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Revised Quizzer in Civil Law by Atty. Roney Jone P.

Gandeza
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REVISED QUIZZER IN CIVIL LAW ATTY. RONEY JONE P. GANDEZA Premiere Law Review Centre & College of Law, Baguio Colleges Foundation Baguio City PRELIMINARY TITLE 1. Is there any difference in their legal effect between ignorance of the law and ignorance or mistake of fact? Yes, there is a difference. While ignorance of the law is not an excuse for not complying with it, ignorance of the fact eliminates criminal intent as long as there is no negligence. In addition, mistake on a doubtful or difficult question of law may be the basis of good faith. Mistake of fact may, furthermore, vitiate consent in a contract and make it voidable. 2. What are the exceptions to the rule that laws shall have no retroactive effect? The following are the exceptions to the rule that laws shall have no retroactive effect: 1. When the law itself expressly provides for its retroactivity. (Art. 4, NCC) 2. When the law is penal insofar as it favors the accused who is not a habitual criminal, even though at the time of the enactment of such law final sentence has already been rendered. (Art. 22, RPC) 3. When the law creates new or vested rights. (Arts. 2253, 2263, NCC) 4. When the law is procedural so long as it does not affect or change vested rights. 5. When the law is curative in character in the sense that the purpose for its enactment is to cure defects or imperfections in judicial or administrative proceedings. 6. laws. 3. Ortigas sold to Herminia in 1975 a parcel of land situated at Greenhills Subdivision IV, San Juan, Metro Manila. Their Contract of Sale provided that the property shall be used exclusively for residential purposes and that not more than one single-family building will be constructed thereon, the plans and specifications of which must be approved by Ortigas. The contract also provided that no sign or billboard shall be erected on the roof of the residential building for advertising purposes. These restrictions were annotated on Herminias title and shall run until December 31, 2025. In 1981, the Metro Manila Commission enacted MMC Ordinance No. 81-01 or the Comprehensive Zoning Area for the National Capital Region. Under such ordinance, a portion of the Greenhills Subdivision was reclassified as a commercial area. Hence, on June 8, 1984, Herminia leased to Susana the lot sold to her by Ortigas. Susana immediately constructed on the lot a When the law is interpretative of other

single-storey commercial building for her car sales company. When Ortigas learned about Susanas construction, it immediately filed suit to stop the construction and for it to be demolished on the ground that it violated the restrictions of the sale. Ortigas contended that inasmuch as the restrictions on the use of the lot were duly annotated on Herminias title, said restrictions must prevail over MMC Ordinance No. 81-01, more so because these restrictions were agreed upon before the passage of the ordinance. Ortigas contended further that the ordinance should be given prospective application only in the absence of a provision in said ordinance providing for its own retroactivity. Is Ortigas correct? Ortigas is not correct. In general, laws are to be construed as having only prospective application. Only laws existing at the time of the execution of a contract are applicable thereto and not later statutes, unless the latter are specifically intended to have retroactive effect. A later law which enlarges, abridges, or in any manner changes the intent of the parties to a contract necessarily surpasses the contract itself and cannot be given retroactive effect without violating the constitutional prohibition against impairment of contracts. But the foregoing principles admit of certain exceptions. One involves police power. A law enacted in the exercise of police power to regulate or govern certain activities or transactions could be given retroactive effect and may reasonably impair vested rights and contracts. Police power legislation to promote the health, morals, peace, education, good order, safety and general welfare of the people is applicable not only to future contracts but equally to those already in existence. The ordinance in question is a legitimate police power measure and must therefore be read into every contract. When a portion of the Greenhills Subdivision was reclassified as a commercial area, the restrictions in the contract of sale between Ortigas and Herminia limiting all constructions on the disputed lot to single family residential buildings were deemed extinguished by the zoning ordinance and could no longer be enforced. (Ortigas and Co. Ltd., vs. Court of Appeals, G.R. No. 126102, December 4, 2000) 4. Arthur and Belinda, both Filipino citizens, were married in Manila in 1937. Arthur left the Philippines in 1938 and subsequently became an American citizen in 1943. In 1952, Arthur divorced Belinda in California due to irreconcilable differences. In 1958, he married Clarita in Manila and cohabited with her until his death in 1985. Before his death, Arthur executed a last will and testament leaving all his properties to Clarita and their three children. In 1986, Belinda filed for the settlement of Arthurs estate claiming that she, not Clarita, is Arthurs surviving legal wife. She claims that the divorce decree obtained by Arthur in California is not valid in the Philippines and that therefore his marriage to Clarita is not valid. (a) Who between Belinda and Clarita is Arthurs surviving legal wife?

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Clarita, not Belinda, is Arthurs surviving legal wife. Since it was not disputed that Arthur was already an American citizen when he divorced Belinda, when he married Clarita, and when he executed his last will and testament, Philippine law does not apply to all these juridical incidents, but Arthurs national law. The divorce, therefore, is valid as to Arthur, and Belinda was no longer Arthurs legal wife. The divorce being valid, the marriage of Arthur and Clarita is also valid. Clarita, therefore, is Arthurs surviving legal spouse. (Llorente vs. Llorente, G.R. No. 124371, November 23, 2000) (b) What law governs the validity of Arthurs will? The formal validity of Arthurs will is governed by Philippine law, the same having been executed in the Philippines. However, the intrinsic validity of the provisions thereof is governed by Arthurs national law pursuant to paragraph 2 of Article 16 of the Civil Code. 5. Juan is a Filipino citizen residing in Tokyo, Japan. State what law governs: (a) Juans capacity to contract marriage in Japan. Juans capacity to contract marriage in Japan is governed by Philippine law, that is, by the Family Code. This is pursuant to Article 15 of the Civil Code which provides, among others, that laws relating to the legal capacity of persons are binding upon citizens of the Philippines even though living abroad. (b) Juans successful rights as regards his deceased Filipino fathers property in California. By way of exception to the general rule on lex rei sitae under the first paragraph of Article 16 of the Civil Code, a persons successional rights are governed by the national law of the decedent. Since Juans deceased father was a Filipino citizen, Philippine law governs Juans successional rights as regards his deceased fathers property in California. (c) The extrinsic validity of the last will and testament which Juan executed while sojourning in Switzerland. The extrinsic validity of Juans will is governed by (a) Swiss law, the law of the place where the will was made, following the rule on lex loci celebrationis under paragraph 1 of Article 17 of the Civil Code; or (b) Philippine law, by implication from the provisions of Article 816 of the Civil Code which allows even an alien who is abroad to make a will in conformity with our Civil Code. (d) The intrinsic validity of said will. The intrinsic validity of Juans will is governed by Philippine law, the same being his national law. (Art. 16, par.2, NCC ) 6. A Chinese donated in Germany in favor of a Filipino a parcel of land situated in the Philippines. (a) The law of which country governs the formalities of the donation?

The law of the Philippines lex rei sitae governs the formalities of the donation. The lex loci celebrationis doctrine enunciated under paragraph 1 of Article 17 of the Civil Code does not apply because the transaction relates to land and must therefore be governed by the law of the place where the land is situated. (b) The law of which country governs the capacity of the Chinese to make the donation? The law of the Philippines lex rei sitae governs the capacity of the Chinese to alienate. Here, the doctrine of national law under Article 15 of the Civil Code yields precisely because the subject matter is land. (c) The law of which country governs the intrinsic validity of the donation? The law of the Philippines lex rei sitae governs the intrinsic validity of the donation. The general rule on lex loci voluntatis (law of the place voluntarily agreed upon) or lex loci intentionis (law of the place intended) yields to the lex rei sitae rule because the subject matter is land. 7. X, Swiss citizen and resident of Baguio City for the last forty years, died in that city leaving six children and real and personal properties located in the Philippines. In his last will and testament executed in Switzerland where the institution of forced heirs does not exist, he designated as his sole heir his eldest son. Can the other children of X question the validity of the will in the probate proceedings filed before our courts? The other children of X cannot question the extrinsic and intrinsic validity of their fathers last will and testament. Extrinsically, the will is valid on the presumption that X had executed the will in accordance with the formalities prescribed in Switzerland, which is all at once the place of execution, his country, and his domicile ( Arts. 17 and 816, NCC). Intrinsically, the will is also valid. The designation of the eldest son as sole heir is valid, and will not properly constitute preterition as the term is technically understood under Philippine law, because after all in Switzerland, of which the deceased was a national, there are no forced or compulsory heirs. It is clearly that the intrinsic validity of this provision shall be governed not by Philippine law but by Swiss law. (Art. 16, par.2) 8. Jeffrey, an American citizen, executed a last will and testament in the Philippines wherein he stated in paragraph 1 thereof that his estate shall be distributed in accordance with Philippine laws. Is such a testamentary provision valid? Such a testamentary provision is not valid because it is contrary to the provision of paragraph 2 of Article 16 of the Civil Code which explicitly declares that it will be the national law of the person whose succession is under consideration that will govern. (Bellis vs. Bellis, 20 SCRA 358)

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9. What is meant by renvoi ? Renvoi literally means a referring back. The problem of renvoi arises when there is a doubt as to whether a reference to a foreign law for decision is a reference to the internal law of said foreign law or is a reference to the whole of the foreign law, including its conflicts rules. 10. X, a Californian domiciled in the Philippines, dies leaving several properties, valued at more than P50 Million, located in Makati City. In his will, he gave all of these properties to his brother Y. To his illegitimate children A and B, he left legacies of P1 Million each. Under the internal law of California, these testamentary dispositions are valid while under the internal law of the Philippines, there is an impairment of the legitime of A and B. Under the conflicts rule of California, the domiciliary principle is followed; the internal law of the Philippines (which is the decedents domicile) respecting legitimes shall, therefore, be applied. On the other hand, under the conflicts rule of the Philippines, the nationality principle is followed; the internal law of California (of which the decedent is a national) which does not recognize the system of legitime shall, therefore, be applied. A Philippine court is now sitting in judgment to determine the validity or invalidity of the above testamentary dispositions. Which law shall be applied? In Aznar vs. Christensen-Garcia, 7 SCRA 95, the Supreme Court accepted the renvoi. As applied to the above problem, the answer is as follows: The law of the Philippines shall be applied. Under the second paragraph of Article 16 of the Civil Code, the national law of X shall govern. According to the internal law of California, the testamentary dispositions are valid, but then its conflicts rule also says that the internal law of Xs domicile shall govern and not the law of California. So, the case is referred back (renvoi) to the internal law of the Philippines. The Philippine court must, therefore, apply its own law as directed in the conflict of law rule of California, Xs national law. HUMAN RELATIONS 11. Romeo Jader was a law student at the UE College of Law from 1984 to 1988. In the first semester of his last year (school year 1987-1988), he failed to take the regular final examination in Practice Court 1 for which he was given an incomplete grade. His incomplete grade in Practice Court 1 notwithstanding, he was allowed to enroll for the second semester as a fourth year law student. On February 1, 1988, he filed an application for the removal of his incomplete grade in Practice Court 1 which was approved by the dean after payment of the required fee. Subsequently, he took the removal examination in Practice Court 1 but his professor belatedly gave him a failing grade. In the meantime, the Dean and the Faculty Members of the College of Law met to deliberate on who among the fourth year students should be allowed to graduate. Jaders name appeared in the tentative list of candidates for graduation for the

Degree of Bachelor of Laws as of second semester with the annotation about his failing grade in Practice Court 1. In the invitation for the graduation ceremonies scheduled on April 16, 1988, the name of Jader appeared as one of the candidates. At the foot of the list of the names of the candidates there appeared the annotation that it was a tentative list, and that degrees will be conferred upon the candidates who satisfactorily completed all the academic requirements as approved by the DECS. Jader attended the graduation ceremonies during which he went up the stage when his name was called, and he was thereafter handed by the dean a rolled white sheet of paper symbolical of the Law Diploma. His relatives took pictures of the occasion and then tendered a blow-out that evening. He thereafter prepared himself for the bar examination. He took a leave of absence without pay from his job and enrolled at a pre-bar review class. But when he learned of the deficiency, he dropped his review class and was not allowed to take the bar examination. Aggrieved by his failure to take the 1988 bar examination, Jader filed a suit for damages against UE. Will the suit prosper? Yes, the suit will prosper. In belatedly informing Jader of the result of his removal examination, particularly at a time when he had already commenced preparing for the bar examinations, the school cannot be said to have acted in good faith. Absence of good faith must be sufficiently established for a successful prosecution by the aggrieved party in a suit for abuse of right under Article 19 of the Civil Code. Good faith connotes an honest intention to abstain from taking undue advantage of another, even though the forms and technicalities of the law, together with the absence of all information or belief of facts, would render the transaction unconscientious. It is the school that has access to those information and it is only the school that can compel its professors to act and comply with its rules, regulations and policies with respect to the computation and the prompt submission of grades. The negligent act of a professor who fails to observe the rules of the school for instance by not promptly submitting a students grade, is not only imputable to the professor but is an act of the school, being his employer. Schools and professors cannot just take students for granted and be indifferent to them, for without the latter, the former are useless. However, while the school is guilty of negligence and thus liable to Jader for the latters actual damages, it is not liable to Jader for moral damages. As a senior law student, Jader should have been responsible enough to ensure that all his affairs, specifically those pertaining to his academic achievement, are in order. Given these considerations, it is not therefore correct to conclude that Jader has suffered untold embarrassment in attending the graduation rites, enrolling in the bar review classes and not being able to take the bar examinations. If Jader was indeed humiliated by his failure to take the bar, he brought this upon himself by not verifying if he has satisfied all the requirements including his school records, before preparing himself for the bar examination. Certainly, taking the bar examinations does not only entail a mental preparation on the

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subjects thereof; there are also prerequisites of documentation and submission of requirements which the prospective examinee must meet. (University of the East vs. Jader, 325 SCRA 804) 12. On March 10, 1993, X purchased a Toyota Corolla from Toyota Shaw for which he made a downpayment of P164,000.00, the balance of the purchase price to be paid in 24 equal monthly installments. X thus issued 24 post-dated checks for the amount of P14,976.00 each. The first was dated April 10, 1991; subsequent checks were dated every 10th day of each succeeding month. To secure the balance of the purchase price, X executed a promissory note and a contract of chattel mortgage over the vehicle in favor of Toyota Shaw. The contract of chattel mortgage, in paragraph 11 thereof, provided for an acceleration clause stating that should the mortgagor default in the payment of any installment, the whole amount remaining shall become due. Toyota Shaw later assigned the note and mortgage contract to RCBC. All the checks dated April 10, 1991 to January 10, 1993 were thereafter encashed and debited by RCBC from Xs account, except for RCBC Check No. 279805 representing the payment for August 10, 1991, which was unsigned. Previously, the amount represented by RCBC Check No. 279805 was debited from Xs account but was later recalled and re-credited to him. Because of the recall, the last two checks, dated February 10, 1993 and March 10, 1993, were no longer presented for payment. This was purportedly in conformity with the banks procedure that once a clients account was forwarded to its account representative, all remaining checks outstanding as of the date the account was forwarded were no longer presented for payment. On the theory that X defaulted in his payment, the check representing the payment for August 10, 1991 being unsigned, RCBC, in a letter dated January 21, 1993, demanded from X the payment of the balance of the debt, including liquidated damages. X refused, prompting RCBC to file an action for replevin and damages. X, in his answer, interposed a counterclaim for damages. Is X entitled to his counterclaim for damages? Yes. Article 1170 of the Civil Code states that those who in the performance of their obligations are guilty of delay are liable for damages. The delay in the performance of the obligation, however, must be either malicious or negligent. Thus, assuming that X was guilty of delay in the payment of the value of the unsigned check, he cannot be held liable for damages. There is no imputation, much less evidence, that X acted with malice or negligence in failing to sign the check. Such omission was mere inadvertence on the part of X. The banks blind and mechanical invocation of paragraph 11 of the contract of chattel mortgage was unwarranted. The banks conduct, in the light of the circumstances of this case can only be described as mercenary. The bank had already debited the value of the unsigned check from Xs account only to re-credit it much later to him. Thereafter, the bank encashed checks subsequently dated, then abruptly refused to

encash the last two. More than a year after the date of the unsigned check, the bank, claiming delay and invoking paragraph 11 of the chattel mortgage contract, demanded from X payment of the value of said check and that of the last two checks, including liquidated damages. This whole controversy could have been avoided if only the bank bothered to call X and ask him to sign the check. Good faith not only in compliance with its contractual obligations, but also in observance of the standard of human relations, for every person to act with justice, give everyone his due, and observe honesty and good faith, behooved the bank. Failing thus, the bank is liable for damages caused to X. These include moral damages for the mental anguish, serious anxiety, besmirched reputation, wounded feelings, and social humiliation suffered by the latter (Rizal Commercial Banking Corp. vs. Court of Appeals, 305 SCRA 449). 13. Eduardo Cojuangco, Jr. is a known businessman-sportsman owning several racehorses which he entered in the sweepstakes races between the periods covering March 6, 1986 to September, 1989. Several of his horses won the races on various dates, landing first, second or third places, respectively, and winning prizes in the aggregate amount of P1.7 Million. Cojuangco sent letters of demand to the Philippine Charity Sweepstakes Office (PCSO) for the collection of the prizes due him. However, Fernando Carrascoso, who was then the Chairman of the PCSO, consistently replied that the demanded prizes are being withheld on advice of the Presidential Commission on Good Government (PCGG) who had earlier issued a sequestration order against Cojuangcos properties. Finally, on January 30, 1991, Cojuangco commenced an action for recovery of his prize winnings and damages against Carrascoso. Is Carrascoso liable for damages under Article 32 of the Civil Code? Yes, Carrascoso is liable for damages under Article 32 of the Civil Code. Under this article, it is not necessary that the public officer acted with malice or bad faith. To be liable, it is enough that there was a violation of the constitutional rights of the petitioner, even on the pretext of justifiable motives or good faith in the performance of ones duties. Cojuangcos right to the use of his property was duly impeded. While Carrascoso may have relied upon PCGGs instructions, he could have further sought the specific legal basis therefore. A little exercise of prudence would have disclosed that there was no writ issued specifically for the sequestration of the racehorse winnings of Cojuangco. There was apparently no record of any such writ covering his racehorses either. The withholding of the prize winnings of Cojuangco without a properly issued sequestration order clearly spoke of a violation of his property rights without due process of law (Cojuangco vs. Court of Appeals, 309 SCRA 602). Article 2221 of the Civil Code authorizes the award of nominal damages to a plaintiff whose right has been violated or invaded by the defendant, for the purpose of vindicating or recognizing that the right, not for indemnifying the plaintiff for any loss suffered. The court may also award nominal damages in every case

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where a property right has been invaded. The amount of such damages is addressed to the sound discretion of the courts, with the relevant circumstances taken into account. 14. When the accused in a criminal action is acquitted, can a civil action for damages for the same act or omission still be instituted by the aggrieved party? It depends. If the acquittal of the accused is on the ground that he did not commit the offense charged, or what amounts to the same thing, if the acquittal proceeds from a declaration in the final judgment that the fact from which the civil liability might arise did not exist, the subsequent institution of a civil action to recover damages is as general rule no longer possible. There are however, two exceptions to this rule. They are: first, where the civil action is based on obligation not arising from the act or omission complained of as a felony (Arts. 31, 2177, NCC); and second, where the law grants to the injured party the right to institute a civil action which is entirely separate and distinct from the criminal. action (Arts. 32, 33, 43 NCC) 15. What is a prejudicial question? What are its elements ? A prejudicial question is a question which arises in a case, the resolution of which is a logical antecedent to the issue involve in said case, and the cognizance of which pertains to another tribunal. (People vs. Aragon, 94 Phil. 357) Section 7, Rule 111 of the Revised Rules on Criminal Procedure which took effect on December 1, 2000 limits a prejudicial question to a previously instituted civil action in order to minimize possible abuses by the subsequent filing of a civil action as an afterthought for the purpose of suspending the criminal action. Under said provision, a prejudicial question has two essential elements, namely: (a) the previously instituted civil action involves an issue similar or intimately related to the issue raised in the subsequent criminal action; and (b) the resolution of such issue determines whether or not the criminal action may proceed. 16. Vicente contracted marriage twice: the first was with Thelma on April 10, 1976, and the second was with Consuelo on June 27, 1991. On October 5, 1992, Consuelo sued Vicente for bigamy. On November 13, 1992, Vicente filed an action for declaration of nullity of his marriage with Thelma. On May 6, 1993, the court declared as null and void the marriage between Vicente and Thelma. In the criminal case for bigamy, however, Vicente was convicted by the court of the crime of bigamy despite his defense that since the first marriage was declared null and void, such marriage is deemed not to have taken place at all, hence, the element of a previous subsisting marriage for the crime of bigamy was absent. The lower court ruled that since Vicente contracted the second marriage before the judicial declaration of nullity of his first marriage, he was a married man when he contracted the marriage, hence, guilty of the crime of bigamy. Is Vicente guilty of bigamy?

Yes, Vicente is guilty of the crime of bigamy. Article 40 of the Family Code requires prior judicial declaration of nullity of a previous marriage before a party may remarry. The clear implication of this is that it is not for the parties, particularly the accused, to determine the validity or invalidity of the marriage. Only the courts may determine and declare the nullity of a marriage. So long as there is no such declaration, the presumption is that the marriage exists. No matter how obvious, manifest or patent the absence of a requisite of marriage is, the intervention of the courts must be resorted to. Since the second marriage was contracted before the judicial declaration of nullity of the first marriage, all the elements of the crime of bigamy are present. ( Mercado vs. Tan, G.R. No. 137110, August 1, 2000) (NOTE: We subscribe to the dissenting opinion of Justice Vitug in the Mercado vs. Tan case. He wrote: The Family Code has not overturned the rule in criminal law and related jurisprudence. Under Article 349 of the Revised Penal Code, bigamy is committed when a person contracted a second or subsequent marriage before the former marriage has been legally dissolved. Only a valid or voidable marriage is dissolved. A marriage void ab initio is not dissolved because in the eyes of the law it never took place. Its nullity is merely declared. To commit bigamy, the first marriage must be a valid or a voidable marriage. Since the first marriage of Vicente was void initio, there was no valid prior marriage subsisting at the time of his second marriage, hence, no crime of bigamy was committed.) CIVIL PERSONALITY 17. Distinguish juridical capacity from capacity to act.

Juridical capacity is the fitness to be the subject of legal relations, while capacity to act is the power to do acts with legal effects. The former is inherent in every natural person and is lost only through death while the latter is merely acquired and may be lost even before death. (Art. 37, NCC) 18. What is the effect if there is a doubt as to which of two persons, who are called to succeed each other, died first? If there is a doubt, as between two or more persons who are called to succeed each other, as to which of them died first, whoever alleges the death of one prior to the other, shall prove the same; in the absence of proof, it is presumed that they died at the same time and there shall be no transmission of rights from one to the other. (Art. 43, NCC) 19. What are the presumptions survivorship under the Rules of Court? on

The presumptions on survivorship under the Rules of Court are those provided for in Rule 132, Sec. 5 (jj). They are as follows: When two persons perish in the same calamity, such as a wreck, battle, or conflagration, and it is not shown who died first, and there are no particular circumstances from which it can be inferred, the survivorship is presumed from the probabilities resulting from the strength and age of the sexes according to the following rules:

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1. If both were under the age of 15 years, the older is presumed to have survived; 2. If both were above the age of 60 years, the younger is presumed to have survived; 3. If one be under 15 and the other above 60, the former is presumed to have survived; 4. If both be over 15 and under 60, and the sexes be different, the male is presumed to have survived; if the sexes be the same, then the older; 5. If one be under 15 or over 60, and the other between these ages, the latter is presumed to have survived. 20. When is the presumption given in Article 43 of the Civil Code applicable? How about the presumptions on survivorship? The presumption given in Article 43 of the Civil Code is applicable if the following requisites are present: first, there is no proof as to which of two persons died first; and second, they are called to succeed each other. The presumptions on survivorship, on the other hand, are applicable if the following requisites are present: first, there is no proof as to which of two persons died firs, second, they must have died during a calamity, and third, they are not called to succeed each other. 21. While in Europe, X, age 58, and his son, Y, were killed in a vehicular accident. There is no proof as to which of them died first. X left a fortune of P6 million. He is survived by: (1) his daughter D; (2) his grandchildren E and F, children of Y; and (3) his grandchildren G and H, children of the predeceased son Z. How shall Xs estate be divided? Applying Article 43 of the Civil Code, it is clear that X and Y are presumed to have died at the same time. The presumption on survivorship under the Rules of Court by virtue of which X is presumed to be the survivor cannot be applied because the two are called upon to succeed each other. Consequently, there shall be no transmission of successional rights from one to the other. Hence, E and F cannot represent Y in the succession. The estate of P6 million will, therefore, be divided as follows: one-half (1/2) thereof shall pass to G and H by right of representation, which they shall divide equally, while the other half shall pass to D. (NOTE: The above answer is clearly unjust as far as E and F are concerned, but Article 43 is clear. Dura lex, sed lex. An exception with respect to representation should have been made.) 22. Jaime, who is 65, and his son Willy, who is 25, died in a plane crash. There is no proof as to who died first. Jaimes only surviving heir is his wife, Julia, who is also Willys mother. Willys surviving heirs are his mother, Julia, and his wife, Wilma. (a) In the settlement of Jaimes estate, can Wilma successfully claim that her late husband, Willy, had a hereditary share since he was much younger than his father and, therefore, should be presumed to have survived longer?

Wilma cannot successfully claim that Willy had a hereditary share in his fathers estate. Under Article 43 of the Civil Code, two persons who are called upon to succeed each other are presumed to have died at the same time, in the absence of proof as to which of them died first. Consequently, there shall be no transmission of rights from one to the other. The above presumption is very different from the presumptions of survivorship embodied in the Rules of Court. If the two persons who died are called upon to succeed each other, regardless of whether they died during a calamity or not, Article 43 of the Civil Code shall apply. If they are not called upon to succeed each other, so long as they died during a calamity, the presumptions of survivorship under the Rules of Court shall apply. (b) Suppose Jaime had a life insurance policy with his wife, Julia, and his son Willy, as the beneficiaries, can Wilma successfully claim that one-half of the proceeds should belong to Willys estate? This time Wilma can invoke the presumptions of survivorship and claim that one-half of the insurance proceeds should belong to Willys estate, under Section 3 (jj), paragraph 5, Rule 131, Rules of Court, as this dispute does not involve succession. Under this presumption, the person between the ages of 15 and 60 years is deemed to have survived the one whose age was over 60 at the time of their death. The estate of Willy which is endowed with judicial personality stands in place and stead of Willy, as beneficiary. 23. Gertrude filed a petition in court for the correction of entries in the record of birth of her niece, Sarah Zita Erasmo. In her petition, she alleged that her sister Maria Rosario Canon had a common-law relationship with a certain Roberto Erasmo, and during such cohabitation, her sister begot Sarah Zita Erasmo; that during the registration of the birth of Sarah Zita, her sister told her that she was not legally married to the father of Sarah Zita; however; the name of Sarah Zita was erroneously entered in her birth record as Sarah Zita Erasmo instead of Sarah Zita Canon. Not only that, the name of Sarah Zitas mother was erroneously entered in her birth record as Rosemarie Canon, instead of Maria Rosario Canon. Thus, the petition was filed to correct the entry in the record of birth of Sarah Zita Erasmo to Sarah Zita Canon, and to correct the name of her mother as appearing in her birth certificate from Rosemarie Canon to Maria Rosario Canon. Will the petition prosper? The petition will not prosper. Where the effect of an entry in a civil registry will change the status of a person form legitimate to illegitimate, as in Sarah Zitas case, the same cannot be granted in summary proceedings. Summary proceedings provided under Rule 108 of the Rules of Court and Article 412 of the Civil Code may be used only to correct clerical, spelling, typographical and other innocuous errors in the civil registry. Substantial alterations or contentious alterations may be allowed only in adversarial proceedings, in which all intended parties are impleaded and due process is observed. In the present case, the changes sought by Gertrude were undoubtedly substantial: first, she

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sought to have the name appearing on the birth certificate changed from Sarah Zita Erasmo to Sarah Zita Canon, thereby transforming the filiation of the child from legitimate to illegitimate. Second, she likewise sought to have the name of Sarah Zitas mother, which appeared as Rosemarie in the child birth record, changed to Maria Rosario. Consequently, an adversarial proceeding is essential in order to fully thresh out her allegations. Sarah Zita and her purported parents should have been parties to the proceedings. After all, it would affect her legitimacy, as well as her successional and other rights. In fact, the change may also embarrass her because of the social stigma that illegitimacy may bring. The rights of her parents over her and over each other would also be affected. Furthermore, a change of name would affect not only the mother but possible creditors, if any. Gertrude correctly cited Article 176 of the Family Code, which states that illegitimate children shall use the surname of their mother. But to enforce such provision, the proper recourse is an adversarial contest. It must be stressed that Rule 108 of the Rules of Court does not contemplate an ordinary civil action but a special proceeding. By its nature, this recourse seeks merely to correct clerical errors, and not to grant or deny substantial rights. To hold otherwise is tantamount to a denial of due process to third parties and the whole world (Republic vs. Labrador, 305 SCRA 438). FAMILY CODE 24. Define marriage. Marriage is a special contract of permanent union between a man and a woman entered into in accordance with law for the establishment of conjugal and family life. It is the foundation of the family and an inviolable social institution whose nature, consequences, and incidents are governed by law and not subject to stipulation, except that marriage settlements may fix the property relations during the marriage within the limits provided by law. ( Art. 1, Family Code) 25. X, a municipal trial court judge, solemnized a marriage outside his courts jurisdiction. Is the marriage valid? Yes, the marriage is valid. The solemnization by a judge of a marriage outside his courts jurisdiction is merely a resultant irregularity in the formal requisite laid down in Article 3 of the Family Code which, while it may not affect the validity of the marriage, may subject the officiating official to administrative liability. (Navarro vs. Domagtoy, 259 SCRA 137.) 26. An American movie actress married an American star in Hollywood. After several months of marriage, she obtained a valid divorce decree in Hollywood. If she should come to the Philippines, will she be allowed to marry here? Yes, provided she can get a certificate of legal capacity to contract marriage here. The certificate must be obtained from the proper American diplomatic or consular official under Article 21 of the Family Code. The divorce will be recognized as valid here in

accordance with her national law and it is valid in the place which granted the same. 27. On Valentines day, 1996, Elias and Fely, both single and 25 years of age, went to the city hall where they sought out a fixer to help them obtain a quickie marriage. For a fee, the fixer produced an ante-dated marriage license for them issued by the Civil Registrar of a small remote municipality. He then brought them to a licensed minister in a restaurant behind the city hall, and the latter solemnized their marriage right there and then. Is the marriage valid? The marriage is valid. The irregularity in the issuance of a marriage license does not adversely affect the validity of the marriage. The marriage license in this case is valid because it was issued by the Civil Registrar (Arts. 3 and 4, Family Code). 28. Explain the requirement of parental advice under the Family Code. Is this requirement indispensable for the validity of the marriage? According to Article 15 of the Family Code, any contracting party between the age of 21 and 25 shall be obliged to ask their parents or guardian for advice upon the intended marriage. If they do not obtain such advice, or if it be unfavorable, the marriage license shall not be issued till after three months following the completion of the publication of the application therefor. A sworn statement by the contracting parties to the effect that such advice has been sought, together with the written advice given, if any, shall be attached to the application for marriage license. Should the parents or guardian refuse to give any advice, this fact shall be stated in the sworn statement. It is evident from the above provision that the requirement of parental advice is not indispensable for the validity of the marriage. Consequently, even if the contracting parties are able to secure a marriage license without the required parental advice and they got married even before the expiration of three months following the completion of the publication of the application for a marriage license, the marriage is perfectly valid, although the parties are criminally, civilly, or administratively liable. 29. May the local civil registrar validly withhold the issuance of a marriage license if he personally knows of an impediment to the marriage of the applicants? No. The duty of the local civil registrar to issue a marriage license is only ministerial. In case of any impediment coming to his knowledge, he is allowed only to note down the particulars thereof and his findings thereon in the application for marriage license, and not to withhold the issuance of the marriage license. The law directs him to issue the marriage license after the completion of the 10-day publication period, unless ordered otherwise by a competent court, at his own instance or at the instance of any interested party (Art. 18, Family Code). 30. Pepito and Teodulfa were married on September 26, 1974. Out of their marriage were born five legitimate children. Teodulfa died on April, 24, 1985. One year and 8 months thereafter,

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or on December 11, 1986, Pepito and Norma got married without a marriage license. In lieu thereof, they executed an affidavit dated December 11, 1986 stating that they had lived together as husband and wife for at least five years and were thus exempt from securing a marriage license. When Pepito died in a car accident on February 19, 1997, his children immediately filed a petition in court for declaration of nullity of his marriage to Norma alleging that their marriage was void for lack of a marriage license. The petition was filed on the assumption that the validity or invalidity of the second marriage would affect the childrens successional rights. (a) What nature of cohabitation is contemplated under Article 34 of the Family Code to warrant the counting of the five-year period in order to exempt the future spouses from securing a marriage license? The five-year period contemplated under Article 34 of the Family Code should be computed on the basis of a cohabitation as husband and wife where the only missing factor is the special contract of marriage to validate the union. In other words, the fiveyear common-law cohabitation period, which is counted back from the date of celebration of marriage, should be a period of legal union had it not been for the absence of the marriage. This five-year period should be the years immediately before the day of the marriage and it should be a period of cohabitation characterized by exclusivity meaning, no third party was involved at any time within the 5 years, and continuity that is, unbroken. Otherwise, if that continuous five-year cohabitation is computed without any distinction as to whether the parties were capacitated to marry each other during the entire five years, then the law would be sanctioning immorality and encouraging parties to have common-law relationships and placing them on the same footing with those who lived faithfully with their spouse ( Ninal vs. Badayog, G.R. No. 133778, March 14, 2000). (b) Were Pepito and Norma exempt from the marriage license requirement? Pepito and Norma were not exempt from the marriage license requirement when they contracted marriage on December 11, 1986. At the time of their marriage, it cannot be said that they had lived with each other as husband and wife for at east five years prior to their marriage on December 11, 1986. From the time Pepitos first marriage was dissolved due to the death of his wife Teodulfa up to the time of his marriage with Norma, only about twenty months had elapsed. Even assuming that Pepito and his first wife Teodulfa had separated in fact, and thereafter Pepito and Norma started living with each other that has already lasted for five years, the fact remains that their five-year cohabitation was not the cohabitation contemplated by law. It should be in the nature of a perfect union that is valid under the law but rendered imperfect only by the absence of the marriage contract. Pepito had a subsisting marriage at the time when he started cohabiting with Norma. It is immaterial that when they lived with each other, Pepito had already been separated in fact from his lawful spouse. The subsistence of a marriage even where there was actual severance of the filial companionship between the spouses cannot make any cohabitation by either spouse with any third party as being one of husband and wife.

(c) Do the children of Pepito have the personality to file the petition to nullify their fathers second marriage? Can they file it even after their fathers death? Although the Family Code is silent as to who can file a petition to declare the nullity of a marriage, Pepitos children nevertheless have the personality to file the petition to nullify their fathers second marriage. Void and voidable marriages are not identical. A voidable marriage is valid until annulled, while a void marriage is deemed not to have taken at all. A voidable marriage cannot be assailed collaterally, while a void marriage can be attacked collaterally. Consequently, a void marriage can be questioned even after the death of either party, but a voidable marriage can be assailed only during the lifetime of the parties to the marriage. The action or defense for nullity is imprescriptible, unlike an action to annul a voidable marriage which prescribes. Only the parties to a voidable marriage can assail it, but any proper interested party may attack a void marriage.

31. Andy and Betty, both Filipinos, got married in the Philippines. After their marriage, Andy acquired American citizenship and later divorced Betty. Can Betty remarry? Article 26, paragraph 2, of the Family Code is susceptible of two interpretations. First, it may apply to a situation where at the time of the marriage, one of the spouses is a Filipino and the other is an alien. Second, it may apply to a situation where both spouses were Filipinos at the time of the marriage, but one of them acquires foreign citizenship. The members of the Civil Code Revision Committee subscribe to the first view; hence; B cannot remarry. (NOTE: The ruling of the Supreme Court in Llorente vs. Llorente, G.R. No. 124371 dated November 23, 2000 has adopted the second view. We submit, however, that the Llorente ruling amounts to judicial legislation.) 32. A and B were married in Baguio City in 1980. In 1984, B was offered a teaching job in Canada which she accepted. In 1989, she applied for and was granted Canadian citizenship. The following year, she sued for divorce from A in a Canadian court. After A was served with summons, the Canadian court tried the case and decreed the divorced. Shortly thereafter, B married a Canadian. Can A marry again in the Philippines? No, he cannot. His case is not covered by Article 26, of the Family Code. For said provision to apply, the spouse who filed for divorce must be a foreigner at the time of the marriage. Since both A and B were both Filipinos at the time of their marriage, the divorce obtained by B did not give A the capacity to remarry under Philippine law.

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33. Sammy and Tessie were married in 1982. Several years and several children later, Tessie filed an action to declare the marriage null and void on the ground of Sammys psychological incapacity. In the case study conducted by the Social Worker, the children described their father as cruel and abusive to them. Tessie submitted herself to a psychologist for evaluation while Sammy did not. Despite the non-submission of Sammy to psychological evaluation, the lower court granted the petition finding Sammy psychologically incapacitated to perform his essential marital obligations mainly because of his failure to find work to support his family and his violent attitude towards Tessie and their children. On appeal, the Court of Appeals reversed the lower court on the ground that the psychological incapacity of Sammy has not been established by the totality of the evidence submitted. This is because while psychological incapacity must be medically or clinically identified, and sufficiently proven by experts, Sammy was not subjected to any psychological or psychiatric evaluation. The incapacity of Sammy was based solely on interviews conducted by the psychologist with Tessie. Is psychological or psychiatric evaluation of the party alleged to be psychologically incapacitated required as a condition sine qua non for such declaration? No. The psychological incapacity of a party must be established by the totality of the evidence presented. There is no requirement under the law that the party alleged to be psychologically incapacitated should submit to a psychiatric or psychological evaluation. (Marcos vs. Marcos, G.R No. 136490, October 19, 2000) 34. Avelino and Erlinda were married in 1975. They begot two children. A week after their wedding, Avelino started leaving his wife without explanation. He would disappear for months, suddenly reappear for a few months, then disappear again. During the time when he was with his family, he indulged in drinking sprees with his friends and would return home drunk. He would force his wife to submit to sexual intercourse and if she refused, he would inflict physical injuries on her. In October 1993, Avelino left his family again and that was the last they heard from him. Erlinda was constrained to look for a job as a manicurist to support herself and her children. Finally, Erlinda learned that Avelino was imprisoned for some crime, and that he escaped from jail on October 22, 1985. A certification was issued to the effect that Avelino remains at-large. On July 3, 1990, Erlinda filed a petition for judicial declaration of nullity of marriage on the ground of psychological incapacity under Article 36 of the Family Code. Since Avelino could not be located, summons was served by publication. Subsequently, a hearing was conducted to establish jurisdictional facts. Thereafter, on the date set for presentation of evidence, only Erlinda

and her counsel appeared. Erlinda testified and presented her sister-in-law, Evelyn, as her only witness. Thereafter, the court rendered judgment declaring the marriage of Erlinda and Avelino void under Article 36 of the Family Code. Was the trial court correct in declaring the marriage of Erlinda and Avelino void under Article 36 of the Family Code? The trial court erred in declaring Erlindas marriage to Avelino void on the ground of psychological incapacity, this because the alleged psychological incapacity of Avelino has not been proven to exist. In Republic vs. Court of Appeals and Molina, 268 SCRA 198, the Supreme Court laid down the following guidelines in the interpretation and application of Article 36 of the Family Code: (1) The burden of proof to show the nullity of the marriage belongs to the plaintiff. Any doubt should be resolved in favor of the existence and continuation of the marriage and against its dissolution and nullity. (2) The root cause of the psychological incapacity must be (a) medically or clinically identified, (b) alleged in the complaint, (c) sufficiently proven by experts and (d) clearly explained in the decision. (3) The incapacity must be proven to be existing at the time of the celebration of the marriage. (4) Such incapacity must also be shown to be medically or clinically permanent or incurable. (5) Such illness must be grave enough to bring about the disability of the party to assume the essential obligations of marriage. (6) The essential marital obligations must be those embraced by Articles 68 up to 71 of the Family Code as regards the husband and wife as well as Articles 220, 221 and 225 of the same code in regard to parents and their children. (7) Interpretation given by the National Appellate Matrimonial Tribunal of the Catholic Church in the Philippines, while not controlling or decisive, should be given respect by our courts.; and (8) The trial court must order the prosecuting attorney or fiscal and the Solicitor General to appear as counsel for the State. Taking into consideration these guidelines, it is evident that Erlinda failed to comply with the above-mentioned evidentiary requirements. Erlinda failed to comply with guideline No. 2 which requires that the root cause of psychological incapacity must be medically or clinically identified and sufficiently proved by experts. Since no psychiatrist on medical doctor testified as to the alleged psychological incapacity of her husband, there is no way by which Avelinos psychological incapacity can be determined. (Republic vs. Dagdag, 351 SCRA 425) 35. Is judicial declaration of nullity of a void marriage necessary before a party thereto can remarry?

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Yes. Article 40 of the Family Code expressly provides that the absolute nullity of a previous marriage may be invoked for purposes of remarriage on the basis solely of a final judgment declaring such previous marriage void. Consequently, if a party to a void marriage enters into a subsequent marriage without obtaining a final judgment declaring the nullity of the previous marriage, said subsequent marriage is void. 36. May a petition for declaration of nullity of marriage be filed for a purpose other than remarriage? Yes, a petition for declaration of nullity of marriage under Article 40 of the Family Code may be resorted to even for a purpose other than remarriage. Such a petition may be filed even if the intention of the petitioner-spouse is to recover his/her rightful share in the community property or conjugal partnership. Crucial to the interpretation of Article 40 of the Family Code is the position of the word solely therein. As it is placed, the word solely is meant to qualify the words final judgment, and not the phrase for purposes of remarriage (Domingo vs. Court of Appeals, 226 SCRA 572). 37. May a petition for declaration of presumptive death under Article 41 of the Family Code be filed for a purpose other than remarriage? No. Unlike in an action for declaration of nullity of a void marriage under Article 40 of the Family Code, an action for declaration of presumptive death under Article 41 is available only for the sole purpose of remarriage. 38. In an action for annulment of marriage, may the respondent who failed to file an answer be declared in default? No. It is a fundamental principle in the law on marriage that a party in an action for annulment of marriage cannot be declared in default because the granting of annulment of marriage by default is fraught with dangers of collusion. The reason for the law is obvious from the policy that marriage is not a mere contract, but an inviolable social institution in which the State is virtually interested because the State finds no anchor than on good, solid, and happy families (Tuazon vs. Court of Appeals 256 SCRA 158). 39. If a marriage is annulled or declared void by a final judgment, how soon may a party thereto remarry? If a marriage is annulled or declared void by a final judgment, a party thereto may contract a valid subsequent marriage upon compliance with the recording requirements under Article 52 of the Family Code. Under this article, the judgment of annulment or of absolute nullity of the marriage, the partition and distribution of the properties of the spouses, and the delivery of the childrens presumptive legitimes shall be recorded in the appropriate civil registry and registries of property. Under Article 53 of the Family Code, failure to comply with the foregoing recording requirement will render the subsequent marriage void. 40. H and W are married. W sued for legal separation. Upon receipt of the summons, H filed a motion for extension of 20 days to file his

answer. This was granted. H again moved for another extension of 30 days. This was again granted, but he was given only a period of 20 days. Unaware of the order, he again moved for another extension of 15 days from the expiration of the 30 days. The same was denied and H was declared in default. Was the default order proper? The default order was not proper. Article 60 of the Family Code provides that no decree of legal separation shall be promulgated upon stipulation of facts or by confession of judgment. This provision reflects the call for the intervention of the state attorneys or fiscals to take steps to prevent collusion between the parties, especially in cases of uncontested proceedings for legal separation. Article 58 of the same Code further mandates that an action for legal separation shall in no case be tried before six (6) months shall have elapsed since the filling of the petition in order to provide the parties a cooling-off period. (Pacete vs. Cariaga et.al., 231 SCRA 321) 41. Rosa and Ariel were married in the Catholic Church of Tarlac, Tarlac on January 5, 1988. In 1990, Ariel went to Saudi Arabia to work. There, after being converted into Islam, Ariel married Mystica. Rosa learned of the second marriage of Ariel on January 1, 1991 when Ariel returned to the Philippines with Mystica. Rosa filed an action for legal separation on February 5, 1994. (a) Does Rosa have legal grounds to ask for legal separation? Yes. The contracting of a subsequent bigamous marriage by Ariel, whether in the Philippines or abroad, is a ground for legal separation under Article 55 (7) of the Family Code. Whether the second marriage is valid or not, Ariel having converted into Islam, is immaterial. Moreover, the abandonment of Rosa by Ariel for more than one (1) year is also a ground for legal separation unless upon returning to the Philippines, Rosa agreed to cohabit with Ariel which is allowed under the Family Code. In this case, there was no such cohabitation and therefore, no condonation. (b) Has the action prescribed? The action has not yet prescribed. Under Article 57 of the Family Code, the aggrieved spouse must file the action within five (5) years from the occurrence of the cause. In the instant case, the subsequent marriage of Ariel could not have occurred earlier than 1990, the year when he went to Saudi Arabia. Hence, Rosa has until 1995 to bring the action for legal separation under the Family Code. 42. In 1991, Arnulfo discovered that his wife, Beatrice, was having illicit relations with Cesar. Beatrice then left the conjugal abode. In 1995, Arnulfo again caught his wife having carnal knowledge with Digno. Arnulfo then told Beatrice he was filing suit for legal separation. Beatrice agreed on condition that she would not be charged criminally with adultery. The case for legal separation was then filed. When the Public Prosecutor outside the court asked her why she failed to file an answer, Beatrice replied that she was in conformity with the petition for legal separation. The lower court and the Court of

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Appeals both denied the petition for legal separation on the ground that there was a confession of judgment under Article 60 of the Family Code. The case was appealed to the Supreme Court. Will the appeal prosper? The appeal will prosper and the petition for legal separation should be granted in view of the presence of other evidence. Here there was only an extra-judicial admission and not a confession of judgment (which usually happens when the defendant appears in court and confesses the right of plaintiff to judgment or files a pleading agreeing to plaintiffs demand). And even if the statement of Beatrice really constitutes a confession of judgment, still inasmuch as there is evidence of sexual infidelity on the part of the wife independently of such statement, the decree of legal separation should be granted since it would be premised not on her confession, but on the strength of the evidence of sexual infidelity on the part of the wife. Indeed what the law prohibits is a judgment based exclusively or mainly on the confession of judgment. If a confession can automatically and by itself defeat the suit, any defendant who opposes the legal separation will immediately confess judgment, purposely to prevent the giving of the decree. 43. H and W were married in 1968. In 1983, they bought a 421-square meter lot from X whereon they built their residential house. In 1988, they sold one-half of said lot to U. The latter immediately occupied said one-half portion and built his own house thereon. Over the objection of W and while she was in Manila seeking employment, her husband sold to Y the remaining one-half portion of their lot, including their residential house thereon. Aggrieved by the news of her husbands philandering and the sale of their house and remaining lot, W returned home and stayed at their house with her three (3) children. H was then living with another woman. Shortly upon her return, W received notice from Y about the sale of their house lot with a demand that she and her children vacate the property. For refusing to accede to Ys demand, W was later sued by Y before the barangay lupon. There, an amicable settlement was reached whereby W promised to vacate the house. Believing, however, that she received the shorter end of the bargain, W went to the barangay captain to question her signature on the amicable settlement. The barangay captain told her, however, that he could no longer do anything about the matter. Unperturbed, W pressed and requested that the settlement be annulled but nothing was done about it. So it was that when W and her children still refused to vacate their house, Y filed with the MTC a motion for execution of the amicable settlement. W retaliated by filing an action for the nullification of the sale of their house and lot alleging that the same is conjugal property. Y contended that the deed of sale is not void ab initio but is merely voidable, and that such contract was ratified by W when she entered into an amicable settlement with him.

Is the contract of sale between H and Y void or merely voidable? The contract of sale between H and Y is void and not merely voidable. The nullity of such contract of sale is premised on the absence of Ws consent to such sale. To constitute a valid contract, the Civil Code requires the concurrence of the following elements: (1) cause; (2) object; and (3) consent; the last element being indubitably absent in the case at bar. The contract properly falls within the ambit of Article 124 of the Family Code which provides, among others, that the sale of conjugal property must have the written consent of the other spouse. In the absence of such written consent or authority, the disposition or encumbrance of conjugal property is void. However, the transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as a binding contract upon the acceptance by the other spouse or authorization by the court before the offer is withdrawn by either or both offerors. Ys contention that the contract was ratified by W is not well-taken. The deed of sale executed by H cannot be ratified, even by an amicable settlement. The participation by some barangay officials in the amicable settlement cannot validate an invalid act. Moreover, it cannot be denied that the amicable settlement entered into by W and Y is a contract. It is a direct offshoot of the deed of sale. By express provision of law, such a contract is also void. Article 1422 of the Civil Code provides that a contract which is a result of a previous illegal contract is also void and inexistent. (Guiang vs. Court of Appeals, 291 SCRA 372) 44. Distinguish between Articles 147 and 148 of the Family Code with respect to: (a) the unions governed by each article; and (b) the rules governing the property relations of the unions. (a) As to unions covered: Article 147 applies to two (2) relationships. The first is when a man and a woman who are capacitated to marry each other live exclusively as husband and wife without the benefit of marriage. The second is when a man and a woman live together under a void marriage where the parties do not have an existing marriage with another. This provision does not cover void bigamous marriages which fall under Article 148. Article 148, on the other hand, applies to five (5) kinds of relationships, namely; (a) bigamous marriages; (b) adulterous relationships; (c) relationships in a state of concubinage; (d) relationships where both man and woman are married to other persons; and (e) multiple alliances of the same man. (b) As to property relations: Under Article 147, wages and salaries earned by either spouse during the cohabitation shall be owned by the parties in equal shares and shall be divided equally between them even if only one party earned such. In the absence of proof to the contrary, properties acquired while the parties are living together shall be presumed to have been obtained by their joint

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efforts, work or industry, and shall be owned by them in equal shares. For purposes of the article, a party who did not participate in the acquisition thereof if the formers efforts consisted in the care and maintenance of the family and of the household. Under the article, neither party can encumber nor dispose by acts inter vivos of his or her share in the property acquired during the cohabitation and owned in common without the consent of the other, until after the termination of their cohabitation. If only one party is in good faith in a void marriage falling under the article, the share of the party in bad faith shall be forfeited in favor of their common children. In case of default or waiver by any or all of the common children or their descendants, each vacant share shall belong to the respective surviving descendants. In the absence of descendants, such share shall belong to the innocent party. Under Article 148, only properties acquired through the actual joint contribution of money, property, or industry shall be owned in proportion to the respective contributions of the parties. Hence, unlike the rule in Article 147, the wages or salaries of one party is his or her exclusive property. Another distinction is that the care by one party of the home or spiritual or moral inspiration provided to the other is not included in the article. However, the same presumption of equal contribution applies in the absence of proof to the contrary. If one party is validly married to another, his or her share in the co-owned properties accrues to the absolute community or conjugal partnership of the existing valid marriage. If the party in bad faith is not validly married to another, his or her share will be forfeited in the same manner as provided in Article 147. 45. X, a police officer, contracted two marriages during his lifetime: the first was on June 20, 1969, with Y, with whom he had two children; and the second was on November 10, 1992, with Z, with whom he had no children in their almost ten year cohabitation starting way back in 1982. In 1988, X became ill and bedridden due to diabetes complicated by pulmonary tuberculosis. He died on November 23, 1992, under the care of Z, who spent for his medical and burial expenses. Both Y and Z filed claims for monetary benefits and financial assistance pertaining to X from various government agencies. Y was able to collect a total of P146,000.00 while Z received a total of P21,000.00. On December 14, 1993, Z filed a case for collection of sum of money against Y praying that Y be ordered to return to her at least one-half of the P146,000.00 which she (Y) received as Xs death benefits. During the trial, Z admitted that her marriage to X took place during the subsistence of, and without first obtaining a judicial declaration of nullity of, the marriage between X and Y. She, however, claimed that the marriage of X and Y is void ab initio because the same was solemnized without the required marriage license. In support thereof, Z presented the marriage certificate of X

and Y which bears no marriage license number, and a certification by the Local Civil Registrar of San Juan, Metro Manila that his office has no record of marriage license of X and Y who were married in his municipality on June 20, 1969. (a) Does the court have the jurisdiction to pass upon the validity of the two marriages contracted by X even if the case involved only a collection of sum of money? Yes, the court has sufficient authority to pass upon the validity of the two marriages in the instant case, as the same is essential to the determination of who is rightfully entitled to the death benefits of X. Under Article 40 of the Family Code, the absolute nullity of a previous marriage may be invoked for purposes of remarriage on the basis solely of a final judgment declaring such previous marriage void. Meaning, where the absolute nullity of a previous marriage is sought to be invoked for purposes of contracting a second marriage, the sole basis acceptable in law for said projected marriage to be the free from legal infirmity, is a final judgment declaring the previous marriage void. However, for purposes other than remarriage, no judicial action is necessary to declare an absolute nullity. For other purposes, such as but not limited to the determination of heirship, legitimacy or illegitimacy of a child, settlement of estate, dissolution of property regime, or a criminal case for that matter, the court may pass upon the validity of marriage even after death of the parties thereto, and even in a suit not directly instituted to question the validity of said marriage, so long as it is essential to the determination of the case (Nial vs. Badayog, 328 SCRA 122). In such instances, evidence must be adduced, testimonial or documentary, to prove the existence of grounds rendering such a previous marriage an absolute nullity. These need not be limited solely to an earlier final judgment of a court declaring such previous marriage void. (b) Assuming that the marriage between X and Y is void for lack of a marriage license, is the marriage between X and Z valid? The marriage between X and Z is likewise void. The declaration in the instant case of nullity of the previous marriage of X and Y does not validate the second marriage of X with Z. The fact remains that their marriage was solemnized without first obtaining a judicial decree declaring the marriage of X and Y void. (c) Is Z entitled to at least one-half of the amount of P146,000.00 pertaining to X as his death benefits? One of the effects of the declaration of nullity of marriage is the separation of the property of the spouses according to the applicable property regime. Considering that the two marriages are void ab initio, the applicable property regime would not be absolute community or conjugal partnership, but rather, be governed by the provisions of Articles 147 and 148 of the Family Code. Article 147 of the Family Code applies to unions of parties who are legally capacitated and not barred by any impediment to contract marriage, but whose marriage is nonetheless void for other reasons, like the absence of a marriage license. Article 148 refers to the property regime of bigamous marriages, adulterous relationships, relationships in a

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state of concubinage, relationships where both man and woman are married to other persons, and multiple alliances of the same married man. Considering that the marriage of X and Z is a bigamous marriage, having been solemnized during the subsistence of a previous marriage then presumed to be valid (between X and Y), the application of Article 148 is therefore in order. The disputed P146,000.00 are clearly remunerations, incentives, and benefits from government agencies earned by X as a police officer. Unless Z presents proof to the contrary, it could not be said that she contributed money, property or industry in the acquisition of these monetary benefits. Hence, they are not owned in common by Z and X, but belong to X alone and Z has no right whatsoever to claim the same. By intestate succession, the said death benefits of X shall pass to his legal heirs. And Z, not being the legal wife of X, is not one of them. As to the property regime of X and Y, Article 147 of the Family Code governs. In contrast to Article 148, Article 147 provides that wages and salaries earned by either party during the cohabitation, shall be owned by the parties in equal shares and will be divided equally between them, even if only one party earned the wages and the other did not contribute thereto. Conformably, even if the disputed death benefits were earned by X alone as a government employee, Article 147 creates a co-ownership in respect thereto, entitling Y to share one-half thereof. Such being the case, onehalf of the subject death benefits goes to Y as her share in the property regime, and the other half pertaining to X shall pass, by intestate succession, to his legal heirs, namely, his children with Y. (Carino vs. Carino, 351 SCRA 127) 46. Spouses Mario and Lourdes Fernandez brought an action to eject Guillerma Tumlos from an apartment building which is allegedly owned by them as their conjugal property. In her defense, Guillerma claims that she cannot be ejected from the property because she is a co-owner thereof as evidenced by a contract to sell wherein it was stated that she is a co-vendee of the property in question together with Mario. Guillerma alleged that the property in question was acquired by her and Mario when they were having an affair. Is the apartment building co-owned by Guillerma and Mario the same having been acquired during their cohabitation? Guillerma is not a co-owner of the apartment building. Under Article 148 of the Family Code, a man and a woman who are not legally capacitated to marry each other, but who nonetheless live together conjugally, may be deemed co-owners of the property acquired during the cohabitation only upon proof that each made an actual contribution to its acquisition. Mere cohabitation without contribution will not result in co-ownership. Article 148 of the Family Code will govern the property relations of the parties even though their cohabitation and acquisition of property occurred before the effectivity of the Family Code, unless it is shown that to do so will impair vested rights. 47. If a marriage is annulled or declared void by a final judgment, what happens to

donations propter nuptias made in favor of one of the prospective spouses? There are two conflicting provisions under the Family Code. Article 86, paragraphs 1 and 3, of the Family Code provides that the donations propter nuptias made in favor of one of the prospective spouses is revocable at the instance of the donor if the marriage is annulled or declared void and the donee contracted the marriage in bad faith. On the other hand, Article 43, paragraph 3, in relation to Articles 45 and 50 of the Family Code, provides that the donation propter nuptias is revoked by operation of law if the marriage is annulled or declared void and the donee contracted the marriage in bad faith. It is respectfully submitted that Article 86 of the Family Code prevails over Article 43, the same being later in point of time. This being so, the donation is revocable only at the instance of the donor. 48. A donation propter nuptias of a parcel of land was given by X, the prospective husband, to Y, his prospective wife. Due to a quarrel, the marriage was called off. Is the donation automatically revoked? I distinguish. If the donation propter nuptias was incorporated in X and Ys marriage settlement (if one had been executed), the donation is rendered void by the non-celebration of the marriage. ( Art. 81, Family Code) On the other hand, if the donation propter nuptias was made independently of the marriage settlement, the donation is revocable only at the instance of the donor. (Art. 86 (1), Family Code) 49. H and W married under the absolute community of property regime. During the marriage, W inherited P1 Million from her father. From said amount, she used two hundred thousand to buy a diamond ring. Is the diamond ring included in the community property? There are two views. Under Article 92 (1) of the Family Code, the property acquired by inheritance is expressly excluded from the community property. The diamond ring, having been bought with the money received by W as inheritance, is therefore excluded. This is because there was only a substitution of values which does not change the character of the property as an inheritance. Under Article 92 (2) of the Family Code, however, jewelry forms part of the community property. Since the diamond ring is a jewelry, the same forms part of the community property. It is respectfully submitted that the first view is the better view because it is more in accord with law. 50. Teodora died on March 5, 1983 without any ascendant or descendant. She was survived only by her husband Martin, her nephew Rene, and niece Corazon, children of her deceased brother

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Ramon. Upon the death of Teodora, her husband Martin executed an affidavit of extrajudicial settlement adjudicating unto himself, allegedly as sole heir, a parcel of land belonging to Teodora, as a consequence of which a title was issued in his name. Thereafter, Martin sold the property to Marcela who obtained a title in her own name. Subsequently, Rene and Corazon filed an action for reconveyance claiming that they are entitled to inherit one-half of the property by right of representation. In resisting the action, Marcela assailed the legitimacy of Rene and Corazon claiming that they were not legitimate children of Ramon, Teodoras brother. As judge, how would you rule on Marcelas defense? As judge, I would brush aside Marcelas defense. The legitimacy of Rene and Corazon cannot be properly controverted in the present action for reconveyance in view of the settled rule that the issue of legitimacy of a person cannot be attacked collaterally and that there must be an action specifically filed for that purpose. Granting that Rene and Corazon are not the legitimate children of Ramon, the fact is that Marcela is not even the proper party to impugn such legitimacy. (Tison vs. Court of Appeals, 276 SCRA 582) 51. H and W, husband and wife, owned several properties. When H died (the wife W died earlier), his alleged daughter M and his collateral relatives fought over his estate. Hs relatives contend that M is not the biological daughter of H and W, hence, not entitled to inherit from Hs estate. M, in her defense, invokes Article 166 of the Family Code which provides for the grounds to impugn the legitimacy of the child; Article 170 which provides for the period within which an action to impugn the legitimacy of a child may be brought; and Article 171 which provides for the instances when the heirs are allowed to impugn the legitimacy of a child. Is M correct in citing Articles 166, 170, and 171 of the Family Code? No. The articles cited by M contemplate a situation where the husband denies as his own the child of his wife. It does not apply to a case where it is being claimed that the child is neither the child of the husband nor of the wife. (Benitez-Badua vs. Court of Appeals, 299 SCRA 468) 52. A and B, both 14 years old, eloped. A child C was born to them when they were already 16 years old. When they reached the age of 19, they contracted marriage with the consent of their parents. Was C legitimated by the marriage of his parents? Yes. Children who may be legitimated are those whose parents at the time of their conception were not disqualified by any impediment to contract marriage. Article 5 of the Family Code provides that any male or female at the age of 18 years and older, not under any impediment mentioned in Articles 37 and 38 of the Family Code, may contract marriage. Since age is only determinative of capacity to marry and is not an impediment as mentioned under Articles 37 and 38, child C was legitimated by the subsequent marriage of his parents.

53. On October 14, 1988, Vircel Andres, in her capacity as the legal guardian of the minor, Glen Andres de Asis, brought an action for maintenance and support against Manuel de Asis docketed as Civil Case No. Q-88-935 before the RTC of Quezon City. In his answer, Manuel denied paternity of the minor child and theorized that he cannot be required to provide support for him. Because of Manuels denial of paternity, Vircel forthwith submitted to the court a manifestation withdrawing her complaint. Thereafter, she and Manuel agreed to move for the dismissal of the case for which reason the court issued an order dismissing Civil Case No. Q-88-935 with prejudice. On September 7, 1995, another complaint for maintenance and support was brought against Manuel de Asis, this time in the name of Glen Andres de Asis, represented by her mother Vircel Andres, docketed as Civil Case No. C-16107 before the RTC of Caloocan City. Upon receipt of the summons, Manuel promptly filed a motion to dismiss on the ground of res judicata alleging that Civil Case No. C-16107 is barred by the prior judgment in Civil Case No. Q-88-935 which was earlier dismissed with prejudice. If you were the judge, will you grant the motion to dismiss? If I were the judge, I will deny the motion to dismiss. Article 301 of the Civil Code, the law in point, provides that the right to receive support cannot be renounced nor can it be transmitted to a third person. To allow renunciation or transmission or compensation of the family right of a person to support is virtually to allow either suicide or conversion of the recipient to a public burden. This is contrary to public policy. Furthermore, Article 2035 of the Civil Code provides that future support cannot be the subject of a compromise. Hence, the manifestation of Glens mother in the first case, which acknowledged that it would be futile to pursue the complaint for support in view of Manuels denial of paternity, amounted to renunciation as it severed the vinculum that gives the minor child the right to claim support from his putative father. (Manuel de Asis vs. Court of Appeals, 303 SCRA 176) 54. May the right to receive support be levied upon on attachment or execution? No. Under Article 205 of the Family Code, the right to receive support as well any money or property obtained as such support shall not be levied upon on attachment or execution. However, support in arrears are not covered by the provision considering that the need for support was already attended to in the past, notwithstanding failure to receive payments of support. In case of contractual support or that given by will, the excess in amount beyond that required for legal support shall be subject to levy on attachment or execution. 55. Augusto and Gregorio are brothers. The former is married to Maria, while the latter, a widower, is maintaining a common-law relationship with Teodora. Due to a property dispute, Augusto and Maria filed a complaint for damages against Gregorio and Teodora. In their answer, Gregorio and Teodora alleged that the complaint failed to state a cause of action because

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it failed to allege that earnest efforts toward a compromise had been made, considering that Augusto and Gregorio are brothers. Gregorio and Teodora cited the provisions of Article 151 of the Family Code in support of their request for the dismissal of the complaint. Acting thereupon, the trial court dismissed the complaint on the ground that the complaint failed to allege that earnest efforts toward a compromise had been made, and that the same was unsuccessful. Is Article 151 of the Family Code applicable in the above problem? Article 151 of the Family Code does not apply in the above problem because it is not exclusively among family members. The inclusion of Teodora as defendant and Maria as plaintiff takes the case out of the ambit of Article 151 of the Family Code. Under this provision, the phrase members of the same family refers to the husband and wife, parents and children, ascendants and descendants, brothers and sisters, whether of the full or half-blood. Consequently, Teodora and Maria are considered strangers to the family of Augusto and Gregorio, for purposes of Article 151 of the Family Code. (Hontiveros vs. RTC of Iloilo City, Br. 25, 309 SCRA 340) 56. Jaime and Lina are husband and wife. They had three children Juan, Carlos, and Patricia. The couple had several conjugal properties one of which was Lot 4291 worth more than P12 Million. When Jaime suffered a stroke, he lapsed into a comatose condition without motor and mental faculties. In need of money to defray the expenses for her husbands medical treatment and hospitalization, Lina looked for ways to sell or mortgage Lot 4291 to raise funds. When Juan learned about his mothers desire of selling Lot 4291, he immediately filed a petition in court for the guardianship of his father Jaime in order to prevent the loss and dissipation of Jaimes real and personal assets. In his petition he prayed that his mother Lina be appointed guardian and that in the meantime , no property of Jaime should be sold or alienated , particularly Lot No. 4291. A few days later, Lina also filed her own petition for declaration of incapacity of her husband Jaime and for her assumption of the sole powers of administration of their conjugal properties. Lina also asked the court for authorization to sell Lot 4291 to defray the medical and other expenses of her husband. Linas petition was set for hearing in a summary proceeding pursuant to Article 124 in relation to Article 253 of the Family Co0de. After hearing, the court granted Linas petition and declared Jaime incapacitated and unable to participate in the administration of their conjugal properties. The court likewise authorized Lina to assume sole powers of administration and to sell Lot 4291. When Juan learned of the order, he immediately went to court to question it. He said that the proper remedy should have been the appointment of a judicial guardian of his father for which he has already filed a petition. According to Juan, the procedural rules in

summary proceedings under Article 253 in relation to Article 124 of the Family Code are not applicable. Said proceedings apply to situations where a spouse is absent, or separated in fact or has abandoned the other or consent is withheld or cannot be obtained. If the spouse is comatose, the special proceedings on guardianship under the Rules of Court which requires due process, particularly the need for a notice and hearing, should apply. Is Juan correct? The Supreme Court said yes. The situation contemplated under Article 124 of the Family Code is one where the spouse is absent, or separated in fact or has abandoned the other or consent is withheld or cannot be obtained. Such rules do not apply to cases where the non-consenting spouse is incapacitated or incompetent to give consent. In this case. The trial court found that Jaime is incompetent due to his comatose condition. In such a case, the proper remedy is judicial guardianship proceedings under Rule 93 of the Rules of Court. (Uy vs .Court of Appeals, G.R. No. 109557, November 29, 2000) Even assuming that the rules of summary proceedings under the Family Code may apply, the law provides that the wife who assumes sole powers of administration has the same powers and duties as a guardian under the Rules of Court, applying by analogy Article 61 of the Family Code. Consequently, a spouse who desires to sell property as such administrator must observe the procedure for the sale of the wards estate which is required of judicial guardians under Rule 95. Not only did the court fail to observe the procedure on guardianship, it did not also comply with the requirement of the summary proceeding under the Family Code: the court did not serve notice on the incapacitated spouse and it did not require him to show cause why the petition should not be granted. Absent an opportunity to be heard, the decision rendered by the trial court is void for lack of due process. (NOTE: There is something wrong with the pronouncement of the Supreme Court in Uy vs. Court of Appeals because it is clear under Article 124 of the Family Code that in the event one spouse is incapacitated or otherwise unable to participate in the administration of the conjugal properties, the other spouse may assume sole powers of administration. The rules on guardianship apply only when the spouse who assumed sole powers of administration desires to sell a real property belonging to the conjugal partnership. There was no need for the Supreme Court to rule that Article 124 of the Family Code is not applicable. Moreover, the court failed to realize that there was no sense in complying with the requirement of notice to the spouse because the spouse whose consent is to be obtained in this case was in comatose condition.)

DOMESTIC ADOPTION ACT 57. What is Republic Act No. 8552? Republic Act No. 8552 is the law known as the Domestic Adoption Act of 1998. (Sec. 1, R.A. 8552)

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58.

What is meant by a child legally available for adoption?

The following may be adopted under the Domestic Adoption Act of 1998: 1. Any person below 18 years of age who has been administratively or judicially declared available for adoption; and 2. The legitimate spouse by the other spouse; son/daughter of one

A child legally available for adoption refers to a child who has been voluntarily or involuntarily committed to the Department of Social Welfare and Development (DSWD) or to a duly licensed and accredited child-placing or child-caring agency, freed of the parental authority of his/her biological parent(s) or guardian or adopter(s) in case of rescission of adoption (Sec. 3(b), ibid). 59. Who may adopt under the Domestic Adoption Act? The following persons may adopt under the Domestic Adoption Act of 1998: 1. Any Filipino citizen (a) of legal age; (b) in full possession of full civil capacity and legal rights; (c) of good moral character; (d) has not been convicted of any crime involving moral turpitude; (e) emotionally and psychologically capable of caring for children; (f) at least 16 years older than the adoptee; and (g) who is in position to support and care for his/her children in keeping with the means of the family. The requirement of 16-year age difference between the adopter and the adoptee may be waived when the adopter is the biological parent of the adoptee, or is the spouse of the adoptees parent (Sec. 7(a), ibid). 2. Any alien possessing the same qualifications as above-stated for Filipino nationals; provided, (a) his/her country has diplomatic relations with the Republic of the Philippines; (b) he/she has been living in the Philippines for at least three (3) continuous years prior to the filing of the application for adoption and maintains such residence until the adoption decree is entered; (c) he/she has been certified by his/her diplomatic or consular office or any appropriate government agency that he/she has the legal capacity to adopt in his/her own country; and (d) his/her government allows the adoptee to enter his/her country as his/her adopted son/daughter (Sec. 7(b), ibid). 3. The guardian with respect to the ward after the termination of the guardianship and clearance of his/her financial accountabilities (Sec. 7(c), ibid). 60. May an alien adopt under the Domestic Adoption Act even if he has not complied with the requirements of residency and certification of qualification to adopt in his/her own country? Yes, the requirements of residency and certification of the aliens qualification to adopt in his/her own country may be waived for the following adopters: 1. a former Filipino citizen who seeks to adopt a relative within the fourth (4th) degree of consanguinity or affinity; 2. one who is married to a Filipino citizen and seeks to adopt jointly with his/her spouse a relative within the fourth (4 th) degree of consanguinity or affinity (Sec. 7(b), (i), (ii), (iii), ibid). 61. Who may be adopted under the Domestic Adoption Act?

3. An illegitimate son/daughter of the adopter to improve his/her status to that of legitimacy; 4. A person of legal age, if prior to the adoption he has been consistently considered and treated by the adopter(s) as his/her own child since minority; 5. A child whose previously rescinded; or adoption has been

6. A child whose biological or adoptive parent(s) has died; provided, that no proceeding shall be initiated within (6) months from the time of death of said parent(s) (Sec. 8, ibid). 62. adoption? Whose consent is necessary to the

The written consent of the following persons is necessary to the adoption of a legally available child. 1. The adoptee, if ten (10) years of age or over; 2. The biological parent(s) of the child, if known, or the legal guardian, or the proper government instrumentality which has legal custody of the child; 3. The legitimate and adopted sons/daughters, ten (10) years of age or over, of the adopter(s) and adoptee, if any; 4. The illegitimate sons/daughters, ten (10) years of age or over, of the adopter if living with said adopter and the latters spouse, if any; and 5. The spouse, if any, of the person adopting or to be adopted (Sec. 9, ibid).

63. What are the grounds for rescission of adoption? The adoption may be rescinded, at the instance of the adoptee, on the following grounds: (a) Repeated maltreatment by the undergone counseling: physical adopter(s) and despite verbal having

(b) Attempt on the life of the adoptee; (c) Sexual assault or violence; or (d) Abandonment and failure to comply with paternal obligations. 64. adoption? May the adopter(s) rescind the

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No. Adoption, being in the best interest of the child, shall not be subject to rescission by the adopter(s). However, the adopters may disinherit the adoptee for causes provided in Article 919 of the Civil Code (2nd par., Sec. 19, ibid). INTER-COUNTRY ADOPTION ACT 65. What is Republic Act No. 8043? Republic Act No. 8043 is the law known as the Inter-Country Adoption Act of 1995 (Sec. 1, R.A. 8043). 66. adoption? What is meant by inter-country

3. has the capacity to act and assume all rights and responsibilities of parental authority under his national law and has undergone the appropriate counseling from an accredited counselor in his/her country; 4. has not been convicted of a crime involving moral turpitude; 5. law; 6. is in a position to provide for the proper care and support and give the necessary moral values and example to all his children, including the child to be adopted; 7. agrees to hold the basic rights of the child as embodied under Philippine laws, the U.N. Convention on the Rights of the Child, and to abide by the rules and regulations issued to implement the provisions of the law on inter-country adoption; 8. comes from a country with whom the Philippines has diplomatic relations and whose government maintains a similarly authorized and accredited agency and that adoption is allowed under his/her national law; and 9. possesses all the qualifications and none of the disqualifications provided herein and in other applicable Philippine laws (Sec. 9, ibid). 72. Where should the application for adoption be filed? is eligible to adopt under his/her national

Inter-country adoption refers to the socio-legal process of adopting a Filipino child by a foreigner or a Filipino citizen permanently residing abroad where the petition is filed, the supervised trial custody is undertaken, and the decree of adoption is issued outside the Philippines (Sec. 3(a), ibid). 67. What is meant by a child for purposes of the Inter-Country Adoption Act? A child, under the Inter-Country Adoption Act, means a person below fifteen (15) years of age unless sooner emancipated by law (Sec. 3(b), ibid).

68. What is meant by a legally-free child for purposes of the Inter-Country Adoption Act? A legally-free child means a child who has been voluntarily or involuntarily committed to the DSWD in accordance with the Child and Youth Welfare Code (Sec. 3(f), ibid). 69. What is meant by matching for purposes of the Inter-Country Adoption Act? Matching refers to the judicious pairing of the adoptive child and the applicant to promote a mutually satisfying parent-child relationship (Sec. 3(g), ibid). 70. Who may be adopted under the InterCountry Adoption Act? Only a legally-free child may be the subject of inter-country adoption (Sec. 8, ibid). 71. Who may adopt under the InterCountry Adoption Act? Any alien or Filipino citizen permanently residing abroad may file an application for intercountry adoption of a Filipino child if he/she: 1. is at least twenty-seven (27) years of age at the time of the application and at least sixteen (16) years older than the child to be adopted, unless the adopter is the parent by nature of the child to be adopted or the spouse of such parent; 2. if married, his/her spouse must jointly file for the adoption;

An application to adopt a Filipino child shall be filed either with the Philippine Regional Trial Court having jurisdiction over the child, or with the InterCountry Adoption Board, through an intermediate agency, whether governmental or an authorized and accredited agency, in the country of the prospective adoptive parents, which application shall be in accordance with the requirements set forth in the implementing rules and regulations to be promulgated by the Board. The Rules of Court shall apply in case of adoption by judicial proceedings (Sec. 10, ibid). 73. When may a child be considered for matching? No child shall be considered to be matched to a foreign adoptive parent unless it is shown that the child cannot be adopted locally (Sec. 11, ibid). PROPERTY 74. What is a hidden treasure? By hidden treasure is understood, for legal purposes, any hidden and unknown deposit of money, jewelry, or other precious objects, the lawful ownership of which does not appear (Art. 439, NCC). 75. X found a hidden treasure on Ys land. How will the treasure be divided if X is a usufructuary of the land? If X is a usufructuary of the land and he himself discovered the hidden treasure, he is entitled to one-half thereof. This is because with respect to the hidden treasure which is found on the land held in

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usufruct, the usufructuary is considered as a stranger (Art. 566, NCC). However, if another person discovers the hidden treasure, one-half goes to the finder and the other half goes to the naked owner. The usufructuary in such a case is not entitled to anything. 76. What is alluvium? Alluvium is the soil deposited or added to the lands adjoining the banks of rivers, and gradually received as an effect of the current of the waters. By law, the accretion is owned by the owner of the estate fronting the river bank (Art. 457, NCC). 77. What is avulsion? Avulsion is the process whereby the current of a river, creek, or torrent segregates from an estate on its bank a known portion of land and transfers it to another estate. (Art. 459, NCC) 78. Why is avulsion sometimes called delayed accession?

81. When is partition of a property owned in common at the instance of a co-owner not allowed? A co-owner may demand partition of the property owned in common at any time, except in the following cases: (1) If by agreement among the coowners, for a period not exceeding ten (10) years, partition is prohibited; (2) When partition is prohibited by the donor or testator, for a period not exceeding twenty (20) years, from whom the property came; (3) When partition is prohibited by law; (4) When physical partition would render the property unserviceable; and (5) When the legal nature of the common property does not allow partition. 82. X, Y, and Z are co-owners of a parcel of land. In 1985, they sold said parcel of land to A with a right to repurchase. Only X exercised the right to repurchase and thereafter obtained a title over the property. Was the co-ownership terminated when X repurchased the property? No. The redemption of the land by X did not terminate the co-ownership nor did it give him title to the entire land subject of the co-ownership ( Paulmitan vs. Court of Appeals, 215 SCRA 866 ). The right of repurchase may be exercised by a co-owner with respect to his share. When X acquired the property by repurchasing it, he merely acquired the right to be reimbursed for the amount equivalent to the shares of his co-owners Y and Z (Adille vs. Court of Appeals, 157 SCRA 455). Furthermore, the co-ownership is not terminated by the redemption of the land by X, redemption not being a mode of terminating a coownership (Mariano vs. Court of Appeals, 222 SCRA 736). 83. Is an existing mortgage constituted on a real property a bar to its partition? No. The existence of a real estate mortgage on a real property is not a bar to its partition by the coowners. As a matter of fact, the partition of said real property by the co-owners does not operate to extinguish the mortgage constituted thereon. Under Article 2126 of the Civil Code, a mortgage directly and immediately subjects the property upon which it is imposed on whoever the possessor may be, to the fulfillment of the obligation for whose security it is constituted (Pailano vs. Court of Appeals, 223 SCRA 732). Furthermore, Article 494 of the Civil Code provides that no co-owner shall be obliged to remain in the co-ownership. Each co-owner may demand at any time the partition of the thing owned in common, insofar as his share is concerned. 84. Is oral partition of a property in coownership allowed? Yes, oral partition of a property in coownership is allowed. There is no law that requires partition among the co-owners be in writing to be valid. The requirement under Section 1, Rule 75 of the Rules of Court that partition be put in a public document and registered with the Registry of Property has for its purpose the protection of creditors and at the same time the protection of the co-owners themselves against tardy claims (Vda. De Reyes vs. Court of Appeals, 199 SCRA 646).

Avulsion is sometimes referred to as delayed accession in the sense that if the owner abandons the detached land, or fails to remove the same within two years, the land to which it has been attached acquires ownership thereof (Art. 459, NCC). 79. What is adjunction? Adjunction is the process by virtue of which two movable things belonging to different owners are united in such a way that they form a single object (Art. 466, NCC). 80. What are the rules in adjunction? Adjunction is governed by the following rules: (1) If the two things can be separated without injury, their respective owners may demand their separation (Art. 469, par. 1, NCC). (2) If the two things cannot be separated without injury, and both owners had acted in good faith, the owner of the principal thing acquires the accessory, indemnifying the owner of such accessory for its value (Art. 466, NCC). Nevertheless, if the accessory thing is much more precious than the principal thing, the owner may demand its separation, even though the principal thing may suffer some injury (Art. 469, par. 2, NCC). (3) If the owner of the accessory thing has made the incorporation in bad faith, he loses the thing incorporated and shall have the obligation to indemnify the owner of the principal thing for the damages which the latter may have suffered (Art. 470, NCC). (4) If the one who has acted in bad faith is the owner of the principal thing, the owner of the accessory thing may choose between the former paying him its value or that his accessory thing be separated, even though it will cause damage or injury to the principal thing. Moreover, the owner of the principal thing shall be liable for damages ( Art. 470, NCC). (5) If both owners had acted in bad faith, their respective rights shall be determined as though both had acted in good faith (Art. 470, NCC).

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85. Is partition of real property covered by the Statute of Frauds? An oral agreement for the partition of a property in co-ownership is valid and enforceable upon the parties. The Statute of Frauds has no operation in this kind of agreement because partition is not a conveyance of property but simply a segregation and designation of the part of the property which belong to the co-owners (Vda. De Espina vs. Abaya, 196 SCRA 312). 86. X purchased a property adjacent to that of Y. After a relocation survey, X discovered that a portion of the lot he purchased was encroached upon by Ys house. Y refused to vacate the lot despite verbal and written demands, hence, an ejectment case was filed against him by by X. Y contends that under Art. 448 of the Civil Code, he has the pre-emptive right to purchase the portion encroached upon. Is Y correct? Y is not correct. Article 448 of the Civil Code is unequivocal that the option to sell the land on which another builds, plants or sows in good faith, belongs to the landowner. This advantage in Article 448 of the Civil Code is accorded the landowner because his right is older, and by the principle of accession, he is entitled to the ownership of the accessory thing (Benitez vs. Court of Appeals, 266 SCRA 242). 87. A, B, and C are the registered owners of adjacent lots. Lot No. 24, 414 square meters in area, is registered in the name of A. Lots Nos. 25 and 26, with an area of 415 and 313 square meters, respectively, are registered in the name of B. On Lot No. 25 which is adjacent to Lot No. 24, B constructed his house. Adjacent to Lot No. 26 is Lot No. 27, 417 square meters in area, and is registered in the name of C. B constructed his house in 1984 and C in 1983. In 1985, A constructed his house on Lot No. 24. During the construction, he discovered that the concrete fence and side pathway of the adjoining house of B encroached on the entire length of the eastern side of his property. Forthwith, A informed B of the encroachment. B claimed, however, that his house, including its fence and pathway, were built within his lot. In a relocation survey, the surveyor found that Lot No. 24 lost approximately 25 square meters on its eastern boundary; that Lot No. 25, although found to have encroached on Lot No. 24, did not lose nor gain any area; that Lot No. 25 lost some three (3) square meters which, however, were gained by Lot No. 27 on its western boundary. In short, Lots Nos. 25, 26 and 27 moved westward to the eastern boundary of Lot No. 24. What are the rights and obligations of the parties? B constructed his house in 1983, and he built it in the belief that it was entirely within the boundaries of his land (Lot No. 25). In short, he had no knowledge that he encroached on As land. He is therefore deemed to be a builder in good faith until the time A informed him of his encroachment on the latters

property. C, on the other hand, built his house on his lot (Lot No. 27) before A and B. There is no evidence that C was aware that when he built his house he knew that a portion thereof encroached on Bs adjoining lot. Good faith is always presumed, and upon him who alleges bad faith on the part of the possessor rests the burden of proof. All the parties are presumed to have acted in good faith. Their rights must therefore be determined in accordance with the appropriate provisions of the Civil Code. Consequently, A, as owner of Lot No. 24, may choose to purchase the improvements made by B on his land, or sell to B the subject portion. If buying the improvement is impractical as it may render Bs house useless, then A may sell to B that portion of Lot No. 24 on which the latters improvement stands. If B is unwilling or unable to buy the lot, then he must vacate the land and, until he vacate, he must pay rent to A. A, however, cannot compel B to buy the land if its value is considerably more than the value of the portion of his house constructed thereon. If the value of the land is much more than Bs improvement, then B must pay reasonable rent. If A and B do not agree on the terms of the lease, they may go to court to fix the same. In the event that A elects to sell to B the subject portion of his lot, the price must be fixed at the prevailing market value at the time of payment, not at the time of taking. This is a case of an owner who has been paying real estate taxes on his land but has been deprived of the use of a portion of this land for years. It is but fair and just to fix compensation at the time of payment. Article 448 and the same conditions abovestated also apply to B as owner and possessor of his lot and C as builder of the improvement that encroached on a portion of Bs land ( Ballatan vs. Court of Appeals, 304 SCRA 34). 88. X owns a parcel of registered land adjacent to that of Y. X constructed a building on his lot. Unfortunately, a portion of the building was constructed on Ys lot. Thereafter, X sold his lot to Z. (a) Can X be considered a builder in good faith under Article 448 of the Civil Code? Yes, X can be considered a builder in good faith even if his lot is covered by a Torrens Title. Good faith is a state of mind. Unless one is versed in the science of surveying, no one can determine the precise extent or location of his property by merely examining his paper title. (b) Can Z, a mere buyer, avail of the benefits of Article 448 of the Civil Code? Yes. Upon delivery of the property to Z, the latter acquired ownership of the property and he is deemed to have stepped into the shoes of the seller X in regard to all the rights of ownership, including the right to compel Y, the owner of the lot encroached upon, to exercise either of the two options under Article 448 of the Civil Code, that is, to appropriate the improvement after payment of proper indemnity or to sell the portion encroached upon. (c) Can Y demand the removal of the encroaching structures?

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Y, the lot owner, cannot demand the removal of the encroaching structures. Such right is available only if and when he chooses to compel the builder to buy the land at a reasonable price but the latter fails to pay such price (Technogas Phils. vs. Court of Appeals, 268 SCRA 5). (NOTE: If Y, the landowner, opted to appropriate the improvements, the builder has the right to retain the lot until he is paid of his necessary and useful expenses. He is not even required to pay rentals in the meantime). 89. As the term is used in the Civil Code, what is meant by just title? As used in the Civil Code, the term just title has two different meanings. In the Chapter on Possession, just title means a true and valid title sufficient to transfer ownership, i.e., the transferor himself is the owner of the thing sold or transferred. In the Chapter on Prescription, however, just title means a colorable title, or a title where, although there was a mode of transferring ownership, the transfer is deemed defective because the transferor is not the owner. 90. May the true owner of a movable property recover possession of his property from the present possessor? If so, is there a need to reimburse said possessor? The true owner of a movable property may recover possession of his property without reimbursement from a possessor in bad faith or even a possessor in good faith if said owner had lost the property or been unlawfully deprived of it, the acquisition being from a private person. The owner may also recover possession of his movable property but should reimburse the possessor if such possessor acquired the property in good faith at a public sale or auction (Art. 559, NCC). However, the owner can no longer recover possession of his movable property, even if he offers to reimburse, whether or not he had lost his property or had been unlawfully deprived of it, if the possessor had acquired the property in good faith by purchase from a merchants store, or in fairs, or markets in accordance with the Code of Commerce and Special Laws (Art. 1505, NCC and Arts. 85, 86 Code of Commerce); or if the owner is precluded from denying the sellers authority; or if the possessor had obtained the goods because he was an innocent purchaser for value and a holder of a negotiable document of title to the goods (Art. 1518, NCC). 91. Teresa entrusted to Marivic a diamond ring to be sold on commission basis. Instead of selling the ring, however, Marivic pledged it to a pawnshop. Can Teresa recover the ring from the pawnshop? Can the pawnshop insist on payment first of Marivics loan? Teresa can recover the ring from the pawnshop. The Civil Code is explicit. The legitimate owner who had lost the thing or who had been

unlawfully deprived thereof can recover it even from a possessor in good faith (Art. 559, NCC). Moreover, the pawnshop cannot even insist on reimbursement of the amount for which the thing was pledged. In the first place, the contract of pledge is void because the pledgee (Marivic) is not the owner of the thing pledged; neither has she been authorized to pledge it. Consequently, one essential requisite for the validity of pledge is lacking ( Art. 2085, NCC). In the second place, because of enormous profits, pawnshop operators must necessarily assume the corresponding risks. The thing pledged might have been robbed, stolen, or embezzled. Hence, the pawnshop cannot insist on reimbursement of the amount for which the thing was pledged (Dizon vs. Suntay, 47 SCRA 160). 92. What is meant by condominium? According to the Condominium Act ( Republic Act No. 4726), a condominium is an interest in real property consisting of a separate interest in a unit in a residential, industrial, or commercial building and an undivided interest in common, directly or indirectly, in the land on which it is located and in other common areas of the building. A condominium may include, in addition to the foregoing, a separate interest in the other portions of such real property. 93. What are the usufructuary? obligations of a

A usufructuary has the following obligations: 1. At the commencement of the usufruct , a usufructuary is obliged to: (a) make an inventory of the property; and (b) give security (Art. 583, NCC). 2. During the pendency of the usufruct, a usufructuary is obliged to: (a) take care of the thing with the diligence of a good father of a family; (b) make ordinary repairs on the property; (c) notify the owner in case there is an urgent need for extra-ordinary repairs on the property; (d) pay the annual charges and taxes on the property and those considered as lien on the fruits; (e) notify the owner of any act of a third person that may be prejudicial to the ownership of the property; and (f) pay the expenses, costs, and liabilities in suits with regard to the usufruct ( Arts. 589, 592, 593, 596, 601 and 602, NCC). 3. At the termination of the usufruct, a usufructuary is obliged to deliver the thing, without prejudice to the right of retention pertaining to him or his heirs for taxes and extraordinary expenses which should be reimbursed (Art. 612, NCC). 94. When can the owner of an estate claim a compulsory right of way? Under Articles 649 and 650 of the Civil Code, the owner of an estate may claim a compulsory easement of right of way only after he or she has established the existence of the following requisites: (a) the estate is surrounded by other immovables and is without an adequate outlet to a public highway; (b) proper indemnity is paid; (c) the isolation is not due to the proprietors own acts; and (d) the right of way claimed is at a point least prejudicial to the servient estate and, insofar as consistent with the law, where the distance from the dominant estate to a public highway may be the shortest.

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95. Xeres is the owner of a house and lot located at No. 10 Visayas Avenue Extension, Quezon City, where he and his family have been residing from 1961 to the present. Yantoc, on the other hand, is the owner of a subdivision at Barrio Culiat along Visayas Avenue which included Lots 1 and 2, located adjacent to the property of Xeres. Lots 1 and 2 were originally part of a private road known as Road Lot 2. Xeres and his family were using this road lot as their access to the nearest public road. When Visayas Avenue become operational as a national road in 1979, Yantoc filed a petition in court to convert Road Lot 2 into residential lots. After the petition was granted, Road Lot 2 was converted into residential lots designated as Lot 1 and Lot 2. Subsequently, Yantoc sold both lots to Zorro. When Zorro started enclosing the lots with a concrete fence, Xeres objected and immediately instituted an action for compulsory easement of right of way. He contends that the closure of Lots 1 and 2 will make it more burdensome for him and his family to reach the nearest public road because the alternate path is much longer, circuitous and inconvenient; that from Visayas Avenue they have to pass by a narrow alley, turn right to a private road, then enter a vacant lot, and turn right again to exit from the vacant lot until they reach their property. Does Xeres have the right to demand a compulsory easement of right of way over Lots 1 and 2? No. To be entitled to a compulsory easement of right of way, the conditions provided under Articles 649 and 650 of the Civil Code must be established. These are: (1) that the dominant estate is surrounded by other estates and has no adequate outlet to a public highway; (2) that proper indemnity has been paid; (3) that the isolation was not due to the acts of the proprietor of the dominant estate; and (4) that the right of way claimed is at a point least prejudicial to the servient estate and, insofar as consistent with the law, where the distance from the dominant estate to a public highway may be the shortest. The burden of proving the existence of these requisites lies in the owner of the dominant estate. In the present case, the first element is clearly absent because an outlet already exists. This outlet, though circuitous and longer in distance than the one being claimed, is already sufficient for the needs of the dominant estate. Admittedly, the proposed right of way over Zorros property (Lots 1 and 2) is the most convenient and the more direct route to Visayas Avenue. However, it is not enough that the easement be where the way is shortest. It is more important that it be where it will cause the least prejudice to the servient estate. In order to justify the imposition of an easement of right of way, there must be real, not fictitious or artificial, necessity for it. Mere inconvenience for the dominant estate is not what is required by law as the basis for setting up a compulsory easement. Even in the face of necessity, if it can be satisfied without imposing the easement, the same should not be imposed (Cristobal vs. Court of Appeals, 291 SCRA 122). 96. May an existing easement of right of way be extinguished by the opening of an adequate outlet to a public highway?

An easement of right of way provided for in a contract of sale is a voluntary easement. As such, it cannot be extinguished by the opening of an adequate outlet to a public highway. The opening of an adequate outlet can extinguish a legal or compulsory easement but not a voluntary easement (La Vista Association vs. Court of Appeals, Sept. 5, 1997). 97. Why is a negative easement acquirable by prescription despite its being non-apparent? Generally, negative easements cannot be acquired by prescription because they are nonapparent. Still, the very existence of Article 621 of the Civil Code (insofar as it relates to negative easements), prove that in certain cases, and for purposes of prescription, there are negative easements that may indeed be considered apparent, not because there are visible signs of their existence but because of the making of a notarial prohibition. The notarial prohibition makes apparent what really is non-apparent. 98. What is the effect of the sale of the dominant estate with respect to the easement constituted thereon? The sale of the dominant estate does not extinguish the easement (Tanedo vs. Bernad, Aug. 30, 88). Article 631 of the Civil Code provides for the modes of extinguishing an easement. Sale of the dominant estate is not one of them. Furthermore, Article 624 of the Civil Code provides that there must be a statement in the title of conveyance of either the dominant estate or the servient estate abolishing or extinguishing a easement. Hence, despite the sale of the dominant estate, the use of the servient estate is continued by operation of law. 99. Can there be an easement over another easement? An easement over a usufruct? A usufruct over an easement? As to the first question: Yes, there can be an easement over another easement. Article 629 of the Civil Code provides that the owner of the servient estate must abstain from anything that will render the use of the easement more inconvenient to the owner of the dominant estate. This is a negative easement which requires the owner of the servient estate not to impair in any manner whatsoever the use of the easement (such as a right of way). As to the second question: No, there cannot be an easement over a usufruct, but there can be an easement over a property held in usufruct. As to the third question: No, there cannot be a usufruct over an easement, but a usufruct may be established in a property burdened by an easement. 100. X claims ownership over a parcel of land by virtue of a deed of donation propter nuptias from his parents and that he had been in open, continuous, notorious, adverse, and actual possession of the subject property. The court later declared void the deed of donation for failure to comply with the formalities prescribed by law, but maintained that the subject property belongs to X by virtue of acquisitive prescription.

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Was the court correct in declaring that X acquired ownership of the property donated by acquisitive prescription? Yes. Prescription in general is a mode of acquiring (or losing) ownership of a property and other real rights through the lapse of time in the manner and under the conditions laid down by law, namely: that the possession should be in the concept of owner and that such possession be public, peaceful, uninterrupted, and adverse. Even assuming that the donation propter nuptias is void for failure to comply with the formal requisites, it could still constitute a legal basis for adverse possession. With a clear and convincing evidence of possession, a private document of donation may serve as a basis for a claim of ownership (Heirs of Maningding vs. Court of Appeals, 276 SCRA 601). 101. May the heirs of the donor sue the heirs of the donee for revocation of the donation if there is a violation of any restriction in the deed of donation? Yes. Under Article 764 of the Civil Code, the donor or his heirs have the personality to question the violation of any restriction in the deed of donation. Consequently, the right to revoke may be transmitted to the heirs of the donor and may be exercised against the heirs of the donee, and the action prescribes after four years from the violation of the condition ( Garrido vs. Court of Appeals, 236 SCRA 450). 102. Can the donor impose upon the donee the condition that the property shall not be alienated within a period of one hundred years, otherwise the property shall revert to the donors estate? No. The restriction is patently unreasonable and constitutes an undue restriction on the right of the donee to dispose of the property donated, which right is an indispensable attribute of ownership. Such a prohibition against alienation, in order to be valid, must not be perpetual or for an unreasonable period of time. 103. If a donation is to take effect after the donors death, does it follow that said donation is a donation mortis causa and should therefore follow the forms and solemnities of wills? No. Even if the donor says that the donation is to take effect after his death, where from the body of the instrument of donation it is to be gathered that the main consideration of the donation is not the death of the donor but rather the services rendered to him by the donee or his affection for the latter, then the donation should be considered as inter vivos. The condition that the donation is to take effect only after the death of the donor should be interpreted to mean that the possession and enjoyment of the fruits of the property donated should take place only after the donors death (Vita vs. Montanano, 194 SCRA 180). 104. On July 27, 1997, Pedro mailed in Manila a letter to his brother, Jose, a resident of Iloilo City, offering to donate a vintage sports car which the latter had long been wanting to buy from the former. On August 5, 1997, Jose called Pedro by cellular phone to thank him for his generosity and to inform him that he was sending by mail his letter of acceptance. Pedro never received that letter because it was never mailed. On August 14,

1997, Pedro received a telegram from Iloilo informing him that Jose had been killed in a road accident the day before (August 13, 1997). (a) Is there a perfected donation? There is no perfected donation. Under Article 748 of the Civil Code, the donation of a movable may be made orally or in writing. If the value of the personal property donated exceeds five thousand pesos, the donation and the acceptance shall be made in writing. Assuming that the value of the thing donated, a vintage sports car, exceeds P5,000.00, then the donation and the acceptance must be made in writing. In this instance, the acceptance of Jose was not in writing, therefore, the donation is void. Upon the other hand, assuming that the sports car costs less than P5,000.00, then the donation may be made orally, but still, the simultaneous delivery of the car is needed and there being none, the donation was never perfected. (b) Will your answer be the same if Jose did mail his acceptance letter but it was received by Pedro in Manila days after Joses death? Yes, the answer will be the same. If Joses mail containing his acceptance of the donation was received by Pedro days after Joses death, then the donation is still void because under Article 734 of the Civil Code, the donation is perfected the moment the donor knows of the acceptance by the donee. The death of Jose before Pedro could receive the acceptance indicates that the donation was never perfected. Under Article 746 of the Civil Code, acceptance must be made during the lifetime of both the donor and the donee. 105. X donated to Y a parcel of land. The donation was made in a public instrument, while the acceptance made by Y was embodied in the same public instrument. The deed of donation was entitled Deed of Donation Inter Vivos. There is, however, a provision in the deed that the donee shall not sell or encumber the property within ten (10) years after the death of the donor. The deed of donation was presented for recording in the Registry of Property, and the Register of Deeds canceled the donors title and, in its place, issued a new one in the name of the donee Y. That notwithstanding, X retained the owners duplicate copy of the new title, as well as the property itself. Is the donation inter vivos or mortis causa? The donation is mortis causa and not inter vivos. As such, it must comply with the formalities of a will, and since it had not, the donation was void and could not effectively serve as basis for the cancellation of the donors certificate of title and the issuance in its place of another certificate of title in the name of the donee. In the instant case, nothing of any consequence was transferred by the deed of donation to Y, the ostensible donee. He did not get possession of the property donated. He did not acquire the right to the fruits thereof, or any other right of dominion over the property. More importantly, he did not acquire the right to dispose of the property this would accrue to him only after ten (10) years from the donors death. Indeed, he never even laid hands on the certificate of title to the same. He was therefore simply a paper

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owner of the donated property. All these circumstances, including the explicit provisions of the deed of donation reserving the exercise of rights of ownership to the donor and prohibiting the sale or encumbrance of the property until ten (10 years after his death ineluctably lead to the conclusion that the donation in question was a donation mortis causa, contemplating a transfer of ownership to the ownership to the donee after the donors death.

There is no requirement under the law that the notary public be present at the execution of the will; his presence is required only for the acknowledgement. 110. Is the notary public required to read the will, or to know the contents thereof, before he notarizes the same? The notary public is not required, not even allowed, to read the will or to know the contents thereof, unless the testator permits him to do so. The only instance when the notary public is required to read the will is in the case contemplated by Article 808 of the Civil Code regarding a blind testator. 111. May the notary public himself be an instrumental witness in a last will and testament? No. The notary public before whom the will was acknowledged cannot be considered as the third instrumental witness since he cannot acknowledge before himself his having witnessed and signed the will. If the third witness were the notary public himself, he would have to acknowledge his having signed the will in front of himself. This cannot be done because he cannot split his personality into two so that one will appear before the other to acknowledge his participation in making the will. Furthermore, the function of the notary public is, among others, to guard against illegal or immoral arrangements. This function would be defeated if the notary public is one of the instrumental witness (Cruz vs. Villasenor, 54 SCRA 31). 112. In the execution of a holographic will, may the mechanical act of drafting the will be left to someone other than the testator? The mechanical act of drafting a holographic will may be left to someone other than the testator, as long as the testator himself copies the draft in his own handwriting, dates it, and signs it. 113. The probate of a will is opposed on the ground that the testator was at the time of the execution of the will extremely ill, in an advanced stage of tuberculosis complicated with severe intermittent attacks of asthma, that he was too sick to rise unaided from his bed; that he needed assistance even to raise himself to a sitting position; and that during the paroxysms of asthma he could not speak. If you were the judge, would you allow the probate of the will? If I were the judge, I would allow the probate of the will. The physical weakness of the testator in no way establishes his mental incapacity or lack of testamentary capacity. Testamentary capacity is the capacity to comprehend the nature of the transaction in which the testator is engaged at the time, to recollect the property to be disposed of, and the persons who would naturally be supposed to have claims upon the testator. 114. The attention clause of a will reads: x x x and he (the testator) signed at the bottom of the aforesaid will in our presence and we at his request did the same in his presence and in that of each other as witnesses to the will, and lastly, the testator, as well as we, as witness, signed in the same manner on the left margin of each sheet. It

SUCCESSION 106. When is succession to the estate of a deceased person transmitted? The right to the succession is transmitted from the moment of the death of the decedent ( Art. 777, NCC) thru testamentary, intestate, or mixed succession (Art. 778, NCC). 107. X, as vendor, and Y, as vendee, entered into a contract to sell a parcel of land. Despite Ys full payment of the purchase price, X refused to execute the proper deed of sale in Ys favor for which reason Y sued for specific performance. Upon receipt of the summons, X promptly moved to dismiss the complaint on the ground that the property subject of the contract formed part of the estate of his father, in respect of which a petition for probate was pending in court, and that consequently, the contract to sell is void because it was not approved by the probate court. Both X and Y were aware of the pending probate proceedings at the time of the execution of the contract to sell. If you were the judge, will you grant the motion to dismiss? If I were the judge, I will deny the motion to dismiss considering that the contract to sell is valid. The rule is settled that hereditary rights are vested in the heir or heirs from the moment of the decedents death (Art. 777, NCC). In the instant case, X became the owner of his hereditary share the moment his father died. Thus, the lack of judicial approval does not invalidate the Contract to Sell because X has the substantive right to sell the whole or part of his share in the estate of his late father. Furthermore, the rule is settled that the sale made by an heir of his share in an inheritance, subject to the pending administration, in no wise stands in the way of such administration (Opulencia vs. Court of Appeals, 293 SCRA 385). 108. Is there a need to state in the attestation clause of a notarial will that the person delegated by the testator to sign in his behalf did so in the presence of the testator? No. A statement in the attestation clause of a notarial will that the person delegated by the testator to sign in his behalf did so in the presence of the testator is not essential for the validity of said will. It is enough that it be proved in court that this was what happened. 109. Is it necessary that the notary public be present when the testator executes his will?

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is contended that this clause does not state that the testator and the witness signed on the left margin of each sheet in the presence of each other. Is the attestation clause sufficient? The attestation clause is sufficient because the words in the same manner mean nothing but that the testator and the witnesses signed on the left margin of each sheet of the will in the same manner in which they signed at the bottom thereof, that is, the testator in the presence of the witnesses and the latter in the presence of the testator and of each other (Fernandez vs. Vergel de Dios, 46 Phil. 922). 115. What are joint wills? Are they valid in the Philippines? Joint wills are those which contain in one instrument the will of two or more persons jointly signed by them. They are void under Article 818 of the Civil Code. Moreover, joint wills executed by Filipinos in a foreign country shall not be valid in the Philippines, even though authorized by the laws of the country where they may have been executed (Art. 819, NCC). 116. What is meant by preterition? What are its effects? Preterition or pretermission is the omission, whether intentional or not, of a compulsory heir in the inheritance of a person. Preterition of a compulsory heir annuls the institution of heirs, but legacies and devises shall remain valid insofar as they are not inofficious (Art. 854, NCC). 117. When representation is proper, what is the extent of the representatives inheritance? It depends. In testate succession, the right of representation covers only the legitime (Arts. 856, 1035, NCC). In intestate succession, however, it covers the entire share of the person represented. The whole descend to the representative by the rules of intestate succession. (NOTE: The right of representation, when proper, is given both to legitimate and illegitimate descendants of illegitimate children (Arts. 902, NCC). But in intestate succession, illegitimate descendants of legitimate children cannot inherit by right of representation because of the barrier under Art. 992 of the Civil Code.) 118. Testator left an estate worth P30,000.00 with two (2) legitimate children surviving, A and B. The testator provides in his will that he institutes as his sole heirs his children A and B and his friend F. Upon the testators death, B repudiates his share in the inheritance. How shall the estate be distributed? The legitime in this case is one-half of the estate or P15,000.00. Upon Bs repudiation of his share, the entire legitime will go to A in his own right. The institution of heirs affects only the free portion, which under the will should be divided into three (3)

equal parts if all succeeded, or P5,000.00 each. But upon the repudiation by B, his share accrues to A and F, who will therefore each get P5,000.00 in their own right under the terms of the will, and P2,500.00 by accretion (share of B divide into two), or a total of P7,500. In the final distribution, therefore, A will get a total of P22,500.00 and F will have P7,500.00 (Art 1021, NCC). 119. What is the effect if in a will, the testator imposed upon the heir an absolute condition not to contract a first or subsequent marriage? An absolute condition not to contract a first or subsequent marriage shall be considered as not written unless such condition has been imposed on the widow or widower by the deceased spouse, or by the latters ascendants or descendants (Art. 874, NCC). 120. What is meant by reserva troncal? Reserve troncal is a system of reserva by virtue of which an ascendant who inherits from his descendant property which the latter may have acquired by gratuitous title from another ascendant, or a brother or a sister, is obliged to reserve such property as he may have acquired by operation of law for the benefit of relatives who are within the third degree and who belong to the line from which said property came (Art. 891, NCC). 121. Who are the persons involved in reserva troncal? There are four persons involved in reserva troncal. (a) the ascendant or brother or sister from whom the property came (called the origin); (b) the descendant who acquired the property gratuitously (called the propositus); (c) the ascendant who in turn acquired the property from the descendant by operation of law (called the reservor or reservista); and (d) the relatives within the third degree belonging to the line from which the property came (called the reservatarios). 122. In reserva troncal, will a relative by affinity of the origin of the property be entitled to reservable property? Relationship will not be sufficient to establish ones right as a reservatario. There must be a double relation of consanguinity, i.e., the reservatario should be related by blood not only to the descendant but also to the other ascendant, or brother or sister from whom the property came. Only then can he be considered as belonging to the line from whence the property came. 123. In case several persons can qualify as reservatarios, to whom should the reservable property be adjudicated? The rules of intestate succession shall apply; i.e., the nearer relative exclude the farther relative (Art. 962, par. 1, NCC). This is so because Article 891 of the Civil Code merely determines the group to whom the reservable property should go. It does not determine the rights of such relatives. 124. What are some of the special rules in reserva troncal?

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The following are some of the special rules in reserva troncal: 1. The propositus must be a legitimate descendant (or legitimate half-brother or half-sister) of the origin of the property. 2. The reservista has the power to alienate or encumber the reservable real property, but subject to the reserva, that is, the reservatario can get the real property from the transferee as soon as ownership is transferred to such reservatario, without prejudice to the Land Registration Act and the Mortage Law. 3. In reserva troncal, the reservatario inherits the reservable property from the propositus, not from the reservistar. 125. Upon the death of F, he left to his son, S, a parcel of land. Subsequently, S died without any issue, and the land was inherited by his mother M who now seeks to register the property in her own name, on the ground that she is the owner of the same. B, a brother of F (uncle of S), opposed the registration on the ground that the property is reservable. a. Should the property be registered in the name of M? Yes, but the right to reservation in favor of B must be recorded on the title. The ascendant (such as M) who inherits from a descendant (such as S), whether by the latters wish or by operation of law, acquires the inheritance by virtue of a title perfectly transferring absolute ownership. All the attributes of the right of ownership belong to M exclusively use, enjoyment, disposal, and recovery. Article 891 of the Civil Code on reserve troncal says nothing more than the ascendant must make the reservation. 126. What is meant by disinheritance? What are its effects? ineffective

attached to a civil obligation in such manner that such obligation shall depend upon the fulfillment of such condition for its perfection, the very existence of said obligation is affected; according to the law, it is annulled (Art. 1183, NCC). 128. What are some of the important rules in intestate succession? The following are some of the important rules in intestate succession: 1. The right of representation takes place in the direct descending line, but never in the ascending line (Art. 972, NCC). 2. In the collateral line, the right of representation takes place only in favor of the children of brothers or sisters, whether they be of the full or half-blood (Art. 972, NCC). 3. Should brothers and sisters of the fullblood survive together with brothers and sisters of the half-blood, the former shall be entitled to a share double that of the latter (Art. 1006, NCC). 4. Should there be more than one ascendant of equal degree belonging to the same line, they shall divide the inheritance per capita; should they be of different lines but of equal degree, one-half shall go to the paternal and the other half to the maternal ascendants. In each line the division shall be made per capita (Art. 987, par. 2, NCC). 5. Grandchildren always inherit by right of representation, provided representation is proper (Art. 982, NCC). 6. Whenever all the children repudiate, the grandchildren inherit in their own right, for here representation is not proper (Art. 969, NCC). 7. A renouncer can represent, but cannot be represented (Arts. 976, 977, NCC). 129. When is accretion proper? There can be no accretion insofar as the legitime is concerned. Accretion, if it takes place, concerns only the free portion (par. 1, Art. 1021, NCC). Should the part repudiated be the legitime, the other co-heirs shall succeed to it in their own right, and not by right of representation (Art. 1921, par 2, NCC). 130. May a married woman repudiate an inheritance even without the consent of her husband? Yes, a married woman may repudiate an inheritance even without the consent of her husband (Art. 1047, NCC). 131. What captatoria? is meant by disposicion

Imperfect or ineffective disinheritance refers to a disinheritance without a specification of the cause, or for a cause the truth of which, if contradicted, is not proved, or which is not one of those recognized by law (Art. 918, NCC). If a compulsory heir is ineffectively disinherited, the institution of heirs is annulled, but only insofar as it may prejudice the person disinherited, that is, insofar as the legitime of said heir is impaired. The legacies and devises, and other testamentary disposition shall be valid to such extent as will not impair the legitime (Art. 918, NCC). (NOTE: If the free portion has not been disposed of, the ineffectively disinherited heir gets not only his legitime, but also his intestate share of the free portion. This is because he is an intestate heir also). 127. What is the effect of an impossible condition in a will? Is the rule the same in civil obligations? When attached to a testamentary disposition, an impossible condition shall be considered as not imposed and shall in no manner prejudice the heir, legatee or devisee, even if the testator should otherwise provide (Art. 873, NCC). However, when it is

Disposicion captatoria is a disposition made in a will upon the condition that the heir shall make some provision in his will in favor of the testator or of any other person. Under Article 875 of the Civil Code, such kind of a disposition is void.

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132. A last will and testament contains a provision that it shall not be presented before the courts. Is the provision valid? The provision is not valid. Such provision cannot deprive the courts of the authority to determine whether the will is duly executed or not. The parties interested in one way or another in a case are not the ones who confer or deprive the jurisdiction of the courts. The presentation of the will before the courts is required by the law so that it may be determined whether it was validly executed. If so, the estate will be distributed according to its terms in so far as conformable to law; and if it is not validly executed, the estate will be distributed as in intestacy. 133. The husband filed a petition for the probate of the will of his deceased wife. Sixteen months after the probate of the will, the husband was prosecuted for falsification or forgery of the will which was already probated. Will the criminal action for forgery lie against the husband? No. The probate of a will is considered as conclusive as to its due execution and validity, and is also conclusive that the testator was of sound and disposing mind at the time when he executed the will and was not acting under duress, menace, fraud, or undue influence, and that the will is genuine and not a forgery. The will in question having been probated by a competent court, the law will not admit any proof to overthrow the legal presumption that it is genuine and not a forgery. Criminal action will not lie against the forger of a will that has been duly admitted to probate (Mercado vs. Santos, 66 Phil. 215). 134. May a probate court rule on the intrinsic validity of a will? In general, a probate court cannot rule on the intrinsic validity of a will because it is a court of limited jurisdiction. It can only determine questions as to extrinsic validity of the will. The exceptions to this rule are: (a) when the parties agree to submit the issue to the probate court and no third person is prejudiced thereby: and (b) when upon the face of the will, the same is intrinsically void. 135. What are the issues to be resolved in the probate of a will? In probate proceedings, the probate court is limited only to the resolution of the following issues: (1) whether the instrument submitted is, indeed, the decedents last will and testament; (2) whether said will was executed in accordance with the formalities prescribed by law; (3) whether the decedent had the necessary testamentary capacity at the time the will was executed; and (4) whether the execution of the will and its signing were the voluntary acts of the decedent (Ajero vs. Court of Appeals, September 15, 94). 136. What are the basic principles in the institution of heirs? The following are the basic principles in the institution of heirs:

1. Principle of Equality. Under this principle, heirs who are instituted without a designation of share inherit in equal parts (Art. 846, NCC). 2. Principle of Individuality. Under this principle, heirs who are collectively instituted are deemed individually instituted, unless the contrary intention appears (Art. 847, NCC). 3. Principle of Simultaneity. Under this principle, when several heirs are instituted, they are instituted simultaneously and not successively (Art. 849, NCC). 137. The testator provides: I hereby institute as my heir my brother Juan who is now in prison for having killed my political enemy. The testator himself had nothing to do with the crime, which is the sole responsibility of his brother Juan. Is the institution valid? The institution is valid. The mere statement of a cause contrary to law will not invalidate an institution, so long as it does not appear in the will that such illegal cause is the only motivating factor for the institution. The principle underlying the rule on the statement of a false cause under Article 850 of the Civil Code should also apply in the case of an illegal cause. If the true cause is the generosity of the testator, and the disposition is essentially based on affection, the mere statement of an illegal cause should not impair the institution. But if it clearly appears from the will itself that the testators only reason for making the disposition is the illegal cause, then the disposition should be void. 138. The testator instituted as his sole heir his nephew Y so that upon my death and after the probate of this will x x x he will receive the properties composing my hereditary estate, that he may enjoy them with Gods blessing and my own. It was further provided in the will that should Y die, I order that my whole estate shall pass unimpaired to his surviving children in such wise that my estate shall never pass out of the hands of Y or his children in so far as it is legally possible. Further on it was provided that should Y die after me while his children are still in their minority, the estate shall be administered by the persons named in the will. Is this a simple substitution fideicommissary substitution? or a

The substitution is a fideicommissary substitution. The will contemplates the enjoyment of the estate by the heir instituted during his lifetime, with the only proviso that he should not dispose of it because its transmission is limited to his children, and it is provided that the whole of it should pass to them unimpaired. It also contemplates the survivorship of the heir. All the requisites of a fideicommisary substitution are present. 139. In testate succession, what are the different combinations of survival and concurrence of compulsory heirs and the amount of their legitimes? 1. Legitimate children: 1/2 of the estate, in equal portions, whether they survive alone or with concurring compulsory heirs (Art. 888, NCC).

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2. One legitimate child and the surviving spouse: legitimate child, 1/2 of the estate; the surviving spouse, 1/4 of the estate (Arts. 888 and 892, par. 1, NCC). 3. Legitimate children and the surviving spouse: legitimate children, in equal portions, 1/2 of the estate; the surviving spouse, a share equal to that of each child (Arts. 888 and 892, par. 2, NCC). 4. Legitimate children and illegitimate children: legitimate children, in equal portions, 1/2 of the estate; each illegitimate child, 1/2 the share of each legitimate child (Art. 888, NCC; Art. 176, Family Code). 5. One legitimate child, illegitimate children, and the surviving spouse: legitimate child, 1/2 of the estate; each illegitimate child, 1/2 the share of each legitimate child; the surviving spouse, 1/4 of the estate (Art. 888, NCC; Art. 176, Family Code; Art. 892, par. 1, NCC). (NOTE: The surviving spouse and the illegitimate children get their legitime from the free portion, the share of the surviving spouse having preference over those of the illegitimate children, whose share may suffer reduction pro rata because there is no preference as among themselves.) (Art 895, last par.) 6. Legitimate children, the illegitimate children, and the surviving spouse: legitimate children, in equal portions, 1/2 of the estate; illegitimate children, 1/2 the share of each legitimate child; surviving spouse, share equal to that of a legitimate child (Arts. 892, par. 2, and 898, NCC; Art. 176, Family Code). 7. Legitimate parents: 1/2 of the estate, whether they survive alone or with concurring compulsory heirs (Art. 889, NCC). 8. Legitimate parents and illegitimate children: legitimate parents, 1/2 of the estate; illegitimate children, in equal shares, 1/4 of the estate (Arts. 889 and 896, NCC). 9. Legitimate parents and surviving spouse : legitimate parents, 1/2 of the estate; surviving spouse, 1/4 of the estate (Arts. 889 and 893, NCC). 10. Legitimate parents, illegitimate children, surviving spouse: legitimate parents, 1/2 of the estate; illegitimate children, in equal shares, 1/4 of the estate; surviving spouse, 1/8 of the estate (Arts. 889, 896, and 899, NCC). 11. Illegitimate children alone: 1/2 of the estate (Art. 901, NCC) to be divided equally among themselves. 12. Illegitimate children and the surviving spouse: illegitimate children, in equal portions, 1/3 of the estate; surviving spouse, 1/3 of the estate (Art. 894, NCC). 13. Surviving spouse alone: 1/2 of the estate; or 1/3 if marriage is in articulo mortis and deceased spouse dies within three (3) months after marriage; or 1/2 if, despite marriage in articulo mortis and death of the spouse within three months after marriage, the

deceased and the surviving spouse have been living as husband and wife for more than five years (Art. 900, NCC). 14. Illegitimate parents alone: 1/2 of the estate (Art. 903, NCC). 15. Illegitimate parents and children of any class: illegitimate parents, none (Art. 903, NCC); children (legitimate and/or illegitimate), apply Nos, 1, 4 and 11 as the case may be. 16. Illegitimate parents and surviving spouse : illegitimate parents, 1/4 of the estate; surviving spouse, 1/4 of the estate (Art. 903, NCC). 140. In intestate succession, what are the different combinations of survival and concurrence of intestate heirs and the amount of their intestate shares? 1. Legitimate children: entire estate to be divided in equal shares as there are legitimate children (Art. 980, NCC). 2. One legitimate child and the surviving spouse: legitimate child, 1/2 of the estate; the surviving spouse, 1/2 of the estate (Arts. 888 and 996, NCC). (NOTE: If there is only one legitimate child concurring with the surviving spouse, and there are no other relatives, both will get equal intestate shares, in accordance with the clear intent of the law to consider the spouse as a child. After all, the plural word children as used in Article 996 of the Civil Code must be deemed to include the singular word child). 3. Two or more legitimate children and the surviving spouse: consider the surviving spouse as a legitimate child and divide estate by the total number (Art. 996, NCC). 4. Legitimate children and illegitimate children: estate to be divided in proportion of two (2) shares for each legitimate child and one (1) share for each illegitimate child; provided legitimes of the legitimate children should not be impaired (Arts. 983 and 985, NCC). (NOTE: The shares of the illegitimate children should be taken only from the free portion, otherwise, the legitime children would be prejudiced if there were so many illegitimate children.) 5. One legitimate child, illegitimate children, and the surviving spouse: legitimate child, 1/2 of the estate (Art. 888, NCC); surviving spouse, 1/4 of the estate; each illegitimate child, 1/2 the share of the legitimate child. If there be any left, distribute the remainder according to the ratio of two (2) shares for the legitimate child, two (2) shares for the surviving spouse, and one (1) share for each illegitimate child (applying by analogy Arts. 892, par. 1, and 895, par. 3). 6. Two or more legitimate children, illegitimate children and the surviving spouse: divide the estate according to the ratio of two (2) shares for each legitimate child; two (2) shares for the surviving spouse; and one (1) share for each illegitimate child (Art. 999, NCC).

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7. Legitimate parents alone: entire estate (Art. 985, NCC). 8. Legitimate parents and illegitimate children: legitimate parents, 1/2 of the estate; illegitimate children, in equal shares, 1/2 of the estate (Art. 991, NCC). 9. Legitimate parents and the surviving spouse: legitimate parents, 1/2 of the estate; the surviving spouse, 1/2 of the estate (Art. 997, NCC). 10. Legitimate parents, illegitimate children, and the surviving spouse: legitimate parents, 1/2 of the estate; illegitimate children, in equal shares, 1/4 of the estate; surviving spouse, 1/4 of the estate (Arts. 896 and 1000, NCC). 11. Illegitimate children alone: entire estate (Art. 988, NCC). 12. Illegitimate children and the surviving spouse: illegitimate children, in equal portions, 1/2 of the estate; the surviving spouse, 1/2 of the estate (Art. 998, NCC). 13. Surviving spouse alone: entire estate (Art. 995, NCC). 14. Illegitimate parents alone: entire estate (Art. 993, NCC). (NOTE: Illegitimate parents inherit ab intestato only in default of legitimate or illegitimate descendants of the deceased.) 15. Illegitimate parents and children of any class: illegitimate parents, none (Art. 993, NCC); children (legitimate and/or illegitimate), apply Nos. 1 (for legitimate children), 6 (for both legitimate and illegitimate children), and 11 (for illegitimate children) as the case may be. 16. Illegitimate parents and the surviving spouse: illegitimate parents, 1/2 of the estate; surviving spouse, 1/2 of the estate. (NOTE: While Article 997 of the Civil Code provides for the share of the surviving spouse concurring with legitimate parents (see. No. 9 above) of the decedent (where the former gets one-half of the intestate estate, and the latter get the other half), there is no article providing for the share in intestacy of the surviving spouse when concurring with illegitimate parents of the deceased. In spite of this omission, however, the surviving spouse should in such case gets one-half of the estate, and the other half should go to the illegitimate parents. If that is the share of the surviving spouse concurring with legitimate parents, certainly such share cannot be less when he/she concurs with illegitimate parents. In other words, if the legitimate parents get only one-half of the estate when concurring with the surviving spouse of the decedent, the illegitimate parents, who should have less rights, cannot be entitled to more than one-half in the same situation). 17. Brothers, sisters, nephews, and nieces : entire estate (Art. 1003, NCC). 18. Surviving spouse and brothers, sisters, nephews and nieces: surviving spouse, 1/2 of the estate; brothers and sisters, nephews and nieces, in

equal shares (except when representation is proper), 1/2 of the estate (Art. 1001, NCC). 19. Collateral relatives (up to 5th degree): entire estate (Art. 1010, NCC). 20. State: entire estate (Art. 1011, NCC). LAND REGISTRATION 141. After his mothers death, the son filed a complaint against his father for the partition of the conjugal properties of his parents. In his answer with counterclaim, the father alleged that four parcels of land, registered solely in his sons name under TCT No. 8278, are conjugal properties. The father contends that the lots are owned by the conjugal regime but was registered in his sons name only as a trustee considering that at that time, his son was then the only Filipino citizen in the family. The father then prayed for the dismissal of the partition case and for the reconveyance of the four lots covered by TCT No. 8278 to their rightful owner the conjugal regime. Meantime, to protect the interest of the conjugal regime during the pendency of the partition case, the father caused the annotation of a notice lis pendens on TCT No. 8278. Thereupon, the son moved for the cancellation of the notice lis pendens on the ground that it was improper to thresh out the issue of ownership of the disputed lots since ownership cannot be passed upon in a partition case; otherwise, it would amount to a collateral attack of his title obtained more than 28 years ago. The son argues that his sole ownership as shown in the title would be improperly assailed in a partition case and that it should be done through a separate action. Should cancelled? the notice lis pendens be

No, the notice lis pendens should not be cancelled. There is no dispute that a Torrens certificate of title cannot be collaterally attacked. This rule, however, is not material to the instant case. The annotation of a notice lis pendens does not in any case amount nor can it be considered as equivalent to a collateral attack on the certificate of title of a parcel of land. What cannot be collaterally attacked is the certificate of title and not the title. The certificate referred to is that document issued by the Register of Deeds known as the Transfer Certificate of Title. By title, the law refers to ownership which is represented by that document. The son apparently confuses certificate of title with title. Placing a parcel of land under the mantle of the Torrens system does not mean that ownership thereof can no longer be disputed. Ownership is one thing, registration is another (Lee Tek Sheng vs. Court of Appeals, 292 SCRA 544). 142. When two certificates of title are issued to different persons covering the same parcel of land in whole or in part, which title must prevail? When two certificates of title are issued to different persons covering the same land in whole or in part, the earlier in date must prevail, and, in case of

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successive registration where more than one certificate is issued over the land, the persons holding a prior certificate is entitled to the land as against a person who relies on a subsequent certificate (Margolles vs. Court of Appeals, 230 SCRA 97). 143. X filed with the Bureau of Lands a homestead application which was approved on April 23, 1937. On December 28, 1937, X died survived by her children. On January 2, 1941, a homestead patent was issued in the name of Xs heirs and the corresponding Original Certificate of Title No. 727 was issued to them. Sometime in 1980, the district forester issued a certification that the area covered by OCT No. 727 was a forest zone from 1941 to 1960 and that said land became alienable and disposable only on January 31, 1961. On the basis of this certification, the Solicitor General, on behalf of the Republic of the Philippines, filed on October 23, 1981 a complaint for cancellation of OCT No. 727 and for the reversion of the land to the public domain. Xs heirs contend that the reversion case had already prescribed and that their certificate of title to the land is already indefeasible, unassailable and irrevocable. Decide. It is clear that at the time when the homestead patent was issued to the heirs of X in 1941, the subject land was still part of the public domain. Hence, the title issued to them is considered void ab initio. It is a settled rule that forest lands or forest reserves or timber lands are not capable of private appropriation and possession thereof, however long, cannot convert them into private property. Insofar as the timeliness of the action of the government is concerned, it is basic that prescription does not run against the State. Public lands fraudulently included in patents or certificates of title may be recovered by the State in accordance with Section 101 of the Public Land Act. The subsequent release of the subject property as alienable and disposable did not cure any defect in the issuance of the homestead patent nor validated the grant. The hard fact remains that at the time of the issuance of the homestead patent and the title, the subject land was not yet released as alienable and disposable public land (Reyes vs. Court of Appeals, 295 SCRA 296). 144. May an owner of a registered land seek the annulment of a transfer thereof on the ground of fraud? Yes, an owner of a registered land may seek the annulment of a transfer thereof on the ground of fraud. However, such a remedy is without prejudice to the rights of any innocent purchaser for value with a certificate of title. This is because every person dealing with registered land may safety rely on the correctness of the certificate of title issued therefore and the law will in no way oblige to him to go beyond the certificate to determine the condition of the property (Obsequio vs. Court of Appeals, 230 SCRA 550). The right of the innocent purchaser for value must be respected even if the seller obtained his title through fraud. It is settled that a forged deed can legally be the root of a valid title when an innocent purchaser for value intervenes. The remedy of the

original owner (the person prejudiced) is to bring an action for damages against those who caused or employed fraud, and if the latter are insolvent, an action against the Treasurer of the Philippines may be filed for the recovery of damages against the State Assurance Fund (Obsequio, ibid). (NOTE: The basic rule is that after the lapse of one year, a decree of registration is no longer open to review or attack although its assurance is attached with actual fraud. This does not mean, however, that the aggrieved party is without a remedy in law. If the property has not yet passed to an innocent purchaser for value, an action for reconveyance is still available (Javier vs. Court of Appeals, 231 SCRA 498). 145. Is the use of a false affidavit of loss in a reconstitution case constitutive of extrinsic fraud that would warrant the invalidation of a final judgment in said case? No. The use of a false affidavit of loss in a reconstitution case is similar to the use during trial of forged instrument or perjured testimony. In the leading case of Palanca vs. Republic, 24 SCRA 819 (1968 ), it was held that the use of a forged instrument constituted only intrinsic fraud for while it perhaps prevented a fair and just determination of a case, the use of such instrument or testimony did not prevent the adverse party from presenting his case fully and fairly. But a judgment otherwise final may be annulled not only on the ground of extrinsic fraud but also because of lack of jurisdiction of the court which rendered it. Thus, if a certificate of title has not been lost but is in fact in the possession of another person, the reconstituted title is void and the court rendering the decision has not acquired jurisdiction. Consequently, the decision may be attacked any time. (Demetriou vs. Court of Appeals, 238 SCRA 158). 146. Does an action for reconveyance of a parcel of land based on implied or constructive trust prescribe? An action for reconveyance of a parcel of land based on implied or constructive trust prescribes in ten (10) years, the point of reference being the date of registration of the deed or the date of issuance of the certificate of title over the property. However, this rule applies only when the plaintiff or the person enforcing the trust is not in possession of the property. Since if a person claiming to be the owner thereof is in active possession of the property, the right to seek reconveyance which in effect seeks to quiet title to the property does not prescribe (Vda. De Cabrera vs. Court of Appeals, 267 SCRA 339). 147. X sold an unregistered parcel of land to Y in 1932 and the latter immediately took possession of the same. Despite such sale, however, X obtained in 1937 a certificate of title over the land pursuant to a decree of registration issued by a land registration court in a cadastral proceeding initiated by X himself. In 1975, Y filed an action against X for the reconveyance of the land on the ground that the latter committed fraud in causing the land to be registered in his name. X contends that the action had already prescribed and is already barred by laches.

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Is Y barred by prescription and laches in filling the action to recover ownership of the subject property? Ys right to bring the action to recover ownership of the disputed land had already prescribed and is barred by laches. The law is clear on this point. The remedy of a landowner whose property has been wrongfully and erroneously registered in anothers name is to bring an action in the ordinary courts of justice for reconveyance. Under the law, however, an action for reconveyance based on an implied or constructive trust prescribes in ten (10) years from the issuance of the torrens title over the property. In the instant case, Y slept on his right for thirty eight (38) years counted from the time the certificate of title was issued to X in 1937 until he filed his action for reconveyance in 1975. Ys right to bring such action was barred by laches as he took no step towards that direction reasonably after the title to the property was issued under the torrens system (Manangan vs. Court of Appeals, G.R. No. 115794, June 10, 1999). (NOTE: The decision in Manangan is contrary to the ruling in Heirs of Olviga vs. Court of Appeals, 227 SCRA 330. It bears stress that in both Manangan and Olviga, the parties claiming ownership of the disputed properties were in actual possession thereof. In Olviga, the Supreme Court declared that the rule in which an action for reconveyance of a parcel of land based on an implied trust prescribes in ten (10) years applies only when the plaintiff is not in possession of the property, and that if the person claiming to be the owner thereof is in actual possession, the right to seek reconveyance, which in effect seeks to quiet title to the property, does not prescribe. In Manangan, however, claimant Y is in actual possession of the disputed land but the Supreme Court declared nonetheless that his right to seek reconveyance of the property had already prescribed because of his failure to file the action within the (10) year prescriptive period. It is respectfully submitted that the ruling in Olviga is more in accord with the law.) 148. In 1981, Spouses H and W filed a complaint against Spouses X and Y for reconveyance of a parcel of land. They alleged that sometime in 1977, through fraud and illegal scheme, the subject parcel of land had been titled in the name of X and Y under Original Certificate of Title No. FV-540 issued on February 23, 1957, and that after discovery of the fraud, they demanded from X and Y to reconvey the land to them, but X and Y refused to do so. X and Y moved to dismiss the complaint on the ground that the action had already prescribed and is already barred by laches. If you were the judge, will you grant the motion to dismiss? If I were the judge, I will grant the motion to dismiss because the action had already prescribed and is already barred by laches. X and Y obtained the torrens title on the land in question on February 23, 1957 under OCT No. FV-540. Such title became indefeasible one (1) year after its issuance. Even assuming that the title was procured by fraud, the action for reconveyance had already prescribed because the case was filed 24 years after the discovery of the fraud. An action for reconveyance of

real property resulting from fraud may be barred by the statute of limitations, which requires that the action must be commenced within four (4) years from the discovery of the fraud, and in case of registered land, such discovery is deemed to have taken place from the date of the registration of the title. The registration constitutes notice to the whole word (Veracruz vs. Dumat-ol, 307 SCRA 198). 149. What are the rules on redemption of extra-judicially foreclosed properties acquired pursuant to a free patent or a homestead patent? (1) If the land is mortgaged to a rural bank under Republic Act 720, the mortgagor may redeem the property within two (2) years from the date of foreclosure or from the registration of the Sheriffs certificate of sale. If the mortgagor fails to exercise such right (redemption), he or his heirs may still repurchase the property within five (5) years from the expiration of the 2-year redemption period pursuant to Section 119 of the Public Land Act (Commonwealth Act No. 141). (2) If the land is mortgaged to parties other than rural banks, the mortgagor may redeem the property within one (1) year from the registration of the certificate of sale pursuant to Act No. 3135. If he fails to do so, he or his heirs may still repurchase the property within five (5) years from the expiration of the redemption period also pursuant to Section 119 of the Public Land Act (Sta. Ignacia Rural Bank vs. Court of Appeals, 230 SCRA 513). 150. In 1951, X filed a complaint against Y for damages. On June 24, 1964, judgment was rendered in said case in favor of X and against Y ordering the latter to pay damages in the amount of P5,000.00. To satisfy the judgment, two (2) of Ys properties were levied on execution on December 1, 1965: one was a parcel of land and the other, the family home. The subject properties were sold at public auction on February 12, 1966 to X as the highest bidder. Consequently, upon Ys failure to redeem the properties, a final deed of conveyance was executed on February 9, 1968, definitely selling, transferring, and conveying said properties to X. As a result, X was able to obtain in his name a tax declaration over the land and another over the family home. Unknown to X, Y applied for a free patent on the land in question. This application was approved on October 13, 1973 and the Patent and Title issued on December 10, 1980. Thereafter, on November 5, 1985, Y filed an action to declare void the auction sale in 1966 and to quiet title over said land. Y invoked the provisions of Section 118 of Commonwealth Act No. 141, otherwise known as the Public Land Act, which prohibits the alienation of lands acquired by homestead or free patent. In the same action, Y also contends that the house which was constituted in 1964 as a family home is exempt from execution, citing Article 153 of the Family Code which provides that the family home is deemed constituted on a house and lot from the time it is occupied as family residence. Will the action prosper? The action will not prosper. The judgment obligation of Y against X arose on June 24, 1964. The

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properties were levied and sold at public auction with X as the highest bidder on February 12, 1966. On February 9, 1968, the final deed of conveyance ceding the subject property to X was issued after Y failed to redeem the properties within the reglementary period. Ys application for free patent was approved only on October 19, 1973 and the Free Patent was issued only on December 10, 1980. The sequence of events leads to the inescapable conclusion that even before the application for homestead had been approved, Y was no longer the owner of the land. The deed of conveyance issued on February 9, 1968 finally transferred the property to X. As of that date, Y did not actually have anymore right over the land. The prohibition under Section 118 of Commonwealth Act No. 141 does not apply since it is clear that the judgment debt and the execution sale took place prior to the approval of the application for free patent. As declared by the Supreme Court in Amper vs. Presiding Judge, 112 SCRA 327, the date when the prohibition against alienation of lands acquired by homestead or free patents commences is the date of the approval of the application and the prohibition embraces the entire five-year period from and after the date of issuance of the patent or grant. As stated in Beniga vs. Bugas, 35 SCRA 111, the provision would make no sense if the prohibition starting from the date of the approval of the application would have no termination date. Consequently, the specific period of five years within which the alienation or encumbrance of a homestead is restricted starts to be computed from the date of the issuance of the patent. But the prohibition of alienation commences from the date the application is approved, whichever comes earlier. While Article 153 of the Family Code provides that the family home is deemed constituted on a house and lot from the time it is occupied as a family residence, it does not mean that said article has a retroactive effect such that all existing family residences, Ys included, are deemed to have been constituted as family homes at the time of their occupation prior to the effectivity of the Family Code and henceforth, are exempt from execution for the payment of obligations incurred before the effectivity of the Family Code on August 3, 1988. Neither does Article 162 of said Code states that the provisions of Chapter 2, Title V thereof have retroactive effect. It simply means that all existing family residences at the time of the effectivity of the Family Code on August 3, 1988 are considered family homes and are prospectively entitled to the benefits accorded to a family home under the Family Code. (Taneo, Jr. vs. Court of Appeals, 304 SCRA 308) 151. Is an adverse claim annotated at the back of the Torrens title automatically cancelled upon the lapse of the 30-day effectivity period? No. After the lapse of said period, the annotation of an adverse claim may be cancelled upon filing of a verified petition by the party-in-interest.

were or could have been litigated therein. It is regarded as extrinsic where it prevents a party from having a trial or from presenting his entire case to the court, or where it operated upon matters pertaining not to the judgment itself but to the manner in which it is procured; so that there is not a fair submission of the controversy. Extrinsic fraud is also known as actual fraud. The distinction is important because only actual or extrinsic fraud has been accepted as a ground for a judgment to be annulled (Heirs of Manuel Roxas vs. Court of Appeals, 270 SCRA 309). 153. Who, as between buyers of unregistered land, is the rightful owner: the first buyer in a prior sale but was unrecorded, or the second buyer who purchased the land in an execution sale whose transfer was registered in the register of deeds? Under Act No. 3344, registration of instruments involving unregistered lands is without prejudice to a third party with a better right. This phrase means that a mere registration of the sale in ones favor does not give him any right over the land if the vendor was not anymore the owner of the land, having previously sold the same to somebody else, even if the earlier sale was unrecorded. (NOTE: Article 1544 of the Civil Code has no application to lands not registered under Act. No. 496. 154. X filed an application for registration of title of a parcel of land. This was opposed by Y who claimed to be in actual possession of the land subject-matter of the registration proceeding, and by the Director of Lands who prayed that the subject land be declared as a public land. Before the initial hearing, X filed an ex-parte motion to withdraw his application, which the court granted. As a result, Y and the Director of Lands became the only contending parties in the registration case. On the date set for the initial hearing, Y appeared in court and moved for the reception of his evidence to prove his title over the subject land. The trial court denied said motion on the ground that no further proceedings in the land registration case could be pursued because the conflicting interests therein involved ceased to exist with the withdrawal of Xs application. Was the court correct in denying Ys motion to prove his registerable title over the land? The trial court was not correct in denying Ys motion to prove his registerable title over the subject land. Under Section 37 of Act No. 496, as amended by Act No. 3621, the withdrawal of Xs application does not terminate the registration proceeding when there is an adverse claim. The opposition filed by the Director of Lands is, for all intents and purposes, a conflicting interest as against that of the applicant X or of the oppositor Y, asserting a claim over the land sought to be registered. Consequently, the withdrawal by either X or Y from the case does not ipso facto obliterate the conflicting interests in the case. Neither is the case terminated because under Section 37 of Act No. 496, as amended by Act No. 3621, the trial court is required to resolve the claims of the remaining parties, the withdrawal of the application by the applicant and/or

152. What is the distinction intrinsic and extrinsic fraud?

between

Fraud is regarded as intrinsic where the fraudulent act pertains to an issue involved in the original action, or where the acts constituting the fraud

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the oppositor notwithstanding (Director of Lands vs. Court of Appeals, 303 SCRA 495), OBLIGATIONS AND CONTRACTS 155. Distinguish between civil and natural obligations. Civil and natural obligations may be distinguished as follows: (1) civil obligations derive their binding force from positive law; while natural obligations derive their binding effect from equity and natural justice; and (b) civil obligations can be enforced by court action or the coercive power of public authority, the fulfillment of natural obligations cannot be compelled by court action but depends exclusively upon the good conscience of the debtor. 156. Give the concept of a quasi-contract. Distinguish it from the other sources of obligations. A quasi-contract is a juridical relation which arises from certain lawful, voluntary, and unilateral acts, to the end that no one may be unjustly enriched or benefited at the expense of another. The act giving rise to a quasi-contract must be lawful, thereby distinguishing it from crime in which the act or omission is unlawful; it must be voluntary, thus differentiating it from a quasi-delict, which is based on fault or negligence or mere lack of foresight; and it must be unilateral, to distinguish it from contract in which there are two parties who come to an agreement. 157. A telephone company and an electric cooperative entered into a contract subject to the following terms and conditions: (a) the telephone company is allowed to use the electric posts of the electric cooperative for the installation of its telephone and cable wires; (b) the telephone company is obliged to install and allow the electric cooperative the free use of ten (10) telephone lines; and (c) the contract: shall be for as long as the telephone company has need for the electric posts and shall terminate only if the electric cooperative is forced to stop or abandon its operations as a public service and it becomes necessary to remove the electric posts. Is the contract between the telephone company and the electric cooperative subject to a potestative condition? No. The condition that the contract shall be effective for as long as the telephone company has need for the electric posts is decidedly a potestative condition because it is dependent upon the sole will of the telephone company. But the condition that such contract may be terminated if the electric cooperative is forced to stop or abandon its operations is a casual condition which depends on chance, hazard, or the will of a third persons. In sum, the contract between the telephone company and the electric cooperative is subject to a mixed condition, that is, a condition dependent partly on the will of a party and partly on chance, hazard, or the will of a third person, which do not invalidate a contract (Naga Telephone Company, Inc. vs. Court of Appeals, 230 SCRA 351).

158. In December 1985, X and Y executed a Deed of Conditional Sale wherein the former agreed to sell his 500-square meter lot in Baguio City to the latter for P1 Million payable P100,000 as down payment , and the balance 60 days after the squatters on the property have been removed. If the squatters are not removed within six months, the P100,000 down payment shall be returned by the vendor to the vendee. X filed an ejectment suit against the squatters, but in spite of the decision in his favor, the squatters would not leave. In August 1986, X offered to return the P100,000 down payment to Y, on the ground that he is unable to remove the squatters on the property. Y refused to accept the money and demanded that X execute a deed of absolute sale of the property in his favor, at which time it will pay the balance of the purchase price. Incidentally, the value of the land had doubled by the time. X consigned the P100,000 in court, and filed an action for rescission of the deed of conditional sale, plus damages. Will the action prosper? No, the action will not prosper. The action for rescission may be brought only by the aggrieved party to the contract. Since it was X who failed to comply with his conditional obligation, he is not the aggrieved party who may file the action for rescission but Y. Y, however, is not opting to rescind the contract but has chosen to waive Xs compliance with the condition which he can do under Article 1545 of the Civil Code. 159. On May 10, 1983, X, as vendor, and Y, as vendee, executed an Agreement of Purchase and Sale respecting two parcels of agricultural land for the total sum of P2 Million. The agreement contains the following terms and conditions. (1) Y shall pay the amount of P600,000.00 as down payment; (2) the balance of P1.4 Million shall be paid in four (4) equal quarterly installments of P350,000.00, the first to be due and payable on June 15, 1983, and every quarter thereafter, until the whole amount is paid; (3) that upon full payment of the purchase price, X shall execute a good and sufficient deed of sale and conveyance in Ys favor; and (4) that immediately upon the signing of the agreement, Y shall take possession of the parcels of land. On May 15, 1983, Y took possession of the subject parcels of land together with all the improvements thereon. And to answer for his balance of P1.4 Million, Y issued four post-dated checks payable to X in the amount of P350,000.00 each dated June 15, 1983, September 15, 1983, December 15, 1983 and March 15, 1984. When presented for payment, however, the checks were dishonored due to insufficient funds. Y promised to replace the checks but failed to do so. Aggrieved by Ys failure and refusal to make good the checks, X filed suit to rescind the agreement and to recover the properties. X contented that the failure of Y to completely pay the purchase price is a substantial breach of the obligation which entitles him to rescind under Article 1191 of the Civil Code. Y countered by citing Article 1383 of the Civil Code to the effect that where specific

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performance is available as a remedy, rescission may not be resorted to. Will the action prosper? Yes, the action will prosper. Rescission of reciprocal obligations under Article 1191 of the Civil Code should be distinguished from rescission of contract under Article 1383. although both presupposes and both require mutual restitution when proper, they are not entirely identical. While Article 1191 uses the term rescission, the proper term really is resolution. Resolution is a principal action which is based on the breach of a party of his obligation, while rescission under Article 1383 is a subsidiary action limited to cases of rescission for lesion under Article 1381 of the Civil Code. Obviously, the contract entered into by the parties in the case at bar does not fall under any of those mentioned by Article 1381. consequently, Article 1383 is inapplicable. A reading of the agreement entered into by X and Y shows that it is in the nature of a contract to sell, as distinguished from a contract of sale. In a contract of sale, the title to the property passes to the vendee upon the delivery of the thing sold; while in a contract to sell, ownership is, by agreement, reserved in the vendor and is not to pass to the vendee until full payment of the purchase price. In a contract to sell, the payment of the purchase price is a positive suspensive condition, the failure of which is no a breach, casual or serious, but a situation that prevents the obligation of the vendor to convey title from acquiring an obligatory force. X in the case at bar bound himself to deliver a deed of absolute sale and clean title covering the two parcels of land upon full payment by Y of the purchase price of P2 Million. This promise to sell was subject to the fulfillment of the suspensive condition that Y will pay in the full the purchase price. Y, however, failed to complete payment of the purchase price. The nonfulfillment of the condition of full payment rendered the contract to sell ineffective without force and effect. Failure of Y to pay, in this instance, is not even a breach but merely an event which prevents Xs obligation to convey title from acquiring binding force. Hence, the agreement of the parties may be set aside, but not because of a breach on the part of Y for failure to complete payment of the purchase price. Rather, his failure to do so brought about a situation which prevented the obligation of X to convey title from acquiring obligatory force (Ong vs. Court of Appeals, 310 SCRA 1). 160. X sold a parcel of land to Y. Their notarized contract of sale contains a provision that the seller warrants that he will defend the buyers title to and peaceful possession of the property. There were existing lessees in the subject property at the time of the sale. Buyer now wants to cancel the contract for violation of a condition. He alleges that he cannot use the lot because of the sellers failure to eject the lessees. He also claims that the provision in the contract of sale where the seller warranted to defend his title to and peaceful possession of the property partakes of the nature of a condition. (a) Is the buyers claim tenable?

The buyers claim is not tenable. The buyer failed to appreciate the difference between a condition and a warranty and the consequences of such distinction. The failure of the seller to eject the lessees from the lot in question and to deliver actual and physical possession thereof to the buyer cannot be considered a substantial breach for two reasons: First, such failure was not stipulated in the contract as a condition whether resolutory or suspensive; and second, its effects and consequences were not specified either. The stipulation adverted to by the buyer does not impose a condition or an obligation on the part of the seller to eject the lessees from the lot. Said stipulation pertains merely to the usual warranty against eviction, and not a condition that was not met. Had the parties intended to impose on the seller the obligation to eject the tenants from the lot sold, the same should have been expressly provided for in the contract. For example, the contract may provide that if the lessees are not ejected with a certain period, the contract can be rescinded (Power Commercial and Industrial Corp. vs. Court of Appeals, 274 SCRA 597). (b) Was there a breach of warranty against eviction? There was no breach of warranty against eviction. The buyer was not deprived of his title. The presence of lessees does not even constitute an encumbrance on the land nor does it deprive the buyer of its control thereof. 161. X leased to Y a building for a period of fifteen years, at a monthly rental of P10,000.00 payable in advance during the first ten days of each month. The lessee occupied the premises and made payments of rentals for about three (3) years, after which no rentals were paid. X, through his lawyer, required Y to return the leased property if he cannot pay the rents. Pursuant to this demand, Y vacated the property and notified X, and the latter took possession thereof. X later brought an action for the recovery of the rentals that should be paid under the lease contract for the unexpired term of twelve (12) years. Will the action prosper? The action will not prosper. Under Article 1191 of the Civil Code, X was permitted to elect between the two remedies of resolution or specific performance, with damages in either case. He is not entitled to pursue both of these inconsistent remedies. In this case, X clearly elected to resolve or rescind the lease contract. In the common case of the resolution or rescission of a contract of sale for failure of the purchaser to pay the stipulated price, the seller is entitled to be restored to the possession of the thing sold, if it has already been delivered. But he cannot have both the thing sold and the price which was agreed to be paid, for the resolution or rescission of the contract has the effect of destroying the obligation to pay the price. Similarly, in the case of the resolution of a contract of lease, the lessor is entitled to be restored to the possession of the leased premises, but he cannot have both the possession of the leased premises for the remainder of the term and the rent which the other party contracted to pay. The termination of the lease has the effect of destroying the obligation to pay for the future.

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162. On October 25, 1980, C loaned to D the sum of 100,000.00 with interest at the rate of 25% per annum for the term of two (2) years. To guarantee the loan, D pledged some pieces of jewelry. On December 5, 1991, D brought an action to recover the jewels, upon payment of the amount of the loan and interest. C contends that the action to recover the jewels had already prescribed because the period of prescription must be computed from the date of the contract of loan (1980) inasmuch as from that date D could already have recovered the jewels by paying the amount of the loan with interest. Has the action prescribed? The action has not yet prescribed. There being no circumstance to show that the period in the contract of loan was for the benefit of either party, it must be presumed to be for the benefit of both. And it must be so, for this is a case of loan, with interest, wherein the term benefits D by the use of the money lent and C by the interest. This being so, D had no right to pay the loan before the lapse of two (2) years, without the consent of C, because such a payment in advance would have deprived the latter of the benefit of the stipulated interest. It follows that the action to recover the thing pledged accrued only from the date of maturity of the loan, or on October 25, 1982. Consequently, the 10-year period of prescription on written contract, such as the one involved in the problem, has not yet expired when the action was brought. 163. What is an alternative obligation? An alternative obligation is one where out of two or more prestations which are due, the performance of one is already sufficient compliance with the obligation (Art. 1199, par. 1). 164. X borrowed money from Y. It was agreed that at the maturity of the debt, X will give Y either the sum lent or a particular house and lot. Is the stipulation valid? Yes, the stipulation is valid because it is simply an alternative obligation, which is expressly allowed by the law. The agreement to convey the house and lot in the event of Xs failure to pay the debt in money at its maturity does not constitute pactum commissorium. It is not an attempt to permit the creditor Y to declare a forfeiture of the security upon the failure of the debtor to pay the debt at maturity. It is simply provided that if the debt is not paid in money it shall be paid in another specific way by the transfer of the property at a valuation. 165. What is a facultative obligation? A facultative obligation is one where only one prestation has been agreed upon but the obligor may render another in substitution (Art. 1206, par. 1). 166. Distinguish between alternative and facultative obligations. Alternative obligation and facultative obligations may be distinguished as follows: 1. In an alternative obligation, various things are due, but the giving of one is already sufficient compliance with the obligation. In a facultative

obligation, only one thing is principally due, and it is that one which is generally given, but the substitute may be given to render payment or fulfillment easy; 2. If one of the presentations in an alternative obligation is illegal and the other prestations are valid, the obligation remains. In a facultative obligation, if the principal obligation is void, there is no longer any need of giving the substitute. 3. In an alternative obligation, if it is impossible to give all except one, that last one must still be given. In a facultative obligation, if it is impossible to give the principal, the substitute does not have to be given, and if it is impossible to give the substitute, the principal must still be given; 167. A and B signed a promissory note binding themselves to pay C, jointly and severally, the amount of P30,000.00. For non-payment of the debt, C sued A and B for sum of money. After trial, judgment was rendered in Cs favor directing A and B to pay the indebtedness. The judgment did not state whether the liability of the defendants was joint or solidary. C then asked for execution on the properties of A for the whole obligation. In the contract, liability was solidary but in the judgment, nothing was said about the nature of the obligation. How should the obligation be considered, joint or solidary? The obligation should be considered as merely a joint one, hence, C can get the properties of A corresponding to his proportionate share in the judgment debt. The judgment did not state that the obligation was joint and several, so none of the defendants may be required to pay for the whole obligation. 168. X, as lessor, and Y, as lessee, entered into a contract of lease. Their lease agreement contains the following terms: (a) the leased premises shall be used exclusively by the lessee for a specific purpose; (b) the lessee is strictly prohibited from using the leased premises for any other purpose without the written consent of the lessor; (c) the lessee shall not sublease his right of lease over the leased premises; (d) the lessor shall have the right to sell the leased premises during the period of the lease; and (e) in the event that the lessor decides to sell the leased premises, the lessee has the first option to purchase the property. On the second year of the lease, the lessor informed the lessee of his desire to sell the property. Being then sickly, the lessee assigned his right of first option under the lease contract to his daughter. Does the daughter have the right to exercise her fathers right of first option under the lease contract? The assignment has no legal basis. Article 1311of the Civil Code is too clear to be misinterpreted. It provides that contract take effect only between the parties, their assigns and heirs except in cases where the rights and obligations arising from the contract are not transmissible by their nature or by stipulation or by provision of law.

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In the case at bar, the lease contract between the lessor and the lessee clearly reveals the intent of the parties to limit their lease relationship to themselves alone. It cannot be denied that the lessees right of first option to buy the leased property in case of its sale is but part of the bigger right to lease said property from the lessor. The option was given to the lessee because he was the lessee of the property. It was a component of the consideration of the lease. If the lessee is barred by the contract from assigning his right to lease the property to any other party, he is similarly barred from assigning his first option to buy the leased property to his daughter (Bayangan vs. Court of Appeals, 278 SCRA 379). 169. May a solidary creditor assign his right under the obligation? Under Article 1213 of the Civil Code, a solidary creditor cannot assign his right without the consent of the others. This is so because a solidary obligation implies mutual agency and mutual confidence. Should the assignee or substitute do acts which would prejudice the others, there is no doubt that the right of the other creditors would be endangered, hence, the necessity of their consent. 170. H died intestate in 1977 survived by his widow, W, and his three legitimate children, X, Y and Z. In the settlement of the intestate estate of H, W and her children executed a notarized Deed of Partition by virtue of which each of them received a share in the intestate estate of H consisting of several parcels of registered lands. In their partition agreement, W and her children were assigned individual parcels of land, at two parcels each, as their respective shares in the inheritance. A day after the execution of the partition agreement, however, W and her children executed a Memorandum of Agreement by virtue of which they agreed to divide equally among them the proceeds of the sale of the lots that were assigned to each of them. In 1981, a decision was rendered against W in an action for sum of money filed by her creditors. When the decision became final, a writ of execution was issued and the sheriff levied upon the two (2) lots assigned to W. When W refused to surrender the owners duplicate copies of the titles of the lots, the creditors petitioned the court to nullify said titles. X, Y and Z opposed the petition on the ground that they are co-owners of the lots in question by virtue of their Memorandum of Agreement which they claimed novated their partition agreement. (a) Was there a novation of the Deed of Partition? The contention of X, Y and Z that the Memorandum of Agreement novated the Deed of Partition is not well-taken. The Memorandum of Agreement fell short of producing a novation because it does not express a clear intent to dissolve the old obligation as a consideration for the emergence of a new one. Likewise, X, Y, and Z failed to show that the Deed of Partition and the Memorandum of Agreement are materially and substantially incompatible with each other. Indeed, the Deed of Partition granted title to the lots in question to W to whom they were assigned, and the Memorandum of Agreement created an obligation

on the part of W to share with the other co-owners the proceeds of the sale of such lots. There is no incompatibility between these two contracts; hence, no novation. (NOTE: Novation, one of the modes of extinguishing an obligation, requires the concurrence of the following: (1) there is a previous valid obligation; (2) the parties concerned agree to a new contract; (3) the old contract is extinguished; and (4) there is a valid new contract. Novation may be express or implied. In order that an obligation may be extinguished by another which substitutes the same, it is imperative that it be so declared an unequivocal terms (express), or that the old and the new obligations be on every point incompatible with each other (implied). (b) Was the co-ownership revived by the execution of the Memorandum of Agreement? The very provisions of the Memorandum of Agreement belie the revival of the co-ownership. First, it retains the partition of the properties which W and her children supposedly placed in the co-ownership; and second, it vests in the registered owner the power to dispose of the lots adjudicated to him or her under the Deed of Partition even without the consent of the other parties to the Memorandum of Agreement. Jus disponendi is an attribute of ownership, and only the owner can dispose of a property (Cruz vs. Court of Appeals, 293 SCRA 239). 171. X delivered to Y pieces of jewelry to be sold on commission basis. Despite the lapse of the period agreed upon, Y failed to return the jewelry items to X. When sued for estafa, Y interposed the defense that her agreement with X was novated when the latter agreed to be paid directly by the buyers of the jewelry items and on installment basis. She added that her liability is merely civil in nature. Was there a novation of X and Ys agreement? The acceptance by X of partial payments tendered by Ys buyers does not evince the intention of X to have their agreement novated. It was simply necessitated by the fact that, at that time, Y had substantial accounts payable to X. Thus, to obviate the situation where X would end up with nothing, she was forced to receive the tender of the buyers. It is thus easy to see why Xs acceptance of the buyers payment on installment basis cannot be construed as a case of either expromision or delegacion sufficient to justify the attendance of extinctive novation. Not too uncommon is when a stranger to a contract agrees to assume an obligation; and while this may have the effect of adding to the number of persons liable, it does not necessarily imply the extinguishment of the liability of the first debtor. Neither would the fact alone that the creditor (such as X) receives guaranty or accepts payments from a third person who has agreed to assume the obligation, constitute an extinctive novation, absent an agreement that the first debtor shall be released from responsibility. Granting that there was such novation, the criminal liability for estafa committed by Y is then not affected by the subsequent novation of the contract, for it is a public offense which must be prosecuted and punished by the State (Quinto vs. People, 305 SCRA 708).

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172. X, as lessor, and ABC Bank, as lessee, entered into a contract of lease involving a building. Their lease agreement specifically states that the term of the lease shall be fourteen (14) years commencing from April 1, 1978 and may be renewed for a like term at the option of the lessee. X contends that this stipulation is void for being violative of the principle of mutuality of contract under Article 1308 of the Civil Code. (a) Is the clause may be renewed for a like term at the option of the lessee violative of the principle of mutuality of contracts? The fact that the lessees option to renew the lease is binding only on the lessor and can be exercised only by the lessee does not render such option void for lack of mutuality. After all, the lessor is free to give or not to give the option to the lessee. And while the lessee has a right to elect whether to continue with the lease or not, once he exercises his option to continue and the lessor accepts, both parties are thereafter bound by the new lease agreement. Their rights and obligations become mutually fixed, and the lessee is entitled to retain possession of the property for the duration of the new lease, and the lessor may hold him liable for the rent therefore. Mutuality obtains in such a contract and equality exists between the lessor and the lessee since they remain with the same faculties in respect to fulfillment. (b) How shall the clause be interpreted or applied? The clause may be renewed for a like term at the option of the lessee means that the exercise by the lessee of his option resulted in the automatic extension of the contract of the lease under the same terms and conditions prevailing in the original contract of lease; i.e., for fourteen (14) years, the phrase for a like term referring to the period of the lease. If the renewed contract were still subject to mutual agreement by the lessor and the lessee, then the option which is an integral part of the consideration for the contract would be rendered worthless. For then, the lessor could easily defeat the lessees right by simply imposing unreasonable and onerous conditions to prevent the parties from reaching an agreement (Allied Banking Corp. vs. Court of Appeals, 284 SCRA 357). SALES 173. X made a written offer to Y regarding the purchase of the latters car. When the first offer of P500,000 was rejected, X made a second offer which was likewise rejected. Undaunted, X made a third written offer for P600,000 with a check for P100,000 as earnest money. Annotated on this third written offer was the phrase receive original (9-4-89) beside the signature of Y. Was there a perfected contract of sale between X and Y? No, there was no perfected contract between X and Y. It is fundamental principle that before a contract of sale can be valid, the following elements must be present: (a) consent of the contracting parties; (b) determinate subject-matter; and (c) price certain in money or its equivalent. Until the contract of sale is

perfected, it cannot, as an independent source of obligation, serve as a binding juridical relation between the parties. The annotation in the third written offer amounts neither to a written nor an implied acceptance by Y of Xs offer. Such annotation is merely a memorandum of the receipt by Y of Xs offer. The requisites of a valid contract of sale are lacking in said receipt and therefore the sale is neither valid nor enforceable (Jovan Land vs. Court of Appeals, 268 SCRA 160). 174. What is the mirror doctrine in the law on sales? The mirror doctrine in the law on sales is a principle in law which states that a purchaser of a property cannot close is eyes to facts which should put a reasonable man on his guard and claim that he acted in good faith under the belief that there was no defect on the vendors title. Such refusal to believe in the strong possibility of a defect on the vendors title will not make him an innocent purchaser for value (should such title later prove to be defective), if circumstances are such that a reasonably prudent man would have taken the necessary precaution if in the same situation (Embrado vs. Court of Appeals, 233 SCRA 333). 175. Distinguish between a contract of sale and a contract to sell. A contract of sale and a contract to sell are distinguished as follows: (1) In a contract of sale, the non-payment of the purchase price is a resolutory condition, that is, the contract of sale may by such occurrence put an end to a transaction that once upon a time existed; in a contract to sell, the payment in full of the price is a positive suspensive condition. Hence, if the price is not paid, it is as if the obligation of the seller to deliver and to transfer ownership never became effective and binding. (2) In a contract of sale, title over the property generally passes to the buyer upon delivery; in a contract to sell, ownership is retained by the seller, regardless of delivery and is not to pass until full payment of the price. (3) In a contract of sale, after delivery has been made, the seller has lost ownership and cannot recover it unless the contract is resolved or rescinded; in a contract to sell, since the seller retains ownership, despite delivery, he is enforcing, not rescinding, the contract if he seeks to oust the buyer for failure to pay. 176. On April 11, 1981, X, as vendor, and Y, as vendee, entered into a contract of Conditional Sale of Registered Lands over three (3) parcels of land situated in Batangas City. Inasmuch as the certificates of titles over the lots were still in the name of third persons who had already executed deeds of conveyance and disclaimer in favor of the vendor, it was agreed that the total purchase price of P2.1 Million would be paid by the vendee to the vendor in the following manner: P300,000.00 upon signing of the contract, and the balance of P1.8 Million upon presentation by the vendor of transfer certificates of titles in his name, free from all liens

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and encumbrances, and delivery of registerable documents of sale in favor of the vendee within twenty months from the signing of the contract . In the meantime, the retained balance of the purchase price would earn interest at 17% interest per annum or P20,600.00 monthly payable to the vendors until December 31, 1982. It was expressly stipulated that the vendee would have absolute and unconditional possession of the lots as well the right to introduce improvements thereon. Two (2) days prior to the expiration of the 20-month period, specifically on December 31, 1982, the vendor requested the vendee for an indefinite extension within which to deliver clean titles over the lots. He also requested that the vendee continue paying the monthly interest of P20,6000.00 starting January, 1983. The vendee refused the request. In retaliation, the vendor executed a notarial rescission of the sale to which the vendee responded by reminding the vendor that he was the one who did not comply with his contractual obligation to deliver clean titles within the stipulated 20-month period; hence, had no right to rescind the contract. Thereupon, the vendee sued for specific performance to compel the vendor to comply with his obligation to deliver clean titles over the properties. Will the action prosper? Yes, the action will prosper. Although denominated as a conditional sale, the contract between the vendor and the vendee is one of absolute sale. A deed of sale is absolute in nature although denominated as a conditional sale absent a stipulation reserving title in the vendor until full payment of the purchase price or a stipulation allowing the vendor the right to unilaterally rescind the contract in case of non-payment. In the instant case, ownership of the lots passed to the vendee both by constructive and actual delivery. Constructive delivery was accomplished upon the execution of the contract on April 11, 1981 without any reservation of title on the part of the vendors, while actual delivery was made when the vendee took unconditional possession of the lots and constructed valuable improvements thereon (Babasa vs. Court of Appeals, 290 SCRA 532). 177. In 1967, X, as vendor, and Y, as vendee, entered into a contract to sell a parcel of land in Quezon City. Upon the death of Y in 1971, his children assumed his rights and obligations in the contract to sell, paying in full the selling price of the lot from their own funds, which payment was completed in 1978. With said full payment, X then executed a deed of absolute sale in favor of Y who had died seven (7) years earlier, instead of his children who assumed his rights and obligations in the contract. Because of the error, a transfer certificate of title was issued in the name of Y instead of his children. Aggrieved by the issuance of the certificate of title in the name of their father, Ys children brought an action for the cancellation and correction of Ys title and the issuance of a new certificate of title in their names and to reflect in said title their distributive shares. After trial on the merits, the trial court dismissed the petition on the ground that it pertains more to the partition of the estate of Y which will in effect transfer ownership of title of the property to his children as

compulsory heirs. Hence, Section 108 of Presidential Decree No. 1529 (which calls for summary proceedings) does not apply. Was the trial court correct in dismissing the petition? The court was not correct in dismissing the petition. Section 108 of P.D. 1529 is clearly available as a remedy to correct the erroneous issuance of the certificate of title in the name of Y. It is undisputed that Y died in 1971 without having completed the installments on the property. His heirs then took over the contract to sell, assumed his obligations thereunder by paying the selling price of the lot from their own funds, and completed the payment in 1978. Accordingly, the ownership of the lot had not been vested in Y during his lifetime. Indeed, X could not have transferred the title over the lot, through a deed of absolute sale, to Y in 1978 considering that he had died seven (7) years earlier in 1971. In 1978, the deceased Y had no more civil personality or juridical capacity. His juridical capacity, which is the fitness to be the subject of legal relations, was lost through death. Having stepped into the shoes of their father Y upon his death in 1971 with respect to the contract to sell, and being the ones who continued the installment payments of the selling price from their own funds until its full payment in 1978, the children of Y necessarily became the owners of the subject lot in whose favor the deed of sale should have been executed by the vendor (Dawson vs. Register of Deeds, 295 SCRA 733). (NOTE: In a contract to sell, the title over the subject property vests in the vendee only upon full payment of the consideration. Where the installments agreed upon have not been completely paid upon the death of the original vendee and the certificate of title was erroneously issued in his name, his heirs, who assumed his obligations and completed the payment, can resort to the summary proceedings under Section 108 of Presidential Decree No. 1529 to correct the manifest mistake). 178. Is it necessary that the seller be the owner of the thing sold? Yes, but he need not be the owner at the time of the perfection of the contract. It is sufficient that he is the owner at the time the object is delivered, otherwise, he may be held liable for breach of warranty against eviction. (NOTE: Sale of a parcel of land by a nonowner who cannot deliver the thing sold is null and void under Article 1409 of the Civil Code because it contemplates an impossible service. Nool vs. Court of Appeals, 276 SCRA 149). 179. What is emptio rei sperati? Emptio spei? What is their effect in a contract of sale? Emptio rei sperati is the sale of an expected thing; while emptio spei is the sale of the hope itself (Art. 1461, NCC). If the expected thing in emptio rei sperati does not materialize, the sale is not effective. In emptio spei, it does not matter whether the expected thing

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materialized or not; what is important is that the hope itself validly existed. (NOTE: While there can be no donation of a future property (Art. 751, NCC), there can be a valid sale of a future property) 180. What is meant by policitacion? Policitacion is a unilateral promise to buy or to sell a determinate thing which is not accepted. This produces no juridical effect, and creates no legal bond. This is a mere offer, and has not yet been converted into a contract. 181. What is an earnest money? What are its purposes? An earnest money ( arras) has a dual purpose: (a) it is considered as part of the purchase price; and (b) as proof of perfection of a contract of sale. 182. In the absence of stipulation, may the seller of real estate keep the earnest money to answer for damages in the event that the sale fails due to the fault of the prospective buyer? In the absence of a specific stipulation, the seller is not allowed to keep the earnest money in the event that the sale fails due to the fault of the prospective buyer. Under Article 1482 of the Civil Code, whenever earnest money is given in a contract of sale, it shall be considered as part of the purchase price and as proof of the perfection of the contract. By its very nature, an earnest money is an advance payment which must be deducted from the purchase price. Hence, the parties could not have intended that the earnest money or advance payment would be forfeited when the buyer should fail to pay the balance of the price, especially in the absence of a clear and express agreement thereon. Moreover, to allow the forfeiture of the earnest money or advance payment in favor of the seller would amount to unjust enrichment of the seller at the expense of the buyer (Goldenrod, Inc. vs. Court of Appeals, 299 SCRA 141). 183. What are some of the basic rules on transactions on sale or return? (1) In a transaction on sale or return, the buyer becomes the owner of the thing sold upon delivery, but he may revest the ownership to the seller by returning the thing within the time fixed in the contract; or if no time has been fixed, within a reasonable time (Art. 1501, NCC). (2) The buyer can return the thing even if he finds nothing wrong with the quality of the thing sold. The discretion to return is with the buyer. (3) If the thing is lost in the possession of the buyer, he bears the loss because upon delivery to him of the thing, he became the owner thereof.

(2) The risk of loss remains with the seller, although there has been delivery, if the sale has not yet become absolute, except: (a) if buyer is at fault; and (b) if buyer had expressly agreed to bear the loss. (3) If it is stipulated that a third person must signify approval or satisfaction, such a provision is valid, but the third person must be in good faith. If refusal to accept is not justified, seller may still sue. 185. Article 1523 of the Civil Code provides that delivery to the carrier is presumed to be delivery to the buyer. Is this rule absolute? No, the rule is not absolute. While Article 1523 of the Civil Code provides that delivery to the carrier is presumed to be delivery to the buyer, such rule would have no application where the sale itself specifically called for delivery by the seller to the buyer at the latters place of business (Mobile Oil Phils., Inc. vs. Court of Appeals, 272 SCRA 548). 186. X sold to his common-law wife Y a parcel of land. Because of the sale, Y obtained a transfer certificate of title in her name. Thereafter, Y sold the land to Z who, at that time, was not aware of the relationship of X and Y. X is now trying to recover the lot from Z on the ground that the previous sale to Y was null and void. Will the action prosper? The action will not prosper. X is correct in claiming that the sale to Y was null and void because it was a sale between common-law spouses. However, applying Article 1490 of the Civil Code by analogy, X can no longer recover the land from Z because the latter is a buyer in good faith and for value who had the right to rely on the title of Y (Cruz vs. Court of Appeals, 281 SCRA 491). 187. Rolando was an employee of Elisco Tool Manufacturing Corporation. He was the head of the companys cash department. On January 9, 1980, Rolando acquired from the company a 2door Colt Lancer 1979 model pursuant to the latters car plan program for its top employees. Thereupon, Rolando and the company entered into an agreement with the following provisions: (a) that for and in consideration of a monthly rental of P1,000.00, the company leases to Rolando the vehicle for his use: (2) that Rolando will pay the lease rental thru salary deduction in the amount of P1,000.00 per month for a period of five (5) years; (3) that for the duration of the lease agreement, all expenses and costs of registration, insurance, repair and maintenance, gasoline, oil and parts replacement shall be for the account of Rolando; (4) that at the end of the 5-year period or upon payment of the 60th monthly rental, Rolando may exercise the option to purchase the car from the company and all monthly rentals shall be applied to the payment of the full purchase price of the car; and (5) that in the event of resignation or dismissal from the service of Rolando, he shall return the car to the company in good working condition. The company ceased operations in 1981. As a result, Rolando was laid off. Nonetheless, as of December 15, 1984, Rolando was able to make payments on the car in the total amount of P61,00.00.

184. What are some of the basic rules on a sale on approval or trial or satisfaction? (1) In a sale on approval or trial or satisfaction, title remains with the seller, although there has been delivery, unless the sale becomes absolute.

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On June 6, 1986, the company filed a complaint for replevin and damages against Rolando. The company alleged that Rolando failed to pay the monthly rentals on the car which, as of May 1986, totaled P39,000.00; that despite repeated demands, Rolando failed to settle the obligation thereby entitling the company to the possession of the car. Was the agreement between Rolando and his former employer a contract of lease with option to buy or one of sale of personal property on installment? The agreement between Rolando and his former employer is one of sale on installment, not lease. This is so because of the stipulation in the agreement that all monthly rentals shall be applied to the payment of the full purchase price of the car. It is clear that the transaction in this case is a lease in name only. The so-called monthly rentals are in truth monthly amortizations on the price of the car. The contract being one of sale on installment, Article 1484 and 1485 of the Civil Code will apply. Under Article 1484, the vendor in a sale of personal property on the installment plan has three remedies against the vendee, namely: (a) to demand exact fulfillment of the obligation, should the vendee fail to pay; (b) cancel the sale, should the vendees failure to pay cover two or more installments; and (c) foreclose the chattel mortgage on the thing sold, if one has been constituted, should the vendees failure to pay cover two or more installments. Article 1485, on the other hand, provides that Article 1484 shall be applied to contracts purporting to be leases of personal property with option to buy, when the lessor has deprived the lessee of the possession of enjoyment of the thing. Settled is the rule that the remedies under Article 1484 are alternative, not cumulative. The exercise of one bars the exercise of the others. This limitation applies to contracts purporting to be leases of personal property with option to buy by virtue of Article 1485. In the case at bar, the condition that the lessor has deprived the lessee of the possession or enjoyment of the thing for the purpose of applying Article 1485 was fulfilled by the filling of the complaint for replevin to recover possession of the car. By virtue of the writ of replevin issued by the court, the deputy sheriff seized the vehicle on August 6, 1986, and thereby depriving Rolando of its use (Elisco Tool Mfg. Corp. vs. Court of Appeals, 301 SCRA 731). 188. Ubaldo is the owner of a building which has been leased by Remigio for the past 20 years. Ubaldo has repeatedly assured Remigio that if he should decide to sell the building, he will give Remigio the right of first refusal. On June 30, 1994, Ubaldo informed Remigio that he was willing to sell the building for P5 Million. The following day, Remigio sent a letter to Ubaldo offering to buy the building at P4.5 Million. Ubaldo did not reply. One week later, Remigio received a letter from Santos informing him that the building had been sold to him by Ubaldo for P5 Million, and that he will not renew Remigios lease when it expires. Remigio filed an action against Ubaldo and Santos for cancellation of the sale, and to compel Ubaldo to

execute a deed of absolute sale in his favor, based on his right of first refusal. Will the action prosper? The action will not prosper. The right of first refusal is not based on a contract but is predicated on the provisions of human relations and, therefore, its violation is predicated on quasi-delicit. Moreover, the lessees right of first refusal does not go so far as to give him the power to dictate on the lessor the price at which the latter should sell his property. Upon the facts given, the lessor had sufficiently complied with his commitment to give the lessee a right of first refusal when he offered to sell the property to the lessee for P5 Million, which was the same price he got in selling it to Santos. He certainly had the right to treat the lessees counter offer of a lesser amount as a rejection of his offer to sell at P5 Million. Thus, he was free to find another buyer upon receipt of such counter-offer. 189. Suppose that Ubaldo had given Remigio an option to purchase the building instead of a right of first refusal, will your answer be the same? Yes, the answer will be the same. The action will not prosper because an option must be supported by a consideration separate and distinct from the purchase price. In this case, there was no separate consideration. Therefore, the option may be withdrawn by Ubaldo at anytime. 190. MFC Corporation is engaged in the business of selling roofing materials to the public. Through extensive advertisements in media and in its brochures, the company made representations respecting the durability of the tiles and the sturdiness of roofing installed in accordance with its particularly described method. H and W, husband and wife, purchased these roofing materials from MFC Corporation. Deliveries were made by MFC and the materials were installed by its employees. Thereafter, H and W sued MFC for damages caused to their residence when its roof was blown away by a typhoon. Will the action prosper? The action will prosper. MFC Corporation is liable under Article 1546 of the Civil Code (express warranty) because MFC, as seller to the general public, had made affirmation of fact relating to its advertised product, the natural tendency of which was to induce the buyers, as in fact it did induce H and W, to purchase the roofing materials, relying thereon. 191. Does the vendee have the right to pay the balance of the purchase price (or the unpaid installments) in a sale involving realty even after the expiration of the period agreed upon? Yes. Under Article 1592 of the Civil Code, even if the contract of sale stipulates that the same shall be deemed automatically cancelled in case of the non-payment of the price at the agreed time, the vendee may still pay even after the expiration of the period as long as no demand for rescission has been made either judicially or by a notarial act. If the seller did not rescind and even accepted late payments, the seller is deemed to have waived his right to rescind (Heirs of Pedro Escaniar vs. Court of Apeals, 288 SCRA 144).

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Note, however, that the provision under Article 1592 does not apply to a contract to sell where payment is a positive suspensive condition. There is no need for rescission because there can be no rescission of an obligation which is non-existent (Pangilinan vs. Court of Appeals, 279 SCRA 590). (NOTE: The Maceda Law, Republic Act 6552, is applicable even to contracts to sell and the buyer is entitled to a grace period which he earned). 192. On September 4, 1987, H and W sold to X under a Deed of Conditional Sale a parcel of land payable in installments. It was stipulated in the deed of conditional sale that should X fail to pay three successive monthly installments within the period stipulated, the sale shall be considered automatically rescinded without the need of judicial action and all payments made by X shall be forfeited in favor of the vendors by way of rental for the use and occupancy of the property and as liquidated damages. It was further stipulated that all improvements introduced by X in the property shall belong to the vendors without any right of reimbursement. As of September, 1990, X had already paid the amount of P2 Million, although she admitted having failed to pay the installments due in October and November, 1990. X, however, tried to pay the installments due in said months (October and November, 1990) including the amount due in December, 1990 on December 31, 1990 but was turned down by the vendors. When all her efforts to make payment were unsuccessful, X sought judicial action by filing a petition for consignation on January 4, 1991. On January 4, 1991, the vendors through their lawyer sent a letter to X notifying him that they were enforcing the provision on automatic rescission and automatic forfeiture clause in the deed of conditional sale. The letter also made a formal demand on X to vacate the property. H and W contend that they have complied with the requirements under Article 1592 of the Civil Code regarding the rescission of a sale of realty when they sent X the letter dated January 4, 1991. (a) What is the applicability of the requirement of rescission by suit or notarial act referred to in Article 1592 of the Civil Code? It is well-settled that Article 1592 of the Civil Code requiring demand by suit or notarial act in case the vendor of realty wants to rescind applies only to a contract of sale, and not to a sale on installment or a contract to sell, where title remains with the vendor until full payment of the price. In a contract to sell, the title over the subject property is transferred to the vendee only upon the full payment of the stipulated consideration. Unlike in a contract of sale, the title does not pass to the vendee upon the execution of the agreement or the delivery of the thing sold. In the present case, the deed of conditional sale is of the same nature as a sale on installment or a contract to sell, which is not covered by Article 1592. (b) Can H and W enforce the automatic forfeiture clause in the Deed of Conditional Sale?

The validity of the automatic forfeiture clause in the deed of conditional sale is conceded. However, H and W failed to prove the conditions that would warrant the implementation of this clause. It is clear that H and W were not justified in refusing to accept the tender of payment made by X on December 31, 1990. Had they accepted it on said date, she would have paid all three monthly installments due. In other words, there was deliberate effort on her part to meet her responsibility to pay. The fact is, : H and W refused to accept Xs payment so will have a reason to demand the enforcement of the automatic forfeiture clause. They cannot be rewarded for their own misdeed. In any event, the rescission of the contract and the forfeiture of the payments already made could not be affected because the case fals squarely under R.A. No. 6552, otherwise known as the Maceda Law. Pursuant to Section 3 of said law, X was entitled to a one-month grace period for every year of installments paid, which means that she had a total grace period of three months from December 31, 1990 (Valarao vs. Court of Appeals, 304 SCRA 155). 193. Marina Properties Corporation is the owner-developer of the Marina Bayhomes Condominium Project to be built on a parcel of land at Asiaworld City, Coastal Road in Paraaque, Metro Manila. The construction of the project commenced sometime in 1988, with XYZ Builders Construction Company as the principal contractor of Phase III of the project. As an incentive to complete the construction of Phase III, Marina allowed XYZ Builders to purchase a condominium unit in the condominium project known as Unit B121. Thus, on October 9, 1988, the parties entered into a Contract to Purchase and Sell covering Unit B-121 for P3.6 Million. After paying P1.8 Million, which was half of the contract price, XYZ Builders demanded the delivery of the unit, but Marina refused. In a letter dated March 15, 1991, XYZ builders inquired from Marina the turn-over status of the condominium unit. Marina replied that it was canceling the contract to purchase and sell due to XYZ Builders abandonment of the construction of Phase III. In the complaint for specific performance filed by XYZ Builders against Marina, the latter contends that its cancellation of the Contract to Purchase and Sell involving Unit B-121 is justified since XYZ Builders has failed to pay its monthly installment since October 1989 or for a period of almost two (2) years, and that XYZ Builder abandoned its work on the Phase III Project as of December, 1988. Was the cancellation of the contract to purchase and sell proper? The cancellation of the contract was not proper. Prior to Marinas unilateral act of rescission, XYZ Builders had already paid P1.8 Million, or 50% of the contract price of P3.6 Million. Moreover, the sum XYZ Builders had disbursed amounted to more than the total of 24 installments, i.e., two years worth of installments computed at a monthly installment rate of P67,000.00, inclusive of downpayment. Among the requirements of R.A. No. 6652, otherwise known as the Act to Provide Protection to Buyers of Real Estate on Installment Payments:, in order to effect the

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cancellation of the contract, a notarial cancellation must first be had. Therefore, absent this notarial cancellation, Marinas cancellation of its contract with XYZ Builders was void. ( Marina Properties Corp. vs. Court of Appeals, 294 SCRA 273). 194. X sold to Y a parcel of land under a deed of sale which was duly ratified and notarized. On the same day and along with the execution of the Deed of Sale, the parties executed a separate instrument, denominated as Right to Repurchase, granting X the right to repurchase the lot within ten (10) years. X offered to redeem but Y refused. May Y be compelled to resell the lot to X on the basis of the instrument denominated as a Right to Repurchase? No. The transaction between the parties was not a sale with right to repurchase, hence, X cannot avail of the right of conventional redemption. The right of repurchase is not a right granted the vendor by the vendee in a subsequent instrument, but is a right reserved by the vendor in the same instrument of sale as one of the stipulations of the contract. Once the instrument of absolute sale is executed, the vendor can no longer reserve the right to repurchase but some other contract right like an option to buy (Vasquez vs. Court of Appeals, 198 SCRA 102). 195. What is the effect of partial payment of the price and the entry into the land by the buyer in a case of oral sale of land? A vendee in an oral contract of sale of land who made part payment thereof, took possession of the land, and made valuable improvements thereon, is entitled to bring a suit to clear his title against the vendor who had refused to transfer the title to him. It is not necessary that the vendee has an absolute title, an equitable title being sufficient to clothe him with personality to bring an action to quite title. For, while the action is denominated as one for specific performance, it is in effect an action to quiet title (Pingol, et al. vs. Court of Appeals, 226 SCRA 118). 196. X and Y entered into an Option to Purchase, whereby Y promised to sell to X a piece of land within two years. X tendered payment on several occasions which Y rejected. X files an action for specific performance. Y contends that the option was a unilateral promise to sell and was unsupported by consideration distinct from the price, hence void. Is Ys contention correct? Ys contention is not correct. Once a unilateral promise to sell, even if unsupported by any consideration is accepted, it results in a perfected contract of sale. Article 1324 of the Civil Code applies. 197. Spouses H and W owned two parcels of land. They bought the same from Ws brothers A and B. When the couple were in need of money, they obtained a loan from XYZ Bank, secured by a real estate mortgage on their lands which were still registered in the names of Ws brothers A and B. The mortgage was foreclosed and XYZ Banks ownership was consolidated when Spouses H and W failed to exercise their right to redeem within one year. Meanwhile, Spouses H and W sold the parcels of land to C, another brother of W. The sale

was made after XYZ Bank consolidated its title on the subject lands. An agreement was made to the effect that H and W may redeem the property from C anytime when they have the money. C then bought the two parcels of land from XYZ Bank and the title was later transferred to him. When H and W asked C to deliver the property to them after paying the amount, C refused. May C be compelled to resell the parcels of land to H and W? No. A contract to repurchase arising out of a contract of sale where the seller did not have any title to the property sold is not valid. Since nothing was sold, there is also nothing to repurchase. One repurchases only what he had previously sold. In other words, the right to repurchase presupposes a valid contract of sale between the same parties. Undisputedly, C acquired title to the property from XYZ Bank, and not from the Spouse H and W. The subsequent agreement between H and W and C is actually an accepted unilateral promise to sell. Article 1479 of the Civil Code provides that an accepted unilateral promise to buy or sell a determinate thing for a price certain is binding upon the promissory if the promise is supported by a consideration distinct from the price. In the present case, the alleged written contract of repurchase is bereft of any consideration distinct from the price. Accordingly, as an independent contract, it cannot bind C. Moreover, the right of repurchase is not a right granted the vendor by the vendee in a subsequent instrument, but is a right reserved by the vendor in the same instrument of sale as one of the stipulations of the contract. Once the instrument of absolute sale is executed, the vendor can no longer reserve the right to repurchase, and any right thereafter granted the vendor by the vendee in a separate instrument cannot be a right of repurchase but some other right like the option to buy in the instant case (Nool vs. Court of Appeals, 276 SCRA 149). 198. A owns a parcel of land leased by B. Their lease contract contains a stipulation to the effect that B has the first option or priority to purchase the leased property in case A decides to sell the same. B subsequently assigned all his rights and interests in the leased property to C. Said assignment was contained in a Deed of Assignment with the conformity of A. A later sold the leased property to D for P5 Million. The assignee C wrote A so the latter had the property reconveyed to him for the same amount. The property was then offered to C for 15M. C turned down the offer. His counter-offer was to buy the property for P5 Million which was the same amount paid by D in the first sale. When C turned down the offer, A sold the property to D for P9 Million. Thereupon, C sued A and D for breach of his contractual right of first option to buy. Will the action prosper? The action will prosper. Cs complaint sufficiently alleges an actionable contractual breach on the part of the defendants A and D. It was stipulated in the contract of lease between A and C that the latter was granted first option or priority to purchase the leased properties in case A decides to sell the same.

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To comply with this obligation, the sale of the properties for the amount of P9 Million (the price for which the property was finally sold to D) should have been first offered to C. The basis of the right of first refusal must be the current offer to sell of the seller or offer to purchase of any prospective buyer. Only after the grantee fails to exercise said right could the owner validity offer to sell the property to a third person under the same terms as offered to the grantee. (Paraaque Kings Enterprise, Inc. vs. Court of Appeals, 268 SCRA 727). 199. X is the owner of a parcel of land. In order to secure a loan, he mortgaged a portion of it to ABC Bank which foreclosed the mortgage when X defaulted. Title was later acquired by the bank which then sold the land to Y. X, on the other hand, sold the unmortgaged portion of the land to Z. Can Y claim the right of legal redemption? The exercise of the right of legal redemption presupposes the existence of co-ownership at the time the conveyance is made by a co-owner and when it is demanded by the other co-owners. Considering that Y was not a co-owner of X of the portion sold at the time of the conveyance to Z, the right of legal redemption cannot be exercised (Uy vs. Court of Appeals, 246 SCRA 703). 200. X was on the verge of being prosecuted for violation of B.P. 22 on account of the rubber checks that she issued to Y amounting to P4.4 Million. To stave off her impending prosecution, X solicited the help of her relative Z. She requested Z to cede to Y his three lots in Tacloban City as settlement of the face value of the rubber checks. Z immediately vetoed the proposal because he owed Y nothing and he was under no obligation to convey to the latter his properties; moreover, his properties were not for sale. Undaunted, X explained to Z that he was in no danger of losing his properties as he will merely execute a simulated document transferring them to Y but they will be redeemed by her later with her own funds. After a lengthy discussion, Z agreed to execute a fictitious deed of sale in Ys favor with right to repurchase covering his three lots subject to the following conditions: (a) that the amount to be stated in the document is P4.4 Million with interest thereon at 5% per month; (b) that the properties will be repurchased within six (6) months; (c) that although it would appear in the document that Z is the vendor, it would be X who will provide the money for the redemption of the properties with her own funds; and (d) that titles to the properties will be delivered to Y but the sale will not be recorded in the Register of Deeds. To assure Z that X will redeem the properties, X issued to him two post-dated checks. One check was for P4.4 Million supposedly for the selling price of the properties and the other was for P420,000.00 corresponding to the interest for six months. Immediately thereafter, X prepared the Deed of Sale with Right to Repurchase and after it has been notarized, it was given to Y together with the titles of the

properties. As agreed upon, Y did not register the transaction with the Register of Deeds. When Z presented the two checks for payment, they were dishonored by the draweebank for having been drawn against a closed account. When X was nowhere to be found, he immediately filed an action to annul the sale pacto de retro with damages. He contends that the sale is void for lack of consideration because no money changed hands when he signed it and the checks which were issued for the redemption of the properties have been dishonored for having been drawn against a closed account. Was the pacto de retro sale without a valuable consideration? There was a valuable consideration in the sale. In preparing and executing the deed of sale with right of repurchase and in delivering to Y the land titles, Z actually accommodated X so she would not be charged criminally by Y. It is plain therefore that consideration existed at the time of the execution of the deed of sale with right of repurchase. It is not only Zs kindness to X, being a relative, but also his receipt of P420,000 00 from her as interest for the P4.4 Million, which impelled him to execute such contract. While it is true that the checks were dishonored, there is absolutely no basis for Z to file a complaint against Y to annul the pacto de retro sale on the ground of lack of consideration. Zs cause of action was to file criminal actions against X but not a civil action against Y to annul the sale. Moreover, Z cannot seek refuge in the equitable maxim that where one or two innocent persons must suffer, that person who gave occasion for the damages to be caused must bear the consequences. This is so because he was not an innocent person. As a matter of fact, he gave occasion for the damage caused by virtue of the deed of sale with right to repurchase which he prepared and signed (Mate vs. Court of Appeals, 290 SCRA 463). 201. A and three of her sisters B, C, and D were the co-owners of a parcel of land and a building. On August 6, 1979, they sold 1/5 of their undivided share in the subject parcel of land to their mother M, thus making the latter a co-owner of the property to the extent of the share sold. On September 8, 1986, without the knowledge of the other co-owners, M sold her 1/5 share in the property for P10,000.00 to E who is another sister of A. On May 30, 1992, A received a letter from E informing her about the sale, with a demand that the rental corresponding to her 1/5 share on the subject property be remitted to her. Said letter was sent with an attached copy of the Deed of Sale between E and M. On August 5, 1992, A received summons, with a copy of the complaint in Civil Case No. 15510 filed by E demanding her share in the rentals being collected by A from the tenants of the property. A then informed E that she was exercising her right of redemption as a co-owner of the subject property. On September 14, 1995, A instituted a civil action for redemption of the subject property. She contended that the 30-day period for redemption period under Article 1623 of the Civil Code had not

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begun to run against her since the vendor, M, never informed her and the other co-owners about the sale to E. She learned about the sale only on August 5, 1992, after she received the summons in Civil Case No. 15510, together with the complaint. (a) Is Es letter to A dated May 30, 1992 sufficient compliance with the notice requirement under Article 1623 of the Civil Code? No. Article 1623 of the Civil Code clearly and expressly provides that the thirty (30) day period of exercising the rights of pre-emption or redemption are to be counted from notice in writing by the vendor or prospective vendor not from any other person. The reasons for requiring that the notice should be given by the vendor, and not by the vendee, are easily discernible. The vendor of an undivided interest is in the best position to know who are his co-owners that under the law must be notified of the sale. Also, the notice by the seller removes all doubts as to the fact of the sale, its perfection, and its validity, the notice being a reaffirmation thereof, so that the party notified need not entertain doubt that the seller may still contest the alienation. This assurance would not exist if the notice should be given by the vendee. In the case at bar, A has not been furnished any written notice of sale or a copy thereof by M, the vendor. As right to exercise the legal right of preemption or redemption, given to a co-owner when any one of the other co-owners sells his share in the thing owned in common to a third person, as provided for in Article 1623 of Civil Code, has not yet accrued (Francisco vs. Boiser, G.R. No. 137677. May 31, 2000). (b) Granting that Es complaint in Civil Case No. 15510 amounted to actual knowledge by A of the sale between E and M, does A still have the right to redeem Ms 1/5 share? Assuming that the receipt by A of the summons in Civil Case No. 15510 on August 5, 1992 amounted to actual knowledge of the sale from which the 30-day period of redemption commenced to run, A still had until September 4, 1992 within which to exercise her right of legal redemption. Since A deposited the P10,000.00 redemption price on August 12, 1992, her exercise of said right was timely, and therefore the same should be given effect. LEASE 202. Lessor and lessee entered into a contract of lease involving a 4-storey commercial building. The contract expressly prohibits the assignment of the lease contract or any portion thereof. The lessee later subleased a portion of the leased premises to a third person. Can the lessor ask for the cancellation of the lease contract for violation of the provision against assignment? No, the lessor cannot have the lease cancelled for alleged violation of the provision against assignment. The lessee did not assign the lease, or any portion thereof, to the sublessee. Since the problem does not state that the contract of lease contains a prohibition against sublease, the sublease is lawful, the rule being that in the absence of an

express prohibition a lessee may sublet the thing leased, in whole or in part, without prejudice to his responsibility to the lessor for the performance of the contract. 203. May the lessee assign the lease to a third person? No, he cannot. Under Article 1649 of the Civil Code, the lessee cannot assign the lease without the consent of the lessor, unless there is a stipulation to the contrary. 204. What is the legal justification why the lessee cannot assign the lease without the consent of the lessor? The lessee cannot assign the lease without the consent of the lessor because an assignment of the lease constitutes novation (i.e., by substituting the person of the debtor) so the creditor-lessor must consent. An assignment exists when the lessee has by the contract made an absolute transfer of his interest as lessee, and has thus dissociated himself from the original contract of lease. In such a case his personality disappears, and there remains only in the juridical relation, two persons: the lessor and the assignee, who is converted into a lessee. Indeed the rights of the assignee as lessee are enforceable not against the assignor, but against the lessor. 205. May the lessee sub-lease the leased premises? Yes. Unlike in assignment, a lessee may generally sub-lease the property in the absence of express prohibition. This is so because the lessee remains a party to the lease even if he had already created a sub-lease thereon. 206. An action for unlawful detainer was brought against the lessee and the sub-lessee. The lessor prevailed. The lessee appealed, but the sublessee did not. Can execution issue against the sub-lessee? No. During the pendency of his appeal, the lessee has a right to occupy the leased premises; therefore, and in the meantime also, the sub-lessee may remain. 207. The lessee constructed an enclosed garage on a parcel of land leased to him. What are his rights to the garage, if any? The owner of the land, as lessor, can acquire the improvement by paying for one-half of its value. Should the lessor refuse to reimburse said amount, the lessee may remove the improvement, even though the principal thing may suffer damage thereby (Art. 1678, NCC). 208. X is the registered owner of two (2) parcels of land. On January 10, 1985, he (X) leased to Y said parcels of land at a monthly rental of P10,000.00 for a period of 18 months beginning August 1, 1984 and expiring on January 30, 1986. As part of the consideration of their lease agreement, X gave Y the exclusive right, option and privilege to purchase, within the lease period, the leased premises and all the improvements thereon for the aggregate amount of P1.8 Million. The lease contract provided that in order to

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exercise the option, Y has to send a letter to X manifesting his intent to exercise the option within the lease period ending January 30, 1986. On January 7, 1986, or approximately three (3) weeks before the expiration of the lease contract, X notified Y of the impending termination of their lease agreement, and the short period of time left within which Y could still validly exercise the option. X likewise requested Y to advise him on the option on or before January 30, 1986. In a letter dated January 15, 1986, which was received by X on January 29, 1986, Y requested for a six-month extension of the lease contract, alleging that he needs ample time to raise sufficient funds in order to exercise the option. In support of his request, he averred that he had already made a substantial investment on the property, and had been punctual in paying his monthly rentals. X rejected the request, but offered to lease the same property to Y at the rate of P30,000.00 per month, for a period of one (1) year. On February 18, 1986, Y notified X of his decision to exercise the option to purchase the property and at the same time he made arrangements for the payment of the stipulated downpayment. X refused Ys downpayment stressing that the period within which the option should have been exercised had already lapsed. Aggrieved by Xs refusal to accept the downpayment, Y filed an action for specific performance. Can Y still exercise the option under the lease contract? Yes. Ys letter to X dated January 15, 1986, was fair notice to the latter of his intent to exercise the option notwithstanding his request therein for extension of the lease contract. As stated in his letter, Y was requesting for an extension of the contract of lease for six months to allow him to generate sufficient funds in order to exercise his option to buy the leased property. While the formal exercise of the option was contained only in Ys letter dated February 18, 1986, still the intent to exercise the option was made manifest by the earlier letter of January 15, 1985 (Carceller vs. Court of Appeals, 302 SCRA 718). TRUSTS 209. Tenants of an apartment building, in order to purchase the building, designated the president of the tenants association to negotiate for them but no sale ripened. Two years later, tenants came to know that their President became the new owner of the apartment units. Was a constructive trust created between the president and the tenants? Was such trust violated? Yes, to both questions. A constructive trust was created between the president and the tenants in respect to the apartment building. Constructive trust arise against one who by fraud, duress, or abuse of confidence, obtains the legal right to the property which he ought not to hold. Said trust can be implied from the nature of the transaction since the president admitted that he was not only representing himself but also the other

tenants, hence, showing the confidence reposed in him. The president violated the trust when he kept secret the perfection of the sale for two years. He purchased the units for himself at bargain prices so he could resell them at a profit (Policarpio vs. Court of Appeals, 269 SCRA 334). 210. X was named as a vendee in a deed of sale although it was Y who actually paid the purchase price. Subsequently, X sold to Z the property without the knowledge or consent of Y. Was there an implied trust between X and Y? Yes. An implied trust was created between X and Y, the former being the trustee and the latter the beneficiary. An implied trust arises when a person purchases land with his own money and takes conveyance thereof in the name of another. In such case, the property is held by way of resulting trust in favor of the one furnishing the consideration for the transfer, unless a different intention appears. The first sentence of Article 1448 of the Civil Code, which is sometimes referred to as purchase money resulting trust, finds application in this case. Although the deed of sale was in the name of X, the purchase price was paid by Y who was the real owner of the property. To give rise to a purchase money resulting trust, it is essential that there be (a) an actual payment of money, property, or services, or an equivalent, constituting valuable consideration; and (b) such consideration must be furnished by the alleged beneficiary of a resulting trust (Tigno vs. Court of Appeals, 280 SCRA 262). 211. A, B, and C are co-owners in proindiviso shares of a parcel of land. In 1950, A and B sold the whole property to D. In 1972, C sold the half portion of his 1/3 share of the land and retained for himself the other half. Said 1/3 share was possessed and occupied by C himself and by his vendee E despite the sale of the whole land to D. C later filed an action for reconveyance. D invoked the defense that the action is already barred by prescription. Will the suit prosper? Yes, the suit will prosper. In Heirs of Olviga vs. Court of Appeals, 227 SCRA 330, the Supreme Court ruled that an action for reconveyance of a parcel of land based on implied or constructive trust prescribes in ten (10) years (point of reference being the date of registration of the deed or the date of issuance of the certificate of the title over the property) but this rule applies only when plaintiff or the person enforcing the trust is not in possession of the property, since, if a person claiming to be the owner thereof is in actual possession of the property as in the case of C, the right to seek reconveyance which is in effect an action to quiet title does not prescribe. The reason for this is that one who is in actual possession of the land claiming to be the owner may wait until his possession of the land and his title is attacked before taking steps to vindicate his right. (NOTE: The rule that a trustee cannot acquire by prescription ownership over property entrusted to him until and unless he repudiates the trust applies to express trusts and resulting implied trusts. However, in constructive implied trusts, prescription may supervene even if the trustee does not repudiate the

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relationship (Buan Vda. De Esconde vs. Court of Appeals, 253 SCRA 66). PARTNERSHIP 212. Can a husband and wife form a limited partnership? Yes, they can. The Civil Code prohibits a husband and wife from constituting a universal partnership. Since a limited partnership is not a universal partnership, a husband and wife may validly form one or be a member thereof (CIR vs. Suter, et.al., 27 SCRA 152). 213. Can two corporations general partnership? organize a

SECURED TRANSACTIONS 216. May a contract of pledge, real estate mortgage, antichresis, and chattel mortgage secure after-incurred obligations? Except for a chattel mortgage , a pledge, real estate mortgage, or antichresis may exceptionally secure after-incurred obligations so long as these future debts are accurately described. This is so because a chattel mortgage can only cover obligations existing at the time the mortgage is constituted. One of the requirements of chattel mortgage is an affidavit of good faith and the law has provided that the parties to the contract must execute an oath that the mortgage is made for the purpose of securing the obligation specified in the conditions thereof and for no other purposes. The debts referred to in the law is a current obligation, not an obligation that is merely contemplated. A promised expressed in a chattel mortgage to include debts that are yet to be contracted can be a binding agreement that can be compelled upon but the security itself does not come into existence until after a chattel mortgage agreement covering the newlycontracted debt is executed either by including a fresh chattel mortgage or by amending the old contract. Refusal on the part of the borrower to execute a new contract may be treated as default and the mortgagee can then foreclose the original chattel mortgage with respect to the old obligation. (NOTE: Contracts of security are either personal or real. In contracts of personal security, such as guaranty or suretyship, the faithful performance of the obligation by the principal debtor is secured by the personal commitment of another (the guarantor or surety). In contracts of real security, such as pledge, mortgage or antichresis, that fulfillment is secured by an encumbrance of property in pledge, the placing of the movable property in the possession of the creditor; in chattel mortgage, by the execution of the corresponding deed substantially in the form prescribed by law; in real estate mortgage, by the execution of a public instrument encumbering the real property covered thereby; and in antichresis, by a written instrument granting to the creditor the right to receive the fruits of an immovable property with the obligation to apply such fruits to the payment of interest, if owing, and thereafter to the principal of his credit upon the essential condition that if the principal obligation becomes due and the debtor defaults, then the property encumbered can be alienated for the payment of the obligation, but should the obligation be duly paid, then the contract is automatically extinguished from the accessory character of the agreement. As the law so puts it, once the obligation is complied with, the contract of security becomes, ipso facto, null and void). 217. H and W were the owners of a parcel of land. To secure a loan, they executed a deed of real estate mortgage over their property in favor of the Development Planters Bank. Due to the untimely death of H and W, the loan was not paid in full. Consequently, the bank extra-judicially foreclosed on the mortgage. At the public auction sale, the bank was the highest bidder. After the lapse of the redemption period, the bank consolidated its title on the property and became its registered owner. The heirs of H and W later filed an action for the annulment of the public

No. A corporation may not be a general partner in a general partnership, either with an individual or with another corporation, because the principle of mutual agency in general partnership allowing the other general partner to bind the corporation will violate the principle in corporation law that only the board of directors may bind the corporation. 214. X, Y, and Z are partners in a construction business. While operating a bulldozer in the ordinary course of the partnership business, X caused damage to the cars of his partner Y and A, their client. Is the partnership liable for the losses suffered by Y and A? The partnership is liable for the damage suffered by A but not to the damage suffered by Y. Where, by any wrongful act or omission of any partner acting in the ordinary course of the business of the partnership, or with the authority of his co-partners, loss or injury is caused to any person, not being a partner in the partnership, or any penalty is incurred, the partnership is liable therefore to the same extent as the partner so acting or omitting to act. 215. Atty. X withdrew from the XYZ law firm which does not have a fixed term. He later filed with the SEC a petition for the dissolution of the firm. This was denied by the SEC hearing officer on the ground that the withdrawal of Atty. X did not dissolve the firm. Was the SEC hearing officer correct? No. A partnership which does not have a fixed term is a partnership at will. The partnership of X, Y, and Z is one such partnership. The birth and life of a partnership at will is predicated on the mutual desire and consent of the partners. The right to choose with whom a person wishes to associate himself is the very foundation and essence of that partnership. Its continued existence is, in turn, dependent on the constancy of that mutual resolve, along with each partners capability to give it. Verily, anyone of the partners may, at his sole pleasure, dictate a dissolution of the partnership at will. He must, however, act in good faith. If he acted in bad faith, it would not prevent the dissolution of the partnership but that it can result in a liability for damages (Ortega, et.al., vs. Court of Appeals, 245 SCRA 529).

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auction sale and for the reconveyance of the property. They contended that upon the death of H and W, the bank should have filed its claim against the estate of the said deceased mortgagors. Will the suit prosper? The suit will not prosper. A secured creditor holding a real estate mortgage has three options in case of death of the debtor. These are: (1) waive the mortgage and claim the entire debt from the estate of the mortgagor as an ordinary claim; (2) foreclose the mortgage judicially and prove any deficiency as an ordinary claim; and (3) rely on the mortgage exclusively, foreclosing the same at anytime before it is barred by prescription, without right to file a claim for deficiency. Obviously, the bank availed itself of the third option (Maglaque vs. Development Planters Bank, 307 SCRA 156). 218. When a party signs a promissory note as a co-maker and binds himself to be jointly and severally liable with the principal debtor in case the latter defaults in the payment of the loan, is such undertaking that of a surety as in insurer of the debt, or of a guarantor who warrants the solvency of the debtor? The undertaking is one of suretyship, not guaranty. The liability of a party who binds himself to be jointly and severally liable with the principal debtor is that of a surety. Being such, he is bound equally and absolutely with the principal and as such is deemed an original promissor and debtor from the beginning. This is because in suretyship, there is but one contract, and the surety is bound by the same agreement which binds the principal. A suretyship is an undertaking that the debt shall be paid; a guaranty, an undertaking that the debtor shall pay. A surety is an insurer of the debt, whereas a guarantor is an insurer of the solvency of the debtor. Stated differently, a surety promises to pay the principals debt if the principal will not pay, while a guarantor agrees that the creditor, after proceeding against the principal, may proceed against the guarantor if the principal is unable to pay. A surety binds himself to perform if the principal does not, without regard to his ability to do so. A guarantor, on the other hand, does not contract that the principal will pay, but simply that he is able to do so. (Palmares vs. Court of Appeals, 288 SCRA 422). 219. What is a continuing guaranty? A continuing guaranty is one which is not limited to a single transaction, but which contemplates a future course of dealing, covering a series of transactions, generally for an indefinite time or until revoked. Under the Civil Code, a guaranty may be given to secure even future debts, the amount of which may not be known at the time the guaranty is executed. This is the basis for continuing guaranty or suretyship. It is prospective in operation and intended to provide security with respect to future transactions within certain limits, and contemplates a succession of liabilities for which the guarantor becomes liable as they accrue. A guaranty shall be construed as continuing when by the terms thereof it is evident that the object is to give a standing credit to the principal debtor to be used from time to time either indefinitely

or until a certain period . Hence, if the contract states that the same shall secure advances to be made from time to time, it is a continuing guaranty. 220. On December 29, 1975, H and W, husband and wife, were granted by the PNB a loan of P34,000.00. To guarantee the loan, the couple executed in favor of the bank a real estate mortgage over nine parcels of individually-titled lands with an aggregate area of 2,292 square meters. When the spouses failed to pay, the bank foreclosed on the mortgage. Thereafter, the mortgaged properties were sold to the bank for P7,000.00 as the highest bidder at the public auction sale. This amount, however, was short of P64,000.00 representing the balance on the principal obligation, accrued interests, penalties, attorneys fees, and expenses of litigation. When the couple failed to redeem the properties within the statutory period, the bank filed an action to claim the deficiency. Is the bank deficiency claim? entitled to recover its

Yes. It is a settled rule that if the proceeds of the sale are insufficient to cover the debt in an extrajudicial foreclosure of mortgage, the mortgagee is entitled to claim the deficiency from the debtor. While the legislature has denied the right of a creditor to sue for deficiency resulting from foreclosure of security given to guarantee an obligation as in the case of pledges (Art. 2115, NCC) and in chattel mortgages of a thing sold on installment basis (Art. 1484, par. 3, NCC), Act No. 3135 which governs the extra-judicial foreclosure of mortgages, while silent as to the mortgagees right to recover, does not, on the other hand, prohibit recovery of deficiency. Accordingly, a deficiency claim arising from the extra-judicial foreclosure of mortgage is allowed (Phil. National Bank vs. Court of Appeals, G.R. No. 121739, June 14, 1999). 221. X and Y were the owners of a parcel of land. To secure a loan, they mortgaged the same to ABC Bank. When the loan was not paid after maturity, the bank extrajudicially foreclosed on the mortgage, and later consolidated its title on the land upon failure of X and Y to redeem the same within the period prescribed by law. X and Y later filed suit to annul the foreclosure sale contending that: (a) they were not notified of the foreclosure sale; (b) that the deputy sheriff who conducted the sale did not submit a certificate of posting; and (c) that the Post Office and Finance Building where the notice of sale was allegedly posted were not public places. Will the suit prosper? The suit will not prosper. There was no irregularity in the sale at public auction First, personal notice to X and Y is not required under Act No. 3135. All that is required is that notice be given by posting notices of the sale for not less than twenty (20) days in at least three public places of the city or municipality where the property is situated, and publication once a week for at least three (3) consecutive weeks in a newspaper of general circulation in the city or municipality where the property is situated, if the property is worth more than four hundred pesos (Section 3, Act No. 3135). Therefore, any discussion into the issue of whether X and Y received a notice of

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foreclosure sale would be an exercise in futility since it would not have any bearing at all on the alleged validity or invalidity of the foreclosure sale in question. Second, a certificate of posting of the notice of sale is not required, much less considered indispensable, for the validity of the foreclosure sale under Act No. 3135. Rather, it is significant only in the matter of proving compliance with the required posting notice. If the sheriff testifies and declares under oath that he posted notices of the questioned sale, such testimony suffices in lieu of the customary certificate of posting and can properly be accorded the presumption of regularity of performance having come from a public officer to whom no improper motive to testify has been attributed. (Bohanan vs. Court of Appeals, 256 SCRA 335). (NOTE: The purchaser of a foreclosed property, upon ex-parte application therefore and the posting of the requisite bond, has the right to acquire possession of said foreclosed property during the 12month redemption period. This is sanctioned under Section 7 of Act 3135, as amended by Act 4118. With more reason, a purchaser can demand for a writ of possession after the expiration of the redemption period. (Zaballero vs. Court of Appeals, 229 SCRA 810). 222. X granted a loan of P7.5 Million to Y, in consideration of which the latter executed the following documents: (a) a promissory note stating an interest charge of 4% interest per month for six months; (b) a deed of mortgage over a parcel of land covered by TCT No. T-58748; and (c) an undated deed of sale of the mortgaged property in favor of the mortgagee X. The promissory note expressly provided that upon failure of the mortgagor to pay the stipulated interest without prior arrangement with the mortgagee, full possession of the property will be transferred and the deed of sale will be registered. For this purpose, the owners copy of TCT No. T-58748 was delivered to X, the mortgagee. When Y failed to pay interest, X registered the undated deed of sale of the mortgaged land in his favor. As a result, TCT No. T-58748 was cancelled and in lieu thereof, TCT No. PT-85569 was issued in the name of X. Thereafter, X demanded possession of the mortgaged realty. When Y refused to vacate, X filed an action for possession before the RTC. Is X entitled to the possession of the mortgaged property? X is not entitled to the possession of the mortgaged property. The stipulation in the promissory note providing that, upon failure of Y to pay interest, ownership of the property would be automatically transferred to X and the stipulation that the deed of sale in his favor would be registered are, in substance, a pactum commisorium. They embody the two elements of pactum commisorium under Article 2088 of the Civil Code, to wit: (a) that there should be a pledge or mortgage wherein a property is pledged or mortgaged by way of security for the payment of loan; and (2) that 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 the principal obligation within the stipulated period.

The subject transaction being void, the registration of the deed of sale, by virtue of which X was able to obtain TCT No. PT-85569 covering the subject lot, must also be declared void (A. Francisco Realty and Development Corp. vs. Court of Appeals, 298 SCRA 349). 223. P obtained from D a loan of P336, 000.00 covered by a promissory note. Simultaneous with the execution of the promissory note was the execution of Assignment of Leasehold Rights where P assigned to D his leasehold where P assigned to D his leasehold rights and interests over a 44-hectare fishpond, together with all the improvements thereon. Condition No. 12 of the deed of assignment provides for the appointment of the assignee D as attorney-in-fact with authority, among other things, to sell of otherwise dispose of the leasehold rights, in case of default of P in paying his loan, and to apply the proceeds to the payment of the loan. When P defaulted in the payment of his loan, D immediately appropriated Ps leasehold rights over the fishpond and claimed ownership over the same on the basis of the deed of assignment executed by P. D then demanded that P vacate the fishpond. When P refused, D instituted an action to eject him therefrom. (a) What was the nature of the deed of assignment made by P to D? The deed of assignment executed by P merely served as security for his loan and was never intended to convey ownership of the leasehold rights to D. D cannot take refuge in the condition that he can sell or dispose of the leasehold rights in case P defaults in the payments of his loan. Said condition in the deed of assignment did not provide that Ps default would operate to vest in D ownership of said leasehold rights. Under the law, an assignment to guarantee an obligation, as in the instant case, is virtually a mortgage and not an absolute conveyance of title which confers ownership on the assignee. (b) Is Condition No. 12 in the subject deed of assignment a pactum commissorium? Condition No. 12 in the subject Deed of Assignment is not a pactum commissorium. It is settled that a condition in a deed of assignment providing for the appointment of the assignee as attorney-in-fact with authority, among other things, to sell or otherwise dispose of the assigned property, in case of default by the assignor, is a standard condition in mortgage contracts and is in conformity with Article 2087 of the Civil Code, which authorizes the mortgagee to foreclose the mortgage and alienate the mortgaged property for the payment of the principal obligations ( Development Bank of the Phils. Vs. Court of Appeals, 284 SCRA 14). 224. On April 17, 1980, ABC Corporation obtained a loan of P2 Million from DBP. By virtue of this loan, the corporation, through its President, Executed a promissory note for the said amount, promising to pay the loan by installment. As security for the said loan, a chattel mortgage was executed by the corporation over its properties

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consisting of inventories, furnitures and equipments, to cover the whole value of the loan. Upon failure of the corporation to pay, the bank extrajudicially foreclosed the chattel mortgage, and, as sole bidder in the public auction, purchased the foreclosed properties for a sum of P300,000.00. Thereafter, the bank filed a complaint against the corporation for the collection of the balance of P4.3 Million which includes the unpaid outstanding obligation, interests, penalties and surcharges. May the bank recover the deficiency? Yes. Section 14 of Act No. 1508, as amended, or the Chattel Mortgage Law, expressly entitles the debtor-mortgagor to the balance of the proceeds of the sale at public auction, upon satisfaction of the principal obligation and costs. Since the Chattel Mortgage Law bars the creditor-mortgagee from retaining the excess of the sale proceeds, there is a corollary obligation on the part of the debtormortgagor to pay the deficiency in case of a reduction in the price at public auction (PAMECA Wood Treatment Plan, Inc. vs. Court of Appeals, 310 SCRA 281). (NOTE: The rule is different in pledge because the creditor-pledgee is not entitled to a recovery of his deficiency claim. Under Article 2115 of the Civil Code, the sale of the thing pledged extinguishes the entire principal obligation, such that the pledgor-debtor may no longer recover proceeds of the sale in excess of the amount of the principal obligation; in a chattel mortgage, the mortgagor-debtor is allowed.) 225. What are the rules on interest rates under the Civil Code? 1. No interest rate shall be paid unless it is expressly stipulated in writing. 2. In the absence of stipulation as to the amount, interest rate of 12% applies to: (a) loans (Central Bank Circular No. 416); (b) forbearance for the use of money, goods or credit; and (c) judgment involving a loan or forbearance of money, goods or credit. 3. In all other monetary judgments not involving loans or forbearance for the use of money, goods or credit, Article 2209 of the Civil Code provides that the legal interest of 6% per annum shall be applied in the absence of stipulation. This applies, for example, in a judgment for non-payment of purchase price or actions for damages for injury to person or property. 4. Interest rate for actions for damages under Article 2209 is imposable (a) from filing before judgment, 6% per annum; (b) from judgment up to the time of finality, 6% per annum; and (c) from finality up to actual payment, 12% per annum because it partakes of the nature of forbearance for the use of money. 226. Crismina contracted the services of Norma for the sewing of 20,000 pieces of assorted girls denims. Crismina was obliged to pay Norma, for her services, the total amount of P76,000.00. As agreed upon, Norma sewed the materials and

delivered them to Crismina which acknowledged the same. Despite demands, however, Crismina failed to pay Norma the stipulated amount of P76,000.00. Consequently, Norma sued Crismina for the collection of the principal amount of P76,000.00. After trial, the trial court rendered judgment ordering Crismina to pay Norma the sum of P76,000.00 with interest thereon at 12% per annum, to be counted from the filing of the complaint until fully paid. Crismina interposed an appeal contending that the trial court erred in imposing interest at the rate of 12% per annum for an obligation that does not involved a loan or forbearance of money in the absence of stipulation of the parties. Will the appeal prosper? Yes, the appeal will prosper. The amount due in this case arose from a contract for a piece of work, not from a loan or forbearance of money, hence, the legal interest of 6% per annum should be applied. Furthermore, since the amount of the demand could be established with certainty when the complaint was filed, the 6% should be computed from the filing of said complaint. But after judgment becomes final and executory until the obligation is satisfied, the interest should be reckoned at 12% per year annum. The interim period is deemed to be equivalent to a forbearance of credit. (Crismina Garments, Inc. vs. Court of Appeals, 304 SCRA 356) 227. Distinguish between and mutuum: commodatum

(1) Commodatum ordinarily involves something not consummable (Art. 1936, NCC), while in mutuum, the subject matter is money or other consummable thing. (2) In commodatum, ownership of the thing loaned is retained by the lender ( Art. 1933, NCC), while in mutuum, the ownership is transferred to the borrower. (3) Commodatum, is essentially gratuitous, while mutuum maybe be gratuitous or onerous, that is, with stipulation to pay interest. (4) In commodatum, the borrower must return the identical thing loaned, while in mutuum, the borrower need only pay the same amount of the same kind and quality. (5) Commodatum may involve real or personal property (Art. 1937, NCC), while mutuum refers only to personal property; (6) Commodatum is a loan for use (Art. 1935, NCC), while mutuum is a loan for consumption. (7) In commodatum, the bailor may demand the return of the thing loaned before the expiration of the term in case of urgent need ( Art. 1946, NCC), while in mutuum, the lender may not demand its return before the lapse of the term agreed upon. and (8) In commodatum, the loss of the thing loaned is suffered by the bailor since he is the owner (Art. 1942; Art. 1174, NCC), while in mutuum, the borrower suffers the loss even if caused exclusively by a fortuitous event.

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(NOTE: The bailor in commodatum need not be the owner of the thing loaned (Art. 1938, NCC) since by the loan, ownership does not pass to the borrower. It is sufficient if the bailor has such possessory interest in the subject-matter or right to its use which he may assert against the bailee and third persons although not against the rightful owner.) 228. What are the instances when the bailee is liable for the loss of the thing loaned even if it should be due to a fortuitous event? As a general rule, the bailee is not liable for loss or damage of the thing loaned even if it should be through a fortuitous event, except in the following cases: (1) he devotes the thing to any purpose different from that which it has been loaned; (2) he keeps it longer than the period stipulated or after the accomplishment of the use for which the commodatum has been constituted; (3) if the thing loaned has been delivered with appraisal of its value, unless there is a stipulation exempting the bailee from responsibility in case of a fortuitous event; (4) if he lends or leases the thing to a third person who is not a member of his household; (5) if, being able to save either the thing borrowed or his own thing, he chose to save the latter. (Art. 1942, NCC). DEPOSIT 229. What is the principal purpose of a contract of deposit? The principal purpose of a contract of deposit is the safekeeping of the thing delivered so that if it is only an accessory or secondary obligation of the recipient, deposit is not constituted but some other contract like lease, commodatum, or agency. 230. Is it necessary that the depositor be the owner of the thing deposited? The depositor need not be the owner of the thing deposited considering that the contract does not involve a transfer of ownership. As a matter of fact, the depositary cannot even dispute the title of the depositor to the thing deposited (Art. 1984, par. 1, NCC). This is so because the depositary is in estoppel. 231. May the depositary use the thing deposited? Generally, the depositary cannot make use of the thing deposited without the express permission of the depositor (Art. 1977, par. 1, NCC) . However, the depositary may make use of the thing deposited even without the express permission of the depositor when such use is necessary for its preservation but in such case the use is limited for that purpose only (Art. 1977, par. 3).

232. What are the rules when the depositary is expressly given permission to use the thing deposited? (1) If the thing deposited is nonconsummable and the depositary has permission to use the thing, the contract loses the character of a deposit and acquires that of a c ommodatum despite the fact that the parties may have denominated it is a deposit, unless safekeeping is still the principal purpose of the contract. (2) If the thing deposited is money or other consummable thing, the permission to use it will result in its consumption and converts the contract into a simple loan or mutuum. But if safekeeping is still the principal purpose of the contract, it is still a deposit but an irregular one, hence, it is called an irregular deposit. 233. What are the different kinds of deposit? A deposit may be voluntary or necessary. A voluntary deposit is made by the free will of the depositor. In a necessary deposit, this freedom of choice is absent. A deposit is necessary (1) when it is made in compliance with a legal obligation; (2) when it takes place on the occasion of any calamity, such as fire, storm, flood, pillage, shipwreck, or other similar events; (3) when made by travelers in hotels and inns; and (4) when made by passengers in common carries (Arts. 1996, 1997, 1998, and 1754, NCC). TORTS AND DAMAGES 234. Peter, a Danish tourist, leased from Filcar transport, a Mitsubishi Colt Lancer. Though not possessed with a Philippine drivers license, Peter drove the rented car. While cruising along EDSA, the car collided with and severely damaged the car owned and driven by Lydia. As a consequence, FGU Insurance Corporation, in view of its insurance contract with Lydia, paid the latter her insurance claim. By way of subrogation, it sued Peter and Filcar Transport for quasi-delict. Because Peter had already left the country earlier, he was dropped from the complaint. Trial proceeded only against Filcar Transport. After trial, the court dismissed the complaint for failure of FGU Insurance Corporation to substantiate its claim. Was the dismissal proper? Yes, the dismissal was proper. To sustain a claim for quasi-delict based under Article 2176 of the Civil Code, the following requisites must concur: (a) damage suffered by the plaintiff; (b) fault or negligence of the defendant; and (c) connection of cause and effect between the fault or negligence of the defendant and the damage incurred by the plaintiff. In the present case, FGU Insurance Corporation failed to prove the existence of the second requisite; i.e., fault or negligence of Filcar Transport, because only the fault or negligence of Peter was sufficiently established. It is plain that the cause of the accident was Peters negligent driving thus making the damage suffered by the other vehicle as his personal liability. Filcar Transport did not have any participation

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therein (FGU Insurance Corp. vs. Court of Appeals, 287 SCRA 718). 235. On October 2, 1984, X and Y entered into a contract of lease whereby the former leased to the latter the ground floor of its building. The lease was to take effect on December 1, 1984 and expire at midnight on November 30, 1994. As stipulated, Y paid X a sum equivalent to six months rentals, as deposit and advance rentals. It appears that before leasing the premises to Y, X had already leased the same to Z for a term of five (5) years beginning October 1, 1981 up to midnight of September 30, 1986. However, the addendum to their contract provided, among others, that Z shall have the right to terminate the lease contract at anytime before the end of the 5year period by giving notice in writing to X at least six months in advance. In a letter dated May 3, 1984, Z wrote to X informing the latter of the termination of their contract of lease by October, 1984. Purportedly because of this letter, X entered into a contract of lease with Y for the lease to it of the premises occupied by Z beginning December 1, 1984 or two months after the announced termination of Xs contract with Z in October 1984. But came October 1984, Z failed to vacate. Despite Xs repeated demands, Z refused to vacate the leased premises contending that it still has a subsisting lease up to September 30, 1986. For failure of X to place Y in possession of the leased premises, Y rescinded their contract of lease on March 19, 1985 and asked for reimbursement and payment of damages. Thereafter, it commenced judicial action against X for breach of contract and damages. X disclaimed any actionable fault or negligence for the non-delivery of the leased space to Y and, instead, heaped the blame on Z against whom it filed a third-party complaint with prior leave of court. (a) Is X liable to Y for damages? X is liable to Y for damages. Article 1654 of the Civil Code provides that a lessor, like X, is obliged to deliver the thing which is the object of the contract in such a condition as to render it fit for the use intended. Failure to do so constitutes a wrong to which X exposes itself to legal action, including being held liable for damages. The fact that Z did not vacate the premises at the time Y was supposed to enter therein cannot exculpate X from its liability for the nonperformance of its obligation towards Y. When X entered into the second lease contract at the time of the subsistence of the first lease contract, it knew that Z is still occupying the premises. Thus, it took the risk that if it could not deliver the premises for whatever reason, it must answer to Y for damages. (b) Is Z liable to Y for damages? Z is not to Y for damages. Assuming arguendo that Zs refusal to leave the leased premises was the proximate cause of Xs failure to comply with its obligation to Y, still the latter, as second lessee, has no cause of action against the first lessee Z because there was no privity of contract between them (Valgosons Realty, Inc. vs. Court of Appeals, 295 SCRA 449).

236. William Lines was the owner of M/V Manila City, a luxury passenger-cargo vessel. On February 5, 1991, William Lines brought said vessel to the Cebu Shipyard and Engineering Works for annual dry-docking and repair. While the vessel was undergoing dry-docking and repairs within the premises of Cebu Shipyard, the officers and crew of M/V Manila City stayed in the vessel, using their cabins as living quarters. On February 16, 1991, after the vessel was transferred to the docking quay, it caught fire and sank, resulting to its eventual loss. On February 21, 1991, William Lines field a complaint for damages against Cebu Shipyard, alleging that the fire which broke out in M/V Manila City was caused by Cebu Shipyards negligence and lack of care. (a) Is Cebu Shipyard liable for the loss of the vessel? Yes. Under the circumstances of the case, the doctrine of res ipsa loquitor applies. For the doctrine of res ipsa loquitor to apply to a given situation, the following conditions must concur: (1) the accident was of a kind which does not ordinarily occur unless someone is negligent; and (2) that the instrumentality or agency which caused the injury was under the exclusive control of the person charged with negligence. The facts in the instant case reveal the concurrence of said conditions. First, the fire that occurred and consumed M/V Manila City would not have happened in the ordinary course of things if reasonable care and diligence had been exercised. In other words, some negligence must have occurred. Second, the agency charged with negligence is Cebu Shipyard which had control over the subject vessel when it was docked for annual repairs. (b) Suppose there was a stipulation limiting the liability of Cebu Shipyard to One Million Pesos only in case of loss or damage to the vessel, is such stipulation valid? The stipulation is not valid. Although in this jurisdiction, contracts of adhesion have been consistently upheld as binding per se, as binding as an ordinary contract, there are instances when reliance on such contracts cannot be favored especially when the facts and circumstances warrant that subject stipulation be disregarded. Considering that negligence on the part of Cebu Shipyard has been sufficiently proven, it would indeed be unfair and inequitable to limit the liability of Cebu Shipyard to One Million Pesos only. To allow Cebu Shipyard to limit its liability to One Million Pesos only notwithstanding the fact that the total loss suffered by William Lines amounted to Forty Five Million Pesos would sanction the exercise of a degree of diligence short of what is ordinarily required because, then, it would not be difficult for Cebu Shipyard to escape liability by the simple expedient of paying an amount for much lower than the actual damage or loss suffered by William Lines (Cebu Shipyard and Engineering Works vs. William Lines, 306 SCRA 762). 237. Reynaldo was on his way home. He was riding a motorcycle traveling on the southbound lane of East Service Road, Cupang,

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Muntinlupa. An Isuzu truck-trailer driven by Freddie was traveling ahead of him at 20 to 30 Kilometers per hour. The truck was loaded with two (2) metal sheets extended on both sides, two (2) pairs of red lights, about 35 watts each, on both sides of the metal plates. The asphalt road was not well lighted. At some point on the road, Reynaldo crashed his motorcycle into the left rear portion of the truck-trailer, which was without tail lights. Due to the collision, Reynaldo sustained head injuries which caused his death. The owner of the trucktrailer was later sued for damages. Was what Reynaldos death? the proximate cause of

were able to pull Atty. Caorong out of the burning bus and rushed him to the hospital where he died while undergoing operation. Sued for damages, the bus company denied any liability for the death of Atty. Caorong contending that it was not negligent in the performance of its obligation under its contract of carriage; that the seizure of the bus by armed men constitutes force majeure, and that Atty. Caorong is guilty of contributory negligence. (a) Is the bus company liable for the death of Atty. Caorong? Yes, the bus company is liable for the death of Atty. Caorong. Article 1763 of the Civil Code provides that a common carrier is responsible for injuries suffered by a passenger on account of the willful acts of the other passengers, if the employees of the common carrier could gave prevented the act through the exercise of the diligence of a good father of a family. In the present case, it is clear that because of the negligence of the bus companys employees, the seizure of the bus by armed men was made possible. Had the bus company and its employees been vigilant, they would not have failed to see that the malefactors had a large quantity of gasoline with them. Under the circumstances, simple precautionary measures to protect the safety of passengers, such as frisking passengers and inspecting their baggages, preferably with non-intrusive gadgets such as metal detectors, before allowing them on board could have been employed without violating the passengers constitutional rights. Accordingly, a common carrier can be held liable for failing to prevent a hijacking by frisking passengers and inspecting their baggages. (b) Was the seizure of the bus by armed men a force majeure? The seizure of the bus does not constitute force majeure. Article 1174 of the Civil Code defines a fortuitous event as an occurrence which could not be foreseen or which though foreseen, is inevitable. To be considered as force majeure, it is necessary that: (1) the cause of the breach of the obligation must be independent of the human will; (2) the event must be either unforeseeable or unavoidable; (3) the occurrence must be such as to render it impossible for the debtor to fulfill the obligation in a normal manner; and (4) the obligor must be free of participation in, or aggravation of, the injury to the creditor. The absence of any of the foregoing requisites would prevent the obligor from being excused from liability. In the present case, this factor of unforeseeability (the second requisite for an event to be considered as force majeure) is lacking. Despite the report that the Maranaos were planning to burn some of Fortunes buses, nothing was really done by the bus company to protect the safety of the passengers. (c) Was Atty. contributory negligence? Caorong guilty of

Reynaldos bumping into the left rear portion of the truck-trailer was the proximate cause of his death. Traveling behind the truck, he had the responsibility of avoiding bumping the vehicle in front of him. He was in control of the situation. His motorcycle was equipped with headlights to enable him to see what was in front of him. He was traversing the service road where the prescribed speed limit was less than that in the highway. It has been said that drivers of vehicles who bump the rear of another vehicle are presumed to be the cause of the accident, unless contradicted by other evidence. The rationale behind the presumption is that the driver of the rear vehicle has full control of the situation as he is in a position to observe the vehicle in front of him. Consequently, no other person was to blame but Reynaldo himself since he was the one who bumped his motorcycle into the rear of the Isuzu truck. He had the last clear chance of avoiding the accident (Reynara vs. Hiceta, 306 SCRA 102). 238. Fortune Express is a bus company operating in Mindanao. On November 18, 1989, a Fortune Express bus figured in an accident with a jeepney resulting in the death of several persons, including two Maranaos. Police investigators revealed that certain Maranaos were planning to take revenge on the bus company by burning some of its buses. Investigators revealed this plan to the bus company. On November 22, 1989, three armed Maranaos who pretended to be passengers, seized a Fortune Express bus at Linamon, Lanao del Norte while on its way to Iligan City. The leader of the hijack group ordered the driver to stop the bus on the side of the highway, and then shot the driver on the arm which caused him to slump on the steering wheel. All the passengers were then ordered to get off the bus. The passengers, including Atty. Talib Caorong, stepped out of the bus and went behind the bushes in a field some distance from the highway. However, Atty. Caorong returned to the bus to retrieve something from the overhead rack. At that time, one of the armed men was pouring gasoline on the head of the driver. Atty. Caorong pleaded with the armed men to spare the driver as he was innocent of any wrongdoing and was only trying to make a living. The driver, who had in the meantime regained consciousness, climbed out of the left window and crawled to the canal on the opposite side of the highway. He then heard shots from inside the bus. One of the passengers saw Atty. Caorong was hit. Then the bus was set on fire. Some passengers

Atty.Caorong was not guilty of contributory negligence in returning to the bus to retrieve something. The intended target of the violence was the bus company and its employees, not its passengers. The armed men actually allowed Atty. Caorong to retrieve something from the bus. What angered them was his attempt to help the bus driver by pleading for his life. He was playing the role of a Good Samaritan.

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Certainly, this act cannot be considered an act of negligence, let alone recklessness (Fortune Express, Inc. vs. Court of Appeals, 305 SCRA 14). 239. P sued D for recovery of a sum of money and damages. In his answer, D interposed a counterclaim for damages because of what he claimed was the institution of a clearly unfounded suit against him. After trial on the merits, D was able to prove that the action against him was clearly unfounded. Thereupon, the trial court dismissed the complaint and ordered P to pay D moral damages for instituting a clearly unfounded suit. Can moral damages be recovered in a clearly unfounded suit? Although the institution of a clearly unfounded civil suit can at times be a legal justification for an award of attorneys fees, such filing, however, is not a ground for an award of moral damages. The rationale for the rule is that the law could not have meant to impose a penalty on the right to litigate. The anguish suffered by a person for having been made a defendant in a civil suit would be no different from the usual worry and anxiety suffered by anyone who is haled to court, a situation that cannot be by itself be a cogent reason for the award of moral damages. If the rule were otherwise, then moral damages must every time be awarded in favor of the prevailing defendant (Expertravel & Tours vs. Court of Appeals, 309 SCRA 141). 240. Can moral damages be awarded for negligence or quasi-delict that did not result to physical injury to the offended party? An award of moral damages requires certain conditions to be met; to wit: (a) first, there must be an injury, whether physical, mental, or psychological, clearly sustained by the claimant; (b) second, there must be a culpable act or omission factually established; (c) third, the wrongful act or omission of the defendant is the proximate cause of the injury sustained by the claimant; and (d) fourth, the award of damages is predicated on any of the cases stated in Article 2219 of the Civil Code. Under the provisions of Article 2219 of the Civil Code, in culpa contractual or breach of contract, moral damages may be recovered when the defendant acted in bad faith or was guilty of gross negligence (amounting to bad faith) or in wanton disregard of his contractual obligation and, exceptionally, when the act of breach of contract itself is constitutive of tort resulting in physical injuries. In culpa aquiliana or quasi-delict, (a) when an act or omission causes physical injuries, or (b) where the defendant is guilty of intentional tort, moral damages may also be recovered. In culpa criminal, moral damages could be lawfully due when the accused is found guilty of physical injuries, lascivious acts, adultery or concubinage, illegal or arbitrary detention, illegal arrest, illegal search or defamation. Malicious prosecution can also give rise to a claim for moral damages. The term analogous cases, referred to in Article 2219, following the ejusdem generis rule must be held similar to those expressly enumerated by the law. (Expertravel & Tours vs. Court of Appeals, 309 SCRA 141).

PRESCRIPTION OF ACTIONS 40 days Redhibitory action based on defects of animals (Art. 1577, NCC) 6 months Action for reduction of price or breach of sale of real estate (Arts. 1543/1539, NCC) Action for reduction of price against hidden defects of thing sold (Art. 1571, NCC) 1 year Action to impugn childs legitimacy if husband residing in the same place (Art. 170, par. 1, F.C.) Action for revocation of donation for acts of ingratitude (Art. 769, NCC) Action for forcible entry or unlawful detainer (Art. 1147, NCC) Action for defamation (Art. 1147, NCC) Action for rescission or for damages if immovable sold is encumbered with non-apparent burden (Art. 1560, NCC) Action for warranty of solvency in assignment of credits (Art. 1629, NCC) Action for loss or damage to goods under COGSA 2 years Action to impugn childs legitimacy if husband is in the Philippines but not residing in the same place (Art. 170, par. 2, F.C.) 3 years Action to impugn childs legitimacy if husband is abroad or outside the Philippines (Art. 170, par. 2, F.C.) 4 years Action for revocation or reduction of donation based on supervening birth or adoption (Art. 763, NCC) Action for revocation of donation based on non-fulfillment of condition (Art. 764, NCC) Action for recovery of movable (replevin) if possessor in good faith (Art. 1132, NCC) Action upon an injury to rights of plaintiff (Art. 1146, NCC) Action upon a quasi-delict (Art. 1146, NCC) Action for rescission of rescissible contracts (Art. 1389, NCC) Action to annul voidable contracts-vitiated consent (Art. 1391, NCC)

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Action for rescission of partition of decedents estate on account of lesion (Art. 1100, NCC) 5 years Action for legal separation (Art. 57, F.C.) Action for annulment of marriage except on the ground of insanity (Art. 47, F.C.) Action to claim legitimacy or illegitimacy if child dies during minority or in state of insanity (Art. 173, F.C.) Action to impugn legitimacy (Art. 182, F.C.) Action for declaration of incapacity of heir (Art. 1040, NCC) Action for warranty of solvency of debtor if credit is assigned to a co-heir during partition (Art. 1095, NCC) All other actions whose periods are not fixed by law (Art. 1149, NCC) 6 years Action upon an oral contract (Art. 1145, NCC) Action upon a quasi-contract (Art. 1146, NCC) 8 years Action for recovery of movable (replevin) if possessor is in bad faith Art. 1132, par. 2, and Art. 1140, NCC) 10 years Action for recovery of possession of immovables (accion publiciana) if real right is lost (Arts. 555 and 1134, NCC) Action for recovery of ownership of immovables (accion reivindicacatoria) if in good faith (Art. 1134, NCC) Action upon a mortgage contract (Art. 1142, NCC) Action upon a written contract (Art. 1144, NCC) Action upon an obligation created by law (Art. 1144, NCC) Action upon a judgment (Art. 1144, NCC) Action among co-heirs to enforce warranty against eviction in partition (Art. 1094, NCC) 30 years Action for recovery of ownership of immovables (accion reivindicatoria) if in bad faith (Art. 1141, NCC) Lifetime Action for annulment based on insanity (Art. 47, par. 2, F.C.) Action for declaration of nullity of marriage (Art. 39, F.C.) Action to claim legitimacy (lifetime of child) (Art. 173, F.C.)

Action to claim illegitimacy (lifetime of child. If by other means, only during lifetime of parents) (Arts. 175, par. 2, F.C.) Action for legal support Action for reduction of donation due to failure of donor to reserve property for his support and support of others (during lifetime of donor or relatives (Art. 750, NCC) No Prescription Action to declare a contract as inexistent or void Action to recover movable possessed thru a crime (no prescription in favor of offender) Action to demand right of way under Art. 649, NCC Action to demand partition in co-ownership or to enforce an express trust. Action to probate a will Action to enforce a moral right (PD 49) Action to recover possession of registered land under Land Registration Act by registered owner or hereditary successors