I.

Effect and Application of Laws (Civil Code)

Laws shall take effect after fifteen days following the completion of their
publication in the Official Gazette, unless it is otherwise provided.1 This Code shall take
effect one year after such publication.2

Ignorance of the law excuses no one from compliance therewith.3

Laws shall have no retroactive effect, unless the contrary is provided.4

Acts which are contrary to mandatory or prohibitory laws are void, except when
the law itself authorizes its validity.5

Rights may be waived, unless the waiver is contrary to law, public order, public
policy, morals, or good customs, or prejudicial to a third person with a right recognized by
law.6

Laws are repealed only by subsequent ones, either expressly or impliedly.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

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

1
This refers to the 15-day period and not to the requirement of publication. (Tanada vs. Tuvera,
G.R.No. L-63915, Dec. 29, 1986).
Administrative rules and regulations must also be published if their purpose is to enforce or
implement existing laws pursuant to a valid delegation. The publication must be in full or it is no
publication at all since its purpose is to inform the public of the contents of the law. (Phil. Intl Trading
Corp. vs .Angeles)
2
Art. 2
3
Art. 3
Considered a conclusive presumption and applies only to mandatory and prohibitory laws. (Consunji vs.
CA)
Philippine laws are covered. There is no conclusive presumption of knowledge of foreign laws. Even
our courts cannot take judicial notice of them. Ignorance of a foreign law will not be a mistake of law
but a mistake of fact.
Ignorance may either be of law or of fact. Ignorance of fact (ignorantia facti) may excuse a party from
the legal consequences of his conduct; but not ignorance of law, for ignorantia juris neminem excusat.
In specific instances provided by law, mistake as to difficult legal questions has been given the same
effect as a mistake of fact, e.g., Art. 526, par. 3 which provides: "Mistake upon a doubtful or difficult
question of law may be the basis of good faith."
4
Art. 4
5
Art. 5
6
Art. 6

1
 Administrative or executive acts, orders and regulations shall be valid only when
they are not contrary to the laws or the Constitution.7

Judicial decisions applying or interpreting the laws or the Constitution shall form a
part of the legal system of the Philippines.8

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

obscurity or insufficiency of laws.9

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

lawmaking body intended right and justice to prevail.10

Customs which are contrary to law, public order or public policy shall not be
countenanced.11

A custom must be proved as a fact, according to the rules of evidence.12

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

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

7
Art. 7
8
Art. 8
Only Supreme Court decisions establish jurisprudence; decisions of other judicial or quasi-judicial
bodies are merely persuasive.
This principle, however, does not mean blind adherence. The duty of the Court is to abandon any
doctrine found to be in violation of the law in force.
9
Art. 9
This article does not apply to criminal prosecutions, bec. when there is no law punishing an act, the
case must be dismissed, however, reprehensible the act may seem to the judge (Tolentino).
If the law is vague or obscure, the court should clarify it in the light of the rules of statutory
construction; it is silent or insufficient, the court should fill the deficiency by resorting to customs or
general principles of law.
10
Art. 10
11
Art. 11
12
Art. 12
Custom is defined as "a rule of conduct formed by repetition of acts, uniformly observed (practiced)
as a social rule, legally binding and obligatory." The law requires that "a custom must be proved as a
fact, according to the rules of evidence." On this score the Court had occasion to state that "a local
custom as a source of right cannot be considered by a court of justice unless such custom is properly
established by competent evidence like any other fact." The same evidence, if not one of a higher
degree, should be required of a foreign custom

2
 In computing a period, the first day shall be excluded, and the last day included13

Penal laws and those of public security and safety shall be obligatory upon all who
live or sojourn in Philippine territory, subject to the principles of public international law
and to treaty stipulations.14

Laws relating to family rights and duties, or to the status, condition and legal
capacity of persons are binding upon citizens of the Philippines, even though living
abroad.15

Real property as well as personal property is subject to the law of the country
where it is situated.16

However, intestate and testamentary successions, both with respect to the order of
succession and to the amount of successional rights and to the intrinsic validity of
testamentary provisions, shall be regulated by the national law of the person whose
succession is under consideration, whatever may be the nature of the property and
regardless of the country wherein said property may be found.17

13
Art. 13
Superseded by Sec. 31, Book I of EO 292 (Administrative Code of 1987) w/c provides that
Sec. 31. Legal Periods.-- "Year" shall be understood to be twelve (12) calendar months; "months" of
thirty (30) days, unless it refers to a specific calendar month in which case it shall be computed
according to the number of days the specific month contains; "day," to a day of twenty four (24) hours;
and "nights," from sunset to sunrise.
This article applies only to legal provisions and not to contracts, where the parties may stipulate on
the manner of computing years, months and days (Baviera).
14
Art. 14
15
Art. 15
Theories on Personal Law.--
Domiciliary theory, followed in the US, according to w/c the personal laws of a person are determined
by his domicile.
Nationality theory w/c makes nationality or citizenship as the basis for determining the personal laws
of an individual. (Tolentino)
The question of how a citizen may strip himself of the status as such citizen is governed by his
national law.
16 st
Art. 16, 1 par.
The lex situs or lex rei sitae governs real or personal property.
17 nd
id., 2 par.
Can be invoked only when the deceased was vested w/ a descendible interest in prop. w/in the
jurisdiction of the Phils.
The intrinsic validity of the provisions of the will of a foreigner who dies in the Phils. is to be
determined by the laws of his own state or country, and not by those of the Phils. Thus, a condition in a
will of a foreigner that his legatee respect his order that his prop. be distributed according to the laws of
the Phils. instead of the laws of his own country, was held illegal and considered as not written.
The law governing succession may be considered from the point of view of (a) the execution of wills,
and (b) the distribution of property. The formalities of execution of will are generally governed by the

3
 The forms and solemnities of contracts, wills, and other public instruments shall be
governed by the laws of the country in which they are executed.18

When the acts referred to are executed before the diplomatic or consular officials
of the Republic of the Philippines in a foreign country, the solemnities established by
Philippine laws shall be observed in their execution.19

Prohibitive laws concerning persons, their acts or property, and those which have
for their object public order, public policy and good customs shall not be rendered
ineffective by laws or judgments promulgated, or by determinations or conventions agreed
upon in a foreign country.20

In matters which are governed by the Code of Commerce and special laws, their
deficiency shall be supplied by the provisions of the Civil Code.21

II. Human Relations

Every person must, in the exercise of his rights and in the performance of his
duties, act with justice, give everyone his due, and observe honesty and good faith.22

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

another, shall indemnify the latter for the same.23

Any person who wilfully causes loss or injury to another in a manner that is
contrary to morals, good customs or public policy shall compensate the latter for the
damage.24

Every person who through an act of performance by another, or any other means,
acquires or comes into possession of something at the expense of the latter without just or
legal ground, shall return the same to him.25

law of the place of execution (Art. 17, par. 1.) But the distribution of the estate is governed by the law
of the nation of the deceased.
18 st
Art. 17, 1 par., known as the lex loci celebrationis
19 nd
id, 2 par.
20 rd
Id., 3 par.
21
Art. 18
22
Art. 19
Principle of abuse of rights
23
Art. 20
24
Art. 21
25
Art. 22

4
 PERSONS

I. Persons and Personality26

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

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

Minority, insanity or imbecility, the state of being a deaf-mute, prodigality and civil
interdiction are mere restrictions on capacity to act, and do not exempt the incapacitated
person from certain obligations, as when the latter arise from his acts or from property
relations, such as easements.28

The following circumstances, among others, modify or limit capacity to act: age,
insanity, imbecility, the state of being a deaf-mute, penalty, prodigality, family relations,
alienage, absence, insolvency and trusteeship. Capacity to act is not limited on account of
religious belief or political opinion.

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

Birth determines personality; but the conceived child shall be considered born for
all purposes that are favorable to it, provided it be born later with the conditions specified
in the following article.30

26
Civil Code
27
Art. 37
Capacity may be (1) juridical capacity, and (2) capacity to act. The union of these 2 forms the full civil
capacity. Juridical capacity is synonymous to legal capacity and to personality. They all refer to the
aptitude for the holding and enjoyment of rights. On the other hand, capacity to act refers to the
aptitude for the exercise of rights, and is often referred to merely as "capacity."
28
Art. 38
29
Art. 39
30
Art. 40
Personality from Birth - Birth means the removal of the foetus from the mother's womb.
Conceived Child - The personality of the conceived child has 2 characteristics: (1) it is essentially
limited, bec. it is only for purposes favorable to the child, and (2) it is provisional or conditional, bec. it
depends upon the child being born alive later, such that if it is not born alive, its personality disappears
as if it had never existed.
For civil personality to be acquired, one must be born - A foetus is born after it is completely
separated from the mother's womb w/c is produced by the cutting of the umbilical cord; after the
separation, the child now survives by itself.

5
 For civil purposes, the foetus is considered born if it is alive at the time it is
completely delivered from the mother's womb. However, if the foetus had an intrauterine
life of less than seven months, it is not deemed born if it dies within twenty-four hours
after its complete delivery from the maternal womb.31

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

II. Marriage33

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.34

No marriage shall be valid, unless these essential requisites are present:

(1) Legal capacity of the contracting parties who must be a male and a female; and

(2) Consent freely given35 in the presence of the solemnizing officer.36

The formal requisites of marriage are:

(1) Authority of the solemnizing officer;

(2) A valid marriage license;37

(3) A marriage ceremony which takes place with the appearance of the contracting
parties before the solemnizing officer and their personal declaration that they take each
other as husband and wife in the presence of not less than two witnesses of legal age.38

31
Art. 41
Once birth occurs, personality for favorable purposes retroacts from the moment of conception.--
The retroactivity rule is qualified-- only for purposes favorable to the child.
32
Art. 42
Physical death and legal death are the same. (Balane)
33
Family Code
34
Art. 1
35
The consent is real and not vitiated or rendered defective by any of the vices of consent. Hence, the
marriage may be annulled if the consent of either party was obtained by fraud, (Art. 45, par. 3), or if the
consent of either party was obtained by force, intimidation or undue influence (Art. 45, par. 4).
36
Art. 2
37
except Marriages Exempted from License Requirement, infra
38
Art. 3

6
 The absence of any of the essential or formal requisites shall render the marriage
void ab initio, except as stated in Article 35 (2).39

A defect in any of the essential requisites shall not affect the validity of the marriage
but the party or parties responsible for the irregularity shall be civilly, criminally and
administratively liable.40

Any male or female of the age of eighteen years or upwards not under any of the
impediments mentioned in Articles 37 and 38,41 may contract marriage.42

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

required. It shall be necessary, however, for the contracting parties to appear personally
before the solemnizing officer and declare in the presence of not less than two witnesses of
legal age that they take each other as husband and wife. This declaration shall be contained
in the marriage certificate which shall be signed by the contracting parties and their
witnesses and attested by the solemnizing officer.

In case of a marriage in articulo mortis, when the party at the point of death is unable
to sign the marriage certificate, it shall be sufficient for one of the witnesses to the marriage
to write the name of said party, which fact shall be attested by the solemnizing officer. 43

Marriage may be solemnized by:44

(1) Any incumbent member of the judiciary within the court's jurisdiction;

(2) Any priest, rabbi, imam, or minister of any church or religious sect duly
authorized by his church or religious sect and registered with the civil registrar general,
acting within the limits of the written authority granted by his church or religious sect and
provided that at least one of the contracting parties belongs to the solemnizing officer's
church or religious sect;

(3) Any ship captain or airplane chief only in the case mentioned in Article 31;45

(4) Any military commander of a unit to which a chaplain is assigned, in the

absence of the latter, during a military operation, likewise only in the cases mentioned in
Article 32;46

39
infra
40
Art. 4
41
infra
42
Art. 5
43
Art. 6
44
Art. 7
45
infra
46
Id.

7
 (5) Any consul-general, consul or vice-consul in the case provided in Article 10.47

The marriage shall be solemnized publicly in the chambers of the judge or in open
court, in the church, chapel or temple, or in the office the consul-general, consul or vice-
consul, and not elsewhere, except in cases of marriages contracted on the point of death or
in remote places in accordance with Article 2948 of this Code, or where both of the parties
request the solemnizing officer in writing in which case the marriage may be solemnized at
a house or place designated by them in a sworn statement to that effect.49

A marriage license shall be issued by the local civil registrar of the city or
municipality where either contracting party habitually resides, except in marriages where no
license is required.50

The license shall be valid in any part of the Philippines for a period of one hundred
twenty (120) days from the date of issue, and shall be deemed automatically cancelled at the
expiration of the said period if the contracting parties have not made use of it. The expiry
date shall be stamped in bold characters on the face of every license issued.51

Marriages between Filipino citizens abroad may be solemnized by a consul-general,

consul or vice-consul of the Republic of the Philippines. The issuance of the marriage
license and the duties of the local civil registrar and of the solemnizing officer with regard
to the celebration of marriage shall be performed by said consular official.52

47
Id.
48
See reference
49
Art. 8; for Art. 7, supra
50
Art. 9, id.
Where a marriage license is required, each of the contracting parties shall file separately a sworn
application for such license with the proper local civil registrar. which shall specify the following:
(1) Full name of the contracting party;
(2) Place of birth;
(3) Age and date of birth;
(4) Civil status;
(5) If previously married, how, when and where the previous marriage was dissolved or annulled;
(6) Present residence and citizenship;
(7) Degree of relationship of the contracting parties;
(8) Full name, residence and citizenship of the father;
(9) Full name, residence and citizenship of the mother; and
(10) Full name, residence and citizenship of the guardian or person having charge, in case the
contracting party has neither father nor mother and is under the age of twenty-one years.
The applicants, their parents or guardians shall not be required to exhibit their residence certificates
in any formality in connection with the securing of the marriage license (Art. 11)
51
Art. 20
52
Art. 10

8
 When either or both of the contracting parties are citizens of a foreign country, it
shall be necessary for them before a marriage license can be obtained, to submit a
certificate of legal capacity to contract marriage, issued by their respective diplomatic or
consular officials.

Stateless persons or refugees from other countries shall, in lieu of the certificate of
legal capacity herein required, submit an affidavit stating the circumstances showing such
capacity to contract marriage.53

In case either or both of the contracting parties are at the point of death, the
marriage may be solemnized without necessity of a marriage license and shall remain valid
even if the ailing party subsequently survives.54

A marriage in articulo mortis between passengers or crew members may also be

solemnized by a ship captain or by an airplane pilot not only while the ship is at sea or the
plane is in flight, but also during stopovers at ports of call.55

A military commander of a unit, who is a commissioned officer, shall likewise have

authority to solemnize marriages in articulo mortis between persons within the zone of
military operation, whether members of the armed forces or civilians.56

No license shall be necessary for the marriage of a man and a woman who have
lived together as husband and wife for at least five years and without any legal impediment
to marry each other. The contracting parties shall state the foregoing facts in an affidavit
before any person authorized by law to administer oaths. The solemnizing officer shall also
state under oath that he ascertained the qualifications of the contracting parties are found
no legal impediment to the marriage57

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

(1) The full name, sex and age of each contracting party;

(2) Their citizenship, religion and habitual residence;

(3) The date and precise time of the celebration of the marriage;

(4) That the proper marriage license has been issued according to law;58

53
Art. 21
54
Art. 27
55
Art. 31
56
Art. 32
57
Art. 34
58
except Marriages Exempted from License Requirement, supra

9
 (5) That either or both of the contracting parties have secured the parental consent
in appropriate cases;

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

(7) That the parties have entered into marriage settlement, if any, attaching a copy
thereof.59

All marriages solemnized outside the Philippines, in accordance with the laws in
force in the country where they were solemnized, and valid there as such, shall also be valid
in this country, except those prohibited under Articles 35 (1), (4), (5) and (6), 36, 37 and
38.60

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

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

The judgment of annulment or of absolute nullity of the marriage, the partition and
distribution of the properties of the spouses and the delivery of the children's presumptive
legitimes shall be recorded in the appropriate civil registry and registries of property;
otherwise, the same shall not affect third persons.61

Either of the former spouses may marry again after compliance with the foregoing
requirements; otherwise, the subsequent marriage shall be null and void.62

The following marriages shall be void from the beginning:

(1) Contracted by any party below eighteen (18) years of age even with the consent
of parents or guardians;

(2) Solemnized by any person not legally authorized to perform marriages unless
such marriages were contracted with either or both parties believing in good faith that the
solemnizing officer had the legal authority to do so;

(3) Solemnized without license;63

(4) Bigamous or polygamous marriages not failing under Article 41;64

59
Art. 22
60
Art. 26
61
Art. 52
62
Art. 53
63
except Marriages Exempted from License Requirement, supra
64
infra

10
 (5) Contracted through mistake of one contracting party as to the identity of the
other; and

(6) Subsequent marriages that are void under Article 53.65

A marriage contracted by any party who, at the time of the celebration, was
psychologically incapacitated to comply with the essential marital obligations of marriage,
even if such incapacity becomes manifest only after its solemnization.66

Whether the relationship between the parties be legitimate or illegitimate:

(1) Between ascendants and descendants of any degree; and

(2) Between brothers and sisters, whether of the full or half blood.67

For reasons of public policy:

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

fourth civil degree;

(2) Between step-parents and step-children;

(3) Between parents-in-law and children-in-law;

(4) Between the adopting parent and the adopted child;

(5) Between the surviving spouse of the adopting parent and the adopted child;

(6) Between the surviving spouse of the adopted child and the adopter;

(7) Between an adopted child and a legitimate child of the adopter;

(8) Between adopted children of the same adopter; and

(9) Between parties where one, with the intention to marry the other, killed that
other person's spouse, or his or her own spouse.

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

65
Art. 35; Art. 53, infra
66
Art. 36
67
Art. 37

11
 In case of marriage celebrated before the effectivity of this Code and falling under
Article 36,68 such action or defense shall prescribe in ten (10) years after this Code shall
take effect.69

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.70

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

shall be null and void, unless before the celebration of the subsequent marriage, the prior
spouse had been absent for four consecutive years and the spouse present has a well-
founded belief that the absent spouse was already dead. In case of disappearance where
there is danger of death under the circumstances set forth in the provisions of Article 391 71
of the Civil Code, an absence of only two (2) years shall be sufficient.72

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

The subsequent marriage referred to shall be automatically terminated by the

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

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

in the civil registry of the residence of the parties to the subsequent marriage at the instance
of any interested person, with due notice to the spouses of the subsequent marriage and
without prejudice to the fact of reappearance being judicially determined in case such fact
is disputed.73

68
supra
69
Art. 39
70
Art. 40
71
The following shall be presumed dead for all purposes, including the division of the estate among the
heirs:
(1) A person on board a vessel lost during a sea voyage, or an aeroplane which is missing, who has not
been heard of for four years since the loss of the vessel or aeroplane;
(2) A person in the armed forces who has taken part in war, and has been missing for four years;
(3) A person who has been in danger of death under other circumstances and his existence has not
been known for four years.
72
Art. 41
73
Art. 42

12
 Effects of termination of the subsequent marriage:

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

(2) The absolute community of property or the conjugal partnership, as the case
may be, shall be dissolved and liquidated, but if either spouse contracted said marriage in
bad faith, his or her share of the net profits of the community property or conjugal
partnership property shall be forfeited in favor of the common children or, if there are
none, the children of the guilty spouse by a previous marriage or in default of children, the
innocent spouse;

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

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

(5) The spouse who contracted the subsequent marriage in bad faith shall be
disqualified to inherit from the innocent spouse by testate and intestate succession74

If both spouses of the subsequent marriage acted in bad faith, said marriage shall
be void ab initio and all donations by reason of marriage and testamentary dispositions made
by one in favor of the other are revoked by operation of law.75

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

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

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

74
Art. 43
75
Art. 44

13
 (3) The consent of either party was obtained by fraud, unless such party afterwards,
with full knowledge of the facts constituting the fraud, freely cohabited with the other as
husband and wife;

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

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

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

serious and appears to be incurable.76

Any of the following circumstances shall constitute fraud referred to in Number 3:

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

a crime involving moral turpitude;

(2) Concealment by the wife of the fact that at the time of the marriage, she was
pregnant by a man other than her husband;

(3) Concealment of sexually transmissible disease, regardless of its nature, existing

at the time of the marriage; or

(4) Concealment of drug addiction, habitual alcoholism or homosexuality or

lesbianism existing at the time of the marriage.

No other misrepresentation or deceit as to character, health, rank, fortune or

chastity shall constitute such fraud as will give grounds for action for the annulment of
marriage77

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

(1) By the party whose parent or guardian did not give his or her consent, within
five (5) years after attaining the age of twenty-one, or by the parent or guardian or person
having legal charge of the minor, at any time before such party has reached the age of
twenty-one;78

76
Art. 45
77
Art. 46
78
No. 1 of Art. 45, supra

14
 (2) By the sane spouse, who had no knowledge of the other's insanity; or by any
relative or guardian or person having legal charge of the insane, at any time before the
death of either party, or by the insane spouse during a lucid interval or after regaining
sanity;79

(3) By the injured party, within five (5) years after the discovery of the fraud;80

(4) By the injured party, within five (5) years from the time the force, intimidation
or undue influence disappeared or ceased;81

(5) By the injured party, within five (5) years after the marriage.82

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

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

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

judgment.83

During the pendency of the action and in the absence of adequate provisions in a
written agreement between the spouses, the Court shall provide for the support of the
spouses and the custody and support of their common children. The Court shall give
paramount consideration to the moral and material welfare of said children and their
choice of the parent with whom they wish to remain. It shall also provide for appropriate
visitation rights of the other parent.84

The effects provided for by paragraphs (2), (3), (4) and (5) of Article 43 and by
Article 4485 shall also apply in the proper cases to marriages which are declared ab initio or
annulled by final judgment under Articles 40 and 45.86

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

79
No. 2, id.
80
No. 3, id.
81
No. 4, id.
82
Nos. 5 & 6, id. (Art. 47)
83
Art. 48
84
Art. 49
85
supra
86
Ibid.

15
 All creditors of the spouses as well as of the absolute community or the conjugal
partnership shall be notified of the proceedings for liquidation.

In the partition, the conjugal dwelling and the lot on which it is situated, shall be
adjudicated in accordance with the provisions of Articles 102 and 129.87

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

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

The delivery of the presumptive legitimes shall in no way prejudice the ultimate
successional rights of the children accruing upon the death of either of both of the parents;
but the value of the properties already received under the decree of annulment or absolute
nullity shall be considered as advances on their legitime88

The judgment of annulment or of absolute nullity of the marriage, the partition and
distribution of the properties of the spouses and the delivery of the children's presumptive
legitimes shall be recorded in the appropriate civil registry and registries of property;
otherwise, the same shall not affect third persons.89

Either of the former spouses may marry again after compliance with the
requirements of the immediately preceding Article; otherwise, the subsequent marriage
shall be null and void.90

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

of the marriage under Article 3691 has become final and executory shall be considered
legitimate.

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

likewise be legitimate.92

87
Art. 50; for Arts. 102 & 109, see Reference
88
Art. 51
89
Art. 52
90
Art. 53
91
supra
92
Art. 54

16
III. Legal Separation

A petition for legal separation may be filed on any of the following grounds:

(1) Repeated physical violence or grossly abusive conduct directed against the
petitioner, a common child, or a child of the petitioner;

(2) Physical violence or moral pressure to compel the petitioner to change religious
or political affiliation;

(3) Attempt of respondent to corrupt or induce the petitioner, a common child, or

a child of the petitioner, to engage in prostitution, or connivance in such corruption or
inducement;

(4) Final judgment sentencing the respondent to imprisonment of more than six
years, even if pardoned;

(5) Drug addiction or habitual alcoholism of the respondent;

(6) Lesbianism or homosexuality of the respondent;

(7) Contracting by the respondent of a subsequent bigamous marriage, whether in

the Philippines or abroad;

(8) Sexual infidelity or perversion;

(9) Attempt by the respondent against the life of the petitioner; or

(10) Abandonment of petitioner by respondent without justifiable cause for more than one
year.

The term "child" shall include a child by nature or by adoption.93

The petition for legal separation shall be denied on any of the following grounds:

(1) The aggrieved party has condoned the offense or act complained of;

(2) The aggrieved party has consented to the commission of the offense or act
complained of;

(3) There is connivance between the parties in the commission of the offense or act
constituting the ground for legal separation;

93
Art. 55; see also R. A. 9262, Anti-Violence Against Women and Children

17
 (4) Both parties have given ground for legal separation;

(5) There is collusion between the parties to obtain decree of legal separation; or

(6) The action is barred by prescription94

An action for legal separation shall be filed within five (5) years from the time of
the occurrence of the cause.95

An action for legal separation shall in no case be tried before six (6) months shall
have elapsed since the filing of the petition.96

No legal separation may be decreed unless the Court has taken steps toward the
reconciliation of the spouses and is fully satisfied, despite such efforts, that reconciliation is
highly improbable.97

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

confession of judgment.

In any case, the Court shall order the prosecuting attorney or fiscal assigned to it to
take steps to prevent collusion between the parties and to take care that the evidence is not
fabricated or suppressed.98

After the filing of the petition for legal separation, the spouses shall be entitled to
live separately from each other.

The court, in the absence of a written agreement between the spouses, shall
designate either of them or a third person to administer the absolute community or
conjugal partnership property. The administrator appointed by the court shall have the
same powers and duties as those of a guardian under the Rules of Court.99

During the pendency of the action for legal separation, the provisions of Article
49100 shall apply to the support of the spouses and the custody and support of the common
children.101

94
Art. 56
95
Art. 57
96
Art. 58
97
Art. 59
98
Art. 60
99
Art. 61
100
supra
101
Art. 62

18
 The decree of legal separation shall have the following effects:

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

(2) The absolute community or the conjugal partnership shall be dissolved and
liquidated but the offending spouse shall have no right to any share of the net profits
earned by the absolute community or the conjugal partnership, which shall be forfeited in
accordance with the provisions of Article 43(2);102

(3) The custody of the minor children shall be awarded to the innocent spouse,
subject to the provisions of Article 213103 of this Code; and

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

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

The action to revoke the donation must be brought within five (5) years from the
time the decree of legal separation become final.104
If the spouses should reconcile, a corresponding joint manifestation under oath duly signed
by them shall be filed with the court in the same proceeding for legal separation.105

The reconciliation referred to in the preceding Articles shall have the following
consequences:

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

102
supra
103
See Reference
104
Art. 64
105
Art. 65

19
 (2) The final decree of legal separation shall be set aside, but the separation of
property and any forfeiture of the share of the guilty spouse already effected shall subsist,
unless the spouses agree to revive their former property regime.

The court's order containing the foregoing shall be recorded in the proper civil
registries.106

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

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

(2) Those to be retained as separated properties of each spouse; and

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

The recording of the ordering in the registries of property shall not prejudice any
creditor not listed or not notified, unless the debtor-spouse has sufficient separate
properties to satisfy the creditor's claim.107

106
Art. 66
107
Art. 67

20
IV. Rights and Obligations Between Husband and Wife

The husband and wife are obliged to live together, observe mutual love, respect
and fidelity, and render mutual help and support.108

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

The court may exempt one spouse from living with the other if the latter should
live abroad or there are other valid and compelling reasons for the exemption. However,
such exemption shall not apply if the same is not compatible with the solidarity of the
family.109

The spouses are jointly responsible for the support of the family. The expenses for
such support and other conjugal obligations shall be paid from the community property
and, in the absence thereof, from the income or fruits of their separate properties. In case
of insufficiency or absence of said income or fruits, such obligations shall be satisfied from
the separate properties.110

The management of the household shall be the right and the duty of both spouses.
The expenses for such management shall be paid in accordance with the provisions of
Article 70.111

When one of the spouses neglects his or her duties to the conjugal union or
commits acts which tend to bring danger, dishonor or injury to the other or to the family,
the aggrieved party may apply to the court for relief.112

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

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

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

(1) The objection is proper, and

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

108
Art. 68
109
Art. 69
110
Art. 70
111
Art. 71
112
Art. 72

21
V. Property Relations of the Spouses

The property relationship between husband and wife shall be governed in the
following order:

(1) By marriage settlements executed before the marriage;

(2) By the provisions of this Code; and

(3) By the local custom.113

The future spouses may, in the marriage settlements, agree upon the regime of
absolute community, conjugal partnership of gains, complete separation of property, or any
other regime. In the absence of a marriage settlement, or when the regime agreed upon is
void, the system of absolute community of property as established in this Code shall
govern.114

In order that any modification in the marriage settlements may be valid, it must be
made before the celebration of the marriage, subject to the provisions of Articles 66, 67,115
128, 135 and 136.116

The marriage settlements and any modification thereof shall be in writing, signed
by the parties and executed before the celebration of the marriage. They shall not prejudice
third persons unless they are registered in the local civil registry where the marriage
contract is recorded as well as in the proper registries of properties.117

A minor who according to law may contract marriage may also execute his or her
marriage settlements, but they shall be valid only if the persons designated in Article 14118
to give consent to the marriage are made parties to the agreement.119

For the validity of any marriage settlement executed by a person upon whom a
sentence of civil interdiction has been pronounced or who is subject to any other disability,
it shall be indispensable for the guardian appointed by a competent court to be made a
party thereto120

113
Art. 74
114
Art. 75
115
supra
116
Art. 76; see Reference for Arts. 128, 135-6
117
Art. 77
118
The father, mother, surviving parent or guardian, or persons having legal charge of them, in the order
mentioned.
119
Art. 78
120
Art. 79

22
 In the absence of a contrary stipulation in a marriage settlement, the property
relations of the spouses shall be governed by Philippine laws, regardless of the place of the
celebration of the marriage and their residence.121

This rule shall not apply:

(1) Where both spouses are aliens;

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

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

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

articles in consideration of a future marriage, including donations between the prospective
spouses made therein, shall be rendered void if the marriage does not take place. However,
stipulations that do not depend upon the celebration of the marriages shall be valid.122

Donations by reason of marriage are those which are made before its celebration,
in consideration of the same, and in favor of one or both of the future spouses.123

May be revoked by the donor in the following cases:

(1) If the marriage is not celebrated or judicially declared void ab initio except
donations made in the marriage settlements, which shall be governed by Article 81;124

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

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

(4) Upon legal separation, the donee being the guilty spouse;

(5) If it is with a resolutory condition and the condition is complied with;

(6) When the donee has committed an act of ingratitude as specified by the
provisions of the Civil Code on donations in general125

121
Art. 80
122
Art. 81
123
Art. 82
124
supra
125
Art. 86

23
 Donations by reason of marriage shall remain valid, except that if the donee
contracted the marriage in bad faith, such donations made to said donee are revoked by
operation of law;126

The effects provided for by paragraphs (2), (3), (4) and (5) of Article 43 and by
Article 44127 shall also apply in the proper cases to marriages which are declared ab initio or
annulled by final judgment under Articles 40 and 45.

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

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

In the partition, the conjugal dwelling and the lot on which it is situated, shall be
adjudicated in accordance with the provisions of Articles 102 and 129.128

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

spouses during the marriage shall be void, except moderate gifts which the spouses may
give each other on the occasion of any family rejoicing. The prohibition shall also apply to
persons living together as husband and wife without a valid marriage.129

The future spouses may, in the marriage settlements, agree upon the regime of
absolute community, conjugal partnership of gains, complete separation of property, or any
other regime. In the absence of a marriage settlement, or when the regime agreed upon is
void, the system of absolute community of property as established in this Code shall
govern130

If the future spouses agree upon a regime other than the absolute community of
property, they cannot donate to each other in their marriage settlements more than one-
fifth of their present property. Any excess shall be considered void.131

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

succession and the formalities of wills.

126
Art. 43 (3)
127
supra
128
Art. 50; see Reference for Arts. 102 & 129
129
Art. 87
130
Art. 75
131
Art. 84

24
 Donations by reason of marriage of property subject to encumbrances shall be
valid. In case of foreclosure of the encumbrance and the property is sold for less than the
total amount of the obligation secured, the donee shall not be liable for the deficiency. If
the property is sold for more than the total amount of said obligation, the donee shall be
entitled to the excess.132

The absolute community of property between spouses shall commence at the

precise moment that the marriage is celebrated. Any stipulation, express or implied, for the
commencement of the community regime at any other time shall be void.133

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

during the marriage can be made except in case of judicial separation of property.134

When the waiver takes place upon a judicial separation of property, or after the
marriage has been dissolved or annulled, the same shall appear in a public instrument and
shall be recorded as provided in Article 77.135 The creditors of the spouse who made such
waiver may petition the court to rescind the waiver to the extent of the amount sufficient
to cover the amount of their credits.

The provisions on co-ownership shall apply to the absolute community of property

between the spouses in all matters not provided for.136

Community Property consists of all the property owned by the spouses at the time
of the celebration of the marriage or acquired thereafter.137

Excluded are the following:

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

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

(3) Property acquired before the marriage by either spouse who has legitimate
descendants by a former marriage, and the fruits as well as the income, if any, of such
property.138

132
Art. 85
133
Art. 88
134
Art. 89
135
See Reference
136
Art. 90
137
Art. 91
138
Art. 92

25
 Property acquired during the marriage is presumed to belong to the community,
unless it is proved that it is one of those excluded therefrom.139

Charges Upon and Obligations of the Community Property:

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

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

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

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

(5) All taxes and expenses for mere preservation made during marriage upon the
separate property of either spouse used by the family;
(6) Expenses to enable either spouse to commence or complete a professional or
vocational course, or other activity for self-improvement;

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

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

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

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

139
Art. 93

26
 If the community property is insufficient to cover the foregoing liabilities, except
those falling under paragraph (9), the spouses shall be solidarily liable for the unpaid
balance with their separate properties.140

Whatever may be lost during the marriage in any game of chance, betting,
sweepstakes, or any other kind of gambling, whether permitted or prohibited by law, shall
be borne by the loser and shall not be charged to the community but any winnings
therefrom shall form part of the community property.141

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

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

the administration of the common properties, the other spouse may assume sole powers of
administration. These powers do not include disposition or encumbrance without authority
of the court or the written consent of the other spouse. In the absence of such authority or
consent, the disposition or encumbrance shall be void. However, the transaction shall be
construed as a continuing offer on the part of the consenting spouse and the third person,
and may be perfected as a binding contract upon the acceptance by the other spouse or
authorization by the court before the offer is withdrawn by either or both offerors.142

Either spouse may dispose by will of his or her interest in the community
property.143

Neither spouse may donate any community property without the consent of the
other. However, either spouse may, without the consent of the other, make moderate
donations from the community property for charity or on occasions of family rejoicing or
family distress.144

Dissolution of Community Regime:

(1) Upon the death of either spouse;

(2) There is a decree of legal separation;
(3) The marriage is annulled or declared void; or
(4) Judicial separation of property during the marriage under Article 134 to 138.145

140
Art. 94
141
Art. 95
142
Art. 96
143
Art. 97
144
Art. 98
145
Art. 99; see Reference for Arts. 134-138

27
 The separation in fact between husband and wife shall not affect the regime of
absolute community except that:

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

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

(3) In the absence of sufficient community property, the separate property of both
spouses shall be solidarily liable for the support of the family. The spouse present shall,
upon proper petition in a summary proceeding, be given judicial authority to administer or
encumber any specific separate property of the other spouse and use the fruits or proceeds
thereof to satisfy the latter's share.146

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

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

marital, parental or property relations.

A spouse is deemed to have abandoned the other when her or she has left the
conjugal dwelling without intention of returning. The spouse who has left the conjugal
dwelling for a period of three months or has failed within the same period to give any
information as to his or her whereabouts shall be prima facie presumed to have no
intention of returning to the conjugal dwelling. 147

Procedure in the liquidation of the Absolute Community Assets and Liabilities:

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

(2) The debts and obligations of the absolute community shall be paid out of its
assets. In case of insufficiency of said assets, the spouses shall be solidarily liable for the
unpaid balance with their separate properties in accordance with the provisions of the
second paragraph of Article 94.148

(3) Whatever remains of the exclusive properties of the spouses shall thereafter be
delivered to each of them.
146
Art. 100
147
Art. 101
148
supra

28
 (4) The net remainder of the properties of the absolute community shall constitute
its net assets, which shall be divided equally between husband and wife, unless a different
proportion or division was agreed upon in the marriage settlements, or unless there has
been a voluntary waiver of such share provided in this Code. For purpose of computing
the net profits subject to forfeiture in accordance with Articles 43, No. (2) and 63, No.
(2),149 the said profits shall be the increase in value between the market value of the
community property at the time of the celebration of the marriage and the market value at
the time of its dissolution.

(5) The presumptive legitimes of the common children shall be delivered upon
partition, in accordance with Article 51.150

(6) Unless otherwise agreed upon by the parties, in the partition of the properties,
the conjugal dwelling and the lot on which it is situated shall be adjudicated to the spouse
with whom the majority of the common children choose to remain. Children below the age
of seven years are deemed to have chosen the mother, unless the court has decided
otherwise. In case there in no such majority, the court shall decide, taking into
consideration the best interests of said children.151

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

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

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

Should the surviving spouse contract a subsequent marriage without compliance

with the foregoing requirements, a mandatory regime of complete separation of property
shall govern the property relations of the subsequent marriage.152

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

contracted by the same person is carried out simultaneously, the respective capital, fruits
and income of each community shall be determined upon such proof as may be considered
according to the rules of evidence. In case of doubt as to which community the existing
properties belong, the same shall be divided between the different communities in
proportion to the capital and duration of each.153

149
ibid
150
ibid
151
Art. 102
152
Art. 103
153
Art. 104

29
 Conjugal partnership of gains:

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

The provisions shall also apply to conjugal partnerships of gains already established
between spouses before the effectivity of this Code, without prejudice to vested rights
already acquired in accordance with the Civil Code or other laws, as provided in Article
256.154

Under the regime of conjugal partnership of gains, the husband and wife place in a
common fund the proceeds, products, fruits and income from their separate properties and
those acquired by either or both spouses through their efforts or by chance, and, upon
dissolution of the marriage or of the partnership, the net gains or benefits obtained by
either or both spouses shall be divided equally between them, unless otherwise agreed in
the marriage settlements.155

The rules provided in Articles 88 and 89156 shall also apply to conjugal partnership
of gains.157

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

partnership in all that is not in conflict with what is expressly determined in this Chapter or
by the spouses in their marriage settlements.158

Exclusive Property of Each Spouse:

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

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

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

belonging to only one of the spouses; and

(4) Purchased with exclusive money of the wife or of the husband159

The spouses retain the ownership, possession, administration and enjoyment of

their exclusive properties.

154
Art. 105; see Reference for Art. 256
155
Art. 106
156
supra
157
Art. 107
158
Art. 108
159
Art. 109

30
 Either spouse may, during the marriage, transfer the administration of his or her
exclusive property to the other by means of a public instrument, which shall be recorded in
the registry of property of the place the property is located.160

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

her exclusive property, without the consent of the other spouse, and appear alone in court
to litigate with regard to the same.161

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

automatically terminates the administration over such property and the proceeds of the
alienation shall be turned over to the owner-spouse.162

Property donated or left by will to the spouses, jointly and with designation of
determinate shares, shall pertain to the donee-spouses as his or her own exclusive property,
and in the absence of designation, share and share alike, without prejudice to the right of
accretion when proper.163

If the donations are onerous, the amount of the charges shall be borne by the
exclusive property of the donee spouse, whenever they have been advanced by the conjugal
partnership of gains.164

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

shall be governed by the rules on gratuitous or onerous acquisitions as may be proper in
each case.165

Conjugal Partnership Property:

All property acquired during the marriage, whether the acquisition appears to have
been made, contracted or registered in the name of one or both spouses, is presumed to be
conjugal unless the contrary is proved.166

The following are conjugal partnership properties:

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

160
Art. 110
161
Art. 111
162
Art. 112
163
Art. 113
164
Art. 114
165
Art. 115
166
Art. 116

31
 (2) Those obtained from the labor, industry, work or profession of either or both
of the spouses;

(3) The fruits, natural, industrial, or civil, due or received during the marriage from
the common property, as well as the net fruits from the exclusive property of each spouse;

(4) The share of either spouse in the hidden treasure which the law awards to the
finder or owner of the property where the treasure is found;

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

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

(7) Those which are acquired by chance, such as winnings from gambling or
betting. However, losses therefrom shall be borne exclusively by the loser-spouse.167

Property bought on installments paid partly from exclusive funds of either or both
spouses and partly from conjugal funds belongs to the buyer or buyers if full ownership
was vested before the marriage and to the conjugal partnership if such ownership was
vested during the marriage. In either case, any amount advanced by the partnership or by
either or both spouses shall be reimbursed by the owner or owners upon liquidation of the
partnership.168

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

the spouses, the sums which may be collected during the marriage in partial payments or by
installments on the principal shall be the exclusive property of the spouse. However,
interests falling due during the marriage on the principal shall belong to the conjugal
partnership.169

The ownership of improvements, whether for utility or adornment, made on the

separate property of the spouses at the expense of the partnership or through the acts or
efforts of either or both spouses shall pertain to the conjugal partnership, or to the original
owner-spouse, subject to the following rules:

When the cost of the improvement made by the conjugal partnership and any
resulting increase in value are more than the value of the property at the time of the
improvement, the entire property of one of the spouses shall belong to the conjugal
partnership, subject to reimbursement of the value of the property of the owner-spouse at
the time of the improvement; otherwise, said property shall be retained in ownership by
the owner-spouse, likewise subject to reimbursement of the cost of the improvement.
167
Art. 117
168
Art. 118
169
Art. 119

32
 In either case, the ownership of the entire property shall be vested upon the
reimbursement, which shall be made at the time of the liquidation of the conjugal
partnership.

Charges upon and obligations of the Conjugal Partnership of Gains:

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

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

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

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

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

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

vocational, or other activity for self-improvement;

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

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

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

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

spouses shall be solidarily liable for the unpaid balance with their separate properties.170

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

170
Art. 121

33
 Neither shall the fines and pecuniary indemnities imposed upon them be charged
to the partnership.

However, the payment of personal debts contracted by either spouse before the
marriage, that of fines and indemnities imposed upon them, as well as the support of
illegitimate children of either spouse, may be enforced against the partnership assets after
the responsibilities enumerated in the preceding Article have been covered, if the spouse
who is bound should have no exclusive property or if it should be insufficient; but at the
time of the liquidation of the partnership, such spouse shall be charged for what has been
paid for the purpose above-mentioned.171

Whatever may be lost during the marriage in any game of chance or in betting,
sweepstakes, or any other kind of gambling whether permitted or prohibited by law, shall
be borne by the loser and shall not be charged to the conjugal partnership but any winnings
therefrom shall form part of the conjugal partnership property.172

Administration of the of the Conjugal Partnership of Gains:

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

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

the administration of the conjugal properties, the other spouse may assume sole powers of
administration. These powers do not include disposition or encumbrance without authority
of the court or the written consent of the other spouse. In the absence of such authority or
consent, the disposition or encumbrance shall be void. However, the transaction shall be
construed as a continuing offer on the part of the consenting spouse and the third person,
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.173

Neither spouse may donate any conjugal partnership property without the consent
of the other. However, either spouse may, without the consent of the other, make
moderate donations from the conjugal partnership property for charity or on occasions of
family rejoicing or family distress.174

171
Art. 122
172
Art. 123
173
Art. 124
174
Art. 125

34
 Dissolution of the regime of Conjugal Partnership of Gains:

(1) Upon the death of either spouse;

(2) There is a decree of legal separation;

(3) The marriage is annulled or declared void; or

(4) In case of judicial separation of property during the marriage under Articles 134
175
to 138.

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

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

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

(3) In the absence of sufficient conjugal partnership property, the separate property
of both spouses shall be solidarily liable for the support of the family. The spouse present
shall, upon petition in a summary proceeding, be given judicial authority to administer or
encumber any specific separate property of the other spouse and use the fruits or proceeds
thereof to satisfy the latter's share.176

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

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

marital, parental or property relations.

A spouse is deemed to have abandoned the other when he or she has left the
conjugal dwelling without intention of returning. The spouse who has left the conjugal
dwelling for a period of three months or has failed within the same period to give any
information as to his or her whereabouts shall be prima facie presumed to have no
intention of returning to the conjugal dwelling.177

175
Art. 126
176
Art. 127
177
Art. 128

35
 Procedure in the Liquidation of the Conjugal Partnership Assets and Liabilities:

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

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

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

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

(4) The debts and obligations of the conjugal partnership shall be paid out of the
conjugal assets. In case of insufficiency of said assets, the spouses shall be solidarily liable
for the unpaid balance with their separate properties, in accordance with the provisions of
paragraph (2) of Article 121.178

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

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

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

(8) The presumptive legitimes of the common children shall be delivered upon the
partition in accordance with Article 51.179

(9) In the partition of the properties, the conjugal dwelling and the lot on which it
is situated shall, unless otherwise agreed upon by the parties, be adjudicated to the spouse
with whom the majority of the common children choose to remain. Children below the age
of seven years are deemed to have chosen the mother, unless the court has decided
otherwise. In case there is no such majority, the court shall decide, taking into
consideration the best interests of said children.180

178
supra
179
ibid
180
Art. 129

36
 Upon the termination of the marriage by death, the conjugal partnership property
shall be liquidated in the same proceeding for the settlement of the estate of the deceased.

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

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

Should the surviving spouse contract a subsequent marriage without compliance

with the foregoing requirements, a mandatory regime of complete separation of property
shall govern the property relations of the subsequent marriage.181

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

marriages contracted by the same person is carried out simultaneously, the respective
capital, fruits and income of each partnership shall be determined upon such proof as may
be considered according to the rules of evidence. In case of doubt as to which partnership
the existing properties belong, the same shall be divided between the different partnerships
in proportion to the capital and duration of each.182

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

observed in the appraisal and sale of property of the conjugal partnership, and other
matters which are not expressly determined in this Chapter.183

From the common mass of property support shall be given to the surviving spouse
and to the children during the liquidation of the inventoried property and until what
belongs to them is delivered; but from this shall be deducted that amount received for
support which exceeds the fruits or rents pertaining to them.184

Separation of Property of the Spouses and Administration of Common Property by

One Spouse During the Marriage:

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

of property between spouses during the marriage shall not take place except by judicial
order. Such judicial separation of property may either be voluntary or for sufficient
cause.185

181
Art. 130.
182
Art. 131
183
Art. 132
184
Art. 133
185
Art. 134

37
 Any of the following shall be considered sufficient cause for judicial separation of
property:

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

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

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

(4) That the spouse of the petitioner has abandoned the latter or failed to comply
with his or her obligations to the family as provided for in Article 101;186

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

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

In the cases provided for in Numbers (1), (2) and (3), the presentation of the final
judgment against the guilty or absent spouse shall be enough basis for the grant of the
decree of judicial separation of property.187

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

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

well as the personal creditors of the spouse, shall be listed in the petition and notified of
the filing thereof. The court shall take measures to protect the creditors and other persons
with pecuniary interest.188

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

During the pendency of the proceedings for separation of property, the absolute
community or the conjugal partnership shall pay for the support of the spouses and their
children.189

186
supra
187
Art. 135
188
Art. 136
189
Art. 137

38
 After dissolution of the absolute community or of the conjugal partnership, the
provisions on complete separation of property shall apply.190

The petition for separation of property and the final judgment granting the same
shall be recorded in the proper local civil registries and registries of property.191

The separation of property shall not prejudice the rights previously acquired by
creditors.192

The spouses may, in the same proceedings where separation of property was
decreed, file a motion in court for a decree reviving the property regime that existed
between them before the separation of property in any of the following instances:

(1) When the civil interdiction terminates;

(2) When the absentee spouse reappears;

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

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

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

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

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

conjugal partnership has been judicially decreed upon the joint petition of the spouses, they
agree to the revival of the former property regime. No voluntary separation of property
may thereafter be granted.

The revival of the former property regime shall be governed by Article 67.193

190
Art. 138
191
Art. 139
192
Art. 140
193
Art. 141

39
 The administration of all classes of exclusive property of either spouse may be
transferred by the court to the other spouse:

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

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

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

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

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

or any other just cause, the court shall appoint a suitable person to be the administrator.194

Regime of Separation of Property:

Should the future spouses agree in the marriage settlements that their property
relations during marriage shall be governed by the regime of separation of property, the
provisions of this Chapter shall be suppletory.195

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

total or partial. In the latter case, the property not agreed upon as separate shall pertain to
the absolute community.196

Each spouse shall own, dispose of, possess, administer and enjoy his or her own
separate estate, without need of the consent of the other. To each spouse shall belong all
earnings from his or her profession, business or industry and all fruits, natural, industrial or
civil, due or received during the marriage from his or her separate property.197

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

The liabilities of the spouses to creditors for family expenses shall, however, be
solidary.198

194
Art. 142.
195
Art. 143
196
Art. 144
197
Art. 145
198
Art. 146

40
 Property Regime of Unions Without Marriage:

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

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

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

When only one of the parties to a void marriage is in good faith, the share of the
party in bad faith in the co-ownership shall be forfeited in favor of their common children.
In case of default of or waiver by any or all of the common children or their descendants,
each vacant share shall belong to the respective surviving descendants. In the absence of
descendants, such share shall belong to the innocent party. In all cases, the forfeiture shall
take place upon termination of the cohabitation.199

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

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

The foregoing rules on forfeiture shall likewise apply even if both parties are in
both faith.200

199
Art. 147
200
Art. 148

41
VI. The Family

The family, being the foundation of the nation, is a basic social institution which
public policy cherishes and protects. Consequently, family relations are governed by law
and no custom, practice or agreement destructive of the family shall be recognized or given
effect.201

Family relations include those:

(1) Between husband and wife;

(2) Between parents and children;
(3) Among brothers and sisters, whether of the full or half-blood.202

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

This rules shall not apply to cases which may not be the subject of compromise
under the Civil Code.203

The family home, constituted jointly by the husband and the wife or by an
unmarried head of a family, is the dwelling house where they and their family reside, and
the land on which it is situated.204

The family home is deemed constituted on a house and lot from the time it is
occupied as a family residence. From the time of its constitution and so long as any of its
beneficiaries actually resides therein, the family home continues to be such and is exempt
from execution, forced sale or attachment except as hereinafter provided and to the extent
of the value allowed by law.205

201
Art. 149.
202
Art. 150
203
Art. 151
No compromise upon the following questions shall be valid:
(1) The civil status of persons;
(2) The validity of a marriage or a legal separation;
(3) Any ground for legal separation;
(4) Future support;
(5) The jurisdiction of courts;
(6) Future legitime (Art. 2035)
204
Art. 152
205
Art. 153

42
 Beneficiaries of a family home:

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

(2) Their parents, ascendants, descendants, brothers and sisters, whether the
relationship be legitimate or illegitimate, who are living in the family home and who depend
upon the head of the family for legal support.206

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

(1) For nonpayment of taxes;

(2) For debts incurred prior to the constitution of the family home;

(3) For debts secured by mortgages on the premises before or after such
constitution; and

(4) For debts due to laborers, mechanics, architects, builders, materialmen and
others who have rendered service or furnished material for the construction of the
building.207

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

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

where ownership is reserved by the vendor only to guarantee payment of the purchase
price may be constituted as a family home.208

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

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

206
Art. 154
207
Art. 155
208
Art. 156

43
 Urban areas are deemed to include chartered cities and municipalities whose annual
income at least equals that legally required for chartered cities. All others are deemed to be
rural areas.209

The family home may be sold, alienated, donated, assigned or encumbered by the
owner or owners thereof with the written consent of the person constituting the same, the
latter's spouse, and a majority of the beneficiaries of legal age. In case of conflict, the court
shall decide.210

The family home shall continue despite the death of one or both spouses or of the
unmarried head of the family for a period of ten years or for as long as there is a minor
beneficiary, and the heirs cannot partition the same unless the court finds compelling
reasons therefor. This rule shall apply regardless of whoever owns the property or
constituted the family home.211

When a creditor whose claims is not among those mentioned in Article 155 212
obtains a judgment in his favor, and he has reasonable grounds to believe that the family
home is actually worth more than the maximum amount fixed in Article 157213, he may
apply to the court which rendered the judgment for an order directing the sale of the
property under execution. The court shall so order if it finds that the actual value of the
family home exceeds the maximum amount allowed by law as of the time of its
constitution. If the increased actual value exceeds the maximum allowed in Article 157 and
results from subsequent voluntary improvements introduced by the person or persons
constituting the family home, by the owner or owners of the property, or by any of the
beneficiaries, the same rule and procedure shall apply.

At the execution sale, no bid below the value allowed for a family home shall be
considered. The proceeds shall be applied first to the amount mentioned in Article 157,
and then to the liabilities under the judgment and the costs. The excess, if any, shall be
delivered to the judgment debtor.214

For purposes of availing of the benefits of a family home, a person may constitute,
or be the beneficiary of, only one family home.215

The provisions in this Chapter shall also govern existing family residences insofar
as said provisions are applicable.216

209
Art. 157
210
Art. 158
211
Art. 159
212
supra
213
ibid
214
Art. 160
215
Art. 161
216
Art. 162

44
VII. Paternity and Filiation

Legitimate Children:

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

legitimate or illegitimate.217

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

Children conceived as a result of artificial insemination of the wife with the sperm
of the husband or that of a donor or both are likewise legitimate children of the husband
and his wife, provided, that both of them authorized or ratified such insemination in a
written instrument executed and signed by them before the birth of the child. The
instrument shall be recorded in the civil registry together with the birth certificate of the
child.218

Children conceived and born outside a valid marriage are illegitimate, unless
otherwise provided in this Code.219

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

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

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

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

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

intercourse;

(2) That it is proved that for biological or other scientific reasons, the child could
not have been that of the husband, except in the instance provided in the second paragraph
of Article 164;220 or

217
Art. 163
218
Art. 164
219
Art. 165
220
supra

45
 (3) That in case of children conceived through artificial insemination, the written
authorization or ratification of either parent was obtained through mistake, fraud, violence,
intimidation, or undue influence.221

The child shall be considered legitimate although the mother may have declared
against its legitimacy or may have been sentenced as an adulteress.222

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

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

(2) A child born after one hundred eighty days following the celebration of the
subsequent marriage is considered to have been conceived during such marriage, even
though it be born within the three hundred days after the termination of the former
marriage.223

The legitimacy or illegitimacy of a child born after three hundred days following the
termination of the marriage shall be proved by whoever alleges such legitimacy or
illegitimacy.224

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

If the husband or, in his default, all of his heirs do not reside at the place of birth as
defined in the first paragraph or where it was recorded, the period shall be two years if they
should reside in the Philippines; and three years if abroad. If the birth of the child has been
concealed from or was unknown to the husband or his heirs, the period shall be counted
from the discovery or knowledge of the birth of the child or of the fact of registration of
said birth, whichever is earlier.225

221
Art. 166
222
Art. 167
223
Art. 168
224
Art. 169
225
Art. 170

46
 The heirs of the husband may impugn the filiation of the child within the period
prescribed in the preceding article only in the following cases:

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

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

(3) If the child was born after the death of the husband.226

Proof of Filiation:

By any of the following:

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

In the absence of the foregoing evidence, by:

(1) The open and continuous possession of the status of a legitimate child; or
(2) Any other means allowed by the Rules of Court and special laws.227

The action to claim legitimacy may be brought by the child during his or her
lifetime and shall be transmitted to the heirs should the child die during minority or in a
state of insanity. In these cases, the heirs shall have a period of five years within which to
institute the action.228

Rights of legitimate children:

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

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

(3) To be entitled to the legitimate and other successional rights granted to them by
the Civil Code.229
226
Art. 171
227
Art. 172
228
Art. 173
229
Art. 174

47
 Illegitimate Children may establish their illegitimate filiation in the same way and on
the same evidence as legitimate children.

The action must be brought within the same period specified in Article 173,230
except when the action is based on the second paragraph of Article 172,231 in which case
the action may be brought during the lifetime of the alleged parent.232

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

The legitime of each illegitimate child shall consist of one-half (1/2) of the legitime
of a legitimate child.233

Only children conceived and born outside of wedlock of parents who, at the time
of the conception of the former, were not disqualified by any impediment to marry each
other may be legitimated.234

Legitimation shall take place by a subsequent valid marriage between parents. The
annulment of a voidable marriage shall not affect the legitimation.235

Legitimated children shall enjoy the same rights as legitimate children.236

The effects of legitimation shall retroact to the time of the child's birth.237

The legitimation of children who died before the celebration of the marriage shall
benefit their descendants.238

Legitimation may be impugned only by those who are prejudiced in their rights,
within five years from the time their cause of action accrues.239

230
supra
231
Ibid.
232
Art. 175
233
Art. 176, as amended by R.A. 9255
234
Art. 177
235
Art. 178
236
Art. 179
237
Art. 180
238
Art. 181
239
Art. 182

48
VIII. Adoption

A. Domestic Adoption Act of 1998 (R.A. No. 8552)240

B. Inter- Country Adoption Act of 1995241

IX. Support

Comprises everything indispensable for sustenance, dwelling, clothing, medical

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

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

paragraph shall include his schooling or training for some profession, trade or vocation,
even beyond the age of majority. Transportation shall include expenses in going to and
from school, or to and from place of work.242

Who are Obliged;

(1) The spouses;

(2) Legitimate ascendants and descendants;

(3) Parents and their legitimate children and the legitimate and illegitimate children
of the latter;

(4) Parents and their illegitimate children and the legitimate and illegitimate children
of the latter; and

(5) Legitimate brothers and sisters, whether of full or half-blood243

Brothers and sisters not legitimately related, whether of the full or half-blood, are
likewise bound to support each other to the full extent set forth in Article 194244, except
only when the need for support of the brother or sister, being of age, is due to a cause
imputable to the claimant's fault or negligence.245

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

brothers and sisters, whether legitimately or illegitimately related, only the separate property

240
see Reference
241
Ibid.
242
Art. 194
243
Art. 195
244
supra
245
Art. 196

49
of the person obliged to give support shall be answerable provided that in case the obligor
has no separate property, the absolute community or the conjugal partnership, if financially
capable, shall advance the support, which shall be deducted from the share of the spouse
obliged upon the liquidation of the absolute community or of the conjugal partnership.246

Whenever two or more persons are obliged to give support, the liability shall
devolve upon the following persons in the order herein provided:

(1) The spouse;

(2) The descendants in the nearest degree;
(3) The ascendants in the nearest degree; and
(4) The brothers and sisters.247

When the obligation to give support falls upon two or more persons, the payment
of the same shall be divided between them in proportion to the resources of each.

However, in case of urgent need and by special circumstances, the judge may order
only one of them to furnish the support provisionally, without prejudice to his right to
claim from the other obligors the share due from them.

When two or more recipients at the same time claim support from one and the
same person legally obliged to give it, should the latter not have sufficient means to satisfy
all claims, the order established in the preceding article shall be followed, unless the
concurrent obligees should be the spouse and a child subject to parental authority, in which
case the child shall be preferred.248

When, without the knowledge of the person obliged to give support, it is given by a
stranger, the latter shall have a right to claim the same from the former, unless it appears
that he gave it without intention of being reimbursed.249

When the person obliged to support another unjustly refuses or fails to give
support when urgently needed by the latter, any third person may furnish support to the
needy individual, with right of reimbursement from the person obliged to give support.
This shall particularly apply when the father or mother of a child under the age of majority
unjustly refuses to support or fails to give support to the child when urgently needed.250

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.

246
Art. 197
247
Art. 199
248
Art. 200
249
Art. 206
250
Art. 207

50
 Furthermore, contractual support shall be subject to adjustment whenever
modification is necessary due to changes of circumstances manifestly beyond the
contemplation of the parties.251

The spouses and their children shall be supported from the properties of the
absolute community or the conjugal partnership. After the final judgment granting the
petition, the obligation of mutual support between the spouses ceases. However, in case of
legal separation, the court may order that the guilty spouse shall give support to the
innocent one, specifying the terms of such order.252

The amount shall be in proportion to the resources or means of the giver and to
the necessities of the recipient.253

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

or increase of the necessities of the recipient and the resources or means of the person
obliged to furnish the same.254

When Demandable:

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

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

Payment shall be made within the first five (5) days of each corresponding month
or when the recipient dies, his heirs shall not be obliged to return what he has received in
advance.255

The person obliged to give support shall have the option to fulfill the obligation
either by paying the allowance fixed, or by receiving and maintaining in the family dwelling
the person who has a right to receive support. The latter alternative cannot be availed of in
case there is a moral or legal obstacle thereto.256

251
Art. 208
252
Art. 198
253
Art. 201.
254
Art. 202
255
Art. 203
256
Art. 204

51
 The right to receive support as well as any money or property obtained as such
support shall not be levied upon on attachment or execution.257

X. Parental Authority

Pursuant to the natural right and duty of parents over the person and property of
their unemancipated children, parental authority and responsibility shall include the caring
for and rearing them for civic consciousness and efficiency and the development of their
moral, mental and physical character and well-being.258

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

the cases authorized by law.259

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

Children shall always observe respect and reverence towards their parents and are
obliged to obey them as long as the children are under parental authority.260

In case of absence or death of either parent, the parent present shall continue
exercising parental authority. The remarriage of the surviving parent shall not affect the
parental authority over the children, unless the court appoints another person to be the
guardian of the person or property of the children.261

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

parent designated by the Court. The Court shall take into account all relevant
considerations, especially the choice of the child over seven years of age, unless the parent
chosen is unfit.262

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

authority shall be exercised by the surviving grandparent. In case several survive, the one
designated by the court, taking into account the same consideration mentioned in the
preceding article, shall exercise the authority.263

257
Art. 205
258
Art. 209
259
Art. 210
260
Art. 211
261
Art. 212
262
Art. 213
263
Art. 214

52
 No descendant shall be compelled, in a criminal case, to testify against his parents
and grandparents, except when such testimony is indispensable in a crime against the
descendant or by one parent against the other.264

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

(1) The surviving grandparent, as provided in Art. 214;265

(2) The oldest brother or sister, over twenty-one years of age, unless unfit or
disqualified; and

(3) The child's actual custodian, over twenty-one years of age, unless unfit or
disqualified.

Whenever the appointment or a judicial guardian over the property of the child
becomes necessary, the same order of preference shall be observed.266

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

similarly situated, parental authority shall be entrusted in summary judicial proceedings to
heads of children's homes, orphanages and similar institutions duly accredited by the
proper government agency.267

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

Authority and responsibility shall apply to all authorized activities whether inside or
outside the premises of the school, entity or institution.268

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

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

264
Art. 215
265
supra
266
Art. 216
267
Art. 217
268
Art. 218

53
 All other cases not covered by this and the preceding articles shall be governed by
the provisions of the Civil Code on quasi-delicts.269

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

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

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

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

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

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

(6) To demand from them respect and obedience;

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

(8) To perform such other duties as are imposed by law upon parents and
guardians.270

Parents and other persons exercising parental authority shall be civilly liable for the
injuries and damages caused by the acts or omissions of their unemancipated children
living in their company and under their parental authority subject to the appropriate
defenses provided by law.271

The courts may appoint a guardian of the child's property or a guardian ad litem
when the best interests of the child so requires.272

The parents or, in their absence or incapacity, the individual, entity or institution
exercising parental authority, may petition the proper court of the place where the child
269
Art. 219
270
Art. 220
271
Art. 221
272
Art. 222

54
resides, for an order providing for disciplinary measures over the child. The child shall be
entitled to the assistance of counsel, either of his choice or appointed by the court, and a
summary hearing shall be conducted wherein the petitioner and the child shall be heard.

However, if in the same proceeding the court finds the petitioner at fault,
irrespective of the merits of the petition, or when the circumstances so warrant, the court
may also order the deprivation or suspension of parental authority or adopt such other
measures as it may deem just and proper.273

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

The parent exercising parental authority shall not interfere with the care of the
child whenever committed but shall provide for his support. Upon proper petition or at its
own instance, the court may terminate the commitment of the child whenever just and
proper.274

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

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

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

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

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

The ordinary rules on guardianship shall be merely suppletory except when the
child is under substitute parental authority, or the guardian is a stranger, or a parent has
remarried, in which case the ordinary rules on guardianship shall apply.275

273
Art. 223
274
Art. 224
275
Art. 225

55
 The property of the unemancipated child earned or acquired with his work or
industry or by onerous or gratuitous title shall belong to the child in ownership and shall be
devoted exclusively to the latter's support and education, unless the title or transfer
provides otherwise.

The right of the parents over the fruits and income of the child's property shall be
limited primarily to the child's support and secondarily to the collective daily needs of the
family.276

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

to an unemancipated child, the net proceeds of such property shall belong to the owner.
The child shall be given a reasonable monthly allowance in an amount not less than that
which the owner would have paid if the administrator were a stranger, unless the owner,
grants the entire proceeds to the child. In any case, the proceeds thus give in whole or in
part shall not be charged to the child's legitime.277

Parental authority terminates permanently:

(1) Upon the death of the parents;

(2) Upon the death of the child; or

(3) Upon emancipation of the child.278

Parental authority also terminates:279

(1) Upon adoption of the child;

(2) Upon appointment of a general guardian;

(3) Upon judicial declaration of abandonment of the child in a case filed for the
purpose;

(4) Upon final judgment of a competent court divesting the party concerned of
parental authority; or

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

parental authority.280

276
Art. 226
277
Art. 227
278
Art. 228
279
unless subsequently revived by a final judgment
280
Art. 229

56
 Parental authority is suspended upon conviction of the parent or the person
exercising the same of a crime which carries with it the penalty of civil interdiction. The
authority is automatically reinstated upon service of the penalty or upon pardon or amnesty
of the offender.281

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

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

(2) Gives the child corrupting orders, counsel or example;
(3) Compels the child to beg; or
(4) Subjects the child or allows him to be subjected to acts of lasciviousness.

The grounds enumerated above are deemed to include cases which have resulted
from culpable negligence of the parent or the person exercising parental authority.

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

The suspension or deprivation may be revoked and the parental authority revived
in a case filed for the purpose or in the same proceeding if the court finds that the cause
therefor has ceased and will not be repeated.282

If the person exercising parental authority has subjected the child or allowed him to
be subjected to sexual abuse, such person shall be permanently deprived by the court of
such authority.283

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

In no case shall the school administrator, teacher of individual engaged in child care
exercising special parental authority inflict corporal punishment upon the child.284
Include: Child Abuse Law (R.A. No. 7610)

281
Art. 230
282
Art. 231
283
Art. 232
284
Art. 233

57
XI. Emancipation285

Emancipation takes place by the attainment of majority.286

Emancipation also takes place:

(1) By the marriage of the minor; or

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

executed by the parent exercising parental authority and the minor at least eighteen years of
age. Such emancipation shall be irrevocable.287

Emancipation for any cause shall terminate parental authority over the person and
property of the child who shall then be qualified and responsible for all acts of civil life.288

XII. Summary Judicial Proceedings in Family Law Cases

The procedural rules provided for shall apply as regards separation in fact between
husband and wife, abandonment by one of the other, and incidents involving parental
authority.289

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

The petition shall attach the proposed deed, if any, embodying the transaction, and,
if none, shall describe in detail the said transaction and state the reason why the required
consent thereto cannot be secured. In any case, the final deed duly executed by the parties
shall be submitted to and approved by the court.290

Claims for damages by either spouse, except costs of the proceedings, may be
litigated only in a separate action.291

Jurisdiction over the petition shall, upon proof of notice to the other spouse, be
exercised by the proper court authorized to hear family cases, if one exists, or in the

285
Arts. 234 and 236, Family Code as amended by R.A. No. 6809 which lowered the age of majority
286
Unless otherwise provided, majority commences at the age of twenty-one years.
287
Art. 234, as amended by R.A. 6809
288
Art. 236
289
Art. 238
290
Art. 239
291
Art. 240

58
regional trial court or its equivalent sitting in the place where either of the spouses
resides.292

Upon the filing of the petition, the court shall notify the other spouse, whose
consent to the transaction is required, of said petition, ordering said spouse to show cause
why the petition should not be granted, on or before the date set in said notice for the
initial conference. The notice shall be accompanied by a copy of the petition and shall be
served at the last known address of the spouse concerned.293

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

parties being assisted by counsel. After the initial conference, if the court deems it useful,
the parties may be assisted by counsel at the succeeding conferences and hearings.294

In case of non-appearance of the spouse whose consent is sought, the court shall
inquire into the reasons for his failure to appear, and shall require such appearance, if
possible.295

If, despite all efforts, the attendance of the non-consenting spouse is not secured,
the court may proceed ex parte and render judgment as the facts and circumstances may
warrant. In any case, the judge shall endeavor to protect the interests of the non-appearing
spouse.296

If the petition is not resolved at the initial conference, said petition shall be decided
in a summary hearing on the basis of affidavits, documentary evidence or oral testimonies
at the sound discretion of the court. If testimony is needed, the court shall specify the
witnesses to be heard and the subject-matter of their testimonies, directing the parties to
present said witnesses.297

The judgment of the court shall be immediately final and executory.298

The petition for judicial authority to administer or encumber specific separate

property of the abandoning spouse and to use the fruits or proceeds thereof for the
support of the family shall also be governed by these rules.299

292
Art. 241
293
Art. 242
294
Art. 243.
295
Art. 244
296
Art. 245
297
Art. 246
298
Art. 247
299
Art. 248

59
 Petitions filed under Articles 223, 225 and 235300 of this Code involving parental
authority shall be verified.301

Such petitions shall be verified and filed in the proper court of the place where the
child resides.302

Upon the filing of the petition, the court shall notify the parents or, in their absence
or incapacity, the individuals, entities or institutions exercising parental authority over the
child.303

The rules in Chapter 2304 hereof shall also govern summary proceedings under this
Chapter insofar as they are applicable.305

XIII. Retroactivity of the Family Code

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

with the Civil Code or other laws.306

XIV. Funerals

The duty and the right to make arrangements for the funeral of a relative shall be in
accordance with the order established for support, under article 294.307 In case of
descendants of the same degree, or of brothers and sisters, the oldest shall be preferred. In
case of ascendants, the paternal shall have a better right.308

Every funeral shall be in keeping with the social position of the deceased.309

The funeral shall be in accordance with the expressed wishes of the deceased. In
the absence of such expression, his religious beliefs or affiliation shall determine the funeral
rites. In case of doubt, the form of the funeral shall be decided upon by the person obliged
to make arrangements for the same, after consulting the other members of the family.310

300
supra
301
Art. 249
302
Art. 250
303
Art. 251
304
Separation in Fact
305
Art. 252
306
Art. 256
307
See Reference
308
Art. 305
309
Art. 306
310
Art. 307

60
 No human remains shall be retained, interred, disposed of or exhumed without the
consent of the persons mentioned in articles 294 and 305.311

Any person who shows disrespect to the dead, or wrongfully interferes with a
funeral shall be liable to the family of the deceased for damages, material and moral.312

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

funeral expenses, and shall be chargeable to the conjugal partnership property, if the
deceased is one of the spouses.313

XV. Use of Surnames

Legitimate and legitimated children shall principally use the surname of the
father.314

An adopted child shall bear the surname of the adopter.315

A natural child acknowledged by both parents shall principally use the surname of
the father. If recognized by only one of the parents, a natural child shall employ the
surname of the recognizing parent.316

Natural children by legal fiction shall principally employ the surname of the
317
father.

Illegitimate children referred to in article 287 shall bear the surname of the
mother.318

Children conceived before the decree annulling a voidable marriage shall principally
use the surname of the father.319

A married woman may use:

(1) Her maiden first name and surname and add her husband's surname, or
(2) Her maiden first name and her husband's surname or

311
Art. 308; Art. 305, supra
312
Art. 309
313
Art. 310
314
Art. 364
315
Art. 365
316
Art. 366
317
Art. 367
318
Art. 368
319
Art. 369

61
 (3) Her husband's full name, but prefixing a word indicating that she is his wife,
such as "Mrs."320

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

(1) The court decrees otherwise, or

(2) She or the former husband is married again to another person.321

When legal separation has been granted, the wife shall continue using her name and
surname employed before the legal separation.322

A widow may use the deceased husband's surname as though he were still living, in
accordance with article 370.323

In case of identity of names and surnames, the younger person shall be obliged to
use such additional name or surname as will avoid confusion.324

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

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

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

(2) Add the Roman numerals II, III, and so on.325

No person can change his name or surname without judicial authority.326

Usurpation of a name and surname may be the subject of an action for damages
and other relief.327

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

action to the latter.328

320
Art. 370
321
Art. 371
322
Art. 372
323
Art. 373
324
Art. 374
325
Art. 375
326
Art. 376, amended by R.A. 9048, infra
327
Art. 377
328
Art. 378

62
 The employment of pen names or stage names is permitted, provided it is done in
good faith and there is no injury to third persons. Pen names and stage names cannot be
usurped.329

Except as provided in the preceding article, no person shall use different names
and surnames.330

XVI. Absence

If there is a doubt, as between two or more persons who are called to succeed each
other, as to which of them died first, whoever alleges the death of one prior to the other,
shall prove the same; in the absence of proof, it is presumed that they died at the same time
and there shall be no transmission of rights from one to the other.331

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

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

For the purpose of contracting the subsequent marriage, the spouse present must
institute a summary proceeding as provided in this Code for the declaration of presumptive
death of the absentee, without prejudice to the effect of reappearance of the absent
spouse.332

XVII. Civil Registrar

Acts, events and judicial decrees concerning the civil status of persons shall be
recorded in the civil register.333

The following shall be entered in the civil register:

(1) Births;
(2) marriages;
(3) deaths;
(4) legal separations;
(5) annulments of marriage;
(6) judgments declaring marriages void from the beginning;

329
Art. 379
330
Art. 380
331
Art. 43, CC
332
Art. 41, FC
333
Art. 407

63
 (7) legitimations;
(8) adoptions;
(9) acknowledgments of natural children;
(10) naturalization;
(11) loss, or
(12) recovery of citizenship;
(13) civil interdiction;
(14) judicial determination of filiation;
(15) voluntary emancipation of a minor; and
(16) changes of name.334

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

mentioned in the preceding article, it shall be the duty of the clerk of the court which
issued the decree to ascertain whether the same has been registered, and if this has not
been done, to send a copy of said decree to the civil registry of the city or municipality
where the court is functioning.335

The books making up the civil register and all documents relating thereto shall be
considered public documents and shall be prima facie evidence of the facts therein
contained.336

Every civil registrar shall be civilly responsible for any unauthorized alteration made
in any civil register, to any person suffering damage thereby. However, the civil registrar
may exempt himself from such liability if he proves that he has taken every reasonable
precaution to prevent the unlawful alteration.337

No entry in a civil register shall be changed or corrected, without a judicial order.338

All other matters pertaining to the registration of civil status shall be governed by
special laws.339

334
Art. 408
335
Art. 409
336
Art. 410
337
Art. 411
338
Art. 412
339
Art. 413

64
PROPERTY

I. Characteristics

1. Utility for the satisfaction of moral and economic wants

2. Susceptibility of appropriation
3. Individuality or substantivity340

II. Classification341

Immovables or real342 Movables343

a) By nature those which cannot be General Rule: All things which can be
carried from place to place.344 transported from place to place without
impairment of the real property to which
1. Lands, buildings, roads and they are fixed.
constructions (adhered to the soil).345
Exclusions: those movables susceptible of
2. Mines, quarries and slag dumps, appropriation which are not included in the
while the matter thereof forms part of the enumeration of immovables.
bed, and waters either running or stagnant.
a. Special: real property which by any
b) By incorporation essentially movables special provisions of law is considered as
but are attached to an immovable in a fixed personalty.
manner to be an integral part thereof.346
b. In parts: forces of nature which are
1. Trees, plants and growing fruits brought under control by science.
while they are attached to the land or form
an integral part of an immovable. c. Obligations and actions which have
340
that is, it can exist by itself, and not merely as a part of the whole; hence, the human hair becomes
property only when it is detached from the hair
341
Tests:
a. Immovable - cannot be transferred from place to place.
b. Movable excluded from the enumeration of immovable and can be moved from place to place
without damage thereto.
c. Mixed/semi-movable - those which move by themselves (both immovable and movable in
nature).
342
Art. 415
343
Art. 416 to 417
344
Pars. 1 & 8
345
The materials constituting a building which is the subject of demolition are movable.
A structure which is merely superimposed, not adhered, to the soil may be considered movable.
346
Pars. 2, 3 & 7

65
 for their object movables351 or demandable
2. Everything attached to an immovable sums.352
in a fixed manner in such a way that it
cannot be separated therefrom without d. Shares of stocks or interests in
breaking the material or deterioration of the juridical entities.
object.347

3. Fertilizers actually used on a piece of

land.

c) By destination essentially movables but

are placed in an immovable as an added
utility.

1. Statutes, reliefs painting or other

objects for use or ornamentation, placed in
a building or on lands, by the owner of the
immovable in such a manner that it reveals
the intention to attach them permanently to
the tenements.348

2. Machinery, instruments or implements

intended by the owner of the tenement for
an industry or works which may be carried
on in a building or land, and which tend
directly to meet the needs of such industry
or works.349
3. Animal houses or breeding places, in
case the owner has placed or preserved
them with the intention to attach them
permanently to the land, and the animals in
these places.

4. Docks and structures which, though

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

347
Rex vinta
348
Indirect utility
349
Direct utility

66
d) By analogy - classified by express
provision of law because it is regarded as
united to the immovable property.350

1. Contracts for public works.

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

III. Ownership

Ownership may be exercised over things or rights.353

The owner has the right to enjoy and dispose of a thing, without other limitations
than those established by law.354

The owner has also a right of action against the holder and possessor of the thing
in order to recover it.

The owner or lawful possessor of a thing has the right to exclude any person from
the enjoyment and disposal thereof. For this purpose, he may use such force as may be
reasonably necessary to repel or prevent an actual or threatened unlawful physical invasion
or usurpation of his property.355

Every owner may enclose or fence his land or tenements by means of walls,
ditches, live or dead hedges, or by any other means without detriment to servitudes
constituted thereon.356

The owner of a thing cannot make use thereof in such manner as to injure the
rights of a third person.357

The owner of a thing has no right to prohibit the interference of another with the
same, if the interference is necessary to avert an imminent danger and the threatened

351
corporeal or intangible
352
These are really personal rights because they have a definite passive subject (e.g. intellectual
property).
350
Par. 10
353
Art. 427
354
Art. 428
355
Art. 429
356
Art. 430
357
Art. 431

67
damage, compared to the damage arising to the owner from the interference, is much
greater. The owner may demand from the person benefited indemnity for the damage to
him.358

Actual possession under claim of ownership raises disputable presumption of

ownership. The true owner must resort to judicial process for the recovery of the
property.359

In an action to recover, the property must be identified, and the plaintiff must rely
on the strength of his title and not on the weakness of the defendant's claim.360

No person shall be deprived of his property except by competent authority and for
public use and always upon payment of just compensation.

Should this requirement be not first complied with, the courts shall protect and, in
a proper case, restore the owner in his possession.361

When any property is condemned or seized by competent authority in the interest

of health, safety or security, the owner thereof shall not be entitled to compensation, unless
he can show that such condemnation or seizure is unjustified.362

The owner of a parcel of land is the owner of its surface and of everything under it,
and he can construct thereon any works or make any plantations and excavations which he
may deem proper, without detriment to servitudes and subject to special laws and
ordinances. He cannot complain of the reasonable requirements of aerial navigation.363

Hidden treasure belongs to the owner of the land, building, or other property on
which it is found.364

Nevertheless, when the discovery is made on the property of another, or of the

State or any of its subdivisions, and by chance, one-half thereof shall be allowed to the
finder. If the finder is a trespasser, he shall not be entitled to any share of the treasure.

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

358
Art. 432
359
Art. 433
360
Art. 434
361
Art. 435
362
Art. 436
363
Art. 437
364
Art. 438

68
 By treasure is understood, for legal purposes, any hidden and unknown deposit of
money, jewelry, or other precious objects, the lawful ownership of which does not
appear.365

IV. Accession

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

produced thereby, or which is incorporated or attached thereto, either naturally or
artificially.366

To the owner belongs:

(1) The natural fruits;

(2) The industrial fruits;
(3) The civil fruits.367

Natural fruits are the spontaneous products of the soil, and the young and other
products of animals.

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

Civil fruits are the rents of buildings, the price of leases of lands and other property
and the amount of perpetual or life annuities or other similar income.368

He who receives the fruits has the obligation to pay the expenses made by a third
person in their production, gathering, and preservation.369

Only such as are manifest or born are considered as natural or industrial fruits.
With respect to animals, it is sufficient that they are in the womb of the mother, although
unborn.370

Whatever is built, planted or sown on the land of another and the improvements or
repairs made thereon, belong to the owner of the land, subject to the provisions of the
following articles.371

365
Art. 439
366
Art. 440
367
Art. 441
368
Art. 442
369
Art. 443
370
Art. 444
371
Art. 445

69
 All works, sowing, and planting are presumed made by the owner and at his
expense, unless the contrary is proved.372

The owner of the land who makes thereon, personally or through another,
plantings, constructions or works with the materials of another, shall pay their value; and, if
he acted in bad faith, he shall also be obliged to the reparation of damages. The owner of
the materials shall have the right to remove them only in case he can do so without injury
to the work constructed, or without the plantings, constructions or works being destroyed.
However, if the landowner acted in bad faith, the owner of the materials may remove them
in any event, with a right to be indemnified for damages.373

The owner of the land on which anything has been built, sown or planted in good
faith, shall have the right to appropriate as his own the works, sowing or planting, after
payment of the indemnity provided for in Articles 546 and 548, or to oblige the one who
built or planted to pay the price of the land, and the one who sowed, the proper rent.

However, the builder or planter cannot be obliged to buy the land if its value is
considerably more than that of the building or trees. In such case, he shall pay reasonable
rent, if the owner of the land does not choose to appropriate the building or trees after
proper indemnity. The parties shall agree upon the terms of the lease and in case of
disagreement, the court shall fix the terms thereof.374

He who builds, plants or sows in bad faith on the land of another, loses what is
built, planted or sown without right to indemnity.375

The owner of the land on which anything has been built, planted or sown in bad
faith may demand the demolition of the work, or that the planting or sowing be removed,
in order to replace things in their former condition at the expense of the person who built,
planted or sowed; or he may compel the builder or planter to pay the price of the land, and
the sower the proper rent.376

In the cases of the two preceding articles, the landowner is entitled to damages
from the builder, planter or sower.377

The builder, planter or sower in bad faith is entitled to reimbursement for the
necessary expenses of preservation of the land.378

372
Art. 446
373
Art. 447.
374
Art. 448
375
Art. 449
376
Art. 450
377
Art. 451
378
Art. 452.

70
 If there was bad faith, not only on the part of the person who built, planted or
sowed on the land of another, but also on the part of the owner of such land, the rights of
one and the other shall be the same as though both had acted in good faith.

It is understood that there is bad faith on the part of the landowner whenever the
act was done with his knowledge and without opposition on his part.379

When the landowner acted in bad faith and the builder, planter or sower proceeded
in good faith, the provisions of article 447 shall apply.380

If the materials, plants or seeds belong to a third person who has not acted in bad
faith, the owner of the land shall answer subsidiarily for their value and only in the event
that the one who made use of them has no property with which to pay.381

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

In the cases regulated in the preceding articles, good faith does not necessarily
exclude negligence, which gives right to damages under article 2176.382

To the owners of lands adjoining the banks of rivers belong the accretion which
they gradually receive from the effects of the current of the waters.383

The owners of estates adjoining ponds or lagoons do not acquire the land left dry
by the natural decrease of the waters, or lose that inundated by them in extraordinary
floods.384

Whenever the current of a river, creek or torrent segregates from an estate on its
bank a known portion of land and transfers it to another estate, the owner of the land to
which the segregated portion belonged retains the ownership of it, provided that he
removes the same within two years.385

Trees uprooted and carried away by the current of the waters belong to the owner
of the land upon which they may be cast, if the owners do not claim them within six

379
Art. 453
380
Art. 454
381
Art. 455
382
Art. 456
383
Art. 457
384
Art. 458
385
Art. 459

71
months. If such owners claim them, they shall pay the expenses incurred in gathering them
or putting them in a safe place.386

River beds which are abandoned through the natural change in the course of the
waters ipso facto belong to the owners whose lands are occupied by the new course in
proportion to the area lost. However, the owners of the lands adjoining the old bed shall
have the right to acquire the same by paying the value thereof, which value shall not exceed
the value of the area occupied by the new bed.387

Whenever a river, changing its course by natural causes, opens a new bed through a
private estate, this bed shall become of public dominion.388

Whenever the current of a river divides itself into branches, leaving a piece of land
or part thereof isolated, the owner of the land retains his ownership. He also retains it if a
portion of land is separated from the estate by the current.389

Islands which may be formed on the seas within the jurisdiction of the Philippines,
on lakes, and on navigable or floatable rivers belong to the State.390

Islands which through successive accumulation of alluvial deposits are formed in

non-navigable and non-floatable rivers, belong to the owners of the margins or banks
nearest to each of them, or to the owners of both margins if the island is in the middle of
the river, in which case it shall be divided longitudinally in halves. If a single island thus
formed be more distant from one margin than from the other, the owner of the nearer
margin shall be the sole owner thereof.391

Whenever two movable things belonging to different owners are, without bad faith,
united in such a way that they form a single object, the owner of the principal thing
acquires the accessory, indemnifying the former owner thereof for its value.392

The principal thing, as between two things incorporated, is deemed to be that to

which the other has been united as an ornament, or for its use or perfection.393

If it cannot be determined by the rule given in the preceding article which of the
two things incorporated is the principal one, the thing of the greater value shall be so
considered, and as between two things of equal value, that of the greater volume.

386
Art. 460
387
Art. 461
388
Art. 462
389
Art. 463
390
Art. 464
391
Art. 465
392
Art. 466
393
Art. 467

72
 In painting and sculpture, writings, printed matter, engraving and lithographs, the
board, metal, stone, canvas, paper or parchment shall be deemed the accessory thing.394

Whenever the things united can be separated without injury, their respective
owners may demand their separation.

Nevertheless, in case the thing united for the use, embellishment or perfection of
the other, is much more precious than the principal thing, the owner of the former may
demand its separation, even though the thing to which it has been incorporated may suffer
some injury.395

Whenever the owner of the accessory thing has made the incorporation in bad
faith, he shall lose the thing incorporated and shall have the obligation to indemnify the
owner of the principal thing for the damages he may have suffered.

If the one who has acted in bad faith is the owner of the principal thing, the owner
of the accessory thing shall have a right to choose between the former paying him its value
or that the thing belonging to him be separated, even though for this purpose it be
necessary to destroy the principal thing; and in both cases, furthermore, there shall be
indemnity for damages.

If either one of the owners has made the incorporation with the knowledge and
without the objection of the other, their respective rights shall be determined as though
both acted in good faith.396

Whenever the owner of the material employed without his consent has a right to an
indemnity, he may demand that this consist in the delivery of a thing equal in kind and
value, and in all other respects, to that employed, or else in the price thereof, according to
expert appraisal.397

If by the will of their owners two things of the same or different kinds are mixed,
or if the mixture occurs by chance, and in the latter case the things are not separable
without injury, each owner shall acquire a right proportional to the part belonging to him,
bearing in mind the value of the things mixed or confused.398

If by the will of only one owner, but in good faith, two things of the same or
different kinds are mixed or confused, the rights of the owners shall be determined by the
provisions of the preceding article.

394
Art. 468
395
Art. 469
396
Art. 470
397
Art. 471
398
Art. 472

73
 If the one who caused the mixture or confusion acted in bad faith, he shall lose the
thing belonging to him thus mixed or confused, besides being obliged to pay indemnity for
the damages caused to the owner of the other thing with which his own was mixed.399

One who in good faith employs the material of another in whole or in part in order
to make a thing of a different kind, shall appropriate the thing thus transformed as his own,
indemnifying the owner of the material for its value.

If the material is more precious than the transformed thing or is of more value, its
owner may, at his option, appropriate the new thing to himself, after first paying indemnity
for the value of the work, or demand indemnity for the material.

If in the making of the thing bad faith intervened, the owner of the material shall
have the right to appropriate the work to himself without paying anything to the maker, or
to demand of the latter that he indemnify him for the value of the material and the
damages he may have suffered. However, the owner of the material cannot appropriate the
work in case the value of the latter, for artistic or scientific reasons, is considerably more
than that of the material.400

In the preceding articles, sentimental value shall be duly appreciated.401

V. Quieting of Title to or Interest in and Removal or Prevention of Cloud over

Title to or Interest in Real Property

Whenever there is a cloud on title to real property or any interest therein, by reason
of any instrument, record, claim, encumbrance or proceeding which is apparently valid or
effective but is in truth and in fact invalid, ineffective, voidable, or unenforceable, and may
be prejudicial to said title, an action may be brought to remove such cloud or to quiet the
title.

An action may also be brought to prevent a cloud from being cast upon title to real
property or any interest therein.402

The plaintiff must have legal or equitable title to, or interest in the real property
which is the subject matter of the action. He need not be in possession of said property.403

There may also be an action to quiet title or remove a cloud therefrom when the
contract, instrument or other obligation has been extinguished or has terminated, or has
been barred by extinctive prescription.404

399
Art. 473.
400
Art. 474
401
Art. 475
402
Art. 476
403
Art. 477

74
 The plaintiff must return to the defendant all benefits he may have received from
the latter, or reimburse him for expenses that may have redounded to the plaintiff's
benefit.405

VI. Co-ownership

There is co-ownership whenever the ownership of an undivided thing or right

belongs to different persons.

In default of contracts, or of special provisions, co-ownership shall be governed by

the provisions of this Title.406

The share of the co-owners, in the benefits as well as in the charges, shall be
proportional to their respective interests. Any stipulation in a contract to the contrary shall
be void.

The portions belonging to the co-owners in the co-ownership shall be presumed

equal, unless the contrary is proved.407

Each co-owner may use the thing owned in common, provided he does so in
accordance with the purpose for which it is intended and in such a way as not to injure the
interest of the co-ownership or prevent the other co-owners from using it according to
their rights. The purpose of the co-ownership may be changed by agreement, express or
implied.408

Any one of the co-owners may bring an action in ejectment.409

Each co-owner shall have a right to compel the other co-owners to contribute to
the expenses of preservation of the thing or right owned in common and to the taxes. Any
one of the latter may exempt himself from this obligation by renouncing so much of his
undivided interest as may be equivalent to his share of the expenses and taxes. No such
waiver shall be made if it is prejudicial to the co-ownership.410

Repairs for preservation may be made at the will of one of the co-owners, but he
must, if practicable, first notify his co-owners of the necessity for such repairs. Expenses to

404
Art. 478
405
Art. 479
406
Art. 484
407
Art. 485
408
Art. 486
409
Art. 487
410
Art. 488

75
improve or embellish the thing shall be decided upon by a majority as determined in Article
492.411

Whenever the different stories of a house belong to different owners, if the titles of
ownership do not specify the terms under which they should contribute to the necessary
expenses and there exists no agreement on the subject, the following rules shall be
observed:

(1) The main and party walls, the roof and the other things used in common, shall
be preserved at the expense of all the owners in proportion to the value of the story
belonging to each;

(2) Each owner shall bear the cost of maintaining the floor of his story; the floor of
the entrance, front door, common yard and sanitary works common to all, shall be
maintained at the expense of all the owners pro rata;

(3) The stairs from the entrance to the first story shall be maintained at the expense
of all the owners pro rata, with the exception of the owner of the ground floor; the stairs
from the first to the second story shall be preserved at the expense of all, except the owner
of the ground floor and the owner of the first story; and so on successively.412

None of the co-owners shall, without the consent of the others, make alterations in
the thing owned in common, even though benefits for all would result therefrom.

However, if the withholding of the consent by one or more of the co-owners is

clearly prejudicial to the common interest, the courts may afford adequate relief.413

For the administration and better enjoyment of the thing owned in common, the
resolutions of the majority of the co-owners shall be binding.

There shall be no majority unless the resolution is approved by the co-owners who
represent the controlling interest in the object of the co-ownership.

Should there be no majority, or should the resolution of the majority be seriously

prejudicial to those interested in the property owned in common, the court, at the instance
of an interested party, shall order such measures as it may deem proper, including the
appointment of an administrator.

411
Art. 489
412
Art. 490
413
Art. 491

76
 Whenever a part of the thing belongs exclusively to one of the co-owners, and the
remainder is owned in common, the preceding provision shall apply only to the part owned
in common.414

Each co-owner shall have the full ownership of his part and of the fruits and
benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even
substitute another person in its enjoyment, except when personal rights are involved. But
the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited
to the portion which may be allotted to him in the division upon the termination of the co-
ownership.415

No co-owner shall be obliged to remain in the co-ownership. Each co-owner may

demand at any time the partition of the thing owned in common, insofar as his share is
concerned.

Nevertheless, an agreement to keep the thing undivided for a certain period of

time, not exceeding ten years, shall be valid. This term may be extended by a new
agreement.

A donor or testator may prohibit partition for a period which shall not exceed
twenty years.

Neither shall there be any partition when it is prohibited by law.

No prescription shall run in favor of a co-owner or co-heir against his co-owners

or co-heirs so long as he expressly or impliedly recognizes the co-ownership.416

Notwithstanding the provisions of the preceding article, the co-owners cannot

demand a physical division of the thing owned in common, when to do so would render it
unserviceable for the use for which it is intended. But the co-ownership may be terminated
in accordance with Article 498.417

Partition may be made by agreement between the parties or by judicial proceedings.

Partition shall be governed by the Rules of Court insofar as they are consistent with this
Code.418

The creditors or assignees of the co-owners may take part in the division of the
thing owned in common and object to its being effected without their concurrence. But
they cannot impugn any partition already executed, unless there has been fraud, or in case

414
Art. 492
415
Art. 493
416
Art. 494
417
Art. 495
418
Art. 496

77
it was made notwithstanding a formal opposition presented to prevent it, without prejudice
to the right of the debtor or assignor to maintain its validity.419

Whenever the thing is essentially indivisible and the co-owners cannot agree that it
be allotted to one of them who shall indemnify the others, it shall be sold and its proceeds
distributed.420

The partition of a thing owned in common shall not prejudice third persons, who
shall retain the rights of mortgage, servitude or any other real rights belonging to them
before the division was made. Personal rights pertaining to third persons against the co-
ownership shall also remain in force, notwithstanding the partition.421

Upon partition, there shall be a mutual accounting for benefits received and
reimbursements for expenses made. Likewise, each co-owner shall pay for damages caused
by reason of his negligence or fraud.422

Every co-owner shall, after partition, be liable for defects of title and quality of the
portion assigned to each of the other co-owners.423

VII. Possession

Possession is the holding of a thing or the enjoyment of a right.424

Possession may be exercised in one's own name or in that of another.425

The possession of things or rights may be had in one of two concepts: either in the
concept of owner, or in that of the holder of the thing or right to keep or enjoy it, the
ownership pertaining to another person.426

He is deemed a possessor in good faith who is not aware that there exists in his title
or mode of acquisition any flaw which invalidates it.

He is deemed a possessor in bad faith who possesses in any case contrary to the
foregoing.

419
Art. 497
420
Art. 498
421
Art. 499
422
Art. 500
423
Art. 501
424
Art. 523
425
Art. 524
426
Art. 525

78
 Mistake upon a doubtful or difficult question of law may be the basis of good
427
faith.

Good faith is always presumed, and upon him who alleges bad faith on the part of
a possessor rests the burden of proof.428

Possession acquired in good faith does not lose this character except in the case
and from the moment facts exist which show that the possessor is not unaware that he
possesses the thing improperly or wrongfully.429

It is presumed that possession continues to be enjoyed in the same character in

which it was acquired, until the contrary is proved.430

Only things and rights which are susceptible of being appropriated may be the
object of possession.431

Possession is acquired by the material occupation of a thing or the exercise of a

right, or by the fact that it is subject to the action of our will, or by the proper acts and legal
formalities established for acquiring such right.432

Possession may be acquired by the same person who is to enjoy it, by his legal
representative, by his agent, or by any person without any power whatever: but in the last
case, the possession shall not be considered as acquired until the person in whose name the
act of possession was executed has ratified the same, without prejudice to the juridical
consequences of negotiorum gestio in a proper case.433

The possession of hereditary property is deemed transmitted to the heir without

interruption and from the moment of the death of the decedent, in case the inheritance is
accepted.

One who validly renounces an inheritance is deemed never to have possessed the
same.434

On who succeeds by hereditary title shall not suffer the consequences of the
wrongful possession of the decedent, if it is not shown that he was aware of the flaws

427
Art. 526
428
Art. 527
429
Art. 528
430
Art. 529
431
Art. 530
432
Art. 531
433
Art. 532
434
Art. 533

79
affecting it; but the effects of possession in good faith shall not benefit him except from
the date of the death of the decedent.435

Minors and incapacitated persons may acquire the possession of things; but they
need the assistance of their legal representatives in order to exercise the rights which from
the possession arise in their favor.436

In no case may possession be acquired through force or intimidation as long as

there is a possessor who objects thereto. He who believes that he has an action or a right to
deprive another of the holding of a thing, must invoke the aid of the competent court, if
the holder should refuse to deliver the thing.437

Acts merely tolerated, and those executed clandestinely and without the knowledge
of the possessor of a thing, or by violence, do not affect possession.438

Possession as a fact cannot be recognized at the same time in two different

personalities except in the cases of co-possession. Should a question arise regarding the fact
of possession, the present possessor shall be preferred; if there are two possessors, the one
longer in possession; if the dates of the possession are the same, the one who presents a
title; and if all these conditions are equal, the thing shall be placed in judicial deposit
pending determination of its possession or ownership through proper proceedings.439

Every possessor has a right to be respected in his possession; and should he be

disturbed therein he shall be protected in or restored to said possession by the means
established by the laws and the Rules of Court.

A possessor deprived of his possession through forcible entry may within ten days
from the filing of the complaint present a motion to secure from the competent court, in
the action for forcible entry, a writ of preliminary mandatory injunction to restore him in
his possession. The court shall decide the motion within thirty (30) days from the filing
thereof.440

Only the possession acquired and enjoyed in the concept of owner can serve as a
title for acquiring dominion.441

A possessor in the concept of owner has in his favor the legal presumption that he
possesses with a just title and he cannot be obliged to show or prove it.442

435
Art. 534
436
Art. 535
437
Art. 536
438
Art. 537
439
Art. 538
440
Art. 539
441
Art. 540

80
 The possession of real property presumes that of the movables therein, so long as
it is not shown or proved that they should be excluded.443

Each one of the participants of a thing possessed in common shall be deemed to

have exclusively possessed the part which may be allotted to him upon the division thereof,
for the entire period during which the co-possession lasted. Interruption in the possession
of the whole or a part of a thing possessed in common shall be to the prejudice of all the
possessors. However, in case of civil interruption, the Rules of Court shall apply.444

A possessor in good faith is entitled to the fruits received before the possession is
legally interrupted.

Natural and industrial fruits are considered received from the time they are
gathered or severed.

Civil fruits are deemed to accrue daily and belong to the possessor in good faith in
that proportion.445

If at the time the good faith ceases, there should be any natural or industrial fruits,
the possessor shall have a right to a part of the expenses of cultivation, and to a part of the
net harvest, both in proportion to the time of the possession.

The charges shall be divided on the same basis by the two possessors.

The owner of the thing may, should he so desire, give the possessor in good faith
the right to finish the cultivation and gathering of the growing fruits, as an indemnity for
his part of the expenses of cultivation and the net proceeds; the possessor in good faith
who for any reason whatever should refuse to accept this concession, shall lose the right to
be indemnified in any other manner.446

Necessary expenses shall be refunded to every possessor; but only the possessor in
good faith may retain the thing until he has been reimbursed therefor.

Useful expenses shall be refunded only to the possessor in good faith with the
same right of retention, the person who has defeated him in the possession having the
option of refunding the amount of the expenses or of paying the increase in value which
the thing may have acquired by reason thereof.447

442
Art. 541
443
Art. 542
444
Art. 543
445
Art. 544
446
Art. 545
447
Art. 546

81
 If the useful improvements can be removed without damage to the principal thing,
the possessor in good faith may remove them, unless the person who recovers the
possession exercises the option under paragraph 2 of the preceding article.448

Expenses for pure luxury or mere pleasure shall not be refunded to the possessor
in good faith; but he may remove the ornaments with which he has embellished the
principal thing if it suffers no injury thereby, and if his successor in the possession does not
prefer to refund the amount expended.449

The possessor in bad faith shall reimburse the fruits received and those which the
legitimate possessor could have received, and shall have a right only to the expenses
mentioned in paragraph 1 of Article 546 and in Article 443. The expenses incurred in
improvements for pure luxury or mere pleasure shall not be refunded to the possessor in
bad faith, but he may remove the objects for which such expenses have been incurred,
provided that the thing suffers no injury thereby, and that the lawful possessor does not
prefer to retain them by paying the value they may have at the time he enters into
possession.450

The costs of litigation over the property shall be borne by every possessor.451

Improvements caused by nature or time shall always insure to the benefit of the
person who has succeeded in recovering possession.452

A possessor in good faith shall not be liable for the deterioration or loss of the
thing possessed, except in cases in which it is proved that he has acted with fraudulent
intent or negligence, after the judicial summons.

A possessor in bad faith shall be liable for deterioration or loss in every case, even
if caused by a fortuitous event.453

One who recovers possession shall not be obliged to pay for improvements which
have ceased to exist at the time he takes possession of the thing.454

A present possessor who shows his possession at some previous time, is presumed
to have held possession also during the intermediate period, in the absence of proof to the
contrary.455

448
Art. 547
449
Art. 548
450
Art. 549
451
Art. 550
452
Art. 551
453
Art. 552
454
Art. 553
455
Art. 554

82
 A possessor may lose his possession:

(1) By the abandonment of the thing;

(2) By an assignment made to another either by onerous or gratuitous title;

(3) By the destruction or total loss of the thing, or because it goes out of
commerce;

(4) By the possession of another, subject to the provisions of Article 537, if the
new possession has lasted longer than one year. But the real right of possession is not lost
till after the lapse of ten years.456

The possession of movables is not deemed lost so long as they remain under the
control of the possessor, even though for the time being he may not know their
whereabouts.457

The possession of immovables and of real rights is not deemed lost, or transferred
for purposes of prescription to the prejudice of third persons, except in accordance with
the provisions of the Mortgage Law and the Land Registration laws.458

Acts relating to possession, executed or agreed to by one who possesses a thing

belonging to another as a mere holder to enjoy or keep it, in any character, do not bind or
prejudice the owner, unless he gave said holder express authority to do such acts, or ratifies
them subsequently.459

The possession of movable property acquired in good faith is equivalent to a title.

Nevertheless, one who has lost any movable or has been unlawfully deprived
thereof may recover it from the person in possession of the same.

If the possessor of a movable lost or which the owner has been unlawfully
deprived, has acquired it in good faith at a public sale, the owner cannot obtain its return
without reimbursing the price paid therefor.460

Wild animals are possessed only while they are under one's control; domesticated
or tamed animals are considered domestic or tame if they retain the habit of returning to
the premises of the possessor.461

456
Art. 555
457
Art. 556
458
Art. 557
459
Art. 558
460
Art. 559
461
Art. 560

83
 One who recovers, according to law, possession unjustly lost, shall be deemed for
all purposes which may redound to his benefit, to have enjoyed it without interruption.462

VIII. Usufruct

Usufruct gives a right to enjoy the property of another with the obligation of
preserving its form and substance, unless the title constituting it or the law otherwise
provides.463

Usufruct is constituted by law, by the will of private persons expressed in acts inter
vivos or in a last will and testament, and by prescription.464

Usufruct may be constituted on the whole or a part of the fruits of the thing, in
favor of one more persons, simultaneously or successively, and in every case from or to a
certain day, purely or conditionally. It may also be constituted on a right, provided it is not
strictly personal or intransmissible.465

The rights and obligations of the usufructuary shall be those provided in the title
constituting the usufruct; in default of such title, or in case it is deficient, the provisions
contained in the two following Chapters shall be observed.466

The usufructuary shall be entitled to all the natural, industrial and civil fruits of the
property in usufruct. With respect to hidden treasure which may be found on the land or
tenement, he shall be considered a stranger.467

Natural or industrial fruits growing at the time the usufruct begins, belong to the
usufructuary.

Those growing at the time the usufruct terminates, belong to the owner.

In the preceding cases, the usufructuary, at the beginning of the usufruct, has no
obligation to refund to the owner any expenses incurred; but the owner shall be obliged to
reimburse at the termination of the usufruct, from the proceeds of the growing fruits, the
ordinary expenses of cultivation, for seed, and other similar expenses incurred by the
usufructuary.

The provisions of this article shall not prejudice the rights of third persons,
acquired either at the beginning or at the termination of the usufruct.468

462
Art. 561
463
Art. 562
464
Art. 563
465
Art. 564
466
Art. 565
467
Art. 566

84
 If the usufructuary has leased the lands or tenements given in usufruct, and the
usufruct should expire before the termination of the lease, he or his heirs and successors
shall receive only the proportionate share of the rent that must be paid by the lessee.469

Civil fruits are deemed to accrue daily, and belong to the usufructuary in
proportion to the time the usufruct may last.470

Whenever a usufruct is constituted on the right to receive a rent or periodical

pension, whether in money or in fruits, or in the interest on bonds or securities payable to
bearer, each payment due shall be considered as the proceeds or fruits of such right.

Whenever it consists in the enjoyment of benefits accruing from a participation in

any industrial or commercial enterprise, the date of the distribution of which is not fixed,
such benefits shall have the same character.

In either case they shall be distributed as civil fruits, and shall be applied in the
manner prescribed in the preceding article.471

The usufructuary shall have the right to enjoy any increase which the thing in
usufruct may acquire through accession, the servitudes established in its favor, and, in
general, all the benefits inherent therein.472

The usufructuary may personally enjoy the thing in usufruct, lease it to another, or
alienate his right of usufruct, even by a gratuitous title; but all the contracts he may enter
into as such usufructuary shall terminate upon the expiration of the usufruct, saving leases
of rural lands, which shall be considered as subsisting during the agricultural year.473

Whenever the usufruct includes things which, without being consumed, gradually
deteriorate through wear and tear, the usufructuary shall have the right to make use thereof
in accordance with the purpose for which they are intended, and shall not be obliged to
return them at the termination of the usufruct except in their condition at that time; but he
shall be obliged to indemnify the owner for any deterioration they may have suffered by
reason of his fraud or negligence.474

Whenever the usufruct includes things which cannot be used without being
consumed, the usufructuary shall have the right to make use of them under the obligation
of paying their appraised value at the termination of the usufruct, if they were appraised

468
Art. 567
469
Art. 568
470
Art. 569
471
Art. 570
472
Art. 571
473
Art. 572
474
Art. 573

85
when delivered. In case they were not appraised, he shall have the right to return at the
same quantity and quality, or pay their current price at the time the usufruct ceases.475

The usufructuary of fruit-bearing trees and shrubs may make use of the dead
trunks, and even of those cut off or uprooted by accident, under the obligation to replace
them with new plants.476

If in consequence of a calamity or extraordinary event, the trees or shrubs shall

have disappeared in such considerable number that it would not be possible or it would be
too burdensome to replace them, the usufructuary may leave the dead, fallen or uprooted
trunks at the disposal of the owner, and demand that the latter remove them and clear the
land.477

The usufructuary of woodland may enjoy all the benefits which it may produce
according to its nature.

If the woodland is a copse or consists of timber for building, the usufructuary may
do such ordinary cutting or felling as the owner was in the habit of doing, and in default of
this, he may do so in accordance with the custom of the place, as to the manner, amount
and season.

In any case the felling or cutting of trees shall be made in such manner as not to
prejudice the preservation of the land.

In nurseries, the usufructuary may make the necessary thinnings in order that the
remaining trees may properly grow.

With the exception of the provisions of the preceding paragraphs, the usufructuary
cannot cut down trees unless it be to restore or improve some of the things in usufruct,
and in such case shall first inform the owner of the necessity for the work.478

The usufructuary of an action to recover real property or a real right, or any

movable property, has the right to bring the action and to oblige the owner thereof to give
him the authority for this purpose and to furnish him whatever proof he may have. If in
consequence of the enforcement of the action he acquires the thing claimed, the usufruct
shall be limited to the fruits, the dominion remaining with the owner.479
The usufructuary may make on the property held in usufruct such useful
improvements or expenses for mere pleasure as he may deem proper, provided he does not
alter its form or substance; but he shall have no right to be indemnified therefor. He may,

475
Art. 574
476
Art. 575
477
Art. 576
478
Art. 577
479
Art. 578

86
however, remove such improvements, should it be possible to do so without damage to the
property.480

The usufructuary may set off the improvements he may have made on the property
against any damage to the same. 481

The owner of property the usufruct of which is held by another, may alienate it, but
he cannot alter its form or substance, or do anything thereon which may be prejudicial to
the usufructuary.482

The usufructuary of a part of a thing held in common shall exercise all the rights
pertaining to the owner thereof with respect to the administration and the collection of
fruits or interest. Should the co-ownership cease by reason of the division of the thing held
in common, the usufruct of the part allotted to the co-owner shall belong to the
usufructuary.483

The usufructuary, before entering upon the enjoyment of the property, is obliged:

(1) To make, after notice to the owner or his legitimate representative, an inventory
of all the property, which shall contain an appraisal of the movables and a description of
the condition of the immovables;

(2) To give security, binding himself to fulfill the obligations imposed upon him in
accordance with this Chapter.484

The provisions of No. 2 of the preceding article shall not apply to the donor who
has reserved the usufruct of the property donated, or to the parents who are usufructuaries
of their children's property, except when the parents contract a second marriage.485

The usufructuary, whatever may be the title of the usufruct, may be excused from
the obligation of making an inventory or of giving security, when no one will be injured
thereby.486

Should the usufructuary fail to give security in the cases in which he is bound to
give it, the owner may demand that the immovables be placed under administration, that
the movables be sold, that the public bonds, instruments of credit payable to order or to
bearer be converted into registered certificates or deposited in a bank or public institution,

480
Art. 579
481
Art. 580
482
Art. 581
483
Art. 582
484
Art. 583
485
Art. 584
486
Art. 585

87
and that the capital or sums in cash and the proceeds of the sale of the movable property
be invested in safe securities.

The interest on the proceeds of the sale of the movables and that on public
securities and bonds, and the proceeds of the property placed under administration, shall
belong to the usufructuary.

Furthermore, the owner may, if he so prefers, until the usufructuary gives security
or is excused from so doing, retain in his possession the property in usufruct as
administrator, subject to the obligation to deliver to the usufructuary the net proceeds
thereof, after deducting the sums which may be agreed upon or judicially allowed him for
such administration.487

If the usufructuary who has not given security claims, by virtue of a promise under
oath, the delivery of the furniture necessary for his use, and that he and his family be
allowed to live in a house included in the usufruct, the court may grant this petition, after
due consideration of the facts of the case.

The same rule shall be observed with respect to implements, tools and other
movable property necessary for an industry or vocation in which he is engaged.

If the owner does not wish that certain articles be sold because of their artistic
worth or because they have a sentimental value, he may demand their delivery to him upon
his giving security for the payment of the legal interest on their appraised value.488

After the security has been given by the usufructuary, he shall have a right to all the
proceeds and benefits from the day on which, in accordance with the title constituting the
usufruct, he should have commenced to receive them.489

The usufructuary shall take care of the things given in usufruct as a good father of
a family.490

A usufructuary who alienates or leases his right of usufruct shall answer for any
damage which the things in usufruct may suffer through the fault or negligence of the
person who substitutes him.491

If the usufruct be constituted on a flock or herd of livestock, the usufructuary shall

be obliged to replace with the young thereof the animals that die each year from natural
causes, or are lost due to the rapacity of beasts of prey.

487
Art. 586
488
Art. 587
489
Art. 588
490
Art. 589
491
Art. 590

88
 If the animals on which the usufruct is constituted should all perish, without the
fault of the usufructuary, on account of some contagious disease or any other uncommon
event, the usufructuary shall fulfill his obligation by delivering to the owner the remains
which may have been saved from the misfortune.

Should the herd or flock perish in part, also by accident and without the fault of the
usufructuary, the usufruct shall continue on the part saved.
Should the usufruct be on sterile animals, it shall be considered, with respect to its effects,
as though constituted on fungible things.492

The usufructuary is obliged to make the ordinary repairs needed by the thing given
in usufruct.

By ordinary repairs are understood such as are required by the wear and tear due to
the natural use of the thing and are indispensable for its preservation. Should the
usufructuary fail to make them after demand by the owner, the latter may make them at the
expense of the usufructuary.493

Extraordinary repairs shall be at the expense of the owner. The usufructuary is

obliged to notify the owner when the need for such repairs is urgent.494

If the owner should make the extraordinary repairs, he shall have a right to
demand of the usufructuary the legal interest on the amount expended for the time that the
usufruct lasts.

Should he not make them when they are indispensable for the preservation of the
thing, the usufructuary may make them; but he shall have a right to demand of the owner,
at the termination of the usufruct, the increase in value which the immovable may have
acquired by reason of the repairs.495

The owner may construct any works and make any improvements of which the
immovable in usufruct is susceptible, or make new plantings thereon if it be rural, provided
that such acts do not cause a diminution in the value of the usufruct or prejudice the right
of the usufructuary.496

The payment of annual charges and taxes and of those considered as a lien on the
fruits, shall be at the expense of the usufructuary for all the time that the usufruct lasts.497

492
Art. 591
493
Art. 592
494
Art. 593
495
Art. 594
496
Art. 595
497
Art. 596

89
 The taxes which, during the usufruct, may be imposed directly on the capital, shall
be at the expense of the owner.

If the latter has paid them, the usufructuary shall pay him the proper interest on the
sums which may have been paid in that character; and, if the said sums have been advanced
by the usufructuary, he shall recover the amount thereof at the termination of the
usufruct.498

If the usufruct be constituted on the whole of a patrimony, and if at the time of its
constitution the owner has debts, the provisions of Articles 758 and 759 relating to
donations shall be applied, both with respect to the maintenance of the usufruct and to the
obligation of the usufructuary to pay such debts.

The same rule shall be applied in case the owner is obliged, at the time the usufruct
is constituted, to make periodical payments, even if there should be no known capital.499

The usufructuary may claim any matured credits which form a part of the usufruct
if he has given or gives the proper security. If he has been excused from giving security or
has been able to give it, or if that given is not sufficient, he shall need the authorization of
the owner, or of the court in default thereof, to collect such credits.

The usufructuary who has given security may use the capital he has collected in any
manner he may deem proper. The usufructuary who has not given security shall invest the
said capital at interest upon agreement with the owner; in default of such agreement, with
judicial authorization; and, in every case, with security sufficient to preserve the integrity of
the capital in usufruct.500

The usufructuary of a mortgaged immovable shall not be obliged to pay the debt
for the security of which the mortgage was constituted.

Should the immovable be attached or sold judicially for the payment of the debt,
the owner shall be liable to the usufructuary for whatever the latter may lose by reason
thereof.501

The usufructuary shall be obliged to notify the owner of any act of a third person,
of which he may have knowledge, that may be prejudicial to the rights of ownership, and
he shall be liable should he not do so, for damages, as if they had been caused through his
own fault.502

498
Art. 597
499
Art. 598
500
Art. 599
501
Art. 600
502
Art. 601

90
 The expenses, costs and liabilities in suits brought with regard to the usufruct shall
be borne by the usufructuary.503

Usufruct is extinguished:

(1) By the death of the usufructuary, unless a contrary intention clearly appears;

(2) By the expiration of the period for which it was constituted, or by the
fulfillment of any resolutory condition provided in the title creating the usufruct;

(3) By merger of the usufruct and ownership in the same person;

(4) By renunciation of the usufructuary;

(5) By the total loss of the thing in usufruct;

(6) By the termination of the right of the person constituting the usufruct;

(7) By prescription.504

If the thing given in usufruct should be lost only in part, the right shall continue on
the remaining part.505

Usufruct cannot be constituted in favor of a town, corporation, or association for

more than fifty years. If it has been constituted, and before the expiration of such period
the town is abandoned, or the corporation or association is dissolved, the usufruct shall be
extinguished by reason thereof.506

A usufruct granted for the time that may elapse before a third person attains a
certain age, shall subsist for the number of years specified, even if the third person should
die before the period expires, unless such usufruct has been expressly granted only in
consideration of the existence of such person.507

If the usufruct is constituted on immovable property of which a building forms

part, and the latter should be destroyed in any manner whatsoever, the usufructuary shall
have a right to make use of the land and the materials.

The same rule shall be applied if the usufruct is constituted on a building only and
the same should be destroyed. But in such a case, if the owner should wish to construct

503
Art. 602
504
Art. 603
505
Art. 604
506
Art. 605
507
Art. 606

91
another building, he shall have a right to occupy the land and to make use of the materials,
being obliged to pay to the usufructuary, during the continuance of the usufruct, the
interest upon the sum equivalent to the value of the land and of the materials.508

If the usufructuary shares with the owner the insurance of the tenement given in
usufruct, the former shall, in case of loss, continue in the enjoyment of the new building,
should one be constructed, or shall receive the interest on the insurance indemnity if the
owner does not wish to rebuild.

Should the usufructuary have refused to contribute to the insurance, the owner
insuring the tenement alone, the latter shall receive the full amount of the insurance
indemnity in case of loss, saving always the right granted to the usufructuary in the
preceding article.509

Should the thing in usufruct be expropriated for public use, the owner shall be
obliged either to replace it with another thing of the same value and of similar conditions,
or to pay the usufructuary the legal interest on the amount of the indemnity for the whole
period of the usufruct. If the owner chooses the latter alternative, he shall give security for
the payment of the interest.510

A usufruct is not extinguished by bad use of the thing in usufruct; but if the abuse
should cause considerable injury to the owner, the latter may demand that the thing be
delivered to him, binding himself to pay annually to the usufructuary the net proceeds of
the same, after deducting the expenses and the compensation which may be allowed him
for its administration.511

A usufruct constituted in favor of several persons living at the time of its

constitution shall not be extinguished until death of the last survivor.512

Upon the termination of the usufruct, the thing in usufruct shall be delivered to the
owner, without prejudice to the right of retention pertaining to the usufructuary or his
heirs for taxes and extraordinary expenses which should be reimbursed. After the delivery
has been made, the security or mortgage shall be cancelled.513

508
Art. 607
509
Art. 608
510
Art. 609
511
Art. 610
512
Art. 611
513
Art. 612.

92
IX. Easements

An easement or servitude is an encumbrance imposed upon an immovable for the

benefit of another immovable belonging to a different owner.

The immovable in favor of which the easement is established is called the

dominant estate; that which is subject thereto, the servient estate.514

Servitudes may also be established for the benefit of a community, or of one or

more persons to whom the encumbered estate does not belong.515

Easements may be continuous or discontinuous, apparent or non-apparent.

Continuous easements are those the use of which is or may be incessant, without
the intervention of any act of man.

Discontinuous easements are those which are used at intervals and depend upon
the acts of man.

Apparent easements are those which are made known and are continually kept in
view by external signs that reveal the use and enjoyment of the same.

Nonapparent easements are those which show no external indication of their

existence.516

Easements are also positive or negative.

A positive easement is one which imposes upon the owner of the servient estate
the obligation of allowing something to be done or of doing it himself, and a negative
easement, that which prohibits the owner of the servient estate from doing something
which he could lawfully do if the easement did not exist.517

Easements are inseparable from the estate to which they actively or passively
518
belong.

Easements are indivisible. If the servient estate is divided between two or more
persons, the easement is not modified, and each of them must bear it on the part which
corresponds to him.

514
Art. 613
515
Art. 614
516
Art. 615
517
Art. 616
518
Art. 617

93
 If it is the dominant estate that is divided between two or more persons, each of
them may use the easement in its entirety, without changing the place of its use, or making
it more burdensome in any other way.519

Easements are established either by law or by the will of the owners. The former
are called legal and the latter voluntary easements.520

Continuous and apparent easements are acquired either by virtue of a title or by

prescription of ten years.521

In order to acquire by prescription the easements referred to in the preceding

article, the time of possession shall be computed thus: in positive easements, from the day
on which the owner of the dominant estate, or the person who may have made use of the
easement, commenced to exercise it upon the servient estate; and in negative easements,
from the day on which the owner of the dominant estate forbade, by an instrument
acknowledged before a notary public, the owner of the servient estate, from executing an
act which would be lawful without the easement.522

Continuous nonapparent easements, and discontinuous ones, whether apparent or

not, may be acquired only by virtue of a title.523

The absence of a document or proof showing the origin of an easement which

cannot be acquired by prescription may be cured by a deed of recognition by the owner of
the servient estate or by a final judgment.524

The existence of an apparent sign of easement between two estates, established or

maintained by the owner of both, shall be considered, should either of them be alienated,
as a title in order that the easement may continue actively and passively, unless, at the time
the ownership of the two estates is divided, the contrary should be provided in the title of
conveyance of either of them, or the sign aforesaid should be removed before the
execution of the deed. This provision shall also apply in case of the division of a thing
owned in common by two or more persons.525

Upon the establishment of an easement, all the rights necessary for its use are
considered granted.526

519
Art. 618
520
Art. 619
521
Art. 620
522
Art. 621
523
Art. 622
524
Art. 623
525
Art. 624
526
Art. 625

94
 The owner of the dominant estate cannot use the easement except for the benefit
of the immovable originally contemplated. Neither can he exercise the easement in any
other manner than that previously established.527

Easements are extinguished:

(1) By merger in the same person of the ownership of the dominant and servient
estates;

(2) By nonuser for ten years; with respect to discontinuous easements, this period
shall be computed from the day on which they ceased to be used; and, with respect to
continuous easements, from the day on which an act contrary to the same took place;

(3) When either or both of the estates fall into such condition that the easement
cannot be used; but it shall revive if the subsequent condition of the estates or either of
them should again permit its use, unless when the use becomes possible, sufficient time for
prescription has elapsed, in accordance with the provisions of the preceding number;

(4) By the expiration of the term or the fulfillment of the condition, if the easement
is temporary or conditional;

(5) By the renunciation of the owner of the dominant estate;

(6) By the redemption agreed upon between the owners of the dominant and
servient estates.528

The form or manner of using the easement may prescribe as the easement itself,
and in the same way.529

If the dominant estate belongs to several persons in common, the use of the
easement by any one of them prevents prescription with respect to the others.530

Easements imposed by law have for their object either public use or the interest of
private persons.531

All matters concerning easements established for public or communal use shall be
governed by the special laws and regulations relating thereto, and, in the absence thereof,
by the provisions of this Title.532

527
Art. 626
528
Art. 631
529
Art. 632
530
Art. 633
531
Art. 634
532
Art. 635

95
 Easements established by law in the interest of private persons or for private use
shall be governed by the provisions of this Title, without prejudice to the provisions of
general or local laws and ordinances for the general welfare.

These easements may be modified by agreement of the interested parties, whenever

the law does not prohibit it or no injury is suffered by a third person.533

Lower estates are obliged to receive the waters which naturally and without the
intervention of man descend from the higher estates, as well as the stones or earth which
they carry with them.

The owner of the lower estate cannot construct works which will impede this
easement; neither can the owner of the higher estate make works which will increase the
burden.534

The banks of rivers and streams, even in case they are of private ownership, are
subject throughout their entire length and within a zone of three meters along their
margins, to the easement of public use in the general interest of navigation, floatage, fishing
and salvage.

Estates adjoining the banks of navigable or floatable rivers are, furthermore,

subject to the easement of towpath for the exclusive service of river navigation and
floatage.

If it be necessary for such purpose to occupy lands of private ownership, the

proper indemnity shall first be paid.535

Whenever for the diversion or taking of water from a river or brook, or for the use
of any other continuous or discontinuous stream, it should be necessary to build a dam,
and the person who is to construct it is not the owner of the banks, or lands which must
support it, he may establish the easement of abutment of a dam, after payment of the
proper indemnity.536

Compulsory easements for drawing water or for watering animals can be imposed
only for reasons of public use in favor of a town or village, after payment of the proper
indemnity.537

Easements for drawing water and for watering animals carry with them the
obligation of the owners of the servient estates to allow passage to persons and animals to

533
Art. 636
534
Art. 637
535
Art. 638
536
Art. 639
537
Art. 640

96
the place where such easements are to be used, and the indemnity shall include this
service.538

Any person who may wish to use upon his own estate any water of which he can
dispose shall have the right to make it flow through the intervening estates, with the
obligation to indemnify their owners, as well as the owners of the lower estates upon which
the waters may filter or descend.539

One desiring to make use of the right granted in the preceding article is obliged:

(1) To prove that he can dispose of the water and that it is sufficient for the use for
which it is intended;

(2) To show that the proposed right of way is the most convenient and the least
onerous to third persons;

(3) To indemnify the owner of the servient estate in the manner determined by the
laws and regulations.540

The easement of aqueduct for private interest cannot be imposed on buildings,

courtyards, annexes, or outhouses, or on orchards or gardens already existing.541

The easement of aqueduct does not prevent the owner of the servient estate from
closing or fencing it, or from building over the aqueduct in such manner as not to cause
the latter any damage, or render necessary repairs and cleanings impossible.542

For legal purposes, the easement of aqueduct shall be considered as continuous and
apparent, even though the flow of the water may not be continuous, or its use depends
upon the needs of the dominant estate, or upon a schedule of alternate days or hours.543

One who for the purpose of irrigating or improving his estate, has to construct a
stop lock or sluice gate in the bed of the stream from which the water is to be taken, may
demand that the owners of the banks permit its construction, after payment of damages,
including those caused by the new easement to such owners and to the other irrigators.544

The establishment, extent, form and conditions of the servitudes of waters, to

which this section refers, shall be governed by the special laws relating thereto insofar as no

538
Art. 641
539
Art. 642
540
Art. 643
541
Art. 644
542
Art. 645
543
Art. 646.
544
Art. 647

97
provision therefor is made in this Code.545

The owner, or any person who by virtue of a real right may cultivate or use any
immovable, which is surrounded by other immovables pertaining to other persons and
without adequate outlet to a public highway, is entitled to demand a right of way through
the neighboring estates, after payment of the proper indemnity.

Should this easement be established in such a manner that its use may be
continuous for all the needs of the dominant estate, establishing a permanent passage, the
indemnity shall consist of the value of the land occupied and the amount of the damage
caused to the servient estate.

In case the right of way is limited to the necessary passage for the cultivation of the
estate surrounded by others and for the gathering of its crops through the servient estate
without a permanent way, the indemnity shall consist in the payment of the damage caused
by such encumbrance.

This easement is not compulsory if the isolation of the immovable is due to the
proprietor's own acts.546

The easement of right of way shall be established at the point least prejudicial to
the servient estate, and, insofar as consistent with this rule, where the distance from the
dominant estate to a public highway may be the shortest.547

The width of the easement of right of way shall be that which is sufficient for the
needs of the dominant estate, and may accordingly be changed from time to time.548

Whenever a piece of land acquired by sale, exchange or partition, is surrounded by

other estates of the vendor, exchanger, or co-owner, he shall be obliged to grant a right of
way without indemnity.

In case of a simple donation, the donor shall be indemnified by the donee for the
establishment of the right of way.549

In the case of the preceding article, if it is the land of the grantor that becomes
isolated, he may demand a right of way after paying a indemnity. However, the donor shall
not be liable for indemnity.550

545
Art. 648
546
Art. 649
547
Art. 650
548
Art. 651
549
Art. 652
550
Art. 653

98
 If the right of way is permanent, the necessary repairs shall be made by the owner
of the dominant estate. A proportionate share of the taxes shall be reimbursed by said
owner to the proprietor of the servient estate.551

If the right of way granted to a surrounded estate ceases to be necessary because its
owner has joined it to another abutting on a public road, the owner of the servient estate
may demand that the easement be extinguished, returning what he may have received by
way of indemnity. The interest on the indemnity shall be deemed to be in payment of rent
for the use of the easement.

The same rule shall be applied in case a new road is opened giving access to the
isolated estate.

In both cases, the public highway must substantially meet the needs of the
dominant estate in order that the easement may be extinguished.552

If it be indispensable for the construction, repair, improvement, alteration or

beautification of a building, to carry materials through the estate of another, or to raise
therein scaffolding or other objects necessary for the work, the owner of such estate shall
be obliged to permit the act, after receiving payment of the proper indemnity for the
damage caused him.553

Easements of the right of way for the passage of livestock known as animal path,
animal trail or any other, and those for watering places, resting places and animal folds,
shall be governed by the ordinances and regulations relating thereto, and, in the absence
thereof, by the usages and customs of the place.

Without prejudice to rights legally acquired, the animal path shall not exceed in any
case the width of 75 meters, and the animal trail that of 37 meters and 50 centimeters.

Whenever it is necessary to establish a compulsory easement of the right of way or

for a watering place for animals, the provisions of this Section and those of Articles 640
and 641 shall be observed. In this case the width shall not exceed 10 meters.554

The easement of party wall shall be governed by the provisions of this Title, by the
local ordinances and customs insofar as they do not conflict with the same, and by the
rules of co-ownership.555

551
Art. 654
552
Art. 655
553
Art. 656
554
Art. 657
555
Art. 658

99
 The existence of an easement of party wall is presumed, unless there is a title, or
exterior sign, or proof to the contrary:

(1) In dividing walls of adjoining buildings up to the point of common elevation;

(2) In dividing walls of gardens or yards situated in cities, towns, or in rural

communities;

(3) In fences, walls and live hedges dividing rural lands.556

It is understood that there is an exterior sign, contrary to the easement of party

wall:

(1) Whenever in the dividing wall of buildings there is a window or opening;

(2) Whenever the dividing wall is, on one side, straight and plumb on all its
facement, and on the other, it has similar conditions on the upper part, but the lower part
slants or projects outward;

(3) Whenever the entire wall is built within the boundaries of one of the estates;

(4) Whenever the dividing wall bears the burden of the binding beams, floors and
roof frame of one of the buildings, but not those of the others;

(5) Whenever the dividing wall between courtyards, gardens, and tenements is
constructed in such a way that the coping sheds the water upon only one of the estates;

(6) Whenever the dividing wall, being built of masonry, has stepping stones, which
at certain intervals project from the surface on one side only, but not on the other;

(7) Whenever lands inclosed by fences or live hedges adjoin others which are not
inclosed.

In all these cases, the ownership of the walls, fences or hedges shall be deemed to
belong exclusively to the owner of the property or tenement which has in its favor the
presumption based on any one of these signs.557

Ditches or drains opened between two estates are also presumed as common to
both, if there is no title or sign showing the contrary.

556
Art. 659
557
Art. 660

100
 There is a sign contrary to the part-ownership whenever the earth or dirt removed
to open the ditch or to clean it is only on one side thereof, in which case the ownership of
the ditch shall belong exclusively to the owner of the land having this exterior sign in its
favor.558

The cost of repairs and construction of party walls and the maintenance of fences,
live hedges, ditches, and drains owned in common, shall be borne by all the owners of the
lands or tenements having the party wall in their favor, in proportion to the right of each.

Nevertheless, any owner may exempt himself from contributing to this charge by
renouncing his part-ownership, except when the party wall supports a building belonging
to him.559

If the owner of a building, supported by a party wall desires to demolish the

building, he may also renounce his part-ownership of the wall, but the cost of all repairs
and work necessary to prevent any damage which the demolition may cause to the party
wall, on this occasion only, shall be borne by him.560

Every owner may increase the height of the party wall, doing at his own expense
and paying for any damage which may be caused by the work, even though such damage
be temporary.

The expenses of maintaining the wall in the part newly raised or deepened at its
foundation shall also be paid for by him; and, in addition, the indemnity for the increased
expenses which may be necessary for the preservation of the party wall by reason of the
greater height or depth which has been given it.

If the party wall cannot bear the increased height, the owner desiring to raise it shall
be obliged to reconstruct it at his own expense and, if for this purpose it be necessary to
make it thicker, he shall give the space required from his own land.561

The other owners who have not contributed in giving increased height, depth or
thickness to the wall may, nevertheless, acquire the right of part-ownership therein, by
paying proportionally the value of the work at the time of the acquisition and of the land
used for its increased thickness.562

Every part-owner of a party wall may use it in proportion to the right he may have
in the co-ownership, without interfering with the common and respective uses by the other

558
Art. 661
559
Art. 662
560
Art. 663
561
Art. 664
562
Art. 665

101
co-owners.563

No part-owner may, without the consent of the others, open through the party wall
any window or aperture of any kind.564

The period of prescription for the acquisition of an easement of light and view shall
be counted:

(1) From the time of the opening of the window, if it is through a party wall; or

(2) From the time of the formal prohibition upon the proprietor of the adjoining
land or tenement, if the window is through a wall on the dominant estate.565

When the distances in Article 670566 are not observed, the owner of a wall which is
not party wall, adjoining a tenement or piece of land belonging to another, can make in it
openings to admit light at the height of the ceiling joints or immediately under the ceiling,
and of the size of thirty centimeters square, and, in every case, with an iron grating
imbedded in the wall and with a wire screen.

Nevertheless, the owner of the tenement or property adjoining the wall in which
the openings are made can close them should he acquire part-ownership thereof, if there
be no stipulation to the contrary.

He can also obstruct them by constructing a building on his land or by raising a

wall thereon contiguous to that having such openings, unless an easement of light has been
acquired.567

No windows, apertures, balconies, or other similar projections which afford a

direct view upon or towards an adjoining land or tenement can be made, without leaving a
distance of two meters between the wall in which they are made and such contiguous
property.

Neither can side or oblique views upon or towards such conterminous property be
had, unless there be a distance of sixty centimeters.

The nonobservance of these distances does not give rise to prescription.568

563
Art. 666
564
Art. 667
565
Art. 668
566
infra
567
Art. 669.
568
Art. 670

102
 The distance referred to in the preceding article shall be measured in cases of direct
views from the outer line of the wall when the openings do not project, from the outer line
of the latter when they do, and in cases of oblique view from the dividing line between the
two properties.569

The provisions of Article 670 are not applicable to buildings separated by a public
way or alley, which is not less than three meters wide, subject to special regulations and
local ordinances.570

Whenever by any title a right has been acquired to have direct views, balconies or
belvederes overlooking an adjoining property, the owner of the servient estate cannot build
thereon at less than a distance of three meters to be measured in the manner provided in
Article 671. Any stipulation permitting distances less than those prescribed in Article 670 is
void.571

Every owner of a tenement or piece of land may establish thereon the easements
which he may deem suitable, and in the manner and form which he may deem best,
provided he does not contravene the laws, public policy or public order.572

The owner of a tenement or piece of land, the usufruct of which belongs to

another, may impose thereon, without the consent of the usufructuary, any servitudes
which will not injure the right of usufruct.573

Whenever the naked ownership of a tenement or piece of land belongs to one

person and the beneficial ownership to another, no perpetual voluntary easement may be
established thereon without the consent of both owners.574

In order to impose an easement on an undivided tenement, or piece of land, the

consent of all the co-owners shall be required.

The consent given by some only, must be held in abeyance until the last one of all
the co-owners shall have expressed his conformity.

But the consent given by one of the co-owners separately from the others shall
bind the grantor and his successors not to prevent the exercise of the right granted.575

569
Art. 671
570
Art. 672
571
Art. 673
572
Art. 688
573
Art. 689
574
Art. 690
575
Art. 691

103
 The title and, in a proper case, the possession of an easement acquired by
prescription shall determine the rights of the dominant estate and the obligations of the
servient estate. In default thereof, the easement shall be governed by such provisions of
this Title as are applicable thereto.576

If the owner of the servient estate should have bound himself, upon the
establishment of the easement, to bear the cost of the work required for the use and
preservation thereof, he may free himself from this obligation by renouncing his property
to the owner of the dominant estate.577

X. Nuisance

A nuisance is any act, omission, establishment, business, condition of property, or

anything else which:

(1) Injures or endangers the health or safety of others; or

(2) Annoys or offends the senses; or

(3) Shocks, defies or disregards decency or morality; or

(4) Obstructs or interferes with the free passage of any public highway or street, or
any body of water; or

(5) Hinders or impairs the use of property.578

Nuisance is either public or private. A public nuisance affects a community or

neighborhood or any considerable number of persons, although the extent of the
annoyance, danger or damage upon individuals may be unequal. A private nuisance is one
that is not included in the foregoing definition.579

Every successive owner or possessor of property who fails or refuses to abate a

nuisance in that property started by a former owner or possessor is liable therefor in the
same manner as the one who created it.580

The abatement of a nuisance does not preclude the right of any person injured to
recover damages for its past existence.581

576
Art. 692
577
Art. 693
578
Art. 694
579
Art. 695.
580
Art. 696
581
Art. 697

104
 Lapse of time cannot legalize any nuisance, whether public or private.582

The remedies against a public nuisance are:

(1) A prosecution under the Penal Code or any local ordinance: or

(2) A civil action; or
(3) Abatement, without judicial proceedings.583

The district health officer shall take care that one or all of the remedies against a
public nuisance are availed of.584

If a civil action is brought by reason of the maintenance of a public nuisance, such

action shall be commenced by the city or municipal mayor.585

The district health officer shall determine whether or not abatement, without
judicial proceedings, is the best remedy against a public nuisance.586

A private person may file an action on account of a public nuisance, if it is specially

injurious to himself.587

Any private person may abate a public nuisance which is specially injurious to him
by removing, or if necessary, by destroying the thing which constitutes the same, without
committing a breach of the peace, or doing unnecessary injury. But it is necessary:

(1) That demand be first made upon the owner or possessor of the property to
abate the nuisance;

(2) That such demand has been rejected;

(3) That the abatement be approved by the district health officer and executed with
the assistance of the local police; and

(4) That the value of the destruction does not exceed three thousand pesos.588

582
Art. 698
583
Art. 699
584
Art. 700
585
Art. 701
586
Art. 702
587
Art. 703
588
Art. 704

105
 The remedies against a private nuisance are:

(1) A civil action; or

(2) Abatement, without judicial proceedings.589

Any person injured by a private nuisance may abate it by removing, or if necessary,

by destroying the thing which constitutes the nuisance, without committing a breach of the
peace or doing unnecessary injury. However, it is indispensable that the procedure for
extrajudicial abatement of a public nuisance by a private person be followed.590

A private person or a public official extrajudicially abating a nuisance shall be liable

for damages:

(1) If he causes unnecessary injury; or

(2) If an alleged nuisance is later declared by the courts to be not a real nuisance. 591

XI. Modes of Acquiring Ownership

Ownership is acquired by occupation and by intellectual creation.

Ownership and other real rights over property are acquired and transmitted by law,
by donation, by testate and intestate succession, and in consequence of certain contracts,
by tradition.

They may also be acquired by means of prescription.592

The ownership of a piece of land cannot be acquired by occupation.593

Things appropriable by nature which are without an owner594 are acquired by

occupation.595

589
Art. 705
590
Art. 706
591
Art. 707
592
Art. 712
593
Art. 714
594
such as animals that are the object of hunting and fishing, hidden treasure and abandoned movables
595
Art. 713

106
PRESCRIPTION

I. Definition

By prescription, one acquires ownership and other real rights through the lapse of
time in the manner and under the conditions laid down by law.

In the same way, rights and conditions are lost by prescription.596

II. No prescription applicable

Movables possessed through a crime can never be acquired through prescription by

the offender.597

III. Prescription or limitation of actions

Actions prescribe by the mere lapse of time fixed by law.598

Actions to recover movables shall prescribe eight years from the time the
possession thereof is lost, unless the possessor has acquired the ownership by prescription
for a less period, according to Articles 1132, and without prejudice to the provisions of
Articles 559, 1505, and 1133.599

Real actions over immovables prescribe after thirty years.

This provision is without prejudice to what is established for the acquisition of

ownership and other real rights by prescription.600

A mortgage action prescribes after ten years.601

The following rights, among others specified elsewhere in this Code, are not
extinguished by prescription:

(1) To demand a right of way, regulated in Article 649;

(2) To bring an action to abate a public or private nuisance.602

596
Art. 1106
597
Art. 1133
598
Art. 1139
599
Art. 1140
600
Art. 1141
601
Art. 1142
602
Art. 1143

107
 The following actions must be brought within ten years from the time the right of
action accrues:

(1) Upon a written contract;

(2) Upon an obligation created by law;
(3) Upon a judgment.603

The following actions must be commenced within six years:

(1) Upon an oral contract;

(2) Upon a quasi-contract.604

The following actions must be instituted within four years:

(1) Upon an injury to the rights of the plaintiff;

(2) Upon a quasi-delict;

However, when the action arises from or out of any act, activity, or conduct of any
public officer involving the exercise of powers or authority arising from Martial Law
including the arrest, detention and/or trial of the plaintiff, the same must be brought
within one (1) year.605

The following actions must be filed within one year:

(1) For forcible entry and detainer;

(2) For defamation.606

The limitations of action mentioned in Articles 1140 to 1142, and 1144 to 1147 607
are without prejudice to those specified in other parts of this Code, in the Code of
Commerce, and in special laws.608

All other actions whose periods are not fixed in this Code or in other laws must be
brought within five years from the time the right of action accrues.609

The time for prescription for all kinds of actions, when there is no special provision
which ordains otherwise, shall be counted from the day they may be brought.610

603
Art. 1144
604
Art. 1145
605
Art. 1146, as amended by PD No. 1755, Dec. 24, 1980
606
Art. 1147
607
supra
608
Art. 1148
609
Art. 1149.
610
Art. 1150

108
 The time for the prescription of actions which have for their object the
enforcement of obligations to pay principal with interest or annuity runs from the last
payment of the annuity or of the interest.611

The period for prescription of actions to demand the fulfillment of obligation

declared by a judgment commences from the time the judgment became final.612

The period for prescription of actions to demand accounting runs from the day the
persons who should render the same cease in their functions.

The period for the action arising from the result of the accounting runs from the
date when said result was recognized by agreement of the interested parties.613

The period during which the obligee was prevented by a fortuitous event from
enforcing his right is not reckoned against him.614

The prescription of actions is interrupted when they are filed before the court,
when there is a written extrajudicial demand by the creditors, and when there is any written
acknowledgment of the debt by the debtor.615

OBLIGATIONS

I. Definition

A juridical necessity to give, to do or not to do,616 one impressed with the character
of enforceability.

II. Elements of an Obligation

1. Active subject617 The possessor of a right; he in

whose favor the obligation is
constituted;

2. Passive subject618 He who has the duty of giving,

611
Art. 1151
612
Art. 1152
613
Art. 1153
614
Art. 1154
615
Art. 1155
616
Art. 1156
617
obligee or creditor
618
obligor or debtor

109
 doing or not doing;

3. Object or prestation619 May consist of giving a thing, or

doing or not doing a certain
act620and

4. Efficient cause621 The reason why the obligation

exists

III. Different Kinds of Prestations

1. To give Consists in the delivery of a movable or an

immovable thing, in order to create a real
right or for the use of the recipient or for
its simple possession or in order to return
to its owner

2. To do All kinds of work or services, whether

mental or physical

3. Not to do Consists in abstaining from some act,

includes not to give, both being negative
obligations

619
the subject matter of the obligation
620
Requisites:
1. it must be licit
2. it must be possible, physically & juridically
3. it must be determinate or determinable
4. it must have a possible equivalent in money
621
vinculum or juridical tie

110
IV. Classification of Obligations

1. Criteria of demandability: a. Pure - one w/c is not subject to a

condition or a term.

b. Conditional - the acquisition of

rights, as well as the extinguishment
or loss of those already acquired,
shall depend upon the happening of
the event which constitutes the
condition.622

c. W/ a term623 -

2. Plurality of objects a. Single

3. Plurality of subjects b. Alternative - where the debtor

must perform any of the
prestations624

c. Facultative - where only one thing

is due but the debtor has reserved
the right to substitute it w/
another625

d. Joint - one in w/c each of the

debtors is liable only for a
proportionate part of the debt or

622
Art. 1181
A past thing can never be a condition. A condition is always future and uncertain.
Past event unknown to the parties.-- It is really the knowledge of the event w/c constitutes the
future. It is the knowledge w/c is future and uncertain.
Effect of Impossible Condition.-- It annuls the obligation w/c depends upon them. The entire
juridical tie is tainted by the impossible condition.
623
see Reference
624
The characteristic of alternative obligations is that, several objects being due, the fulfillment of one is
sufficient (Tolentino)
625
Art. 1206

111
 each creditor is entitled only to a
proportionate part of the credit.626

e. Solidary - one in w/c the debtor

is liable for the entire obligation or
each creditor is entitled to demand
the whole obligation. There is only
one obligation is a solidary
obligation.

4. Performance a. Divisible - one susceptible of

partial performance.

b. Indivisible - one that must be

performed in one act.627

5. Sanctions for Breach a. Simple

626
there are as many obligations as there are debtors multiplied by the number of creditors.
Effects of Joint Liability:
1. The demand by one creditor upon one debtor, produces the effects of default only w/ respect to
the creditor who demanded and the debtor on whom the demand was made, but not w/ respect to the
others;
2. The interruption of prescription by the judicial demand of one creditor upon a debtor, does not
benefit the other creditors nor interrupt the prescription as to other debtors. On the same principle, a
partial payment or acknowledgement made by one of several joint debtors does not stop the running of
the statute of limitations as to the others;
3. The vices of each obligation arising from the personal defect of a particular debtor or creditor does
not affect the obligation or rights of the others;
4. The insolvency of a debtor does not increase the responsibility of his co-debtors, nor does it
authorize a creditor to demand anything from his co-creditors;
5. In the joint divisible obligation, the defense of res judicata is not extended from one debtor to
another. (Manresa.)
627
General rule: Obligation is indivisible w/c means that it has to be performed in one act singly. Why?
Bec. the law provides so: Unless there is an express stipulation to that effect, the creditor cannot be
compelled partially to receive the prestations in which the obligation consists. Neither may the debtor
be required to make partial payments. xxx (Art. 1248, par. 1.)
Three Exceptions to the Rule on Indivisibility:
1. When the parties so provide. (Art. 1248, par. 1.)
2. When the nature of the obligation necessarily entails performance in parts.
3. Where the law provides otherwise.

112
 b. W/ a penal clause - an accessory
undertaking to assume greater
liability in case of breach.628

V. Sources of Obligations

Obligations arise from:

(1) Law;
(2) Contracts;
(3) Quasi-contracts;
(4) Acts or omissions punished by law; and
(5) Quasi-delicts.629

A single act or omission can give rise to different causes of action:

It is a source of obligation because of the provision in Article 100 of the Revised

code that every person criminally liable is also civilly liable.630

Natural Obligations:631

They are real obligations to which the law denies an action, but which the debtor
may perform voluntarily.632

628
The purpose is to strengthen the coercive force of the obligation. When a penal clause is present,
damages do not have to be proved.
629
Art. 1157.
630
Nolledo, Jose N., The Philippine Law on Obligations and Contracts Explained, 1980 Ed., p. 2
631
a. Based not on positive law but on equity and natural law
b. Do not grant such right of action to enforce their performance
632
Examples of natural obligations enumerated under the Civil Code:
1. Performance after the civil obligation has prescribed;
2. Reimbursement of a third person for a debt that has prescribed;
3. Restitution by minor after annulment of contract;
4. Delivery by minor of money or fungible thing in fulfillment of obligation;
5. Performance after action to enforce civil obligation has failed;
6. Payment by heir of debt exceeding value of property inherited; and
7. Payment of legacy after will have been declared void.

113
 Extra-contractual Obligations:633

1. Quasi-contract634 - That juridical relation resulting from a lawful, voluntary and

unilateral act, and which has for its purpose, the payment of indemnity to the end that no
one shall be unjustly enriched or benefited at the expense of another

2 kinds:

a. Negotiorum gestio - unauthorized management635

b. Solutio indebiti - undue payment 636

2. Quasi-delict/torts637 - It is a fault or act of negligence ( or omission of care )

which causes damage to another, there being no pre-existing contractual relations between
the parties.638

VI. Nature and Effect of Obligations

Every person obliged to give something is also obliged to take care of it with the
proper diligence of a good father of a family, unless the law or the stipulation of the parties
requires another standard of care.639

The creditor has a right to the fruits of the thing from the time the obligation to
deliver it arises. However, he shall acquire no real right over it until the same has been
delivered to him.640

633
Arts. 2142 to 2194
634
obligation ex quasi-contractu
635
This takes place when a person voluntarily takes charge of anothers abandoned business or property
without the owners authority
636
This takes place when something is received when there is no right to demand it, and it was unduly
delivered thru mistake
637
obligation ex quasi-delicto or ex quasi maleficio
638
Elements:
a. There must be fault or negligence attributable to the person charged
b. There must be damage or injury
c. There must be a direct relation of cause and effect between the fault or negligence on the one
hand and the damage or injury on the other hand ( proximate cause )
639
Art. 1163
640
Art. 1164

114
 When what is to be delivered is a determinate thing, the creditor, in addition to the
right granted him by Article 1170,641 may compel the debtor to make the delivery.

If the thing is indeterminate or generic, he may ask that the obligation be complied
with at the expense of the debtor.

If the obligor delays, or has promised to deliver the same thing to two or more
persons who do not have the same interest, he shall be responsible for any fortuitous event
until he has effected the delivery.642

The obligation to give a determinate thing includes that of delivering all its
accessions and accessories, even though they may not have been mentioned.643

If a person obliged to do something fails to do it, the same shall be executed at his
cost.

This same rule shall be observed if he does it in contravention of the tenor of the
obligation. Furthermore, it may be decreed that what has been poorly done be undone.644

When the obligation consists in not doing, and the obligor does what has been
forbidden him, it shall also be undone at his expense.645

Those obliged to deliver or to do something incur in delay from the time the
obligee judicially or extrajudicially demands from them the fulfillment of their obligation.

However, the demand by the creditor shall not be necessary in order that delay may
exist:

(1) When the obligation or the law expressly so declare; or

(2) When from the nature and the circumstances of the obligation it appears that
the designation of the time when the thing is to be delivered or the service is to be
rendered was a controlling motive for the establishment of the contract; or

641
infra
642
Art. 1165
643
Art. 1166
644
Art. 1167
645
Art. 1168

115
 (3) When demand would be useless, as when the obligor has rendered it beyond his
power to perform.

In reciprocal obligations, neither party incurs in delay if the other does not comply
or is not ready to comply in a proper manner with what is incumbent upon him. From the
moment one of the parties fulfills his obligation, delay by the other begins.646

Those who in the performance of their obligations are guilty of fraud, negligence,
or delay, and those who in any manner contravene the tenor thereof, are liable for
damages.647

Responsibility arising from fraud is demandable in all obligations. Any waiver of an

action for future fraud is void.648

Responsibility arising from negligence in the performance of every kind of

obligation is also demandable, but such liability may be regulated by the courts, according
to the circumstances.649

The fault or negligence of the obligor consists in the omission of that diligence
which is required by the nature of the obligation and corresponds with the circumstances
of the persons, of the time and of the place. When negligence shows bad faith, the
provisions of Articles 1171 and 2201, paragraph 2, shall apply.

If the law or contract does not state the diligence which is to be observed in the
performance, that which is expected of a good father of a family shall be required.650

Except in cases expressly specified by the law, or when it is otherwise declared by

stipulation, or when the nature of the obligation requires the assumption of risk, no person
shall be responsible for those events which could not be foreseen, or which, though
foreseen, were inevitable.651

The receipt of the principal by the creditor without reservation with respect to the
interest, shall give rise to the presumption that said interest has been paid.

646
Art. 1169
647
Art. 1170.
648
Art. 1171
649
Art. 1172
650
Art. 1173
651
Art. 1174

116
 The receipt of a later installment of a debt without reservation as to prior
installments, shall likewise raise the presumption that such installments have been paid.652

The creditors, after having pursued the property in possession of the debtor to
satisfy their claims, may exercise all the rights and bring all the actions of the latter for the
same purpose, save those which are inherent in his person; they may also impugn the acts
which the debtor may have done to defraud them.653

Subject to the laws, all rights acquired in virtue of an obligation are transmissible, if
there has been no stipulation to the contrary.654

VII. Kinds of Civil Obligations

Pure

The performance does not depend upon a future or uncertain event, or upon a past
event unknown to the parties, which is demandable at once.655

Conditional

The acquisition of rights, as well as the extinguishment or loss of those already

acquired, shall depend upon the happening of the event which constitutes the condition.656

1. Suspensive condition657

The happening of the event gives birth to an obligation

2. Resolutory condition658

652
Art. 1176
653
Art. 1177
654
Art. 1178.
655
Art. 1179
Every obligation which contains a resolutory condition shall also be demandable, without prejudice to
the effects of the happening of the event.
When the debtor binds himself to pay when his means permit him to do so, the obligation shall be
deemed to be one with a period, subject to the provisions of Article 1197 (Art. 1180)
656
Art. 1181
657
condition precedent
658
condition subsequent

117
 The happening of the event will extinguish the obligation.

3. Potestative, casual or mixed

Potestative Casual Mixed

One w/c depends solely on One where the condition is One w/c depends partly
the will of either one made to depend upon a upon the will of one of the
party.659 third person or upon parties and partly on either
chance.660 chance or the will of a third
person.

VIII. Joint and Solidary Obligation

The concurrence of two or more creditors or of two or more debtors in one and
the same obligation does not imply that each one of the former has a right to demand, or
that each one of the latter is bound to render, entire compliance with the prestation. There
is a solidary liability only when the obligation expressly so states, or when the law or the
nature of the obligation requires solidarity.661

If from the law, or the nature or the wording of the obligations to which the
preceding article refers the contrary does not appear, the credit or debt shall be presumed
to be divided into as many shares as there are creditors or debtors, the credits or debts
being considered distinct from one another, subject to the Rules of Court governing the
multiplicity of suits.662

If the division is impossible, the right of the creditors may be prejudiced only by
their collective acts, and the debt can be enforced only by proceeding against all the
debtors. If one of the latter should be insolvent, the others shall not be liable for his
share.663

659
e.g., "I will give you my plantation in Davao provided you reside in Davao permanently."
660
e.g., "I will give you my land in Pampanga if you will pass the bar exams this year."
661
Art. 1207
662
Art. 1208
663
Art. 1209

118
 The indivisibility of an obligation does not necessarily give rise to solidarity. Nor
does solidarity of itself imply indivisibility.664

Solidarity may exist although the creditors and the debtors may not be bound in the
same manner and by the same periods and conditions.665

Each one of the solidary creditors may do whatever may be useful to the others,
but not anything which may be prejudicial to the latter.666

A solidary creditor cannot assign his rights without the consent of the others.667

The debtor may pay any one of the solidary creditors; but if any demand, judicial or
extrajudicial, has been made by one of them, payment should be made to him.668

Novation, compensation, confusion or remission of the debt, made by any of the

solidary creditors or with any of the solidary debtors, shall extinguish the obligation,
without prejudice to the provisions of Article 1219.669

The creditor who may have executed any of these acts, as well as he who collects
the debt, shall be liable to the others for the share in the obligation corresponding to
them.670

The creditor may proceed against any one of the solidary debtors or some or all of
them simultaneously. The demand made against one of them shall not be an obstacle to
those which may subsequently be directed against the others, so long as the debt has not
been fully collected.671

Payment made by one of the solidary debtors extinguishes the obligation. If two or
more solidary debtors offer to pay, the creditor may choose which offer to accept.

664
Art. 1210
665
Art. 1211
666
Art. 1212
667
Art. 1213
668
Art. 1214
669
infra
670
Art. 1215
671
Art. 1216

119
 He who made the payment may claim from his co-debtors only the share which
corresponds to each, with the interest for the payment already made. If the payment is
made before the debt is due, no interest for the intervening period may be demanded.
When one of the solidary debtors cannot, because of his insolvency, reimburse his share to
the debtor paying the obligation, such share shall be borne by all his co-debtors, in
proportion to the debt of each.672

Payment by a solidary debtor shall not entitle him to reimbursement from his co-
debtors if such payment is made after the obligation has prescribed or become illegal.673

The remission made by the creditor of the share which affects one of the solidary
debtors does not release the latter from his responsibility towards the co-debtors, in case
the debt had been totally paid by anyone of them before the remission was effected.674

The remission of the whole obligation, obtained by one of the solidary debtors,
does not entitle him to reimbursement from his co-debtors.675

If the thing has been lost or if the prestation has become impossible without the fault of
the solidary debtors, the obligation shall be extinguished.

If there was fault on the part of any one of them, all shall be responsible to the
creditor, for the price and the payment of damages and interest, without prejudice to their
action against the guilty or negligent debtor.

If through a fortuitous event, the thing is lost or the performance has become
impossible after one of the solidary debtors has incurred in delay through the judicial or
extrajudicial demand upon him by the creditor, the provisions of the preceding paragraph
shall apply.676

A solidary debtor may, in actions filed by the creditor, avail himself of all defenses
which are derived from the nature of the obligation and of those which are personal to
him, or pertain to his own share. With respect to those which personally belong to the

672
Art. 1217.
673
Art. 1218
674
Art. 1219
675
Art. 1220
676
Art. 1221

120
others, he may avail himself thereof only as regards that part of the debt for which the
latter are responsible.677

IX. Extinguishment of Obligations

Obligations are extinguished:

(1) By payment or performance:

(2) By the loss of the thing due:
(3) By the condonation or remission of the debt;
(4) By the confusion or merger of the rights of creditor and debtor;
(5) By compensation;
(6) By novation.

Other causes of extinguishment of obligations, such as annulment, rescission,

fulfillment of a resolutory condition, and prescription, are governed elsewhere in this
Code.678

CONTRACTS

I. Essential Requisites

(1) Consent of the contracting parties;

(2) Object certain which is the subject matter of the contract;
(3) Cause of the obligation which is established.679

II. Kinds of Contracts

Consensual Real Formal or Solemn

Perfected by mere consent Requires delivery of object Requires compliance with

and from that moment, the for perfection.680 certain formalities
parties are bound not only prescribed by law, such
to the fulfillment of what prescribed form being an
has been expressly stipulated essential element

677
Art. 1222
678
Art. 1231
679
Art. 1381
680
like deposit, pledge and commodatum

121
but also to all consequences
which, according to their
nature may be in keeping
with good faith, usage and
law.

III. Formality

Contracts shall be obligatory, in whatever form they may have been entered into,
provided all the essential requisites for their validity are present. However, when the law
requires that a contract be in some form in order that it may be valid or enforceable, or
that a contract be proved in a certain way, that requirement is absolute and indispensable.
In such cases, the right of the parties stated in the following article cannot be exercised.681

If the law requires a document or other special form, the contracting parties may
compel each other to observe that form, once the contract has been perfected. This right
may be exercised simultaneously with the action upon the contract.682

The following must appear in a public document:

(1) Acts and contracts which have for their object the creation, transmission,
modification or extinguishment of real rights over immovable property; sales of real
property or of an interest therein are governed by Articles 1403, No. 2, and 1405;683

(2) The cession, repudiation or renunciation of hereditary rights or of those of the

conjugal partnership of gains;

(3) The power to administer property, or any other power which has for its object
an act appearing or which should appear in a public document, or should prejudice a third
person;

(4) The cession of actions or rights proceeding from an act appearing in a public
document.

681
Art. 1356
682
Art. 1357
683
infra

122
All other contracts where the amount involved exceeds five hundred pesos (P500.00) must
appear in writing, even a private one. But sales of goods, chattels or things in action are
governed by articles, 1403, No. 2 and 1405.684

IV. Defective Contracts

Rescissible Contracts:685

(1) Those which are entered into by guardians whenever the wards whom they
represent suffer lesion by more than one-fourth of the value of the things which are the
object thereof;

(2) Those agreed upon in representation of absentees, if the latter suffer the lesion
stated in the preceding number;

(3) Those undertaken in fraud of creditors when the latter cannot in any other
manner collect the claims due them;

(4) Those which refer to things under litigation if they have been entered into by
the defendant without the knowledge and approval of the litigants or of competent judicial
authority;

(5) All other contracts specially declared by law to be subject to rescission.686

(6) Payments made in a state of insolvency on account of obligations not yet

enforceable

684
Art. 1358
685
Contracts validly agreed upon but, by reason of lesion or economic prejudice may be rescinded in
cases established by law.
686
Art. 1381

123
 Voidable Contracts:687

Contracts entered into during a lucid interval are valid. Contracts agreed to in a
state of drunkenness or during a hypnotic spell are voidable.688

The incapacity declared in Article 1327689 is subject to the modifications determined

by law, and is understood to be without prejudice to special disqualifications established in
the laws.690

A contract where consent is given through mistake, violence, intimidation, undue

influence, or fraud is voidable.691

In order that mistake may invalidate consent, it should refer to the substance of the
thing which is the object of the contract, or to those conditions which have principally
moved one or both parties to enter into the contract.

Mistake as to the identity or qualifications of one of the parties will vitiate consent
only when such identity or qualifications have been the principal cause of the contract.

A simple mistake of account shall give rise to its correction.692

When one of the parties is unable to read, or if the contract is in a language not
understood by him, and mistake or fraud is alleged, the person enforcing the contract must
show that the terms thereof have been fully explained to the former.693

687
Art. 1409
Those in which all of the essential elements for validity are present, although the element of consent
is vitiated either by lack of capacity of one of the contracting parties or by VIMFU.
What contracts are voidable:
1. Those where one of the parties is incapable of giving consent to a contract
2. Those where the consent is vitiated by mistake, violence, intimidation, undue influence or fraud
3. By loss of the thing which is the object of the contract through fraud or fault of the person who is
entitled to annul the contract.
Requisites:
a. there must be knowledge of the reason which renders the contract voidable
b. such reason must have ceased and
c. the injured party must have executed an act which expressly or impliedly conveys an intention to
waive his right.
688
Art. 1328
689
See Reference
690
Art. 1329
691
Art. 1330
692
Art. 1331
693
Art. 1332

124
 There is no mistake if the party alleging it knew the doubt, contingency or risk
affecting the object of the contract.694

Mutual error as to the legal effect of an agreement when the real purpose of the
parties is frustrated, may vitiate consent.695

There is violence when in order to wrest consent, serious or irresistible force is

employed.

There is intimidation when one of the contracting parties is compelled by a

reasonable and well-grounded fear of an imminent and grave evil upon his person or
property, or upon the person or property of his spouse, descendants or ascendants, to give
his consent.

To determine the degree of intimidation, the age, sex and condition of the person
shall be borne in mind.

A threat to enforce one's claim through competent authority, if the claim is just or
legal, does not vitiate consent.696

Violence or intimidation shall annul the obligation, although it may have been
employed by a third person who did not take part in the contract.697

There is undue influence when a person takes improper advantage of his power
over the will of another, depriving the latter of a reasonable freedom of choice. The
following circumstances shall be considered: the confidential, family, spiritual and other
relations between the parties, or the fact that the person alleged to have been unduly
influenced was suffering from mental weakness, or was ignorant or in financial distress. 698

There is fraud when, through insidious words or machinations of one of the

contracting parties, the other is induced to enter into a contract which, without them, he
would not have agreed to.699

Failure to disclose facts, when there is a duty to reveal them, as when the parties are
bound by confidential relations, constitutes fraud.700

694
Art. 1333
695
Art. 1334
696
Art. 1335
697
Art. 1336
698
Art. 1337
699
Art. 1338
700
Art. 1339

125
 The usual exaggerations in trade, when the other party had an opportunity to know
the facts, are not in themselves fraudulent.701

A mere expression of an opinion does not signify fraud, unless made by an expert
and the other party has relied on the former's special knowledge.702

Misrepresentation by a third person does not vitiate consent, unless such

misrepresentation has created substantial mistake and the same is mutual.703

Misrepresentation made in good faith is not fraudulent but may constitute error.704

In order that fraud may make a contract voidable, it should be serious and should
not have been employed by both contracting parties.

Incidental fraud only obliges the person employing it to pay damages.705

The following contracts are voidable or annullable, even though there may have
been no damage to the contracting parties:

(1) Those where one of the parties is incapable of giving consent to a contract;

(2) Those where the consent is vitiated by mistake, violence, intimidation, undue
influence or fraud.

These contracts are binding, unless they are annulled by a proper action in court.
They are susceptible of ratification.706

The action for annulment shall be brought within four (4) years.

This period shall begin:

In cases of intimidation, violence or undue influence, from the time the defect of
the consent ceases.

In case of mistake or fraud, from the time of the discovery of the same.

And when the action refers to contracts entered into by minors or other
incapacitated persons, from the time the guardianship ceases.707

701
Art. 1340
702
Art. 1341
703
Art. 1342
704
Art. 1343
705
Art. 1344
706
Art. 1390

126
 Ratification extinguishes the action to annul a voidable contract.708

Ratification may be effected expressly or tacitly. It is understood that there is a tacit

ratification if, with knowledge of the reason which renders the contract voidable and such
reason having ceased, the person who has a right to invoke it should execute an act which
necessarily implies an intention to waive his right.709

Ratification may be effected by the guardian of the incapacitated person.710

Ratification does not require the conformity of the contracting party who has no
right to bring the action for annulment.711

Ratification cleanses the contract from all its defects from the moment it was
constituted.712

The action for the annulment of contracts may be instituted by all who are thereby
obliged principally or subsidiarily. However, persons who are capable cannot allege the
incapacity of those with whom they contracted; nor can those who exerted intimidation,
violence, or undue influence, or employed fraud, or caused mistake base their action upon
these flaws of the contract.713

An obligation having been annulled, the contracting parties shall restore to each
other the things which have been the subject matter of the contract, with their fruits, and
the price with its interest, except in cases provided by law.

In obligations to render service, the value thereof shall be the basis for damages.714

When the defect of the contract consists in the incapacity of one of the parties, the
incapacitated person is not obliged to make any restitution except insofar as he has been
benefited by the thing or price received by him.715

Whenever the person obliged by the decree of annulment to return the thing
cannot do so because it has been lost through his fault, he shall return the fruits received
and the value of the thing at the time of the loss, with interest from the same date.716

707
Art. 1391
708
Art. 1392
709
Art. 1393
710
Art. 1394
711
Art. 1395
712
Art. 1396
713
Art. 1397
714
Art. 1398
715
Art. 1399
716
Art. 1400

127
 The action for annulment of contracts shall be extinguished when the thing which
is the object thereof is lost through the fraud or fault of the person who has a right to
institute the proceedings.

If the right of action is based upon the incapacity of any one of the contracting
parties, the loss of the thing shall not be an obstacle to the success of the action, unless said
loss took place through the fraud or fault of the plaintiff.717

As long as one of the contracting parties does not restore what in virtue of the
decree of annulment he is bound to return, the other cannot be compelled to comply with
what is incumbent upon him.718

Unenforceable Contracts:719

The following contracts are unenforceable, unless they are ratified:

(1) Those entered into in the name of another person by one who has been given
no authority or legal representation, or who has acted beyond his powers;

(2) Those that do not comply with the Statute of Frauds.

717
Art. 1401
718
Art. 1402
719
Those which cannot be enforced by proper action in court unless they are ratified
What contracts are unenforceable
1. those entered into in the name of another by one without or acting in excess of authority;
2. those where both parties are incapable of giving consent; and
3. those which do not comply with the Statute of Frauds
Agreements within the scope of the Statute of Frauds (exclusive list):
1. Agreements not to be performed within one year from the making thereof;
2. Special promise to answer for the debt, default or miscarriage of another;
- this does not refer to the original or independent promise of the debtor to his own creditor. It
refers rather to a collateral promise.
3. Agreement in consideration of marriage other than a mutual promise to marry;
4. Agreement for the sale of goods, etc. at a price not less than P500.00;
5. Contracts of lease for a period longer than one year;
6. Agreements for the sale of real property or interest therein; and
7. Representation as to the credit of a third person.
The contracts/agreements under the Statute of Frauds require that the same be evidenced by some
note, memorandum or writing, subscribed by the party charged or by his agent, otherwise, the said
contracts shall be unenforceable.
The statute of frauds applies only to executory contracts, not to those that are partially or
completely fulfilled.
Ratification of contracts in violation of the Statute of Frauds
1. Failure to object to the presentation of oral evidence to prove such contracts
2. Acceptance of benefits under these contracts

128
 In the following cases an agreement hereafter made shall be unenforceable by
action, unless the same, or some note or memorandum thereof, be in writing, and
subscribed by the party charged, or by his agent; evidence, therefore, of the agreement
cannot be received without the writing, or a secondary evidence of its contents:

(a) An agreement that by its terms is not to be performed within a year

from the making thereof;

(b) A special promise to answer for the debt, default, or miscarriage of

another;

(c) An agreement made in consideration of marriage, other than a mutual

promise to marry;

(d) An agreement for the sale of goods, chattels or things in action, at a

price not less than five hundred pesos (P500.00), unless the buyer accept and
receive part of such goods and chattels, or the evidences, or some of them, of such
things in action or pay at the time some part of the purchase money; but when a
sale is made by auction and entry is made by the auctioneer in his sales book, at the
time of the sale, of the amount and kind of property sold, terms of sale, price,
names of the purchasers and person on whose account the sale is made, it is a
sufficient memorandum;

(e) An agreement for the leasing for a longer period than one (1) year, or
for the sale of real property or of an interest therein;

(f) A representation as to the credit of a third person.

(3) Those where both parties are incapable of giving consent to a contract.720

Unauthorized contracts are governed by Article 1317721 and the principles of

agency.722

Contracts infringing the Statute of Frauds, referred to in No. 2 of Article 1403, are
ratified by the failure to object to the presentation of oral evidence to prove the same, or
by the acceptance of benefit under them.723

720
Art. 1403
721
No one may contract in the name of another without being authorized by the latter, or unless he has
by law a right to represent him.
A contract entered into in the name of another by one who has no authority or legal representation,
or who has acted beyond his powers, shall be unenforceable, unless it is ratified, expressly or impliedly,
by the person on whose behalf it has been executed, before it is revoked by the other contracting party
722
Art. 1404
723
Art. 1405

129
 When a contract is enforceable under the Statute of Frauds, and a public document
is necessary for its registration in the Registry of Deeds, the parties may avail themselves of
the right under Article 1357.724

In a contract where both parties are incapable of giving consent, express or

implied, ratification by the parent, or guardian, as the case may be, of one of the
contracting parties shall give the contract the same effect as if only one of them were
incapacitated.

If ratification is made by the parents or guardians, as the case may be, of both
contracting parties, the contract shall be validated from the inception.

No one may contract in the name of another without being authorized by the
latter, or unless he has by law a right to represent him.

A contract entered into in the name of another by one who has no authority or
legal representation, or who has acted beyond his powers, shall be unenforceable, unless it
is ratified, expressly or impliedly, by the person on whose behalf it has been executed,
before it is revoked by the other contracting party.725

Void Contracts:726

(1) Those whose cause, object or purpose is contrary to law, morals, good customs,
public order or public policy;

(2) Those which are absolutely simulated or fictitious;

(3) Those whose cause or object did not exist at the time of the transaction;

(4) Those whose object is outside the commerce of men;

(5) Those which contemplate an impossible service;

(6) Those where the intention of the parties relative to the principal object of the
contract cannot be ascertained;

724
Art. 1406
If the law requires a document or other special form, the contracting parties may compel each other
to observe that form, once the contract has been perfected. This right may be exercised simultaneously
with the action upon the contract (Art. 1357)
725
Art. 1407
726
Those where all of the requisites of a contract are present but the cause, object or purpose is
contrary to law, morals, good customs, public order or public policy, or contract itself is prohibited or
declared void by law.

130
 (7) Those expressly prohibited or declared void by law.

These contracts cannot be ratified. Neither can the right to set up the defense of
illegality be waived.727

An absolutely simulated or fictitious contract is void. A relative simulation, when it

does not prejudice a third person and is not intended for any purpose contrary to law,
morals, good customs, public order or public policy binds the parties to their real
agreement.728

Comparative table of defective contracts

Void Voidable Rescissible Unenforceable

1. Defect is Defect is caused by Defect is caused by Defect is caused

caused by lack of vice of consent injury/ damage by lack of form,
essential elements either to one of the authority, or
or illegality parties of to a 3rd capacity of both
person parties not cured
by prescription

2. Do not, as a Valid and Valid and Cannot be

general rule enforceable until enforceable until enforced by a
produce any legal they are annulled by they are rescinded by proper action in
effect a competent court a competent court court

3. Action for the Action for Action for rescission Corresponding

declaration or annulment or may prescribe action for
nullity or defense of recovery, if there
inexistence or annulability may was total or partial
defense of nullity prescribe performance of
or inexistence the unenforceable
does not prescribe contract under No.
1 or 3729 of Article
1403 may
prescribe

727
Art. 1409
728
Art. 1346
729
supra

131
4. Not cured by Cured by Cured by Not cured by
prescription prescription prescription prescription

5. Cannot be Can be ratified Need not be ratified Can be ratified

ratified

6. Assailed not Assailed only by a Assailed not only by Assailed only by a

only by a contracting party a contracting party contracting party
contracting party but even by a third
but even by a person who is
third person prejudiced or
whose interest is damaged by the
directly affected contract

7. Assailed directly Assailed directly or Assailed directly only Assailed directly or

or collaterally collaterally collaterally

V. Effect of Contracts

Contracts take effect only between the parties, their assigns and heirs, except in
case where the rights and obligations arising from the contract are not transmissible by
their nature, or by stipulation or by provision of law. The heir is not liable beyond the value
of the property he received from the decedent.

If a contract should contain some stipulation in favor of a third person, he may

demand its fulfillment provided he communicated his acceptance to the obligor before its
revocation. A mere incidental benefit or interest of a person is not sufficient. The
contracting parties must have clearly and deliberately conferred a favor upon a third
person.730

730
Art. 1311

132
SALES

I. Definition and Essential Requisites of a Contract of Sale

By the contract of sale one of the contracting parties obligates himself to transfer the
ownership and to deliver a determinate thing, and the other to pay therefor a price certain in
money or its equivalent.

A contract of sale may be absolute or conditional.731

Gross inadequacy of price does not affect a contract of sale, except as it may indicate
a defect in the consent, or that the parties really intended a donation or some other act or
contract.732

Where goods are sold by a person who is not the owner thereof, and who does not
sell them under authority or with the consent of the owner, the buyer acquires no better title
to the goods than the seller had, unless the owner of the goods is by his conduct precluded
from denying the seller's authority to sell.

Nothing, however, shall affect:

(1) The provisions of any factors' act, recording laws, or any other provision of law
enabling the apparent owner of goods to dispose of them as if he were the true owner
thereof;

(2) The validity of any contract of sale under statutory power of sale or under the
order of a court of competent jurisdiction;

(3) Purchases made in a merchant's store, or in fairs, or markets, in accordance with

the Code of Commerce and special laws.733

II. Parties to a Contract of Sale

All persons who are authorized by law to obligate themselves, may enter into a
contract of sale, with modifications.

Where necessaries734 are those sold and delivered to a minor or other person without
capacity to act, he must pay a reasonable price therefor. 735

731
Art. 1458
732
Art. 1470
733
Art. 1505
734
refers to Art. 290 which provides: Support is everything that is indispensable for sustenance, dwelling,
clothing and medical attendance, according to the social position of the family.
Support also includes the education of the person entitled to be supported until he completes his
education or training for some profession, trade or vocation, even beyond the age of majority.

133
 The following persons cannot acquire by purchase, even at a public or judicial
auction, either in person or through the mediation of another:

(1) The guardian, the property of the person or persons who may be under his
guardianship;

(2) Agents, the property whose administration or sale may have been intrusted to
them, unless the consent of the principal has been given;

(3) Executors and administrators, the property of the estate under administration;

(4) Public officers and employees, the property of the State or of any subdivision
thereof, or of any government-owned or controlled corporation, or institution, the
administration of which has been intrusted to them; this provision shall apply to judges and
government experts who, in any manner whatsoever, take part in the sale;

(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and
other officers and employees connected with the administration of justice, the property and
rights in litigation or levied upon an execution before the court within whose jurisdiction or
territory they exercise their respective functions; this prohibition includes the act of acquiring
by assignment and shall apply to lawyers, with respect to the property and rights which may
be the object of any litigation in which they may take part by virtue of their profession;

(6) Any others specially disqualified by law.

The prohibitions in the two preceding articles are applicable to sales in legal
redemption, compromises and renunciations.736

III. Subject Matter

The thing must be licit and the vendor must have a right to transfer the ownership
thereof at the time it is delivered.737

A thing is determinate when it is particularly designated or physical segregated from

all others of the same class.

The requisite that a thing be determinate is satisfied if at the time the contract is
entered into, the thing is capable of being made determinate without the necessity of a new
or further agreement between the parties.738

Things having a potential existence may be the object of the contract of sale.

735
Art. 1489
736
Art. 1491
737
Art. 1459
738
Art. 1460

134
 The efficacy of the sale of a mere hope or expectancy is deemed subject to the
condition that the thing will come into existence.

The sale of a vain hope or expectancy is void.739

The goods which form the subject of a contract of sale may be either existing goods,
owned or possessed by the seller, or goods to be manufactured, raised, or acquired by the
seller after the perfection of the contract of sale, in this Title called "future goods."

There may be a contract of sale of goods, whose acquisition by the seller depends
upon a contingency which may or may not happen.740

The sole owner of a thing may sell an undivided interest therein.741

In the case of fungible goods, there may be a sale of an undivided share of a specific
mass, though the seller purports to sell and the buyer to buy a definite number, weight or
measure of the goods in the mass, and though the number, weight or measure of the goods
in the mass, and though the number, weight or measure of the goods in the mass is
undetermined. By such a sale the buyer becomes owner in common of such a share of the
mass as the number, weight or measure bought bears to the number, weight or measure of
the mass. If the mass contains less than the number, weight or measure bought, the buyer
becomes the owner of the whole mass and the seller is bound to make good the deficiency
from goods of the same kind and quality, unless a contrary intent appears.742

Things subject to a resolutory condition may be the object of the contract of sale.743

IV. Obligations of the Seller to Transfer Ownership

The goods which form the subject of a contract of sale may be either existing goods,
owned or possessed by the seller, or goods to be manufactured, raised, or acquired by the
seller after the perfection of the contract of sale, called "future goods."

There may be a contract of sale of goods, whose acquisition by the seller depends
upon a contingency which may or may not happen.744

Where goods are sold by a person who is not the owner thereof, and who does not
sell them under authority or with the consent of the owner, the buyer acquires no better title
to the goods than the seller had, unless the owner of the goods is by his conduct precluded
from denying the seller's authority to sell.745

739
Art. 1461
740
Art. 1462
741
Art. 1463
742
Art. 1464
743
Art. 1465
744
Art. 1462
745
Art. 1505

135
 The thing must be licit and the vendor must have a right to transfer the ownership
thereof at the time it is delivered.746

V. Price

The sum stipulated as the equivalent of the thing sold and also every incident taken
into consideration for the fixing of the price, put to the debit of the vendee and agreed to by
him.

In order that the price may be considered certain, it shall be sufficient that it be so
with reference to another thing certain, or that the determination thereof be left to the
judgment of a special person or persons.

Should such person or persons be unable or unwilling to fix it, the contract shall be
inefficacious, unless the parties subsequently agree upon the price.

If the third person or persons acted in bad faith or by mistake, the courts may fix the
price.

Where such third person or persons are prevented from fixing the price or terms by
fault of the seller or the buyer, the party not in fault may have such remedies against the
party in fault as are allowed the seller or the buyer, as the case may be.747

Gross inadequacy of price does not affect a contract of sale, except as it may indicate
a defect in the consent, or that the parties really intended a donation or some other act or
contract.748

If the price is simulated, the sale is void, but the act may be shown to have been in
reality a donation, or some other act or contract.749

The price of securities, grain, liquids, and other things shall also be considered
certain, when the price fixed is that which the thing sold would have on a definite day, or in
a particular exchange or market, or when an amount is fixed above or below the price on
such day, or in such exchange or market, provided said amount be certain.750

The fixing of the price can never be left to the discretion of one of the contracting
parties. However, if the price fixed by one of the parties is accepted by the other, the sale is
perfected.751

Where the price cannot be determined, or in any other manner, the contract is

746
Art. 1459
747
Art. 1469
748
Art. 1470
749
Art. 1471
750
Art. 1472
751
Art. 1473

136
inefficacious. However, if the thing or any part thereof has been delivered to and
appropriated by the buyer he must pay a reasonable price therefor. What is a reasonable
price is a question of fact dependent on the circumstances of each particular case.752

VI. Formation of Contract of Sale

The contract of sale is perfected at the moment there is a meeting of minds upon the
thing which is the object of the contract and upon the price.

From that moment, the parties may reciprocally demand performance, subject to the
provisions of the law governing the form of contracts.753

A promise to buy and sell a determinate thing for a price certain is reciprocally
demandable.

An accepted unilateral promise to buy or to sell a determinate thing for a price

certain is binding upon the promisor if the promise is supported by a consideration distinct
from the price.754

When the offerer has allowed the offeree a certain period to accept, the offer may be
withdrawn at any time before acceptance by communicating such withdrawal, except when
the option is founded upon a consideration, as something paid or promised.755

VII. Transfer of Ownership

The ownership of the thing sold shall be transferred to the vendee upon the actual or
constructive delivery thereof.756

The ownership of the thing sold is acquired by the vendee from the moment it is
delivered to him in any of the ways specified in Articles 1497 to 1501, 757 or in any other
manner signifying an agreement that the possession is transferred from the vendor to the
vendee.758

The thing sold shall be understood as delivered, when it is placed in the control and
possession of the vendee.759

752
Art. 1474
753
Art. 1475
754
Art. 1479
755
Art. 1324
756
Art. 1477
757
See Reference
758
Art. 1496
759
Art. 1497

137
 When the sale is made through a public instrument, the execution thereof shall be
equivalent to the delivery of the thing which is the object of the contract, if from the deed
the contrary does not appear or cannot clearly be inferred.

With regard to movable property, its delivery may also be made by the delivery of the
keys of the place or depository where it is stored or kept.760

The delivery of movable property may likewise be made by the mere consent or
agreement of the contracting parties, if the thing sold cannot be transferred to the
possession of the vendee at the time of the sale, or if the latter already had it in his
possession for any other reason.761

There may also be tradition constitutum possessorium.762

With respect to incorporeal property, the provisions of the first paragraph of article
1498 shall govern. In any other case wherein said provisions are not applicable, the placing
of the titles of ownership in the possession of the vendee or the use by the vendee of his
rights, with the vendor's consent, shall be understood as a delivery.763

VIII. Risk of Loss

The following rules shall be observed in case of the improvement, loss or

deterioration of the thing during the pendency of the condition:

(1) If the thing is lost without the fault of the debtor, the obligation shall be
extinguished;

(2) If the thing is lost through the fault of the debtor, he shall be obliged to pay
damages; it is understood that the thing is lost when it perishes, or goes out of commerce, or
disappears in such a way that its existence is unknown or it cannot be recovered;

(3) When the thing deteriorates without the fault of the debtor, the impairment is to
be borne by the creditor;

(4) If it deteriorates through the fault of the debtor, the creditor may choose between
the rescission of the obligation and its fulfillment, with indemnity for damages in either case;

(5) If the thing is improved by its nature, or by time, the improvement shall inure to
the benefit of the creditor;

(6) If it is improved at the expense of the debtor, he shall have no other right than
that granted to the usufructuary.764

760
Art. 1498
761
Art. 1499
762
Art. 1500
763
Art. 1501
764
Art. 1189

138
 In an obligation to deliver a generic thing, the loss or destruction of anything of the
same kind does not extinguish the obligation.765

If at the time the contract of sale is perfected, the thing which is the object of the
contract has been entirely lost, the contract shall be without any effect.

But if the thing should have been lost in part only, the vendee may choose between
withdrawing from the contract and demanding the remaining part, paying its price in
proportion to the total sum agreed upon.766

Where the parties purport a sale of specific goods, and the goods without the
knowledge of the seller have perished in part or have wholly or in a material part so
deteriorated in quality as to be substantially changed in character, the buyer may at his option
treat the sale:

(1) As avoided; or
(2) As valid in all of the existing goods or in so much thereof as have not
deteriorated, and as binding the buyer to pay the agreed price for the goods in which the
ownership will pass, if the sale was divisible.767

IX. Documents of Title

"Document of title to goods" includes any bill of lading, dock warrant, "quedan," or
warehouse receipt or order for the delivery of goods, or any other document used in the
ordinary course of business in the sale or transfer of goods, as proof of the possession or
control of the goods, or authorizing or purporting to authorize the possessor of the
document to transfer or receive, either by indorsement or by delivery, goods represented by
such document.768

X. Remedies of an Unpaid Seller

1. Possessory lien over the goods

2. Right of stoppage in transitu after he has parted with the possession of the goods
and the buyer becomes insolvent
3. Special Right of resale
4. Special Right to rescind the sale
5. Action for the price
6. Action for damages

765
Art. 1263
766
Art. 1493
767
Art. 1494
768
Art. 1636

139
XI. Performance of Contract

Where the seller delivers to the buyer a quantity of goods less than he contracted to
sell, the buyer may reject them, but if the buyer accepts or retains the goods so delivered,
knowing that the seller is not going to perform the contract in full, he must pay for them at
the contract rate. If, however, the buyer has used or disposed of the goods delivered before
he knows that the seller is not going to perform his contract in full, the buyer shall not be
liable for more than the fair value to him of the goods so received.

Where the seller delivers to the buyer a quantity of goods larger than he contracted
to sell, the buyer may accept the goods included in the contract and reject the rest. If the
buyer accepts the whole of the goods so delivered he must pay for them at the contract rate.

Where the seller delivers to the buyer the goods he contracted to sell mixed with
goods of a different description not included in the contract, the buyer may accept the goods
which are in accordance with the contract and reject the rest.

If the subject matter is indivisible, the buyer may reject the whole of the goods.

The provisions of this article are subject to any usage of trade, special agreement, or
course of dealing between the parties.769

The vendor is bound to deliver the thing sold and its accessions and accessories in
the condition in which they were upon the perfection of the contract.

All the fruits shall pertain to the vendee from the day on which the contract was
perfected.770

Any injury to or benefit from the thing sold, after the contract has been perfected,
from the moment of the perfection of the contract to the time of delivery, shall be governed
by Articles 1163 to 1165, and 1262.771

This rule shall apply to the sale of fungible things, made independently and for a
single price, or without consideration of their weight, number, or measure.

Should fungible things be sold for a price fixed according to weight, number, or
measure, the risk shall not be imputed to the vendee until they have been weighed, counted,
or measured and delivered, unless the latter has incurred in delay.772

The obligation to deliver the thing sold includes that of placing in the control of the
vendee all that is mentioned in the contract, in conformity with the following rules:

769
Art. 1522
770
Art. 1537
771
See Reference
772
Art. 1480

140
 If the sale of real estate should be made with a statement of its area, at the rate of a
certain price for a unit of measure or number, the vendor shall be obliged to deliver to the
vendee, if the latter should demand it, all that may have been stated in the contract; but,
should this be not possible, the vendee may choose between a proportional reduction of the
price and the rescission of the contract, provided that, in the latter case, the lack in the area
be not less than one-tenth of that stated.

The same shall be done, even when the area is the same, if any part of the
immovable is not of the quality specified in the contract.

The rescission, in this case, shall only take place at the will of the vendee, when the
inferior value of the thing sold exceeds one-tenth of the price agreed upon.

Nevertheless, if the vendee would not have bought the immovable had he known of
its smaller area of inferior quality, he may rescind the sale.773

The actions arising from Articles 1539 and 1542774 shall prescribe in six months,
counted from the day of delivery.775

XII. Warranties

Express warranties:

A statement or representation made by the seller of goods, contemporaneously and

as a part of the contract of sale, having reference to the character, quality, or title of the
goods, and by which he promises or undertakes to insure that certain facts are or shall be as
he then represents.

Where one party expressly promised that the contingency or some act fixed by the
contract shall be performed, like a promise that the goods are of a certain kind and character
or that certain state of facts would exist, the promise constitutes a warranty, and failure of
which gives rise to an action for its breach. 776

Any affirmation of fact or any promise by the seller relating to the thing is an express
warranty if the natural tendency of such affirmation or promise is to induce the buyer to
purchase the same, and if the buyer purchase the thing relying thereon. No affirmation of
the value of the thing, nor any statement purporting to be a statement of the seller's opinion
only, shall be construed as a warranty, unless the seller made such affirmation or statement
as an expert and it was relied upon by the buyer.777

773
Art. 1539
774
See reference
775
Art. 1543
776
1. it must be an affirmation of fact or any promise by seller relating to the subject matter of sale
2. natural tendency of affirmation or promise is to induce buyer to purchase subject matter
3. buyer purchases the subject matter relying thereon
777
Art. 1546

141
 Implied warranties:778

That which the law derives by implication or inference from the nature of the
transaction or the relative situation or circumstances of the parties, irrespective of any
intention of the seller to create it.

a. Warranty against eviction

b. Warranty against hidden defects
c. Warranty as to Fitness and Merchantability

In a contract of sale, unless a contrary intention appears, there is:

(1) An implied warranty on the part of the seller that he has a right to sell the thing
at the time when the ownership is to pass, and that the buyer shall from that time have and
enjoy the legal and peaceful possession of the thing;

(2) An implied warranty that the thing shall be free from any hidden faults or
defects, or any charge or encumbrance not declared or known to the buyer.

This shall not be held to render liable a sheriff, auctioneer, mortgagee, pledgee, or
other person professing to sell by virtue of authority in fact or law, for the sale of a thing in
which a third person has a legal or equitable interest.779

Effects of warranties:

Where there is a breach of warranty by the seller, the buyer may, at his election:

(1) Accept or keep the goods and set up against the seller, the breach of warranty by
way of recoupment in diminution or extinction of the price;

(2) Accept or keep the goods and maintain an action against the seller for damages
for the breach of warranty;

(3) Refuse to accept the goods, and maintain an action against the seller for damages
for the breach of warranty;

(4) Rescind the contract of sale and refuse to receive the goods or if the goods have
already been received, return them or offer to return them to the seller and recover the price
or any part thereof which has been paid.

778
An implied warranty is a natural, not an essential element of a contract, and is deemed incorporated in
the contract of sale. It may however, be waived or modified by express stipulation. (De Leon)
779
Art. 1547

142
 When the buyer has claimed and been granted a remedy in anyone of these ways, no
other remedy can thereafter be granted, without prejudice to the provisions of the second
paragraph of Article 1191.780

Where the goods have been delivered to the buyer, he cannot rescind the sale if he
knew of the breach of warranty when he accepted the goods without protest, or if he fails to
notify the seller within a reasonable time of the election to rescind, or if he fails to return or
to offer to return the goods to the seller in substantially as good condition as they were in at
the time the ownership was transferred to the buyer. But if deterioration or injury of the
goods is due to the breach or warranty, such deterioration or injury shall not prevent the
buyer from returning or offering to return the goods to the seller and rescinding the sale.

Where the buyer is entitled to rescind the sale and elects to do so, he shall cease to
be liable for the price upon returning or offering to return the goods. If the price or any part
thereof has already been paid, the seller shall be liable to repay so much thereof as has been
paid, concurrently with the return of the goods, or immediately after an offer to return the
goods in exchange for repayment of the price.

Where the buyer is entitled to rescind the sale and elects to do so, if the seller refuses
to accept an offer of the buyer to return the goods, the buyer shall thereafter be deemed to
hold the goods as bailee for the seller, but subject to a lien to secure the payment of any
portion of the price which has been paid, and with the remedies for the enforcement of such
lien allowed to an unpaid seller by Article 1526.781

(5) In the case of breach of warranty of quality, such loss, in the absence of special
circumstances showing proximate damage of a greater amount, is the difference between the
value of the goods at the time of delivery to the buyer and the value they would have had if
they had answered to the warranty.782

XIII. Breach of Contract

Violation of a contractual obligation by failing to perform one's own promise, by

repudiating it, or by interfering with another party's performance.783

A breach may be one by non-performance, or by repudiation, or by both. Every

breach gives rise to a claim for damages, and may give rise to other remedies. Even if the
injured party sustains no pecuniary loss or is unable to show such loss with sufficient
certainty, he has at least a claim for nominal damages. If a court chooses to ignore a trifling
departure, there is no breach and no claim arises.784

780
See Reference
781
Ibid.
782
Art. 1599
783 th
Blacks Law Dictionary, 9 Ed.
784
Ibid.

143
XIV. Extinguishment of the Sale

Obligations are extinguished by:

(1) Payment or performance;

(2) Loss of the thing due;
(3) Condonation or remission of the debt;
(4) Confusion or merger of the rights of creditor and debtor;
(5) Compensation;
(6) Novation.

Other causes:

1. Annulment,
2. Rescission,
3. Fulfillment of a resolutory condition, and
4. Prescription.785

Sales are extinguished by the same causes as all other obligations and by
conventional or legal redemption.786

XV. The Subdivision and Condominium Buyers' Protective Decree (P.D. 957)787

XVI. The Condominium Act (R.A. No. 4726)788

785
Art. 1231
786
Art. 1600
787
see Reference
788
Ibid.

144
SUCCESSION

I. General Provisions

The inheritance includes all the property, rights and obligations of a person which
are not extinguished by his death.789

Succession may be:

(1) Testamentary;
(2) Legal or intestate; or
(3) Mixed.790

Testamentary succession is that which results from the designation of an heir, made
in a will executed in the form prescribed by law.791

Mixed succession is that effected partly by will and partly by operation of law.792

Succession is a mode of acquisition by virtue of which the property, rights and

obligations to the extent of the value of the inheritance, of a person are transmitted through
his death to another or others either by his will or by operation of law.793

"Decedent" is the general term applied to the person whose property is transmitted
through succession, whether or not he left a will. If he left a will, he is also called the
testator.794

The inheritance of a person includes not only the property and the transmissible
rights and obligations existing at the time of his death, but also those which have accrued
thereto since the opening of the succession.795

The rights to the succession are transmitted from the moment of the death of the
decedent.796

An heir is a person called to the succession either by the provision of a will or by

operation of law.

Devisees and legatees are persons to whom gifts of real and personal property are
respectively given by virtue of a will.797

789
Art. 776
790
Art. 778
791
Art. 779
792
Art. 780
793
Art. 774
794
Art. 775
795
Art. 781
796
Art. 777

145
II. Testamentary Succession

A will is an act whereby a person is permitted, with the formalities prescribed by law,
to control to a certain degree the disposition of this estate, to take effect after his death.798

The testator may not make a testamentary disposition in such manner that another
person has to determine whether or not it is to be operative.799

The making of a will is a strictly personal act; it cannot be left in whole or in part to
the discretion of a third person, or accomplished through the instrumentality of an agent or
attorney.800

The duration or efficacy of the designation of heirs, devisees or legatees, or the

determination of the portions which they are to take, when referred to by name, cannot be
left to the discretion of a third person.801

The testator may entrust to a third person the distribution of specific property or
sums of money that he may leave in general to specified classes or causes, and also the
designation of the persons, institutions or establishments to which such property or sums
are to be given or applied.802

The validity of a will as to its form depends upon the observance of the law in force
at the time it is made.803

All persons who are not expressly prohibited by law may make a will.804

A married woman may make a will without the consent of her husband, and without
the authority of the court.805

A married woman may dispose by will of all her separate property as well as her
share of the conjugal partnership or absolute community property.806

797
Art. 782
798
Art. 783
799
Art. 787
800
Art. 784
801
Art. 785
802
Art. 786
803
Art. 795
804
Art. 796
805
Art. 802
806
Art. 803

146
III. Legal or Intestate Succession

Legal or intestate succession807 takes place:

1. If a person dies without a will

2. If a person dies with a void will

3. If a person dies with a will which has subsequently lost its validity

4. When the will does not institute an heir to, or dispose of all the property
belonging to the testator;808

5. If the suspensive condition attached to the institution of the heir does not happen
or is not fulfilled

6. If the heir dies before the testator,

7. If the heir repudiates the inheritance, there being no substitution, and no right of
accretion takes place

8. When the heir instituted is incapable of succeeding, except in cases provided in the
809
Code.

In default of testamentary heirs, the law vests the inheritance in the legitimate and
illegitimate relatives of the deceased, in the surviving spouse, and in the State.810

In every inheritance, the relative nearest in degree excludes the more distant ones,
saving the right of representation when it properly takes place.

Relatives in the same degree shall inherit in equal shares, subject to the provisions of
Article 1006811 with respect to relatives of the full and half blood, and of Article 987, par.
2,812 concerning division between the paternal and maternal lines.813

807
Fundamental underlying principles in legal or intestate succession:
1. Rule of Proximity the relative nearest in degree excludes the farther one
2. Rule of Equal Division the relatives who are in the same degree shall inherit in equal shares
808
Legal succession shall take place only with respect to the property of which the testator has not
disposed
809
Art. 960
810
Art. 961
811
Should brother and sisters of the full blood survive together with brothers and sisters of the half blood,
the former shall be entitled to a share double that of the latter.
812
Should there be more than one of equal degree belonging to the same line they shall divide the
inheritance per capita; should they be of different lines but of equal degree, one-half shall go to the
paternal and the other half to the maternal ascendants. In each line the division shall be made per capita.
813
Art. 962

147
 Proximity of relationship is determined by the number of generations. Each
generation forms a degree.814

A series of degrees forms a line, which may be either direct or collateral.

A direct line is that constituted by the series of degrees among ascendants and
descendants.

A collateral line is that constituted by the series of degrees among persons who are
not ascendants and descendants, but who come from a common ancestor.815

The direct line is either descending or ascending.

The former unites the head of the family with those who descend from him.

The latter binds a person with those from whom he descends.816

In the line, as many degrees are counted as there are generations or persons,
excluding the progenitor.

In the direct line, ascent is made to the common ancestor. Thus, the child is one
degree removed from the parent, two from the grandfather, and three from the great-
grandparent.

In the collateral line, ascent is made to the common ancestor and then descent is
made to the person with whom the computation is to be made. Thus, a person is two
degrees removed from his brother, three from his uncle, who is the brother of his father,
four from his first cousin, and so forth.817

Full blood relationship is that existing between persons who have the same father
and the same mother.

Half-blood relationship is that existing between persons who have the same father,
but not the same mother, or the same mother, but not the same father.818

If there are several relatives of the same degree, and one or some of them are
unwilling or incapacitated to succeed, his portion shall accrue to the others of the same
degree, save the right of representation when it should take place.819

If the inheritance should be repudiated by the nearest relative, should there be one
only, or by all the nearest relatives called by law to succeed, should there be several, those of

814
Art. 963
815
Art. 964
816
Art. 965
817
Art. 966
818
Art. 967
819
Art. 968

148
the following degree shall inherit in their own right and cannot represent the person or
persons repudiating the inheritance.820

Representation is a right created by fiction of law, by virtue of which the

representative is raised to the place and the degree of the person represented, and acquires
the rights which the latter would have if he were living or if he could have inherited.821

The representative is called to the succession by the law and not by the person
represented. The representative does not succeed the person represented but the one whom
the person represented would have succeeded.822

The right of representation takes place in the direct descending line, but never in the
ascending.

In the collateral line, it takes place only in favor of the children of brothers or sisters,
whether they be of the full or half blood.823

In order that representation may take place, it is necessary that the representative
himself be capable of succeeding the decedent.824

Whenever there is succession by representation, the division of the estate shall be

made per stirpes, in such manner that the representative or representatives shall not inherit
more than what the person they represent would inherit, if he were living or could inherit.825

When children of one or more brothers or sisters of the deceased survive, they shall
inherit from the latter by representation, if they survive with their uncles or aunts. But if they
alone survive, they shall inherit in equal portions.826

A person may represent him whose inheritance he has renounced.827

Heirs who repudiate their share may not be represented.828

Succession pertains, in the first place, to the descending direct line.829

Legitimate children and their descendants succeed the parents and other ascendants,
without distinction as to sex or age, and even if they should come from different marriages.

820
Art. 969
821
Art. 970
822
Art. 971
823
Art. 972
824
Art. 973
825
Art. 974
826
Art. 975
827
Art. 976
828
Art. 977
829
Art. 978

149
 An adopted child succeeds to the property of the adopting parents in the same
manner as a legitimate child.830

The children of the deceased shall always inherit from him in their own right,
dividing the inheritance in equal shares.831

Should children of the deceased and descendants of other children who are dead,
survive, the former shall inherit in their own right, and the latter by right of representation.832

The grandchildren and other descendants shall inherit by right of representation, and
if any one of them should have died, leaving several heirs, the portion pertaining to him shall
be divided among the latter in equal portions.833

If illegitimate children survive with legitimate children, the shares of the former shall
be in the proportions prescribed by article 895.834

In case of the death of an adopted child, leaving no children or descendants, his

parents and relatives by consanguinity and not by adoption, shall be his legal heirs.835

In default of legitimate children and descendants of the deceased, his parents and
ascendants shall inherit from him, to the exclusion of collateral relatives.836

The father and mother, if living, shall inherit in equal shares.

Should one only of them survive, he or she shall succeed to the entire estate of the
child.837

In default of the father and mother, the ascendants nearest in degree shall inherit.

Should there be more than one of equal degree belonging to the same line they shall
divide the inheritance per capita; should they be of different lines but of equal degree, one-
half shall go to the paternal and the other half to the maternal ascendants. In each line the
division shall be made per capita.838

In the absence of legitimate descendants or ascendants, the illegitimate children shall

succeed to the entire estate of the deceased.839

830
Art. 979
831
Art. 980
832
Art. 981
833
Art. 982
834
Art. 983
835
Art. 984
836
Art. 985
837
Art. 986
838
Art. 987
839
Art. 988

150
 If, together with illegitimate children, there should survive descendants of another
illegitimate child who is dead, the former shall succeed in their own right and the latter by
right of representation.840

The hereditary rights granted by the two preceding articles to illegitimate children
shall be transmitted upon their death to their descendants, who shall inherit by right of
representation from their deceased grandparent.841

If legitimate ascendants are left, the illegitimate children shall divide the inheritance
with them, taking one-half of the estate, whatever be the number of the ascendants or of the
illegitimate children.842

An illegitimate child has no right to inherit ab intestato from the legitimate children
and relatives of his father or mother; nor shall such children or relatives inherit in the same
manner from the illegitimate child.843

If an illegitimate child should die without issue, either legitimate or illegitimate, his
father or mother shall succeed to his entire estate; and if the child's filiation is duly proved as
to both parents, who are both living, they shall inherit from him share and share alike.844

In default of the father or mother, an illegitimate child shall be succeeded by his or

her surviving spouse who shall be entitled to the entire estate.

If the widow or widower should survive with brothers and sisters, nephews and
nieces, she or he shall inherit one-half of the estate, and the latter the other half.845

In the absence of legitimate descendants and ascendants, and illegitimate children

and their descendants, whether legitimate or illegitimate, the surviving spouse shall inherit
the entire estate, without prejudice to the rights of brothers and sisters, nephews and nieces,
should there be any, under Article 1001.846

If a widow or widower and legitimate children or descendants are left, the surviving
spouse has in the succession the same share as that of each of the children.847

When the widow or widower survives with legitimate parents or ascendants, the
surviving spouse shall be entitled to one-half of the estate, and the legitimate parents or
ascendants to the other half.848

840
Art. 989
841
Art. 990
842
Art. 991
843
Art. 992
844
Art. 993
845
Art. 994
846
Art. 995
847
Art. 996
848
Art. 997

151
 If a widow or widower survives with illegitimate children, such widow or widower
shall be entitled to one-half of the inheritance, and the illegitimate children or their
descendants, whether legitimate or illegitimate, to the other half.849

When the widow or widower survives with legitimate children or their descendants
and illegitimate children or their descendants, whether legitimate or illegitimate, such widow
or widower shall be entitled to the same share as that of a legitimate child.850

If legitimate ascendants, the surviving spouse, and illegitimate children are left, the
ascendants shall be entitled to one-half of the inheritance, and the other half shall be divided
between the surviving spouse and the illegitimate children so that such widow or widower
shall have one-fourth of the estate, and the illegitimate children the other fourth.851

Should brothers and sisters or their children survive with the widow or widower, the
latter shall be entitled to one-half of the inheritance and the brothers and sisters or their
children to the other half.852

In case of a legal separation, if the surviving spouse gave cause for the separation, he
or she shall not have any of the rights granted in the preceding articles.853

If there are no descendants, ascendants, illegitimate children, or a surviving spouse,

the collateral relatives shall succeed to the entire estate of the deceased in accordance with
the following articles.854

Should the only survivors be brothers and sisters of the full blood, they shall inherit
in equal shares.855

Should brothers and sisters survive together with nephews and nieces, who are the
children of the descendant's brothers and sisters of the full blood, the former shall inherit
per capita, and the latter per stirpes.856

Should brother and sisters of the full blood survive together with brothers and sisters
of the half blood, the former shall be entitled to a share double that of the latter.857

In case brothers and sisters of the half blood, some on the father's andsome on the
mother's side, are the only survivors, all shall inherit in equal shares without distinction as to
the origin of the property.858

849
Art. 998
850
Art. 999
851
Art. 1000
852
Art. 1001
853
Art. 1002
854
Art. 1003
855
Art. 1004
856
Art. 1005
857
Art. 1006
858
Art. 1007

152
 Children of brothers and sisters of the half-blood shall succeed per capita or per
stirpes, in accordance with the rules laid down for brothers and sisters of the full blood.859

Should there be neither brothers nor sisters nor children of brothers or sisters, the
other collateral relatives shall succeed to the estate.

The latter shall succeed without distinction of lines or preference among them by
reason of relationship by the whole blood.860

The right to inherit ab intestato shall not extend beyond the fifth degree of
relationship in the collateral line.861

In default of persons entitled to succeed, the State shall inherit the whole estate.862

In order that the State may take possession of the property mentioned in the
preceding article, the pertinent provisions of the Rules of Court must be observed.863

After the payment of debts and charges, the personal property shall be assigned to
the municipality or city where the deceased last resided in the Philippines, and the real estate
to the municipalities or cities, respectively, in which the same is situated.

If the deceased never resided in the Philippines, the whole estate shall be assigned to
the respective municipalities or cities where the same is located.

Such estate shall be for the benefit of public schools, and public charitable
institutions and centers, in such municipalities or cities. The court shall distribute the estate
as the respective needs of each beneficiary may warrant.

The court, at the instance of an interested party, or on its own motion, may order the
establishment of a permanent trust, so that only the income from the property shall be
used.864

If a person legally entitled to the estate of the deceased appears and files a claim
hereto with the court within five (5) years from the date the property was delivered to the
State, such person shall be entitled to the possession of the same, or if sold, the municipality
or city shall be accountable to him for such part of the proceeds as may not have been
lawfully spent.865

859
Art. 1008
860
Art. 1009
861
Art. 1010
862
Art. 1011
863
Art. 1012
864
Art. 1013
865
Art. 1014

153
IV. Provisions Common to Testate and Intestate Succession

Accretion is a right by virtue of which, when two or more persons are called to the
same inheritance, devise or legacy, the part assigned to the one who renounces or cannot
receive his share, or who died before the testator, is added or incorporated to that of his co-
heirs, co-devisees, or co-legatees.866

In order that the right of accretion may take place in a testamentary succession, it
shall be necessary:

(1) That two or more persons be called to the same inheritance, or to the same
portion thereof, pro indiviso; and

(2) That one of the persons thus called die before the testator, or renounce the
inheritance, or be incapacitated to receive it.867

Persons Incapable of Succeeding:

(1) The priest who heard the confession of the testator during his last illness, or the
minister of the gospel who extended spiritual aid to him during the same period;

(2) The relatives of such priest or minister of the gospel within the fourth degree, the
church, order, chapter, community, organization, or institution to which such priest or
minister may belong;

(3) A guardian with respect to testamentary dispositions given by a ward in his favor
before the final accounts of the guardianship have been approved, even if the testator should
die after the approval thereof; nevertheless, any provision made by the ward in favor of the
guardian when the latter is his ascendant, descendant, brother, sister, or spouse, shall be
valid;

(4) Any attesting witness to the execution of a will, the spouse, parents, or children,
or any one claiming under such witness, spouse, parents, or children;

(5) Any physician, surgeon, nurse, health officer or druggist who took care of the
testator during his last illness;

(6) Individuals, associations and corporations not permitted by law to inherit.868

866
Art. 1015
867
Art. 1016
868
Art. 1027

154
 The following donations shall be void:

(1) Those made between persons who were guilty of adultery or concubinage at the
time of the donation;

(2) Those made between persons found guilty of the same criminal offense, in
consideration thereof;

(3) Those made to a public officer or his wife, descendants and ascendants, by reason
of his office.

In the case referred to in No. 1, the action for declaration of nullity may be brought
by the spouse of the donor or donee; and the guilt of the donor and donee may be proved
by preponderance of evidence in the same action.869

The following are incapable of succeeding by reason of unworthiness:

(1) Parents who have abandoned their children or induced their daughters to lead a
corrupt or immoral life, or attempted against their virtue;

(2) Any person who has been convicted of an attempt against the life of the testator,
his or her spouse, descendants, or ascendants;

(3) Any person who has accused the testator of a crime for which the law prescribes
imprisonment for six years or more, if the accusation has been found groundless;

(4) Any heir of full age who, having knowledge of the violent death of the testator,
should fail to report it to an officer of the law within a month, unless the authorities have
already taken action; this prohibition shall not apply to cases wherein, according to law, there
is no obligation to make an accusation;

(5) Any person convicted of adultery or concubinage with the spouse of the testator;

(6) Any person who by fraud, violence, intimidation, or undue influence should
cause the testator to make a will or to change one already made;

(7) Any person who by the same means prevents another from making a will, or
from revoking one already made, or who supplants, conceals, or alters the latter's will;

(8) Any person who falsifies or forges a supposed will of the decedent.870

869
Art. 739
870
Art. 1032

155
PARTNERSHIP

I. Contract of Partnership

By the contract of partnership two or more persons bind themselves to contribute

money, property or industry to a common fund, with the intention of dividing the profits
among themselves.

Two or more persons may also form a partnership for the exercise of a profession.

II. Rights and Obligations of Partnership

The partnership can, in general:

a) enter into contracts

b) acquire and possess property of all kinds
c) incur obligations
d) bring civil and criminal actions
e) be adjudged insolvent even if the individual members be each financially
solvent
f) bear risk of loss871
g) reimburse872
h) operate under firm name873
i) bound by partners admission874

871
Partnership bears the risk: when what is contributed is a fungible thing, thing which cant be kept
without deteriorating, if the thing was contributed to be sold, and contributions are appraised in the
inventory (Art. 1795, CC)
872
3 obligations of the partnership:
1. refund disbursements with legal interest
2. answer for obligations contracted in good faith in the partnerships interest
3. answer for risks (Art. 1796, CC)
Partner = agent. Being a mere agent, he isnt personally liable as long as hes not at fault (Art. 1912,
CC) and acted within the scope of his authority. But unlike an ordinary agent, the paying partner doesnt
have the right of retention if he isnt paid.
873
Every partnership shall operate under a firm name (Art. 1815, CC) to distinguish the partnership from
other entities & from the individual partners.
Non-members whose names were used: dont have the rights of a partner but are liable to 3rd
persons without notice as partners (Art. 1815, CC). They become partners by estoppel (PNB v. Lo).
Use of deceased partners name in law firm: permissible as long as its indicated in the firms
communications that the partner is deceased (Rule 3.02, CPR)
Other rules:
1. a person continuing the partnership after a dissolution uses the firm name/name of deceased
partner as part of the name: deceased partners individual property isnt liable for debts contracted (Art.
1840, CC)
2. the limited partners surname shall not appear in the firm name unless
a. its also the surname of a general partner
b. before the limited partner became such, the business had been carried on under a name in
which his surname appeared (Art. 1846, CC)
874
Requisites to be admissible against the partnership:

156
 j) bound by notice to partner875
k) liable for wrongful act of partner876

III. Rights and Obligations of Partners Among Themselves

Rights:

1. Property rights

a) His rights in the specific partnership property

b) His interest in the partnership
c) His right to participate in the management

2. Right to reimbursement for amounts advanced to the partnership and to

indemnification for risks in consequence of management

3. Right to associate with another person in his share

4. Right of access and inspection of partnership books
5. Right to true and full information of all things affecting the partnership
6. Right to a formal account of partnership affairs under certain circumstances877
7. Right to have partnership dissolved under certain conditions.

Obligations:

1. With respect to contribution of property

a) To contribute what had been promised

1. it must be connected with partnership affairs

2. its within the scope of the partners authority (Art. 1820, CC) as may be just and equitable under
the circumstances according to capital contribution.
3. Purely industrial partner not liable for losses
Exception: when a partner makes admissions for himself only without purporting to act for the
partnership
Admission by a former partner not admissible in evidence against the partnership. (Congco vs.
Trillana)
875
Notice to the firm:
1. Notice to a partner while already a partner
2. Knowledge is acquired by a partner whos acting in a particular matter, WON a partner at the time
as long as he still remembers the partnership matter
3. The partner who acquired it has reason to believe that it be the subject of the business, and
couldve communicated it to the acting partner (Art. 1821, CC)
876
Extent of liability for wrongful acts, omissions of a partner: firm is liable to the same extent as the
partner (Art. 1822, CC).
Misapplication of money/property resulting in losses: if loss is suffered by the 3rd person who
delivered the money/property, the partnership is solidarily liable with the misappropriating partner (Art.
1823, CC).
877
The ten (10) year period to demand an accounting by a partner begins at the dissolution of the
partnership.

157
 b) To answer for eviction in case the partnership is deprived of determinate
property contributed

c) To answer to the partnership for the fruits of the property the contribution
of which is delayed, from the date they should have been contributed to the
time of actual delivery

d) To preserve the property with the diligence of a good father of a family

pending delivery to the partnership

e) To indemnify the partners for any damages caused to it by the retention of

the same or by delay in its contribution.

2. With respect to contribution of money and money converted to personal use

a) To contribute on the date due the amount he has undertaken to

contribute to the partnership

b) To reimburse any amount he may have taken from the partnership coffers
and converted to his own personal use

c) To pay the agreed or legal interest, if he fails to pay his contribution on

time or in case he takes any amount from the common fund and converted to his
own personal use

d) To indemnify the partnership for the damages caused to it by the delay in

the contribution or the conversion of any sum for his personal benefit.

3. Not to Engage in Other Business for Himself

Industrial partner- cannot engage in any business for himself unless the partnership
expressly permits him to do so. The other partners have the remedy of either excluding the
erring partner from the firm or of availing themselves of the benefits which he may have
obtained.878

Capitalist partner- The prohibition extends only to any operation which is of the
same kind of business in which the partnership is engaged unless there is a stipulation to the
contrary.

878
The prohibition is absolute and applies whether the industrial partner is to engage in the same business
in which the partnership is engaged or in any kind of business. It is clear that the reason for the
prohibition exists in both cases, which is to prevent any conflict of interest between the industrial partner
and the partnership and to insure faithful compliance by said partner with his prestation (Evangelista &
Co. vs. Abad Santos, 51 SCRA 416, 1973)

158
 4. To Contribute Additional Capital

As a general rule, a capitalist partner is not bound to contribute to the partnership

more than what he agreed to contribute but in case of an imminent loss of the business, and
there is no agreement to the contrary, he is under obligation to contribute an additional
share to save the venture. If he refuses to contribute, he shall be obliged to sell his interest in
the partnership to other partners.

5. Of Managing Partner who Collects Debt

Where a person is separately indebted to the partnership and to the managing

partner at the same time, any sum received by the managing partner shall be applied to the
two credits in proportion to their amounts, except where he received it entirely for the
account of the partnership, in which case the whole sum shall be applied to the partnership
credit only.

6. Of Partner Who Receives Share in Partnership Credit

A partner who receives, in whole or in part, his share in the partnership, when the
others have not collected theirs, shall be obliged, if the debtor should thereafter become
insolvent, to bring to the partnership capital what he received even though he may have
given receipt for his share only.879

7. Of Partner for Damages to Partnership

Every partner is responsible to the partnership for damages suffered by it through

his fault. He cannot compensate them with the profits and benefits which he may have
earned for the partnership by his industry.

8. Duty to Render Information

Partners shall render on demand true and full information of all things affecting the
partnership to any partner or the legal representative of any deceased partner of any partner
under legal disability.

9. Obligation to account for any benefit and hold as trustee unauthorized personal
profits

Every partner must account to the partnership for any benefit, and hold as trustee
for it any profits derived by him without the consent of the other partners from any
transaction connected with the formation, conduct, liquidation of the partnership or form
any use by him of its property.

879
Requisites for application of rule:
1) A partner has received, in whole or in part, his share in the partnership credit
2) The other partners have not collected their shares.
3) The partnership debtor has become insolvent.

159
IV. Obligations of Partnership/Partners to Third Persons

Liability for contractual obligations:880

All partners, including industrial partners, are personally liable with all their property.
Their individual liability is pro rata and subsidiary, unless otherwise stipulated

Liability of partnership for acts of partners:

a. Acts for apparently carrying on in the usual way the business of the
partnership

General rule: Act binds the partnership.

Exception: Partnership is not bound if:

i. acting partner has in fact no authority and

ii. the third person knows that the acting partner has no authority

b. Acts of Strict Dominion or Ownership881

General rule: Act does not bind the partnership.

Exception: Partnership is bound if:

i. the act is authorized by all the partners; or

ii. they have abandoned the business

c. Acts in contravention of a restriction on authority

Partnership is not liable to third persons having actual or presumptive

knowledge of the restrictions.

Liability arising from partners tort or breach of trust:

a. Where, by any wrongful act or omission of any partner acting in the

ordinary course of business of the partnership or with authority of his co-partners,
loss or injury is caused to any person, not being a partner in the partnership882

b. Where one partner, acting within the scope of his apparent authority,
receives money or property of a third person and misapplies it883

c. Where the partnership, in the course of its business, receives money or

property and it is misapplied by any partner while it is in the custody of the
partnership884

880
Art. 1816
881
Acts which are not apparently for carrying on in the usual way the business of the partnership
882
Art. 1822
883
Art. 1823

160
V. Dissolution

Change in the relation of the partners caused by any partner ceasing to be associated
in carrying on the business.885

It is the point in time when the partners cease to carry on the business together. It
represents the demise of a partnership.

Dissolution is caused:

(1) Without violation of the agreement between the partners:

(a) By the termination of the definite term or particular undertaking specified

in the agreement;

(b) By the express will of any partner, who must act in good faith, when no
definite term or particular is specified;

(c) By the express will of all the partners who have not assigned their
interests or suffered them to be charged for their separate debts, either before or
after the termination of any specified term or particular undertaking;

(d) By the expulsion of any partner from the business bona fide in
accordance with such a power conferred by the agreement between the partners;

(2) In contravention of the agreement between the partners, where the circumstances
do not permit a dissolution under any other provision of this article, by the express will of
any partner at any time;

(3) By any event which makes it unlawful for the business of the partnership to be
carried on or for the members to carry it on in partnership;

(4) When a specific thing which a partner had promised to contribute to the
partnership, perishes before the delivery; in any case by the loss of the thing, when the
partner who contributed it having reserved the ownership thereof, has only transferred to
the partnership the use or enjoyment of the same; but the partnership shall not be dissolved
by the loss of the thing when it occurs after the partnership has acquired the ownership
thereof;

884
Ibid
Criminal liability of partnership:
Partnership liability does not extend to criminal liability where the wrongdoing is regarded as
individual in character. But where the crime is statutory, especially when it involves a fine rather than
imprisonment, criminal liability may be imposed
All partners are solidarily liable with the partnership for any penalty or damage arising from a
partnership tort or breach of trust
885
Art. 1828

161
 (5) By the death of any partner;

(6) By the insolvency of any partner or of the partnership;

(7) By the civil interdiction of any partner;

(8) By decree of court under the following article.

VI. Limited Partnership

One formed by two or more persons having as members one or more general
partners and one or more limited partners, the latter not being personally liable for the
obligations of the partnership.

AGENCY

I. Definition of Agency

A contract whereby a person886 binds himself to render some service or to do

something in representation or on behalf of another887 with the consent or authority of the
latter.888

II. Powers

The agent who acts as such is not personally liable to the party with whom he
contracts, unless he expressly binds himself or exceeds the limits of his authority without
giving such party sufficient notice of his powers.889

If the agent contracts in the name of the principal, exceeding the scope of his
authority, and the principal does not ratify the contract, it shall be void if the party with
whom the agent contracted is aware of the limits of the powers granted by the principal. In
this case, however, the agent is liable if he undertook to secure the principal's ratification.890

If a duly authorized agent acts in accordance with the orders of the principal, the
latter cannot set up the ignorance of the agent as to circumstances whereof he himself was,
or ought to have been, aware.891

886
agent
887
principal
888
Art. 1868
889
Art. 1897
890
Art. 1898
891
Art. 1899

162
 So far as third persons are concerned, an act is deemed to have been performed
within the scope of the agent's authority, if such act is within the terms of the power of
attorney, as written, even if the agent has in fact exceeded the limits of his authority
according to an understanding between the principal and the agent.892

A third person cannot set up the fact that the agent has exceeded his powers, if the
principal has ratified, or has signified his willingness to ratify the agent's acts.893

A third person with whom the agent wishes to contract on behalf of the principal
may require the presentation of the power of attorney, or the instructions as regards the
agency. Private or secret orders and instructions of the principal do not prejudice third
persons who have relied upon the power of attorney or instructions shown them.894

If an agent acts in his own name, the principal has no right of action against the
persons with whom the agent has contracted; neither have such persons against the
principal.

In such case, the agent is the one directly bound in favor of the person with whom
he has contracted, as if the transaction were his own, except when the contract involves
things belonging to the principal.

The provisions shall be understood to be without prejudice to the actions between

the principal and agent.895

III. Express vs. Implied Agency

Express Implied896
One where the agent has been actually One which is implied from the
authorized by the principal, either orally or in
writing; 1. acts of the principal- from his silence or
lack of action, or his failure to repudiate the
agency knowing that another person is acting
on his behalf without authority.

2. Acts of the agent- when he carries out the

agency, or from his silence or inaction
according to the circumstances.

892
Art. 1900
893
Art. 1901
894
Art. 1902
895
Art. 1883
896
The principal is still bound by the acts of the agent just as in case of express agency

163
IV. Agency by Estoppel

One who clothes another with apparent authority as his agent, and holds him out to
the public as such, cannot be permitted to deny the authority of such person in good faith,
and in the honest belief that he is what he appears to be.897

V. General vs. Special Agency

General Agency Special Agency

One which comprises all the business of the One which comprises one or more specific
principal transactions

VI. Agency Couched in General Terms

One which is created in general terms and is deemed to comprise only acts of
administration.

VII. Agency Requiring Special Power of Attorney

The scope of the agents authority is what appears in the written terms of the power
of attorney. While third persons are bound to inquire into the extent or scope of the agents
authority, they are not required to go beyond the terms of the written power of attorney.
Third persons cannot be adversely affected by an understanding between the principal and
his agent as to the limits of the latters authority. In the same way, third persons need not
concern themselves with instructions given by the principal to his agent outside the written
power of attorney.898

VIII. Agency by Operation of Law

The concept is essentially one of estoppel and has been explained in this manner:

"The principal is bound by the acts of his agent with the apparent authority which he
knowingly permits the agent to assume, or which he holds the agent out to the public as
possessing. The question in every case is whether the principal has by his voluntary act
placed the agent in such a situation that a person of ordinary prudence, conversant with
business usages and the nature of the particular business, is justified in presuming that such
agent has authority to perform the particular act in question.899

897
Cuison vs. CA, GR.88531, October 26, 1993
898
Siredy Enterprises, Inc. vs. CA, et al. GR 129039, September 27, 2002
A third person with whom the agent wishes to contract on behalf of the principal may require the
presentation of the power of attorney or the instructions as regards the agency; except private or secret
orders.
899
Irving v. Doctors Hospital of Lake Worth, Inc., 415 So. 2d 55 (1982), quoting Arthur v. St. Peters
Hospital, 169 N.J. 575, 405 A. 2d 443 (1979)

164
IX. Rights and Obligations of Principal

The principal must comply with all the obligations which the agent may have
contracted within the scope of his authority.

As for any obligation wherein the agent has exceeded his power, the principal is not
bound except when he ratifies it expressly or tacitly.900

When the agent has exceeded his authority, the principal is solidarily liable with the
agent if the former allowed the latter to act as though he had full powers.901

The principal must advance to the agent, should the latter so request, the sums
necessary for the execution of the agency.

Should the agent have advanced them, the principal must reimburse him therefor,
even if the business or undertaking was not successful, provided the agent is free from all
fault.

The reimbursement shall include interest on the sums advanced, from the day on
which the advance was made.902

The principal must also indemnify the agent for all the damages which the execution
of the agency may have caused the latter, without fault or negligence on his part.903

The agent may retain in pledge the things which are the object of the agency until the
principal effects the reimbursement and pays the indemnity set forth in the two preceding
articles.904

If two or more persons have appointed an agent for a common transaction or

undertaking, they shall be solidarily liable to the agent for all the consequences of the
agency.905

When two persons contract with regard to the same thing, one of them with the
agent and the other with the principal, and the two contracts are incompatible with each
other, that of prior date shall be preferred, without prejudice to the provisions of Article
1544.906

Agency by estoppel is defined as "one created by operation of law and established by proof of such
acts of the principal as reasonably lead third persons to the conclusion of its existence. Arises where
principal by negligence in failing to supervise agents affairs, allows agent to exercise powers not granted
to him, thus justifying others in believing the agent possesses requisite authority
900
Art. 1910
901
Art. 1911
902
Art. 1912
903
Art. 1913
904
Art. 1914
905
Art. 1915
906
Art. 1916

165
 In the case referred to in the preceding article, if the agent has acted in good faith,
the principal shall be liable in damages to the third person whose contract must be rejected.
If the agent acted in bad faith, he alone shall be responsible.907

The principal is not liable for the expenses incurred by the agent in the following
cases:

(1) If the agent acted in contravention of the principal's instructions, unless the latter
should wish to avail himself of the benefits derived from the contract;

(2) When the expenses were due to the fault of the agent;

(3) When the agent incurred them with knowledge that an unfavorable result would
ensue, if the principal was not aware thereof;

(4) When it was stipulated that the expenses would be borne by the agent, or that the
latter would be allowed only a certain sum.908

X. Irrevocable Agency

An agency cannot be revoked if a bilateral contract depends upon it, or if it is the

means of fulfilling an obligation already contracted, or if a partner is appointed manager of a
partnership in the contract of partnership and his removal from the management is
unjustifiable.909

The agent may withdraw from the agency by giving due notice to the principal. If the
latter should suffer any damage by reason of the withdrawal, the agent must indemnify him
therefor, unless the agent should base his withdrawal upon the impossibility of continuing
the performance of the agency without grave detriment to himself. 910

The agent, even if he should withdraw from the agency for a valid reason, must
continue to act until the principal has had reasonable opportunity to take the necessary steps
to meet the situation.911

The agency shall remain in full force and effect even after the death of the principal,
if it has been constituted in the common interest of the latter and of the agent, or in the
interest of a third person who has accepted the stipulation in his favor.912

907
Art. 1917
908
Art. 1918
909
Art. 1927
910
Art. 1928
911
Art. 1929
912
Art. 1930

166
XI. Modes of Extinguishment

1. Expiration of the period

2. Death, civil interdiction, insanity or insolvency of the principal or of the agent
3. Withdrawal of the agent913
4. Accomplishment of the object or the purpose of the agency
5. Revocation
6. Dissolution of the firm or corporation, which entrusted or accepted the agency

COMPROMISE

I. Definition

A contract whereby the parties, by making reciprocal concessions, avoid a litigation

or put an end to one already commenced.914

II. Void Compromise

No compromise upon the following questions shall be valid:

(1) The civil status of persons;

(2) The validity of a marriage or a legal separation;
(3) Any ground for legal separation;
(4) Future support;
(5) The jurisdiction of courts;
(6) Future legitime 915

III. Effect

The effect and authority of res judicata; but there shall be no execution except in
compliance with a judicial compromise.916

If one of the parties fails or refuses to abide by the compromise, the other party may
either enforce the compromise or regard it as rescinded and insist upon his original
demand.917

913
Agent may withdraw by giving notice to the principal, but must indemnify the principal for damages
that he may suffer by reason of such withdrawal.
914
Art. 2028
915
Art. 2035
916
Art. 2037
917
Art. 2041

167
CREDIT TRANSACTIONS

I. Loan

By the contract of loan, one of the parties delivers to another, either something not
consumable so that the latter may use the same for a certain time and return it, in which case
the contract is called a commodatum; or money or other consumable thing, upon the
condition that the same amount of the same kind and quality shall be paid, in which case the
contract is simply called a loan or mutuum.

Commodatum is essentially gratuitous.

Simple loan may be gratuitous or with a stipulation to pay interest.

In commodatum the bailor retains the ownership of the thing loaned, while in simple
loan, ownership passes to the borrower.918

An accepted promise to deliver something by way ofcommodatum or simple loan is

binding upon parties, but the commodatumor simple loan itself shall not be perfected until the
delivery of the object of the contract.919

II. Deposit

A contract constituted from the moment a person receives a thing belonging to

another, with the obligation of safely keeping it and of returning the same.

Voluntary deposit Necessary deposit Judicial deposit920

One wherein One made in compliance When an attachment or

the delivery is made with a legal obligation, or on the seizure of property in litigation
by the will of the occasion of any calamity, or by is ordered.
depositor or by two or travellers in hotels and inns,922 or
more persons each of by travellers with common
whom believes carriers.923
himself entitled to the
thing deposited.921

918
Art. 1933
919
Art. 1934
920
Sequestration
921
Arts. 1968 1995
922
Arts. 1996 - 2004
923
Arts. 1734 1735

168
III. Guaranty and Suretyship

By guaranty a person, called the guarantor, binds himself to the creditor to fulfill the
obligation of the principal debtor in case the latter should fail to do so.

If a person binds himself solidarily with the principal debtor, the provisions of
Section 4, Chapter 3, Title I of this Book shall be observed. In such case the contract is
called a suretyship.924

A guaranty is gratuitous, unless there is a stipulation to the contrary.925

A married woman may guarantee an obligation without the husband's consent, but
shall not thereby bind the conjugal partnership, except in cases provided by law.926

If a guaranty is entered into without the knowledge or consent, or against the will of
the principal debtor, the provisions of Articles 1236 and 1237 shall apply.927

A guaranty may be conventional, legal or judicial, gratuitous, or by onerous title.

It may also be constituted, not only in favor of the principal debtor, but also in favor
of the other guarantor, with the latter's consent, or without his knowledge, or even over his
objection.928

A guaranty cannot exist without a valid obligation.

Nevertheless, a guaranty may be constituted to guarantee the performance of a

voidable or an unenforceable contract. It may also guarantee a natural obligation.929

A guaranty may also be given as security for future debts, the amount of which is not
yet known; there can be no claim against the guarantor until the debt is liquidated. A
conditional obligation may also be secured.930

A guarantor may bind himself for less, but not for more than the principal debtor,
both as regards the amount and the onerous nature of the conditions.

Should he have bound himself for more, his obligations shall be reduced to the limits
of that of the debtor.931

924
Art. 2047
925
Art. 2048
926
Art. 2049
927
Art. 2050
928
Art. 2051
929
Art. 2052
930
Art. 2053
931
Art. 2054

169
 A guaranty is not presumed; it must be express and cannot extend to more than what
is stipulated therein.

If it be simple or indefinite, it shall compromise not only the principal obligation, but
also all its accessories, including the judicial costs, provided with respect to the latter, that the
guarantor shall only be liable for those costs incurred after he has been judicially required to
pay.932

One who is obliged to furnish a guarantor shall present a person who possesses
integrity, capacity to bind himself, and sufficient property to answer for the obligation which
he guarantees. The guarantor shall be subject to the jurisdiction of the court of the place
where this obligation is to be complied with.933

If the guarantor should be convicted in first instance of a crime involving dishonesty

or should become insolvent, the creditor may demand another who has all the qualifications
required in the preceding article. The case is excepted where the creditor has required and
stipulated that a specified person should be the guarantor.934

When there are two or more guarantors of the same debtor and for the same debt,
the one among them who has paid may demand of each of the others the share which is
proportionally owing from him.

If any of the guarantors should be insolvent, his share shall be borne by the others,
including the payer, in the same proportion. The provisions shall not be applicable, unless
the payment has been made by virtue of a judicial demand or unless the principal debtor is
insolvent.935

The co-guarantors may set up against the one who paid, the same defenses which
would have pertained to the principal debtor against the creditor, and which are not purely
personal to the debtor.936

A sub-guarantor, in case of the insolvency of the guarantor for whom he bound

himself, is responsible to the co-guarantors in the same terms as the guarantor.937

Extinguishment of guaranty:

1. Release in favor of one of the guarantors, without the consent of the others,
benefits all to the extent of the share of the guarantor to whom it has been granted;938

932
Art. 2055
933
Art. 2056
934
Art. 2057
935
Art. 2073
936
Art. 2074
937
Art. 2075
938
Art. 2078

170
 2. If the creditor voluntarily accepts immovable or other properties in payment of
the debt, even if he should afterwards lose the same through eviction or conveyance of
property;939

3. Whenever by some act of the creditor, the guarantors even though they are
solidarily liable cannot be subrogated to the rights, mortgages and preferences of the
former;940

4. For the same causes as all other obligations;941

5. When the principal obligation is extinguished;

6. Extension granted to the debtor by the creditor without the consent of the
guarantor.942

IV. Pledge

A contract wherein the debtor delivers to the creditor or to a third person a movable
or document evidencing incorporeal rights for the purpose of securing fulfillment of a
principal obligation with the understanding that when the obligation is fulfilled, the thing
delivered shall be returned with all its fruits and accessions.

V. Real Mortgage

A contract whereby the debtor secures to the creditor the fulfilment of a principal
obligation, specially subjecting to such security immovable property or real rights over
immovable property in case the principal obligation is not complied with at the time
stipulated.

Act 3135, as amended by R.A. No. 4118.943

VI. Antichresis

A contract whereby the creditor acquires the right to receive the fruits of an
immovable of the debtor, with the obligation to apply them to the payment of the interest, if
owing, and thereafter to the principal of his credit..944

VII. Chattel Mortgage

A contract by virtue of which personal property is recorded in the Chattel Mortgage

Register as a security for the performance of an obligation.945

939
Art. 2077
940
Art. 2080
941
Art. 1231
942
Art. 2079
943
see Reference
944
Art. 2132

171
 Act 1508.946

VIII. Quasi-contracts

Negotiorum Gestio Solutio Indebiti -

Arises whenever a person Arises whenever a person unduly

voluntarily takes charge of the agency or delivers a thing through mistake to
management of the business or property another who has no right to demand it.
of another without any power or
authority from the latter.

IX. Concurrence and Preference of Credits

Concurrence of Credits Preference of Credit

Possession by two or more creditors of equal Right held by a creditor to be preferred in

rights or privileges over the same property or the payment of his claim above others out of
all of the property of the debtor the debtors assets

With reference to specific movable property of the debtor, the following claims or
liens shall be preferred:

(1) Duties, taxes and fees due thereon to the State or any subdivision thereof;

(2) Claims arising from misappropriation, breach of trust, or malfeasance by public

officials committed in the performance of their duties, on the movables, money or securities
obtained by them;

(3) Claims for the unpaid price of movables sold, on said movables, so long as they
are in the possession of the debtor, up to the value of the same; and if the movable has been
resold by the debtor and the price is still unpaid, the lien may be enforced on the price; this
right is not lost by the immobilization of the thing by destination, provided it has not lost its
form, substance and identity; neither is the right lost by the sale of the thing together with
other property for a lump sum, when the price thereof can be determined proportionally;

(4) Credits guaranteed with a pledge so long as the things pledged are in the hands of
the creditor, or those guaranteed by a chattel mortgage, upon the things pledged or
mortgaged, up to the value thereof;

945
Art. 2140
946
see Reference

172
 (5) Credits for the making, repair, safekeeping or preservation of personal property,
on the movable thus made, repaired, kept or possessed;

(6) Claims for laborers' wages, on the goods manufactured or the work done;

(7) For expenses of salvage, upon the goods salvaged;

(8) Credits between the landlord and the tenant, arising from the contract of tenancy
on shares, on the share of each in the fruits or harvest;

(9) Credits for transportation, upon the goods carried, for the price of the contract
and incidental expenses, until their delivery and for thirty days thereafter;

(10) Credits for lodging and supplies usually furnished to travellers by hotel keepers,
on the movables belonging to the guest as long as such movables are in the hotel, but not
for money loaned to the guests;

(11) Credits for seeds and expenses for cultivation and harvest advanced to the
debtor, upon the fruits harvested;

(12) Credits for rent for one year, upon the personal property of the lessee existing
on the immovable leased and on the fruits of the same, but not on money or instruments of
credit;

(13) Claims in favor of the depositor if the depositary has wrongfully sold the thing
deposited, upon the price of the sale.

In the foregoing cases, if the movables to which the lien or preference attaches have
been wrongfully taken, the creditor may demand them from any possessor, within thirty days
from the unlawful seizure.947

With reference to specific immovable property and real rights of the debtor, the
following claims, mortgages and liens shall be preferred, and shall constitute an encumbrance
on the immovable or real right:

(1) Taxes due upon the land or building;

(2) For the unpaid price of real property sold, upon the immovable sold;

(3) Claims of laborers, masons, mechanics and other workmen, as well as of

architects, engineers and contractors, engaged in the construction, reconstruction or repair
of buildings, canals or other works, upon said buildings, canals or other works;

(4) Claims of furnishers of materials used in the construction, reconstruction, or

repair of buildings, canals or other works, upon said buildings, canals or other works;
947
Art. 2241

173
 (5) Mortgage credits recorded in the Registry of Property, upon the real estate
mortgaged;

(6) Expenses for the preservation or improvement of real property when the law
authorizes reimbursement, upon the immovable preserved or improved;

(7) Credits annotated in the Registry of Property, in virtue of a judicial order, by

attachments or executions, upon the property affected, and only as to later credits;

(8) Claims of co-heirs for warranty in the partition of an immovable among them,
upon the real property thus divided;

(9) Claims of donors or real property for pecuniary charges or other conditions
imposed upon the donee, upon the immovable donated;

(10) Credits of insurers, upon the property insured, for the insurance premium for
two years.948
The claims or credits enumerated in the two preceding articles shall be considered as
mortgages or pledges of real or personal property, or liens within the purview of legal
provisions governing insolvency. Taxes mentioned in No. 1, article 2241, and No. 1, article
2242, shall first be satisfied.949

With reference to other property, real and personal, of the debtor, the following
claims or credits shall be preferred in the order named:

(1) Proper funeral expenses for the debtor, or children under his or her parental
authority who have no property of their own, when approved by the court;

(2) Credits for services rendered the insolvent by employees, laborers, or household
helpers for one year preceding the commencement of the proceedings in insolvency;

(3) Expenses during the last illness of the debtor or of his or her spouse and children
under his or her parental authority, if they have no property of their own;

(4) Compensation due the laborers or their dependents under laws providing for
indemnity for damages in cases of labor accident, or illness resulting from the nature of the
employment;

(5) Credits and advancements made to the debtor for support of himself or herself,
and family, during the last year preceding the insolvency;

(6) Support during the insolvency proceedings, and for three months thereafter;

(7) Fines and civil indemnification arising from a criminal offense;

948
Art. 2242
949
Art. 2243

174
 (8) Legal expenses, and expenses incurred in the administration of the insolvent's
estate for the common interest of the creditors, when properly authorized and approved by
the court;

(9) Taxes and assessments due the national government, other than those mentioned
in articles 2241, No. 1, and 2242, No. 1;950

(10) Taxes and assessments due any province, other than those referred to in articles
2241, No. 1, and 2242, No. 1;951

(11) Taxes and assessments due any city or municipality, other than those indicated
in articles 2241, No. 1, and 2242, No. 1;952

(12) Damages for death or personal injuries caused by a quasi-delict;

(13) Gifts due to public and private institutions of charity or beneficence;

(14) Credits which, without special privilege, appear in (a) a public instrument; or (b)
in a final judgment, if they have been the subject of litigation. These credits shall have
preference among themselves in the order of priority of the dates of the instruments and of
the judgments, respectively.953

Credits of any other kind or class, or by any other right or title not comprised in the
four preceding articles, shall enjoy no preference.954

Those credits which enjoy preference with respect to specific movables, exclude all
others to the extent of the value of the personal property to which the preference refers.955

If there are two or more credits with respect to the same specific movable property,
they shall be satisfied pro rata, after the payment of duties, taxes and fees due the State or
any subdivision thereof.956

Those credits which enjoy preference in relation to specific real property or real
rights, exclude all others to the extent of the value of the immovable or real right to which
the preference refers.957

950
supra
951
ibid
952
ibid
953
Art. 2244
954
Art. 2245
955
Art. 2246
956
Art. 2247
957
Art. 2248

175
 If there are two or more credits with respect to the same specific real property or real
rights, they shall be satisfied pro rata, after the payment of the taxes and assessments upon
the immovable property or real right.958

The excess, if any, after the payment of the credits which enjoy preference with
respect to specific property, real or personal, shall be added to the free property which the
debtor may have, for the payment of the other credits.959

Those credits which do not enjoy any preference with respect to specific property,
and those which enjoy preference, as to the amount not paid, shall be satisfied according to
the following rules:

(1) In the order established in Article 2244;960

(2) Common credits referred to in Article 2245961 shall be paid pro rata regardless of
dates.962

LEASE

I. Lease of Things

One of the parties binds himself to give to another the enjoyment or use of a thing
for a price certain and for a period which may be definite or indefinite. However, no lease
for more than ninety-nine years shall be valid.963

II. Lease of Work or Services

One of the parties binds himself to execute a piece of work or to render to the other
some service for a price certain, but the relations of principal and agent does not exist
between them.964

III. Lease of Rural and Urban Lands

Qualified persons

Those not covered within the scope as provided for under Articles 1490 and 1491 965
of the Civil Code.966

958
Art. 2249
959
Art. 2250
960
supra
961
ibid
962
Art. 2251
963
Art. 1643
964
Art. 1644
965
See Reference
966
Art. 1646

176
 Registration

Every lease of real estate may be recorded in the Registry of Property. Unless a lease
is recorded, it shall not be binding upon third persons.967

Prohibitions

The lessee cannot assign the lease without the consent of the lessor, unless there is a
stipulation to the contrary.968

IV. Rights and Obligations of Lessor and Lessee

When in the contract of lease of things there is no express prohibition, the lessee
may sublet the thing leased, in whole or in part, without prejudice to his responsibility for
the performance of the contract toward the lessor.969

Without prejudice to his obligation toward the sublessor, the sublessee is bound to
the lessor for all acts which refer to the use and preservation of the thing leased in the
manner stipulated between the lessor and the lessee.970

The sublessee is subsidiarily liable to the lessor for any rent due from the lessee.
However, the sublessee shall not be responsible beyond the amount of rent due from him, in
accordance with the terms of the sublease, at the time of the extra-judicial demand by the
lessor.

Payments of rent in advance by the sublessee shall be deemed not to have been
made, so far as the lessor's claim is concerned, unless said payments were effected in virtue
of the custom of the place.971

The lessor is obliged:

(1) To deliver the thing which is the object of the contract in such a condition as to
render it fit for the use intended;

(2) To make on the same during the lease all the necessary repairs in order to keep it
suitable for the use to which it has been devoted, unless there is a stipulation to the contrary;

(3) To maintain the lessee in the peaceful and adequate enjoyment of the lease for
the entire duration of the contract.972

967
Art. 1648
968
Art. 1649
969
Art. 1650
970
Art. 1651
971
Art. 1652
972
Art. 1654

177
 If the thing leased is totally destroyed by a fortuitous event, the lease is extinguished.
If the destruction is partial, the lessee may choose between a proportional reduction of the
rent and a rescission of the lease.973

The lessor of a business or industrial establishment may continue engaging in the

same business or industry to which the lessee devotes the thing leased, unless there is a
stipulation to the contrary.974

The lessee is obliged:

(1) To pay the price of the lease according to the terms stipulated;

(2) To use the thing leased as a diligent father of a family, devoting it to the use
stipulated; and in the absence of stipulation, to that which may be inferred from the nature
of the thing leased, according to the custom of the place;

(3) To pay expenses for the deed of lease.975

The lessee may suspend the payment of the rent in case the lessor fails to make the
necessary repairs or to maintain the lessee in peaceful and adequate enjoyment of the
property leased.976

If the lessor or the lessee should not comply with the obligations set forth in articles
1654 and 1657,977 the aggrieved party may ask for the rescission of the contract and
indemnification for damages, or only the latter, allowing the contract to remain in force.978

If a dwelling place or any other building intended for human habitation is in such a
condition that its use brings imminent and serious danger to life or health, the lessee may
terminate the lease at once by notifying the lessor, even if at the time the contract was
perfected the former knew of the dangerous condition or waived the right to rescind the
lease on account of this condition.979

If during the lease it should become necessary to make some urgent repairs upon the
thing leased, which cannot be deferred until the termination of the lease, the lessee is obliged
to tolerate the work, although it may be very annoying to him, and although during the same,
he may be deprived of a part of the premises.

If the repairs last more than forty days the rent shall be reduced in proportion to the
time - including the first forty days - and the part of the property of which the lessee has
been deprived.

973
Art. 1655
974
Art. 1656
975
Art. 1657
976
Art. 1658
977
supra
978
Art. 1659
979
Art. 1660

178
 When the work is of such a nature that the portion which the lessee and his family
need for their dwelling becomes uninhabitable, he may rescind the contract if the main
purpose of the lease is to provide a dwelling place for the lessee.980

The lessee is obliged to bring to the knowledge of the proprietor, within the shortest
possible time, every usurpation or untoward act which any third person may have committed
or may be openly preparing to carry out upon the thing leased.

He is also obliged to advise the owner, with the same urgency, of the need of all
repairs included in No. 2 of article 1654.981

In both cases the lessee shall be liable for the damages which, through his negligence,
may be suffered by the proprietor.

If the lessor fails to make urgent repairs, the lessee, in order to avoid an imminent
danger, may order the repairs at the lessor's cost.982

The lessee shall return the thing leased, upon the termination of the lease, as he
received it, save what has been lost or impaired by the lapse of time, or by ordinary wear and
tear, or from an inevitable cause.983

In the absence of a statement concerning the condition of the thing at the time the
lease was constituted, the law presumes that the lessee received it in good condition, unless
there is proof to the contrary.984

The lessee is responsible for the deterioration or loss of the thing leased, unless he
proves that it took place without his fault. This burden of proof on the lessee does not apply
when the destruction is due to earthquake, flood, storm or other natural calamity.985
The lessee is liable for any deterioration caused by members of his household and by
guests and visitors.986

The bailor shall refund the extraordinary expenses during the contract for the
preservation of the thing loaned, provided the bailee brings the same to the knowledge of
the bailor before incurring them, except when they are so urgent that the reply to the
notification cannot be awaited without danger.

If the extraordinary expenses arise on the occasion of the actual use of the thing by
the bailee, even though he acted without fault, they shall be borne equally by both the bailor
and the bailee, unless there is a stipulation to the contrary.987

980
Art. 1662
981
supra
982
Art. 1663
983
Art. 1665
984
Art. 1666
985
Art. 1667
986
Art. 1668
987
Art. 1949

179
V. Special Rules for Lease of Rural/Urban Lands

The lessee shall have no right to a reduction of the rent on account of the sterility of
the land leased, or by reason of the loss of fruits due to ordinary fortuitous events; but he
shall have such right in case of the loss of more than one-half of the fruits through
extraordinary and unforeseen fortuitous events, save always when there is a specific
stipulation to the contrary.

Extraordinary fortuitous events are understood to be: fire, war, pestilence, unusual
flood, locusts, earthquake, or others which are uncommon, and which the contracting parties
could not have reasonably foreseen.988

Neither does the lessee have any right to a reduction of the rent if the fruits are lost
after they have been separated from their stalk, root or trunk.989

The lease of a piece of rural land, when its duration has not been fixed, is understood
to have been for all the time necessary for the gathering of the fruits which the whole estate
leased may yield in one year, or which it may yield once, although two or more years have to
elapse for the purpose.990

The outgoing lessee shall allow the incoming lessee or the lessor the use of the
premises and other means necessary for the preparatory labor for the following year; and,
reciprocally, the incoming lessee or the lessor is under obligation to permit the outgoing
lessee to do whatever may be necessary for the gathering or harvesting and utilization of the
fruits, all in accordance with the custom of the place.991

Land tenancy on shares shall be governed by special laws, the stipulations of the
parties, the provisions on partnership and by the customs of the place.992

The tenant on shares cannot be ejected except in cases specified by law.993

988
Art. 1680
989
Art. 1681
990
Art. 1682
991
Art. 1683
992
Art. 1684
993
Art. 1685

180
LAND TITLES AND DEEDS

I. Torrens System

A system for registration of land under which, upon the landowners application, the
court may, after appropriate proceedings, direct the issuance of a certificate of title.

The Torrens system does not create or vest title. It only confirms and records title
already existing and vested. It does not protect a usurper from the true owner. It cannot be a
shield for the commission of fraud. It does not permit one to enrich himself at the expense
of another994

In order to establish a system of registration by which title recorded became

absolute, indefeasible and imprescriptible, Act No. 496, otherwise known as the Land
Registration Act, was passed and took effect on February 1, 1903. Rights acquired under this
system are guaranteed by the government which provides an assurance fund to answer for
damages to be suffered by persons thru the operation of this system.

This method is also known as the Torrens system of land registration.995 There are
two (2) laws ancillary to Act No. 496. These are the Cadastral Law of February 11, 1913996
and the Public Land Law of December 1, 1936997 which have been subsequently amended by
later legislations.

Presidential Decree No. 1529 was issued to cope with the growing need of updating
the Land Registration Act, to codify the various other laws relative to registration of real
property and real rights, and to further strengthen the Torrens system. Land Registration Act
No. 496 of February 1, 1903 has not been repealed or abrogated but rather, all laws,
decrees, orders, rules and regulations or parts thereof, in conflict with any provisions of this
decree are hereby repealed or modified accordingly.998

II. Regalian Doctrine

All lands of the public domain, waters, minerals, coal, petroleum and other mineral
oils, all forces of potential energy, fisheries, forests, or timber, wildlife, flora and fauna, and
natural resources belong to the state. With the exception of agricultural lands, all other
natural resources shall not be alienated.999

994
Angeles vs. Samia, 66 Phil. 444 (1938)
995
Act 496 has been amended by P.D. 1529 which was enacted on June 11, 1978
996
Act 2259
997
Com. Act No. 141
998
Sec. 20, P.D. No. 1529
999
Sec. 2, Art. XII, 1987 Constitution

181
 Under the Regalian doctrine, all lands of the public domain belong to the State,
which is the source of any asserted right to ownership of land. All lands not otherwise
appearing to be clearly within private ownership are presumed to belong to the State.1000

III. Citizenship Requirement

Alienable lands of the public domain:

Only Filipino citizens may acquire not more than 12 hectares by purchase,
homestead or grant, or lease not more than 500 hectares.

Private corporations may lease not more than 1,000 hectares for 25 years renewable
for another 25 years.

IV. Original Registration

Under PD 1529

a. Those who, by themselves or through their predecessors-in-interest, have been in

open, continuous, exclusive and notorious possession and occupation of alienable and
disposable lands of the public domain under a bona fide claim of ownership since June 12,
1945, or earlier;

b. Those who have acquired ownership of private lands by prescription under the
provisions of existing laws;

c. Those who have acquired ownership of private lands or abandoned river beds by
right of accession or accretion; and

d. Those who have acquired ownership of land in any other manner provided for by
law.

Where the land is owned in common, all the co-owners shall file the application
jointly.

Where the land has been sold under pacto de retro, the vendor a retro may file an
application for the original registration of the land, provided, however, that should the
period for redemption expire during the pendency of the registration proceedings and
ownership to the property consolidated in the vendee a retro, the latter shall be substituted for
the applicant and may continue the proceedings.

A trustee on behalf of the principal may apply for original registration of any land
held in trust by him, unless prohibited by the instrument creating the trust.1001

1000
Spouses Reyes et at. v. CA, 295 SCRA 296, September 10, 1998; Cacho v. CA, 269 SCRA 159, March
3,1997
1001
Sec. 14

182
 Under CA 141

(a) Those who prior to the transfer of sovereignty from Spain to the prior United
States have applied for the purchase, composition or other form of grant of lands of the
public domain under the laws and royal decrees then in force and have instituted and
prosecuted the proceedings in connection therewith, but have with or without default upon
their part, or for any other cause, not received title therefor, if such applicants or grantees
and their heirs have occupied and cultivated said lands continuously since the filing of their
applications.

(b) Those who by themselves or through their predecessors in interest have been in
open, continuous, exclusive, and notorious possession and occupation of agricultural lands
of the public domain, under a bona fide claim of acquisition or ownership, for at least thirty
years immediately preceding the filing of the application for confirmation of title except
when prevented by war or force majeure. These shall be conclusively presumed to have
performed all the conditions essential to a Government grant and shall be entitled to a
certificate of title under the provisions of this chapter.

(c) Members of the national cultural minorities who by themselves or through their
predecessors-in-interest have been in open, continuous, exclusive and notorious possession
and occupation of lands of the public domain suitable to agriculture, whether disposable or
not, under a bona fide claim of ownership for at least 30 years shall be entitled to the rights
granted in sub-section (b) hereof.

Under RA 8371

Individual and indigenous corporate claimants of ancestral lands which are not
within ancestral domains, may have their claims officially established by filing applications
for the identification and delineation of their claims with the Ancestral Domains Office. An
individual or recognized head of a family or clan may file such application in his behalf or in
behalf of his family or clan, respectively.1002

All these persons must be natural-born Filipino Citizens. However, by way of exception, juridical
persons may apply for registration of leased agricultural and disposable lands not exceeding 1,000
hectares in area for a period of 25 years and renewable for not more than 25 years. (Sec. 3, Chapter XII,
1987 Constitution)
Notwithstanding the prohibition in the 1973 and 1987 Constitutions against private corporations
holding lands of the public domain except by lease, still a private corporation may institute confirmation
proceedings under Section 48(b) of Public Land Act if, at the time of institution of the registration
proceedings, the land was already private land. (Dir. of Lands vs. IAC and ACME Plywood, 146 SCRA 509)
1002
Sec. 53 (b)

183
V. Subsequent Registration

Takes place when any deed affecting the land is made of public record after the date
of its original registration.; where incidental matters after original registration may be
brought before the land registration court by way of motion or petition filed by the
registered owner or a party in interest.

VI. Non-registrable Properties

The following lands are not registrable by any private person in his name:

1. Those devoted to public land use such as public roads, plazas, canals, streets,
rivers, banks and shores;

2. Those devoted to public service such as towns, walls and fortresses;

3. Public forests;

4. Mineral lands; and

5. Those reserved by the government for public or quasi-public purposes.

The Constitution provides that all natural resources, except agricultural, commercial
and industrial, residential and resettlement lands are inalienable.1003

Public forests are non-alienable public lands. Possession of public forests on the part
of the claimant, however long, cannot convert the same into private property1004

VII. Dealings with Unregistered Lands

The system of registration under the Spanish Mortgage Law is hereby discontinued
and all lands recorded under said system which are not yet covered by Torrens title shall be
considered as unregistered lands.

Hereafter, all instruments affecting lands originally registered under the Spanish
Mortgage Law may be recorded under Section 113 of this Decree, until the land shall have
been brought under the operation of the Torrens system.

The books of registration for unregistered lands provided under Section 194 of the
Revised Administrative Code, as amended by Act No. 3344, shall continue to remain in
force; provided, that all instruments dealing with unregistered lands shall henceforth be
registered under Section 113 of this Decree.1005

1003
Art. XIV, Sec. 8, New Constitution
1004
Vano vs. Government of P.I., 41 Phil. 161 (1920)
1005
Sec. 3, P.D. 1529

184
 No deed, conveyance, mortgage, lease, or other voluntary instrument affecting land
not registered under the Torrens system shall be valid, except as between the parties thereto,
unless such instrument shall have been recorded in the manner herein prescribed in the
office of the Register of Deeds for the province or city where the land lies.

(a) The Register of Deeds for each province or city shall keep a Primary Entry Book
and a Registration Book. The Primary Entry Book shall contain, among other particulars, the
entry number, the names of the parties, the nature of the document, the date, hour and
minute it was presented and received. The recording of the deed and other instruments
relating to unregistered lands shall be effected by any of annotation on the space provided
therefor in the Registration Book, after the same shall have been entered in the Primary
Entry Book.

(b) If, on the face of the instrument, it appears that it is sufficient in law, the Register
of Deeds shall forthwith record the instrument in the manner provided herein. In case the
Register of Deeds refuses its administration to record, said official shall advise the party in
interest in writing of the ground or grounds for his refusal, and the latter may appeal the
matter to the Commissioner of Land Registration in accordance with the provisions of
Section 117 of this Decree. It shall be understood that any recording made under this section
shall be without prejudice to a third party with a better right.

(c) After recording on the Record Book, the Register of Deeds shall endorse among
other things, upon the original of the recorded instruments, the file number and the date as
well as the hour and minute when the document was received for recording as shown in the
Primary Entry Book, returning to the registrant or person in interest the duplicate of the
instrument, with appropriate annotation, certifying that he has recorded the instrument after
reserving one copy thereof to be furnished the provincial or city assessor as required by
existing law.

(d) Tax sale, attachment and levy, notice of lis pendens, adverse claim and other
instruments in the nature of involuntary dealings with respect to unregistered lands, if made
in the form sufficient in law, shall likewise be admissible to record under this section.

(e) For the services to be rendered by the Register of Deeds under this section, he
shall collect the same amount of fees prescribed for similar services for the registration of
deeds or instruments concerning registered lands.1006

1006
Sec. 113, id.

185
TORTS AND DAMAGES

Book I--Torts

I. Principles

Every person must, in the exercise of his rights and in the performance of his duties,
act with justice, give everyone his due, and observe honesty and good faith. 1007

Every person who through an act of performance by another, or any other means,
acquires or comes into possession of something at the expense of the latter without just or
legal ground, shall return the same to him.1008

If something is received when there is no right to demand it, and it was unduly
delivered through mistake, the obligation to return it arises.1009

Certain lawful, voluntary and unilateral acts give rise to the juridical relation of quasi-
contract to the end that no one shall be unjustly enriched or benefited at the expense of
another.1010

Even when an act or event causing damage to another's property was not due to
the fault or negligence of the defendant, the latter shall be liable for indemnity if through
the act or event he was benefited.1011

Every person who, contrary to law, wilfully or negligently causes damage to another,
shall indemnify the latter for the same.1012

Any person who wilfully causes loss or injury to another in manner that is contrary
to morals, good customs or public policy shall compensate the latter for the damage.1013

1007
Art. 19
Contains a mere declaration of principles. The declaration is implemented by Art. 20 (Globe Mackay vs.
CA)
Sets certain standards which must be observed not only in the exercised of ones rights but also in the
performance of ones duties. These standards are:
1. To act with justice
2. To give everyone his due; and
3. Observe honesty and good faith
There is no hard and fast rule to determine whether or not the principle may be invoked.
1008
Art. 22
1009
Art. 2154
1010
Art. 2142
1011
Art.23
1012
Art. 20
Even if the particular provision of law does not expressly provide for indemnification in case of
violation, so long as there is a violation of law and damage resulting therefrom, there is liability for
damages under this article.
1013
Art. 21

186
II. Classification of Torts

A. According to manner of commission:

Intentional Negligent Strict Liability

Include conduct where the Involve voluntary acts or When the person is made
actor desires to cause the omissions which result in liable independent of fault or
consequences of his act or injury to others without negligence upon submission
believes that the intending to cause the same of proof of certain facts
consequences are or because the actor fails to specified by law.1015
substantially certain to result exercise due care in
from it.1014 performing such acts or
omissions.

B. According to scope: general or specific

General Specific

The catchall provisions on torts It includes trespass, assault and battery,

provided for in the Civil Code.1016 The negligence, products liability, and
effect is that there is a general duty intentional infliction of emotional distress.
owed to every person not to cause harm As defined, torts fall into three different
either willfully or negligently. Articles 19, categories: intentional, negligent and
20, and 21 are provisions liability,1018 product liability tort.
on human relations that were intended to
expand the concept of torts in this
jurisdiction by granting adequate legal
remedy for the untold number of moral
wrongs which is impossible for human
foresight to specifically provide for in the
statutes. 1017

There is an act which may be legal but which may be contrary to morals, good customs, public order
or public policy (Albeson vs. CA)
1014
They are found in Chapter 2 of the Preliminary Title of the NCC entitled Human Relations. Although
this chapter covers negligent acts, the torts mentioned herein are mostly intentional in nature or torts
involving malice or bad faith.
1015
Strict liability tort can be committed even if reasonable care was exercised and regardless of the state
of mind of the actor at that time.
1016
i.e. Arts. 19, 20 and 21
1017
Aquino, 2005, citing PNB v. CA, et al. 83 SCRA 237
1018
manufacturing and selling defective products

187
III. The Tortfeasor

A. The Direct Tortfeasor

1. Natural Persons

Refer to human beings.

2. Juridical Persons

(i) The State and its political subdivisions;

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

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

which the law grants a juridical personality, separate and distinct from that of each
shareholder, partner or member.1019

Juridical persons may acquire and possess property of all kinds, as well as incur
obligations and bring civil or criminal actions, in conformity with the laws and regulations
of their organization.1020

B. Persons Made Responsible for Others

1. In General

a. Quasi-delicts1021 and the Family Code1022

1. Father, or in case of death or incapacity, mother:

a. damage caused by minor children1023

b. living in their company

1019
Art. 44
1020
Art. 46
1021
under Art. 2180
Basis:
Pater Familias. The reason for the masters liability is the negligence in the supervision of his
subordinates.
1022
Arts. 218-219, 221
1023
Requisites of vicarious liability of Parents:
1. The child is below twentyone (21) years of age
2. The child committed a tortuous act to the damage and prejudice of another person
3. The child lives in the company of the parent concerned whether single or married.

188
 2. Guardians:

a. for minors or incapacitated persons

b. under their authority
c. living in their company

3. Owners and managers1024 of establishments:

a. for their employees

b. in the service of the branches in which they are employed, or;
c. on the occasion of their functions

4. Employers:

a. damages caused by employees and household helpers1025

b. acting within the scope of their assigned tasks
c. even if the employer is not engaged in any business or industry

5. State acting through a special agent and not when the damage has been
caused by the official to whom the task done properly pertains.

6. Teachers or heads of establishments:

a. of arts and trades

b. for damages caused by their pupils and students or apprentices1026

1024
To be liable, the manager must be acting as an employer or with the same authority as the
owner.
1025
To make the employer
liable, it must be established that the injurious or tortuous act was committed at the time the
employee was performing his functions.
If there is deviation from the scope of employment, the employer is not liable, no matter
how short in time is the deviation. (Pineda, Torts and Damages, 2009, p.97)
1026
Statutory basis:
if student is minor Art. 219, FC
if student is no longer a minor Art. 2180, Civil Code
Applies also to teachers of academic institutions.
Liability attaches to the teacher-in-charge.
The school itself is now solidarily liable with the teacher-in-charge.
The liability extends to acts committed even outside the school so long as it is an official activity of the
school.
Whenever the school or teacher is being made liable, the parents and those exercising substitute
parental authority are not free from liability because Art. 219 of the Family Code expressly provides that
they are subsidiarily liable.
Art. 2180 makes teachers and heads liable for acts of students and apprentices whether the latter are
minors or not.
General rule: The teacher-in-charge is liable for the acts of his students. The school and administrators
are not liable.

189
 c. so long as they remain in their custody.1027

The responsibility shall cease when the persons mentioned prove that they observed
all the diligence of a good father of a family to prevent damage.1028

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

Authority and responsibility shall apply to all authorized activities whether inside or
outside the premises of the school, entity or institution.1029

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

The respective liabilities of those referred to in the preceding paragraph shall not
apply if it is proved that they exercised the proper diligence required under the particular
circumstances.1030

Parents and other persons exercising parental authority shall be civilly liable for the
injuries and damages caused by the acts or omissions of their unemancipated children living
in their company and under their parental authority subject to the appropriate defenses
provided by law.1031

All the persons who command, instigate, promote, encourage, advice, countenance,
cooperate in, aid, or abet the commission of a tort, or who approve of it after it is done, if
done for their benefit; they are each liable as a principal, to the same extent and in the same
manner as if they have performed the wrongful act themselves. 1032

Exception: It is only the head of the school, not the teacher who is held liable where the injury is
caused in a school of arts and trade.
The liability of the teacher subsists whether the school is academic or non- academic.
Liability is imposed only if the pupil is already in the custody of the teacher or head. The student is in
the custody of the school authorities as longs as he is under the control and influence of the school and
within its premises whether the semester had not yet begun or has already ended.
The victim of negligence is likewise required to exercise due care in avoiding injury to himself.
1027
Art. 2180
1028
The persons liable shall be exempted from liability if they can prove that they have exercised
all the diligence of a good father of a family to prevent damage.
1029
Art. 218, FC
1030
Art. 219, id.
1031
Art. 221, id.
1032
Art. 2194

190
IV. Act of Omission and its Modalities

Any bodily movement tending to produce some effect in the external world,
it being unnecessary that the same be actually produced, as the possibility of its
production is sufficient.1033

It is an act or omission producing an injury to another, without any previous existing

lawful relation of which the said act or omission may be said to be a natural outgrowth or
incident.1034

V. Proximate Cause

That cause which in natural and continuous sequence, unbroken by any efficient
intervening cause, produces the injury, without which the result would not have occurred.1035

VI. Legal Injury

The violation of a legal right.1036

An act causing damage, which act must be not only hurtful, but wrongful. There
must be damnum et injuria.

VII. Intentional Torts

A tort committed by someone acting with general or specific intent.1037

Include conduct where the actor desires to cause the consequences of his act or
believes that the consequences are substantially certain to result from it.

They are found in Chapter 2 of the Preliminary Title of the NCC entitled Human
Relations. Although this chapter covers negligent acts, the torts mentioned herein are
mostly intentional in nature or torts involving malice or bad faith.

1033
People v. Gonzales, 183 SCRA 309, 324
1034
Defendants in tort cases can either be natural or artificial being. Corporations are civilly liable in the
same manner as natural persons.
Any person who has been injured by reason of a tortious conduct can sue the tortfeasor.
The primary purpose of a tort action is to provide compensation to a person who was injured by the
tortious conduct of the defendant.
Preventive remedy is available in some cases.
1035
Primary cause remains the proximate cause even if there is an intervening cause which merely
cooperated with the primary cause and which did not break the chain of causation.
1036 th
Blacks Law Dictionary, 9 Ed.
1037 th
Blacks Law Dictionary, 9 Ed.

191
VIII. Negligence

The omission of that degree of diligence which is required by the nature of

the obligation and corresponding to the circumstances of
1038
the persons, of the time and place.

The omission to do something which a reasonable man, guided by those

considerations which ordinarily regulate the conduct of human affairs, would do, or the
doing of something which a prudent and reasonable man would not do.1039

Involve voluntary acts or omissions which result in injury to others without

intending to cause the same or because the actor fails to exercise due care in performing
such acts or omissions.

IX. Special Liability in Particular Activities

Products Liability1040

1. Manufacturers or Processors

Defects resulting from design, manufacture, construction, assembly and erection,

formulas and handling and making up, presentation or packing of their products, as well as
for the insufficient or inadequate information on the use and hazards thereof

The plaintiff should allege and prove that:

1) The product was defective;

2) The product was manufactured by the defendant;
3) The defective product was the cause of his injury.

Consumer Act1041

Any Filipino or foreign manufacturer, producer, and any importer, shall be liable for
redress, independently of fault, for damages caused to consumers by defects resulting from
design, manufacture, construction, assembly and erection, formulas and handling and
making up, presentation or packing of their products, as well as for the insufficient or
inadequate information on the use and hazards thereof.

1038
Art. 1173
1039
Philippine Bank of Commerce v. CA, 336 Phil. 667, 676 (1997)
1040
Law which governs the liability of manufacturers and sellers for damages resulting from defective
products. It is meant to protect the consumers by providing safeguards when they purchase or use
consumer products (Aquino, T., Torts and Damages, 2005, Second Ed.)
Based on fraud, warranty, negligence or strict liability
1041
R.A. 7394

192
 A product is defective when it does not offer the safety rightfully expected of it,
taking relevant circumstances into consideration, including but not limited to:
a) presentation of product;
b) use and hazards reasonably expected of it;
c) the time it was put into circulation.

A product is not considered defective because another better quality product has
been placed in the market.

The manufacturer, builder, producer or importer shall not be held liable when it
evidences:

a) that it did not place the product on the market;

b) that although it did place the product on the market such product has no defect;
c) that the consumer or a third party is solely at fault.1042

The tradesman/seller is likewise liable when;

a) it is not possible to identify the manufacturer, builder, producer or importer.

b) the product is supplied, without clear identification of the manufacturer,

producer, builder or importer;

c) he does not adequately preserve perishable goods. The party making payment to
the damaged party may exercise the right to recover a part of the whole of the payment
made against the other responsible parties, in accordance with their part or responsibility in
the cause of the damage effected.1043

The service supplier is liable for redress, independently of fault, for damages caused
to consumers by defects relating to the rendering of the services, as well as for insufficient or
inadequate information on the fruition and hazards thereof.

The service is defective when it does not provide the safety the consumer may
rightfully expect of it, taking the relevant circumstances into consideration, including but not
limited to:

a) the manner in which it is provided;

b) the result of hazards which may reasonably be expected of it;
c) the time when it was provided.

A service is not considered defective because of the use or introduction of new

techniques.

The supplier of the services shall not be held liable when it is proven:
1042
Art. 97
1043
Art. 98

193
 a) that there is no defect in the service rendered;
b) that the consumer or third party is solely at fault.1044

The suppliers of durable or nondurable consumer products are jointly liable for
imperfections in quality that render the products unfit or inadequate for consumption for
which they are designed or decrease their value, and for those resulting from inconsistency
with the information provided on the container, packaging, labels or publicity
messages/advertisement, with due regard to the variations resulting from their nature, the
consumer being able to demand replacement to the imperfect parts.

If the imperfection is not corrected within thirty (30) days, the consumer may
alternatively demand at his option:

a) the replacement of the product by another of the same kind, in a perfect state of
use;

b) the immediate reimbursement of the amount paid, with monetary updating,

without prejudice to any losses and damages;

c) a proportionate price reduction.

The parties may agree to reduce or increase the term specified in the immediately
preceding paragraph; but such shall not be less than seven (7) nor more than one hundred
and eighty (180) days.

The consumer may make immediate use of the foregoing alternatives when by virtue
of the extent of the imperfection, the replacement of the imperfect parts may jeopardize the
product quality or characteristics, thus decreasing its value.

If the consumer opts for the alternative under sub-paragraph (a) and replacement of
the product is not possible, it may be replaced by another of a different kind, mark or model.
Any difference in price that may result thereof shall be supplemented or reimbursed by the
party which caused the damage, without prejudice to the provisions of the second, third and
fourth paragraphs.1045

Suppliers are jointly liable for imperfections in the quantity of the product when, in
due regard for variations inherent thereto, their net content is less than that indicated on the
container, packaging, labeling or advertisement, the consumer having powers to demand,
alternatively, at his own option:

a) the proportionate price

b) the supplementing of weight or measure differential;
c) the replacement of the product by another of the same kind, mark or model,
without said imperfections;
1044
Art. 99
1045
Art. 100

194
 d) the immediate reimbursement of the amount paid, with monetary updating
without prejudice to losses and damages if any.

The provisions of the fifth paragraph of Article 99 shall apply to this Article. The
immediate supplier shall be liable if the instrument used for weighing or measuring is not
gauged in accordance with official standards.1046

The service supplier is liable for any quality imperfections that render the services
improper for consumption or decrease their value, and for those resulting from
inconsistency with the information contained in the offer or advertisement, the consumer
being entitled to demand alternatively at his option:

a) the performance of the services, without any additional cost and when applicable;
b) the immediate reimbursement of the amount paid, with monetary updating
without prejudice to losses and damages, if any;
c) a proportionate price reduction.

Reperformance of services may be entrusted to duly qualified third parties, at the

supplier's risk and cost.

Improper services are those which prove to be inadequate for purposes reasonably
expected of them and those that fail to meet the provisions of this Act regulating service
rendering.1047

When services are provided for the repair of any product, the supplier shall be
considered implicitly bound to use adequate, new, original replacement parts, or those that
maintain the manufacturer's technical specifications unless, otherwise authorized, as regards
to the latter by the consumer.1048

The supplier's ignorance of the quality imperfections due to inadequacy of the

products and services does not exempt him from any liability.1049

The legal guarantee of product or service adequacy does not require an express
instrument or contractual exoneration of the supplier being forbidden.1050

The stipulation in a contract of a clause preventing, exonerating or reducing the

obligation to indemnify for damages effected, as provided for in this and in the preceding
Articles, is hereby prohibited, if there is more than one person responsible for the cause of
the damage, they shall be jointly liable for the redress established in the pertinent provisions
of this Act. However, if the damage is caused by a component or part incorporated in the

1046
Art. 101
1047
Art. 102
1048
Art. 103
1049
Art. 104
1050
Art. 105

195
product or service, its manufacturer, builder or importer and the person who incorporated
the component or part are jointly liable.1051

Any person who shall violate any provision of this Chapter or its implementing rules
and regulations with respect to any consumer product which is not food, cosmetic, or
hazardous substance shall upon conviction, be subject to a fine of not less than Five
thousand pesos (P5,000.00) and by imprisonment of not more than one (1) year or both
upon the discretion of the court.

In case of juridical persons, the penalty shall be imposed upon its president, manager
or head. If the offender is an alien, he shall, after payment of fine and service of sentence, be
deported without further deportation proceedings.1052

X. Strict Liability

When the person is made liable independent of fault or negligence upon submission
of proof of certain facts specified by law.

Strict liability tort can be committed even if reasonable care was exercised and
regardless of the state of mind of the actor at that time.

1051
Art. 106
1052
Art. 107

196
 Book II--Damages

I. General Considerations
Damages may be:

(1) Actual or compensatory;

(2) Moral;
(3) Nominal;
(4) Temperate or moderate;
(5) Liquidated; or
(6) Exemplary or corrective.1053

Damages may be recovered:

(1) For loss or impairment of earning capacity in cases of temporary or permanent

personal injury;

(2) For injury to the plaintiff's business standing or commercial credit.1054

Willful injury to property may be a legal ground for awarding moral damages if the
court should find that, under the circumstances, such damages are justly due. The same rule
applies to breaches of contract where the defendant acted fraudulently or in bad faith.1055

Nominal damages are adjudicated in order that a right of the plaintiff, which has
been violated or invaded by the defendant, may be vindicated or recognized, and not for the
purpose of indemnifying the plaintiff for any loss suffered by him.1056

Temperate or moderate damages, which are more than nominal but less than
compensatory damages, may be recovered when the court finds that some pecuniary loss has
been suffered but its amount cannot, from the nature of the case, be provided with
certainty.1057

Liquidated damages are those agreed upon by the parties to a contract, to be paid in
case of breach thereof.1058

Exemplary or corrective damages are imposed, by way of example or correction for

the public good, in addition to the moral, temperate, liquidated or compensatory damages.1059

No proof of pecuniary loss is necessary in order that moral, nominal, temperate,

liquidated or exemplary damages, may be adjudicated. The assessment of such damages,

1053
Art. 2197
1054
Art. 2205
1055
Art. 2220
1056
Art. 2221
1057
Art. 2224
1058
Art. 2226
1059
Art. 2229

197
except liquidated ones, is left to the discretion of the court, according to the circumstances
of each case.1060

II. Actual and Compensatory Damages

Comprehends not only the value of the loss suffered but also that of the profits
which the obligee failed to obtain.1061

Actual or compensatory damages cannot be presumed but must be duly proved.1062

Actual damages must be proved and a court cannot rely on speculation, conjecture
or guesswork as to the fact and amount of damages, but must depend on actual proof that
damages had been suffered and on evidence of the actual amount.1063

Remote and speculative damages are not recoverable.

III. Moral Damages

Moral damages include physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury.
Though incapable of pecuniary computation, moral damages may be recovered if they are
the proximate result of the defendant's wrongful act for omission.1064

In the adjudication of moral damages, the sentimental value of property, real or

personal, may be considered.1065

When recoverable:

In the following and analogous cases:

(1) A criminal offense resulting in physical injuries;

(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
(7) Libel, slander or any other form of defamation;
(8) Malicious prosecution;
(9) Acts mentioned in Article 309;1066

1060
Art. 2216
1061
Art. 2200
1062
Malonzo vs. Galang, 109 Phil. 16
1063
Rangas vs. Raya, 22 SCRA 839
1064
Art. 2217
1065
Art. 2218
1066
Any person who shows disrespect to the dead, or wrongfully interferes with a funeral shall be liable to
the family of the deceased for damages, material and moral.

198
 (10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.1067

The parents of the female seduced, abducted, raped, or abused, referred to in No. 3
of this article, may also recover moral damages.

The spouse, descendants, ascendants, and brothers and sisters may bring the action
mentioned in No. 9 of this article, in the order named.1068

Willful injury to property may be a legal ground for awarding moral damages if the
court should find that, under the circumstances, such damages are justly due. The same rule
applies to breaches of contract where the defendant acted fraudulently or in bad faith.1069

1. In seduction, abduction, rape and other lascivious acts

Victim and parents are included.

2. In acts referred to in Arts. 21, 26, 27, 28, 29, 32, 34 & 35,
NCC1070

3. In cases of malicious prosecution1071

IV. Nominal Damages

Small sums fixed by the court without regard to the extent of the harm done to the
injured party.

Law presumes damage although actual or compensatory damages are not proven.

They are damages in name only and are allowed simply in recognition of a technical
injury based on a violation of a legal right.

Nominal damages cannot co-exist with actual or compensatory damages.

Nominal damages are adjudicated in order that a right of the plaintiff, which has been
violated or invaded by the defendant, may be vindicated or recognized, and not for the
purpose of indemnifying the plaintiff for any loss suffered by him.1072

1067
See reference
1068
Art. 2219
1069
Art. 2220
1070
See Reference
1071
supra
1072
Art. 2221

199
V. Temperate or Moderate Damages

These are damages, which are more than nominal but less than compensatory, and
may be recovered when the court finds that some pecuniary loss has been suffered but its
amount cannot be proved with certainty.1073

When awarded

In cases where the resulting injury might be continuing and possible future
complications directly arising from the injury, while certain to occur are difficult to predict,
temperate damages can and should be awarded on top of actual or compensatory damages;
in such cases there is no incompatibility between actual and temperate damages.

VI. Liquidated Damages

Those agreed upon by the parties to a contract, to be paid in case of breach

thereof.1074

Interest may, in the discretion of the court, be allowed upon damages awarded for
breach of contract.1075

VII. Exemplary or Corrective Damages

Imposed, by way of example or correction for the public good, in addition to the
moral, temperate, liquidated or compensatory damages.1076

When recovered:

1. In criminal offenses

When the crime was committed with one or more aggravating circumstances. Such
damages are separate and distinct from fines and shall be paid to the offended party.1077

2. In quasi-delicts

If the defendant acted with gross negligence.1078

1073
Article 2224 Civil Code
1074
Art. 2226
1075
Art. 2210
1076
Art. 2229
1077
Art. 2230
1078
Art. 2231

200
 3. In contracts and quasi-contracts

If the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent

manner.1079

VIII. Damages in Case of Death

A. In crimes and quasi-delicts causing death

1. In death caused by breach of conduct by a common

crime

The amount of damages for death caused by a crime or quasi-delict shall be at least
three thousand pesos,1080 even though there may have been mitigating circumstances.

In addition:

(1) The defendant shall be liable for the loss of the earning capacity of the deceased,
and the indemnity shall be paid to the heirs of the latter; such indemnity shall in every case
be assessed and awarded by the court, unless the deceased on account of permanent physical
disability not caused by the defendant, had no earning capacity at the time of his death;

(2) If the deceased was obliged to give support according to the provisions of article
291, the recipient who is not an heir called to the decedent's inheritance by the law of testate
or intestate succession, may demand support from the person causing the death, for a period
not exceeding five years, the exact duration to be fixed by the court;

(3) The spouse, legitimate and illegitimate descendants and ascendants of the
deceased may demand moral damages for mental anguish by reason of the death of the
deceased.1081

1079
Art. 2232
1080
As of 2008, it is P75,000 (People vs. Robert Brodett y Pajaro, Jan. 18, 2008)
1081
Art. 2206
Damages recoverable in case of death:
1. Medical & Hospital Bills
2. Damages for death
a. Minimum amount: P50,000
b. Loss of earning capacity unless deceased had permanent physical disability not caused by
defendant so that deceased had no earning capacity at time of death
c. Support, if deceased was obliged to give support (for period not more than 5 years)
d. Moral damages

201
IX. Graduation of Damages

The party suffering loss or injury must exercise the diligence of a good father of a
family to minimize the damages resulting from the act or omission in question.1082

Rules:

1. In crimes

The damages to be adjudicated may be respectively increased or lessened according

to the aggravating or mitigating circumstances.1083

2. In quasi-delict

The contributory negligence of the plaintiff shall reduce the damages that he may
recover.1084
3. In contracts, quasi-contracts and quasi-delicts;

The court may equitably mitigate the damages, as in the following instances:

(1) Plaintiff himself has contravened the terms of the contract;

(2) Plaintiff has derived some benefit as a result of the contract;
(3) In cases where exemplary damages are to be awarded, that the defendant acted
upon the advice of counsel;
(4) The loss would have resulted in any event;
(5) Since the filing of the action, the defendant has done his best to lessen the
plaintiff's loss or injury.1085

4. Liquidated damages

Shall be equitably reduced if they are iniquitous or unconscionable.1086

5. Compromise

The courts may mitigate the damages to be paid by the losing party who has shown
a sincere desire for a compromise.1087

1082
Art. 2203
1083
Art. 2204
1084
Art. 2214
1085
Art. 2215
1086
Art. 2227
1087
Art. 2031

202
X. Miscellaneous Rules

Damages that cannot co-exists

1. Nominal with other damages

The adjudication of nominal damages shall preclude further contest upon the right
involved and all accessory questions, as between the parties to the suit, or their respective
heirs and assigns.1088

2. Actual and Liquidated

Liquidated damages are those agreed upon by the parties to a contract, to be paid in
case of breach thereof.1089

Damages that must co-exist

1. Exemplary with moral, temperate, liquidated or

compensatory1090

Damages that must stand alone

1. Nominal Damages1091

Include: Pertinent Supreme Court decisions promulgated up to January 31, 2013.

1088
Art. 2223
1089
Art. 2226
1090
supra
1091
Ibid.

203
 Reference

Republic Act No. 8552

AN ACT ESTABLISHING THE RULES AND POLICIES ON THE DOMESTIC

ADOPTION OF FILIPINO CHILDREN AND FOR OTHER PURPOSES

GENERAL PROVISIONS

Section 1. Short Title. This Act shall be known as the "Domestic Adoption Act of 1998."

Section 2. Declaration of Policies. (a) It is hereby declared the policy of the State to
ensure that every child remains under the care and custody of his/her parent(s) and be
provided with love, care, understanding and security towards the full and harmonious
development of his/her personality. Only when such efforts prove insufficient and no
appropriate placement or adoption within the child's extended family is available shall
adoption by an unrelated person be considered.

(b) In all matters relating to the care, custody and adoption of a child, his/her interest shall
be the paramount consideration in accordance with the tenets set forth in the United
Nations (UN) Convention on the Rights of the Child; UN Declaration on Social and Legal
Principles Relating to the Protection and Welfare of Children with Special Reference to
Foster Placement and Adoption, Nationally and Internationally; and the Hague Convention
on the Protection of Children and Cooperation in Respect of Intercountry Adoption.
Toward this end, the State shall provide alternative protection and assistance through foster
care or adoption for every child who is neglected, orphaned, or abandoned.

(c) It shall also be a State policy to:

(i) Safeguard the biological parent(s) from making hurried decisions to relinquish
his/her parental authority over his/her child;

(ii) Prevent the child from unnecessary separation from his/her biological parent(s);

(iii) Protect adoptive parent(s) from attempts to disturb his/her parental authority
and custody over his/her adopted child.

Any voluntary or involuntary termination of parental authority shall be

administratively or judicially declared so as to establish the status of the child as "legally
available for adoption" and his/her custody transferred to the Department of Social Welfare
and Development or to any duly licensed and accredited child-placing or child-caring agency,
which entity shall be authorized to take steps for the permanent placement of the child;

(iv) Conduct public information and educational campaigns to promote a positive

environment for adoption;

204
 (v) Ensure that sufficient capacity exists within government and private sector
agencies to handle adoption inquiries, process domestic adoption applications, and offer
adoption-related services including, but not limited to, parent preparation and post-adoption
education and counseling; and

(vi) Encourage domestic adoption so as to preserve the child's identity and culture in
his/her native land, and only when this is not available shall intercountry adoption be
considered as a last resort.

Section 3. Definition of Terms. For purposes of this Act, the following terms shall be
defined as:

(a) "Child" is a person below eighteen (18) years of age.

(b) "A child legally available for adoption" refers to a child who has been voluntarily or
involuntarily committed to the Department 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.

(c) "Voluntarily committed child" is one whose parent(s) knowingly and willingly relinquishes
parental authority to the Department.

(d) "Involuntarily committed child" is one whose parent(s), known or unknown, has been
permanently and judicially deprived of parental authority due to abandonment; substantial,
continuous, or repeated neglect; abuse; or incompetence to discharge parental
responsibilities.

(e) "Abandoned child" refers to one who has no proper parental care or guardianship or whose
parent(s) has deserted him/her for a period of at least six (6) continuous months and has
been judicially declared as such.

(f) "Supervised trial custody" is a period of time within which a social worker oversees the
adjustment and emotional readiness of both adopter(s) and adoptee in stabilizing their filial
relationship.

(g) "Department" refers to the Department of Social Welfare and Development.

(h) "Child-placing agency" is a duly licensed and accredited agency by the Department to
provide comprehensive child welfare services including, but not limited to, receiving
applications for adoption, evaluating the prospective adoptive parents, and preparing the
adoption home study.

(i) "Child-caring agency" is a duly licensed and accredited agency by the Department that
provides twenty four (24)-hour residential care services for abandoned, orphaned, neglected,
or voluntarily committed children.

205
(j) "Simulation of birth" is the tampering of the civil registry making it appear in the birth
records that a certain child was born to a person who is not his/her biological mother,
causing such child to lose his/her true identity and status.

PRE-ADOPTION SERVICES

Section 4. Counseling Service. The Department shall provide the services of licensed
social workers to the following:

(a) Biological Parent(s) Counseling shall be provided to the parent(s) before and after the
birth of his/her child. No binding commitment to an adoption plan shall be permitted
before the birth of his/her child. A period of six (6) months shall be allowed for the
biological parent(s) to reconsider any decision to relinquish his/her child for adoption before
the decision becomes irrevocable. Counseling and rehabilitation services shall also be offered
to the biological parent(s) after he/she has relinquished his/her child for adoption.
Steps shall be taken by the Department to ensure that no hurried decisions are made and all
alternatives for the child's future and the implications of each alternative have been
provided.

(b) Prospective Adoptive Parent(s) Counseling sessions, adoption fora and seminars, among
others, shall be provided to prospective adoptive parent(s) to resolve possible adoption
issues and to prepare him/her for effective parenting.

(c) Prospective Adoptee Counseling sessions shall be provided to ensure that he/she
understands the nature and effects of adoption and is able to express his/her views on
adoption in accordance with his/her age and level of maturity.

Section 5. Location of Unknown Parent(s). It shall be the duty of the Department or

the child-placing or child-caring agency which has custody of the child to exert all efforts to
locate his/her unknown biological parent(s). If such efforts fail, the child shall be registered
as a foundling and subsequently be the subject of legal proceedings where he/she shall be
declared abandoned.

Section 6. Support Services. The Department shall develop a pre-adoption program

which shall include, among others, the above mentioned services.

ELIGIBILITY

Section 7. Who May Adopt. The following may adopt:

(a) Any Filipino citizen of legal age, in possession of full civil capacity and legal rights, of
good moral character, has not been convicted of any crime involving moral turpitude,
emotionally and psychologically capable of caring for children, at least sixteen (16) years
older than the adoptee, and who is in a position to support and care for his/her children in
keeping with the means of the family. The requirement of sixteen (16) year difference
between the age of the adopter and adoptee may be waived when the adopter is the
biological parent of the adoptee, or is the spouse of the adoptee's parent;
206
(b) Any alien possessing the same qualifications as above stated for Filipino
nationals: Provided, That his/her country has diplomatic relations with the Republic of the
Philippines, that he/she has been living in the Philippines for at least three (3) continuous
years prior to the filing of the application for adoption and maintains such residence until
the adoption decree is entered, that he/she has been certified by his/her diplomatic or
consular office or any appropriate government agency that he/she has the legal capacity to
adopt in his/her country, and that his/her government allows the adoptee to enter his/her
country as his/her adopted son/daughter: Provided, Further, That the requirements on
residency and certification of the alien's qualification to adopt in his/her country may be
waived for the following:

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

(ii) one who seeks to adopt the legitimate son/daughter of his/her Filipino spouse;
or

(iii) one who is married to a Filipino citizen and seeks to adopt jointly with his/her
spouse a relative within the fourth (4th) degree of consanguinity or affinity of the Filipino
spouse; or

(c) The guardian with respect to the ward after the termination of the guardianship and
clearance of his/her financial accountabilities.
Husband and wife shall jointly adopt, except in the following cases:

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

(ii) if one spouse seeks to adopt his/her own illegitimate son/daughter: Provided,
However, that the other spouse has signified his/her consent thereto; or

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

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

Section 8. Who May Be Adopted. The following may be adopted:

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

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

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

legitimacy;

(d) A person of legal age if, prior to the adoption, said person has been consistently
considered and treated by the adopter(s) as his/her own child since minority;
207
(e) A child whose adoption has been previously rescinded; or

(f) A child whose biological or adoptive parent(s) has died: Provided, That no proceedings
shall be initiated within six (6) months from the time of death of said parent(s).

Section 9. Whose Consent is Necessary to the Adoption. After being properly

counseled and informed of his/her right to give or withhold his/her approval of the
adoption, the written consent of the following to the adoption is hereby required:

(a) The adoptee, if ten (10) years of age or over;

(b) 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;

(c) The legitimate and adopted sons/daughters, ten (10) years of age or over, of the
adopter(s) and adoptee, if any;

(d) The illegitimate sons/daughters, ten (10) years of age or over, of the adopter if living with
said adopter and the latter's spouse, if any; and

(e) The spouse, if any, of the person adopting or to be adopted.

PROCEDURE

Section 10. Hurried Decisions. In all proceedings for adoption, the court shall require
proof that the biological parent(s) has been properly counseled to prevent him/her from
making hurried decisions caused by strain or anxiety to give up the child, and to sustain that
all measures to strengthen the family have been exhausted and that any prolonged stay of the
child in his/her own home will be inimical to his/her welfare and interest.

Section 11. Case Study. No petition for adoption shall be set for hearing unless a licensed
social worker of the Department, the social service office of the local government unit, or
any child-placing or child-caring agency has made a case study of the adoptee, his/her
biological parent(s), as well as the adopter(s), and has submitted the report and
recommendations on the matter to the court hearing such petition.

At the time of preparation of the adoptee's case study, the concerned social worker shall
confirm with the Civil Registry the real identity and registered name of the adoptee. If the
birth of the adoptee was not registered with the Civil Registry, it shall be the responsibility of
the concerned social worker to ensure that the adoptee is registered.

The case study on the adoptee shall establish that he/she is legally available for adoption and
that the documents to support this fact are valid and authentic. Further, the case study of the
adopter(s) shall ascertain his/her genuine intentions and that the adoption is in the best
interest of the child.

The Department shall intervene on behalf of the adoptee if it finds, after the conduct of the
case studies, that the petition should be denied. The case studies and other relevant
208
documents and records pertaining to the adoptee and the adoption shall be preserved by the
Department.

Section 12. Supervised Trial Custody. No petition for adoption shall be finally granted
until the adopter(s) has been given by the court a supervised trial custody period for at least
six (6) months within which the parties are expected to adjust psychologically and
emotionally to each other and establish a bonding relationship. During said period,
temporary parental authority shall be vested in the adopter(s).

The court may motu proprio or upon motion of any party reduce the trial period if it finds
the same to be in the best interest of the adoptee, stating the reasons for the reduction of the
period. However, for alien adopter(s), he/she must complete the six (6)-month trial custody
except for those enumerated in Sec. 7 (b) (i) (ii) (iii).

If the child is below seven (7) years of age and is placed with the prospective adopter(s)
through a pre-adoption placement authority issued by the Department, the prospective
adopter(s) shall enjoy all the benefits to which biological parent(s) is entitled from the date
the adoptee is placed with the prospective adopter(s).

Section 13. Decree of Adoption. If, after the publication of the order of hearing has been
complied with, and no opposition has been interposed to the petition, and after
consideration of the case studies, the qualifications of the adopter(s), trial custody report and
the evidence submitted, the court is convinced that the petitioners are qualified to adopt, and
that the adoption would redound to the best interest of the adoptee, a decree of adoption
shall be entered which shall be effective as of the date the original petition was filed. This
provision shall also apply in case the petitioner(s) dies before the issuance of the decree of
adoption to protect the interest of the adoptee. The decree shall state the name by which the
child is to be known.

Section 14. Civil Registry Record. An amended certificate of birth shall be issued by the
Civil Registry, as required by the Rules of Court, attesting to the fact that the adoptee is the
child of the adopter(s) by being registered with his/her surname. The original certificate of
birth shall be stamped "cancelled" with the annotation of the issuance of an amended birth
certificate in its place and shall be sealed in the civil registry records. The new birth
certificate to be issued to the adoptee shall not bear any notation that it is an amended issue.

Section 15. Confidential Nature of Proceedings and Records. All hearings in adoption
cases shall be confidential and shall not be open to the public. All records, books, and papers
relating to the adoption cases in the files of the court, the Department, or any other agency
or institution participating in the adoption proceedings shall be kept strictly confidential.
If the court finds that the disclosure of the information to a third person is necessary for
purposes connected with or arising out of the adoption and will be for the best interest of
the adoptee, the court may merit the necessary information to be released, restricting the
purposes for which it may be used.

209
EFFECTS OF ADOPTION

Section 16. Parental Authority. Except in cases where the biological parent is the spouse
of the adopter, all legal ties between the biological parent(s) and the adoptee shall be severed
and the same shall then be vested on the adopter(s).

Section 17. Legitimacy. The adoptee shall be considered the legitimate son/daughter of
the adopter(s) for all intents and purposes and as such is entitled to all the rights and
obligations provided by law to legitimate sons/daughters born to them without
discrimination of any kind. To this end, the adoptee is entitled to love, guidance, and support
in keeping with the means of the family.

Section 18. Succession. In legal and intestate succession, the adopter(s) and the adoptee
shall have reciprocal rights of succession without distinction from legitimate filiation.
However, if the adoptee and his/her biological parent(s) had left a will, the law on
testamentary succession shall govern.

RESCISSION OF ADOPTION

Section 19. Grounds for Rescission of Adoption. Upon petition of the adoptee, with
the assistance of the Department if a minor or if over eighteen (18) years of age but is
incapacitated, as guardian/counsel, the adoption may be rescinded on any of the following
grounds committed by the adopter(s): (a) repeated physical and verbal maltreatment by the
adopter(s) despite having undergone counseling; (b) attempt on the life of the adoptee; (c)
sexual assault or violence; or (d) abandonment and failure to comply with parental
obligations. Adoption, being in the best interest of the child, shall not be subject to
rescission by the adopter(s). However, the adopter(s) may disinherit the adoptee for causes
provided in Article 919 of the Civil Code.

Section 20. Effects of Rescission. If the petition is granted, the parental authority of the
adoptee's biological parent(s), if known, or the legal custody of the Department shall be
restored if the adoptee is still a minor or incapacitated. The reciprocal rights and obligations
of the adopter(s) and the adoptee to each other shall be extinguished.

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

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

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

VIOLATIONS AND PENALTIES

Section 21. Violations and Penalties. (a) The penalty of imprisonment ranging from six
(6) years and one (1) day to twelve (12) years and/or a fine not less than Fifty thousand
210
pesos (P50,000.00), but not more than Two hundred thousand pesos (P200,000.00) at the
discretion of the court shall be imposed on any person who shall commit any of the
following acts:

(i) obtaining consent for an adoption through coercion, undue influence, fraud,
improper material inducement, or other similar acts;

(ii) non-compliance with the procedures and safeguards provided by the law for
adoption; or

(iii) subjecting or exposing the child to be adopted to danger, abuse, or exploitation.

(b) Any person who shall cause the fictitious registration of the birth of a child under the
name(s) of a person(s) who is not his/her biological parent(s) shall be guilty of simulation of
birth, and shall be punished by prision mayor in its medium period and a fine not exceeding
Fifty thousand pesos (P50,000.00).

Any physician or nurse or hospital personnel who, in violation of his/her oath of office,
shall cooperate in the execution of the abovementioned crime shall suffer the penalties
herein prescribed and also the penalty of permanent disqualification.

Any person who shall violate established regulations relating to the confidentiality and
integrity of records, documents, and communications of adoption applications, cases, and
processes shall suffer the penalty of imprisonment ranging from one (1) year and one (1) day
to two (2) years, and/or a fine of not less than Five thousand pesos (P5,000.00) but not
more than Ten thousand pesos (P10,000.00), at the discretion of the court.

A penalty lower by two (2) degrees than that prescribed for the consummated offense under
this Article shall be imposed upon the principals of the attempt to commit any of the acts
herein enumerated. Acts punishable under this Article, when committed by a syndicate or
where it involves two (2) or more children shall be considered as an offense constituting
child trafficking and shall merit the penalty of reclusion perpetua.

Acts punishable under this Article are deemed committed by a syndicate if carried out by a
group of three (3) or more persons conspiring and/or confederating with one another in
carrying out any of the unlawful acts defined under this Article. Penalties as are herein
provided, shall be in addition to any other penalties which may be imposed for the same acts
punishable under other laws, ordinances, executive orders, and proclamations.

When the offender is an alien, he/she shall be deported immediately after service of
sentence and perpetually excluded from entry to the country.
Any government official, employee or functionary who shall be found guilty of violating any
of the provisions of this Act, or who shall conspire with private individuals shall, in addition
to the above-prescribed penalties, be penalized in accordance with existing civil service laws,
rules and regulations: Provided, That upon the filing of a case, either administrative or
criminal, said government official, employee, or functionary concerned shall automatically
suffer suspension until the resolution of the case.

211
Section 22. Rectification of Simulated Births. A person who has, prior to the effectivity
of this Act, simulated the birth of a child shall not be punished for such act: Provided, That
the simulation of birth was made for the best interest of the child and that he/she has been
consistently considered and treated by that person as his/her own son/daughter: Provided,
further, That the application for correction of the birth registration and petition for adoption
shall be filed within five (5) years from the effectivity of this Act and completed
thereafter: Provided, finally, That such person complies with the procedure as specified in
Article IV of this Act and other requirements as determined by the Department.

FINAL PROVISIONS

Section 23. Adoption Resource and Referral Office. There shall be established an
Adoption Resources and Referral Office under the Department with the following
functions: (a) monitor the existence, number, and flow of children legally available for
adoption and prospective adopter(s) so as to facilitate their matching; (b) maintain a
nationwide information and educational campaign on domestic adoption; (c) keep records of
adoption proceedings; (d) generate resources to help child-caring and child-placing agencies
and foster homes maintain viability; and (e) do policy research in collaboration with the
Intercountry Adoption Board and other concerned agencies. The office shall be manned by
adoption experts from the public and private sectors.

Section 24. Implementing Rules and Regulations. Within six (6) months from the
promulgation of this Act, the Department, with the Council for the Welfare of Children, the
Office of Civil Registry General, the Department of Justice, Office of the Solicitor General,
and two (2) private individuals representing child-placing and child-caring agencies shall
formulate the necessary guidelines to make the provisions of this Act operative.

Section 25. Appropriations. Such sum as may be necessary for the implementation of the
provisions of this Act shall be included in the General Appropriations Act of the year
following its enactment into law and thereafter.

Section 26. Repealing Clause. Any law, presidential decree or issuance, executive order,
letter of instruction, administrative order, rule, or regulation contrary to, or inconsistent with
the provisions of this Act is hereby repealed, modified, or amended accordingly.

Section 27. Separability Clause. If any provision of this Act is held invalid or
unconstitutional, the other provisions not affected thereby shall remain valid and subsisting.

Section 28. Effectivity Clause. This Act shall take effect fifteen (15) days following its
complete publication in any newspaper of general circulation or in the Official Gazette.

Approved: February 25, 1998

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 REPUBLIC ACT NO. 8043

AN ACT ESTABLISHING THE RULES TO GOVERN INTER-COUNTRY

ADOPTION OF FILIPINO CHILDREN, AND FOR OTHER PURPOSES.

GENERAL PROVISIONS

Section 1. Short Title. This Act shall be known as the "Inter-Country Adoption Act of 1995."

Sec. 2. Declaration of Policy. It is hereby declared the policy of the State to provide every
neglected and abandoned child with a family that will provide such child with love and care
as well as opportunities for growth and development. Towards this end, efforts shall be
exerted to place the child with an adoptive family in the Philippines. However, recognizing
that inter-country adoption may be considered as allowing aliens not presently allowed by
law to adopt Filipino children if such children cannot be adopted by qualified Filipino
citizens or aliens, the State shall take measures to ensure that inter-country adoptions are
allowed when the same shall prove beneficial to the child's best interests, and shall serve and
protect his/her fundamental rights.chan robles virtual law library

Sec. 3. Definition of Terms. As used in this Act. the term:

(a) 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.

(b) Child means a person below fifteen (15) years of age unless sooner emancipated by law.

(c) Department refers to the Department of Social Welfare and Development of the
Republic of the Philippines.

(d) Secretary refers to the Secretary of the Department of Social Welfare and Development.

(e) Authorized and accredited agency refers to the State welfare agency or a licensed
adoption agency in the country of the adopting parents which provide comprehensive social
services and which is duly recognized by the Department.

(f) Legally-free child means a child who has been voluntarily or involuntarily committed to
the Department, in accordance with the Child and Youth Welfare Code.

(g) Matching refers to the judicious pairing of the adoptive child and the applicant to
promote a mutually satisfying parent-child relationship.

(h) Board refers to the Inter-country Adoption Board.

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THE INTER-COUNTRY ADOPTION BOARD

Sec. 4. The Inter-Country Adoption Board. There is hereby created the Inter-Country
Adoption Board, hereinafter referred to as the Board to act as the central authority in
matters relating to inter-country adoption. It shall act as the policy-making body for
purposes of carrying out the provisions of this Act, in consultation and coordination with
the Department, the different child-care and placement agencies, adoptive agencies, as well
as non-governmental organizations engaged in child-care and placement activities. As such,
it shall:

(a) Protect the Filipino child from abuse, exploitation, trafficking and/or sale or any other
practice in connection with adoption which is harmful, detrimental, or prejudicial to the
child;

(b) Collect, maintain, and preserve confidential information about the child and the adoptive
parents;

(c) Monitor, follow up, and facilitate completion of adoption of the child through authorized
and accredited agency;

(d) Prevent improper financial or other gain in connection with an adoption and deter
improper practices contrary to this Act;

(e) Promote the development of adoption services including post-legal adoption;

(f) License and accredit child-caring/placement agencies and collaborate with them in the
placement of Filipino children;

(g) Accredit and authorize foreign adoption agency in the placement of Filipino children in
their own country; and

(h) Cancel the license to operate and blacklist the child-caring and placement agency or
adoptive agency involved from the accreditation list of the Board upon a finding of violation
of any provision under this Act.

Sec. 5. Composition of the Board. The Board shall be composed of the Secretary of the
Department as ex officio Chairman, and six (6) other members to be appointed by the
President for a nonrenewable term of six (6) years: Provided, That there shall be appointed
one (1) psychiatrist or psychologist, two (2) lawyers who shall have at least the qualifications
of a regional trial court judge, one (1) registered social worker and two (2) representatives
from non-governmental organizations engaged in child-caring and placement activities. The
members of the Board shall receive a per diem allowance of One thousand five hundred
pesos (P1,500) for each meeting attended by them: Provided, further, That no compensation
shall be paid for more than four (4) meetings a month.

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Sec. 6. Powers and Functions of the Board. The Board shall have the following powers
and functions:

(a) to prescribe rules and regulations as it may deem reasonably necessary to carry out the
provisions of this Act, after consultation and upon favorable recommendation of the
different agencies concerned with the child-caring, placement, and adoption;

(b) to set the guidelines for the convening of an Inter-country Adoption Placement
Committee which shall be under the direct supervision of the Board;

(c) to set the guidelines for the manner by which selection/matching of prospective adoptive
parents and adoptive child can be made;

(d) to determine a reasonable schedule of fees and charges to be exacted in connection with
the application for adoption;

(e) to determine the form and contents of the application for inter-country adoption;

(g) to institute systems and procedures to prevent improper financial gain in connection with
adoption and deter improper practices which are contrary to this Act;

(h) to promote the development of adoption services, including post-legal adoption services,

(i) to accredit and authorize foreign private adoption agencies which have demonstrated
professionalism, competence and have consistently pursued non-profit objectives to engage
in the placement of Filipino children in their own country: Provided, That such foreign private
agencies are duly authorized and accredited by their own government to conduct inter-
country adoption:Provided, however, That the total number of authorized and accredited
foreign private adoption agencies shall not exceed one hundred (100) a year;

(j) to take appropriate measures to ensure confidentiality of the records of the child, the
natural parents and the adoptive parents at all times;

(k) to prepare, review or modify, and thereafter, recommend to the Department of Foreign
Affairs, Memoranda of Agreement respecting inter-country adoption consistent with the
implementation of this Act and its stated goals, entered into, between and among foreign
governments, international organizations and recognized international non-governmental
organizations;

(l) to assist other concerned agencies and the courts in the implementation of this Act,
particularly as regards coordination with foreign persons, agencies and other entities
involved in the process of adoption and the physical transfer of the child; and
(m) to perform such other functions on matters relating to inter-country adoption as may be
determined by the President.

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PROCEDURE

Sec. 7. Inter-Country Adoption as the Last Resort. The Board shall ensure that all
possibilities for adoption of the child under the Family Code have been exhausted and that
inter-country adoption is in the best interest of the child. Towards this end, the Board shall
set up the guidelines to ensure that steps will be taken to place the child in the Philippines
before the child is placed for inter-country adoption: Provided, however, That the maximum
number that may be allowed for foreign adoption shall not exceed six hundred (600) a year
for the first five (5) years.

Sec. 8. Who May be Adopted. Only a legally free child may be the subject of inter-
country adoption. In order that such child may be considered for placement, the following
documents must be submitted to the Board:

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

Sec. 9. Who May Adopt. An alien or a Filipino citizen permanently residing abroad may
file an application for inter-country adoption of a Filipino child if he/she:

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

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

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

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

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

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

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

216
(h) comes from a country with whom the Philippines has diplomatic relations and whose
government maintains a similarly authorized and accredited agency and that adoption is
allowed under his/her national laws; and

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

Sec. 10. Where to File Application. 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
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 as set forth in the implementing rules and
regulations to be promulgated by the Board.

The application shall be supported by the following documents written and officially
translated in English.

(a) Birth certificate of applicant(s);

(b) Marriage contract, if married, and divorce decree, if applicable;

(c) Written consent of their biological or adoptive children above ten (10) years of age, in the
form of sworn statement;

(d) Physical, medical and psychological evaluation by a duly licensed physician and
psychologist;

(e) Income tax returns or any document showing the financial capability of the applicant(s);

(f) Police clearance of applicant(s);

(g) Character reference from the local church/minister, the applicant's employer and a
member of the immediate community who have known the applicant(s) for at least five (5)
years; and
(h) Recent postcard-size pictures of the applicant(s) and his immediate family;

The Rules of Court shall apply in case of adoption by judicial proceedings.

Sec. 11. Family Selection/Matching. No child shall be matched to a foreign adoptive

family unless it is satisfactorily shown that the child cannot be adopted locally. The
clearance, as issued by the Board, with the copy of the minutes of the meetings, shall form
part of the records of the child to be adopted. When the Board is ready to transmit the
Placement Authority to the authorized and accredited inter-country adoption agency and all
the travel documents of the child are ready, the adoptive parents, or any one of them, shall
personally fetch the child in the Philippines.

Sec. 12. Pre-adoptive Placement Costs. The applicant(s) shall bear the following costs
incidental to the placement of the child;
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(a) The cost of bringing the child from the Philippines to the residence of the applicant(s)
abroad, including all travel expenses within the Philippines and abroad; and

(b) The cost of passport, visa, medical examination and psychological evaluation required,
and other related expenses.

Sec. 13. Fees, Charges and Assessments. Fees, charges, and assessments collected by the
Board in the exercise of its functions shall be used solely to process applications for inter-
country adoption and to support the activities of the Board.

Sec. 14. Supervision of Trial Custody. The governmental agency or the authorized and
accredited agency in the country of the adoptive parents which filed the application for inter-
country adoption shall be responsible for the trial custody and the care of the child. It shall
also provide family counseling and other related services. The trial custody shall be for a
period of six (6) months from the time of placement. Only after the lapse of the period of
trial custody shall a decree of adoption be issued in the said country a copy of which shall be
sent to the Board to form part of the records of the child.chan robles virtual law library

During the trial custody, the adopting parent(s) shall submit to the governmental agency or
the authorized and accredited agency, which shall in turn transmit a copy to the Board, a
progress report of the child's adjustment. The progress report shall be taken into
consideration in deciding whether or not to issue the decree of adoption.

The Department of Foreign Affairs shall set up a system by which Filipino children sent
abroad for trial custody are monitored and checked as reported by the authorized and
accredited inter-country adoption agency as well as the repatriation to the Philippines of a
Filipino child whose adoption has not been approved.

Sec. 15. Executive Agreements. The Department of Foreign Affairs, upon representation
of the Board, shall cause the preparation of Executive Agreements with countries of the
foreign adoption agencies to ensure the legitimate concurrence of said countries in
upholding the safeguards provided by this Act.

PENALTIES

Sec. 16. Penalties. (a) Any person who shall knowingly participate in the conduct or
carrying out of an illegal adoption, in violation of the provisions of this Act, shall be
punished with a penalty of imprisonment ranging from six (6) years and one (1) day to
twelve (12) years and/or a fine of not less than Fifty thousand pesos (P50,000), but not more
than Two hundred thousand pesos (P200.000), at the discretion of the court. For purposes
of this Act, an adoption is illegal if it is effected in any manner contrary to the provisions of
this Act or established State policies, its implementing rules and regulations, executive
agreements, and other laws pertaining to adoption. Illegality may be presumed from the
following acts:

(1) consent for an adoption was acquired through, or attended by coercion, fraud, improper
material inducement;

218
(2) there is no authority from the Board to effect adoption;

(3) the procedures and safeguards placed under the law for adoption were not complied
with; and

(4) the child to be adopted is subjected to, or exposed to danger, abuse and exploitation.

(b)Any person who shall violate established regulations relating to the confidentiality and
integrity of records, documents and communications of adoption applications, cases and
processes shall suffer the penalty of imprisonment ranging from one (1) year and one (1) day
to two (2) years, and/or a fine of not less than Five thousand pesos (P5,000), but not more
than Ten thousand pesos (P10,000), at the discretion of the court.

A penalty lower by two (2) degrees than that prescribed for the consummated felony under
this Article shall be imposed upon the principals of the attempt to commit any of the acts
herein enumerated.

Acts punishable under this Article, when committed by a syndicate or where it involves two
or more children shall be considered as an offense constituting child trafficking and shall
merit the penalty of reclusion perpetua.

Acts punishable under this Article are deemed committed by a syndicate if carried out by a
group of three (3) or more persons conspiring and/or confederating with one another in
carrying out any of the unlawful acts defined under this Article.Penalties as are herein
provided shall be in addition to any other penalties which may be imposed for the same acts
punishable under other laws, ordinances, executive orders, and proclamations.chan robles
virtual law library

Sec. 17. Public Officers as Offenders. Any government official, employee or functionary
who shall be found guilty of violating any of the provisions of this Act, or who shall
conspire with private individuals shall, in addition to the above-prescribed penalties, be
penalized in accordance with existing civil service laws, rules and regulations: Provided, That
upon the filing of a case, either administrative or criminal, said government official,
employee or functionary concerned shall automatically suffer suspension until the resolution
of the case.

FINAL PROVISIONS

Sec. 18. Implementing Rules and Regulations. The Inter-country Adoption Board, in
coordination with the Council for the Welfare of Children, the Department of Foreign
Affairs, and the Department of Justice, after due consultation with agencies involved in
child-care and placement, shall promulgate the necessary rules and regulations to implement
the provisions of this Act within six (6) months after its effectivity.

Sec. 19. Appropriations. The amount of Five million pesos (P5,000,000) is hereby
appropriated from the proceeds of the Lotto for the initial operations of the Board and
subsequently the appropriations of the same shall be included in the General Appropriations
Act for the year following its enactment.
219
Sec. 20. Separability Clause. If any provision, or part hereof is held invalid or
unconstitutional, the remainder of the law or the provision not otherwise affected, shall
remain valid and subsisting.

Sec. 21. Repealing Clause. Any law, decree, executive order, administrative order or rules
and regulations contrary to, or inconsistent with the provisions of this Act are hereby
repealed, modified or amended accordingly.chan robles virtual law library

Sec. 22. Effectivity Clause. This Act shall take effect fifteen (15) days after its publication
in two (2) newspapers of general circulation.

Approved: June 7, 1995

Republic Act No. 7610

AN ACT PROVIDING FOR STRONGER DETERRENCE AND SPECIAL

PROTECTION AGAINST CHILD ABUSE, EXPLOITATION AND
DISCRIMINATION, AND FOR OTHER PURPOSES

Title, Policy, Principles and Definitions of Terms

Section 1. Title. This Act shall be known as the "Special Protection of Children
Against Abuse, Exploitation and Discrimination Act."

Section 2. Declaration of State Policy and Principles. It is hereby declared to be the

policy of the State to provide special protection to children from all firms of abuse, neglect,
cruelty exploitation and discrimination and other conditions, prejudicial their development;
provide sanctions for their commission and carry out a program for prevention and
deterrence of and crisis intervention in situations of child abuse, exploitation and
discrimination. The State shall intervene on behalf of the child when the parent, guardian,
teacher or person having care or custody of the child fails or is unable to protect the child
against abuse, exploitation and discrimination or when such acts against the child are
committed by the said parent, guardian, teacher or person having care and custody of the
same.

It shall be the policy of the State to protect and rehabilitate children gravely threatened or
endangered by circumstances which affect or will affect their survival and normal
development and over which they have no control.

The best interests of children shall be the paramount consideration in all actions concerning
them, whether undertaken by public or private social welfare institutions, courts of law,
administrative authorities, and legislative bodies, consistent with the principle of First Call
for Children as enunciated in the United Nations Convention of the Rights of the Child.

220
Every effort shall be exerted to promote the welfare of children and enhance their
opportunities for a useful and happy life.

Section 3. Definition of Terms.

(a) "Children" refers to person below eighteen (18) years of age or those over but are unable
to fully take care of themselves or protect themselves from abuse, neglect, cruelty,
exploitation or discrimination because of a physical or mental disability or condition;
(b) "Child abuse" refers to the maltreatment, whether habitual or not, of the child which
includes any of the following:

(1) Psychological and physical abuse, neglect, cruelty, sexual abuse and emotional
maltreatment;

(2) Any act by deeds or words which debases, degrades or demeans the intrinsic
worth and dignity of a child as a human being;

(3) Unreasonable deprivation of his basic needs for survival, such as food and
shelter; or

(4) Failure to immediately give medical treatment to an injured child resulting in

serious impairment of his growth and development or in his permanent incapacity or death.

(c) "Circumstances which gravely threaten or endanger the survival and normal development
of children" include, but are not limited to, the following;

(1) Being in a community where there is armed conflict or being affected by armed
conflict-related activities;

(2) Working under conditions hazardous to life, safety and normal which unduly
interfere with their normal development;

(3) Living in or fending for themselves in the streets of urban or rural areas without
the care of parents or a guardian or basic services needed for a good quality of life;

(4) Being a member of a indigenous cultural community and/or living under

conditions of extreme poverty or in an area which is underdeveloped and/or lacks or has
inadequate access to basic services needed for a good quality of life;

(5) Being a victim of a man-made or natural disaster or calamity; or

(6) Circumstances analogous to those abovestated which endanger the life, safety or
normal development of children.

(d) "Comprehensive program against child abuse, exploitation and discrimination" refers to
the coordinated program of services and facilities to protected children against:

221
 (1) Child Prostitution and other sexual abuse;
(2) Child trafficking;
(3) Obscene publications and indecent shows;
(4) Other acts of abuses; and
(5) Circumstances which threaten or endanger the survival and normal development
of children.

Program on Child Abuse, Exploitation and Discrimination

Section 4. Formulation of the Program. There shall be a comprehensive program to be

formulated, by the Department of Justice and the Department of Social Welfare and
Development in coordination with other government agencies and private sector concerned,
within one (1) year from the effectivity of this Act, to protect children against child
prostitution and other sexual abuse; child trafficking, obscene publications and indecent
shows; other acts of abuse; and circumstances which endanger child survival and normal
development.

Child Prostitution and Other Sexual Abuse

Section 5. Child Prostitution and Other Sexual Abuse. Children, whether male or
female, who for money, profit, or any other consideration or due to the coercion or
influence of any adult, syndicate or group, indulge in sexual intercourse or lascivious
conduct, are deemed to be children exploited in prostitution and other sexual abuse.

The penalty of reclusion temporal in its medium period to reclusion perpetua shall be
imposed upon the following:

(a) Those who engage in or promote, facilitate or induce child prostitution which include,
but are not limited to, the following:

(1) Acting as a procurer of a child prostitute;

(2) Inducing a person to be a client of a child prostitute by means of written or oral

advertisements or other similar means;

(3) Taking advantage of influence or relationship to procure a child as prostitute;

(4) Threatening or using violence towards a child to engage him as a prostitute; or

(5) Giving monetary consideration goods or other pecuniary benefit to a child with
intent to engage such child in prostitution.

(b) Those who commit the act of sexual intercourse of lascivious conduct with a child
exploited in prostitution or subject to other sexual abuse; Provided, That when the victims is
under twelve (12) years of age, the perpetrators shall be prosecuted under Article 335,
paragraph 3, for rape and Article 336 of Act No. 3815, as amended, the Revised Penal Code,
for rape or lascivious conduct, as the case may be: Provided, That the penalty for lascivious

222
conduct when the victim is under twelve (12) years of age shall be reclusion temporal in its
medium period; and

(c) Those who derive profit or advantage therefrom, whether as manager or owner of the
establishment where the prostitution takes place, or of the sauna, disco, bar, resort, place of
entertainment or establishment serving as a cover or which engages in prostitution in
addition to the activity for which the license has been issued to said establishment.

Section 6. Attempt To Commit Child Prostitution. There is an attempt to commit

child prostitution under Section 5, paragraph (a) hereof when any person who, not being a
relative of a child, is found alone with the said child inside the room or cubicle of a house, an
inn, hotel, motel, pension house, apartelle or other similar establishments, vessel, vehicle or
any other hidden or secluded area under circumstances which would lead a reasonable
person to believe that the child is about to be exploited in prostitution and other sexual
abuse.

There is also an attempt to commit child prostitution, under paragraph (b) of Section 5
hereof when any person is receiving services from a child in a sauna parlor or bath, massage
clinic, health club and other similar establishments. A penalty lower by two (2) degrees than
that prescribed for the consummated felony under Section 5 hereof shall be imposed upon
the principals of the attempt to commit the crime of child prostitution under this Act, or, in
the proper case, under the Revised Penal Code.

Child Trafficking

Section 7. Child Trafficking. Any person who shall engage in trading and dealing with
children including, but not limited to, the act of buying and selling of a child for money, or
for any other consideration, or barter, shall suffer the penalty of reclusion temporal to
reclusion perpetua. The penalty shall be imposed in its maximum period when the victim is
under twelve (12) years of age.Section 8. Attempt to Commit Child Trafficking. There
is an attempt to commit child trafficking under Section 7 of this Act:

(a) When a child travels alone to a foreign country without valid reason therefor and without
clearance issued by the Department of Social Welfare and Development or written permit or
justification from the child's parents or legal guardian;

(c) When a person, agency, establishment or child-caring institution recruits women or

couples to bear children for the purpose of child trafficking; or

(d) When a doctor, hospital or clinic official or employee, nurse, midwife, local civil registrar
or any other person simulates birth for the purpose of child trafficking; or

(e) When a person engages in the act of finding children among low-income families,
hospitals, clinics, nurseries, day-care centers, or other child-during institutions who can be
offered for the purpose of child trafficking.

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A penalty lower two (2) degrees than that prescribed for the consummated felony under
Section 7 hereof shall be imposed upon the principals of the attempt to commit child
trafficking under this Act.

Section 9. Obscene Publications and Indecent Shows. Any person who shall hire,
employ, use, persuade, induce or coerce a child to perform in obscene exhibitions and
indecent shows, whether live or in video, or model in obscene publications or pornographic
materials or to sell or distribute the said materials shall suffer the penalty of prision mayor in
its medium period. If the child used as a performer, subject or seller/distributor is below
twelve (12) years of age, the penalty shall be imposed in its maximum period.
Any ascendant, guardian, or person entrusted in any capacity with the care of a child who
shall cause and/or allow such child to be employed or to participate in an obscene play,
scene, act, movie or show or in any other acts covered by this section shall suffer the penalty
of prision mayor in its medium period.

Section 10. Other Acts of Neglect, Abuse, Cruelty or Exploitation and Other
Conditions Prejudicial to the Child's Development.

(a) Any person who shall commit any other acts of child abuse, cruelty or exploitation or to
be responsible for other conditions prejudicial to the child's development including those
covered by Article 59 of Presidential Decree No. 603, as amended, but not covered by the
Revised Penal Code, as amended, shall suffer the penalty of prision mayor in its minimum
period.

(b) Any person who shall keep or have in his company a minor, twelve (12) years or under or
who in ten (10) years or more his junior in any public or private place, hotel, motel, beer
joint, discotheque, cabaret, pension house, sauna or massage parlor, beach and/or other
tourist resort or similar places shall suffer the penalty of prision mayor in its maximum
period and a fine of not less than Fifty thousand pesos (P50,000): Provided, That this
provision shall not apply to any person who is related within the fourth degree of
consanguinity or affinity or any bond recognized by law, local custom and tradition or acts in
the performance of a social, moral or legal duty.

(c) Any person who shall induce, deliver or offer a minor to any one prohibited by this Act
to keep or have in his company a minor as provided in the preceding paragraph shall suffer
the penalty of prision mayor in its medium period and a fine of not less than Forty thousand
pesos (P40,000); Provided, however, That should the perpetrator be an ascendant,
stepparent or guardian of the minor, the penalty to be imposed shall be prision mayor in its
maximum period, a fine of not less than Fifty thousand pesos (P50,000), and the loss of
parental authority over the minor.

(d) Any person, owner, manager or one entrusted with the operation of any public or private
place of accommodation, whether for occupancy, food, drink or otherwise, including
residential places, who allows any person to take along with him to such place or places any
minor herein described shall be imposed a penalty of prision mayor in its medium period
and a fine of not less than Fifty thousand pesos (P50,000), and the loss of the license to
operate such a place or establishment.

224
(e) Any person who shall use, coerce, force or intimidate a street child or any other child to;

(1) Beg or use begging as a means of living;

(2) Act as conduit or middlemen in drug trafficking or pushing; or

(3) Conduct any illegal activities, shall suffer the penalty of prision correccional in its
medium period to reclusion perpetua.

For purposes of this Act, the penalty for the commission of acts punishable under Articles
248, 249, 262, paragraph 2, and 263, paragraph 1 of Act No. 3815, as amended, the Revised
Penal Code, for the crimes of murder, homicide, other intentional mutilation, and serious
physical injuries, respectively, shall be reclusion perpetua when the victim is under twelve
(12) years of age. The penalty for the commission of acts punishable under Article 337, 339,
340 and 341 of Act No. 3815, as amended, the Revised Penal Code, for the crimes of
qualified seduction, acts of lasciviousness with the consent of the offended party, corruption
of minors, and white slave trade, respectively, shall be one (1) degree higher than that
imposed by law when the victim is under twelve (12) years age.
The victim of the acts committed under this section shall be entrusted to the care of the
Department of Social Welfare and Development.

Section 11. Sanctions of Establishments or Enterprises which Promote, Facilitate, or

Conduct Activities Constituting Child Prostitution and Other Sexual Abuse, Child
Trafficking, Obscene Publications and Indecent Shows, and Other Acts of Abuse .
All establishments and enterprises which promote or facilitate child prostitution and other
sexual abuse, child trafficking, obscene publications and indecent shows, and other acts of
abuse shall be immediately closed and their authority or license to operate cancelled, without
prejudice to the owner or manager thereof being prosecuted under this Act and/or the
Revised Penal Code, as amended, or special laws. A sign with the words "off limits" shall be
conspicuously displayed outside the establishments or enterprises by the Department of
Social Welfare and Development for such period which shall not be less than one (1) year, as
the Department may determine. The unauthorized removal of such sign shall be punishable
by prision correccional.

An establishment shall be deemed to promote or facilitate child prostitution and other sexual
abuse, child trafficking, obscene publications and indecent shows, and other acts of abuse if
the acts constituting the same occur in the premises of said establishment under this Act or
in violation of the Revised Penal Code, as amended. An enterprise such as a sauna, travel
agency, or recruitment agency which: promotes the aforementioned acts as part of a tour for
foreign tourists; exhibits children in a lewd or indecent show; provides child masseurs for
adults of the same or opposite sex and said services include any lascivious conduct with the
customers; or solicits children or activities constituting the aforementioned acts shall be
deemed to have committed the acts penalized herein.

Section 12. Employment of Children. Children below fifteen (15) years of age may be
employed except:

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(1) When a child works directly under the sole responsibility of his parents or legal guardian
and where only members of the employer's family are employed: Provided, however, That
his employment neither endangers his life, safety and health and morals, nor impairs his
normal development: Provided, further, That the parent or legal guardian shall provide the
said minor child with the prescribed primary and/or secondary education; or

(2) When a child's employment or participation in public & entertainment or information

through cinema, theater, radio or television is essential: Provided, The employment contract
concluded by the child's parent or guardian, with the express agreement of the child
concerned, if possible, and the approval of the Department of Labor and Employment:
Provided, That the following requirements in all instances are strictly complied with:

(a) The employer shall ensure the protection, health, safety and morals of the child;

(b) the employer shall institute measures to prevent the child's exploitation or
discrimination taking into account the system and level of remuneration, and the duration
and arrangement of working time; and;

(c) The employer shall formulate and implement, subject to the approval and
supervision of competent authorities, a continuing program for training and skill acquisition
of the child.

In the above exceptional cases where any such child may be employed, the employer shall
first secure, before engaging such child, a work permit from the Department of Labor and
Employment which shall ensure observance of the above requirement.
The Department of Labor Employment shall promulgate rules and regulations necessary for
the effective implementation of this Section.

Section 13. Non-formal Education for Working Children. The Department of

Education, Culture and Sports shall promulgate a course design under its non-formal
education program aimed at promoting the intellectual, moral and vocational efficiency of
working children who have not undergone or finished elementary or secondary education.
Such course design shall integrate the learning process deemed most effective under given
circumstances.

Section 14. Prohibition on the Employment of Children in Certain Advertisements.

No person shall employ child models in all commercials or advertisements promoting
alcoholic beverages, intoxicating drinks, tobacco and its byproducts and violence.

Section 15. Duty of Employer. Every employer shall comply with the duties provided for
in Articles 108 and 109 of Presidential Decree No. 603.

Section 16. Penalties. Any person who shall violate any provision of this Article shall
suffer the penalty of a fine of not less than One thousand pesos (P1,000) but not more than
Ten thousand pesos (P10,000) or imprisonment of not less than three (3) months but not
more than three (3) years, or both at the discretion of the court; Provided, That, in case of
repeated violations of the provisions of this Article, the offender's license to operate shall be
revoked.
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Section 17. Survival, Protection and Development. In addition to the rights guaranteed
to children under this Act and other existing laws, children of indigenous cultural
communities shall be entitled to protection, survival and development consistent with the
customs and traditions of their respective communities.

Section 18. System of and Access to Education. The Department of Education,

Culture and Sports shall develop and institute an alternative system of education for children
of indigenous cultural communities which culture-specific and relevant to the needs of and
the existing situation in their communities. The Department of Education, Culture and
Sports shall also accredit and support non-formal but functional indigenous educational
programs conducted by non-government organizations in said communities.

Section 19. Health and Nutrition. The delivery of basic social services in health and
nutrition to children of indigenous cultural communities shall be given priority by all
government agencies concerned. Hospitals and other health institution shall ensure that
children of indigenous cultural communities are given equal attention. In the provision of
health and nutrition services to children of indigenous cultural communities, indigenous
health practices shall be respected and recognized.

Section 20. Discrimination. Children of indigenous cultural communities shall not be

subjected to any and all forms of discrimination.
Any person who discriminate against children of indigenous cultural communities shall
suffer a penalty of arresto mayor in its maximum period and a fine of not less than Five
thousand pesos (P5,000) more than Ten thousand pesos (P10,000).

Section 21. Participation. Indigenous cultural communities, through their duly-

designated or appointed representatives shall be involved in planning, decision-making
implementation, and evaluation of all government programs affecting children of indigenous
cultural communities. Indigenous institution shall also be recognized and respected.

Section 22. Children as Zones of Peace. Children are hereby declared as Zones of
Peace. It shall be the responsibility of the State and all other sectors concerned to resolve
armed conflicts in order to promote the goal of children as zones of peace. To attain this
objective, the following policies shall be observed.

(a) Children shall not be the object of attack and shall be entitled to special respect. They
shall be protected from any form of threat, assault, torture or other cruel, inhumane or
degrading treatment;

(b) Children shall not be recruited to become members of the Armed Forces of the
Philippines of its civilian units or other armed groups, nor be allowed to take part in the
fighting, or used as guides, couriers, or spies;

(c) Delivery of basic social services such as education, primary health and emergency relief
services shall be kept unhampered;

227
(d) The safety and protection of those who provide services including those involved in fact-
finding missions from both government and non-government institutions shall be ensured.
They shall not be subjected to undue harassment in the performance of their work;

(e) Public infrastructure such as schools, hospitals and rural health units shall not be utilized
for military purposes such as command posts, barracks, detachments, and supply depots;
and

(f) All appropriate steps shall be taken to facilitate the reunion of families temporarily
separated due to armed conflict.

Section 23. Evacuation of Children During Armed Conflict. Children shall be given
priority during evacuation as a result of armed conflict. Existing community organizations
shall be tapped to look after the safety and well-being of children during evacuation
operations. Measures shall be taken to ensure that children evacuated are accompanied by
persons responsible for their safety and well-being.

Section 24. Family Life and Temporary Shelter. Whenever possible, members of the
same family shall be housed in the same premises and given separate accommodation from
other evacuees and provided with facilities to lead a normal family life. In places of
temporary shelter, expectant and nursing mothers and children shall be given additional food
in proportion to their physiological needs. Whenever feasible, children shall be given
opportunities for physical exercise, sports and outdoor games.

Section 25. Rights of Children Arrested for Reasons Related to Armed Conflict. Any
child who has been arrested for reasons related to armed conflict, either as combatant,
courier, guide or spy is entitled to the following rights;

(a) Separate detention from adults except where families are accommodated as family units;

(b) Immediate free legal assistance;

(c) Immediate notice of such arrest to the parents or guardians of the child; and

(d) Release of the child on recognizance within twenty-four (24) hours to the custody of the
Department of Social Welfare and Development or any responsible member of the
community as determined by the court.

If after hearing the evidence in the proper proceedings the court should find that the
aforesaid child committed the acts charged against him, the court shall determine the
imposable penalty, including any civil liability chargeable against him. However, instead of
pronouncing judgment of conviction, the court shall suspend all further proceedings and
shall commit such child to the custody or care of the Department of Social Welfare and
Development or to any training institution operated by the Government, or duly-licensed
agencies or any other responsible person, until he has had reached eighteen (18) years of age
or, for a shorter period as the court may deem proper, after considering the reports and
recommendations of the Department of Social Welfare and Development or the agency or
responsible individual under whose care he has been committed.
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The aforesaid child shall subject to visitation and supervision by a representative of the
Department of Social Welfare and Development or any duly-licensed agency or such other
officer as the court may designate subject to such conditions as it may prescribe.

The aforesaid child whose sentence is suspended can appeal from the order of the court in
the same manner as appeals in criminal cases.

Section 26. Monitoring and Reporting of Children in Situations of Armed Conflict.

The chairman of the barangay affected by the armed conflict shall submit the names of
children residing in said barangay to the municipal social welfare and development officer
within twenty-four (24) hours from the occurrence of the armed conflict.

Section 27. Who May File a Complaint. Complaints on cases of unlawful acts
committed against the children as enumerated herein may be filed by the following:

(a) Offended party;

(b) Parents or guardians;

(c) Ascendant or collateral relative within the third degree of consanguinity;1awphi1@ITC

(d) Officer, social worker or representative of a licensed child-caring institution;

(e) Officer or social worker of the Department of Social Welfare and Development;

(f) Barangay chairman; or

(g) At least three (3) concerned responsible citizens where the violation occurred.

Section 28. Protective Custody of the Child. The offended party shall be immediately
placed under the protective custody of the Department of Social Welfare and Development
pursuant to Executive Order No. 56, series of 1986. In the regular performance of this
function, the officer of the Department of Social Welfare and Development shall be free
from any administrative, civil or criminal liability. Custody proceedings shall be in
accordance with the provisions of Presidential Decree No. 603.
Section 29. Confidentiality. At the instance of the offended party, his name may be
withheld from the public until the court acquires jurisdiction over the case.
It shall be unlawful for any editor, publisher, and reporter or columnist in case of printed
materials, announcer or producer in case of television and radio broadcasting, producer and
director of the film in case of the movie industry, to cause undue and sensationalized
publicity of any case of violation of this Act which results in the moral degradation and
suffering of the offended party.Lawphi1@alf

Section 30. Special Court Proceedings. Cases involving violations of this Act shall be
heard in the chambers of the judge of the Regional Trial Court duly designated as Juvenile
and Domestic Court.

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Any provision of existing law to the contrary notwithstanding and with the exception of
habeas corpus, election cases, and cases involving detention prisoners and persons covered
by Republic Act No. 4908, all courts shall give preference to the hearing or disposition of
cases involving violations of this Act.

Section 31. Common Penal Provisions.

(a) The penalty provided under this Act shall be imposed in its maximum period if the
offender has been previously convicted under this Act;

(b) When the offender is a corporation, partnership or association, the officer or employee
thereof who is responsible for the violation of this Act shall suffer the penalty imposed in its
maximum period;

(c) The penalty provided herein shall be imposed in its maximum period when the
perpetrator is an ascendant, parent guardian, stepparent or collateral relative within the
second degree of consanguinity or affinity, or a manager or owner of an establishment which
has no license to operate or its license has expired or has been revoked;

(d) When the offender is a foreigner, he shall be deported immediately after service of
sentence and forever barred from entry to the country;

(e) The penalty provided for in this Act shall be imposed in its maximum period if the
offender is a public officer or employee: Provided, however, That if the penalty imposed is
reclusion perpetua or reclusion temporal, then the penalty of perpetual or temporary
absolute disqualification shall also be imposed: Provided, finally, That if the penalty imposed
is prision correccional or arresto mayor, the penalty of suspension shall also be imposed; and

(f) A fine to be determined by the court shall be imposed and administered as a cash fund by
the Department of Social Welfare and Development and disbursed for the rehabilitation of
each child victim, or any immediate member of his family if the latter is the perpetrator of
the offense.

Section 32. Rules and Regulations. Unless otherwise provided in this Act, the
Department of Justice, in coordination with the Department of Social Welfare and
Development, shall promulgate rules and regulations of the effective implementation of this
Act.
Such rules and regulations shall take effect upon their publication in two (2) national
newspapers of general circulation.

Section 33. Appropriations. The amount necessary to carry out the provisions of this Act
is hereby authorized to be appropriated in the General Appropriations Act of the year
following its enactment into law and thereafter.

Section 34. Separability Clause. If any provision of this Act is declared invalid or
unconstitutional, the remaining provisions not affected thereby shall continue in full force
and effect.

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Section 35. Repealing Clause. All laws, decrees, or rules inconsistent with the provisions
of this Acts are hereby repealed or modified accordingly.

Section 36. Effectivity Clause. This Act shall take effect upon completion of its
publication in at least two (2) national newspapers of general circulation.

Approved: June 17, 1992.

PRESIDENTIAL DECREE No. 957

REGULATING THE SALE OF SUBDIVISION LOTS AND CONDOMINIUMS,

PROVIDING PENALTIES FOR VIOLATIONS THEREOF

Section 1. Title. This Decree shall be known as THE SUBDIVISION AND

CONDOMINIUM BUYERS' PROTECTIVE DECREE.

Section 2. Definition of Terms When used in this Decree, the following terms shall, unless the
context otherwise indicates, have the following respective meanings:

(a) Person. "Person" shall mean a natural or a juridical person. A juridical person refers to a
business firm whether a corporation, partnership, cooperative or associations or a single
proprietorship.
(b) Sale or sell. "Sale" or "sell" shall include every disposition, or attempt to dispose, for a
valuable consideration, of a subdivision lot, including the building and other improvements
thereof, if any, in a subdivision project or a condominium unit in a condominium project.
"Sale" and "sell" shall also include a contract to sell, a contract of purchase and sale, an
exchange, an attempt to sell, an option of sale or purchase, a solicitation of a sale, or an offer
to sell, directly or by an agent, or by a circular, letter, advertisement or otherwise.
A privilege given to a member of a cooperative, corporation, partnership, or any association
and/or the issuance of a certificate or receipt evidencing or giving the right of participation
in, or right to, any land in consideration of payment of the membership fee or dues, shall be
deemed a sale within the meaning of this definition.

(c) Buy and purchase. The "buy" and "purchase" shall include any contract to buy, purchase,
or otherwise acquire for a valuable consideration a subdivision lot, including the building and
other improvements, if any, in a subdivision project or a condominium unit in a
condominium project.

(d) Subdivision project. "Subdivision project" shall mean a tract or a parcel of land registered
under Act No. 496 which is partitioned primarily for residential purposes into individual lots
with or without improvements thereon, and offered to the public for sale, in cash or in
installment terms. It shall include all residential, commercial, industrial and recreational areas
as well as open spaces and other community and public areas in the project.

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(e) Subdivision lot. "Subdivision lot" shall mean any of the lots, whether residential,
commercial, industrial, or recreational, in a subdivision project.

(f) Complex subdivision plan. "Complex subdivision plan" shall mean a subdivision plan of a
registered land wherein a street, passageway or open space is delineated on the plan.

(g) Condominium project. "Condominium project" shall mean the entire parcel of real
property divided or to be divided primarily for residential purposes into condominium units,
including all structures thereon.

(h) Condominium unit. "Condominium unit" shall mean a part of the condominium project
intended for any type of independent use or ownership, including one or more rooms or
spaces located in one or more floors (or part of parts of floors) in a building or buildings and
such accessories as may be appended thereto.

(i) Owner. "Owner" shall refer to the registered owner of the land subject of a subdivision or
a condominium project.

(j) Developer. "Developer" shall mean the person who develops or improves the subdivision
project or condominium project for and in behalf of the owner thereof.

(k) Dealer. "Dealer" shall mean any person directly engaged as principal in the business of
buying, selling or exchanging real estate whether on a full-time or part-time basis.

(l) Broker. "Broker" shall mean any person who, for commission or other compensation,
undertakes to sell or negotiate the sale of a real estate belonging to another.

(m) Salesman. "Salesman" shall refer to the person regularly employed by a broker to
perform, for and in his behalf, any or all functions of a real estate broker.
(n) Authority. "Authority" shall mean the National Housing Authority.

Section 3. National Housing Authority The National Housing Authority shall have exclusive
jurisdiction to regulate the real estate trade and business in accordance with the provisions of this Decree.

Section 4. Registration of Projects The registered owner of a parcel of land who wishes to convert the same
into a subdivision project shall submit his subdivision plan to the Authority which shall act upon and
approve the same, upon a finding that the plan complies with the Subdivision Standards' and Regulations
enforceable at the time the plan is submitted. The same procedure shall be followed in the case of a
plan for a condominium project except that, in addition, said Authority shall act upon and
approve the plan with respect to the building or buildings included in the condominium
project in accordance with the National Building Code (R.A. No. 6541). The subdivision
plan, as so approved, shall then be submitted to the Director of Lands for approval in
accordance with the procedure prescribed in Section 44 of the Land Registration Act (Act
No. 496, as amended by R.A. No. 440): Provided, that it case of complex subdivision plans,
court approval shall no longer be required. The condominium plan as likewise so approved,
shall be submitted to the Register of Deeds of the province or city in which the property lies
and the same shall be acted upon subject to the conditions and in accordance with the
procedure prescribed in Section 4 of the Condominium Act (R.A. No. 4726).
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The owner or the real estate dealer interested in the sale of lots or units, respectively, in such
subdivision project or condominium project shall register the project with the Authority by
filing therewith a sworn registration statement containing the following information:

(a) Name of the owner;

(b) The location of the owner's principal business office, and if the owner is a non-resident
Filipino, the name and address of his agent or representative in the Philippines is authorized
to receive notice;

(c) The names and addresses of all the directors and officers of the business firm, if the
owner be a corporation, association, trust, or other entity, and of all the partners, if it be a
partnership;

(d) The general character of the business actually transacted or to be transacted by the
owner; and

(e) A statement of the capitalization of the owner, including the authorized and outstanding
amounts of its capital stock and the proportion thereof which is paid-up.

The following documents shall be attached to the registration statement:

(a) A copy of the subdivision plan or condominium plan as approved in accordance with the
first and second paragraphs of this section.

(b) A copy of any circular, prospectus, brochure, advertisement, letter, or communication to

be used for the public offering of the subdivision lots or condominium units;

(c) In case of a business firm, a balance sheet showing the amount and general character of
its assets and liabilities and a copy of its articles of incorporation or articles of partnership or
association, as the case may be, with all the amendments thereof and existing by-laws or
instruments corresponding thereto.

(d) A title to the property which is free from all liens and encumbrances: Provided, however,
that in case any subdivision lot or condominium unit is mortgaged, it is sufficient if the
instrument of mortgage contains a stipulation that the mortgagee shall release the mortgage
on any subdivision lot or condominium unit as soon as the full purchase price for the same
is paid by the buyer.

The person filing the registration statement shall pay the registration fees prescribed therefor
by the Authority.

Thereupon, the Authority shall immediately cause to be published a notice of the filing of
the registration statement at the expense of the applicant-owner or dealer, in two newspapers
general circulation, one published in English and another in Pilipino, once a week for two
consecutive weeks, reciting that a registration statement for the sale of subdivision lots or
condominium units has been filed in the National Housing Authority; that the aforesaid
registration statement, as well as the papers attached thereto, are open to inspection during
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business hours by interested parties, under such regulations as the Authority may impose;
and that copies thereof shall be furnished to any party upon payment of the proper fees.
The subdivision project of the condominium project shall be deemed registered upon
completion of the above publication requirement. The fact of such registration shall be
evidenced by a registration certificate to be issued to the applicant-owner or dealer.

Section 5. License to sell. Such owner or dealer to whom has been issued a registration
certificate shall not, however, be authorized to sell any subdivision lot or condominium unit
in the registered project unless he shall have first obtained a license to sell the project within
two weeks from the registration of such project.
The Authority, upon proper application therefor, shall issue to such owner or dealer of a
registered project a license to sell the project if, after an examination of the registration
statement filed by said owner or dealer and all the pertinent documents attached thereto, he
is convinced that the owner or dealer is of good repute, that his business is financially stable,
and that the proposed sale of the subdivision lots or condominium units to the public would
not be fraudulent.

Section 6. Performance Bond. No license to sell subdivision lots or condominium units shall be
issued by the Authority under Section 5 of this Decree unless the owner or dealer shall have
filed an adequate performance bond approved by said Authority to guarantee the
construction and maintenance of the roads, gutters, drainage, sewerage, water system,
lighting systems, and full development of the subdivision project or the condominium
project and the compliance by the owner or dealer with the applicable laws and rules and
regulations.

The performance bond shall be executed in favor of the Republic of the Philippines and
shall authorize the Authority to use the proceeds thereof for the purposes of its undertaking
in case of forfeiture as provided in this Decree.

Section 7. Exempt transactions. A license to sell and performance bond shall not be required
in any of the following transactions:

(a) Sale of a subdivision lot resulting from the partition of land among co-owners and co-
heirs.

(b) Sale or transfer of a subdivision lot by the original purchaser thereof and any subsequent
sale of the same lot.

(c) Sale of a subdivision lot or a condominium unit by or for the account of a mortgagee in
the ordinary course of business when necessary to liquidate a bona fide debt.

Section 8. Suspension of license to sell. Upon verified complaint by a buyer of a subdivision lot
or a condominium unit in any interested party, the Authority may, in its discretion,
immediately suspend the owner's or dealer's license to sell pending investigation and hearing
of the case as provided in Section 13 hereof.

The Authority may motu proprio suspend the license to sell if, in its opinion, any
information in the registration statement filed by the owner or dealer is or has become
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misleading, incorrect, inadequate or incomplete or the sale or offering for a sale of the
subdivision or condominium project may work or tend to work a fraud upon prospective
buyers.

The suspension order may be lifted if, after notice and hearing, the Authority is convinced
that the registration statement is accurate or that any deficiency therein has been corrected or
supplemented or that the sale to the public of the subdivision or condominium project will
neither be fraudulent not result in fraud. It shall also be lifted upon dismissal of the
complaint for lack of legal basis.

Until the final entry of an order of suspension, the suspension of the right to sell the project,
though binding upon all persons notified thereof, shall be deemed confidential unless it shall
appear that the order of suspension has in the meantime been violated.

Section 9. Revocation of registration certificate and license to sell. The Authority may, motu proprio
or upon verified complaint filed by a buyer of a subdivision lot or condominium unit, revoke
the registration of any subdivision project or condominium project and the license to sell any
subdivision lot or condominium unit in said project by issuing an order to this effect, with
his findings in respect thereto, if upon examination into the affairs of the owner or dealer
during a hearing as provided for in Section 14 hereof, if shall appear there is satisfactory
evidence that the said owner or dealer:

(a) Is insolvent; or

(b) has violated any of the provisions of this Decree or any applicable rule or regulation of
the Authority, or any undertaking of his/its performance bond; or

(c) Has been or is engaged or is about to engage in fraudulent transactions; or

(d) Has made any misrepresentation in any prospectus, brochure, circular or other literature
about the subdivision project or condominium project that has been distributed to
prospective buyers; or

(e) Is of bad business repute; or

(f) Does not conduct his business in accordance with law or sound business principles.

Where the owner or dealer is a partnership or corporation or an unincorporated association,

it shall be sufficient cause for cancellation of its registration certificate and its license to sell,
if any member of such partnership or any officer or director of such corporation or
association has been guilty of any act or omission which would be cause for refusing or
revoking the registration of an individual dealer, broker or salesman as provided in Section
11 hereof.

Section 10. Registers of subdivision lots and condominium units. A record of subdivision lots and
condominium units shall be kept in the Authority wherein shall be entered all orders of the
Authority affecting the condition or status thereof. The registers of subdivision lots and

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condominium units shall be open to public inspection subject to such reasonable rules as the
Authority may prescribe.

Section 11. Registration of dealers, brokers and salesmen. No real estate dealer, broker or salesman
shall engage in the business of selling subdivision lots or condominium units unless he has
registered himself with the Authority in accordance with the provisions of this section.

If the Authority shall find that the applicant is of good repute and has complied with the
applicable rules of the Authority, including the payment of the prescribed fee, he shall
register such applicant as a dealer, broker or salesman upon filing a bond, or other security in
lieu thereof, in such sum as may be fixed by the Authority conditioned upon his faithful
compliance with the provisions of this Decree: Provided, that the registration of a salesman
shall cease upon the termination of his employment with a dealer or broker.

Every registration under this section shall expire on the thirty-first day of December of each
year. Renewal of registration for the succeeding year shall be granted upon written
application therefor made not less than thirty nor more than sixty days before the first day of
the ensuing year and upon payment of the prescribed fee, without the necessity of filing
further statements or information, unless specifically required by the Authority. All
applications filed beyond said period shall be treated as original applications.

The names and addresses of all persons registered as dealers, brokers, or salesmen shall be
recorded in a Register of Brokers, Dealers and Salesmen kept in the Authority which shall be
open to public inspection.

Section 12. Revocation of registration as dealers, brokers or salesmen. Registration under the
preceding section may be refused or any registration granted thereunder, revoked by the
Authority if, after reasonable notice and hearing, it shall determine that such applicant or
registrant:

1. Has violated any provision of this Decree or any rule or regulation made hereunder; or
2. Has made a material false statement in his application for registration; or
3. Has been guilty of a fraudulent act in connection with any sale of a subdivision lot or
condominium unit; or
4. Has demonstrated his unworthiness to transact the business of dealer, broker, or
salesman, as the case may be.

In case of charges against a salesman, notice thereof shall also be given the broker or dealer
employing such salesman.

Pending hearing of the case, the Authority shall have the power to order the suspension of
the dealer's, broker's, of salesman's registration; provided, that such order shall state the
cause for the suspension.

The suspension or revocation of the registration of a dealer or broker shall carry with it all
the suspension or revocation of the registrations of all his salesmen.

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Section 13. Hearing. In the hearing for determining the existence of any ground or grounds
for the suspension and/or revocation of registration certificate and license to sell as
provided in Section 8 and 9 hereof, the following shall be complied with:

(a) Notice. No such hearing shall proceed unless the respondent is furnished with a copy of
the complaint against him or is notified in writing of the purpose of such hearing.

(b) Venue. The hearing may be held before the officer or officers designated by the
Authority on the date and place specified in the notice.

(c) Nature of proceeding. The proceedings shall be non-litigious and summary in nature
without regard to legal technicalities obtaining in courts of law. The Rules of court shall not
apply in said hearing except by analogy or in a suppletory character and whenever practicable
and convenient.

(d) Power incidental to the hearing. For the purpose of the hearing or other proceeding
under this Decree, the officer or officers designated to hear the complaint shall have the
power to administer oaths, subpoena witnesses, conduct ocular inspections, take depositions,
and require the production of any book, paper, correspondence, memorandum, or other
record which are deemed relevant or material to the inquiry.

Section 14. Contempt.

(a) Direct contempt. The officer or officers designated by the Authority to hear the
complaint may summarily adjudge in direct contempt any person guilty of misbehavior in the
presence of or so near the said hearing officials as to obstruct or interrupt the proceedings
before the same or of refusal to be sworn or to answer as a witness or to subscribe an
affidavit or deposition when lawfully required to do so. The person found guilty of direct
contempt under this section shall be punished by a fine not exceeding Fifty (P50.00) Pesos
or imprisonment not exceeding five (5) days, or both.

(b) Indirect contempt. The officer or officers designated to hear the complaint may also
adjudge any person in indirect contempt on grounds and in the manner prescribed in Rule
71 of the Revised Rules of Court.

Section 15. Decision. The case shall be decided within thirty (30) days from the time the same
is submitted for decision. The Decision may order the revocation of the registration of the
subdivision or condominium project, the suspension, cancellation, or revocation of the
license to sell and/or forfeiture, in whole or in part, of the performance bond mentioned in
Section 6 hereof. In case forfeiture of the bond is ordered, the Decision may direct the
provincial or city engineer to undertake or cause the construction of roads and of other
requirements for the subdivision or condominium as stipulated in the bond, chargeable to
the amount forfeited. Such decision shall be immediately executory and shall become final
after the lapse of 15 days from the date of receipt of the Decision.

Section 16. Cease and Desist Order. Whenever it shall appear to the Authority that any person
is engaged or about to engage in any act or practice which constitutes or will constitute a
violation of the provisions of this Decree, or of any rule or regulation thereunder, it may,
237
upon due notice and hearing as provided in Section 13 hereof, issue a cease and desist order
to enjoin such act or practices.

Section 17. Registration. All contracts to sell, deeds of sale and other similar instruments
relative to the sale or conveyance of the subdivision lots and condominium units, whether or
not the purchase price is paid in full, shall be registered by the seller in the Office of the
Register of Deeds of the province or city where the property is situated.

Whenever a subdivision plan duly approved in accordance with Section 4 hereof, together
with the corresponding owner's duplicate certificate of title, is presented to the Register of
Deeds for registration, the Register of Deeds shall register the same in accordance with the
provisions of the Land Registration Act, as amended: Provided, however, that it there is a
street, passageway or required open space delineated on a complex subdivision plan
hereafter approved and as defined in this Decree, the Register of Deeds shall annotate on
the new certificate of title covering the street, passageway or open space, a memorandum to
the effect that except by way of donation in favor of a city or municipality, no portion of any
street, passageway, or open space so delineated on the plan shall be closed or otherwise
disposed of by the registered owner without the requisite approval as provided under Section
22 of this Decree.

Section 18. Mortgages. No mortgage on any unit or lot shall be made by the owner or
developer without prior written approval of the Authority. Such approval shall not be
granted unless it is shown that the proceeds of the mortgage loan shall be used for the
development of the condominium or subdivision project and effective measures have been
provided to ensure such utilization. The loan value of each lot or unit covered by the
mortgage shall be determined and the buyer thereof, if any, shall be notified before the
release of the loan. The buyer may, at his option, pay his installment for the lot or unit
directly to the mortgagee who shall apply the payments to the corresponding mortgage
indebtedness secured by the particular lot or unit being paid for, with a view to enabling said
buyer to obtain title over the lot or unit promptly after full payment thereto;

Section 19. Advertisements. Advertisements that may be made by the owner or developer
through newspaper, radio, television, leaflets, circulars or any other form about the
subdivision or the condominium or its operations or activities must reflect the real facts and
must be presented in such manner that will not tend to mislead or deceive the public.
The owner or developer shall answerable and liable for the facilities, improvements,
infrastructures or other forms of development represented or promised in brochures,
advertisements and other sales propaganda disseminated by the owner or developer or his
agents and the same shall form part of the sales warranties enforceable against said owner or
developer, jointly and severally. Failure to comply with these warranties shall also be
punishable in accordance with the penalties provided for in this Decree.

Section 20. Time of Completion. Every owner or developer shall construct and provide the
facilities, improvements, infrastructures and other forms of development, including water
supply and lighting facilities, which are offered and indicated in the approved subdivision or
condominium plans, brochures, prospectus, printed matters, letters or in any form of
advertisement, within one year from the date of the issuance of the license for the

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subdivision or condominium project or such other period of time as may be fixed by the
Authority.

Section 21. Sales Prior to Decree. In cases of subdivision lots or condominium units sold or
disposed of prior to the effectivity of this Decree, it shall be incumbent upon the owner or
developer of the subdivision or condominium project to complete compliance with his or its
obligations as provided in the preceding section within two years from the date of this
Decree unless otherwise extended by the Authority or unless an adequate performance bond
is filed in accordance with Section 6 hereof.

Failure of the owner or developer to comply with the obligations under this and the
preceding provisions shall constitute a violation punishable under Sections 38 and 39 of this
Decree.

Section 22. Alteration of Plans. No owner or developer shall change or alter the roads, open
spaces, infrastructures, facilities for public use and/or other form of subdivision
development as contained in the approved subdivision plan and/or represented in its
advertisements, without the permission of the Authority and the written conformity or
consent of the duly organized homeowners association, or in the absence of the latter, by the
majority of the lot buyers in the subdivision.

Section 23. Non-Forfeiture of Payments. No installment payment made by a buyer in a

subdivision or condominium project for the lot or unit he contracted to buy shall be
forfeited in favor of the owner or developer when the buyer, after due notice to the owner
or developer, desists from further payment due to the failure of the owner or developer to
develop the subdivision or condominium project according to the approved plans and within
the time limit for complying with the same. Such buyer may, at his option, be reimbursed the
total amount paid including amortization interests but excluding delinquency interests, with
interest thereon at the legal rate.

Section 24. Failure to pay installments. The rights of the buyer in the event of this failure to pay
the installments due for reasons other than the failure of the owner or developer to develop
the project shall be governed by Republic Act No. 6552.
Where the transaction or contract was entered into prior to the effectivity of Republic Act
No. 6552 on August 26, 1972, the defaulting buyer shall be entitled to the corresponding
refund based on the installments paid after the effectivity of the law in the absence of any
provision in the contract to the contrary.

Section 25. Issuance of Title. The owner or developer shall deliver the title of the lot or unit to
the buyer upon full payment of the lot or unit. No fee, except those required for the
registration of the deed of sale in the Registry of Deeds, shall be collected for the issuance of
such title. In the event a mortgage over the lot or unit is outstanding at the time of the
issuance of the title to the buyer, the owner or developer shall redeem the mortgage or the
corresponding portion thereof within six months from such issuance in order that the title
over any fully paid lot or unit may be secured and delivered to the buyer in accordance
herewith.

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Section 26. Realty Tax. Real estate tax and assessment on a lot or unit shall de paid by the
owner or developer without recourse to the buyer for as long as the title has not passed the
buyer; Provided, however, that if the buyer has actually taken possession of and occupied the
lot or unit, he shall be liable to the owner or developer for such tax and assessment effective
the year following such taking of possession and occupancy.

Section 27. Other Charges. No owner or developer shall levy upon any lot or buyer a fee for
an alleged community benefit. Fees to finance services for common comfort, security and
sanitation may be collected only by a properly organized homeowners association and only
with the consent of a majority of the lot or unit buyers actually residing in the subdivision or
condominium project.

Section 28. Access to Public Offices in the Subdivisions. No owner or developer shall deny any
person free access to any government office or public establishment located within the
subdivision or which may be reached only by passing through the subdivision.

Section 29. Right of Way to Public Road. The owner or developer of a subdivision without
access to any existing public road or street must secure a right of way to a public road or
street and such right of way must be developed and maintained according to the requirement
of the government and authorities concerned.

Section 30. Organization of Homeowners Association. The owner or developer of a subdivision

project or condominium project shall initiate the organization of a homeowners association
among the buyers and residents of the projects for the purpose of promoting and protecting
their mutual interest and assist in their community development.

Section 31. Donations of roads and open spaces to local government. The registered owner or
developer of the subdivision or condominium project, upon completion of the development
of said project may, at his option, convey by way of donation the roads and open spaces
found within the project to the city or municipality wherein the project is located. Upon
acceptance of the donation by the city or municipality concerned, no portion of the area
donated shall thereafter be converted to any other purpose or purposes unless after hearing,
the proposed conversion is approved by the Authority.

Section 32. Phases of Subdivision. For purposes of complying with the provisions of this
Decree, the owner or developer may divide the development and sale of the subdivision into
phases, each phase to cover not less than ten hectares. The requirement imposed by this
Decree on the subdivision as a whole shall be deemed imposed on each phase.

Section 33. Nullity of waivers. Any condition, stipulation, or provision in contract of sale
whereby any person waives compliance with any provision of this Decree or of any rule or
regulation issued thereunder shall be void.

Section 34. Visitorial powers. This Authority, through its duly authorized representative may,
at any time, make an examination into the business affairs, administration, and condition of
any person, corporation, partnership, cooperative, or association engaged in the business of
selling subdivision lots and condominium units. For this purpose, the official authorized so
to do shall have the authority to examine under oath the directors, officers, stockholders or
240
members of any corporation, partnership, association, cooperative or other persons
associated or connected with the business and to issue subpoena or subpoena duces tecum
in relation to any investigation that may arise therefrom.

The Authority may also authorize the Provincial, City or Municipal Engineer, as the case
may be, to conduct an ocular inspection of the project to determine whether the
development of said project conforms to the standards and specifications prescribed by the
government.

The books, papers, letters, and other documents belonging to the person or entities herein
mentioned shall be open to inspection by the Authority or its duly authorized representative.

Section 35. Take-over Development. The Authority, may take over or cause the development
and completion of the subdivision or condominium project at the expenses of the owner or
developer, jointly and severally, in cases where the owner or developer has refused or failed
to develop or complete the development of the project as provided for in this Decree.

The Authority may, after such take-over, demand, collect and receive from the buyers the
installment payments due on the lots, which shall be utilized for the development of the
subdivision.

Section 36. Rules and Regulations. The Authority shall issue the necessary standards, rules and
regulations for the effective implementation of the provisions of this Decree. Such
standards, rules and regulations shall take effect immediately after their publication three
times a week for two consecutive weeks in any newspaper of general circulation.

Section 37. Deputization of law enforcement agencies. The Authority may deputize the Philippine
Constabulary or any law enforcement agency in the execution of its final orders, rulings or
decisions.

Section 38. Administrative Fines. The Authority may prescribe and impose fines not exceeding
ten thousand pesos for violations of the provisions of this Decree or of any rule or
regulation thereunder. Fines shall be payable to the Authority and enforceable through writs
of execution in accordance with the provisions of the Rules of Court.

Section 39. Penalties. Any person who shall violate any of the provisions of this Decree
and/or any rule or regulation that may be issued pursuant to this Decree shall, upon
conviction, be punished by a fine of not more than twenty thousand (P20,000.00) pesos
and/or imprisonment of not more than ten years: Provided, That in the case of
corporations, partnership, cooperatives, or associations, the President, Manager or
Administrator or the person who has charge of the administration of the business shall be
criminally responsible for any violation of this Decree and/or the rules and regulations
promulgated pursuant thereto.

Section 40. Liability of controlling persons. Every person who directly or indirectly controls any
person liable under any provision of this Decree or of any rule or regulation issued
thereunder shall be liable jointly and severally with and to the same extent as such controlled

241
person unless the controlling person acted in good faith and did not directly or indirectly
induce the act or acts constituting the violation or cause of action.

Section 41. Other remedies. The rights and remedies provided in this Decree shall be in
addition to any and all other rights and remedies that may be available under existing laws.

Section 42. Repealing clause. All laws, executive orders, rules and regulations or part thereof
inconsistent with the provisions of this Decree are hereby repealed or modified accordingly.

Section 43. Effectivity. This Decree shall take effect upon its approval.

Done in the City of Manila, this 12th day of July, in the year of Our Lord, nineteen hundred
and seventy-six.

REPUBLIC ACT NO. 4726

AN ACT TO DEFINE CONDOMINIUM, ESTABLISH REQUIREMENTS FOR

ITS CREATION, AND GOVERN ITS INCIDENTS.

Sec. 1. The short title of this Act shall be "The Condominium Act".

Sec. 2. A condominium is an interest in real property consisting of 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, a separate interest in other portions of
such real property. Title to the common areas, including the land, or the appurtenant
interests in such areas, may be held by a corporation specially formed for the purpose
(hereinafter known as the "condominium corporation") in which the holders of separate
interest shall automatically be members or shareholders, to the exclusion of others, in
proportion to the appurtenant interest of their respective units in the common areas.

The real right in condominium may be ownership or any other interest in real property
recognized by law, on property in the Civil Code and other pertinent laws.

Sec. 3. As used in this Act, unless the context otherwise requires:

(a) "Condominium" means a condominium as defined in the next preceding section.

(b) "Unit" means a part of the condominium project intended for any type of independent
use or ownership, including one or more rooms or spaces located in one or more floors (or
part or parts of floors) in a building or buildings and such accessories as may be appended
thereto.

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(c) "Project" means the entire parcel of real property divided or to be divided in
condominiums, including all structures thereon,

(d) "Common areas" means the entire project excepting all units separately granted or held
or reserved.

(e) "To divide" real property means to divide the ownership thereof or other interest therein
by conveying one or more condominiums therein but less than the whole thereof.

Sec. 4. The provisions of this Act shall apply to property divided or to be divided into
condominiums only if there shall be recorded in the Register of Deeds of the province or
city in which the property lies and duly annotated in the corresponding certificate of title of
the land, if the latter had been patented or registered under either the Land Registration or
Cadastral Acts, an enabling or master deed which shall contain, among others, the following:

(a) Description of the land on which the building or buildings and improvements are or are
to be located;

(b) Description of the building or buildings, stating the number of stories and basements, the
number of units and their accessories, if any;

(c) Description of the common areas and facilities;

(d) A statement of the exact nature of the interest acquired or to be acquired by the
purchaser in the separate units and in the common areas of the condominium project.
Where title to or the appurtenant interests in the common areas is or is to be held by a
condominium corporation, a statement to this effect shall be included;

(e) Statement of the purposes for which the building or buildings and each of the units are
intended or restricted as to use;

(f) A certificate of the registered owner of the property, if he is other than those executing
the master deed, as well as of all registered holders of any lien or encumbrance on the
property, that they consent to the registration of the deed;

(g) The following plans shall be appended to the deed as integral parts thereof:

(1) A survey plan of the land included in the project, unless a survey plan of the same
property had previously bee filed in said office;

(2) A diagrammatic floor plan of the building or buildings in the project, in sufficient
detail to identify each unit, its relative location and approximate dimensions;

(h) Any reasonable restriction not contrary to law, morals or public policy regarding the right
of any condominium owner to alienate or dispose of his condominium.

The enabling or master deed may be amended or revoked upon registration of an instrument
executed by the registered owner or owners of the property and consented to by all
243
registered holders of any lien or encumbrance on the land or building or portion thereof.
The term "registered owner" shall include the registered owners of condominiums in the
project. Until registration of a revocation, the provisions of this Act shall continue to apply
to such property.

Sec. 5. Any transfer or conveyance of a unit or an apartment, office or store or other space
therein, shall include the transfer or conveyance of the undivided interests in the common
areas or, in a proper case, the membership or shareholdings in the condominium
corporation: Provided, however, That where the common areas in the condominium project are
owned by the owners of separate units as co-owners thereof, no condominium unit therein
shall be conveyed or transferred to persons other than Filipino citizens, or corporations at
least sixty percent of the capital stock of which belong to Filipino citizens, except in cases of
hereditary succession. Where the common areas in a condominium project are held by a
corporation, no transfer or conveyance of a unit shall be valid if the concomitant transfer of
the appurtenant membership or stockholding in the corporation will cause the alien interest
in such corporation to exceed the limits imposed by existing laws.

Sec. 6. Unless otherwise expressly provided in the enabling or master deed or the declaration
of restrictions, the incidents of a condominium grant are as follows:

(a) The boundary of the unit granted are the interior surfaces of the perimeter walls, floors,
ceilings, windows and doors thereof. The following are not part of the unit bearing walls,
columns, floors, roofs, foundations and other common structural elements of the building;
lobbies, stairways, hallways, and other areas of common use, elevator equipment and shafts,
central heating, central refrigeration and central air-conditioning equipment, reservoirs,
tanks, pumps and other central services and facilities, pipes, ducts, flues, chutes, conduits,
wires and other utility installations, wherever located, except the outlets thereof when
located within the unit.

(b) There shall pass with the unit, as an appurtenance thereof, an exclusive easement for the
use of the air space encompassed by the boundaries of the unit as it exists at any particular
time and as the unit may lawfully be altered or reconstructed from time to time. Such
easement shall be automatically terminated in any air space upon destruction of the unit as to
render it untenantable.

(c) Unless otherwise, provided, the common areas are held in common by the holders of
units, in equal shares, one for each unit.

(d) A non-exclusive easement for ingress, egress and support through the common areas is
appurtenant to each unit and the common areas are subject to such easements.

(e) Each condominium owner shall have the exclusive right to paint, repaint, tile, wax, paper
or otherwise refinish and decorate the inner surfaces of the walls, ceilings, floors, windows
and doors bounding his own unit.

(f) Each condominium owner shall have the exclusive right to mortgage, pledge or encumber
his condominium and to have the same appraised independently of the other condominiums
but any obligation incurred by such condominium owner is personal to him.
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(g) Each condominium owner has also the absolute right to sell or dispose of his
condominium unless the master deed contains a requirement that the property be first
offered to the condominium owners within a reasonable period of time before the same is
offered to outside parties;

Sec. 7. Except as provided in the following section, the common areas shall remain
undivided, and there shall be no judicial partition thereof.

Sec. 8. Where several persons own condominiums in a condominium project, an action may
be brought by one or more such persons for partition thereof by sale of the entire project, as
if the owners of all of the condominiums in such project were co-owners of the entire
project in the same proportion as their interests in the common areas:Provided, however, That a
partition shall be made only upon a showing:

(a) That three years after damage or destruction to the project which renders material part
thereof unit for its use prior thereto, the project has not been rebuilt or repaired substantially
to its state prior to its damage or destruction, or

(b) That damage or destruction to the project has rendered one-half or more of the units
therein untenantable and that condominium owners holding in aggregate more than thirty
percent interest in the common areas are opposed to repair or restoration of the project; or

(c) That the project has been in existence in excess of fifty years, that it is obsolete and
uneconomic, and that condominium owners holding in aggregate more than fifty percent
interest in the common areas are opposed to repair or restoration or remodeling or
modernizing of the project; or

(d) That the project or a material part thereof has been condemned or expropriated and that
the project is no longer viable, or that the condominium owners holding in aggregate more
than seventy percent interest in the common areas are opposed to continuation of the
condominium regime after expropriation or condemnation of a material portion thereof; or

(e) That the conditions for such partition by sale set forth in the declaration of restrictions,
duly registered in accordance with the terms of this Act, have been met.

Sec. 9. The owner of a project shall, prior to the conveyance of any condominium therein,
register a declaration of restrictions relating to such project, which restrictions shall
constitute a lien upon each condominium in the project, and shall insure to and bind all
condominium owners in the project. Such liens, unless otherwise provided, may be enforced
by any condominium owner in the project or by the management body of such project. The
Register of Deeds shall enter and annotate the declaration of restrictions upon the certificate
of title covering the land included within the project, if the land is patented or registered
under the Land Registration or Cadastral Acts.

The declaration of restrictions shall provide for the management of the project by anyone of
the following management bodies: a condominium corporation, an association of the
condominium owners, a board of governors elected by condominium owners, or a
management agent elected by the owners or by the board named in the declaration. It shall
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also provide for voting majorities quorums, notices, meeting date, and other rules governing
such body or bodies.

Such declaration of restrictions, among other things, may also provide:

(a) As to any such management body;

(1) For the powers thereof, including power to enforce the provisions of the
declarations of restrictions;

(2) For maintenance of insurance policies, insuring condominium owners against loss
by fire, casualty, liability, workmen's compensation and other insurable risks, and for
bonding of the members of any management body;

(3) Provisions for maintenance, utility, gardening and other services benefiting the
common areas, for the employment of personnel necessary for the operation of the building,
and legal, accounting and other professional and technical services;

(4) For purchase of materials, supplies and the like needed by the common areas;

(5) For payment of taxes and special assessments which would be a lien upon the
entire project or common areas, and for discharge of any lien or encumbrance levied against
the entire project or the common areas;

(6) For reconstruction of any portion or portions of any damage to or destruction of

the project;

(7) The manner for delegation of its powers;

(8) For entry by its officers and agents into any unit when necessary in connection
with the maintenance or construction for which such body is responsible;

(9) For a power of attorney to the management body to sell the entire project for the
benefit of all of the owners thereof when partition of the project may be authorized under
Section 8 of this Act, which said power shall be binding upon all of the condominium
owners regardless of whether they assume the obligations of the restrictions or not.

(b) The manner and procedure for amending such restrictions: Provided, That the vote of not
less than a majority in interest of the owners is obtained.

(c) For independent audit of the accounts of the management body;

(d) For reasonable assessments to meet authorized expenditures, each condominium unit to
be assessed separately for its share of such expenses in proportion (unless otherwise
provided) to its owners fractional interest in any common areas;

(e) For the subordination of the liens securing such assessments to other liens either
generally or specifically described;
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(f) For conditions, other than those provided for in Sections eight and thirteen of this Act,
upon which partition of the project and dissolution of the condominium corporation may be
made. Such right to partition or dissolution may be conditioned upon failure of the
condominium owners to rebuild within a certain period or upon specified inadequacy of
insurance proceeds, or upon specified percentage of damage to the building, or upon a
decision of an arbitrator, or upon any other reasonable condition.

Sec. 10. Whenever the common areas in a condominium project are held by a condominium
corporation, such corporation shall constitute the management body of the project. The
corporate purposes of such a corporation shall be limited to the holding of the common
areas, either in ownership or any other interest in real property recognized by law, to the
management of the project, and to such other purposes as may be necessary, incidental or
convenient to the accomplishment of said purposes. The articles of incorporation or by-laws
of the corporation shall not contain any provision contrary to or inconsistent with the
provisions of this Act, the enabling or master deed, or the declaration of restrictions of the
project. Membership in a condominium corporation, regardless of whether it is a stock or
non-stock corporation, shall not be transferable separately from the condominium unit of
which it is an appurtenance. When a member or stockholder ceases to own a unit in the
project in which the condominium corporation owns or holds the common areas, he shall
automatically cease to be a member or stockholder of the condominium corporation.

Sec. 11. The term of a condominium corporation shall be co-terminus with the duration of
the condominium project, the provisions of the Corporation Law to the contrary
notwithstanding.

Sec. 12. In case of involuntary dissolution of a condominium corporation for any of the
causes provided by law, the common areas owned or held by the corporation shall, by way
of liquidation, be transferred pro-indiviso and in proportion to their interest in the
corporation to the members or stockholders thereof, subject to the superior rights of the
corporation creditors. Such transfer or conveyance shall be deemed to be a full liquidation of
the interest of such members or stockholders in the corporation. After such transfer or
conveyance, the provisions of this Act governing undivided co-ownership of, or undivided
interest in, the common areas in condominium projects shall fully apply.
Sec. 13. Until the enabling or the master deed of the project in which the condominium
corporation owns or holds the common area is revoked, the corporation shall not be
voluntarily dissolved through an action for dissolution under Rule 104 of the Rules of Court
except upon a showing:

(a) That three years after damage or destruction to the project in which the corporation
owns or holds the common areas, which damage or destruction renders a material part
thereof unfit for its use prior thereto, the project has not been rebuilt or repaired
substantially to its state prior to its damage or destruction; or

(b) That damage or destruction to the project has rendered one-half or more of the units
therein untenantable and that more than thirty percent of the members of the corporation, if
non-stock, or the shareholders representing more than thirty percent of the capital stock
entitled to vote, if a stock corporation, are opposed to the repair or reconstruction of the
project, or
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(c) That the project has been in existence in excess of fifty years, that it is obsolete and
uneconomical, and that more than fifty percent of the members of the corporation, if non-
stock, or the stockholders representing more than fifty percent of the capital stock entitled
to vote, if a stock corporation, are opposed to the repair or restoration or remodeling or
modernizing of the project; or

(d) That the project or a material part thereof has been condemned or expropriated and that
the project is no longer viable, or that the members holding in aggregate more than seventy
percent interest in the corporation, if non-stock, or the stockholders representing more than
seventy percent of the capital stock entitled to vote, if a stock corporation, are opposed to
the continuation of the condominium regime after expropriation or condemnation of a
material portion thereof; or

(e) That the conditions for such a dissolution set forth in the declaration of restrictions of
the project in which the corporation owns of holds the common areas, have been met.

Sec. 14. The condominium corporation may also be dissolved by the affirmative vote of all
the stockholders or members thereof at a general or special meeting duly called for the
purpose: Provided, That all the requirements of Section sixty-two of the Corporation Law are
complied with.

Sec. 15. Unless otherwise provided for in the declaration of restrictions upon voluntary
dissolution of a condominium corporation in accordance with the provisions of Sections
thirteen and fourteen of this Act, the corporation shall be deemed to hold a power of
attorney from all the members or stockholders to sell and dispose of their separate interests
in the project and liquidation of the corporation shall be effected by a sale of the entire
project as if the corporation owned the whole thereof, subject to the rights of the corporate
and of individual condominium creditors.

Sec. 16. A condominium corporation shall not, during its existence, sell, exchange, lease or
otherwise dispose of the common areas owned or held by it in the condominium project
unless authorized by the affirmative vote of all the stockholders or members.

Sec. 17. Any provision of the Corporation Law to the contrary notwithstanding, the by-laws
of a condominium corporation shall provide that a stockholder or member shall not be
entitled to demand payment of his shares or interest in those cases where such right is
granted under the Corporation Law unless he consents to sell his separate interest in the
project to the corporation or to any purchaser of the corporation's choice who shall also buy
from the corporation the dissenting member or stockholder's interest. In case of
disagreement as to price, the procedure set forth in the appropriate provision of the
Corporation Law for valuation of shares shall be followed. The corporation shall have two
years within which to pay for the shares or furnish a purchaser of its choice from the time of
award. All expenses incurred in the liquidation of the interest of the dissenting member or
stockholder shall be borne by him.

Sec. 18. Upon registration of an instrument conveying a condominium, the Register of

Deeds shall, upon payment of the proper fees, enter and annotate the conveyance on the
certificate of title covering the land included within the project and the transferee shall be
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entitled to the issuance of a "condominium owner's" copy of the pertinent portion of such
certificate of title. Said "condominium owner's" copy need not reproduce the ownership
status or series of transactions in force or annotated with respect to other condominiums in
the project. A copy of the description of the land, a brief description of the condominium
conveyed, name and personal circumstances of the condominium owner would be sufficient
for purposes of the "condominium owner's" copy of the certificate of title. No conveyance
of condominiums or part thereof, subsequent to the original conveyance thereof from the
owner of the project, shall be registered unless accompanied by a certificate of the
management body of the project that such conveyance is in accordance with the provisions
of the declaration of restrictions of such project.

In cases of condominium projects registered under the provisions of the Spanish Mortgage
Law or Act 3344, as amended, the registration of the deed of conveyance of a condominium
shall be sufficient if the Register of Deeds shall keep the original or signed copy thereof,
together with the certificate of the management body of the project, and return a copy of the
deed of conveyance to the condominium owner duly acknowledge and stamped by the
Register of Deeds in the same manner as in the case of registration of conveyances of real
property under said laws.

Sec. 19. Where the enabling or master deed provides that the land included within a
condominium project are to be owned in common by the condominium owners therein, the
Register of Deeds may, at the request of all the condominium owners and upon surrender of
all their "condominium owner's" copies, cancel the certificates of title of the property and
issue a new one in the name of said condominium owners as pro-indiviso co-owners thereof.

Sec. 20. An assessment upon any condominium made in accordance with a duly registered
declaration of restrictions shall be an obligation of the owner thereof at the time the
assessment is made. The amount of any such assessment plus any other charges thereon,
such as interest, costs (including attorney's fees) and penalties, as such may be provided for
in the declaration of restrictions, shall be and become a lien upon the condominium assessed
when the management body causes a notice of assessment to be registered with the Register
of Deeds of the city or province where such condominium project is located. The notice
shall state the amount of such assessment and such other charges thereon a may be
authorized by the declaration of restrictions, a description of the condominium, unit against
which same has been assessed, and the name of the registered owner thereof. Such notice
shall be signed by an authorized representative of the management body or as otherwise
provided in the declaration of restrictions. Upon payment of said assessment and charges or
other satisfaction thereof, the management body shall cause to be registered a release of the
lien.

Such lien shall be superior to all other liens registered subsequent to the registration of said
notice of assessment except real property tax liens and except that the declaration of
restrictions may provide for the subordination thereof to any other liens and encumbrances.
Such liens may be enforced in the same manner provided for by law for the judicial or extra-
judicial foreclosure of mortgages of real property. Unless otherwise provided for in the
declaration of restrictions, the management body shall have power to bid at foreclosure sale.
The condominium owner shall have the same right of redemption as in cases of judicial or
extra-judicial foreclosure of mortgages.
249
Sec. 21. No labor performed or services or materials furnished with the consent of or at the
request of a condominium owner or his agent or his contractor or subcontractor, shall be the
basis of a lien against the condominium of any other condominium owner, unless such other
owners have expressly consented to or requested the performance of such labor or
furnishing of such materials or services. Such express consent shall be deemed to have been
given by the owner of any condominium in the case of emergency repairs of his
condominium unit. Labor performed or services or materials furnished for the common
areas, if duly authorized by the management body provided for in a declaration of
restrictions governing the property, shall be deemed to be performed or furnished with the
express consent of each condominium owner. The owner of any condominium may remove
his condominium from a lien against two or more condominiums or any part thereof by
payment to the holder of the lien of the fraction of the total sum secured by such lien which
is attributable to his condominium unit.

Sec. 22. Unless otherwise provided for by the declaration of restrictions, the management
body, provided for herein, may acquire and hold, for the benefit of the condominium
owners, tangible and intangible personal property and may dispose of the same by sale or
otherwise; and the beneficial interest in such personal property shall be owned by the
condominium owners in the same proportion as their respective interests in the common
areas. A transfer of a condominium shall transfer to the transferee ownership of the
transferor's beneficial interest in such personal property.

Sec. 23. Where, in an action for partition of a condominium project or for the dissolution of
condominium corporation on the ground that the project or a material part thereof has been
condemned or expropriated, the Court finds that the conditions provided for in this Act or
in the declaration of restrictions have not been met, the Court may decree a reorganization
of the project, declaring which portion or portions of the project shall continue as a
condominium project, the owners thereof, and the respective rights of said remaining
owners and the just compensation, if any, that a condominium owner may be entitled to due
to deprivation of his property. Upon receipt of a copy of the decree, the Register of Deeds
shall enter and annotate the same on the pertinent certificate of title.

Sec. 24. Any deed, declaration or plan for a condominium project shall be liberally construed
to facilitate the operation of the project, and its provisions shall be presumed to be
independent and severable.

Sec. 25. Whenever real property has been divided into condominiums, each condominium
separately owned shall be separately assessed, for purposes of real property taxation and
other tax purposes to the owners thereof and the tax on each such condominium shall
constitute a lien solely thereon.

Sec. 26. All Acts or parts of Acts in conflict or inconsistent with this Act are hereby
amended insofar as condominium and its incidents are concerned.
Sec. 27. This Act shall take effect upon its approval.

Approved: June 18, 1966

250
 ACT NO. 31351092

AN ACT TO REGULATE THE SALE OF PROPERTY UNDER SPECIAL

POWERS INSERTED IN OR ANNEXED TO REAL-ESTATE MORTGAGES

SECTION 1. When a sale is made under a special power inserted in or attached to any real-
estate mortgage hereafter made as security for the payment of money or the fulfillment of
any other obligation, the provisions of the following election shall govern as to the manner
in which the sale and redemption shall be effected, whether or not provision for the same is
made in the power.

SECTION 2. Said sale cannot be made legally outside of the province in which the
property sold is situated; and in case the place within said province in which the sale is to be
made is subject to stipulation, such sale shall be made in said place or in the municipal
building of the municipality in which the property or part thereof is situated.

SECTION 3. Notice shall be given by posting notices of the sale for not less than twenty
days in at least three public places of the municipality or city where the property is situated,
and if such property is worth more than four hundred pesos, such notice shall also be
published once a week for at least three consecutive weeks in a newspaper of general
circulation in the municipality or city.

SECTION 4. The sale shall be made at public auction, between the hours or nine in the
morning and four in the afternoon; and shall be under the direction of the sheriff of the
province, the justice or auxiliary justice of the peace of the municipality in which such sale
has to be made, or a notary public of said municipality, who shall be entitled to collect a fee
of five pesos each day of actual work performed, in addition to his expenses.

SECTION 5. At any sale, the creditor, trustee, or other persons authorized to act for the
creditor, may participate in the bidding and purchase under the same conditions as any other
bidder, unless the contrary has been expressly provided in the mortgage or trust deedunder
which the sale is made.

SECTION 6. In all cases in which an extrajudicial sale is made under the special power
herein before referred to, the debtor, his successors in interest or any judicial creditor or
judgment creditor of said debtor, or any person having a lien on the property subsequent to
the mortgage or deed of trust under which the property is sold, may redeem the same at any
time within the term of one year from and after the date of the sale; and such redemption
shall be governed by the provisions of sections four hundred and sixty-four to four hundred
and sixty-six, inclusive, of the Code of Civil Procedure, in so far as these are not inconsistent
with the provisions of this Act.

SECTION 7. In any sale made under the provisions of this Act, the purchaser may petition
the Court of First Instance of the province or place where the property or any part thereof is
situated, to give him possession thereof during the redemption period, furnishing bond in an
1092
as amended by R.A. 4118

251
amount equivalent to the use of the property for a period of twelve months, to indemnify
the debtor in case it be shown that the sale was made without violating the mortgage or
without complying with the requirements of this Act. Such petition shall be made under oath
and filed in form of an ex parte motion in the registration or cadastral proceedings if the
property is registered, or in special proceedings in the case of property registered under the
Mortgage Law or under section one hundred and ninety-four of the Administrative Code, or
of any other real property encumbered with a mortgage duly registered in the office of any
register of deeds in accordance with any existing law, and in each case the clerk of the court
shall, upon the filing of such petition, collect the fees specified in paragraph eleven of
section one hundred and fourteen of Act Numbered Four hundred and ninety-six, as
amended by Act Numbered Twenty-eight hundred and sixty-six, and the court shall, upon
approval of the bond, order that a writ of possession issue, addressed to the sheriff of the
province in which the property is situated, who shall execute said order immediately.

Section 8. The debtor may, in the proceedings in which possession was requested, but not
later than thirty days after the purchaser was given possession, petition that the sale be set
aside and the writ of possession cancelled, specifying the damages suffered by him, because
the mortgage was not violated or the sale was not made in accordance with the provisions
hereof, and the court shall take cognizance of this petition in accordance with the summary
procedure provided for in section one hundred and twelve of Act Numbered Four hundred
and ninety-six; and if it finds the complaint of the debtor justified, it shall dispose in his
favor of all or part of the bond furnished by the person who obtained possession. Either of
the parties may appeal from the order of the judge in accordance with section fourteen of
Act Numbered Four hundred and ninety-six; but the order of possession shall continue in
effect during the pendency of the appeal.

Section 9. When the property is redeemed after the purchaser has been given possession,
the redeemer shall be entitled to deduct from the price of redemption any rentals that said
purchaser may have collected in case the property or any part thereof was rented; if the
purchaser occupied the property as his own dwelling, it being town property, or used it
gainfully, it being rural property, the redeemer may deduct from the price the interest of one
per centum per month provided for in section four hundred and sixty-five of the Code of
Civil Procedure.

SECTION 10. This Act shall take effect on its approval.

Approved: March 6, 1924

_______________________________________________________________________

252
 ACT NO. 1508

AN ACT PROVIDING FOR THE MORTGAGING OF PERSONAL PROPERTY

AND FOR THE REGISTRATION OF THE MORTGAGES SO EXECUTED

Section 1. The short title of this Act shall be "The Chattel Mortgage Law."

Sec. 2. All personal property shall be subject to mortgage, agreeably to the provisions of this
Act, and a mortgage executed in pursuance thereof shall be termed chattel mortgage.

Sec. 3. Chattel mortgage defined. A chattel mortgage is a conditional sale of personal

property as security for the payment of a debt, or the performance of some other obligation
specified therein, the condition being that the sale shall be void upon the seller paying to the
purchaser a sum of money or doing some other act named. If the condition is performed
according to its terms the mortgage and sale immediately become void, and the mortgagee is
thereby divested of his title.

Sec. 4. Validity. A chattel mortgage shall not be valid against any person except the
mortgagor, his executors or administrators, unless the possession of the property is delivered
to and retained by the mortgagee or unless the mortgage is recorded in the office of the
register of deeds of the province in which the mortgagor resides at the time of making the
same, or, if he resides without the Philippine Islands, in the province in which the property is
situated: Provided, however, That if the property is situated in a different province from that
in which the mortgagor resides, the mortgage shall be recorded in the office of the register
of deeds of both the province in which the mortgagor resides and that in which the property
is situated, and for the purposes of this Act the city of Manila shall be deemed to be a
province.

Sec. 5. Form. A chattel mortgage shall be deemed to be sufficient when made

substantially in accordance with the following form, and shall be signed by the person or
persons executing the same, in the presence of two witnesses, who shall sign the mortgage as
witnesses to the execution thereof, and each mortgagor and mortgagee, or, in the absence of
the mortgagee, his agent or attorney, shall make and subscribe an affidavit in substance as
hereinafter set forth, which affidavit, signed by the parties to the mortgage as above stated,
and the certificate of the oath signed by the authority administering the same, shall be
appended to such mortgage and recorded therewith.

FORM OF CHATTEL MORTGAGE AND AFFIDAVIT.

"This mortgage made this ____ day of ______19____ by _______________, a resident of

the municipality of ______________, Province of ____________, Philippine Islands
mortgagor, to ____________, a resident of the municipality of ___________, Province of
______________, Philippine Islands, mortgagee, witnesseth:

"That the said mortgagor hereby conveys and mortgages to the said mortgagee all of the
following-described personal property situated in the municipality of ______________,
Province of ____________ and now in the possession of said mortgagor, to wit:

253
(Here insert specific description of the property mortgaged.)

"This mortgage is given as security for the payment to the said ______, mortgagee, of
promissory notes for the sum of ____________ pesos, with (or without, as the case may be)
interest thereon at the rate of ___________ per centum per annum, according to the terms
of __________, certain promissory notes, dated _________, and in the words and figures
following (here insert copy of the note or notes secured).

"(If the mortgage is given for the performance of some other obligation aside from the
payment of promissory notes, describe correctly but concisely the obligation to be
performed.)

"The conditions of this obligation are such that if the mortgagor, his heirs, executors, or
administrators shall well and truly perform the full obligation (or obligations) above stated
according to the terms thereof, then this obligation shall be null and void.

"Executed at the municipality of _________, in the Province of ________, this _____ day
of 19_____

____________________
(Signature of mortgagor.)

"In the presence of

"_________________
"_________________
(Two witnesses sign here.)

FORM OF OATH.

"We severally swear that the foregoing mortgage is made for the purpose of securing the
obligation specified in the conditions thereof, and for no other purpose, and that the same is
a just and valid obligation, and one not entered into for the purpose of fraud."

FORM OF CERTIFICATE OF OATH.

"At ___________, in the Province of _________, personally appeared ____________, the

parties who signed the foregoing affidavit and made oath to the truth thereof before me.

"_____________________________"
(Notary public, justice of the peace, 1 or other officer, as the case may be.)

Sec. 6. Corporations. When a corporation is a party to such mortgage the affidavit

required may be made and subscribed by a director, trustee, cashier, treasurer, or manager
thereof, or by a person authorized on the part of such corporation to make or to receive
such mortgage. When a partnership is a party to the mortgage the affidavit may be made and
subscribed by one member thereof.

254
Sec. 7. Descriptions of property. The description of the mortgaged property shall be such
as to enable the parties to the mortgage, or any other person, after reasonable inquiry and
investigation, to identify the same.

If the property mortgaged be large cattle," as defined by section one of Act Numbered
Eleven and forty-seven, 2 and the amendments thereof, the description of said property in
the mortgage shall contain the brands, class, sex, age, knots of radiated hair commonly
known as remolinos, or cowlicks, and other marks of ownership as described and set forth
in the certificate of ownership of said animal or animals, together with the number and place
of issue of such certificates of ownership.

If growing crops be mortgaged the mortgage may contain an agreement stipulating that the
mortgagor binds himself properly to tend, care for and protect the crop while growing, and
faithfully and without delay to harvest the same, and that in default of the performance of
such duties the mortgage may enter upon the premises, take all the necessary measures for
the protection of said crop, and retain possession thereof and sell the same, and from the
proceeds of such sale pay all expenses incurred in caring for, harvesting, and selling the crop
and the amount of the indebtedness or obligation secured by the mortgage, and the surplus
thereof, if any shall be paid to the mortgagor or those entitled to the same.

A chattel mortgage shall be deemed to cover only the property described therein and not like
or substituted property thereafter acquired by the mortgagor and placed in the same
depository as the property originally mortgaged, anything in the mortgage to the contrary
notwithstanding.

Sec. 8. Failure of mortgagee to discharge the mortgage. If the mortgagee, assign,

administrator, executor, or either of them, after performance of the condition before or after
the breach thereof, or after tender of the performance of the condition, at or after the time
fixed for the performance, does not within ten days after being requested thereto by any
person entitled to redeem, discharge the mortgage in the manner provided by law, the
person entitled to redeem may recover of the person whose duty it is to discharge the same
twenty pesos for his neglect and all damages occasioned thereby in an action in any court
having jurisdiction of the subject-matter thereof.

Sec. 9-12.1093

Sec. 13. When the condition of a chattel mortgage is broken, a mortgagor or person holding
a subsequent mortgage, or a subsequent attaching creditor may redeem the same by paying
or delivering to the mortgagee the amount due on such mortgage and the reasonable costs
and expenses incurred by such breach of condition before the sale thereof. An attaching
creditor who so redeems shall be subrogated to the rights of the mortgagee and entitled to
foreclose the mortgage in the same manner that the mortgagee could foreclose it by the
terms of this Act.

Sec. 14. Sale of property at public auction; Officer's return; Fees; Disposition of proceeds.
The mortgagee, his executor, administrator, or assign, may, after thirty days from the time
1093
repealed

255
of condition broken, cause the mortgaged property, or any part thereof, to be sold at public
auction by a public officer at a public place in the municipality where the mortgagor resides,
or where the property is situated, provided at least ten days' notice of the time, place, and
purpose of such sale has been posted at two or more public places in such municipality, and
the mortgagee, his executor, administrator, or assign, shall notify the mortgagor or person
holding under him and the persons holding subsequent mortgages of the time and place of
sale, either by notice in writing directed to him or left at his abode, if within the municipality,
or sent by mail if he does not reside in such municipality, at least ten days previous to the
sale.

The officer making the sale shall, within thirty days thereafter, make in writing a return of his
doings and file the same in the office of the register of deeds where the mortgage is
recorded, and the register of deeds shall record the same. The fees of the officer for selling
the property shall be the same as in the case of sale on execution as provided in Act
Numbered One hundred and ninety, 4 and the amendments thereto, and the fees of the
register of deeds for registering the officer's return shall be taxed as a part of the costs of
sale, which the officer shall pay to the register of deeds. The return shall particularly describe
the articles sold, and state the amount received for each article, and shall operate as a
discharge of the lien thereon created by the mortgage. The proceeds of such sale shall be
applied to the payment, first, of the costs and expenses of keeping and sale, and then to the
payment of the demand or obligation secured by such mortgage, and the residue shall be
paid to persons holding subsequent mortgages in their order, and the balance, after paying
the mortgages, shall be paid to the mortgagor or person holding under him on demand.

If the sale includes any "large cattle," a certificate of transfer as required by section sixteen of
Act Numbered Eleven hundred and forty-seven 5 shall be issued by the treasurer of the
municipality where the sale was held to the purchaser thereof.

Sec. 15.1094

1094
superseded by section 198 of the Administrative Code. The following is the present text of section 198
as amended by RA 2711, approved June 18, 1960.
"SECTION 198. Registration of chattel mortgages and fees collectible in connection therewith. Every
register of deeds shall keep a primary entry book and a registration book for the chattel mortgages; shall
certify on each mortgage filed for record, as well as on its duplicate, the date, hour, and minute when the
same was by him received; and shall record in such books any chattel mortgage, assignment, or discharge
thereof, and any other instruments relating to a recorded mortgage, and all such instruments shall be
presented to him in duplicate, the original to be filed and the duplicate to be returned to the person
concerned.
"The recording of a mortgage shall be effected by making an entry, which shall be given a correlative
number, setting forth the names of the mortgagee, and the mortgagor, the sum or obligation guaranteed,
date of the instrument, name of the notary before whom it was sworn to or acknowledged, and a note
that the property mortgaged, as well as the terms and conditions of the mortgage, is mentioned in detail
in the instrument filed, giving the proper file number thereof. The recording of other instruments relating
to a recorded mortgage shall be effected by way of annotations on the space provided therefor in the
registration book, after the same shall have been entered in the primary entry book.
"The register of deeds shall also certify the officer's return of sale upon any mortgage, making reference
upon the record of such officer's return to the volume and page of the record of the mortgage, and a
reference of such return on the record of the mortgage itself, and give a certified copy thereof, when

256
requested, upon payment of the lawful fees for such copy; and certify upon each mortgage officer's
return of sale or discharge of mortgage; and upon any other instrument relating to such a recorded
mortgage, both on the original and on the duplicate, the date, hour, and minute when the same is
received for record and record such certificate with the return itself and keep an alphabetical index of
mortgagors and mortgagees, which record and index shall be open to public inspection.
"Duly certified copies of such records and of filed instruments shall be receivable as evidence in any court.
"The register of deeds shall collect the following fees for services rendered by him under this section:
"(a) For entry or presentation of any document in the primary entry book, one peso. Supporting papers
presented together with the principal document need not be charged any entry or presentation fee
unless the party in interest desires that they be likewise entered.
"(b) For filing and recording each chattel mortgage, including the necessary certificates and affidavits, the
fees established in the following schedule shall be collected:
"1. When the amount of the mortgage does not exceed six thousand pesos, three pesos and fifty centavos
for the first five hundred pesos or fractional part thereof, and one peso and fifty centavos for each
additional five hundred pesos or fractional part thereof.
"2. When the amount of the mortgage is more than six thousand pesos but does not exceed thirty
thousand pesos, twenty-four pesos for the initial amount not exceeding eight thousand pesos, and four
pesos for each additional two thousand pesos or fractional part thereof.
"3. When the amount of the mortgage is more than thirty thousand pesos but does not exceed one
hundred thousand pesos, seventy-five pesos for the initial amount not exceeding thirty-five thousand
pesos, and seven pesos for each additional five thousand pesos or fractional part thereof.
"4. When the amount of the mortgage is more than one hundred thousand pesos but does not exceed
five hundred thousand pesos, one hundred and seventy-six pesos for the initial amount not exceeding one
hundred ten thousand pesos, and ten pesos for each additional ten thousand pesos or fractional part
thereof.
"5. When the amount of the mortgage is more than five hundred thousand pesos, five hundred eighty-
one pesos for the initial amount not exceeding five hundred twenty thousand pesos, and fifteen pesos for
each additional twenty thousand pesos or fractional part thereof: Provided, however, That registration of
the mortgage in the province where the property is situated shall be sufficient registration: And provided,
further, That if the mortgage is to be registered in more than one city or province, the register of deeds of
the city or province where the instrument is first presented for registration shall collect the full amount of
the fees due in accordance with the schedule prescribed above, and the register of deeds of the other city
or province where the same instrument is also to be registered shall collect only a sum equivalent to
twenty per centum of the amount of fees due and paid in the first city or province, but in no case shall the
fees payable in any registry be less than the minimum fixed in said schedule.
"(c) For recording each instrument of sale, conveyance, or transfer of the property which is subject of a
recorded mortgage, or of the assignment of mortgage credit, the fees established in the preceding
schedule shall be collected on the basis of ten per centum of the amount of the mortgage or unpaid
balance thereof: Provided, That the latter is stated in the instrument.
"(d) For recording each notice of attachment, including the necessary index and annotations, four pesos.
"(e) For recording each release of mortgage, including the necessary index and references, the fees
established in the schedule under paragraph (b) above shall be collected on the basis of five per centum
of the amount of the mortgage.
"(f) For recording each release of attachment, including the proper annotations, two pesos.
"(g) For recording each sheriff's return of sale, including the index and references, three pesos.
"(h) For recording a power of attorney, appointment of judicial guardian, administrator, or trustee, or any
other instrument in which a person is given power to act in behalf of another in connection with a
mortgage, three pesos.
"(i) For recording each instrument or order relating to a recorded mortgage, including the necessary index
and references, for which no specific fee is provided above, two pesos.

257
Sec. 16. This Act shall take effect on August first, nineteen hundred and six.

"(j) For certified copies of records, such fees as are allowed by law for copies kept by the register of deeds.

"(k) For issuing a certificate relative to, or showing the existence or non-existence of, an entry in the
registration book, or a document on file, for each such certificate containing not more than two hundred
words, three pesos; if it exceeds that number, an additional fee of fifty centavos shall be collected for
every one hundred words or fractional part thereof, in excess of the first two hundred words."

258