unlike a
the State as its property of public dominion, unless
chunk of land which the law requires the original
there is an express law that provides that the dried-
owner to remove or take it back within two years to
up riverbeds should belong to some other person.
retain ownership.
(Republic vs. Santos III, GR No. 160453, 2012)

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Accession Continua (Personal Property). 5. Pintura (painting) (Paras, supra, p. 291)

Adjunction/ Conjunction General Rule: The owner of the principal acquires

the accessory, and the owner of the principal will just
What is the definition of Adjunction or pay the owner of the accessory its value. (Art. 466)
Conjunction?
It is the process whereby two (2) movable things What is the Test To Determine Principal?
owned by different persons are joined together The principal thing is deemed to be that to which the
without bad faith, in such a way that they form a other has been united as an ornament, or for its use
single object. (Art. 466) or perfection. (Art. 467.)

What are the Requisites of If it cannot be determined: (Rule of importance and

Adjunction/Conjunction? (SID) purpose)
1. The two things belong to Different owners. 1. Greater value = If they are of unequal value
2. They form a Single object. 2. Greater volume = If they are of equal value
3. They are Inseparable; that their separation 3. Greater merits (Art. 467 & 468)
would impair their nature or result in
substantial injury to either component. When is Separation Allowed?
(Paras, supra, p. 265) 1. Separation without injury (Art.469)
2. Separation with injury – accessory is much
What are the Classes of Adjunction? (ISTEP) more precious than the principal; the owner
1. Inclusion (engraftment) of the former may demand its separation
2. Soldadura (soldering) even though the principal may suffer injury.
a. Feruminatio – same metal (Art.469)
b. Plumbatura – different metals 3. Owner of principal in bad faith. (Art.470 (2
3. Tejido (weaving)
4. Escritura (writing)

What are the Rules as to Ownership?

OWNER OF PRINCIPAL (OP) OWNER OF ACCESSORY (OA)

GOOD FAITH / BAD FAITH GOOD FAITH

Acquires the accessory May demand separation:

- indemnifies the owner of the accessory for its value If no injury will be caused
If value of accessory is greater than principal - even if damages
will be caused to principal (expenses is to the one who caused
the conjunction)

GOOD FAITH BAD FAITH

Owns the accessory Loses the thing incorporated
Right to damages Indemnify the OP for the damages OP may have suffered

BAD FAITH GOOD FAITH

Pay OA value of accessory or Right to choose between
principal and accessory be separated OP paying him its value or
PLUS That the thing belonging to him be separated even though it be
Liability for damages necessary to destroy the principal thing

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What is mixture? What are the differences among adjunction,

Takes place when two or more things belonging to mixture and specification?
different owners are mixed or combined to such extent ADJUNCTION MIXTURE SPECIFICATION
that the components lose their identity. (Art. 472)
Involves 1 thing only
IInvolves at Involves at least 2
What are its kinds? that is changed into
least 2 things things
1. Commixtion – mixture of solids something else.
2. Confusion – mixture of liquids
What are the Rules? As a rule,
1. Mixture by the will of the owners accessory As a rule, co- As a rule, accessory
a. Rights governed by stipulations follows ownership results follows principal
b. Without stipulation: each acquires a principal
right or interest in proportion to the value
of his property. (Paras, supra, p. 297) The new object may
The things
2. Mixture caused by an owner in good faith or Nature of the things or may not retain
joined retain
by chance and identities are the nature and
their nature and
a. Each acquires a right or interest in changed or lost. identity of the
identities.
proportion to the value of his property. original object
(Santos v. Bernabe, 54 Phil. 19, 1929)
3. Mixed caused by owner in bad faith
a. The actor forfeits his property;
D. QUIETING OF TITLE
b. Liable for damages. (Paras, supra, p.
297)
What is an Action to Quiet Title?
It is a special civil action which has for its purpose an
What is the definition of Specification?
adjudication that a claim of title to realty or an interest
Imparting of a new form to the material belonging to
thereon, adverse to the plaintiff, is invalid or
another; or the making of the material of another into
inoperative, or otherwise defective and hence, the
a thing of a different kind. (Art. 474)
plaintiff and those claiming under him may forever be
free from any hostile claim. (Baricuatro, Jr. vs CA, GR
What can be done when a Worker is in Good
No. 105902, 2000)
Faith?
One who, in good faith, employs the material of
An action to quiet title is essentially a common law
another in order to make a thing of a different kind
remedy grounded on equity. The trial court is tasked
shall appropriate the thing transformed as his own,
to determine the respective rights of the plaintiff and
indemnifying the owner of the material for its value.
other claimants, not only to place things in their
(Art. 474)
proper place, to make the one who has no rights to
the immovable respect and not disturb the other, but
What may be done when the Material is of Greater
also for the benefit of both, so that he who has the
Value Than the Transformed Thing?
right would see every cloud of doubt over the
The owner of the material may:
property dissipated, and he could afterwards without
1. Appropriate the new thing to himself, after
fear introduce the improvements he may desire, to
paying indemnity for the value of the work;
use, and even to abuse the property as he deems
or
best. But for an action to quiet title to prosper, two
2. Demand indemnity for the material. (Art.
indispensable requisites must concur, namely: (1) the
474)
plaintiff has a legal or an equitable title to or interest
in the real property; and (2) the deed, claim,
What may be done when the Worker is in Bad
encumbrance, or proceeding claimed to be casting
Faith?
cloud on his title must be shown to be in fact invalid
The owner of the material shall have the right to:
or inoperative despite its prima facie appearance of
1. Appropriate the work to himself, without
validity.
paying anything to the worker; or
2. Demand of the latter that he indemnifies him
for the value of the material and the Articles 476 and 477 of the Civil Code state:
damages he may have suffered. (Art. 474) Article 476. Whenever there is a cloud on title to real
property or any interest therein, by reason of any
Note: The owner of the material cannot appropriate instrument, record, claim, encumbrance or
the work in case its value, for artistic or scientific proceeding which is apparently valid or effective but
reasons, is considerably more than that of the is in truth and in fact invalid, ineffective, voidable, or
material. (Art. 474) unenforceable, and may be prejudicial to said title, an

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action may be brought to remove such cloud or to but will bind third persons or the whole world. An
quiet the title. example of an action quasi in rem is an action to quiet
title.
An action may also be brought to prevent a cloud
What are the Classifications of Actions to Quiet
from being cast upon title to real property or any
Title?
interest therein.
1. Remedial action – to remove cloud on title
2. Preventive action – to prevent the casting of
Article 477. The plaintiff must have legal or equitable a (threatened) cloud on the title. (Art. 476)
title to, or interest in the real property which is the
subject matter of the action. He need not be in Requisites
possession of said property.
What Are The Requisites of an Action to Quiet
Title? (TICI)
In an action for quieting of title, the plaintiff has the 1. Plaintiff must have a legal or equitable Title or
burden to show by preponderance of evidence that Interest in the real property (Art. 477)
he has a legal and equitable title to or interest in the 2. The deed, claim, encumbrance, or
real property subject of the action. Tax declarations proceeding claimed to be casting Cloud on
and receipts are not conclusive evidence of his title must be shown to be in fact Invalid or
ownership or of the right to possess land when not ineffective despite its prima facie appearance
supported by other evidence. Mere allegation of of validity or effectivity (Art. 476)
open, continuous, and exclusive possession of the
property in dispute without substantiation does not
meet the requirements of the law. (J. Hernando: Q: Corp A owns a manufacturing plant for pipes
Viloria v. Heirs of Gaetos, G.R. N0. 206240, 2021) located on a 50,000 sqm land. Corp A’s plant is
covered by a valid certificate of title. Mr. X
contends that Corp A’s plant site encroaches on
It is clear that legal or equitable title to, or interest in, his land and showed his own title over it. Corp A
the real property subject matter of the action must be found that the title of Mr. X is spurious and so
established by the plaintiffs as a prerequisite in order filed an action for quieting of title. Will the action
for the action to quiet title to prosper. (J. Hernando: to quiet title prosper?
Viloria v. Heirs of Gaetos, G.R. No. 206240, 2021)
A: YES. For an action to quiet title to prosper, the
Moreover, an action to quiet title puts an end to plaintiff must have a legal or equitable title or interest
vexatious litigation; plaintiff asserts his own estate in the subject real property; and the deed, claim,
and generally declares that defendant’s claim is encumbrance, or proceeding claimed to be casting a
without foundation. (Baricuatro, Jr. v. CA, GR No. cloud on his title must be shown to be in fact invalid
105902, 2000) or inoperative despite its prima facie appearance of
validity or legal efficacy. Corp A holds a legal title over
Note: An action to quiet title only involves real or the plant site. Mr. X’s claim over the same appears to
immovable property. It does not involve personal or valid by virtue of title but is in fact spurious. The
movable property. It is a special civil action found in indispensable requisites for an action to quiet title are
Rule 63, sec. 2 (declaratory relief and other similar complete. (Filipinas Eslon Manufacturing Corp. v.
remedies). It is one of the “other similar remedies” Heirs of Llanes, G.R. No. May 29, 2019)
such as an action for reformation of an instrument.
Q: X is the registered owner of a parcel of land
Note further: An action to quiet title may not be evidenced by a TCT issued in his name. X had
brought for the purpose of settling boundary disputes. been in open and continuous possession of the
parcel of land since 1966 until his demise in 1987
Note: An action to quiet title is imprescriptible if the when his heirs took possession of the same. In
plaintiff is in possession of the property; otherwise, 2006, however, Corp A filed a Complaint for
the plaintiff must file the complaint before the Forcible Entry against X’s heirs, claiming that it
defendant acquires ownership over the property by is the registered owner of the parcel of land
acquisitive prescription. (Berico v. CA, GR NO. evidenced by three Transfer Certificate of Titles
96306, 1993) (TCTs) and a chronicled chain of transactions
which led to its acquisition of the parcel of land
What is an action quasi in rem? from Corp B. X’s heirs filed a Complaint for
These are complaints filed against a particular Quieting of Title against Corp A, wherein it
person or persons with respect to the res (the thing); alleged that Corp A’s titles were fictitious and

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void as the TCTs in the name of Corp B, from the knowledge of the other co-owners can be
whom Corp A bought the parcel of land, were categorized as possession by stealth and W’s act of
products of a reconstitution proceeding which getting only the consent of one co-owner can be
did not occur in the first place. To prove their considered as “strategy.” Thus, it would be a case of
legal or equitable title over the parcel of land, X’s forcible entry. (Cruz v. Catapang, GR No. 164110,
heirs also presented, among others, a TCT issued 2008)
in the name of X and a Tax Declaration. May the
Complaint for Quieting of Title filed by X’s heirs Prior to partition, a sale of a definite portion of
against Corp A prosper? common property requires the consent of all co-
owners because it operates to partition the land with
A: NO. The two requisites to establish a Complaint respect to the co-owner selling his or her share. The
for Quieting of Title were not complied with, namely: co-owner or seller is already marking which portion
(a) the plaintiff must have a legal title (i.e., registered should redound to his or her autonomous ownership
ownership), equitable title (i.e., beneficial ownership), upon future partition. In other words, a co-owner
or interest in the property subject of the Complaint; cannot sell a definite portion of a land without the
and (b) the deed, claim, encumbrance, or proceeding consent from his or her co-owners. This is based on
allegedly casting doubt over one’s title must be the principle that a sale of a portion of the property is
proven to be in truth invalid, void, or inoperative considered an alteration of the thing owned in
despite the prima facie appearance of validity. X’s common, and, therefore, requires the unanimous
heirs also failed to substantiate their allegation that consent of the other co--owners. Of course, the law
Corp A’s TCTs are spurious. (J. Hernando: Heirs of allows a co-owner to alienate an undivided interest of
Eñano v. San Pedro Cineplex Properties, Inc., G.R. the co-owned property. (J. Hernando: Heirs of
No. 236619, 2022) Marquez v. Heirs of Hernandez, GR No. 236826,
2022)

E. CO-OWNERSHIP Any co-owner may file an action under Article 487 not
only against a third person but also against another
co-owner who takes exclusive possession and
What is Co-Ownership?
A co-ownership exists whenever there is an asserts exclusive ownership of the property. (De
undivided thing or right that belongs to two or more Guia vs. CA, GR No. 120864, 2003)
persons. (Art. 484)
A co-owner can sell an undivided part of the property
What are the Elements of Co-ownership? (PUI) co-owned, but its validity is limited to his share.
Hence, there is no need for consent of the other co-
1. Plurality of subjects – many owners
owners as to said sale. (Arambulo v. Nolasco, GR
2. Object of ownership must be Undivided
3. Recognition of Ideal shares; no one is an No. 189420, 2014) The same rule applies in a
mortgage by a co-owner of his share. (Rural Bank of
owner of a specific portion of the physical
Cabadbaran v. Nulecio-Yap, GR No. 178451, 2014)
property until it is partitioned but every co-
owner is the absolute owner of his abstract,
According to Art. 493 of the Civil Code, “each co-
ideal, aliquot, fractional, proportionate, pro-
owner shall have the full ownership of his part and of
rata, spiritual, metaphysical share.
the fruits and benefits pertaining thereto, and he may
Sources of Co-Ownership therefore alienate, assign or mortgage it, xxx, except
when personal rights are involved. But the effect of
How is Co-ownership Created? (C-FOLDS)
the alienation or the mortgage, with respect to the co-
1. Law owners, shall be limited to the portion which may be
2. Contracts allotted to him in the division upon the termination of
3. Succession the co-ownership.” Hence, the effect of the alienation
4. Fortuitous event/chance (i.e., commixtion) or the mortgage with respect to the co-owners, shall
5. Occupancy (i.e., 2 persons catch a wild be limited, by mandate of the same article, to the
animal) portion which may be allotted to him in the division
6. Donation (partition) upon the termination of the co-ownership.
A co-owner has no right to sell or alienate a concrete,
Cases: specific, or determinate part of the thing in common
A co-owner cannot give valid consent to another to to the exclusion of the other co-owners because his
build a house on co-owned property as such an act right over the thing is represented by an abstract or
would be tantamount to making an alteration in the ideal portion without any physical adjudication. (Ulay
thing owned in common. Entry into the land without v. Bustamante, GR 231721 & 231722)

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Articles 493-495 and 498 of the Civil Code, in sum, Redemption

allow for alienation by a co-owner of his or her share What is the Right of Redemption?
in the co-owned property, termination of the co- The right of redemption is the right of a co-owner to
ownership, and partition of the property. It is a basic recover or get back the abstract, ideal, aliquot,
principle in the law of co-ownership that no individual fractional, pro-rata or spiritual share sold by another
co-owner can claim title to any definite (physical) co-owner to a stranger or third party. It is an act of
portion of the land or thing owned in common until the preservation for the benefit of all co-owners.
partition thereof. Prior to that time, all that the co- Therefore, the co-owner who redeems during the
owner has is an ideal, or abstract, quota or redemption period may demand reimbursement from
proportionate share in the entire thing owned in the other co-owners the latter’s share in the
common by all the co-owners. (J. Hernando: Silva v. redemption price or cost of redemption.
Lo, G.R. No. 206667, 2021)
Note: To be exercised within 30 days from written
We are not unaware of the basic principle in the law notice of sale of undivided share of another co-owner
of co-ownership, both under the present Civil Code to a stranger.
as in the Code of 1889, that no individual co-owner
can claim title to any definite portion of the land or Redemption of the whole property by a co-owner
thing owned in common until the partition thereof. does not vest in him sole ownership over said
Prior to that time, all that the co-owner has is an ideal, property. Redemption within the period prescribed by
or abstract, quota or proportionate share in the entire law by a co-owner will inure to the benefit of all co-
thing owned in common by all the co-owners. (J. owners. Hence, the co-ownership will continue to
Hernando: Silva v. Lo, G.R. No. 206667, 2021) exist. (Mariano v. CA, GR No. L-51283, 1989)

Co-owners have the right to alienate their pro indiviso Note: If the redemption involves mortgaged co-
shares even without the knowledge or consent of owned property, the redemption must be done before
another co-owner as long as the alienation covers the redemption period expires. The expiration of the
only their share in the common property. The effect, redemption period terminates the co-ownership and
however, of the alienation with respect to the co- there will be nothing anymore to “redeem” for the
owners shall be limited only to the portion which may benefit of the co-ownership. In other words, if the
be allotted to him in the division upon the termination redemption happens after the redemption period had
of the co-ownership. (Tabasondra v. Constantino, expired, there is actually no “redemption” but an
GR No. 196403, 2016) ordinary straight sale between the “redeeming co-
owner” (as buyer) and the creditor -mortgagee (as
A co-owner has no right to sell or alienate a concrete, seller).
specific or determinate part of the thing owned in
common, because his right over the thing is Partition
represented by an aliquot or ideal portion without any General Rule: Demandable Anytime
physical adjudication. (Cabrera v. Ysaac G.R. No.
166790, 2014) No co-owner shall be obliged to remain in the co-
ownership. Each co-owner may at any time demand
Rules Regarding Consent And Approval the partition of the thing owned in common, insofar
What are the rules regarding consent and approval? as his share is concerned. (Art. 494)
a. For acts of preservation, this can be done at
the will of one co-owner but he must give Note: A special civil action for judicial partition has no
notice to the other co-owners, if practicable. prescriptive period. It is imprescriptible. A petition for
(Art. 489) judicial partition may be filed at any time. (Bailon –
b. For acts of management, this can be done Casilao v. CA)
by the co-owners who have the controlling
interest (financial majority not numerical Exception: A co-owner may not demand partition:
majority). (Art. 492) (UNLAD)
c. For acts of alteration, this requires
unanimous consent of all the co-owners. 1. If there is an Agreement not to partition (for
(Art. 491) a period not exceeding 10 years, renewable)
(Art. 494)
2. When partition is prohibited by a Donor or
testator (for a period not exceeding 20
years) (Art. 494)
3. When partition is prohibited by Law. (Art.
494)

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4. When the property is an indivisible thing or contribute in the payment of the purchase price of the
when a physical partition would render the subject properties, it does not necessarily mean that
property Unserviceable, but in this case, the he could not become a co-owner of the subject
property may be allotted to one of the co- properties who can compel partition. According to
owners, who shall indemnify the others, or it Sec. 1, Rule 69 of the Rules of Court, in relation to
will be sold, and the proceeds distributed. Articles 484 and 488 of the Civil Code, a person may
Examples: A car or a computer or a pencil. exercise the right to compel the partition of real estate
(Art. 495) if he/she sets forth in his/her complaint the nature and
extent of his title and subsequently proves the same.
What are the Requisites of Repudiation in order The law does not make a distinction as to how the co-
that a Co-Owner may Acquire Sole Ownership owner derived his/her title, may it be through gratuity
based on Acquisitive Prescription? (UKEO) or through onerous consideration. (Logrosa v. Sps.
1. Unequivocal acts of repudiation of the co- Azares, G.R. No. 217611, March 27, 2019)
ownership amounting to an ouster of the
other co-owners Petitioner's recourse of filing a complaint for
2. Positive acts of repudiation have been made nullification of sale and recovery of ownership is not
Known to the other co-owners the proper action. This Court explained in Bailon-
3. Evidence is clear and conclusive Casilao v. Court of Appeals that the appropriate
4. Open, adverse, hostile, public, notorious, remedy is not a nullification of the sale or for the
continuous, possession for the period of time recovery of the thing owned in common but a division
required by acquisitive prescription. (Santos of the common property. To demand a partition or
v. Heirs of Crisostomo, 41 Phil. 342, 1921) division of the common property is in accord with
Article 494 of the Civil Code, that is, no co-owner
Q: A filed a complaint for partition of 8 parcels of shall be obliged to remain in the co-ownership and
land against B. TCTs all indicate that A and B are that each co-owner may demand at any time partition
co-owners of the properties. A based his right of the thing owned in common insofar as his or her
under Article 494 of the New Civil Code. B alleged share is concerned. (J. Hernando: Reyes v. Sps.
that while the TCTs reflected A’s name, he was Garcia, G.R. No. 225159, 2022)
not a co-owner because he never contributed to
the acquisition and for the maintenance or taxes SUMMARY:
of the property. Is A entitled to the partition of the 1. Co-owners share in the benefits and charges
property. in proportion to their respective interest; any
stipulation to the contrary is void. (Art. 485)
A: Yes. A is a co-owner. Public documents pointing 2. Payment of necessary expenses such as
to the existence of co-ownership carry with it the legal taxes – this may be done by one co-owner
presumption of regularity, thus the opposing party since this is an act of preservation; but he
has the burden of proving with clear, convincing and must give notice to the other co-owners if
persuasive evidence to assail the co-ownership. practicable. (Art. 489)
Here, eight certificates of title all clearly and 3. Payment of useful and luxurious expenses –
unequivocally identify petitioner A as one of the co- this requires the consent of the co-owners
owners of the subject properties. In land registration, who have the controlling interest (financial
the certificate of title serves as evidence of an majority not numerical majority) since this is
indefeasible and incontrovertible title to the property an act of administration or management; but
in favor of the person whose name appears therein. any co-owner may seek court intervention or
It is the best proof of ownership of a parcel of land. appointment of administrator if prejudicial to
the co-ownership. (Art. 492)
Further, one's assertion of ownership is further 4. The consent of all co-owners or unanimous
strengthened and buttressed by the fact of consent is needed for acts of alteration; but a
possession coupled with the lack of opposition to co-owner may seek court assistance if the
such possession. Here, A possesses a portion of the failure to obtain unanimous consent is
subject property with no opposition from the other manifestly prejudicial. (Art. 491)
parties, aside from B, who denied petitioner A’s 5. As a general rule, acquisitive prescription is
status as co-owner only after more than two decades not available to any co-owner to acquire sole
since the execution of the Deed of Absolute Sale, and and exclusive ownership over the entire co-
only as a mere reaction to the Complaint for Partition owned property regardless how long his
filed by A. period of possession may be. This is because
the posession of a co-owner is not adverse or
Assuming for argument's sake that A did not hostile to the other other co-owners. (Art.
494) However, as an exception, a co-owner

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may acquire sole and exclusive ownership or parts of floors) in a building or buildings and such
based on acquisitive prescription if the accessories as may be appended thereto.
following requisites are present: What is a common area?
a) A clear and unequivocal repudiation In a condominium, common areas and facilities are
of the co-ownership; “portions of condominium property not included in the
b) The clear and unequivocal act of units,’’
repudiation must be made known to
the other co-owners Note: The land and the common areas (such as
c) The evidence must be clear and lobby, elevator, gym and swimming pool) are under
convincing and co-ownership among the unit owners. However, the
d. There must be open, adverse, hostile, unit itself is solely and exclusively owned by the unit
public, notorious, continuous, owner who have all the 7 rights of ownership over his
possession for the period of time condominium unit.
required by acquisitive prescription.
Note: In a condominium corporation, a condominium
6. Co-owners cannot ask for physical division if unit and the share of stock are linked. A unit owner is
it would render the thing unserviceable (thing always a stockholder and a stockholder is always a
is indivisible such as a car or computer); but unit owner. Therefore, a condominium unit cannot be
they can allow one co-owner to buy the thing sold without the share of stock and the share of stock
and pay them in cash or they can just sell the cannot be sold without the condominium unit.
thing to a third party and distribute the cash
among themselves. (Art. 495) What is the Master Deed? (Section 4,
8. After partition, duty to render mutual Condominium Act)
accounting of benefits and reimbursements A master deed is a document which contains the
for expenses. (Art. 500) following information:
9. The special civil action for judicial partition is (a) Description of the land on which the
imprescriptible. There is no prescriptive building or buildings and improvements are
period for judical partition. or are to be located;
10. An agreement to keep a thing undivided (or
prohibiting a partition) is valid. The maximum term (b) Description of the building or buildings,
is 10 years, renewable. If it is the donor or testator stating the number of stories and
who prohibits partition, the maximum term is 20 basements, the number of units and their
years. accessories, if any;

(c) Description of the common areas and

The Condominium Act facilities;

What is a condominium? (d) A statement of the exact nature of the

A condominium is an interest in real property interest acquired or to be acquired by the
consisting of a separate interest in a unit in a purchaser in the separate units and in the
residential, industrial or commercial building and an common areas of the condominium project.
undivided interest in common directly or indirectly, in Where title to or the appurtenant interests in
the land on which it is located and in other common the common areas is or is to be held by a
areas of the building. condominium corporation, a statement to
this effect shall be included;
What is a condominium corporation?
(e) Statement of the purposes for which the
It is a corporation which owns the title to the common
building or buildings and each of the units
areas, including the land, or the appurtenant interests
are intended or restricted as to use;
in such areas. Holders of separate interests shall
automatically be members or shareholders, to the
(f) A certificate of the registered owner of the
exclusion of others, in proportion to the appurtenant
property, if he is other than those executing
interest of their respective units in the common areas.
the master deed, as well as of all registered
holders of any lien or encumbrance on the
What is a condominium unit? property, that they consent to the
A condominium unit means a part of the registration of the deed;
condominium project intended for any type of
independent use or ownership, including one or more (g) The following plans shall be appended to
rooms or spaces located in one or more floors (or part the deed as integral parts thereof:

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(1) A survey plan of the land (9) For a power of attorney to the
included in the project, unless a management body to sell the entire project
survey plan of the same property for the benefit of all of the owners thereof
had previously bee filed in said when partition of the project may be
office; authorized under Section 8 of this Act, which
said power shall be binding upon all of the
(2) A diagrammatic floor plan of the condominium owners regardless of whether
building or buildings in the project, they assume the obligations of the
in sufficient detail to identify each restrictions or not.
unit, its relative location and
approximate dimensions; (b) The manner and procedure for amending such
restrictions: Provided, That the vote of not less than
(h) Any reasonable restriction not contrary to a majority in interest of the owners is obtained.
law, morals or public policy regarding the
right of any condominium owner to alienate (c) For independent audit of the accounts of the
or dispose of his condominium.£a⩊phi£ management body;

What is the Declaration or Deed of Restrictions? (d) For reasonable assessments to meet authorized
(a) As to any such management body; expenditures, each condominium unit to be assessed
separately for its share of such expenses in
(1) For the powers thereof, including power proportion (unless otherwise provided) to its owners
to enforce the provisions of the declarations fractional interest in any common areas;
of restrictions;
(e) For the subordination of the liens securing such
(2) For maintenance of insurance policies, assessments to other liens either generally or
insuring condominium owners against loss specifically described;
by fire, casualty, liability, workmen's
compensation and other insurable risks, and (f) For conditions, other than those provided for in
for bonding of the members of any Sections eight and thirteen of this Act, upon which
management body; partition of the project and dissolution of the
condominium corporation may be made. Such right
(3) Provisions for maintenance, utility, to partition or dissolution may be conditioned upon
gardening and other services benefiting the failure of the condominium owners to rebuild within a
common areas, for the employment of certain period or upon specified inadequacy of
personnel necessary for the operation of the insurance proceeds, or upon specified percentage of
building, and legal, accounting and other damage to the building, or upon a decision of an
professional and technical services; arbitrator, or upon any other reasonable condition.

(4) For purchase of materials, supplies and

the like needed by the common areas; F. POSSESSION
(5) For payment of taxes and special What is possession?
assessments which would be a lien upon the Possession is the holding of a thing or enjoyment of
entire project or common areas, and for a right. (Art. 523)
discharge of any lien or encumbrance levied
against the entire project or the common What are the 2 kinds of Possession
areas;
1. Right TO possession (jus possidendi)
Possession de facto - right or incident of
(6) For reconstruction of any portion or
ownership Example: The computer is being
portions of any damage to or destruction of
physically held and used by a law student.
the project;
The law student has jus possidendi or
physical or material possession.
(7) The manner for delegation of its powers;
2. Right OF possession (jus possessionis)
Possession de jure – this is an
(8) For entry by its officers and agents into
independent right of itself, independent of
any unit when necessary in connection with
ownership. Example: The law student goes
the maintenance or construction for which
to the comfort room and leaves the computer
such body is responsible;
in the classroom. The law student still has

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jus possessionis or the real right of 2. Possession in the Concept of an Owner

possession.
Possession in the concept of an owner (Adverse
What are the elements of possession? (OIR) Possession) – possession by the owner himself or
1. Occupancy or control of the thing or right – adverse possessor. This may be converted into
actual or constructive (corpus) ownership based on acquisitive prescription:
2. Intent to Possess (animus possidendi) - Movables: 4 or 8 years
3. Must be by virtue of one’s own Right - Immovables:10 or 30 years

Note: Registered land may not be acquired based on

What is the difference between possession and acquisitive prescription. The registered owner is
ownership? protected against acquisitive prescription.
Possession and ownership are distinct legal
concepts. Ownership confers certain rights to the
owner, among which are the rights to enjoy the thing 3. Relevance of Good Faith and Bad Faith
owned and to exclude other persons from possession
thereof. On the other hand, possession is defined Who is a possessor in good faith?
as the holding of a thing or the enjoyment of a Possessor in Good Faith is one who is not aware
right. Literally, to possess means to actually and that there exists a flaw in the title or mode of
physically occupy a thing with or without a right. acquisition which invalidates it. (Art. 526)
Thus, a person may be declared an owner, but he
may not be entitled to possession. (Heirs of Roman
What is a possessor in bad faith?
Soriano v. CA, GR No. 128177, 2001)
Possessor in Bad Faith is one who is aware that
Note: A person can have ownership without there exists in his title or mode of acquisition some
possession (Example: lessor). A person can also flaw or defect that invalidates it. (Art. 526)
have possession without ownership (Example:
lessee). When does bad faith begin?
A possessor in good faith may become possessor in
What are the 4 degrees of possession?
bad faith when he becomes aware of the flaw in his
1. Possession without title and in violation of title or mode of acquisition.
right of owner (grammatical degree)
Ex. possession of a thief
2. Possession with juridical title (juridical Is it possible for a mistake on a doubtful or
possession); juridical relation exists difficult question of law to be the basis of
between the possessor and the owner possession in good faith?
Ex. that of a lessee, pledge, Yes. A mistake upon a doubtful/difficult question of
depositary, usufructuary law may be the basis of good faith (Art. 526; Kasilag
v. Rodriguez, GR No. 46623, 1939)
3. Possession with just title but not from true
owner, such that of a possessor in good faith
(possessory right). (This is the possession Who has the burden of proof to prove bad faith?
referred to in acquisitive prescription.) Good faith is always presumed. Burden of proof lies
Ex. When a buyer acquires a thing on the one alleging bad faith. The belief must be a
from the seller who was not the true reasonable, not capricious, one.
owner or could not transmit rights.
4. Possession with title in fee simple or with Possession is presumed to be enjoyed in the same
title of dominion character in which it is acquired, until the contrary is
This is the highest degree of proved. (Art. 527)
possession.

1. Possession in the Concept of a Holder What are the effects of possession in bad faith of
a decedent on the heir/s?
Possession in the concept of holder – possessor General Rule: The heirs shall not suffer the
acknowledges that another is an owner (e.g., consequences of the wrongful possession of the
usufruct, lessee, depositary, bailee in commodatum) decedent (bad faith is personal)

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Exception: When the heirs become aware of the

flaws affecting the decedent’s title

What are the legal presumptions in favor of

possessor?
1. Possessor who recovers possession
unjustly lost shall be deemed to have
enjoyed it without interruption. (Art. 561)
This is important for purposes of acquisitive
prescription.
2. Legal presumption of just title (prima facie)
and he is not obliged to show or prove it (Art.
541)
3. Possession of real property presumes that
movables are included. (Art. 542)
4. Co-possessor deemed to have exclusively
possessed part which may be allotted to
him; interruption in whole or in part shall be
to the prejudice of all. (Art. 543)

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RULES ON FRUITS

Kinds of Fruits Possessor in Good Faith Possessor in Bad Faith

1. Civil Fruits Entitled to fruits from start of Not entitled to fruits.

possession until legal interruption.
Must pay damages as rental from time
possession started until possession is
finally defeated.

2.Natural/Industrial
Fruits
a. Gathered Right to retain fruits. Must account for fruits and return value
of: (i) fruits actually received and (ii)
fruits which the legal possessor could
have received with due care and
diligence.

Must pay damages as reasonable rent

for the term of possession.

But entitled to necessary expenses for

preservation, cultivation and gathering
of the fruits.

b. Pending Owner has 2 options: No rights, not even reimbursement of

expenses for cultivation (because by
Option 1: Pro-rating (based on right of accession, all fruits belong to
period of possession) between owner without need to pay indemnity).
possessor and owner of: (i) Must pay damages as reasonable rent
expenses; (ii) net harvest; and (iii) for the term of possession.
charges.

Option 2: To allow possessor to stay

in possession until after all fruits are
gathered (which shall serve as the
indemnity for expenses).

Note: This chart is from Atty. Francis H. Ampil for 2022 Bar Examinations

What are the rules regarding co-possession? posssession. If the periods of possession are the
Possession as a fact cannot be recognized at the same, the one who presents a title. If no one has a
same time in two different personalities except in co- title or everyone presents a title, then the property
possession. In co-possession, the present possessor shall be placed in judicial deposit. (Art. 538)
is preferred. Thereafter, the one longest in

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What are the rules on expenses and deterioration/loss?

Expenses Possessor in Good Faith Possessor in Bad Faith

1. Necessary Expenses Entitled to reimbursement. Entitled to reimbursement.

Right of retention pending full No right of retention; must vacate property

reimbursement. (recourse is to file collection case).

Liable for damages as reasonable rent for

period of possession.

2. Useful Expenses Owner has 2 options: No rights.

Option 1: Reimbursement of either (i)

amount spent or (ii) increase in value
with right of retention until full
payment.

Option 2: To allow possessor to

remove provided no substantial
damage or injury is caused.

3. Luxurious Expenses Owner has 2 options: Owner has 2 options:

Option 1: To allow possessor to Option 1: To allow possessor to remove

remove ornaments if the principal ornaments if the principal suffers no injury.
suffers no injury.
Option 2: To retain the ornament by refunding
Option 2: To retain the ornament by the value of the ornament at the time owner
refunding the amount spent for the enters into possession (which means
ornament. depreciated value).

4. Deterioration/Loss No liability unless due to fraudulent Always liable whether before or after service of
intent or negligence after service of judicial summons, for any cause, even
judicial summons. fortuitous event.

Note: This chart is from Atty. Francis H. Ampil for 2022 Bar Examinations

4. Owner has Lost or been Unlawfully Deprived of Movables (Art. 559)

What must the owner prove?
1. Ownership of the movable or personal property
2. He has lost or been unlawfully deprived of possession of a movable or personal property.

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Summary of the Rules in Art. 559

Owner may recover without From anyone in possession, even a possessor in good faith.
reimbursement
Owner may recover but must If possessor acquired the object in good faith at a public sale or public auction; owner
reimburse the possessor must reimburse the price paid.

Owner cannot recover, even if he If possessor acquired it in good faith by purchase from a merchant’s store/ fairs/
offers to reimburse (whether or not markets in accordance with Code of Commerce & Special laws
the owner had lost or been
unlawfully deprived) a) if owner is by his conduct precluded from denying the seller’s authority to
sell

b) if seller has voidable title which has not been avoided at the time of sale to
the buyer in good faith for value and without notice of the seller’s defect in
title

c) if recovery is no longer possible because of prescription

d) if sale is sanctioned by statutory or judicial authority

e) if possessor obtained the goods because he was an innocent purchaser for

value and holder of a negotiable document of title to the goods

G. ACTIONS TO RECOVER OWNERSHIP stealth) or one year from the last demand to vacate
AND POSSESSION OF PROPERTY in the case of unlawful detainer.

Replevin What is the Effect of the Lapse of One-Year

Period?
What is Replevin? If the dispossession allegedly took place by any of
Replevin or delivery of personal property consists in such means but the action is not brought within one
the delivery, by order of the court, of a personal year from deprivation of possession, the action is
property by the defendant to the plaintiff upon filing of properly a plenary action of accion publiciana or
a bond. accion de reivindiacion. (Penta Pacific Realty Corp v.
Ley Construction and Development Corp., GR
What are the Requirements for a Writ of 161589, 2014)
Replevin? – see Rule 60 of the Rules of Court
For a writ of replevin to be issued, the following are Q: Spouses X filed 2 Civil Cases regarding a
required: parcel of land. The first case was a complaint for
1. An application must be timely filed (Sec. 1, ejectment against Y. The MeTC ruled in favor
Rule 60); Spouses X, and that they were entitled to the
2. The application must be supported by an possession of the subject property based on the
affidavit (Sec. 2, Rule 60); sale entered into by Corporation A with them. The
3. The applicant must give a bond executed to ejectment case was resolved in favor of Spouses
the adverse party. (Id.) X.

1. ACCION INTERDICTAL (more Subsequently, Y filed a Petition for Quieting of

commonly known as Ejectment Title regarding the same parcel of land. The RTC
Cases) and CA ruled in favor of Y’s ownership. Hence,
Spouses X argued that there were two previously
There are two kinds of accion interdictal: forcible decided cases resolved in favor of them, and it
entry and unlawful detainer. This summary action is touched upon the same subject matter as Y’s
filed with the MTC within one year for forcible entry Petition for Quieting of Title and the ejectment
(one year from cessation of force, intimidation or case, is conclusive upon the court a quo with
threat or one year from discovery of the strategy or respect to their ownership over the subject
property. Is the resolution of the ejectment case

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in favor of Spouses X conclusive upon the court will not prosper. The landowner is denied the
with regard to their ownership? remedies of ejectment and injunction for reasons of
public policy, public necessity, and equitable
estoppel. The proper recourse is for the ejectment
A: NO. As to the ejectment case, It simply does not
court to:
follow that since the Ejectment Case was ruled in
1. Dismiss the case without prejudice to the
favor of petitioners Sps. X, the latter are conclusively
landowner filing the proper action for
deemed the owners of the property.
recovery of just compensation and
consequential damages;
The only issue for resolution in an ejectment case is 2. Dismiss the case and direct the public utility
physical or material possession, where the parties to corporation to institute the proper
an ejectment case raise the issue of ownership, the expropriation proceedings, pay just
courts may pass upon that issue only for the compensation and consequential damages,
purposes of determining who between the parties or;
has the better right to possess the property. Where 3. Continue with the case as if it is an
the issue of ownership is inseparably linked to that of expropriation case and determine the just
possession, adjudication of ownership is not final and compensation and consequential damages,
binding, but merely for the purpose of resolving the if the ejectment court has jurisdiction over
issue of possession. (Spouses Pozon v. Lopez, G.R. the value of the subject property.
No. 210607 (Resolution), [March 25, 2019])
Furthermore, the award of rental in arrears is
improper because Corp B is only entitled to just
Note: The issues in an ejectment case and the issues compensation and consequential damages. While
in an action to quiet title are different issues. the award of rental in arrears is proper in unlawful
Therefore, there can be no dismissal of the case detainer cases, it is not the proper remedy if a public
based on litis pendentia (pending litigation) or res service or utility corporation granted the power of
judicata (bar by prior judgment). eminent domain has occupied a privately-owned
property without first acquiring property thereto in a
A boundary dispute must be resolved in the context negotiated purchase or expropriation proceedings.
of accion reivindicatoria, not an ejectment case. The (National Transmission Corp. v. Bermuda
boundary dispute is not about possession, but Development Corp, G.R. No. 214782, April 3, 2019)
encroachment, that is, whether the property claimed
by the defendant formed part of the plaintiff’s 2. ACCION PUBLICIANA
property. (Manalang vs. Bacani, GR No. 156995,
2015) It is a plenary action to recover the real right of
possession which should be brought in the RTC
Q: Corp A, a public service corporation granted within 10 years when the plaintiff has lost or been
the power of eminent domain, constructed and deprived of possession for more than one year.
energized a 230 KV transmission traversing a
property allegedly owned by Corp B. Corp B filed Although both ejectment and accion publiciana are
a case for unlawful detainer against Corp A. The actions specifically to recover the right of possession,
trial court ruled in favor of Corp B and ordered they have two (2) distinguishing differences. The first
Corp A to vacate the subject land, remove all is the filing period. Ejectment cases must be filed
structures thereon, and pay Corp B for the within one (1) year from the date of dispossession. If
reasonable rental until it has vacated the the dispossession lasts for more than a year, then an
premises. Corp A appealed and filed a complaint accion publiciana must be filed. The second
for expropriation of the same property subject to distinction concerns jurisdiction. Ejectment cases,
the unlawful detainer case. Because of the being summary in nature, are filed with the MTC.
complaint for expropriation, the trial court Accion publiciana, however, can only be taken
dismissed Corp A’s appeal in the unlawful cognizance of by the RTC. (Eversley Childs
detainer case for being moot and academic. Can Sanitarium v. Spouses Anastacio and Perla
Corp B’s unlawful detainer case prosper against Barbarona, G.R. No. 195814, 2018)
a public utility corporation granted the power of
eminent domain? The issue in an accion publiciana is the "better right
of possession" of real property independently of title.
A: In a case filed by a landowner for recovery of This "better right of possession" may or may not
possession or ejectment against a public utility proceed from a Torrens title. While there is no
corporation granted the power of eminent domain, it express grant in the Rules of Court that the court

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wherein an accion publiciana is lodged can 3. ACCION REIVINDICATORIA

provisionally resolve the issue of ownership, there is
ample jurisprudential support for upholding the power It must be filed within the same prescriptive period as
of a court hearing an accion publiciana to also rule on accion publiciana (10 years) with the proper RTC. It
the issue of ownership. The Court clarifies that in an involves both the issue of possession and ownership,
accion publiciana, the defense of ownership will not that is:
trigger a collateral attack on the plaintiff's Torrens or a) that the plaintiff is the owner of the land
certificate of title because the resolution of the issue or possessed it in the concept of an
of ownership is done only to determine the issue of owner; and
possession. b) the defendant dispossessed him of the
land.
While the RTC could have resolved the issue of
ownership provisionally to determine the "better right The person who claims a better right of ownership to
of possession," which is allowed in an accion the property sought to be recovered must prove two
publiciana, it was without any power or jurisdiction to things: first, the identity of the land claimed, and
order the reconveyance of the land in dispute second, his title thereto. As applied in this case,
because that can be done only upon a definitive petitioners utterly failed to prove the identity of the
ruling on the said issue — something that cannot be land they are claiming and also their title thereto. In
done in an accion publiciana. (Heirs of Cullado v. fact, the RTC, despite ruling in favor of petitioners by
Gutierrez, G.R. No. 212938, July 30, 2019) declaring respondents' title to be void, appeared to
be unconvinced of petitioners' claim of ownership
Q: The Heirs of X filed a complaint for Recovery when it ruled that the parcel of land covered by
of Possession of Real Property against Z on the respondents' titles be reverted to public land.
ground that Z encroached upon their property.
Consequently, the Heirs of X hired a geodetic As a general rule, the quantum of proof in civil cases
engineer to conduct a relocation survey and is preponderance of evidence, which means that the
prepare a Relocation Plan. However, the evidence adduced by one side is, as a whole,
Relocation Plan approved by the Land superior to or has greater weight than that of the
Management Bureau did not mention that there other. It means evidence which is more convincing to
was encroachment, hence the RTC and CA ruled the court as worthy of belief than that which is offered
in favor of Z. Upon appeal to the SC, the Heirs of in opposition thereto. Even if petitioners were able to
X argue that the failure of the Relocation Plan to present more evidence than respondents, it does not
indicate the fact that Z had erected any structure necessarily mean that they have preponderant
on the subject property is irrelevant because evidence. What is important is the relative weight or
temporary structures such as sheds, shanties, probative value of the evidence on record. In this
and make-shift fences do not need to be case, while it may be true that petitioners have
indicated in the plan because they are not presented a greater number of testimonial and
permanent structures. Was there encroachment? documentary evidence, such evidence was not
enough to discharge petitioners' burden of proof.
A: NONE. The Heirs of X's new theory that the
encroachment committed by Z was by way of Firstly, it must be noted that while petitioners' main
erecting temporary structures fails to convince. piece of evidence, a mere photocopy of TD No.
During the trial, the Heirs of X made it abundantly 27254, might show that Jesus did declare a piece of
clear that, in their allegation, that Z encroached on land under his name for tax purposes as early as
the subject property by building houses and 1960, the same does not help in proving that the land
occupying them. Hence, with the Relocation Plan petitioners are claiming is identical to the land titled
submitted as evidence in chief by the Heirs of X to respondents. (J. Hernando: Heirs of Magsaysay
incontrovertibly showing that no buildings, v. Spouses Perez, G.R. No. 225426, 2021)
enclosures, and other permanent structures were put
up by the respondents on the subject property, then The identity of the property and the title of the
the same Relocation Plan cannot be considered as claimant must be ascertained in an action to recover
competent proof that the Lot of X was encroached possession of real property pursuant to Article 434 of
upon by Z. (Heirs of Lupena v. Medina, G.R. the Civil Code. (J. Hernando: Gemina v. Heirs of
No.231639, January 22, 2020.) Espejo, Jr., G.R. No. 232682, 2021)

Note: In all actions to recover property (whether real

property or personal property), the identity of the
property must be established and the plaintiff must

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rely on the strength of his evidence and not on the When is a Writ of Possession proper? (FEEEL)
weakness of the defendant’s evidence. Therefore, in a. Foreclosure, judicial or extrajudicial, of
case of equiponderance of evidence (or equipoise of mortgage. The highest bidder (who is
evidence), the complaint will be dismissed and usually the creditor-mortgagee may obtain
defendant wins. (Art. 434) a writ of possession even during the period
of redemption).
To prove his ownership over the lot, Jesus presented b. Ejectment
Tax Declaration No. 13163-A in his name. He c. Execution sales
likewise presented two Certificates issued by the d. Eminent domain proceedings
Office of the Municipal Treasurer of Sibonga, Cebu e. Land registration cases. A writ of
declaring him as owner of the subject land and that possession is issued after unregistered
he has been paying realty taxes thereon as early as land is registered and covered by the
1980. Indeed, while the tax declaration is not Torrens System (after OCT is issued).
conclusive proof of ownership of Jesus over the
subject land, it is an indication however that he
What is a Writ of Demolition?
possesses the property in the concept of an owner
A writ of demolition is but a complement of a writ of
for nobody in his or her right mind would be paying
possession. The writ of demolition may be issued
taxes for a property that is not in his or her actual or
when there is a structure built on a parcel of land
constructive possession. (J. Hernando: Sps.
which the petitioner would want removed or
Eugenio Ponce and Emiliana Nerosa v.
destroyed.
AldaneseG.R. No. 216587, 2021)
When is a Notice of Lis Pendens proper? (PORC-
Are tax declarations conclusive evidence of
Q)
ownership?
1. Action to Recover possession of real
No. Tax declarations are not conclusive evidence of
property
ownership. However, tax declarations may be
2. Action to Quiet title
considered as strong evidence of ownership if
3. Action to remove Cloud
coupled with actual physical possession. Reason: No
4. Action for Partition
one in his right mind would pay taxes if he were not
the true owner.

Is an action for reconveyance imprescriptible if H. EASEMENTS; EASEMENT OF RIGHT

the plaintiff is in possession of the property? OF WAY
Yes. In [Sps.] Alfredo v. [Sps.] Borras, the Court ruled
that prescription does not run against the plaintiff in What are the Kinds of Easements?
actual possession of the disputed land because such 1. Real Easement. It is an encumbrance
plaintiff has a right to wait until his possession is enjoyed by or in favor of an immovable
disturbed or his title is questioned before initiating an called dominant estate upon another
action to vindicate his right. His undisturbed immovable burdened by it called the servient
possession gives him the continuing right to seek the estate. (easement of common law, Art. 613).
aid of a court of equity to determine the nature of the There is a dominant estate and a servient
adverse claim of a third party and its effect on his title. estate.
The Court held that where the plaintiff in an action for 2. Personal Easement. It is an encumbrance in
reconveyance remains in possession of the subject favor of a community or group of people who
land, the action for reconveyance becomes in effect do not own the immovable that is burdened
an action to quiet title to property, which is not subject with the easement (servitude of civil law, Art.
to prescription. The action for reconveyance was filed 614). There is no dominant estate but there
by respondents Navares precisely because they is a servient estate.
deemed themselves owner of the litigated property
prior to the claim of petitioners Tomakin. The filing of Note: Easements only apply to immovable property.
such action was an assertion of their title to the
property. (Heirs of Tomakin v. Heirs of Navares, G.R. An easement or servitude is a real right on another’s
No. 223624. July 17, 2019) property, corporeal and immovable, whereby the
owner of the latter must refrain from doing or allowing
What is a Writ of Possession? somebody else to do or something to be done on his
An order directing the sheriff to place the petitioner or her property, for the benefit of another person or
in actual physical possession of property. tenement. (Pilar Development Corporation v.
Dumadag, GR No. 194336, 2013)

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What is the difference between inseparability of Note: All easements may be acquired by title. Only
easement and indivisibility of easement? continuous and apparent easements can be acquired
Inseparability of easement provides that there can be by prescription of 10 years.
no easement without the immovable to which it is
attached while indivisibility of easement provides When will the 10-year period start to run in the
that: case of easements acquired by prescription?
1. If the SERVIENT ESTATE is divided It depends. If it is a positive easement, from the time
between two or more persons, the easement the dominant owner did something adverse to the
is not modified, and each servient owner rights of the servient owner (such as opening a
must bear the easement on the part which window in a party wall). However, if it is a negative
corresponds to him. easement, the 10 year period only starts to run when
2. If it is the DOMINANT ESTATE that is the servient owner receives a notarial prohibition
divided between two or more persons, each stopping or prohibiting him from doing something
dominant owner may use the easement in its which he could lawfully do were it not for the
entirety, without changing the place of its easement (such as constructing a house that will
use, or making it more burdensome in any block the light and view of the dominant owner).
other way. (Articles 617 and 618)

What are positive and negative easements? What is the Doctrine of Apparent Sign?
1. Positive – one which imposes upon the The existence of an apparent sign of easement
servient estate the obligation of allowing between two estates, established or maintained by
something to be done or of doing it himself. the owner of both, shall be considered, should
(Art. 616) either of them be alienated, as a title in order that
2. Negative – that which prohibits the owner of the easement may continue (i.e., be created or
the servient estate from doing something established), actively and passively, unless, at the
which he could lawfully do if the easement did time the ownership of the two estates is divided, the
not exist. (Art 616) contrary should be provided in the title of
conveyance of either of them, or the sign aforesaid
be removed before the execution of the deed. This
What are continuous and discontinuous
provision shall also apply in case of the division of a
easements?
thing owned in common by two or more persons. (Art.
1. Continuous – their use is incessant or may
624)
be incessant; (Art. 615)
What are the rules regarding the doctrine of
Note: For legal purposes for acquisitive
apparent sign?
prescription, the easement of aqueduct is
considered continuous; easement of light 1. Before alienation, there is no easement
and view is also continuous. 2. after alienation, there arises an easement if
the sign continues to exist but there is no
2. Discontinuous – used at intervals and easement if the sign is removed or if there is
depend upon the acts of man (e.g., right of an agreement to this effect (Art. 624)
way because it can only be used if a man 3. the doctrine applies whether only 1 estate or
passes). (Art. 615) both estates are alienated
4. the doctrine applies even in the case of
What are apparent and non-apparent easements? partition among co-owners (Art. 624)
1. Apparent – made known and continually 5. there must an apparent sign which is a
kept in view by external signs that reveal the visible sign continuously kept in view.
use and enjoyment of the same (Ex. right of
way when there is an alley or a permanent If the doctrine of apparent sign applies, will the
path). (Art. 615) 10 year prescriptive period still be necessary?
2. Non-apparent – show no external indication No. If the doctrine of apparent sign applies, the 10
of their existence (Ex. easement of not year prescriptive period is not needed because the
building to more than a certain height). (Art. easement is acquired by “title” and not by
615) “prescription”. Therefore, if the easement is negative,
the notarial prohibition is also not needed and is
How are easements acquired? irrelevant.
1. By prescription of 10 years
2. By title

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What is an example as given by jurisprudence? What is the rule on indemnity in easements of

Lots 1 and 2 are owned by A. A sold Lot 1 to B. Lot 2 right of way?
has a house with windows. B started construction of 1. Permanent. If the passage is permanent,
a 2-story house on Lot 1. A opposed the construction pay the value of land occupied by the path
of the house since he has an easement of light and plus damages. Upon extinction of the
view. easement, the indemnity is returned without
interest, for the interest is considered rent.
HELD: A is correct. Altius non-tollendi- non building 2. Temporary. If temporary, pay for the
of a higher structure. A acquired an easement of light damages caused. Indemnity not returned
and view by title. There is no need for a notarial because damage has already been caused.
prohibition since the easement was not acquired by (Art. 649)
A based on “prescription”. The easement was
acquired by A based on “title” or the doctrine of Cases:
apparent sign. The windows are the apparent sign. Article 630 expressly provides that “[t]he owner of the
(Amor v. Florentino, G.R. No. L-48384, 1943) servient estate retains ownership of the portion on
which the easement is established and may use the
What are judicial easements? same in such manner as not to affect the exercise of
There is no such thing as judicial easements (created the easement.” Thus, the owners of the servient
by the courts). There are only legal easements estate retained ownership of the road right-of-way
(created by law) and voluntary easements (based on even assuming that said encumbrance was for the
contract or agreement). Therefore, when the court benefit of the owner of the dominant estate.
says that an easement exists, it is not creating one. (Mercader, Jr. vs. Bardilas, GR No. 163157, 2016)
The court is just confirming that an easement exists.
A writ of injunction cannot be used to create an Under the law, and unlike in purchase of a property,
easement as there is no such thing as a judicial should the right of way no longer be necessary
easement. The court merely declares the existence because the owner of the dominant estate has joined
of an easement created by the parties. (La Vista it to another abutting on a public highway, and the
Association v. CA, GR No. 95252, 1997) servient estate demands that the easement be
extinguished, the value of the property received by
What are the requisites for a compulsory the servient estate by way of indemnity shall be
easement of right of way? (Art. 649) returned in full to the dominant estate. (De Guzman
1. The dominant estate is isolated or v. Filinvest Development Corporation. GR No.
surrounded by other immovables belonging 191710, 2015) The only servitude which a private
to other persons, and has no adequate outlet owner is required to recognize in favor of the
to a public highway; government is the easement of a public highway,
2. The dominant estate pays the owner of the way, private way established by law, or any
servient estate indemnity; government canal or lateral that has been pre-
3. The isolation of the dominant estate is not existing at the time of the registration of the land. If
due to his own fault; and the easement is not pre-existing and is sought to be
4. The legal or compulsory easement of right of imposed only after the land has been registered
way is established at the point least under the Land Registration Act, proper expropriation
prejudicial to the servient estate, and insofar proceedings should be had, and just compensation
as may be consistent with this rule, where paid to the registered owner. (Eslaban v. Vda. De
the distance of the dominant estate to a Onorio, GR No. 146062, 2001)
public highway may be the shortest.
Easement of right of way is discontinuous. It may
What are the requisites for a temporary easement be exercised only if a person passes or sets foot on
of right of way? (Art. 656) somebody else’s land. An easement of right of way
1. There is a construction, repair, of railroad tracks is discontinuous because the right
improvement, alliteration or beautification of is exercised only if and when a train operation by a
a building on the dominant estate person passes over another’s property. (Bomedco v.
2. It is indispensable or necessary to carry Valdez, GR No. 124699, 2003)
materials through the servient estate or to
construct scaffolding or other objects Note: Since a legal easement of right of way is
necessary for the works. discontinuous, it cannot be acquired by prescription.
3. Owner of the dominant estate pays It can only be acquired by title. Only continuous and
indemnity to the owner of the servient estate. apparent easements may be acquired by prescription
(such as easement of light and view or easement of
aqueduct).

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What are the differences between right of way under R.A. 10752 and easement of right of way?

RIGHT OF WAY UNDER R.A. 10752 EASEMENT OF RIGHT OF WAY

Legal Basis and Republic Act No. 10752: Specifically Civil Code: It applies to private properties and
Scope of governs the acquisition of right of way for allows for the establishment of a right of
Application national and local infrastructure projects, passage over one's land to benefit another
such as roads, highways, bridges, and property.
other transportation-related projects.

Article III, Section 9 of the Constitution

states that private property shall not be
taken for public use without just
compensation. (Sec. 2, Declaration of
Policy)

Purpose To facilitate the acquisition of right of way To provide a legal mechanism for granting
for infrastructure projects that serve access to one property through another
public interest. property when there is no other reasonable
To ensure that landowners are way of access.
compensated for the use of their property To avoid landlocked situations
for such projects. To enable the reasonable use and enjoyment
of the land.

Acquisition Involves the identification of the needed Follow the legal requisites
Process right of way, negotiation with the affected
landowners, appraisal of the affected
properties, and payment of just
compensation and it also includes the
resolution of disputes through
administrative and judicial procedures
(Secs. 4-7).

I. NUISANCE b. Improper disposal of hazardous or toxic wastes

and gross neglect of property also falls under this
Kinds of Nuisance: category.

1. Injures or endangers the health or safety of 2. Annoys or offends the senses

others Considered under this category are:
Examples under jurisprudence are: a. generation of excessive noise or offensive
a. rabid dog, contaminated meat, narcotic drugs, smell—such as when noise is generated by
and a filthy restaurant. machines in a property beyond the allowable

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legal limits.; and may be summarily abated. An example is a mad dog

b. harassment of other property owners on the loose.

3. Shocks, defies, or disregards decency or 2. Nuisance Per Accidens

morality This is a nuisance depending upon certain conditions
Examples of this category are: and circumstances, and its existence being a
a. Public display of pornography; (Cruz v. question of fact, it cannot be abated without due
Pandacan Hikers) notice and hearing. An example is abatement of a
b. Indecent exposure; and hotel constructed in a no build zone.
c. Defacating in public
What are the remedies against a public
4. Obstructing or interfering with the free nuisance?
passage of any public highway or street, or any 1. Civil action
body of water, e.g.: 2. Abatement without judicial proceedings
a. A barbershop built on a sidewalk; (Timoner v. 3. Criminal action
People)
b. Use of a public street as a garage or storage Note: Remedies for nuisance are cumulative—
area; and exercise of one does not preclude the other remedies
(Art. 697); and these actions are imprescriptible
5. Hinders or impairs the use of property because lapse of time cannot legalize any nuisance,
a. Occupation by squatters of public land to be whether public or private (Art. 698). An action to
used for school purposes (City of Manila v. abate a nuisance can be filed at any time. There is
Garcia) no prescriptive period to abate a nuisance.
b. Subdivision gate ordered opened by an
ordinance to allow access to a road Can a private person abate a public nuisance?
(Sangalang v. IAC) Yes. Under Art. 706, any person injured by a private
c. A case wherein a neighbor blocked the nuisance may abate it by removing, or if necessary,
access to another property. by destroying the thing which constitutes the
nuisance, without committing a breach of the peace
Kinds of Nuisance based on affected persons or doing unnecessary injury. However, it is
indispensable that the procedure for extrajudicial
1. Public Nuisance abatement of public nuisance by a private person be
a. Affects a community or neighborhood or followed.
any considerable number of persons, even if
the extent of the annoyance, danger, or What are the requirements for a private person to
damage upon the individuals is not different. abate a public nuisance? (Art. 704)
b. To constitute this, it must be regularly a. Private person should have demanded that
done, otherwise, it is a mere violation. the owner/possessor of the property abate
the nuisance and the latter rejected the
Example: Cement batching plant affecting a demand;
residential area (Rodriguez v. IAC) b. The district health officer approves the
abatement;
2. Private Nuisance c. The local police assists in the execution of
a. Not a public nuisance; and it violates only the abatement; and
private rights and produces damages to one d. The value of the destruction should not
or few persons. exceed PHP 3,000.00

Example: Noise generated by the blowers of the air What is the Doctrine of Attractive Nuisance?
conditioning system of a building causing injurious One who maintains on his premises dangerous
effects to the health or comfort of ordinary people in instrumentalities or appliances of a character likely to
the vicinity to an unreasonable extent. (AC attract children at play and who fail to exercise
Enterprises v. Frabelle Properties) ordinary care to prevent children from playing
therewith or resorting thereto, would be liable to a
Kinds of Nuisance based on susceptibility to child of tender years who is injured even if the child
summary abatement technically is a trespasser of the property.

1. Nuisance Per Se What is an attractive nuisance?

A nuisance per se is nuisance that affects the An attractive nuisance is anything maintained by a
immediate safety or persons and property and, thus, person that is likely to attract children in play, and that

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person fails to exercise proper diligence to ensure the

safety of the children.

Does the doctrine apply to bodies of water?

No. As a general rule, the doctrine of attractive
nuisance does not apply to bodies of water, artificial
as well as natural, in the absence of some unusual
condition or artificial feature other than mere water
and its location… Nature has created has created
streams, lakes, and pools which attract children.
Lurking in their waters is always the danger of
drowning. Against this danger children are early
instructed so that they are sufficiently presumed to
know the danger; and if the owner of private property
creates an artificial pool on his own property, merely
duplicating the work of nature without adding any
new danger… he is not liable because of having
created an “attractive nuisance.” (Hidalgo
Enterprises, Inc. v. Balanda, G.R. No. L-3422, 13
June 1952, en banc).

The exception to the general rule was applied in the

recent case of Aleta v. Sofitel Philippine Manila
Plaza when the Court applied the Doctrine of
Attractive Nuisance in cases where there are artificial
features such as slides which are intended to attract
children, which caused injury to the latter.

--end of topic--

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What are the 7 Modes of Acquiring Ownership?

V. DIFFERENT MODES OF ACQUIRING
(OLD-TIPS)
OWNERSHIP 1. Occupation
2. Law
A. OCCUPATION 3. Donation
4. Tradition
B. DONATION 5. Intellectual Creation
6. Prescription (i.e., acquisitive prescription not
C. PRESCRIPTION extinctive prescription)
7. Succession

What are the Original Modes of Acquiring

Ownership?
Original modes are those where there is no previous
owner such as occupation and intellectual creation.

What are the Derivative Modes of Acquiring

Ownership?
Deriviate modes are those where there is a previous
owner. Except for occupation and intellectual
creation, all the other modes are derivative modes.

A. OCCUPATION

What are the requisites?

1. Seizure or apprehension
2. Property must be owned by no one (res
nullius)
3. Property seized must be corporeal movable
property
4. Property must be susceptible of appropriation
5. Intent to appropriate
6. Compliance with requisites or conditions of
the law (De Leon, supra, p. 585).

Is it possible to acquire ownership of land based

on occuption?
No. If land is res nullius, the land is owned by the
State based on the Regalian Doctrine.

B. DONATION

1. Features

a. Nature
What is a Donation?
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)

When is a Donation Perfected?

Donation is perfected from the moment the donor
knows of the acceptance by the donee (Art. 724)
The donation is perfected once the acceptance of the
donation was made known to the donor. Accordingly,
ownership will only revert to the donor if the

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resolutory condition is not fulfilled. (Quijada v. CA, resolutory condition

GR No. 126464, 1998) 3. With a Term – subject to a suspensive or
resolutory term or period
Is a Contract of Donation a Consensual Contract
or a Formal or Solemn Contract? Note: Illegal or impossible conditions in simple
It is a formal or solemn contract that must comply with and remuneratory donations are considered as
legal formalities found in Art. 748 (for movables) and not imposed. Donation itself remains valid and
Art. 749 (for immovables); otherwise, the donation is only the illegal or impossible conditions are
void. disregarded. (Art. 727)

2. Classifications 3. How to distinguish Donation Inter Vivos

from Donation Mortis Causa?
Kinds of Donation DONATION INTER DONATION MORTIS
VIVOS CAUSA
What are the Kinds of Donation as to Effectivity? Disposition and Disposition happens
1. Inter vivos - takes effect during the lifetime acceptance to take upon the death of donor;
of the donor, even though the property shall effect during lifetime of acceptance by donee
not be delivered till after donor’s death or donor and donee can only be done after
even though it is subject to a resolutory or donor’s death
suspensive condition (Art. 729 and Art. 730).
2. Mortis Causa - takes effect upon the death
of the donor and shall be governed by the
rules of succession (Art. 728) Property is already Property will not be
3. Propter Nuptias - Donation by reason of and owned by the donee owned by the donee-
in consideration of marriage, before its unless there is a heir until after the death
celebration, in favor of one or both of the contrary intent of the donor.
future spouses (Art. 82, Family Code)

What are the Kinds of Donation as to

Consideration?
1. Pure and Simple – When the cause of the Formalities required - Formalities required -
donation is the pure liberality of the donor follow law on donations follow law on
2. Remuneratory or compensatory – and certain kinds of succession to be valid,
Donation is given out of gratitude on account donations and law on and donation must be in
of the services rendered by the donee to the obligations and the form of a notarial or
donor, provided the services do not constitute contracts (suppletory) holographic will
a demandable debt.
3. Modal – When the donation imposes upon
the donee a future burden less than the value
of the thing given
4. Onerous – the value of which is considered Irrevocable at the Revocable ad mutuum
the equivalent of the consideration for which instance of the donor; (exclusive will of donor)
it is given and thus governed by the rules of may be revoked only by Reason: Ownership is
obligations and contracts reasons provided by still with the donor.
law Reason:
Ownership has already
Note: Where a contract is seemingly a
transferred to the
remuneratory donation but is silent as to the donee.
value of the burden imposed on the donee of a
thing of undetermined value, the law on contract
instead of the law on donations should govern. What are some rules to determine whether the
(Reyes v. Asuncion, GR No. 196083, 2015) Donation is Inter vivos or Mortis Causa?
Where a donation was made “in consideration of love
and affection” but further stipulated that “It became
What are the kinds of donation as to effectivity of
effective upon the death of the donor provided that in
extinguishment?
the event the donee should die before the donor, the
1. Pure – not subject to any condition (future
donation would be deemed automatically rescinded,”
and uncertain event) or term or period
the Court held that the same was a mortis causa
2. Conditional – subject to a suspensive or
since the right of disposition was not transferred to

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donee while donor is still alive. (Sicad v. CA, GR No. void.

125888, 1998) b. If the value is exactly or below P5,000,
the donation may be made orally or in
A donation mortis causa must comply with the writing.
formalities of a last will and testament otherwise; it c. If oral, it must be with simultaneous
would be void and would produce no effect. delivery of the thing or of the document
(Maglasang v. Heirs of Corazon Cabatingan, GR No. representing the right donated. (Art.
131953, 2002) 748)

If the donation is made in such a way that the full and 2. Immovable Property
naked ownership will pass to the donee upon the a. To be valid, donation must be made in a
death of the donor, then it is at that time when the public instrument, specifying therein the
donation will take effect and it is the donation mortis property donated and the value of the
causa which should be embodied in the last will and charges which the donee must satisfy.
testament. (Maglasang v. Cabatingan, GR No. b. The acceptance of the donee may be
131953, 2002) made in the same deed of donation or in
a separate public document.
Where, however, a donation was made stipulating c. If the acceptance is made in a separate
that it would take effect after the death of the donor instrument, the donor shall be notified
but further stipulated that (1) the donor will not thereof in an authentic form, and this
dispose nor take it away from the donee and that (2) step shall be noted in both instruments.
the donor is parting with the beneficial ownership d. Acceptance must be made during the
while he lived, the donation was held to be inter lifetime of the donor. (Art.749)
vivos.
Note: The notice in authentic form is called
In case of doubt, the conveyance should be deemed “constancia autentica”.
donations inter vivos, rather than mortis causa, in
order to avoid uncertainty as to the ownership of the What is the rule on double donations?
property subject of the deed (Villanueva v. Spouses Rule: Priority in time, priority in right
Branoco, GR No. 173804, 2011). 1. If movable – one who first takes possession
in good faith
What are the badges of Mortis Causa? 2. If immovable –
1. Ownership remains with donor (full or naked a. one who recorded in registry of property
ownership) and conveyed only upon death in good faith
2. Donor can revoke ad nutum (Villanueva v. b. no inscription, one who first took
Spouses Branoco, G.R. No. 172804, 2011) possession in good faith
3. Donation is void if the donor survives donee. c. in the absence thereof, one who
(This means that, if the donation states that it presents oldest title in good faith
will be void in case the donee predeceases
(dies ahead of) the donor, then the donor
Note: Good faith is required in all instances.
never parted with ownership over the
property. It is mortis causa. (Del Rosario v.
Peralta G. No. 187056, 2010; Villanueva v. b. Persons who may give or
Spouses Branoco, GR No. 172804, 2011) receive
Who may give or receive a donation?
Note: The most important right of ownership to 1. Capacity to be Donor
consider is jus disponendi (or the right to dispose). If All persons who may contract and dispose of their
jus disponendi is not with the donor and is already property may give a donation. Those who cannot give
with the donee, it will be inter vivos. However, if the consent to a contract cannot be donors.
donor retains or keeps jus disponendi, even if all
other rights of ownership are transferred to the Note: The word “making” in the Civil Code refers to
donee, the donation is mortis causa. “perfection”. A contract of donation is perfected at the
time the donor knows of the acceptance by the
4. Form donee. This is the point in time when capacity to give
(donor) and capacity to receive (done) must both be
1. Movable Property present, i.e., at the time of perfection. (Arts. 734 &
a. If the value exceeds P5,000, the 735)
donation and acceptance shall be in
writing; otherwise, the donation shall be

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Who are Disqualified to Donate? 5. Limitations

Article 736. Guardians and trustees cannot
donate the property entrusted to them. What are the effects and limitations of donation?
1. Reservation of sufficient means for support of
Article 739. The following donations shall be donor and those who depend on donor for
void: legal support.
1. Those made between persons who were - Donation may comprehend all
guilty of adultery or concubinage at the present properties of the donor, or
time of the donation; part thereof, provided he reserves
2. Those made between persons found sufficient means for his support and
guilty of the same criminal offense, in of relatives who, at the time of the
consideration thereof; acceptance of the donation, are by
3. Those made to a public officer or his law entitled to be supported by the
wife, descendants and ascendants, by donor. Otherwise, the donation will
reason of his office. be subject to reduction upon
petition of any person affected. (Art.
In the case referred to in No. 1, the action for 750)
declaration of nullity may be brought by the 2. Donation of future property is prohibited. (Art.
spouse of the donor or donee; and the guilt of the 751)
donor and donee may be proved by 3. Donation shall be limited to what the donor
preponderance of evidence in the same action. may give by will. Otherwise, the donation is
inofficious (Art. 752).
Note: Donations between spouses during - The limitation only applies when the
marriage, except moderate gifts, are void (Art. 87, donor has compulsory heirs. The
Family Code) purpose is not to impair their legitimes.
Note: Donations made to incapacitated persons,
What Are The Rights and Obligations of Donor?
though simulated under the guise of another
1. Donor may reserve the right to dispose of
contract or through a person who is interposed,
some of the things donated, or of some
are also void.
amount or income charge thereon (Art. 755)
2. Donor may donate the ownership of property
Note: The prohibition against donations between to one person (naked owner) and the usufruct
spouses apply to donations between persons
to another (usufructuary) (Art. 756)
living together in illicit relations. (Joaquino v.
3. Donor is not obliged to warrant the things
Reyes, G.R. No. 154645, 2003) donated except when the donation is
onerous, in which case the donor is liable for
2. Capacity to be Donee eviction or hidden defects in case of bad faith
All those who are not specially disqualified by law on his part. (Art. 754).
may accept donations. 4. Donor may provide for reversion in his favor.
(Art. 757)
Who May Accept Donations?
1. Natural and juridical persons not disqualified What Are The Rights and Obligations of Donee?
by law 1. If donation is made to several persons jointly,
2. Minors and other incapacitated persons it is understood to be in equal shares and
a. By themselves if pure and simple there is no right of accretion among them,
donation or if it does not require written unless the donor provides otherwise. (Art.
acceptance 753)
b. By their parents or legal representatives 2. If made to the husband and wife jointly, there
if the donation is onerous or conditional is right of accretion. (Art. 753)
or needs written acceptance 3. Donee is subrogated to all the rights and
i. Natural guardian – not more actions which in case of eviction would
than 50,000 pertain to the donor (Art. 754)
ii. Court appointed – more than 4. If donation imposes upon the donee the
50,000 obligation to pay the debts of the donor, it is
understood to be liable to pay only the debts
3. Conceived and unborn child, represented by previously contracted.
person who would have been guardian if
already born (Arts. 738, 741 & 742)

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Note: In no case shall the donee be would be hers exclusively, that any gift bestowed
responsible for debts exceeding the value of upon Y from X would remain her exclusive property,
the property donated unless a contrary and that X waived all direct and indirect interests in
intention appears. (Art. 758) Y’s properties, it is clear to the Court that X has
4. If there is no stipulation regarding payment of waived and abandoned any and all interest in the
debts, donee is liable only when the donation subject property. (Delgado v. GQ Realty
has been made in fraud of creditors Development Corp., G.R. No. 241774. September
25, 2019)
Note: It is always presumed to be in fraud of
creditors, when at the time of donation, the 6. Reduction and revocation of donation
donor did not reserve sufficient property to
pay his debts. (Art. 759) Revocation

Q: X and Y met and fell in love after their What Are The Grounds For Revocation?
respective spouses both died. Both had children 1. Birth, Adoption, Reappearance of a Child
from their previous marriages. When X and Y got It applies when the donor, at the time he
married on June 20, 1987, they executed an Ante- made the donation, did not have any child or
Nuptial Agreement which stated that their descendant, or erroneously thought so.
properties would be governed by complete Donation may be revoked or reduced when:
separation of properties. This Agreement was a. Donor should have any children, after
executed on June 15, 1987. Before they were donation, even though they be
married, Y bought a condominium unit for her posthumous
daughter from her previous marriage, Z, using b. Donor’s child whom he believed to be
X’s funds (as an act of love). The purchase was dead when he made the donation, turns
made on April 27, 1987 and registered in the out to be alive
name of Y’s family corporation, A. A has never c. Donor subsequently adopts a minor child
operated as a legitimate corporation, as it only (Art. 760)
entered into transactions with Y’s family.
However, Y then swapped units with Z, and Y Note: B-A-R (birth, adoption, reappearance)
started living in the subject property with X. is intended to protect the legitimes of the
When Y died in 2006, the children of X and Y compulsory heirs or the children.
began fighting over the properties. X alleged that
he had the right to the property based on an 2. Ingratitude
implied trust. Did the execution of the Ante- The donation may also be revoked by reason
Nuptial Agreement waive, abandon, or otherwise of ingratitude in the following cases:
extinguish X’s alleged interest over the subject a. Donee should commit some offense
property? Assuming that the property was against the person, honor or property of
indeed a gift, was it bestowed upon Y or A? the donor, or of his wife, or children under
his parental authority.
A: YES. Under the Agreement, those gifts bestowed
upon Y by X shall become the former’s exclusive b. Donee imputes to the donor any:
property. X’s act of purchasing the subject property i. Criminal offense; or
using his own funds was a genuine act of gratuity in ii. Any act involving moral turpitude;
favor of Y. Consequently, since X declared in the
Ante-Nuptial Agreement, which was executed after
the purchase of the subject property, that he was Note: Revocation applies even if the donee
explicitly discharging any and all interest in all gifts proves that the crime was actually
that he had bestowed upon Y, X’s alleged interest in committed, unless the crime or the act has
the subject property has been completely waived in been committed against the donee himself,
favor of Victoria. Further, X’s defense that the his wife, or children under his authority.
property was bestowed upon A instead of Y, and
therefore is not under the coverage of the Ante- 3. Donee unduly refuses to give support when
Nuptial Agreement is without merit. While ordinarily, the donee is legally or morally bound to give
A and Y are deemed to have unique and separable support to the donor.
juridical personalities, the factual circumstances of
the instant case reveal that, in so far as the subject Prescriptive period is one year, counted from the
property is concerned, they are one and the same time the donor:
person. Thus, as X and Y expressly agreed in the 1. Had knowledge of the fact; and
Ante-Nuptial Agreement that the latter's properties

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2. It was possible for him to bring the action. The stipulation of the parties providing for automatic
(Art. 769) revocation of the deed of donation, without prior
judicial action for that purpose, is valid subject to the
Note: As a general rule, the right granted to the determination of the propriety of the rescission
donor to revoke the donation on the ground of sought. Where such propriety is sustained, the
ingratitude may not be renounced in advance decision of the court will be merely declaratory of the
and may not be transmitted to the heirs of the revocation, but it is not in itself the revocatory act.
donor. Reason: The act of ingratitude is a (Zamboanga Barter Traders v. Plagata, G.R. No.
personal offense against the donor. (Art. 769 - 148433, 2008)
770)
Q: Local Government A thru its governor donated
What are the Exceptions? a portion of land to B. The Deed of Donation
1. Donor filed the complaint to revoke the includes a condition that the property shall be
donation but dies during the pendency used for the purpose intended and with a
of the case. prestation that B must construct a building
2. Donee killed the donor. thereon. It also prohibits B in selling, mortgaging,
3. The act of ingratitude caused the death or encumbering the donated property.
of the donor. Furthermore, it includes a clause that allows an
4. Donor died without having known about automatic revocation in case there is a violation
the ingratitude. of terms and conditions in the Deed of Donation.
After the execution of the Deed, B leased out to C
3. Non-compliance with conditions a portion of a building that is constructed on the
Donation may be revoked when the donee fails donated property. Years after, A executed a Deed
to comply with any of the conditions which the of Revocation of Donation and sent a demand
donor imposed. letter to B to vacate the premises. Subsequently,
A thru its representative filed a case for Unlawful
The alienations and mortgages made by the Detainer against B. A argues that B violated its
donee are void, subject to the limitations imposed terms and conditions under the Deed of Donation
by the Mortgage Law and Land Registration laws thereafter invoking the automatic revocation
with regard to innocent third persons in good clause in the Deed of Donation. On the other
faith. hand, B contends that A has ceased to be the
owner of the subject property possessed and
Action prescribes after 4 years from the occupied by B by virtue of the Deed of Donation
noncompliance with the condition. Inter Vivos executed in favor of B. Furthermore,
B argues that there is no violation of the
Note: This action may be transmitted to the heirs condition of the donation. Did the lease to C
of the donor and may be exercised against the violate the terms and conditions of the deed
donee’s heirs. (Art. 764) hence the donation can be automatically
revoked?
What happens if there is no term or period within
which to comply with the condition? A: NO. The donation being modal and onerous, the
The general rule is that if the period is not fixed in the rules on contracts should prevail in the interpretation
contract, the court can fix the period. However, in a of the Deed of Donation pursuant to Article 732 and
case where 50 years had passed without the 733 of the Civil Code. Hence, the automatic
condition having been fulfilled, the Court refused to revocation clause is valid with the application of the
fix a period and ruled that for failing to comply with principle of autonomy of contracts. While the
the conditions of the donation, such donation can be automatic revocation clause is valid, the courts are
revoked. (Central Philippine University v. CA, GR No. not precluded from determining whether its
112127, 1995) application or enforcement by the donors is proper if
the donees contest the revocation. Moreover, Article
If the donation has an automatic revocation 765 which states that the donation shall be revoked
clause, will judicial intervention be necessary to at the instance of the donor, when the donee fails to
revoke the donation? comply with any of the conditions which the former
No. In contracts that have automatic revocation, imposed upon the latter shall be read with Article
judicial intervention is necessary not for purposes of 1191. While Article 1191 applies to reciprocal
rescinding the contract but just to confirm whether or obligations and donation essentially involves a
not the rescission was proper. unilateral act and there is an express revocation
clause in the Deed of Donation, Article 1191 is
nevertheless relevant in the determination of the

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nature of the breach or violation of the obligation that Which donation will be reduced or revoked if
will justify its rescission. The nature of the breach will there are 2 or more donations?
entitle an injured party to rescind when such breach The most recent (later) donation shall be reduced or
is substantial and fundamental as to defeat the object revoked first.
of the parties in making the contract. In this case, the
revocation is not valid because first, while an Cause of action arising from the inofficiousness of
unregistered lease for more than one year is an donation arises only upon death of the donor, as the
encumbrance, the encumbrance was not perpetual. value of the donation will be contrasted with the net
Second, the lease did not cover the entire donated value of the estate of the donor decedent. (Eloy
property. Third, B already complied with its main Imperial v. CA, GR No. 112483, 1999)
prestation which is the construction of the building.
Thus, the revocation of the Deed of Donation by A is Checklist for Donation:
improper and lacks legal basis. However, given that 1. Check whether it is onerous or gratuitous – if
B disregarded the provision of the Deed of Donation onerous, the law on contracts will apply
not to encumber the donated property, A is entitled to 2. If donation is gratuitous, check whether it is
nominal damages. (Camarines Sur Teachers and mortis causa or inter vivos – if it is mortis
Employees Association, Inc v. Province of causa, the law on succession will apply
Camarines Sur, G.R. 199666, October 07, 2019) 3. If the donation is inter vivos, check whether it
is perfected or not (acceptance was made
How are Illegal and Impossible Conditions known to the donor). If no perfection,
treated in the Law on Donations and the Law on donation is void.
Contracts? 4. If the donation is perfected, check the
In donations, the illegal or impossible condition will capacity of the donor (to give) and the
be void and disregarded. The donation shall remain capacity of the donee (to receive). If the
valid. (Art. 727) In contracts, the illegal or impossible donor or the donee has no capacity, donation
obligation will render the entire contract or obligation is void.
void. (Art. 1183) 5. Check compliance with the form. If the form
is not followed, the donation is void.
Reduction - Art. 748 (movable); and
What Are The Grounds For Reduction? (BRFI) - Art. 749 (immovable)
1. Birth, appearance, or adoption of a child
- Same rules as revocation
2. Failure to reserve C. PRESCRIPTION
- Failure of the donor to reserve sufficient
means for support of himself or those What are the Kinds of Prescription?
who depend on him for legal support 1. Acquisitive prescription – it is the
acquisition of ownership and other real rights
3. Fraud against creditors (Accion Pauliana)
through possession of a thing in the manner
- Failure of donor to reserve sufficient
and under conditions provided by law.
property to pay creditors
2. Extinctive prescription – it is the loss or
- Note: This is not actually an action to
extinguishment of property rights or actions
reduce a donation. It is an action to
rescind a rescissible contract or Accion through the possession by another of a thing
for the period provided by law or through
Pauliana. Reduction of the donation is
failure to bring the necessary action to
just the end result or consequence once
enforce one’s right within the period fixed by
the prayer or relief in the complaint is
law (De Leon, p. 701); it is also referred to as
granted.
limitation of actions (Morales v. CFI, GR No.
4. Inofficiousness L-52278, 1980)
- the donation exceeds the free portion,
i.e., the donation impairs the legitimes of What are the Requisites for Ordinary
the compulsory heirs Prescription?
1. Possession in the concept of an owner,
Are voluntary or instituted heirs allowed to file an public, peaceful and uninterrupted;
action to reduce or revoke an inofficious 2. Within time fixed by law (4 years for
donation? movables; 10 years for immovables);
No. Only compulsory heirs have legal standing to file 3. Good faith
an action to revoke or reduce an inofficious donation. 4. Just title
This is because only compulsory heirs are entitled to
legitime.

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What Are The Requisites For Extraordinary What is natural interruption and civil
Prescription? interruption?
1. Possession in the concept of an owner, 1. Natural interruption – when the possession
public, peaceful and uninterrupted; ceases for a period of more than one year.
2. Within time fixed by law (8 years for 2. Civil interruption – when the possessor
movables; 30 years for immovables): receives judicial summons (this means the
true owner filed a complaint in court)
Note: Just title and good faith are NOT required in
extraordinary prescription; What is tacking?
1. Present possessor may tack his possession
What are the Periods? to that of his grantor or predecessor in
1. Movable (Art. 1132) interest
a. 4 years with good faith & just title 2. Present possessor presumed to be in
b. 8 years without good faith & just title continuous possession even during the
intervening time unless contrary is proved
2. Immovable (Art. 1134 & 1137) 3. First day excluded, last day included
a. 10 years with good faith & just title
b. 30 years without good faith & just title What are the requisites for tacking?
1. There must be privity between previous and
What is Good Faith? present possessor such as seller-buyer,
1. Reasonable belief that person who donor-donee or decedent heir.
transferred the thing is the owner and could 2. A thief cannot tack the previous possession
validly transmit ownership. of his victim to his possession.
2. Must exist throughout the entire period
required for prescription. Settled is the rule that an applicant for registration of
a subject land must proffer proof of specific acts of
What is Just Title? ownership to substantiate his claim. In other words,
When the possession was acquired through one of he should prove that he exercised acts of dominion
the modes recognized by law, but the grantor was not over the lot under a bona fide claim of ownership
the owner or could not transmit any right (Art. 1129, since June 12, 1945 or earlier. The testimonies of the
NCC); just title must be proved and never presumed; witnesses are credible enough to support X’s claim
only Titulo Colorado is required. of possession. Worthy to note that the witnesses
1. Titulo Colorado – such title where there unswervingly declared that X’s predecessor-in-
was a mode of transferring ownership but interest, Y, in the concept of an owner, occupied and
something is wrong because the grantor is possessed Lot No. 5525 even before June 12, 1945.
NOT the owner. Thus, the possession and occupation as bona fide
2. Titulo putativo - a person believes he has owner of Y can be tacked to the possession of X who
obtained title but he has not because there acquired Lot No. 5525-B by virtue of a Deed of
was no mode of acquiring ownership, as Absolute Sale. (J. Hernando: Republic v. Caraig,
when one is in possession of a thing in the G.R. No. 197389, 2020)
mistaken belief that it was bequeathed to
him. (Doliendo v Biarnesa, G.R. No. L-2765, What are the Rules when a Co-Owner may
1906) Acquire Sole and Exclusive Ownership over the
Co-Owned Property by Acquisitive Prescription?
What is Possession in the Concept of an Owner?
1. Possession is NOT by mere tolerance but General Rule: A co-owner cannot acquire sole and
adverse or hostile to that of the true owner exclusive ownership of the co-owned property by
2. The possessor claims that he owns the acquisitive prescription. (Art. 494) Reason: The
property possession of a co-owner, as a general rule, is not
adverse or hostile to the other co-owners.
What is Public, Peaceful & Uninterrupted
Possession? Exception: When there is valid repudiation of the
It must be known to the owner. The possession must co-ownership, acquisitive prescription shall start to
not be secret or clandestine. run from the time the repudiation is made known to
1. Acquired without violence the other co-owners. Reason: Once a co-owner
2. No natural or civil interruption repudiates (or rejects) the co-ownership, the
possesson of the co-owner becomes adverse or
hostile.

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Note: In a constructive implied trust (created by law ownership over a parcel of land at Dipintin,
to prevent fraud or unjust enrichment), there is no Quirino which was owned by X. It was further
need for repudiation of the co-ownership. Reason: alleged that as early as 1940’s or 1950’s, the
The possession of the guilty co-owner is adverse or subject property had been in possession of X and
hostile from the very moment the constructive implied that the Heirs of X had been cultivating the said
trust started. land personally and through their tenants. The
issue arose in 1997 when the heirs were trying to
Was X able to prove that its predecessors in pay arrears on the property at the Treasurer’s
interest have been in open, continuous, exclusive Office, the heirs were informed that the property
and notorious possession under a bona fide had been declared for taxation by the Sps. Y. It
claim of ownership since June 12, 1945 or was discovered that the Sps. purchased the
earlier? property from a certain Z who was supposedly
A: NO, X failed to squarely address the CA's finding issued a patent and a corresponding Original
that the records do not show proof of how X’s Certificate of Title (OCT) in 1980. The RTC
predecessor in interest came to own the Subject dismissed the complaint stating that the Heirs
Land and how this was inherited. These are crucial have failed to establish clear and convincing
facts that X needed to establish to show that its evidence of their public, peaceful and
predecessor-in-interest had a prior valid claim of uninterrupted possession of the property. The
ownership over the Subject Land. Precisely, San CA reversed the RTC decision, highlighting that
Pedro's claim of ownership rests on these crucial there were several uncontroverted facts that
facts, and without them such claim becomes prove there was no natural interruption of
tenuous. With these facts missing, the Court wholly possession of the said land by the heirs and
agrees with the CA that "evidence on record is therefore prescription had set in, therefore
insufficient to prove that X’s predecessor-in-interest granting the complaint. Did the CA err in
possessed or occupied the subject land in the reversing the decision of the RTC?
concept of an owner since June 12, 1945, or earlier."
Also, the evidence that Y adduced to disprove X's A: No. Under Section 11 of the Public Land Act, only
claim of ownership, including tax declarations dated public lands suitable for agricultural purposes can be
1941, cast serious doubt on DMCI's evidence to disposed by virtue of a homestead patent application.
show its and its predecessors-in-interest open, The rule is well-settled that an OCT issued on the
continuous, exclusive and notorious possession and strength of a homestead patent partakes of the
occupation since June 12, 1945 or earlier. (D.M. nature of a certificate of title only when the land
Consunji, Inc. v. Republic, G.R. No. 233339 disposed of is really part of the disposable land of the
(Resolution), February 13, 2019) public domain. The open, exclusive, and undisputed
possession of alienable public land for the period
It is only when alienable and disposable lands are prescribed by law creates the legal fiction whereby
expressly declared by the State to be no longer the land, upon completion of the requisite period, ipso
intended for public service or for the development of jure and without the need of judicial or other sanction,
the national wealth that the period of acquisitive ceases to be public land and becomes private
prescription can begin to run. (Heirs of Delfin v. property. In the case of Heirs of Santiago v. Heirs of
National Housing Authority, GR 193618, November Santiago, wherein the Court held that since the
28, 2016) petitioners therein were able to prove their open,
continuous, exclusive, and notorious possession and
The period of possession prior to the declaration that occupation of the land for several decades, such land
land is alienable and disposable agricultural land is was deemed to have already been acquired by the
included in the computation of possession for petitioners therein by operation law, thus segregating
purposes of acquiring registration rights over a such land from the public domain. Open, exclusive,
property so long as the land has already been and undisputed possession of public land for more
declared as alienable and disposable at the time of than 30 years by a person in accordance with Section
the application for registration. (AFP Retirement and 48(b) of the Public Land Act creates the legal fiction
Separation Benefits System v Republic of the whereby the said land, upon completion of the
Philippines, G.R. No. 180086, 2014) requisite period of possession, ipso jure became
private property. (Heirs of Spouses Suyam v. Heirs
Q: The Heirs of X filed a complaint against Sps. Y of Julaton, G.R. No. 209081, June 19, 2019)
for recovery of Ownership, Cancellation of Title,
Annulment of Sale, Reinstatement of Title, What properties are not subject to acquisition
Reconveyance and Damages before the MCTC of prescription?
Maddela-Natigpuan, Quirino. It was alleged in the 1. Properties of public dominion (Art. 1113)
complaint that the Heirs of X have a valid claim of 2. Intransmissible rights

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3. Movables possessed through a crime (Art. allegations in the complaint). In either case,
1133) defendant wins.
4. Registered land (P.D. 1529, Sec. 47)
Note: For immovable property, if the action is based
Who can renounce ownership obtained by on fraud, the prescriptive period (for extinctive
acquisitive prescription ? prescription) is 4 years from discovery of fraud.
Persons with capacity to alienate may renounce
prescription already obtained but not the right to
prescribe in the future.

Renunciation may be express or tacit. Prescription is

deemed to have been tacitly renounced; renunciation
results from the acts which imply abandonment of
right acquired. (Art. 1112)

Creditors and persons interested in making

prescription effective may avail it themselves
notwithstanding express or tacit renunciation. (Art.
1114)

What is Prescription of Actions?

It is a mode of losing rights and actions by mere lapse
of time fixed by law. This is extinctive prescription or
the statute of limitations.

Extinction of rights and actions; it is also referred to

as limitation of actions (Morales v. CFI, GR No. L-
52278, 1980) which implies that actions to enforce or
preserve a right or claim must be filed in court within
a certain period of time.

What are the Prescriptive Periods?

Prescriptive periods to recover movables and

immovables
1) Movables (Art. 1132)
a) 4 years with good faith & just title
b) 8 years if without

2) Immovables (Art. 1134 & 1137)

a) 10 years with good faith & just title
b) 30 years if without

Note: The prescriptive periods are the same for

dismissal of the complaint based on acquisitive
prescription and extinctive prescription. In the first,
dismissal of the complaint is substantive because the
defendant is already the owner of the property based
on acquisitive prescription. Therefore, the complaint
will be dismissed on the ground of no cause of action
(but only after trial and presentation of evidence to
establish the elements of acquisitive prescription). In
the second, dismissal of the complaint is procedural
since the plaintiff did not file the complaint on time
based on extinctive prescription. Therefore, the
complaint will be dismissed on the ground that the
action has already prescribed (no need for trial since
this can be determined by the court based on the

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WHEN PRESCRIPTION DOES NOT APPLY

IMPRESCRIPTIBLE
1. Criminal actions A criminal can never acquire, through prescription, movables possessed
through a crime (Art. 1133). This is because the possession of a criminal is
in the grammatical degree. Therefore, the action to recover movables from
a criminal is imprescriptible.

3) Registered lands Title to lands registered under the Torrens System cannot be acquired by
prescription or adverse possession as against the registered owner or
hereditary successor (PD 1529). Registered land is protected against
adverse possession by a third party that may lead to loss of ownership based
on acquisitive prescription.
4) Actions to demand right of way; Imprescriptible
to abate nuisance
5) Actions to quiet title if plaintiff is Imprescriptible
in possession
6) Void contracts Complaint for declaration of nullity of a contract is imprescriptible

Note: An action to annul a voidable contract prescribes after 4 years

7) Actions to demand partition; For acquisitive prescription, as a general rule, a co-owner cannot acquire
distinguished from laches sole and exclusive ownership of the co-owned property because possession
of a co-owner is not adverse or hostile. However, as an exception, if there is
a clear and unequivocal act of repudiation by a co-owner that is made known
to the other co-owners and the evidence is clear and convincing (and all the
requisites for acquisitive prescription are present), then a co-owner may
acquire sole and exclusive ownership of the co-owned property based on
acquisitive prescription.

For extinctive prescription, a co-owner may file a complaint for judicial

partition at anytime. It is imprescriptible.
8) Property of public dominion Property of public dominion cannot be acquired by prescription for these are
outside the commerce of man.

Right of reversion or reconveyance to the State of things which are not

susceptible of being appropriated is not barred by prescription. (De Leon, p.
758)

Land of the public domain must be declared alienable and disposable either
by the President or the Secretary of the DENR to be the subject of private
ownership. The period of possession prior to the reclassification of the land
as disposable cannot be considered in reckoning the prescriptive period in
favor of the possessor. (Republic v. De Guzman Vda. De Joson, GR No.
163767, 2014)

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Q: X purchased from Y a parcel of land and tried reconveyance of fraudulently registered real property
to register the Deed of Absolute Sale with the is ten (10) years from the date of the issuance of the
Registry of Deeds in 1991. X was successful in certificate of title. This ten-year prescriptive period
having the Deed annotated on the Transfer begins to run from the date the adverse party
Certificate of Title (TCT), but he was not able to repudiates the implied trust, which repudiation takes
cause the transfer of the Torrens title in his name. place when the adverse party registers the land. On
X discovered that the TCT had been stamped as the other hand, when the consent is totally absent
“cancelled” and were replaced by subsequent and not merely vitiated, the contract is void. An action
Torrens titles in which transactions were made for reconveyance may also be based on a void
between Y and Z in 1996, and then from Z to A contract. When the action for reconveyance is based
Corporation in 2005. X filed a complaint before on a void contract, as when there was no consent on
the RTC in 2014, and such complaint is an action the part of the alleged vendor, the action is
for reconveyance. The RTC dismissed the imprescriptible. Whether an action for reconveyance
complaint on the ground of prescription since an prescribes or not is therefore determined by the
action for reconveyance of real property based nature of the action, that is, whether it is founded on
on an implied constructive trust arising from a claim of the existence of an implied or constructive
fraud prescribes ten (10) years after the issuance trust, or one based on the existence of a void or
of title in favor of the defrauder. Here, the inexistent contract. Here, X’s action should be
complaint was filed in 2014, more than ten (10) characterized primarily as one for reconveyance
years after the transaction was made in 1996. Has based on a void contract because when the
the action for reconveyance prescribed? transaction was made in 1996, Y had no more title to
the property, which he sold to X in 1991. This means
A: NO. There are two (2) kinds of actions for that Z could not have acquired anything in 1996, and
reconveyance. On one hand, Article 1144 (2) of the it follows that A Corporation purchased nothing from
Civil Code states that the prescriptive period for the Z in 2005. Thus, the action for
reconveyance has not prescribed. (Gatmaytan v. Misibis Land, Inc., G.R. No. 222166, June 10, 2020.)

OTHER ACTIONS (Arts. 1140-1149)

10 years Mortgage action (Art. 1142)

Upon written contract
Obligations arising from law
Enforce court judgment (Art. 1144)
Reconveyance based on implied constructive trust
6 years Oral Contract
Quasi Contract (Art. 1145)
4 years Injury to rights
Quasi Delict or Tort (Art. 1146)
Rescission of rescissible contract
Annulment of voidable contract

1 year Forcible entry

Unlawful detainer
Oral Defamation (Art. 1147)
5 years Other actions whose periods are not fixed by law (Art. 1149)

Prescription starts from the day the cause of action 3. When the debtor makes a written
accrues. (Art. 1150, NCC) acknowledgement of the debt (Art. 1155)

When is there Interruption of the Period in Laches

Extinctive Prescription?
1. When a complaint is filed in court What are the Requisites?
2. When a written extrajudicial demand is 1. The conduct of the defendant or one under
served by the creditor on the debtor whom he claims, gave rise to the situation

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complained of
2. There was delay in asserting a right after
knowledge of the defendant's conduct and
after an opportunity to sue
3. Defendant had no knowledge or notice that
the complainant would assert his right
4. There is injury or prejudice to the defendant
in the event relief is accorded to the plaintiff.
(Ignacio v. Basilio, G.R. No. 122824, 2001)

Cases:
There is laches when a party was negligent or has
failed "to assert a right within a reasonable time," thus
giving rise to the presumption that he or she has
abandoned it. Laches has set in when it is already
inequitable or unfair to allow the party to assert the
right. (Sps. Aboitiz v. Sps. Po, G.R. No. 208450 and
208497, 2017)

In actions for reconveyance of property predicated on

the fact that the conveyance complained of was null
and void ab initio, a claim of laches would be
unavailing. Laches is a doctrine in equity and our
courts are basically courts of law and not courts of
equity. Equity, which has been aptly described as
"justice outside legality," should be applied only in the
absence of, and never against, statutory law.
Aequetas [nunquam] contravenit legis. The positive
mandate of Art. 1410 of the New Civil Code
conferring imprescriptibility to actions for declaration
of the inexistence of a contract should pre-empt and
prevail over all abstract arguments based only on
equity. Certainly, laches cannot be set up to resist the
enforcement of an imprescriptible legal right, and
petitioners can validly vindicate their inheritance
despite the lapse of time. (J. Bellosillo: Heirs of
Ingjug-Tiro v. Spouses Casals, G.R. No. 134718,
2001)

Similarly, laches do not apply to void ab initio

contracts. The Court ruled that a sale of a parcel of
land in violation of the five-year prohibition on the
alienation of land acquired via patent application is
void and produces no legal effect. As successors-in-
interest of Alido, petitioners' right to challenge the
sale between Alido and respondent cannot be barred
by laches as it was in violation of the restriction on
the sale of land acquired through free patent,
emphasizing the rule that laches, being based on
equity, does not apply if the assailed contract is void
ab initio. (J. Hernando: Heirs of Eliseo Bagaygay v.
Heirs of Anastacio Paciente, G.R. No. 212126, 2021)

--end of topic--

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VI. LAND TITLES & DEEDS A. REGALIAN DOCTRINE

Regalian Doctrine
TOPIC OUTLINE UNDER THE SYLLABUS Under the Regalian doctrine, all lands of the public
domain belong to the State, which is the source of
A. REGALIAN DOCTRINE any asserted right to ownership of land. All lands of
the public domain, waters, minerals, coal, petroleum
B. NATIONALITY RESTRICTIONS ON LAND and other mineral oils, all forces of potential energy,
OWNERSHIP fisheries, forests, or timber, wildlife, flora and fauna,
and natural resources belong to the state. With the
C. REGISTRY OF PROPERTY exception of agricultural lands, all other natural
resources shall not be alienated. (§ 2, Article XII,
D. TORRENS SYSTEM; CERTIFICATE OF TITLE 1987 Constitution)
(PD 1529, secs. 39 and 44)
The word “agricultural land” as used in the
E. ORIGINAL REGISTRATION (PD 1529) constitutional provision is a generic term excluding
1. Ordinary Registration timber and mineral land. It includes agricultural land
a. Who May Apply proper as well as residential, industrial, and
b. Decree of Registration commercial land.
c. Review of Decree of Registration;
Innocent Purchaser for Value (IPV); Anyone who applies for confirmation of imperfect title
Rights has the burden of proof to overcome the presumption
that the land sought to be registered forms part of
F. CONFIRMATION OF IMPERFECT TITLES (RA public domain.
11573)
To overcome this presumption, incontrovertible
G. SUBSEQUENT REGISTRATION evidence must be established that the land subject of
1. Voluntary Dealings the application is alienable or disposable.
2. Involuntary Dealings
a. Adverse Claims The Public Land Act or C.A. No. 141, until this day, is
b. Notice of Lis Pendens the existing general law governing the classification
and disposition of lands of the public domain, except
H. NON-REGISTRABLE PROPERTIES for timber and mineral lands. "Under the Regalian
doctrine embodied in our Constitution, land that has
I. DEALINGS WITH UNREGISTERED LANDS not been acquired from the government, either by
purchase, grant, or any other mode recognized by
J. ASSURANCE FUND law, belongs to the State as part of the public
domain." (Republic v. Jaralve, G.R. No. 175177, Oct.
K. RECONSTITUTION OF TITLE 24, 2012 citing Republic v. Heirs of Juan Fabio, G.R.
No. 159589, Dec. 23, 2008)

There is no argument that there must be some sort

of a presidential declaration that a piece of land
classified under Section 59 (d) of the Public Land Act
is no longer necessary for public use or public service
before it can be leased to private parties or private
entities or private corporations. However, we hold
that the same need not be exclusively in the form of
a presidential proclamation. Any other form of
presidential declaration is acceptable.

We hold that Section 63, in relation to Section 61, of

C.A. No. 141 gives leeway to the President and the
DENR Secretary in choosing the manner,
mechanism or instrument in which to declare certain
alienable or disposable public lands as unnecessary
for public use or public service before these are
disposed through sale or lease to private parties,
entities or corporations.

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Hence, all alienable and disposable lands c) Any further grant by Government on the
enumerated in Section 59, from (a) to (d), suitable for same land is null and void.
residence, commercial, industrial or other productive d) Title is indefeasible 1 YEAR after issuance
purposes other than agricultural, under Chapter VIII of the patent.
of the same C.A. No. 141, must be subject to a
presidential declaration that such are exempt from
EXCEPTION: If title was secured by fraud and
public use or public service before they can be sold
or leased, as the case may be, but such need not be misrepresentation. Well-settled is the doctrine
solely through a presidential proclamation. that the registration of a patent under the Torrens
System does not by itself vest title; it merely
This Court has time and again ruled that to prove that confirms the registrant’s already existing one.
a public land is alienable and disposable, what must
be clearly established is the existence of a positive Concept of Native Title; Time Immemorial
act of the government. This is not limited to a Native title refers to pre-conquest rights to lands and
presidential proclamation. Such fact could domains which, as far back as memory reaches,
additionally be proven through an executive order; an have been held under a claim of private ownership by
administrative action; investigative reports of Bureau Indigenous Cultural Communities/Indigenous
of Lands investigators; and a legislative act or a Peoples (ICCs/IPs), have never been public lands
statute. (Alde v. City of Zamboanga, G.R. No. and are thus indisputably presumed to have been
214981, November 4, 2020) held that way since before the Spanish Conquest. (§
3(L), Ch. III, R.A. No. 8371)
To prove that the land subject of the application for
registration is alienable, an applicant must establish NOTE: The Regalian Doctrine does not negate
the existence of a positive act of the government native title.
such as a presidential proclamation or an executive
order; an administrative action; investigation reports
of Bureau of Lands investigators; and a legislative act B. NATIONALITY RESTRICTIONS ON
or statute, and the applicant may also secure a LAND OWNERSHIP
certification from the Government that the lands
applied for are alienable and disposable. (Aranda v.
Which Natural Resources May Be Alienated
Republic, G.R. 172331, 2011)
All natural resources, except agricultural lands, shall
not be alienated. The State shall have full control and
When Conclusively Presumed to Have Performed supervision over the exploration, development, and
All Conditions Essential to a Government Grant utilization of natural resources. However, the State
by Operation of Law may directly undertake such activities, or enter into
a) Those who by themselves or through their co-production, joint venture, or production-sharing
predecessors-in-interest have been in agreements with Filipino citizens, corporations, or
OPEN, CONTINIOUS, EXCLUSIVE, AND associations, whose capital is owned by at least 60%
NOTORIOUS possession and occupation. Filipino citizens. The agreement may be for a period
b) Land is of public domain and is alienable and not exceeding twenty-five (25) years and is
disposable. renewable for not more than twenty-five (25) years.
c) Land is not covered by existing certificates (§ 2, Article XII, 1987 Constitution)
of title or patents under bona fide claim of
ownership for at least 20 YEARS The President may enter into agreements with
foreign-owned corporations involving technical or
immediately preceding the filing of the
financial assistance for large-scale exploration,
application for confirmation of title EXCEPT development, and utilization of minerals, petroleum,
when prevented by war or force majeure. and other mineral oils. (Id.)

Effects Alienable lands of the public domain shall be limited

a) Shall be entitled to a certificate of title. to agricultural lands. Private corporations or
associations may not hold such alienable lands
(Deed of conveyance issued by government except by lease, for a period not exceeding twenty-
patent/grant). five (25) years, renewable for not more than twenty-
five (25) years, and not exceeding one-thousand
Registration with the ROD: mandatory, it is the (1,000) hectares in area. On the other hand, citizens
of the Philippines may lease not more than five
operative act to convey and transfer title.
hundred (500) hectares, or acquire not more than
b) Land ceases to be part of public domain &
twelve (12) hectares, by purchase, homestead, or
ownership vests to the grantee. grant. (§ 3, Article XII, 1987 Constitution)

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As stated, the constitutional ban against foreigners The land acquired shall be primarily, directly and
applies only to ownership of Philippine land and not actually used by the transferee in the performance or
to the improvements built thereon. The purpose of conduct of his business or commercial activities in
this is to conserve national patrimony (Beumer v. the areas of agriculture, industry and services,
Amores, G.R. No. 195670, December 3, 2012). including the lease of land, but excluding the buying
and selling thereof. He shall not engage in activities
Who is Qualified to Be a Transferee of Private included in the Negative List or those wherein
Lands investment rights have been granted to him. (§ 5,
No private lands shall be transferred or conveyed Rule XII, Omnibus Investment Code)
except to individuals, corporations, or associations
qualified to acquire or hold lands of the public domain Who May Purchase Agricultural Land
except in cases of hereditary succession. (§ 7, Article The following may purchase any tract of public
XII, 1987 Constitution) agricultural land disposable:
• Aliens are disqualified from acquiring private a. Any citizen of lawful age of the Philippines;
lands; such right is reserved only to Filipino b. Any citizen not of lawful age who is a head
citizens or corporations at least sixty percent of a family;
(60%) of the capital of which is owned by c. Any corporation or association of which at
Filipinos. Even so, citing case law, aliens are least sixty percent (60%) of the capital stock
absolutely not allowed to acquire public or or of any interest in said capital stock
private lands — save only in constitutionally belongs wholly to citizens of the Philippines,
recognized exceptions. (Philip Matthews v. and which is organized and constituted
Benjamin and Joselyn Taylor, G.R. No. under the laws of Philippines; and
164584, June 22, 2009) d. Corporate bodies organized in the
• The constitutional provision which enables Philippines authorized under their charters
aliens to acquire private lands does not to do so;
extend to testamentary succession for
otherwise the prohibition will be for naught In case of individuals, the area shall not exceed one
and meaningless. (Palacios v. Ramirez, hundred and forty-four (144) hectares; if corporation
G.R. No. L-27952, February 15, 1982) or association, the area shall not exceed one
thousand and twenty-four (1,024) hectares.
A natural-born citizen of the Philippines who has lost Partnerships shall be entitled to purchase one
his Philippine citizenship may be a transferee of hundred and forty-four (144) hectares for each
private lands. (§ 8, Article XII, 1987 Constitution) The member but the total area shall not exceed one
transferee must have the legal capacity to enter into thousand and twenty-four (1,024) hectares as
a contract to be a transferee. (§ 2, Batas Pambansa authorized for associations and corporations. (§ 22,
Blg. 185) Commonwealth Act No. 141)
• A transferee may acquire not more than two
(2) lots which should be situated in different The limitation on one hundred and forty-four (144)
municipalities or cities. The maximum area hectares shall not apply to grants, donations,
is 5,000 square meters for urban lands and transfers made to a province, municipality or branch
three (3) hectares in case of rural land to be or subdivision of the Government for the purposes
used for business or other purposes. A conducive to the public interest. Such land shall not
transferee who has already acquired urban be alienated, encumbered, or otherwise disposed of
land shall be disqualified from acquiring rural in a manner affecting its title, except when authorized
land and vice versa. However, if such has by Congress. (§ 60, Commonwealth Act No. 141)
been disposed of, then he shall be eligible to
acquire rural land and vice versa (§ 1 and 4, Any person, corporation, association or partnership
Rule XII, Omnibus Investment Code). disqualified from purchasing public land for
• In case of married couples, one of them may agricultural purposes may lease land included under
avail of the privilege. If both shall avail of this title suitable for industrial or residential purposes,
such, the total area shall not exceed the but the lease shall only be valid while such land is
maximum area of one thousand (1,000) used for the purposes referred to. (Id.)
square meters. (Id.)
• If the transferee already owns urban or rural No other person, corporation, association, or
lands for residential purposes, he is still partnership other than those mentioned may acquire
entitled to be a transferee of additional urban or own agricultural public land or land of any other
or rural lands for residential purposes as denomination or classification, which is at the time or
long as it does not exceed the maximum was originally, really or presumptively, of the public
area authorized. (Id.) domain. This applies to any permanent improvement
thereon, or any real right on such land and
improvement. (§ 23, Commonwealth Act No. 141)
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1. Those who, at the date when the Philippine the subject property is baseless. Under Article 1126
Constitution took effect, held such lands, of the Civil Code, acquisitive prescription of
improvements, and real rights, and acquired ownership of lands registered under the Land
the same under the laws and regulations in Registration Act shall be governed by special laws.
force at the date of such acquisition, shall be PD 1529 provides that no title to registered land in
authorized to continue holding the same if derogation of the registered owner shall be acquired
they are qualified under the qualifications set by adverse possession. Consequently, in this instant
in Section 22. (Id.) case, proof of possession by the respondents is
a. They shall not encumber, convey, immaterial and inconsequential. (D.B.T. Mar-Bay
or alienate the same to persons, Construction v. Panes, G.R. No. 167232, July 31,
corporations, associations, or 2009)
partnerships not included in Section
22 except by reason of hereditary Acquisitive vis-à-vis Extinctive Prescription
succession, duly legalized and Ownership and possession of registered land cannot
acknowledged by competent be obtained or acquired by prescription no matter the
courts. (Id.) length of time of one's physical occupation and
exercise of juridical rights of possession over the
Under the Constitution, aliens may not acquire land. Hence, since ownership cannot be gained
private or public agricultural lands, including through this means, it follows that the registered
residential lands. (Krivenko v. The Register of Deeds owner is not automatically dispossessed of the
of the City of Manila, G.R. No. L-630, November 15, registered land and foreclosed from getting it back
1947) through the passage of time as the registered owner
may resort to appropriate remedies to recover the
Aliens, whether individuals or corporations, are property. Appropriateness, however, requires that
disqualified from acquiring lands of the public the rule on extinctive prescription as explained below
domain. Hence, they are also disqualified from has not set in.
acquiring private lands. (Muller v. Muller, G.R. No.
149615, August 29, 2006) Extinctive prescription refers to the rule that bars
even the registered owner from availing the remedies
An aggregate ownership limit of 5 hectares of to vindicate their right over the subject lot. the result
agricultural land is imposed by R.A. No. 6657. of the successful invocation of this rule is that while
the registered owner keeps their substantive right
over the lot, since acquisitive prescription is not a
C. REGISTRY OF PROPERTY mode of acquiring ownership of a registered
land, they are nonetheless prevented by law from
Registration invoking the legal remedies otherwise available to
Registration is a mere ministerial act by which a them. When extinctive prescription sets in, the
deed, contract, or instrument is sought to be damage done to the registered owner is not
inscribed in the records of the Office of the Register recognized as a legal injury and they do not stand to
of Deeds and annotated at the back of the certificate enjoy any legal relief so far as their property (in both
of title covering the land subject of the deed, contract, senses of title or right and the tangible lot) is
or instrument. (Ombudsman v. Manalastas, G.R. No. concerned. (Heirs of Yadao v. Heirs of Caletina, G.R.
208264, July 27, 2016) No. 230784, February 15, 2022)

The registration is intended to protect the buyer

against claims of third persons arising from D. TORRENS SYSTEM; CERTIFICATE OF
subsequent alienations by the vendor, and is TITLE (P.D. No. 1529)
certainly not necessary to give effect as between the
parties to their deed of sale. (Galanza v. Nuesa, G.R. Torrens System
No. L-6628, August 31, 1954) The Torrens System is a system of registration of
transactions with interest in land the object of which
Article 1126 vis-à-vis Section 47 of P.D. No. 1529 is, under governmental authority, to establish and
Article 1126 of the Civil Code in connection with certify the ownership of an absolute and indefeasible
Section 47 of PD 1529 provides that no title to title to realty, and to simplify its transfer. (Grey Alba
registered land in derogation of the rights of the v. De la Cruz, G.R. No. 5246, September 16, 1910
registered owner shall be acquired by prescription or citing Hogg on Australian Torrens System)
adverse possession. Possession is a mere
consequence of ownership where land has been
Title to real property
registered under the Torrens system, the efficacy and
A title to real property is the evidence of the owner’s
integrity of which must be protected. The
right or extent of his interest, by which he can
respondent’s claim of acquisitive prescription over
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maintain control and assert his right to exclusive

possession and enjoyment of the property. Registration of title distinct from acquisition
(Evangelista v. Santiago, G.R. 157447, April 29, The purpose of land registration is not the acquisition
2005 citing Narciso Peña, et al., Registration of Land of lands but only the registration of title which the
Titles and Deeds 3 (1994 ed.)) applicant already possessed over the land. (Republic
v. CA, G.R. Nos. L-43105, L-43190, August 31, 1984)
Deed Registration under the Torrens System does
A deed is an instrument in writing by which any real not create or vest title
estate or interest therein is created, alienated, Registration under the Torrens system, not being a
mortgaged, or assigned, or by which title to any real mode of acquiring ownership, does not create or vest
estate may be affected in law or equity. title. The Torrens certificate of title is merely an
evidence of ownership or title in the particular
Land registration property described therein. (Casimiro Development
Land registration is a judicial or administrative Corporation vs. Mateo, G.R. No. 175485, July 27,
proceeding whereby a person’s claim over a 2011)
particular land is determined and confirmed or
recognized so that such land and the ownership Securing a title in one’s own name does not operate
thereof may be recorded in a public registry. to vest ownership upon him of the subject land. A
certificate of title is merely an evidence of ownership
Purposes of land registration under the or title over the particular property described therein.
Torrens System It cannot be used to protect a usurper from the true
owner; nor can it be used as a shield for the
(1) Quiet title to the land commission of fraud; neither does it permit one to
To quiet title to the land and to stop forever any enrich himself at the expense of others. Its issuance
question as to the legality of said title, except claims in favor of a particular person does not foreclose the
which were noted at the time of registration, in the possibility that the real property may be co-owned
certificate, or which may arise subsequent thereto. with persons not named in the certificate, or that it
(Legarda v. Saleeby, G.R. No. L-8936, October, 2, may be held in trust for another person by the
1915) registered owner. (Ulay v. Bustamante, GR 231721
- Relieves the land of unknown claims & 231722, March 18, 2021)
- Gives every registered owner complete
peace of mind The inclusion of areas in excess of the original area
as reflected in TCT No. 722 and in subsequent
certificates of title did not vest any right of private
(2) Guarantee the integrity of land titles
ownership because, as mentioned in the CA Decision
To guarantee the integrity of land titles and to protect
and confirmed by jurisprudence that it cited,
their indefeasibility once the claim of ownership is
registration of lands under the Torrens system is not
established and recognized.
a mode of acquiring ownership. (Belizario v.
Department of Environment and Natural Resources,
(3) Avoid possible conflicts
The main purpose of the Torrens system is to avoid G.R. No. 231001 (Resolution), March 24, 2021)
possible conflicts of title to real estate and to facilitate
transactions relative thereto by giving the public the Laws governing land registration
right to rely upon the face of a Torrens certificate of 1. Property Registration Decree (P.D. No.
title and to dispense with the need of inquiring further. 1529, as amended)
(Sps. Peralta v. Heirs of Abalon, G.R. No. 183448, 2. Cadastral Act (Act 2259, as amended, now
June 30, 2014) in Sections 35 to 38, P.D. No. 1529)
3. Public Land Act (C.A. No. 141, as amended)
(4) Facilitate transactions relative thereto 4. Indigenous Peoples’ Rights Act (R.A. No.
To facilitate transactions relative thereto by giving the
8371)
public the right to rely upon the face of a Torrens
certificate of title and to dispense with the need of 5. Emancipation Decree (P.D. No. 27, as
inquiring further, except when the party concerned amended)
has actual knowledge of facts and circumstances that 6. Comprehensive Agrarian Reform Law of
should impel a reasonably cautious man to make 1988 (R.A. No. 6657, as amended)
such further inquiry. (Sps. Peralta v. Heirs of Abalon,
G.R. No. 183448, June 30, 2014) Nature of land registration proceedings under
P.D. No. 1529
(5) Best evidence of ownership
1. Judicial in character and not merely
To issue a certificate of title to the owner which shall
be the best evidence of his ownership of the land administrative

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2. A proceeding in rem 4. Prepare and keep an Index system which

contains the names of all registered owners
Judicial in character and lands registered in their names. (P.D.
In a registration proceeding, the judgment of the court No. 1529, § 12)
confirming the title, and ordering its registration in
one’s name constitutes, when final, res judicata Function of ROD ministerial in character
against the whole world. (Ronald Ting v. Heirs of The function of the ROD with reference to registration
Lirio, G.R. No. 168913, March 14, 2007) of deeds, encumbrances, instruments, and the like is
ministerial in nature, provided the applicant
A proceeding in rem complies with all the requisites. (Baranda v. Gustilo,
In land registration proceedings, being in rem, there G.R. No. 81163, September 26, 1988)
is no need to personally notify the owners or
claimants of the land sought to be registered to vest Basic formal requirements of deeds and other
the courts with power and authority over the res. voluntary instruments: (See P.D. No. 1529, §
(Guido-Enriquez v. Victorino, et al., G.R. No. 180427,
112)
September 30, 2013)
1. In a public instrument
Administration of the Torrens System 2. Signed by the person/s executing the same
1. Land Registration Authority (LRA) 3. Executed in the presence of least 2
Agency charged with the efficient execution witnesses present who shall also sign the
of the laws relative to the registration of same
lands, under the executive supervision of the 4. Acknowledged to be the free act and deed
DOJ. (P.D. No. 1529, § 4) of the person/s executing the same before a
2. Register of Deeds (ROD) notary public or other public officer
The office of the ROD is the public repository authorized to take acknowledgement
of records and instruments affecting
registered or unregistered lands and chattel It is enough that in the ROD’s opinion, an instrument
mortgages in the province or city wherein is registrable for him to register it. The act being an
such office is situated. (P.D. No. 1529, § 10) administrative act does not contemplate notice to and
hearing of interested parties. (Ledesma v. Villaseñor,
Functions of the LRA: (SAC) G.R. No. L-18725, March 31, 1965)
1. Extend Speedy and effective assistance
to the Dept. of Agrarian Reform, the Land The determination of whether a document is valid or
Bank, and other agencies in the not is a function that belongs to a court of competent
implementation of the land reform program jurisdiction and not to the ROD. (Almirol v. ROD of
of the government; Agusan, G.R. No. L-22486, March 20, 1968)
2. Extend Assistance to courts in ordinary
and cadastral land registration proceedings; Instances when the ROD may validly deny
and
registration of a voluntary instrument:
3. Be the Central repository of records
1. Where there is more than 1 copy of the
relative to original registration of lands titled
under the Torrens system, including the owner’s duplicate certificate of title and not
subdivision and consolidation plans of titled all such copies are presented to the
lands. (P.D. No. 1529, § 6(2)) ROD.(Balbin v. ROD, G.R. No. L-20611,
1969);
Functions of the ROD: (PRIDe) 2. Where the voluntary instrument bears on its
1. Immediately Register an instrument face an infirmity (e.g., where the property is
presented for registration dealing with real or presumed to be conjugal but the instrument
personal property which complies with the of conveyance bears the signature of only
requisites for registration; one spouse);
2. See to it that said instrument bears the 3. Where the validity of the instrument sought
Proper documentary stamps and that the to be registered is in issue in a pending court
same are properly cancelled; suit, notice of which must be given to parties;
3. If the instrument is not registrable, Deny the 4. Where required certificates or documents
registration thereof and inform the presentor such as DAR clearance, copy of latest tax
of such denial in writing, stating the ground declaration, are not submitted
or reason therefore, and advising him of his
right to appeal by consulta in accordance Note: Any disposition of private agricultural
with Sec. 117 of P.D. No. 1529; and lands made prior to June 15, 1988, when R.A.
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No. 6657 took effect, must be registered within 3 8. As between two innocent persons, the one
months from said date or on or before who made it possible for the wrong to be
September 13, 1988 to be valid. (R.A. No. 6557, done will bear the resulting loss.
§ 6) Thus, on this ground, the proper DAR 9. He who registers first is preferred in right
clearances must first be secured. insofar as the third persons are concerned.
10. Where two certificates of title include the
5. Where the transfer/sale involves a total
same land, the certificate that is earlier in
aggregate landholding of 5 has. and below
data prevail.
of a particular landowner and the transferee
will not own an aggregate of more than 5
In case land has been registered under the Land
has., the transfer is legal and proper but a
Registration Act in the name of two different
DAR clearance is needed for the purpose of persons, the earlier in date shall
monitoring and as requisite for registration. prevail. (Macutay v. Samoy, G.R. No. 205559,
(DAR Administrative Order No. 05-06); December 2, 2020)
6. The ROD may also refuse to register a
private document since Section 112 of P.D. 11. A forged document of sale may become the
No. 1529 provided that deeds of root of a valid title if the certificate of title has
conveyances affecting lands should be already been transferred from the name of
verified and acknowledged before a notary the true owner to the name of the forger or
public or other public officer authorized by the name indicated by the forger before the
law to take acknowledgement. (Gallardo v. Torrens Certificate of Title is issued to the
IAC, G.R. No. L-67742, 1987) purchaser in good faith and for value.
12. Titles derived from a void title are also void.
In cases where the ROD is in doubt 13. A certificate of title shall not be subject to
When the ROD is in doubt as to the proper action to collateral attack.
take on an instrument or deed presented to him for
registration, he should submit the question to the
Administrator of the LRA en consulta. (P.D. No. 1529, E. ORIGINAL REGISTRATION
§ 117)
Original Registration under P.D. No. 1529
General principles underlying the Torrens A proceeding brought before the RTC (as a land
System registration court) to determine title or ownership of
1. The Torrens Certificate of Title is the best land on the basis of an application for registration or
evidence of ownership of the land. answer by a claimant in a cadastral registration.
2. The Torrens Certificate of Title is a
constructive notice to the whole world, and An Original Certificate of Title (OCT) is the first title
thus, binds the whole world. issued in the name of the registered owner by virtue
3. Claims against the land prior to the issuance of judicial/voluntary or administrative/ involuntary
proceedings. (Salao, et al. v. Salao, G.R. No. L-
of the Torrens Certificate of Title that are not
26699, Mar. 16, 1976
noted on said title are quieted or barred.
4. The Torrens Certificate of Title covering
alienable land is indefeasible or
incontrovertible after one year from the entry
of the decree of registration.
5. The Torrens certificate of Title is
imprescriptible.
6. Every person dealing with registered land in
good faith and for value may not go beyond
the title but may safely rely on the
correctness of the Torrens Certificate of
Title.
7. The person who fraudulently registered the
land in his name holds it as a mere trustee
with the obligation to reconvey the property
and the title to the true owner.

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Ordinary Registration

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Kinds of Registration - Within 5 days from filing, the court shall

1. Judicial/Voluntary/Ordinary – by filing with issue an order setting the date and hour of
the proper court; application by the private the initial hearing which shall not be earlier
individual himself than 45 days nor later than 90 days from the
2. Administrative/Involuntary/Cadastral – date of the order. (§ 23, P.D. No. 1529)
compulsory registration initiated by the
government 4. Transmittal of the application and the date
of the initial hearing, with all the documents or other
Procedure in Ordinary Land Registration evidence attached thereto, by the Clerk of Court to
Proceedings the LRA.
Under P.D. No. 1529 and C.A. No. 141, the following
requisites should all be satisfied: 5. Publication of notice of initial hearing
(mandatory).
Survey of land by the Bureau of Lands or a duly
licensed private surveyor. - Once in the Official Gazette (OG) (this
- Survey plan must be duly approved by the confers jurisdiction upon the court); and
Director of Lands. - Once in a newspaper of general circulation.
(Director of Lands v. CA, G.R. No. 102858,
2. Filing of Application for registration by the July 28, 1997)
applicant together with all the muniments1 of titles
and copies thereof with a survey plan approved by Purposes and effects of publication:
Bureau of Lands. The Clerk of Court shall not accept - To confer jurisdiction over the land applied
any application unless it is show that the applicant for upon the court
has furnished the Director of Lands with a copy of - To charge the whole world with knowledge
application and all annexes. of the application of the land involved, and
invite them to take part in the case and
Where to File? assert and prove their rights over the subject
1. MTC land
a. If there is no controversy or
opposition over the covering lots; or Effect of defective publication
b. The value of the covering lots does A defective publication of the notice of initial
not exceed PHP 100,000. (§ 34, hearing deprives the court of jurisdiction. There
Batas Pambansa Blg. 129; must be compliance with the publication of the
Superiora Locale v. Republic) order of the court setting the date and hour of the
2. RTC initial hearing which shall not be earlier than 45
a. If there are several parcels of land days nor later than 90 days from the date of the
situated in different provinces/cities order. (§ 23, P.D. No. 1529)
but belong to one owner, he must
file in the RTC of each province Note: If it is shown that the decree of registration
where different parcels of land are had included lands not included in the original
application as published, then the registration
located for registration purposes.
proceedings are null and void insofar as the land
b. When the boundaries are not
not included in the publication is concerned.
defined with the RTC of the place (Benin v. Tuason, G.R. No. L-26127, June
where it is declared for taxation 28,1974)
purposes.
c. When boundaries are definfed, a 6. Mailing and posting of notice of initial
separate plan for each portion must hearing.
be made by a separate application
for each lot must be filed with the Mailing
appropriate RTC. Within 7 days after publication of said notice in
the OG, the LRA shall mail notice to:
3. Setting of the Date of initial hearing of - Persons named in the notice
application by the RTC.

1
NOTE: Muniments of title are instruments or written evidence substantiate and prove title to his estate. (e.g., Deed of
which the applicant holds or possesses to enable him to Sale/Donation/Assignment).
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- Sec. of Public Highways, Provincial Note: While the burden of proving that the
Governor, and Mayor, if the applicant property is an alienable and disposable
requests to have the line of a public way agricultural land of the public domain falls on the
or road determined applicant, the Office of the Solicitor General has
- Sec. of Agrarian Reform, Solicitor the correlative burden to present effective
evidence of the public character of the land.
General, Director of Lands, Director of
Fisheries, and Director of Mines, if the When the State has no effective opposition,
land borders on a river, navigable except for a pro forma opposition, to controvert
stream, or shore, or on an arm of the sea an applicant's convincing evidence of possession
where a river or harbor lies and occupation, presumptions are tilted to this
- Other persons as the court may deem applicant's favor. Therefore, when an applicant is
proper shown to have been in open, continuous,
exclusive, and notorious possession of a land for
Posting the period required by law, he or she has
Posting shall be made by the sheriff in a acquired an imperfect title that may be confirmed
conspicuous place on the subject land and on the by the State. The State may not, for the simple
bulletin board of the municipal building of the reason that an applicant failed to show
municipality or city in which the land or portion documents which the State is in the best position
thereof is situated, at least 14 days before the to acquire, indiscriminately take an occupied
date of initial hearing. property and unjustly and self-servingly refuse to
acknowledge legally recognized rights evidenced
7. Service of notice upon contiguous owners, by possession, without violating due process.
occupants, and those known to have interests in the
property by the sheriff. The burden of evidence lies on the party who
- In applications for registration, there must be asserts an affirmative allegation. Therefore, if the
a notification to “all the occupants of the land State alleges that lands belong to it, it is not
and of all adjoining owners, if known; and, if excused from providing evidence to support this
allegation. This specially applies when the land in
not known, it shall state what search has
question has no indication of being incapable of
been made to find them.” (Adviento v. registration and has been exclusively occupied
Alvarez, G.R. No. 150844, August 20, 2008) by an applicant or his or her predecessor-in-
interest without opposition — not even from the
8. Filing of Answer or Opposition to the State. (Republic of the Philippines v. Spouses
application by any person whether named in the Noval, G.R. No. 170316, September 18, 2017)
notice or not (on or before the date of initial hearing,
or within such further time as may be allowed by the Effects of failure to file answer
court.). Absent any oppositor, the court will issue an
order of default pursuant to Sec. 26 of P.D. No.
Requisites of Opposition 1529.
The oppositor (DIGS):
1. Must have an Interest in the land applied General vs. Special Default
for; GENERAL SPECIAL
2. Should state the Grounds for his objection DEFAULT DEFAULT
Those persons who When a party appears
as well as the nature of his claimed interest;
did not appear and at initial hearing
3. Should indicate the Desired relief; and answer within the without having filed an
4. Should Sign and have the opposition sworn time prescribed answer and asks court
to by him or his duly authorized for time to file answer
representative. but failed to do so
within period allowed
Note: The opposition must be filed on or before
the date of initial hearing. 1. Hearing of the case by the court
2. Promulgation of judgment by the court
If only a portion of the land applied for is 3. Issuance of the order of Finality of
contested and such portion is not properly judgment and order instructing the LRA to
delimited, the court may require submission of a
issue a decree2 of confirmation and
division plan approved by the Director of Lands.
registration and OCT.

2
NOTE: Decree – issued by LRA after finality of judgment; contains technical description of land.
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Note: The issuance of the decree of registration Provincial Environment and Natural
is not done by the court. What the court issues is Resources Office (PENRO)
the order of finality of judgment and the order to - If land is less than 50 hectares –
the LRA to issue the decree. It is the LRA which CENRO Certification
issues the decree as well as the original and - If land is 50 hectares or more – PENRO
owner’s duplicate of the OCT.
Certification; and
The Clerk of Court shall: 2. Copy of the original classification of land as
1. Prepare and submit to the Judge for his alienable and disposable approved by the
signature, as soon as the Decision has DENR Secretary and certified as a true copy
become final, the corresponding order for by the legal custodian of the official records.
the issuance of the decree for all lots (Republic of the Philippines v. Santos, G.R.
covered by the decision from which no No. 191516, Jun. 4, 2014)
appeal has been interposed or on which no
motion for new trial or reconsideration has Note: It is not enough for the PENRO or CENRO to
certify that a land is alienable and disposable. The
been filed;
applicant for land registration must prove that the
2. Transmit immediately two certified copies of DENR Secretary had approved the land classification
all decisions, orders, resolution, minutes, and released the land of the public domain as
writs, notifications, and other processes alienable and disposable, and that the land subject of
after their issuance by the Court to the LRA the application for registration falls within the
through registered mail with covering letter; approved area per verification through survey by the
(Administrative Circular No. 7-96) PENRO or CENRO. (Espiritu v. Republic, G.R. No.
219070, Jun. 21, 2017 & Republic v. Raneses, G.R.
9. Entry of the decree of registration in the No. 189970, Jun. 9, 2014)
LRA. One year after the date of entry of decree, it
becomes incontrovertible and amendments will not In addition, the applicant for land registration must
be allowed except for correcting clerical errors. It is present a copy of the original classification approved
by the DENR Secretary and certified as a true copy
deemed conclusive as to the whole world.
by the legal custodian of the official records. These
- Puts an end to litigation fact must be established to the prove the land is
- Purpose of Torrens system is protected alienable and disposable. (Republic v. T.A.N
Properties, Inc., G.R. No. 154953, Jun. 26, 2008)
10. Sending of the original and owner’s
duplicate OCT to the ROD of the city or province A CENRO or PENRO certification alone is insufficient
where the property is situated for entry in his to prove the alienable and disposable nature of the
registration book. land sought to be registered. It is the original
classification by the DENR Secretary or the President
11. Entry of OCT by the ROD in the Electronic which is essential to prove that the land is indeed
alienable and disposable.
Primary Entry Book for Registered Land and delivery
of owner’s duplicate OCT to the applicant upon This rule embodies a requirement of twin
payment of the prescribed fees. certifications, consisting of: (a) a copy of the original
classification approved by the DENR Secretary or the
What to Prove and Evidence to Submit President and certified as a true copy by the legal
1. Alienability and disposability of land custodian of the official records; and (b) a certificate
2. Identity of land of land classification status issued by the CENRO or
3. A) Private ownership; or B) open, PENRO and approved by the DENR Secretary.
continuous, exclusive, and notorious
possession However, despite the stringent rule held in Republic
v. T.A.N Properties, Inc. that the absence of the twin
certifications justifies the denial of an application for
(1) Alienability and disposability of land
registration, subsequent rulings of the Supreme
Court in Republic v. Vega and Republic v. Serrano
How to prove: allowed the approval of the application based on
1. Certification from City Environment and substantial compliance. Even so Vega and Serrano
Natural Resources Office (CENRO) or were mere pro hac vice rulings and did not in any way

only to appeal)
a. Decrees dismissing application
b. Decrees of confirmation and registration (Subject
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abandon nor modify the rule on strict compliance (AFP Retirement and Separation Benefits System v.
pronounced in T.A.N Properties. (Republic v. Republic of the Philippines, G.R. No. 180086, Jul. 2,
Herederos De Ciriaco Chunaco Disteleria 2014)
Incorporadia, G.R. No. 200863, Oct. 14, 2020) Although Corporation A was able to submit a
CENRO/PENRO certification certifying the
To establish that the land sought to be registered is classification of the land as alienable and disposable,
alienable and disposable, applicants must present a a certification of land classification approved by the
copy of the original classification approved by the DENR Secretary, and a Land Classification Map, it
DENR Secretary and certified as a true copy by the should be noted that those documents pertain to a
legal custodian of the official records. Absent the different lot. It was not shown that the lot acquired by
DENR Secretary's issuance declaring the land Corporation A were included in the certifications
alienable and disposable, the land remains part of the presented. Certainly, in the absence of sufficient and
public domain. Even if X adversely possessed the convincing proof that such realty is alienable and
land, he cannot register the land since he failed to disposable land of public domain, the possessor
prove the land is alienable. (Republic v. Malijan- thereof could not acquire ownership of the same,
Javier, G.R. No. 214367, Apr. 4, 2018) much less, have the right to seek registration of title
thereto under Section 14(1) of the Property
Notation in a geodetic survey that the survey was Registration Decree. (Ususan Development
inside alienable and disposable land does not Corporation v. Republic, G.R. No. 209462, July 15,
constitute a positive government act validly changing 2020)
the classification of the land. A surveyor has no
authority to reclassify lands of public domain. Land of Mere notations appearing in survey plans are
the public domain, to be the subject of appropriation, inadequate proof of the covered properties' alienable
must be declared alienable and disposable either by and disposable character. These notations, at the
the President or the DENR Secretary. The applicant very least, only establish that the land subject of the
for land registration has the burden of overcoming the application for registration falls within the approved
presumption of State ownership by establishing alienable and disposable area per verification
through incontrovertible evidence that the land through survey by the proper government office. The
sought to be registered is alienable or disposable applicant must also present a copy of the original
based on a positive act of the government. (Republic classification of the land into alienable and
vs. De Guzman Vda. de Joson, G.R. No. 163767, disposable land, as declared by the DENR Secretary
Mar. 10, 2014) or as proclaimed by the President. Unfortunately, in
this case, the OSG has not been required to make
The property subject of the application for registration the necessary verification and has not submitted the
need not be classified as alienable and disposable two documents that it submitted in Victoria. The
agricultural land of the public domain for the entire invocation by X of Victoria in this case is, thus,
duration of the requisite period of possession. misplaced. (D.M. Consunji, Inc. v. Republic, G.R. No.
Alienable public land held by a possessor openly, 233339 (Resolution), February 13, 2019)
continuously and exclusively during the prescribed
statutory period is converted to private property by In PD 1529, registration under Section 14(1) is
the mere lapse of such period. The requirement that based on possession; whereas registration under
the land should have been classified as alienable and Section 14(2) is based on prescription. Thus, under
disposable agricultural land at the time of the Section 14(1), it is not necessary for the land applied
application for registration is necessary only to for to be alienable and disposable at the beginning of
dispute the presumption that the land is inalienable. the possession on or before June 12, 1945 - Section
(Malabanan v. Republic, G.R. No. 179987, Sept. 3, 14(1) only requires that the property sought to be
2013) registered is alienable and disposable at the time of
the filing of the application for registration. However,
The period of possession prior to the declaration that in Section 14(2), the alienable and disposable
land is alienable and disposable agricultural land is character of the land, as well as its declaration as
included in the computation of possession for patrimonial property of the State, must exist at the
purposes of acquiring registration rights over a beginning of the relevant period of possession.
property if the land has already been declared as (Republic v. Philippine National Police, G.R. No.
such at the time of the application for registration. 198277, February 8, 2021)
What is important in computing the period of
possession is that the land has already been Sufficient Proof (R.A. No. 11573, Sec. 7)
declared alienable and disposable at the time of the A duly signed certification by a duly designated
application for registration. Upon satisfaction of this DENR geodetic engineer that the land is part of
requirement, the computation of the period may alienable and disposable agricultural lands of the
include the period of adverse possession prior to the public domain is sufficient proof that the land is
declaration that land is alienable and disposable. alienable. Said certification shall be imprinted in the
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approved survey plan submitted by the applicant in - Testimonial evidence

the land registration court. - Photos of improvements introduced
For the imprinted certification, the geodetic engineer d. Presidential issuances and legislative acts
shall testify that the land is within the alienable and (constitutive of a fee simple title or absolute title in
disposable lands of the public domain. The favor of the grantee, a law ceding full ownership
certification shall state the applicable Forestry
to a government institution)
Administrative Order, DENR Administrative Order,
Executive Order, Proclamations and the Land
Classification Project Map Number covering the Note: The holder of a Spanish title may still lose his
subject land. ownership of the real property to the occupant who
actually possesses the same for the required
prescriptive period. Taking the law as a whole, it has
Contents of Certification (R.A. No. 11573, Sec. 7)
clearly set a deadline for the filing of applications for
1. A sworn statement by the geodetic engineer
registration of ALL Spanish titles under the Torrens
that the land is within the alienable and system (i.e., 6 months from its effectivity or on 16
disposable lands of the public domain. August 1976), after which, the Spanish titles may no
2. Applicable Forestry Administrative Order, longer be presented to prove ownership. Spanish
DENR Administrative Order, Executive titles can no longer be countenanced as indubitable
Order, Proclamations and the Land evidence of land ownership. (Santiago v. SBMA,
Classification Project Map Number covering G.R. No. 156888, Nov. 20, 2006)
the subject land.
(3B) Open, exclusive, continuous, and peaceful
Should there be no available copy of the Forestry possession in the concept of owner
Administrative Order, DENR Administrative
How to prove:
Order, Executive Order, Proclamation, it is a) Tax declarations
sufficient that the Lad Classification (LC) Map b) Regular realty tax payments
Number, Project Number, and date of release c) Muniments of title (e.g., deeds of sale, wills,
indicated in the land classification map be stated donation; to tack possession to that of
in the sworn statement declaring that said predecessors-in-interest)
classification map is existing in the inventory of d) Testimonial evidence
LC Map records of the National Mapping and e) Evidence of improvements introduced on
Resource Information Authority (NAMRIA) and is the property
being used by the DENR.
X failed to squarely address the CA's finding that the
(2) Identity of land records do not show proof of how X’s predecessor in
interest came to own the Subject Land and how this
How to prove: was inherited. These are crucial facts that X needed
1. Survey plan approved by the Land to establish to show that its predecessor-in-interest
Management Bureau (LMB) had a prior valid claim of ownership over the Subject
2. Technical description of the land Land. Precisely, San Pedro's claim of ownership
3. Tax declarations rests on these crucial facts, and without them such
claim becomes tenuous. With these facts missing,
the Court wholly agrees with the CA that "evidence
(3A) Private ownership
on record is insufficient to prove that X’s
predecessor-in-interest possessed or occupied the
How to prove: (STOP)
subject land in the concept of an owner since June
12, 1945, or earlier." Also, the evidence that Y
a. Spanish title (inadmissible and ineffective proof of
adduced to disprove X's claim of ownership,
ownership in land registration proceedings filed including tax declarations dated 1941, cast serious
after Aug. 16, 1976); doubt on DMCI's evidence to show its and its
b. Tax declarations and tax payments (not predecessors-in-interest open, continuous, exclusive
conclusive evidence of ownership; must be and notorious possession and occupation since June
coupled with proof of actual possession for the 12, 1945 or earlier. (D.M. Consunji, Inc. v. Republic,
period required by law) 3; G.R. No. 233339 (Resolution), February 13, 2019)
c. Other kinds of proof; and

3
Tax declarations or realty tax payments of property are not purposes strengthens one’s bona fide claim of acquisition of
conclusive evidence of ownership. At most, they serve as a ownership (Republic v. Sta. Ana-Burgos, G.R. No. 163254,
good indicia of possession in the concept of an owner. The Jun. 1, 2007.)
voluntary declaration of a piece of property for taxation
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Although tax declarations or realty tax payment of

property are not conclusive evidence of ownership, If land is situated between boundaries of 2 provinces,
nevertheless, they are good indicia of possession in application must be filed:
the concept of owner, for no one in his right mind 1. When boundaries are not defined: with the
would be paying taxes for a property that is not in his RTC of the place where it is declared for
actual or constructive possession. They constitute at taxation purposes;
least proof that the holder has a claim of title over the 2. When boundaries are defined: a separate
property. plan for each portion must be made by a
surveyor and a separate application for each
The voluntary declaration of a piece of property for
taxation purposes manifests not only one's sincere lot must be filed with the appropriate RTC
and honest desire to obtain title to the property and
announces his adverse claim against the State and In cases of delegated jurisdiction to the MTC, appeal
all other interested parties, but also the intention to is directed to the CA.
contribute needed revenues to the Government.
Such an act strengthens one's bona fide claim of When to file application
acquisition of ownership. (Spouses Ponce v.
Aldanese, G.R. No. 216587, August 4, 2021) The period given under Sec. 47 of CA 141 (extending
application up to December 31, 2020) was repealed
Where to file application by RA 11573. Thus, eliminating the time limit on
This is applicable for both PD 1529 and CA 141. when to file.

General rule: RTC of the province or city where the Form of the application (WSS)
land is situated. 1. Written
2. Signed by the applicant or person duly
Note: File together with the application all original authorized in his behalf
muniments of titles or copies thereof and a survey a. If there is more than one applicant,
plan of the land as approved by the Bureau of Lands. the application shall be signed and
sworn to by and in behalf of each.
Under LRA Circular 05-2000, the original tracing 3. Sworn to before an officer authorized to
cloth plan is no longer forwarded to the LRA; only a administer oath for the province or city
certified copy thereof needs to be forwarded. where the application was actually signed.
(P.D. No. 1529, § 15 & C.A. No. 141, § 50.)
P.D. No. 1529 has eliminated the distinction between
the general jurisdiction vested in the RTC and the Contents of Application (MADFARCE)
limited jurisdiction conferred upon it by the former law 1. Manner of acquisition of land;
when acting merely as land registration court. Aimed 2. Assessed value of the land and the buildings
at avoiding multiplicity of suits, the change has and other improvements based on the last
simplified registration proceedings by conferring assessment for taxation purposes;
upon the RTCs the authority to act not only on original 3. Description of the land applied for together
applications but also those filed after original with the buildings and improvements; the
registration, with the power to hear and determine all plan approved by Director of Lands and the
questions arising upon such applications or petitions. technical descriptions must be attached;
(Averia v. Caguioa, G.R. No. L-65129, Dec. 29, 1986) 4. The court may require Facts to be stated in
the application in addition to those
Exception: Delegated jurisdiction of the MTC to hear prescribed by the Decree not inconsistent
and determine cadastral or land registration cases therewith and may require the filing of
covering: additional papers;
- Lots where there is no controversy or opposition, 5. Full names and addresses of All occupants
or of the land and those of the Adjoining
- Contested lots, the value of which does not exceed owners, if known; and if not known, the
P100,000.00. (B.P. 129, § 34) applicant shall state the extent of the search
made to find them;
If there are several parcels of land situated in 6. If the application describes the land as
different provinces/cities belonging to one owner, he bounded by a public or private way or Road,
must file in the RTC of each province/city where the it shall state whether or not the applicant
different parcels of land are located for registration claims any portion of the land within the
purposes. limits of the way or road, and whether the
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applicant desires to have the line of way or the decision of the registration court would
road determined. (P.D. No. 1529, § 20); be a nullity insofar as the decision concerns
7. Citizenship and Civil status of the applicant; the newly included land.
and 3. But if the amendment consists in the
a. if married, name of spouse, and exclusion of a portion of the area covered by
b. if the marriage has been legally the original application and the original plan
dissolved, when and how the as previously published, a new publication is
marriage relation was terminated not necessary. In the latter case, the
8. Mortgage or Encumbrance affecting the land jurisdiction of the court is not affected by the
or names of other persons who may have an failure of a new publication. (Benin v.
interest therein, legal or equitable. (P.D. No. Tuason, G.R. No. L-26127, 1974)
1529, § 15 & C.A. No. 141, § 50)
Amendments in a petition that do not involve an
Note: If the applicant is a non-resident of the addition but only a reduction of the original area
Philippines, he shall file an instrument appointing an that was published no longer require a
agent residing in the Philippines and shall agree that republication because the amended area was
service of any legal process in the proceeding made already included in the first publication. (Republic
upon his agent shall be of the same legal effect as if v. San Mateo, et al., G.R. No. 20356, Nov. 10,
made upon the applicant within the Philippines. (P.D. 2014)
No. 1529, § 16)
Hearing, Judgment, and Post-Judgment
Limitation of Area Incidents in Ordinary Land Registration
For CA 141, application is only for a maximum of 12
hectares. (R.A. No. 6940, § 3) Speedy hearing
The trial court is required to dispose of the case within
Amendments 90 days from the date of submission thereof for
AMENDMENTS IN ORDINARY REGISTRATION decision. (P.D. No. 1529, § 27)
PROCEEDINGS
Striking out one or more The court may strike Note: The court, if it deems necessary, may refer the
of the parcels of land out at any time case or any part thereof to a referee who shall hear
applied for or by a the parties and their evidence, and the referee shall
severance of the submit his report thereon to the court within 15 days
application after the termination of such hearing. The court may
Substantial change in New technical render judgment in accordance with the report as
boundaries, increase in description and new though the facts have been found by the judge
area, inclusion of publication and notice himself. (P.D. No. 1529, § 27)
additional land are necessary
Joinder, substitution, or File motion with court A judgment is a decision of the court constituting
discontinuance of any of its opinion after taking into consideration the
the parties evidence submitted.
Decrease in area File motion with court;
no need for new Judgment rendered in a land registration proceeding
publication or notice becomes final upon the lapse of 15 days counted
from the receipt of notice of the judgment. (P.D. No.
Summary of Rules 1529, § 30 as modified by B.P. 129, § 39)
1. If the amendment consists in the inclusion in
the application for registration an area or The judgment of the court in the land registration
parcel of land not previously included in the case becomes final insofar as the State is concerned
original application, as published, a new 15 days from receipt by the OSG (not merely by the
local designated prosecutor) of the copy of the
publication of the amended application must
decision, without there being an appeal or motion for
be made. The purpose of the new reconsideration by any of the parties. (Republic v.
publication is to give notice to all persons Sayo, G.R. No. L-60413, Oct. 31, 1990)
concerned regarding the amended
application. However, notwithstanding the lapse of the 15-day
2. Without a new publication, the registration period from receipt of judgment by the parties, the
court cannot acquire jurisdiction over the court continues to retain control over the case until
area or parcel of land that is added to the the expiration of 1 year after the entry of decree of
area covered by the original application, and
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registration by the LRA. (Republic v. Assosacion

Benevola de Cebu, G.R. No.77243, Oct. 26, 1989)

In special proceedings, the purpose of execution of

judgment is to establish a status, condition or fact; in
land registration proceedings, the ownership by a
person of a parcel of land is sought to be
established. After the ownership has been proved
and confirmed by judicial declaration, no further
proceeding to enforce said ownership is necessary,
except when the adverse or losing party had been in
possession of the land and the winning party desires
to oust him therefrom. (Ronald Ting v. Liro, G.R. No.
168913, Mar. 14, 2007)

Partial judgment
In a case where only a portion of the land subject of
registration is contested, the court may render partial
judgment provided that a subdivision plan showing
the contested and uncontested portions approved by
the Director of Lands is previously submitted to said
court. (P.D. No. 1529, § 28)

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Post-Judgment Incidents

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Writ of Possession: employed to enforce a 1. WHO MAY APPLY

judgment to recover the possession of land. It
commands the sheriff to enter the land and give
P.D. No.1529 C.A. No. 141
possession of it to the person entitled under the
judgment; no prescription against: (1) the loser and MATTER GOVERNED
(2) anyone unlawfully and adversely occupying the Confirmation of
Original registration
land at anytime up to and until the issuance of the imperfect or incomplete
proceedings
decree of registration. title
NATURE
The fundamental rule is that a writ of possession can 1. In rem proceedings
be issued not only against the original oppositors in 2. Judicial
a land registration case and their representatives and 3. Decree of registration issued is conclusive and
successors-in-interest, but also against any person final
unlawfully and adversely occupying said lot at any 4. Governed by court procedure and law of
time before and up to the issuance of the final decree. evidence
(Heirs of Cristobal Marcos vs. De Banubar, 25 SCRA
WHO MAY APPLY
316 [1968])
(P.D. No. 1529, § 14, as (C.A. No. 141, § 48, as
amended by R.A. No. amended by R.A. No.
When writ of possession may not issue: When a 115731)
person takes possession of a land after the issuance 115731)
1. Those who by 1. Those who by
of the final decree, and none of them had been a
themselves or themselves or
party in the registration proceedings, the writ of
possession will not issue. Such person cannot be through their through their
summarily ousted through a writ of possession predecessors-in- predecessors-in-
secured by a mere motion, and that regardless of any interest have been in interest have been in
title or lack of title of said persons to hold possession open, continuous, Open, continuous,
of land in question, they cannot be ousted without exclusive, notorious exclusive, notorious
giving them their day in court in proper independent possession and possession and
proceedings. (Heirs of Cristobal Marcos vs. De occupation of occupation of
Banubar, 25 SCRA 316 [1968]) alienable and alienable and
disposable lands of disposable
Writ of Demolition: the complement of writ of the public domain
possession; to demolish improvements introduced by agricultural lands of
under a bona fide public domain under a
the defeated oppositor or his successor-in-interest
claim of ownership for bona fide claim of
Means to Recover Possession at least 20 years ownership, for at least
1. Forcible entry immediately 20 years immediately
2. Unlawful detainer preceding the filing of preceding the filing of
3. Accion publiciana the application for the application for
4. Accion reivindicatoria confirmation of title confirmation of title
except when except when
An accion publiciana is limited to the recovery of the prevented by war or prevented by war or
better right of possession independent of title or force majeure. They force majeure. They
ownership. Any determination of ownership made in shall be conclusively shall be conclusively
connection is not final or binding. A provisional presumed to have presumed to have
determination of ownership, i.e. a publiciana performed all the
proceeding, does not pose a "real attack" on the performed all the
conditions essential conditions essential
Torrens title in dispute since courts do not possess
to a Government to a Government
the jurisdiction to order the alteration, modification or
cancellation of Torrens titles in such cases as grant and shall be grant and shall be
provided under PD 1529. entitled to a entitled to a certificate
Government grant of title.
Nevertheless, as held in Heirs of Cullado, the and shall be entitled
adjudication is not a final and binding determination to a certificate of title. 2. Those who have
of the issue of ownership. This is not a bar for the acquired ownership of
parties or even third persons to file an action for the 2. Those who acquired private lands or
determination of the issue of ownership and ownership of private
possession (as a consequence of such ownership). abandoned riverbeds
lands or abandoned by right of accession
(Macutay v. Samoy, G.R. No. 205559, December 2, riverbeds by right of
2020) or accretion under the
accession or
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accretion under the provision of existing 1 hectare in the case of rural land may be used
existing laws laws . by him as his residence. (§ 2, BP Blg. 185)
- Former natural-born citizen where a maximum
3. Those who have 3. Those who have area of 5,000 sqm in the case of urban land or
acquired ownership of acquired ownership 3 hectares in the case of rural land may be used
land in any manner of land in any other by him for business or other purposes. (Rule
provided for by Law manner provided by XII, § 1-6, IRR of RA 7042)
law. - Those who have re-acquired citizenship allows
Note: Where the land is one to enjoy full civil and political rights,
owned in common, all including the right to own land in the
the co-owners shall file Philippines. (§ 5, RA 9225)
the application jointly.
Summary of rule: A juridical entity cannot acquire
Where the land has
ownership of disposable and alienable land nor
been sold under pacto
apply for the registration thereof. The disposable
de retro, the vendor a
and alienable land must first become private land
retro may file an
by operation of law through the possession and
application for the
occupation of a Filipino citizen in the manner and
original registration of
period required by law. The juridical entity may
the land: Provided,
then acquire ownership of such private land from
however, that should
the Filipino citizen and becomes eligible to apply
the period for
for the registration thereof in its name.
redemption expire
Note: A judicial
during the pendency of
declaration that a
the registration
parcel of land is public
proceeding and
does not preclude even
ownership to the
the same applicant
property consolidated in
from subsequently
the vendee a retro,the
seeking a judicial
latter shall be
confirmation of his title
substituted for the
to the same land,
applicant and may
provided he thereafter
continue the
complies with the
proceedings.
provisions of Sec. 48 of
C.A. No. 141, as
A trustee on behalf of
amended and as long
his principal may apply
as said public land
for original registration
remains alienable and
of any land held in trust
disposable. (Dir. of
by him, unless
Lands v. CA, G.R. No.
prohibited by the
L-47847, Jul. 31, 1981)
instrument creating the
trust.
General rule: All these persons must be natural- 2. DECREE OF REGISTRATION
born Filipino citizens.
Exceptions: Decree of Registration (P.D. No. 1529, § 31)
- Juridical persons may lease agricultural and 1. The decree issued by the LRA pursuant to
disposable land not exceeding 1,000 hectares the order of the court.
in area for a period of 25 years and renewable 2. Binds the land and quiets title thereto,
for not more than 25 years (PHIL. CONST., art. subject only to such exceptions or liens as
XII, § 3) may be provided by law.
- When the land has been previously acquired by 3. Conclusive upon and against all persons
prescription by a natural person and including the national government and all
subsequently transferred to a juridical entity. In branches thereof, whether or not mentioned
this case, a corporation may apply for judicial by name in the application or notice.
confirmation of title. (Dir. of Lands v. IAC and
ACME, G.R. No. 73002, Dec. 29, 1986) Contents of the Decree (DMD-DO)
(P.D. No. 1529, § 31)
- Former natural-born citizen where a maximum
1. Date, hour and minute of its entry;
area of 1,000 sqm in the case of urban land or
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2. Whether the owner is Married or unmarried, issued and only the existence of the supposed
and if married, the name of the spouse; decision (which has not yet even attained finality)
provided that if the land is conjugal property, bars respondents' application.
the decree shall be issued in the name of
both spouses; It is also worth noting that almost 40 years had
3. If the owner is under Disability, the nature of passed since the trial court determined that
such disability, and if a minor, his age; respondents are entitled to a registration decree. One
4. Description of the land and shall set forth the of the respondents even passed away while waiting
estate of the owner, and also show their for it. In Republic v. Heirs of Sta. Ana, one of the key
relative easements, liens, attachments, and considerations for allowing the subsequent
other encumbrances; and registration was the fact that a long time had passed
5. Other matters to be determined in since the trial court ordered the issuance of a
pursuance of the law registration decree. The Court intimated that to
reverse such a decision would run counter to the
Process of Issuing the OCT purpose of land registration, which is to finally settle
(P.D. No. 1529, § 39-42) title to real property. Here, it is in keeping with the
1. Within 15 days from finality of order of purpose of land registration to finally allow
judgment directing registration of title – court respondents to be granted a registration decree.
orders the LRA to issue decree of
registration and certificate of title; In this case, aside from the single entry "Cadastral
2. Clerk of court will send order of court and Case No. 33, LRC (GLRO) Cadastral Record No.
copies of judgment; 1305," no other record, including a copy of the
3. Writ of Demolition may be issued. The court decision, exists to support the theory. Key
has authority to order, as a consequence of information, such as the identity of the parties in the
the writ of possession issued by it, the case and of the court that rendered the decision, as
demolition of improvements introduced by well as the outcome thereof, has remained unknown
the defeated oppositor or his successor-in- despite the lapse of more than 40 years since the
interest; LRC submitted its report. No one, aside from the
4. Administrator will issue a decree of Republic, has even come forward to claim any
registration and original and duplicate of interest arising from the supposed case. Practical
OCT that is signed by him, enter, and file considerations now demand that the proceedings in
decree of registration in LRA; the RTC be no longer disturbed. (Republic v. Tapay,
5. Send to ROD the original and duplicate of G.R. No. 157719, March 2, 2022)
title and certificate for entry in his registration
book;
3. REVIEW OF DECREE OF
6. Enter in record book, dated, signed,
REGISTRATION;
numbered and sealed to take effect upon
date of entry; Review of Decree of Registration
7. ROD to send notice to registered owner that Remedy available in cases of actual fraud committed
his owner’s duplicate is ready for delivery in the adjudication or confirmation of title. (P.D. No.
after payment of fees; 1529, § 32)
8. ROD shall send duplicate and note on each
certificate of title to whom it is issued; Party to File (P.D. No. 1529, § 32)
9. Original copy to be filed in ROD; and 1. Any aggrieved party, including persons
10. Bound in consecutive order deprived of opportunity to be heard,
including the government.
In Republic v. Heirs of Sta. Ana, the LRA reported 2. Aggrieved party does not need to be an
that a prior decree of registration had already been oppositor or original claimant in the
issued, yet the Court still decided to allow the proceedings.
subsequent registration because there was no way
to verify the truthfulness of the alleged prior case. Parties who Cannot File
1. An oppositor who abandoned his claim.
Considering that it is the decree of registration that
2. An oppositor who had notice of the
binds the land and quiets the title thereto, and not the
decision, the registration should be allowed with proceedings but failed to raise his claims.
much more reason here where no decree of (Crisolo v. CA, G.R. No. L-33093, Dec. 29,
registration covering the subject land had yet been 1975)

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Requisites for Review (ReDeFFiN) 9. Inducing a party not to oppose application

1. Petitioner has a Real and dominical right; Deliberate failure to disclose possession
2. He was Deprived thereof; by other persons. (Ramirez v. CA, G.R. L-
3. Through Fraud; 38185, Sep. 24, 1986)
4. Petition is Filed within 1 year from
issuance of the decree; and Note: In all cases, the allegation of fraud must be
5. The property has Not yet passed to an substantiated with specific, intentional acts to
innocent purchaser for value deceive and deprive another of his right. (Crisolo
v. CA, G.R. No. L-33093, Dec. 29, 1975)
Fraud
Extrinsic fraud refers to a fraud committed to the An action for reconveyance is based on Section
unsuccessful party by his opponent, preventing him 53, paragraph 3 of Presidential Decree (PD) No.
from fully exhibiting his case by keeping him away
1529, which provides, “In all cases of registration
from court, a false promise of a compromise; or
procured by fraud, the owner may pursue all his
where the defendant never had knowledge of the
suit, being kept in ignorance by the acts of the legal and equitable remedies against the parties to
plaintiff; or when an attorney fraudulently or without such fraud without prejudice, however, to the
authority connives at his defeat. (Baclaran Marketing rights of any innocent holder for value of a
Corp. v. Nieva, G.R. No. 189881, Apr. 19, 2017) certificate of title…” In Caro v. Court of
Appeals, we said that this provision should be read
Different kinds of fraud exist, but the law allowing in conjunction with Article 1456 of the Civil Code,
fraud as a ground for a review or reopening of a land which provides, “If property is acquired through
registration decree contemplates actual and extrinsic mistake or fraud, the person obtaining it is, by
fraud. Actual fraud “proceeds from an intentional force of law, considered a trustee of an implied
deception practiced by means of the trust for the benefit of the person from whom the
misrepresentation or concealment of a material fact.” property comes.” The law creates the obligation of
(Mendoza v. Valte, G.R. No. 172961, Sep. 7, 2015) the trustee to reconvey the property and its title in
favor of the true owner. (Uy v. Court of Appeals,
Intrinsic fraud refers to the acts of a party at a trial G.R. No. 173186, September 16, 2015)
that prevented a fair and just determination of the
case, but the difference is that the acts or things, like If a Deed of Donation is void ab initio due to the
falsification and false testimony, could have been illegality in its execution, the disputed land is deemed
litigated and determined at the trial or adjudication of to be simply held by petitioners in trust for
the case. (Pinausukan Seafood House v. Far East respondents who are the real owners. The aggrieved
Bank & Trust Co., G.R. No. 159926, Jan. 20, 2014) party therefore has the right to institute a case
against the other party for the reconveyance of the
Examples of Extrinsic Fraud property at any time.
1. When the applicants for registration
suppressed the fact that the petitioners The well-settled rule is that "as long as the land
(for review of decree) were the legal and wrongfully registered under the Torrens system is still
rightful owners of the land in question, and in the name of the person who caused such
that the applicants merely possessed the registration, an action in personam will lie to compel
him to reconvey the property to the real owner."
land as antichretic creditors.
(Cardinez v. Spouses Cardinez, G.R. No. 213001,
2. When the applicant omits other persons’ August 4, 2021)
interests and claims on the land.
3. Deliberate misrepresentation that the land 4. INNOCENT PURCHASER FOR
involved was uncontested. VALUE (IPV); RIGHTS OF IPV
4. Obtaining adjudication in the name of a
co-owner, which the applicant knew had Innocent Purchaser for Value
not been allotted to him in the partition. For a petition for review of the decree to prosper, the
land must not have passed to an innocent purchaser
5. Intentionally concealing facts. for value.
6. Conniving with the land inspector.
7. Deliberately failing to notify parties entitled Innocent purchaser for value is one who buys the
to notice. property of another, without notice that some other
8. Misrepresenting the identity of the land person has a right or interest in such property and
involved. pays the full price for the same, at the time of such
purchase or before he has notice of the claims or

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interest of some other person in the property. One

claiming to be an innocent purchaser for value has Where innocent third persons, relying on the
the burden of proving such status. (Leong v. See, correctness of the certificate of title thus issued,
G.R. No. 194077, Dec. 3, 2014.) acquire rights over the property, the court cannot
disregard such rights and order the total cancellation
Note: Where innocent third persons who rely on the of the certificate. (Sps. Peralta v. Heirs of Abalon,
correctness of the certificate of title thus issued G.R. No. 183448, June 30, 2014)
acquired rights over the property, the court cannot
disregard such rights and order the total cancellation As a general rule, where there is nothing in the
of the certificate. (Tenio-Obsequio v. Court of certificate of title to indicate any cloud or vice in the
Appeals, G.R. No. 107967, Mar. 1, 1994) ownership of the property, or any encumbrance
thereon, the purchaser is not required to explore
Note: “the defense of having purchased the property further than what the Torrens Title upon its face
in good faith may be availed of only where registered indicates in quest for any hidden defect or inchoate
land is involved and the buyer had relied in good faith right that may subsequently defeat his right thereto.
on the clear title of the registered owner." It does not (State Investment House v. CA, G.R. No. 115548.
apply when the land is not yet registered with the March 5, 1996)
Registry of Deeds. (Heirs of Gregorio Lopez v.
Development Bank of the Phils., G.R. No. 193551, Requisites to be an IPV and a Valid Holder of a
Nov. 19, 2014) Certificate of Title
An innocent purchaser for value of registered land
Other Grounds for Review becomes the registered owner and in the
1. Fatal infirmity of the decision for want of due contemplation of law the holder of a certificate
process; and thereof the moment he presents and files a duly
notarized and lawful deed of sale and the same is
2. Lack of jurisdiction of the court
entered on the day book and at the same time he
surrenders or presents the owner's duplicate
Rights of IPV certificate of title to the property sold and pays the full
If the same thing should have been sold to different amount of registration fees. (J. Caguioa Separate
vendees, the ownership shall be transferred to the Opinion, Sps. Stilianopoulos v. The Register of
person who may have first taken possession thereof Deeds, G.R. No. 224678, July 3, 2018)
in good faith, if it should be movable property. (Art.
1544, Civil Code)
F. CONFIRMATION OF IMPERFECT
Every registered owner receiving certificate of title in
pursuance of a decree of registration, and every TITLES (RA 11573)
subsequent purchaser of registered land taking a
certificate of title for value and good faith, shall hold 1. Amendments to Commonwealth Act No.
the same free from all encumbrances except those 141 by R.A. No. 11573
noted in said certificate and any of the following
encumbrances which may be subsisting. (§ 44, P.D. a. Who are entitled to have a free
No. 1544) patent

As such, a defective title–– or one the procurement The following natural-born citizens of the Philippines
of which is tainted with fraud and misrepresentation shall be entitled to have a free patent issued for tract
–– may be the source of a completely legal and valid or tracts not to exceed twelve (12) hectares:
title, provided that the buyer is an innocent third 1. Not the owner of more than twelve (12)
person who, in good faith, relied on the correctness hectares of land;
of the certificate of title, or an innocent purchaser for 2. For at least twenty (20) years prior to the
value. (Locsin v. Hizon, G.R. No. 204369, September filing of an application for agricultural free
17, 2014) patent, has continuously occupied and
cultivated, either personally or through a
As a general rule, a forged deed is null and void thus, predecessor-in-interest, a tract or tracts of
it cannot convey title. However, an exception to this alienable and disposable agricultural public
is in an instance “where the certificate of title was lands subject to disposition; and
already transferred from the name of the true owner 3. Paid the real estate tax thereon. (§ 2, R.A.
to the forger, and while it remained that way, the land No. 11573)
was subsequently sold to an innocent purchaser. For
then, the vendee had the right to rely upon what
appeared in the certificate.” (Fule v. Legare, G.R. No.
L-17951, February 28, 1963)

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b. Where to file applications for d. Confirmation of claims and

agricultural free patents issuance of certificate of titles

All applications for agricultural free patents shall be The following citizens of the Philippines occupying
filed before the Community Environment and Natural lands of the public domain or claiming to own any
Resources Office (CENRO) of the Department of such lands or an interest, but whose titles have
Environment and Natural Resources (DENR). perfected or completed, may file a petition at any
time, whether personally or through their duly
For provinces with no CENRO, the application shall authorized representatives, in the Regional Trial
be filed with the Provincial Environment and Natural Court of the province where the land is located, for
Resources Office (PENRO). (§ 3, R.A. No. 11573) confirmation of their claims and the issuance of a
certificate of title to land not exceeding twelve (12)
c. Application process for hectares:
agricultural free patents 1. Those who by themselves or through their
predecessors-in-interest:
1. The CENRO or the PENRO will process the (a) Have been in open, continuous,
application within one hundred and twenty exclusive, and notorious
(120) days from filing, including compliance possession and occupation of
with the required notices and other legal alienable and disposable
requirements. agricultural lands of the public
2. The CENRO shall forward its domain;
recommendation to the following: (b) Under a bona fide claim of
(a) PENRO - area of the land is below ownership;
five (5) hectares; (c) For at least twenty (20) years
(b) DENR Regional Director - area of immediately preceding the filing of
the land is at least five (5) up to ten the application for confirmation of
(10) hectares; and title;
(c) Secretary of the DENR - area of the (d) Except when prevented by war or
land is more than (10) up to twelve force majeure.
(12) hectares. They shall be conclusively presumed to
3. Upon receipt of the recommendation, or have performed all the conditions essential
upon the completion of the processing of the to a Government grant and shall be entitled
application within the reglementary period, to a certificate of title under the provisions of
the PENRO, DENR Regional Director, or the this Chapter.
Secretary of the DENR, as the case may be, 2. Those who have acquired ownership of
shall approve or disapprove the application private lands or abandoned riverbeds by
for agricultural free patent within five (5) right of accession or accretion under the
days. provision of existing laws; and
4. In case of approval, the agricultural free 3. Those who have acquired ownership of land
patent shall be issued. in any other manner provided by law. (§ 5,
R.A. No. 11573)
In case of conflicting claims among different
claimants, the parties may seek the proper 2. Amendments to Presidential Decree No.
administrative and judicial remedies. (Id.) 1529

An applicant for a free patent does not claim the land a. Who may apply for registration of
as his or her private property but acknowledges that title to land
the land is still part of the public domain. An applicant
who chooses to apply for a free patent acknowledges The following persons may file an application for
that the land covered by the application still belongs registration of title to land, not exceeding twelve (12)
to the government and is still part of the public hectares, in the proper Regional Trial Court in the
domain. province where the land is located, whether
personally or through duly authorized
Under Section 44 of C.A. No. 141, an applicant is representatives:
required to prove continuous occupation and 1. Those who by themselves or through their
cultivation of agricultural land subject to disposition predecessors-in-interest:
since July 4, 1926 or prior thereto and payment of a. Have been in open, continuous,
real estate taxes while the land has not been exclusive and notorious possession
occupied by other persons. (Valdez v. Heirs of and occupation of alienable and
Catabas, G.R. No. 201655, August 24, 2020) disposable lands of the public

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domain not covered by existing 3. That the possession is under a bona

certificates of title or patents; fide claim of ownership for at least twenty
b. Under a bona fide claim of (20) years immediately preceding the filing
ownership for at least twenty (20) of the application for confirmation of title.
years immediately preceding the Thus, the length of time during which
filing of the application for the application must have possessed the
confirmation of title; subject land under a bona fide claim of
c. Except when prevented by war or ownership has been shortened from
force majeure. possession "since June 12, 1945 or earlier"
They shall be conclusively presumed to to twenty (20) years immediately preceding
have performed all the conditions essential the filing of the application for confirmation
to a Government grant and shall be entitled of title. (Superiora Locale v. Republic, G.R.
to a certificate of title under this section; No. 242781, June 21, 2022)
2. Those who have acquired ownership of
private lands or abandoned riverbeds by 3. Proof that the Land is Alienable and
right of accession or accretion; Disposable
3. Those who have acquired ownership of land
in any other manner provided for by law. (§ For judicial confirmation of imperfect titles filed under
6, R.A. No. 11573) Presidential Decree No. 1529, a duly signed
certification by a duly designated DENR geodetic
b. Land owned in common engineer that the land is part of alienable and
disposable agricultural lands of the public domain is
All the co-owners shall file the application jointly. (Id.) sufficient proof that the land is alienable.
a. The certification shall be imprinted in the
c. Land sold under pacto de retro approved survey plan submitted by the
applicant in the land registration court.
The vendor a retro may file an application for the b. In the imprinted certification in the plan,
original registration of the land. However, if the period there must be a sworn statement by the
for redemption expires during the pendency of the geodetic engineer that the land is within the
registration proceedings and ownership to the alienable and disposable lands of the public
property is consolidated in the vendee a retro, the domain.
latter shall be substituted for the applicant and may a. It shall state the applicable Forestry
continue the proceedings. (Id.) Administrative Order, DENR
Administrative Order, Executive
d. Trustee Order, Proclamations and the Land
Classification Project Map Number
A trustee on behalf of the principal may apply for covering the subject land.
original registration of any land held in trust by the
trustee, unless prohibited by the instrument creating Should there be no available copy, it is sufficient that
the trust. (Id.) the Land Classification (LC) Map Number, Project
Number, and date of release indicated in the land
e. Length of Possession classification map be stated in the sworn statement
with a declaration:
The required length of possession is now twenty (20) 1. That the land classification map is existing in
years immediately preceding the filing of the the inventory of LC Map records of the
application. (Superiora Locale v. Republic, G.R. No. National Mapping and Resource Information
242781, June 21, 2022) Authority (NAMRIA); and
2. It is being used by the DENR as a land
In sum, under the new provision, the applicant for classification map. (§ 7, R.A. No. 11573)
original registration of title to land must establish the
following: 4. Penalties
1. That the subject land, which does not
exceed 12 hectares, forms part of In addition to the penalties provided in the Revised
disposable and alienable lands of the public Penal Code and in the Philippine Geodetic
domain; Engineering Act of 1998, the following shall be
2. That the applicants, by themselves or penalized with a fine of not less than One hundred
through their predecessors-in-interest, have thousand pesos (P100,000.00) but not more than
been in open, continuous, exclusive, and Five hundred thousand pesos (P500,000.00), or
notorious possession and occupation imprisonment of not less than six (6) months but not
thereof; and exceeding six (6) years, or both, at the discretion of
the court:
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1. A geodetic engineer who shall prepare, • The RTC and CA are directed, upon proper
willingly or through gross inexcusable motion or motu proprio, to permit the
negligence, a projection map that contains presentation of additional evidence on land
false, fraudulent, or incomplete data or classification status based on the
information; and parameters set forth in this new law.
2. DENR official who shall certify and approve o Additional evidence shall consist of
such protection map. (§ 8, R.A. No. 11573) a certification issued by the DENR
geodetic engineer which:
5. Restrictions for Free Patents ▪ States that the land subject
of the application for
The following provisions of R.A. No. 11231 shall be registration has been
applicable to Free Patents issued under the new law: classified as alienable and
a) Restrictions on free patents are removed to disposable land of the
allow the efficient and effective utilization of public domain;
these lands to contribute to wealth creation, ▪ Bears reference to the
entrepreneurship, and economic applicable Forestry
development. (§ 2, Agricultural Free Patent Administrative Order,
Reform Act) DENR Administrative
b) Agricultural public lands alienated or Order, Executive Order, or
disposed in favor of qualified public land proclamations classifying
applicants under R.A. No. 11573, shall not the land as such; and
be subject to restrictions imposed regarding ▪ Indicates the number of the
acquisitions, encumbrances, conveyances, LC Map covering the land.
transfers, or dispositions. Agricultural free o In the absence of a copy of the
patent shall now be considered as title in fee relevant issuance classifying the
simple and shall not be subject to any lad as alienable and disposable, the
restriction on encumbrance or alienation. (§ certification must additionally state:
3, Agricultural Free Patent Reform Act) ▪ The release date of the LC
Map; and
6. Guidelines on the application of R.A. No. ▪ The Project Number.
11573, as laid down in the case of The certification must confirm that
Republic v. Pasig Rizal Co., Inc. (2022). the LC Map forms part of the
records of NAMRIA and is precisely
• R.A. No. 11573 shall apply retroactively to being used by the DENR as a land
all applications for judicial confirmation of classification map.
title which remain pending as of September o The DENR geodetic engineer must
1, 2021, or the date when the law took effect. be presented as witness for proper
These include all applications pending authentication of the certification in
resolution at the first instance before all accordance with the Rules of Court.
Regional Trial Courts, and applications (Republic v. Pasig Rizal Co., Inc.
pending appeal before the Court of Appeals. G.R. No. 213207, February 15,
• Applications for judicial confirmation of title 2022)
filed on the basis of PD 1529 and which
remain pending before the RTC or CA as of 7. Curative Nature of R.A. No. 11573
September 1, 2021 shall be resolved
following the period and manner of Section 1 of R.A. No. 11573 states its objective: "to
possession required under this law. simplify, update and harmonize similar and related
o Beginning September 1, 2021, provisions of land laws in order to simplify and
proof of “open, continuous, remove ambiguity in its interpretation and
exclusive and notorious possession implementation. It is also the policy of the State to
and occupation of alienable and provide land tenure security by continuing judicial
disposable lands of the public and administrative titling processes."
domain not covered by existing
certificates of title or patents under Through the declaration of the intention to simplify
a bona fide claim of ownership for and remove ambiguity in the interpretation and
at least twenty (20) years implementation of land laws, R.A. No. 11573 is
immediately preceding the filing of curative in nature. (Superiora v. Republic, G.R. No.
the application for confirmation” 242781, June 21, 2022)
shall be sufficient ad shall entitle the
applicant to a degree of registration. “R.A. No. 11573 makes valid that which, before the
enactment of the statute, was invalid because the
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applicant can now prove possession under a bona Registration as notice

fide claim of ownership for only twenty (20) years Registration creates a constructive notice to the
immediately preceding the filing of the application, whole world of such voluntary or involuntary
instead of proving possession since June 12, 1945 or instrument or court writ or process. (P.D. No. 1529,
earlier”. (Superiora Locale v. Republic, G.R. No. §52)
242781, June 21, 2022)
Registration is merely a specie of notice. It is a
ministerial act by which an instrument is sought to be
G. SUBSEQUENT REGISTRATION inscribed in the records of the Office of the Register
of Deeds and annotated at the back of the certificate
Subsequent Registration of title covering the land subject of the instrument. It
Involves incidental matters after original registration, is not a declaration by the State that such an
brought before the land registration court by way of instrument is a valid and subsisting interest in the
motion or petition and filed by the registered owner or land. The law on registration does not require that
a party in interest. only valid instruments shall be registered. The
purpose of registration is merely to give notice.
(Autocorp Group v. CA, G.R. No. 157553)
Necessity and effects of registering voluntary
and involuntary instruments
Except for a will that purports to convey or affect a Registration of instruments must be done in the
registered land, the mere execution of the deeds of proper registry in order to effect and bind the land.
sale, mortgage, or lease or other voluntary Prior to the Property Registration Decree of 1978, the
documents serves only 2 purposes: Land Registration Act governed the recording of
1. As a contract between the parties thereto; transactions involving registered land, i.e., land with
and Torrens title. On the other hand, Act No. 3344, as
2. As evidence of authority to the ROD to amended, provided for the system of recording of
register such documents. (§ 51, P.D. No. transactions over unregistered real estate without
1529) prejudice to a third party with a better right.

The recording of the sale with the proper Registry of Accordingly, if a parcel of land covered by a Torrens
Deeds and the transfer of the certificate of title in the title is sold, but the sale is registered under Act No.
name of the buyer are necessary only bind third 3344 and not under the Land Registration Act, the
parties to the transfer of ownership. (Tamayo v. sale is not considered registered and the registration
Lacambra, G.R. 244232, Nov. 3, 2020) of the deed does not operate as constructive notice
to the whole world. (Mactan-Cebu International
Airport Authority v. Spouses Edito, G.R. No. 171535,
Registration as the operative act of conveyance
June 5, 2009)
The registration of the instrument is the operative
act that conveys ownership or affects the land insofar
“Rule of Notice”
as third persons are concerned.
General Rule: There is an irrefutable presumption
As between the seller and the buyer, the transfer of that the purchaser has examined every instrument
ownership takes effect upon the execution of a public affecting the title. He is charged with notice of every
instrument conveying the real estate. Registration of fact shown by the record and is presumed to know
the sale with the Registry of Deeds, or the issuance every fact which an examination of the record would
of a new certificate of title, does not confer ownership have disclosed. (Garcia v. CA, G.R. Nos. L-48971,
on the buyer. Such registration or issuance of a new Jan. 22, 1980)
certificate of title is not one of the modes of acquiring
ownership. (Tamayo v. Lacambra, G.R. No. 244232,
Exception: There is no effect of constructive notice
Nov. 3, 2020)
when there is fraud involved in the transaction. (Id.)

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Overview of Voluntary and Involuntary Dealings

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voluntary or an involuntary one, so long as the

VOLUNTARY INVOLUNTARY registrant has compiled with all that is required of him
DEALINGS DEALINGS for purposes of entry and annotation, and nothing
Refer to deeds, Refer to writs or orders more remains to be done but a duty solely on the
instruments, or or processes issued by register of deeds. (Development Bank of the
documents which are a court of record Philippines v. The Acting Register Deeds of Nueva
results of the free and affecting registered Ecija, UDK No. 7671, June 23, 1988)
voluntary acts of the land which by law
parties thereto should be registered to Presentation of owner’s duplicate upon entry of
be effective, and also to new certificate
such instruments which No voluntary instrument shall be registered by the
are not the willful acts Register of Deeds unless the owner’s duplicate
of the registered owner certificate is presented with such instrument unless
and which may have otherwise provided for in PD 1529 or upon order of
been executed even the court.
without his knowledge
or against his consent The production of the owner’s duplicate certificate,
whenever any voluntary instrument is presented for
Sale Attachment registration, shall be conclusive authority from the
Real property Injunction registered owner to the Register of Deeds to enter a
mortgage Mandamus new certificate in favor of every purchaser for value
Lease Sale on execution of and in good faith. (P.D. No. 1529, §53)
Pacto de retro sale judgment or sales for
Extra-judicial taxes Sec. 53 of PD 1529 has no explicit requirement as to
settlement Adverse claims the manner of acquiring the owner’s duplicate for
Free or homestead Notice of lis pendens purposes of issuing a TCT. As long as the owner’s
duplicate certificate is presented to the Register of
patent
Deeds together with the instrument of conveyance,
Powers of attorney such presentation serves as conclusive authority to
Trusts the Register of Deeds to issue a transfer certificate.
The owner's duplicate The owner's duplicate (Heirs of Eduardo Manlapat v. CA, G.R. No. 125585,
certificate of title must certificate of title need June 8, 2005)
be presented to record not be presented.
the deed in the registry Non-presentation of the owner’s duplicate certificate
and to make a Entry of the instrument of title absolutely bars the registration of any
memorandum on the in the ROD's daybook is voluntary transaction. (San Miguel Corp. v.
title. sufficient notice to all Gandionco, G.R. No. 237506, July 28, 2020)
persons, even if the
An innocent purchaser owner's duplicate 1. VOLUNTARY DEALINGS
for value becomes the certificate of title is not
registered owner once presented. Rule: Registration of the instrument is the operative
he: act that transmits or transfers title. Without
registration, the instrument is binding only between
Presents and files with the parties.
the ROD a duly
notarized deed of Exception: Actual knowledge of an unregistered
conveyance and the dealing is equivalent to registration, insofar as the
same is entered in the third person with knowledge is concerned.
daybook,
Surrenders or presents Voluntary instruments such as contracts of sale,
the owner’s duplicate contracts to sell, and conditional sales are registered
certificate of title by presenting the owner's duplicate copy of the title
covering the land for annotation, pursuant to Sections 51 to 53 of PD
1529. (Logarta v. Mangahis, G.R. No. 213568, July
conveyed, and
5, 2016)
Pays the registration
fees. The reason for requiring the production of the owner's
duplicate certificate in the registration of a voluntary
Current doctrine thus seems to be that entry alone (in instrument is that, being a willful act of the registered
the primary entry book) produces the effect of owner, it is to be presumed that he is interested in
registration, whether the transaction entered is a registering the instrument and would willingly
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surrender, present or produce his duplicate certificate (Amoguis v. Ballado, G.R. No. 189626, Aug. 20,
of title to the Register of Deeds in order to accomplish 2018)
such registration. (Id.)
Exceptions to Mirror Doctrine: (BOB-MILKA)
The exception to this rule is when the registered The person dealing with registered land must look
owner refuses or fails to surrender his duplicate copy beyond the certificate of title in the following
of the title, in which case the claimant may file with instances:
the Register of Deeds a statement setting forth his 1. When the purchaser or mortgagee is a
adverse claim. (Id.) Bank/financing institution. They are
impressed with public interest and thus
When a party has knowledge of a prior existing require high standards of integrity and
interest which is unregistered at that time he acquired performance. Banks must exercise greater
a right to the same land, his knowledge of that prior
care, prudence, and due diligence in their
unregistered interest has the effect of registration as
to him. Knowledge of an unregistered sale is property dealings. The standard operating
equivalent to registration. (Spouses Chua v. practice for banks when acting on a loan
Gutierrez, G.R. No. 172316, Dec. 8, 2010) application is to conduct an ocular
inspection of the property offered for
Under the Torrens system, a sale of property that is mortgage and to verify the genuineness of
not registered under the Torrens system is binding the title to determine its real owner. (Andres
only between the buyer and the seller and does not v. PNB, G.R. No. 173548, Oct. 15, 2014).
affect innocent third persons. The only exception to 2. Where the Owner still holds a valid and
this is “knowledge of an unregistered sale is existing certificate of title covering the same
equivalent to registration.” (Evy Construction v. property. The law protects the lawful holder
Valiant Roll Forming Sales Corp., G.R. No. 207938,
of a registered title over the transfer of a
Oct. 11, 2017)
vendor bereft of any transmissible right.
Mirror Doctrine (Tomas v. Tomas, G.R. No. L-36897, June
A person dealing with registered land may rely on the 25, 1980)
correctness of the certificate of title issued. The law 3. When the purchaser is in Bad faith (Egao v.
does not oblige him to go beyond the certificate to CA, G.R. No. 79787, June 29, 1989).
determine the condition of the property. (Locsin v. 4. Where the land is bought not from the
Hizon, G.R. No. 204369, Sept. 17, 2014) registered owner but from one whose rights
have been Merely annotated on the
Where there is nothing in the certificate to indicate certificate of title. (Quiñiano v. CA, G.R. No.
any cloud or vice in the ownership of the property or
L-23024, May 31, 1971)
any encumbrance thereon, the purchaser is not
required to explore further than what the Torrens Title 5. When there are sufficiently strong
indicates upon its face to find hidden defects or Indications to impel closer inquiry into the
claims that may subsequently defeat his right. (Id.) location, boundaries, and condition of the
lot. (Francisco v. CA, G.R. No. L-30162,
Every person dealing with registered land may safely Aug. 31, 1987)
rely on the correctness of the certificate of title issued
therefore. Even if a decree in a registration Examples of “strong indications”:
proceeding is infected with nullity, still, an innocent When the land sold is in possession of a
purchaser for value relying on a Torrens title issued person other than the seller
in pursuance thereof is protected. (Cruz v. CA & When there are occupants other than the
Suzara, G.R. No. 120122, Nov. 6, 1997) registered owner
If land is registered and is covered by a certificate of
6. When the certificate of title contains a notice
title, any person may rely on the correctness of the
certificate of title, and he or she is not obliged to go of Lis pendens.
beyond the four (4) corners of the certificate to 7. When the purchaser had full Knowledge of
determine the condition of the property. This rule flaws and defects of the title. (Bernales v.
does not apply, however, when the party has actual IAC, G.R. Nos. 71490-91, June 28, 1988).
knowledge of facts and circumstances that would 8. When the purchaser buys from an Agent
impel a reasonably cautious man to make such and not from the registered owner.
inquiry or 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.
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Mirror Doctrine not applicable to unregistered (a) Owner’s duplicate certificate

lands Instrument
Notably, the mirror doctrine is not available when 3. Payment of registration fees and
there is no certificate to begin with. While an ordinary documentary stamp taxes;
buyer may rely on the certificate of title issued in the 4. The ROD makes and signs a memorandum
name of the seller, this defense of having purchased on the certificate of title; and
the property in good faith may be availed of only 5. The ROD issues a Transfer Certificate of
where registered land is involved and the buyer had Title (if the instrument involves a transfer of
relied in good faith on the clear title of the registered
the title to the land).
owner. It does not apply when the land is not yet
registered with the Registry of Deeds. (Heirs of
Gregorio Lopez v. DBP., G.R. No. 193551, Nov. 19, Registration of Real Estate Mortgage (REM)
2014) 1. Execution of deed in a form sufficient in law
(public instrument);
Chain of Title Rule 2. Presentation to the ROD of the following:
General Rule: A forged deed is null and cannot (a) Deed of mortgage
convey title. (b) Owner’s duplicate certificate of title
3. Payment of fees;
Exception: Registration of title from a forger to an 4. ROD’s entry of memorandum upon the
innocent purchaser for value (§55, Land Registration original certificate of title and the owner’s
Act). However, there must be a complete chain of
duplicate (date and time of filing, file number
registered titles; all the transfers starting from the
original rightful owner to the innocent holder for assigned, ROD’s signature); and
value, including the transfer to the forger, must be 5. ROD’s annotation on the deed (date and
duly registered, and the title must be properly issued time of filing, and reference to volume and
to the transferee. (Sps. Peralta v. Heirs of Abalon, page of the registration book in which it was
G.R. No. 183448, June 30, 2014) registered).

Although generally a forged or fraudulent deed or Note: No mortgagee’s or lessee’s duplicate

document is a nullity and conveys no title, it may certificate shall be issued upon registration of the
become the root of a valid title when the certificate of REM. (P.D. No. 1529, §60)
title over the land has already been transferred from
the name of the owner to that of the forger and the Effects of Registration of REM
land is sold later to an innocent purchaser for value. 1. Creates a lien that attaches to the property
A person who deals with registered property in good in favor of the mortgagee; and
faith will acquire good title from a forger and will be 2. Constructive notice of his interest in the
absolutely protected by a Torrens title. (Sps. Villamil
property to the whole world.
v. Villarosa, G.R. No. 177187, Apr. 7, 2009)
Effects of Failure to REM
While, it is a familiar doctrine that a forged or
fraudulent document may become the root of a valid 1. The mortgage is valid between the parties
title, if title to the property has been transferred from but is not binding against third persons.
the forger to an innocent purchaser in good faith, the 2. If the personal property mortgaged is
same does not apply in the case of banking delivered, the contract becomes a pledge
institutions or those engaged in real estate for they and not a chattel mortgage.
are expected to exercise more care and prudence 3. A third person’s actual knowledge of the
than private individuals in their dealing with mortgage has the same effect as registration
registered lands. In the absence of inquiry, the
respondent Bank cannot and should not be regarded Registration of Lease
as a mortgagee/purchaser in good faith. (Erasusta v. It is the lessee, not the lessor, who is required to
CA, G.R. No. 149231, July 17, 2006) initiate the registration. The process is the same with
the registration of real estate mortgages. Similarly, no
Process of Registration (Generally): new certificate is issued.
1. Execution of instrument in a form sufficient
in law. It must contain the full names, Note: When there is a prohibition in mortgaged
nationalities, residence, and postal property as regards subsequent conveyances, etc.,
addresses of the grantees or others leasehold cannot be registered.
acquiring an interest under the instrument
(P.D. No. 1529, §55);
2. Presentation of the following to the ROD:
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Subsequently registered mortgage and a prior 2. INVOLUNTARY DEALINGS

unregistered sale Involuntary Dealings (Generally)
Whether the land is unregistered or registered will Transactions affecting land in which cooperation of
determine which one will prevail between a registered owner is not needed, or those which are
subsequently registered mortgage and a prior done even against his will.
unregistered sale.
Adverse Claim
In unregistered land, an earlier instrument (sale or Notice to third persons that someone is claiming an
mortgage) prevails over a latter one, and the
interest on the property or has a better right than the
registration of any one of them is immaterial. registered owner thereof. The disputed land is
subject to the outcome of the dispute. (Sajonas v.
With registered land, the registered transaction CA, G.R No. 102377, July 5, 1996)
prevails over the earlier unregistered right. Prior
registration of a lien creates a preference as the act
Binding Effect of Adverse Claims
of registration is the operative act that conveys and
Annotations of adverse claims operate as a
affects the land. The only exception to this rule is
constructive notice only to third parties—not to the
when a party has knowledge of a prior existing
court or the registered owner. These are merely
interest unregistered at the time he acquires a right,
claims of interest or claims of the legal nature and
his knowledge of that prior unregistered interest has
incidents of the relationship between the person
the effect of registration as to him. (Macadangdang
whose name appears on the document and the
v. Martinez, G.R. No. 158682, Jan. 31, 2005)
person who caused the annotation. It does not affect
the validity of the claim or convert a defective claim
Registration of Trust or document into a valid one. These claims may be
proved or disproved during the trial. Thus,
(1) Implied Trusts annotations are not conclusive upon courts or upon
Presentation of a sworn statement claiming interest owners who may not have reason to doubt the
arising from an implied trust, with a description of the security of their claim as their properties' title holders.
land, the name of the registered owner, and the (University of Mindanao, Inc. v. Bangko Sentral ng
number of the certificate of title Pilipinas, G.R. Nos. 194964-65, Jan. 11, 2016).

(2) Express Trust Purposes of Adverse Claim

Presentation of the instrument creating the trust 1. Apprises third persons of the controversy
over the ownership of the land;
Note: In both cases, a memorandum of the 2. Preserves and protects the right of the
particulars of the trust shall be entered by the words
adverse claimant during the pendency of the
“in trust” or “upon condition” and by reference by
controversy; and
number to the instrument creating the trust. (§65, PD
1529) 3. Notice to third persons that any transaction
regarding the disputed land is subject to the
Registration of Appointed Trustee by Court outcome of the dispute. (Arrazola v. Bernas,
1. Presentation of the certified copy of the G.R. No. L-29740, Nov. 10, 1978)
decree;
2. Surrender and cancellation of the duplicate Note: Actual knowledge is equivalent to the
certificate; and registration of the adverse claim.
3. Issuance and entry of a new certificate
Requisites:
Other Notes on Voluntary Dealings 1. A claimant’s right or interest in the registered
- Builders in Good Faith may register land is adverse to the registered owner;
- Aliens may register leases: 2. Such right arose subsequent to the date of
• They may be granted temporary rights for original registration; and
residential purposes 3. No other provision is made in the Decree for
• Limit is 25 years, renewable for another 25 the registration of such right or claim (P.D.
years No. 1529, §70)

Implied trusts can be an alternative way of annotating For this special remedy to be availed of, it must
an adverse claim. (Alberto v. Heirs of Panti, G.R. No. be shown that there is no other provision in the
251233, March 29, 2023) law for registration of the claimant’s alleged right
or interest in the property. The herein claim is
based on a perfected contract of sale.

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Considering the Land Registration Act 2. Such statement must be signed and sworn
specifically prescribed the procedure for to before a Notary public or authorized
registration of a vendee’s right on a registered officer to administer the oath.
property, the remedy provided in Section 110, 3. The claimant shall state his Residence or
would be ineffective. (Register of Deeds Quezon place to which all notices may be served
City v. Nicandro, G.R. No. L-16448, April 29,
upon him.
1961)

An adverse claim is a type of involuntary Note: Noncompliance with formal requisites renders
dealing designed to protect the interest of a the adverse claim non-registrable and ineffective.
person over a piece of real property by apprising
third persons that there is a controversy over the Examples of Registrable Adverse Claims
ownership of the land. It seeks to preserve and 1. Voluntary instruments of sale and lease,
protect the right of the adverse claimant during when the owner refuses to surrender the
the pendency of the controversy, where duplicate certificate of title for annotation of
registration of such interest or right is not the voluntary instrument. (L.P. Leviste v.
otherwise provided for by the Property Noblejas, G.R. L-28529, Apr. 30, 1979)
Registration Decree. It serves as a notice to third 2. An interest on land based on a lawyer’s
persons that any transaction regarding the contingent fee contract arising after original
disputed land is subject to the outcome of the registration. (Director of Lands v. Ababa,
dispute. (Logarta v. Mangahis, G.R. No. 213568, G.R. No. L-26096, Feb. 27, 1979)
July 5, 2016)
Examples of Non-registrable Adverse Claims
Before a notice of adverse claim is registered, it
1. A mere money claim. (Sanchez v. CA, G.R.
must be shown that there is no other provision in
law for the registration of the claimant's alleged No. L-40177, Feb. 12, 1976)
right in the property. (Id.) 2. A claim based on hereditary rights of the
children of a deceased parent, when there
It does not appear that respondent attempted to are probate proceedings and one parent is
register the agreement to sell and that the still living. (Arrazola v. Bernas, G.R. No. L-
registered owner refused to surrender the 29740, Nov. 10, 1978)
duplicate certificate for the annotation of said 3. A second adverse claim based on the same
instrument. Instead, respondent merely filed an ground by the same claimant.
adverse claim considering that Section 62 of the 4. Claims based on occurrences before the
Land Registration Act prescribed the procedure
original registration.
for the registration of respondent’s interest and
there is no showing of her inability to produce the 5. Possessor’s claim based on prescription or
owner’s duplicate certificate. Thus, the remedy adverse possession, when the land is
provided in Section 110 is ineffective for the already registered in the name of another.
purpose of protecting her right or interest in the (Id.)
disputed lot. (L.P Leviste & Company Inc. v.
Noblejas, G.R. No. L-28529) Period of Effectivity of Adverse Claim
The adverse claim shall be effective for a period of
A subsequent annotation of a notice of lis 30 days from the date of registration.
pendens on a certificate of title does not
necessarily render a petition for cancellation of The law, taken together, simply means that the
adverse claim on the same title moot and cancellation of the adverse claim is still necessary to
academic. (Valderrama v. Arguelles, G.R. No. render it ineffective otherwise, the inscription will
223660, April 02, 2018) remain annotated and shall continue as a lien upon
the property. (Sajonas v. CA, G.R. No. 102377, July
Formal Requisites to Register an Adverse Claim: 5, 1996)
(WNR)
1. The adverse claimant must state the As explained in Sajonas that for as long there is yet
following in Writing: no petition for its cancellation, the notice of adverse
a. His alleged right or interest claim remains subsisting. (Diaz-Duarte v. Spouses
b. How and under whom such alleged Ong, G.R. No. 130352, Nov. 3, 1998)
right or interest is acquired
c. The description of the land in which
the right or interest is claimed
d. The certificate of title number

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Cancellation of Adverse Claim An adverse claim may exist concurrently with a

An adverse claim may be canceled: subsequent annotation of a notice of lis pendens. (Ty
1. After the lapse of 30 days, upon the filing by Sin Tei v. Dy Piao, G.R. No. 11271, May 28, 1958)
the party-in-interest of a verified petition for
such purpose. When an adverse claim exists concurrently with a
2. Before the lapse of said 30 days, upon the notice of lis pendens, the notice of adverse claim may
filing by the claimant of a sworn petition be validly canceled after the registration of such
notice, since the notice of lis pendens also serves the
withdrawing his adverse claim.
purpose of the adverse claim. (Villaflor v. Juezan,
3. Before the lapse of the 30-day period, when G.R. No. 35205, Apr. 17, 1990)
a party-in-interest files a petition in the
proper RTC for the cancellation of the Distinctions between an annotation of an adverse
adverse claim and, after notice and hearing, claim and an annotation of a notice of lis pendens
the court finds that the claim is invalid. If the An adverse claim protects the right of a claimant
court also finds the claim to be frivolous, it during the pendency of a controversy and constitutes
may fine the claimant the amount of not less a lien on a property. The cancellation of an adverse
than 1,000 pesos nor more than 5,000 claim by way of a court order and the conduct of a
pesos, in its discretion. hearing to determine its validity is necessary to
render it ineffective, otherwise, the inscription will
remain annotated and shall continue as a lien upon
Grounds for Cancellation of Adverse Claim (P.D.
the property.
No. 1529, §64) (MoNoE-UVe)
Before final judgment, the court may order the
A notice of lis pendens protects the right of the
cancellation:
claimant during the pendency of the action or
1. After showing that notice is only for purpose
litigation. It is a mere incident of an action which does
of Molesting an adverse party; not create any right nor lien. Unlike an adverse claim,
2. When it is shown that it is not necessary to it may be cancelled without a court hearing.
protect the right of the party who caused the (Valderama v. Arguelles, G.R. No. 223660, April 2,
registration thereof; 2018)
3. Where the Evidence so far presented by the
plaintiff does not bear out the main Notice of Lis Pendens
allegations of the complaint; “Lis pendens” means “pending suit.” It merely creates
4. When the continuances of the trial are a contingency and not a lien.
Unnecessarily delaying the determination of
the case to the prejudice of the other party; Purpose of Lis Pendens
A notice of lis pendens is an announcement to the
and
whole world that a particular real property is in
5. ROD may also cancel by Verified petition of
litigation, serving as a warning that one who acquires
a party who caused such registration an interest over said property does so at his own risk,
or that he gambles on the result of the litigation over
Note: These grounds are the same as the grounds the said property. (Spouses Po Lam v. CA, G.R. No.
for cancellation of Notice of Lis Pendens. 116220, Dec. 6, 2000)

Notes on Adverse Claims The purpose of the notice of lis pendens is to

The interested party must file with the proper court a constructively advise or warn all people who deal with
petition for the cancellation of an adverse claim, and the property that they so deal with it at their own risk,
a hearing must also first be conducted. The Register and whatever rights they may acquire in the property
of Deeds cannot on its own automatically cancel the in any voluntary transaction is subject to the results
adverse claim for due process purposes. (Diaz- of the action, and may well be inferior and
Duarte v. Ong, G.R. No. 130352, Nov. 3, 1998) subordinate to those which may be finally determined
and laid down therein. (Heirs of Marasigan v. IAC,
The effects of a foreclosure sale retroact to the date G.R. No. L-69303, July 23, 1987)
of registration of the mortgage. If the adverse claim is
registered only after the annotation of the mortgage When Notice of Lis Pendens is Proper (QEER-
at the back of the certificate of title, the adverse claim COP)
could not affect the rights of the mortgagee, even if 1. To Quiet title thereto;
the foreclosure of the mortgage and the public 2. To Establish a right, equitable estate, or
auction sale occurred after the annotation of the interest in specific real property;
adverse claim. (Limpin v. IAC, G.R. No. 70987, Jan. 3. To Enforce a lien, charge, or encumbrance
30, 1987)
against it;

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4. To Recover possession of a real estate; 3. ROD is duty-bound to carry over the notice
5. To remove Clouds upon the title thereof; of lis pendens on all new titles to be issued
6. Any Other proceedings of any kind in court
directly affecting the title to the land or the Grounds for Cancellation of Lis Pendens (P.D.
use of occupation thereof or the building No. 1529, §64) (MoNoE-UVe)
thereon; and Before final judgment, the court may order the
7. For Partition cancellation:
1. After showing that notice is only for purpose
When Lis Pendens is Not Proper (P2LAR) of Molesting an adverse party
1. Preliminary attachment 2. When it is shown that it is not necessary to
2. Proceedings for the Probate of wills protect the right of the party who caused the
3. Levies on execution registration thereof
4. Proceedings for Administration of the estate 3. Where the Evidence so far presented by the
of deceased persons and plaintiff does not bear out the main
5. Proceedings in which the only object is the allegations of the complaint
Recovery of a money judgment 4. When the continuances of the trial are
Unnecessarily delaying the determination of
Elements to annotate notice of lis pendens the case to the prejudice of the other party
1. Property must be of such character as to be 5. ROD may also cancel by Verified petition of
subject to the rule; the party who caused such registration
2. The court must have jurisdiction both over
the person and the res; and Notes on Lis Pendens
3. The property or res must be sufficiently All findings of fraud should begin the exposition with
described in the pleadings. the presumption of good faith; The erroneous
annotation of a notice of lis pendens does not negate
good faith. The overzealousness of a party in
As a rule, for notice of lis pendens to be annotated, protecting pendent lite his perceived interest,
the registered owner should be impleaded. An inchoate or otherwise, in the corporation’s properties
exception to this is when the title registered under the from depletion or dissipation, should not be lightly
name of someone who was not impleaded in the equated to bad faith. (Lu v. Lu Ym, Sr., G.R. Nos.
case because it appeared that they were the 153690, 157381 & 170889, Feb. 15, 2011)
predecessor-in-interest of the plaintiff, and that the
property, even though it is still registered under the
Attachment
name of the predecessors-in-interest, all their
The legal process of seizing another's property in
interests therein have already passed on to the
accordance with a writ or judicial order to secure
plaintiff. (Du v. Ortile, G.R. No. 255934, July 13,
satisfaction of a judgment yet to be rendered
2022; Voluntad v. Dizon, G.R. No. 132294, August
26, 1999)
Kinds
Effect of Notice of Lis Pendens (P.D. No. 1529, 1. Preliminary
§76) 2. Garnishment
No action to recover possession, or to quiet title, or 3. Levy on execution
to remove clouds, or for partition, or other judicial
proceedings directly affecting title or use or Registration of Attachment/Other Liens
occupation or buildings thereon, and no judgment, 1. Copy of writ in order to preserve any lien,
and no proceeding to vacate or reverse any right, or attachment upon registered land
judgment, shall have any effect upon registered land may be filed with ROD where the land lies,
as against persons other than the parties, unless containing the number of certificate of title of
memorandum or notice is filed or registered the land to be affected or description of the
(stating institution of action or proceeding and court
land
were pending, date of institution, reference to the
number of certificate of title, an adequate description 2. ROD to index attachment in names of both
of the land affected and registered owner). plaintiff and defendant or name of the person
for whom property is held or in whose name
Effect of Registration stands in the records
1. Impossibility of alienating the property in 3. If a duplicate of the certificate of title is not
dispute during the pendency of the suit presented:
2. If alienated, the purchaser is subject to the a. ROD shall, within 36 hours, send
final outcome of the pending suit notice to the registered owner by
mail stating that there has been
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registration and request him to rights: due process must be strictly

produce a duplicate so that observed.
memorandum may be made 5. A tax lien is superior to an attachment
b. If the owner neglects or refuses to 6. There is no need to register a tax lien
comply, the ROD shall report the because it is automatically registered once
matter to the court the tax accrues.
c. The court, after notice, shall enter 7. But the sale of registered land to foreclose a
an order to the owner to surrender tax lien needs to be registered.
the certificate at the time and place
named therein Procedure of Registration of Tax Sale
4. Although notice of attachment is not noted in 1. Officer’s return shall be submitted to the
duplicate, notation in the book of entry of ROD together with the owner’s duplicate
ROD produces the effect of registration title;
already. (PD 1529, § 69) 2. Register in the registration book;
3. The memorandum shall be entered in the
Effects of Registration of Attachment (REEA) certificate as an adverse claim or
1. Creates Real right encumbrance;
2. Has priority over Execution sale 4. After the period of redemption has expired
3. But between 2 attachments, one that is and no redemption was made (2 years from
registered Earlier is preferred registration of auction sale), the title must be
4. If it is not registered, Actual knowledge has canceled and a new title will be issued; and
the same effect as registration 5. Before the cancellation, notice shall be sent
to the registered owner, with the directive
When Attachment may be Discharged that he surrenders title and show cause why
1. Upon giving of a counter-bond; it should not be canceled
2. When the attachment was improperly or
irregularly issued or enforced; or Other Parties Required to Register Involuntary
3. When attaching party’s bond is insufficient Dealings
1. Assignee in Involuntary Proceeding for
Execution Sale Insolvency (P.D. No. 1529, §83)
To enforce a lien of any description on registered a. It is the duty of the officer serving
land, any execution or affidavit to enforce such lien the notice to file a copy of such
shall be filed with ROD where the land lies. notice to ROD where the property of
the debtor is located
Register in registration book & memorandum upon
the proper certificate of title as an adverse claim or b. Assignee elected or appointed by
as an encumbrance. the court shall be entitled to entry of
a new certificate of registered land
To determine preferential rights between 2 liens: upon presentment of a copy of
priority of registration of attachment. assignment with the bankrupt's
duplicate certificate of title
Tax Sale c. The new certificate shall state that it
Sale of land for collection of delinquent taxes and is entered into by him as assignee
penalties due to the government. or trustee in insolvency
proceedings
Notes on Tax Sales
1. In personam (all persons interested shall be d. Upon order vacating the insolvency
notified so that they may be given an proceedings, any title issued in
opportunity to be heard). name of the assignee shall be
2. Notice to be given to delinquent taxpayer at ordered surrendered and the debtor
his last known address. shall be entitled to entry of new
3. Publication of notice must also be made in certificate in his name
English, Spanish, and local dialect, posted in
2. Government in Eminent Domain (P.D. No.
a public and conspicuous place in the place
1529, §85)
where the property is situated and at the
a. The expropriating body is required
main entrance of the provincial building.
to file a copy of the judgment in the
4. Sale cannot affect the rights of other lien
eminent domain proceeding within
holders unless given the right to defend their
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ROD, which states a description of

the property, certificate number,
interest expropriated, nature of
public use
b. A memorandum shall be made on
the certificate or, if fee simple is
taken, a new certificate of title shall
be issue

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H. NON-REGISTRABLE PROPERTIES

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An applicant for land registration should know what Subterranean or

properties or lands cannot be subject to private groundwaters; and
appropriation. Waters in swamps and
marshes
Note: The Land Registration Court has no PHIL. CONST., Forest or timberland, public
jurisdiction over non-registrable properties and art. XII, §2. forest, forest reserves lands,
cannot validly adjudge the registration of title in favor mineral lands
of the applicant for the registration of the same.
(Republic v. Feliza, G.R. No. 182913, Nov. 20,
2013) Jurisprudence a) Mangrove swamps
b) Foreshore land and
Non-registrable properties seashore
Basis Non-registrable property c) Navigable rivers,
CIVIL CODE, art. Properties of public dominion streams, and creeks
420 d) Lakes and bays
Classifications:
e) Military reservations
(a) Those intended for
f) Other kinds of
public use, such as roads,
reservations (i.e.,
rivers, torrents, ports, and
reservations for
bridges constructed by the
specific purposes
State, banks, shores,
made by executive
roadsteads, and others of
proclamation)
similar character.
g) Watersheds
Those which belong to the
h) Grazing lands
State, without being for
i) Previously titled land
public use, and are
j) Man-made alluvial
intended for:
deposit along the river
1. public service or
2. the development of the
national wealth.
I. DEALINGS WITH UNREGISTERED
WATER CODE The following belong to the LANDS
(P.D. No. State:
1067), arts. 5 & Rivers and their natural beds; Need for Registration (P.D. No. 1529. §113)
6 Continuous or intermittent No deed, conveyance, mortgage, lease, or other
waters of springs and brooks voluntary instrument affecting land not registered
running in their natural beds under the Torrens system shall be valid, except as
and the beds themselves; between the parties thereto, unless such instrument
Natural lakes and lagoons; shall have been recorded in the manner herein
All other categories of surface prescribed in the office of the Register of Deeds for
waters such as water flowing the province or city where the land lies.
over lands, water from rainfall
whether natural or artificial, The system of registration under the Spanish
and water from agriculture Mortgage Law is discontinued and all lands
runoff, seepage, and drainage; recorded under said system which are not yet
Atmospheric water; covered by Torrens title shall be considered
Subterranean or groundwater; unregistered lands.
Seawater;
System of Registration for Unregistered Lands
Those found on private lands Before, the system of registration for unregistered
which also belong to the State: land under the Torrens System (Act 3344) only
Continuous or intermittent covered voluntary dealings. Now, it includes
waters rising on such lands; involuntary dealings.
Lakes and lagoons naturally
occurring on such lands; Effect: If prospective, it binds 3rd persons after
Rainwater and falling on such registration but yields to better rights of 3rd person
lands; prior to registration (limited effect to 3rd parties).

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It thus appears that the “better right” referred to in registered under the Torrens system, or under the
Act No. 3344 is much more than the mere prior deed Spanish Mortgage Law. To hold otherwise, would
of sale in favor of the first vendee. In the Lichauco result in the anomalous situation of two
case, it was the prescriptive right that had registrations, one under Act 496 with respect to
supervened. Or, as also suggested in that vase, unimproved land, and another, under Act 3344 for
other facts and circumstances exist which, in improvements subsequently introduced on the
addition to his deed of sale, the first vendee can be same land. (Salita v. Calleja, G.R. No. L-17314)
said to have better right than the second purchaser.
(Hanapol v. Plapil, G.R. No. L-19248, Feb. 28, 1963) Effect of Registration
Registration of an instrument involving unregistered
Reason: No strict investigation involved land in the Registry of Deeds creates constructive
notice and binds a third person who may
Subsequent dealings are also valid if recorded. subsequently deal with the same property. (Heirs of
ROD keeps a daybook and a register, and an index Deleste v. Land Bank, G.R. No. 169913, June 8,
system is also kept. 2011)

Procedure: The reliance on an unnotarized and unregistered

1) Presentation of instrument dealing with deed of absolute sale of real property executed in
unregistered land; one’s favor is misplaced and unwarranted, for the
2) If found in order, the instrument is non-registration of the deed meant that the sale
registered; and could not bind third parties. The transaction affecting
3) If found defective, the registration is unregistered lands covered by an unrecorded
refused. The reason for refusal will be contract, if legal, might be valid and binding on the
written. parties themselves, but not on third parties. In the
case of third parties, it was necessary for the
Under Act 3344, registration of instruments affecting contract to be registered. (Dadizon vs. Court of
unregistered lands is without prejudice to a third Appeals, G.R. No. 15911, Sept. 30, 2009)
party with a better right. (Radiowealth Finance Co.
v. Palileo, G.R. No. 83432, May 20, 1991) Innocent purchasers of unregistered lands
An ordinary buyer may rely on the certificate of title
Registration of instruments affecting unregistered issued in the name of the seller. He or she need not
lands is “without prejudice to a third party with a look beyond what appears on the face of the
better right.” The aforequoted phrase has been held certificate of title. However, the defense of having
by this Court to mean that the mere registration of a purchased the property in good faith may be availed
sale in one’s favor does not give him any right over of only where registered land is involved and the
the land if the vendor was not anymore the owner of buyer had relied in good faith on the clear title of the
the land having previously sold the same to registered owner. It does not apply when the land is
somebody else even if the earlier sale was not yet registered with the Registry of Deeds. (Heirs
unrecorded. (Radiowealth Finance Company v. of Gregorio Lopez v. DBP., G.R. No. 193551, Nov.
Palileo, G.R. No. 83432, May 20, 1991) 19, 2014)

If a parcel of land covered by a Torrens Title is sold, Vis-à-vis the Torrens System
but the sale is registered under Act 3344, and not A duly registered levy on attachment takes
under the Land Registration Act, the sale is not precedence over a prior unregistered sale. This is
considered registered and the registration of the not diminished by the subsequent registration of the
deed not operate as constructive notice to the whole prior sale. This is consistent with the fundamental
world. (Vda. de Melencion v. CA, G.R. No. 148846, principle of the Torrens system that registration is
Sept. 25, 2007; Mactan-Cebu International Airport the operative act that gives validity to the transfer or
Authority v. Spouses Edito, G.R. No. 171535, June creates a lien upon the land. (Suntay v. Keyser
5, 2009) Mercantile, Inc., 2014)

In order to be registerable under Act No. 3344, the

instrument must refer only to unregistered land and J. ASSURANCE FUND
its own improvements only, and not any other kind
of real estate or properties. The words “own” and Nature of Assurance Fund
“only” used in the language of the law when referring The Assurance Fund is a special fund created by
to improvements, clearly mean improvements on P.D. No. 1529 to compensate a person who
unregistered lands alone. In fine, the deed cannot sustains loss or damage, or is deprived of land or
refer to improvements or buildings on lands

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interest therein, as a consequence of the bringing of and prompted him to investigate the property
the land under the operation of the Torrens system. involved. (Torres v. CA, 186 SCRA 679, 1990.

The Assurance Fund was meant as a form of State Conditions for Compensation from Assurance
insurance that allows recompense to an original title Fund
holder who, without any negligence on his part 1. A person who sustained loss or damage, or
whatsoever, has been apparently deprived of his is deprived land or any estate or interest
land initially by a usurper. The ordinary remedies therein;
against the usurper would have allowed the original 2. Such loss, damage or deprivation was
title holder to recover his property. However, if the occasioned by the bringing of the land
usurper is able to transfer the same to an innocent under the operation of the Torrens system
purchaser for value and he is unable to compensate or arose after the original registration of the
the original title holder for the loss, then the latter is land;
now left without proper recourse. As repeatedly 3. The loss, damage or deprivation was due
stated, the intent of the Assurance Fund is to to fraud, or any error, omission, mistake, or
indemnify the innocent original title holder for his mis-description in any certificate of title or
property loss, which loss is attributable to not only in any entry or memorandum in the
the act of a usurper but ultimately the operation of registration book; (Loss or damage should
the Torrens System of registration which by reason not be due to breach of trust or mistake in
of public policy, tilts the scales in favor of innocent resurvey resulting in expansion of area in
purchasers for value. (Stilianopoulous vs. Register certificate of title.)
of Deeds of Legaspi City and the National 4. The aggrieved party was not negligent;
Treasurer, G.R. No. 224678, July 03, 2018) 5. He is barred under the provisions of P.D.
No. 1529 or under the provisions of any law
Contribution to the Assurance Fund (Sec. 93, from recovering such land; and
P.D. No. 1529) 6. The action has not prescribed.
A contribution to the fund, amounting to one-fourth (Stilianopoulous vs. Register of Deeds of
(1/4) of one percent (1%) of the land’s assessed Legaspi City and the National Treasurer,
value shall be made in the following instances: G.R. No. 224678, July 03, 2018)
1. Upon the entry of a certificate of title in the
name of the registered owner; Against whom filed (Sec. 96, P.D. No. 1529)
2. Upon the original registration on the If the loss, damage, or deprivation is wholly through
certificate of title of a building or other the fault, negligence, omission, mistake, or
improvements on the land covered by said misfeasance of the court personnel, the ROD or his
certificate; and deputies and employees: the action must be brought
3. Upon the entry of a certificate pursuant to against the ROD and the National Treasurer
any subsequent transfer of registered land
If the same is attributable to persons other than said
The contribution shall be based on the assessed officials, the action must be brought against the
value, according to the last assessment for taxation. ROD, the National Treasurer, and such other
If the land has not yet been assessed for taxation, persons.
its value shall be determined by the sworn
declaration of two disinterested persons to the effect Where to file
that the value fixed by them is to their knowledge, a Any court of competent jurisdiction: RTC in city
fair valuation, subject to modification by the courts. where property lies or resident of plaintiff.

Compensation from Assurance Fund Prescriptive Period (Sec. 102, P.D. No. 1529)
An action civil in character, which may be in the form The action must be instituted within 6 years from the
of an ordinary complaint for damages. issuance of the certificate of title. If the plaintiff is
minor, insane or imprisoned, he has additional 2
The person bringing the action for damages against years after disability is removed to file the action.
the Fund must be the registered owner or holders of Under the circumstances obtaining in
transfer certificates of title or innocent purchasers Stilianopoulous vs. Register of Deeds of Legaspi
for value. (La Urbana v. Bernardo, 62 Phil. 790, City and the National Treasurer, the period should
1936) be reckoned from the moment the innocent
purchaser for value registers his or her title and
This remedy is not available when the party seeking upon actual knowledge thereof of the original title
compensation was negligent, as when there were holder/claimant.
circumstances which should have put him on guard

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Compensation and Execution (Secs. 97,99 P.D. the title of a person to a piece of land. The purpose
No. 1529) of the reconstitution of title is to have, after
Compensation cannot be more than the fair market observing the procedures prescribed by law, the title
value of land at time of loss. reproduced in exactly the same way it has been
when the loss or destruction occurred. (Gaoiran v.
Amount to be recovered is not limited to P500,000 Court of Appeals, G.R. No. 215925, March 7, 2022)
which is maintained as standing fund. If fund is not
sufficient, National Treasurer is authorized to make For an order of reconstitution to be issued, it must
up for deficiency from other funds available to be clearly shown that the certificate of title had been
Treasury even if not appropriated. lost or destroyed. If a certificate of title has not been
lost, but is in fact in the possession of another
Execution is first sought against the person person, then the reconstituted title is void and the
responsible for fraud; if he is insolvent, against the court that rendered the decision had no jurisdiction.
National Treasury. Thereafter, the Government (Id.)
shall be subrogated to the rights of plaintiff to go
against other parties or securities. Reconstitution presupposes the existence of an
original certificate of title which was lost or
The Assurance Fund is only liable in the last resort, destroyed. If there was no loss or destruction as in
as suggested under Section 97 of Presidential the case at bar, there is actually nothing to
Decree No. 1529. The person causing the fraud or reconstitute. (Id.)
the error should be liable first. However, if the
judgment cannot be executed, the Assurance Fund Kinds of Reconstitution:
is the insurance to the innocent purchaser for value 1. Judicial
who relied on the validity of the real property’s 2. Administrative
certificate of title. In showing that the person causing
the fraud passed away and did not leave property, it Procedure in case of loss of an owner’s
meant that the state cannot execute a judgment
duplicate certificate of title:
granting the innocent purchaser’s claim from such
person. It excuses the claimant from impleading the A. In case of loss or theft:
person causing the fraud or his estate in the Petition a. Due notice under oath shall be
because in this situation, the judgment may only be sent by the owner or by someone
enforced against the Assurance Fund. (The on his behalf;
Register of Deeds of Negros Occidental v. Anglo, b. to the Register of Deeds of Deeds
Sr., G.R. No. 171804, August 5, 2015) of the province or city where the
land lies;
c. as soon as the loss or theft is
K. RECONSTITUTION OF TITLES discovered.
B. If lost or destroyed, or cannot be produced
Reconstitution of Original Certificate of Title by a person applying for the entry of a new
The restoration of the instrument which is supposed
certificate to him or for the registration of
to have been lost or destroyed in its original form
any instrument:
and condition.
a. A sworn statement of the fact of
When the owner’s duplicate certificate of title has such loss or destruction;
not been lost but is in fact in the possession of b. By the registered owner or other
another person, then the reconstituted certificate is person in interest and registered.
void, because the court that rendered the decision (§ 109, P.D. No. 1529)
had no jurisdiction. Reconstitution can validly be
made only in case of loss of the original certificate. Upon the petition of the registered owner or other
(Alcazar v. Arante, G.R. No. 177042, Dec. 10, 2012) person in interest, the court may, after notice and
Purpose
due hearing, direct the issuance of a new duplicate
To have the same reproduced, after proper
certificate, which shall contain a memorandum of
proceedings, in the same form they were when the
loss or destruction occurred. (Heirs of Pedro Pinote the fact that it is issued in place of the lost duplicate
v. Dulay, G.R. No. L-56694, Jul. 2, 1990) certificate, but shall in all respects be entitled to like
faith and credit as the original duplicate, and shall
Verily, the reconstitution of a certificate of title thereafter be regarded as such for all purposes of
denotes restoration in the original form and this decree. (Id.)
condition of a lost or destroyed instrument attesting

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Reconstitution v. Re-issuance of Lost Owner’s Torrens certificate in the same form and in exactly
Duplicate Certificate the same way it was at the time of the loss or
RECONSTITUTION RE-ISSUANCE destruction. (Republic v. Mancao, G.R. No. 174185,
WHAT IS LOST? July 22, 2015)
What is lost is the What is lost is the
original filed in the RD owner’s copy in The fact of loss or destruction of the owner's
vault possession of the duplicate certificate of title is crucial in clothing the
owner RTC with jurisdiction over the judicial reconstitution
proceedings. (Gaoiran v. Court of Appeals, G.R. No.
215925, March 7, 2022)

Requirements (LDR-FB)
PUBLICATION
1. The certificate of title had been lost or
Publication in the OG No OG publication
destroyed.
The court may require The court may require 2. The Documents presented by the petitioner
you to also cause you to also cause are sufficient and proper to warrant
publication in a publication in a reconstitution of the lost or destroyed
newspaper of general newspaper of general certificate of title.
circulation circulation 3. The petitioner is the Registered owner of
ADMINISTRATIVE the property or had an interest therein.
There can be There is NO 4. The certificate of title was in Force at the
administrative administrative re- time it was lost or destroyed.
reconstitution issuance of new 5. The description, area, and Boundaries of
owner’s duplicate
the property are substantially the same and
copy
those contained in the lost or destroyed
FURNISHING OF COPY certificate of title. (Heirs of Toring v. Heirs
of Boquilaga, G.R. No. 163610, Sep. 27,
OSG should be copy NO need to copy
furnished furnished OSG 2010, citing R.A. No. 26, § 2, 3, 12 and 13)

Note: The claimants must prove that a title had been

issued and that said certificate of title was still in
Material facts to be shown:
force at the time it was lost or destroyed. It is
1. That the certificate of title had been lost or
necessary that the RD issue a certification that such
destroyed;
was in force at the time of its alleged loss or
2. That the documents presented by petitioner destruction. The RD cannot issue such certification
are sufficient and proper to warrant merely because of the dearth of records in its file.
reconstitution of the lost or destroyed (Republic v. Heirs of Sps. Sanchez and Meneses,
certificate of title; G.R. No. 212388, Dec. 10, 2014)
3. That the petitioner is the registered owner
of the property or had an interest therein; In reconstitution proceedings, before jurisdiction
4. That the certificate of title was in force at the over the case can be validly acquired, it is a
time it was lost or destroyed; and condition sine qua non that the certificate of title has
5. That the description, area, and boundaries not been issued to another person. If a certificate of
of the property are substantially the same title has not been lost but is in fact in the possession
of another person, the reconstituted title is void and
and those contained in the lost or destroyed
the court rendering the decision has not acquired
certificate of title (Republic v. Lorenzo, G.R. jurisdiction over the petition for issuance of new title.
No.172338, Dec. 10, 2012.) The courts simply have no jurisdiction over petitions
by (such) third parties for reconstitution of allegedly
Judicial Reconstitution lost or destroyed titles over lands that are already
The judicial reconstitution of a Torrens title under covered by duly issued subsisting titles in the names
Republic Act No. 26 means the restoration in the of their duly registered owners. The existence of a
original form and condition of a lost or destroyed prior title ipso facto nullifies the reconstitution
Torrens certificate attesting the title of a person to proceedings. The proper recourse is to assail
registered land. The purpose of the reconstitution is directly in a proceeding before the regional trial court
to enable, after observing the procedures prescribed the validity of the Torrens title already issued to the
by law, the reproduction of the lost or destroyed

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other person. (Paulino vs. Curt of Appeals, G.R. No.

207533, June 4, 2014)

In Reconstitution proceedings, the prior existence of

allegedly lost title must be proved, or at least the title
number must be known. Failure to present any
competent evidence, private or official, indicating
the number of the purported title of the subject lots
is a fatal defect which will warrant the dismissal of a
petition for reconstitution. (Republic of the
Philippines v. Heirs of Booc, G.R. No. 207159,
February 28, 2022)

Tax declaration
The tax declaration does not serve as a valid basis
for reconstitution. For one, we cannot safely rely on
Tax Declaration No. 15003-816 as evidence of the
subject property being covered by TCT No. T-22868
in the name of respondent because a tax declaration
is executed for taxation purposes only and is
actually prepared by the alleged owner himself.
(Republic v. Santua, G.R. No. 155703, September
8, 2008)

Summary of Process:
1. File a petition with the RTC (In rem
proceeding).
2. The court shall cause a NOTICE to be
PUBLISHED, POSTED, and/or MAILED.
Non-compliance voids the proceeding as
such requirements are jurisdictional.
3. When the court grants the petition, it shall
issue a corresponding order to ROD

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Judicial Reconstitution Process

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Sources for Reconstitution (in order) duplicate certificate filed by another person who is
not the registered owner is to ensure an orderly
When OCT is to be reconstituted (R.A. No. 26, § proceeding and to safeguard the due process rights
2.) of the registered owner. It prevents the commission
1. Owner’s duplicate of the certificate of title; of fraud. (Heirs of Spouses Ramirez v. Abon, G.R.
2. Co-owner’s, mortgagee’s or lessee’s No. 222916, July 24, 2019.)
duplicate of said certificate;
3. Certified copy of such certificate, previously The requirement that the owner's duplicate
issued by the ROD; certificate of title be presented for voluntary
4. Authenticated copy of the decree of transactions is precisely what gives the registered
owner "security" and "peace of mind" under the
registration or patent, as the case may be,
Torrens system. Without the owner's duplicate
which was the basis of the certificate of title; certificate of title, transfers and conveyances and
5. Deed of mortgage, lease, or encumbrance agencies and trusts, while valid, will not bind the
containing a description of the property registered land. Hence, a registered owner has a
covered by the certificate of title and on file substantive right to own and possess the owner's
with the ROD, or an authenticated copy duplicate certificate of title and to replace the same
thereof indicating that its original had been in case of loss or destruction.
registered; and
6. Any other document which, in the judgment Also, if the loss of the certificate of title has been
of the court, is sufficient and proper basis proven, the court, after notice and hearing, should
direct the issuance of a new duplicate certificate in
for reconstitution
its original form and condition, with a memorandum
of the fact that it is being issued in place of the lost
When TCT is to be reconstituted (R.A. No. 26, § duplicate certificate. On the other hand, if the loss is
3.) not proven, the court, after notice and hearing,
1. Same as sources (a), (b), and (c) for should dismiss the petition without prejudice to the
reconstitution of OCT; registered owner's subsequent compliance with the
2. Deed of transfer or other document requisites prescribed by law. Therefore, X
containing a description of the property Corporation cannot be barred by res judicata from
covered by TCT and on file with the ROD, filing a second petition to replace its owner’s
or an authenticated copy thereof indicating duplicate certificate of title in case of loss or
its original had been registered and destruction of the original duplicate. (Philippine
pursuant to which the lost or destroyed Bank of Communications v. Register of Deeds for
certificate of title was issued; and the Province of Benguet, G.R. No. 222958, March
11, 2020)
3. Same as sources (e) and (f) for
reconstitution of OCT Petitions for Reconstitution
In sum, R.A. No. 26 separates petitions for
Section 109 of PD 1529 contemplates a situation reconstitution of lost or destroyed certificates of title
where when an owner's duplicate certificate of title into two main groups with two different requirements
is lost or destroyed, a person who is a transferee of and procedures. Sources enumerated in Sections
the ownership over the property, who is not 2(a), 2(b), 3(a), 3(b), and 4(a) of RA 26 are lumped
necessarily the registered owner, may also file the under one group (Group A); and sources
petition for reconstitution. In this situation, the enumerated in Sections 2(c), 2(d), 2(e), 2(f), 3(c),
registered owner must also be duly notified of the 3(d), and 3(f) are placed together under another
proceedings. By his or her very status as registered group (Group B). For Group A, the requirements for
owner, the latter is an interested party in the petition judicial reconstitution are set forth in Section 10 in
for reconstitution case. This is pursuant to the legal relation to Section 9 of RA 26; while for Group B, the
presumption that the registered owner is the owner requirements are in Sections 12 and 13 of the same
of the property, thus affording him preferential right law. (Puzon v. Sta. Lucia Realty and Developent,
over the owner's duplicate, duly notifying him would Inc., G.R. No. 139518, March 6, 2001)
prevent a person who wrongfully purports to be the
owner of the property to commit fraud. It would offer
the registered owner sufficient opportunity to contest
the supposed interest of the person filing the petition
for reconstitution. The rule on the mandatory
notification of the registered owner in a petition for
reconstitution of a lost or destroyed owner's

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GROUP A GROUP B
SOURCES
1. The owner's duplicate of the certificate of title; 1.
A certified copy of the certificate of title,
2. The co-owner's, mortgagee's, or lessee's previously issued by the register of deeds
duplicate of the certificate of title; or by a legal custodian thereof;
3. Annotations or memoranda appearing on the 2.
An authenticated copy of the decree of
owner's co-owner's mortgagee's or lessee's registration or patent, as the case may be,
duplicate; pursuant to which the original certificate of
title was issued;
3. A document, on file in the registry of
deeds, by which the property, the
description of which is given in said
document, is mortgaged, leased or
encumbered, or an authenticated copy of
said document showing that its original
had been registered;
4. Any other document which, in the
judgment of the court, is sufficient and
proper basis for reconstituting the lost or
destroyed certificate of title; and
5. The deed of transfer or other document,
on file in the registry of deeds, containing
the description of the property, or an
authenticated copy thereof, showing that
its original had been registered, and
pursuant to which the lost or destroyed
transfer certificate of title was issued;
CONTENTS OF NOTICE AND PETITION
Contents of Notice (R.A. No. 26, § 9) Contents of Petition (R.A. No. 26, § 12)
a) Number of the certificate of title 1. That the owner’s duplicate of the
b) Name of the registered owner certificate of title had been lost or
c) Names of the interested parties appearing in the destroyed;
reconstituted certificate of title 2. That no co-owner’s, mortgagor’s, or
d) Location of the property lessee’s duplicate had been issued
e) The date on which all persons having an 3. The location, area, and boundaries of the
interest in the property must appear and file property;
such claims as they may have. (Puzon v. Sta. 4. The nature and description of the
Lucia, G.R. No. 139518, Sep. 17, 2001) buildings or improvements, if any, which
do not belong to the owner of the land, and
the names and addresses of the owners
of such buildings or improvements;
5. The names and addresses of the (a)
occupants or persons in possession of the
property, (b) of the owners of the adjoining
properties, and (c) of all persons who may
have any interest in the property;
6. A detailed description of the
encumbrance, if any, affecting the
property; and
7. A statement that no deeds or other
instruments affecting the property have
been presented for registration, or, if there

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be any, the registration thereof has not

been accomplished, as yet

Contents of Notice (R.A. No. 26, § 13)

a. Number of the lost or destroyed certificate
of title, if known
b. Name of the registered owner
c. Names of the interested parties appearing
in the reconstituted certificate of title
d. Location of the property
e. The date on which all persons having any
interest therein must appear and file their
claim or objections to the petition.
PUBLICATION, POSTING, AND/OR POSTING
Publication & Posting Requirement (R.A. No. 26, § 9 Publication & Posting Requirement (R.A. No.
&10) 26, § 13)
a. Notice shall be published in two successive 1. Notice shall be published in two
issues of the Official Gazette; successive issues of the Official Gazette;
b. Must be posted on the main entrance of the 2. Must be posted on the main entrance of
provincial building and of the municipal building the provincial building and of the municipal
of the municipality or city where the land is building of the municipality or city where
situated. the land is situated.

These requirements must be complied with at least 30 These requirements must be complied with at least
days prior to the date of hearing. 30 days prior to the date of hearing.

Registered Mail
The notice must be sent by registered mail or
otherwise, at the expense of the petitioner, to every
person named in said notice (actual occupants and
adjacent owners). This shall be done at least thirty
days prior to the date of hearing.

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Effect of Failure to Comply with Publication or descriptions as embodied in the blueprints and such
Posting Requirements other documents adduced as bases for the
If an order of reconstitution is issued without any production of the new title, likewise does not
previous publication, such order of reconstitution is necessitate another posting and publication
null and void. Even the publication of the notice of because while they were newly mentioned in the
hearing in a newspaper of general circulation like second amendment, the same were already
the Manila Daily Bulletin is not in substantial available for the court to scrutinize during the first
amendment.
compliance with the law because Section 13
specifies publication in the OG and does not provide The reconstitution of title is an action in rem, which
for any alternative medium or manner of publication. means it is one directed not only against particular
(MWSS v. Sison, G.R. No. L-40309, Aug. 31, 1983) persons, but against the thing itself. 27 The essence
of posting and publication is to give notice to the
The notice must be actually sent or delivered to whole world that such petition has been filed and
parties affected by the petition for reconstitution. that interested parties may intervene or oppose in
The order of reconstitution issued without the case. This purpose was achieved in this case
compliance with the said requirement never when notices on the first and second amendments
becomes final - it was null and void. (Manila Railroad were duly served upon the parties in interest of the
case and proper posting and publication was made
v. Moya, G.R. No. L-17913, Jun. 22, 1965)
to the original petition for reconstitution. In view of
this, We find that the court validly acquired
Respondent, as possessor thereof, or as one who is jurisdiction over the case. (Republic v. Abellanosa,
known to have an interest in the property, should G.R. No. 205817, October 6, 2021)
have been sent a copy of the notice at the expense
of the petitioner, pursuant to section 13 of RA 26. It Administrative Reconstitution
is clear from section 13 that notice by publication is Originally embodied in R.A. No. 26, abrogated
not sufficient under the circumstances. Notice must
through P.D. No. 1529, then partially revived
be actually sent or delivered to parties affected by
the petition for reconstitution. The order of through R.A. No. 6732.
reconstitution, therefore, having been issued
without compliance with the said requirement, has R.A. No. 6732 provides for retroactive application
never become final as it was null and void. (Manila thereof to cases 15 years immediately preceding
Railroad Company v. Moya, G.R. No. L-17913, June 1989.
22, 1965)
Requisites (R.A. No. 6732, § 1.)
The failure to meet any of the necessary publication, 1. There is a substantial loss or destruction of the
notice of hearing, and mailing requirements did not original land titles due to fire, flood, or other
vest jurisdiction of the case to the court. Thus, the force majeure as determined by the
judgment rendered by the RTC regarding the Administrator of the LRA;
reconstitution of title is void. (Republic v. Sanchez, 2. The number of certificates of title lost or
G.R. No. 146081, Jul. 17, 2006) damaged should be at least 10% of the total
number in the possession of the Office of the
For non-compliance with the actual notice ROD; and
requirement in Section 13 in relation to Section 12 3. These lost or damaged titles should not be less
of RA 26, the trial court did not acquire jurisdiction than 500.
over the LRC Case. The proceedings in that case
were thus a nullity and the order was void. (Republic Sources (R.A. No. 6732, § 2.)
v. Spouses Roberto, G.R. No. 146081, July, 17, 1. Owner’s duplicate of the certificate of title
2006) 2. Co-owner’s, mortgagee’s, or lessee’s
duplicate of said certificate
Nevertheless, assuming arguendo that another
posting and publication was necessary in view of the LRA report
second amendment, the absence of the same does The LRA must submit a REPORT on or before the
not divest the RTC of its jurisdiction that it validly date of hearing, indicating which of the lots subject
acquired in the first instance. Settled is the rule that of the reconstitution have already been issued titles
jurisdiction once acquired is not lost upon the and that, conversely, the Court, after considering the
instance of the parties but continues until the case REPORT must render a Decision taking into
is terminated. 26 Moreover, the use of the technical

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consideration said Report. (Supreme Court

Administrative Circular 7-96)

HOWEVER, non-compliance with this circular does

not divest the trial court of jurisdiction over the
petition for reconstitution.

It is not mandatory, however, for the reconstitution

court to wait for such LRA Report indefinitely. If none
is forthcoming on or before the date of the initial
hearing, it may validly issue an order or judgment
granting reconstitution. (Felicisimo Opriasa vs. The
City Government Of Quezon City, G.R. No. 149190,
December 19, 2006 citing Puzon v. Sta. Lucia
Realty & Development Inc)

The required quantum of evidence to reconstitute a

certificate of title is clear and convincing evidence.
In this case, the lower court granted the
reconstitution of titles on a mere preponderance of
evidence. Additionally, the CA relied primarily on the
second LRA report to affirm the decision of
reconstitution, but this was erroneous since both the
first and second LRA reports had no probative
value. This is because both reports do not fall within
the class of public documents under Section 23,
Rule 132 of the Rules since they do not reflect
entries in public records made in the performance of
a duty by a public officer, are not certified copies or
authenticated reproductions of original official
records in the legal custody of a government office,
and are not even records of public documents. As
such, without the testimonies of the public officers
who issued them or who were custodians thereof,
they are bereft of probative value.

Since jurisprudence, LRA Circular No. 35 and SC

Administrative Circular No. 7-96 state that the LRA
must both submit its report and attend the hearing
through one of their officials for the reconstitution of
lost or destroyed certificates, the failure of the RTC
to comply with one of the requirements means that
the petition for reconstitution should be dismissed.

Finally, LRA Circular No. 35 requires that the RD

shall submit “written findings” of the status of the title
to be reconstituted. According to jurisprudence, the
Certificate that Respondent X presented fails to
meet this requirement. Thus, this is another ground
to dismiss Respondent X’s petition for
reconstitution. (Republic v. Manansala, G.R. No.
241890, May 3, 2021)

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Administrative Reconstitution Process

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Summary of Judicial and Administrative Reconstitution

--end of topic--

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VII. WILLS AND SUCCESSION A. GENERAL PROVISIONS

DEFINITION
TOPIC OUTLINE UNDER THE SYLLABUS

A. GENERAL PROVISIONS ( Succession – mode of acquisition by virtue of which

1. Definition the property, rights and obligations to the extent of
2. Succession Occurs at the Moment of Death the value of the inheritance, of a person are
transmitted through his death to another or others
3. Kinds of Successors
either by his will or by operation of law. (Art. 774)
B. TESTAMENTARY SUCCESSION
Kinds of succession
1. Wills
2. Testamentary Capacity (a) Compulsory — succession to the legitime (this
3. Notarial and Holographic Wills; Joint Will prevails over all kinds)
4. Witnesses to a Notarial Will; Qualifications (b) Testate — succession by will
(c) Intestate — succession by operation of law;
and Disqualifications
occurs in the absence of a valid will
5. Codicils and Incorporation by Reference
(d) Mixed — a combination of testate and intestate
6. Conflict Rules
succession. (Balane, Jottings and
7. Revocation of Wills
8. Republication and Revival of Wills Jurisprudence in Civil Law, p. 29, 2016)
9. Allowance and Disallowance of Wills
ELEMENTS OF SUCCESSION
10. Institution and Substitution of Heirs
11. Dispositions with a Condition or Term
12. Compulsory Heirs; Legitime (a) Subjective Element
13. Disinheritance
14. Legacies and Devises (i) Decedent — person whose property is
transmitted through succession (Art. 775);
C. INTESTATE SUCCESSION also called testator in testate succession.
1. Causes of Intestacy and Relationship (ii) Successors/Heirs – those who are called
2. Right of Representation to succession to the whole or to an aliquot
3. Order of Intestate Succession portion of the inheritance either by will or by
operation on law. (Art. 782)
D. PROVISIONS COMMON TO TESTATE AND
INTESTATE SUCCESSION SUCCESSION OCCURS AT THE MOMENT OF
DEATH

(b) Causal Element

NOTE: This portion may still be subject to
updates. A supplementary reviewer shall be Death of the Person – The rights to the succession
issued, if necessary. are transmitted from the moment of the death of the
decedent. (Art. 777)

Thus, the capacity of the heir is determined as of the

time the decedent died (Art. 1034); the legitime is to
be computed as of the same moment (Art. 908), and
so is the inofficiousness of the donation inter vivos
(Art. 771). Similarly, the legacies of credit and
remission are valid only in the amount due and
outstanding at the death of the testator (Art. 935),
and the fruits accruing after that are deemed to
pertain to the legatee. (Art. 948; Calalang-Parulan v.
Calalang-Garcia, G.R. No. 184148)

In addition, the law in force at the time of the

decedent’s death will determine who the heirs
should be [Uson v. Del Rosario, 92 Phil. 530)] and
ownership passes to the heir at the very moment of
death, therefore, from that moment: (a) the heir
acquires the right to dispose of his share [De Borja

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v. Vda. De Borja, 46 SCRA 577] and; (b) the heir’s (b) Legatees – persons to whom gifts of
interest in the estate may be attached for purposes personal property are respectively given by
of execution of his creditor [Reganon v. Imperial, 22 virtue of a will (Art. 782)
SCRA 80] 3) Legal or Intestate – those who succeed to the
estate of the decedent who dies without a valid
However, a person may be presumed dead for the will, or one who does not leave a will, or to the
purpose of opening his succession. (see rules on portion of such estate not disposed of by will
presumptive death, Art. 390-391) In this case, 4) Mixed – is that effected partly by will and partly
succession is only of provisional character because by operation of law (Art. 780)
there is always the chance that the absentee may
be alive. Note: The distinction between heirs and devisees or
legatees is important in these cases:
Future inheritance cannot be the subject of a (a) Preterition (Art. 854), which totally annuls
contract of sale because the seller owns no the institution of heirs but devisees and
inheritance while his predecessor lives. (Art. 1347 in legacies remain valid
relation to Art. 777) (b) Imperfect/Ineffective disinheritance, which
annuls institution of heirs only insofar as it
(c) Objective Element (Art. 776) may prejudice the person disinherited
(c) After-acquired properties
Inheritance – is the subject matter of succession (d) Acceptance or non-repudiation of
and includes all the transmissible property, rights, successional rights
and obligations of a person, which are not
extinguished by his death.
B. TESTAMENTARY SUCCESION
Note: If the right or obligation is strictly personal, it
is not transmissible, hence, it is extinguished by 1. WILLS
death. (Balane, supra, p.2)
Concept of a Will
Determination of “Non-Transmissibility” of It is an act whereby a person is permitted with the
Obligation formalities prescribed by law to control to a certain
1) Nature of the Obligation- must be personal degree the disposition of his estate to take effect
obligation (e.g., to sing, dance, or obligations after his death. (Art. 783)
to do)
2) Intransmissibility by stipulation of the parties; Note: A will disposes only the free portion of the
3) Intransmissible by law estate. (Art. 886; Balane, supra, p. 38)
Succession Distinguished From Inheritance Characteristics of a Will
Succession refers to the legal mode by which 1) Unilateral — does not need the approval of
inheritance is transmitted to the persons entitled to any other person (implied in Art. 783)
it; while inheritance refers to the universality or
entirety of the property, rights and obligations of a 2) Strictly Personal Act (Arts. 784-785)
person who died.
• The making of a will is strictly a personal
KINDS OF SUCCESSION act; it cannot be left to the discretion of a
third person, or accomplished through the
1) Compulsory – those who succeed by force of instrumentality of an agent or attorney (Art.
law and are entitled to a legitime, which is in 784)
proportion to the entire disposable estate and • The following acts or stipulations may not
is predetermined by law, of which they cannot be delegated to third persons:
be deprived by the testator, except through a a. Designation of heirs, devisees, or
valid disinheritance legatees; (Balane, supra, p.41)
2) Voluntary or Testamentary – those who are
instituted by the testator in his/her will to b. Duration or efficacy of the designation
succeed to the free portion (that which the of heirs, devisees or legatees;
testator can freely dispose) c. Determination of the portions which the
(a) Devisees – persons to whom gifts of real heirs, devises, or legatees are to take,
property are given by virtue of a will (Art. when referred to by name; and
782)

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d. Determination of whether or not the 11) Permitted/Statutory – Purely statutory such

testamentary disposition is to be that without a law authorizing it, it is not
operative (Arts.785 and 787) available.

Interpretation of Wills
Note: This is entirely different from the If a testamentary disposition admits of different
acceptance or renunciation by the heir interpretations, in case of doubt that interpretation
as beneficiary. The heir has the by which the disposition is to be operative shall be
freedom to accept or renounce the preferred. (Art. 788)
testamentary benefit.
The words of a will are to be interpreted in a manner
• Acts which may be delegated to third
which will give effect to every expression, rather
persons (Art. 786): than one which will render any of the expressions
a. Distribution of specific property or inoperative. The interpretation which will prevent
sums of money that the testator may intestacy shall be preferred. (Art. 791)
leave in general to specified classes or
causes; and Underlying Principle: Testacy is always preferred
b. Designation of the persons, institutions than intestacy, because the former is the express
or establishments to which such will of the decedent whereas the latter is only his
property or sums are to be given or implied will. (Balane, supra, p. 45)
applied.
Animus Testandi - The testator’s intent (animus
3) Free and Voluntary Act — any vice affecting testandi), as well as giving effect to such intent, is
testamentary freedom can cause the primordial.
disallowance of the will (Art. 839) Exception: When the intention of the testator is
contrary to law, morals or public policy.
4) Formal and Solemn Act — the formalities are
essential for validity (Art. 804-814; 820-821) In case of doubt, the interpretation by which the
and will depend if what is executed is an disposition is to be operative or will sustain and
attested or holographic will. uphold the will in all its parts shall be adopted,
provided that it can be done consistently with the
5) Act Mortis Causa — takes effect only after the established rules of law.
death of the testator (Art. 783)
Kinds of Ambiguities In Wills (Art. 789)
6) Revocable or Ambulatory —Revocable at
1) Latent or Intrinsic Ambiguities
any time during the testator’s lifetime (Art. 828)
• those which do not appear on the face of
the will
7) Individual Act — two or more persons cannot
make a single joint will, either for their • may be resolved through evidence aliunde
reciprocal benefit or for another person. (Art. or those outside of the will, except oral
818) declarations of the testator.

However, separate or individually executed 2) Patent or Extrinsic Ambiguities

wills, although containing reciprocal provisions • those which appear on the face of the will
(mutual wills) are not prohibited, subject to the itself
rules on disposicion captatoria. (Art. 875) • must be resolved only by provisions
contained in the will itself.
8) Executed with animus testandi – testator
knowledgeable he wants to dispose of his In resolving ambiguities in wills, any admissible and
property to take effect after his death. (Art. relevant evidence may be used to determine the
783) intention of the testator, except for patent or extrinsic
ambiguities, for which the words of the will are to be
9) Executed with testamentary capacity – see resorted to.
below (Art. 796-803)
Oral declarations of the testator as to his intention
10) Dispositive of property (Art. 783) cannot be used in resolving either latent or patent
ambiguities (Balane, supra, p. 46). Why? A dead
man cannot refute a tale.

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Interpretation By General Meaning Note: A will disposes only the free portion of the
The words of a will are to be taken in their ordinary estate. (Art. 886; Balane, supra, p. 38)
and grammatical sense, unless a clear intention to
use them in another sense can be gathered, and Characteristics of a Will
that other can be ascertained. (Art. 790, par. 1) 1) Unilateral – does not need the approval of any
other person (implied in Art. 783)
Technical words in a will are to be taken in their 2) Strictly Personal Act
technical sense, unless the context clearly indicates
a contrary intention, or unless it satisfactorily Testamentary Capacity and Intent
appears that the will was drawn solely by the It is the ability as well as the legal capacity to make
testator, and that he was unacquainted with such a will. It must be present at the time of the execution
technical sense. (Art. 790) of the will. (Balane, supra, p. 52)
Principle of Severability Who are capacitated to make a will (NES)
The invalidity of one of several dispositions 1) Natural person not expressly prohibited by law
contained in a will does not result in the invalidity of to make a will. (Art. 796)
the other dispositions, unless it is to be presumed 2) Eighteen (18) years old and above (Art. 797).
that the testator would not have made such other
3) Of Sound mind, at the time of its execution (Art.
dispositions if the first invalid disposition had not
798)
been made. (Art. 792)
All of these must be present at the time of the
Property Acquired After the Execution of the
execution of the will. (in relation with Art. 801)
Will
Property acquired during the period between the
Soundness of Mind
execution of the will and the death of the testator is
To be of sound mind, it is not necessary that the
NOT included among the property disposed of. (Art.
testator be in full possession of all his reasoning
793)
faculties, or that his mind be wholly unbroken,
Exception: When a contrary intention expressly
unimpaired, or unshattered by disease, injury or
appears on the will. (Art. 793)
other cause. (Art. 799)
Interpretation Of Legacy and Devise
A testator is considered of sound mind if at the time
General Rule: In a legacy or devise, the testator
of making of the will he knows the following:
gives exactly the interest he has in the thing. (Art.
1) Nature of the estate to be disposed of - The
794)
testator should have a fairly accurate
knowledge of what he owns. (Balane, supra, p.
Exceptions:
53)
1) It is clear in the will that he intended to convey
a less interest. (Art. 794)
2) The testator expressly declares that he 2) Proper objects of his bounty - The testator
should know under ordinary circumstances,
conveys a part greater than his interest in the
who his relatives in the most proximate
thing. (Art. 929)
degrees, are. (Balane, supra, p. 53)
Note: In case the testator conveys a part greater
than his interest in the thing, and if the person 3) Character of the testamentary act (Art. 799) -
owning such interest in excess of that of the testator The testator should know the legal nature of a
does not wish to part with it, the solution in Art. 931 will. He or she must know that he is executing
can be applied; the legatee or devisee shall be a document that disposes of his properties
entitled only to the just value of the interest that gratuitously, which would take effect upon his
should have been acquired. (Balane, supra, p. 49) death. (Balane, supra, p. 53-54)

Legal Presumption in Favor Of Soundness Of

2. TESTAMENTARY SUCCESSION Mind (Art. 800)
General Rule: The law presumes that every person
Concept of a Will is of sound mind, in the absence of proof to the
It is an act whereby a person is permitte with the contrary. Forgetfulness, even if proven, is not proof
formalities prescribed by law to control to a certain of unsoundness of mind. (Baltazar v. Laxa, G.R. No.
degree the disposition of his estate to take effect 17449)
after his death. (Art. 783)

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Exceptions: 2) Executed in a language or dialect known to the

(a) When the testator, one month or less before testator (Art. 804)
the execution of the will, was publicly known to • It must be understood by testator, but it is
be insane (Art. 800); not required that the will specifically state
(b) When the testator executed the will after being
that it is in a language or dialect known to
placed under guardianship or ordered
the testator. (Abada v. Abaja, G.R. No.
committed to a mental institution (under Rules
93 and 101, respectively of the Rules of Court), 147145) This is merely evidentiary and
and before said order has been lifted. (Baltazar should be proven during probate.
v. Laxa, G.R. No. 174489) • The presumption that testator knows and
understands language or dialect applies
Note: Supervening capacity or incapacity does not only if:
invalidate an effective will, nor is the will of an
incapable validated by supervening capacity (Art. i. The will was executed in a language
801). generally spoken in the place of
execution; and
Mentally aberrant medically does not equate to ii. The testator is a native or resident of
testamentary incapacity. [Galvez v. Galvez, 26 Phil such locality. (Abangan v. Abangan,
243 (1913)] G.R. No. L-13431)

Burden of Proof of Soundness of Mind NOTARIAL/ATTESTED WILLS

1) The person who opposes probate of the will
has the burden of proof that the testator was Requirements for Notarial Wills (Art. 805-806)
not of sound mind (Art. 800). 1) Subscribed by the testator or his agent in his
2) The person who maintains the validity of the presence and by his express direction at the
will must prove that the testator executed it end thereof, in the presence of the witnesses;
during a lucid interval, when the testator was 2) Attested and subscribed by at least three
publicly known to be insane, one month or less credible witnesses in the presence of the
before making his will. (Art. 800) testator and of one another;
3) The testator, or his agent, must sign every
3. NOTARIAL AND HOLOGRAPHIC page, except the last, on the left margin in the
WILLS; JOINT WILL presence of the witnesses;
4) The witnesses must sign every page, except the
Kinds of Wills last, on the left margin in the presence of the
(a) Notarial / Attested – an ordinary will testator and of one another;
acknowledged before a notary public by the
5) All pages must be numbered correlatively in
testator and the instrumental witnesses (Art.
letters on the upper part of each page;
805-806)
(b) Holographic – a will totally handwritten, dated, 6) Attestation clause stating:
and signed by the testator alone. (Art. 810) a) The number of pages of the will;
b) The fact that the testator or his agent under
Formalities Common To Notarial and his express direction signed the will and
Holographic Wills: every page thereof, in the presence of the
1) Every will must be in writing (Art. 804); and witnesses;
• Nuncupative (Oral) Wills are not allowed c) The fact that the witnesses witnessed and
except in the Muslim Personal Laws of the signed the will and every page thereof in
Philippines the presence of the testator and one
• Any form of writing is allowed, provided another;
i. Must be understood by others, and 7) Acknowledgement before a notary public
ii. Must be capable of being preserved and
with permanence. Reason: generally, Subscribed by the Testator or his Agent in his
wills are probated after the death of the Presence and by his Express Direction at the
testator, so it must have the character of End thereof, in the Presence of the Witnesses
permanence and must be understood The testator’s thumbprint is always a valid and
by others. sufficient signature for the purpose of complying
with the requirement of the law. There is no basis for
limiting the validity of thumbprints only to cases of
illness or infirmity. (De Gala v. Gonzales G.R. No. L-

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30289; Dolar v. Diancin, G.R. No. L-33365; Lopez v. signatures at all. (Abangan v. Abangan, G.R. No. L-
Liboro, G.R. No. L-1787) 13431)

However, a sign of the cross does not comply with Order of Signing
the statutory requirement of signature, unless it is The order of signing is immaterial, provided
the testator’s usual manner of signature or one of everything is done in a single transaction. However,
his usual styles of signing. The cross does not have if the affixation of the signatures is done in several
the trustworthiness of a thumbmark. (Garcia v. transactions, then it is required that the testator affix
Lacuesta, G.R. No. L-4067) his signature ahead of the witnesses. (Balane,
supra, p. 86-87)
Agent of the Testator Subscribing under his
Express Direction Pagination
The essential thing for validity is that the agent wrote The pagination by means of a conventional system,
the testator’s name. It would be a good thing, but not a generally accepted or known sequential order, is
required, for the agent to indicate the fact of agency required, while the pagination in letters on the upper
or authority. (Barut v. Cabacungan, G.R. No. L- part of each page is merely directory. (Balane,
6285) supra)

Signed at the End Attestation Clause Need Not be Signed by the

Signing before the end invalidates not only the Testator
dispositions that come after, but the entire will, The attestation clause is the affair of the witnesses,
because the one of the statutory requirements therefore, it need not be signed by the testator.
would not have been complied with. (Azuela v. Court (Fernandez v. Vergel de Dios, G.R. No. L-21151)
of Appeals, G.R. No. 122880)
Witnesses Must Sign at the End of Attestation
Two Kinds of End Clause
1. Physical end – where the writing stops The attestation clause is a memorandum of the facts
2. Logical end – where the last testamentary attending the execution of the will required by law to
disposition ends. be made by the attesting witnesses, and it must
Signing at either end is permissible. (Balane, necessarily bear their signatures. An unsigned
attestation clause cannot be considered an act of
supra)
the witnesses, since the omission of their signatures
at the bottom negatives their participation. If an
Signed in the Presence of Witnesses attestation clause not signed at the bottom be
Actual seeing is not required, but the ability to see admitted, it would be easy to add such clause to a
each other by merely casting their eyes in the proper will on a subsequent occasion and in the absence of
direction. (Nera v. Rimando, G.R. No. L-5971) the testator and any or all witnesses. (Cagro v.
Cagro, G.R. No. L-5826; Azuela v. Court of Appeals,
Acts of Witnesses G.R. No. 122880)
• Attesting – act of witnessing
• Subscribing – act of signing their names in the Attestation Clause Separate from
proper places of the will (Balane, supra, p. 81 Acknowledgement Clause
citing Taboada v. Rosal, G.R. No. L-36033; An attestation clause is mandatory for attested wills.
Caneda v. CA, G.R. No. 103554) It is separate and distinct from an acknowledgement
clause. These two cannot be merged. (Echavez v.
The witnesses need not sign at the end of the will. It Dozen Construction, G.R. No. 192916)
is sufficient that they signed the will even marginally.
(Taboada v. Rosal, G.R. No. L-36033) Acknowledgment
The act of one who has executed a deed in going
Signing on Every Page, Except the Last before some competent officer (i.e., notary public) or
Signing on every page of the will is mandatory, while court and declaring it to be his act or deed. It
the place of signing, i.e. left margin, is merely involves an extra step undertaken whereby the
directory. The signature can be affixed anywhere on signatory actually declares to the notary public that
the page. (Balane, supra) the same is his or her own free act and deed. (Lee
v. Tambago, A.C. No. 5281)
When No Marginal Signatures are Required
If the entire document consists of only two sheets, Two-Fold Purpose of the Acknowledgement
the first containing the will and the second, the 1. To safeguard the testator’s wishes long after his
attestation clause, there need not be any marginal demise; and

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2. To assure that his estate is administered in the stated that substantial compliance is sufficient as
manner that he intends it to be done (Lee v. when the lawyer who drafted the will read the will
Tambago, A.C. No. 5281) aloud before the testator (who was suffering from
glaucoma), the three instrumental witnesses and the
notary public. The court stated: “So when an
Certification Need Not be Signed in the Presence interpretation already given assures such ends, any
of the Testator and Witnesses
other interpretation whatsoever, that adds nothing
Whether or not the notary signed the certification of
but demands more requisites entirely unnecessary,
acknowledgment in the presence of the testator and useless and frustrative of the testator's will, must be
the witnesses, does not affect the validity of the will. disregarded.“
All that must be done is that the testator and the
witnesses avow to the certifying officer the Rule on Substantial Compliance (Art. 809)
authenticity of their signatures and the voluntariness
of their actions in executing the testamentary
Article 809 is Applicable Only to the Attestation
disposition. (Javellana v. Ledesma, G.R. No. L- Clause
7179) 1) In the absence of
a) Bad faith
Requirements for the Notary Public
1. Must be duly commissioned for the locality b) Forgery
where the acknowledgment is made (Guerrero c) Fraud
v. Bihis, G.R. No. 174144) d) Undue and improper pressure and
2. Must not be one of the three attesting witnesses influence
(Cruz v. Villasor, G.R. No. L-32213) 2) Defects and imperfections in the form of
attestation or in the language used therein
3) Shall not render the will invalid
Note: There is no requirement that an attested will
4) If it is proved that the will was in fact executed
should be dated. Consequently, a variance between
the indicated dates of execution and and attested in substantial compliance with all
acknowledgement does not in itself invalidate the the requirements of Art. 805.
will. (Ortega v. Valmonte, G.R. No. 157451)
However, only omissions in the attestation clause
Special Requirements for Handicapped which can be supplied by an examination of the will
Testators itself or by intrinsic evidence will not be fatal to the
validity of the will. The omissions in the attestation
Deaf/Deaf-Mute Testator (Art. 807) clause which can only be proved by extrinsic
1) If able to read — he must read the will evidence would result in the invalidation of the
personally attestation clause and ultimately of the will itself.
2) If unable to read — he must designate two (Caneda v. CA, G.R. No. L-18076\)
persons to read the will and communicate to
him, in some practicable manner, its contents. However, the attestation clause indisputably omitted
to mention the number of pages comprising the will.
Blind Testator (Art. 808) Nevertheless, the acknowledgment portion of the
The will shall be read to him twice, once by one of will supplied the omission by stating that the will has
the subscribing witnesses and another by the notary five pages and was therefore deemed substantial
public before whom the will is acknowledged. compliance by the Supreme Court under Article 809.
(Tanchanco v. Santos, G.R. No. 204793, J.
The rationale behind the requirement of reading the Hernando ponencia)
will to the testator if he is blind or incapable of
reading the will himself (as when he is illiterate), is HOLOGRAPHIC WILLS
to make the provisions of the will known to him, so
that he may be able to object if they are not in Requirements for Holographic Wills (EHAND-
accordance with his wishes. (Garcia v. Vasquez, DSL)
G.R. No. L-26615) 1. Entirely HANDwritten by the testator
2. Dated by him
The special requirements for handicapped testators 3. Signed by him (Art. 810; Balane, supra, p. 130)
are mandatory; non-compliance with Articles 807 or 4. Executed in a Language or dialect known to the
808 will result in nullity and denial of probate. testator (Art. 804)
(Balane, supra) However, in the case of Alvarado v.
Gaviola, Jr., 226 SCRA 348 , the Supreme Court

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Date ALTERATIONS MADE BY A THIRD PERSON

The date of the will should include the day, month, Without the The insertion, cancellation,
and year of its execution. (Roxas v. De Jesus, G.R. consent of the erasure or alteration is not
No. L-38338) testator considered as written.
With the The will is void for not being
The law does not specify a particular location where consent of the totally in the handwriting of
the date should be placed in the will. The only testator the testator (Art. 810)
requirements are that the date be in the will itself and
executed in the hand of the testator. (Labrador v. Prohibition on Joint Wills
Court of Appeals, G.R. Nos. 83843-44) Two or more persons cannot make a will jointly, or
in the same instrument, either for their reciprocal
Signed by the Testator benefit or for the benefit of a third person. (Art. 818)
The testator must sign at the end of testamentary
dispositions. Otherwise, the dispositions written Joint Will – One document which constitutes the
below his signature, which are not subsequently wills of two or more individuals. These kinds of wills
dated and signed by him will be invalidated. (Art. are void. (Balane, supra)
812)
If there are several documents, each serving as one
Forms of Holographic Wills independent will, even if they are written on the
A holographic will is subject to no other form, and same sheet, they are not joint wills. (Balane, supra)
may be made in or out of the Philippines, and need
not be witnessed. (Art. 810) Note: Joint wills executed by Filipinos in a foreign
country shall not be valid in the Philippines, even
Additional Dispositions in a Holographic Will though authorized by the laws of the country where
Additional dispositions in a holographic will must be they may have been executed. (Art. 819) However,
dated and signed by the testator. (Art. 812) The reciprocal wills of foreign nationals jointly probated
signature and the date may be done in the following in another jurisdiction, can be admitted for reprobate
manner: in the Philippines since the prohibition is in the
1. Signature and date after each additional making of joint wills, and not on the joint probate of
disposition, or wills. (Vda. De Perez v. Tolete, G.R. No. 76714)
2. Each additional disposition signed and undated,
but the last disposition signed and dated. (Art. Reasons of Public Policy Against Joint Wills
813) 1) Limitation on the modes of revocation. (i.e. one
of the testators would not be able to destroy the
What if additional dispositions are dated but not document without also revoking it as the will of
signed? Only the last disposition that is dated and the other testator, or in any event, as to the
signed will be valid. latter, the problem of unauthorized destruction
would come in) (Balane, supra, p. 171)
Insertion, Cancellation, Erasure or Alteration in 2) Diminution of testamentary secrecy; (Balane,
a Holographic Will (Art. 813) supra)
General Rule: If made by the testator 3) Danger of undue influence (Dacanay v.
contemporaneously with the making of the will, the Florendo, G.R. No. L-2071)
full customary signature of the testator should 4) Danger of one testator killing the other
authenticate all alterations, cancellations and (Dacanay v. Florendo, G.R. No. L-2071)
erasures. If not, the general rule is that the will is
valid but the alterations, cancellations and erasures CODICILS AND INCORPORATION BY
will not be valid. (Velasco v. Lopez, G.R. No. 905). REFERENCE

Exceptions: Codicil – A supplement or addition to a will, made

1. Where there is only one testamentary after the execution of a will and annexed, to be taken
disposition and the unauthenticated alteration as a part of the will. It explains, adds, or alters, any
affects the sole disposition (e.g., one heir disposition made in the original will. (Art. 825)
substituted by another), then the whole will is
void (Kalaw v. Relova, 132 SCRA 237) Codicils Must be Executed as in Wills
2. Where the alteration or erasure is on the In order that a codicil may be effective, it shall be
signature and the date, the whole essence is executed as in the case of a will. (Art. 826)
affected making the whole will void. (Spouses
Alejo v. CA, G.R. No. 106720) However, the codicil does not need to conform to the
form of the will to which it refers. An attested will may

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have a holographic codicil, or vice versa. (Balane, character witness. In order to be competent as
supra) instrumental witnesses there must only be a
showing of having the qualification under Articles
Requirements for Incorporation by Reference 820 to 821. It is not mandatory that evidence be
If a will refers to a document or paper, such first established on record that the witnesses
document or paper will be considered a part of the have good standing in the community or that they
will if the following requisites concur (EPPS): are honest, upright or reputed to be trustworthy
1. The document or paper referred to in the will and reliable. (Gonzales v. Court of Appeals, 90
must be in Existence at the time of the
SCRA 183)
execution of the will;
2. The will must clearly describe and identify the
Creditors as Witnesses
same, stating among other things the number of
Creditors can be witnesses to his or her debtor’s will.
Pages thereof;
A mere charge on the estate of the testator for the
3. It must be identified by clear and satisfactory
payment of debts due at the time of death does not
Proof as the document or paper referred to
prevent the creditor
therein; and
4. It must be Signed by the testator and the
witnesses on each and every page except in 5. CODICILS AND INCORPORATION
case of voluminous books of account or BY REFERENCE
inventories. (Art. 827)
Codicil – A supplement or addition to a will, made
The documents, inventories, books of accounts, after the execution of a will and annexed, to be taken
documents of titles, and other papers of similar as a part of the will. It explains, adds, or alters, any
nature should under no circumstances make disposition made in the original will. (Art. 825)
testamentary dispositions, for then the formal
requirements for wills would be circumvented. Codicils Must be Executed as in Wills
(Balane, supra) In order that a codicil may be effective, it shall be
executed as in the case of a will. (Art. 826)
Note: Holographic wills cannot incorporate
documents by reference unless the incorporated However, the codicil does not need to conform to the
paper is also entirely in the handwriting of the form of the will to which it refers. An attested will may
testator. In case of notarial wills, it is sufficient that have a holographic codicil, or vice versa. (Balane,
the signatures of the testator and witnesses on supra)
every page of the incorporated document except in
case of voluminous books of account or inventories. Requirements for Incorporation by Reference
(Balane, supra, p. 183) If a will refers to a document or paper, such
document or paper will be considered a part of the
4. WITNESSES TO A NOTARIAL WILL; will if the following requisites concur (EPPS):
5. The document or paper referred to in the will
QUALIFICATIONS AND
must be in Existence at the time of the
DISQUALIFICATIONS execution of the will;
6. The will must clearly describe and identify the
Qualifications: same, stating among other things the number of
1) Of sound mind (Art. 820) Pages thereof;
2) At least 18 years of age (Art. 820) 7. It must be identified by clear and satisfactory
3) Not blind, deaf, or dumb (Art. 820) Proof as the document or paper referred to
4) Able to read and write (Art. 820) therein; and
5) Domiciled in the Philippines (Art. 821)
8. It must be Signed by the testator and the
6) Must not have been convicted of falsification of witnesses on each and every page except in
a document, perjury, or false testimony (Art. case of voluminous books of account or
821) inventories. (Art. 827)
The above qualifications must be possessed at the The documents, inventories, books of accounts,
time of attesting the will. Their subsequent documents of titles, and other papers of similar
incompetence shall not prevent the allowance of the nature should under no circumstances make
will. (Art. 822) testamentary dispositions, for then the formal
requirements for wills would be circumvented.
Witnesses to the will need not be “credible” under (Balane, supra)
the naturalization law as they are not tasked to be

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Note: Holographic wills cannot incorporate Instances of Revocation by Operation of Law

documents by reference unless the incorporated a) Decree of legal separation, nullity or annulment
paper is also entirely in the handwriting of the of marriage for dispositions in favor of the guilty
testator. In case of notarial wills, it is sufficient that spouse (Family Code, Art. 63, par. 4)
the signatures of the testator and witnesses on b) Preterition (Art. 854)
every page of the incorporated document except in c) Legacy or credit against third person or
case of voluminous books of account or inventories. remission of debt was provided in will and
(Balane, supra, p. 183) subsequently, testator brings action against
debtor (Art. 936)
6. CONFLICT RULES d) Substantial transformation of specific thing
bequeathed, or sale or disposition of property
National law of the person whose succession is bequeathed or devised before the death of the
under consideration is the governing law for testator (Art. 957)
intestate and testamentary successions with e) When heir, devisee or legatee commits any of
respect to: the acts of unworthiness (Art. 1032)
1) Order of succession; f) Annulled or void ab initio marriages revoke
2) Amount of successional rights; testamentary dispositions made by one spouse
3) Intrinsic validity of testamentary provisions (Art. in favor of the other (Family Code, Art. 50)
16) g) If both spouses of the subsequent marriage
acted in bad faith, said marriage shall be void
Rules for Revocation (Art. 829) ab initio and testamentary dispositions made by
1) If revocation made in the Philippines – one in favor of the other are revoked by
Philippine law operation of law. (Family Code, Art. 44)
2) If revocation is made outside the Philippines
and testator is not domiciled in the Philippines: Revocation by Some Will, Codicil, or Other
a) Law of the place where the will was made, Writing Executed as Provided in case of Wills
or Express – When there is a revocatory clause
b) Law of the place where the testator was expressly revoking the previous will or a part
domiciled at the time of revocation thereof. (Balane, supra, p. 193)
3) If revocation is made outside the Philippines
and testator is domiciled in the Philippines Implied – When the provisions thereof are partially
a) Philippine law or entirely inconsistent with those of the previous
b) Law of the place of revocation wills. (Art. 831)
c) Law of the place where the will was made
(Balane, supra, p. 184) Note: Subsequent wills which impliedly revoke the
previous ones, annul only such dispositions in the
7. REVOCATION OF WILLS prior wills as are inconsistent with or contrary to
those contained in the later wills. (Art. 831)
REVOCATION OF A WILL
Requisites for a Revocation by Subsequent
A will may be revoked by the testator at any time
Instrument
before his death. Any waiver or restriction of this
1. The subsequent instrument must comply with
right is void. (Art. 828)
the formal requirements of a will. (Vda. de Molo
v. Molo, G.R. No. L-2538)
MODES OF REVOKING A WILL (Art. 830)
2. The testator must possess testamentary
No will shall be revoked except in the following
capacity. (Balane, supra, p. 185)
cases: (LSPD)
3. The subsequent instrument must either contain
1) By operation of Law – May be total or partial
an express revocatory clause or be
2) By Subsequent will – some will, codicil, or other
incompatible with the prior will. (Art. 831)
writing executed as provided in case of wills
The subsequent will must be probated in order
3) By Physical Destruction – by burning, tearing,
to take effect. (Vda. de Molo v. Molo, G.R. No.
cancelling, or obliterating the will with intention
L-2538)
of revoking it, by the testator himself, or by
some other person in his presence, and by his
Requisites for a Valid Revocation by Physical
express direction.
Destruction (Art. 830 (3); Balane, supra, p. 186-
187)
1. Testamentary capacity at the time of performing
the act of destruction;
2. Intent to revoke (animus revocandi);

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3. Actual physical act of destruction, even partial REVOCATION BASED ON FALSE CAUSE
as long as it is not due to desistance (corpus); Revocation based on a false or illegal cause is null
4. Completion of the subjective phase; and and void. (Art. 833)
5. Performed by the testator himself or by some
other person in his presence and express Requisites for revocation for a false cause:
direction (Art. 830(3)) 1) The cause must be concrete, factual and not
purely subjective.
Note: No amount of destruction without animus 2) It must be false.
revocandi, without destruction (even partial, as long 3) The testator must not know of its falsity.
as not due to desistance) will revoke a will. (Art. 830 4) It must appear from the will that the testator is
(3); Balane, supra, p. 187) revoking because of the cause, which is false.
(Balane, supra, p. 204)
If the will was burned, torn, cancelled, or obliterated
by some other person, without the express direction Note: Even if the revocation is for a false cause but
of the testator, the will may still be established, and the will is holographic and the revocation is by
the estate distributed in accordance therewith, if its physical destruction, the revoked will can no longer
contents, and due execution, and the fact of its be probated.
unauthorized destruction, cancellation, or
obliteration are established according to the Rules EFFECT ON THE RECOGNITION OF A NON-
of Court. (Art. 830) MARITAL CHILD
The recognition of an illegitimate child does not lose
Doctrine of Presumed Revocation its legal effect, even though the will wherein it was
Where the will cannot be found following the death made should be revoked. (Art. 834)
of the testator and it is shown that it was in the
testator's possession when last seen, the 8. REPUBLICATION AND REVIVAL OF
presumption is that he must have destroyed it with WILLS
animus revocandi. (Gago v. Mamuyac, G.R. No. L-
26317) Republication
If the testator wishes to republish a will that is void
Revocation by Subsequent Will Effective even as to form, the only way to republish it is to execute
if New Will Becomes Inoperative a subsequent will and reproduce it. (Art. 835)
A revocation made in a subsequent will shall take
effect, even if the new will should become Revival (Art. 836)
inoperative by reason of the incapacity of the heirs, The testator needs only to execute a subsequent will
devisees or legatees designated therein, or by their or codicil referring to the previous will if the testator
renunciation. (Art. 832) wishes to republish a will that is either:
(a) Void for reason other than a formal defect
General Rule: Revocation is always effective. (b) Previously revoked
Exception: THEORY OF DEPENDENT RELATIVE REPUBLICATION REVIVAL
REVOCATION – when the testator provides in the Takes place by an act Takes place by
subsequent will that the revocation of the prior one of the testator operation of law
is dependent on the capacity or acceptance of the
Corrects extrinsic and Restores a revoked will
heirs, devisees, or legatees instituted in the
extrinsic defects in certain instances
subsequent will. (Vda. de Molo v. Molo, G.R. No. L-
2538)
If after making a will, the testator makes a second
will expressly revoking the first, the revocation of the
In the doctrine of dependent relative revocation, the
second will does not revive the first will, which can
first will may be admitted to probate and given effect,
be revived only by another will or codicil. (Art. 837)
despite it being torn provided that the testator tore it
with the mistaken belief that the second will was
Illustration:
perfectly valid. This is because he would have not
In 1985, X executed Will I. In 1987, X executed Will
destroyed the first will had he known that second will
II expressly revoking Will I. In 1990, X executed Will
is not valid. The revocation is therefore dependent
III, revoking Will II. The revocation of Will II by Will
on the validity of the second will. (Vda. de Molo v.
III does not revive Will I, unless of course, Will III
Molo, G.R. No. L-2538)
expressly revives Will I. (Balane, supra, p. 205)

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9. ALLOWANCE AND Intrinsic validity cannot be ruled upon (i.e.

DISALLOWANCE OF WILLS impairment of legitime, unlawful provisions,
disqualifications of heirs, legatees, devices, etc.) or
Probate – Judicial process of proving: other extraneous matters. An extrinsically valid will
1) Compliance with formal requirements of will; admitted to probate can still be declared void
and intrinsically. (Balane, supra, p. 221)
2) Testamentary capacity of the testator.
Irrespective of whether its provisions are valid and Exceptions: Other extraneous matters, which can
enforceable or otherwise. (Fernandez v. Dimagiba, be raised and decided in probate proceedings.
G.R. No. L-23638) (Nepomuceno v. CA, G.R. No. L-62952; Balanay v.
Martinez, G.R. No. L-39247.)
No will shall pass either real or personal property
unless it is proved and allowed in accordance with Exceptions to the general rule:
the Rules of Court. (Art. 838 (1)) 1) Provisional ruling on ownership of
properties
Mandatory Character of Probate The ruling is only for purposes of inclusion in the
Probate is mandatory in the sense that if there is a inventory of assets of the estate. It not conclusive
will, properties of the estate should pass only in and is subject to final decision in a separate action
accordance with the will, provided it is admitted for to resolve title. In case of community properties of
probate. It is mandatory also in the sense that it spouses, there must first be liquidation of ACP or
takes precedence over intestate proceedings. Court CPG because the assets of the estate should be net
ordered consolidation of the intestate proceedings of the share of surviving spouse. (Pastor v. Pastor
with the testate proceedings, with the testate G.R. No. L-56340).
proceedings taking precedence. Heirs cannot enter
into compromise agreement different from the terms However, the rule of provisional character of
of the will. If admitted to probate and found valid, the determination of ownership not being within the
will should be the basis of disposition as the express proper jurisdiction of the probate court applies only
will of the testator. (Roberts v. Leonidas, G.R. No. L- if the dispute is between the estate and third
55509) persons claiming ownership, in which case a
separate proceeding should be instituted to settle
Two Kinds of Probate the issue of ownership. A probate court has
(a) Post-mortem – After the testator’s death jurisdiction if the dispute is only among heirs, and
(b) Ante-mortem – During his lifetime (Balane, the issue is to determine whether the property is part
supra, p. 217) of the ACP/CPG or is a separate property of one of
the spouses. (Romero v. CA, G.R. No. 188921)
The testator himself may, during his lifetime, petition
the court having jurisdiction for the allowance of his The approval of the inventory and the concomitant
will. (Art. 838) determination of the ownership as basis for inclusion
or exclusion from the inventory were provisional and
Finality of a Probate Decree subject to revision at any time during the course of
Subject to the right of appeal, the allowance of the the administration proceedings. (Aranas v.
will, either during the lifetime of the testator or after Mercado, G.R. No. 156407)
his death, shall be conclusive as to its due
execution. (Art. 838) Once a decree of probate 2) Apparent intrinsic defect
becomes final in accordance with the rules of If the intrinsic defect is apparent on the face of the
procedure, it is res judicata. will, since probate of the will is unnecessary (as in
preterition, which annuls the will) (Nuguid v. Nuguid,
Joint wills are considered to have a defect in form G.R. No. 23445)
(non-compliance with formalities). However, if
allowed and probated and becomes final, it can pass 3) For practical considerations when
properties. (De la Cerna v. De la Cerna G.R. No. L- testamentary provisions are of doubtful validity such
28838) as when it is apparent that the disposition is in favor
of a person the testator is guilty of concubinage with
Scope of Probate Proceedings (Nepomuceno v. CA, G.R. No. L-62952); and
General Rule: Probate proceedings cover the due
execution of the will, extrinsic of formal validity and 4) All heirs are in agreement that intrinsic validity
testamentary capacity of the testator only, and no should be determined first. (Reyes v. CA, G.R. No.
other extraneous matters. 139587)

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Note: Once the will is admitted to probate, the court the testator explicitly declares
may continue to proceed in determining the intrinsic that the will and the signature are
validity of the will. in the handwriting of the testator
(Art. 811)
Decree of Probate Conclusive as to the Due Contested At least three witnesses who
Execution or Formal Validity of the Will know the handwriting and
This means that: signature of the testator explicitly
1) The fact that the will is indeed the testator’s last declare that the will and the
will and testament; signature are in the handwriting
2) Compliance with the required formalities of the testator (Art. 811)
(Balane, supra, p. 221);
3) Testamentary capacity of the testator; Probate of Lost or Destroyed Will
(Gallanosa v. Arcangel, G.R. No. L-29300)
4) Due execution of the will – meaning, that Requirements for the Probate of a Lost or
testator was of sound disposing mind, that he Destroyed Will (Rules of Court, Rule 76, Sec. 5)
freely executed the will, that there is no duress, 1. Establish the execution and validity of the will
fraud, undue influence, menace, that the will is 2. Establish that the will is in existence at the time
genuine (not forged), and that testator was not of death of the testator, or is shown to have
disqualified from making a will. (Dorotheo v. CA, been fraudulently or accidentally destroyed in
G.R. No. 108581). the lifetime of the testator without his knowledge
3. Its provisions must be clearly and distinctly
Proof of Extrinsic Validity proved by at least two credible witnesses

Attested / Notarial Will Lost or Destroyed Holographic Will

1. Present original will (ideally) General Rule: In the probate of a holographic will,
2. Present any attesting witnesses and/or notary the document itself must be produced. A lost
public to prove due execution/ testamentary holographic will cannot be probated. (Gan v. Yap,
capacity; and G.R. No. L-12190)
3. If no one is available, present any available
evidence to show authenticity or validity of The oppositor may present witnesses who know the
contents of attestation clause. (Rules of Court, testator’s handwriting, who after comparing the will
Rule 76) with other writings or letters of the deceased, have
come to the conclusion that such will has not been
Holographic Will written by the hand of the testator. And the court in
1. Present original will or at least a photo static, view of such contradictory testimony may use its
scanned or any legible copy; and own visual sense, and decide in the face of the
2. One person familiar with the handwriting of the document, whether the will submitted to it has
testator, unless contested in which case, three indeed been written by the testator. Obviously, when
witnesses familiar with the handwriting of the the will itself is not submitted, these means of
testator must be presented to prove that the will opposition and of assessing the evidence are not
was written in the handwriting of the testator. available. The only guaranty of authenticity—the
(Rules of Court, Rule 76, Sec. 5) If there are no testator’s handwriting—has disappeared. (Gan v.
competent witnesses and the court deems it Yap, G.R. No. L-12190)
necessary, expert testimony may be resorted
to. (Art. 811) Exception: A photostatic copy or Xerox copy of the
holographic will may be allowed because
ATTESTED / NOTARIAL WILLS comparison can be made with the standard writings
Uncontested One subscribing witness only, of the testator. (Rodelas v. Aranza, G.R. No. L-
if such witness testify that the 58509)
will was executed as is
required by law (Rule 76, Proof of Testamentary Capacity
Section 5, Rules of Court) Testamentary capacity including soundness of mind
Contested All the subscribing witnesses, can be proven by the attestation clause and
and the notary (Rule 76, Section testimony of witnesses and/or notary public. In the
11, Rules of Court) absence of any proof, the court may rely on the
HOLOGRAPHIC WILLS presumption of soundness of mind. (Art. 800)
Uncontested At least one witness who knows
the handwriting and signature of

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Exclusive Grounds for Disallowance of Wills Rules on Institution of Aliquot Share Less Than
(LIF-P-FraM) (Art. 839) or In Excess of the Whole Estate
1. Formalities required by Law were not complied The rules will apply if the following concur:
with; 1. There is more than one instituted heir.
2. Testator was Insane or incapable of making a 2. The testator intended them to get the whole
will at the time of execution (lack of estate or the whole disposable portion.
testamentary capacity); 3. The testator has designated a definite or aliquot
3. The will was executed through Force or under portion for each heir. (Balane, supra, p. 251-
duress, or the influence of fear, or threats; 252)
4. The will was procured by undue and improper
Pressure and influence, on the part of the RULES ON INSTITUTION OF ALIQUOT
beneficiary or of some other person; SHARE LESS THAN OR IN EXCESS OF THE
5. The testator’s signature was procured through WHOLE ESTATE
Fraud; and Art. 852 Art. 853
6. If the testator acted by Mistake or did not intend Total of all the aliquot Total of all the aliquot
that the instrument he signed should be his will parts of the instituted parts of the instituted
at the time of affixing his signature. heirs do not cover the heirs exceed the whole
whole inheritance, or inheritance, or the
Note: Once a will is disallowed because of any of the whole free portion whole free portion
the following grounds, intestate succession will Remedy: Each part Remedy: Each part
ensue. shall be increased shall be reduced
proportionately proportionately
10. INSTITUTION OF SUBSTITUTION
OF HEIRS Note: In Article 852, the difference between the total
of all the portions and the whole of the inheritance
or free portion cannot pass by intestacy because the
INSTITUTION OF HEIRS
testator’s intention is to give the instituted heirs the
An act by virtue of which a testator designates in his
entire amount. (Balane, supra, p. 252)
will the person or persons who are to succeed him
in his property and transmissible rights and
Requisites for a Valid Institution of Heir
obligations. (Art. 840)
1. Designation in the will of person/s to succeed
(Art. 840)
A will shall be valid even though it does not contain
2. The will specifically assigns to such person an
an institution of an heir, or such institution does not
inchoate share in the estate.
comprise the estate, or even though the person so
3. The person so named has capacity to succeed.
instituted should not accept the inheritance or
4. The will is formally valid
should be incapacitated to succeed. In such case,
5. No vice of consent is present
the testamentary dispositions made in accordance
6. No preterition results from the effect of such will
with law shall be complied with, and the remainder
(Art. 854)
of the estate shall pass to the legal heirs. (Art. 841)
Designation in the Will of Person/s to Succeed
DISPOSITIONS BY WILL
No compulsory Dispose by will the entire
Directory – Designation of name and surname
heirs hereditary estate
(Balane, supra, p. 240)
With compulsory Dispose by will the free
heirs portion (net hereditary estate
Mandatory – Identity of the heir must be
minus legitimes)
established, otherwise void disposition, unless his
(Balane, supra, p. 239) identity becomes certain.
Intestacy Follows If Entire Free Portion Not Note: If there is ambiguity in the designation, the
Disposed of by Will designation must be resolved by discerning the
If the testator has instituted one or several heirs, and testator’s intent. If the ambiguity cannot be resolved,
the institution of each is limited to an aliquot part of intestacy to that portion results. (Art. 844, par. 2)
the inheritance, intestate succession takes place
with respect to the remainder of the disposable Unknown person – A successor whose identity
portion. (Art. 851) cannot be determined because the designation in
the will is unclear or ambiguous. (Balane, supra, p.
241)

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Note: Unknown persons do not refer to one with Requisites for the Exception to Apply:
whom the testator is not personally acquainted. The 1. The cause for the institution of heirs must be
testator may institute somebody who is a perfect stated in the will (Austria v. Reyes, G.R. No. L-
stranger to him, provided the identity is clear. 23079);
(Balane, supra, p. 241) 2. The cause must be shown to be false (Austria
v. Reyes, G.R. No. L-23079);
Dispositions in Favor of an Unknown Person 3. It must appear from the face of the will that the
(Art. 845) testator would not have made such institution if
General Rule: Every disposition in favor of an he had known the falsity of the cause. (Austria
unknown person shall be void. v. Reyes, G.R. No. L-23079)

Exception: By some event or circumstance his SUBSTITUTION OF HEIRS

identity becomes certain.
The appointment of another heir so that he may
Dispositions in Favor of a Definite Class enter into the inheritance in default of the heir
A disposition in favor of a definite class or group of originally instituted. (Art. 857)
persons shall be valid. (Art. 845)
Note: Only one substitution is allowed. The person
Presumptions in Institution of Heirs substituting cannot be substituted again.
In the absence of specific provisions in the will,
these presumptions will apply: (E-In-S) Substitute Subject to Same Charges and
(a) Equality – Heirs who are instituted without Conditions Imposed on Original Heir
designation of shares inherit in equal parts. General Rule: The substitute shall be subject to the
(Art. 846) same charges and conditions imposed upon the
instituted heir. (Art. 862)
Shares of Brothers and Sisters in
Testamentary Succession Exception: The testator expressly provided the
If the testator should institute his brothers and contrary, or the charges or conditions are personally
sisters, and he has some full blood and others applicable only to the heir instituted. (Art. 862)
of half-blood, the inheritance shall be
distributed equally unless a different intention Classes of Substitution
appears. (Art. 848) (a) Vulgar or Simple – The testator may designate
one or more persons to substitute the heir or
Note: In intestacy, the proportion of 2:1 heirs instituted in case such heir or heirs should:
between full and half-blood siblings and the i. Die before him (Predecease)
Iron Curtain Rule between legitimate and ii. Should not wish to be instituted,
illegitimate siblings shall be applied. (Renounce) or
iii. Should be incapacitated to accept the
(b) Individuality – Heirs collectively instituted are
inheritance (Incapacitated) (Art. 859)
deemed individually named unless a contrary
intent is prove. (Art. 847)
(c) Simultaneity – When several heirs are Simple Substitution
instituted, they are deemed instituted Simple substitution may be done by the
simultaneously and not successively. (Art. 849) testator:
i. By specifying all the three causes,
Effect of False Cause for Institution of an Heir ii. By merely providing for simple
General Rule: The falsity of the stated cause does substitution. (Art. 859)
not affect the validity or efficacy of the institution.
The false cause is merely considered as not written.
(Art. 850) A simple substitution, without a statement of
the cases to which it refers, shall comprise the
Exceptions: It appears from the will that the testator three causes mentioned, unless the testator
would not have made such designation if he had has otherwise provided. (Art. 859)
known the falsity of such cause. (Art. 850)
Restricted Simple Substitution
The testator may limit the operation of simple
substitution by specifying only one or two of the
three causes.

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(b) Brief (Brevilocua)- Two or more persons may Note: Pending the transmission of the property, the
be substituted for one person (Art. 860) fiduciary is entitled to all the rights of a usufructuary
having the right to use and enjoy the property, but
(c) Compendious (Compediosa) – one person without the right to dispose the same. Although the
may be substituted for two or more heirs (Art. fideicommissary heir does not receive the property
860) upon the testator’s death, his right thereto vests at
the time and merely becomes subject to a period,
(d) Reciprocal (Reciproca) – If heirs instituted in and that right passes to his own heirs should he die
unequal shares should be reciprocally before the fiduciary’s right expires. (Balane, supra)
substituted, the substitute shall acquire the
share of the heir who dies, renounces, or is Tenure of Fiduciary
incapacitated, unless it clearly appears that the Primary Rule: Period indicated by the testator
Secondary Rule: If the testator did not indicate a
intention of the testator was otherwise. If there
period, then the fiduciary’s lifetime. (Balane, supra,
are more than one substitute, they shall have
citing Manresa)
the same share in the substitution as in the
institution. (Art. 861) Two Ways of Making an Express Imposition of
Fideicommissary Substitution
Note: If one is substituted for two or more original 1) By the use of the term fideicommissary; or
heirs, substitution will only take place if all the 2) By imposing upon the first heir the absolute
original heirs are disqualified. If not all of the original obligation to preserve and to transmit to the
heirs are disqualified, the share left vacant will second heir. (Art. 865)
accrue to the surviving co-heir or co-heirs.
Transmission of Property from First Heir to
Second Heir
(e) Fideicommissary Substitution - If the testator
General Rule: The fiduciary should deliver the
institutes an heir with an obligation to deliver to property without deductions.
another the property so inherited. The heir
instituted to such condition is called the first heir Exceptions: Deductions which arise from legitimate
or fiduciary heir, the one to receive the property expenses, credits and improvements. (Art. 865)
is the fideicommissary or second heir. (Art. 863)
Right to Succession of the Second Heir
Requisites for a Fideicommissary Substitution The second heir shall acquire the right to the
(1st-2nd-1-PT-LEFree) succession from the time of the testator’s death,
1. A fiduciary or a FIRST heir who takes the even though he should die before the fiduciary. The
property upon the testator’s death. (Art, 863) right of the second heir shall pass to his heirs. (Art.
866)
2. A fideicommissary or SECOND heir who takes
the property subsequently from the fiduciary. The following shall not take effect: (Art. 867)
(Art. 863) 1) Fideicommissary substitutions which are not
3. The second heir must be ONE degree from the made in an express manner, either by giving
first heir. Thus, the fideicommissary can only be them this name, or imposing upon the fiduciary
a parent or a child of the fiduciary. (Palacios v. the absolute obligation to deliver the property to
Ramirez, G.R. No. 27952) a second heir;
4. The dual obligation imposed upon the fiduciary 2) Provisions which contain a perpetual prohibition
to Preserve the property and to Transmit it after to alienate, and even a temporary one, beyond
the lapse of the period to the fideicommissary the limit fixed in Article 863.
3) Those which impose upon the heir the charge of
heir. (Art. 865)
paying to various persons successively, beyond
5. Both heirs must be Living and qualified to the limit prescribed in Article 863, a certain
succeed at the time the testator’s death. income or pension;
6. The fideicommissary substitution must be 4) Those which leave to a person the whole or part
Expressly made. (Art. 865) of the hereditary property in order that he may
7. The fideicommissary substitution is imposed on apply or invest the same according to secret
instructions communicated to him by the
the Free portion of the estate and never on the
testator.
legitime. (Art. 864)

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Nullity of Fideicommissary Substitution make some provision in his will of the testator or
The nullity of the fideicommissary substitution does of any other person. This is prohibited because
not prejudice the validity of the institution of heirs it will make the making of the will a contractual
first designated; the fideicommissary clause shall act. (Art. 875)
simply be considered as not written (Art. 868) such
that the institution of the first heir simply becomes • It is not merely the condition that is declared
pure and unqualified. (Balane, supra) void but the testamentary disposition itself
which contains the condition. (Balane,
Ownership and Usufructuary Provisions supra)
A provision whereby the testator leaves to a person (e) Casual Condition – A condition is casual if it
the whole or part of the inheritance, and to another
depends upon chance and/or upon the will of a
the usufruct, shall be valid. (Art. 869)
third person
Successive Usufructuaries (f) Mixed Condition - A condition is mixed if it
If the testator gives the usufruct to various persons, depends both partly upon the will of the heir
not simultaneously, but successively, the requisites himself and upon chance and/or the will of a
of a fideicommissary substitution must be present. third person
(Art. 869) (g) Potestative Condition – One the fulfillment of
which depends purely on the heir.
Period of Inalienability of the Estate (h) Suspensive Term – One that merely suspends
General Rule: The dispositions of the testator the demandability of a right; happening is
declaring all or part of the estate inalienable for more
certain.
than 20 years are void. (Art. 870)
(i) Caucion Muciana – Bond or security that
Exception: In fideicommissary substitution, the should be given in favor of those who would get
period is the lifetime of the first heir. the property if the condition not be complied
with. (Art. 879)
11. DISPOSITIONS WITH A CONDITION
OR TERM Interpretation
• When in doubt whether there is a condition or
The institution of an heir may be made conditionally, merely a mode, consider the same as mode.
or for a certain purpose or cause. (Art. 871) • When in doubt as to whether there is a mode or
merely a suggestion, consider same only as a
Three Kinds of Testamentary Dispositions suggestion.
(a) Conditional dispositions • A condition suspends but does not obligate,
(b) Dispositions with a term while a mode obligates but does not suspend
(c) Dispositions with a mode (for he who inherits with a mode is already an
heir; one who inherits conditionally is not yet an
Definitions heir.)
(a) Condition – Future or uncertain event, or a past
event unknown to the parties, upon which the Condition on the Legitimes is Prohibited
performance of an obligation depends (Art. The testator cannot impose any charge, condition or
1179) substitution whatsoever upon the legitimes. Should
(b) Term – The day or time when an obligation he do so, the same shall be considered as not
either becomes demandable or terminates (Art. imposed. (Art. 872)
1193)
(c) Mode – The statement of the object of the Conditions which are Impossible, Contrary to
institution or the application of the property left Law or Good Customs
These conditions are considered as not imposed,
by the testator or the charge imposed on the
and shall not prejudice the heir, even if the testator
heir. (Art. 882) It is an obligation imposed upon provide otherwise. (Art. 873) The testamentary
the heir, without suspending the effectivity of the disposition is not annulled; it simply becomes pure.
institution or the rights to the succession. (Balane, supra)
(Rabadilla v. Court of Appeals, G.R. No.
113725) Conditions Prohibiting Marriage
(d) Disposicion Captatoria / Scriptura General Rule: An absolute condition not to contract
Captatoria – A condition that the heir shall a first or subsequent marriage shall be considered
as not written. (Art. 874)

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Exception: The condition has been imposed on the Not Applicable only if
widow or widower by the deceased spouse, or by Applicable third party is
the latter’s ascendant’s or descendants. (Art. 874) interested in the
condition (Art. 883)
The right of usufruct, or an allowance or some
personal prestation may be devised or bequeathed The estate shall be placed under administration
to any person for the time during which he or she until:
should remain unmarried or in widowhood. (Art. (a) Condition is fulfilled, or
874) (b) Until it becomes certain that condition will never
be fulfilled, or
RULES ON POTESTATIVE, CASUAL AND (c) Until arrival of the term
MIXED CONDITIONS
The same shall be done if the heir does not give the
Positive Potestative Condition (Art. 876) security required as in negative potestative
General Rule: It must be fulfilled as soon as the heir conditions. (Art. 880)
learns of the testator’s death.
IF THE IF IT BECOMES CERTAIN
Exception: The condition, already complied with, is CONDITION THAT CONDITION WILL
of such nature that it cannot be fulfilled again. HAPPENS NOT HAPPEN
The property will The property will be turned
Negative Potestative Condition (Art. 879) be turned over to over to a secondary heir, if
If the potestative condition imposed upon the heir is the instituted there is one, or to the
negative, or consists in not doing or not giving heir. intestate heirs, as the case
something, the heir shall comply by giving a security may be.
(caucion muciana) that he will not do or give that
which has been prohibited by the testator, and that Dispositions with a Term
in case of contravention he will return whatever he Suspensive Term (Art. 878)
may have received, together with its fruits and A disposition with a suspensive term does not
interests. prevent the instituted heir from acquiring his rights
and transmitting them to his heirs even before the
Casual or Mixed (Art. 877) arrival of the term.
It is sufficient if it happens or be fulfilled at any other
time before or after the testator’s death, unless Note: The heir’s right vests upon the testator’s
testator provides otherwise. death. Should the heir die before the arrival of the
suspensive term, he merely transmits his right to his
If already fulfilled at the time of execution of the will own heirs who can demand the property when the
a. If testator is unaware of fact of fulfillment- term arrives. (Balane, supra)
Deemed fulfilled.
b. If testator is aware of the fact of fulfillment Resolutory Term (Art. 885)
i. If it can no longer be fulfilled again –It is The designation of the day or time when the effects
deemed fulfilled of the institution of an heir shall commence or cease
ii. If it can be fulfilled again – It must be fulfilled shall be valid. (Art. 885)
again. (Art. 877)
TERM
Constructive Compliance (Art. 883, par. 2) SUSPENSIVE RESOLUTORY
If the person interested in the condition should Before the arrival of Before the arrival of
prevent its fulfillment, without the fault of the heir, the the term, the property the term, the property
condition shall be deemed to have been complied should be delivered to should be delivered to
with. the intestate heirs. the instituted heir. No
However, a sufficient security is required of
RULES ON APPLICABILITY OF security has to be them. (Art. 885)
CONSTRUCTIVE COMPLIANCE posted by the intestate
CASUAL heirs.
MIXED CONDITION
CONDITION
Not Dependent Dependent on Will Dispositions with Modes
Applicable Partly on of Third Party Dispositions with modes may be claimed at once,
Chance provided that the instituted heirs give security for
compliance with the wishes of the testator and for

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the return of anything he or they may receive, the portions corresponding to the line has been
together with its fruits and interests, if he or they assigned, there will be equal apportionment
should disregard this obligation. (Art. 882, par. 2) between or among the recipients within the line,
should there be more than one. (Art. 890)
Indicators of a Modal Institution (f) There is no right of representation in the direct
The testator states the following: ascending line. (Art. 972)
1. The object of the institution; (g) For a surviving spouse to inherit from the
2. The purpose or application of the property left deceased, the marriage between the decedent
by the testator; and the widow/widower must be either valid or
3. The charge imposed by the testator upon the voidable. (Balane, supra, p.342)
heir. (Rabadilla v. Court of Appeals, G.R. No.
113725) Rules of Surviving Spouse as Sole Compulsory
Heir (Art. 900)
Note: An obligation imposed upon the heir should
not be considered a condition unless it clearly General Rule: The surviving spouse gets 1/2 of the
appears from the will itself that such was the estate
intention of the testator. In case of doubt, the
institution should be considered as modal and not Exception: 1/3 of the estate, if the following
condition. (Rabadilla v. Court of Appeals, G.R. No. circumstances are present:
113725, 2000) 1. The marriage was in articulo mortis;
2. The testator died within 3 months from the time
Analogous Performance of the marriage;
When without fault of the heir, a modal institution 3. The parties did not cohabit for more than 5
cannot take effect in the exact manner stated by the years; and
testator, it shall be complied with in a manner most The spouse who died was the party in articulo mortis
analogous to and in conformity with his wishes. (Art. at the time of the marriage.
883, par. 1)
13. DISINHERITANCE
12. COMPULSORY HEIRS; LEGITIME
Causes of Vacancy in Succession
LEGITIME (a) Disinheritance - The testator creates it himself
The part of the testator’s property which he cannot (Art. 916)
dispose of because the law has reserved it for his (b) Repudiation - The heir rejects the inheritance
compulsory heirs. (Art. 886) (Art. 1041)
(c) Incapacity/Predecease - Something happens
Note: When the disposition is for valuable to the heir
consideration, there is no diminution of the estate by
merely a substitution of value, that is the property Disinheritance
sold is replaced by the equivalent monetary A compulsory heir may, in consequence of
consideration. (Buenaventura v. Court of Appeals, disinheritance, be deprived of his legitime, for
G.R. No. 126376; Manongsong v. Estimo, G.R. No. causes expressly stated by law. (Art. 915)
136773)
Requisites for the Various Grounds of
General Rules in Ascertaining Legitimes Disinheritance (WET2-LUP)
(a) Rule of proximity: The nearer exclude the more 1) Effected only through a valid Will (Art. 916)
remote, except when the rule on representation Note: Will containing disinheritance must be
is proper. (Art. 962) probated.
(b) Legitimate parents or ascendants are excluded Disinheritance only occurs in testamentary
only by legitimate children. (Arts. 896, 899) succession. Its counterpart in intestate
(c) Parents of illegitimate children are excluded by succession is unworthiness.
both legitimate and illegitimate children. (Art. 2) For a cause Expressly stated in the will (Art.
903) 916, 918)
(d) The illegitimate ascending line does not go 3) Cause must be certain and True (Art. 918)
beyond the parents. (Art. 903; Balane, supra, 4) Total;
p.345) 5) It must be for a cause expressly stated by Law
(e) In the direct ascending line, there is the rule of (Art. 916, in relation to Art. 919-921)
division by line. The legitime is divided equally 6) Unconditional;
between the paternal and maternal side. After 7) If the truth of the cause is denied, it must be
Proved by the proponent. (Art. 917)

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GROUNDS FOR DISINHERITANCE Note: Refusal may be justified, if the obligor

does not have enough resources for all whom
Grounds for Disinheritance of Legitimate or he is obliged to support. The ascendants are
Illegitimate Children and Descendants (Art. 919) only third in the hierarchy of preference among
1) When the child or descendant has been found claimants of support. (Family Code, Art. 200,
guilty of an attempt against the life of the par. 3)
testator, his or her spouse, descendants, or
ascendant; 6) Maltreatment of the testator by word or deed, by
a) Final conviction is required. the child or descendant;
b) It includes all stages of commission of a a) The verbal or physical assault must be of a
crime. (Attempted, frustrated, or serious nature.
consummated) b) No conviction is required. It is not even
c) This ground also applies to disinheritance required that a criminal case be filed.
of parents, ascendants, and spouse.
d) Felony must be intentional (not through By word – Slander, offensive language, insult,
negligence) libel. May be spoken or written.
2) When a child or descendant has accused the By deed – No need for violence. It could be
testator of a crime for which the law prescribes something which caused the testator to be
imprisonment for six years or more, if the humiliated.
accusation has been found groundless;
a) It includes filing of a complaint before the 7) When a child or descendant leads a
prosecutor, or presenting incriminating dishonorable or disgraceful life;
evidence against the testator, or even a) The conduct must be habitual. (Balane,
suppressing exculpatory evidence. supra)
b) It may be made by the heir in a proceeding 8) Conviction of a crime which carries with it the
as a complainant or witness in a criminal penalty of civil interdiction.
case. a) Final conviction is required.
c) The testator must be acquitted. b) The accessory penalty of civil interdiction is
d) The accusation must be found to be imposed with the principal penalties of
groundless. The judgment of acquittal must death, reclusion perpetua, and reclusion
state either no crime was committed or that temporal. (Balane, supra)
the accused did not commit the crime. An Note: The enumeration is exclusive.
acquittal on reasonable doubt will not be a
ground of disinheritance. Grounds for Disinheritance of Legitimate or
e) This ground also applies to disinheritance Illegitimate Parents or Ascendants (Art. 920)
of parents, ascendants, and spouse. 1) When the parents have abandoned their
3) When a child or descendant has been convicted children or induced their daughters to live a
of adultery or concubinage with the spouse of corrupt or immoral life, or attempted against
the testator; their virtue;
a) Final conviction is required. a) Includes all conduct constituting a repeated
b) There must be a valid marriage between or total refusal or failure to care for a child.
the spouse and the testator. b) This applies when the parents willfully left
c) This ground also applies to disinheritance the children to fend for themselves.
of parents and ascendants. (Balane, supra) c) It is not restricted to those instances of
4) When the child or descendant, by fraud, abandonment penalized by law.
violence, intimidation, or undue influence, d) Inducement- same as deprivation of
causes the testator to make a will or to change parental authority; only applies to female
one already made; descendants
5) A refusal without justifiable cause to support the e) Attempt on virtue- no conviction is required
parent or ascendant who disinherits such child 2) When the parent or ascendant has been
or descendant; convicted of an attempt against the life of the
a) The obligation to support must be proven. testator, his or her spouse, descendants, or
b) There must be a need and demand for ascendants;
support. 3) When the parent or ascendant has accused the
c) The demand must be unjustifiably refused. testator of a crime for which the law prescribes
d) This ground also applies to disinheritance imprisonment for six years or more, if the
of parents, ascendants, and spouses accusation has been found to be false;

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4) When the parent or ascendant has been testator to make a will or to change one already
convicted of adultery or concubinage with the made;
spouse of the testator; 4) When the spouse has given cause for legal
5) When the parent or ascendant by fraud, separation;
violence, intimidation, or undue influence a) A decree of legal separation is not required.
causes the testator to make a will or to change b) The grounds for legal separation need not
one already made; be proven, unless contested by the heir.
6) The loss of parental authority for causes c) If there is already a decree of legal
specified in this Code; separation, the ground is conclusive, but
• It refers to culpable loss of parental there is still a need to disinherit by will.
authority and excludes attainment of age of 5) When the spouse has given grounds for the loss
majority. (Balane, supra) The causes for of parental authority;
culplable loss of parental authority include: • Judicial decree is not required. Giving
a) judicial deprivation of parental authority grounds therefore is sufficient. (Art. 921)
on the ground of sexual abuse; 6) Unjustifiable refusal to support the children or
b) loss of parental authority as a result of the other spouse.
judicial declaration of abandonment of Note: The enumeration is exclusive.
the child
c) judicial deprivation of parental authority Effects of Disinheritance
based on: • Total exclusion of the compulsory heir from the
i) excessively harsh or cruel inheritance, which includes his legitime, his
treatment of the child share in the intestate portion, and any
ii) giving the child corrupting orders, testamentary disposition made in a prior will.
counsel or example (Balane, supra at p. 437-438)
iii) compelling the child to beg; or
iv) subjecting the child or allowing him Note: Therefore, the heir loses his legitime. As
to be subjected to acts of to the free portion, it passes through
lasciviousness Substitution, Accretion, and Intestacy.
• No conviction is required.
7) The refusal to support the children or • The children or descendants of the person
descendants without justifiable cause; disinherited shall take his or her place and shall
8) An attempt by one of the parents against the life preserve the rights of compulsory heirs with
of the other, unless there has been a respect to the legitime. (Art. 923)
reconciliation between them.
a) Final conviction is not required. Note: The disinherited heir can be represented
b) It includes all stages of commission of a in the legitime and also to any intestate portion
crime. (Attempted, frustrated, or that he or she would have inherited:
consummated) a. Only in the descending line, never in the
c) Even if parents are not married, it is still a ascending
ground. The parents do not need to be b. In collateral line, only with respect to
spouses. However, the testator must be a nephews and nieces.
common child.
d) Reconciliation between the parents • The disinherited parents shall not have the
removes the right of a child or descendant usufruct or administration of the property which
to disinherit and rescinds a disinheritance constitutes the legitime. (Art. 923)
already made.
Note: The enumeration is exclusive. Ineffective Disinheritance
Disinheritance without specification of the cause, or
Grounds for Disinheritance of a Spouse (Art. for a cause the truth of which, if contradicted, is not
921) proved, or which is not one of those set forth in this
1) When the spouse has been convicted of an Code, shall annul the institution of heirs insofar as it
attempt against the life of the testator, his or her may prejudice the person disinherited; but the
descendants, or ascendants; devises and legacies and other testamentary
2) When the spouse has accused the testator of a dispositions shall be valid to such extent as will not
crime for which the law prescribes impair the legitime. (Art. 918)
imprisonment of six years or more, and the
accusation has been found to be false;
3) When the spouse by fraud, violence,
intimidation, or undue influence cause the

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Effects of Ineffective Disinheritance Revocation of Disinheritance

1. If the testator had made disposition of the entire 1. Reconciliation (Art. 922)
estate, the testamentary disposition is annulled 2. Subsequent institution of the disinherited heir.
only insofar as they prejudice the legitime of the 3. Nullity of the will, which contains the
person disinherited. It does not affect the disinheritance.
dispositions of the testator with respect to the
free portion Reconciliation
2. If the testator did not dispose of the free portion, This refers to the resumption of genuine cordial
the compulsory heir will be given all that he is relationship between the testator and the
entitled to receive as if the disinheritance has disinherited heir, approximating that which prevailed
not been made, without prejudice to lawful before the testator learned of the cause for
dispositions made by the testator in favor of disinheritance, reciprocally manifested by their
others. actions subsequent to the act of disinheritance.
3. Devisees, legacies and other testamentary (Vitug, supra, p. 264)
dispositions shall be valid to such extent as will
not impair the legitime. (Vitug, Civil Law Volume Reconciliation may be done by:
III, 2006 edition, p. 263) 1) Concrete and express pardon extended to the
offender, who accepts it.
INEFFECTIVE PRETERITION A general pardon extended by the testator on
DISINHERITANCE his deathbed to all who have offended him will
Person disinherited The person omitted not suffice.
may be any must be a compulsory 2) Unequivocal conduct toward the offending heir,
compulsory heir heir in the direct line by which the intent to forgive must be clear.
Express Implied
Intentional Either intentional or OCCURRED BEFORE OCCURRED AFTER
unintentional DISINHERITANCE IS DISINHERITANCE
Partial annulment of Effect: Total annulment MADE IS MADE
institution of heirs of institution of heirs
Right to disinherit is Disinheritance is set
Preterition is total omission from the inheritance, extinguished aside. (Art. 922)
without the heir being expressly disinherited. The
implied basis of the rule on preterition is inadvertent Effects of Setting Aside the Disinheritance
omission by the testator. Thus, if the testator 1) The disinherited heir is restored to his legitime.
explicitly disinherits the heir, Article 854 on 2) If the disinheriting will did not dispose of the
preterition will not apply. Should the disinheritance disposable portion, the disinherited heir is
be ineffective, for absence of one or other of the entitled to his proportionate share, if any.
requisites for a valid disinheritance, the heir is 3) If the disinheriting will or any subsequent will
simply entitled to demand his rightful share. (Balane, disposed of the disposable portion in favor of
supra) testamentary heirs, legatees or devisees, such
dispositions remain valid.

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Summary of Grounds for Disinheritance (Arts. 919, 920 & 921)

GROUND CHILD/ PARENT/ SPOUSE

DESCENDANT ASCENDANT
Attempt against the life of the testator, √ √ √
spouse, ascendant, descendant
Accusation of a crime with penalty of six √ √ √
years
Adultery and Concubinage with the √ √ N/A
spouse of testator
Induce testator to make/change the will. √ √ √

Support unjustifiably refused √ √ Unjustifiable refusal to

support the children or
the other spouse
Maltreatment of the testator by word or √ N/A N/A
deed
Leading a dishonorable or disgraceful √ N/A N/A
life
Conviction of a crime which carries with √ N/A N/A
the penalty of civil interdiction
Abandonment of Children, Inducement N/A √ N/A
to live a corrupt or moral life, or
attempted against their virtue
Loss of parental authority N/A √ It is sufficient that the
spouse has given
grounds for loss of
parental authority
Attempt by one Parent against the Life of N/A √ N/A
the Other
Giving Cause for Legal Separation N/A N/A √

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14. LEGACIES AND DEVISES

EXTENT OF LIABILITY
Legacy – Testamentary disposition of personal LEGATEE / DEVISEE HEIR
property by particular title. (Balane, supra) If charged with a legacy If charged with a
or devise, he or she legacy or devise, he
Devise – Testamentary disposition of real property shall be liable only for or she shall not be
by particular title. (Balane, supra) the extent of the value liable beyond the
of the legacy or devise amount of the free
HEIR LEGATEE / DEVISEE received. portion given to him.
One who succeeds to Those who succeed to (Arts. 925-926; Tolentino, supra)
the whole or a definite, specific, and
fractional part of the individual properties Note: Since legacies and devises are to be taken
inheritance from the disposable free portion of the estate, the
(Balane, supra) provisions on institution of heirs are generally
applicable to them.
Things And Rights Which May Be Bequeathed of
Devised When Two Or More Heirs Take Possession Of
All things and rights which are within the commerce The Estate
of man may be bequeathed or devised. (Art. 924) If two or more heirs take possession of the estate,
they shall be solidarily liable for the loss or
Note: It is not required that the thing devised or destruction of a thing devised or bequeathed, even
bequeathed belong to the testator. Also, it must not though only one of them should been negligent. (Art.
impair the legitimes. 927)

Persons Who May Be Charged With Legacies Liability for Eviction

And Devises General Rule: The estate is liable for eviction.
A testator may charge with legacies and devises not
only his compulsory heirs but also the legatees and Exception: In case of a subsidiary legacy or devise,
devisees. (Art. 925) the heir, legatee or devise charged shall be liable in
case of eviction, if the thing is indeterminate and is
General Rule: Estate is charged with the legacy or indicated only by its kind. (Art. 928)
devise.
Thing Owned In Part By Testator
Exception: Subsidiary legacy or devise General Rule: Conveys only interest or part owned
(Paras, Civil Code of the Philippines Annotated, by testator (Art. 929)
2016)
Exception: If testator otherwise provides
Subsidiary legacy or devise – When the testator 1) He may convey more than what he owns and
imposes the burden on an heir or a legatee or the estate should try to acquire the part or
devisee; the heir, legatee, or devisee charged will interest owned by other parties. If other parties
be bound to deliver the legacy or devise to the are unwilling to alienate, the estate should give
person specified. As far as the heir, legatee, or the legatee/devise the monetary equivalent. (by
devisee charged is concerned, it will be a mode. analogy with Art. 931)
(Balane, supra) 2) He may convey less than what he owns. (Art.
794)
Where the will is silent as to who shall pay or
deliver the legacy/devise: Thing Owned by Another (Arts. 930-931)
1. If there is an administration proceeding, there is 1) If the testator orders acquisition of the thing –
a presumption that such legacy or devise The order should be complied with. If the owner
constitutes a charge against the decedent’s is unwilling to part with the thing, the
estate (Paras, supra, 2016) legatee/devisee should be given the monetary
2. If there are no administration proceedings, it is equivalent. (Art. 931)
a charge upon the heirs, in the same proportion
in which they may inherit. (Art. 926, par. 2) 2) If the testator erroneously believed that the
thing belonged to him –The legacy/devise is
void.

Exception: If subsequent to the making of the

disposition, the thing is acquired by the testator

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onerously or gratuitously, the disposition is Any other charge, perpetual or temporary, with
validated. (Art. 930) which the thing bequeathed is burdened, passes
with it to the legatee or devisee. (Art. 934, par. 3)
3) If the testator knew that the thing did not belong
to him but did not order its acquisition – The Legacy / Devise Subject to a Usufruct
disposition should be considered valid. There is If the thing bequeathed should be subject to a
an implied order to acquire the property. usufruct, the legatee or devisee shall respect such
(Paras, supra) right until it is legally extinguished. (Art. 946)

Thing Already Owned by the Legatee/Devisee Legacy of Credit or Remission (Art. 935-937)
(Arts. 932-933) 1) Applies only to the amount still unpaid at the
1) If thing already belonged to legatee/devisee at time of testator’s death. (Art. 935);
time of execution of will – The legacy/devise is 2) Revoked if testator subsequently sues the
void even if legatee/devisee alienates the debtor for collection. (Art. 936);
property subsequently unless the acquirer is the 3) If generic, applies only to those existing at the
testator himself. (Balane, supra citing Manresa) time of the execution of the will, unless
otherwise provided. (Art. 937 and 793)
2) If thing was owned by another person at time of
making the will and thereafter it is acquired by Legacy / Devise to a Creditor (Art. 938)
legatee/devisee: A legacy or devise made to a creditor shall not be
a. If testator erroneously believed that he applied to his credit, unless the testator so expressly
owned the thing – The legacy/devise is declares.
void.
b. If testator knew that he did not own the If the testator provides that the devise or legacy will
thing: be imputed to the debt, and if the debt exceeds the
i. If thing was acquired onerously by legacy or devise, the excess may be demanded as
legatee/devisee – The an obligation of the estate.
legatee/devisee is entitled to
reimbursement. Testamentary Instruction to Pay a Debt (Art. 939)
ii. If thing was acquired gratuitously INSTRUCTION INSTRUCTION TO PAY
by legatee/ devisee – Nothing TO PAY A NON- MORE THAN WHAT IS
more is due. EXISTING DEBT DUE
The disposition The instruction should be
3) If thing was owned by testator at time will was should be effective only as to what
made and the legatee/devisee acquired the considered as not is due, unless the
thing from the testator —The legacy/devise written. contrary intention
should be deemed revoked appears.

Legacy / Devise to Remove an Encumbrance Alternative Legacies or Devises – One which

Over a Thing Belonging to the Testator (Art. 932, provides that among several things mentioned, only
par. 2) one is to be given.
If the testator expressly orders that the thing be
freed from such interest or encumbrance, the legacy General Rule: The choice is left to the:
or devise shall be valid to that extent. 1) Direct legacy or devise – Estate, through the
executor or administrator;
Note: The legacy / devise is valid, if the 2) Subsidiary legacy or devise – Heir, legatee,
encumbrance can be removed for a consideration. devisee charged (Tolentino, supra)

Legacy / Devise of a Thing Pledged or Exception: If the testator provides that the legatee
Mortgaged (Art. 934) or devisee himself may choose, or that a third party
If the testator should bequeath or devise something may choose. (Art. 942)
pledged or mortgaged to secure a recoverable debt
before the execution of the will, the estate is obliged If the person who shall make the choice dies before
to pay the debt, unless the contrary intention the choice is made: (Art. 940, par. 2)
appears. 1) If the choice belonged to the executor or
administrator – The right is transmissible to his
The same rule applies when the thing is pledged or successor in office;
mortgaged after the execution of the will. (Art. 934,
par. 2)

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2) If the choice belongs to an heir, legatee, or 2) That which is proper, as determined by:
devisee – The right is transmitted to his own a) The social standing and circumstances of
heirs. the legatee, and
Note: The choice is irrevocable. (Art. 940, par. 3) b) The value of the disposable portion of the
estate.
Generic Legacies or Devises
RULES ON VALIDITY (Art. 941) Legacy for Support (Art. 944)
GENERIC LEGACY GENERIC DEVISE Duration – During the lifetime of the legatee, unless
Valid even if no such Valid only if there the testator provided otherwise
movable exists in the exists such an
estate upon the immovable in the Amount (Art. 944, par. 3-4)
testator’s death. The estate at the time of 1) The amount fixed by the testator; or
estate will simply have the testator’s death 2) That which the testator, during his lifetime, used
to acquire what is given to give the legatee by way of support, unless
by legacy. markedly disproportionate to the value of the
disposable portion.
Right of Choice in Generic Legacies or Devises 3) That which is reasonable, as determined by:
(Art. 941-943) a) The social standing and circumstances of
General Rule: The executor or administrator, acting the legatee, and
for the estate. b) The value of the disposable portion of the
estate.
Exception: When the testator expressly leaves the
right of choice to the heir, or the legatee or devisee, Legacy of a Periodical Pension
on whom the obligation to give is imposed. If a periodical pension, or a certain annual, monthly,
(Subsidiary legacy or devise). or weekly amount is bequeathed, the legatee may
petition the court for the first installment upon the
Limitation on choice death of the testator, and for the following ones
The persons who have the right of choice shall which shall be due at the beginning of each period;
comply with the legacy by the delivery of a thing such payment shall not be returned, even though
which is neither of inferior nor of superior quality. the legatee should die before the expiration of the
(Art. 941) period which has commenced. (Art. 945)

If the person who shall make the choice cannot do DEMANDABILITY, OWNERSHIP, AND
so: FRUITS
1) If the choice belonged to the executor or PURE AND WITH A SUSPENSIVE
administrator – The right is transmissible to his DETERMINATE TERM OR CONDITION
successor in office; OR GENERIC
2) If the choice belongs to an heir, legatee, or Upon the Upon the arrival of the
devisee – The right is transmitted to his own testator’s death term or upon the
heirs. happening of the
condition, as the case may
Note: The choice is irrevocable. (Art. 940) be
(Art. 947; Paras, supra)
If the person to whom the testator has expressly
given the right to choose does not exercise his right, When Ownership Vests
it shall be understood that he has renounced it and 1) Pure and determinate property – Upon
the person obliged to pay the legacy or devise may testator’s death
deliver any of the things designated, provided it is 2) Pure and generic property –
not of the lowest or of the highest quality. (Tolentino, a) If the property came from the testator’s
supra) estate – Upon testator’s death
b) If the property is acquired from a third
Legacy for Education (Art. 944) person – Upon acquisition
Duration – Age of majority or the completion of a 3) Devises or legacies with a suspensive term –
professional, vocation, or general course whichever Upon arrival of the term, but the right to it vests
comes later. In the latter instance, only if the legatee upon the testator’s death
pursues his studies diligently. 4) Devises or legacies with a suspensive condition
– Upon the testator’s death, if the condition is
Amount (Art. 944, par. 3) fulfilled. (Art. 948; Paras, supra)
1) The amount fixed by the testator; or

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Fruits Order of Preference in Case Estate is Insufficient

1) Pure and determinate property – Upon to Cover all Legacies and Devices (Art. 950)
testator’s death If the estate should not be sufficient to cover all the
2) Pure and generic property – Upon legacies or devises, their payment shall be made in
determination, unless the testator provides the following order:
otherwise 1) Remuneratory legacies or devises;
3) Devises or legacies with a suspensive term – 2) Legacies or devises declared by the testator to
Upon arrival of the term be preferential;
4) Devises or legacies with a suspensive condition 3) Legacies for support;
– Upon the happening of the condition, unless 4) Legacies for education;
the testator provides otherwise (Art. 948; Paras, 5) Legacies or devises of a specific, determinate
supra) thing which forms a part of the estate;
6) All others, pro-rata.
Note: If the legacy or devise is of a specific and
determinate thing pertaining to the testator, the REDUCTION OF ORDER OF
legatee or devisee do not acquire the income which LEGACIES AND PREFERENCE OF
was due and unpaid before the testator’s death. (Art. DEVISES DEVISES AND
948) (ART. 911) LEGACIES
(ART. 950)
From the moment of the testator’s death, the Non-preferred In the order of
specific and determinate thing bequeathed shall be legacies or devises preference, the last is
at the risk of the legatee or devisee, who shall bear will be reduced pro- to be reduced first and
its loss or deterioration, and shall be benefited by its rata and the preferred the first is to be
increase or improvement, without prejudice to the legacies or devises reduced last.
responsibility of the executor or administrator. (Art. will be reduced last.
948) Applies when the Applies when the
Obligation to Deliver the Thing Bequeathed legitimes have been reduction is due to
The thing bequeathed shall be delivered with all its impaired reasons other than
accessories and accessories and in the condition in impairment of legitimes
which it may be upon the death of the testator. (Art.
951) Rules on Acceptance and Repudiation of
Devices or Legacies
The heir, charged with a legacy or devise, or the General Rule: Acceptance may be total or partial.
executor or administrator of the estate, must deliver (Art. 954)
the very thing bequeathed if he is able to do so and
cannot discharge this obligation by paying its value. Exception: If the legacy or devise is partly onerous
(Art. 952, par. 1) and partly gratuitous, the recipient cannot accept the
gratuitous part and renounce the onerous part. Any
Legacies of Money Paid in Cash other combination is permitted. (Art. 954)
Legacies of money must be paid in cash, even
though the heir or the estate may not have any. (Art. Acceptance or Repudiation by Heirs of Legatee
952, par. 2) or Devisee (Art. 954, par. 2)
If the legatee or devisee dies before accepting or
Necessary Expenses for the Delivery of the renouncing the devise or legacy, his heirs shall
Thing Bequeathed exercise such right as to their pro-indiviso share,
The expenses necessary for the delivery of the thing applying the rules in Article 954.
bequeathed shall be for the account of the heir or
the estate, but without prejudice to the legitime. (Art.
952 par. 3)

Possession of the Thing Bequeathed

The legatee or devisee cannot take possession of
the thing bequeathed upon his own authority, but
shall request its delivery and possession of the heir
charged with the legacy or devise, or of the executor
or administrator of the estate should he be
authorized by the court to deliver it. (Art. 953)

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3) Total Loss: If the thing bequeathed or devised

TWO LEGACIES / DEVISES TO THE SAME is totally lost during the lifetime of the testator,
RECIPIENT (ART. 955) or after his death without the heir’s fault. (Art.
BOTH ARE ONE IS GRATUITOUS 957)
GRATUITOUS OR AND THE OTHER IS
ONEROUS ONEROUS 4) If the legacy is a credit against a third person or
The recipient may The recipient cannot the remission of a debt, and the testator,
accept or accept the gratuitous and subsequent to the making of the will brings an
renounce either or renounce the onerous. action against such debtor for payment. (Art.
both. Any other combination is 936)
permitted.
Mistake in the Name of the Thing Bequeathed or
Legacy or Devise to a Compulsory Heir Devised
Any compulsory heir who is at the same time a A mistake as to the name of the thing bequeathed
legatee or devisee may waive the inheritance and or devised, is of no consequence, if it is possible to
accept the legacy or devise, or renounce the latter identify the thing which the testator intended to
and accept the former, or waive or accept both. (Art. bequeath or devise. (Art. 958)
955 par. 2)
Note: For acceptance and repudiation of devices or
legacies, the testator’s wishes are supreme. All the C. INTESTATE SUCCESSION
rules apply in the absence of stipulation providing
otherwise. (Balane, supra) Four Basic Rules of Intestacy
1) Rule of Relationship – the heirs must be
Repudiation by or Incapacity of Legatee or related to the decedent.
Devisee (Art. 956)
If the legatee or devisee cannot or is unwilling to Four Kinds of Relationships
accept the legacy or devise, or if the legacy or a) Ascendants and Descendants;
devise for any reason should become ineffective, b) Collaterals;
the following steps apply: c) Marriage;
1. Follow substitution, if any. d) State of sovereign
2. Then accretion,
3. Lastly, intestacy as it shall be merged to the 2) Rule of Preference of Lines – the descending
mass of the estate. line excludes the ascending and the collateral,
and the ascending excludes the collateral. (Art.
When Legacy/Devise can be Revoked by 965)
Operation of Law
1) Transformation: If the testator transforms the Three lines of relationship
thing bequeathed or devised in such a manner a) Descending line
that it does not retain its form and denomination. b) Ascending line
(Art. 957) c) Collateral line

2) Alienation: If the testator, by any title or for any 3) Rule of Proximity of Degree – the nearer
cause, alienates the thing bequeathed or exclude the more remote, without prejudice to
devised or any part thereof. (Art. 957) representation. (Art. 962, par. 1)

Note: The alienation revokes the legacy or 4) Rule of Equality Among Relatives of the
devise even if for any reason the thing reverts Same Degree – the nearer exclude the more
to the testator (e.g. nullity of the contract) remote, those of equal degree should inherit in
(Paras, supra) equal shares. (Art. 962, par. 2)
Exceptions:
(a) If the reversion is caused by the annulment 1. CAUSES OF INTESTACY AND
of the alienation and the cause for RELATIONSHIP
annulment was vitiation of consent on the
grantor’s part, either by reason of
CAUSES OF INTESTACY
incapacity or of duress. (Fernandez v.
Legal or Intestate Succession – Takes place by
Dimagiba, G.R. No. L-23638, 1967)
operation of law in the absence of a valid will.
(b) If the reversion is by virtue of redemption in
(Paras, supra)
a sale with pacto de retro.

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Instances when Legal or Intestate Succession In the collateral line, ascend to the common
Operates (Art. 960) ancestor and then descend to the person with
1. If a person dies without a will, or with a void will, whom the computation is to be made.
or one which has subsequently lost its validity; Intestate succession extends only to the 5th
2. When the will does not institute an heir to, or degree of collateral relationship.
dispose of all the property belonging to the
testator. In such case, legal succession shall Full Blood Relationship
take place only with respect to the property of Full blood relationship is that existing between
which the testator has not disposed; persons who have the same father and the same
3. If the suspensive condition attached to the mother. (Art. 967, par. 1)
institution of heir does not happen or is not
fulfilled, or if the heir dies before the testator, or Half Blood Relationship
repudiates the inheritance, there being no Half-blood relationship is that existing between
substitution, and no right of accretion takes persons who have the same father, but not the same
place; mother, or the same mother, but not the same
4. When the heir instituted is incapable of father. (Art. 967, par. 2)
succeeding, except in cases provided in the Civil
Code. Importance of Distinction Between Full Blood
and Half Blood Relationship (Arts. 1006, 1008)
Other Causes of Intestacy (Tolentino, supra) Ratio of 2:1 for full-blood and half-blood relationship
1) Happening of a resolutory condition; in Articles 1006 and 1008, for brothers and sisters
2) Expiration of a resolutory term; and nephews and nieces.
3) Preterition (Balane, supra)
RENUNCIATION IN INTESTACY
Note: Intestacy operates on the same principles as If the inheritance should be repudiated by the
succession to the legitime. They are both governed nearest relative, should there be one only, or by all
by the rules on exclusion and concurrence. the nearest relatives called by law to succeed,
should there be several, those of the following
RELATIONSHIP degree shall inherit in their own right and cannot
Proximity of relationship is determined by the represent the person or persons repudiating the
number of generations. (Art. 963) inheritance. (Art. 969)

Degree – One generation Effect of Renunciation by All in the Same

Degree
Computation of Degrees The right of succession should first be passed on the
1. Direct line – No legal limit to the number of heirs in succeeding degrees, before the next line
degrees for entitlement to intestate succession. can succeed.
2. Collateral line – Intestate succession extends 1. The descending line inherits first.
only to the fifth degree of collateral relationship
(Art. 1010) Note: If ALL the descendants of a certain
degree renounce, succession passes to the
Line – Series of degrees, which may be direct or descendants of the next degree, and so on.
collateral.
(a) Direct line – Constituted by the series of 2. The ascending line inherits next.
degrees among ascendants and descendants.
i. Descending line – Unites the head of the Note: Should no one be left in the descending
family with those who descend from him. line, the heirs in the ascending line acquire the
ii. Ascending line – Binds a person with right of succession, in order of degrees of
those from whom he descends. proximity.
In the direct line, ascend to the common
ancestor. 3. The collateral line inherits last.
There is no legal limit to the number of degrees
for entitlement to intestate succession. Note: Only if all the descendants and
(b) Collateral line – Constituted by the series of ascendants renounce will the collateral relatives
degrees among persons who are not acquire the right to succeed.
ascendants and descendants, but who come
from a common ancestor. The effect of renunciation by all in the same degree
applies in cases of predecease or incapacity by all

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in the same degree, except in cases where Operation of Representation

representation is proper. Per stirpes – The representative or representatives
receive only what the person represented would
2. RIGHT OF REPRESENTATION have received. If there are more than one
representative in the same degree, then the portion
Representation - a right created by fiction of law, is divided equally, without prejudice to the distinction
by virtue of which the representative is raised to between legitimate and illegitimate children, when
the place and the degree of the person applicable. (Balane, supra)
represented, and acquires the rights which the
latter would have if he were living or if he could Rules to Qualify as a Representative
have inherited. (Art. 970; Tumbokon v. Legaspi, 1) The representative must be qualified to succeed
G.R. No. 153736) the decedent. (Art. 973)
2) The representative need not be qualified to
In order that representation may take place, it is succeed the person represented. (Art. 971)
necessary that the representative himself be 3) The person represented need not be qualified
capable of succeeding the decedent. (Art. 973) to succeed the decedent.
Note: The representative does not succeed the
Representation only applies in compulsory and person represented but the one whom the person
intestate succession in the direct descending line represented would have succeeded. (Art. 971)
(Art. 972) and in one instance in the collateral line in
the case of nephews and nieces representing Representation
brothers and sisters of the deceased (Art. 975) BY BY NEPHEWS AND
GRANDCHILDREN NIECES
In the collateral line, the right of representation If all children are If they survive with
extends no further than the nephews and nieces. disqualified, the their uncles and
Grandnephews and grandnieces are not entitled to grandchildren inherit aunts, they shall
inherit by right of representation in the collateral line. by representation. inherit from the
(In re: Intestate Estates of Delgado & Rustia v. Heirs (Art. 982) deceased by
of Vda. De Damian, G.R. No. 155733) representation.

Note: There is no representation in testamentary If all their uncles and

succession and in any type of succession in the aunts are disqualified
direct ascending line. (Paras, supra) from inheriting
(predeceased,
Instances When Representation Operates (PID) incapacitated or
1) Predecease; unworthy,
2) Incapacity or unworthiness; disinherited), they
3) Disinheritance (Paras, supra) inherit in equal
Note: Representation does not apply in portions. (Art. 975)
renunciation. (Art. 977)
3. ORDER OF INTESTATE
Right of Representation of Illegitimate Children SUCCESSION
(Art. 902)
The rights of illegitimate children set forth in the Intestate Heirs (Paras, supra)
articles on legitimes and intestate succession are 1) Legitimate Children or Descendants (Art. 979)
transmitted upon their death to their descendants, 2) Illegitimate Children or Descendants (Art. 988,
whether legitimate or illegitimate. 990, 992)
3) Legitimate Parents or Ascendants (Art. 986)
Right of representation 4) Parents of Illegitimate Children (Art. 993)
DECEDENT IS A 5) Surviving Spouse (Art. 994)
DECEDENT IS AN
LEGITIMATE 6) Brothers, Sisters, Nephews, Nieces (Arts.
ILLEGITIMATE CHILD
CHILD
1004-1008)
The right of The right of 7) Other Collateral up to the fifth degree (Art.
representation is representation is 1009)
given only to granted to both 8) State (Art. 1011)
legitimate legitimate and
descendants. illegitimate
descendants.
(Art. 992)

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Rules of Exclusion and Concurrence 8) State (Arts. 1011-1014)

1) Legitimate Children or Descendants (Arts. a) Excludes no one;
978-982) b) Concurs with no one;
a) Exclude parents, collaterals, and the State c) Excluded by everyone
b) Concur with surviving spouse, and
illegitimate children or descendants Person to be Represented
c) Excluded by no one ILLEGITIMATE LEGITIMATE CHILD
CHILD
2) Illegitimate Children or Descendants (Arts. His or her Only his or her
983, 988-994) descendant whether legitimate
a) Exclude parents of illegitimate children, legitimate or descendants can
collaterals, and the State; illegitimate, may represent him, his or
b) Concur with surviving spouse, legitimate represent him. her illegitimate
children, and legitimate parents; descendants cannot
c) Excluded by no one represent him. (Vda.
De Crisologo v. Cam
3) Legitimate parents (Arts. 985-986) G.R. No. L-44051,
a) Exclude collaterals and the State; 1985)
b) Concur with illegitimate children and the
surviving spouse; Partial Intestacy (Balane, supra)
c) Are excluded by legitimate children Where a decedent left a will disposing of a part, but
not all, of the disposable portion, the following steps
4) Parents of illegitimate children (Arts. 993- may solve the problem:
994) 1. Trace where the free portion went in total
a) Exclude collaterals and the State; intestacy.
b) Concur with the surviving spouse; 2. The testamentary provision should be carried
c) Excluded by legitimate children and out first, then what is left of the free portion
illegitimate children should then be given to the intended beneficiary
in intestacy. (Balane, supra)
5) Surviving spouse (Arts. 995-1002)
a) Excludes collaterals other than brothers,
sisters, nephews, nieces, and the State;
b) Concur with legitimate children, illegitimate
children, legitimate parents, parents of
illegitimate children, brothers, sister,
nephews and nieces;
c) Excluded by no one

6) Brothers and sisters, nephews and nieces

(Arts. 1003-1008)
a) Exclude all other collaterals and the State;
b) Concur with the surviving spouse;
c) Excluded by legitimate children,
illegitimate children, legitimate parents,
and parents of illegitimate children

7) Other collaterals up to the fifth degree (Arts.

1009-1010)
a) Exclude collaterals in more remote degree
and the State;
b) Concur with collaterals in the same
degree;
c) Excluded by legitimate children,
illegitimate children, legitimate parents,
parents of illegitimate children, surviving
spouse, brothers and sisters, nephews
and nieces;

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HEIRS LEGITIME INTESTACY TOTAL

Legitimate Children 1/2 divided equally 1/2 divided equally Whole estate divided equally
Alone
Legitimate Children and LC – 1/2 divided equally Residue left shall Whole estate divided among
Illegitimate Children be divided among them, observing the 2:1 ratio
ILC – 1/2 of share of 1 LC
them, observing
the 2:1 ratio
Legitimate Children and LC – 1/2 divided equally Residue left shall Whole estate divided equally
Surviving Spouse be divided among
Spouse – Share of 1 LC
them equally
One Legitimate Child LC – 1/2 1/4 goes to the LC – 1/2
and Surviving Spouse spouse
Spouse – 1/4 Spouse – 1/2

Legitimate Children, LC – 1/2 Residue left shall Whole estate divided among
Surviving Spouse, Spouse – share of 1 LC be divided among them, observing the 2:1 ratio
Illegitimate Children them, observing
ILC – 1/2 of share of 1 LC
the 2:1 ratio
Legitimate Parents LP – 1/2 1/2 goes to the Whole estate divided equally
Alone parents
Legitimate Ascendants 1/2 1/2 Whole estate divided among
Other than Parents them, observe rules in
proximity in degree, and
division by line
Legitimate Parents and LP – 1/2 1/4 goes to the LP – 1/2
Illegitimate Children illegitimate children
ILC – 1/4 ILC – 1/4

Legitimate Parents and LP – 1/2 1/4 goes to the LP – 1/2

Surviving Spouse spouse
Spouse – 1/4 Spouse – 1/2

Legitimate Parents, LP – 1/2 1/8 goes to the LP – 1/2

Surviving Spouse, and ILC – 1/4 spouse ILC – 1/4
Illegitimate Children
Spouse – 1/8 Spouse – 1/4
Illegitimate Children ILC – 1/2 1/2 goes to Whole estate divided equally
Alone illegitimate children
Illegitimate Children ILC – 1/3 1/6 goes to ILC – 1/2
and Surviving Spouse illegitimate children
Spouse – 1/3 1/6 goes to spouse Spouse – 1/2

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HEIRS LEGITIME INTESTACY TOTAL

Surviving Spouse 1/2 Residue goes to the Whole estate goes to the spouse
Alone 1/3 if marriage is spouse
in articulo mortis
Surviving Spouse Spouse – 1/4 1/ 4 goes to the Spouse 1/2
and Parents of spouse
Illegitimate Parents of 1/4 goes to the Parents of Illegitimate Children – ¼
Children Illegitimate parents of illegitimate
Children – 1/4 children
Surviving Spouse Spouse – 1/2 1/2 goes to the Spouse – 1/2
and Legitimate legitimate brothers
Brothers and and sisters, nephews Legitimate brothers and sisters,
Sisters, Nephews and nieces nephews and nieces – 1/2
and Nieces
Surviving Spouse Spouse – 1/2 1/2 goes to the Spouse – 1/2
and Illegitimate illegitimate brothers
Brothers and and sisters, nephews
Legitimate brothers and sisters,
Sisters, Nephews and nieces
nephews and nieces – 1/2
and Nieces
Parents of 1/2 1/2 goes to the Whole estate divided equally
Illegitimate parents of illegitimate
Children Alone children
Parents of Any kind of 1/2 goes to the any Whole estate goes to the children,
Illegitimate children – 1/2, kind of children, observing 2:1 ratio, if applicable
Children and observe 2:1 ratio observe 2:1 ratio Parents of illegitimate children are
Children of Any excluded by all kinds of children
Kind

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HEIRS LEGITIME INTESTACY TOTAL

Legitimate Brothers and N/A Whole estate divided among them, observing the 2:1 ratio for
Sisters Alone full-blood and half-blood siblings
Legitimate Brothers and N/A Whole estate divided among them, observing the 2:1 ratio for
Sisters, Nephews and full-blood and half-blood siblings
Nieces Apply rules on representation when proper
Nephews and Nieces N/A Whole estate divided among nephews and nieces, observing the
with Uncles and Aunts 2:1 ratio for full-blood and half-blood siblings
Uncles and aunts of the decedent are excluded. (Bacayo v.
Borromeo)
Illegitimate Brothers N/A Whole estate divided among them, observing the 2:1 ratio for
and Sisters Alone full-blood and half-blood siblings
Illegitimate Brothers N/A Whole estate divided among them, observing the 2:1 ratio for
and Sisters, Nephews full-blood and half-blood siblings
and Nieces
Nephews and Nieces N/A Whole estate divided among them, observing the 2:1 ratio for
Alone full-blood and half-blood siblings
Other Collaterals up to N/A Whole estate divided equally, observe rules in proximity in
the Fifth Degree degree
State N/A (Resident Decedent) (Non-Resident Decedent)
Personal property – Municipality Personal property and real
of the last residence property –Municipality
Real property – Municipality where it is situated
where it is situated

Property is to be used for the benefit of public education and

charitable institutions in the respective municipalities or cities, or
alternatively, at the instance of an interested party, or motu
proprio, court may order creation of a permanent trust for the
benefit of the institutions concerned.

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D. PROVISIONS COMMON TO TESTATE • Persons not incapacitated by law may succeed

AND INTESTATE SUCCESSION by will or ab intestato. (Art. 1024)
• A testamentary provision in favor of a
CAPACITY TO SUCCEED disqualified person, even though made under
Persons not incapacitated by law may succeed by the guise of an onerous contract, or made
will or ab intestato. through an intermediary, shall be void. (Art.
755)
The provisions relating to incapacity by will are
equally applicable to intestate succession. (Art. IF INSTITUTION IS
IF INSTITUTION IS
1024) SUBJECT TO A
SUBJECT TO A
SUSPENSIVE
SUSPENSIVE TERM
Note: Both a natural person and a juridical person CONDITION
may inherit. (Art. 1026) The successor must The requirement of
be living or legally being alive or legal
Requisites for Natural Persons existing both when the existence applies only
In order to be capacitated to inherit, the heir, devisee decedent dies and at the moment of the
or legatee must be living at the moment the when the condition decedent’s death.
succession opens, except in case of representation, happens. (Balane, (Balane, supra)
when it is proper. (Art. 1025, par 1) supra)
A child already conceived at the time of the death of
the decedent is capable of succeeding provided it Incapacity to Succeed in Testamentary
be born later under the conditions prescribed in
Article 41 of the Civil Code. (Art. 1025, par 2) Succession (Art. 1027)
The following are incapable of succeeding:
Requisites for Juridical Persons 1) The priest who heard the confession of the
A testamentary disposition may be made to the testator during his last illness, or the minister of
State, provinces, municipal corporations, private the gospel who extended spiritual aid to him
corporations, organizations, or associations for during the same period;
religious, scientific, cultural, educational, or
charitable purposes. Requisites:
a) The will must have been executed during
All other corporations or entities may succeed under the testator’s last illness;
a will, unless there is a provision to the contrary in b) The spiritual ministration must have been
their charter or the laws of their creation, and always extended during the last illness;
subject to the same. (Art. 1026) c) The will must have been executed during or
after the spiritual ministration.
Time to Determine Capacity to Succeed • Applies to all religions.
General Rule: In order to judge the capacity of the
heir, legatee, or devisee, his qualification at the time 2) The relatives of such priest or minister of the
of the death of the decedent shall be the criterion. gospel within the fourth degree, the church,
(Art. 1034) order, chapter, community, organization, or
institution to which such priest or minister may
Exceptions: belong;
1) Those disqualified under Article 1032
(Unworthiness, pars. 2,3,5) wherein it is 3) A guardian with respect to testamentary
necessary to wait until final judgment is dispositions given by a ward in his favor before
rendered; the final accounts of the guardianship have
2) Those disqualified under Article 1032 been approved, even if the testator should die
(Unworthiness, par. 4) wherein it is necessary after the approval thereof; nevertheless, any
to wait for the expiration for the month allowed provision made by the ward in favor of the
for report; guardian when the latter is his ascendant,
3) If the institution of the heirs, legacy or devise is descendant, brother, sister, or spouse, shall be
conditional, the time of compliance with the valid;
condition shall be considered. (Art. 1034) a) The will must have been executed by the
ward during the effectivity of the
Note: guardianship.
• The capacity to succeed is governed by the law b) The terms of this provision seem to be
of the nation of the decedent. (Art. 1039) limited to guardians over the property.

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c) A guardian who happens to be an 1) Disposition for prayers and pious works for the
ascendant, descendant, brother, sister, or benefit of the testator’s soul;
spouse of the ward-testator is excluded 2) No specification of the application of the
from the prohibition. disposition.

4) Any attesting witness to the execution of a will, Apportionment of the disposition or its
the spouse, parents, or children, or any one proceeds: (Balane, supra)
claiming under such witness, spouse, parents, 1) 1/2 to the church or denomination to which the
or children; testator belonged
• Reiteration of Art. 823 but in more general 2) 1/2 to the State, to be applied as provided in
terms as it annuls all testamentary Article 1013.
disposition not only legacies and devises.
The rule that if there are three other Dispositions in Favor of the Poor in General
competent witnesses as an exception (Art. 1030)
should be read into this. Testamentary provisions in favor of the poor in
general, without designation of particular persons or
5) Any physician, surgeon, nurse, health officer or of any community, shall be deemed limited to the
druggist who took care of the testator during his poor living in the domicile of the testator at the time
last illness; of his death, unless it should clearly appear that his
• The physician must have taken care of the intention was otherwise.
testator during his/her final illness. “Taking
care” means medical attendance with some The designation of the persons who are to be
regularity or continuity. considered as poor and the distribution of the
property shall be made by the person appointed by
6) Individuals, associations and corporations not the testator for the purpose; in default of such
permitted by law to inherit under any kind of person, by the executor, and should there be no
succession. (Art. 1027) executor, by the justice of the peace, the mayor, and
the municipal treasurer, who shall decide by a
Prohibitions in donations applies to majority of votes all questions that may arise. In all
testamentary succession (Art. 1028 in relation to these cases, the approval of the Court of First
Art. 739) Instance shall be necessary.
Those who are disqualified from receiving donations
under Article 739. The preceding paragraph shall apply when the
Under Article 739, the following are disqualified from testator has disposed of his property in favor of the
receiving testamentary dispositions from the parties poor of a definite locality.
specified:
1) Those made between persons who are guilty Disqualification of a Witness to Succeed to a
of adultery, or concubinage at the time of the Legacy or Devise (Art. 823)
donation; If a person attests to the execution of a will, to whom
2) Those made between persons found guilty of or to whose spouse, or parent, or child, a devise or
the same criminal offense, in consideration legacy is given by such will, such devise or legacy
thereof; shall, so far only as concerns such person, or
3) Those made to a public officer or his wife, spouse, or parent, or child of such person, or any
descendants and ascendants, by reason of his one claiming under such person or spouse, or
office; parent, or child, be void, unless there are three other
competent witnesses to such will. However, the
Disposition For Prayers and Pious Works for the person attesting shall be admitted as a witness if
Benefit of His Soul such devise or legacy had not been made or given.
Should the testator dispose of the whole or part of
his property for prayers and pious works for the Testamentary Provision in Favor of a
benefit of his soul, in general terms and without Disqualified Person is Void (Art. 1031)
specifying its application, the executor, with the A testamentary provision in favor of a disqualified
court's approval, shall deliver one-half thereof or its person, even though made under the guise of an
proceeds to the church or denomination to which the onerous contract, or made through an intermediary,
testator may belong, to be used for such prayers shall be void.
and pious works, and the other half to the State, for
the purposes mentioned in Article 1013. (Art. 1029) Unworthiness (Art. 1032)
Requisites: (Balane, supra) The following are incapable of succeeding under all
kinds of succession by reason of unworthiness:

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1. Parents who have abandoned their children or 5. Any person convicted of adultery or
induced their daughters to lead a corrupt or concubinage with the spouse of the testator;
immoral life, or attempted against their virtue; o Final conviction required
o Three grounds are provided:
(a) abandonment; 6. Any person who by fraud, violence, intimidation,
(b) inducement of a daughter to lead a or undue influence should cause the testator to
corrupt or immoral life; and make a will or to change one already made;
(c) attempt against a daughter’s virtue
o Abandonment - includes all conduct 7. Any person who by the same means prevents
constituting a repeated or total refusal or another from making a will, or from revoking one
failure to care for the child. already made, or who supplants, conceals, or
o Inducement - same as deprivation of alters the latter's will;
parental authority; only applies to female
descendants 8. Any person who falsifies or forges a supposed
o Attempt on virtue - no conviction is required will of the decedent.

2. Any person who has been convicted of an Revocation of Unworthiness

attempt against the life of the testator, his or her The cause of unworthiness shall be without effect if
spouse, descendants, or ascendants; the testator had knowledge thereof at the time he
o Covers all stages in the commission of the made the will, or if, having known of them
crime subsequently, he should condone them in writing.
o Felony must be intentional (so not through (Art. 1033)
negligence)
o Final conviction required The unworthiness is set aside in the following ways:
(Balane, supra)
3. Any person who has accused the testator of a 1. A written condonation, or
crime for which the law prescribes 2. The execution by the offended party of a will
imprisonment for six years or more, if the with knowledge of the cause of unworthiness.
accusation has been found groundless;
o Covers filing of the complaint before the By Operation of Law – In order to restore the
prosecutor, presenting incriminating disinherited heir to capacity, subsequent
evidence, suppressing exculpatory reconciliation is enough under the rules of
evidence disinheritance while under those on unworthiness;
o The testator must be acquitted either a written pardon or a subsequent will is
o The accusation must be found to be required. These rules on disinheritance and
groundless—must state that no crime was unworthiness would overlap the moment the testator
committed or that accused did not commit uses one of the acts of unworthiness as a cause to
the crime. disinherit an heir. Such act submits the situation to
the rules on disinheritance; thus, reconciliation
4. Any heir of full age who, having knowledge of renders the disinheritance ineffective. (Balane,
the violent death of the testator, should fail to supra)
report it to an officer of the law within a month,
unless the authorities have already taken Pardon of Acts of Unworthiness (Art. 1033)
action; this prohibition shall not apply to cases EXPRESS IMPLIED
wherein, according to law, there is no obligation Made by the execution Effected when testator
to make an accusation; of a document or any makes a will instituting
o There is no such obligation existing under writing in which the the unworthy heir with
our present law descendent condones knowledge of the
o Requisites: the cause of incapacity cause of incapacity
a. the heir has knowledge of violent Cannot be revoked Revoked when the
death of the decedent; testator revokes the
b. the heir is of legal age will or the institution
c. the heir fails to report it to an office of
the law within a month (after learning Representation in Unworthiness (Balane, supra)
of it) If the person excluded from the inheritance by
d. there is a legal obligation for the heir reason of the incapacity should be the child or
to make an accusation descendant of the decedent, and should have
children or descendants, the latter shall acquire his
right to the legitime.

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The person excluded shall not enjoy the usufruct ELEMENTS OF ACCRETION IN TESTACY (Art.
and the administration of the property thus inherited 1016)
by his children. (Art. 1035) 1) That two or more persons be called to the same
inheritance, or to the same portion, pro indiviso;
Note: The extent of representation may be as to the and
legitime and as to the share of the unworthy heir in 2) That one of the persons thus called die before
the intestate portion. (Balane, supra) the testator, or renounce the inheritance, or be
incapacitated to receive it.
If the unworthy heir is a brother or sister, his children
(nephews and nieces of the decedent) will Meaning of Pro Indiviso (Balane, supra)
represent. (Balane, supra) • Undivided or in common
• Either the co-heirs are instituted without
Alienations Made by an Excluded Heir individual designation of shares; or
Alienations of hereditary property, and acts of • The co-heirs are instituted with the specification
administration performed by the excluded heir, that they share equally.
before the judicial order of exclusion, are valid as to • The co-heirs are instituted with unequal
third persons who acted in good faith. (Art. 1036) fractional shares.

Note: The validity of the alienation is determined by Instances when Accretion operates in
the good faith or bad faith of the transferee, not of Testamentary Succession (Balane, supra)
the transferor. (Balane, supra) 1) Renunciation;
2) Predecease;
The co-heirs of the excluded heir have the right to 3) Incapacity
recover damages from the disqualified heir. (Art.
1036) Note: Provided, only some, not all of the instituted
heirs renounce, predecease, or are incapacitated to
Right of an Excluded Heir for Indemnity for succeed. (Balane, supra)
Expenses
The unworthy heir who is excluded from the ACCRETION IN INTESTACY
succession has the right to demand indemnity for In legal succession the share of the person who
any expenses incurred in the preservation of the repudiates the inheritance shall always accrue to his
hereditary property, and to enforce such credits as co-heirs. (Art. 1018)
he may have against the estate. (Art. 1037)
Occasions for the Operation of Accretion in
Obligations of the Disqualified Heir in Intestacy (Balane, supra)
Possession of the Hereditary Property 1) Repudiation or renunciation; (Art. 1018)
Any person incapable of succession, who, 2) Predecease, only if representation does not
disregarding the prohibition stated in the preceding take place;
articles, entered into the possession of the 3) Incapacity or unworthiness, only if
hereditary property, shall be obliged to return it representation does not take place
together with its accessions. (Art. 1038)

Prescriptive Period HOWEVER, in case of predecease or incapacity,

The action for a declaration of incapacity and representation, if proper, will prevent accretion from
recovery of the inheritance, devise or legacy shall occurring. (Balane, supra)
be 5 years from the time the disqualified person took
possession thereof. (Art. 1040) Relatives must be in the same kind of relationship
for accretion to take place. This is because of the
Note: It may be brought by any one who may have principle of preference of lines in intestate
an interest in the succession. (Art. 1040) succession. (Balane, supra)

RIGHT OF ACCRETION Co-heirs in the Same Category

Accretion – A right by virtue of which, when two or The co-heirs in whose favor accretion occurs must
more persons are called to the same inheritance, be co-heirs in the same category as the excluded
devise or legacy, the part assigned to the one who heir. (Balane, supra)
renounces or cannot receive his share, or who died
before the testator, is added or incorporated to that
of his co-heirs, co-devisees, or co-legatees. (Art.
1015)

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Accretion Must be Proportional Time for Acceptance or Repudiation

The heirs to whom the portion goes by the right of Within 30 days after the court has issued an order
accretion take it in the same proportion that they for the distribution of the estate the heir, devisee, or
inherit. (Art. 1019) legatee shall signify to the court having jurisdiction
whether they accept or repudiate the inheritance. If
General Rule: The heirs to whom the inheritance they do not do so within that time, they are deemed
accrues shall succeed to all the rights and to have accepted the inheritance. (Art. 1057)
obligations which the heir who renounced or could
not receive it would have had. (Art. 1020) Who May Accept or Repudiate
General Rule: Any person having the free disposal
Exceptions: (Balane, supra) of his property may accept or repudiate an
1. In testamentary succession, if the testator inheritance. (Art. 1044)
provides otherwise;
2. If the obligation is purely personal, and hence, Exceptions:
intransmissible 1) Minors or incapacitated persons
Acceptance – By their parents or guardians.
Accretion among Compulsory Heirs Repudiation – By their parents or guardians with
Among the compulsory heirs the right of accretion judicial authorization (Art. 1044)
shall take place only when the free portion is left to 2) Inheritance left to the poor – The right to
two or more of them, or to any one of them and to a accept the inheritance shall belong to the
stranger. (Art. 1021) persons designated by the testator to determine
the beneficiaries and distribute the property, or
No Accretion in the Legitime in their default, to those mentioned in Article
If the part repudiated be the legitime, the other co- 1030. (Art. 1044)
heirs shall succeed to it in their own right, and not by 3) Corporation, association, institution, or
the right of accretion. (Art. 1021) entity as beneficiary (Art. 1045)
Acceptance – May be made by the lawful
Accretion Subordinate to Substitution in representatives
Testamentary Succession Repudiation – May be made by the lawful
In testamentary succession, when the right of representatives with judicial authority
accretion does not take place, the vacant portion of 4) Literate Deaf-Mutes
the instituted heirs, if no substitute has been Acceptance and Repudiation –Personally or
designated, shall pass to the legal heirs of the through an agent (Art. 1048)
testator, who shall receive it with the same charges 5) Illiterate Deaf-Mutes (Balane, supra)
and obligations (Art. 1022) Acceptance – Guardians
Repudiation – Guardians with judicial approval
Accretion Among Devisees, Legatees and
Usufructuaries If the Beneficiary is a Married Woman (Art 1047)
Accretion shall also take place among devisees, She may either accept or repudiate the inheritance
legatees and usufructuaries under the same without her husband’s consent.
conditions established for heirs. (Art. 1023)
Manner of Acceptance of Inheritance (Art. 1049)
ACCEPTANCE AND REPUDIATION OF 1) Express Acceptance
INHERITANCE a. Public Document
Characteristics of Acceptance and Repudiation b. Private Writing
1) Free and Voluntary (Art. 1041)
2) Irrevocable once made and cannot be 2) Tacit Acceptance – one resulting from acts by
impugned, except in cases vitiating consent or which the intention to accept is necessarily
when an unknown will appear; (Art. 1056) implied or which one would have no right to do
3) Retroactive (Art. 777) except in the capacity of an heir. It can be
presumed from certain acts of the heir such as:
Requirements to Accept or Repudiate and a. If the heir sells, donates, or assigns his right
Inheritance to a stranger, or to his co-heirs, or to any of
A person may only accept or repudiate an them
inheritance once he or she is certain of: b. If the heir renounces the same, even
1) The death of the person from whom he is to though gratuitously, for the benefit of one or
inherit; and more of his co-heirs
2) His right to the inheritance. (Art. 1043) c. If he renounces it for a price in favor of all
his co-heirs indiscriminately; but if this

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renunciation should be gratuitous, and the b. Transfer considered to be with

co-heirs in whose favor it is made are those consideration
upon whom the portion renounced should
devolve by virtue of accretion, the There are also tax implications because there are
inheritance shall not be deemed as two transfers.
accepted
Effects of Repudiation Compared to Predecease
3) Implied Acceptance - This is acceptance by and Incapacity
inaction. Under Art 1057, to signify acceptance 1) Representation does not apply to repudiation
or repudiation within 30 days after an order of unlike in predecease and incapacity. (Art. 976)
distribution by the probate court. 2) Accretion is more relevant in repudiation
because there is no representation in
Forms of Repudiation (Art. 1051) repudiation.
The repudiation of the inheritance shall be made in: a) In case of predecease or incapacity,
1) A public document signed before a notary accretion will be prevented if representation
public, or is proper.
2) Authentic instrument – equivalent to an
indubitable writing or a writing whose PARTITION AND DISTRIBUTION OF ESTATE
authenticity is admitted or proved, or PARTITION (Art. 1079, 1082)
3) By a petition presented to the court having The separation, division and assignment of a thing
jurisdiction over the testamentary or intestate held in common among those to whom it may
proceedings. belong. It includes every act which is intended to put
an end to indivision among co-heirs, and legatees or
• The law considers that the act of repudiation is devisees, although it should purport to be a sale,
more solemn that the act of acceptance and that exchange, compromise, or any other transaction. It
repudiation produces more violent and is not subject to any form.
disturbing consequences.
• If the heir repudiates the inheritance to the Who May Effect Partition
prejudice of his own creditors, the latter may 1. Decedent himself during his lifetime by an act
petition the court to authorize them to accept it inter vivos or by will (Art. 1080)
in the name of the heir. 2. Heir themselves (Art. 1083)
• If an heir is both a testate and legal heir, 3. Competent court (Art. 1083)
repudiation of the inheritance as a testate heir, 4. Third person designated by the decedent (Art.
he is understood to have repudiated in both 1081)
capacities. However, should he repudiate as a
legal heir, without knowledge of being a testate Who Can Demand Partition (Art. 1083)
heir, he may still accept the inheritance as a 1. Compulsory heir;
legal heir. 2. Voluntary heir;
3. Legatee or devisee;
If renounced in favor of other heirs, does it mean 4. Any person who has acquired interest in the
acceptance? (Balane, supra) estate
It depends:
1) If specific heir – whether or not renouncing heir When Partition Cannot be Demanded (PAPU)
receives anything, considered as acceptance 1. When expressly Prohibited by the testator
on the part of the heir. There are two transfers. himself for a period not exceeding 20 years;
2) If gratuitous – (Art. 1083)
a. In favor of all his co heirs indiscriminately - 2. When the co-heirs Agreed that the estate shall
there is repudiation because the heir not be divided for a period not exceeding 10
deemed to have not accepted. Hence, years, renewable for another 10 years;
accretion takes place. 3. When Prohibited by law;
b. In favor of all co-heirs but in proportion 4. When to partition the estate would render it
different from those they would receive by Unserviceable for the use for which it is
accretion: considered as tacit acceptance. intended.
c. If gratuitous in favor of one or some of his
co-heirs – deemed conveyance in favor of Note:
the co-heirs specified, hence there is • Partition Inter Vivos (Art. 1080) – it is one that
acceptance. merely allocates specific items or pieces of
3) If onerously: property on the basis of the pro indiviso shares
a. There is no repudiation

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fixed by law or given under the will to heirs or As between the deed of extra-judicial partition and
successors. the subdivision plan which contained an inadvertent
• Partition is not itself a mode of acquiring error, the deed of extra-judicial partition must
ownership, nor a title, but being predicated on prevail. The subdivision plan cannot amend the
succession, necessitates relationship to the deed of extra-judicial partition because that is the
decedent (in case of intestacy) or a will duly binding contract to which all the heirs agreed. (Ulay
probated (in case of testacy). v. Bustamante, G.R. Nos. 231721 & 231722)

Prohibition to Partition (Art. 1083) Effects of Inclusion of Intruder in Partition (Art.

1. The prohibition to partition for a period not 1105)
exceeding 20 years can be imposed on the 1. Between a true heir and several mistaken heirs
legitime. – Partition is VOID
2. If the prohibition to partition is for more than 20 2. Between several true heirs and a mistaken heir
years, the excess is void. – transmission to mistaken heir is VOID
3. Even if a prohibition is imposed, the heir’s 3. Through error or mistake; share of true heir is
mutual agreement can still make the partition. allotted to mistaken heir – partition shall not be
rescinded unless there is bad faith or fraud on
Legal Redemption In Favor Of Co-Heirs (Art. the part of the other persons interested, but the
1623) latter shall be proportionately obliged to pay the
The right of legal redemption predicated upon the true heir of his share
fact that the sale made by the co-heir is effected
before the partition of the estate but after the death Note: Partition with respect to the mistaken heir is
of the decedent. VOID. (Art. 1105)

Requisites: (Aguilar v. Aguilar, G.R. No. 141613) A Void Will may be a Valid Partition (Paras,
1. There must be several co-heirs supra)
2. That one of them sells his right to a stranger 1. If the will was in fact a partition; and
3. That the sale is made before the partition 2. If the beneficiaries in the void will were legal
4. That the right of redemption must be exercised heirs
by one or more of the co-heirs within 1 month
from the time they were notified in writing by the RESCISSION AND NULLITY OF PARTITION
co-heir vendor
5. The vendee is reimbursed for the price of the A partition, judicial or extra-judicial, may also be
sale. rescinded on account of lesion, when any one of the
co-heirs received things whose value is less, by at
EFFECTS OF PARTITION least one-fourth, than the share to which he is
• Confers upon each heir the exclusive entitled, considering the value of the things at the
ownership of the property adjudicated. (Art. time they were adjudicated. (Art. 1098)
1091)
• After the partition, the co-heirs shall be Partition Made By the Testator (Art. 1099)
reciprocally bound to warrant the title to
(warranty against eviction) and the quality of General Rule: A partition made by the testator
(warranty against hidden defects), each cannot be impugned on the grounds of lesion.
property adjudicated. (Art. 1092)
• The obligation of warranty shall cease in the Exceptions:
following cases: (Art. 1096) 1. When the legitime of the compulsory heirs is
1. When the testator himself has made the prejudiced; or
partition unless his intention was 2. When it appears or may reasonably be
otherwise, but the legitime shall always presumed, that the intention of the testators was
remain unimpaired. otherwise.
2. When it has been expressly stipulated in
the agreement of partition, unless there Options Available to Obligor-Heir (Art. 1101)
has been bad faith. The heir who is sued shall have the option of:
3. When the eviction was due to a cause 1. Indemnifying the plaintiff for the loss, by
subsequent to the partition, or has been payment in cash or by delivery of a thing of the
caused by the fault of the distributee of the same kind and quality as that awarded to the
property. plaintiff; or
2. Consenting to a new partition

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Note: If a new partition is made, it shall affect Omission of a Compulsory Heir in the Partition
neither those who have not been prejudiced nor General Rule: A partition made with preterition of
those who have not received more than their any of the compulsory heirs shall not be rescinded.
just share. (Art. 1101) (Art. 1104)

Remedy of an Heir Who has Alienated the Note: This is not preterition under Article 854. This
Property Adjudicated to Him is simply an omission of a compulsory heir in the
An heir who has alienated the whole or a partition, the assumption being that something is left
considerable part of the real property adjudicated to for him in the form of an undisposed portion of the
him cannot maintain an action for rescission on the estate. The omitted heir simply gets his rightful
ground of lesion, but he shall have a right to be share. (Non v. CA, G.R. No. 137287)
indemnified in cash. (Art. 1102)
Exception: Bad faith or fraud on the part of the other
Incompleteness of Partition Not a Ground for persons interested. (Art. 1104)
Rescission
The omission of one or more objects or securities of Remedy: The other persons interested shall be
the inheritance shall not cause the rescission of the proportionately obliged to pay to the person omitted
partition on the ground of lesion, but the partition the share which belongs to him. (Art. 1104)
shall be completed by the distribution of the objects
or securities which have been omitted. (Art. 1103)

PERIODS TO REMEMBER ON PARTITION

20 years (Art. 1083) Maximum period testator can prohibit alienation of

dispositions

5 years from delivery to the State (Art. 1014) To claim property escheated to the State

5 years from the time disqualified person took Action for declaration of incapacity & for recovery of
possession (Art. 1040) the inheritance, devise or legacy

30 days from issuance of order of distribution (Art. Must signify acceptance/repudiation otherwise,
1057) deemed accepted

1 month form written notice of sale (Art. 1088) Right to repurchase hereditary rights sold to a stranger
by a co-heir

10 years (Art. 1094) To enforce warranty of title/quality of property

adjudicated to co-heir from the time right of action
accrues

5 years from partition (Art. 1095) To enforce warranty of solvency of debtor of the estate
at the time partition is made

4 years from partition (Art. 1100) Action for rescission of partition on account of lesion

--end of topic--

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VIII. OBLIGATIONS AND CONTRACTS A. OBLIGATIONS

1. CIVIL AND NATURAL

TOPIC OUTLINE UNDER THE SYLLABUS
OBLIGATIONS
A. OBLIGATIONS
a) Civil Obligations
1. Civil and Natural Obligations
2. General Provisions
3. Nature and Effect of Obligations Definition
4. Different Kinds of Obligations Obligations are civil or natural. Civil obligations give
5. Extinguishment of Obligations a right of action to compel their performance.
(Art.1423, CIVIL CODE)
B. CONTRACTS
Obligations which give to the creditor or oblige a
1. Essential Requisites of Contract
right of action in courts of justice to enforce their
a. Consent
b. Object performance are known as civil obligations.
c. Cause [HECTOR DE LEON, OBLIGATIONS AND
2. Principles of Contracts CONTRACTS 2 (2019)]
a. Obligatory Force
b. Autonomy Civil obligations distinguished from natural
c. Relativity obligations
d. Consensuality CIVIL OBLIGATIONS NATURAL
e. Mutuality OBLIGATIONS
3. Real vs Consensual Contracts; Forms, Civil obligations arise Natural obligations are
Reformation, and Interpretation from law, contract, based on equity and
4. Defective Contracts quasi-contracts, natural law (Art. 1423,
a. Rescissible delicts (crimes) and CIVIL CODE)
b. Voidable quasi-delicts (Art.
c. Unenforceable 1157, CIVIL CODE)
d. Void Civil obligations give a Natural obligations do
right of action in courts not grant such right of
C. ESTOPPEL of justice to compel action to enforce their
their performance (Art. performance.
1156, CIVIL CODE)
[HECTOR DE LEON, OBLIGATIONS AND
CONTRACTS 824 (2019)]

b) Natural Obligations

Natural obligations, not being based on positive law

but on equity and natural law, do not grant a right of
action to enforce their performance, but after
voluntary fulfillment by the obligor, they authorize
the retention of what has been delivered or rendered
by reason thereof. (Art. 1243, CIVIL CODE)

When a right of action to sue upon a civil obligation

has lapsed by extinctive prescription, the obligor
who voluntarily performs the contract cannot
recover what he has delivered or the value of the
service he has rendered. (Art. 1424, CIVIL CODE)

Examples of natural obligations enumerated under

the Civil Code:
1. Performance after the civil obligation has
prescribed
2. Reimbursement of a third person for a debt
that has prescribed

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3. Restitution by minor after annulment of 1. Form – in formal contracts where form is

contract necessary for validity, e.g., donation
4. Delivery by minor of money or fungible 2. Delivery or Tradition – in real contracts
thing in fulfillment of obligation where delivery is necessary for perfection
5. Performance after action to enforce civil of the obligation, e.g., pledge, deposit,
obligation has failed commodatum, loan. [(ERNESTO L.
6. Payment by heir of debt exceeding value of PINEDA, OBLIGATIONS AND
property inherited CONTRACTS 412 (2009)])
7. Delivery of legacy after will has been
declared void. (Art. 1423-1430, CIVIL c) Sources of Obligations
CODE)
Obligations arise from: (L-CQAQ)
2. GENERAL PROVISIONS 1. Law;
2. Contracts;
a) Definition 3. Quasi-contracts;
4. Acts or omissions punished by law (delicts
An obligation is a juridical necessity to give, to do or or crimes); and
not to do. (Art. 1156, CIVIL CODE) 5. Quasi-delicts (Art. 1157, CIVIL CODE)

b) Essential Elements of an Note: The list is exclusive. (Sagrado Orden v.

Obligations (PAVO) Nacoco, G.R. No. L-37756, 1952)

1. Passive Subject (obligor/debtor) – the LAW (OBLIGATION EX LEGE)

person who has the duty of giving, doing or Law is both the ultimate source of all obligations and
not doing; person bound to the fulfillment one of the various proximate sources of obligations.
2. Active Subject (obligee/creditor) – the Many obligations arise directly or proximately from
person in whose favor the obligation is law, without any contractual transaction or tortious
constituted; person entitled to make a or criminal act, or any conduct which may constitute
demand a quasi-contract. [RUBEN F. BALANE, JOTTINGS
3. Vinculum Juris/ Legal Tie – the efficient AND JURISPRUDENCE IN CIVIL LAW
cause or the juridical tie between two (OBLIGATIONS AND CONTRACTS) 21 (2020)]
subjects by reason of which the debtor is
bound in favor of the creditor to perform the It must be expressly or impliedly set forth and cannot
obligation. It can be established by various be presumed. Only those expressly determined in
sources of obligations (law, contract, quasi- the code or in special laws are demandable. (Art.
contracts, delicts, and quasi-delicts) and 1158, CIVIL CODE)
may arise either from bilateral or unilateral
acts of persons. Examples: The legal obligation to pay taxes (Tax
4. Object/ Subject Matter – the prestation or Code). The legal obligation to pay support (Family
conduct which has to be observed by the Code). The legal obligation to pay holiday pay
debtor/obligor; to be valid, it must be: (Labor Code).
(LiPoDeM):
(1) Licit CONTRACTS (OBLIGATIONS EX CONTRACTU)
(2) Real or Possible A contract is a meeting of minds between two
(3) Determinate/Determinable persons whereby one binds himself, with respect to
(4) Must be within the commerce of the other, to give something or to render some
men (i.e. susceptible of service. It is the formal expression by the parties of
appropriation and transmissible their rights and obligations they have agreed upon
from one person to another) with respect to each other [HECTOR S. DE LEON &
[(DESIDERIO P. JURADO, HECTOR M. DE LEON, JR., COMMENTS AND
COMMENTS AND CASES ON OBLIGATIONS AND CONTRACTS 13
JURISPRUDENCE ON (2014)].
OBLIGATIONS AND
CONTRACTS 457 (2010)]) Obligations arising from contracts have the force
and effect of law between the parties and should be
In certain kinds of obligations, the following may complied with in good faith. (Art. 1159, CIVIL CODE)
constitute additional requirements:

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QUASI-CONTRACTS (OBLIGATIONS EX QUASI- Note: Death of the accused during the pendency of
CONTRACTU) the case can extinguish the civil liability if the same
arose directly from the crime committed. However,
Definition this does not apply if civil liability can be based on
Quasi-contracts are juridical relations resulting from another source of obligation (i.e., law on human
lawful, voluntary and unilateral acts, which has for relations). (Asilo, Jr. v. People, G.R. Nos. 159017-
its purpose, the payment of indemnity to the end that 18 & 159059, 2011)
no one shall be unjustly enriched or benefited at the
expense of another. (Art. 2142, CIVIL CODE) The QUASI-DELICTS/TORTS (OBLIGATION EX
two basic kinds are negotiorum gestio (unauthorized QUASI-DELICTO OR EX QUASI MALEFICIO)
management) and solutio indebiti (payment by It is an act or omission arising from fault or
mistake). negligence, which causes damage to another, there
being no pre-existing contractual relations between
DELICTS (OBLIGATION EX MALEFICIO OR EX the parties. (Art. 2176, CIVIL CODE)
DELICTO)
Every person criminally liable for a felony is also Elements: (ADD)
civilly liable. (Art. 100, RPC) 1. That there exists a wrongful Act or omission
imputable to the defendant by reason of his
Such civil liability is a necessary consequence of fault or negligence;
criminal responsibility, and is to be declared and 2. That there exists a Damage or injury, which
generally enforced in the criminal proceeding must be proved by the person claiming
EXCEPT where: recovery;
1. the civil action was filed ahead of the 3. That there must be a Direct causal
criminal action or connection or a relation of cause and effect
2. the injured party reserves his right to file a between the fault or negligence and the
separate civil action or damage or injury; or that the fault or
3. in cases where an independent civil action negligence be the cause of the damage or
is allowed by law (Art. 33, CIVIL CODE; injury. (Art. 2176, CIVIL CODE; Taylor v.
Rule 110, § 1, RULES OF CRIMINAL Manila Electric Co., G.R. No. L4977, 1910)
PROCEDURE).
What is negligence?
Scope of Civil Liability Failure to observe for the protection of the interests
1. Restitution of another person, that degree of care, precaution
2. Reparation for damage caused and vigilance, which the circumstances justly
3. Indemnity for consequential damages (Art. demand, whereby such other person suffers injury.
104, RPC). (US v. Barias, G.R. No. L-7567, 1908)

What is the effect of acquittal in a criminal case? What is the Test of Negligence?
General Rule: The acquittal of the accused in the “Would a prudent man, in the position of the person
criminal case due to the prosecution’s failure to to whom negligence is attributed, foresee harm to
prove guilt beyond reasonable doubt does not the person injured as a reasonable consequence of
prejudice the civil action, in which the offended party the course about to be pursued?” (Picart v. Smith,
may still be able to recover damages by a mere G.R. No. L-12219, 1918).
preponderance of evidence. (Art. 29, CIVIL CODE)
Quasi-delict as a cause of action despite a pre-
Exception: Where the judgment of acquittal existing contractual relation
contained a declaration that no negligence can be General Rule: Actions based on breach of contract
attributed to the accused and that the fact from and actions based on quasi-delicts differ in terms of
which the civil action might arise did not exist conditions, defenses, and proof. They cannot co-
(Castillo v. CA, G.R. No. 48541, 1989). exist. (Orient Freight v. Keihin, G.R. No. 191937,
2017)
Extinguishment of liability
The civil liability for crimes is extinguished by the Exceptions:
same causes provided by the Civil Code for the 1. When such a contractual relation exists, the
extinguishment of other obligations. (Rule 4, § 4, obligor may break the contract that the
RULES OF CIVIL PROCEDURE) same act which constitutes a breach of the
contract would have constituted the source
of an extra-contractual obligation, had no

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contract existed between the parties d. To deliver accessions and accessories

(Cangco v. Manila Railroad Co., G.R. No. (Art. 1166, CIVIL CODE)
L-12191, 1918);
2. The act that breaks the contract may also Accessions – incorporated or
be a tort. (Air France v. Carrascoso, G.R. attached to the object to form part of
No. L-21438, 1966) the principal.
Accessories – added for completion,
Note: When the obligation is based on a contract, embellishment or enjoyment.
without which the obligation does not exist, the
cause of action must be founded on the breach of 2. To give a generic thing (Art. 1246 & 1170, CIVIL
contract and cannot be based on quasi-delict CODE)
(Philippine School of Business v. Court of Appeals, a. To deliver the thing of the quality
G.R. No. 84698, 1992). In Air France, what was intended by the parties, taking into
punished was the company’s racist policy which consideration the purpose of the
emboldened the manager to expel the Filipino from obligation, intent of the parties, and
first class because a white man had a better right to other circumstances. (Art. 146, CIVIL
the seat. CODE)
b. To pay damages in case of breach of
Air France would apply if the act which breaches a the obligation. (Art. 1170, CIVIL
contract was done in bad faith and amounts to a CODE)
violation of Article 21 of the Civil Code.
b) Obligation to Do or Not to Do
3. NATURE AND EFFECTS OF
OBLIGATIONS What are the rights of a Creditor in an Obligation
To Do or Not To Do
What are the two kinds of obligations? 1. To Do (Positive Personal)
1. Real obligation – obligation to give 1. The obligee is entitled to have the thing
2. Personal obligation – obligation to do or not done in a proper manner, by himself or
to do by a third person, at the expense of the
obligor;
a) Obligation to Give 2. To demand what has been poorly done
be undone;
What are the duties of a Debtor in an Obligation 3. To recover damages because of
To Give? breach of the obligation. (Art. 1167,
1. To give a determinate thing (Arts. 1163, 1164 & CIVIL CODE)
1166, CIVIL CODE)
a. To deliver the thing itself; (Art. 1163, 2. Not to do (Negative Personal)
CIVIL CODE) 1. To have the thing undone at the
b. To preserve or take care of the thing expense of the obligor; and/or
due with the diligence of a good father 2. To ask for damages. (Art. 1168, CIVIL
CODE)
of a family (i.e., that standard of care
which an owner would give to his own
property), unless the law requires or Personal Right distinguished from Real Right
the parties agree otherwise; (Art. 1163, PERSONAL RIGHT REAL RIGHT
CIVIL CODE) Jus ad rem, a right Jus in re, a right
enforceable only enforceable against
The law or contractual stipulation may against a definite the whole world
require a different degree of diligence: person or group of
greater or extraordinary diligence (diligentia persons
exactissima), or less or slight diligence Right pertaining to a Right pertaining to a
(diligentia levissima). [RUBEN F. BALANE, person to demand person over a specific
OBLIGATIONS AND CONTRACTS 63 from another, as a thing, without a
(2020)] definite passive definite passive
subject, the fulfillment subject against whom
c. To deliver fruits, whether civil, of the prestation to the right may be
industrial, or natural fruits (obligor is give, to do or not to do. personally enforced
liable for fruits only from the time the [ERNESTO L. PINEDA, OBLIGATIONS AND
obligation to deliver arises); and CONTRACTS 15 (2009)]

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Note: The creditor has a right to the fruits of the Exception: Regarding fruits and interests in
thing from the time the obligation to deliver it arises. reciprocal obligations (even if the two reciprocal
However, he shall acquire no real right over it until obligations are not of the same value), the parties
the same has been delivered to him. (Art. 1164, are deemed as mutually compensated during the
CIVIL CODE) pendency of the condition.

Note: Nature of creditor’s right to fruits before Thus, there is no liability to account for fruits and
delivery interests in reciprocal obligations. For unilateral
obligations, the debtor shall appropriate the fruits
In accordance with the second sentence of the and interests received, unless it was intended
article, before the fruits are delivered to him, the otherwise.
creditor’s right to the fruits (in cases where he is
entitled to him) is purely personal (i.e. exclusively 3. Obligations subject to a Resolutory
against the debtor, his successors, or assigns). Condition/Period: No obligation to
Rule: No real right of ownership or possession deliver fruits since performance or
enforceable against the whole world arises in his delivery is immediate, subject to its
favor until delivery. It is not by agreement alone, but extinguishment upon the happening of
by delivery (or tradition) that ownership is the condition/period. (Art. 1187, CIVIL
transferred. [RUBEN F. BALANE, OBLIGATIONS CODE)
AND CONTRACTS 66 (2020))
c) Breaches of Obligations
3. Transmissibility of Obligations
Causes of Breach
What is the rule on the transmissibility of 1. Incidental Fraud (Dolo incidente)
obligations? 2. Negligence (Culpa)
General Rule: All rights acquired in virtue of an 3. Default / Delay (Mora)
obligation are generally transmissible. (Art. 1178, 4. Contravention of Terms (Art. 1170,
CIVIL CODE) CIVIL CODE)

Exception: Rights acquired in virtue of an obligation There is breach when the obligor fails without legal
are NOT transmissible when: excuse to perform any promise, which forms the
1. Prohibited by law – Examples: whole or part of an obligation. (Guanio v. Makati
a. Contract of partnership (Art. 1767, ShangriLa and Resort, Inc., G.R. No. 190601, 2011;
CIVIL CODE) R.S. Tomas Inc. v. Rizal Cement Co. Inc., G.R.
b. Contract of agency (Art. 1868, CIVIL No.173155, 2012)
CODE)
c. Contract of commodatum (Art. 1933, INCIDENTAL FRAUD (DOLO INCIDENTE)
CIVIL CODE) Fraud is the deliberate or intentional evasion of the
2. Prohibited by stipulation of the parties, as long normal fulfillment of an obligation. (8 Manresa, 5th
as it is not contrary to public policy. Ed., Book, 1, 72)
3. The obligation is purely personal in nature —
when the obligor’s personal qualifications and Types of Fraud
skill was the motive behind the contract. INCIDENTAL CAUSAL
(Dolo Incidente; (Dolo Causante;
4. Performance of Obligations ART.1170) ART.1338)
Present during the Present before or
The obligation arises: performance of a simultaneously with
1. Pure obligation: Upon demand (Art. preexisting obligation. the perfection of a
1179, CIVIL CODE) contract.
2. Obligations with Suspensive Purpose is to evade Purpose is to secure
Condition/Period the normal fulfillment the consent of another
of the obligation. to enter into the
General Rule: Only from the time the contract.
condition/period is fulfilled, but the obligation Results in the breach Results in vitiation of
retroacts to the day of its constitution. (Art. 1187, of an obligation. consent; voidable
CIVIL CODE) contract.

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The obligee may sue The innocent party What are some instances where the law requires
for specific may annul the a higher standard of care?
performance or (voidable) contract. 1. Banks -- as a business affected with public
rescission, with interest, and because of the nature of its
damages in either functions, banks are under obligation to
case. treat the accounts of its depositors with
[DESIDERIO P. JURADO, COMMENTS AND meticulous care, always having in mind the
JURISPRUDENCE ON OBLIGATIONS AND fiduciary nature of their relationship. (Simex
CONTRACTS 63 (2010)] v. CA, G.R. No. 88013, 1990)
2. Realty Corporations -- A corporation
Note: Future fraud CANNOT be waived. However, engaged in the buying and selling of real
fraud that has happened in the past may be waived estate is expected to exercise a higher
(this is basically forgiveness). Note: Christian standard of care and diligence in
forgiveness is legal and allowed. (Art. 1171, CIVIL ascertaining the status and condition of the
CODE) property subject of its business transaction.
Similar to investment and financing
NEGLIGENCE (CULPA) corporations, it cannot simply rely on the
Any voluntary act or omission, there being no malice “mirror doctrine” or a mere examination of
which prevents the normal fulfillment of an a Torrens certificate on its face to
obligation. [DE LEON, 58 (2014)] determine what the subject property looks
like, as its condition is not apparent in the
Consists in the omission of that diligence which is document. (Eagle Realty Corp. v. Republic,
required by the nature of the obligation and G.R. No. 151424, 2009)
corresponds with the circumstances of the persons, 3. Common Carriers – from the nature of
of the time and of the place (Art. 1173, CIVIL CODE) their business and for reasons of public
policy, common carriers are bound to
What are the kinds of negligence? observe extraordinary diligence in the
1. Civil Negligence (Culpa aquiliana or Tort or vigilance over the goods and for the safety
Quasi-Delict) – negligence committed of the passengers transported by them,
independent of a contract according to all the circumstances of each
2. Contractual Negligence (Culpa Contractual) case. (Art. 1733, CIVIL CODE)
– there is a contract and negligence resulted in
breach of the contract In tort or quasi-delict (civil negligence), what is
3. Criminal Negligence (Culpa Criminal) – the legal effect if the plaintiff is the proximate
negligence considered as a criminal act or cause of the damage or injury?
omission The plaintiff cannot recover any damages. The
defendant wins. Case dismissed. (Art.2179, CIVIL
What are the rules on Standard of Care? CODE)
1. That which the law requires; or
2. That stipulated by the parties; or In tort or quasi-delict (civil negligence), what is
3. In the absence of the above, diligence of a good the legal effect if the plaintiff is not the proximate
father of a family. (Art. 1163, CIVIL CODE) cause of the damage or injury but is guilty of
contributory negligence?
Diligence of a good father of a family – The plaintiff may still recover damages. But the
ordinary care or that diligence which an average or award of damages will be reduced or mitigated.
reasonably prudent person would exercise over his
own property [DE LEON 34 (2014)] LEGAL DELAY OR DEFAULT (MORA)

What is the standard of care applicable to a Will ordinary delay or being late in the
disabled person? performance of an obligation place the
A disabled person is required to use the same obligor/debtor in legal delay or default (mora)?
degree of care that a reasonably careful person No. As a general rule, a mere ordinary delay or
having the same disability would use. Physical being late in the performance of an obligation will not
handicaps are treated as part of the circumstances place the obligor/debtor in legal default or mora. The
under which a reasonable person must act. Thus, general rule is that those who are obliged to deliver
the standard of conduct for a blind person becomes or to do something incur in delay only from the time
that of a reasonable person who is blind. (Francisco the obligee judicially or extrajudicially demands from
v. Chemical Bulk Carriers, Incorporated, G.R. No. them the fulfillment of their obligation. (Art. 1169,
193577, 2011) CIVIL CODE)

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REQUISITES TO BE IN DELAY: 2. The making of a wedding dress where

1. Obligation is Demandable the wedding is scheduled at a certain
2. Debtor Delays performance time;
3. Creditor Demands performance 3. The delivery of a car to be used in a trip
judicially or extrajudicially at a particular time. [DE LEON 47
(2019)]
If the period for the fulfillment of the obligation is
fixed, demand by the obligee is still necessary 3. Demand would be Useless (Art. 1169,
before the obligor can be considered in default and CIVIL CODE)
before a cause of action for rescission will accrue.
(Solar Harvest v. Davao Corrugated Carton Example:
Corporation, G.R. No. 176868, 2010) S obliged himself to deliver a specific horse
to B on December 5. Because of S’s
The use of a credit card to pay for a purchase is only negligence, the horse died on December 2.
an offer to the credit card company to enter a loan
agreement with the credit card holder. Before the In this situation, any demand for delivery of
credit card issuer accepts this offer, no obligation the horse on December 5 would be useless
relating to the loan agreement exists between them. as S has made it impossible for him to
A demand presupposes the existence of an perform his obligation.
obligation between the parties. (Pantaleon v.
American Express International, Inc., G.R. No. 4. Reciprocal Obligations
174269, 2009)
In reciprocal obligations, a party does not incur
What are the exceptions when demand is not in delay if the other party is not ready or willing
necessary to put the obligor/debtor in legal to assume and perform the obligation imposed
delay or default (mora)? upon him/her (Art. 1169, CIVIL CODE)
1. Law or obligation expressly provides:
Note:
Examples: a. A reminder is not equivalent to a demand.
b. Premature demand does not give rise to default.
When the obligation so provides: c. If there is no fixed due date, or when the debtor
D promised to pay C the sum of P20,000.00 promises to pay when his means permit him to
on or before November 30 without need of do so, there can be no default unless a period
demand. Therefore, if D fails to pay on or term is fixed by the court.
November 30, he is automatically in
default. In this case, the parties stipulate to
What are the kinds of delay?
dispense with the demand. [DE LEON 46
1. Mora Solvendi --- delay or default committed
(2019)]
by obligor
2. Mora Accipiendi --- delay or default committed
When the law so provides:
by oblige
Under the law, taxes should be paid on or
3. Compensatio Morae --- default of both obligor
before a specific date; otherwise, penalties
and obligee [JURADO 457 (2010)]
and surcharges are imposed without the
need of demand for payment by the
government. CONTRAVENTION OF THE TENOR OF THE
OBLIGATION
The partner is liable for the fruits of the thing This refers to failure to comply with the terms of the
he may have promised to contribute to the obligation, and will require dolo, culpa or delay as
partnership from the time they should have the cause of the failure to comply, in order to
been delivered without the need of any constitute a breach. [Art. 1170, CIVIL CODE;
demand. [DE LEON 47 (2019)] JURADO, 74 (2010)]

2. Time is of the essence FORTUITOUS EVENTS

What constitutes a fortuitous event? (NIIUC)
1. Event must be Independent of obligor’s will;
Examples:
2. Event is Unforeseeable or unavoidable
1. The delivery of balloons on a particular
3. Such event renders it Impossible for the debtor
date when a children’s party will be
to perform (not only makes it difficult, but
held;
impossible) the obligation in a normal manner

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4. No human participation or intervention The Christmas season cannot be cited as an act of

5. No contributory negligence (Lasam v. Smith, God that would excuse a delay in the processing of
G.R. No. L-19495, 1924) claims by a government entity that is subject to
routine accounting and auditing rules. (MIAA v. ALA
What is the effect of a fortuitous event? Industries Corp, G.R. No. 147349, 2004)
General Rule: Loss due to fortuitous events shall
extinguish the obligation (Art. 1174, CIVIL CODE) The sudden act of a passenger who stabbed
another passenger in the bus is within the context of
Exceptions: force majeure. But before common carrier may be
1. If by Law the obligor is liable even for fortuitous absolved, it is not enough that the accident was
event caused by force majeure. The common carrier must
2. If by Stipulation the obligor is liable even for still prove that it was not negligent in causing
fortuitous event injuries. (Bachelor Express, Inc. v. CA, G.R. No.
3. If the nature of the obligation requires the 85691, 1990)
Assumption of the risk (Art. 1174, CIVIL CODE)
If obligation is to deliver materials for a fixed period
Example: such as 30 years, fortuitous events occurring within
D insured his house against fire for the period, such as the outbreak of war which took
P500,000.00 with R, an insurance 6 years out of the 30-year period and destroyed
company. Later, the house was destroyed plants, machinery and equipment and prevented the
by accidental fire. obligor from making deliveries, the occurrence of
such a fortuitous event will not extend the period of
Although the cause of the loss is a the contract beyond its fixed period. This is because
fortuitous event, D may recover the amount the obligor was excused from performance during
of the policy. In a contract of insurance, the the period when the fortuitous events prevented it
insurer (R), in consideration of the premium from performing its obligations. (Victorias Planters
paid by the insured (D), undertakes to Association v. Victorias Milling, G.R. No. 6648,
indemnify the latter for the loss of the thing 1955)
insured by reason of the peril insured
against even if the cause of the loss is a A person obliged to perform an obligation is NOT
fortuitous event. Here, risk of loss or the excused from a fortuitous event when the nature of
assumption of risk is an essential element the obligation requires the assumption of risk. In
in the obligation. [DE LEON 78-79 (2019)] other words, it is NOT enough that the event should
not be foreseen or anticipated, but it must be one
that is impossible to foresee or to avoid. (Republic
4. If the loss of the thing occurs after the obligor
incurred in Delay; and v. Luzon Stevedoring, G.R. No. L21749, 1967)
5. If the obligor promised to deliver the same thing
to Two or more persons who do not share the d. Remedies Available to Creditor in Cases of
same interest (Art. 1165, CIVIL CODE) Breach
6. If the thing to be delivered is Generic
7. If the thing lost is the result of a crime. 1. Specific Performance – requiring delivery
or performance of the obligation.
Declaration of martial law, per se, is not a fortuitous
Can be combined with damages, but
event. While a lot of businesses suffered financial
reverses during this period, it could not be used as inconsistent with the remedy of resolution
a defense when sued for collection of debts validly or cancellation. (Magdalena Estate, Inc. v.
Myrick, G.R. No. L-47774, 1941)
incurred. (Philippine Free Press v. CA, G.R. No.
132864, 2005)
Can be pursued alternatively (but not
simultaneously) with resolution or
The Asian Debt Crisis in 1997 is not a fortuitous
cancellation; if initial action is for specific
event. A real estate company engaged in preselling
of condominium units should have been able to performance and obligor does not or
assess foreign exchange risks. The fluctuating cannot deliver, the obligee may pursue
resolution or cancellation. (Art. 1191, CIVIL
movement of the Philippine Peso in the FX market
is a daily occurrence, so Megaworld cannot claim CODE)
fortuitous events as an excuse for non-delivery of
units. (Megaworld Globus Asia Inc. v. Tanseco, G.R. This is NOT a remedy in an obligation “Not to do”
No. 181206, 2009) that has been breached since the prohibited act has
been done. [DE LEON 44 (2014)]

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Is specific performance an available remedy in If breach is only slight, generally courts will
personal obligations involving “obligations to grant additional time for the obligor to pay or
do”? perform and after this additional time, if obligor
No. Specific performance is not an available remedy still does not perform, courts will allow
in personal obligations involving “obligations to do” resolution or cancellation. [(Art. 1191, CIVIL
since judicial power may not be used to compel CODE; Kapisanan Banahaw v. Dejarme, G.R.
someone to do something he does not want to do. No. L32908,1930])
This will be involuntary servitude or “slavery”
prohibited by the Bill of Rights. The remedy Resolution will not be permitted for a slight or
available in personal obligations involving casual breach of a contract, but only for such
“obligations to do” is rescission of contract in Art. breaches as are so substantial and
1191 based on substantial breach (technically fundamental as to defeat the object of the
called “resolution” in the Old Civil Code). parties in entering into the agreement.
[(Multinational v. Ara Security, G.R. No.
What is the remedy in personal obligations 154852, 2004]
involving “obligations not to do” if the
obligor/debtor performs what is not allowed to Note: Rescission (technically called “Resolution”
be done? which is what it was called in the Old Civil Code) is
The remedy is a writ of preliminary mandatory available only if there is substantial breach. It is not
injunction to stop or enjoin the obligor/debtor from available if the breach is minor or slight or casual
doing what he is prohibited from doing and ordering breach.
a third party to undo whatever has been done at the
cost of the obligor/debtor with damages. (Art. 1168, Is judicial approval necessary for rescission or
CIVIL CODE; Rule 58, RULES OF COURT) resolution based on substantial breach in
Art.1191?
2. Damages – can be combined with any remedy No. Judicial approval is not necessary for rescission
or pursued independently – also available in or resolution based on substantial breach. However,
breach of any prestation. (Art. 1191, CIVIL if one party questions the propriety of the rescission
CODE) or resolution, the court may determine its validity or
whether it was proper or not.
3. Substitute Performance – ask others to perform
and charge the cost to the obligor (Arts. 1165- The power to rescind is implied in reciprocal
1168, CIVIL CODE) obligations. In Lam v. Kodak (2016), although there
was no stipulation, the court ruled that since both
Not available in: parties exercised their right to resolve under Art.
1191, judicial rescission is not necessary because
a. Obligation to give specific things (already the power to resolve is implied in reciprocal
set apart from class or genus to which it obligations. (Lam v. Kodak, G.R. No. 167615, 2016;
belongs); (Art. 1165, CIVIL CODE) see discussion on Nissan Car Lease v. Lica
Management, Jan. 13, 2016 under “Void or
b. Obligations not to do; (Art. 1168, CIVIL Inexistent Contracts”)
CODE) and
4. DIFFERENT KINDS OF
c. Obligations to do which are purely OBLIGATIONS
personal in character. [(4 ARTURO M.
TOLENTINO, COMMENTARIES AND Pure Obligations
JURISPRUDENCE ON THE CIVIL CODE
OF THE PHILIPPINES 99-100 (1991)] Definition – It is an unqualified obligation, which is
demandable immediately. Its performance does
Example: Singing, dancing, painting, NOT depend upon a future and uncertain event, or
cooking, hairstyling by someone with past event unknown to the parties. (Art. 1179, CIVIL
exceptional skill or talent CODE)
4. Resolution/Cancellation – implied in Conditional Obligations
reciprocal obligations, but not available if the
breach is slight, unless time is of the essence.
Definition – The performance in conditional
(Biando v. Embestro, G.R. No. L11919, 1959)
obligations depends upon a (1) future AND

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uncertain event, (2) or upon a past event unknown SUSPENSIVE CONDITION

to the parties. (DE LEON 106 (2014)) • The happening of the condition creates the
obligation.
Note: Article 1179 uses the phrase “future ‘or’ • Not demandable at once.
uncertain”; however, the law must be construed as • Gives rise to the existence of an obligation.
using “and” and not “or”. The event must be both For example, in a Contract to Sell, the
future and uncertain. (4 TOLENTINO 144 (1991)) fulfillment of the suspensive condition,
which is the full payment of the purchase
Conditional Obligations may be further classified price, gives rise to the obligation of the
into: seller to convey the title to the prospective
1. Suspensive or resolutory buyer. If the condition was not fulfilled, it
2. Potestative (based on the will of one of the only prevents the obligation of the seller to
parties), Casual (based upon chance or will convey title to arise. (DE LEON 102 (2014))
of 3rd parties), and Mixed (combination of • Also known as “condition precedent”
will of one of the parties + chance and/or • Gives birth to obligations. [DE LEON 106-
will of 3rd persons) 107 & 111-112 (2014)]
3. Possible or impossible
4. Positive or negative What are the rules on fruits in suspensive
5. Divisible or indivisible condition?
6. Conjunctive or alternative 1. In suspensive conditions, the effect of a
7. Express or implied [JURADO 110 (2010)] conditional obligation “to give” retroacts to
the day of the constitution of the obligation.
Note: All combinations are valid, EXCEPT Note: There is a retroactive effect in
conditional obligations which are suspensive and suspensive conditions. However, there is
potestative (solely on the part of the debtor) which no retroactive effect in obligations with a
will result in the obligation being void. suspensive period or term.
2. Nevertheless, when the obligation imposes
Examples: reciprocal prestations, the fruits and
I’ll give you P1,000,000 next month if I decide to run interests during the pendency of the
for the upcoming national elections. suspensive condition shall be deemed to
have been mutually compensated.
Q: D purchased 200 shares of stock of the 3. If the obligation is unilateral, the debtor or
Quezon Colleges, subject to the condition that obligor shall appropriate the fruits and
she would pay for the same as soon as she interests received, unless from the nature
would be able to harvest fish from her fishpond. and circumstances of the obligation it
Is the condition valid? (Trillana vs Quezon should be inferred that the intention of the
College, Inc. G.R. No. L-5003, 1953) person constituting the same is different.
(Art. 1187, CIVIL CODE)
A: No, because this suspensive condition is purely
potestative on her part. (Civil Code of the Philippines Note: Doctrine of constructive fulfillment –
Annotated by Edgardo L. Paras 198-199 (2008)) Condition shall be deemed fulfilled when the obligor
voluntarily prevents fulfillment. (Art. 1186, CIVIL
A provision in a Conditional Deed of Sale stating that CODE)
the vendee shall pay the balance of the purchase
price when he has successfully negotiated and Requisites:
secured a right of way is not a purely potestative 1. Condition is suspensive
condition on the perfection of the contract nor on the 2. Obligor prevents fulfillment of condition
validity of the entire contract or its compliance as 3. Obligor acts voluntarily
contemplated by Art. 1308. Such a condition is
likewise dependent on chance as there is no RESOLUTORY CONDITION
guarantee that the vendee and the third-party 1. Demandable at once
landowners would come to an agreement regarding 2. The right to demand performance
the road right of way, a type of mixed condition immediately exists and the obligation can
expressly allowed under Art. 1182. Where the so- be demanded at once.
called potestative condition is imposed not on the 3. It is also known as “condition subsequent”
birth of the obligation but on its fulfillment, only the 4. The happening of the condition has the
condition is avoided, leaving unaffected the effect of extinguishing an obligation. [DE
obligation itself. (Catungal v. Rodriguez, GR No. LEON 109 & 111-112 (2014)]
146839, 2011)

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In the law on obligations and contracts, what is POSITIVE NEGATIVE

the effect of an illegal or impossible condition? SUSPENSIVE SUSPENSIVE
Both the obligation and the condition are void. Condition Condition should
must be NOT happen
In the law on donations, what is the effect of an Rule fulfilled before before stipulated
illegal or impossible condition? stipulated term
The condition is disregarded. The donation remains term
valid. Effect if Obligation The parties are
Condition arises from released as of
CAUSE LOSS IMPAIRME IMPROVEM is fulfilled fulfillment the date of the
NT ENT before happening of the
Obligor’ Obligor Obligee Obligor has arrival of condition
s Fault to pay may usufructuary the term
damag choose rights only – Parties are The obligation
es resolution i.e., can use it released as of arises from the
or but is not arrival of the time the term
fulfillment, entitled to term. arrives.
with payment, and
damages can remove it Effect if
Condition But Parties
only if it will may be
not cause is not
fulfilled released
damage
Obligee Obligor Deliver in Obligor before the even before
’s Fault release its impaired without right arrival of arrival if it
d state to payment of the term becomes
improvement indubitable
Fortuito Obligor Borne by Inures to the that the
us release the obligee; benefit of the condition will
Events d cannot ask obligee not happen
for
damages Obligations with a Period or Term
or refuse to
accept Definition: Obligations which are demandable on a
impaired “day certain”.
object
“Day certain” refers to either:
Condition coupled with a Term A future AND certain event; or
The condition that some event will not happen at a Pay when able, or when debtor promises to
determinate time, shall render the obligation pay when “his means permit him to do so”
effective from the moment (1) the time indicated has is considered an obligation with a period
elapsed, or (2) if it has become evident that the which will be fixed by the court, taking into
event cannot occur. (Art. 1185, CIVIL CODE) account the intention of the parties.
[PINEDA 129 (2009)]
Otherwise, generally, a party must wait for the
condition to be fulfilled, until it becomes certain that If the contract stipulates that “the project is
condition (1) cannot be fulfilled (parties are estimated to be completed in 6 years,” failure to
released), or (2) may be deemed fulfilled at such finish the project in 6 years does not put the obligor
time as the parties contemplated, bearing in mind in delay. Mere estimate cannot be considered a
the nature of the obligation. (Art. 1185, CIVIL period or a day certain. (Salonte v. COA, et al., G.R.
CODE) No. 207348, 2014)

May also be further classified into:

a) Suspensive - obligation is suspended until
arrival of the period; or
b) Resolutory - obligation is immediate but
terminates upon arrival of the period. [DE LEON
194 (2014)]

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4) If the debtor Binds himself when his means

Who is granted the benefit of the period or term? permit him to do so (Art. 1180, CIVIL CODE)
Both parties. [Art. 1196, CIVIL CODE; DE LEON 5) If no period for the Lease has been set,
197 (2014)] applicable in specific cases depending on the
length of the lessee’s stay in the premises (Art.
Significance of the Period: 1687, CIVIL CODE)
Obligor cannot be compelled to pay or
perform before the arrival of the period Note: Art. 1197 is only applicable when there is
Obligee cannot compel payment or absence of any period fixed by the parties. A period
performance or term cannot be set arbitrarily by the courts.

Note: Both parties can waive the benefit of the Two-step process to determine if the court may
period. fix the period
1) Determine that the obligation does not fix a
What are instances when the debtor/obligor may period (or the period is made to depend upon
lose the benefit of the period? (FAt-VISA): the will of debtor), but from the nature and
1) Debtor becomes Insolvent (when his assets are circumstances, it can be inferred that a period
less than his liabilities) AFTER the debt has was intended
been contracted 2) Decide what period was probably contemplated
by the parties. (Gregorio Araneta, Inc. v. The
Exception: When he gives security for the Philippine Sugar Estates Dev. Co., G.R. No. L-
obligation 22558, 1967)

2) Failure to deliver the security promised; Alternative Facultative Obligations

3) When Security established but is later impaired Alternative Obligations

(through fault of debtor) or totally lost (due to Initially, the obligation is indeterminate and
fault of debtor or fortuitous events). becomes determinate upon making of choice and
notification. [DE LEON 217 (2014)]
Exception: Debtor provides another
security of equal value; Who has the right of choice?
General Rule: The right to make a choice is with the
4) Violation of any undertaking on the basis of debtor/obligor, subject to the rule that he cannot
which the period was granted; choose the impossible, unlawful or could not have
been the object of the obligation. [DE LEON 218
5) Debtor Attempts to abscond (mere attempt is (2014)]
sufficient); and
Exception: By contrary stipulation, the
6) When there is an Acceleration clause right to make a choice may be given to the
creditor/obligee or to a 3rd person, subject
Applies to obligations payable in installments or also to the rule that he CANNOT choose
based on amortization schedule, where stipulation the:
says that failure to pay one or some installments or i) Impossible
amortizations will entitle creditor to accelerate ii) Unlawful
payment – i.e., to call for the payment on the entire iii) Could not have been the object of the
remaining unpaid obligation. (Art. 1198, CIVIL obligation. (DE LEON 218 (2014))
CODE)
When Choice is Effective – from notification.
When are the courts allowed to fix the period? 1) Debtor’s Choice: when the creditor
(ID-JBL) receives notice
1) If the obligation does NOT fix a period, but from 2) Creditor’s Choice: when the debtor
its nature and circumstances it can be Inferred receives notice
that a period was intended by the parties (Art. 3) 3rd Person’s Choice: when both the debtor
1197, CIVIL CODE) and creditor receive notice (Art. 1200,
2) If the duration of the period Depends upon the CIVIL CODE; DE LEON 218 (2014))
will of the debtor (Art. 1197, CIVIL CODE)
3) In case of reciprocal obligations, when there is Note: There is no form required for the notice. It may
a Just cause for fixing a period (Art. 1191, CIVIL be oral or written, express or implied (as when
CODE) debtor delivers one of the choices and creditor

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accepts). Mere notice is required, not consent. Once any of the

choice is made and communicated, it becomes remaining
irrevocable, and converted to a pure or simple objects
obligation. [JURADO 169 (2010)] Fortuitous The creditor Obligation is
Event may choose extinguished
If the party who has the right to make the choice any of the
does not make it or delays, the right does not pass remaining
to the other party – action is specific performance to objects; if only
compel the party who has the right of choice to make 1 is left – the
a choice. obligation
becomes a
Effect of loss / impossibility of one, some or all pure or simple
prestations obligation
[(JURADO 168 (2010)])
If debtor has right of choice
CAUSE ONE/SOME ALL
Exercise of Creditor is Facultative Obligations
the right of entitled to
Debtor’s choice, debtor damages based What is a facultative obligation?
Act may choose on value of the When only one prestation has been agreed upon,
from last one lost but the obligator may render another in substitution,
remaining the obligation is called facultative. (Art. 1206, Civil
Debtor can Debtor is entitled Code)
choose (a) to resolution or
deliver object cancellation plus What are the differences between an alternative
Creditor’s from damages obligation and facultative obligation?
Act remaining or
(b) resolution Five differences between alternative and
or cancellation facultative obligations
with damages
DIFFERENCE ALTERNATIV FACULTATIV
Debtor may Obligation is S E E
choose from extinguished
As to the Several Only one
remaining
number of prestations prestation is
Fortuitous objects; and if
prestations are due, but due although
Event only 1 left – it
compliance the debtor is
becomes a
with one is allowed to
simple
sufficient substitute
obligation
another
(JURADO 172-173 (2010))
Right of The right of The right to
Choice choice may be make the
Note: When only one object or prestation is left
given to the substitution is
because of a fortuitous event, there is no more
creditor or given only to
choice and the obligation becomes a pure or simple
third person the debtor
obligation. (Art. 1202, CIVIL CODE). If the last
Loss through The loss of The loss of the
object is lost, the obligation is extinguished. [DE
fortuitous one or more of thing due
LEON 221-222 (2014)]
event the extinguishes
alternatives the obligation
If creditor has right of choice through a
CAUSE ONE/SOME ALL fortuitous
Debtor’s Creditor may Creditor entitled event does not
Act choose from to be paid the extinguish the
those price of any of the obligation
remaining, or objects lost, with Loss through The loss of The loss of the
the price of damages fault of one of the thing due
any object, debtor alternatives through his
with damages through the fault makes
Creditor’s The creditor Obligation is fault of the him liable. The
Act may choose extinguished debtor does loss of the

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not render him substitute agent if the principal allowed the agent
liable. Where before the to act as though he had full powers.
the choice substitution (Art. 911, CIVIL CODE)
belongs to the through the c) All partners are solidarily liable with the
creditor, the fault of the partnership for any crime or quasi-
loss of one debtor does delict committed by any partner acting
alternative not render him in the ordinary course of business of
through the liable the partnership or with the authority of
fault of the his co- partners. (Art. 1822-1824,
debtor gives CIVIL CODE)
rise to liability d) If two or more principals appoint an
Nullity of Nullity of a The nullity of agent for a common transaction or
prestation prestation the prestation undertaking, the principals shall be
does not agreed upon solidarily liable to the agent for all the
invalidate the invalidates the consequences of the agency. (Art.
others. The obligation. 1915, CIVIL CODE)
debtor or The debtor is
creditor shall not bound to 3) When the Nature of the obligation requires
choose from choose the solidarity;
among the substitute. 4) When there is a charge, burden or condition
remainder. imposed on a testamentary disposition and
[DE LEON, 210 (2019)] thenotarial or holographic will expressly
makes the charge or condition solidary
Joint and Solidary Obligations (Manresa); and
5) When a court orders that the defendants
Involves multiple parties (more than one (1) debtor shall be solidarily liable in a Final judgment.
or more than one (1) creditor or more than one (1) (Gutierrez v. Gutierrez, G.R. No. 34840,
debtor and creditor). Sep. 23, 1931)

The rights and obligations of both parties may be What are the effects of joint liability?
joint or solidary. It is presumed joint. Solidary 1) Demand on one debtor produces delay
obligation requires either stipulation or law. (Art. only with respect to the share of the debtor
1207, CIVIL CODE) who received the demand.
2) Interruption in payment by one does not
JOINT (DIVISIBLE) OBLIGATIONS benefit or prejudice the other.
3) Each debtor can be held liable only for the
Joint obligation (Obligacion Mancomunada) – payment of his proportionate share of the
The whole obligation is to be paid or fulfilled debt.
proportionately by different debtors or demanded 4) A joint debtor cannot be held liable for the
proportionately by the different creditors. shares of the other debtors.
5) Vice of consent of one joint debtor only
affects his share.
General Rule: The presumption is that an obligation
6) Insolvency or death of one joint debtor does
is always joint. (Art. 1207, CIVIL CODE)
NOT affect the shares of the other joint
debtors.
Exceptions: (FLENT)
1) When the obligation Expressly stipulates
What are the effects of joint credit?
solidarity;
a. Each creditor can demand payment only of
2) When the Law requires solidarity;
his share.
b. A joint creditor cannot represent the other
Examples: joint creditors and collect for them.
a) If two or more heirs take possession of
the estate, they shall be solidarily liable
Note: If there is no agreement or stipulation as to
for the loss or destruction of a thing
the share in the credit or in the debt, the shares in a
devised or bequeathed, even though
only one of them was negligent. (Art. joint obligation are presumed equal.
927, CIVIL CODE)
In a joint obligation/credit, just divide the
b) Even if the agent exceeds his authority,
obligation/credit equally based on the number of
the principal is solidarily liable with the

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debtors and creditors to get the sharing, unless “individually and jointly”. (Ronquillo v. Court of
sharing was stipulated (sharing is presumed equal). Appeals, G.R. No. L-55138, 1984)
(Art. 1208, CIVIL CODE)
Also, use of pronoun “I” in a promissory note
In a joint obligation, each joint debtor is only where several debtors sign denotes solidarity.
responsible for his/her own share and cannot be [PINEDA163-164 (2009); Republic Planters Bank v.
made to pay the shares of others, even those who CA, 216 SCRA 738 (1992)]
are insolvent or who have died; similarly, joint
creditors cannot collect the share of the others. If a solidary debtor pays the obligation in part and is
(Arts. 1207 & 1209, CIVIL CODE) issued a quitclaim, he can recover reimbursement
from the co-debtor only insofar as his payment
JOINT (INDIVISIBLE) OBLIGATIONS exceeded his share in the total obligation. If the
debtor pays less than his share, he cannot demand
If there are 2 or more debtors, the fulfillment of or reimbursement because his payment is less than his
compliance with the indivisible obligation requires actual debt. (Republic Glass Corp. v. Qua, G.R. No.
the concurrence of all the joint debtors, although 144413, Jul. 30, 2004)
each for his share. (Art. 1209, CIVIL CODE) The
obligation can be enforced only by proceeding In a solidary obligation, the solidary debtors can be
against all joint debtors. made to pay the full amount of the obligation
(subject to presentation of available defenses);
If there are 2 or more creditors, the concurrence of similarly, solidary creditors can collect the full
all the joint creditors, although each for his share, is amount of the obligation. (Art. 1216, CIVIL CODE)
also necessary (Art. 1209, CIVIL CODE)
Among solidary debtors and creditors, the solidary
Effect of breach debtor who pays the full amount of the obligation
If one of the joint debtors fails to comply with his can recover reimbursement from the other solidary
undertaking, the obligation can no longer be fulfilled debtors; similarly, the solidary creditor who collects
or performed since it is indivisible. Therefore, the the entire obligation must deliver the share of the
only remedy is a claim for damages. The innocent other solidary creditors. (Art. 1214 &1217, CIVIL
joint debtor shall not contribute to payment of CODE)
damages beyond his corresponding share of the
obligation. (Art.1224, CIVIL CODE) An accommodation party under the law is solidarily
liable based on the Negotiable Instruments Law.
Note: An indivisible obligation involves the (Gonzales v. PCIB, G.R. No. 180257, Feb. 23,
prestation or the object of a contract. A solidary 2011)
obligation involves the rights and obligations of the
parties. An indivisible obligation may or may not be As a rule, corporations are solely liable for their
solidary. In turn, a solidary obligation may or may obligations. The directors or trustees and officers
not be indivisible. are not liable with the corporation even if it is through
their acts that the corporation incurred the
Solidary Obligations obligation. As an exception, directors or trustees
and corporate officers may be solidarily liable with
Solidary obligation (Obligacion Solidaria) the corporation for corporate obligations if they
A solidary obligation must be expressed in a acted “in bad faith or with gross negligence in
stipulation or required by law or by the nature of directing the corporate affairs.” (Oliveras v. Castillo,
obligation. Otherwise, it will be a joint obligation. G.R. No. 196251, Jul. 9, 2014)
(Art. 1207, Civil Code)
Kinds of solidary obligations
What pronouns are used to indicate that the
obligation is a joint obligation or solidary Active Solidarity – solidarity on the part of creditor
obligation? or obligee
A joint obligation uses “we”,“us” or “our”. A solidary
obligation uses “I” or “my”. a) Each creditor represents the others. [DE
LEON 218 (2014)]
Words denoting solidarity include “jointly and b) Credit is divided equally.
severally” (most common); “individually and c) Debtor may pay any of the solidary
collectively”; “severally”; “individually”; “collectively”; creditors. (Art. 1214, CIVIL CODE)
“separately”; “distinctively”, “individually liable” and

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d) Any creditor can collect the full amount of

the obligation. Unless there is an Effect of Legal Delay:
agreement as to which creditor can collect. Any interest that accrues due to legal delay or
Debtor must pay to the creditor who first default on the part of one solidary debtor is borne by
makes a demand. It will be wrong payment all solidary debtors. [4 TOLENTINO 229 (1991)]
if the debtor pays a solidary creditor who
did not make a demand; the debtor can be Defenses – a solidary debtor when sued can raise
made to pay again to the solidary creditor the ff. defenses:
who made the demand. (Art. 1214, CIVIL (a) From the nature of obligation – e.g. the
CODE) obligation is void, has prescribed, or has
e) After a solidary creditor collects the full already been paid – the defense is complete:
amount, the obligation is extinguished. The debtor sued is not liable, and no one is liable;
creditor who received payment must then
deliver the shares of the other solidary (b) Personal to him – may be: (i) complete (debtor
creditors (presumed equal unless there is sued is not liable, but others may be sued and
an agreement or stipulation). [Art. 1215, the amount that may be collected should be less
Civil Code; 4 TOLENTINO 228 (1991)] than the share of the debtor with a personal
defense) e.g., minority, vitiated consent; or (ii)
Effect if one solidary creditor dies: The estate or his partial e.g., non arrival of term or condition –
heirs inherit his rights as a solidary creditor. possible even if solidary-debtor sued is liable for
share of others, less his own share) (4
Passive Solidarity – solidarity on the part of TOLENTINO 250-251 (1991))
debtors or obligors
a) Any debtor can be made to pay the full (c) Those which pertains to the share of his co-
amount of the obligation with the right to debtors – with respect to the share which
recover reimbursement from the other personally belong to others, the debtor may
solidary debtors. (Art. 1216, CIVIL CODE) avail himself thereof only as regards that part of
b) The right of choice on who among the the debt for which the others are responsible.
solidary debtors will be made liable to pay (Art. 1222, CIVIL CODE)
the entire obligation belongs to the creditor.
Once creditor is paid in full, the obligation is
Effect of demand on one solidary debtor: extinguished, and the debtor who pays is entitled to
It will not stop the creditor from going against reimbursement from others, as if joint (based on
another debtor as long as the debt has not been fully agreed sharing or if not, equal). (Art. 1217, CIVIL
paid. (Art. 1216, CIVIL CODE) CODE)
Effect if a solidary debtor dies: When one of the solidary debtors cannot, because
The 2-year period in the Rules of Court that applies of his insolvency, reimburse his share to the debtor
to the estate of a deceased person does not apply paying the obligation, such share shall be borne by
to the other solidary debtors and the creditor may all his co-debtors, in proportion to the debt of each.
collect from them. (Boston v. CA, G.R. No. 173946) (Art. 1217, CIVIL CODE)
Effect if several solidary debtors offer to pay: Difference from joint obligation:
Creditor can choose from any of them, as long as he The share of the insolvent debtor is assumed
does not collect more than the full amount of the proportionately by others, in the meantime.
obligation.
Reimbursement includes interest from date of
payment until actual reimbursement, except if
Effect of Interruption on the Prescriptive solidary debtor pays before maturity – in which case
Period: interest runs only from maturity.
The interruption of the prescriptive period based on Mixed Solidarity – on the part of the obligors and
a written extrajudicial demand served on one obligees, or the part of the debtors and the creditors
solidary debtor interrupts the period as to the other [DE LEON 219 (2014)]
solidary debtors. Similarly, if one solidary creditor
serves a written extrajudicial demand, other solidary Conventional Solidarity – agreed upon by the
creditors are benefited by the interruption of the parties. [DE LEON 219 (2014)]
prescriptive period. [4 TOLENTINO 229 (1991)]

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Legal Solidarity – imposed by law solidary debtors whose liability is independent of

Examples: and separate from the deceased debtor. (Imperial
(a) Obligations arising from tort Insurance, Inc. vs. David, 133 SCRA 317 (1984))
a. The responsibility of two or
more persons who are liable Fault of any debtor: everyone is responsible to
for quasi-delict is solidary. the creditor – price, damage and interest, but the
(Art. 2194, Civil Code) debtor at fault should reimburse those who paid the
(b) Obligations arising from quasi- creditor [DE LEON 240-241 (2014)]
contracts
(c) Legal provisions regarding obligation What are the defenses available to a solidary
of devisees and legatees debtor?
(d) Liability of principals, accomplices, and A solidary debtor may, in actions filed by the
accessories of a felony creditor, avail himself of all defenses which are
(e) Bailees in commodatum (DE LEON derived from the nature of the obligation and of
219-220 (2014)) those which are personal to him, or pertain to his
own share. With respect to those which personally
Effects: No reimbursement if payment is made after belong to the others, he may avail himself thereof
the obligation has prescribed or became illegal. (Art. only as regards that part of the debt for which the
1218, CIVIL CODE) latter are responsible (Art. 1222, CIVIL CODE)
1) Defenses derived from the nature of the
Payment made before debt is due: No interest for obligation
the intervening period may be demanded. (Art. 2) Defenses personal to, or which pertain to
1217, CIVIL CODE) share, of debtor sued
3) Defenses personal to other solidary
Insolvency of one: Other debtors assume the debtors [DE LEON 241-242, (2019)]
share of the insolvent one pro-rata. (Article 1217,
CIVIL CODE) Note: The law clearly provides that the creditor who
may have executed any acts mentioned in Art. 1215
If different terms and conditions: Solidarity may (Novation, Compensation, Merger or Confusion), as
exist although the creditors and the debtors may not well as he or she who collects the debts, shall be
be bound in the same manner and by the same liable to the others for the share in the obligation
periods and conditions. (Art. 1211, CIVIL CODE). corresponding to them. [DE LEON 231 (2014)]

The creditor may bring his action in toto against any Divisible and Indivisible Obligations
of the solidary debtors less the shares of the other
debtors with unexpired terms or unfulfilled What is a divisible obligation?
conditions who are entitled to defenses under Article
1222. [DE LEON 226-227, (2019)]. An obligation that is capable of partial performance.
[(PINEDA 192-193 (2009)])
Upon the expiration of the term or fulfillment of the 1) Execution of certain number of days’ work
condition, the creditor will have the right to demand 2) Expressed by metrical units
the payment of the remainder. (Operators 3) Nature of obligation – susceptible of partial
Incorporated vs. American Biscuit Co., Inc., 154 fulfillment [(DE LEON 250 (2014)])
SCRA 738 (1987)).
What is an indivisible obligation?
Remission made after payment is made: If the One not capable of partial performance.
payment is made first, the remission or waiver is of 1) To give definite things
no effect—there is no more obligation to remit. If 2) Not susceptible of partial performance
remission is made previous to the payment and 3) Provided by law
payment is made, solution indebiti arises. It is 4) Intention of parties [(DE LEON 249, 2014)])
incumbent upon the debtor whose debt is remitted
to prove the priority of the remission to the payment Note: Divisibility or indivisibility of an obligation
to release him from responsibility towards his co- refers to the prestation and not to the thing or object
debtors. [DE LEON 238-239 (2019)] (res) of the obligation. Intention of parties should be
taken into account to determine whether an
Effect of death of co-debtor: In case of death of obligation is divisible or indivisible. [(DE LEON 244,
one of the solidary debtors, the creditor may 2014)]
proceed against the estate of the deceased solidary
debtor alone or against any or all of the surviving

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Obligations with a Penal Clause rate of 6% per annum must be imposed in lieu of the
excessive interest agreed upon by the parties.
Purposes of penalty: (Benavidez v. Salvador, G.R. No. 173331, Dec. 11,
1) to insure the performance of the obligation 2013)
2) to liquidate (compute or determine) the amount
of damages to be awarded in case of breach of Iniquitous or unconscionable stipulations on interest
the principal obligation (compensatory); and rates are void, thus it is as if there was no express
3) in certain cases, to punish the obligor (punitive). contract thereon. Hence, courts may reduce the
[DE LEON 253 (2014)] interest rate as reason and equity demand. (MCMP
Construction v. Monark Equipment Corp., G.R. No.
Penalty as substitute for damages 201001, Nov. 10, 2014)
General Rule: the penalty is fixed by the parties and
takes the place of all damages and interests in case Note: The judicial power to declare interest rates
of breach. (Art. 1226, CIVIL CODE) null and void on the ground that these are iniquitous
or unconscionable has been criticized as a violation
Exceptions: (StiRF) of separation of powers since: (a) the power to fix
1) When by Stipulation of the parties, penalty, IN interest rates and determine monetary policy is
ADDITION to interest, may be collected; granted by the Constitution to the Monetary Board
2) When the debtor is sued for Refusal to pay the and (b) Congress has repealed the Usury Law which
agreed penalty; and now makes usury legal (even if it may be immoral to
3) When debtor is guilty of Fraud. (Art. 1226, CIVIL some people such as divorce or abortion
CODE)
5. EXTINGUISHMENT OBLIGATIONS
Kinds of penalties:
(a) Legal – constituted by law Principal Modes of Extinguishing an Obligation
(b) Conventional – constituted by agreement of (PaL-CoCoCo-No)
the parties 1) Payment or performance
(c) Compensatory – established for the purpose 2) Loss of the thing due
of indemnifying the damages suffered by the 3) Condonation or remission of debt
obligee or creditor in case of breach of the 4) Confusion or merger of rights
obligation 5) Compensation
(d) Punitive – established for the purpose of 6) Novation (Art. 1231, CIVIL CODE)
punishing the obligor or debtor in case of breach
of the obligation Other modes of extinguishment
(e) Subsidiary or alternative- in case of non- Annulment of contract
performance only the penalty is demandable Rescission of contract
(f) Joint or cumulative – both the principal Fulfillment of resolutory condition
undertaking and the penalty may be demanded Extinctive prescription (Art. 1231, CIVIL
(DE LEON 256 (2014)) CODE)
Causes for reduction of penalty Not stated in Article 1231 of the Civil Code:
(a) Partial/irregular performance 1) Death of a party in personal obligations [4
(b) Penalty provided is iniquitous/ TOLENTINO 271 (1991)]
unconscionable (Art. 1229, CIVIL CODE) 2) Mutual Desistance (Saura Import & Export Co.
v. DBP, GR No. L-24968, Apr. 27, 1972)
Although parties may voluntarily agree on any 3) Compromise (Art. 2028, CIVIL CODE)
amount of interest, voluntariness does not make the 4) Impossibility of Fulfillment (Art. 1184, CIVIL
stipulation on interest valid. A 5% per month, or 60% CODE)
per annum, rate of interest is iniquitous, and must 5) Happening of Fortuitous Event (Art. 1165, CIVIL
be struck down. (Menchavez v. Bermudez, G.R. No. CODE)
185368) 6) Arrival of Resolutory Period (Art. 1193, CIVIL
Parties have wide latitude to stipulate any rate of CODE)
interest in view of BSP Circular 905, which a. Payment or Performance
suspended the ceiling on interest effective Jan. 1,
1983. However, whenever interest is
PRINCIPLES APPLICABLE FOR VALID
unconscionable, the courts may declare it illegal.
PAYMENT OR PERFORMANCE
Compounded interest of 5% monthly, being
Identity
iniquitous and unconscionable, is void and
Integrity or completeness
inexistent from the very beginning. Thus, the legal

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Indivisibility [DE LEON 300-301 (2014)] the payment by the third party. (If the creditor
accepts payment, the creditor obviously
PRINCIPLE OF IDENTITY consents.)
With respect to the prestation or the object – the
same thing or the same prestation, in the manner Note: In case the third person has no intention
agreed upon, must be delivered or performed in of being reimbursed, the payment is considered
order to extinguish the obligation. The obligor a donation or gift by the third person (as donor)
cannot compel the obligee to accept a different thing to the debtor/obligor (as donee). Therefore,
or prestation, even if the one offered is more based on the law on donations, the
valuable than the one agreed upon. (Art. 1244, debtor/obligor (as donee) must consent to the
CIVIL CODE) payment or gift by the third person. However,
regardless whether the debtor/obligor consents
With respect to parties – must be made by (or not), the payment will be valid insofar as the
proper party to proper party creditor is concerned and the obligation is
a) Payor/Debtor/Obligor - the one who delivers extinguished. (Arts. 1238, CIVIL CODE)
or performs must be the debtor or anyone
interested in the fulfillment of the obligation. b) Payee/Creditor/Obligee - payment must be
Payment by any other person requires the made only to the creditor or obligee or to any
creditor’s consent (Art. 1236, CIVIL CODE) successor in interest or assignee (since a credit
or receivable is assignable or may be sold) or to
When a 3rd person not interested in the anyone authorized to receive payment (an
fulfillment of the obligation pays/performs – The agent). (Art. 1240, CIVIL CODE)
creditor is not bound to accept payment or
performance by a third person who has no What are the rules if payment is made to a
interest in the fulfillment of the obligation, unless third person?
there is a stipulation to the contrary. Whoever If payment is made to a person who is
pays for another may demand from what the incapacitated, payment is valid only if: (a) the
debtor what he has paid, except it he paid incapacitated person kept the payment or (b)
without the knowledge or against the will of the insofar as the payment benefited him.
debtor, he can recover only insofar as the
payment has been beneficial to the debtor. (Art. If payment is made to a third person, the
1236, CIVIL CODE) payment will be valid insofar as it benefits the
creditor. There is a presumption that payment
What are the rules regarding payment made to the third person benefited the creditor in the
by a third person? following instances:
If payment by a third party is without the a) The third person acquires the creditor’s
knowledge or against the will of the debtor, the rights after the payment.
third party may only get reimbursed to the b) The creditor ratifies the payment to the third
extent that the debtor was benefited by the person. (Art. 1241, CIVIL CODE)
payment (beneficial reimbursement only and no
subrogation). In novation, this is called Note: If payment is made to a third person who
“expromision” where the third party who made has in his possession the evidence of debt (or
payment is now a new creditor (from the point credit) (such as a holder in due course of a
of view of the old debtor). promissory note), the payment shall be valid
and the obligation extinguished. (Art. 1242,
However, if payment by a third party is with the CIVIL CODE)
knowledge or consent of the debtor, the third
party is entitled to full reimbursement plus What are the rules regarding place of
subrogation to the rights of the creditor (e.g., the payment?
third party becomes the new pledgee or 1) In the place designated in the obligation
mortgagee of the debtor). In novation, this is 2) If there is no express stipulation and the
called “delegacion” where the third party who undertaking is to deliver a specific thing –
made payment is now the new at the place where the thing might be at the
creditor/pledgee/mortgagee (from the point of moment the obligation was constituted
view of the old debtor). (Arts. 1236-1237, CIVIL 3) In any other case – the debtor’s domicile
CODE) (not residence) (Art. 1251, CIVIL CODE)

In both cases, whether it is expromision or

delegacion, the creditor must always consent to

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PRINCIPLE OF INTEGRITY the law considers the obligation fully and completely
General Rule: A debt shall not be deemed paid performed.
UNLESS the thing or service of which the obligation
consists of has been completely delivered or What are the rules when payment is made using
rendered, as the case may be. (Art. 1233, CIVIL promissory notes or bills of exchange such as
CODE) checks?
As a general rule, payment using promissory notes
Exceptions: or bills of exchange such as checks do not produce
1) Substantial performance in good faith (Art. the effect of payment and the obligation will remain
1234, CIVIL CODE); outstanding. The two exceptions are: (a) when these
2) Acceptance without protest or objection. have been cashed or (b) when these are impaired
(Estoppel) (Art. 1235, CIVIL CODE); due to the creditor’s fault. (Art. 1249, CIVIL CODE)
3) Divisible obligations. [PINEDA 192-193 (2009)]
Personal checks are NOT legal tender, so creditor
What is substantial performance in good faith? cannot be compelled to accept them (unless such is
If the obligation has been substantially performed in stipulated as the mode of payment). Creditor,
good faith, the obligor may recover as though there however, has the option to accept payment in
had been a strict and complete fulfillment, less checks of any kind. If the creditor accepts the check
damages suffered by the obligee. This is the basis or no prompt objection to the form of payment is
of the rule that if the breach is only slight, the obligee made, there is valid tender of payment and creditor
cannot resolve or cancel the obligation. Generally, can no longer claim later that payment is not in legal
the courts will grant the obligor a certain time to tender. (Pabugais v. Sahijwani, G.R. No. 156846,
make up for the slight breach. The “damages Feb. 23, 2004)
suffered by the obligee” refers to the deficiency
which the obligee is still entitled to collect. [Art. 1234, When payment by check is accepted, it produces
CIVIL CODE; 4 TOLENTINO 277 (1991)] the effect of payment only when the check is cleared
(retroacts to the date the check was deposited) and
Substantial performance is applied only when the the funds are transferred to the account of the
obligor admits breaching the contract after honestly creditor. Stale checks (those not presented for
and faithfully performing all the material elements payment within 6 months from date of issue) do not
thereof except for some technical aspects or produce the effect of payment and debtor can be
deficiency that cause no serious harm to the required to issue a new check or pay in cash since
obligee. (International Hotel Corporation v. Joaquin the obligation is not yet deemed paid. Debtor cannot
Jr., G.R. No. 158361, Apr. 10, 2013) however be liable for interest or penalty and cannot
be declared in default since creditor could have
Requisites of substantial performance in good immediately presented it for payment. Therefore,
faith (GoSTeM): when the check is impaired through the creditor’s
1) Attempt in Good faith to perform without willful fault (i.e., creditor misplaced the check and
or intentional departure someone else encashed it), then the debtor is
2) Deviation is Slight deemed to have paid his obligation without having
3) Omission/Defect is Technical or unimportant to issue a new check or paying in cash. (Evangelista
4) Must not be so Material that the intention of v. Screenex, Inc., G.R. No. 211564, Nov. 20, 2017)
parties is not attained. (International Hotel
Corporation v. Joaquin Jr., G.R. No. 158361, What are the rules when payment is made in
Apr. 10, 2013) coins?
For P1.00, P5.00 and P10.00 coins, tender of
What is acceptance without protest or payment is valid only up to P1,000.00.
objection?
When the obligee accepts the performance, with For P0.01, P0.05, P0.10, and P0.25 coins, tender of
knowledge of incompeteness or irregularity, and payment is valid only up to P100.00. (BSP Circular
WITHOUT expressing any protest or objection, the No. 537, Series of 2006, July 18, 2006)
obligation is deemed fully complied with. This is
estoppel on the part of the obligee. (Art. 1235, CIVIL Payment in foreign currency is allowed, if
CODE) stipulated.
Note: In substantial performance in good faith, the The Uniform Currency Act (1950) was expressly
obligee may recover damages or any deficiency for repealed by R.A. No. 8183 (effective July 5, 1996).
the slight breach. However, in acceptance without Art. 1249 allowing stipulation of payment in foreign
protest, the obligee may not recover damages since currency has been restored. If the agreement has a
stipulation to pay foreign currency in Philippine

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Pesos, the rate of exchange shall be based on the legal rate of 6% per annum for loans and
time of payment. (Union Bank v. Tui, G.R. No. forbearance of money (decrease from 12%
173090, Sep. 7, 2011) to 6% based on BSP Circular 799, effective
July 1, 2013). The legal rate of interest now
What are the rules on extraordinary inflation or is the same for all obligations, including
deflation? judgment obligations not arising from loans,
In cases of extraordinary inflation or deflation, the forbearance of money, goods or credits,
value of the currency at the time the obligation was including those based on torts. (BSP
established should be the basis of payment, unless Circular No. 799, Series of 2013, June 21,
there is stipulation to the contrary. (Art. 1250, CIVIL 2013)
CODE)
Note: In the absence of an express
Inflation (or deflation) rates are determined by stipulation as to the rate of interest that
economic managers (BSP specifically), but whether would govern the parties, the rate of legal
extraordinary, this will require judicial determination. interest for loans or forbearance of any
The Court has ruled that whoever alleges money, goods or credits and the rate
extraordinary inflation must prove it – indicating that allowed in judgments shall no longer be
the courts will determine based on evidence twelve percent (12%) per annum but will
presented. (Citibank v. Sabeniano, G.R. No. now be six percent (6%) per annum
156132, Feb. 6, 2007) effective July 1, 2013. It should be noted,
nonetheless, that the new rate could only
Requisites for the application of Art. 1250 on be applied prospectively and not
extraordinary inflation/deflation (BCA): retroactively. Consequently, the twelve
1) There is an official declaration of extraordinary percent (12%) per annum legal interest
inflation or deflation from the BSP shall apply only until June 30, 2013. Come
2) The obligation is Contractual in nature July 1, 2013 the new rate of six percent
3) The parties expressly Agreed to consider the (6%) per annum shall be the prevailing rate
effects of the extraordinary inflation or deflation. of interest when applicable. (Nacar v.
[DE LEON 311 (2014)); see Equitable PCI Bank Gallery Frames, G.R. No. 189871; See also
v. Sheung Ngor, 541 SCRA 223 (2007)] Lim v. HMRPI, G.R. No. 201483, Aug. 4,
2014)
Note: Inflation or deflation is based on increase or
decrease of purchasing power and not based on c) With stipulation in writing, and the rate
Peso-US Dollar exchange rate. (Singson v. Caltex, has been stipulated – collect the
G.R. No. 137798, Oct. 4, 2000). The rate of stipulated rate of interest, subject to the
inflation/deflation is measured by determining rate of right of the courts to reduce the rate if
increase or decrease of purchasing power from a unconscionable or iniquitous. (State
prior period. It is determined by the amount of basic Investment House, Inc. v. Court of Appeals,
goods (within a basket) that money can buy, as G.R. No. 112590, Jul. 12, 2001)
compared to a prior period. If money can buy P100
of basic goods at a certain prior period, determine 2) By way of penalty (debtor in default)
how much of the same goods can be purchased at a) With penalty clause – substitutes
a later period – this represents the rate of inflation or payment of interest, except if it is clearly
deflation. (Citibank v. Sabeniano, G.R. No. 156132, stipulated that penalty will be paid in
Feb. 6, 2007) addition to interest. (Art. 1226, CIVIL
CODE)
PAYMENT OF INTEREST b) Without penalty clause (even if no
In a contract of loan, ownership of a fungible thing is interest is stipulated) – collect legal rate of
transferred to the borrower. Creditor merely has the interest by way of penalty for default (no
right to an equal amount of the same kind and more distinction, see above). Liability
quality. (Art. 1953, CIVIL CODE) arises only from legal delay or default
(unless demand not necessary, from
What are the rules on payment of interest? extrajudicial or judicial demand). (Eastern
1) For use of money, no default Shipping Lines, Inc. v. Court of Appeals,
a) Stipulation in writing is required – if G.R. No. 97412, Jul. 12, 1994)
none, no interest is collectible (Art. 1956,
CIVIL CODE) Note: No penalty or interest is collectible
b) With stipulation in writing, but the during a grace period because the debtor is
interest rate is not stipulated – interest is

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not in default if he is given time to pay agreement or (b) when the application of
during the grace period. payment is made by the party for whose benefit
a term has been constituted (Art. 1252, CIVIL
3) Compounded interest (interest over CODE)
interest) – applies only if stipulated, or in case
of judicial demand. (Art. 1959 & 2212, CIVIL How is application of payment done?
CODE) 1) The right of choice belongs to the debtor and
the debtor chooses the debt to be paid.
Interest due on the principal amount accruing as 2) If the debtor does not make a choice, the
of judicial demand shall SEPARATELY earn creditor may make the choice by issuing a
legal interest at the prevailing rate prescribed by receipt and the debtor cannot complain unless
the Bangko Sentral ng Pilipinas, from the time there is a cause for invalidating the contract.
of judicial demand UNTIL FULL PAYMENT. 3) If both the debtor and the creditor do not make
(Lara’s Gifts and Decors v. Midtown Industrial, a choice, payment will be applied to the more
G.R. No. 225433, Sep. 20, 2022) onerous debt and if it cannot be determined
which debt is more onerous, then payment will
4) Judgment Debt (Not arising from loans or be applied to all the debts proportionately. (Art.
forbearance of money, such as torts) 1252-1254, CIVIL CODE)

Except in cases where the amount can be What are the rules to determine which debt is
determined with reasonable certainty, the more onerous?
amount of the obligation may be a) A debt with interest is more onerous than a debt
unliquidated and not yet determined upon that has no interest or zero interest.
filing of the case. The liquidation or the b) A debt with a higher interest rate is more
determination of the amount of the onerous than a debt with a lower interest rate.
obligation takes place only from the time c) A debt secured by collateral such as a pledge
judgment is rendered in the first instance. or mortgage is more onerous than an
Thus: unsecured debt.

a) If the amount of the obligation can be Note: If a debt produces interest, there is a
established with reasonable certainty, the presumption that the principal loan has not been
paid until the interest is paid in full first. (Art. 1253,
interest runs from extrajudicial or judicial
demand (default) – [at the discretion of the CIVIL CODE)
court] at the rate of 6% p/a, up to time
How can Art. 1176 and Art. 1253 be harmonized?
decision becomes final and until fully paid.
(Republic v. de Guzman, G.R. No. 175021) Article 1176 provides that: “The receipt of the
b) If the amount of the obligation cannot be principal by the creditor, without reservation with
respect to the interest, shall give rise to the
established with reasonable certainty,
presumption that said interest has been paid.”
interest will run only from the time judgment
is rendered in the first instance at the rate Article 1253 states that: “If the debt produces
6% up to time of payment. (Eastern interest, payment of the principal shall not be
deemed to have been made until the interests have
Shipping Lines, Inc. v. Court of Appeals,
G.R. No. 97412) been covered.” How are these two rebuttable
presumptions reconciled?
APPLICATION OF PAYMENT
Article 1176 should be treated as a general
presumption subject to the more specific
What is application of payment? presumption under Article 1253. Article 1176
The designation of the debt which payment shall be applies when there is doubt as to whether interest is
made out of 2 or more debts owing the same waived because the creditor accepts the payment
creditor. There is only one debtor and one creditor for the principal without reservation with respect to
but there are many debts. (Art. 1252, CIVIL CODE) the interest. Here, the creditor is presumed to have
Requisites (OTD) waived the right to collect interest. Article 1254 has
1) There must be only One debtor and only one no issue on waiver of interest because it is a given
creditor; under this Article that the debt produces interest.
2) Two or more debts of the same kind; and The doubt is on whether the amount received by the
3) All debts must be Due. Exception: There may creditor is payment for the principal or the interest.
be application of payment even if all debts are Article 1253 resolves this doubt by providing a
not yet due if: (a) there is a stipulation or hierarchy: payments shall first be applied to the

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interest; payment shall then be applied to the As in a contract of sale, valuation should be agreed
principal only after the interest has been fully paid. upon by the creditor as buyer, and the debtor as
(Marquez v. Elisan Credit Corporation, G.R. No. seller. It is also subject to the usual warranties of
194642, Apr. 6, 2015) sale. [(4 TOLENTINO 294 (1991)])

Note: Art. 1176 is a disputable presumption or a rule Note: In dacion en pago, the debtor/obligor
of evidence. The presumption may be rebutted or becomes a seller/vendor (who is selling or paying
overturned by evidence to the contrary. If the with property) and the creditor/obligee becomes a
creditor receives payment on the principal without buyer/vendee (who is buying or receiving payment
saying anything about the interest, it is presumed in the form of property).
that the interest has been paid (since a debtor will
want the interest to be paid first to avoid compound Intent is Controlling
interest). This presumption puts the creditor in Like in all contracts, the intention of the parties to the
estoppel. But the creditor can still present evidence dation in payment is paramount and controlling. The
to rebut or overturn the presumption and prove that contractual intention determines whether the
the interest remains unpaid. property subject of the dation will be considered as
the full equivalent of the debt and will therefore
Similarly, Art. 1253 is also a disputable presumption serve as full satisfaction for the debt. “The dation in
or a rule of evidence. This presumption may also be payment extinguishes the obligation to the extent of
rebutted or overturned by evidence to the contrary. the value of the thing delivered, either as agreed
However, this is a different legal presumption. This upon by the parties or as may be proved, unless the
presumption states that no payment will be parties by agreement, express or implied, or by their
presumed to have been applied to the principal loan silence, consider the thing as equivalent to the
unless the interest has been fully paid first. But the obligation, in which case the obligation is totally
creditor can still present evidence to rebut or extinguished.” (Luzon Development Bank v.
overturn the presumption and prove that payments Enriquez, G.R. No. 168646, 2011)
have been applied to the principal loan despite the
fact that the interest remains unpaid. PAYMENT BY CESSION (Art. 1255, Civil Code)

DATION IN PAYMENT (Dacion en pago) What is payment by cession?

The process by which a debtor transfers ALL his
What is dacion en pago? assets which are not subject to execution in favor of
It is a mode of extinguishing an obligation whereby creditors, so that the latter may sell them and apply
the debtor pays a monetary obligation with property. the proceeds to his outstanding obligations. Except
if there is contrary agreement, or as may be
Dation in payment extinguishes the obligation to the provided by law, the obligations are extinguished
extent of the value of the thing delivered, either as only up to the net amount of the proceeds of the
agreed upon by the parties or as may be proved, sale. [(PARAS 417 (2016)])
unless the parties by agreement – express or
implied, or by their silence – consider the thing as Cession or assignment is a special form of payment
equivalent to the obligation, in which case the whereby an insolvent debtor abandons and
obligation is totally extinguished. (Tan Shuy v. surrenders all of his assets and properties for the
Maulawin, G.R. No. 190375, 2012) benefit of his creditors. The assets and properties of
the insolvent debtor will be sold or liquidated into
The contractual intention determines whether the cash and the cash will be used to pay the creditors.
property subject of the dation will be considered as
the full equivalent of the debt and will therefore The debtor may cede or assign his property to his
serve as full satisfaction for the debt. (Luzon Dev creditors in payment of his debts. This cession,
Bank v. Enriquez, G.R. No. 168646, 2011) unless there is stipulation to the contrary, shall only
release the debtor from responsibility for the net
What law will govern dacion en pago? proceeds of the thing assigned. The agreement
The law on sales will apply in case of dacion en pago which, on the effect of the cession, are made
since it partakes of the nature of sale – with the between the debtor and his creditor shall be
creditor purchasing the thing or property of the governed by special laws. (Art. 1255, NCC)
debtor, the payment of which is charged to the
debtor’s obligation. It extinguishes the obligation to What are the requisites for payment by cession?
the extent of the value of the thing delivered. (Tan 1) Insolvency of the debtor;
Shuy v. Maulawin, G.R. No. 190375, 2012) 2) Abandonment of all assets and properties not
exempt from execution;

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3) Acceptance of the cession by the creditors; any payment. (Kapisanan Banahaw, Inc. v.
4) Approval by the court. Dejarme, G.R. No. L-32908, 1930)

What are the assets and properties that may be What are the effects of consignation?
used for payment by cession? Debtor may ask judge to order cancellation
All the assets and properties of the insolvent debtor of obligation
not exempt from execution. The properties that are Running of interest is suspended
exempt from execution are listed in Rule 39 of the Before creditor accepts or before judge
Rules of Court (Civil Procedure). declares consignation has been properly
made, obligation remains (debtor bears risk
Note: Payment by cession is covered by the special of loss; however, after acceptance by the
law called Financial Rehabilitation and Insolvency creditor or after judge declares that
Act (FRIA) which is part of commercial law. consignation has been properly made, risk
of loss is shifted to the creditor) [(PARAS
TENDER OF PAYMENT AND CONSIGNATION 433 (2016)]

What is tender of payment? When Consignation Extinguishes Obligation

The act of offering payment to the creditor with a Consignation is completed at the time the creditor
demand that the creditor accepts the same. accepts the same without objections, OR, if he
[(PARAS 419 (2016)]) objects, at the time the court declares that it has
been validly made in accordance with law. (Dalton
If the creditor refuses without just cause to accept v. FGR Realty and Development Corporation, G.R.
payment, he becomes in mora accipiendi and tender No. 172577, 2005)
alone will not extinguish the obligation; consignation
is needed. (Co v. PNB, G.R. No. L-51767, 1982) b. Loss of the Thing Due or
Impossibility or Difficulty of
What is consignation? Performance
The act of depositing the thing due with the court
whenever the creditor unjustifiably refuses to accept
Can loss of the thing due be partial?
payment, and generally requires prior tender of
Yes. Loss of the thing due may be total or partial
payment. [(RUBEN E. AGPALO, OBLIGATIONS
AND CONTRACTS 185 (2008)] (Arts. 1262 & 1264, CIVIL CODE)

When does loss of thing due happen?

What are the requisites of a valid consignation?
(VUPAS) 1) When the object perishes (physically)
1) Existence of Valid debt; 2) When it goes out of commerce
3) When it disappears in such a way that its
2) Creditor has Unjustifiably refused to accept
payment, i.e., previous valid tender; existence is unknown or it cannot be recovered
3) Prior notice of consignation had been given to (Art. 1189, CIVIL CODE)
the person interested in performance of
What is the effect of loss of the thing due if the
obligation (1st notice) (Art. 1257, CIVIL CODE)
4) Actual deposit/consignation in court obligation involves a specific thing?
5) Subsequent notice of consignation (2nd notice) If loss was due to fortuitous events, obligation is
extinguished; no damages. If the loss is due to the
[(DE LEON 359-360 (2014)]
fault of the debtor or a third person, the guilty person
What are the exceptions when consignation will be liable for damages. [(PARAS 438 (2016)])
may be done without tender of payment?
The creditor absent or unknown or does not What is the effect of loss of the thing due if the
appear at the place of payment obligation involves a generic thing?
The creditor is incapacitated to receive Loss does NOT extinguish an obligation to deliver a
payment at the time it is due generic thing. Genus numguam perit: “Genus never
The creditor refuses to issue a receipt perishes.”
without just cause
There are 2 or more creditors claiming the What is the presumption if the thing is lost
same right to collect while in the possession of the debtor/obligor?
The title of the obligation has been lost General Rule: When the thing is lost while in the
The debtor had previously been notified by possession of the debtor, it is presumed to be due
the creditor that the latter would not accept to the debtor’s fault. Exceptions: fortuitous events

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such as natural calamity, earthquake, flood, storm. increased expenses did not suffice to relieve the
(Art. 1265, CIVIL CODE) debtor from a bad bargain. (Tagaytay Realty v.
Gacutan G.R. No. 160033, 2015)
IMPOSSIBILITY OF PERFORMANCE
1) Physical impossibility – it is not within man’s Article 1267 grants the courts the power of relief, but
capability not of revision. The Courts do not have the authority
2) Legal impossibility – when the prestation is to remake, modify or revise the terms and conditions
prohibited by law of the contract. (Occena v. Hon. Jabson, G.R. No.
L-44349, 1976)
What is the effect on obligations to do if the
prestation becomes physically or legally Art. 1267 is not restricted to obligations to do. The
impossible? term “service” should be understood as referring to
Debtor is released when the prestation becomes the “performance of the obligation”, a phrase which
legally or physically impossible without fault on the encompasses all obligations. (NATELCO v. Court of
part of the debtor. (Art. 1266, CIVIL CODE) Appeals, G.R. No. 107112, 1994)

Note: The obligation must be possible and legal Mere inconvenience, unexpected impediments,
when agreed upon by the parties. The impossibility increased expenses, or even pecuniary inability to
must occur after the constitution of the obligation. fulfill an engagement, will not relieve the obligor from
Otherwise, the obligation is void from the beginning an undertaking that it has knowingly and freely
and there is nothing to be extinguished. [(DE LEON contracted. The closure of respondent's business
364 (2019)]) was neither a fortuitous nor an unforeseen event
that rendered the lease agreement functus officio.
What is rebus sic stantibus? (Sps Poon v. Prime Savings Bank, G.R. No.
When the service has become so difficult as to be 183794, 2016)
manifestly beyond the contemplation of the parties,
the obligor may be released from the obligation, in Courts cannot follow one every step of his life and
whole or in part. (Art. 1267, CIVIL CODE) extricate him from bad bargains, protect him from
unwise investments, relieve him from one-sided
The agreement is valid only if the same conditions contracts, or annul the effects of foolish acts. Courts
prevailing at the time of contracting continue to exist cannot constitute themselves guardians of persons
at the time of performance. Obligor may be released who are not legally incompetent. Courts operate not
in whole or in part if the conditions have changed so because one person has been defeated or
that the obligation becomes manifestly beyond the overcome by another, but because he has been
intention of the parties. [(4 TOLENTINO 336 defeated or overcome illegally. Men may do foolish
(1991)]) things, make ridiculous contracts, use miserable
judgment, and lose money by them — indeed, all
The court is authorized to release the obligor, in they have in the world; but not for that alone can the
whole or in part, when the service has become so law intervene and restore. There must be, in
difficult as to be manifestly beyond the addition, a violation of law, the commission of what
contemplation of the parties. (Art. 1267, CIVIL the law knows as an actionable wrong, before the
CODE; DE LEON 389 (2014)) courts are authorized to lay hold of the situation and
remedy it. (Vales vs. Villa, G.R. 10028, Dec. 16,
Requisites of Rebus Sic Stantibus: (FoDAF) 1916)
1) The event or change could not have been
Foreseen at the time of the execution of the c. Condonation or Remission of
contract Debt
2) The performance is extremely Difficult, but NOT
impossible (because if it is impossible, it is What is condonation or remission of debt?
extinguished by impossibility) An act of liberality by which the creditor renounces
3) The event was not due to the Act of any of the the enforcement of the obligation contracted in his
parties favor. To condone is to forgive or to remit a debt.
4) The contract is for a Future prestation [(4 (Bañez v. Young, L-4635, 1952)
TOLENTINO 347 (1991)])
An act of liberality by virtue of which the obligee,
The difficulty of performance contemplated should without receiving any price or equivalent, renounces
be such that one party would be placed at a the enforcement of the obligation, as a result of
disadvantage by the unforeseen event. Mere which it is extinguished in its entirety or in that part
inconvenience, or unexpected impediments, or

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or aspect of the same to which the remission refers their own right, have become mutual debtors or
(Manresa). In brief, “it is the gratuitous creditors of one another. [JURADO 309 (2010)]
abandonment by the creditor of his right” [4
TOLENTINO 353 (1991)] Requisites (LM-STD):
1) Both parties must be Mutual creditors and
Note: Condonation or remission of debt is a debtors - in their own right and as principals.
donation or gift from the creditor/obligee (donor) to 2) Both debts must consist in Sum of money or if
the debtor/obligor (donee). The gift is the waiver or fungible, of the same kind or quality.
forgiveness of the obligation. Therefore, a 3) Both debts are Due.
condonation or remission must comply with all the 4) Both debts are Liquidated and demandable
requisites for a valid contract of donation (e.g., (determined).
acceptance by the debtor/donee, not inofficious, 5) Neither debt must be retained in a controversy
form of donations). commenced by Third person and
communicated in due to time to the debtor
What are the disputable presumptions when (neither debt is garnished). (Art. 1279, CIVIL
the evidence of debt is in the possession of the CODE)
debtor/obligor?
1) If the evidence of indebtedness is in the Kinds of Compensation
possession of the debtor, it is presumed that it 1) Legal – by operation of law; as long as the 5
was voluntarily delivered. (Art. 1272, CIVIL requisites are present even if unknown to the
CODE) parties; if not equal debts, only up to the
2) If the evidence of debt is in the possession of concurrent amount.
the debtor, it is presumed that the debt has
been condoned. (Art. 1271, CIVIL CODE) Legal compensation takes place by operation of
law when all the requisites are present, as
What is the effect of condonation or remission opposed to conventional subrogation which
on joint obligations and solidary obligations? takes place when the parties agree to
If the obligation is joint, only the share of the joint compensate their mutual obligations even in the
debtor is extinguished. If the obligation is solidary, absence of the 5 requisites.
the entire obligation is extinguished.
2) Conventional – based on agreement of
d. Confusion or Merger of Rights parties, even if the 5 requirements are not
present.
The character of debtor and creditor is merged in the
same person with respect to the same obligation. Conventional compensation takes place when
[JURADO 306 (2010)] the parties agree to compensate their mutual
obligations even in the absence of some
Example: A maker (or debtor) issues a requisites. (Mondragon Personal Sales Inc. v.
promissory note and eventually becomes Sola Jr., G.R. No. 174882, 2013)
the holder (or creditor) of the same
promissory note. The debt represented by 3) Judicial – set off takes place upon order of the
the promissory note is extinguished court; needs pleading and proof; all
because the maker (debtor) and the holder requirements must concur.
(creditor) are now one and the same
person. (Art. 1275, CIVIL CODE) A claim is liquidated when the amount and time
of payment is fixed. If acknowledged by the
What is the effect of confusion or merger of debtor, although not in writing, the claim must
rights on joint obligations? be treated as liquidated. When the defendant,
Confusion does not extinguish a joint obligation, who has an unliquidated claim, sets it up by way
except as regards the share corresponding to the of counterclaim, and a judgment is rendered
creditor or debtor in whom the 2 characters concur. liquidating such claim, it can be compensated
(Art. 1277, CIVIL CODE) against the plaintiff’s claim from the moment it
is liquidated by judgment. Compensation takes
e. Compensation place only if both obligations are liquidated.
(Lao v. Special Plans, Inc., G.R. No. 164791,
A mode of extinguishment up to the concurrent 2010)
amount of the obligation in favor of persons who, in
4) Total – when the 2 debts are the same amount.

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f. Novation
5) Partial –when the 2 debts are not the same
amount. [PARAS 461 (2016)] Novation - Extinguishment of obligation by creating/
substituting a new one in its place
If there is an assignment of credit, can there a) Changing object or principal conditions
still be compensation? b) Substituting person of debtor
1) If made after legal compensation has set in c) Subrogating 3rd person to the rights of the
– no effect; compensation has already creditor (Art. 1291, CIVIL CODE)
extinguished the obligation, so there is nothing
to assign. Requisites of novation: (VICN)
2) If made before legal compensation has set There must be a previous Valid obligation;
in: Intent to extinguish the old and substitute it
a) With consent of debtor – debtor is estopped with the new obligation, whether
UNLESS he reserves his right to expressed, or implied as when the two
compensate and gave notice to the obligations are inconsistent and cannot
assignee stand together.
b) With knowledge but without consent of Capacity and consent of the parties to the
debtor – compensation may be set up as to new obligation; and
debts maturing prior to assignment Valid New obligation. (Antonio Garcia, Jr. v.
c) Without knowledge – compensation may CA, G.R. No. 80201, 1990)
be set-up on all debts prior to his
knowledge (Art. 1285, CIVIL CODE) Novation is never presumed, there must be an
express intention to novate. The creditor’s
Obligations not allowed to be Compensated (Co- acceptance of another check, which replaced an
PGT) earlier dishonored check, does not result in novation
1) When one of the debts arises from a depositum where there was no express agreement to establish
or from the obligations of a depositary or of a that the debtor was already discharged from his
bailee in Commodatum. (Art. 1287, CIVIL liability. (Salazar v. J.Y. Brothers Marketing
CODE) Corporation, G.R. No. 171998, 2010)
a) But Note: Only the bailor or depositor is
allowed to invoke legal compensation [DE Novation can be done without the knowledge or
LEON 420-421 (2019)] even against the will of the original debtor, but not
b) Against a creditor who has a claim for without the consent of the creditor. (Interport
support due by Gratuitous title, without Resources Corporation v. Securities Specialist, In.
prejudice to Article 301 par. 2 (Art. 1287, G.R. No. 154069, 2016)
CIVIL CODE)
c) If one of the debts consists in civil liability What are the 2 kinds of novation?
arising from a Penal offense. (Art. 1288, 1) Modificatory – it is modificatory when the old
CIVIL CODE) obligation subsists to the extent that it remains
i) But Note: The bailor or depositor is compatible with the new agreement. The old
allowed to invoke legal compensation obligation remains, as amended by the new.
[DE LEON 422 (2019)] (Swagman Hotels and Travels, Inc. v. CA, G.R.
d) Obligation to pay Taxes is not No. 161135, 2005)
compensable with the government’s
obligations to the taxpayer. (Francia v. IAC, The obligation to pay a sum of money is not
G.R. No. L-67649, 1988). novated by an instrument that expressly
recognizes the old, changes only the terms of
Taxes cannot be subject to compensation for the payment, adds other obligations not
simple reason that the government and the taxpayer incompatible with the old ones, or the new
are not creditors and debtors of each other. There is contract merely supplements the old one.
a material distinction between a tax and debt. Debts (Foundation Specialists Inc. v. Betonval Ready
are due to the Government in its corporate capacity, Concrete, G.R. No. 170674, 2009)
while taxes are due to the Government in its
sovereign capacity. (United Airlines, Inc. v. 2) Extinctive – the old obligation is terminated by
Commissioner of Internal Revenue, G.R. No. the creation of a new obligation. An extinctive
178788, 2010) novation results either by changing the object or
principal conditions (objective or real novation),
or by substituting the person of the debtor or

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subrogating a third person in the rights of the Since the old debtor did not consent, the liability of
creditor (subjective or personal novation). the old debtor cannot be revived even if the third
(Banate v. Philippine Countryside Rural Bank party becomes insolvent or cannot pay the
(Liloan, Cebu), Inc., G.R. No. 163825, 2010) obligation. However, it is important that the old
creditor and the third party (new debtor) agreed to
There is extinctive novation when there is an release the old debtor; otherwise, the third party
irreconcilable incompatibility between the old (new debtor) only becomes a co-debtor and no
and new obligations. There is no novation in novation takes place. (Arts. 1294, CIVIL CODE)
case of only slight modifications, in which case, (PINEDA 341 (2009))
the old obligation still subsists. (Heirs of Franco
v. Spouses Gonzales, G.R. No. 159709, 2012) In delegacion, if a third party offers to pay with the
knowledge or consent of the debtor, the third party
Note: Novation does not extinguish criminal who offers to pay becomes the new debtor (from the
liability. (Philippine National Bank v. Soriano, point of view of the creditor). Notably, after payment,
G.R. 164051, 2012) the same third party will become a new creditor
(from the point of view of the old debtor) and may
Novation is not a ground under the law to demand full reimbursement plus legal subrogation
extinguish criminal liability. The legal effect of to the rights of the old creditor (e.g., the third party
novation is limited in its effect only to the civil who paid now becomes the new
aspect of the liability. The role of novation may creditor/pledgee/mortgagee of the old debtor). (Arts.
only be either to prevent the rise of criminal 1236-1237, CIVIL CODE)
liability, or to cast doubt on the true nature of the
original basic transaction, whether or not it was Similar to expromision, as a general rule, in
such that the breach of the obligation would not delegacion, the old debtor’s liability is not revived in
give rise to penal responsibility, as when money case of insolvency of the old debtor unless at the
loaned is made to appear as a deposit, or other time of delegacion: (a) the insolvency was already
similar disguise is resorted to. (Narciso existing and of public knowledge or (b) the
Degańos v. People, G.R. No. 162826, 2013) insolvency was known to the old debtor. (Arts. 1295,
CIVIL CODE)
Effect of Conditions in Either Old or New
Obligation: Note: In both cases, whether it is expromision or
1) If old obligation is conditional delegacion, the old creditor must always consent to
a) If resolutory and it occurred – old obligation payment by the third party. (If the old creditor
already extinguished; no new obligation is accepts payment, he obviously consents.)
created since there is nothing to novate
b) If suspensive – the condition must happen;
otherwise, there will be no old obligation to B. CONTRACTS
novate. [4 TOLENTINO 399 (1991)]
2) If the new obligation is conditional: 1. ESSENTIAL REQUISITES OF
a) If resolutory – valid
CONTRACT
If suspensive – the condition must happen;
otherwise, there will be no new obligation to
Definition of a Contract
replace the old. In the meantime, the old
A contract is a meeting of minds between two
obligation subsists. [4 TOLENTINO 397
persons whereby one binds himself, with respect to
(1991)]
the other, to give something or to render some
service. (Art. 1305, CIVIL CODE)
What are the rules regarding expromision and
delegacion?
In expromision, when there is a third party who
offers to pay without the knowledge or against the
will of the debtor, the third party who offers to pay Contract vs. Obligation
becomes the new debtor (from the point of view of Contract is one of the sources of obligations (Art.
the creditor). Notably, after payment, the same third 1157, CIVIL CODE). On the other hand, obligation
party will become a new creditor (from the point of is the legal or juridical tie or vinculum juris that exists
view of the old debtor) and may demand after a contract has been entered into. Hence, there
reimbursement to the extent that the old debtor was can be no contract if there is no obligation. But an
benefited (beneficial reimbursement only and no obligation may exist without a contract. [De Leon p.
subrogation). (Arts. 1236-1237, CIVIL CODE) 466 (2019)]

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Note: In a contract, the legal tie or vinculum juris that accept or reject but cannot modify; one party
binds or connects the parties (who are usually not prepares the stipulation in the contract, while the
strangers to one another) is the contract itself. In a other party merely affixes his signature or his
tort or quasi-delict, the legal tie or vinculum juris that “adhesion” thereto, giving no room for negotiation
binds or connects the parties (who are usually and depriving the latter of the opportunity to bargain
strangers to one another) is the fault or negligence on equal footing (Polotan, Sr. v. CA, G.R. No.
that gives rise to a claim for damages, there being 119379, 1998); it is construed strictly against the
no contract between them. one who drafted the same. (Geraldez v. CA, G.R.
No. 108253, 1994)
What are the 3 stages in the life of a contract?
a) Negotiation stage – There is no contract at this Are contracts of adhesion illegal and void?
point. Parties are discussing terms and No. Contracts of adhesion are valid contracts. It
conditions. bears stressing that a contract of adhesion is just as
b) Perfection stage – This is what gives birth to a binding as ordinary contracts. It is true that we have,
contract. At this point, the contract exists. on occasion, struck down such contracts as void
c) Performance stage – A contract exists and when the weaker party is imposed upon in dealing
breach of contract is possible at this stage. with the dominant bargaining party and is reduced
to the alternative of taking it or leaving it, completely
What are the 3 kinds of contracts based on deprived of the opportunity to bargain on equal
perfection? footing, Nevertheless, contracts of adhesion are not
Consensual contracts which are perfected by mere invalid per se; they are not entirely prohibited. The
consent of the parties on the subject matter and one who adheres to the contract is in reality free to
cause, and from that moment the parties are bound reject it entirely; if he adheres, he gives his consent.
not only to the fulfillment of what has been expressly (Rizal Commercial Banking Corporation v. CA, G.R.
stipulated but also to all the consequences which, No. 133107, 1999)
according to their nature, may be in keeping with
good faith, usage and law. (e.g., contract of sale) a. Consent
(Art. 1315, CIVIL CODE)
Consent is the meeting of the offer and the
Real contracts which are perfected by delivery of the acceptance upon the thing and the cause which are
object of the obligation. (e.g., commodatum, pledge, to constitute the contract. The offer must be certain
deposit) (Art.1316, CIVIL CODE) and the acceptance must be absolute. A qualified
acceptance constitutes a counter-offer. (Art. 1319,
Formal or solemn contracts which are required to be CIVIL CODE)
in a specific form required by law to be valid.(e.g.,
donation of an immovable property which must be in Note: The Civil Code follows the theory of cognition
a public instrument together with the acceptancel and not the theory of manifestation. There is no
otherwise, the contract is void. (Art.749, CIVIL meeting of the minds at the time the offeree
CODE) manifests acceptance. The contract is perfected
only when the offeror has knowledge of the
What are nominate contracts? acceptance.
These are contracts that have been given a formal
name or designation by the law. (e.g., sale, lease, For a contract to arise, the acceptance must be
loan, deposit, pledge, commodatum, antichresis) made known to the offeror. Accordingly, the
acceptance can be withdrawn or revoked before it is
What are innominate contracts? made known to the offeror. (Rizalino et al. v. Paraiso
These are contracts that have not been given a Development Corporation, G.R. No. 157493, 2007)
formal name or designation by the law.

When does an offer become ineffective? (QR-

What are the 4 kinds of innominate contracts? DRIP)
1) Do ut des – I give that you may give. 1) Death, civil interdiction, insanity or insolvency of
2) Do ut facias – I give that you may do. either party before the offeror has knowledge of
3) Facio ut des – I do that you may give. the acceptance is conveyed (Art. 1323, CIVIL
4) Facio ut facias – I do that you may do. CODE);
2) Express or implied Rejection of the offer;
What are contracts of adhesion? (NHA v. Grace Baptist Church, G.R. No.
It is a contract where one party imposes a ready- 156437, 2004)
made form of contract which the other party may

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3) Qualified or conditional acceptance, which Inc. v. Court of Appeals, G.R. No. 111238,
constitutes a counter-offer; (Art. 1319, CIVIL 1995)
CODE)
4) Subject matter becomes Illegal or impossible Note: An option contract is basically a
before the offeror has knowledge of the contract where “time” is the object of the
acceptance; (PARAS 612 (2016)) contract, or more particularly, “time to make
5) Lapse of Period given to the offeree within a decision” or “time to decide” has been
which to signify acceptance; (Art. 1324, CIVIL bought or purchased.
CODE) or
6) Revocation of the offer before the offeror has What are the 2 kinds of simulated contracts?
knowledge of the acceptance) (Art. 1324, CIVIL 1) Absolutely simulated – the parties have no
CODE) intention to be bound at all (Art. 1345, CIVIL
CODE); void from beginning (Art. 1346, CIVIL
What are the rules on advertisements and offers CODE)
to bid? 2) Relatively simulated – the parties conceal their
Business advertisements – Not definite true agreement (Art. 1345, CIVIL CODE): the
offers, but mere invitations to make an real agreement binds the parties when:
offer, unless it appears otherwise (Art. a) There is no prejudice to 3rd persons; and
1325, CIVIL CODE) b) It is not contrary to law, moral, good
Advertisements for bidders – These are customs, public order or public policy. (Art.
simply invitations to bid and the advertiser 1346, CIVIL CODE)
is not bound to accept the highest or lowest
bidder, unless the contrary appears (Art. b. Object of a Contract
1326, CIVIL CODE)
What are the requisites of a valid object? (W-
Article 1326 of the Civil Code, which specifically PLDT):
tackles offer and acceptance of bids, provides 1) Within the commerce of man (Art. 1347, CIVIL
that advertisements for bidders are simply CODE) – either existing or in potency
invitations to make proposals, and an advertiser 2) Licit (Art. 1347, CIVIL CODE)
is not bound to accept the highest bidder unless 3) Possible, legally or physically (Art. 1348, CIVIL
the contrary appears. (Privatization and CODE)
Management Office v. Strategic Alliance 4) Determinate as to its kind or determinable
Development Corporation, G.R. No. 200402, without need to enter into a new contract (Art.
2014) 1349, CIVIL CODE)
5) Transmissible (Art. 1347, CIVIL CODE)
What are the rules regarding option contracts?
General rule: If the offeror has allowed the offeree a
c. Cause or Consideration
certain period to accept, the offer may be withdrawn
at any time before acceptance by communicating
such withdrawal. (Art. 1324, CIVIL CODE) What is cause or consideration?
The immediate, direct and most proximate reason
Exception: When the option is founded which justifies the creation of an obligation through
upon a separate or independent the will of the contracting parties and is the essential
consideration as something paid or reason for the contract. (William Uy v. Court of
promised that is distinct from the purchase Appeals, G.R. No. 120465, 1999)
price. (Art. 1324, Civil Code) The
consideration for the option must be distinct What are the requisites of a valid cause or
from the purchase price. In this case, the consideration? (LET)
offeror cannot withdraw the offer. 1) It must Exist at the time the contract is entered
into. (Art. 1352 & 1409, CIVIL CODE)
An option, sometimes called an 2) It must be True. (Art 1353, CIVIL CODE)
“unaccepted offer,” is simply a contract by 3) It must be Licit. (Art. 1352, CIVIL CODE)
which the owner of property agrees with
another person that he shall have the right What is the motive for entering into a contract?
to buy his property at a fixed price within a The motive refers to the particular reason of one
certain time. An option is not of itself a party for entering into the contract which does not
purchase, but merely secures the privilege affect the other party nor the validity of the contract;
to buy. It is not a sale of property but a sale however, when the motive predetermines the cause
of the right to purchase. (Adelfa Properties, or when the realization of such motive has been

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made a condition upon which the contract is made lesion by more

to depend, the motive may be regarded as the than ¼ of the
cause. (William Uy v. Court of Appals, G.R. No. value of the
120465, 1999) things which
are the object
Cause Distinguished from Motive thereof (Art.
CAUSE MOTIVE 1381, par. 1)
Immediate or direct Remote or indirect b) Those agreed
reason of a contract reason (which may be upon in
(usually known and hidden or secret) representation
not kept secret) of absentee, if
Objective and juridical the latter
reason of contract; suffer lesion
always known to both stated in par.
parties 1 (Art. 1381,
Remains the same May vary although a par. 2)
regardless of a party’s party enters into the c) Partition
motive for entering into same kind of contract among co-
a contract heirs, when
Legality or illegality of Legality or illegality of any one of
cause affects the motive does not affect them received
existence or validity of the existence or things with a
the contract validity of contract value less by
[DE LEON 673-674 (2014)] at least ¼ than
the share to
which he is
Effects of Different Situations Involving Cause
entitled (Art.
SITUATION EFFECT
1098)
Contract is void and
Absence of cause produces no legal
effect (Art. 1352) Moral Obligation as Cause
Where the moral obligation arises wholly from
Contract is void and
Illegal cause produces no legal ethical considerations, unconnected with any civil
effect (Art. 1352) obligations, it cannot constitute a sufficient cause or
consideration to support an onerous contract.
Contract is void if it is
(Fisher v. Robb, G.R. No. 46274, 1939)
not proved that the
contract is founded
False cause Example: Contract of sale where the object is
upon another cause
which is true and lawful 10 kilos of rice in exchange for love and
(Art. 1353) friendship. Contract of lease where the object is
A valid cause is use and possession of an apartment in
Causa not stated or exchange for mercy and forgiveness. In both
presumed to exist (Art.
written in the contract cases, the contract is void for lack of cause.
1354)
General Rule:
Contract is valid. 2. PRINCIPLES IN CONTRACT
LAW
Exceptions:
1) When, together What are the 4 basic principles in contract law?
with lesion, there a) Autonomy of contracts
has been: fraud, b) Mutuality of contracts
Inadequacy of cause mistake or undue c) Obligatory force of contracts
(or lesion) (Art. 1355) influence d) Relativity of contracts
2) In cases specified
by law: What is autonomy of contracts?
a) Those entered It is freedom to contract. The parties are free to enter
into by into any stipulations they want provided these are
guardians not contrary to law, morals, good customs, public
when the order or public policy. (Art. 1306, CIVIL CODE)
wards suffer

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What is mutuality of contracts? “reformation of contracts”. It is only the

A contract must bind both contracting parties. Its piece of paper or the document that has a
validity or compliance cannot be left to the will of one problem since it does not reflect the true
of them (Art. 1308, CIVIL CODE) intention of the parties. The document or
the “instrument" will be changed, amended
What is obligatory force of contracts? or modified to conform to the contract of the
Obligations arising from contracts have the force of parties (with judicial approval).
law between the contracting parties and should be
complied with in good faith. (Art. 1159, CIVIL CODE) What are the situations that may give rise to an
action for reformation of an instrument?
What is relativity of contracts? 1) Mutual mistake fails to disclose the real
Contracts take effect only between the parties, their agreement (but it must be a mistake of Fact)
assigns and heirs, except in case where the rights (Art. 1361, CIVIL CODE)
and obligations arising from the contract are not 2) Unilateral mistake or the other party acted
transmissible by their nature, or by stipulation or by Fraudulently (Art. 1362, CIVIL CODE)
provision of law. (Art. 1311, CIVIL CODE) 3) Unilateral mistake and the other party is guilty
of Concealment (Art. 1363, CIVIL CODE)
What is an exception to relativity of contracts? 4) Person drafting the instrument or clerk or typist
Stipulation pour autrui. If a contract should contain is guilty of ignorance, lack of skill, negligence or
some stipulation in favor of a third person, he may bad faith resulting in the instrument not showing
demand its fulfillment provided he communicated the True Intention of the parties (Art. 1364, C
his acceptance to the obligor before its revocation. CIVIL CODE)
A mere incidental benefit or interest of a person is 5) Parties merely agreed on a Mortgage, pledge of
not sufficient. The contracting parties must have real or personal property but instrument says
clearly and deliberately conferred a favor upon a that the property is sold absolutely or involves a
third person. (Art. 1311, CIVIL CODE) right to repurchase (Art. 1365, CIVIL CODE)

What are the requisites for a valid stipulation When is an action of reformation of an
pour autrui? instrument not allowed? (SD-WV)
a) The parties to the contract must have granted a a) Simple Donation inter vivos where no condition
favor to a third person; is imposed
b) The favor must not be a mere incidental benefit; b) Notarial and holographic Wills
c) The favor must have been clearly and c) Real or true agreement is Void (Art. 1368, CIVIL
deliberately granted to the third person; CODE)
d) The stipulation forms only a part of the contract
and not the entirety of the contract; and Who is allowed to file an action for reformation
e) The third person accepts the favor before it is of an instrument?
revoked. (Art. 1311, CIVIL CODE) 1) If there is mutual mistake, both parties. (Art.
1368, CIVIL CODE)
3. REAL VS CONSENSUAL 2) The innocent party only. (Art. 1368, CIVIL
CONTRACTS; FORMS, CODE)
REFORMATION AND
Note: If a party has filed an action for specific
INTERPRETATION
performance to enforce the terms of the wrong
or erroneous instrument (document), this party
d. Reformation of Instruments is in estoppel and cannot anymore file an action
for reformation of the instrument to have it
What is reformation of an instrument? corrected. (Art. 1367, CIVIL CODE)
There is a meeting of the minds and a valid contract
but the written instrument (or document) does not Where is an action for reformation of an
express nor reflect the true intention of the parties instrument found in the Rules of Court?
by reason of mistake, fraud, inequitable conduct or Rule 63 or Declaratory Relief and Other Similar
accident. If there is vitiated consent or no meeting of Remedies. An action for reformation of an
the minds, the contract is voidable and the remedy instrument is one of the “other similar remedies”
is annulment (Art. 1359, CIVIL CODE) together with an action to quiet title. It is a special
civil action.
Note: The word “instrument” just means
“document”. This explains why the law says What is the prescriptive period to file an action
“reformation of instruments” and not for reformation of an instrument?

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The prescriptive period is ten (10) years because it Note: Read Arts. 1370-1379 of the Civil Code. Read
is an action based upon a written contract. (Yolanda also interpretation of contracts in the Rules of
Rosello-Bentir v. Honorable Mateo M. Leanda, G.R. Evidence. Just read the codal.
No. 128991, 2000)
4. DEFECTIVE CONTRACTS
e. Interpretation of Instruments or
Written Contracts f. Rescissible Contracts

What are the rules in the interpretation of What are rescissible contracts?
written contracts or instruments? Those which have caused economic damage either
If the terms of the agreement are clear and to one of the parties or to a third person and which
unequivocal, their plain and literal meanings should may be set aside even if valid. They may be set
be followed. (Art. 1370, CIVIL CODE) aside in whole or in part, to the extent of the damage
caused. [4 TOLENTINO (1991)]
In the construction or interpretation of an instrument,
the intention of the parties is primordial and is to be Important: Do not confuse rescissible
pursued. (Josefina Valdez v. Court of Appeals, G.R. contracts with rescission (or technically
No. 140715, 2004) “resolution”) (which is what it was called in
the Old Civil Code) of a reciprocal
In order to judge the intention of the contracting obligation found in Art. 1191 based on
parties, their contemporaneous and subsequent substantial breach.
acts shall be principally considered. (Art. 1371,
CIVIL CODE) What are the different kinds of rescissible
contracts?
Any ambiguity in a contract should be construed 1) Contracts entered into by a guardian whenever
against the party who caused the same. (Art. a ward or an absentee suffers lesion by more
1377, Civil Code) than 1/4 of the value of the object;
2) Contracts entered into to defraud creditors
In case of doubt concerning the surrounding (Accion Pauliana);
circumstances in the execution of a contract, the
least transmission of rights and interests shall What are the requisites of accion pauliana?
prevail if the contract is gratuitous, and if onerous, a. The plaintiff asking for rescission has a
the doubt is to be settled in favor of the greatest Credit prior to the alienation, although
reciprocity of interests. (Art. 1378, CIVIL CODE) demandable later;
b. The debtor has made a Subsequent
The terms of an agreement or writing are presumed contract conveying a patrimonial benefit to
to be have been used in their primary and general
a third person;
acceptation. However, evidence may be admitted to
show that they have a local, technical, or otherwise c. The creditor has No other legal Remedy to
peculiar signification and were used and understood satisfy his claim;
in that particular instance, in which case, the d. The act being impugned is Fraudulent;
agreement or writing must be construed e. The third person who received the property
accordingly. (Rule 130, Sec. 15, Revised Rules on conveyed, if it is by onerous title, has been
Evidence) an Accomplice in the fraud. (Anchor
Savings Bank v. Furigay, G.R. No. 191178,
Only laws existing at the time of the execution of a Mar. 13, 2013; Lee v. Bangkok Bank Public
contract are applicable to it and not later statutes Company, Limited, G.R. No. 173349, Feb.
unless the latter are specifically intended to have
9, 2011)
retroactive effect. (Vive Eagle Land, Inc. v. Court of
Appeals, G.R. No. 150308, 2004) What are the badges of fraud?
a) Consideration is inadequate or fictitious;
When there are several provisions in a contract, the b) Transfer was made by the debtor after a
construction to be adopted should be the one which complaint was filed against him;
will give effect to all of its provisions. A contract must c) Sale on credit by an insolvent debtor;
be read in its entirety. (Rigor v. Consolidated Orix d) Debtor is insolvent;
Leasing Finance Corporation, G.R. No. 136423, e) Debtor transferred all of his properties
2002) when he is financially embarrassed;

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f) Transfer made between father and son if Note: If only one party is incapacitated to contract,
this fact present together with the the contract will be voidable. However, if both
preceding circumstances; and parties are incapacitated to contract, the contract
g) Failure of the buyer/vendee to take will be unenforceable.
exclusive possession of the property.
(Caltex Philippines, Inc. v. PNOC Shipping What are the 2 ground to annul a voidable
and Transport Corporation, G.R. No. contract?
150711, 2006) 1) Incapacity to contract
2) Vitiated consent
The presumption of fraud in case of alienations by
onerous title of a person against whom a judgment Who are the persons incapacitated to give
has been rendered or writ of attachment has been consent?
issued does not apply to registered land if the 1) Minors (Art. 1327, CIVIL CODE)
judgment or writ of attachment is not registered. 2) Insane or demented persons (Art. 1327,
(Lee v. Bangkok Bank, G.R. No. 173349) CIVIL CODE), unless the contract was
entered into during a lucid interval (Art.
3) Contracts involving things under litigation 1328, CIVIL CODE)
entered into without knowledge or approval of 3) Deaf-mutes who do not know how to write
the litigants or the court. (Art. 1327, CIVIL CODE)
4) Payments made in a state of insolvency for Note: The law does not include read. If
obligations to whose fulfillment the debtor could deaf mute does not know how to read,
not be compelled at the time they were effected. he is capacitated to contract.
Note: The insolvency does not need to be 4) In a state of Drunkenness or under a
judicially declared and the debt must not yet be hypnotic spell (Art. 1328, CIVIL CODE)
due and demandable. (Art. 1382, CIVIL CODE) 5) Prodigality
6) Persons specially Disqualified: civil
What are the requisites for rescission? interdiction (Art. 1329 & 38, CIVIL CODE)
There must be a valid or voidable contract;
There is an economic or financial prejudice What are the rules regarding minors who enter
to a contracting party or a third person; into contracts?
There is no other legal means of seeking General Rule: Voidable (Art. 1391, CIVIL CODE)
redress. It is a remedy of last resort. (Art.
1383, CIVIL CODE) Exceptions (MENGS) (These contracts are
There must be mutual restitution (Art. 1385, valid):
CIVIL CODE); 1) If upon reaching age of Majority, the minor
The thing which is the object of the contract ratifies the contract. (Agaton Ibanez v. Pedro
is not in the legal possession of third Rodriguez, G.R. No. 23153, 1925)
persons in good faith (Art. 1385, CIVIL 2) Contract was entered unto by a Guardian with
CODE) court approval. (Jesus Roa v. Concepcion Roa,
The action must be brought within the G.R. No. 28532, 1929)
prescriptive period of 4 years. (Art. 1389, 3) Savings account in the Postal Savings Bank
CIVIL CODE) provided the minor was at least 7 years old.
(Sec. 2007, Revised Administrative Code)
What is the extent of rescission? 4) Contract is for Necessities such as food but the
Rescission is not total in character. It is only person bound to give support will be liable (Arts.
partial. It is only to the extent necessary to 1489 & 2164, CIVIL CODE)
cover the damages caused. (Art. 1384, CIVIL 5) Contract where the minor actively
CODE) misrepresented his age and pretended to be of
majority age. The minor is in Estoppel.
Note: Only the creditor who asked for rescission (Fernando Hermosa v. Alfonso Zobel, G.R. No.
will benefit, and not other creditors) L-11835, 1958). It is essential that the other
g. Voidable Contracts party must have been misled (Isidro Bambalan
v. HermanMaramba, G.R. No. L-27710, 1928).
What are voidable contracts? 6)
Voidable contracts are valid contracts. However, 7) However, the misrepresentation must be active
voidable contracts may be annulled if there is and not passive. For example, contract will be
incapacity to contract of one party or if there is voidable if minors did not disclose their minority
vitiated consent. Voidable contracts may be ratified. because they had no legal duty to disclose.

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(Roario Braganza v. Fernando De Villa Abrille, or legal claim through competent authority
G.R. No. L-12471, 1959) does not vitiate consent.) (Art. 1335, CIVIL
CODE)
What are the 5 kinds of vitiated consent?
Mistake, Violence, Intimidation, Undue Influence, What the respondent did was merely inform them of
Fraud (Art. 1330, CIVIL CODE) petitioner Edna’s conviction in the criminal cases for
estafa. It might have evoked a sense of fear or dread
a) Mistake on the petitioners’ part, but certainly there is nothing
unjust, unlawful or evil in the respondent's act. ...
Must include both ignorance, which is the absence The petitioners must remember that petitioner
of knowledge with respect to a thing, and mistake Edna's conviction was a result of a valid judicial
properly speaking, which is a wrong conception process and even without the respondent allegedly
about said thing, or a belief in the existence of some “ramming it into petitioner Victor's throat,” petitioner
circumstance, fact, or event, which in reality does Edna's imprisonment would be a legal consequence
not exist. (Sps.Theis v. Court of Appeals, G.R. No. of such conviction. (Spouses Binua v. Ong, G.R. No.
126013, 1997) 207176, 2014)

Requisites (FES): Reluctant Consent – It is necessary to distinguish

a. The error must be Substantial regarding: between real duress and the motive which is present
b. The object of the contract, or when one gives consent reluctantly. A contract is
c. The conditions which principally moved or valid even though one of the parties entered into it
induced one of the parties (error in quality against his wishes or even against his better
or in quantity), or judgment. Contracts are also valid even though they
d. Identity of qualifications, but only if such are entered into by one of the parties without hope
was the principal cause of the contract (Art. of advantage or profit. (Martinez v. Hongkong and
1331, CIVIL CODE) Shanghai Bank, G.R. No. L-5496, 1910)
e. The error must be excusable (not caused by
negligence). There is no mistake if the party Note: Violence or intimidation will make the contract
alleging it knew the doubt, contingency or risk voidable on the ground of vitiated consent even if it
affecting the object of the contract. (Art. 1333, was employed by a third person (not a party to the
CIVIL CODE) contract). (Art. 1336, CIVIL CODE)
f. The error must be a mistake of fact, and not of
law. (Agustin Luna v. Jose Linatoc, G.R. No. L- d) Undue Influence
48403, 1942)
Requisites (DIP):
b) Violence a. Improper advantage
b. Power over the will of another
Requisites (PFR): c. Deprivation of the latter of a reasonable
a) Serious or irresistible Physical Force freedom of choice. (Art. 1337, CIVIL
b) Such force is the Reason why the contract was CODE)
entered into. (Art. 1335, CIVIL CODE)
Circumstances to be considered (FIRM)
Note: Violence refers to physical coercion, while a. Confidential, family, spiritual, and other
intimidation refers to moral coercion. [PARAS 632 Relations between the parties
(2016)] b. Mental weakness
c. Ignorance
c) Intimidation d. Financial distress (Art. 1337, CIVIL CODE)

Requisites (FReT): Note: The important word is “undue”. Regular or

a. Reasonable and well-grounded Fear of an ordinary influence that happens everyday is not
imminent and grave evil upon his person, undue influence. Example: A sales lady says a
property, or upon the person or property of person looks like a movie star in a new jacket or a
his spouse, descendants, or ascendants market vendor says a watermelon is fresh and
(Note: Relatives in the collateral line are not sweet. This is regular influence which will not make
included) a contract a voidable contract on the ground of
b. It is the Reason why the contract was undue influence.
entered into
c. The Threat must be an unjust act, an
actionable wrong (A threat to enforce a just

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is the “best pizza in the world” or this is the “sweetest

e) Fraud mango in the universe”. (Art. 1340, CIVIL CODE)

What is causal fraud or dolo causante? However, this rule only requires the purchaser to
This is the use of insidious words or machinations exercise such care and attention as is usually
by one of the contracting parties to induce the other exercised by ordinarily prudent men in like business
party to enter into a contract, which, without them, affairs, and only applies to defects which are open
he would not have agreed to. (Art. 1338, CIVIL and patent to the service of one exercising such
CODE care. Moreover, it can also only be applied where it
is shown that the parties to the contract stand on
It is the deception employed by one party prior to or equal footing and have equal knowledge or equal
simultaneous to the contract in order to secure the means of knowledge and there is no relation of trust
consent of the other. (Metropolitan Fabrics, Inc. v. or confidence between them. In such a case, if a
Prosperity Credit Resources, Inc., G.R. No. 154390, seller’s representations prove to be false, neither
2014) law nor equity will permit the seller to escape
responsibility by the plea that the buyer ought not to
What are the requisites for dolo causante? (PS- have believed him or ought to have applied to other
SOBIA) sources to ascertain the facts. (Guinhawa v. People,
a. There must be misrepresentation or G.R. No. 162822, 2005)
concealment (Arts. 1338 & 1339, CIVIL
CODE) by a party Prior to or Simultaneous The law furnishes no protection to the inferior simply
to the consent or creation of the contract. because he is inferior, any more than it protects the
b. Must be Serious. (Art. 1344, CIVIL CODE) strong because he is strong. The law furnishes
c. Must have been employed by only One of protection to both alike — to one or more or less
the contracting parties. (Art.1342, CIVIL than to the other. It makes no distinction between
CODE) the wise and the foolish, the great and the small, the
d. Must be made in Bad faith or intent to strong and the weak. The foolish may lose all they
deceive. (Art. 1343, CIVIL CODE) have to the wise; but that does not mean that the
e. Must have Induced the other contracting law will give it back to them again. Courts cannot
party to give consent. (Art. 1338, CIVIL follow one every step of his life and extricate him
CODE) from bad bargains, protect him from unwise
f. Must be Alleged and proved by clear and investments, relieve him from one-sided contracts,
convincing evidence. (Tan Sua Sia v. or annul the effects of foolish acts. Courts cannot
Sontua, 56 Phil. 711, 1932) constitute themselves guardians of persons who are
not legally incompetent. Courts operate not because
In order that fraud may vitiate consent, it must be one person has been defeated or overcome by
dolo causante, and not dolo incidente. (Ponce de another, but because he has been defeated or
Leon v. Rehabilitation Finance Corporation, G.R. overcome illegally. (Jose Vales v. Simeon A. Villa,
No. L-24571, 1970) G.R. No. 10028, 1916)

Note: Dolo causante happens during the perfection What is incidental fraud or dolo incidente?
stage. Dolo incidente happens during the It is fraud that was not a factor in obtaining consent.
performance stage. It does not make a contract voidable. It is the fraud
referred to in Art. 1170 as a source of liability that
A mere expression of an opinion is not fraud unless gives rise to a claim for damages.
it is made by an expert and the other party relied on
the former’s special knowledge. (Art. 1341, CIVIL It is not the cause which induced the party to enter
CODE) into a contract and refers only to some particular or
accident of the obligations. (Geraldez v. Court of
Fraud committed by a third person does not vitiate Appeals, G.R. No. 108253, 1994)
consent unless the fraud resulted in substantial
mistake and the mistake is mutual. (Art. 1342, CIVIL What is the prescriptive period to annul a
CODE) voidable contract?
Four (4) years.
Are the usual exaggerations in trade fraudulent?
No. Dealer’s talk or the usual exaggerations in trade When does the prescriptive period start to run?
when the other party had the opportunity to know the a) If the ground is incapacity to contract, the period
facts are not fraudulent. Example: A seller says this starts when the guardianship ceases.

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b) If the ground is violence, intimidation or undue h. Unenforceable Contracts

influence, the period starts when the ground
ceases. What are unenforceable contracts?
c) If the ground is mistake or fraud, the period These are valid contracts. However, in case of
starts at the time of discovery. breach, these contracts cannot be enforced in court
unless ratified.
Discovery of fraud must be reckoned to have taken
place from the time the document was registered in What are the 3 kinds of unenforceable
the office of the register of deeds. Registration contracts?
constitutes constructive notice to the whole world. 1) Unauthorized contracts (those entered into
(Carantes v. CA, G.R. No. L-33360) without authority or in excess of authority);
2) Statute of Frauds;
What is the effect of ratification? 3) Incapacity to contract of both parties. Note: If
Ratification cleanses the contract of its defects from only one party is incapacitated to contract, the
the moment it was constituted. (Art. 1396, CIVIL contract is voidable.
CODE)
What is the Statute of Frauds?
Note: Ratification has a retroactive effect. In the following cases, an agreement shall be
unenforceable by action, unless the same, or some
What are the requisites for ratification? note or memorandum, thereof, be in writing, and
1) Knowledge of the ground that makes the subscribed by the party charged, or by his agent;
contract voidable; (Art. 1393, CIVIL CODE) evidence, therefore, of the agreement cannot be
2) The ground must have Ceased (Art. 1393, received without the writing, or a secondary
CIVIL CODE). Except in case of ratification evidence of its contents:
effected by a guardian; (Art. 1394, CIVIL
CODE) 1) An agreement that by its terms is not to be
3) The injured party must have executed an act performed within a year from the making
which expressly or impliedly conveys an thereof;
intention to Waive his right (Art. 1393, CIVIL 2) A special promise to answer for the debt,
CODE) default, or miscarriage of another;
3) An agreement made in consideration of
Even assuming that petitioner’s misrepresentation marriage, other than a mutual promise to marry;
consists of fraud which could be a ground for 4) An agreement for the sale of goods, chattels or
annulling their Contract to Sell, respondent’s act of things in action, at a price not less than five
affixing her signature to the said contract, after hundred pesos, unless the buyer accepts and
having acquired knowledge of the property's actual receives part of such goods and chattels, or the
location, can be construed as an implied ratification evidence, or some of them, of such things in
(ECE Realty v. Mandap, G.R. No. 196182, 2014) action or pay at the time some part of the
purchase money; but when a sale is made by
Implied ratification may take diverse forms, such as auction and entry is made by the auctioneer in
by silence or acquiescence; by acts showing his sales book, at the time of the sale, of the
approval or adoption of the contract; or by amount and kind of property sold, terms of sale,
acceptance and retention of benefits flowing price, names of the purchasers and person on
therefrom. (ECE Realty v. Mandap, G.R. No. whose account the sale is made, it is a sufficient
196182, 2014) memorandum;
5) An agreement of the leasing for a longer period
When is the innocent party not allowed to file an than one year, or for the sale of real property or
action to annul a voidable contract? of an interest therein;
When the object of the contract is lost due to the 6) A representation as to the credit of a third
fraud or fault of the innocent party. (Art. 1401, CIVIL person. (Art. 1403, CIVIL CODE)
CODE)
What are the 3 instances that will take a contract
Note: This is based on the clean hands doctrine. A out of the Statute of Frauds?
person who comes to court must come to court with 1) There is a written note or memorandum
clean hands subscribed (signed) by the other party (or his
agent). This written note or memorandum does
not need to be a complete written contract. It
may be in separate pieces of paper. It can be
written on several napkins or socks and a t-shirt.

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What is is important is that each note or initio (or from the beginning). The remedy is not
memorandum is subscribed (signed) by the annulment of contract since there is nothing to
party charged (or his agent) to be enforceable annul.
and taken out of the Statute of Frauds. (Art. 3) The action for declaration of nullity is
1403, CIVIL CODE) imprescriptible and may be filed at any time.
2) There is partial execution or partial (Art. 1410, CIVIL CODE)
performance. – If the contract has been partly 4) A void contract cannot be confirmed, ratified or
executed or partly performed, the contract is cured. (Art. 1409, CIVIL CODE)
taken out of the Statute of Frauds and is 5) The defense that a contract is void cannot be
enforceable in court. waived by the defendant. (Art. 1409, CIVIL
3) Failure to object in court. – If the lawyer is CODE)
sleeping in court or not paying attention and
fails to object when testimonial evidence is What are the kinds of void contracts?
being presented on the witness stand to prove 1) Those lacking in essential elements: No
the contract, the contract will not be covered by consent, no object, no cause (inexistent ones)
the Statute of Frauds and is enforceable. (Art. – essential formalities are not complied with.
1405, CIVIL CODE) Example: Donation of immovable property–it
must conform to the formalities of a valid
A right of first refusal is not by any means a donation)
perfected contract of sale of real property. As 2) Those which are absolutely simulated contract:
such, a right of first refusal need not be written An absolutely simulated contract is void, and
to be enforceable and may be proven by oral the parties may recover from each other what
evidence. (Rosencor Corp v. Inquing, G.R. No. they may have given under the contract. In
140479, 2001) absolute simulation, there is a colorable
contract but it has no substance as the parties
The Statute of Frauds applies only to executory have no intention to be bound by it. (Heirs of Dr.
contracts, not to those that are partially or Mario S. Intac and Angelina Mendoza-Intac v.
completely fulfilled. (Carbonnel v. Poncio, G.R. CA, G.R. No. 173211, 2012)
No. L-11231, 1958)
Note: In absolute simulation, there is a
In proving the fact of partial or total colorable contract but the parties have no
performance, either documentary or oral intention to be bound. However, if the parties
evidence may be received. (Averia v. Averia, state a false cause in the contract to conceal
G.R. No. 141877, 2004) their real agreement, the contract is relatively
simulated and the parties are bound to their real
Statute of Frauds is a personal act made by the agreement. (Art. 1345, CIVIL CODE; Valerio v.
parties to the unenforceable contract. Third Refresca, G.R. No. 163687, 2006)
parties cannot use the Statute of Frauds as
defense, or directly attack the unenforceable 3) Those which cause or object did not exist at the
contract. (Ayson v. Court of Appeals, G.R. Nos. time of the transaction – no cause/object. This
L-6501 and L-6599, 1984) refers to a contract whose cause or object could
not have existed or could not come into
i. Void or Inexistent Contracts existence at the time of the transaction.
[BALANE 778 (2020)]
What is a void or inexistent contract? 4) Those whose object is outside the commerce of
A void or inexistent contract is one which has no man – no object/illegal/impossible object
force and effect from the very beginning. Hence, it is 5) Those which contemplate an impossible service
as if it has never been entered into and cannot be – no object/illegal/impossible object
validated either by the passage of time or by 6) Those which intention of parties relative to
ratification. (Francisco v. Herrera, 2002) There is no principal object of the contract cannot be
contract. It does not even exist. ascertained
7) Those expressly prohibited or declared void by
What are the characteristics of a void contract? law – Illegal contracts that violate any legal
1) A void contract has no legal effect either against provision, whether it amounts to a crime or not
or in favor of anyone. (Modina v. CA, G.R. No.
109355, 1999) Examples:
2) The proper remedy is called an action for No contract may be entered into upon future
declaration of nullity where the court merely inheritance except in cases expressly
declares the fact that the contract is void ab authorized by law. (Art. 1347, CIVIL CODE)

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No contract which practically amounts to and convincing proof. (Department of Public

involuntary servitude, under any guise Works and Highways v. Quiwa, G.R.
whatsoever, shall be valid. (Art. 1703, CIVIL No.183444, 2012)
CODE)
What is In Pari Delicto?
8) Those whose cause, object or purpose is General Rule: If both parties are guilty, neither
contrary to law, morals, good customs, public may file a complant against each other; (Art.
order or public policy. 1412, CIVIL CODE). Applies only to illegal
contracts and not to inexistent contracts (Art.
Example: Contract to sell illegal drugs 1411, CIVIL CODE)

Other void contracts: Exceptions:

1. If purpose has not yet been
Pactum Commissorium (Art. 2088, 2130, accomplished and if damage has not
1390, CIVIL CODE) been caused to any 3rd person.
2. Payment of usurious interest. (Art.
Elements: (MAp) 1413, CIVIL CODE)
a. There should be a property Mortgaged by
way of security for the payment of the Note: There is no more usurious
principal obligation. interest today. The Usury law has been
b. There should be a stipulation for automatic repealed. Usury is now valid and legal
Appropriation by the creditor of the thing (despite objections based on moral
mortgaged in case of non-payment of the grounds similar to those in abortion or
principal obligation within the stipulated divorce).
period. (Development Bank of the
Philippines v. CA, G.R. No. 118342, 1998) 3. Payment of money or delivery of
property for an illegal purpose, where
Pactum De Non Alienando (Art. 2130, the party who paid or delivered
CIVIL CODE) repudiates the contract before the
purpose has been accomplished, or
A stipulation forbidding the owner from before any damage has been caused
alienating the immovable mortgaged shall be to a third person. (Art. 1414, CIVIL
void. CODE)
4. Payment of money or delivery of
It is a clause in a mortgage giving the property made by an incapacitated
mortgagee the right to foreclose by executory person. (Art. 1415, CIVIL CODE)
process directed solely against the mortgagor 5. Agreement or contract which is not
and giving him or her the right to seize and sell illegal per se and the prohibition is
the mortgaged property, regardless of any designed for the protection of the
subsequent alienations. plaintiff. (Art. 1416, CIVIL CODE)
6. Payment of any amount in excess of
Pactum Leonina (Art. 1799, CIVIL CODE) the maximum price of any article or
A stipulation which excludes one or more commodity fixed by law or regulation
partners from any share in profit or loss is void. by competent authority. (Art. 1417,
CIVIL CODE)
What is the Clean Hands Doctrine? 7. Contract whereby a laborer undertakes
A plaintiff must not be guilty of fault or to work longer than the maximum
negligence or any illegality; otherwise, the number of hours fixed by law. (Art.
complaint will be dismissed. Those who come 1418 & 1419, CIVIL CODE)
to court must come to court with clean hands. 8. One who lost in gambling because of
(Department of Public Works and Highways v. fraudulent schemes practiced on him is
Quiwa, G.R. No. 183444, 2012) allowed to recover his losses (Art. 313,
RPC) even if gambling is prohibited.
The Clean Hands Doctrine states that “a litigant
may be denied relief by a court of equity on the
ground that his conduct has been inequitable,
unfair and dishonest, or fraudulent, or deceitful
as to the controversy in issue.” Bad faith and
fraud are allegations of fact that demand clear

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What are the requisites for recovery when a performance. Only the innocent party with clean
contract is illegal? hands can demand restitution or specific
1. Contract is for an illegal purpose performance. Note: These rules apply only if the
2. Contract must be repudiated by any of the contract does not constitute a criminal offense (Art.
parties before purpose is accomplished or 1412, CIVIL CODE)
damage is caused to third parties; and
3. Court believes that public interest will be
served by allowing recovery (discretionary C. ESTOPPEL
upon the court).
a. Based on remorse;
What is estoppel?
b. Illegality is accomplished when
Through estoppel an admission or representation is
parties entered into contract;
rendered conclusive upon the person making it, and
c. Before it takes effect – Party which
cannot be denied or disproved as against the person
is remorseful prevents it.
relying thereon (Art. 1431, CIVIL CODE)
What are the effects of illegal contracts?
A person, who by his deed or conduct has induced
1. If one party is incapacitated, courts may
another to act in a particular manner, is barred from
allow recovery of money, property
adopting an inconsistent position, attitude, or course
delivered by incapacitated person in the
of conduct that thereby causes loss or injury to
interest of justice. (Art. 1415, CIVIL CODE)
another. (Caldo v. Caldo-Atienza, G.R. No. 164453,
2006)
The in pari delicto doctrine cannot apply
because an incapacitated person is
A person, who by his deed or conduct has induced
innocent and is in good faith. An
another to act in a particular manner, is barred from
incapacitated person does not know what
adopting an inconsistent position, attitude or course
he is entering into and is unable to
of conduct that thereby causes loss or injury to
understand the consequences of his
another. (Cruz v. Court of Appeals, G.R. No.
actions.
126713, 1998)
2. If agreement is not illegal per se but merely It is elementary that estoppel cannot be sustained in
prohibited and prohibition is designated for doubtful inference. Absent the conclusive proof that
the protection of the plaintiff – the plaintiff its essential elements are present, estoppel must
may recover what he has paid or delivered fail. (Philippine Savings Bank v. Chowking Food
by virtue of public policy. (Art. 1416, CIVIL Corporation, G.R. No. 177526, 2008)
CODE)
Waiver and Estoppel are loosely used
3. If a subsequent contract is based on a interchangeably. The doctrine of waiver belongs to
previous illegal contract, the subsequent the family of, or is based upon, estoppel. This is
contract is also void and inexistent. “The especially true where the waiver relied upon is
illegality of the Sub-Contract Agreement constructive or implied from the conduct of a party,
necessarily affects the [resulting] Deed of when it is said that the elements of estoppel are
Assignment because the rule is that an attendant. (Lopez v. Ochoa, G.R. No. L-7955, 1958)
illegal agreement cannot give birth to a
valid contract. To rule otherwise is to
Note: Estoppel may or may not be
sanction the act of entering into a
intentional. However, a waiver must always
transaction the object of which is expressly
be intentional to be valid. Therefore,
prohibited by law and thereafter execute an
estoppel is the broader term. Waiver is the
apparently valid contract to subterfuge the
more specific term.
illegality. The legal proscription in such an
instance will be easily rendered nugatory
Is it possible for the government to be in
and meaningless to the prejudice of the
estoppel?
general public.” (Gonzalo v. Tarnate, G.R.
General Rule: No. It is not possible for the
No. 160600, 2014)
government to be in estoppel for the mistakes or
errors committed by its officers or employees.
What are the rules regarding mutual restitution?
If both parties are in pari delicto, neither party may
Exception: In rare and unusual circumstances, the
ask for mutual restitition nor specific performance. If
government may be in estoppel but only if it will not
one party is guilty, the guilty party has dirty hands
operate to defeat the effective operation of a policy
and cannot demand restitution nor specific

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adopted to protect the public. (Republic v. Court of to do that which, by exercising due diligence, could
Appeals, G.R. No. 116111, 1999) or should have been done earlier. Stated differently,
it is negligence or omission to assert a right within a
What are the 2 basic kinds of estoppel? reasonable time, warranting a presumption that the
Estoppel in Pais party entitled to assert it either has abandoned it or
Estoppel by Deed declined to assert it. (Tijam v. Sibonghanoy, G.R.
No. L-21450, 1968).
Note: The other kinds of estoppel are special kinds
of estoppel with fancy names. There are only two Elements: (CDLP)
basic kinds of estoppel. Estoppel in Pais and a) Conduct on the part of the defendant, or of one
Estoppel by Deed. under whom he claims, giving rise to the
situation of which complaint is made and for
What is Estoppel in Pais? which the complaint seeks a remedy;
A person is considered in estoppel if by his conduct, b) Delay in asserting the plaintiff’s rights, the
representations, admissions or silence when he plaintiff having had knowledge or notice, of the
ought to speak out, whether intentionally or through defendant's conduct and having been afforded
culpable negligence, "causes another to believe an opportunity to institute a suit;
certain facts to exist and such other rightfully relies c) Lack of knowledge or notice on the part of the
and acts on such belief, as a consequence of which defendant that the plaintiff would assert the right
he would be prejudiced if the former is permitted to on which he bases his suit; and
deny the existence of such facts. d) Injury or Prejudice to the defendant in the event
relief is accorded to the plaintiff, or if the suit is
What is Estoppel by Silence? not held to be barred. (Go Chi Gun v. Co Cho,
Where a person, who by force of circumstances is G.R. No. L-5208, 1995)
under a duty to another to speak, refrains from doing
so and thereby leads the other to believe in the What are the differences between extinctive
existence of a state of facts in reliance on which he prescription and laches?
acts to his prejudice. Silence may support an Prescription is about the fact of delay.
estoppel whether the failure to speak is intentional Laches is about the effect of delay.
or negligent. (Philippine Bank of Communication v. Prescription is a matter of law. Laches is a
Court of Appeals, G.R. No. 106858, 1997) matter of equity.

What is Promissory Estoppel? Laches is different from the statute of

The making of a promise, even though without limitations.
consideration, if it was intended that the promise Prescription is concerned with the fact of delay.
should be relied upon, as in fact it was relied upon, Whereas laches is concerned with the effect of
and if a refusal to enforce it would virtually sanction delay. Prescription is a matter of time; laches is
the perpetration of fraud or would result in other principally a question of inequity of permitting a
injustice (Riingen v. Western Union Financial claim to be enforced, this inequity being founded on
Services Limited, Philippines Representative Office, some change in the condition of the property or the
G.R. No. 252716, 2021) relation of the parties. Prescription is statutory;
laches is not. Laches applies in equity, whereas
Promise must be plain and unambiguous prescription applies at law. Prescription is based on
and sufficiently specific so that the court fixed time, Laches is not. The defense of laches is
can understand the obligation assumed based on equity. It is not based on the title of the
and enforce the promise according to its party invoking it, but on the right holder's "long
terms. ((Riingen v. Western Union inaction or inexcusable neglect" to assert his claim.
Financial Services Limited, Philippines (Ernesto Lorenzo v. Fortunata Eustaquio, G.R. No.
Representative Office, G.R. No. 252716, 209435, 2022)
2021)Ibid..) – x Use the Ateneo Blue Book
for legal citations. Ibid is not used anymore
and has been abandoned for decades. --end of topic--

What is Estoppel by Deed?

This is estoppel in a written instrument or document.

What is Estoppel by Laches?

In a general sense, laches is the failure or neglect,
for an unreasonable and unexplained length of time,

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A. NATURE AND FORM

IX. CONTRACT OF SALE
Contract of Sale
It is a contract where one of the contracting parties
TOPIC OUTLINE UNDER THE SYLLABUS (Seller) obligates himself to transfer the ownership
and to deliver a determinate thing, and the other
A. NATURE AND FORM party (Buyer) to pay a price certain in money or its
1. Contract of Sale vs Contract to Sell equivalent. A contract of sale may be absolute or
2. Option Contract conditional. (Art. 1458)
3. Right of First Refusal
4. Earnest Money in Contract of Sale and Essential Requisites of a Contract of Sale (CSP)
Contract to Sell 1. Consent
2. Determinate or Determinable Subject Matter;
B. CAPACITY TO BUY OR SELL and
2. Price certain in money or its equivalent
C. OBLIGATIONS OF THE VENDOR (Coronel v. CA, G.R. No. 103577, 1996)
D. DOUBLE SALE Characteristics of Contract of Sale (NOC-PCBR)
1. Nominate
E. EFFECTSA OF LOSS OF THING SOLD 2. Onerous
3. Consensual
F. RECTO LAW 4. Principal
5. Commutative
G. MACEDA LAW 6. Bilateral
7. Reciprocal
H. RIGHTS OF UNPAID SELLER
FORMALITIES OF CONTRACT
I. CONVENTIONAL REDEMPTION; LEGAL
REDEMPTION Form not important for validity of sale
GR: Contract of sale is consensual, i.e., perfected
J. EQUITABLE MORTGAGE by mere consent as to price and subject matter (or
object of the contract). (Art. 1475)

Non-compliance with the formal requirements does

not affect the validity of sale. (Fule v. CA, G.R. No.
L-40502 & L-42607, 1976)

When form is important for validity; exception by

specific provision of law.
1. Donations and wills (Arts. 749, 804);
2. Power to sell a piece of land granted to an
agent must be in writing– otherwise, sale is
VOID (Art. 1874);
3. Sale of large cattle; must also be registered
with Municipal treasurer – otherwise VOID (Art.
1581; Revised Administrative Code, Sec. 529);
4. Sale of land by non-Christian if not approved
by Governor – VOID (Tac-an v. CA, G.R. No.
L-38736, 1984).

Statute of Frauds
Note that if particular form is required under the
statute of frauds and the same is not followed:
• While the sale is valid, it is
UNENFORCEABLE even as to the parties
to the contract of sale.

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When form (should be in writing and not merely b. Future goods – goods to be
verbal) is important for enforceability [Statute of manufactured, raise, or acquired by the
Frauds] (Art. 1403 [2]) seller after the perfection of the contract
1. A contract not to be performed in 1 (forward contracts)
year: A sale agreement which by its
terms is not to be performed within a Whether the subject matter is of a type and
year from the making thereof; nature that exists or could be made to exist to
2. Php 500 and above: An agreement for allow the seller reasonable certainty of being
the sale of goods, chattels or things in able to comply with his obligations.
action, at a price not less than PhP500;
3. Sale of land: A sale of real property or Minimum requirement of potential existence:
of an interest therein. taking into consideration the state of science
and technology at the time of perfection of the
Exceptions to coverage of statute of frauds in contract.
sales contracts:
1. Written: When there is a note or memorandum EMPTIO REI EMPTIO SPEI
in writing and subscribed to by party or his SPERATAE
agent (contains essential terms of the contract) “The purchase of what “Purchase of hope”
(Art. 1403) we hope”
Sale of an expected Sale of a hope or
Note: Electronic documents are the functional thing/ future thing expectancy that the
equivalent of the written documents for validity, thing will come to
enforceability and evidentiary purposes (R.A. existence; sale of the
No. 8792, Secs. 7 and 12) such that the hope itself
requirement of a note or memorandum in Sale is subject to a Sale is effective even if
writing can be complied with similar to written suspensive condition— the thing does not
contracts. that the thing will exist; come into existence,
if it does not, there is no unless it is a vain hope
Hence, when an offer and a counter-offer is contract (Art. 1461 Sale of a
initiated electronically, the requirement under vain hope or
Art. 1403, Civil Code, on the the Statute of expectancy is void)
Frauds is complied with (E-Commerce Act, RA Uncertainty is with Uncertainty is with
No. 8792) regard to the quantity regard to the existence
and quality of the thing of the thing
2. Partial execution: When there has been and not the existence
partial performance/execution (seller delivers of the thing
with intent to transfer title/receives price; or Object is a future thing, Object is a present
when buyer partially pays the price) (Art. 1405) which must be thing which is the hope
3. Failure to object: When there has been failure determinate or specific or expectancy
to object to presentation of evidence (oral) (Art. (not generic)
1405) E.g. growing crops E.g., lottery ticket
(Villanueva & Tiansay, Law on Sales, 67-68, 2016)
SUBJECT MATTER OF SALE
2. Licit
Requisites of a Valid Subject Matter (Arts. 1459- • Not outside the commerce of man (Art.
1465) 1459)
1. Existing and future things • If illicit, contract is void
2. Licit • Sale declared illegal by law (i.e., narcotics,
3. Determinate or Determinable wild birds and mammals, rare wild plants,
etc.)
If this requisite is not present, then the resulting
contract is VOID. Prohibited:
a. Narcotics (RA 6425);
1. Existing and future things b. Wild Birds or mammals (R.A. No. 2590); rare
Existing, having potential of existence, future, wild plants (R.A. No. 3983); poisonous plants
or contingent (Arts. 1347, 1348, 1462) or fruits (R.A. No. 1288); dynamited fish (R.A.
a. Existing goods – goods owned or No. 428);
possessed by the seller at the time of
perfection

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c. Gunpowder and explosives (Act No. 2255); 1. Real, not simulated

and firearms and ammunitions (P.D. No, 9);
d. Sale of land by non-Christians (Sec. 145, When at the perfection of the contract of sale, there
Administrative Code of 1987) is every intention on the buyer to pay the price, and
e. Animals with contagious diseases (Art. 1575) every expectation on the part of the seller to receive
f. Sale of animals unfit for the use or service for such price as the value of the subject matter he
which they were acquired (Art. 1575) obligates himself to deliver. (Test of intention)
g. Sale of future inheritance and other rights that (Rongavilla v. CA, G.R No. 83974, 1998)
are not transmissible (Art. 1347)
Effect Where Price is Simulated
3. Determinate or Determinable a. The act may be shown to have been in reality
a donation, or some other act or contract. (Art.
Determinate: always specific 1471)
• Particularly designated or physically b. If not, and neither party had any intention
segregated from all others of the same class; whatsoever that the amount will be paid
(Art. 1460) (absolutely simulated): the sale is void
(Rongavilla v. CA, G.R. No. 83974, 1998)
Determinable: always generic c. If there is a real price but what is stated in the
• Thing is capable of being made determinate contract is not the one intended to be paid (only
(Capacity to Segregate Test) relatively simulated or what is called a “False
• Without the necessity of a new or further Price”): the ostensible contract of sale is valid
contract between the parties (No Further but subject to reformation. (Macapagal v.
Agreement Test). (Art. 1460) Remorin, G.R. No. 158380, 2005)

Note: Subject matter CANNOT be DETERMINED 2. In money or its equivalent

BY a 3rd PARTY. (Villanueva & Tiansay, Law on
Sales, 102, 2016) Consideration for a valid contract of sale can be the
price and other valuable consideration; at the very
When subject matter is a right: It must be least, a true contract of sale must have price, which
transmissible. (Art. 1311) consist of valuable consideration (i.e., something
• Future inheritance cannot be sold (Art. 1347) that can be quantifiable by pesos and centavos) as
• Service cannot be sold (Art. 1348) part of its consideration (Test of value
consideration). (Republic v. Phil. Resources Dev.,
Generic things may be the object of a sale, but the G.R. No. L-10141, 1958)
obligation to deliver the subject matter can only be
complied with when the subject matter has been 3. Certain or ascertainable
made determinate (either by physical segregation or
particular designation) (Yu Tek & Co. v. Gonzales, Certain: expressed and agreed in terms of specific
G.R. No. L-9935, 1915) pesos and/or centavos (Art. 1469)

Ascertainable:
PRICE
a. Set by third persons (Art. 1469)
b. Set by the courts – only in cases where the
The sum stipulated as the equivalent of the thing
third person designated to fix the price, fixes
sold and also every incident taken into consideration
the same in bad faith or by mistake (Art. 1469)
for the fixing of the price, put to the debit of the
c. Set by reference to a definite day, particular
vendee and agreed to by him. (Inchausti & Co. v.
exchange or market (Art. 1472)
Cromwell, G.R. No. L-6584, 1991)
d. Set by reference to another thing certain (Art.
1472)
Note: Sale is valid when consideration is partly in
e. But never by only one party to the contract of
money and partly in another thing. (Art. 1468).
sale as it amounts to a potestative condition
(unless the price is accepted by the other party)
Requisites for a Valid Price (ReM-C) (Art. 1473)
1. Real
2. In Money or its equivalent Note: When the 3rd party is unwilling to set the
3. Certain or ascertainable (Francisco v. price, the parties may not ask the court to fix the
Desierto, G.R. No. 154117, 2009) price because the condition imposed on the contract
has not happened yet and thus, no enforceable
contract has arisen. (Art. 1474)

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IF PRICE CANNOT BE DETERMINED IN ANY 2. Perfection – the “birth” of the contract,

MANNER AND IS NEITHER CERTAIN NOR concurrence of all requisites; meeting of the
ASCERTAINABLE: The contract of sale is minds upon the object and price.
inefficacious (Art. 1474). 3. Consummation – the “death” of the contract,
parties perform their respective undertakings
Effect of Non-Payment of Price (Arts. 1475, 1479, 1493-1506; Villanueva &
Non-payment of price does not cancel or avoid the Tiansay, Law on Sales, 118-119, 2016)
sale, as the sale is still considered perfected. But it
is a cause for either: Rules:
a. Specific performance 1. Offer is floated Prior to acceptance, may be
b. Rescission (Heirs of Escanlar v. CA, G.R. No. withdrawn at will by offeror
119777, 1997) 2. Offer floated Without acceptance,
with a period extinguished when period
HOW PRICE IS DETERMINED has ended and may be
Price is determined by the contracting parties. (Art. withdrawn at will by offeror;
1473) right to withdraw must not be
arbitrary otherwise, liable to
INADEQUACY OF PRICE damage under Art. 19, 20, 21
of Civil Code
Effect of Gross Inadequacy of Price 3. Offer floated Extinguished by
General Rule: Mere inadequacy of the price does w/ condition happening/non-happening of
not affect the validity of the sale. (Bautista v. CA, condition
G.R. No. 158015, 2004)
4. Offer floated Continue to be valid
without period/ depending upon
Exceptions:
without condition circumstances of time, place
1. When there is fraud, mistake, or undue
and person
influence indicative of a defect in consent
thereby making the contract voidable. (Art. 5. Offer is floated Original offer is destroyed,
1470) and there is there is a new offer; cannot
2. When it shows that the parties really counteroffer go back to original offer
intended a donation or some other act or
contract thereby making the contract of 6. Offer is floated No authority of offeror to
sale void but may be valid as a contract of modify offer
donation or some other contract. (Art. 7. Offer accepted Proceed to perfected stage
1470) absolutely
3. In Judicial Sale, where the inadequacy is
shocking to the conscience of man (Pascua PERFECTION OF CONTRACT OF SALE
v. Heirs of Simeon, G.R. No. L-47717,
1988) and there is showing that, in the General Rule: A contract of sale is perfected at the
event of resale, a better price can be moment there is a meeting of the minds upon the
obtained, the contract of sale is void. (Bie v. thing which is the object of the contract and upon the
CA, G.R. No. L-17294, 1965) price; consensual contract (Art. 1475)

Note: If there was a failure of the contract to set a Exception: When the sale is subject to a
price but the buyer has already appropriated it, suspensive condition. (People’s Homesite v. CA,
then the buyer must pay a reasonable price. (Art. G.R. No. L-61623, 1984)
1474)
REQUIREMENTS FOR PERFECTION OF A SALE
MANNER OF PAYMENT MUST BE AGREED 1. When parties are face to face – when there is
UPON absolute acceptance of an offer that is certain
2. When thru correspondence or telegram – when
Formation of Contract of Sale the offeror receives or had knowledge of the
1. Policitacion/Negotiation Stage – offer acceptance (Art. 1319)
floated, acceptance is floated but they do not 3. When the sale is subject to a suspensive
meet; covers the period when parties indicate condition – from the moment the condition is
their interest but no concurrence of offer and fulfilled (People’s Homesite v. CA, G.R. No. L-
acceptance. 61623, 1984)

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Note: Qualified acceptance is a mere counter offer The non-payment of the

which needs to be absolutely accepted to give rise purchase price renders
to perfected contract of sale. (Art. 1319; Manila the contract to sell without
Metal Container v. PNB, G.R. No. 166862, 2006) force and effect. (Tumibay
v. Lopez, G.R. No.
Business ads are mere invitations to make an offer 171692, 2013)
except when it appears to be otherwise. (Art. 1325) REMEDIES
Specific Specific performance
Rules Governing Auction Sales performance or cannot be availed of when
• Sale is perfected by the fall of the hammer rescission under the contract to sell has
• Seller has the right to bid at the auction Articles 1191, 1592, been cancelled due to the
provided such right was reserved and notice and 1593. non-payment of the
was given to that effect. (Art. 1476) purchase price. The buyer
cannot demand the seller
1. CONTRACT OF SALE VS. to convey title when such
CONTRACT TO SELL buyer did not pay the
price, and the seller
CONTRACT OF CONTRACT TO SELL cannot demand the buyer
SALE to pay the price, since
TRANSFER OF TITLE failure to pay resulted in
the cancellation of the
Title passes to the Ownership is reserved in
contract to sell. (Pilipino
buyer upon delivery the seller and shall not
Telephone Corporation v.
of the thing sold (Art. pass to the purchaser
Radiomarine Network
1477) until fulfillment of certain
Phils. Inc., G.R. No.
conditions, such as full
160322, 2011)
payment of the purchase
price. (Art. 1478)
Remedy of rescission is
OWNERSHIP OF THE SELLER
not available because the
The seller has lost Title remains in the seller breach contemplated in
and cannot recover if the buyer does not rescission of contracts is
ownership of the comply with the condition the obligor’s failure to
thing sold and precedent, which comply with an obligation
delivered (Arts. payment of the price at already extant, not a
1477, 1496) until the time specified in the failure of a condition to
and unless the contract. (Tuazon v. render binding that
contract of sale itself Garilao, G.R. No. obligation. A non-existent
is resolved and set 143673, 2001) obligation cannot be
aside. subject of rescission.
Note: It must be (Diego v. Diego, G.R. No.
stipulated that ownership 179965, 2013)
in the thing shall not pass
(De Leon, Comments and Cases on Sales and
to the buyer until full
Lease, 21-23, 2014)
payment of the price. (Art.
1478)
2. OPTION CONTRACT
PAYMENT OF THE PRICE
Non-payment of the Full payment of the price
A contract granting an exclusive right in one person,
price is a negative is a positive suspensive
for which he has paid a separate consideration, to
resolutory condition. condition, the failure of
buy a certain object within an agreed period of time.
(Art. 1179) which is not a breach of
(Art. 1479)
contract but simply an
event that prevents the
Note: There is no presumption of consideration, it
obligation of the seller to
needs to be proven (Sanchez v. Rigos, G.R. No. L-
convey title to the buyer.
25494, 1972)
(Uy & Sons, Inc. v.
Valbueco Inc., G.R. No.
Elements of Valid Option Contract:
179594, 2013)
1. Consent – meeting of the minds

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2. Subject matter – an option right to an or, if an acceptance has been made, before
“unaccepted unilateral offer to buy or sell”, or the offeror’s coming to know of such fact,
an “accepted promise to sell, or to buy”: by communicating that withdrawal to the
a. A determinate or determinable offeree.
object
b. For a price certain (including Exception: However, the offeree is still
manner of payment) protected because, while the contract is not
3. Prestation – a consideration separate from supported by separate consideration, the
purchase price for option given, i.e., Option main contract is deemed to contemplate a
(Villanueva & Tiansay, Law on Sales, 126, price of the option incorporated therein.
2016)
b. The right to withdraw, however, must not be
Characteristics of Option Contract: (SPNO- exercised whimsically or arbitrarily;
CUUP) otherwise, it could give rise to a damage
1. Not the contract of sale by itself, Separate claim under Article 19 (Abuse of Rights).
and distinct c. If the period has a separate consideration,
2. Nominate a contract of “option” is deemed perfected,
3. Principal - but can be attached to other and it would be a breach of contract to
principal contracts withdraw the offer during the agreed period.
4. Onerous d. The option is an independent contract in
5. Commutative itself, and it is to be distinguished from the
6. Unilateral – versus contract of sale which is proposed sales contract. If the optioner-
bilateral offeror withdraws the offer before its
7. Preparatory acceptance by the optionee-offeree, the
8. Unaccepted or unexercised contractual offer optionee-offeree may not sue for specific
performance on the proposed contract
Situations in an Option Contract: since it has not been perfected; however,
the optioner-offeror is liable for damages
a. With separate consideration for breach of the option.
• Option contract is valid e. In these cases, if the consideration is
• Offeror cannot withdraw offer until after intended to be part of the consideration for
expiry period the main contract with a right of withdrawal
• Subject to damages for breach of option on the part of the optionee, the main
contract if offeror withdraws during the contract could be deemed perfected; a
time stipulated but not to specific similar instance would be an “earnest
performance because an option contract money” in sale that can evidence its
does not create an obligation to give perfection. (Ang Yu Asuncion v. Court of
(Tuazon v. Del Rosario-Suares, G.R. No. Appeals, G.R. No. 109125)
168325, 2010)
3. RIGHT OF FIRST REFUSAL
b. Without separate consideration
A right of first refusal (“RFR”) covers a situation
Even if the option without separate consideration wherein a promise on the part of the owner of a
constitutes a certain offer, still it must be exercised property is made that if he decides to sell the
within the option period and the acceptance must property in the future, he will first offer the same to
still be absolute. (Tuazon v. Del Rosario-Suares, the promisee.
G.R. No. 168325, 2010)
It creates a promise to enter into a contract of sale
Note: In essence, it is not really without a in the event the seller decides to sell his/her property
separate consideration as the consideration is and it has no separate consideration. It is not subject
deemed embedded when the parties to specific performance because there is no
contractual relationship here and it is not an
negotiated on the price.
obligation to give (not a real contract).
Important rules on options:
a. If the period for the exercise of the option is If the buyer decides to sell the property at any
not supported by a separate consideration, time within the period of 10 years, the buyer is
the offeror is still free and has the right to obligated to inform the seller that he is selling
withdraw the offer before its acceptance, the property.

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4. EARNEST MONEY IN CONTRACT

Only when the seller refuses/says “no” can the OF SALE AND CONTRACT TO
buyer sell it to a third party. SELL

New doctrine: May be subject to specific Earnest Money (Art. 1482)

performance in a specific instance. • Money given as part of purchase price
• Acceptance is the proof that contract of sale
Effect of new doctrine: While valid option contract exists
is not subject to specific performance, right of first • Nothing in law prevents parties from
refusal may be subject to specific performance. It treating earnest money differently
recognizes recovery of damages based on the
abuse of rights doctrine. The consideration for the Option Money Distinguished from Earnest
RFR is technically the consideration for the mother Money
contract as the RFR has value to the party in whose
favor it is granted. In practice, the RFR may result in OPTION MONEY EARNEST MONEY
the lease rentals being adjusted downwards to
Given as distinct Given as part of the
account for the value of the RFR. consideration for an purchase price
option contract
Option Contract Distinguished from Right of
Applies to a sale that is Applies when there is
First Refusal
not perfected while the already a sale
OPTION CONTRACT RIGHT OF FIRST
option is not exercised
REFUSAL
When given, the option When given, buyer is
Principal contract; Accessory; cannot holder is not required bound to pay the
stands on its own stand on its own to exercise the option balance
Needs separate Does not need (either to buy or sell).
consideration separate (Oesmer v. Paraiso Development Corporation, G.R.
Note: Not consideration No. 157493, 2007)
necessarily because it is an
true all the agreed upon term in a
time principal contract
B. CAPACITY TO BUY OR SELL
Subject matter and price Price not relevant to
must be valid exercise the right of CAPACITY OF PARTIES
first refusal. General rule: All persons who are authorized in this
Not conditional Conditional ? Code to obligate themselves may enter into a
contract of sale (Art. 1489); as long as these
Note: Theoretically, persons are with civil capacity.
this is also conditional
When one of the parties is incapable of giving
consent, the contract of sale is voidable (Art. 1390),
Ex: “Provided that the subject to annulment or ratification. (Art. 1393)
buyer exercises the
option to buy within 1 1. Absolute incapacity
year from the date of
sale.” Parties Disqualified to Enter into Sale Contract:
Not subject to specific Subject to specific 1. Minors (Art. 1327)
performance performance 2. Insane and Demented Persons (Art. 1327)
3. Deaf-Mutes who do not know how to write (Art.
Mutual promise to buy and sell (Art. 1479) 1327)
1. Promise to buy and sell a determinate thing for Also includes state of drunkenness and
a price certain: reciprocally demandable; hypnotic spell (Art. 1328)
2. Accepted unilateral promise to buy or to sell:
binding upon the promissor if promise General Rule: Status of Contract: Voidable, BUT
supported by a consideration distinct from the it is subject to annulment or ratification.
price.
Exception: Where necessaries are sold and
delivered to minors or other persons without
capacity to act, he must still pay a reasonable price

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therefore, thus, the resulting contract is valid and not SPECIAL DISQUALIFICATIONS
voidable. (Art. 1489) Any others specially disqualified by law (Art. 1491
[6])
2. Relative Incapacity
Note: These contracts are void for public policy.
a. Spouses - A spouse may, without the consent of They cannot be ratified neither can the right to set
the other spouse, enter into sales transactions in up the defense of illegality be waived. (Rubias v.
the regular pursuit of their profession, vocation, Batiller, G.R. No. L-35702, 1973)
or trade. (Family Code, Arts. 73, 96, 124)

General Rule: The husband and the wife cannot sell C. OBLIGATIONS OF THE VENDOR
property to each other. The contract is void. There
is no transfer of ownership, thus the creditors may The vendor (seller) is bound to transfer the
go after the property. (Modina v. CA, G.R. No. ownership of and deliver, as well as warrant the
109355, 1999) thing which is the object of the sale. (Art. 1495)
Exceptions: Obligations of the vendor:
1. When a separation of property was agreed 1. Preserve the subject matter – proper diligence
upon in the marriage settlement (Art. 1490) of a good father of a family unless law or
2. When there has been a judicial separation of parties stipulate another standard (Art. 1163)
property under Art. 191 (Art. 1490) 2. Deliver – transfer ownership and deliver object
(Art. 1495)
Note: Prohibition likewise applies to common-law 3. Deliver fruits and accessories existing from the
spouses (Matabuena v. Cervantes, G.R. No. L- time of perfection (Arts. 1164, 1166, 1537)
28771, 1971) 4. Warrant subject matter against eviction and
hidden defects (Arts. 1546-1581)
TRUST RELATIONSHIPS
Objects that the vendor has to deliver:
Two groups of parties prohibited from acquiring 1. The thing sold (Art. 1495)
by purchase certain properties: (GAAE - 2. Fruits, belong to the buyer from the day the
PEJJOL) (Art. 1491) contract of sale is perfected (Art. 1537)
3. Accessions and accessories, in the condition
1. Guardian/Agent/Executors and in which they were upon the perfection of the
Administrators sale (Art. 1537)
• Direct or indirect
• May be “ratified” since only private General Rule: Seller need not be the owner of the
wrong is involved, i.e., really in the subject matter at the time of perfection: sufficient
form of entering into a new contract that he is the owner at the time of delivery. (Art.
1459)
2. Public Officers and Employees/ Justices
and Judges/ Officers of Court/ Lawyers Exception: Foreclosure sale (mortgagor must be
• Cannot be ratified since public wrong absolute owner) (Art. 2085)
is involved
Note: A perfected contract of sale cannot be
Requisites for the prohibition to apply to challenged on the ground of the seller’s non-
attorneys and their clients’ properties:
ownership of the thing sold at the time of the
1. Existence of attorney client relationship;
2. Property is the subject matter in litigation; perfection of the contract. It is at delivery that
3. While in litigation (from filing of complaint to the law requires the seller to have right to
final judgment) transfer ownership of the thing sold. (Cavite
Development Bank v. Sps. Lim, G.R. No.
Legal Status of Contract 131679, 2000)

Void (case law) – guardian/executor/public DELIVERY OF SUBJECT MATTER

officers/officers of the court. (Rubias v. Batiller, G.R.
No. L-35702, 1973) Delivery - “the absolute giving-up of the control and
custody of the property on the part of the vendor,
Unenforceable (civil code) – agent; VALID if with and the assumption of the same by the vendee”
consent (Art. 1491)

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(Equatorial Realty Dev. v. Mayfair Theater, G.R. No. Requisites:(PG)

133879, 2001) 1. Possession of movable
2. Made in Good faith (Art. 559)
Two Types of Delivery:
1. Actual - physical delivery Exceptions:
2. Constructive 1. Owner lost movable – owner can recover by
a. Execution of Public Instrument (Art. 1498) reimbursing price, including those acquired in
only produces the effect of delivery when: public sale or auction, provided in good faith
i. The thing sold is subject to control of (not a fencer) (Art. 559)
seller at the time of execution of 2. Owner is unlawfully deprived (stolen or
instrument. (Addison v. Felix, G.R. delivered without intention of transferring title)
No. L-12342, 1918); and – owner can recover w/o reimbursing price
ii. Such control should remain for a (Art. 559)
reasonable period after execution of 3. Bought in a merchant store – owner cannot
the Instrument. (Power Commercial recover even if unlawfully deprived (Art. 1505)
and Industrial Corp. v. CA, G.R. No.
119745, 1997) Exceptions to the Exceptions:
b. Constitutum Possessorium (Art. 1500) – 1. Movable is bought at public sale – owner can
the seller held possession of the subject only recover after reimbursing price
matter (real property) in the concept of 2. Acquired in good faith and for value from
owner, and pursuant to the sale, the seller auction
continues to hold physical possession but
no longer in the concept of the owner SALE BY NON-OWNER OR BY ONE HAVING
(owner to lessee) VOIDABLE TITLE
c. Traditio Brevi Manu – the would-be buyer
was already in the possession (i.e., as Perfection Stage
lessee) of the subject matter (real • Sale by owner – VALID
property) and pursuant to the sale, he • Sale by non-owner – VALID (Arts. 1459, 1475)
would now hold possession as owner
d. Traditio Longa Manu – delivery by mere Reason why both sales are valid: ownership is
consent or agreement. necessary only at time of delivery; at perfection
stage, no obligation on part of seller to transfer
SALE BY A PERSON NOT THE OWNER AT THE ownership (Villanueva, Law on Sales, 294, 2016)
TIME OF DELIVERY (Arts. 1462, 1505, 1459)
Law on estoppel further bolsters it: title passes by
Rules on Legal Effects of Sale by a Non-owner operation of law to grantee when person who is not
owner of the goods sold delivers it and later on
General Rule: If sale is by a non-owner, buyer acquires title thereto (Art. 1434)
acquires no better title than seller had. (Art. 1505)
Since valid, action to annul is improper; there is
Exceptions: already a perfected contract.
1. Owner by his conduct is precluded from
denying seller’s authority (Estoppel) (Art. 1434) Consummation Stage
2. Contrary is provided for in recording laws (Art.
1505; P.D. 1529) Contract of sale is valid because it has passed
3. Sale is made under statutory power of sale or perfected stage, despite seller not being the owner
under order of a court of competent jurisdiction or seller having no authority to sell
(Art. 1505) • What is void is the transfer of title -- ownership
4. Sale is made in a merchant’s store in did not pass
accordance with code of commerce and • Effect: buyer acquired no better right than
special laws. (Art. 1505) transferor (Art. 1505)
• Legal effect: CAVEAT EMPTOR – BUYER
Title as to Movable Properties BEWARE but Buyer always has cause of
action against the Seller
General Rule: Possession is equivalent to title (Art.
559)

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SALE BY SELLER WITH VOIDABLE TITLE IN Double Sales Rules according to Art. 1544:
GOOD FAITH and WITHOUT NOTICE OF THE MOVABLE IMMOVABLE
DEFECT First to possess in a. First to register in
1. Perfection stage good faith shall prevail good faith shall
(Art. 1544) prevail;
Valid sale – buyer acquires title of goods b. In case no
registration is
2. Consummation stage made, then first to
possess in good
Valid sale – if title has not yet been avoided, faith shall prevail;
buyer becomes owner of the goods under the c. No registration
condition that the sale: and no
a. was made in good faith possession in
b. is for value good faith, then
c. is without notice of seller’s defect of title the person who
(Art. 1506) presents oldest
title in good faith,
shall prevail. (Art.
D. DOUBLE SALE 1544)

General Rule: FIRST IN TIME, PRIORITY IN Buyer in Good Faith – one who purchases and
RIGHT (Art. 1544) pays a fair price for a property without notice that
another has an interest or right to it. (Amoguis v.
When general rule does not apply: when not all Ballado, G.R. No. 189626, 2018.)
requisites embodied in Art. 1544 concur.
Lis pendens – notice that subject matter is in
Requisites for Double Sales to Exist (VOCS) litigation (Sps. Lim v. Vera Cruz, G.R. No. 143646,
1. That two (or more) sales transactions in the 2001) is a form of registration accorded priority right.
issue must pertain to exactly the same subject
matter, and must be valid sales transactions. A buyer cannot be considered a transferee in good
2. That two (or more) buyers at odds over the faith if it was aware of the title’s notices of lis
rightful ownership of the subject matter must pendens. (Register of Deeds of Negros Occidental
each represent conflicting interests; and v. Anglo, Sr., G.R. No. 171804, 2015)
3. That two (or more) buyers at odds over the
rightful ownership of the subject matter must Adverse claim – notice that somebody is claiming
each have bought from the very same seller. better right (Gardner v. CA, G.R. No. L-59952, 1984)
(Spouses German v. Spouses Santuyo, G.R. is a form of registration accorded priority right.
No. 210845, January 22, 2020)
Possession – both actual and constructive (Roman
Note that the Court applied this in this case even if Catholic Church v. Pante, G.R. No. 174118, 2012)
the buyer in the contract to sell was not in default
since the seller accepted payment after due date. Registration – any entry made in the books of the
Seller however must reimburse payments made to registry, including both registration in its ordinary
the buyer even if he has only paid less than 2 years and strict sense, and cancellation, annotation, and
of installments because he was not in default. Court even marginal notes. It is the entry made in the
distinguished this from earlier case of Abarquez v. registry which records solemnly and permanently
CA even if in that case, one also involved a contract the right of ownership and other real rights. (Cheng
to sell – because in Abarquez, the seller already v. Genato, G.R. No. 129760, 1998)
delivered to the buyer who accepted and took • Registered under Torrens system – 1544
possession, and even constructed a house on the applies
land under installment sale. (Sps. Domingo v. Sps. • Not registered under the Torrens system –
Manzano, G.R. No. 201883, 2016) 1544 still applies

If 2nd sale is a judicial sale (made by way of levy on

execution), buyer merely steps into the shoes of the
judgment debtor. Outside of such situation – must
apply to conflicting sales over the same
unregistered parcel of land. If sale 1 occurs when
land is not yet registered and sale 2 is done when

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land is already registered – apply first in time, F. RECTO LAW

priority in right.
Coverage: Sale on installment (two or more
Requisite Diligence for Buyer in Good Faith: installments required) and financing transaction
1. Diligence in verifying the validity of the title (Equitable Savings Bank v. Palces, G.R. No.
of the property; 214752, 2016) on movable property and contracts
2. Diligence in inquiring into the authority of of lease of movable property with option to purchase
the transacting spouse to sell conjugal (PCI Leasing and Finance v. Giraffe-X Creative
property in behalf of the other spouse. Imaging, G.R. No. 142618, 2007)
(Aggabao v. Parulan, G.R. No. 165803,
2010). Contract to sell is not covered. (Visayan Sawmill Co.
v. CA, G.R. No. 83851, 1993).

E. EFFECTS OF LOSS OF THING SOLD Remedies available under the Recto Law:
In a sale of personal property, the price of which is
General Rule payable in installments, the seller may exercise the
Legal consequences from point of perfection are the following remedies: (REF)
same in both legal systems: upon perfection of an 1. Exact fulfillment of the obligation, should the
unconditional contract of sale involving specific or buyer fail to pay any installment;
determinate subject matter, the risk of loss 2. Rescind the sale, should the buyer’s failure to
deterioration and the benefits of fruits and pay cover two or more installments;
improvements, were for the account of the buyer. 3. Foreclose the chattel mortgage, if one is
constituted, should the buyer’s failure to pay
If the subject matter is generic, simply replace item. cover two or more installments (Art. 1484)
(Art. 1263)
Note: This also applies to contracts purporting to be
WHO BEARS RISK OF LOSS/ DETERIORATION/ leases of personal property with option to buy, when
FRUITS BEFORE PERFECTION the lessor has deprived the lessee of the possession
• Res perit domino or enjoyment. (Art. 1485)
• The seller is the owner, so he bears risk of
loss. (Art. 1504) Sale on installment: Payment by several partial
payments (two or more) in small amount (Levy
WHO BEARS RISK OF LOSS/ Hermanos, Inc. v. Gervacio, G.R. No. L-46306,
DETERIORATION/FRUITS AT PERFECTION 1939)
• Res perit domino
• Contract is merely inefficacious because Rationale of the law: Buyer is lulled into thinking
loss of the subject matter does not affect that he could afford because of small amounts per
the validity of the sale installment and at the same time to remedy abuse
• Seller cannot anymore comply with of commercial houses. (Manila Trading and Supply
obligation so buyer cannot anymore be Co. v. Reyes, G.R. No. L-43263, 1935)
compelled to pay the price. (Arts. 1493,
1494) Nature of remedies: Alternative, not cumulative
(Nonato v. IAC, G.R. No. L-67181, 1985)
WHO BEARS RISK OF LOSS/ DETERIORATION/
FRUITS AFTER PERFECTION BUT BEFORE REMEDIES are NOT CUMULATIVE but are
DELIVERY ALTERNATIVE and EXCLUSIVE
• Loss – confused state
o Paras: BUYER 1. Specific Performance
o Tolentino: SELLER
• Deterioration and fruits - Buyer bears loss General Rule: Once chosen, can no longer rescind
and claims the fruits. (Art. 1538, 1189) nor foreclose mortgage.

AFTER DELIVERY Exception: After choosing specific performance but

• Res perit domino the same becomes impossible, rescission may be
• Delivery extinguishes ownership of the pursued subsequently. (Villanueva & Tiansay, Law
seller and creates a new one in favor of the on Sales, 352-353, 2016
buyer and, therefore, buyer bears risk of
loss. (Art. 1504)

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2. Rescission period for he should have paid at least two

years of installments to avail of the rights under
When chosen, there is a correlative obligation to this section.
restitute.
Note: This right can be exercised only once in
every five (5) years of the life of the contract
Stipulations that installments paid are forfeited are
and its extensions, if any.
valid if not unconscionable.
2. To be refunded the cash surrender value of his
Deemed chosen when: payments equal to 50% of his total payments if
1. Notice of rescission is sent; the contract is cancelled. But if he has paid five
2. Takes possession of subject matter of sale; years or more, he is entitled to an increase of
3. Files action for rescission; 5% every year and so on but the cash
4. Barring effect on recovery of balance. surrender value shall not exceed 90% of his
(Villanueva & Tiansay, Law on Sales, 353-356, total payments. (McLaughlin v. CA, G.R. No. L-
2016) 57552, 1986)

The actual cancellation of the contract referred

to above shall take place only:
G. MACEDA LAW After 30 days from receipt by the buyer of the
notarial notice of cancellation or demand for
Rationale of the Law rescission, AND
Public policy to protect buyers of real estate on
installment payments against onerous and Upon full payment to the buyer of the cash surrender
oppressive conditions. value (R.A. No. 6552, Sec. 3)
Covered transactions Note: Buyer may update payment during the 30 day
Applies to all sale of residential real estate on waiting period which will render the cancellation
installments including Contracts to Sell and those ineffective.
financed through banking institutions (R.A. No.
6552, Sec. 3) In the computation of the total number of installment
payments the following are included:
Excluded: 1. Down payment and
Industrial real estate 2. Deposit or option money (R.A. No. 6552,
Commercial real estate Sec. 3)
Sale to tenants under agrarian laws (R.A. No. 6552,
Sec. 3) Rights of the Buyer under Maceda Law with less
than two (2) years of installments: (R.A. No. 6552,
Requisites of Sec. 3 of Maceda Law: (FReT) Sec. 4)
1. Failure to pay installments was due to reasons, 1. Still has the right to pay within a grace
other than failure of the developer to develop period of not less than sixty (60) days from
the subdivision or condominium according to the date the installment became due.
the approved plan and to comply with such 2. If the buyer fails to pay the installment due
within the time limit; at the expiration of the grace period, i.e. 60
2. Only covers Residential lots including days, the seller may cancel the contract
condominium units, excluding, sales to after 30 days from receipt by the buyer of
tenants; the notice of cancellation or demand for
3. The buyer has paid at least Two years of rescission of the contract by a notarial act.
installments. (R.A. No. 6552, Sec. 3)
Note: Here, the buyer is not entitled to any
Rights of the Buyer under Maceda Law with at refund
least two (2) years of Installment: (R.A. No. 6552,
Sec. 3) Other rights granted under the Maceda Law:
1. To pay, without additional interest, the unpaid (R.A. No. 6552, Sec. 5 & 6)
installments due within the total grace period 1. Sell rights to another;
earned by him. Said grace period is fixed at the 2. Assign the same to another person;
rate of one-month grace period for every one 3. Reinstate contract by updating during grace
year of installments payments made. Thus, period and before actual cancellation;
here the buyer has at least two months grace 4. Deed of Sale to be done by notarial act;

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5. To pay in advance any installment or the full • Goods sold without stipulation as to
balance of price anytime without interest and Credit
have such full payment annotated in certificate • Goods sold on Credit but term of credit
of title. has expired
• Buyer becomes Insolvent (Art. 1527)
Purpose of the law: Protect buyers in installments b. When part of goods delivered, may still
against oppressive conditions. Applies to contracts exercise right on goods undelivered
even before the law was enacted. (R.A. No. 6552,
Sec. 2; Siska Dev. Corp. v. Office of the President, Instances when possessory lien is lost:
G.R. No. 93176, 1994) 1. Seller delivers goods to carrier for transmission
to buyer without reserving ownership in goods
Note: Stipulations contrary to the provisions of or right to possess them
Sections 3, 4, 5 and 6 are null and void. (R.A. No. 2. Buyer or his agent lawfully obtains possession
6552, Sec. 7) Waiver of the required notice is of goods
oppressive. 3. Waiver (Art. 1529)
4. When he parts with goods (still has stoppage
in transitu)
H. RIGHTS OF UNPAID SELLER
Note: Notice by seller to buyer not essential.
UNPAID SELLER
A seller of the goods is deemed to be an unpaid STOPPAGE IN TRANSITU
seller either: • Good are in transit
a. When the whole of the price has not been • Remedy is available only when buyer is
paid or tendered; or insolvent
b. When the seller received bill of exchange or
negotiable instrument as a condition for Requisites when goods are in transit (DR)
payment and the condition has been 1. From the time goods are Delivered to carrier
broken by reason of the dishonor of for purpose of transmission to buyer
instrument, the insolvency of the buyer, or 2. Goods Rejected by buyer and carrier continues
otherwise. (Art. 1592) to possess them (Art. 1531)

Requisites of Unpaid Seller: (PUG) When goods no longer in transit

1. Physical possession is with seller a. Reached point of destination;
2. Seller is Unpaid b. Before reaching destination, buyer or his agent
3. Subject matter – Goods obtains delivery of the goods;
c. Goods are supposed to have been delivered to
Special remedies of unpaid seller: (PSRR) buyer but carrier refused;
1. Possessory lien d. Bailee or carrier acknowledges that he is
2. Stoppage in Transitu holding the goods for the buyer or his agent.
3. Special right of Re-sale (Art. 1531)
4. Special right to Rescind (Art. 1526)
How is right exercised
Note: Hierarchical Application – only when unpaid 1. Obtain actual possession of goods
seller has exercised possessory lien or stoppage in 2. Give notice of claim to carrier/bailee in
transitu can the seller proceed with his other special possession thereof
rights of resale or to rescind. (Villanueva & Tiansay,
Law on Sales, 335, 2016) Note: Notice by seller to buyer is not required; notice
to carrier is what is essential (Art. 1532)
POSSESSORY LIEN
SPECIAL RIGHT TO RESELL THE GOODS
Seller is not bound to deliver if buyer has not paid
him the price. (Art. 1524) Can be exercised under the following instances:
a. Goods are perishable;
Right to retain cannot be availed when seller does b. Stipulated the right of resale in case buyer
not have custody (Art. 1526) defaults in payment;
a. Exercisable only in following c. Buyer in default on payment of price for
circumstances:(CCI) unreasonable time. (Art. 1533)

Note: Notice by seller to buyer not essential

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Why ‘special’? There are things which seller Period to redeem:

cannot do in ordinary sale: No period agreed upon – 4 years from date of
1. Ownership is with buyer but seller can sell contract
goods
2. Title accorded to buyer is destroyed even Period agreed upon – should not exceed 10 years;
without court intervention (Villanueva & if it exceeded, valid only for the first 10 years.
Tiansay, Law on Sales, 342, 2016) When period to redeem has expired and there has
been a previous suit on the nature of the contract –
Note: In ordinary sale, need to go to court to destroy seller still has 30 days from final judgment on the
transfer of ownership. basis that contract was a sale with pacto de retro.
(Art. 1606)
SPECIAL RIGHT TO RESCIND
Rationale: No redemption due to erroneous belief
Can be exercised under the following instances: that it is equitable mortgage which can be
1. Expressly stipulated extinguished by paying the loan.
2. Buyer is in default for unreasonable time (Art.
1534) This refers to cases involving a transaction where
one of the parties contests or denies that the true
Note: Notice needed to be given by seller to buyer. agreement is one of sale with the right to
repurchase; not to cases where the transaction is
REMEDIES OF SELLER IN CASE OF SALE OF conclusively a pacto de retro sale. (Villanueva &
IMMOVABLES Tiansay, Law on Sales, 486, 2016)

General Remedies Note: When period has expired, and seller has
1. Specific Performance with damages; or allowed the period of redemption to expire – seller
2. Rescission with damages is at fault for not having exercised his rights so he
should not be granted a new period.
Anticipatory Breach
1. Seller has reasonable grounds to fear loss of Effect When There is No Redemption Made
immovable sold and its price, sue for Jurisprudence before the NCC: buyer a retro
Rescission automatically acquires full ownership
2. Non–payment of price, sue for Rescission (Art. Under present Art. 1607: there must be judicial order
1591) before ownership of real property is consolidated in
the buyer a retro

I. CONVENTIONAL REDEMPTION How is Redemption Effected

Seller a retro must first pay the following: (PENT)
Redemption 1. The Price of the thing sold
2. Expenses of the contract and other
There is conventional redemption when the seller legitimate payments made by reason of the
reserved for himself the right to repurchase the thing sale
sold, with the obligation to return: 3. Necessary and useful expenses made on
1. The price of the sale; the thing sold (Art. 1616)
2. The expenses of contract, 4. Valid Tender of payment is sufficient
3. Other legitimate payments, (Legaspi v. CA, G.R. No. L-45510, 1986)
4. The necessary and useful expenses made on • Mere sending of notice without valid
the thing sold (Art. 1601) tender is insufficient.
• Failure to pay useful and unnecessary
Note: This only extinguishes obligations pertaining expenses entitles vendee to retain
to contract of sale. It does not extinguish contract land unless actual reimbursement is
itself. made

The right is exercised only by the seller in whom In Case of Multi-Parties

right is recognized in the contract or by any person a. When an undivided thing is sold because
to whom right was transferred; It must be in the co-owners cannot agree that it be allotted
same contract. (Villanueva & Tiansay, Law on to one of them – vendee a retro may
Sales, 474-475, 2016) compel the vendor to redeem the whole
thing (Art. 1611)

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b. When an undivided thing is sold by co- The essential requisites of an equitable mortgage
owners/co-heirs, vendors a retro may only are:
exercise his right over his respective share; 1. The parties entered into a contract
vendee a retro may demand that they must denominated as a contract of sale; and
come to an agreement first and may not be 2. Their intention was to secure an existing debt
compelled to consent to a partial by way of a mortgage. (Molina vs. CA, G.R. No.
redemption (Art. 1612) 125755, 2003)
c. When rights of co-owners over an
undivided thing is sold as regards to their A contract with right to repurchase may be deemed
own share – vendee retro cannot compel to be an equitable mortgage under the following
one to redeem the whole property conditions (IPERTI):
d. Should one of the co-heirs/co-owners 1. Price of sale with right to repurchase is
succeed in redeeming the property – such unusually Inadequate
vendor a retro shall be considered as 2. Seller remains in Possession as lessee or
trustee with respect to the share of the otherwise
other co-owners/co-heirs. (De Guzman v. 3. Upon or after expiration of right to
CA, G.R. No. L-47378, 1987) repurchase, another instrument Extending
the period of redemption or granting new
Fruits period is executed
What controls is the stipulation between parties as 4. Buyer Retains for himself a part of the
regards the fruits. purchase price
5. Seller binds himself to pay Taxes on thing
If none: sold
1. At time of execution of the sale a retro, 6. Any other case where the real Intention of
there are visible or growing fruits – there parties is to secure the payment of a debt
shall be no pro-rating at time of redemption or performance of other obligation (Art.
if no indemnity was paid by the vendee a 1602)
retro.
2. At time of execution sale a retro, there be Note: In case of doubt – in determining whether it is
no fruits but there are fruits at time of an equitable mortgage or a sale a retro, the sale
redemption – pro-rated between vendor a shall be construed as an equitable mortgage. (Art.
retro and vendee a retro giving the vendee 1603). Note that in the realm of securities such as
a retro a part corresponding to the time he shares of stocks, the parties can enter in to a
possessed the land. (Art. 1617) repurchase agreement which essentially is a
collateralized or secured loan structured as a sale.
PRE-EMPTION REDEMPTION The seller is actually a borrower while the buyer is,
Arises before sale Arises after sale in reality, a creditor. The shares of stock “bought”
No rescission There can be rescission are actually collateral.
because no sale of the original sale
exists yet What to Look for in Determining Nature of Contract
Action is directed Action is directed 1. Language of the contract
against prospective against buyer 2. Conduct of parties – to reveal real intent
seller
Remedies available to the vendor:
1. Reformation of contract (Art. 1359)
J. EQUITABLE MORTGAGE 2. Action for declaration of nullity of deed of
sale
One which lacks the proper formalities, form of 3. Action for specific performance (Tolentino
words, or other requisites prescribed by law for a v. CA, G.R. No. 128759, 2002); or
mortgage, but shows the intention of the parties to 4. Foreclosure of the mortgage in equity
make the property subject of the contract as security (Briones-Vasquez v. CA, G.R. No. 144882,
for a debt and contains nothing impossible contrary 2005)
to law. (Cachola v. CA, G.R. No. 97822, 1992)
Rationale Behind Provision on Equitable
Any money, fruits, or other benefit to be received by Mortgage:
the vendee as rent or otherwise shall be considered 1. Circumvention of usury law
as interest and is subject to usury laws. 2. Circumvention of prohibition against pactum
commissorium – creditor cannot appropriate
the things given by way of pledge or mortgage;

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remedy here is foreclosure. The real intention

of parties is that the pretended purchase price
is money loaned and to secure payment of the
loan, sale with pacto de retro is drawn up.
(Heirs of Reyes, Jr. v. Reyes, G.R. No. 158377,
2010)

Note: Republic Act No. 11057 or the Personal

Property Security Act has expressly repealed Art.
2088 on the prohibition against pactum
commissorium.

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TOPIC CASE TITLE DOCTRINE

Intention Is the Primary Consideration for True Dizon v. Matti, Jr., G.R. No. 215614 (Resolution), In Suntay v. Court of Appeals, the SC held that
Nature of Contract March 27, 2019 “[t]hough the notarization of the deed of sale in
question vests in its favor the presumption of
regularity, it is not the intention nor the function of
the notary public to validate and make binding an
instrument never, in the first place, intended to
have any binding legal effect upon the parties
thereto. The intention of the parties still and
always is the primary consideration in
determining the true nature of a contract” and
“even an apparently valid notarization of a
document does not guarantee its validity”.

Presumption of Valid Consideration Sepe v. Heirs of Kilang, G.R. No. 199766, April Article 1354 of the Civil Code provides that there
10, 2019 is a presumption that even though the contract did
not state a case, a lawful one exists and it is
incumbent upon the party impugning the contract
to prove the contrary. In the case at hand, since
both the DOS (deed of sale) and COS (contract
of sale) were public documents, the oral evidence
of lack of consideration were not sufficient to
overthrow the presumption of the existence of a
valid consideration.

Public Instrument, Mere Convenience Dalion v. CA, 182 SCRA 872,1990 Article 1358, which requires the embodiment of
certain contracts in a public instrument, is only for
convenience, and registration of the instrument
only adversely affects third parties. Formal
requirements are, therefore, for the benefit of third
parties; and non-compliance therewith does not
adversely affect the validity of the contract and the
rights and obligations of the parties thereunder.

Rights are Best Enforced If Parties State That Secuya v. Vda. De Selma, G.R. No. 136021, 2000 While a sale of land appearing in a private deed
They Are Bound is binding between the parties, it cannot be
considered binding on third persons if not
embodied in a public instrument and recorded in
the Registry of Deeds.

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Importance of Proper Execution Tamayao v. Lacambra, G.R. No. 244232, Although the execution of a deed of sale is
November 3, 2020 absolutely unnecessary for validity, it is
nevertheless important for 1) the enforceability of
executory contracts under Article 1403 of the Civil
Code, 2) the convenience of the parties under
Article 1358 of the same Code, and 3) the
eventual registration of the sale with the land
registration authority under P.D. 1529. A sale
would be perfectly valid even if no deed
whatsoever had been executed, subject only to
the requirements of the Statute of Frauds. As
such, the parties may prove the existence of a
perfected or performed contract of sale through
any competent evidence available, be it an
original deed, a copy thereof, a memorandum, or
even testimony on the prior, subsequent, and
contemporaneous acts of the parties.

Quantity of Subject Matter, When Essential National Grains Authority v. IAC, G.R. No. 74470, Quantity of subject matter is not essential for
1989 perfection, but quantity is essential if it goes into
the determinability of the subject matter and the
price or consideration in the contract; Determine
the nature and quality of subject matter.

When Obligation to Deliver Determinate Thing Yu Tek & Co. v. Gonzales, G.R. No. L-9935, 1915 Generic things may be the object of a sale, but
Arises; Generic Thing the obligation to deliver the subject matter can
only be complied with when the subject matter
has been made determinate (either by physical
segregation or particular designation)

Test of Intention Rongavilla v. CA, G.R No. 83974, 1998 When at the perfection of the contract of sale,
there is every intention on the buyer to pay the
price, and every expectation on the part of the
seller to receive such price as the value of the
subject matter he obligates himself to deliver.
(Test of intention)

Test of Value of Consideration Republic v. Phil. Resources Dev., G.R. No. L- Consideration for a valid contract of sale can be
10141, 1958 the price and other valuable consideration; at the
very least, a true contract of sale must have price,
which consist of valuable consideration (i.e.,

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something that can be quantifiable by pesos and

centavos) as part of its consideration (Test of
value consideration).

Fraud; Constructive Trust; Prescription Spouses Aboitiz v. Spouses Po, G.R. Nos. Art. 1456 of the CIVIL CODE provides that a
208450 & 208497, 2017 person acquiring a property through fraud
becomes an implied trustee of the property’s true
and lawful owner. This case involved constructive
trust. The action for reconveyance of the title to
the rightful owner prescribes in 10 years from the
issuance of the title. This ten-year prescriptive
period begins to run from the date the adverse
party repudiates the implied trust, which
repudiation takes place when the adverse party
registers the land.

Manner of Payment Must Be Agreed Upon Marnelego v. Banco Filipino Savings and The manner of payment must be agreed upon.
Mortgage Bank, G.R. No. 161524, 2006

Sps. Navarra v. Planters Development Bank, It is an essential ingredient before a valid and
G.R. No. 172674, 2007 binding contract of sale can be said to exist,
because it is part of the prestation of the contract.

Contract of Sale, A Consensual Contract Uy v. Heirs of Uy-Renales, G.R. No. 227460, A contract of sale is a consensual contract. Under
December 05, 2019 Article 1475 of the Civil Code, 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. Based on the
testimony of the heir of Y, there was no meeting
of the minds regarding the sale of the property as
X did not offer the lot for sale, and the heirs of Y
never consented to any such purchase. The heirs
were simply summoned and were handed the
Deed of Absolute Sale by their grandmother
without any agreement as regards the sale of any
property.

Consideration in an Option Contract May be PNOC v. Keppel Phils. Holdings, Inc., G.R. No. Consideration in an option contract may be
anything of value 202050, 2016 anything of value, unlike in sale where it must be
price certain in money. (San Miguel Philippines v.
Huang, G.R. No. 137290, 2000) However, when

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the consideration is not monetary, the

consideration must be clearly specified as such in
the option contract or clause. When the written
agreement itself does not state the consideration
for the option contract, the offeree bears the
burden of proving the existence of a separate
consideration for the option.

How Option is Exercised Nietes v. CA, G.R. No. L-32873, 1972 Notice of acceptance should be communicated to
offeror even without actual payment of the option
money as long as there is delivery of payment in
consummation stage.

Right of First Refusal Subject to Specific Equatorial Dev’t v. Mayfair Theater, G.R. No. The RFR is only subject to specific performance
Performance if Attached to a Valid Principal 106063, 2006 insofar as it is attached to a valid written principal
Contract contract (e.g., lease). RFR becomes one of the
considerations in the contract. If RFR is violated,
and property sold to another buyer in bad faith,
the sale to the 3rd party buyer is rescissible. The
price for the 3rd party buyer is to be the basis for
the price of the sale back to the one with the RFR.
Lessee can exercise the right of first refusal once
the sale to the third party is set aside or rescinded.

When Can Owner Sell to Third Parties in Right of Parañaque Kings v. CA, G.R. No. 111538, 1997 Only after the optionee fails to exercise his right
First Refusal of first priority under the same terms and within
the period contemplated, could the owner validly
offer to sell the property to a third person under
the same terms as offered to the optionee

Right of First Refusal Cannot Be Presumed Spouses Manas v Nicolasora, G.R. No. 208845, Implied renewals do not include the option to buy,
Included in the Implied Contract Renewal February 3, 2020 as it is not germane to the lessee's continued use
of the property. Based on Article 1643, the
lessee's main obligation is to allow the lessee to
enjoy the use of the thing leased. Other contract
stipulations unrelated to this — for instance, the
right of first refusal — cannot be presumed
included in the implied contract renewal. The law
itself limits the terms that are included in implied
renewals. One cannot simply presume that all
conditions in the original contract are also

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revived; after all, a contract is based on the

meeting of the minds between parties.

Earnest Money Intended To Be Forfeited If The Racelis v. Spouses Javier, G.R. No. 189609, Absent proof of a clear agreement to the contrary,
Sale Does Not Happen Without The Seller's Fault January 29, 2018 it is intended to be forfeited if the sale does not
happen without the seller's fault. The potential
buyer bears the burden of proving that the earnest
money was intended other than as part of the
purchase price and to be forfeited if the sale does
not occur without the fault of the seller.

Relative Incapacity Between Spouses; Modina v. CA, G.R. No. 109355, 1999 The husband and the wife cannot sell property to
Applicability to Common-Law Spouses each other. The contract is void. There is no
transfer of ownership, thus the creditors may go
after the property.

Exceptions:
1. When a separation of property was
agreed upon in the marriage
settlement (Art. 1490)
2. When there has been a judicial
separation of property under Art. 191
(Art. 1490)

Matabuena v. Cervantes, G.R. No. L-28771, 1971 Prohibition likewise applies to common-law
spouses.

Exception to the Prohibition Against Attorneys Fabillo v. IAC, G.R. No. L-68838, 1991 Exception to the prohibition against attorneys:
From Acquiring Client’s Properties contingent fee arrangement where the amount of
legal fees is based on a value of property involved
in litigation (rationale: the transfer or assignment
of the property takes effect only after the finality
of a favorable judgment and is always subject to
supervision by the court)

Co-owner sells whole property prior to partition Panganiban v. Oamil, G.R. No. 149313, 2008 Sale of property itself is void but valid as to his
spiritual share

Co-Owner Sells Definite Portion Prior To Partition Lopez v. Cuaycong, G.R. No. L-46079, 1944 Sale is void as to other co-owner but valid as to
his spiritual share if the buyer would have still
bought such spiritual share had he known that he

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would not acquire the definite portion sold.

Exceptions To The Rule On The Effect Of Sale Of Mindanao Academy, Inc. v. Yap, G.R. No Subject matter is indivisible in nature or by intent,
A Definite Portion By A Co-Owner hence, entire sale is void.

Pamplona v. Moreto, G.R. No. L-33187, 1980 Sale of a particular portion of a property is with
consent of other co-owners, sale of entire
property is valid.

Imperial v. CA, G.R. No. 102037, 1996 Co-owner sells 1 of 2 commonly owned lands and
does not turn over ½ of the proceeds, other co-
owner, by law and equity, has exclusive claim
over remaining land.

He Who Is First In Time Is Preferred In Right Consolidated Rural Bank v. CA, G.R. No. 132161, If not all the elements are present for Art. 1544 to
Applied Applied When Art 1544 Elements Do Not 2005 apply, the principle of prior tempore, potior jure or
Concur simply “he who is first in time is preferred in right”
should apply. Indisputably, he is a purchaser in
good faith because at the time he bought the real
property, there was still no sale to as a second
vendee.

Non-Applicability Of Art. 1544 For Contracts To Sps. Domingo v. Sps. Manzano, G.R. No. If the two contracts involved are not both
Sell 201883, 2016 contracts of sale, as when one is a contract to sell,
and the other one a contract of sale, Art. 1544
does not apply. This follows the principle that in a
contract to sell, the seller has no obligation to
deliver title until there is full payment of the
purchase price. Thus, for as long as the condition
of full payment has not been fulfilled, a
subsequent sale of the same property will be valid
since the seller still has title to the property. With
more reason, if the seller in a contract to sell has
defaulted, the breach in the condition entitles the
seller to sell the same property for full
consideration. Even if the buyer in the contract to
sell annotates his right in the title, the buyer in the
contract of sale is not in bad faith.

First Buyer Always In Good Faith Carbonell v. CA, G.R. No. L-29972, 1976 The FIRST BUYER is always in good faith and
will always prevail if he registers his sale first. His

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good faith is not destroyed by the subsequent

Ordua v. Fuentebella, G.R. No. 176841, 2010 knowledge of the second sale. The reason behind
this is that at the time of perfection of his contract
of sale, he was the only buyer.

But the knowledge gained by the 2nd buyer of the

first sale defeats his rights even if he is first to
register, since such knowledge taints his
registration with bad faith

Reliance On Registration Of Certificate Of Title Amoguis v. Ballado, G.R. No. 189626, 2018 If a land is registered and is covered by a
Not Applicable When Party Has Knowledge Of certificate of title, any person may rely on the
Actual Facts And Circumstances Surrounding correctness of the certificate of title. However, this
The Title does not apply where the party has actual
knowledge of facts and circumstances that would
impel a reasonably cautious man to make such
inquiry or 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. It is incumbent upon a buyer
to prove good faith should he or she assert this
status.

Awareness Of Notice Of Lis Pendens Negates Register of Deeds of Negros Occidental v. Anglo, A buyer cannot be considered a transferee in
Good Faith Sr., G.R. No. 171804, 2015 good faith if it was aware of the title’s notices of
lis pendens.

Registration Accompanied By Good Faith Gabriel v. Mabanta, G.R. No. 142403, 2003 Good faith must concur with registration. To be
entitled to priority, the second purchaser must not
only establish prior recording of his deed, but
must have acted in good faith.

Non-Registration Under Torrens System Evy Construction and Development Corp. v. Under the Torrens system, a sale of property that
Valiant Roll Forming Sales Corp., G.R. No. is not registered under the Torrens system is
207938, 2017 binding only between the buyer and the seller and
does not affect innocent third persons.

As an exception, “knowledge of an unregistered

sale is equivalent to registration.”

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Rule On Forfeiture Of Partial Payments In A Spouses Godinez v. Spouses Norman, GR No. In a contract to sell, the forfeiture of partial
Contract To Sell 225449, February 26, 2020, citing Olivarez Realty payments may only be valid if there is a stipulation
Corporation v. Castillo to that effect, subject to payments of reasonable
rents. In a contract to sell, failure to fully pay the
purchase price results in the cancellation of the
contract, and the parties shall stand as if the
obligation to sell never existed."

Specific Performance Does Not Amount To A Tajanglangit v. Southern Motors, G.R. No. L- The fact that the seller did not foreclose the
Foreclosure Of Chattel Mortgage 10789, 1957 chattel mortgage constituted on the movable
purchased on credit, but opted specific
performance, with a plea for a writ of replevin,
does not amount to a foreclosure of the chattel
mortgage to be covered by Art. 1484.

Foreclosure Bars Claim For Remaining Balance Northern Motors v. Sapinoso, G.R. No. L-28074, Once there has been foreclosure sale, the seller
1970 can no longer claim for remaining balance on the
purchase price.

Foreclosure Bars Other Claimable Amounts Macondray & Co. v. Eustaquio, G.R. No. 43683, When foreclosure is chosen, seller can no longer
1937 claim all amounts due from the sale, including
damages and attorney’s fees.

Exception To The Rule That Foreclosure Bars Filipinas Investment & Finance Corp. v. Ridad, In case of Perverse Buyer-Mortgagor, if
Other Claimable Amounts G.R. No. L-27645, 1969 mortgagor refuses to deliver property to effect
foreclosure, expenses incurred in recovering the
property may also be recovered, i.e., attorney’s
fees, etc.

Erroneous Belief Of A Buyer Leonardo v. CA, G.R. No. 82457, 1993 Where a buyer a retro honestly believed that he
entered merely into an equitable mortgage, not a
pacto de retro transaction, and because of such
belief he had not redeemed within the proper
period.

Tender Of Payment Does Not Relieve Vendor Paez v. Magno, G.R. No. L-793, 1949 Tender of payment is SUFFICIENT to compel
From Paying Redemption Price redemption but is not in itself a payment that
relieves the vendor from his liability to pay the
redemption price.

How Right Of Redemption Can Be Exercised David v. David, G.R. No. 162365, 2014 The seller who is given the right to repurchase

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may exercise his right of redemption by paying

the buyer: 1) the price of the sale; 2) the expenses
of the contract; 3) legitimate payments made by
reason of the sale; and 4) the necessary and
useful expenses made on the thing sold. The
repurchase was exercised because from the
P10M purchase price directly paid to B, he
deducted the P2M purchase price, his expenses,
interest, and the price of the loan paid to DBP. He
returned the remaining amount and one of the
tractors. This is a tacit acknowledgment of the A’s
exercise of his right to repurchase.

Seller Can Only Sell What He Or She Owns; Heirs of Gregorio Lopez v. Development Bank of A Seller can only sell what he or she owns, or that
Buyer Can Only Acquire What The Seller Can the Phils., G.R. No. 193551, 2014 which he or she does not own but has authority to
Legally Transfer transfer, and a buyer can only acquire what the
seller can legally transfer. Before the property is
partitioned, the heirs are co-owners of the
property. The heirs cannot alienate the shares
that do not belong to them. Any sale by one heir
of the rest of the property will not affect the rights
of the other heirs who did not consent to the sale.
Such sale is void with respect to the shares of the
other heirs. Issuance of a certificate of title is not
a grant of title over petitioners' undivided portions
of the property. Nevertheless, a buyer could
acquire valid title over the whole property if the
buyer were an innocent purchaser for value.

Co-Owner; No Right To Sell A Specific Part Of A Cabrera v. Ysaac, G.R. No. 166790, 2014) A co-owner has “no right to sell or alienate a
Thing Owned In Common concrete, specific or determinate part of the thing
owned in common, because his right over the
thing is represented by quota or ideal portion
without any physical adjudication.”

Equitable Mortgage Saclolo v. Marquito, G.R. No. 229243, June 26, In case of doubt, a contract purporting to be a sale
2019 with right to repurchase shall be considered as an
equitable mortgage. The nomenclature given by
the parties to the contract is not conclusive of its
nature.

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Presence Of Even One Of The Circumstances Spouses Sy v. De Vera-Navarro, G.R. No. Article 1602 of the Civil Code provides
Suffices To Convert A Contract Of Sale Into An 239088, April 3, 2019 circumstances where a contract shall be
Equitable Mortgage presumed to be an equitable mortgage.
Jurisprudence consistently showed that the
presence of even one of these circumstances
suffices to convert a purported contract of sale
into an equitable mortgage. Furthermore, courts
are generally inclined to construe a transaction
purporting to be a sale as an equitable mortgage,
which involves a lesser transmission of rights and
interests over the property in controversy.

Circumvention of prohibition against pactum Heirs of Reyes, Jr. v. Reyes, G.R. No. 158377, Creditor cannot appropriate the things given by
commissorium; Rationale Behind Provision on 2010 way of pledge or mortgage; remedy here is
Equitable Mortgage foreclosure. The real intention of parties is that the
pretended purchase price is money loaned and to
secure payment of the loan, sale with pacto de
retro is drawn up.

--end of topic--

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X. CONTRACT OF LEASE A. GENERAL PROVISIONS

Contract of Lease is a contract by which one

TOPIC OUTLINE UNDER THE SYLLABUS agrees to give to the other for a fixed time and price
the use or profit of a thing, or of his services(The
A. GENERAL PROVISIONS Employees’ Club, Inc. v. China Banking
Corporation, G.R. No. L-40188, 1934).
B. RIGHTS AND OBLIGATIONS OF
LESSOR AND LESSEE Characteristics of Lease of things (CLONS-PEP-
TP)
C. SUBLEASE AND ASSIGNMENT OF a. Consensual
LEASE b. Lessor need not be the owner
c. Onerous
d. Nominate
e. Subject matter must be within the commerce of
man (i.e. not belonging to public domain)
f. Principal contract
g. Purpose is to allow enjoyment or use of a thing
h. Purpose to which the thing will be devoted
should not be immoral
i. Period is temporary
j. Period may be definite or indefinite

Note: Persons disqualified to buy under Arts. 1490

and 1491 of the Civil Code are also disqualified to
become lessees of the things mentioned therein.
(Art. 1646)

Kinds of Leases:
1. Lease of things
2. Lease of work and services

LEASE OF THINGS
• Concerns movable or immovable property
• 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

Note: However, no lease for more than 99 years

shall be valid.

General Rule: The contract of lease may be made

orally.

Exception: Lease of real property for more than 1

year (must be in writing to comply with Statute of
Frauds).

LEASE OF WORK AND SERVICES

• One of the parties binds himself to execute a
piece of work or to render to the other some
service for a price certain
• The relation of principal and agent does not
exist between them

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CONTRACT OF CONTRACT OF be inferred from the nature of the thing leased,

LEASE OF SERVICE LEASE OF THING according to the custom of the place.
The object of contract The object of contract 3. Pay the expenses for the deed of lease.
is the service itself and is a thing
not the result which it RIGHT OF THE LESSEE
generates
Lessor’s services must Lessor has to deliver 4. Right to be respected in his possession.
still be paid even if the the thing leased. 5. Right to be restored to said possession by the
result intended is not In case of breach, means established by law or by the Rules of
attained. there may be an action Court, should he be disturbed therein.
In case of breach, no for specific
action for specific performance Remedies when lessor or lessee does not
performance comply with their obligations
a. Rescission and damages; or
b. Damages while allowing the contract to remain
B. RIGHTS AND OBLIGATIONS OF in force.
LESSOR AND LESSEE Remedy of lessee if lessor refuses to accept the
rentals
OBLIGATIONS OF THE LESSOR (Art. 1654) To make a proper tender of payment and
(DNM) consignation in order to extinguish the debt.
1. To Deliver the thing which is the object of Rules on changing the form of the lease
the contract in such condition as to render
• The lessor can alter the thing leased provided
it fit for the use intended.
there is no impairment of the use to which the
2. To make on the same during the lease all
thing is devoted under the terms of the lease.
the Necessary repairs in order to keep it
• The lessee can also make alterations so long
suitable for the use to which it has been
as the value of the property is not substantially
devoted unless there is a stipulation to the
impaired.
contrary.
• The lessee can also make alterations so long
3. To Maintain the lessee in the peaceful and
as the value of the property is not substantially
adequate enjoyment of the lease for the
entire duration of the contract. impaired.

Rules in case of urgent repairs

• This is true only if the contract is valid.
• If the repairs last for not more than 40 days, the
Where the contract is void, for having
lessee is obliged to tolerate the work even
an existent contract of lease, the lessor
has no right to lease the same though the work may annoy him or he may be
deprived of a part of the premises if repairs last
property. (Bercero v. Capitol
for not more than 40 days.
Development Corporation, G.R. No.
154765, 2007) • If repairs last for 40 days or more, lessee can
ask for reduction of the rent in proportion to the
time – including the 1st 40 days – and the part
Nature of the duty of the Lessor to maintain
of the property of which he is deprived.
peaceful possession of the premises by the
Lessor
Note: In either case, rescission may be availed of if
the main purpose of the lease is to provide a
This is merely a warranty that the lessee shall not
dwelling place and the property becomes
be disturbed in his legal, and not physical,
uninhabitable.
possession. (Chua Tee Dee v. Court of Appeals,
G.R. No. 135721, 2004)
Effects if lessor fails to make urgent repairs
The lessee may (ROSS):
OBLIGATIONS OF THE LESSEE (Art. 1657)
1. Ask for Rescission, in case of substantial
(PUP)
damage to him.
1. Pay the price of the lease according to the
2. Order repairs at the lessor’s cost;
terms stipulated.
3. Sue for damages; or
2. Use the thing leased as a diligent father of a
4. Suspend the payment of the rent;
family devoting it to the use stipulated, and in
the absence of stipulation, to that which may

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Effect of destruction of the subject matter with • If rent is paid daily, lease is from
respect to the lease day to day.
IF TOTALLY IF ONLY PARTIALLY • If rent is paid weekly, lease is from
DESTROYED DESTROYED week to week.
Lease is extinguished Lessee can choose • If rent is paid monthly, lease is from
between reduction of month to month.
the rent and rescission • If rent is paid yearly, lease is from
year to year.
Rules upon Termination of Lease governing
useful improvements caused by the lessee The general rule is lease contracts survive the death
(OAR) of the parties and continue to bind the heirs except
If made in good faith and suitable to the use for if the contract states otherwise. (Inocencio vs.
which the lease is intended, without altering the form Hospicio de San Jose, G.R. No. 201787, 2013)
or substance of the property:
1. Ornamental improvement - No right of The well-entrenched principle is that a lease from
reimbursement, but lessee may remove them month-to-month is with a definite period and expires
provided no damage is caused to the principal at the end of each month upon the demand to
thing. vacate by the lessor. (Cebu Bionic Builders Supply,
2. Appropriation by the lessor of improvements - Inc. vs. Development Bank of the Philippines, G.R.
Lessor may Appropriate the improvements No. 154366, 2010)
provided he pays the lessee ½ of its value at
that time; Rules on Extension of the Lease Period
3. Removal by the lessee of improvements - If 1. If a lease contract for a definite term allows
lessor does not appropriate, lessee may lessee to extend the term, there is no necessity
Remove the improvements even if the principal for lessee to duly notify lessor of his desire to
thing may suffer damage; so extend the term, unless the contrary is
stipulated.
Note: Lessee has no right of retention of the 2. “May be extended” as stipulation: lessee can
premises if the lessor does not pay. His only right is extend without lessor’s consent but lessee
right of removal if lessor does opt not to pay and must notify lessor.
appropriate. 3. “May be extended for 6 years, agreed upon by
both parties” as stipulation: this must be
Kinds of Trespass in Lease interpreted in favor of the lessee. Hence,
a. Trespass in fact (perturbacion de mere hecho): ordinarily the lessee, at the end of the original
• Lessor is not liable for the mere fact of a period, may either:
trespass or trespass in fact made by a a. Leave the premises
third person of a leased property. b. Remain in possession
• Mere fact or mere act of trespass is when 4. In co-ownership, assent of co-owner is
the third person claims no right whatever. needed; otherwise, it is void or ineffective as
• Physical enjoyment is reduced. against non-consenting co-owners.
5. Where according to the terms of the contract,
b. Trespass in law (perturbacion de derecho): the lease can be extended only by the written
• A third person claims legal right to enjoy consent of the parties thereto, no right of
the premises extension can rise without such written
• Lessor will be held liable consent.

Duration of Lease Implied new lease (Tacita Reconducion)

Lease may be for a determinate time or fixed period • Lease that arises if at the end of the contract
• Lease will be for the said period and it the lessee should continue enjoying the thing
ends on the day fixed without need of a leased for 15 days with the acquiescence of the
demand. lessor, unless a notice to the contrary had
a. Lease may be without a fixed period previously been given by either party.
i. For rural lands (Art. 1682) - It shall be • Period of the implied new lease is not that of
for all time necessary for the gathering the original contract but the time established in
of fruits which the whole estate may Arts.1682 and 1687 (see Duration of Lease
yield in 1 year, or which it may yield above).
once.
ii. For urban lands (Art. 1687)

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• Other terms of the original contract are revived • The prohibition against subleasing may not
except option to purchase in case such was in embrace the taking in of boarders. (Mallare v.
the original contract. Court of Appeals, G.R. No. 85108, 1989)
• In a sublease arrangement, there are two
Note: Terms that are revived are only those which distinct leases: the principal lease and the
are germane to the enjoyment of possession, but sublease.
not those with respect to special agreements which
are by nature foreign to the right of occupancy or SUBLEASE ASSIGNMENT OF
enjoyment inherent in a contract of lease – such as LEASE
an option to purchase the leased premises. (Dizon Lessee remains a Lessee is
v. Magsaysay, G.R. No. 23399, 1974) party in the contract. disassociated from the
original contract of
Requisites for Implied New Lease (ENC) lease.
1. The term of the original contract has Expired; Two leases and two Only one (lessor-
2. The lessor has Not given the lessee a notice distinct juridical assignee who
to vacate; relationship (lessor- becomes the lessee)
3. The lessee Continued enjoying the thing lessee and sublessor- because lessee
leased for at least 15 days with the sublessee) transmits absolutely
acquiescence of the lessor; his rights and his
personality disappears
When there is no implied new lease Sublessee does not Assignee has a direct
a. When before or after the expiration of the have any direct action action against the
term, there is a notice to vacate given by against the lessor lessor, there being
either party. novation
b. When there is no definite fixed period in Subleasing is allowed Assignment is not
the original lease contract as in the case unless there is an allowed unless the
of successive renewals. express prohibition lessor gives his
consent
EXTENSION OF RENEWAL OF LEASE
LEASE CONTRACT CONTRACT Note: The sub-lessee is primarily liable to his sub-
Original contract Original contract lessor and only a court can extinguish or modify this
subsists ceases to exist primary liability if the sub-lessor contests the pre-
Creates additional Creates a new termination of the principal lease by the lessor.
term contract (Tamio v. Ticson, G.R. No. 154895, 2004)

Perpetual Lease Circumstances when a sub-lessee is made liable

• A lease contract providing that the lessee can to the lessor:
stay in the premises for as long as he wants a. For all acts which affect the use and
and for as long as he can pay the rentals and preservation of the thing leased in the
its increases. manner stipulated between the lessor and
• This is not permissible; it is a purely potestative the lessee.
condition because it leaves the effectivity and b. For any rent due to the lessor from the
enjoyment of leasehold rights to the sole and lessee which the latter failed to pay:
exclusive will of the lessee. • Sublessee is subsidiarily liable
• Sublessee shall not be responsible
beyond amount of rent due from him,
C. SUBLEASE AND ASSIGNMENT OF in accordance with the terms of the
LEASE sublease, at the time of the
extrajudicial demand by the lessor
Sublease
• A lessee may sublease the thing leased unless Grounds for Ejectment
a) When the period agreed upon or that which is
there is an express prohibition to do so.
fixed for the duration of leases (Arts.1682 and
• Remedy of lessor if lessee violates prohibition:
1687) has expired (see Duration of Lease).
action for rescission of the lease and damages.
b) Lack of payment of the price stipulated.
• If the prohibition to sublease is not express but
• In case lessor refuses to accept rentals,
only implied, the sublease will still be allowed.
lessee should make tender of payment,
• Duration of sublease cannot be longer than
that of the lease to which it is dependent.

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and consignation otherwise there is no

payment.
• Willingness to pay is not payment.

c) Violation of any of the conditions agreed upon

in the contract.
d) When the lessee devotes thing leased to any
use or service not stipulated which causes the
deterioration thereof, or if he does not observe
the requirement in Art. 1657.

In a contract of lease, the twin remedies of

rescission and judicial ejectment become available
after either the failure to pay rent or to comply with
the conditions of the lease.

Technically, no extrajudicial rescission effectively

takes place as a result of the violations until the
demand to pay or comply is duly served and is
rejected or disregarded by the lessee.

The tenant's refusal to heed the demand to vacate,

coming after the demand to pay or to comply
similarly went unheeded, renders unlawful the
continued possession of the leased premises.
(Cebu Automatic Motors, Inc. vs. General Milling
Corporations, G.R. No. 151168, 2010)

The lessor may judicially eject the lessee for any

of the following causes: (EPCU)
1. When the period agreed upon, or that which is
fixed for the duration of leases under Articles
1682 and 1687, has Expired;
2. Lack of Payment of the price stipulated;
3. Violation of any of the Conditions agreed upon
in the contract;

Lessee devotes the thing leased to any Use or

service not stipulated which causes the deterioration
thereof; or if he does not observe the requirement in
No. 2 of Article 1657.

--end of topic--

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Definition of Agency
XI. AGENCY
By the Contract of Agency, a person binds himself
to render some service or to do something in
TOPIC OUTLINE UNDER THE SYLLABUS representation or on behalf of another, with the
consent or authority of the latter.
A. NATURE, FORMS AND KINDS (CIVIL CODE, ART. 1868)

B. OBLIGATIONS OF THE AGENT AND Characteristics

PRINCIPAL 1. Consensual: perfected by mere consent;
(CIVIL CODE, Art. 1869, Art. 1870) The basis
C. EXTINGUISHMENT for agency is representation; on principal’s
part, there must be an intention to appoint,
. or such intention is naturally inferable from
words or actions; on part of the agent, there
must be an intent to accept the appointment
and act on it; in the absence of either, there
is no agency. (Dominion Insurance Corp. v.
CA, 376 SCRA 239)
2. Nominate: it has its own name and the rules
provided in Title X, Book IV of the Civil
Code will find preferential application
against the general provisions on
Obligations and Contracts; it will be an
agency whether or not parties understood
the exact nature of the relation. (Doles v.
Angeles, G.R. No. 149353)
3. Preparatory: The object of agency is for the
agent to enter on behalf of the principal and
within the scope of his authority into
juridical acts with third parties (Rallos v.
Felix Go Chan & Sons Realty Corp., G.R.
No. L-24332)
4. Principal: it does not depend on another
contract for its existence and validity;
(Doles v. Angeles, G.R. No. 149353)
5. Unilateral/Bilateral and Primarily Onerous:
a. Unilateral: if contract is gratuitous or it
creates obligations for only one party
(i.e., the agent) (Urban Bank, Inc. v.
Peña, G.R. No. 145817, 145822,
162562)
b. Bilateral: if contract is for
compensation or gives rise to
reciprocal rights and obligations
(Urban Bank, Inc. v. Peña, G.R. No.
145817, 145822, 162562)

Basis: Representation
The acts of the agent on behalf of the principal within
the scope of his authority produce the same legal
and binding effects as if they were personally done
by the principal.(Litonjua, Jr. v. Eternit Corp., G.R.
No. 144805)

The distinguishing features of agency are its

representative character & its derivative authority.
(Rallos v. Felix Go Chan & Sons Realty Corp., Gr.
No. L-24332)

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Purpose Note: NO AGENCY ARISES FROM CO-

Extend the personality of the principal through the OWNERSHIP: Escobal failed to allege acts from
facility of the agent. (Litonjua, Jr. v. Eternit Corp., which it can be inferred that the rest of co-owners
G.R. No. 144805) impliedly constituted Amor as their agent. It must be
emphasized that "[t]he law makes no presumption
General rule is that what a man may do in person he of agency, and proving its existence, nature, and
may do through another. Thus, a stockholder’s right extent is incumbent upon the person alleging it." In
of inspection can be exercised either by himself or order to prove agency, "[o]n the part of the principal,
through an attorney-in-fact. Philpotts v. Phil. Mfg. there must be an actual intention to appoint or an
Co., 40 Phil 471 (1919). intention naturally inferable from his words or
actions, while on the part of the agent, there must
Underlying principle of the contract of agency is to be an intention to accept the appointment and act
accomplish results—to do a great variety of things— on it.". . . Even assuming as true the petitioners'
by using the services of another. Its aim is to extend allegation that Amor has been designated to
the personality of the principal or the party for whom administer the subject property, the same is an
another acts and from whom such agent derives the agency couched in general terms and extends only
authority to act. Westmont Investment Corp. v. to acts of administration and does not extend to acts
Francis, Jr., 661 SCRA 787 (2011). of strict dominion such as entering into a tenancy
agreement. "The right to hire a tenant is a personal
right of the landowner." The delegation to another
Essential Elements (CROW) of the exercise of such power must be unmistakably
1. Consent of the parties to establish the made, and the grant of consent clearly expressed.
relationship; In this light, the absence of delegation and/or
2. Object or subject matter of the contract is manifestation of consent from the rest of the co-
the execution of a juridical act in relation to owners of the subject property rendered the tenancy
third persons; agreement invalid. (Heirs of Escobal v. Pagtananan,
3. Agent acts as a Representative and not for G.R. No. 232411, March 15, 2022.)
himself; and
4. Agent acts Within the scope of his authority.
Note: An illegal termination of agency does not
(Rallos v. Felix Go Chan & Sons Realty justify reinstatement of the agent. The agency
Corp., Gr. No. L-24332)
cannot be compelled by the courts to be reinstated
because such relationship can only be given effect
By the contract of agency, a person binds himself to
with the consent of the principal(Orient Air Services
render some service or to do something in v. CA, G.R. No. 76931). At most, the principal may
representation or on behalf of another with the
be held liable for damages.
consent or authority of the latter. For a contract of
agency to exist, therefore, the following requisites Nature of Relationship between Principal and
must concur, namely: (1) there must be consent
Agent
coming from persons or entities having the juridical
Fiduciary – based on trust & confidence
capacity and capacity to act to enter into such i. Agent is estopped from asserting an
contract; (2) there must exist an object in the form of
interest adverse to his principal’s, whether
services to be undertaken by the agent in favor of
his own or that of an adverse party
the principal; and (3) there must be a cause or
(Severino v. Severino, G.R. No. 18058;
consideration for the agency. Lopez v. Court of CIVIL CODE, Art. 1435)
Appeals, 876 SCRA 1 (2018).
ii. Agent must not use or disclose secret
information (CIVIL CODE, Art. 1889)
iii. Agent must give notice of material facts
A. NATURE, FORMS, AND KINDS (CIVIL CODE, Art. 1889)

Nature of Relationship Note: Theory of Imputed Knowledge

Since it is a contract, there must be a meeting of the General Rule: Knowledge of the agent is imputed
minds (i.e., consent) as to object and cause. (CIVIL to the principal even though the agent never
CODE, Art. 1868) communicated it to his principal (Sunace
International Management Services, Inc. v. NLRC,
Exception to Contractual Nature G.R. No. 161757)
When the agency is created by operation of law
(See Part VIII on “Agency by Operation of Law”) Exceptions:
1. Where the interests of the agent are adverse to
those of the principal;

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2. The agent’s duty is not to disclose the Distinction between Agency to Sell and Sale
information, as where he is informed by way of (Quiroga v. Parsons, G.R. No. 11491; Spouses
confidential information. Viloria v. Continental Airlines, G.R. No. 188288)
3. Agent acts in bad faith or where the person AGENCY TO SELL SALE
claiming the benefit of the rule colludes with the Agent receives the Buyer receives the
agent to defraud the principal (CIVIL CODE, Art. goods as the principal’s goods as owner
1898) goods
Agent delivers the Buyer pays the price
Distinction between Agency and Guardianship proceeds of the sale
AGENCY GUARDIANSHIP
Agent represents a A guardian represents Agent can return the Buyer, as a general
capacitated person an incapacitated object in case he is rule, cannot return the
person. unable to sell the same object sold
to a third person
Agent is appointed by Guardian is appointed
the principal and can by the court and stands Agent in dealing with Buyer can deal with the
be removed by the in loco parentis. the thing received is thing as he pleases,
latter. bound to act according being the owner
to the instructions of his
Agent is subject to the Guardian is not subject
principal
directions of the to the directions of the
principal. ward but must act for
the benefit of the latter Distinction between Agency and Contractor
Agent can make the Guardian has no power (Shell v. Firemen’s Ins. Co., G.R. No. L-8169)
principal personally to impose personal AGENT INDEPENDENT
liable. liability on the ward. CONTRACTOR
Represents his Employed by the
Distinction between Agency and Judicial principal employer
Administration
Acts under the Acts according to his
AGENCY JUDICIAL
principal’s control and own method
ADMINISTRATION
instruction
Agent is appointed by Judicial administrator is
Principal is liable for Employer not liable for
the principal. appointed by the court.
torts committed by the torts committed by the
agent within the scope independent
Agent represents the Judicial administrator
of his authority (Civil contractor. (Rule VIII,
principal. not only represents the
Code, Art. 1897, Art. Sec. 9(b), Omnibus
court but also the heirs
1899) Implementing Rules of
and creditors of the
the Labor Code of the
estate.
Philippines)
Agent does not file a Judicial administrator
bond. files a bond.
Distinction between Agency and Partnership
Agent is controlled by Judicial administrator’s AGENCY PARTNERSHIP
the principal through acts are subject to An agent must submit A co-partner is not
the arrangement. specific orders from the to the principal’s right subject to co-partner’s
court. to control right to control, unless
there is an agreement
Distinction between Agency and Lease to that effect
AGENCY LEASE OF The agent assumes no The partner binds not
PROPERTY personal liability where only the firm members
Agent is controlled by Lessee is not he acts within the but himself as well
the principal. controlled by the scope of his authority
lessor. (CIVIL CODE, Art. 1897)
Agency may involve Lease of property The agent takes his The profits belong to all
things other than involves property. agreed share of profits the partners as
property. not as owner but as an common proprietors in
Agent can bind the Lessee cannot bind the agreed measure of agreed proportions
principal. lessor. compensation for his
services

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Other Classifications of Agency instructions as regards the agency. (Salvador v.

Rabaja , G.R. No. 199990)
a. As to Manner of Creation 2. Agency by Estoppel with Respect to Third
Parties – one who clothes another with
1. Express – agent has been explicitly authorized apparent authority as his agent, and holds him
by the principal, either orally or in writing. (CIVIL out to the public as such, cannot be permitted
CODE, Art. 1869) to deny the authority of such person to act as
2. Implied – agency is implied from the acts of the his agent, to the prejudice of innocent third
principal, from his silence, or lack of action, or parties dealing with such person in good faith
his failure to repudiate the agency knowing that and in the following pre-assumptions or
another person is acting on his behalf without deductions, which the law expressly directs to
authority, or from the acts of the agent which be made from particular facts, are deemed
carry out the agency. (CIVIL CODE, Art. 1869) conclusive. (Macke v. Camps, G.R. No. 2962)

b. As to Character Compensation
General Rule: Agency is presumed to be for
1. Gratuitous – agent receives no compensation compensation, unless there is proof to the contrary.
for his services (CIVIL CODE, Art. 1875) (CIVIL CODE, Art. 1875)
2. Onerous – agent receives compensation for his
services (CIVIL CODE, Art. 1875) Exception: The presumption that the agency is for
compensation is prima facie, meaning it may be
c. As to Extent of Business of the disproved by contrary evidence.(CIVIL CODE, Art.
Principal 1875)

1. General – agency comprises all the business of Broker

the principal (CIVIL CODE, Art. 1876) Negotiates contracts relative to property in behalf of
2. Special – agency comprises one or more others and for a compensation/fee.(Litonjua v.
specific transactions (CIVIL CODE, Art. 1876) Eternit Corp., G.R. No. 144805)

d. As to Authority Conferred Difference from a Broker

A broker brings parties together and parties agree
1. Couched in general terms – only acts of to enter into a contract. A broker is not necessarily
administration (CIVIL CODE, Art. 1877) an agent of either party, and negotiate contracts
2. Couched in specific terms – only the relative to property in behalf of others and for a
performance of a specific act/s (CIVIL CODE, Art. compensation/fee. He is described merely as a “go-
1876).If a special power of attorney is granted, between” between the parties in Litonjua v. Eternit
it will empower the agent to render acts of Corp. (G.R. No. 144805), and does not have
dominion to the extent granted (CIVIL CODE, Art. authority to bind the parties.
1878_
Thus, in Litonjua, the Court said that a real estate
broker (not an agent) is one who negotiates the sale
Forms of Agency
of real properties – his authority is to find a buyer (or
General Rule: Appointment of an agent may be oral
seller) who wishes to purchase (or sell) a property
or written; no formal requirement. (CIVIL CODE, Art.
on terms agreed upon by the parties. He has no
1869)
authority to bind the parties in the contract of sale.
His authority is to find a buyer (or seller) and not to
Exception: When the law requires a specific form sell the property. Thus, there is no need of a special
(e.g., sale of a piece of land or any interest therein power of attorney under Art 1878.
through an agent – the agent’s authority must be in
writing, otherwise the sale is void). (CIVIL CODE, Art. When Broker Entitled to Compensation:
1874) 1. Whenever he brings to his principal a party who
is able and willing to take the property, and
How Agency May be Constituted from Side of enter into a valid contract upon the terms
Third Parties: named by the principal, although the particulars
1. Agency is not presumed to exist – persons may be arranged and the matter negotiated and
dealing with an agent must ascertain not only completed between the principal and the
the fact of agency, but also the nature and purchaser directly. (Macondray & Co., Inc. v.
extent of his authority – he must require the Sellner, G.R. No. 9184)
presentation of the power of attorney, or the

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2. A broker is not entitled to commission for When Broker is not entitled to a commission;
unsuccessful efforts. (Guardex Enterprises v.
Well settled is the rule that an agent is not entitled
NLRC, G.R. No. 66541)
to commissions for unsuccessful or
3. The broker should be paid his commission
unconsummated transactions. As a general rule, an
where he is the efficient procuring cause in
agent is entitled to a commission only upon the
bringing the sale. (Prats v. CA, G.R. No. L-
successful conclusion of a sale. However, in certain
39822; Manotok Brothers v. CA, G.R. No.
cases where the factual circumstances are
94753)
contested, as in the case at bar, the determination
of an agent's right to commissions depends on a
Efficient Procuring Cause
number of considerations, such as: 1) the extent of
When there is a close proximate and causal
completion of the undertaking, which may be full,
connection between the efforts and labor of the
partial, or non-existent; 2) the value of the agent's
agent and the principal’s sale of property. (Manotok
efforts to the principal; 3) the termination of the
Brothers v. CA, G.R. No. 94753)
agency before full completion of the undertaking;
and 4) the nature and circumstances of such
Q: Will a broker be paid if the transaction was
termination. As pointed out by an eminent
effected after the expiration of his authority?
commentator on the subject. Atienza v. TKC Heavy
Industries Corp., G.R. No. 217782. 23 June 2021.
A: Although sale of object of agency was perfected
three days after expiration of the agency, agent
In a case where a broker accepted a propina
would still be entitled to receive commission
stipulated when agent was the efficient procuring (gift/tip) to persuade the principal to sell the property
at a lower price, the court ruled that the broker was
cause in bringing about the sale he was entitled to
not entitled to his commission despite the successful
compensation.. He is the efficient procuring cause
sale.
when there is a close proximate and causal
connection between the efforts and labor of the The duties of a broker to his employer are
agent and the principal’s sale of property. (Manotok essentially those which an agent owes to his
Brothers v. CA, G.R. No. 94753) 221 SCRA 224 principal. An agent who takes a secret profit in the
(1993). nature of a bonus, gratuity or personal benefit from
the vendee, without revealing the same to his
prinicipal, the vendor, is guilty of breach of his
Compare with: Although buyer was introduced by
loyalty to the principal, and forfeits his right to collect
broker to seller, nonetheless broker was not entitled
the commission from his principal even if the
to commission even with the consummation of the
prinicipal does not suffer any injury by reason of
sale because the lapse of the period of more than
such breach of fidelity, or that he obtained better
one (1) year and five (5) months between the
results or that the agency is a gratuitous one, or that
expiration of broker’s authority to sell and the
usage or customs allows it, because the rule is to
consummation of the sale to the buyer, is significant
prevent the possibility of any wrong, not to remedy
index of the broker’s non-participation in the really
or repair an actual damage. The fact that the
critical events leading to the consummation of said
principal may have benefited by the valuable
sale. Broker was not the efficient procuring cause in
services rendered by the agent does not exculpate
bringing about the sale and therefore not entitled to
the agent who only has himself to blame for such
the stipulated broker’s commission. Inland Realty
treachery and perfidy. Domingo v. Domingo, 42
v. Court of Appeals, 273 SCRA 70 (1997).
SCRA 131 (1971).

Note: “Procuring cause” refers to a cause Agents who have been authorized to sell parcels of
originating a series of events which, without break in land cannot claim personal damages in the nature
their continuity, resulting in the accomplishment of of unrealized commission by reason of the act of the
the prime objective of the broker’s employment, i.e. buyer is refusing to proceed with the sale. The
to produce a purchaser ready, willing, and able to rendering of such service did not make them parties
buy on the owner’s terms. To be regarded as the to the contracts of sale executed in behalf of the
“procuring cause” to be entitled to a commission, a latter. Since a contract may be violated only by the
broker’s efforts must have been the foundation on parties thereto as against each other, the real
which the negotiations resulting in a sale began. parties-in-interest, either as plaintiff or defendant, in
(Medrano v. CA, G.R. No. 150678) an action upon that contract must, generally, either
be parties to said contract. Uy v. Court of Appeals,
314 SCRA 69 (1999)

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Law on Double Agency secret orders and instructions of the principal do not
If two or more persons have appointed an agent for prejudice third persons who have relied upon the
a common transaction or undertaking, they shall be power of attorney or instructions shown them. (n)
solidarily liable to the agent for all the consequences
of the agency (CIVIL CODE, Art. 1915). Forms of Acceptance by Agent
1. Express - when it is oral or written (CIVIL CODE,
Requisites for Principal to be bound by act of Art. 1870)
Agent (CIVIL CODE, Art. 1897) 2. Implied - when it can be inferred from the acts
1. The agent must act on behalf of the principal of the agent which carry out the agency, or from
2. The agent must act within the scope of his his silence or inaction according to the
authority circumstances (CIVIL CODE, Art. 1870)

When Principal is not bound by act of Agent Between persons who are present – there is
General Rule: The agent acts without or beyond the implied acceptance if the principal delivers his
scope of his authority in the principal’s name (CIVIL power of attorney to the agent and the latter
CODE, Art. 1897, 1910, Art. 1403 (1)) receives it without any objection (CIVIL CODE, Art.
1871)
Exceptions:
1. So far as third persons are concerned, an act is Between persons who are absent
deemed to be within the scope of the agent's General rule: Acceptance not deemed implied from
authority, if such act is within the terms of the the silence of the agent. (CIVIL CODE, Art.1872)
power of attorney, as written, even if the agent
has in fact exceeded the limits of his authority Exceptions:
according to an understanding between the 1. When the principal transmits his power of
principal and the agent; (CIVIL CODE, Arts. attorney to the agent who receives it without any
1900& 1902) objection
2. Where the principal has ratified the acts of the 2. When the principal entrusts to him by letter or
agent, expressly or impliedly (CIVIL CODE, Art. telegram a power of attorney with respect to the
1910) business in which he is habitually engaged as
an agent, and he did not reply to the letter or
If an agent acts in his own name, he (and not the telegram (CIVIL CODE,Art.1872)
principal) is the one bound to the third person. The
principal would not have a right of action in such “Present”
case, unless the transaction involves things Generally, “face to face”, but includes people
belonging to the principal (CIVIL CODE, Art. 1883) conversing directly through technology (e.g., over
the telephone or through a videoconference).
Note: The agent is not deemed to have exceeded
his authority should he perform the agency in a Q: How is implied acceptance manifested as
manner more advantageous to the principal than between persons who are present and those
that indicated by him, since he is authorized to do who are absent?
such acts as may be conducive to the
accomplishment of the purpose of the agency. (CIVIL A: As between persons who are present, the
CODE, Art. 1882) acceptance of the agency may be implied if the
principal delivers his power of attorney to the agent
In the absence of an agreement to the contrary, a and the latter receives it without any objection. (CIVIL
managing agent (i.e., one entrusted with the care CODE, Art. 1871). Meanwhile, as to those who are
and management of a business) may enter into absent, the acceptance of the agency cannot be
contracts that he deems reasonably necessary or implied from the silence of the agent, except when
requisite for the protection of the interests of his the principal delivers his power of attorney to the
principal entrusted to his management. (Eurotech v. agent, who receives it without any objection; or
Cuizon, G.R. No. 167552) when the principal entrusts to him by letter or
telegram a power of attorney in which he is
Third Persons May Demand Presentation of habitually engaged as an agent, and he did not reply
Authority of the Agent: to the letter or telegram. (CIVIL CODE, Art. 1872)
Article 1902. A third person with whom the agent
wishes to contract on behalf of the principal may
require the presentation of the power of attorney, or
the instructions as regards the agency. Private or

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Kinds of Agency authority necessarily

being implied
a. Based on business or transactions (Philippine Legal
encompassed Encyclopedia, p. 66)

General vs Special Agency Note: “His authority is provided in a special power

GENERAL SPECIAL of attorney or general power of attorney or letter of
BASIS attorney. An attorney-in-fact is not necessarily a
AGENT AGENT
Scope of All acts Specific acts lawyer.” (Pineda, Legal Ethics, p. 8)
Authority connected in pursuance
with the of particular c. Whether it covers acts of
business or instructions or administration or acts of dominion –
employment with General Power vs. Special Power of
in which he is restrictions Attorney
engaged necessarily
(CIVIL CODE,, implied from Power of Attorney
Art. 1876) the act to be Instrument in writing by which the principal appoints
done (CIVIL his agent and confers authority to do specific acts
CODE, Art. on behalf of the principal. Its primary purpose is to
1876) evidence the agent’s authority to third parties with
Nature of Involves No continuity whom the agent deals (Wee v. De Castro, G.R. No.
Service continuity of of service 176405)
Authorized service
Extent to May bind his Cannot bind Note: Article 1878 does not state that the authority
Which Agent principal by an his principal in be in writing. As long as the mandate is express,
May Bind the act within the a manner such authority may either be oral or written. The
Principal scope of his beyond or requirement under Article 1878 refers to the nature
authority, outside the of authorization and not to its form (Patrimonio v.
although it specific acts Gutierrez, G.R. No. 187769).
may not have which he is
been the authorized to Construction of Power of Attorney (Olaguer v.
subject of any perform Purugganan, Jr., G.R. No. 158907)
specific
instruction General rule: Strictly construed to grant only those
Construction Generally Strictly specified powers.
of Principal’s considered as construed as
Instructions advisory in they limit the Exception: When strict construction will defeat the
nature agent’s very purpose of the power
authority
Ways of Giving Notice of Agency and its Effect
b. Whether it covers legal matters 1. By special information - the person appointed
as agent is considered as such with respect to
Attorney-at-Law vs. Attorney-in-Fact the person to whom it was given. (CIVIL CODE,
ATTORNEY-AT-LAW ATTORNEY-IN-FACT Art. 1873)
A practitioner in a “An attorney-in-fact is 2. By public advertisement - the agent is
court of law who is simply an agent considered as such with regard to any person.
legally qualified to whose authority is (CIVIL CODE, Art. 1873)
prosecute and defend strictly limited by the
actions in such court. instrument appointing Agency Couched in General Terms
him, though he may do Covers only mere acts of administration (not acts of
things not mentioned dominion) even if:
in his appointment 1. The principal should state that he withholds no
necessary to the power
performance of the 2. The agent may execute such acts as he may
duties specifically consider appropriate
required of him by the 3. The agency should authorize a general and
power of attorney unlimited management (CIVIL CODE, Art.1877)
appointing him, such

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How to Construe Contracts of Agency conveyance of real property. (Heirs of Ureta v. Heirs
Contracts of agency, as well as general powers of of Ureta, G.R. No. 165748)
attorney, must be interpreted in accordance with the
language used by the parties. Note: A Special Power of Attorney is strictly
• The real intention of the parties is primarily construed. Hence, the act under Article 1878 sought
determined from the language used and to be authorized must be clearly stated.
gathered from the whole instrument.
• In case of doubt, resort must be had to the Accordingly, the power of administration does not
situation, context, and relations of the include acts of disposition or encumbrance, which
parties. The intention of the parties must are acts of strict ownership. Similarly, an authority to
be sustained, not defeated. sell or dispose does not include the authority to
• If the contract is open to two (2) administer. (Aggabao v. Parulan, G.R. No. 165803)
constructions, one of which would uphold
the intention while the other would Note: A Special Power of Attorney must express the
overthrow it, the former is to be chosen. powers of the agent in clear and unmistakable
(Liñan v. Puno, G.R. No. L-9608) language for the principal to confer the right upon an
agent (Yoshizaki v. Joy Training Center of Aurora,
Cases Where Special Power of Attorney is Inc., G.R. No. 174978)
Necessary
1. To make such Payments as are not usually However, Article 1878 does not state that the
considered as acts of administration; authority be in writing. As long as the mandate is
2. To Effect novations which put an end to express, such authority may either be oral or written.
obligations already in existence at the time the The requirement under Article 1878 refers to the
agency was constituted; nature of authorization and not to its form
3. To Compromise, to submit questions to (Patrimonio v. Gutierrez, G.R. No. 187769).
arbitration, to renounce the right to appeal from
a judgment, to waive objections to the venue of The special power of attorney can be included in the
an action, or to abandon a prescription already general power when it specifies therein the act or
acquired; transaction for which the special power is required.
4. To Waive any obligation gratuitously; (Estate of Lino Olaguer v. Ongjoco, G.R. No.
5. To Enter into any contract by which the 173312)
ownership of an immovable is transmitted or
acquired either gratuitously or for a valuable Q: A borrowed money from C on behalf of B
consideration; without B’s knowledge. C sought to recover
6. To Make gifts, except customary ones for from A, but to no avail. He thereafter sent several
charity or those made to employees in the demand letters to B asking for the payment. B
business managed by the agent; now contends that he should not be held liable
7. To Loan or borrow money, unless the latter act because there was no loan between him and C
be urgent and indispensable for the since he did not give a special power of attorney
preservation of the things which are under for the borrowing of money. Is B correct?
administration;
8. To Lease any real property to another person A: Yes. Art. 1878 of the NCC provides that a special
for more than one year; power of attorney is necessary in order to loan or
9. To Bind the principal to render some service borrow money, unless the latter act be urgent and
without compensation; indispensable for the preservation of the things
10. To Bind the principal in a contract of which are under administration.
partnership;
11. To Obligate the principal as a guarantor or Powers not included in the power to mortgage
surety; 1. To sell (CIVIL CODE, Art. 1879)
12. To Create or convey real rights over immovable 2. To execute a second mortgage
property; 3. To mortgage for the agent or any 3rd person’s
13. To Accept or repudiate an inheritance; benefit, unless clearly indicated
14. To Ratify or recognize obligations contracted
before the agency; Powers not included in the power to
15. Any Other act of strict dominion. (CIVIL CODE, compromise
Art. 1878) Submission to arbitration (CIVIL CODE, Art. 1880)
1. The agent must act within the scope of
Note: A Special Power of Attorney is not required to his authority. He may do such acts as
execute a Deed of Partition because partition is a may be conducive to the

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accomplishment of the purpose of the Nature of An agent by An agent by

agency. (CIVIL CODE, Art. 1881) Authority estoppel has implied
none of the appointment
Agency by Estoppel rights of an has all the
There is really no agency at all, but the alleged agent, except rights and
agent seemed to have apparent or ostensible, where the liabilities of an
although not real, authority to represent another. principal’s agent, i.e.,
(Country Bankers Insurance Corporation v. Keppel conduct is has actual
Cebu Shipyard, et. al., G.R. No. 166044) such that the authority to
agent act on behalf
Note: reasonably of the principal
• If a person specially informs another or believed that
states by public advertisement that he has the principal
given a power of attorney to a third person, intended him
the latter thereby becomes a duly to act as an
authorized agent, in the former case with agent
respect to the person who received the
special information, and in the latter case Instances creating an Agency by Operation of
with regard to any person (CIVIL CODE, Law
Art.1873). 1. The agent must finish the business already
• Even when the agent has exceeded his begun on the death of the principal, should
authority, the principal is solidarily liable delay entail any danger (CIVIL CODE,Art. 1884,
with the agent if the former allowed the par. 2)
latter to act as though he had full powers 2. The agent, even if he should withdraw from the
(CIVIL CODE, Art. 1911) agency for a valid reason, must continue to act
until the principal has had reasonable
Requisites of Agency by Estoppel opportunity to take the necessary steps to meet
1. The principal manifested a representation of the the situation (CIVIL CODE,Art. 1929).
agent’s authority or knowingly allowed the 3. Anything done by the agent, without knowledge
agent to assume such authority; of the death of the principal or of any other
2. The third person, in good faith, relied upon such cause which extinguishes the agency, is valid
representation; and and shall be fully effective with respect to third
3. Relying upon such representation, such third persons who may have contracted with him in
person has changed his position to his good faith (CIVIL CODE,, Art. 1931).
detriment (Country Bankers Insurance
Corporation v. Keppel Cebu Shipyard, et. al., Note: If the agent dies, the heirs must notify the
G.R. No. 166044 principal thereof, and in the meantime adopt such
measures as the circumstances may demand in the
Distinction between Agency by Estoppel and interest of the latter (CIVIL CODE, Art. 1932)
Implied Agency
AGENCY BY IMPLIED How Agency is Revoked
BASIS
ESTOPPEL AGENCY
Existence of No agency at There is an 1. Principal may revoke the agency (express or
actual all actual agency implied) at will and compel agent to return the
agency document evidencing the agency. (CIVIL CODE,
Reliance by Can be Such reliance Art. 1920)
3rd persons invoked only is not needed, 2. Agency has been entrusted for purpose of
by a 3rd since the contracting with specified persons – revocation
person who in agent is a real will not prejudice specified persons if they were
good faith agent not notified. (CIVIL CODE, Art. 1921)
relied on the 3. If the agent had general powers – revocation
conduct of the does not prejudice third persons who acted in
principal in good faith and without knowledge of the
holding the revocation. Notice of revocation in a newspaper
agent out as of general circulation is a sufficient warning.
being (CIVIL CODE, Art. 1922)
authorized 4. The appointment of a new agent for the same
business or transaction revokes the previous

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agency from the day on which notice was given conditions of the insurance policy in order for the
to the former agent. (CIVIL CODE, Art. 1923) beneficiary to be able to properly and timely claim
5. Agency is revoked if principal directly manages the benefit. Such duty prevailed even after the death
the business entrusted to the agent, dealing of the depositor. Bank of P.I. v. Laingo, 787 SCRA
directly with third persons (CIVIL CODE, Art. 541 (2016).
1924)
6. When two or more principals have granted a
power of attorney for a common transaction, Specific Obligations of the Agent
any one of them may revoke the same without 1. Carry out the agency (CIVIL CODE, Art. 1884);
the consent of the others. (CIVIL CODE, Art. 2. Answer for damages which through his non-
1925) performance the principal may suffer;(CIVIL
7. A general power of attorney is revoked by a CODE, Art. 1884);
special one granted to another agent, as 3. Finish the business already begun on the death
regards the special matter involved in the latter. of the principal should delay entail any danger
(CIVIL CODE, Art. 1926) (exception to the rule that death extinguishes
8. The power shall continue to be in full force until agency) (CIVIL CODE, Art. 1884);
the notice is rescinded in the same manner as 4. Advance necessary funds if there be a
it was constituted. (CIVIL CODE, Art. 1873). stipulation to do so (except when the principal
However, constitution by Special Information is insolvent) (CIVIL CODE, Art. 1886);
may be revoked by notice in a daily newspaper, 5. Act in accordance with the Instructions of the
provided it can be proven that 3rd persons in principal, and in default thereof, to do all that a
question read the revocation (Lustan v. Court of good father of a family would do (CIVIL CODE,
Appeals, G.R. No. 111924) Art. 1887);
6. Not to carry out the agency if it would Manifestly
result in loss or damage to the principal (CIVIL
B. OBLIGATIONS OF THE AGENT CODE, Art. 1888);
AND THE PRINCIPAL 7. Answer for damages if there being a conflict
between his & his principal’s interests, he
Obligations of the Agent prefers his own (CIVIL CODE, Art. 1889);
8. Not to borrow money for himself even if he has
been authorized to Loan money on behalf of the
General Obligations of the Agent to the
principal.
Principal (GOC)
1. Act with utmost Good faith & loyalty for the
Note: The agent can loan money to the
furtherance of principal’s interests
principal at the current rate of interest if he has
2. Obey principal’s instructions
been authorized to borrow money for the
3. Exercise reasonable Care(CIVIL CODE, Art.
principal.(CIVIL CODE, Art. 1890)
1887)
9. Render an Account of his transactions and
General Obligation of Agent who accepts the
deliver to the principal whatever he may have
Agency
received by virtue of the agency (CIVIL CODE,
Art. 1891)
Note: The agent is bound by his acceptance to carry
10. Be Responsible in certain cases for the act of
out the agency and is liable for the damages which,
the substitute appointed by him (CIVIL CODE,
through his non-performance, the principal may
Art. 1892)
suffer.
11. Pay Interest on funds he has applied to his own
use (CIVIL CODE, Art. 1896)
He must also finish the business already begun on
the death of the principal, should delay entail any
Obligation of a Person who declines Agency
danger. (CIVIL CODE, Art. 1884)
In case a person declines an agency, he is bound to
observe the diligence of a good father of a family in
Since agency is a fiduciary relationship, it is the duty the custody and preservation of the goods
of the agent to carry out the agency in good faith for forwarded to him by the owner until the latter should
the advancement of the interests of the principal. appoint an agent. The owner shall as soon as
Here, BPI had the obligation to carry out the agency practicable either appoint an agent or take charge of
by informing the beneficiary, who appeared before the goods. (CIVIL CODE, Art. 1885)
BPI to withdraw funds of the insured who was BPI's
depositor, not only of the existence of the insurance
contract but also the accompanying terms and

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Effects of Agent’s Acts to Principal’s Liability All acts of the substitute appointed against the
prohibition of the principal shall be void.
Effects of Agent’s Acts to Principal’s Liability
LIABILITY OF Article 1893. In the cases mentioned in Nos. 1 and
ACT OF AGENT 2 of the preceding article, the principal may
PRINCIPAL
Mismanagement of Principal still furthermore bring an action against the substitute
the business by the responsible for the with respect to the obligations which the latter has
agent acts contracted by the contracted under the substitution. (1722a)
agent with respect to
3rd persons; Principal, Q: A constituted B as his agent. Can B appoint
however, may seek a substitute?
recourse against the
agent Article 1892 creates a presumption that an agent
Tort committed by the Principal civilly liable has the power to appoint a substitute, it has three
agent so long as the tort is legal implications: First, the substitute becomes the
committed by the agent of the principal, and the latter is bound by the
agent while acts of the substitute as if these acts had been
performing his duties performed by the principal’s appointed agent.
in furtherance of the Second, the substitute assumes an agent’s
principal’s business obligations to act within the scope of authority, to act
Agent in good faith but Principal is liable for in accordance with the principal’s instructions, and
prejudices 3rdparties damages to carry out the agency, among others. In order to
make the presumption inoperative and relieve
Agent in bad faith and Only the agent is liable himself from its effects, it is incumbent upon the
prejudices 3rd persons for damages principal to prohibit the agent from appointing a
substitute. Third, Art. 1892 allocates responsibility to
the agent for the acts of the substitute when agent
Duty of Obedience was not expressly authorized by a specific person is
Article 1881. The agent must act within the scope of not designated, the agent appoints a substitute who
his authority. He may do such acts as may be is notoriously incompetent or insolvent. In these
conducive to the accomplishment of the purpose of instances, the principal has a right of action against
the agency. (1714a) both the agent and the substitute if the latter
commits acts prejudicial to the principal. Villaluz v.
When Agent may incur Personal Liability Land Bank of the Philippines, 814 SCRA 466
1. When the agent expressly binds himself (CIVIL (2016).
CODE, Art. 1897)
2. When the agent exceeds his authority without Where SPA to sell a piece of land prohibits a
giving such party sufficient notice of his powers substitute, but agent appoints a substitute who
(CIVIL CODE, Art. 1897) executes the deed of sale in name of the principal,
3. In the case where the agent exceeds his while the agent acted outside the scope of his
authority and the third party is aware of the authority, that did not make the sale void, but merely
limits of the powers granted by the principal, the unenforceable under the second paragraph of
contract is VOID but the agent is liable if he Art.1317. Principal’s acceptance of the proceeds
undertook to secure the principal's ratification. thereof are tantamount to ratification thereof.
(Civil Code Art.1898) (Escueta v. Lim, 512 SCRA 411 (2007))

a. Appointment of Sub-Agent b. Responsibility of Two (2) or More

Agents Appointed Simultaneously
Appointment of Sub-Agent
Article 1892. The agent may appoint a substitute if General rule: Joint liability
the principal has not prohibited him from doing so;
but he shall be responsible for the acts of the Exception: When solidarity has been expressly
substitute: stipulated, in which case, each of the agents
1. When he was not given the power to becomes solidarily liable for (1) the non-fulfillment of
appoint one; the agency; and for (2) the fault or negligence of his
2. When he was given such power, but fellow agent(s) (CIVIL CODE,Arts.1894& 1895)
without designating the person, and the
person appointed was notoriously
incompetent or insolvent.

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Exception to the Exception: when one of the other deny the responsibility for them. (Gonzales v.
agent/s acts beyond the scope of his authority – Haberer, 47 Phil. 380 (1925))
innocent agent is not liable. (CIVIL CODE, Art. 1895)
Authority not deemed exceeded if the results
Effect where 3rd Person aware of limits of are more advantageous:
agent’s power Article 1882. The limits of the agent's authority
shall not be considered exceeded should it have
Relevant provisions of the Civil Code to been performed in a manner more advantageous to
remember: the principal than that specified by him. (1715)
Article 1898. If the agent contracts in the name
of the principal, exceeding the scope of his authority, But Note this Case:
and the principal does not ratify the contract, it shall When agent has been authorized to purchase at an
be void if the party with whom the agent contracted auction sale a Parañaque property, but instead
is aware of the limits of the powers granted by the bought the Manila property due to non-auctioning of
principal. In this case, however, the agent is liable if the Parañaque property, the agent still acted outside
he undertook to secure the principal's ratification. the scope of the authority even when motivated by
good intentions and by a sincere belief that the
Article 1901. A third person cannot set up the fact purchase of the Manila property would benefit the
that the agent has exceeded his powers, if the spouses-principals, and entitles the spouses-
principal has ratified, or has signified his willingness principals to the return of the purchase money they
to ratify the agent's acts. remitted to the agent. Gonzales-Saldaña v.
Spouses Niamatali, 886 SCRA 479 (2018).
Article 1910. The principal must comply with all
the obligations which the agent may have Conditions for Ratification
contracted within the scope of his authority. “Ratification in agency is the adoption or
confirmation by one person of an act performed on
As for any obligation wherein the agent has his behalf by another without authority. The
exceeded his power, the principal is not bound substance of the doctrine is confirmation after
except when he ratifies it expressly or tacitly. (1727) conduct, amounting to a substitute for a prior
authority. Ordinarily, the principal must have full
Article 1317. No one may contract in the name of knowledge at the time of ratification of all the
another without being authorized by the latter, or material facts and circumstances relating to the
unless he has by law a right to represent him. unauthorized act of the person who assumed to act
as agent. Thus, if material facts were suppressed or
A contract entered into in the name of another by
unknown, there can be no valid ratification and this
one who has no authority or legal representation, or
regardless of the purpose or lack thereof in
who has acted beyond his power/s, shall be
concealing such facts and regardless of the parties
unenforceable, unless it is ratified, expressly or
between whom the question of ratification may
impliedly, by the person on whose behalf it has been
arise. Nevertheless, this principle does not apply if
executed, before it is revoked by the other
the principal’s ignorance of the material facts and
contracting party. (1259a)
circumstances was willful, or that the principal
Article 1403. The following contracts are chooses to act in ignorance of the facts. However,
unenforceable, unless they are ratified: in the absence of circumstances putting a
reasonably prudent man on inquiry, ratification
1. Those entered into the name of another person
cannot be implied as against the principal who is
by one who has been given no authority or legal
ignorant of the facts.” Thus, the acts of an agent
representation, or who has acted beyond his
beyond the scope of his authority do not bind the
powers;
principal, unless he ratifies them, expressly or
Effect of the principal receiving the benefits of impliedly. Only the principal can ratify; the agent
the transaction cannot ratify his own unauthorized acts. Moreover,
Where a sale of land is effected through an agent the principal must have knowledge of the acts he is
who made misrepresentations to the buyer that the to ratify.” (Manila Memorial Park Cemetery, Inc. v.
property can be delivered physically to the control of Linsangan, 443 SCRA 377, 394 (2004))
the buyer when in fact it was in adverse possession
of third parties, the seller-principal is bound for such Note: The agent is responsible not only for fraud,
misrepresentations and cannot insist that the but also for negligence, which shall be judged with
contract is valid and enforceable; the seller-principal more or less rigor by the courts, according to
cannot accept the benefits derived from such whether the agency was or was not for
representations of the agent and at the same time compensation.(CIVIL CODE, Art. 1909)

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ACTS OF THE
EFFECT EXCEPTION
AGENT
On behalf of the Binds the principal Agent liable if he:
principal, within the Agent not personally liable (CIVIL i. Expressly makes himself liable
scope of authority CODE, Art. 1881)
Without or beyond Contract is unenforceable as Binding on the principal when:
scope of authority against the principal but binds the i. Ratified or
agent to the third person (CIVIL ii. The principal allowed the agent to
CODE, Arts. 1317, 1403 and 1898) act as though he had full powers
The shall be void if the party with
whom the agent contracted is aware
of the limits of the powers granted by
the principal. In this case, however,
the agent is liable if he undertook to
secure the principal's
ratification.(CIVIL CODE, Art. 1898)
Within the scope of Not binding on the principal. When the transaction involves things
authority but in the Principal has no cause of action belonging to the principal:
agent’s name against the 3rd parties and vice versa • Remedy of the principal - damages for
agent’s failure to comply with the
agency.
• Remedies of the third person in case of
non-performance:
i. If the case falls under the general
rule, he can sue the agent.
ii. But when the contract involves
things belonging to the principal, he
can sue the principal.
iii. But if it cannot be determined
without litigation who is liable, he
can sue both.
Within the scope of the Insofar as 3rd persons are
written power of concerned, not required to inquire
attorney but agent has further than the terms of the written
actually exceeded his power, agent acted within scope of
authority according to his authority;
an understanding Principal is estopped
between him & the
principal
With improper motives Motive is immaterial; as long as Third person knew agent was acting for his
within the scope of authority, valid own benefit: principal is not liable to 3rd
person
Authorized - principal still liable

Beyond the scope of the agent’s

authority
General Rule: Principal not liable
Exception: principal takes
advantage of a contract or receives
benefits made under false
representation of his agent

For the agent’s own benefit –

principal still liable; agent’s motive
immaterial

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Obligation Rules for Commission Agents 3. Reimburse the agent for all advances made by
him provided the agent is free from fault (CIVIL
Memorize Civil Code Provisions on Commission CODE, Art. 1912)
Agents 4. Indemnify the agent for all the damages which
Article 1903. The commission agent shall be the execution of the agency may have caused
responsible for the goods received by him in the the latter without fault or negligence on his part
terms and conditions and as described in the (CIVIL CODE, Art. 1913)
consignment, unless upon receiving them he should 5. Pay the agent the compensation agreed upon
make a written statement of the damage and or the reasonable value of the latter’s services
deterioration suffered by the same. (n) (CIVIL CODE, Art. 1875)
Article 1904. The commission agent who handles Liability of 3rd Persons to the Principal
goods of the same kind and mark, which belong to In Contract – a 3rd person is liable to the principal
different owners, shall distinguish them by upon contracts entered into by his agent, as if the
countermarks, and designate the merchandise contract has been entered into by the principal.
respectively belonging to each principal. (n) (CIVIL CODE, Art. 1897)
Article 1905. The commission agent cannot, without
the express or implied consent of the principal, sell b. Rules on Liability of Two (2) or More
on credit. Should he do so, the principal may Principals
demand from him payment in cash, but the
commission agent shall be entitled to any interest or Requisites for Solidary Liability of Principals
benefit, which may result from such sale. (n) 1. There are two (2) or more principals
2. The principals have all concurred in the
Article 1906. Should the commission agent, with appointment of the same agent
authority of the principal, sell on credit, he shall so 3. The agent is appointed for a common
inform the principal, with a statement of the names transaction or undertaking (CIVIL CODE, Art.
of the buyers. Should he fail to do so, the sale shall 1915)
be deemed to have been made for cash insofar as
the principal is concerned. (n) Note: The rule in Art. 1915 applies even when the
Article 1907. Should the commission agent receive appointments were made by the principals in
on a sale, in addition to the ordinary commission, separate acts, provided that they are for the same
another called a guarantee commission, he shall transaction. The solidarity arises from the
bear the risk of collection and shall pay the principal common interest of the principals and not from
the proceeds of the sale on the same terms agreed the act of constituting the agency.
upon with the purchaser. (n)
The principal is not bound by the acts of the
Article 1908. The commission agent who does not authorized agent where the latter failed to indicate
collect the credits of his principal at the time when in the mortgage that she was acting for and in behalf
they become due and demandable shall be liable for of her principal, and the REM explicitly shows on its
damages, unless he proves that he exercised due face that it was signed by agent in her own name
diligence for that purpose. (n) and personal capacity. The third-party bank has no
one to blame but itself. Not only did it act with undue
Obligations of The Principal haste when it granted and released the loan, but it
also acted negligently in preparing the REM as it
failed to indicate that the agent was signing it for and
a. Obligations Of The Principal To The
on behalf of the principal. (Bucton v. Rural Bank of
Agent
El Salvador, Inc., G.R. No. 179625)
Obligations of the Principal to the Agent Important Note from the Civil Code:
(CARIP) ARTICLE 1925. When two or more principals have
1. Comply with all the obligations agent contracted granted a power of attorney for a common
in representation of the principal (CIVIL CODE, transaction, any one of them may revoke the same
Art. 1910) without the consent of the others. (n)
2. Advance sums necessary for the execution of
the agency, when agent so requests; liable for Rule where two persons contract separately
reimbursement regardless of the undertaking’s with Agent and Principal
success whenever agent had advanced & has Two persons may contract separately with the agent
no fault; includes interest (CIVIL CODE, Art. and the principal with regard to the same thing. If the
1912) two contracts are incompatible with each other, the

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one of prior date shall be preferred. This is d. Agency by Estoppel

subject, however, to the rules on Double Sales
under Art. 1544 of the Civil Code (i.e., for movables: For an agency by estoppel to exist, following must
first in possession, first in right; for immovables: first be proved: (1) principal manifested a representation
to register in good faith, first in right; absent any of the agent’s authority or knowingly allowed the
inscription: first in possession or party who presents agent to assume such authority; (2) third person, in
oldest title acquires ownership). (CIVIL CODE, Art. good faith, relied upon such representation; (3)
1916) relying upon such representation, such third person
has changed his position to his detriment. An
Note: agency by estoppel, which is similar to doctrine of
Article 1917.In the case referred to in the preceding apparent authority, requires proof of reliance upon
article, if the agent has acted in good faith, the representations, which needs proof that the
principal shall be liable in damages to the third representations predated the action taken in
person whose contract must be rejected. If the agent reliance. Litonjua, Jr. v. Eternit Corp., 490 SCRA
acted in bad faith, he alone shall be responsible. (n) 204 (2006).

Agent’s Right of Retention Who can be estopped to deny Agency?

1. Specific (only for those goods connected with 1. Estoppel of Agent
the agency); and Article 1870. Acceptance by the agent may also
2. Until the principal effects the reimbursement be express, or implied from his acts which carry
and pays the indemnity (CIVIL CODE, Art. 1914) out the agency, or from his silence or inaction
according to the circumstances. (n)
Note: The right of retention is limited to two
instances: (a) reimbursement of sums 2. Estoppel by the Principal
advanced by the agent; and (b) indemnification Article 1869. Agency may be express, or
of damages for all damages arising from the implied from the acts of the principal, from his
execution of the agency without fault or silence or lack of action, or his failure to
negligence. (CIVIL CODE, Arts. 1912, 1913, and repudiate the agency, knowing that another
1914) person is acting on his behalf without authority.
Cautionary Note with respect to pledges
mentioned in Article 1914 of the Civil Code: Doctrine of Apparent Authority
Retention and Sale of Object Retained by Way The doctrine of apparent authority focuses on two
of Pledge is now governed by Personal factors:first the principal’s manifestations of the
Property Security Act (R.A. 11057) which existence of agency which need not be expressed,
deleted Art. 2122 of the Civil Code, see sections but may be general and implied; and second, is the
2, 3(j), 5, 6, 7, 49, 50, 51, 66b of the cited reliance of third persons upon the conduct of the
statute. principal or agent. Under the doctrine, the question
in every case is whether the principal has by his
c. Principal’s Liabilities for Expenses voluntary act placed the agent in such a situation
that a person of ordinary prudence, conversant with
General rule: Principal is liable for the expenses business usages and the nature of the particular
incurred by the agent. business, is justified in presuming that such agent
has authority to perform the particular act in
Exceptions (AFUS): question. Professional Services, Inc. v. Court of
1. If the agent Acted in contravention of the Appeals,544 SCRA 170 (2008); 611 SCRA 282
principal's instructions, unless the latter should (2010).
wish to avail himself of the benefits derived from
the contract. The revocation of an agency becomes operative, as
2. When the expenses were due to the Fault of the to the agent, from the time it is made known to him.
agent. Third parties dealing bona fide with one who has
3. When the agent incurred them with knowledge been accredited to them as an agent, however, are
that an Unfavorable result would ensue, if the not affected by the revocation of the agency, unless
principal was not aware thereof. notified of such renovation. This refers to the
4. When it was Stipulated that the expenses would doctrine of apparent authority. Under the said
be borne by the agent, or that the latter would doctrine, acts and contracts of the agent within the
be allowed only a certain sum. (CIVIL CODE, apparent scope of the authority conferred to him,
Art.1918) although no actual authority to do such acts or has
been withdrawn, revoked or terminated, bind the

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principal. Hence, apparent authority may survive the Necessity of Notice of Revocation
termination of actual authority or of an agency 1. As to the agent – notice is always necessary;
relationship. (Bitte v. Jonas, 777 SCRA 489 (2015)) sufficient notice if the party to be notified
actually knows, or has reason to know, a fact
e. Principal's Revocation of The Agency indicating that his authority has been terminated
or suspended; revocation without notice to the
General Rule:The principal may revoke the agency agent will not render invalid an act done in
at will, and compel the agent to return the document pursuance of the authority
evidencing the agency. Such revocation may be 2. As to 3rd persons – notice necessary
express or implied.(CIVIL CODE, Art. 1920) 3. As to former customers - notice must be given
to them because they always assume the
Exception: Agency coupled with interest continuance of the agency relationship
1. When a bilateral contract depends upon the 4. As to other persons - notice by publication is
agency. enough (CIVIL CODE, Art. 1922)
2. When the agency is the means of fulfilling an
obligation already contracted
3. When a partner is appointed as manager of a C. MODES OF EXTINGUISHMENT
partnership in the contract of partnership and
his removal from the management is a. How Agency Is Extinguished
unjustifiable. (CIVIL CODE, Art. 1927)
How Agency is Extinguished (EDWARD)
Implied Revocation of Agency 1. By the Expiration of the period for which the
1. Principal appoints a new agent for the same agency was constituted.
business or transaction (only if there is 2. By the Death, civil interdiction, insanity or
incompatibility); effective as between the insolvency of the principal or of the agent;
principal and the agent only if communicated to 3. By the Withdrawal of the agent;
the agent; does not prejudice rights of third 4. By the Accomplishment of the object or purpose
persons acting in good faith without knowledge of the agency;
of the revocation (CIVIL CODE, Art. 1923) 5. By its Revocation;
2. Principal directly manages the business 6. By the Dissolution of the firm or corporation
entrusted to the agent, or deals directly with 3rd which entrusted or accepted the agency (CIVIL
persons (CIVIL CODE, Art. 1924) CODE, Art. 1919)

Effect of Issuance of a Special Power of Attorney b. Other Modes

The general power is impliedly revoked as to
matters covered by the special power because a
Other Modes
special power naturally prevails over a general
1. Mutual withdrawal from the relationship by the
power (CIVIL CODE, Art. 1926)
principal and agent;
2. By the happening of a supervening event that
f. Principal’s Liability For Damages makes illegal or impossible the objective or
Despite Revocation purpose for which the agency was constituted,
like the destruction of the subject matter which
Principal’s Liability for Damages despite is the object of the agency. (Villanueva &
Revocation Villanueva-Tiansay, 2018)
1. If the agency was constituted for a fixed period,
the principal shall be liable for damages Note: The list is not exclusive; causes are particular
occasioned by the wrongful discharge of the only to agency; may be extinguished by the modes
agent before the expiration of the period fixed of extinguishment of obligations in general
2. Even if there was no time fixed for the whenever they are applicable, like loss of the thing
continuance of the agency, but the agent can and novation.(CIVIL CODE, Art.1291)
prove that the principal acted in bad faith by
revoking the agency in order to avoid the Modes of Extinguishing an Agency, Generally
payment of commission about to be earned, the (ASO)
principal can be held liable for damages Article 1919. Agency is extinguished:
(Villanueva supra at 209-210 (citing Diolosa v. 1. By its revocation;
CA, 130 SCRA 350 & Valenzuela v. CA, 191 2. By the withdrawal of the agent;
SCRA 1)). 3. By the death, civil interdiction, insanity or
insolvency of the principal or of the agent;

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4. By the dissolution of the firm or corporation But: When the terms of the agency contract allowed
which entrusted or accepted the agency; the agent “to dispose of, sell, cede, transfer and
5. By the accomplishment of the object or convey x xx until all the subject property as
purpose of the agency; subdivided is fully disposed of,” the agency is one
6. By the expiration of the period for which the with a period and it is not extinguished until all the
agency was constituted. (1732a) lots have been disposed of. Consequently, if the
contract is terminated by the principal before all the
Note: Even if the reason for extinguishing the lots in the subdivision has been disposed of, there
agency is not true, the agent cannot insist on is a breach of contract for which the principal would
reinstatement. The agent can only demand be liable for damages. Diolosa v. Court of Appeals,
damages. (Orient Air Services v. Court of Appeals, 130 SCRA 350 (1984).
G.R. No. 76931)
Renunciation/Withdrawal
c. Exceptions to Extinguishment by Death Termination of the agency by the subsequent act of
the agent(CIVIL CODE, Art. 1919 [2])
Exceptions to Extinguishment by Death (KID-C)
1. If the act of the agent was executed without May the agent withdraw from the agency at will?
the Knowledge of the death of the principal Agent may do so but subject to the contractual
and the third person who contracted with obligations owing to the principal (i.e., fixed period
the agent acted in good faith. () Rallos v. of time for the agency or purpose not yet
Felix Go Chan & Sons Realty Corp., 81 accomplished).(CIVIL CODE, Art. 1928)
SCRA 251 (1978))
2. To avoid Damage upon the agent’s death Irrevocable Agencies:
(CIVIL CODE, Art. 1932) Article 1927. An agency cannot be revoked if a
3. The act of the agent was executed without bilateral contract depends upon it, or if it is the
knowledge of the death of the principal and means of fulfilling an obligation already contracted,
the third person who contracted with the or if a partner is appointed manager of a partnership
agent acted in good faith (CIVIL CODE, Art. in the contract of partnership and his removal from
1931) the management is unjustifiable. (n)
4. If it has been constituted in the Common
interest of the principal and of the agent, or Article 1930. The agency shall remain in full force
in the interest of a third person who has and effect even after the death of the principal, if it
accepted the stipulation in his favor (CIVIL has been constituted in the common interest of the
CODE, Art. 1930) latter and of the agent, or in the interest of a third
person who has accepted the stipulation in his favor.
Can the heirs continue the agency? (n)
General rule: Agency calls for personal services on
the part of the agent; rights & obligations are not When the bank has been constituted with an
transmissible irrevocable power of attorney to file a claim in case
of loss or damage to the mortgaged vehicle, and
Revocation fails to make such claim and instead compels the
Termination of the agency by the subsequent act/s spouses-borrowers to continue paying the
of the principal(CIVIL CODE, Arts. 1920, 1924, installments, the resort of the spouses to directly file
1926): a claim with the insurance company does not of
itself amount to a revocation of the agency
Article 1920. The principal may revoke the agency arrangement as to relieve the bank of its duty of
at will, and compel the agent to return the document diligence. Besides the agency was irrevocable
evidencing the agency. Such revocation may be towards allowing the bank to seek proceeds for the
express or implied. (1733a) full payment of the loan; failing in such duty, the
bank can no longer collect on the unpaid balance of
Article 1924. The agency is revoked if the principal the loan. Int’l Exchange Bank v. Briones, 822 SCRA
directly manages the business entrusted to the 103 (2017).
agent, dealing directly with third persons. (n)
Unlike simple SPAs, an agency coupled with
Article 1926. A general power of attorney is revoked interests cannot be revoked at will, since it had been
by a special one granted to another agent, as created for the mutual interest of the agent and the
regards the special matter involved in the latter. (n) principal. It appears that Lina Sevilla is a bona fide
travel agent herself, and had acquired an interest in
the business entrusted to her: she had assumed a

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personal obligation for the operation thereof, holding

herself solidarily liable for the payment of rentals;
she used her own name in pursuing the business,
after Tourist World had stopped further operations.
Her interest, obviously, is not limited to the
commissions she earned as a result of her business
transactions, but one that extends to the very
subject matter of the power of management
delegated to her. It is an agency that cannot be
revoked at the pleasure of the principal. Sevilla v.
Court of Appeals, 160 SCRA 171 (1988).

A power of attorney coupled with interest in a

partnership can be revoked for a just cause, such as
when the attorney-in-fact betrays the interest of the
principal. The irrevocability of the power of attorney
may not be used to shield the perpetration of acts in
bad faith, breach of confidence, or betrayal of trust,
by the agent for that would to authorizing the agent
to commit frauds against the principal. Coleongco v.
Claparols, 10 SCRA 577 (1964).

In accordance with this authority and to protect his

and Quintos' interests over the subject property
pursuant to the October 15, 2004 MOA, Padilla filed
the instant complaint for damages against Cecilia.
Indubitably, the lease agreement over the hotel
complex is the subject matter of the agency, and it
is clear from the records that Padilla has a material
interest in the subject matter as he has introduced
substantial improvements therein. In view of their
respective interests, Quinto being the owner and
Padilla being the author of the improvements found
in the hotel complex, both agreed to lease the
property and to share in the earnings from the lease
contract entered into with Cecilia over the subject
property. The August 28, 2007 SPA, therefore, is the
means of fulfilling an obligation already contracted,
which is the October 15, 2004 MOA in this case.
(Locsin v. Puerto Galera Resort Hotel, Inc., G.R. No.
233678, July 27, 2022)

--end of topic--

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XII. CREDIT TRANSACTIONS A. MUTUUM AND COMMODATUM

Characteristics of Loans
TOPIC OUTLINE UNDER THE SYLLABUS
1. Real Contract – delivery is essential for
perfection of the loan (BUT a promise to lend,
A. MUTUUM AND COMMODATUM
being consensual, is binding upon the parties)
2. Unilateral Contract - only the borrower has
B. DEPOSIT
the obligation once the subject matter has
been delivered
C. GUARANTY AND SURETYSHIP
Art. 1933 (06, 04, BAR): If the bailor delivers to the
D. REAL ESTATE MORTGAGE
bailee a non-consumable thing so that bailee may
use the same for a certain time and return the
E. PERSONAL PROPERTY SECURITY ACT
identical thing, the contract perfected is a contract
of commodatum. There is NO TRANSFER OF
OWNERSHIP.

In mutuum, the object borrowed must be a

consumable thing the OWNERSHIP OF WHICH IS
TRANSFERRED to the borrower who incurs the
obligation to return the same consumable to the
lender in an equal amount, and of the same kind and
quality.

1. Kinds

a. Commodatum

Parties in Bailment
Bailor – The lender/giver; the party who delivers
possession/custody of the thing bailed
Bailee – The recipient; the party who receives the
possession/custody of the thing delivered

Commodatum – bailor delivers to bailee a non-

consumable thing so that the latter may use it for
a certain time and return the identical thing

Exception to the object: May be a consumable

thing if the purpose is merely exhibition.

COMMODATUM USUFRUCT
The bailee only The usufructuary gets
acquires the use of the the right to the use and
thing loaned but not its to the fruits of the
fruits. (Art. 1935) usufruct. (Art. 564)
It creates only a purely It creates a real right
personal right to use to the fruits of another’s
another’s property, and property. (Art. 564)
requires a stipulation to
enable the bailee to
“make use” of the fruits.
(Arts. 1939-1940)
Real contract; Consensual contract
perfected only by
delivery of the subject
matter thereof. (Art.
1934)

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Elements of commodatum 5. If, being able to save either the thing to a

1. Delivery of non-consumable thing; third person or his own thing, he chose to
2. Obligation to return it save the latter. (Art. 1942)
3. Essentially Gratuitous (Art. 1933).
Art. 1951 (05, BAR):
Kinds of commodatum General Rule: Bailee has no right of retention on
(a) Ordinary commodatum – bailee uses the the ground that the bailor owes him something.
thing for a certain period of time
(b) Precarium – bailor may demand the return Exception: Art. 1951 on hidden defects (Bailor who
of the thing loaned at will; exists in cases knows hidden defects but does not advise bailee is
where: liable to bailee for damages suffered because of the
i. There is no stipulation as to the hidden defects).
duration of the contract or use of the
thing loaned; or 1. Bailor cannot demand return until after (a)
ii. Use of the thing is merely tolerated by expiration of period stipulated, or (b)
the owner (Art. 1947). accomplishment of use for which
commodatum was constituted. (Art. 1946)
Principal Obligations of a Bailee in a a. Exceptions:
Commodatum i. If the bailor urgently needs the thing
1. Take good care of the thing with the (may demand return/temporary
diligence of a good father of a family. (Art. use); or
1163) ii. The bailor may demand immediate
2. Use the thing loaned only for the purpose return of the thing if the bailee
for which it was loaned and for no other commits any acts of ingratitude. (Art.
purpose. (Art. 1935) 1948)
3. Pay the ordinary expenses for the use and 1. If the bailee should commit
preservation of the thing loaned. (Art. 1941) some offense against the
4. Pay a 50% portion (unless otherwise person, the honor or the
stipulated) of extraordinary expenses property of the bailor, or of his
arising from the actual use of the thing, wife or children under his
even though the bailee acted without fault. parental authority;
The bailor shoulders the remaining 50%, 2. If the bailee imputes to the
unless otherwise stipulated. (Art. 1949, par. bailor any criminal offense, or
2) any act involving moral
5. Return and not retain the thing loaned turpitude, even though he
except for damages mentioned in Art. 1951 should prove it, unless the
(those arising from hidden defects of the crime or the act has been
thing loaned). committed against the bailee
himself, his wife or children
When is the bailee in a commodatum liable for under his authority;
the loss of the thing which is the object of the 3. If he unduly refuses to give the
contract, even if such loss is due to a fortuitous bailor support when the bailee
event? is legally or morally bound to do
1. If he devotes the thing to any purpose so.
different from that for which it has been 2. The bailor shall refund to the bailee
loaned. extraordinary expenses incurred for the
2. If he keeps it longer than the period preservation of the thing, provided the
stipulated, or after the accomplishment of bailee brings the same to the knowledge of
the use which the commodatum has been the bailor before incurring them, except
constituted. when the reply to the notification cannot be
3. If the thing loaned has been delivered with awaited without danger. (Art. 1949, par. 1)
the appraisal of its value, unless there is a However, if the extraordinary expenses
stipulation exempting the bailee from arise on the occasion of the actual use by
responsibility in case of a fortuitous event. the bailee, even though he acted without
4. If he lends or leases the thing to a third fault, they shall be borne equally by both
person, who is not a member of his the bailor and the bailee, unless there is a
household. stipulation to the contrary. (Art. 1949, par.
2)

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3. The bailor shall be liable for damages which b. Mutuum

the bailee may suffer for failure of the bailor
to advise the former of flaws (hidden Mutuum or Simple Loan - lender delivers to the
defects) of the thing loaned which are borrower money or other consumable thing upon the
known to him. (Art. 1951) condition that the latter will pay the same amount of
the same kind and quality (Art. 1953)
Who bears the expenses in a contract of
Commodatum? Obligations of a borrower in a simple loan or
Bailee. The Bailee is mutuum
obliged to pay for the 1. Pay the creditor an equal amount of the
ordinary expenses for same kind and quality. (Art. 1953)
Ordinary Expenses the use and 2. Pay interest, if stipulated in writing. (Art.
preservation of the 1956)
thing loaned. (Art.
1941) Obligation of the Borrower to Pay
Bailor. The bailor shall 1. What?
refund the a. Money
extraordinary i. General Rule: Same amount
expenses during the ii. Exception: may change under
contract for the certain circumstances, such as
preservation of the when there is an extraordinary
thing loaned, provided inflation or deflation of the
Extraordinary currency stipulated, as
the bailee brings the
Expenses for declared by the Bangko Sentral
same to the knowledge
Preservation ng Pilipinas.
of the bailor before
incurring them, except b. Fungible thing other than money:
when they are so another thing of the same kind, quantity
urgent that the reply to and quality. In case it is impossible, the
the notification cannot borrower is required to deliver its value
be awaited without at the time of perfection of the loan.
danger. (Art. 1949) 2. When?
50-50 between the a. If one is provided, the period agreed
Bailor and the Bailee. upon.
Extraordinary b. If none is provided, payable
expenses arise on the immediately; if the parties intended a
occasion of the actual period but the same was not specified,
use of the thing by the the court may fix the period. (Art. 1197)
Extraordinary bailee, even though he c. Payable immediately when the debtor
Expenses for use acted without fault, loses the right to make use of the period
they shall be borne under Article 1198
equally by both the i. When after the obligation has been
bailor and the bailee, contracted, he becomes insolvent,
unless there is a unless he gives a guaranty or
stipulation to the security for the debt;
contrary. (Art. 1949) ii. When he does not furnish to the
Bailee. If, for the creditor the guaranties or
purpose of making use securities which he has promised;
of the thing, the bailee iii. When by his own acts he has
Extraordinary impaired said guaranties or
incurs expenses other
Expenses other than securities after their establishment,
than those referred to
for Preservation of for and when through a fortuitous
in articles 1941 and
Use event they disappear, unless he
1949, he is not entitled
to reimbursement. (Art. immediately gives new ones
1950) equally satisfactory;
iv. When the debtor violates any
undertaking, in consideration of
which the creditor agreed to the
period;

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v. When the debtor attempts to reduced in writing. The concurrence of the two
abscond. conditions is required for the payment of monetary
interest.
2. Interest
Compensatory interest (i.e., interest awarded as
damages under Articles 2209 to 2213 of the Civil
The two types of interest are the following:
Code) is that which is "allowed in actions for breach
1. Monetary or conventional interest –
of contract or tort for the unlawful detention of
refers to the compensation set by the
money already due." As the governing provisions
parties for the use or forbearance of money;
indicate, compensatory interest may be imposed by
and
law or by the courts as penalty or indemnity for
2. Compensatory interest – interest that
damages.
may be imposed by law or by courts as
penalty for damages. (Hun Hyung Park v. In the present case, the principal award represents
Eung Won Choi, G.R. No. 220826, March the material cost adjustment incurred by Company
27, 2019) A which Company B failed to pay. The award
proceeds from Company B's breach of its
Note: Compensatory/penalty/indemnity interest construction contract with Company A — a contract
refers to damages paid arising from delay in paying which does not constitute a loan or forbearance of
a fixed sum of money or delay in assessing and money. Accordingly, the interest disputed herein
paying damages. (Sps. Abella v. Sps. Abella, G.R. constitutes compensatory interest awarded
No. 195165, July 08, 2015) pursuant to Article 2210 of the Civil Code.
(Philippine Commercial and International Bank v.
Q: Company A contracted Company B to apply William Golangco Construction Corp. G.R. No.
a granite wash-out finish on the exterior walls of 195372, April 10, 2019)
one of its buildings. However, the finish began
peeling off and falling from the walls. Company When will interest due and unpaid earn interest?
A got Company B to do minor repairs. Company Generally, interest due and unpaid shall not earn
A also got Company C to redo the entire finish interest, except:
after Company B manifested that it was not in a 1. Interest due shall earn legal interest at the
position to do new finishing work. Although, rate of 6% per annum from the time it is
Company B expressed that it was willing to judicially demanded until fully paid,
share part of the cost. although the obligation may be silent upon
this point. (Art. 2212)
The Construction Industry Arbitration
2. If there is agreement to this effect. (Art.
Commission (CIAC) decided that Company B
1959)
was entitled to recover from Company A
representing the cost of repairs done by another
Note: Interest on interest refers to interest due on
contractor. Company A assailed the portion on
accrued conventional/stipulated interest. (Sps.
its liability for construction defects. The SC held
Abella v. Sps. Abella, G.R. No. 195165, July 08,
that Company A was not liable for the amount
2015)
claimed by Company B.
Company B moved for reconsideration arguing When will the debtor be liable for interest even
that its liability for interest should commence on in the absence of stipulation to pay interest?
the date on which the SC’s decision that granted Generally, no interest shall be due unless it has
Company A’s appeal became final and not on been expressly stipulated in writing. (Art. 1956)
when the CIAC decision was issued.
In the following instances, interest is due even if not
What interest is involved, monetary or expressly stipulated:
compensatory? 1. If the obligation consists in the payment of
a sum of money, and the debtor incurs in
A: The interest is compensatory. delay, the indemnity for damages, there
Monetary interest under Article 1956 of the Civil being no stipulation to the contrary, shall be
Code serves as compensation fixed by the parties the payment of the interest agreed upon,
for the use or forbearance of money. As can be and in the absence of stipulation, the legal
gleaned from the foregoing provision, payment of interest, which is six per cent per annum
monetary interest is allowed only if: (i) there was an (Art. 2209); or
express stipulation for the payment of interest; and 2. Interest due shall earn legal interest from
(ii) the agreement for the payment of interest was the time it is judicially demanded, although

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the obligation may be silent upon this point. accordance with Article 1169 of the Civil
(Art. 2212) Code, UNTIL FULL PAYMENT, without
compounding any interest unless
What is the legal interest rate? compounded interest is expressly
Beginning July 1, 2013, the rate of interest on the stipulated by law or regulation.
loan or forbearance on money, goods, or credits and a. Interest due on the principal
the rate allowed in judgments, in the absence of amount accruing as of judicial
stipulation, shall be 6% per annum. (BSP Circular demand shall SEPARATELY earn
No. 799) legal interest at the prevailing
rate prescribed by the Bangko
However, judgments that became final and Sentral ng Pilipinas, from the
executory before July 1, 2013 shall continue to time of judicial demand UNTIL
apply the previous legal rate of 12% per annum. FULL PAYMENT.
(NACAR v. Gallery Frames Inc., G.R. No. 189871, 3. When the obligation, not constituting a
2013) loan or forbearance of money, goods,
credits or judgments, is breached, an
Note: The computation of the amount due must take interest on the amount of damages
into consideration the legal rate or rates (6% and/or awarded may be imposed in the
12% per annum) applicable throughout the duration discretion of the court at the prevailing
of the period in which interest runs. (DPWH legal interest prescribed by the Bangko
Secretary vs. Spouses Tecson, G.R. No. 179334, Sentral ng Pilipinas, pursuant to Articles
2015) 2210 and 2011 of the Civil Code. No
interest, however, shall be adjudged on
What are the rules in the computation of legal unliquidated claims or damages until the
interest? (Lara’s Gifts & Decors v. Midtown demand can be established with
Industrial Sales, G.R. No. 225433, 2019) reasonable certainty.
1. When the obligation is breached, and it 4. Accordingly, where the amount of the claim
consists in the payment of a sum of or damages is established with
money, i.e., a loan or forbearance of reasonable certainty, the prevailing legal
money, goods, credits or judgments, the interest shall begin to run from the time
interest due shall be that which is the claim is made extrajudicially or
stipulated by the parties in writing, judicially (Art. 1169, Civil Code) UNTIL
provided it is not excessive and FULL PAYMENT, but when such certainty
unconscionable, which, in the absence of a cannot be so reasonably established at
stipulated reckoning date, shall be the time the demand is made, the interest
computed from default, i.e., from shall begin to run only from the date of the
extrajudicial or judicial demand in judgment of the trial court (at which time
accordance with Article 1169 of the Civil the quantification of damages may be
Code, UNTIL FULL PAYMENT, without deemed to have been reasonably
compounding any interest unless ascertained) UNTIL FULL PAYMENT.
compounded interest is expressly 5. The actual base for the computation of
stipulated by the parties, by law or the interest shall, in any case, be on the
regulation. principal amount finally adjudged,
a. Interest due on the principal without compounding any interest unless
amount accruing as of judicial compounded interest is expressly
demand shall SEPARATELY stipulated by law or regulation.
earn legal interest at the
prevailing rate prescribed by the Must the manner of compounding the interest
Bangko Sentral ng Pilipinas, also be in writing?
from the time of judicial demand In a loan agreement, compounding of interest has to
UNTIL FULL PAYMENT. be in writing to be valid. Payment of monetary
2. In the absence of stipulated interest, in a interest shall be due only if:
loan or forbearance of money, goods, i. There was an express stipulation for
credits or judgments, the rate of interest the payment of interest; and
on the principal amount shall be the ii. The agreement for such payment was
prevailing legal interest prescribed by in writing. The first requirement does
the Bangko Sentral ng Pilipinas, which not only entail reducing in writing the
shall be computed from default, i.e., from interest rate to be earned but also the
extrajudicial or judicial demand in manner of earning the same, if it is to

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be compounded. (Albos v. Embisan, remains valid but the stipulation as to the

G.R. No. 210831, 2014) usurious interest is void. Consequently, the debt
is to be considered without stipulation as to the
Can the stipulated interest be modified? interest. (First Metro Investment Corp. v. Este Del
Any modification of stipulated interest (e.g., allowing Sol Mountain Reserve, Inc., G.R. No. 141811, 2001)
the creditor to unilaterally increase or decrease the
interest rate at any time) must be mutually agreed The principal debt remaining with stipulation for
upon, otherwise, it has no binding effect. Further, a payment of interest can thus be recovered. In case
borrower may not be required to prepay the loan if of judicial or extrajudicial demand, and the debtor
he is not agreeable to the arbitrary interest rates incurs in delay, the debt earns legal interest from the
being imposed. (Spouses Silos v. PNB, G.R. No. date of the demand. Such interest is not due to
181045, 2014) stipulation, for there was none, the same being void.
Rather, it is due to the general provision of law that
What is usury? in obligations to pay money, where the debtor incurs
Contracting for or receiving something in excess of in delay, he has to pay interest by way of damages
the amount allowed by law for the loan or (Art. 2209, Civil Code)
forbearance of money, goods or chattels. (De Leon,
citing Tolentino v. Gonzales, 50 Phil. 558 (1927)). Distinguish escalation clauses from floating rate
of interest clauses. (Security Bank Corp. v.
When is the Usury Law’s effectivity suspended? Spouses Mercado, 2018)
The Monetary Board of Central Bank issued CB ESCALATION FLOATING RATE
Circular 905, effective January 1, 1983, removed the CLAUSES OF INTEREST
ceilings on interest rate on loans or forbearance of These are stipulations It refers to the variable
money, goods, or credit. The Circular did not repeal which allow for the interest rate stated on
nor in any way amend the Usury Law but simply increase (as well as the a market-based
suspended the latter’s effectivity. Interest can now mandatory decrease) of reference rate agreed
be charged as lender and borrower may agree the original fixed interest upon by the parties.
upon. (Medel v. Court of Appeals, G.R. No. 131622, rate.
November 27, 1998) This pertains to the
It is the method by which interest rate itself that
While it is true that the interest ceilings set by the fixed interest rates may is not fixed.
Usury Law are no longer in force, it has been held be increased
that PD 1684 and CB Circular 905 merely allow
contracting parties to stipulate freely on any Q: Petitioner X was granted a loan by Bank A
adjustment in the interest rate on a loan by secured by a real estate mortgage. The interest
forbearance of money but do not authorize a rate agreed upon by the parties was 17% per
unilateral increase of the interest rate by one party annum. When X failed to pay some
without the other's consent (PNB v. CA, G.R. No. L- amortizations, Bank A unilaterally escalated the
26001, 1968). To be valid, therefore, any change of interest rate from 17% to 24% without the
interest must be mutually agreed upon by the parties knowledge of X or even an explanation as to why
(Dizon v. Magsaysay, G.R. No. L-23399, 1974) the interest rates were increased. X filed a
complaint against Bank A. Bank A defended the
Is the interest payment of 5% per month escalation, saying it was based on a stipulation
excessive? in the loan agreement that the interest rate
A: YES. 5% per month or 60% per annum interest would be subjected to escalations. Was the
rate is void for being unconscionable, the interest escalation of interest rate made by Bank A
rate prescribed by the Bangko Sentral ng Pilipinas valid?
(BSP) for loans or forbearances of money, credits or
goods will be the surrogate or substitute rate not A: No. Even though there was a stipulation in the
only for the one-year interest period agreed upon loan agreement that the in the loan agreement that
but for the entire period that the loan of Zenaida the interest rate would be subjected to escalations,
remains unpaid. (Bulatao v. Estonactoc, G.R. No. Bank A failed to explain how it arrived to such
235020, 2019) interest rates. While escalation clauses are not
wrong, they must not be solely potestative and
What is the consequence of having usurious should be based on reasonable grounds. Further,
interest? the interest rate imposed upon Petitioner X is
In usurious loans, the entire obligation does not violative of the principle of mutuality of contracts.
become void because of an agreement for usurious Art. 1308 of the Civil Code provides that a contract
interest; the unpaid principal debt still stands and must bind both parties; its validity or compliance

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cannot be left to the will of one of them. (Vasquez v. Security or to Custody and
PNB, G.R. Nos. 228355 & 228397, August 28, ensure the safekeeping
2019) right of a party
to the property
Purpose
or to recover
B. DEPOSIT in case of
favorable
Deposit is constituted from the moment a person judgment
receives a thing belonging to another, with the Movable or Movables only
obligation of safely keeping it and of returning the immovable
Subject
same (Art. 1962). property, but
Matter
Note: Safekeeping must be the principal purpose of generally
the contract. Otherwise, it is not a deposit. immovable
Always May be
Characteristics onerous compensated
Cause but generally
1. Real - because it is perfected only by the delivery
of the subject matter gratuitous
a. BUT: An agreement to constitute a deposit Upon order of Gratuitous:
is binding and enforceable, since it is the court / end demand of
merely consensual of litigation depositor
2. Unilateral - if gratuitous (Art. 1988) or
3. Bilateral - if with compensation
return by
depositary for
Creation of deposit (Art. 1964)
1. By virtue of a court order; or
justifiable
2. By law reasons (Art.
3. By the will of the parties 1989)
Return of Compensated:
Kinds of Deposit thing The
1. Judicial - when an attachment or seizure of depositary
property in litigation is ordered may retain the
2. Extrajudicial (Art. 1967) thing in pledge
a. Voluntary - delivery is made by the will of until full
the depositor or by two or more persons payment of
each of whom believes himself entitled to what may be
the thing deposited due him by
b. Necessary - made in compliance with a reason of
legal obligation, or on the occasion of any deposit (Art.
calamity, or by travelers in hotels and inns 1994)
or by travelers with common carriers. There Person who Depositor or
In whose
is lack of free choice in the depositor. has a right to 3rd person
behalf it is
the thing designated
held
General Rule: A deposit is generally gratuitous. deposited
(Art. 1965)
Subject Matter of Deposit (Art. 1966)
1. As to the thing itself
Exceptions: [JESS]
a. General Rule: Only movable or
1. When there is a contrary Stipulation
personal property may be the object of
2. Where depositary is Engaged in the business of deposit (whether voluntary or
storing goods
necessary); however, deposit does not
3. Where property is Saved from destruction include incorporeal/intangible
without knowledge of the owner property, such as rights and actions, for
4. Judicial deposit it follows the owner, wherever he goes
EXTRA- and not susceptible of custody
JUDICIAL
JUDICIAL b. Exception: In judicial deposit, it may
Will of the Will of the cover both movable and immovable
Creation court contracting property
parties

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2. As to ownership principal purpose of the contract, it is still a deposit

a. General Rule: The depositor must be but an irregular one; hence, an Irregular Deposit.
the owner of the thing deposited Example: Bank deposit (De Leon)
b. Exceptions: It may belong to another
person than the depositor IRREGULAR
i. When two or more persons claiming BASIS MUTUUM
DEPOSIT
to be entitled to a thing may deposit Demandable Lender is
the same with a third person. In such at will of the bound by the
case, the third person assumes the irregular provisions of
obligation to deliver to the one to depositor for the contract
whom it belongs. whose benefit and cannot
ii. Interpleader – the action to compel the deposit seek
the depositors to settle their has been restitution
conflicting claims. Here, one of the Demandability
constituted until the time
depositors is not the owner. of payment
as provided in
Form of Contract of Deposit the contract
General rule: A contract of deposit may be entered has arisen
into (but not perfected) orally or in writing (Art. 1969) (except under
Art. 1198)
However: Delivery of the thing deposited is needed Benefit If with
for perfection. accrues to the interest,
Benefit
depositor benefit of
DEPOSITARY DEPOSITARY both parties
CAPACITATED; INCAPACITATED;
DEPOSITOR DEPOSITOR Obligations of the Depositary
INCAPACITATED CAPACITATED 1. Safekeep the thing deposited
Depositary is subject to Depositary does not 2. Return the thing on the date stipulated or
ALL the obligations of a incur the obligations of when depositor claims it (even before the
depositary a depositary stipulated date, subject to depositor’s right
Depositary must return Depositary, however, of retention)
the property either to: is liable to: 3. Not to transfer deposit
a) The legal a) Return the 4. Not to change the way of deposit
representative thing 5. To collect on the choses in action deposited
of the deposited 6. Not to commingle things if so stipulated
incapacitated; while still in 7. Not to make use of the things so deposited
OR his 8. Liability for loss through fortuitous event
b) The depositor possession; 9. To return in the same conditionwhen the
himself if he AND thing is closed and sealed
should acquire b) Pay the 10. To return fruits, accessories and
capacity depositor the accessions
amount by 11. To pay interest on sums converted to
which he may personal use
have 12. Cannot require that the depositor prove his
benefited ownership over the thing
himself with 13. Toreturn the thing to the depositor, after
the thing or its one (1) month, when third person appears
price (subject to be the owner
to the right of 14. To observe the rules on active solidary
any 3rd person when there are two or more depositors
who acquires 15. To return to the person to whom return
the thing in must be made
good faith) 16. In case of loss by force majeure or
government order, to deliver to the
Conversion of Deposit to Mutuum depositor money or another thing he
If the thing deposited is money or other consumable receives in place of the thing
thing, the permission to use it will result in its 17. To pay for damages in case of alienation in
consumption and converts the contract into a simple bad faith by the depositary’s heir of the
loan or mutuum. However, if safekeeping is still the thing deposited

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Two primary obligations (Art. 1972) Note: Liability for loss without fortuitous event:
1. Safekeeping of the object Depositary presumed at fault since he is in
a. Degree of Care – same diligence as he possession (Art. 1265)
would exercise over his property
(ordinary diligence) Obligation not to change the way of deposit
b. Note: The depositary cannot excuse a) General rule: Depositary may not change
himself from liability, in the event of loss, the way of the deposit. (Art. 1974)
by claiming that he exercised the same b) Exception: If there are circumstances
amount of care toward the thing indicating that the depositor would consent
deposited as he would towards his own to the change. This is a situation wherein
if such care is less than that required by the depositary would reasonably presume
the circumstances. that the depositor would agree to the
2. Return of the thing change if he knows of the facts of the
situation (Art. 1974)
Obligation not to Transfer deposit (Art. 1973)
1. General rule: The depositary is not allowed Requisites:
to deposit the thing with a third person. a) The depositary must notify the depositor of
a. Reason: A deposit is founded on trust such change; and
and confidence and it can be supposed b) Must wait for the reply of the depositor to
that the depositor, in choosing the such change.
depositary, has taken into consideration Note: These requisites may not be dispensed with
the latter’s qualification unless delay would cause danger.
2. Exception: The depositary is authorized by
express stipulation Obligation to Collect Interest on the choses in
action deposited (Art. 1975)
Liabilities: Depositary is liable for loss of the thing a) If the thing deposited should earn interest,
deposited when: the depositary is under the obligation to:
a) He transfers the deposit with a third person i. Collect the interest as it becomes due.
without being authorized to do so although ii. Take such steps as may be necessary
there is no negligence on his part and the to preserve its value and the right
third person; corresponding to it.
b) He deposits the thing with a third person b) The depositary is bound to collect the
who is manifestly careless or unfit, although capital, as well as the interest, when due.
authorized to transfer the deposit, even in Note: The obligation to collect in the choses in
the absence of negligence; or action does not apply to contracts for the rent of
c) The thing is lost through the negligence of safety deposit boxes.
his employees whether the latter are
manifestly careless or not. Contract of rent of safety deposit boxes (Art.
1975)
Exemption from liability: The thing is lost without • A contract for the rent of safety deposit
the negligence of the third person with whom he was boxes is not an ordinary contract of lease of
allowed to deposit the thing if such third person is things, but a special kind of deposit; hence,
not “manifestly careless or unfit” (e.g., minor). it is not to be strictly governed by the
provisions on deposit.
Liability for Loss through fortuitous event (Art. • The relation between a bank renting out
1979) safety deposit boxes and its customer with
General rule: Depositary is not liable for loss of the respect to the contents of the box is that of
thing deposited through a fortuitous event without bailor and bailee.
his fault (Art. 1174)
Obligation not to Commingle things if so
Exceptions: (USDA) stipulated (Art. 1976)
a) If it is so Stipulated General rule: The depositary is permitted to
b) If he Uses the thing without the depositor’s commingle grain or other articles of the same kind
permission and quality
c) If he Delays in its return
d) If he Allows others to use it, even though Effects:
he himself may have been authorized to a) The various depositors of the mingled
use the same goods shall own the entire mass in
common

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b) Each depositor shall be entitled to such b) Relation of creditor and debtor – the
portion of the entire mass as the amount relation between a depositor and a bank is
deposited by him bears the whole that of a creditor and a debtor.

Exception: When there is a stipulation to the [A] bank has a right of legal compensation or set off
contrary of the deposit in its hands for the payment of any
indebtedness to it on the part of the
Obligation not to make Use of the things depositor. (Gullas v. Philippine National Bank, G.R.
deposited (Art. 1977) No. 43191, [November 13, 1935], 62 PHIL 519-523)
General rule: Deposit is for safekeeping of the
subject matter and not for its use Obligation when the thing deposited is Closed
and Sealed (Art. 1981)
Exceptions: The depositary has the obligation to:
1. Expressly authorized by the depositor a) Return the thing deposited when delivered
2. Such use is necessary for its preservation closed and sealed in the same condition.
but limited for the purpose only b) Pay for damages should the seal or lock be
A. Effect of unauthorized use: Liability for broken through his fault, which is presumed
damages unless proven otherwise.
B. Effects of authorized use: (Art. 1978) c) Keep the secret of the deposit when the
I. If the thing deposited is non- seal or lock is broken, with or without his
consumable fault.
1. General rule: The contract
loses the character of a When depositary justified in opening closed and
deposit and acquires that of a sealed subject matter (Art. 1982):
commodatum, despite the a) The depositary is presumed authorized to
fact that the parties may have do so if the key has been delivered to him.
denominated it as a deposit b) When the instructions of the depositor as
2. Exception: Safekeeping is regards the deposit cannot be executed
still the principal purpose of without opening the box or receptacle
the contract (Necessity).
II. If the thing deposited is money or
other consumable thing: Where Third person appears to be the owner
1. General rule: Converts the (Art. 1984)
contract into a simple loan or The depositary may be relieved from liability
mutuum when:
a) He advised the true owner of the thing of
2. Exception: Safekeeping is
the deposit
still the principal purpose of
the contract, but it becomes b) If the owner, in spite of such information,
does not claim it within the period of one
an irregular deposit. Bank
month (30 days), and the depositary
deposits are in the nature of
irregular deposits, but they returns the thing deposited to the depositor.
are really loans governed by
the law on loans. Obligation of the depositary when there are two
or more depositors (Art. 1985)
1. Divisible thing and joint depositors – each
An instrument acknowledging receipt of a sum of
money as a deposit returnable two months after one of the depositors can demand only his
share proportionate thereto
notice with interest is evidence of a contract of loan
a. General Rule: Each one of the
and not of deposit. (Gavieres v. Pardo de Tavera,
G.R. No. 6, [November 14, 1901], 1 PHIL 71-73) depositors may do whatever may
be useful to the others (Art. 1212)
b. Exception: Anything which may
Relation between bank and depositor (Art. 1980)
Fixed, savings, and current deposits of money in be prejudicial to the other
banks and similar institutions shall be governed by depositors
2. Indivisible thing or solidary depositors –
the provisions concerning simple loan.
a) Contract of loan – deposits in banks are rules on active solidarity
really loans because the bank can use the a. General Rule: The depositary
may return the thing to any one of
same for its ordinary transactions
the solidary depositors

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b. Exception: When a demand, b) When notified of the opposition of a third

judicial or extrajudicial, for its person to the return or the removal of the
return has been made by one of thing deposited
them in which case delivery should
be made to him Right of the depositary to return the Thing
3. Return to one of the depositors stipulated deposited (Art. 1989)
a. If by stipulation, the thing should Note: In this case, it is the depositary returning the
be returned to one of the deposit with or without the demand of the
depositors, the depositary is depositor.
bound to return it only to the
person designated, although he General Rule: The depositary may return the thing
has not made any demand for its deposited, notwithstanding that a period has been
return fixed for the deposit, if:
a) The deposit is gratuitous
Obligation to Return to the person to whom b) The reason is justifiable
return must be made (Art. 1986) • Remedy if depositor refuses to receive the
1. The depositary is obliged to return the thing thing: The depositary may deposit the thing
deposited, when required, to: at the disposal of the judicial authority.
a. The depositor;
b. To his heirs or successors; or Exception: When the deposit is for a valuable
c. To the person who may have been consideration, the depositary has no right to return
designated in the contract. the thing before the expiration of the time
2. If the depositor was incapacitated at the designated even if he should suffer inconvenience
time of making the deposit, the property as a consequence.
must be returned to:
a. His guardian or administrator Depositary’s liability in case of Loss by force
b. To the depositor himself should he majeure or government order (Art. 1990)
acquire capacity Depositary is not liable in cases of loss by force
3. Even if the depositor had capacity at the majeure or by government order. However, he has
time of making the deposit, but he the duty to deliver to the depositor money or another
subsequently loses his capacity during the thing he receives in place of the thing.
deposit, the thing must be returned to his
legal representative. Liability in case of alienation by the depositary’s
Heir (Art. 1991)
Obligation to return at the Place of return • When alienation is done in good faith:
General Rule: At the place agreed upon by the a) Return the value of the thing deposited;
parties, transportation expenses shall be borne by or
the depositor (Art. 1987) b) Assign the right to collect from the
buyer
Exception: In the absence of stipulation, at the • The heir does not need to pay the
place where the thing deposited might be even if it actual price of the thing deposited.
should not be the same place where the original
deposit was made • When alienation is done in BAD FAITH:
a) Liable for damages; and
Note: Same as the general rule of law regarding the b) Pay the actual price of the thing
place of payment (Art. 1251) deposited

Obligation to return upon the Time of return (Art. Depositary may retain the thing in his
1988) possession until the full payment of what may
General Rule: The thing deposited must be be due him by reason of the deposit (Art. 1994)
returned to the depositor upon demand, even The thing retained serves as security for the
though a specified period of time for such return may payment of what may be due to the depositary by
have been fixed reason of the deposit (see Arts. 1965, 1992 &
1993).
Exceptions:
a) When the thing is judicially attached while
in the depositary’s possession

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Pledges created by operation of law (Art. 2121) Extrajudicial Deposit: Necessary Deposit
1. These are governed by the foregoing articles When deposit is Necessary: (PLCT)
on the possession, care and sale of the 1. It is made in compliance with a Legal
thing as well as on the termination of the obligation
pledge. However, after payment of the debt 2. It takes place on the occasion of any
and expenses, the remainder of the price of Calamity, such as fire, storm, flood, pillage,
the sale shall be delivered to the obligor. shipwreck, or other similar events
(Art. 2121) a. There must be a causal relation
2. These may be sold only after demand of the between the calamity and the
amount for which the thing is retained. The constitution of the deposit.
public auction shall take place within one 3. Made by Passengers with common carriers
month after such demand. If, without just a. As to baggage the passengers or
grounds, the creditor does not cause the their agents carry
public sale to be held within such period, 4. Made by Travelers in hotels or inns (Art.
the debtor may require the return of the 1998)
thing. (Art. 2122) a. Before keepers of hotels or inns
may be held responsible as
Obligations of the Depositor (PLD) depositaries with regard to the
1. Obligation to Pay expenses of preservation (Art. effects of their guests, the
1992) following must concur:
Applies only when the deposit is gratuitous
2. Obligation to pay Losses incurred due to Elements:
character of thing deposited (Art. 1993) a. They have been previously informed about the
effects brought by the guests; and
General Rule: The depositary must be • Is notification required before the common
reimbursed for loss suffered by him because of carrier becomes liable for lost belongings
the character of the thing deposited. that remained in the custody of the
passenger? NO.
Exceptions: Actual delivery of the goods to the
a. Depositor was not aware of the danger. innkeepers or their employees is
b. Depositor was not expected to know the unnecessary before liability could attach to
dangerous character of the thing. the hotelkeepers in the event of loss of
c. Depositor notified the depositary of such personal belongings of their guests
dangerous character. considering that the personal effects were
d. Depositary was aware of the danger inside the hotel or inn because the
without advice from the depositor. hotelkeeper shall remain accountable.
Accordingly, actual notification was not
3. Effect of Death of depositor or depositary(Art. necessary to render the petitioner as the
1995) common carrier liable for the lost personal
a. Deposit gratuitous – death of either of the belongings of Sesante. By allowing him to
depositor or depositary extinguishes the board the vessel with his belongings
deposit (personal in nature). By the word without any protest, the petitioner became
“extinguished,” the law really means that sufficiently notified of such belongings. So
the depositary is not obliged to continue long as the belongings were brought inside
with the contract of deposit. the premises of the vessel, the petitioner
b. Deposit for compensation – not was thereby effectively notified and
extinguished by the death of either party consequently duty-bound to observe the
required diligence in ensuring the safety of
Extinguishment of Deposit the belongings during the voyage. (Sulpicio
1. Upon the loss of the thing deposited; Lines v. Sesante, 2016)
2. Upon the death of the depositary, only in b. The guests have taken the precautions
gratuitous deposits; prescribed regarding their safekeeping.
3. Other provisions in the Civil Code on
extinguishment of obligations (novation, Extent of liability:
merger, etc.) a) Liability in hotel rooms which come
under the term “baggage” or articles
such as clothing as are ordinarily used
by travelers

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b) Include those lost or damages in hotel a) Lodging

annexes such as vehicles in the hotel’s b) Supplies usually furnished to hotel guests
garage.
Note: These rules apply to hand-carried luggage
When the traveler avails of the valet service of of passengers, but not to checked-in luggage for
hotels, the contract of deposit is perfected from the common carriers.
traveler’s delivery of the keys to the vehicle to the
hotel, who has the obligation to safely keep and Reason: It is given to hotel-keepers to compensate
return it to the owner. Loss of the vehicle on the them for the liabilities imposed upon them by law.
hotel’s premises or annexes may give rise to a claim The right of retention recognized in this Article is in
of damages (Durban Apartments v. Pioneer the nature of a pledge created by operation of law.
Insurance, G.R. No. 179419, 2011). • In compliance with a legal obligation (governed
by the law establishing it, and in case of
When hotelkeeper liable: (Arts. 2000 – 2002) deficiency, the rules on voluntary deposit e.g.
Note: In the following cases, the hotelkeeper is Arts. 538, 586 and 2104).
liable regardless of the amount of care exercised: • Made on the occasion of any calamity
a) The loss or injury to personal property is (governed by the rules on voluntary deposit and
caused by his servants or employees as Art. 2168).
well as by strangers (Art. 2000)
b) The loss is caused by the act of a thief or Hotel-keeper’s right to sell
robber done without the use of arms or A thing under a pledge by operation of law may be
irresistible force (Id., Art. 2001) sold only after demand of the amount for which the
thing is retained. The public auction shall take place
Reason: Hotelkeeper is apparently negligent. within one month after such demand. If, without just
grounds, the creditor does not cause the public sale
When hotelkeeper not liable: to be held within such period, the debtor may require
a) The loss or injury is caused by force the return of the thing. (Art. 2122)
majeure, like flood, fire, theft or robbery by
a stranger (not the hotel-keeper’s servant Sequestration or judicial deposit
or employee) with the use of firearms or When judicial deposit takes place: When an
irresistible force attachment or seizure of property in litigation is
a. Exception: Unless the ordered by a court. (Art. 2005)
hotelkeeper is guilty of fault or
negligence in failing to provide Nature: Auxiliary to a case pending in court.
against the loss or injury from his
cause Purpose: To maintain the status quo during the
b) The loss is due to the acts of the guests, his pendency of the litigation or to insure the right of the
family, servants, visitors parties to the property in case of a favorable
c) The loss arises from the character of the judgment
things brought into the hotel
Depositary of sequestered property: person
Exemption or diminution of liability: appointed by the court. (Art. 2007)
The hotelkeeper cannot free himself from Obligations:
responsibility by posting notices to the effect that he 1. To take care of the property with the
is not liable for the articles brought by the guest (Art. diligence of a good father of the family. (Art.
2003) 2008)
2. He may not be relieved of his responsibility
Effect: Any stipulation between the hotelkeeper and until the litigation is ended or the court so
the guest whereby the responsibility of the former orders. (Art. 2007)
(as set forth in Arts. 1998-2001) is suppressed or
diminished shall be void. Applicable law: The law on judicial deposit is
remedial or procedural in nature. Hence, the Rules
Hotelkeeper’s right to retain of Court are applicable. (Art. 2009)
The hotelkeeper has a right to retain the things in
pledge brought into the hotel by the guest, as a
security for credits on account of:

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BASIS JUDICIAL DEPOSIT EXTRA-JUDICIAL DEPOSIT

Cause or origin By will of the courts By will of the parties. Hence, there
is a contract
Purpose Security; Secure the right of a Custody; Safekeeping of the thing
party to recover in case of
favorable judgment.

Subject Matter Either movable or immovable Only movable property

property but generally, immovable
Remuneration Always remunerated (onerous) Generally gratuitous, but may be
compensated
In whose behalf it is held In behalf of the person who, by the In behalf of the depositor or third
judgment, has a right person designated

COMMODATUM MUTUUM DEPOSIT BARTER

Non-consumable
(movable or
immovable) Fungible /
Movable / personal Non-consumable or
Object consumable
property consumable
Except: consumable (e.g., money)
if used for exhibition
purposes only

Temporary use of the

Purpose Consumption Safekeeping Exchange (sale)
thing

Take care of the thing

Take care of the thing
with due diligence
Do not use the thing
Return a thing of the Deliver another thing
Obligation deposited unless
Return the thing upon same kind and quality in exchange
authorized or is
expiration of period or
required for its
purpose
preservation
Passes to the other
Status of Retained by the
Retained by bailor Passes to bailee party (mutual
Ownership depositor
exchange)

Anytime, if no period
or purpose has been
agreed upon or if by Only after the Cannot demand
mere tolerance only expiration of the Anytime return because
(precarium) period Exception: for contract is already
Ability to
Exception: when the compensation extinguished
demand return
If there is an urgent debtor loses every (depositary has right
necessity right to make use of of retention) Rescission only if
the period (Art. 1198) grounds exist
Acts of ingratitude by
the bailee

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C. GUARANTY AND SURETYSHIP Exceptions:

1. With her husband’s consent, binds the
NATURE AND EXTENT OF GUARANTY community or conjugal partnership property
2. Without husband’s consent, in cases provided
Guaranty – By guaranty, a person called the by law, such as when the guaranty has
guarantor, binds himself to the creditor, to fulfill the redounded to the benefit of the family
obligation of the principal debtor in case the latter
should fail to do so. It is a contract between the Guaranty Undertaken Without Knowledge of
guarantor and the creditor. (Art. 2047) Debtor (Art. 2050)
Rights of third persons who pay:
Characteristics of the contract 1. Payment without the knowledge or against
1. Accessory – dependent for its existence upon the the will of the debtor:
principal obligation guaranteed by it hence if a. Guarantor can recover from the debtor only
principal contract is void, then guaranty is also insofar as the payment has been beneficial
void to the debtor (Art. 1236)
2. Subsidiary and Conditional – takes effect only b. Guarantor cannot compel the creditor to
when the principal debtor fails in his obligation subrogate him in his rights (Art. 1237)
subject to limitation 2. Payment with knowledge or consent of the
3. Unilateral – debtor: Subrogated to all the rights which the
a. It gives rise only to a duty on the part of the creditor had against the debtor (Art. 2067)
guarantor in relation to the creditor and not
vice versa Double or Sub-Guaranty (Art. 2051(2))
b. It may be entered into even without the One constituted to guarantee the obligation of a
intervention of the principal debtor. guarantor. It should not be confounded with guaranty
4. Distinct Person – a person cannot be the wherein several guarantors concur.
personal guarantor of himself
Guaranty of Voidable, Unenforceable, And
• The liability of a guarantor is only subsidiary, Natural Obligations (Art. 2052(2))
and all the properties of the principal debtor
A guaranty may secure the performance of:
must first be exhausted before the guarantor
1. Voidable contract – such contract is binding,
may be held answerable for the debt. Thus,
unless it is annulled by a proper court action
the creditor may hold the guarantor liable only
2. Unenforceable contract – because such
after judgment has been obtained against the
contract is not void
principal debtor and the latter is unable to pay.
3. Natural obligation – the creditor may proceed
(Aglibot vs. Santia, G.R. No. 185945, 2012)
against the guarantor although he has no right of
action against the principal debtor for the reason
Cause of Contract of Guaranty
that the latter’s obligation is not civilly
1. Presence of cause which supports principal
enforceable.
obligation: Cause of the contract is the same
• When the debtor himself offers a guaranty
cause which supports the obligation as to the
for his natural obligation, he impliedly
principal debtor. The consideration which supports
recognizes his liability, thereby transforming
the obligation as to the principal debtor is a
the obligation from a natural into a civil one.
sufficient consideration to support the obligation of
a guarantor or surety.
Guaranty of Future Debts (Art. 2053)
2. Absence of direct consideration or benefit to
guarantor: Guaranty or surety agreement is
Continuing Guaranty or Suretyship:
regarded valid despite the absence of any direct
1. Not limited to a single transaction but which
consideration received by the guarantor or surety,
contemplates a future course of dealings,
such consideration need not pass directly to the
covering a series of transactions generally for an
guarantor or surety; a consideration moving to the
indefinite time or until revoked.
principal will suffice.
2. It is prospective in its operation and is generally
intended to provide security with respect to
EFFECTS OF GUARANTY
future transactions.
3. Future debts, even if the amount is not yet
Married woman as Guarantor (Art. 2049)
known, may be guaranteed but there can be no
General rule: Married woman binds only her
claim against the guarantor until the amount of
separate property
the debt is ascertained or fixed and demandable.

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Examples: Principal’s Liability May Exceed Guarantor’s

a. To secure the payment of a loan at maturity – Obligations
guarantee of the punctual payment of a loan at The amount specified in a surety bond as the surety’s
maturity and all other obligations of obligation does not limit the extent of the damages
indebtedness that may be recovered from the principal, the latter’s
b. To secure payment of any debt to be liability being governed by the obligations he
subsequently incurred –construed as assumed under his contract.
continuing when it is evident from the terms that
the object is to give a standing credit to the Guaranty Not Presumed (Art. 2055)
principal debtor to be used from time to time The assumption of guaranty must be expressed. It
either indefinitely or until a certain period, cannot extend to more than what is stipulated therein.
especially if the right to recall the guaranty is
expressly reserved. Guaranty Covered by the Statute of Frauds
• Guaranty must not only be expressed but must
Guaranty of Conditional Obligations so be reduced into writing.
A guaranty may secure all kinds of obligations, be • Hence, it shall be unenforceable by action,
they pure or subject to a suspensive or resolutory unless the same or some note or memorandum
condition. thereof be in writing, and subscribed by the party
1. Principal obligation subject to a suspensive charged, or by his agent; evidence, therefore, of
condition – the guarantor is liable only after the the agreement cannot be received without the
fulfillment of the condition. writing, or secondary evidence of its contents.
2. Principal obligation subject to a resolutory (Macondray & Co., Inc. v. Piñon, G.R. No. L-
condition – the happening of the condition 13817, 1961)
extinguishes both the principal obligation and the • It need not appear in a public document.
guaranty
Guaranty Strictly Construed
Guarantor’s Liability Cannot Exceed Principal Strictly construed against the creditor in favor of the
Obligation (Art. 2054) guarantor and is not to be extended beyond its terms
General Rule: Guaranty is a subsidiary and or specified limits. Doubt in the terms and conditions
accessory contract – guarantor cannot bind himself of the guaranty or suretyship agreement should be
for more than the principal debtor, both as regards resolved in favor of the guarantor or surety.
the amount and the onerous nature of contract 1. Liability for obligation stipulated – guarantor
• If he does, his liability shall be reduced to the is not liable for obligations assumed previous
limits of that of the debtor. to the execution of the guaranty unless an intent
• But the guarantor may bind himself for less to be so liable is clearly indicated.
than that of the principal. 2. Liability of surety limited to a fixed period –
the surety must only be bound in the manner and
Exceptions: to the extent, and under the circumstances which
1. Interest, judicial costs, and attorney’s fees as are set forth or which may be inferred from the
part of damages may be recovered – creditors contract of guaranty or suretyship, and no
may recover from the surety as part of their further.
damages the abovementioned fees even without 3. Liability of surety to expire on maturity of
stipulation and even if the surety would thereby principal obligation – such stipulation is unfair
become liable to pay more than the total amount and unreasonable for it practically nullifies the
stipulated in the bond. nature of the undertaking it had assumed.
Reason: Surety is made to pay, not by reason
of the contract, but by reason of his failure to Remedy of surety: Foreclose the counter-bond put
pay when demanded and for having up by the principal debtor (if there is any)
compelled the creditor to resort to the courts
to obtain payment.
Interest runs from (demand):
a. Filing of the complaint (upon judicial
demand); or
b. The time demand was made upon the
surety until the principal obligation is fully
paid (upon extra-judicial demand)
2. Penalty may be provided – surety may be held
liable for the penalty provided for in a bond for
violation of the condition therein.

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Guaranty Distinguished from Suretyship claim. This prompted Corp C to file a complaint
GUARANTY SURETYSHIP with the CIAC to collect a sum of money against
Liability depends upon Assumes liability as a Corp A and Corp B. The CIAC dismissed the
an independent regular party to the Complaint because it was not within a reasonable
agreement to pay the undertaking period and such delay had released Corp B from
obligation if the its liability as per Article 2080 of the Civil Code.
principal debtor fails This was reversed by the CA on the ground that
to do so Corp A had long been in default of its obligations
Engagement is a Charged as an original even before the first demand of Corp C, which
collateral undertaking promisor meant that the liability of Corp B as surety had
Secondarily liable – Primarily liable – already arisen. Was the CA correct in saying that
he contracts to pay if, undertakes directly for Corp B was liable?
by the use of due the payment without
diligence, the debt reference to the A: Yes. A contract stands as the law between the
cannot be paid solvency of the parties for as long as it is not contrary to law, morals,
principal, and is so good customs, public order, or public policy. The
responsible at once the Performance Bond provides that upon Corp C’s first
latter makes default, demand, Corp B as surety shall indemnify the former
without any demand by notwithstanding any dispute with regard to whether
the creditor upon the the principal has complied with his obligation. The
principal whatsoever or Performance Bond thus stands as a contract of
any notice of default surety contemplated under Article 2047 of the Civil
Only binds himself to Undertakes to pay if the Code which defines a surety wherein a person binds
pay if the principal principal does not pay, himself solidarily with the principal debtor. As a result,
cannot or is unable to without regard to his the surety is considered in law as being the same
pay ability to do so party as the debtor in relation to whatever is adjudged
Insurer of the solvency Insurer of the debt touching upon the obligation of the latter, and their
of the debtor liabilities are interwoven as to be inseparable. While
Does not contract that Pay the creditor the contract of surety stands secondary to the
the principal will pay, without qualification if principal obligation, the surety's liability is direct,
but simply that he is the principal debtor primary and absolute, albeit limited to the amount for
able to do so does not pay. Hence, which the contract of surety is issued. The surety's
the responsibility or liability attaches the moment a demand for payment
obligation assumed by is made by the creditor. Furthermore, Article 2080
the surety is greater or does not apply in this case because it is only
more onerous than that applicable to the liability of a guarantor. (The
of a guarantor Mercantile Insurance Co., Inc., v. DMCI-Laing
Guarantor can avail of Surety cannot avail the Construction, Inc., G.R. No. 205007, September 16,
the benefit of excussion benefit of excussion 2019.)
and division in case the and division.
creditor proceeds Qualifications of an Individual Guarantor
against him. (Arts.2056-2057) (CSI)
Not bound to take Held to know every 1. He possesses Integrity
notice of the non- default of the principal. 2. He has the Capacity to bind himself
performance of the 3. He has Sufficient property to answer for the
principle obligation which he guarantees

Q: Corp A secured a Performance Bond from Exception: When the creditor waives the
Corp B wherein the latter would become the requirements.
surety of the former, guaranteeing the
performance of Corp A’s obligations in favor of a Effect of Subsequent Loss of Required
contract with Corp C. However, Corp A showed Qualifications
poor progress, which led to Corp C demanding The qualifications need only be present at the time
Corp B to liquidate the Performance Bond, of the perfection of the contract. The subsequent
without specifying the exact amount claimed. loss of the qualifications would not extinguish the
Subsequently, Corp C terminated the contract liability of the guarantor, nor will it extinguish the
with Corp A. When negotiations for amicable contract of guaranty.
settlement fell through, Corp B denied Corp C’s

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Remedy of creditor: Demand another guarantor deferment of the execution of said judgment against
with the proper qualifications. him, until after the properties of the principal debtor
shall have been exhausted, to satisfy the latter’s
Exception: Creditor may waive it if he chooses and obligation.
hold the guarantor to his bargain.
Exceptions to the Benefit of Excussion (Art. 2059)
Guarantor Convicted of a Crime Involving (JAWS-IS-FUN)
Dishonesty or Became Insolvent (Art. 2057): 1. If the guarantor has expressly Waived it.
1. Requires conviction in the first instance of a a. Waiver is valid but it must be made in
crime involving dishonesty to have the right to express terms.
demand another. 2. If he has bound himself Solidarily with the debtor
2. Judicial declaration of insolvency is not – liability assumed that of a surety
necessary in order for the creditor to have a right Guarantor becomes primarily liable as a
to demand another guarantor. solidary co-debtor. In effect, he renounces in
the contract itself the benefit of exhaustion.
The supervening incapacity of a guarantor does not 3. In case of Insolvency of the debtor – guarantor
terminate the guaranty for it merely gives the creditor guarantees the solvency of the debtor
the option to demand another guarantor. He is not If the debtor becomes insolvent, the liability
bound to substitute the guarantor. (Estate of Hemady of the guarantor arises as the debtor cannot
v. Luzon Surety, G.R. No. L-8437, 1956) fulfill his obligation. Insolvency (when the
assets of the person are insufficient to meet
Selection of Guarantor the liability) or inability to pay must be actual
1. Specified person stipulated as guarantor: and may be proven by the return of a writ of
Substitution of guarantor may not be demanded execution unsatisfied by other means.
2. Guarantor selected by the principal debtor: 4. When he (debtor) has Absconded, or cannot be
Debtor answers for the integrity, capacity, and sued within the Philippines – the creditor is not
solvency of the guarantor. required to go after a debtor who is hiding or
3. Guarantor personally designated by the cannot be sued in our courts
creditor: Responsibility for the selection should a. Exception: Debtor has left a manager
fall upon the creditor because he considered the or representative
guarantor to have the qualifications for the 5. If it may be presumed that a judicial action
purpose. including execution on the property of the
principal debtor would not result in the
Right of Guarantor to Benefit of Excussion or satisfaction of the obligation – if such is the case,
Exhaustion (Art. 2058) the guarantor can no longer require the creditor
1. Guarantor only secondarily liable – guarantor to resort to all such remedies against the debtor
binds himself to pay only in case the principal as the same would be but a Useless formality. It
debtor should fail to do so. If the principal debtor is not necessary that the debtor be judicially
fulfills the obligation guaranteed, the guarantor is declared insolvent.
discharged from any responsibility. 6. If he does Not comply with Art. 2060: In order
2. All legal remedies against the debtor to be that the guarantor may make use of the benefit
first exhausted – to warrant recourse against of excussion, he must:
the guarantor for payment, it may not be a. Set it up against the creditor upon the latter’s
sufficient that the debtor appears insolvent. Such demand for payment from him;
insolvency may be simulated. b. Point out to the creditor:
i. Available property of the debtor– the
Note: Art. 2058 is not applicable to a contract of guarantor should facilitate the
suretyship. realization of the excussion since he is
the most interested in its benefit.
Right of Creditor to secure Judgment against ii. Within the Philippine territory –
Guarantor prior to exhaustion excussion of property located abroad
General Rule: An ordinary personal guarantor (NOT would be a lengthy and extremely
a pledgor, security grantor or mortgagor who is at the difficult proceeding and would not
same time a guarantor), may demand exhaustion of conform with the purpose of the
all the property of the debtor before he can be guaranty to provide the creditor with the
compelled to pay. means of obtaining the fulfillment of the
obligation.
Exception: The creditor may secure a judgment Sufficient to cover the amount of the
against the guarantor, who shall be entitled to a debt.

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7. If he is a Judicial bondsman and sub-surety (Art. If a party in a contract waives his right to excussion,
2084) – because he is solidarily liable. the contract ceases to be a guaranty and is now a
8. Where he has given a pledge, security interest or suretyship under Article 2047 of the Civil Code.
mortgage as a Special security. If the guarantor (Trade and Investment Development Corporation of
is at the same time a mortgagor, grantor of a the Philippines v. Philippine Veterans Bank, G.R. No.
security interest, etc., the creditor may enforce 233850, 2019)
on the security, and the guarantor may not ask
for excussion insofar as the security is Duty of The Creditor To Resort To All Legal
concerned. This is governed by title XVII of the Remedies (Art. 2061)
civil code, and not title XV. • After the guarantor has fulfilled the conditions
required for making use of the benefit of
Note: Article 2062 of the Civil Code provides that exhaustion, it becomes the duty of the creditor to
in every action by the creditor, which must be exhaust all the property of the debtor pointed out
against the principal debtor alone, except in the by the guarantor
cases mentioned in Article 2059, the former shall • If he fails to do so, he shall suffer the loss but
ask the court to notify the guarantor of the action. only to the extent of the value of the said
The guarantor may appear so that he may, if he property, for the insolvency of the debtor.
so desire, set up such defenses as have granted • Resort to all legal remedies includes accion
him by law. The benefit of excussion mentioned in pauliana and accion subrogatoria, among
others.
article 2058 shall always be unimpaired, even if
judgment should be rendered against the principal
Procedure When Creditor Sues (Art. 2062)
debtor and the guarantor in case of appearance by
1. Sent against the principal – The guarantor
the latter. cannot be sued with his principal, much less
alone, except in the cases mentioned in Art.
Joinder of Guarantor and Principal As Parties 2059 where the guarantor is not entitled to the
Defendant benefit of excussion.
General Rule: The guarantor, not being a joint 2. Notice to guarantor of the action – guarantor
contractor with his principal, cannot be sued with must be notified so that he may appear, if he so
his principal. desires, and set up defenses he may want to
offer
Exception: Where it would serve merely to delay a. Guarantor appears – voluntary appearance
the ultimate accounting of the guarantor or if no does not constitute a renunciation of his right
different result would be attained if the plaintiff were to excussion.
forced to institute separate actions against the b. Guarantor does not appear –
principal and the guarantors. i. He cannot set up the defenses which, by
appearing are allowed to him by law;
Duty of Creditor to Make Prior Demand for and
Payment From Guarantor (Art. 2060) ii. It may no longer be possible for him to
1. When demand to be made – only after question the validity of the judgment
judgment on the debt for obviously the rendered against the debtor
exhaustion of the principal’s property cannot iii. But he may still invoke the benefit of
even begin to take place before judgment has excussion
been obtained. 3. Hearing before execution can be issued
against the guarantor – a guarantor is entitled
2. Actual demand to be made – joining the to be heard before an execution can be issued
guarantor in the suit against the principal debtor against him where he is not a party in the case
is not the demand intended by law. There must involving his principal.
be an actual demand and not judicial demand.
(Vda. De Syquia v. Jacinto, G.R. No. 41320 Effects of Compromise (Art. 2063)
(1934). Compromise – a contract whereby the parties, by
making reciprocal concessions, avoid a litigation or
Duty of The Guarantor To Set Up Benefit Of put an end to one already commenced.
Excussion (Art. 2060) 1. Compromise between creditor and principal
As soon as he is required to pay, guarantor must also debtor benefits the guarantor but does not
point out to the creditor available property (not in prejudice him.
litigation or encumbered) of the debtor within the 2. Compromise between guarantor and the creditor
Philippines. benefits but does not prejudice the principal
debtor.

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Reason: A compromise binds only the parties Right to Reimbursement: The guarantor who pays
thereto and not third persons. Thus, it cannot for a debtor must be indemnified by the latter.
prejudice the guarantor or debtor who was not party
to the compromise. But if it benefits a third person, What Comprises the Right of the Guarantor to
then the compromise may bind that third person. Demand Indemnity or Reimbursement from the
Principal Debtor (Art. 2066) (DELT)
Sub-Guarantor’s Right To Excussion (Art. 2064) 1. Total amount of the debt - The guarantor has
Sub-guarantor enjoys the benefit of excussion with no right to demand reimbursement until he
respect to:
has actually paid the debt, unless by the
1. Principal debtor; and
terms of the contract, he is given the right
2. Guarantor
before making payment.
2. Legal interest - It is immaterial that the debt
Reason: He stands with respect to the guarantor on
did not earn interest for the creditor, because
the same footing as the latter does with respect to the
the guarantor’s right to legal interest is
principal debtor.
granted by law by virtue of the payment he
has made, and is independent of the
Benefit of Division Among Several Guarantors
creditor’s right to claim interest which was
(Art. 2065)
necessarily regulated by the stipulations
1. In whose favor applicable - should there
between him and the debtor.
be several guarantors of only one debtor and
3. Expenses incurred by the guarantor - The
for the same debt, the obligation to answer
expenses referred to are only those that the
for the same is divided among all.
guarantor has to satisfy in accordance with
2. Cannot be availed of if there are:
law as a consequence of the guaranty.
a. Two or more debtors of one debt,
These expenses are limited to those
even if they be bound solidarily,
incurred by the guarantor after having
each with different guarantors; or
notified the debtor that payment has been
b. Two or more guarantors of the
demanded of him by the creditor.
same debtor but for different debts
a. Exception: The guarantor cannot
c. If any of the circumstances
demand for reimbursement for
enumerated in Art. 2059 should
litigation expenses, when such
take place, as would the benefit
expenses are due to its failure to
of exhaustion of the debtor’s
fulfill its obligation to pay upon
property.
demand. (Tuason v. Machuca, G.R.
3. Extent of liability of several guarantors –
No. L-22177, 1924)
joint obligation
a. General rule: The obligation to 4. Damages, if they are due.
answer for the debt is divided
among all of them. The guarantors Exceptions to Right to Indemnity or
are not liable to the creditor beyond Reimbursement
the shares which they are 1. Where the guaranty is constituted without
respectively bound to pay. the knowledge or against the will of the
principal debtor, the guarantor can recover
b. Exception: Solidarity has been
only insofar as the payment had been
expressly stipulated.
beneficial to the debtor
2. Payment by a third person who does not
Benefit of Division among Several Guarantors:
intend to be reimbursed by the debtor is
In order that the guarantor may be entitled to the
deemed to be a donation, which, however,
benefit of division, it is not required that he point out
requires the debtor’s consent. But the
the property of his co-guarantors.
payment is in any case valid as to the
creditor who has accepted it (Art. 1238)
Reason: Obligation of the guarantor with respect to
3. Waiver
his co-guarantors is not subsidiary but direct and
does not depend as to its origin on the solvency or
Guarantor’s Right to Subrogation (Art. 2067)
insolvency of the latter.
Subrogation transfers to the person subrogated, the
credit with all the rights thereto appertaining either
No benefit of division when payment is made: (Art.
against the debtor or against third persons, be they
2073)
guarantors or possessors of mortgages, subject to
1. In virtue of a judicial demand by the creditor
stipulation in conventional subrogation.
2. Principal debtor is insolvent

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1. Accrual, basis, and nature of right – right of guarantor’s remedy is to collect

subrogation is necessary to enable the guarantor from the creditor
to enforce the indemnity given in Art. 2066 b. No cause of action against the
a. Arises by operation of law upon payment by debtor for the return of the amount
the guarantor paid by him.
b. It is not a contractual right b) Exception: The guarantor may still claim
c. The guarantor is subrogated, by virtue of the reimbursement from the debtor in spite of
payment, to the right of the creditor, not lack of notice if the following conditions are
those of the debtor. present:
2. When right not available – since subrogation is a. The creditor becomes insolvent
the means of effectuating the right of the b. That guarantor was prevented by a
guarantor to be reimbursed, it cannot therefore fortuitous event to advise the
be invoked in those cases where the guarantor debtor of the payment
has no right to be reimbursed. c. The guaranty is gratuitous

Effect of Payment by Guarantor Without Notice to Right of Guarantor to Proceed Against Debtor
Debtor (Art. 2068) Before Payment (Art. 2071)
• When the guarantor pays the creditor, but the General Rule: Guarantor has no cause of action
debtor has already paid the latter, then the against the debtor until after the former has paid the
debtor can set up against the guarantor the obligation.
defense of previous extinguishments of the
obligation by payment. Exceptions: Art. 2071 enumerates instances when
• Hence, guarantor must notify the debtor before the guarantor may proceed against the debtor even
making payment. before the payment (ITS-PAID):
1. When he is Sued for the payment;
Reason: The guarantor cannot be allowed, through 2. In case of Insolvency of the principal debtor;
his own fault or negligence to prejudice or impair the 3. When the debtor has bound himself to
rights or interests of the debtor. relieve him from the guaranty within a
specified period, and this Period has
Note: In case of an unenforceable contract, if the expired;
debtor consents to the guarantor paying, the 4. When the debt has become Demandable, by
guarantor can seek reimbursement from the debtor. reason of the expiration of the period for
If the debtor did not consent to the guarantor paying, payment;
the guarantor cannot seek reimbursement from the 5. After the lapse of Ten (10) years, when the
guarantor. principal obligation has no fixed period for its
maturity, unless it be of such nature that it
Effect of Payment by Guarantor before maturity cannot be extinguished except within a
(Art. 2069) period longer than ten years;
Debtor’s obligation with a period – demandable 6. If there are reasonable grounds to fear that
only when the day fixed comes. the principal debtor intends to Abscond;
1. The guarantor who pays before maturity is not 7. If the principal debtor is in imminent danger
entitled to reimbursement since there is no of becoming Insolvent.
necessity for accelerating payment.
2. A contract of guaranty being subsidiary in Purpose: To enable the guarantor to take measures
character, the guarantor is not liable for the debt for the protection of his interest in view of the
before it becomes due. probability that he would be called upon to pay the
Exception: The debtor will be liable if the debt.
payment was made:
a. With his consent; or Remedy to which the Guarantor is Entitled
b. Subsequently ratified (express or implied) The guarantor cannot demand reimbursement for
by him indemnity when he has not paid the obligation.

Effect of Repeat Payment by the Debtor (Art. Remedies Available:

2070) 1. To obtain release from the guaranty; or
a) General Rule: Before the guarantor pays 2. To demand security that shall protect him from:
the creditor, he must first notify the debtor. a. Any proceedings by the creditor; and
a. If he fails to give notice and the b. Against the insolvency of the debtor.
debtor repeats payment, the

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Note: Guarantor’s remedies are alternative. He has Guarantor of a Third Person at Request of
the right to choose the action to bring. Another (Art. 2072)
The guarantor who guarantees the debt of an
Suit by Guarantor against Creditor Before absentee at the request of another has a right to
Payment claim reimbursement, after satisfying the debt from:
The guarantor’s or surety’s action for release can 1. The person who requested him to be a
only be exercised against the principal debtor and not guarantor;
against the creditor. 2. The debtor

Reason: The creditor cannot be compelled to Rights of the Guarantor against The Debtor
release the guarantor before payment of his credit. (SICS)
Release of the guarantor imports an extinction of his 1. Indemnification
obligation to the creditor, connoting remission or a 2. Benefit of Subrogation
novation by subrogation which requires the creditor’s 3. Benefit of Compromise
assent. 4. Right to obtain or demand a Security under
(Art. 2071)
Recovery of Surety against Indemnitor (i.e.,
principal debtor) Even Before Payment by the Between Co-Guarantors, Right to Contribution of
Surety Guarantor Who Pays (Art. 2073)
1. Indemnity agreement is for the benefit of Presumption of joint liability of several
surety – not for the benefit of the creditor guarantors when there are:
2. Indemnity agreement may be against actual 1. Two or more guarantors
loss as well as potential liability – such 2. Same debtor
agreement is enforceable and not violative of any 3. Same debt
public policy
a. Indemnity against loss – indemnitor will Effect: Each is bound to pay only his proportionate
not be liable until the person to be share.
indemnified makes payment or sustains loss
b. Indemnity against liability – indemnitor’s Co-Guarantor has Right to Contribution When:
liability arises as soon as the liability of the 1. One guarantor has paid the debt to the
person to be indemnified has arisen without creditor
regard to whether or not he has suffered 2. Payment was made
actual loss a. In virtue of judicial demand (benefit
c. Such agreement valid - A stipulation in an of division has ceased as provided
indemnity agreement providing that the under Art. 2073 par. 3); or
indemnitor shall pay the surety as soon as b. Because principal debtor is
the latter becomes liable to make payment insolvent
to the creditor under the terms of the bond, 3. Guarantor who paid is seeking
regardless of whether the surety has made reimbursement from each of his co-
payment actually or not, is valid and guarantors the share which is
enforceable, and in accordance therewith, proportionately owing him.
the surety may demand from the indemnitor
even before the creditor has paid. Effect: The co-guarantor who has paid may demand
of each of the others the share which is proportionally
Where the principal debtors are owing from him.
simultaneously the same persons who
executed the indemnity agreement, the Effect of Insolvency of any Guarantor
position occupied by them is that of a Follow the rule on solidary obligations: The share
principal debtor and indemnitor at the same, of the insolvent guarantor shall be borne by the
and their liability being joint and several. others including the paying guarantor in the same
The liabilities of an insurer under the surety bond are joint proportion.
not extinguished when the modifications in the
principal contract do not substantially or materially Accrual and Basis of Right:
alter the principal's obligations. The surety is jointly The right of reimbursement is acquired ipso jure
and severally liable with its principal when the latter without need of any prior cession from the creditor by
defaults from its obligations under the principal the guarantor.
contract. (People's Trans-East Asia Insurance
Corporation v. Doctors of New Millennium Holdings,
Inc., G.R. No. 172404, 2014)

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Defenses Available to Co-Guarantors (Art. 2074) 1. Imposes a new obligation or added burden
a) General Rule: All defenses which the on the party promising; or
debtor would have interposed against the 2. Takes away some obligation already
creditor (i.e. fraud, prescription, remission, imposed, changing the legal effect of the
illegality, etc.). original contract and not merely the form
b) Exception: Those which cannot be thereof.
transmitted for being purely personal to the
debtor. Release by Conveyance of Property (Art. 2077)
General rule: Payment is made in money.
Liability of Sub-Guarantor in case of Insolvency Exception: Any substitute paid in lieu of money
of Guarantor (Art. 2075) which is accepted by the creditor extinguishes the
Sub-guarantor is liable to the co-guarantors in the obligation and in consequence, the guaranty.
same manner as the guarantor whom he guaranteed • If the creditor accepts property in payment of a
in case of the insolvency of the guarantor for whom debt from the debtor, the guarantor is relieved
he bound himself as sub-guarantor. from responsibility. This is also true even in
case the creditor is subsequently evicted from
EXTINGUISHMENT OF GUARANTY the property.

Causes of Extinguishment of Guaranty (PaNo- In case of eviction: Eviction revives the principal
CoCo-LoCo-FRAP) (Art. 2076) obligation but not the guaranty.
General rule: Guaranty being accessory, it is
extinguished when principal obligation is Reason: The creditor’s action against the debtor is
extinguished, the causes of which are: for eviction and this is different from what the
1. Payment or performance; guarantor guaranteed.
2. Loss of the thing due;
3. Condonation or remission of the debt; Release of Guarantor without Consent of Others
4. Confusion or merger of the rights of the (Art. 2078)
creditor and debtor; Effect: The release benefits all to the extent of the
5. Compensation; and share of the guarantor released.
6. Novation Reason: A release made by the creditor in favor of
7. Other causes: one of the guarantors without the consent of the
a. Annulment; others may prejudice the others should a guarantor
b. Rescission; become insolvent.
c. Fulfillment of a resolutory condition;
Release by Extension of Term Granted by
d. Prescription
Creditor to Debtor (Art. 2079)
Release Without Consent of Guarantor: Creditor
Exception: The guaranty itself may be directly
grants an extension of time to the debtor without the
extinguished although the principal obligation still
consent of the guarantor.
remains such as in the case of the release of the
guarantor made by the creditor.
Effect: Guarantor is discharged from his
undertaking.
Material Alteration of Principal Contract
Any agreement between the creditor and the Reason: To avoid prejudice to the guarantor. The
principal debtor which essentially varies the terms of debtor may become insolvent during the extension,
the principal contract without the consent of the thus depriving the guarantor of his right to
surety, will release the surety from liability.
reimbursement.
It doesn’t matter if the extension is:
Such material alteration would constitute a novation a) Prejudicial or not; or
or change of the principal contract, which is b) For a long or short period of time.
consequently extinguished. Upon such
extinguishments, the accessory contract to guaranty Note: Consent of the Guarantor is a must.
is also terminated and the guarantor cannot be held
liable on the new contract to which he has not given Extension must be based on some new agreement
his consent. between the creditor and the principal debtor by
virtue of which the creditor deprives him of his claim.
When Alteration Material
1. Where obligation payable in
Where such change will have the effect of making the
installments: Where a guarantor is liable
obligation more onerous.
for different payments.

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a. General rule: An extension of time Release when Guarantor cannot be Subrogated

to one or more will not affect the (Art. 2080)
liability of the surety for the others. • If there can be no subrogation because of the
b. Exception: When the unpaid fault of the creditor, the guarantors are thereby
balance has become automatically released, even if the guarantors are solidary.
due by virtue of an acceleration • If the creditor has acquired a lien upon the
clause for failure to pay an property of a principal debtor, the creditor at
installment. once becomes charged with the duty of retaining
i. Effect of exception: The act such security, or maintaining such lien in the
of the creditor extending the interest of the surety, and any release or
payment of said installment, impairment of this security as a primary resource
without the guarantor’s of payment of a debt, will discharge the surety to
consent, discharges the the extent of the value of the property or lien
guarantor. released for there immediately arises a trust
c. Reason: The extension constitutes relation between the parties, and the creditor as
an extension of the payment of the trustee is bound to account to the surety for the
whole amount of the indebtedness value of the security in his hands.
2. Where consent to an extension is waived
in advance by the guarantor or surety: Reason: The act of one cannot prejudice another. It
Such waiver is not contrary to law, nor to also avoids collusion between the creditor and the
public policy debtor or a third person.
a. Effect: Amounts to the guarantor’s
or surety’s consent to all the Defenses Available to Guarantor against Creditor
extensions granted. (Art. 2081)
General rule: All defenses, which pertain to the
Note: The mere failure or neglect on the part of the principal debtor and are inherent in the debt.
creditor to enforce payment or to bring an action upon
a credit, as soon as the same or any part of it Exception: Those which are purely personal to the
matures, does not constitute an extension of the term debtor.
of the obligation, and therefore, the liability of the
guarantor is not extinguished
In order to constitute an extension discharging a D. REAL ESTATE MORTGAGE
surety, it should appear that the extension was:
(DEW) What is a Real Estate Mortgage?
1. For a Definite period Real [Estate] Mortgage is a contract whereby the
2. Pursuant to an Enforceable agreement debtor secures to the creditor the fulfillment of a
between the principal and the creditor principal obligation, specially subjecting to such
3. Made Without the consent of the surety or security immovable property or real rights over
with a reservation of rights with respect to immovable property in case the principal obligation is
him. not complied with at the time stipulated. (Arts. 2124-
2131)
That an extension granted to the debtor by the
creditor without the consent of the guarantor Elements of a Valid Mortgage (FAVFAR)
extinguishes the guaranty, also applies to suretyship. 1. Valid obligation exists;
The theory behind Art. 2079 is that an extension of 2. Constituted to secure the Fulfillment of a
time given to the debtor by the creditor without the principal obligation;
surety’s consent would deprive the surety of his right 3. Mortgagor be the Absolute owner of the
to pay the creditor and to be immediately subrogated thing mortgaged;
to the creditor’s remedies against the debtor upon the 4. Mortgagor has Free disposal of the property,
maturity date. The surety is entitled to protect himself and in the absence thereof, that he be legally
against the debtor’s insolvency during the extension. authorized for the purpose;
However, it must be stressed that Art. 2079 will apply 5. Debtor Retains the ownership of the thing
only if the extension is granted by the creditor in favor given as a security; and
of the debtor without the guarantor’s/surety’s 6. When the principal obligation becomes due,
consent. (TIDC v. APC, 2014) the thing in which the mortgage consists
may be Alienated for the payment to the
creditor; and

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Note: Appears in a Public document duly Can a mortgage be constituted without any prior
recorded in the Registry of Property in order to principal obligation?
bind third parties. No. A contract of mortgage, being a purely
accessory contract, cannot exist without a valid
If the instrument is not recorded, the mortgage is obligation. (Art. 2052 & 2086; Manila Surety & Fidelity
nevertheless binding between the parties. Co. v. Velayo, G.R. No. L-21069)

Note: Third persons who are not parties to the What kinds of obligations do mortgages secure?
principal obligation may secure the latter by A contract of mortgage may secure all kinds of
mortgaging their own property (Art. 2085; Chinabank obligation, be they pure or subject to a suspensive or
vs. QBRO Fishing Enterprises, G.R. No. 184556, resolutory condition.
2012)
What is the effect of a promise to constitute a
Can a trustee mortgage property held in trust? mortgage?
A trustee under a trust receipt does not have a right A promise to constitute a mortgage gives rise only to
to mortgage the property held in trust. This is a personal right binding upon the parties and
because the trustor, not the trustee, is the owner of creates no real right in the property. What exists is
the property in trust. A mortgage must be executed only a right of action to compel the fulfillment of the
by the absolute owner of the chattels to be valid (DBP promise, but there is no mortgage yet.
vs. Prudential Bank, 2005; Art. 2085 (2)).
Q: Can X, as a co-owner, mortgage such real
Can a person mortgage conjugal property property?
without the consent of his or her spouse? A: X as a co-owner of the mortgaged property could
Real estate mortgage over a conjugal property is void validly convey through sale or mortgage the portion
if the non-contracting spouse did not give consent. belonging to him/her. Under Art. 493 of the Civil
(PNB v. Venancio Reyes, Jr., G.R. No. 212483, Code, the effect of the alienation or mortgage, with
2016) respect to the co-owners, shall be limited to the
portion which may be allotted to him in the division
Generally, mortgage of a conjugal property by one of upon the termination of the co-ownership. (Bulatao v.
the spouses without the consent of the other spouse Estonactoc, G.R. No. 235020, 2019)
is valid only as to ½ of the entire property.
What is the effect of the invalidity of the mortgage
What are the incidents of Registration of on the principal obligation?
Mortgage? The principal obligation remains valid and the deed
1. Mortgagee entitled to registration of of mortgage remains as the evidence of the personal
mortgage as a matter of right. obligation. (Rural Bank of Cabadbaran, Inc. v.
2. Proceedings for registration do not Melecio-Yap, G.R. No. 178451, 2014)
determine validity of mortgage or its effect.
3. Registration is without prejudice to better Q: Petitioners X and Y owned a parcel of land. In
right of third parties. 1987, they each obtained a loan from
4. Mortgage deed once duly registered forms respondents Z and used their land as collateral
part of the records for the registration of the for the loan obligation. Z immediately began
property mortgaged. occupying the land. In 2003, X obtained an
5. Mortgage by surviving spouse of his/her additional loan and in 2004, Y did the same. Later
undivided share of conjugal property can be in 2004, X and Y informed Z of their intent to
registered. redeem their property. Z, however, refused,
forcing X and Y to file a Complaint for redemption
What are the rights of the Creditor where the of mortgaged properties in 2005. Z claims that X
Debtor fails to comply with his obligation? and Y sold the property to them under a
1. Creditor is merely entitled to move for the Memorandum of Deed of Sale with Right of
sale of the thing mortgaged with the Repurchase. Both the RTC and CA found that the
formalities required by law in order to collect. transaction was an equitable mortgage but that
2. Creditor cannot appropriate to himself the the period for redemption had lapsed. Was the
thing, nor can he dispose of the same as contract an equitable mortgage? Can X and Y still
owner. redeem the property?

A: The contract was an equitable mortgage. There is

no conclusive test to determine whether a deed
absolute on its face is really a simple loan

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accommodation secured by a mortgage. The execute a mortgage supplement

decisive factor in evaluating such deed is the after the mortgagor acquires
intention of the parties as shown by all the ownership of the properties or after
surrounding circumstances. When in doubt, courts those properties come into
are generally inclined to construe a transaction existence. They must be registered
purporting to be a sale as an equitable mortgage, with the relevant Register of Deeds.
which involves a lesser transmission of rights and b) However, a stipulation subjecting to the
interests over the property in controversy. The mortgage lien, improvements which the
nomenclature given by the parties to the contract is mortgagor may subsequently acquire,
not conclusive of its nature. In this case, the factual install, or use in connection with the real
findings of the RTC and CA regarding the equitable property already mortgaged belonging to the
mortgage attained finality as Z never challenged the mortgagor is valid. (People’s Bank and Trust
same. Co. v. Dahican Lumber Co., G.R. No. L-
17500, 1967)
Yes. An equitable mortgage was a mere accessory
contract to secure the fulfilment of the payment of the What is the extent of a mortgage over an
loan. Because the transaction was not a sale with immovable property?
right of repurchase, there is no redemption period to A real estate mortgage constituted on immovable
speak of, merely the prescriptive period under Article property is not limited to the property itself but also
1144 of the Civil Code. Parties would have 10 years extends to its:
from the time the cause of action accrued to file the 1. Accessions
appropriate action. X and Y’s cause of action to 2. Improvements
recover the subject property can only have accrued 3. Growing fruits
in 2004, when Z rejected X and Y’s attempt to recover 4. Rents or income not yet received
the mortgaged property, and not in 1987, when the 5. Proceeds of insurance should the property
contract was executed. Therefore, the filing of the be destroyed.
complaint in 2005 was made well within the 10-year 6. Expropriation value of the property should it
prescriptive period. (Saclolo v. Marquito, G.R. No. be expropriated. (Art. 2127)
229243, June 26. 2019)
To exclude them, it is necessary that there be an
What are the requisites of Pactum express stipulation. But if the mortgaged estate
Commissorium? passes into the hands of a third person, the mortgage
1. There should be a mortgage; and does not extend to any machinery, object, chattel or
2. There should be a stipulation for an construction which he may have brought or placed
automatic appropriation by the creditor of there and which such third person may remove
the property in the event of whenever it is convenient for him to do so.
nonpayment.(Pen v. Julian, G.R. No.
160208, January 11, 2016) Mortgage Liability
• General Rule: a mortgage liability is
What is the effect of Pactum Commissorium? usually limited to the amount mentioned in
Stipulation is null and void - stipulation where thing the contract
mortgaged shall automatically become the property • However, the amounts named as
of the creditor in the event of nonpayment of the debt consideration in a contract of mortgage do
within the term fixed. not limit the amount for which the mortgage
may stand as security if from the four
The essence of pactum commissorium is that corners of the instrument the intent to secure
ownership of the security will pass to the creditor by future and other indebtedness can be
the mere default of the debtor. (Spouses Solitarios v. gathered. (Ramos vs. PNB, G.R. No.
Spouses Jaque, G.R. No. 199852, 2014) 178218, 2011)

Nullity of the stipulation does not affect validity and What is a dragnet clause (blanket mortgage
efficacy of the principal contract. clause)?
It is one which is specifically phrased to subsume all
Can future property be the object of a mortgage? debts of past or future origins. A mortgage which
a) As a general rule, it cannot. (Dilag v. Heirs provides a dragnet clause is in the nature of a
of Resurreccion, G.R. No. 48941) continuing guaranty and constitutes an exception
i. In order to bring future property to the rule that an action to foreclose a mortgage
within the coverage of the must be limited to the amount mentioned in the
mortgage, the mortgagor must mortgage contract. (PCSO vs. New Dagupan Metro

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Gas Corp., G.R. No. 173171, 2012). In the absence Registration is necessary only to affect third persons.
of clear and supportive evidence of a contrary (Art. 2128)
intention, a mortgage containing a dragnet clause will
not be extended to cover past advances, unless the Note that the sale or transfer of the mortgaged
document evidencing the subsequent advance refers property cannot affect or release the mortgage; thus,
to the mortgage as providing security therefor. the purchaser or transferee is necessarily bound to
acknowledge and respect the encumbrance. (Garcia
Distinguish a dragnet clause from an vs. Villar, G.R. No. 158891, 2012)
acceleration clause.
ACCELERATION Can the collateral be alienated during the
DRAGNET CLAUSE
CLAUSE mortgage?
It is a stipulation in a It is a stipulation stating Yes. The law considers void any stipulation
REM contract that that, on the occasion of forbidding the owner from alienating the
extends the the mortgagor’s default in immovable mortgaged. (Art. 2130)
coverage of a paying an installment of a
mortgage to debt, the whole sum that What is the Doctrine of Indivisibility of Mortgage?
advances or loans remains unpaid Mortgage is indivisible; hence any partial payment of
other than those automatically becomes the debt will not result in the extinguishment of a part
already obtained or due and payable. (Luzon thereof.
specified in the Development Bank v.
contract. A dragnet Conquilla, 2005) Exceptions:
clause may refer to 1. Where each one of several things guarantee
past or future debts. a determinate portion of credit.
(Paradigm 2. Where only portion of loan was released.
Development Corp. of a. Example: X borrowed 80k from the
the Philippines v. bank and he mortgaged his 100 ha.
Bank of the Philippine property. Lender was only able to
Islands, 2017) release 40k due to CB restrictions.
The Court held that the bank can
What is the reliance on the security test? only foreclose on 50% of the
This test applies when there is a dragnet clause in a mortgaged land (50 hectares)
mortgage contract but there is a mortgage (Central Bank v. CA, G.R. No. L-
constituted on another property to secure a 45710, 1985)
subsequent loan. 3. Where there was failure of consideration.
(PNB v. RBL Enterprices, Inc., G.R. No.
It applies in a situation where there are several 149569, 2004).
obligations and several collaterals. When the
mortgagor takes another loan for which another The rule that real property, consisting of several lots
security was given, it could be inferred that such loan which should be sold separately, applies to sales in
was made in reliance on the new security given, and execution, and not to foreclosure of mortgages.
not on the original security with the "dragnet clause".
Since there is a different security was taken for the Does the placing of multiple mortgages in one
second loan, it cannot be inferred that parties document make an indivisible whole?
intended to rely on the first security for the first NO, the mere embodiment of a real estate mortgage
loan. The "dragnet clause" in the first security and a chattel mortgage in one document does not
instrument constituted a continuing offer by the have the effect of fusing both securities into an
indivisible whole. Therefore, the enforcement of the
borrower to secure further loans under the security
real estate mortgage can be performed
of the first security instrument, and that when the
independently. (PBCOM v. Macadaeg, 109 Phil. 981
lender accepted a different security, he did not (1960))
accept the offer. (Prudential Bank v. Alviar, G.R. No.
150197, 2005) Does the Doctrine of Indivisibility of Mortgage
still apply to redemption, once the mortgage has
Can the mortgage credit be alienated or been extinguished by foreclosure?
assigned? The doctrine of indivisibility of mortgage does not
Yes, and this may be done by the mortgagee without apply once the mortgage is extinguished by a
the consent of the debtor, except if there is a complete foreclosure thereof. Nothing in the law
stipulation against alienation. Alienation of the prohibits the piecemeal redemption of properties sold
mortgage credit is valid even if it is not registered.

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at one foreclosure proceedings. (Yap vs. Dy, Sr. , foreclosure of the mortgage arise from a single cause
G.R. Nos. 171868 & 171991, 2011). of action. Consequently, there exists only one cause
of action for a single breach of that obligation.
What is the concept of foreclosure? (Pineda v. De Vega, G.R. No. 233774, 2019)
Foreclosure is the remedy available to the mortgagee
by which he subjects the mortgaged property to the What is the rule with respect to the family home?
satisfaction of the obligation to secure which the The family home is exempt from execution, forced
mortgage was given. sale or attachment, except for debts secured by
mortgages on the premises before or after such
Note: A foreclosure sale retroacts to the date of constitution. (Art. 155, Family Code; Fortaleza vs.
registration of the mortgage. Thus, a person who Lapitan, G.R. No. 178288, 2012; Parcon-Song v
takes a mortgage in good faith and for valuable Parcon, G.R. No. 199582. July 7, 2020)
consideration, the record showing clear title to the
mortgagor, will be protected against equitable claims What is judicial foreclosure and what is the
on the title in favor of third persons of which he had procedure for such?
no actual or constructive notice. (St. Dominic Corp., It is the judicial action instituted in the proper court
vs. IAC, G.R. Nos. 70623 & L-48630, 1987) which has jurisdiction over the area wherein the real
property involved, or a portion thereof is situated. It is
Can the accessions of the property also be quasi in rem in nature and survives the death of the
foreclosed? mortgagor. (Rule 68, Rules of Court)
Yes. Absent an adverse claimant or any evidence to
the contrary, all accessories and accessions accruing The followings steps illustrate judicial foreclosure:
or attached to the mortgaged property are included in (Rule 68)
the mortgage contract and may thus also be 1. Court orders mortgagor to pay the mortgage
foreclosed with the principal property in the case of debt with interest and other charges within a
nonpayment of the debt secured. (PNB vs. Maranon, period of not less than 90 days nor more
G.R. No. 189316, 2013) than 120 days from the entry of judgment;
and a sale will be conducted and the
What is the prescriptive period to recover the property will be awarded to the highest
deficiency after foreclosure? bidder at public auction, should the
The action to recover a deficiency prescribes after 10 mortgagor fail to pay at the time directed;
years from the time the right of action accrues 2. The sale will be confirmed. This operates to
(Arts.1142 & 1144) divest the rights of all parties in the action
and to vest their rights to the purchase,
When does the right to file an action for collection subject to the right of redemption allowed by
of debt or foreclosure accrue? law.
In order that the debtor may be in default, it is 3. The judgement will be executed.
necessary that: 4. Application of proceeds of sale to:
a) the obligation be due, demandable and a. Costs of the sale
already liquidated; b. Amount due the mortgagee;
b) the debtor delays performance; and c. Claims of junior encumbrances or
c) the creditor requires the performance persons holding subsequent
judicially or extrajudicially (unless demand is mortgages in the order of their
not necessary). priority; and
d. The balance, if any, shall be paid to
Thus, default only arises when demand to pay is the mortgagor.
unnecessary, or when such demand is required and 5. Sheriff’s Certificate of sale is executed,
made by the mortgagee but is refused by the acknowledged and recorded to complete the
mortgagor. Hence, it is at this point where the foreclosure.
mortgagee obtains the right to file an action to collect
the debt or foreclose the mortgage. (Maybank What is the nature of Extra-judicial Foreclosures?
Philippines., Inc. v. Spouses Tarrosa, G.R. No. Extra-judicial Foreclosures are governed by Act No.
213014, 2015) 3135, as amended.

Can the remedies be availed of simultaneously? The following are the characteristics of the same:
The remedies of collection and foreclosure are 1. Express authority to sell must be given to the
mutually exclusive, which means that the invocation mortgagee (i.e. Special Power of Attorney to
or grant of one remedy precludes the other. Both sell);
demands for the payment of the debt and the

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2. Authority is not extinguished by death of corresponding to such debt shall be

mortgagor or mortgagee; collected;
3. Public sale should be made after proper 5. The Clerk of Court shall Issue certificate of
notice (posting and publication); payment indicating the amount of
4. Surplus proceeds of foreclosure sale belong indebtedness, the filing fees collected, the
to the mortgagor or his assigns; mortgages sought to be foreclosed, the
5. Debtor has the right to redeem the property description of the real estates and their
sold. Mortgagors who are natural persons respective locations;
can redeem within 1 year from registration of 6. The notice of sale shall be Published in a
the certificate of sale with the Register of newspaper of general circulation;
Deeds. Mortgagors who are juridical 7. The application shall be Raffled among all
persons can redeem within 3 months from sheriffs;
foreclosure sale or until registration of the 8. After the redemption period has Expired, the
certificate of sale with the Register of Deeds, Clerk of Court shall archive the records; and
whichever is earlier. (Section 47 of RA 8791 9. Previously, the rule was that no auction sale
or the General Banking Law of 2000) shall be held unless there are at least Two
6. Remedy of party aggrieved by foreclosure is participating bidders, otherwise the sale
a petition to set aside sale and cancellation shall be postponed to another date. If on the
of writ of possession; new date there shall not be at least 2
7. Republication is necessary for the validity of bidders, the sale shall then proceed. The
a postponed foreclosure sale (parties have names of the bidders shall be reported by
no right to waive the publication the Sheriff or the Notary Public who
requirement). conducted the sale to the Clerk of Court
before the issuance of the certificate of sale.
Note: Unless the parties stipulate, personal notice to On January 30, 2001, the Supreme Court
the mortgagor in extrajudicial foreclosure issued a resolution amending paragraph 5 of
proceedings is not necessary because Section 31 of A.M. 99-10-05-0 explicitly dispensing with
Act No. 3135 only requires posting of the notice of the "two-bidder rule."
sale in three public places and the publication of that
notice in a newspaper of general circulation. Can the mortgagee recover the deficiency?
(Ramirez v. TMBC, G.R. No. 198800, 2013) If the proceeds of the sale are insufficient to cover the
debt in an extrajudicial foreclosure of mortgage, the
Note: Extra-judicial foreclosure before a notary mortgagee is entitled to claim the deficiency from the
public is valid under Act No. 3135. (Tagunicar v. debtor. While Act. No. 3135 does not discuss the
Lorna Express,G.R. No. 138592, 2006). mortgagee’s right to recover the deficiency, neither
does it contain any provision expressly or impliedly
What is the procedure for Extra-judicial prohibiting recovery. (BPI vs. Avenido, G.R. No.
Foreclosure? 175816, 2011)
Procedure for Extra-judicial Foreclosure of Real
Estate Mortgage (Act No. 3135)(Act No. 1508, A.M. What happens if the property is not redeemed?
N0. 99-10-05-0; January 15, 2000) (ARC-DIP-RET) After the expiration of the redemption period without
1. Filing of Application before the Executive redemption having been made by petitioner,
Judge through the Clerk of Court; respondent became the owner thereof and
2. Clerk of Court will examine whether the consolidation of title becomes a right. Being already
Requirements of the law have been then the owner, respondent became entitled to
complied with, that is, whether the notice of possession. Petitioner already lost his possessory
sale has been posted for not less than 20 right over the property after the expiration of the said
days in at least 3 public places of the period. (Spouses Gatuslao v. Yanson, G.R. No.
municipality or city where the property is 191540, 2015)
situated, and if the same is worth more than
P400.00, that such notice has been Is the stipulation of an Upset Price or “tipo”
published once a week for at least 3 allowed?
consecutive weeks in a newspaper of No. A stipulation of minimum price at which the
general circulation in the city or municipality; property shall be sold to become operative in the
3. The Certificate of sale must be approved by event of a foreclosure sale at public auction is null
the Executive Judge; and void, for the property must be sold to the highest
4. In extrajudicial foreclosure of real mortgages bidder. (de Leon & de Leon, Jr, citing Banco Espanol
in Different locations covering one Filipino v. Donaldson, 5 Phil. 418)
indebtedness, only one filing fee

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What is the effect of inadequacy of price in a of the conditions of the mortgage but before
foreclosure sale? confirmation of the sale
1. Where there is Right to Redeem. a. Applies to judicial foreclosure of
1. General Rule: Inadequacy of price is real mortgage and chattel mortgage
immaterial because the judgment debtor foreclosure.
may redeem the property. b. A second mortgagee acquires only
2. Exception: The price is so inadequate as the equity of redemption vested in
to shock the conscience of the court taking the mortgagor, and his rights are
into consideration the peculiar strictly subordinate to the superior
circumstances. The sale will be set aside. lien of the first mortgagee.
(Sulit vs. CA, G.R. No. 119247, 1997) c. Note: Redemption of property
2. Property may be sold for less than its fair where the mortgagee is a banking
market value upon the theory that the lesser the institution is allowed within 1 year
price the easier for the owner to redeem. from the date of the registration of
the confirmation of sale.
The value of the mortgaged property has no bearing 2. Right of redemption: right of the mortgagor
on the bid price at the public auction, provided that to redeem the property within a certain
the public auction was regularly and honestly period after it was sold for the satisfaction of
conducted. the debt
a. Applies only to extrajudicial
Can the creditor waive the security? foreclosure of real mortgage.
1. The Mortgagee may waive right to foreclose b. EXC: The right of redemption is
his mortgage and maintain a personal action also available in judicial
for recovery of the indebtedness. foreclosure, in cases where the
2. Remedies are alternative, not cumulative. mortgagee is a bank. (Section 47 of
3. Options of the mortgagee in case the debtor- RA 8791 or the General Banking
mortgagor dies: (Rule 86, sec. 7, Rules of Law of 2000)
Court) c. Note: The right of redemption, as
a. To waive mortgage and claim long as within the period
entire debt from the mortgagor’s prescribed, may be exercised
estate as an ordinary claim; irrespective of whether or not the
b. To judicially foreclose mortgage mortgagee has subsequently
and prove any deficiency; or conveyed the property to some
c. To rely on the mortgage other party. (Sta. Ignacia Rural
exclusively without filing a claim Bank, Inc. v. CA, G.R. No. 97872,
for deficiency 1994)

What is redemption? How should redemption be performed?

Redemption is a transaction by which the mortgagor The general rule in redemption is that it is not
reacquires or buys back the property which may have sufficient that a person offering to redeem manifests
passed under the mortgage or divests the property of his desire to do so; The statement of intention must
the lien which the mortgage may have created. be accompanied by an actual and simultaneous
tender of payment; In case of disagreement over the
What are the Kinds of Redemption? redemption price, the redemptioner may preserve his
1. Equity of redemption: Right of the right of redemption through judicial action, which in
mortgagor to redeem the mortgaged every case, must be file within the one-year period of
property after his default in the performance redemption. (Torbela vs. Rosario, G.R. Nos. 140528
& 140553, 2011)

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What are the statutory periods of redemption?

EXTRAJUDICIAL FORECLOSURE
JUDICIAL FORECLOSURE
(Act no. 3135)
PERIODS OF
REDEMPTION
BANKS NON-BANKS BANKS NON-BANKS

Individual debtors / 1 year from registration of the certificate of sale 1 year from N/A [Equity of
mortgagors with Registry of Deeds. registration of the Redemption
certificate of sale Only]
with Registry of
Deeds.

Juridical persons 3 months after foreclosure or before registration 1 year from N/A [Equity of
as debtors / of certificate of foreclosure whichever is earlier registration of the Redemption
mortgagors (General Banking Law, Sec. 47) certificate of sale Only]
with Registry of
Deeds.

The right of legal redemption must be exercised Who are Junior Mortgagees?
within specified time limits. However, the statutory After the foreclosure sale, there remains in the
period of redemption can be extended by agreement second mortgagee a mere right of redemption. His
of the parties. (Republic vs. Marawi-Marantao remedy is limited to the right to redeem by paying off
General Hospital, G.R. No. 158920, 2012) the debt secured by the first mortgage.

As a rule, the period of redemption is not tolled by He is entitled to the payment of his credit the excess
the filing of a complaint or petition for annulment of of the proceeds of the auction sale.
the mortgage and the foreclosure sale conducted
pursuant to the said mortgage. In case the credit of the first mortgagee has
absorbed the entire proceeds of the sale, the
How do you determine the Redemption Price? second mortgage is extinguished, since the
1. Mortgagee is not a bank (Act No. 3135 in mortgage cannot be enforced beyond the total value
relation to Sec. 28, Rule 39 of Rules of Court) of the mortgaged property.
a. Purchase price of the property;
b. 1% interest per month on the purchase What is a Mortgagee in Possession?
price; One who has lawfully acquired actual or
c. Taxes paid and amount of purchaser’s constructive possession of the premises mortgaged
prior lien, if any, with the same rate of to him, standing upon his rights as mortgagee and
interest computed from the date of not claiming under another title, for the purpose of
registration of sale, up to the time of enforcing his security upon such property or making
redemption. its income help to pay his debt.

2. Mortgagee is a bank (Section 47, General The rights of the first mortgage creditor or mortgage
Banking Act of 2000) over the mortgaged properties are superior to those
a. Amount due under the mortgage deed; of a subsequent attaching creditor and other junior
b. Interest at the rate specified in mortgage; mortgagees. (Lee vs. Bangkok Bank Public
c. Cost and expenses incurred by bank from Company, Ltd. G.R. No. 173349, 2011)
sale and custody less income derived

Note: Redemption price in this case is reduced by

the income received from the property.

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What are the Rights and Obligations of the What is the Doctrine of Mortgagee in Good
Mortgagee in Possession? Faith?
1. Similar to an antichresis creditor – entitled Under the Doctrine of “Mortgagee in Good Faith”,
to retain such possession until the even if the mortgagor is not the owner of the
indebtedness is satisfied and the property mortgaged property, the mortgage contract and any
redeemed. foreclosure sale arising therefrom are given effect
2. Without right to reimbursement for useful by reason of public policy; Even if the mortgagor is
expenses not the rightful owner of, or does not have a valid
title to, the mortgaged property, the mortgagee in
What is a Writ of Possession? good faith is, nonetheless, entitled to protection.
Order whereby the sheriff is commanded to place in (Torbela vs. Rosario, G.R. Nos. 140528 &140553,
possession of real or personal property the person 2011)
entitled thereto such as when a property is
extrajudicially foreclosed. When a mortgagee relies upon what appears on the
face of a Torrens title and lends money in all good
The issuance of the writ of possession in an faith on the basis of the title in the name of the
extrajudicial foreclosure is merely a ministerial mortgagor, only thereafter to learn that the latter’s
function. The purchaser at the foreclosure sale is title was defective, being thus an innocent
entitled as of right to a writ of possession. mortgagee for value, his or her right or lien upon the
land mortgaged must be respected and protected.
Before lapse of redemption period – file an ex (Mahinay vs. Gako, Jr., G.R. Nos. 165338 &
parte application and file a bond 179375, 2011)

After lapse of redemption period – file an ex parte BUT: A bank whose business is impressed with
application and no need for a bond (PBCom v. public interest is expected to exercise more care
Yeung, G.R. No. 179691, 2013) and prudence in its dealings than a private
individual, even in cases involving registered lands.
“The purchaser at the auction sale concerned A bank cannot assume that, simply because the title
whether in a judicial or extrajudicial foreclosure shall offered as security is on its face free of any
have the right to enter upon and take possession of encumbrances of lien, it is relieved of the
such property immediately after the date of the responsibility of taking further steps to verify the title
confirmation of the auction sale and administer the and inspect the properties to be mortgaged.
same in accordance with law. Any petition in court
to enjoin or restrain the conduct of foreclosure In order for a mortgagee to invoke the doctrine of
proceedings instituted pursuant to this provision mortgagee in good faith, the impostor must have
shall be given due course only upon the filing by the succeeded in obtaining a Torrens title in his name
petitioner of a bond in an amount fixed by the court and thereafter in mortgaging the property. Where
conditioned that he will pay all the damages which the mortgagor is an impostor who only pretended to
the bank may suffer by the enjoining or the restraint be the registered owner, and acting on such
of the foreclosure proceeding.” (The General pretense, mortgaged the property to another, the
Banking Law of 2000, Section 47) mortgagor evidently did not succeed in having the
property titled in his or her name, and the mortgagee
What is the distinction between Redemption and cannot rely on such pretense as what appears on
Repurchase? the title is not the impostor's name but that of the
The right to redeem becomes functus oficio at the registered owner. (Ruiz v. Dimailig, G.R. No.
end of the redemption period, and its exercise after 204280, 2016)
the period is not really one of redemption but a
repurchase. Distinction must be made because BUT: SC has held in a case that while the bank
redemption is by force of law; the purchaser at failed to exercise greater care in conducting the
public auction is bound to accept redemption. ocular inspection of the properties offered for
Repurchase however of foreclosed property, after mortgage, its omission did not prejudice any
redemption period, imposes no such obligation. innocent third parties because the cause of the
After expiry, the purchaser may or may not re-sell mortgagors' defective title was the simulated sale
the property but no law will compel him to do so. between the buyer/mortgagor and seller (the latter
And, he is not bound by the bid price; it is entirely questioning the validity of the mortgage). Thus, no
within his discretion to set a higher price, for after all, amount of diligence in the conduct of the ocular
the property already belongs to him as owner. inspection could have led to the discovery of the
complicity between the ostensible mortgagors/buyer
and the true owners/seller. In fine, the bank can

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hardly be deemed negligent. Thus, the bank was 13. Receivables

considered as a mortgagee in good faith (Philippine 14. Operating Lease
Banking Corporation v. Dy, G.R. No. 183774, 2012) 15. Other functional equivalents

ALSO: SC has held that a bank should not Stages of a Security Interest
necessarily be made liable if it did not investigate or I. Creation
inspect the property. If the circumstances reveal that a. A security interest shall be created
an investigation would still not yield a discovery of by a security agreement.
any anomaly, or anything that would arouse b. A security agreement may provide
suspicion, the bank should not be liable. Such is the for the creation of a security
case when the TCT is clean, bearing no annotations interest in a future property, but the
evidencing any trust, lien, or encumbrance on the security interest in that property is
property, not forged or fake. There is .also no created only when the grantor
showing that the bank was aware of any defect or acquires rights in it or the power to
any other conflicting right on the title when the encumber it. ||| (Personal Property
property was mortgaged to it. In fact, the Security Act, Sec. 5 Republic Act
investigation of the property would still fail to bring No. 11057, [August 17, 2018])
any doubt as to the validity of the TCT (i.e., the title
owners were in actual possession of the property). Who creates a Security Interest?
(Parcon-Song v Parcon, G.R. No. 199582. July 7, The Grantor
2020) a. Person who grants a security interest in
collateral to secure its own obligation or that
of another person.
b. Buyer or transferee of a collateral that
E. PERSONAL PROPERTY
acquires rights to a security interest.
SECURITY ACT c. Transferor in a transfer of accounts
receivable
Coverage d. Lessee in an operating lease (operating
All transactions of any form that secure an lease is a contract that allows for an asset's
obligation with having movable collateral, except use but does not convey ownership rights
interests in aircrafts ("Civil Aviation Authority Act of of the asset).
2008"), and in ships ("Ship Mortgage Decree of
1978".) How is a Security Interest created?
1. Execution of a security agreement,
What is a Security Interest? 2. Lease in an operating lease, or
A property right in collateral that secures payment or 3. Sale of accounts receivable.
other performance of an obligation, regardless of
whether the parties have denominated it as a Formal Requirements
security interest, and regardless of the type of asset, a. A security interest must be in writing; it may
the status of the grantor or secured creditor, or the consist of more than one writing but must
nature of the secured obligation, including the right be taken together to establish the intent of
of parties to create security interest.
1. a buyer of accounts receivable and b. A description of a collateral is sufficient if it
2. a lessor under an operating lease for not can be reasonably identified as a collateral.
less than one (1) year
Rule on Continuity
Object of Security Interest (C2O2N2F2I2DER-LS) General Rule: A security interest shall continue in
1. Securities (Movable) collateral notwithstanding sale, lease, license,
2. Commodity Contracts exchange, or other disposition of the collateral and
3. Equipment shall extend to its identifiable or traceable proceeds
4. Inventory
5. Deposit Accounts Exceptions:
6. Negotiable instruments i. Unless the parties stipulated otherwise, or
7. Negotiable Documents of Title ii. Unless the subsequent purchaser was in
8. Consumer goods good faith
9. Intellectual property a. Exception to Exception: No good
10. Livestock faith if the security interest was
11. Fixtures registered with the Registry.
12. Future Property

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Upon disposition of collateral, the security interest 1. Deposit-taking institution with right
shall extend to proceeds of collateral without further to set-off
act and be continuously perfected, if proceeds are 2. Deposit-taking institution
in the form of: 3. Control agreement
a. Money 4. Registration
b. Accounts Receivable
B. Certificated Securities
c. Negotiable Instrument
d. Deposit Accounts 1. Possession
2. Registration
If the proceeds are different from these, then C. Securities held by an intermediary
security interest over the proceeds must be 1. Security interest of the
perfected via Registration, Possession or Control intermediary
(whichever is appropriate for the kind of collateral) 2. Control agreement
within 15 days after receipt of the grantor of the 3. Registration
proceeds. D. Electronic Securities not held by an
intermediary
II. Perfection 1. Notation of security interest in the
A. Registration of a notice with the LRA books maintained for such
Registry; purpose or on behalf of the issuer.
B. Possession of the collateral by the secured 2. Control agreement
creditor; and 3. Registration
C. Control of investment property and deposit E. Negotiable instruments
account. 1. Possession
2. Registration
Control Agreement F. Purchase Money Security Interest
The contract between the secured creditor, debtor 1. Repairman’s lien
and intermediary where the intermediary follows the i. Person who provides
instruction of the secured creditor without further services or materials with
consent of the debtor or the grantor. Must be in respect to goods in the
writing and under oath, must state date and time of ordinary course of
execution. business
ii. Possession
Perfection Requirements 2. Equipment or consumer goods
NATURE OF MODES OF i. Unpaid seller
ASSET PERFECTION ii. Registration of notice
Tangible Assets Registration and within 3 business days
Possession after grantor receives
Intangible Assets Registration and possession.
Control Agreement iii. rights which arise
between delivery to the
Note: Perfection binds third parties, but failure to grantor and the time the
perfect the security interest does not affect validity notice is registered.
of the security interest between the parties. 3. Livestock, Inventory, Intellectual
Property
Priority of Interest i. Unpaid seller
General Rule: The party who first perfects the ii. Possession + the secured
security interest over the subject property will take creditor gives written
precedence over those who perfect it later. (First in notification to the holder
time, First in Right) of the interest in the same
types of inventory,
Exception: Special Rules is applicable to certain livestock, or intellectual
specific classes of assets (Top to Bottom) property, before
A. Deposit Accounts: possession.

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4. Livestock one event of default

i. Persons who provide food by the debtor under
or medicine the security
ii. Registration/possession agreement.
+ Written notification to b. The secured creditor shall
holder of conflicting provide the debtor, grantor,
perfected security interest and, if the collateral is a
before grantor receives fixture, any real estate
possession of food or mortgagee, a copy of the
medicine. application, including all
supporting documents and
III. Enforcement evidence for the order
granting the secured
a. Kinds creditor possession of the
i. Judicial: Rule 39 of Rules of Court collateral; and
ii. Extra-Judicial: Provisions under PPSA c. The secured creditor is
entitled to an order granting
b. When Applicable possession of the collateral
Obligations have been discharged and no upon the court finding that a
existing outstanding commitments. default has occurred under
the security agreement and
c. Rights of a Creditor that the secured creditor
i. Expedited Repossession of a has a right to take
Collateral possession of the collateral.
1. Only when the security agreement The court may direct the
so stipulates, and possession can grantor to take such action
be taken without breach of peace. as the court deems
2. If the collateral is a fixture, the necessary and appropriate
creditor may remove the fixture so that the secured creditor
form the real property affixed to it may take possession of the
without judicial process. He shall collateral: Provided, That
exercise due care in removing the breach of the peace shall
fixture. include entering the private
3. Upon default, secured creditor residence of the grantor
cannot take possession of without permission,
collateral without breach of the resorting to physical
peace, secured creditor may violence or intimidation, or
proceed as follows: being accompanied by a
a. The secured creditor shall law enforcement officer
be entitled to an expedited when taking possession or
hearing upon application for confronting the grantor.
an order granting the
secured creditor possession ii. Right of a Higher-Ranking Creditor to
of the collateral. Takeover
i. Such application 1. Even if another secured creditor
shall include a has initiated enforcement, one who
statement by the has priority over the security
secured creditor, interest shall be entitled over the
under oath, verifying enforcement process. May be
the existence of the invoked at any time before the
security agreement collateral is sold or otherwise
attached to the disposed of or retained by the
application and secured creditor or until the
identifying at least

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conclusion of an agreement by the in its present condition or following

secured creditor for that purpose. any commercially reasonable
preparation or processing.
iii. Right to Retain 2. The secured creditor may buy the
1. After default, secured creditor may collateral at any public disposition,
propose to the debtor and grantor or at a private disposition but only
to take all or part of the collateral in if the collateral is of a kind that is
total or partial satisfaction of the customarily sold on a recognized
secured obligation, and shall send market or the subject of widely
a proposal to: distributed standard price
a. The debtor and the grantor; quotations.
b. Any other secured creditor
or lien holder who, five (5) v. Special Rights
days before the proposal is 1. Accounts Receivable: Instruct
sent to the debtor and the the account debtor to make
grantor, perfected its payment to the secured creditor
security interest or lien by and apply such payment to the
registration; and satisfaction of the obligation
c. Any other person with an secured by the security interest
interest in the collateral who after deducting the secured
has given a written creditor’s reasonable collection
notification to the secured expenses. On request of the
creditor before the proposal account debtor, the secured
is sent to the debtor and the creditor shall provide evidence of
grantor. its security interest to the account
2. The secured creditor may retain debtor when it delivers the
the collateral in the case of: instruction to the account debtor;
a. A proposal for the 2. Negotiable document perfected
acquisition of the collateral by possession: Proceed as to the
in full satisfaction of the negotiable document or goods
secured obligation, unless covered by the negotiable
the secured creditor document.
receives an objection in 3. Deposit account maintained by
writing from any person the secured creditor: Apply the
entitled to receive such a balance of the deposit account to
proposal within twenty (20) the obligation secured by the
days after the proposal is deposit account; and
sent to that person; or 4. Deposit account perfected by
b. A proposal for the control agreement: Instruct the
acquisition of the collateral deposit-taking institution to pay the
in partial satisfaction of the balance of the deposit account to
secured obligation, only if the secured creditor’s account.
the secured creditor
receives the affirmative vi. Damages
consent of each addressee
of the proposal in writing d. Rights of a Grantor
within twenty (20) days after i. Order or restrain collection, enforcement,
the proposal is sent to that disposition
person. ii. Right of redemption
1. Redemption of the collateral by
iv. Right to Dispose paying or otherwise performing the
1. After default, a secured creditor secured obligation in full, including
may sell or otherwise dispose of the reasonable cost of
the collateral, publicly or privately, enforcement.

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2. Exceptions: a. identifies the grantor and

a. Waived the right to redeem. the secured creditor;
b. Collateral is sold, disposed, b. describes the collateral;
acquired, or collected by the c. states the method of
secured creditor or until the intended disposition; and
conclusion of an agreement d. states the time and place of
by the secured creditor for a public disposition or the
that purpose; and time after which other
c. Retention of the collateral disposition is to be made.
by the secured creditor. 4. Notification is not needed when:
a. Perishable in nature,
e. Disposition b. Threatens to decline
i. Commercial Reasonableness: speedily in value,
1. An act is performed in a c. A type customarily sold on a
commercially reasonable manner. recognized market.
2. If it is in conformity with
commercial practices among iii. Application of Proceeds
dealers in that type of property. 1. The order for application shall be
3. When a better price could have made as follows:
been obtained by disposition at a a. The reasonable expenses
different time or by a different of taking, holding, preparing
method from the time and method for disposition, and
selected by the secured creditor. disposing of the collateral,
4. When the method of disposition of including reasonable
collateral has been approved in attorneys’ fees and legal
any legal proceeding, it is expenses incurred by the
conclusively commercially secured creditor;
reasonable. b. The satisfaction of the
obligation secured by the
ii. Notification security interest of the
1. Not later than ten (10) days before enforcing secured creditor;
disposition of the collateral, the and
secured creditor shall notify: c. The satisfaction of
a. The grantor; obligations secured by any
b. Any other secured creditor subordinate security
or lien holder who, five (5) interest or hen in the
days before the date collateral if a written
notification is sent to the demand and proof of the
grantor, held a security interest are received before
interest or lien in the distribution of the proceeds
collateral that was perfected is completed.
by registration; and 2. Any surplus shall inure to the
c. Any other person from grantor, while any deficiency shall
whom the secured creditor hold the debtor liable.
received notification of a
claim of an interest in the --end of topic--
collateral if the notification
was received before the
secured creditor gave
notification of the proposed
disposition to the grantor.
2. The grantor may after default
waive the right to be notified.
3. Notification is sufficient:

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action/proceeding shall be suspended. (Art.

XIII. COMPROMISE
2030, CIVIL CODE)
• If a losing party showed a sincere desire to
Compromise – a contract by which the parties, by compromise, the courts may mitigate the
making reciprocal concessions, avoid litigation or damages to be paid. (Art. 2031, CIVIL
put an end to one already commenced. (Art. 2028, CODE)
CIVIL CODE)
• It is a consensual contract, perfected upon Court approval is necessary for compromises
the meeting of the minds. (Paraiso entered into by (GRAPE) (Art. 2032, CIVIL CODE):
International Properties, Inc. v. CA, G.R. 1. Guardians
No. 153420, April 16, 2008). 2. Representatives of absentees
• As such, neither courts nor quasi-judicial 3. Administrators or Executors of a
bodies cannot impose a compromise decedent’s estate
different from the agreement between the 4. Parents
parties. (Philippine Bank of
Communications v. Echiverri, G.R. No. L- For a juridical person to compromise, it must comply
41795, Aug. 29, 1980, citing Municipal with the form and requirements that are needed for
Board of Cabanatuan City v. Samahang alienation of property. (Art. 2033).
Magsasaka, G.R. No. L-25818, Feb. 25, • Generally, only a Board Resolution is
1975, 62 SCRA 435). required; however, for GOCCs and
government agencies, the authority to
Compromise requires: (CARE) compromise a settled claim or liability
1. Contract exceeding P100,000.00 is vested
2. With Reciprocal concessions exclusively in Congress, per Sec. 20(1),
3. Seeking to Avoid or End litigation Chap. IV, Subtitle B, Title I, Book V of EO
No. 292. (Binga Hydroelectric Plant, Inc. v.
Two kinds of compromise agreements: COA, G.R. No. 218721, July 10, 2018).
1. Judicial - which puts an end to a
pending litigation; and The following CANNOT be compromised (Art.
2. Extrajudicial - which is to avoid 2035):
litigation. (Spouses Lana v. CA, G.R. 1. Civil status of persons
No. 104133, April 18, 1995, citing 2. Validity of marriage or of legal
Caguioa, VI Commentaries and Cases separation
on Civil Law). 3. Any ground for legal separation
4. Future support
The courts shall endeavor to persuade the litigants 5. Jurisdiction of courts
in a civil case to compromise. (Art. 2029, CIVIL 6. Future legitime
CODE)
• Procedurally, this is done through A compromise covers only those matters definitely
mandatory court-annexed mediation, stated therein, or those included by necessary
judicial disputed resolution. (see A.M. No. implication. (Art. 2036, CIVIL CODE)
11-1-6-SC-PHILJA, Jan. 11, 2011), and
also during pre-trial (Rule 18). A compromise is res judicata upon the parties, but
• Note that what can be compromised is a there shall be no execution except in compliance
civil case; “there may be a compromise with a judicial compromise. (Art. 2037)
upon the civil liability arising from an • Note: even if the compromise is not
offense; but such compromise shall not judicially approved, it is res judicata. (Jose
extinguish the public action for the Cochingyan, Jr. v. Cloribel, G.R. No. L-
imposition of the legal penalty.” (Art. 2034); 27070-71, April 22, 1977, 76 SCRA 361).
“it is settled that criminal liability cannot be • However, only if the compromise is
the subject of a cimpromise” (Team Image approved by the court can it be enforced by
Entertainment, Inc. v. Solar Team mandamus. (Spouses Lana v. CA, G.R.
Entertainment, Inc., G.R. No. 191652, No. 104133, Apr. 18, 1995, citing Maceda,
Sept. 13, 2017). Jr. v. Moreman Builders, G.R. No. 100239,
• If either or both parties express a Oct. 28, 1991, 203 SCRA 293).
willingness to compromise, or one party
offers to compromise (even if the other Compromises in which there is mistake, fraud,
party refused the offer), the civil violence, intimidation, undue influence, or falsity of
documents are voidable.

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• However, if one party, by virtue of the ARBITRATIONS

compromise, already withdrew from a
litigation that had commenced, the The same persons who may enter into compromise
other party cannot set up mistake of may also submit their arbitrators for decision. (Art.
fact. (Art. 2038, CIVIL CODE) 2042, CIVIL CODE)

General Rule for newly-discovered documents: All provisions relating to compromise are also
If there are newly-discovered documents referring to applicable to arbitrations. (Art. 2043, CIVIL CODE)
part of a compromise that was already entered into,
the discovery of such by itself is not cause of Any stipulation that the arbitrator’s award or decision
annulment/rescission of the compromise, unless the shall be final is valid, without prejudice to Articles
documents were concealed by one of the parties. 2038-40. (on voidable compromises; Art. 2044,
CIVIL CODE)
Exception for newly-discovered documents: If
the compromise refers to only one thing, and the Any clause giving one party the power to choose
newly-discovered documents show that one party more arbitrators than the other is void. (Art. 2045,
had no right to said thing (Art. 2039, CIVIL CODE) CIVIL CODE)

If the parties entered into compromise, and either or The appointment of arbitrators and the procedure for
both parties were unaware that there was already a arbitration shall be governed by such rules of court
final judgment entered into at the time they entered as the SC may provide. (Art. 2046, CIVIL CODE).
the compromise, the compromise may be rescinded
(Art. 2040, CIVIL CODE) Arbitration is a preferred method of settling disputes
in our jurisdiction. RA 9285 (Alternative Dispute
If one party fails or refuses to abide by the Resolution Act of 2004) provides that:
compromise, the other party has the option of either 1. The RTC must refer the case to arbitration
enforcing the compromise, or consider the if there is an arbitration clause; it does not
compromise rescinded and insist on the original have jurisdiction;
demand (Art. 2041, CIVIL CODE) 2. Foreign arbitral awards, however, must be
confirmed by the RTC to be enforced;
The doctrine on immutability of judgments applies to 3. The RTC does have jurisdiction to review
compromise agreements approved by courts in the the foreign arbitral award (even if it does not
same manner as it applies to judgments that have have jurisdiction over the dispute itself);
been rendered on the basis of a full-blown trial. 4. The grounds to set aside a foreign arbitral
Thus, a judgment on compromise that has attained award are different from those to set aside
finality cannot be “modified in any respect, even if a domestic arbitral award; for the former,
the modification is meant to correct erroneous the grounds are Art. 34(2) of the
conclusions of fact and law, and whether it be made UNCITRAL Model Law, while for the latter,
by the court that rendered it or the Highest Court of the grounds are set in Sec. 23 of RA 876;
the land.” (Chiquita Brands v. Omelio, G.R. No. and
189102, 2017). 5. The RTC decision on a foreign arbitral
award is appealable.
A judgment upon a compromise is rendered based
on the parties’ reciprocal concessions. All the more Thus, if there is an arbitration clause, unilateral
reason should a judgment upon a compromise be rescission is improper. (Korea Technologies v.
complied with in good faith considering that the Lerma, G.R. No. 143581, Jan. 7, 2008)
parties themselves crafted its terms. However,
notwithstanding provisions in a compromise Under the doctrine of separability, even the party
agreement stating that the parties should who repudiates the main contract may invoke an
“immediately provisionally dismiss all actions, arbitration clause. Also, a formal request for
whether civil or criminal, they may have filed against arbitration is not the only method to activate the
each other”, a party that fails to cause the dismissal arbitration clause; raising the existence of the
of the criminal cases filed cannot be deemed to have arbitration clause and the desire to avail of such in
violated the compromise agreement, since criminal an Answer is valid invocation of the right to arbitrate.
liability cannot be the subject of a compromise. (Koppel, Inc. v. Makati Rotary Club Foundation, Inc.,
(Team Image Entertainment v. Solar Team G.R. No. 198075, Sept. 4, 2013)
Entertainment, G.R. No. 191652, 2017).

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Note: the following CANNOT be the subject of an law to which the parties have
arbitration clause (Sec. 6, RA 9285): subjected it; or
1. Labor disputes covered by the Labor Code; b. The party making the application
2. Civil status of persons; was not given proper notice of the
3. Validity of marriage; appointment of the arbitrator or of
4. Any ground for legal separation; the arbitration proceedings or was
5. Jurisdiction of courts; otherwise unable to present his
6. Future legitime; case; or
7. Criminal liability; and c. The award deals with a dispute
8. Anything which by law cannot be beyond the arbitration agreement,
compromised. or contains decisions on matters
beyond the agreement; or
Note: Arbitration of constructions disputes are d. The composition of the arbitration
governed by E.O. No. 1008 (the Construction tribunal or the arbitration
Industry Arbitration Law), and falls under the proceedings were not in
jurisdiction of the Construction Industry Arbitration accordance with the agreement
Commission. (Chapter 6 of RA 9285) Grounds to between the parties;
vacate a domestic arbitral award (Sec. 24, RA 2. The court finds that:
876): a. The subject matter of the dispute is
1. Award procured by corruption, fraud, or not capable of settlement by
other undue means; or arbitration under the law of the
2. Evident partiality or corruption in any of the State; or
arbitrators; or b. The award is in conflict with the
3. Arbitrators were guilty of misconduct in public policy of the State.
refusing to postpone when there is good
cause, or in refusing to hear pertinent and
material evidence, or was disqualified and
concealed such disqualification; or
4. Arbitrators either exceeded their powers or
so imperfectly executed them that a mutual,
final, and definite award was not made

Grounds to modify a domestic arbitral award (Sec.

25, RA 876):
1. Evident miscalculation of figures or evident
mistake in description of any person, thing,
or property referred to in the award; or
2. Arbitrators awarded on a matter not
submitted to them, not affecting the merits
of the decision upon the mater submitted;
or
3. Award is imperfect in a matter of form not
affecting the merits of the controversy, and
if it was a commissioner’s report, the defect
could have been amended or disregarded
by the court.

A party has 1 month to file for confirmation or

enforcement of the arbitral award (Sec. 23, RA 876),
and 30 days to move for the modification or vacation
of the award (Sec. 26, RA 876)

Grounds to vacate or modify a foreign arbitral

award (Art. 34(2) of the UNCITRAL Model Law, and
Sec. 45 of RA 9285):
1. A party to the award furnishes proof that:
a. A party to the agreement was
under some incapacity, or the
agreement is not valid under the

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Definition
XIV. QUASI-CONTRACTS
Quasi-contracts are juridical relations resulting from
lawful, voluntary and unilateral acts, which has for
TOPIC OUTLINE UNDER THE SYLLABUS its purpose, the payment of indemnity to the end that
no one shall be unjustly enriched or benefited at the
A. NEGOTIORIUM GESTIO expense of another (Art. 2142, CIVIL CODE).

B. SOLUTIO INDEBITI Distinguished from other Sources (LUV)

1. The act giving rise to a quasi-contract must be
C. OTHER QUASI-CONTRACTS Lawful distinguishing it from delict;
2. The act must be Voluntary distinguishing it from
a quasi-delict which is based on fault or
negligence; and
3. The act must be Unilateral distinguishing it from
contract which is based on agreement.
(ERNESTO L. PINEDA, OBLIGATIONS &
CONTRACTS 15 (2009))

KINDS OF QUASI-CONTRACT

A. NEGOTIORIUM
GESTIO

Negotiorum Gestio is the voluntary management

of the property or affairs of another in times of
emergency without the owner’s authority (Art. 2144,
CIVIL CODE).

Obligation created: Return of the property by the

officious manager to the owner once the emergency
ceases, and for the owner to reimburse expenses
incurred by the officious manager (Art. 2150, CIVIL
CODE).

B. SOLUTIO INDEBITI

Solutio Indebiti is the juridical relation, which is

created when something is received when there is
no right to demand it and it was unduly delivered
through mistake (Art. 2154, CIVIL CODE).

Obligation created: Recipient to return the property

delivered through mistake.

SOLUTIO INDEBITI NATURAL

OBLIGATIONS
In solutio indebiti, the The person making the
payment or delivery is payment or delivery
made on the basis of a knows that he has no
mistake, hence the legal obligation to pay
recipient has the legal or to deliver but still
obligation to return voluntarily makes such
(Art. 2154, CIVIL payment or delivery.
CODE). For this reason, once
payment or delivery

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has been made, there When the government, upon the failure of any
is no right to ask for the person to comply with health or safety regulations
return (Art. 1423, CIVIL concerning property, undertakes to do the
CODE). necessary work, even over his objection, he shall be
liable to pay the expenses. (Art. 2169, CIVIL CODE)

When by accident or other fortuitous event,

C. OTHER QUASI-
movables separately pertaining to two or more
CONTRACTS persons are commingled or confused, the rules on
co-ownership shall be applicable. (Art. 2170, CIVIL
Other cases of quasi-contracts CODE)
When, without the knowledge of the person obliged
to give support, it is given by a stranger, the latter The rights and obligations of the finder of lost
shall have a right to claim the same from the former, personal property shall be governed by articles 719
unless it appears that he gave it out of piety and and 720 (Art. 2171, CIVIL CODE).
without intention of being repaid. (Art. 2164, CIVIL
CODE) The right of every possessor in good faith to
reimbursement for necessary and useful expenses
When funeral expenses are borne by a third person, is governed by article 546. (Art. 2172, CIVIL CODE)
without the knowledge of those relatives who were
obliged to give support to the deceased, said When a third person, without the knowledge of the
relatives shall reimburse the third person, should the debtor, pays the debt, the rights of the former are
latter claim reimbursement. (Art. 2165, CIVIL governed by articles 1236 and 1237. (Art. 2173,
CODE) CIVIL CODE)

When the person obliged to support an orphan, or When in a small community a majority of the
an insane or other indigent person unjustly refuses inhabitants of age decide upon a measure for
to give support to the latter, any third person may protection against lawlessness, fire, flood, storm or
furnish support to the needy individual, with right of other calamity, any one who objects to the plan and
reimbursement from the person obliged to give refuses to contribute to the expenses but is
support. The provisions of this article apply when the benefited by the project as executed shall be liable
father or mother of a child under eighteen years of to pay his share of said expenses. (Art. 2174, CIVIL
age unjustly refuses to support him. (Art. 2166, CODE)
CIVIL CODE)
Any person who is constrained to pay the taxes of
When through an accident or other cause a person another shall be entitled to reimbursement from the
is injured or becomes seriously ill, and he is treated latter. (Art. 2175, CIVIL CODE)
or helped while he is not in a condition to give
consent to a contract, he shall be liable to pay for Note: The Civil Code provides [the
the services of the physician or other person aiding abovementioned] enumeration of quasi-contracts,
him, unless the service has been rendered out of but the list is not exhaustive and merely provides
pure generosity. (Art. 2167, CIVIL CODE) examples. (Metrobank v. Absolute Management
Corporation, G.R. No. 170498, 2013)
When during a fire, flood, storm, or other calamity,
property is saved from destruction by another
person without the knowledge of the owner, the --end of topic--
latter is bound to pay the former just compensation.
(Art. 2168, CIVIL CODE)

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XV. TORTS A. COMMON PRINCIPLES

Definition of Quasi-Delict
TOPIC OUTLINE UNDER THE SYLLABUS Whoever by act or omission causes damage to
another, there being fault or negligence, is obliged
A. COMMON PRINCIPLES to pay for the damage done. Such fault or
1. Torts vs Crimes negligence, if there is no pre-existing contractual
2. Torts vs. Contracts relation between the parties, is called a quasi-delict
and is governed by the provisions of this Chapter.
B. CLASSIFICATION OF TORTS (Art.2176)
1. Negligence
2. Degrees of Diligence and Negligence; Elements of Quasi-Delict
Presumption 1. Damage suffered by plaintiff;
3. Intentional 2. Fault or Negligence of the defendant, or
4. Strict Liability some other person for whose acts he must
respond;
C. THE TORTFEASOR; JOINT AND DIRECT 3. Connection of cause and effect between
LIABILITIES the fault or negligence of the defendant and
the damages incurred by the plaintiff; and
D. PROXIMATE CAUSE; CONCEPT; 4. No pre-existing contractual relation
DOCTRINE OF LAST CLEAR CHANCE between the parties. (Andamo v.
International Appellate Court G.R. No.
E. VICARIOUS LIABILITY 74761, 1990)
F. RES IPSA LOQUITOR Nevertheless, there are instances when Article 2176
may apply even when there is a pre-existing
G. DAMNUM ABSQUE INJURIA contractual relationship:
1. When such a contractual relation exists,
H. DEFENSES IN TORT ACTIONS the obligor may break the contract that the
same act which constitutes a breach of
I. MEDICAL NEGLIGENCE AND the contract would have constituted the
MALPRACTICE source of an extra- contractual obligation,
had no contract existed between the
J. DAMAGES; KINDS OF DAMAGES; WHEN parties.
MAY BE RECOVERED (Cangco v Manila Railroad, G.R. No. L-
1. Actual and Compensatory Damages 12191, 1918)
2. Moral Damages 2. An act that breaks a contract may also be
3. Nominal Damages a tort. (Air France v Carrascoso, G.R. No.
4. Temperate or Moderate Damages L-21438, 1966)
5. Liquidated Damages
6. Exemplary or Corrective Damages
1. TORTS VS
K. DAMAGES IN CASES OF DEATH CRIMES

L. DUTY OF INJURED PARTY TORTS CRIMES

Interest Involved

Private Interest Public Interest

Purpose of Law
Indemnification or Punitive and
Reparation Corrective
Scope and Source
All acts in which any There is no crime
kind of fault or unless there is a law
negligence intervenes. defining and

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punishing an act as a persons who occupy

crime a position of
dependency with
Quantum of evidence required respect to the
Preponderance of Proof of guilty person sought to be
evidence beyond reasonable held liable.
doubt Burden of proof; elements to be alleged and
Compromise proven to establish a cause of action
Generally, Existence of a contract Plaintiff bears the
Compromise is allowed compromise is NOT and breach; no need burden of alleging
and in fact it is allowed since the act for the plaintiff to prove and proving
encouraged as this is a is against the state, that the breach was negligence on the
civil case except in the case of caused by negligence. part of the
private crimes Once a breach of defendant.
contract is proved, the
Nature of liability of employers with respect defendant is presumed
to its employees negligent and must
Subsidiary liability (Art. Personal, direct and prove not being at
102 and 103 of the solidary liability (Art. fault.
RPC) 2180) Nature of liability when damage or breach is
caused by servants or employees
2. TORTS VS Contracting party’s Liability is
CONTRACTS liability is direct and presumptive. If the
immediate. servants or
CONTRACTS TORTS employees are
Vinculum Juris (juridical tie) shown to be
Contract itself; fault or Created by the negligent, then a
negligence is just the fault or negligence. disputable
cause of the breach. presumption
automatically arises
There is a pre-existing against the employer
obligation (i.e., the that s/he was
contract) before the negligent in
occurrence or selection and
intervention of fault or supervision.
negligence, which Defense of due diligence in the selection
results in a breach of and supervision of employees
that contract. Not applicable for two Applicable to
Persons Liable reasons: overcome the
Only the contracting The actual presumption of
party, heirs, and tortfeasor, and (1) Plaintiff is not negligence.
assigns. persons who are required to
either morally prove
culpable, or who are negligence at
in a position to the first
exercise limited or instance
absolute control because it is
over the tortfeasor. not material to
a cause of
Moral culpability may action
consist in: premised on
(1) failing to exercise breach of
due care in one’s contract.
own acts; (2) Persons acting
(2) failing to exercise through
due care in selection agents (like
and supervision; and juridical
(3) control of entities) would

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enjoy practical (2) As a matter of

immunity. defendant’s
defense in
proving that
Damages recoverable proximate
cause of the
Actual Damages Actual Damages
damage was
(Art. 2201) (Art. 2202) – the plaintiff’s
Defendant is liable own
Breach in Good for all damages negligence
Faith: Defendant is which are the
liable for the natural natural and
and probable probable
consequences of the B. CLASSIFICATION OF TORTS
consequences of
breach of the the act or omission
obligation, and which 1. NEGLIGENCE
complained of. It is
the parties have not necessary that
foreseen or could have It involves voluntary acts or omissions which results
such damages in injury to others, without intending to cause the
reasonably foreseen at have been
the time the obligation same.
foreseen or could
was constituted.
have reasonably Negligence is defined as the omission of that degree
been foreseen by of diligence which is required by the nature of the
Breach in Bad Faith:
Defendant is liable for the defendant. obligation and corresponds to the circumstances of
all damages which the persons, time and place (Art. 1173)
may be reasonably Moral Damages
attributed to the non- (Art. 2219[2]) – For 2. DEGREES OF DILIGENCE AND
performance of the quasi- delicts NEGLIGENCE; PRESUMPTION
obligation. involving physical
injuries. Extraordinary Diligence
Moral Damages Banking is a business that is impressed with
(Art. 2220) – GR: Not Exception: If the act public interest. The public reposes its faith and
is wanton or willful, confidence upon banks. Banking businesses
recoverable
moral damages can
are to exercise extraordinary diligence. This
still be awarded even
EXC:
if there is no physical requirement to observe a higher degree of
(1) Bad faith; diligence is statutorily imposed by virtue of the
injuries, but there
(2) Gross negligence; General Banking Law. (Philippine National
should be mental
(3) In wanton disregard Bank v. Santos, G.R. No. 208293 & 208295)
anguish.
of contractual
obligations
Hotels are akin to a common carrier and
Doctrine of proximate cause therefore, is required to observe extraordinary
diligence. Extraordinary diligence means that
GR: The doctrine of Applicable. diligence as far as human, care, and foresight
proximate cause is not can provide, or using the utmost diligence of a
applicable in actions The doctrine of very cautious person, with due regard to all
involving a breach of proximate cause is a circumstances.
contract. It is the parties device for imputing
themselves who create liability to a person
The hotel business is imbued with public
the obligation, and the where there is no
function of the law is relation between him interest. Catering to the public, hotelkeepers
merely to regulate the and the other party. are bound to provide not only lodging but also
relation thus created. security to the persons and belongings of their
guests. (Makati Shangri-La Hotel and Resort,
Inc. v. Harper, G.R. No. 189998)
EXC:
(1) Assessing the
extent of Presumption of Negligence
liability of the 1. Res ipsa Loquitor
defendant

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Where the thing which causes injury is shown 3. Negligence per Se

to be under the management of the defendant, Violation of a statutory duty constitutes
and the accident is such as in the ordinary negligence, negligence as a matter of law, or
course of things does not happen if those who negligence per se, for the reason that non-
had its control or management used proper observance of what the legislature has
care, it affords reasonable evidence, in the prescribed as a suitable precaution is failure to
absence of an explanation by the defendant, observe that care which an ordinarily prudent
that the accident arose from want of care. man would observe, and, when the state
regards certain acts as so liable to injure others
The defendant’s negligence is presumed or as to justify their absolute prohibition, doing the
inferred when the plaintiff establishes the forbidden act is a breach of duty with respect to
requisites for the application of res ipsa loquitur. those who may be injured thereby; or, as it
Once the plaintiff makes out a prima facie case has been otherwise expressed, when the
of all the elements, the burden then shifts to standard of care is fixed by law, failure to
defendant to explain. conform to such standard is negligence,
negligence per se or negligence in and of
The presumption or inference may be rebutted itself, in the absence of a legal excuse.
or overcome by other evidence and, under
appropriate circumstances a disputable The bare fact that the defendant was violating a
presumption, such as that of due care or statute or municipal ordinance at the time of the
innocence, may outweigh the inference. It is accident may have sufficiently established
not for the defendant to explain or prove its some degree of negligence on his part, but such
defense to prevent the presumption or negligence is without legal consequence unless
inference from arising. Evidence by the it is shown that it was a contributing cause of
defendant of say, due care, comes into play the injury. (Añonuevo v CA, G.R. No. 130003,
only after the circumstances for the 2004)
application of the doctrine has been
established. (DM Consunji v. Court of 3. INTENTIONAL
Appeals, G.R. No. 137873)
Every person must, in the exercise of his rights and
Although generally, expert medical testimony in the performance of his duties, act with justice,
is relied upon in malpractice suits to prove that give everyone his due, and observe honesty and
a physician has done a negligent act or that he good faith. (Art. 19)
has deviated from the standard medical
procedure, when the doctrine of res ipsa Every person who, contrary to law, wilfully or
loquitur is availed by the plaintiff, the need for negligently causes damage to another, shall
expert medical testimony is dispensed with indemnify the latter for the same. (Art. 20)
because the injury itself provides the proof of
negligence. The reason is that the general rule Any person who wilfully causes loss or injury to
on the necessity of expert testimony applies another in manner that is contrary to morals, good
only to such matters clearly within the domain customs or public policy shall compensate the latter
of medical science, and not to matters that are for the damage (Art. 21)
within the common knowledge of mankind
which may be tested to by anyone familiar with 4. STRICT LIABILITY
the facts. (Reyes v. Doctolero, G.R. No.
185597) An example of a strict liability tort is that provided in
Article 2183 of the Civil Code, which states that “the
2. Violations of Traffic Rules and possessor of an animal or whoever may make use
Regulations of the same is responsible for the damage which it
In motor vehicle mishaps, the owner is solidarily may cause, although it may escape or be lost. This
liable with his driver, if the former, who was in responsibility shall cease only in case the damage
the vehicle, could have, by the use of the due should come from force majeure or from the fault of
diligence, prevented the misfortune. It is the person who has suffered damage”.
disputably presumed that a driver was
negligent, if he had been found guilty of The obligation imposed by Article 2183 is not based
reckless driving or violating traffic regulations at on the negligence or on the presumed lack of
least twice within the next preceding two vigilance of the possessor or user of the animal
months. (Art. 2180) causing the damage. It is based on natural equity
and on the principle of social interest that he who

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possesses animals for his utility, pleasure or service

must answer for the damage which such animal may
cause. (Vestil v. Intermediate Appellate Court, G.R. Doctrine of Corporate Negligence
No. 74431, 1989) The doctrine of corporate negligence is the judicial
answer to the problem of allocating hospital’s
Strict liability applies to cases where a product or liability for the negligent acts of health practitioners,
service causes harm to a consumer, regardless of absent facts to support the application of
whether the manufacturer or seller was negligent. respondeat superior or apparent authority.
This provides better protection for consumers by
placing the burden on manufacturers, sellers, and The theory supporting the liability of hospital is
distributors to ensure the safety and quality of their based on the recognition that the hospitals stand to
products and services. (R.A. No. 3294) benefit from the business of providing services to
patients and should therefore be responsible for any
The head of a family that lives in a building or a part injury or damage that may result under the
thereof, is responsible for damages caused by relationship. (PSI v. Agana, G.R. No. 126297, 2007)
things thrown or falling from the same. (Art. 2193)

D. PROXIMATE CAUSE; CONCEPT;

C. THE TORTFEASOR; JOINT AND DOCTRINE OF LAST CLEAR
DIRECT LIABILITIES CHANCE
Joint tortfeasors are all the persons who Proximate Cause
command, instigate, promote, encourage, advise, That cause which, in natural and continuous
countenance, cooperate in, aid or abet the sequence, unbroken by any efficient intervening
commission of a tort, or who approve of it after it is cause, produces the injury, and without which the
done, if done for their benefit. (Ruks Konsult and result would not have occurred. (Vda. de Bataclan
Construction v. Adworld Sign and Advertising Corp., v. Medina, G.R. No. L-10126, 1957)
G.R. No. 204886, 2015)
The proximate cause of the injury is not necessarily
Solidary Liability of Joint Tortfeasors the immediate cause of, or the cause nearest in time
The responsibility of two or more persons who are to, the injury. It is only when the causes are
liable for a quasi-delict is solidaty (Art. 2194). independent of each other that the nearest is to be
charged with the disaster. So long as there is a
Under Article 2194 of the Civil Code, joint tortfeasors natural, direct and continuous sequence between
are solidarily liable for the resulting damage. In other the negligent act and the injury that it can
words, joint tortfeasors are each liable as principals, reasonably be said that but for the act the injury
to the same extend and in the same manner as if could not have occurred, such negligent act is the
they had performed the wrongful act themselves. proximate cause of the injury, and whoever is
There is no contribution between joint tortfeasors responsible therefore is liable for damages resulting
whose liability is solidary since both of them are therefrom. (Brinas v. People of the Philippines, G.R.
liable for the total damage. Where the concurrent or L-30309, 1983)
successive negligent acts or omissions of two or
more persons, although acting independently, are in Proximate Cause Inapplicable in Breach of
combination the direct and proximate cause of a Contract
single injury to a third person, it is impossible to Such doctrine only applies in actions for quasi-
determine in what proportion each contributed to the delicts, not in breach of contract. It is a device for
injury and either of them is responsible for the whole imputing liability to a person where there is no
injury. (People v. Velasco, G.R. No. 195668, 2014). relation between him and another party.
(Sps. Guanio v. Makati Shangri-La Hotel, G.R. No.
Tortfeasor 190601, 2011)
Whoever by act or omission causes damage to
another, there being fault or negligence, is obliged But note that in the case of Bataclan v. Medina, the
to pay for the damage done. (Art. 2176). court used the doctrine of proximate cause in the
case of breach of contract of carriage but only to
Pursuant to a vicarious liability, a corporation may determine the extent of liability. (Bataclan v. Medina,
be held directly and primarily liable for tortious acts G.R. No. L-10126, 1957)
of its officers or employees (Philippine National
Bank v. Court of Appeals, G.R. No. L-2715, 1978).

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Note: If plaintiff's negligence is only contributory, he The obligation imposed by Article 2176 of the Civil
is considered partly responsible only. Plaintiff may Code on quasi-delicts is demandable not only for
still recover from the defendant but the award of one’s own acts or omissions, but also for those of
damages may be reduced by the courts in persons for whom one is responsible (Art. 2180).
proportion to his own negligence. (Bank of America
NT & SA vs. Philippine Racing Club, G.R. No. The basis of liability is pater familias or the failure of
150228, 2009) the persons mentioned therein to exercise due care
and vigilance over the acts of subordinates to
Emergency Rule Doctrine prevent the damage (Filcar Transport Services v.
Under the emergency rule, one who suddenly finds Espinas, G.R. No. 174156, 2012).
himself is a place of danger and is required to act
without time to consider the best means that may be Persons Vicariously Liable
adopted to avoid the impending danger is not guilty
of negligence even if fails to adopt what a. Father/ mother for their minor
subsequently and upon reflection may appear to children.
have been a better method unless the emergency,
he finds himself in is brought by his own negligence. j. Guardians are liable for the minors
(Gan v. Court of Appeals G.R. No. L-44264, 1988) and incapacitated persons under
their authority.
Elements
The emergency rule or sudden peril doctrine can be Incompetent includes persons suffering the penalty
broken down into elements namely: of civil interdiction or who are hospitalized lepers,
i. Defendant found himself in a place of prodigals, deaf and dumb who are unable to read
danger; and write, those who are of unsound mind, even
ii. Defendant had no time to consider the best though they have lucid intervals, and person’s not
means to avoid such danger; and being of unsound mind by reason of age, disease,
iii. Defendant was not negligent. weak mind and other similar causes, cannot, without
outside aid, take care of themselves and manage
Last Clear Chance their property, becoming thereby an easy prey for
Also known as the “Doctrine of Discovered Peril” deceit and exploitation (RULES OF COURT, Rule
92, Sec. 2).
Even though a person’s own acts may have placed
him in a position of peril and an injury results, the k. Schools, administrators and
injured is entitled to recover if the defendant thru the teachers, and individuals, entities
exercise of reasonable care and prudence might or institutions engaged in child
have avoided injurious consequences to the care having special parental
plaintiff. authority over children

Requisites: Extent of Special Parental Authority

1. Plaintiff was in a position of danger by his own It can be exercised only over minors while under
negligence their supervision, instruction or custody, including
2. Defendant knew of such position of the plaintiff while in authorized activities, whether inside or
3. Defendant had the last clear chance to avoid outside the school, entity or institution (AQUINO,
the accident by exercise of ordinary care but Torts and Damages, 665).
failed to exercise such last clear chance and
4. Accident occurred as proximate cause of such Custody
failure The protective and supervisory custody that the
school and its heads and teachers exercise over the
Who may invoke – Plaintiff pupils and students for as long as they are in
attendance in school, including recess time (Palisoc
When the doctrine is not applicable v. Brillantes, G.R. No. L-29025, 1971).
a. Joint tortfeasors
b. Defendants concurrently negligent As long as it can be shown that the student is in the
c. As against 3rd persons school premises in pursuance of a legitimate
student objective, in the exercise of a legitimate
right, and even in the enjoyment of a legitimate
E. VICARIOUS LIABILITY student privilege, the responsibility of the school
authorities over the student continues (Amadora v.
Court of Appeals, G.R. No. L-47745, 1988).

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exercise due care and vigilance over the acts of

l. Owners/managers of one’s subordinates to prevent damage to another.
establishment or enterprise for (Filcar Transport Service v. Espinas, supra)
their employees
n. State for their special agents
They are liable for damages caused by their
employees in the service of the branches in which It is a basic constitutional rule that the State cannot
they are employed, or on the occasion of their be sued without its consent. Consent of the State to
functions. It does not extend to acts of strangers be sued can be manifested through a special law or
who committed unauthorized acts and in doing so, general law allowing the State to be sued.
caused damage to others (Art. 2180, par. 4). (AQUINO, Torts and Damages, 718)

Managers Special Agent

In Article 2180, “managers” is used in the sense of A special agent is one who receives a definite and
an employer. A managerial employee within the fixed order or commission, foreign to the exercise of
contemplation of the Labor Code is not a manager the duties of his office; task assigned must be
under Article 2180 because he himself may be foreign from/to his usual government functions.
regarded as an employee or dependiente of the o If agent is not a public official and is
employer (Philippine Rabbit Bus Lines, Inc. v. Phil. commissioned to perform non-
American Forwarders, Inc., G.R. No. L-25142, governmental work, state is liable as
1975). ordinary employer.

Note: Co-employees are not liable even if they If government commissions a private individual for a
supervise the employee. special government task, it is acting through a
special agent and will be liable for tort under Article
m. Employers for their employees 2180.
and household helpers
o. Teachers/Head of establishment of
Although the employer is not the actual tortfeasor, arts and trades for their
the law makes him vicariously liable on the basis of pupils/students/apprentices
the civil law principle of pater familias for failure to

TABLE ON VICARIOUS LIABILITY

PERSON FOR REQUIREMENTS

PERSON
WHOM FOR VICARIOUS NATURE OF
VICARIOUSLY DEFENSES
VICARIOUSLY LIABILITY TO LIABILITY
LIABLE
LIABLE ATTACH
Father and mother
exercise joint
Child lives in their
parental authority
company; AND is
over their minor
under their parental
Children below children. Their
PARENT/S (JOINT authority.
18. liability is direct
PARENTAL
Diligence of a good and primary, not
AUTHORITY based (Art.2180, in relation
(Art. 221, Family father of a family to subsidiary.
on Art. 221, Family to Art.221, Family
Code) prevent damage.
Code) Code; Tamargo v.
(Art. 211, Family
FATHER, IN CASE CA, G.R. No. 85044,
(Art. 2180; Code; Libi v. IAC,
OF DEATH OR 1992)
Exconde v. G.R. No. 70890,
INCAPACITY, THE
Capuno, G.R. No. 1992)
MOTHER (Art.
Children 18 to L-10134, 1957) Direct and
2180) “Child” lives in their
21. primary.
company.
(Art. 2180, in (Art. 2180 in
(Art.2180, in relation
relation to Art. relation to Art.
to Art. 236, ¶ 3,
236 ¶ 3, Family 236, ¶ 3, Family
Family Code)
Code) Code)

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Principal and
solidary.

(Art. 219, Family

Code)

General Rule:
SCHOOLS, Parents are not
ADMINISTRATORS liable; child was in
AND TEACHERS, Child is under their Exercised the school; not in their
INDIVIDUALS, supervision, proper diligence custody
Children below
ENTITIES, OR instruction or custody required under the
18.
INSTITUTIONS at the time the tort is particular (Cuadra vs.
ENGAGED IN committed. circumstances. Monfort, G.R. No.
(Arts. 218- 219,
CHILD CARE L-24101, 1970)
Family Code)
HAVING SPECIAL (Art. 218, Family (Art. 219, Family
PARENTAL Code) Code) Exception:
AUTHORITY OVER Parents, judicial
CHILDREN guardians or
persons
exercising
substitute parental
authority shall be
subsidiarily liable.

(Art. 219, Family

Code)
Minors or Under their authority Diligence of a good
Direct and
incapacitated and live in their father of a family to
primary.
GUARDIANS persons. company. prevent damage.
(Art. 2180)
(Art. 2180) (Art. 2180) (Art. 2180)
Employees in No EER.
That the employee is
the service of
liable for a QD;
the branches in (Jayme v Apostol,
EER exists; and
which they are G.R. No. 136609,
employee was acting
employed or on 2008) –
within the scope of
the occasion of municipality, not
his assigned tasks Direct and
their functions. the mayor is the
when the tort was primary.
employer of the
committed, or that the
(Art. 2180(4)) driver).
injurious act was (Art. 2180)
committed at a time
EE acted beyond
the employee was Note: “Manager”
Employees and the scope of
EMPLOYERS, performing his means employer.
household authority (i.e. when
OWNERS, AND functions.
helpers acting the EEs are on
MANAGERS (Philippine Rabbit
within the scope strike).
(Dela Llana v. Biong, Bus Lines, Inc. v.
of their assigned
G.R. No. 182356, Philippine
tasks even (Universal Aquarius
2013; Castilex American
though the v. QC Human
Industrial Corp. vs. Forwarders, Inc.,
employer is not Resources
Vasquez, G.R. No. G.R. No. L-25142,
engaged in any Management
132266, 1999; Martin 1975)
business or Corporation, G.R.
v. CA, G.R. No.
industry. No. 155990, 2007)
82248, 1992; Jayme
v. Apostol, G.R. No.
(Art. 2180(5)) Diligence of a good
136609, 2008)
father of a family in
the selection and

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Note: “Acting within supervision of

the scope of assigned employees.
tasks” – includes any
act done in the (Mercury Drug v.
furtherance of the Huang, G.R. No.
employer’s business. 172122, 2007;
Sanitary Steam vs.
(Filamer Christian CA, G.R. No.
Institute v. IAC, G.R. 119092, 1998)
No.75112 1990) (e.g.,
janitor who drove
vehicle for the benefit
of the employer).

[3 THEORIES]

1. EER (Art.2180)

2. Doctrine of
Apparent
Authority or
Ostensible
Agency or
1. Elements of
“Holding out”
the 3 theories
Reliance
Doctors and are not
(Nogales vs.
hospital present; and
Capitol Medical
employees. 2. Due diligence
Center, G.R. No.
in the selection
142625, 2006;
(Ramos v. CA and
Professional
G.R. No. supervision (if Direct and
Services Inc.v.
124354, 1999 EER). primary.
Agana G.R. No.
and 2002;
126297, 2007;
HOSPITALS Nogales v. (Art. 2180(5); (Casumpang v.
G.R. No. 126467,
Capitol Medical Nogales vs. Capitol Cortejo, G.R. No.
2008; G.R. No.
Center G.R. No. Medical Center, 171127, 171217,
127590, 2010)
142625, 2006; G.R. No. 142625, & 17122, 2015)
Casumpang v. 2006; Professional
3. Doctrine of
Cortejo, G.R. Services Inc.v.
Corporate
No. 171127, Agana G.R. No.
Negligence:
171217, & 126297, 2007; G.R.
Hospital is liable
17122, 2015) No. 126467, 2008;
for its own
G.R. No. 127590,
negligence; not
2010)
vicariously for the
doctor’s or
medical
personnel’s
negligence.

(Professional
Services Inc.v.
Agana, supra)
RULES: Direct and
Special agent – Observed diligence primary.
STATE i.e., one who Public officials (PO) of a good father of
receives a performing a family to prevent (Art. 2180;
definite and functions of his damage. Fontanilla v.

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fixed order or office – State is Maliaman, G.R.

commission, immune from suit. (Art.2180) Nos. 55963 &
foreign to the Public official liable 61045, 1991)
exercise of the under Art.2176. Observed diligence
duties of his of a good father of
office if he is a PO specially a family in the
special official. commissioned to selection and
perform a task supervision of
(Art.2180; foreign to his office employees.
Merritt v. GPI, – State liable; PO is a
G.R. No. L- special agent. (Fontanilla v.
11154, 1916) Maliaman, G.R. No.
Private individual L-55963, 1989)
Government (PI) commissioned
Owned and by the State to
Controlled perform non-
Corporations governmental
(GOCCs) – functions – State is
When the liable as an employer.
government
enters into a PI commissioned to
commercial perform a special
business, it governmental task
abandons its (special agent) –
sovereign State liable.
capacity and is
to be treated Employees of
like any other government offices
private performing
corporation. proprietary
functions – State
(Manila Hotel liable as an employer.
Employees
Association v. (Fontanilla v.
Manila Hotel Maliaman, G.R. No.
Company, G.R. L-55963, 1989)
L-48524, 1941)

Direct and
Student is in the primary.
Adult pupils and
school premises in
students (for
pursuance of a Note: Applies
teachers).
legitimate student whether the
Teacher was not
objective, in the institution is
Adult negligent.
exercise of a academic or not.
apprentices (for
legitimate student
heads of Note: Art.2180
TEACHERS/ right, and even in the (Amadora v. CA,
establishments does not apply
HEADS OF enjoyment of a supra)
of arts and when the tort was
ESTABLISHMENTS legitimate student
trades). not committed by a
OF ARTS AND privilege, the Basis of liability
student.
TRADES responsibility of the of teacher and
(Art.2180;
school authorities head = close
Amadora v. CA, (Aquinas School
over the student supervisory
G.R. No. L- vs. Sps. Inton, G.R.
continues. relationship; ability
47745, 1988) No. 184202, 2011)
to instill discipline.
Indeed, even if the
If pupil, student
student should be General Rule:
or apprentice is
doing nothing more School is not
a minor, apply
than relaxing in the liable.

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Art. 218, Family campus in the

Code. company of his Exception: When
classmates and it is being held
Note: Pupil friends and enjoying liable as an
need not live or the ambience and employer.
board with the atmosphere of the
teacher. school, he is still (Amadora v. CA,
within the custody supra)
(Palisoc and subject to the
v.Brillates, G.R. discipline of the School has an
No. L-29025, school authorities implied
1971) under the provisions contractual duty to
of Art. 2180. maintain a safe
environment
(Amadora v. CA, G.R. conducive for
No. L-47745, 1988) learning. If it
breaches that duty
through
negligence, it may
be held liable
under Art. 2176.

(PSBA v. CA, G.R.

No. 84698, 1992,
in relation to Air
France vs.
Carrascoso, G.R.
No. L-21438,
1966).

F. RES IPSA LOQUITOR knowledge or opportunity for explanation of

the accident. (Malayan Insurance Co. vs.
Definition Rodelio Alberto and Enrico Reyes, G.R.
Where the thing which causes injury is shown to be No. 194320)
under the management of the defendant, and the
accident is such as in the ordinary course of things The doctrine of res ipsa loquitur finds no application
does not happen if those who have the management if there is direct proof of absence or presence of
use proper care, it affords reasonable evidence, in negligence. If there is sufficient proof showing the
the absence of an explanation by the defendant, that conditions and circumstances under which the injury
the accident arose from want of care. (Layugan v. occurred, then the creative reason for the said
IAC, G.R. 73998, 1998) doctrine disappears. (Huang v. Philippine Hoteliers
Inc., G.R. No. 180440, 2012)
Elements of Res Ipsa Loquitur
1. The accident was of a kind which does not
ordinarily occur unless someone is G. DAMNUM ABSQUE INJURIA
negligent;
2. The instrumentality or agency which There can be damage without injury in those
caused the injury was under the exclusive instances in which the loss or harm was not the
control of the person charged with result of a violation of a legal duty. In such cases,
negligence; the consequences must be borne by the injured
3. Injury suffered must have not been due to person alone, the law affords no remedy for
any voluntary action or contribution on the damages resulting from an act which does not
person injured (D.M. Consunji v. Court of amount to a legal injury or wrong. These situations
Appeals, G.R. No. 137873, 2001); are often called damnum absque injuria. (BPI
4. It must appear that the injured party had no Express Card Corporation v. Court of Appeals, G.R.
knowledge or means of knowledge as to No. 120639)
the cause of the accident, or that the party
to be charged with negligence has superior

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When Not Applicable 3. Assumption of Risk

The principle of damnum absque injuria does not
apply when there is an abuse of a person’s right. Volenti Non Fit Injuria
(Cebu Country Club, Inc., v. Elizagaque, G.R. No. That to which a person assents is not deemed in law
160273, 2008) an injury.

Mistakes by public officers are not actionable in the The doctrine of assumption of risk means that one
absence of malice or gross negligence amounting to who voluntarily exposes himself to an obvious,
bad faith. (Farolan v. Solmac Marketing known and appreciated danger assumes the risk of
Corporation, G.R. No. 83589) injury that may result therefrom.

As a defense in negligence cases, therefore, the

H. DEFENSES IN TORT ACTIONS doctrine requires the concurrence of three elements,
namely: (1) the plaintiff must know that the risk is
1. Plaintiff’s Negligence is the Proximate present; (2) he must further understand its nature;
Cause of the Injury and (3) his choice to incur it must be free and
voluntary. (Abrogar v. Cosmos Bottling Co., G.R.
When the plaintiff's own negligence was the No. 164749)
immediate and proximate cause of his injury, he
cannot recover damages. But if his negligence was Note: Assumption of Risk Defense is inapplicable if
only contributory, the immediate and proximate an emergency is found to exist, if the life or property
cause of the injury being the defendant's lack of due of another is in peril, or when he seeks to rescue his
care, the plaintiff may recover damages, but the endangered property. (Ilocos Norte Electric
courts shall mitigate the damages to be awarded. Company v. Court of Appeals, 179 SCRA 5)
(Art. 2179.)
4. Last Clear Chance
Test in determining if plaintiff’s negligence was
the proximate cause of his own injury Also known as "The Doctrine of Discovered Peril"
Where he contributes to the principal occurrence, as
one of its determining factors, he cannot recover. The law is that the person who has the last fair
Where, in conjunction with the occurrence, he chance to avoid the impending harm and fails to do
contributes only to his own injury, he may recover so is chargeable with the consequences, without
the amount that the defendant responsible for the reference to the prior negligence of the other party.
event should pay for such injury, less a sum deemed (Picart v. Smith, 37 Phil. 809)
a suitable equivalent for his own imprudence.
(Taylor v. Manila Electric Railroad and Light Co., 16 Where both parties are negligent but the negligent
Phil. 8) act of one is appreciably later in time than that of the
other, or where it is impossible to determine whose
2. Contributory Negligence fault or negligence brought about the occurrence of
the incident, the one who had the last clear
When the plaintiff's own negligence was the opportunity to avoid the impending harm but failed
immediate and proximate cause of his injury, he to do so, is chargeable with the consequences
cannot recover damages. But if his negligence was arising therefrom.
only contributory, the immediate and proximate
cause of the injury being the defendant's lack of due Stated differently, the rule is that the antecedent
care, the plaintiff may recover damages, but the negligence of a person does not preclude recovery
courts shall mitigate the damages to be awarded. of damages caused by the supervening negligence
(Art. 2179) of the latter, who had the last fair chance to prevent
the impending harm by the exercise of due diligence
Contributory negligence is conduct on the part of the (Canlas v. Court of Appeals, G.R. 112160, 2000).
injured party, contributing as a legal cause to the
harm he has suffered, which falls below the Requisites:
standard which he is required to conform for his own 1. Plaintiff was in a position of danger by his
protection. (National Power Corporation v. own negligence
Casionan, G.R. No. 165969) 2. Defendant knew of such position of the
plaintiff
3. Defendant had the last clear chance to
avoid the accident by exercise of ordinary

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care but failed to exercise such last clear 2. It must be Impossible to foresee the event
chance and which constitutes caso fortuito or if it can be
4. Accident occurred as proximate cause of foreseen it must be impossible to avoid
such failure 3. The occurrence must be such as to render
it Impossible for the debtor to fulfill his
Who may invoke – Plaintiff obligation in a normal manner
4. The obligor must be Free from any
When the doctrine is not applicable participation in the aggravation of the injury
4. Absent preceding negligence on the part of the resulting to the creditor.
plaintiffs, the doctrine of last clear chance
cannot be applied. General Rule: Fortuitous Event is a complete
5. The doctrine does not apply where the party defense and a person is not liable if the cause of the
charged is required to act instantaneously of if damage is a fortuitous event.
the emergency rule applies. (Achevara v.
Ramos, G.R. No. 175172) Exception: It is merely a partial defense and the
6. The principle of last clear chance is inapplicable courts may mitigate the damages if the loss would
in a breach of contract, as it only applies in a suit have resulted in any event. (Art. 2215 [4])
between the owners and drivers of two colliding
vehicles. It does not arise where a passenger This also excepts cases specified by law, or when it is
demands responsibility from the carrier to otherwise declared by stipulation, or when the nature
enforce its contractual obligations. (Tiu v. of the obligation requires the assumption of risk, such
as in a contract of insurance. (Art. 1174)
Arriesgado, 437 SCRA 426)
7. Joint tortfeasors
8. Defendants concurrently negligent Note: A person may still be liable for a fortuitous
9. As against 3rd persons (Aquino, Torts and event if such person made an assumption of risk.
Damages, p. 230, 2005)
7. Waiver
5. Prescription
Rights may be waived, unless the waiver is contrary
Period commences to run from the time the cause to law, public order, public policy, morals, or good
of action arises (i.e. at the time of the commission of customs, or prejudicial to a third person with a right
an act or omission violative of the right of the recognized by law. (Art. 6)
plaintiff) (Kramer v. CA, G.R. No. L-83524, 1989)
A waiver, to be valid and effective, must in the first
Prescriptive Periods place be couched in clear and unequivocal terms
10 years which leave no doubt as to the intention of a person
When the right of action accrues: to give up a right or benefit which legally pertains to
Upon a written contract; him. (Gatchalian v. Delim, 203 SCRA 126)
Action for
Upon an obligation created by
damages Elements
law;
Upon a judgment. 1. Person making the waiver possesses that
right
4 years from the time the cause 2. Has capacity and power to dispose of that
Quasi-delict right
of action arises
3. Waiver must be clear and unequivocal
6. Fortuitous Event 4. Not contrary to law, public policy (Sanico v.
Colipano, G.R. No. 209969)
No person shall be responsible for those events
which cannot be foreseen, or which though foreseen Exceptions:
were inevitable. (Art.1174) 1. Waiver of an action for future fraud
(including gross negligence) is void (Art.
Requisites: 1171).
1. The cause of the Unforeseen and 2. Exemplary damages cannot be waived in
unexpected occurrence, or of the failure of advance (Art. 2235).
the debtor to comply with his obligation, 3. Waiver must not be contrary to public
must be independent of the human will; policy.
4. One’s consent to a waiver must not be
vitiated (Gatchalian v. Delim, G.R. No. L-
56487, 1991).

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8. Emergency Liability of Hospital in Cases of Medical

Negligence
One who suddenly finds himself in a place of danger The Court has applied the doctrine of agency by
and is required to act without time to consider the estoppel to hold hospitals liable for the negligent
best means that may be adopted to avoid the acts of physicians based on:
impending danger, is not guilty of negligence, if he 1. The patient accepts the services of the
fails to adopt what subsequently and upon reflection physician; and
may appear to have been a better method, unless 2. The patient believes that the physicians are
the emergency in which he finds himself is brought agents of the hospital.
about by his own negligence. (Gan v. Court of
Appeals, G.R. No. L-44264, 1988) Doctrine of Informed Consent
The doctrine of informed consent requires a doctor
An individual will nevertheless be subject to liability to inform his patient of the material risks associated
if the emergency was brought about by his own with a medical procedure.
negligence. (Valenzuela v. CA, G.R. Nos. 115024 &
117944, 1996) Elements of a malpractice claim based on the
doctrine of informed consent
Note: Applicable only to situations that are sudden 1. The physician had a duty to disclose
and unexpected such as to deprive the actor of all material risks;
opportunity for deliberation (absence of 2. He failed to disclose or inadequately
foreseeability); the action shall still be judged by the disclosed those risks;
standard of the ordinary prudent man. 3. As a direct and proximate result of the
failure to disclose, the patient consented to
the treatment, which he or she would
I. MEDICAL NEGLIGENCE AND otherwise not have consented to; and
MALPRACTICE 4. The patient was injured by the proposed
treatment. (Li v. Soliman, G.R. No. 165279,
Medical Malpractice; Doctrine of Common 2011)
Knowledge
The general rule on the necessity of expert 9. Damnum Absque Injuria
testimony applies only to such matters clearly within
the domain of medical science, and not to matters There can be damage without injury in those
of common knowledge. Ordinarily, only experienced instances in which the loss or harm was not the
physicians and surgeons are competent to testify on results of a violation of a legal duty. In such cases,
whether a patient has been treated with reasonable the consequences must be borne by the injured
care. However, where common knowledge and person alone, the law affords no remedy for
experience teach that a resulting injury would not damages resulting from an act which does not
have occurred if due care had been exercised (e.g. amount to a legal injury or wrong. These situations
leaving gauzes inside the body of the patient after are often called damnum absque injuria (BPI
an operation, operating on the wrong part of the Express Card Corporation vs. Court of Appeals,
body, etc.), an inference of negligence may be G.R. No. 120639)
drawn giving rise to an application of the doctrine of
res ipsa loquitur without medical evidence. (Ramos Mistakes by public officers are not actionable in the
v. Court of Appeals, G.R. No. 124354, 1999) absence of malice or gross negligence amounting to
bad faith. (Farolan v. Solmac Marketing
Standard of Care required from the Medical Corporation, G.R. No. 83589)
Profession
Given these safeguards, there is no need to
expressly require of doctors the observance of J. DAMAGES; KINDS OF DAMAGES; WHEN
“extraordinary” diligence. As it is now, the practice MAY BE RECOVERED
of medicine is already conditioned upon the highest
degree of diligence. The standard contemplated for 1. ACTUAL AND COMPENSATORY
doctors is simply the reasonable average merit DAMAGES
among ordinarily good physicians. That is
reasonable diligence for doctors or, the reasonable Classes (I-LAV-IIT)
skill and competence that a physician in the same or 1. Indemnity for death;
similar locality should apply. 2. Lucrum Cesans (Benefits you would have
obtained;
3. Attorney’s fees;

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4. Value of loss actually sustained (damnum 5. Award of civil indemnity in tort cases or
emergens); criminal cases where the victim died. This
5. Interest; civil indemnity is in addition to any actual or
6. Injury to business standing or commercial compensatory damages that may be
credit; and awarded in favor of the victim’s heirs.
7. Temporary or permanent loss of earning
capacity. Value of Loss
Means the unrealized profit.
Requisites:
1. Alleged and Proved with Certainty Value of Loss Suffered
(a) Must be pleaded and proved with Destruction of things, fines or penalties, medical &
certainty; and hospital bills, attorney's fees, interests, cost of
(b) Must pray for the relief that claim for litigation.
loss be granted.
Loss of Earning Capacity; Variables to
2. Not Speculative Consider
Plaintiff must prove the loss. For damages 1. Life expectancy:
to be recovered, the best evidence Formula: [2/3 x( 80 – (age at the time of death))]
obtainable by the injured party must be
presented. Actual or compensatory The resulting amount should be used as a
damages cannot be presumed but must be multiplier even if the computed life expectancy
proved with reasonable degree of certainty. goes beyond the victim’s retirement age. The
presumption is that the victim could have
The Court cannot rely on speculation, earned income even if he is beyond the
conjecture or guesswork as to the fact and retirement age.
amount of damages, but must depend upon (Smith Bell Dodwell Shipping Agency
competent proof that they have been Corporation v. Borja, G.R. No. 143008, 2002)
suffered and on evidence of the actual
amount. If the proof is flimsy and 2. Net income/earnings: total of the earnings less
unsubstantial, no damages will be expenses necessary for the creation of such
awarded. (Consolidated Industrial Gases, earnings and less living or other incidental
Inc. vs. Alabang Medical Center, G.R. No. expenses.
181983, 2013)
3. Living expenses: In the absence of the specific
The claimant has the burden of proof. He must amount to be deducted from the gross income,
establish his case by a preponderance of evidence the amount of living expenses shall be 50% of
which means that evidence, as a whole, adduced by the gross income. Examples of living expenses:
one side is superior to that of the other. It is not transportation, clothing, toiletries.
enough that the plaintiff presents an estimated
amount. But uncertainty as to the precise amount is 4. Non-working victims: Earning capacity may
not necessarily fatal. Mere difficulty in the be impaired even if no actual earning is lost in
assessment of damages is not sufficient reason for the meantime. The liability under Article 2206 is
refusing to award damages where the right to them for loss of earning capacity rather than loss of
has been established. (PNOC Shipping and actual earnings. The minimum wage can be
Transport Corp v. CA, G.R. No. 107518, 1998) used in computing the net earnings.

When Loss Need Not Be Proved 5. Pension: Loss of earning capacity covers
1. Liquidated damages previously agreed pension which the decedent would have
upon; liquidated damages take the place of received. (De Caliston v. CA, G.R. No. L-63135,
actual damages except when additional 1983)
damages are incurred;
2. If damages other than actual are sought;
3. Loss is presumed (ex: loss if a child or
spouse);
4. Forfeiture of bonds in favor of the
government for the purpose of promoting
public interest or policy (ex: bond for
temporary stay of alien); and

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Formula for Computation of Loss of Earning permanent incapacity. Courts may

Capacity presume that persons graduate from
American Expectancy Table of Mortality or the college at the age of 21, and it is only then
Actuarial of Combined Experience Table of that they would start earning a livelihood;
Mortality: 2. “Net Annual Income '' may be computed
on the basis of the prevailing minimum
wage for workers in the non-agricultural
[2/3 x (80 – (age at the time of death))] x sector at the time of the minor’s death or
monthly earnings x 12 = GROSS permanent incapacity.
EARNINGS (GE) (Spouses Pereña v. Spouses Zarate, 2012;
and Abrogar v. Cosmos Bottling Co., 2017)

GE – Approximate Expenses (50% of GE) = Net General Rule: Documentary evidence should be
Earnings presented to substantiate the claim for damages for
loss of earning capacity.
Note: In the absence of documentary evidence of
expenses, it is reasonable to presume that it is 50% Exceptions:
of the gross income. (Philippine Hawk Corporation Damages for loss [or impairment] of earning
v. Lee, G.R. No. 166869, 2010) capacity may be awarded despite the absence of
documentary evidence when (1) the deceased [or
LEC May Be Awarded to Parents of Deceased the injured] was self-employed and earning less
Child Who Had NO History of Earnings than the minimum wage under current labor laws, in
Art. 2206(1) provides that damages for LEC shall be which case, judicial notice may be taken of the fact
assessed and awarded by the court “unless the that in the deceased’s line of work no documentary
deceased on account of permanent physical evidence is available; or (2) the deceased was
disability not caused by the defendant, had no employed as a daily worker earning less than the
earning capacity at the time of his death”. Damages minimum wage under current labor laws.
for LEC may be awarded to a minor’s heirs although
he had no history of earnings because Loss of Profits (Lucrum Cessans)
compensation of this nature is awarded not for loss May be determined by considering the average
of time or earnings but for loss of the deceased’s profit for the preceding years multiplied by the
power or ability to earn money. (Spouses Pereña v. number of years during which the business was
Spouses Zarate, G.R. No. 157917, August 29, affected by the wrongful act or breach
2012)
The income of similar businesses or activities may
How to Compute LEC of Non-Earning Student be considered. (G.A. Machineries, Inc. v.
As a general rule, damages for LEC are computed Yaptinchay, G.R. No. L-30965, 1983)
by applying the following formula:
Damage to Business Standing/ Commercial
Credit
Damages for LEC = 2/3(80-X) multiplied In Radio Communications v. CA, compensatory
by Net Annual Income damages were also awarded for injury to
respondent's "business reputation or business
standing", "loss of goodwill and loss of customers or
o X – the deceased or permanently shippers who shifted their patronage to
incapacitated person’s age at the time of competitors". The grant thereof is proper under the
the accident; and provisions of Article 2205, which provides that
o Net Annual Income – equivalent to a damages may be recovered "for injury to the
person’s Gross Annual Income less plaintiff's business standing or commercial credit."
Necessary and Living Expenses (in the And even if not recoverable compensatory
absence of evidence, it is presumed that damages, they may still be awarded in the concept
Necessary and Living Expenses are equal of temperate or moderate damages.
to half of a person’s Gross Annual Income).
There are cases where from the nature of the case,
The Formula May Be Modified When a Minor definite proof of pecuniary loss cannot be offered,
Who Was Not Yet Earning is Involved: although the court is convinced that there has been
1. “X” may be fixed at 21, instead of the such loss. For instance, injury to one's commercial
person’s age at the time of his death or credit or to the goodwill of the business firm is often
hard to show with certainty in terms of money. The

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judge should be empowered to calculate moderate 4. In case of a clearly unfounded civil action
damages in such cases, rather than that the plaintiff or proceeding against the plaintiff;
should suffer, without redress from the defendant's 5. Where the defendant acted in gross and
wrongful act. (Radio Communications of the evident bad faith in refusing to satisfy the
Philippines, Inc. v. Court of Appeals, G.R. No. L- plaintiff's plainly valid, just and demandable
55194, 1981) claim;
6. In actions for legal support;
Attorney’s Fees 7. In actions for the recovery of wages of
They are actual damages due to the plaintiff and not household helpers, laborers and skilled
to counsel. workers;
8. In actions for indemnity under workmen's
Plaintiff must allege the basis of his claim for compensation and employer's liability laws;
attorney’s fees in the complaint. The basis should 9. In a separate civil action to recover civil
be one of the cases under Art. 2208. liability arising from a crime;
10. When at least double judicial costs are
In its ordinary concept, an attorney’s fee is the awarded. (Art. 2208)
reasonable compensation paid to a lawyer by his
client for the legal services he has rendered to the Interest
latter. The basis of this compensation is the fact of Two types of interest:
his employment by and his agreement with the 1. Monetary Interest; and
client. 2. Compensatory Interest.

In its extraordinary concept, an attorney’s fee is an Monetary Interest

indemnity for damages ordered by the court to be Compensation for the use of money.
paid by the losing party in litigation. The basis of this
is any of the cases provided by law where such Note: The legal rate at the time of perfection of the
award can be made, such as those authorized in obligation will apply. It will not be affected by a
Article 2208, Civil Code, and is payable not to the supervening change in the legal rate of interest.
lawyer but to the client, unless they have agreed that
the award shall pertain to the lawyer as additional Requisites:
compensation or as part thereof. The collection of interest in loans or forbearance of
money is allowed only when these two conditions
Attorney's fees are recoverable not as a matter of concur:
right. It is the import of Article 2208 that the award 1. There was an express stipulation for the
of attorney's fees is an exception and that the payment of interest; and
decision must contain an express finding of fact to 2. The agreement for the payment of the
bring the case within the exception and justify the interest was reduced in writing.
grant of attorney's fees. "Just and equitable" under
paragraph 11, Article 2208, New Civil Code is not a Absent any of these two conditions, the money
matter of feelings, but demonstration. The reason debtor cannot be made liable for interest. Evidence
for the award of attorney's fees must be stated in the must be presented to show that the parties agreed
text of the court's decision, otherwise, if it is stated on the payment of interest.
only in the dispositive portion of the decision, the
same must be disallowed on appeal. (Abrogar v. Compensatory interest
IAC, G.R. No. L-67970 January 15, 1988) It is awarded in the concept of damages for delay in
the performance of an obligation. It is due and
When Attorney’s Fees are Recoverable; demandable from the time demand is first made,
General Rule: In the absence of stipulation, whether judicial or extrajudicial.
attorney's fees and expenses of litigation, other than
judicial costs, cannot be recovered. Note: For compensatory interest, the legal rate of
interest always applies. This means that
Exceptions: compensatory interest is affected by supervening
1. When exemplary damages are awarded; changes in legal rate of interest.
2. When the defendant's act or omission has
compelled the plaintiff to litigate with third
persons or to incur expenses to protect his
interest;
3. In criminal cases of malicious prosecution
against the plaintiff;

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Rules in the Computation of Interest in the with reasonable certainty, the prevailing legal
Concept of Actual or Compensatory Damage interest shall begin to run from the time the
(a) In case of loan or forbearance of money, claim is made extrajudicially or judicially (Art.
goods, credits or judgments, the interest due 1169) until full payment, but when such
should be that which is stipulated by the parties certainty cannot be so reasonably established
in writing, provided that it is not excessive and at the time the demand is made, the interest
unconscionable. which may have been shall begin to run only from the date of the
stipulated in writing: judgment of the trial court (at which time the
1. In the absence of a stipulated reckoning quantification of damages may be deemed to
date, the interest shall be computed from have been reasonably ascertained) until full
default, i.e., from extrajudicial or judicial payment.
demand in accordance with Article 1169 of o The actual base for the computation of the
the Civil Code, UNTIL FULL PAYMENT, interest shall, in any case, be on the
without compounding any interest. principal amount finally adjudged, without
o Unless compounded interest is compounding any interest unless
expressly stipulated by the parties, compounded interest is expressly
by law or regulation. stipulated by law or regulation.
2. Interest due on the principal amount (Lara’s Gifts & Decors, Inc. v. Midtown
accruing as of judicial demand shall industrial Sales, Inc., G.R. No. 225433,
separately earn legal interest at the 2019).
prevailing rate prescribed by the Bangko
Sentral ng Pilipinas, from the time of judicial Note: C.B. Circular No. 799, July 1, 2013, changed
demand until full payment. the rate of interest in the absence of stipulation in
loans or forbearance of money to 6%.
(b) Obligation other than a loan or forbearance
of money, goods, credits or judgments When Actual Damages are Mitigated
1. The rate of interest on the principal amount 1. Contributory negligence;
shall be the prevailing legal interest 2. In contracts, quasi-contracts, and quasi-delict;
prescribed by the Bangko Sentral ng (a) Plaintiff has contravened the terms of
Pilipinas. contract;
2. It shall be computed from extrajudicial or (b) Plaintiff derived some benefit as result of
judicial demand in accordance with Article contract;
1169 of the Civil Code, UNTIL FULL (c) In case where exemplary damages are to
PAYMENT, without compounding any be awarded, that the defendant acted
interest. upon the advice of counsel;
o Unless compounded interest is (d) That the loss would have resulted in any
expressly stipulated by the parties, event; and
by law or regulation. (e) That since the filing of the action, the
3. Interest due on the principal amount defendant has done his best to lessen the
accruing as of judicial demand shall plaintiff's loss or injury.
separately earn legal interest at the
prevailing rate prescribed by the Bangko General Rule: Insofar as actual or compensatory
Sentral ng Pilipinas, from the time of judicial damages are concerned, Article 2199 provides,
demand until full payment. “Except as provided by law or by stipulation, one is
entitled to an adequate compensation only for such
(c) When the obligation, not constituting a loan pecuniary loss suffered by him as he has duly
or forbearance of money, goods, credits or proved. Such compensation is referred to as actual
judgments, is breached, an interest on the or compensatory damages.”
amount of damages awarded may be imposed
in the discretion of the court at the prevailing “Conformably with the foregoing provision, the rule
legal interest prescribed by the Bangko Sentral is long and well settled that there must be pleading
ng Pilipinas, pursuant to Articles 2210 and and proof of actual damages suffered for the
2011 of the Civil Code, which is 6%. same to be recovered.

(d) No interest, however, shall be adjudged on In addition to the fact that the amount of loss must
unliquidated claims or damages until the be capable of proof, it must also be actually proven
demand can be established with with a reasonable degree of certainty, premised
reasonable certainty. Accordingly, where the upon competent proof or the best evidence
amount of the claim or damages is established obtainable.

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The burden of proof of the damage suffered is, Extent or Scope of Actual Damages; In Crimes
consequently, imposed on the party claiming the and Quasi-Delicts
same who should adduce the best evidence 1. Defendant is liable for all damages that are
available in support thereof, like sales and delivery natural and probable consequences of the
receipts, cash and check vouchers and other pieces act complained of; and
of documentary evidence of the same nature. In the 2. Not necessary that damages have been
absence of corroborative evidence, it has been held foreseen or could have been reasonably
that self-serving statements of account are not foreseen.
sufficient basis for an award of actual damages.
2. MORAL DAMAGES
Corollary to the principle that a claim for actual
damages cannot be predicated on flimsy, remote, Concept
speculative, and insubstantial proof, courts are, Includes (PBMF-MWSSS)
likewise, required to state the factual bases of the 1. Physical suffering
award. (Oceaneering Contractors (Phils.), Inc. v. 2. Besmirched reputation
Barreto, G.R. No. 184215, 2011) 3. Mental anguish
4. Fright
Exceptions 5. Moral shock
1. It should be emphasized however that 6. Wounded feelings
uncertainty as to the precise amount is not 7. Social humiliation
necessarily fatal. 8. Serious anxiety
(Talisay-Silay Milling, Inc. v. Associacion de 9. Sentimental value of real or personal
Agricultores de Talisay-Silay, Inc., G.R. No. property may be considered in adjudicating
91852,1995); moral damages. (Art. 2217)

2. Mere difficulty in the assessment of damages is The social and economic/financial standing of the
not sufficient reason for refusing to award offender and the offended party should be taken into
damages where the right to them has been consideration in the computation of moral damages.
established. (Kierulf v. Court of Appeals, G.R. No. 99343, 1997)
(Ball v. Pardy CTJ Construction Co., 63 ALR
139, 108 Conn. 549, 143 A 855); Moral damages is awarded only to enable the
injured party to obtain means, diversions or
3. Proof of Actual loss is also not necessary in amusements that will serve to alleviate the moral
cases where the law or jurisprudence allows the suffering he has undergone, by reason of
award of civil indemnity. As in People v. defendant's culpable action and not intended to
Guanzon, the Court ruled that: Civil indemnity, enrich a complainant at the expense of defendant.
which is actually in the nature of actual or (Mayo v. People, G.R. No. 91201, 1991)
compensatory damages, is mandatory upon the
finding of the fact of rape. When Moral Damages Recoverable
(People v. Alex Condez y Guanzon, G.R. No. 1. Criminal offense resulting in physical
187077, 2011) injuries
2. Quasi-delicts causing physical injuries
Extent or Scope of Actual Damages; In 3. Seduction, abduction, rape or other acts of
Contracts and Quasi-Contracts lasciviousness
1. Damages in Case of Good Faith 4. Adultery and concubinage
(a) Natural and probable consequences of 5. Illegal or arbitrary detention or arrest
breach of obligations; and 6. Illegal search
(b) Parties have foreseen or could have 7. Libel, slander or other form of defamation
reasonably foreseen at the time the 8. Malicious prosecution
obligation was created. 9. Acts mentioned in ART. 309 of the RPC
relating to disrespect of the dead and
2. Damages in Case of Bad Faith interference with funeral
It is sufficient that damages may be reasonably 10. Acts and actions referred to in Arts. 21, 26,
attributed to the non-performance of the 27, 28, 29, 30, 32, 34 and 35. (Art. 2219)
obligation.
Note: Art.2219 is not an exclusive enumeration.

Moral damages may also be awarded in cases of

willful injury to property or breaches of contract

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where the defendant acted fraudulently or in bad Moral damages are mandatory without need of
faith. (Art. 2220) allegation and proof other than the death of the
victim, owing to the fact of the commission of murder
In culpa contractual, only in cases of gross or homicide. (Espineli v. People of the Philippines,
negligence amounting to bad faith or in wanton G.R. No. 179535, 2014)
disregard of his contractual obligation. In a breach
of contract of carriage, moral damages may also be When Moral Damages Awarded Without
recovered in case of death of a passenger. Evidence of Injury
1. Rape cases. It is assumed that the victim
In culpa aquiliana, has suffered moral injuries (People v.
1. when the act or omission causes physical Iroy, G.R. No. 187743, 2010);
injuries; or 2. Murder cases. A violent death
2. when the defendant is guilty of intentional necessarily brings about emotional pain
tort (in this latter case, moral damages may and anguish on the part of the victim’s
be recovered even in loss of or damage to family (People v. Rarugal, G.R. No.
property). 188603, 2013); and
3. Where a broadcast is libelous per se,
In culpa criminal, when the accused is guilty of the law implies moral damages (FBNI v.
physical injuries, lascivious acts, adultery or AMEC, G.R. No. 141994, 2005)
concubinage, illegal or arbitrary detention, illegal
arrest, illegal search, defamation and malicious Note: In Filipinas Broadcasting Network v. AMEC,
prosecution. (Expertravel & Tours, Inc. v. CA, G.R. the Supreme Court held:
No. 130030, June 25, 1999)
A juridical person is generally not entitled to moral
Who May Recover Moral Damages damages because, unlike a natural person, it cannot
1. The parents of the female seduced, experience physical suffering or such sentiments as
abducted, raped, or abused may also wounded feelings, serious anxiety, mental anguish
recover under No. 3; and or moral shock.
2. Spouse, descendants, ascendants and
brothers and sisters for acts mentioned in Nevertheless, AMEC's claim for moral damages
Art. 309 (“Any person who shows falls under item 7 of Article 2219 of the Civil Code.
disrespect to the dead, or wrongfully This provision expressly authorizes the recovery of
interferes with a funeral shall be liable to moral damages in cases of libel, slander or any
the family of the deceased for damages, other form of defamation. Article 2219(7) does not
material and moral.”). qualify whether the plaintiff is a natural or juridical
person. Therefore, a juridical person such as a
Siblings Not Entitled to Moral Damages for corporation can validly complain for libel or any
Death of their Brother / Sister other form of defamation and claim for moral
Article 2206 of the Civil Code entitles the damages. (Filipinas Broadcasting Network v.
descendants, ascendants, illegitimate children, and AMEC, G.R. No. 141994, 2005)
surviving spouse of the deceased passenger to
demand moral damages for mental anguish by 3. NOMINAL DAMAGES
reason of the death of the deceased. The omission
from Article 2206 (3) of the brothers and sisters of Concept
the deceased passenger reveals the legislative Nominal damages are adjudicated in order that a
intent to exclude them from the recovery of moral right of the plaintiff, which has been violated or
damages for mental anguish by reason of the death invaded by the defendant, may be vindicated or
of the deceased. Inclusio unius est exclusio alterius. recognized, and not for the purpose of indemnifying
(Sulpicio Lines, Inc., v. Curso, G.R. No. 157009, the plaintiff for any loss suffered by him.
March 17, 2010)
Elements
General Rule: The plaintiff must allege and prove 1. Plaintiff has a right;
the factual basis for moral damages and its causal 2. Right of plaintiff is violated; and
relation to the defendant’s act 3. Purpose is not to identify but vindicate or
recognize right violated.
Exception: Moral damages may be awarded to the
victim in criminal proceedings without the need for Note: The law presumes damage although actual or
pleading proof of the basis hereof. compensatory damages are not proven. They are
damages in the name only and are allowed simply

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in recognition of a technical injury based on a 6. EXEMPLARY OR CORRECTIVE

violation of a legal right. Nominal damages cannot DAMAGES
coexist with actual or compensatory damages.
Imposed by way of example or correction for the
4. TEMPERATE OR MODERATE public good, in addition to the moral, temperate,
DAMAGES liquidated to compensatory damages. Also called
“Corrective Damage.”
Concept
More than nominal but less than compensatory Note: Exemplary damages cannot be recovered as
where some pecuniary loss has been suffered but a matter of right; the court will decide whether or not
its amount can't be proved with certainty due to the they should be adjudicated.
nature of the case. Also called “Moderate
Damages.” When Recovered

In cases where the resulting injury might be 1. In Criminal Offenses

continuing and possible future complications directly Exemplary damages as a part of the civil liability
arising from the injury, while certain to occur are may be imposed when the crime was committed
difficult to predict, temperate damages can and with one or more aggravating circumstances. Such
should be awarded on top of actual or compensatory damages are separate from fines and shall be paid
damages; in such cases there is no incompatibility to the offended party. party.
between actual and temperate damages.

Requisites: 2. In Quasi-Delicts
1. Some pecuniary loss Exemplary damages may be granted if the
2. Loss is incapable of pecuniary estimation defendant acted with gross negligence.
3. Must be reasonable
3. In Contracts and Quasi-Contracts
General Rule: Actual Damages cannot be The court may award exemplary damages if the
recovered with temperate damages due to the defendant acted in a wanton, fraudulent, Burden of
nature of the said damages. Proof

Exception In case liquidated damages have been agreed

When the injury is chronic or recurring such as in upon, although no proof of loss is necessary in order
loss of earnings. (Ramos v. Court of Appeals, G.R. that such liquidated damages may be recovered,
No. 124354, 1999) nevertheless, before the court may consider the
question of granting exemplary in addition to the
Temperate damages may also be awarded for injury liquidated damages, the plaintiff must show that he
to the plaintiff’s business standing or commercial would be entitled to moral, temperate or
credit if amount is not certain (and thus actual compensatory, damages were it not for the
damages cannot be granted). stipulation for liquidated damages.

5. LIQUIDATED DAMAGES
K. DAMAGES IN CASES OF DEATH
Those agreed upon by the parties to a contract, to
be paid in case of breach thereof. In Crimes and Quasi-Delicts Causing Death
1. Medical & Hospital Bills;
When Liquidated Damages May Be Equitably 2. Civil Indemnity/ Damages for Death under Art.
Reduced 2206 (Automatically awarded);
1. Iniquitous or unconscionable; 3. Loss of earning capacity unless deceased had
2. Partial or irregular performance. permanent physical disability not caused by
defendant so that deceased had no earning
Rules Governing in Case of Breach of Contract capacity at time of death;
Penalty may be imposed by stipulation or agreed 4. Support, if deceased was obliged to give
upon by the parties in case of breach of contract. support (for period not more than 5 years); and
Such penalty is in the nature of liquidated damages. 5. Moral damages.

Note: Civil Indemnity for death is mandatory and a

matter of course, and without need of proof other
than the fact of death as the result of the crime or

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ATENEO CENTRAL
BAR OPERATIONS 2023 CIVIL LAW

quasi-delict, and the fact that the accused was Burden of Defendants
responsible therefor. It is the burden of the defendants to show
satisfactorily not only that the injured party could
Article 2206 only imposes a minimum amount for have mitigated his damages but also the amount
awards of civil indemnity, which is ₱3,000.00. The thereof; failing in this regard, the amount of
law did not provide for a ceiling. Thus, although the damages awarded cannot be proportionately
minimum amount for the award cannot be changed, reduced. (Lim vs. Court of Appeals, G.R. No.
increasing the amount awarded as civil indemnity 125817, 2002).
can be validly modified and increased when the
present circumstance warrants it. (People vs. Mitigation Due to Refusal to Find Work
Jugueta G.R. No. 202124, 2016) Before defendant can take advantage of the failure
of plaintiff to obtain like employment, it must appear:
Death Caused by Breach of Contract by a 1. That it is like employment
Common Carrier 2. That it is in the same locality
1. Indemnity for death; 3. That it is under substantially the same
2. Indemnity for loss of earning capacity; and conditions; and
3. Moral Damages.
4. The wages which he could have earned.

Note: Contributory Negligence also mitigates the

L. DUTY OF INJURED PARTY damages recoverable by the plaintiff. However, in
the Doctrine of Avoidable Consequences, the
Doctrine of Avoidable Consequences negligence of the plaintiff is after the negligence of
The party suffering loss or injury must exercise the the defendant. In Contributory Negligence, the
diligence of a good father of a family to minimize the negligence of the plaintiff is before the negligence of
damages resulting from the act or omission in the defendant.
question. (Art.2203)

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