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BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 1
MOTO-Q NOTES
Morales, Occiano, Tongcua, Occiano, Quitain
Atty. Crisostomo Uribe
Notes in Civil Law Review 2
(1) Law; Art. 2167. When through an accident
or other cause a person is injured or
(2) Contracts; becomes seriously ill, and he is treated
or helped while he is not in a condition
(3) Quasi-contracts; to give consent to a contract, he shall
be liable to pay for the services of the
physician or other person aiding him,
(4) Acts or omissions punished
unless the service has been rendered
by law; and
out of pure generosity.
(5) Quasi-delicts. (1089a)
Art. 2168. When during a fire, flood,
storm, or other calamity, property is
QUASI CONTRACTS: saved from destruction by another
person without the knowledge of the
Kinds: owner, the latter is bound to pay the
former just compensation.
1.Nominate:
Art. 2169. When the government,
a.) solutio indebiti
upon the failure of any person to
b.) Negotiorum gestio
comply with health or safety
regulations concerning property,
2. Innominate – Articles 2164-2175
undertakes to do the necessary work,
even over his objection, he shall be
SECTION 3. - Other Quasi-Contracts
liable to pay the expenses.
Art. 2164. When, without the
knowledge of the person obliged to Art. 2170. When by accident or other
give support, it is given by a stranger, fortuitous event, movables separately
the latter shall have a right to claim pertaining to two or more persons are
the same from the former, unless it commingled or confused, the rules on
appears that he gave it out of piety co-ownership shall be applicable.
and without intention of being repaid.
(1894a) Art. 2171. The rights and obligations
of the finder of lost personal property
Art. 2165. When funeral expenses are shall be governed by Articles 719 and
borne by a third person, without the 720.
knowledge of those relatives who were
obliged to give support to the Art. 2172. The right of every
deceased, said relatives shall possessor in good faith to
reimburse the third person, should the reimbursement for necessary and
latter claim reimbursement. (1894a) useful expenses is governed by Article
546.
Art. 2166. When the person obliged to
support an orphan, or an insane or Art. 2173. When a third person,
other indigent person unjustly refuses without the knowledge of the debtor,
to give support to the latter, any third pays the debt, the rights of the former
person may furnish support to the are governed by Articles 1236 and
needy individual, with right of 1237.
reimbursement from the person
obliged to give support. The provisions Art. 2174. When in a small community
of this article apply when the father or a nationality of the inhabitants of age
mother of a child under eighteen years decide upon a measure for protection
of age unjustly refuses to support him. against lawlessness, fire, flood, storm
or other calamity, any one who
objects to the plan and refuses to
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 2
MOTO-Q NOTES
Morales, Occiano, Tongcua, Occiano, Quitain
Atty. Crisostomo Uribe
Notes in Civil Law Review 2
contribute to the expenses but is
benefited by the project as executed
shall be liable to pay his share of said Q: Is innominate quasi contract
expenses. exclusive?
A: A shall be indebted to B
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 3
MOTO-Q NOTES
Morales, Occiano, Tongcua, Occiano, Quitain
Atty. Crisostomo Uribe
Notes in Civil Law Review 2
Cangco v. Manila Railroad (18 Phil July 7, 2007 (7/7/07)
768)
Compliance of Obligation; specific
Q: What were the defendant's obligation of the debtor; different
defenses? kinds of obligation – joint solidary.
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 4
MOTO-Q NOTES
Morales, Occiano, Tongcua, Occiano, Quitain
Atty. Crisostomo Uribe
Notes in Civil Law Review 2
obligation imposes reciprocal A: When he loses the right to make
prestations upon the parties, the fruits use of the period. If debtor has
and interests during the pendency of promised, in this case the debtor did
the condition shall be deemed to have not promise anything.
been mutually compensated. If the
obligation is unilateral, the debtor Q: If insolvent, will he lose his right?
shall appropriate the fruits and
interests received, unless from the A: No, if he furnishes a guaranty which
nature and circumstances of the is acceptable to the creditor.
obligation it should be inferred that
the intention of the person
Q: How will he be insolvent?
constituting the same was different.
A: by giving one or more of his
Reciprocal – sale
property.
Unilateral – donation
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 5
MOTO-Q NOTES
Morales, Occiano, Tongcua, Occiano, Quitain
Atty. Crisostomo Uribe
Notes in Civil Law Review 2
Lim v. People (133 SCRA 333) Art. 1202. The debtor shall lose the
right of choice when among the
-> merely an agent; 1197 is not prestations whereby he is alternatively
applicable. Period “as soon as sold” bound, only one is practicable. (1134)
Millares v. Hernando (151 SCRA 484) Art. 1203. If through the creditor's
acts the debtor cannot make a choice
-> 1197 is not applicable. according to the terms of the
obligation, the latter may rescind the
contract with damages. (n)
Art. 1197. If the obligation does not
fix a period, but from its nature and
the circumstances it can be inferred Art. 1204. The creditor shall have a
that a period was intended, the courts right to indemnity for damages when,
may fix the duration thereof. through the fault of the debtor, all the
things which are alternatively the
object of the obligation have been lost,
The courts shall also fix the duration
or the compliance of the obligation has
of the period when it depends upon
become impossible.
the will of the debtor.
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 6
MOTO-Q NOTES
Morales, Occiano, Tongcua, Occiano, Quitain
Atty. Crisostomo Uribe
Notes in Civil Law Review 2
has disappeared, with a right to from the day when the selection has
damages; been communicated to the debtor.
Art. 1206. When only one prestation IF FAULT WAS DUE TO ONE OF THE
has been agreed upon, but the obligor PARTIES; MAKE A DISTINCTION, WHO
may render another in substitution, HAS AT FAULT AND WHO HAS THE
the obligation is called facultative. CHOICE:
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 7
MOTO-Q NOTES
Morales, Occiano, Tongcua, Occiano, Quitain
Atty. Crisostomo Uribe
Notes in Civil Law Review 2
In Facultative: involves 2 or more Art. 1208. If from the law, or the
prestations but only one is due. nature or the wording of the
obligations to which the preceding
- if one is lost, depends if there article refers the contrary does not
was a communication. appear, the credit or debt shall be
presumed to be divided into as many
Tolentino: if debtor destroys the shares as there are creditors or
substitute, it doesn’t matter. debtors, the credits or debts being
considered distinct from one another,
subject to the Rules of Court
Q: What if debtor refuses to make
governing the multiplicity of suits.
a choice?
(1138a)
A: Creditor file an action in the
Art. 1209. If the division is impossible,
alternative.
the right of the creditors may be
prejudiced only by their collective
Final exams/ midterms (might be acts, and the debt can be enforced
asked) only by proceeding against all the
debtors. If one of the latter should be
In July 1, 2003, A and B entered into insolvent, the others shall not be liable
an agreement. When it fell due, B for his share. (1139)
failed to fulfill and was in delay. (Sir
said that he is not in delay, because Art. 1210. The indivisibility of an
there was no demand.) obligation does not necessarily give
rise to solidarity. Nor does solidarity of
Q: When can debtor make a choice of itself imply indivisibility. (n)
the substitution?
Art. 1211. Solidarity may exist
A: He can make a choice even before it although the creditors and the debtors
becomes due and demandable. may not be bound in the same manner
and by the same periods and
Facultative vs. Penal clause (there conditions. (1140)
should be non-compliance.)
Art. 1212. Each one of the solidary
AS TO THE RIGHTS AND creditors may do whatever may be
OBLIGATION OF MULTIPLE useful to the others, but not anything
PARTIES: which may be prejudicial to the latter.
(1141a)
SECTION 4. - Joint and Solidary
Obligations Art. 1213. A solidary creditor cannot
assign his rights without the consent
Art. 1207. The concurrence of two or of the others. (n)
more creditors or of two or more
debtors in one and the same Art. 1214. The debtor may pay any
obligation does not imply that each one of the solidary creditors; but if
one of the former has a right to any demand, judicial or extrajudicial,
demand, or that each one of the latter has been made by one of them,
is bound to render, entire compliance payment should be made to him.
with the prestation. There is a solidary (1142a)
liability only when the obligation
expressly so states, or when the law Art. 1215. Novation, compensation,
or the nature of the obligation requires confusion or remission of the debt,
solidarity. (1137a) made by any of the solidary creditors
or with any of the solidary debtors,
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 8
MOTO-Q NOTES
Morales, Occiano, Tongcua, Occiano, Quitain
Atty. Crisostomo Uribe
Notes in Civil Law Review 2
shall extinguish the obligation, without in case the debt had been totally paid
prejudice to the provisions of Article by anyone of them before the
1219. remission was effected. (1146a)
The creditor who may have executed Art. 1220. The remission of the whole
any of these acts, as well as he who obligation, obtained by one of the
collects the debt, shall be liable to the solidary debtors, does not entitle him
others for the share in the obligation to reimbursement from his co-debtors.
corresponding to them. (1143) (n)
Art. 1216. The creditor may proceed Art. 1221. If the thing has been lost or
against any one of the solidary if the prestation has become
debtors or some or all of them impossible without the fault of the
simultaneously. The demand made solidary debtors, the obligation shall
against one of them shall not be an be extinguished.
obstacle to those which may
subsequently be directed against the If there was fault on the part of any
others, so long as the debt has not one of them, all shall be responsible to
been fully collected. (1144a) the creditor, for the price and the
payment of damages and interest,
Art. 1217. Payment made by one of without prejudice to their action
the solidary debtors extinguishes the against the guilty or negligent debtor.
obligation. If two or more solidary
debtors offer to pay, the creditor may If through a fortuitous event, the thing
choose which offer to accept. is lost or the performance has become
impossible after one of the solidary
He who made the payment may claim debtors has incurred in delay through
from his co-debtors only the share the judicial or extrajudicial demand
which corresponds to each, with the upon him by the creditor, the
interest for the payment already provisions of the preceding paragraph
made. If the payment is made before shall apply. (1147a)
the debt is due, no interest for the
intervening period may be demanded. Art. 1222. A solidary debtor may, in
actions filed by the creditor, avail
When one of the solidary debtors himself of all defenses which are
cannot, because of his insolvency, derived from the nature of the
reimburse his share to the debtor obligation and of those which are
paying the obligation, such share shall personal to him, or pertain to his own
be borne by all his co-debtors, in share. With respect to those which
proportion to the debt of each. personally belong to the others, he
(1145a) may avail himself thereof only as
regards that part of the debt for which
Art. 1218. Payment by a solidary the latter are responsible. (1148a)
debtor shall not entitle him to
reimbursement from his co-debtors if
such payment is made after the 1. Joint obligation
obligation has prescribed or become 2. Solidary obligation
illegal. (n)
In the exams if A, B and C are debtors
Art. 1219. The remission made by the and X and Y are creditors, and it
creditor of the share which affects one speaks of solidarity, presume solidarity
of the solidary debtors does not on both sides.
release the latter from his
responsibility towards the co-debtors,
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 9
MOTO-Q NOTES
Morales, Occiano, Tongcua, Occiano, Quitain
Atty. Crisostomo Uribe
Notes in Civil Law Review 2
BAR EXAM QUESTION: (2) Where the partnership in
the course of its business
Q: A and B obliged themselves to receives money or property of a
deliver 1thousand pesos worth of third person and the money or
specific sacks of rice to X and Y. What property so received is
is the type of obligation? misapplied by any partner while
it is in the custody of the
A: It is a joint obligation unless there partnership. (n)
is a stipulation; the law requires it; the
nature of the obligation requires it. Art. 1824. All partners are liable
solidarily with the partnership for
Q: B delivered entire 1 thousand pesos everything chargeable to the
to X, can Y compel B to deliver? partnership under Articles 1822 and
1823. (n)
A: Yes. Because the obligation is joint.
NATURE OF THE OBLIGATION
WHICH REQUIRES SOLIDARITY:
Solidary:
Example:
1. Joint and several.
2. jointly and severally.
1. Liability arising from human
relations. (torts-2194)
Ronquillo v. CA (132 SCRA 274)
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 10
MOTO-Q NOTES
Morales, Occiano, Tongcua, Occiano, Quitain
Atty. Crisostomo Uribe
Notes in Civil Law Review 2
Q: if X remitted entire obligation in
favor of A, can Y still collect from B
What if there was an agreement? A = and C?
½; B = ¼; C =1/4; X = ¾ ; Y = ¼
A: Yes.
A: If joint- X with respect to A can
demand 45; Q: If solidary, C became insolvent,
how much can X demand?
Q: If mixed:
A: 120. The share of 1 solidary debtor
A: X= 90; Y = 30; X may demand shall be shouldered by other solidary
P22.50 from A. debtors.
Passive solidarity:
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 11
MOTO-Q NOTES
Morales, Occiano, Tongcua, Occiano, Quitain
Atty. Crisostomo Uribe
Notes in Civil Law Review 2
Q: If the ground is subject to different Q: If X demands payment, A paid Y,
conditions? can X still demand payment from A?
Who has the right to choose?
A: Yes. The debts are separate and
distinct in joint. Action shall not inure A: Depends on the agreement.
to X.
Q: What if there is no agreement?
Q: If ground is minority. May it
prosper? A: Tolentino- should be treated like
solidary. Payment should be made to
A: No, it is an absolute defense. the solidary creditor who demanded
first.
Q: If dismissed because contract is
void, will it prosper? * Sir does not agree! Rules on
alternative obligation should govern
A: No. because under the law solidarity is not
presumed hence disjunctive is not one
Q: if solidary? of it.
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 12
MOTO-Q NOTES
Morales, Occiano, Tongcua, Occiano, Quitain
Atty. Crisostomo Uribe
Notes in Civil Law Review 2
Art. 2209. If the obligation consists in Exception: if the basis is the nullity of
the payment of a sum of money, and the obligation there can be a penalty.
the debtor incurs in delay, the
indemnity for damages, there being no Example:Foreigners who contracted
stipulation to the contrary, shall be the Filipinos usually penalty is provided in
payment of the interest agreed upon, case contract is declared void. In this
and in the absence of stipulation, the case the nullity of the principal does
legal interest, which is six per cent per not affect the penalty.
annum. (1108)
BREACH OF OBLIGATION:
Bachrach v. Espiritu 52 PHIL 346
Q: Who can be held liable?
Facts: There was a sale of 2 trucks
with interest of 12% for the unpaid A: Those who are enumerated in
portion and a penalty of 25%. Article 1170; hence, anyone.
Held: Parties expressly stipulated the Art. 1170. Those who in the
payment of interest hence liable, the performance of their obligations are
penalty was reduced to 10% because guilty of fraud, negligence, or delay,
there was partial performance; and those who in any manner
usurious. contravene the tenor thereof, are
liable for damages. (1101)
* no need to present proof of damages
as long as there is breach of the FRAUD:
obligation.
1. Fraud in contract – art. 1338
Q: May the aggrieved party be able to
compel the other party to pay penalty
Art. 1338. There is fraud when,
plus performance?
through insidious words or
machinations of one of the contracting
A: The general rule is they may not, parties, the other is induced to enter
however if it is clearly granted, they into a contract which, without them,
may. he would not have agreed to. (1269)
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 13
MOTO-Q NOTES
Morales, Occiano, Tongcua, Occiano, Quitain
Atty. Crisostomo Uribe
Notes in Civil Law Review 2
DELAY:
The negligence in this case was (2) When from the nature and
considered gross in character. the circumstances of the
obligation it appears that the
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 14
MOTO-Q NOTES
Morales, Occiano, Tongcua, Occiano, Quitain
Atty. Crisostomo Uribe
Notes in Civil Law Review 2
designation of the time when which, though foreseen, were
the thing is to be delivered or inevitable. (1105a)
the service is to be rendered
was a controlling motive for the - it is the happening of a
establishment of the contract; fortuitous event. It applies to
or any kind of obligation.
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 15
MOTO-Q NOTES
Morales, Occiano, Tongcua, Occiano, Quitain
Atty. Crisostomo Uribe
Notes in Civil Law Review 2
there should be no concurring fourth of the value of the things
negligence. which are the object thereof;
Art. 1191. The power to rescind (5) All other contracts specially
obligations is implied in reciprocal declared by law to be subject
ones, in case one of the obligors to rescission. (1291a)
should not comply with what is
incumbent upon him. If court declared the act as rescissory,
it will retroact from the time notice
The injured party may choose between was given to the other party.
the fulfillment and the rescission of
the obligation, with the payment of Q: Why is there a need to file a
damages in either case. He may also rescission with the courts when it can
seek rescission, even after he has be extrajudicial?
chosen fulfillment, if the latter should
become impossible. A: Because a party cannot take the
law in his own hands especially if
The court shall decree the rescission there is recovery needed.
claimed, unless there be just cause
authorizing the fixing of a period. UP v. de los Angeles (35 SCRA 102)
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 16
MOTO-Q NOTES
Morales, Occiano, Tongcua, Occiano, Quitain
Atty. Crisostomo Uribe
Notes in Civil Law Review 2
of the land was doubled. Seller offered while he is in possession of
to return the 100 thousand pesos. them;
Buyer refused and offered to pay the
balance and asked seller to sign. (2) In case of the insolvency of
Seller filed an action for rescission. Is the buyer, a right of stopping
the action proper? the goods in transitu after he
has parted with the possession
A: No. The seller was not the of them;
aggrieved party. Rescission as a
remedy maybe invoked only by the (3) A right of resale as limited
aggrieved party. by this Title;
Art. 1526. Subject to the provisions of This same rule shall be observed if he
this Title, notwithstanding that the does it in contravention of the tenor of
ownership in the goods may have the obligation. Furthermore, it may be
passed to the buyer, the unpaid seller decreed that what has been poorly
of goods, as such, has: done be undone. (1098)
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 17
MOTO-Q NOTES
Morales, Occiano, Tongcua, Occiano, Quitain
Atty. Crisostomo Uribe
Notes in Civil Law Review 2
1. accion pauliana – to be discussed in (6) By novation.
rescissible contracts.
Other causes of extinguishment of
2. accion subrogatoria – creditor may obligations, such as annulment,
be subrogated to the right of the rescission, fulfillment of a resolutory
debtor as to 3rd persons. condition, and prescription, are
governed elsewhere in this Code.
- pertains to obligation to give; (1156a)
monetary obligation. It does not
pertain to purely personal right.
Example: acts of agency. - It presupposes that there is an
existing valid obligation.
Q: What is the extent of liability?
Recission – principal remedy is under
A: 2236, applies to present and future article 1191.
property.
Art. 1191. The power to rescind
Art. 2236. The debtor is liable with all obligations is implied in reciprocal
his property, present and future, for ones, in case one of the obligors
the fulfillment of his obligations, should not comply with what is
subject to the exemptions provided by incumbent upon him.
law. (1911a)
The injured party may choose between
- If a person is judicially declared the fulfillment and the rescission of
to be insolvent, when he the obligation, with the payment of
inherits, the future property is damages in either case. He may also
exempt. seek rescission, even after he has
chosen fulfillment, if the latter should
Family Home: May be a subject for tax become impossible.
nonpayment, creditors for
construction, claim of laborers and The court shall decree the rescission
mortgagee. (Rules of Court rule 39, claimed, unless there be just cause
sec.13) authorizing the fixing of a period.
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 18
MOTO-Q NOTES
Morales, Occiano, Tongcua, Occiano, Quitain
Atty. Crisostomo Uribe
Notes in Civil Law Review 2
A: Death - To the extent of personal - May apply to all kinds of
obligation to do. It does not extinguish obligation.
property rights. Eg. Agency – death of
an agent; Partnership – death of a Rules:
partner.
a.) As to person who pays.
Q: Fulfillment of resolutory condition in b.) As to whom payment is made.
1231 pertains to? c.) Prestation in obligation.
d.) Date, time and place.
A: Happening of a resolutory
condition. a.) person who pays.
A: Fortuitous events are not modes of Q: Who are those who have interest?
extinguishment. Only results to loss of
the thing due. A: Joint debtors have interest in the
fulfillment of the entire obligation,
- Insolvency per se is not a mode those who are subsidiary liable.
of extinguishment, there must (guarantors, mortgagors, pledgors.)
be a judicial declaration.
Q: If a third person pays, if he has
Q: What about renunciation by the interest, what happens?
creditor?
A: Subrogation.
A: Not necessarily. If it is gratuitous, it
would fall under - If X is a guarantor, Y is a
condonation/remission. If for a mortgagor who secured debt, Y
consideration, it falls under novation. pays, he shall be subrogated to
the rights of B and can exercise
Q: Compromise? right of a creditor.
- if X pays B, obligation of A to B
A: It may. But it would fall under one is extinguished but accessory
of those mentioned by law; common obligations are not
result reduction of obligation which extinguished. It subsists that is
falls under condonation; if it would fall why X can still foreclose the
under a totally new obligation, it is mortgage.
novation.
Q: A is indebted to B. X pays 100
1. PAYMENT thousand to B for A’s debt. Does A
have a right to recover from A and can
- synonymous with performance. he have a right of foreclosure?
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 19
MOTO-Q NOTES
Morales, Occiano, Tongcua, Occiano, Quitain
Atty. Crisostomo Uribe
Notes in Civil Law Review 2
A: It depends. If A consented, he has Q: X paid B without any intention of
the right. being reimbursed. What if X demanded
the return after one week?
Q: If before X pays, A partially paid 20
thousand, X paid entire 100 thousand, A: Indirect Donation. As far as
how much can Y ask for payment, it is valid and binding.
reimbursement?
- Payor must have the capacity to
A: Only 80 thousand, that which alienate the thing or has free disposal.
redounded to the benefit of A.
b.) as to the person to whom payment
Q: If X pays without the knowledge of is made.
A, can he compel A to pay?
- called payee; normally the creditor.
A: No. He is not subrogated to the
rights of B, hence he cannot foreclose CASE: Arañas v. Tutaan
the mortgage.
- creditor does not have to be a
“consented” – means debtor failed to party. A creditor may be any
object at a reasonable time. person who has the right to
compel the performance.
Q: X had agreement with B without
knowledge of A, can he recover the Eg. A is indebted to B. But the real
payment made? payment should be given to Y; even if
A pays B, Y can still compel A to pay.
A: As long as payment was without
knowledge, third person shall not be - there is also payment to a
subrogated to the rights of the person authorize to receive
creditor. (1236-1237) payment; the law may provide.
Eg. Payment to a sheriff,
Art. 1236. The creditor is not bound to executors and administrators.
accept payment or performance by a
third person who has no interest in the Q: May payment to a wrong person
fulfillment of the obligation, unless extinguish obligation?
there is a stipulation to the contrary.
A: Gen. rule: No! Except: 1. if
Whoever pays for another may payment redounded to the benefit of
demand from the debtor what he has B. Otherwise, obligation is not
paid, except that if he paid without the extinguished.
knowledge or against the will of the
debtor, he can recover only insofar as Q: Who has the burden to prove?
the payment has been beneficial to
the debtor. (1158a)
A: No need to prove if: 1. it was
ratified by the creditor; 2. principle of
Art. 1237. Whoever pays on behalf of estoppel; 3. if the person to whom
the debtor without the knowledge or payment made acquired rights of
against the will of the latter, cannot creditor after the payment.
compel the creditor to subrogate him
in his rights, such as those arising
Q: Are there any more exceptions?
from a mortgage, guaranty, or
penalty. (1159a)
A: Yes. If payment was made in good
faith to a person in possession of the
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 20
MOTO-Q NOTES
Morales, Occiano, Tongcua, Occiano, Quitain
Atty. Crisostomo Uribe
Notes in Civil Law Review 2
credit, not a mere possession of the As to kind of obligation:
instrument.
Q: A is obliged to B. He paid Japanese
Q: X (in possession of PN) demanded yen. Is it valid?
payment from A when the promissory
note became due and demandable, A A: Yes. RA 8183. Payment may be
paid x in good faith. made in any currency as long as
stipulated. Before: RA 529-payment
A: Obligation is extinguished. not in Philippine currency is prohibited.
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A: When it is encashed or through special laws. (1175a)
fault of the debtor when it had been
impaired.
conventional assignment
Q: B owes A 1M in 1968. A claimed
that in 1968, the value of 1M is only requires consent of both parties.
500k compared to the present because
of devaluation, hence he claimed 2M CASE: Filinvest v. Philippine Acetylene
base on Art.1250.
- no dation en pago, the delivery
Art. 1250. In case an extraordinary of the case was not consented
inflation or deflation of the currency to.
stipulated should supervene, the value - Filinvest was only an agent; there
of the currency at the time of the
establishment of the obligation shall
was no transfer of ownership.
be the basis of payment, unless there
is an agreement to the contrary. (n) Dacion en pago Cession
As to transfer of
Is his contention correct? ownership:
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As to effect of General Rule: agreement that they will be
payment: Extinguish only as liable upon default on payment
to the extent of of surety bond, hence no
General rule: the proceeds of obligation yet on that day.
Extinguished only the sale of - SC: Dation en pago may
as to the extent of creditor. pertain to delivery of
value delivered. rights/things.
Exception: Unless
Exception: unless there is an express 2. Application of payments:
stipulated upon agreement.
that anything Problem: X is the creditor. A owes
delivered shall him, 100k, 50k, 20k and 10k.
extend the entire
obligation.General Rules:
Rule: governed by
law on sales only if 1. debtor ha the right to designate to
the pre- existing which payment is to be applied.
obligation is in
money. a.) no partial payment.
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Art. 1255. The debtor may cede or (2) When he is incapacitated to
assign his property to his creditors in receive the payment at the
payment of his debts. This cession, time it is due;
unless there is stipulation to the
contrary, shall only release the debtor (3) When, without just cause,
from responsibility for the net he refuses to give a receipt;
proceeds of the thing assigned. The
agreements which, on the effect of the (4) When two or more persons
cession, are made between the debtor claim the same right to collect;
and his creditors shall be governed by
special laws. (1175a)
(5) When the title of the
obligation has been lost.
(1176a)
Q: How will the proceeds of the sale be
applied?
CASE: Soco v. Militante:
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A: When creditor accepted, even if A: No. This is not a valid obligation
debtor refuses, may extinguish after therefore no extinguishment.
consignation, it retroacts from the
time of delivery. Q: If the thing is lost, who has the
burden to prove?
Q: The obligation was due in January,
1998. There was a tender of payment A: depends on who is in possession of
in January 1, 2000 but was refused. In the thing at the time of the loss.
January 2, 2004, there was However, this rule is not absolute
consignation. In January 2, 2007 there when the loss occurred during the
was a court ruling. Is the debtor liable happening of a calamity, like typhoon.
to pay interest?
Read: Art 1265 and Art 1262.
A: Yes. If from January 1998 he was
already in delay, up to consignation if Art. 1265. Whenever the thing is lost
court ruled to be valid. If the in the possession of the debtor, it shall
consignation was ruled by the court to be presumed that the loss was due to
be invalid, the interest must be from his fault, unless there is proof to the
January 1998 till court ruled. contrary, and without prejudice to the
provisions of article 1165. This
According to Sir: however, mora presumption does not apply in case of
accipiendi.-delay of the creditor to earthquake, flood, storm, or other
accept. Debtor may release himself natural calamity. (1183a)
from the obligation by the
consignation of the thing. Art. 1262. An obligation which consists
in the delivery of a determinate thing
Q: Can debtor withdraw the shall be extinguished if it should be
consignated money? lost or destroyed without the fault of
the debtor, and before he has incurred
A: Yes. If the withdrawal is made in delay.
before acceptance of creditor and
before court ruled on the consignation. When by law or stipulation, the obligor
is liable even for fortuitous events, the
- if creditor accepted and court loss of the thing does not extinguish
ruled, no withdrawal. If no the obligation, and he shall be
ruling yet, it may be withdrawn responsible for damages. The same
if creditor accepted. rule applies when the nature of the
- Revival without consent of obligation requires the assumption of
accessory – creditor is risk. (1182a)
released.
Q: In an agreement between A and B
for construction of house, proceeds
shall be equally distributed from the
LOSS sale. B didn’t give his share in the
house because of the high price of
When not valid? materials. A filed an action. May court
grant the action?
- when it goes out of commerce.
- Prohibited by law. A: No. Because the event of increase
- Impossibility of performance. of price is foreseen. 1267 is not
applicable.
Q: To deliver shabu? Is the obligation
extinguished?
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CASE: Occeña v. Jacobsen by proving that the delivery of the
document was made in virtue of
- court can’t change agreement payment of the debt. (1188)
of the parties.
Art. 1272. Whenever the private
1267 – only difficulty not impossibility. document in which the debt appears is
found in the possession of the debtor,
Art. 1267. When the service has it shall be presumed that the creditor
become so difficult as to be manifestly delivered it voluntarily, unless the
beyond the contemplation of the contrary is proved. (1189)
parties, the obligor may also be
released therefrom, in whole or in Q: X owes A 1M, he lends the same
part. (n) amount to A. Is there condonation?
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Q: May it be made through agreement Art. 1279. In order that compensation
of parties? may be proper, it is necessary:
A: May be. It depends upon the (1) That each one of the
intention. Ex. Merger of rights of a obligors be bound principally,
corporation. and that he be at the same
time a principal creditor of the
Q: By operation of law, can there be other;
confusion?
(2) That both debts consist in a
A: By succession, creditor died, debtor sum of money, or if the things
is son or daughter. due are consumable, they be of
the same kind, and also of the
Q: debtor died, creditor is an heir, can same quality if the latter has
confusion take place? been stated;
A: there can be, when there is (3) That the two debts be due;
acceptance.
(4) That they be liquidated and
Q: A is indebted to B. The debt is demandable;
secured by a mortgage by M on B. Can
there be a confusion of B and M? (5) That over neither of them
there be any retention or
A: No. controversy, commenced by
third persons and
communicated in due time to
Q: If there is an agreement?
the debtor. (1196)
A: No. It will be subrogation. If B
Q: In compensation, is it a reciprocal
assigned his rights to M, but still
obligation?
obligation is not extinguished.
A: Not necessarily.
Q: Will confusion result in total
extinguishment?
Q: When is it a reciprocal obligation?
A: No. In cases of joint obligations, in
1277. A: Reciprocal obligations arise from a
single transaction; contract of sale.
Art. 1277. Confusion does not
extinguish a joint obligation except as Q: What about legal compensation?
regards the share corresponding to Will it take place in reciprocal
the creditor or debtor in whom the two obligations?
characters concur. (1194)
A: Not necessarily. In reciprocal
obligations, there can be none.
COMPENSATION
Q: In partial compensation, is debt
totally extinguished?
Q: If 2 or ore persons are debtors and
creditors, will there be compensation?
A: No. Extinguished as to at least one
debt.
A: No, the requirements must be
complied with. – Art. 1279
Q: In compensation, how many debts
are involved?
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A: 2 or more debts. Q: Give an example of facultative.
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CASE: Francia v. IAC Q: A is the creditor of B worth 100k
secured by a mortgage. B gave 50k. If
SC: There is no compensation when there is a partial compensation, will
Francia paid real property tax to the the mortgage be extinguished?
LG of Pasay. The national government
was the one who expropriated. A: Not necessarily. It depends which
debt is most onerous.
- compensation takes place if
debt became due at the same Q: If there is total compensation, will
time. the mortgage be extinguished?
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A: No. The obligation is not yet due. Q: In ACTIVE SUBJECTIVE, operative
word is subrogated. When does this
Q: A owes B 100k due and happen?
demandable on May 1, 2003. B
assigned it to X on April 1, 2003. A A: 1. by agreement (express);
made the following payments to B:
20k-March 1, 2003; 30K-June 1, 2. art. 1302 – legal subrogation.
2003; 40k-decemeber 1, 2003. On
May 1, 2003, how much may X validly a. Third Party pays creditor without
demand? consent of debtor.
I. Subjective/Personal
(1) When a creditor pays
II. Objective/Real
another creditor who is
III. Mixed
preferred, even without the
debtor's knowledge;
Art. 1291. Obligations may be
modified by:
(1) Changing their object or (2) When a third person, not
principal conditions; interested in the obligation,
pays with the express or tacit
approval of the debtor;
(2) Substituting the person of
the debtor;
(3) When, even without the
knowledge of the debtor, a
(3) Subrogating a third person
person interested in the
in the rights of the creditor.
fulfillment of the obligation
(1203.)
pays, without prejudice to the
effects of confusion as to the
I. Subjective: latter's share. (1210a)
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indebted to C, 100k also. If A does not or such insolvency is of public
pay, can C foreclose the mortgage? knowledge.
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According to sir: It is actually a provision shall apply to judges
payment by mistake therefore solution and government experts who,
indebiti. in any manner whatsoever,
take part in the sale;
In natural
obligations, (5) Justices, judges,
payor knows he prosecuting attorneys, clerks of
can’t be superior and inferior courts,
compelled to and other officers and
pay but employees connected with the
nonetheless administration of justice, the
pays. property and rights in litigation
or levied upon an execution
before the court within whose
II. CONTRACTS jurisdiction or territory they
exercise their respective
- while all contracts are functions; this prohibition
agreements, not all agreements includes the act of acquiring by
are contracts. assignment and shall apply to
lawyers, with respect to the
Prohibited: property and rights which may
be the object of any litigation in
- Auto contracts – a person which they may take part by
contracts himself. virtue of their profession.
- article 1491.
(6) Any others specially
Art. 1491. The following persons disqualified by law. (1459a)
cannot acquire by purchase, even at a
public or judicial auction, either in ELEMENTS OF A CONTRACT:
person or through the mediation of
another: Natural – implied warranties.
(1) The guardian, the property
of the person or persons who
Essential – Consent, Object,
may be under his guardianship;
Consideration
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Void waiver: not contrary to law, morals, good
customs, public order, or public policy.
Example: (1255a)
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and acceptance), real (like deposit, Requisites:
pledge, commodatum requires
delivery), formal/solemn (requires - existence of a valid contract
compliance with certain formalities - knowledge of contract by third
prescribed by law). persons
- interference by third persons
5. Relativity: without legal justification or
excuse.
Art. 1311. Contracts take effect only
between the parties, their assigns and Q: A has a contract with GMA.
heirs, except in case where the rights Subsequently, A entered a contract
and obligations arising from the with ABS-CBN. A was in bad faith. May
contract are not transmissible by their ABS CBN be liable?
nature, or by stipulation or by
provision of law. The heir is not liable A: No. To be liable there must be
beyond the value of the property he malice impugned. Third Party liability
received from the decedent. does not impugn liability of debtor who
violated.
If a contract should contain some
stipulation in favor of a third person, 3. Contracts in fraud of creditors:
he may demand its fulfillment
provided he communicated his Q: A is the debtor of B. A sold his
acceptance to the obligor before its property to C. May B rescind the
revocation. A mere incidental benefit contract between A and C?
or interest of a person is not sufficient.
The contracting parties must have A: Yes.
clearly and deliberately conferred a
favor upon a third person. (1257a) 4. Stipulation pour atrui – stipulation
in favor of third persons. It is not the
General rule: Contracts take effect main agreement.
only between parties, their assigns and
heirs. CASE: Kaufman v. PNB
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B. As to Perfection 4. onerous- always! otherwise
1) Real (Pledge, Commodatum, donation
Mutuum. Deposit) 5. commutative- emptio spei
2) Formal (antichresis; donation)
C. Purpose Subject matter:
D. As to cause » things and rights, service is not
1) onerous included
2) pure beneficience
a) gratuitous As to object:
b) lucrative a. movable
»liberality id the consideration b. immoxable
3) remuneratory
» seller (payment); buyer Concepts involve:
(deliver) a) Recto Law- personal prop by
E. Risk of Fulfillment installment
1) Aleatory b) Maceda- immovable
» sale of hope – emptio spei c) double sale
d) Statute of Frauds
» risk of fulfillment
» insurance Q: As to WON tangible/intangible?
»life annuity
2) commutative A: corporeal (things); incorporeal
F. Name and Designation (rights)
1) Nominate Q: relevant as to what concept?
2) innominate
G. As to subject matter A: delivery
1) Things
2) Right Q: As to validity?
3) Services
A: void, unenforceable, rescissible,
PAQIII/Oct2007 voidable
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A: In conditional sale, ownership A: 1st. depends on manifest intention
depends on the happening of condition of parties.
and it take place by operation of law. Barter = value of thing given as a part
In contract to sell, ownership passes of consideration > money/its
after full payment passes. There is no equivalent; if value of watch >100k
automatic transfer, buyer have right to Sale- if same value
ask execute final deed. Q: A granted B exclusive right (right to
sell within a specific area) to sell
Q: A delivered receipt to B “as partial maong pants to Isabela, before B
payment to my car”, received by D, could sell, his store was burned, can B
balance payable at the end of the be compelled to pay?
month, signed by A.
Is this contract pertaining to a A: contract of sale bec. There is a
contract to sell? stipulation. B is a distributor/dealer
99.99% » Quiroga vs. Parsons- “will
A: NO, there is already transfer of supply the bed and pay price within a
ownership, there was no reservation certain period”. No obli to remit the
as to ownership. price, no stipulation.
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A: not valid. object of sale is subject to administration of justice, the
litigation-actually depends. WON the property and rights in litigation
case is still pending. or levied upon an execution
before the court within whose
Q: 1491 status of contracts jurisdiction or territory they
exercise their respective
A:GR: voidable functions; this prohibition
Except: agents- subject to ratification includes the act of acquiring by
Par.1,2,3 voidable- can be ratified assignment and shall apply to
»private interests is involved. lawyers, with respect to the
4,5,6 void property and rights which may
1,2,3 can be ratified because after be the object of any litigation in
lapse of incapacity, another contract which they may take part by
maybe entered into Rubias VS. Materia virtue of their profession.
Wolfgang vs. Martinez
(6) Any others specially
Art. 1491. The following persons disqualified by law. (1459a)
cannot acquire by purchase, even at a
public or judicial auction, either in
person or through the mediation of Q: If both parties are capacitated to
another: give consent, contract of sale valid?
(1) The guardian, the property
of the person or persons who A: not necessarily because consent of
may be under his guardianship; one might had been vitiated.
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any other provision of law
enabling the apparent owner of A: rights and obligations arising from
goods to dispose of them as if contracts are transmissible
he were the true owner XPN: NATURE, STIP, LAW (right in
thereof; specific partnership property)
A: sale is valid.
Q: contract of sale involving alien.
Q: if no palay is harvested, A is liable
A: depends; if private agricultural, if
A: GR: Yes, liable, if he was at FAULT,
he is seller, valid. If he is the buyer,
except if reason was a FE
GR: NO. XPN: former natural born
citizen.
Q: sale of a sweepstakes ticket
status?
Q: All matters could be a valid subject
matter of sale.
A: depends, if winning ticket not void
A: every matter that can be a subject
Q: A sold B land with right of
matter of contracts in general can be
repurchase within one year, 3 rd month
subject matter of sale (service, things,
sold to C. what if on the 6 th month, A
and rights). Service CAN NOT BE A
offered to repurchase land status of
SUBJECT MATTER OF SALE
sale
Q: For rights to be a valid subject
A: Sale maybe valid. 1465 »
matter. of sale, what are the
1. things (ownership over the thing)
requirements?
subject to a resolutory condition may
»for rights- conclusively presumed to
be the object of the contract of sale.
be valid
2. validity of contract requires
Consent, Price, Object, the fact that it
A: must be transmissible
is present, sale is valid
Q: Sale of the right, known as?
Art. 1465. Things subject to a
A: assignment of rights resolutory condition may be the object
of the contract of sale. (n)
Q: if deed of assignment
Q: Who will have a better right?
A: sale? Not necessarily, if gratuitous-
donation, maybe dation in payment, or A: GR: A EXCEPT: C was a buyer in
a security arrangement. GF, no knowledge of right of
repurchase and right to repurchase
Q: rights arising from contracts WAS NOT ANNOTATED
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1358- not a requirement for the Q: May a person sell something he
validity of contract does not own?
- only goes to the
enforceability A: As to validity, Yes! Sale will
always be valid even if not owned;
ownership of the thing has nothing
Art. 1358. The following must appear to do with validity
in a public document:
Q: What do you call a sale where a
(1) Acts and contracts which person may sell something he does
have for their object the not own?
creation, transmission,
modification or extinguishment A: Statutory Power to sell- 1505
of real rights over immovable
property; sales of real property Q: When should the seller has the
or of an interest therein a right to sell?
governed by Articles 1403, No.
2, and 1405; A: At the time ownership is to pass
If seller has no right to sell,
buyer acquires no better right
(2) The cession, repudiation or
renunciation of hereditary
SCENARIOS WHEN SELLER HAS
rights or of those of the
NO RIGHT TO SELL BUT
conjugal partnership of gains;
OWNERSHIP IS TRANSFERRED
TO THE BUYER
(3) The power to administer
property, or any other power 1) ESTOPPEL
which has for its object an act a) equitable estoppel/estoppel
appearing or which should in pais
appear in a public document, or -led 3rd person to believe…
should prejudice a third b) estoppel by deed-technical
person; estoppel
-Art.1434
(4) The cession of actions or
rights proceeding from an act Q: Who is estopped?
appearing in a public
document. A: the owner,that the seller has no
authority to sell
All other contracts where the amount
involved exceeds five hundred pesos c) estoppel by record-also
must appear in writing, even a private technical estoppel
one. But sales of goods, chattels or
things in action are governed by -estafa,owner testified that he
Articles, 1403, No. 2 and 1405. is not the owner to free the
(1280a) accused (said authorized even
not)
OPTION
2)MERCHANT STORE + GF
founded upon a consideration- * unlawful & stolen-with
no withdrawal allowed reimbursement- Art.559
if option contract perfected, * not unlawful- no recovery-
optionee nay file for damages Art.1505
in case of breach
option money- separated & Art. 1505. Subject to the provisions of
distinct from the price this Title, where goods are sold by a
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person who is not the owner thereof,
and who does not sell them under
authority or with the consent of the CASE:SunBros.vs.Velasco(refrigerator)
owner, the buyer acquires no better
title to the goods than the seller had, *Buyer cannot recover if thing was not
unless the owner of the goods is by his lost/stolen
conduct precluded from denying the
seller's authority to sell. Q: lady owned a painting w/c was
stolen from her, owner of house
Nothing in this Title, however, shall bought from gallery auction, can she
affect: recover?
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Q: Public instrument, signed by INSTANCES WHERE SELLER STILL
notary, ownership passes? THE OWNER DESPITE DELIVERY
Q: When can there be a transfer of Art. 1502. When goods are delivered
ownership even w/o delivery? to the buyer "on sale or return" to give
the buyer an option to return the
A: None! Ownership is transferred only goods instead of paying the price, the
upon delivery ownership passes to the buyer of
delivery, but he may revest the
Q: How many kinds of delivery are ownership in the seller by returning or
there? tendering the goods within the time
fixed in the contract, or, if no time has
A: Two kinds been fixed, within a reasonable time.
1) Actual/Physical (n)
2)Constructive
a) symbolica
b) tradition brevi mano Q: lapse of 12 hrs. will it be
c) longa mano reasonable time as acceptance?
d) constitutum
possesorium A: Yes, depending on the
e) formal delivery circumstances i.e. perishable goods
* there should be delivery=
contract + possession delivery of Q: Contract to sell, when does
public instrument=formal ownership pass?
delivery
A: Upon full payment?when?
Q: Delivery where seller still in -execution of final deed of sale
possession?
Q: if thing is lost/destroyed, who is
A: constitutum possessorium liable?
Symbolica- key to the place
where goods are located A: First to consider if due to FE, who
Longa Manu- why cant be is at FAULT
delivered?
-may only be depository GR: if who is at fault, liable
]
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 42
MOTO-Q NOTES
Morales, Occiano, Tongcua, Occiano, Quitain
Atty. Crisostomo Uribe
Notes in Civil Law Review 2
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 43
MOTO-Q NOTES
Morales, Occiano, Tongcua, Occiano, Quitain
Atty. Crisostomo Uribe
Notes in Civil Law Review 2
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 44
MOTO-Q NOTES
Morales, Occiano, Tongcua, Occiano, Quitain
Atty. Crisostomo Uribe
Notes in Civil Law Review 2
2)(1545) buyer given option to double sale in the case of the 2nd
refuse to proceed with contract buyer)
3) waive the happening of
condition & proceed with the contract Q: How about if somebody was
*mere opinion not breach of already occupying the land, acquired it
warranty unless given by expert. by acquisitive prescription, buyer did
*if warranty is as to title,fitness & not visit land, can he hold seller for
characters, breach of warranty?
mere opinion= express warranty
ex. Fertilizers to yield better harvest A: No!
guarantee ‡ warranty
VENDOR’S LIABILITY IN CASE OF
Art. 1545. Where the obligation of EVICTION (see TABLE 1)
either party to a contract of sale is
subject to any condition which is not Waiver intencionada
performed, such party may refuse to »waiver made by buyer if he already
proceed with the contract or he may knew of the defect of the thing.
waive performance of the condition. If Waiver consciente
the other party has promised that the »waiver made by buyer where both
condition should happen or be buyer & seller knew that there was no
performed, such first mentioned party defect on the thing sold.
may also treat the nonperformance of VENDOR’S LIABILITY IN CASE OF
the condition as a breach of warranty. EVICTION
TABLE 1
IMPLIED WARRANTY Extent of If If there is waiver If there is no
a) warranty against hidden liability of v Vendor in good waiver
vendor e faith
defects n conci intencio Vend Vendee
b) warranty in case of eviction d
o
ente nada ee in in bad
Good faith
c) warranty of quality as to quality, r faith
i
fitness n
b
a
WARRANTY IN CASE OF EVICTION d
f
ai
Q: is it required for buyer to be t
h
deprive? .
1) val
A: also includes peaceful possession ue Y YES NO YES YES
of E
the S
thi
Q: is it possible if buyer is not ng
deprived of ownership but deprived of at
the
possession? tim
e
of
A: Yes, in case of Contract of Lease the
evi
cti
on
REQUIREMENTS:
1) there should be a final judgment
2) income Y NO NO YES YES
in favor of 3rd person or fruits E
-seller must be S
summoned,impleaded
3) cost of Y NO NO YES YES
2) based on a right prior to the sale suit E
3) no valid waiver in the form of S
waiver intencionada
4) expenses Y NO NO YES YES
4) act imputable to the seller after the of contract E
sale (non-payment of taxes, S
5) damages Y NO NO NO YES
and interest E
S
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 45
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Notes in Civil Law Review 2
A: Yes, if vendor was not aware of the
defect if the return price is less than
Warranty Against Hidden Defects the value of the thing at the time of
1) thing is already defective at the loss.
time of sell
2) he would not have bought if he SALE OF ANIMALS WITH DEFECT
knew/bought for less than the Php Redhibitory- when even after the
sale it cannot be seen even by
Q: can buyer not hold seller liable for expert
hidden defects?
Q: If 10 birds,1 defective, can be
A: Yes if buyer was an expert rescind?
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 46
MOTO-Q NOTES
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Atty. Crisostomo Uribe
Notes in Civil Law Review 2
is still warranty as to title & XPN:
warranty against eviction 1) stipulation
2nd hand sale- “as is where is 2) thing delivered produces fruits
basis” 3) if buyer was already in default
after Extra J demand
Q: Is it correct to say that there is (needed if there was stipulation as to
no IW in judicial/ execution sale? payment of price)
contact of sale results to
A: No! there is still warranty by reciprocal obligation
express provision of law- warranty
as to title even to judgment debtor Q: right of inspection, absolute?
except if he was exempted fr. Such
liability by order of the court. A: No, no law providing for such
There are people who cannot Buyer has no right to inspection
be liable for warranties, not preliminary to acceptance
sale without warranty/ Ex.: delivery of mining co. of coal
Ex.: sheriff to NAPOCOR
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 47
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Notes in Civil Law Review 2
»sale on credit not necessarily sale or (1) A lien on the goods or right
installment-maybe on a straight term to retain them for the price
basis while he is in possession of
even only one instrument is them;
paid, already covered by MACEDA
LAW (2) In case of the insolvency of
»60 days grace period without interest the buyer, a right of stopping
if he paid at least 2 yrs.-entitled to the goods in transitu after he
CASH SURRENDER VALUE-50% paid has parted with the possession
by buyer, only up to 90% of them;
Grace Period-claimed only once
every 5 yrs. (3) A right of resale as limited
there must be a delivery to the by this Title;
buyer of cash surrender value
not a mere notice
(4) A right to rescind the sale
REMEDIES FOR BREACH OF
as likewise limited by this Title.
WARRANTY
1) UNPAID SELLER 1526
Where the ownership in the goods has
a. withhold goods
b. stoppage in transit not passed to the buyer, the unpaid
seller has, in addition to his other
c. resale
d. rescind remedies a right of withholding
delivery similar to and coextensive
» GR: the following remedies are
alternative except for letter a and with his rights of lien and stoppage in
transitu where the ownership has
b.
passed to the buyer. (n)
MACEDA LAW
Q: If buyer paid seller a check, can
1526 be invoke?
Q: A sold a house for 10M---
downpayment of 3M was given while
A: Yes if check was dishonored not
remaining 7M will be paid in 60 equal
monthly installment defaulted through the fault of the seller
47th,49th, offered to pay arrears.Seller
cancel the sale,Cancellation Valid?
Q: Remedies exclusive?
A: No. Paid for at least 2 yrs. He is
A: No! he nay file action for specific
entitled to 1 mo.for every year.
performance/ damages
Facts: 46 installments 3 days=90 days
grace period. A is within the grace Q: Even if ownership had passed to
the buyer, may seller invoke 1526?
period to update account.
A: Yes! Ex. Constructive delivery
Q: if seller only paid 80% can he
invoke 1526? POSSESSORY LIEN- right to withhold
the goods
A: Yes! lien – if goods already delivered
the buyer & seller not yet paid
»not required that buyer be insolvent
Art. 1526. Subject to the provisions of
»seller will not lose lien over the goods
this Title, notwithstanding that the
--requiring the buyer to pay
ownership in the goods may have
passed to the buyer, the unpaid seller
STOPPAGE IN TRANSIT
of goods, as such, has:
---seller must have parted possession
---buyer is insolvent
---goods are in transit
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 48
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Notes in Civil Law Review 2
How exercised? By mere notice to A: seller! Is there unjust enrichment?
common carrier No, it was the buyer who was really at
if goods are covered by fault
NDT,NDT should be
surrendered to common carrier Q: If the buyer already acquired
in order for the goods to be no ownership should seller rescind 1st?
longer in transit, buyer should A: No. he can automatically resale as
have obtained it lawfully ruled by SC Katigbak vs.CA
Q: S-------------B
Has possessory lien, Does C RIGHT TO RESCIND
S loses his lien if B sold it to C? ---same requirements in resale except
for perishable goods
A: No. Unless he consented; if B sold
the goods to C covered by NDT & was RECTO LAW 1484
sold by B to C through negotiation & C
bought it in GF Art. 1484. In a contract of sale of
personal property the price of which is
RESALE payable in installments, the vendor
---seller must still have the goods may exercise any of the following
---maybe exercised if buyer is in remedies:
default for unreasonable time; if
perishable goods are involve, if by (1) Exact fulfillment of the
stipulation seller reserves right to obligation, should the vendee
resale fail to pay;
Q: What if goods sold for Php 150,000, Q: What are this recto law & maceda
who is entitled to 50k? law in connection with installment?
A: seller shall not be responsible to the A: Recto law- sale & movable property
buyer for whatever profit he may have on installment
obtained 1) EXACT FULFILLMENT/SPECIFIC
PERFORMANCE
Q: If from 100k, 50k was paid by 2) CANCELLATION
buyer, remaining goods sold for 100k, 3) FORECLOSURE
who is entitled? (alternative in character)
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 49
MOTO-Q NOTES
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Notes in Civil Law Review 2
Q: Sale of jewelry,10M, 100k,(10 yrs. deficiency. May S, foreclose the real
Equal installment),buyer defaulted, 3rd estate mortgage?
installment
A: No! 1484 applicable
A: exact fulfillment is the remedy
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 50
MOTO-Q NOTES
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Notes in Civil Law Review 2
Q: If no fruits at the time of sale, at (3) When upon or after the
the time of repurchase there were expiration of the right to
fruits. repurchase another instrument
extending the period of
A: 75k value of fruits should be redemption or granting a new
divided into proportion counted unto period is executed;
the last anniversary date
(4) When the purchaser retains
BAR EXAM QUESTION: for himself a part of the
purchase price;
Q: A sold to B land w/ right of
repurchase, no fix period as to (5) When the vendor binds
repurchase – when should it be? If A himself to pay the taxes on the
failed to repurchase, what will you thing sold;
suggest to your client?
»4 yrs, ownership of the thing
(6) In any other case where it
delivered to buyer- not absolute
may be fairly inferred that the
ownership-subject to resolutory
real intention of the parties is
condition of proper exercise of right of
that the transaction shall
repurchase
secure the payment of a debt
if seller a retro
or the performance of any
failed,ownership of buyer becomes
other obligation.
absolute? If movable? Yes.
Immovable? Yes!
In any of the foregoing cases, any
FILE ACTION FOR CONSOLIDATION money, fruits, or other benefit to be
OF TITLE NEEDED received by the vendee as rent or
----Consolidation of title needed. Yes otherwise shall be considered as
with respect to immovable, necessary interest which shall be subject to the
for buyer to be able to register the usury laws. (n)
prop in his own name
Q: Why would the CR have
Q: If expiration of date of repurchase, Dr signed a sale w/ right of repurchase
can no longer recover? than a mortgage?
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 51
MOTO-Q NOTES
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Notes in Civil Law Review 2
2) LEGAL- prop. Be annotated at RD, RD send
a) co-owners- any prop another notice to co-owner (deadma!)
b) of adjacent lnd-immovable After more than a year, buyer filed for
Q: Co-owners partition, co-owner received summons,
filed for redemption-prosper?
A B
C D A: Yes! Notice in writing given by
vendor not vendee,not RD
D donated his land to X, Can co
Alternative answer: No! bec. She
owners redeem?
already received notices, the 30 day
period should have already run
A: No! for redemption to exist;
DOROMAL VS. CA notice should be w/
onerous title
deed of sale!
Q: Same table, D sold the land to
TGMOct2007
B, can their be a right of redemption?
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 52
MOTO-Q NOTES
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Atty. Crisostomo Uribe
Notes in Civil Law Review 2
In lease of things, a death of the (4) Public officers and
party does not extinguish the contract employees, the property of the
of lease. State or of any subdivision
It is essentially onerous. thereof, or of any government-
Consensual, Nominate, Bilateral owned or controlled
corporation, or institution, the
CASE:Bagtas- administration of which has
been intrusted to them; this
The 2nd bull was not turned over provision shall apply to judges
due to a fortuitous event- crossfire and government experts who,
during the era of the Huks. Is it a in any manner whatsoever,
contract of commodatum by which the take part in the sale;
government bears the loss?
SC-This is a Lease. (5) Justices, judges,
Bagtas has to pay a certain prosecuting attorneys, clerks of
breeding fee. superior and inferior courts,
and other officers and
Spouses, guardians and those employees connected with the
enumerated under Article 1490 and administration of justice, the
1491 cannot enter into a lease property and rights in litigation
contract with each other. or levied upon an execution
before the court within whose
Art. 1490. The husband and the wife jurisdiction or territory they
cannot sell property to each other, exercise their respective
except: functions; this prohibition
includes the act of acquiring by
(1) When a separation of assignment and shall apply to
property was agreed upon in lawyers, with respect to the
the marriage settlements; or property and rights which may
be the object of any litigation in
(2) When there has been a which they may take part by
judicial separation or property virtue of their profession.
under Article 191. (1458a)
(6) Any others specially
Art. 1491. The following persons disqualified by law. (1459a)
cannot acquire by purchase, even at a
public or judicial auction, either in As to Formalities
person or through the mediation of
another: Q: A appointed B as his agent. A
(1) The guardian, the property withholds no power against B
of the person or persons who granting the latter a Power of
may be under his guardianship; Attorney. B entered into 3
contracts…
(2) Agents, the property whose 1) Contract of lease of
administration or sale may parcel of land for 4 years and a
have been entrusted to them, rental of 60,000php annually.
unless the consent of the 2) Contract of lease of a
principal has been given; parcel of land with a rental on a
monthly basis of 3,000php.
3) Contract of sale of a
(3) Executors and
parcel of land for 3x the value
administrators, the property of
of the land.
the estate under
What is the status of these
administration;
contracts?
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 53
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Notes in Civil Law Review 2
A: Yes.
A: 1) Unenforceable. What is
authorized of B is an act of Q: There was a lease over a fishpond
administration. SPA is needed. for 5 yrs. The rental for next year will
2) Valid and Binding. Rental of an be reduced to ½. However, the
immovable without a fixed period, the harvest was only ½ due to the rebels.
same period as payment of rentals; It The lessee contended that the lease
is an act of administration only. period is extended for 10 yrs now. Will
3) Void. Authorization of the there be a reduction?
agent is not in writing.
A: None. The right of reduction can
CASE Donald Dee- Documentary only be invoked if failure to harvest
formalism is not an element in was due to an extraordinary fortuitous
employment. event such as war, fire, pestilence. It
does not include the intrusion of
BAR EXAM QUESTION: lawless elements, flood, and typhoon.
» reduction can be allowed only in
Q: A leased a cockpit to B. During the cases where B harvested less than one
pendency of the lease, the cockpit half and that it should had been due to
collapsed. Who is liable for the fortuitous event
collapse? »lawless element is not a fortuitous
event
A: Lessor. His is the duty to repair,
unless there’s a stipulation to the Q: Will there be an extension?
contrary.
A: None. Lease is suspended during
CASE:Gonzales v. Mateo- the fortuitous event. He can claim not
to pay the monthly rental.
Lessee is liable because he » Fortuitous event is not a reasonable
agreed to repair. ground for extension but only for
suspension of payment of lease during
BAR EXAM QUESTION: that period
Q: A leased a parcel of land to B for 10 Q: May the lessee sublease with the
years. There was an agreement to consent of the lessor?
extend the Lease and it’s binding. B
put up a 2-storey building. Upon A: Yes. As long as it is not prohibited
expiration of the Lease, B failed to from subleasing. Assignment of lease
renew the Lease. A filed an ejectment is valid if with the consent of the
suit against B. B contended that he is lessor. In sublease, it is valid although
a builder in good faith thus absent consent of the lessor provided
reimbursement of the expenses. it is not prohibited.
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 54
MOTO-Q NOTES
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Notes in Civil Law Review 2
Q: A constructed a building for 5M and
SC- The lease agreement leased it to B. B will be the lessee for
constitutes as an assignment only if 10 years for 100,000/month. After
the lessee absolutely transferred all completion of the construction, B will
his rights to 3rd persons, dissociating become the owner thereof. On the 5 th
rd
himself in the lease. The 3 person year, the entire building was burned. A
becomes the new lessee. constructed another building. Before
»there should be absolute transfer completion, B gave notice to A that he
will continue the lease. Can A refuse B
CASE: Frezel vs. Mariano as lessee?
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 55
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Atty. Crisostomo Uribe
Notes in Civil Law Review 2
either party has previously been
given, it is understood that there is an
implied new lease, not for the period AGENCY vs
of the original contract, but for the
time established in Articles 1682 and
GUARDIANSHIP
Person represented must be Person represented is
1687. The other terms of the original capacitated incapacitated
Pvt/101707
V. AGENCY AGENCY vs PARTNERSHIP
Termination may be by the will It has a separate juridical
Q: baptismal proxy, agency? of either party entity
A: No. political and social relations are Principal- revocation
Agent- withdrawal
not included
»Agency refers only to juridical act
KINDS of AGECY:
- BOUND himself to another
Actual
>objective : execution of juridical
Apparent/Ostensible
act
Agency by estoppel
extinguish legal relationship such
as payment
I. ACTUAL AGENCY
- there must be consent
Mack vs. Cams (?)
- “ agency “ includes instrumentality
as government instrumentality. X is clothed with full authority to
manage restaurant of Y (owner). X
CASE:Quiroga V. Parsons purchased some items from Z. X was
indebted to Z. Y’s defense is that X
– exclusive right to sell is an exclusive was not authorized to purchase.
agency. However, X led other people to believe
that X has authority such as signing as
agent.
Nature of AGENCY vs. SALE
Consensual SC-Estoppel lies. Y is liable.
Nominal
May be Gratuitous Essentially Onerous
*burden: principal II. APPARENT/OSTENSIBLE
*presumption: for
compensation
Preparatory contract
-a means by which other
Rallos vs. Yangco
contracts may enter into.
A sent a letter to B authorizing C to
Based on trust and confidence buy abaca/copra. B transacted with C.
There’s no transfer of Ownership passes upon Consequently, from Jan. 2, the
ownership but only transfer of delivery.
possession. purchases remained unpaid. B
AGENCY vs. CONTRACT FOR A complained to A. A contended that
PIECE OF WORK before Jan. 2 he revoked the
Extent of control by the
Principal over the agent is with
Extent of control by the
Principal over the agent is with
authorization from C. Therefore,
the Result and Manner. the Result only. transactions hereafter are not binding
upon A.
SC-Invoked Article 1873. Revocation is
immaterial. C’s transaction has full
force and effect in exercising authority
AGENCY vs. NEGOTIORUM until rescission. If C is specially
GESTIO informed of the revocation of the
By agreement By law
authorization, B shall also be informed
in the same manner as C.
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 56
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Notes in Civil Law Review 2
- JBL REYES: If B had actual However, if the agent accepted a
knowledge of the revocation, he special power of attorney and he
cannot hold A liable as it would did nothing, it depends upon the
amount to Bad Faith. kind of business as to consider it as
an implied agency, with the agent
giving his consent. If the principal
Q: What if A actually caused a notice
and agent are engaged in the same
of publication?
business, there is an implied
A: Can still be liable pursuant to Article
agency whereby the agent is
1873
deemed to have given his consent.
Q: Mere silence of agent deem
Art. 1873. If a person specially
accepted agency?
informs another or states by public
A: not necessarily
advertisement that he has given a
»If parties are in the same place, no
power of attorney to a third person,
the latter thereby becomes a duly problem, stipulation on the SPA
authorized agent, in the former case governs
with respect to the person who Q: if not in the same place such as
received the special information, and when using the telegram, if did not
in the latter case with regard to any reply deem accepted?
person. A: It depends on the nature of the
business, if the task is also within the
The power shall continue to be in full nature of the agency, yes.
force until the notice is rescinded in Q: A authorized B to sell land of A in
the same manner in which it was Baguio, did not do anything, Is B an
given. (n) agent?
A: No.
Q: How about if A gave the letter to B
and B accepted?
Classifications of Actual Agency
A: There is an implied agency
as to manner of creation
As to consideration or
express – consent of both
compensation
parties given
Onerous- presumption is for
implied
consideration.
Gratuitous- liability is
CASE: Dela Pena vs. Hidalgo-
mitigated in the part of the
agent.
After the authorization was executed,
the agent appointed a
BAR EXAM QUESTION:
substitute. The principal did
Contract of Agency as to scope of
nothing to repudiate such
authority
appointment.
1. Acts of administration
SC-There is an Implied agency by the
2. Acts of strict dominion
principal’s silence or
inaction. The principal is
Q: In the sale of Rolex, the agent has
deemed to have accepted
no SPA, with the act bind the
the new agency.
principal?
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 57
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Notes in Civil Law Review 2
2.Writing Q: The deceased principal authorized
1. Oral the agent to dispose of his land. The
2.Writing heirs of the principal, however, sold
2.Writing the 12 hectares to B. The agent sold
the same land to C. Who has the
Q: Why is the form of agency peculiar? better right?
A: Because it involves two contracts,
the agency itself and the contract to A: It depends on the authority of the
be contracted by the agent. agent. If it is not in writing, the
contract of sale is void. Thus, C has a
better right.
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 58
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Notes in Civil Law Review 2
- Whether or not the agent is 1872 “transmit”
authorized to sell a parcel of land. 1900
1902 “presentation”
Justice Perfecto: under the SPA, he
has no authority. Good faith is not
within the scope. Art. 1871. Between persons who are
present, the acceptance of the agency
Rely on the provisions of law- the may also be implied if the principal
authority to manage the restaurant delivers his power of attorney to the
includes the authority to buy the agent and the latter receives it without
equipments. any objection. (n)
Art. 1882. The limits of the agent's Art. 1872. Between persons who are
authority shall not be considered absent, the acceptance of the agency
exceeded should it have been cannot be implied from the silence of
performed in a manner more the agent, except:
advantageous to the principal than
that specified by him. (1715) (1) When the principal
transmits his power of attorney
to the agent, who receives it
Article 1882- Considered within without any objection;
if it is to the advantage of
the Principal. (2) When the principal entrusts to him
by letter or telegram a power of
CASE:Insular Drug- attorney with respect to the business
in which he is habitually engaged as
The agent’s authority to collect money an agent, and he did not reply to the
does not include encashing or letter or telegram. (n)
endorsing of check.
Art. 1900. So far as third persons are
Municipality of Ilo-ilo vs. Evangelista
concerned, an act is deemed to have
been performed within the scope of
»The authority to hire a lawyer the agent's authority, if such act is
includes authority to pay said lawyer. within the terms of the power of
attorney, as written, even if the agent
»If the agent’s authority to has in fact exceeded the limits of his
borrow money and mortgage, authority according to an
he cannot use it to satisfy his understanding between the principal
own debts. and the agent. (n)
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 59
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Notes in Civil Law Review 2
His main obligation is to CARRY The agent is not the insurer of the
OUT THE AGENCY. principal’s success in business.
If the principal died…
GR: The agency is GR: The agent cannot sell the goods
extinguished. on credit.
EXC: If it will endanger the EXC: Without consent of the
Agency, the latter shall be principal, the sale is not void but the
continued principal holds him liable as sale in
cash basis.
Ex: X sold the car to Y with the
breaks in a defective condition Q: When can agent be held liable?
and without the principal’s A: When he bound himself.
knowledge, Y bought the car. Exception:
Therefore, the principal 1. When the principal ratified
incurred loss/damage. 2. When 3rd person informed
(Art. 1888- An agent shall not that agent is acting beyond the
carry out an agency if its scope of his authority
execution would manifestly 3. When agent informed 3rd
result in loss or damage to the person such as when he
principal.) promise to secure ratification
and was not able to
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Atty. Crisostomo Uribe
Notes in Civil Law Review 2
Subagent – does not take the
relationship of B as agent; assistant - For a fortuitous event to be a valid
agent defense, there must be no
concurrent event.
Art. 1892. The agent may appoint a
substitute if the principal has not - However, if it happened today,
prohibited him from doing so; but he Agent is considered to be
shall be responsible for the acts of the negligent. If it happened in the
substitute: 60’s, the agent is not liable.
(1) When he was not given the
power to appoint one; - The SC held that the agent is liable
because there’s negligence.
(2) When he was given such
power, but without designating On Death
the person, and the person Effect of death of the agent
appointed was notoriously It will absolutely
incompetent or insolvent. extinguish the agency. If
the agency is for the
All acts of the substitute appointed benefit of a 3rd person,
against the prohibition of the principal the agency will continue
shall be void. (1721) to be in full force and
effect despite the death
Substitute – “kapalit niya” Article 1892 of the principal.
shall apply Effect of death of the
» if principal was informed of the principal
substitute Article 1892 shall not apply If without knowledge
and the agent is in good
Modes of Extinguishment faith, the agency is
(EDWARD) extinguished but the act
of registration in good
faith even after the
E- expiration of the period death of the principal is
valid as the law says so.
D- death
W- withdrawal
On Revocation
A- accomplishment
May be made anytime; at
R- revocation
will
D- dissolution of entity
Q: If there’s a period, will
» not exclusive, Article 1231 also the revocation before the
applies stipulated period hold the
Other modes may apply to agency. principal liable?
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Notes in Civil Law Review 2
A authorized B to sell the land for Q: Can two corporations organize a general
100M. B did not remit the 100M. What partnership, can a corporation enter into a
was agreed was that B will be the partnership?
agent of A in subdividing the land and A: No! Corporation and partnership may
constituting the house. The proceeds organize a joint venture but they cannot
will go to A as payment. The authority enter into partnership contract
granted was for 10 yrs. On the 5 yr., th » Sir said that Corporation can enter into a
contract of partnership if there was an
A revoked the authority given to B.
express grant of power in its articles of
Was the revocation valid?
incorporation. (Tecson vs. Bolaños)
Q: What is the effect of illegality of contract?
SC: NO. The agency is was coupled Can a partner recover what he had given if
with interest and as such, it cannot be cause was illegal?
validly revoked after the interest A: Yes, because it will result in unjust
ceases; means of fulfilling interest enrichment.
must be different from the Q; How about if both was in pari delicto?
commissioner given; very interest that A: If there was repudiation before there was
an agent is claiming should be stated any damage, the court is in its discretion to
at the SPA without prejudice to his allow recovery
liability if revocation was done in bad
faith
BAR QUESTION: A and B put up a car
Pvt/101707 repair shop. A contributed money while B
contributed his services. A likewise put up a
coffee shop on the left side of the car repair
VI. PARTNERSHIP shop. B likewise engaged in another
business of his own. Are they legally allowed
to venture into such businesses?
BAR EXAM:
A used all his savings to put up a
ANSWER: A under the facts can engage in
restaurant, B gave A 4k as financial
such services since he is only a capitalist
assistance in exchange of 20% profits, 22
partner. As to B, since he is an industrial
years after B filed action demanding profits.
partner, he is prohibited from engaging in
A denied and invoked prescription.
any kind of business without the consent of
A: UP Law Center – Contract of Partneship
the other partners.
exists because they contributed to a
common fund plus there was a stipulation as
to profit. » Partnership may be constituted in any
»Sir said, no contract of partnership exists. other form. – Article 1172
There was no agreement to contribute to a
common fund, only financial assistance. Q: How about 3rd person who contracted
with Partnership with unlawful object, can
Q: Partnership vs. Co-ownership recover?
A: Contract of partnership is created by A: Yes, as long as no knowledge of the
mere agreement while co-ownership is illegality
created by operation of law.
When one or more parties
Essential Element: contribute an immoveable
» object is to engage in a lawful activity
General Partnership and Limited If there is no inventory – VOID;
Partnership (relevant only in Limited If there is an inventory, but not put in
Partnership) writing
Q: Can the spouses enter into a limited
partnership and engage in real estate If such partnership is not put into
business public instrument -> it will not affect
A: Yes, prohibition is only on universal the validity of the partnership
partnership agreement, though it may affect the
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Atty. Crisostomo Uribe
Notes in Civil Law Review 2
greater efficacy or the enforceability b) both debts are due and
of the contract. demandable
c) receipt was given in the
Case: Hernandez v. name of the
Angeles partnership
d) payment should be
» Form is not necessary for the validity, applied to the most
maybe necessary for enforceability onerous
»ENTITY THEORY/LEGAL PERSON LIMITED PARTNER IS LIABLE WHEN:
THEORY means that a partnership has a a) he participated in the
juridical personality separate and distinct management
from the partners b) if surname appears in the
partnership name except;
A general partner can be an a) already existing surname
industrial partner. b) if also the surname of a
Can a partner be both capitalist and general partnership
industrial partner at the same time? c) if at the same time general
YES or limited partner
Can a limited partner be both an
industrial and a capitalist partner at » Article 1892 subagent is not equivalent to
the same time? NO substitute
CLASSIFICATION OF PARTNERSHIP: » in having a substitute, must be with the
I. As to Object: knowledge of the principal. (De la Peña vs.
a) present property Hidalgo)
b) profits
II. a) General » all general partners
b) Limited » one or more general Proportional Application of Debts:
and one or more limited partner; a
limited One obtaining is a managing
partner (has no right to partake in the partner;
management Both debts are due and
Commercial Partnership » governed by demandable;
Code of Commerce If the partner receipted the
III. As to term: amount in the name of the
a) maybe for a particular partnership
undertaking (Ortega vs. CA) estoppel
agency
Admission of a new partner If the debt is more onerous
»If given a question concerning
the liability of a newly-admitted Property Rights of a Partner
partner for a partnership
obligation, ask, “when was the see the 3 major
partnership obligation incurred? classification of the
Was it incurred PRIOR TO / property rights of
AFTER the new partner’s partners
admission to the partnership? plus right to formal
accounting
Q: ABC partnership admitted D as new plus the right to the
partner. The ABC partnership incurred the access of partnership
following liabilities. ABC- 100; X- 30K, A- book
50k. What is the liability of D as a new
partner? If A is a managing partner. Rights in specific
A: GR: up to capital contribution only unless partnership property = a
he bound himself to be solidarily liable partner is co-owner with his
NOTA BENE: application of proportionate partners of specific
sharing: partnership property; see
a) if A is a general partner 1811 = co-ownership sui
generis.
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 63
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Atty. Crisostomo Uribe
Notes in Civil Law Review 2
Cf. co-ownership in
partnership law and co-
ownership in property law.
In the former, a co-owner BAR QUESTION: W (industrial partner), X
may sell his share even (industrial partner), Y (P 50 K) and Z (P 20
without the knowledge and K) entered into a partnership agreement.
consent of the other co- W and X will act as managing partners.
owners, whereas, in Thereafter, two persons were appointed:.
partnership law, such would W and X appointed the SECRETARY, one
not be allowed. of the two persons appointed. Y and Z
Interest in partnership = however opposed such appointment. The
pertains to the share in ACCOUNTANT, the other person named,
profits and surplus. was appointed by W and Z, whose
appointment was however opposed by X
and Y. Whose appointment will bind the
Sharing of the Partners in the Profits and Partnership?
in the Losses
ANSWER: The secretary’s appointment will
if there is a STIPULATION (except bind the partnership. As to the accountant, it
when there is a stipulation where should be resolved as to the partnership
one or more of the parties shall be having the controlling interest, such
excluded from the profits, the controlling interest being dependent on the
stipulation shall be VOID) aggregate capital contributions of those who
if there is NO STIPULATION , appointed vis-à-vis those who opposed.
sharing shall be in proportion to the
capital contributions.
What about the Industrial Partner?
=> give him the value of his service;
the balance of which should be MANAGEMENT ARRANGEMENTS
distributes to the capitalist partners One managing partner
in proportion to their capital Solidary management
contributions. Joint Management
Partner as Agent
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Notes in Civil Law Review 2
If services, SPECIFIC LIABILITY AS TO:
PERFORMANCE WOULD NOT Contractual Obiligation = joint
LIE. Remedy is to demand the value Joint and solidarily 1822 & 1823 – tortious/
of service plus damages incurred by wrongful acts of partners
partnership
PROPERTY RIGHTS: Q: Bought set of SCRA in the account of the
1) specific partnership property » a partners partnership, can partnership be liable?
is a co-owner as to his co-parners not A: It depends if the act is for the apparent
carrying of the usual business of
partnership;l co-ownership is sui generis partnership.
2) interest Q: Can partnership be liable even if not
3) participate related to the business?
A: Yes, if such party was not authorized
Q: Can a creditor of a co-owner levy such
interest of a co-owner in a partnership land DISSOLUTION:
A: Yes, but he cannot do so if indebted to » change in relation where partner ceases to
partnership be associated in carrying on the business of
partnership
Q: W and X are managing partners, Y-50k, »marriage of partners not a ground
Z-20k. W and X were appointed as secretary
by 2 persons, opposed to by Y and Z; Entry of a new Partner
accountant appointed by W and Z but
opposed by X and Y General Rule: It will dissolve
A: In the 1st case, YZ has no right to oppose. the partnership
In the second case, controlling partners shall Exceptions:
prevail based on capital contribution. a) act is necessary to wing
Appointment shall not be valid having up partnership affairs
opposed by Y who has controlling interest. b)
This case is called subsidiary management CAUSES OF DISSOLUTION
1) extrajudicial
a) voluntary » No. 1 & 2 of Article
FIDUCIARY OBLIGATIONS; Honesty and 1830
Good faith starts during the negotiation b) involuntary » No. 3-7
stage. Obligation would continue not only up 2) judicial Article 1831
to dissolution but also until termination. Q: A B C assigned whole interest to X
against the will of A & B and decided to
REMEDIES OF A NON-DEFAULTING dissolve the partnership, X filed for a
PARTNER dissolution, which dissolution will be valid?
A: That made by A & B is valid. X was mere
Specific performance assignee, no legal interest to file dissolution
Dissolution for he is not by law a partner.
RESCISSION IS NOT A REMEDY
DEATH OF A PARTNER:
AS TO DISTRIBUTION: » if general, partnership is not extinguished
»As to stipulation, if it excludes a partner, if biz nis continued or not stated due to
stipulation is void not the partnership. unanimous consent.
Share in the Losses:
1. determine agreement EFFECT of DISSOLUTION:
Q: if one partner is excluded valid? » termination of authority of partners.
A: depends: if capitalist, stipulation is void; if
industrial partner was excluded – valid
among partners but void as to third persons.
–Article 1816
2. if no stipulation to losses, use stipulation
on the sharing of profits
3. no stipulation at all = share in their capital
contribution
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 65
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Atty. Crisostomo Uribe
Notes in Civil Law Review 2
credit
not all credit transactions
are contracts (judicial
LIABILITY OF NOT GIVEN POWER TO APPOINT
SUBSTITUTE deposits, legal deposits)
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Atty. Crisostomo Uribe
Notes in Civil Law Review 2
essentially gratuitous,
unless stipulated otherwise Pledge/ Mortgage
irregular deposits- a
depositary has the right to use the free disposition
thing means that the mortgagor should
in deposit, object cannot be capacitated
refer to future thing because it pledge may be
requires delivery perfected even if delivery is merely
constructive
characteristics liability of the pledgor
or mortgagor is only up to the value
a) principal of the pledged/ mortgaged
b) real property. Nawala na sa kanya yung
c) gratuitous or onerous property, kaya tama na yun unless
expressly stipulated otherwise
kinds of deposit creditor cannot
a) judicial recover if property is
b) extra-judicial covered by Recto Law
no right of
i. Conventional / voluntary redemption in chattel
ii. Necessary mortgage and pledge
iii. Legal
TABLE 1
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Atty. Crisostomo Uribe
Notes in Civil Law Review 2
BILATERAL
ANTICHRESIS A conditional Solemn.
obligation
may also be Amount of
secured. principal and
interest must
be in writing, if
not void.
TABLE 2
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Atty. Crisostomo Uribe
Notes in Civil Law Review 2
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO 69
TABLE 3: RIGHTS OF MORTGAGOR
KINDS RIGHT OF SALE/ RIGHT TO RIGHT TO SPECIFIC PERFORMANCE
FORECLOSURE BID RECOVER
DEFICIENCY
Article 2112 The YES. VOLUNTARY: None YES, but pledged deemed abandoned.
PLEDGE creditor to Provided even if there’s
whom the credit he is the stipulation.
has not been not the Article 2112, Article
satisfied in due only 2115
time pledged bidder.
may proceed Article LEGAL: YES
before a NP. X x 2113
x
1. Judicial YES. Except on YES, but chattel mortgage deemed abandoned.
CHATTEL Foreclosure installment.
MORTGAGE Sec.13 Article
1508
2. Extrajudicial
Foreclosure Sec.
14 Article 1508
REAL ESTATE 1. Judicial (Rule YES. Rules of Court YES, but security deemed abandoned.
MORTGAGE 68 of the Rules on Foreclosure.
of Court)
2. Extrajudicial
Foreclosure Act.
3135
ANTICHRESIS
TABLE 4: RIGHTS OF PLEDGOR
KINDS RIGHT TO ALIENATE RIGHT TO RIGHT TO RECOVER EXCESS EQUITY OF REDEMPTION
BID
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Civil Law Review 2
75
Bogs Quitain; Tere Morales; Paulette Tongcua; Tino Occiano; Budz Occiano