Obligations and Contracts-Atty.

Mison '13-'14
TITLE III Natural Obligations FOUR TYPES OF OBLIGATIONS I. NATURAL OBLIGATIONS A. CONCEPT OF VOLUNTARY FULFILL ENT B. EFFECT OF PRESCRIPTION II.RESTITUTION BY INOR III. NO RIG!T TO "E AN" RETURN IV. LIABILITY OF !EIRS V. EFFECT OF VOI" #ILLS FOUR TYPES OF OBLIGATIONS 1. oral Purely based on conscience (a.k.a. duty) 2. Natural Not sanctioned by any court action 3. Ci$il Enforceable in court, %&'%(t un%n)or'%abl% 'ontra'ts 4. i&%* Either Civil with Moral, or Civil with Natural I. NATURAL OBLIGATIONS CONCEPT+ Those based on equity and natural law o not !rant a ri!ht of action to enforce their "erfor#ance $%&E'E(, after $oluntar, )ul)il-%nt by the obli!or, they authori)e the retention of what has been delivered or rendered by reason thereof. ..BIN"ING TIE / Conscience E0A PLE+ a. %bli!ation to "ay interest for use of #oney, even if not a!reed u"on in writin!. b. uty to su""ort natural or s"urious children* c. +ivin! of #aterial and financial assistance to children u"on their #arria!e. OT!ER NOTES+ Midway between civil and "urely #oral obli!ations Civil obli!ations are enforceable by action while #oral obli!ations rest entirely u"on conscience ,t is distin!uished fro# civil obli!ations in a sense that it doesn-t !ive rise to an action to co#"el its "erfor#ance There #ust e.ist a /uridical tie which is not "rohibited by law and which in itself could !ive a cause of action, but because of so#e s"ecial circu#stances is actually without such le!al sanction or #eans of enforcin! co#"liance by invokin! the intervention of the court A. Voluntar, )ul)il-%nt+ &hen the debtor knows that he cannot be le!ally forced to do so, but co#"lies with the sa#e. B. Partial Voluntar, )ul)il-%nt+ The balance cannot be recovered since on said balance, no le!al obli!ation has yet been created. EFFECT OF PRESCRIPTION Art. 1232. #4%n a rig4t to su% u(on a 'i$il obligation 4as la(s%* b, %&tin'ti$% (r%s'ri(tion5 t4% obligor 64o $oluntaril, (%r)or-s t4% 'ontra't 'annot r%'o$%r 64at 4% 4as *%li$%r%* or t4% $alu% o) t4% s%r$i'% 4% 4as r%n*%r%*. Art. 1237. #4%n 6it4out t4% 8no6l%*g% or against t4% 6ill o) t4% *%btor5 a t4ir* (%rson (a,s a *%bt 64i'4 t4% obligor is not l%gall, boun* to (a, b%'aus% t4% a'tion t4%r%on 4as (r%s'rib%*5 but t4% *%btor lat%r $oluntaril, r%i-burs%s t4% t4ir* (%rson5 t4% obligor 'annot r%'o$%r 64at 4% 4as (ai*. Pr%s'ri(tion Un8no6n (ecovery "ossible Pr%s'ri(tion 9no6n No recovery This is a case of natural obli!ation.

T6o 'on*itions )or Natural Obligations :TN;+ 1. <uridical tie between two "ersons. 2. Tie is not !iven effect by law.

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Obligations and Contracts-Atty. Mison '13-'14

III. RESTITUTION BY INORS

Art. 123=. #4%n a -inor b%t6%%n %ig4t%%n an* t6%nt,>on% ,%ars o) ag% 64o 4as %nt%r%* into a 'ontra't 6it4out t4% 'ons%nt o) t4% (ar%nt or guar*ian5 a)t%r t4% annul-%nt o) t4% 'ontra't $oluntaril, r%turns t4% 64ol% t4ing or (ri'% r%'%i$%*5 not6it4stan*ing t4% )a't t4at 4% 4as not b%%n b%n%)it%* t4%r%b,5 t4%r% is no rig4t to *%-an* t4% t4ing or (ri'% t4us r%turn%*. Art. 123?. #4%n a -inor b%t6%%n %ig4t%%n an* t6%nt,>on% ,%ars o) ag%5 64o 4as %nt%r%* into a 'ontra't 6it4out t4% 'ons%nt o) t4% (ar%nt or guar*ian5 $oluntaril, (a,s a su- o) -on%, or *%li$%rs a )ungibl% t4ing in )ul)il-%nt o) t4% obligation5 t4%r% s4all b% no rig4t to r%'o$%r t4% sa-% )ro- t4% oblig% 64o 4as s(%nt or 'onsu-%* it in goo* )ait4. NOTE+ RA =@AB chan!ed the le!al a!e to 01 years* now the #inor referred to in the article are those below 01 years old. ,f the contract is annulled due to #inority, and u"on reachin! the a!e of #a/ority voluntarily returned what he received fro# the other "arty, he cannot recover any#ore what he had returned. IV. NO RIG!T TO "E AN" RETURN

Art. 123@. #4%n5 a)t%r an a'tion to %n)or'% a 'i$il obligation 4as )ail%* t4% *%)%n*ant $oluntaril, (%r)or-s t4% obligation5 4% 'annot *%-an* t4% r%turn o) 64at 4% 4as *%li$%r%* or t4% (a,-%nt o) t4% $alu% o) t4% s%r$i'% 4% 4as r%n*%r%*. V. LIABILITY OF !EIRS

Art. 123B. #4%n a t%stat% or int%stat% 4%ir $oluntaril, (a,s a *%bt o) t4% *%'%*%nt %&'%%*ing t4% $alu% o) t4% (ro(%rt, 64i'4 4% r%'%i$%* b, 6ill or b, t4% la6 o) int%sta', )ro- t4% %stat% o) t4% *%'%as%*5 t4% (a,-%nt is $ali* an* 'annot b% r%s'in*%* b, t4% (a,%r. The heir cannot be burdened with obli!ations of the decedent which e.ceed the value of the inheritance he inherits. ,f the heir voluntarily "ays, he cannot rescind whatever he "aid or "erfor#ed for the law considers it a valid "ay#ent. VI. EFFECT OF VOI" #ILLS

Art. 12CA. #4%n a 6ill is *%'lar%* $oi* b%'aus% it 4as not b%%n %&%'ut%* in a''or*an'% 6it4 t4% )or-aliti%s r%Duir%* b, la65 but on% o) t4% int%stat% 4%irs5 a)t%r t4% s%ttl%-%nt o) t4% *%bts o) t4% *%'%as%*5 (a,s a l%ga', in 'o-(lian'% 6it4 a 'laus% in t4% *%)%'ti$% 6ill5 t4% (a,-%nt is %))%'ti$% an* irr%$o'abl%. ,f the will is void, the le!acy is also void and the deceased is considered to have died without a will NOTE+ 2 natural obli!ation #ay also be converted into a civil obli!ation by novation, confir#ation or ratification. / Partial Pa,-%nts GEN RULE+ Partial "ay#ent of an obli!ation does not #ake it civil The "art "aid cannot be recovered, but the "ay#ent of the balance cannot be enforced. Natural Obligations "istinguis4%* )ro- oral Obligations Natural Obligation <uri*i'al Ti% Voluntar, Ful)ill-%nt "o-ain 3es, between "arties but is not %n)or'%abl% b, 'ourt a'tion Produces le!al effects which the court will reco!ni)e and "rotect 4aw

oral Obligation No /uridical tie No le!al effects Morals

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Obligations and Contracts-Atty. Mison '13-'14

ESTOPPEL I. CONCEPT OF ESTOPPEL A. BASIS B. ORIGIN C. APPLICABILITY ". ESSENTIAL ELE ENTS II. 9IN"S OF ESTOPPEL A. ESTOPEL IN PAIS B. TEC!NICAL ESTOPPEL C. ESTOPPEL BY <U"GE ENT ". ESTOPPEL BY LAC!ES / LAC!ES V. PRESCRIPTION III. INAPPLICABILITY OF ESTOPPEL IV. ESTOPPEL IN PAIS VS ESTOPPEL BY "EE" Art. 12C1. T4roug4 %sto((%l an a*-ission or r%(r%s%ntation is r%n*%r%* 'on'lusi$% u(on t4% (%rson -a8ing it5 an* 'annot b% *%ni%* or *is(ro$%* as against t4% (%rson r%l,ing t4%r%on. Art. 12C3. T4% (rin'i(l%s o) %sto((%l ar% 4%r%b, a*o(t%* inso)ar as t4%, ar% not in 'on)li't 6it4 t4% (ro$isions o) t4is Co*%5 t4% Co*% o) Co--%r'%5 t4% Rul%s o) Court an* s(%'ial la6s. I. CONCEPT Condition or state where an ad#ission or re"resentation is r%n*%r%* 'on'lusi$% Cannot be denied or dis"roved as a!ainst the "erson relyin! thereon. A. BASIS Public "olicy, fair dealin!, !ood faith and /ustice. B. PURPOSE To forbid one to s"eak a!ainst his own act, re"resentations or co##it#ents to the in/ury of one who reasonably relied thereon. C. ORIGIN Equity* hence it is a shield a!ainst in/ustice and cannot be invoked to "er"etuate an in/ustice ". APPLICABILITY Esto""el a""lies only to questions of fact, and not of law. E. ESSENTIAL ELE ENTS 1. Conduct of a "arty a#ountin! to )als% r%(r%s%ntation 2. Int%nt5 or at least e."ectation that this conduct shall influence the other "arty 3. 9no6l%*g%5 actual or constructive, of the real facts II. 9IN"S OF ESTOPPEL Art. 12CC. Esto((%l -a, b% in pais or b, *%%*. Art. 12C2. #4%n a (%rson 64o is not t4% o6n%r o) a t4ing s%%ls or ali%nat%s an* *%li$%rs it5 an* lat%r t4% s%ll%r or grantor a'Duir%s titl% t4%r%to5 su'4 titl% (ass%s b, o(%ration o) la6 to t4% bu,%r or grant%%. Art. 12C7. I) a (%rson in r%(r%s%ntation o) anot4%r s%lls or ali%nat%s a t4ing5 t4% )or-%r 'annot subs%Du%ntl, s%t u( 4is o6n titl% as against t4% bu,%r or grant%%. Art. 12C=. A l%ss%% or a bail%% is %sto((%* )ro- ass%rting titl% to t4% t4ing l%as%* or r%'%i$%*5 as against t4% l%ssor or bailor Art. 12C?. #4%n in a 'ontra't b%t6%%n t4ir* (%rsons 'on'%rning i--o$abl% (ro(%rt,5 on% o) t4%- is -isl%* b, a (%rson 6it4 r%s(%'t to t4% o6n%rs4i( or r%al rig4t o$%r t4% r%al %stat%5 t4% latt%r is (r%'lu*%* )ro- ass%rting 4is l%gal titl% or int%r%st t4%r%in5 (ro$i*%* all t4%s% r%Duisit%s ar% (r%s%nt+ :1; T4%r% -ust b% )rau*ul%nt r%(r%s%ntation or 6rong)ul 'on'%al-%nt o) )a'ts 8no6n to t4% (art, %sto((%*E :3; T4% (art, (r%'lu*%* -ust int%n* t4at t4% ot4%r s4oul* a't u(on t4% )a'ts as -isr%(r%s%nt%*E :C; T4% (art, -isl%* -ust 4a$% b%%n una6ar% o) t4% tru% )a'tsE an* :2; T4% (art, *%)rau*%* -ust 4a$% a't%* in a''or*an'% 6it4 t4% -isr%(r%s%ntation.

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Obligations and Contracts-Atty. Mison '13-'14

Art. 12C@. On% 64o 4as allo6%* anot4%r to assu-% a((ar%nt o6n%rs4i( o) (%rsonal (ro(%rt, )or t4% (ur(os% o) -a8ing an, trans)%r o) it5 'annot5 i) 4% r%'%i$%* t4% su- )or 64i'4 a (l%*g% 4as b%%n 'onstitut%*5 s%t u( 4is o6n titl% to *%)%at t4% (l%*g% o) t4% (ro(%rt,5 -a*% b, t4% ot4%r to a (l%*g% 64o r%'%i$%* t4% sa-% in goo* )ait4 an* )or $alu%. A. Esto((%l in pais :EDuitabl% Esto((%l; 0. Conduct or acce"tance of benefits 5. (e"resentation or conceal#ent 6. 7ilence 8. %#ission NOTE+ 9ecause of so#ethin! which he has done or o#itted to do, a "arty is denied the ri!ht to "lead or "rove an otherwise i#"ortant fact Princi"le by which a "arty who knows or should know the truth is absolutely "recluded, both at law and in equity, fro# denyin!, assertin! the contrary of, any #aterial fact which by his words or conduct, affir#ative or ne!ative, intentionally or cul"able ne!li!ence, he has induced another, who was e.cusably i!norant of the true facts and who had a ri!ht to rely u"on such word or conduct, to believe and act u"on the# thereby, as a consequence reasonably antici"ated, chan!in! his "osition in such a way that he would suffer in/ury if such denial or contrary assertion was allowed. B. T%'4ni'al Esto((%l 1. Esto((%l b, *%%* 3. Esto((%l b, r%'or* 2 "arty to a deed is "recluded fro# assertin! as a!ainst the other "arty, #aterial fact asserted therein 2 "arty is "recluded fro# denyin! the truth of #atters set forth in a record, whether /udicial or le!islative

C. ESTOPPEL BY <U"GE ENT 2 "arty to a case is "recluded fro# denyin! the facts ad/udicated by a court of co#"etent /urisdiction. ". ESTOPPEL BY LAC!ES El%-%nts o) La'4%s :C">9I; 1. Conduct !ivin! rise to a situation of which the co#"laint is #ade and which the co#"lainant seeks a re#edy 2. "elay in assertin! co#"lainant-s ri!hts 3. 4ack of 9nowled!e or notice on the "art of defendant that the co#"lainant would assert his ri!ht 8. InFur, or (r%Fu*i'% to t4% *%)%n*ant in 'as% r%li%) is grant%* PRESCRIPTION LAC!ES Con'%rn Gu%stion Statutor,H A((li'ation N%%* to b% s(%'i)i'all, (l%a*%*H Basis :act of delay Matter of ti#e 3es 2""lies in 4aw Y%s. Cannot be availed of unless s"ecifically "leaded as an affir#ative alle!ation :i.ed ti#e Effect of delay ,nequity of "er#ittin! the clai# to be enforces No 2""lies in Equity No. 9ein! a defense in equity, it need not be s"ecifically "leaded. Not on a fi.ed ti#e

III. INAPPLICABILITY OF ESTOPPEL Art. 12CB+ Esto((%l is %))%'ti$% onl, as b%t6%%n t4% (arti%s t4%r%to or t4%ir su''%ssors in int%r%st.

1.
2. 3. 4. 5. 6. 7.

Esto""el a""lies only to questions of facts, not law. Ignoratia legis non excusat. Third "arties who are "ersons not "rivies to the transaction are not bound by esto""els. Cannot be sustained by #ere ar!u#ent or doubtful inference* it #ust be clearly "roved in all its essential ele#ents by clear, convincin! and satisfactory evidence Esto""el not a""licable a!ainst the !overn#ent suin! in its ca"acity as soverei!n or assertin! !overn#ental ri!hts oes not a""ly is a law or "ublic "olicy will be violated +overn#ent cannot be esto""ed by the #istake and errors of its officers 2""lies to questions of fact only, not of law, about the truth of which the "arty is i!norant

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Obligations and Contracts-Atty. Mison '13-'14

8. ,f an act, conduct or #isre"resentation of the "arty sou!ht to be esto""ed is due to i!norance founded on innocent #istake, esto""el will not arise

IV. "IFFERENTIATE ESTOPPEL BY "EE" 1. 2. 3. 4. There #ust have been a re"resentation or conceal#ent of #aterial facts (e"resentation #ust have been with knowled!e of the facts Party to who# it was #ade #ust have been i!norant of the truth of the #atter ,t #ust have been #ade with the intention that the other "arty would act u"on it 5. 6. 0. ESTOPPEL IN PAIS Conduct a#ountin! to false re"resentation or conceal#ent of #aterial facts or at least calculated to convey the i#"ression that the facts are otherwise than, and inconsistent with, those which the "arty subsequently atte#"ts to assert ,ntent, or at least e."ectation that this conduct shall be acted u"on, or at least influenced by the other "arty ;nowled!e, actual or constructive of the actual facts

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Obligations and Contracts-Atty. Mison '13-'14

TRUSTS C4a(t%r 1+ G%n%ral Pro$isions I. CONCEPT OF TRUST A. C!ARACTERISTICS B. NATURE OF TRUSTEEIS LIABILITY C. LI ITATIONSJ RESTRICTIONS C. CLASSIFICATION E0PRESS VS I PLIE" RESULTING VS CONSTRUCTIVE II. E0PRESS TRUST A. REGUISITES B. PROOF OF E0PRESS INTENT III. I PLIE" TRUST A. 9IN"S OF I PLIE" TRUST 1. I PLIE" TRUST IN SALE 3. I PLIE" TRUST IN "ONATIONS C. BY OPERATION OF LA# C INVEST ENT OF TRUST FUN"S ". ISTA9E 1. UTUAL 3. UNILATERAL Arti'l% 122A. A (%rson 64o %stablis4%s a trust is 'all%* t4% trustorE on% in 64o- 'on)i*%n'% is r%(os%* as r%gar*s (ro(%rt, )or t4% b%n%)it o) anot4%r (%rson is 8no6n as t4% trust%%E an* t4% (%rson )or 64os% b%n%)it t4% trust 4as b%%n 'r%at%* is r%)%rr%* to as t4% b%n%)i'iar,. I. CONCEPT OF TRUST Trust < LEGAL RELATIONS!IP between a. one "erson havin! an %Duitabl% o6n%rs4i( in "ro"erty* b. and another "erson o6ning a l%gal titl% to such "ro"erty, the equitable ownershi" of the for#er %ntitling hi# to PE(:%(M2NCE of certain duties and the e.ercise of certain P%&E(7 by the latter. A. C!ARACTERISTICS :F>I>P>E; 0. ,t is a relationshi" of FI"UCIARY character 5. (elationshi" with res"ect to P ROPERTY, not one involvin! #erely "ersonal duties 6. ,t involves the e.istence of EGUITABLE "UTIES i#"osed u"on the holder of the title to the "ro"erty to it for the benefit of another 8. ,t arises as a result of a #anifestation of INTENTION to create the relationshi" B. NATURE OF TRUSTEEIS LIABILITY = PE(7%N24 = The action, which is in the nature of a !eneral de#and for da#a!es, can be #aintained by cestui que trust or "ersons clai#in! under hi# or by the creator of the trust only a!ainst the trustee C. LI ITATIONSJ RESTRICTIONS A TRUSTEE CANNOT+ 0. 2cquire by "rescri"tion the ownershi" of "ro"erty entrusted to hi# 5. 2n action to co#"el a trustee to convey "ro"erty re!istered in his na#e in trust for the benefit of the cestui que trust does not "rescribe 6. efense of "rescri"tion cannot be set u" in an action to recover "ro"erty held by a "erson in trust for the benefit of another 8. Pro"erty held in trust can be recovered by the beneficiary re!ardless of the la"se of ti#e NOTE+ the rule of i#"rescri"tibility of the action to recover "ro"erty held in trust #ay "ossibly a""ly to resultin! trusts as lon! as the trustee has not re"udiated the trust Arti'l% 1221. Trusts ar% %it4%r %&(r%ss or i-(li%*. E&(r%ss trusts ar% 'r%at%* b, t4% int%ntion o) t4% trustor or o) t4%

deal with

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Obligations and Contracts-Atty. Mison '13-'14

(arti%s. I-(li%* trusts 'o-% into b%ing b, o(%ration o) la6. Arti'l% 1223. T4% (rin'i(l%s o) t4% g%n%ral la6 o) trusts5 inso)ar as t4%, ar% not in 'on)li't 6it4 t4is Co*%5 t4% Co*% o) Co--%r'%5 t4% Rul%s o) Court an* s(%'ial la6s ar% 4%r%b, a*o(t%*. ". CLASSIFICATION E0PRESS VS I PLIE" E0PRESSE" TRUST can co#e into e.istence only by the #anifestation of an intention to create it by the one havin! le!al and equitable do#inion over the "ro"erty #ade sub/ect to it* such intention #ay be #anifested by words or by conduct Cannot co#e to e.istence by "arol evidence. :Art. 122C; I PLIE" TRUST can co#e into e.istence either throu!h i#"lication of an intention to create a trust as a #atter of law or throu!h the i#"osition of the trust irres"ective of, and even contrary to any, such intention May co#e to e.istence by "arol evidence. :Art. 127?;

RESULTING VS CONSTRUCTIVE RESULTING TRUST where a "erson #akes or causes to be #ade a dis"osition of "ro"erty under circu#stances which raise an inference that he doesn-t intend that the "erson takin! or holdin! the "ro"erty should have the beneficial interest in the "ro"erty CONSTRUCTIVE TRUST where a "erson convey it to another on the !round that he would be un/ustly enriched if he were "er#itted to retain it.

Arti'l% 122C. No %&(r%ss trusts 'on'%rning an i--o$abl% or an, int%r%st t4%r%in -a, b% (ro$%* b, (arol %$i*%n'%. II. E0PRESS TRUST A. REGUISITES 0. There #ust be a co#"etent trustor and trustee, 5. 2scertainable trust, 6. 7ufficiently certain 9eneficiaries 8. Created by the direct and "ositive acts of the "arties, by so#e writin! or deed or will or by words evidencin! an intention to create a trust Arti'l% 1222. No (arti'ular 6or*s ar% r%Duir%* )or t4% 'r%ation o) an %&(r%ss trust5 it b%ing su))i'i%nt t4at a trust is 'l%arl, int%n*%*. Arti'l% 1227. No trust s4all )ail b%'aus% t4% trust%% a((oint%* *%'lin%s t4% *%signation5 unl%ss t4% 'ontrar, s4oul* a((%ar in t4% instru-%nt 'onstituting t4% trust. Arti'l% 122=. A''%(tan'% b, t4% b%n%)i'iar, is n%'%ssar,. N%$%rt4%l%ss5 i) t4% trust i-(os%s no on%rous 'on*ition u(on t4% b%n%)i'iar,5 4is a''%(tan'% s4all b% (r%su-%*5 i) t4%r% is no (roo) to t4% 'ontrar,. B. PROOF OF E0PRESS INTENT &hen the e."ress trust concerns an i##ovable or an interest therein, a writin! is necessary to "rove it (equired only for the "ur"oses of "roof 2cce"tance #ay be e."ress or i#"lied %nerous condition > one which the beneficiary is required to "erfor# to #ake the trust effective or is one which should be done for as lon! as the trust e.ists NOTE+ :or as lon! as the intention to establish a trust is very clear, an e."ress trust is created. ( ART. 1222; 2n e."ress trust clearly indicates that a trustor is deliverin! his "ro"erty to a trustee for the benefit of the beneficiary. This clear intention #ust be i#"le#ented even if the trustee a""ointed declines the desi!nation. ( Art. 1227; Arti'l% 122?. T4% %nu-%ration o) t4% )ollo6ing 'as%s o) i-(li%* trust *o%s not %&'lu*% ot4%rs %stablis4%* b, t4% g%n%ral la6 o) trust5 but t4% li-itation lai* *o6n in Arti'l% 1223 s4all b% a((li'abl%.

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Obligations and Contracts-Atty. Mison '13-'14

III. I PLIE" TRUST A. 9IN"S OF I PLIE" TRUST Arti'l% 122@. T4%r% is an i-(li%* trust 64%n (ro(%rt, is sol*5 an* t4% l%gal %stat% is grant%* to on% (art, but t4% (ri'% is (ai* b, anot4%r )or t4% (ur(os% o) 4a$ing t4% b%n%)i'ial int%r%st o) t4% (ro(%rt,. T4% )or-%r is t4% trust%%5 64il% t4% latt%r is t4% b%n%)i'iar,. !o6%$%r5 i) t4% (%rson to 64o- t4% titl% is 'on$%,%* is a '4il*5 l%giti-at% or ill%giti-at%5 o) t4% on% (a,ing t4% (ri'% o) t4% sal%5 no trust is i-(li%* b, la65 it b%ing *is(utabl, (r%su-%* t4at t4%r% is a gi)t in )a$or o) t4% '4il*. 1. I PLIE" TRUST IN SALE Trust fro# "ay#ent < 2 resultin! trust arises in favor of one who "ays the "urchase #oney of an estate and "laces the title in the na#e of another, because of the "resu#"tion that he who "ays the thin! intends a beneficial interest therein for hi#self E0CEPTION+ &hen an actual contrary intention is "roven. Arti'l% 122B. T4%r% is also an i-(li%* trust 64%n a *onation is -a*% to a (%rson but it a((%ars t4at alt4oug4 t4% l%gal %stat% is trans-itt%* to t4% *on%%5 4% n%$%rt4%l%ss is %it4%r to 4a$% no b%n%)i'ial int%r%st or onl, a (art t4%r%o). 3. I PLIE" TRUST IN "ONATIONS = 2n i#"lied trust where the trustee is the donee and the beneficiary is the donor E&a-(l%+ onation #ade by 2 to 9. es"ite donation, 2 still !et the rentals of the a"art#ent Arti'l% 127A. I) t4% (ri'% o) a sal% o) (ro(%rt, is loan%* or (ai* b, on% (%rson )or t4% b%n%)it o) anot4%r an* t4% 'on$%,an'% is -a*% to t4% l%n*%r or (a,or to s%'ur% t4% (a,-%nt o) t4% *%bt5 a trust aris%s b, o(%ration o) la6 in )a$or o) t4% (%rson to 64o- t4% -on%, is loan%* or )or 64o- its is (ai*. T4% latt%r -a, r%*%%- t4% (ro(%rt, an* 'o-(%l a 'on$%,an'% t4%r%o) to 4i-. Arti'l% 1271. #4%n lan* (ass%s b, su''%ssion to an, (%rson an* 4% 'aus%s t4% l%gal titl% to b% (ut in t4% na-% o) anot4%r5 a trust is %stablis4%* b, i-(li'ation o) la6 )or t4% b%n%)it o) t4% tru% o6n%r. Arti'l% 1273. I) t6o or -or% (%rsons agr%% to (ur'4as% (ro(%rt, an* b, 'o--on 'ons%nt t4% l%gal titl% is ta8%n in t4% na-% o) on% o) t4%- )or t4% b%n%)it o) all5 a trust is 'r%at%* b, )or'% o) la6 in )a$or o) t4% ot4%rs in (ro(ortion to t4% int%r%st o) %a'4. C. I PLIE" TRUST BY OPERATION OF LA# E&a-(l%+ 2 buys "ro"erty fro# 9. The #oney 2 used was a loan fro# C, the "ro"erty was under the latter-s na#e. ?"on "ay#ent of 2, he #ay then ask for the secured "ro"erty fro# C. B. INVEST ENT OF TRUST FUN"S GENERAL RULE+ where trust #oney cannot be a""lied either i##ediately or within a short ti#e to the "ur"ose of the trust it is the duty of the trustee to #ake the fund "roductive to the cestui que trust by invest#ent of it in so#e "ro"er security NOTE+ Trustee shouldn-t "rofit out of the handlin! of the trust estate Arti'l% 127C. #4%n (ro(%rt, is 'on$%,%* to a (%rson in r%lian'% u(on 4is *%'lar%* int%ntion to 4ol* it )or5 or trans)%r it to anot4%r or t4% grantor5 t4%r% is an i-(li%* trust in )a$or o) t4% (%rson 64os% b%n%)it is 'ont%-(lat%*. Arti'l% 1272. I) an absolut% 'on$%,an'% o) (ro(%rt, is -a*% in or*%r to s%'ur% t4% (%r)or-an'% o) an obligation o) t4% grantor to6ar* t4% grant%%5 a trust b, $irtu% o) la6 is %stablis4%*. I) t4% )ul)ill-%nt o) t4% obligation is o))%r%* b, t4% grantor 64%n it b%'o-%s *u%5 4% -a, *%-an* t4% r%'on$%,an'% o) t4% (ro(%rt, to 4i-. ". ISTA9E

Arti'l% 1277. #4%n an, trust%%5 guar*ian or ot4%r (%rson 4ol*ing a )i*u'iar, r%lations4i( us%s trust )un*s )or t4% (ur'4as% o) (ro(%rt, an* 'aus%s t4% 'on$%,an'% to b% -a*% to 4i- or to a t4ir* (%rson5 a trust is %stablis4%* b,

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Obligations and Contracts-Atty. Mison '13-'14

o(%ration o) la6 in )a$or o) t4% (%rson to 64o- t4% )un*s b%long. Arti'l% 127=. I) (ro(%rt, is a'Duir%* t4roug4 -ista8% or )rau*5 t4% (%rson obtaining it is5 b, )or'% o) la65 'onsi*%r%* a trust%% o) an i-(li%* trust )or t4% b%n%)it o) t4% (%rson )ro- 64o- t4% (ro(%rt, 'o-%s. UTUAL VS UNILATERAL UTUAL UNILATERAL

&here under a #utual #istake, the !rantor conveys a

"iece of land which wasn-t intended by the "arties to be conveyed, the title to the land "asses to the !rantee in s"ite of the #istake, and it is within the "ower of the !rantee to "ass title to a "urchaser in value and without notice of the #istake

&here the !rantor #akes a #istake of which the

!rantee knows, the !rantor can set aside the transaction even thou!h the value was !iven for the transfer

Even without annullin! the title of the !rantee, the

!rantor can co#"el the for#er to reconvey the "ro"erty to hi#

,f the land hasn-t been conveyed to a bona fide "urchaser,

the !rantee can be co#"elled to reconvey it to the !rantor, since he would be un/ustly enriched if he were "er#itted to retain it

2 contract of transfer of "ro"erty that is fictitious

and void ab initio doesn-t create an i#"lied trust

Arti'l% 127?. An i-(li%* trust -a, b% (ro$%* b, oral %$i*%n'%.

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Obligations and Contracts-Atty. Mison '13-'14

PRESCRIPTION I. CONCEPT OF PRESCRIPTION / LAC!ES VS PRESCRIPTION II. 9IN"S A. ACGUISITIVE B. E0TINCTIVE III.PRESCRIPTION "OES NOT RUN AGAINST A. T!E FF. PERSONS B. T!E FF. RELATIONS!IPS IV. PRESU PTIONS A. FAVOR TO#AR"S ARRIAGE B. CO>O#NERS!IP V. RENOUNCE ENT OF RIG!T TO PRESCRIPTION VI. PROPERTIES SUB<ECT AN" NOT SUB<ECT TO PRESCRIPTION VII. #AIVER OF PRESCRIPTION #ILL NOT PREVENT PERSONS IN INTEREST FRO

INVO9ING PRESCRIPTION

Art. 11A= > B, Pr%s'ri(tion on% a'Duir%s o6n%rs4i( an* ot4%r r%al rig4ts t4roug4 t4% la(s% o) ti-% in t4% -ann%r an* un*%r t4% 'on*itions lai* *o6n b, la6. In t4% sa-% 6a, rig4ts an* a'tions ar% lost b, (r%s'ri(tion. Art. 11A? P%rsons 64o ar% 'a(abl% o) a'Duiring (ro(%rt, rig4ts b, t4% ot4%r l%gal -o*%s -a, a'Duir% t4% sa-% b, -%ans o) (r%s'ri(tion inors an* ot4%r in'a(a'itat%* (%rsons -a, a'Duir% (ro(%rt, or rig4ts b, (r%s'ri(tion %it4%r (%rsonall, or t4roug4 t4%ir (ar%nts5 guar*ians or l%gal r%(r%s%ntati$%s. I. CONCEPT OF PRESCRIPTION = Mode of acquirin! "ro"erty ri!hts (#a/ority a!e) = :or #inors if they don-t have assistance then it is annullable or voidable which he #ay ratify once the #inor co#es of a!e. ,f the #inor acquires it with "arents then it is co#"letely valid. = ,#"lied trust is sub/ect to "rescri"tion. LAC!ES Concerned with fact of delay @uestion of #atter of ti#e 7tatutory 2""lies in law Cannot be availed of unless s"ecifically "leaded as an affir#ative alle!ation 9ased on fi.ed ti#e. PRESCRIPTION Concerned with effect of delay @uestion of inequity of "er#ittin! the clai# to be enforced Not statutory 2""lies in equity 9ein! a defense in equity, it need not be s"ecifically "leaded.

Not based on fi.ed ti#e.

LAC!ES :*o'trin% o) stal% *%-an*s; = based on !rounds of "ublic "olicy discoura!in! stale clai#s = based on equity = laches has been used even if the "rescri"tive "eriod has not la"sed. (althou!h re!istered "ro"erty !enerally doesn-t "rescribe can lose ri!ht to recover throu!h laches)

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Obligations and Contracts-Atty. Mison '13-'14

II. 9IN"S A. ACGUISITIVE> acquisition of a ri!ht throu!h the la"se of ti#e. B. E0TINCTIVE> ri!hts and actions lost throu!h the la"se of ti#e. (statute of li#itations) Art. 11A@ Pr%s'ri(tion runs against+ 1. inors an* in'a(a'itat%* (%rsons 64o 4a$% (ar%nts guar*ians or ot4%r l%gal r%(r%s%ntati$%s 3.Abs%nt%%s 64o 4a$% a*-inistrators %it4%r a((oint%* b, t4%- b%)or% t4%ir *isa((%aran'% or a((oint%* b, t4% 'ourts C. P%rsons li$ing abroa* 64o 4a$% -anag%rs or a*-inistrators 2. <uri*i'al (%rsons5 %&'%(t t4% stat% an* its sub*i$isions P%rsons *isDuali)i%* )ro- a*-inist%ring t4%ir (ro(%rt, 4a$% a rig4t to 'lai- *a-ag%s )ro- t4%ir l%gal r%(r%s%ntati$%s 64os% n%glig%n'% 4as b%%n t4% 'aus% o) (r%s'ri(tion. III.PRESCRIPTION "OES NOT RUN AGAINST :<>A> I>LAB; A. T!E FF. PERSONS GEN RULE+ "rescri"tion does not run a!ainst these "eo"le E0CEPT+ if they have their re"resentatives or as "rovided by this article. 0. INORS and INCAPACITATE" :or children "rescri"tion auto#atically runs if they have a livin! "arent. if the absentee intentionally does not want to return then "rescri"tion runs even if they don-t have an ad#inistrator.

5.ABSENTEES

6. Persons LIVING ABROA"

if "erson livin! abroad can return ho#e then "rescri"tion runs even without a #ana!er, if they can-t and no #ana!er then "rescri"tion does not run. :or "rescri"tion to run they #ust be actin! not in their soverei!n ca"acity but in "ro"rietary functions. (collection cases of !overn#ent, a!ricultural and industrial bank)

8. <URI"ICAL PERSONS

Art. 11AB Pr%s'ri(tion *o%s not run b%t6%%n+ 1. !usban* an* #i)% :unl%ss t4% la6 (ro$i*%s; 3. Par%nts an* '4il*r%n5 *uring t4% -inorit, or insanit, o) t4% latt%r C. B%t6%%n guar*ian an* 6ar* *uring guar*ians4i( B. T!E FF. RELATIONS!IPS :G>S>PAC; 0.SPOUSES (unless the law "rovides) 5.PARENTS AN" C!IL"REN, durin! the #inority or insanity of the latter 6.under GUAR"IANS!IP 2. Prescri"tion by adverse "ossession cannot e.ist between husband and wife (void donation will still be void) E0CEPTION+ :a#ily code "rovides for "rescri"tion "eriodA 1. 4e!al se"aration, annul#ent between husband wife #ust be filed within B years fro# occurrence. Minor and "arentA i#"u!nin! le!iti#acy of child

IV. PRESU PTIONS A. FAVOR TO#AR"S

ARRIAGE

Art .111A Pr%s'ri(tion runs in )a$or o) a -arri%* 6o-%n. B. CO>O#NERS!IP Art. 1111 Pr%s'ri(tion obtain%* b, a 'o> (ro(ri%tor or a 'o>o6n%r s4all b%n%)it t4% ot4%r. = ,f one of the coCowners acquires so#ethin! throu!h his efforts (actual "ossession of "ro"erty for a certain "eriod) even if others didn-t do anythin! they will also benefit fro# it.

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Obligations and Contracts-Atty. Mison '13-'14

Art. 1113 P%rsons 6it4 'a(a'it, to ali%nat% (ro(%rt, -a, r%noun'% (r%s'ri(tion alr%a*, obtain%* but not t4% rig4t to (r%s'rib% in t4% )utur%. Pr%s'ri(tion is *%%-%* to 4a$% b%%n ta'itl, r%noun'%* 64%n t4% r%nun'iation r%sults )ro- a'ts 64i'4 i-(l, t4% aban*on-%nt o) t4% rig4t a'Duir%* V. RENOUNCE ENT OF RIG!T TO PRESCRIPTION &hen so#eone has acquired a "rescri"tive ri!ht on so#ethin! whereby his liability should be dee#ed e.tin!uish if he does acts which show that he waives this ri!ht (like "ro#ises to "ay the indebtedness a!ain) the "rescri"tion will no lon!er a""lyCCClike a new "ro#ise to "ay, new contract Art. 111C All t4ings 64i'4 ar% 6it4in t4% 'o--%r'% o) -%n ar% sus'%(tibl% o) (r%s'ri(tion5 unl%ss ot4%r6is% (ro$i*%*. Pro(%rt, o) t4% Stat% or an, o) its sub*i$isions not (atri-onial in '4ara't%r s4all not b% t4% obF%'t o) (r%s'ri(tion. VI. PROPERTIES SUB<ECT AN" NOT SUB<ECT TO PRESCRIPTION Public do#inionA 0.Those intended for "ublic use (roads, canals, rivers, torrents, "orts, and brid!es) 5.Those which belon! to the state without bein! for "ublic use and are intended for so#e "ublic service for develo"#ent of national wealth. 6. (ivers and their natural beds 8.Continuos or inter#ittent waters B.&aters risin! continuously or inter#ittently on lands of "ublic do#inion D.4akes and la!oons for#ed by nature Art. 1112 Cr%*itors an* all ot4%r (%rsons int%r%st%* in -a8ing t4% (r%s'ri(tion %))%'ti$% -a, a$ail t4%-s%l$%s t4%r%o) not6it4stan*ing t4% %&(r%ss or ta'it r%nun'iation b, t4% *%btor or (ro(ri%tor. VII. #AIVER OF PRESCRIPTION #ILL NOT PREVENT PERSONS IN INTEREST FRO INVO9ING PRESCRIPTION = Those that are interested "arties to a debt such as a !uarantor are released once "rescri"tion sets in even if the debtor waives his ri!ht to "rescri"tion Art. 1117. T4% (ro$isions o) t4% (r%s%nt Titl% ar% un*%rstoo* to b% 6it4out (r%Fu*i'% to 64at in t4is Co*% or in s(%'ial la6s is %stablis4%* 6it4 r%s(%'t to s(%'i)i' 'as%s o) (r%s'ri(tion. / More s"ecific "rovision in other titles will "revail. Art. 111=. Pr%s'ri(tion alr%a*, running b%)or% t4% %))%'ti$it, o) t4is 'o*% s4all b% go$%rn%* b, la6s (r%$iousl, in )or'%5 but i) sin'% t4% ti-% t4is Co*% too8 %))%'t t4% %ntir% (%rio* 4%r%in r%Duir%* )or (r%s'ri(tion s4oul* la(s%5 t4% (r%s%nt 'o*% s4all b% a((li'abl% %$%n t4oug4 b, t4% )or-%r la6s a long%r (%rio* -ig4t b% r%Duir%*. +EN RULE+ the shorter "eriod will be a""lied. 0.Period under the old law is still runnin! which "rovides a different "eriod for the sa#e situation, civil code shall "revail if it has already la"sed thru the civil code (6E years under the old law and 01 years "asses, new civil code co#es and there is 05 years left, if the new civil code "rovides that "rescri"tion is 0E years then that will "revailFthe shorter "eriod) 5.,f "rescri"tive "eriod under old law is still runnin! and the balance is less then the "eriod in new civil code then old "eriod will a""ly

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