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BERSAMIN CASES IN CIVIL LAW

Prof. Elmer T. Rabuya

October 23, 2017

Arellano University Law School

The decisions of Justice Bersamin are rich sources of bar examination questions.

HEIRS OF MARIO MALABANAN V. REPUBLIC OF THE PHILIPPINES

704 SCRA 561 (2013)

The original decision was penned by Justice Tinga in 2009 but there was a Motion for Reconsideration
decided in 2013 by Lucas Bersamin. In the 2013 decision, Justice Bersamin made the following
classifications of land: from the point-of-view of Ownership and point-of-view of Alienability.

From the point-of-view of Ownership, lands are classified either as:

(1) Public Dominion or


(2) Private Ownership
Basis of the classification or Governing Law: the Civil Code.

Q: What are those lands which are Property of Public Dominion?

A: Those which are intended for (1) Public Use, (2) Public Service, or (3) for the Development of Natural
Wealth.

Q: What are those lands in Private Ownership?

A: The Patrimonial Property of the State are private properties, private ownership, as well as those which
are owned which are owned other than the state as well as other than provinces, cities, municipalities;they
are altogether referred to as private Ownership.

In the same case, Lucas Bersamin classified lands from the Point-of-View of Alienability but this time,
basis is the 1987 Constitution. Under the Constitution, lands are classified into 4 groups:

(1) Forest/Timber Lands,


(2) Mineral Lands,
(3) Agricultural Lands,
(4) National Parks.
Of those four, only AGRICULTURAL LANDS have been declared by our Constitution as alienable; the
others are inalienable.

Q: What are the 2 categories of Alienable or Disposable Lands of the State?

A: First, (1) Patrimonial Lands of the State or lands classified as private ownership of the State.

Second, Lands of the (2) Public Domain as provided for by the Constitution but with the limitation that
the land must only be agricultural.

Those that are already converted into Patrimonial and those NOT converted yet as Patrimonial but already
DECLARED as alienable and disposable limited only to AGRICULTURAL.

Q: You know that it is the Executive given the power to re-classify lands into agricultural.

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So how and when may PUBLIC LANDS be converted into Patrimonial Lands?

A: WHEN:

If the public land has not yet been classified either as forest, mineral, agricultural or as a national park,
walasiyang classification, puedesilai-convert into Patrimonial Property.

When the public land is no longer intended for public service, public use or development of national
wealth, puedenasilai-convert into Patrimonial.

HOW:

There must be an EXPRESS DECLARATION in the form of a law passed by Congress or in the form of
a Presidential Proclamation in those cases where the President has been authorized by Congress to do so.
Until this is done, the Regalian Doctrine will be applicable.

NOTE: Important provision for this year’s Bar Examination:

SECTION 14 OF THE PROPERTY REGISTRATION DECREE.

Let’s distinguish Paragraphs 1 and 2 of the SECTION 14 of the Property Registration Decree.

Section 14 (1)

 Also known as Judicial Confirmation of Imperfect Title


 Basis of Registration: POSSESSION and OCCUPATION
 The registration is by virtue of Property Registration Decree in relation to the provisions
of the Public Land Act.
 Reckoning Date:June 12, 1945
The Possession and Occupation is REQUIRED to take back to that date. This
date is material only in Paragraph 1 or Judicial Confirmation of Imperfect Title

 Scope: Applies only to Alienable and Disposable Lands of the Public Domain.
Hence this section is applicable only to AGRICULTURAL lands

declared alienable and disposable.

Does not cover timber or forest lands, mineral lands or national parks.

Does not apply to Patrimonial Property or Private Ownership by the State.

 Requisites of Registration under Paragraph 1:


(1) The Nature of Possession which is required for purposes of Acquisitive Prescription
- Concept of possession
which is possession must be in the Concept of an Owner: notorious, public,
open, continuous, peaceful
(2) That the Land must be Alienable and Disposable

- Must be Agricultural Lands declared alienable and disposable,

(3) The possession and occupation must have dated back to June 12, 1945
or earlier.

If all of these requisites are present, then the property ceases to be part of the lands of the public domain
and automatically becomes Private Ownership hence what is needed is just to confirm the Imperfect Title
of the Applicant.

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Section 14 (2)

 Basis of Acquisition of Ownership: PRESCRIPTION


 The basis of registration is the Civil Code in relation to the Property Registration Decree.
 Period material is 10 years or 30 years depending on presence of Good Faith and Just
Title.
If both are present, 10 years.

In any other event, the period is 30 years.

 Scope: Applies ONLY to Patrimonial Lands of the State.


 3 Requisites:
(1) Land must be alienable and disposable Patrimonial Property of State
(2) Period of Possession be either 10-years (Good Faith and Just Title present) or 30-
years (if no Good Faith or Just Title)
(3) Property must be Patrimonial during the ENTIRE 10- or 30-year Period

The requisites of Registration under Section 14 (1) is actually the issue in the Malabanan Case.

Q: Is it necessary under Paragraph 1 of Section 14 of the Property Registration Decree that the land must
have already been declared as alienable and disposable as of June 12, 1945?

A: NO.

What is required of the applicant is that his possession or the possession of by his predecessor-in-interest
must date back to June 12, 1945.

The requirement that the land be declared as alienable and disposable is required only at the time of the
filing of the application.

Hence, is it not necessary that the land must have been declared alienable and disposable as of June 12,
1945; it is sufficient that the land is classified as such at the time of the filing of the application.

Q: In the case at bar, the State, through OSG, wants thealienability and disposability to also date back to
June 12, 1945. Is the State position tenable?

A: NO.

The Supreme Court ruled that if such is followed, the law “will become absurd.” If the land if it will be
required that the land be also alienable and disposable as of June 12, 1945, there will be no application
that may be possibly approved under the Judicial Confirmation of Imperfect Title.

DOCTRINE: The requirement that the land be alienable and disposable must be present only at the time
of filing of the application.

Q: Effect of Compliance?

A: With Paragraph 1, by legal fiction, the land has ceases to be part of the Public Domain and it has
become Private Property from the moment all requisites are present.

Q: Are the Patrimonial Properties of the State susceptible to Acquisitive Prescription under the Civil
Code?

A: YES.

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Let’s clarify: we have the 2003 decision Francisco Alonzo v. Cebu Country Club (G.R. No. 130876), an
en banc case saying the possession of the such Patrimonial Property of the State, whether spanning
centuries or decades, cannot ripen into ownership by way of acquisitive prescription.

BUT in 2009 Heirs of Malabanan v. Republic, another en banc case, this time Supreme Court held that
Patrimonial Property of the State ARE SUSCEPTIBLE to Acquisitive Prescription citing Art. 1113 of the
Civil Code.

The decision in Malabanan has been reiterated in several other cases so it appears the controlling
doctrine/ruling is now the Malabanan Case.

DOCTRINE: The Patrimonial Property of the State can be acquired by way of acquisitive prescription
and precisely, that is the mode of acquisition of ownership under Paragraph 2, Section 14 of the Property
Registration Decree.

Q: If Agricultural lands have been classified as alienable and disposable, can they now be acquired
through prescription under the Civil Code and be registered under Section 14 (2) of the Property
Registration Decree?

A: NO.

Notwithstanding the fact that agricultural lands have been declared as alienable and disposable, they will
continue to be classified as Property of Public Dominion. This is another important ruling to the
Malabanan Case.

Prior to this case, we only have an opinion in the book of Senator Tolentino: With respect to agricultural
lands, they are classified as Property of Public Dominion prior to them being declared as alienable and
disposable. Once they are declared alienable and disposable, they become Patrimonial Property of the
State.

This opinion was not sided upon by the Supreme Court in the Malabanan Case.

DOCTRINE: Even if agricultural lands have been declared alienable and disposable, they will continue to
be classified as Property of Public Dominion.

Q: So how do you convert agricultural lands declared alienable and disposable to Patrimonial Property?

A: There must be an EXPRESS DECLARATION whose tenor may either be (a) that such are no longer
intended for public service or development of national wealth or (b) such are expressly being converted
into Patrimonial Property.

Recall that in the previous case of Laurel v. Garcia, our guiding case on the matter of converting property
of public dominion into patrimonial, there are 2 requirements for converting property from Public
Dominion to Patrimonial:

(1) There must be abandonment


The property must no longer be in use for purposes for which it was originally intended.

(2) There must be a positive act of their conversion into patrimonial


That positive act can come either from executive or legislative

Generally before, that positive act is not generally required to be in a form of a law.

NOW, there is an EXCEPTION in relation to Agricultural Lands which have been


declared alienable and disposable; they can only be converted into patrimonial by way of an
express declaration in the form of a Law passed by Congress or a Presidential proclamation if the
President has been expressly authorized by Congress to do so.

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DOCTRINE: To convert Agricultural Lands of the Public Domain declared alienable and disposable to
Patrimonial Property, there must be an EXPRESSDECLARATIONand the manner of conversion is by
way of a (1) LAW passed by Congress or (2) PRESIDENTIAL PROCLAMATION, in cases where the
President has been expressly authorized by Congress to do so.

Q: When a property has been converted from Public Dominion to Patrimonial, can we use the Possession
prior to conversion and add it into the 10- or 30-year period?

A: NO.

During the time the subject property was still Property of Public Dominion, prescription DOES NOT run
against the State; such cannot be acquired as yet by way of prescription because only Patrimonial
Property may be acquired by way of acquisitive prescription.

In other words, in the entire 10- or 30- year period, the property MUST be Patrimonial.

So if given the problem that a person has been in possession for 35-years but the first 10-years, Public
Property of Public Dominion pa siya, nagkaroonlang ng conversion on the 11th year, nag-prescribe na?
Hindi puede, kulangyung period.

The case of Malabanan involved an application for registration of a land in Silang, Cavite, and the claim
of the applicant is that he has been in possession of that land for more than 30 years and such land has
already been classified as alienable and disposable.

Malabanan, the petitioner, has been able to prove that the property has been classified as alienable and
disposable in 1982. The application was filed in 1988 so at the time of application, the property has
already been declared alienable and disposable. What Malabanan failed to prove was that his possession,
or the possession of his predecessors-in-interest dated back to June 12, 1945. With this, the Supreme
Court denied the application under Paragraph 1.

How about Paragraph 2? Also denied. How come? There was no showing that the property was
converted into Patrimonial. The Supreme Court held that the fact that the property is already alienable
and disposable does not mean it is now Patrimonial; it continues to be a property of public dominion. To
convert it to Patrimonial, again, there must be an EXPRESS DECLARATION and the manner of
conversion is by way of a LAW passed by Congress or PRESIDENTIAL PROCLAMATION, in cases
where the President has been expressly authorized by Congress to do so.

In essence, this is the 2009 Malabanan Case. In the Motion for Reconsideration, the Supreme Court
simply reiterated that there must be an express declaration of such conversion in the form of a law, in the
absence of such declaration, such lands will continue to be Property of Public Dominion.

Q: In order to prove that the land has already been declared alienable and disposable, what are the
documentary requirements? Will certification by BENRO(?)or Community Environment and Natural
Resources Offices(CENRO)be sufficient?

A: NO.

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It is the DENR Secretary who approves declarations that Agricultural Lands are now Alienable and
Disposable. Original classification as approved by the DENR Secretary must be presented.

So when you practice, you must present two things as proof:

(1) Original Classification as approved by the DENR Secretary declaring such Agricultural Lands as
Alienable and Disposable. (present the Certified True Copy)
(2) In addition to that, the certification coming from CENRO or BENRO(?)stating that agricultural
property has already been declared alienable and disposable.

Other LTD Decisions of Bersamin:

CUSI V. DOMINGO

692 SCRA 277 (2013)

Q: Is the presentation of the Original Tracing Cloth mandatory?

A: YES.

But as held inRepublic v. Almar (?), if the original Tracing Cloth is not presented, Section 17 of the
Property Registration Decree allows the Approved Plan and the approved Technical Description,
approved by Bureau of Lands now Land Management Services, are sufficient to identify the land and
hence, may take the place of the original Tracing Cloth plan.

Q: In Cusiv. Domingo, what is the Curtain Principle in Land Registration?

A: The principle in the Torrens Registration Systemthat basically says thatordinarily,we are allowed to
rely on the Certificate of Title or the four corners of the titleIF there is nothing in the circumstances of the
case that should arouse our suspicion.

In Cusi, it involved a re-issued Title.

Q: What is a re-issued title?

A: Replacement of lost Owner’s Duplicate Copy of a Title.

There are two copies to a Title: (1) Registrar’s Copy and (2) Owner’s Copy.

If what is lost is the Owner’s duplicate copy, the process of asking for another copy of that is referred to
as a Re-issuance of Title.

If what’s lost is the Registrar’s copy, the process of replacing the lost Registrar’s copy is called Re-
constitution of Title.

But whether it is a Re-issuance or Re-constitution, the nature of both are the same: to replace anoriginal
Title lost.

Q: If you are dealing with either a Re-constituted or a Re-issued Copy of the Title, can you still rely on
the Curtain Principle?

A: NO.

If you are dealing with such, you cannot simply rely on the four corners of the title under the Curtain
Principle. The nature of a Re-constituted Title is similar to that of a second Owner’s Duplicate/Transfer
Certificate of Title. Anyone dealing with such copiesare put on notice of such fact and they are
WARNED to be EXTRA CAREFUL.

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DOCTRINE (Jusi Case): If you are dealing with a Re-constituted Copy or a Re-issued Copy of the Title,
you cannot simply rely on the Curtain Principle but are warned to be extra careful.

INTERNATIONAL HOTEL CORPORATION V. JOAQUIN, JR.

695 SCRA 382 (2013)

Q: What is the Doctrine of Constructive Fulfillment of Suspensive Condition?

A: The Provisions of Art. 1186 of the NCC.

Under Art. 1186 NCC, if the Debtor intentionally prevents the fulfillment of a Suspensive Condition, that
suspensive condition is deemed to have been constructively fulfilled.

Q: When does one apply Art.1186 of the NCC?

A: Art. 1186 NCC is NOT applicable if the fulfillment of the suspensive condition is entirely, wholly
dependent upon the will of the Debtor. Why?If the fulfillment of the Suspensive condition is dependent
Exclusively orEntirely upon the Debtor’s will, the Obligation is Void (Art. 1182 NCC).

Art. 1186 NCC is applicable only in a MIXED CONDITION where a PART of such condition
isdependent on the (1) Will of the Debtor AND partly dependent EITHER (2) upon Chance or (3) upon a
Third Person; if mixed condition, obligation is valid.

In Art. 1186 NCC, what is declared is only a CONDITION the fulfillment of which is exclusively
dependent upon the Debtor’s will.

In a mixed condition, where the condition is made to depend partly on debtor’s will and partly upon
chance or a Third person, the obligation now becomes valid. That is where we will be applying Art.
1186 NCC. In a mixed condition,where partly is made to depend partly upon the will of the debtor. If the
Debtor voluntarily prevents thefulfillment of the suspensive condition, which is dependent on his part
pursuant to Art. 1186 NCC, that condition is deemed to have been constructively fulfilled.

Q: What are the requisites of the Doctrine of Constructive Fulfillment of a Suspensive Condition under
Art.1186 NCC?

A: The requisites are:

(1) There must be an intent on the part of the debtor to prevent the fulfillment of the condition; and,
(2) There must be an actual prevention of its fulfillment

Now, is the new rule introduced by Justice Lucas Bersamin. He gave a title to the rule: Constructive
Fulfillment of a Mixed Conditional Obligation

Q: What are their similarities/differences?

Doctrine of Constructive Fulfillment of a Suspensive Condition

versus

Doctrine of Constructive Fulfillment of a Mixed Conditional Obligation

A: Similarity:Both applicable to a mixed conditional obligation

Difference:

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In Art. 1186 NCC under the Doctrine of Constructive Fulfillment of a Suspensive Condition, it is the
DEBTOR who voluntarily PREVENTS the fulfillment of the condition. Pursuant to this doctrine, the
condition is deemed to have been complied with constructively.

But under the Rule of Constructive Fulfillment of a Mixed Conditional Obligation, the DEBTOR DID all
in his power to COMPLY with the condition except that the condition was NOT fulfilled because the
condition was ALSO dependent upon chance or upon the will of a third person, thecondition is also
deemed to have been fulfilled BUT under the Rule of Constructive Fulfillment of a Mixed Conditional
Obligation.

Under the rule of Constructive Fulfillment of a Mixed Conditional Obligation, the obligor did all in his
power to comply with the obligation but the condition was still not fully complied with because of chance
or the will of a third person. Under this doctrine, the condition is deemed to have been complied with.

In the case, Joaquin and Suarez submitted a proposal to International Hotel to render technical assistance
in obtaining foreign funding for the construction of a hotel of International Hotel Corporation. For a
consideration, they will obtain that foreign funding. Joaquin and Suarez submitted certain names of
possible foreign funding, one of them was Weston.

Instead of negotiating with Weston, International Hotel chose to negotiate with someone else (Barnes)
and to meet foreign funder’s requirement, International Hotel secured a guarantee from a local bank.
During negotiations, International Hotel secured a Letter of Guarantee from DBP (Development Bank of
the Philippines) in favor of Barnes. The negotiations with Barnes did not push through. When DBP was
informed that negotiations failed, DBP cancelled said Guarantee Letter.

After that, International Hotel Corporation decided to talk to the foreign funder recommended by Joaquin
and Suarez, Weston. This time, negotiations were successful that Weston was willing to provide the
necessary funds. Pursuant to Weston’s requirement, International Hotel applied for another Letter of
Guarantee from DBP but the latter does not wish to issue such anymore. In short, the foreign funding did
not push through.

Due to this development, International Hotel took back initial payment from Joaquin and Suarez. The
latter demanded compensation for what they did because they contest that the negotiations were
successful, Weston was willing to fund the hotel project.

RTC and CA Ruling? Yes, International Hotel is liable to Joaquin and Suarez under the Doctrine of
Constructive Fulfillment of a Suspensive Condition. At the same time, CA also applied Art. 1234 NCC,
that in case of substantial fulfillment in good faith, the debtor is considered released from his obligation.
Q: Is the appellate court correct on applying the Doctrine of Constructive Fulfillment of a suspensive
Condition?

A: NO.

International Hotel only relied on the opinion of its consultants when it decided to transact with Barnes
instead of Weston.International Hotel had NO INTENTION in preventing the fulfillment of the condition
so therefore the Doctrine of Constructive Fulfillment of a Suspensive Condition does not apply.

Requirements of Doctrine of Constructive Fulfillment of a Suspensive Condition are:

(1) there must be an INTENTION on the part of the debtor to prevent the fulfillment of the condition;
and,
(2) there must be an ACTUALPREVENTION of its fulfillment.

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Q: Is Art. 1234 NCC applicable in this case? May the Doctrine of Substantial Performance in Good Faith
be invoked by Joaquin and Suarez to make IHC liable to them?

A: NO.

Because under the Doctrine of Substantial Performance in Art. 1234 NCC, the performance was
incomplete, the performance was only substantial. There must be a portion of the obligation that was not
performed. The Court held that such omission or deviation must be a SLIGHT or technical or
unimportant part of the obligation.If that missing part is a material breach of the obligation, the Doctrine
of Substantial Performance in Good Faith under Art. 1234 NCC does not apply.

The obligation of Joaquin and Suarez is to provide foreign funding. Such did not materialize. Such is a
material breach because that was the essence of the agreement.

Nevertheless, the Supreme Court held that IHC is liable to pay Joaquin and Suarez under the Rule of
Constructive Fulfillment of a MiXed Conditional Obligation. In a mixed conditional obligation which is
valid, if the debtor did all in his power to comply with the obligation but the condition was not fulfilled by
reason of chance or of a third person, the condition is deemed to have been constructively fulfilled.

Q: Is Joaquin and Suarez entitled to full payment?

A: NO.

They were not able to provide foreign funding. They are entitled to payment under the Principle of
Quantum Meruit (as much as he deserves);reasonable value for their services.

FIRST UNITED CONSTRUCTION CORPORATION V. BAYANIHAN AUTOMOTIVE


CORPORATION

713 SCRA 354 (2014)

Remember: your claim for Breach of Warranty must arise out of the same transaction where the seller is
recovering the purchase price.

FUCC purchased six (6) units of dump trucks from Bayanihan between May 27 and July 8, 1992; full
payment for this transaction was done.

In September 1992, FUCC purchased again two (2) dump trucks, this time paying partly in cash and
partly in post-dated checks. When seller tried to encash said checks, they discovered there was a stop-
payment order by FUCC. The reason for such was that a dump truck unit purchased by FUCC in the first
transaction (May 1992) bogged down and FUCC incurred expenses with the repair of said unit.

Q: Can one set up the Liability of the Seller for breach of warranty for one transaction (first transaction
made in May 1992, purchase price already paid) in another transaction (second transaction made in
September 1992) under the Concept of Claim for Breach of Warranty?

A: NO.

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It is improper for FUCC to set up its claim for repair expenses and other spare parts of the dump truck
purchased in May 1992 against remaining balance on the price of the trucks purchased in September
1992. Recoupment must arise out of the SAME CONTRACT or TRANSACTION upon which the
plaintiff’s claim is founded. To be entitled to recoupment therefore, the claim must arise from the same
transaction or contract, meaning the Sept 1992 transaction which is the subject matter for the claim of
recovery of payment

Q: What are the requisites of Legal Compensation?

A: There are five requisites:

(1) They are creditors and debtors of each other in their own right
(2) They are creditors and debtors of each other as principals
(3) That both debts consist of a debt in sum of money or if the things due are consumable, they be of
the same kind and quality
(4) That debts be both due, liquidated and demandable
(5) That in neither of them there be a controversy or retention commenced by a third person and
communicated in due time to the debtor

Q: Can the claim of FUCC be legally compensated with the claim of Bayanihan for recovery of the
purchase price? Will the concept of Legal Compensation be applicable?

Bayanihan contests it’s not applicable because claim of FUCC is not yet liquidated.

RTC and CA decision are the same as to the amount.

A: That decision of both RTC and CA as to the amount of the claim of FUCC on the amount of repair
claims in connection with the breach of warranty of sale had already become liquidated. Such decision
supported with the evidence presented is binding upon the Supreme Court hence the Court ruled that all
the requisites of legal compensation are now present; claim of FUCC now considered liquidated.

ARADO V. ALCORAN

762 SCRA 37 (2015)

Raymundo married Joaquina and they bore a son, Nicolas. Nicolas wedded Florencia but they didn’t
have any offspring. Nicolas had illicit relations with Francisca and this bore an illegitimate child,
AnacletoAlcoran. In the birth certificate of Anacleto, Nicolas was named as the father but the certificate
was not signed by Nicolas. In that case, it was proven that it was Nicolas who registered the birth
certificate of the child in the Civil Registry.

Raymundo died in 1939 prior to the effectivity of the New Civil Code.

Side topic: If asked what is the effect of Raymundo’s death in relation to succession:

The only heir of Raymundo is Nicolas because under the Old Civil Code, the surviving spouse is only
entitled to a right of usufruct; usufructuary right langmamanahin ng surviving spouse.

But puedenamanibahinyan ng examiner. If Raymundo died during the New Civil Code, both the child
and the surviving spouse will be the legal heirs; one half will go to Nicolas and the other half, to the
Joaquina.

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Now, Nicolas died ahead of his mother, Joaquina.

Q: Who are the legal heirs of legal heirs?

A: Those alive: his mom, his wife.

Q: How about the illegitimate child? Can the illegitimate child inherit from Nicolas?

A: Only if the illegitimate child can establish his illegitimate filiation with the deceased.

Q: May the illegitimate child establish his illegitimate filiation with the deceased when the only proof of
filiation is the birth certificate where the signature of the illegitimate father does not appear but
nevertheless, it was the father who was shown to have caused the registration of the birth certificate with
the Civil Registry?

A: YES.

In a situation where it was the illegitimate father who registered the birth certificate of the child, the
illegitimate father is deemed to have participated/to have been involved/had a hand in the preparation of
the birth certificate. Hence, such birth certificate is a competent evidence of paternity against the father.

Recall that the rule requires the father’s signature but even if no signature appears on the birth certificate,
so long as the father had participated/had a hand/he was involved in the preparation of the birth
certificate, that birth certificate is still a competent evidence of paternity against the father.

Two cases are outstanding on this issue.

In Elano v. CA where it was the illegitimate father who supplied all the information. When the nurse
was filling out the information of the birth certificate, it was the illegitimate father supplying all the
details needed except that he failed to sign so the Supreme Court held that since it was the father who
supplied all the information, he is deemed to have been involved in the preparation of the birth certificate
therefore that can be used as evidence of paternity against him.

But in this case of Arado v. Alcoran, it was not the father who supplied the information but he was the
one who registered the birth certificate of the illegitimate child in the Civil Registry. His name was the
one appearing as the informant in the Civil Registry. The Supreme Court held that he is deemed to have
participated/to have been involved in the birth certificate so that birth certificate is a competent evidence
of paternity against the deceased father.

Q: Can the child be allowed to prove illegitimate filiation after the death of the illegitimate father?

A: YES.

That birth certificate is an evidence and proof under paragraph 1; even if it does not contain the signature
of the father, the Supreme Court held that will amount to deltarirecognition(?) so in that case, the child
was allowed to prove his illegitimate filiation with the illegitimate father using the birth certificate. He
was allowed to establish his illegitimate filiation even after the death of the illegitimate father.

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Q: Who are the legal heirs of Nicolas?

A: The ascendant mother, the surviving spouse and the illegitimate child.

Q: How will the estate be divided?

A: If intestate succession:

One half: to the mother, ascendant

One fourth: to the surviving spouse

One fourth: to the illegitimate child

Q: The grandmother, Joaquina, died in 1981. Can the illegitimate child represent his illegitimate father
with respect to the estate of the grandmother, Joaquina, who died without a will? In this case, the court
declared Joaquina’s will as not approved.

A: Barrierhood.

Art. 992: An illegitimate child cannot inherit ab intestato from the legitimate relatives of the parents and
vice versa, the legitimate relatives of the parents cannot likewise inherit from the illegitimate child. Take
note that in this case, Nicolas is a legitimate child of Joaquina so therefore, the barrier rule is applicable.

Applying the Barrier Rule, the illegitimate child cannot represent his illegitimate father with respect to the
inheritance left by the legitimate grandmother. Bawal. Why?

In representation, the representative does not inherit from the person represented but in fact, the
representative inherits from the person from whom the person represented would have inherited. So
dapattagapagmanasiAnacletoniJoaquina and under the law, hindi because of the Barrier Rule.

Q: So who are the legal heirs of Joaquina? In this problem, Joaquina was survived only by her siblings.

A: The closest relatives, the collateral blood relatives: the siblings of Joaquina.

HEIRS OF PROTACIO GO, SR. AND MARTA BAROLA V. SERVACIO

657 SCRA 10 (2011)

This case will involve the application of the Art. 130 of the Family Code.

Recall that under Art. 130, if death is the reason for the termination of the conjugal partnership of gains,
the law mandatorily requires a liquidation of the conjugal partnership within a period of one (1) year from
the death of the spouse.

Whether it is Absolute Community or Conjugal Partnership of Gains, if the reason for the termination of
the property regime is death, there is a mandatory requirement for liquidation within a period of 1 year.

It’s NOT 6 months, it’s one (1) year.

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If you check website of The Official Gazette, Arellano Lawphil, the period appearing is 6 months. Error
in copying/printing yon.Nagkamaliang Rex Bookstore when they came up with a copy of the codal.Use as
basis the printed version of the law as it was published in the Manila Chronicle on August 4, 1987. In the
publication of the law: 1 year, 1 year. No mention of 6 months. So in Article 130 FC, there is a
mandatory requirement of liquidation with 1 year from death of spouse.

What are the effects for failure to liquidate with the 1 year period after death?

Two effects:

(1) If the surviving spouse contracts another marriage, the subsequent marriage will be governed by a
property regime of Complete Separation.
(2) Any disposition or encumbrance of any conjugal property is declared by Article 130 FC to be
void.

Protacio and Marta married during the Civil Code without a marriage settlement so their property regime
is Conjugal Partnership because such is the property regime that applies by default under the Civil Code.
In 1976, Protacio acquired two parcels of land so that property was acquired during the marriage so
presumed Conjugal. In 1987, prior to the effectivity of the Family Code/during the Civil Code, the wife
died. In 1999, during the effectivity of the Family Code, the husband and one of several children sold a
conjugal property without the liquidation of the conjugal partnership. The other children questioned the
validity of the sale invoking Article 130 FC.

Q: Is the sale void because the sale was made in the absence of liquidation of the conjugal partnership? Is
the rule under Article 130 FC declaring void any disposition or encumbrance of any conjugal partnership
property without prior liquidation upon the death of one of the spouses applicable to conjugal partnership
established during the effectivity of the Civil Code?Is Art. 130 applicable to Conjugal Partnerships
established during the Civil Code?

A: YES.

Because of Article 105 FC. The provisions on Family Code are applicable also on Conjugal Partnerships
already established during the Civil Code but there are limitations: provided that rights already
acquired/existing under the Civil Code or other laws cannot be impaired.

So that is the rule in Art. 105 FC.

Before the rule in Art. 130 FC can be applied to Conjugal Partnerships established during the Civil Code,
it is necessary that the conjugal partnership of gains MUST STILL SUBSIST during the Family Code.

In order for Art. 130 FC to apply to Conjugal partnerships established during the Civil Code, it is a
requirement that such partnership MUST STILL BE SUBSISTING during the Family Code.

Here, the Conjugal Partnership was already terminated in 1987 upon the death of the wife, DURING the
Civil Code/BEFORE the Family Code so following the pronouncement of the Court, Art. 130 FC cannot
be applied.

In other words, Art. 130 FC would have been applicable HAD the wife, Marta, died DURING the
effectivity of the Family Code paving the way for declaration of sale as VOID.

In this case, both Death AND Sale must all occur during the Family Code to apply Art. 130 FC.

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Q: So in this situation where Art. 130 is not applicable, what are the rules applicable?

A: In 1987 when the wife died, the conjugal partnership was already terminated. The conjugal
partnership should have been liquidated at that time. Upon the death of the wife, the shares of the wife of
the conjugal partnership will form part of her estate and that will be inherited by the wife’s heirs – her
surviving spouse and her children. Since there was no settlement of the estate of the deceased/prior to the
settlement of the estate of the deceased, the heirs of the deceased will be considered as Co-owners of her
estate. So what exists in the case is an implied co-ownership over the estate of the deceased because
there was no actual liquidation within the allowed period after her death and no settlement on the estate of
the deceased.

So the heirs are considered as co-owners of the deceased.

Hindi lang yon, di ba may share din yung husband in the conjugal partnership kaya langwalang
liquidation so the shares of the husband are ALSO included in the co-ownership because there was no
partition yet, no liquidation yet in the conjugal partnership.

Q: So what is the rule in co-ownership even if a co-owner will dispose of a concrete or definite portion?

A: The sale is not void.

Although the co-owner does not have a right over a concrete or definite portion, nevertheless, the
Supreme Court did not declare the sale as void. The Court ruled, in a number of cases, that the sale is still
valid.

Q: How come?

A: The Supreme Court relied on the rule in Contract Interpretation: as much as possible, avoid declaring a
contract invalid if there is a legal way of sustaining its validity.

Q: In that situation, what is the legal way of sustaining the validity of the transaction?

A: Co-owner can sell his Ideal Share in the co-ownership. In cases where a co-owner has disposed a
concrete or definite portion of the co-owned property, the Supreme Court merely treated the sale as the
sale of his Ideal Share.

Effect? Buyer will NOT become the owner of the concrete portion sold to him, he will only get the Ideal
Share of the selling co-owner making the buyer one of the co-owners.

PERENA V. ZARATE

679 SCRA 208 (2012)

This is another important case of Bersamin because here, he settled the question of whether school buses
are private carriers or common carriers.

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Q: Distinguish a private carrier from a common carrier.

A: Private Carrier is not actually/engaged in the business of transporting goods or persons and he does not
hold himself out to the public as being engaged in such business except by some special arrangement, he
agrees to transport either goods or persons for either a fee or even without consideration. Here, applicable
law is the New Civil Code. This type is required to observe only ORDINARY diligence of a good father
of the family.

Common Carrier is engaged in the business of transporting good or persons or he is holding himself out to
the public as being engaged in such business. Here, the governing law is the New Civil Code in relation
to the Public Service Act and other allied laws/laws on transportation. This type is required to observe
EXTRA-ORDINARY diligence.

Q: What is the test in determining whether a carrier is Private or Common?

A: The true test is not the quantity or the extent of the business actually transferred/transacted or the
number or character of the conveyance used in the activity but whether the undertaking is part of the
activity engaged in by the carrier or that he has held himself out to the public as being engaged in that
business or occupation.

Q: Are operators of school buses common carriers?

A: YES.

Although in this jurisdiction, operators of school buses have always been regarded as Private Carriers
primarily because they only cater to specific and privileged individuals, it is time for the Court to lay the
matter to rest. The Supreme Court categorically ruled that operators of school buses are Common
Carriers because they are engaged in transporting passengers generally as a business, not just as a casual
operation; secondly, they are undertaking to transport passengers over established routes by the method
by which the business was conducted; finally, they are transporting students for a fee. So despite
catering to a limited clientele, they operate as a Common Carrier because they are actually engaged in the
business of transporting students or they are holding themselves out to the public as being engaged in
such business.

The driver of the school bus deviated from the original route because they were running late. The driver
followed another route he believed was a shortcut. The said route would have to pass through a railway
crossing in Osmena Highway. Said railway crossing had no barriers, no early warning signs, no one
manning the crossing. During the incident, the driver was blindsided by a large vehicle while crossing
said rail track so the rear end of the school bus was hit by a passing train causing death of one of its
passengers.

Parents sued operator of school bus on the basis of Breach of Contract of Common Carriers and they
likewise sued PNR for Quasi-delict.

Q: Are the operators of the school bus liable for the death of the student? May they skip their liability by
proving they exercised due diligence in the selection and supervision of their employee?

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A: YES.

Supreme Court has already declared operators of school buses are common carriers so in the event of
death of passengers, common carriers are deemed to be at fault unless they can prove they have exercised
EXTRA-ORDINARY diligence in preventing the accident or that the entire incident is attributable to
fortuitous events.

Here, the school bus operator was clearly negligent and they were not able to prove they exercised extra-
ordinary diligence and the plea of fortuitous event cannot prosper.

Q: Can PNR be held liable?

A: YES.

PNR is also liable for Quasi-delict for failure to ensure safety of those crossing the railway by failing to
install safety signs, signal lights, cross bars, warning signs and other permanent safety barriers.

Q: May the school bus operator and PNR be held solidarily liable?

A: YES.

Even if the cause of action against one is Quasi-delict and the other cause of action is breach of Contract
of Carriage, both being negligent, they are considered as joint tortfeasors. Under the law, the liability of
joint tortfeasors is solidary.

METRO MANILA TRANSIT CORPORATION V. CUEVAS

757 SCRA 311 (2015)

MMTC sold its buses to Mina Transit but in their agreement, they agreed MMTC would retain ownership
of the buses until certain conditions were met but in the meantime, Mina may operate the buses within
Metro Manila. One of the said buses figured into an accident while being driven by a Mina Transit
employee. The driver recklessly and carelessly attempted to overtake a motorcycle of the right side of
the lane in the course of which, the bus side-swiped the motorcycle resulting to injuries to the rider and
his companion. Both victims sued MMTC for damages and MMTC filed a cross-claim against Mina
Transit.

Liability of MMTC is based on precarious liability of employer under Art. 2180 NCC.

Remember that it was not a bus passenger who complained hence cause of action was Quasi-delict.

MMTC claims they should not be held liable due to absence of employer-employee relationship with
reckless driver of Mina Transit and additionally, an arrangement between MMTC and Mina Transit exists
providing that Mina shall be liable in cases of such situations.

Q: Are the arguments of MMTC tenable?

A: NO.

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Under the Registered Owner Rule, the registered owner of the vehicle involved in a vehicular accident
can be held liable for all the consequences and the Supreme Court reminds us that such a rule has
remained a good law.

In contemplation of the Registered Rule law, the actual registered owner is considered as the employer of
the driver so the requirements of Art. 2180 NCC are still met; actual employer is only considered/deemed
as agent of registered owner.

Q: Is this unfair to registered owner MMTC? May MMTC be allowed to recover from Mina?

A: It may seem to be unfair but registered owner has a remedy: he may recover from actual operator
whatever maybe adjudged against him by way of cross-claim.

Although the registered owner rule may seem to be unjust towards the registered owner, the law did not
leave him without remedy. The remedy of the registered owner is to recover from the actual operator
under the principle of unjust enrichment and the manner of recovery is by way of a cross-claim.

Q: What will be the basis of recovery of registered owner against actual operator?

A: Application of the Principle of Unjust Enrichment/prevention of unjust enrichment.

Additionally, MMTC cannot evade liability by passing the buck to Mina Transit because the stipulation in
their agreement did not bind third parties like the victims who were expected to simply rely on the data
contained in the registration certificate of the erring bus.

MAKATI SHANGRI-LA HOTEL AND RESORT, INC. V. HARPER

679 SCRA 444 (2012)

There was a foreigner who checked in Makati Shangri-la who was killed inside his room. Those who
killed him were people he invited to his room but the lifeless body was only discovered when someone
attempted to make use of his credit card. His family in Norway was alerted because of the failure of those
attempting to charge the card to answer correctly standard security questions for its use.

When the family of the foreigner was alerted, they called up Makati Shangri-la and only then did the
latter discover the lifeless body of the victim. The family sued the hotel but Makati Shangri-la claims
they should not be liable because it is by the guest’s own negligence that he died because the killer is
known to him and he invited the killer to his room.

Q: Is Makati Shangri-la liable?

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A: YES.

Because the business of a hotel is imbued with public interest.

Notice that we don’t have a provision in NCC providing for a situation where one of the guests in a hotel
dies. We do, however, have a provision for the loss of personal effects introduced by the guest into the
hotel.

Q: What are the governing laws that may be cited to hold Makati Shangri-la liable?

A: The Court applied by analogy the provisions of Articles 2000, 2001 and 2002 NCC.

If the hotel is required to observe a certain degree of care and responsibility with respect to the personal
effects of their guests, it is with much greater reason that those provisions should also apply the same, if
not greater degree of care and responsibility, to the persons/to the safety of the guests or where the lives
and safety of their guests are involved.

Art. 2000, NCC

The responsibility referred to in the two preceding articles shall include the loss of, or injury to
the personal property of the guests caused by the servants or employees of the keepers of hotels or inns as
well as by strangers; but not that which may proceed from any force majeure. The fact that travelers are
constrained to rely on the vigilance of the keepers of the hotel or inn shall be considered in determining
the degree of care required of him.

Art. 2001, NCC

The act of a thief or robber, who has entered the hotel is not deemed force majeure, unless it is
done with the use of arms or through an irresistible force.

Art. 2002, NCC

The hotel-keeper is not liable for compensation if the loss is due to the acts of the guest, his
family, servants or visitors, or if the loss arises from the character of the things brought into the hotel.

Q: Another side issue in the case, may filiation be established through a baptismal certificate?

A: The Court clarified, if the Baptismal certificate is the ONLY proof of filiation, such is NOT a
competent evidence of paternity. But if the Baptism Certificate is merely corroborative, it can be
appreciated as proof of filiation.

AGGABAO V. PARULAN, JR.

629 SCRA 562 (2010)

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The spouses in this case were governed by a regime of Conjugal Partnership of Gains but they were
separated in fact. During their separation in fact, the wife sold a conjugal partnership property and the
wife forged the signature of the husband in the SPA.

After the sale, the buyers were notified that the SPA allegedly executed by the husband was a forgery but
there an actual SPA executed by the husband. So the real Attorney-in-Fact negotiated with the buyers and
the real Attorney-in-Fact made a counter-offer. The counter-offer was, however, rejected by the buyers
because the buyers simply said they were buyers in good faith.

The sale was made in 1991. Conjugal partnership was established during the Civil Code.

Q: Is Art. 124 applicable?

A: YES.

Applying Art.105 FC, the provisions of the Family Code on Conjugal Partnerships, including Art.124, are
also applicable to Conjugal Partnerships already established during the Civil Code PROVIDED that there
shall be NO IMPAIRMENT of existing rights already acquired under the Civil Code. If there was no sale
yet, no rights will be prejudiced; if the sale will only occur during effectivity of the Family Code.

So on the matter of a sale of a Conjugal Partnership property, the reckoning point is the Date of the Sale.

If sale is PRIOR to effectivity of Family Code, apply Civil Code. Under the Civil Code, the sale of one of
the spouses without the consent of the other is NOT VOID AB INITIO but merely voidable. The sale can
be annulled within a period of 10 years.

If sales is DURING effectivity of the Family Code, apply Art. 124 FC in which case sale made by one
without the consent of the other is VOID AB INITIO.

NOTE: So master Art. 105 of Family Code; it will tell you when the provisions of FC on Conjugal
Partnerships are applicable to Conjugal Partnerships already existing during the Civil Code.

The contention of the buyers that the counter-offer of the attorney-in-fact of the husband is a ratification
of the sale.

Q: What is the effect of the Counter-offer of the Attorney-in-fact of the husband?

A: Since the sale under Art. 124 is void, it is not susceptible of ratification.

Nevertheless in the case, the counter-offer of the husband is clearly not accepted by the buyer hence it did
not result to a perfected contract of sale.

Q: May the buyers invoke Good Faith in the case?

A: NO.

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To invoke Good Faith when dealing with a conjugal partnership property or an absolute community
property, the buyers are required to prove 2 kinds of diligence:

(1) That they observed diligence in determining the validity of the title of the seller; and,
(2) That the buyer has also observed diligence in ascertaining the capacity of the transacting the
spouse to represent the other spouse.
Here, clearly, the requisite diligences were NOT observed because the buyers were confronted with a
SPA and the buyer is aware that the spouses were already separated.

Kapaghiwalaynaang mag-asawa at isalanganghumaharapsa’yosapagbenta ng conjugal property,


kabahankana – yanangsabi ng KorteSuprema.

The buyer is required to make additional inquiry.

Note: This might not be asked in Civil Law but maybe in Remedial Law.

PHILTRANCO SERVICE ENTERPRISES, INC. V. PARAS

671 SCRA 24 (2012)

Paras boarded a bus in Bikol bound for Manila and the bus was operated by Inland Trailways. While the
said bus was traveling along Marcos Highway in Tiaong, Quezon, said bus was bumped at the rear by
another bus owned and operated by Philtranco. As a result of the accident, Paras suffered physical
injuries and Paras filed for a complaint for damages against Inland Trailways for breach of contract.
Inland, on the other hand, filed a third-party complaint against Philtranco on the basis of Quasi-Delict.

May the court ultimately hold the third-party defendant as liable to the plaintiff even if the cause of action
of the plaintiff against original defendant is breach of contract while the cause of action of the third-party
complainant against the third-party defendant is Quasi-delict?

YES.

The cause of action of Paras against Inland for Breach of Contract of Carriage did not need to be the same
as the cause of action of the third-party complainant against the third-party defendant.

It is settled that a defendant in a contract action may join as third-party defendants, those who may be
liable to him under Quasi-delict.

Allowing recovery by original complainant against third-party defendant, in this case, avoids multiplicity
of suits.

LAVADIA V. HEIRS OF JUAN LUCES LUNA

730 SCRA 376 (2014)

Attorney Luna married first wife in 1947 under Old Civil Code.

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In 1976, Atty. Luna obtained a divorce decree in the Dominican Republic. In the same divorce
proceedings, the court approved the agreement of Atty. Luna and the wife for the dissolution and
liquidation of their conjugal partnership.

After the divorce, Atty. Luna married Soledad, they cohabited until 1987 when they parted ways. In
1997, Atty. Luna died.

Upon death of Atty. Luna, his share in the condominium unit as well as the books and furniture of his law
office was taken over by his son.

Soledad, the second wife, filed a complaint to recover her alleged pro indiviso share in the estate of Atty.
Juan Luna. She claimed that the subject properties were acquired during the existence of her marriage to
Atty. Luna.

Q: Was the marriage of the Atty. Luna and first wife validly terminated through the decree of divorce
obtained in 1976?

A: NO.

The marriage between Atty. Luna and his first wife, both Filipinos, was solemnized in the Philippines in
1947. The law enforced at that time still adopted the Nationality Rule. Even the Old Civil Code adopted
such rule.

Adopting the Nationality Rule, the divorce obtained by a Filipino abroad is considered VOID in this
jurisdiction because it is contrary to public policy or morality. So the marriage of Luna to Eugenia, the
first wife, was not terminated so such marriage subsisted until the death of Luna in 1997.

Q: Was the conjugal partnership of Luna and Eugenia validly terminated?

A: NO.

Recall that in the divorce proceedings, both submitted to the divorce courts for approval their agreement
for liquidation and dissolution of their conjugal partnership. (In the Family Code, an agreement for the
dissolution and liquidation can be entered into by the spouses voluntarily provided that such agreement is
approved by the court.) In this case, the approval of the agreement for liquidation and dissolution of the
conjugal partnership was only an INCIDENT of the divorce proceedings.

If the divorce is invalid, the approval of agreement for liquidation and dissolution is ALSO INVALID.

Is Soledad a co-owner of subject property?

Since the first marriage was not terminated, the subsequent marriage to Soledad was a bigamous marriage
hence void. The applicable law is Art. 144 of the Civil Code.Applying Art. 144, Soledad must be able to
prove that she made actual contributions to the acquisition of subject properties. Here, Soledad failed to
prove she made actual contributions in acquisition of said properties hence she does not have any part in
those properties.

LIMSON V. GONZALES

720 SCRA 246 (2014)

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Limson filed a criminal complaint against Gonzales for falsification.

The name registered in the PRC of Ar. Gonzales is simply “Eugenio Gonzales.”

Complainant claimed there is one “Eugenio Juan Gonzales” who is claiming to be an architect in using
the license of a certain “Eugenio Gonzales.”

Eugenio Juan Gonzales explained that in grade school, he was simply using “Eugenio Gonzales” but
when he transferred to UST to study Architecture and upon commencement of the practice of his
profession, the name he started using was “Eugenio Juan Gonzales,” “Juan” being his second first name.
The prosecutor’s office dismissed the charge of falsification.

Not contented, the complainant filed another complaint for violation of R.A. 1685 “Anti-Alias Law.”

Q: What is an alias?

A: An alias is a name that is different from the individual’s true name and it does not refer to a name that
is not different from his true name.

Dapatibang-ibaang alias. It is not referring to his true name.

An alias is a name used by a person or intended to be used by him publicly and habitually, usually in
business, in addition to his real name to which he was registered at birth or baptized or to the substitute
name authorized by a competent authority.

A man’s name is simply the sound or sounds by which he is commonly designated by his fellows and by
which they distinguish him and sometimes, a man is known by several names and these are known as
aliases.

To be an alias, it must be different from an individual’s true name.

Q: Is Gonzales liable for violation of Anti-Alias Law?

A: NO.

All of those are his names. “Eugenio Juan Gonzales” and “Eugenio Gonzales” are all referring to his true
name and those are not aliases. What is significant is that those names were not fictitious within the
purview of the Anti-Alias Law and such names were not different from each other. Considering that he
was not also shown to have used the names for unscrupulous purposes or to confuse or deceive the public,
the dismissal of the charge against him was justified in fact and in law.

HEIRS OF JOSE REYES, JR. V. REYES

626 SCRA 758 (2010)

PACTO DE RETRO SALE AND EQUITABLE MORTGAGE

The father died survived by the wife and children. The property left by the husband was under a state of
co-ownership among the heirs. During the existence of the co-ownership, the heirs entered into a Pacto
de Retro sale with spouses Francia. But after the pacto de retro sale, the sellers remained in possession
of the property and the sellers continued paying real estate taxes of the property. The agreement did not

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provide for the redemption period so maximum allowed should have been 10 years. But after the lapse of
10 years, there was no foreclosure of the mortgage so essentially, this was equitable mortgage.

After the lapse of 10 years, the vendee a retro allowed one of the co-owners to redeem the subject
property.

Q: Is the transaction one of pacto de retro sale or equitable mortgage?

A: Equitable Mortgage applying Art. 1602 NCC.

Art. 1602 NCC

The contact 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;
(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.

The Supreme Court, have ruled in the past, the existence of any of these circumstances will be sufficient
to make the transaction as one of equitable mortgage and not of pacto de retro sale.

Paragraphs (2) and (5) were present in the case so the transaction is presumed equitable mortgage.

Q: Are the petitioners, other co-owners, now barred from claiming that the transaction under the
agreement was an equitable mortgage by their failure to redeem the property for a long period of time?

A: While it is true that the longest period is 10 years but after the lapse of the 10-year period there was no
foreclosure of the equitable mortgage, and in this case, the vendee a retro allowed redemption even after
the lapse of the 10-year period.

Q: May the redeeming co-owner be the sole owner of the property when he redeemed the sale in 1970?

A: NO.

Redemption is not one of the ways of terminating co-ownership.

The co-ownership in this case was never terminated because there was no foreclosure of the equitable
mortgage.

At the time of the redemption made by one of the co-owners, the co-ownership was still existing and
redemption using exclusive funds is not a ground to terminate the co-ownership. What the co-owner did
was simply incur expenses for the purpose of preserving the property owned in common so pursuant to
provisions of Art. 488 NCC, in case of expenses of preservation of the co-owned property, the one who
incurred the expense has the right to demand proportionate contribution from the other co-owners.

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SULPICIO LINES, INC. V. CURSO

615 SCRA 575 (2010)

Q:Are the surviving siblings of a passenger of a vessel that sinks during a voyage entitled to recover
moral damages from the vessel owner as common carrier?

A: NO.

Under Art. 2206 NCC, only the following are entitled to recover moral damages by reason of contract:
Descendants, Ascendants, Illegitimate Children and the surviving spouse of deceased passenger. Brothers
and sisters are not included in those enumerated under the law.

ABLAZA V. REPUBLIC

628 SCRA 27 (2010)

The marriage of CresencioAblaza and LeonilaHonato have been celebrated on December 26, 1949, under
the Old Civil Code, but the marriage license was issued only on January 9, 1950.

After the death of Crecencio, his brother filed a petition to declare the marriage void on the ground of
absence of marriage license. In that petition, the complainant did not implead the wife and ascertained
Leila Ablaza who is alleged to be a daughter of Cresencio with Leonila.

Q: Is the rule that only the husband or the wife has the personality to file a petition for declaration of
absolute nullity of marriage pursuant to A.M. 02-1110 applicable?

A: NO.

Marriage was celebrated under OLD Civil Code.

The provisions of A.M. 02-1110 are applicable only to marriages celebrated under the Family Code.

Q: So who has the personality to file a petition for marriages celebrated during the effectivity of the Old
and New Civil Code?

A: The absence of a provision under Old and New Civil Code cannot be construed as giving a license to
just any person to bring an action to declare the absolute nullity of a marriage. The plaintiff must still be
the party who stands to be benefitted by the suit for it is basic in Procedural Law that every action must be
prosecuted in the name of a real party in interest. Thus, only a party who can state a proper interest can
file the action.

Q: Is Isidro, the brother, a proper party to file a petition to declare the marriage void on ground of absence
of a marriage license?

A: It depends.

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If Leila is indeed of Cresencio, Isidro is excluded from intestate succession hence, Isidro will not have a
material interest in the estate of the deceased. Such being the case, he does not have the personality to file
a petition to declare the absolute nullity of the marriage.

But if Leila will turn out not to be a child of Cresencio, Cresencio died without any direct line and
without illegitimate children, in which case, the brother will become an illegal heir together with the wife.
If the marriage is declared void, the brother will be declared as the sole heir of the estate.

Therefore in this case, the Supreme Court remanded the case to the trial court for determination of such
fact of whether or not Leila is indeed a child of the deceased.

REPUBLIC V. SANTOS III

685 SCRA 51 (2012)

Q: Distinguish Accretion of Riverbanks from the Drying Out of a River Bed.

A: In Accretion, it will not involve any recession of the waters of the river.It will involve the movements
of the waters of the river and by such movements, sediments are carried to the banks of the river thus
adding to the banks and enlarging the area of the riparian land.

If requisites of accretion are present, the additional soil deposit or alluvium will become private property
to be owned by the riparian owner.
The process of drying up of a river to form dry land involves the recession of the water level. The dried
up river bed does equate to accretion hence it remains to be property of Public Dominion.

In Art. 461 NCC, it will involve the change in the course of the waters of the river; you must be able
prove the old course, prove the new course and the reason for the change of the course of the water is
nature.

Exception: Reason is the State

In the case of Basa, the reason for the change of the waters of the river was a governmental project; the
reason for the change was the State.

The Court held that even if the reason was not Nature but the State, it with more reason that the property
owner should be compensated for the loss of his property, applying Art. 461 NCC.

If the reason is other than nature or state, Art. 461 NCC will not be applicable as held in the case of
Ronquillo v. IAC (195 SCRA 433, 1991).

UY V. FULE

727 SCRA 456 (2014)

Upon the death of Conrado Garcia, the title to the property was extra-judicially settled among the heirs,
hence there was a new title in the name of the children as co-owners of the land of Conrado Garcia.
However, the government, through the Department of Agrarian Reform erroneously declared that land to
be an untitled land and the government included it in the Operation Land Transfer Program of DAR.

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Subsequently, it was awarded to several farmer beneficiaries and subsequently, the farmer beneficiaries
were issued their own titles but after the issuance of the new titles in the name of the farmers, one of the
farmer beneficiaries sold his land to Uy.

In the original title sold to Uy, there was a restriction saying subject land is prohibited from being sold for
a period of 10 years to any other entities other than the government, etc, not to private individuals and at
the time of the transaction, that prohibition was annotated on the title.

Although subsequently, when the original was transferred to the heirs of the farmer beneficiaries, the
annotation was no longer carried over.

Q: Is Uy a buyer in good faith.

A: NO.

To be a buyer in good faith, 3 requisites must be satisfied:

(1) Seller is the registered owner of the land;


(2) Seller is in possession of the land; and,
(3) At the time of the sale, the buyer was not aware of any claim or interest of some other person in
the property or any defect or restriction in the title of the seller or in his capacity to convey the
property / there is nothing in the facts of the case that should have aroused the suspicion of the
buyer.
Here, the annotation in the title of the seller prohibiting the sale is a sufficient notice to the buyer to make
further inquiries. He cannot simply rely on the Curtain Principle Rule.

GONZALO V. TARNATE, JR.

713 SCRA 224 (2014)

APPLICATION AND EXCEPTION OF IN PARI DELICTO PRINCIPLE

DPWH awarded a contract to Gonzalo for the construction of a road. Gonzalo, in turn, subcontracted
such contract to Tarnate(the subcontracting of a contract awarded by the DPWH is prohibited by Sec 6,
PD 1594). In furtherance of their agreement, Gonzalo assigned by way of a Deed of Assignment, a
portion of what he may recover from DPWH. Deed of Assignment was submitted to DPWH. Without
knowledge of Tarnate, Gonzalo unilaterally rescinded the Deed of Assignment. Tarnate not being paid,
Tarnate filed a claim.

Gonzalo argues applying Principle of InPari Delicto knowing their subcontracting agreement is in
violation of Sec.6 PD 1594, Tarnate is not allowed to recover from Gonzalo.

Q: Is the Principle of InPari Delicto applicable in this case?

A: Ideally, yes.

The contract being void (Art. 1409 (1). Contract contrary to law, morals, good customs, public order or
public policy), both parties being aware that contract they entered into was an illegal arrangement,
ordinarily, none of them will recover from each other; the Court will simply leave them where they are.

The Supreme Court held this particular case is an exception.

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The Principle of InPari Delicto is not always rigid. The accepted exception arises when application of the
doctrine CONTRAVENES the well-established public policy of the State.

In this jurisdiction, it is a well-established public policy of the State embodied in Art. 22 NCC that there
should be no unjust enrichment.

Applying the Principle of Unjust Enrichment, the Court treated this case as an exception to the application
of In Pari Delicto Principle.

Q: What do you call for recovery under Art.22 NCC?

A: Accion in Rem Verso

Q: What distinguishes Accion in Rem Verso from SolutioIndebiti?

A: SIMILAR requisites of Accion in Rem Verso and Solution Indebiti:

(1) The Plaintiff suffered a loss


(2) The Defendant was enriched and the enrichment of defendant was at the expense of the plaintiff
DIFFERENCE in requisites

(1) In SolutioIndebiti, such enrichment was unjustified because the delivery was without legal or just
cause. The essence of Solution Indebit is MISTAKE. The delivery or payment was by reason of
mistake.
(2) In order for action of plaintiff to prosper in Accion in Rem Verso, it is necessary that the plaintiff
must have NO OTHER LEGAL REMEDY under contract, quasi-contract, delict or quasi-delict.
So if the plaintiff can recover under quasi-contract, for example, the plaintiff can recover under
SolutioIndebiti (a form of quasi-contract), in Rem Verso will not prosper.So in Rem Verso, the
delivery was without legal/just ground BUT IT WAS NOT by reason of mistake as in the case of
Gonzalo v. Tarnate.

This is a continuation of the Medel case where the Supreme Court declared the agreement with regard to
the interest paid as unconscionable at 5.5% per month.

In this case, the borrowers obtained several loans from the creditor. One time, the borrowers consolidated
all loans into one promissory note amounting to P500,000 and the stipulated interest rate was 5.5% per
month (in another case, the Court held such interest rate to be unconscionable lowering it to 12% per
annum because at that time, BSP Circular No. 799 was not yet applicable). The creditors won in that case
so the creditor moved for the execution of the judgment. During the pendency of the case, the borrowers
made partial payment in the amount of P450,000 and the balance, they promised to pay it some other
time. The payment and the promise was contained in a receipt. When the creditors filed for a motion for
execution, the argument of the borrowers was that the original obligation was already novated by the new
agreement and the borrowers were pointing to the receipt where they made partial payments and they
made a promise to pay the balance later on.

Q: Given that there is no express novation in this case (so novation can only exist by way of an implied
novation), are the borrowers correct in consideringthat there was novation of the old obligation?

A: NO.

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In implied novation, if there is a change in the any of the conditions of the obligation, it is necessary that
the change must involve a principal or material one; that is what we call Extinctive Novation. If what is
involved is a change in the object/purpose/consideration or any principal condition of the obligation, it is
called Extinctive Novation and such will result in extinguishment of the OLD by way of creating a NEW
one.

But in this case, there was no extinctive novation, because what exists in this case is simply a
modification of the obligation or what we call Modificatory Novation. In Modificatory Novation, there
will be no extinguishment of an old obligation because it does not create a new obligation; the obligation
is simply modified. So the obligation will still exist up to the extent where it is compatible with the
modificatoryarrangement.

In this case, no Extinctive novation because the payment was an implied recognition of the existence of
the old obligation; they were still referring to the old obligation when they made partial payments of the
old obligation and they simply made a promise to pay the balance later on. Such is not contrary to the
existence of the old obligation. Therefore, no novation.

DEGANOS V. PEOPLE

707 SCRA 438 (2013)

AGENCY TO SELL

Lydia is a jeweler. Here, Decanos entered into an agreement with Lydia that he will be selling the pieces
of jewelry. If he unable to sell, he will return the pieces to Lydia; if he does sell, he will be turning over
the proceeds of sale to owner, Lydia, and in return, he will earn a commission. If that is the case, there
exists a Contract of Agency to Sell and not Contract of Sale because there was no transfer of ownership.

May partial payments of the sold pieces of jewelry amount to a novation of the obligation?

NO.

Partial payment is still a recognition of the existence of the obligation; it is not inconsistent with the
existence of the obligation so therefore there is no express or implied novation.

Q: Can one use Novation as a criminal defense?

A: Depends.

Before the institution of the criminal information, yes.

But after the criminal complaint has been instituted, it is not allowed as a defense anymore.

Novation is not a ground under the law to extinguish criminal liability under the RPC because only the
State may validly waive the criminal action against the accused. But the novation theory may PERHAPS
be applicable prior to the filing of the criminal information in court by the state prosecutors because up to
that time, the original trust relation may be converted by the parties into an ordinary creditor relationship,
that is, PRIOR to the filing of the criminal information.

COMSAVINGS BANK (NOW GSIS FAMILY BANK) V. CAPISTRANO

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704 SCRA 72 (2013)

There was one borrower who owns a parcel of land. Said borrower wanted to construct a house on his
land. So he applied for a loan under the Unified Lending Program of PAG-IBIG. Under that program,
there is bridge financing. Prior to release of a loan from Pag-ibig, there will be someone who will answer
for the construction and said bridge financing is usually shouldered by a domestic bank. In this case,
borrower was able to choose a Pag-ibig-accredited contractor and this contractor will use the bridge
financing funds (put up by Comsavings Bank) to construct the project. After that, Pag-ibig will pay
Comsavings Bank so eventually, the borrower will be indebted to Pag-ibig.

In this case, prior to the release of the loan by Comsavings Bank, the bank required the borrower to sign a
certification of the completion of the house – a normal requirement of banks.

After that, the bank released the entire funds to accredited contractor but the latter was unable to finish the
house project.

Pag-ibig communicated to the borrower that he should commence paying the monthly amortizations so
the borrower went to court to demand damages against the contractor and against Comsavings Bank
because of claims of being prejudiced, being left with an uninhabitable house and now being required to
pay for the loan.

Q: Is the bank solidarily liable with the contractor?

A: YES.

But the liability of the bank is not contract. The solidary liability of the bank is pursuant to Art. 20 and
Art.1170 of the Civil Code as per the Chairman. The solidary liability of the bank is not based on the
contract that the bank had entered into with the borrower; instead, the bank’s liability is based on tort
under the provisions of Human Relation (Art. 20 NCC) and Art. 1170 NCC (but Art. 1170 is actually
Based on Contract so contradicting).

The solidary liability of Comsavings Bank is based on Quasi-delict. Art. 20 NCC provision on Human
Relation is a special tort; Art. 1170 NCC is just additional. Anyway, one can be held liable under
Contract AND Quasi-delict at the same time – that is justified.

Since both the bank and the contractor were guilty of negligence, they are considered joint tortfeasors so
they are liable solidarily to the borrower.

DELA CRUZ V. PLANTERS PRODUCTS, INC.

691 SCRA 28 (2013)

Q: Is the livelihood of the aggregate interest charge exceeding the principal indebtedness inequitable or
unconscionable? Will the mere fact that the value of the interest is now higher than the principal
necessarily mean that the interest is excessive or unconscionable?

A: NO.

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If the computation of the interest is in accordance with the law and jurisprudence, even if it will turn out
compared to the principal, it is not unconscionable: Dura Lex Sed Lex.

We are simply applying the law in jurisprudence.

An example is the borrower keeps on refusing to pay and he keeps on contesting the case so the case ran
for 20 years and you were made to pay hence, the value of the interest is bound to increase.

ASB REALTY CORPORATION V. ORTIGAS & COMPANY LIMITED PARTNERSHIP

777 SCRA 284 (2015)

Ortigas sold a property to Amethyst. In the Deed of Sale between the parties, there were several
limitations and those limitations were annotated on title of Amethyst. Later on, Amethyst transferred
property in favor ASB Realty in an arms-length/bona fide transaction. It was ASB Realty who was sued
by Ortigas for breach of obligations under the contract. The cause of action of Ortigas is for rescission.
The basis for rescission under Art. 1191 NCC – failure to comply in a respective undertaking in
Reciprocal Obligations (it cannot be rescission as a subsidiary remedy).

Q: Will the action prosper?

A: NO.

But in rescission, the cause of action must be pursued against the other contracting party. As held by the
Supreme Court, in rescission under Art. 1191 NCC, the action for rescission can only prosper if the
property is not yet in the legal possession of a third person who may have acted in good faith.

The remedy of Ortigas is not rescission under Art. 1191 NCC, it can be in some other form.

PEN V. JULIAN

778 SCRA 56 (2016)

PACTUM COMMISSORIUM

In this case, the spouses Julian obtained a loan from Adelaida Pen. As security, the spouses executed a
real estate mortgage over their property but the same time that the mortgage was executed, they were
likewise required by the creditor to sign a blank document purportedly a blank Absolute Deed of Sale.

Said document did not contain any consideration, date, it was not built up and it was not notarized.
When the spouses failed to pay the loan, the creditor transferred the property to her name using the blank
Deed of Sale.

Q: Is that PactumCommissorium?

A: YES.

Art. 2088 of Civil Code prohibits the creditor from appropriating the security, the things given by way of
pledge or mortgage, or from disposing of them and any stipulation to the contrary (called
Pactumcommissorium) is void.

Q: What are the Elements of PactumCommissorium?

A: These are:

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(1) There should be a contract of security; there should be a pledge/mortgage or antichresis wherein
the property is pledged or mortgaged by way of security for the payment of the principal
obligation;
(2) There should be a stipulation for an automatic appropriation by the creditor of the thing pledged
or mortgaged in the event of non-payment of loan.

Q: But in the case, since there was no express agreement that can satisfy second element of
PactumCommissorium, is it still violating Art. 2208 of the Civil Code?

A: YES.

The Supreme Court held that in this case, all the elements of PactumCommissorium are present. First
element was present considering that the property is a security for the loan obtained by the borrowers.

As to the second, the authorization for the creditor to appropriate the property subject matter of the
mortgage upon default by the borrowers was IMPLIED from the borrower’s havingsigned a blank deed of
sale simultaneously with the signing of the mortgage contract. The haste with which the transfer of the
property was made upon the default by the borrower and the ritual transfer of the property in a manner not
in the form of a valid dacion en pago ultimately confirmed the nature of the transaction as
pactumcommissorium.

Q: Is it not Dacion en pago?

A: NO.

The theory that the transaction was of Dacion en pago cannot stand scrutiny.

For a valid dacion en pago to transpire, the following requisites must be present and one of the elements is
the existence of a monetary obligation. To have a valid dacion en pago therefore, the alienation of the
property must be to fully extinguish the debt. Here, the debt of the borrower subsisted despite the transfer
of the property in favor of creditor

PHILIPPINE NATIONAL BANK V. HEIRS OF BENEDICTO AND AZUCENA ALONDAY

805 SCRA 657 (2016)

Q: What is the DRAGNET CLAUSE/Blanket Mortgage Clause?

A: It is one which is specifically phrased to subsume all debts, whether past or present.

The mortgage will stand as security for all indebtedness, whether that indebtedness was incurred in the
past or it will be incurred in the future; the Dragnet Clause is couched in such a way that it is ALL-
ENCOMPASSING.

In the 1974, the borrowers obtained an Agricultural Loan secured by a real estate mortgage on a parcel of
land in Sta. Cruz, Davao del Sur. In 1980, 6 years after, the spouses obtained from the same creditor a
Commercial Loan secured by another real estate mortgage, the subject of which is a different real
property. In both contracts, a dragnet clause included. In this case, the borrowers were able to pay the
second loan (Commercial Loan) but the creditor has not released the mortgage because the first loan has
not yet been fully paid. The borrowers defaulted on the payment of the first loan so the creditor
foreclosed the first mortgage. When the property was sold, the proceeds of the auction sale was
insufficient to cover the indebtedness.

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Invoking the dragnet clause on both contracts, creditor PNB also foreclosed the second mortgage.

Q: Is that allowed?

A: NO.

In this problem, the Dragnet Clause cannot be applied. PNB had the opportunity to include some form of
acknowledgment of the previously subsisting agricultural loan in the second mortgage contract; that the
first loan is also covered by the second mortgage. The mere fact that the mortgage constituted on the
property covered by the second mortgage MADE NO MENTION of the pre-existing loan (the first
mortgage) could only strongly indicate that each of the loans of the spouses had been treated separately
by the parties themselves. This is sufficiently explained why the loans have been secured by different
mortgages.

Another indication that the second mortgage did not extend to the first loan was the fact that the second
mortgage was entered into in connection only with a commercial loan; the purpose of the loan was
different.

To reiterate, in order for the all-embracing or Dragnet Clauses to secure future and other loans, the loans
thereby secured must be SUFFICIENTLY DESCRIBED in the mortgage contract.

Therefore in the second mortgage, it should have specifically described the existing loan as still secured
by the second mortgage in order for Dragnet Clause to apply.

Q: Let’s go back to the MMTC case/the Registered Owner Rule; the registered owner is different from
the actual employer. What if the actual employer is also the registered owner of the vehicle? If such is
the situation, will you follow the Precarious Liability of the Employer under Art.2180 NCC or under
Registered Owner Rule?

A: If you will be pursuing under Art. 2180, the plaintiff is required to prove existence of following
prerequisites:

(1) Existence of Employee-Employer Relationship; and,


(2) At the time of incident, the driver was pursuing an assigned task or duty
If you will be pursuing under Registered Owner Rule, you need not prove such. Under the Registered
Owner Rule, the registered owner is liable. Period.

SOME LAST-MINUTE NOTES:

So in those situations that the actual employer is the same as the registered owner, the decisions of the
Supreme Court are conflicting with each other. There were cases decided on the basis of Art. 2180 NCC
and there were cases decided on the basis of the Registered Owner Rule until in 2016, the Supreme Court
clarified all those conflicting decisions in the case of Caravan Travel and Tours v. Alejar.

In that case, the Supreme Court held that in a situation where the registered owner is also the actual
employer, the plaintiff simply needs to prove that the EMPLOYER IS REGISTERED OWNER. Once
the plaintiff proves such, that will create a presumption that the requisites of Art. 2180 NCC are present
therefore the burden of proof shifts to the employer to deny liability.

Q: How may the employer deny liability in such a situation?

A: He may prove 3 things:

(1) Absence of employer-employee relationship;


(2) That at the time of incident, the driver was NOT pursuing an assigned task or duty; or,
(3) He exercised (Extra-ordinary) diligence in the selection and supervision of his employee.

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If he successfully proves such, he will no longer be held liable.

Q: Finally, what’s the difference between the Expanded Concept of a Builder in Good Faith vis-a-vis the
Limited Concept?

A: Limited Concept of a Builder in Good Faith is the original definition. Under this, in order for one to
be a Builder in Good Faith, he must have a claim of ownership. He believes himself to be the owner
except that he does not become the owner because there is a flaw or defect in his title or mode
invalidating the sale. Nevertheless, he is a builder in good faith because he was not aware of the
existence of such flaw or defect at least at the time of building, planting or sowing.

In recent years, the Supreme Court came up with the Expanded Definition. Under the Expanded
Definition, even if the Builder does not have a claim of ownership because he is perfectly aware that he is
NOT THE OWNER, nevertheless, the building, planting or sowing was made with the EXPRESS
CONSENT of the landowner.

Example, if the possessor is a possessor by mere tolerance, general rule? The possessor by mere
tolerance is not a builder in good faith but in the 2016 case of Department of Education v. Casibang (782
SCRA 326, 2016), the DepEd was a possessor by mere tolerance in constructing the school but
nevertheless, the DepEd was EXPRESSLY PERMITTED by the owner of the land to construct the school
so the Court declared DepEd a Builder in Good Faith under the expanded concept.

Q: So what is the difference between the Expanded Concept of a builder in good faith in a situation where
both the landowner and the builder were BOTH IN BAD FAITH?

A: In a situation where both of them were in bad faith, the bad faith of one will be cancelled out by the
bad faith of the other so it’s as if both parties acted in good faith making the applicable law still Art. 448
but that will NOT be following the Expanded Concept.

Q: So when will Expanded Concept apply?

A: The builder was in bad faith because he was aware he was not the owner BUT the landowner was also
in bad faith because the latter knew someone else was building, planting or sowing on his land in yet he
DID NOT INTERPOSE any objection. If such is the case, both of them are in bad faith. The effect?
Still apply Art. 448 NCC. Under the expanded concept, the landowner EXPRESSLY CONSENTED in
the building, planting or sowing.

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