Anda di halaman 1dari 449

I.

Effect and Application of Laws New Civil Code

A. When law takes effect

After 15 days following the completion of its publication in the Official Gazette, or
in a newspaper of general circulation, unless it is otherwise provided.1

B. Ignorance of the Law

Excuses no one from compliance therewith.2

C. Retroactivity of Laws

Laws shall have no retroactive effect, unless the contrary is provided.3

D. Mandatory or Prohibitory Laws

Acts which are contrary to mandatory or prohibitory laws are void, except
when the law itself authorizes its validity.4

1
Art. 2
This refers to the 15-day period and not to the requirement of publication. (Tanada vs. Tuvera, G.R.No.
L-63915, Dec. 29, 1986)
Administrative rules and regulations must also be published if their purpose is to enforce or
implement existing laws pursuant to a valid delegation. The publication must be in full or it is no
publication at all since its purpose is to inform the public of the contents of the law. (Phil. Intl Trading
Corp. vs .Angeles)
2
Art. 3
Considered a conclusive presumption and applies only to mandatory and prohibitory laws. (Consunji vs.
CA)
Philippine laws are covered. There is no conclusive presumption of knowledge of foreign laws. Even
our courts cannot take judicial notice of them. Ignorance of a foreign law will not be a mistake of law
but a mistake of fact.
Ignorance may either be of law or of fact. Ignorance of fact (ignorantia facti) may excuse a party from
the legal consequences of his conduct; but not ignorance of law, for ignorantia juris neminem excusat.
In specific instances provided by law, mistake as to difficult legal questions has been given the same
effect as a mistake of fact, e.g., Art. 526, par. 3 which provides: "Mistake upon a doubtful or difficult
question of law may be the basis of good faith."
3
Art. 4
4
Art. 5

1
E. Waiver of Rights

Rights may be waived, unless the waiver is contrary to law, public order, public
policy, morals, or good customs, or prejudicial to a third person with a right recognized by
law.5

F. Repeal of Laws

Laws are repealed only by subsequent ones, either expressly or impliedly. Their
violation or non-observance shall not be excused by disuse, custom or practice to the
contrary.

When the courts declared a law to be inconsistent with the Constitution, the former
shall be void and the latter shall govern.

Administrative or executive acts, orders and regulations shall be valid only when
they are not contrary to the laws or the Constitution.6

G. Judicial Decisions

Judicial decisions applying or interpreting the laws or the Constitution shall form a
part of the legal system of the Philippines.7

H. Duty to Render Judgment

No judge or court shall decline to render judgment by reason of the silence,


obscurity or insufficiency of laws.8

5
Art. 6
6
Art. 7
7
Art. 8
Only Supreme Court decisions establish jurisprudence; decisions of other judicial or quasi-judicial
bodies are merely persuasive.
This principle, however, does not mean blind adherence. The duty of the Court is to abandon any
doctrine found to be in violation of the law in force.
8
Art. 9
This article does not apply to criminal prosecutions, bec. when there is no law punishing an act, the
case must be dismissed, however, reprehensible the act may seem to the judge (Tolentino).
If the law is vague or obscure, the court should clarify it in the light of the rules of statutory
construction; it is silent or insufficient, the court should fill the deficiency by resorting to customs or
general principles of law.

2
I. Presumption and Applicability of Custom

In case of doubt in the interpretation or application of laws, it is presumed that the


lawmaking body intended right and justice to prevail.9

Customs which are contrary to law, public order or public policy shall not be
countenanced.10

A custom must be proved as a fact, according to the rules of evidence.11

J. Legal Periods

When the laws speak of years, months, days or nights, it shall be understood that
years are of three hundred sixty-five days each; months, of thirty days; days, of twenty-four
hours; and nights from sunset to sunrise.

If months are designated by their name, they shall be computed by the number of
days which they respectively have.

In computing a period, the first day shall be excluded, and the last day included12

K. Applicability of Penal Laws

Penal laws and those of public security and safety shall be obligatory upon all who
live or sojourn in Philippine territory, subject to the principles of public international law
and to treaty stipulations.13

9
Art. 10
10
Art. 11
11
Art. 12
Custom is defined as "a rule of conduct formed by repetition of acts, uniformly observed (practiced)
as a social rule, legally binding and obligatory." The law requires that "a custom must be proved as a
fact, according to the rules of evidence." On this score the Court had occasion to state that "a local
custom as a source of right cannot be considered by a court of justice unless such custom is properly
established by competent evidence like any other fact." The same evidence, if not one of a higher
degree, should be required of a foreign custom
12
Art. 13
Superseded by Sec. 31, Book I of EO 292 (Administrative Code of 1987) w/c provides that
Sec. 31. Legal Periods.-- "Year" shall be understood to be twelve (12) calendar months; "months" of
thirty (30) days, unless it refers to a specific calendar month in which case it shall be computed
according to the number of days the specific month contains; "day," to a day of twenty four (24) hours;
and "nights," from sunset to sunrise.
This article applies only to legal provisions and not to contracts, where the parties may stipulate on
the manner of computing years, months and days (Baviera).
13
Art. 14

3
L. Conflict of Laws

Laws relating to family rights and duties, or to the status, condition and legal
capacity of persons are binding upon citizens of the Philippines, even though living
abroad.14

Real property as well as personal property is subject to the law of the country
where it is situated.15

However, intestate and testamentary successions, both with respect to the order of
succession and to the amount of successional rights and to the intrinsic validity of
testamentary provisions, shall be regulated by the national law of the person whose
succession is under consideration, whatever may be the nature of the property and
regardless of the country wherein said property may be found.16

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.17

When the acts referred to are executed before the diplomatic or consular officials
of the Republic of the Philippines in a foreign country, the solemnities established by
Philippine laws shall be observed in their execution.18

14
Art. 15
Theories on Personal Law.--
Domiciliary theory, followed in the US, according to w/c the personal laws of a person are determined
by his domicile.
Nationality theory w/c makes nationality or citizenship as the basis for determining the personal laws
of an individual. (Tolentino)
The question of how a citizen may strip himself of the status as such citizen is governed by his
national law.
15 st
Art. 16, 1 par.
The lex situs or lex rei sitae governs real or personal property.
16 nd
id., 2 par.
Can be invoked only when the deceased was vested w/ a descendible interest in prop. w/in the
jurisdiction of the Phils.
The intrinsic validity of the provisions of the will of a foreigner who dies in the Phils. is to be
determined by the laws of his own state or country, and not by those of the Phils. Thus, a condition in a
will of a foreigner that his legatee respect his order that his prop. be distributed according to the laws of
the Phils. instead of the laws of his own country, was held illegal and considered as not written.
The law governing succession may be considered from the point of view of (a) the execution of wills,
and (b) the distribution of property. The formalities of execution of will are generally governed by the
law of the place of execution (Art. 17, par. 1.) But the distribution of the estate is governed by the law
of the nation of the deceased.
17 st
Art. 17, 1 par., known as the lex loci celebrationis
18 nd
id, 2 par.

4
Prohibitive laws concerning persons, their acts or property, and those which have
for their object public order, public policy and good customs shall not be rendered
ineffective by laws or judgments promulgated, or by determinations or conventions agreed
upon in a foreign country.19

In matters which are governed by the Code of Commerce and special laws, their
deficiency shall be supplied by the provisions of the Civil Code.20

19 rd
Id., 3 par.
20
Art. 18

5
II. Human Relations New Civil Code

Every person must, in the exercise of his rights and in the performance of his
duties, act with justice, give everyone his due, and observe honesty and good faith.21

Every person who, contrary to law, wilfully or negligently causes damage to


another, shall indemnify the latter for the same.22

Any person who wilfully causes loss or injury to another in a manner that is
contrary to morals, good customs or public policy shall compensate the latter for the
damage.23

Every person who through an act of performance by another, or any other means,
acquires or comes into possession of something at the expense of the latter without just or
legal ground, shall return the same to him.24

PERSONS

I. Persons and Personality25

A. Capacity to Act

1. Civil Personality26

Juridical capacity, which is the fitness to be the subject of legal relations, is inherent
in every natural person and is lost only through death.

Capacity to act, which is the power to do acts with legal effect, is acquired and may
be lost.27

21
Art. 19
Principle of abuse of rights
22
Art. 20
23
Art. 21
24
Art. 22
25
Civil Code
26
Aptitude of being the subject, active or passive, of rights and obligations
27
Art. 37
Capacity may be (1) juridical capacity, and (2) capacity to act. The union of these 2 forms the full civil
capacity. Juridical capacity is synonymous to legal capacity and to personality. They all refer to the
aptitude for the holding and enjoyment of rights. On the other hand, capacity to act refers to the
aptitude for the exercise of rights, and is often referred to merely as "capacity."

6
2. Restrictions on Capacity to Act

Minority, insanity or imbecility, the state of being a deaf-mute, prodigality and civil
interdiction are mere restrictions on capacity to act, and do not exempt the incapacitated
person from certain obligations, as when the latter arise from his acts or from property
relations, such as easements.28
The following circumstances, among others, modify or limit capacity to act: age,
insanity, imbecility, the state of being a deaf-mute, penalty, prodigality, family relations,
alienage, absence, insolvency and trusteeship. Capacity to act is not limited on account of
religious belief or political opinion.

A married woman, eighteen (18) years of age or over, is qualified for all acts of civil
life, except in cases specified by law.29

3. Birth

Determines personality; but the conceived child shall be considered born for all
purposes that are favorable to it, provided it be born later with certain conditions.30
For civil purposes, the foetus is considered born if it is alive at the time it is
completely delivered from the mother's womb. However, if the foetus had an intrauterine
life of less than seven months, it is not deemed born if it dies within twenty-four hours
after its complete delivery from the maternal womb.31

4. Death

Civil personality is extinguished by death. The effect of death upon the rights and
obligations of the deceased is determined by law, by contract and by will.32

28
Art. 38
29
Art. 39
30
Art. 40
Personality from Birth - Birth means the removal of the foetus from the mother's womb.
Conceived Child.-- The personality of the conceived child has 2 characteristics: (1) it is essentially
limited, bec. it is only for purposes favorable to the child, and (2) it is provisional or conditional, bec. it
depends upon the child being born alive later, such that if it is not born alive, its personality disappears
as if it had never existed.
For civil personality to be acquired, one must be born.-- A foetus is born after it is completely
separated from the mother's womb w/c is produced by the cutting of the umbilical cord; after the
separation, the child now survives by itself.
31
Art. 41
Once birth occurs, personality for favorable purposes retroacts from the moment of conception.--
The retroactivity rule is qualified-- only for purposes favorable to the child.
32
Art. 42
Physical death and legal death are the same. (Balane)

7
a. Compare Art. 43 with Rule 131, Sec. 3 (jj)
presumption of Survivorship

Art. 4333 Rule 131, Sec. 3 (jj)

Two or more persons, called to succeed When two persons perish in the same
each other, shall be presumed to have died calamity34 and it is not shown who died first,
at the same time, subject to the following and there are no particular circumstances
conditions: from which it can be inferred, the
survivorship35 is determined from the
1. parties are heirs to one another probabilities resulting from the strength and
the age of the sexes, according to the
2. no proof as to who died first following rules:

3. with doubt as to who died first 1. If both were under the age of fifteen
years, the older is deemed to have survived;

2. If both were above the age sixty, the


younger is deemed to have survived;

3. If one is under fifteen and the other


above sixty, the former is deemed to have
survived;

4. If both be over fifteen and under sixty,


and the sex be different, the male is deemed
to have survived, if the sex be the same, the
older;

5. If one be under fifteen or over sixty, and


the other between those ages, the latter is
deemed to have survived.

Article 43 applies when the parties are called to succeed each other. But if the
parties are not called to succeed each other, Rule 131, Sec. 3 (jj) of the Rules of Court
applies. Both are to be applied only in the absence of facts.

33
If there is a doubt, as between two or more persons who are called to succeed each other, as to which
of them died first, whoever alleges the death of one prior to the other, shall prove the same; in the
absence of proof, it is presumed that they died at the same time and there shall be no transmission of
rights from one to the other.
34
such as wreck, battle, or conflagration
35
except for purposes of succession

8
5. Juridical Persons

(1) The State and its political subdivisions;

(2) Other corporations, institutions and entities for public interest or purpose,
created by law; their personality begins as soon as they have been constituted according to
law;

(3) Corporations, partnerships and associations for private interest or purpose to


which the law grants a juridical personality, separate and distinct from that of each
shareholder, partner or member.36

Juridical persons mentioned in Nos. 1 and 2 are governed by the laws creating or
recognizing them.

Private corporations are regulated by laws of general application37 on the subject.

Partnerships and associations for private interest or purpose are governed by the
provisions of this Code concerning partnerships.38

Juridical persons may acquire and possess property of all kinds, as well as incur
obligations and bring civil or criminal actions, in conformity with the laws and regulations
of their organization.39

B. Domicile and residence

For the exercise of civil rights and the fulfillment of civil obligations, the domicile
of natural persons is the place of their habitual residence.40

36
Art. 44.
37
B.P. 68
38
Art. 45
39
Art. 46
40
Art. 50.
Requisites of Domicile:
(1) physical presence;
(2) animus manendi (intent to remain) (Gallego v. Vera, 73 P 453.)
Three kinds of Domicile:
(1) Domicile of Origin.-- Domicile of the parents of a person at the time he was born
(2) Domicile of Choice.-- Domicile chosen by a person to change his original domicile. Aside from the
2 requisites mentioned above, a third requisite must be present in domicile of choice, animus non
revertendi (intention not to return to one's old domicile as his permanent place.)
(3) Domicile by Operation of Law.-- e.g., Art. 69, FC.
Domicile is not the same as residence. Domicile is residence plus habituality.
Importance of Understanding Domicile.-- In case of revocation of wills (Art. 829), place of performance
of obligation (Art. 1251, par. 3), renvoi (Aznar v. Garcia)

9
When the law creating or recognizing them, or any other provision does not fix the
domicile of juridical persons, the same shall be understood to be the place where their legal
representation is established or where they exercise their principal functions.41

Domicile Residence

More or less permanent More or less temporary

Denotes a fixed permanent residence, which Used to indicate a place of abode, whether
when absent, one has the intention of permanent or temporary
returning
There can be several places of residence
There can only be one place of domicile
Not domicile
Residence coupled with the intention to
remain for an unlimited time

41
Art. 51.

10
II. Marriage Family Code42

A. Nature of Marriage

A special contract of permanent union between a man and a woman entered into in
accordance with law for the establishment of conjugal and family life. It is the foundation
of the family and an inviolable social institution whose nature, consequences, and incidents
are governed by law and not subject to stipulation, except that marriage settlements may fix
the property relations during the marriage.43

B. Requisites

1. Kinds of Requisites

Essential Formal

(1) Legal capacity of the contracting (1) Authority of the solemnizing officer;
parties;44 and
(2) A valid marriage license;46 and
(2) Consent freely given in the presence of
the solemnizing officer.45 (3) A marriage ceremony47

1. Effect of absence of requisites

The marriage is void ab initio.48

2. Essential requisites
a. Age49

Any male or female of the age of eighteen (18) years or upwards, not under any of
the impediments mentioned in Articles 37 and 38. 50

42
Aug. 3, 1988
43
Art. 1
44
Must be a male and a female
45
Art. 2
46
Except Marriages Exempted from License Requirement, infra
47
The appearance of the contracting parties before the solemnizing officer and their personal
declaration that they take each other as husband and wife in the presence of not less than two
witnesses of legal age (Art. 3)
48
Art. 4, except those solemnized by any person not legally authorized to perform marriages unless
such marriages were contracted with either or both parties believing in good faith that the solemnizing
officer had the legal authority to do so (Art. 35 (2)
49
Art. 5

11
b. Consent

Freely given51 in the presence of the solemnizing officer.

3. Formal

Marriage may be solemnized by:52

(1) Any incumbent member of the judiciary within the court's jurisdiction;
(2) Any priest, rabbi, imam, or minister of any church or religious sect duly
authorized by his church or religious sect and registered with the civil registrar general,
acting within the limits of the written authority granted by his church or religious sect and
provided that at least one of the contracting parties belongs to the solemnizing officer's
church or religious sect;
(3) Any ship captain or airplane chief only in the case mentioned in Article 31;53
(4) Any military commander of a unit to which a chaplain is assigned, in the
absence of the latter, during a military operation, likewise only in the cases mentioned in
Article 32;54
(5) Any consul-general, consul or vice-consul in the case provided in Article 10.55

4. Ceremony

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


required.

It shall be necessary, however, for the contracting parties to appear personally


before the solemnizing officer and declare in the presence of not less than two (2)
witnesses of legal age that they take each other as husband and wife. This declaration shall
be contained in the marriage certificate which shall be signed by the contracting parties and
their witnesses and attested by the solemnizing officer.

50
See Reference
51
The consent is real and not vitiated or rendered defective by any of the vices of consent. Hence, the
marriage may be annulled if the consent of either party was obtained by fraud, (Art. 45, par. 3), or if the
consent of either party was obtained by force, intimidation or undue influence (Art. 45, par. 4).
52
Art. 7
53
infra
54
Ibid.

12
In case of a marriage in articulo mortis, when the party at the point of death is unable
to sign the marriage certificate, it shall be sufficient for one of the witnesses to the marriage
to write the name of said party, which fact shall be attested by the solemnizing officer56

5. Solemnizing authority

The marriage shall be solemnized publicly in the chambers of the judge or in open
court, in the church, chapel or temple, or in the office the consul-general, consul or vice-
consul, and not elsewhere, except in cases of marriages contracted on the point of death or
in remote places in accordance with Article 2957 of this Code, or where both of the parties
request the solemnizing officer in writing in which case the marriage may be solemnized at
a house or place designated by them in a sworn statement to that effect.58
Marriages between Filipino citizens abroad may be solemnized by a consul-general,
consul or vice-consul of the Republic of the Philippines. The issuance of the marriage
license and the duties of the local civil registrar and of the solemnizing officer with regard
to the celebration of marriage shall be performed by said consular official.59

a. Exceptions60

6. License Required

A valid marriage license.61

A marriage license shall be issued by the local civil registrar of the city or
municipality where either contracting party habitually resides, except in marriages where no
license is required.62

The license shall be valid in any part of the Philippines for a period of one hundred
twenty (120) days from the date of issue, and shall be deemed automatically cancelled at the
expiration of the said period if the contracting parties have not made use of it. The expiry
date shall be stamped in bold characters on the face of every license issued.63

56
Art. 6
57
See reference
58
Art. 8; for Art. 7, supra
59
Art. 10
60
Art. 35 (2), infra
61
Art. 3 (2), except Marriages Exempted from License Requirement, supra
62
Art. 9, id.
Where a marriage license is required, each of the contracting parties shall file separately a sworn
application for such license with the proper local civil registrar. which shall specify the following:
(1) Full name of the contracting party;
(2) Place of birth;
(3) Age and date of birth;
(4) Civil status;

13
a. Foreign National

When either or both of the contracting parties are citizens of a foreign country, it
shall be necessary for them before a marriage license can be obtained, to submit a
certificate of legal capacity to contract marriage, issued by their respective diplomatic or
consular officials.

Stateless persons or refugees from other countries shall, in lieu of the certificate of
legal capacity herein required, submit an affidavit stating the circumstances showing such
capacity to contract marriage.64

b. Exceptions

In case either or both of the contracting parties are at the point of death, the
marriage may be solemnized without necessity of a marriage license and shall remain valid
even if the ailing party subsequently survives.65
A marriage in articulo mortis between passengers or crew members may also be
solemnized by a ship captain or by an airplane pilot not only while the ship is at sea or the
plane is in flight, but also during stopovers at ports of call.66
A military commander of a unit, who is a commissioned officer, shall likewise have
authority to solemnize marriages in articulo mortis between persons within the zone of
military operation, whether members of the armed forces or civilians.67
No license shall be necessary for the marriage of a man and a woman who have
lived together as husband and wife for at least five years and without any legal impediment
to marry each other. The contracting parties shall state the foregoing facts in an affidavit
before any person authorized by law to administer oaths. The solemnizing officer shall also

(5) If previously married, how, when and where the previous marriage was dissolved or annulled;
(6) Present residence and citizenship;
(7) Degree of relationship of the contracting parties;
(8) Full name, residence and citizenship of the father;
(9) Full name, residence and citizenship of the mother; and
(10) Full name, residence and citizenship of the guardian or person having charge, in case the
contracting party has neither father nor mother and is under the age of twenty-one years.
The applicants, their parents or guardians shall not be required to exhibit their residence certificates
in any formality in connection with the securing of the marriage license (Art. 11)
63
Art. 20
64
Art. 21
65
Art. 27
66
Art. 31
67
Art. 32

14
state under oath that he ascertained the qualifications of the contracting parties are found
no legal impediment to the marriage68
7. Marriage Certificate

The marriage certificate, in which the parties shall declare that they take each other
as husband and wife, shall also state:

(1) The full name, sex and age of each contracting party;
(2) Their citizenship, religion and habitual residence;
(3) The date and precise time of the celebration of the marriage;
(4) That the proper marriage license has been issued according to law69

(5) That either or both of the contracting parties have secured the parental consent
in appropriate cases;

(6) That either or both of the contracting parties have complied with the legal
requirement regarding parental advice in appropriate cases; and

(7) That the parties have entered into marriage settlement, if any, attaching a copy
70
thereof
C. Effect of Marriage celebrated abroad and foreign divorce71

All marriages solemnized outside the Philippines, in accordance with the laws in
force in the country where they were solemnized, and valid there as such, shall also be valid
in this country, except those prohibited under Articles 35 (1), (4), (5) and (6), 36, 37 and
38.72

Where a marriage between a Filipino citizen and a foreigner is validly celebrated


and a divorce is thereafter validly obtained abroad by the alien spouse capacitating him or
her to remarry, the Filipino spouse shall have capacity to remarry under Philippine law.

68
Art. 34
69
except Marriages Exempted from License Requirement, supra
70
Art. 22
71
Art. 26
72
infra

15
D. Void and Voidable marriages

1. Void Marriages

The judgment of annulment or of absolute nullity of the marriage, the partition and
distribution of the properties of the spouses and the delivery of the children's presumptive
legitimes shall be recorded in the appropriate civil registry and registries of property;
otherwise, the same shall not affect third persons.73

Either of the former spouses may marry again after compliance with the foregoing
requirements; otherwise, the subsequent marriage shall be null and void.74

a. Absence of Requisites

The following marriages shall be void from the beginning:

(1) Contracted by any party below eighteen (18) years of age even with the consent
of parents or guardians;
(2) Solemnized by any person not legally authorized to perform marriages unless
such marriages were contracted with either or both parties believing in good faith that the
solemnizing officer had the legal authority to do so;

(3) Solemnized without license;75


(4) Bigamous or polygamous marriages not failing under Article 41;76

(5) Contracted through mistake of one contracting party as to the identity of the
other; and

(6) Subsequent marriages that are void under Article 53.77

b. Psychological incapacity

A marriage contracted by any party who, at the time of the celebration, was
psychologically incapacitated to comply with the essential marital obligations of marriage,
even if such incapacity becomes manifest only after its solemnization.78

73
Art. 52
74
Art. 53
75
except Marriages Exempted from License Requirement, supra
76
infra
77
Art. 35; Art. 53, infra
78
Art. 36

16
c. Incestous marriages

Whether the relationship between the parties be legitimate or illegitimate:


(1) Between ascendants and descendants of any degree; and
(2) Between brothers and sisters, whether of the full or half blood.79

For reasons of public policy:

(1) Between collateral blood relatives whether legitimate or illegitimate, up to the


fourth civil degree;
(2) Between step-parents and step-children;
(3) Between parents-in-law and children-in-law;
(4) Between the adopting parent and the adopted child;
(5) Between the surviving spouse of the adopting parent and the adopted child;
(6) Between the surviving spouse of the adopted child and the adopter;
(7) Between an adopted child and a legitimate child of the adopter;
(8) Between adopted children of the same adopter; and
(9) Between parties where one, with the intention to marry the other, killed that
other person's spouse, or his or her own spouse.

2. Prescription

The action or defense for the declaration of absolute nullity shall not prescribe.

In case of marriage celebrated before the effectivity of this Code and falling under
Article 36,80 such action or defense shall prescribe in ten (10) years after this Code shall
take effect.81

79
Art. 37
80
supra
81
Art. 39

17
3. Subsequent marriages

The absolute nullity of a previous marriage may be invoked for purposes of


remarriage on the basis solely of a final judgment declaring such previous marriage void.82

A marriage contracted by any person during subsistence of a previous marriage


shall be null and void, unless before the celebration of the subsequent marriage, the prior
spouse had been absent for four consecutive years and the spouse present has a well-
founded belief that the absent spouse was already dead. In case of disappearance where
there is danger of death under the circumstances set forth in the provisions of Article 39183
of the Civil Code, an absence of only two (2) years shall be sufficient.84

For the purpose of contracting the subsequent marriage under the preceding
paragraph, the spouse present must institute a summary proceeding for the declaration of
presumptive death of the absentee, without prejudice to the effect of reappearance of the
absent spouse.

The subsequent marriage referred to shall be automatically terminated by the


recording of the affidavit of reappearance of the absent spouse, unless there is a judgment
annulling the previous marriage or declaring it void ab initio.

A sworn statement of the fact and circumstances of reappearance shall be recorded


in the civil registry of the residence of the parties to the subsequent marriage at the instance
of any interested person, with due notice to the spouses of the subsequent marriage and
without prejudice to the fact of reappearance being judicially determined in case such fact
is disputed.85

Effects of termination of the subsequent marriage:

(1) The children of the subsequent marriage conceived prior to its termination
shall be considered legitimate;

(2) The absolute community of property or the conjugal partnership, as the case
may be, shall be dissolved and liquidated, but if either spouse contracted said marriage in

82
Art. 40
83
The following shall be presumed dead for all purposes, including the division of the estate among the
heirs:
(1) A person on board a vessel lost during a sea voyage, or an aeroplane which is missing, who has not
been heard of for four years since the loss of the vessel or aeroplane;
(2) A person in the armed forces who has taken part in war, and has been missing for four years;
(3) A person who has been in danger of death under other circumstances and his existence has not
been known for four years.
84
Art. 41
85
Art. 42

18
bad faith, his or her share of the net profits of the community property or conjugal
partnership property shall be forfeited in favor of the common children or, if there are
none, the children of the guilty spouse by a previous marriage or in default of children, the
innocent spouse;

(3) Donations by reason of marriage shall remain valid, except that if the donee
contracted the marriage in bad faith, such donations made to said donee are revoked by
operation of law;

(4) The innocent spouse may revoke the designation of the other spouse who
acted in bad faith as beneficiary in any insurance policy, even if such designation be
stipulated as irrevocable; and

(5) The spouse who contracted the subsequent marriage in bad faith shall be
disqualified to inherit from the innocent spouse by testate and intestate succession86

If both spouses of the subsequent marriage acted in bad faith, said marriage shall
be void ab initio and all donations by reason of marriage and testamentary dispositions made
by one in favor of the other are revoked by operation of law.87

4. Annullable marriage

A marriage may be annulled for any of the following causes, existing at the time of
the marriage:

(1) The party in whose behalf it is sought to have the marriage annulled was
eighteen years of age or over but below twenty-one, and the marriage was solemnized
without the consent of the parents, guardian or person having substitute parental authority
over the party, in that order, unless after attaining the age of twenty-one, such party freely
cohabited with the other and both lived together as husband and wife;

(2) Either party was of unsound mind, unless such party after coming to reason,
freely cohabited with the other as husband and wife;

(3) The consent of either party was obtained by fraud, unless such party afterwards,
with full knowledge of the facts constituting the fraud, freely cohabited with the other as
husband and wife;

(4) The consent of either party was obtained by force, intimidation or undue
influence, unless the same having disappeared or ceased, such party thereafter freely
cohabited with the other as husband and wife;

86
Art. 43
87
Art. 44

19
(5) Either party was physically incapable of consummating the marriage with the
other, and such incapacity continues and appears to be incurable; or

(6) Either party was afflicted with a sexually-transmissible disease found to be


serious and appears to be incurable.88
Any of the following circumstances shall constitute fraud referred to in Number 3:

(1) Non-disclosure of a previous conviction by final judgment of the other party of


a crime involving moral turpitude;
(2) Concealment by the wife of the fact that at the time of the marriage, she was
pregnant by a man other than her husband;
(3) Concealment of sexually transmissible disease, regardless of its nature, existing
at the time of the marriage; or
(4) Concealment of drug addiction, habitual alcoholism or homosexuality or
lesbianism existing at the time of the marriage.
No other misrepresentation or deceit as to character, health, rank, fortune or
chastity shall constitute such fraud as will give grounds for action for the annulment of
marriage89

5. Voidable marriages

The action for annulment of marriage must be filed by the following persons and
within the periods indicated:

(1) By the party whose parent or guardian did not give his or her consent, within
five (5) years after attaining the age of twenty-one, or by the parent or guardian or person
having legal charge of the minor, at any time before such party has reached the age of
twenty-one;90
(2) By the sane spouse, who had no knowledge of the other's insanity; or by any
relative or guardian or person having legal charge of the insane, at any time before the
death of either party, or by the insane spouse during a lucid interval or after regaining
sanity;91
(3) By the injured party, within five (5) years after the discovery of the fraud;92

88
Art. 45
89
Art. 46
90
No. 1 of Art. 45, supra
91
No. 2, id.
92
No. 3, id.

20
(4) By the injured party, within five (5) years from the time the force, intimidation
or undue influence disappeared or ceased;93
(5) By the injured party, within five (5) years after the marriage.94

6. Presence of prosecutor

In all cases of annulment or declaration of absolute nullity of marriage, the Court


shall order the prosecuting attorney or fiscal assigned to it to appear on behalf of the State
to take steps to prevent collusion between the parties and to take care that evidence is not
fabricated or suppressed.

No judgment shall be based upon a stipulation of facts or confession of


judgment.95

7. Pendency of action

During the pendency of the action and in the absence of adequate provisions in a
written agreement between the spouses, the Court shall provide for the support of the
spouses and the custody and support of their common children. The Court shall give
paramount consideration to the moral and material welfare of said children and their
choice of the parent with whom they wish to remain. It shall also provide for appropriate
visitation rights of the other parent.96

8. Effects of nullity

The effects provided for by paragraphs (2), (3), (4) and (5) of Article 43 and by
Article 4497 shall also apply in the proper cases to marriages which are declared ab initio or
annulled by final judgment under Articles 40 and 45.98

The final judgment in such cases shall provide for the liquidation, partition and
distribution of the properties of the spouses, the custody and support of the common
children, and the delivery of third presumptive legitimes, unless such matters had been
adjudicated in previous judicial proceedings.

All creditors of the spouses as well as of the absolute community or the conjugal
partnership shall be notified of the proceedings for liquidation.

93
No. 4, id.
94
Nos. 5 & 6, id. (Art. 47)
95
Art. 48
96
Art. 49
97
supra
98
Ibid.

21
In the partition, the conjugal dwelling and the lot on which it is situated, shall be
adjudicated in accordance with the provisions of Articles 102 and 129.99

In said partition, the value of the presumptive legitimes of all common children,
computed as of the date of the final judgment of the trial court, shall be delivered in cash,
property or sound securities, unless the parties, by mutual agreement judicially approved,
had already provided for such matters.

The children or their guardian or the trustee of their property may ask for the
enforcement of the judgment.

The delivery of the presumptive legitimes shall in no way prejudice the ultimate
successional rights of the children accruing upon the death of either of both of the parents;
but the value of the properties already received under the decree of annulment or absolute
nullity shall be considered as advances on their legitime100

The judgment of annulment or of absolute nullity of the marriage, the partition and
distribution of the properties of the spouses and the delivery of the children's presumptive
legitimes shall be recorded in the appropriate civil registry and registries of property;
otherwise, the same shall not affect third persons.101
Either of the former spouses may marry again after compliance with the
requirements of the immediately preceding Article; otherwise, the subsequent marriage
shall be null and void.102

Children conceived or born before the judgment of annulment or absolute nullity


of the marriage under Article 36103 has become final and executory shall be considered
legitimate.

Children conceived or born of the subsequent marriage under Article 53 shall


likewise be legitimate.104

99
Art. 50; for Arts. 102 & 109, see Reference
100
Art. 51
101
Art. 52
102
Art. 53
103
supra
104
Art. 54

22
III. Legal Separation

A. Grounds

(1) Repeated physical violence or grossly abusive conduct directed against the
petitioner, a common child, or a child of the petitioner;
(2) Physical violence or moral pressure to compel the petitioner to change religious
or political affiliation;
(3) Attempt of respondent to corrupt or induce the petitioner, a common child, or
a child of the petitioner, to engage in prostitution, or connivance in such corruption or
inducement;
(4) Final judgment sentencing the respondent to imprisonment of more than six
years, even if pardoned;
(5) Drug addiction or habitual alcoholism of the respondent;
(6) Lesbianism or homosexuality of the respondent;
(7) Contracting by the respondent of a subsequent bigamous marriage, whether in
the Philippines or abroad;
(8) Sexual infidelity or perversion;
(9) Attempt by the respondent against the life of the petitioner; or
(10) Abandonment of petitioner by respondent without justifiable cause for more
than one year.
The term "child" shall include a child by nature or by adoption.105

B. Defenses

(1) The aggrieved party has condoned the offense or act complained of;
(2) The aggrieved party has consented to the commission of the offense or act
complained of;
(3) There is connivance between the parties in the commission of the offense or act
constituting the ground for legal separation;
(4) Both parties have given ground for legal separation;
(5) There is collusion between the parties to obtain decree of legal separation; or

105
Art. 55; see also R. A. 9262, Anti-Violence Against Women and Children

23
(6) The action is barred by prescription106
An action for legal separation shall be filed within five (5) years from the time of
the occurrence of the cause.107

C. Cooling-off Period

An action for legal separation shall in no case be tried before six (6) months shall
have elapsed since the filing of the petition.108

D. Reconciliation efforts

No legal separation may be decreed unless the Court has taken steps toward the
reconciliation of the spouses and is fully satisfied, despite such efforts, that reconciliation is
highly improbable.109

E. Confession of Judgment

No decree of legal separation shall be based upon a stipulation of facts or a


confession of judgment.

In any case, the Court shall order the prosecuting attorney or fiscal assigned to it to
take steps to prevent collusion between the parties and to take care that the evidence is not
fabricated or suppressed.110

F. Effects of Filing Petition

The spouses shall be entitled to live separately from each other.

The court, in the absence of a written agreement between the spouses, shall
designate either of them or a third person to administer the absolute community or
conjugal partnership property. The administrator appointed by the court shall have the
same powers and duties as those of a guardian under the Rules of Court.111

106
Art. 56
107
Art. 57
108
Art. 58
109
Art. 59
110
Art. 60
111
Art. 61

24
G. Effects of pendency

The provisions of Article 49112 shall apply to the support of the spouses and the
custody and support of the common children.113

H. Effects of legal separation

(1) The spouses shall be entitled to live separately from each other, but the
marriage bonds shall not be severed;

(2) The absolute community or the conjugal partnership shall be dissolved and
liquidated but the offending spouse shall have no right to any share of the net profits
earned by the absolute community or the conjugal partnership, which shall be forfeited in
accordance with the provisions of Article 43(2);114

(3) The custody of the minor children shall be awarded to the innocent spouse,
subject to the provisions of Article 213115 of this Code; and

(4) The offending spouse shall be disqualified from inheriting from the innocent
spouse by intestate succession. Moreover, provisions in favor of the offending spouse
made in the will of the innocent spouse shall be revoked by operation of law.

After the finality of the decree of legal separation, the innocent spouse may revoke
the donations made by him or by her in favor of the offending spouse, as well as the
designation of the latter as beneficiary in any insurance policy, even if such designation be
stipulated as irrevocable. The revocation of the donations shall be recorded in the registries
of property in the places where the properties are located. Alienations, liens and
encumbrances registered in good faith before the recording of the complaint for
revocation in the registries of property shall be respected. The revocation of or change in
the designation of the insurance beneficiary shall take effect upon written notification
thereof to the insured

The action to revoke the donation must be brought within five (5) years from the
time the decree of legal separation become final.116

112
supra
113
Art. 62
114
supra
115
See Reference
116
Art. 64

25
I. Reconciliation

If the spouses should reconcile, a corresponding joint manifestation under oath


duly signed by them shall be filed with the court in the same proceeding for legal
separation.117

Consequences:

(1) The legal separation proceedings, if still pending, shall thereby be terminated at
whatever stage; and

(2) The final decree of legal separation shall be set aside, but the separation of
property and any forfeiture of the share of the guilty spouse already effected shall subsist,
unless the spouses agree to revive their former property regime.

The court's order containing the foregoing shall be recorded in the proper civil
registries.118

The agreement to revive the former property regime shall be executed under oath
and shall specify:

(1) The properties to be contributed anew to the restored regime;


(2) Those to be retained as separated properties of each spouse; and
(3) The names of all their known creditors, their addresses and the amounts owing
to each.
The agreement of revival and the motion for its approval shall be filed with the
court in the same proceeding for legal separation, with copies of both furnished to the
creditors named therein. After due hearing, the court shall, in its order, take measure to
protect the interest of creditors and such order shall be recorded in the proper registries of
properties.

The recording of the ordering in the registries of property shall not prejudice any
creditor not listed or not notified, unless the debtor-spouse has sufficient separate
properties to satisfy the creditor's claim.119

117
Art. 65
118
Art. 66
119
Art. 67

26
IV. Rights and Obligations Between Husband and Wife

A. Essential Obligations

The husband and wife are obliged to live together, observe mutual love, respect
and fidelity, and render mutual help and support.120

B. Family domicile

The husband and wife shall fix the family domicile. In case of disagreement, the
court shall decide.

The court may exempt one spouse from living with the other if the latter should
live abroad or there are other valid and compelling reasons for the exemption. However,
such exemption shall not apply if the same is not compatible with the solidarity of the
family.121

C. Support

The spouses are jointly responsible for the support of the family. The expenses for
such support and other conjugal obligations shall be paid from the community property
and, in the absence thereof, from the income or fruits of their separate properties. In case
of insufficiency or absence of said income or fruits, such obligations shall be satisfied from
the separate properties.122

D. Management of household

The right and the duty of both spouses. The expenses for such management shall
be paid in accordance with the provisions of Article 70.123
E. Effect of neglect of duty

The aggrieved party may apply to the court for relief.124

120
Art. 68
121
Art. 69
122
Art. 70
123
Art. 71
124
Art. 72

27
F. Exercise of profession

Either spouse may exercise any legitimate profession, occupation, business or


activity without the consent of the other. The latter may object only on valid, serious, and
moral grounds.

In case of disagreement, the court shall decide whether or not:

(1) The objection is proper, and


(2) Benefit has occurred to the family prior to the objection or thereafter. If the
benefit accrued prior to the objection, the resulting obligation shall be enforced against the
separate property of the spouse who has not obtained consent.

The foregoing provisions shall not prejudice the rights of creditors who acted in
good faith.125

V. Property Relations of the Spouses

A. Marriage Settlements

In order that any modification in the marriage settlements may be valid, it must be
made before the celebration of the marriage, subject to the provisions of Articles 66, 67,126
128, 135 and 136.127

The marriage settlements and any modification thereof shall be in writing, signed
by the parties and executed before the celebration of the marriage. They shall not prejudice
third persons unless they are registered in the local civil registry where the marriage
contract is recorded as well as in the proper registries of properties.128

A minor who according to law may contract marriage may also execute his or her
marriage settlements, but they shall be valid only if the persons designated in Article 14 129
to give consent to the marriage are made parties to the agreement.130

For the validity of any marriage settlement executed by a person upon whom a
sentence of civil interdiction has been pronounced or who is subject to any other disability,

125
Art. 73
126
supra
127
Art. 76; see Reference for Arts. 128, 135-6
128
Art. 77
129
The father, mother, surviving parent or guardian, or persons having legal charge of them, in the order
mentioned.
130
Art. 78

28
it shall be indispensable for the guardian appointed by a competent court to be made a
party thereto131

In the absence of a contrary stipulation in a marriage settlement, the property


relations of the spouses shall be governed by Philippine laws, regardless of the place of the
celebration of the marriage and their residence.132

This rule shall not apply:

(1) Where both spouses are aliens;

(2) With respect to the extrinsic validity of contracts affecting property not situated
in the Philippines and executed in the country where the property is located; and

(3) With respect to the extrinsic validity of contracts entered into in the Philippines
but affecting property situated in a foreign country whose laws require different formalities
for its extrinsic validity.

Everything stipulated in the settlements or contracts referred to in the preceding


articles in consideration of a future marriage, including donations between the prospective
spouses made therein, shall be rendered void if the marriage does not take place. However,
stipulations that do not depend upon the celebration of the marriages shall be valid.133

B. Donations by Reason of Marriage

Those which are made before its celebration, in consideration of the same, and in
favor of one or both of the future spouses.134

These donations are governed by the rules on ordinary donations established in


Title III of Book III of the Civil Code, insofar as they are not modified by the following
articles135

May be revoked by the donor in the following cases:

(1) If the marriage is not celebrated or judicially declared void ab initio except
donations made in the marriage settlements, which shall be governed by Article 81;136

131
Art. 79
132
Art. 80
133
Art. 81
134
Art. 82
135
Art. 83
136
supra

29
(2) When the marriage takes place without the consent of the parents or guardian,
as required by law;

(3) When the marriage is annulled, and the donee acted in bad faith;

(4) Upon legal separation, the donee being the guilty spouse;
(5) If it is with a resolutory condition and the condition is complied with;
(6) When the donee has committed an act of ingratitude as specified by the
provisions of the Civil Code on donations in general137

Donations by reason of marriage shall remain valid, except that if the donee
contracted the marriage in bad faith, such donations made to said donee are revoked by
operation of law;138

The effects provided for by paragraphs (2), (3), (4) and (5) of Article 43139 and by
Article 44140 shall also apply in the proper cases to marriages which are declared ab initio or
annulled by final judgment under Articles 40141 and 45.142

The final judgment in such cases shall provide for the liquidation, partition and
distribution of the properties of the spouses, the custody and support of the common
children, and the delivery of third presumptive legitimes, unless such matters had been
adjudicated in previous judicial proceedings.

All creditors of the spouses as well as of the absolute community or the conjugal
partnership shall be notified of the proceedings for liquidation.
In the partition, the conjugal dwelling and the lot on which it is situated, shall be
adjudicated in accordance with the provisions of Articles 102 and 129.143

C. Void donations by the spouses

Every donation or grant of gratuitous advantage, direct or indirect, between the


spouses during the marriage shall be void, except moderate gifts which the spouses may
give each other on the occasion of any family rejoicing. The prohibition shall also apply to
persons living together as husband and wife without a valid marriage.144

137
Art. 86
138
Art. 43 (3)
139
See (3) Subsequent marriages, supra
140
supra
141
ibid
142
See (4) Annullable marriages, supra
143
Art. 50; see Reference for Arts. 102 & 129
144
Art. 87

30
D. Absolute Community of property

1. General Provisions

The future spouses may, in the marriage settlements, agree upon the regime of
absolute community, conjugal partnership of gains, complete separation of property, or any
other regime. In the absence of a marriage settlement, or when the regime agreed upon is
void, the system of absolute community of property as established in this Code shall
govern145

If the future spouses agree upon a regime other than the absolute community of
property, they cannot donate to each other in their marriage settlements more than one-
fifth of their present property. Any excess shall be considered void.146

Donations of future property shall be governed by the provisions on testamentary


succession and the formalities of wills.

Donations by reason of marriage of property subject to encumbrances shall be


valid. In case of foreclosure of the encumbrance and the property is sold for less than the
total amount of the obligation secured, the donee shall not be liable for the deficiency. If
the property is sold for more than the total amount of said obligation, the donee shall be
entitled to the excess.147

The absolute community of property between spouses shall commence at the


precise moment that the marriage is celebrated. Any stipulation, express or implied, for the
commencement of the community regime at any other time shall be void.148

No waiver of rights, shares and effects of the absolute community of property


during the marriage can be made except in case of judicial separation of property.149

When the waiver takes place upon a judicial separation of property, or after the
marriage has been dissolved or annulled, the same shall appear in a public instrument and
shall be recorded as provided in Article 77.150 The creditors of the spouse who made such
waiver may petition the court to rescind the waiver to the extent of the amount sufficient
to cover the amount of their credits.

145
Art. 75
146
Art. 84
147
Art. 85
148
Art. 88
149
Art. 89
150
See Reference

31
The provisions on co-ownership shall apply to the absolute community of property
between the spouses in all matters not provided for.151

2. What constitutes Community Property

Consist of all the property owned by the spouses at the time of the celebration of
the marriage or acquired thereafter.152

Excluded from the community property:

(1) Property acquired during the marriage by gratuitous title by either spouse, and
the fruits as well as the income thereof, if any, unless it is expressly provided by the donor,
testator or grantor that they shall form part of the community property;

(2) Property for personal and exclusive use of either spouse. However, jewelry shall
form part of the community property;

(3) Property acquired before the marriage by either spouse who has legitimate
descendants by a former marriage, and the fruits as well as the income, if any, of such
property.153

Property acquired during the marriage is presumed to belong to the community,


unless it is proved that it is one of those excluded therefrom.154

3. Charges Upon and Obligations of the Community Property

(1) The support of the spouses, their common children, and legitimate children of
either spouse; however, the support of illegitimate children shall be governed by the
provisions of this Code on Support;

(2) All debts and obligations contracted during the marriage by the designated
administrator-spouse for the benefit of the community, or by both spouses, or by one
spouse with the consent of the other;

(3) Debts and obligations contracted by either spouse without the consent of the
other to the extent that the family may have been benefited;

(4) All taxes, liens, charges and expenses, including major or minor repairs, upon
the community property;

151
Art. 90
152
Art. 91
153
Art. 92
154
Art. 93

32
(5) All taxes and expenses for mere preservation made during marriage upon the
separate property of either spouse used by the family;

(6) Expenses to enable either spouse to commence or complete a professional or


vocational course, or other activity for self-improvement;

(7) Antenuptial debts of either spouse insofar as they have redounded to the
benefit of the family;

(8) The value of what is donated or promised by both spouses in favor of their
common legitimate children for the exclusive purpose of commencing or completing a
professional or vocational course or other activity for self-improvement;

(9) Antenuptial debts of either spouse other than those falling under paragraph (7)
of this Article, the support of illegitimate children of either spouse, and liabilities incurred
by either spouse by reason of a crime or a quasi-delict, in case of absence or insufficiency
of the exclusive property of the debtor-spouse, the payment of which shall be considered
as advances to be deducted from the share of the debtor-spouse upon liquidation of the
community; and

(10) Expenses of litigation between the spouses unless the suit is found to be
groundless.

If the community property is insufficient to cover the foregoing liabilities, except


those falling under paragraph (9), the spouses shall be solidarily liable for the unpaid
balance with their separate properties.155

Whatever may be lost during the marriage in any game of chance, betting,
sweepstakes, or any other kind of gambling, whether permitted or prohibited by law, shall
be borne by the loser and shall not be charged to the community but any winnings
therefrom shall form part of the community property.156

4. Ownership, Administration, Enjoyment and Disposition of


the Community Property

The administration and enjoyment of the community property shall belong to both
spouses jointly. In case of disagreement, the husband's decision shall prevail, subject to
recourse to the court by the wife for proper remedy, which must be availed of within five
years from the date of the contract implementing such decision.

155
Art. 94
156
Art. 95

33
In the event that one spouse is incapacitated or otherwise unable to participate in
the administration of the common properties, the other spouse may assume sole powers of
administration. These powers do not include disposition or encumbrance without authority
of the court or the written consent of the other spouse. In the absence of such authority or
consent, the disposition or encumbrance shall be void. However, the transaction shall be
construed as a continuing offer on the part of the consenting spouse and the third person,
and may be perfected as a binding contract upon the acceptance by the other spouse or
authorization by the court before the offer is withdrawn by either or both offerors.157

Either spouse may dispose by will of his or her interest in the community
property.158

Neither spouse may donate any community property without the consent of the
other. However, either spouse may, without the consent of the other, make moderate
donations from the community property for charity or on occasions of family rejoicing or
family distress.159

5. Dissolution of Community Regime

(1) Upon the death of either spouse;


(2) There is a decree of legal separation;
(3) The marriage is annulled or declared void; or
(4) Judicial separation of property during the marriage under Article 134 to 138.160
The separation in fact between husband and wife shall not affect the regime of
absolute community except that:

(1) The spouse who leaves the conjugal home or refuses to live therein, without just
cause, shall not have the right to be supported;

(2) When the consent of one spouse to any transaction of the other is required by
law, judicial authorization shall be obtained in a summary proceeding;

(3) In the absence of sufficient community property, the separate property of both
spouses shall be solidarily liable for the support of the family. The spouse present shall,
upon proper petition in a summary proceeding, be given judicial authority to administer or
encumber any specific separate property of the other spouse and use the fruits or proceeds
thereof to satisfy the latter's share.161
157
Art. 96
158
Art. 97
159
Art. 98
160
Art. 99; see Reference for Arts. 134-138
161
Art. 100

34
If a spouse without just cause abandons the other or fails to comply with his or her
obligations to the family, the aggrieved spouse may petition the court for receivership, for
judicial separation of property or for authority to be the sole administrator of the absolute
community, subject to such precautionary conditions as the court may impose.

The obligations to the family mentioned in the preceding paragraph refer to


marital, parental or property relations.

A spouse is deemed to have abandoned the other when her or she has left the
conjugal dwelling without intention of returning. The spouse who has left the conjugal
dwelling for a period of three months or has failed within the same period to give any
information as to his or her whereabouts shall be prima facie presumed to have no
intention of returning to the conjugal dwelling. 162

6. Liquidation of the Absolute Community Assets and


Liabilities

Procedure:

(1) An inventory shall be prepared, listing separately all the properties of the
absolute community and the exclusive properties of each spouse.

(2) The debts and obligations of the absolute community shall be paid out of its
assets. In case of insufficiency of said assets, the spouses shall be solidarily liable for the
unpaid balance with their separate properties in accordance with the provisions of the
second paragraph of Article 94.163

(3) Whatever remains of the exclusive properties of the spouses shall thereafter be
delivered to each of them.

(4) The net remainder of the properties of the absolute community shall constitute
its net assets, which shall be divided equally between husband and wife, unless a different
proportion or division was agreed upon in the marriage settlements, or unless there has
been a voluntary waiver of such share provided in this Code. For purpose of computing
the net profits subject to forfeiture in accordance with Articles 43, No. (2) and 63, No.
(2),164 the said profits shall be the increase in value between the market value of the
community property at the time of the celebration of the marriage and the market value at
the time of its dissolution.

162
Art. 101
163
supra
164
ibid

35
(5) The presumptive legitimes of the common children shall be delivered upon
partition, in accordance with Article 51.165

(6) Unless otherwise agreed upon by the parties, in the partition of the properties,
the conjugal dwelling and the lot on which it is situated shall be adjudicated to the spouse
with whom the majority of the common children choose to remain. Children below the age
of seven years are deemed to have chosen the mother, unless the court has decided
otherwise. In case there in no such majority, the court shall decide, taking into
consideration the best interests of said children.166

Upon the termination of the marriage by death, the community property shall be
liquidated in the same proceeding for the settlement of the estate of the deceased.

If no judicial settlement proceeding is instituted, the surviving spouse shall liquidate


the community property either judicially or extra-judicially within six months from the
death of the deceased spouse. If upon the lapse of the six months period, no liquidation is
made, any disposition or encumbrance involving the community property of the
terminated marriage shall be void.

Should the surviving spouse contract a subsequent marriage without compliance


with the foregoing requirements, a mandatory regime of complete separation of property
shall govern the property relations of the subsequent marriage.167

Whenever the liquidation of the community properties of two or more marriages


contracted by the same person before the effectivity of this Code is carried out
simultaneously, the respective capital, fruits and income of each community shall be
determined upon such proof as may be considered according to the rules of evidence. In
case of doubt as to which community the existing properties belong, the same shall be
divided between the different communities in proportion to the capital and duration of
each.168

165
ibid
166
Art. 102
167
Art. 103
168
Art. 104

36
E. Conjugal Partnership of Gains

1. General Provisions

In case the future spouses agree in the marriage settlements that the regime of
conjugal partnership gains shall govern their property relations during marriage, the
provisions in this Chapter shall be of supplementary application.

The provisions shall also apply to conjugal partnerships of gains already established
between spouses before the effectivity of this Code, without prejudice to vested rights
already acquired in accordance with the Civil Code or other laws, as provided in Article
256.169

Under the regime of conjugal partnership of gains, the husband and wife place in a
common fund the proceeds, products, fruits and income from their separate properties and
those acquired by either or both spouses through their efforts or by chance, and, upon
dissolution of the marriage or of the partnership, the net gains or benefits obtained by
either or both spouses shall be divided equally between them, unless otherwise agreed in
the marriage settlements.170

The rules provided in Articles 88 and 89171 shall also apply to conjugal partnership
of gains.172

The conjugal partnership shall be governed by the rules on the contract of


partnership in all that is not in conflict with what is expressly determined in this Chapter or
by the spouses in their marriage settlements.173

2. Exclusive Property of Each Spouse

(1) Brought to the marriage as his or her own;

(2) Each acquires during the marriage by gratuitous title;

(3) Acquired by right of redemption, by barter or by exchange with property


belonging to only one of the spouses; and

(4) Purchased with exclusive money of the wife or of the husband174

169
Art. 105; see Reference for Art. 256
170
Art. 106
171
supra
172
Art. 107
173
Art. 108
174
Art. 109

37
The spouses retain the ownership, possession, administration and enjoyment of
their exclusive properties.

Either spouse may, during the marriage, transfer the administration of his or her
exclusive property to the other by means of a public instrument, which shall be recorded in
the registry of property of the place the property is located.175

A spouse of age may mortgage, encumber, alienate or otherwise dispose of his or


her exclusive property, without the consent of the other spouse, and appear alone in court
to litigate with regard to the same.176

The alienation of any exclusive property of a spouse administered by the other


automatically terminates the administration over such property and the proceeds of the
alienation shall be turned over to the owner-spouse.177

Property donated or left by will to the spouses, jointly and with designation of
determinate shares, shall pertain to the donee-spouses as his or her own exclusive property,
and in the absence of designation, share and share alike, without prejudice to the right of
accretion when proper.178

If the donations are onerous, the amount of the charges shall be borne by the
exclusive property of the donee spouse, whenever they have been advanced by the conjugal
partnership of gains.179

Retirement benefits, pensions, annuities, gratuities, usufructs and similar benefits


shall be governed by the rules on gratuitous or onerous acquisitions as may be proper in
each case.180

175
Art. 110
176
Art. 111
177
Art. 112
178
Art. 113
179
Art. 114
180
Art. 115

38
3. Conjugal Partnership Property

All property acquired during the marriage, whether the acquisition appears to have
been made, contracted or registered in the name of one or both spouses, is presumed to be
conjugal unless the contrary is proved.181

The following are conjugal partnership properties:

(1) Those acquired by onerous title during the marriage at the expense of the
common fund, whether the acquisition be for the partnership, or for only one of the
spouses;

(2) Those obtained from the labor, industry, work or profession of either or both
of the spouses;

(3) The fruits, natural, industrial, or civil, due or received during the marriage from
the common property, as well as the net fruits from the exclusive property of each spouse;
(4) The share of either spouse in the hidden treasure which the law awards to the
finder or owner of the property where the treasure is found;

(5) Those acquired through occupation such as fishing or hunting;

(6) Livestock existing upon the dissolution of the partnership in excess of the
number of each kind brought to the marriage by either spouse; and

(7) Those which are acquired by chance, such as winnings from gambling or
betting. However, losses therefrom shall be borne exclusively by the loser-spouse.182
Property bought on installments paid partly from exclusive funds of either or both
spouses and partly from conjugal funds belongs to the buyer or buyers if full ownership
was vested before the marriage and to the conjugal partnership if such ownership was
vested during the marriage. In either case, any amount advanced by the partnership or by
either or both spouses shall be reimbursed by the owner or owners upon liquidation of the
partnership.183

Whenever an amount or credit payable within a period of time belongs to one of


the spouses, the sums which may be collected during the marriage in partial payments or by
installments on the principal shall be the exclusive property of the spouse. However,
interests falling due during the marriage on the principal shall belong to the conjugal
partnership.184

181
Art. 116
182
Art. 117
183
Art. 118
184
Art. 119

39
The ownership of improvements, whether for utility or adornment, made on the
separate property of the spouses at the expense of the partnership or through the acts or
efforts of either or both spouses shall pertain to the conjugal partnership, or to the original
owner-spouse, subject to the following rules:

When the cost of the improvement made by the conjugal partnership and any
resulting increase in value are more than the value of the property at the time of the
improvement, the entire property of one of the spouses shall belong to the conjugal
partnership, subject to reimbursement of the value of the property of the owner-spouse at
the time of the improvement; otherwise, said property shall be retained in ownership by
the owner-spouse, likewise subject to reimbursement of the cost of the improvement.

In either case, the ownership of the entire property shall be vested upon the
reimbursement, which shall be made at the time of the liquidation of the conjugal
partnership.

4. Charges upon and obligations of the Conjugal Partnership of


Gains

(1) The support of the spouse, their common children, and the legitimate children
of either spouse;

(2) All debts and obligations contracted during the marriage by the designated
administrator-spouse for the benefit of the conjugal partnership of gains, or by both
spouses or by one of them with the consent of the other;

(3) Debts and obligations contracted by either spouse without the consent of the
other to the extent that the family may have benefited;

(4) All taxes, liens, charges, and expenses, including major or minor repairs upon
the conjugal partnership property;

(5) All taxes and expenses for mere preservation made during the marriage upon
the separate property of either spouse;

(6) Expenses to enable either spouse to commence or complete a professional,


vocational, or other activity for self-improvement;

(7) Antenuptial debts of either spouse insofar as they have redounded to the
benefit of the family;

(8) The value of what is donated or promised by both spouses in favor of their
common legitimate children for the exclusive purpose of commencing or completing a
professional or vocational course or other activity for self-improvement; and

40
(9) Expenses of litigation between the spouses unless the suit is found to
groundless.

If the conjugal partnership is insufficient to cover the foregoing liabilities, the


spouses shall be solidarily liable for the unpaid balance with their separate properties.185

The payment of personal debts contracted by the husband or the wife before or
during the marriage shall not be charged to the conjugal properties partnership except
insofar as they redounded to the benefit of the family.

Neither shall the fines and pecuniary indemnities imposed upon them be charged
to the partnership.

However, the payment of personal debts contracted by either spouse before the
marriage, that of fines and indemnities imposed upon them, as well as the support of
illegitimate children of either spouse, may be enforced against the partnership assets after
the responsibilities enumerated in the preceding Article have been covered, if the spouse
who is bound should have no exclusive property or if it should be insufficient; but at the
time of the liquidation of the partnership, such spouse shall be charged for what has been
paid for the purpose above-mentioned.186

Whatever may be lost during the marriage in any game of chance or in betting,
sweepstakes, or any other kind of gambling whether permitted or prohibited by law, shall
be borne by the loser and shall not be charged to the conjugal partnership but any winnings
therefrom shall form part of the conjugal partnership property.187

5. Administration of the of the Conjugal Partnership of Gains

The administration and enjoyment of the conjugal partnership shall belong to both
spouses jointly. In case of disagreement, the husband's decision shall prevail, subject to
recourse to the court by the wife for proper remedy, which must be availed of within five
years from the date of the contract implementing such decision.

In the event that one spouse is incapacitated or otherwise unable to participate in


the administration of the conjugal properties, the other spouse may assume sole powers of
administration. These powers do not include disposition or encumbrance without authority
of the court or the written consent of the other spouse. In the absence of such authority or
consent, the disposition or encumbrance shall be void. However, the transaction shall be
construed as a continuing offer on the part of the consenting spouse and the third person,

185
Art. 121
186
Art. 122
187
Art. 123

41
and may be perfected as a binding contract upon the acceptance by the other spouse or
authorization by the court before the offer is withdrawn by either or both offerors.188

Neither spouse may donate any conjugal partnership property without the consent
of the other. However, either spouse may, without the consent of the other, make
moderate donations from the conjugal partnership property for charity or on occasions of
family rejoicing or family distress.189

6. Dissolution of the regime of Conjugal Partnership of Gains

(1) Upon the death of either spouse;


(2) There is a decree of legal separation;
(3) The marriage is annulled or declared void; or
(4) In case of judicial separation of property during the marriage under Articles 134
to 138.190

The separation in fact between husband and wife shall not affect the regime of
conjugal partnership, except that:

(1) The spouse who leaves the conjugal home or refuses to live therein, without just
cause, shall not have the right to be supported;

(2) When the consent of one spouse to any transaction of the other is required by
law, judicial authorization shall be obtained in a summary proceeding;

(3) In the absence of sufficient conjugal partnership property, the separate property
of both spouses shall be solidarily liable for the support of the family. The spouse present
shall, upon petition in a summary proceeding, be given judicial authority to administer or
encumber any specific separate property of the other spouse and use the fruits or proceeds
thereof to satisfy the latter's share.191

If a spouse without just cause abandons the other or fails to comply with his or her
obligation to the family, the aggrieved spouse may petition the court for receivership, for
judicial separation of property, or for authority to be the sole administrator of the conjugal
partnership property, subject to such precautionary conditions as the court may impose.

The obligations to the family mentioned in the preceding paragraph refer to


marital, parental or property relations.

188
Art. 124
189
Art. 125
190
Art. 126
191
Art. 127

42
A spouse is deemed to have abandoned the other when he or she has left the
conjugal dwelling without intention of returning. The spouse who has left the conjugal
dwelling for a period of three months or has failed within the same period to give any
information as to his or her whereabouts shall be prima facie presumed to have no
intention of returning to the conjugal dwelling.192

7. Liquidation of the Conjugal Partnership Assets and Liabilities

Procedure:

(1) An inventory shall be prepared, listing separately all the properties of the
conjugal partnership and the exclusive properties of each spouse.

(2) Amounts advanced by the conjugal partnership in payment of personal debts


and obligations of either spouse shall be credited to the conjugal partnership as an asset
thereof.

(3) Each spouse shall be reimbursed for the use of his or her exclusive funds in the
acquisition of property or for the value of his or her exclusive property, the ownership of
which has been vested by law in the conjugal partnership.

(4) The debts and obligations of the conjugal partnership shall be paid out of the
conjugal assets. In case of insufficiency of said assets, the spouses shall be solidarily liable
for the unpaid balance with their separate properties, in accordance with the provisions of
paragraph (2) of Article 121.193

(5) Whatever remains of the exclusive properties of the spouses shall thereafter be
delivered to each of them.

(6) Unless the owner had been indemnified from whatever source, the loss or
deterioration of movables used for the benefit of the family, belonging to either spouse,
even due to fortuitous event, shall be paid to said spouse from the conjugal funds, if any.

(7) The net remainder of the conjugal partnership properties shall constitute the
profits, which shall be divided equally between husband and wife, unless a different
proportion or division was agreed upon in the marriage settlements or unless there has
been a voluntary waiver or forfeiture of such share as provided in this Code.

(8) The presumptive legitimes of the common children shall be delivered upon the
partition in accordance with Article 51.194

192
Art. 128
193
supra
194
ibid

43
(9) In the partition of the properties, the conjugal dwelling and the lot on which it
is situated shall, unless otherwise agreed upon by the parties, be adjudicated to the spouse
with whom the majority of the common children choose to remain. Children below the age
of seven years are deemed to have chosen the mother, unless the court has decided
otherwise. In case there is no such majority, the court shall decide, taking into
consideration the best interests of said children.195

Upon the termination of the marriage by death, the conjugal partnership property
shall be liquidated in the same proceeding for the settlement of the estate of the deceased.
If no judicial settlement proceeding is instituted, the surviving spouse shall liquidate
the conjugal partnership property either judicially or extra-judicially within six months from
the death of the deceased spouse. If upon the lapse of the six-month period no liquidation
is made, any disposition or encumbrance involving the conjugal partnership property of the
terminated marriage shall be void.

Should the surviving spouse contract a subsequent marriage without compliance


with the foregoing requirements, a mandatory regime of complete separation of property
shall govern the property relations of the subsequent marriage.196

Whenever the liquidation of the conjugal partnership properties of two or more


marriages contracted by the same person before the effectivity of this Code is carried out
simultaneously, the respective capital, fruits and income of each partnership shall be
determined upon such proof as may be considered according to the rules of evidence. In
case of doubt as to which partnership the existing properties belong, the same shall be
divided between the different partnerships in proportion to the capital and duration of
each.197

The Rules of Court on the administration of estates of deceased persons shall be


observed in the appraisal and sale of property of the conjugal partnership, and other
matters which are not expressly determined in this Chapter.198

From the common mass of property support shall be given to the surviving spouse
and to the children during the liquidation of the inventoried property and until what
belongs to them is delivered; but from this shall be deducted that amount received for
support which exceeds the fruits or rents pertaining to them.199

195
Art. 129
196
Art. 130.
197
Art. 131
198
Art. 132
199
Art. 133

44
F. Separation of Property of the Spouses and Administration of
Common Property by One Spouse During the Marriage

In the absence of an express declaration in the marriage settlements, the separation


of property between spouses during the marriage shall not take place except by judicial
order. Such judicial separation of property may either be voluntary or for sufficient
cause.200

Any of the following shall be considered sufficient cause for judicial separation of
property:

(1) That the spouse of the petitioner has been sentenced to a penalty which carries
with it civil interdiction;

(2) That the spouse of the petitioner has been judicially declared an absentee;

(3) That loss of parental authority of the spouse of petitioner has been decreed by
the court;

(4) That the spouse of the petitioner has abandoned the latter or failed to comply
with his or her obligations to the family as provided for in Article 101;201

(5) That the spouse granted the power of administration in the marriage settlements
has abused that power; and

(6) That at the time of the petition, the spouses have been separated in fact for at
least one year and reconciliation is highly improbable.

In the cases provided for in Numbers (1), (2) and (3), the presentation of the final
judgment against the guilty or absent spouse shall be enough basis for the grant of the
decree of judicial separation of property.202

The spouses may jointly file a verified petition with the court for the voluntary
dissolution of the absolute community or the conjugal partnership of gains, and for the
separation of their common properties.

All creditors of the absolute community or of the conjugal partnership of gains, as


well as the personal creditors of the spouse, shall be listed in the petition and notified of
the filing thereof. The court shall take measures to protect the creditors and other persons
with pecuniary interest.203
200
Art. 134
201
supra
202
Art. 135
203
Art. 136

45
Once the separation of property has been decreed, the absolute community or the
conjugal partnership of gains shall be liquidated in conformity with this Code.

During the pendency of the proceedings for separation of property, the absolute
community or the conjugal partnership shall pay for the support of the spouses and their
children.204

After dissolution of the absolute community or of the conjugal partnership, the


provisions on complete separation of property shall apply.205

The petition for separation of property and the final judgment granting the same
shall be recorded in the proper local civil registries and registries of property.206

The separation of property shall not prejudice the rights previously acquired by
creditors.207
The spouses may, in the same proceedings where separation of property was
decreed, file a motion in court for a decree reviving the property regime that existed
between them before the separation of property in any of the following instances:

(1) When the civil interdiction terminates;

(2) When the absentee spouse reappears;

(3) When the court, being satisfied that the spouse granted the power of
administration in the marriage settlements will not again abuse that power, authorizes the
resumption of said administration;

(4) When the spouse who has left the conjugal home without a decree of legal
separation resumes common life with the other;

(5) When parental authority is judicially restored to the spouse previously deprived
thereof;

(6) When the spouses who have separated in fact for at least one year, reconcile and
resume common life; or

(7) When after voluntary dissolution of the absolute community of property or


conjugal partnership has been judicially decreed upon the joint petition of the spouses, they
agree to the revival of the former property regime. No voluntary separation of property
may thereafter be granted.
204
Art. 137
205
Art. 138
206
Art. 139
207
Art. 140

46
The revival of the former property regime shall be governed by Article 67.208

The administration of all classes of exclusive property of either spouse may be


transferred by the court to the other spouse:

(1) When one spouse becomes the guardian of the other;

(2) When one spouse is judicially declared an absentee;

(3) When one spouse is sentenced to a penalty which carries with it civil
interdiction; or

(4) When one spouse becomes a fugitive from justice or is in hiding as an accused
in a criminal case.

If the other spouse is not qualified by reason of incompetence, conflict of interest,


or any other just cause, the court shall appoint a suitable person to be the administrator.209

G. Regime of Separation of Property

Should the future spouses agree in the marriage settlements that their property
relations during marriage shall be governed by the regime of separation of property, the
provisions of this Chapter shall be suppletory.210

Separation of property may refer to present or future property or both. It may be


total or partial. In the latter case, the property not agreed upon as separate shall pertain to
the absolute community.211

Each spouse shall own, dispose of, possess, administer and enjoy his or her own
separate estate, without need of the consent of the other. To each spouse shall belong all
earnings from his or her profession, business or industry and all fruits, natural, industrial or
civil, due or received during the marriage from his or her separate property.212

Both spouses shall bear the family expenses in proportion to their income, or, in
case of insufficiency or default thereof, to the current market value of their separate
properties.

208
Art. 141.
209
Art. 142.
210
Art. 143
211
Art. 144
212
Art. 145

47
The liabilities of the spouses to creditors for family expenses shall, however, be
solidary.213

H. Property Regime of Unions Without Marriage

When a man and a woman who are capacitated to marry each other, live exclusively
with each other as husband and wife without the benefit of marriage or under a void
marriage, their wages and salaries shall be owned by them in equal shares and the property
acquired by both of them through their work or industry shall be governed by the rules on
co-ownership.

In the absence of proof to the contrary, properties acquired while they lived
together shall be presumed to have been obtained by their joint efforts, work or industry,
and shall be owned by them in equal shares. For purposes of this Article, a party who did
not participate in the acquisition by the other party of any property shall be deemed to
have contributed jointly in the acquisition thereof if the former's efforts consisted in the
care and maintenance of the family and of the household.

Neither party can encumber or dispose by acts inter vivos of his or her share in the
property acquired during cohabitation and owned in common, without the consent of the
other, until after the termination of their cohabitation.

When only one of the parties to a void marriage is in good faith, the share of the
party in bad faith in the co-ownership shall be forfeited in favor of their common children.
In case of default of or waiver by any or all of the common children or their descendants,
each vacant share shall belong to the respective surviving descendants. 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.214

In cases of cohabitation not falling under the preceding Article, only the properties
acquired by both of the parties through their actual joint contribution of money, property,
or industry shall be owned by them in common in proportion to their respective
contributions. In the absence of proof to the contrary, their contributions and
corresponding shares are presumed to be equal. The same rule and presumption shall apply
to joint deposits of money and evidences of credit.

If one of the parties is validly married to another, his or her share in the co-
ownership shall accrue to the absolute community or conjugal partnership existing in such
valid marriage. If the party who acted in bad faith is not validly married to another, his or
her shall be forfeited in the manner provided in the last paragraph of the preceding Article.

213
Art. 146
214
Art. 147

48
The foregoing rules on forfeiture shall likewise apply even if both parties are in
both faith.215

215
Art. 148

49
VI. The Family

A. The Family as an Institution

The family, being the foundation of the nation, is a basic social institution which
public policy cherishes and protects. Consequently, family relations are governed by law
and no custom, practice or agreement destructive of the family shall be recognized or given
effect.216

Family relations include those:

(1) Between husband and wife;


(2) Between parents and children;
(3) Among brothers and sisters, whether of the full or half-blood.217

No suit between members of the same family shall prosper unless it should appear
from the verified complaint or petition that earnest efforts toward a compromise have
been made, but that the same have failed. If it is shown that no such efforts were in fact
made, the same case must be dismissed.

This rules shall not apply to cases which may not be the subject of compromise
under the Civil Code.218

B. The Family Home

The family home, constituted jointly by the husband and the wife or by an
unmarried head of a family, is the dwelling house where they and their family reside, and
the land on which it is situated.219

The family home is deemed constituted on a house and lot from the time it is
occupied as a family residence. From the time of its constitution and so long as any of its
beneficiaries actually resides therein, the family home continues to be such and is exempt

216
Art. 149.
217
Art. 150
218
Art. 151
No compromise upon the following questions shall be valid:
(1) The civil status of persons;
(2) The validity of a marriage or a legal separation;
(3) Any ground for legal separation;
(4) Future support;
(5) The jurisdiction of courts;
(6) Future legitime (Art. 2035)
219
Art. 152

50
from execution, forced sale or attachment except as hereinafter provided and to the extent
of the value allowed by law.220
The beneficiaries of a family home are:

(1) The husband and wife, or an unmarried person who is the head of a family; and

(2) Their parents, ascendants, descendants, brothers and sisters, whether the
relationship be legitimate or illegitimate, who are living in the family home and who depend
upon the head of the family for legal support.221

The family home shall be exempt from execution, forced sale or attachment except:

(1) For nonpayment of taxes;


(2) For debts incurred prior to the constitution of the family home;
(3) For debts secured by mortgages on the premises before or after such
constitution; and
(4) For debts due to laborers, mechanics, architects, builders, materialmen and
others who have rendered service or furnished material for the construction of the
building.222

The family home must be part of the properties of the absolute community or the
conjugal partnership, or of the exclusive properties of either spouse with the latter's
consent. It may also be constituted by an unmarried head of a family on his or her own
property.

Nevertheless, property that is the subject of a conditional sale on installments


where ownership is reserved by the vendor only to guarantee payment of the purchase
price may be constituted as a family home.223

The actual value of the family home shall not exceed, at the time of its constitution,
the amount of the three hundred thousand pesos in urban areas, and two hundred
thousand pesos in rural areas, or such amounts as may hereafter be fixed by law.

In any event, if the value of the currency changes after the adoption of this Code,
the value most favorable for the constitution of a family home shall be the basis of
evaluation.

220
Art. 153
221
Art. 154.
222
Art. 155
223
Art. 156

51
Urban areas are deemed to include chartered cities and municipalities whose annual
income at least equals that legally required for chartered cities. All others are deemed to be
rural areas.224

The family home may be sold, alienated, donated, assigned or encumbered by the
owner or owners thereof with the written consent of the person constituting the same, the
latter's spouse, and a majority of the beneficiaries of legal age. In case of conflict, the court
shall decide.225

The family home shall continue despite the death of one or both spouses or of the
unmarried head of the family for a period of ten years or for as long as there is a minor
beneficiary, and the heirs cannot partition the same unless the court finds compelling
reasons therefor. This rule shall apply regardless of whoever owns the property or
constituted the family home.226

When a creditor whose claims is not among those mentioned in Article 155227
obtains a judgment in his favor, and he has reasonable grounds to believe that the family
home is actually worth more than the maximum amount fixed in Article 157 228, he may
apply to the court which rendered the judgment for an order directing the sale of the
property under execution. The court shall so order if it finds that the actual value of the
family home exceeds the maximum amount allowed by law as of the time of its
constitution. If the increased actual value exceeds the maximum allowed in Article 157 and
results from subsequent voluntary improvements introduced by the person or persons
constituting the family home, by the owner or owners of the property, or by any of the
beneficiaries, the same rule and procedure shall apply.

At the execution sale, no bid below the value allowed for a family home shall be
considered. The proceeds shall be applied first to the amount mentioned in Article 157,
and then to the liabilities under the judgment and the costs. The excess, if any, shall be
delivered to the judgment debtor.229

For purposes of availing of the benefits of a family home, a person may constitute,
or be the beneficiary of, only one family home.230

The provisions in this Chapter shall also govern existing family residences insofar
as said provisions are applicable.231

224
Art. 157
225
Art. 158
226
Art. 159
227
supra
228
ibid
229
Art. 160
230
Art. 161
231
Art. 162

52
VII. Paternity and Filiation

A. Legitimate Children

The filiation of children may be by nature or by adoption. Natural filiation may be


legitimate or illegitimate.232

Children conceived or born during the marriage of the parents are legitimate.

Children conceived as a result of artificial insemination of the wife with the sperm
of the husband or that of a donor or both are likewise legitimate children of the husband
and his wife, provided, that both of them authorized or ratified such insemination in a
written instrument executed and signed by them before the birth of the child. The
instrument shall be recorded in the civil registry together with the birth certificate of the
child.233

Children conceived and born outside a valid marriage are illegitimate, unless
otherwise provided in this Code.234

Legitimacy of a child may be impugned only on the following grounds:

(1) That it was physically impossible for the husband to have sexual intercourse
with his wife within the first 120 days of the 300 days which immediately preceded the
birth of the child because of:

(a) the physical incapacity of the husband to have sexual intercourse with
his wife;

(b) the fact that the husband and wife were living separately in such a way
that sexual intercourse was not possible; or

(c) serious illness of the husband, which absolutely prevented sexual


intercourse;

(2) That it is proved that for biological or other scientific reasons, the child could
not have been that of the husband, except in the instance provided in the second paragraph
of Article 164;235 or

232
Art. 163
233
Art. 164
234
Art. 165
235
supra

53
(3) That in case of children conceived through artificial insemination, the written
authorization or ratification of either parent was obtained through mistake, fraud, violence,
intimidation, or undue influence.236

The child shall be considered legitimate although the mother may have declared
against its legitimacy or may have been sentenced as an adulteress.237

If the marriage is terminated and the mother contracted another marriage within
three hundred days after such termination of the former marriage, these rules shall govern
in the absence of proof to the contrary:

(1) A child born before one hundred eighty days after the solemnization of the
subsequent marriage is considered to have been conceived during the former marriage,
provided it be born within three hundred days after the termination of the former
marriage;

(2) A child born after one hundred eighty days following the celebration of the
subsequent marriage is considered to have been conceived during such marriage, even
though it be born within the three hundred days after the termination of the former
marriage.238
The legitimacy or illegitimacy of a child born after three hundred days following the
termination of the marriage shall be proved by whoever alleges such legitimacy or
illegitimacy.239

The action to impugn the legitimacy of the child shall be brought within one year
from the knowledge of the birth or its recording in the civil register, if the husband or, in a
proper case, any of his heirs, should reside in the city or municipality where the birth took
place or was recorded.

If the husband or, in his default, all of his heirs do not reside at the place of birth as
defined in the first paragraph or where it was recorded, the period shall be two years if they
should reside in the Philippines; and three years if abroad. If the birth of the child has been
concealed from or was unknown to the husband or his heirs, the period shall be counted
from the discovery or knowledge of the birth of the child or of the fact of registration of
said birth, whichever is earlier.240

236
Art. 166
237
Art. 167
238
Art. 168
239
Art. 169.
240
Art. 170

54
The heirs of the husband may impugn the filiation of the child within the period
prescribed in the preceding article only in the following cases:

(1) If the husband should die before the expiration of the period fixed for bringing
his action;

(2) If he should die after the filing of the complaint without having desisted
therefrom; or

(3) If the child was born after the death of the husband.241

B. Proof of Filiation

By any of the following:

(1) The record of birth appearing in the civil register or a final judgment; or
(2) An admission of legitimate filiation in a public document or a private
handwritten instrument and signed by the parent concerned.

In the absence of the foregoing evidence, by:

(1) The open and continuous possession of the status of a legitimate child; or
(2) Any other means allowed by the Rules of Court and special laws.242
The action to claim legitimacy may be brought by the child during his or her
lifetime and shall be transmitted to the heirs should the child die during minority or in a
state of insanity. In these cases, the heirs shall have a period of five years within which to
institute the action.243

Legitimate children shall have the right:

(1) To bear the surnames of the father and the mother, in conformity with the
provisions of the Civil Code on Surnames;

(2) To receive support from their parents, their ascendants, and in proper cases,
their brothers and sisters, in conformity with the provisions of this Code on Support; and

(3) To be entitled to the legitimate and other successional rights granted to them by
the Civil Code.244

241
Art. 171.
242
Art. 172
243
Art. 173
244
Art. 174

55
C. Illegitimate Children

May establish their illegitimate filiation in the same way and on the same evidence
as legitimate children.

The action must be brought within the same period specified in Article 173, 245
except when the action is based on the second paragraph of Article 172,246 in which case
the action may be brought during the lifetime of the alleged parent.247

Illegitimate children shall use the surname and shall be under the parental authority
of their mother, and shall be entitled to support. However, illegitimate children may use the
surname of their father if their filiation has been expressly recognized by the father through
the record of birth appearing in the civil register, or when an admission in a public
document or private handwritten instrument is made by the father. The father has the right
to institute an action before the regular courts to prove non-filiation during his lifetime.
The legitime of each illegitimate child shall consist of one-half (1/2) of the legitime of a
legitimate child.248

D. Legitimated Children

Only children conceived and born outside of wedlock of parents who, at the time
of the conception of the former, were not disqualified by any impediment to marry each
other may be legitimated.249

Legitimation shall take place by a subsequent valid marriage between parents. The
annulment of a voidable marriage shall not affect the legitimation.250

Legitimated children shall enjoy the same rights as legitimate children.251

The effects of legitimation shall retroact to the time of the child's birth.252
The legitimation of children who died before the celebration of the marriage shall
benefit their descendants.253

Legitimation may be impugned only by those who are prejudiced in their rights,
within five years from the time their cause of action accrues.254

245
supra
246
Ibid.
247
Art. 175
248
Art. 176, as amended by R.A. 9255
249
Art. 177
250
Art. 178
251
Art. 179
252
Art. 180
253
Art. 181

56
VIII. Adoption

A. Domestic Adoption Act of 1998255

1. Who can adopt

(a) Any Filipino citizen of legal age, in possession of full civil capacity and legal
rights, of good moral character, has not been convicted of any crime involving moral
turpitude, emotionally and psychologically capable of caring for children, at least sixteen
(16) years older than the adoptee, and who is in a position to support and care for his/her
children in keeping with the means of the family. The requirement of sixteen (16) year
difference between the age of the adopter and adoptee may be waived when the adopter is
the biological parent of the adoptee, or is the spouse of the adoptee's parent;

b) Any alien possessing the same qualifications as above stated for Filipino
nationals: Provided, That his/her country has diplomatic relations with the Republic of the
Philippines, that he/she has been living in the Philippines for at least three (3) continuous
years prior to the filing of the application for adoption and maintains such residence until
the adoption decree is entered, that he/she has been certified by his/her diplomatic or
consular office or any appropriate government agency that he/she has the legal capacity to
adopt in his/her country, and that his/her government allows the adoptee to enter his/her
country as his/her adopted son/daughter: Provided, Further, That the requirements on
residency and certification of the alien's qualification to adopt in his/her country may be
waived for the following:

(i) a former Filipino citizen who seeks to adopt a relative within the fourth
(4th) degree of consanguinity or affinity; or

(ii) one who seeks to adopt the legitimate son/daughter of his/her Filipino
spouse; or
(iii) one who is married to a Filipino citizen and seeks to adopt jointly with
his/her spouse a relative within the fourth (4th) degree of consanguinity or affinity
of the Filipino spouse; or
(c) The guardian with respect to the ward after the termination of the guardianship
and clearance of his/her financial accountabilities.

254
Art. 182
255
R.A. 8552

57
Husband and wife shall jointly adopt, except in the following cases:

(i) if one spouse seeks to adopt the legitimate son/daughter of the other; or

(ii) if one spouse seeks to adopt his/her own illegitimate son/daughter:


Provided, the other spouse has signified his/her consent thereto; or

(iii) if the spouses are legally separated from each other.

In case husband and wife jointly adopt, or one spouse adopts the illegitimate
son/daughter of the other, joint parental authority shall be exercised by the spouses.256

2. Who can be adopted

(a) Any person below eighteen (18) years of age who has been administratively or
judicially declared available for adoption;

(b) The legitimate son/daughter of one spouse by the other spouse;

(c) An illegitimate son/daughter by a qualified adopter to improve his/her status to


that of legitimacy;

(d) A person of legal age if, prior to the adoption, said person has been consistently
considered and treated by the adopter(s) as his/her own child since minority;
(e) A child whose adoption has been previously rescinded; or
(f) A child whose biological or adoptive parent(s) has died: Provided, That no
proceedings shall be initiated within six (6) months from the time of death of said
parent(s).
3. Rights of an adopted child

Except in cases where the biological parent is the spouse of the adopter, all legal
ties between the biological parent(s) and the adoptee shall be severed and the same shall
then be vested on the adopter(s).257

The adoptee shall be considered the legitimate son/daughter of the adopter(s) for
all intents and purposes and as such is entitled to all the rights and obligations provided by
law to legitimate sons/daughters born to them without discrimination of any kind. To this

256
Sec. 7
257
Sec. 16

58
end, the adoptee is entitled to love, guidance, and support in keeping with the means of the
family.258

In legal and intestate succession, the adopter(s) and the adoptee shall have
reciprocal rights of succession without distinction from legitimate filiation. However, if the
adoptee and his/her biological parent(s) had left a will, the law on testamentary succession
shall govern.

Adoption shall have the following effects:

(1) For civil purposes, the adopted shall be deemed to be a legitimate child of the
adopters and both shall acquire the reciprocal rights and obligations arising from the
relationship of parent and child, including the right of the adopted to use the surname of
the adopters;

(2) The parental authority of the parents by nature over the adopted shall terminate
and be vested in the adopters, except that if the adopter is the spouse of the parent by
nature of the adopted, parental authority over the adopted shall be exercised jointly by both
spouses; and

(3) The adopted shall remain an intestate heir of his parents and other blood
relatives.259

Legal or intestate succession to the estate of the adopted shall be governed by the
following rules:

(1) Legitimate and illegitimate children and descendants and the surviving spouse
of the adopted shall inherit from the adopted, in accordance with the ordinary rules of legal
or intestate succession;

(2) When the parents, legitimate or illegitimate, or the legitimate ascendants of the
adopted concur with the adopter, they shall divide the entire estate, one-half to be inherited
by the parents or ascendants and the other half, by the adopters;

(3) When the surviving spouse or the illegitimate children of the adopted concur
with the adopters, they shall divide the entire estate in equal shares, one-half to be inherited
by the spouse or the illegitimate children of the adopted and the other half, by the
adopters.
(4) When the adopters concur with the illegitimate children and the surviving
spouse of the adopted, they shall divide the entire estate in equal shares, one-third to be

258
Sec. 17
259
Art. 189, FC

59
inherited by the illegitimate children, one-third by the surviving spouse, and one-third by
the adopters;

(5) When only the adopters survive, they shall inherit the entire estate; and

(6) When only collateral blood relatives of the adopted survive, then the ordinary
rules of legal or intestate succession shall apply.260

4. Rescission of adoption

Upon petition of the adoptee, with the assistance of the Department if a minor or
if over eighteen (18) years of age but is incapacitated, as guardian/counsel, the adoption
may be rescinded on any of the following grounds committed by the adopter(s):
(a) repeated physical and verbal maltreatment by the adopter(s) despite
having undergone counseling;
(b) attempt on the life of the adoptee;
(c) sexual assault or violence; or (d) abandonment and failure to comply
with parental obligations.
Adoption, being in the best interest of the child, shall not be subject to rescission
by the adopter(s). However, the adopter(s) may disinherit the adoptee for causes provided
in Article 919261 of the Civil Code.262
If the petition is granted, the parental authority of the adoptee's biological parent(s),
if known, or the legal custody of the Department shall be restored if the adoptee is still a
minor or incapacitated. The reciprocal rights and obligations of the adopter(s) and the
adoptee to each other shall be extinguished.

The court shall order the Civil Registrar to cancel the amended certificate of birth
of the adoptee and restore his/her original birth certificate.

Succession rights shall revert to its status prior to adoption, but only as of the date
of judgment of judicial rescission. Vested rights acquired prior to judicial rescission shall be
respected.

All the foregoing effects of rescission of adoption shall be without prejudice to the
penalties imposable under the Penal Code if the criminal acts are properly proven.263

260
Art. 190, id.
261
See Reference
262
Sec. 19, R.A. 8552
263
Sec. 20, id.

60
C. Inter- Country Adoption Act of 1995264

1. Who can Adopt

An alien or a Filipino citizen permanently residing abroad may file an application


for inter-country adoption of a Filipino child if he/she:

(a) is at least twenty-seven (27) years of age and at least sixteen (16) years older than
the child to be adopted, at the time of application unless the adopter is the parent by nature
of the child to be adopted or the spouse of such parent:

(b) if married, his/her spouse must jointly file for the adoption;

(c) has the capacity to act and assume all rights and responsibilities of parental
authority under his national laws, and has undergone the appropriate counseling from an
accredited counselor in his/her country;

(d) has not been convicted of a crime involving moral turpitude;

(e) is eligible to adopt under his/her national law;

(f) is in a position to provide the proper care and support and to give the necessary
moral values and example to all his children, including the child to be adopted;

(g) agrees to uphold the basic rights of the child as embodied under Philippine
laws, the U.N. Convention on the Rights of the Child, and to abide by the rules and
regulations issued to implement the provisions of this Act;

(h) comes from a country with whom the Philippines has diplomatic relations and
whose government maintains a similarly authorized and accredited agency and that
adoption is allowed under his/her national laws; and

(i) possesses all the qualifications and none of the disqualifications provided herein
and in other applicable Philippine laws.265

264
R.A. 8043
265
Sec. 9

61
2. Who can be adopted

Only a legally free child may be the subject of inter-country adoption. In order that
such child may be considered for placement, the following documents must be submitted
to the Board:

(a) Child study;


(b) Birth certificate/foundling certificate;
(c) Deed of voluntary commitment/decree of abandonment/death certificate of
parents;
(d) Medical evaluation /history;
(e) Psychological evaluation, as necessary; and
(f) Recent photo of the child.266

IX. Support

A. What it Comprises

Everything indispensable for sustenance, dwelling, clothing, medical attendance,


education and transportation, in keeping with the financial capacity of the family.

The education of the person entitled to be supported referred to in the preceding


paragraph shall include his schooling or training for some profession, trade or vocation,
even beyond the age of majority. Transportation shall include expenses in going to and
from school, or to and from place of work.267

B. Who are Obliged

(1) The spouses;


(2) Legitimate ascendants and descendants;
(3) Parents and their legitimate children and the legitimate and illegitimate children
of the latter;
(4) Parents and their illegitimate children and the legitimate and illegitimate children
of the latter; and
(5) Legitimate brothers and sisters, whether of full or half-blood268

266
Sec. 8
267
Art. 194
268
Art. 195

62
Brothers and sisters not legitimately related, whether of the full or half-blood, are
likewise bound to support each other to the full extent set forth in Article 194269, except
only when the need for support of the brother or sister, being of age, is due to a cause
imputable to the claimant's fault or negligence.270

In case of legitimate ascendants; descendants, whether legitimate or illegitimate; and


brothers and sisters, whether legitimately or illegitimately related, only the separate property
of the person obliged to give support shall be answerable provided that in case the obligor
has no separate property, the absolute community or the conjugal partnership, if financially
capable, shall advance the support, which shall be deducted from the share of the spouse
obliged upon the liquidation of the absolute community or of the conjugal partnership.271
Whenever two or more persons are obliged to give support, the liability shall
devolve upon the following persons in the order herein provided:
(1) The spouse;
(2) The descendants in the nearest degree;
(3) The ascendants in the nearest degree; and
(4) The brothers and sisters.272
When the obligation to give support falls upon two or more persons, the payment
of the same shall be divided between them in proportion to the resources of each.
However, in case of urgent need and by special circumstances, the judge may order
only one of them to furnish the support provisionally, without prejudice to his right to
claim from the other obligors the share due from them.
When two or more recipients at the same time claim support from one and the
same person legally obliged to give it, should the latter not have sufficient means to satisfy
all claims, the order established in the preceding article shall be followed, unless the
concurrent obligees should be the spouse and a child subject to parental authority, in which
case the child shall be preferred.273
When, without the knowledge of the person obliged to give support, it is given by a
stranger, the latter shall have a right to claim the same from the former, unless it appears
that he gave it without intention of being reimbursed.274

269
supra
270
Art. 196
271
Art. 197
272
Art. 199
273
Art. 200
274
Art. 206

63
When the person obliged to support another unjustly refuses or fails to give
support when urgently needed by the latter, any third person may furnish support to the
needy individual, with right of reimbursement from the person obliged to give support.
This shall particularly apply when the father or mother of a child under the age of majority
unjustly refuses to support or fails to give support to the child when urgently needed.275
In case of contractual support or that given by will, the excess in amount beyond
that required for legal support shall be subject to levy on attachment or execution.

Furthermore, contractual support shall be subject to adjustment whenever


modification is necessary due to changes of circumstances manifestly beyond the
contemplation of the parties.276

C. Support during marriage litigation

The spouses and their children shall be supported from the properties of the
absolute community or the conjugal partnership. After the final judgment granting the
petition, the obligation of mutual support between the spouses ceases. However, in case of
legal separation, the court may order that the guilty spouse shall give support to the
innocent one, specifying the terms of such order.277

D. Amount

Shall be in proportion to the resources or means of the giver and to the necessities
of the recipient.278

Support shall be reduced or increased proportionately, according to the reduction


or increase of the necessities of the recipient and the resources or means of the person
obliged to furnish the same.279

E. When Demandable

From the time the person who has a right to receive the same needs it for
maintenance, but it shall not be paid except from the date of judicial or extrajudicial
demand.

Support pendente lite may be claimed in accordance with the Rules of Court.

275
Art. 207
276
Art. 208
277
Art. 198
278
Art. 201.
279
Art. 202

64
Payment shall be made within the first five (5) days of each corresponding month
or when the recipient dies, his heirs shall not be obliged to return what he has received in
advance.280

F. Options

The person obliged to give support shall have the option to fulfill the obligation
either by paying the allowance fixed, or by receiving and maintaining in the family dwelling
the person who has a right to receive support. The latter alternative cannot be availed of in
case there is a moral or legal obstacle thereto.281

G. Attachment

The right to receive support as well as any money or property obtained as such
support shall not be levied upon on attachment or execution.282

X. Parental Authority

A. General Provisions

Pursuant to the natural right and duty of parents over the person and property of
their unemancipated children, parental authority and responsibility shall include the caring
for and rearing them for civic consciousness and efficiency and the development of their
moral, mental and physical character and well-being.283

Parental authority and responsibility may not be renounced or transferred except in


the cases authorized by law.284

The father and the mother shall jointly exercise parental authority over the persons
of their common children. In case of disagreement, the father's decision shall prevail,
unless there is a judicial order to the contrary.

Children shall always observe respect and reverence towards their parents and are
obliged to obey them as long as the children are under parental authority.285

In case of absence or death of either parent, the parent present shall continue
exercising parental authority. The remarriage of the surviving parent shall not affect the

280
Art. 203
281
Art. 204
282
Art. 205
283
Art. 209
284
Art. 210
285
Art. 211

65
parental authority over the children, unless the court appoints another person to be the
guardian of the person or property of the children.286

In case of separation of the parents, parental authority shall be exercised by the


parent designated by the Court. The Court shall take into account all relevant
considerations, especially the choice of the child over seven years of age, unless the parent
chosen is unfit.287

In case of death, absence or unsuitability of the parents, substitute parental


authority shall be exercised by the surviving grandparent. In case several survive, the one
designated by the court, taking into account the same consideration mentioned in the
preceding article, shall exercise the authority.288

No descendant shall be compelled, in a criminal case, to testify against his parents


and grandparents, except when such testimony is indispensable in a crime against the
descendant or by one parent against the other.289

B. Substitute and Special Parental Authority

The following persons shall exercise substitute parental authority over the child in
the order indicated:

(1) The surviving grandparent, as provided in Art. 214;290


(2) The oldest brother or sister, over twenty-one years of age, unless unfit or
disqualified; and
(3) The child's actual custodian, over twenty-one years of age, unless unfit or
disqualified.
Whenever the appointment or a judicial guardian over the property of the child
becomes necessary, the same order of preference shall be observed.291

In case of foundlings, abandoned neglected or abused children and other children


similarly situated, parental authority shall be entrusted in summary judicial proceedings to
heads of children's homes, orphanages and similar institutions duly accredited by the
proper government agency.292

286
Art. 212
287
Art. 213.
288
Art. 214
289
Art. 215
290
supra
291
Art. 216
292
Art. 217

66
The school, its administrators and teachers, or the individual, entity or institution
engaged in child are shall have special parental authority and responsibility over the minor
child while under their supervision, instruction or custody.

Authority and responsibility shall apply to all authorized activities whether inside or
outside the premises of the school, entity or institution.293

Those given the authority and responsibility under the preceding Article shall be
principally and solidarily liable for damages caused by the acts or omissions of the
unemancipated minor. The parents, judicial guardians or the persons exercising substitute
parental authority over said minor shall be subsidiarily liable.

The respective liabilities of those referred to in the preceding paragraph shall not
apply if it is proved that they exercised the proper diligence required under the particular
circumstances.

All other cases not covered by this and the preceding articles shall be governed by
the provisions of the Civil Code on quasi-delicts.294

C. Effect of Parental Authority upon the Persons of the Children

The parents and those exercising parental authority shall have with the respect to
their unemancipated children on wards the following rights and duties:

(1) To keep them in their company, to support, educate and instruct them by right
precept and good example, and to provide for their upbringing in keeping with their
means;

(2) To give them love and affection, advice and counsel, companionship and
understanding;

(3) To provide them with moral and spiritual guidance, inculcate in them honesty,
integrity, self-discipline, self-reliance, industry and thrift, stimulate their interest in civic
affairs, and inspire in them compliance with the duties of citizenship;

(4) To furnish them with good and wholesome educational materials, supervise
their activities, recreation and association with others, protect them from bad company,
and prevent them from acquiring habits detrimental to their health, studies and morals;

(5) To represent them in all matters affecting their interests;

293
Art. 218
294
Art. 219

67
(6) To demand from them respect and obedience;

(7) To impose discipline on them as may be required under the circumstances; and

(8) To perform such other duties as are imposed by law upon parents and
guardians.295

Parents and other persons exercising parental authority shall be civilly liable for the
injuries and damages caused by the acts or omissions of their unemancipated children
living in their company and under their parental authority subject to the appropriate
defenses provided by law.296

The courts may appoint a guardian of the child's property or a guardian ad litem
when the best interests of the child so requires.297

The parents or, in their absence or incapacity, the individual, entity or institution
exercising parental authority, may petition the proper court of the place where the child
resides, for an order providing for disciplinary measures over the child. The child shall be
entitled to the assistance of counsel, either of his choice or appointed by the court, and a
summary hearing shall be conducted wherein the petitioner and the child shall be heard.

However, if in the same proceeding the court finds the petitioner at fault,
irrespective of the merits of the petition, or when the circumstances so warrant, the court
may also order the deprivation or suspension of parental authority or adopt such other
measures as it may deem just and proper.298

The measures referred to in the preceding article may include the commitment of
the child for not more than thirty days in entities or institutions engaged in child care or in
children's homes duly accredited by the proper government agency.

The parent exercising parental authority shall not interfere with the care of the
child whenever committed but shall provide for his support. Upon proper petition or at its
own instance, the court may terminate the commitment of the child whenever just and
proper.299

295
Art. 220
296
Art. 221
297
Art. 222
298
Art. 223
299
Art. 224

68
D. Effects of Parental Authority upon the Property of the Children

The father and the mother shall jointly exercise legal guardianship over the
property of the unemancipated common child without the necessity of a court
appointment. In case of disagreement, the father's decision shall prevail, unless there is a
judicial order to the contrary.

Where the market value of the property or the annual income of the child exceeds
P50,000, the parent concerned shall be required to furnish a bond in such amount as the
court may determine, but not less than ten per centum (10%) of the value of the property
or annual income, to guarantee the performance of the obligations prescribed for general
guardians.

A verified petition for approval of the bond shall be filed in the proper court of the
place where the child resides, or, if the child resides in a foreign country, in the proper
court of the place where the property or any part thereof is situated.

The petition shall be docketed as a summary special proceeding in which all


incidents and issues regarding the performance of the obligations referred to in the second
paragraph of this Article shall be heard and resolved.

The ordinary rules on guardianship shall be merely suppletory except when the
child is under substitute parental authority, or the guardian is a stranger, or a parent has
remarried, in which case the ordinary rules on guardianship shall apply.300

The property of the unemancipated child earned or acquired with his work or
industry or by onerous or gratuitous title shall belong to the child in ownership and shall be
devoted exclusively to the latter's support and education, unless the title or transfer
provides otherwise.

The right of the parents over the fruits and income of the child's property shall be
limited primarily to the child's support and secondarily to the collective daily needs of the
family.301

If the parents entrust the management or administration of any of their properties


to an unemancipated child, the net proceeds of such property shall belong to the owner.
The child shall be given a reasonable monthly allowance in an amount not less than that
which the owner would have paid if the administrator were a stranger, unless the owner,
grants the entire proceeds to the child. In any case, the proceeds thus give in whole or in
part shall not be charged to the child's legitime.302

300
Art. 225
301
Art. 226
302
Art. 227

69
E. Suspension or Termination of Parental Authority

Parental authority terminates permanently:

(1) Upon the death of the parents;


(2) Upon the death of the child; or
(3) Upon emancipation of the child.303

Parental authority also terminates:304

(1) Upon adoption of the child;


(2) Upon appointment of a general guardian;
(3) Upon judicial declaration of abandonment of the child in a case filed for the
purpose;
(4) Upon final judgment of a competent court divesting the party concerned of
parental authority; or

(5) Upon judicial declaration of absence or incapacity of the person exercising


parental authority.305

Parental authority is suspended upon conviction of the parent or the person


exercising the same of a crime which carries with it the penalty of civil interdiction. The
authority is automatically reinstated upon service of the penalty or upon pardon or amnesty
of the offender.306

The court in an action filed for the purpose in a related case may also suspend
parental authority if the parent or the person exercising the same:

(1) Treats the child with excessive harshness or cruelty;


(2) Gives the child corrupting orders, counsel or example;
(3) Compels the child to beg; or
(4) Subjects the child or allows him to be subjected to acts of lasciviousness.
The grounds enumerated above are deemed to include cases which have resulted
from culpable negligence of the parent or the person exercising parental authority.

303
Art. 228
304
unless subsequently revived by a final judgment
305
Art. 229
306
Art. 230

70
If the degree of seriousness so warrants, or the welfare of the child so demands, the
court shall deprive the guilty party of parental authority or adopt such other measures as
may be proper under the circumstances.

The suspension or deprivation may be revoked and the parental authority revived
in a case filed for the purpose or in the same proceeding if the court finds that the cause
therefor has ceased and will not be repeated.307

If the person exercising parental authority has subjected the child or allowed him to
be subjected to sexual abuse, such person shall be permanently deprived by the court of
such authority.308

The person exercising substitute parental authority shall have the same authority
over the person of the child as the parents.

In no case shall the school administrator, teacher of individual engaged in child care
exercising special parental authority inflict corporal punishment upon the child.309

XI. Emancipation

Emancipation takes place by the attainment of majority.310

Emancipation also takes place:

(1) By the marriage of the minor; or

(2) By the recording in the Civil Register of an agreement in a public instrument


executed by the parent exercising parental authority and the minor at least eighteen years of
age. Such emancipation shall be irrevocable.311

Emancipation for any cause shall terminate parental authority over the person and
property of the child who shall then be qualified and responsible for all acts of civil life.312

307
Art. 231
308
Art. 232
309
Art. 233
310
Unless otherwise provided, majority commences at the age of twenty-one years.
311
Art. 234, as amended by R.A. 6809
312
Art. 236

71
XII. Summary Judicial Proceedings in Family Law Cases

The procedural rules provided for shall apply as regards separation in fact between
husband and wife, abandonment by one of the other, and incidents involving parental
authority.313

When a husband and wife are separated in fact, or one has abandoned the other
and one of them seeks judicial authorization for a transaction where the consent of the
other spouse is required by law but such consent is withheld or cannot be obtained, a
verified petition may be filed in court alleging the foregoing facts.

The petition shall attach the proposed deed, if any, embodying the transaction, and,
if none, shall describe in detail the said transaction and state the reason why the required
consent thereto cannot be secured. In any case, the final deed duly executed by the parties
shall be submitted to and approved by the court.314

Claims for damages by either spouse, except costs of the proceedings, may be
litigated only in a separate action.315

Jurisdiction over the petition shall, upon proof of notice to the other spouse, be
exercised by the proper court authorized to hear family cases, if one exists, or in the
regional trial court or its equivalent sitting in the place where either of the spouses
resides.316

Upon the filing of the petition, the court shall notify the other spouse, whose
consent to the transaction is required, of said petition, ordering said spouse to show cause
why the petition should not be granted, on or before the date set in said notice for the
initial conference. The notice shall be accompanied by a copy of the petition and shall be
served at the last known address of the spouse concerned.317

A preliminary conference shall be conducted by the judge personally without the


parties being assisted by counsel. After the initial conference, if the court deems it useful,
the parties may be assisted by counsel at the succeeding conferences and hearings.318

In case of non-appearance of the spouse whose consent is sought, the court shall
inquire into the reasons for his failure to appear, and shall require such appearance, if
possible.319

313
Art. 238
314
Art. 239
315
Art. 240
316
Art. 241
317
Art. 242
318
Art. 243.
319
Art. 244

72
If, despite all efforts, the attendance of the non-consenting spouse is not secured,
the court may proceed ex parte and render judgment as the facts and circumstances may
warrant. In any case, the judge shall endeavor to protect the interests of the non-appearing
spouse.320

If the petition is not resolved at the initial conference, said petition shall be decided
in a summary hearing on the basis of affidavits, documentary evidence or oral testimonies
at the sound discretion of the court. If testimony is needed, the court shall specify the
witnesses to be heard and the subject-matter of their testimonies, directing the parties to
present said witnesses.321

The judgment of the court shall be immediately final and executor.322

The petition for judicial authority to administer or encumber specific separate


property of the abandoning spouse and to use the fruits or proceeds thereof for the
support of the family shall also be governed by these rules.323

Petitions filed under Articles 223, 225 and 235324 of this Code involving parental
authority shall be verified.325

Such petitions shall be verified and filed in the proper court of the place where the
child resides.326

Upon the filing of the petition, the court shall notify the parents or, in their absence
or incapacity, the individuals, entities or institutions exercising parental authority over the
child.327

The rules in Chapter 2328 hereof shall also govern summary proceedings under this
Chapter insofar as they are applicable.329

320
Art. 245
321
Art. 246
322
Art. 247
323
Art. 248
324
supra
325
Art. 249
326
Art. 250
327
Art. 251
328
Separation in Fact
329
Art. 252

73
XIII. Retroactivity of the Family Code

Insofar as it does not prejudice or impair vested or acquired rights in accordance


with the Civil Code or other laws.330

XIV. Funerals

The duty and the right to make arrangements for the funeral of a relative shall be in
accordance with the order established for support, under article 294.331 In case of
descendants of the same degree, or of brothers and sisters, the oldest shall be preferred. In
case of ascendants, the paternal shall have a better right.332

Every funeral shall be in keeping with the social position of the deceased.333

The funeral shall be in accordance with the expressed wishes of the deceased. In
the absence of such expression, his religious beliefs or affiliation shall determine the funeral
rites. In case of doubt, the form of the funeral shall be decided upon by the person obliged
to make arrangements for the same, after consulting the other members of the family.334

No human remains shall be retained, interred, disposed of or exhumed without the


consent of the persons mentioned in articles 294 and 305.335

Any person who shows disrespect to the dead, or wrongfully interferes with a
funeral shall be liable to the family of the deceased for damages, material and moral.336

The construction of a tombstone or mausoleum shall be deemed a part of the


funeral expenses, and shall be chargeable to the conjugal partnership property, if the
deceased is one of the spouses.337

330
Art. 256
331
See Reference
332
Art. 305
333
Art. 306
334
Art. 307
335
Art. 308; Art. 305, supra
336
Art. 309
337
Art. 310

74
XV. Use of surnames338

Legitimate and legitimated children shall principally use the surname of the
339
father.

An adopted child shall bear the surname of the adopter.340

A natural child acknowledged by both parents shall principally use the surname of
the father. If recognized by only one of the parents, a natural child shall employ the
surname of the recognizing parent.341

Natural children by legal fiction shall principally employ the surname of the
father.342

Illegitimate children referred to in article 287 shall bear the surname of the
mother.343

Children conceived before the decree annulling a voidable marriage shall principally
use the surname of the father.344

A married woman may use:

(1) Her maiden first name and surname and add her husband's surname, or
(2) Her maiden first name and her husband's surname or
(3) Her husband's full name, but prefixing a word indicating that she is his wife,
such as "Mrs."345

In case of annulment of marriage, and the wife is the guilty party, she shall resume
her maiden name and surname. If she is the innocent spouse, she may resume her maiden
name and surname. However, she may choose to continue employing her former
husband's surname, unless:

(1) The court decrees otherwise, or


(2) She or the former husband is married again to another person.346

338
other articles repealed by Family Code
339
Art. 364
340
Art. 365
341
Art. 366
342
Art. 367
343
Art. 368
344
Art. 369
345
Art. 370

75
When legal separation has been granted, the wife shall continue using her name and
surname employed before the legal separation.347

A widow may use the deceased husband's surname as though he were still living, in
accordance with article 370.348

In case of identity of names and surnames, the younger person shall be obliged to
use such additional name or surname as will avoid confusion.349

In case of identity of names and surnames between ascendants and descendants,


the word "Junior" can be used only by a son. Grandsons and other direct male descendants
shall either:

(1) Add a middle name or the mother's surname, or


(2) Add the Roman numerals II, III, and so on.350
No person can change his name or surname without judicial authority.351

Usurpation of a name and surname may be the subject of an action for damages
and other relief.352

The unauthorized or unlawful use of another person's surname gives a right of


action to the latter.353
The employment of pen names or stage names is permitted, provided it is done in
good faith and there is no injury to third persons. Pen names and stage names cannot be
usurped.354

Except as provided in the preceding article, no person shall use different names
and surnames.355

346
Art. 371
347
Art. 372
348
Art. 373
349
Art. 374
350
Art. 375
351
Art. 376, amended by R.A. 9048, infra
352
Art. 377
353
Art. 378
354
Art. 379
355
Art. 380

76
XVI. Absence

If there is a doubt, as between two or more persons who are called to succeed each
other, as to which of them died first, whoever alleges the death of one prior to the other,
shall prove the same; in the absence of proof, it is presumed that they died at the same time
and there shall be no transmission of rights from one to the other.356

A marriage contracted by any person during subsistence of a previous marriage


shall be null and void, unless before the celebration of the subsequent marriage, the prior
spouse had been absent for four consecutive years and the spouse present has a well-
founded belief that the absent spouse was already dead. In case of disappearance where
there is danger of death under the circumstances set forth in the provisions of Article 391
of the Civil Code, an absence of only two years shall be sufficient.

For the purpose of contracting the subsequent marriage, the spouse present must
institute a summary proceeding as provided in this Code for the declaration of presumptive
death of the absentee, without prejudice to the effect of reappearance of the absent
spouse.357

A. Provisional measures in case of absence

When a person disappears from his domicile, his whereabouts being unknown, and
without leaving an agent to administer his property, the judge, at the instance of an
interested party, a relative, or a friend, may appoint a person to represent him in all that
may be necessary.

This same rule shall be observed when under similar circumstances the power
conferred by the absentee has expired.358

The appointment referred to in the preceding article having been made, the judge
shall take the necessary measures to safeguard the rights and interests of the absentee and
shall specify the powers, obligations and remuneration of his representative, regulating
them, according to the circumstances, by the rules concerning guardians.359

In the appointment of a representative, the spouse present shall be preferred when


there is no legal separation.

If the absentee left no spouse, or if the spouse present is a minor, any competent
person may be appointed by the court.360

356
Art. 43, CC
357
Art. 41, FC
358
Art. 381
359
Art. 382
360
Art. 383

77
B. Declaration of Absence

Two (2) years having elapsed without any news about the absentee or since the
receipt of the last news, and five (5) years in case the absentee has left a person in charge of
the administration of his property, his absence may be declared.361

The following may ask for the declaration of absence:

(1) The spouse present;


(2) The heirs instituted in a will, who may present an authentic copy of the same;
(3) The relatives who may succeed by the law of intestacy;
(4) Those who may have over the property of the absentee some right subordinated
to the condition of his death.362

The judicial declaration of absence shall not take effect until six (6) months after its
publication in a newspaper of general circulation.363

C. Administration of the Property of the Absentee

An administrator of the absentee's property shall be appointed in accordance with


Article 383.364
The wife who is appointed as an administratrix of the husband's property cannot
alienate or encumber the husband's property, or that of the conjugal partnership, without
judicial authority.365
The administration shall cease in any of the following cases:
(1) When the absentee appears personally or by means of an agent;
(2) When the death of the absentee is proved and his testate or intestate heirs
appear;
(3) When a third person appears, showing by a proper document that he has
acquired the absentee's property by purchase or other title.

In these cases the administrator shall cease in the performance of his office, and
the property shall be at the disposal of those who may have a right thereto.366
361
Art. 384
362
Art. 385
363
Art. 386
364
Art. 387
365
Art. 388
366
Art. 389

78
D. Presumption of Death

After an absence of seven (7) years, it being unknown whether or not the absentee
still lives, he shall be presumed dead for all purposes, except for those of succession.

The absentee shall not be presumed dead for the purpose of opening his
succession till after an absence of ten years. If he disappeared after the age of seventy-five
years, an absence of five years shall be sufficient in order that his succession may be
opened.367

The following shall be presumed dead for all purposes, including the division of the
estate among the heirs:

(1) A person on board a vessel lost during a sea voyage, or an aeroplane which is
missing, who has not been heard of for four years since the loss of the vessel or aeroplane;

(2) A person in the armed forces who has taken part in war, and has been missing
for four years;

(3) A person who has been in danger of death under other circumstances and his
existence has not been known for four years.368

If the absentee appears, or without appearing his existence is proved, he shall


recover his property in the condition in which it may be found, and the price of any
property that may have been alienated or the property acquired therewith; but he cannot
claim either fruits or rents.369

367
Art. 390
368
Art. 391
369
Art. 392

79
XVII. Civil Registrar

A. Arts. 407-413

Acts, events and judicial decrees concerning the civil status of persons shall be
recorded in the civil register.370

The following shall be entered in the civil register:

(1) Births;
(2) marriages;
(3) deaths;
(4) legal separations;
(5) annulments of marriage;
(6) judgments declaring marriages void from the beginning;
(7) legitimations;
(8) adoptions;
(9) acknowledgments of natural children;
(10) naturalization;
(11) loss, or
(12) recovery of citizenship;
(13) civil interdiction;
(14) judicial determination of filiation;
(15) voluntary emancipation of a minor; and
(16) changes of name.371

In cases of legal separation, adoption, naturalization and other judicial orders


mentioned in the preceding article, it shall be the duty of the clerk of the court which
issued the decree to ascertain whether the same has been registered, and if this has not
been done, to send a copy of said decree to the civil registry of the city or municipality
where the court is functioning.372

370
Art. 407
371
Art. 408
372
Art. 409

80
The books making up the civil register and all documents relating thereto shall be
considered public documents and shall be prima facie evidence of the facts therein
contained.373

Every civil registrar shall be civilly responsible for any unauthorized alteration made
in any civil register, to any person suffering damage thereby. However, the civil registrar
may exempt himself from such liability if he proves that he has taken every reasonable
precaution to prevent the unlawful alteration.374

No entry in a civil register shall be changed or corrected, without a judicial order.375

All other matters pertaining to the registration of civil status shall be governed by
special laws.376

B. Correction of Clerical Errors377

C. Rule 108, Rules of Court378

373
Art. 410
374
Art. 411
375
Art. 412
376
Art. 413
377
R.A. 9048, entitled An Act Authorizing the City or Municipal Civil Registrar or the Consul General to
Correct a Clerical or Typographical Error in an Entry and/or Change of First Name or Nickname in the
Civil Register Without Need of a Judicial Order., See Reference
378
ibid

81
PROPERTY379

I. Characteristics

1. Utility for the satisfaction of moral and economic wants


2. Susceptibility of appropriation
3. Individuality or substantivity380

II. Classification381

Immovables or real382 Movables383

a) By nature those which cannot be General Rule: All things which can be
carried from place to place.384 transported from place to place without
impairment of the real property to which
1. Lands, buildings, roads and they are fixed.
constructions (adhered to the soil).385
Exclusions: those movables susceptible of
2. Mines, quarries and slag dumps, appropriation which are not included in the
while the matter thereof forms part of the enumeration of immovables.
bed, and waters either running or stagnant.
a. Special: real property which by any
b) By incorporation essentially movables special provisions of law is considered as
but are attached to an immovable in a fixed personalty.
manner to be an integral part thereof.386
b. In parts: forces of nature which are
1. Trees, plants and growing fruits brought under control by science.
while they are attached to the land or form

379
All things which are, or may be the object of appropriation
380
that is, it can exist by itself, and not merely as a part of the whole; hence, the human hair becomes
property only when it is detached from the hair
381
Tests:
a. Immovable - cannot be transferred from place to place.
b. Movable excluded from the enumeration of immovable and can be moved from place to place
without damage thereto.
c. Mixed/semi-movable - those which move by themselves (both immovable and movable in
nature).
382
Art. 415
383
Art. 416 to 417
384
Pars. 1 & 8
385
The materials constituting a building which is the subject of demolition are movable.
A structure which is merely superimposed, not adhered, to the soil may be considered movable.
386
Pars. 2, 3 & 7

82
an integral part of an immovable. c. Obligations and actions which have
for their object movables391 or demandable
2. Everything attached to an immovable sums.392
in a fixed manner in such a way that it
cannot be separated therefrom without d. Shares of stocks or interests in
breaking the material or deterioration of the juridical entities.
object.387

3. Fertilizers actually used on a piece of


land.

c) By destination essentially movables but


are placed in an immovable as an added
utility.

1. Statutes, reliefs painting or other


objects for use or ornamentation, placed in
a building or on lands, by the owner of the
immovable in such a manner that it reveals
the intention to attach them permanently to
the tenements.388

2. Machinery, instruments or implements


intended by the owner of the tenement for
an industry or works which may be carried
on in a building or land, and which tend
directly to meet the needs of such industry
or works.389
3. Animal houses or breeding places, in
case the owner has placed or preserved
them with the intention to attach them
permanently to the land, and the animals in
these places.

4. Docks and structures which, though


floating, are intended by their nature and
object to remain at a fixed place on a river,
lake or coast.

387
Rex vinta
388
Indirect utility
389
Direct utility

83
d) By analogy - classified by express
provision of law because it is regarded as
united to the immovable property.390

1. Contracts for public works.


2. Servitudes.
3. Real rights over immovable
property.

A. Hidden Treasure393

Belongs to the owner of the land, building, or other property on which it is found.

When the discovery is made on the property of another, or of the State or any of its
subdivisions, and by chance, one-half (1/2) thereof shall be allowed to the finder. If the
finder is a trespasser, he shall not be entitled to any share of the treasure.

If the things found be of interest to science or the arts, the State may acquire them
at their just price, which shall be divided in conformity with the rule stated.394

By treasure is understood, for legal purposes, any hidden and unknown deposit of
money, jewelry, or other precious objects, the lawful ownership of which does not
appear.395

391
corporeal or intangible
392
These are really personal rights because they have a definite passive subject (e.g. intellectual
property).
390
Par. 10
393
Treasure consists of money, jewels, or other precious objects which are hidden and unknown, such
that their finding is a real discovery.
394
Art. 438
395
Art. 439

84
B. Right of Accession

The ownership of property gives the right by accession to everything which is


produced thereby, or which is incorporated or attached thereto, either naturally or
artificially.396

1. Fruits

To the owner belongs:

(1) The natural fruits;


(2) The industrial fruits;
(3) The civil fruits.397
Natural fruits are the spontaneous products of the soil, and the young and other
products of animals.

Industrial fruits are those produced by lands of any kind through cultivation or
labor.

Civil fruits are the rents of buildings, the price of leases of lands and other property
and the amount of perpetual or life annuities or other similar income.398

He who receives the fruits has the obligation to pay the expenses made by a third
person in their production, gathering, and preservation.399

Only such as are manifest or born are considered as natural or industrial fruits.

With respect to animals, it is sufficient that they are in the womb of the mother,
although unborn.400

396
Art. 440
397
Art. 441
398
Art. 442
399
Art. 443
400
Art. 444

85
2. With respect to Immovable Property

a. Builder, planter, sower on land of another in concept


of owner

(1) Builder, planter, sower in good faith

The owner of the land on which anything has been built, sown or planted in good
faith, shall have the right to appropriate as his own the works, sowing or planting, after
payment of the indemnity provided for in articles 546 and 548401, or to oblige the one who
built or planted to pay the price of the land, and the one who sowed, the proper rent.
However, the builder or planter cannot be obliged to buy the land if its value is
considerably more than that of the building or trees. In such case, he shall pay reasonable
rent, if the owner of the land does not choose to appropriate the building or trees after
proper indemnity. The parties shall agree upon the terms of the lease and in case of
disagreement, the court shall fix the terms thereof.402

In the cases of the two preceding articles,403 the landowner is entitled to damages
from the builder, planter or sower.404

The builder, planter or sower in bad faith is entitled to reimbursement for the
necessary expenses of preservation of the land.405

If there was bad faith, not only on the part of the person who built, planted or
sowed on the land of another, but also on the part of the owner of such land, the rights of
one and the other shall be the same as though both had acted in good faith.

It is understood that there is bad faith on the part of the landowner whenever the
act was done with his knowledge and without opposition on his part.406

When the landowner acted in bad faith and the builder, planter or sower proceeded
in good faith, the provisions of Article 447407 shall apply.408

401
See reference
402
Art. 448
403
Refers to Arts. 449 and 450, infra
404
Art. 451
405
Art. 452
406
Art. 453
407
supra
408
Art. 454

86
If the materials, plants or seeds belong to a third person who has not acted in bad
faith, the owner of the land shall answer subsidiarily for their value and only in the event
that the one who made use of them has no property with which to pay.

This provision shall not apply if the owner makes use of the right granted by article
450. If the owner of the materials, plants or seeds has been paid by the builder, planter or
sower, the latter may demand from the landowner the value of the materials and labor.409

Good faith does not necessarily exclude negligence, which gives right to damages
under Article 2176.410

(2) Builder, planter, sower in bad faith

He who builds, plants or sows in bad faith on the land of another, loses what is
built, planted or sown without right to indemnity.411
The owner of the land on which anything has been built, planted or sown in bad
faith may demand the demolition of the work, or that the planting or sowing be removed,
in order to replace things in their former condition at the expense of the person who built,
planted or sowed; or he may compel the builder or planter to pay the price of the land, and
the sower the proper rent.412

b. Usufructuary

The usufructuary may make on the property held in usufruct such useful
improvements or expenses for mere pleasure as he may deem proper, provided he does not
alter its form or substance; but he shall have no right to be indemnified therefor. He may,
however, remove such improvements, should it be possible to do so without damage to the
property.413

3. Lands adjoining river banks

a. Alluvion

To the owners of lands adjoining the banks of rivers belong the accretion which
they gradually receive from the effects of the current of the waters.414

409
Art. 455
410
Art. 456; see Reference for Art. 2176
411
Art. 449
412
Art. 450
413
Art. 579
414
Art. 457

87
b. Change of course of river

River beds which are abandoned through the natural change in the course of the
waters ipso facto belong to the owners whose lands are occupied by the new course in
proportion to the area lost. However, the owners of the lands adjoining the old bed shall
have the right to acquire the same by paying the value thereof, which value shall not exceed
the value of the area occupied by the new bed.415
Whenever a river, changing its course by natural causes, opens a new bed through a
private estate, this bed shall become of public dominion.416
When a river or stream suddenly changes its course to traverse private lands, the
owners of the affected lands may not compel the government to restore the river to its
former bed; nor can they restrain the government from taking steps to revert the river or
stream to its former course. The owners of the land thus affected are not entitled to
compensation for any damage sustained thereby. However, the former owners of the new
bed shall be the owners of the abandoned bed in proportion to the area lost by each.
The owners of the affected lands may undertake to return the river or stream to its
old bed at their own expense; Provided, a permit therefor is secured from the Secretary of
Public Works, Transportation and Communication and work pertaining thereto are
commenced within two (2) years from the change in the course of the river or stream.417

c. Avulsion

Whenever the current of a river, creek or torrent segregates from an estate on its
bank a known portion of land and transfers it to another estate, the owner of the land to
which the segregated portion belonged retains the ownership of it, provided that he
removes the same within two years418

Trees uprooted and carried away by the current of the waters belong to the owner
of the land upon which they may be cast, if the owners do not claim them within six
months. If such owners claim them, they shall pay the expenses incurred in gathering them
or putting them in a safe place.419

River beds which are abandoned through the natural change in the course of the
waters ipso facto belong to the owners whose lands are occupied by the new course in
proportion to the area lost. However, the owners of the lands adjoining the old bed shall

415
Art. 461
416
Art. 462
417
Art. 58, P.D. 1067 or the Water Code
418
Art. 459
419
Art. 460

88
have the right to acquire the same by paying the value thereof, which value shall not exceed
the value of the area occupied by the new bed.420

Whenever a river, changing its course by natural causes, opens a new bed through a
private estate, this bed shall become of public dominion.421

Whenever the current of a river divides itself into branches, leaving a piece of land
or part thereof isolated, the owner of the land retains his ownership. He also retains it if a
portion of land is separated from the estate by the current.422

4. Islands

Islands which may be formed on the seas within the jurisdiction of the Philippines,
on lakes, and on navigable or floatable rivers belong to the State.423

Islands which through successive accumulation of alluvial deposits are formed in


non-navigable and non-floatable rivers, belong to the owners of the margins or banks
nearest to each of them, or to the owners of both margins if the island is in the middle of
the river, in which case it shall be divided longitudinally in halves. If a single island thus
formed be more distant from one margin than from the other, the owner of the nearer
margin shall be the sole owner thereof.424

C. By Object

1. Real or immovable425

(1) Land, buildings, roads and constructions of all kinds adhered to the soil;

(2) Trees, plants, and growing fruits, while they are attached to the land or form an
integral part of an immovable;

(3) Everything attached to an immovable in a fixed manner, in such a way that it


cannot be separated therefrom without breaking the material or deterioration of the object;

(4) Statues, reliefs, paintings or other objects for use or ornamentation, placed in
buildings or on lands by the owner of the immovable in such a manner that it reveals the
intention to attach them permanently to the tenements;

420
Art. 461
421
Art. 462
422
Art. 463
423
Art. 464
424
Art. 465
425
See also Classification, supra

89
(5) Machinery, receptacles, instruments or implements intended by the owner of
the tenement for an industry or works which may be carried on in a building or on a piece
of land, and which tend directly to meet the needs of the said industry or works;

(6) Animal houses, pigeon-houses, beehives, fish ponds or breeding places of


similar nature, in case their owner has placed them or preserves them with the intention to
have them permanently attached to the land, and forming a permanent part of it; the
animals in these places are included;

(7) Fertilizer actually used on a piece of land;

(8) Mines, quarries, and slag dumps, while the matter thereof forms part of the bed,
and waters either running or stagnant;

(9) Docks and structures which, though floating, are intended by their nature and
object to remain at a fixed place on a river, lake, or coast;

(10) Contracts for public works, and servitudes and other real rights over
immovable property.

2. Personal or Movable426

(1) Those movables susceptible of appropriation which are not included in the
preceding article;
(2) Real property which by any special provision of law is considered as personalty;
(3) Forces of nature which are brought under control by science; and
(4) In general, all things which can be transported from place to place without
impairment of the real property to which they are fixed.

Also considered as personal property:

(1) Obligations and actions which have for their object movables or demandable
sums; and
(2) Shares of stock of agricultural, commercial and industrial entities, although they
may have real estate.

Movable property is either consumable or nonconsumable. To the first class belong


those movables which cannot be used in a manner appropriate to their nature without their
being consumed; to the second class belong all the others.

426
ibid

90
D. By Owner

1. Of public dominion

It is not owned by the state but pertains to the state, which, as territorial sovereign
exercises certain juridical prerogatives over such property.427 The ownership of such
properties is in the social group, whether national, provincial or municipal.

2. Of private ownership

a. Patrimonial property

(i) Distinction between private property of


individual persons, and of State entities

Patrimonial property428 Property of private ownership

Property of the State owned by it in its This refers to all property belonging to
private or proprietary capacity. private persons either individually or
collectively and those belonging to the State
The state has the same rights over this kind and any of its political subdivisions which
of property as a private individual in are patrimonial in nature.
relation to his own private property

E. By Nature

1. Consumable/non-consumable vs. Fungible/non-fungible

Consumable429 cannot be used in a manner appropriate to


their nature without being consumed

427
a. For public use (e.g. roads, canals, rivers)
b. For public service (e.g. public buildings)
c. For the development of the national wealth.
428
Used by the political subdivision as a juridical person in its private capacity (e.g. property acquired
through escheat proceedings, tax sales). It is the property which the unit has the same rights, and of
which it may dispose, to the same extent as private individuals according to laws and regulations on the
procedure of exercising such rights. Hence, it is subject to the principles on private properties (e.g.
subject to prescription
429
Consumable goods cannot be the subject matter of a contract of commodatum unless the purpose of
the contract is not the consumption of the object as when it is merely for exhibition.

91
Non-consumable - not consumed by use.

Fungibles - belong to a common genus permitting


substitution of the same kind, quantity and
quality;430

Non-fungibles specifically determined and cannot be


substituted431

III. Ownership

A. Rights in general432

1. Bundle of rights

a. Jus utendi,433 fruendi,434 abutendi,435 vindicandi,436


disponendi437 (possidendi)

(1) Actions to recover ownership and possession


of real property

430
e.g. 10 bottles of wine
431
e.g. 10 bottles of wine which I have in my room
432
The right to enjoy, dispose, and recover a thing without further limitations than those established by
law or the will of the owner.
433
the right to use
434
the right to enjoy the fruits
435
the right to destroy (but cannot harm others)
436
The right of action available to the owner to recover the property against the holder or possessor
437
The right to dispose, or the right to alienate, encumber, transform

92
(a) Distinctions between accion
reivindicatoria, accion publiciana,
accion interdictal

Accion reinvindicatoria438 Accion publiciana439 Accion interdictal440

An action to recover real Ordinary civil proceeding to Summary action to recover


property based on recover the better right of physical or material
ownership. Here, the object possession, except in cases possession only. It consists
is the recovery of the of forcible entry and of the summary actions of:
dominion over the property unlawful detainer. The
as owner. involved is not possession 1. Forcible entry - Action
de facto but possession de for recovery of material
jure. possession of real property
when a person originally in
possession was deprived
thereof by force,
intimidation, strategy, threat
or stealth

2. Unlawful Detainer -
Action for recovery of

438
This action should be filed in case of refusal of a party to deliver possession of property due to an
adverse claim of ownership.
Requisites:
1. Identity of the Property
2. Plaintiffs title to the property
439
plenary action
Whenever the owner is dispossessed by any other means (e.g. possession is due to tolerance of the
owner) other than FISTS, he may maintain this action to recover possession without waiting for the
expiration of 1 year before commencing this suit. It may also be brought after the expiration of 1 year if
no action had been instituted for forcible entry or unlawful detainer
440
Period to file action: Within 1 year after such unlawful deprivation or withholding of possession,
commencing from the time of last demand (oral or written; direct or indirect) to vacate. No demand is
necessary for a lessee to vacate when it is specifically provided for in the agreement.
Prayer: for the restitution of possession, with damages and costs. However, the only damages that
can be recovered in an Ejectment suit are the fair rental value or the reasonable compensation for the
use and occupation of the real property. Other damages must be claimed in an ordinary action.
The defendant, however, may set up a counterclaim for moral damages and recover it if it is within
the jurisdiction of the court.
Jurisdiction: MTC (summary proceedings). Whatever the amount of plaintiffs damages will not
affect the courts jurisdiction.
Issue: Physical possession. The decision in such action is res judicata in the question of possession.
Sublessees are bound by the judgment rendered against the lessee in an ejectment case even if they
were not made parties thereto.

93
possession of any land or
building by landlord,
vendor, vendee, or other
person against whom the
possession of the same was
unlawfully withheld after the
expiration or termination of
the right to hold possession,
by virtue of any contract.

(b) Distinction between forcible entry and


unlawful detainer441

Forcible entry Unlawful detainer


As to when possession became unlawful

Possession of the defendant is unlawful Possession is inceptively lawful but becomes


from the beginning as he acquires illegal from the time defendant unlawfully
possession by Force, intimidation, strategy, withholds possession after the expiration or
threat or stealth termination of his right thereto.

As to the necessity of demand

No previous demand for the defendant to Demand is jurisdictional if the ground is


vacate is necessary non-payment of rentals or failure to comply
with the lease contract

As to necessity of proof of prior physical possession

441
See Accion Interdictal, supra
Ejectment suit:
a. Can be brought by anyone of the coowners.
A co-owner may bring such an action without the necessity of joining all the other co-owners as co-
plaintiffs because the suit is deemed to be instituted for the benefit of all.
However, if the action is for the benefit of the plaintiff alone, such that he claims the possession for
himself and not for the co-ownership, the action will NOT prosper.
b. Action may be brought not only against strangers but even against a coowner.
The effect of the action will be to obtain recognition of the co-ownership. The defendant cannot be
excluded because he has a right to possess as a co-owner, and the plaintiff cannot recover any material
or determinate part of the property.
c. An adverse decision in the action is not necessarily res judicata with respect to the other co
owners not being parties to the action, but they are bound where it appears that the action was
instituted in their behalf with their express or implied consent.

94
Plaintiff must prove that he was in prior Plaintiff need not have been in prior
physical possession of the premises until physical possession
he was deprived thereof by the defendant

As to when the 1 year period is counted from

From the date of actual entry on the land From the date of last demand or last letter of
demand

(2) Actions for recovery of possession of movable


Property

Replevin - remedy when the complaint prays for the recovery of the possession of
personal property.

(3) Requisites for recovery of property

(a) Proof of right

Evidence to prove ownership:

a. Torrens title.
b. Title from the Spanish Government.
c. Patent duly registered in the Registry of Property by the grantee.
d. Deed of sale.
e. Long possession.
(b) Identity

Identity of the property.


(c) Reliance on strength of own evidence
not weakness of defendants claim

Strength of plaintiffs title.442

442
proof of ownership
Tax declarations are not conclusive proof of ownership. However, when coupled with possession for a
period sufficient for prescription, they become strong evidence of ownership. Also, the failure of a
person to declare land for taxation may be admitted to show that he is not the owner thereof.

95
2. Distinction between real and personal rights

Real Rights Personal Rights

Jus in re, a right enforceable against the Jus ad rem, a right enforceable only against a
whole world definite person or group of persons

Right pertaining to a person over a specific Right pertaining to the person to demand
thing, without a passive subject individually from another, as a definite passive subject,
determined against whom such right may be the fulfillment of a prestation to give, to do
personally enforced or not to do.

Object is corporeal thing443 Object is an intangible thing444

Creates juridical relations through mode & Creates juridical relations through title
title

Extinguished through loss or destruction of Not extinguished through loss or


thing destruction of thing

B. Modes of acquiring ownership

1. Original
2. Derivative

Original Derivative
1. Occupation
1. Law
2. Work which includes Intellectual creation
2. Tradition
3. Donation
4. Prescription
5. Succession

443
obligation
444
specific thing

96
C. Limitations

1. General limitations445

Taxation Eminent domain Police power

The inherent power of the No person shall be deprived When any property is
sovereign, exercised through of his property except by condemned or seized by
the legislature, to impose competent authority and competent authority in the
burdens upon the subjects from public use and always interest of health, safety or
and objects within its upon payment of just security, the owner thereof
jurisdiction, for the purpose compensation. shall not be entitled to
of raising revenues to carry compensation, unless he can
out the legitimate objects of Should this requirement be show that such
the government. not complied with, the condemnation or seizure is
courts shall protect and, in unjustified.446
proper cases, restore the
owner in his possession.

2. Specific Limitations

a. Those imposed by law

1. sic utere tuo ut non laedas - the owner of a thing cannot make use thereof in
such a manner as to injure the rights of a 3rd person.447

2. Nuisance448

3. State of necessity law permits injury or destruction of things owned by


another provided this is necessary to avert a greater danger449
445
For the benefit of the state
446
Requisites:
1 .The interest of the public in general, as distinguished from those of a particular class, requires such
interference.
2. The means employed are reasonably necessary for the accomplishment of a purpose, and not unduly
oppressive upon individuals.
447
sic utere tuo
This is based on the police power of the State.
It does not apply where the owner of a thing makes use of it in a lawful manner for then it cannot be
said that the manner of the use is such as to injure the rights of a third person.
448
infra
449
with right to indemnity vs. principle of unjust enrichment
Requisites:

97
b. Easements voluntarily imposed by owner

1. Servitudes
2. mortgages imposed by contract

IV. Accession450

A. Right to hidden treasure451

General rule:

It belongs to the owner of the land, building or other property on which it


is found.

Exceptions:

The finder is entitled to provided:

1. Discovery was made on the property of another, or of the state or any of


its political subdivisions;

2. The finding was made by chance;


3. The finder is not a co-owner of the property where it is found;
4. The finder is not a trespasser;
5. The finder is not an agent of the landowner;
6. The finder is not married under the absolute community or the conjugal
partnership system.452

1. The interference is necessary.


2. The damage to another is much greater than the damage to the property.
The seriousness or gravity of the danger must be much greater than the damage to the property
affected or destroyed by the protective act.
Danger to life is always greater than damage to property.
If through an error, one believed himself to be in a state of necessity, or used excessive means, his act
would be illicit, and the owner of the property can use the principle of self-help.
The law does not require that the person acting in a state of necessity be free from negligence in the
creation of the threatened danger
450
The right by virtue of which the owner of a thing becomes the owner of everything that it may
produce or which may be inseparably united or incorporated thereto, either naturally or artificially.
451
Hidden treasure - any hidden or unknown deposit of money, jewelry or other precious objects, the
lawful ownership of which does not appear.
452
Otherwise, his share belongs to the community

98
B. General Rules:

1. For immovables:

a. Accession discreta453 and continua454

Accession discreta Accession continua

The right pertaining to the owner of a thing The right pertaining to the owner of a thing
over everything produced thereby over everything that is incorporated or
attached thereto either naturally or
artificially; by external forces.

General rule: Artificial/industrial

To the owner belongs the natural,455 Building, planting or sowing


industrial,456 and civil fruits.457
General rule
Exceptions:
Whatever is built, planted or sown on
If the thing is: the land of another and the improvements
or repairs made thereon belong to the
a) in possession of a possessor in owner of the land.458
good faith;
Exception: contrary is proven
b) subject to a usufruct;
Natural
c) leased or pledged; or
d) in possession of an antichretic Alluvion or alluvium increment which lands
creditor abutting rivers gradually receive as a result
of the current of the waters. It is the gradual
deposit of sediment by the natural action of

453
Natural, industrial and civil fruits
454
artificial/industrial and natural
455
spontaneous products of the soil and the young and other products of animals
456
those produced by lands of any kind through cultivation or labor
457
rents of buildings, price of leases or lands and the amount of perpetual or life annuities or other
similar income
458
The owner of the land must be known, otherwise no decision can be rendered on the ownership of
the thing planted, built or sown until a hearing shall have been accorded to whosoever is entitled
thereto.

99
a current of fresh water (not sea water, the
original identity of the deposit being lost.459

Avulsion - the accretion which takes place


when the current of the river, creek or
torrent segregates from an estate on its
bank a known portion and transfers it to
another estate, in which case, the owner of
the estate to which the segregated portion
belonged, retains the ownership thereof.460

Rule

Estates adjoining ponds or lagoons The owners of estates adjoining ponds or


lagoons do not acquire the land left dry by
the natural decrease of the waters, or loss
that inundated by them in extraordinary
floods

Trees uprooted/by force of river Trees uprooted and carried away by the
current of the waters belong to the owner of
the land upon which they may be case, if the
owners do not claim them within 6 months.
If such owners claim them, they shall pay
the expenses incurred in gathering or
putting them in a safe place.461

Abandoned river bed/change in the course River beds which are abandoned through
of river the natural change in the course of waters
ipso facto belong to the owners whose lands

459
To the owners of the lands adjoining the banks of rivers belong the accretions which they gradually
receive from the effects of the current of the waters.
460
The owner of the estate to which the segregated portion belongs preserves his ownership of the
segregated portion provided he removes (not merely claims) the same within the period of 2 years.
Failure to do so would have the effect of automatically transferring ownership over it to the owner of
the other estate.
461
This rule refers to uprooted trees only. If a known portion of land with trees standing thereon is
carried away by the current to another land, the rule on avulsion governs.

100
are occupied by the new course in
proportion to the area lost.462

New river bed without abandonment Whenever a river, changing its course by
natural causes, opens a new bed through a
private estate, this bed shall become of
public dominion.463

Branching of course of river Whenever the current of a river divides


itself into branches, leaving a piece of land
or part thereof isolated, the owner of the
land retains his ownership thereto. He also
retains ownership to a portion of his land
separated from the estate by the current.

Formation of Islands 1. If formed on the seas within the


jurisdiction of the Philippines, on lakes, or
on navigable or floatable rivers:464 the island
belongs to the State as part of its
patrimonial property.

2. If formed in non navigable and non


floatable rivers:

a. It belongs to the nearest riparian owner,


or owner of the margin or bank nearest to it
as he is considered on the best position to

462
However, the owners of land adjoining the old bed are given preferential right to acquire the same
by paying the value thereof to promote the interest of agriculture because the riparian owners of the
old course/bed can better cultivate the same. The indemnification to be paid shall not exceed the value
of the area occupied by the new bed.
River beds are part of public domain. In this case, there is abandonment by the government of its
right over the old bed. The owner of the invaded land automatically acquires ownership of the same
without the necessity of any formal act on his part.
In proportion to the area lost implies that there are two or more owners whose lands are occupied
by the new bed. Therefore, if only one owner lost a portion of his land, the entire old bed should belong
to him.
463
The bed of a public river or stream is of public ownership. If the river changes its course and opens a
new bed, this bed becomes of public dominion even if it is on private property.
The law does not make any distinction whether the river is navigable or not.
464
One which in its natural state affords a channel for useful commerce and not such as is only sufficient
to float a banca or a canoe.

101
cultivate and develop the island.

b. If the island is in the middle of the river,


the island is divided longitudinally in halves.
If the island formed is longer than the
property of the riparian owner, the latter is
deemed ipso jure to be the owner of that
portion which corresponds to the length of
that portion of his property along the
margin of the river.

c. If a single island be more distant from


one margin than from the other, the owner
of the nearer margin shall be the sole owner
thereof.

b. Accession industrial465

c. Accession natural466

2. For movables:

a. Accession continua467

Adjunction or conjunction Commixtion or confusion Specification

It is the union of 2 When two or more things Whenever the work of a


movable things belonging to belonging to different person is done on the
different owners in such a owners are mixed or material of another, and
way that they form a single combined with the such material, as a
object, but each one of the respective identities of the consequence of the work
component things preserves component parts destroyed itself, undergoes a
its value. or lost. transformation

465
building, planting, sowing in good faith or bad faith, supra
466
accretion, avulsion, rivers, islands, ibid.
467
conjunction, adjunction, commixtion/confusion, specification

102
Rules: Rules: Rules:

1. Adjunction in good faith: 1. Mixture by will of both 1. Worker and owner of the
the owners or by chance: materials in good faith:
If the union took place
without bad faith, the owner a. Their rights shall first The worker becomes the
of the principal thing be governed by their owner of the
acquires the accessory, with stipulations. work/transformed thing but
the obligation to indemnify he must indemnify the
the owner of the accessory b. If the things mixed are owner of the material for its
for its value. of the same kind and quality, value.
there is no conflict of rights,
2. Adjunction in bad faith: and the mixture can easily be Exception:
divided between the 2
If the union took place in owners. If the material is more
bad faith, the following rules precious or of more value
shall apply: c. If the things mixed are than the work/transformed
of different kind and quality, thing, the owner of the
a. Bad faith on the part in the absence of a material may choose:
of owner of accessory: stipulation, each owner
acquires a right or interest in a. To appropriate the
i. He shall lose the the mixture in proportion to new thing to himself but
thing incorporated, and the value of his material as must pay for the value of the
in co-ownership. work or labor, or
ii. He shall be liable for
damages to the owner of the 2. Mixture caused by an b. To demand
principal thing, or the owner in good faith or by indemnity for the material.
payment of the price, chance:
including its sentimental 2. Worker in bad faith but
value as appraised by a. Their rights shall first the owner of the material in
experts. be governed by their good faith:
stipulations.
iii. The principal may The owner of the material
demand for the delivery of a b. If the things mixed are has the option either:
thing equal in kind and value of the same kind and quality,
and in all other respects to there is no conflict of rights, a. To appropriate the
that of the principal thing, and the mixture can easily be work to himself without
or the payment of the price, divided between the 2 paying the maker, OR
including its sentimental owners.
value as appraised by b. To demand the
experts. c. If the things mixed are value of the material plus
of different kind and quality, damages.
b. Bad faith on the part in the absence of a

103
of the owner of the stipulation, each owner 3. Owner of the materials in
principal: acquires a right or interest in bad faith but the worker is
the mixture in proportion to in good faith:
The owner of the the value of his material as
accessory thing is given the in co-ownership. The owner of the
option either: material is in bad faith when
3. Mixture caused by an he does not object to the
i. To require the owner owner in bad faith: employment of his materials.
of the principal thing to pay
the value of the accessory The owner in bad faith not Accordingly, he shall lose his
thing, plus damages. only forfeits the thing materials and shall have the
belonging to him but also obligation to indemnify the
ii. To have the becomes liable to pay worker for the damages he
accessory thing separated indemnity for the damages may have suffered
even if it be necessary to caused to the other owner.
destroy the principal thing, 4. Both owners are in bad
plus damages. 4. Mixture by both owners faith:
in bad faith:
iii. The accessory may Their rights shall be
demand for the delivery of a There is bad faith when the determined as though both
thing equal in kind and value mixture is made with the acted in good faith.
and in all other respects to knowledge and without the
that of the accessory thing, objection of the other
or the payment of the price, owner. Accordingly, their
including its sentimental respective rights shall be
value as appraised by determined as though both
experts. acted in good faith.

c. Both parties in bad


faith:

Their respective rights are


to be determined as though
both acted in good faith.

Sentimental value shall be


duly appreciated

104
Adjunction Mixture Specification

Involves at least 2 things Involves at least 2 things May involve one thing (or
more) but form is changed

Accessory follows the Co-ownership results Accessory follows the


principal principal

Things joined retain their Things mixed or confused The new object retains or
nature may either retain or lose preserves the nature of the
their respective natures original object.

b. Rules for determining the principal and accessory468

Adjunction Mixture Specification

In the order of application,


Strictly speaking, there is no Labor is the principal.
the principal is that: accession in mixture since
there is neither a principal
a. To which the accessory nor an accessory
has been united as an
ornament or for its use or
perfection.469

b. Of greater value, if they


are of unequal values.

c. Of greater volume, if they


are of an equal value.

d. Of greater merits taking


into consideration all the
pertinent legal provisions
applicable as well as the
comparative merits, utility
and volume of their
respective things.

468
In paintings and sculpture, writings, printed matter, engraving and lithographs, the board, metal
stone, canvas, paper or parchment shall be deemed the accessory thing.
469
Rule of importance and purpose

105
V. Quieting of Title to or Interest in and Removal or Prevention of Cloud over Title
to or Interest in Real Property

Quieting of Title - an equitable action in rem to determine the condition of the


ownership or the rights to immovable property, and remove doubts thereon.470

A. Requirements:

1. Plaintiff must have a legal or equitable title to, or interest in the real property
which is the subject matter of the action;

2. There must be a cloud in such title;

3. Such cloud must be due to some instrument, record, claim, encumbrance or


proceeding which is apparently valid but is in truth invalid, ineffective, voidable or
unenforceable, and is prejudicial to the plaintiffs title; and

4. Plaintiff must return to the defendant all benefits he may have received from the
latter, or reimburse him for expenses that may have redounded to his benefit.

B. Distinction between quieting of title and removing/preventing a


cloud471

Quieting of Title Removing/Preventing a Cloud

Strictly considered, is substantially an action Intended to procure the cancellation,


to put an end to vexatious litigation in delivery of, release of an instrument,
respect to the property involved encumbrance, or claim constituting a claim
on plaintiffs title, and which may be used to
injure or vex him in the enjoyment of his
title.

470
The action to quiet title does not apply:
a) to questions involving interpretation of documents
b) to mere written or oral assertions of claims; except:
i) if made in a legal proceeding
ii) if it is being asserted that the instrument or entry in plaintiffs favor is not what it purports
to be
c) to boundary disputes
d) to deeds by strangers to the title UNLESS purporting to convey the property of the plaintiff
e) to instruments invalid on their face
f) where the validity of the instrument involves pure questions of law
471
What is a cloud on title?
It is a semblance of title, either legal or equitable, or a claim or a right in real property, appearing in
some legal form which is, in fact, invalid or which would be inequitable to enforce

106
The plaintiff asserts his own estate and Plaintiff not only declares his own title, but
declares generally that the defendant claims also avers the source and nature of
some estate in the land, without defining it, defendants claim, points out its defect, and
and avers that the claim is without prays that it be declared void.
foundation.

Relief is granted if the threatened or


anticipated cloud is one which if it existed,
would be removed by suit to quiet title.

C. Prescription/non-prescription of action

Plaintiff in possession Plaintiff not in possession

Imprescriptible 10 years472 or 30 years473

VI. Co-ownership

The right of common dominion which two or more persons have in a spiritual part
of a thing which is not physically divided.

Co-ownership exists where the ownership of a thing physically undivided pertains


to more than one person.

A. Characteristics of co-ownership

1. In general

a. Plurality of subjects.
b. Unity of object or material indivision.
c. Recognition of ideal or intellectual shares of co-owners which determine their
rights and obligations.

472
ordinary
473
extraordinary

107
2. Special rules:

a. Concept of condominium

(1) Condominium corporation

An interest in real property consisting of a separate interest in a unit in a residential,


industrial or commercial building and an undivided interest in common, directly or
indirectly, in the land on which it is located and in other common areas of the building.

Any transfer or conveyance of a unit or an apartment, office or store or other space


therein, shall include transfer or conveyance of the undivided interest in the common areas
or, in a proper case, the membership or shareholdings in the condominium corporation:
provided, however, that where the common areas in the condominium project are held by
the owners of separate units as co-owners thereof, no condominium unit therein shall be
conveyed or transferred to persons other than Filipino citizens or corporations at least
60% of the capital stock of which belong to Filipino citizens, except in cases of hereditary
succession.

(2) Interest in real property474

(3) Concept of common areas, amendment

General rule:

Common areas shall remain undivided, and there shall be no judicial partition
thereof:

Exceptions:

1. When the project has not been rebuilt or repaired substantially to its state prior
to its damage or destruction 3 years after damage or destruction which rendered a material
part thereof unfit for use;

2. When damage or destruction has rendered or more of the units untenantable


and that the condominium owners holding more than 30% interest in the common areas
are opposed to restoration of the projects;

3. When the project has been in existence for more than 50 years, that it is obsolete
and uneconomic, and the condominium owners holding in aggregate more than 50%
interest in the common areas are opposed to restoration, remodeling or modernizing;

474
See Condominium Corporation, supra

108
4. When the project or a material part thereof has been condemned or expropriated
and the project is no longer viable, or that the condominium owners holding in aggregate
more than 70% interest in the common areas are opposed to the continuation of the
condominium regime;

5. When conditions for partition by sale set forth in the declaration of restrictions
duly registered have been met.

(4) Documents to consider

Master deed

An enabling or master deed shall contain, among others, the following:

(a) Description of the land on which the building or buildings and improvements
are or are to be located;

(b) Description of the building or buildings, stating the number of stories and
basements, the number of units and their accessories, if any;

(c) Description of the common areas and facilities;

(d) A statement of the exact nature of the interest acquired or to be acquired by the
purchaser in the separate units and in the common areas of the condominium project.
Where title to or the appurtenant interests in the common areas is or is to be held by a
condominium corporation, a statement to this effect shall be included;

(e) Statement of the purposes for which the building or buildings and each of the
units are intended or restricted as to use;

(f) A certificate of the registered owner of the property, if he is other than those
executing the master deed, as well as of all registered holders of any lien or encumbrance
on the property, that they consent to the registration of the deed;

(g) The following plans shall be appended to the deed as integral parts thereof:

(1) A survey plan of the land included in the project, unless a survey plan of
the same property had previously been filed in said office;

(2) A diagrammatic floor plan of the building or buildings in the project, in


sufficient detail to identify each unit, its relative location and approximate
dimensions;

109
(h) Any reasonable restriction not contrary to law, morals or public policy regarding
the right of any condominium owner to alienate or dispose of his condominium.

The enabling or master deed may be amended or revoked upon registration of an


instrument executed by the registered owner or owners of the property and consented to
by all registered holders of any lien or encumbrance on the land or building or portion
thereof.475

Declaration of restrictions

The owner of a project shall, prior to the conveyance of any condominium therein,
register a declaration of restrictions relating to such project, which restrictions shall
constitute a lien upon each condominium in the project, and shall insure to and bind all
condominium owners in the project. Such liens, unless otherwise provided, may be
enforced by any condominium owner in the project or by the management body of such
project. The Register of Deeds shall enter and annotate the declaration of restrictions upon
the certificate of title covering the land included within the project, if the land is patented
or registered under the Land Registration or Cadastral Acts.

The declaration of restrictions shall provide for the management of the project by
anyone of the following management bodies: a condominium corporation, an association
of the condominium owners, a board of governors elected by condominium owners, or a
management agent elected by the owners or by the board named in the declaration. It shall
also provide for voting majorities quorums, notices, meeting date, and other rules
governing such body or bodies.476

Articles and by-laws

Any provision of the Corporation Law to the contrary notwithstanding, the by-laws
of a condominium corporation shall provide that a stockholder or member shall not be
entitled to demand payment of his shares or interest in those cases where such right is
granted under the Corporation Law unless he consents to sell his separate interest in the
project to the corporation or to any purchaser of the corporation's choice who shall also
buy from the corporation the dissenting member or stockholder's interest. In case of
disagreement as to price, the procedure set forth in the appropriate provision of the
Corporation Law for valuation of shares shall be followed. The corporation shall have two
years within which to pay for the shares or furnish a purchaser of its choice from the time
of award. All expenses incurred in the liquidation of the interest of the dissenting member
or stockholder shall be borne by him.477

475
Sec. 4, R.A. 4726
476
Sec. 9,
477
Sec. 17

110
b. Rights and obligations of condominium owner

(1) Contributions/Dues

For reasonable assessments to meet authorized expenditures, each condominium


unit to be assessed separately for its share of such expenses in proportion to its owners
fractional interest in any common areas.478

(2) P.D. 957479 and R.A. 6552480

Under P.D. 957 Under R.A. 6552

A. Obligations and Rights of the Owner/ Where the buyer has paid at least two
Developer (2) years of installments, the buyer is
entitled to the following rights in case he
1) Mortgage of Subdivision Lot or defaults in the payment of succeeding
Condominium Unit installments:

a) Requirements: (a) To pay, without additional interest,


the unpaid installments due within the total
Owner or developer must: grace period earned by him which is hereby
fixed at the rate of one month grace period
i. secure prior written for every one year of installment payments
approval from the Authority made. This right shall be exercised by the
(HLURB); buyer only once in every five years of the
life of the contract and its extensions, if
ii. show that the proceeds of any.
the mortgage loan inures to the
development of the condominium or (b) If the contract is canceled, the
subdivision project seller shall refund to the buyer the cash
surrender value of the payments on the
iii. cause the determination of property equivalent to fifty per cent of the
the loan value of each lot or unit total payments made, and, after five years
covered by the mortgage; and of installments, an additional five per cent
every year but not to exceed ninety per cent
iv. notify the buyer, if any. of the total payments made. The actual
cancellation of the contract shall take place
b) Buyers Option: To pay the after thirty days from receipt by the buyer
mortgage loan of his lot or unit of the notice of cancellation or the demand
for rescission of the contract by a notarial

478
Sec. 9 (d)
479
The Subdivision and Condominium Buyers' Protective Decree
480
Realty Installment Buyer Act

111
to acquire title thereof from the act and upon full payment of the cash
mortgage.481 surrender value to the buyer. Down
payments, deposits or options on the
2) Advertisement of the Subdivision or contract shall be included in the
Condominium computation of the total number of
installment payments made.
a) Contents: The owner must
advertise only: In case where less than two (2) years of
installments were paid, the seller shall give
i. real facts, and the buyer a grace period of not less than
sixty days from the date the installment
ii. in a manner that does not
became due.
mislead or deceive the public.482
If the buyer fails to pay the
b) Improvements, facilities, etc.
installments due at the expiration of the
stated in the advertisement
grace period, the seller may cancel the
contract after thirty days from receipt by
i. Nature: Constitutes sales
483 the buyer of the notice of cancellation or
warranties
the demand for rescission of the contract
ii. Time of Completion: by a notarial act.

The buyer shall have the right to sell


a) Sales On the Effectivity his rights or assign the same to another
of this Decree: person or to reinstate the contract by
updating the account during the grace
Within one (1) year from the period and before actual cancellation of the
issuance of the license of subdivision or contract. The deed of sale or assignment
condominium project, or other period fixed shall be done by notarial act.
by the Authority (HLURB).484
The buyer shall have the right to pay
b) Sales Prior to in advance any installment or the full
thisDecree: unpaid balance of the purchase price any
time without interest and to have such full
Within two (2) years from the payment of the purchase price annotated in
effectivity of this Decree, except: the certificate of title covering the property.

i. if extended by the Any stipulation in any contract


Authority (HLURB), hereafter entered into contrary to the
provisions of Sections 3, 4, 5 and 6, shall be
ii. if adequate null and void.

481
Sec. 18
482
Sec. 19
483
ibid
484
Sec. 20

112
performance bond in
accordance with Sec.
6 of this Decree is
filed.485

3) Alteration of the Approved


Subdivision Plan and/or of
Representations in Advertisement:

Requirements:

The owner or developer must:

a) secure approval of the Authority


(HLURB), and

b) written conformity or consent of


the duly organized homeowners association,
or in its absence, by the majority of the lot
buyers in the subdivision.486

4) Non-Forfeiture of Payments by the


Owner or Developer

a) If the failure of the subdivision or


condominium buyer to pay installment is
caused by the failure of the owner or
developer to develop the subdivision or
condominium according to the approved
plan and within time limit, the buyer shall be
reimbursed with legal interest and
amortization interest, but excluding
487
delinquency interest.

b) If such failure is due to other


causes, Republic Act No. 6552 which took
effect on August 26, 1976, but prior to such
date, the buyer is entitled to refund based on
installments paid after the effectivity of the
law in the absence of contrary stipulation. 488
485
Sec. 21
486
Sec. 22
487
Sec. 23
488
Sec. 24

113
5) Issuance of Title to the Buyer by the
Owner or Developer

a) Time: Upon the full payment of


the lot or unit.

b) Chargeable Fee: The owner or


developer can only charge from
the buyer fee for the registration
of the Deed of Sale to the
Register of Deeds.

c) If the lot or unit is mortgaged,


the owner or developer should
redeem the lot or unit within six
months from the issuance of the
title.

6) Payment of Realty Tax and Other


Charges on the Subdivision or
Condominium:

Rules on:

a) Real Taxes:

1) Paid by owner or
developer unless title is
passed to the buyer.
2) Buyer who actually
occupied and possessed a
lot or unit is liable for
taxes to the owner or
developer from the year
following such
occupation or
489
possession.

b) Other Charges:

1) It cannot be collected by

489
Sec. 26

114
the owner or developer.
2) It can be collected only
by a properly organized
homeowners association
with the consent of
majority of lot or unit
buyers actually residing in
the subdivision or
490
condominium project.

7) Access to Public Offices in the


Subdivisions:

No owner or developer shall deny


any person free access to any government
office or public establishment located within
the subdivision or which may be reached
only by passing through the subdivision.491

8) Right of Way to Public Road

It should be secured by the owner


and developer of a subdivision without
access to any public road or street. Such way
must be developed and maintained in
accordance with the requirement set forth by
the government.492

9) Organization of Homeowner
Association

a) Formation: Initiated by the


owner or developer.

b) Members: buyers and residents


of the project

c) Purpose: for the promotion and


protection of mutual interest of

490
Sec. 27
491
Sec. 28
492
Sec. 29

115
the buyers and residents, and for
the community development493

10) Mandatory Donations of Roads and


Open Spaces to Local
Government494

c. Grounds for partition of common areas, or dissolution


of the condominium

Voluntary Dissolution495 Involuntary Dissolution

Grounds: Grounds:

a) Three (3) years after damage or Those provided for by law on corporations.
destruction to the projects which renders
material part thereof unfit for its use prior
thereto, the project has not been rebuilt or
repaired substantially to its state prior to its
damage or destruction;

b) Damage or destruction to the project has


rendered one-half or more of its units
thereof untenantable and the owners
holding in aggregate more than 30% interest
in common areas are opposed to repair or
restoration of the project;

c) The project has been in existence in


excess of 50 years, that it is obsolete and
uneconomic, and that owners holding in
aggregate more than 30% interest in
common areas are opposed to repair or
restoration of the projects;

d) The project or material part thereof has


been condemned or expropriated and that
the project is no longer viable, or that the
owners holding in aggregate more than 70%

493
Sec. 30
494
P. D. No. 1216, amending Sec. 31 of this Decree
495
Action for dissolution under Rule 104 of the Rules of Court.

116
interest in common areas are opposed to
the continuation of the condominium
regime;

e) Conditions for partition under the


declaration of restrictions have been met.496

B. Sources of co-ownership

1. The Law497
2. Contracts
3. Succession498
4. Fortuitous event or chance499
5. Occupancy500

C. Rights of co-owners

1. Distinction between right to property owned in common and


full ownership over his/her ideal share

Right to property owned in common Right as to the ideal share of each co-owner:

a) Each has full ownership of his part and


a) To use the thing owned in common501
of his share of the fruits and benefits
b) To share in the benefits and charges in
proportion to the interest of each.502 b) Right to substitute another person its
enjoyment, except when personal rights are
c) To the benefits of prescription: involved
c) Right to alienate, dispose or encumber
496
Sec. 8, P.D. 4726
497
as in party walls, fences and in the legal conjugal partnership.
498
as when a person dies intestate, leaving his properties undivided to several heirs, who become co-
owners of the inheritance.
499
as in cases of commixtion and confusion caused by accident or chance, and of hidden treasure
accidentally discovered by a stranger on the land of another.
500
as when 2 persons catch a wild beast or gather forest products.
501
Limitations:
i. use according to the purpose for which it was intended
ii. interest of the co-ownership must not be prejudiced
iii. other co-owners must not be prevented from using it according to their own rights
502
Any stipulation to the contrary is void.

117
prescription by one co-owner benefits all.
d) Right to renounce part of his interest to
d) Repairs and taxes: to compel the others
reimburse necessary expenses incurred by
to share in the expenses of preservation
another co-owner
even if incurred without prior notice.503

e) Alterations: to oppose alterations made e) Transactions entered into by each co-


without the consent of all, even if owner only affect his ideal share.
beneficial.504

f) To protest against seriously prejudicial


decisions of the majority

g) Legal redemption: to be exercised within


30 days from written notice of sale of an
undivided share of another co-owner to a
stranger

h) To defend the co-ownerships interest in


court

i) To demand partition at any time

2. Right to oppose acts of alteration505

To oppose alterations made without the consent of all, even if beneficial.

3. Right to partition506

General rule:

Partition is demandable by any of the co-owners as a matter of right at any


time.

503
The co-owner being compelled may exempt himself from the payment of taxes and expenses by
renouncing his share equivalent to such taxes and expenses. The value of the property at the time of
the renunciation will be the basis of the portion to be renounced.
504
Alteration is an act by virtue of which a co-owner changes the thing from the state in which the
others believe it should remain, or withdraws it from the use to which they desire it to be intended.
Expenses to improve or embellish are decided by the majority
505
Alteration is an act by virtue of which a co-owner changes the thing from the state in which the
others believe it should remain, or withdraws it from the use to which they desire it to be intended.
Expenses to improve or embellish are decided by the majority
506
The division between 2 or more persons of real or personal property which they own in common so
that each may enjoy and possess his sole estate to the exclusion of and without interference from
others

118
Exceptions:

a. When there is a stipulation against it; but not to exceed 10 years.


b. When the condition of indivision is imposed by the donor or testator;
but not to exceed 20 years.
c. When the legal nature of the community prevents partition.
d. When partition would render the thing unserviceable.
e. When partition is prohibited by law
f. When another co-owner has possessed the property as exclusive owner
for a period sufficient to acquire it by prescription.

4. Right to contributions for expenses

Each co-owner shall have a right to compel the other co-owners to contribute to
the expenses of preservation507 of the thing or right owned in common and to the taxes in
proportion to their interest therein.

5. Waiver508

Any one of the co-owners may exempt himself from this obligation by renouncing
so much of his undivided interest as may be equivalent to his share of the expenses and
taxes.

507
Necessary expenses
Expenses of preservation include all those which, if not made, would endanger the existence of the
thing or reduce its value or productivity. They do not imply an improvement or increase.
There is no other remedy available against the co-owner who refuses to pay his share in the expenses
of preservation except an action to compel him to contribute such share.
Failure to contribute does not amount to a renunciation of any portion of share in the co-ownership.
The co-owner in default cannot be compelled to renounce his share therein. Renunciation is a voluntary
and free act.
508
No such waiver shall be made if it is prejudicial to the co-ownership
Rules on renunciation:
a. Total or partial.
b. Expressly made a tacit renunciation cannot produce any effect.
c. The renunciation is in reality a case of dacion en pago; the debt of the co-owner consisting of his
share in the expenses of preservation and taxes, is paid, not in money, but in an interest in property.
d. Since the renunciation refers to a portion equivalent in value to the share of the renouncing co-
owner in an existing debt, it is only logical that the other co-owners, who must should the debt of the
renouncer in exchange for the portion being renounced, should consent thereto.
e. Renunciation refers to existing debts and not to future expenses.
f. Renunciation is a free act; a co-owner may not be compelled to renounce.
g. However, waiver is not allowed if it is prejudicial to the coownership.

119
6. Right to redemption of co-owners share

Legal redemption: to be exercised within 30 days from written notice of sale of an


undivided share of another co-owner to a stranger

D. Termination/extinguishment509

The separation, division and assignment of the thing held in common among those
to whom it may belong; the thing itself may be divided, or its value.

After partition, the portion belonging to each co-owner has been identified and
localized, so that co-ownership, in its real sense, no longer exists.

1. Effects of partition

Partition shall not prejudice third persons who do not intervene in the partition

After partition, there should be mutual accounting of benefits, reimbursements,


payment of damages due to negligence or fraud, liability for defects of title and quality of
portion assigned to each.510

Part allotted to a co-owner at partition will be deemed to be possessed by such co-


owner from the time the co- ownership commenced.

Heir is exclusive owner of property adjudicated to him.

Co-owners reciprocally bound to each other for warranty of title and quality of part
given to each (hidden defect) after partition.

Obligation of warranty is proportionate to respective hereditary shares; insolvency


of one makes the others liable subject to reimbursement (joint liability).511

Each former co-owner is deemed to have had exclusive possession of the part
allotted to him for the entire period during which the co-possession lasted;

Partition confers upon each the exclusive title over his respective share.

509
No co-owner shall be obliged to remain in the co-ownership. Each co-owner may demand at any time
the partition of the thing owned in common.
510
See Art. 500
511
under Art. 1093

120
2. Rights against individual co-owners in case of partition512

3. Partition in case co-owners cannot agree

The thing shall be sold and its proceeds distributed to the co-owners.513

VII. Possession

The holding of a thing or enjoyment of a right,

A. Characteristics

Characterized by two (2) relations:

1. The possessors relation to the property itself; and


2. The possessors relation to the world.

B. How acquired

By the material occupation of a thing or the exercise of a right, or by the fact that it
is subject to the action of our will, or by the proper acts and legal formalities established
for acquiring such right.514

512
See Effects of partition, supra
513
Art. 498
The sale of the property held in common is resorted to when (1) the right to partition the property
among the co-owners is invoked by any of them but because of the nature of the property, it cannot be
subdivided or its subdivision [See Article 495 of the New Civil Code] would prejudice the interests of the
co-owners (See Section 5 of Rule 69 of the Revised Rules of Court) and (2) the co-owners are not in
agreement as to who among them shall be allotted or assigned the entire property upon
reimbursement of the shares of the other co-owners (Marina Reyes, et al. vs. Hon. Alfredo Concepcion,
et al., G.R. No. 56550, Oct. 1, 1990
The sale may be public or private, and the purchaser may be a co-owner or a third person.
514
Art. 531

121
C. Effects of Possession

1. Possessor in Good Faith

He is entitled to the fruits received before the possession is legally interrupted.

Natural and industrial fruits are considered received from the time they are
gathered or severed.

Civil fruits are deemed to accrue daily and belong to the possessor in good faith in
that proportion.515

He is deemed a possessor in good faith who is not aware that there exists in his title
or mode of acquisition any flaw which invalidates it.

Mistake upon a doubtful or difficult question of law may be the basis of good
516
faith.

Good faith is always presumed, and upon him who alleges bad faith on the part of
a possessor rests the burden of proof.517

a. Right to pending fruits

If at the time the good faith ceases, there should be any natural or industrial fruits,
the possessor shall have a right to a part of the expenses of cultivation, and to a part of the
net harvest, both in proportion to the time of the possession.

The charges shall be divided on the same basis by the two possessors.

The owner of the thing may, should he so desire, give the possessor in good faith
the right to finish the cultivation and gathering of the growing fruits, as an indemnity for
his part of the expenses of cultivation and the net proceeds; the possessor in good faith
who for any reason whatever should refuse to accept this concession, shall lose the right to
be indemnified in any other manner.518

515
Art. 544
516
Art. 526
517
Art. 527
518
Art. 545

122
b. Right to be reimbursed

(1) Necessary and useful expenses

Necessary expenses shall be refunded to every possessor; but only the possessor in
good faith may retain the thing until he has been reimbursed therefor.

Useful expenses shall be refunded only to the possessor in good faith with the
same right of retention, the person who has defeated him in the possession having the
option of refunding the amount of the expenses or of paying the increase in value which
the thing may have acquired by reason thereof.519

If the useful improvements can be removed without damage to the principal thing,
the possessor in good faith may remove them, unless the person who recovers the
possession exercises the option under paragraph 2 of the preceding article.

(2) Expenses for pure luxury

Not to be refunded to the possessor in good faith; but he may remove the
ornaments with which he has embellished the principal thing if it suffers no injury thereby,
and if his successor in the possession does not prefer to refund the amount expended.520

2. Possessor in Bad Faith

He who builds, plants or sows in bad faith on the land of another, loses what is
built, planted or sown without right to indemnity.521

The possessor in bad faith shall reimburse the fruits received and those which the
legitimate possessor could have received, and shall have a right only to the expenses
mentioned in paragraph 1 of Article 546522 and in Article 443.523 The expenses incurred in
improvements for pure luxury or mere pleasure shall not be refunded to the possessor in
bad faith, but he may remove the objects for which such expenses have been incurred,
provided that the thing suffers no injury thereby, and that the lawful possessor does not
prefer to retain them by paying the value they may have at the time he enters into
possession.524

519
Art. 546
520
Art. 548
521
Art. 449
522
supra
523
See Reference
524
Art. 549

123
A possessor in good faith shall not be liable for the deterioration or loss of the
thing possessed, except in cases in which it is proved that he has acted with fraudulent
intent or negligence, after the judicial summons.525

A possessor in bad faith shall be liable for deterioration or loss in every case, even
if caused by a fortuitous event.

D. Loss or Unlawful Deprivation of a Movable

The possession of movable property acquired in good faith is equivalent to a title.


Nevertheless, one who has lost any movable or has been unlawfully deprived thereof, may
recover it from the person in possession of the same.526

If the possessor of a movable lost or which the owner has been unlawfully
deprived, has acquired it in good faith at a public sale, the owner cannot obtain its return
without reimbursing the price paid therefor.

Where goods are sold by a person who is not the owner thereof, and who does not
sell them under authority or with the consent of the owner, the buyer acquires no better
title to the goods than the seller had, unless the owner of the goods is by his conduct
precluded from denying the seller's authority to sell.

Nothing, however, shall affect: xxx

(3) Purchases made in a merchant's store, or in fairs, or markets, in accordance with


the Code of Commerce and special laws527

1. Period to Recover

Four (4) years if in good faith.528

Eight (8) years if in bad faith.

The provisions of Articles 559 and 1505529 shall be observed with regard to the
right of the owner to recover personal property lost or of which he has been illegally
deprived, as well as with respect to movables acquired in a public sale, fair, or market, or
from a merchant's store.530

525
Art. 552
526
Art. 559
527
Art. 1505 (3)
528
Ten (10) years in case of immovables (Art. 1134)
529
supra
530
Art. 1132

124
Movables possessed through a crime can never be acquired through prescription by
the offender.531

Actions to recover movables shall prescribe eight (8) years from the time the
possession thereof is lost, unless the possessor has acquired the ownership by prescription
for a less period, according to Articles 1132,532 and without prejudice to the provisions of
Articles 559, 1505, and 1133.533

2. Finder of Lost Movable

Whoever finds a movable, which is not treasure, must return it to its previous
possessor. If the latter is unknown, the finder shall immediately deposit it with the mayor
of the city or municipality where the finding has taken place.

The finding shall be publicly announced by the mayor for two consecutive weeks in
the way he deems best.

If the movable cannot be kept without deterioration, or without expenses which


considerably diminish its value, it shall be sold at public auction eight days after the
publication.

Six months from the publication having elapsed without the owner having
appeared, the thing found, or its value, shall be awarded to the finder. The finder and the
owner shall be obliged, as the case may be, to reimburse the expenses.534

If the owner should appear in time, he shall be obliged to pay, as a reward to the
finder, one-tenth of the sum or of the price of the thing found.535

3. Distinguished from voidable title

Where the seller of goods has a voidable title thereto, but his title has not been
avoided at the time of the sale, the buyer acquires a good title to the goods, provided he
buys them in good faith, for value, and without notice of the seller's defect of title.536

531
Art. 1133
532
supra
533
Id., Art. 1140
534
Art. 719
535
Art. 720
536
Art. 1506

125
E. In concept of owner, holder, in ones own name, in name of
another537

In the concept of In the concept of In ones own name In the name of


owner holder another

Possessor of the Possessor holds it Possessor claims the For whom the thing
thing or right, by his merely to keep or thing for himself is held by the
actions, is enjoy it, the possessor
considered or is ownership
believed by other pertaining to another
people as the owner, person; possessor
regardless of the acknowledges in
good or bad faith of another a superior
the possessor right which he
believes to be
ownership.

F. Rights of the possessor

1. Right to be respected in his possession; if disturbed protected by means


established by law; spoliation

2. Possession acquired and enjoyed in concept of owner538 can serve as title for
acquisitive prescription

3. Person in concept of owner has in his favor the legal presumption of just title539

4. Possession of real property presumes that movables are included

5. Co-possessors 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

6. Possessor in good faith entitled to fruits received before possession is legally


interrupted540

537
None of these holders assert a claim of ownership in himself over the thing but they may be
considered as possessors in the concept of owner, or under claim of ownership, with respect to the right
they respectively exercise over the thing.
538
a. Possession has to be in concept of owner, public, peaceful and uninterrupted
b. Title short of ownership
539
prima facie
540
natural and industrial gathered or severed; civil accrue daily

126
7. Possessor in good faith entitled to part of net harvest and part of expenses of
cultivation if there are natural or industrial fruits;541 owner has option to require possessor
to finish cultivation and gathering of fruits and give net proceeds as indemnity for his part
of expenses; if possessor in good faith refuses barred from indemnification in other
manner

8. Possessor has right to be indemnified for necessary expenses whether in good


faith or in bad faith; Possessor in good faith has right of retention over thing unless
necessary expenses paid by owner

9. Possessor in good faith has right to be reimbursed for useful expenses with right
of retention; owner has option of paying expenses or paying the increase in value of
property which thing acquired by reason of useful expenses

10. Possessor in good faith may remove improvements if can be done w/o damage
to principal thing- unless owner exercises option of paying; possessor in bad faith not
entitled.

11. Possessor in good faith and bad faith may not be entitled to payment for
luxurious expense but may remove them provided principal is not injured provided
owner does not refund the amount expended

12. Improvements caused by nature or time to inure to the benefit of person who
has succeeded in recovering possession

13. Wild animals possessed while in ones control; domesticated possessed if they
retain habit of returning back home

14. One who recovers, according to law, possession unjustly lost is deemed to have
enjoyed it w/o interruption

541
proportionate to time of possession

127
G. Loss/termination

A possessor may lose his possession:

(1) By the abandonment of the thing;542

(2) By an assignment543 made to another either by onerous or gratuitous title;

(3) By the destruction or total loss of the thing544, or because it goes out of
commerce;

(4) By the possession of another, subject to the provisions of article 537545, if the
new possession has lasted longer than one year546. But the real right of possession is not
lost till after the lapse of ten years.547

(5) by recovery by lawful owner or possessor548

VIII. Usufruct

A. Characteristics

1. A real right;
2. Of temporary duration;
3. Transmissible;
4. May be constituted on real or personal property, consummable or non
consummable, tangible or intangible, the ownership of which is vested on another

542
The voluntary renunciation of all rights which a person has over a thing thereby allowing a third
person to acquire ownership or possession thereof by means of occupancy;
By voluntary abandonment, thing becomes without an owner or possessor and is converted into res
nullius and may thus be acquired by a third person by occupation;
Abandonment which converts the thing into res nullius, ownership of which may be acquired by
occupation can hardly apply to land, as to which said mode of acquisition is not available
543
The complete transmission of the thing or right to another by any lawful manner; -the effect is that
he who was the owner or possessor is no longer so
544
A thing is lost when it perishes, or goes out of commerce, or disappears in such a way that its
existence is unknown, or cannot be recovered
545
see Reference
546
This refers to possession de facto and not de jure
547
Art. 555
548
Recovered in an reivindicatory action or in an action to recover the better right of possession

128
B. Classification

1. Whether or not impairment of object is - normal;


allowed - abnormal

2. Origin - legal;
- voluntary;
- mixed

3. Number of usufructuaries: - simple;


- multiple which may either
be :
- simultaneous;
- successive

4. Terms or conditions: - pure;


- with a term or period;
- conditional

5. Quality or kind of object: - of things;


- of rights

6. Quantity or extent of object - total;


- partial

7. Extent of owners patrimony - universal;


- particular

129
C. Rights and obligations of usufructuary

Rights Obligations549

1. To civil, natural & industrial fruits of 1. Pay expenses to 3rd persons for
property cultivation & production at beginning of
usufruct; whose who have right to fruits
2. To hidden treasure as stranger should reimburse expenses incurred

3. To transfer usufructuary rights 2. Generally, usufructuary has no liability


gratuitous or onerous; but is co-terminus when due to wear & tear, thing deteriorates,
with term of usufruct; fruits proportionate obliged to return in that state; except when
at duration of usufruct; but cant do acts of there is fraud or negligence, then he shall be
ownership such as alienation or conveyance liable
except when property is:
3. Before entering into usufructuary:
a. consumable
a. Notice of inventory of property551
b. intended for sale
b. Posting of security552
c. appraised when delivered; if not
appraised & consumable return same
quality550 4. Take care of property as a good father of
family
4. Right not exempt from execution and
can be sold at public auction by owner 5. Obliged to make ordinary repairs wear
& tear due to natural use of thing and are
5. Naked owner still have rights but w/o indispensable for preservation; owner may
prejudice to usufructuary; may still exercise make them at expense of usufructuary
act of ownership - bring action to preserve during existence of usufruct

6. To fruits growing at time usufruct begins; 6. Obliged to make expenses due to his
growing fruits at termination of usufruct fault; cannot escape by renouncing usufruct
belongs to owner
7. Pay legal interest from extraordinary
7. To necessary expenses from cultivation at expenses made by owner
end of usufruct
8. Payment of expenses, charges & taxes
8. To enjoy accessions & servitudes in its affecting fruits
favor & all benefits inherent therein
549
Arts. 583-602
550
mutuum
551
appraisal of movables & description
552
1. not applicable to parents who are usufructuary of children except when 2nd marriage contracted
2. excused allowed by owner, not required by law or no one will be injured

130
9. To make use of dead trunks of fruit 9. Payment of interest on amount paid by
bearing trees & shrubs or those owner charges on capital
uprooted/cut by accident but obliged to
plant anew 10. Obliged to notify owner of act of 3rd
person prejudicial to rights of ownership
10. Usufructuary of woodland ordinary he is liable if he does not do so for damages
cutting as owner does habitually or custom as if it was caused through his own fault
of place; cannot cut down trees unless it is
for the restoration of improvement of 11. Expenses, cost & liabilities in suits
things in usufruct must notify owner first brought with regard to usufructuary borne
by usufructuary
11. To leave dead, uprooted trees at the
disposal of owner with right to demand that
owner should clear & remove them if
caused by calamity or extraordinary event
impossible to replace them

12. To oblige owner to give authority &


furnish him proofs if usufruct is extended to
recover real property or real right

13. To necessary expenses

14. To introduce useful & luxurious


expenses but with no obligation of
reimbursement on part of owner; may
remove improvement if can be done w/o
damage

15. To set-off improvements against


damages he made against the property

16. To administer when property is co-


owned; if co-ownership cease usufruct of
part allotted to co-owner belongs to
usufructuary not affected

17. To demand the increase in value of


property if owner did not spend for
extraordinary repairs when urgent &
necessary for preservation of thing

131
D. Rights of the owner

1. Alienate thing
2. Cant alter form or substance
3. Cant do anything prejudicial to usufructuary
4. Construct any works
5. Make any improvement provided it does not diminish value or usufruct or
prejudice right of usufructuary

E. Extinction/termination

1. Death of the usufructuary;


2. Expiration of period or fulfillment of condition;
3. Merger;
4. Renunciation;
5. Loss of the thing;
6. Termination of right of owner;
7. Prescription;
8. Other causes553

IX. Easements

An easement or servitude is an encumbrance imposed upon an immovable for the


benefit of another immovable belonging to a different owner.

The immovable in favor of which the easement is established is called the


dominant estate; that which is subject thereto, the servient estate.554

Easements may be continuous or discontinuous, apparent or non-apparent.

Continuous easements are those the use of which is or may be incessant, without
the intervention of any act of man.

553
such as emancipation of the child (Art. 603)
A usufruct is not extinguished by bad use of the thing in usufruct
554
Art. 613

132
Discontinuous easements are those which are used at intervals and depend upon
the acts of man.

Apparent easements are those which are made known and are continually kept in
view by external signs that reveal the use and enjoyment of the same.

Nonapparent easements are those which show no external indication of their


existence.555

Easements are also positive or negative.

A positive easement is one which imposes upon the owner of the servient estate
the obligation of allowing something to be done or of doing it himself, and a negative
easement, that which prohibits the owner of the servient estate from doing something
which he could lawfully do if the easement did not exist.556

A. Characteristics

a) It is a real right but will affect third persons only when duly registered
b) It is enjoyed over another immovable, never on ones own property
c) It involves two neighboring estates (in case of real easements)
d) It is inseparable from the estate to which it is attached, and, therefore, cannot be
alienated independently of the estate
e) It is indivisible for it is not affected by the division of the estate between two or
more persons
f) It is a right limited by the needs of the dominant owner or estate, without
possession
g) It cannot consist in the doing of an act unless the act is accessory in relation to a
real easement
h) It is a limitation on the servient owners rights of ownership for the benefit of
the dominant owner; and, therefore, it is not presumed.

555
Art. 615
556
Art. 616

133
B. Classification

1. Legal easements

They are easements imposed by law and which have for their object either public
use or the interest of private persons.

a. Right of way

The right granted to the owner of an estate which is surrounded by other estates
belonging to other persons and without an adequate outlet to a public highway to demand
that he be allowed a passageway throughout such neighboring estates after payment of
proper indemnity.557

2. Voluntary easements558

Constituted by the will of the parties or of a testator.

The owner possessing capacity to encumber property may constitute voluntary


servitude. If there are various owners, all must consent; but consent once given is not
revocable.

a. Effect of Zoning ordinance

The existence of a zoning ordinance is immaterial. The ordinance might be


repealed at any time; and if so repealed, this prohibition would not be enforceable against
new purchasers of the land, who may be ignorant thereof.559

557
Requisites:
1. Claimant must be an owner of enclosed immovable or one with real right
2. There must be no adequate outlet to a public highway
3. Right of way must be absolutely necessary
4. Isolation must not be due to the claimants own act
5. Easement must be established at the point least prejudicial to the servient estate
6. Payment of proper indemnity
Special cause of extinction: the opening of a public road, or joining the dominant tenement to
another with exit on a public road.
The extinction is NOT automatic. There must be a demand for extinction coupled with tender of
indemnity by the servient owner.
558
Art. 688; see Reference
559
see In re: Petition for cancellation of condition annotated on Transfer certificate of title no. 54417,
Quezon city, Dra. Rafaela v. Trias, vs. Gregorio Araneta, Inc., G.R. No. L-20786, October 30, 1965

134
C. Modes of Acquiring Easements

1. Compulsory easements

Continuous and apparent easements are acquired either by virtue of a title or by


prescription of ten years.560

In order to acquire by prescription the easements referred to, the time of


possession shall be computed thus: in positive easements, from the day on which the
owner of the dominant estate, or the person who may have made use of the easement,
commenced to exercise it upon the servient estate; and in negative easements, from the day
on which the owner of the dominant estate forbade, by an instrument acknowledged
before a notary public, the owner of the servient estate, from executing an act which would
be lawful without the easement.561

Continuous nonapparent easements, and discontinuous ones, whether apparent or


not, may be acquired only by virtue of a title.562

The absence of a document or proof showing the origin of an easement which


cannot be acquired by prescription may be cured by a deed of recognition by the owner of
the servient estate or by a final judgment.563

The existence of an apparent sign of easement between two estates, established or


maintained by the owner of both, shall be considered, should either of them be alienated,
as a title in order that the easement may continue actively and passively, unless, at the time
the ownership of the two estates is divided, the contrary should be provided in the title of
conveyance of either of them, or the sign aforesaid should be removed before the
execution of the deed. This provision shall also apply in case of the division of a thing
owned in common by two or more persons.564

2. Easement of light and view

When the distances in Article 670565 are not observed, the owner of a wall which is
not party wall, adjoining a tenement or piece of land belonging to another, can make in it
openings to admit light at the height of the ceiling joints or immediately under the ceiling,
and of the size of thirty centimeters square, and, in every case, with an iron grating
imbedded in the wall and with a wire screen.

560
Art. 620
561
Art. 621
562
Art. 622
563
Art. 623
564
Art. 624
565
See Reference

135
Nevertheless, the owner of the tenement or property adjoining the wall in which
the openings are made can close them should he acquire part-ownership thereof, if there
be no stipulation to the contrary.

He can also obstruct them by constructing a building on his land or by raising a


wall thereon contiguous to that having such openings, unless an easement of light has been
acquired.566

No windows, apertures, balconies, or other similar projections which afford a


direct view upon or towards an adjoining land or tenement can be made, without leaving a
distance of two meters between the wall in which they are made and such contiguous
property.

Neither can side or oblique views upon or towards such conterminous property be
had, unless there be a distance of sixty centimeters.

The nonobservance of these distances does not give rise to prescription.567

The distance referred to shall be measured in cases of direct views from the outer
line of the wall when the openings do not project, from the outer line of the latter when
they do, and in cases of oblique view from the dividing line between the two properties.568

The provisions of Article 670569 are not applicable to buildings separated by a


public way or alley, which is not less than three meters wide, subject to special regulations
and local ordinances.570

Whenever by any title a right has been acquired to have direct views, balconies or
belvederes overlooking an adjoining property, the owner of the servient estate cannot build
thereon at less than a distance of three meters to be measured in the manner provided in
Article 671.571 Any stipulation permitting distances less than those prescribed in article 670
is void.572

566
Art. 669
567
Art. 670
568
Art. 671
569
supra
570
Art. 672
571
supra
572
Art. 673

136
D. Rights and obligations of dominant and subservient estate

E. How terminated

X. Nuisance

A. Definition

A nuisance is any act, omission, establishment, business, condition of property, or


anything else which:

(1) Injures or endangers the health or safety of others; or


(2) Annoys or offends the senses; or
(3) Shocks, defies or disregards decency or morality; or
(4) Obstructs or interferes with the free passage of any public highway or street, or
any body of water; or
(5) Hinders or impairs the use of property.573

B. Classification

Public nuisance Private nuisance Mixed nuisances

The doing of or the failure One which violates only A thing may be a private
to do something that private rights and produces nuisance without being a
injuriously affects safety, damage to but one or few public one or a public
health, or morals of the persons, and cannot be said nuisance without being a
public, or works some to be public. private one.
substantial annoyance,
inconvenience, or injury to
the public.

573
Art. 694

137
C. Remedies

Public nuisance574 Private nuisance

1. Prosecution under the Penal Code or any 1. A civil action; or


other local ordinance;
2. Abatement, without judicial
2. Civil action; proceedings.576

3. Abatement, without judicial


proceedings575

Any person injured by a private nuisance may abate it by removing, or if necessary,


by destroying the thing which constitutes the nuisance, without committing a breach of the
peace or doing unnecessary injury. However, it is indispensable that the procedure for
extrajudicial abatement of a public nuisance by a private person be followed.577

574
Art. 699
575
The remedies are not exclusive but cumulative;
All of the may be availed of by public officers, and the last two by private persons, if the nuisance is
especially injurious to the latter
Role of district health officer and others with respect to public nuisance:
The district health officer is charged with the duty to see to it that one or all of the remedies against a
public nuisance are availed of;
He shall determine whether the third remedy, a is the best remedy against a public nuisance;
the remedy must be availed of only with the intervention of the district health officer;
It does not necessarily follow that the failure to observe art. 702 is in itself a ground for the award for
damages;
Art. 702 does not empower the district officer to abate a public nuisance to the exclusion of all other
authorities;
The action must be commenced by the city or municipal mayor; but a private person may also file an
action if the public nuisance is especially injurious to him
576
Art. 705
577
Art. 706

138
XI. Modes of Acquiring Ownership

Ownership is acquired by occupation and by intellectual creation.

Ownership and other real rights over property are acquired and transmitted by law,
by donation, by testate and intestate succession, and in consequence of certain contracts,
by tradition.

They may also be acquired by means of prescription.578

A. Occupation

Things appropriable by nature which are without an owner579 are acquired by


occupation.580

B. Donation

1. Definition

An act of liberality whereby a person disposes gratuitously of a thing or right in


favor of another, who accepts it.581

When a person gives to another a thing or right on account of the latter's merits or
of the services rendered by him to the donor, provided they do not constitute a
demandable debt, or when the gift imposes upon the donee a burden which is less than the
value of the thing given, there is also a donation582

Acceptance must be made during the lifetime of the donor and of the donee.583

578
Art. 712
579
such as animals that are the object of hunting and fishing, hidden treasure and abandoned movables
580
Art. 713
581
Art. 725
582
Art. 726
583
Art. 746

139
2. Characteristics

a. Extent to which donor may donate property584

A person may not donate more than he can give by will and a person may not
receive by way of donation more than what the donor is allowed by law to give by will;
otherwise the donation shall be inofficious and shall be reduced with regard to the
excess.585

b. Reservations and reversions586

The donation may comprehend all the present property of the donor, or part
thereof, provided he reserves, in full ownership or in usufruct, sufficient means for the
support of himself, and of all relatives who, at the time of the acceptance of the donation,
are by law entitled to be supported by the donor. Without such reservation, the donation
shall be reduced in petition of any person affected.587

The donor may provide for reversion, whereby the property donated shall go
back to the donor or some other person.588

584
What may be given:
All or part of donors present property provided he reserves sufficient means for the support of the
ff:
a) himself
b) relatives who by law are entitled to his support
c) legitimes shall not be impaired
when w/o reservation or if inofficious, may be reduced on petition of persons affected.
Except: conditional donation & donation mortis causa
Except: future property
585
See Art. 752
586
1. Future property cannot be donated.
2. Present property that can be donated:
a) if the donor has forced heirs: he cannot give or receive by donation more than he can give of
receive by will
b) if the donor has no forced heirs: donation may include all present property provided he
reserves in full ownership or in usufruct:
1) the amount necessary to support him, and
2) those relatives entitled to support from him
3) property sufficient to pay the donors debt contracted prior to the donation.
3. Donation should not prejudice creditors
4. Donee must reserve sufficient means for his support and for his relatives which are entitled to be
supported by him.
587
A donor may donate all his present property or part thereof provided he reserves sufficient property
in ownership or in usufruct for the support of himself and of all relatives who are entitled to be
supported by him at the time of the perfection of the donation
588
See Art. 757
A reversion in favor of the donor may be validly established for any case and circumstances;

140
3. Kinds

a. Donation inter vivos589

When the donor intends that the donation shall take effect during the lifetime of
the donor, though the property shall not be delivered till after the donor's death.

The fruits of the property from the time of the acceptance of the donation, shall
pertain to the donee, unless the donor provides otherwise.590

b. Donation By Reason of Marriage

Those which are made before its celebration, in consideration of the same, and in
favor of one or both of the future spouses.591

These donations are governed by the rules on ordinary donations, insofar as they
are not modified by the following articles592

A donation by reason of marriage may be revoked by the donor in the following


cases:

(1) If the marriage is not celebrated or judicially declared void ab initio except
donations made in the marriage settlements, which shall be governed by Article 81;593
(2) When the marriage takes place without the consent of the parents or guardian,
as required by law;
(3) When the marriage is annulled, and the donee acted in bad faith;
(4) Upon legal separation, the donee being the guilty spouse;
(5) If it is with a resolutory condition and the condition is complied with;
(6) When the donee has committed an act of ingratitude as specified by the
provisions of the Civil Code on donations in general594

If the revision is in favor of other persons, such other persons must be living at the time of the
donation
589
In case of doubt with regard to nature of donation: inter vivos
590
Art. 729
591
Art. 82, FC
592
Art. 83, id.
593
supra
594
Art. 86, id.

141
c. Donation Mortis Causa

Donations which are to take effect upon the death of the donor partake of the
nature of testamentary provisions, and shall be governed by the rules on Succession.595

d. Onerous Donation

Donations with an onerous cause shall be governed by the rules on contracts and
remuneratory donations as regards that portion which exceeds the value of the burden
imposed.596
e. Simple, modal, conditional

Simple Conditional Modal

Gratuitous Valuable consideration is Imposes upon the donee


imposed but value is less a burden which is less
than value of thing than the value of the
donated thing donated

4. Formalities required

a. How made and accepted

Donations of movable property Donation of immovable property:

a. With simultaneous delivery of a. Must be in a public instrument specifying


property donated: the property donated and the burdens
assumed by donee, regardless of value
1. it may be oral/written
P5,000 or less; b. Acceptance must be either:
2.. if value exceeds P5,000
written in public or private 1. in the same instrument; or
document
2. in another public instrument, notified
to the donor in authentic form, and noted in
b. Without simultaneous delivery:
both deeds

595
Art. 728
Title conveyed upon donors death
Void if donor survives done
Always revocable
Must comply with the formalities required by law for the execution of wills
596
Art. 733

142
The donation and acceptance
must be written in a public or
private instrument, regardless of
value.

b. Perfection597

c. Differences between formalities for donation of real,


personal properties

(1) Movables

May be made orally or in writing.

An oral donation requires the simultaneous delivery of the thing or of the


document representing the right donated.

If the value of the personal property donated exceeds five thousand pesos, the
donation and the acceptance shall be made in writing. Otherwise, the donation shall be
void.598

(2) Immovables

In order that the donation may be valid, it must be made in a public document,
specifying therein the property donated and the value of the charges which the donee must
satisfy.
The acceptance may be made in the same deed of donation or in a separate public
document, but it shall not take effect unless it is done during the lifetime of the donor.
If the acceptance is made in a separate instrument, the donor shall be notified
thereof in an authentic form, and this step shall be noted in both instruments.599

597
See (a) How made and accepted, supra
598
Art. 748
599
Art. 749

143
5. Qualifications of donor, donee

Donor Donee:

All persons who may contract and 1. natural & juridical persons w/c are not especially
dispose of their property disqualified by law

2. minors & other incapacitated

a) by themselves
- if pure & simple donation
- if it does not require written
acceptance

b) by guardian, legal representatives if needs


written acceptance

1. natural guardian not more than P50,000

2. court appointed - more than P50,000

3. conceived & unborn child, represented by


person who would have been guardian if
already born

6. Effects of donation/limitations

a. In general

Effects of donation Limitations on donation of property:

1. donee may demand the delivery of the 1. Future property cannot be donated.
thing donated
2. Present property that can be donated:
2. donee is subrogated to the rights of the
donor in the property a) if the donor has forced heirs: he
cannot give or receive by donation
3. in donations propter nuptias, the donor more than he can give of receive by
must release the property from will
encumbrances, except servitudes
b) if the donor has no forced heirs:
4. donors warranty exists if donation may include all present
property provided he reserves in full

144
a. expressed ownership or in usufruct:
b. donation is propter nuptias
c. donation is onerous 1) the amount necessary to support
d. donor is in bad faith him, and
2) those relatives entitled to
5. when the donation is made to several support from him
donees jointly, they are entitled to equal 3) property sufficient to pay the
portions, without accretion, unless the donors debt contracted prior to
contrary is stipulated. the donation.

3. Donation should not prejudice creditors

4. Donee must reserve sufficient means for


his support and for his relatives which are
entitled to be supported by him.

b. Double donations

Rule:
Priority in time, priority in right
1. If movable one who first take possession in good faith
2. If immovable one who recorded in registry of property in good faith
- no inscription, one who first took possession in good faith
- in absence thereof, one who can present oldest title600

c. Excessive/inofficious

1. Shall be reduced with regards to the excess


2. Action to reduce to be filed by heirs who have right to legitimate at time of
donation
3. Donees/creditors of deceased donor cannot ask for reduction of donation
4. If there are 2 or more donation: recent ones shall be suppressed
5. If 2 or more donation at same time treated equally & reduction is pro rata but
donor may impose preference which must be expressly stated in donation

600
Art. 1544

145
d. Scope of amount

The donation may comprehend all the present property of the donor, or part
thereof, provided he reserves, in full ownership or in usufruct, sufficient means for the
support of himself, and of all relatives who, at the time of the acceptance of the donation,
are by law entitled to be supported by the donor. Without such reservation, the donation
shall be reduced in petition of any person affected.601

Donations cannot comprehend future property.

By future property is understood anything which the donor cannot dispose of at


the time of the donation.602

The provisions of Article 750603 notwithstanding, no person may give or receive, by


way of donation, more than he may give or receive by will.
The donation shall be inofficious in all that it may exceed this limitation.604

e. In fraud of creditors

There being no stipulation regarding the payment of debts, the donee shall be
responsible therefor only when the donation has been made in fraud of creditors.
The donation is always presumed to be in fraud of creditors, when at the time
thereof the donor did not reserve sufficient property to pay his debts prior to the
donation.605

601
Art. 750
602
Art. 751
603
See Reference
604
Art. 752
605
Art. 759

146
7. Void Donations

(1) Made between persons who were guilty of adultery or concubinage at the time
of the donation;

(2) Made between persons found guilty of the same criminal offense, in
consideration thereof;

(3) Made to a public officer or his wife, descendants and ascendants, by reason of
his office.

In the case referred to in No. 1, the action for declaration of nullity may be brought
by the spouse of the donor or donee; and the guilt of the donor and donee may be proved
by preponderance of evidence in the same action.606

Incapacity to succeed by will shall be applicable to donations inter vivos.607

The following are incapable of succeeding:

(1) The priest who heard the confession of the testator during his last illness, or the
minister of the gospel who extended spiritual aid to him during the same period;

(2) The relatives of such priest or minister of the gospel within the fourth degree,
the church, order, chapter, community, organization, or institution to which such priest or
minister may belong;

(3) A guardian with respect to testamentary dispositions given by a ward in his


favor before the final accounts of the guardianship have been approved, even if the testator
should die after the approval thereof; nevertheless, any provision made by the ward in
favor of the guardian when the latter is his ascendant, descendant, brother, sister, or
spouse, shall be valid;

(4) Any attesting witness to the execution of a will, the spouse, parents, or children,
or any one claiming under such witness, spouse, parents, or children;

(5) Any physician, surgeon, nurse, health officer or druggist who took care of the
testator during his last illness;

(6) Individuals, associations and corporations not permitted by law to inherit.608

606
Art. 739
607
Art. 740
608
Art. 1027

147
8. Revocation609 or reduction610

a. Grounds for revocation611

Revocation Reduction612

i. birth, appearance, or adoption of a child;


i. failure of the donor to reserve sufficient
means for support of himself or dependent
ii.. non fulfillment of a resolutory relatives;
condition imposed by the donor;
ii. failure of the donor to reserve sufficient
iii. ingratitude of the donee613 property to pay off his existing debts;

iii. inofficiousness, that is, the donation


exceeds that which the donor can give by
will.
b. How done

Birth of child Non-fulfillment of condition Ingratitude

Ipso jure revocation, no need needs court action needs court action
for action., court decision is
merely declaratory

Extent: portion which may Extent: whole portion but Extent: Whole portion
impair legitime of heirs court may rule partial returned

609
Affects the whole donation and is allowed during the lifetime of the donor
Applies only to donation inter vivos
Not applicable to onerous donations
610
Generally affects a portion only of the donation and is allowed during the lifetime of the donor or
after his death
611
Art. 760
612
ibid
613
Donee commits offense against person, honor, property of donor, spouse, children under his
parental authority
Donee imputes to donor any criminal offense or any cat involving moral turpitude even if he should
prove it unless act/crime has been committed against donee himself, spouse or children under his
parental authority
Donee unduly refuses to give support to donor when legally or morally bound to give support to
donor

148
revocation only

Property must be returned Property in excess Property to be returned

Alienation/mortgages done Alienations/mortgages Prior ones are void; demand


prior to recording in Register imposed are void unless value of property when
of Deeds: registered with Register of alienated and cant be
If already sold or cannot Deeds recovered or redeemed from
be returned the value must 3rd persons
be returned
If mortgaged donor
may redeem the mortgage
with right to recover from
done

Fruits to be returned at filing Fruits to be returned at filing


of action for revocation of complaint

Prescription of action is 4 Prescription is 4 years from Prescription is 1 year from


years from birth, etc. non-fulfilment knowledge of fact and it was
possible for him to bring
action

Action cannot be renounced Action cannot be renounced


in advance

Right of action transmitted Right of action at instance of Heirs cant file action
to heirs donor but may be
transmitted to heirs

Action extends to donees Action does not extend to


heirs donees heirs

149
c. Effects

Upon the revocation or reduction of the donation by the birth, appearance or


adoption of a child, the property affected shall be returned or its value if the donee has sold
the same.614

In this case, the property donated shall be returned to the donor, the alienations
made by the donee and the mortgages imposed thereon by him being void, with the
limitations established, with regard to third persons, by the Mortgage Law and the Land
Registration laws.615

Although the donation is revoked on account of ingratitude, nevertheless, the


alienations and mortgages effected before the notation of the complaint for revocation in
the Registry of Property shall subsist. Later ones shall be void.616

The donor shall have a right to demand from the donee the value of property
alienated which he cannot recover from third persons, or the sum for which the same has
been mortgaged.

The value of said property shall be fixed as of the time of the donation.617

When the donation is revoked for any of the causes stated in Article 760, 618 or by
reason of ingratitude, or when it is reduced because it is inofficious, the donee shall not
return the fruits except from the filing of the complaint.

If the revocation is based upon noncompliance with any of the conditions imposed
in the donation, the donee shall return not only the property but also the fruits thereof
which he may have received after having failed to fulfill the condition.619

Donations which in accordance with the provisions of Article 752,620 are


inofficious, bearing in mind the estimated net value of the donor's property at the time of
his death, shall be reduced with regard to the excess; but this reduction shall not prevent
the donations from taking effect during the life of the donor, nor shall it bar the donee
from appropriating the fruits.

614
Art. 762
615
Art. 764, par. 2
616
Art. 766
617
Art. 767
618
See Reference
619
Art. 768
620
supra

150
For the reduction of donations, the provisions of Articles 911 and 912621 of this
Code shall also govern.

d. Prescription

The donation is revoked ipso jure by operation of law, by the happening of any of
the events mentioned in Article 760; 622

The period to bring an action is four years, and the day from which the period shall
begin to run depends upon the cause for the revocation or reduction;

If the donor dies within the period of prescription, the action is transmitted to his
legitimate and illegitimate children and descendants;

The surviving spouse and the ascendants of the donor are not included.

c. Inofficious Donations

Every donation inter vivos, made by a person having no children or descendants,


legitimate or legitimated by subsequent marriage, or illegitimate, may be revoked or
reduced by the happening of any of these events:

(1) If the donor, after the donation, should have legitimate or legitimated or
illegitimate children, even though they be posthumous;

(2) If the child of the donor, whom the latter believed to be dead when he made
the donation, should turn out to be living;

(3) If the donor subsequently adopt a minor child.623

The donation shall be revoked or reduced insofar as it exceeds the portion that may
be freely disposed of by will, taking into account the whole estate of the donor at the time
of the birth, appearance or adoption of a child.624

Donations which in accordance with the provisions of Article 752,625 are


inofficious, bearing in mind the estimated net value of the donor's property at the time of
his death, shall be reduced with regard to the excess; but this reduction shall not prevent

621
See Reference
622
ibid
623
Art. 760
624
Art. 761
625
supra

151
the donations from taking effect during the life of the donor, nor shall it bar the donee
from appropriating the fruits.626

Only those who at the time of the donor's death have a right to the legitime and
their heirs and successors in interest may ask for the reduction or inofficious donations.

Those referred to in the preceding paragraph cannot renounce their right during
the lifetime of the donor, either by express declaration, or by consenting to the donation.

The donees, devisees and legatees, who are not entitled to the legitime and the
creditors of the deceased can neither ask for the reduction nor avail themselves thereof.627

If, there being two or more donations, the disposable portion is not sufficient to
cover all of them, those of the more recent date shall be suppressed or reduced with regard
to the excess.628

d. Ingratitude

The donation may also be revoked at the instance of the donor, by reason of
ingratitude in the following cases:

(1) If the donee should commit some offense against the person, the honor or the
property of the donor, or of his wife or children under his parental authority;

(2) If the donee imputes to the donor any criminal offense, or any act involving
moral turpitude, even though he should prove it, unless the crime or the act has been
committed against the donee himself, his wife or children under his authority;

(3) If he unduly refuses him support when the donee is legally or morally bound to
give support to the donor.629

The action granted to the donor by reason of ingratitude cannot be renounced in


advance. This action prescribes within one year, to be counted from the time the donor
had knowledge of the fact and it was possible for him to bring the action.630

626
Art. 771
627
Art. 772
628
Art. 773
629
Art. 765
630
Art. 769

152
PRESCRIPTION

I. Definition

One acquires ownership and other real rights through the lapse of time in the
manner and under the conditions laid down by law.631

A. Acquisitive632

May be ordinary or extraordinary.

Ordinary acquisitive prescription requires possession of things in good faith and


with just title for the time fixed by law.633

1. Characteristics

a. Relationship between the occupant and the land in terms of possession is capable
of producing legal consequences; it is the possessor who is the actor
b. Requires possession by a claimant who is not the owner

c. Applicable to ownership and other real rights


d. Vests ownership or other real rights in the occupant
e. Results in the acquisition of ownership or other real rights in a person as well as
the loss of said ownership or real rights in another
f. Can be proven under the general issue without its being affirmatively pleaded

2. Ordinary634

a. Good Faith

The good faith of the possessor consists in the reasonable belief that the person
from whom he received the thing was the owner thereof, and could transmit his
ownership.635

631
Art. 1106
632
One acquires ownership and other real rights through the lapse of time in the manner and under the
conditions laid down by law.
633
Art. 1117
634
requires possession of things in good faith and with just title for the time fixed by law
635
Art. 1127

153
b. Just title

There is just title when the adverse claimant came into possession of the property
through one of the modes recognized by law for the acquisition of ownership or other real
rights, but the grantor was not the owner or could not transmit any right.636
The title for prescription must be true and valid.637

3. Extraordinary

The ownership of personal property also prescribes through uninterrupted


possession for eight (8) years, without need of any other condition.638

Ownership and other real rights over immovables also prescribe through
uninterrupted adverse possession thereof for thirty (30) years, without need of title or of
good faith.639

4. Requisites

Possession has to be in the concept of an owner, public, peaceful and


uninterrupted.640

Acts of possessory character executed in virtue of license or by mere tolerance of


the owner shall not be available for the purposes of possession.641

Possession is interrupted for the purposes of prescription, naturally or civilly.642

Possession is naturally interrupted when through any cause it should cease for more
than one year.

The old possession is not revived if a new possession should be exercised by the
same adverse claimant.643

If the natural interruption is for only one year or less, the time elapsed shall be
counted in favor of the prescription.644

636
Art. 1129
637
Art. 1130
638
Art. 1132, 2nd par.
639
Art. 1137
640
Art. 1118
641
Art. 1119
642
Art. 1120
643
Art. 1121
644
Art. 1122

154
Civil interruption is produced by judicial summons to the possessor.645

Judicial summons shall be deemed not to have been issued and shall not give rise to
interruption:

(1) If it should be void for lack of legal solemnities;

(2) If the plaintiff should desist from the complaint or should allow the
proceedings to lapse;

(3) If the possessor should be absolved from the complaint.

In all these cases, the period of the interruption shall be counted for the
prescription.646

Any express or tacit recognition which the possessor may make of the owner's right
also interrupts possession.647

5. Period

The ownership of movables prescribes through uninterrupted possession for four


(4) years in good faith.

The ownership of personal property also prescribes through uninterrupted


possession for eight (8) years, without need of any other condition.

With regard to the right of the owner to recover personal property lost or of which
he has been illegally deprived, as well as with respect to movables acquired in a public sale,
fair, or market, or from a merchant's store the provisions of articles 559 and 1505 648 of this
Code shall be observed.649

Ownership and other real rights over immovable property are acquired by ordinary
prescription through possession of ten (10) years.650

In the computation of time necessary for prescription the following rules shall be
observed:

645
Art. 1123
646
Art. 1124
647
Art. 1125
648
See Reference
649
Art. 1132
650
Art. 1134

155
(1) The present possessor may complete the period necessary for
prescription by tacking his possession to that of his grantor or predecessor in
interest;

(2) It is presumed that the present possessor who was also the possessor at
a previous time, has continued to be in possession during the intervening time,
unless there is proof to the contrary;

(3) The first day shall be excluded and the last day included.651

6. What cannot be acquired by acquisitive prescription

Movables possesses through a crime can never be acquired through prescription by


the offender652 but his successors-in-interest may claim prescription, although for purposes
of computing the period of prescription, the possession by the offender may not be tacked
to the successors possession653

Lands registered under the Torrens system cannot be acquired by prescription654


but this rule can be invoked only by one under whose name it was registered.655

B. Extinctive

Rights and actions are lost through the lapse of time in the manner and under the
conditions laid down by law.

1. Characteristics

1. One does not look to the act of the possessor but to the neglect of the owner
2. Requires inaction of the owner or neglect of one with a right to bring his action
3. Applies to all kinds of rights, whether real or personal
4. Produces the extinction of rights or bars a right of action
5. Results in the loss of a real or personal right, or bars the cause of action to
enforce said right
6. Should be affirmatively pleaded and proved to bar the action or claim of the
adverse party

651
Art. 1138
652
Art. 1133
653
See Arts. 533-534
654
Alfonso vs. Jaime, L-12754, Jan. 30, 1960
655
Jocson, et al. vs. Silos, L-12998, July 25, 1960

156
2. Requisites

1. capacity to acquire by prescription


2. a thing capable of acquisition by prescription
3. possession of thing under certain conditions
4. lapse of time provided by law

3. Periods

Movables Immovables

Good Faith

4 years 10 years

Bad Faith

8 years656 30 years

656
except where the loss was due to a crime in which case, the offender can not acquire the movable by
prescription, and an action to recover it from him is imprescriptible.

157
II. No Prescription Applicable

A. By Offender

Movables possessed through a crime can never be acquired through prescription by


the offender.657

B. Registered Lands PD 1529658

C. The following rights, among others, are not extinguished by


prescription:

1. Action legal to demand a right of way

The owner, or any person who by virtue of a real right may cultivate or use any
immovable, which is surrounded by other immovables pertaining to other persons and
without adequate outlet to a public highway, is entitled to demand a right of way through
the neighboring estates, after payment of the proper indemnity.

Should this easement be established in such a manner that its use may be
continuous for all the needs of the dominant estate, establishing a permanent passage, the
indemnity shall consist of the value of the land occupied and the amount of the damage
caused to the servient estate.

In case the right of way is limited to the necessary passage for the cultivation of the
estate surrounded by others and for the gathering of its crops through the servient estate
without a permanent way, the indemnity shall consist in the payment of the damage caused
by such encumbrance.

This easement is not compulsory if the isolation of the immovable is due to the
proprietor's own acts.659

2. To abate a nuisance660

657
Art. 1133
658
See reference
659
Art. 649
660
Art. 1143

158
D. Action to quiet title if plaintiff in possession

If the plaintiff is in possession of the property, the action does not prescribe.661

E. Void contracts

The action or defense for the declaration of the inexistence of a contract does not
prescribe.662

F. Action to demand partition

No co-owner shall be obliged to remain in the co-ownership. Each co-owner may


demand at any time the partition of the thing owned in common, insofar as his share is
concerned.

Nevertheless, an agreement to keep the thing undivided for a certain period of


time, not exceeding ten years, shall be valid. This term may be extended by a new
agreement.

A donor or testator may prohibit partition for a period which shall not exceed
twenty years.

Neither shall there be any partition when it is prohibited by law.

No prescription shall run in favor of a co-owner or co-heir against his co-owners


or co-heirs so long as he expressly or impliedly recognizes the co-ownership.663

661
Reason: While the owner continues to be liable to an action, proceeding or suit upon the adverse
claim, he has a continuing right to be given aid by the court to ascertain and determine the nature of
such claim and its effect on his title, or to assert any superior equity in his favor. He may wait until his
possession is disturbed or his title is attacked before taking steps to vindicate his right.
662
Art. 1410
663
Art. 494

159
1. Distinguished from laches

Laches or Stale demands:

Failure or neglect, for an unreasonable and unexplained length of time, to do that


which, by exercising due diligence, could or should have been done earlier; it is negligence
or omission to assert a right within reasonable time, warranting a presumption that the
party entitled to assert it either has abandoned it or declined to assert it.

Laches Prescription

1. concerned with effect of delay 1. concerned with fact of delay

2. question of inequity of permitting the 2. question or matter of time


claim to be enforced

3. not statutory 3. statutory

4. applies in equity 4. applies at law

5. not based on a fixed time 5. based on a fixed time

G. Property of public dominion

1. For public use664


2. For public service665
3. For the development of the national wealth.

664
e.g. roads, canals, rivers
665
e.g. public buildings

160
III. Prescription or Limitation of Actions

A. To recover movables666

B. To recover immovables667

C. Other actions

A mortgage action prescribes after ten (10) years.668

The following rights, among others, are not extinguished by prescription:

(1) To demand a right of way, regulated in Article 649;669


(2) To bring an action to abate a public or private nuisance.670

The following actions must be brought within ten (10) years from the time the right
of action accrues:

(1) Upon a written contract;


(2) Upon an obligation created by law;
(3) Upon a judgment.671

The following actions must be commenced within six (6) years:

(1) Upon an oral contract;


(2) Upon a quasi-contract.672

The following actions must be instituted within four (4) years:

(1) Upon an injury to the rights of the plaintiff;


(2) Upon a quasi-delict.673

666
Art. 1140, supra
667
Art. 1141, Ibid.
668
Art. 1142
669
See reference
670
Art. 1143
671
Art. 1144
672
Art. 1145
673
Art. 1146

161
The following actions must be filed within one (1) year:

(1) For forcible entry and detainer;


(2) For defamation.674

The limitations of action mentioned in Articles 1140 to 1142, and 1144 to 1147675
are without prejudice to those specified in other parts of this Code, in the Code of
Commerce, and in special laws.676

All other actions whose periods are not fixed in this Code or in other laws must be
brought within five (5) years from the time the right of action accrues.677

IV. Interruption

When the actions are filed before the court, when there is a written extrajudicial
demand by the creditors, and when there is any written acknowledgment of the debt by the
debtor.678

674
Art. 1147
675
supra
676
Art. 1148
677
Art. 1149
678
Art. 1155

162
OBLIGATIONS

I. Definition

A juridical necessity to give, to do or not to do,679 one impressed with the character
of enforceability.

II. Elements of an Obligation

The possessor of a right; he in


1. Active subject680
whose favor the obligation is
constituted;

2. Passive subject681 He who has the duty of giving,


doing or not doing;

3. Object or prestation682 May consist of giving a thing, or


doing or not doing a certain
act683and

4. Efficient cause684 The reason why the obligation


exists

679
Art. 1156
680
obligee or creditor
681
obligor or debtor
682
the subject matter of the obligation
683
Requisites:
1. it must be licit
2. it must be possible, physically & juridically
3. it must be determinate or determinable
4. it must have a possible equivalent in money
684
vinculum or juridical tie

163
III. Different Kinds of Prestations

1. To give Consists in the delivery of a movable or an


immovable thing, in order to create a real
right or for the use of the recipient or for
its simple possession or in order to return
to its owner

2. To do All kinds of work or services, whether


mental or physical

3. Not to do Consists in abstaining from some act,


includes not to give, both being negative
obligations

IV. Classification of Obligations

1. Criteria of demandability: a. Pure - one w/c is not subject to a


condition or a term.

b. Conditional - the acquisition of


rights, as well as the extinguishment
or loss of those already acquired,
shall depend upon the happening of
the event which constitutes the
condition.685

c. W/ a term686 -

2. Plurality of objects a. Single

685
Art. 1181
A past thing can never be a condition. A condition is always future and uncertain.
Past event unknown to the parties.-- It is really the knowledge of the event w/c constitutes the
future. It is the knowledge w/c is future and uncertain.
Effect of Impossible Condition.-- It annuls the obligation w/c depends upon them. The entire
juridical tie is tainted by the impossible condition.
686
see Reference

164
3. Plurality of subjects b. Alternative - where the debtor
must perform any of the
prestations687

c. Facultative - where only one thing


is due but the debtor has reserved
the right to substitute it w/
another688

d. Joint - one in w/c each of the


debtors is liable only for a
proportionate part of the debt or
each creditor is entitled only to a
proportionate part of the credit.689

e. Solidary - one in w/c the debtor


is liable for the entire obligation or
each creditor is entitled to demand
the whole obligation. There is only
one obligation is a solidary
obligation.

4. Performance a. Divisible - one susceptible of


partial performance.

687
The characteristic of alternative obligations is that, several objects being due, the fulfillment of one is
sufficient (Tolentino)
688
Art. 1206
689
there are as many obligations as there are debtors multiplied by the number of creditors.
Effects of Joint Liability:
1. The demand by one creditor upon one debtor, produces the effects of default only w/ respect to the
creditor who demanded and the debtor on whom the demand was made, but not w/ respect to the
others;
2. The interruption of prescription by the judicial demand of one creditor upon a debtor, does not
benefit the other creditors nor interrupt the prescription as to other debtors. On the same principle, a
partial payment or acknowledgement made by one of several joint debtors does not stop the running of
the statute of limitations as to the others;
3. The vices of each obligation arising from the personal defect of a particular debtor or creditor does
not affect the obligation or rights of the others;
4. The insolvency of a debtor does not increase the responsibility of his co-debtors, nor does it
authorize a creditor to demand anything from his co-creditors;
5. In the joint divisible obligation, the defense of res judicata is not extended from one debtor to
another. (Manresa.)

165
b. Indivisible - one that must be
performed in one act.690

5. Sanctions for Breach a. Simple

b. W/ a penal clause - an accessory


undertaking to assume greater
liability in case of breach.691

V. Sources of Obligations692

A. A single act or omission can give rise to different causes of action

It is a source of obligation because of the provision in Article 100 of the Revised


code that every person criminally liable is also civilly liable.693

B. Natural Obligations694

They are real obligations to which the law denies an action, but which the debtor
may perform voluntarily.695

690
General rule: Obligation is indivisible w/c means that it has to be performed in one act singly. Why?
Bec. the law provides so: Unless there is an express stipulation to that effect, the creditor cannot be
compelled partially to receive the prestations in which the obligation consists. Neither may the debtor
be required to make partial payments. xxx (Art. 1248, par. 1.)
Three Exceptions to the Rule on Indivisibility:
1. When the parties so provide. (Art. 1248, par. 1.)
2. When the nature of the obligation necessarily entails performance in parts.
3. Where the law provides otherwise.
691
The purpose is to strengthen the coercive force of the obligation. When a penal clause is present,
damages do not have to be proved.
692
Obligations arise from:
1. Law
2. Contracts
3. Quasi-contracts
4. Acts or omissions punished by law and
5. Quasi-delicts.
693
Nolledo, Jose N., The Philippine Law on Obligations and Contracts Explained, 1980 Ed., p. 2
694
a. Based not on positive law but on equity and natural law
b. Do not grant such right of action to enforce their performance
695
Examples of natural obligations enumerated under the Civil Code:
1. Performance after the civil obligation has prescribed;

166
C. Extra-contractual Obligations696

1. Quasi-contract697 - That juridical relation resulting from a lawful, voluntary and


unilateral act, and which has for its purpose, the payment of indemnity to the end that no
one shall be unjustly enriched or benefited at the expense of another

2 kinds:

a. Negotiorum gestio - unauthorized management698


b. Solutio indebiti - undue payment 699
2. Quasi-delict/torts700 - It is a fault or act of negligence ( or omission of care )
which causes damage to another, there being no pre-existing contractual relations between
the parties.701

2. Reimbursement of a third person for a debt that has prescribed;


3. Restitution by minor after annulment of contract;
4. Delivery by minor of money or fungible thing in fulfillment of obligation;
5. Performance after action to enforce civil obligation has failed;
6. Payment by heir of debt exceeding value of property inherited; and
7. Payment of legacy after will have been declared void.
696
Arts. 2142 to 2194
697
obligation ex quasi-contractu
698
This takes place when a person voluntarily takes charge of anothers abandoned business or property
without the owners authority
699
This takes place when something is received when there is no right to demand it, and it was unduly
delivered thru mistake
700
obligation ex quasi-delicto or ex quasi maleficio
701
Elements:
a. There must be fault or negligence attributable to the person charged
b. There must be damage or injury
c. There must be a direct relation of cause and effect between the fault or negligence on the one
hand and the damage or injury on the other hand ( proximate cause )

167
VI. Nature and Effect of obligations

A. Obligation to give702

1. A determinate or specific thing

When what is to be delivered is a determinate thing, the creditor, in addition to the


right granted him by Article 1170,703 may compel the debtor to make the delivery.704

The obligation to give a determinate thing includes that of delivering all its
accessions and accessories, even though they may not have been mentioned.705

2. An indeterminate or generic thing

If the thing is indeterminate or generic, he may ask that the obligation be complied
with at the expense of the debtor.706

B. Obligation to do or not to do

Obligations to do In Obligations not to do

If a person is obliged to do something, it When the obligation consists in not doing,


must be done as promised, and it cannot be and the obligor does what has been
substituted by another act or forbearance forbidden him, it shall also be undone at his
against the obligees will707. If the obligor expense.710
fails to do it, the same shall be executed at
his cost708 albeit he may not be compelled to
do so personally or by himself.

This same rule shall be observed if he does


it in contravention of the tenor of the
obligation. Furthermore, it may be decreed

702
Three Accessory Obligations:
1. To take care of the thing w/ the diligence of a good father of a family until actual delivery.(Art.
1163)
2. To deliver the fruits to the creditor (fruits produced after obligation to deliver arises).(Art. 1164)
3. To deliver accessions and accessories(Art. 1166)
703
See reference
704 1st
Art. 1165, par.
705
Art. 1166
706 nd
Art. 1165 , 2 par.
707
see Art. 1244
708
see Chavez vs. Gonzales, 32 SCRA 547

168
that what has been poorly done be
undone.709

C. Breaches of obligations

1. Complete failure to perform

Debtor is unable to comply with his obligation because of fortuitous event.711

2. Default, delay or mora712 no default unless creditors makes a demand;713


exceptions

1. Obligation or law expressly so declares


2. Time is of the essence of the contract
3. Demand is useless as when obligor has rendered beyond his power to perform
4. There is acknowledgment of default.
In reciprocal obligations, one party incurs in delay from the moment the other
party fulfills his obligation, while he himself does not comply or is not ready to comply in a
proper manner with what is incumbent upon him.714

a. Mora solvendi

Delay of the debtor to perform his obligation. It may be:

1. Ex re obligation is to give
2. Ex persona obligation is to do715

710
see Art. 1168; Cui vs. Chan, 41 Phil. 523
709
Art. 1167
711
debtor is not liable for damages
712
Non-fulfillment of the obligation with respect to time
713
There must be a demand (judicial or extra-judicial) before delay may be incurred.
714
see Art. 1169
The general rule is that fulfillment by both parties should be simultaneous except when different
dates for the performance of obligation is fixed by the parties.
Demand is still necessary if their respective obligations are to be performed on separate dates.
715
There can be delay only in positive obligations (to give/to do). There can be no delay in negative
obligations (not to give/not to do).

169
b. Mora accipiendi

Delay of the creditor to accept the delivery of the thing w/c is the object of the
obligation

c. Compesatio morae

Delay of the parties or obligors in reciprocal obligation.

3. Fraud in the performance of obligation716

a. Waiver of future fraud is void

Responsibility arising from fraud is demandable in all obligations. Any waiver of an


action for future fraud is void.717

4. Negligence (culpa)718 in the performance of obligation

a. Diligence normally required is ordinary diligence or


diligence of a good father of a family

b. Exceptions: common carriers which are required to


exercise extraordinary diligence

5. Contravention of the tenor of obligation

The faithful observance of an obligation according to its tenor is mandated by law;


an unexcused failure thereof renders the obligor liable for losses and damages caused
thereby.719

716
Deliberate and intentional evasion of the fulfillment of an obligation
717
Art. 1171
Future fraud cannot be waived because it would result to illusory obligation.
718
Omission of that diligence which is required by the nature of the obligation and corresponds with the
circumstances of the persons, of the time and of the place
Negligence can be waived unless the nature of the obligation or public policy requires extraordinary
diligence as in common carrier.
719
see Art. 1170

170
6. Legal excuse for breach of obligation fortuitous event;
requisites

Fortuitous event720- an event which could not be foreseen or which though


foreseen, was inevitable.

Requisites:

1. cause is independent of the will of the debtor721


2. the event must be unforeseeable or unavoidable
3. occurrence must be such as to render it impossible for the debtor to fulfill
his obligation in a normal manner

4. debtor must be free from any participation in the aggravation of the injury
resulting to the creditor722

720
General Rule: No liability in case of fortuitous event.
Exceptions:
1. When expressly declared by law (e.g. Article 552(2), 1165(3), 1268, 1942, 2147, 2148 and 2159 of
the Civil Code.)
2. When expressly declared by stipulation or contract
3. When the nature of the obligation requires the assumption of risk
4 When the obligor is in default or has promised to deliver the same thing to 2 or more persons
who do not have the same interest [Article 1165(3)].
721
It must not only be the proximate cause but it must be the only and sole cause.
722
Lasam vs. Smith, 45 Phil. 657

171
D. Remedies available to creditor in cases of breach

1. Specific Performance723

When what is to be delivered is a determinate thing, the creditor, in addition to the


right granted him by Art 1170,724 may compel the debtor to make the delivery.725

a. Substituted performance by a third person on


obligation to deliver generic thing and in obligation to
do, unless a purely personal act

Obligation to give generic thing Obligation to do

If the thing is indeterminate or generic, he If a person obliged to do something fails to


may ask that the obligation be do it, the same shall be executed at his cost.
complied with at the expense of the This same rule shall be observed if he does
debtor.726 it in contravention of the tenor of the
obligation. Furthermore, it may be decreed
that what has been done poorly be
undone.727

723
in obligation to give specific thing
724
indemnification for damages
725
Art. 1165, par 1; see also ROC Rule 39, Sec 10
726
Art 1165, Par 2
Delivery of anything belonging to the species stipulated will be sufficient.
Debtor cannot avoid obligation by paying damages if the creditor insists on the performance.
727
Art. 1167
The court has no discretion to merely award damages to the creditor when the act can be done in
spite of the refusal or failure of debtor to do so.
Exception: Imposition of personal force or coercion upon the debtor to comply with his obligation -
tantamount to involuntary servitude and imprisonment for debt

172
2. Rescission728

The power to rescind obligations is implied in reciprocal ones, in case one of the
obligors should not comply with what is incumbent upon him.729

The injured party may choose between the fulfillment and the rescission of the
obligation,730 with the payment of damages in either case. He may also seek rescission, even
after he has chosen fulfillment, if the latter should become impossible.

The court shall decree the rescission claimed, unless there be just cause authorizing
the fixing of a period.

This is understood to be without prejudice to the rights of third persons who have
acquired the thing, in accordance with articles 1385731 and 1388732 and the Mortgage Law.733

In case both parties have committed a breach of the obligation, the liability of the
first infractor shall be equitably tempered by the courts. If it cannot be determined which
of the parties first violated the contract, the same shall be deemed extinguished, and each
shall bear his own damages.734

728
resolution in reciprocal obligations
Only applies to reciprocal obligations, where there is reciprocity between the parties i.e. creditor
debtor relations arise from the same cause or identity of cause.
Reciprocal obligations have a tacit resolutory condition
729
Power to rescind:
Pertains to the injured party, party who did not perform not entitled to insist upon the performance
of the contract by the defendant or recover damages by reason of his own breach
rd
Rights of injured party subordinated to the rights of a 3 person to whom bad faith is not imputable
Not absolute, not permitted in casual/slight breach, may only be claimed in substantial breach
(Song Fo v. Hawaiian Philippines)
Rescission requires judicial approval to produce legal effect
Exception: object is not yet delivered and obligation has not yet been performed
If the obligation has not yet been performed: extrajudicial declaration of party willing to perform
would suffice; can refuse to perform if the other party is not yet ready to comply
If the injured party has already performed: cannot extrajudicially rescind IF the other party opposes
the rescission (otherwise, rescission produces legal effect). In the case the other party impugns
rescission, the court comes in either to: a. Declare the rescission as properly made b. Give a period to
the debtor in which to perform
730
The remedy is alternative. Party seeking rescission can only elect one between fulfillment and
rescission. There can be no partial performance and partial rescission.
731
See Reference
732
ibid
733
Art. 1191
734
Art. 1192

173
3. Damages, in any event

In case of breach of the obligation,735 exclusive or in addition to specific


performance.

4. Subsidiary remedies of creditors

a. Accion subrogatoria736

Action which the creditor may exercise in place of the negligent debtor in order to
preserve or recover for the patrimony of the debtor the product of such action, and then
obtain therefrom the satisfaction of his own credit.737

b. Accion pauliana738

Creditors have the right to set aside or revoke acts which the debtor may have done
to defraud them. All acts of the debtor which reduce his patrimony in fraud of his
creditors, whether by gratuitous or onerous title, can be revoked by this action.

c. Accion directa739

Right of the lessor to go directly to sublessee for unpaid rents of the lessee.740

Right of the laborers or persons who furnish materials for a piece of work
undertaken by a contractor to go directly to the owner for any unpaid claims due to the
contractor.741

735
Art. 1170; See Reference
Recoverable damages include any and all damages that a human being may suffer. Responsibility for
damages is indivisible
736
An action against the debtors debtor
737
subrogatory action; See Art. 1177
Previous approval of court is not necessary
Plaintiff entitled only to so much as is needed to satisfy his credit, any balance shall pertain to the
debtor
Patrimony of the debtor (includes both present and future property) is liable for the obligations he
may contract by being a legal guaranty in favor of his creditors. Hence, he cannot maliciously reduce
such guaranty
738
rescissory action
An action to rescind contracts entered into by the debtor in fraud of creditors ( Arts. 1177, last
sentence and 1381, par. 3, See Reference
Payments of pre-existing obligations already due, whether natural or civil, cannot be impugned by an
accion pauliana
739
Arts. 1652, 1608, 1729 & 1893; see reference
740
See Art. 1652
741
See Art. 1729

174
VII. Kinds of Civil Obligations

A. Pure

The performance does not depend upon a future or uncertain event, or upon a past
event unknown to the parties, which is demandable at once.742

B. Conditional

The acquisition of rights, as well as the extinguishment or loss of those already


acquired, shall depend upon the happening of the event which constitutes the condition.743

1. Suspensive condition744

The happening of the event gives birth to an obligation

2. Resolutory condition745

The happening of the event will extinguish the obligation.

3. Potestative, casual or mixed

Potestative Casual Mixed

One w/c depends solely on One where the condition is One w/c depends partly
the will of either one made to depend upon a upon the will of one of the
party.746 third person or upon parties and partly on either
chance.747 chance or the will of a third
person.

742
Art. 1179
Every obligation which contains a resolutory condition shall also be demandable, without prejudice to
the effects of the happening of the event.
When the debtor binds himself to pay when his means permit him to do so, the obligation shall be
deemed to be one with a period, subject to the provisions of Article 1197 (Art. 1180)
743
Art. 1181
744
condition precedent
745
condition subsequent
746
e.g., "I will give you my plantation in Davao provided you reside in Davao permanently."
747
e.g., "I will give you my land in Pampanga if you will pass the bar exams this year."

175
a. Obligations subject to potestative suspensive
conditions are void

When the fulfillment of the condition depends upon the sole will of the debtor, the
conditional obligation shall be void.

If it depends upon chance or upon the will of a third person, the obligation shall
take effect.748

4. Effect of the happening of suspensive condition or resolutory


condition

a) Extent of retroactivity

The effects of a conditional obligation to give, once the condition has been
fulfilled, shall retroact to the day of the constitution of the obligation. When the obligation
imposes reciprocal prestations upon the parties, the fruits and interests during the
pendency of the condition shall be deemed to have been mutually compensated. If the
obligation is unilateral, the debtor shall appropriate the fruits and interests received, unless
from the nature and circumstances of the obligation it should be inferred that the intention
of the person constituting the same was different.

In obligations to do and not to do, the courts shall determine, in each case, the
retroactive effect of the condition that has been complied with.749

5. Effect of improvement, loss or deterioration of specific thing


before the happening of a suspensive condition in obligation
to do or not to do

Rules in case of the improvement, loss or deterioration of the thing during the
pendency of the condition:
(1) If the thing is lost without the fault of the debtor, the obligation shall be
extinguished;
(2) If the thing is lost through the fault of the debtor, he shall be obliged to pay
damages; it is understood that the thing is lost when it perishes, or goes out of commerce,
or disappears in such a way that its existence is unknown or it cannot be recovered;
(3) When the thing deteriorates without the fault of the debtor, the impairment is
to be borne by the creditor;

748
Art. 1182
749
Art. 1187

176
(4) If it deteriorates through the fault of the debtor, the creditor may choose
between the rescission of the obligation and its fulfillment, with indemnity for damages in
either case;
(5) If the thing is improved by its nature, or by time, the improvement shall inure
to the benefit of the creditor;
(6) If it is improved at the expense of the debtor, he shall have no other right than
that granted to the usufructuary.750

6. Effect when a resolutory condition in obligation to do or not to do


happens and there is improvement, loss or deterioration of the
specific thing

The provisions of the second paragraph of Article 1187751 shall be observed as


regards the effect of the extinguishment of the obligation.752

C. Obligation with a period or a term753

Obligations for whose fulfillment a day certain has been fixed, which is demandable
only when that day comes.

Obligations with a resolutory period take effect at once, but terminate upon arrival
of the day certain.

A day certain is understood to be that which must necessarily come, although it


may not be known when.

If the uncertainty consists in whether the day will come or not, the obligation is
conditional.754

750
Art. 1189
751
supra
752
Art. 1190, par. 3
753
General rule:
If a period is attached in an obligation, the presumption is that it is for the benefit of both parties.
The consequence is that the creditor cannot compel the performance before the arrival of the term; the
debtor cannot compel acceptance before the arrival of the term.
754
Art. 1193

177
1. Presumption that period is for the benefit of both debtor and
creditor

Whenever in an obligation a period is designated, it is presumed to have been


established for the benefit of both the creditor and the debtor, unless from the tenor of the
same or other circumstances it should appear that the period has been established in favor
of one or of the other.755

2. Effect if suspensive period756 is for the benefit of both debtor


and creditor

Term is for the benefit of the creditor Term is for the benefit of the debtor

The creditor can demand performance The creditor cannot demand performance
anytime; but the debtor cannot insist on anytime; but the debtor can insist on
payment before the period. performance anytime.757

3. Effect if given to debtor alone

a) Instances when debtor losses benefit of period

(1) When after the obligation has been contracted, he becomes insolvent, unless he
gives a guaranty or security for the debt;

(2) When he does not furnish to the creditor the guaranties or securities which he
has promised;

(3) When by his own acts he has impaired said guaranties or securities after their
establishment, and when through a fortuitous event they disappear, unless he immediately
gives new ones equally satisfactory;

(4) When the debtor violates any undertaking, in consideration of which the
creditor agreed to the period;

(5) When the debtor attempts to abscond.758

755
Art.1196
756
The obligation has already arisen except that it is not yet demandable
757
Illustrations: "I promise to pay within 60 days." This is a term for the benefit of the debtor.
"I promise to pay Clara the sum of P100,000 on or before Oct. 31, 1996." This is a term for the
benefit of the debtor.
758
Art. 1198

178
4. Resolutory period

Obligations with a resolutory period take effect at once, but terminate upon arrival
of the day certain.759

5. Definite or indefinite period

a. Instances when courts may fix the period

If the obligation does not fix a period, but from its nature and the circumstances it
can be inferred that a period was intended.

The courts shall also fix the duration of the period when it depends upon the will
of the debtor.

In every case, the courts shall determine such period as may under the
circumstances have been probably contemplated by the parties. Once fixed by the courts,
the period cannot be changed by them.760

b. Creditor must ask court to set the period before he can


demand payment

D. Alternative or Facultative761

1. Difference between alternative and facultative obligations762

Alternative Facultative
As to contents of the obligation

There are various prestations all of w/c Only the principal prestation constitutes
constitute parts of the obligation the obligation, the accessory being only a
means to facilitate payment.

759
in diem, or resolutory
760
Art. 1197
761
Art. 1199
A person alternatively bound by different prestations shall completely perform one of them.
The creditor cannot be compelled to receive part of one and part of the other undertaking.
762
Facultative obligations always involve choice by the debtor.
In theory, it is easy to distinguish a facultative obligation from an alternative one. But in practice, it
is difficult to distinguish the two. You just have to find out what the parties really intended (Balane)

179
As to nullity

The nullity of one prestation does not The nullity of the principal prestation
invalidate the obligation, w/c is still in force invalidates the obligation and the creditor
w/ respect to those w/c have no vice cannot demand the substitute even when
this is valid.

As to choice

The right to choose may be given to the Only the debtor can choose the substitute
creditor prestation.

As to effect of loss

Only the impossibility of all the prestations The impossibility of the principal prestation
due w/o fault of the debtor extinguishes the is sufficient to extinguish the obligation,
obligation even if the substitute is possible.763

2. Effect of loss of specific things or impossibility of


performance of alternative, through fault of debtor/creditor or
through fortuitous events

Choice is debtor's Choice is the creditor's

a. When only one prestation is left,764 the a. If one or some are lost through fortuitous
debtor may perform the one that is left.765 event, the creditor may choose from those
remaining.768
b. If the choice is limited through the
creditor's own acts, the debtor can ask for b. If one or some are lost through the
resolution plus damages.766 debtor's fault, the creditor has choice from
the remainder or the value of the things lost
c. If everything is lost through the debtor's plus damages.769
fault, the latter is liable to indemnify the
creditor for damages.767 c. If all are lost through the debtor's fault,

763
IV Tolentino
764
whether or not the rest of the prestations have been lost through fortuitous event or through the
fault of the debtor
765
Art. 1202
766
Art. 1203
767
Art. 1204
768
Art. 1205 (1)
769
Id. (2)

180
d. If some things are lost through the the choice of the creditor shall fall upon the
debtor's fault, the debtor can still choose price of any of them, w/ indemnity for
from those remaining. damages.770

e. If all are lost through fortuitous event, d. If some are lost through the creditor's
the obligation is extinguished. fault, the creditor may choose from the
remainder.
f. If all prestations but one are lost through
fortuitous event, and the remaining e. If all are lost through fortuitous event,
prestation was lost through the debtor's the obligation is extinguished.
fault, the latter is liable to indemnify the
creditor for damages. f. If all are lost through the creditor's fault,
the obligation is extinguished.
g. If all but one are lost through the fault of
the debtor and the last one was lost through
through fortuitous event, the obligation is
extinguished.

VIII. Joint and Solidary obligation

A. Joint (divisible) obligation

1. Concurrence of two or more creditors and or two or more


debtors

a. Joint obligation is presumed, unless otherwise


indicated by the law or nature of obligation

The concurrence of two or more creditors or of two or more debtors in one and
the same obligation does not imply that each one of the former has a right to demand, or
that each one of the latter is bound to render, entire compliance with the prestation.

There is a solidary liability only when the obligation expressly so states, or when the
law or the nature of the obligation requires solidarity.771

770
Id. (3)
771
Art. 1207

181
b. Obligation presumed to be divided into as many equal
shares as there are creditors or debtors

The credit or debt or deemed divided into as many shares as there are creditors or
debtors to each other, each resulting credit or debt being considered distinct from one
another.772
c. Each credit is distinct from one another, therefore a
joint debtor cannot be required to pay for the share of
another with debtor, although he may pay if he wants
to

If the division is impossible, the right of the creditors may be prejudiced only by
their collective acts, and the debt can be enforced only by proceeding against all the
debtors. If one of the latter should be insolvent, the others shall not be liable for his
share.773

d. Insolvency of a joint debtor, others not liable for his


share774

B. Joint Indivisible Obligation

1. Obligation cannot be performed in parts but debtors are bound


jointly

Generally, obligations are indivisible since the integrity of the obligations requires
their payment or performance completely.775

2. In case of failure of one joint debtor to perform his part


(share), there is default but only guilty debtor shall be liable
for damages

A joint indivisible obligation gives rise to indemnity for damages from the time
anyone of the debtors does not comply with his undertaking. The debtors who may have
been ready to fulfill their promises shall not contribute to the indemnity beyond the
corresponding portion of the price of the thing or of the value of the service in which the
obligation consists.776

772
see Art. 1208
773
Art. 1209
774
ibid
775
Arts. 1233 and 1248
776
Art. 1224

182
C. Solidary obligation

1. Mutual agency among solidary debtors

The debtor may pay any one of the solidary creditors; but if any demand, judicial or
extrajudicial, has been made by one of them, payment should be made to him.777
Novation, compensation, confusion or remission of the debt, made by any of the
solidary creditors or with any of the solidary debtors, shall extinguish the obligation,
without prejudice to the provisions of Article 1219.778

The creditor who may have executed any of these acts, as well as he who collects
the debt, shall be liable to the others for the share in the obligation corresponding to
them.779

2. Mutual guaranty among solidary debtors

The creditor may proceed against any one of the solidary debtors or some or all of
them simultaneously. The demand made against one of them shall not be an obstacle to
those which may subsequently be directed against the others, so long as the debt has not
been fully collected.780
Payment made by one of the solidary debtors extinguishes the obligation. If two or
more solidary debtors offer to pay, the creditor may choose which offer to accept.
He who made the payment may claim from his co-debtors only the share which
corresponds to each, with the interest for the payment already made. If the payment is
made before the debt is due, no interest for the intervening period may be demanded.
When one of the solidary debtors cannot, because of his insolvency, reimburse his
share to the debtor paying the obligation, such share shall be borne by all his co-debtors, in
proportion to the debt of each.781
A solidary debtor may, in actions filed by the creditor, avail himself of all defenses
which are derived from the nature of the obligation and of those which are personal to
him, or pertain to his own share. With respect to those which personally belong to the

777
Art. 1214
778
The remission made by the creditor of the share which affects one of the solidary debtors does not
release the latter from his responsibility towards the co-debtors, in case the debt had been totally paid
by anyone of them before the remission was effected.
779
Art. 1215
780
Art. 1216
781
Art. 1217

183
others, he may avail himself thereof only as regards that part of the debt for which the
latter are responsible.782
3. Each one of solidary creditors may do whatever may be useful
to the others, but not anything prejudicial to them783

a) Effect of any novation, compensation, confusion or


remission of debt executed by a solidary creditor

The obligation is extinguished, without prejudice to the provisions of Article


784
1219.

The creditor who may have executed any of these acts, as well as he who collects
the debt, is liable to the others for the share in the obligation corresponding to them.785

D. Divisible and Indivisible

Obligations to give definite things and those which are not susceptible of partial
performance shall be deemed to be indivisible.

When the obligation has for its object the execution of a certain number of days of
work, the accomplishment of work by metrical units, or analogous things which by their
nature are susceptible of partial performance, it shall be divisible.

However, even though the object or service may be physically divisible, an


obligation is indivisible if so provided by law or intended by the parties.

In obligations not to do, divisibility or indivisibility shall be determined by the


character of the prestation in each particular case.786

E. Obligations with a Penal Clause

The penalty shall substitute the indemnity for damages and the payment of interests
in case of noncompliance, if there is no stipulation to the contrary. Damages shall be paid
if the obligor refuses to pay the penalty or is guilty of fraud in the fulfillment of the
obligation.

The penalty may be enforced only when it is demandable.787

782
Art. 1222
783
Art. 1212
784
supra
785
Art. 1215
786
Art. 1225
787
Art. 1226

184
Proof of actual damages suffered by the creditor is not necessary in order that the
penalty may be demanded. 788

The judge shall equitably reduce the penalty when the principal obligation has been
partly or irregularly complied with by the debtor. Even if there has been no performance,
the penalty may also be reduced by the courts if it is iniquitous or unconscionable.789

The nullity of the penal clause does not carry with it that of the principal obligation.

The nullity of the principal obligation carries with it that of the penal clause.790

IX. Extinguishment of Obligations

A. Payment

The creditor is not bound to accept payment or performance by a third person


who has no interest in the fulfillment of the obligation, unless there is a stipulation to the
contrary.

Whoever pays for another may demand from the debtor what he has paid, except
that if he paid without the knowledge or against the will of the debtor, he can recover only
insofar as the payment has been beneficial to the debtor.791

Whoever pays on behalf of the debtor without the knowledge or against the will of
the latter, cannot compel the creditor to subrogate him in his rights, such as those arising
from a mortgage, guaranty, or penalty.792

Payment made by a third person who does not intend to be reimbursed by the
debtor is deemed to be a donation, which requires the debtor's consent. But the payment is
in any case valid as to the creditor who has accepted it793

788
Art. 1228
789
Art. 1229
790
Art. 1230
791
Art. 1236
792
Art. 1237
793
Art. 1238

185
1. Dation in payment

Property is alienated to the creditor in satisfaction of a debt in money.794

2. Form of payment

The payment of debts in money shall be made in the currency stipulated. If it is not
possible to deliver such currency, then in the currency which is legal tender in the
Philippines.
The delivery of promissory notes payable to order, or bills of exchange or other
mercantile documents shall produce the effect of payment only when they have been
cashed, or when through the fault of the creditor they have been impaired.
In the meantime, the action derived from the original obligation shall be held in
abeyance.795

3. Extraordinary inflation or deflation

The value of the currency at the time of the establishment of the obligation shall be
the basis of payment, unless there is an agreement to the contrary.796

4. Application of payment797

He who has various debts of the same kind in favor of one and the same creditor,
may declare at the time of making the payment, to which of them the same must be
applied. Unless the parties so stipulate, or when the application of payment is made by the
party for whose benefit the term has been constituted, application shall not be made as to
debts which are not yet due.

If the debtor accepts from the creditor a receipt in which an application of the
payment is made, the former cannot complain of the same, unless there is a cause for
invalidating the contract.798

If the debt produces interest, payment of the principal shall not be deemed to have
been made until the interests have been covered.799

794
Art. 1245
Dation in payment is governed by the law on sales because it is as if the creditor is now the
vendee,and the debtor becomes now the vendor.
795
Art. 1249
796
Art. 1250
797
the designation of a debt which is being paid by the debtor who has several obligations of the same
kind in favor of the creditor to whom the payment is made (quoting Tolentino.)
798
Art. 1252
799
Art. 1253

186
When the payment cannot be applied, or if application cannot be inferred from
other circumstances, the debt which is most onerous to the debtor, among those due, shall
be deemed to have been satisfied.

If the debts due are of the same nature and burden, the payment shall be applied to
all of them proportionately.800

5. Tender of Payment and Consignation

If the creditor to whom tender of payment has been made refuses without just
cause to accept it, the debtor shall be released from responsibility by the consignation of
the thing or sum due.

Consignation alone shall produce the same effect in the following cases, when:

(1) Creditor is absent or unknown, or does not appear at the place of payment;

(2) He is incapacitated to receive the payment at the time it is due;

(3) Without just cause, he refuses to give a receipt;

(4) Two or more persons claim the same right to collect;

(5) The title of the obligation has been lost.801

In order that the consignation of the thing due may release the obligor, it must first
be announced to the persons interested in the fulfillment of the obligation.802

Consignation shall be made by depositing the things due at the disposal of judicial
authority, before whom the tender of payment shall be proved, in a proper case, and the
announcement of the consignation in other cases.

The consignation having been made, the interested parties shall also be notified
thereof.803
The expenses of consignation, when properly made, shall be charged against the
creditor.804

800
Art. 1254
801
Art.1256
802
Art. 1257
803
Art. 1258
804
Art. 1259

187
Once the consignation has been duly made, the debtor may ask the judge to order
the cancellation of the obligation.

Before the creditor has accepted the consignation, or before a judicial declaration
that the consignation has been properly made, the debtor may withdraw the thing or the
sum deposited, allowing the obligation to remain in force.805

If, the consignation having been made, the creditor should authorize the debtor to
withdraw the same, he shall lose every preference which he may have over the thing. The
co-debtors, guarantors and sureties shall be released.806

B. Loss of Determinate Thing Due or Impossibility or difficulty of


performance

The obligation is extinguished if it should be lost or destroyed without the fault of


the debtor, and before he has incurred in delay.

When by law or stipulation, the obligor is liable even for fortuitous events, the loss
of the thing does not extinguish the obligation, and he shall be responsible for damages.
The same rule applies when the nature of the obligation requires the assumption of risk. 807

The debtor in obligations to do shall also be released when the prestation becomes
legally or physically impossible without the fault of the obligor.808

When the service has become so difficult as to be manifestly beyond the


contemplation of the parties, the obligor may also be released therefrom, in whole or in
part.809

805
Art. 1260
806
Art. 1261
807
Art. 1262
808
Art. 1266
809
Art. 1267

188
C. Condonation or Remission of Debt

An act of liberality by virtue of which, without receiving any equivalent, the


creditor renounces enforcement of an obligation which is extinguished, in whole or in
part.810

1. Express condonations and required formality thereof

Express condonation shall comply with the forms of donation.811

2. Implied

The delivery of a private document evidencing a credit, made voluntarily by the


creditor to the debtor, implies the renunciation of the action which the former had against
the latter.
If in order to nullify this waiver it should be claimed to be inofficious, the debtor
and his heirs may uphold it by proving that the delivery of the document was made in
virtue of payment of the debt.812
Whenever the private document in which the debt appears is found in the
possession of the debtor, it shall be presumed that the creditor delivered it voluntarily,
unless the contrary is proved.813
It is presumed that the accessory obligation of pledge has been remitted when the
thing pledged, after its delivery to the creditor, is found in the possession of the debtor, or
of a third person who owns the thing.814

810
Four (4) requisites:
1. Debt that is existing. You can remit a debt even before it is due.
2. Renunciation must be gratuitous. If renunciation is for a consideration, the mode of
extinguishment may be something else. It may be novation, compromise of dacion en pago.
3. Acceptance by the debtor
4. Capacity of the parties.
Condonation or remission is essentially gratuitous, and requires the acceptance by the obligor. It
may be made expressly or impliedly.
One and the other kind shall be subject to the rules which govern inofficious donations (Art. 1270)
811
The form of donation must be observed. If the condonation involves movables, apply Art. 748. If it
involves immovables, apply Art. 749. But note that the creditor may just refuse to collect (w/o
observing any form.) In this case, the obligation will be extinguished not by virtue of condonation but by
waiver under Art. 6.
812
Art. 1271
813
Art. 1272
814
Art. 1274

189
D. Confusion or Merger of Rights

When the characters of creditor and debtor are merged in the same person.815

E. Compensation

When two persons, in their own right, are creditors and debtors of each other.816

It is necessary that:

(1) Each one of the obligors be bound principally, and that he be at the same time a
principal creditor of the other;

(2) Both debts consist in a sum of money, or if the things due are consumable,
they be of the same kind, and also of the same quality if the latter has been stated;

(3) The two (2) debts be due;

(4) They be liquidated and demandable;

(5) Over neither of them there be any retention or controversy, commenced by


third persons and communicated in due time to the debtor.817

815
Art. 1275
816
Art. 1278
Compensation shall not be proper when one of the debts arises from a depositum or from the
obligations of a depositary or of a bailee in commodatum.
Neither can compensation be set up against a creditor who has a claim for support due by gratuitous
title, without prejudice to the provisions of par. 2 of Article 301 (Art. 1287)
Neither shall there be compensation if one of the debts consists in civil liability arising from a penal
offense (Art. 1288)
If a person should have against him several debts which are susceptible of compensation, the rules
on the application of payments shall apply to the order of the compensation (Art. 1289)
817
Art. 1279

190
1. Kinds

a. Legal compensation

Compensation takes place by operation of law, even though the debts may be
payable at different places, but there shall be an indemnity for expenses of exchange or
transportation to the place of payment.818

When all the requisites mentioned above are present, compensation takes effect by
operation of law, and extinguishes both debts to the concurrent amount, even though the
creditors and debtors are not aware of the compensation.819

b. Agreement

The parties may agree upon the compensation of debts which are not yet due.820

c. Voluntary821

d. Judicial

If one of the parties to a suit over an obligation has a claim for damages against the
other, the former may set it off by proving his right to said damages and the amount
thereof.822

e. Facultative

When compensation is claimable by only one of the parties but not of the other.823

818
Art. 1286
819
Art. 1290
820
Art. 1282
821
See Agreement, supra
822
Art. 1283
823
e.g., Arts. 1287, 1288

191
2. Obligations not compensable

a. When one of the debts arises from a depositum or from the obligations of a
depositary or of a bailee in commodatum.

b. Against a creditor who has a claim for support due by gratuitous title, without
prejudice to the provisions of paragraph 2 of Article 301.824

c. If one of the debts consists in civil liability arising from a penal offense.825

F. Novation

Obligations may be modified by:

(1) Changing their object or principal conditions;

(2) Substituting the person of the debtor;

(3) Subrogating a third person in the rights of the creditor.826

In order that an obligation may be extinguished by another which substitute the


same, it is imperative that it be so declared in unequivocal terms, or that the old and the
new obligations be on every point incompatible with each other.827

Novation which consists in substituting a new debtor in the place of the original
one, may be made even without the knowledge or against the will of the latter, but not
without the consent of the creditor. Payment by the new debtor gives him the rights
mentioned in articles 1236 and 1237.828

If the substitution is without the knowledge or against the will of the debtor, the
new debtor's insolvency or non-fulfillment of the obligations shall not give rise to any
liability on the part of the original debtor.829

The insolvency of the new debtor, who has been proposed by the original debtor
and accepted by the creditor, shall not revive the action of the latter against the original

824
Art. 1287
Support in arrears may be compensated and renounced, and the right to demand the same may be
transmitted by onerous or gratuitous title (Art. 301, par. 2)
825
Art. 1288
826
Art. 1291
827
Art. 1292
828
Art. 1293
829
Art. 1294

192
obligor, except when said insolvency was already existing and of public knowledge, or
known to the debtor, when the delegated his debt.830

When the principal obligation is extinguished in consequence of a novation,


accessory obligations may subsist only insofar as they may benefit third persons who did
not give their consent.831

If the new obligation is void, the original one shall subsist, unless the parties
intended that the former relation should be extinguished in any event.832

The novation is void if the original obligation was void, except when annulment
may be claimed only by the debtor or when ratification validates acts which are voidable.833

If the original obligation was subject to a suspensive or resolutory condition, the


new obligation shall be under the same condition, unless it is otherwise stipulated.834

Subrogation of a third person in the rights of the creditor is either legal or


conventional. The former is not presumed, except in cases expressly mentioned in this
Code; the latter must be clearly established in order that it may take effect.835

Conventional subrogation of a third person requires the consent of the original


parties and of the third person.836

It is presumed that there is legal subrogation:

(1) When a creditor pays another creditor who is preferred, even without the
debtor's knowledge;

(2) When a third person, not interested in the obligation, pays with the express or
tacit approval of the debtor;

(3) When, even without the knowledge of the debtor, a person interested in the
fulfillment of the obligation pays, without prejudice to the effects of confusion as to the
latter's share.837

830
Art. 1295
831
Art. 1296
832
Art. 1297
833
Art. 1298
834
Art. 1299
835
Art. 1300
836
Art. 1301
837
Art. 1302

193
Subrogation transfers to the persons subrogated the credit with all the rights
thereto appertaining, either against the debtor or against third person, be they guarantors or
possessors of mortgages, subject to stipulation in a conventional subrogation.838

A creditor, to whom partial payment has been made, may exercise his right for the
remainder, and he shall be preferred to the person who has been subrogated in his place in
virtue of the partial payment of the same credit.839

838
Art. 1303
839
Art. 1304

194
CONTRACTS

I. Essential Requisites

(1) Consent of the contracting parties;


(2) Object certain which is the subject matter of the contract;
(3) Cause of the obligation which is established.840

II. Kinds of Contracts

Consensual Real Formal or Solemn

Perfected by mere consent Requires delivery of object Requires compliance with


and from that moment, the for perfection.841 certain formalities
parties are bound not only prescribed by law, such
to the fulfillment of what prescribed form being an
has been expressly stipulated essential element
but also to all consequences
which, according to their
nature may be in keeping
with good faith, usage and
law.

1. Donations

Movable Immovable

May be made orally or in writing It must be made in a public document,


specifying therein the property donated and
An oral donation requires the simultaneous the value of the charges which the donee
delivery of the thing or of the document must satisfy.
representing the right donated.

If the value of the personal property


donated exceeds five thousand pesos
(P5,000.00), the donation and the
acceptance shall be made in writing.
Otherwise, the donation shall be void.842

840
Art. 1381
841
like deposit, pledge and commodatum
842
Art. 748

195
The acceptance may be made in the same deed of donation or in a separate public
document, but it shall not take effect unless it is done during the lifetime of the donor.

If the acceptance is made in a separate instrument, the donor shall be notified thereof in an
authentic form, and this step shall be noted in both instruments.843

2. Partnership844 where real property contributed

A public instrument is necessary.845

There must be:

1. an inventory of said property


2. signed by the parties; and
3. attached to the public instrument.846

3. Antichresis

The amount of the principal and of the interest shall be specified in writing;
otherwise, the contract of antichresis is void.847

4. Agency to sell real property or an interest therein

The authority of the agent must be in writing; otherwise, the sale is void.848

5. Stipulation to charge interest

No interest shall be due unless it has been expressly stipulated in writing.849

843
Art. 749
844
may be constituted in any form
845
Art. 1771
846
Art. 1773; otherwise, the contract of partnership is void
847
Art. 2134
848
Art. 1874
849
Art. 1956

196
6. Stipulation limiting common carriers duty of extraordinary
diligence to ordinary diligence

A stipulation between the common carrier and the shipper or owner limiting the
liability of the former for the loss, destruction, or deterioration of the goods to a degree
less than extraordinary diligence shall be valid, provided it be:

(1) In writing, signed by the shipper or owner;


(2) Supported by a valuable consideration other than the service rendered by the
common carrier; and

(3) Reasonable, just and not contrary to public policy.850

7. Chattel mortgage
Personal property is recorded in the Chattel Mortgage Register as security for the
performance of an obligation.

If the movable, instead of being recorded, is delivered to the creditor or a third


person, the contract is a pledge and not a chattel mortgage.851

8. Sale of large cattle

Governed by special law852 which requires that the same be in a public instrument.

No person, partnership, association, corporation or entity shall engage in the


business of buy and sell of large cattle without first securing a permit for the said purpose
from the Provincial Commander of the province where it shall conduct such business and
the city/municipal treasurer of the place of residence of such person, partnership,
association, corporation or entity. The permit shall only be valid in such province.853

850
Art. 1744
851
Art. 2140
852
Act No. 1147
853
Sec. 5, P.D. 533

197
III. Formality

Contracts shall be obligatory, in whatever form they may have been entered into,
provided all the essential requisites for their validity are present. However, when the law
requires that a contract be in some form in order that it may be valid or enforceable, or
that a contract be proved in a certain way, that requirement is absolute and indispensable.
In such cases, the right of the parties stated in the following article cannot be exercised.854

If the law requires a document or other special form, the contracting parties may
compel each other to observe that form, once the contract has been perfected. This right
may be exercised simultaneously with the action upon the contract.855

The following must appear in a public document:

(1) Acts and contracts which have for their object the creation, transmission,
modification or extinguishment of real rights over immovable property; sales of real
property or of an interest therein are governed by Articles 1403, No. 2, and 1405;856

(2) The cession, repudiation or renunciation of hereditary rights or of those of the


conjugal partnership of gains;

(3) The power to administer property, or any other power which has for its object
an act appearing or which should appear in a public document, or should prejudice a third
person;

(4) The cession of actions or rights proceeding from an act appearing in a public
document.

All other contracts where the amount involved exceeds five hundred pesos
(P500.00) must appear in writing, even a private one. But sales of goods, chattels or things
in action are governed by articles, 1403, No. 2 and 1405.857

854
Art. 1356
855
Art. 1357
856
infra
857
Art. 1358

198
IV. Defective Contracts

A. Rescissible Contracts858

(1) Those which are entered into by guardians whenever the wards whom they
represent suffer lesion by more than one-fourth of the value of the things which are the
object thereof;

(2) Those agreed upon in representation of absentees, if the latter suffer the lesion
stated in the preceding number;

(3) Those undertaken in fraud of creditors when the latter cannot in any other
manner collect the claims due them;

(4) Those which refer to things under litigation if they have been entered into by
the defendant without the knowledge and approval of the litigants or of competent judicial
authority;

(5) All other contracts specially declared by law to be subject to rescission. 859

(6) Payments made in a state of insolvency on account of obligations not yet


enforceable

1. Difference with Rescission (resolution) under Art. 1191

Rescission in Article 1191 Rescission Proper in Article 1381

It is a principal action retaliatory in It is a subsidiary remedy.


character.

The only ground is non-performance of There are 5 grounds to rescind. Non-


ones obligation/s or what is incumbent performance by the other party is not
upon him. important.

It applies only to reciprocal obligation It applies to both unilateral and reciprocal


obligations.

858
Contracts validly agreed upon but, by reason of lesion or economic prejudice may be rescinded in
cases established by law.
859
Art. 1381

199
Only a party to the contract may demand Even a 3rd person who is prejudiced by the
fulfillment or seek the rescission of the contract may demand the rescission of the
contract. contract.

B. Voidable Contracts860

Contracts entered into during a lucid interval are valid. Contracts agreed to in a
state of drunkenness or during a hypnotic spell are voidable.861

The incapacity declared in Article 1327862 is subject to the modifications determined


by law, and is understood to be without prejudice to special disqualifications established in
the laws.863

A contract where consent is given through mistake, violence, intimidation, undue


influence, or fraud is voidable.864

In order that mistake may invalidate consent, it should refer to the substance of the
thing which is the object of the contract, or to those conditions which have principally
moved one or both parties to enter into the contract.

Mistake as to the identity or qualifications of one of the parties will vitiate consent
only when such identity or qualifications have been the principal cause of the contract.

A simple mistake of account shall give rise to its correction.865

860
Art. 1409
Those in which all of the essential elements for validity are present, although the element of consent
is vitiated either by lack of capacity of one of the contracting parties or by VIMFU.
What contracts are voidable:
1. Those where one of the parties is incapable of giving consent to a contract
2. Those where the consent is vitiated by mistake, violence, intimidation, undue influence or fraud
3. By loss of the thing which is the object of the contract through fraud or fault of the person who is
entitled to annul the contract.
Requisites:
a. there must be knowledge of the reason which renders the contract voidable
b. such reason must have ceased and
c. the injured party must have executed an act which expressly or impliedly conveys an intention to
waive his right.
861
Art. 1328
862
See Reference
863
Art. 1329
864
Art. 1330
865
Art. 1331

200
When one of the parties is unable to read, or if the contract is in a language not
understood by him, and mistake or fraud is alleged, the person enforcing the contract must
show that the terms thereof have been fully explained to the former.866

There is no mistake if the party alleging it knew the doubt, contingency or risk
affecting the object of the contract.867

Mutual error as to the legal effect of an agreement when the real purpose of the
parties is frustrated, may vitiate consent.868

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


employed.

There is intimidation when one of the contracting parties is compelled by a


reasonable and well-grounded fear of an imminent and grave evil upon his person or
property, or upon the person or property of his spouse, descendants or ascendants, to give
his consent.

To determine the degree of intimidation, the age, sex and condition of the person
shall be borne in mind.

A threat to enforce one's claim through competent authority, if the claim is just or
legal, does not vitiate consent.869

Violence or intimidation shall annul the obligation, although it may have been
employed by a third person who did not take part in the contract.870

There is undue influence when a person takes improper advantage of his power
over the will of another, depriving the latter of a reasonable freedom of choice. The
following circumstances shall be considered: the confidential, family, spiritual and other
relations between the parties, or the fact that the person alleged to have been unduly
influenced was suffering from mental weakness, or was ignorant or in financial distress.871

There is fraud when, through insidious words or machinations of one of the


contracting parties, the other is induced to enter into a contract which, without them, he
would not have agreed to.872

866
Art. 1332
867
Art. 1333
868
Art. 1334
869
Art. 1335
870
Art. 1336
871
Art. 1337
872
Art. 1338

201
Failure to disclose facts, when there is a duty to reveal them, as when the parties are
bound by confidential relations, constitutes fraud.873

The usual exaggerations in trade, when the other party had an opportunity to know
the facts, are not in themselves fraudulent.874

A mere expression of an opinion does not signify fraud, unless made by an expert
and the other party has relied on the former's special knowledge.875

Misrepresentation by a third person does not vitiate consent, unless such


misrepresentation has created substantial mistake and the same is mutual.876

Misrepresentation made in good faith is not fraudulent but may constitute error.877

In order that fraud may make a contract voidable, it should be serious and should
not have been employed by both contracting parties.

Incidental fraud only obliges the person employing it to pay damages.878

The following contracts are voidable or annullable, even though there may have
been no damage to the contracting parties:

(1) Those where one of the parties is incapable of giving consent to a contract;

(2) Those where the consent is vitiated by mistake, violence, intimidation, undue
influence or fraud.

These contracts are binding, unless they are annulled by a proper action in court.
They are susceptible of ratification.879

The action for annulment shall be brought within four (4) years.

This period shall begin:

In cases of intimidation, violence or undue influence, from the time the defect of
the consent ceases.

873
Art. 1339
874
Art. 1340
875
Art. 1341
876
Art. 1342
877
Art. 1343
878
Art. 1344
879
Art. 1390

202
In case of mistake or fraud, from the time of the discovery of the same.

And when the action refers to contracts entered into by minors or other
incapacitated persons, from the time the guardianship ceases.880

Ratification extinguishes the action to annul a voidable contract.881

Ratification may be effected expressly or tacitly. It is understood that there is a tacit


ratification if, with knowledge of the reason which renders the contract voidable and such
reason having ceased, the person who has a right to invoke it should execute an act which
necessarily implies an intention to waive his right.882

Ratification may be effected by the guardian of the incapacitated person.883

Ratification does not require the conformity of the contracting party who has no
right to bring the action for annulment.884

Ratification cleanses the contract from all its defects from the moment it was
constituted.885

The action for the annulment of contracts may be instituted by all who are thereby
obliged principally or subsidiarily. However, persons who are capable cannot allege the
incapacity of those with whom they contracted; nor can those who exerted intimidation,
violence, or undue influence, or employed fraud, or caused mistake base their action upon
these flaws of the contract.886

An obligation having been annulled, the contracting parties shall restore to each
other the things which have been the subject matter of the contract, with their fruits, and
the price with its interest, except in cases provided by law.

In obligations to render service, the value thereof shall be the basis for damages.887

When the defect of the contract consists in the incapacity of one of the parties, the
incapacitated person is not obliged to make any restitution except insofar as he has been
benefited by the thing or price received by him.888

880
Art. 1391
881
Art. 1392
882
Art. 1393
883
Art. 1394
884
Art. 1395
885
Art. 1396
886
Art. 1397
887
Art. 1398
888
Art. 1399

203
Whenever the person obliged by the decree of annulment to return the thing
cannot do so because it has been lost through his fault, he shall return the fruits received
and the value of the thing at the time of the loss, with interest from the same date.889

The action for annulment of contracts shall be extinguished when the thing which
is the object thereof is lost through the fraud or fault of the person who has a right to
institute the proceedings.

If the right of action is based upon the incapacity of any one of the contracting
parties, the loss of the thing shall not be an obstacle to the success of the action, unless said
loss took place through the fraud or fault of the plaintiff.890

As long as one of the contracting parties does not restore what in virtue of the
decree of annulment he is bound to return, the other cannot be compelled to comply with
what is incumbent upon him.891

889
Art. 1400
890
Art. 1401
891
Art. 1402

204
C. Unenforceable Contracts892

The following contracts are unenforceable, unless they are ratified:


(1) Those entered into in the name of another person by one who has been given
no authority or legal representation, or who has acted beyond his powers;
(2) Those that do not comply with the Statute of Frauds.
In the following cases an agreement hereafter made shall be unenforceable by
action, unless the same, or some note or memorandum thereof, be in writing, and
subscribed by the party charged, or by his agent; evidence, therefore, of the agreement
cannot be received without the writing, or a secondary evidence of its contents:
(a) An agreement that by its terms is not to be performed within a year
from the making thereof;
(b) A special promise to answer for the debt, default, or miscarriage of
another;

(c) An agreement made in consideration of marriage, other than a mutual


promise to marry;

892
Those which cannot be enforced by proper action in court unless they are ratified
What contracts are unenforceable
1. those entered into in the name of another by one without or acting in excess of authority;
2. those where both parties are incapable of giving consent; and
3. those which do not comply with the Statute of Frauds
Agreements within the scope of the Statute of Frauds (exclusive list):
1. Agreements not to be performed within one year from the making thereof;
2. Special promise to answer for the debt, default or miscarriage of another;
- this does not refer to the original or independent promise of the debtor to his own creditor. It
refers rather to a collateral promise.
3. Agreement in consideration of marriage other than a mutual promise to marry;
4. Agreement for the sale of goods, etc. at a price not less than P500.00;
5. Contracts of lease for a period longer than one year;
6. Agreements for the sale of real property or interest therein; and
7. Representation as to the credit of a third person.
The contracts/agreements under the Statute of Frauds require that the same be evidenced by some
note, memorandum or writing, subscribed by the party charged or by his agent, otherwise, the said
contracts shall be unenforceable.
The statute of frauds applies only to executory contracts, not to those that are partially or
completely fulfilled.
Ratification of contracts in violation of the Statute of Frauds
1. Failure to object to the presentation of oral evidence to prove such contracts
2. Acceptance of benefits under these contracts

205
(d) An agreement for the sale of goods, chattels or things in action, at a
price not less than five hundred pesos (P500.00), unless the buyer accept and
receive part of such goods and chattels, or the evidences, or some of them, of such
things in action or pay at the time some part of the purchase money; but when a
sale is made by auction and entry is made by the auctioneer in his sales book, at the
time of the sale, of the amount and kind of property sold, terms of sale, price,
names of the purchasers and person on whose account the sale is made, it is a
sufficient memorandum;
(e) An agreement for the leasing for a longer period than one (1) year, or
for the sale of real property or of an interest therein;

(f) A representation as to the credit of a third person.

(3) Those where both parties are incapable of giving consent to a contract.893
Unauthorized contracts are governed by Article 1317894 and the principles of
agency.895
Contracts infringing the Statute of Frauds, referred to in No. 2 of Article 1403, are
ratified by the failure to object to the presentation of oral evidence to prove the same, or
by the acceptance of benefit under them.896
When a contract is enforceable under the Statute of Frauds, and a public document
is necessary for its registration in the Registry of Deeds, the parties may avail themselves of
the right under Article 1357.897
In a contract where both parties are incapable of giving consent, express or
implied, ratification by the parent, or guardian, as the case may be, of one of the
contracting parties shall give the contract the same effect as if only one of them were
incapacitated.
If ratification is made by the parents or guardians, as the case may be, of both
contracting parties, the contract shall be validated from the inception.

893
Art. 1403
894
No one may contract in the name of another without being authorized by the latter, or unless he has
by law a right to represent him.
A contract entered into in the name of another by one who has no authority or legal representation,
or who has acted beyond his powers, shall be unenforceable, unless it is ratified, expressly or impliedly,
by the person on whose behalf it has been executed, before it is revoked by the other contracting party
895
Art. 1404
896
Art. 1405
897
Art. 1406
If the law requires a document or other special form, the contracting parties may compel each other
to observe that form, once the contract has been perfected. This right may be exercised simultaneously
with the action upon the contract (Art. 1357)

206
No one may contract in the name of another without being authorized by the
latter, or unless he has by law a right to represent him.
A contract entered into in the name of another by one who has no authority or
legal representation, or who has acted beyond his powers, shall be unenforceable, unless it
is ratified, expressly or impliedly, by the person on whose behalf it has been executed,
before it is revoked by the other contracting party.898

D. Void Contracts899

(1) Those whose cause, object or purpose is contrary to law, morals, good customs,
public order or public policy;

(2) Those which are absolutely simulated or fictitious;

(3) Those whose cause or object did not exist at the time of the transaction;

(4) Those whose object is outside the commerce of men;

(5) Those which contemplate an impossible service;

(6) Those where the intention of the parties relative to the principal object of the
contract cannot be ascertained;

(7) Those expressly prohibited or declared void by law.

These contracts cannot be ratified. Neither can the right to set up the defense of
illegality be waived.900

An absolutely simulated or fictitious contract is void. A relative simulation, when it


does not prejudice a third person and is not intended for any purpose contrary to law,
morals, good customs, public order or public policy binds the parties to their real
agreement.901

898
Art. 1407
899
Those where all of the requisites of a contract are present but the cause, object or purpose is
contrary to law, morals, good customs, public order or public policy, or contract itself is prohibited or
declared void by law.
900
Art. 1409
901
Art. 1346

207
Comparative table of defective contracts

Void Voidable Rescissible Unenforceable

1. Defect is Defect is caused by Defect is caused by Defect is caused


caused by lack of vice of consent injury/ damage by lack of form,
essential elements either to one of the authority, or
or illegality parties of to a 3rd capacity of both
person parties not cured
by prescription

2. Do not, as a Valid and Valid and Cannot be


general rule enforceable until enforceable until enforced by a
produce any legal they are annulled by they are rescinded by proper action in
effect a competent court a competent court court

3. Action for the Action for Action for rescission Corresponding


declaration or annulment or may prescribe action for
nullity or defense of recovery, if there
inexistence or annulability may was total or partial
defense of nullity prescribe performance of
or inexistence the unenforceable
does not prescribe contract under No.
1 or 3902 of Article
1403 may
prescribe

4. Not cured by Cured by Cured by Not cured by


prescription prescription prescription prescription

5. Cannot be Can be ratified Need not be ratified Can be ratified


ratified

6. Assailed not Assailed only by a Assailed not only by Assailed only by a


only by a contracting party a contracting party contracting party
contracting party but even by a third

902
supra

208
but even by a person who is
third person prejudiced or
whose interest is damaged by the
directly affected contract

7. Assailed directly Assailed directly or Assailed directly only Assailed directly or


or collaterally collaterally collaterally

1. Pactum commissorium

It can be found in Article 2088 of the civil code which provides: The creditor
cannot appropriate the things given by way of pledge or mortgage, or dispose of them. Any
stipulation to the contrary is null and void.

Simply put, it is a stipulation in a contract of mortgage of pledge which provides


that the mortgagee will automatically own the property mortgaged in case the mortgagor
fails to pay the loan. This stipulation is void.

2. Pactum de non alienando

A stipulation forbidding the owner from alienating the immovable mortgaged.903

3. Pactum leonina

A stipulation which excludes one or more partners from any share in the profits or
losses.904

903
Art. 2130
904
Art. 1799

209
V. Effect of Contracts

Contracts take effect only between the parties, their assigns and heirs, except in
case where the rights and obligations arising from the contract are not transmissible by
their nature, or by stipulation or by provision of law. The heir is not liable beyond the value
of the property he received from the decedent.

If a contract should contain some stipulation in favor of a third person, he may


demand its fulfillment provided he communicated his acceptance to the obligor before its
revocation. A mere incidental benefit or interest of a person is not sufficient. The
contracting parties must have clearly and deliberately conferred a favor upon a third
person.905

905
Art. 1311

210
SALES906

I. Introduction

A. Definition of Sales

By the contract of sale one of the contracting parties obligates himself to transfer the
ownership and to deliver a determinate thing, and the other to pay therefor a price certain in
money or its equivalent.

A contract of sale may be absolute or conditional.907

Gross inadequacy of price does not affect a contract of sale, except as it may indicate
a defect in the consent, or that the parties really intended a donation or some other act or
contract.908

B. Essential Requisites of a Contract of Sale

Subject to the provisions of this Title, where goods are sold by a person who is not
the owner thereof, and who does not sell them under authority or with the consent of the
owner, the buyer acquires no better title to the goods than the seller had, unless the owner of
the goods is by his conduct precluded from denying the seller's authority to sell.

Nothing in this Title, however, shall affect:

(1) The provisions of any factors' act, recording laws, or any other provision of law
enabling the apparent owner of goods to dispose of them as if he were the true owner
thereof;

(2) The validity of any contract of sale under statutory power of sale or under the
order of a court of competent jurisdiction;

(3) Purchases made in a merchant's store, or in fairs, or markets, in accordance with


the Code of Commerce and special laws.909
906
A nominate contract whereby one of the contracting parties obligates himself to transfer the
ownership of and to deliver a determinate thing and the other to pay therefor a price certain in money or
its equivalent.
Delivery and payment in a contract of sale are so interrelated and intertwined with each other that
without delivery of the goods there is no corresponding obligation to pay. The two complement each
other. It is clear that the two elements cannot be dissociated, for the contract of purchase and sale is
essentially a bilateral contract, as it gives rise to reciprocal obligations. (Pio Barretto Sons, Inc. vs.
Compania Maritima, 62 SCRA 167).
Neither is the delivery of the thing bought nor the payment of the price necessary for the perfection
of the contract of sale. Being consensual, it is perfected by mere consent.
907
Art. 1458
908
Art. 1470

211
C. Stages of Contract of Sale

1. Negotiation

2. Perfection by mere consent; performance may be demanded910

3. Consummation

D. Obligations Created

When what is to be delivered is a determinate thing, the creditor, in addition to the


right granted him by Article 1170,911 may compel the debtor to make the delivery.
If the thing is indeterminate or generic, he may ask that the obligation be complied
with at the expense of the debtor.
If the obligor delays, or has promised to deliver the same thing to two or more
persons who do not have the same interest, he shall be responsible for any fortuitous event
until he has effected the delivery.912

E. Characteristics of a Contract of Sale

1. Principal - can stand on its own; unlike accessory contract


2. Consensual - meeting of minds makes a perfect contract of sale but needs
delivery to consummate.

3. Bilateral - imposes obligation on both parties913


4. Nominate - law gave it a name
5. Commutative - with valuable consideration914
6. Onerous - with valuable consideration
7. Title & not a mode title gives rise to an obligation to transfer; it is a mode w/c
actually transfers ownership

909
Art. 1505
910
specific performance
911
Those who in the performance of their obligations are guilty of fraud, negligence, or delay, and those
who in any manner contravene the tenor thereof, are liable for damages.
912
Art. 1165
913
obligation of seller transfer ownership & deliver
obligation of buyer pay price
Consequence: power to rescind is implied in bilateral contracts
914
Test: subjective as long as parties believe in all honesty that he is receiving equal value then it
complies with the test & would not be deemed a donation; but must not be absurd.
Inadequacy of price or aleatory character not sufficient ground to cancel contract of sale;
Inadequacy can show vitiation of consent & sale may be annulled based on vice but not on
inadequacy

212
F. Sale is Title and Not Mode

The contract of sale by itself is not a mode of acquiring ownership. The contact
transfers no real rights; it merely causes certain obligations to arise.

G. Sale Distinguished From Other Contracts

Donation Sale

Gratuitous Onerous

Formal contract Consensual

Governed by law on donation Governed by law on sales

Barter915 Sale

The consideration is the giving of a it is giving of money as payment


thing

Both are governed by law on sales; both are species of the genus sales

If consideration consists party in money & partly by thing look at manifest


intention.

If intention is not clear916

Value of thing is more than amount Value of thing is equal or less than
of money amount of money

915
The only point difference between contract of sale and barter is in the element which is present in sale
but not in barter, namely: price certain in money or its equivalent
916
Art. 1468

213
Contract for piece of work917 Sale

Goods are to be manufactured Contract for delivery of an article


specially for a customer and upon which the vendor in the ordinary
special order and not for the general course of business manufactures or
market procures for general market918

The thing transferred is one not in The thing transferred is one which
existence and which never would would have existed and would have
have existed but for the order of the been the subject of sale to some
party desiring to acquire it other person, even if the order had
not been given

The services dominate the contract The primary objective of the


even though there is a sale of goods contract is a sale of the
involved manufactured item; it is a sale of
goods even though the item is
manufactured by labor furnished by
the seller and upon previous order of
the customer

Not within the Statute of Frauds Within the Statute of Frauds

Agency to sell Sale

Agent not obliged to pay for price, Buyer pays for price of object
merely obliged to deliver price
received from buyer.

Principal remains owner even if Buyer becomes owner of thing


object delivered to agent

Agent assumes no risk/liability as Seller warrants


long as within the authority given
917
Art. 1467
Main factor in decision of the SC: essence of why parties enter into it:
a. essence is object contract of sale
b. essence is service contract for piece of work
918
whether on hand or not

214
May be revoked unilaterally because Not unilaterally revocable
fiduciary & even if revoked w/o
ground

Agent not allowed to profit Seller receives profit

A personal contract A real contract919

Agent receives the goods as goods Buyer receives the goods as owner
of the principal who retains his
ownership over them

Agent delivers the price which in Buyer pays the price


turn he got from his buyer

Agent can return the goods in case Buyer, as a general rule, cannot
he is unable to sell the same to a return the object sold
third person

Agent makes no warranty for which Seller warrants the thing sold
he assumes personal liability as long
as he acts within his authority and
in the name of the seller

Agent in dealing with the thing Buyer can deal with the thing sold as
received, must act and is bound he pleases being the owner
according to the instructions of the
principal

919
to give

215
Lease Sale

Use of thing is for a specified Obligation to absolutely transfer


period only with an obligation to ownership of thing
return

Consideration is rent Consideration is price

Lessor need not be owner Seller needs to be owner of thing to


transfer ownership

Lease with option to buy: really a contract of sale but designated as lease in
name only; it is a sale by installments

Dation in Payment920 Sale

Pre-existing credit No pre-existing credit

Obligations are extinguished Obligations are created

Consideration of the debtor is the Consideration on the part of the


extinguishment of the debt; on the seller is the price; on the part of
part of the creditor, it is the the buyer is the acquisition of the
acquisition of the object offered in object
lieu of the original credit

Less Freedom in determining the Greater freedom in determining


price the price.

The payment is received by the Buyer still has to pay the price
debtor before the contract is
perfected.

920
A contract where property is alienated to satisfy/extinguish obligation to pay debt
Novates creditor-debtor relationship into seller-buyer
Delivery is required (real contract)

216
H. Contract of Sale/Contract to Sell

Contract of Sale Contract to sell921

A contract whereby one of the A bilateral contract whereby the


contracting parties obligates himself prospective seller, while expressly
to transfer the ownership and to reserving the ownership of the
deliver a determinate thing, and the subject property despite delivery
other to pay therefor a price certain thereof to the prospective buyer
in money or its equivalent. binds himself to sell the said
property exclusively to the
prospective buyer upon fulfillment
of the condition agreed upon, that is,
full payment of the purchase price.

Title passes to the buyer upon Ownership is reserved in the seller


delivery of the thing sold and is not to pass until full payment
of the purchase price

Non-payment of the price is a Full payment is a positive suspensive


negative resolutory condition and condition, the failure of which is not
the remedy of the seller is to exact a breach casual or serious but
fulfilment or to rescind the contract simply prevents the obligation of the
vendor to convey title from having
binding force

Vendor loses and cannot recover Title remains in the vendor if the
ownership of the thing sold and vendee does not comply with the
delivered until the contract of sale is condition precedent of making
resolved and set aside payment at the time specified in the
contract

921
Absent a proviso in the contract that the title to the property is reserved in the vendor until full
payment of the purchase price or a stipulation giving the vendor the right to unilaterally rescind the
contract the moment the vendee fails to pay within the fixed period, the transaction is an absolute
contract of sale and not a contract to sell. (Dignos vs. CA [1988])

217
II. Parties to a Contract of Sale

A. Capacity of parties

All persons who are authorized by law to obligate themselves, may enter into a
contract of sale, with modifications.

Where necessaries922 are those sold and delivered to a minor or other person without
capacity to act, he must pay a reasonable price therefor. 923

The following persons cannot acquire by purchase, even at a public or judicial


auction, either in person or through the mediation of another:

(1) The guardian, the property of the person or persons who may be under his
guardianship;

(2) Agents, the property whose administration or sale may have been intrusted to
them, unless the consent of the principal has been given;

(3) Executors and administrators, the property of the estate under administration;

(4) Public officers and employees, the property of the State or of any subdivision
thereof, or of any government-owned or controlled corporation, or institution, the
administration of which has been intrusted to them; this provision shall apply to judges and
government experts who, in any manner whatsoever, take part in the sale;

(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and
other officers and employees connected with the administration of justice, the property and
rights in litigation or levied upon an execution before the court within whose jurisdiction or
territory they exercise their respective functions; this prohibition includes the act of acquiring
by assignment and shall apply to lawyers, with respect to the property and rights which may
be the object of any litigation in which they may take part by virtue of their profession;

(6) Any others specially disqualified by law.

The prohibitions in the two preceding articles are applicable to sales in legal
redemption, compromises and renunciations.924

922
Refers to Art. 290 which provides: Support is everything that is indispensable for sustenance, dwelling,
clothing and medical attendance, according to the social position of the family.
Support also includes the education of the person entitled to be supported until he completes his
education or training for some profession, trade or vocation, even beyond the age of majority.
923
Art. 1489
924
Art. 1491

218
B. Absolute incapacity

The following cannot give consent to a contract:

(1) Unemancipated minors;


(2) Insane or demented persons, and deaf-mutes who do not know how to write925
The action for the annulment of contracts may be instituted by all who are thereby
obliged principally or subsidiarily. However, persons who are capable cannot allege the
incapacity of those with whom they contracted; nor can those who exerted intimidation,
violence, or undue influence, or employed fraud, or caused mistake base their action upon
these flaws of the contract.926

When the defect of the contract consists in the incapacity of one of the parties, the
incapacitated person is not obliged to make any restitution except insofar as he has been
benefited by the thing or price received by him.927

C. Relative incapacity: Married Persons

The husband and the wife cannot sell property to each other, except:

(1) When separation of property was agreed upon in the marriage settlements: or
(2) When there has been a judicial separation of property between the spouses.928

D. Special disqualifications

The prohibitions are applicable to sales in legal redemption, compromises and


renunciations.929

925
Art. 1327
926
Art. 1397
927
Art. 1399
928
Art. 1490
929
Art. 1492

219
III. Subject Matter

A. Requisites of a valid subject matter

The thing must be licit and the vendor must have a right to transfer the ownership
thereof at the time it is delivered.930

A thing is determinate when it is particularly designated or physical segregated from


all others of the same class.

The requisite that a thing be determinate is satisfied if at the time the contract is
entered into, the thing is capable of being made determinate without the necessity of a new
or further agreement between the parties.931

Things having a potential existence may be the object of the contract of sale.

The efficacy of the sale of a mere hope or expectancy is deemed subject to the
condition that the thing will come into existence.

The sale of a vain hope or expectancy is void.932

The goods which form the subject of a contract of sale may be either existing goods,
owned or possessed by the seller, or goods to be manufactured, raised, or acquired by the
seller after the perfection of the contract of sale, in this Title called "future goods."

There may be a contract of sale of goods, whose acquisition by the seller depends
upon a contingency which may or may not happen.933

The sole owner of a thing may sell an undivided interest therein.934

In the case of fungible goods, there may be a sale of an undivided share of a specific
mass, though the seller purports to sell and the buyer to buy a definite number, weight or
measure of the goods in the mass, and though the number, weight or measure of the goods
in the mass, and though the number, weight or measure of the goods in the mass is
undetermined. By such a sale the buyer becomes owner in common of such a share of the
mass as the number, weight or measure bought bears to the number, weight or measure of
the mass. If the mass contains less than the number, weight or measure bought, the buyer
becomes the owner of the whole mass and the seller is bound to make good the deficiency
from goods of the same kind and quality, unless a contrary intent appears.935

930
Art. 1459
931
Art. 1460
932
Art. 1461
933
Art. 1462
934
Art. 1463
935
Art. 1464

220
Things subject to a resolutory condition may be the object of the contract of sale.936

B. Particular kinds

1. Generic things937
2. Future Goods938
3. Sale of undivided interest or share939
4. Sale of things in litigation940
5. Things subject to a resolutory condition941

IV. Obligations of the Seller to Transfer Ownership

A. Sale by a person not the owner at time of delivery

The goods which form the subject of a contract of sale may be either existing goods,
owned or possessed by the seller, or goods to be manufactured, raised, or acquired by the
seller after the perfection of the contract of sale, called "future goods."

There may be a contract of sale of goods, whose acquisition by the seller depends
upon a contingency which may or may not happen.942

Where goods are sold by a person who is not the owner thereof, and who does not
sell them under authority or with the consent of the owner, the buyer acquires no better title
to the goods than the seller had, unless the owner of the goods is by his conduct precluded
from denying the seller's authority to sell.943

The thing must be licit and the vendor must have a right to transfer the ownership
thereof at the time it is delivered.944

936
Art. 1465
937
see Arts. 1246 & 1409
938
Art. 1462
939
Arts. 1463 & 1464
940
Arts. 1381 & 1385
941
Art. 1465
942
Art. 1462
943
Art. 1505
944
Art. 1459

221
1. Exceptions

(1) The provisions of any factors' act, recording laws, or any other provision of law
enabling the apparent owner of goods to dispose of them as if he were the true owner
thereof;

(2) The validity of any contract of sale under statutory power of sale or under the
order of a court of competent jurisdiction;

(3) Purchases made in a merchant's store, or in fairs, or markets, in accordance with


the Code of Commerce and special laws.945

B. Sale by a person having a voidable title

Where the seller of goods has a voidable title thereto, but his title has not been
avoided at the time of the sale, the buyer acquires a good title to the goods, provided he buys
them in good faith, for value, and without notice of the seller's defect of title.946

The possession of movable property acquired in good faith is equivalent to a title.


Nevertheless, one who has lost any movable or has been unlawfully deprived thereof, may
recover it from the person in possession of the same.

If the possessor of a movable lost or which the owner has been unlawfully deprived,
has acquired it in good faith at a public sale, the owner cannot obtain its return without
reimbursing the price paid therefor.947

V. Price948

A. Meaning of price

The sum stipulated as the equivalent of the thing sold and also every incident taken
into consideration for the fixing of the price, put to the debit of the vendee and agreed to by
him.

In order that the price may be considered certain, it shall be sufficient that it be so
with reference to another thing certain, or that the determination thereof be left to the
judgment of a special person or persons.

Should such person or persons be unable or unwilling to fix it, the contract shall be
inefficacious, unless the parties subsequently agree upon the price.

945
Art. 1505
946
Art. 1506
947
Art. 559
948
The sum stipulated as the equivalent of the thing sold and also every incident taken into consideration
for the fixing of the price, put to the debit of the vendee and agreed to by him.

222
If the third person or persons acted in bad faith or by mistake, the courts may fix the
price.

Where such third person or persons are prevented from fixing the price or terms by
fault of the seller or the buyer, the party not in fault may have such remedies against the
party in fault as are allowed the seller or the buyer, as the case may be.949

Gross inadequacy of price does not affect a contract of sale, except as it may indicate
a defect in the consent, or that the parties really intended a donation or some other act or
contract.950

If the price is simulated, the sale is void, but the act may be shown to have been in
reality a donation, or some other act or contract.951

The price of securities, grain, liquids, and other things shall also be considered
certain, when the price fixed is that which the thing sold would have on a definite day, or in
a particular exchange or market, or when an amount is fixed above or below the price on
such day, or in such exchange or market, provided said amount be certain.952

The fixing of the price can never be left to the discretion of one of the contracting
parties. However, if the price fixed by one of the parties is accepted by the other, the sale is
perfected.953

Where the price cannot be determined, or in any other manner, the contract is
inefficacious. However, if the thing or any part thereof has been delivered to and
appropriated by the buyer he must pay a reasonable price therefor. What is a reasonable
price is a question of fact dependent on the circumstances of each particular case.954

949
Art. 1469
950
Art. 1470
951
Art. 1471
952
Art. 1472
953
Art. 1473
954
Art. 1474

223
B. Requisites for a valid price

1. Must be real955
2. Must be in money or its equivalent
3. Must be certain or ascertainable956 at the time of the perfection of the contract
4. Manner of payment provided for

C. How price is determined957

It is not necessary that the certainty of the price be actual or determined at the time
of the execution of the contract.

955
Real
1. When price stated is one intended by parties
If fictitious: no intention with respect to price - VOID
If False/simulated: what appears in contract is not the true price
a. Valid if there is true consideration
b. Void but if none (because it is fictitious)
2. Valuable
When not valuable Void
When contract is onerous, presumed to have valuable consideration
Nominal consideration w/c is common law concept does not apply (P1.00)
956
1.Sufficient that it is fixed with reference to another thing certain
That thing will have on a definite day, or in a particular exchange or market, or when an amount is
fixed above or below the price on such day, or in such exchange or market provided said amount be
certain
2. Determination be left to judgment of specified person/s
If contract states that price is to be determined by 3rd party, contract is already perfected (there is
just a suspensive condition actual fixing of price)
3rd party fixes price in bad faith or mistake court remedy can be made
3rd party is unable or unwilling to fix price parties have no cause of action
Reason:
a. suspensive condition does not happen yet courts have no jurisdiction
b. enforceable contract have not yet arisen court with no jurisdiction to create contract between
parties
Result: inefficacious
When price cannot be determined in accordance with any of the preceding rules, contract of sale is
inefficacious
However, when SM delivered, buyer must pay reasonable rice therefore court can fix price
957
Effect of Failure to determine price:
1. Where contract executory
The contract is inefficacious
2. Where the thing has been delivered to and appropriated by the buyer
The buyer must pay a reasonable price therefore

224
The price is certain in the following cases:

1. If the parties have fixed or agreed upon a definite amount;958

2. If it be certain with reference to another thing certain

3. If the determination of the price is left to the judgment of a specified person or


persons even before such determination

4. In the cases provided under Art. 1472,959 NCC

D. Inadequacy of price

Lesion or inadequacy of cause does not invalidate a contract, unless there has been
fraud, mistake or undue influence.960

Gross inadequacy of price does not affect a contract of sale, except as it may indicate
a defect in the consent, or that the parties really intended a donation or some other act or
contract.961

E. When no price agreed

The contract is inefficacious. However, if the thing or any part thereof has been
delivered to and appropriated by the buyer, he must pay a reasonable price therefor. What is
a reasonable price is a question of fact dependent on the circumstances of each particular
case.962

958
The fixing of the price can never be left to the discretion of one of the contracting parties. However if
the price fixed by one of the parties is accepted by the other, the sale is perfected.
959
The price of securities, grain, liquids, and other things shall also be considered certain, when the price
fixed is that which the thing sold would have on a definite day, or in a particular exchange or market, or
when an amount is fixed above or below the price on such day, or in such exchange or market, provided
said amount be certain.
960
Art. 1355
961
Art. 1470
Gross inadequacy of price in ordinary sale does not render contract void unless it is shocking to
conscience of man.
Except:
a. Judicial sale
Shocking to conscience of man
Higher price can be obtained at re-sale
b. Rescissible contracts due to lesion
c. Sales with right to repurchase (raises presumption of equitable mortgage) Remedy is
reformation
962
Art. 1474

225
F. Manner of payment must be agreed upon

Deemed to be an essential requisite because it is part of the presentation of the


contract.963

G. Earnest money964 vs. option money

Whenever earnest money is given in a contract of sale, it shall be considered as part


of the price and as proof of the perfection of the contract.965

Earnest money Option money

Title passes to the buyer upon delivery of the Ownership is reserved to the seller and is not
thing sold to pass until full payment

In case of non-payment, an action for In case of non-payment, there can be action


specific performance or for rescission can be for specific performance
filed by the injured party

Part of the purchase price Money given as a distinct consideration for


an option contract

When given, the buyer is bound to pay the The would-be buyer is not required to buy
balance

Given when there is already a sale Applies to a sale not yet perfected

963
Integral part of concept of price
If there is failure to meet minds as regards term of payment: cash basis
Must be certain or at least ascertainable
Effect if absent: no contract situation
964
or Arras is something of value to show that the buyer was really in earnest, and given to the seller to
bind the bargain. It is considered as:
a) part of the purchase price
b) proof of perfection of the contract
965
Art. 1482

226
VI. Formation of Contract of Sale966

A. Preparatory

1. Offer

The contract of sale is perfected at the moment there is a meeting of minds upon the
thing which is the object of the contract and upon the price.

From that moment, the parties may reciprocally demand performance, subject to the
provisions of the law governing the form of contracts.967

2. Option Contract968

A promise to buy and sell a determinate thing for a price certain is reciprocally
demandable.

An accepted unilateral promise to buy or to sell a determinate thing for a price


certain is binding upon the promisor if the promise is supported by a consideration distinct
from the price.969

When the offerer has allowed the offeree a certain period to accept, the offer may be
withdrawn at any time before acceptance by communicating such withdrawal, except when
the option is founded upon a consideration, as something paid or promised.970

966
3 Stages in life of a contract of sale
1. Policitacion/negotiation Stage offer is floated, acceptance is floated but they do not meet; time
parties indicate their interest but no concurrence of offer & acceptance
2. Perfection concurrence of all requisites; meeting of the minds
3. Consummation parties perform their respective undertakings
967
Art. 1475
968
A contract granting a privilege in one person, for which he has paid a consideration, which gives him
the right to buy certain merchandise, at anytime within the agreed period, at a fixed price.
An option without consideration is void and the effect is the same as if there was no option
However, in Sanchez vs. Rigos (1972), even though the option was not supported by a consideration,
the moment it was accepted, a perfected contract of sale resulted, applying Art. 1324 of the NCC. In view
of the ruling of the Supreme Court, the only importance of the consideration for an option is that the
option cannot be withdrawn by the grantor after acceptance.
In an option to buy, the party who has an option may validly and effectively exercise his right by
merely notifying the owner of the formers decision to buy and expressing his readiness to pay the
stipulated price.
969
Art. 1479
970
Art. 1324

227
3. Right of First Refusal

It is a right of first priority all things and conditions being equal; there should be
identity of the terms and conditions to be offered to the optionee and all other prospective
buyers, with optionee to enjoy the right of first priority. A deed of sale executed in favor of
a third party who cannot be deemed a purchaser in good faith, and which is in violation of
the right of first refusal granted to the optionee is not voidable under the Statute of Frauds,
such contract is valid but rescissible.971

The basis of the right of first refusal must be the current offer to sell of the seller or
offer to purchase of any prospective buyer. Only after the optionee fails to exercise its right
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, again, under the same terms as offered to
the optionee.972

Option contract Right of first refusal

Principal contract; stands on its own Accessory; cannot stand on its own

Needs separate consideration Does not need separate consideration

Subject matter & price must be valid There must be subject matter but price not
important

Not conditional Conditional

Not subject to specific performance Subject to specific performance

4. Mutual Promise to Buy and Sell973

One party accepts the others promise to buy and the latter, the formers promise to
sell a determinate thing for a price certain

It is reciprocally demandable

It requires no consideration distinct from the selling price

971
Guzman Bocaling & Co. vs. Bonnavie; Riviera Filipina, Inc vs. CA, et.al. GR No. 117355, April 5, 2002
972
Paranaque Kings Enterprises, Inc. vs. CA, GR No. 111538, February 26, 1997
973
This is as good as a perfected sale. No title of dominion is transferred as yet, the parties being given
only the right to demand fulfillment or damages

228
B. Perfection974

Consent is manifested by the meeting of the offer and the acceptance upon the thing
and the cause which are to constitute the contract. The offer must be certain and the
acceptance absolute. A qualified acceptance constitutes a counter-offer.975

Acceptance made by letter or telegram does not bind the offerer except from the
time it came to his knowledge. The contract, in such a case, is presumed to have been
entered into in the place where the offer was made.976

Unless it appears otherwise, business advertisements of things for sale are not
definite offers, but mere invitations to make an offer.977

Advertisements for bidders are simply invitations to make proposals, and the
advertiser is not bound to accept the highest or lowest bidder, unless the contrary appears.978

974
Sale is a consensual contract, hence, delivery and payment are not essential for its perfection
General rule: It is perfected at the moment there is meeting of the minds upon a determinate thing
(object), and a certain price (consideration), even if neither is delivered. A choice between rescission and
fulfilment, with damages in either case)
Exception: When the sale is subject to a suspensive condition by virtue of law or stipulation.
The terms and conditions of payment are merely accidental, not essential elements of the contract of
sale except where the parties themselves stipulate that in addition to the subject-matter and the price,
they are essential or material to the contract.
975
Meeting of Minds:
1. Offer certain
2. Acceptance absolute
Qualified acceptance merely a counter-offer which needs to be absolutely accepted to give rise to
perfected contract of sale
Business ads are mere invitations to make an offer except when it appears to be otherwise
Acceptance by letter/telegram binds only at time it came to knowledge of SELLER; prior thereto
offer may still be withdrawn
Must be exact terms to be considered absolute
When deviations allowed:
a. anything that refers to price is material
b. small items are insignificant, does not make acceptable unconditional
When sale is subject to suspensive condition, no perfected contract of sale yet; becomes perfected
only upon happening of condition
In sales at auction, perfected when auctioneer announces its perfection by the fall of the hammer or in
other customary manner may impose terms under bidder may retract his bid; owner of property sold at
auction may impose terms under w/c the auction will proceed & it shall be binding w/n the bidders are
aware
Place of perfection: where the meeting of minds happen; when acceptance sent by mail, perfection is
deemed where the offer is made
Performance has nothing to do with perfection stage
976
Art. 1319
977
Art. 1325
978
Art. 1326

229
The contract of sale is perfected at the moment there is a meeting of minds upon the
thing which is the object of the contract and upon the price.

From that moment, the parties may reciprocally demand performance, subject to the
provisions of the law governing the form of contracts.979

C. Formalities of the Contract

General rule: Sale is a consensual contract and is perfected by mere consent.

Exceptions:

In order to be enforceable by action, the following must be in writing:

1. Sale of personal property at a price not less than P500


2. Sale of real property or an interest therein
3. Sale of property not to be performed within a year from the date thereof.980

4. Applicable statute requires that the contract of sale be in a certain form

VII. Transfer of Ownership

A. Manner of Transfer

The ownership of the thing sold shall be transferred to the vendee upon the actual or
constructive delivery thereof.981

The ownership of the thing sold is acquired by the vendee from the moment it is
delivered to him in any of the ways specified in Articles 1497 to 1501, 982 or in any other
manner signifying an agreement that the possession is transferred from the vendor to the
vendee.983

The thing sold shall be understood as delivered, when it is placed in the control and
possession of the vendee.984

When the sale is made through a public instrument, the execution thereof shall be
equivalent to the delivery of the thing which is the object of the contract, if from the deed
the contrary does not appear or cannot clearly be inferred.

979
Art. 1475
980
Art. 1403 (d) (e)
981
Art. 1477
982
See Reference
983
Art. 1496
984
Art. 1497

230
With regard to movable property, its delivery may also be made by the delivery of the
keys of the place or depository where it is stored or kept.985

The delivery of movable property may likewise be made by the mere consent or
agreement of the contracting parties, if the thing sold cannot be transferred to the
possession of the vendee at the time of the sale, or if the latter already had it in his
possession for any other reason.986

There may also be tradition constitutum possessorium.987

With respect to incorporeal property, the provisions of the first paragraph of article
1498 shall govern. In any other case wherein said provisions are not applicable, the placing
of the titles of ownership in the possession of the vendee or the use by the vendee of his
rights, with the vendor's consent, shall be understood as a delivery.988

B. When delivery does not transfer title

Instances where Seller is still the Owner despite Delivery:

1. Sale on trial, approval or satisfaction


2. Contrary intention appears by the term of the contract;
3. Implied reservation of ownership989

C. Kinds of delivery

Actual or real Legal or Quasi-tradition Tradition by


constructive990 operation of law

Placing the thing Delivery is Delivery of rights,


under the control represented by other credits or incorporeal
and possession of signs or acts property, made by:
the buyer indicative thereof
a. placing titles of
Delivery by the ownership in the
execution of a public hands of buyer
instrument.991

985
Art. 1498
986
Art. 1499
987
Art. 1500
988
Art. 1501
989
Art. 1503
990
Three things before ownership may be transferred:
1. The seller must have control over the thing
2. The buyer must be put under control
3. There must be the intention to deliver the thing for purposes of ownership

231
b. allowing buyer to
a. traditio symbolica - to make use of rights
effect delivery, the
parties make use of a
token or symbol to
represent the thing
delivered

b. traditio longa manu


seller pointing out to
the buyer the things
which are
transferred, which at
the time must be in
sight.
c. traditio brevi manu
buyer simply
continues in
possession of the
thing but under title
of ownership.

d. traditio constitutum
possessorium seller
continues in
possession but under
a different title other
than ownership.

991
Gives rise only to a prima facie presumption of delivery which is destroyed when actual delivery is not
effected because of a legal impediment (Ten Forty Realty vs. Cruz, 10 Sept. 2003)

232
D. Double Sales992

Rules of preference:

1. Personal Property

a. first possessor in good faith

2. Real Property

a. first registrant in good faith


b. first possessor in good faith
c. person with oldest title in good faith993

E. Property Registration Decree

1. Requisites for registration of deed of sale in good faith

No deed, conveyance, mortgage, lease, or other voluntary instrument affecting land


not registered under the Torrens system shall be valid, except as between the parties thereto,
unless such instrument shall have been recorded in the manner herein prescribed in the
office of the Register of Deeds for the province or city where the land lies.

(a) The Register of Deeds for each province or city shall keep a Primary Entry Book
and a Registration Book. The Primary Entry Book shall contain, among other particulars, the
entry number, the names of the parties, the nature of the document, the date, hour and
minute it was presented and received. The recording of the deed and other instruments
relating to unregistered lands shall be effected by any of annotation on the space provided
therefor in the Registration Book, after the same shall have been entered in the Primary
Entry Book.

(b) If, on the face of the instrument, it appears that it is sufficient in law, the Register
of Deeds shall forthwith record the instrument in the manner provided herein. In case the
Register of Deeds refuses its administration to record, said official shall advise the party in
interest in writing of the ground or grounds for his refusal, and the latter may appeal the
matter to the Commissioner of Land Registration in accordance with the provisions of

992
Requisites:
1. two or more transactions must constitute valid sales;
2. they must pertain exactly to the same object or subject matter;
3. they must be bought from the same or immediate seller; AND
4. two or more buyers who are at odds over the rightful ownership of the subject matter must
represent conflicting interests.
993
Art. 1544
To be entitled to priority, the second buyer must not only show prior recording of his deed but must
have acted in good faith, without knowledge of the existence of another alienation by the vendor to
another

233
Section 117 of this Decree. It shall be understood that any recording made under this section
shall be without prejudice to a third party with a better right.

(c) After recording on the Record Book, the Register of Deeds shall endorse among
other things, upon the original of the recorded instruments, the file number and the date as
well as the hour and minute when the document was received for recording as shown in the
Primary Entry Book, returning to the registrant or person in interest the duplicate of the
instrument, with appropriate annotation, certifying that he has recorded the instrument after
reserving one copy thereof to be furnished the provincial or city assessor as required by
existing law.

(d) Tax sale, attachment and levy, notice of lis pendens, adverse claim and other
instruments in the nature of involuntary dealings with respect to unregistered lands, if made
in the form sufficient in law, shall likewise be admissible to record under this section.994

2. Accompanied by vendors duplicate certificate of title, payment


of capital gains tax, and documentary tax registration fees

For the services to be rendered by the Register of Deeds, he shall collect the same
amount of fees prescribed for similar services for the registration of deeds or instruments
concerning registered lands.995

VIII. Risk of Loss

A. General rule

The following rules shall be observed in case of the improvement, loss or


deterioration of the thing during the pendency of the condition:

(1) If the thing is lost without the fault of the debtor, the obligation shall be
extinguished;

(2) If the thing is lost through the fault of the debtor, he shall be obliged to pay
damages; it is understood that the thing is lost when it perishes, or goes out of commerce, or
disappears in such a way that its existence is unknown or it cannot be recovered;

(3) When the thing deteriorates without the fault of the debtor, the impairment is to
be borne by the creditor;

(4) If it deteriorates through the fault of the debtor, the creditor may choose between
the rescission of the obligation and its fulfillment, with indemnity for damages in either case;

994
Sec. 113, P.D. 1529
995
ibid

234
(5) If the thing is improved by its nature, or by time, the improvement shall inure to
the benefit of the creditor;

(6) If it is improved at the expense of the debtor, he shall have no other right than
that granted to the usufructuary.996

In an obligation to deliver a generic thing, the loss or destruction of anything of the


same kind does not extinguish the obligation.997

B. When loss occurred before perfection

Seller bears the loss.

C. When loss occurred at time of perfection998

If at the time the contract of sale is perfected, the thing which is the object of the
contract has been entirely lost, the contract shall be without any effect.
But if the thing should have been lost in part only, the vendee may choose between
withdrawing from the contract and demanding the remaining part, paying its price in
proportion to the total sum agreed upon.999
Where the parties purport a sale of specific goods, and the goods without the
knowledge of the seller have perished in part or have wholly or in a material part so
deteriorated in quality as to be substantially changed in character, the buyer may at his option
treat the sale:
(1) As avoided; or
(2) As valid in all of the existing goods or in so much thereof as have not
deteriorated, and as binding the buyer to pay the agreed price for the goods in which the
ownership will pass, if the sale was divisible.1000

996
Art. 1189
997
Art. 1263
998
Contract is void or inexistent.
999
Art. 1493
1000
Art. 1494

235
D. When loss occurred after perfection but before delivery1001

General rule:

Who bears the risk of loss is governed by the stipulations in the contract

Exceptions:

1. when object sold consists of fungible goods for a price fixed according to weight,
number or measure

2. seller is guilty of fraud, negligence, default or violation of contractual terms

3. object sold is generic1002

E. When ownership is transferred

General rule:

While a contract of sale is consensual, ownership of the thing sold is acquired only
upon its delivery, actual or constructive, to the buyer.1003

Exceptions:

1. Contrary stipulation or pactum reservati dominii1004 a stipulation, usually in sales by


installment, whereby, despite delivery of the property sold, ownership remains with the seller
until full payment of the price is made.

2. Contract to sell

1001
In the absence of any stipulation:
First view:
Buyer bears the loss as an exception to the rule of res perit domino.
Contrary view:
Where the ownership is transferred by delivery, as in our code, the application of the axiom res perit
domino, imposes the risk of loss upon the vendor; hence, if the thing is lost by fortuitous event before
delivery, the vendor suffers the loss and cannot recover the price from the vendee (Commentaries and
Jurisprudence on the Civil Code of the Philippines, Tolentino)
1002
Civil Code of the Philippines, Paras. This view conforms with Manresas view. Buyer would have been
the one to profit from the thing had it not been lost or destroyed.
1003
Daus vs. Sps. De Leon, 16 June 2003
This is true even if the purchase has been made on credit. Payment of the purchase price is not
essential to the transfer of ownership, as long as the property sold has been delivered (Sampaguita
Pictures, Inc vs. Jalwindor Manufacturers, Inc. 93 SCRA 420)
Nonpayment only creates a right to demand payment or to rescind the contract, or to criminal
prosecution in the case of bouncing checks. (EDCA Publishing and Distributing Corp. vs. Santos, 184 SCRA
614)
1004
contractual reservation of title

236
3. Contract of insurance a perfected contract of sale, even without delivery, vests in
the vendee an equitable title, an existing interest over the goods sufficient to be the subject
of insurance.

Unless otherwise agreed, the goods remain at the seller's risk until the ownership
therein is transferred to the buyer, but when the ownership therein is transferred to the
buyer the goods are at the buyer's risk whether actual delivery has been made or not, except
that:

(1) Where delivery of the goods has been made to the buyer or to a bailee for the
buyer, in pursuance of the contract and the ownership in the goods has been retained by the
seller merely to secure performance by the buyer of his obligations under the contract, the
goods are at the buyer's risk from the time of such delivery;

(2) Where actual delivery has been delayed through the fault of either the buyer or
seller the goods are at the risk of the party in fault.1005

IX. Documents of Title

A. Definition

"Document of title to goods" includes any bill of lading, dock warrant, "quedan," or
warehouse receipt or order for the delivery of goods, or any other document used in the
ordinary course of business in the sale or transfer of goods, as proof of the possession or
control of the goods, or authorizing or purporting to authorize the possessor of the
document to transfer or receive, either by indorsement or by delivery, goods represented by
such document.1006

B. Purpose of documents of title

1. Evidence of existence & possession of goods described therein


2. Medium by which seller is able to transfer possession of goods

C. Negotiable documents of title

A document of title in which it is stated that the goods referred to therein will be
delivered to the bearer, or to the order of any person named in such document.1007

Those by the terms of which the bailee undertakes to deliver the goods to the bearer
and which the bailee undertakes to deliver the goods to the order of a specified person.

1005
Art. 1504
1006
Art. 1636
1007
Art. 1507

237
D. Non-negotiable documents of title

Those by the terms of which the goods covered are deliverable to a specified
person.

E. Warranties of seller of documents of title

(1) The document is genuine;


(2) He has a legal right to negotiate or transfer it;
(3) He has knowledge of no fact which would impair the validity or worth of the
document; and
(4) He has a right to transfer the title to the goods and that the goods are
merchantable or fit for a particular purpose, whenever such warranties would have been
implied if the contract of the parties had been to transfer without a document of title the
goods represented thereby.1008

F. Rules on levy/garnishment of goods

A person to whom a document of title has been transferred, but not negotiated,
acquires thereby, as against the transferor, the title to the goods, subject to the terms of any
agreement with the transferor.

If the document is non-negotiable, such person also acquires the right to notify the
bailee who issued the document of the transfer thereof, and thereby to acquire the direct
obligation of such bailee to hold possession of the goods for him according to the terms of
the document.

Prior to the notification to such bailee by the transferor or transferee of a non-


negotiable document of title, the title of the transferee to the goods and the right to acquire
the obligation of such bailee may be defeated by the levy of an attachment of execution
upon the goods by a creditor of the transferor, or by a notification to such bailee by the
transferor or a subsequent purchaser from the transferor of a subsequent sale of the goods
by the transferor.1009

If goods are delivered to a bailee by the owner or by a person whose act in conveying
the title to them to a purchaser in good faith for value would bind the owner and a
negotiable document of title is issued for them they cannot thereafter, while in possession of
such bailee, be attached by garnishment or otherwise or be levied under an execution unless
the document be first surrendered to the bailee or its negotiation enjoined. The bailee shall
in no case be compelled to deliver up the actual possession of the goods until the document
is surrendered to him or impounded by the court.1010

1008
Art. 1516
1009
Art. 1514
1010
Art. 1519

238
A creditor whose debtor is the owner of a negotiable document of title shall be
entitled to such aid from courts of appropriate jurisdiction by injunction and otherwise in
attaching such document or in satisfying the claim by means thereof as is allowed at law or in
equity in regard to property which cannot readily be attached or levied upon by ordinary
legal process.1011

X. Remedies of an Unpaid Seller

A. Definition of unpaid seller

The seller of goods is deemed to be an unpaid seller:

(1) When the whole of the price has not been paid or tendered;

(2) When a bill of exchange or other negotiable instrument has been received as
conditional payment, and the condition on which it was received has been broken by reason
of the dishonor of the instrument, the insolvency of the buyer, or otherwise. 1012

B. Remedies of unpaid seller

1. Possessory lien over the goods


2. Right of stoppage in transitu after he has parted with the possession of the goods
and the buyer becomes insolvent

3. Special Right of resale


4. Special Right to rescind the sale
5. Action for the price
6. Action for damages

XI. Performance of Contract

A. Delivery of thing sold

1. Sale of Movables

Where the seller delivers to the buyer a quantity of goods less than he contracted to
sell, the buyer may reject them, but if the buyer accepts or retains the goods so delivered,
knowing that the seller is not going to perform the contract in full, he must pay for them at
the contract rate. If, however, the buyer has used or disposed of the goods delivered before
he knows that the seller is not going to perform his contract in full, the buyer shall not be
liable for more than the fair value to him of the goods so received.

1011
Art. 1520
1012
Art. 1525

239
Where the seller delivers to the buyer a quantity of goods larger than he contracted
to sell, the buyer may accept the goods included in the contract and reject the rest. If the
buyer accepts the whole of the goods so delivered he must pay for them at the contract rate.

Where the seller delivers to the buyer the goods he contracted to sell mixed with
goods of a different description not included in the contract, the buyer may accept the goods
which are in accordance with the contract and reject the rest.

If the subject matter is indivisible, the buyer may reject the whole of the goods.

The provisions of this article are subject to any usage of trade, special agreement, or
course of dealing between the parties.1013

The vendor is bound to deliver the thing sold and its accessions and accessories in
the condition in which they were upon the perfection of the contract.

All the fruits shall pertain to the vendee from the day on which the contract was
perfected.1014

Any injury to or benefit from the thing sold, after the contract has been perfected,
from the moment of the perfection of the contract to the time of delivery, shall be governed
by Articles 1163 to 1165, and 1262.1015

This rule shall apply to the sale of fungible things, made independently and for a
single price, or without consideration of their weight, number, or measure.

Should fungible things be sold for a price fixed according to weight, number, or
measure, the risk shall not be imputed to the vendee until they have been weighed, counted,
or measured and delivered, unless the latter has incurred in delay.1016

2. Sale of Immovables

The obligation to deliver the thing sold includes that of placing in the control of the
vendee all that is mentioned in the contract, in conformity with the following rules:

If the sale of real estate should be made with a statement of its area, at the rate of a
certain price for a unit of measure or number, the vendor shall be obliged to deliver to the
vendee, if the latter should demand it, all that may have been stated in the contract; but,
should this be not possible, the vendee may choose between a proportional reduction of the
price and the rescission of the contract, provided that, in the latter case, the lack in the area
be not less than one-tenth of that stated.

1013
Art. 1522
1014
Art. 1537
1015
See Reference
1016
Art. 1480

240
The same shall be done, even when the area is the same, if any part of the
immovable is not of the quality specified in the contract.

The rescission, in this case, shall only take place at the will of the vendee, when the
inferior value of the thing sold exceeds one-tenth of the price agreed upon.

Nevertheless, if the vendee would not have bought the immovable had he known of
its smaller area of inferior quality, he may rescind the sale.1017

The actions arising from Articles 1539 and 15421018 shall prescribe in six months,
counted from the day of delivery.1019

3. Inspections and Acceptance

Right of inspection Manifestation of Acceptance

The buyer is entitled to examine the goods to The buyer is deemed to have accepted the
decide whether he will become the owner, goods when:
and until the examination is completed or
waived, he is under no obligation to accept 1. he intimates to the seller that the has
them. He may however waive this right by accepted them
simply refusing to inspect the goods, taking
them as they are or by any other similar 2. the goods have been delivered to him and
act.1020 he does any act in relation to them which is
inconsistent with the ownership of the seller

3. after the lapse of a reasonable time, he


retains the goods without intimating to the
seller that he has rejected them.

Exercise of acts of ownership over the goods


is a manifestation of acceptance, such as
making use of them as owner, making
alterations in the goods or subjecting it to
the process of manufacture.

Exception:

Buyers right to make a test of goods, but


only if necessary, to enable him to determine
whether to accept or reject the goods

1017
Art. 1539
1018
See reference
1019
Art. 1543
1020
See Art. 1584

241
B. Payment of price

When may be exercised:

1. Where the ownership has passed to the buyer and he wrongfully neglects or
refuses to pay for the price
2. Where the price is payable on a day certain and he wrongfully neglects or refuses
to pay for the price, irrespective of the delivery or transfer of title
3. Where the goods cannot readily be resold for a reasonable price and the buyer
wrongfully refuses to accept them even before the ownership of the goods has passed, if
Article 15961021 is inapplicable.

XII. Warranties
A. Express warranties

A statement or representation made by the seller of goods, contemporaneously and


as a part of the contract of sale, having reference to the character, quality, or title of the
goods, and by which he promises or undertakes to insure that certain facts are or shall be as
he then represents.
Where one party expressly promised that the contingency or some act fixed by the
contract shall be performed, like a promise that the goods are of a certain kind and character
or that certain state of facts would exist, the promise constitutes a warranty, and failure of
which gives rise to an action for its breach. 1022

Any affirmation of fact or any promise by the seller relating to the thing is an express
warranty if the natural tendency of such affirmation or promise is to induce the buyer to
purchase the same, and if the buyer purchase the thing relying thereon. No affirmation of
the value of the thing, nor any statement purporting to be a statement of the seller's opinion
only, shall be construed as a warranty, unless the seller made such affirmation or statement
as an expert and it was relied upon by the buyer.1023

1021
See Reference
1022
1. it must be an affirmation of fact or any promise by seller relating to the subject matter of sale
2. natural tendency of affirmation or promise is to induce buyer to purchase subject matter
3. buyer purchases the subject matter relying thereon
1023
Art. 1546

242
B. Implied warranties1024

That which the law derives by implication or inference from the nature of the
transaction or the relative situation or circumstances of the parties, irrespective of any
intention of the seller to create it.
a. Warranty against eviction
b. Warranty against hidden defects
c. Warranty as to Fitness and Merchantability

In a contract of sale, unless a contrary intention appears, there is:

(1) An implied warranty on the part of the seller that he has a right to sell the thing
at the time when the ownership is to pass, and that the buyer shall from that time have and
enjoy the legal and peaceful possession of the thing;

(2) An implied warranty that the thing shall be free from any hidden faults or
defects, or any charge or encumbrance not declared or known to the buyer.

This shall not be held to render liable a sheriff, auctioneer, mortgagee, pledgee, or
other person professing to sell by virtue of authority in fact or law, for the sale of a thing in
which a third person has a legal or equitable interest.1025

C. Effects of warranties

Where there is a breach of warranty by the seller, the buyer may, at his election:

(1) Accept or keep the goods and set up against the seller, the breach of warranty by
way of recoupment in diminution or extinction of the price;

(2) Accept or keep the goods and maintain an action against the seller for damages
for the breach of warranty;

(3) Refuse to accept the goods, and maintain an action against the seller for damages
for the breach of warranty;

(4) Rescind the contract of sale and refuse to receive the goods or if the goods have
already been received, return them or offer to return them to the seller and recover the price
or any part thereof which has been paid.

1024
An implied warranty is a natural, not an essential element of a contract, and is deemed incorporated
in the contract of sale. It may however, be waived or modified by express stipulation. (De Leon)
1025
Art. 1547

243
When the buyer has claimed and been granted a remedy in anyone of these ways, no
other remedy can thereafter be granted, without prejudice to the provisions of the second
paragraph of Article 1191.1026

Where the goods have been delivered to the buyer, he cannot rescind the sale if he
knew of the breach of warranty when he accepted the goods without protest, or if he fails to
notify the seller within a reasonable time of the election to rescind, or if he fails to return or
to offer to return the goods to the seller in substantially as good condition as they were in at
the time the ownership was transferred to the buyer. But if deterioration or injury of the
goods is due to the breach or warranty, such deterioration or injury shall not prevent the
buyer from returning or offering to return the goods to the seller and rescinding the sale.

Where the buyer is entitled to rescind the sale and elects to do so, he shall cease to
be liable for the price upon returning or offering to return the goods. If the price or any part
thereof has already been paid, the seller shall be liable to repay so much thereof as has been
paid, concurrently with the return of the goods, or immediately after an offer to return the
goods in exchange for repayment of the price.

Where the buyer is entitled to rescind the sale and elects to do so, if the seller refuses
to accept an offer of the buyer to return the goods, the buyer shall thereafter be deemed to
hold the goods as bailee for the seller, but subject to a lien to secure the payment of any
portion of the price which has been paid, and with the remedies for the enforcement of such
lien allowed to an unpaid seller by Article 1526.1027

(5) In the case of breach of warranty of quality, such loss, in the absence of special
circumstances showing proximate damage of a greater amount, is the difference between the
value of the goods at the time of delivery to the buyer and the value they would have had if
they had answered to the warranty.1028

D. Effects of waivers

Parties may increase or diminish implied warranty against eviction; but effect
depends on good faith or bad faith on the part of the seller.

1. seller in bad faith & there is waiver against eviction null & void

2. buyer without knowledge of a particular risk made general renunciation of


warranty not waiver but merely limits liability of seller in case of eviction1029

3. buyer with knowledge of risk of eviction assumed its consequences & made a
waiver vendor not liable.1030

1026
See Reference
1027
Ibid.
1028
Art. 1599
1029
pay value of subject matter at time of eviction
1030
applicable only to waiver of warranty against eviction

244
E. Buyers options in case of breach of warranty1031

XIII. Breach of Contract

A. Remedies of the Seller

Actions for breach of the contract of sale of goods shall be governed particularly by
the provisions of this Chapter, and as to matters not specifically provided for herein, by
other applicable provisions of this Title.1032

In the preceding articles in this Title governing the sale of goods, unless the context
or subject matter otherwise requires:

(1) "Document of title to goods" includes any bill of lading, dock warrant, "quedan,"
or warehouse receipt or order for the delivery of goods, or any other document used in the
ordinary course of business in the sale or transfer of goods, as proof of the possession or
control of the goods, or authorizing or purporting to authorize the possessor of the
document to transfer or receive, either by indorsement or by delivery, goods represented by
such document.

"Goods" includes all chattels personal but not things in action or money of legal
tender in the Philippines. The term includes growing fruits or crops.

"Order" relating to documents of title means an order by indorsement on the


documents.

"Quality of goods" includes their state or condition.

"Specific goods" means goods identified and agreed upon at the time a contract of
sale is made.

An antecedent or pre-existing claim, whether for money or not, constitutes "value"


where goods or documents of title are taken either in satisfaction thereof or as security
therefor.

(2) A person is insolvent within the meaning of this Title who either has ceased to
pay his debts in the ordinary course of business or cannot pay his debts as they become due,
whether insolvency proceedings have been commenced or not.

When goods delivered to buyer he cannot rescind sale if he knew of the breach of warranty when he
accepted goods without protest if he fails to return or offer to return goods to seller in substantially as
good condition as they were at time ownership was transferred
When goods deteriorated, buyer can still return them in that condition if such is due to breach or
warranty
1031
See C. Effects of Warranties, supra
1032
Art. 1594

245
(3) Goods are in a "deliverable state" within the meaning of this Title when they are
in such a state that the buyer would, under the contract, be bound to take delivery of
them.1033

1. Sale of Movables

a. Movables in General Failure of the vendee to appear to receive delivery or,


having appeared, failure to tender the price at the same time, unless, a longer period for its
payment has been stipulated

i. action to rescind the sale1034

b. Sale of Goods

i. action for the price1035


ii. action for damages1036

B. Recto Law: Sale of Movables on Installment

The Recto law1037 provides for remedies of a seller in contracts of sale of personal
property by installment, as follows:

(1) Exact fulfillment of the obligation, should the vendee fail to pay;

(2) Cancel the sale, should the vendee's failure to pay cover two or more installments;

(3) Foreclose the chattel mortgage on the thing sold, if one has been constituted,
should the vendee's failure to pay cover two or more installments. In this case, he shall have
no further action against the purchaser to recover any unpaid balance of the price. Any
agreement to the contrary shall be void.1038

The preceding article shall be applied to contracts purporting to be leases of personal


property with option to buy, when the lessor has deprived the lessee of the possession or
enjoyment of the thing.1039

In the case referred to in the two preceding articles, a stipulation that the installments
or rents paid shall not be returned to the vendee or lessee shall be valid insofar as the same
may not be unconscionable under the circumstances.1040

1033
Art. 1636
1034
Art. 1593
1035
Art. 1595
1036
Art. 1596
1037
Installment Sales Law
1038
Art. 1484
1039
Art. 1485

246
C. Sale of Immovables

1. P.D. 957

No installment payment made by a buyer in a subdivision or condominium project


for the lot or unit he contracted to buy shall be forfeited in favor of the owner or developer
when the buyer, after due notice to the owner or developer, desists from further payment
due to the failure of the owner or developer to develop the subdivision or condominium
project according to the approved plans and within the time limit for complying with the
same. Such buyer may, at his option, be reimbursed the total amount paid including
amortization interests but excluding delinquency interests, with interest thereon at the legal
rate.1041

The rights of the buyer in the event of this failure to pay the installments due for
reasons other than the failure of the owner or developer to develop the project shall be
governed by Republic Act No. 6552.

Where the transaction or contract was entered into prior to the effectivity of
Republic Act No. 6552 on August 26, 1972, the defaulting buyer shall be entitled to the
corresponding refund based on the installments paid after the effectivity of the law in the
absence of any provision in the contract to the contrary.1042

2. Sale of Immovables on Installment1043

It covers sales on installments of residential real estate and financing of such


acquisitions.

Where the buyer has paid at least two (2) years of installment, the buyer is entitled to
the following rights in case he defaults in payments of succeeding installments:

1) To pay, without additional interest, the unpaid installments due within the total
grace period earned by him which is fixed at the rate of one month grace period for every
one year of installments.

2) If the contract is cancelled, the seller shall refund to the buyer the cash surrender
value of the payments on the property equivalent to the 50% of the total payment made
every year but not to exceed 90% of the total payments made.

Where the buyer has paid less than two years, he shall be entitled to a grace period of
60 days from the date the installment became due. If he fails to pay the installments due at
the expiration of the grace period, the seller may cancel the contract after 30 days from

1040
Art. 1486
1041
Sec. 23
1042
Sec. 24
1043
Maceda Law

247
receipt by the buyer of the notice of cancellation, or the demand for rescission of the
contract by a notarial act.

C. Remedies of the Buyer

1. Sale of Movable

When seller fails to deliver, buyer may seek specific performance without giving
seller option to retain goods on payment of damages.

2. Sale of Immovables

If disturbed in possession or with reasonable grounds to fear disturbance

i. Suspend payment

In case of subdivision or condo projects: If real estate developer fails to comply with
obligations according to approved plan:

i. Rescind
ii. Suspend payment until seller complies

XIV. Extinguishment of the Sale

A. Causes

Obligations are extinguished by:

(1) Payment or performance;


(2) Loss of the thing due;
(3) Condonation or remission of the debt;
(4) Confusion or merger of the rights of creditor and debtor;
(5) Compensation;
(6) Novation.

Other causes:

1. Annulment,
2. Rescission,
3. Fulfillment of a resolutory condition, and

248
4. Prescription.1044
Sales are extinguished by the same causes as all other obligations and by
conventional or legal redemption.1045

B. Conventional redemption

The right which the vendor reserves to himself, to reacquire the property sold
provided he returns to the vendee:

a. the price of the sale;


b. expenses of the contract;
c. any other legitimate payments made therefore and;
d. the necessary and useful expenses made on the thing sold; and
e. fulfills other stipulations which may have been agreed upon.

Conventional redemption shall take place when the vendor reserves the right to
repurchase the thing sold, with the obligation to comply with the provisions of Article
16161046 and other stipulations which may have been agreed upon.1047

C. Equitable mortgage

One which lacks the proper formalities, form of words, or other requisites
prescribed by law for a mortgage, but shows the intention of the parties to make the
property subject of the contract as security for a debt and contains nothing impossible or
contrary to law.1048

The contract shall be presumed to be an equitable mortgage, in any of the following


cases:

(1) When the price of a sale with right to repurchase is unusually inadequate;
(2) When the vendor remains in possession as lessee or otherwise;
(3) When upon or after the expiration of the right to repurchase another instrument
extending the period of redemption or granting a new period is executed;

1044
Art. 1231
1045
Art. 1600
1046
The vendor cannot avail himself of the right of repurchase without returning to the vendee the price
of the sale, and in addition:
(1) The expenses of the contract, and any other legitimate payments made by reason of the sale;
(2) The necessary and useful expenses made on the thing sold.
1047
Art. 1601
1048
Cachola vs. CA, 208 SCRA 496

249
(4) When the purchaser retains for himself a part of the purchase price;
(5) When the vendor binds himself to pay the taxes on the thing sold;
(6) In any other case where it may be fairly inferred that the real intention of the
parties is that the transaction shall secure the payment of a debt or the performance of any
other obligation.

In any of the foregoing cases, any money, fruits, or other benefit to be received by
the vendee as rent or otherwise shall be considered as interest which shall be subject to the
usury laws.1049

In case of doubt, a contract purporting to be a sale with right to repurchase shall be


construed as an equitable mortgage.1050

The provisions of Article 16021051 shall also apply to a contract purporting to be an


absolute sale.1052

D. Distinguish from option to buy

Option contract

A contract granting a privilege in one person, for which he has paid a consideration,
which gives him the right to buy certain merchandise, at anytime within the agreed period, at
a fixed price.1053

In an option to buy, the party who has an option may validly and effectively exercise
his right by merely notifying the owner of the formers decision to buy and expressing his
readiness to pay the stipulated price.

E. Period of redemption

The right referred to in article 1601,1054 in the absence of an express agreement, shall
last four years from the date of the contract.

Should there be an agreement, the period cannot exceed ten years.

1049
Art. 1602
1050
Art. 1603
1051
supra
1052
Art. 1604
1053
An option without consideration is void and the effect is the same as if there was no option.
However, in Sanchez vs. Rigos (1972), even though the option was not supported by a consideration,
the moment it was accepted, a perfected contract of sale resulted, applying Art. 1324 of the NCC. In view
of the ruling of the Supreme Court, the only importance of the consideration for an option is that the
option cannot be withdrawn by the grantor after acceptance.
1054
supra

250
However, the vendor may still exercise the right to repurchase within thirty days
from the time final judgment was rendered in a civil action on the basis that the contract was
a true sale with right to repurchase.1055

F. Exercise of the right to redeem

The vendor cannot avail himself of the right of repurchase without returning to the
vendee the price of the sale, and in addition:

(1) The expenses of the contract, and any other legitimate payments made by reason
of the sale;
(2) The necessary and useful expenses made on the thing sold.1056

G. Legal redemption

The right to be subrogated, upon the same terms and conditions stipulated in the
contract, in the place of one who acquires a thing by purchase or dation in payment, or by
any other transaction whereby ownership is transmitted by onerous title.1057

H. Age redemption1058

XV. The Subdivision and Condominium Buyers' Protective Decree1059

XVI. The Condominium Act1060

1055
Art. 1606
1056
Art. 1616
1057
Art. 1619
May be effected against movables or immovables.
It must be exercised within thirty (30) days from the notice in writing by the vendor.
1058
ibid
1059
PD 957, see Reference
1060
RA 4726, ibid

251
SUCCESSION

I. General Provisions

The inheritance includes all the property, rights and obligations of a person which
are not extinguished by his death.1061

Succession may be:

(1) Testamentary;
(2) Legal or intestate; or
(3) Mixed.1062

Testamentary succession is that which results from the designation of an heir, made
in a will executed in the form prescribed by law.1063

Mixed succession is that effected partly by will and partly by operation of law.1064

A. Definition/What is transmitted

Succession is a mode of acquisition by virtue of which the property, rights and


obligations to the extent of the value of the inheritance, of a person are transmitted through
his death to another or others either by his will or by operation of law.1065

"Decedent" is the general term applied to the person whose property is transmitted
through succession, whether or not he left a will. If he left a will, he is also called the
testator.1066

The inheritance of a person includes not only the property and the transmissible
rights and obligations existing at the time of his death, but also those which have accrued
thereto since the opening of the succession.1067

1061
Art. 776
1062
Art. 778
1063
Art. 779
1064
Art. 780
1065
Art. 774
1066
Art. 775
1067
Art. 781

252
B. When succession occurs

The rights to the succession are transmitted from the moment of the death of the
decedent.1068

C. Kinds of Successors Heirs, Devisees, Legatees

An heir is a person called to the succession either by the provision of a will or by


operation of law.

Devisees and legatees are persons to whom gifts of real and personal property are
respectively given by virtue of a will.1069

II. Testamentary Succession

A. Wills

1. In General

a. Definition and characteristics

A will is an act whereby a person is permitted, with the formalities prescribed by law,
to control to a certain degree the disposition of this estate, to take effect after his death.1070

The testator may not make a testamentary disposition in such manner that another
person has to determine whether or not it is to be operative.1071

i) Act of making a will a strictly personal act

The making of a will is a strictly personal act; it cannot be left in whole or in part to
the discretion of a third person, or accomplished through the instrumentality of an agent or
attorney.1072

The duration or efficacy of the designation of heirs, devisees or legatees, or the


determination of the portions which they are to take, when referred to by name, cannot be
left to the discretion of a third person.1073

1068
Art. 777
1069
Art. 782
1070
Art. 783
1071
Art. 787
1072
Art. 784
1073
Art. 785

253
a) Exception

The testator may entrust to a third person the distribution of specific property or
sums of money that he may leave in general to specified classes or causes, and also the
designation of the persons, institutions or establishments to which such property or sums
are to be given or applied.1074

ii) Rules of Construction and Interpretation1075

If a testamentary disposition admits of different interpretations, in case of doubt,


that interpretation by which the disposition is to be operative shall be preferred.1076
When there is an imperfect description, or when no person or property exactly
answers the description, mistakes and omissions must be corrected, if the error appears from
the context of the will or from extrinsic evidence, excluding the oral declarations of the
testator as to his intention; and when an uncertainty arises upon the face of the will, as to the
application of any of its provisions, the testator's intention is to be ascertained from the
words of the will, taking into consideration the circumstances under which it was made,
excluding such oral declarations.1077
The words of a will are to be taken in their ordinary and grammatical sense, unless a
clear intention to use them in another sense can be gathered, and that other can be
ascertained.
Technical words in a will are to be taken in their technical sense, unless the context
clearly indicates a contrary intention, or unless it satisfactorily appears that the will was
drawn solely by the testator, and that he was unacquainted with such technical sense.1078
The words of a will are to receive an interpretation which will give to every
expression some effect, rather than one which will render any of the expressions inoperative;
and of two modes of interpreting a will, that is to be preferred which will prevent
intestacy.1079

1074
Art. 786
1075
The testators intent (animus testandi), as well as giving effect to such intent, is primordial. It is
sometimes said that the supreme law in succession is the intent of the testator. All rules of construction
are designed to ascertain and give effect to that intention. It is only when the intention of the testator is
contrary to law, morals, or public policy that it cannot be given effect.
In case of doubt, that interpretation by which the disposition is to be operative shall be preferred.
That construction is to be adopted which will sustain and uphold the will in all its parts, if it can be done
consistently with the established rules of law.
1076
Art. 788
1077
Art. 789
1078
Art. 790
1079
Art. 791

254
The invalidity of one of several dispositions contained in a will does not result in the
invalidity of the other dispositions, unless it is to be presumed that the testator would not
have made such other dispositions if the first invalid disposition had not been made.1080
Property acquired after the making of a will shall only pass thereby, as if the testator
had possessed it at the time of making the will, should it expressly appear by the will that
such was his intention.1081
Every devise or legacy shall cover all the interest which the testator could device or
bequeath in the property disposed of, unless it clearly appears from the will that he intended
to convey a less interest.1082

iii) Law governing formal validity


The validity of a will as to its form depends upon the observance of the law in force
at the time it is made.1083

2. Testamentary Capacity1084 and Intent

All persons who are not expressly prohibited by law may make a will.1085
A married woman may make a will without the consent of her husband, and without
the authority of the court.1086

A married woman may dispose by will of all her separate property as well as her
share of the conjugal partnership or absolute community property.1087

a. Age Requirement

Persons of either sex under eighteen (18) years of age cannot make a will.1088

b. Soundness of Mind

It is essential that the testator be of sound mind at the time of execution of the
1089
will.

1080
Art. 792
1081
Art. 793
1082
Art. 794
1083
Art. 795
1084
Testamentary capacity:
1. All persons who are not expressly prohibited by law
2. 18 years old and above
3. Of sound mind, at the time of its execution
1085
Art. 796
1086
Art. 802
1087
Art. 803
1088
Art. 797
1089
Art. 798

255
(i) When testator is deemed to be of sound mind

It is not necessary that the testator be in full possession of all his reasoning faculties,
or that his mind be wholly unbroken, unimpaired, or unshattered by disease, injury or other
cause.

It shall be sufficient if the testator was able at the time of making the will to know
the nature of the estate to be disposed of, the proper objects of his bounty, and the character
of the testamentary act.1090

The burden of proof that the testator was not of sound mind at the time of making
his dispositions is on the person who opposes the probate of the will; but if the testator, one
month, or less, before making his will was publicly known to be insane, the person who
maintains the validity of the will must prove that the testator made it during a lucid
interval.1091

(ii) Presumptions

Every person is of sound mind, in the absence of proof to the contrary.

(iii) Supervening incapacity

Does not invalidate an effective will, nor is the will of an incapable validated by the
supervening of capacity.1092

3. Form

a) Rules governing the formal validity of wills

The forms and solemnities of contracts, wills, and other public instruments shall be
governed by the laws of the country in which they are executed.

When the acts referred to are executed before the diplomatic or consular officials of
the Republic of the Philippines in a foreign country, the solemnities established by
Philippine laws shall be observed in their execution.

Prohibitive laws concerning persons, their acts or property, and those which have for
their object public order, public policy and good customs shall not be rendered ineffective
by laws or judgments promulgated, or by determinations or conventions agreed upon in a
foreign country.1093

1090
Art. 799
1091
Art. 800
1092
Art. 801
1093
Art. 17

256
When a Filipino is in a foreign country, he is authorized to make a will in any of the
forms established by the law of the country in which he may be. Such will may be probated
in the Philippines.1094

The will of an alien who is abroad produces effect in the Philippines if made with the
formalities prescribed by the law of the place in which he resides, or according to the
formalities observed in his country, or in conformity with those which this Code
prescribes.1095

A will made in the Philippines by a citizen or subject of another country, which is


executed in accordance with the law of the country of which he is a citizen or subject, and
which might be proved and allowed by the law of his own country, shall have the same
effect as if executed according to the laws of the Philippines.1096

Wills, prohibited by the preceding article, executed by Filipinos in a foreign country


shall not be valid in the Philippines, even though authorized by the laws of the country
where they may have been executed.1097

(i) See law governing substantive validity

Laws relating to family rights and duties, or to the status, condition and legal capacity
of persons are binding upon citizens of the Philippines, even though living abroad.1098

Real property as well as personal property is subject to the law of the country where
it is stipulated.1099

Capacity to succeed is governed by the law of the nation of the decedent.1100

b) Common requirements

(i) In Writing
(ii) Language/Dialect Requirement

Every will must be in writing and executed in a language or dialect known to the
testator.1101

1094
Art. 815
1095
Art. 816
1096
Art. 817
1097
Art. 819
1098
Art. 15
1099
Art. 16
1100
Art. 1039
1101
Art. 804

257
c) Notarial Wills

(i) Arts. 805-806

Requisites for valid notarial will:

1. In writing
2. In a language or dialect known to the testator
3. Subscribed at the end by the testator himself or by the testators name written by
some other person in his presence, and by his express direction

4. Attested & subscribed by three or more credible witnesses in the presence of the
testator and of one another

5. Each and every page, except the last, must be signed by the testator or by the
person requested by him to write his name, and by the instrumental witnesses of the will, on
the left margin

6. Each and every page of the will must be numbered correlatively in letters placed
on the upper part of each page

7. It must contain an attestation clause, stating the following:

a. The number of pages used upon which the will is written

b. The fact that the testator signed the will and every page, or caused some
other person to write his name, under his express direction, in the presence of the
instrumental witnesses

c. All the instrumental witnesses witnessed and signed the will and all its
pages in the presence of the testator and of one another

8. It must be acknowledged before a notary public by the testator and the


witnesses.1102
(ii) Special rules for handicapped testators

Testator is deaf or a deaf mute Testator is blind

1. Testator must personally read the will, if The will shall be read to the testator twice
able to do so;
1. Once by one of the subscribing witnesses
2. Otherwise, he shall designate two persons
to read it and communicate to him, in some 2. Once by the notary public before whom
practicable manner, its contents.1103 the will is acknowledged.1104

1102
Arts. 805-806

258
(iii) Substantial Compliance

In the absence of bad faith, forgery, or fraud, or undue and improper pressure and
influence, defects and imperfections in the form of attestation or in the language used
therein shall not render the will invalid if it is proved that the will was in fact executed and
attested in substantial compliance with all the requirements of Article 805.1105

(iv) Witnesses to wills

Any person of sound mind and of the age of eighteen (18) years or more, and not
blind, deaf or dumb, and able to read and write.1106

Disqualified from being witnesses to a will:

(1) Any person not domiciled in the Philippines;

(2) Those who have been convicted of falsification of a document, perjury or false
testimony.1107

If the witnesses attesting the execution of a will are competent at the time of
attesting, their becoming subsequently incompetent shall not prevent the allowance of the
will.1108

If a person attests the execution of a will, to whom or to whose spouse, or parent, or


child, a devise or legacy is given by such will, such devise or legacy shall, so far only as
concerns such person, or spouse, or parent, or child of such person, or any one claiming
under such person or spouse, or parent, or child, be void, unless there are three other
competent witnesses to such will. However, such person so attesting shall be admitted as a
witness as if such devise or legacy had not been made or given.1109

1103
Art. 807
1104
Art. 808
1105
Art. 809
1106
Art. 820
Qualifications of witnesses to a notarial will:
1. Of sound mind
2. Of the age of 18 years or more
3. Not blind, deaf or dumb
4. Able to read and write
5. Domiciled in the Philippines
6. Have not been convicted of falsification of a document, perjury or false testimony
1107
Art. 821
1108
Art. 822
1109
Art. 823

259
A mere charge on the estate of the testator for the payment of debts due at the time
of the testator's death does not prevent his creditors from being competent witnesses to his
will.1110

d. Holographic Wills

(i) Requirements

Must be entirely written, dated, and signed by the hand of the testator himself. It is
subject to no other form, and may be made in or out of the Philippines, and need not be
witnessed.1111

The dispositions of the testator written below his signature must be dated and signed
by him in order to make them valid as testamentary dispositions.1112

When a number of dispositions appearing in a holographic will are signed without


being dated, and the last disposition has a signature and a date, such date validates the
dispositions preceding it, whatever be the time of prior dispositions.1113

(a) Requirements in case of alterations

The testator must authenticate the same by his full signature.1114

(ii) Witnesses Required for Probate

It shall be necessary that at least one (1) witness who knows the handwriting and
signature of the testator explicitly declare that the will and the signature are in the
handwriting of the testator. If the will is contested, at least three of such witnesses shall be
required.

In the absence of any competent witness, and if the court deem it necessary, expert
testimony may be resorted to.1115

e. Joint Wills

Two or more persons cannot make a will jointly, or in the same instrument, either
for their reciprocal benefit or for the benefit of a third person.1116

1110
Art. 824
1111
Art. 810
1112
Art. 812
1113
Art. 813
1114
Art. 814
1115
Art. 811
1116
Art. 818

260
Wills, prohibited above, executed by Filipinos in a foreign country shall not be valid
in the Philippines, even though authorized by the laws of the country where they may have
been executed.1117

4. Codicils

a. Definition and Formal Requirements

A codicil is supplement or addition to a will, made after the execution of a will and
annexed to be taken as a part thereof, by which disposition made in the original will is
explained, added to, or altered.1118

In order that a codicil may be effective, it shall be executed as in the case of a will.1119

5. Incorporate by Reference1120

Requisites:

a. The document or paper referred to in the will must be in existence at the time of
the execution of the will

b. The will must clearly describe and identify the same, stating among other things
the number of pages thereof

c. It must be identified by clear and satisfactory proof as the document or paper


referred to therein

d. It must be signed by the testator and the witnesses on each and every page, except
in case of voluminous books of account or inventories.1121

6. Revocation

A will may be revoked by the testator at any time before his death. Any waiver or
restriction of this right is void.1122
A revocation done outside the Philippines, by a person who does not have his
domicile in this country, is valid when it is done according to the law of the place where the
will was made, or according to the law of the place in which the testator had his domicile at

1117
Art. 819
1118
Art. 825
1119
Art. 826
1120
Contemplates only lists of properties, books of accounts, and inventories. Provisions which are in the
nature of testamentary dispositions must be contained in the will itself.
1121
Art. 827
1122
Art. 828

261
the time; and if the revocation takes place in this country, when it is in accordance with the
provisions of this Code.1123
Subsequent wills which do not revoke the previous ones in an express manner, annul
only such dispositions in the prior wills as are inconsistent with or contrary to those
contained in the later wills.1124

A revocation made in a subsequent will shall take effect, even if the new will should
become inoperative by reason of the incapacity of the heirs, devisees or legatees designated
therein, or by their renunciation.1125

A revocation of a will based on a false cause or an illegal cause is null and void1126.
The recognition of an illegitimate child does not lose its legal effect, even though the
will wherein it was made should be revoked.1127

a. Kinds

(1) By implication of law;1128 or

(2) By some will, codicil, or other writing executed as provided in case of wills;1129 or

(3) By burning, tearing, cancelling, or obliterating the will with the intention of
revoking it, by the testator himself, or by some other person in his presence, and by his
express direction. If burned, torn, cancelled, or obliterated by some other person, without
the express direction of the testator, the will may still be established, and the estate

1123
Art. 829
1124
Art. 831
1125
Art. 832
1126
Art. 833
1127
Art. 834
1128
a. legal separation revokes testamentary provisions in favor of the offending spouse;
b. preterition revokes the institution of heir;
c. judicial action for recovery of debt revokes a legacy of credit/remission of debt;
d. transformation, alienation, or loss of bequeathed property revokes a legacy of such property;
e. act of unworthiness by an heir, devisee/legatee revokes testamentary provisions in his favor;
f. if both spouses of the subsequent marriage acted in bad faith, said marriage shall be void ab initio
and testamentary dispositions made by one in favor of the other are revoked by operation of law (Art. 44,
FC); and
g. void ab initio or annulled marriages revoke testamentary dispositions made by one spouse in favor
of the other (Art. 50, FC).
1129
Which may either be:
a. Express when there is a revocatory clause expressly revoking the previous will or a part thereof
b. Implied when the provisions thereof are partially or entirely inconsistent with those of the
previous will.

262
distributed in accordance therewith, if its contents, and due execution, and the fact of its
unauthorized destruction, cancellation, or obliteration are established.1130

7. Allowance and Disallowance of Wills

a. Probate Requirement

No will shall pass either real or personal property unless it is proved and allowed.

The testator himself may, during his lifetime, petition the court having jurisdiction
for the allowance of his will.

The Supreme Court shall formulate such additional Rules of Court as may be
necessary for the allowance of wills on petition of the testator.

Subject to the right of appeal, the allowance of the will, either during the lifetime of
the testator or after his death, shall be conclusive as to its due execution.1131

(i) Issues to be Resolved in Probate Proceedings

The will shall be disallowed in any of the following cases:

(1) The formalities required by law have not been complied with;

(2) The testator was insane, or otherwise mentally incapable of making a will, at the
time of its execution;

(3) It was executed through force or under duress, or the influence of fear, or threats;

(4) It was procured by undue and improper pressure and influence, on the part of the
beneficiary or of some other person;

(5) The signature of the testator was procured by fraud;

(6) The testator acted by mistake or did not intend that the instrument he signed
should be his will at the time of affixing his signature thereto.1132

While express revocation may be effected by a subsequent will, or a codicil, or a nontestamentary


writing executed as provided in case of wills, implied revocation may be effected only by either a
subsequent will, or a codicil.
1130
Art. 830
Requisites:
a. testamentary capacity at the time of performing the act of destruction;
b. intent to revoke (animus revocandi);
c. actual physical act of destruction;
d. completion of the subjective phase; and
e. performed by the testator himself or by some other person in his presence and express direction.
(The list is exclusive)
1131
Art. 838

263
(a) Exceptions: when practical
considerations demand the intrinsic
validity of the will be resolved

(ii) Effect of Final Decree of Probate, Res Judicata


on Formal Validity

Binding upon the whole world;1133 and public policy and sound practice demand that
at the risk of occasional errors judgment of courts should become final at some definite date
fixed by law.

b. Grounds for Denying Probate1134

B. Institution of Heirs

An act by virtue of which a testator designates in his will the person or persons who
are to succeed him in his property and transmissible rights and obligations.1135

A will shall be valid even though it should not contain an institution of an heir, or
such institution should not comprise the entire estate, and even though the person so
instituted should not accept the inheritance or should be incapacitated to succeed.

In such cases the testamentary dispositions made in accordance with law shall be
complied with and the remainder of the estate shall pass to the legal heirs.1136

One who has no compulsory heirs may dispose by will of all his estate or any part of
it in favor of any person having capacity to succeed.

One who has compulsory heirs may dispose of his estate provided he does not
contravene the provisions of this Code with regard to the legitime of said heirs.1137

The testator shall designate the heir by his name and surname, and when there are
two persons having the same names, he shall indicate some circumstance by which the
instituted heir may be known.

Even though the testator may have omitted the name of the heir, should he
designate him in such manner that there can be no doubt as to who has been instituted, the
institution shall be valid.1138

1132
Art. 839
1133
Manalo vs. Paredes, 47 Phil. 938; In re Estates of Johnson, 39 Phil. 156
1134
See Art. 839, supra
1135
Art. 840
The proper test in order to determine the validity of an institution of heir is the possibility of finally
ascertaining the identity of the instituted heir by intrinsic or extrinsic evidence.
1136
Art. 841
1137
Art. 842
1138
Art. 843

264
An error in the name, surname, or circumstances of the heir shall not vitiate the
institution when it is possible, in any other manner, to know with certainty the person
instituted.

If among persons having the same names and surnames, there is a similarity of
circumstances in such a way that, even with the use of other proof, the person instituted
cannot be identified, none of them shall be an heir.1139

Every disposition in favor of an unknown person shall be void, unless by some event
or circumstance his identity becomes certain. However, a disposition in favor of a definite
class or group of persons shall be valid.1140

Heirs instituted without designation of shares shall inherit in equal parts.1141

When the testator institutes some heirs individually and others collectively as when
he says, "I designate as my heirs A and B, and the children of C," those collectively
designated shall be considered as individually instituted, unless it clearly appears that the
intention of the testator was otherwise.1142

If the testator should institute his brothers and sisters, and he has some of full blood
and others of half blood, the inheritance shall be distributed equally unless a different
intention appears.1143

When the testator calls to the succession a person and his children they are all
deemed to have been instituted simultaneously and not successively.1144

The statement of a false cause for the institution of an heir shall be considered as not
written, unless it appears from the will that the testator would not have made such
institution if he had known the falsity of such cause.1145

If the testator has instituted only one heir, and the institution is limited to an aliquot
part of the inheritance, legal succession takes place with respect to the remainder of the
estate.

The same rule applies if the testator has instituted several heirs, each being limited to
an aliquot part, and all the parts do not cover the whole inheritance.1146

If it was the intention of the testator that the instituted heirs should become sole
heirs to the whole estate, or the whole free portion, as the case may be, and each of them has

1139
Art. 844
1140
Art. 845
1141
Art. 846
1142
Art. 847
1143
Art. 848
1144
Art. 849
1145
Art. 850
1146
Art. 851

265
been instituted to an aliquot part of the inheritance and their aliquot parts together do not
cover the whole inheritance, or the whole free portion, each part shall be increased
proportionally.1147

If each of the instituted heirs has been given an aliquot part of the inheritance, and
the parts together exceed the whole inheritance, or the whole free portion, as the case may
be, each part shall be reduced proportionally.1148

A voluntary heir who dies before the testator transmits nothing to his heirs.

A compulsory heir who dies before the testator, a person incapacitated to succeed,
and one who renounces the inheritance, shall transmit no right to his own heirs except in
cases expressly provided for in this Code.1149

1. Preterition

a. Definition

The omission in the testators will of one, some, or all of the compulsory heirs in the
direct line, whether living at the time of the execution of the will or born after the death of
the testator.1150

b. Requisites

1. The heir omitted must be a compulsory heir in the direct line;


2. The omission must be complete and total in character; and
3. The compulsory heir omitted must survive the testator.

c. Effects

(i) Effects of preterition, devisees only entitled to


completion of legitime

i. It annuls the institution of heir;


ii. The devises and legacies are valid insofar as they are not inofficious; and
ii. If the omitted compulsory heir should die before the testator, the institution shall
be effectual, without prejudice to the right of representation.1151

1147
Art. 852
1148
Art. 853
1149
Art. 856
1150 st
Art. 854, 1 par.
1151 nd
Art. 854, 2 par.

266
2. Concept1152

3. Compulsory Heirs in the Direct Line1153

4. Preterition vs. Disposition less than Legitime/Donation inter


vivos

The share of a child or descendant omitted in a will must first be taken from the part
of the estate not disposed of by the will, if any; if that is not sufficient, so much as may be
necessary must be taken proportionally from the shares of the other compulsory heirs.1154

Any compulsory heir to whom the testator has left by any title less than the legitime
belonging to him may demand that the same be fully satisfied.1155
Testamentary dispositions that impair or diminish the legitime of the compulsory
heirs shall be reduced on petition of the same, insofar as they may be inofficious or
excessive.1156
To determine the legitime, the value of the property left at the death of the testator
shall be considered, deducting all debts and charges, which shall not include those imposed
in the will.
To the net value of the hereditary estate, shall be added the value of all donations by
the testator that are subject to collation, at the time he made them.1157
Donations given to children shall be charged to their legitime.

Donations made to strangers shall be charged to that part of the estate of which the
testator could have disposed by his last will.
Insofar as they may be inofficious or may exceed the disposable portion, they shall
be reduced according to the rules established by this Code.1158
Donations which an illegitimate child may have received during the lifetime of his
father or mother, shall be charged to his legitime.
Should they exceed the portion that can be freely disposed of, they shall be reduced
in the manner prescribed by this Code.1159
After the legitime has been determined in accordance with the three preceding
articles, the reduction shall be made as follows:

1152
See Definition, supra
1153
see Legitime, infra
1154
Art. 855
1155
Art. 906
1156
Art. 907
1157
Art. 908
1158
Art. 909
1159
Art. 910

267
(1) Donations shall be respected as long as the legitime can be covered, reducing or
annulling, if necessary, the devises or legacies made in the will;
(2) The reduction of the devises or legacies shall be pro rata, without any distinction
whatever.
If the testator has directed that a certain devise or legacy be paid in preference to
others, it shall not suffer any reduction until the latter have been applied in full to the
payment of the legitime.
(3) If the devise or legacy consists of a usufruct or life annuity, whose value may be
considered greater than that of the disposable portion, the compulsory heirs may choose
between complying with the testamentary provision and delivering to the devisee or legatee
the part of the inheritance of which the testator could freely dispose.1160
If the devise subject to reduction should consist of real property, which cannot be
conveniently divided, it shall go to the devisee if the reduction does not absorb one-half of
its value; and in a contrary case, to the compulsory heirs; but the former and the latter shall
reimburse each other in cash for what respectively belongs to them.
The devisee who is entitled to a legitime may retain the entire property, provided its
value does not exceed that of the disposable portion and of the share pertaining to him as
legitime.1161
If the heirs or devisees do not choose to avail themselves of the right granted by the
preceding article, any heir or devisee who did not have such right may exercise it; should the
latter not make use of it, the property shall be sold at public auction at the instance of any
one of the interested parties.1162
The testator may devise and bequeath the free portion as he may deem fit.1163
A compulsory heir may, in consequence of disinheritance, be deprived of his
legitime, for causes expressly stated by law.1164
Disinheritance can be effected only through a will wherein the legal cause therefor
shall be specified.1165
The burden of proving the truth of the cause for disinheritance shall rest upon the
other heirs of the testator, if the disinherited heir should deny it.1166
Disinheritance without a specification of the cause, or for a cause the truth of which,
if contradicted, is not proved, or which is not one of those set forth in this Code, shall annul
the institution of heirs insofar as it may prejudice the person disinherited; but the devises

1160
Art. 911
1161
Art. 912
1162
Art. 913
1163
Art. 914
1164
Art. 915
1165
Art. 916
1166
Art. 917

268
and legacies and other testamentary dispositions shall be valid to such extent as will not
impair the legitime.1167

C. Substitution of Heirs

The testator may designate one or more persons to substitute the heir or heirs
instituted in case such heir or heirs should die before him, or should not wish, or should be
incapacitated to accept the inheritance.

A simple substitution, without a statement of the cases to which it refers, shall


comprise the three mentioned in the preceding paragraph, unless the testator has otherwise
provided.1168

Two or more persons may be substituted for one; and one person for two or more
1169
heirs.

If heirs instituted in unequal shares should be reciprocally substituted, the substitute


shall acquire the share of the heir who dies, renounces, or is incapacitated, unless it clearly
appears that the intention of the testator was otherwise. If there are more than one
substitute, they shall have the same share in the substitution as in the institution.1170

The substitute shall be subject to the same charges and conditions imposed upon the
instituted heir, unless and testator has expressly provided the contrary, or the charges or
conditions are personally applicable only to the heir instituted.1171

The following shall not take effect:

(1) Fideicommissary substitutions which are not made in an express manner, either
by giving them this name, or imposing upon the fiduciary the absolute obligation to deliver
the property to a second heir;

(2) Provisions which contain a perpetual prohibition to alienate, and even a


temporary one, beyond the limit fixed in article 863;

(3) Those which impose upon the heir the charge of paying to various persons
successively, beyond the limit prescribed in article 863, a certain income or pension;

(4) Those which leave to a person the whole or part of the hereditary property in
order that he may apply or invest the same according to secret instructions communicated to
him by the testator.1172

1167
Art. 918
1168
Art. 859
1169
Art. 860
1170
Art. 861
1171
Art. 862
1172
Art. 867

269
The nullity of the fideicommissary substitution does not prejudice the validity of the
institution of the heirs first designated; the fideicommissary clause shall simply be considered
as not written.1173

The dispositions of the testator declaring all or part of the estate inalienable for more
than twenty years are void.1174

1. Definition

Substitution is the appointment of another heir so that he may enter into the
inheritance in default of the heir originally instituted.1175
The act by which the testator designates the person or persons to take the place of
the heir or heirs first instituted.1176

2. Kinds:

(a) Simple or common;


(b) Brief or compendious;
(c) Reciprocal; or
(d) Fideicommissary.1177

3. Simple Substitution

When the testator designates one or more persons to substitute the heirs/s instituted
in case such heir/s should die before him, or should not wish, or should be incapacitated to
accept the inheritance

4. Fideicommissary Substitution

The fiduciary or first heir instituted is entrusted with the obligation to preserve and
to transmit to a second heir the whole or part of the inheritance, provided such substitution
does not go beyond one degree from the heir originally instituted, and provided further, that
the fiduciary or first heir and the second heir are living at the time of the death of the
testator.1178
A fideicommissary substitution can never burden the legitime.1179

1173
Art. 868
1174
Art. 870
1175
Art. 857
1176
Tolentino
1177
Art. 858
1178
Art. 863
Requisites for a fideicommissary substitution:

270
Every fideicommissary substitution must be expressly made in order that it may be
valid.
The fiduciary shall be obliged to deliver the inheritance to the second heir, without
other deductions than those which arise from legitimate expenses, credits and
improvements, save in the case where the testator has provided otherwise.1180
The second heir shall acquire a right to the succession from the time of the testator's
death, even though he should die before the fiduciary. The right of the second heir shall pass
to his heirs.1181
A provision whereby the testator leaves to a person the whole or part of the
inheritance, and to another the usufruct, shall be valid. If he gives the usufruct to various
persons, not simultaneously, but successively, the provisions of Article 8631182 shall apply.1183

D. Conditional Testamentary Dispositions and Testamentary Dispositions


with a Term

The institution of an heir may be made conditionally, or for a certain purpose or


1184
cause.

The testator cannot impose any charge, condition, or substitution whatsoever upon
the legitimes prescribed in this Code. Should he do so, the same shall be considered as not
imposed.1185

Impossible conditions and those contrary to law or good customs shall be


considered as not imposed and shall in no manner prejudice the heir, even if the testator
should otherwise provide.1186

An absolute condition not to contract a first or subsequent marriage shall be


considered as not written unless such condition has been imposed on the widow or widower
by the deceased spouse, or by the latter's ascendants or descendants.

1. A fiduciary or first heir instituted entrusted with the obligation to preserve and to transmit to a
fideicommissary substitute or second heir the whole or part of the inheritance
2. Such substitution must not go beyond one degree from the heir originally instituted
3. The fiduciary or first heir and the second heir are living at the time of the death of the testator
4. The fideicommissary substitution must be expressly made
5. The fideicommissary substitution is imposed on the free portion of the estate and never on the
legitime
1179
Art. 864
1180
Art. 865
1181
Art. 866
1182
supra
1183
Art. 869
1184
Art. 871
1185
Art. 872
1186
Art. 873

271
Nevertheless, the right of usufruct, or an allowance or some personal prestation may
be devised or bequeathed to any person for the time during which he or she should remain
unmarried or in widowhood.1187

Any disposition made upon the condition that the heir shall make some provision in
his will in favor of the testator or of any other person shall be void.1188

Any purely potestative condition imposed upon an heir must be fulfilled by him as
soon as he learns of the testator's death.

This rule shall not apply when the condition, already complied with, cannot be
fulfilled again.1189

If the condition is casual or mixed, it shall be sufficient if it happen or be fulfilled at


any time before or after the death of the testator, unless he has provided otherwise.

Should it have existed or should it have been fulfilled at the time the will was
executed and the testator was unaware thereof, it shall be deemed as complied with.

If he had knowledge thereof, the condition shall be considered fulfilled only when it
is of such a nature that it can no longer exist or be complied with again.1190
A disposition with a suspensive term does not prevent the instituted heir from
acquiring his rights and transmitting them to his heirs even before the arrival of the term.1191

If the potestative condition imposed upon the heir is negative, or consists in not
doing or not giving something, he shall comply by giving a security that he will not do or
give that which has been prohibited by the testator, and that in case of contravention he will
return whatever he may have received, together with its fruits and interests.1192

If the heir be instituted under a suspensive condition or term, the estate shall be
placed under administration until the condition is fulfilled, or until it becomes certain that it
cannot be fulfilled, or until the arrival of the term.

The same shall be done if the heir does not give the security required in the
preceding article.1193

The appointment of the administrator of the estate mentioned in the preceding


article, as well as the manner of the administration and the rights and obligations of the
administrator shall be governed by the Rules of Court.1194

1187
Art. 874
1188
Art. 875
1189
Art. 876
1190
Art. 877
1191
Art. 878
1192
Art. 879
1193
Art. 880
1194
Art. 881

272
The statement of the object of the institution, or the application of the property left
by the testator, or the charge imposed by him, shall not be considered as a condition unless
it appears that such was his intention.

That which has been left in this manner may be claimed at once provided that the
instituted heir or his heirs give security for compliance with the wishes of the testator and
for the return of anything he or they may receive, together with its fruits and interests, if he
or they should disregard this obligation.1195

When without the fault of the heir, an institution referred to in the preceding article
cannot take effect in the exact manner stated by the testator, it shall be complied with in a
manner most analogous to and in conformity with his wishes.

If the person interested in the condition should prevent its fulfillment, without the
fault of the heir, the condition shall be deemed to have been complied with.1196

Conditions imposed by the testator upon the heirs shall be governed by the rules
established for conditional obligations in all matters not provided for by this Section.1197

The designation of the day or time when the effects of the institution of an heir shall
commence or cease shall be valid.

In both cases, the legal heir shall be considered as called to the succession until the
arrival of the period or its expiration. But in the first case he shall not enter into possession
of the property until after having given sufficient security, with the intervention of the
instituted heir.1198

1195
Art. 882
1196
Art. 883
1197
Art. 884
1198
Art. 885

273
E. Legitime

1. Definition

That part of the testator's property which he cannot dispose of because the law has
reserved it for certain heirs who are, therefore, called compulsory heirs.1199

2. Compulsory Heirs1200 and Various Combinations

(1) Legitimate children and descendants, with respect to their legitimate parents and
ascendants;

(2) In default of the foregoing, legitimate parents and ascendants, with respect to
their legitimate children and descendants;

(3) The widow or widower;

[(4) Acknowledged natural children, and natural children by legal fiction;]

(5) Other illegitimate children referred to in Article 287.

Compulsory heirs mentioned in Nos. 3, 4, and 5 are not excluded by those in Nos. 1
and 2; neither do they exclude one another.

In all cases of illegitimate children, their filiation must be duly proved.

The father or mother of illegitimate children of the three classes mentioned, shall
inherit from them in the manner and to the extent established by this Code.1201

The legitime of legitimate children and descendants consists of one-half of the


hereditary estate of the father and of the mother.

The latter may freely dispose of the remaining half, subject to the rights of
illegitimate children and of the surviving spouse as hereinafter provided.1202

1199
Art. 886
1200
Classes:
1.Primary those who have precedence over and exclude other compulsory heirs
a. Legitimate children and descendants (legitimate), with respect to their legitimate parents and
ascendants
2.Secondary those who succeed only in the absence of the primary heirs
a. Legitimate parents and ascendants (legitimate), with respect to their legitimate children and
descendants
3.Concurring those who succeed together with the primary or the secondary compulsory heirs
a. Widow or widower (legitimate)
b. Illegitimate children and descendants (legitimate or illegitimate)
1201
Art. 887
1202
Art. 888

274
The legitime of legitimate parents or ascendants consists of one-half of the
hereditary estates of their children and descendants.

The children or descendants may freely dispose of the other half, subject to the
rights of illegitimate children and of the surviving spouse as hereinafter provided.1203

The legitime reserved for the legitimate parents shall be divided between them
equally; if one of the parents should have died, the whole shall pass to the survivor.

If the testator leaves neither father nor mother, but is survived by ascendants of
equal degree of the paternal and maternal lines, the legitime shall be divided equally between
both lines. If the ascendants should be of different degrees, it shall pertain entirely to the
ones nearest in degree of either line.1204

If only one legitimate child or descendant of the deceased survives, the widow or
widower shall be entitled to one-fourth of the hereditary estate. In case of a legal separation,
the surviving spouse may inherit if it was the deceased who had given cause for the same.

If there are two or more legitimate children or descendants, the surviving spouse
shall be entitled to a portion equal to the legitime of each of the legitimate children or
descendants.

In both cases, the legitime of the surviving spouse shall be taken from the portion
that can be freely disposed of by the testator.1205

If the testator leaves no legitimate descendants, but leaves legitimate ascendants, the
surviving spouse shall have a right to one-fourth of the hereditary estate.

This fourth shall be taken from the free portion of the estate.1206

If the testator leaves illegitimate children, the surviving spouse shall be entitled to
one-third of the hereditary estate of the deceased and the illegitimate children to another
third. The remaining third shall be at the free disposal of the testator.1207

The legitime of each of the acknowledged natural children and each of the natural
children by legal fiction shall consist of one-half of the legitime of each of the legitimate
children or descendants.

The legitime of an illegitimate child who is neither an acknowledged natural, nor a


natural child by legal fiction, shall be equal in every case to four-fifths of the legitime of an
acknowledged natural child.

1203
Art. 889
1204
Art. 890
1205
Art. 892
1206
Art. 893
1207
Art. 894

275
The legitime of the illegitimate children shall be taken from the portion of the estate
at the free disposal of the testator, provided that in no case shall the total legitime of such
illegitimate children exceed that free portion, and that the legitime of the surviving spouse
must first be fully satisfied.1208

Illegitimate children who may survive with legitimate parents or ascendants of the
deceased shall be entitled to one-fourth of the hereditary estate to be taken from the portion
at the free disposal of the testator.1209

When the widow or widower survives with legitimate children or descendants, and
acknowledged natural children, or natural children by legal fiction, such surviving spouse
shall be entitled to a portion equal to the legitime of each of the legitimate children which
must be taken from that part of the estate which the testator can freely dispose of.1210

If the widow or widower survives with legitimate children or descendants, and with
illegitimate children other than acknowledged natural, or natural children by legal fiction, the
share of the surviving spouse shall be the same as that provided in the preceding article.1211

When the widow or widower survives with legitimate parents or ascendants and with
illegitimate children, such surviving spouse shall be entitled to one-eighth of the hereditary
estate of the deceased which must be taken from the free portion, and the illegitimate
children shall be entitled to one-fourth of the estate which shall be taken also from the
disposable portion. The testator may freely dispose of the remaining one-eighth of the
estate.1212

If the only survivor is the widow or widower, she or he shall be entitled to one-half
of the hereditary estate of the deceased spouse, and the testator may freely dispose of the
other half.

If the marriage between the surviving spouse and the testator was solemnized in
articulo mortis, and the testator died within three months from the time of the marriage, the
legitime of the surviving spouse as the sole heir shall be one-third of the hereditary estate,
except when they have been living as husband and wife for more than five years. In the latter
case, the legitime of the surviving spouse shall be that specified in the preceding
paragraph.1213

When the testator dies leaving illegitimate children and no other compulsory heirs,
such illegitimate children shall have a right to one-half of the hereditary estate of the
deceased.

1208
Art. 895
1209
Art. 896
1210
Art. 897
1211
Art. 898
1212
Art. 899
1213
Art. 900

276
The other half shall be at the free disposal of the testator.1214

The rights of illegitimate children set forth in the preceding articles are transmitted
upon their death to their descendants, whether legitimate or illegitimate.1215

The legitime of the parents who have an illegitimate child, when such child leaves
neither legitimate descendants, nor a surviving spouse, nor illegitimate children, is one-half
of the hereditary estate of such illegitimate child. If only legitimate or illegitimate children are
left, the parents are not entitled to any legitime whatsoever. If only the widow or widower
survives with parents of the illegitimate child, the legitime of the parents is one-fourth of the
hereditary estate of the child, and that of the surviving spouse also one-fourth of the
estate.1216

Summary of Legitimes of Compulsory Heirs:

Surviving Legitimate Surviving Illegitimate Legitimate Illegitimate


relatives children & spouse children parents & parents
descendants ascendants
Legitimate (divided
children alone by the # of
children)
1 legitimate child
surviving spouse

Legitimate (divided Same as the


children by no. of share @ legit
Surviving spouse children) child

Legitimate of the
children share of @
Illegitimate legit child
children

1 legitimate child of the


surviving spouse (preferred) share of @
illegitimate legit child
children

2 or more (divided Same as the of the


legitimate by no. of share of @ share of @
children surviving children) legit child legit child
spouse
Illegitimate

1214
Art. 901
1215
Art. 902
1216
Art. 903

277
children

Legitimate
parents alone
Legitimate
parents
Illegitimate
children
Legitimate
parents and
Surviving spouse

Legitimate 1/8
parents
Surviving spouse
Illegitimate
children
Illegitimate (divided
children alone by no. of
children)
Illegitimate 1/3 1/3 (divided
children by no. of
Surviving spouse children)
Surviving spouse or 1/3 if
alone marriage in
articulo mortis
Illegitimate
parents alone
Illegitimate
parents
Surviving spouse

The testator cannot deprive his compulsory heirs of their legitime, except in cases
expressly specified by law.

Neither can he impose upon the same any burden, encumbrance, condition, or
substitution of any kind whatsoever.1217

Every renunciation or compromise as regards a future legitime between the person


owing it and his compulsory heirs is void, and the latter may claim the same upon the death
of the former; but they must bring to collation whatever they may have received by virtue of
the renunciation or compromise.1218

1217
Art. 904
1218
Art. 905

278
Any compulsory heir to whom the testator has left by any title less than the legitime
belonging to him may demand that the same be fully satisfied.1219

Testamentary dispositions that impair or diminish the legitime of the compulsory


heirs shall be reduced on petition of the same, insofar as they may be inofficious or
excessive.1220

To determine the legitime, the value of the property left at the death of the testator
shall be considered, deducting all debts and charges, which shall not include those imposed
in the will.

To the net value of the hereditary estate, shall be added the value of all donations by
the testator that are subject to collation, at the time he made them.1221

Donations given to children shall be charged to their legitime.

Donations made to strangers shall be charged to that part of the estate of which the
testator could have disposed by his last will.

Insofar as they may be inofficious or may exceed the disposable portion, they shall
be reduced according to the rules.1222

Donations which an illegitimate child may have received during the lifetime of his
father or mother, shall be charged to his legitime.

Should they exceed the portion that can be freely disposed of, they shall be reduced
in the manner prescribed.1223

After the legitime has been determined in accordance with the three preceding
articles, the reduction shall be made as follows:

(1) Donations shall be respected as long as the legitime can be covered, reducing or
annulling, if necessary, the devises or legacies made in the will;

(2) The reduction of the devises or legacies shall be pro rata, without any distinction
whatever.

If the testator has directed that a certain devise or legacy be paid in preference to
others, it shall not suffer any reduction until the latter have been applied in full to the
payment of the legitime.

1219
Art. 906
1220
Art. 907
1221
Art. 908
1222
Art. 909
1223
Art. 910

279
(3) If the devise or legacy consists of a usufruct or life annuity, whose value may be
considered greater than that of the disposable portion, the compulsory heirs may choose
between complying with the testamentary provision and delivering to the devisee or legatee
the part of the inheritance of which the testator could freely dispose.1224

If the devise subject to reduction should consist of real property, which cannot be
conveniently divided, it shall go to the devisee if the reduction does not absorb one-half of
its value; and in a contrary case, to the compulsory heirs; but the former and the latter shall
reimburse each other in cash for what respectively belongs to them.

The devisee who is entitled to a legitime may retain the entire property, provided its
value does not exceed that of the disposable portion and of the share pertaining to him as
legitime.1225

If the heirs or devisees do not choose to avail themselves of the right granted by the
preceding article, any heir or devisee who did not have such right may exercise it; should the
latter not make use of it, the property shall be sold at public auction at the instance of any
one of the interested parties.1226

The testator may devise and bequeath the free portion as he may deem fit.1227

3. Reserva Troncal1228

The reservation by virtue of which an ascendant who inherits from his descendant
any property which the latter may have acquired by gratuitous title from another ascendant,
or a brother or sister, is obliged to reserve such property as he may have acquired by
operation of law for the benefit of relatives who are within the third degree and who belong
to the line from which said property came.1229

1224
Art. 911
1225
Art. 912
1226
Art. 913
1227
Art. 914
1228
Requisites
1) that the property was acquired by a descendant from an ascendant or from a brother or sister by
gratuitous title
2) that said descendant died without an issue
3) that the property is inherited by another ascendant by operation of law
4) that there are relatives within the 3rd degree belonging to the line from which said property came
1229
Art. 891
It constitutes as an exception to both the system of legitime and the order of intestate succession.

280
4. Disinheritance1230

It is the act by which the testator, for just cause, deprives a compulsory heir of his
right to the legitime.

a. Disinheritance for cause

Sufficient causes for the disinheritance of children and descendants, legitimate as


well as illegitimate:

(1) A child or descendant has been found guilty of an attempt against the life of the
testator, his or her spouse, descendants, or ascendants;

(2) A child or descendant has accused the testator of a crime for which the law
prescribes imprisonment for six years or more, if the accusation has been found groundless;

(3) A child or descendant has been convicted of adultery or concubinage with the
spouse of the testator;

(4) A child or descendant by fraud, violence, intimidation, or undue influence causes


the testator to make a will or to change one already made;

(5) Refusal without justifiable cause to support the parent or ascendant who
disinherits such child or descendant;

(6) Maltreatment of the testator by word or deed, by the child or descendant;

(7) When a child or descendant leads a dishonorable or disgraceful life;

(8) Conviction of a crime which carries with it the penalty of civil interdiction.1231

1230
Requisites for a valid disinheritance:
1) Heir disinherited must be designated by name or in such a manner as to leave no room for doubt as
to who is intended
2) It must be for a cause designated by law
3) It must be made in valid will
4) It must be made expressly, stating the cause in the will itself
5) The cause must be certain and true, and must be proved by the interested heir if the person
disinherited should deny it
6) It must unconditional
7) It must be total
1231
Art. 919

281
Summary of causes of disinheritance:

GROUNDS FOR CHILDREN/ PARENTS/ SPOUSE UNWORTHINESS


DISINHERITANCE DESCENDANTS ASCENDANTS

1 Guilty/convicted of * * * *
attempt against life
of testator/spouse/
ascendant/descenda
nt

2 Accused * * * *
testator/decedent of
crime punishable by
imprisonment of
more than 6 years,
found groundless,
false

3 Causes * * * *
testator/decedent to
make will or change
one by fraud,
violence,
intimidation, or
undue influence

4 Unjustified refusal * * *
to support testator

5 Convicted of * * *
adultery or
concubinage with
spouse of
testator/decedent

6 Maltreatment of *

282
testator by word and
deed

7 Leading a *
dishonorable or
disgraceful life

8 Conviction of crime *
which carries
penalty of civil
interdiction

9 Abandonment of * *
children or inducing
children to live
corrupt and immoral
life or attempted
against virtue

10 Loss of parental * *
authority

11 Attempt by one *
parent against life of
the other unless
there is
reconciliation
between parents

12 Spouses given cause *


for legal separation

13 Failure to report *
violent death of
decedent within one
month, unless
authorities have
already taken action

283
14 Force, violence, *
intimidation or
undue influence to
prevent another
from making a will
or revoking one
already made or who
supplants or alters
the latters will

15 Falsifies or forges a *
supposed will of the
decedent

(i) Reconciliation

A subsequent reconciliation between the offender and the offended person deprives
the latter of the right to disinherit, and renders ineffectual any disinheritance that may have
been made.1232

(ii) Rights of descendants of person disinherited

The children and descendants of the person disinherited shall take his or her place
and shall preserve the rights of compulsory heirs with respect to the legitime; but the
disinherited parent shall not have the usufruct or administration of the property which
constitutes the legitime.1233

b. Disinheritance without cause

Shall annul the institution of heirs insofar as it may prejudice the person disinherited;
but the devises and legacies and other testamentary dispositions shall be valid to such extent
as will not impair the legitime.1234

5. Legacies and Devisees

All things and rights which are within the commerce of man maybe bequeathed or
devised.1235

A testator may charge with legacies and devises not only his compulsory heirs but
also the legatees and devisees.

1232
Art. 922
1233
Art. 923
1234
Art. 918
1235
Art. 924

284
The latter shall be liable for the charge only to the extent of the value of the legacy or
the devise received by them. The compulsory heirs shall not be liable for the charge beyond
the amount of the free portion given them.1236

When the testator charges one of the heirs with a legacy or devise, he alone shall be
bound.

Should he not charge anyone in particular, all shall be liable in the same proportion
in which they may inherit.1237

If two or more heirs take possession of the estate, they shall be solidarily liable for
the loss or destruction of a thing devised or bequeathed, even though only one of them
should have been negligent.1238

The heir who is bound to deliver the legacy or devise shall be liable in case of
eviction, if the thing is indeterminate and is indicated only by its kind.1239

If the testator, heir, or legatee owns only a part of, or an interest in the thing
bequeathed, the legacy or devise shall be understood limited to such part or interest, unless
the testator expressly declares that he gives the thing in its entirety.1240

The legacy or devise of a thing belonging to another person is void, if the testator
erroneously believed that the thing pertained to him. But if the thing bequeathed, though not
belonging to the testator when he made the will, afterwards becomes his, by whatever title,
the disposition shall take effect.1241

If the testator orders that a thing belonging to another be acquired in order that it be
given to a legatee or devisee, the heir upon whom the obligation is imposed or the estate
must acquire it and give the same to the legatee or devisee; but if the owner of the thing
refuses to alienate the same, or demands an excessive price therefor, the heir or the estate
shall only be obliged to give the just value of the thing.1242

The legacy or devise of a thing which at the time of the execution of the will already
belonged to the legatee or devisee shall be ineffective, even though another person may have
some interest therein.

If the testator expressly orders that the thing be freed from such interest or
encumbrance, the legacy or devise shall be valid to that extent.1243

1236
Art. 925
1237
Art. 926
1238
Art. 927
1239
Art. 928
1240
Art. 929
1241
Art. 930
1242
Art. 931
1243
Art. 932

285
If the thing bequeathed belonged to the legatee or devisee at the time of the
execution of the will, the legacy or devise shall be without effect, even though it may have
subsequently alienated by him.

If the legatee or devisee acquires it gratuitously after such time, he can claim nothing
by virtue of the legacy or devise; but if it has been acquired by onerous title he can demand
reimbursement from the heir or the estate.1244

If the testator should bequeath or devise something pledged or mortgaged to secure


a recoverable debt before the execution of the will, the estate is obliged to pay the debt,
unless the contrary intention appears.

The same rule applies when the thing is pledged or mortgaged after the execution of
the will.

Any other charge, perpetual or temporary, with which the thing bequeathed is
burdened, passes with it to the legatee or devisee.1245

The legacy of a credit against a third person or of the remission or release of a debt
of the legatee shall be effective only as regards that part of the credit or debt existing at the
time of the death of the testator.

In the first case, the estate shall comply with the legacy by assigning to the legatee all
rights of action it may have against the debtor. In the second case, by giving the legatee an
acquittance, should he request one.

In both cases, the legacy shall comprise all interests on the credit or debt which may
be due the testator at the time of his death.1246

The legacy referred to shall lapse if the testator, after having made it, should bring an
action against the debtor for the payment of his debt, even if such payment should not have
been effected at the time of his death.

The legacy to the debtor of the thing pledged by him is understood to discharge only
the right of pledge.1247

A generic legacy of release or remission of debts comprises those existing at the time
of the execution of the will, but not subsequent ones.1248

A legacy or devise made to a creditor shall not be applied to his credit, unless the
testator so expressly declares.

1244
Art. 933
1245
Art. 934
1246
Art. 935
1247
Art. 936
1248
Art. 937

286
In the latter case, the creditor shall have the right to collect the excess, if any, of the
credit or of the legacy or devise.1249

If the testator orders the payment of what he believes he owes but does not in fact
owe, the disposition shall be considered as not written. If as regards a specified debt more
than the amount thereof is ordered paid, the excess is not due, unless a contrary intention
appears.

The foregoing provisions are without prejudice to the fulfillment of natural


obligations.1250
In alternative legacies or devises, the choice is presumed to be left to the heir upon
whom the obligation to give the legacy or devise may be imposed, or the executor or
administrator of the estate if no particular heir is so obliged.

If the heir, legatee or devisee, who may have been given the choice, dies before
making it, this right shall pass to the respective heirs.

Once made, the choice is irrevocable.

In the alternative legacies or devises, except as herein provided, the provisions of this
Code regulating obligations of the same kind shall be observed, save such modifications as
may appear from the intention expressed by the testator.1251

A legacy of generic personal property shall be valid even if there be no things of the
same kind in the estate.

A devise of indeterminate real property shall be valid only if there be immovable


property of its kind in the estate.

The right of choice shall belong to the executor or administrator who shall comply
with the legacy by the delivery of a thing which is neither of inferior nor of superior
quality.1252

Whenever the testator expressly leaves the right of choice to the heir, or to the
legatee or devisee, the former may give or the latter may choose whichever he may prefer.1253

If the heir, legatee or devisee cannot make the choice, in case it has been granted
him, his right shall pass to his heirs; but a choice once made shall be irrevocable. 1254

1249
Art. 938
1250
Art. 939
1251
Art. 940
1252
Art. 941
1253
Art. 942
1254
Art. 943

287
A legacy for education lasts until the legatee is of age, or beyond the age of majority
in order that the legatee may finish some professional, vocational or general course, provided
he pursues his course diligently.

A legacy for support lasts during the lifetime of the legatee, if the testator has not
otherwise provided.

If the testator has not fixed the amount of such legacies, it shall be fixed in
accordance with the social standing and the circumstances of the legatee and the value of the
estate.

If the testator or during his lifetime used to give the legatee a certain sum of money
or other things by way of support, the same amount shall be deemed bequeathed, unless it
be markedly disproportionate to the value of the estate.1255

If a periodical pension, or a certain annual, monthly, or weekly amount is


bequeathed, the legatee may petition the court for the first installment upon the death of the
testator, and for the following ones which shall be due at the beginning of each period; such
payment shall not be returned, even though the legatee should die before the expiration of
the period which has commenced.1256

If the thing bequeathed should be subject to a usufruct, the legatee or devisee shall
respect such right until it is legally extinguished.1257

The legatee or devisee acquires a right to the pure and simple legacies or devises
from the death of the testator, and transmits it to his heirs.1258

If the legacy or devise is of a specific and determinate thing pertaining to the testator,
the legatee or devisee acquires the ownership thereof upon the death of the testator, as well
as any growing fruits, or unborn offspring of animals, or uncollected income; but not the
income which was due and unpaid before the latter's death.

From the moment of the testator's death, the thing bequeathed shall be at the risk of
the legatee or devisee, who shall, therefore, bear its loss or deterioration, and shall be
benefited by its increase or improvement, without prejudice to the responsibility of the
executor or administrator.1259

If the bequest should not be of a specific and determinate thing, but is generic or of
quantity, its fruits and interests from the time of the death of the testator shall pertain to the
legatee or devisee if the testator has expressly so ordered.1260

1255
Art. 944
1256
Art. 945
1257
Art. 946
1258
Art. 947
1259
Art. 948
1260
Art. 949

288
If the estate should not be sufficient to cover all the legacies or devises, their
payment shall be made in the following order:

(1) Remuneratory legacies or devises;


(2) Legacies or devises declared by the testator to be preferential;
(3) Legacies for support;
(4) Legacies for education;
(5) Legacies or devises of a specific, determinate thing which forms a part of the
estate;
(6) All others pro rata.1261

The thing bequeathed shall be delivered with all its accessories and accessories and in
the condition in which it may be upon the death of the testator.1262

The heir, charged with a legacy or devise, or the executor or administrator of the
estate, must deliver the very thing bequeathed if he is able to do so and cannot discharge this
obligation by paying its value.

Legacies of money must be paid in cash, even though the heir or the estate may not
have any.

The expenses necessary for the delivery of the thing bequeathed shall be for the
account of the heir or the estate, but without prejudice to the legitime.1263

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.1264

The legatee or devisee cannot accept a part of the legacy or devise and repudiate the
other, if the latter be onerous.

Should he die before having accepted the legacy or devise, leaving several heirs, some
of the latter may accept and the others may repudiate the share respectively belonging to
them in the legacy or devise.1265

The legatee or devisee of two legacies or devises, one of which is onerous, cannot
renounce the onerous one and accept the other. If both are onerous or gratuitous, he shall

1261
Art. 950
1262
Art. 951
1263
Art. 952
1264
Art. 953
1265
Art. 954

289
be free to accept or renounce both, or to renounce either. But if the testator intended that
the two legacies or devises should be inseparable from each other, the legatee or devisee
must either accept or renounce both.

Any compulsory heir who is at the same time a legatee or devisee may waive the
inheritance and accept the legacy or devise, or renounce the latter and accept the former, or
waive or accept both.1266

If the legatee or devisee cannot or is unwilling to accept the legacy or devise, or if the
legacy or devise for any reason should become ineffective, it shall be merged into the mass
of the estate, except in cases of substitution and of the right of accretion.1267

The legacy or devise shall be without effect:

(1) If the testator transforms the thing bequeathed in such a manner that it does not
retain either the form or the denomination it had;

(2) If the testator by any title or for any cause alienates the thing bequeathed or any
part thereof, it being understood that in the latter case the legacy or devise shall be without
effect only with respect to the part thus alienated. If after the alienation the thing should
again belong to the testator, even if it be by reason of nullity of the contract, the legacy or
devise shall not thereafter be valid, unless the reacquisition shall have been effected by virtue
of the exercise of the right of repurchase;

(3) If the thing bequeathed is totally lost during the lifetime of the testator, or after
his death without the heir's fault. Nevertheless, the person obliged to pay the legacy or
devise shall be liable for eviction if the thing bequeathed should not have been determinate
as to its kind, in accordance with the provisions of Article 928.1268

A mistake as to the name of the thing bequeathed or devised, is of no consequence,


if it is possible to identify the thing which the testator intended to bequeath or devise.1269

A disposition made in general terms in favor of the testator's relatives shall be


understood to be in favor of those nearest in degree.1270

1266
Art. 955
1267
Art. 956
1268
Art. 957
1269
Art. 958
1270
Art. 959

290
III. Legal or Intestate Succession

A. General Provisions

Legal or intestate succession1271 takes place:

1. If a person dies without a will

2. If a person dies with a void will

3. If a person dies with a will which has subsequently lost its validity

4. When the will does not institute an heir to, or dispose of all the property
belonging to the testator;1272

5. If the suspensive condition attached to the institution of the heir does not happen
or is not fulfilled

6. If the heir dies before the testator,

7. If the heir repudiates the inheritance, there being no substitution, and no right of
accretion takes place

8. When the heir instituted is incapable of succeeding, except in cases provided in the
Code.1273

In default of testamentary heirs, the law vests the inheritance in the legitimate and
illegitimate relatives of the deceased, in the surviving spouse, and in the State.1274

In every inheritance, the relative nearest in degree excludes the more distant ones,
saving the right of representation when it properly takes place.

Relatives in the same degree shall inherit in equal shares, subject to the provisions of
Article 10061275 with respect to relatives of the full and half blood, and of Article 987, par.
2,1276 concerning division between the paternal and maternal lines.1277

1271
Fundamental underlying principles in legal or intestate succession:
1. Rule of Proximity the relative nearest in degree excludes the farther one
2. Rule of Equal Division the relatives who are in the same degree shall inherit in equal shares
1272
Legal succession shall take place only with respect to the property of which the testator has not
disposed
1273
Art. 960
1274
Art. 961
1275
Should brother and sisters of the full blood survive together with brothers and sisters of the half
blood, the former shall be entitled to a share double that of the latter.
1276
Should there be more than one of equal degree belonging to the same line they shall divide the
inheritance per capita; should they be of different lines but of equal degree, one-half shall go to the
paternal and the other half to the maternal ascendants. In each line the division shall be made per capita.
1277
Art. 962

291
1. Relationship

Proximity of relationship is determined by the number of generations. Each


generation forms a degree.1278

A series of degrees forms a line, which may be either direct or collateral.

A direct line is that constituted by the series of degrees among ascendants and
descendants.

A collateral line is that constituted by the series of degrees among persons who are
not ascendants and descendants, but who come from a common ancestor.1279

The direct line is either descending or ascending.

The former unites the head of the family with those who descend from him.

The latter binds a person with those from whom he descends.1280

In the line, as many degrees are counted as there are generations or persons,
excluding the progenitor.

In the direct line, ascent is made to the common ancestor. Thus, the child is one
degree removed from the parent, two from the grandfather, and three from the great-
grandparent.

In the collateral line, ascent is made to the common ancestor and then descent is
made to the person with whom the computation is to be made. Thus, a person is two
degrees removed from his brother, three from his uncle, who is the brother of his father,
four from his first cousin, and so forth.1281

Full blood relationship is that existing between persons who have the same father
and the same mother.

Half-blood relationship is that existing between persons who have the same father,
but not the same mother, or the same mother, but not the same father.1282

If there are several relatives of the same degree, and one or some of them are
unwilling or incapacitated to succeed, his portion shall accrue to the others of the same
degree, save the right of representation when it should take place.1283

1278
Art. 963
1279
Art. 964
1280
Art. 965
1281
Art. 966
1282
Art. 967
1283
Art. 968

292
If the inheritance should be repudiated by the nearest relative, should there be one
only, or by all the nearest relatives called by law to succeed, should there be several, those of
the following degree shall inherit in their own right and cannot represent the person or
persons repudiating the inheritance.1284

2. Right of Representation

Representation is a right created by fiction of law, by virtue of which the


representative is raised to the place and the degree of the person represented, and acquires
the rights which the latter would have if he were living or if he could have inherited.1285

The representative is called to the succession by the law and not by the person
represented. The representative does not succeed the person represented but the one whom
the person represented would have succeeded.1286

The right of representation takes place in the direct descending line, but never in the
ascending.

In the collateral line, it takes place only in favor of the children of brothers or sisters,
whether they be of the full or half blood.1287

In order that representation may take place, it is necessary that the representative
himself be capable of succeeding the decedent.1288

Whenever there is succession by representation, the division of the estate shall be


made per stirpes, in such manner that the representative or representatives shall not inherit
more than what the person they represent would inherit, if he were living or could inherit.1289

When children of one or more brothers or sisters of the deceased survive, they shall
inherit from the latter by representation, if they survive with their uncles or aunts. But if they
alone survive, they shall inherit in equal portions.1290

A person may represent him whose inheritance he has renounced.1291

Heirs who repudiate their share may not be represented.1292

1284
Art. 969
1285
Art. 970
1286
Art. 971
1287
Art. 972
1288
Art. 973
1289
Art. 974
1290
Art. 975
1291
Art. 976
1292
Art. 977

293
B. Order of Intestate Succession

Succession pertains, in the first place, to the descending direct line.1293

Legitimate children and their descendants succeed the parents and other ascendants,
without distinction as to sex or age, and even if they should come from different marriages.

An adopted child succeeds to the property of the adopting parents in the same
manner as a legitimate child.1294

The children of the deceased shall always inherit from him in their own right,
dividing the inheritance in equal shares.1295

Should children of the deceased and descendants of other children who are dead,
survive, the former shall inherit in their own right, and the latter by right of
representation.1296

The grandchildren and other descendants shall inherit by right of representation, and
if any one of them should have died, leaving several heirs, the portion pertaining to him shall
be divided among the latter in equal portions.1297

If illegitimate children survive with legitimate children, the shares of the former shall
be in the proportions prescribed by article 895.1298

In case of the death of an adopted child, leaving no children or descendants, his


parents and relatives by consanguinity and not by adoption, shall be his legal heirs.1299

In default of legitimate children and descendants of the deceased, his parents and
ascendants shall inherit from him, to the exclusion of collateral relatives.1300

The father and mother, if living, shall inherit in equal shares.

Should one only of them survive, he or she shall succeed to the entire estate of the
1301
child.

In default of the father and mother, the ascendants nearest in degree shall inherit.

1293
Art. 978
1294
Art. 979
1295
Art. 980
1296
Art. 981
1297
Art. 982
1298
Art. 983
1299
Art. 984
1300
Art. 985
1301
Art. 986

294
Should there be more than one of equal degree belonging to the same line they shall
divide the inheritance per capita; should they be of different lines but of equal degree, one-
half shall go to the paternal and the other half to the maternal ascendants. In each line the
division shall be made per capita.1302

In the absence of legitimate descendants or ascendants, the illegitimate children shall


succeed to the entire estate of the deceased.1303

If, together with illegitimate children, there should survive descendants of another
illegitimate child who is dead, the former shall succeed in their own right and the latter by
right of representation.1304

The hereditary rights granted by the two preceding articles to illegitimate children
shall be transmitted upon their death to their descendants, who shall inherit by right of
representation from their deceased grandparent.1305

If legitimate ascendants are left, the illegitimate children shall divide the inheritance
with them, taking one-half of the estate, whatever be the number of the ascendants or of the
illegitimate children.1306

An illegitimate child has no right to inherit ab intestato from the legitimate children
and relatives of his father or mother; nor shall such children or relatives inherit in the same
manner from the illegitimate child.1307

If an illegitimate child should die without issue, either legitimate or illegitimate, his
father or mother shall succeed to his entire estate; and if the child's filiation is duly proved as
to both parents, who are both living, they shall inherit from him share and share alike.1308

In default of the father or mother, an illegitimate child shall be succeeded by his or


her surviving spouse who shall be entitled to the entire estate.

If the widow or widower should survive with brothers and sisters, nephews and
nieces, she or he shall inherit one-half of the estate, and the latter the other half.1309

In the absence of legitimate descendants and ascendants, and illegitimate children


and their descendants, whether legitimate or illegitimate, the surviving spouse shall inherit
the entire estate, without prejudice to the rights of brothers and sisters, nephews and nieces,
should there be any, under Article 1001.1310

1302
Art. 987
1303
Art. 988
1304
Art. 989
1305
Art. 990
1306
Art. 991
1307
Art. 992
1308
Art. 993
1309
Art. 994
1310
Art. 995

295
If a widow or widower and legitimate children or descendants are left, the surviving
spouse has in the succession the same share as that of each of the children.1311

When the widow or widower survives with legitimate parents or ascendants, the
surviving spouse shall be entitled to one-half of the estate, and the legitimate parents or
ascendants to the other half.1312

If a widow or widower survives with illegitimate children, such widow or widower


shall be entitled to one-half of the inheritance, and the illegitimate children or their
descendants, whether legitimate or illegitimate, to the other half.1313

When the widow or widower survives with legitimate children or their descendants
and illegitimate children or their descendants, whether legitimate or illegitimate, such widow
or widower shall be entitled to the same share as that of a legitimate child.1314
If legitimate ascendants, the surviving spouse, and illegitimate children are left, the
ascendants shall be entitled to one-half of the inheritance, and the other half shall be divided
between the surviving spouse and the illegitimate children so that such widow or widower
shall have one-fourth of the estate, and the illegitimate children the other fourth.1315

Should brothers and sisters or their children survive with the widow or widower, the
latter shall be entitled to one-half of the inheritance and the brothers and sisters or their
children to the other half.1316

In case of a legal separation, if the surviving spouse gave cause for the separation, he
or she shall not have any of the rights granted in the preceding articles.1317

If there are no descendants, ascendants, illegitimate children, or a surviving spouse,


the collateral relatives shall succeed to the entire estate of the deceased in accordance with
the following articles.1318

Should the only survivors be brothers and sisters of the full blood, they shall inherit
in equal shares.1319

Should brothers and sisters survive together with nephews and nieces, who are the
children of the descendant's brothers and sisters of the full blood, the former shall inherit
per capita, and the latter per stirpes.1320

1311
Art. 996
1312
Art. 997
1313
Art. 998
1314
Art. 999
1315
Art. 1000
1316
Art. 1001
1317
Art. 1002
1318
Art. 1003
1319
Art. 1004
1320
Art. 1005

296
Should brother and sisters of the full blood survive together with brothers and sisters
of the half blood, the former shall be entitled to a share double that of the latter.1321

In case brothers and sisters of the half blood, some on the father's andsome on the
mother's side, are the only survivors, all shall inherit in equal shares without distinction as to
the origin of the property.1322

Children of brothers and sisters of the half-blood shall succeed per capita or per
stirpes, in accordance with the rules laid down for brothers and sisters of the full blood.1323

Should there be neither brothers nor sisters nor children of brothers or sisters, the
other collateral relatives shall succeed to the estate.

The latter shall succeed without distinction of lines or preference among them by
reason of relationship by the whole blood.1324

The right to inherit ab intestato shall not extend beyond the fifth degree of
relationship in the collateral line.1325

In default of persons entitled to succeed, the State shall inherit the whole estate.1326

In order that the State may take possession of the property mentioned in the
preceding article, the pertinent provisions of the Rules of Court must be observed.1327

After the payment of debts and charges, the personal property shall be assigned to
the municipality or city where the deceased last resided in the Philippines, and the real estate
to the municipalities or cities, respectively, in which the same is situated.

If the deceased never resided in the Philippines, the whole estate shall be assigned to
the respective municipalities or cities where the same is located.

Such estate shall be for the benefit of public schools, and public charitable
institutions and centers, in such municipalities or cities. The court shall distribute the estate
as the respective needs of each beneficiary may warrant.

The court, at the instance of an interested party, or on its own motion, may order the
establishment of a permanent trust, so that only the income from the property shall be
used.1328

1321
Art. 1006
1322
Art. 1007
1323
Art. 1008
1324
Art. 1009
1325
Art. 1010
1326
Art. 1011
1327
Art. 1012
1328
Art. 1013

297
If a person legally entitled to the estate of the deceased appears and files a claim
hereto with the court within five (5) years from the date the property was delivered to the
State, such person shall be entitled to the possession of the same, or if sold, the municipality
or city shall be accountable to him for such part of the proceeds as may not have been
lawfully spent.1329

Order of legal or intestate succession:

Legitimate child Illegitimate child Adopted Child

1 Legitimate child and legitimate child and legitimate child and


legitimate descendants legitimate descendants legitimate descendants

2 Legitimate parents and illegitimate children and illegitimate children and


legitimate ascendants legitimate or illegitimate legitimate or illegitimate
descendants descendants

3 Illegitimate children and illegitimate parents legitimate or illegitimate


legitimate or illegitimate parents and legitimate
descendants ascendants, adoptive
parents

4 Surviving spouse surviving spouse surviving spouse

5 Legitimate siblings, illegitimate siblings, siblings, nephews, nieces


nephews, nieces nephews, nieces

6 Legitimate collateral State State


relatives

7 State

Concurrence in legal or intestate succession

INTESTATE HEIR EXCLUDES EXCLUDED BY CONCURS WITH


Legitimate children Ascendants, No one Surviving spouse
and Legitimate collaterals and state Illegitimate children
descendants

Illegitimate children Illegitimate parents, No one Surviving spouse

1329
Art. 1014

298
and Descendants collaterals and state Legitimate children
and legitimate
parents
Legitimate parents Collaterals and state Legitimate children Illegitimate children
and legitimate and surviving spouse
ascendants

Illegitimate parents Collaterals and state Legitimate children Surviving spouse


and illegitimate
children
Surviving spouse Collaterals other than No one Legitimate children
siblings, nephews and Illegitimate children
nieces Legitimate parents
and Illegitimate
parents

Siblings, nephews All other collaterals Legitimate children, Surviving spouse


nieces and state illegitimate children,
Legitimate parents
and illegitimate
parents

Other collaterals Collateral remoter in Legitimate children Collaterals in the


within 5th degree degree and state Illegitimate children same degree
Legitimate parents
Illegitimate parents
and
Surviving spouse

State No one Everyone No one

A more detailed summary of intestate shares:

1. Legitimate children and legitimate descendants alone

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE


DISPOSAL SHARE
Legitimate children 1

Total 1

2. One legitimate child and surviving spouse

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE


DISPOSAL SHARE
Legitimate child

299
Surviving spouse

Total 1

3. Legitimate children and surviving spouse

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE


DISPOSAL SHARE
Legitimate children Remaining portion of Whole estate divided
estate after paying equally between total
legitimes number of children
plus the surviving
spouse

Surviving spouse Same as share of @ Legitimes to be No. of children plus


legitimate child divided equally the surviving spouse
between total no. of (see above)
children plus the
surviving spouse

Total Varies on no. of Varies on no. of 1


children children

4. Legitimate children and illegitimate children

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE


DISPOSAL SHARE

Legitimate children Remaining portion of Whole estate divided


estate after paying by the ratio of 2:1 for
legitimes each legitimate child
as compared to the
illegitimate child

Illegitimate children share of @ Legitimes to be 1 for @ illegitimate


legitimate child divided by the ratio child provided that
of 2 for @ legitimate legitimes wouldnt be
child, 1 for @ impaired
illegitimate child

Total Varies on no. of Varies on no. of


children children

300
5. One legitimate child, illegitimate child, and surviving spouse

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE


DISPOSAL SHARE
Legitimate child Remaining portion of Whole estate divided
estate after paying by the ratio of 2 @
legitimes to be legitimate child
divided by the ratio
of 2:1 for @
legitimate child and
@ illegitimate child,
respectively

Illegitimate child share of @ 1 for @ illegitimate 1 for @ illegitimate


legitimate child child (see above) child

Surviving spouse Same share as a Legitimes wouldnt


legitimate child be impaired

TOTAL Varies depending on Varies depending on 1


no. of illegitimate no. of illegitimate
children children

6. Legitimate children, illegitimate children and surviving spouse

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE


DISPOSAL SHARE
Legitimate children Remaining portion of Whole estate divided
estate, if any after by the ratio of 2:1 for
paying legitimes to be @ legitimate child
divided by the ratio and illegitimate child
of 2 for @ legitimate respectively
child

Illegitimate children share of @ legit 1 for @ illegitimate 1 for @ illegitimate


child child (see above) child (see above)

Surviving spouse Same share as a Same share as a


legitimate child, legitimate child,
provided legitimes provided legitimes
are not impaired are not impaired

Total Varies depending on Varies depending on 1


no. of illegitimate no. of illegitimate
children children

301
7. Legitimate parents alone

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE


DISPOSAL SHARE
Legitimate parents 1
Total 1

8. Legitimate parents and illegitimate children

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE


DISPOSAL SHARE
Legitimate parents
Illegitimate children

Total 1

9. Legitimate parents and surviving spouse

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE


DISPOSAL SHARE
Legitimate parents

Surviving spouse

Total 1

10. Legitimate parents, surviving spouse and illegitimate children

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE


DISPOSAL SHARE
Legitimate parents

Surviving spouse 1/8 1/8

Illegitimate children

Total 7/8 1/8 1

11. Illegitimate children alone

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE


DISPOSAL SHARE
Illegitimate children 1
alone
Total 1

302
12. Illegitimate children and surviving spouse

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE


DISPOSAL SHARE
Illegitimate children 1/3 1/6

Surviving spouse 1/3 1/6

Total 2/3 1/3 1

13. Surviving spouse

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE


DISPOSAL SHARE
Surviving spouse or 1/3 or 1/3 1

Total or 1/3 or 1/3 1

14. Illegitimate parents alone

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE


DISPOSAL SHARE
Illegitimate parents 1

Total 1

15. Illegitimate parents and surviving spouse

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE


DISPOSAL SHARE
Illegitimate parents

Surviving spouse
Total 1

16. Siblings, nephews and nieces alone

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE


DISPOSAL SHARE
Siblings, nephews, 1
nieces
TOTAL 1

303
17. Surviving spouse, siblings, nephews and nieces

INTESTATE HEIR SHARE AS LEGITIME SHARE AS FREE TOTAL INTESTATE


DISPOSAL SHARE
Surviving spouse

Siblings, nephews,
nieces
Total 1

304
IV. Provisions Common to Testate and Intestate Succession

A. Right of Accretion

1. Definition and Requisites

Accretion is a right by virtue of which, when two or more persons are called to the
same inheritance, devise or legacy, the part assigned to the one who renounces or cannot
receive his share, or who died before the testator, is added or incorporated to that of his co-
heirs, co-devisees, or co-legatees.1330

In order that the right of accretion may take place in a testamentary succession, it
shall be necessary:

(1) That two or more persons be called to the same inheritance, or to the same
portion thereof, pro indiviso; and

(2) That one of the persons thus called die before the testator, or renounce the
inheritance, or be incapacitated to receive it.1331

B. Capacity to Succeed by Will or Intestacy

1. Persons Incapable of Succeeding

(1) The priest who heard the confession of the testator during his last illness, or the
minister of the gospel who extended spiritual aid to him during the same period;

(2) The relatives of such priest or minister of the gospel within the fourth degree, the
church, order, chapter, community, organization, or institution to which such priest or
minister may belong;

(3) A guardian with respect to testamentary dispositions given by a ward in his favor
before the final accounts of the guardianship have been approved, even if the testator should
die after the approval thereof; nevertheless, any provision made by the ward in favor of the
guardian when the latter is his ascendant, descendant, brother, sister, or spouse, shall be
valid;

(4) Any attesting witness to the execution of a will, the spouse, parents, or children,
or any one claiming under such witness, spouse, parents, or children;

(5) Any physician, surgeon, nurse, health officer or druggist who took care of the
testator during his last illness;

(6) Individuals, associations and corporations not permitted by law to inherit.1332


1330
Art. 1015
1331
Art. 1016
1332
Art. 1027

305
The following donations shall be void:

(1) Those made between persons who were guilty of adultery or concubinage at the
time of the donation;

(2) Those made between persons found guilty of the same criminal offense, in
consideration thereof;

(3) Those made to a public officer or his wife, descendants and ascendants, by reason
of his office.

In the case referred to in No. 1, the action for declaration of nullity may be brought
by the spouse of the donor or donee; and the guilt of the donor and donee may be proved
by preponderance of evidence in the same action.1333

The following are incapable of succeeding by reason of unworthiness:

(1) Parents who have abandoned their children or induced their daughters to lead a
corrupt or immoral life, or attempted against their virtue;

(2) Any person who has been convicted of an attempt against the life of the testator,
his or her spouse, descendants, or ascendants;

(3) Any person who has accused the testator of a crime for which the law prescribes
imprisonment for six years or more, if the accusation has been found groundless;

(4) Any heir of full age who, having knowledge of the violent death of the testator,
should fail to report it to an officer of the law within a month, unless the authorities have
already taken action; this prohibition shall not apply to cases wherein, according to law, there
is no obligation to make an accusation;

(5) Any person convicted of adultery or concubinage with the spouse of the testator;

(6) Any person who by fraud, violence, intimidation, or undue influence should
cause the testator to make a will or to change one already made;

(7) Any person who by the same means prevents another from making a will, or
from revoking one already made, or who supplants, conceals, or alters the latter's will;

(8) Any person who falsifies or forges a supposed will of the decedent.1334

1333
Art. 739
1334
Art. 1032

306
2. Unworthiness vs. Disinheritance

Unworthiness Disinheritance

A person cannot succeed for reasons A testamentary disposition by which a


provided for by law.1335 person is deprived of, or excluded from, the
inheritance to which he has a right.

C. Acceptance and Repudiation of the Inheritance

The acceptance or repudiation of the inheritance is an act which is purely voluntary


and free.1336

The effects of the acceptance or repudiation shall always retroact to the moment of
the death of the decedent.1337

No person may accept or repudiate an inheritance unless he is certain of the death of


the person from whom he is to inherit, and of his right to the inheritance.1338

Any person having the free disposal of his property may accept or repudiate an
inheritance.

Any inheritance left to minors or incapacitated persons may be accepted by their


parents or guardians. Parents or guardians may repudiate the inheritance left to their wards
only by judicial authorization.

The right to accept an inheritance left to the poor shall belong to the persons
designated by the testator to determine the beneficiaries and distribute the property, or in
their default, to those mentioned in Article 1030.1339

The lawful representatives of corporations, associations, institutions and entities


qualified to acquire property may accept any inheritance left to the latter, but in order to
repudiate it, the approval of the court shall be necessary.1340

Public official establishments can neither accept nor repudiate an inheritance without
the approval of the government.1341

A married woman of age may repudiate an inheritance without the consent of her
husband.1342

1335
supra
1336
Art. 1041; see Reference for Art. 1030
1337
Art. 1042
1338
Art. 1043
1339
Art. 1044
1340
Art. 1045
1341
Art. 1046

307
Deaf-mutes who can read and write may accept or repudiate the inheritance
personally or through an agent. Should they not be able to read and write, the inheritance
shall be accepted by their guardians. These guardians may repudiate the same with judicial
approval.1343

Acceptance may be express or tacit.

An express acceptance must be made in a public or private document.

A tacit acceptance is one resulting from acts by which the intention to accept is
necessarily implied, or which one would have no right to do except in the capacity of an heir.

Acts of mere preservation or provisional administration do not imply an acceptance


of the inheritance if, through such acts, the title or capacity of an heir has not been
assumed.1344

An inheritance is deemed accepted:

(1) If the heirs sells, donates, or assigns his right to a stranger, or to his co-heirs, or
to any of them;

(2) If the heir renounces the same, even though gratuitously, for the benefit of one
or more of his co-heirs;

(3) If he renounces it for a price in favor of all his co-heirs indiscriminately; but if
this renunciation should be gratuitous, and the co-heirs in whose favor it is made are those
upon whom the portion renounced should devolve by virtue of accretion, the inheritance
shall not be deemed as accepted.1345

The repudiation of an inheritance shall be made in a public or authentic instrument,


or by petition presented to the court having jurisdiction over the testamentary or intestate
proceedings.1346

If the heir repudiates the inheritance to the prejudice of his own creditors, the latter
may petition the court to authorize them to accept it in the name of the heir.1347

The acceptance shall benefit the creditors only to an extent sufficient to cover the
amount of their credits. The excess, should there be any, shall in no case pertain to the
renouncer, but shall be adjudicated to the persons to whom it may belong.

1342
Art. 1047
1343
Art. 1048
1344
Art. 1049
1345
Art. 1050
1346
Art. 1051
1347
Art. 1052

308
If the heir should die without having accepted or repudiated the inheritance his right
shall be transmitted to his heirs.1348

Should there be several heirs called to the inheritance, some of them may accept and
the others may repudiate it.1349

If a person, who is called to the same inheritance as an heir by will and ab intestato,
repudiates the inheritance in his capacity as a testamentary heir, he is understood to have
repudiated it in both capacities.

Should he repudiate it as an intestate heir, without knowledge of his being a


testamentary heir, he may still accept it in the latter capacity.1350

The acceptance or repudiation of an inheritance, once made, is irrevocable, and


cannot be impugned, except when it was made through any of the causes that vitiate
consent, or when an unknown will appears.1351

Within thirty days after the court has issued an order for the distribution of the estate
in accordance with the Rules of Court, the heirs, devisees and legatees shall signify to the
court having jurisdiction whether they accept or repudiate the inheritance.

If they do not do so within that time, they are deemed to have accepted the
inheritance.1352

D. Collation

To determine the legitime, the value of the property left at the death of the testator
shall be considered, deducting all debts and charges, which shall not include those imposed
in the will.

To the net value of the hereditary estate, shall be added the value of all donations by
the testator that are subject to collation, at the time he made them.1353

Donations given to children shall be charged to their legitime.

Donations made to strangers shall be charged to that part of the estate of which the
testator could have disposed by his last will.

Insofar as they may be inofficious or may exceed the disposable portion, they shall
be reduced according to the rules established by this Code.1354

1348
Art. 1053
1349
Art. 1054
1350
Art. 1055
1351
Art. 1056
1352
Art. 1057
1353
Art. 908
1354
Art. 909

309
Donations which an illegitimate child may have received during the lifetime of his
father or mother, shall be charged to his legitime.

Should they exceed the portion that can be freely disposed of, they shall be
reduced.1355

Every compulsory heir, who succeeds with other compulsory heirs, must bring into
the mass of the estate any property or right which he may have received from the decedent,
during the lifetime of the latter, by way of donation, or any other gratuitous title, in order
that it may be computed in the determination of the legitime of each heir, and in the account
of the partition.1356

Collation shall not take place among compulsory heirs if the donor should have so
expressly provided, or if the donee should repudiate the inheritance, unless the donation
should be reduced as inofficious.1357

E. Partition and Distribution of Estate

1. Partition

The separation, division and assignment of a thing held in common among those to
whom it may belong. The thing itself may be divided, or its value.1358

Should a person make partition of his estate by an act inter vivos, or by will, such
partition shall be respected, insofar as it does not prejudice the legitime of the compulsory
heirs.

A parent who, in the interest of his or her family, desires to keep any agricultural,
industrial, or manufacturing enterprise intact, may avail himself of the right granted him in
this article, by ordering that the legitime of the other children to whom the property is not
assigned, be paid in cash.1359

2. Partition inter vivos

It is one that merely allocates specific items or pieces of property on the basis of the
pro-indiviso shares fixed by law or given under the will to heirs or successors.

1355
Art. 910
1356
Art. 1061
1357
Art. 1062
1358
Art. 1079
It includes every act which is intended to put an end to indivision among co-heirs, and legatees or
devisees, although it should purport to be a sale, exchange, compromise, or any other transaction. It is
not subject to any form.
1359
Art. 1080

310
3. Effects of Partition

A partition legally made confers upon each heir the exclusive ownership of the
property adjudicated to him.1360

A partition may be rescinded or annulled for the same causes as contracts.1361

The action for rescission on account of lesion shall prescribe after four years from
the time the partition was made.1362

A partition made with preterition of any of the compulsory heirs shall not be
rescinded, unless it be proved that there was bad faith or fraud on the part of the other
persons interested; but the latter shall be proportionately obliged to pay to the person
omitted the share which belongs to him.1363

A partition which includes a person believed to be an heir, but who is not, shall be
void only with respect to such person.1364

1360
Art. 1091
1361
Art. 1097
1362
Art. 1100
1363
Art. 1104
1364
Art. 1105

311
PARTNERSHIP

I. Contract of partnership1365

A. Definition

By the contract of partnership two or more persons bind themselves to contribute


money, property or industry to a common fund, with the intention of dividing the profits
among themselves.

Two or more persons may also form a partnership for the exercise of a profession.

B. Elements

1. Consensual;
2. Contribution of money, property or industry to a common fund;
3. Subject must be a lawful one;
4. An intention of dividing the profit among the partners;
5. A desire to formulate an active union; 1366
6. A new personality, that of the firm must arise, distinct from the separate
personality of each of the members.

C. Rules to determine existence1367

1. General rule:

Persons who are not partners as to each other are not partners as to third
persons.

Exception:

Partnership by estoppel

2. Co-ownership of a property does not itself establish a partnership, even though


the co-owners share in the profits derived from the incident of joint ownership.

1365
A partnership has a juridical personality which is separate and distinct from that of the partners.
A partnership may sue and be sued in its name or by its duly authorized representatives. A managing
partner of the partnership may execute all acts of administration including the right to sue debtors of the
partnership in the case of their failure to pay their obligation when it becomes demandable. (Tai Tong
Chuache & Co. vs. Insurance Commission 158 SCRA 336 [1988])
1366
affectio societatis
1367
Art. 1769

312
3. Sharing of gross returns alone does not indicate a partnership, whether or not the
persons sharing them have a joint or common right or interest in any property from which
the returns are derived.

4. Receipt of share in the profits is a strong presumptive evidence of partnership.

However, no such inference will be drawn if such profits were received in payment:

(a) as a debt by installments or otherwise;


(b) as wages of an employee or rent to a landlord;
(c) as an annuity to a widow or representative of a deceased partner;
(d) as interest on a loan, though the amount of payment vary with the profits
of the business; and
(e) as the consideration for the sale of a goodwill of a business or other
property by installments or otherwise.

D. How partnership is formed

General rule:

No special form is required for the validity or existence of the contract of


partnership.

Exceptions:

1. Where immovable property or real rights are contributed, the partnership contract
shall be void unless:

a. It is reduced to writing in a public instrument1368 .

b. An inventory of the property contributed is made, signed by the parties and


attached to the public instrument.1369

2. Where the contract is by its terms not to be performed within a year from the
making thereof, such partnership contract is covered by the statute of frauds and thus
requires a written agreement to be enforceable.

3. Where the contract of partnership has a capital of 3,000 pesos or more, in money
or property, it shall appear in a public instrument and must be recorded in the Office of the

1368
Art. 1771
1369
Art.1773
A partnership contract which states that the partnership is established to operate a fishpond is not
rendered void because no inventory of the fishpond was made (where it did not clearly appear in the
articles of partnership that the real property had been contributed by anyone of the partners). (Agad vs.
Mabolo and Mabolo Agad and Co., 23 SCRA 1223[1968])

313
Securities and Exchange Commission. However, a partnership has a juridical personality
even in case of failure to comply with this requirement.

E. Partnership term

Unlimited in the sense that no time limit is fixed by law; may be agreed upon.1370

F. Universal vs. Particular; General vs. Limited

Universal partnership of all present Particular partnership


property1371

The partners contribute all the property One which has for its object determinate
which actually belong to them to a common things, their use and fruits, or a specific
fund, with the intention of dividing the same undertaking, or the exercise of a profession
among themselves, as well as all the profits or vocation.
which they may acquire therewith.

Universal partnership of profits1372

Comprises all that the partners may acquire


by their industry or work during the
existence of the partnership and the usufruct
of movable or immovable property which
each of the partners may possess at the time
of the celebration of the contract.

1370
expressly or impliedly
1371
In a universal partnership of all present property, the property which belongs to each of the partners
at the time of the constitution of the partnership, becomes the common property of all the partners, as
well as the profits which they may acquire therewith.
A stipulation for the common enjoyment of any other profits may also be made; but the properties
which the partners may acquire subsequently by inheritance, legacy or donation cannot be included in
such stipulation, except the fruits thereof.
Where the articles of partnership do not specify the nature of the universal partnership, whether it is
one of present property or of profits only, it will be presumed that the parties intended merely a
partnership of profits.
Future properties cannot be contributed. Thus, property subsequently acquired by (1) inheritance, (2)
legacy or (3) donation cannot be included by stipulation except the fruits thereof
1372
Movable or immovable property which each of the partners may posses at the time of the celebration
of the contract shall continue to pertain exclusively to each, only the usufruct passing to the partnership.
Persons who are prohibited from giving each other any donation or advantage cannot enter into a
universal partnership. (Art. 739, Art. 87, Family Code)
Profits acquired by their partners through chance (i.e. lottery) without employment of any physical or
intellectual efforts are not included.

314
General partnership Limited partnership

Consist of general partners who are liable One formed by two or more persons having
pro rata and subsidiarily and sometimes as members one or more general partners
solidarily with their separate property for and one or more limited partners, the latter
partnership debts. not being personally liable for the obligations
of the partnership.

G. Partnership by estoppel1373

Arises when a person, by words spoken or written or by conduct, represents himself


or consents to another representing him to anyone, as partner in an existing partnership, or
with one or more persons not actual partners; he is liable to any such person to whom such
representation has been made, who has, on the faith of such representation given credit to
the actual or apparent partnership.1374

H. Partnership v. Joint Venture

Partnership Joint Venture1375

Contemplates a general business with some Formed for the execution of a single
degree of continuity transaction and is thus of temporary nature

It is hardly distinguishable from partnership, since their elements are similar, i.e.
community of interest in the business, sharing of profits and losses, and a mutual right of
control.

1373
Elements to establish liability as a partner on ground of estoppel:
1.Defendant represented himself as partner/represented by others as such and not denied/refuted by
defendant
2. Plaintiff relied on such representation
3. Statement of defendant not refuted
1374
Art 1825
It does not create a partnership as between the alleged partners. A contract, express or implied is
essential to the creation of partnership. The law considers them partners and the association as a
partnership insofar as it is favorable to third persons. However, partnership liability is created only in
favor of persons who on the faith of such representation given credit to the actual or apparent
partnership
1375
In Kilosbayan, Incorporated vs. Guingona, Jr. 232 SCRA 110 [1994], the court defined a joint venture as
an association of persons or companies jointly undertaking some commercial enterprise; generally all
contribute assets and share risks. Its requisites are:
a. A community of interest in the performance of the subject matter;
b. A right to direct and govern the policy in connection therewith;
c. Duty to share profits and losses.

315
I. Professional partnership

Partnerships formed by persons for the sole purpose of exercising their common
profession, no part of the income of which is derived from engaging in any trade or
business.

J. Management1376

A. When the manner of management has been provided for in the partnership
agreement

When a managing partner has been appointed:

1. Appointment in the articles of partnership

a. Power is irrevocable without just or lawful cause

i. to remove him for just cause, vote of partners representing


controlling interest is necessary

ii. to remove him without just cause or for an unjust cause,


there must be unanimity including his own vote

b. Extent of power

i. if he acts in good faith, he may do all acts of administration,


despite opposition of his partners

ii. if in bad faith, he cannot.

2. Appointment other than in the articles of partnership

a. Power to act may be revoked at any time, with or without just


cause

b. Extent of power: as long as he remains manager, he can perform


all acts of administration, but if others oppose and he persists, he can be
removed

1376
Arts. 1800-1803

316
When two or more managing partners have been entrusted with the
management of partnership:

1. Without specification of their respective duties and without stipulation


requiring unanimity of action

General rule: Each managing partner may execute all acts of administration

Exception: If any of the managing partners should oppose,

a. Decision of the majority of the managing partners shall prevail

b. In case of a tie, decision of the partners representing the


controlling interest shall prevail

2. With stipulation requiring unanimity of action

General rule: Unanimous consent of all the managing partners shall be


necessary for the validity of the acts and absence or inability of any managing partner
cannot be alleged

Exception: When there is an imminent danger of grave or irreparable injury


to the partnership, partner may act alone without the consent of the partner who is
absent or under disability

B. When manner of management has not been agreed upon

a. All partners shall be considered managers and agents

b. Unanimous consent required for alteration of immovable property

317
II. Rights and obligations of partnership

The partnership can, in general:

a) enter into contracts


b) acquire and possess property of all kinds
c) incur obligations
d) bring civil and criminal actions
e) be adjudged insolvent even if the individual members be each financially
solvent
f) bear risk of loss1377
g) reimburse1378
h) operate under firm name1379
i) bound by partners admission1380

1377
Partnership bears the risk: when what is contributed is a fungible thing, thing which cant be kept
without deteriorating, if the thing was contributed to be sold, and contributions are appraised in the
inventory (Art. 1795, CC)
1378
3 obligations of the partnership:
1. refund disbursements with legal interest
2. answer for obligations contracted in good faith in the partnerships interest
3. answer for risks (Art. 1796, CC)
Partner = agent. Being a mere agent, he isnt personally liable as long as hes not at fault (Art. 1912,
CC) and acted within the scope of his authority. But unlike an ordinary agent, the paying partner doesnt
have the right of retention if he isnt paid.
1379
Every partnership shall operate under a firm name (Art. 1815, CC) to distinguish the partnership from
other entities & from the individual partners.
Non-members whose names were used: dont have the rights of a partner but are liable to 3rd
persons without notice as partners (Art. 1815, CC). They become partners by estoppel (PNB v. Lo).
Use of deceased partners name in law firm: permissible as long as its indicated in the firms
communications that the partner is deceased (Rule 3.02, CPR)
Other rules:
1. a person continuing the partnership after a dissolution uses the firm name/name of deceased
partner as part of the name: deceased partners individual property isnt liable for debts contracted (Art.
1840, CC)
2. the limited partners surname shall not appear in the firm name unless
a. its also the surname of a general partner
b. before the limited partner became such, the business had been carried on under a name in
which his surname appeared (Art. 1846, CC)
1380
Requisites to be admissible against the partnership:
1. it must be connected with partnership affairs
2. its within the scope of the partners authority (Art. 1820, CC) as may be just and equitable under
the circumstances according to capital contribution.
3. Purely industrial partner not liable for losses
Exception: when a partner makes admissions for himself only without purporting to act for the
partnership

318
j) bound by notice to partner1381
k) liable for wrongful act of partner1382

III. Rights and obligations of partners among themselves

Rights:

1. Property rights

a) His rights in the specific partnership property


b) His interest in the partnership
c) His right to participate in the management

2. Right to reimbursement for amounts advanced to the partnership and to


indemnification for risks in consequence of management

3. Right to associate with another person in his share

4. Right of access and inspection of partnership books

5. Right to true and full information of all things affecting the partnership

6. Right to a formal account of partnership affairs under certain circumstances1383

7. Right to have partnership dissolved under certain conditions.

Obligations:

1. Obligation with respect to contribution of property

a) To contribute what had been promised

Admission by a former partner not admissible in evidence against the partnership. (Congco vs.
Trillana)
1381
Notice to the firm:
1. Notice to a partner while already a partner
2. Knowledge is acquired by a partner whos acting in a particular matter, WON a partner at the time
as long as he still remembers the partnership matter
3. The partner who acquired it has reason to believe that it be the subject of the business, and
couldve communicated it to the acting partner (Art. 1821, CC)
1382
Extent of liability for wrongful acts, omissions of a partner: firm is liable to the same extent as the
partner (Art. 1822, CC).
Misapplication of money/property resulting in losses: if loss is suffered by the 3rd person who
delivered the money/property, the partnership is solidarily liable with the misappropriating partner (Art.
1823, CC).
1383
The ten (10) year period to demand an accounting by a partner begins at the dissolution of the
partnership.

319
b) To answer for eviction in case the partnership is deprived of determinate
property contributed
c) To answer to the partnership for the fruits of the property the contribution
of which is delayed, from the date they should have been contributed to the
time of actual delivery
d) To preserve the property with the diligence of a good father of a family
pending delivery to the partnership
e) To indemnify the partners for any damages caused to it by the retention of
the same or by delay in its contribution.

2. Obligations with respect to contribution of money and money converted to


personal use

a) To contribute on the date due the amount he has undertaken to


contribute to the partnership

b) To reimburse any amount he may have taken from the partnership coffers
and converted to his own personal use

c) To pay the agreed or legal interest, if he fails to pay his contribution on


time or in case he takes any amount from the common fund and converted to his
own personal use

d) To indemnify the partnership for the damages caused to it by the delay in


the contribution or the conversion of any sum for his personal benefit.

3. Obligation Not to Engage in Other Business for Himself

Industrial partner- cannot engage in any business for himself unless the partnership
expressly permits him to do so. The other partners have the remedy of either excluding the
erring partner from the firm or of availing themselves of the benefits which he may have
obtained.1384

Capitalist partner- The prohibition extends only to any operation which is of the
same kind of business in which the partnership is engaged unless there is a stipulation to the
contrary.

1384
The prohibition is absolute and applies whether the industrial partner is to engage in the same
business in which the partnership is engaged or in any kind of business. It is clear that the reason for the
prohibition exists in both cases, which is to prevent any conflict of interest between the industrial partner
and the partnership and to insure faithful compliance by said partner with his prestation (Evangelista &
Co. vs. Abad Santos, 51 SCRA 416, 1973)

320
4. Obligation to Contribute Additional Capital

As a general rule, a capitalist partner is not bound to contribute to the partnership


more than what he agreed to contribute but in case of an imminent loss of the business, and
there is no agreement to the contrary, he is under obligation to contribute an additional
share to save the venture. If he refuses to contribute, he shall be obliged to sell his interest in
the partnership to other partners.

5. Obligation of Managing Partner who Collects Debt

Where a person is separately indebted to the partnership and to the managing


partner at the same time, any sum received by the managing partner shall be applied to the
two credits in proportion to their amounts, except where he received it entirely for the
account of the partnership, in which case the whole sum shall be applied to the partnership
credit only.

6. Obligation of Partner Who Receives Share in Partnership Credit

A partner who receives, in whole or in part, his share in the partnership, when the
others have not collected theirs, shall be obliged, if the debtor should thereafter become
insolvent, to bring to the partnership capital what he received even though he may have
given receipt for his share only.1385

7. Obligation of Partner for Damages to Partnership

Every partner is responsible to the partnership for damages suffered by it through


his fault. He cannot compensate them with the profits and benefits which he may have
earned for the partnership by his industry.

8. Duty to Render Information

Partners shall render on demand true and full information of all things affecting the
partnership to any partner or the legal representative of any deceased partner of any partner
under legal disability.

9. Obligation to account for any benefit and hold as trustee unauthorized personal
profits

Every partner must account to the partnership for any benefit, and hold as trustee
for it any profits derived by him without the consent of the other partners from any
transaction connected with the formation, conduct, liquidation of the partnership or form
any use by him of its property.

1385
Requisites for application of rule:
1) A partner has received, in whole or in part, his share in the partnership credit
2) The other partners have not collected their shares.
3) The partnership debtor has become insolvent.

321
IV. Obligations of Partnership/Partners to Third Persons

Liability for contractual obligations1386

All partners, including industrial partners, are personally liable with all their property.
Their individual liability is pro rata and subsidiary, unless otherwise stipulated

Liability of partnership for acts of partners

a. Acts for apparently carrying on in the usual way the business of the
partnership

General rule: Act binds the partnership.

Exception: Partnership is not bound if:

i. acting partner has in fact no authority and


ii. the third person knows that the acting partner has no authority
b. Acts of Strict Dominion or Ownership1387

General rule: Act does not bind the partnership.


Exception: Partnership is bound if:

i. the act is authorized by all the partners; or


ii. they have abandoned the business

c. Acts in contravention of a restriction on authority

Partnership is not liable to third persons having actual or presumptive


knowledge of the restrictions

Liability arising from partners tort or breach of trust

a. Where, by any wrongful act or omission of any partner acting in the


ordinary course of business of the partnership or with authority of his co-partners,
loss or injury is caused to any person, not being a partner in the partnership1388

b. Where one partner, acting within the scope of his apparent authority,
receives money or property of a third person and misapplies it1389

1386
Art. 1816
1387
Acts which are not apparently for carrying on in the usual way the business of the partnership
1388
Art. 1822
1389
Art. 1823

322
c. Where the partnership, in the course of its business, receives money or
property and it is misapplied by any partner while it is in the custody of the
partnership1390

V. Dissolution

Change in the relation of the partners caused by any partner ceasing to be associated
in carrying on the business.1391

It is the point in time when the partners cease to carry on the business together. It
represents the demise of a partnership.

Dissolution is caused:

(1) Without violation of the agreement between the partners:

(a) By the termination of the definite term or particular undertaking specified


in the agreement;

(b) By the express will of any partner, who must act in good faith, when no
definite term or particular is specified;

(c) By the express will of all the partners who have not assigned their
interests or suffered them to be charged for their separate debts, either before or
after the termination of any specified term or particular undertaking;

(d) By the expulsion of any partner from the business bona fide in
accordance with such a power conferred by the agreement between the partners;

(2) In contravention of the agreement between the partners, where the circumstances
do not permit a dissolution under any other provision of this article, by the express will of
any partner at any time;

(3) By any event which makes it unlawful for the business of the partnership to be
carried on or for the members to carry it on in partnership;

(4) When a specific thing which a partner had promised to contribute to the
partnership, perishes before the delivery; in any case by the loss of the thing, when the

1390
Ibid
Criminal liability of partnership:
Partnership liability does not extend to criminal liability where the wrongdoing is regarded as
individual in character. But where the crime is statutory, especially when it involves a fine rather than
imprisonment, criminal liability may be imposed
All partners are solidarily liable with the partnership for any penalty or damage arising from a
partnership tort or breach of trust
1391
Art. 1828

323
partner who contributed it having reserved the ownership thereof, has only transferred to
the partnership the use or enjoyment of the same; but the partnership shall not be dissolved
by the loss of the thing when it occurs after the partnership has acquired the ownership
thereof;

(5) By the death of any partner;

(6) By the insolvency of any partner or of the partnership;

(7) By the civil interdiction of any partner;

(8) By decree of court under the following article.

VI. Limited partnership

A. Definition

One formed by two or more persons having as members one or more general
partners and one or more limited partners, the latter not being personally liable for the
obligations of the partnership.

B. How limited partnership is formed/amended1392

Formation Amendment

1. Certificate of articles of the limited 1. Change in name of partnership,


partnership must state the ff. matters: amount/character of contribution of ltd.
Partner
a. Name of partnership + word
2. Substitution of limited partner
"ltd."
b. Character of business 3. Admission of additional limited partner

1392
A strict compliance with the legal requirements is not necessary. It is sufficient that there is substantial
compliance in good faith. If there is no substantial compliance, the partnership becomes a general
partnership as far as third persons are concerned, in which all the members are liable as general partners.
(Jo Chung Cang vs. Pacific Commercial Co., 45 Phil. 142 [1923].
However, a firm which fails to substantially comply with the formal requirements of a limited
partnership is a general partnership only as to its relations to third persons. The firm is a limited
partnership, subject to all rules applicable to such partnership; and as between the partners they are
bound by their agreement; and that all the limited partners relations to his co-partners and their
obligations to him growing out of the relation remain unimpaired.
As to third persons or creditors guilty of estoppel, the firm shall not be treated as a general
partnership despite lack of substantial compliance to the requirements of a limited partnership. If
creditors deal with the firm as a limited partnership, they will be estopped from insisting that there is no
such partnership, or that the terms of the partnership were not sufficiently stated in the notice of its
formation. (40 Am. Jur. 476.)

324
c. Location of principal place of 4. Admission of general partner
business
5. Death, insolvency, insanity, civil
d. Name/place of residence of interdiction of general partner &
members business is continued

e. Term for partnership is to exist 6. Change in character of business


f. Amount of cash/value of
7. False/erroneous statement in certificate
property contributed
8. Change in time as stated in the certificate
g. Additional contributions
for dissolution of partnership/return of
h. Time agreed upon to return contribution
contribution of limited partner
9. Time is fixed for dissolution of
i. Sharing of profits/other partnership. Return of contribution if no
compensation orig. time specified

j. Right of limited partner (if given) 10. Change in other statement in certificate
to substitute an assignee

k. Right to admit additional


partners
2. Such certificate must be filed for record in
the Office of the Securities and Exchange
Commission.

C. Rights and obligations of a limited partner

Rights:

1. To have the partnership books kept at the principal place of business of the
partnership
2. To inspect, at a reasonable hour, partnership books and copy any of them
3. To demand true and full information of the things affecting the partnership
4. To demand a formal account of the partnership affairs whenever circumstances
render it just and reasonable
5. To ask for dissolution and winding up by decree of court
6. To receive a share in the profits or other compensation by way of income
provided that the partnership assets are in excess of partnership liabilities after such payment

7. To receive the return of his contribution provided:


a) All the liabilities of the partnership have been paid or the partnership
assets are sufficient to pay partnership liabilities

325
b) The consent of all the members has been obtained1393
c) The certificate is cancelled or so amended as to set forth the withdrawal
or reduction

Obligation:

To contribute cash or property to the partnership but not services.

1393
Exception:
When the return of the contribution may be rightfully demanded:
1) On the dissolution of the partnership
2) Upon the arrival of the date specified in the certificate for the return
3) After he has given 6 months notice in writing to all other partners, if no time is specified in the
certificate there for the return of the contribution or for the dissolution of the partnership

326
AGENCY1394

I. Definition of agency

A contract whereby a person1395 binds himself to render some service or to do


something in representation or on behalf of another1396 with the consent or authority of the
latter.1397

II. Powers

A. To bind principal1398

The agent who acts as such is not personally liable to the party with whom he
contracts, unless he expressly binds himself or exceeds the limits of his authority without
giving such party sufficient notice of his powers.1399

If the agent contracts in the name of the principal, exceeding the scope of his
authority, and the principal does not ratify the contract, it shall be void if the party with
whom the agent contracted is aware of the limits of the powers granted by the principal. In
this case, however, the agent is liable if he undertook to secure the principal's ratification.1400

If a duly authorized agent acts in accordance with the orders of the principal, the
latter cannot set up the ignorance of the agent as to circumstances whereof he himself was,
or ought to have been, aware.1401

So far as third persons are concerned, an act is deemed to have been performed
within the scope of the agent's authority, if such act is within the terms of the power of
attorney, as written, even if the agent has in fact exceeded the limits of his authority
according to an understanding between the principal and the agent.1402

1394
General rule: There are no formal requirements governing the appointment of an agent. The agents
authority may be oral or written. It may be in a public or private writing.
Exception: When the law requires a specific form
1395
agent
1396
principal
1397
Art. 1868
1398
General Rule: The principal is not bound by the acts of the agent beyond his limited powers.
Exceptions:
1. Where the principals acts have contributed to deceive the third person in good faith;
2. Where the limitations upon the power created by him could not have been known by the third
person;
3. Where the principal has placed in the hands of the agent instruments signed by him in blank
(Strong vs. Gutierrez Repide, 6 Phil. 680 [1906])
4. Where the principal has ratified the acts of the agent.
1399
Art. 1897
1400
Art. 1898
1401
Art. 1899
1402
Art. 1900

327
A third person cannot set up the fact that the agent has exceeded his powers, if the
principal has ratified, or has signified his willingness to ratify the agent's acts.1403

A third person with whom the agent wishes to contract on behalf of the principal
may require the presentation of the power of attorney, or the instructions as regards the
agency. Private or secret orders and instructions of the principal do not prejudice third
persons who have relied upon the power of attorney or instructions shown them.1404

B. Exception

If an agent acts in his own name, the principal has no right of action against the
persons with whom the agent has contracted; neither have such persons against the
principal.

In such case, the agent is the one directly bound in favor of the person with whom
he has contracted, as if the transaction were his own, except when the contract involves
things belonging to the principal.

The provisions shall be understood to be without prejudice to the actions between


the principal and agent.1405

III. Express vs. Implied Agency

Express Implied1406
One where the agent has been actually One which is implied from the
authorized by the principal, either orally or in
writing; 1. acts of the principal- from his silence or
lack of action, or his failure to repudiate the
agency knowing that another person is acting
on his behalf without authority.

2. Acts of the agent- when he carries out the


agency, or from his silence or inaction
according to the circumstances.

1403
Art. 1901
1404
Art. 1902
1405
Art. 1883
1406
The principal is still bound by the acts of the agent just as in case of express agency

328
IV. Agency by estoppel

One who clothes another with apparent authority as his agent, and holds him out to
the public as such, cannot be permitted to deny the authority of such person in good faith,
and in the honest belief that he is what he appears to be.1407

V. General vs. Special Agency

General Agency Special Agency

One which comprises all the business of the One which comprises one or more specific
principal transactions

VI. Agency couched in general terms

One which is created in general terms and is deemed to comprise only acts of
administration.

VII. Agency requiring special power of attorney

The scope of the agents authority is what appears in the written terms of the power
of attorney. While third persons are bound to inquire into the extent or scope of the agents
authority, they are not required to go beyond the terms of the written power of attorney.
Third persons cannot be adversely affected by an understanding between the principal and
his agent as to the limits of the latters authority. In the same way, third persons need not
concern themselves with instructions given by the principal to his agent outside the written
power of attorney.1408

VIII. Agency by operation of law

The concept is essentially one of estoppel and has been explained in this manner:

"The principal is bound by the acts of his agent with the apparent authority which he
knowingly permits the agent to assume, or which he holds the agent out to the public as
possessing. The question in every case is whether the principal has by his voluntary act
placed the agent in such a situation that a person of ordinary prudence, conversant with
business usages and the nature of the particular business, is justified in presuming that such
agent has authority to perform the particular act in question.1409

1407
Cuison vs. CA, GR.88531, October 26, 1993
1408
Siredy Enterprises, Inc. vs. CA, et al. GR 129039, September 27, 2002
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; except private or secret
orders.
1409
Irving v. Doctors Hospital of Lake Worth, Inc., 415 So. 2d 55 (1982), quoting Arthur v. St. Peters
Hospital, 169 N.J. 575, 405 A. 2d 443 (1979)

329
IX. Rights and Obligations of Principal

The principal must comply with all the obligations which the agent may have
contracted within the scope of his authority.

As for any obligation wherein the agent has exceeded his power, the principal is not
bound except when he ratifies it expressly or tacitly.1410

When the agent has exceeded his authority, the principal is solidarily liable with the
agent if the former allowed the latter to act as though he had full powers.1411

The principal must advance to the agent, should the latter so request, the sums
necessary for the execution of the agency.

Should the agent have advanced them, the principal must reimburse him therefor,
even if the business or undertaking was not successful, provided the agent is free from all
fault.

The reimbursement shall include interest on the sums advanced, from the day on
which the advance was made.1412

The principal must also indemnify the agent for all the damages which the execution
of the agency may have caused the latter, without fault or negligence on his part.1413

The agent may retain in pledge the things which are the object of the agency until the
principal effects the reimbursement and pays the indemnity set forth in the two preceding
articles.1414

If two or more persons have appointed an agent for a common transaction or


undertaking, they shall be solidarily liable to the agent for all the consequences of the
agency.1415

When two persons contract with regard to the same thing, one of them with the
agent and the other with the principal, and the two contracts are incompatible with each
other, that of prior date shall be preferred, without prejudice to the provisions of Article
1544.1416

Agency by estoppel is defined as "one created by operation of law and established by proof of such
acts of the principal as reasonably lead third persons to the conclusion of its existence. Arises where
principal by negligence in failing to supervise agents affairs, allows agent to exercise powers not granted
to him, thus justifying others in believing the agent possesses requisite authority
1410
Art. 1910
1411
Art. 1911
1412
Art. 1912
1413
Art. 1913
1414
Art. 1914
1415
Art. 1915
1416
Art. 1916

330
In the case referred to in the preceding article, if the agent has acted in good faith,
the principal shall be liable in damages to the third person whose contract must be rejected.
If the agent acted in bad faith, he alone shall be responsible.1417

The principal is not liable for the expenses incurred by the agent in the following
cases:

(1) If the agent acted in contravention of the principal's instructions, unless the latter
should wish to avail himself of the benefits derived from the contract;

(2) When the expenses were due to the fault of the agent;

(3) When the agent incurred them with knowledge that an unfavorable result would
ensue, if the principal was not aware thereof;

(4) When it was stipulated that the expenses would be borne by the agent, or that the
latter would be allowed only a certain sum.1418

X. Irrevocable agency

An agency cannot be revoked if a bilateral contract depends upon it, or if it is the


means of fulfilling an obligation already contracted, or if a partner is appointed manager of a
partnership in the contract of partnership and his removal from the management is
unjustifiable.1419

The agent may withdraw from the agency by giving due notice to the principal. If the
latter should suffer any damage by reason of the withdrawal, the agent must indemnify him
therefor, unless the agent should base his withdrawal upon the impossibility of continuing
the performance of the agency without grave detriment to himself. 1420

The agent, even if he should withdraw from the agency for a valid reason, must
continue to act until the principal has had reasonable opportunity to take the necessary steps
to meet the situation.1421

The agency shall remain in full force and effect even after the death of the principal,
if it has been constituted in the common interest of the latter and of the agent, or in the
interest of a third person who has accepted the stipulation in his favor.1422

1417
Art. 1917
1418
Art. 1918
1419
Art. 1927
1420
Art. 1928
1421
Art. 1929
1422
Art. 1930

331
XI. Modes of extinguishment

1. Expiration of the period


2. Death, civil interdiction, insanity or insolvency of the principal or of the agent
3. Withdrawal of the agent1423
4. Accomplishment of the object or the purpose of the agency
5. Revocation
6. Dissolution of the firm or corporation, which entrusted or accepted the agency

COMPROMISE

I. Definition

A contract whereby the parties, by making reciprocal concessions, avoid a litigation


or put an end to one already commenced.1424

II. Void Compromise

No compromise upon the following questions shall be valid:


(1) The civil status of persons;
(2) The validity of a marriage or a legal separation;
(3) Any ground for legal separation;
(4) Future support;
(5) The jurisdiction of courts;
(6) Future legitime 1425

III. Effect

The effect and authority of res judicata; but there shall be no execution except in
compliance with a judicial compromise.1426

If one of the parties fails or refuses to abide by the compromise, the other party may
either enforce the compromise or regard it as rescinded and insist upon his original
demand.1427

1423
Agent may withdraw by giving notice to the principal, but must indemnify the principal for damages
that he may suffer by reason of such withdrawal.
1424
Art. 2028
1425
Art. 2035
1426
Art. 2037
1427
Art. 2041

332
CREDIT TRANSACTIONS

I. Loan

A. Commodatum1428 vs. Mutuum1429

Commodatum Mutuum

When the bailor1430 delivers to the Where the lender delivers to the
bailee1431 a non-consumable thing so borrower money or other
that the latter may use it for a certain consumable thing upon the
time and return the identical thing. condition that the latter shall pay the
same amount of the same kind and
quality.

Object

Non-consumable Consumable

Cause

Gratuitous May or may not be gratuitous

Purpose

Use or temporary possession Consumption

Subject Matter

Real or personal property Only personal property


1428
Kinds:
a. Ordinary Commodatum use by the borrower of the thing is for a certain period of time
b. Precarium - one whereby the bailor may demand the thing loaned at will and it exists in the
following cases:
i. neither the duration nor purpose of the contract is stipulated
ii. the use of the thing is merely tolerated by the owner
1429
A contract whereby one party delivers to another, money or other consumable thing with the
understanding that the same amount of the same kind and quality shall be paid. (Art. 1953)
The mere issuance of the checks does not result in the perfection of the contract of loan. The Civil
Code provides that the delivery of bills of exchange and mercantile documents, such as checks, shall
produce the effect of payment only when they have been encashed (Gerales vs. CA 218 SCRA 638). It is
only after the checks have produced the effect of payment that the contract of loan may be deemed
perfected.
The obligation is to pay and not to return because the consumption of the thing loaned is the
distinguishing character of the contract of mutuum from that of commodatum.
No estafa is committed by a person who refuses to pay his debt or denies its existence.
1430
lender
1431
borrower

333
Ownership of the thing

Retained by the bailor Passes to the debtor

Thing to be returned

Exact thing loaned Equal amount of the same kind and


quality

Who bears risk of loss

Bailor Debtor

When to return

In case of urgent need, even before Only after the expiration of the
the expiration of the term term

B. Obligations of Bailor and Bailee

Obligations of the Bailee Obligations of the bailor:1432


1. To pay for the ordinary expenses for the 1. To respect the duration of the loan
use and preservation of the thing loaned.1433
General rule:
2. To be liable for the loss of the thing even
if it should be through a fortuitous event in Allow the bailee the use of the thing
the following cases: loaned for the duration of the period
stipulated or until the accomplishment of the
a. when he keeps it longer than the purpose for which the commodatum was
period stipulated, or after the instituted.
accomplishment of its use
Exceptions:
b. when he lends or leases it to third
persons who are not members of his a. In case of urgent need in which case
household bailee may demand its return or temporary
use;
c. when the thing loaned has been
delivered with appraisal of its value b. The bailor may demand immediate
return of the thing if the bailee commits any
d. when, being able to save either of the act of ingratitude specified in Art. 765.1437
thing borrowed or his own things, he
chose to save the latter; or 2. To refund to the bailee extraordinary
expenses for the preservation of the thing

1432
Arts. 1946 1952
1433
Art. 1941

334
loaned, provided the bailee brings the same
e. when the bailee devoted the thing for to the knowledge of the bailor before
any purpose different from that for incurring them, except when they are so
which it has been loaned1434 urgent that the reply to the notification
cannot be awaited without danger.
3. To be liable for the deterioration of thing
loaned 3. To be liable to the bailee for damages for
known hidden flaws.1438
(a) if expressly stipulated;
(b) if guilty of fault or negligence; or
(c) if he devotes the thing to any purpose
different from that for which it has been
loaned

4. To pay for extraordinary expenses arising


from the actual use of the thing by the bailee,
which shall be borne equally by both the
bailor and the bailee, even though the bailee
acted without fault, unless there is a
stipulation to the contrary1435

5. To return the thing loaned1436

1437
supra
1434
Art. 1942
1435
Art. 1949, par. 2
1436
The bailee has no right to retain the thing loaned as security for claims he has against the bailor even
for extraordinary expenses except for a claim for damages suffered because of the flaws of the thing
loaned.
However, the bailees right extends no further than retention of the thing loaned until he is
reimbursed for the damages suffered by him.
He cannot lawfully sell the thing to satisfy such damages without courts approval.
In case there are two or more bailees, their obligation shall be solidary.
1438
Requisites:
a. There is flaw or defect in the thing loaned;
b. The flaw or defect is hidden;
c. The bailor is aware thereof;
d. He does not advise the bailee of the same; and
e. The bailee suffers damages by reason of said flaw or defect
If the above requisites concur, the bailee has the right of retention for damages.
The bailor cannot exempt himself from the payment of expenses or damages by abandoning the
thing to the

335
C. Interest and the suspension of usury law

General rule: Unpaid interest shall not earn interest.

Exceptions:

1. when judicially demanded


2. when there is an express stipulation1439

Guidelines for the application of proper interest rates:

1. If there is stipulation: that rate shall be applied

2. The following are the rules of thumb for the application/imposition of interest
rates:

a. When an obligation, regardless of its source, i.e., law, contracts, quasi-


contracts, delicts or quasi-delicts is breached, the contravenor can be held liable for
damages.

b. With regard particularly to an award of interest in the concept of actual


and compensatory damages, the rate of interest, as well as the accrual thereof, is
imposed, as follows:

i. When the obligation breached consists of payment of a sum of


money,1440 the interest shall be that which is stipulated or agreed upon by the
parties. In absence of an agreement, the rate shall be the legal rate 1441
computed from default.1442

ii. In other cases, the rate of interest shall be six percent (6%) per
annum.1443

iii. When the judgment of the court awarding a sum of money


becomes final and executory, the rate of legal interest, whether the case falls
under paragraph i or ii above, shall be 12% per annum from such finality
until its satisfaction, this interim period being deemed to be by then an
equivalent to a forbearance of credit.1444

1439
Must be in writing in view of Art. 1956
1440
loan or forbearance of money
1441
i.e. 12% per annum
1442
The interest due shall itself earn legal interest from the time it is judicially demanded
1443
No interest, however, shall be adjudged on unliquidated claims or damages except when or until the
demand can be established with reasonable certainty. When the demand cannot be established, the
interest shall begin to run only from the date of the judgment of the court is made.
1444
Eastern Shipping Lines vs. CA, July 12, 1994

336
Central Bank Circular No. 416 fixing the rate of interest at 12% per annum deals with
loans, forbearance of any money, goods or credits and judgments involving such loans, or
forbearance in the absence of express agreement to such rate

Interest as indemnity for damages is payable only in case of default or non-


performance of the contract. As they are distinct claims, they may be demanded
separately.1445

Validity of unconscionable interest rate in a loan:

The Supreme Court in Sps. Solangon vs. Jose Salazar,1446 said that since the usury law
had been repealed by CB Cir. No. 905 there is no more maximum rate of interest and the
rate will just depend on the mutual agreement of the parties1447. But the Supreme Court said
that nothing in said circular grants lenders carta blanche authority to raise interest rates to level
which will either enslave their borrowers or lead to a hemorrhaging of their assets 1448. In
Medel vs. CA,1449, it was ruled that while stipulated interest of 5.5% per month on a loan is
usurious pursuant to CB Circular No. 905, the same must be equitably reduced for being
iniquitous, unconscionable and exorbitant. It is contrary to morals1450. It was reduced to 12%
per annum in consonant with justice and fair play.

II. Deposit1451

A contract constituted from the moment a person receives a thing belonging to


another, with the obligation of safely keeping it and of returning the same.

A. Voluntary deposit

One wherein the delivery is made by the will of the depositor or by two or more
persons each of whom believes himself entitled to the thing deposited.1452

B. Necessary deposit

One made in compliance with a legal obligation, or on the occasion of any calamity,
or by travellers in hotels and inns,1453 or by travellers with common carriers.1454

1445
Sentinel Insurance Co., Inc. vs. CA, 182 SCRA 517
1446
G.R. No. 125944, June 29, 2001
1447
citing Lim Law vs. Olympic Sawmill Co., 129 SCRA 439
1448
citing Almeda vs. CA, 256 SCRA 292)
1449
299 SCRA 481
1450
contra bonos mores
1451
The chief difference between a voluntary deposit and a necessary deposit is that in the former, the
depositor has a complete freedom in choosing the depositary, whereas in the latter, there is lack of free
choice in the depositor.
1452
Arts. 1968 1995
1453
Arts. 1996 - 2004
1454
Arts. 1734 1735

337
C. Judicial deposit1455

When an attachment or seizure of property in litigation is ordered.

III. Guaranty and Suretyship

A. Nature and extent of guaranty

Nature Extent of Guarantors liability1456

A contract whereby a person1457 binds 1. Where the guaranty definite:


himself to the creditor to fulfill the It is limited to the principal debt, to the
obligation of the principal debtor in case the exclusion of accessories.
latter fail to do so.
2. Where guaranty indefinite or simple:
It shall comprise not only the principal
obligation, but also all its accessories,
including the judicial costs, provided with
respect to the latter, that the guarantor shall
only be liable for those costs incurred after
he has been judicially required to pay.

B. Effects of guaranty

When there are two or more guarantors of the same debtor and for the same debt,
the one among them who has paid may demand of each of the others the share which is
proportionally owing from him.

If any of the guarantors should be insolvent, his share shall be borne by the others,
including the payer, in the same proportion. The provisions shall not be applicable, unless
the payment has been made by virtue of a judicial demand or unless the principal debtor is
insolvent.1458

The co-guarantors may set up against the one who paid, the same defenses which
would have pertained to the principal debtor against the creditor, and which are not purely
personal to the debtor.1459

A sub-guarantor, in case of the insolvency of the guarantor for whom he bound


himself, is responsible to the co-guarantors in the same terms as the guarantor.1460
1455
Sequestration
1456
Art. 2055
1457
guarantor
1458
Art. 2073
1459
Art. 2074
1460
Art. 2075

338
C. Extinguishment of guaranty

1. Release in favor of one of the guarantors, without the consent of the others,
benefits all to the extent of the share of the guarantor to whom it has been granted;1461

2. If the creditor voluntarily accepts immovable or other properties in payment of


the debt, even if he should afterwards lose the same through eviction or conveyance of
property;1462

3. Whenever by some act of the creditor, the guarantors even though they are
solidarily liable cannot be subrogated to the rights, mortgages and preferences of the
former;1463

4. For the same causes as all other obligations;1464

2. When the principal obligation is extinguished;

6. Extension granted to the debtor by the creditor without the consent of the
guarantor.1465

D. Legal and judicial bonds1466

Judicial bonds constitute merely a special class of contracts of guaranty by the fact
that they are given in virtue of a judicial order.

If the person required to give a legal or judicial bond should not be able to do so, a
pledge or mortgage sufficient to cover the obligation shall admitted in lieu thereof.1467

IV. Pledge

A. Definition

A contract wherein the debtor delivers to the creditor or to a third person a movable
or document evidencing incorporeal rights for the purpose of securing fulfillment of a
principal obligation with the understanding that when the obligation is fulfilled, the thing
delivered shall be returned with all its fruits and accessions.

1461
Art. 2078
1462
Art. 2077
1463
Art. 2080
1464
Art. 1231
1465
Art. 2079
1466
Bond - an undertaking that is sufficiently secured, and not cash or currency
Bondsman - a surety offered in virtue of a provision of law or a judicial order. He must have the
qualifications required of a guarantor and in special laws like the Rules of Court. (Art. 2082)
1467
Art 2083

339
B. Kinds

1. Conventional /Voluntary created by contract


2. Legal created by operation of law
C. Essential requirements

1. Secures the fulfillment of a principal obligation;

2. Pledgor, mortgagor, antichretic debtor must be the absolute owner of the thing
pledged or mortgaged; and

3. Pledgor, mortgagor, antichretic debtor must have free disposal of their property,
or be legally authorized for such purpose.

4. Possession of the thing pledged must be transferred to the creditor or a third


person by agreement;1468

5. It can only cover movable property and incorporeal rights evidenced by


documents of title and the instruments proving the right pledged shall be delivered to the
creditor, and if negotiable must be endorsed;1469 and

6. The description of the thing pledged and the date must appear in a public
instrument to bind third persons, but not for the validity of the contract.1470

D. Obligations of pledge

Obligations of pledgor Obligations of pledgee

1. To advise the pledgee of the flaws of the 1. Take care of the thing with the diligence
thing.1471 of a good father of a family.1473

2. Not to demand the return of the thing 2. Not to use thing unless authorized or by
until after full payment of the debt, including the owner or its preservation requires its
interest due thereon and expenses incurred use.1474
for its preservation.1472
3. Not to deposit the thing with a 3rd person
unless so stipulated.1475

1468
Art. 2093
1469
Art. 2094
1470
Art. 2096
1471
Art. 2101
1472
Art. 2105
1473
Art. 2099
1474
Art. 2104
1475
Art. 2100

340
4. Responsibility for acts of agents and
employees as regards the thing.1476

5. To advise pledgor of danger to the


thing.1477

6. To advise pledgor of the result of the


public auction1478

E. Rights of pledgor

1. To demand return in case of reasonable grounds to fear destruction or


impairment of the thing without the pledgees fault, subject to the duty of replacement1479

2. To bid and be preferred at the public auction1480

3. To alienate the thing pledged provided the pledgee consents to the sale1481

4. To ask that the thing pledged be deposited1482

F. Perfection

In addition to the requisites prescribed in article 2085, it is necessary, in order to


constitute the contract of pledge, that the thing pledged be placed in the possession of the
creditor, or of a third person by common agreement.1483

A pledge shall not take effect against third persons if a description of the thing
pledged and the date of the pledge do not appear in a public instrument.1484

G. Foreclosure

The creditor to whom the credit has not been satisfied in due time, may proceed
before a Notary Public to the sale of the thing pledged. This sale shall be made at a public
auction, and with notification to the debtor and the owner of the thing pledged in a proper
case, stating the amount for which the public sale is to be held. If at the first auction the
thing is not sold, a second one with the same formalities shall be held; and if at the second

1476
Ibid.
1477
Art. 2107
1478
Art. 2116
1479
ibid
1480
Art. 2113
1481
Art. 2097
1482
Arts. 2104 & 2106
1483
Art. 2093
1484
Art. 2096

341
auction there is no sale either, the creditor may appropriate the thing pledged. In this case he
shall be obliged to give an acquittance for his entire claim.1485

The sale of the thing pledged shall extinguish the principal obligation, whether or not
the proceeds of the sale are equal to the amount of the principal obligation, interest and
expenses in a proper case. If the price of the sale is more than said amount, the debtor shall
not be entitled to the excess, unless it is otherwise agreed. If the price of the sale is less,
neither shall the creditor be entitled to recover the deficiency, notwithstanding any
stipulation to the contrary.1486

H. Pledge by Operation of Law

Pledges created by operation of law, such as those referred to in Articles 546, 1731,
and 19941487, are governed by the foregoing articles on the possession, care and sale of the
thing as well as on the termination of the pledge. However, after payment of the debt and
expenses, the remainder of the price of the sale shall be delivered to the obligor.1488
A thing under a pledge by operation of law may be sold only after demand of the
amount for which the thing is retained. The public auction shall take place within one month
after such demand. If, without just grounds, the creditor does not cause the public sale to be
held within such period, the debtor may require the return of the thing.1489

I. Distinguished from Chattel Mortgage

In a contract of sale of personal property the price of which is payable in


installments, the vendor may exercise any of the following remedies:

(1) Exact fulfillment of the obligation, should the vendee fail to pay;

(2) Cancel the sale, should the vendee's failure to pay cover two or more installments;

(3) Foreclose the chattel mortgage on the thing sold, if one has been constituted,
should the vendee's failure to pay cover two or more installments. In this case, he shall have
no further action against the purchaser to recover any unpaid balance of the price. Any
agreement to the contrary shall be void.1490

By a chattel mortgage, personal property is recorded in the Chattel Mortgage


Register as a security for the performance of an obligation. If the movable, instead of being
recorded, is delivered to the creditor or a third person, the contract is a pledge and not a
chattel mortgage.1491

1485
Art. 2112
1486
Art. 2115
1487
See Reference
1488
Art. 2121
1489
Art. 2122
1490
Art. 1484
1491
Art. 2140

342
V. Real Mortgage

A. Definition and characteristics

A contract whereby the debtor secures to the creditor the fulfilment of a principal
obligation, specially subjecting to such security immovable property or real rights over
immovable property in case the principal obligation is not complied with at the time
stipulated.

Characteristics:

1. Real

2. Accessory - its consideration is that of the principal contract from which it


receives life.

3. Subsidiary

4. Unilateral it creates only an obligation on the part of the creditor who must free
the property from the encumbrance once the obligation is fulfilled.

B. Essential requisites

1. It can cover only immovable property and alienable real rights imposed upon
immovable;1492

2. It must appear in a public instrument1493; and

3. Registration in the registry of property is necessary to bind third persons, but not
for the validity of the contract1494.

C. Foreclosure

The remedy available to the mortgagee by which he subjects the mortgaged property
to the satisfaction of the obligation to secure that for which the mortgage was given.

1492
Art. 2124
1493
Art. 2125
1494
Art. 2125

343
VI. Antichresis

A. Definition and characteristics

A contract whereby the creditor acquires the right to receive the fruits of an
immovable of the debtor, with the obligation to apply them to the payment of the interest, if
owing, and thereafter to the principal of his credit..1495

Characteristics:

1. Accessory contract it secures the performance of a principal obligation


2. Formal contract it must be in a specified form to be valid, i.e., in writing.1496

B. Obligations of antichretic creditor

1. To pay taxes and charges on the estate, including necessary expenses1497


2. To apply all the fruits, after receiving them, to the payment of interest, if owing,
and thereafter to the principal
3. To render an account of the fruits to the debtor
4. To bear the expenses necessary for its preservation and repair

VII. Chattel Mortgage

A. Definition and characteristics

A contract by virtue of which personal property is recorded in the Chattel Mortgage


Register as a security for the performance of an obligation.1498

Characteristics

1. Accessory contract it is for the purpose of securing the performance of a


principal obligation

2. Formal contract registration in the Chattel Mortgage Register is indispensable


for its validity

3. Unilateral contract it produces only obligations on the part of the creditor to


free the thing from the encumbrance on fulfillment of the obligation.

1495
Art 2132)
1496
Art 2134
1497
Creditor may avoid said obligation by:
a. compelling debtor to reacquire enjoyment of the property or
b. by stipulation to the contrary
1498
Art. 2140

344
B. Registration

The registration of the chattel mortgage is an effective and binding notice to other
creditors of its existence and creates a real right or a lien which, being recorded, follows the
chattel wherever it goes. The registration gives the mortgagee symbolical possession. 1499

VIII. Quasi-Contracts

A. Negotiorum Gestio -

Arises whenever a person voluntarily takes charge of the agency or management of


the business or property of another without any power or authority from the latter.

B. Solutio Indebiti -

Arises whenever a person unduly delivers a thing through mistake to another who
has no right to demand it.

IX. Concurrence and Preference of Credits1500

A. Meaning of concurrence and preference

Concurrence of Credits Preference of Credit

Possession by two or more creditors of equal Right held by a creditor to be preferred in


rights or privileges over the same property or the payment of his claim above others out of
all of the property of the debtor the debtors assets

1499
Northern Motors, Inc. vs. Coquia, 68 SCRA 374
Effect of failure to register chattel mortgage in the chattel mortgage registry:
Article 2140 makes the recording in the Chattel Mortgage Register an essential requisite but if the
instrument is not recorded, the mortgage is nevertheless binding between the parties. But the person in
whose favor the law establishes a mortgage has no other right than to demand the execution and the
recording of the document.
1500
The rules on preference of credits apply only when two or more creditors have separate and distinct
claims against the same debtor who has insufficient property.
Preference creates no lien on property, and, therefore, gives no interest in property, specific or
general, to the preferred creditor but a preference in application of the proceeds after the sale. (Molina
vs. Somes, 31 Phil. 76)
The preferential right of credit attains significance only after the properties of the debtor have been
inventoried and liquidated, and the claims held by his various creditors have been established. (DBP vs.
NLRC, 183 SCRA 328)

345
B. Preferred Credits on Specific Movables

Those credits which enjoy preference with respect to specific movables, exclude all
others to the extent of the value of the personal property to which the preference refers.1501

If there are two or more credits with respect to the same specific movable property,
they shall be satisfied pro rata, after the payment of duties, taxes and fees due the State or
any subdivision thereof.1502

C. Exempt Property

1. Present property those provided under Arts. 155 and 205 of the Family
Code, Sec. 13, Rule 39 of the Rules of Court,1504 and Sec. 118 of the Public Land Act1505
1503

2. Future property a debtor who obtains a discharge from his debts on account
of his insolvency, is not liable for the unsatisfied claims of his creditors with said property
subject to certain exceptions expressly provided by law.1506

3. Property under legal custody and those owned by municipal corporations


necessary for governmental purposes

D. Classification of credits

With reference to specific movable property of the debtor, the following claims or
liens shall be preferred:

(1) Duties, taxes and fees due thereon to the State or any subdivision thereof;

(2) Claims arising from misappropriation, breach of trust, or malfeasance by public


officials committed in the performance of their duties, on the movables, money or securities
obtained by them;

(3) Claims for the unpaid price of movables sold, on said movables, so long as they
are in the possession of the debtor, up to the value of the same; and if the movable has been
resold by the debtor and the price is still unpaid, the lien may be enforced on the price; this
right is not lost by the immobilization of the thing by destination, provided it has not lost its
form, substance and identity; neither is the right lost by the sale of the thing together with
other property for a lump sum, when the price thereof can be determined proportionally;

1501
Art. 2246
1502
Art. 2247
1503
See Reference
1504
Ibid.
1505
Ibid.
1506
Secs. 68, 69, The Insolvency Law [Act No. 1956]

346
(4) Credits guaranteed with a pledge so long as the things pledged are in the hands of
the creditor, or those guaranteed by a chattel mortgage, upon the things pledged or
mortgaged, up to the value thereof;

(5) Credits for the making, repair, safekeeping or preservation of personal property,
on the movable thus made, repaired, kept or possessed;

(6) Claims for laborers' wages, on the goods manufactured or the work done;

(7) For expenses of salvage, upon the goods salvaged;

(8) Credits between the landlord and the tenant, arising from the contract of tenancy
on shares, on the share of each in the fruits or harvest;

(9) Credits for transportation, upon the goods carried, for the price of the contract
and incidental expenses, until their delivery and for thirty days thereafter;

(10) Credits for lodging and supplies usually furnished to travellers by hotel keepers,
on the movables belonging to the guest as long as such movables are in the hotel, but not
for money loaned to the guests;

(11) Credits for seeds and expenses for cultivation and harvest advanced to the
debtor, upon the fruits harvested;

(12) Credits for rent for one year, upon the personal property of the lessee existing
on the immovable leased and on the fruits of the same, but not on money or instruments of
credit;

(13) Claims in favor of the depositor if the depositary has wrongfully sold the thing
deposited, upon the price of the sale.

In the foregoing cases, if the movables to which the lien or preference attaches have
been wrongfully taken, the creditor may demand them from any possessor, within thirty days
from the unlawful seizure.1507

With reference to specific immovable property and real rights of the debtor, the
following claims, mortgages and liens shall be preferred, and shall constitute an encumbrance
on the immovable or real right:

(1) Taxes due upon the land or building;

(2) For the unpaid price of real property sold, upon the immovable sold;

(3) Claims of laborers, masons, mechanics and other workmen, as well as of


architects, engineers and contractors, engaged in the construction, reconstruction or repair
of buildings, canals or other works, upon said buildings, canals or other works;
1507
Art. 2241

347
(4) Claims of furnishers of materials used in the construction, reconstruction, or
repair of buildings, canals or other works, upon said buildings, canals or other works;

(5) Mortgage credits recorded in the Registry of Property, upon the real estate
mortgaged;

(6) Expenses for the preservation or improvement of real property when the law
authorizes reimbursement, upon the immovable preserved or improved;

(7) Credits annotated in the Registry of Property, in virtue of a judicial order, by


attachments or executions, upon the property affected, and only as to later credits;

(8) Claims of co-heirs for warranty in the partition of an immovable among them,
upon the real property thus divided;

(9) Claims of donors or real property for pecuniary charges or other conditions
imposed upon the donee, upon the immovable donated;

(10) Credits of insurers, upon the property insured, for the insurance premium for
two years.1508

The claims or credits enumerated in the two preceding articles shall be considered as
mortgages or pledges of real or personal property, or liens within the purview of legal
provisions governing insolvency. Taxes mentioned in No. 1, article 2241, and No. 1, article
2242, shall first be satisfied.1509

With reference to other property, real and personal, of the debtor, the following
claims or credits shall be preferred in the order named:

(1) Proper funeral expenses for the debtor, or children under his or her parental
authority who have no property of their own, when approved by the court;

(2) Credits for services rendered the insolvent by employees, laborers, or household
helpers for one year preceding the commencement of the proceedings in insolvency;

(3) Expenses during the last illness of the debtor or of his or her spouse and children
under his or her parental authority, if they have no property of their own;

(4) Compensation due the laborers or their dependents under laws providing for
indemnity for damages in cases of labor accident, or illness resulting from the nature of the
employment;

(5) Credits and advancements made to the debtor for support of himself or herself,
and family, during the last year preceding the insolvency;
1508
Art. 2242
1509
Art. 2243

348
(6) Support during the insolvency proceedings, and for three months thereafter;

(7) Fines and civil indemnification arising from a criminal offense;

(8) Legal expenses, and expenses incurred in the administration of the insolvent's
estate for the common interest of the creditors, when properly authorized and approved by
the court;

(9) Taxes and assessments due the national government, other than those mentioned
in articles 2241, No. 1, and 2242, No. 1;1510

(10) Taxes and assessments due any province, other than those referred to in articles
2241, No. 1, and 2242, No. 1;1511

(11) Taxes and assessments due any city or municipality, other than those indicated
in articles 2241, No. 1, and 2242, No. 1;1512

(12) Damages for death or personal injuries caused by a quasi-delict;

(13) Gifts due to public and private institutions of charity or beneficence;

(14) Credits which, without special privilege, appear in (a) a public instrument; or (b)
in a final judgment, if they have been the subject of litigation. These credits shall have
preference among themselves in the order of priority of the dates of the instruments and of
the judgments, respectively.1513

Credits of any other kind or class, or by any other right or title not comprised in the
four preceding articles, shall enjoy no preference.1514

1510
supra
1511
ibid
1512
ibid
1513
Art. 2244
1514
Art. 2245

349
E. Order of preference of credits

Those credits which enjoy preference with respect to specific movables, exclude all
others to the extent of the value of the personal property to which the preference refers.1515

If there are two or more credits with respect to the same specific movable property,
they shall be satisfied pro rata, after the payment of duties, taxes and fees due the State or
any subdivision thereof.1516

Those credits which enjoy preference in relation to specific real property or real
rights, exclude all others to the extent of the value of the immovable or real right to which
the preference refers.1517

If there are two or more credits with respect to the same specific real property or real
rights, they shall be satisfied pro rata, after the payment of the taxes and assessments upon
the immovable property or real right.1518

The excess, if any, after the payment of the credits which enjoy preference with
respect to specific property, real or personal, shall be added to the free property which the
debtor may have, for the payment of the other credits.1519

Those credits which do not enjoy any preference with respect to specific property,
and those which enjoy preference, as to the amount not paid, shall be satisfied according to
the following rules:

(1) In the order established in Article 2244;1520

(2) Common credits referred to in Article 22451521 shall be paid pro rata regardless of
dates.1522

1515
Art. 2246
1516
Art. 2247
1517
Art. 2248
1518
Art. 2249
1519
Art. 2250
1520
supra
1521
ibid
1522
Art. 2251

350
X. Insolvency Law

A. Definition of insolvency

The relative condition of mans assets and liabilities that the former, if all made
immediately available, would not be sufficient to discharge the latter.1523

B. Suspension of payments

Proceedings for suspension of payments seek the postponement of the debts of a


debtor who possesses sufficient property to cover his debts, but foresees the impossibility of
meeting them when they respectively fall due.1524 The debtor has sufficient properties in
value to meet his debts but there is not enough cash; thus, he cannot pay his debts as they
fall due. He can ask for the suspension of payments of his debts for a given period within
which to convert some of his properties to cash so that he can pay his debts.

C. Voluntary insolvency

The situation of a debtor who, having debts exceeding P1,000 cannot discharge all of
them with all of his existing assets, and who, as a consequence, voluntarily goes to court to
have himself declared as an insolvent so that his assets may be equitably distributed among
his creditors.

D. Involuntary insolvency

Instituted by three (3) or more resident creditors for an individual debtor whose
credits aggregating not less than P1,000 accrued in the Philippines against a debtor who has
committed any of the acts of insolvency.

1523
Philippine Commercial Law by C. Villanueva, 1998 Ed., p.729
1524
Sec. 2

351
LEASE

I. Lease of things

One of the parties binds himself to give to another the enjoyment or use of a thing
for a price certain and for a period which may be definite or indefinite. However, no lease
for more than ninety-nine years shall be valid.1525

II. Lease of work or 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, but the relations of principal and agent does not exist
between them.1526

III. Lease of Rural and Urban lands

A. Qualified persons

Those not covered within the scope as provided for under Articles 1490 and 1491 1527
of the Civil Code.1528

B. Registration

Every lease of real estate may be recorded in the Registry of Property. Unless a lease
is recorded, it shall not be binding upon third persons.1529

C. Prohibitions

The lessee cannot assign the lease without the consent of the lessor, unless there is a
stipulation to the contrary.1530

IV. Rights and obligations of lessor and lessee

When in the contract of lease of things there is no express prohibition, the lessee
may sublet the thing leased, in whole or in part, without prejudice to his responsibility for
the performance of the contract toward the lessor.1531

Without prejudice to his obligation toward the sublessor, the sublessee is bound to
the lessor for all acts which refer to the use and preservation of the thing leased in the
manner stipulated between the lessor and the lessee.1532

1525
Art. 1643
1526
Art. 1644
1527
See Reference
1528
Art. 1646
1529
Art. 1648
1530
Art. 1649
1531
Art. 1650

352
The sublessee is subsidiarily liable to the lessor for any rent due from the lessee.
However, the sublessee shall not be responsible beyond the amount of rent due from him, in
accordance with the terms of the sublease, at the time of the extra-judicial demand by the
lessor.

Payments of rent in advance by the sublessee shall be deemed not to have been
made, so far as the lessor's claim is concerned, unless said payments were effected in virtue
of the custom of the place.1533

The lessor is obliged:

(1) To deliver the thing which is the object of the contract in such a condition as to
render it fit for the use intended;

(2) To make on the same during the lease all the necessary repairs in order to keep it
suitable for the use to which it has been devoted, unless there is a stipulation to the contrary;

(3) To maintain the lessee in the peaceful and adequate enjoyment of the lease for
the entire duration of the contract.1534

If the thing leased is totally destroyed by a fortuitous event, the lease is extinguished.
If the destruction is partial, the lessee may choose between a proportional reduction of the
rent and a rescission of the lease.1535

The lessor of a business or industrial establishment may continue engaging in the


same business or industry to which the lessee devotes the thing leased, unless there is a
stipulation to the contrary.1536

The lessee is obliged:

(1) To pay the price of the lease according to the terms stipulated;

(2) To use the thing leased as a diligent father of a family, devoting it to the use
stipulated; and in the absence of stipulation, to that which may be inferred from the nature
of the thing leased, according to the custom of the place;

(3) To pay expenses for the deed of lease.1537

The lessee may suspend the payment of the rent in case the lessor fails to make the
necessary repairs or to maintain the lessee in peaceful and adequate enjoyment of the
property leased.1538
1532
Art. 1651
1533
Art. 1652
1534
Art. 1654
1535
Art. 1655
1536
Art. 1656
1537
Art. 1657

353
If the lessor or the lessee should not comply with the obligations set forth in articles
1654 and 1657,1539 the aggrieved party may ask for the rescission of the contract and
indemnification for damages, or only the latter, allowing the contract to remain in force.1540

If a dwelling place or any other building intended for human habitation is in such a
condition that its use brings imminent and serious danger to life or health, the lessee may
terminate the lease at once by notifying the lessor, even if at the time the contract was
perfected the former knew of the dangerous condition or waived the right to rescind the
lease on account of this condition.1541

If during the lease it should become necessary to make some urgent repairs upon the
thing leased, which cannot be deferred until the termination of the lease, the lessee is obliged
to tolerate the work, although it may be very annoying to him, and although during the same,
he may be deprived of a part of the premises.

If the repairs last more than forty days the rent shall be reduced in proportion to the
time - including the first forty days - and the part of the property of which the lessee has
been deprived.

When the work is of such a nature that the portion which the lessee and his family
need for their dwelling becomes uninhabitable, he may rescind the contract if the main
purpose of the lease is to provide a dwelling place for the lessee.1542

The lessee is obliged to bring to the knowledge of the proprietor, within the shortest
possible time, every usurpation or untoward act which any third person may have committed
or may be openly preparing to carry out upon the thing leased.

He is also obliged to advise the owner, with the same urgency, of the need of all
repairs included in No. 2 of article 1654.1543

In both cases the lessee shall be liable for the damages which, through his negligence,
may be suffered by the proprietor.

If the lessor fails to make urgent repairs, the lessee, in order to avoid an imminent
danger, may order the repairs at the lessor's cost.1544

The lessee shall return the thing leased, upon the termination of the lease, as he
received it, save what has been lost or impaired by the lapse of time, or by ordinary wear and
tear, or from an inevitable cause.1545

1538
Art. 1658
1539
supra
1540
Art. 1659
1541
Art. 1660
1542
Art. 1662
1543
supra
1544
Art. 1663

354
In the absence of a statement concerning the condition of the thing at the time the
lease was constituted, the law presumes that the lessee received it in good condition, unless
there is proof to the contrary.1546

The lessee is responsible for the deterioration or loss of the thing leased, unless he
proves that it took place without his fault. This burden of proof on the lessee does not apply
when the destruction is due to earthquake, flood, storm or other natural calamity.1547

The lessee is liable for any deterioration caused by members of his household and by
guests and visitors.1548

The bailor shall refund the extraordinary expenses during the contract for the
preservation of the thing loaned, provided the bailee brings the same to the knowledge of
the bailor before incurring them, except when they are so urgent that the reply to the
notification cannot be awaited without danger.

If the extraordinary expenses arise on the occasion of the actual use of the thing by
the bailee, even though he acted without fault, they shall be borne equally by both the bailor
and the bailee, unless there is a stipulation to the contrary.1549

V. Special rules for lease of rural/urban lands

The lessee shall have no right to a reduction of the rent on account of the sterility of
the land leased, or by reason of the loss of fruits due to ordinary fortuitous events; but he
shall have such right in case of the loss of more than one-half of the fruits through
extraordinary and unforeseen fortuitous events, save always when there is a specific
stipulation to the contrary.

Extraordinary fortuitous events are understood to be: fire, war, pestilence, unusual
flood, locusts, earthquake, or others which are uncommon, and which the contracting parties
could not have reasonably foreseen.1550

Neither does the lessee have any right to a reduction of the rent if the fruits are lost
after they have been separated from their stalk, root or trunk.1551

The lease of a piece of rural land, when its duration has not been fixed, is understood
to have been for all the time necessary for the gathering of the fruits which the whole estate

1545
Art. 1665
1546
Art. 1666
1547
Art. 1667
1548
Art. 1668
1549
Art. 1949
1550
Art. 1680
1551
Art. 1681

355
leased may yield in one year, or which it may yield once, although two or more years have to
elapse for the purpose.1552

The outgoing lessee shall allow the incoming lessee or the lessor the use of the
premises and other means necessary for the preparatory labor for the following year; and,
reciprocally, the incoming lessee or the lessor is under obligation to permit the outgoing
lessee to do whatever may be necessary for the gathering or harvesting and utilization of the
fruits, all in accordance with the custom of the place.1553

Land tenancy on shares shall be governed by special laws, the stipulations of the
parties, the provisions on partnership and by the customs of the place.1554

The tenant on shares cannot be ejected except in cases specified by law.1555

VI. Household service

Household service shall always be reasonably compensated. Any stipulation that


household service is without compensation shall be void. Such compensation shall be in
addition to the house helper's lodging, food, and medical attendance.1556

The head of the family shall furnish, free of charge, to the house helper, suitable and
sanitary quarters as well as adequate food and medical attendance.1557

If the house helper is under the age of eighteen years, the head of the family shall
give an opportunity to the house helper for at least elementary education. The cost of such
education shall be a part of the house helper's compensation, unless there is a stipulation to
the contrary.1558

No contract for household service shall last for more than two years. However, such
contract may be renewed from year to year.1559

The house helper's clothes shall be subject to stipulation. However, any contract for
household service shall be void if thereby the house helper cannot afford to acquire suitable
clothing.1560

The head of the family shall treat the house helper in a just and humane manner. In
no case shall physical violence be used upon the house helper.1561

1552
Art. 1682
1553
Art. 1683
1554
Art. 1684
1555
Art. 1685
1556
Art. 1689
1557
Art. 1690
1558
Art. 1691
1559
Art. 1692
1560
Art. 1693

356
House helpers shall not be required to work more than ten hours a day. Every house
helper shall be allowed four days' vacation each month, with pay.1562

In case of death of the house helper, the head of the family shall bear the funeral
expenses if the house helper has no relatives in the place where the head of the family lives,
with sufficient means therefor.1563

If the period for household service is fixed neither the head of the family nor the
house helper may terminate the contract before the expiration of the term, except for a just
cause. If the house helper is unjustly dismissed, he shall be paid the compensation already
earned plus that for fifteen days by way of indemnity. If the house helper leaves without
justifiable reason, he shall forfeit any salary due him and unpaid, for not exceeding fifteen
days.1564

If the duration of the household service is not determined either by stipulation or by


the nature of the service, the head of the family or the house helper may give notice to put
an end to the service relation, according to the following rules:

(1) If the compensation is paid by the day, notice may be given on any day that the
service shall end at the close of the following day;

(2) If the compensation is paid by the week, notice may be given, at the latest on the
first business day of the week, that the service shall be terminated at the end of the seventh
day from the beginning of the week;

(3) If the compensation is paid by the month, notice may be given, at the latest, on
the fifth day of the month, that the service shall cease at the end of the month.1565

Upon the extinguishment of the service relation, the house helper may demand from
the head of the family a written statement on the nature and duration of the service and the
efficiency and conduct of the house helper.1566

VII. Contract of labor

A. Obligation in case of death/injury of laborers

Owners of enterprises and other employers are obliged to pay compensation for the
death of or injuries to their laborers, workmen, mechanics or other employees, even though
the event may have been purely accidental or entirely due to a fortuitous cause, if the death
or personal injury arose out of and in the course of the employment. The employer is also
liable for compensation if the employee contracts any illness or disease caused by such

1561
Art. 1694
1562
Art. 1695
1563
Art. 1696
1564
Art. 1697
1565
Art. 1698
1566
Art. 1699

357
employment or as the result of the nature of the employment. If the mishap was due to the
employee's own notorious negligence, or voluntary act, or drunkenness, the employer shall
not be liable for compensation. When the employee's lack of due care contributed to his
death or injury, the compensation shall be equitably reduced. 1567

If the death or injury is due to the negligence of a fellow worker, the latter and the
employer shall be solidarily liable for compensation. If a fellow worker's intentional or
malicious act is the only cause of the death or injury, the employer shall not be answerable,
unless it should be shown that the latter did not exercise due diligence in the selection or
supervision of the plaintiff's fellow worker.1568

VIII. Contract for piece of work

By the contract for a piece of work the contractor binds himself to execute a piece of
work for the employer, in consideration of a certain price or compensation. The contractor
may either employ only his labor or skill, or also furnish the material.1569

If the contractor agrees to produce the work from material furnished by him, he shall
deliver the thing produced to the employer and transfer dominion over the thing. This
contract shall be governed by the following articles as well as by the pertinent provisions on
warranty of title and against hidden defects and the payment of price in a contract of sale.1570

The contract shall execute the work in such a manner that it has the qualities agreed
upon and has no defects which destroy or lessen its value or fitness for its ordinary or
stipulated use. Should the work be not of such quality, the employer may require that the
contractor remove the defect or execute another work. If the contract fails or refuses to
comply with this obligation, the employer may have the defect removed or another work
executed, at the contractor's cost.1571

An agreement waiving or limiting the contractor's liability for any defect in the work
is void if the contractor acted fraudulently.1572

If the contractor bound himself to furnish the material, he shall suffer the loss if the
work should be destroyed before its delivery, save when there has been delay in receiving
it.1573

The contractor who has undertaken to put only his work or skill, cannot claim any
compensation if the work should be destroyed before its delivery, unless there has been
delay in receiving it, or if the destruction was caused by the poor quality of the material,

1567
Art. 1711
1568
Article 1712
1569
Art. 1713
1570
Art. 1714
1571
Art. 1715
1572
Art. 1716
1573
Art. 1717

358
provided this fact was communicated in due time to the owner. If the material is lost
through a fortuitous event, the contract is extinguished.1574

Acceptance of the work by the employer relieves the contractor of liability for any
defect in the work, unless:

(1) The defect is hidden and the employer is not, by his special knowledge, expected
to recognize the same; or

(2) The employer expressly reserves his rights against the contractor by reason of the
defect.1575

The price or compensation shall be paid at the time and place of delivery of the
work, unless there is a stipulation to the contrary. If the work is to be delivered partially, the
price or compensation for each part having been fixed, the sum shall be paid at the time and
place of delivery, in the absence if stipulation.1576

If, in the execution of the work, an act of the employer is required, and he incurs in
delay or fails to perform the act, the contractor is entitled to a reasonable compensation.

The amount of the compensation is computed, on the one hand, by the duration of
the delay and the amount of the compensation stipulated, and on the other hand, by what
the contractor has saved in expenses by reason of the delay or is able to earn by a different
employment of his time and industry.1577

If the work cannot be completed on account of a defect in the material furnished by


the employer, or because of orders from the employer, without any fault on the part of the
contractor, the latter has a right to an equitable part of the compensation proportionally to
the work done, and reimbursement for proper expenses made.1578

The engineer or architect who drew up the plans and specifications for a building is
liable for damages if within fifteen years from the completion of the structure, the same
should collapse by reason of a defect in those plans and specifications, or due to the defects
in the ground. The contractor is likewise responsible for the damages if the edifice falls,
within the same period, on account of defects in the construction or the use of materials of
inferior quality furnished by him, or due to any violation of the terms of the contract. If the
engineer or architect supervises the construction, he shall be solidarily liable with the
contractor.1579

Acceptance of the building, after completion, does not imply waiver of any of the
cause of action by reason of any defect mentioned in the preceding paragraph.

1574
Art. 1718
1575
Art. 1719
1576
Art. 1720
1577
Art. 1721
1578
Art. 1722
1579
Art. 1723

359
The action must be brought within ten years following the collapse of the building.

The contractor who undertakes to build a structure or any other work for a
stipulated price, in conformity with plans and specifications agreed upon with the land-
owner, can neither withdraw from the contract nor demand an increase in the price on
account of the higher cost of labor or materials, save when there has been a change in the
plans and specifications, provided:

(1) Such change has been authorized by the proprietor in writing; and

(2) The additional price to be paid to the contractor has been determined in writing
by both parties.1580

The owner may withdraw at will from the construction of the work, although it may
have been commenced, indemnifying the contractor for all the latter's expenses, work, and
the usefulness which the owner may obtain therefrom, and damages.1581

When a piece of work has been entrusted to a person by reason of his personal
qualifications, the contract is rescinded upon his death.

In this case the proprietor shall pay the heirs of the contractor in proportion to the
price agreed upon, the value of the part of the work done, and of the materials prepared,
provided the latter yield him some benefit.

The same rule shall apply if the contractor cannot finish the work due to
circumstances beyond his control.1582

The contractor is responsible for the work done by persons employed by him.1583

The contractor is liable for all the claims of laborers and others employed by him,
and of third persons for death or physical injuries during the construction.1584

Those who put their labor upon or furnish materials for a piece of work undertaken
by the contractor have an action against the owner up to the amount owing from the latter
to the contractor at the time the claim is made. However, the following shall not prejudice
the laborers, employees and furnishers of materials:

(1) Payments made by the owner to the contractor before they are due;

(2) Renunciation by the contractor of any amount due him from the owner.

This article is subject to the provisions of special laws.1585


1580
Art. 1724
1581
Art. 1725
1582
Art. 1726
1583
Art. 1727
1584
Art. 1728

360
If it is agreed that the work shall be accomplished to the satisfaction of the
proprietor, it is understood that in case of disagreement the question shall be subject to
expert judgment.

If the work is subject to the approval of a third person, his decision shall be final,
except in case of fraud or manifest error.1586

He who has executed work upon a movable has a right to retain it by way of pledge
until he is paid.1587

1585
Art. 1729
1586
Art. 1730
1587
Art. 1731

361
LAND TITLES AND DEEDS

I. Torrens System

A. Concept and Background

A system for registration of land under which, upon the landowners application, the
court may, after appropriate proceedings, direct the issuance of a certificate of title.

The Torrens system does not create or vest title. It only confirms and records title
already existing and vested. It does not protect a usurper from the true owner. It cannot be a
shield for the commission of fraud. It does not permit one to enrich himself at the expense
of another1588

In order to establish a system of registration by which title recorded became


absolute, indefeasible and imprescriptible, Act No. 496, otherwise known as the Land
Registration Act, was passed and took effect on February 1, 1903. Rights acquired under this
system are guaranteed by the government which provides an assurance fund to answer for
damages to be suffered by persons thru the operation of this system.

This method is also known as the Torrens system of land registration.1589 There are
two (2) laws ancillary to Act No. 496. These are the Cadastral Law of February 11, 19131590
and the Public Land Law of December 1, 19361591 which have been subsequently amended by
later legislations.

Presidential Decree No. 1529 was issued to cope with the growing need of updating
the Land Registration Act, to codify the various other laws relative to registration of real
property and real rights, and to further strengthen the Torrens system. Land Registration Act
No. 496 of February 1, 1903 has not been repealed or abrogated but rather, all laws,
decrees, orders, rules and regulations or parts thereof, in conflict with any provisions of this
decree are hereby repealed or modified accordingly.1592

B. Certificate of Title

This is the true copy of the decree of registration or the transcription thereof and
like the decree shall also be signed by LRA Administrator1593

It takes effect upon the date of entry thereof, and the land covered thereby becomes
registered land on that date.

1588
Angeles vs. Samia, 66 Phil. 444 (1938)
1589
Act 496 has been amended by P.D. 1529 which was enacted on June 11, 1978
1590
Act 2259
1591
Com. Act No. 141
1592
Sec. 20, P.D. No. 1529
1593
Sec. 39, ibid

362
II. Regalian Doctrine

A. Concept

All lands of the public domain, waters, minerals, coal, petroleum and other mineral
oils, all forces of potential energy, fisheries, forests, or timber, wildlife, flora and fauna, and
natural resources belong to the state. With the exception of agricultural lands, all other
natural resources shall not be alienated.1594

B. Effects

Under the Regalian doctrine, all lands of the public domain belong to the State,
which is the source of any asserted right to ownership of land. All lands not otherwise
appearing to be clearly within private ownership are presumed to belong to the State.1595

C. Concept of native title, time immemorial possession

Native Title - refers to pre-conquest rights to lands and domains which, as far back
as memory reaches, have been held under a claim of private ownership by ICCs/IPs, have
never been public lands and are thus indisputably presumed to have been held that way since
before the Spanish Conquest.1596

III. Citizenship Requirement

A. Individuals and corporations

Alienable lands of the public domain:

Only Filipino citizens may acquire not more than 12 hectares by purchase,
homestead or grant, or lease not more than 500 hectares.

Private corporations may lease not more than 1,000 hectares for 25 years renewable
for another 25 years.

1594
Sec. 2, Art. XII, 1987 Constitution
1595
Spouses Reyes et at. v. CA, 295 SCRA 296, September 10, 1998; Cacho v. CA, 269 SCRA 159, March
3,1997
1596
See R.A. 8371

363
IV. Original Registration1597

A. Who may apply

1. Under PD 1529

a. Those who, by themselves or through their predecessors-in-interest, have been in


open, continuous, exclusive and notorious possession and occupation of alienable and
disposable lands of the public domain under a bona fide claim of ownership since June 12,
1945, or earlier;

b. Those who have acquired ownership of private lands by prescription under the
provisions of existing laws;

c. Those who have acquired ownership of private lands or abandoned river beds by
right of accession or accretion; and

d. Those who have acquired ownership of land in any other manner provided for by
law.

Where the land is owned in common, all the co-owners shall file the application
jointly.

Where the land has been sold under pacto de retro, the vendor a retro may file an
application for the original registration of the land, provided, however, that should the
period for redemption expire during the pendency of the registration proceedings and
ownership to the property consolidated in the vendee a retro, the latter shall be substituted for
the applicant and may continue the proceedings.

A trustee on behalf of the principal may apply for original registration of any land
held in trust by him, unless prohibited by the instrument creating the trust.1598

1597
Takes place when the title to land is made of public record for the first time in the name of its lawful
owner. Under the Torrens system, it refers to the registration procedure from the filing of the application
to the issuance of the original certificate of title in pursuance of the decree of registration.
Kinds of Original Registration
1. Voluntary by filing with the proper court
a) Under P.D. No. 1529 (Property Registration Decree)
b) Under Sec. 48 of CA No. 141, Public Land Act
2. Involuntary cadastral proceedings
Compulsory registration initiated by the government, to adjudicate ownership of land
Involuntary on the part of the claimants but they are compelled to substantiate their claim or interest
through an answer
1598
Sec. 14
All these persons must be natural-born Filipino Citizens. However, by way of exception, juridical
persons may apply for registration of leased agricultural and disposable lands not exceeding 1,000
hectares in area for a period of 25 years and renewable for not more than 25 years. (Sec. 3, Chapter XII,
1987 Constitution)

364
2. Under CA 141

(a) Those who prior to the transfer of sovereignty from Spain to the prior United
States have applied for the purchase, composition or other form of grant of lands of the
public domain under the laws and royal decrees then in force and have instituted and
prosecuted the proceedings in connection therewith, but have with or without default upon
their part, or for any other cause, not received title therefor, if such applicants or grantees
and their heirs have occupied and cultivated said lands continuously since the filing of their
applications.

(b) Those who by themselves or through their predecessors in interest have been in
open, continuous, exclusive, and notorious possession and occupation of agricultural lands
of the public domain, under a bona fide claim of acquisition or ownership, for at least thirty
years immediately preceding the filing of the application for confirmation of title except
when prevented by war or force majeure. These shall be conclusively presumed to have
performed all the conditions essential to a Government grant and shall be entitled to a
certificate of title under the provisions of this chapter.

(c) Members of the national cultural minorities who by themselves or through their
predecessors-in-interest have been in open, continuous, exclusive and notorious possession
and occupation of lands of the public domain suitable to agriculture, whether disposable or
not, under a bona fide claim of ownership for at least 30 years shall be entitled to the rights
granted in sub-section (b) hereof.

3. Under RA 8371

Individual and indigenous corporate claimants of ancestral lands which are not
within ancestral domains, may have their claims officially established by filing applications
for the identification and delineation of their claims with the Ancestral Domains Office. An
individual or recognized head of a family or clan may file such application in his behalf or in
behalf of his family or clan, respectively.1599

Notwithstanding the prohibition in the 1973 and 1987 Constitutions against private corporations
holding lands of the public domain except by lease, still a private corporation may institute confirmation
proceedings under Section 48(b) of Public Land Act if, at the time of institution of the registration
proceedings, the land was already private land. (Dir. of Lands vs. IAC and ACME Plywood, 146 SCRA 509)
1599
Sec. 53 (b)

365
B. Registration process and requirements

Registration process Requisites of an Application for Original


Registration

1. Survey of the land by the Bureau of Lands 1. The application must be in writing, signed
or a duly licensed private surveyor;1600 and sworn to by the applicant or by someone
duly authorized in his behalf; and if there is
2. Filing of Application for Registration by more than one applicant, the application
the applicant;1601 shall be signed and sworn to by and in behalf
of each. The full name, citizenship, status,
3. Setting of date for initial hearing by the residence and post office address of the
court; applicant must be stated therein.

4. Transmittal of Application and date of 2. The application must contain the


initial hearing together with all documents or
description of the land; the number of
other evidences attached thereto by the Clerk
parcels and location threof; the nature of title
of Court to the Land Registration Authority;
thereto; encumbrances, if any; occupants
thereon; names and addresses of adjoining
5. Publication of Notice of Filing of owners, if known; assessed value of the
Application and date and place of hearing property, and the length of possession.
once in the Official Gazette and once in a
newspaper of general circulation in the 3. The application must be accompanied
Philippines;1602 with a tracing cloth plan approved by the
Bureau of Lands together with two (2) blue
6. Service of Notice upon contiguous print copies of the same; three (3) copies of
owners, occupants and those known to have the technical description; three (3) copies of
interest in the property by the sheriff; the surveyors certificate; the certificate of
the last assessment of the property in
7. Filing of Answer or Opposition to quadruplicate or, if none, the affidavit of its
Application by any person whether named in market value; and all muniments of title in
the notice or not; the possession of applicant or applicants.

8. Hearing of the case by the court;1603

9. Promulgation of judgment by the court;

10. Issuance of decree or order by the court

1600
Must be drawn in a tracing cloth plan
Approved only by the Director of Land Management (authority of LRA to approve such plan was
withdrawn by P.D. 239 dated July 9, 1983)
1601
Always at the RTC of the province, city or municipality where property is situated.
1602
It is at this point that the court acquires jurisdiction over the subject matter
This is done by the Administrator who acts as the clerk of court
1603
Republication or amendment of technical description of land is necessary when there is substantial
increase of the area of the land. If increase is merely minimal, no republication is needed. (Benin vs.
Tuason, 57 SCRA 531)

366
declaring the decision final and instructing
the Land Registration Authority to issue a
Decree of Confirmation and Registration;1604

11. Entry of Decree in the Land Registration


Authority;1605

12. Sending of copy of Decree to the


corresponding Register of Deeds; and

Transcription of Decree in the registration


book and issuance of Owners Duplicate
Original Certificate of Title of the applicant
by the Register of Deeds upon payment of
the prescribed fees.

1604
it is not the court but the LRA which issues the decree of confirmation and registration
1 year after issuance of decree, it becomes incontrovertible and amendments of the same will not be
allowed except merely in case of clerical errors.
Decree of registration may be reviewed on the ground of fraud and must be filed within 1 year from
entry of the decree.
1605
This serves as the reckoning date to determine the 1-year period from which one can impugn the
validity of the registration.

367
C. Remedies

1. New Trial1606
2. Relief from Judgment1607
3. Appeal1608
4. Petition for Review1609
5. Action for Reconveyance1610
6. Recovery of Damages

D. Cadastral registration1611

A proceeding in rem, initiated by the filing of a petition for registration by the


government, not by the persons claiming ownership of the land subject thereof, and the
latter are, on the pain of losing their claim thereto, in effect compelled to go to court to
make known their claim or interest therein, and to substantiate such claim or interest.

1606
Sec.1, Rule 37, Rules of Court
Grounds:
a. fraud, accident, mistake or excusable negligence which ordinary prudence could not have
guarded against
b. newly discovered evidence
c. award of excessive damages, or insufficiency of the evidence to justify the decision
1607
Nature: subsidiary remedy, i.e. may be availed only when the judgment has become final and a new
trial is not available
Grounds: when a judgment is entered against a party through fraud, accident, mistake, or excusable
negligence, such party may file a petition in the court that rendered such judgment praying that the said
judgment be set aside.
1608
Under P.D. 1529, judgments and orders in land registration cases are appealable to the Court of
Appeals or to the Supreme Court in the same manner as ordinary actions
Must be filed within 15 days from receipt of the judgment or final order appealed from.
1609
of a Decree
Any person may file a petition for review to set aside the decree of registration on the ground that he
was deprived of their opportunity to be heard in the original registration case not later than one (1) year
after the entry of the decree.
It is a petition for review of judgment when it is filed after rendition of the decision but before the
entry of the decree of registration. And it is a petition for review of the decree when it is filed within the
one year period after such entry.
1610
An action seeking to transfer or reconvey the land from the registered owner to the rightful owner
May be filed even after the lapse of one year from entry of the decree of registration as long as the
property has not been transferred or conveyed to an innocent purchaser for value.
An action for reconveyance does not aim or purport to reopen the registration proceedings and set
aside the decree of registration but only to show that the person who secured the registration of the
questioned property is not the real owner thereof. The action, while respecting the decree as
incontrovertible, seeks to transfer or reconvey the land from the registered owner to the rightful owner.
(Esconde vs Borlongay, 152 SCRA 603)
1611
Here, the government does not seek the registration of land in its name. The objective of the
proceeding is the adjudication of title to the lands or lots involved in said proceeding.

368
V. Subsequent Registration1612

A. Voluntary dealings.1613

Refer to deeds, instruments or documents which are results of the free and voluntary
acts of the parties thereto

B. Involuntary dealings1614

1612
Takes place when any deed affecting the land is made of public record after the date of its original
registration.; where incidental matters after original registration may be brought before the land
registration court by way of motion or petition filed by the registered owner or a party in interest.
1613
In voluntary sale of land, the registration of the instrument is the operative act that transmits or
transfers title.
Where there is nothing on the certificate of title to indicate any cloud or vice in the ownership of the
property, or any encumbrance thereon, the purchaser is not required to explore further than what the
Torrens title upon its face indicates in quest for any hidden defect or inchoate right that may
subsequently defeat his right thereto. (Fule vs. Legare. GR No. 17951)
The exception to the above rule is embodied in the case of Dela Merced vs. GSIS (365 SCRA 1) where
the court ruled that when the purchaser or mortgagee is a financing institution, the general rule that a
purchaser or mortgagee of the land is not required to look further than what appears on the face of the
title does not apply.
Well settled is the rule that all persons dealing with property covered by Torrens certificate of title
are not required to go beyond what appears on the face of the title. When there is nothing on the COT
indicating any cloud or vice in the ownership of the property, or any encumbrance thereon, the purchaser
is not required to explore further than what the Torrens Title upon its face indicates in quest for any
hidden defect or inchoate right that may subsequently defeat his right thereto. [Centeno vs CA, 139 SCRA
545, 555 (1985)]
Exceptions for applicability:
1) purchaser in bad faith [Egao vs. CA, 174 SCRA 484, 492 (1989)];
2) sufficiently strong indications to impel closer inquiry into the location, boundaries and condition
of the lot. (Francisco vs. CA 153 SCRA 330, 336, 337);
3) where a person buys land not from the registered owner but from one whose right to the land
has been merely annotated on the COT. (Quiniano vs. CA 39 SCRA 221);
4) purchaser of land the certificate of title contains a notice of lis pendens;
5) purchaser with full knowledge of flaws and defects in the title.(Bernales vs. IAC 166 SCRA 519,
524; Lu vs. Manipon, 381 SCRA 788)
1614
Involuntary dealings affecting registered land which must be registered:
a. attachments
b. sale on execution or for taxes or for any assessment
c. adverse claim
d. notice of lis pendens
Claim or interest is adverse when:
a. claimants right or interest in registered land is adverse to the registered owner;
b. such right arose subsequent to date of original registration;
c. no other provision is made in the Decree for the registration of such right or claim
(Sec. 70, 1st par., P.D. 1529)
An adverse claim is a notice to third persons that someone is claiming an interest on the property
or has a better right than the registered owner thereof, and that any transaction regarding the disputed
land is subject to the outcome of the dispute (Sajonas vs CA, [GR No. 102377, July 5, 1996)

369
Refer to such writ order or process issued by a court of record affecting registered
land which by law should be registered to be effective, and also to such instruments which
are not the willful acts of the registered owner and which may have been executed even
without his knowledge or against his consent.

VI. Non-Registrable Properties

The following lands are not registrable by any private person in his name:

1. Those devoted to public land use such as public roads, plazas, canals, streets,
rivers, banks and shores;

2. Those devoted to public service such as towns, walls and fortresses;


3. Public forests;
4. Mineral lands; and
5. Those reserved by the government for public or quasi-public purposes.
The Constitution provides that all natural resources, except agricultural, commercial
and industrial, residential and resettlement lands are inalienable.1615

Public forests are non-alienable public lands. Possession of public forests on the part
of the claimant, however long, cannot convert the same into private property1616

VII. Dealings with Unregistered Lands1617

The system of registration under the Spanish Mortgage Law is hereby discontinued
and all lands recorded under said system which are not yet covered by Torrens title shall be
considered as unregistered lands.

Hereafter, all instruments affecting lands originally registered under the Spanish
Mortgage Law may be recorded under Section 113 of this Decree, until the land shall have
been brought under the operation of the Torrens system.

The books of registration for unregistered lands provided under Section 194 of the
Revised Administrative Code, as amended by Act No. 3344, shall continue to remain in

Notice of lis pendens is intended to constructively advise, or warn all people who deal with the
property that they so deal with it at their own risk, and whatever rights they may acquire in the property
in any voluntary transaction are subject to the results of the action, and may well be inferior and
subordinate to those which may be finally determined and laid down therein. (Heirs of Maria Marasigan
vs. IAC. 152 SCRA 253).
1615
Art. XIV, Sec. 8, New Constitution
1616
Vano vs. Government of P.I., 41 Phil. 161 (1920)
1617
Sec. 3, P.D. 1529; also Sec. 113

370
force; provided, that all instruments dealing with unregistered lands shall henceforth be
registered under Section 113 of this Decree.1618

No deed, conveyance, mortgage, lease, or other voluntary instrument affecting land


not registered under the Torrens system shall be valid, except as between the parties thereto,
unless such instrument shall have been recorded in the manner herein prescribed in the
office of the Register of Deeds for the province or city where the land lies.

(a) The Register of Deeds for each province or city shall keep a Primary Entry Book
and a Registration Book. The Primary Entry Book shall contain, among other particulars, the
entry number, the names of the parties, the nature of the document, the date, hour and
minute it was presented and received. The recording of the deed and other instruments
relating to unregistered lands shall be effected by any of annotation on the space provided
therefor in the Registration Book, after the same shall have been entered in the Primary
Entry Book.

(b) If, on the face of the instrument, it appears that it is sufficient in law, the Register
of Deeds shall forthwith record the instrument in the manner provided herein. In case the
Register of Deeds refuses its administration to record, said official shall advise the party in
interest in writing of the ground or grounds for his refusal, and the latter may appeal the
matter to the Commissioner of Land Registration in accordance with the provisions of
Section 117 of this Decree. It shall be understood that any recording made under this section
shall be without prejudice to a third party with a better right.

(c) After recording on the Record Book, the Register of Deeds shall endorse among
other things, upon the original of the recorded instruments, the file number and the date as
well as the hour and minute when the document was received for recording as shown in the
Primary Entry Book, returning to the registrant or person in interest the duplicate of the
instrument, with appropriate annotation, certifying that he has recorded the instrument after
reserving one copy thereof to be furnished the provincial or city assessor as required by
existing law.

(d) Tax sale, attachment and levy, notice of lis pendens, adverse claim and other
instruments in the nature of involuntary dealings with respect to unregistered lands, if made
in the form sufficient in law, shall likewise be admissible to record under this section.

(e) For the services to be rendered by the Register of Deeds under this section, he
shall collect the same amount of fees prescribed for similar services for the registration of
deeds or instruments concerning registered lands.1619

16181618
Sec. 3, P.D. 1529
1619
Sec. 113, id.

371
TORTS AND DAMAGES

Book I Torts1620

I. Principles
A. Abuse of Right

Every person must, in the exercise of his rights and in the performance of his duties,
act with justice, give everyone his due, and observe honesty and good faith. 1621

Elements:

1. There is a legal right or duty


2. Which is exercised in bad faith;
3. For the sole intent of prejudicing or injuring another.

B. Unjust Enrichment1622

Every person who through an act of performance by another, or any other means,
acquires or comes into possession of something at the expense of the latter without just or
legal ground, shall return the same to him.1623

If something is received when there is no right to demand it, and it was unduly
delivered through mistake, the obligation to return it arises.1624

Certain lawful, voluntary and unilateral acts give rise to the juridical relation of quasi-
contract to the end that no one shall be unjustly enriched or benefited at the expense of
another.1625
1620
An unlawful violation of private right, not created by contract, and which gives rise to an action for
damages.
It is an act or omission producing an injury to another, without any previous existing lawful relation of
which the said act or omission may be said to be a natural outgrowth or incident.
1621
Art. 19
Contains a mere declaration of principles. The declaration is implemented by Art. 20 (Globe Mackay vs.
CA)
Sets certain standards which must be observed not only in the exercised of ones rights but also in the
performance of ones duties. These standards are:
1. To act with justice
2. To give everyone his due; and
3. Observe honesty and good faith
There is no hard and fast rule to determine whether or not the principle may be invoked.
1622
Elements of Unjust Enrichment:
1. There must be enrichment on the part of the defendant.
2. There is a concomitant injury to the plaintiff.
3. There is no just cause or legal ground for the enrichment
1623
Art. 22
1624
Art. 2154

372
C. Liability without Fault

Even when an act or event causing damage to another's property was not due to
the fault or negligence of the defendant, the latter shall be liable for indemnity if
through the act or event he was benefited.1626

D. Acts Contrary to Law.

Every person who, contrary to law, wilfully or negligently causes damage to another,
shall indemnify the latter for the same.1627

E. Acts Contrary to Morals

Any person who wilfully causes loss or injury to another in manner that is contrary
to morals, good customs or public policy shall compensate the latter for the damage.1628

II. Classification of Torts

A. According to manner of commission:

Intentional Negligent Strict Liability

Include conduct where the Involve voluntary acts or When the person is made
actor desires to cause the omissions which result in liable independent of fault or
consequences of his act or injury to others without negligence upon submission
believes that the intending to cause the same of proof of certain facts
consequences are or because the actor fails to specified by law.1630
substantially certain to result exercise due care in
from it.1629 performing such acts or
omissions.

1625
Art. 2142
1626
Art.23
1627
Art. 20
Even if the particular provision of law does not expressly provide for indemnification in case of
violation, so long as there is a violation of law and damage resulting therefrom, there is liability for
damages under this article.
1628
Art. 21
There is an act which may be legal but which may be contrary to morals, good customs, public order
or public policy (Albeson vs. CA)
1629
They are found in Chapter 2 of the Preliminary Title of the NCC entitled Human Relations. Although
this chapter covers negligent acts, the torts mentioned herein are mostly intentional in nature or torts
involving malice or bad faith.
1630
Strict liability tort can be committed even if reasonable care was exercised and regardless of the state
of mind of the actor at that time.

373
B. According to scope: general or specific

General Specific

The catchall provisions on torts It includes trespass, assault and battery,


provided for in the Civil Code.1631 The negligence, products liability, and
effect is that there is a general duty owe intentional infliction of emotional distress.
d to every person not to As defined, torts fall into three different
cause harm either willfully or negligently. categories: intentional, negligent and
Articles 19, 20, and 21 are provisions on liability,1633 product liability tort.
human relations that were intended to
expand the concept of torts in this
jurisdiction by granting adequate legal
remedy for the untold number of moral
wrongs which is impossible for human
foresight to specifically provide for in the
statutes. 1632

III. The Tortfeasor

A. The Direct Tortfeasor

1. Natural Persons

Refer to human beings.

2. Juridical Persons

(i) The State and its political subdivisions;

(ii) Other corporations, institutions and entities for public interest or purpose,
created by law; their personality begins as soon as they have been constituted according to
law;

(iii) Corporations, partnerships and associations for private interest or purpose to


which the law grants a juridical personality, separate and distinct from that of each
shareholder, partner or member.1634

1631
i.e. Arts. 19, 20 and 21
1632
Aquino, 2005, citing PNB v. CA, et al. 83 SCRA 237
1633
manufacturing and selling defective products
1634
Art. 44

374
Juridical persons may acquire and possess property of all kinds, as well as incur
obligations and bring civil or criminal actions, in conformity with the laws
and regulations of their organization.1635

B. Persons Made Responsible for Others

1. In General

a. Quasi-delicts1636 and the Family Code1637

1. Father, or in case of death or incapacity, mother:

a. damage caused by minor children1638


b. living in their company

2. Guardians:

a. for minors or incapacitated persons


b. under their authority
c. living in their company

3. Owners and managers1639 of establishments:

a. for their employees


b. in the service of the branches in which they are employed, or;
c. on the occasion of their functions

1635
Art. 46
1636
under Art. 2180
Basis:
Pater Familias. The reason for the masters liability is the negligence in the supervision of his
subordinates.
1637
Arts. 218-219, 221
1638
Requisites of vicarious liability of Parents:
1. The child is below twentyone (21) years of age
2. The child committed a tortuous act to the damage and prejudice of another person
3. The child lives in the company of the parent concerned whether single or married.
1639
To be liable, the manager must be acting as an employer or with the same authority as the
owner.

375
4. Employers:

a. damages caused by employees and household helpers1640


b. acting within the scope of their assigned tasks
c. even if the employer is not engaged in any business or industry

5. State acting through a special agent and not when the damage has been
caused by the official to whom the task done properly pertains.

6. Teachers or heads of establishments:

a. of arts and trades


b. for damages caused by their pupils and students or apprentices1641
c. so long as they remain in their custody.1642

The responsibility shall cease when the persons mentioned prove that they observed
all the diligence of a good father of a family to prevent damage.1643

1640
To make the employer liable, it must be established that the injurious or tortuous act was committed
at the time the employee was performing his functions.
If there is deviation from the scope of employment, the employer is not liable, no
matter how short in time is the deviation. (Pineda, Torts and Damages, 2009, p.97)
1641
Statutory basis:
if student is minor Art. 219, FC
if student is no longer a minor Art. 2180, Civil Code
Applies also to teachers of academic institutions.
Liability attaches to the teacher-in-charge.
The school itself is now solidarily liable with the teacher-in-charge.
The liability extends to acts committed even outside the school so long as it is an official activity of the
school.
Whenever the school or teacher is being made liable, the parents and those exercising substitute
parental authority are not free from liability because Art. 219 of the Family Code expressly provides that
they are subsidiarily liable.
Art. 2180 makes teachers and heads liable for acts of students and apprentices whether the latter are
minors or not.
General rule: The teacher-in-charge is liable for the acts of his students. The school and administrators
are not liable.
Exception: It is only the head of the school, not the teacher who is held liable where the injury is
caused in a school of arts and trade.
The liability of the teacher subsists whether the school is academic or non- academic.
Liability is imposed only if the pupil is already in the custody of the teacher or head. The student is in
the custody of the school authorities as longs as he is under the control and influence of the school and
within its premises whether the semester had not yet begun or has already ended.
The victim of negligence is likewise required to exercise due care in avoiding injury to himself.
1642
Art. 2180
1643
The persons liable shall be exempted from liability if they can prove that they have exercised
all the diligence of a good father of a family to prevent damage.

376
The school, its administrators and teachers, or the individual, entity or institution
engaged in child are shall have special parental authority and responsibility over the minor
child while under their supervision, instruction or custody.

Authority and responsibility shall apply to all authorized activities whether inside or
outside the premises of the school, entity or institution.1644

Those given the authority and responsibility mentioned shall be principally and
solidarily liable for damages caused by the acts or omissions of the unemancipated minor.
The parents, judicial guardians or the persons exercising substitute parental authority over
said minor shall be subsidiarily liable.

The respective liabilities of those referred to in the preceding paragraph shall not
apply if it is proved that they exercised the proper diligence required under the particular
circumstances.1645

Parents and other persons exercising parental authority shall be civilly liable for the
injuries and damages caused by the acts or omissions of their unemancipated children living
in their company and under their parental authority subject to the appropriate defenses
provided by law.1646

(1) Elements; definition

Quasi-delict Elements

Whoever by act or omission causes damage (a) fault or negligence of the defendant, or
to another, there being fault or negligence is some other person for whose acts he must
obliged to pay for the damage done.1647 respond;

(b) damages suffered by the plaintiff; and


(c) the connection of cause and effect
between the fault or negligence of the

1644
Art. 218, FC
1645
Art. 219, id.
1646
Art. 221, id.
1647
Article 2176
Difference between Articles 218 & 2180
Art 218
School, admin, teachers engaged in child care are made expressly liable
School, admin, teachers is solidary and parents are made subsidiary liable
Students involved must be minor
Art 2180
Teachers, head of establishment in Arts and trades are made expressly liable
No such express solidary nor subsidiary liability is stated
Students involved not necessarily minor

377
defendant and the damages incurred by the
plaintiff.1648

(2) Distinguished from culpa contractual and


culpa criminal

Culpa Aquiliana Culpa criminal Culpa Contractual

1. Only private concern. 1. Crimes affected the public 1. Pre-existing obligation


interest. between the parties
2. Repairs the damage by
indemnification. 2. Penal law punishes/ 2. Fault or negligence is
corrects the criminal act. incidental to the
3. Covers all acts that are performance of the
faulty or negligent. 3. Only acts covered by obligation
Penal Law are punished 1650
4. Preponderance of 3. Defense of having
evidence. 4. Guilt proven beyond exercised diligence of a good
reasonable doubt. father of a family is not
5. No reservation its available, just like in criminal
independent from crime. 5. Reservation to file action. Applied doctrine of
separate civil action. No Respondent Superior, or
6. Employers liability is reservation, civil action is Master and Servant Rule
solidary1649 impliedly instituted in the
criminal action.

6. Employers liability is
subsidiary

Culpa Contractual Culpa Aquiliana

The foundation of the liability of the It is a separate source of obligation


defendant is the contract independent of contract

In breach of contract committed through the In quasi-delict the presumptive responsibility


negligence of employee, the employer cannot for the negligence of his servants can be
erase his primary and direct liability by rebutted by proof of the exercise of due care
invoking exercise of diligence of a good in their selection and supervision.
father of a family in the selection and
supervision of the employee.

1648
Philippine Bank of Commerce v. CA, 336 Phil. 667, 675 (1997)
1649
Fabre Jr. vs. CA, 259 SCRA 426
1650
Barredo vs Garcia, 73 Phil 607; J. Bocobo, 1940

378
Culpa Aquiliana Crime

Only involves private concern Affect the public interest

The Civil Code by means of indemnification The Revised Penal Code punishes or
merely repairs the damage corrects criminal act

Includes all acts in which any kind of fault or Punished only if there is a penal law clearly
negligence intervenes covering them

Liability is direct and primary in quasi-delict Liability of the employer of the actor-
employee is subsidiary in crimes

b. Indirect liability for intentional acts

A person who himself is not guilty of negligence is made liable for conduct of
another.1651

c. Presumption of negligence on persons indirectly


responsible

Either in the selection of the servant or employee or in the supervision over


him after the selection, or both.1652

d. Nature of liability; joint or solidary?

His liability is primary and direct, not subsidiary. He is solidarily liable with
the tortfeasor.1653 His responsibility is not conditioned upon the insolvency of or prior
recourse against the negligent tortfeasor.1654

1651
Vicarious liability
The liability of the vicarious obligor is primary and direct and not subsidiary. He is solidarily
liable with the tortfeasor. His responsibility is not conditioned upon the insolvency of or prior recourse
against the negligent tortfeasor.
1652
The presumption is juris tantum and not juris et de jure; subsequently, it may be rebutted.
Accordingly, if the employer shows to the satisfaction of the court that in the selection and
supervision of his employee he has exercised the care and diligence of a good father of a family,
the presumption is overcome and he is relieved of the liability
1653
The responsibility of two or more persons who are liable for quasi-delict is solidary (Art. 2194)
1654
De Leon Brokerage v. CA, G.R. 15247, Feb. 28, 1962

379
2. In Particular1655

a. Parents1656

This liability is made natural as logical consequences of the duties and


responsibilities of parents exercising parental authority which includes controlling,
disciplining and instructing their children. In this jurisdiction the parents
liability is vested by law1657 which assumes that when a minor or un emancipated child
living with their parent, commits a tortuous/act, the parents are presumed negligent in t
he performance of their duty to supervise the children under their custody. A
presumption which juris tantum, not juris et de jure, rebuttable
overcome by proof having exercised and observed all the diligence of a good father
of a family.1658

b. Guardian

De facto guardians are covered.1659

1655
Art. 2180
1656
Father and Mother shall jointly exercise parental authority over common children. In case of
disagreement, father's decision shall prevail (Art. 211)
Persons liable for the act of minors other than parents.
a. Those exercising substitute parental authority
b. Surviving grandparents
c. Oldest sibling, over 21 years old unless unfit
or unqualified
d. Childs actual custodian, over 21 years old
unless unfit or disqualified
1657
NCC and FC
1658
Tamagro vs. CA, 209 SCRA 519
The basis of liability for the acts or omissions of their minor children is the parental authority that they
exercise over them, except for children 18 to 21.
The same foreseability test of negligence should apply to parents when they are sought to be held
liable under Art. 2180, NCC
The liability is not limited to parents, the same is also imposed on those exercising substitute and
special parental authority, i.e., guardian.
The liability is present only both under Art 2180 of the NCC and Art 221 of the Family Code if the child
is living in his parents company.
Parental authority is not the sole basis of liability. A teacher in charge is still liable for the acts of their
students even if the minor student reaches the age of majority.
The parents or guardians can still be held liable even if the minor is already emancipated provided that
he is below 21 years of age.
Parents and other persons exercising parental authority can escape liability by proving that they
observed all the diligence of a good father of a family to prevent damages. (Art. 2180)
The burden of proof rests on the parents and persons exercising parental authority
1659
They are relatives and neighbors who take upon themselves the duty to care and support
orphaned children without passing through judicial proceedings (Pineda, p. 88, 2009 ed.)

380
c. Owners and Managers of Establishments and
Enterprises

They are liable for damage caused by their employees in the service of the
branches in which they are employed, or on the occasion of their functions.

d. Employers1660

The employer is liable only if the employee was performing his assigned task at the
time the injury was caused. This includes any act done by the employee in the furtherance
of the interest of the employer at the time of the infliction of the injury or damage.1661

(1) Meaning of employers

Includes any person acting directly or indirectly in the interest of an employer in


relation to an employee and shall include the government and all its branches, subdivisions
and instrumentalities, all government-owned or controlled corporations and
institutions, as well as nonprofit private institutions, or organizations.1662

(2) Requisites

(a) Employee chosen by employer or


through another

1. The employee was chosen by the employer personally or through another;

2. The service is to be rendered in/accordance with orders which the employer has
the authority to give all times;

3. The elicit act of the employee was on the occasion or by reason of the
functions entrusted to him.
(b) Services rendered in accordance
with orders which employer has
authority to give

Person for whom the services are to be performed controls not just the result but
also the means and manner to achieve such end or result.

The vicarious liability of the employer attaches only when the tortious conduct of the
employee relates to, or is in the course of his employment.1663

1660
Defenses available to employers:
a. exercise of due diligence ins election and
supervision of employees
b. act/omission was made outside working hours and in violation of company's rules and regulations
1661
Aquino, T., Torts and Damages, 2005, Second Ed., p. 697
1662
Art. 97, P.D. 442
1663
Valenzuela v. CA

381
(c) Illicit act of employee was on the
occasion or by reason of the
functions entrusted to him

It is not necessary that the task performed by the employee is his regular job
or that which was expressly given to him by the employer. It is enough that the task
is indispensable to the business or beneficial to the employer.1664

(d) Presumption of negligence

The employer is presumed to be negligent and the presumption flows from the
negligence of the employee. Once the employees fault is established, the employer can
then be made liable on the basis of the presumption that the employer failed to
exercise diligentissimi patris families in the selection and supervision of its employees.1665

(3) Employer need not be engaged in


business or industry

As long as their employees and household helpers acted within the scope of their
assigned task.1666

(4) Defense of diligence in selection and


supervision

It is a defense that the employer exercised proper diligence in the selection and
supervision of negligent employee.

(5) Nature of employers liability

If based on culpa aquiliana under Art. 2176 and 2180 of the Civil Code, the
liability is primary, while that under Art. 103 of the Revised Penal Code is subsidiary.

e. State

The State is only liable for the negligent acts of its officers, agents and
employees when they are acting as special agents. The State has voluntarily assumed
liability for acts done through special agents.1667

1664
Filamer Christian Institute v. IAC, 212 SCRA 637
1665
LRTA v. Navidad, G.R. 145804, Feb. 6, 2003
1666
For, admittedly, employees oftentimes wear different hats. They perform functions beyond their
office, title or designation but which, nevertheless, are still within the call of duty (Castilex Industrial
Corporation v. Vasquez., et al.)
1667
Two Kinds:
1. Public officials with a particular assigned tasks but is specially commissioned to do such task
foreign to his usual assigned governmental function.

382
f. Teachers and heads of establishments of arts and
trades1668

The basis of the teachers vicarious liability is, as such, they acting in loco
1669
parentis. However teachers are not expected to have the same
measure of responsibility as that imposed on parent for their influence over the child
is not equal in degree. The parent can instill more lasting discipline more lasting
disciple on the child than the teacher and so should be held to a greater
accountability than the teacher or the head for the tort committed by the child.

C. Joint Tortfeasors

All the persons who command, instigate, promote, encourage, advice, countenance,
cooperate in, aid, or abet the commission of a tort, or who approve of it after it is done, if
done for their benefit; they are each liable as a principal, to the same extent and in the same
manner as if they have performed the wrongful act themselves. 1670

IV. Act of Omission and Its Modalities

A. Concept of Act

Any bodily movement tending to produce some effect in the external world,
it being unnecessary that the same be actually produced, as the possibility of its
production is sufficient.1671

It is an act or omission producing an injury to another, without any previous existing


lawful relation of which the said act or omission may be said to be a natural outgrowth or
incident.1672

V. Proximate Cause

2. Private person not a public official, commissioned to perform non-governmental function. A


government commissioning a special person for a special task is acting thru a special agent within the
meaning of Art. 2180.
The State assumes the role of an ordinary employer and will be held liable for the special
agents torts (Fontanilla vs Malianan)
1668
There is really no substantial difference distinction between the academic and nonacademic schools
in so far as torts committed by their students are concerned. The same vigilance is expected from the
teacher over the student under their control and supervision, whatever the nature of the school where
he is teaching.
1669
in place of parents
1670
Art. 2194
1671
People v. Gonzales, 183 SCRA 309, 324
1672
Defendants in tort cases can either be natural or artificial being. Corporations are civilly liable in the
same manner as natural persons.
Any person who has been injured by reason of a tortious conduct can sue the tortfeasor.
The primary purpose of a tort action is to provide compensation to a person who was injured by the
tortious conduct of the defendant.
Preventive remedy is available in some cases.

383
A. Concept

1. Definition

That cause which in natural and continuous sequence, unbroken by any efficient
intervening cause, produces the injury, without which the result would not have occurred.1673

2. Test

Cause-in-fact Test Policy Test1674

In determining the proximate cause of the If the defendants negligence was not the
injury, it is first necessary to determine if the cause-in-fact, the inquiry stops.
defendants negligence was the cause-in-fact
of the damage to the plaintiff. If it is, the inquiry shifts to the question of
limit of the defendants liability.
It is necessary that there be proof that
defendant's conduct is a factor in causing
plaintiff's damage.

3. Distinguished from Immediate Cause

Proximate Cause Immediate Cause

A cause that directly produces an event and The last event in a chain of events though
without which the event would not have not necessarily the proximate cause of what
occurred.1675 follows.1676

4. Distinguished from Intervening Cause

Proximate Cause Intervening Cause

A cause that is legally sufficient to result in One which comes into active operation in
liability; an act or omission that is considered producing the result after the actors
in law to result in a consequence, so that negligent act or omission has occurred.
liability can be imposed on the actor.1677

1673
Primary cause remains the proximate cause even if there is an intervening cause which merely
cooperated with the primary cause and which did not break the chain of causation.
1674
The directness approach is being applied in this jurisdiction
1675 th
Blacks Law Dictionary, 9 Ed.
1676
Ibid.
1677
Ibid.

384
One which destroys the causal connection
between the negligent act and the injury and
thereby negatives liability.1678

5. Distinguished from Remote and Concurrent

Proximate Cause1679 Remote Cause Concurrent Cause

A cause that does not One of two or more


necessarily or immediately causes that simultaneously
produce an event or produce a result.1681
injury.1680

B. Cause in Fact

1. Substantial Factor Test

The conduct is the cause-in-fact of the damage if it was a substantial factor in


producing the injuries.

In order to be a substantial factor in producing the harm, the causes set in motion by
the defendant must continue until the moment of the damage or at least down the setting in
motion of the final active injurious force which immediately produced or preceded the
damage.

2. Concurrent Causes

The actor is liable even if the active and substantially simultaneous operation of the
effects of a third persons innocent, tortious or criminal act is also a substantial factor in
bringing about the harm so long as the actors negligent conduct actively and continuously
operate to bring about harm to another.1682

Where several causes producing the injury are concurrent and each is an efficient
cause without which the injury would not have happened, the injury may be attributed to all
or any of the causes and recovery may be had against any or all of the responsible persons.

Where the concurrent or successive negligent acts or omissions of two or more


persons, although acting independently, are in combination the direct and proximate cause

1678
Example: The medical findings, show that the infection of the wound by tetanus was an efficient
intervening cause later or between the time Javier was wounded to the time of his death. (People vs.
Rellin, 77 Phil 1038)
1679
supra
1680 th
Blacks Law Dictionary, 9 Ed.
1681
Ibid.
1682
Africa vs. Caltex

385
of a single injury to a third person, and it is impossible to determine what proportion each
contributed to the injury, either of them is responsible for the whole injury, even though his
act alone might not have caused the entire injury; they become joint tort-feasors and are
solidarily liable for the resulting damage under Article 21941683 of the Civil Code.

C. Legal Cause

1. Natural and Probable Consequences1684

Where the defendants liability is recognized only if the harm or injury suffered
is the natural and probable consequence of his act or omission complained of.1685

Involves 2 things:

1. Causality - damage would not have resulted without the fault or negligence of the
defendant

2. Adequacy - the fault of the defendant would normally result in the damage
suffered by the obligee1686

2. Foreseeability

Involves the question of probability, that is, the existence of some real likelihood of
some damage and the likelihood is of such appreciable weight reasonably to induce, action to
avoid it.

Even if a particular injury was not foreseeable, the risk is still foreseeable if
possibility of injury is foreseeable.

Where the particular harm was reasonably foreseeable at the time of the
defendants misconduct, his act or omission is the legal cause thereof. To be negligent,
the defendant must have acted or failed to act in such a way that an ordinary
reasonable man would have realized that certain interests of certain persons were
unreasonably subjected to a general but definite class of risk which made the actors
conduct negligent, it is obviously the consequence for the actor must be held legally
responsible.

1683
The responsibility of two or more persons who are liable for quasi-delict is solidary.
1684
Art. 2202, see Reference
1685
Banzon v. CA, 175 SCRA 297
1686
Reyes & Puno

386
D. Efficient Intervening Cause1687

One which destroys the causal connection between the negligent act and the injury
and thereby negatives liability.

There is no efficient intervening cause if the force created by the negligent act or
omission have either:

1. Remained active itself, or


2. Created another force which remained active until it directly caused the result, or
3. Created a new active risk of being acted upon by the active force that caused the
result.1688

E. Cause vs. Condition

Cause Condition

The active force The passive situation.

The active cause of the harm The existing conditions upon which the cause
operated.1689

1687
A cause is not an intervening cause if it was already in operation at the time the negligent act is
committed.
Foreseeable intervening causes cannot be considered sufficient intervening causes.
The intervention of unforeseen and unexpected cause is not sufficient to relieve the wrongdoer from
consequences of negligence if such negligence directly and proximately cooperates with the independent
cause in the resulting injury.
1688
Example: The medical findings, show that the infection of the wound by tetanus was an efficient
intervening cause later or between the time Javier was wounded to the time of his death (People vs.
Rellin, 77 Phil 1038)
1689
If the defendant has created only a passive static condition which made the damage possible, the
defendant is said not to be liable.

387
F. Last Clear Chance1690

The negligence of the plaintiff does not preclude a recovery for the negligence of the
defendant where it appears that the defendant, by exercising reasonable care and prudence,
might have avoided injurious consequences to the plaintiff notwithstanding the plaintiffs
negligence.

The contributory negligence of the party injured will not defeat the claim for
damages if it is shown that the defendant could, by the exercise of reasonable care
and prudence, have avoided the consequences of the negligence of the injured party.

VI. Legal Injury

A. Concept

The violation of a legal right.1691


An act causing damage, which act must be not only hurtful, but wrongful. There
must be damnum et injuria.

B. Elements of Right

1. A legal wrong inflicted by the defendant, and


2. Damage resulting to the plaintiff therefrom

1690
Doctrine of Last Clear Chance or Discovered Peril
Elements:
a. plaintiff was in a position of danger by his own negligence
b. defendant knew of such position of the plaintiff
c. defendant had the least clear chance to avoid the accident by exercise of ordinary care but failed
to exercise such last clear chance and
d. accident occurred as proximate cause of such failure
Who may invoke: plaintiff
Inapplicable to:
1. joint tortfeasors
rd
2. defendants concurrently negligent as against 3 persons
Cases when the doctrine was held inapplicable (PICCA)
1. If the plaintiff was not negligent.
2. The party charged is required to act instantaneously, and if the injury cannot be avoided by the
application of all the means at hand after the peril is or should have been discovered.
3. If defendants negligence is a concurrent cause and which was still in operation up to the time the
injury was inflicted.
4. Where the plaintiff, a passenger, filed an action against a carrier based on contract.
5. If the actor, though negligent, was not aware of the danger or risk brought about by the prior
fraud or negligent act.
1691 th
Blacks Law Dictionary, 9 Ed.

388
C. Violation of Right or Legal Injury

The loss, hurt or harm which results from the injury.

D. Classes of Injury

Injury to persons Injury to property Injury to relations

1. assault, 1. Family relations


1. trespass to land,
2. battery,
2. trespass to chattels, and a. Alienation of affection
3. false imprisonment, b. Loss of consortium
3. conversion.
c. Criminal conversation
4. intentional infliction of
emotional distress, and
2. Social relations
5. fraud
a.Meddling with or disturbing
famiy relations

b.Intriguing to cause another


to be alienated from his friends

3. Economic relations

a. Interference with
contractual relations

b. Unfair competition

4. Political relations

a. Violation of right to
suffrage

b. Violation of other political


rights1692

1692
freedom of speech, press, assembly and petition, etc.

389
VII. Intentional Torts

A. General

1. Concept

A tort committed by someone acting with general or specific intent.1693

Include conduct where the actor desires to cause the consequences of his act or
believes that the consequences are substantially certain to result from it.

They are found in Chapter 2 of the Preliminary Title of the NCC entitled Human
Relations. Although this chapter covers negligent acts, the torts mentioned herein are
mostly intentional in nature or torts involving malice or bad faith.

2. Classes

a. Interference with persons and property

Physical harms Non-physical harms

1.Violation of persons security, physical 1. Violation of personal dignity


injuries
2. Infliction of emotional distress
a. battery1694
3. Violation of privacy1697
b. assault1695
2. False imprisonment1696 a. Appropriation

1693 th
Blacks Law Dictionary, 9 Ed.
1694
physical injury
1695
grave threat .
1696
illegal detention
1697
Zones of privacy under the NCC, RPC, Rules of Court, and special laws:
1.That every person shall respect the dignity, personality, privacy and peace of mind of his
neighbors and other persons and any act of a person of meddling and prying into the privacy
of another is punishable as an actionable wrong;
2. That a public officer or employee or any private individual shall be liable for damages for any
violation of the rights and liberties of another person, and recognizes the privacy of letters and
other private communications;
3. The RPC makes a crime the:
i. violation of secrets by an officer,
ii. revelation of trade and industrial secrets, and
iii. trespass to dwelling.
4. Invasion of privacy is likewise an offense in special laws such as the:
i. antiwiretapping law; and
ii. secrecy of bank deposits act; and
5. The Rules of Court provisions on privileged communication.

390
3. Trespass to land b. Intrusion