OBLIGATIONS AND CONTRACTS REVIEWER || A.

Regado

CHAPTER 1 : GENERAL PROVISIONS  Mere possession w/ juridical title not being a concept of ownership cannot ripen into
ownership by acquisitive prescription
(Hand written notes) UNLESS
1.) Juridical relation repudiated
CHAPTER 2: PRESCRIPTION OF OWNERSHIP AND OTHER REAL RIGHTS
2.) Repudiation communicated to other party
Art. 1117. Acquisitive prescription of dominion and other real rights may be ordinary or  Possession must be public : notorious holding of property known o community
extraordinary.  Peaceful : No valid Interference

Ordinary acquisitive prescription requires possession of things in good faith and with just Art. 1119. Acts of possessory character executed in virtue of license or by mere tolerance
title for the time fixed by law. of the owner shall not be available for the purposes of possession.

 Ordinary prescription requires: (IJU)  Possession by tolerance therefore does not imply assertion of ownership and does not
1. Uninterrupted possession for required statutory period of years produce effect w/ respect to possession or prescription
2. In good faith  To constitute as foundation of prescription the right must be:
3. Just Tittle 1. In possession under claim of title
 Extra-ordinary prescription requires: (U) 2. Adverse
1. Uninterrupted possession for required statutory period of years  No matter how long so continued (possession) , does not start running of period of
2. WITHOUT need of just title and good faith (possessor) prescription

(De Leon Additional)

1. Capacity of Possessor Art. 1120. Possession is interrupted for the purposes of prescription, naturally or civilly.
2. Susceptibility of object to prescription (1943)
3. Adverse possession
 Continuity of holding property
Ordinary Prescription Extra-Ordinary Prescription  Uninterrupted possession strengthens adverse right of possessor
Immovable 10 years 30 years
Movable 4 years 8 years

Art. 1121. Possession is naturally interrupted when through any cause it should cease for
Art. 1118. Possession has to be in the concept of an owner, public, peaceful and more than one year.
uninterrupted.
The old possession is not revived if a new possession should be exercised by the same
Take note: (OPPU) adverse claimant.

 Possessor asserts dominion on property to the exclusion of all others

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Art. 1122. If the natural interruption is for only one year or less, the time elapsed shall be
counted in favor of the prescription. ADVERSE

Art. 1123. Civil interruption is produced by judicial summons to the possessor.

TO THE
 For Civil interruption to take place possessor must have received judicial summons EXCLUSION OF POSSESION CONTINUOUS
ALL OTHERS
Art. 1124. Judicial summons shall be deemed not to have been issued and shall not give
rise to interruption: PUBLIC

(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.
 NOT : filing of complaint = interrupt possession
 BUT it is interrupted upon receipt of possessor of judicial summons after filing of
complaint
 CASES: JUDICIAL SUMMONS DOES NOT GIVE RISE TO INTERRUPTION
1. Served by person not authorized by court
2. Plaintiff desist from claim/allow proceedings to lapse
3. Possessor absolved from complaint (Complaint not fully substantiated)
Art. 1125. Any express or tacit recognition which the possessor may make of the owner's
right also interrupts possession.
 Recognition must be made before prescription has already obtained
Art. 1126. Against a title recorded in the Registry of Property, ordinary prescription of
ownership or real rights shall not take place to the prejudice of a third person, except in
virtue of another title also recorded; and the time shall begin to run from the recording of
the latter.
As to lands registered under the Land Registration Act, the provisions of that special law
shall govern.
 Doctrine of Laches is applicable to cases where possessor/ transferee apparently
obtained property for some apparent mode of conveyance
 But if possessor cannot prove any mode of acquisition, laches will not apply
 Laches w/c is a principle based on equity may not prevail against a specific provision of
law
- It is applied in absence and not against statutory law/rules of procedure
REQUISITES : LACHES

 Interrupts possession – possession must always be in the concept of an owner to the 1. Conduct (Defendant) Give rise to situation
exclusion of all others 2. Delay in asserting complainant’s rights
3. Lack of knowledge
4. Injury/Prejudice to defendant
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Art. 1127. The good faith of the possessor consists in the reasonable belief that the person “True and valid title”
from whom he received the thing was the owner thereof, and could transmit his
ownership.  Of itself sufficient to transfer ownership w/o necessity of lapse of prescriptive period
(OPPU)
Art. 1128. The conditions of good faith required for possession in Articles 526, 527, 528,  There is just title when adverse claimant comes into possession of property through one
and 529 of this Code are likewise necessary for the determination of good faith in the of modes recognized by law for the acquisition of ownership or other real rights but the
prescription of ownership and other real rights. grantor is not the owner or cannot transmit any right
 Occupation or use alone no matter how long cannot confer title by prescription or
GOOD FAITH REQUISITES adverse possession UNLESS coupled with element of hostitlity towards true owner that
is possession under claim of title
1. Believed : person from whom he received thing : owner
2. Could transmit ownership Art. 1132. The ownership of movables prescribes through uninterrupted possession for
3. Reasonable basis four years in good faith.
 Good faith must be present at time of acquisition and continue throughout required
prescriptive period The ownership of personal property also prescribes through uninterrupted possession for
eight years, without need of any other condition.
Art 526 Not aware: Acquisition (flaw that invalidates it)
Art 527 Good faith always presumed With regard to the right of the owner to recover personal property lost or of which he has
: Person who alleges bad faith – burden of proof been illegally deprived, as well as with respect to movables acquired in a public sale, fair,
Art 528 Not aware: Possess thing improperly/wrongfully or market, or from a merchant's store the provisions of Articles 559 and 1505 of this Code
Art 529 Presumption continues until contrary is proved
shall be observed.
 Good faith : honest belief of validity of one’s right ; ignorance of superior claim;
absence of intention to overreach another Ordinary Prescription Extra-Ordinary Prescription
 Cannot be invoked if claimant has actual/constructive notice of legal/valid rights of Movable 4 years 8 years
possession of another during prescriptive period Requirement Good faith w/o need of any other condition
+ OPPU

Art. 1129. For the purposes of prescription, there is just title when the adverse claimant
came into possession of the property through one of the modes recognized by law for the
Article 559
acquisition of ownership or other real rights, but the grantor was not the owner or could
not transmit any right. Possession movable property + Good faith = title
Lost/Unlawfully deprived -- may recover : person in possession
Art. 1130. The title for prescription must be true and valid. If possessor (movable lost/owner has been unlawfully deprived) : GF at public sale --- cannot
be returned w/o reimbursement of P.price
Art. 1131. For the purposes of prescription, just title must be proved; it is never
presumed.
Art 1505
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Good sold (not owner & no authority/consent of owner)
Buyer (no better title than seller) –Goods
UNLESS owner of goods BY his conduct : precluded from denying the seller’s authority to
sell
 Nothing in this title shall affect
1. Provisions of any factors’ acts, recording laws or any other provision of law
enabling the apparent owner of goods to dispose the as if he were the true owner
thereof
2. Validity of contract of sale under order of court of competent jurisdiction
3. Purchases made in merchant’s store or in fairs/markerts (C. of Commerce and
Special laws)
Art. 1133. Movables possessed through a crime can never be acquired through
prescription by the offender.
 No one must benefit from an evil act
 Benefits of prescription are denied to the offender, nonetheless if thing was in
meanwhile passed to a subsequent holder, prescription begins to run.
Art. 1134. Ownership and other real rights over immovable property are acquired by
ordinary prescription through possession of ten years.
 Only 10 years of possession by adverse claimant are needed for acquisitive prescription
 Must however be by virtue of a just and valid title + concept of an owner +
uninterrupted + adverse + public
Art. 1135. In case the adverse claimant possesses by mistake an area greater, or less
than that expressed in his title, prescription shall be based on the possession.
 Extent of property = actually possessed or held by claimant regardless of size indicated
in title
 (title < actual) : regardless if greater or less
Art. 1136. Possession in wartime, when the civil courts are not open, shall not be
counted in favor of the adverse claimant.
REQUISITES
1.) Wartime
2.) Civil courts are closed
 Because there is no way by which any person claiming title over a certain property can
file a case of recovery from person in adverse possession of property
Art. 1137. Ownership and other real rights over immovables also prescribe through
uninterrupted adverse possession thereof for thirty years, without need of title or of
good faith. (1959a)
 Uninterrupted adverse possession for 30 years regardless of whether there was title or
good faith [extra-ordinary prescription]
 Public Land Act provides
(b) Those who by themselves or through their predecessrs in interest have been in open,
continuous, exclusive and notorious possession and occupation of aricultural land of
public domain, under a bona fide claim of acquisition of ownership for atleast 30 years
immediately preceeding the filing of 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 government grant and shall be entitled to
certificate of title under the provisions of this chapter
Art. 1138. In the computation of time necessary for prescription the following rules
shall be observed:
(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.
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FIRST RULE
 Present possessor may complete the period necessary for prescription by tacking his
possession to that of his grantor or predecessor in interest
 Grantor/Predecessor in interest = transfer in manner provided by law of property from
one person to another
 Tacking and possession is allowed only when there is a privity of contract/relationship
between previous and present possessors
 In absence of such privity, possession of new occupant should be counted only from
time it actually began and cannot be lengthened by connecting it with possession of the
former possessors
 Deed does not of itself create privity between grantor and grantee as to land not
described in the deed but occupied by grantor in connection therewith, although
grantee enters into possession of land not described and uses it in connection with that
conveyed.
 When grantor conveys a specific piece of property, grantee may not tack onto the period
of his holding an additional piece of property the period of grantor’s occupancy thereof
to make up the statutory period.
 Art 1135 : in case he adverse claimant possess by mistake an area greater or less than
that expressed in title: prescription based on possession.
SECOND RULE:
 Provides presumption that the present possessor who was also the possessor at previous
time have CONTINUED TO BE IN POSSESSION during intervening time. --- unless
there is proof to the contrary.
 There must be prior showing of fact that person possessing prop was also one in
possession of same before intervening time
 Presumption – rebuttable by showing the contrary
THIRD RULE: first day not counted and last day included.
CLASS NOTES : CHAN-G
 What if the grantor was in possession or a immovable property in bad faith for 24 years
and as the 2nd owner (person in possession, you acquired it by means of succession)
what is the period required to acquire it by ordinary prescription?[ you have good faith]
- 24/3 = 8 years : why divide by 3? Remember ordinary prescription of immovable
property is only 10 years but if there is no good faith, extra-ordinary prescription
would apply which requires 30 years.
- Period of ownership of an immovable is 3 x the period of an ordinary acquisitive
prescription.
- Therefore you only need 2 years, as a possessor of good faith to be able to acquire
property
CHAPTER 3: PRESCRIPTION OF ACTIONS
Art. 1139. Actions prescribe by the mere lapse of time fixed by law.
 Law fixes time within which an action may be filed.
 Period prescribed lapse = no action anymore
 However contractual stipulation of parties prevail over rules of prescription of actions
 Prescription of actions also apply only to civil actions and not the special proceedings.
 Criminal Actions – governed by RPC / special laws
Art. 1140. Actions to recover movables shall prescribe eight 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, and without prejudice to the provisions of Articles 559, 1505, and
1133.
 However if all the requisites of an ordinary acquisitive prescription of movable property
are present : Possessor = owner after only four years
 Ordinary prescription requires: (IJU)
1. Uninterrupted possession for required statutory period of years
2. In good faith
3. Just Tittle
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Art 1132 Ownership of movables : Art. 1143. The following rights, among others specified elsewhere in this Code, are not
Uninterrupted possession = 4 years in good faith extinguished by prescription:
Uninterrupted possession = 8 years (w/o any other condition)
Art 559 Possession movable property + Good faith = title (1) To demand a right of way, regulated in Article 649;
Lost/Unlawfully deprived -- may recover : person in possession
If possessor (movable lost/owner has been unlawfully deprived) : GF at public sale --- (2) To bring an action to abate a public or private nuisance.
cannot be returned w/o reimbursement of P.price
Art 1505 Good sold (not owner & no authority/consent of owner)
Buyer (no better title than seller) –Goods
UNLESS owner of goods BY his conduct : precluded from denying the seller’s  There can be certain actions which do not prescribe : action to declare contract null and
authority to sell void, quiet title initiated by person having possession of property, partition among co-
Art 1133 Movables possessed through crime CAN NEVER be acquired through prescription by heirs.
offender
 Prescription does not supervene when trust is MERELY an implied one UNLESS
expressly repudiated by trustee
Art. 1141. Real actions over immovables prescribe after thirty years.
Art. 1144. The following actions must be brought within ten years from the time the right
This provision is without prejudice to what is established for the acquisition of ownership and of action accrues: (JLW)
other real rights by prescription.
(1) Upon a written contract;
 Prescriptive period : Immovables = 30 years – right to sue prescribes with the
(2) Upon an obligation created by law;
acquisition of title
 Ordinary Prescription = 10 years + Uninterrupted + Adverse + Public + Possession in (3) Upon a judgment.
concept of an owner + Good faith
 Must be in writing
Art. 1142. A mortgage action prescribes after ten years.  It is important to reckon to date when right of action accrues as same is the beginning
for counting the 10 year prescriptive period
 Mortgage
 Right of action : cause of action with (RRV)
- Accessory contract
1. Right in favor of plaintiff by whatever means and under whatever law it arises or
- Constituted to secure a debt so that if the debtor fails to pay principal obligation,
created
creditor can foreclose on mortgage by selling the same in public sale/bidding
2. Obligation on part of such defendant to respect such right
- Proceeds : used to pay of (Principal debt + interest if any)
3. Act or omission on part of such defendant violate of such right of plaintiff
 Prescriptive period starts to run after mortgaged property had been foreclosed
 # 3 = cause of action arises
 Normally Implied trust whether constructive or resulting trust – not subject to
prescription
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 However if trustee openly and adversely repudiates trust, it is only from that time when  Example : Job = property protected from any arbitrary and unjust deprivation of job ;
prescription can set in. cause of action must be brought within 3 years.
 Before period of prescription may start, it must be shown that :  Art 2176 CC : whoever by act or omission causes damages to another there being fault
1. Trustee has performed unequivocal acts of repudiation amounting to ouster of or negligence is obliged to pay for the damage done. Such fault or negligence, if there is
cestui que trust 1
no pre-existing contractual relation between parties is called quasi-delict
2. Positive acts of repudiation have been made known to the cestui que trust  Quasi-delct : Period shall begin to run from day the action may be brought ; from day
3. Evidence : Clear and Conclusive quasi-delict occurred or was committed

Example : If land is granted to the use of A in trust for B, A is cestui que trust, and B trustee

Art. 1145. The following actions must be commenced within six years:
(1) Upon an oral contract;
(2) Upon a quasi-contract.
 Action based on oral contract must be commenced within 6 years from time the cause of
action accrues
 Certain lawful, voluntary and unilateral acts gives to the juridical relation of quasi-
contracts to the end that no one shall be unjustly enriched or benefited at the expense
of another.
 Ex: Solutio Indebiti occurs if something is received when there is no right to demand it
and it has been unduly delivered through mistake thereby giving rise to obligation to
return what has been unduly received.
Art. 1146. The following actions must be instituted within four years:
However, when the action arises from or out of any act, activity, or conduct of any public officer
involving the exercise of powers or authority arising from Martial Law including the arrest, detention
and/or trial of the plaintiff, the same must be brought within one (1) year. (As amended by PD No.
1755, Dec. 24, 1980.)
Art. 1147. The following actions must be filed within one year:
(1) For forcible entry and detainer;
(2) For defamation. (n)
 A Forcible Entry and Detainer is an action that a landlord, or new property owner can
take if the existing occupant refuses to leave after appropriate notice
 Defamation : The taking from one’s reputation. The offense of injuring a person's
character, fame, or reputation by false and malicious statements.(Black’s Law
Dictionary)

(1) Upon an injury to the rights of the plaintiff; Art. 1148. The limitations of action mentioned in Articles 1140 to 1142, and 1144 to 1147
are without prejudice to those specified in other parts of this Code, in the Code of
(2) Upon a quasi-delict; Commerce, and in special laws.

 Without prejudice –prescriptive period in this chapter may be availed of

nothwithstanding other special provisions in other parts of Civil Cde, Code of
1
right to a beneficial interest in and out of an estate the legal title to which is vested in another. 2 Waslib. Commerce and in Special laws.
Real Prop. 163. The person who possesses the equitable right to property and receives the rents, issues,
and profits thereof, the legal estate of which is vested in a trustee.
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 As a general rule, a statute of limitation extinguishes the remedy only. Although the
remedy to enforce a right may be barred, that right may be enforced by some other
available remedy which is not barred
Art. 1149. All other actions whose periods are not fixed in this Code or in other laws must
be brought within five years from the time the right of action accrues. (n)
Art. 1150. The time for prescription for all kinds of actions, when there is no special
provision which ordains otherwise, shall be counted from the day they may be brought.
 All actions unless an exception is provided have a prescriptive period. UNLESS law
makes an action imprescriptible , it is subject to bar by prescription and the period of
prescription shall be 5 years from time right of action accrues when no other period is
prescribed by law.
 Moreover, mere fact that supposed violation of petitioner’s right may be a continuous
one does not change the principle that the moment the breach of right or duty occurs,
right of action accrues and action from that moment can be legally instituted.
Art. 1151. The time for the prescription of actions which have for their object the
enforcement of obligations to pay principal with interest or annuity runs from the last
payment of the annuity or of the interest.
Art. 1152. The period for prescription of actions to demand the fulfillment of obligation
declared by a judgment commences from the time the judgment became final.
 It is only when judgment becomes final hat the same can be effectively enforced.
 Prescriptive period shall be counted from time it becomes final. NOT when it is
rendered
Art. 1153. The period for prescription of actions to demand accounting runs from the day
the persons who should render the same cease in their functions.
The period for the action arising from the result of the accounting runs from the date
when said result was recognized by agreement of the interested parties.
 In the first case: period runs from date the person who should render the same cease in
their functions (date accounting have been rendered)
 Second case: from date the result was recognized by agreement of interested parties.
 There is no difference between actions for accounting and reliquidation since both
involve the determination, adjustment and settlement of what is due to parties under
law.
Art. 1154. The period during which the obligee was prevented by a fortuitous event from
enforcing his right is not reckoned against him.
 Similar to Article 1136 .
 GR: Existence of fortuitous event relieves the obligor from the liability that might
otherwise arise in the breach of an obligation or excuse an obigee from his failure to
exercise a right that right otherwise constitute a waiver of said right. Hence, time
covered by fortuitous event is not reckoned against the oblige in the computation of
period of prescription.
 Other examples : war + civil courts are closed, court order deferring action on the
execution of judgment, prescriptive period to institute foreclosure proceeding by a
mortgagee-bank was held legally interrupted when bank was placed under receivership
by Central Bank with express prohibition from transacting business.
 Effect of interrupting running of prescriptive periods. /Suspension of running of
prescriptive period.
Art. 1155. The prescription of actions is interrupted when they 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
 The prescription of an action is interrupted in any of the 3 cases specified in Art 1155
1. Filed of an action
2. Written extrajudicial demand by creditor
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3. Written acknowledgement of debt by debtor - Partial payment before period has elapsed is undoubtedly an implied
 This means that period of prescription begins to run anew, and whatever time of acknowlegdement of debt. However present civil code requires that it be written
limitation might have already elapsed from the accrual of cause of action is thereby unlike old—well, in this case, it may amount to a tacit renunciation of prescription
negated and rendered inefficacious. already obtained.
 This does not mean that prescription will not run anymore.
 Effect of interruption = wipe out the period that has already elapsed and make the SUMMARY
SUBJECT PERIOD
period start anew from the date of interruption (Ledesma v. CA)
 Under Civil Code, prescription of an action refers to time within which an action must
be brought after right of action has accrued.
(1) Filling of an action in court
- Necessary that action is filed prior to expiration of applicable limitation period.
- Civil actions are deemed commenced frm date of filling and docketing of complaint
with the Clerk of Court without taking into account the issuance of service of
summons.
- Commencement of court action stops running the statute of limitations
- Even if the right of action in civil law arises from criminal action, prescriptive
period is still interrupted by filing of criminal action
- Interruption lasts during pendency of action. The full time for the prescription
must be recknoned from the cessation of interruption. In computing the running of
prescriptive period, time that has already elapsed prior to filing of subsequent
action should be deducted from full period within which proper action should be
filed.
(2) Written Extrajudicial demand by the creditor
- Must be in writing and made before exprition of period fixed by law.
- Wipes out period that has already elapsed and starts anew the prescriptive period.
- Written extrajudicial demand addressed to co-debtor will not interrupt the
prescription as to other debtor who did not received demand.
- Talks about pre-existing obligation. There is already a debtor and creditor
(3) Written acknowledgement of debt by debtor
- Not all acts of acknowledgement of debt interrupt prescription.
- Acknowledgement must be written , if not coupled with communication signed by
payor would not interrupt running of period of prescription
- Written offer of payment works as a renewal of obligation and prevents
prescription from setting in.