Civil Law Pre-Week 09

2009 PRE-WEEK REVIEW PREDICTIONS AND REMINDERS in CIVIL LAW By: Prof. Arturo M. de Castro (Ll.B., Ll.M.
, SJD)
Law Professor, Ateneo de Manila Law School, Lyceum of the Philippines & UE College of Law; Pre-Bar Reviewer, UP Law Center; Pre-week Reviewer on all subjects, Global Best Practice; Private Law Practitioner, De Castro and Cagampang Law Offices, 7th Floor, LTA Bldg., 118 Perea St., Legaspi Village, Makati City, Tel. No. (02) 892-1277 / Telefax No. (02) 816-2380, Email ad: arturo_de_castro@yahoo.com
1) A and B get married without a marriage license on the representation that they have been cohabiting as husband and wife for more than 5 years. a) If A and B have in fact cohabited for only 2 years instead of 5 years, what is the status of their marriage? Ans: Null and void. A marriage celebrated without the formal requisite of a marriage license and without the parties complying with requirement in Article 76, that they should have lived together as husband and wife for at least five years so as to be excepted from the requirement of a marriage license, is void. The falsity of the allegation in the sworn affidavit relating to the period of the parties cohabitation, which would have qualified their marriage as an exception to the requirement for 2 marriage license, cannot be a mere irregularity, for it refers to a quintessential fact that the law precisely required to be deposed and attested to by the parties under oath. (Rep. v. Jose Dayot, G.R. No. 175581; Dayot v. Dayot, G.R. No. 179474, March 28, 2008)
b) If A and B have indeed cohabited for 5 years, but during the first 3 years of their cohabitation, A was
incapacitated to marry, being a married man whose legal wife died only after the first three years of As cohabitation with B. Is the marriage of A and B without a marriage licensed valid? Explain. Ans: The marriage is valid. As long as there was cohabitation for 5 years, it does not matter that there was an impediment during the period of cohabitation, as long as there is no legal impediment at the time of the marriage.
2) May a petition for declaration of absolute nullity of a marriage be filed by a party other than the husband
or the wife? Ans: Yes, by an intestate compulsory heir to protect his successional rights, in a proceeding for the settlement of the estate of the deceased spouse, not in a proceeding for declaration of nullity of the marriage. The new rule took effect on March 15, 2003 and has prospective application. (Juan de dios Carlos vs. Felicidad Sandoval, G.R. No. 179922, December 16, 2008)
3) May a family home be the subject of immediate partition by the heirs? Ans: No, except for compelling reasons. The family home is shielded from immediate partition under Article 159 of the Family Code, which imposes the proscription against the immediate partition of the family home regardless of its ownership. 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 thereof. This rule shall apply, regardless of whoever owns the property or constituted the family home (Arriola vs. Arriola, G.R. No. 177703, January 23, 2008) Even if the family home has passed by succession to the co-ownership of the heirs, or has been willed to any one of them, this fact alone dispels the protection cast upon it by the law. The rights of the individual co-owner of the family home cannot subjugate the rights granted under Article 159 to the beneficiaries of the family home. (Arriola vs. Arriola, G.R. No. 177703, January 23, 2008)
PRE-WEEK REVIEW PREDICTIONS AND REMINDERS in Civil Law By: Prof. Arturo M. de Castro(Ll.B., Ll.M., SJD)
4) Who is the best person to determne the gender or sex of a biologically or naturally intersex person? Ans: The person himself or herself, upon reaching the age of majority. To him belongs the human right to the pursuit of happiness and of health. He or she has the choice of the course of action to take along the path of his/her sexual development and maturation. ( Republic vs. Jennifer B. Cagandahan, G.R. No. 166676, September 12, 2008)
5) Is a lessee a builder in good faith? Ans: No, his right is governed by Art. 1678 of the Civil Code. The lessor has the option to keep the improvements introduced in good faith. The lessee may remove the improvements if the lessor refuses to make such reimbursement. (Sulo sa Nayon, Inc. vs. Nayong Filipino Foundation, G.R. No. 170923, January 20, 2009)
6) May a partition agreement based on an unprobated will be honored? Ans: No. Art. 838 of the Civil Code mandates that no will shall pass either real or personal property unless it is proved and allowed in accordance with the Rules of Court. As the will was not probated, the Partition Agreement which was executed pursuant thereto cannot be given effect. (Rodriguez vs. Rodriguez, G.R. No. 175720, September 11, 2007)
7) Is a will paged with A, B, C instead of 1, 2, 3 valid? Ans: Yes. It is sufficient safeguard against omission of some pages. (Samaniego-Celada vs. Abena, G.R. No. 145545, June 30, 2008)
8) Is a sale agreement stipulating that the seller retained ownership despite delivery until payment of the price a contract to sell or a conditional sale? Ans: A Memorandum of Agreement which provides an implicit agreement that the seller retained ownership regardless of whether or not there was delivery is a contract to sell. ( Vidad, Sr., et al. vs. Sps. Tayamen, G.R. No. 160554, August 24, 2007)
1) A & B, both Filipino got married. B became naturalized American citizen and got a divorce decree against A in Rino, Nevada. Divorce is recognized in the United States, but not in the Philippines. A subsequently got married to C. a) Is the marriage of A to C valid under Philippine law? Ans: Yes. In Llorente vs. Llorente, decided by the Supreme Court of the Philippines in 2000, the marriage under identical facts was held to be valid, applying the nationality principle to B under Article 15 of the Civil Code which provides that laws relating to family rights and duties, or the status, condition and legal capacity of persons are binding upon citizens of the Philippines, even though living abroad. Since B was an American when he obtained the Divorce decree, US law, which recognizes absolute divorce, applies. In the recent case of Republic vs. Orbecido, decided in 2005, the Supreme Court, interpreting Article 26, paragraph 2, ruled that: The intent of par. 2, Article 26 is to avoid the absurd situation where the Filipino spouse remains married to the alien spouse who, after obtaining a divorce, is no longer married to the Filipino spouse. The reckoning point is not the citizenship of the parties at the time of the celebration of the marriage, but their citizenship at the time a valid divorce is obtained abroad by the alien spouse capacitating him to remarry. 2) Will your answer be the same, if B obtained first the Divorce decree before becoming a naturalized American citizen? Ans: No. In Republic vs. Iyoy, 470 SCRA 519 (Sept. 21, 2005), the Supreme Court held that Article 26, paragraph 2 is not applicable to a Filipino spouse who became a naturalized American after obtaining the divorce decree. When the divorce decree was obtained, he was still a Filipino citizen bound by Philippine laws on family rights and duties, status, condition and legal capacity.
3) A, married to B, got an illegal Divorce against B in the US and then married C. C got mad at A upon learning that their marriage is void. A filed an action to declare his marriage to B a nullity under Art. 36 of the Family Code. May C intervene in said action?
Ans:
No, she has no legal interest because she was never a legal wife of the Petitioner. Her marriage to him is void because at the time of her marriage to the Petitioner, the latter was still lawfully married to B. (Elmar Perez vs. Court of Appeals and Tristan Catindig, G.R. No. 162580)
4) Is a Psychiatric report a mandatory requirement in an action to declare nullity of the marriage based on psychological incapacity under Art. 26 of the Family Code? Ans: Psychological incapacity, as a ground for declaring the nullity of a marriage, may be established by the totality of evidence presented. There is no requirement, however, that the respondent should be examined by physician or a psychologist as a condition sine quo non for such declaration. (Marcos vs. Marcos, G.R. No. 136490, Oct. 19, 2000)

1) What is the doctrine of triennial cohabitation? Ans: The husband is presumed impotent if the wife remains a virgin after living together for 3 years. (US jurisprudence).
2) Enumerate the instances when fraud constitutes a ground for annulment of marriage. Ans: Concealment or non-disclosure of: 1. Previous conviction of crime involving moral turpitude. 2. Being pregnant by another man at the time of the marriage. 3. Sexually transmissible disease (STD) existing at the time of the marriage.
4. Drug addiction, habitual alcoholism, homosexually or lesbianism existing at the time of the
marriage (Art. 46, F.C.). Note: 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 marriage. (Art. 46, FC) 3) In what cases between members of the same family is earnest effort for compromise not required/necessary? Ans: In the following cases which may not be the subject of compromise: (1) The civil status of persons; (2) The validity of a marriage or legal separation; (3) Any ground for legal separation; (4) Future support; (5) The jurisdiction of courts; (6) Future legitime. 4) Are chronic lying and fantasizing a ground for declaration of nullity based on psychological incapacity under Article 36 of the Family Code? Ans: Yes, as held by the Supreme Court in a recent case where inveterate lying impairs the capacity of the liar to perform essential marital obligation, pre-existing and present at the time of the celebration of the marriage, grave and incurable.
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1) a) When may the illegitimate children use the surname of the natural father? Ans: When their filiation has been expressly recognized by their father through (1) the record of birth appearing in the civil registrar (2) in a public document (3) or private handwritten instrument of the father. There is no need to go to court to establish filiation and authorization to use the surname of the father. Aside from the foregoing, filiation may be established by (1) the open and continuous possession of the status of an illegitimate child; or (2) any other means allowed by the Rules of Court and special laws. (Art. 172, Civil Code). b) Is DNA test admissible proof of parentage?
PRE-WEEK REVIEW PREDICTIONS AND REMINDERS in Civil Law By: Prof. Arturo M. de Castro(Ll.B., Ll.M., SJD) 3
Ans:
Yes, it is a recognized proof of paternity and filiation.
2) a) When may entries in the civil registry be corrected without a judicial order? Ans: For clerical or typographical errors and change of first name or nickname.
b) What are the grounds to change the first or nick name? See p. 99, 1st Study Guide for the Bar. 3) What are the requirements for a decree of declaration of nullity to be final and executory where there are assets for partition and there are children borne of the marriage declared null and void? Ans: There must be a partition and delivery of the presumptive legitime to the children.
4) a) What is the concept of presumptive legitime? b) In what cases is the delivery of presumptive legitime required? Refer to page 91, 1st Study Guide for the Bar.
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1) Is the sale of the reclaimed and the submerged area of Manila Bay to AMARI, a private corporation valid? Reasons. Ans: No, for the following reasons: a. The sale of the reclaimed lands in Manila Bay registered in the name of PEA falling under lands of the public domain in favor of AMARI, a private corporation is void for being contrary to Section 3, Article XII of the 1987 Constitution which prohibits private corporations from acquiring any kind of alienable land of the public domain. b. The sale of the still submerged area of Manila Bay to AMARI is void for being contrary to Sec. 2, Art XII of the 1987 Constitution which prohibits the alienation of natural resources other than agricultural lands of the public domain. c. Private corporations cannot hold, except by lease, alienable lands of the public domain.
d. Submerged lands, like the waters (sea or bay) above them, are part of the States inalienable natural resources. Submerged lands are property of public dominion, absolutely inalienable and outside the commerce of man. This is also true with respect to foreshore lands. Any sale of submerged or foreshore lands is void being contrary to the Constitution.
2) Is the salvage zone capable of private ownership and titling?

Ans: Yes. The salvage zone consisting of lands measuring twenty (20) meters measured landward from the interior limit of the shoreline is capable of private ownership and being validly covered by a Torrens Title subject to the easement of public use, more specifically easement of salvage and costal police imposed by law. (Maristela vs. Director of Lands, et. al., G.R. No. 34901-R, September 7, 1968; 65 O.G. No. 46, pp. 12744-12747; Art. 9, Spanish Law of Waters of 1886; Article 51, Water Code; Art. 420, new Civil Code)
3) What is the doctrine of indefeasibility of torrens titles? Ans: A certificate of title, once registered, should not thereafter be impugned, altered, changed, modified, enlarged or diminished except in a direct proceeding permitted by law. The resolution of the issue is, thus, not dependent on the report of the survey team filed in the trial court. (De Pedro v. Romasan, G.R. No. 158002, February 28, 2005)
4) Who is an innocent purchase in good faith of registered land? Ans: Where the real property involved is covered by a Torrens title, the buyer, mortgagee, or, any person dealing with said realty need not go beyond what appears on the face of the title. He is charged with notice only of such burdens and claims as are annotated on the title. (Clemente vs. Razo, G.R. No. 151245, March 04, 2005)
5) Is the above rule applicable to banks? Ans: No. Banks, their business being impressed with public interest, are expected to exercise more care and prudence than private individuals in their dealings, even those involving registered lands. Hence, for merely relying on the certificates of title and for its failure to ascertain the status of the mortgaged properties as is the standard procedure in its operations, the bank is a mortgagee in bad faith. (Consolidated Rural Bank vs. CA, G.R. No. 132161, January 2005)
6) What are the requisites for legal easement of right of way?
Ans:
The following:
a) It is surrounded by other immovables and has no adequate outlet to a public highway; b) payment of proper indemnity; c) the isolation is not the result of its own acts; d) the right of way claimed is at the point least prejudicial to the servient estate; and
e) to the extent consistent with the foregoing rule, where the distance from the dominant estate to a
public highway may be the shortest. (Sps. dela Cruz vs. Ramiscal, G.R. No. 137882, February 4, 2005)
V
1) A constructed a building on the land of B knowing that the land belongs to B. A arranged for the issuance of a fraudulent title over the land in his name. a) What are the rights of B with respect to the building? b) Will your answer be the same if A were in good faith? Ans: a) Because A is in bad faith, B may demand demolition of the building at the expense A, or he may compel A to pay the price of the land.
b) No. If A were in good faith, he cannot be compelled to buy the land if its value is
considerably more than that of the building, if the owner does not choose to appropriate the building after proper indemnity. He shall pay reasonable rent. (Rosales vs. Casteltort, October 5, 2005) 2) a) What are the two stages in expropriation proceedings? Ans: Expropriation proceedings consists of two stages: first, condemnation of the property after it is determined that its acquisition will be for a public purpose or public use and, second, the determination of just compensation to be paid for the taking of private property to be made by the court with the assistance of not more than three commissioners. (NHA vs. Givelondo, 404 SCRA [2003])
b) What is the concept of public use? Ans: The concept of public use is no longer limited to traditional purposes. Here, as elsewhere, the idea that public use is strictly limited to clear cases of use by the public has been abandoned. The term public use has now been held to be synonymous with public interest, public benefit, public welfare, and public convenience. (Reyes vs. NHA, 395 SCRA 494 [2003]) c) What is the interest rate in expropriation cases? Ans: Legal rate is 6% from the time of taking to the time of payment. Back rentals not recoverable. (MIAA vs. Rodriguez)
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1) What are the requisites of:
c) Reserva Troncal (p. 90, 1st Study Guide for the Bar) d) Fideicommissary Substitution (p. 90, 2nd Study Guide for the Bar) 2) What is disposicion captatoria? Is it valid? What is its effect on the testamentary disposition?
Ans: The condition that the heir shall make some provision in his will in favor of the testator or of any other person is what is known as a condition captatoria. Consequently, if the testator makes a testamentary disposition in his will subject to such a condition, it is known as a disposicion captatoria. Under our law, not only the condition but the entire testamentary disposition shall be void (Art. 875, NCC). The reason for this is that sucession is an act of liberality and not a contractual agreement. Besides, to permit it would impair the heirs freedom of disposition with respect to his own property. Furthermore, it would be equivalent to allowing the testator to dispose of the property of another after the latters death (6 Manresa 241).
3) Distinguish between the free portion and the disposable free portion?
Ans:
Where there are other heirs entitled to legitime, like illegitimate children who are entitled to of the legitime of the legitimate children, the legitime of the latter shall be taken from the free portion consisting of of the hereditary estate. The free portion shall no longer be disposable if the decedent is survived by legitimate children or descendants, the surviving spouse, and several illegitimate children so that there is nothing left for free disposal (Art. 895, NCC), such as when there is a concurrence of one legitimate child, the surviving spouse, and 2 or more illegitimate children.
4) Define or explain the following concepts in succession: a) accretion. b) collation Ans:
a) 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 decedent, is added or incorporated to that of his co-heirs, co-devisees, or co-legatees. (Art. 1015, NCC)
b) Collation, under Arts. 1061 to 1077 of the NCC, refers to the act of restoring to the common
mass of the hereditary estate, either actually or fictitiously, any property or right, which a compulsory heir, who succeeds with other compulsory heirs, may have received by way of donation or any other gratuitous title from the decedent, during the lifetime of the latter, but which is understood for legal purposes as an advance of his legitime.
V
1) What are the requisites of a contract? Ans: The following: (1) consent (2) object certain (3) cause or consideration.
2) What is a contract-implied-in-fact? Give an example (see p. 101, 1st Study Guide for the Bar)
3) What are the essential characteristics of contracts? a) Obligatory force binding on the parties. b) Relativity of contract binding only on the parties except where there is a stipulation pour atrui in favor of a third party accepted by the latter. c) Mutuality of contracts based on essential equality between the contracting parties. The obligation is void for being potestative if its compliance and validity depends exclusively upon the will of one of the contracting parties. d) Autonomy or freedom of contracts the parties may make any stipulation or covenant provided that it is not contrary to law, morals, good customs or public policy.
e) Complimentarity of contract or contracts construed together principle the implementing agreement

cannot vary the main agreement of which it is a part.
X
1) A sells his car to B to be delivered to and be paid by B after one week. On the 3 rd day, the Car is hit by
lightning and is totally wrecked. Who bears the risk of loss? Ans: A because ownership still remains with him and will be transferred to the Buyer only upon delivery. The owner bears the risk of loss. Res perit domino. B is not obliged to pay A.
2) a. Distinguish between conventional subrogation of rights of creditors and assignment of credit. b. Does assignment of credit require the consent of creditors? Ans: No. Mere notice to creditor is sufficient. Please read pp. 134 to 136 of the 2 nd Study Guide for the Bar for a comprehensive discussion)
3) a. Define obligation? Ans: A judicial necessity to give, to do or not to do (Art. 1156).
b. What are the sources of obligation? Ans:
1) Law, e.g., support, easement. 2) Contract law between the parties provided it is not contrary to law, morals, good customs,
public order or public policy.
3) Quasi-contract based on the equitable principle of unjust enrichment. a) solutio indebeti to return what is received by mistake; and b) negotionism gestio to compensate for any benefit done even without an agreement. In
the Revised Penal Code, under Justifying Circumstance No. 4, Art. 11, the person benefited by avoidance of greater evil or injury is civilly liable for the damage, the only justifying circumstance when there is a civil liability involved in consonance with the equitable principle to prevent unjust enrichment at the expense of another. The person benefited, not the actor, is liable.
4) Felonies acts or omissions punishable by law. 5) Quasi-delicts or tortuous acts by any person who, there being fault or negligence causes
damage to another. c. Define the following: 1) Fortuitous event 2) Expromision 3) Delegacion 4) Novation 5) Dacion en pago d. What are the different kinds of an obligation? (read 2nd Study Guide for the Bar pp. 115-131) e. What are the modes of extinguishing an obligation? Ans: The following:
1) NO Novation 2) CO Compensation 3) RE Remission or Condonation of debt 4) PA Payment or performance 5) LO Loss of the thing due 6) AN Annulment 7) RE fulfillment of a Resolutory condition 8) RE Rescission 9) PRES - Prescription
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1) Explain the concept and nature of natural obligations. Ans: Natural obligations, not being based on positive law but on equity and natural law, do not grant a right of action to enforce their performance, but after voluntary fulfillment by the obligor, they authorize the retention of what has been delivered or rendered by reason thereof (Art. 1423).
2) What is the concept of quasi-contracts?
Ans:
Article 2142. 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.
3) Define: a. Negotiorum gestio b. Solutio Indebiti Ans:
a. Negotiorum gestio Article 2144. Whoever voluntarily takes charge of the agency or
management of the business or property of another, without any power from the latter, is obliged to continue the same until the termination of the affair and its incidents, or to require the person concerned to substitute him, if the owner is in a position to do so.
b. Solutio Indebiti Article 2154. 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.
X
1) Are corporations entitled to recover moral damages? Ans: As a general rule, a corporation is not entitled to recover moral damages because it is incapable of feeling pain and mental anguish. However, it may recover damages in case of libel or defamation.
2) A marries B while As marriage to C has not been dissolved. C sues A for Bigamy. Thereafter, A files a case for annulment of marriage against C on the ground of fraud. May the criminal action be suspended on the ground of Prejudicial Question? Give 2 reasons. ANS: No. (1) Under the new rule, the civil action must have been filed ahead of the criminal action for prejudicial question to apply. (2) The issue in the civil case is not determinative of the guilt or innocence of A in the criminal case. Bigamy is committed by a person who contracts a second marriage while the first marriage is subsisting and has not been dissolved. Whether the prior marriage is dissolved or not, bigamy may be committed.
X
1) Is extra-judicial foreclosure before a notary public valid? Ans: Yes, it is allowed under Act 3135 (Tagunicar vs. Lorna Espress, February 28, 2006, J. Gutierrez)
2) When may a mortgagor file a motion to set aside foreclosure sale in the same summary proceeding for issuance of a writ of possession? Ans: Within 30 days from the time possession is turned over to the mortgagee or highest bidder.
3) Under the Recto law, may property be foreclosed other than the chattels acquired by the loan secured by the chattel mortgage? Ans: No, because that would violate the rule against deficiency judgment in case of foreclosure upon default in the payment of 2 or more installments. As held by the Supreme Court in a case, the other property included in the chattel mortgage may not be foreclosed.
XIII
1. Define compensation as a mode of extinguishing obligation. Enumerate its requisites. Ans: The Court has expounded on compensation and more specifically on legal compensation as follows: x x x compensation is a mode of extinguishing to the concurrent amount the obligations of persons who in their own right and as principals are reciprocally debtors and creditors of each other. Legal compensation takes place by operation of law when all the requisites are present, as opposed to conventional compensation which takes
place when the parties agree to compensate their mutual obligations even in the absence of some requisites. The Civil Code enumerates the requisites of legal compensation, thus: Art. 1278. Compensation shall take place when two persons, in their own right, are creditors and debtors of each other. Art. 1279. In order that compensation may be proper, it is necessary: (1) That each one of the obligors be bound principally, and that he be at the same time a principal creditor of the other; (2) That both debts consist in a sum of money, or if the things due are consumable, they be of the same kind, and also of the same quality if the latter has been stated; (3)That the two debts be due; (4) That they be liquidated and demandable; (5) That over neither of them there be any retention or controversy, commenced by third persons and communicated in due time to the debtor. (BPI vs. CA, 490 SCRA 178, June 8, 2006, Azcuna - Ponente)
2. (a) Define Laches.

Ans: Laches has been defined as such neglect or omission to assert a right, taken in conjunction with the lapse of time and other circumstances causing prejudice to an adverse party, as will operate as a bar in equity. It is a delay in the assertion of a right which works disadvantage to another because of the inequity founded on some change in the condition or relations of the property or parties. It is based on public policy which, for the peace of society, ordains that relief will be denied to a stale demand which otherwise could be a valid claim. Laches means the failure or neglect for an unreasonable and unexplained length of time, to do that which, by exercising due diligence, could or should have been done earlier; it is negligence or omission to assert a right within a reasonable time, warranting the presumption that the party entitled to assert it either has abandoned or declined to assert it. (Heirs of Dicman vs. Cario, 490 SCRA 267, 268, June 8, 2006) (b) Distinguish laches from prescription. Ans: It is different from and applies independently of prescription. While prescription is concerned with the fact of delay, laches is concerned with the effect of delay. Prescription is a matter of time; laches is principally a question of inequity of permitting a claim to be enforced, this inequity being founded on some change in the condition of the property or the relation of the parties. Prescription is statutory; laches is not. Laches applies in equity, whereas prescription applies at law. Prescription is based on a fixed time, laches is not. (Ibid)
(c) What are the elements of laches? Ans: Given the foregoing findings of fact, all the four (4) elements of laches, as prescribed by the decisions of this Court, are present in the case, to wit: a. Conduct on the part of the defendant, or of one under whom he claims, giving rise to the situation of which complaint is made and for which the complaint seeks a remedy; b. Delay in asserting the complainants rights, the complainant having had knowledge or notice, of the defendants conduct and having been afforded an opportunity to institute a suit; c. Lack of knowledge or notice on the part of the defendant that the complainant would assert the right on which he bases his suit; and d. Injury or prejudice to the defendant in the event relief is accorded to the complainant, or the suit is not held to be barred. (Ibid) (d) May a registered owner of a property under Torrens Title be barred from recovering possession by laches? Ans: Yes. It has been held that even a registered owner of property under the Torrens Title system may be barred from recovering possession of property by virtue of laches. (Panganiban vs. Dayrit, G.R. No. 151235, July 28, 2005, 464 SCRA 370, 381; Vda. De Cabrera, et al. vs. Court of Appeals, et al., 335 Phil. 19; 267 SCRA 339 [1997]) (Heirs of Dicman vs. Cario, supra)
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3. What is accion pauliana?

Ans: The rescissory action to set aside contracts in fraud of creditors is accion pauliana, essentially a subsidiary remedy accorded under Article 1383 of the Civil Code which the party suffering damage can avail of only when he has no other legal means to obtain reparation for the same. In net effect, the provision applies only when the creditor cannot recover in any other manner what is due him. (Union Bank of the Philippines vs. Ong, 491 SCRA 596, June 21, 2006)
4. A Lessee cannot claim to be a possessor in good faith under Art. 448, which applies only to one who
sows, plants or builds believes himself to have a claim of title. (Programme, Inc. vs. Bataan, 492 SCRA 529, June 26, 2006)
XIV
1. Is the judgment declaring the presumptive death/absence of a spouse under the Family Code appealable? Ans: 2. No, the judgment is immediately final and executory by express provision of law. (Art. 247; Republic vs. Lorino, G.R. No. 160258, Jan. 19, 2005)
When may the custody of the child below 7 years old be given to the Father, not to the mother? Ans: For compelling reasons, as when the mother is found unfit to take care of the child as an exception to the tender-age presumption under Art. 213 of the Family Code. (Gualberto vs. Gualberto, June 28, 2005)
3.
Is prostitution or marital infidelity of the mother a compelling reason to give the custody to the Father? Illustrate unfitness of the mother to take care of the child. Ans: No. The so-called tender-age presumption under Article 213 of the Family Code may be overcome only by compelling evidence of the mothers unfitness. The mother has been declared unsuitable to have custody of her children in one or more of the following instances: neglect, abandonment, unemployment, immorality, habitual drunkenness, drug addiction, maltreatment of the child, insanity or affliction with a communicable disease. But sexual preference or moral laxity alone does not prove parental neglect or incompetence. Not even the fact that a mother is a prostitute or has been unfaithful to her husband would render her unfit to have custody of her minor child. To deprive the wife of custody, the husband must clearly establish that her moral lapses have had an adverse effect on the welfare of the child or have distracted the offending spouse from exercising proper parental care. (Gualberto vs. Gualberto, June 28, 2005) Whose surname may an illegitimate child bear? Ans: The mothers surname unless he is recognized by the father, in which case he may use the fathers surname. (Alba vs. CA, July 29, 2005). See de Castro, Study Guide for the Bar, pages 9596, Rex, May 6, 2006 Edition on proof of filiation of illegitimate children under R.A. 9255, approved Feb. 4, 2004.
4.
5.
When may a spouse testify against the other spouse as an exception to the rule on marital disqualification? Ans: When the marital and domestic relations are so strained that there is no more harmony to be preserved or peace and tranquility which may be disturbed. Sec. 22, Rule 130 of the Revised Rules of Court provides that, during their marriage, neither the husband nor the wife may testify for or against the other without the consent of the affected spouse, except in a civil case by one against the other, or in a criminal case for a crime committed by one against the other or the latters direct descendants or ascendants. However, this rule has its exceptions. As in the case at bar, where the marital and domestic relations are so strained that there is no more harmony to be preserved nor peace and tranquility which may be disturbed, the reason based upon such harmony and tranquility fails. In such a case, identity of interests disappears and the consequent danger of perjury based on that identity is non-existent. In particular, when an offense directly attacks, or directly and vitally impairs, the conjugal relation, it comes within the exception to the statute that one shall not be a witness against the other except in a criminal prosecution for a crime committee (by) one against the other. (Alvarez vs. Ramirez, G.R. No. 143439, Oct. 14, 2005)
6.
Sexual infidelity by itself is not sufficient evidence of psychological incapacity. (Villalon vs. Villalon, Nov. 18, 2005)
10
7.
May the woman the Petitioner intends to marry intervene in the action of the plaintiff to annul his marriage with the estranged wife? Ans: No, she has no legal interest because she was never a legal wife of the Petitioner. Her marriage to him is void because at the time of her marriage to the Petitioner, the latter was still lawfully married. (Elmar Perez vs. Court of Appeals and Tristan Catindig, G.R. No. 162580)
8.
a) Is a bank which relies only on the title in granting a mortgage loan, without verifying the title and inspecting the property a mortgagee in good faith if it turns out later on that there are other claimants in possession of the property? Ans: No. Banks, their business being impressed with public interest, are expected to exercise more care and prudence than private individuals in their dealings, even those involving registered lands. Hence, for merely relying on the certificates of title and for its failure to ascertain the status of the mortgaged properties as is the standard procedure in its operations, the bank is a mortgagee in bad faith. (Consolidated Rural Bank vs. CA, G.R. No. 132161, January 2005)
b) What is the doctrine of mortgagee in good faith? Ans: Under Article 2085 of the Civil Code, one of the essential requisites of the contract of mortgage is that the mortgagor should be the absolute owner of the property to be mortgaged; otherwise, the mortgage is considered null and void. However, an exception to this rule is the doctrine of mortgagee in good faith. Under this doctrine, even if the mortgagor is not the owner of the mortgaged property, the mortgage contract and any foreclosure sale arising therefrom are given effect by reason of public policy. This principle is based on the rule that all persons dealing with property covered by a Torrens Certificate of Title, as buyers or mortgagees, are not required to go beyond what appears on the face of the title. This is the same rule that underlies the principle of innocent purchasers for value. The prevailing jurisprudence is that a mortgagee has a right to rely in good faith on the certificate of title of the mortgagor to the property given as security and in the absence of any sign that might arouse suspicion, has no obligation to undertake further investigation. Hence, even if the mortgagor is not the rightful owner of, or does not have a valid title to, the mortgaged property, the mortgagee in good faith is, nonetheless, entitled to protection. (Llanto vs. Alzona, G.R. No. 161029, January 2005) A mortgagee can rely on what appears on the certificate of title presented by the mortgagor and an innocent mortgagee is not expected to conduct an exhaustive investigation on the history of the mortgagors title. This rule is strictly applied to banking institutions. A mortgagee-bank must exercise due diligence before entering into said contract. Judicial notice is taken of the standard practice for banks, before approving a loan, to send representatives to the premises of the land offered as collateral and to investigate who the real owners there are. Banks, indeed, should exercise more care and prudence in dealing even with registered lands, than private individuals, as their business is one affected with public interest. Banks keep in trust money belonging to their depositors, which they should guard against loss by not committing any act of negligence that amounts to lack of good faith. Absent good faith, banks would be denied the protective mantle of the land registration statute, Act 496, which extends only to purchasers for value and good faith, as well as to mortgagees of the same character and description. Thus, this Court clarified that the rule that persons dealing with registered lands can rely solely on the certificate of title does not apply to banks. (Heirs of Manlapat v. CA, G.R. No. 125585, June 8, 2005) 9. a) Spouses A and B acted as sureties for the loans obtained by BMC. BMC filed a Petition for suspension of Payments. May the Bank sue A and B to enforce their solidary liability with BMC? Ans: Yes. Under Art. 1216 of the Civil Code, the creditor may go against the sureties alone independently of BMC without prior demand for payment on the principal debtor because they are solidarily bound with BMC for the payment of the debts to the Bank. (Ong vs. PCIB, G.R. No. 160466, January 2005)
b) Will your answer be the same if A and B are mere guarantors? Ans: No. A guarantor is only an insurer of the solvency of the debtor, while a surety is an insurer of the debt itself. The liability of a guarantor is subsidiary. He has the benefit of excussion, and may be made to pay only if the principal is insolvent. (Arts. 2063 and 2081, Civil Code; Ong vs. PCIB, G.R. No. 160466, January 2005)
c) Distinguish between guaranty and suretyship? Ans: A guarantor insures the solvency of the debtor while a surety is an insurer of the debt itself. A contract of guaranty gives rise to a subsidiary obligation on the part of the guarantor. In a suretyship contract, however, the benefit of excussion is not available to the surety as he is principally liable for the payment of the debt. A surety is directly, equally and absolutely bound with the principal debtor for the payment of the debt and is deemed as an original promissor and debtor from the beginning. (Ong vs. PCIB, G.R. No. 160466, January 2005)
11
10.
Ans:
What is the complimentary-contracts-construed together doctrine? In enforcing a surety contract, the complementary-contracts-construed-together doctrine finds application. According to this principle, an accessory contract must be read in its entirety and together with the principal agreement. This principle is used in construing contractual stipulations in order to arrive at their true meaning; certain stipulations cannot be segregated and then made to control. This no-segregation principle is based on Article 1374 of the Civil Code. (PBC vs. Lim, G.R. No. 158138, April 2005) Registered mortgage in good faith is preferred over unregistered sale. (Flancia vs. CA, April 2005) Has the entrustee under a trust receipt the right to mortgage the property held in trust? Ans: No, because the entrustor (creditor Bank), not the entrustee is the owner of the property in trust. A mortgage must be executed by the absolute owner of the chattels to be valid. (Art. 2085 [2]; DBP vs. Prudential Bank, G.R. No. 143772, November 22, 2005) What is an equitable mortgage? Ans: The real intention is to constitute a mortgage to secure repayment of a loan in a contract that appears on its face as a sale, absolute or with pacto de retro. Under Art. 1602, a contract is presumed an equitable mortgage in any of the following badges of fraud: (1) When the price of a sale with right to repurchase is unusually inadequate; (2) When the vendor remains in possession as lessee or otherwise; (3) When upon or after the expiration of the right to repurchase another instrument extending the period of redemption or granting a new period is executed; (4) When the purchaser retains for himself a part of the purchase price; (5) When the vendor binds himself to pay the taxes on the thing sold;
11.
12.
13.
(6) In any other case where it may be fairly inferred that the real intention of the parties is
that the transaction shall secure the payment of a debt or the performance of any other obligation. (Alvaro v. Ternida, G.R. No. 166183, January 20, 2006)
14.
a) The broker or agent who brought the buyer and seller together and arranged the ocular inspection that did not materialize is entitled to commission even if he does not participate in the negotiations of the sale. (Medrano vs. CA, February 2005) b) Where the contract of agency is revoked after disagreement on the commission and the principal proceeded to directly negotiate the transaction, the agent is not entitled to commission. (Carlos Sanchez vs. Medicard, per J. Sandoval-Gutierrez, September 2, 2005)
15.
To be valid, a partnership involving capital of 3,000.00 or more in money or property, or with contributed real estate must be in a public instrument. (Arts. 1771 & 1772; Litonjua vs. Litonjua, Dec. 13, 2006) Who can file a notice of lis pendens? Ans: Only a party to a case has the legal personality to file a notice of lis pendens relative to the pending case. It declared that petitioners are not parties in land registration case filed by Sandoval and Ozatea. Since a land registration case is a proceeding in rem, an order of general default binds the whole world as a party in the case. The heirs of Eugenio Lopez are mere movants whose personality the court has not admitted. Based on Section 26 of PD 1529, the LRA ruled that they should have filed a motion to lift the order of general default. (Heirs of Eugenio Lopez, Sr. vs. Hon. Enriquez, G.R. No. 146262, January 21, 2005)
16.
17.
18.
Donation of real property is void if not made in a public document. (Dept. of Ed. vs. del Rosario, January 16, 2005) What are the requisites for legal easement of right of way? Ans: The following: (1) It is surrounded by other immovables and has no adequate outlet to a public highway; (2) payment of proper indemnity; (3) the isolation is not the result of its own acts;
12
(4) the right of way claimed is at the point least prejudicial to the servient estate; and (5) to the extent consistent with the foregoing rule, where the distance from the dominant estate to a public highway may be the shortest. (Sps. dela Cruz vs. Ramiscal, G.R. No. 137882, February 4, 2005) 19. Ans: What are the elements of laches? The essential elements of laches are: (a) conduct on the part of the defendant, or of one under whom he claims, giving rise to the situation complained of; (b) delay in asserting complainants rights after he had knowledge of defendants acts and after he has had the opportunity to sue; (c) lack of knowledge or notice by defendant that the complainant will assert the right on which he bases his suit; and
(d) injury or prejudice to the defendant in the event the relief is accorded to the complainant.
(Sps. dela Cruz vs. Ramiscal, G.R. No. 137882, February 4, 2005)
20. 21.
22.
An action for reconveyance based on fraud is imprescriptible where the plaintiff is in possession. (Leyson vs. Bontoyan, February 18, 2005) Political Contribution is taxable gift. (Abello vs. CIR, February 23, 2005) What is the doctrine of indefeasibility of torrens titles? Ans: A certificate of title, once registered, should not thereafter be impugned, altered, changed, modified, enlarged or diminished except in a direct proceeding permitted by law. The resolution of the issue is, thus, not dependent on the report of the survey team filed in the trial court. (De Pedro v. Romasan, G.R. No. 158002, February 28, 2005) Who is an innocent purchase in good faith of registered land? Ans: Where the real property involved is covered by a Torrens title, the buyer, mortgagee, or, any person dealing with said realty need not go beyond what appears on the face of the title. He is charged with notice only of such burdens and claims as are annotated on the title. (Clemente vs. Razo, G.R. No. 151245, March 04, 2005) (a) What is (define) an equitable mortgage: Ans: An equitable mortgage is defined as one which although lacking in some formality, or form or words, or other requisites demanded by a statute, nevertheless reveals the intention of the parties to charge real property as security for a debt, and contains nothing impossible or contrary to law. For the presumption of an equitable mortgage to arise, two requisites must concur: (1) the parties entered into a contract denominated as a sale; and (2) that their intention was to secure an existing debt by way of a mortgage. Consequently, the nonpayment of the debt when due gives the mortgagee the right to foreclosure the mortgage, sell the property and apply the proceeds of the sale to the satisfaction of the loan obligation. (Sps. Alvaro vs. Sps. Ternida, G.R. No. 166183, January 20, 2006) (b) What are the badges of presumed equitable mortgage? Ans: While there is no single conclusive test to determine whether a deed absolute on its face is really a simple loan accommodation secured by a mortgage, however, the Civil Code enumerates several instances when a contract is clothed with the presumption that it is an equitable mortgage, to wit: Article 1602. The contract shall be presumed to be an equitable mortgage, in any of the following cases: (1) When the price of a sale with right to repurchase is unusually inadequate; (2) When the vendor remains in possession as lessee or otherwise; (3) When upon or after the expiration of the right to repurchase another instrument extending the period of redemption or granting a new period is executed; (4) When the purchaser retains for himself a part of the purchase price; (5) When the vendor binds himself to pay the taxes on the thing sold;
23.
24.
13
(6) In any other case where it may be fairly inferred that the real intention of the parties is that the transaction shall secure the payment of a debt or the performance of any other obligation. In any of the foregoing cases, any money, fruits, or other benefit to be received by the vendee as rent or otherwise hall be considered as interest which shall be subject to the usury laws. It is an established rule that the presence of even one of the circumstances set forth in Article 1602 is sufficient to declare a contract of sale with right to repurchase an equitable mortgage. Thus, under the wise, just and equitable presumption in Article 1602, a document which appears on its fact to be a sale absolute or with pacto de retro may be proven by the vendor or vendor-a-retro to be one of a loan with mortgage. In such case, parol evidence becomes competent and admissible to prove that the instrument was in truth and in fact given merely as a security for the payment of a loan. And upon proof of the truth of such allegations, the court will enforce the agreement or understanding in consonance with the true intent of the parties at the time of the execution of the contract. The conditions which give rise to a presumption of equitable mortgage, as set out in Article 1602 of the Civil Code, apply with equal force to a contract purporting to be one of absolute sale. Moreover, the presence of even one of the circumstances in Article 1602 is sufficient basis to declare a contract as one of equitable mortgage. This is in consonance with the rule that the law favors the least transmission of rights. (Ibid) 25. What is the nature of a contract to sell? May it give rise to a cause of action for specific performance? Distinguish a contract to sell from a contract of sale. Ans: As correctly stated by the Court of Appeals in its assailed Decision, The ruling of the Supreme Court in Lim v. Court of Appeals (182 SCRA 564 [1990]) is most illuminating. In the said case, a contract to sell and a contract of sale were clearly and thoroughly distinguished from each other, with the High Tribunal stressing that in a contract of sale, the title passes to the buyer upon the delivery of the thing sold. In a contract to sell, the ownership is reserved in the seller and is not to pass until the full payment of the purchase price is made. In the first case, non-payment of the price is a negative resolutory condition; in the second case, full payment is a positive suspensive condition. In the first case, the vendor has lost ownership and cannot recover the ownership of the property until and unless the contract of sale is itself resolved and set aside. In the second case, the title remains in the vendor if the vendee does not comply with the condition precedent of making payment at the time specified in the contract. Considering that the parties transaction is a contract to sell, can petitioner, as seller, demand specific performance from respondent, as buyer? Blacks Law Dictionary defines specific performance as (t)he remedy of requiring exact performance of a contract in the specific form in which it was made, or according to the precise terms agreed upon. The actual accomplishment of a contract by a party bound to fulfill it. Evidently, before the remedy of specific performance may be availed of, there must be a breach of the contract. Under a contract to sell, the title of the thing to be sold is retained by the seller until purchaser makes full payment of the agreed purchase price. Such payment is a positive suspensive condition, the non-fulfillment of which is not a breach of contract but merely an event that prevents the seller from conveying title to the purchaser. The non-payment of the purchase price renders the contract to sell ineffective and without force and effect. Thus, a cause of action for specific performance does not arise. (Ayala Life Assurance, Inc. v. Ray Burton Development Corp., G.R. No. 163075, January 23, 2006)
26.
Ans:
What is a purchase money resulting trust? Article 1448 of the Civil Code on implied trust provides: Art. 1448. There is an implied trust when property is sold, and the legal estate is granted to one party but the price is paid by another for the purpose of having the beneficial interest of the property. The former is the trustee, while the latter is the beneficiary. However, if the person to whom the title is conveyed is a child, legitimate or illegitimate, of the one paying the price of the sale, no trust is implied by law, it being disputably presumed that there is a gift in favor of the child. The trust created under the first sentence of Article 1448 is sometimes referred to as a purchase money resulting trust, the elements of which are: (a) an actual payment of money, property or services, or an equivalent, constituting valuable consideration; and (b) such consideration must be furnished by the alleged beneficiary of a resulting trust. (Comilang v. Burcena, G.R. No. 146853, February 13, 2006)
14
27. Ans:
Define trust, and each kind of trust. A trust is the legal relationship between one person having an equitable ownership in property and another person owning the legal title to such property, the equitable ownership of the former entitling him to the performance of certain duties and the exercise of certain powers by the latter. Trusts are either express or implied. Express trusts are created by the intention of the trustor or of the parties, while implied trusts come into being by operation of law, either through implication of an intention to create a trust as a matter of law or through the imposition of the trust irrespective of, and even contrary to, any such intention. In turn, implied trusts are either resulting or constructive trusts. Resulting trusts are based on the equitable doctrine that valuable consideration and not legal title determines the equitable title or interest and are presumed always to have been contemplated by the parties. They arise from the nature or circumstances of the consideration involved in a transaction whereby one person thereby becomes invested with legal title but is obligated in equity to hold his legal title for the benefit of another. (Pigao v. Rabanillo, G.R. No. 150712, May 2, 2006)
28.
Ans:
What is accion pauliana? The rescissory action to set aside contracts in fraud of creditors is accion pauliana, essentially a subsidiary remedy accorded under Article 1383 of the Civil Code which the party suffering damage can avail of only when he has no other legal means to obtain reparation for the same. In net effect, the provision applies only when the creditor cannot recover in any other manner what is due him. (Union Bank of the Philippines vs. Ong, 491 SCRA 596, June 21, 2006)
XV
SIGNIFICANT RULINGS PENNED BY JUSTICE DANTE TINGA CHAIRMAN, 2008 BAR EXAMINATIONS
1. What are the requisites of novation? Ans: There was Novation. Novation is extinctive when an old obligation is terminated by the creation of a new obligation that takes the place of the former. For extinctive novation to take place, the following requirements must concur: (1) a previous valid obligation; (2) an agreement of all parties concerned to a new contract; (3) the extinguishment of the old obligation; and (4) the birth of a valid new obligation. In order that an obligation may be extinguished by a subsequent one, there must be an unequivocal terms to the effect or that the old and the new obligations be on every point incompatible with each other. The execution of Contract to Sell No. B created new obligations in lieu of those under Contract to Sell No. A. The two contracts do not have independent existence for to rule otherwise would present an absurd situation where the parties would be liable under each contract having only one subject matter. (Fabrigas vs. San Francisco Del Monte, Inc., G.R. No. 152346, November 25, 2005) 2. What is the procedure for reconstitution of lost title? Ans: Republic Act No. 26, entitled "An Act Providing a Special Procedure for the Reconstitution of Torrens Certificates of Title Lost or Destroyed", lays down the procedure by which previously issued but lost or destroyed certificates of title may be reconstituted. The law presupposes that the property whose title is sought to be reconstituted has already been brought under the provisions of the Torrens System, Act 496. Republic Act No. 26 confers jurisdiction or authority on the Court of First Instance (now the Regional Trial Court) to hear and decide petitions for judicial reconstitution and provides the special requirements and procedure that must be followed before the court can properly act, assume and acquire jurisdiction or authority over the petition and grant the reconstitution prayed for. The petition for reconstitution must allege certain specific jurisdictional facts, the notice of hearing must be published in the Official Gazette and posted in particular places and the same sent or notified to specified persons. Sections 12 and 13 of RA 26 set forth the contents of the petition and lay down the procedure to be followed. The documentary requirements and procedure are mandatory and must be strictly complied with before the court can act on a petition for reconstitution and grant the remedy sought. Otherwise, the proceedings will be utterly void. In this case, the controversy lies in the documentary basis for the reconstitution.
15
SECTION 2. Original certificates of title shall be reconstituted from such of the sources hereunder enumerated as may be available, in the following order: a) The owner's duplicate certificate of title; b) The co-owner's, mortgagee's, or lessee's duplicate of the certificate of title; c) A certified copy of the title previously issued by the register of deeds or by a legal custodian thereof; d) An authenticated copy of the decree of registration or patent, as the case may be, pursuant to which the original certificate of title was issued; e) A document, on file in the registry of deeds by which the property, the description of which is given in said document, is mortgaged, leased or encumbered, or an authenticated copy of said document showing that its original had been registered; and f) Any other document which, in the judgment of the court, is sufficient and proper basis for reconstituting the lost or destroyed certificate of title. SC cannot give primacy to the findings of RTC over the categorical certification by the Registry of Deeds that its records do not show that a certificate or title was issued over the property. Indeed, this certification presents a powerfully cogent reason for the denial of the petition for reconstitution anchored as it was on Sec. 2(d) above-quoted. The trial court should have been more circumspect in ordering reconstitution based on this section considering that the only evidence upon which it based its finding that an original certificate of title had been issued pursuant to the decree of registration adduced by petitioners was the testimony of two witnesses, one of whom is petitioner. Petitioner Dolores Cabello merely testified to the effect that Basilio Abellanosa kept the original certificate of title but that she did not know where it was. The evidence presented by petitioners does not establish that an original certificate of title over the property was earlier issued. Hence, the reconstitution ordered by the trial court was improper. The petition should have been filed under Sec. 2(f) of RA 26, in which case, it should have been accompanied by a duly approved plan and technical description of the property in accordance with Sec. 12 of the law. (Cabello and Abellanosa vs. The Republic of the Philippines, G.R. No. 142810, August 18, 2005) 3. When is a Deed of Absolute Sale an equitable mortgage? Ans: From respondents' admission, it can be gathered that the assailed Deed of Absolute Sale does not reflect the true arrangement of the parties. The form of the instrument cannot prevail over the true intent of the parties as established by the evidence. Courts are not bound by the title or name given by the parties. The decisive factor in evaluating such agreement is the intention of the parties, as shown not necessarily by the terminology used in the contract but by their conduct, words, actions and deeds prior to, during and immediately after execution of the agreement. And, in case of doubt, a contract purporting to be a sale with right to repurchase shall be construed as an equitable mortgage. Under Articles 1604 and 1602 of the Civil Code come into play. The articles provide that when the parties to a contract of sale actually intended such contract to secure the payment of an obligation, it shall be presumed to be an equitable mortgage. For the presumption of equitable mortgage to arise, two requisites must be satisfied, namely: that the parties entered into a contract denominated as a contract of sale and that their intention was to secure an existing debt by way of mortgage. Under Article 1604 of the Civil Code, a contract purporting to be an absolute sale shall be presumed to be an equitable mortgage should any of the conditions in Article 1602 be present. To stress, the existence of any one of the conditions under Article 1602, not a concurrence, or an overwhelming number of such circumstances, suffices to give rise to the presumption that the contract is an equitable mortgage. It must be emphasized too, however, that there is no conclusive test to determine whether a deed absolute on its face is really a simple loan accommodation secured by a mortgage. In fact, it is often a question difficult to resolve and is frequently made to depend on the surrounding circumstances of each case. When in doubt, courts are generally inclined to construe a transaction purporting to be a sale as an equitable mortgage, which involves a lesser transmission of rights and interests over the property in controversy. In the case at bar, petitioners remained in possession of the house and lot even after the execution of the Deed of Absolute Sale. Under paragraph 2 of Article 1602, where the purported vendor remains in possession of the property subject of the sale and it can be inferred that the true intention of the parties was to secure an existing debt, the transaction shall be deemed an equitable mortgage. Under paragraph 1 of Article 1602, where the purchase price is inadequate, a contract of sale is also presumed to be an equitable mortgage. Based on respondents' evidence, petitioners' property was valued at P700,000.00 but the assailed Deed of Absolute Sale stated a consideration of only P200,000.00. (Romulo vs. Layug, G.R. No. 151217, September 8, 2006) 4. A Will is presented for probate that does not state in the attestation clause the number of pages on which the Will is written and is not acknowledged before a Notary Public who merely administered a jurat thereof. May the Will be admitted for probate?
16
Ans:
A will whose attestation clause does not contain the number of pages on which the will is written is fatally defective. A will whose attestation clause is not signed by the instrumental witnesses is fatally defective. And perhaps most importantly, a will which does not contain an acknowledgment, but a mere jurat, is fatally defective. Any one of these defects is sufficient to deny probate. As admitted by petitioner himself, the attestation clause fails to state the number of pages of the will. There was an incomplete attempt to comply with this requisite, a space having been allotted for the insertion of the number of pages in the attestation clause. Yet the blank was never filled in; hence, the requisite was left uncomplied with. The purpose of requiring the number of sheets to be stated in the attestation clause is obvious; the document might easily be so prepared that the removal of a sheet would completely change the testamentary dispositions of the will and in the absence of a statement of the total number of sheets such removal might be effected by taking out the sheet and changing the numbers at the top of the following sheets or pages. If, on the other hand, the total number of sheets is stated in the attestation clause the falsification of the document will involve the inserting of new pages and the forging of the signatures of the testator and witnesses in the margin, a matter attended with much greater difficulty. With the enactment of the Civil Code in 1950 did put in force a rule of interpretation of the requirements of wills, at least insofar as the attestation clause is concerned, that may vary from the philosophy that governed these two cases. Article 809 of the Civil Code states: "In the absence of bad faith, forgery, or fraud, or undue and improper pressure and influence, defects and imperfections in the form of attestation or in the language used therein shall not render the will invalid if it is proved that the will was in fact executed and attested in substantial compliance with all the requirements of article 805." Application of the "substantial compliance rule" under Article 809: x x x The rule must be limited to disregarding those defects that can be supplied by an examination of the will itself: whether all the pages are consecutively numbered; whether the signatures appear in each and every page; whether the subscribing witnesses are three or the will was notarized. All these are facts that the will itself can reveal, and defects or even omissions concerning them in the attestation clause can be safely disregarded. But the total number of pages, and whether all persons required to sign did so in the presence of each other must substantially appear in the attestation clause, being the only check against perjury in the probate proceedings. (Emphasis supplied.) The failure of the attestation clause to state the number of pages on which the will was written remains a fatal flaw, despite Article 809. The purpose of the law in requiring the clause to state the number of pages on which the will is written is to safeguard against possible interpolation or omission of one or some of its pages and to prevent any increase or decrease in the pages. The failure to state the number of pages equates with the absence of an averment on the part of the instrumental witnesses as to how many pages consisted the will, the execution of which they had ostensibly just witnessed and subscribed to. Following Caneda, there is substantial compliance with this requirement if the will states elsewhere in it how many pages it is comprised of, as was the situation in Singson and Taboada. However, in this case, there could have been no substantial compliance with the requirements under Article 805 since there is no statement in the attestation clause or anywhere in the will itself as to the number of pages which comprise the will. For one, the attestation clause was not signed by the instrumental witnesses. While the signatures of the instrumental witnesses appear on the left-hand margin of the will, they do not appear at the bottom of the attestation clause which after all consists of their averments before the notary public. Indeed, the attestation clause is separate and apart from the disposition of the will. An unsigned attestation clause results in an unattested will. Even if the instrumental witnesses signed the left-hand margin of the page containing the unsigned attestation clause, such signatures cannot demonstrate these witnesses' undertakings in the clause, since the signatures that do appear on the page were directed towards a wholly different avowal. Thus, the subject will cannot be considered to have been validly attested to by the instrumental witnesses, as they failed to sign the attestation clause. Lastly, the requirement under Article 806 that "every will must be acknowledged before a notary public by the testator and the witnesses" has also not been complied with. Accordingly, the notary public, Petronio Y. Bautista, wrote "Nilagdaan ko at ninotario ko ngayong 10 ng Hunyo 10 (sic), 1981 dito sa Lungsod ng Maynila." By no manner of contemplation can those words be construed as an acknowledgment. An acknowledgment is the act of one who has executed a deed in going before some competent officer or court and declaring it to be his act or deed. It involves an extra step undertaken whereby the signor actually declares to the notary that the executor of a document has attested to the notary that the same is his/her own free act and deed. A notarial will that is not acknowledged before a notary public by the testator and the witnesses is fatally defective, even if it is subscribed and sworn to before a notary public. (Azuela vs. Court of Appeals, G.R. No. 122880, April 12, 2006)
XVI
JANUARY 1 TO JUNE 30, 2006 SUPREME COURT DECISIONS
1. (a) What is (define) an equitable mortgage: Ans: An equitable mortgage is defined as one which although lacking in some formality, or form or words, or other requisites demanded by a statute, nevertheless reveals the intention of the parties to charge real property as security for a debt, and contains nothing impossible or contrary to law. For the presumption of an equitable mortgage to arise, two requisites must concur: (1) the parties entered into a contract denominated as a sale; and (2) that their intention was to secure an existing debt by way of a mortgage. Consequently, the nonpayment of the debt when due gives the mortgagee the right to foreclosure the mortgage, sell the property and apply the proceeds of the sale to the satisfaction of the loan obligation. (Sps. Alvaro vs. Sps. Ternida, G.R. No. 166183, January 20, 2006) (b) What are the badges of presumed equitable mortgage? Ans: While there is no single conclusive test to determine whether a deed absolute on its face is really a simple loan accommodation secured by a mortgage, however, the Civil Code enumerates several instances when a contract is clothed with the presumption that it is an equitable mortgage, to wit: Article 1602. The contract shall be presumed to be an equitable mortgage, in any of the following cases: (1) When the price of a sale with right to repurchase is unusually inadequate; (2) When the vendor remains in possession as lessee or otherwise; (3) When upon or after the expiration of the right to repurchase another instrument extending the period of redemption or granting a new period is executed; (4) When the purchaser retains for himself a part of the purchase price; (5) When the vendor binds himself to pay the taxes on the thing sold; (6) In any other case where it may be fairly inferred that the real intention of the parties is that the transaction shall secure the payment of a debt or the performance of any other obligation. In any of the foregoing cases, any money, fruits, or other benefit to be received by the vendee as rent or otherwise hall be considered as interest which shall be subject to the usury laws. It is an established rule that the presence of even one of the circumstances set forth in Article 1602 is sufficient to declare a contract of sale with right to repurchase an equitable mortgage. Thus, under the wise, just and equitable presumption in Article 1602, a document which appears on its fact to be a sale absolute or with pacto de retro may be proven by the vendor or vendor-a-retro to be one of a loan with mortgage. In such case, parol evidence becomes competent and admissible to prove that the instrument was in truth and in fact given merely as a security for the payment of a loan. And upon proof of the truth of such allegations, the court will enforce the agreement or understanding in consonance with the true intent of the parties at the time of the execution of the contract. The conditions which give rise to a presumption of equitable mortgage, as set out in Article 1602 of the Civil Code, apply with equal force to a contract purporting to be one of absolute sale. Moreover, the presence of even one of the circumstances in Article 1602 is sufficient basis to declare a contract as one of equitable mortgage. This is in consonance with the rule that the law favors the least transmission of rights. (Ibid) 2. What is the nature of a contract to sell? May it give rise to a cause of action for specific performance? Distinguish a contract to sell from a contract of sale. Ans: As correctly stated by the Court of Appeals in its assailed Decision, The ruling of the Supreme Court in Lim v. Court of Appeals (182 SCRA 564 [1990]) is most illuminating. In the said case, a contract to sell and a contract of sale were clearly and thoroughly distinguished from each other, with the High Tribunal stressing that in a contract of sale, the title passes to the buyer upon the delivery of the thing sold. In a contract to sell, the ownership is reserved in the seller and is not to pass until the full payment of the purchase price is made. In the first case, non-payment of the price is a negative resolutory condition; in the second case, full payment is a positive suspensive condition. In the first case, the vendor has lost ownership and cannot recover the ownership of the property until and unless the contract of sale is itself resolved and set aside. In the second case, the title remains in the vendor if the vendee does not comply with the condition precedent of making payment at the time specified in the contract.
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Considering that the parties transaction is a contract to sell, can petitioner, as seller, demand specific performance from respondent, as buyer? Blacks Law Dictionary defines specific performance as (t)he remedy of requiring exact performance of a contract in the specific form in which it was made, or according to the precise terms agreed upon. The actual accomplishment of a contract by a party bound to fulfill it. Evidently, before the remedy of specific performance may be availed of, there must be a breach of the contract. Under a contract to sell, the title of the thing to be sold is retained by the seller until purchaser makes full payment of the agreed purchase price. Such payment is a positive suspensive condition, the non-fulfillment of which is not a breach of contract but merely an event that prevents the seller from conveying title to the purchaser. The non-payment of the purchase price renders the contract to sell ineffective and without force and effect. Thus, a cause of action for specific performance does not arise. (Ayala Life Assurance, Inc. v. Ray Burton Development Corp., G.R. No. 163075, January 23, 2006) Succession 3. Are grandnephews and grandnieces entitled to inherit by the right of representation in the collateral line? Ans: No. Under Article 972 of the new Civil Code, the right of representation in the collateral line takes place only in favor of the children of brothers and sisters (nephews and nieces). Consequently, it cannot be exercised by grandnephews and grandnieces. Therefore, the only collateral relatives of Josefa Delgado who are entitled to partake of her intestate estate are her brothers and sisters, or their children who were still alive at the time of her death on September 8, 1972. They have a vested right to participate in the inheritance. (In the Matter of the Intestate Estates of Delgado & Rustia vs. Heirs of Marciana Rustia Vda. De Damian, et al., G.R. No. 155733, January 27, 2006)
4. (a) What is the property of public dominion? Ans: Property of public dominion is defined by Article 420 of the Civil Code as follows: ART. 420. The following things are property of public dominion: (1) Those intended for public use such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores, roadsteads, and other of similar character. (2) Those which belong to the State, without being for public use, and are intended for some public service or for the development of the national wealth. (Domalsin vs. Sps. Valenciano, G.R. No. 158687, January 25,2006) (b) Who owns property of public dominion? Ans: Properties of public dominion are owned by the general public. Public use is use that is not confined to privileged individuals, but is open to the indefinite public. As the land in controversy is a portion of Kennon Road which is for the use of the people, there can be no dispute that same is part of public domain. This being the case, the parties cannot appropriate the land for themselves. Thus, they cannot claim any right of possession over it. This is clear from Article 530 of the Civil Code which provides: ART. 530. Only things and rights which are susceptible of being appropriated may be the object of possession. (Ibid) (c) May the right of possession be claimed by a non-owner? What is the basis for recovery in an action for forcible entry? Ans: The fact that the parties do not and cannot own the property under litigation does not mean that the issue to be resolved is no longer priority of possession. The determining factor for one to be entitled to possession will be prior physical possession and not actual physical possession. Since title is never in issue in a forcible entry case, the Court of Appeals should have based its decision on who had prior physical possession. The main thing to be proven in an action for forcible entry is prior possession and that same was lost though force, intimidation, threat, strategy and stealth, so that it behooves the court to restore possession regardless of title or ownership. (Ibid)
(d) Is abandonment a material issue to the right of possession? Ans: Yes. Inasmuch as prior physical possession must be respected, the Court of Appeals should have ruled squarely on the issue of abandonment because it gave precedence to the actual present possession of respondents. If, indeed, there was abandonment of the land under
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consideration by petitioner, only then should respondents be given the possession of the same since abandonment is one way by which a possessor may lose his possession. Abandonment of a thing is the voluntary renunciation of all rights which a person may have in a thing, with the intent to lose such thing. A thing is considered abandoned and possession thereof lost if the spes recuperandi (the hope of recovery) is gone and the animus revertendi (the intention of returning) is finally given up. (Ibid) (e) May an action for forcible entry or unlawful detainer be filed against a party who is not in possession of the property? Ans: No. An action of forcible entry and detainer may be maintained only against one in possession at the commencement of the action, and not against one who does not in fact hold the land. Under Section 1, Rule 70 of the Rules of Court, the action may be filed against persons unlawfully withholding or depriving possession or any person claiming under them. Considering that respondents are the ones in present actual possession and are depriving petitioner of the possession of the land in question, it is proper that they be the ones to be named defendants in the case. The fact that Gloria Banuca was supposedly the one who first committed forcible entry when she allegedly demolished the house of petitioner does not make her the proper party to be sued because she is no longer in possession or control of the land in controversy. (Ibid)
(f) In forcible entry made clandestinely, when should the one-year prescriptive period be counted from? Ans: From the time the person deprived of possession demanded the deforciant to desist from such dispossession. As regards the timeliness of the filing of the case for forcible entry, we find that same was filed within the one-year prescriptive period. We have ruled that where forcible entry was made clandestinely, the one-year prescriptive period should be counted from the time the person deprived of possession demanded that the deforciant desist from such dispossession when the former learned thereof. As alleged by petitioner in the Amended Complaint, he was deprived of his possession over the land by force, strategy and stealth. Considering that one of the means employed was stealth because the intrusion was done by respondent without his knowledge and consent, the one-year period should be counted from the time he made the demand to respondents to vacate the land upon learning of such dispossession. The record shows that upon being informed that respondents were constructing a building in the subject land sometime in the first week of August 1998, petitioner immediately protested and advised the former to stop; but to no avail. (Ibid) 5. The prescriptive period to revoke a donation for non-compliance of its condition is: (a) Four year under Art. 764 of the Civil Code from the non-compliance with the condition of the deed of donation. (b) Under Art. 733 of the Civil Code, a donation with onerous cause is essentially a contract, which is governed by Article 1144 which provides that an action arising from a written contract is 10 years from the time the cause of action accrues. (Anno vs. Anno, G.R. No. 163743, January 27, 2006) (c) None of the above. Ans: (b)
6. (a) Define joint obligation. Ans: This case concerns a joint obligation, which is defined as an obligation where there is a concurrence of several creditors, or of several debtors, or of several creditors and debtors, by virtue of which each of the creditors has a right to demand, and each of the debtors is bound to render, compliance with his proportionate part of the prestation which constitutes the object of the obligation. Article 1208 of the Civil Code mandates the equal sharing of creditors in the payment of debt in the absence of any law or stipulation to the contrary. (PCIB v. CA, G.R. No. 121989, January 31, 2006)
(b) Rule when third party pays an obligation without the knowledge of the debtor. Ans: Generally, the third person who paid anothers debt is entitled to recover the full amount he had paid. The law, however, limits his recovery to the amount of which the debtor has been benefited, if the debtor has no knowledge of, or has expressed his opposition to such payment. Where the defenses that could have been set up by the debtor against the creditor were existing and perfected, a payment by a third person without the knowledge of the debtor cannot obligate the debtor to such third parson to an amount more than what he could have been compelled by the creditor to pay. Thus, if the debt has been remitted, paid, compensated or prescribed, a payment by a third person would constitute a payment of what is not due; his remedy would be against the person who received the payment under such conditions, and not against the debtor who did not benefit from the payment. (Ibid)
7. Essential requisites of a binding contract.

Ans:
Under Article 1318 of the Civil Code, there are three essential requisites which must concur in order to give rise to a binding contract: (1) consent of the contracting parties; (2) object certain which is the subject matter of the contract; and (3) cause of the obligation which is established. (Roxas v. Zuzuarregui, G.R. No. 152072, January 31, 2006)
8. Facts: Editha Hebron Verchez was confined at the Sorsogon Hospital on January 21, 1991, when on the same date, her daughter Grace Verchez-Infante immediately sent a telegram through the Sorsogon Branch of the RCPI to her sister, Zenaida Verchez-Catibog, who was residing in Quezon City asking for financial help. After 3 days, Grace sent another telegram to Zenaida thru the JRS Delivery Service, reprimanding her for not sending financial aid. The RCPI telegram was finally delivered to Zenaida on February 15, 1991 after 25 days. On April 17, 1992, Editha died. The husband of Editha, along with daughters Grace and Zenaida filed an action for damages against RCPI. RCPI interposed the defenses of: (1) force majeure due to defect in its transmission process; (2) there is no causal connection between the delay of the telegram and the death of Editha; and (3) the liability of RCPI is limited under its Telegram Transmission Form. Issue: Is RCPI liable? Resolution: Yes, for Breach of Contract to Grace and for quasi-delict to the other plaintiffs (her father and sister Zenaida). Force majeure is not present and the stipulation in the Telegram Transmission Form is a contract of adhesion and null and void. (a) Quasi-contract Article 1170 of the Civil Code provides: 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. Passing on this codal provision, this Court explained: In culpa contractual x x x the mere proof of the existence of the contract and the failure of its compliance justify, prima facie, a corresponding right of relief. The law, recognizing the obligatory force of contracts, will not permit a party to be set free from liability for any kind of misperformance of the contractual undertaking or a contravention of the tenor thereof. A breach upon the contract confers upon the injured party a valid cause for recovering that which may have been lost or suffered. The remedy serves to preserve the interests of the promissee that may include his expectation interest, which is his interest in having the benefit of his bargain by being put in sa good a position as he would have been in had the contract been performed, or his reliance interest, which is h is interest in being reimbursed for loss caused by reliance on the contract by being put in as good position as he would have been in had the contract not been made; or his restitution interest which is his interest in having restored to him any benefit that he has conferred on the other party. Indeed, agreements can accomplish little, either for their makers or for society, unless they are made the basis for action. The effect of every infraction is to create a new duty, that is, to make recompense to the one who has been injured by the failure of another to observe his contractual obligation unless he can show extenuating circumstances, like proof of his exercise of due diligence . . . or of the attendance of fortuitous event, to excuse him from his ensuing liability. In the case at bar, RCPI bound itself to deliver the telegram within the shortest possible time. It took 25 days, however, for RCPI to deliver it. (b) Quasi-delict And for quasi-delict, RCPI is liable to Graces co-respondents following Article 2176 of the Civil Code which provides: Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter. RCPIs liability as an employer could of course be avoided if it could prove that it observed the diligence of a good father of a family to prevent damage. Article 2180 of the Civil Code so provides. xxx
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RCPI failed, however, to prove that it observed all the diligence of a good father of a family to prevent damage. (c) Force Majeure RCPI invokes force majeure, specifically, the alleged radio noise and interferences which adversely affected the transmission and/or reception of the telegraphic message. Additionally, its messenger claimed he could not locate the address of Zenaida and it was only on the third attempt that he was able to deliver the telegram. For the defense of force majeure to prosper, xxx it is necessary that one has committed no negligence or misconduct that may have occasioned the loss. An act of God cannot be invoked to protect a person who has filed to take steps to forestall the possible adverse consequences of such a loss. Ones negligence may have oncurred with an act of God in producing damage and injury to another; nonetheless, showing that the immediate or proximate cause of the damage or injury was a fortuitous event would not exempt one from liability. When the effect is found to be partly the result of a persons participation whether by active intervention, neglect or failure to act the whole occurrence is humanized and removed from the rules applicable to acts of God. xxx xxx xxx
Article 1174 of the Civil Code states that no person shall be responsible for a fortuitous event that could not be foreseen or, though foreseen, was inevitable. In other words, there must be an exclusion of human intervention from the cause of injury or loss. Assuming arguendo that fortuitous circumstances prevented RCPI from delivering the telegram at the soonest possible time, it should have at least informed Grace for the non-transmission and the non-delivery so that the she could have taken steps to remedy the situation. But it did not. There lies the fault or negligence. In an earlier case also involving RCPI, this Court held: Considering the public utility of RCPIs business and its contractual obligation to transmit messages, it should exercise due negligence to ascertain that messages are delivered to the persons at the given address and should provide a system whereby in cases of undelivered messages the sender is given notice of non-delivery. Messages sent by cable or wireless means are usually more important and urgent than those which can wait for the mail. xxx xxx xxx
People depend on telecommunications companies in times of deep emotional stress or pressing financial needs. Knowing that messages about the illnesses or deaths of loved ones, births or marriages in a family, important business transactions, and notices of conferences or meetings as in this case, are coursed through the petitioner and similar corporations, it is incumbent upon them to exercise a greater amount of care and concern than that shown in this case. Every reasonable effort to inform senders of the non-delivery of messages should be undertaken. RCPI argues, however, against the presence of urgency in the delivery of the telegram, as well as the basis for the award of moral damages. xxx RCPIs arguments fail. For it is its breach of contract upon which its liability is, it bears repeating, anchored. Since RCPI breached its contract, the presumption is that it was at fault or negligent. It, however, failed to rebut this presumption. For breach of contract then, RCPI is liable to Grace for damages. (d) Moral damages and attorneys fees Respecting the assailed award of moral damages, a determination of the presence of the following requisites to justify the award is in order: xxx firstly, evidence of besmirched reputation or physical, mental or psychological suffering sustained by the claimant; secondly, a culpable act or omission factually established; thirdly, proof that the wrongful act or omission of the defendant is the proximate cause of damages sustained by the claimant; and fourthly, that the case is predicated on any of the instances expressed or envisioned by Article 2219 and Article 2220 of the Civil Code. Respecting the first requisite, evidence of suffering by the plaintiffs-herein respondents was correctly appreciated by the CA in this wise:
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The failure of RCPI to deliver the telegram containing the message of appellees on time, disturbed their filial tranquility. Family members blamed each other for failing to respond swiftly to an emergency that involved the life of the late Mrs. Verchez, who suffered from diabetes. As reflected in the foregoing discussion, the second and third requisites are present. On the fourth requisite, Article 2220 of the Civil Code provides: 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. After RCPIs first attempt to deliver the telegram failed, it did not inform Grace of the non-delivery thereof and waited for 12 days before trying to deliver it again, knowing as it should know that time is of the essence in the delivery of telegrams. When its second long-delayed attempt to deliver the telegram again failed, it, again, waited for another 12 days before making a third attempt. Such nonchalance in performing its urgent obligation indicates gross negligence amounting to bad faith. The fourth requisite is thus also present. In applying the above-quoted Article 2220, this Court has awarded moral damages in cases of breach of contract where the defendant was guilty of gross negligence amounting to bad faith, or in wanton disregard of his contractual obligation. As for RCPIs tort-based liability, Article 2219 of the Civil Code provides: Moral damages may be recovered in the following and analogous cases: xxx xxx xxx
(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35. Article 26 of the Civil Code, in turn, provides: Every person shall respect the dignity, personality, privacy and peace of mind of his neighbors and other persons. The following and similar acts, though they may not constitute a criminal offense, shall produce a cause of action for damages, prevention, and other relief: xxx xxx xxx
(2) Meddling with or disturbing the private life or family relations of another. RCPIs negligence in not promptly performing its obligation undoubtedly disturbed the peace of mind not only of Grace but also her co-respondents. As observed by the appellate court, it disrupted the filial tranquility among them as they blamed each other for failing to respond swiftly to an emergency. The tortuous acts and/or omissions complained of in this case are, therefore, analogous to acts mentioned under Article 26 of the Civil Code, which are among the instances of quasi-delict when courts may award moral damages under Article 2219 of the Civil Code. In fine, the award to the plaintiffs-herein respondents of moral damages is in order, as is the award of attorneys fees, respondents having been compelled to litigate to protect their rights. (e) Contract of Adhesion Clutching at straws, RCPI insists that the limited liability clause in the Telegram Transmission Form is not a contract of adhesion. Thus it argues: Neither can the Telegram Transmission Form be considered a contract of adhesion s held by the respondent court. The said stipulations were all written in bold letters right in front of the Telegram Transmission Form. As a matter of fact they were beside the space where the telegram senders write their telegraphic messages. It would have been different if the stipulations were written at the back for surely there is no way the sender will easily notice them. The fact that the stipulations were located in a particular space where they can easily be seen, is sufficient notice to any sender (like Grace Verchez-Infante) where she could manifest her disapproval, leave the RCPI station and avail of the services of the other telegram operators. RCPI misunderstands the nature of a contract of adhesion. Neither the readability of the stipulations nor their physical location in the contract determines whether it is one of adhesion. A contract of adhesion is defined as one in which one of the parties imposes a ready-made form of contract, which the other party may accept or reject, but which the latter cannot modify. One party prepares the stipulation in the contract, while the other party merely affixes his signature or his adhesion thereto, giving no room for negotiation and depriving the latter of the opportunity to bargain on equal footing.
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While a contract of adhesion is not necessarily void and unenforceable, since it is construed strictly against the party who drafted it or gave rise to any ambiguity therein, it is stricken down as void and unenforceable or subversive of public policy when the weaker party is imposed upon in dealing with the dominant bargaining party and is reduced to the alternative of taking it or leaving it, completely deprived of the opportunity to bargain on equal footing. This Court holds that the Court of Appeals finding that the parties contract is one of adhesion which is void is, given the facts and circumstances of the case, thus well-taken. (RCPI v. Verchez, G.R. No. 164349, January 31, 2006) 9. (a) Is good faith material in determining the validity of a contract? Ans: No. Petitioners claim of good faith is of no moment. The good faith of a party in entering into a contract is immaterial in determining whether it is valid or not. Good faith, not being an essential element of a contract, has no bearing on its validity. No amount of good faith can validate an agreement which is otherwise void. A contract which the law denounces as void is necessarily no contract at all and no effort or act of the parties to create one can bring about a change in its legal status. (Ballesteros v. Abion, G.R. No. 143361, February 9, 2006
(b) A lease contract entered into by the son of the former owner is void. Ans: Under the principle of relativity of contracts, the sale of the property by Dr. Vargas to respondent bound Ronald Vargas as an heir of the seller. Neither did respondents authorize him to enter into a new lease contract with petitioner. Thus, Ronald Vargas could not have validly executed the second lease agreement upon which petitioner now bases his right to the continued possession of the property. (Ibid)
(c) What is the effect of registration of a void contract? Ans: Petitioners third argument is likewise without merit. Whether the second lease contract was registered or not was immaterial since it was void. Registration does not legitimize a void contract. (Ibid)
(d) What is required for validity of registration of an instrument? Ans: Annotation on the owners duplicate original copy and on the original copy of the title. Mere entry in the primary Book is not enough. It is well settled that for the registration of voluntary instrument (e.g., deed of sale or contract of lease), it is necessary not only to register the deed, instrument of assignment, mortgage or lease in the entry book of the register of deeds but also for the Register of Deeds to annotate a memorandum thereof on the owners duplicate certificate and its original. In voluntary registration, if the owners duplicate certificate is not surrendered and presented or if no payment of registration fees is made within fifteen days, entry in the day book will not convey or affect the land sold, mortgaged or leased. Entry alone produces the effect of registration, whether the transaction entered is voluntary or involuntary, so long as the registrant has complied with all that is required of him for purposes of entry and annotation, and nothing more remains to be done but a duty incumbent solely on the Register of Deeds. Here, petitioner admits that the second lease contract was refused registration by the Register of Deeds for his failure to comply with certain conditions for registration. And since petitioner failed to comply with all the requisites for entry and annotation, the entry in the primary book did not ripen into registration. (Ibid) 10. Is a contract of sale perfected if there is an agreement as to the price but its manner of payment is left for future negotiation? Ans: No. It is not enough for the parties to agree on the price of the property. The parties must also agree on the manner of payment of the price of the property to give rise to a binding and enforceable contract of sale or contract to sell. This is so because the agreement as to the manner of payment goes into the price, such that a disagreement on the manner of payment is tantamount to a failure to agree on the price. In a contract to sell property by installments, it is not enough that the parties agree on the price as well as the amount of downpayment. The parties must, likewise, agree on the manner of payment of the balance of the purchase price and on the other terms and conditions relative to the sale. Even if the buyer makes a downpayment or portion thereof, such payment cannot be considered as sufficient proof of the perfection of any purchase and sale between the parties. (Bank of Commerce v. Manalo, G.R. No. 158149, February 9, 2006)
11. What is a purchase money resulting trust?

Ans: Article 1448 of the Civil Code on implied trust provides: Art. 1448. There is an implied trust when property is sold, and the legal estate is granted to one party but the price is paid by another for the purpose of having the
beneficial interest of the property. The former is the trustee, while the latter is the beneficiary. However, if the person to whom the title is conveyed is a child, legitimate or illegitimate, of the one paying the price of the sale, no trust is implied by law, it being disputably presumed that there is a gift in favor of the child. The trust created under the first sentence of Article 1448 is sometimes referred to as a purchase money resulting trust, the elements of which are: (a) an actual payment of money, property or services, or an equivalent, constituting valuable consideration; and (b) such consideration must be furnished by the alleged beneficiary of a resulting trust. (Comilang v. Burcena, G.R. No. 146853, February 13, 2006) 12. What is the prescriptive period for reconveyance based on fraud? Four (4) years from discovery of the fraud. Based on implied trust? Ten (10) years from registration of title. Ans: Generally, an action for reconveyance of real property based on fraud prescribes in four years from the discovery of fraud; such discovery is deemed to have taken place upon the issuance of the certificate of title over the property. Registration of real property is a constructive notice to all persons and, thus, the four-year period shall be counted therefrom. In the case at bar, respondents action which is for Reconveyance and Cancellation of Title is based on an implied trust under Art. 1456 of the Civil Code since he averred in his complaint that through fraud petitioners were able to obtain a Certificate of Title over the property. he does not seek the annulment of a viodable contract whereby Articles 1390 and 1391 of the Civil Code would find application such that the cause of action would prescribe in four years. An action for reconveyance based on implied or constructive trust prescribes in ten years from the alleged fraudulent registration or date of issuance of the certificate of title over the property. The four-year prescriptive period relied upon by the petitioners apply only if the complaint seeks to annul a voidable contract under Article 1390 of the Civil code. In such case, the fouryear prescriptive period under Article 1391 begins to run from the time of discovery of the mistake, violence, intimidation, undue influence or fraud. (Crisostomo v. Garcia, Jr., G.R. No. 164787, January 31, 2006) 13. What is the principle of indefeasibility of title? Ans: It is well settled that a Torrens title cannot be collaterally attacked; the issue on the validity of title, i.e., whether or not it was fraudulently issued, can only be raised in an action expressly instituted for the purpose. Hence, whether or not respondents have the right to claim title over the property in question is beyond the province of the instant proceeding. That should be threshed out in a proper action. It has been invariably stated that the real purpose of the Torrens System is to quiet title to land and to stop forever any question s to its legality. Once a title is registered, the owner may rest secure, without the necessity of waiting in the portals of the court, or sitting on the mirador su casa to avoid the possibility of losing his land. A decree of registration that has become final shall be deemed conclusive not only on the questions actually contested and determined, but also upon all matters that might be litigated or decided in the land registration proceedings. (Fil-Estate Management, Inc. v. Trono, G.R. No. 130871, February 17, 2006) 14. (a) May ownership of a titled property be contested? Ans: Yes, through an action for reconveyance. True, a certificate of title, once registered, should not thereafter be impugned, altered, changed, modified, enlarged or diminished except in a direct proceeding permitted by law. Moreover, Section 32 of Presidential Decree No. 1529 provides that upon the expiration of said period of one year, the decree of registration and the certificate of title shall become incontrovertible. However, it does not deprive an aggrieved party of a remedy in law. What cannot be collaterally attacked is the certificate of title and not the title or ownership which is represented by such certificate. Ownership is different from a certificate of title. The fact that petitioner was able to secure a title in her name did not operate to vest ownership upon her of the subject land. Registration of a piece of land under the Torrens System does not create or vest title, because it is not a mode of acquiring ownership. A certificate of title is merely an evidence of ownership or title over the particular property described therein. It cannot be used to protect a usurper from the true owner; nor can it be used as a shield for the commission of fraud; neither does it permit one to enrich himself at the expense of others. Its issuance in favor of a particular person does not foreclose the possibility that the real property may be co-owned with persons not named in the certificate, or that it may be held in trust for another person by the registered owner. Notwithstanding the indefeasibility of the Torrens title, the registered owner may still be compelled to reconvey the registered property to its true owner. The rationale for the rule is that reconveyance does not set aside or re-subject to review the findings of fact of the Bureau of
Lands. In an action for reconveyance, the decree of registration is respected as incontrovertible. What is sought instead is the transfer of the property or its title which has been wrongfully or erroneously registered in another persons name, to its rightful or legal owner, or to the one with a better right. (Naval vs. CA, G.R. No. 167412, February 22, 2006) (b) When is an action for reconveyance imprescriptible? Ans: An action for reconveyance does not prescribe when the plaintiff is in possession of the land to be reconveyed, as in this case. Similarly, in the case of David v. Malay, the same pronouncement was reiterated by the Court: . . . There is settled jurisprudence that one who is in actual possession of a piece of land claiming to be owner thereof may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right, the reason for the rule being, that his undisturbed possession gives him a continuing right to seek the aid of the court of equity to ascertain and determine the nature of the adverse claim of a third party and its effect on his own title, which right can be claimed only by one who is in possession. No better situation can be conceived at the moment for Us to apply this rule on equity than that of herein petitioners whose . . . possession of the litigated property for no less than 30 years and was suddenly confronted with a claim that the land she had been occupying and cultivating all these years, was titled in the name of a third person. We hold that in such a situation the right to quiet title to the property, to seek its reconveyance and annul any certificate of title covering it, accrued only from the time the one in possession was made aware of a claim adverse to his own, and it is only then that the statutory period of prescription commences to run against such possessor. The paramount reason for this exception is based on the theory that registration proceedings could not be used as a shield for fraud. Moreover, to hold otherwise would be to put premium on land-grabbing and transgressing the broader principle in human relations that no person shall unjustly enrich himself at the expense of another. (Ibid) 15. (a) What is the liability of an employer for quasi-delict committed by his driver? Ans: Solidary. As the employer of Gerosano, petitioner is primarily and solidarily liable for the quasidelict committed by the former. Petitioner is presumed to be negligent in the selection and supervision of his employee by operation of law and may be relieved of responsibility for the negligent acts of his driver, who at the time was acting within the scope of his assigned task, only if he can show that he observed all the diligence of a good father of a family to prevent damage. (Estacion v. Bernardo, G.R. No. 144723, February 27, 2006)
(b) Explain the concept of diligence of a good father of the family. Ans: In Yambao v. Zuniga (418 SCRA 273-274 [2003]), we have clarified the meaning of the diligence of a good father of a family, thus: The diligence of a good father referred to in the last paragraph of the aforecited statute means diligence in the selection and supervision of employees. Thus, when an employee, wile performing his duties, causes damage to persons or property due to his own negligence, there arises the juris tantum presumption that the employer is negligent, either in the selection of the employee or in thesupervision over him after the selection. For the employer to avoid the solidary liability for a tort committed by his employee, an employer must rebut the presumption by presenting adequate and convincing proof that in the selection and supervision of his employee, he or she exercises the care and diligence of a good father of a family. Case law teaches that for an employer to have exercised the diligence of a good father of a family, he should not be satisfied with the applicants mere possession of a professional drivers license; he must also carefully examine the applicant for employment as to his qualifications, his experience and record of service. In sum, petitioners liability to private respondents for the negligent and imprudent acts of her driver, Venturina, under Article 2180 of the Civil Code is both manifest and clear. Petitioner, having failed to rebut the legal presumption of negligence in the election and supervision of her driver, is responsible for damages, the basis of the liability being the relationship of pater familias or on the employers own negligence. (Ibid) (c) Contributory negligence. When the plaintiffs own negligence was the immediate and proximate cause of his injury, he cannot recover damages. But if his negligence was only contributory, the immediate and proximate cause of the injury being the defendants lack of due care, the plaintiff may recover damages, but the courts shall mitigate the damages to be awarded.
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The underlying precept of the above article on contributory negligence is that a plaintiff who is partly responsible for his own injury should not be entitled to recover damages in full but must bear the consequences of his own negligence. The defendant must thus be held liable only for the damages actually caused by his negligence. In the present case, taking into account the contributing negligence of respondent Noe, we likewise rule that the demands of substantial justice are satisfied by distributing the damages also on a 20-80 ratio excluding attorneys fees and litigation expenses. (Ibid)
16. Define solutio indebiti.

Ans: There is solutio indebiti where (1) payment is made when there exists no binding relation between the payor, who has no duty to pay, and the person who received the payment; and (2) the payment is made through mistake, and not through liberality or some other cause xxx. The quasi-contract of solutio indebiti is based on the ancient principle that no one shall enrich himself unjustly at the expense of another. (BPI v. Sarmiento, G.R. No. 146021, March 10, 2006)
17. What is the concept of psychological incapacity under Art. 36 of the Family Code as a ground for nullity of marriage? Ans: Article 36 of the Family Code states that [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, shall likewise be void even if such incapacity becomes manifest only after its solemnization. The concept of psychological incapacity as a ground for nullity of marriage is novel in our body of laws, although mental incapacity has long been recognized as a ground for the dissolution of a marriage. Such cause for the annulment of marriage is recognized as a vice of consent, just like insanity impinges on consent freely given which is one of the essential requisites of a contract. The initial common consensus on psychological incapacity under Article 36 of the Family Code was that it did not constitute a specie of vice of consent. Justices Sempio-Diy and Caguioa, both members of the Family Code revision committee that drafted the Code, have opined that psychological incapacity is not a vice of consent, and conceded that the spouse may have given free and voluntary consent to a marriage but was nonetheless incapable of fulfilling such rights and obligations. Dr. Tolentino likewise stated in the 1990 edition of his commentaries on the Family Code that this psychological incapacity to comply with the essential marital obligations does not affect the consent to the marriage. We stated earlier that Molina (Republic v. Court of Appeals, 335 Phil. 664 [1997], also known Molina case) is not sent in stone, and that the interpretation of Article 36 relies heavily on a caseto-case perception. It would be insensate to reason to mandate in this case an expert medical or clinical diagnosis of incurability, since the parties would have had no impeling cause to present evidence to that effect at the time this case was tried by the RTC more than ten (10) years ago. From the totality of the evidence, we are sufficiently convinced that the incurability of respondents psychological incapacity has been established by the petitioner. Any lingering doubts are further dispelled by the fact that the Catholic Church tribunals, which indubitably consider incurability as an integral requisite of psychological incapacity, were sufficiently convinced that respondent was so incapacitated to contract marriage to the degree that annulment was warranted. (Antonio v. Reyes, G.R. No. 155800, March 10, 2006) 18. State the concept of indivisibility of a real estate mortgage. Ans: The rule on indivisibility of a real estate mortgage is provided for in Article 2089 of the Civil Code. This rule presupposes several heirs of the debtor or creditor and therefore not applicable to the present case. Furthermore, what the law proscribes is the foreclosure of only a portion of the property or a number of the several properties mortgaged corresponding to the unpaid portion of the debt where, before foreclosure proceedings, partial payment was made by the debtor on his total outstanding loan or obligation. This also means that the debtor cannot ask for the release of any portion of the mortgaged property or of one or some of the several lots mortgaged unless and until the loan thus secured has been fully paid, notwithstanding the fact that there has been partial fulfillment of the obligation. Hence, it is provided that the debtor who has paid a part of the debt cannot ask for the proportionate extinguishment of the mortgage as long as the debt is not completely satisfied. In essence, indivisibility means that the mortgage obligation cannot be divided among the different lots, that is, each and every parcel under mortgage answers for the totality of the debt.
19. Ramirez vs. Ramirez, G.R. No. 165088, March 17, 2006
Doctrine of pari delicto is applicable to donation. As one of the modes of acquiring ownership, donations are governed by Title 3, Book III, of the Civil Code. Donations inter vivos are additionally governed by the general provisions on obligations and contracts in all that is not determined by the title government donations. Hence, the rule on pari delicto under the general provisions of contracts is applicable to the present case.
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The Court agrees with the rulings of the CA and the RTC that petitioner and respondent are in pari delicto. Nevertheless, both courts erred on the applicable law. Article 1412 of the Civil Code, which they applied, refers to a situation where the cause of the contract is unlawful or forbidden but does not constitute a violation of the criminal laws. Petitioner wrongly asserts that the donated real properties are both the object and cause of the donation. In fact, the donated properties pertain only to the object. Therefore, while he is correct in stating that the object of the donation is legal, his argument misses the point insofar as the cause is concerned. The cause which moved the parties to execute the Deed of Donation and the Waiver of Possessory Rights, the motive behind the forgery, is the desire to evade the payment of publication expenses and inheritance taxes, which became due upon the death of Dolores. Undeniably, the Deed of Donation and the Waiver of Possessory Rights were executed for an illegal cause, thus completing all the requisites for the application of Article 1411. Both petitioner and respondent are, therefore, in pari delicto. 20. Distinguish between absolute and relative simulation of contract. Ans: Article 1345 of the Civil Code provides that the simulation of a contract may either be absolute or relative. In absolute simulation, there is a colorable contract but it has no substance as the parties have no intention to be bound by it. The main characteristic of an absolute simulation is that the apparent contract is not really desired or intended to produce legal effect or in any way alter the juridical situation of the parties. As a result, an absolutely simulated or fictitious contract is void, and the parties may recover from each other what they may have given under the contract. However, if the parties state a false cause in the contract to conceal their real agreement, the contract is relatively simulated and the parties are still bound by their real agreement. Hence, where the essential requisites of a contract are present and the simulation refers only to the content or terms of the contract, the agreement is absolutely binding and enforceable between the parties and their successors in interest. In the case at bar, the records reveal that the clear intent of Narciso Valerio in executing the 1975 Deed of Sale was to transfer ownership of the apportioned areas of his 6.5-hectares land to petitioners as his heirs and to his tenant Alejandro. Although, no monetary consideration was received by landowner Narciso from any of the vendees, it cannot be said that the contract was not supported by a cause or consideration or that Narciso never intended to transfer ownership thereof. Indeed, the primary consideration in determining the true nature of a contract is the intention of the parties. If the words of a contract appear to contravene the evident intention of the parties, the latter shall prevail. Such intention is determined not only from the express terms of their agreement, but also from the contemporaneous and subsequent acts of the parties. (Valerio v. Refresca, G.R. No. 163687, March 28, 2006) 21. Psychological incapacity under Art. 36 of the Family Code Prefatorily, it bears stressing that it is the policy of our Constitution to protect and strengthen the family as the basic autonomous social institution and marriage as the foundation of the family. Our family law is based on the policy that marriage is not a mere contract, but a social institution in which the state is vitally interested. The State can find no stronger anchor than on good, solid and happy families. The break up of families weakens our social and moral fabric and, hence, their preservation is not the concern alone of the family members. In this regard, Article 48 of the Family Code mandates: ART. 48. 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 the evidence is not fabricated or suppressed. In the cases referred to in the preceding paragraph, no judgment shall be based upon a stipulation of facts or confession of judgment. Similarly, Section 6 of Rule 18 of the 1985 Rules of Court, the rule then applicable, provides: Sec. 6. No defaults in actions for annulment of marriage or for legal separation If the defendant in an action for annulment of marriage or for legal separation fails to answer, the court shall order the prosecuting attorney to investigate whether or not a collusion between the parties exists, and if there is no collusion, to intervene for the State in order to see to it that the evidence submitted is not fabricated. xxx In this case, the State did not actively participate in the prosecution of the case at the trial level. Other than the Public Prosecutors Manifestation that no collusion existed between the contending
parties and the brief cross-examination which had barely scratched the surface, no pleading, motion or position paper was filed by the Public Prosecutor or the OSG. The State should have been given the opportunity to present controverting evidence before the judgment was rendered. Truly, only the active participation of the Public Prosecutor or the OSG will ensure that the interest of the State is represented and protected in proceedings for annulment and declaration of nullity of marriages by preventing collusion between the parties, or the fabrication or suppression of evidence. Be that as it may, the totality of evidence presented by Norma is completely insufficient to sustain a finding that Eulogio is psychologically incapacitated. In Santos v. Court of Appeals, the Court declared that psychological incapacity must be characterized by (a) gravity, (b) juridical antecedence, and (c) incurability. It should refer to no less than a mental, not physical, incapacity that causes a party to be truly incognitive of the basic marital covenants that concomitantly must be assumed and discharged by the parties to the marriage. The intendment of the law has been to confine the meaning of psychological incapacity to the most serious cases of personality disorders clearly demonstrative of an utter insensitivity or inability to give meaning and significance to the marriage. Subsequently, the Court laid down in Republic of the Philippines v. Molina, the guidelines in the interpretation and application of Article 36 of the Family Code, x x x. xxx Later, the Court clarified in Marcos v. Marcos (397 SCRA 840 [2000]) that there is no requirement that the defendant/respondent spouse should be personally examined by a physician or psychologist as a condition sine qua non for the declaration of nullity of marriage based on psychological incapacity. Such psychological incapacity, however, must be established by the totality of the evidence presented during the trial. In the present case, Norma alone testified in support of her complaint for declaration of nullity for her marriage under Article 36 of the Family Code. She failed to establish the fact that at the time they were married, Eulogio was already suffering from a psychological defect which in fact deprived him of the ability to assume the essential duties of marriage and its concomitant responsibilities. In fact, Norma admitted in her testimony that her marital woes and Eulogios disagreeable behavior started only after the birth of their firstborn and when Eulogio lost his job. Further, no other evidence was presented to show that Eulogio was not cognizant of the basic marital obligations as outlined in Articles 68 to 72, 220, 221 and 225 of the Family Code. It was not sufficiently proved that Eulogio was really incapable of fulfilling his duties due to some incapacity of a psychological nature, and not merely physical. The Court cannot presume psychological defect from the mere fact of Eulogios immaturity, habitual alcoholism, unbearable jealousy, maltreatment, constitutional laziness, and abandonment of his family. These circumstances by themselves cannot be equated with psychological incapacity within the contemplation of the Family Code. It must be shown that these acts are manifestations of a disordered personality which make Eulogio completely unable to discharge the essential obligations of the marital state. At best, the circumstances relied upon by Norma are grounds for legal separation under Article 55 of the Family Code. As the Court ruled in Republic of the Philippines v. Molina, it is not enough to prove that a spouse failed to meet his responsibility and duty as a married person, it is essential that he must be shown to be incapable of doing so due to some psychological, not physical, illness. There was no proof of a natal or supervening disabling factor in the person, an adverse integral element in the personality structure that effectively incapacitates a person from accepting and complying with the obligations essential to marriage. All told, in order that the allegation of psychological incapacity may not be considered a mere fabrication, evidence other than Normas lone testimony should have been adduced. While an actual medical, psychiatric or psychological examination is not a conditio sine qua non to a finding of psychological incapacity, as expert witness would have strengthened Normas claim of Eulogios alleged psychological incapacity. Normas omission to present one is fatal to her position. There can be no conclusion of psychological incapacity where there is absolutely no showing that the defects were already present at the inception of the marriage or that they are incurable. (Republic v. Melgar, G.R. No. 139676, March 31, 2006) 22. (a) What are the requisites of novation as a mode of extinguishing an obligation? Ans: The cancellation of the old obligation by the new one is a necessary element of novation which may be effected either expressly or impliedly. Wheelie there is really no hard and fast rule to determine what might constitute sufficient change resulting in novation, the touchstone, however, is irreconcilable incompatibility between the old and new obligations. Thus, the well-settled rule is that, with respect to obligations to pay a sum of money, the obligation is not novated by an instrument that expressly recognized the old, changes only the terms of payment, adds other obligations not incompatible with the old ones, or the new contract merely supplements the old one. (Sps. Reyes vs. BPI Family Savings Bank, Inc., G.R Nos. 149840-41, March 31, 2006)
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(b) Contract of Adhesion is not null and void per se. Petitioners voluntarily executed the real estate mortgage on their property in favor of BPI-FSB to secure the P15M loan of Transbuilders. They cannot now be allowed to repudiate their obligation to the bank after Transbuilders default. While petitioners liability was written in fine print and in a contract prepared by BPI-FSB, it has been the consistent holding of this Court that contracts of adhesion are not invalid per se on numerous occasions, we have upheld the binding effects of such contracts. (Ibid) 23. Perfection of Contract of Sale by public bidding is upon receipt of notice of award by the bidder. Article 1318 of the New Civil Code provides that there is no contract unless the following requisites concur: (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. Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. An offer is the manifestation of willingness to enter into a bargain in such a way as to justify the other process in understanding that an assessment will conclude the agreement. An offer ripens into a contract when it is accepted. The offer must be certain and the acceptance absolute. Thus, a bid at an auction constitutes an offer to buy. Where, as in this case, the seller reserved the right to refuse to accept any bid made, a binding sale is not perfected until the seller accepts the bid. The seller may exercise his right to reject any bid even after the auctioneer has accepted a bid. The mere determination of a public official bound to accept the offer or a proposal of a bidder does not constitute a contract. The awardee is not obliged to make payment for the property bid until after notice to the awardee. It is only when the awardee receives the notice of award that a contract of sale is perfected between the bidder and the seller. (Caugma v. People, G.R. No. 167048, April 7, 2006) 24. (a) Requirements for valid attestation clause. (1) State the number of pages on which the will is written. (2) Signed by the instrumental witnesses
(3) Must contain an acknowledgment, not a mere jurat.

A will whose attestation clause does not contain the number of pages on which the will is written is fatally defective. A will whose attestation clause is not signed by the instrumental witnesses is fatally defective. And perhaps most importantly a will which does not contain an acknowledgment, but a mere jurat, is fatally defective. Any one of these defects is sufficient to deny probate. A notarial will with all three defects is just aching for judicial rejection. (Azuela v. Court of Appeals, G.R. No. 122880, April 12, 2006) (b) What is the purpose of requiring the attestation clause to state the number of pages on which the will is written? Ans: The failure of the attestation clause to state the number of pages on which the will was written remains a fatal flaw, despite Article 809. The purpose of the law in requiring the clause to state the number of pages on which the will is written is to safeguard against possible interpolation or omission of one or some of its pages and to prevent any increase or decrease in the pages. The failure to state the number of pages equates with the absence of an avernment on the part of the instrumental witnesses as to how many pages consisted the will, the execution of which they had ostensibly just witnesses and subscribed to. Following Caneda, there is substantial compliance with this requirement if the will states elsewhere in it how many pages it is comprised of, as was the situation in Singson and Taboada. However, in this case, there could have been no substantial compliance with the requirement under Article 805 since there is no statement in the attestation clause or anywhere in the will itself as to the number of pages which comprise the will. (Ibid)
(c) Which must the attestation clause be signed in addition to the signature on the left hand corner on each page of the will? Ans: Article 805 particularly segregates the requirement that the instrumental witnesses sign each page of the will, from the requisite that the will be attested and subscribed by [the instrumental witnesses]. The respective intents behind these two classes of signature are distinct from each other. The signatures on the left-hand corner of every page signify, among others, that the witnesses are aware that the page they are signing forms part of the will. On the other hand, the signatures to the attestation clause establish that the witnesses are referring to the statements
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contained in the attestation clause itself. Indeed, the attestation clause is separate and apart from the disposition of the will. An unsigned attestation clause results in an unattested will. Even if the instrumental witnesses signed the left-hand margin of the page containing the unsigned attestation clause, such signatures cannot demonstrate these witnesses undertakings in the clause, since the signatures that do appear on the page were directed towards a wholly different avowal. Without diminishing the value of the instrumental witnesses signatures on each and every page, the fact must be noted that it is the attestation clause which contains the utterances reduced into writing of the testamentary witnesses themselves. It is the witnesses, and not the testator, who are required under Article 805 to state the number of pages used upon which the will written; the fact that the testator had signed the will and every page thereof; and that they witnessesed and signed the will and all the pages thereof in the presence of the testator and of one another. The only proof in the will that the witnesses have stated these elemental facts would be their signatures on the attestation clause. Thus, the subject will cannot be considered to have been validly attested to by the instrumental witnesses, as they failed to sign the attestation clause. (Ibid) (d) What is the purpose of acknowledgment of a will? Ans The acknowledgment made in a will provides for another all-important legal safeguard against spurious wills or those made beyond the free consent of the stator. An acknowledgment is not an empty meaningless act. The acknowledgment coerces the testator and the instrumental witnesses to declare before an officer of the law that they had executed and subscribed to the will as their own free act or deed. Such declaration is under oath and under pain of perjury, thus allowing for the criminal prosecution of persons who participate in the execution of spurious wills, or those executed without the free consent of the testator. It also provides a further degree of assurance that the testator is of certain mindset in making the testamentary dispositions to those persons he/she had designated in the will. A notarial will that is not acknowledged before a notary public by the testator and the witnesses is fatally defective, even if it is subscribed and sworn to before a notary public. (Ibid) 25. (a) State the concept of quieting of title and its requisites. Ans: In an action for quieting of title, the court is tasked to determine the respective rights of the parties so that the complainant and those claiming under him may be forever free from any danger of hostile claim. Under Article 476 of the Civil Code, the remedy may be availed of only when, by reason of any instrument, record, claim, encumbrance or proceeding, which appears valid but is, in fact, invalid, ineffective, voidable or unenforceable, a cloud is thereby cast on the complainants title to real property or any interest therein. Article 477 of the same Code states that the plaintiff must have legal or equitable title to, or interest in the real property which is the subject matter of the suit. For an action to quiet title to prosper, two indispensable requisites must concur, namely: (1) the plaintiff or complainant has a legal or an equitable title to or interest in the real property subject of the action; and (2) the deed, claim, encumbrance or proceeding claimed to be casting cloud on his title must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or legal efficacy. In Evangelista v. Santiago (457 SCRA 744, 766 [2005]), it was held that title to real property refers to that upon which ownership is based. It is the evidence of the right of the owner or the extent of his interest, by which means he can maintain control and, as a rule, assert a right to exclusive possession and enjoyment of the property. (Rumarate v. Hernandez, G.R. No. 168222, April 18, 2006) (b) What is the prescriptive period for quieting of title? Ans: None. The settled rule is that an action for quieting of title is imprescriptible, as in the instant case, where the person seeking relief is in possession of the disputed property. A person in actual possession of a piece of land under claim of ownership may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right, and that his undisturbed possession gives him the continuing right to seek the aid of a court of equity to ascertain and determine the nature of the adverse claim of a third party and its effect on his title. Considering that petitioners herein continuously possessed Lot No. 379 since 1929 up to the present, their right to institute a suit to clear the cloud over their title cannot be barred by the statute of limitations. (Ibid)
(c) What is the concept of laches? State its requisites. Ans: The failure or neglect, for an unreasonable length of time to do that which by exercising due diligence could or should have been done earlier constitutes laches. It is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it has either abandoned it or declined to assert it. While it is by express provision of law that no title to registered land in derogation of that of the registered owner shall be acquired by
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prescription or adverse possession, it is likewise an enshrined rule that even a registered owner may be barred from recovering possession of property by virtue of laches. The elements of laches are: (1) conduct of a party on the basis of which the other party seeks a remedy; (2) delay in asserting ones rights, despite having had knowledge or notice of the other partys conduct and having been afforded an opportunity to institute a suit; (3) lack of knowledge or notice on the part of a party that a person against whom laches is imputed would assert the right; and (4) injury or prejudice to the party asserting laches in the event the suit is allowed to prosper. (Ibid) 26. Define trust, and each kind of trust. Ans: A trust is the legal relationship between one person having an equitable ownership in property and another person owning the legal title to such property, the equitable ownership of the former entitling him to the performance of certain duties and the exercise of certain powers by the latter. Trusts are either express or implied. Express trusts are created by the intention of the trustor or of the parties, while implied trusts come into being by operation of law, either through implication of an intention to create a trust as a matter of law or through the imposition of the trust irrespective of, and even contrary to, any such intention. In turn, implied trusts are either resulting or constructive trusts. Resulting trusts are based on the equitable doctrine that valuable consideration and not legal title determines the equitable title or interest and are presumed always to have been contemplated by the parties. They arise from the nature or circumstances of the consideration involved in a transaction whereby one person thereby becomes invested with legal title but is obligated in equity to hold his legal title for the benefit of another. (Pigao v. Rabanillo, G.R. No. 150712, May 2, 2006) 27. (a) Define default (mora solvendi). Ans: Mora solvendi, or debtors default, is defined as a delay in the fulfillment of an obligation, by reason of a cause imputable to the debtor. There are three requisites necessary for a finding of default. First, the obligation is demandable and liquidated; second, the debtor delays performance; third, the creditor judicially or extrajudicially requires the debtors performance. (Selegna Management & Devt. Corp. v. UCPB, G.R. No. 165662, May 3, 2006)
(b) Mortgagor is entitled to the surplus in the bid price, in the same way he is liable for deficiency. 28. Define compensation as a mode of extinguishing obligation. Enumerate its requisites. Ans: The Court has expounded on compensation and more specifically on legal compensation as follows: x x x compensation is a mode of extinguishing to the concurrent amount the obligations of persons who in their own right and as principals are reciprocally debtors and creditors of each other. Legal compensation takes place by operation of law when all the requisites are present, as opposed to conventional compensation which takes place when the parties agree to compensate their mutual obligations even in the absence of some requisites. The Civil Code enumerates the requisites of legal compensation, thus: Art. 1278. Compensation shall take place when two persons, in their own right, are creditors and debtors of each other. Art. 1279. In order that compensation may be proper, it is necessary: (1) That each one of the obligors be bound principally, and that he be at the same time a principal creditor of the other; (2) That both debts consist in a sum of money, or if the things due are consumable, they be of the same kind, and also of the same quality if the latter has been stated; (3) That the two debts be due; (4) That they be liquidated and demandable; (5) That over neither of them there be any retention or controversy, commenced by third persons and communicated in due time to the debtor. (BPI vs. CA, 490 SCRA 178, June 8, 2006, Azcuna - Ponente)
29. (a) Define Laches.

Ans: Laches has been defined as such neglect or omission to assert a right, taken in conjunction with the lapse of time and other circumstances causing prejudice to an adverse party, as will operate
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as a bar in equity. It is a delay in the assertion of a right which works disadvantage to another because of the inequity founded on some change in the condition or relations of the property or parties. It is based on public policy which, for the peace of society, ordains that relief will be denied to a stale demand which otherwise could be a valid claim. Laches means the failure or neglect for an unreasonable and unexplained length of time, to do that which, by exercising due diligence, could or should have been done earlier; it is negligence or omission to assert a right within a reasonable time, warranting the presumption that the party entitled to assert it either has abandoned or declined to assert it. (Heirs of Dicman vs. Cario, 490 SCRA 267, 268, June 8, 2006) (b) Distinguish laches from prescription. Ans: It is different from and applies independently of prescription. While prescription is concerned with the fact of delay, laches is concerned with the effect of delay. Prescription is a matter of time; laches is principally a question of inequity of permitting a claim to be enforced, this inequity being founded on some change in the condition of the property or the relation of the parties. Prescription is statutory; laches is not. Laches applies in equity, whereas prescription applies at law. Prescription is based on a fixed time, laches is not. (Ibid)
(c) What are the elements of laches? Ans: Given the foregoing findings of fact, all the four (4) elements of laches, as prescribed by the decisions of this Court, are present in the case, to wit: a. Conduct on the part of the defendant, or of one under whom he claims, giving rise to the situation of which complaint is made and for which the complaint seeks a remedy; b. Delay in asserting the complainants rights, the complainant having had knowledge or notice, of the defendants conduct and having been afforded an opportunity to institute a suit; c. Lack of knowledge or notice on the part of the defendant that the complainant would assert the right on which he bases his suit; and d. Injury or prejudice to the defendant in the event relief is accorded to the complainant, or the suit is not held to be barred. (Ibid) (d) May a registered owner of a property under Torrens Title be barred from recovering possession by laches? Ans: Yes. It has been held that even a registered owner of property under the Torrens Title System may be barred from recovering possession of property by virtue of laches. (Panganiban vs. Dayrit, G.R. No. 151235, July 28, 2005, 464 SCRA 370, 381; Vda. De Cabrera, et al. vs. Court of Appeals, et al., 335 Phil. 19; 267 SCRA 339 [1997]) (Heirs of Dicman vs. Cario, supra)
30. What is accion pauliana?

Ans: The rescissory action to set aside contracts in fraud of creditors is accion pauliana, essentially a subsidiary remedy accorded under Article 1383 of the Civil Code which the party suffering damage can avail of only when he has no other legal means to obtain reparation for the same. In net effect, the provision applies only when the creditor cannot recover in any other manner what is due him. (Union Bank of the Philippines vs. Ong, 491 SCRA 596, June 21, 2006)
31. A Lessee cannot claim to be a possessor in good faith under Art. 448, which applies only to one who
sows, plants or builds believes himself to have a claim of title. (Programme, Inc. vs. Bataan, 492 SCRA 529, June 26, 2006) 32. May compensation take place without the knowledge and consent of the creditor and the debtor? Ans: Yes, because it takes place automatically by operation of law. Compensation takes effect by operation of law even without the consent or knowledge of the parties concerned when all the requisites mentioned in Article 1279 of the Civil Code are present. This is in consonance with Article 1290 of the Civil Code which provides that: When all the requisites mentioned in article 1279 are present, compensation takes effect by operation of law, and extinguishes both debts to the concurrent amount, even though the creditors and debtors are not aware of the compensation. Since it takes place ipso jure, when used as a defense, it retroacts to the date when all its requisites are fulfilled.
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33. What are moral damages and exemplary damage recoverable? Ans: In order that moral damages may be awarded, there must be a pleading and proof of moral suffering, mental anguish, fright and the like, and while no proof of pecuniary loss is necessary in order that moral damages may be awarded, it is nevertheless essential that the claimant should satisfactorily show the existence of the factual basis of damages and its causal connection to defendants acts. Claims must be substantiated by clear and convincing proof and there must be clear testimony on the anguish and other forms of mental sufferings as mere allegations will not suffice. Allegations of besmirched reputation, embarrassment and sleepless nights are insufficient for it must be shown that the proximate cause thereof was the unlawful act or omission of the opposing party. In order that exemplary damages may be awarded, it must be shown that the wrongful act was accompanied by bad faith or done in a wanton, fraudulent, reckless or malevolent manner. Exemplary damages are also allowed only in addition to moral damages such that no exemplary damage can be awarded unless the claimant first establishes his clear right to moral damages. As moral damages are improper in the present case, so is the award of exemplary damages. (Trinidad vs. Acapulco, 493 SCRA 179 [June 27, 2006]) 34. a) Define consignation and state its requisites? Ans: Consignation is the act of depositing the thing due with the court or judicial authorities whenever the creditor cannot accept or refuses to accept payment and it generally requires a prior tender of payment. In order that consignation may be effective, the debtor must show that: (1) there was a debt due; (2) the consignation of the obligation had been made because the creditor to whom tender of payment was made refused to accept it, or because he was absent or incapacitated, or because several persons claimed to be entitled to receive the amount due or because the title to the obligation has been lost; (3) previous notice of the consignation had been given to the person interested in the performance of the obligation; (4) the amount due was placed at the disposal of the court; and (5) after the consignation had been made, the person interested was notified thereof.
b) May the amount consigned in Court be withdrawn and allow the obligation to remain outstanding? Ans: Yes, before the creditor has accepted the consignation and before judicial declaration that the consignation is properly made (Art 1260. Civil Code) (Banco Filipino Savings and Mortgage Bank vs. Diaz, 493 SCRA 248 [June 27, 2006])
35. What is the consent of and notice to natural parents required in adoption? Ans: The general requirement of consent and notice to the natural parents is intended to protect the natural parental relationship from unwarranted interference by interlopers, and to insure the opportunity to safeguard the best interests of the child in the manner of the propose adoption. (Landingin vs. Republic, 493 SCRA 415 [June 27, 2006])
36. a) What governs Joint Venture Agreement (JVA)? Ans: It is a form of partnership governed by the laws of partnership. b) What is the effect of termination/dissolution of the JVA? Ans: With the rescission of the JVA on account of petitioners fraudulent acts, all authority of any partner to act for the partnership is terminated except so far as may be necessary to wind up the partnership affairs or to complete transactions begun but not yet finished. On dissolution, the partnership is not terminated but continues until the winding up of partnership affairs is completed. Winding up means the administration of the assets of the partnership for the purpose of terminating the business and discharging the obligations of the partnership.
c) Who is authorized to wind up a dissolved JVA? Ans: Unless otherwise agreed, the partners who have not wrongfully dissolved the partnership or the legal representative of the last surviving partner, not insolvent, has the right to wind up the partnership affairs, provided, however, that any partner, his legal representative or his assignee, upon cause shown, may obtain winding up by the court. (Primelink Properties and Development Corporation vs. Lazatin-Magat, 493 SCRA 447 [June 27, 2006])
37. a) Who among those liable to give support should be made to shoulder the award for support in of grandchildren? Ans: The pertinent provision of the Family Code on this subject states: ART. 199. 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. An eminent author on the subject explains that the obligation to give support rests principally on those more closely related to the recipient. However, the more remote relatives may be held to shoulder the responsibility should the claimant prove that those who are called upon to provide support don not have the means to do so. b) May the person liable to give support opt to fulfill the obligation by receiving and maintaining in the family dwelling the person who has the right to receive support instead of paying the allowance fixed by the Court? Ans: Yes, provided there is no moral or legal obstacle thereto (Art 204, Family Code).
c) May support pendente lite be awarded in areas? Ans: Yes, as when the awardees for tuition fees have already graduated by the time the decision is promulgated.
d) What is the obligation of the recipient of support pendente lite in case it is finally determines that he is not entitled thereto? Ans: To return the amounts already paid with legal rate of interest from the dates of actual payment. (Mangonon vs. Court of Appeals, 494 SCRA 1 [June 30, 2006])
38. a) In usurious loans when the usury law was still in effect the debt is considered without stipulation as to the interest. May the creditor recover interest? Ans: The Supreme Court held that the creditor may recover the legal rate of interest at 12% per annum in Development Bank of the Philippines vs. Court of Appeals, 494 SCRA 25 [June 30, 2006], penned by Justice Adolf Azcuna, Chairman of the 2007 Bar Examination, as follows: In usurious loans, the entire obligation does not become void because of an agreement for usurious interest; the unpaid principal debt still stands and remains valid but the stipulation as to the interest is void. The debt is then considered to be without stipulation as to the interest. In the absence of an express stipulation as the rate of interest, the legal rate of 12% per annum shall be imposed. Comment: The above ruling is a departure from the prevailing ruling laid down in the leading case of Childa Enterprises that where the stipulated interest rate is usurious, the stipulation to pay interest is totally null and void, and the debtor may recover the entire usurious interest paid, with 12% interest per annum from the date of payment. Only the principal survives, with the entire usurious interest being totally null and void. b) Is the obligation to pay in foreign currency valid? Ans: Yes. There is no legal impediment to having obligations or transactions paid in a foreign currency as long as the parties agree to such an arrangement. In fact, obligations in foreign currency may be discharged in Philippines currency based on the prevailing rate at the time of payment. For this reason, it was improper for the CA to reject outright DBPs claim that the conversion of the remaining balance of the foreign currency loads into peso accounted for the considerable differential in the total indebtedness of respondents mainly because the exchange rates at the time of demand had been volatile and led to the depreciation of the peso. c) What is the consideration for the mortgage? Ans: The loan secured thereby. A mortgage is a mere accessory contract and its validity would depend on the validity of the loan secured by it. Hence, the consideration of the mortgage contract is the same as that of the principal contract from which it receives life, and without which it cannot exist as an independent contract. The debtor cannot escape the consequences of the mortgage contract once the validity of the load is upheld. d) Is the defense of undue influence available to the borrowers threatened with foreclosure when they sign restructuring agreements? Ans: Respondents allegation that they had no choice but to sign is tantamount to saying that DBP exerted undue influence upon them. The Court is mindful that the law grants an aggrieved party the right to obtain the annulment of a contract on account of factors such as mistake, violence, intimidation, undue influence and fraud which vitiate consent. However, the fact that the representatives were forced to sign the promissory notes and mortgage contracts in order to have respondents original loans restructured and to prevent the foreclosure of their properties does not amount to vitiated consent.
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The financial condition of respondents may have motivated them to contract with DBP, but undue influence cannot be attributed to DBP simply because the latter had lent money. The concept of undue influence is defined as follows: 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. While respondents were purportedly financially distressed, there is no clear showing that those acting on their behalf had been deprived of their free agency when they executed the promissory notes representing respondents refinanced obligations to DBP. For undue influence to be present, the influence exerted must have so overpowered or subjugated the mind of a contracting party as to destroy the latters free agency, making such party express the will of another rather than its own. The alleged lingering financial woes of a debtor per se cannot be equated with the presence of undue influence. Corollarily, the threat to foreclose the mortgage would not in itself vitiate consent as it is a threat to enforce a just or legal claim through competent authority. It bears emphasis that the foreclosure of mortgaged properties in case of default in payment of a debtor is a legal remedy given by law to a creditor. In the event of default by the mortgage debtor in the performance of the principal obligation, the mortgagee undeniably has the right to cause the sale at public auction of the mortgaged property for payment of the proceeds to the mortgagee. (Development Bank of the Philippines vs. Court of Appeals, supra, Azcuna, Ponente) 39. a) What are the requisites for an action for quieting of title? Ans: To make out an action to quiet title under the foregoing provision, the initiatory pleading has only set forth allegations showing that (1) the plaintiff has title to real property or any interest therein and (2) the defendant claims an interest therein adverse to the plaintiffs arising from an instrument, record, claim, encumbrance, or proceeding which is apparently valid or effective but is in truth and in fact invalid, ineffective, violable, or unenforceable. Thus, the averments in petitioners complaint the (1) they acquired ownership of a piece of land by tradition or delivery as a consequence of sale and (2) private respondents subsequently purchased the same piece of land at an allegedly void execution sale were sufficient to make out an action to quiet title under Article 476. b) What is the period of prescription for action for quieting of title in the possession of the plaintiff? Ans: None. The action is imprescriptible. (Ragasa vs. Roa, 494 SCRA 95 [June 30, 2006])
c) Partition of an estate may not be ordered in an action for quieting of title. (Alejandrino vs. Court of Appeals, 295 SCRA 744 [2005]) d) A cloud on title is an outstanding instrument, record claim, encumbrance or proceeding which is actually invalid or inoperative, but which may nevertheless impair or affect injuriously the title to property. (Evangelista vs. Santiago, 457 SCRA 744 [2005]) 40. Is the certificate of title issued in administrative proceeding as indefeasible as the certificates of title issued in a judicial proceeding? Ans: Yes. Ibanez v. Intermediate Appellate Court provides that certificates of title issued in administrative proceedings are as indefeasible as certificates of title issued in judicial proceedings: It must be emphasized that a certificate of title issued under an administrative proceeding pursuant to a homestead patent, as in the instant case, is a indefeasible as a certificate of title issued under a judicial registration proceeding, provided the land covered by said certificate is a disposable public land within the contemplation of the Public Land Law. There is no specific provision in the Public Land Law (C.A. No. 141, as amended) or the Land Registration Act (Act 496), now P.D. 1529, fixing the one (1) year period within which the public land patent is open to review on the ground of actual fraud as in Section 38 of the Land Registration Act, now Section 32 of P.D. 1529, and clothing a public land patent certificate of title with indefeasibility. Nevertheless, the pertinent pronouncements in the afforested cases clearly reveal that Section 38 of the Land Registration Act, now Section 32 of P.D. 1529 was applied by implication by this Court to the patent issued by the Director of Lands duly approved by the Secretary of Natural Resources, under the signature of the President of the Philippines in accordance with law. The date of issuance of the patent, therefore, corresponds to the date of the issuance of the decree in ordinary registration cases because the decree finally awards the land applied for registration to the party entitled to it, and the patent issued by the Director of Lands equally and finally grants, awards, and conveys the land applied for to the applicant. This, to our mind, is in consonance with the intent and spirit of the homestead laws, i.e.
conservation of a family home, and to encourage the settlement, residence and cultivation and improvement of the lands of the public domain. If the title to the land grant in favor of the homesteader would be subjected to inquiry, contest and decision after it has been given by the Government through the process of proceedings in accordance with the Public Land Law, there would arise uncertainty, confusion and suspicion on the governments system of distributing public agricultural lands pursuant to the Land for the Landless policy of the State. The same confusion, uncertainty and suspicion on the distribution of government-acquired lands to the landless would arise if the possession of the grantee of an EP would still be subject to contest, just because his certificate of title was issued in an administrative proceeding. The silence of Presidential Decree No. 27 as to the indefeasibility of titles issued pursuant thereto is the same as that in the Public Land Act where Prof. Antonio Noblejas commented: Inasmuch as there is no positive statement of the Public Land Law, regarding the titles granted there under, such silence should be construed and interpreted in favor of the homesteaders who come into the possession of his homestead after complying with the requirements thereof. Section 38 of the Land Registration Law should be interpreted to apply by implication to the patent issued by the Director of Lands, duly approved by the Minister of Natural Resources, under the signature of the President of the Philippines, in accordance with law. After complying with the procedure, therefore, in Section 105 of Presidential Decree No. 1529, otherwise known as the Property Registration Decree (where the DAR is required to issue the corresponding certificates of title after granting an EP to tenant-farmers who have complied with Presidential Decree No. 27), the TCTs issued to petitioners pursuant to their EPs acquire the same protection accorded to other TCTs. The certificate of title becomes indefeasible and incontrovertible upon the expiration of one year from the date of the issuance of the order for the issuance of the patent, x x x. Lands covered by such title may no longer be the subject matter of a cadastral proceeding, nor can it be decreed to another person. As we held through Justice J.B.L. Reyes in Lahora v. Dayanghirang, Jr.: The rule in this jurisdiction, regarding public land patents and the character of the certificate of title that may be issued by virtue thereof, is that where land is granted by the government to a private individual, the corresponding patent therefore is recorded, and the certificate of title is issued to the grantee; thereafter, the land is automatically brought within the operation of the Land Registration Act, the title issued to the grantee becoming entitled to all the safeguards provided in Section 38 of the said Act. In other words, upon expiration of one year from its issuance, the certificate of title shall become irrevocable and indefeasible like a certificate issued in a registration proceeding. (Emphasis supplied.) (Estribillo vs. Department of Agrarian Reform, 494 SCRA 235-7 [June 30, 2006])
41. An action to recover physical possession of the owners duplicate TCT is not a real action requiring
allegation of the assessed value but an action in capable of pecuniary estimation. Jurisdiction of the Court is determined by the allegations in the complaint and the character of the relief sought. Any other consequence of the primary relief sought in the complaint could not property be a basis for impugning the jurisdiction of the trial court (General Milling Corporation vs. Uytengsu III, 494 SCRA 241[June 30, 2006]). 42. a) May a certificate of title procured with fraud and misrepresentation be the source of a completely legal and valid title? Ans: Yes, in the hands of an innocent purchaser in good faith and for value. b) Define innocent purchaser in good faith. Ans: In a litany of cases, we have defined a purchaser in good faith as one who buys property of another without notice that some other person has a right to, or interest in, such property and pays full and fair price for the same at the time of such purchase or before he has notice of the claim or interest of some other person in the property. Thus, as a general rule, where the land sold in the possession of a person other than the vendor, the purchaser must go beyond the certificate of title and make inquiries concerning the actual possessor. A buyer of real property which is in possession of another must be wary and investigate the rights of the latter. Otherwise, without such inquiry, the buyer cannot be said to be in good faith and cannot have any right over the property. On the other hand, a mortgagee, particularly a bank or financial institution whose business is impressed with public interest, is expected to exercise more care and prudence than a private individual in its dealings, even those involving registered land. In Sunshine Finance and Investment Corp. vs. Intermediate Appellate Court we presumed that an investment and financing corporation is experienced in its business. Ascertainment of the status and condition of properties offered to it as security for loans it extends must be standard and indispensable part of its operations. Surely, it cannot simply rely on an examination of a Torrens Certificate to determine what the subject property looks like as its condition is not apparent in the documents. The land might be easily inundated. This might be an interior lot, without convenient access.
These and other similar factors determine the value of the property and so should be of practical concern to the (investment and financing corporation) (Philippine National Bank vs. Heirs of Estanislao Militar, 494 SCRA 314 [June 30, 2006])
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Civil Law Pre-Week 09

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2009 PRE-WEEK REVIEW PREDICTIONS AND REMINDERS in CIVIL LAW By: Prof. Arturo M. de Castro (Ll.B., Ll.M.

Yes, it is a recognized proof of paternity and filiation.

2) Is the salvage zone capable of private ownership and titling?

6) What are the requisites for legal easement of right of way?

4) Define or explain the following concepts in succession: a) accretion. b) collation Ans:

e) Complimentarity of contract or contracts construed together principle the implementing agreement

3) a. Define obligation? Ans: A judicial necessity to give, to do or not to do (Art. 1156).

b. What are the sources of obligation? Ans:

2) What is the concept of quasi-contracts?

3) Define: a. Negotiorum gestio b. Solutio Indebiti Ans:

2. (a) Define Laches.

3. What is accion pauliana?

JANUARY 1 TO JUNE 30, 2006 SUPREME COURT DECISIONS

7. Essential requisites of a binding contract.

11. What is a purchase money resulting trust?

16. Define solutio indebiti.

(3) Must contain an acknowledgment, not a mere jurat.

29. (a) Define Laches.

30. What is accion pauliana?

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